First Resource Bank Announces Second Quarter Results

EXTON, Pa., July 24, 2013 /PRNewswire/ -- First Resource Bank (OTC Bulletin Board: FRSB) announced net income for the three months ended June 30, 2013 was $261,407 as compared to $239,704 for the quarter ended March 31, 2013 and net income of $213,254 for the quarter ended June 30, 2012. After accounting for preferred stock dividends, net income available to common shareholders for the quarter ended June 30, 2013 was $248,700. This compares to net income available to common shareholders of $226,997 for the quarter ended March 31, 2013 and $161,030 for the quarter ended June 30, 2012.

Glenn B. Marshall, President & CEO, stated, "Second quarter 2013 results had the highest net income and net income to common shareholders in the Bank's history.  These record results combined with 2014's branching plans has made for an exciting time at First Resource Bank. We are incredibly grateful for the support of our customers and the hard work of our employees and directors."

Preferred stock dividends continue to accrue at the lowest rate possible, 1%, under the Small Business Lending Fund due to the Bank's strong loan growth over the past few years. Preferred stock dividend costs declined 76% from $52,224 for the quarter ended June 30, 2012 to $12,707 for the quarter ended June 30, 2013. 

Net interest income was $1,370,837 for the quarter ended June 30, 2013 as compared to $1,320,752 for the previous quarter.  The net interest margin improved 10 basis points from 3.79% for the quarter ended March 31, 2013 to 3.89% for the quarter ended June 30, 2013. The overall yield on interest earning assets increased 8 basis points during the second quarter, with loan yields unchanged from the prior quarter. 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 1 basis point during the second quarter, led by a 3 basis point decline in the cost of certificates of deposit. 

The allowance for loan losses to total loans was 1.04% at June 30, 2013, as compared to 1.02% at March 31, 2013, 1.12% at December 31, 2012 and 1.16% at June 30, 2012. Non-performing assets, which include non-performing loans of $2.9 million and other real estate owned of $941 thousand, totaled $3.9 million at June 30, 2013. Non-performing assets to total assets decreased from 2.59% at March 31, 2013 to 2.55% at June 30, 2013 due to a decrease in non-accrual loans partially offset by an increase in other real estate owned, coupled with an increase in total assets.  

The loan portfolio grew $2.8 million, or 2.1%, during the second quarter from $131.3 million at March 31, 2013 to $134.0 million at June 30, 2013. The majority of the loan growth was in the commercial real estate loan portfolio.

The following table illustrates the composition of the loan portfolio:


June 30,

2013

Dec. 31,

2012

June 30,
2012







Commercial real estate

$ 86,395,687

$ 80,500,799

$ 75,867,916


Commercial construction

9,277,161

8,863,677

9,583,465


Commercial business

13,456,844

14,874,480

13,927,399


Consumer

24,908,415

24,433,976

24,547,488







Total loans

$134,038,107

$128,672,932

$123,926,268


Deposits increased $2.7 million, or 2.1% from $127.7 million at March 31, 2013 to $130.4 million at June 30, 2013. During the second quarter, certificates of deposit increased $4.4 million, or 5.9%, from $74.1 million at March 31, 2013 to $78.5 million at June 30, 2013. Money market deposits decreased $2.5 million, or 5.4%, from $45.6 million at March 31, 2013 to $43.1 million at June 30, 2013. Non-interest bearing deposits increased $772 thousand, or 13.6%, from $5.7 million at March 31, 2013 to $6.4 million at June 30, 2013.

Non-interest income for the quarter ended June 30, 2013 was $88,030, as compared to $93,033 for the previous quarter.

Non-interest income for the six months ended June 30, 2013 was $181,063, as compared to $114,884 for the same period in the prior year.  This increase was due to the addition of rental income on a building acquired in August 2012 to house a future branch location.

Non-interest expense increased $24,084, or 2.6%, in the three months ended June 30, 2013 as compared to the three months ended March 31, 2013. This increase was due to higher other real estate owned expenses and higher advertising expenses, offset by lower salaries and benefits expenses, lower occupancy expenses, lower professional fees and lower other non-interest expenses.

Non-interest expense increased $142,524, or 8.2%, for the six months ended June 30, 2013 as compared to the six months ended June 30, 2012. This increase was mainly due to higher salaries and benefits associated with a higher headcount.

 

    Selected Financial Data:

 


Balance Sheets (unaudited)



June 30,

2013

December 31,

2012






Cash and due from banks

$   2,032,863

$   5,633,237


Investments

8,692,769

10,688,356


Loans

134,038,107

128,672,932


Allowance for loan losses

(1,389,870)

(1,439,935)


Premises & equipment

3,347,758

2,671,344


Other assets

4,966,715

4,825,042






Total assets

$ 151,688,342

$ 151,050,976






Non-interest bearing deposits

$   6,449,980

$   5,236,362


Interest-bearing checking

2,254,297

6,921,675


Money market

43,140,296

43,363,298


Time deposits

78,514,196

75,567,700


  Total deposits

130,358,769

131,089,035


Borrowings

4,295,000

3,420,000


Other liabilities

551,719

481,168






Total liabilities

135,205,488

134,990,203






Preferred stock

5,083,000

5,083,000


Common stock

1,606,677

1,528,243


Surplus

9,496,800

9,565,547


Accumulated other

  comprehensive income (loss)

116,592

179,324


Accumulated deficit

179,785

(295,341)


Total stockholders' equity

16,482,854

16,060,773






Total Liabilities &

     Stockholders' Equity

$ 151,688,342

$ 151,050,976


 

Performance Statistics (unaudited)

 

Qtr Ended

June 30,

2013

 

Qtr Ended

Mar. 31,

2013

 

Qtr Ended

Dec. 31,

2012

 

Qtr Ended

Sept. 30,

2012

 

Qtr Ended

June 30,

2012







Net interest margin

3.89%

3.79%

3.85%

3.85%

3.76%

Nonperforming loans/total loans

2.19%

2.34%

2.34%

2.61%

2.75%

Nonperforming assets/

   Total assets

2.55%

2.59%

2.45%

3.02%

3.04%

Allowance for loan losses/

   Total loans

1.04%

1.02%

1.12%

1.21%

1.16%

Average loans/Average assets

88.5%

86.7%

87.2%

86.2%

84.9%

Non interest expenses*/

   Average assets

2.57%

2.55%

2.47%

2.43%

2.52%

Earnings per share – basic and

   Diluted

$0.16

$0.15

$0.14

$0.12

$0.11

 

* Annualized

 






 

Income Statements (unaudited)


 

Qtr Ended
June 30,

2013

 

Qtr Ended
Mar. 31,

2013

 

Qtr Ended
Dec. 31,

2012

 

Qtr Ended
Sept. 30,

2012

 

Qtr Ended
June 30,

2012







INTEREST INCOME






Loans

$1,677,372

$1,617,539

$1,671,869

$1,668,250

$1,640,648

Investments

41,480

49,815

53,718

56,433

58,312

Federal funds sold

-

-

-

-

-

Other

464

1,513

88

2,414

2,383

 Total interest income

1,719,316

1,668,867

1,725,675

1,727,097

1,701,343







INTEREST EXPENSE






Borrowings

10,450

9,589

10,974

8,358

6,925

Checking

637

772

565

801

1,398

Money Market

82,420

84,065

82,226

87,113

101,368

Time deposits

254,972

253,689

267,497

276,164

287,276

 Total interest expense

348,479

348,115

361,262

372,436

396,967







Net interest income

1,370,837

1,320,752

1,364,413

1,354,661

1,304,376







Provision for loan losses

119,002

131,787

174,979

206,403

149,677







Net interest income after provision for loan losses

1,251,835

1,188,965

1,189,434

1,148,258

1,154,699







NON INTEREST INCOME

88,030

93,033

91,209

73,267

59,705







NON INTEREST EXPENSE






Salaries & benefits

469,194

483,200

438,058

454,317

420,646

Occupancy & equipment

90,158

95,357

88,799

80,580

85,686

Data processing

65,009

63,400

35,430

57,384

55,748

Professional fees

64,576

76,786

50,791

59,616

87,868

Advertising

31,735

15,311

15,978

19,071

12,952

Other real estate owned expenses

62,075

20,000

117,646

36,866

71,100

Other non interest

     Expenses

174,718

179,327

176,983

181,174

170,476

Total non interest

     Expense

957,465

933,381

923,685

889,008

904,476







Pre-tax income

382,400

348,617

356,958

332,517

309,928







Tax expense

(120,993)

(108,913)

(122,703)

(106,207)

(96,674)







Net income

$  261,407

$  239,704

$  234,255

$  226,310

$  213,254







Preferred stock dividends and accretion

 

(12,707)

 

(12,707)

 

(12,797)

 

(38,811)

 

(52,224)







Net income available to common shareholders

 

$  248,700

 

$  226,997

 

$  221,458

 

$  187,499

 

$  161,030

 

Income Statements (unaudited)


 

 

Six Months

Ended
June 30,

2013

 

 

Six Months

Ended

June 30,

2012




INTEREST INCOME



Loans

$3,294,911

$3,283,214

Investments

91,295

119,884

Federal funds sold

-

-

Other

1,977

3,400

 Total interest income

3,388,183

3,406,498




INTEREST EXPENSE



Borrowings

20,039

11,572

Checking

1,409

2,362

Money Market

166,485

203,110

Time deposits

508,661

582,171

 Total interest expense

696,594

799,215




Net interest income

2,691,589

2,607,283




Provision for loan losses

250,789

309,668




Net interest income after provision for loan losses

2,440,800

2,297,615




NON INTEREST INCOME

181,063

114,884




NON INTEREST EXPENSE



Salaries & benefits

952,394

855,671

Occupancy & equipment

185,515

163,541

Data processing

128,409

111,462

Professional fees

141,362

181,437

Advertising

47,046

26,221

Other real estate owned

    expenses

82,075

86,343

Other non interest expense

354,045

323,647

Total non interest expense

1,890,846

1,748,322




Pre-tax income

731,017

664,177




Tax expense

(229,906)

(207,185)




Net income

$  501,111

$  456,992




Preferred stock dividends and accretion

(25,414)

(115,762)




Net income available to common shareholders

$  475,697

$  341,230

 

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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