2014

First Resource Bank Announces Second Quarter Results

EXTON, Pa., July 22, 2011 /PRNewswire/ -- First Resource Bank (OTC Bulletin Board: FRSB) announced net income of $177,047 for the quarter ended June 30, 2011 as compared to net income of $174,120 for the quarter ended March 31, 2011 and net income of $110,318 for the quarter ended June 30, 2010. The second quarter of 2011 results were the most profitable quarter since First Resource Bank opened and marked the 7th consecutive profitable quarter.

Glenn B. Marshall, President & CEO, stated, "Second quarter results were strong despite losses taken on sales of other real estate owned, due to the improved core earnings power embedded in the balance sheet.  The Bank continues to grow profitability while absorbing credit costs and an increased regulatory compliance burden."

Net income for the six months ended June 30, 2011 was $351,167, as compared to net income of $228,922 for the six months ended June 30, 2010. This increase is attributed to a lower cost of funds and lower professional fees, offset by higher other real estate owned expenses.

Net interest income was $1,208,176 for the quarter ended June 30, 2011.  The net interest margin declined 16 basis points, from 3.91% for the three months ended March 31, 2011 to 3.75% for the three months ended June 30, 2011. This net interest margin decline resulted from higher cash and short term investment balances comprising a larger portion of the balance sheet at June 30, 2011. The loan portfolio yield declined 6 basis points, while the deposit cost of funds declined 2 basis points.

The allowance for loan losses to total loans was 1.28% at June 30, 2011 as compared to 1.27% at March 31, 2011 and 1.24% at June 30, 2010. Non-performing assets, which include non-performing loans of $3.1 million and other real estate owned of $839 thousand, totaled $4.0 million at June 30, 2011. Non-performing assets to total assets decreased from 3.32% at March 31, 2011 to 2.95% at June 30, 2011 primarily due to an $879 thousand reduction in other real estate owned during the second quarter. Chairman James B. Griffin stated, "The reduction of other real estate owned during the second quarter was a top priority and we are pleased to report a 51% reduction in that portfolio during the past quarter. While losses were taken on these sales, we feel that is important to move forward by eliminating the carrying costs of managing these properties." The provision for loan losses decreased from $179,756 for the three months ended March 31, 2011 to $151,933 for the three months ended June 30, 2011 due to a lower level of net loan charge-offs during the second quarter.

The loan portfolio grew $624 thousand, or 0.6%, during the second quarter from $112.1 million at March 31, 2011 to $112.7 million at June 30, 2011, but was down slightly when compared to December 31, 2010.  The loan portfolio increased $4.2 million, or 3.9%, from $108.5 million at June 30, 2010 to $112.7 million at June 30, 2011.

The following table illustrates the composition of the loan portfolio:



June 30,
2011

Dec. 31,
2010

June 30,
2010







Commercial real estate

$ 70,203,290

$ 71,538,599

$ 63,976,153


Commercial construction

4,932,556

2,840,605

6,177,609


Commercial business

12,044,494

12,276,455

12,680,515


Consumer

25,564,771

26,331,755

25,681,032







Total loans

$112,745,111

$112,987,414

$108,515,309





Deposits increased $3.6 million, or 3.2% from $114.4 million at March 31, 2011 to $118.0 million at June 30, 2011. During the second quarter, certificates of deposit increased $5.4 million, or 8.6%, from $62.4 million at March 31, 2011 to $67.8 million at June 30, 2011. Money market deposits declined $1.4 million, or 3.0%, from $46.7 million at March 31, 2011 to $45.3 million at June 30, 2011. During the six months ended June 30, 2011, total deposits increased $8.6 million, or 7.8%, with all of that growth in the certificate of deposit portfolio.  Certificates of deposit were used to lock in longer term funding at historic low interest rates.

The Bank issued preferred stock in 2009 as part of 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 second quarter resulting in net income available to common shareholders of $104,909. This compares to net income available to common shareholders of $101,982 for the quarter ended March 31, 2011 and $38,181 for the quarter ended June 30, 2010.

Non-interest income for the quarter ended June 30, 2011 was $26,747, as compared to $33,667 for the previous quarter. This decrease is primarily attributed to one-time loan fee income recognized during the first quarter.

Non-interest expense increased $16,611, or 2% in the three months ended June 30, 2011 as compared to the three months ended March 31, 2011. This increase was primarily due to higher professional fees and higher losses on sales of other real estate owned, partially offset by lower operating costs on other real estate owned due to the disposition of five properties during the quarter.

Selected Financial Data:

Balance Sheets (unaudited)


June 30,
2011

Dec. 31,
2010






Cash and due from banks

$   6,351,382

$   1,968,246


Investments

14,189,042

9,333,483


Loans

112,745,111

112,987,414


Allowance for loan losses

(1,447,138)

(1,399,993)


Premises & equipment

164,303

127,419


Other assets

2,358,453

3,341,266






Total assets

$ 134,361,153

$ 126,357,835






Non-interest bearing deposits

$   3,965,331

$   4,393,823


Interest-bearing checking

1,045,073

1,168,134


Money market

45,258,867

51,075,527


Time deposits

67,759,637

52,821,057


   Total deposits

118,028,908

109,458,541


Borrowings

928,000

1,928,000


Other liabilities

513,310

395,402






Total liabilities

119,470,218

111,781,943






Preferred stock

5,079,834

5,066,833


Common stock

1,453,094

1,453,094


Surplus

9,644,075

9,635,586


Accumulated other
  comprehensive income (loss)

54,682


(31,982)



Accumulated deficit

(1,340,750)

(1,547,639)


Total stockholders' equity

14,890,935

14,575,892






Total Liabilities &

    Stockholders' Equity

$ 134,361,153

$ 126,357,835





Performance Statistics

(unaudited)

Qtr Ended
June 30,
2011

Qtr Ended
Mar. 31,
2011

Qtr Ended
Dec. 31,
2010

Qtr Ended
Sept. 30,
2010

Qtr Ended
June 30,
2010







Net interest margin

3.75%

3.91%

3.77%

3.40%

3.25%

Nonperforming loans/total loans

2.77%

2.35%

2.23%

3.08%

2.43%

Nonperforming assets/

  Total assets

2.95%


3.32%


3.45%


3.34%


2.68%


Allowance for loan losses/

  Total loans

1.28%


1.27%


1.24%


1.23%


1.24%


Average loans/Average assets

84.9%

88.0%

87.8%

84.3%

81.7%

Non interest expenses*/

  Average assets

2.48%


2.53%


2.82%


2.15%


2.48%








* Annualized



Income Statements (unaudited)


Qtr Ended
June 30,
2011

Qtr Ended
Mar. 31,
2011

Qtr Ended
Dec. 31,
2010

Qtr Ended
Sept. 30,
2010

Qtr Ended
June 30,
2010







INTEREST INCOME






Loans

$1,587,688

$1,585,435

$1,594,093

$1,575,193

$1,530,023

Investments

63,007

55,056

28,027

39,327

99,889

Federal funds sold

-

147

704

822

821

Other

1,899

1,016

5,047

7,069

2,891

  Total interest income

1,652,594

1,641,654

1,627,871

1,622,411

1,633,624







INTEREST EXPENSE






Borrowings

8,867

13,973

23,060

28,818

33,407

Checking

743

708

817

865

819

Money Market

128,543

137,358

145,307

204,531

223,164

Time deposits

306,267

281,783

270,011

290,097

334,733

  Total interest expense

444,420

433,822

439,195

524,311

592,123







Net interest income

1,208,174

1,207,832

1,188,676

1,098,100

1,041,501







Provision for loan losses

151,933

179,756

120,888

202,576

84,766







NON INTEREST INCOME

26,747

33,667

22,428

23,332

21,190







NON INTEREST EXPENSE






Salaries & benefits

346,362

343,817

313,127

307,260

317,889

Occupancy & equipment

74,443

78,338

75,080

74,445

76,943

Data processing

51,552

50,909

49,154

46,908

50,704

Professional fees

105,808

88,589

99,816

78,435

189,922

Advertising

8,045

16,203

2,903

4,825

8,194

Other real estate owned expenses

85,370

53,258

237,791

14,387

1,650

Other non interest

      Expenses

141,442

165,297

146,188

160,288

164,072

Total non interest

      Expense

813,022

796,411

924,059

686,548

809,374







Pre-tax income

269,966

265,332

166,157

232,308

168,551







Tax expense

(92,919)

(91,212)

(57,296)

(79,731)

(58,233)







Net income

$  177,047

$  174,120

$  108,861

$  152,577

$  110,318







Preferred stock dividends and accretion

(72,138)

(72,138)

(72,138)

(72,138)

(72,137)







Net income available to common shareholders

$  104,909

$  101,982

$   36,723

$   80,439

$   38,181




Income Statements (unaudited)


Six Months
Ended
June 30,
2011

Six Months
Ended
June 30,
2010




INTEREST INCOME



Loans

$3,173,123

$3,252,667

Investments

118,063

211,222

Federal funds sold

147

1,318

Other

2,915

7,552

  Total interest income

3,294,248

3,252,667




INTEREST EXPENSE



Borrowings

22,840

73,457

Checking

1,451

1,583

Money Market

265,901

401,925

Time deposits

588,050

739,748

  Total interest expense

878,242

1,216,713




Net interest income

2,416,006

2,035,954




Provision for loan losses

331,689

247,232




NON INTEREST INCOME

60,414

43,623




NON INTEREST EXPENSE



Salaries & benefits

690,179

646,913

Occupancy & equipment

152,781

164,486

Data processing

102,461

102,282

Professional fees

194,397

246,463

Advertising

24,248

13,097

Other real estate owned

   expenses

138,628

5,579

Other non interest expense

306,739

304,567

Total non interest expense

1,609,433

1,483,387




Pre-tax income

535,298

348,958




Tax expense

(184,131)

(120,036)




Net income

$  351,167

$  228,922




Preferred stock dividends and accretion

(144,276)

(144,274)




Net income available to common shareholders

$  206,891

$   84,648




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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