HispanicBusiness

MONTEREY, CA -- (Marketwire) -- 02/04/13 -- 1st Capital Bank (OTCQB: FISB) (the "Bank") today announced fourth quarter and year to date financial results through December 31, 2012. The Bank concluded 2012 with record levels of loans, assets, deposits, and shareholders' equity. Income before provision for income taxes also attained a record level during the full year of 2012, increasing 32.5% from the full year of 2011.

Net income during the fourth quarter of 2012 was $748 thousand, equivalent to $0.23 diluted earnings per share. This compared favorably to net income of $257 thousand during the fourth quarter of 2011, equivalent to $0.08 diluted earnings per share. Earnings for the fourth quarter of 2012 also exceeded those in the immediately preceding quarter (the third quarter of 2012) of $539 thousand, equivalent to $0.16 diluted earnings per share.

The fourth quarter of 2012 earnings benefited from $699 thousand in tax-free life insurance benefits, as the Bank had obtained key man life insurance on its founding President and Chief Executive Officer, Fred Rowden, who passed suddenly and unexpectedly in November 2012. The fourth quarter 2012 earnings were restrained, however, by the Bank's establishing a $294 thousand reserve for deductions claimed under the State of California Enterprise Zone program in light of recent positions taken by the Franchise Tax Board. The establishment of the reserve was reflected in the Bank's fourth quarter 2012 provision for income taxes.

While income before provision for income taxes of $3.0 million during the full year of 2012 rose significantly from $2.2 million during the full year of 2011, net income for the full year of 2012 of $1.8 million, or $0.54 diluted earnings per share, declined from $3.1 million, or $0.97 diluted earnings per share for the full year of 2011. This decrease occurred due to the increase in 2011 earnings from the tax benefits related to the reversal of the valuation allowance against the Bank's net deferred tax assets.

Commenting on the fourth quarter and full year of 2012 financial performance, Mark Andino, the Bank's Interim President and Chief Executive Officer, stated: "We are very pleased to announce record levels of loans, assets, deposits, and shareholders' equity. These accomplishments resulted from our focus upon providing truly customized financial solutions that effectively meet the needs of our clients, enhanced by the Bank's commitment to providing a concierge level of client service." Mr. Andino then continued: "The Bank's orientation toward building long term client relationships also facilitated a strong flow of business during 2012, as we met more and more of our clients' aggregate financial needs."

Kurt Gollnick, the Bank's Chairman of the Board, stated: "The Board of Directors approved the purchase of Bank Owned Life Insurance ("BOLI") on key executives during 2012 as a means of ensuring that the potential costs of an unexpected transition would be covered, thereby protecting shareholder value. That investment proved wise with the untimely passing of President and Chief Executive Officer Fred Rowden, who successfully led the Bank through its organization, opening for business, and establishment as the premier community bank in Monterey County."