1st United Bancorp, Inc. Announces Earnings for the Year ended December 31, 2010 and a Reduction in Non-Performing Assets

BOCA RATON, Fla., Feb. 14, 2011 /PRNewswire/ -- (Nasdaq: FUBC) -- 1st United Bancorp, Inc. ("1st United") reported net income available to common shareholders of $2.2 million ($.09 earnings per share) for the year ended December 31, 2010, compared to a net income available to common shareholders of $2.2 million ($.17 earnings per share) for the year ended December 31, 2009.

For the quarter ended December 31, 2010, 1st United had a net income available to common shareholders of $1.8 million ($.07 earnings per share) which compares to a net income available to common shareholders of $4.7 million ($.18 income per share) for the three months ended December 31, 2009.

Non-performing assets not covered by FDIC Loss Share Agreements were reduced by $3.3 million (14%) during the quarter ended December 31, 2010, as compared to September 30, 2009.

Highlights for the quarter and year ended December 31, 2010:

Acquisition of The Bank of Miami, N.A. from the Federal Deposit Insurance Corporation as Receiver

On December 17, 2010, 1st United Bank, 1st United's wholly-owned subsidiary, acquired substantially all the deposits and certain assets of The Bank of Miami, N.A. ("TBOM") through a purchase and assumption agreement ("TBOM Agreement") with the Federal Deposit Insurance Corporation ("FDIC").  The estimated fair value of the deposits assumed was $254.5 million, the estimated fair value of the acquired loans was $203.2 million, and acquired cash and investments was $104 million.  1st United Bank paid the FDIC approximately $39.8 million which was net of a negative net bid of $38.0 million.  1st United recorded a gain on this purchase of $11 million for the quarter and year ended December 31, 2010.

TBOM operated three banking centers in Miami-Dade County, Florida, and had approximately 101 employees.  1st United anticipates closing all three branches and serving customers from existing 1st United banking centers.

The acquired loans are covered by two loss share agreements (the "TBOM Loss Share Agreements") between the FDIC and 1st United Bank, which affords 1st United Bank significant loss protection.  Under the TBOM Loss Share Agreements, the FDIC will cover 80% of covered loan and foreclosed real estate losses for all of the loans and other real estate acquired.  The TBOM Loss Share Agreements also cover third party collection costs and 90 days of accrued interest on covered assets.  The term for loss sharing on residential real estate loans is ten years, while the term for loss sharing on non-residential real estate loans is five years with respect to losses and eight years with respect to loss recoveries. The reimbursable losses from the FDIC are based on the book value of the relevant loan as determined by the FDIC at the date of the transaction.  New loans made after that date are not covered by the TBOM Loss Sharing Agreements.

Financial Condition

• Total assets at December 31, 2010 were $1.268 billion, an increase of approximately $254 million over the total assets at December 31, 2009 of $1.013 billion.  The increase was primarily a result of the TBOM acquisition.
• Non-interest bearing deposits represent approximately 26% of total deposits at December 31, 2010 as compared to 24% at December 31, 2009.
• The allowance for loan losses at December 31, 2010 was $13.1 million (1.52% of total loans which includes the acquired TBOM loans) and 69% of non-accrual loans.  This compares to an allowance for loan losses at December 31, 2009 of $13.3 million (1.99% of total loans) and 85% of non-accrual loans.
• Non-performing assets (non-accruing loans, loans accruing more than 90 days and other real estate owned) to total assets were 2.21% at December 31, 2010.  Included in the non-performing assets at December 31, 2010 is $6.6 million of other real estate from the TBOM acquisition covered by the TBOM Loss Share Agreements.  This compares to non-performing assets of 1.60% at December 31, 2009.
• Total risk-based capital ratio, Tier 1 capital ratio, and leverage ratio at December 31, 2010 were 23.7%, 21.6% and 11.8%, respectively.

Operating Results

• Net income of $1.8 million for the quarter ended December 31, 2010 and net income of $2.2 million for the year ended December 31, 2010 were impacted by:
  • The $11.0 million gain recorded as part of the TBOM acquisition.
  • Net Interest Margin of 4.05% for the quarter ended December 31, 2010 and 4.06% for the year ended December 31, 2010.
  • Provision for loan losses of $7.9 million for the quarter and $13.5 million for the year ended December 31, 2010.  The provision during the quarter was primarily a result of a number of resolutions during the quarter ended December 31, 2010, including the sale of a $7.3 million non-performing loan at approximately $4.8 million which closed after year end.  In addition, we charged off approximately $1.5 million related to three non-performing assets that were under contract to close after year end which at December 31, 2010 had a carrying value of approximately $2 million.
  • Acquisition and integration related expenses of approximately $2.2 million for the year ended December 31, 2010 which are not expected to affect future quarters.  Acquisition and integration related expenses for the quarter ended December 31, 2010 were approximately $1.6 million.

Management Comments:

"With the continuing economic situation in 2010 in our market, we saw both challenges and opportunities," said Warren Orlando, Chairman.  "We were pleased to acquire the $405 million in assets of The Bank of Miami, N. A. from the Federal Deposit Insurance Corporation on December 17, 2010.  We are now over $1.2 billion in assets with a strong capital base."

"The Bank of Miami integration is going very well.  Our new employees are doing an extraordinary job in serving and maintaining their customers," said Rudy E. Schupp, Chief Executive Officer.  "Our core business also remains strong and for the most part our customers continue to weather this difficult part of the business cycle. We have the desire, people, liquidity, capital and financial strength to continue to make quality loans in the communities we serve, including our expanded market."

"Our non-performing assets to total assets at year end was a relatively low 2.21%.  This reduction came at the cost of additional provisioning to deal with resolutions during the quarter and year ended December 31, 2010.  In addition, we continue to provide significant loan reserves to cover the challenges of appraisals, and the on-going weakness in our local economies," said John Marino, President and Chief Financial Officer.  "We remain vigilant and aggressive in monitoring asset quality and will continue to act quickly to resolve problem assets as they are identified.  Although too early to call a trend, we have also seen a stabilization of classified assets and past dues for the Company in the last three quarters."

For interested persons, the Company will be hosting an investor call to review the year end quarterly results at 4:30 p.m. Eastern Standard Time on Tuesday, February 15, 2011.  The number for the conference call is (800) 857-9849 (Passcode:  First United).  A replay of the conference call will be available beginning the evening of February 15, 2011 by dialing (800) 568-3652 (domestic), using the passcode 245245 until February 28, 2011.

Forward Looking Statements

Any non-historical statements in this press release are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995.  Such forward-looking statements are based on current plans and expectations that are subject to uncertainties and risks, which could cause 1st United's future results to differ materially.  The following factors, among others, could cause our actual results to differ: 1st United's ability to execute its growth strategy, risks relating to the integration of acquired companies that have previously been operated separately, challenges posed by the current economic environment, disruptions in global financial markets, credit risk of 1st United's customers, effects of the on-going correction in residential real estate prices and reduced levels of home sales, sufficiency of 1st United's allowance for loan losses, 1st United's ability to comply with the loss sharing agreements with the FDIC, changes in interest rates, access to funding sources, reliance on the services of executive management, competition for loans, deposits and investment dollars, reputational risk and social factors, changes in government regulations and legislation, increases in FDIC insurance assessments, geographic concentration of 1st United's markets, rapid changes in the financial services industry, exposure to intangible asset risk, hurricanes and other adverse weather events, and 1st United's ability to manage the risks involved in the foregoing.  Additional factors can be found in our filings with the SEC, which are available at the SEC's internet site (http://www.sec.gov).  Forward-looking statements in this press release speak only as of the date of the press release, and 1st United assumes no obligation to update forward-looking statements or the reasons why actual results could differ.

SOURCE 1st United Bancorp, Inc.