NEW YORK, NY / ACCESSWIRE / July 9, 2018 / First American International Corp. (OTCQB: FAIT) (www.faib.com) (the "Company" or "FAIC"), the holding company for First American International Bank (the "Bank"), today reported that it had revised its previously reported net income for the quarter ended March 31, 2018, due to the need to include certain additional merger-related expenses in net income. These expenses were not previously included as a result of a delay in internal processing of certain merger-related invoices.
Net Income and Results of Operations
After further consideration of the accounting treatment of expenses pertaining to the agreement and plan of merger with RBB Bancorp ("RBB"), a California bank holding company, which RBB and the Company jointly announced on April 23, 2018, the Company has determined that it is appropriate to include an additional $712,000 of noninterest merger-related expenses, resulting in an aggregate amount of $885,000 of merger-related expenses in the quarter ended March 31, 2018. This increases reported noninterest expense by $712,000, reduces income before income taxes by the same amount and reduces income tax expense by $150,000, resulting in net income available to common shareholders of $2.8 million, instead of $3.4 million, as previously reported. Earnings per share available to common shareholders were $1.27 basic and $1.26 fully diluted, instead of $1.52 and $1.51, respectively, as previously reported.
The return on average assets was 1.26% for the quarter ended March 31, 2018, versus 1.51% as previously reported. The return on average common equity was 17.48%, versus 20.96% as previously reported, for the quarter ended March 31, 2018.
Balance Sheet Highlights
Stockholders' equity was $82.1 million, or 9.23% of total assets, at March 31, 2018, instead of $82.7 million, or 9.30% of total assets. Tangible book value at March 31, 2018 was $29.61 per share, basic, and $29.44 per share, fully diluted, reduced from $29.87 per share, basic, and $29.70 per share fully diluted, as previously reported.
Cautionary Statements Regarding Forward-Looking Information
This press release contains a number of forward-looking statements. These statements may be identified by the use of such words as "anticipate," "believe," "could," "estimate," "expect," "intend," "may," "outlook," "plan," "potential," "predict," "project," "should," "will," "would," and similar terms and phrases, including references to assumptions.
Forward-looking statements are based on various assumptions and analyses made by us in light of our management's experience and perception of historical trends, current conditions and expected future developments, as well as other factors we believe are appropriate under the circumstances. These statements are not guarantees of future performance and are subject to risks, uncertainties and other factors (many of which are beyond our control) that could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. These factors include, without limitation, the following: the timing and occurrence or non-occurrence of events that may be subject to circumstances beyond our control; increases in competitive pressure among financial institutions or from non-financial institutions; changes in the interest rate environment; changes in deposit flows, loan demand or collateral values; changes in accounting principles, policies or guidelines; changes in general economic conditions, either nationally or locally in some or all areas in which we do business, or conditions in the real estate or securities markets or the banking industry; legislative or regulatory changes, including those that may be implemented by the new administration in Washington, D.C.; supervision and examination by our regulators; effects of changes in existing U.S. government or government-sponsored mortgage programs; our ability to successfully implement technological changes; our ability to successfully consummate new business initiatives; litigation or other matters before regulatory agencies, whether currently existing or commencing in the future; or our ability to implement enhanced risk management policies, procedures and controls commensurate with shifts in our business strategies and regulatory expectations.
We have no obligation to update any forward-looking statements to reflect events or circumstances after the date of this press release.
For further information, please contact Michael Lowengrub, Chief Financial Officer, at (718) 567-8788 Ext 1388.
First American International Corp.
Amended Financial Highlights (unaudited)
($ in thousands) | ||||||||||||
As Previously Reported | As Amended | |||||||||||
Balance Sheet Items | 3/31/2018 | 3/31/2018 | 3/31/2017 | |||||||||
Cash and cash equivalents | ||||||||||||
Cash and due from banks - noninterest bearing | $ | 5,095 | $ | 5,095 | $ | 4,917 | ||||||
Due from banks - interest bearing | 122,057 | 122,057 | 48,579 | |||||||||
Federal funds sold | 556 | 556 | 66 | |||||||||
Total cash and cash equivalents | 127,708 | 127,708 | 53,562 | |||||||||
Time deposits with banks | 3,800 | 3,800 | 3,797 | |||||||||
Securities | ||||||||||||
Securities available for sale | 16,205 | 16,205 | 26,387 | |||||||||
Securities held to maturity | 26,565 | 26,565 | 28,352 | |||||||||
Total securities | 42,770 | 42,770 | 54,739 | |||||||||
Loans | ||||||||||||
Loans held for sale | 1,707 | 1,707 | 1,939 | |||||||||
Real estate - residential | 435,495 | 435,495 | 442,461 | |||||||||
Real estate - commercial | 259,239 | 259,239 | 274,686 | |||||||||
Commercial and industrial | 790 | 790 | 1,062 | |||||||||
Consumer and installment | 297 | 297 | 369 | |||||||||
Unearned loan fees | (2,655) | (2,655) | (3,141) | |||||||||
Loans receivable, gross | 693,166 | 693,166 | 715,437 | |||||||||
Allowance for loan losses | (9,518) | (9,518) | (9,329) | |||||||||
Loans, net | 683,648 | 683,648 | 706,108 | |||||||||
Bank premises and equipment | 6,251 | 6,251 | 6,933 | |||||||||
Federal Home Loan Bank stock | 7,276 | 7,276 | 7,776 | |||||||||
Accrued interest receivable | 2,648 | 2,648 | 2,766 | |||||||||
Mortgage servicing rights | 10,504 | 10,504 | 7,129 | |||||||||
Other assets | 3,307 | 3,307 | 5,523 | |||||||||
Total Assets | $ | 889,618 | $ | 889,618 | $ | 850,272 | ||||||
Demand deposits | $ | 160,036 | $ | 160,036 | $ | 135,592 | ||||||
NOW accounts | 4,669 | 4,669 | 4,233 | |||||||||
Money market and savings | 160,566 | 160,566 | 159,118 | |||||||||
Certificates of deposit | 324,233 | 324,233 | 306,895 | |||||||||
Total deposits | 649,505 | 649,505 | 605,838 | |||||||||
Borrowings | 142,500 | 142,500 | 155,000 | |||||||||
Junior subordinated debentures | 7,217 | 7,217 | 7,217 | |||||||||
Accrued interest payable | 2,118 | 2,118 | 1,649 | |||||||||
Accounts payable and other liabilities | 5,572 | 6,135 | 6,299 | |||||||||
Total liabilities | 806,911 | 807,474 | 776,003 | |||||||||
Stockholders' equity | 82,707 | 82,144 | 74,269 | |||||||||
Total Liabilities and Stockholders' Equity | $ | 889,618 | $ | 889,618 | $ | 850,272 | ||||||
First American International Corp.
Amended Financial Highlights (unaudited)
($ in thousands except per share data) | ||||||||||||
Summary Income Statement | For the Quarter Ended | |||||||||||
As Previously Reported | As Amended | |||||||||||
3/31/2018 | 3/31/2018 | 3/31/2017 | ||||||||||
Interest income | ||||||||||||
Real estate - residential | $ | 5,224 | $ | 5,224 | $ | 4,695 | ||||||
Real estate - commercial | 3,116 | 3,116 | 3,085 | |||||||||
Other | 1,053 | 1,053 | 777 | |||||||||
Total Interest income | 9,393 | 9,393 | 8,557 | |||||||||
Interest expense | ||||||||||||
Interest-bearing core deposits | 250 | 250 | 201 | |||||||||
Interest-bearing certificates of deposit | 1,125 | 1,125 | 902 | |||||||||
Interest on borrowings | 732 | 732 | 737 | |||||||||
Total Interest expense | 2,107 | 2,107 | 1,840 | |||||||||
Net interest income | 7,286 | 7,286 | 6,717 | |||||||||
Provision for loan losses | - | - | 79 | |||||||||
Net interest income after | ||||||||||||
provision for loan losses | 7,286 | 7,286 | 6,639 | |||||||||
Non-interest income | 3,885 | 3,885 | 1,778 | |||||||||
Non-interest expenses | 6,633 | 7,345 | 5,999 | |||||||||
Income before income taxes | 4,539 | 3,826 | 2,418 | |||||||||
Provision for income taxes | 973 | 823 | 827 | |||||||||
Net income | $ | 3,566 | $ | 3,003 | $ | 1,591 | ||||||
Less: Preferred stock dividends and discount accretion | (209) | (209) | (203) | |||||||||
Net income available to common shareholders | $ | 3,357 | $ | 2,794 | $ | 1,388 | ||||||
For the Quarter Ended | ||||||||||||
As Previously Reported | As Amended | |||||||||||
3/31/2018 | 3/31/2018 | 3/31/2017 | ||||||||||
Performance Ratios | ||||||||||||
Return on average assets | 1.51 | % | 1.26 | % | 0.66 | % | ||||||
Return on average common equity | 20.96 | % | 17.48 | % | 9.63 | % | ||||||
Average interest earning assets/interest bearing liabilities | 135.5 | % | 135.5 | % | 133.5 | % | ||||||
Net interest rate spread | 3.01 | % | 3.01 | % | 2.98 | % | ||||||
Net interest margin | 3.35 | % | 3.35 | % | 3.26 | % | ||||||
Yield on loans | 4.77 | % | 4.77 | % | 4.58 | % | ||||||
Average cost of deposits | 1.13 | % | 1.13 | % | 0.95 | % | ||||||
Net interest income after provision/total expense | 109.86 | % | 99.20 | % | 110.66 | % | ||||||
Non-interest income to total revenue | 29.26 | % | 29.26 | % | 17.21 | % | ||||||
Non-interest expense to total revenue | 49.95 | % | 55.31 | % | 58.05 | % | ||||||
Non-interest expense to average assets | 2.99 | % | 3.31 | % | 2.85 | % | ||||||
Net Worth and Asset Quality Ratios | ||||||||||||
Average total equity to average total assets | 9.12 | % | 9.11 | % | 8.78 | % | ||||||
Total equity to assets end of period | 9.30 | % | 9.23 | % | 8.73 | % | ||||||
Non-performing assets to total assets | 0.30 | % | 0.30 | % | 0.37 | % | ||||||
Non-performing loans to total loans | 0.38 | % | 0.38 | % | 0.44 | % | ||||||
Allowance for loan losses to total loans | 1.37 | % | 1.37 | % | 1.30 | % | ||||||
Allowance for loan losses to NPLs | 357.43 | % | 357.43 | % | 299.10 | % | ||||||
Book Value and Earnings Per Share | ||||||||||||
Total risk based capital ratio (Bank) | 17.14 | % | 17.14 | % | 15.76 | % | ||||||
Tier 1 risk based capital (Bank) | 15.88 | % | 15.88 | % | 14.51 | % | ||||||
Leverage ratio (Bank) | 9.95 | % | 9.95 | % | 9.55 | % | ||||||
Tangible book value per share - basic | $ | 29.87 | $ | 29.61 | $ | 26.26 | ||||||
Diluted EPS available to common shareholders | $ | 1.51 | $ | 1.26 | $ | 0.63 | ||||||
SOURCE: First American International Corp.
