GlobeNewswire Inc | Jan 26, 2021 09:00AM EST

January 26, 2021

Fourth Quarter Highlights

-- Net income of $10.8 million, up 37.0% over Q3'20 and up 81.2% over Q4'19 -- Diluted earnings per common share of $0.92, up 37.3% over Q3'20 and up 80.4% over Q4'19 -- Pre-tax pre-provision income was $15.4 million, up 26.9% from Q3'20 and up 62.0% over Q4'19 -- Net interest margin of 4.31%, up 26 bps from Q3'20 and down 54 bps from Q4'19 -- Cost of funds of 0.27%, down 2 bps from Q3'20 and down 50 bps from Q4'19 -- Return on average assets of 1.88%, compared to 1.39% for Q3'20 and 1.40% for Q4'19 -- Return on average equity of 15.44%, compared to 11.57% for Q3'20 and 9.02% for Q4'19 -- Efficiency ratio of 44.4%, compared to 48.7% for Q3'20 and 54.3% for Q4'19 -- Provision for loan loss expense of $100 thousand, down $900 thousand from Q3'20 and down $1.1million from Q4'19 -- Total loans held for investment excluding Paycheck Protection Program ("PPP") loans increased $66.0 million from Q3'20, or 17.7% annualized -- Noninterest-bearing demand deposits increased $84.6 million, up 11.5% over Q3'20, up 31.0% over Q4'19 and represented 50.2% of total deposits at December 31, 2020 -- Tangible book value per share of $17.29, up $0.73 per share from Q3'20 and up $1.59 per share from Q4'19 -- Community bank leverage ratio (preliminary) was10.28% at December 31, 2020 -- Quarterly cash dividend of $0.25 per share

Full Year Highlights

-- Net income of $29.0 million, up 4.0% over 2019 -- Diluted EPS of $2.47 per share, up 4.7% over 2019 -- Pre-tax pre-provision income of $46.9 million, up 9.7% from 2019 -- Net interest margin of 4.28%, down 96 bps from 2019 -- Cost of funds of 0.38%, down 53 bps from 2019 -- Return on average assets of 1.38%, compared to 1.74% in 2019 -- Return on average equity of 10.70%, compared to 10.93% in 2019 -- Efficiency ratio of 49.8%, compared to 50.3% in 2019 -- Provision for loan loss expense of $5.9 million, up $3.1 million due primarily to COVID-19 and organic loan growth -- Total loans held for investment excluding PPP loans increased $186.0 million, an increase of 13.5% over 2019 -- Noninterest-bearing demand deposits increased $194.1 million, up 31.0% over 2019 -- Cash dividends paid totaling $1.00 per share

COVID-19 Updates

-- At December 31, 2020, PPP loans outstanding principal before net deferred fees totaled $326.7 million -- $73 million of PPP loans were forgiven by the SBA or repaid by the borrowers as of December 31, 2020 -- Originated 32 loans under the Main Street Lending Program totaling $172.2 million in principal and sold 95% participation interest to Main Street Lending Facilities, resulting in a gain on sale of $1.1 million for the year ended 2020 -- Continue leveraging technology to increase operational efficiencies and employee productivity

Cerritos, CA, Jan. 26, 2021 (GLOBE NEWSWIRE) -- First Choice Bancorp (NASDAQ: FCBP) ("us," "we," "our," or the "Company"), the holding company of First Choice Bank (the "Bank"), today reported net income of $10.8 million for the fourth quarter of 2020, or $0.92 per diluted share, compared to net income of $7.9 million, or $0.67 per diluted share, for the third quarter of 2020. Pre-tax pre-provision income was $15.4 million for the fourth quarter of 2020, an increase of $3.3 million, compared to the pre-tax pre-provision income of $12.1 million for the third quarter of 2020.

Net income for the full year of 2020 was $29.0 million, or $2.47 per diluted share, compared to net income for the full year 2019 of $27.8 million, or $2.36 per diluted share. Pre-tax pre-provision income was $46.9 million for the full year of 2020, an increase of $4.2 million, compared to the pre-tax pre-provision income of $42.7 million for the full year of 2019. Financial results for the full year of 2020 include a provision for loan losses of $5.9 million, compared to a $2.8 million provision for loan losses for the full year of 2019.

First Choice finished 2020 with strong fourth quarter results, bringing to close a year in which we navigated a challenging environment while delivering high-quality results, said Peter Hui, Chairman of the Board of the Company. We believe that we are entering 2021 well-positioned for continued profitable growth in this still uncertain environment. I am proud of how the First Choice team tirelessly worked together last year to be First in Speed, Service, and Solutions. The daily efforts of our employees and the pride they take in their work are what makes First Choice successful.

The fourth quarter demonstrated the strength of our bank as we continued to profitably grow core assets and improve our deposit franchise, said Robert M. Franko, President and CEO of the Company. We remain focused on becoming Southern Californias premier community bank, despite the pandemic's disruption to the economy and peoples lives. Last year, we used the Paycheck Protection and Main Street Lending programs to provide hundreds of millions of dollars of financial support to our clients and communities the Company serves. We expect to be involved in government programs again this year to help our local businesses weather the deleterious effects of the pandemic on their operations and employees. We know that uncertainty remains, however, we are optimistic about the future and we remain focused on profitable growth and continuing to deliver exceptional value to our clients and our shareholders.

STATEMENT OF INCOME

Net Interest Income

Net interest income for the fourth quarter of 2020 totaled $23.5 million, an increase of $1.8 million from the third quarter of 2020 due to higher interest income of $1.7 million, coupled with lower interest expense of $88 thousand. The increase in net interest income was due primarily to the accelerated accretion of deferred fee income from PPP loan forgiveness, organic loan growth, and lower cost of funds. Average loans decreased by $7.0 million due primarily to average PPP loan forgiveness of $27.0 million, which was offset by average organic loan growth of $20.0 million in the fourth quarter of 2020. The decrease in interest expense for the fourth quarter of 2020 was due primarily to run-off of higher-cost time deposits. Interest expense on interest-bearing deposits decreased $71 thousand, coupled with a decrease of $17 thousand on total borrowings. Interest expense on the PPP Liquidity Facility ("PPPLF") was $216 thousand for the fourth quarter of 2020, compared to $212 thousand in the third quarter of 2020 due to higher average borrowings.

Net Interest Margin

The net interest margin for the fourth quarter of 2020 increased 26 basis points to 4.31% from 4.05% for the third quarter of 2020. The increase in the net interest margin was due primarily to a 38 basis point increase in loan yields (including fees and discounts), coupled with a 2 basis point decrease in total funding costs. The increase in loan yields was due primarily to the accelerated net deferred fee income from PPP loan forgiveness in the fourth quarter of 2020. The accelerated net deferred fee income from PPP loan forgiveness totaled $1.8 million and contributed 32 basis points to the net interest margin and 37 basis points to the loan yield in the fourth quarter of 2020. There was no similar income in the third quarter of 2020. The net interest margin without PPP loans was 4.30% and 4.41% for the fourth and third quarter of 2020, respectively.

The decrease in the other interest-earning assets yield was driven by lower market interest rates. The weighted average loan yield for PPP loans was 4.62% including the accelerated accretion of deferred fee income from PPP loan forgiveness, or 2.68% without the accelerated accretion income. The yield on loans, excluding PPP loans, was stable at 5.28% and 5.31% for the fourth and third quarters of 2020, respectively.

The cost of funds decreased to 0.27% for the fourth quarter of 2020, compared to 0.29% for the third quarter of 2020, due primarily to lower market interest rates and run-off of higher-cost time deposits. Average noninterest-bearing demand deposits increased $64.2 million to $794.5 million and represented 49.7% of total average deposits for the fourth quarter of 2020, compared to $730.3 million, or 46.5% of total average deposits, for the third quarter of 2020. The increase in average noninterest-bearing demand deposits was attributable to core customer growth during the fourth quarter of 2020. The total cost of deposits decreased 3 basis points to 0.22% for the fourth quarter of 2020, compared to 0.25% for the third quarter of 2020.

Average borrowings and senior secured notes decreased $5.1 million and $2.4 million to $147.7 million and $2.3 million, respectively for the fourth quarter of 2020. These decreases were partially offset by a slight increase of $4.0 million in average PPPLF outstanding during the fourth quarter of 2020 with an average interest rate of 0.35%. The average cost of borrowings remained relatively stable at 0.55% for the fourth quarter of 2020. The average cost of senior secured notes was 3.50% for the fourth quarter of 2020.

Provision for Loan Losses

The provision for loan losses for the fourth quarter of 2020 decreased $900 thousand to $100 thousand, compared to $1.0 million for the third quarter of 2020. The decrease in the fourth quarter provision for loan losses was driven primarily by $333 thousand in net recoveries, a decrease in specific reserves of $98 thousand from special asset resolutions, and lower historical loss rates in the fourth quarter of 2020, partially offset with the increased reserves required for organic loan growth. With the recent extension of stay-at-home orders and an increase in reported COVID cases in the fourth quarter of 2020, the timing of an economic recovery continues to remain uncertain. Accordingly, the assumptions underlying the COVID-19 related qualitative factors we analyzed in determining the adequacy of the provision for loan losses included (a) uncertain and volatile macro-economic conditions caused by the pandemic; (b) a stabilized unemployment rate; and (c) the additional government stimulus package signed into law in December of 2020. No provision for loan losses was recognized on PPP loans as the SBA guarantees 100% of loan principal under the program.

Noninterest Income

Noninterest income for the fourth quarter of 2020 was $4.2 million, an increase of $2.3 million from $1.9 million for the third quarter of 2020. The increase was due primarily to higher gains on loan sales. SBA loans sold during the fourth quarter of 2020 totaled $36.7 million resulting in a gain on sale of $2.6 million, compared to $6.2 million resulting in a gain on sale of $504 thousand for the third quarter of 2020. Gain on loan sales for the fourth quarter of 2020 also included the sale of 95% participation interests in the Main Street loans resulting in gains of $660 thousand, compared to $486 thousand in the third quarter of 2020.

Noninterest Expense

Noninterest expense increased $793 thousand to $12.3 million for the fourth quarter of 2020 from $11.5 million for the third quarter of 2020. This increase was due primarily to higher salaries and employee benefit expenses and higher data processing expenses, partially offset by lower FDIC assessment fees.

The $758 thousand increase in salaries and employee benefits was due primarily to higher incentive accruals resulting from an increase in organic loan production and PPP loan incentives approved in the fourth quarter of 2020.

The efficiency ratio remained favorable and decreased to 44.4% in the fourth quarter of 2020, compared to 48.7% in the third quarter of 2020. The lower efficiency ratio in the fourth quarter of 2020 was driven primarily by higher revenues including gains from SBA and Main Street loan sales.

Income Taxes

Income tax expense was $4.5 million for the fourth quarter of 2020 compared to $3.3 million for the third quarter of 2020. The effective tax rate was 29.5% for the fourth quarter of 2020 and 29.3% for the third quarter of 2020. The effective tax rate for the full year of 2020 was 29.3%.

STATEMENT OF FINANCIAL CONDITION

Loan Portfolio

Total loans held for investment decreased $4.2 million in the fourth quarter of 2020 to $1.88 billion at December 31, 2020 due primarily to the $73 million of payments received from PPP loans in the fourth quarter of 2020, partially offset by organic loan growth and the Company's participation in the Main Street Lending program. Loans held for sale decreased $26.5 million to $9.9 million as $36.7 million of SBA 7a loans were sold in the fourth quarter of 2020. These sales were partially offset by SBA 7a loan originations held for sale of $10.1 million during the fourth quarter of 2020.

New loan commitments from organic growth and Main Street loans, totaled $202.9 million for the fourth quarter of 2020, compared to $226.1 million for the third quarter of 2020 and included $107.9 million in construction and commercial real estate loans, $43.8 million in commercial and industrial loans, and $51.2 million of SBA loans.

Total unfunded loan commitments increased $42.4 million to $433.3 million at December 31, 2020 from $390.9 million at September30, 2020 due to new commitments and higher repayments, partially offset by higher utilization on existing lines of credit. During the fourth quarter of 2020, new unfunded commitments totaled $77.7 million and borrower drawdown on existing lines of credit totaled $63.4 million.

PPP Loans

PPP loans, net of deferred fees of $6.6 million, totaled $320.1 million at December 31, 2020, compared to $390.2 million at September30, 2020. The net deferred fees are being accreted to income based on the two-year contractual maturity, and are accelerated to interest income upon forgiveness or early payoff. At December 31, 2020, the Company had not originated any PPP loans having a 5-year contractual maturity. For loans originated under the SBA's PPP loan program, interest and principal payment on these loans were originally deferred for six months following the funding date, during which time interest would continue to accrue. On October 7, 2020, the Paycheck Protection Program Flexibility Act of 2020 (Flexibility Act) extended the deferral period for borrower payments of principal, interest, and fees on all PPP loans to the date that the SBA remits the borrowers loan forgiveness amount to the lender (or, if the borrower does not apply for loan forgiveness, 10 months after the end of the borrowers loan forgiveness covered period). The extension of the deferral period under the Flexibility Act automatically applied to all PPP loans.

The SBA began approving forgiveness applications and making payments as forgiveness was approved in the fourth quarter of 2020. At December 31, 2020, approximately $73 million of PPP loans were forgiven by the SBA or repaid by the borrowers. The net deferred fees of $1.8 million was accelerated to income at the time of SBA forgiveness or borrower repayments. The Company plans to participate in the First Draw and Second Draw PPP Loan Program signed into law on December 27, 2020 as part of the Economic Aid to Hard-Hit Small Businesses, Nonprofits and Venues Act (Economic Act), which was included in the Consolidated Appropriations Act, 2021.

Main Street Lending Program

The Company participated in the Main Street Lending Program in the second half of 2020. During the fourth quarter of 2020, the Bank originated 28 loans under the Main Street Lending Program totaling $102.4 million in principal and sold 95% participation interests totaling $97.3 million to the Main Street Facilities, LLC, a special purpose vehicle ("SPV"), resulting in a gain on sale of $660 thousand. For the full year of 2020, the Bank originated 32 loans under the Main Street Lending Program totaling $172.2 million in principal and sold 95% participation interests totaling $163.6 million to the SPV, resulting in a gain on sale of $1.1 million. The Bank retains servicing rights with respect to the Main Street loans it participated to the SPV for which it receives a 25-basis point fee annually. The program expired on January 8, 2021.

Deposits

Total deposits increased $74.2 million from the prior quarter to $1.63 billion at December 31, 2020 due primarily to an increase in noninterest-bearing deposit accounts, partially offset by decreases in interest-bearing nonmaturity deposits and time deposit accounts.

At December 31, 2020, total noninterest-bearing demand deposits increased $84.6 million to $820.7 million and represented 50.2% of total deposits, compared to $736.1 million and 47.2% of total deposits at September30, 2020. This increase was due primarily to the increase in core customer deposits, partially offset by the decrease in PPP deposits as customers used the PPP funds during the fourth quarter of 2020. Interest-bearing nonmaturity deposits decreased $10.0 million due primarily to a decrease in brokered deposits, partially offset by increases in core customer interest checking and money market deposit accounts.

Borrowings

At December 31, 2020, FHLB borrowings decreased $5.0 million to $145.0 million in the fourth quarter of 2020, compared to $150.0 million at September30, 2020. The Company's borrowings under the PPPLF totaled $204.7 million, a decrease of $48.4 million in the fourth quarter of 2020, compared to $253.1 million at September30, 2020. The decreases were due primarily to the additional liquidity received from PPP loan forgiveness and the growth in noninterest-bearing deposits during the fourth quarter of 2020. At December 31, 2020, senior secured notes totaled $2.0 million, a decrease of $2.4 million in the fourth quarter of 2020, compared to $4.4 million at September30, 2020. The Company was able to paydown the senior secured notes due to increased earnings in the fourth quarter of 2020.

Credit Quality

Nonperforming loans decreased to $6.4 million at December 31, 2020, compared to $13.0 million at September30, 2020, representing 0.34% and 0.69% of total loans held for investment, respectively. The decrease in nonperforming loans was due primarily to the resolution of three loan relationships totaling $6.0 million during the fourth quarter of 2020. A single non-accrual loan of $202 thousand was classified as a new non-accrual troubled-debt restructurings ("TDR") during the fourth quarter of 2020. There were no loans over 90 days past due that were still accruing interest at December 31, 2020. Substandard loans increased $373 thousand to $18.4 million, compared to $18.0 million at September30, 2020, due primarily to seven loans totaling $7.4 million from three loan relationships being downgraded to substandard, partially offset by the resolution of nonperforming loans and payoffs. Net recoveries for the fourth quarter of 2020 were $333 thousand, or 0.07% of average loans on an annualized basis, compared to net charge-offs of $88 thousand or 0.02% of average loans on an annualized basis for the third quarter of 2020. Nonperforming assets totaled $6.4 million at December 31, 2020, compared to $13.0 million at September30, 2020, and represented 0.28% and 0.58% of total assets, respectively.

Loan delinquencies (30-89 days past due) totaled $54 thousand at December 31, 2020, compared to $1.2 million at September30, 2020.

The allowance for loan losses increased 2.3% to $19.2 million and represented 1.02% of total loans held for investment and 297.35% of nonperforming loans at December 31, 2020, compared to 0.99% and 144.21% at September30, 2020, respectively. The allowance for loan losses as a percentage of total loans held for investment excluding PPP loans, was 1.23% at December 31, 2020. At December 31, 2020, the net carrying value of acquired loans totaled $164.5 million and included a remaining net discount of $3.9 million. The discount is available to absorb losses on the acquired loans and represented 2.4% of the net carrying value of acquired loans and 0.21% of total gross loans held for investment.

CAPITAL POSITION

Capital Ratios

The Bank opted into the Community Bank Leverage Ratio ("CBLR") framework beginning with the Call Report filed for the first quarter of 2020. The CBLR replaces the risk-based and leverage capital requirements in the generally applicable capital rules. Although, the minimum CBLR was originally set at 9%, on April 23, 2020, the federal banking regulators, implementing the applicable provisions of the CARES Act, issued interim rules which modified the CBLR framework so that: (i) beginning in the second quarter 2020 and until the end of the year, a banking organization that has a leverage ratio of 8% or greater and meets certain other criteria may elect to use the CBLR framework; and (ii) community banking organizations will have until January 1, 2022, before the CBLR requirement is re-established at greater than 9%. Under these interim rules, the minimum CBLR was set at 8% beginning in the second quarter and for the remainder of calendar year 2020, 8.5% for calendar year 2021, and 9% thereafter. The interim rules also maintain a two-quarter grace period for a qualifying community banking organization whose leverage ratio falls no more than 1% below the applicable community bank leverage ratio. In addition, assets originated under the PPP and covered loans pledged under the PPPLF are deducted from the average total consolidated assets for purposes of calculating the CBLR. However, such assets are included in total consolidated assets for purposes of determining the eligibility to opt into the CBLR framework.

At December 31, 2020, the Bank's preliminary CBLR ratio was 10.28% which exceeded the regulatory capital requirements of the CBLR framework and, accordingly, the Bank is considered to be well-capitalized.

Stock Repurchase Program

The Company suspended the stock repurchase program on March 17, 2020. There were no repurchases of common stock since the second quarter of 2020. The remaining number of shares authorized to be repurchased under this program was 695,489 shares at December 31, 2020.

Sale of Rowland Heights Branch

During the fourth quarter of 2020, the Company entered into an agreement to sell its Rowland Heights branch office, consisting primarily of deposits of approximately $29 million at December 31, 2020; no loans will be sold as part of the transaction. The parties have received the requisite regulatory approvals and non-objections to consummate the transaction which is expected to close in January of 2021.

About First Choice Bancorp

First Choice Bancorp, headquartered in Cerritos, California, is the sole shareholder of and the registered bank holding company for, First Choice Bank. As of December 31, 2020, First Choice Bancorp had total consolidated assets of $2.28 billion. First Choice Bank, also headquartered in Cerritos, California, is a community-based financial institution that serves primarily commercial and consumer clients in diverse communities and specializes in loans to small- to medium-sized businesses and private banking clients, commercial and industrial loans, and commercial real estate loans. First Choice Bank is a Preferred Small Business Administration (SBA) Lender. First Choice Bank conducts business through nine full-service branches and two loan production offices located in Los Angeles, Orange and San Diego Counties. Founded in 2005, First Choice Bank has quickly become a leading provider of financial services that enable our customers to grow, maintain strength, and achieve their business objectives. We strive to surpass our clients expectations through our efficiency, personalized services and financial solutions and professionalism and are committed to being First in Speed, Service, and Solutions. First Choice Bank is a strong believer in social justice and equality and is proud of its cultural- and gender-diverse workforce. As of December 31, 2020, more than 74% of the Company's total workforce identified as ethnic minorities and more than 66% of its workforce and more than 50% of its senior management identified as female. First Choice Bancorp stock is traded on the Nasdaq Capital Market under the ticker symbol FCBP.

First Choice Banks website is www.FirstChoiceBankCA.com.

Non-GAAP Financial Measures

This press release contains certain non-GAAP financial measures in addition to results presented in accordance with GAAP. The Company uses certain non-GAAP financial measures to provide meaningful supplemental information regarding the Company's results of operations and financial condition and to enhance investors' overall understanding of such results of operations and financial condition, permit investors to effectively analyze financial trends of our business activities, and enhance comparability with peers across the financial services sector. These non-GAAP financial measures are not a substitute for GAAP measures and should be read in conjunction with the Companys GAAP financial information. A reconciliation of GAAP financial measures to non-GAAP financial measures is included in the accompanying financial tables.

Forward-Looking Statements

In addition to historical information, certain matters set forth herein constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including forward-looking statements relating to managements beliefs, projections and assumptions concerning future results and events. Forward-looking statements include descriptions of managements plans or objectives for future operations, products or services, and forecasts of the Companys revenues, earnings or other measures of economic performance. As well, forward-looking statements may relate to future outlook and anticipated events, such as the Company's plans and protocols with regard to managing potential impacts related to the COVID-19 virus, the Company's strategy to help keep its workforce and local communities safe, the Company's business continuity protocols and the potential impact on operations related to COVID-19, and the Company's ability to successfully advance its development and expansion projects and achieve its growth objectives. These forward-looking statements involve risks and uncertainties, based on the beliefs and assumptions of management and on the information available to management at the time that this presentation was prepared and can be identified by the fact that they do not relate strictly to historical or current facts. They often include the words or phrases such as aim, can, "may," "could," "predict," "should," "will," "would," "believe," "anticipate," "estimate," "expect," hope, "intend," "plan," "potential," project, "will likely result," "continue," "seek," shall, possible, "projection," optimistic, and "outlook," and variations of these words and similar expressions or the negative version of those words or phrases.

Forward-looking statements involve substantial risks and uncertainties, many of which are difficult to predict and are generally beyond our control. Many factors could cause actual results to differ materially from those contemplated by these forward-looking statements. The Company does not undertake, and specifically disclaims any obligation, to update any forward-looking statements to reflect occurrences or unanticipated events or circumstances after the date of such statements except as required by law. Any statements about future operating results, such as those concerning accretion and dilution to the Company's earnings or shareholders, are for illustrative purposes only, are not forecasts, and actual results may differ. Risks and uncertainties that could cause our financial performance to differ materially from our goals, plans, expectations and projections expressed in forward-looking statements include those set forth in our filings with the SEC, including under Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2019 as may be supplemented and/or amended by our Quarterly Reports on Form 10-Q as filed subsequent thereto.

ContactsFirst Choice BancorpRobert M. Franko, 562.345.9241President, Chief Executive Officer and Chief Financial Officer

First Choice BancorpKhoi D. Dang, Esq., 562.263.8336Executive Vice President and General Counsel

First Choice BankMag Wangsuwana, 562.263.8340Senior Vice President and Chief Financial Officer

First Choice Bancorp and Subsidiary

Financial Highlights and Selected Ratios (unaudited):

At or for the Three Months Ended At or for the Year Ended December 31, September December 31, December 31, December 31, 2020 30, 2019 2020 2019 2020 (audited) (dollars in thousands, except per share amounts) Total interest and $ 24,873 $ 23,154 $ 21,953 $ 91,615 $ 90,354 dividend incomeTotal interest 1,340 1,428 2,745 6,879 12,092 expenseNet interest income 23,533 21,726 19,208 84,736 78,262 Total noninterest 4,194 1,943 1,583 8,607 7,700 incomeTotal net interestincome and 27,727 23,669 20,791 93,343 85,962 noninterest incomeTotal noninterest 12,321 11,528 11,284 46,468 43,240 expensePre-taxpre-provision 15,406 12,141 9,507 46,875 42,722 income ^(1)Provision for loan 100 1,000 1,200 5,900 2,800 lossesIncome before taxes 15,306 11,141 8,307 40,975 39,922 Income taxes 4,512 3,260 2,349 12,024 12,074 NET INCOME $ 10,794 $ 7,881 $ 5,958 $ 28,951 $ 27,848 Total assets $ 2,283,115 $ 2,256,342 $ 1,690,324 $ 2,283,115 $ 1,690,324 Total loans held 1,880,777 1,884,930 1,374,675 1,880,777 1,374,675 for investmentTotal loans heldfor investment 1,560,687 1,494,715 1,374,675 1,560,687 1,374,675 excluding PPP loansNoninterest-bearing 820,711 736,118 626,569 820,711 626,569 depositsTotal deposits 1,634,158 1,559,912 1,313,693 1,634,158 1,313,693 Dividends declared $ 0.25 $ 0.25 $ 0.25 $ 1.00 $ 0.85 per common shareNet income per $ 0.92 $ 0.67 $ 0.51 $ 2.47 $ 2.36 share-dilutedReturn on average 1.88 % 1.39 % 1.40 % 1.38 % 1.74 %assetsReturn on average 15.44 % 11.57 % 9.02 % 10.70 % 10.93 %equityReturn on averagetangible common 21.52 % 16.31 % 12.95 % 15.10 % 15.90 %equity ^(1)Net interest margin 4.31 % 4.05 % 4.85 % 4.28 % 5.24 %Average loan yield 5.15 % 4.77 % 6.21 % 5.15 % 6.54 %Cost of deposits 0.22 % 0.25 % 0.71 % 0.34 % 0.81 %Cost of funds 0.27 % 0.29 % 0.77 % 0.38 % 0.91 %Efficiency ratio ^ 44.4 % 48.7 % 54.3 % 49.8 % 50.3 %(1)Noninterest-bearingdeposits to total 50.2 % 47.2 % 47.7 % 50.2 % 47.7 %depositsEquity to assets 12.30 % 12.08 % 15.49 % 12.30 % 15.49 %ratioTangible commonequity to tangible 9.18 % 8.90 % 11.34 % 9.18 % 11.34 %asset ratio ^(1)Book value per $ 23.98 $ 23.28 $ 22.50 $ 23.98 $ 22.50 shareTangible book value $ 17.29 $ 16.56 $ 15.70 $ 17.29 $ 15.70 per share ^(1)

(1)Non-GAAP measure. See GAAP to non-GAAP Reconciliation.

First Choice Bancorp and Subsidiary

Condensed Consolidated Balance Sheets (unaudited)

December 31, September December 31, 2020 30, 2019 2020 (audited) (dollars in thousands, except per share amounts)ASSETS Cash and due from banks $ 18,011 $ 23,611 $ 27,359 Interest-bearing deposits at 218,370 157,925 134,442 other banksTotal cash and cash 236,381 181,536 161,801 equivalentsInvestment securities, 42,027 37,999 26,653 available-for-saleInvestment securities, 1,358 1,680 5,056 held-to-maturityEquity securities, at fair 2,798 2,792 2,694 valueRestricted stock 12,999 12,999 12,986 investments, at costLoans held for sale 9,932 36,474 7,659 Total loans held for 1,880,777 1,884,930 1,374,675 investmentAllowance for loan losses (19,167 ) (18,734 ) (13,522 )Total loans held for 1,861,610 1,866,196 1,361,153 investment, netAccrued interest receivable 9,569 11,500 5,451 Premises and equipment 2,149 2,341 1,542 Servicing asset 2,860 2,368 3,202 Deferred taxes 7,385 6,095 6,163 Goodwill 73,425 73,425 73,425 Core deposit intangible 4,956 5,149 5,728 Other assets 15,666 15,788 16,811 TOTAL ASSETS $ 2,283,115 $ 2,256,342 $ 1,690,324 LIABILITIES AND SHAREHOLDERS? EQUITYDeposits: Noninterest-bearing demand $ 820,711 $ 736,118 $ 626,569 Money market, interest 639,630 649,613 514,366 checking and savingsTime deposits 173,817 174,181 172,758 Total deposits 1,634,158 1,559,912 1,313,693 Borrowings 145,000 150,000 90,000 Paycheck Protection Program 204,719 253,140 ? Liquidity FacilitySenior secured notes 2,000 4,400 9,600 Accrued interest payable and 16,497 16,419 15,226 other liabilitiesTotal liabilities 2,002,374 1,983,871 1,428,519 Total shareholders? equity 280,741 272,471 261,805 TOTAL LIABILITIES AND $ 2,283,115 $ 2,256,342 $ 1,690,324 SHAREHOLDERS? EQUITY Shares outstanding 11,705,684 11,705,878 11,635,531 Book value per share $ 23.98 $ 23.28 $ 22.50 Tangible book value per $ 17.29 $ 16.56 $ 15.70 share ^(1)

(1)Non-GAAP measure. See GAAP to non-GAAP Reconciliation.

First Choice Bancorp and Subsidiary

Condensed Consolidated Statements of Income (unaudited)

Three Months Ended Year Ended December 31, December 31, September December 31, 2020 30, 2019 2020 2019 2020 (dollars in thousands, except per share amounts) INTEREST and DIVIDEND INCOMEInterest and fees $ 24,411 $ 22,671 $ 20,741 $ 89,210 $ 86,207 on loansInterest oninvestment 154 180 194 777 853 securitiesInterest ondeposits at other 129 103 805 825 2,405 financialinstitutionsDividends on FHLB 179 200 213 803 889 and other stockTotal interest and 24,873 23,154 21,953 91,615 90,354 dividend incomeINTEREST EXPENSE Interest onsavings, interest 344 382 1,222 2,153 4,998 checking and moneymarket accountsInterest on time 555 588 1,200 2,994 5,273 depositsInterest on 205 207 176 985 1,143 borrowingsInterest on PPP 216 212 ? 540 ? Liquidity FacilityInterest on senior 20 39 147 207 678 secured notesTotal interest 1,340 1,428 2,745 6,879 12,092 expenseNet interest 23,533 21,726 19,208 84,736 78,262 incomeProvision for loan 100 1,000 1,200 5,900 2,800 lossesNet interestincome after 23,433 20,726 18,008 78,836 75,462 provision for loanlossesNONINTEREST INCOME Gain on sale of 3,286 990 947 4,653 3,674 loansService chargesand fees on 468 495 363 1,965 1,942 deposit accountsNet servicing fees 201 228 87 644 850 Other income 239 230 186 1,345 1,234 Total noninterest 4,194 1,943 1,583 8,607 7,700 incomeNONINTEREST EXPENSESalaries and 7,884 7,126 6,139 28,626 25,691 employee benefitsOccupancy and 1,168 1,137 1,893 4,476 5,406 equipmentData processing 1,017 955 903 3,653 2,864 Professional fees 462 492 396 1,875 1,633 Office, postageand 300 274 252 1,121 1,032 telecommunicationsDeposit insuranceand regulatory 318 386 47 963 392 assessmentsLoan related 84 59 165 644 694 Customer service 60 81 568 841 1,755 relatedAmortization ofcore deposit 192 193 258 771 848 intangibleOther expenses 836 825 663 3,498 2,925 Total noninterest 12,321 11,528 11,284 46,468 43,240 expenseIncome before 15,306 11,141 8,307 40,975 39,922 taxesIncome taxes 4,512 3,260 2,349 12,024 12,074 Net income $ 10,794 $ 7,881 $ 5,958 $ 28,951 $ 27,848 Net income per $ 0.92 $ 0.67 $ 0.51 $ 2.47 $ 2.36 share - dilutedWeighted average 11,620,582 11,612,270 11,607,176 11,617,780 11,687,089 shares - diluted

First Choice Bancorp and Subsidiary

Average Balance Sheets and Yield Analysis

Three Months Ended December 31, 2020 September 30, 2020 December 31, 2019 Average Interest Yield / Average Interest Yield / Average Interest Yield / Balance Income / Cost Balance Income / Cost Balance Income / Cost Expense Expense Expense (dollars in thousands) Interest-earning assets: Loans (1) $ 1,885,451 $ 24,411 5.15 % $ 1,892,450 $ 22,671 4.77 % $ 1,325,748 $ 20,741 6.21 %Investment securities 46,292 154 1.32 % 43,154 180 1.66 % 34,483 194 2.23 %Deposits at other financial 223,939 129 0.23 % 184,606 103 0.22 % 198,082 805 1.61 %institutionsRestricted stock investments 15,056 179 4.73 % 14,534 200 5.47 % 14,078 213 6.00 %and other bank stocksTotal interest-earning assets 2,170,738 24,873 4.56 % 2,134,744 23,154 4.31 % 1,572,391 21,953 5.54 % Noninterest-earning assets 117,467 119,717 116,193 Total assets $ 2,288,205 $ 2,254,461 $ 1,688,584 Interest-bearing liabilities: Interest checking $ 276,539 $ 119 0.17 % $ 279,945 $ 111 0.16 % $ 135,732 $ 324 0.95 %Money market accounts 317,173 214 0.27 % 338,970 260 0.31 % 301,552 841 1.11 %Savings accounts 32,655 11 0.13 % 31,639 11 0.14 % 30,243 57 0.75 %Time deposits 78,775 134 0.68 % 81,837 201 0.98 % 131,603 567 1.71 %Brokered time deposits 97,749 421 1.71 % 107,347 387 1.43 % 103,094 633 2.44 %Total interest-bearing 802,891 899 0.45 % 839,738 970 0.46 % 702,224 2,422 1.37 %depositsBorrowings 147,663 205 0.55 % 152,762 207 0.54 % 37,826 176 1.85 %Paycheck Protection Program 244,638 216 0.35 % 240,602 212 0.35 % ? ? N/A Liquidity FacilitySenior secured notes 2,252 20 3.50 % 4,620 39 3.36 % 11,171 147 5.22 %Total interest-bearing 1,197,444 1,340 0.45 % 1,237,722 1,428 0.46 % 751,221 2,745 1.45 %liabilities Noninterest-bearing liabilities:Demand deposits 794,542 730,306 658,654 Other liabilities 18,170 15,530 16,793 Shareholders? equity 278,049 270,903 261,916 Total liabilities and $ 2,288,205 $ 2,254,461 $ 1,688,584 shareholders? equity Net interest spread $ 23,533 4.11 % $ 21,726 3.85 % $ 19,208 4.09 %Net interest margin 4.31 % 4.05 % 4.85 % Total deposits $ 1,597,433 $ 899 0.22 % $ 1,570,044 $ 970 0.25 % $ 1,360,878 $ 2,422 0.71 %Total funding sources $ 1,991,986 $ 1,340 0.27 % $ 1,968,028 $ 1,428 0.29 % $ 1,409,875 $ 2,745 0.77 %

(1)Average loans include net discounts and net deferred loan fees and costs. Interest income on loans includes the accretion of net deferred loan fees of $3.4million, of which $1.8 million related to the accelerated accretion of deferred fee income from PPP loans for the three months ended December 31, 2020. For the three months ended September30, 2020 and December 31, 2019, the accretion of net deferred loan fees were $1.7million and $237 thousand, and there was no accelerated accretion of deferred fee income from PPP loans. In addition, interest income includes $287 thousand, $835 thousand and $806 thousand of discount accretion on loans acquired in a business combination, including the interest recognized on the payoff of PCI loans, for the three months ended December 31, 2020, September30, 2020 and December 31, 2019.

First Choice Bancorp and Subsidiary

Average Balance Sheets and Yield Analysis (continued)

Year Ended December 31, 2020 2019 Average Interest Yield Average Interest Yield Balance Income / / Cost Balance Income / / Cost Expense Expense (dollars in thousands) Interest-earning assets:Loans ^(1) $ 1,731,049 $ 89,210 5.15 % $ 1,317,345 $ 86,207 6.54 %Investment 42,064 777 1.85 % 35,883 853 2.38 %securitiesDeposits at otherfinancial 188,345 825 0.44 % 124,506 2,375 1.91 %institutionsFederal funds sold/ ? ? N/A 1,243 30 2.41 %resale agreementsRestricted stockinvestments and 14,663 803 5.48 % 13,973 889 6.36 %other bank stocksTotalinterest-earning 1,976,121 91,615 4.64 % 1,492,950 90,354 6.05 %assets Noninterest-earning 119,663 110,650 assetsTotal assets $ 2,095,784 $ 1,603,600 Interest-bearing liabilities:Interest checking $ 241,275 $ 592 0.25 % $ 120,494 $ 1,268 1.05 %Money market 318,216 1,481 0.47 % 278,075 3,498 1.26 %accountsSavings accounts 30,674 80 0.26 % 30,608 232 0.76 %Time deposits 92,242 1,117 1.21 % 149,921 2,647 1.77 %Brokered time 97,102 1,877 1.93 % 107,958 2,626 2.43 %depositsTotalinterest-bearing 779,509 5,147 0.66 % 687,056 10,271 1.49 %depositsBorrowings 134,696 985 0.73 % 49,914 1,143 2.29 %Paycheck ProtectionProgram Liquidity 153,679 540 0.35 % ? ? N/A FacilitySenior secured 5,401 207 3.83 % 11,933 678 5.68 %notesTotalinterest-bearing 1,073,285 6,879 0.64 % 748,903 12,092 1.61 %liabilities Noninterest-bearing liabilities:Demand deposits 735,129 586,508 Other liabilities 16,849 13,419 Shareholders? 270,521 254,770 equity Total liabilitiesand shareholders? $ 2,095,784 $ 1,603,600 equity Net interest spread $ 84,736 4.00 % $ 78,262 4.44 %Net interest margin 4.28 % 5.24 % Total deposits $ 1,514,638 $ 5,147 0.34 % $ 1,273,564 $ 10,271 0.81 %Total funding $ 1,808,414 $ 6,879 0.38 % $ 1,335,411 $ 12,092 0.91 %sources

(1)Average loans include net discounts and net deferred loan fees and costs. Interest income on loans includes the accretion of net deferred loan fees of $6.7 million, of which $1.8 million related to the accelerated accretion of deferred fee income from PPP loans for the year ended December 31, 2020. For the year ended December 31, 2019, the accretion of net deferred loan fees were $958 thousand and there was no accelerated accretion of deferred fee income from PPP loans. In addition, interest income includes $2.2 million and $4.6 million of discount accretion on loans acquired in a business combination, including the interest recognized on the payoff of PCI loans, for the years ended December 31, 2020 and 2019.

First Choice Bancorp and Subsidiary

Loan Composition

December 31, 2020 September 30, 2020 December 31, 2019 Amount Percentage Amount Percentage Amount Percentage of Total of Total of Total (dollars in thousands) Constructionand land $ 229,394 12.1 % $ 215,109 11.3 % $ 249,504 18.1 %developmentReal estate: Residential 27,683 1.5 % 30,067 1.6 % 43,736 3.2 %Commercialreal estate - 165,581 8.8 % 159,603 8.4 % 171,595 12.5 %owner occupiedCommercialreal estate - 533,270 28.2 % 528,201 27.9 % 423,823 30.8 %non-owneroccupiedCommercial and 370,814 19.6 % 361,170 19.0 % 309,011 22.5 %industrialSBA loans ^(1) 562,842 29.8 % 602,407 31.8 % 177,633 12.9 %Consumer 1 ? % 8 ? % 430 ? %Total loansheld forinvestment, $ 1,889,585 100.0 % $ 1,896,565 100.0 % $ 1,375,732 100.0 %net ofdiscountsNet deferred (8,808 ) (11,635 ) (1,057 ) loan fees ^(1)Total loansheld for $ 1,880,777 $ 1,884,930 $ 1,374,675 investmentAllowance for (19,167 ) (18,734 ) (13,522 ) loan lossesTotal loansheld for $ 1,861,610 $ 1,866,196 $ 1,361,153 investment,net

(1)Includes PPP loans with total outstanding principal of $326.7 million and $400.1 million and net deferred fees of $6.6 million and $9.9 million at December 31, 2020 and September30, 2020.

Total loans held for investment

December 31, September December 31, 2020 30, 2019 2020 (dollars in thousands) Gross loans held for $ 1,897,599 $ 1,904,019 $ 1,385,142 investment ^(1)Unamortized net (8,014 ) (7,454 ) (9,410 )discounts ^(2)Net unamortizeddeferred origination (8,808 ) (11,635 ) (1,057 )fees ^(1)Total loans held for $ 1,880,777 $ 1,884,930 $ 1,374,675 investment

-- Includes PPP loans with total outstanding principal of $326.7 million and $400.1 million and net deferred fees of $6.6 million and $9.9 million at December 31, 2020 and September30, 2020. -- Unamortized net discounts include discounts related to the retained portion of SBA loans and net discounts on Non-PCI acquired loans. At December 31, 2020, net discounts related to loans acquired in the PCB acquisition totaled $3.9 million that is expected to be accreted into interest income over a weighted average remaining life of 3.8 years. At September30, 2020 and December 31, 2019, net discounts related to loans acquired in the PCB acquisition totaled $4.3 million and $6.0 million.

Allowance for Loan losses

Three Months Ended Year Ended December 31, December September December 31, 30, 31, 2020 2019 2020 2020 2019 (dollars in thousands) Balance,beginning of $ 18,734 $ 17,822 $ 12,340 $ 13,522 $ 11,056 periodProvision for 100 1,000 1,200 5,900 2,800 loan lossesCharge-offs (5 ) (194 ) (18 ) (777 ) (579 )Recoveries 338 106 ? 522 245 Netrecoveries 333 (88 ) (18 ) (255 ) (334 )(charge-offs)Balance, end $ 19,167 $ 18,734 $ 13,522 $ 19,167 $ 13,522 of period Annualizednetrecoveries 0.07 % (0.02 ) (0.01 ) (0.01 ) (0.03 )(charge-offs) % % % %to averageloans

Credit Quality (1)

December September December 31, 30, 31, 2020 2020 2019 (dollars in thousands) Accruing loans past due 90 days or more $ ? $ ? $ ? Non-accrual loans 6,099 12,847 11,107 Troubled debt restructurings on 347 144 158 non-accrualTotal nonperforming loans 6,446 12,991 11,265 Foreclosed assets ? ? ? Total nonperforming assets $ 6,446 $ 12,991 $ 11,265 Troubled debt restructurings - on $ 319 $ 320 $ 321 accrual Nonperforming loans as a percentage of 0.34 % 0.69 % 0.82 %total loans held for investmentNonperforming assets as a percentage of 0.28 % 0.58 % 0.67 %total assetsAllowance for loan losses as apercentage of total loans held for 1.02 % 0.99 % 0.98 %investmentAllowance for loan losses as apercentage of total loans held for 1.23 % 1.25 % 0.98 %investment excluding PPP loansAllowance for loan losses as a 297.35 % 144.21 % 120.04 %percentage of nonperforming loansAllowance for loan losses as a 297.35 % 144.21 % 120.04 %percentage of nonperforming assetsAccruing loans held for investment past $ 54 $ 1,233 $ 1,767 due 30 - 89 days

(1) Excludes purchased credit impaired loans with a net carrying value of $761 thousand, $792 thousand and $1.1 million at December 31, 2020, September30, 2020 and December 31, 2019.

GAAP to Non-GAAP Reconciliation

The following tables present a reconciliation of non-GAAP financial measures to GAAP measures for: (1) efficiency ratio, (2) pre-tax pre-provision income, (3) average tangible common equity, (4) return on average tangible common equity, (5) tangible common equity, (6) tangible assets, (7) tangible common equity to tangible asset ratio, and (8) tangible book value per share. We believe the presentation of certain non-GAAP financial measures provides useful information to assess our consolidated financial condition and consolidated results of operations and to assist investors in evaluating our financial results relative to our peers. These non-GAAP financial measures complement our GAAP reporting and are presented below to provide investors and others with information that we use to manage the business each period. Because not all companies use identical calculations, the presentation of these non-GAAP financial measures may not be comparable to other similarly titled measures used by other companies. These non-GAAP measures should be taken together with the corresponding GAAP measures and should not be considered a substitute of the GAAP measures.

Three Months Ended Year Ended December 31, December September December 31, 2020 30, 31, 2019 2020 2019 2020 (dollars in thousands) Efficiency RatioNoninterestexpense $ 12,321 $ 11,528 $ 11,284 $ 46,468 $ 43,240 (numerator) Net interest 23,533 21,726 19,208 84,736 78,262 incomePlus:Noninterest 4,194 1,943 1,583 8,607 7,700 incomeTotal netinterestincome and $ 27,727 $ 23,669 $ 20,791 $ 93,343 $ 85,962 noninterestincome(denominator)Efficiency 44.4 % 48.7 % 54.3 % 49.8 % 50.3 %ratio Pre-taxpre-provision incomeNet interest $ 23,533 $ 21,726 $ 19,208 $ 84,736 $ 78,262 incomeNoninterest 4,194 1,943 1,583 8,607 7,700 incomeTotal netinterestincome and 27,727 23,669 20,791 93,343 85,962 noninterestincomeLess:Noninterest 12,321 11,528 11,284 46,468 43,240 expensePre-taxpre-provision $ 15,406 $ 12,141 $ 9,507 $ 46,875 $ 42,722 income Return onAverageAssets, Equity,TangibleEquityNet income $ 10,794 $ 7,881 $ 5,958 $ 28,951 $ 27,848 Average 2,288,205 2,254,461 1,688,584 2,095,784 1,603,600 assetsAverageshareholders? 278,049 270,903 261,916 270,521 254,770 equityLess: Averageintangible 78,501 78,696 79,336 78,790 79,631 assetsAveragetangible $ 199,548 $ 192,207 $ 182,580 $ 191,731 $ 175,139 common equity Return onaverage 1.88 % 1.39 % 1.40 % 1.38 % 1.74 %assetsReturn onaverage 15.44 % 11.57 % 9.02 % 10.70 % 10.93 %equityReturn onaverage 21.52 % 16.31 % 12.95 % 15.10 % 15.90 %tangiblecommon equity

As of December 31, September December 31, 2020 30, 2019 2020 (dollars in thousands, except per share amounts)Tangible Common Equity Ratio/ Tangible Book Value Per ShareShareholders? equity $ 280,741 $ 272,471 $ 261,805 Less: Intangible assets 78,381 78,574 79,153 Tangible common equity $ 202,360 $ 193,897 $ 182,652 Total assets $ 2,283,115 $ 2,256,342 $ 1,690,324 Less: Intangible assets 78,381 78,574 79,153 Tangible assets $ 2,204,734 $ 2,177,768 $ 1,611,171 Equity to assets ratio 12.30 % 12.08 % 15.49 %Tangible common equity to 9.18 % 8.90 % 11.34 %tangible asset ratio Shares outstanding 11,705,684 11,705,878 11,635,531 Book value per share $ 23.98 $ 23.28 $ 22.50 Tangible book value per share $ 17.29 $ 16.56 $ 15.70