HispanicBusiness

MONTEREY, CA -- (Marketwired) -- 04/30/13 -- 1st Capital Bank (OTCQB: FISB) (the "Bank") today announced first quarter financial results through March 31, 2013. The Bank achieved record levels of loans, assets, deposits, and shareholders' equity at March 31, 2013.

Net income during the first quarter of 2013 was $263 thousand, equivalent to $0.08 diluted earnings per share. This decreased from net income of $310 thousand during the first quarter of 2012, equivalent to $0.09 diluted earnings per share, primarily due to a greater provision for loan losses during the first quarter of 2013. The first quarter of 2013 net income also declined from $748 thousand during the fourth quarter of 2012, equivalent to $0.23 diluted earnings per share. Earnings during the fourth quarter of 2012 reflected two financially significant, but infrequent, events: (i) the recognition of $699 thousand in tax-free life insurance death benefits; and (ii) the Bank established a $294 thousand reserve for tax deductions claimed under the State of California Enterprise Zone program in light of positions taken by the California Franchise Tax Board.

Commenting on the first quarter of 2013 financial performance, Mark Andino, the Bank's President and Chief Executive Officer, stated: "We are very pleased to again announce record levels of loans, assets, deposits, and shareholders' equity. The Bank continues to attract an increasing number of local businesses and professionals who are seeking a concierge level of service, customized financial solutions, long term relationships with their community financial institution, and ready access to experienced bankers." Mr. Andino then continued: "Pre-tax income during the first quarter of 2013 was consistent with that of the immediately preceding quarter after adjusting for the life insurance benefits received during the fourth quarter of 2012. This was achieved despite there being two fewer days during the first quarter, which restrained net interest income on a comparative basis."

Kurt Gollnick, the Bank's Chairman of the Board added: "The Board of Directors worked extensively with the management team to identify opportunities to enhance shareholder value during the first quarter of 2013. Initiatives implemented during the first three months of 2013 included revamping the Bank's benefits program, investing more of the Bank's excess on balance sheet liquidity, further improving the Bank's commercial lending products and pricing, and increasing the use of equity compensation in lieu of cash compensation. As previously announced, we followed these initiatives with the decision on April 22, 2013 to file a Form 15 with the Federal Deposit Insurance Corporation ("FDIC") and thereby voluntarily deregister the Bank's common shares under the Securities Exchange Act of 1934 in order to reduce prospective professional fees while also saving internal resources."

Performance Highlights

•The Bank continued to present an excellent credit profile at March 31, 2013, with a non-performing asset ratio of 0.26%. The Bank did, however, record its first charge-off in several quarters during the first three months of 2013, as further discussed below.

•Non-accrual loans totaled $0.9 million at March 31, 2013, equivalent to 0.37% of loans outstanding.

•Total deposits rose 5.2% during the first quarter of 2013, while transaction accounts increased from 89.4% of total deposits at December 31, 2012 to 90.5% of total deposits at March 31, 2013.

•At March 31, 2013, the Bank maintained a regulatory total risk-based capital ratio of 15.08%, substantially in excess of the 10.00% threshold to be categorized in the highest regulatory capital classification of "well capitalized."

•Tangible book value per share rose to $10.36 as of March 31, 2013.