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1st Century Bancshares, Inc. Reports Financial Results For The Quarter Ended March 31, 2014

LOS ANGELES, May 8, 2014 (GLOBE NEWSWIRE) -- 1st Century Bancshares, Inc. (the "Company") (Nasdaq:FCTY), the holding company for 1st Century Bank, N.A. (the "Bank"), today reported net income for the quarter ended March 31, 2014 of $402,000, compared to $1.4 million for the same period last year. Pre-tax, pre-provision earnings for the quarter ended March 31, 2014 was $712,000, compared to $980,000, for the same period last year.

Pre-tax, pre-provision earnings, a non-GAAP financial measure, is presented because management believes adjusting the Company's results to exclude taxes and loan loss provisions provides stockholders with a useful metric for evaluating the profitability of the Company. A schedule reconciling our GAAP net income to pre-tax, pre-provision earnings is provided in the table below.

Alan I. Rothenberg, Chairman of the Board and Chief Executive Officer of the Company stated, "Although loan production slowed during the quarter, I'm pleased that we've continued to see growth in our core deposits and slight improvement in our net interest margin. Core deposits grew at an annualized rate of over 15% since the end of last year and our net interest margin improved to 3.25% compared to last year's margin of 3.19%, although still lower than optimum. In addition, asset quality has continued to be strong with total non-performing assets at only 15 basis points of total assets at the end of the quarter."

Jason P. DiNapoli, President and Chief Operating Officer of the Company added, "Our focus continues to remain on growing our core franchise and drilling deeper in our current market. I'm pleased that we continue to see positive growth in our deposits, and I believe that loan demand will resume. I also feel strongly that our local economy is healthy and that it will continue to improve throughout the year." 

2014 1st Q uarter Highlights
  • The Bank's total risk-based capital ratio was 14.24% at March 31, 2014, compared to the requirement of 10.00% to generally be considered a "well capitalized" financial institution for regulatory purposes. The Bank's equity is comprised solely of common stock and does not include any capital received in connection with TARP, or other forms of capital such as trust preferred securities, convertible preferred stock or other equity or debt instruments.
  • For the quarter ended March 31, 2014, the Company recorded net income of $402,000, or $0.04 per diluted share, compared to $1.4 million, or $0.16 per diluted share, during the same period last year.  The decline in net income during the three months ended March 31, 2014 as compared to the same period last year was primarily due to a $736,000 increase in non-interest expense and a $272,000 increase in income tax provisions during the quarter ended March 31, 2014 as compared to the same period in the year prior and a $500,000 reversal of provision for loan losses that was recorded during the quarter ended March 31, 2013. These items were partially offset by a $462,000 increase in net interest income. This increase in net interest income occurred even with the recognition of $294,000 in interest income during the three months ended March 31, 2013 in connection with the recovery of non-accrual and previously charged off loans during that period. 
  • At March 31, 2014 and 2013, the Company's book value per share was $5.85 and $5.54, respectively, representing an increase of 5.6%. 
  • Net interest margin was 3.25% during the quarter ended March 31, 2014, compared to 3.30% during the same period last year. The decline in net interest margin is primarily due to a recovery of non-accrual and previously charged off loans during the quarter ended March 31, 2013, which resulted in the recognition of $294,000 in interest income during that period. Excluding the impact of this recovery, net interest margins would have improved by approximately 20 basis points during the quarter ended March 31, 2014 compared to the same period last year. 
  • Loans decreased to $376.1 million at March 31, 2014, compared to $383.5 million at December 31, 2013.  Loan originations were $24.3 million during the quarter ended March 31, 2014, compared to $66.3 million during the same period last year.
  • Non-performing loans were $735,000, or 0.20% of total loans, at March 31, 2014, compared to $735,000, or 0.19% of total loans, at December 31, 2013.
  • Non-performing assets as a percentage of total assets was 0.15% at both March 31, 2014 and December 31, 2013.
  • Net loan recoveries were $16,000 during the quarter ended March 31, 2014, compared to net recoveries of $1.1 million during the same period last year.
  • As of March 31, 2014, the allowance for loan losses ("ALL") was $7.3 million, or 1.93% of total loans, compared to $7.2 million, or 1.89% of total loans, at December 31, 2013. The ALL to non-performing loans was 986.43% and 984.26% at March 31, 2014 and December 31, 2013, respectively.
  • Investment securities declined to $102.6 million at March 31, 2014, representing 18.5% of our total assets, compared to $106.3 million, or 19.7% of our total assets, at December 31, 2013. During the quarter ended March 31, 2014, the Company sold investment securities with an amortized cost of $14.8 million, recognizing gains of $253,000 in connection with these sales. In addition, the unrealized gain on investment securities increased to $279,000 at March 31, 2014, compared to $89,000 at December 31, 2013. 
  • Total core deposits, which includes non-interest bearing demand deposits, interest bearing demand deposits, and money market deposits and savings, were $425.3 million and $409.8 million at March 31, 2014 and December 31, 2013, respectively. Non-interest bearing deposits represent 51.6% of total deposits at March 31, 2014, compared to 52.3% at December 31, 2013. 
  • Cost of funds declined to 16 basis points for the quarter ended March 31, 2014, compared to 19 basis points for the same period last year.

Capital Adequacy

At March 31, 2014, the Company's stockholders' equity totaled $58.3 million compared to $55.4 million at December 31, 2013.  At March 31, 2014, the Bank's total risk-based capital ratio, tier 1 risk-based capital ratio, and tier 1 leverage ratio were 14.24%, 12.99%, and 9.63%, respectively, compared to the requirements of 10.00%, 6.00%, and 5.00%, respectively, to generally be considered a "well capitalized" financial institution for regulatory purposes. 

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