NEW YORK, NY--(Marketwired - Dec 19, 2013) - First American International Corp. (the "Company"), the holding company for First American International Bank (the "Bank") provided the following selected financial data for the quarter ended September 30, 2013.

Earnings Summary

Earnings and Earnings Per Share
The Company today reported net income of $570,000, or $0.26 per diluted share, for the three months ended September 30, 2013, and $2.8 million, or $1.30 per diluted share, for the nine months ended at that date. This compares to net income of $1.2 million, or $0.53 per diluted share, for the three months ended June 30, 2013; net income of $2.2 million, or $1.03 per diluted share, for the three months ended September 30, 2012; and $5.4 million or $2.53 per diluted share, for the nine months ended at that date.

Earnings per share, after deducting quarterly dividends of $85,000 on the Company's $17 million Troubled Asset Relief Program ("TARP") preferred stock obligation and discount accretion of $99,000, equates to $0.18 per diluted share for the quarter-ended September 30, 2013 and $1.05 per diluted share for the nine months ended at that date. The discount accretion is the result of the Company's original TARP Capital Purchase Program ("CPP") Preferred Stock being exchanged for TARP Community Development Capital Initiative ("CDCI") Preferred Stock in August of 2010. The CDCI Preferred Stock carries a lower coupon (2%) than the CPP Preferred Stock (5%). The discount to the Bank of having a lower coupon liability was captured on the balance sheet by reducing additional paid-in capital and increasing retained earnings and thereby increasing earnings per share at the time of the exchange. Subsequent to the exchange, this discount will accrete over an 8-year period. The monthly accretion reduces retained earnings which thereby reduces the monthly net income available to common stockholders. Approximately $2 million of the discount remains.

Net Interest Income
Net interest income for the quarter, before provision for loan losses, was $5.5 million, a decrease of $312,000 or 5.4% from the prior quarter and a decrease of $1.2 million or 17.5% for the prior year quarter. The decline is principally due to a decline in the interest rate spread and to a lesser extent a decline in loan balances. The third quarter 2013 interest rate spread of 4.15% was down 90 basis points from the 5.05% in third quarter 2012; the net interest margin of 4.35% was down 92 basis points from 5.27% in the same period in 2012. The Bank's loan portfolio at quarter end of $352.5 million is $9.1 million or 2.5% lower than the prior year period. This is partially offset by a 18.5% increase from the prior year in the Bank's other interest earning assets to $146.3 million with an average yield of 1.2% at September 30, 2013.

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.

Non-interest Income
Fees and other non-interest income contributed $2.2 million for the quarter-ended September 30, 2013, compared to $1.7 million for the quarter ended June 30, 2013 and $2.7 million for the quarter-ended September 30, 2012. The main reason for the reduction in non-interest income was gains on sales of loans in the third quarter of 2012 of $1.4 million compared to only $549,000 in the same period in 2013. The Company also had $494,000 of gains on sales of real estate acquired in foreclosure in the third quarter of 2012, but no such gains in the third quarter of 2013. Partially offsetting these declines was a $462,000 increase in servicing fee income, principally due to an increase in the value of mortgage servicing rights.

Non-interest Expense
Operating expenses were $6.2 million for the third quarter of 2013 compared to $5.4 million for the second quarter of 2013 and $5.4 million for the third quarter of 2012. Operating expenses were 80.36% of total revenues in the third quarter of 2013 compared to 72.41% in the second quarter of 2013 and 57.09% in the third quarter of 2012. Reasons for the increase in operating expenses versus the second quarter of 2013 include increased payroll costs, principally due to an increase in accrued commissions for loan officers ($216,000), higher communications expenses ($100,000) relating to the temporary overlap of a new phone system, and the one-time recovery during the second quarter of expenses incurred for one loan ($470,000). The increase versus the third quarter of 2012 was primarily caused by increased payroll expenses from higher staffing levels ($244,000), accrued commissions ($165,000), higher consulting fees due to the conversion of the core banking system ($180,000) and an increase in occupancy expense ($175,000) due to the re-opening of the Elmhurst branch, which had been temporarily closed after a fire.

Balance Sheet Highlights

Assets
Total assets were $541.1 million at September 30, 2013, up $14.1 million, or 2.7%, from September 30, 2012. Loans receivable, net were $352.5 million at September 30, 2013 or 65.1% of total assets, off $9.1 million from $361.6 million at September 30, 2012. Loans receivable decreased as the Company temporarily ceased originating commercial mortgage loans to focus on resolving asset quality issues. Origination of 1-4 family residential mortgage loans continues. Construction and development loans, which comprise about 3.2% of total loans, have declined significantly as existing loans have matured or have been paid down. Other interest earning assets increased by $22.8 million or 18.5% from the quarter ended September 30, 2012, 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
At September 30, 2013, there was approximately $21.1 million of nonperforming assets as compared to $27.7 million at September 30, 2012. Delinquent loans from 30-89 days past due were $4.8 million at September 30, 2013 compared to $1.1 million at September 30, 2012. Although the short term delinquency category increased in the third quarter of 2013, the Company monitors these loans closely and continues to work on improving asset quality on an overall basis as shown by the decrease in nonperforming assets. The allowance for loan losses was $8.2 million or 2.26% of total loans at September 30, 2013 compared to 4.00% at September 30, 2012. The reduction in the allowance was principally due to a negative provision for loan losses in the fourth quarter of 2012 as a result of improvements in asset quality during 2012.

Deposits
Deposits at September 30, 2013, were $417.0 million, off $26.8 million or 6.0% from September 30, 2012. Certificates of deposit, which were $183.7 million at September 30, 2013, decreased $45.1 million, or 19.7%, from September 30, 2012. Savings and money market accounts increased $3.8 million, or 2.6%. Demand deposits increased $14.5 million or 21.0% from September 30, 2012.

Borrowings
To partially match fund the Bank's 10/1 and 7/1 portfolio residential loan originations, the Bank has executed 7 year and 5 year term borrowings from the Federal Home Loan Bank that aggregate $46 million at September 30, 2013. The remaining portion of borrowings at September 30, 2013 consists of the Company's trust preferred borrowings originated in 2004. During the first quarter of 2013 the Bank repaid $10 million in Federal Home Loan Bank borrowings, resulting in a net year over year increase of $36 million.

Stockholders' Equity
Stockholders' equity at September 30, 2013 was $65.4 million or 12.1% of total assets, a $6.5 million or 11.0% increase from $58.9 million at September 30, 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 development 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.