First Resource Bank Announces 2011 Results

26 Jan, 2012, 12:06 ET from First Resource Bank

EXTON, Pa., Jan. 26, 2012 /PRNewswire/ -- First Resource Bank (OTC Bulletin Board: FRSB) announced net income for the twelve months ended December 31, 2011 was $843,499 as compared to $490,360 for the prior year. This increase is primarily attributed to higher net interest income. Net income of $232,982 for the quarter ended December 31, 2011 compared to net income of $259,350 for the quarter ended September 30, 2011 and net income of $108,861 for the quarter ended December 31, 2010.

Glenn B. Marshall, President & CEO, stated, "We are thrilled to announce these record results for the year ended December 31, 2011. During this year we achieved a significant increase in earnings, repaid the TARP Capital Purchase Plan preferred stock, qualified and issued preferred stock under the Small Business Lending Fund and decreased exposure to distressed loans."

Net interest income was $1,301,422 for the quarter ended December 31, 2011 as compared to $1,271,686 for the previous quarter.  The net interest margin widened 13 basis points, from 3.77% for the three months ended September 30, 2011 to 3.90% for the three months ended December 31, 2011. This net interest margin improvement resulted from lower deposit interest costs and a reduction in low yielding average cash and short term investments held during the fourth quarter. The loan portfolio yield increased 4 basis points, while the deposit cost of funds declined 2 basis points.

The allowance for loan losses to total loans was 1.24% at December 31, 2011, September 30, 2011 and December 31, 2010. Non-performing assets, which include non-performing loans of $1.8 million and other real estate owned of $1.2 million, totaled $3.0 million at December 31, 2011. Non-performing assets to total assets decreased from 2.71% at September 30, 2011 to 2.20% at December 31, 2011 due to one loan paid off in full, one partial charge-off and the sale of two other real estate owned properties during the quarter.  

The loan portfolio grew $3.0 million, or 2.7%, during the fourth quarter from $114.4 million at September 30, 2011 to $117.5 million at December 31, 2011. Total loans increased a net $4.5 million during the twelve months ended December 31, 2011, growing from $113.0 million at December 31, 2010 to $117.5 million at December 31, 2011.

The following table illustrates the composition of the loan portfolio:

Dec. 31, 2011

Dec. 31, 2010

Commercial real estate

$ 71,300,163

$ 71,538,599

Commercial construction

7,165,979

2,840,605

Commercial business

13,507,058

12,276,455

Consumer

25,483,053

26,331,755

Total loans

$117,456,253

$112,987,414

Deposits increased $838 thousand, or 0.7% from $119.1 million at September 30, 2011 to $119.9 million at December 31, 2011. During the fourth quarter, certificates of deposit increased $2.0 million, or 2.9%, from $68.7 million at September 30, 2011 to $70.6 million at December 31, 2011. Money market deposits declined $407 thousand, or 1.0%, from $42.4 million at September 30, 2011 to $42.0 million at December 31, 2011. During the year ended December 31, 2011, total deposits increased $10.5 million, or 9.6%, with significant growth in the certificate of deposit portfolio offset by a decline in money market deposits.  Certificates of deposit have been used to provide longer term funding at low current interest rates.

The Bank issued preferred stock in three different series in 2009 as part of the United States Department of the Treasury's Capital Purchase Program (CPP). Preferred stock dividends are accrued monthly and all dividend payments have been made in accordance with the terms of the preferred stock issued. On September 15, 2011, the Bank redeemed all CPP preferred stock outstanding and issued a new series of preferred stock under the United States Department of the Treasury's Small Business Lending Fund (SBLF).

After accounting for preferred stock dividends, net income available to common shareholders for the quarter ended December 31, 2011 was $168,740. This compares to net income available to common shareholders of $126,895 for the quarter ended September 30, 2011 and $36,723 for the quarter ended December 31, 2010.

Non-interest income for the quarter ended December 31, 2011 was $38,944, as compared to $39,849 for the previous quarter. Non-interest income for the year ended December 31, 2011 of $170,061 was $80,678, or 90.3% higher than non-interest income of $89,383 for the year ended December 31, 2010.  This increase was primarily due to rental income on other real estate owned properties as well as income from the increase in cash surrender value on bank owned life insurance that was purchased during the fourth quarter of 2011.

Non-interest expense increased $79,763, or 10.1% in the three months ended December 31, 2011 as compared to the three months ended September 30, 2011. This increase was primarily due to an increase in employment expenses and higher other real estate owned expenses. Non-interest expense for the year ended December 31, 2011 of $3.3 million was $210 thousand, or 6.8% higher than non-interest expense of $3.1 million for the year ended December 31, 2010. This increase was due to higher salaries and benefits associated with a higher headcount, losses on sales of other real estate owned properties and increased expenses of other real estate owned properties. During the year ended December 31, 2011, eight other real estate owned properties were disposed of and two were added.

Chairman James B. Griffin stated, "I am pleased to see growth in stockholders equity during 2011 by $641,107, from $14,575,892 at the end of 2010 to $15,216,299 at December 31, 2011. I would like to thank our customers, employees and shareholders for their continued support of First Resource Bank."

Selected Financial Data:

Balance Sheets (unaudited)

December 31,

2011

December 31,

2010

Cash and due from banks

$   1,554,676

$   1,968,246

Investments

12,904,792

9,333,483

Loans

117,456,253

112,987,414

Allowance for loan losses

(1,458,824)

(1,399,993)

Premises & equipment

162,080

127,419

Other assets

5,400,055

3,341,266

Total assets

$ 136,019,032

$ 126,357,835

Non-interest bearing deposits

$   5,799,857

$   4,393,823

Interest-bearing checking

1,499,933

1,168,134

Money market

42,006,348

51,075,527

Time deposits

70,637,139

52,821,057

 Total deposits

119,943,277

109,458,541

Borrowings

-

1,928,000

Other liabilities

859,456

395,402

Total liabilities

120,802,733

111,781,943

Preferred stock

5,083,000

5,066,833

Common stock

1,453,094

1,453,094

Surplus

9,629,144

9,635,586

Accumulated other

 comprehensive income (loss)

96,174

(31,982)

Accumulated deficit

(1,045,113)

(1,547,639)

Total stockholders' equity

15,216,299

14,575,892

Total Liabilities &

    Stockholders' Equity

$ 136,019,032

$ 126,357,835

Performance Statistics (unaudited)

Qtr Ended

Dec. 31,

2011

Qtr Ended

Sept. 30,

2011

Qtr Ended

June 30,

2011

Qtr Ended

Mar. 31,

2011

Qtr Ended

Dec. 31,

2010

Net interest margin

3.90%

3.77%

3.75%

3.91%

3.77%

Nonperforming loans/total loans

1.56%

2.23%

2.77%

2.35%

2.21%

Nonperforming assets/

  Total assets

2.20%

2.71%

2.95%

3.32%

3.42%

Allowance for loan losses/

  Total loans

1.24%

1.24%

1.28%

1.27%

1.24%

Average loans/Average assets

84.4%

84.9%

84.9%

88.0%

87.8%

Non interest expenses*/

  Average assets

2.55%

2.32%

2.52%

2.58%

2.83%

Earnings per share – basic and

  diluted

$0.12

$0.09

$0.07

$0.07

$0.03

* Annualized

Income Statements (unaudited)

Qtr Ended Dec. 31,

2011

Qtr Ended Sept. 30,

2011

Qtr Ended June 30,

2011

Qtr Ended Mar. 31,

2011

Qtr Ended Dec. 31,

2010

INTEREST INCOME

Loans

$1,651,201

$1,628,005

$1,587,688

$1,585,435

$1,594,093

Investments

63,897

71,048

63,007

55,056

28,027

Federal funds sold

-

-

-

147

704

Other

2,563

3,644

1,899

1,016

5,047

   Total interest income

1,717,661

1,702,697

1,652,594

1,641,654

1,627,871

INTEREST EXPENSE

Borrowings

-

2,338

8,867

13,973

23,060

Checking

881

877

743

708

817

Money Market

101,429

111,541

128,543

137,358

145,307

Time deposits

313,929

316,255

306,267

281,783

270,011

   Total interest expense

416,239

431,011

444,420

433,822

439,195

Net interest income

1,301,422

1,271,686

1,208,174

1,207,832

1,188,676

Provision for loan losses

119,904

126,065

151,933

179,756

120,888

Net interest income after provision for loan losses

1,181,518

1,145,621

1,056,241

1,028,076

1,067,788

NON INTEREST INCOME

38,944

39,849

39,053

52,215

22,428

NON INTEREST EXPENSE

Salaries & benefits

408,677

357,253

346,362

343,817

313,127

Occupancy & equipment

83,108

79,946

74,442

78,339

75,080

Data processing

55,301

53,041

51,552

50,909

49,154

Professional fees

77,539

87,042

103,308

91,089

99,816

Advertising

9,799

8,476

8,045

16,203

2,903

Other real estate owned expenses

90,149

52,502

97,676

71,806

237,791

Other non interest

    Expenses

147,168

153,718

143,943

162,796

146,188

Total non interest

    Expense

871,741

791,978

825,328

814,959

924,059

Pre-tax income

348,721

393,492

269,966

265,332

166,157

Tax expense

(115,739)

(134,142)

(92,919)

(91,212)

(57,296)

Net income

$  232,982

$  259,350

$  177,047

$  174,120

$  108,861

Preferred stock dividends and accretion

(64,242)

(132,455)

(72,138)

(72,138)

(72,138)

Net income available to common shareholders

$  168,740

$  126,895

$  104,909

$  101,982

$   36,723

Income Statements (unaudited)

Year

Ended

Dec. 31,

2011

Year

Ended

Dec. 31,

2010

INTEREST INCOME

Loans

$6,452,329

$6,201,861

Investments

253,008

278,576

Federal funds sold

147

2,844

Other

9,122

19,668

   Total interest income

6,714,606

6,502,949

INTEREST EXPENSE

Borrowings

25,178

125,334

Checking

3,209

3,265

Money Market

478,871

751,763

Time deposits

1,218,234

1,299,857

   Total interest expense

1,725,492

2,180,219

Net interest income

4,989,114

4,322,730

Provision for loan losses

577,658

570,696

Net interest income after provision for loan losses

4,411,456

3,752,034

NON INTEREST INCOME

170,061

89,383

NON INTEREST EXPENSE

Salaries & benefits

1,456,109

1,267,300

Occupancy & equipment

315,835

314,011

Data processing

210,803

198,344

Professional fees

358,978

424,714

Advertising

42,523

20,825

Other real estate owned

   expenses

312,133

257,757

Other non interest expense

607,625

611,043

Total non interest expense

3,304,006

3,093,994

Pre-tax income

1,277,511

747,423

Tax expense

(434,012)

(257,063)

Net income

$  843,499

$  490,360

Preferred stock dividends and accretion

(340,973)

(288,550)

Net income available to common shareholders

$  502,526

$  201,810

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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