GLEN ALLEN, Va., Nov. 3 /PRNewswire-FirstCall/ -- First Capital Bancorp,
Inc. (the "Company") (Nasdaq: FCVA), the bank holding company for First
Capital Bank (the "Bank"), today reported third quarter and nine month
earnings.
Nationwide, concerns over asset quality, precipitated by issues related to
declining real estate activity and general economic conditions, continued to
increase in the banking industry during the third quarter. The impact of
these concerns is reflected in the economic markets in which the Company
operates, principally through slowing real estate activity. Residential
acquisition and development lending and builder/construction lending have been
significantly scaled back as housing activity across our markets has declined.
Management will continue to monitor delinquencies, risk rating changes,
charge-offs, market trends and other indicators of risk in the Company's
portfolio, particularly those tied to residential real estate, and adjust the
allowance for loan losses accordingly.
First Capital Bancorp, Inc. announced today, due primarily to a
significant increase in the allowance for loan losses, a net loss of $463
thousand or $.16 per diluted share for the three months ending September 30,
2008, compared to net income of $501 thousand for the same period in 2007.
Earnings for the first nine months of 2008 totaled $338 thousand or $.11 per
share which is a 72% decrease from $1.2 million or $.53 per diluted share for
the same period in 2007.
First Capital Bank President and CEO Bob Watts noted, "While these are
clearly some of the most challenging times our industry has dealt with in
decades, we're well capitalized and to date have experienced uniquely strong
asset quality and operate in a market with a proven history of stability. At
quarter end, the non-performing assets of the Bank are represented by two
30-day past due loans totaling $112 thousand and $2.1 million in nonaccrual
loans which are predominantly secured by residential real estate. However,
the current economy has put stress on the banking industry and we feel we have
to react with caution and will continue to be cautious until the economy
strengthens and increase our reserve levels in light of the uncertainty in the
market."
As a result, the Company significantly increased its provision for loan
losses by $1.4 million for the three months ended September 30, 2008 compared
to $186 thousand for the same period in 2007. The provision for loan losses
totals $2.0 million for the first nine months of 2008 compared to $438
thousand for the same period last year. The allowance for loan losses
increased to 1.25 % of total loans as of September 30, 2008 as compared to
.93% at the end of June, 2008 and .88% at the end of the same period last
year.
Mr. Watts also noted, "While the Bank has only incurred year-to-date net
charge-offs of $129 thousand and non-performing assets totaled $2.2 million or
.52% percent of assets at the end of the quarter, the growth in our loan
portfolio and the current economic conditions dictate extreme caution, and we
feel that it is appropriate to increase the underlying reserve calculation
levels."
Total assets at September 30, 2008 were $419.6 million, up $67.8 million,
or 19.3%, from total assets at December 31, 2007 and up $108.6 million, or
34.9%, from the same period in 2007. Total loans increased $95.8 million to
$347.7 million, up 38.0% from the same period in 2007. Deposits grew at a
greater level than loans with an increased $99.0 million to $322.9 million, up
44.2% from the same period in 2007. Federal Home Loan Bank advances increased
$15 million to $50.0 million, up 42.9% from the same period in 2007. The
Company's capital position remains strong as Stockholders Equity increased
$3.4 million, up 10.8% from June 30, 2007 as earnings over the last twelve
months totaled $867 thousand and the Company exercised an over-allotment in
July 2007, increasing net worth by $2.1 million. At September 30, 2008, the
Company exceeded all regulatory capital requirements, with total Risk Based
Capital 12.84% and Tier 1 capital of 11.08%.
Net interest income increased 20.9% to $8.4 million from $6.9 million for
the nine months ended September 30, 2007. This increase in net interest
income is attributable to the 38.0% growth of the loan portfolio from $251.9
million at September 30, 2007 to $347.7 million at September 30, 2008, offset
by the effects of drastic reductions in the prime lending rate. The Federal
Reserve Bank dropped the federal funds target rate and the associated rate of
interest 300 basis points late in 2007 and the first quarter of 2008. An
additional 25 basis point drop occurred in the second quarter of 2008
resulting in a decrease of 325 basis points for the last twelve months. At
September 30, 2008, approximately 39.5% of the Bank's loan portfolio is tied
to this key rate. Although the vast majority of our time deposits are set to
reprice in the next six months and will continue to lower funding costs, this
rapid reduction in rates put pressure on our net interest margin during the
first and second quarter. The net interest margin for the third quarter of
2008 was 2.87%, a decline from 3.73% in the third quarter of 2007. For the
nine months ended September, 2008, the net interest margin was 2.99% down from
3.49% for the first nine months of 2007.
Noninterest expense increased $433 thousand or 23.2% for the three months
ended September 30, 2008 as compared to the same period in 2007 and $1.2
million or 22.7% for the nine months ended September 30, 2008. The majority
of the increase is attributable to the expanded branch franchise and the key
additions to the lending team. Consequently, the largest increases in
noninterest expense occurred in salaries and employee benefits of $118
thousand for the three months ended September 30, 2008 and $440 thousand for
the nine months ended September 30, 2008 as compared to the comparable periods
in 2007.
The Company currently operates seven branches in Innsbrook, Chesterfield
Towne Center, near Willow Lawn on Staples Mill Road, in Ashland, in the Forest
Office Park in Henrico County, at the James Center in downtown, Richmond, and
our newest branch in Bon Air, Chesterfield County. The Company recently
relocated the Innsbrook Branch to a free standing location in WestMark. The
Company will also relocate our Forest Office Park branch to a free standing
location at 7100 Three Chopt Road in the City of Richmond in the months ahead.
Readers are cautioned that this press release contains forward-looking
statements made pursuant to safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. Such forward-looking statements are based on
management's current knowledge, assumptions, and analyses, which it believes
are appropriate in the circumstances regarding future events, and may address
issues that involve significant risks including, but not limited to: changes
in interest rates; changes in accounting principles, policies, or guidelines;
significant changes in general economic, competitive, and business conditions;
significant changes in or additions to laws and regulatory requirements; and
significant changes in securities markets. Additionally, such aforementioned
uncertainties, assumptions, and estimates, may cause actual results to differ
materially from the anticipated results or other expectations expressed in the
forward-looking statements.
First Capital Bank ... Where People Matter.
First Capital Bancorp, Inc.
Financial Highlights
(Dollars in thousands, except per share amounts)
Balance Sheet Data:
September 30, December 31,
2008 2007
Total assets $419,645 $351,867
Loans, net 347,672 294,234
Deposits 322,864 255,108
Borrowings 60,211 58,519
Stockholders' equity 34,663 34,859
Book value per share $11.67 $11.73
Total shares outstanding 2,971,171 2,971,171
Asset Quality Ratios
Allowance for loan losses to loans 1.25% 0.84%
Nonperforming assets to assets 0.52% 0.01%
Selected Operating Data:
Three Months Ended Nine Months Ended
September 30, September 30,
2008 2007 2008 2007
Interest income $6,103 $5,279 $17,996 $14,604
Interest expense 3,269 2,631 9,624 7,677
Net interest income 2,834 2,648 8,372 6,927
Provision for loan losses 1,407 186 2,042 438
Noninterest income 184 175 555 531
Noninterest expense 2,300 1,867 6,333 5,160
Income (loss) before income tax (689) 770 552 1,860
Income tax (benefit) expense (226) 269 214 647
Net (loss) income $(463) $501 $338 $1,213
Income per share
Basic $(0.16) $0.17 $0.11 $0.54
Diluted $(0.16) $0.17 $0.11 $0.53
Selected Performance Ratios:
Return on average assets -0.45% 0.69% 0.12% 0.59%
Return on average equity -5.22% 5.93% 1.28% 8.38%
Net interest margin 2.87% 3.73% 2.99% 3.49%
Efficiency 76.2% 66.1% 69.18% 69.18%
Equity to assets 8.26% 10.99% 8.26% 10.99%
