1st Financial Services Corporation Reports Fourth Quarter and Full Year 2009 Results
HENDERSONVILLE, N.C., March 15 /PRNewswire-FirstCall/ -- 1st Financial Services Corporation (the “Company”), Hendersonville, North Carolina (OTC Bulletin Board: FFIS), the parent company of Mountain 1st Bank and Trust Company (the “Bank”), announced financial results for the fourth quarter and full year ending December 31, 2009. For the quarter ending December 31, 2009, the Company reported a net loss available to common stockholders of $9.9 million or $1.98 per basic and diluted share. This represents an increase of $8.3 million as compared with the Company’s net loss of $1.6 million or $0.32 per basic and diluted share reported during the same period in 2008. The decrease in quarterly net income was driven primarily by a $11.0 million charge to provision expense, an increase of $6.7 million over the same period in 2008.
For the year ending December 31, 2009, the Company reported a net loss available to common shareholders of $19.6 million or $3.91 per basic and diluted share, compared to net income of $207 thousand or $0.04 per basic and diluted share for the year ending December 31, 2008. The decrease in net income was driven primarily by $29.9 million in provision expense, an increase of $23.4 million over the provision for loan losses taken the prior year. Also adversely impacting net income was an increase of FDIC deposit insurance premium assessments of $1.3 million over the prior year. This additional assessment has been levied on all FDIC insured banks based on asset size. Excluding both the increase in provision for loan losses and the increase in FDIC deposit insurance premium assessments, the Company showed a slight increase in income for 2009 over 2008.
The Company’s assets increased $85.9 million or 12.1% to $793.0 million as of December 31, 2009, compared to $707.1 million at December 31, 2008. Loans decreased by $25.3 million or 4.3% to $558.7 million as of December 31, 2009, compared to $584.0 million on December 31, 2008. Total deposits increased by $82.3 million or 13.9% to $673.3 million as of December 31, 2009, as compared to $591.0 million at December 31, 2008.
Mike Mayer, CEO, stated, “2009 was a difficult year as we experienced continued deterioration in our portfolio. In the third and fourth quarters we took aggressive action to identify troubled loans and establish increased reserves against this portfolio. These actions included conducting an exhaustive internal and external review of our loan portfolio, remediating our loan files and hiring additional staff to work through our problem loans. These actions, coupled with a new Loan Loss Allowance Model, led to the increased reserves taken in the second half of the year. After the increase in Loan Loss Reserve the Bank remains adequately capitalized.
“Our plan for 2010 is to concentrate on our core competencies. We have a solid retail distribution system with an outstanding customer service culture. We have added significant liquidity to the balance sheet through strong deposit growth during the year and remain adequately capitalized. We have also added a Private Banking Unit that will expand on our core competency by serving the needs of high net worth clients who desire individual attention and specialized service. In addition, we will continue to build on our SBA loan portfolio by capitalizing on our SBA Preferred Lender status."
About 1st Financial Services Corporation
Formed in May 2008, 1st Financial Services Corporation is the parent company of Mountain 1st Bank & Trust Company, and is currently traded on the Over The Counter Bulletin Board under the symbol FFIS. Established in May of 2004, with approximately $800 million in assets, Mountain 1st Bank and Trust’s more than 170 employees serve nine counties in western North Carolina through 14 full service branches. For more information, visit www.mountain1st.com.
Disclosures About Forward Looking Statements
This press release may contain forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including Section 21E of the Securities Exchange Act of 1934 and Section 27A of the Securities Act of 1933. Such statements involve known and unknown risks, uncertainties and other factors that may cause actual results to differ materially. For the purposes of these discussions, any statements that are not statements of historical fact may be deemed to be forward looking statements. Such statements are often characterized by the use of qualifying words such as “expects,” “anticipates,” “believes,” “estimates,” “plans,” “projects,” or other statements concerning opinions or judgments of the Company and its management about future events. The accuracy of such forward looking statements could be affected by factors including, but not limited to, the financial success or changing conditions or strategies of the Bank’s customers or vendors, fluctuations in interest rates, actions of government regulators, the availability of capital and personnel or general economic conditions. Additional factors that could cause actual results to differ materially from those anticipated by forward looking statements are discussed in the Company’s filings with the Securities and Exchange Commission, including without limitation its annual report on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K. The Company undertakes no obligation to revise or update these statements following the date of this press release.
1st Financial Services Corporation Selected Financial Highlights
For the Year Ended Amount Percent
December 31, Increase/ Increase/
2009 2008 (Decrease) (Decrease)
---- ---- ---------- ----------
Selected Income (dollars in thousands
Statement Data and except share and per
Ratios (unaudited) share data)
Net interest income $22,535 $20,645 $1,890 9.15%
Provision for loan
losses 29,940 6,520 23,420 359.20%
Noninterest income 6,131 4,824 1,307 27.09%
Noninterest expense 22,664 18,512 4,152 22.43%
------ ------
Income (loss) before
income taxes (23,938) 437 (24,375) -5577.80%
Income tax expense
(benefit) (5,381) 98 (5,479) -5590.82%
------ ---
Net income (loss) (18,557) 339 (18,896) -5574.04%
Accretion of
preferred stock 203 27 176 651.85%
Preferred dividends
accrued 821 105 716 681.90%
Net income (loss)
available to common
stockholders $(19,581) $207 (19,788) -9559.42%
======== ====
Net interest margin 3.20% 3.24% -0.04% -1.23%
Return on average
assets -2.53% 0.05% -2.58% -5051.08%
Return on average
common equity -45.81% 0.69% -46.50% -6738.48%
Efficiency ratio 79.06% 72.68% 6.38% 8.77%
Net charge-offs to
average total loans,
excluding held for
sale 1.90% 0.89% 1.01% 112.48%
Nonperforming assets
to period end loans
and other real estate 6.20% 2.22% 3.98% 179.21%
Nonperforming assets
to total assets 4.35% 1.82% 2.52% 138.66%
Net income (loss)
per share:
Basic $(3.91) $0.04 (3.95) -9875.00%
Diluted $(3.91) $0.04 (3.95) -9875.00%
Weighted average
shares outstanding:
Basic 5,003,184 4,997,027 6,157 0.12%
Diluted 5,003,184 5,234,295 (231,111) -4.42%
For the Three Months Amount Percent
Ended December 31, Increase/ Increase/
2009 2008 (Decrease) (Decrease)
---- ---- ---------- ----------
Selected Income (dollars in thousands
Statement Data and except share and per
Ratios (unaudited) share data)
Net interest income $5,410 $5,359 $51 0.95%
Provision for loan
losses 10,965 4,280 6,685 156.19%
Noninterest income 1,766 1,095 671 61.28%
Noninterest expense 5,796 4,463 1,333 29.87%
----- -----
Income (loss) before
income taxes (9,585) (2,289) (7,296) -318.74%
Income tax expense
(benefit) 73 (821) 894 -108.89%
--- ----
Net income (loss) (9,658) (1,468) (8,190) -557.90%
Accretion of preferred
stock 51 27 24 -88.89%
Preferred dividends
accrued 205 105 100 -95.24%
Net income (loss)
available to common
stockholders $(9,914) $(1,600) (8,314) -519.63%
======= =======
Net income (loss)
per share:
Basic $(1.98) $(0.32) (1.66) -518.05%
Diluted $(1.98) $(0.32) (1.66) -518.05%
Weighted average
shares outstanding:
Basic 5,009,736 4,997,027 12,709 0.25%
Diluted 5,009,736 4,997,027 12,709 0.25%
Amount Percent
As of December 31, Increase/ Increase/
2009 2008 (Decrease) (Decrease)
---- ---- ---------- ----------
Selected Balance (unaudited)
Sheet Data (dollars in thousands except
Share and per share data)
Total assets $793,011 $707,136 $85,875 12.14%
Loans, including
loans held for sale 558,732 584,033 (25,301) -4.33%
Allowance for loan
losses 28,231 9,013 19,218 213.23%
Deposits 673,282 591,014 82,268 13.92%
Federal funds
purchased and
securities sold
under agreements to
repurchase 1,270 1,372 (102) -7.43%
Borrowings 70,000 48,000 22,000 45.83%
Shareholders' equity 43,762 62,570 (18,808) -30.06%
Book value per
common share $5.62 $9.44 (3.82) -40.47%
SOURCE 1st Financial Services Corporation
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