First Capital Bancorp, Inc. (the "Company") (Nasdaq:FCVA) parent
company to First Capital Bank (the "Bank") reported today its
financial results for the first quarter of 2014. For the three
months ended March 31, 2014, the Company had net income of $977
thousand and net income available to common shareholders of $953
thousand, or $0.06 per diluted share, compared to net income of
$795 thousand and net income available to common shareholders of
$709 thousand, or $0.05 per diluted share, for the same period in
2013. This represents a $286 thousand or 25.24% increase in net
income in the first quarter of 2014 compared to the first quarter
of 2013, and a $244 thousand or 34.41% quarter to quarter increase
in net income available to common shareholders.
Earnings
For the quarter ended March 31, 2014, the Company had net income
of $977 thousand and net income available to common shareholders of
$953 thousand or $0.06 per diluted share compared to net income of
$795 thousand and a net income available to common shareholders of
$953 thousand or $0.06 per diluted share for the same period in
2013.
Factors contributing to the Company's increase in net income
during the first quarter of 2014 are as follows:
- Net interest income improved to $4.6 million for the first
quarter of 2014, compared to $4.2 million in the first quarter of
2013, an increase of $386 thousand or 9.10%.
- The net interest margin was 3.64% for the quarter ended March
31, 2014, compared to 3.58% for the quarter ended March 31, 2013, a
6 basis point increase. This increase was driven by increases in
loans outstanding, decreases in the bond portfolio, decreases in
nonaccrual loans, and increases in demand deposits.
- A recovery of the provision for loan losses of $292 thousand
during the 2014 quarter was recognized, compared to a provision for
loan losses of $100 thousand in the first quarter of 2013,
resulting in a $392 thousand quarter over quarter improvement.
Growth
At March 31, 2014, total assets were $564.3 million, compared to
$526.3 million at March 31, 2013, a $38.0 million or 7.22%
increase. Total asset growth for the first quarter of 2014 was an
increase from $547.9 million at December 31, 2013, of $16.4 million
or 2.99%, which is contrary to the seasonal decline that is
typically expected during the first quarter of each year. This
growth is primarily attributable to the increased visibility of the
Bank's commitment in the local marketplace and the continued
improvement in the market area's economic stability. In the first
quarter of 2014, loan growth, net of the allowance, was $13.9
million or 3.27% or 12.81% on an annualized basis.
Gross loans at March 31, 2014, were $445.1 million compared to
$431.3 million at December 31, 2013, a $13.8 million or a 3.20%
increase. We continue to see loan demand in our market as the
economy and consumer confidence improves.
Total deposits at March 31, 2014, were $460.5 million, an
increase of $4.5 million or 0.99%, from $456.0 million at December
31, 2013, with growth occurring primarily in interest bearing
accounts.
First Capital Bank President and CEO, Bob Watts stated "2014
started out strong, with our teammates continuing to grow our
deposit base and loan relationships from both new and existing
customers. We have firmly embraced our 'Make It Work' approach and
the outlook for the remainder of 2014 is exciting."
Asset Quality
The allowance for loan losses was $8.0 million or 1.80% of total
loans at March 31, 2014, compared to $8.2 million or 1.89% of total
loans at December 31, 2013. The decrease in the allowance for loan
losses was primarily a result the recovery of loan loss provisions
previously expensed.
During the quarter ended March 31, 2014, the Company had
charge-offs of $145 thousand, recoveries of $291 thousand and a
recovery of provision for loan losses of $292 thousand.
The following table reflects details related to asset quality
and the allowance for loan losses:
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March 31, |
December 31, |
March 31, |
|
2014 |
2013 |
2013 |
|
(Dollars in thousands) |
Nonaccrual loans |
$ 3,676 |
$ 4,467 |
$ 6,366 |
Loans past due 90 days and accruing
interest |
-- |
-- |
-- |
Total nonperforming loans |
3,676 |
4,467 |
6,366 |
Other real estate owned |
2,478 |
2,658 |
3,841 |
Total nonperforming assets |
$ 6,154 |
$ 7,125 |
$ 10,207 |
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Allowance for loan losses to period end
loans |
1.80% |
1.89% |
1.92% |
Nonperforming assets to total loans &
OREO |
1.37% |
1.64% |
2.60% |
Nonperforming assets to total assets |
1.09% |
1.30% |
1.94% |
Allowance for loan losses to nonaccrual
loans |
218.12% |
182.80% |
117.29% |
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Three Months Ended |
|
March 31, |
December 31, |
March 31, |
|
2014 |
2013 |
2013 |
Allowance for loan losses |
|
|
|
Beginning balance |
$ 8,165 |
$ 8,591 |
$ 7,269 |
(Recovery of) provision for loan
losses |
(292) |
(200) |
100 |
Net recoveries (chargeoffs) |
146 |
(226) |
98 |
Ending balance |
$ 8,019 |
$ 8,165 |
$ 7,467 |
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Capital
Total Risk Based Capital at March 31, 2014, was 13.86%, compared
to 13.78% at December 31, 2013. Tier 1 Risk Based Capital at March
31, 2014, was 11.00%, compared to 12.34% at December 31, 2013.
Additionally, tangible common equity increased to 8.12% at March
31, 2014 from 8.06% at December 31, 2013.
First Capital Bancorp, Inc. Managing Director and CEO, John
Presley, commented "Maintaining strong capital levels continues to
be a key focus as our team manages our growth in 2014. We completed
a strategic capital initiative early in 2014 whereby we replaced
the remaining preferred securities with subordinated debt to both
reduce the expense associated with the funds and maintain total
capital levels. The continued improvement in capital represents an
enterprise wide focus on managing capital in all aspects of daily
operations, from loan growth and investment strategy to liability
management. We are pleased to see successful results from these
efforts."
The following table reflects the regulatory capital ratios of
the Company as of March 31, 2014, and December 31, 2013.
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Minimum To Be Well |
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Minimum |
Capitalized Under |
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Capital |
Prompt Corrective |
|
Actual |
Requirement |
Action Provision |
|
Amount |
Ratio |
Amount |
Ratio |
Amount |
Ratio |
|
(dollars in thousands) |
As of March 31, 2014 |
|
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|
|
|
|
Total capital to risk weighted
assets |
$ 63,173 |
13.86% |
$ 36,474 |
8.00% |
$ 45,592 |
10.00% |
Tier 1 capital to risk weighted
assets |
$ 50,169 |
11.00% |
$ 18,237 |
4.00% |
$ 27,355 |
6.00% |
Tier 1 capital to average adjusted
assets |
$ 50,169 |
9.08% |
$ 22,100 |
4.00% |
$ 27,625 |
5.00% |
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As of December 31, 2013 |
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|
|
Total capital to risk weighted
assets |
$ 61,060 |
13.78% |
$ 35,446 |
8.00% |
$ 44,307 |
10.00% |
Tier 1 capital to risk weighted
assets |
$ 54,689 |
12.34% |
$ 17,723 |
4.00% |
$ 26,584 |
6.00% |
Tier 1 capital to average adjusted
assets |
$ 54,689 |
10.04% |
$ 21,796 |
4.00% |
$ 27,244 |
5.00% |
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On January 10, 2014, the Company redeemed the remaining 5,531
shares of its Cumulative Perpetual Preferred Stock, Series A
("Preferred Stock"), for $5.6 million. The Preferred Stock paid a
cumulative dividend quarterly at a rate of 5% per annum. Effective
April 2014, the dividend rate would have increased to 9% per annum.
The Preferred Stock was redeemable at the option of the Company
subject to regulatory approval which was received in November 2013.
No shares of the Preferred Stock remain outstanding.
The Company funded the redemption by executing a variable rate
subordinated note for $6.5 million with a financial institution.
The subordinated note, which qualifies as Tier 2 capital for
regulatory purposes, carries an interest rate of 30-day Libor plus
5.00% per annum with a floor of 5.50% and a maturity of 10 years.
Principal is repaid $8 thousand per month for the first 60 months
and $103 thousand per month for the remaining 60 months.
Non-Interest Income
Non-interest income, including gains on sales of securities,
totaled $466 thousand for the quarter ended March 31, 2014, a
decrease of $136 thousand or 22.59% from $602 thousand earned in
the quarter ended March 31, 2013. During the first quarter of 2014,
the Company closed its wholesale mortgage operation. The slowdown
in the mortgage originations business coupled with the increased
regulatory burden made the business difficult to sustain. The
Company expects this decision will be accretive to 2014
earnings.
Non-interest Expense
Total noninterest expense was $4.0 million for the first quarter
of 2014, compared to $3.6 million in the first quarter of 2013, an
increase of $356 thousand or 9.86%, primarily due to an increase in
salaries and employment benefits related to annual performance
based salary increases, year-end bonuses and increased healthcare
costs which were partially offset by gains on sales of other real
estate owned.
The Bank currently operates seven branches in Innsbrook,
Chesterfield Towne Center, near Willow Lawn on Staples Mill Road,
in Ashland, at Three Chopt and Patterson in Henrico County, at the
James Center in downtown, Richmond, and in Bon Air, Chesterfield
County.
Readers are cautioned that this press release contains
forward-looking statements made pursuant to safe harbor provisions
of the Private Securities Litigation Reform Act of 1995. Such
forward-looking statements are based on management's current
knowledge, assumptions, and analyses, which it believes are
appropriate in the circumstances regarding future events, and may
address issues that involve significant risks including, but not
limited to: changes in interest rates; changes in accounting
principles, policies, or guidelines; significant changes in general
economic, competitive, and business conditions; significant changes
in or additions to laws and regulatory requirements; and
significant changes in securities markets. Additionally, such
aforementioned uncertainties, assumptions, and estimates, may cause
actual results to differ materially from the anticipated results or
other expectations expressed in the forward-looking
statements.
First Capital Bank...Let's Make it Work.
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First Capital Bancorp,
Inc. |
Financial Highlights |
(Dollars in thousands, except
per share data) |
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Three Months Ended |
|
March 31, |
March 31, |
|
2014 |
2013 |
Selected Operating
Data: |
|
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|
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|
|
|
|
Interest income |
$ 5,920 |
$ 5,611 |
Interest expense |
1,293 |
1,370 |
Net interest income |
4,627 |
4,241 |
(Recovery of) provision for loan losses |
(292) |
100 |
Other noninterest income |
370 |
571 |
Securities gains |
96 |
31 |
Noninterest expense |
3,966 |
3,610 |
Income before income tax |
1,419 |
1,133 |
Income tax expense |
442 |
338 |
Net income |
$ 977 |
$ 795 |
Less: Preferred dividends |
$ 24 |
$ 86 |
Net income available to common
shareholders |
$ 953 |
$ 709 |
Basic net income per common share |
$ 0.08 |
$ 0.06 |
Diluted net income per common share |
$ 0.06 |
$ 0.05 |
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As of and for the Three Months
Ended |
|
March 31, |
|
2014 |
2013 |
Balance Sheet Data: |
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|
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Total assets |
$564,266 |
$526,299 |
Loans, net |
437,013 |
380,813 |
Deposits |
460,490 |
443,238 |
Borrowings |
42,528 |
33,160 |
Stockholders' equity |
45,831 |
47,599 |
Book value per share |
$3.61 |
$3.43 |
Tangible Common Equity to Assets |
8.12% |
8.01% |
Total shares outstanding, in thousands |
12,688 |
12,285 |
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Asset Quality Ratios |
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|
Allowance for loan losses |
$8,019 |
$7,467 |
Nonperforming assets |
6,154 |
10,207 |
Net (recoveries) |
(146) |
(98) |
Net (recoveries) to average loans |
-0.05% |
-0.03% |
Allowance for loan losses to period end
loans |
1.80% |
1.92% |
Nonperforming assets to total loans &
OREO |
1.37% |
2.60% |
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Selected Performance
Ratios: |
|
|
Return on average assets |
0.72% |
0.61% |
Return on average equity |
8.70% |
6.84% |
Net interest margin (tax equivalent
basis) |
3.64% |
3.58% |
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CONTACT: John M. Presley
Managing Director and CEO
804-273-1254
JPresley@1capitalbank.com
Or
William W. Ranson
Executive Vice President and CFO
804-273-1160
WRanson@1capitalbank.com
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