1st Capital Bancorp Delivers Solid Q2 2024 Results, Prepares for Merger with Santa Cruz County Bank

1st Capital Bancorp, the parent company of 1st Capital Bank, has reported its unaudited financial results for the second quarter of 2024, showcasing continued growth and profitability. The company's net income for the quarter stood at 4 thousand, or {{royaItemContent}}.16 per diluted share, a slight decrease from the previous quarter but a significant improvement over the same period last year. The bank's performance highlights its ability to navigate the evolving financial landscape and position itself for future success, particularly as it prepares to integrate with Santa Cruz County Bank.

Driving Growth and Profitability Through Strategic Initiatives

Loan Portfolio Expansion and Margin Optimization

1st Capital Bancorp's core loan portfolio experienced a robust 7.8% growth, reaching 2.5 million at the end of the second quarter. This expansion, coupled with the repricing of cash flows and the effective utilization of interest rate hedges, has begun to deliver the anticipated net interest margin and profitability benefits. The bank's net interest margin increased by 1 basis point to 3.29% for the quarter, reflecting its ability to manage its asset and liability mix effectively.

Merger Preparations with Santa Cruz County Bank

During the second quarter of 2024, 1st Capital Bancorp and West Coast Community Bancorp, the holding company for Santa Cruz County Bank, announced a merger agreement. The combined entity will leverage its enhanced lending power and expanded geographic footprint to drive opportunities for business expansion, agriculture, entrepreneurship, and economic growth within the communities it serves. The regulatory applications for the merger have been submitted and are pending approval, with the anticipated closing expected in the fourth quarter of 2024, subject to regulatory and shareholder approvals.

Commitment to Clients and Communities

1st Capital Bancorp's President and Chief Executive Officer, Sam Jimenez, highlighted the professionalism and commitment of the 1st Capital team in ensuring that clients and communities remain the focal point of the bank's relationship-driven and community-focused model. This dedication to serving the needs of its customers and local communities has been a key driver of the bank's success and will continue to be a priority as it moves forward with the merger.

Financial Highlights

The bank's financial performance for the second quarter of 2024 showcased several notable achievements:- Quarterly net income of 4 thousand, with an adjusted net income of .1 million excluding merger-related costs.- Diluted earnings per share of {{royaItemContent}}.16, with merger expenses impacting the figure by {{royaItemContent}}.03.- Pre-tax, pre-provision income of .9 million, or .2 million excluding merger-related costs.- Total assets increased by 2.7% to .0 billion, while core loans grew by 7.8% to 2.5 million.- Return on average equity and return on average assets were 5.51% and 0.35%, respectively, with the impact of merger-related expenses.- Net interest margin remained stable at 3.29%, reflecting the bank's ability to manage its interest rate environment.- The efficiency ratio was 76.65%, with merger-related costs impacting the ratio by 342 basis points.- Provision for credit loss expense decreased to 4 thousand, driven by reduced charge-offs in the purchased lease and consumer pools.- Nonperforming assets to total assets stood at 0.15%, indicating the bank's continued focus on asset quality.- The bank maintained strong regulatory capital ratios, exceeding well-capitalized thresholds.

Liquidity and Funding

1st Capital Bancorp's balance sheet remained robust, with 9.3 million in available liquidity from secured and unsecured borrowing lines, representing 33.5% of total assets. The bank's deposit base remained stable, with noninterest-bearing balances comprising 43.1% of total deposits at the end of the second quarter.In conclusion, 1st Capital Bancorp's second quarter 2024 results demonstrate its ability to navigate the evolving financial landscape and deliver solid performance. As the bank prepares to integrate with Santa Cruz County Bank, the combined entity is poised to leverage its enhanced capabilities and expanded footprint to drive growth, serve its communities, and create value for its shareholders.