2014

First Resource Bank Announces Third Quarter Results

EXTON, Pa., Oct. 22, 2012 /PRNewswire/ -- First Resource Bank (OTC Bulletin Board: FRSB) announced net income for the three months ended September 30, 2012 was $226,310 as compared to $213,254 for the quarter ended June 30, 2012 and net income of $259,350 for the quarter ended September 30, 2011. After accounting for preferred stock dividends, net income available to common shareholders for the quarter ended September 30, 2012 was $187,499. This compares to net income available to common shareholders of $161,030 for the quarter ended June 30, 2012 and $126,895 for the quarter ended September 30, 2011.

Net income for the nine months ended September 30, 2012 of $683,302 compares to net income of $610,517 for the same period in the prior year. After accounting for preferred stock dividends, net income available to common shareholders for the nine months ended September 30, 2012 was $528,729, as compared to $333,786 for the same period in the prior year.

Glenn B. Marshall, President & CEO, stated, "One of the largest contributors to the year over year increase in net income available to common shareholders is the preferred stock dividend savings.  Due to our strong loan growth over the past twelve months, the Small Business Lending Fund preferred stock has proven to be a far less expensive capital source and our shareholders have seen the benefits in 2012."

Net interest income was $1,354,661 for the quarter ended September 30, 2012 as compared to $1,304,376 for the previous quarter.  The net interest margin expanded from 3.76% during the second quarter of 2012 to 3.85% during the third quarter of 2012. The overall yield on interest earning assets was unchanged despite falling loan yields due to the deployment of lower yielding excess cash balances into loans. 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 9 basis points during the third quarter.  Deposits costs were down across every segment of the deposit portfolio during the third quarter. 

The allowance for loan losses to total loans was 1.21% at September 30, 2012 as compared to 1.16% at June 30, 2012, 1.24% at December 31, 2011 and 1.24% at September 30, 2011. Non-performing assets, which include non-performing loans of $3.3 million and other real estate owned of $1.1 million, totaled $4.4 million at September 30, 2012. Non-performing assets to total assets decreased from 3.04% at June 30, 2012 to 3.02% at September 30, 2012.  

The loan portfolio grew $4.0 million, or 3.2%, during the third quarter from $123.9 million at June 30, 2012 to $127.9 million at September 30, 2012. The majority of this loan growth was experienced in the commercial real estate loan portfolio. During the first nine months of 2012, the loan portfolio grew $10.5 million, or 8.9%, from $117.5 million at December 31, 2011 to $127.9 million at September 30, 2012.

The following table illustrates the composition of the loan portfolio:


Sept. 30,

2012

Dec. 31,
2011

Sept. 30,
2011







Commercial real estate

$ 79,138,808

$ 71,300,163

$ 69,723,326


Commercial construction

9,343,766

7,165,979

5,867,000


Commercial business

14,274,151

13,507,058

12,723,271


Consumer

25,187,745

25,483,053

26,108,408







Total loans

$127,944,470

$117,456,253

$114,422,005


 

Consistent with the goals of the Small Business Lending Fund, the Bank has grown qualified small business loans over the baseline by 22%. This growth will bring the preferred stock dividend cost down to 1.00% for the first quarter of 2013 and 1.007% for the fourth quarter of 2012, as compared to 3.054% for the third quarter and 4.11% for the second quarter.

Deposits decreased $4.1 million, or 3.2% from $129.8 million at June 30, 2012 to $125.7 million at September 30, 2012. During the third quarter, certificates of deposit decreased $610 thousand, or 0.8%, from $74.9 million at June 30, 2012 to $74.3 million at September 30, 2012. Money market deposits decreased $3.9 million, or 8.6%, from $45.7 million at June 30, 2012 to $41.8 million at September 30, 2012. During the first nine months of 2012, total deposits grew $5.8 million, or 4.8%, from $120.0 million at December 31, 2011 to $125.7 million at September 30, 2012.

Premises and equipment increased from $162 thousand at December 31, 2011 to $2.7 million at September 30, 2012, primarily due to the purchase of a second branch site during the third quarter.  This site 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 September 30, 2012 was $73,267, as compared to $59,705 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 nine months ended September 30, 2012 was $188,151, as compared to $131,117 for the same period in 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.  

Non-interest expense decreased $15,468, or 1.7% in the three months ended September 30, 2012 as compared to the three months ended June 30, 2012. This decrease was due to lower other real estate owned expenses and lower professional fees. Non-interest expense for the nine months ended September 30, 2012 was $2.6 million, an increase of $205 thousand, or 8.4%, as compared to the same period in 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)





September 30,

2012

December 31,

2011






Cash and due from banks

$   1,033,224

$   1,554,676


Investments

11,290,499

12,904,792


Loans

127,944,470

117,456,253


Allowance for loan losses

(1,542,264)

(1,458,824)


Premises & equipment

2,692,341

162,080


Other assets

5,346,102

5,400,055






Total assets

$ 146,764,372

$ 136,019,032






Non-interest bearing deposits

$   7,263,605

$   5,799,857


Interest-bearing checking

2,367,079

1,499,933


Money market

41,757,748

42,006,348


Time deposits

74,324,082

70,637,139


  Total deposits

125,712,514

119,943,277


Borrowings

4,760,000

-


Other liabilities

434,039

859,456






Total liabilities

130,906,553

120,802,733






Preferred stock

5,083,000

5,083,000


Common stock

1,527,385

1,453,094


Surplus

9,562,183

9,629,144


Accumulated other

  comprehensive income (loss)

202,055

96,174


Accumulated deficit

(516,804)

(1,045,113)


Total stockholders' equity

15,857,819

15,216,299






Total Liabilities &

     Stockholders' Equity

$ 146,764,372

$ 136,019,032


 

Performance Statistics (unaudited)

Qtr Ended

Sept. 30,

2012

Qtr Ended

June 30,

2012

Qtr Ended

Mar. 31,

2012

Qtr Ended

Dec. 31,

2011

Qtr Ended

Sept. 30,

2011







Net interest margin

3.85%

3.76%

3.91%

3.90%

3.77%

Nonperforming loans/total loans

2.61%

2.75%

2.48%

1.56%

2.23%

Nonperforming assets/

   Total assets

3.02%

3.04%

2.93%

2.20%

2.71%

Allowance for loan losses/

   Total loans

1.21%

1.16%

1.17%

1.24%

1.24%

Average loans/Average assets

86.2%

84.9%

84.4%

84.4%

84.9%

Non interest expenses*/

   Average assets

2.43%

2.52%

2.45%

2.55%

2.32%

Earnings per share – basic and

   diluted

$0.12

$0.11

$0.12

$0.12

$0.09







* Annualized






 

Income Statements (unaudited)



Qtr Ended
Sept. 30,

2012

Qtr Ended
June 30,

2012

Qtr Ended
Mar. 31,

2012

Qtr Ended
Dec. 31,

2011

Qtr Ended
Sept. 30,

2011







INTEREST INCOME






Loans

$1,668,250

$1,640,648

$1,642,566

$1,651,201

$1,628,005

Investments

56,433

58,312

61,572

63,897

71,048

Federal funds sold

-

-

-

-

-

Other

2,414

2,383

1,017

2,563

3,644

 Total interest income

1,727,097

1,701,343

1,705,155

1,717,661

1,702,697







INTEREST EXPENSE






Borrowings

8,358

6,925

4,647

-

2,338

Checking

801

1,398

964

881

877

Money Market

87,113

101,368

101,742

101,429

111,541

Time deposits

276,164

287,276

294,895

313,929

316,255

 Total interest expense

372,436

396,967

402,248

416,239

431,011







Net interest income

1,354,661

1,304,376

1,302,907

1,301,422

1,271,686







Provision for loan losses

206,403

149,677

159,991

119,904

126,065







Net interest income after provision for loan losses

1,148,258

1,154,699

1,142,916

1,181,518

1,145,621







NON INTEREST INCOME

73,267

59,705

55,179

38,944

39,849







NON INTEREST EXPENSE






Salaries & benefits

454,317

420,646

435,025

408,677

357,253

Occupancy & equipment

80,580

85,686

77,855

83,108

79,946

Data processing

57,384

55,748

55,714

55,301

53,041

Professional fees

59,616

87,868

93,569

77,539

87,042

Advertising

19,071

12,952

13,269

9,799

8,476

Other real estate owned expenses

36,866

71,100

15,243

90,149

52,502

Other non interest

     Expenses

181,174

170,476

153,171

147,168

153,718

Total non interest

     Expense

889,008

904,476

843,846

871,741

791,978







Pre-tax income

332,517

309,928

354,249

348,721

393,492







Tax expense

(106,207)

(96,674)

(110,511)

(115,739)

(134,142)







Net income

$  226,310

$  213,254

$  243,738

$  232,982

$  259,350







Preferred stock dividends and accretion

 

(38,811)

 

(52,224)

 

(63,538)

 

(64,242)

 

(132,455)







Net income available to common shareholders

 

$  187,499

 

$  161,030

 

$  180,200

 

$  168,740

 

$  126,895

 

Income Statements (unaudited)



Nine Months

Ended
Sept. 30,

2012

Nine Months

Ended

Sept. 30,

2011




INTEREST INCOME



Loans

$4,951,464

$4,801,128

Investments

176,317

189,111

Federal funds sold

-

147

Other

5,814

6,559

 Total interest income

5,133,595

4,996,945




INTEREST EXPENSE



Borrowings

19,930

25,178

Checking

3,163

2,328

Money Market

290,223

377,443

Time deposits

858,335

904,304

 Total interest expense

1,171,651

1,309,253




Net interest income

3,961,944

3,687,692




Provision for loan losses

516,071

457,754




Net interest income after provision for loan losses

3,445,873

3,229,938




NON INTEREST INCOME

188,151

131,117




NON INTEREST EXPENSE



Salaries & benefits

1,309,988

1,047,432

Occupancy & equipment

244,121

232,727

Data processing

168,846

155,502

Professional fees

241,053

281,439

Advertising

45,292

32,724

Other real estate owned

    expenses

123,209

221,984

Other non interest expense

504,821

460,457

Total non interest expense

2,637,330

2,432,265




Pre-tax income

996,694

928,790




Tax expense

(313,392)

(318,273)




Net income

$  683,302

$  610,517




Preferred stock dividends and accretion

(154,573)

(276,731)




Net income available to common shareholders

$  528,729

$  333,786


 

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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