First Choice Bancorp (NASDAQ: FCBP) (“us,” “we,” “our,” or the
“Company”), the holding company of First Choice Bank (the “Bank”),
today reported net income of $5.7 million for the second quarter of
2020, or $0.49 per diluted share, compared to net income of $4.5
million, or $0.39 per diluted share, for the first quarter of 2020.
Pre-tax pre-provision income was $10.3 million for the second
quarter of 2020, an increase of $1.2 million, compared to the
pre-tax pre-provision income of $9.1 million for the first quarter
of 2020. Financial results for the second quarter of 2020 include a
provision for loan losses and unfunded loan commitments of $2.4
million, or $0.15 per diluted share, compared to $2.7 million, or
$0.16 per diluted share in the first quarter of 2020.
“During the COVID-19 crisis, our Board and team
members have worked tirelessly to be a source of strength to our
customers,” said Peter Hui, Chairman of the Board. “We are
fortunate to have a strong base of clients with the capital and
liquidity to be able to support their businesses as they weather
this crisis. Through the efforts of our team, we have provided our
clients with additional liquidity through the Paycheck Protection
Program and we are now an approved lenders in the Main Street
Lending Program. The Company has maintained strong earnings for our
shareholders, which has allowed us to continue our quarterly
dividend of $0.25 per share.”
“We had a highly productive quarter that
resulted in strong balance sheet growth and the successful
resolution of some lingering problem credits that reduced our
non-performing assets,” said Robert M. Franko, President and CEO.
“In terms of asset quality, we are encouraged by the trends we are
seeing. Our Small Business Administration (SBA) borrowers are
receiving tremendous relief thanks to the SBA’s 6-month deferred
payment program. In addition, we provided COVID-19-related
deferments for about a third of the loans in our portfolio, and a
number of those clients have returned to regular payment programs.
Through our PPP efforts, we added a significant number of new
client relationships that contributed to the strong inflows we saw
in core deposits during the quarter. We have a healthy pipeline of
new business development opportunities that we will continue to
service through the PPP program and our traditional lending
activities. We are optimistic about being an approved lender in the
Main Street Lending Program and hope to provide much needed
liquidity to those that need it. While the ongoing pandemic
continues to create uncertainty, we believe we are well positioned
to continue delivering solid financial results in the second half
of the year. On a final note, I am particularly proud of all of our
team members, many working from home, who have continued to carry
out our commitment to being First in Speed, Service and
Solutions.”
STATEMENT OF INCOME
Net Interest Income
Net interest income for the second quarter of
2020 totaled $20.3 million, an increase of $1.1 million from the
first quarter of 2020 due to slightly higher interest income of
$100 thousand, coupled with lower interest expense of $1.0 million.
The increase in net interest income was due primarily to interest
income and fees recognized for PPP loans and reductions in the
costs of interest-bearing deposits and borrowings. The decrease in
loan yields and cost of funds for the second quarter of 2020
reflected the full quarter impact of the 150 basis point reduction
in the target Federal Funds rate at the end of March 2020. Average
loans increased by $333.5 million, of which $287.3 million was from
PPP loans, net of earned fees, funded in the second quarter of
2020. PPP loans carry a fixed rate of 1.0% with a two-year
contractual maturity, and the weighted average rate for the
processing fee is 3.16%. These loans contributed $1.9 million to
interest income for the second quarter of 2020. The decrease in
interest expense for the second quarter of 2020 was due primarily
to lower market interest rates and the Company’s proactive strategy
to lower the cost of interest-bearing customer deposits, replace
high rate brokered deposits and take advantage of the lower cost of
borrowings and wholesale funding facilities. Interest expense on
interest-bearing deposits decreased $930 thousand, coupled with a
decrease of $101 thousand on total borrowings. Interest expense on
the PPP Liquidity Facility (“PPPLF”) was $112 thousand for the
second quarter of 2020.
Net Interest Margin
Net interest margin for the second quarter of
2020 decreased 66 basis points to 4.12% from 4.78% for the first
quarter of 2020. The decrease in the net interest margin was due
primarily to a 101 basis point decrease in loan yields (including
fees and discounts), partially offset by a change in the
interest-earning asset mix, and a 38 basis point decrease in
funding costs. The decrease in the interest-earning assets yield
and loan yield were driven by the lower market interest rates and
the lower-yielding PPP loans. The yield on loans decreased to 4.94%
for the second quarter of 2020, compared to 5.95% for the first
quarter of 2020. The weighted average loan yield for PPP loans was
2.64%, which lowered the total loan yield by 46 basis points for
the second quarter of 2020.
The cost of funds decreased to 0.34% for the
second quarter of 2020, compared to 0.72% for the first quarter of
2020, due primarily to lower market interest rates and a change in
the funding mix with a higher percentage of average
noninterest-bearing demand deposits, and a higher percentage of
average total borrowings. Average borrowings increased $53.3
million to $145.4 million, coupled with an increase of $128.0
million from the PPPLF with an average rate of 0.35% to support the
PPP loans funded. The average cost of borrowings decreased 110
basis points to 0.54% for the second quarter of 2020, compared to
1.64% for the first quarter of 2020. Average senior secured notes
decreased $1.3 million to $6.8 million and the average cost of such
borrowings decreased 117 basis points to 3.39%. Average
noninterest-bearing demand deposits increased $151.4 million to
$783.3 million and represented 50.7% of total average deposits for
the second quarter of 2020, compared to $631.8 million, or 47.0% of
total average deposits, for the first quarter of 2020. The increase
in average noninterest-bearing demand deposits was primarily due to
new accounts opened for PPP loans with an average balance of $116
million for the second quarter of 2020. The total cost of deposits
decreased 32 basis points to 0.31% for the second quarter of 2020,
compared to 0.63% for the first quarter of 2020. The discount
accretion from loans acquired in a business combination of $421
thousand contributed 9 basis points to the net interest margin in
the second quarter of 2020 compared to $624 thousand and 16 basis
points in the first quarter of 2020.
Provision for Loan Losses
The provision for loan losses for the second
quarter of 2020 decreased $600 thousand to $2.1 million, compared
to $2.7 million for the first quarter of 2020. Approximately $1.4
million of the second quarter provision was driven by an increase
in qualitative factors relating to the COVID-19 pandemic and
macro-economic conditions including a reserve of $138 thousand for
accrued interest receivable related to loans on deferment. While
the economy gradually reopened during the second quarter of 2020,
the Governor of California has since implemented further
restrictions and the timing of an economic recovery remains
uncertain. The assumptions underlying the COVID-19 related
qualitative factors included (a) uncertain and volatile
macro-economic conditions caused by the pandemic; (b) the high
unemployment rate; and (c) the loan deferment program. No provision
for loan losses on PPP loans was recognized in the second quarter
of 2020 as the SBA guarantees 100% of loans funded under the
program.
Noninterest Income
Noninterest income for the second quarter of
2020 was $1.1 million, a decrease of $360 thousand from $1.4
million for the first quarter of 2020 due primarily to lower gains
on loan sales of $377 thousand and lower net servicing fees of $233
thousand, partially offset by higher other income of $358 thousand.
There were no loans sold during the second quarter of 2020,
compared to $3.4 million in loans sold and a gain on sale of $377
thousand in the first quarter of 2020. The $233 thousand decrease
in net servicing fees was due primarily to higher amortization from
early loan pay-offs which totaled $277 thousand for the second
quarter of 2020 compared to $69 thousand for the first quarter of
2020. Gains, included in other income, on transfer of loan
collateral to foreclosed assets of $153 thousand were recognized
for the second quarter of 2020. There was no similar income in the
first quarter of 2020. Other income for the second quarter of 2020
also included a Bank Enterprise Award of $233 thousand from the
U.S.Treasury’s Community Development Financial Institutions Fund to
recognize the Bank for providing small business loans or commercial
real estate development loans to businesses located in distressed
communities. There was no similar income in the first quarter of
2020.
Noninterest Expense
Noninterest expense decreased $419 thousand to
$11.1 million for the second quarter of 2020 from $11.5 million for
the first quarter of 2020. This decrease was due primarily to lower
salaries and employee benefit expenses, lower loan related expenses
and lower customer service related expenses, offset partially by
higher data processing, FDIC assessment fees and other
expenses.
The $844 thousand decrease in salaries and
employee benefits was due to lower incentive accruals resulting
from a decrease in organic loan production in the second quarter of
2020 and lower payroll taxes and employee benefits resulting from a
seasonally higher first quarter. The $49 thousand decrease in loan
related expenses was due primarily to a recovery of expenses in the
second quarter of 2020. The $44 thousand decrease in customer
service related expenses was due primarily to lower average demand
deposits for certain deposit accounts during the second quarter of
2020.
The $137 thousand increase in FDIC assessment
fees was due to Small Bank Assessment Credits received in the first
quarter of 2020 for which there are no further credits. The
increase in other expenses related primarily to a $300 thousand
increase in the provision for unfunded loan commitments resulting
from an increase in unfunded loan commitments and historical loss
rates.
The efficiency ratio remained favorable at 52.0%
in the second quarter of 2020, compared to 56.0% in the first
quarter of 2020. The lower efficiency ratio in the second quarter
of 2020 was driven by higher revenue including the benefits of the
PPP loan volume.
Income Taxes
Income tax expense was $2.4 million for the
second quarter of 2020 compared to $1.8 million for the first
quarter of 2020. The effective tax rate was 29.8% for the second
quarter of 2020 and 28.6% for the first quarter of 2020. The
effective tax rate for the full year of 2020 is expected to be in
the range of 29% to 30%.
STATEMENT OF FINANCIAL
CONDITION
Loan Portfolio
Total loans held for investment increased $393.6
million in the second quarter of 2020, or 27.4%, to $1.83 billion
at June 30, 2020 primarily due to the Company’s participation in
the PPP loan program and an increase in commercial real estate
loans, partially offset by a decrease in commercial and industrial
loans, residential loans and construction and land loans.
PPP loans, net of unearned fees of $11.5
million, totaled $389.2 million at June 30, 2020. The unearned fees
are being accreted based on the two-year contractual maturity. The
Company anticipates that the SBA may forgive a significant number
of PPP loans in the third and fourth quarters of 2020, at which
point the recognition of fee income will be accelerated. New loan
commitments from organic growth, excluding PPP loans, totaled $94.3
million for the second quarter of 2020, compared to $188.5 million
for the first quarter of 2020. The second quarter new loan
commitments included $50.8 million in construction and commercial
real estate loans, $23.5 million in commercial and industrial
loans, $12.1 million in SBA loans held for investment and $7.9
million of SBA loans held for sale. Total unfunded loan commitments
increased $11.1 million to $393.4 million at June 30, 2020 from
$382.3 million at March 31, 2020 due to lower utilization and
higher repayment on existing lines of credit. During the second
quarter of 2020, borrower repayments on existing lines of credit
totaled $44.8 million, partially offset by drawdowns and new
commitments.
Loan Deferment
At June 30, 2020, the Company had 520 loans
totaling $626 million with a 90-day principal and/or interest
deferral for COVID-related reasons. No deferred payment loans which
met the requirement under Section 4013 of the CARES Act were
reported as past due loans or troubled debt restructurings
(“TDRs”). The Company currently expects that the majority of these
loans will resume payments in the third quarter of 2020. Total
accrued interest receivable related to these loans on deferment was
$10 million with an aforementioned reserve of $138 thousand at June
30, 2020. Borrowers are contractually required to resume making
full payments after the deferral period ends. As of July 16, 2020,
232 loans with a net carrying value of $397 million at June 30,
2020, or 63% of total loan balance, resumed making payments or paid
off, and only four loans totaling $11 million were granted an
additional 90-day deferment. The remainder is expected to resume
payments as scheduled.
Deposits
Total deposits increased $254.0 million from the
prior quarter to $1.60 billion at June 30, 2020 due to new
noninterest-bearing deposit accounts opened for PPP loans, and
strong core deposit growth.
Noninterest-bearing deposits totaled $789.8
million, an increase of $162.0 million in the second quarter of
2020. Approximately $83 million of the increase was due to new
deposit accounts for PPP loans at June 30, 2020. The remaining
increase was due to core deposit growth. Interest-bearing
nonmaturity deposits increased $95.3 million primarily due to an
increase in core deposits from the FDIC Insurance Program through
Demand Deposit Marketplace (“DDM”) and other financial
institutions. Time deposits had a slight decrease of $3.4 million
due primarily to a decrease in customer time deposits, offset by
higher brokered time deposits. At June 30, 2020, brokered time
deposits totaled $115.5 million, of which $78.6 million are
callable in six months. Noninterest-bearing deposits were $789.8
million and represented 49.2% of total deposits at June 30, 2020,
compared to $627.8 million and 46.5% of total deposits at March 31,
2020.
Borrowing
Being an SBA-qualified PPP lender, the Company
participated in the PPPLF established by the Federal Reserve. At
June 30, 2020, the Company borrowed $179.1 million under the PPPLF
with a fixed-rate of 0.35% and pledged PPP loans as collateral to
secure the borrowings. The Company also participated in the FHLB
San Francisco’s new Recovery Advance loan program for $10 million
at zero percent interest at June 30, 2020 with maturity dates in
November 2020 and May 2021.
Credit Quality
Nonperforming loans decreased to $8.4 million at
June 30, 2020, compared to $9.1 million at March 31, 2020, and
represented 0.46% and 0.64% of total loans held for investment,
respectively. The decrease in nonperforming loans was due to three
SBA loans that were charged-off or paid off, partially offset by an
increase of one loan past due 90 days or more that was still
accruing interest at June 30, 2020. There were no loans over 90
days past due that were still accruing interest at March 31, 2020.
Net charge-offs for the second quarter of 2020 were $496 thousand,
or 0.11% of average loans on an annualized basis, compared to $4
thousand or 0.001% of average loans on an annualized basis for the
first quarter of 2020. Foreclosed assets increased to $602 thousand
at June 30, 2020. There were no foreclosed assets in the first
quarter of 2020. Nonperforming assets totaled $9.0 million at June
30, 2020, compared to $9.1 million at March 31, 2020, and
represented 0.41% and 0.51% of total assets, respectively.
Loan delinquencies (30-89 days past due) totaled
$353 thousand at June 30, 2020, compared to $2.3 million at March
31, 2020. Deferred payment loans which met the requirement under
Section 4013 of the CARES Act are not considered past due or
TDRs.
The allowance for loan losses, including $138
thousand for accrued interest receivable related to loans on
deferment, increased 9.9% to $17.8 million and represented 0.97% of
total loans held for investment and 211.8% of nonperforming loans
at June 30, 2020, compared with 1.13% and 177.5% at March 31, 2020,
respectively. The allowance for loan losses as a percentage of
total loan held for investments without PPP loans was 1.24% at June
30, 2020. At June 30, 2020, the net carrying value of acquired
loans totaled $187.3 million and included a remaining net discount
of $4.8 million. The discount is available to absorb losses on the
acquired loans and represented 2.6% of the net carrying value of
acquired loans and 0.26% of total gross loans held for
investment.
CAPITAL POSITION
Capital Ratios
The Bank opted into the Community Bank Leverage
Ratio (“CBLR”) framework, beginning with the Call Report filed for
the first quarter of 2020. The CBLR replaces the risk-based and
leverage capital requirements in the generally applicable capital
rules. The minimum CBLR was originally 9%, however, on April 23,
2020, the federal banking regulators, implementing the applicable
provisions of the CARES Act, issued interim rules which modified
the CBLR framework so that: (i) beginning in the second quarter
2020 and until the end of the year, a banking organization that has
a leverage ratio of 8% or greater and meets certain other criteria
may elect to use the CBLR framework; and (ii) community banking
organizations will have until January 1, 2022, before the CBLR
requirement is re-established at greater than 9%. Under the interim
rules, the minimum CBLR will be 8% beginning in the second quarter
and for the remainder of calendar year 2020, 8.5% for calendar year
2021, and 9% thereafter. The interim rules also maintain a
two-quarter grace period for a qualifying community banking
organization whose leverage ratio falls no more than 1% below the
applicable community bank leverage ratio. In addition, assets
originated under the PPP and covered loans pledged under the PPPLF
are deducted from the average total consolidated assets for
purposes of the leverage ratio calculation. However, such assets
are included in total consolidated assets for purposes of
determining the eligibility to elect the CBLR framework.
At June 30, 2020, the Bank’s preliminary CBLR
ratio was 10.31% which exceeded all regulatory capital requirements
under the CBLR framework and the Bank was considered to be
‘‘well-capitalized’’.
Stock Repurchase Program
The Company suspended the stock repurchase
program on March 17, 2020. During the second quarter of 2020, there
were no repurchases of common stock, compared to 38,411 shares of
common stock repurchased at an average price of $22.34 and a total
cost of $858 thousand in the first quarter of 2020. The remaining
number of shares authorized to be repurchased under this program
was 695,489 shares at June 30, 2020. Suspending the stock
repurchase program allows the Company to preserve capital and
provide liquidity during the COVID-19 pandemic to meet the credit
needs of the Company’s customers, as well as support small
businesses and the local economies served by the Company through
the Bank’s lending and other important services.
About First Choice Bancorp
First Choice Bancorp, headquartered in Cerritos,
California, is the sole shareholder of and the registered bank
holding company for, First Choice Bank. As of June 30, 2020, First
Choice Bancorp had total consolidated assets of $2.22 billion.
First Choice Bank, also headquartered in Cerritos, California, is a
community-based financial institution that serves primarily
commercial and consumer clients in diverse communities and
specializes in loans to small- to medium-sized businesses and
private banking clients, commercial and industrial loans, and
commercial real estate loans with a specialization in providing
financial solutions for the hospitality industry. First Choice Bank
is a Preferred Small Business Administration (SBA) Lender. First
Choice Bank conducts business through nine full-service branches
and two loan production offices located in Los Angeles, Orange and
San Diego Counties. Founded in 2005, First Choice Bank has quickly
become a leading provider of financial services that enable our
customers to grow, maintain strength, and achieve their business
objectives. We strive to surpass our clients’ expectations through
our efficiency, personalized services and financial solutions and
professionalism and are committed to being “First in Speed,
Service, and Solutions.” First Choice Bank is a strong believer in
social justice and equality and is proud of its cultural- and
gender-diverse workforce. As of June 30, 2020, more than 70% of the
Company’s total workforce identified as ethnic minorities and more
than 65% of its workforce and more than 50% of its senior
management identified as female. First Choice Bancorp stock is
traded on the Nasdaq Capital Market under the ticker symbol
“FCBP.”
First Choice Bank’s website is
www.FirstChoiceBankCA.com.
Non-GAAP Financial Measures
This press release contains certain non-GAAP
financial measures in addition to results presented in accordance
with GAAP. The Company uses certain non-GAAP financial measures to
provide meaningful supplemental information regarding the Company’s
results of operations and financial condition and to enhance
investors’ overall understanding of such results of operations and
financial condition, permit investors to effectively analyze
financial trends of our business activities, and enhance
comparability with peers across the financial services sector.
These non-GAAP financial measures are not a substitute for GAAP
measures and should be read in conjunction with the Company’s GAAP
financial information. A reconciliation of non-GAAP financial
measures to GAAP financial measures is included in the accompanying
financial tables.
Forward-Looking Statements
In addition to historical information, certain
matters set forth herein constitute forward-looking statements
within the meaning of the Private Securities Litigation Reform Act
of 1995, including forward-looking statements relating to
management’s beliefs, projections and assumptions concerning future
results and events. Forward-looking statements include descriptions
of management’s plans or objectives for future operations, products
or services, and forecasts of the Company’s revenues, earnings or
other measures of economic performance. As well, forward-looking
statements may relate to future outlook and anticipated events,
such as the Company’s plans and protocols with regard to managing
potential impacts related to the COVID-19 virus, the Company’s
strategy to help keep its workforce and local communities safe, the
Company’s business continuity protocols and the potential impact on
operations related to COVID-19, and the Company’s ability to
successfully advance its development and expansion projects and
achieve its growth objectives. These forward-looking statements
involve risks and uncertainties, based on the beliefs and
assumptions of management and on the information available to
management at the time that this presentation was prepared and can
be identified by the fact that they do not relate strictly to
historical or current facts. They often include the words or
phrases such as “aim,” “can,” “may,” “could,” “predict,” “should,”
“will,” “would,” “believe,” “anticipate,” “estimate,” “expect,”
“hope,” “intend,” “plan,” “potential,” ‘project,” “will likely
result,” “continue,” “seek,” “shall,” “possible,” “projection,”
“optimistic,” and “outlook,” and variations of these words and
similar expressions or the negative version of those words or
phrases.
Forward-looking statements involve substantial
risks and uncertainties, many of which are difficult to predict and
are generally beyond our control. Many factors could cause actual
results to differ materially from those contemplated by these
forward-looking statements. The Company does not undertake, and
specifically disclaims any obligation, to update any
forward-looking statements to reflect occurrences or unanticipated
events or circumstances after the date of such statements except as
required by law. Any statements about future operating results,
such as those concerning accretion and dilution to the Company’s
earnings or shareholders, are for illustrative purposes only, are
not forecasts, and actual results may differ. Risks and
uncertainties that could cause our financial performance to differ
materially from our goals, plans, expectations and projections
expressed in forward-looking statements include those set forth in
our filings with the SEC, including under Item 1A of our Annual
Report on Form 10-K for the fiscal year ended December 31, 2019 as
may be supplemental and/or amended by our Quarterly Reports on Form
10-Q as filed subsequent thereto.
ContactsFirst Choice BancorpRobert M. Franko,
562.345.9241President & Chief Executive Officer
First Choice BancorpKhoi D. Dang, Esq.,
562.263.8336Executive Vice President and General Counsel
First Choice Bancorp and
Subsidiary
Financial Highlights and Selected Ratios
(unaudited):
|
|
At or for the Three Months Ended |
|
|
At or for the Six Months Ended |
|
|
|
June 30, 2020 |
|
|
March 31, 2020 |
|
|
June 30, 2019 |
|
|
June 30, 2020 |
|
|
June 30, 2019 |
|
|
|
(dollars in thousands, except per share amounts) |
|
Total interest and dividend
income |
|
$ |
21,844 |
|
|
$ |
21,744 |
|
|
$ |
22,219 |
|
|
$ |
43,588 |
|
|
$ |
44,058 |
|
Total interest expense |
|
|
1,540 |
|
|
|
2,571 |
|
|
|
3,383 |
|
|
|
4,111 |
|
|
|
6,030 |
|
Net interest income |
|
|
20,304 |
|
|
|
19,173 |
|
|
|
18,836 |
|
|
|
39,477 |
|
|
|
38,028 |
|
Total noninterest income |
|
|
1,055 |
|
|
|
1,415 |
|
|
|
2,322 |
|
|
|
2,470 |
|
|
|
4,444 |
|
Total net interest income and
noninterest income |
|
|
21,359 |
|
|
|
20,588 |
|
|
|
21,158 |
|
|
|
41,947 |
|
|
|
42,472 |
|
Total noninterest expense |
|
|
11,100 |
|
|
|
11,519 |
|
|
|
10,605 |
|
|
|
22,619 |
|
|
|
21,305 |
|
Pre-tax pre-provision income
(1) |
|
|
10,259 |
|
|
|
9,069 |
|
|
|
10,553 |
|
|
|
19,328 |
|
|
|
21,167 |
|
Provision for loan losses
(2) |
|
|
2,100 |
|
|
|
2,700 |
|
|
|
550 |
|
|
|
4,800 |
|
|
|
900 |
|
Income before taxes |
|
|
8,159 |
|
|
|
6,369 |
|
|
|
10,003 |
|
|
|
14,528 |
|
|
|
20,267 |
|
Income taxes |
|
|
2,429 |
|
|
|
1,823 |
|
|
|
3,192 |
|
|
|
4,252 |
|
|
|
6,448 |
|
NET
INCOME |
|
$ |
5,730 |
|
|
$ |
4,546 |
|
|
$ |
6,811 |
|
|
$ |
10,276 |
|
|
$ |
13,819 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets |
|
$ |
2,223,603 |
|
|
$ |
1,775,662 |
|
|
$ |
1,730,433 |
|
|
$ |
2,223,603 |
|
|
$ |
1,730,433 |
|
Total loans held for
investment |
|
|
1,831,619 |
|
|
|
1,438,055 |
|
|
|
1,336,015 |
|
|
|
1,831,619 |
|
|
|
1,336,015 |
|
Noninterest-bearing
deposits |
|
|
789,770 |
|
|
|
627,793 |
|
|
|
547,434 |
|
|
|
789,770 |
|
|
|
547,434 |
|
Total deposits |
|
|
1,604,997 |
|
|
|
1,351,040 |
|
|
|
1,255,878 |
|
|
|
1,604,997 |
|
|
|
1,255,878 |
|
Dividends declared per common
share |
|
$ |
0.25 |
|
|
$ |
0.25 |
|
|
$ |
0.20 |
|
|
$ |
0.50 |
|
|
$ |
0.40 |
|
Net income per
share-diluted |
|
$ |
0.49 |
|
|
$ |
0.39 |
|
|
$ |
0.58 |
|
|
$ |
0.88 |
|
|
$ |
1.17 |
|
Return on average assets |
|
|
1.09 |
% |
|
|
1.06 |
% |
|
|
1.73 |
% |
|
|
1.08 |
% |
|
|
1.80 |
% |
Return on average equity |
|
|
8.59 |
% |
|
|
6.90 |
% |
|
|
10.86 |
% |
|
|
7.75 |
% |
|
|
11.15 |
% |
Return on average tangible
common equity (1) |
|
|
12.18 |
% |
|
|
9.84 |
% |
|
|
15.89 |
% |
|
|
11.02 |
% |
|
|
16.38 |
% |
Net interest margin |
|
|
4.12 |
% |
|
|
4.78 |
% |
|
|
5.14 |
% |
|
|
4.42 |
% |
|
|
5.32 |
% |
Average loan yield |
|
|
4.94 |
% |
|
|
5.95 |
% |
|
|
6.42 |
% |
|
|
5.39 |
% |
|
|
6.52 |
% |
Cost of deposits |
|
|
0.31 |
% |
|
|
0.63 |
% |
|
|
0.89 |
% |
|
|
0.46 |
% |
|
|
0.82 |
% |
Cost of funds |
|
|
0.34 |
% |
|
|
0.72 |
% |
|
|
1.03 |
% |
|
|
0.51 |
% |
|
|
0.94 |
% |
Efficiency ratio (1) |
|
|
52.0 |
% |
|
|
56.0 |
% |
|
|
50.1 |
% |
|
|
53.9 |
% |
|
|
50.2 |
% |
Noninterest-bearing deposits
to total deposits |
|
|
49.2 |
% |
|
|
46.5 |
% |
|
|
43.6 |
% |
|
|
49.2 |
% |
|
|
43.6 |
% |
Equity to assets ratio |
|
|
12.01 |
% |
|
|
14.83 |
% |
|
|
14.69 |
% |
|
|
12.01 |
% |
|
|
14.69 |
% |
Tangible common equity to
tangible asset ratio (1) |
|
|
8.77 |
% |
|
|
10.87 |
% |
|
|
10.57 |
% |
|
|
8.77 |
% |
|
|
10.57 |
% |
Book value per share |
|
$ |
22.82 |
|
|
$ |
22.58 |
|
|
$ |
21.65 |
|
|
$ |
22.82 |
|
|
$ |
21.65 |
|
Tangible book value per share
(1) |
|
$ |
16.09 |
|
|
$ |
15.81 |
|
|
$ |
14.87 |
|
|
$ |
16.09 |
|
|
$ |
14.87 |
|
(1) |
Non-GAAP measure. See GAAP to non-GAAP Reconciliation. |
(2) |
Includes $138 thousand of reserves for accrued interest receivable
related to loans on deferment for the three months and six months
ended June 30, 2020. |
First Choice Bancorp and
Subsidiary
Condensed Consolidated Balance Sheets
(unaudited)
|
|
June 30, 2020 |
|
|
March 31, 2020 |
|
|
December 31, 2019 |
|
|
|
(dollars in thousands, except per share amounts) |
|
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
Cash and due from banks |
|
$ |
20,954 |
|
|
$ |
12,915 |
|
|
$ |
27,359 |
|
Interest-bearing deposits at
other banks |
|
|
196,875 |
|
|
|
160,662 |
|
|
|
134,442 |
|
Total cash and cash
equivalents |
|
|
217,829 |
|
|
|
173,577 |
|
|
|
161,801 |
|
Investment securities,
available-for-sale |
|
|
36,783 |
|
|
|
38,924 |
|
|
|
26,653 |
|
Investment securities,
held-to-maturity |
|
|
1,691 |
|
|
|
1,702 |
|
|
|
5,056 |
|
Equity securities, at fair
value |
|
|
2,782 |
|
|
|
2,753 |
|
|
|
2,694 |
|
Restricted stock investments,
at cost |
|
|
12,999 |
|
|
|
12,999 |
|
|
|
12,986 |
|
Loans held for sale |
|
|
20,326 |
|
|
|
13,594 |
|
|
|
7,659 |
|
Total loans held for
investment |
|
|
1,831,619 |
|
|
|
1,438,055 |
|
|
|
1,374,675 |
|
Allowance for loan losses
(1) |
|
|
(17,822 |
) |
|
|
(16,218 |
) |
|
|
(13,522 |
) |
Total loans held for
investment, net |
|
|
1,813,797 |
|
|
|
1,421,837 |
|
|
|
1,361,153 |
|
Accrued interest
receivable |
|
|
13,809 |
|
|
|
5,670 |
|
|
|
5,451 |
|
Premises and equipment |
|
|
2,551 |
|
|
|
2,109 |
|
|
|
1,542 |
|
Servicing asset |
|
|
2,516 |
|
|
|
2,988 |
|
|
|
3,202 |
|
Deferred taxes |
|
|
5,829 |
|
|
|
5,469 |
|
|
|
6,163 |
|
Goodwill |
|
|
73,425 |
|
|
|
73,425 |
|
|
|
73,425 |
|
Core deposit intangible |
|
|
5,342 |
|
|
|
5,535 |
|
|
|
5,728 |
|
Foreclosed assets, net |
|
|
602 |
|
|
|
— |
|
|
|
— |
|
Other assets |
|
|
13,322 |
|
|
|
15,080 |
|
|
|
16,811 |
|
TOTAL
ASSETS |
|
$ |
2,223,603 |
|
|
$ |
1,775,662 |
|
|
$ |
1,690,324 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
Deposits: |
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest-bearing
demand |
|
$ |
789,770 |
|
|
$ |
627,793 |
|
|
$ |
626,569 |
|
Money market, interest
checking and savings |
|
|
620,719 |
|
|
|
525,371 |
|
|
|
514,366 |
|
Time deposits |
|
|
194,508 |
|
|
|
197,876 |
|
|
|
172,758 |
|
Total deposits |
|
|
1,604,997 |
|
|
|
1,351,040 |
|
|
|
1,313,693 |
|
Borrowings |
|
|
150,000 |
|
|
|
140,000 |
|
|
|
90,000 |
|
Paycheck Protection Program
Liquidity Facility |
|
|
179,125 |
|
|
|
— |
|
|
|
— |
|
Senior secured debt |
|
|
6,500 |
|
|
|
8,600 |
|
|
|
9,600 |
|
Accrued interest payable and
other liabilities |
|
|
16,032 |
|
|
|
12,715 |
|
|
|
15,226 |
|
Total liabilities |
|
|
1,956,654 |
|
|
|
1,512,355 |
|
|
|
1,428,519 |
|
Total shareholders’
equity |
|
|
266,949 |
|
|
|
263,307 |
|
|
|
261,805 |
|
TOTAL LIABILITIES AND
SHAREHOLDERS’ EQUITY |
|
$ |
2,223,603 |
|
|
$ |
1,775,662 |
|
|
$ |
1,690,324 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares outstanding |
|
|
11,697,766 |
|
|
|
11,662,603 |
|
|
|
11,635,531 |
|
Book value per share |
|
$ |
22.82 |
|
|
$ |
22.58 |
|
|
$ |
22.50 |
|
Tangible book value per share
(2) |
|
$ |
16.09 |
|
|
$ |
15.81 |
|
|
$ |
15.70 |
|
(1 |
) |
Includes $138 thousand of reserves for accrued interest receivable
related to loans on deferment at June 30, 2020. |
(2 |
) |
Non-GAAP measure. See GAAP to non-GAAP Reconciliation. |
First Choice Bancorp and
Subsidiary
Condensed Consolidated Statements of Income
(unaudited)
|
|
Three Months Ended |
|
|
Six Months Ended June 30, |
|
|
|
June 30, 2020 |
|
|
March 31, 2020 |
|
|
June 30, 2019 |
|
|
2020 |
|
|
2019 |
|
|
|
(dollars in thousands, except per share amounts) |
|
INTEREST and DIVIDEND
INCOME |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest and fees on
loans |
|
$ |
21,348 |
|
|
$ |
20,780 |
|
|
$ |
21,344 |
|
|
$ |
42,128 |
|
|
$ |
42,260 |
|
Interest on investment
securities |
|
|
225 |
|
|
|
218 |
|
|
|
215 |
|
|
|
443 |
|
|
|
451 |
|
Interest on deposits at other
financial institutions |
|
|
92 |
|
|
|
501 |
|
|
|
454 |
|
|
|
593 |
|
|
|
899 |
|
Dividends on FHLB and other
stock |
|
|
179 |
|
|
|
245 |
|
|
|
206 |
|
|
|
424 |
|
|
|
448 |
|
Total interest and dividend income |
|
|
21,844 |
|
|
|
21,744 |
|
|
|
22,219 |
|
|
|
43,588 |
|
|
|
44,058 |
|
INTEREST
EXPENSE |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest on savings, interest
checking and money market accounts |
|
|
318 |
|
|
|
1,109 |
|
|
|
1,254 |
|
|
|
1,427 |
|
|
|
2,493 |
|
Interest on time deposits |
|
|
856 |
|
|
|
995 |
|
|
|
1,463 |
|
|
|
1,851 |
|
|
|
2,468 |
|
Interest on borrowings |
|
|
197 |
|
|
|
376 |
|
|
|
484 |
|
|
|
573 |
|
|
|
714 |
|
Interest on PPP Liquidity
Facility |
|
|
112 |
|
|
|
— |
|
|
|
— |
|
|
|
112 |
|
|
|
— |
|
Interest on senior secured
notes |
|
|
57 |
|
|
|
91 |
|
|
|
182 |
|
|
|
148 |
|
|
|
355 |
|
Total interest expense |
|
|
1,540 |
|
|
|
2,571 |
|
|
|
3,383 |
|
|
|
4,111 |
|
|
|
6,030 |
|
Net interest income |
|
|
20,304 |
|
|
|
19,173 |
|
|
|
18,836 |
|
|
|
39,477 |
|
|
|
38,028 |
|
Provision for loan losses
(1) |
|
|
2,100 |
|
|
|
2,700 |
|
|
|
550 |
|
|
|
4,800 |
|
|
|
900 |
|
Net interest income after
provision for loan losses |
|
|
18,204 |
|
|
|
16,473 |
|
|
|
18,286 |
|
|
|
34,677 |
|
|
|
37,128 |
|
NONINTEREST
INCOME |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain on sale of loans |
|
|
— |
|
|
|
377 |
|
|
|
1,271 |
|
|
|
377 |
|
|
|
2,199 |
|
Service charges and fees on
deposit accounts |
|
|
447 |
|
|
|
555 |
|
|
|
564 |
|
|
|
1,002 |
|
|
|
1,104 |
|
Net servicing fees |
|
|
(9 |
) |
|
|
224 |
|
|
|
287 |
|
|
|
215 |
|
|
|
521 |
|
Other income |
|
|
617 |
|
|
|
259 |
|
|
|
200 |
|
|
|
876 |
|
|
|
620 |
|
Total noninterest income |
|
|
1,055 |
|
|
|
1,415 |
|
|
|
2,322 |
|
|
|
2,470 |
|
|
|
4,444 |
|
NONINTEREST
EXPENSE |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries and employee
benefits |
|
|
6,386 |
|
|
|
7,230 |
|
|
|
6,857 |
|
|
|
13,616 |
|
|
|
13,080 |
|
Occupancy and equipment |
|
|
1,108 |
|
|
|
1,063 |
|
|
|
987 |
|
|
|
2,171 |
|
|
|
2,416 |
|
Professional fees |
|
|
450 |
|
|
|
471 |
|
|
|
426 |
|
|
|
921 |
|
|
|
845 |
|
Data processing |
|
|
874 |
|
|
|
807 |
|
|
|
639 |
|
|
|
1,681 |
|
|
|
1,243 |
|
Office, postage and
telecommunications |
|
|
289 |
|
|
|
258 |
|
|
|
255 |
|
|
|
547 |
|
|
|
527 |
|
Deposit insurance and
regulatory assessments |
|
|
198 |
|
|
|
61 |
|
|
|
120 |
|
|
|
259 |
|
|
|
315 |
|
Loan related |
|
|
226 |
|
|
|
275 |
|
|
|
71 |
|
|
|
501 |
|
|
|
285 |
|
Customer service related |
|
|
328 |
|
|
|
372 |
|
|
|
273 |
|
|
|
700 |
|
|
|
750 |
|
Amortization of core deposit
intangible |
|
|
193 |
|
|
|
193 |
|
|
|
197 |
|
|
|
386 |
|
|
|
393 |
|
Other expenses |
|
|
1,048 |
|
|
|
789 |
|
|
|
780 |
|
|
|
1,837 |
|
|
|
1,451 |
|
Total noninterest expense |
|
|
11,100 |
|
|
|
11,519 |
|
|
|
10,605 |
|
|
|
22,619 |
|
|
|
21,305 |
|
Income before taxes |
|
|
8,159 |
|
|
|
6,369 |
|
|
|
10,003 |
|
|
|
14,528 |
|
|
|
20,267 |
|
Income taxes |
|
|
2,429 |
|
|
|
1,823 |
|
|
|
3,192 |
|
|
|
4,252 |
|
|
|
6,448 |
|
Net income |
|
$ |
5,730 |
|
|
$ |
4,546 |
|
|
$ |
6,811 |
|
|
$ |
10,276 |
|
|
$ |
13,819 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per
share-diluted |
|
$ |
0.49 |
|
|
$ |
0.39 |
|
|
$ |
0.58 |
|
|
$ |
0.88 |
|
|
$ |
1.17 |
|
Weighted average shares -
diluted |
|
|
11,606,280 |
|
|
|
11,632,050 |
|
|
|
11,675,057 |
|
|
|
11,619,149 |
|
|
|
11,741,910 |
|
(1 |
) |
Includes $138 thousand of reserves for accrued interest receivable
related to loans on deferment for the three months and six months
ended June 30, 2020. |
First Choice Bancorp and
Subsidiary
Average Balance Sheets and Yield Analysis
|
|
Three Months Ended |
|
|
|
June 30, 2020 |
|
|
March 31, 2020 |
|
|
June 30, 2019 |
|
|
|
Average Balance |
|
|
Interest Income / Expense |
|
|
Yield / Cost |
|
|
Average Balance |
|
|
Interest Income / Expense |
|
|
Yield / Cost |
|
|
Average Balance |
|
|
Interest Income / Expense |
|
|
Yield / Cost |
|
|
|
(dollars in thousands) |
|
Interest-earning
assets: |
|
|
|
Loans (1) |
|
$ |
1,738,172 |
|
|
$ |
21,348 |
|
|
|
4.94 |
% |
|
$ |
1,404,652 |
|
|
$ |
20,780 |
|
|
|
5.95 |
% |
|
$ |
1,334,188 |
|
|
$ |
21,344 |
|
|
|
6.42 |
% |
Investment securities |
|
|
42,553 |
|
|
|
225 |
|
|
|
2.13 |
% |
|
|
36,200 |
|
|
|
218 |
|
|
|
2.42 |
% |
|
|
36,337 |
|
|
|
215 |
|
|
|
2.37 |
% |
Deposits at other financial
institutions |
|
|
186,741 |
|
|
|
92 |
|
|
|
0.20 |
% |
|
|
157,743 |
|
|
|
501 |
|
|
|
1.28 |
% |
|
|
83,183 |
|
|
|
442 |
|
|
|
2.13 |
% |
Federal funds sold/resale
agreements |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
2,018 |
|
|
|
12 |
|
|
|
2.39 |
% |
Restricted stock investments
and other bank stocks |
|
|
14,534 |
|
|
|
179 |
|
|
|
4.95 |
% |
|
|
14,524 |
|
|
|
245 |
|
|
|
6.78 |
% |
|
|
13,932 |
|
|
|
206 |
|
|
|
5.93 |
% |
Total interest-earning
assets |
|
|
1,982,000 |
|
|
|
21,844 |
|
|
|
4.43 |
% |
|
|
1,613,119 |
|
|
|
21,744 |
|
|
|
5.42 |
% |
|
|
1,469,658 |
|
|
|
22,219 |
|
|
|
6.06 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest-earning
assets |
|
|
127,208 |
|
|
|
|
|
|
|
|
|
|
|
114,282 |
|
|
|
|
|
|
|
|
|
|
|
110,082 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
assets |
|
$ |
2,109,208 |
|
|
|
|
|
|
|
|
|
|
$ |
1,727,401 |
|
|
|
|
|
|
|
|
|
|
$ |
1,579,740 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing
liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest checking |
|
$ |
251,398 |
|
|
$ |
101 |
|
|
|
0.16 |
% |
|
$ |
156,407 |
|
|
$ |
262 |
|
|
|
0.67 |
% |
|
$ |
111,116 |
|
|
$ |
298 |
|
|
|
1.08 |
% |
Money market accounts |
|
|
298,040 |
|
|
|
207 |
|
|
|
0.28 |
% |
|
|
318,465 |
|
|
|
798 |
|
|
|
1.01 |
% |
|
|
271,067 |
|
|
|
900 |
|
|
|
1.33 |
% |
Savings accounts |
|
|
30,104 |
|
|
|
10 |
|
|
|
0.13 |
% |
|
|
28,264 |
|
|
|
49 |
|
|
|
0.70 |
% |
|
|
28,825 |
|
|
|
56 |
|
|
|
0.78 |
% |
Time deposits |
|
|
91,051 |
|
|
|
292 |
|
|
|
1.29 |
% |
|
|
117,567 |
|
|
|
490 |
|
|
|
1.68 |
% |
|
|
150,601 |
|
|
|
674 |
|
|
|
1.80 |
% |
Brokered time deposits |
|
|
90,349 |
|
|
|
564 |
|
|
|
2.51 |
% |
|
|
92,844 |
|
|
|
505 |
|
|
|
2.19 |
% |
|
|
128,555 |
|
|
|
789 |
|
|
|
2.46 |
% |
Total interest-bearing deposits |
|
|
760,942 |
|
|
|
1,174 |
|
|
|
0.62 |
% |
|
|
713,547 |
|
|
|
2,104 |
|
|
|
1.19 |
% |
|
|
690,164 |
|
|
|
2,717 |
|
|
|
1.58 |
% |
Borrowings |
|
|
145,440 |
|
|
|
197 |
|
|
|
0.54 |
% |
|
|
92,143 |
|
|
|
376 |
|
|
|
1.64 |
% |
|
|
77,442 |
|
|
|
484 |
|
|
|
2.51 |
% |
Paycheck Protection Program
Liquidity Facility |
|
|
127,962 |
|
|
|
112 |
|
|
|
0.35 |
% |
|
|
— |
|
|
|
— |
|
|
|
— |
% |
|
|
— |
|
|
|
— |
|
|
|
— |
% |
Senior secured notes |
|
|
6,754 |
|
|
|
57 |
|
|
|
3.39 |
% |
|
|
8,022 |
|
|
|
91 |
|
|
|
4.56 |
% |
|
|
12,398 |
|
|
|
182 |
|
|
|
5.89 |
% |
Total interest-bearing
liabilities |
|
|
1,041,098 |
|
|
|
1,540 |
|
|
|
0.59 |
% |
|
|
813,712 |
|
|
|
2,571 |
|
|
|
1.27 |
% |
|
|
780,004 |
|
|
|
3,383 |
|
|
|
1.74 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest-bearing
liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Demand deposits |
|
|
783,258 |
|
|
|
|
|
|
|
|
|
|
|
631,809 |
|
|
|
|
|
|
|
|
|
|
|
534,192 |
|
|
|
|
|
|
|
|
|
Other liabilities |
|
|
16,684 |
|
|
|
|
|
|
|
|
|
|
|
17,011 |
|
|
|
|
|
|
|
|
|
|
|
13,882 |
|
|
|
|
|
|
|
|
|
Shareholders’ equity |
|
|
268,168 |
|
|
|
|
|
|
|
|
|
|
|
264,869 |
|
|
|
|
|
|
|
|
|
|
|
251,662 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and
shareholders’ equity |
|
$ |
2,109,208 |
|
|
|
|
|
|
|
|
|
|
$ |
1,727,401 |
|
|
|
|
|
|
|
|
|
|
$ |
1,579,740 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest spread |
|
|
|
|
|
$ |
20,304 |
|
|
|
3.84 |
% |
|
|
|
|
|
$ |
19,173 |
|
|
|
4.15 |
% |
|
|
|
|
|
$ |
18,836 |
|
|
|
4.32 |
% |
Net interest margin |
|
|
|
|
|
|
|
|
|
|
4.12 |
% |
|
|
|
|
|
|
|
|
|
|
4.78 |
% |
|
|
|
|
|
|
|
|
|
|
5.14 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total deposits |
|
$ |
1,544,200 |
|
|
$ |
1,174 |
|
|
|
0.31 |
% |
|
$ |
1,345,356 |
|
|
$ |
2,104 |
|
|
|
0.63 |
% |
|
$ |
1,224,356 |
|
|
$ |
2,717 |
|
|
|
0.89 |
% |
Total funding sources |
|
$ |
1,824,356 |
|
|
$ |
1,540 |
|
|
|
0.34 |
% |
|
$ |
1,445,521 |
|
|
$ |
2,571 |
|
|
|
0.72 |
% |
|
$ |
1,314,196 |
|
|
$ |
3,383 |
|
|
|
1.03 |
% |
(1 |
) |
Average loans include net discounts and net deferred loan fees and
costs. Interest income on loans includes $1.3 million, $292
thousand and $236 thousand related to the accretion of net deferred
loan fees for the quarters ended June 30, 2020, March 31, 2020 and
June 30, 2019. In addition, interest income includes $421 thousand,
$624 thousand and $642 thousand of discount accretion on loans
acquired in a business combination, including the interest
recognized on the payoff of PCI loans, for the quarters ended June
30, 2020, March 31, 2020 and June 30, 2019. |
First Choice Bancorp and
Subsidiary
Average Balance Sheets and Yield Analysis
(continued)
|
|
Six Months Ended June 30, |
|
|
|
2020 |
|
|
2019 |
|
|
|
Average Balance |
|
|
Interest Income / Expense |
|
|
Yield / Cost |
|
|
Average Balance |
|
|
Interest Income / Expense |
|
|
Yield / Cost |
|
|
|
(dollars in thousands) |
|
Interest-earning
assets: |
|
|
|
Loans (1) |
|
$ |
1,571,412 |
|
|
$ |
42,128 |
|
|
|
5.39 |
% |
|
$ |
1,307,613 |
|
|
$ |
42,260 |
|
|
|
6.52 |
% |
Investment securities |
|
|
39,377 |
|
|
|
443 |
|
|
|
2.26 |
% |
|
|
36,714 |
|
|
|
451 |
|
|
|
2.48 |
% |
Deposits at other financial
institutions |
|
|
172,242 |
|
|
|
593 |
|
|
|
0.69 |
% |
|
|
81,998 |
|
|
|
869 |
|
|
|
2.14 |
% |
Federal funds sold/resale
agreements |
|
|
— |
|
|
|
— |
|
|
|
— |
% |
|
|
2,506 |
|
|
|
30 |
|
|
|
2.41 |
% |
FHLB and other bank stock |
|
|
14,529 |
|
|
|
424 |
|
|
|
5.87 |
% |
|
|
13,912 |
|
|
|
448 |
|
|
|
6.49 |
% |
Total interest-earning
assets |
|
|
1,797,560 |
|
|
|
43,588 |
|
|
|
4.88 |
% |
|
|
1,442,743 |
|
|
|
44,058 |
|
|
|
6.16 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest-earning
assets |
|
|
120,745 |
|
|
|
|
|
|
|
|
|
|
|
108,915 |
|
|
|
|
|
|
|
|
|
|
|
$ |
1,918,305 |
|
|
|
|
|
|
|
|
|
|
$ |
1,551,658 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing
liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest checking |
|
$ |
203,903 |
|
|
$ |
363 |
|
|
|
0.36 |
% |
|
$ |
114,978 |
|
|
$ |
607 |
|
|
|
1.06 |
% |
Money market accounts |
|
|
308,253 |
|
|
|
1,005 |
|
|
|
0.66 |
% |
|
|
271,521 |
|
|
|
1,768 |
|
|
|
1.31 |
% |
Savings accounts |
|
|
29,184 |
|
|
|
59 |
|
|
|
0.41 |
% |
|
|
31,575 |
|
|
|
118 |
|
|
|
0.75 |
% |
Time deposits |
|
|
104,309 |
|
|
|
782 |
|
|
|
1.51 |
% |
|
|
160,429 |
|
|
|
1,404 |
|
|
|
1.76 |
% |
Brokered time deposits |
|
|
91,596 |
|
|
|
1,069 |
|
|
|
2.35 |
% |
|
|
94,814 |
|
|
|
1,064 |
|
|
|
2.26 |
% |
Total interest-bearing deposits |
|
|
737,245 |
|
|
|
3,278 |
|
|
|
0.89 |
% |
|
|
673,317 |
|
|
|
4,961 |
|
|
|
1.49 |
% |
Borrowings |
|
|
118,956 |
|
|
|
573 |
|
|
|
0.97 |
% |
|
|
56,897 |
|
|
|
714 |
|
|
|
2.53 |
% |
Paycheck Protection Program
Liquidity Facility |
|
|
63,816 |
|
|
|
112 |
|
|
|
0.35 |
% |
|
|
— |
|
|
|
— |
|
|
|
— |
% |
Senior secured notes |
|
|
7,388 |
|
|
|
148 |
|
|
|
4.03 |
% |
|
|
12,151 |
|
|
|
355 |
|
|
|
5.89 |
% |
Total interest-bearing
liabilities |
|
|
927,405 |
|
|
|
4,111 |
|
|
|
0.89 |
% |
|
|
742,365 |
|
|
|
6,030 |
|
|
|
1.64 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest-bearing
liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Demand deposits |
|
|
707,534 |
|
|
|
|
|
|
|
|
|
|
|
547,954 |
|
|
|
|
|
|
|
|
|
Other liabilities |
|
|
16,848 |
|
|
|
|
|
|
|
|
|
|
|
11,415 |
|
|
|
|
|
|
|
|
|
Shareholders’ equity |
|
|
266,518 |
|
|
|
|
|
|
|
|
|
|
|
249,924 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and
shareholders’ equity |
|
$ |
1,918,305 |
|
|
|
|
|
|
|
|
|
|
$ |
1,551,658 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest spread |
|
|
|
|
|
$ |
39,477 |
|
|
|
3.99 |
% |
|
|
|
|
|
$ |
38,028 |
|
|
|
4.52 |
% |
Net interest margin |
|
|
|
|
|
|
|
|
|
|
4.42 |
% |
|
|
|
|
|
|
|
|
|
|
5.32 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total deposits |
|
$ |
1,444,779 |
|
|
$ |
3,278 |
|
|
|
0.46 |
% |
|
$ |
1,221,271 |
|
|
$ |
4,961 |
|
|
|
0.82 |
% |
Total funding sources |
|
$ |
1,634,939 |
|
|
$ |
4,111 |
|
|
|
0.51 |
% |
|
$ |
1,290,319 |
|
|
$ |
6,030 |
|
|
|
0.94 |
% |
(1 |
) |
Average loans include net discounts and net deferred loan fees and
costs. Interest income on loans includes $1.6 million and $467
thousand related to the accretion of net deferred loan fees for the
six months ended June 30, 2020 and June 30, 2019. In addition,
interest income includes $1.0 million and $1.6 million of discount
accretion on loans acquired in a business combination, including
the interest recognized on the payoff of PCI loans, for the six
months ended June 30, 2020 and June 30, 2019. |
First Choice Bancorp and
Subsidiary
Loan Composition
|
|
June 30, 2020 |
|
|
March 31, 2020 |
|
|
December 31, 2019 |
|
|
|
Amount |
|
|
Percentage of Total |
|
|
Amount |
|
|
Percentage of Total |
|
|
Amount |
|
|
Percentage of Total |
|
|
|
(dollars in thousands) |
|
Construction and land
development |
|
$ |
218,226 |
|
|
|
11.8 |
% |
|
$ |
233,607 |
|
|
|
16.2 |
% |
|
$ |
249,504 |
|
|
|
18.1 |
% |
Real estate: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential |
|
|
39,145 |
|
|
|
2.1 |
% |
|
|
42,904 |
|
|
|
3.0 |
% |
|
|
43,736 |
|
|
|
3.2 |
% |
Commercial real estate - owner occupied |
|
|
162,508 |
|
|
|
8.8 |
% |
|
|
148,517 |
|
|
|
10.3 |
% |
|
|
171,595 |
|
|
|
12.5 |
% |
Commercial real estate - non-owner occupied |
|
|
502,693 |
|
|
|
27.3 |
% |
|
|
476,472 |
|
|
|
33.2 |
% |
|
|
423,823 |
|
|
|
30.8 |
% |
Commercial and industrial |
|
|
335,411 |
|
|
|
18.2 |
% |
|
|
350,090 |
|
|
|
24.3 |
% |
|
|
309,011 |
|
|
|
22.5 |
% |
SBA loans (1) |
|
|
586,820 |
|
|
|
31.8 |
% |
|
|
187,407 |
|
|
|
13.0 |
% |
|
|
177,633 |
|
|
|
12.9 |
% |
Consumer |
|
|
34 |
|
|
|
— |
% |
|
|
450 |
|
|
|
— |
% |
|
|
430 |
|
|
|
— |
% |
Total loans held for
investment, net of discounts |
|
$ |
1,844,837 |
|
|
|
100.0 |
% |
|
$ |
1,439,447 |
|
|
|
100.0 |
% |
|
$ |
1,375,732 |
|
|
|
100.0 |
% |
Net deferred loan fees
(1) |
|
|
(13,218 |
) |
|
|
|
|
|
|
(1,392 |
) |
|
|
|
|
|
|
(1,057 |
) |
|
|
|
|
Total loans held for
investment |
|
$ |
1,831,619 |
|
|
|
|
|
|
$ |
1,438,055 |
|
|
|
|
|
|
$ |
1,374,675 |
|
|
|
|
|
Allowance for loan losses
(2) |
|
|
(17,822 |
) |
|
|
|
|
|
|
(16,218 |
) |
|
|
|
|
|
|
(13,522 |
) |
|
|
|
|
Total loans held for
investment, net |
|
$ |
1,813,797 |
|
|
|
|
|
|
$ |
1,421,837 |
|
|
|
|
|
|
$ |
1,361,153 |
|
|
|
|
|
(1 |
) |
Includes PPP loans with total outstanding principal of $400.7
million and net unearned fees of $11.5 million at June 30,
2020. |
(2 |
) |
Includes $138 thousand of reserves for accrued interest receivable
related to loans on deferment at June 30, 2020. |
Total loans held for investment
|
|
June 30, 2020 |
|
|
March 31, 2020 |
|
|
December 31, 2019 |
|
|
|
(dollars in thousands) |
|
Gross loans held for
investment (1) |
|
$ |
1,852,768 |
|
|
$ |
1,448,082 |
|
|
$ |
1,385,142 |
|
Unamortized net discounts
(2) |
|
|
(7,931 |
) |
|
|
(8,635 |
) |
|
|
(9,410 |
) |
Net unamortized deferred
origination fees (1) |
|
|
(13,218 |
) |
|
|
(1,392 |
) |
|
|
(1,057 |
) |
Total loans held for
investment |
|
$ |
1,831,619 |
|
|
$ |
1,438,055 |
|
|
$ |
1,374,675 |
|
(1 |
) |
Includes PPP loans with total outstanding principal of $400.7
million and net unearned fees of $11.5 million at June 30,
2020. |
(2 |
) |
Unamortized net discounts include discounts related to the retained
portion of SBA loans and net discounts on Non-PCI acquired loans.
At June 30, 2020, net discounts related to loans acquired in the
PCB acquisition totaled $4.8 million that is expected to be
accreted into interest income over a weighted average remaining
life of 4.3 years. At March 31, 2020 and December 31, 2019, net
discounts related to loans acquired in the PCB acquisition totaled
$5.4 million and $6.0 million. |
Allowance for Loan losses
|
|
For the Three Months Ended |
|
|
Six Months Ended June 30, |
|
|
|
June 30, 2020 |
|
|
March 31, 2020 |
|
|
June 30, 2019 |
|
|
2020 |
|
|
2019 |
|
|
|
(dollars in thousands) |
|
Balance, beginning of
period |
|
$ |
16,218 |
|
|
$ |
13,522 |
|
|
$ |
11,426 |
|
|
$ |
13,522 |
|
|
$ |
11,056 |
|
Provision for loan losses |
|
|
2,100 |
|
|
|
2,700 |
|
|
|
550 |
|
|
|
4,800 |
|
|
|
900 |
|
Charge-offs |
|
|
(550 |
) |
|
|
(28 |
) |
|
|
(122 |
) |
|
|
(578 |
) |
|
|
(124 |
) |
Recoveries |
|
|
54 |
|
|
|
24 |
|
|
|
199 |
|
|
|
78 |
|
|
|
221 |
|
Net (charge-offs)
recoveries |
|
|
(496 |
) |
|
|
(4 |
) |
|
|
77 |
|
|
|
(500 |
) |
|
|
97 |
|
Balance, end of period |
|
$ |
17,822 |
|
|
$ |
16,218 |
|
|
$ |
12,053 |
|
|
$ |
17,822 |
|
|
$ |
12,053 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annualized net (charge-offs)
recoveries to average loans |
|
|
(0.11 |
)% |
|
|
— |
% |
|
|
0.02 |
% |
|
|
(0.06 |
)% |
|
|
0.01 |
% |
Credit Quality (1)
|
|
June 30, 2020 |
|
|
March 31, 2020 |
|
|
December 31, 2019 |
|
|
|
(dollars in thousands) |
|
Accruing loans past due 90
days or more |
|
$ |
267 |
|
|
$ |
— |
|
|
$ |
— |
|
Non-accrual loans |
|
|
7,999 |
|
|
|
8,984 |
|
|
|
11,107 |
|
Troubled debt restructurings
on non-accrual |
|
|
150 |
|
|
|
151 |
|
|
|
158 |
|
Total nonperforming loans |
|
|
8,416 |
|
|
|
9,135 |
|
|
|
11,265 |
|
Foreclosed assets |
|
|
602 |
|
|
|
— |
|
|
|
— |
|
Total nonperforming
assets |
|
$ |
9,018 |
|
|
$ |
9,135 |
|
|
$ |
11,265 |
|
Troubled debt restructurings -
on accrual |
|
$ |
319 |
|
|
$ |
319 |
|
|
$ |
321 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonperforming loans as a
percentage of total loans held for investment |
|
|
0.46 |
% |
|
|
0.64 |
% |
|
|
0.82 |
% |
Nonperforming assets as a
percentage of total assets |
|
|
0.41 |
% |
|
|
0.51 |
% |
|
|
0.67 |
% |
Allowance for loan losses as a
percentage of total loans held for investment |
|
|
0.97 |
% |
|
|
1.13 |
% |
|
|
0.98 |
% |
Allowance for loan losses as a
percentage of total loans held for investment without PPP
loans |
|
|
1.24 |
% |
|
|
1.13 |
% |
|
|
0.98 |
% |
Allowance for loan losses as a
percentage of nonperforming loans |
|
|
211.76 |
% |
|
|
177.54 |
% |
|
|
120.04 |
% |
Allowance for loan losses as a
percentage of nonperforming assets |
|
|
197.63 |
% |
|
|
177.54 |
% |
|
|
120.04 |
% |
Accruing loans held for
investment past due 30 - 89 days |
|
$ |
353 |
|
|
$ |
2,306 |
|
|
$ |
1,767 |
|
(1 |
) |
Excludes purchased credit impaired loans with a carrying value of
$1.0 million, $1.1 million and $1.1 million at June 30, 2020, March
31, 2020 and December 31, 2019. |
GAAP to Non-GAAP
Reconciliation
The following tables present a reconciliation of
non-GAAP financial measures to GAAP measures for: (1) efficiency
ratio, (2) pre-tax pre-provision income, (3) average tangible
common equity, (4) return on average tangible common equity, (5)
tangible common equity, (6) tangible assets, (7) tangible common
equity to tangible asset ratio, and (8) tangible book value per
share. We believe the presentation of certain non-GAAP financial
measures provides useful information to assess our consolidated
financial condition and consolidated results of operations and to
assist investors in evaluating our financial results relative to
our peers. These non-GAAP financial measures complement our GAAP
reporting and are presented below to provide investors and others
with information that we use to manage the business each period.
Because not all companies use identical calculations, the
presentation of these non-GAAP financial measures may not be
comparable to other similarly titled measures used by other
companies. These non-GAAP measures should be taken together with
the corresponding GAAP measures and should not be considered a
substitute of the GAAP measures.
|
|
For the Three Months Ended |
|
|
Six Months Ended June 30, |
|
|
|
June 30, 2020 |
|
|
March 31, 2020 |
|
|
June 30, 2019 |
|
|
2020 |
|
|
2019 |
|
|
|
(dollars in thousands) |
|
Efficiency
Ratio |
|
|
|
Noninterest expense
(numerator) |
|
$ |
11,100 |
|
|
$ |
11,519 |
|
|
$ |
10,605 |
|
|
$ |
22,619 |
|
|
$ |
21,305 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income |
|
$ |
20,304 |
|
|
$ |
19,173 |
|
|
$ |
18,836 |
|
|
$ |
39,477 |
|
|
$ |
38,028 |
|
Plus: Noninterest income |
|
|
1,055 |
|
|
|
1,415 |
|
|
|
2,322 |
|
|
|
2,470 |
|
|
|
4,444 |
|
Total net interest income and
noninterest income (denominator) |
|
$ |
21,359 |
|
|
$ |
20,588 |
|
|
$ |
21,158 |
|
|
$ |
41,947 |
|
|
$ |
42,472 |
|
Efficiency ratio |
|
|
52.0 |
% |
|
|
56.0 |
% |
|
|
50.1 |
% |
|
|
53.9 |
% |
|
|
50.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-tax pre-provision
income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income |
|
$ |
20,304 |
|
|
$ |
19,173 |
|
|
$ |
18,836 |
|
|
$ |
39,477 |
|
|
$ |
38,028 |
|
Noninterest income |
|
|
1,055 |
|
|
|
1,415 |
|
|
|
2,322 |
|
|
|
2,470 |
|
|
|
4,444 |
|
Total net interest income and
noninterest income |
|
|
21,359 |
|
|
|
20,588 |
|
|
|
21,158 |
|
|
|
41,947 |
|
|
|
42,472 |
|
Less: Noninterest expense |
|
|
11,100 |
|
|
|
11,519 |
|
|
|
10,605 |
|
|
|
22,619 |
|
|
|
21,305 |
|
Pre-tax pre-provision
income |
|
$ |
10,259 |
|
|
$ |
9,069 |
|
|
$ |
10,553 |
|
|
$ |
19,328 |
|
|
$ |
21,167 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on Average
Assets, Equity, Tangible Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
5,730 |
|
|
$ |
4,546 |
|
|
$ |
6,811 |
|
|
$ |
10,276 |
|
|
$ |
13,819 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average assets |
|
$ |
2,109,208 |
|
|
$ |
1,727,401 |
|
|
$ |
1,579,740 |
|
|
$ |
1,918,305 |
|
|
$ |
1,551,658 |
|
Average shareholders’
equity |
|
|
268,168 |
|
|
|
264,869 |
|
|
|
251,662 |
|
|
|
266,518 |
|
|
|
249,924 |
|
Less: Average intangible
assets |
|
|
78,901 |
|
|
|
79,083 |
|
|
|
79,731 |
|
|
|
78,985 |
|
|
|
79,829 |
|
Average tangible common
equity |
|
$ |
189,267 |
|
|
$ |
185,786 |
|
|
$ |
171,931 |
|
|
$ |
187,533 |
|
|
$ |
170,095 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on average assets |
|
|
1.09 |
% |
|
|
1.06 |
% |
|
|
1.73 |
% |
|
|
1.08 |
% |
|
|
1.80 |
% |
Return on average equity |
|
|
8.59 |
% |
|
|
6.90 |
% |
|
|
10.86 |
% |
|
|
7.75 |
% |
|
|
11.15 |
% |
Return on average tangible
common equity |
|
|
12.18 |
% |
|
|
9.84 |
% |
|
|
15.89 |
% |
|
|
11.02 |
% |
|
|
16.38 |
% |
|
|
Quarter ended |
|
|
|
June 30, 2020 |
|
|
March 31, 2020 |
|
|
December 31, 2019 |
|
|
|
(dollars in thousands, except per share amounts) |
|
Tangible Common Equity
Ratio/Tangible Book Value Per Share |
|
|
|
Shareholders’ equity |
|
$ |
266,949 |
|
|
$ |
263,307 |
|
|
$ |
261,805 |
|
Less: Intangible assets |
|
|
78,767 |
|
|
|
78,960 |
|
|
|
79,153 |
|
Tangible common equity |
|
$ |
188,182 |
|
|
$ |
184,347 |
|
|
$ |
182,652 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets |
|
$ |
2,223,603 |
|
|
$ |
1,775,662 |
|
|
$ |
1,690,324 |
|
Less: Intangible assets |
|
|
78,767 |
|
|
|
78,960 |
|
|
|
79,153 |
|
Tangible assets |
|
$ |
2,144,836 |
|
|
$ |
1,696,702 |
|
|
$ |
1,611,171 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity to assets ratio |
|
|
12.01 |
% |
|
|
14.83 |
% |
|
|
15.49 |
% |
Tangible common equity to
tangible asset ratio |
|
|
8.77 |
% |
|
|
10.87 |
% |
|
|
11.34 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares outstanding |
|
|
11,697,766 |
|
|
|
11,662,603 |
|
|
|
11,635,531 |
|
Book value per share |
|
$ |
22.82 |
|
|
$ |
22.58 |
|
|
$ |
22.50 |
|
Tangible book value per
share |
|
$ |
16.09 |
|
|
$ |
15.81 |
|
|
$ |
15.70 |
|
First Choice Bancorp (NASDAQ:FCBP)
Gráfica de Acción Histórica
De Ago 2024 a Sep 2024
First Choice Bancorp (NASDAQ:FCBP)
Gráfica de Acción Histórica
De Sep 2023 a Sep 2024