First Resource Bank Announces Record Annual Results

EXTON, Pa., Jan. 22, 2013 /PRNewswire/ -- First Resource Bank (OTC Bulletin Board: FRSB) announced net income for the three months ended December 31, 2012 was $234,255 as compared to $226,310 for the quarter ended September 30, 2012 and net income of $232,982 for the quarter ended December 31, 2011. After accounting for preferred stock dividends, net income available to common shareholders for the quarter ended December 31, 2012 was $221,458. This compares to net income available to common shareholders of $187,499 for the quarter ended September 30, 2012 and $168,740 for the quarter ended December 31, 2011.

Net income for the year ended December 31, 2012 of $917,557 compares to net income of $843,499 for the prior year. After accounting for preferred stock dividends, net income available to common shareholders for the year ended December 31, 2012 was $750,187, an increase of 49% over the $502,526 in net income available to common shareholders recorded for the prior year.

Glenn B. Marshall, President & CEO, stated, "We are pleased to have achieved a primary strategic goal for 2012 in lowering the preferred stock dividend rate to 1% due to strong growth in small business loans. Preferred stock dividends were reduced by over 50% in 2012 and the benefit of the 1% dividend rate will be beneficial to 2013 results as well."

Preferred stock dividend costs declined 67% in the fourth quarter, from $38,811 for the three months ended September 30, 2012 to $12,797 for the three months ended December 31, 2012. Year over year, preferred stock dividend costs declined 51% from $340,973 for the year ended December 31, 2011 to $167,370 for the year ended December 31, 2012. 

Net interest income was $1,364,413 for the quarter ended December 31, 2012 as compared to $1,354,661 for the previous quarter.  The net interest margin held steady at 3.85% for both the third and fourth quarters of 2012. The overall yield on interest earning assets fell 4 basis points during the fourth quarter, led by a 14 basis point decline in loan yields. Loan yields continue to experience pressure from intense competition for new loans as well as the scheduled re-pricing of existing loans during a time of historically low interest rates. The cost of interest bearing liabilities declined 6 basis points during the fourth quarter.  Deposits costs were down across every segment of the deposit portfolio during the fourth quarter. 

The allowance for loan losses to total loans was 1.12% at December 31, 2012 as compared to 1.21% at September 30, 2012,  and 1.24% at December 31, 2011. Non-performing assets, which include non-performing loans of $3.0 million and other real estate owned of $690 thousand, totaled $3.7 million at December 31, 2012. Non-performing assets to total assets decreased from 3.02% at September 30, 2012 to 2.45% at December 31, 2012.  

The loan portfolio grew $728 thousand, or 0.6%, during the fourth quarter from $127.9 million at September 30, 2012 to $128.7 million at December 31, 2012. Growth in the commercial and commercial real estate loan portfolios were offset by declines in the commercial construction and consumer portfolios during the fourth quarter. During the year ended December 31, 2012, the loan portfolio grew $11.2 million, or 9.5%, from $117.5 million at December 31, 2011 to $128.7 million at December 31, 2012. Mr. Marshall stated, "We continue to shift resources from consumer lending to focus on commercial business and commercial rental properties.  Our 2012 loan growth reflects this change from earlier years at the Bank."

The following table illustrates the composition of the loan portfolio: 


Dec. 31,

2012

Dec. 31,
2011






Commercial real estate

$ 80,500,799

$ 71,300,163


Commercial construction

8,863,677

7,165,979


Commercial business

14,874,480

13,507,058


Consumer

24,433,976

25,483,053






Total loans

$128,672,932

$117,456,253


Deposits increased $5.4 million, or 4.3% from $125.7 million at September 30, 2012 to $131.1 million at December 31, 2012. During the fourth quarter, certificates of deposit increased $1.2 million, or 1.7%, from $74.3 million at September 30, 2012 to $75.6 million at December 31, 2012. Money market deposits increased $1.6 million, or 3.8%, from $41.8 million at September 30, 2012 to $43.4 million at December 31, 2012. During the year ended December 31, 2012, total deposits grew $11.1 million, or 9.3%, from $120.0 million at December 31, 2011 to $131.1 million at December 31, 2012.

Premises and equipment increased from $162 thousand at December 31, 2011 to $2.7 million at December 31, 2012, primarily due to the purchase of a second branch site during the third quarter.  This former bank branch building is located in West Chester, PA, is currently leased back to the seller with the second branch anticipated to open in mid-2014.  Rental income from this site during the lease back period will be used to defray branch development costs.

Non-interest income for the quarter ended December 31, 2012 was $91,209, as compared to $73,267 for the previous quarter. This increase was primarily due to rental income on the Bank's second branch site which is currently being leased back by the seller. Non-interest income for the year ended December 31, 2012 was $279,360, as compared to $170,061 for the prior year. This increase was primarily due to the income associated with the increase in cash surrender value of bank owned life insurance which was purchased during the fourth quarter of 2011 as well as rental income from the branch site acquired in the third quarter of 2012.  

Non-interest expense increased $34,677, or 3.9% in the three months ended December 31, 2012 as compared to the three months ended September 30, 2012. This increase was due to higher other real estate owned expenses. Non-interest expense for the year ended December 31, 2012 was $3.6 million, an increase of $257 thousand, or 7.8%, as compared to the prior year. This increase was primarily due to an increase in salaries and benefits expenses associated with the expansion of the employee base, offset by lower other real estate owned expenses. 

 

       Selected Financial Data:





Balance Sheets (unaudited)









December 31,

2012

December 31,

2011






Cash and due from banks

$   5,633,237

$   1,554,676


Investments

10,688,356

12,904,792


Loans

128,672,932

117,456,253


Allowance for loan losses

(1,439,935)

(1,458,824)


Premises & equipment

2,671,344

162,080


Other assets

4,825,042

5,400,055






Total assets

$ 151,050,976

$ 136,019,032






Non-interest bearing deposits

$   5,236,362

$   5,799,857


Interest-bearing checking

6,921,675

1,499,933


Money market

43,363,298

42,006,348


Time deposits

75,567,700

70,637,139


  Total deposits

131,089,035

119,943,277


Borrowings

3,420,000

-


Other liabilities

481,168

859,456






Total liabilities

134,990,203

120,802,733






Preferred stock

5,083,000

5,083,000


Common stock

1,528,243

1,453,094


Surplus

9,565,547

9,629,144


Accumulated other

  comprehensive income (loss)

179,324

96,174


Accumulated deficit

(295,341)

(1,045,113)


Total stockholders' equity

16,060,773

15,216,299






Total Liabilities &

     Stockholders' Equity

$ 151,050,976

$ 136,019,032


 


Performance Statistics (unaudited)

 


Qtr Ended

Dec. 31,

2012

Qtr Ended

Sept. 30,

2012

Qtr Ended

June 30,

2012

Qtr Ended

Mar. 31,

2012

Qtr Ended

Dec. 31,

2011







Net interest margin

3.85%

3.85%

3.76%

3.91%

3.90%

Nonperforming loans/total loans

2.34%

2.61%

2.75%

2.48%

1.56%

Nonperforming assets/

   Total assets

2.45%

3.02%

3.04%

2.93%

2.20%

Allowance for loan losses/

   Total loans

1.12%

1.21%

1.16%

1.17%

1.24%

Average loans/Average assets

87.2%

86.2%

84.9%

84.4%

84.4%

Non interest expenses*/

   Average assets

2.47%

2.43%

2.52%

2.45%

2.55%

Earnings per share – basic and

   diluted

$0.14

$0.12

$0.11

$0.12

$0.12







* Annualized






 


Income Statements (unaudited)



 

Qtr Ended
Dec. 31,

2012

 

Qtr Ended
Sept. 30,

2012

 

Qtr Ended
June 30,

2012

 

Qtr Ended
Mar. 31,

2012

 

Qtr Ended
Dec. 31,

2011







INTEREST INCOME






Loans

$1,671,869

$1,668,250

$1,640,648

$1,642,566

$1,651,201

Investments

53,718

56,433

58,312

61,572

63,897

Federal funds sold

-

-

-

-

-

Other

88

2,414

2,383

1,017

2,563

 Total interest income

1,725,675

1,727,097

1,701,343

1,705,155

1,717,661







INTEREST EXPENSE






Borrowings

10,974

8,358

6,925

4,647

-

Checking

565

801

1,398

964

881

Money Market

82,226

87,113

101,368

101,742

101,429

Time deposits

267,497

276,164

287,276

294,895

313,929

 Total interest expense

361,262

372,436

396,967

402,248

416,239







Net interest income

1,364,413

1,354,661

1,304,376

1,302,907

1,301,422







Provision for loan losses

174,979

206,403

149,677

159,991

119,904







Net interest income after provision for loan losses

1,189,434

1,148,258

1,154,699

1,142,916

1,181,518







NON INTEREST INCOME

91,209

73,267

59,705

55,179

38,944







NON INTEREST EXPENSE






Salaries & benefits

438,058

454,317

420,646

435,025

408,677

Occupancy & equipment

88,799

80,580

85,686

77,855

83,108

Data processing

35,430

57,384

55,748

55,714

55,301

Professional fees

50,791

59,616

87,868

93,569

77,539

Advertising

15,978

19,071

12,952

13,269

9,799

Other real estate owned expenses

117,646

36,866

71,100

15,243

90,149

Other non interest

     Expenses

176,983

181,174

170,476

153,171

147,168

Total non interest

     Expense

923,685

889,008

904,476

843,846

871,741







Pre-tax income

356,958

332,517

309,928

354,249

348,721







Tax expense

(122,703)

(106,207)

(96,674)

(110,511)

(115,739)







Net income

$  234,255

$  226,310

$  213,254

$  243,738

$  232,982







Preferred stock dividends and accretion

 

(12,797)

 

(38,811)

 

(52,224)

 

(63,538)

 

(64,242)







Net income available to common shareholders

 

$  221,458

 

$  187,499

 

$  161,030

 

$  180,200

 

$  168,740

 


Income Statements (unaudited)



 

 

Year

Ended
Dec. 31,

2012

 

 

Year

Ended

Dec. 31,

2011




INTEREST INCOME



Loans

$6,623,333

$6,452,329

Investments

230,035

253,008

Federal funds sold

-

147

Other

5,902

9,122

 Total interest income

6,859,270

6,714,606




INTEREST EXPENSE



Borrowings

30,904

25,178

Checking

3,728

3,209

Money Market

372,449

478,871

Time deposits

1,125,832

1,218,234

 Total interest expense

1,532,913

1,725,492




Net interest income

5,326,357

4,989,114




Provision for loan losses

691,050

557,658




Net interest income after provision for loan losses

4,635,307

4,411,456




NON INTEREST INCOME

279,360

170,061




NON INTEREST EXPENSE



Salaries & benefits

1,748,046

1,456,109

Occupancy & equipment

332,920

315,835

Data processing

204,276

210,803

Professional fees

291,844

358,978

Advertising

61,270

42,523

Other real estate owned

    expenses

240,855

312,133

Other non interest expense

681,804

607,625

Total non interest expense

3,561,015

3,304,006




Pre-tax income

1,353,652

1,277,511




Tax expense

(436,095)

(434,012)




Net income

$  917,557

$  843,499




Preferred stock dividends and accretion

(167,370)

(340,973)




Net income available to common shareholders

$  750,187

$  502,526

 

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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