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1st CENTURY BANK SPONSORED 3RD ANNUAL WALK FOR WISHES Los Angeles, CA – June 4, 2010 – 1st Century Bank (NASDAQ: FCTY) sponsored and participated in the Make-A-Wish Foundation of Greater Los Angeles’ 3rd Annual Walk for Wishes. The event took place on Saturday, May 15th and raised over $200,000. The funds raised will be used to help grant the wishes of more than 30 children in Los Angeles County. “1st Century Bank was honored to sponsor and participate in the 3rd Annual Walk for Wishes,” said President, Jason P. DiNapoli. “As a local Southern California community bank, we are committed to giving back to the very community in which we work and live. To help make a child’s wish come true, is the ultimate form of giving.” About Make-A-Wish Foundation 1st Century Bank had a team of 10 walkers. The team of staff, family and friends enjoyed the event and look forward to participating in the 4th Annual Walk for Wishes next year. About 1st Century Bancshares, Inc. 1st Century Bancshares, Inc. is a publicly owned company traded on the Nasdaq Capital Market under the symbol “FCTY.” The Company’s wholly owned subsidiary, 1st Century Bank, N.A., is a full service commercial bank headquartered in the Century City area of Los Angeles. The Bank’s primary focus is relationship banking to family owned and closely held small and middle market businesses, professional service firms and high net worth individuals, real estate investors, medical professionals, and entrepreneurs. The Company maintains a website at www.1stcenturybank.com. By including the foregoing website address link, the Company does not intend to incorporate by reference any material contained therein.
1ST CENTURY BANCSHARES, INC. REPORTS FINANCIAL RESULTS Los Angeles, CA (April 23, 2010) – 1st Century Bancshares, Inc. (the “Company”) (NASDAQ:FCTY), the holding company of 1st Century Bank, N.A. (the “Bank”), today reported financial results for the quarter ended March 31, 2010. “I am pleased to see that our year-end actions appear to be bearing fruit. We have returned to profitability, reporting $124,000 of net income for the current quarter. Non-performing loans declined approximately 8% from year-end and we increased our loan loss reserve to approximately 3.2% of outstanding loans. Our core deposits are up 36% from the same period last year; and we remain very liquid, including a loan to deposits ratio of 85%. Our capital ratios are strong at 21.62% total risk based capital compared to the regulatory required 10%, with all of our capital being common equity; no preferred stock, no trust preferred stock, no troubled asset relief program (“TARP”) funds, and no other synthetic equity instruments,” stated Alan I. Rothenberg, Chairman of the Board and Chief Executive Officer of 1st Century Bancshares, Inc. “As the country’s economy appears to be starting to recover, we believe we are extremely well positioned to enjoy quality growth for our shareholders and a continued safe environment for our depositors.” “Core deposit relationships are the foundation of our franchise,” said Jason P. DiNapoli, President and Chief Operating Officer of 1st Century Bancshares, Inc. “So far in 2010, our sales team has successfully attracted new customer relationships and has demonstrated an ability to grow deposits in any economic environment. We’re continuing to see opportunities in our market, and community business banks like 1st Century that are focused on relationship banking are filling a void left by both larger financial institutions and failed banks.” 2010 1st Quarter Highlights • The Bank’s total risk-based capital ratio was 21.62% at March 31, 2010, which is substantially above the regulatory standard of 10.0% for “well-capitalized” financial institutions. The Bank’s capital does not include any funding received in connection with TARP, which we declined to apply for and participate in, nor other forms of capital, such as trust preferred securities, convertible preferred stock or other equity or debt instruments. • Total core deposits, which include non-interest bearing demand deposits, interest bearing demand deposits and savings and money market deposits, were $145.5 million and $133.9 million at March 31, 2010 and December 31, 2009, respectively, representing an increase of $11.6 million, or 8.6%. At March 31, 2009, total core deposits were $107.0 million, representing an increase during the current period of $38.5 million, or 36.0%, as compared to the prior period. • As of March 31, 2010, the allowance for loan losses was $5.5 million, or 3.19% of gross loans, compared to $5.5 million, or 3.01% of gross loans, at December 31, 2009. • Non-performing loans totaled $9.0 million and $9.8 million at March 31, 2010 and December 31, 2009, respectively. The decline in non-performing loans was primarily attributable to loan pay-downs received during the current quarterly period. • Net interest margin improved to 3.96% for the quarter ended March 31, 2010, compared to 3.80% for the quarter ended December 31, 2009. Net interest margin for the same period last year was 4.39%, representing a decline during the current quarter of 43 basis points, as compared to the prior period. • For the three months ended March 31, 2010 and 2009, the Company recorded net income of $124,000, or $0.01 per diluted share, and $130,000, or $0.01 per diluted share, respectively. Capital Adequacy At March 31, 2010, the Company’s stockholders’ equity totaled $46.8 million compared to $46.3 million at December 31, 2009. The increase was primarily related to the increase in unrealized gain on our Available for Sale investment portfolio and the net income for the quarter ended March 31, 2010. At March 31, 2010, the Bank’s total risk-based capital ratio, tier 1 capital ratio, and leverage ratio were 21.62%, 20.35%, and 15.89%, respectively, and were more than double the regulatory requirements for “well-capitalized” financial institutions of 10.00%, 6.00%, and 5.00%, respectively. Balance Sheet Total assets decreased 3.1%, or $8.5 million, to $263.6 million at March 31, 2010, from $272.1 million at December 31, 2009. This fluctuation in total assets was primarily attributable to a decrease in gross loans. Gross loans at March 31, 2010 were $172.7 million, which represents a decrease of $9.0 million, or 5.0%, from $181.7 million at December 31, 2009. This decrease was attributable to loan amortization and pay-downs incurred during the current period. Total liabilities decreased by $9.0 million to $216.8 million as compared to $225.8 million at December 31, 2009. This fluctuation was primarily due to a $3.7 million decrease in deposits and a $5.0 million decline in other borrowings. At March 31, 2010, total deposits were $203.6 million compared to $207.4 million at December 31, 2009, representing a decrease of 1.8% or $3.8 million. This decline was primarily due to a decrease in certificates of deposits of $15.3 million, partially offset by increases in non-interest bearing demand deposits, interest bearing demand deposits and savings and money market deposits of $3.9 million, $3.7 million and $3.9 million, respectively. The decrease in certificates of deposits was primarily attributable to a decrease of $5.0 million in State of California Treasurer’s Office certificates of deposit. The increase in non-interest bearing, as well as interest bearing demand deposits was the result of our efforts to specifically focus on growing our core deposit franchise. The decline in other borrowings was related to the maturity and repayment of a $5.0 million long-term borrowing in January 2010. Credit Quality Allowance and Provision for Loan Losses The allowance for loan losses (“ALL”) was $5.5 million, or 3.19% of our total loan portfolio, at March 31, 2010 as compared to $5.5 million, or 3.01% of our total loan portfolio, at December 31, 2009. We did not record a provision for loan losses during the current period as it was determined that our ALL was adequate to support the known and inherent risk of loss in the loan portfolio, and for specific reserves required as of March 31, 2010. Non-Performing Assets Non-performing loans totaled $9.0 million and $9.8 million at March 31, 2010 and December 31, 2009, respectively. At March 31, 2010, non-accrual loans consisted of six commercial loans totaling $2.5 million, two real estate-commercial mortgage loans totaling $5.7 million, and two real estate-residential mortgage loans totaling $845,000. As a percentage of our total loan portfolio, the amount of non-performing loans was 5.21% and 5.40% at March 31, 2010 and December 31, 2009, respectively. “Despite the measured improvements in the economy, we’re continuing to focus resources on closely monitoring our loan portfolio and diligently working with borrowers to expeditiously resolve any remaining credit issues,” said Jason P. DiNapoli, President and Chief Operating Officer of 1st Century Bancshares, Inc. “Our policy in regards to credit has been consistent through this cycle as we continue to maintain a direct approach that enables us to deal candidly with any lending relationship that has a possible negative outlook.” Net Interest Income and Margin For the quarter ended March 31, 2010, average interest-earning assets were $253.9 million, generating net interest income of $2.5 million. For the quarter ended March 31, 2009, average interest-earning assets were $254.7 million, generating net interest income of $2.8 million. The Company’s net interest margin for the quarter ended March 31, 2010 was 3.96% compared to 3.80% for the quarter ended December 31, 2009. This 16 basis point improvement was primarily attributable to a 7 basis point increase in our loan yield and a 12 basis point decline in our cost of funds. The increase in our loan yield was primarily related to a decline in the average balance of non-performing loans. The accrual of interest has been suspended on all of our non-performing loans. Net interest margin for the same period last year was 4.39%. The decline of 43 basis points in net interest margin during the current quarter as compared to the same period last year was primarily due to a decrease in yield on earning assets of 51 basis points, partially offset by a 5 basis point decline in the cost of interest bearing deposits and borrowings. The decrease in yield on earning assets was primarily the result of an increase in the average balance of lower yielding interest earning deposits at other financial institutions. For the quarter ended March 31, 2010 and 2009, the average balance of interest bearing deposits at other financial institutions was $28.5 million and $119,000, respectively. During the three months ended March 31, 2010, the cost of interest bearing deposits and other borrowings declined by 5 basis points compared to the same period last year. This decrease was primarily attributable to the cost of our certificates of deposits declining by 25 basis points during the period, as these deposits repriced to lower current market interest rates, partially offset by the cost of money market deposits increasing by 8 basis points. “During the quarter, we continued to maintain an elevated level of lower yielding liquid assets on our balance sheet. Although this strategy may have a negative impact our current net interest margin, we continue to consider this is a prudent approach given the current economic environment, allowing us great flexibility as the economy recovers,” stated Mr. DiNapoli. Non-Interest Income Non-interest income was $229,000 for the quarter ended March 31, 2010 compared to $217,000 for the quarter ended March December 31, 2009. Non-interest income primarily consists of loan arrangement fees, loan syndication fees, service charges and fees on deposit accounts, as well as other operating income, which mainly consists of wire transfer fees. Non-Interest Expense Non-interest expense was $2.6 million for the quarter ended March 31, 2010 compared to $2.5 million for the quarter ended March 31, 2009, representing an increase of $96,000, or 3.9%. Compensation and benefits increased $72,000, or 5.4%, to $1.4 million for the three months ended March 31, 2010 from $1.3 million for the three months ended March 31, 2009. FDIC assessments increased $31,000 to $91,000 for the three months ended March 31, 2010 compared to $60,000 for the three months ended March 31, 2009. This increase was primarily due to an increase in the FDIC assessment rate and an increase in deposits as compared to March 31, 2009. Income Tax Provision During the three months ended March 31, 2010, we did not record an income tax provision related to our pretax earnings because of our cumulative losses since inception. Tax expense that would normally arise because of the Company’s earnings in the first quarter of 2010 is not recorded because it is offset by a reduction in the valuation allowance on the Company’s deferred tax asset. The income tax provision for the three months ended March 31, 2009 was $84,000 and resulted in an effective tax rate of 39.3%. Net Income For the three months ended March 31, 2010 and 2009, the Company recorded net income of $124,000, or $0.01 per diluted share, and $130,000, or $0.01 per diluted share, respectively. The decline in net income during the current period compared to the same period last year was primarily due to a $279,000 decrease in net interest income and a $96,000 increase in total non-interest expenses. These items were partially offset by a $273,000 decrease in provision for loan losses and an $84,000 decrease in income tax provision. About 1st Century Bancshares, Inc. 1st Century Bancshares, Inc. is a publicly owned company traded on the Nasdaq Capital Market under the symbol “FCTY.” The Company’s wholly owned subsidiary, 1st Century Bank, N.A., is a full service business bank headquartered in the Century City area of Los Angeles. The Bank’s primary focus is serving small, community bank relationships with big bank technologies and services. The Company maintains a website at www.1stcenturybank.com. By including the foregoing website address link, the Company does not intend to and shall not be deemed to incorporate by reference any material contained therein. Safe Harbor Certain matters discussed in this press release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. You can find many (but not all) of these forward-looking statements by looking for words such as “approximates,” “believes,” “expects,” “anticipates,” “estimates,” “intends,” “plans,” “would,” “may” or other similar expressions in this press release. These statements are based upon our current expectations and speak only as of the date hereof. Forward-looking statements are subject to certain risks and uncertainties that could cause our actual results, performance or achievements to differ materially and adversely from those expressed, suggested or implied herein. Accordingly, investors should use caution in relying on forward-looking statements to anticipate future results or trends. These risks and uncertainties include, but are not limited to: (1) the impact of changes in interest rates, (2) a continuing decline in economic conditions, (3) increased competition among financial service providers, (4) government regulation; and (5) the other risks set forth in the Company’s reports filed with the U.S. Securities and Exchange Commission. The Company does not undertake, and specifically disclaims, any obligation to revise or update any forward-looking statements for any reason. # # # (Tables follow) Summary Financial Information The following tables present relevant financial data from the Company’s recent performance (dollars in thousands, except share data):
*Percentages are reported on an annualized basis.
1ST CENTURY BANCSHARES, INC. REPORTS FINANCIAL RESULTS Los Angeles, CA (March 15, 2010) – 1st Century Bancshares, Inc. (the “Company”) (NASDAQ:FCTY), the holding company of 1st Century Bank, N.A. (the “Bank”), today reported financial results for its fourth quarter and year ended December 31, 2009. “Despite the challenges that banks in general have been facing due to current economic conditions, I’m encouraged by 1st Century Bank’s ability and success in growing our core deposit franchise, which increased by over 33% during the year,” said Alan I. Rothenberg, Chairman of the Board and Chief Executive Officer of 1st Century Bancshares. “When the economy ultimately normalizes, I believe that we’ll be well positioned to continue to grow our franchise. Further, we have remained focused on ensuring that our capital ratios are well in excess of those required by our regulators and that our bank offers a safe environment for customer deposits. At December 31, 2009, the Bank’s total risk based capital ratio was double the regulatory requirement to be deemed “well capitalized” - 20.8% versus 10.0%. As we’ve grown core deposits, our cost of funds during the year has declined to 66 basis points and our cost of deposits has decreased to 49 basis points. Our liquidity, as measured by our loan-to-deposit ratio, has improved from 129.6% at the end of last year to 87.6% this year. In addition, we have aggressively focused on identifying, addressing and effectively resolving our problem assets, which resulted in $5.8 million of net charge-offs during the year and a provision for loan losses of $6.2 million. At December 31, 2009, our allowance for loan losses to total loans increased to a healthy 3.0%.” Rothenberg further commented, “The $7.8 million net loss for the year was primarily caused by the $6.2 million provision for loan losses and a $3.5 million deferred tax provision recorded during the third quarter, which was a non-cash accounting item that had no material effect on our regulatory capital.” Rothenberg added, “Our pre-tax, pre-provision earnings, which excludes the impact of these items, was $1.8 million for the current year as compared to $1.7 million for the same period last year.” Pre-tax, pre-provision earnings figures, are presented because the Company believes adjusting its results to exclude tax and loan loss provisions provides stockholders with a more comparable basis for evaluating period-to-period operating results. A schedule reconciling GAAP net loss to pre-tax, pre-provision earnings is provided in the table below. Total deposits increased $53.1 million, or 34.4%, from $154.3 million at December 31, 2008 to $207.4 million at December 31, 2009. The increase in deposits resulted primarily from an increase in non-interest-bearing and interest-bearing demand deposits, as well as an increase in certificates of deposits, partially offset by a decrease in savings and money market deposits. 2009 Quarterly and Annual Financial Highlights • The Bank’s total risk-based capital ratio was 20.79% at December 31, 2009, which is substantially above the regulatory standard of 10.0% for “well-capitalized” financial institutions. The Bank’s capital consists entirely of common equity and does not include any funding received in connection with the troubled asset relief program (“TARP”), which we declined to apply for and participate in, nor other forms of capital, such as trust preferred securities, convertible preferred stock or other equity or debt instruments. • As of December 31, 2009, total assets were $272.1 million, representing an increase of $12.7 million, or 4.9%, from $259.4 million at December 31, 2008. • Gross loans decreased $18.3 million, or 9.2%, to $181.7 million at December 31, 2009 from $200.0 million at December 31, 2008 due to loan payoffs and paydowns, as well as charge-offs. • As of December 31, 2009, the allowance for loan losses was $5.5million, or 3.01% of gross loans, compared to $5.2 million, or 2.59% of gross loans, at December 31, 2008. • Provision for loan losses was $6.2 million for 2009 compared to $4.3 million for 2008. • Net interest margin for the fourth quarter of 2009 decreased 52 basis points to 3.80% compared to 4.32% for the fourth quarter of 2008. Net interest margin decreased to 4.13% from 4.63% comparing year ended December 31, 2009 to year ended December 31, 2008. • Income tax provision for the year ended December 31, 2009 was $3.5 million compared to an income tax benefit of $1.1 million for the year ended December 31, 2008. The income tax provision was related to recording of a valuation allowance against the Company’s deferred tax assets. • Net loss was $3.5 million or $0.39 per diluted share and $7.8 million or $0.86 per diluted share for the fourth quarter and the year ended December 31, 2009, respectively, compared to net loss of $1.9 million or $0.19 per diluted share and $1.5 million or $0.15 per diluted share for the fourth quarter and the year ended December 31, 2008, respectively. • During the year ended December 31, 2009, the Company completed its $5.0 million stock repurchase program that was launched in September 2008. Upon completion of this program, the Company had repurchased 1,163,800 shares of its common stock at an average discount to its book value of approximately 20%. Capital Adequacy At December 31, 2009, the Company’s stockholders’ equity totaled $46.3 million compared to $57.0 million at December 31, 2008. The decrease was primarily related to a net loss of $7.8 million for the year ended December 31, 2009, and the repurchase of 804,400 shares of common stock for a total cost to the Company of $3.2 million under the Company’s stock repurchase program during the year ended December 31, 2009. The Company concluded its stock repurchase program during 2009. Throughout this program, the Company repurchased 1,163,800 shares of common stock, or approximately 10% of the total outstanding common stock, at a discount of approximately 20% to its book value at that time. At December 31, 2009, the Bank’s total risk-based capital ratio, tier 1 capital ratio, and leverage ratio were 20.79%, 19.53%, and 15.33%, respectively, and were more than double the regulatory requirements for “well-capitalized” financial institutions of 10.00%, 6.00%, and 5.00%, respectively. Balance Sheet Total assets increased 4.9%, or $12.7 million, to $272.1 million at December 31, 2009, from $259.4 million at December 31, 2008. The growth in total assets was primarily due to an increase of $41.7 million in cash and cash equivalents, partially offset by decreases of $7.8 million and $18.5 million in investment securities and loans, net, respectively. Cash and cash equivalents totaled $45.9 million at December 31, 2009 and $4.2 million at December 31, 2008. The increase in cash and cash equivalents was primarily due to increased liquidity maintained at the current year end. This liquidity was primarily generated by growth in our deposits and the normal amortization within our loan and investment portfolios. Investment securities decreased 15.3% or $7.8 million from $50.8 million at December 31, 2008 to $43.1 million at December 31, 2009 primarily due to normal amortization of the portfolio. Loans, net of the allowance for loan losses and deferred cost/unearned fees, decreased 9.5% or $18.5 million from $194.8 million at December 31, 2008 to $176.3 million at December 31, 2009. The decrease in the loan portfolio during the current year was primarily the result of loan pay-offs and pay-downs, as well as loan charge-offs. Loan originations were $119.4 million and $169.0 million during the years ended December 31, 2009 and 2008, respectively. The decline in loan originations was primarily due to a reduction in customer demand. Total deposits increased $53.1 million, or 34.4%, from $154.3 million at December 31, 2008 to $207.4 million at December 31, 2009. The increase in deposits resulted primarily from an increase in non-interest-bearing and interest-bearing demand deposits, as well as an increase in certificates of deposit, partially offset by a decrease in savings and money market deposits. Non-interest-bearing demand deposits increased $27.5 million, or 68.4%, from $40.3 million at December 31, 2008 to $67.8 million at December 31, 2009. Interest-bearing demand deposits increased $11.7 million, or 142.5%, from $8.2 million at December 31, 2008 to $19.9 million at December 31, 2009. Savings and money market deposits decreased $5.9 million, or 11.2%, from $52.1 million at December 31, 2008 to $46.2 million at December 31, 2009. The increases in non-interest-bearing and interest-bearing demand deposits are primarily attributable to the Company’s continued marketing and sales efforts to expand the Bank’s core deposit franchise. Certificates of deposits increased $19.7 million, or 36.7%, from $53.7 million at December 31, 2008 to $73.4 million at December 31, 2009. The increase in certificates of deposit was primarily attributable to the Certificate of Deposit Accounts Registry Service (“CDARS”) program, which commenced in January 2009 and an additional $5.0 million in certificates of deposit from the State of California Treasurer’s Office. At December 31, 2009, the Bank had $12.0 million of CDARS related deposits. “We remain cautiously optimistic that we will continue to grow our deposit franchise and that this will result in future lending opportunities,” said Jason P. DiNapoli, President and Chief Operating Officer of 1st Century Bancshares, Inc. “We continue to see customer discontent with larger institutional banks and I truly believe that significant business opportunities exist within our market. Our sales force is focused on cultivating customer relationships through superior customer service and coordinated marketing efforts.” Credit Quality Allowance and Provision for Loan Losses The allowance for loan losses was $5.5 million, or 3.01% of our total loan portfolio, at December 31, 2009 as compared to $5.2 million, or 2.59% of our total loan portfolio, at December 31, 2008. The change in the allowance for loan losses was due primarily to the provision for loan losses of $6.2 million, less net charge-offs of $5.8 million. The provision for loan losses was recorded to provide reserves adequate to support the known and inherent risk of loss in the loan portfolio, and for specific reserves required as of December 31, 2009. The provision for loan losses was $3.8 million and $6.2 million for the quarter and year ended December 31, 2009, respectively, compared to $3.6 million and $4.3 million for the same periods a year ago. Non-performing Assets Non-performing loans totaled $9.8 million and $5.7 million at December 31, 2009 and 2008, respectively. The fluctuation in non-performing loans was primarily caused by gross increases of $4.6 million in commercial loans and $5.2 million in commercial real estate loans, partially offset by charge-offs of $1.5 million and $2.7 million, respectively. Non-performing loans were further impacted by $1.6 million of charge-offs related to consumer and other loans. During the year ended December 31, 2009, 86.30% of the loan charge-offs related to five lending relationships. These charge-offs were primarily recorded in connection with a decline in real estate collateral values incurred during the year. As a percentage of our total loan portfolio, the amount of non-performing loans was 5.40% and 2.85% at December 31, 2009 and 2008, respectively. “We remain intensely focused on effectively managing through this credit cycle and working closely with our borrowers during this difficult economic environment,” said Jason P. DiNapoli, President and Chief Operating Officer of 1st Century Bancshares, Inc. “We are committed to addressing loan problems directly and expeditiously to allow us to focus on future opportunities as the economy gradually recovers.” Net Interest Income and Margin For the quarter and the year ended December 31, 2009, average interest-earning assets were $258.2 million and $252.4 million, respectively, generating net interest income of $2.5 million and $10.4 million, respectively. For the quarter and year ended December 31, 2008, average interest-earning assets were $252.2 million and $241.4 million, respectively, generating net interest income of $2.7 million and $11.2 million, respectively. The growth in average earning assets during the quarter and year ended December 31, 2009 was primarily related to interest-earning deposits at other financial institutions, which was primarily funded by an increase in deposits and borrowings. The Company’s net interest margin for the quarter ended December 31, 2009 was 3.80% compared to 4.32% for the quarter ended December 31, 2008. The 52 basis point decrease in net interest margin was primarily due to a decrease in yield on earning assets of 93 basis points, partially offset by a decrease of 66 basis points in the rate paid for interest-bearing deposits and borrowings. The decrease in yield on earning assets was primarily the result of a 35 basis point decrease in loan yield and an increase in the average balance of lower yielding interest-earning deposits at other financial institutions. The decline in yield earned on our loan portfolio was primarily attributable to the increase in our average non-accrual loans outstanding during the quarter and new loan originations, which were originated at lower current market interest rates. The Company’s net interest margin was 4.13% and 4.63% for the years ended December 31, 2009 and 2008, respectively. The 50 basis point decline in net interest margin was primarily due to a decrease in yield on earning assets of 113 basis points, partially offset by a 105 basis point decline in the cost of interest-bearing deposits and borrowings. The decrease in yield on earning assets was primarily the result of a 118 basis point decrease in the Company’s loan yield and, to a lesser extent, an increase in the average balance of lower yielding interest-earning deposits at other financial institutions. As discussed above, the decline in yield earned on our loan portfolio was primarily attributable to the increase in our average non-accrual loans outstanding during the year and new loan originations, which were originated at lower current market interest rates. Non-Interest Income Non-interest income was $250,000 for the quarter ended December 31, 2009 compared to $252,000 for the quarter ended December 31, 2008. Non-interest income was $1.0 million for the year ended December 31, 2009 compared to $581,000 for the year ended December 31, 2008. The increase in non-interest income of $445,000 was primarily due to an increase in loan arrangement fees from $354,000 in 2008 to $734,000 in 2009, and an increase in service charges and other operating income from $177,000 in 2008 to $267,000 in 2009. Non-Interest Expense Non-interest expense was $2.4 million for the quarter ended December 31, 2009 compared to $2.7 million for the quarter ended December 31, 2008, representing a decrease of $273,000, or 10.1%. Non-interest expense was $9.6 million for the year ended December 31, 2009 compared to $10.1 million for the year ended December 31, 2008, representing a decrease of $453,000, or 4.5%. Compensation and benefits increased $142,000 or 12.5%, to $1.3 million for the quarter ended December 31, 2009 from $1.1 million for the quarter ended December 31, 2008. Compensation and benefits decreased $498,000, or 8.9%, to $5.1 million for the year ended December 31, 2009 from $5.6 million for the year ended December 31, 2008. FDIC assessments increased $63,000 to $91,000 for the quarter ended December 31, 2009 compared to $28,000 for the quarter ended December 31, 2008. The increase was primarily due to an increase in the FDIC assessment rate. This assessment increased $268,000 to $374,000 for the year ended December 31, 2009 compared to $106,000 for the year ended December 31, 2008. The increase during the year was primarily due to an increase in the assessment rate, as well as a $99,000 special FDIC assessment that was accrued and paid during the year ended December 31, 2009. Other operating expense decreased $217,000 to $486,000 for the quarter ended December 31, 2009 compared to $703,000 million for the quarter ended December 31, 2008. Other operating expense decreased $94,000, or 5.1%, to $1.8 million for the year ended December 31, 2009 compared to $1.9 million for the year ended December 31, 2008. Income Tax Provision (Benefit) The income tax provision for the quarter and year ended December 31, 2009 was none and $3.5 million, respectively compared to an income tax benefit of $1.4 million and $1.1 million, respectively for the same periods last year. At December 31, 2009, the Company had a valuation allowance of $5.3 million against its net deferred tax assets. This valuation allowance was established based on management’s assessment regarding the near-term likelihood of the Company’s ability to generate sufficient future taxable income to realize the benefits associated with these deferred tax assets. This non-cash charge did not affect the Company’s cash flows or liquidity and did not have a significant effect on the Bank’s regulatory capital ratios. Loss before Income Taxes The Company’s loss before income taxes for the quarter and the year ended December 31, 2009 was $3.5 million and $4.3 million, respectively. The Company’s loss before income taxes for the quarter and the year ended December 31, 2008 was $3.3 million and $2.6 million, respectively. About 1st Century Bancshares, Inc. 1st Century Bancshares, Inc. is a publicly owned company traded on the Nasdaq Capital Market under the symbol “FCTY.” The Company’s wholly owned subsidiary, 1st Century Bank, N.A., is a full service commercial bank headquartered in the Century City area of Los Angeles. The Bank’s primary focus is relationship banking to family owned and closely held small and middle market businesses, professional service firms and high net worth individuals, real estate investors, medical professionals, and entrepreneurs. The Company maintains a website at www.1stcenturybank.com. By including the foregoing website address link, the Company does not intend to incorporate by reference any material contained therein. Safe Harbor Certain matters discussed in this press release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. You can find many (but not all) of these forward-looking statements by looking for words such as “approximates,” “believes,” “expects,” “anticipates,” “estimates,” “intends,” “plans,” “would,” “may” or other similar expressions in this press release. These statements are based upon our current expectations and speak only as of the date hereof. Forward-looking statements are subject to certain risks and uncertainties that could cause our actual results, performance or achievements to differ materially and adversely from those expressed, suggested or implied herein. Accordingly, investors should use caution in relying on forward-looking statements to anticipate future results or trends. These risks and uncertainties include, but are not limited to: (1) the impact of changes in interest rates, (2) a continuing decline in economic conditions, (3) increased competition among financial service providers, (4) government regulation; and (5) the other risks set forth in the Company’s reports filed with the U.S. Securities and Exchange Commission. The Company does not undertake, and specifically disclaims, any obligation to revise or update any forward-looking statements for any reason. # # # (Tables follow)
1st CENTURY BANK AND ALAN I. ROTHENBERG FEATURED IN HUFFINGTON POST BLOG LOS ANGELES – January 20, 2010 - 1st Century Bank and Alan I. Rothenberg are featured in a Huffington Post blog. To view this article, visit the following link.
LOS ANGELES – December 18, 2009 – 1st Century Bancshares, Inc. (NASDAQ: FCTY) (the “Company”), the holding company of 1st Century Bank, N.A. (the “Bank”), announced the completion of a stock repurchase program that was launched in September 2008. Prior to commencement of the stock repurchase program, the Company’s Board of Directors authorized the purchase of up to $5 million of the Company’s common stock over a 24 month period. The Company repurchased 1,163,800 shares of its common stock at an average price of $4.30, which represents approximately a 20% discount from its book value at September 30, 2009. Even after repurchasing approximately 10% of its outstanding common stock, the Bank remains one of the most well-capitalized banks in Southern California with a risk based capital ratio of 21.33% as of September 30, 2009, more than twice the amount regulators require to be categorized as "well-capitalized.” “The successful completion of the stock repurchase program not only reflects our belief in the value of the Company, but demonstrates that to our shareholders” said Alan I. Rothenberg, Chairman and CEO of 1st Century Bancshares. “During this past year of uncertainty, we’ve remained committed to delivering shareholder value through our stock repurchase program and ensuring that our customers are doing business with a bank that’s equally committed to its safety and security, as evidenced by our risk-based capital ratio of 21.33%.” About 1st Century Bancshares, Inc. Safe Harbor Certain matters discussed in this press release constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward looking statements, include, but are not limited to, 1st Century Bancshares’ ability to provide greater flexibility for capital planning and operational expansion, navigate the difficult banking environment, maintain strong loan loss reserves and remain well capitalized and implement operational enhancements. These forward-looking statements are subject to certain risks and uncertainties that could cause the actual results, performance or achievements to differ materially from those expressed, suggested or implied by the forward-looking statements. These risks and uncertainties include, but are not limited to: (1) the impact of changes in interest rates, a decline in economic conditions and increased competition among financial service providers on 1st Century’s operating results, ability to attract deposit and loan customers and the quality of 1st Century’s earning assets; (2) government regulation; and (3) the other risks set forth in 1st Century’s reports filed with the U.S Securities and Exchange Commission. 1st Century does not undertake, and specifically disclaims, any obligation to revise or update any forward-looking statements for any reason
1st CENTURY BANCSHARES, INC. ANNOUNCES NEW MEMBER ON EXECUTIVE TEAM BRAD SATENBERG IS APPOINTED CHIEF FINANCIAL OFFICER LOS ANGELES, CA – December 14th, 2009 – 1st Century Bancshares, Inc. (NASDAQ: FCTY), the holding company of 1st Century Bank, N.A. (the “Bank”), announced today the appointment of Bradley S. Satenberg as Executive Vice President and Chief Financial Officer, effective December 15, 2009. “We welcome Mr. Satenberg to our executive team here at 1st Century Bank,” said Alan I. Rothenberg, Chairman of the Board and Chief Executive Officer of 1st Century Bancshares. “Mr. Satenberg’s solid background in public accounting coupled with his banking experience will help us continue to build our franchise for many years to come.” Prior to joining 1st Century Bank, Mr. Satenberg was Managing Director and Deputy Chief Financial Officer of Imperial Capital Bancorp in Los Angeles, a $4 billion publicly held financial institution. He was responsible for financial and regulatory reporting, daily accounting and finance functions for the bank, including real estate investments and off-balance sheet securitization. Mr. Satenberg began his career with Arthur Andersen. In a 10 year period he rose to Senior Manager, Assurance Practice, focusing on financial markets industries with asset bases up to $15 billion, management of $800 million in investments and $1 billion in revenues. Other responsibilities included performing financial audits, SEC filings, and budgeting. Mr. Satenberg has a Bachelor of Business Administration, Accounting degree from the University of Texas at Austin. He is actively involved in his community, participates in a number of charities and resides in Sherman Oaks with his wife and two children. About 1st Century Bancshares, Inc. 1st Century Bancshares, Inc. is a publicly owned company traded on the Nasdaq Capital Market under the symbol “FCTY”. The Company’s wholly owned subsidiary, 1st Century Bank, N.A., is a full service commercial bank headquartered in the Century City area of Los Angeles. The Bank’s primary focus is relationship banking to family owned and closely held small and middle market businesses, professional service firms and high net worth individuals, real estate investors, medical professionals, and entrepreneurs. The Company maintains a website at www.1stcenturybank.com. By including the foregoing website address link, the Company does not intend to incorporate by reference any material contained therein. Safe Harbor Certain matters discussed in this press release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. You can find many (but not all) of these forward-looking statements by looking for words such as “approximates,” “believes,” “expects,” “anticipates,” “estimates,” “intends,” “plans,” “would,” “may” or other similar expressions in this press release. These statements are based upon our current expectations and speak only as of the date hereof. Forward-looking statements are subject to certain risks and uncertainties that could cause our actual results, performance or achievements to differ materially and adversely from those expressed, suggested or implied herein. Accordingly, investors should use caution in relying on forward-looking statements to anticipate future results or trends. These risks and uncertainties include, but are not limited to: (1) the impact of changes in interest rates, (2) a continuing decline in economic conditions, (3) increased competition among financial service providers, (4) government regulation; and (5) the other risks set forth in the Company’s reports filed with the U.S. Securities and Exchange Commission. The Company does not undertake, and specifically disclaims, any obligation to revise or update any forward-looking statements for any reason.
1st CENTURY BANCSHARES, INC. SENDS LETTER TO CLIENTS AND SHAREHOLDERS 1st Century Bancshares Chairman, Alan I. Rothenberg and President and CEO Jason P. DiNapoli sent the following letter to clients and shareholders:Dear Client/Shareholder, As the enclosed graph displays, 1st Century Bank continues to be one of the most well-capitalized banks in Southern California. 1st Century Bank Capital Breakdown:
The key measurement of a bank’s health is its CAPITAL, and now more than ever this is of paramount importance. We have positioned our bank to withstand this current economic cycle and stand confidently poised for growth in the years to come. We are both shareholders and clients of this bank and have full faith in our board and the talented team we have built to continue moving this bank forward into a successful future. As always, feel free to contact either of us if you have any questions at all. Or better yet, come in and pay us a visit. Sincerely,
Alan I. Rothenberg Jason P. DiNapoli Risk Based Capital Ratio 3rd Quarter 2009 Follows:
1ST CENTURY BANCSHARES, INC. REPORTS FINANCIAL RESULTS FOR THE THIRD QUARTER 2009 Los Angeles, – November 12, 2009 – 1st Century Bancshares, Inc. (the “Company”) (NASDAQ:FCTY), the holding company of 1st Century Bank, N.A. (the “Bank”), today reported financial results for the third quarter and the nine months ended September 30, 2009. “In these unique economic circumstances, we have primarily focused on remaining safe and sound,” said Alan I. Rothenberg, Chairman of the Board and Chief Executive Officer of 1st Century Bancshares. “With a strong total risk-based capital ratio of 21.3%, 1st Century Bank remains one of the most highly capitalized banks in Southern California. The Bank’s total risk based capital ratio is over twice the regulatory definition of “well-capitalized” (21.3% vs 10.0%). We continue to provide for loan loss provisions coupled with timely and appropriate charge-offs. With our strong capital position, proactive monitoring of our loan portfolio, and prudent increases in our loan loss reserve, we are situated to withstand these difficult economic times. With an increase in non-interest-bearing core deposits of 44.3%, we are well positioned to grow.” Rothenberg added, “Importantly, our capital base does not include any troubled asset relief program (“TARP”) funds, trust preferred securities, subordinated debt or any other ‘quasi-equity’ instruments. We have only common equity, and the size of our equity base allows us to take measures to stay ahead of this economic cycle. In addition to our provisions against potential loan losses in the third quarter, we also set up an allowance against our deferred tax asset, a sensible measure consistent with conservative accounting practice and in line with our view that our near-term prospects for realizing this asset are unlikely. Significantly, this did not have any material effect on our regulatory capital ratios since a significant portion of the deferred tax asset had previously been excluded by regulation in the calculation of the regulatory capital ratios.” 2009 Third Quarter Highlights • The Bank’s total risk-based capital ratio was 21.3% at September 30, 2009, which is above the regulatory standard of 10.0% for “well-capitalized” financial institutions. • Total deposits increased $34.4 million or 22.3% from $154.3 million at December 31, 2008 to $188.7 million at September 30, 2009. The increase in deposits resulted primarily from an increase in non-interest-bearing demand deposits and certificates of deposits. • Non-interest-bearing demand deposits increased $17.8 million or 44.3% from $40.3 million at December 31, 2008 to $58.1 million at September 30, 2009. The increase in non-interest-bearing demand deposits is related to the Company’s continued efforts in core deposit gathering, as well as expanding the Company’s client base through relationship banking. • Gross loans decreased $11.5 million or 5.7% to $188.5 million from $200.0 million at December 31, 2008 and decreased $7.4 million or 3.8% from September 30, 2008 due to payoffs and paydowns. • As of September 30, 2009, the allowance for loan losses was $5.6 million or 2.95% of gross loans compared to $5.2 million or 2.59% of gross loans at December 31, 2008. • Provision for loan losses was $1.7 million and $2.4 million for the three and nine months ended September 30, 2009, respectively, compared to $281,000 and $712,000 for the three and nine months ended September 30, 2008, respectively. • Net interest margin for the third quarter of 2009 decreased 56 basis points to 4.08% compared to 4.64% for the third quarter of 2008. Net interest margin for the nine months ended September 30, 2009 decreased 50 basis points to 4.24% compared to 4.74% for the nine months ended September 30, 2008. • The Company continued to manage expenses. Non-interest expense was down 6.2% and 2.5% for the three and nine months ended September 30, 2009, respectively, compared to the same periods in 2008. • The Company recorded a 100% valuation allowance against the deferred tax asset at September 30, 2009, resulting in a non-cash charge of $3.4 million recorded as income tax expense for the three and nine months ended September 30, 2009. This charge stemmed from management’s re-evaluation of the likelihood of producing near-term taxable income coupled with cumulative losses since inception that were exacerbated by the third quarter loss. This decision does not affect the Company’s cash flows or liquidity and did not have a significant effect on the Bank’s regulatory capital ratios because a significant portion of the deferred tax asset had previously been excluded by regulation in the calculation of the regulatory capital ratios. • Net loss was $4.6 million and $4.3 million for the three and nine months ended September 30, 2009, respectively, compared to net income of $151,000 and $416,000 for the three and nine months ended September 30, 2008, respectively. The decrease in the Company’s earnings for the three and nine months ended September 30, 2009 compared to the three and nine months ended September 30, 2008 was primarily the result of the income tax expense to establish the deferred tax asset valuation allowance of $3.4 million for both the three and nine months ended September 30, 2009, and the increases in the provision for loan losses of $1.4 million and $1.6 million for the three and nine months ended September 30, 2009, respectively. Capital Adequacy At September 30, 2009, the Company’s stockholders’ equity totaled $50.6 million compared to $57.0 million at December 31, 2008. The decrease was primarily related to a net loss of $4.3 million for the nine months ended September 30, 2009 and the repurchase under the Company’s stock repurchase program of 642,600 shares of common stock for a total cost to the Company of $2.6 million during the nine months ended September 30, 2009. The Bank’s total risk-based capital ratio, tier 1 capital ratio, and leverage ratio of 21.33%, 20.06%, and 17.43%, respectively, are all well above the regulatory standards for “well-capitalized” financial institutions of 10.00%, 6.00%, and 5.00%, respectively. Balance Sheet Total assets decreased 0.6% or $1.5 million to $257.9 million at September 30, 2009 compared to $259.4 million at December 31, 2008. The decrease in total assets was primarily due to decreases in accrued interest and other assets, investments, and loans, net of allowance for loan losses and deferred costs/unearned fees, partially offset by an increase in cash and cash equivalents. Accrued interest and other assets decreased 74.2% or $3.2 million to $1.1 million at September 30, 2009 compared to $4.3 million at December 31, 2008. The decrease in accrued interest and other assets was primarily the result of a 100% valuation allowance of $3.5 million against the deferred tax asset recorded at September 30, 2009. Investments decreased 14.9% or $7.6 million to $43.2 million at September 30, 2009 compared to $50.8 million at December 31, 2008. The decrease in investments was primarily due to sales of investments. Loans, net of allowance for loan losses and net deferred costs/unearned fees, decreased 6.0% or $11.7 million to $183.1 million at September 30, 2009 compared to $194.8 million at December 31, 2008. The decrease in loans was primarily due to loan payoffs and paydowns. Cash and cash equivalents increased $21.4 million to $25.6 million at September 30, 2009 compared to $4.2 million at December 31, 2008 due to increases in total deposits. At September 30, 2009, total deposits were $188.7 million compared to $154.3 million at December 31, 2008, representing an increase of 22.3% or $34.4 million. The increase in deposits resulted primarily from an increase in non-interest-bearing demand deposits and certificates of deposits. “We are pleased to see the substantial growth in our core deposits,” said Jason P. DiNapoli, President and Chief Operating Officer of 1st Century Bancshares, Inc. “Our growth is a testament to the efforts made by our experienced team at 1st Century Bank. With our continued focus on relationship deposit growth, credit quality and superior customer service, we continue to successfully grow our franchise. The dislocation caused by problems experienced by some of our competitors has given us the opportunity to attract new customers. We anticipate more of such growth due to these unusual economic times.” Credit Quality Allowance and Provision for Loan Losses The allowance for loan losses totaled $5.6 million, or 2.95% of gross loans at September 30, 2009, compared to $5.2 million, or 2.59% of gross loans at December 31, 2008. The provision for loan losses was $1.7 million and $2.4 million for the three and nine months ended September 30, 2009 compared to $281,000 and $712,000 for the same periods a year ago. Net charge-offs were $874,000, or 1.79% of average gross loans for the three months ended September 30, 2009 compared to zero for the three months ended September 30, 2008. Net charge-offs were $2.0 million, or 1.02% of average gross loans for the nine months ended September 30, 2009 compared to $160,000, or 0.09% for the nine months ended September 30, 2008. Non-performing Assets Non-accrual loans totaled $12.6 million and $5.7 million at September 30, 2009 and December 31, 2008, respectively. The Company placed seven additional loans on non-accrual status in the three months ended September 30, 2009; five secured commercial loans totaling $1.7 million, a $243,000 secured real estate-commercial mortgage loan, as well as a $1.5 million commercial loan secured by a junior lien on the borrower’s occupied residence. As of December 31, 2008, $162,000 was recorded as other real estate owned (“OREO”) and included in accrued interest and other assets on the Company’s Unaudited Condensed Consolidated Balance Sheets. During the three months ended September 30, 2009, the Company sold this OREO and recorded a gain of $56,000. As of September 30, 2009, the Company does not have any OREO. “The Bank continues to work through a period of deteriorating credit, and we are taking aggressive steps to identify and accurately address any loan with a loss potential,” said Jason P. DiNapoli, President and Chief Operating Officer of 1st Century Bancshares, Inc. “With our capital base and current level of allowance for loan losses, we are well positioned to not only sustain a longer than anticipated downturn but also to benefit from an economic recovery. We will continue to invest in our business and cautiously grow our franchise as opportunities arise.” Net Interest Income and Margin For the three and nine months ended September 30, 2009, average interest-earning assets were $246.0 million and $250.4 million, respectively, generating net interest income of $2.5 million and $7.9 million, respectively. For the three and nine months ended September 30, 2008, average interest-earning assets were $241.3 million and $237.8 million, respectively, generating net interest income of $2.8 million and $8.4 million, respectively. The growth in earning assets was primarily due to growth in loans. The Company’s net interest margin for the three months ended September 30, 2009 was 4.08% compared to 4.64% for the three months ended September 30, 2008. The 56 basis point decrease in net interest margin from the third quarter 2008 to 2009 was primarily due to a decrease in yield on earning assets of 1.13%, partially offset by a decrease of 0.93% in rate paid for interest-bearing deposits and borrowings and an increase of $14.3 million of average demand deposits. The decrease in yield on earning assets was primarily the result of a 1.16% decrease in loan yield which was principally the result of the prime rate decreasing 1.75% from September 30, 2008 to September 30, 2009. Interest foregone on non-accrual loans totaled $172,000, resulting in a 0.28% reduction in the net interest margin for the three months ended September 30, 2009. There were no non-accrual loans during the three months ended September 30, 2008. The Company’s net interest margin for the nine months ended September 20, 2009 was 4.24% compared to 4.74% for the nine months ended September 30, 2008. The net interest margin decreased 50 basis points comparing the nine months ended September 30, 2009 to the nine months ended September 30, 2008. The decrease in net interest margin was primarily due to a decrease in yield on earning assets of 1.21%, partially offset by a decrease of 1.18% in rate paid for interest-bearing deposits and borrowings and an increase of $9.2 million of average demand deposits. The decrease in yield on earning assets was primarily the result of a 1.48% decrease in loan yield which was principally the result of the prime rate decreasing 1.75% from September 30, 2008 to September 30, 2009. Interest foregone on non-accrual loans totaled $406,000, resulting in a 0.22% reduction in the net interest margin for the nine months ended September 30, 2009. There were no non-accrual loans during the nine months ended September 30, 2008. Non-Interest Income
The increase in non-interest income of $144,000 was primarily due to an increase in loan arrangement fees from $114,000 for the three months ended September 30, 2008 to $219,000 for the three months ended September 30, 2009 and an increase in service charges and other operating income from $16,000 for the three months ended September 30, 2008 to $40,000 for the three months ended September 30, 2009. Additionally, during the three months ended September 30, 2009, the Company sold other real estate owned and recorded a gain of $56,000. During the three months ended September 30, 2008, the Company sold other real estate owned for $370,000, resulting in a gain of $27,000. For the nine months ended September 30, 2009, non-interest income was $776,000 compared to $329,000 for the same period a year ago.
Non-Interest Expense Non-interest expense was $2.3 million for the three months ended September 30, 2009 compared to $2.5 million for the three months ended September 30, 2008, representing a decrease of $153,000, or 6.2%. Non-interest expense was $7.2 million for the nine months ended September 30, 2009 compared to $7.4 million for the nine months ended September 30, 2008, representing a decrease of $181,000, or 2.5%. Compensation and benefits decreased $364,000 or 23.6%, to $1.2 million for the three months ended September 30, 2009 from $1.5 million for the three months ended September 30, 2008. The decrease was primarily due to an increase in deferred loan origination costs of $109,000, and decreases in non-cash stock compensation expense, incentive compensation accrual, and health and dental insurance expenses of $96,000, $63,000, and $46,000, respectively. Compensation and benefits decreased $640,000 or 14.4%, to $3.8 million for the nine months ended September 30, 2009 from $4.4 million for the nine months ended September 30, 2008. The decrease was primarily due to an increase in deferred origination costs of $151,000 and decreases in incentive compensation accrual and non-cash stock compensation expense of $299,000 and $215,000, respectively. FDIC assessments increased $58,000 to $83,000 for the three months ended September 30, 2009 compared to $25,000 for the three months ended September 30, 2008. The increase was primarily due to an increase in the assessment rate. FDIC assessments increased $203,000 to $282,000 for the nine months ended September 30, 2009 compared to $79,000 for the nine months ended September 30, 2008. The increase was primarily due to an increase in the assessment rate, as well as a $99,000 special assessment related to the final ruling adopted by the FDIC on May 22, 2009 which provides for a special assessment on each insured depository institution as of June 30, 2009. Other operating expense decreased $1,000 to $395,000 for the three months ended September 30, 2009 compared to $396,000 for the three months ended September 30, 2008. Other operating expense increased $124,000 to $1.3 million for the nine months ended September 30, 2009 compared to $1.2 million for the nine months ended September 30, 2008. Other operating expense increased primarily due to increases of $257,000 of student loan servicing costs related to a new student loan program started in the third quarter of 2008 and $102,000 in Delaware franchise tax, partially offset by a decrease of $209,000 in stockholders’ relation expense. The higher stockholders’ relation expense in the nine months ended September 30, 2008 was primarily related to the Company’s proxy solicitation for its contested election of directors at the 2008 annual meeting of stockholders. Income Taxes The Company had previously established a deferred tax asset of $3.4 million, the majority of which was represented by future tax benefits realizable from the loan loss provision and the cumulative net operating losses for tax purposes. At September 30, 2009, management conducted a quarterly assessment of the realizability of the deferred tax asset by considering both positive and negative evidence related to the Company’s ability to generate sufficient taxable income in the near-term. At September 30, 2009, management determined that a 100% valuation allowance against the deferred tax asset was needed. As a result, a valuation allowance of $3.4 million was recorded as income tax expense. This non-cash charge increased the net loss by $3.4 million for the three and nine months ended September 30, 2009. This decision reflects management’s current assessment that it is more likely than not that this asset will not be realized. This assessment is largely based on the evidence of cumulative losses in the current year-to-date and prior two fiscal years. This non-cash charge did not affect the Company’s cash flows or liquidity and did not have a significant effect on the Bank’s regulatory capital ratios. The Company’s loss before income taxes for the three and nine months ended September 30, 2009 was $1.2 million and $813,000, respectively. The table below illustrates the effect on the Bank’s regulatory capital ratios as a result of the valuation allowance.
Net (Loss) Income For the three and nine months ended September 30, 2009, the Company recorded net loss of $4.6 million or $0.50 per diluted share and net loss of $4.3 million or $0.47 per diluted share, respectively. For the three and nine months ended September 30, 2008, net income was $151,000 or $0.01 per diluted share and $416,000 or $0.04 per diluted share, respectively. The decrease in the Company’s earnings for the three months ended September 30, 2009 compared to September 30, 2008 was primarily the result of establishing a 100% valuation allowance of $3.4 million against the deferred tax asset recorded at September 30, 2009 and an increase in the provision for loan losses of $1.4 million from $281,000 to $1.7 million. The decrease in the Company’s earnings for the nine months ended September 30, 2009 compared to September 30, 2008 was primarily the result of establishing a 100% valuation allowance of $3.4 million against the deferred tax asset recorded at September 30, 2009 and an increase in the provision for loan losses of $1.6 million from $712,000 to $2.4 million. About 1st Century Bancshares, Inc. 1st Century Bancshares, Inc. is a publicly owned company traded on the Nasdaq Capital Market under the symbol “FCTY”. The Company’s wholly owned subsidiary, 1st Century Bank, N.A., is a full service commercial bank headquartered in the Century City area of Los Angeles. The Bank’s primary focus is relationship banking to family owned and closely held small and middle market businesses, professional service firms and high net worth individuals, real estate investors, medical professionals, and entrepreneurs. The Company maintains a website at www.1stcenturybank.com. By including the foregoing website address link, the Company does not intend to incorporate by reference any material contained therein. Safe Harbor Certain matters discussed in this press release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. You can find many (but not all) of these forward-looking statements by looking for words such as “approximates,” “believes,” “expects,” “anticipates,” “estimates,” “intends,” “plans,” “would,” “may” or other similar expressions in this press release. These statements are based upon our current expectations and speak only as of the date hereof. Forward-looking statements are subject to certain risks and uncertainties that could cause our actual results, performance or achievements to differ materially and adversely from those expressed, suggested or implied herein. Accordingly, investors should use caution in relying on forward-looking statements to anticipate future results or trends. These risks and uncertainties include, but are not limited to: (1) the impact of changes in interest rates, (2) a continuing decline in economic conditions, (3) increased competition among financial service providers, (4) government regulation; and (5) the other risks set forth in the Company’s reports filed with the U.S. Securities and Exchange Commission. The Company does not undertake, and specifically disclaims, any obligation to revise or update any forward-looking statements for any reason. # # # (Tables follow) Summary Financial Information The following tables present relevant financial data from 1st Century Bancshares’ recent performance:
1ST CENTURY BANCSHARES, INC. REPORTS FINANCIAL RESULTS FOR THE SECOND QUARTER 2009 Los Angeles, – August 12, 2009 – 1st Century Bancshares, Inc. (the “Company”) (NASDAQ:FCTY), the holding company of 1st Century Bank, N.A. (the “Bank”), today reported financial results for the second quarter and six months ended June 30, 2009. “During one of the most challenging financial environments that we’ve seen, 1st Century Bank remains one of the most well-capitalized banks in Southern California,” said Alan I. Rothenberg, Chairman of the Board and Chief Executive Officer of 1st Century Bancshares. “The Bank’s total risk based capital ratio is over twice the regulatory definition of “well-capitalized” (21.9% vs 10.0%) and our credit underwriting and management remains disciplined and prudent. All of this combined with our loan loss reserve allows us to provide stability and security to our clients and stockholders.” 2009 Second Quarter Highlights • The Bank’s total risk-based capital ratio was 21.9% at June 30, 2009, which is above the regulatory standard of 10.0% for “well-capitalized” financial institutions. • Non-interest bearing demand deposits increased to $54.2 million, an increase of 34.6% from December 31, 2008. The increase of $14.0 million in non-interest-bearing demand deposits is related to the Company’s continued efforts in core deposit gathering, as well as expanding the Company’s client base through relationship banking. • As of June 30, 2009, total assets were $245.3 million, a decrease of 5.4% from December 31, 2008 and 2.7% from June 30, 2008. • Gross loans decreased $5.5 million or 2.8% to $194.5 million from $200.0 million at December 31, 2008 and increased $1.6 million or 0.8% from June 30, 2008. • As of June 30, 2009, the allowance for loan losses was $4.7 million or 2.43% of gross loans compared to $5.2 million or 2.59% of gross loans at December 31, 2008. • Provision for loan losses was $374,000 and $647,000 for the three and six months ended June 30, 2009, respectively, compared to $266,000 and $431,000 for the three and six months ended June 30, 2008, respectively. • Net interest margin for the second quarter of 2009 decreased 66 basis points to 4.26% compared to 4.92% in the second quarter of 2008. Net Interest Margin for the six months ended June 30, 2009 decreased 46 basis points to 4.33% compared to 4.79% for the six months ended June 30, 2008. • Net income was $118,000 and $248,000 for the three and six months ended June 30, 2009, respectively, compared to net income of $59,000 and $265,000 for the three and six months ended June 30, 2008, respectively. Capital Adequacy At June 30, 2009, the Company’s stockholders’ equity totaled $55.4 million compared to $57.0 million at December 31, 2008. The decrease was primarily related to the repurchase of 510,700 shares of common stock totaling $2.0 million under the Company’s stock repurchase program during the six months ended June 30, 2009. The Bank’s total risk-based capital ratio, tier 1 capital ratio, and leverage ratio of 21.87%, 20.61%, and 18.48%, respectively, are all well above the regulatory standards for “well-capitalized” financial institutions of 10.00%, 6.00%, and 5.00%, respectively. Balance Sheet Total assets decreased 5.4% or $14.1 million to $245.3 million at June 30, 2009 compared to $259.4 million at December 31, 2008. The decrease in assets was primarily due to a $9.7 million decrease in investments, a $5.0 million decrease in loans, net of allowance for loan losses and net deferred costs/unearned fees, and a $1.7 million decrease in interest-earning deposits, partially offset by a $2.8 million increase in cash and due from banks. Investments decreased $9.7 million to $41.2 million at June 30, 2009 compared to $50.8 million at December 31, 2008 primarily due to principal paydowns and the sale of $3.4 million in Available for Sale securities. Loans, net of allowance for loan losses and net deferred costs/unearned fees, decreased 2.6% or $5.0 million to $189.8 million at June 30, 2009 compared to $194.8 million at December 31, 2008 primarily due to loan payoffs and paydowns. Interest-earning deposits at other financial institutions decreased $1.7 million to $14,000 at June 30, 2009 compared to $1.8 million at December 31, 2008 due to fluctuations in normal business operations. Cash and due from banks increased $2.8 million to $5.2 million at June 30, 2009 compared to $2.4 million at December 31, 2008 due to fluctuations in normal business operations. At June 30, 2009, total deposits were $172.1 million compared to $154.3 million at December 31, 2008, representing an increase of 11.5% or $17.8 million. The majority of the increase in deposits resulted from an increase in non-interest-bearing demand deposits of $14.0 million due to the Company’s continued efforts in core deposit gathering, as well as expanding the Company’s client base through relationship banking. “We are pleased to see the substantial growth in our core deposits,” said Jason P. DiNapoli, President and Chief Operating Officer of 1st Century Bancshares, Inc. “Our growth is a testament to the efforts made by our experienced team at 1st Century Bank. With our continued focus on relationship deposit growth, credit quality and superior customer service, we continue to successfully grow our franchise.” Credit Quality Allowance and Provision for Loan Losses The allowance for loan losses totaled $4.7 million, or 2.43% of gross loans at June 30, 2009, compared to $5.2 million, or 2.59% of gross loans at December 31, 2008. The provision for loan losses was $374,000 and $647,000 for the three and six months ended June 30, 2009 compared to $266,000 and $431,000 for the same periods a year ago. Management follows diligent and thorough credit administration and risk management practices such as analyzing classified credits, pools of loans, economic factors, trends in the loan portfolio, and changes in policies, procedures, and underwriting criteria. Management believes that the allowance for loan losses at June 30, 2009 is adequate to absorb known and inherent losses in the loan portfolio and the methodology utilized in deriving that level is appropriate. Non-accrual Loans and Non-performing Assets Non-accrual loans totaled $9.6 million and $5.7 million at June 30, 2009 and December 31, 2008, respectively. There were no accruing loans past due 90 days or more at June 30, 2009 or December 31, 2008. Other real estate owned (“OREO”) totaled $162,000 at June 30, 2009 and December 31, 2008, respectively. At June 30, 2009, the non-accrual loans included a $3.4 million real estate-commercial mortgage loan to a Southern California auto dealer which ceased operations in the fourth quarter of 2008 and a $607,000 purchased real estate-residential mortgage loan. These two credit relationships were previously reported as non-accrual loans at December 31, 2008. During the three months ended March 31, 2009 the Company charged-off $251,000 of a $750,000 secured consumer loan which was placed on non-accrual status in the fourth quarter of 2008. The remaining balance of $499,000 remains on non-accrual status at June 30, 2009. The Company previously reported a $100,000 commercial loan as non-accrual at March 31, 2009. At June 30, 2009, this credit relationship has been paid down and has a balance of $59,000 and remains on non-accrual status. Furthermore, the Company placed a $5.0 million interest-only real estate-commercial mortgage loan on non-accrual status in the three months ended June 30, 2009. Payment on this loan is current and the borrower is not in default of any terms of the loan. The Company expects the borrower to continue to make interest payments on this loan through maturity in December 2009. However, the loan was placed on non-accrual due to the adverse market conditions for commercial real estate in Southern California. Management continues to actively monitor the borrower’s financial condition to assess the collectability of this loan at maturity. Net Interest Income and Margin For the three and six months ended June 30, 2009, average interest-earning assets were $250.6 million and $252.6 million, respectively, generating net interest income of $2.7 million and $5.4 million, respectively. For the three and six months ended June 30, 2008, average interest-earning assets were $236.7 million and $236.1 million, respectively, generating net interest income of $2.9 million and $5.6 million, respectively. The growth in earning assets was primarily in loans funded by an increase in borrowings. The Company’s net interest margin for the quarter ended June 30, 2009 was 4.26% compared to 4.92% for the quarter ended June 30, 2008. The 66 basis point decrease in net interest margin from the second quarter 2008 to 2009 was primarily due to a decrease in yield on earning assets of 1.21%, partially offset by a decrease of 0.88% in rate paid for interest-bearing deposits and borrowings and an increase of $12.1 million of average demand deposits. The decrease in yield on earning assets was primarily the result of a 1.52% decrease in loan yield which was principally the result of the prime rate decreasing 1.75% from June 30, 2008 to June 30, 2009. Interest foregone on non-accrual loans totaled $121,000, resulting in a 0.19% reduction in the net interest margin for the three months ended June 30, 2009. There were no non-accrual loans during the three months ended June 30, 2008. The Company’s net interest margin for the six months ended June 20, 2009 was 4.33% compared to 4.79% for the six months ended June 30, 2008. The net interest margin decreased 46 basis points comparing the six months ended June 30, 2009 to the six months ended June 30, 2008. The decrease in net interest margin was primarily due to a decrease in yield on earning assets of 1.25%, partially offset by a decrease of 1.30% in rate paid for interest-bearing deposits and borrowings and an increase of $6.6 million of average demand deposits. The decrease in yield on earning assets was primarily the result of a 1.66% decrease in loan yield which was principally the result of the prime rate decreasing 1.75% from June 30, 2008 to June 30, 2009. Interest foregone on non-accrual loans totaled $234,000, resulting in a 0.19% reduction in the net interest margin for the six months ended June 30, 2009. There were no non-accrual loans during the six months ended June 30, 2008. Non-Interest Income Non-interest income was $258,000 for the quarter ended June 30, 2009 compared to $56,000 for the quarter ended June 30, 2008. The increase in non-interest income of $202,000 was primarily due to an increase in loan arrangement fees from none for the three months ended June 30, 2008 to $153,000 for the three months ended June 30, 2009 and an increase in service charges and other operating income from $35,000 for the three months ended June 30, 2008 to $90,000 for the three months ended June 30, 2009. For the six months ended June 30, 2009, non-interest income was $475,000 compared to $171,000 for the same period a year ago. The increase in non-interest income of $304,000 was primarily due to an increase in loan arrangement fees from $68,000 for the six months ended June 30, 2008 to $287,000 for the six months ended June 30, 2009 and an increase in service charges and other operating income from $82,000 for the six months ended June 30, 2008 to $173,000 for the six months ended June 30, 2009. Loan arrangement fees are related to the college loan funding programs the Company established with two student loan providers, one of which was a new loan program started in the third quarter of 2008. The Company initially funds student loans originated by the student loan providers in exchange for non-interest income. All loans are purchased by the student loan providers within 30 days of origination. All purchase commitments are supported by collateralized deposit accounts. Non-Interest Expense Non-interest expense was $2.4 million for the three months ended June 30, 2009 compared to $2.6 million for the three months ended June 30, 2008, representing a decrease of $189,000, or 7.4%. Non-interest expense was $4.9 million for the six months ended June 30, 2009 and 2008, respectively. Compensation and benefits decreased $86,000 or 6.4%, to $1.3 million for the three months ended June 30, 2009 from $1.4 million for the three months ended June 30, 2008. The decrease was primarily due to a decrease in incentive compensation accrual of $82,000. Compensation and benefits decreased $276,000 or 9.6%, to $2.6 million for the six months ended June 30, 2009 from $2.9 million for the six months ended June 30, 2008. The decrease was primarily due to a decrease in incentive compensation accrual of $237,000. FDIC assessments increased $114,000 to $139,000 for the three months ended June 30, 2009 compared to $25,000 for the three months ended June 30, 2008. The increase was primarily due to a $99,000 special assessment related to the final ruling adopted by the FDIC on May 22, 2009 which provides for a special assessment on each insured depository institution as of June 30, 2009. FDIC assessments increased $145,000 to $199,000 for the six months ended June 30, 2009 compared to $54,000 for the six months ended June 30, 2008. The increase was primarily due to the previously aforementioned $99,000 special assessment. Other operating expense decreased $47,000 to $421,000 for the three months ended June 30, 2009 compared to $468,000 for the three months ended June 30, 2008. Other operating expense decreased primarily due to a decrease of $141,000 in shareholder relations expense, partially offset by an increase of $51,000 in student loan servicing costs related to a new student loan program started in the third quarter of 2008 and an increase of $28,000 in Delaware franchise tax. Other operating expense increased $124,000 to $880,000 for the six months ended June 30, 2009 compared to $756,000 for the six months ended June 30, 2008. Other operating expense increased primarily due to increases of $164,000 of student loan servicing costs related to a new student loan program started in the third quarter of 2008. Net Income For the three and six months ended June 30, 2009, the Company recorded net income of $118,000 or $0.01 per diluted share and $248,000 or $0.03 per diluted share, respectively. For the three and six months ended June 30, 2008, net income was $59,000 or $0.01 per diluted share and $265,000 or $0.03 per diluted share, respectively. The increase in the Company’s net income for the three months ended June 30, 2009 compared to June 30, 2008 was primarily the result of a $202,000 increase in non-interest income, partially offset by the increase in provision for loan losses of $108,000 from $266,000 to $374,000. The decrease in the Company’s net income for the six months ended June 30, 2009 compared to June 30, 2008 was primarily the result of the increase in provision for loan losses of $216,000 from $431,000 to $647,000. About 1st Century Bancshares, Inc. 1st Century Bancshares, Inc. is a publicly owned company traded on the Nasdaq Capital Market under the symbol “FCTY”. The Company’s wholly owned subsidiary, 1st Century Bank, N.A., is a full service commercial bank headquartered in the Century City area of Los Angeles. The Bank’s primary focus is relationship banking to family owned and closely held small and middle market businesses, professional service firms and high net worth individuals, real estate investors, medical professionals, and entrepreneurs. The Company maintains a website at www.1stcenturybank.com. By including the foregoing website address link, the Company does not intend to incorporate by reference any material contained therein. Safe Harbor Certain matters discussed in this press release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. You can find many (but not all) of these forward-looking statements by looking for words such as “approximates,” “believes,” “expects,” “anticipates,” “estimates,” “intends,” “plans,” “would,” “may” or other similar expressions in this press release. These statements are based upon our current expectations and speak only as of the date hereof. Forward-looking statements are subject to certain risks and uncertainties that could cause our actual results, performance or achievements to differ materially and adversely from those expressed, suggested or implied herein. Accordingly, investors should use caution in relying on forward-looking statements to anticipate future results or trends. These risks and uncertainties include, but are not limited to: (1) the impact of changes in interest rates, (2) a continuing decline in economic conditions, (3) increased competition among financial service providers, (4) government regulation; and (5) the other risks set forth in the Company’s reports filed with the U.S. Securities and Exchange Commission. The Company does not undertake, and specifically disclaims, any obligation to revise or update any forward-looking statements for any reason. # # # (Tables follow) Summary Financial Information The following tables present relevant financial data from 1st Century Bancshares’ recent performance:
1ST CENTURY BANCSHARES, INC. REPORTS FINANCIAL RESULTS FOR THE FIRST QUARTER 2009 Los Angeles, – May 14, 2009 – 1st Century Bancshares, Inc. (the “Company”) (NASDAQ:FCTY), the holding company of 1st Century Bank, N.A. (the “Bank”), today reported financial results for the first quarter 2009. “We are pleased with our continued strong capital position, prudent credit management and solid growth in our core deposits,” said Alan I. Rothenberg, Chairman of the Board and Chief Executive Officer of 1st Century Bancshares. “Our highest priority continues to be assuring the safety, soundness and security of our depositors, all of which redound to the benefit of our shareholders.” 2009 First Quarter Highlights • The Bank’s total risk-based capital ratio was 21.39% at March 31, 2009, which is above the regulatory standard of 10.00% for “well-capitalized” financial institutions. • As of March 31, 2009, total assets were $259.7 million, an increase of 0.14% from December 31, 2008 and 0.42% from March 31, 2008. • Gross loans increased to $200.7 million, an increase of $683,000 or 0.34% from December 31, 2008 and $23.6 million or 13.33% from March 31, 2008. • As of March 31, 2009, allowance for loan losses was $4.3 million or 2.14% of gross loans compared to $5.2 million or 2.59% of gross loans at December 31, 2008. • Provision for loan losses was $273,000 for the three months ended March 31, 2009 compared to $165,000 for the three months ended March 31, 2008. • Non-interest bearing demand deposits increased to $48.6 million, an increase of 20.72% from December 31, 2008. The increase of $8.3 million in non-interest-bearing demand deposits related to the Company’s continued efforts in core deposit gathering, as well as expanding our client base through relationship banking. • Net interest margin for the three months ended March 31, 2009 decreased 26 basis points to 4.39% compared to 4.65% for the three months ended March 31, 2008 while the national prime rate decreased 200 basis points from March 31, 2008 to March 31, 2009. • Net income was $130,000 for the three months ended March 31, 2009 compared to net income of $206,000 for the same period a year ago. “As we move forward through this economic cycle, we will continue to focus on growing our core deposit base, maintaining a balanced loan portfolio, and managing net interest margin,” said Jason P. DiNapoli, President and Chief Operating Officer of 1st Century Bancshares, Inc. “With our strong capital base and the dislocation of many of our competitors, we are optimistic about the opportunities to expand our customer base.” Capital Adequacy At March 31, 2009, the Company’s stockholders’ equity totaled $55.5 million compared to $57.0 million at December 31, 2008. The decrease was primarily related to the repurchase of 510,700 shares of common stock totaling $2.0 million under the Company’s stock repurchase program during the three months ended March 31, 2009. The Bank’s total risk-based capital ratio, tier 1 capital ratio, and leverage ratio of 21.39%, 20.14%, and 18.25%, respectively, are all well above the regulatory standards for “well-capitalized” financial institutions of 10.00%, 6.00%, and 5.00%, respectively. Credit Quality Allowance for Loan Losses The allowance for loan losses totaled $4.3 million, or 2.14% of gross loans at March 31, 2009, compared to $5.2 million, or 2.59% of gross loans at December 31, 2008. The provision for loan losses was $273,000 for the three months ended March 31, 2009 compared to $165,000 for the same period a year ago. Non-accrual Loans and Non-performing Assets Non-accrual loans totaled $4.6 million and $5.7 million at March 31, 2009 and December 31, 2008, respectively. There were no accruing loans past due 90 days or more at March 31, 2009 or December 31, 2008. Other real estate owned (“OREO”) totaled $162,000 at March 31, 2009 and December 31, 2008, respectively. At March 31, 2009, the non-accrual loans consisted of a $3.4 million commercial mortgage loan to a Southern California auto dealer which ceased operations in the fourth quarter of 2008 and a $607,000 purchased residential real estate mortgage loan. These two credit relationships were previously reported as non-accrual loans at December 31, 2008. During the first quarter of 2009 the Company charged-off $251,000 of a $750,000 secured consumer loan which was placed on non-accrual status in the fourth quarter of 2008. The remaining balance of $499,000 remains on non-accrual status at March 31, 2009. Furthermore, the Company placed a $100,000 commercial loan on non-accrual status in the three months ended March 31, 2009. Charge-offs For the three months ended March 31, 2009, charge-offs, totaling $1.2 million, were concentrated in three loans to two borrowers. The Company charged-off a $650,000 unsecured consumer loan which was placed on non-accrual status in the fourth quarter of 2008 when the loan became 90 days past due. The Company also charged-off a $250,000 secured consumer loan which was placed on non-accrual status in the fourth quarter of 2008 due to the further deterioration in the financial condition of the borrower. Furthermore, as aforementioned, the Company charged-off $251,000 of a $750,000 secured consumer loan to the same borrower which was placed on non-accrual status in the fourth quarter of 2008 due to the further deterioration in the financial condition of the borrower. The Company is pursuing means of collection for all charged-off loans. For the three months ended March 31, 2008, the Company charged-off $149,000 of a purchased real estate mortgage loan. Management follows diligent and thorough credit administration and risk management practices such as analyzing classified credits, pools of loans, economic factors, trends in the loan portfolio, and changes in policies, procedures, and underwriting criteria. Management believes that the allowance for loan losses at March 31, 2009 is adequate to absorb known and inherent losses in the loan portfolio and the methodology utilized in deriving that level is appropriate. Net Interest Income and Margin For the three months ended March 31, 2009, net interest income increased $31,000 or 1.14% to $2.8 million from the same period in 2008. The increase in net interest income was primarily attributed to an 8.11% expansion of average earning assets to $254.7 million for the three months ended March 31, 2009, partially offset by a lower net interest margin. The Company’s net interest margin for the three months ended March 31, 2009 was 4.39% compared to 4.65% for the three months ended March 31, 2008. The 26 basis point decrease in net interest margin for the three months ended March 31, 2009 compared to the three months ended March 31, 2008 was primarily due to a 128 basis point reduction in yield on average earning assets, partially offset by a 176 basis point reduction of interest paid on interest bearing liabilities and borrowings. Interest foregone on non-accrual loans totaled $113,000, resulting in an 0.18% reduction in the net interest margin for the three months ended March 31, 2009. There were no non-accrual loans during the three months ended March 31, 2008. Non-Interest Income Non-interest income was $217,000 for the three months ended March 31, 2009 compared to $116,000 for the three months ended March 31, 2008. The increase in non-interest income of 87.1% or $101,000 was primarily due to an increase in loan arrangement fees from $68,000 for the three months ended March 31, 2008 to $134,000 for the three months ended March 31, 2009 and an increase in service charges and other operating income from $48,000 for the three months ended March 31, 2008 to $83,000 for the three months ended March 31, 2009.
Non-Interest Expense Non-interest expense was $2.5 million for the three months ended March 31, 2009 compared to $2.3 million for the three months ended March 31, 2008, representing an increase of $160,000, or 6.9%. Compensation and benefits decreased $191,000, or 12.4%, to $1.3 million for the three months ended March 31, 2009 from $1.5 million for the three months ended March 31, 2008. The decrease was primarily due to a decrease in incentive compensation accrual of $155,000 and a decrease of $53,000 in non-cash stock compensation expense for employees. Occupancy expenses were $253,000 and $213,000 for the three months ended March 31, 2009 and 2008, respectively. The increase of $40,000 primarily related to an increase of $15,000 in depreciation expense for furniture, fixtures and equipment and an increase of $22,000 in software amortization cost. Professional fees increased $56,000 to $193,000 for the three months ended March 31, 2009 compared to $137,000 for the three months ended March 31, 2008. The increase was primarily due to increases in legal fees, internal audit, SOX and compliance related expenses, offset by lower external audit expenses. Technology expense increased $48,000, related to an increase in data processing expense of $72,000, offset by $24,000 of lower online banking and website expense, system upgrade expense, and ATM expenses. Other operating expense increased $201,000 to $519,000 for the three months ended March 31, 2009 compared to $318,000 for the three months ended March 31, 2008. Other operating expense increased in general primarily due to $111,000 of student loan servicing costs related to a new student loan program started in the third quarter of 2008, $58,000 of Delaware franchise tax, and $31,000 of FDIC assessment fee. Income before Income Taxes and Net Income Income before income taxes was $214,000 for the three months ended March 31, 2009, compared to income before income taxes of $350,000 for the three months ended March 31, 2008. The decrease in income before income taxes for the three months ended March 31, 2009 compared to the three months ended March 31, 2008 was primarily due to higher provision for loan losses and higher non-interest expenses, partially offset by higher net interest income. For the three months ended March 31, 2009, net income was $130,000, or $0.01 per diluted share, compared to net income of $206,000, or $0.02 per diluted share, for the three months ended March 31, 2008. Balance Sheet Total assets increased 0.14% or $376,000 to $259.7 million at March 31, 2009, from $259.4 million at December 31, 2008. The growth in assets was primarily due to a $3.0 million increase in cash and due from banks and a $1.6 million increase in net loans, offset by a $1.7 million decrease in interest-earning deposits and a $2.4 million decrease in investments. Investments decreased $2.4 million to $48.4 million at March 31, 2009 compared to $50.8 million at December 31, 2008 primarily due to maturities and paydowns. Loans, net of allowance for loan losses and net deferred costs/unearned fees, increased 0.84% or $1.6 million to $196.4 million at March 31, 2009 compared to $194.8 million at December 31, 2008. Loan growth was funded primarily by an increase in deposits. Total deposits increased 5.77% or $8.9 million to $163.2 million at March 31, 2009, from $154.3 million at December 31, 2008. Non-interest-bearing demand deposits represented $8.3 million of the increase. About 1st Century Bancshares, Inc. 1st Century Bancshares, Inc. is a publicly owned company traded on the Nasdaq Capital Market under the symbol “FCTY”. The Company’s wholly owned subsidiary, 1st Century Bank, N.A., is a full service commercial bank headquartered in the Century City area of Los Angeles. The Bank’s primary focus is relationship banking to family owned and closely held small and middle market businesses, professional service firms and high net worth individuals, real estate investors, medical professionals, and entrepreneurs. The Company maintains a website at www.1stcenturybank.com. By including the foregoing website address link, the Company does not intend to incorporate by reference any material contained therein. Safe Harbor Certain matters discussed in this press release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. You can find many (but not all) of these forward-looking statements by looking for words such as “approximates,” “believes,” “expects,” “anticipates,” “estimates,” “intends,” “plans,” “would,” “may” or other similar expressions in this press release. These statements are based upon our current expectations and speak only as of the date hereof. Forward-looking statements are subject to certain risks and uncertainties that could cause our actual results, performance or achievements to differ materially and adversely from those expressed, suggested or implied herein. Accordingly, investors should use caution in relying on forward-looking statements to anticipate future results or trends. These risks and uncertainties include, but are not limited to: (1) the impact of changes in interest rates, (2) a continuing decline in economic conditions, (3) increased competition among financial service providers, (4) government regulation; and (5) the other risks set forth in the Company’s reports filed with the U.S. Securities and Exchange Commission. The Company does not undertake, and specifically disclaims, any obligation to revise or update any forward-looking statements for any reason. # # # (Tables follow)
1st CENTURY BANCSHARES ANNOUNCES CREDIT QUALITY INFORMATION FOR 2008 FOURTH QUARTER; TOTAL RISK BASED CAPITAL REMAINS ABOVE 22% Los Angeles – February 3, 2009 – 1st Century Bancshares, Inc. (NASDAQ:FCTY) (the “Company”), the holding company of 1st Century Bank, N.A. (the “Bank”), expects to report its results of operations and financial condition for the fourth quarter of 2008 and full year ended December 31, 2008 during the week of March 9, 2009. At this time, management estimates that there will be a 2008 fourth quarter provision for loan losses of approximately $3.6 million compared to $281,000 in the third quarter of 2008. Total non-performing assets are estimated to be approximately $5.9 million at December 31, 2008, or approximately 2.26% of total assets at year end 2008, which includes $5.7 million of non-accrual loans and $162,000 of other real estate owned. Total non-performing assets at September 30, 2008 were $235,000 in other real estate owned. After giving effect to the provision for loan losses, management expects the following estimated capital ratios for the Bank as of December 31, 2008: Unaudited Regulatory Guideline “Our actions in the fourth quarter to bolster the allowance for loan losses were a prudent step to fortify the safety and soundness of our balance sheet,” said Alan I. Rothenberg, Chairman and Chief Executive Officer. “We enjoy one of the highest capital ratios of any bank in Southern California and are well positioned to navigate through a challenging economic environment. Our excess capital provides us with opportunities to fully support our core client base and make available our banking services to prospective customers.” Expected charge-offs for the fourth quarter of 2008 are approximately $1.4 million and for the full year 2008 are approximately $1.5 million, or 0.82% of average loans. The majority of the charge-offs are concentrated in three loans. The Bank charged-off $972,000 of a business loan to a distributor of discretionary consumer goods, which ceased operations in the fourth quarter of 2008 due to the economic weakness in consumer spending. The Bank also charged-off $189,000 of a commercial mortgage to its estimated current fair value that was provided to a Southern California auto dealer which ceased operations in the fourth quarter of 2008. The Bank has no other loans to automobile dealerships. In the third situation, the Bank charged-off $219,000 of a residential mortgage loan purchased as part of an investment pool. In 2004, in the Bank’s initial year of operations it purchased 28 single family residential mortgage loans totaling approximately $12.6 million, none of which were sub-prime mortgages. The Bank purchased these loans as an opportunity to enhance its yield on earning assets during its initial months of operation. As of December 31, 2008, other than the aforementioned loan, there are two remaining purchased loans totaling approximately $777,000, both of which are performing. The Bank has not purchased residential mortgages since 2004 and has no intention of doing so in the future. The Bank is pursuing prudent means of collection for all charged-off loans. The allowance for loan losses is expected to be approximately $5.2 million at December 31, 2008, which is 2.59% of outstanding loans compared to 1.37% at December 31, 2007. Management regularly assesses the level of the Company’s allowance for loan losses, giving consideration to current and developing economic conditions, levels of classified loans, and other relevant external and internal considerations. Management believes that the allowance for loan losses is adequate based on the results of its loan portfolio review process. About 1st Century Bancshares, Inc. 1st Century Bancshares, Inc. is the bank holding company of 1st Century Bank, N.A., a full service commercial bank headquartered in the Century City area of Los Angeles. The Bank’s primary focus is relationship banking to family owned and closely held small and middle market businesses, professional service firms and high net worth individuals, real estate investors, medical professionals, and entrepreneurs. The Company’s common stock is traded on the NASDAQ Capital Market under the symbol FCTY. The Company maintains a website at www.1stcenturybank.com. By including the foregoing website address, the Company does not intend to incorporate by reference herein any of the information or material set forth on the website. Safe Harbor Certain matters discussed in this press release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward looking statements, include, but are not limited to, the Company’s ability to provide greater flexibility for capital planning and operational expansion, navigate the difficult banking environment, maintain strong loan loss reserves and remain well capitalized and implement operational enhancements. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results, performance or achievements to differ materially from those expressed, suggested or implied by the forward-looking statements. These risks and uncertainties include, but are not limited to: (1) the impact of changes in interest rates, a decline in economic conditions and increased competition among financial service providers on the Company’s operating results, ability to attract deposit and loan customers and the quality of the Company’s earning assets; (2) government regulation; and (3) the other risks set forth in the Company’s reports filed with the U.S. Securities and Exchange Commission. The Company does not undertake, and specifically disclaims, any obligation to revise or update any forward-looking statements for any reason. # # # 1st Century Bancshares announces nasdaq listing -- Company to Begin Trading on Nasdaq December 18, 2008 Under Symbol FCTY -- “We believe a NASDAQ listing will provide increased awareness of the 1st Century Bancshares’ story and enhance the liquidity of our Company’s stock,” said Alan I. Rothenberg, Chairman and Chief Executive Officer. “As one of the strongest capitalized financial institutions in our geographic market, 1st Century Bank continues to pursue growth and new business opportunities, and we look forward to sharing our vision with a broader base of the institutional investment community.” As of September 30, 2008, the Bank’s total risk-based and tier 1 risk-based capital ratios were 25.43% and 24.18%, respectively, both substantially above the minimum regulatory thresholds to be considered “well capitalized.” 1st Century Bancshares DECIDES NOT TO PARTICIPATE Los Angeles – November 17, 2008 –1st Century Bancshares, Inc. (OTCBB:FCTY, the “Company”), the holding company of 1st Century Bank, N.A. (the “Bank”), today announced that it will not apply for funds available in the Treasury’s Capital Purchase Program, which is part of the recently launched Troubled Assets Relief Program (TARP.) 1st Century cited its strong capital structure as the principal reason for not applying for the additional funds. “1st Century is among the strongest capitalized financial institutions in our geographic market, with more than sufficient capital to continue our growth and to pursue business opportunities,” said Alan I. Rothenberg, Chairman and Chief Executive Officer. “Despite the challenging external operating environment, we have consistently focused on asset quality metrics and are leveraging our solid position to continue supporting our community through prudent lending.” The Bank’s total risk-based capital ratio of 25.43% and tier 1 risk-based capital ratio of 24.18% as of September 30, 2008 are substantially above the minimum regulatory thresholds of 10.00% and 6.00%, respectively, to be considered “well capitalized.”
1st CENTURY BANK Proves Bigger is NOT Necessarily Better-Captial Ratio Comparison The recent events in the financial markets have been unprecedented. The federal takeover of Fannie Mae and Freddie Mac, and the sudden bankruptcy filings and sales of some of the largest investment banks underscore the severity in the capital markets. We believe the primary cause of this dislocation in the market is the excessive leverage employed by these institutions. These events have shown that size is not an indication of financial strength. Instead, a better
measure of strength is equity capital relative to asset size. The attached table illustrates 1st
Century Bank’s financial strength relative to our Southern California peers. As of June 30, 2008, 1st Century Bank had a Tier-one Capital Ratio of 23.7% which is over 3.5
times the required level for “well capitalized” banks. For comparison, the average of banks
listed in the Los Angeles Business Journal Stock Index – Financial Services as of June 30, 2008
is approximate 9.5%. 1st Century Bank has over 2.5 times the average capital of our Southern
California peers. 1st Century Bank is very well capitalized, and this strong capital position has allowed us to weather the storm. Our approach to the market, which emphasizes deep knowledge and strong relationships with our clients, has served us well. We have maintained our focus on our core strengths, and the end result is a Bank that is well positioned for years to come. We appreciate your business and continued support.
1st CENTURY BANCSHARES, INC. REPORTS 2008 SECOND QUARTER FINANCIAL RESULTS Los Angeles, – August 11, 2008 – 1st Century Bancshares, Inc. (OTCBB:FCTY), the holding company of 1st Century Bank, N.A. (the “Bank”), today reported financial results for its second quarter and six months ended June 30, 2008. “1st Century Bank proudly stands very well poised in terms of capital and credit quality with a total risk-based capital ratio of 24.85%, far exceeding the standards for being considered well-capitalized, and no nonperforming loans as of June 30, 2008 which is more important than ever during these difficult financial times,” said Alan I. Rothenberg, Chairman and Chief Executive Officer of 1st Century Bancshares. “Supported by one of the strongest balance sheets amongst our peers, we will continue to operate the Bank prudently in a safe and sound manner and keep the welfare of our clients at the forefront of our efforts.” Second Quarter Highlights
Net Interest Income and Margin Net interest income of $2.9 million for the quarter ended June 30, 2008 represented an increase of $525,000 or 22.1% over the $2.4 million reported for the same quarter in 2007. The increase in net interest income was primarily attributed to growth in average earning assets from $207.6 million for the quarter ended June 30, 2007 to $236.7 million for the quarter ended June 30, 2008, or an increase of 14.1%, and an improved net interest margin. The Company’s net interest margin for the quarter ended June 30, 2008 was 4.92% compared to 4.65% for the quarter ended March 31, 2008 and 4.57% for the quarter ended June 30, 2007. The 35 basis point increase in net interest margin from second quarter 2007 to 2008 was primarily due to a 222 basis point reduction of interest paid on interest-bearing liabilities and an increase in average demand deposit balances of $2.7 million, partially offset by an 88 basis point reduction in yield on average earning assets. “We continue to focus on our net interest margin. Our disciplined pricing strategy has allowed us to increase our margin year over year while maintaining solid growth in assets,” said Jason DiNapoli, President and Chief Operating Officer of 1st Century Bancshares. For the six months ended June 30, 2008, net interest income was $5.6 million compared to $4.6 million in the prior year period. The increase was attributed to average earning assets growth of $28.1 million to $236.1 million and expanded net interest margin from 4.45% to 4.79% for the six months ended June 30, 2007 and 2008, respectively. Net interest margin expanded to 4.79% for the six months ended June 30, 2008 primarily due to a 196 basis point reduction of interest paid on interest-bearing liabilities and a $5.0 million increase in average demand deposits, offset by a 76 basis point reduction in yield on average earning assets. Non-Interest Income Non-interest income for the quarter ended June 30, 2008 was $56,000 compared to $132,000 for the same period a year ago. The decrease in non-interest income is primarily a result of the Company having no loan syndication fees in the quarter ended June 30, 2008 compared to $70,000 for the same period in 2007. For the six months ended June 30, 2008, non-interest income was $171,000 compared to $307,000 in the same period a year ago. The decrease of $136,000 was primarily due to a decrease of $195,000 in loan syndication fees, partially offset by an increase in loan arrangement fees of $51,000. Non-Interest Expense Non-interest expense was $2.6 million for the three months ended June 30, 2008 compared to $2.0 million for the prior year period. Compensation and benefits increased $250,000 primarily due to an increase in the average full-time equivalent (“FTE”) employees from 32 FTE for the quarter ended June 30, 2007 to 41 FTE for the quarter ended June 30, 2008. Occupancy expenses increased $47,000 as a result of the January 2008 opening of the Company’s Private Banking Center located on the ground floor of the Company’s headquarters. Technology expenses increased by $93,000 primarily due to costs associated with the conversion to a new core systems processor in May 2008. Other expenses increased by $175,000 due primarily to $198,000 in proxy related expenses principally related to the Company’s proxy solicitation for its contested election of directors at its annual meeting of stockholders. Non-interest expense was $4.9 million for the six months ended June 30, 2008 compared to $4.2 million for the prior year period. Compensation and benefits increased $634,000 primarily due to an increase in FTE from 32 FTE for the six months ended June 30, 2007 to 41 FTE for the six months ended June 30, 2008. Occupancy costs increased by $54,000 primarily due to the opening of the new Private Banking Center. Professional fees decreased by $323,000 as a result of a reduction in consultant fees of $174,000, corporate legal fees of $60,000, net of an increase of $63,000 in legal fees, principally related to the Company’s proxy solicitation for its contested election of directors at its annual meeting of stockholders, and a reduction of Sarbanes-Oxley Act related costs of $77,000. Technology expenses increased by $93,000 primarily due to the conversion to a new core systems processor in May 2008. Other operating expenses increased $183,000 in general due to growth in the loan and deposit portfolio as well as $135,000 in proxy related expenses principally related to the Company’s proxy solicitation for its contested election of its directors at its annual meeting of stockholders. Income Before Income Taxes and Net Income Income before income taxes was $122,000 and $250,000 for the quarter ended June 30, 2008 and 2007, respectively, and $472,000 and $414,000 for the six months ended June 30, 2008 and 2007, respectively. Excluding the non-core cost of $198,000 related to the proxy solicitation, income before income taxes would have been $320,000 and $670,000 for the three and six month periods ended June 30, 2008. The Company reported net income of $59,000, or $.01 per diluted share, for the three months ended June 30, 2008 compared to net income of $250,000, or $.02 per diluted share, in the same period a year ago. Balance Sheet Total assets increased 12.7% or $28.3 million to $252.2 million at June 30, 2008 compared to $223.9 million at December 31, 2007. The growth in assets was primarily in investment securities, which increased $4.7 million to $46.5 million at June 30, 2008, and total gross loans, which increased $20.5 million to $192.9 million at June 30, 2008. Loan growth was funded primarily by an increase in total deposits of $6.2 million or 3.8% from $161.2 million at December 31, 2007 to $167.4 million at June 30, 2008 and an increase in other borrowings of $22.0 million to $24.0 million at June 30, 2008 compared to $2.0 million at December 31, 2007. Credit Quality The allowance for loan losses was $2.6 million, or 1.37% of total loans at June 30, 2008, compared to $2.4 million, or 1.37% of total loans at December 31, 2007. The provision for loan losses was $266,000 and $431,000 for the three months and six months ended June 30, 2008, respectively, compared to $254,000 and $271,000 for the same periods a year ago. Charge-offs were $12,000 and $161,000 for the three and six months ended June 30, 2008, respectively. There were no charge-offs for the first six months of 2007. At June 30, 2008, the Company had $578,000 of other real estate owned through the foreclosure of two residential real estate properties. As previously reported, both properties were collateral for two purchased real estate mortgage loans located in Southern California. In March 2008, the Company charged-off $149,000 related to these loans. The amount of $578,000 represents management’s estimate of fair value less estimated disposal costs for these properties at June 30, 2008. In 2004, the Company purchased 28 single family residential mortgage loans totaling approximately $12.6 million, none of which were sub-prime mortgages. The Company purchased these loans as an opportunity to enhance its yield on earning assets during its initial months of operation. As of June 30, 2008 there are three remaining purchased loans totaling $1.6 million that are performing loans. The Company had no non-performing loans and $578,000 of other real estate owned at June 30, 2008. Management follows diligent and thorough credit administration and risk management practices such as analyzing classified credits, pools of loans, economic factors, trends in loan portfolio, and changes in policies, procedures, and underwriting criteria. Management believes that the allowance for loan losses at June 30, 2008 and the methodology utilized in deriving that level is adequate to absorb known and inherent losses in the loan portfolio. Capital Adequacy At June 30, 2008, stockholders’ equity in the Company totaled $59.0 million compared to $58.6 million at December 31, 2007. The Bank’s total risk-based capital ratio, tier one capital ratio, and leverage ratio of 24.85%, 23.69% and 23.87%, respectively, were all substantially above the regulatory standards for “well-capitalized” financial institutions. About 1st Century Bancshares, Inc. 1st Century Bancshares, Inc. is the bank holding company of 1st Century Bank, N.A., a full service commercial bank headquartered in the Century City area of Los Angeles. The Bank’s primary focus is relationship banking to family owned and closely held small and middle market businesses, professional service firms and high net worth individuals, real estate investors, medical professionals, and entrepreneurs. Additional information is available at www.1stcenturybank.com. Safe Harbor Certain matters discussed in this press release constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward looking statements, include, but are not limited to, the Company’s ability to provide greater flexibility for capital planning and operational expansion, navigate the difficult banking environment, maintain strong loan loss reserves and remain well capitalized and implement operational enhancements. These forward-looking statements are subject to certain risks and uncertainties that could cause the actual results, performance or achievements to differ materially from those expressed, suggested or implied by the forward-looking statements. These risks and uncertainties include, but are not limited to: (1) the impact of changes in interest rates, a decline in economic conditions and increased competition among financial service providers on the Company’s operating results, ability to attract deposit and loan customers and the quality of the Company’s earning assets; (2) government regulation; and (3) the other risks set forth in the Company’s reports filed with the U.S. Securities and Exchange Commission. The Company does not undertake, and specifically disclaims, any obligation to revise or update any forward-looking statements for any reason. Summary Financial Information The following tables present relevant financial data from 1st Century Bancshares’ recent performance:
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