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1st Capital Bank Announces: Fourth Quarter and Full Year 2012 Financial Results; Completion of Another Profitable Year of Growth

MONTEREY, CA -- (Marketwire) -- 02/04/13 -- 1st Capital Bank (OTCQB: FISB) (the "Bank") today announced fourth quarter and year to date financial results through December 31, 2012. The Bank concluded 2012 with record levels of loans, assets, deposits, and shareholders' equity. Income before provision for income taxes also attained a record level during the full year of 2012, increasing 32.5% from the full year of 2011.

Net income during the fourth quarter of 2012 was $748 thousand, equivalent to $0.23 diluted earnings per share. This compared favorably to net income of $257 thousand during the fourth quarter of 2011, equivalent to $0.08 diluted earnings per share. Earnings for the fourth quarter of 2012 also exceeded those in the immediately preceding quarter (the third quarter of 2012) of $539 thousand, equivalent to $0.16 diluted earnings per share.

The fourth quarter of 2012 earnings benefited from $699 thousand in tax-free life insurance benefits, as the Bank had obtained key man life insurance on its founding President and Chief Executive Officer, Fred Rowden, who passed suddenly and unexpectedly in November 2012. The fourth quarter 2012 earnings were restrained, however, by the Bank's establishing a $294 thousand reserve for deductions claimed under the State of California Enterprise Zone program in light of recent positions taken by the Franchise Tax Board. The establishment of the reserve was reflected in the Bank's fourth quarter 2012 provision for income taxes.

While income before provision for income taxes of $3.0 million during the full year of 2012 rose significantly from $2.2 million during the full year of 2011, net income for the full year of 2012 of $1.8 million, or $0.54 diluted earnings per share, declined from $3.1 million, or $0.97 diluted earnings per share for the full year of 2011. This decrease occurred due to the increase in 2011 earnings from the tax benefits related to the reversal of the valuation allowance against the Bank's net deferred tax assets.

Commenting on the fourth quarter and full year of 2012 financial performance, Mark Andino, the Bank's Interim President and Chief Executive Officer, stated: "We are very pleased to announce record levels of loans, assets, deposits, and shareholders' equity. These accomplishments resulted from our focus upon providing truly customized financial solutions that effectively meet the needs of our clients, enhanced by the Bank's commitment to providing a concierge level of client service." Mr. Andino then continued: "The Bank's orientation toward building long term client relationships also facilitated a strong flow of business during 2012, as we met more and more of our clients' aggregate financial needs."

Kurt Gollnick, the Bank's Chairman of the Board, stated: "The Board of Directors approved the purchase of Bank Owned Life Insurance ("BOLI") on key executives during 2012 as a means of ensuring that the potential costs of an unexpected transition would be covered, thereby protecting shareholder value. That investment proved wise with the untimely passing of President and Chief Executive Officer Fred Rowden, who successfully led the Bank through its organization, opening for business, and establishment as the premier community bank in Monterey County."

Performance Highlights

  • Net loans outstanding increased 21.1% during 2012 while the Bank continued to maintain good credit quality.

  • The Bank experienced no net charge-offs during 2012 and did not have any foreclosed real estate at any time during the year.

  • Non-accrual loans totaled $1.4 million at December 31, 2012, equivalent to 0.59% of loans outstanding.

  • Total deposits rose 15.3% during 2012, while transaction accounts increased from 83.4% of total deposits at December 31, 2011 to 89.4% of total deposits at December 31, 2012.

  • The Bank's weighted average cost of deposits was 0.19% at December 31, 2012.

  • The Bank concluded 2012 with a regulatory total risk-based capital ratio of 15.12%, substantially in excess of the 10.00% threshold to be categorized in the highest regulatory capital classification of "well capitalized".

  • Tangible book value per share rose to a record $10.27 as of December 31, 2012.

Financial Condition Analysis

Funds held at the Federal Reserve Bank of San Francisco decreased from $60.1 million at December 31, 2011 to $21.0 million at December 31, 2012. This reduction resulted from the Bank's decision to invest excess on-balance sheet liquidity into time deposits with other financial institutions and securities in order to augment interest income. Therefore, time deposits with other financial institutions increased from $3.8 million at December 31, 2011 to $9.3 million at December 31, 2012; and securities rose from $13.7 million at December 31, 2011 to $41.8 million at December 31, 2012.

A majority of the Bank's security portfolio at December 31, 2012 was comprised of AA+ rated mortgage backed securities (fixed and floating) and floating rate tranches of collateralized mortgage obligations issued by U.S. Agencies. The interest rates on the collateralized mortgage obligations float at a margin over 1 month LIBOR, subject to lifetime caps, rendering these securities highly interest rate sensitive. The fair value of the Bank's $41.8 million in securities at December 31, 2012 exceeded its amortized cost basis by $686 thousand.

The Bank concluded 2012 with a very strong liquidity profile, consisting of a significant volume of on-balance sheet assets (including cash & cash equivalents and securities available for sale) and over $100 million in off-balance sheet borrowing capacity.

Net loans increased from $197.3 million at December 31, 2011 to $238.9 million at December 31, 2012. This 21.1% increase constitutes a strong performance versus industry averages and reflects a return on the significant investment in staff and infrastructure the Bank made during the second half of 2011. That investment included hiring a number of well known, experienced local bankers and moving the Monterey Branch to a larger and better located facility.

The Bank commenced 2013 with a stronger loan pipeline than a year earlier, including a number of potential loans under various government guaranteed lending programs such as those available through the U.S. Small Business Administration ("SBA"). The Bank plans to allocate more of its marketing and promotion budget during 2013 to various government lending programs (including those through the U.S. Department of Agriculture or "USDA") in order to be able to offer increased and / or longer term financing to newer stage businesses than would otherwise be available and in order to take advantage of the current attractive secondary market prices for the guaranteed portion of such loans.

Commenting on the Bank's recent lending activity, Geoff Loftus, the Bank's Chief Credit Officer, stated: "The Bank was able to achieve meaningful growth in the loan portfolio during both the fourth quarter of 2012 and for the full year despite the limited pace of general economic growth, the continued de-leveraging by certain borrowers with strong cash flows in light of the historically low yields available on many fixed income investments, and the seasoning of the portfolio, which resulted in increased principal amortization." Mr. Loftus then continued: "While we forecast these factors continuing to provide a headwind during 2013, we are encouraged by the increasing visibility of the Bank in our local communities and the volume of referrals from existing clients."

The Bank's allowance for loan losses increased from $3.3 million, or 1.66% of total loans, at December 31, 2011 to $4.3 million, or 1.77% of total loans, at December 31, 2012. Factors that contributed to the increase in the ratio of allowance for loan losses to loans outstanding during 2012 included:

  • A rise in the percentage and volume of loans categorized as Special Mention or Substandard from $5.4 million at December 31, 2011 (2.69% of loans) to $9.3 million at December 31, 2012 (3.82% of loans).

  • An increase in specific reserves for impaired loans from $25 thousand at December 31, 2011 to $417 thousand at December 31, 2012. Impaired loans increased from one relationship totaling $240 thousand at December 31, 2011 to five relationships totaling $4.3 million at December 31, 2012.

Just $1.4 million of the $4.3 million in impaired loans at December 31, 2012 were on non-accrual status and only $0.5 million of loans on non-accrual status were 30 or more days delinquent at December 31, 2012. The Bank's ratio of allowance for loan losses to non-accrual loans was 299.38% at December 31, 2012.

Premises and equipment, net, increased from $0.6 million at December 31, 2011 to $1.3 million at December 31, 2012. The majority of this increase was due to investments in furniture and leasehold improvements as the Bank relocated and expanded its Monterey Branch to serve its growing customer base in that market. Total deposits associated with the Monterey Branch have approximately doubled over the past two years.

During the third quarter of 2012, the Bank purchased $4.5 million in BOLI. That total decreased to $3.6 million at December 31, 2012 due to the effect of the principal repayment associated with the aforementioned claim more than offsetting the impact of dividends credited to the cash surrender value of these policies.

The $41.0 million increase in total assets by the Bank during 2012 to a record $329.3 million better leveraged its capital, with the ratio of total equity to total assets decreasing from 11.03% at December 31, 2011 to 10.32% at December 31, 2012. Over time, the Bank generally seeks to maintain this ratio at between 9.00% and 10.00% in order to present a well-capitalized profile on the one hand, but also support return on average shareholders' equity on the other hand.

Non-interest bearing demand deposits increased from $118.4 million at December 31, 2011 and $102.7 million at September 30, 2012 to $123.4 million at December 31, 2012. The Bank has historically experienced an increase in demand deposits during the fourth quarter of each year in conjunction with seasonal cash flow patterns associated with certain clients.

Interest bearing checking accounts increased from $12.2 million at December 31, 2011 to $17.5 million at December 31, 2012. The Bank introduced a significantly enhanced online banking platform during 2012 that has been well received by many of the Bank's checking account clients, as it offers easy customization, fully integrated ACH origination, and client-defined activity and balance alerts via text and / or email.

Money market deposits increased from $44.0 million at December 31, 2011 to $60.1 million at December 31, 2012. Money market deposits during 2012 benefited from:

  • low (often, near zero) interest rates being paid on brokerage accounts and money market mutual funds, thereby encouraging clients to transfer their funds to higher yielding and FDIC insured accounts;

  • the conversion of certain deposits from certificates of deposit to money market accounts given the limited yield differential between the products in the current interest rate environment; and

  • the Bank's offering tiered pricing on money market accounts, whereby clients receive a higher interest rate on their entire account balance as each successively higher balance tier level is attained.

Savings deposits increased from $38.6 million at December 31, 2011 to $62.4 million at December 31, 2012 in large part due to the success of the Bank's Premier Savings product. This account offers tiered interest rates for liquid funds and has been attractive to many clients in the current historically low interest rate environment.

Time deposits decreased from $42.5 million at December 31, 2011 to $31.3 million at December 31, 2012. Factors contributing to this decline included transfers from some maturing time deposits into transaction accounts and the Bank's moderating its time deposit pricing in response to its favorable liquidity position and the availability of alternative low cost funding.

The ratio of net loans to deposits rose from 77.2% at December 31, 2011 to 81.1% at December 31, 2012. In the current interest rate environment, the Bank is targeting this ratio at 85% to 90% in light of the comparatively low yields available on cash equivalents and high credit quality, low duration securities.

Commenting on the Bank's deposit performance, Marilyn Goode, the Bank's Chief Administrative Officer, stated: "We are very pleased to report record total deposits of $294.7 million at December 31, 2012, with a corresponding weighted average cost of funds of just 0.19%." Ms. Goode then continued: "We began 2013 with a strong momentum in new deposit account openings, supported by our high caliber cash management services. We plan to implement additional cash management technology during 2013 in order for the Bank to remain strongly positioned versus competitor offerings."

Shareholders' equity rose from $31.8 million at December 31, 2011 to $34.0 million at December 31, 2012. This increase was due to:

  • the 2012 net income of $1.8 million;

  • $303 thousand in capital generated through the Equity Compensation Plan; and

  • a $78 thousand increase in accumulated other comprehensive income associated with the unrealized gain on securities classified as available for sale.

Nominal and tangible book values were $10.27 per share at December 31, 2012, versus $9.81 per share at December 31, 2011. The Bank's Board of Directors recently decided that all 2013 director compensation would be exclusively in the form of restricted share awards. This will support the Bank's regulatory capital ratios and capacity for growth; while at the same time emphasizing the directors' commitment to enhancing shareholder value. Similarly, the compensation package for the Interim President and Chief Executive Officer is comprised of a significant percentage of restricted stock (that vests over time), rather than being exclusively composed of cash compensation.

Operating Results Analysis

Net interest income before provision for loan losses increased from $2.7 million and $10.2 million during the three and twelve months ended December 31, 2011 to $3.1 million and $11.8 million during the three and twelve months ended December 31, 2012. The increases in net interest income were primarily generated by a rise in interest earning assets, as the Bank's net interest margin was lower during the three and twelve months ended December 31, 2012 than during the comparable periods during the prior year. This margin compression is a general trend facing the banking industry, as funding costs have already been reduced to historically low levels while asset yields continue to fall in conjunction with:

  • the Federal Reserve's implementing aggressive monetary policies (including quantitative easing) in an effort to reduce the stubbornly high national unemployment rate;

  • strong price competition for high quality loans; and

  • older, higher yielding securities maturing and amortizing and being replaced by new, lower yielding securities reflective of current market interest rates.

The Bank plans to support its net interest income during 2013 via the following strategies:

  • continuing to grow the Bank's balance sheet, particularly the loan portfolio; and

  • allocating a greater percentage of excess on-balance sheet liquidity to securities versus cash equivalents in order to obtain incremental yield.

The provision for loan losses was $432 thousand during the fourth quarter of 2012, compared to $196 thousand during the fourth quarter of 2011 and $98 thousand during the third quarter of 2012 (the immediately preceding quarter). The provision for loan losses for 2012 totaled $994 thousand, compared to $665 thousand for 2011. Most of the provision for loan losses during 2012 was associated with loan portfolio growth, with a lesser amount stemming from increased reserves for a relatively small number of loans downgraded to a criticized (i.e. Special Mention) or classified (i.e. Substandard) credit rating.

Non-interest income increased from $42 thousand and $144 thousand during the three and twelve months ended December 31, 2011 to $786 thousand and $909 thousand during the three and twelve months ended December 31, 2012. The vast majority of this increase was due to the death benefit and dividend income received on the BOLI assets purchased during the third quarter of 2012. In regards to fee income, Jayme Fields, the Bank's Chief Financial Officer, stated: "We appreciate the importance of augmenting non-interest income during a period of historically low interest rates accompanied by pressure on net interest margins. We are currently reviewing our operations and fees and charges to identify opportunities for additional sources of non-interest income, with the objective of implementing changes during the second quarter of 2013."

Non-interest expense increased from $2.1 million and $7.4 million during the three and twelve months ended December 31, 2011 to $2.3 million and $8.7 million during the three and twelve months ended December 31, 2012. These increases stemmed from the Bank's investment in additional personnel and enhanced facilities; and from various costs that have risen in conjunction with the increase in the Bank's balance sheet and related higher volume of loan and deposit accounts. The Bank redesigned its health and welfare benefits effective January 1, 2013 to both provide good relative value to its employees and control related expenses. The Bank's efficiency ratio (operating costs compared to income from operations) improved to 68.74% for the full year of 2012 from 71.81% for the full year of 2011.

Looking forward in 2013, Kurt J. Gollnick commented: "The Board of Directors plans to reach a decision regarding naming a permanent President and Chief Executive Officer sometime in the next several months. The Bank is fortunate to have a deep and very experienced executive team that worked tirelessly and effectively to successfully bring us through the recent change in leadership." Mr. Gollnick then added: "We believe the Bank is well positioned heading into the new year, with favorable credit quality, ample liquidity, and a strong capital base. The Board of Directors is keenly focused on the importance of leveraging that position and the planned new investments in technology, products, and delivery channels to continue building franchise value and to generate a competitive return for our shareholders."

About 1st Capital Bank

The Bank's target markets are commercial enterprises, professionals, real estate investors, family business entities, and residents in Monterey County. The Bank provides a wide range of credit products, including loans under various government programs such as those provided through the U.S. Small Business Administration ("SBA") and the U.S. Department of Agriculture ("USDA"). A full suite of deposits accounts are also furnished, complemented by robust cash management services. The Bank operates full services branch offices in Monterey, Salinas, and King City. The Bank's corporate offices are located at 5 Harris Court, Building N, Suite 3, Monterey, California 93940. The Bank's website is www.1stcapitalbank.com and the main telephone number is 831.264.4000.

Member FDIC / Equal Opportunity Lender / SBA Preferred Lender

Forward-Looking Statements:

Certain of the statements contained herein that are not historical facts are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and subject to the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements may contain words or phrases including, but not limited, to: "believe," "expect," "anticipate," "intend," "estimate," "target," "plans," "may increase," "may fluctuate," "may result in," "are projected," and variations of those words and similar expressions. All such forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected. Factors that might cause such a difference include, among other matters, changes in interest rates; economic conditions including inflation and real estate values in California and the Bank's market areas; governmental regulation and legislation; credit quality; competition affecting the Bank's businesses generally; the risk of natural disasters and future catastrophic events including terrorist related incidents and other factors beyond the Bank's control; and factors discussed in the Bank's periodic reports under the Securities Exchange Act of 1934, as amended, on Forms 10-K, 10-Q and 8-K filed with the FDIC. The Bank does not undertake, and specifically disclaims any obligation, to update or revise any forward-looking statements, whether to reflect new information, future events, or otherwise, except as required by law.

This news release is available at the www.1stcapitalbank.com Internet site for no charge.



                              1ST CAPITAL BANK
                          CONDENSED FINANCIAL DATA
                                 (Unaudited)
                (Dollars in thousands, except per share data)

                                                                 Percent
                                      3 Months Ended              Change
                                                                  From:
                             December   September    December   Sep    Dec
                               31,         30,         31,      30,    31,
Operating Results Data         2012        2012        2011    2012   2011
                           ----------- ----------- ----------- ----   ----
Interest income
  Loans                    $     3,110 $     3,153 $     2,836   (1%)   10%
  Investment securities            101         103          88   (2%)   15%
  Other                             46          42          20   10%   130%
                           ----------- ----------- -----------
    Total interest income        3,257       3,298       2,944   (1%)   11%
                           ----------- ----------- -----------
Interest expense
  Interest bearing
   checking accounts                20           7           6  186%   233%
  Money market                      54          89          70  (39%)  (23%)
  Savings                           74          74          62    0%    19%
  Time                              35          39          64  (10%)  (45%)
                           ----------- ----------- -----------
    Total interest expense         183         209         202  (12%)   (9%)
                           ----------- ----------- -----------
Net interest income              3,074       3,089       2,742   (0%)   12%
Provision for loan losses          432          98         196  341%   120%
                           ----------- ----------- -----------
Net interest income after
  provision for loan
   losses                        2,642       2,991       2,546  (12%)    4%

Noninterest income
  Service charges on
   deposits                         22          20          27   10%   (19%)
  BOLI benefits                    699           -           -  100%   100%
  BOLI dividend income              30           7           -  329%   100%
  Other                             35          21          15   67%   133%
                           ----------- ----------- -----------
    Total noninterest
     income                        786          48          42 1538%  1771%

Noninterest expenses
  Salaries and benefits          1,324       1,290       1,243    3%     7%
  Occupancy                        195         173         138   13%    41%
  Furniture and equipment           86          65         100   32%   (14%)
  Other                            678         582         667   16%     2%
                           ----------- ----------- -----------
    Total noninterest
     expenses                    2,283       2,110       2,148    8%     6%
                           ----------- ----------- -----------
Income before provision
 for income taxes                1,145         929         440   23%   160%
Provision for (benefit
 from) income taxes                397         390         183    2%   117%
                           ----------- ----------- -----------
    Net income             $       748 $       539 $       257   39%   191%
                           =========== =========== ===========

Common Share Data
--------------------------
  Earnings per share
    Basic                  $      0.23 $      0.17 $      0.08   35%   188%
    Diluted                $      0.23 $      0.16 $      0.08   44%   188%

  Weighted average shares outstanding
    Basic                    3,228,689   3,248,690   3,220,853
    Diluted                  3,295,371   3,337,605   3,254,306




                               12 Months Ended
                                 December 31,       Percent
Operating Results Data         2012        2011      Change
                           ----------- -----------  -------
Interest income
  Loans                    $    12,008 $    10,671       13%
  Investment securities            413         395        5%
  Other                            180          85      112%
                           ----------- -----------
    Total interest income       12,601      11,151       13%
                           ----------- -----------
Interest expense
  Interest bearing
   checking accounts                40          40        0%
  Money market                     331         357       (7%)
  Savings                          282         251       12%
  Time                             171         332      (48%)
                           ----------- -----------
    Total interest expense         824         980      (16%)
                           ----------- -----------
Net interest income             11,777      10,171       16%
Provision for loan losses          994         665       49%
                           ----------- -----------
Net interest income after
  provision for loan
   losses                       10,783       9,506       13%

Noninterest income
  Service charges on
   deposits                         85          75       13%
  BOLI benefits                    699           -      100%
  BOLI dividend income              37           -      100%
  Other                             88          69       28%
                           ----------- -----------
    Total noninterest
     income                        909         144      531%

Noninterest expenses
  Salaries and benefits          5,159       4,272       21%
  Occupancy                        725         575       26%
  Furniture and equipment          328         371      (12%)
  Other                          2,508       2,189       15%
                           ----------- -----------
    Total noninterest
     expenses                    8,720       7,407       18%
                           ----------- -----------
Income before provision
 for income taxes                2,972       2,243       33%
Provision for (benefit
 from) income taxes              1,166        (895)    (230%)
                           ----------- -----------
    Net income             $     1,806 $     3,138      (42%)
                           =========== ===========

Common Share Data
--------------------------
  Earnings per share
    Basic                  $      0.56 $      0.97      (42%)
    Diluted                $      0.54 $      0.97      (44%)

  Weighted average shares
   outstanding
    Basic                    3,224,782   3,220,853
    Diluted                  3,319,925   3,244,921




                              1ST CAPITAL BANK
                          CONDENSED FINANCIAL DATA
                                 (Unaudited)
                (Dollars in thousands, except per share data)
                                                                 Percent
                                                                  Change
                                                                  From:
                            December    September   December    Sep    Dec
                               31,         30,         31,      30,    31,
Financial Condition Data      2012        2012        2011     2012   2011
-------------------------- ----------  ----------  ----------  ----   ----
Assets
  Cash and due from banks  $    8,551  $    7,444  $    8,910    15%    (4%)
  Funds held at the
   Federal Reserve Bank        21,042      27,430      60,062   (23%)  (65%)
  Time deposits at other
   financial institutions       9,321       9,570       3,835    (3%)  143%
  Available-for-sale
   securities, at fair
   value                       41,762      17,384      13,685   140%   205%
  Loans:
    Commercial                 89,834      89,117      78,504     1%    14%
    Real estate-
     construction               4,834       4,513       4,126     7%    17%
    Real estate-other         147,320     138,641     115,902     6%    27%
    Consumer                      748       1,295       1,580   (42%)  (53%)
    Deferred loan fees and
     costs, net                   517         516         470     0%    10%
                           ----------  ----------  ----------
      Total loans             243,253     234,082     200,582     4%    21%
    Allowance for loan
     losses                    (4,314)     (3,882)     (3,320)   11%    30%
                           ----------  ----------  ----------
  Net loans                   238,939     230,200     197,262     4%    21%
  Premises and equipment,
   net                          1,282       1,325         615    (3%)  108%
  Bank owned life
   insurance                    3,555       4,500           -   (21%)  100%
  Investment in Federal
   Home Loan Bank stock,
   at cost                      1,026       1,026         918     0%    12%
  Accrued interest
   receivable and other
   assets                       3,871       3,805       3,028     2%    28%
                           ----------  ----------  ----------
Total assets               $  329,349  $  302,684  $  288,315     9%    14%
                           ==========  ==========  ==========

Liabilities and
 Shareholders' Equity
  Deposits:
    Noninterest bearing
     demand deposits       $  123,403  $  102,745  $  118,366    20%     4%
    Interest bearing
     checking accounts         17,482      13,442      12,188    30%    43%
    Money market               60,091      59,508      43,983     1%    37%
    Savings                    62,364      58,260      38,558     7%    62%
    Time                       31,314      34,584      42,488    (9%)  (26%)
                           ----------  ----------  ----------
      Total deposits          294,654     268,539     255,583    10%    15%

Accrued interest payable
 and other liabilities            694         910         919   (24%)  (24%)

Shareholders' equity           34,001      33,235      31,813     2%     7%
                           ----------  ----------  ----------
Total liabilities and
 shareholders' equity      $  329,349  $  302,684  $  288,315     9%    14%
                           ==========  ==========  ==========


  Shares outstanding at
   end of period            3,310,503   3,251,003   3,243,293
  Nominal and tangible
   book value per share    $    10.27  $    10.22  $     9.81


  Ratio of net loans to
   total deposits               81.09%      85.72%      77.18%




                              1ST CAPITAL BANK
                          CONDENSED FINANCIAL DATA
                                 (Unaudited)
                           (Dollars in thousands)

                                                                 Percent
                                                                  Change
                                                                  From:
                               December  September   December   Sep    Dec
                                 31,        30,        31,      30,    31,
                                 2012       2012       2011    2012   2011
                              ---------  ---------  ---------  ----   ----

Asset Quality
-----------------------------
  Loans past due 90 days or
   more and accruing interest $       -  $       -  $       -
  Nonaccrual restructured
   loans                            238        220        240     8%    (1%)
  Other nonaccrual loans          1,203        519          -   132%
  Other real estate owned             -          -          -
                              ---------  ---------  ---------
    Total nonperforming
     assets                   $   1,441  $     739  $     240    95%   500%
                              =========  =========  =========

  Allowance for loan losses
   to total loans                  1.77%      1.66%      1.66%    7%     7%
  Allowance for loan losses
   to nonperforming loans        299.38%    525.59%  1,383.00%  (43%)  (78%)
  Allowance for loan losses
   to nonperforming assets       299.38%    525.59%  1,383.00%  (43%)  (78%)
  Nonperforming assets to                                             1,48
   total assets                    0.44%      0.24%      0.08%  440%     5%

Regulatory Capital and Ratios
-----------------------------
  Tier 1 regulatory capital   $  33,600  $  32,793  $  31,490     2%     7%
  Total regulatory capital    $  36,646  $  35,723  $  33,985     3%     8%
  Tier 1 leverage ratio           10.67%     10.81%     12.58%   (1%)  (15%)
  Tier 1 capital ratio            13.87%     14.30%     15.82%   (3%)  (12%)
  Total risk based capital
   ratio                          15.12%     15.50%     17.07%   (2%)  (12%)


                                                                 Percent
                                       3 Months Ended             Change
                                                                  From:
                               December  September   December   Sep    Dec
                                 31,        30,        31,      30,    31,
                                 2012       2012       2011    2012   2011
                              ---------  ---------  ---------  ----   ----

Selected Financial Ratios
-----------------------------
  Return on average total
   assets                          0.94%      0.71%      0.41%   34%   131%
  Return on average
   shareholders' equity            8.84%      6.49%      3.20%   36%   176%
  Net interest margin              4.07%      4.20%      4.54%   (3%)  (10%)
  Efficiency ratio                59.15%     67.26%     77.16%  (12%)  (23%)

Selected Average Balances
-----------------------------
  Loans                       $ 235,680  $ 231,716  $ 201,594     2%    17%
  Investment securities          22,081     17,866     12,377    24%    78%
  Other                          42,672     42,873     25,524    (0%)   67%
                              ---------  ---------  ---------
    Total interest earning
     assets                   $ 300,433  $ 292,455  $ 239,494     3%    25%
  Total assets                $ 315,501  $ 303,785  $ 250,032     4%    26%

  Interest bearing checking
   accounts                   $  13,670  $  13,170  $   8,774     4%    56%
  Money market                   61,035     64,196     48,164    (5%)   27%
  Savings                        62,486     55,170     36,167    13%    73%
  Time deposits                  32,872     35,229     43,188    (7%)  (24%)
                              ---------  ---------  ---------
    Total interest bearing
     liabilities              $ 170,063  $ 167,765  $ 136,293     1%    25%
  Noninterest bearing demand
   deposits                     111,670    102,719     80,932     9%    38%
                              ---------  ---------  ---------
    Total deposits            $ 281,733  $ 270,484  $ 217,225     4%    30%
  Shareholders' equity        $  33,646  $  33,031  $  31,865     2%     6%





                                 12 Months Ended
                                  December 31,      Percent
                                 2012       2011     Change
                              ---------  ---------  -------

Selected Financial Ratios
-----------------------------
  Return on average total
   assets                          0.60%      1.35%     (55%)
  Return on average
   shareholders' equity            5.50%     10.31%     (47%)
  Net interest margin              4.11%      4.54%      (9%)
  Efficiency ratio                68.74%     71.81%      (4%)

Selected Average Balances
-----------------------------
  Loans                       $ 220,552  $ 189,421       16%
  Investment securities          18,376     13,232       39%
  Other                          48,560     21,459      126%
                              ---------  ---------
    Total interest earning
     assets                   $ 287,488  $ 224,112       28%
  Total assets                $ 299,207  $ 232,602       29%

  Interest bearing checking
   accounts                   $  12,792  $   8,573       49%
  Money market                   62,953     50,002       26%
  Savings                        51,902     32,724       59%
  Time deposits                  36,700     46,457      (21%)
                              ---------  ---------
    Total interest bearing
     liabilities              $ 164,347  $ 137,757       19%
  Noninterest bearing demand
   deposits                     101,701     63,445       60%
                              ---------  ---------
    Total deposits            $ 266,048  $ 201,202       32%
  Shareholders' equity        $  32,836  $  30,442        8%


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@ThingsExpo Stories
The BPM world is going through some evolution or changes where traditional business process management solutions really have nowhere to go in terms of development of the road map. In this demo at 15th Cloud Expo, Kyle Hansen, Director of Professional Services at AgilePoint, shows AgilePoint’s unique approach to dealing with this market circumstance by developing a rapid application composition or development framework.

ARMONK, N.Y., Nov. 20, 2014 /PRNewswire/ --  IBM (NYSE: IBM) today announced that it is bringing a greater level of control, security and flexibility to cloud-based application development and delivery with a single-tenant version of Bluemix, IBM's platform-as-a-service. The new platform enables developers to build ap...

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The Internet of Things is a misnomer. That implies that everything is on the Internet, and that simply should not be - especially for things that are blurring the line between medical devices that stimulate like a pacemaker and quantified self-sensors like a pedometer or pulse tracker. The mesh of things that we manage must be segmented into zones of trust for sensing data, transmitting data, receiving command and control administrative changes, and peer-to-peer mesh messaging. In his session at @ThingsExpo, Ryan Bagnulo, Solution Architect / Software Engineer at SOA Software, focused on desi...
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