First Resource Bank Announces 2010 Results

EXTON, Pa., Jan. 27, 2011 /PRNewswire/ -- First Resource Bank (OTC Bulletin Board: FRSB) announced net income of $490,360 for the year ended December 31, 2010 as compared to a net loss of $244,905 for the year ended December 31, 2009, representing a $735,265 improvement  year over year. Net income of $108,861 for the quarter ended December 31, 2010 compares to net income of $152,576 for the quarter ended September 30, 2010, and net income of $69,617 for the quarter ended December 31, 2009.

Glenn B. Marshall, President & CEO, stated, "We are pleased to report the most profitable year in the Bank's history.  We have worked hard in 2010 to expand our earning asset base, continue our expense controls and reduce our cost of funds without sacrificing duration. While we are still actively working through credit issues and the related costs in our loan portfolio, we absorbed these costs and achieved profits every quarter of 2010."

Net interest income was $1,188,676 for the quarter ended December 31, 2010, as compared to $1,098,100 for the previous quarter.  The net interest margin improved 37 basis points, from 3.40% for the three months ended September 30, 2010 to 3.77% for the three months ended December 31, 2010. This net interest margin improvement resulted from lower money market deposit costs and continued deployment of excess cash balances during the fourth quarter.

The allowance for loan losses to total loans was 1.24% at December 31, 2010 as compared to 1.23% at September 30, 2010 and 1.32% at December 31, 2009. Non-performing assets, which include non-performing loans of $2.5 million and other real estate owned of $1.8 million, totaled $4.3 million at December 31, 2010. Non-performing assets to total assets increased from 3.34% at September 30, 2010 to 3.45% at December 31, 2010 due to an increase in other real estate owned. To lower the risk in the overall loan portfolio, the lending team has actively managed both existing and new loans to lower the Bank's exposure. As an example newly underwritten first lien consumer loans have replaced second lien position credits that have rolled off over the past 18 months.

The loan portfolio grew $3.3 million, or 3.0%, during the fourth quarter from $109.6 million at September 30, 2010 to $113.0 million at December 31, 2010.  Construction loan exposure continues to decline, with construction loans representing 2.5% of total loans at December 31, 2010 as compared to 8.5% of total loans at December 31, 2009. Year over year, total loans increased $9.2 million, or 8.9%, from $103.7 million at December 31, 2009 to $113.0 million at December 31, 2010.

The following table illustrates the composition of the loan portfolio:



Dec. 31,
2010

Sept. 30,
2010

Dec. 31,
2009







Commercial real estate

$ 71,538,599

$ 67,828,719

$ 59,639,428


Commercial construction

2,840,605

3,757,082

8,845,112


Commercial business

12,276,455

12,633,286

12,197,348


Consumer

26,331,755

25,428,264

23,058,326







Total loans

$112,987,414

$109,647,351

$103,740,214





Deposits increased slightly during the fourth quarter, with total deposits increasing $228 thousand, or 0.2% from $109.2 million at September 30, 2010 to $109.5 million at December 31, 2010. Year over year, total deposits decreased $1.3 million, or 1.2%, from $110.8 million at December 31, 2009 to $109.5 million at December 31, 2010. During 2010, there was a significant shift in the composition of the deposit portfolio from certificates of deposit to money market deposits.  Certificates of deposit declined $17.4 million, while money market deposits increased $15.3 million during the twelve months ended December 31, 2010.

During 2009, the Bank participated in the United States Department of the Treasury's Capital Purchase Program. Preferred stock dividends are accrued monthly and all dividend payments have been made in accordance with the terms of the preferred stock issued. Preferred stock dividends and accretion were $72,138 for the fourth quarter resulting in net income available to common shareholders of $36,723. This compares to net income available to common shareholders of $80,439 for the quarter ended September 31, 2010 and $21,314 for the quarter ended December 31, 2009.

Chairman James B. Griffin stated, "The preferred stock issued under the Capital Purchase Plan has allowed the Bank to continue to grow the loan portfolio at a time when the community bank capital markets were inaccessible. We are currently investigating participation in the Small Business Lending Fund to replace the Capital Purchase Plan preferred stock outstanding to possibly lower our preferred stock dividend rates while continuing to lend in our community."

Non-interest income for the quarter ended December 31, 2010 was a $22,428, as compared to $23,332 for the previous quarter.

Non-interest expense increased $237,510, or 34.6% in the three months ended December 31, 2010 as compared to the three months ended September 30, 2010. This increase was primarily due to higher professional fees and higher other real estate owned expenses in the fourth quarter.

Selected Financial Data:

Balance Sheets (unaudited)



Dec. 31,

2010

Dec. 31,

2009






Cash and due from banks

$   1,968,246

$   11,123,360


Investments

9,333,483

15,229,190


Loans

112,987,414

103,740,214


Allowance for loan losses

(1,399,993)

(1,364,884)


Premises & equipment

127,419

192,363


Other assets

3,341,266

3,116,423






Total assets

$ 126,357,835

$  132,036,666






Non-interest bearing deposits

$   4,393,823

$    2,672,825


Interest-bearing checking

1,168,134

1,143,283


Money market

51,075,527

35,778,349


Time deposits

53,821,057

71,188,321


 Total deposits

109,458,541

110,782,778


Borrowings

1,928,000

5,928,000


Other liabilities

395,402

1,345,273






Total liabilities

111,781,943

118,056,051






Preferred stock

5,066,833

5,040,833


Common stock

1,453,094

1,343,873


Surplus

9,635,586

9,468,406


Accumulated other

 comprehensive income (loss)

(31,982)

(123,048)


Accumulated deficit

(1,547,639)

(1,749,449)


Total stockholders' equity

14,575,892

13,980,615






Total Liabilities &

    Stockholders' Equity

$ 126,357,835

$  132,036,666






Performance Statistics (unaudited)


Qtr Ended

Dec. 31,

2010


Qtr Ended

Sept. 30,

2010


Qtr Ended

June 30,

2010


Qtr Ended

Mar. 31,

2010


Qtr Ended

Dec. 31,

2009







Net interest margin

3.77%

3.40%

3.25%

3.17%

2.98%

Nonperforming loans/total loans

2.23%

3.08%

2.43%

1.30%

1.27%

Nonperforming assets/

  Total assets

3.45%

3.34%

2.68%

1.88%

1.81%

Allowance for loan losses/

  Total loans

1.24%

1.23%

1.24%

1.32%

1.32%

Average loans/Average assets

87.8%

84.3%

81.7%

82.0%

81.9%

Non interest expenses/

  Average assets

0.61%

0.54%

0.62%

0.52%

0.55%










Income Statements (unaudited)




Qtr Ended
Dec. 31,

2010


Qtr Ended
Sept. 30,

2010


Qtr Ended
June 30,

2010


Qtr Ended
Mar. 31,

2010


Qtr Ended
Dec. 31,

2009







INTEREST INCOME






Loans

$1,594,093

$1,575,193

$1,530,023

$1,502,552

$1,494,117

Investments

28,027

39,327

99,889

111,333

108,477

Federal funds sold

704

822

821

497

506

Other

5,047

7,069

2,891

4,661

4,315

Total interest income

1,627,871

1,622,411

1,633,624

1,619,043

1,607,415







INTEREST EXPENSE






Borrowings

23,060

28,818

33,407

40,050

56,815

Checking

817

865

819

764

808

Money Market

145,307

204,531

223,164

178,761

133,715

Time deposits

270,011

290,097

334,733

405,015

496,840

Total interest expense

439,195

524,311

592,123

624,590

688,178







Net interest income

1,188,676

1,098,100

1,041,501

994,453

919,237







Provision for loan losses

120,888

202,576

84,766

162,466

145,353







NON INTEREST INCOME

22,428

23,332

21,190

22,433

1,202







NON INTEREST EXPENSE






Salaries & benefits

313,127

307,260

317,889

329,024

328,651

Occupancy & equipment

75,080

74,445

76,943

87,543

88,289

Data processing

49,154

46,908

50,704

51,578

52,783

Professional fees

99,816

78,435

189,922

56,541

42,486

Advertising

2,903

4,825

8,194

4,903

1,558

Other real estate owned expenses

237,791

14,387

1,650

3,929

6,525

Other non interest

    Expenses

146,188

160,288

164,072

140,495

147,792

Total non interest

    Expense

924,059

686,548

809,374

674,013

668,084







Pre-tax income

166,157

232,308

168,551

180,407

107,002







Tax expense

(57,296)

(79,731)

(58,233)

(61,803)

(37,385)







Net income

$  108,861

$  152,577

$  110,318

$  118,604

$   69,617







Preferred stock dividends and accretion

(72,138)

(72,138)

(72,137)

(72,137)

(48,303)







Net income available to common shareholders

$   36,723

$   80,439

$   38,181

$   46,467

$   21,314




Income Statements (unaudited)





Year Ended
Dec. 31,

2010



Year Ended

Dec. 31,

2009




INTEREST INCOME



Loans

$6,201,861

$5,684,136

Investments

278,576

335,040

Federal funds sold

2,844

506

Other

19,668

12,168

Total interest income

6,502,949

6,031,850




INTEREST EXPENSE



Borrowings

125,335

306,546

Checking

3,265

3,073

Money Market

751,763

345,617

Time deposits

1,299,856

2,288,119

Total interest expense

2,180,219

2,943,355




Net interest income

4,322,730

3,088,495




Provision for loan losses

570,696

586,597




NON INTEREST INCOME

89,383

62,508




NON INTEREST EXPENSE



Salaries & benefits

1,267,300

1,356,810

Occupancy & equipment

314,011

385,404

Data processing

198,344

214,522

Professional fees

424,714

221,920

Advertising

20,825

23,584

Other real estate owned

   Expenses

257,757

115,434

Other non interest expense

611,043

613,888

Total non interest expense

3,093,994

2,931,562




Pre-tax income (loss)

747,423

(367,156)




Tax benefit (expense)

(257,063)

122,251




Net income (loss)

$  490,360

$ (244,905)




Preferred stock dividends and accretion

(288,550)

(160,103)




Net income (loss) attributed to common shareholders

$  201,810

$ (405,008)




About First Resource Bank

First Resource Bank is a locally owned and operated Pennsylvania state-chartered bank, serving the banking needs of businesses, professionals and individuals in Chester County, Pennsylvania. The Bank offers a full range of deposit and credit services with a high level of personalized service. First Resource Bank also offers a broad range of traditional financial services and products, competitively priced and delivered in a responsive manner to small businesses, professionals and residents in the local market. For additional information visit our website at www.firstresourcebank.com. Member FDIC.

This press release contains statements that are not of historical facts and may pertain to future operating results or events or management's expectations regarding those results or events.  These are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities and Exchange Act of 1934.  These forward-looking statements may include, but are not limited to, statements about our plans, objectives, expectations and intentions and other statements contained in this press release that are not historical facts.  When used in this press release, the words "expects", "anticipates", "intends", "plans", "believes", "seeks", "estimates", or words of similar meaning, or future or conditional verbs, such as "will", "would", "should", "could", or "may" are generally intended to identify forward-looking statements.  These forward-looking statements are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are either beyond our control or not reasonably capable of predicting at this time.  In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change. Actual results may differ materially from the results discussed in these forward-looking statements.  Readers of this press release are accordingly cautioned not to place undue reliance on forward-looking statements.  First Resource Bank disclaims any intent or obligation to update publicly any of the forward-looking statements herein, whether in response to new information, future events or otherwise.

SOURCE First Resource Bank



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