|By Marketwired .||
|February 5, 2014 09:12 PM EST||
SAN JOSE, CA -- (Marketwired) -- 02/05/14 -- Focus Business Bank (OTCQB: FCSB) announced unaudited financial results for the quarter and year ended December 31, 2013. Net income for the quarter was $315,000, or $0.11 per diluted share. For the year ended December 31, 2013, net income was $870,000, or $0.30 per diluted share, compared to $3,458,000, or $1.19 per diluted share, for the year ended December 31, 2012. The changes in net income for the quarter and year ended December 31, 2013 compared to the same periods in 2012 are primarily attributable to the reversal of the Bank's deferred tax asset in late 2012. Pre-tax income of $575,000 and $1,368,000 for the quarter and year ended December 31, 2013 increased 53% and 7%, respectively, compared to pre-tax income of $375,000 and $1,284,000 in the prior year quarter and annual periods. The primary contributors to the growth in pre-tax income were increases in net interest income and non-interest income which were partially offset by increased personnel and infrastructure growth.
President and Chief Executive Officer Richard L. Conniff commented on the December 31, 2013 results, "The Bank experienced outstanding growth in earning assets and deposits in 2013. Over the past five years, the Bank has committed heavily to growing its specialty businesses, cash management services for condominium homeowner associations and public benefit companies, both of which are significant sources of deposits. In addition to the strong growth in deposits from these specialty businesses, we also experienced growth in our core business banking lines resulting in loan growth and additional deposits. While the growth required an investment in personnel and other infrastructure, the Bank is now well positioned to benefit from the recurring long-term revenue generated by this larger base of earning assets."
Highlights of the year ended December 31, 2013
- Non-interest bearing deposits of $94.7 million at December 31, 2013 represent a 50% increase over December 31, 2012 and a record high level. Non-interest bearing deposits reflect the growth in business banking relationships.
- Interest bearing deposits of $190.4 million represent a 54% increase over December 31, 2012 and a record high level. The increase is primarily related to growth in the Bank's specialty businesses.
- Total loans of $140.3 million at December 31, 2013 were 18% above December 31, 2012 and a record high level.
- Net interest income of $6.8 million for the year ended December 31, 2013 represented 12% growth over the year ended December 31, 2012.
- Net income after taxes was $870,000 for the year ended December 31, 2013. Pre-tax net income of $1.4 million for the year was a record high.
Assets and Liabilities
Investment securities of $63.3 million have grown 116% since December 31, 2012 and interest bearing balances with other banks have grown 504% over that same period. The growth in investments and interest bearing balances with other banks has been funded primarily by increased core deposits.
The growth in deposits in 2013 was extraordinary and related, in part, to changing market conditions including opportunities following a competitor's sale of a competing business line to another bank. The timing of these market events has resulted in a very liquid balance sheet at December 31, 2013.
While the Bank was successful growing loans by 18%, the pace of growth in deposits was much higher. The loan to deposit ratio at December 31, 2013 is 49% compared to 64% at December 31, 2012. The Bank added to its lending and business development staff in 2013 and expects those investments to increase loan originations and the loan to deposit ratio in the future. At December 31, 2013, the Bank's loan portfolio is a mix of commercial and industrial loans and commercial real estate loans, primarily to businesses in Santa Clara County.
Net Interest Income
Net interest income for the quarter and year ended December 31, 2013 grew significantly over the same periods ending December 31, 2012. The increase in net interest income was directly related to the higher volume of earning assets. The increase in net interest income was partially offset by a lower net interest margin related to the mix of earning assets with a significantly higher proportion of earning assets being in lower yielding investments and interest bearing deposits with other banks. Short term market interest rates also remain at historically low levels.
Non-interest income was $1,578,000 for the year ended December 31, 2013 compared to $1,159,000 for the year ended December 31, 2012. Non-interest income for both annual periods consisted primarily of gains on the sale of SBA loans, a core business of the Bank, which totaled $1,158,000 and $717,000, for 2013 and 2012, respectively. Other non-interest income includes service charges and income from the servicing of loans sold in the secondary market.
Non-interest expense for 2013 was $7,013,000 compared to $5,964,000 for 2012. The increase in operating expenses is primarily the result of investments in personnel, marketing and infrastructure to support the Bank's substantial growth in earning assets and low cost deposits. The number of full-time equivalent employees at December 31, 2013 was 32 compared to 28 at December 31, 2012.
The Bank had no loan charge-offs in 2012 or 2013 and made no provision for loan losses in those years. The allowance for loan losses was 1.82% of total loans at December 31, 2013 compared to 2.13% at December 31, 2012. At December 31, 2013, the Bank had two loans totaling $1.1 million which were not performing in accordance with their contractual loan terms but were considered by management to be in the process of collection. Both loans were originated under the United States Small Business Administration (SBA) 7a loan program and, therefore, have guarantees from the SBA associated with them.
Focus Business Bank has capital ratios in excess of the minimum regulatory requirements for a bank to be considered well capitalized. At December 31, 2013, the total risk-based capital ratio was 14.84% compared to the regulatory well capitalized minimum of 10%. The Bank has not participated in any government sponsored capital programs, including the Troubled Asset Relief Program ("TARP") or the Small Business Lending Fund ("SBLF").
About Focus Business Bank
Focus Business Bank is dedicated to meeting the banking needs of closely-held businesses and professionals in Santa Clara County. The Bank's office is located at 10 Almaden Boulevard in downtown San Jose, California and offers a variety of commercial banking products including loans, deposits, remote deposit capture and other cash management services oriented toward closely-held businesses and their owners. The Bank specializes in commercial loans and is also an SBA Preferred Lender. The Bank also serves not-for-profit businesses and condominium homeowner associations by offering expertise, market knowledge and specialized products and services to these customers.
This release may contain forward-looking statements, such as, among others, statements about plans, expectations and goals concerning future growth and performance. Forward-looking statements are subject to risks and uncertainties. Such risks and uncertainties may include but are not necessarily limited to fluctuations in interest rates, inflation, government regulations and general economic conditions, including the real estate market in California and other factors beyond the Bank's control. Such risks and uncertainties could cause results for subsequent interim periods or for the entire year to differ materially from those indicated. Readers should not place undue reliance on the forward-looking statements, which reflect management's view only as of the date hereof. The Bank undertakes no obligation to publicly revise these forward-looking statements to reflect subsequent events or circumstances.
Focus Business Bank Unaudited Summary Financial Information As of ------------------------------- 12 Month BALANCE SHEET 31-Dec-13 30-Sep-13 31-Dec-12 % Change --------- --------- --------- -------- ($ in ',000s except per share data) ASSETS Cash and due from banks Interest bearing $ 61,323 $ 50,312 $ 52,560 17% Non-interest bearing 41,668 42,467 6,895 504% Federal funds sold 501 505 505 -1% Investment securities 63,293 47,602 29,368 116% Loans 140,342 134,315 119,415 18% Allowance for loan losses (2,548) (2,547) (2,545) 0% --------- --------- --------- Net Loans 137,794 131,768 116,870 18% Other assets 8,080 8,257 7,237 12% --------- --------- --------- TOTAL ASSETS $ 312,659 $ 280,911 $ 213,435 46% ========= ========= ========= LIABILITIES Deposits Non-interest bearing $ 94,661 $ 80,980 $ 63,065 50% Interest bearing 190,354 172,509 123,295 54% --------- --------- --------- Total deposits 285,015 253,489 186,360 53% Other liabilities 975 1,035 880 11% --------- --------- --------- TOTAL LIABILITIES 285,990 254,524 187,240 53% Stockholders' equity 26,695 26,387 26,195 2% --------- --------- --------- LIABILITIES AND STOCKHOLDERS' EQUITY $ 312,685 $ 280,911 $ 213,435 47% ========= ========= ========= Book value/share $ 9.10 $ 9.00 $ 8.97 1% Balance Sheet Ratios Loan/deposit 49% 53% 64% Non-interest/total deposit 33% 32% 34% Regulatory Capital Ratios Tier-1 leverage 8.50% 9.12% 11.77% Tier-1 risk based capital 13.58% 14.04% 16.81% Total risk-based capital 14.84% 15.30% 18.07% Asset Quality Metrics Non-performing loans $ 1,098 $ - $ - Non-performing loans/total loans 0.78% 0.00% 0.00% ALLL/total loans 1.82% 1.90% 2.13% Focus Business Bank Unaudited Summary Financial Information (cont.) Quarters Ended Year Ended -------------------- -------------------- INCOME STATEMENT 31-Dec-13 31-Dec-12 31-Dec-13 31-Dec-12 --------- --------- --------- --------- ($ in ',000s except per share data) Interest income $ 2,067 $ 1,769 $ 7,445 $ 6,531 Interest expense 175 123 642 442 --------- --------- --------- --------- Net interest income 1,892 1,646 6,803 6,089 Provision for loan losses - - - - Non-interest income 535 421 1,578 1,159 Non-interest expense 1,852 1,692 7,013 5,964 --------- --------- --------- --------- Pre-tax income (loss) 575 375 1,368 1,284 Income taxes 260 (16) 498 (2,174) --------- --------- --------- --------- Net income $ 315 $ 391 $ 870 $ 3,458 ========= ========= ========= ========= Net income per diluted share $ 0.11 $ 0.13 $ 0.30 $ 1.19 Performance Metrics Net interest margin 2.68% 3.35% 2.80% 3.60% Return on average assets 0.42% 0.75% 0.33% 1.95% Return on average equity 4.65% 5.98% 3.28% 14.47%
Richard L. Conniff
President and Chief Executive Officer
The 3rd International Internet of @ThingsExpo, co-located with the 16th International Cloud Expo - to be held June 9-11, 2015, at the Javits Center in New York City, NY - announces that its Call for Papers is now open. The Internet of Things (IoT) is the biggest idea since the creation of the Worldwide Web more than 20 years ago.
Oct. 2, 2014 11:45 AM EDT Reads: 3,218
Noted IoT expert and researcher Joseph di Paolantonio (pictured below) has joined the @ThingsExpo faculty. Joseph, who describes himself as an “Independent Thinker” from DataArchon, will speak on the topic of “Smart Grids & Managing Big Utilities.” Over his career, Joseph di Paolantonio has worked in the energy, renewables, aerospace, telecommunications, and information technology industries. His expertise is in data analysis, system engineering, Bayesian statistics, data warehouses, business intelligence, data mining, predictive methods, and very large databases (VLDB). Prior to DataArcho...
Oct. 2, 2014 11:00 AM EDT Reads: 1,166
Cultural, regulatory, environmental, political and economic (CREPE) conditions over the past decade are creating cross-industry solution spaces that require processes and technologies from both the Internet of Things (IoT), and Data Management and Analytics (DMA). These solution spaces are evolving into Sensor Analytics Ecosystems (SAE) that represent significant new opportunities for organizations of all types. Public Utilities throughout the world, providing electricity, natural gas and water, are pursuing SmartGrid initiatives that represent one of the more mature examples of SAE. We have s...
Oct. 2, 2014 11:00 AM EDT Reads: 1,199
The Internet of Things (IoT) is going to require a new way of thinking and of developing software for speed, security and innovation. This requires IT leaders to balance business as usual while anticipating for the next market and technology trends. Cloud provides the right IT asset portfolio to help today’s IT leaders manage the old and prepare for the new. Today the cloud conversation is evolving from private and public to hybrid. This session will provide use cases and insights to reinforce the value of the network in helping organizations to maximize their company’s cloud experience.
Oct. 2, 2014 08:00 AM EDT Reads: 1,381
Disruptive macro trends in technology are impacting and dramatically changing the "art of the possible" relative to supply chain management practices through the innovative use of IoT, cloud, machine learning and Big Data to enable connected ecosystems of engagement. Enterprise informatics can now move beyond point solutions that merely monitor the past and implement integrated enterprise fabrics that enable end-to-end supply chain visibility to improve customer service delivery and optimize supplier management. Learn about enterprise architecture strategies for designing connected systems tha...
Oct. 2, 2014 08:00 AM EDT Reads: 1,230
IoT is still a vague buzzword for many people. In his session at Internet of @ThingsExpo, Mike Kavis, Vice President & Principal Cloud Architect at Cloud Technology Partners, will discuss the business value of IoT that goes far beyond the general public's perception that IoT is all about wearables and home consumer services. The presentation will also discuss how IoT is perceived by investors and how venture capitalist access this space. Other topics to discuss are barriers to success, what is new, what is old, and what the future may hold.
Oct. 1, 2014 10:00 PM EDT Reads: 1,874
Whether you're a startup or a 100 year old enterprise, the Internet of Things offers a variety of new capabilities for your business. IoT style solutions can help you get closer your customers, launch new product lines and take over an industry. Some companies are dipping their toes in, but many have already taken the plunge, all while dramatic new capabilities continue to emerge. In his session at Internet of @ThingsExpo, Reid Carlberg, Senior Director, Developer Evangelism at salesforce.com, to discuss real-world use cases, patterns and opportunities you can harness today.
Oct. 1, 2014 08:30 PM EDT Reads: 2,251
All major researchers estimate there will be tens of billions devices – computers, smartphones, tablets, and sensors – connected to the Internet by 2020. This number will continue to grow at a rapid pace for the next several decades. With major technology companies and startups seriously embracing IoT strategies, now is the perfect time to attend @ThingsExpo in Silicon Valley. Learn what is going on, contribute to the discussions, and ensure that your enterprise is as "IoT-Ready" as it can be!
Oct. 1, 2014 05:00 PM EDT Reads: 2,443
Software AG helps organizations transform into Digital Enterprises, so they can differentiate from competitors and better engage customers, partners and employees. Using the Software AG Suite, companies can close the gap between business and IT to create digital systems of differentiation that drive front-line agility. We offer four on-ramps to the Digital Enterprise: alignment through collaborative process analysis; transformation through portfolio management; agility through process automation and integration; and visibility through intelligent business operations and big data.
Sep. 30, 2014 10:30 AM EDT Reads: 1,632
There will be 50 billion Internet connected devices by 2020. Today, every manufacturer has a propriety protocol and an app. How do we securely integrate these "things" into our lives and businesses in a way that we can easily control and manage? Even better, how do we integrate these "things" so that they control and manage each other so our lives become more convenient or our businesses become more profitable and/or safe? We have heard that the best interface is no interface. In his session at Internet of @ThingsExpo, Chris Matthieu, Co-Founder & CTO at Octoblu, Inc., will discuss how thes...
Sep. 29, 2014 06:45 AM EDT Reads: 1,944
Last week, while in San Francisco, I used the Uber app and service four times. All four experiences were great, although one of the drivers stopped for 30 seconds and then left as I was walking up to the car. He must have realized I was a blogger. None the less, the next car was just a minute away and I suffered no pain. In this article, my colleague, Ved Sen, Global Head, Advisory Services Social, Mobile and Sensors at Cognizant shares his experiences and insights.
Sep. 28, 2014 09:45 AM EDT Reads: 1,586
We are reaching the end of the beginning with WebRTC and real systems using this technology have begun to appear. One challenge that faces every WebRTC deployment (in some form or another) is identity management. For example, if you have an existing service – possibly built on a variety of different PaaS/SaaS offerings – and you want to add real-time communications you are faced with a challenge relating to user management, authentication, authorization, and validation. Service providers will want to use their existing identities, but these will have credentials already that are (hopefully) ir...
Sep. 27, 2014 11:30 PM EDT Reads: 1,964
Can call centers hang up the phones for good? Intuitive Solutions did. WebRTC enabled this contact center provider to eliminate antiquated telephony and desktop phone infrastructure with a pure web-based solution, allowing them to expand beyond brick-and-mortar confines to a home-based agent model. It also ensured scalability and better service for customers, including MUY! Companies, one of the country's largest franchise restaurant companies with 232 Pizza Hut locations. This is one example of WebRTC adoption today, but the potential is limitless when powered by IoT. Attendees will learn rea...
Sep. 27, 2014 10:30 PM EDT Reads: 1,876
From telemedicine to smart cars, digital homes and industrial monitoring, the explosive growth of IoT has created exciting new business opportunities for real time calls and messaging. In his session at Internet of @ThingsExpo, Ivelin Ivanov, CEO and Co-Founder of Telestax, will share some of the new revenue sources that IoT created for Restcomm – the open source telephony platform from Telestax. Ivelin Ivanov is a technology entrepreneur who founded Mobicents, an Open Source VoIP Platform, to help create, deploy, and manage applications integrating voice, video and data. He is the co-founder ...
Sep. 27, 2014 10:30 PM EDT Reads: 2,339
The Internet of Things (IoT) promises to create new business models as significant as those that were inspired by the Internet and the smartphone 20 and 10 years ago. What business, social and practical implications will this phenomenon bring? That's the subject of "Monetizing the Internet of Things: Perspectives from the Front Lines," an e-book released today and available free of charge from Aria Systems, the leading innovator in recurring revenue management.
Sep. 27, 2014 09:45 PM EDT Reads: 2,560
The Internet of Things will put IT to its ultimate test by creating infinite new opportunities to digitize products and services, generate and analyze new data to improve customer satisfaction, and discover new ways to gain a competitive advantage across nearly every industry. In order to help corporate business units to capitalize on the rapidly evolving IoT opportunities, IT must stand up to a new set of challenges.
Sep. 27, 2014 08:45 PM EDT Reads: 2,445
There’s Big Data, then there’s really Big Data from the Internet of Things. IoT is evolving to include many data possibilities like new types of event, log and network data. The volumes are enormous, generating tens of billions of logs per day, which raise data challenges. Early IoT deployments are relying heavily on both the cloud and managed service providers to navigate these challenges. In her session at 6th Big Data Expo®, Hannah Smalltree, Director at Treasure Data, to discuss how IoT, Big Data and deployments are processing massive data volumes from wearables, utilities and other mach...
Sep. 27, 2014 01:00 PM EDT Reads: 2,108
P2P RTC will impact the landscape of communications, shifting from traditional telephony style communications models to OTT (Over-The-Top) cloud assisted & PaaS (Platform as a Service) communication services. The P2P shift will impact many areas of our lives, from mobile communication, human interactive web services, RTC and telephony infrastructure, user federation, security and privacy implications, business costs, and scalability. In his session at Internet of @ThingsExpo, Erik Lagerway, Co-founder of Hookflash, will walk through the shifting landscape of traditional telephone and voice s...
Sep. 26, 2014 11:45 PM EDT Reads: 1,633
While great strides have been made relative to the video aspects of remote collaboration, audio technology has basically stagnated. Typically all audio is mixed to a single monaural stream and emanates from a single point, such as a speakerphone or a speaker associated with a video monitor. This leads to confusion and lack of understanding among participants especially regarding who is actually speaking. Spatial teleconferencing introduces the concept of acoustic spatial separation between conference participants in three dimensional space. This has been shown to significantly improve comprehe...
Sep. 26, 2014 10:45 PM EDT Reads: 1,549
The Internet of Things is tied together with a thin strand that is known as time. Coincidentally, at the core of nearly all data analytics is a timestamp. When working with time series data there are a few core principles that everyone should consider, especially across datasets where time is the common boundary. In his session at Internet of @ThingsExpo, Jim Scott, Director of Enterprise Strategy & Architecture at MapR Technologies, will discuss single-value, geo-spatial, and log time series data. By focusing on enterprise applications and the data center, he will use OpenTSDB as an example...
Sep. 26, 2014 07:45 PM EDT Reads: 2,363