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1st Enterprise Bank Announces Record Quarterly Net Income of $1.5 Million for the 1st Quarter of 2014

LOS ANGELES, CA -- (Marketwired) -- 04/16/14 -- 1st Enterprise Bank ("the Bank") (OTCQB: FENB), an independent full-service commercial bank serving the Southern California business community, reported net income of $1.5 million for the quarter ending March 31, 2014.

Financial Highlights

  • Net income for the quarter ending March 31, 2014 was $1.5 million, a 27% increase over the prior quarter and a 48% increase over the prior year
  • Diluted earnings per common share were $.35 for the quarter, compared to $.28 in the fourth quarter of 2013 and $.24 in the first quarter of 2013
  • Total Assets grew by $74 million, from $702 million at March 31, 2013 to $776 million at March 31, 2014
  • Total Loans outstanding grew by $88 million, from $419 million at March 31, 2013 to $507 million at March 31, 2014
  • Total Deposits grew by $50 million, from $601 million at March 31, 2013 to $652 million at March 31, 2014
  • Income before taxes, loan loss provision and gain on sale of securities was $2.3 million for the quarter, a 16% increase over the prior year

John Black, CEO, stated, "We continue to be very pleased with the Bank's earnings and asset growth. Once again I am excited to announce record quarterly earnings, as well as loan growth that exceed 20% over the last 12 months." Brian Horton, President, added, "This growth validates our customers' appreciation for the importance of relationship banking and is the result of the efforts of a very talented staff."

For the three months ended March 31, 2014, net interest income before provision was $6.1 million, an increase of 17% compared to the first quarter of 2013 and an increase of 5% compared to the fourth quarter of 2013. The year-over-year growth in net interest income was the result of both growth in earning assets and expansion in net interest margin. Earning assets were $704 million in the first quarter of 2014, an 8% or $51 million increase over the prior year. The net interest margin was 3.50% during the first quarter of 2014, compared to 3.23% for the prior year. The increase in net interest margin was the result of a .27% increase in the earning asset yield over the prior year. The growth in net interest income over the prior quarter was mostly the result of an increase in the net interest margin from 3.30% to 3.50%. This increase resulted from the yield on earning assets increasing by 0.20% from the prior quarter as loan balances grew from 68% of earning assets to 73% and the yield on investment securities increased by .26%. There was no provision for loan loss during the quarter, compared to a provision of $542,000 in the first quarter of 2013 and a provision of $710,000 in the fourth quarter of 2013. There were no loan charge-offs during the first quarter of 2014 or the fourth quarter of 2013, compared to net loan charge-offs during the first quarter of 2013 that totaled $349,000. As of March 31, 2014 there was one non-accrual loan that totaled $1.7 million.

Non-interest income, excluding gain on sale, was $900,000 for the quarter, which was a 20% increase year over year, but declined by $124,000 sequentially due to lower loan related income. Growth in non-interest income from the prior year was generally due to increased deposit related fees.

Non-interest expense increased by $720,000 or 18% over the prior year and increased by $128,000 or 3% over the prior quarter. The year over year increase is mostly the result of continued investment in staffing levels to support current and future customer growth. The sequential increase in non-interest expense was due to a $112,000 increase in the Bank's off-balance sheet reserves due to growth in unused loan commitments.

About 1st Enterprise Bank
Founded in 2006, 1st Enterprise Bank is a full service independent commercial banking institution, whose highly experienced bankers personally serve Southern California entrepreneurial businesses, professional firms and nonprofit organizations, along with their owners and key managers. Headquartered in the Los Angeles financial district, with full service regional banking offices in Irvine and Ontario and an LPO in Woodland Hills, 1st Enterprise Bank offers a full range of credit and depository services, with special emphasis on superior customer service, sophisticated cash management services and direct access to bank decision makers. Customers work directly with a dedicated Relationship Manager, a seasoned professional who understands their unique challenges serving as a sounding board and an active participant in their client's success. For more information on 1st Enterprise Bank, please visit www.1stenterprisebank.com.

Forward-Looking Statement:
This news release contains statements that are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on current expectations, estimates and projections about 1st Enterprise Bank's business based, in part, on assumptions made by management. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements due to numerous factors, including those described above and the following: 1st Enterprise Bank's timely implementation of new products and services, technological changes, changes in consumer spending and savings habits and other risks discussed from time to time in 1st Enterprise Bank's reports and filings with banking regulatory agencies. In addition, such statements could be affected by general industry and market conditions and growth rates, and general domestic and international economic conditions. Such forward-looking statements speak only as of the date on which they are made, and 1st Enterprise Bank does not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date of this release.

1st Enterprise Bank
Condensed Statements of Financial Condition
                                          Unaudited    Audited    Unaudited
                                         ----------  ----------  ----------
Assets                                    3/31/2014  12/31/2013   3/31/2013
                                         ----------  ----------  ----------
  Cash and due from banks                $   33,270  $   12,126      16,393
  Interest earning deposits in other
   banks                                     29,461       5,793      14,560
                                         ----------  ----------  ----------
    Total cash and cash equivalents          62,731      17,919      30,953

  Certificates of deposit in other banks          -           -       2,490
  Investment securities - available-for-
   sale                                     113,071     148,809     164,580
  Investment securities - held-to-
   maturity                                  61,769      62,118      55,753
  Loans, net of deferred loan fees          513,360     505,258     425,009
  Allowance for loan losses                  (6,519)     (6,517)     (5,703)
                                         ----------  ----------  ----------
  Loans, net of allowance for loan
   losses                                   506,841     498,741     419,306
  Bank owned life insurance                  16,538      16,411      16,017
  Premises and equipment, net                 2,372       2,453       2,700
  Accrued interest receivable and other
   assets                                    12,590      13,550       9,985
                                         ----------  ----------  ----------
    Total Assets                         $  775,912  $  760,001  $  701,784
                                         ==========  ==========  ==========

  Noninterest-bearing demand deposits    $  321,500  $  315,888  $  268,584
  Interest bearing transaction accounts      43,770      39,358      35,250
  Money market and savings accounts         270,219     277,035     278,610
  Time deposits                              16,083      10,518      18,996
                                         ----------  ----------  ----------
    Total Deposits                          651,572     642,799     601,440
  Federal Home Loan Bank borrowings          50,000      44,000      30,500
  Other liabilities                           3,253       3,923       3,484
                                         ----------  ----------  ----------
    Total Liabilities                       704,825     690,722     635,424

Shareholders' Equity
  Serial Preferred Stock                     16,380      16,380      16,380
  Common Stock                               43,378      43,142      43,048
  Retained Earnings                          11,245       9,781       5,918
  Accumulated other comprehensive income         84         (24)      1,014
                                         ----------  ----------  ----------
    Total Shareholders' Equity               71,087      69,279      66,360
                                         ----------  ----------  ----------

Total Liabilities and Shareholders'
 Equity                                  $  775,912  $  760,001  $  701,784
                                         ==========  ==========  ==========

1st Enterprise Bank
Condensed Statements of Operations               Three Months Ended
$000                                                  Unaudited
                                          3/31/2014  12/31/2013   3/31/2013
                                         ----------  ----------  ----------
Interest Income
  Interest and fees on loans             $    5,293  $    5,036  $    4,428
  Interest on investment securities             972         944         952
  Other interest income                           3           8          10
                                         ----------  ----------  ----------
    Total interest income                     6,268       5,988       5,390
Interest Expense                                191         189         192
                                         ----------  ----------  ----------
Net Interest Income                           6,077       5,799       5,198

Provision for loan losses                         -         710         542
                                         ----------  ----------  ----------

Net Interest Income After Provision for
 Loan Losses                                  6,077       5,089       4,656

Non-interest Income
Service charges, fees and other income          900       1,024         749
Gain on sale of investment sercurities           41           -           -
                                         ----------  ----------  ----------
    Total non-interest Income                   941       1,024         749

Non-interest Expenses
  Compensation and benefit expenses           2,876       2,846       2,431
  Occupancy and equipment expenses              379         393         374
  Data processing                               268         269         256
  Professional and legal                        401         382         328
  Other operating expenses                      761         667         575
                                         ----------  ----------  ----------
    Total non-interest expense                4,685       4,557       3,964

Income Before Income Taxes                    2,334       1,557       1,442
                                         ----------  ----------  ----------

Provision for income taxes                      829         369         425
                                         ----------  ----------  ----------

Net Income                               $    1,505  $    1,187  $    1,017
                                         ==========  ==========  ==========

Preferred dividends & Warrant
 amortization                                    41          41          41
                                         ----------  ----------  ----------

Net Income Applicable to Common
 Shareholders                            $    1,464  $    1,146  $      976
                                         ==========  ==========  ==========

Earnings Per Share
Basic earnings per share                 $     0.38  $     0.30  $     0.26

Diluted earnings per share               $     0.35  $     0.28  $     0.24

Average shares outstanding                3,803,389   3,798,213   3,793,150

Average fully diluted shares              4,182,521   4,149,582   4,062,894

Total Shares outstanding at end of
 period                                   3,840,938   3,823,939   3,815,089

Capital Ratios
Tier 1 leverage ratio                           9.5%        9.3%        9.4%

Tier 1 risk-based capital ratio                11.1%       11.0%       11.9%

Total risk-based capital ratio                 12.2%       12.0%       13.0%

Book value per share                     $    14.24  $    13.83  $    13.10

Performance Ratios
Return on average assets                       0.81%       0.63%       0.59%

Return on average common equity               10.98%       8.57%       7.95%

Net interest margin                            3.50%       3.30%       3.23%

Cost of Funds                                  0.11%       0.11%       0.12%

Efficiency ratio                              66.80%      66.41%      66.70%

Average Balances
Total Assets                             $  751,031  $  742,247  $  695,576

Earning Assets                              704,112     696,826     653,274

Total Loans                                 512,559     477,186     415,003

Total Securities                            188,384     209,826     230,343

Total Deposits                              634,225     656,444     606,208

Common Equity                                54,075      53,091      49,812

John C. Black

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