First American International Corp. Announces Fourth Quarter and Annual Earnings for 2013

First American International Corp. Announces Fourth Quarter and Annual Earnings 
for 2013 
NEW YORK, NY -- (Marketwired) -- 04/03/14 --  First American
International Corp. (the "Company"), the holding company for First
American International Bank (the "Bank") today reported net income
for the year ended December 31, 2013 of $2,910,000. Earnings per
share available to common shareholders were $1.00 basic and $.99 per
diluted share. 
Net Income and Results of Operations 
The Company today reported net income of $59,000, or ($0.06) per
diluted share, after deduction of $186,000 in Troubled Asset Relief
Program ("TARP") dividends and discount accretion, for the three
months ended December 31, 2013, and $2.9 million, or $.99 per diluted
share, after deduction of $751,000 in TARP dividends and discount
accretion, for the twelve months ended at that date. This compares to
net income of $3.7 million, or $1.63 per diluted share, for the three
months ended December 31, 2012 and $9.1 million, or $3.90 per diluted
share, for the twelve months ended at that date, also after deduction
of TARP dividends and discount accretion.  
Earnings per share, without deducting quarterly dividends and
discount accretion on the Company's $17 million Troubled Asset Relief
Program ("TARP") preferred stock obligation, equates to $0.03 per
diluted share for the quarter-ended December 31, 2013 and $1.33 per
diluted share for the twelve months ended at that date, compared to
$1.71 and $4.23 for the quarter and year ending December 31, 2012. 
"We are pleased with the progress we have made in 2013, especially
the reduction in non-performing assets, the development of our
capacity to originate commercial real estate loans and our conversion
to a new core service provider. However, we recognize there is still
much more work to do to enhance shareholder value, including further
developing our customer base and managing operating expenses," said
Mark Ricca, President and Chief Executive Officer.  
Net Interest Income
 Net interest income for the quarter, before
provision for loan losses, was $6.2 million, an increase of $33,000,
or 0.5% from the prior year quarter. Net interest income for the
year, before provision for loan losses, was $23.4 million. This was a
decrease of $2.3 million, or 9.0% from the prior year. The decline is
principally due to a decline in the interest rate spread and to a
lesser extent a decline in loan balances. For the year ended December
31, 2013 interest rate spread of 4.40% was down 50 basis points from
4.90% for the year ended December 31, 2012; the net interest margin
of 4.63% was down 49 basis points from 5.12% for the year ended
December 31, 2012. The Bank's loan portfolio of $354.6 million at
December 31, 2013 was $605,000, or 0.2% lower than December 31, 2012.
This is partially offset by a 26.5% increase from the prior year in
the Bank's other interest earning assets to $151.3 million. 
Provision for Loan Losses
 The Bank took a $488,000 provision during
the third quarter of 2013, principally caused by the charge offs of
two commercial lines of credit. In 2012, the Bank had a negative
provision of $4.5 million due to an improvement in asset quality and
fewer loan losses. 
Non-interest Income
 Non-interest income was $2.8 million for the
quarter ended December 31, 2013, compared to $2.3 million for the
same quarter last year. Non-interest income for the year was $8.4
million compared to $9.3 million last year. The main reason for the
year over year reduction in non-interest income was a decrease in
gains on sales of loans and real estate owned of $2.0 million, offset
by an improvement of $900,000 in service and transaction fees and a
decrease in loss on sale of securities of $213,000 in 2013. 
Return on average assets decreased to .54% compared to 1.58% the
prior year. Return on average equity decreased to 4.49% compared to
20.99% last year. Excluding the $4.5 million negative provision for
the allowance for loan and lease losses return on average assets and
return on average equity would have been 1.15% and 15.3%,
respectively in 2012. 
Non-interest Expense
 Non-interest expenses were $26.2 million in
2013 compared to $22.9 million in 2012, an increase of $3.3 million,
or 14.4%. The total increase is mainly due to increases in salaries
and benefits of $1.1 million, general and administrative expenses of
$1.1 million and occupancy expenses of $1.1 million. Salaries and
benefits increased due to increased staffing levels, general raises
and increased health insurance costs. General and administrative
expenses increased due to an increase in data processing expenses of
$432,000 attributable to changing our core processor, an increase in
loan processing fees of $916,000, and an increase in other expenses
of $289,000, which were offset by a decrease in FDIC assessment
expense of $400,000 and a decrease in professional fees of $141,000. 
Balance Sheet Highlights 
Assets
 Total assets at December 31, 2013
were $552.6 million, an increase of $25.7 million, or 4.9%, versus
December 31, 2012. Loans receivable, net were $354.6 million, a
decrease of $605,000 compared to last year. The decrease is due
principally to an $88.0 million decrease in construction, commercial
real estate, multifamily and commercial and industrial loans
(collectively "Commercial Loans"), which was partially offset by an
$80.5 million increase in 10/1 and 7/1 adjustable rate 1-4 family
loans. Commercial mortgage loans receivable decreased as the Company
continued to focus on resolving asset quality issues. Other interest
earning assets increased by $31.7 million, or 26.5%, as the proceeds
from borrower payments and sales of commercial mortgage loans
provided funds that were invested in investment quality securities
and bank deposits. 
Asset Quality
 Non-accrual loans at December 31, 2013 were $10.4
million compared to $22.4 million last year. Total delinquent loans
were $9.9 million compared to $24.7 million at December 31, 2012. The
Company monitors delinquent loans closely and continues to work on
improving asset quality on an overall basis as shown by the decrease
in non-performing assets. The allowance for loan losses was $7.2
million, or 2.04% of total loans compared to $10.6 million, or 2.90%,
at December 31, 2012. The reduction in the allowance was principally
due to net charge offs of $3.9 million associated in large part with
the sale of $13.2 million in non-performing loans during the fourth
quarter, offset by a provision of $488,000.  
Deposits
 Deposits at
December 31, 2013 were $411.3 million, a decrease of $30.3 million,
or 6.9% since December 31, 2012. Certificates of deposit were $186.2
million, a decrease of $36.5 million, or 16.4%, from December 31,
2012. Savings and money market accounts decreased $5.3 million, or
3.8%. Demand deposits increased $12.0 million, or 16.0%. NOW accounts
decreased $563,000, or 20.9%. Despite the Company maintaining
competitive pricing for deposit products throughout 2013, interest
rates remained at a relatively low level, causing customers to seek
higher returns in other investment vehicles. 
Borrowings
 Federal
Home Loan Bank Borrowings increased by $51.0 million to $61.0 million
in 2013. These advances were taken to partially match fund the Bank's
10/1 and 7/1 1-4 family residential loan originations. The remaining
portion of borrowings consists of the Company's trust preferred
borrowings originated in 2004.  
Stockholders' Equity
 Stockholders' equity was $65.3 million, or
11.8% of total assets, a $2.7 million, or 4.4% increase from December
31, 2012. 
About First American International Corp
 First American International
Corp. is the holding company for First American International Bank, a
community development financial institution ("CDFI") and a minority
depository institution ("MDI") with nine branches serving principally
the Chinese-American communities in Manhattan, Queens and Brooklyn in
New York City.  
See accompanying unaudited financial data tables for additional
information. 
The information contained herein is intended to provide the reader
with historical information about the financial results of First
American International Corp. It is not intended to provide guidance
as to forward looking statements or projections of future results. A
variety of factors could cause our actual results and experiences to
differ materially from historical results and anticipated results
based on historical results. 


 
                                                                            
                                                                            
                     First American International Corp.                     
                      Financial Highlights (unaudited)                      
                                                                            
Balance Sheet Items                                       $ thousands       
                                                     12/31/2013   12/31/2012
                                                   ------------ ------------
Total assets                                            552,623      526,952
                                                                            
Loans                                                                       
Real estate - commercial                                136,891      214,509
Real estate - residential                               222,366      142,866
Commercial and industrial                                 2,703        8,699
Consumer and installment                                    586          539
                                                   ------------ ------------
Loans receivable, gross                                 362,546      366,613
                                                                            
Allowance for possible loan losses                        7,226       10,618
Other interest earning assets                           151,335      119,608
                                                                            
Deposits                                                                    
Demand deposits                                          87,013       75,009
NOW accounts                                              2,136        2,700
Money market and savings                                135,962      141,291
Certificate of deposit                                  186,200      222,661
                                                   ------------ ------------
Total deposits                                          411,311      441,661
                                                                            
Borrowings                                               68,217       17,217
Stockholders' equity                                     65,333       62,761
                                                                            
                                                                            
                                                                            
Summary Income Statement           Year-to-date       For the quarter ended 
                               12/31/13   12/31/12    12/31/13    12/31/12  
                              ---------- ----------  ----------  ---------- 
Interest income                   26,827     30,103       7,132       7,121 
Interest expense                   3,402      4,372         907         929 
                              ---------- ----------  ----------  ---------- 
  Net interest income             23,425     25,731       6,225       6,192 
Provision for loan losses            488     (4,509)          -      (4,509)
  Net interest income after                                                 
                              ---------- ----------  ----------  ---------- 
    provision for loan losses     22,937     30,240       6,225      10,701 
Non-interest income                8,024      8,874       2,485       1,932 
Non-interest expenses             26,198     22,896       9,067       6,323 
BEA grant                            393        415         323         415 
                              ---------- ----------  ----------  ---------- 
  Income before income taxes       5,156     16,633         (34)      6,725 
Income taxes                       2,245      7,507         (93)      3,037 
                              ---------- ----------  ----------  ---------- 
  Net income                       2,911      9,126          59       3,688 
                              ========== ==========  ==========  ========== 
                                                                            
                                                                            
                                                                            
                       Performance ratios (Unaudited)                       
                                                                            
                                  Year-to-date            Quarter ended     
                               12/31/13    12/31/12    12/31/13    12/31/12 
                             ----------  ----------  ----------  ---------- 
Return on average assets           0.54%       1.58%       0.01%       2.84%
-----------------------------                                               
                                                                            
Return on average net worth        4.49%      20.99%       0.09%      34.67%
                                                                            
Average interest earning                                                    
 assets/bearing liabilities      135.00%     126.00%     134.00%     128.66%
                                                                            
Net interest rate spread           4.40%       4.90%       4.63%       4.70%
                                                                            
Net interest margin                4.63%       5.12%       4.87%       4.91%
                                                                            
Net interest income after                                                   
 provision/total expense          89.41%     132.00%      68.66%     168.90%
                                                                            
Non-interest income to total                                                
 revenue                          23.88%      26.50%      28.24%      30.25%
                                                                            
Non-interest expense to total                                               
 revenue                          74.33%      65.40%      91.22%      71.37%
                                                                            
Non-interest expense to                                                     
 average assets                    4.90%       4.31%       6.68%       4.76%
                                                                            
Net Worth and Asset Quality                                                 
 Ratios                                                                     
-----------------------------                                               
                                                                            
Average net worth to average                                                
 total assets                     12.14%      10.75%      12.03%      10.75%
                                                                            
Total net worth to assets end                                               
 of period                        11.82%      11.88%      11.82%      11.88%
                                                                            
Non-performing assets to                                                    
 total assets                      1.88%       5.25%       1.88%       5.25%
                                                                            
Non-performing loans to total                                               
 loans                             2.93%       7.51%       2.93%       7.51%
                                                                            
Allowance for loan losses to                                                
 total loans                       2.04%       2.90%       2.04%       2.90%
                                                                            
Allowance for loan losses to                                                
 NPLs                             69.45%      38.60%      69.45%      38.60%
                                                                            
Risk based total capital                                                    
 ratio (bank)                     22.56%      18.80%      22.56%      18.80%
                                                                            
Capital, Book Value and                                                     
 Earnings Per Share                                                         
-----------------------------                                               
                                                                            
Tier 1 risk based capital                                                   
 (bank)                           21.30%      17.53%      21.30%      17.53%
                                                                            
Leverage ratio (bank)             13.05%      12.91%      13.05%      12.91%
                                                                            
Book value per share basic   $    22.28  $    21.49  $    22.28  $    21.49 
                                                                            
Diluted EPS available to                                                    
 Common Shareholders         $     0.99  $     3.90  $    (0.06) $     1.63 

  
David A. Chin
Chief Financial Officer
(718) 567-8788 ext. 1388 
 
 
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