First Resource Bank Announces Third Quarter Results

EXTON, Pa., Oct. 21, 2013 /PRNewswire/ --  First Resource Bank (OTC Bulletin Board: FRSB) announced net income for the three months ended September 30, 2013 was $263,366 as compared to $261,407 for the quarter ended June 30, 2013 and net income of $226,310 for the quarter ended September 30, 2012. After accounting for preferred stock dividends, net income available to common shareholders for the quarter ended September 30, 2013 was $250,659. This compares to net income available to common shareholders of $248,700 for the quarter ended June 30, 2013 and $187,499 for the quarter ended September 30, 2012.

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 $38,811 for the quarter ended September 30, 2012 to $12,707 for the quarter ended September 30, 2013. 

Net income for the nine months ended September 30, 2013 was $764,477 as compared to $683,302 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, 2013 was $726,356 as compared to $528,729 for the same period in the prior year. Preferred stock dividends declined $116,452, or 75% when comparing the first nine months of 2013 to 2012.

Glenn B. Marshall, President & CEO, stated, "Year to date results are on track for the most profitable year in our history.  These strong results enable us to grow our branch footprint next year into the West Chester market. We are very excited about the upcoming Exton branch relocation and the construction of our second branch on top of record earnings this year."

Net interest income was $1,392,110 for the quarter ended September 30, 2013 as compared to $1,370,837 for the previous quarter.  The net interest margin declined 22 basis points from 3.89% for the quarter ended June 30, 2013 to 3.67% for the quarter ended September 30, 2013. The overall yield on interest earning assets decreased 25 basis points during the third quarter due to higher cash and short term investments as strong deposit growth exceeded loan growth. Loan yields declined 4 basis points during the third quarter due to continued intense competition for new loans, which has slowed loan growth, 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 4 basis points during the third quarter, led by a 5 basis point decline in the cost of certificates of deposit. 

Deposits increased $8.0 million, or 6.2% from $130.4 million at June 30, 2013 to $138.4 million at September 30, 2013. During the third quarter, certificates of deposit decreased $735 thousand, or 0.9%, from $78.5 million at June 30, 2013 to $77.8 million at September 30, 2013. Money market deposits increased $7.2 million, or 16.7%, from $43.1 million at June 30, 2013 to $50.4 million at September 30, 2013. Non-interest bearing deposits increased $835 thousand, or 12.9% from $6.4 million at June 30, 2013 to $7.3 million at September 30, 2013.

The loan portfolio grew $336 thousand, or 0.3%, during the third quarter from $134.0 million at June 30, 2013 to $134.4 million at September 30, 2013. Significant growth in the commercial real estate portfolio was offset by payoffs of construction loans during the quarter.

The following table illustrates the composition of the loan portfolio:


Sept. 30,

2013

Dec. 31,

2012

Sept. 30,
2012







Commercial real estate

$ 87,800,748

$ 80,500,799

$ 79,138,808


Commercial construction

7,972,891

8,863,677

9,343,766


Commercial business

13,894,056

14,874,480

14,274,151


Consumer

24,706,611

24,433,976

25,187,745







Total loans

$134,374,306

$128,672,932

$127,944,470


The allowance for loan losses to total loans was 0.93% at September 30, 2013, as compared to 1.04% at June 30, 2013, 1.12% at December 31, 2012 and 1.21% at September 30, 2012. Non-performing assets, which include non-performing loans of $2.8 million and other real estate owned of $799 thousand, totaled $3.6 million at September 30, 2013. Non-performing assets to total assets decreased from 2.55% at June 30, 2013 to 2.25% at September 30, 2013 due to sales of other real estate owned as well as an increase in total assets. 

Non-interest income for the quarter ended September 30, 2013 was $86,876, as compared to $88,030 for the previous quarter.

Non-interest income for the nine months ended September 30, 2013 was $267,939, as compared to $188,151 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 the future branch location in West Chester.

Non-interest expense increased $49,400, or 5.2%, in the three months ended September 30, 2013 as compared to the three months ended June 30, 2013. This increase was due to higher salaries and benefits, higher depreciation costs and higher other non interest expenses.

Non-interest expense increased $260,381, or 9.9%, for the nine months ended September 30, 2013 as compared to the nine months ended September 30, 2012. This increase was mainly due to higher salaries and benefits associated with a higher headcount, higher depreciation due to the purchase of two buildings over the past year and higher other real estate owned expenses, offset by lower professional fees.


Selected Financial Data:

Balance Sheets (unaudited)









September 30,

2013

December 31,

2012






Cash and due from banks

$   9,977,882

$   5,633,237


Investments

9,917,252

10,688,356


Loans

134,374,306

128,672,932


Allowance for loan losses

(1,254,024)

(1,439,935)


Premises & equipment

3,398,524

2,671,344


Other assets

4,929,206

4,825,042






Total assets

$ 161,343,146

$ 151,050,976






Non-interest bearing deposits

$   7,284,751

$   5,236,362


Interest-bearing checking

2,983,292

6,921,675


Money market

50,352,097

43,363,298


Time deposits

77,779,683

75,567,700


  Total deposits

138,399,823

131,089,035


Borrowings

5,599,000

3,420,000


Other liabilities

603,403

481,168






Total liabilities

144,602,226

134,990,203






Preferred stock

5,083,000

5,083,000


Common stock

1,607,706

1,528,243


Surplus

9,501,229

9,565,547


Accumulated other

  comprehensive income (loss)

118,542

179,324


Accumulated deficit

430,443

(295,341)


Total stockholders' equity

16,740,920

16,060,773






Total Liabilities &

     Stockholders' Equity

$ 161,343,146

$ 151,050,976


 


Performance Statistics
(unaudited)

Qtr Ended

Sept. 30,

2013

Qtr Ended

June 30,

2013

Qtr Ended

Mar. 31,

2013

Qtr Ended

Dec. 31,

2012

Qtr Ended

Sept. 30,

2012







Net interest margin

3.67%

3.89%

3.79%

3.85%

3.85%

Nonperforming loans/total loans

2.11%

2.19%

2.34%

2.34%

2.61%

Nonperforming assets/

   Total assets

2.25%

2.55%

2.59%

2.45%

3.02%

Allowance for loan losses/

   Total loans

0.93%

1.04%

1.02%

1.12%

1.21%

Average loans/Average assets

84.4%

88.5%

86.7%

87.2%

86.2%

Non-interest expenses*/

   Average assets

2.52%

2.57%

2.55%

2.47%

2.43%

Earnings per share – basic and

   Diluted

$0.16

$0.16

$0.15

$0.14

$0.12







* Annualized

 

Income Statements (unaudited)


Qtr Ended
Sept. 30,

2013

Qtr Ended
June 30,

2013

Qtr Ended
Mar. 31,

2013

Qtr Ended
Dec. 31,

2012

Qtr Ended
Sept. 30,

2012







INTEREST INCOME






Loans

$1,701,342

$1,677,372

$1,617,539

$1,671,869

$1,668,250

Investments

48,632

41,480

49,815

53,718

56,433

Federal funds sold

-

-

-

-

-

Other

4,436

464

1,513

88

2,414

 Total interest income

1,754,410

1,719,316

1,668,867

1,725,675

1,727,097







INTEREST EXPENSE






Borrowings

14,527

10,450

9,589

10,974

8,358

Checking

695

637

772

565

801

Money Market

92,181

82,420

84,065

82,226

87,113

Time deposits

254,897

254,972

253,689

267,497

276,164

 Total interest expense

362,300

348,479

348,115

361,262

372,436







Net interest income

1,392,110

1,370,837

1,320,752

1,364,413

1,354,661







Provision for loan losses

87,064

119,002

131,787

174,979

206,403







Net interest income
after provision for
loan losses

1,305,046

1,251,835

1,188,965

1,189,434

1,148,258







NON-INTEREST INCOME

86,876

88,030

93,033

91,209

73,267







NON-INTEREST EXPENSE






Salaries & benefits

486,315

469,194

483,200

438,058

454,317

Occupancy & equipment

96,004

90,158

95,357

88,799

80,580

Data processing

61,136

65,009

63,400

35,430

57,384

Professional fees

63,585

64,576

76,786

50,791

59,616

Advertising

34,268

31,735

15,311

15,978

19,071

Other real estate owned expenses

68,514

62,075

20,000

117,646

36,866

Other non-interest

     Expenses

197,043

174,718

179,327

176,983

181,174

Total non-interest

     Expense

1,006,865

957,465

933,381

923,685

889,008







Pre-tax income

385,057

382,400

348,617

356,958

332,517







Tax expense

(121,691)

(120,993)

(108,913)

(122,703)

(106,207)







Net income

$  263,366

$  261,407

$  239,704

$  234,255

$  226,310







Preferred stock dividends and accretion

 

(12,707)

 

(12,707)

 

(12,707)

 

(12,797)

 

(38,811)







Net income available to common shareholders

 

$  250,659

 

$  248,700

 

$  226,997

 

$  221,458

 

$  187,499

 

 

Income Statements (unaudited)


Nine Months

Ended
Sept. 30,

2013

 

Nine Months

Ended

Sept. 30,

2012




INTEREST INCOME



Loans

$4,996,253

$4,951,464

Investments

139,927

176,317

Federal funds sold

-

-

Other

6,413

5,814

 Total interest income

5,142,593

5,133,595




INTEREST EXPENSE



Borrowings

34,566

19,930

Checking

2,104

3,163

Money Market

258,666

290,223

Time deposits

763,558

858,335

 Total interest expense

1,058,894

1,171,651




Net interest income

4,083,699

3,961,944




Provision for loan losses

337,853

516,071




Net interest income after provision for loan losses

3,745,846

3,445,873




NON-INTEREST INCOME

267,939

188,151




NON-INTEREST EXPENSE



Salaries & benefits

1,438,709

1,309,988

Occupancy & equipment

281,519

244,121

Data processing

189,545

168,846

Professional fees

204,947

241,053

Advertising

81,314

45,292

Other real estate owned

    expenses

150,589

123,209

Other non-interest expense

551,088

504,821

Total non-interest expense

2,897,711

2,637,330




Pre-tax income

1,116,074

996,694




Tax expense

(351,597)

(313,392)




Net income

$  764,477

$  683,302




Preferred stock dividends and accretion

(38,121)

(154,573)




Net income available to common shareholders

$  726,356

$  528,729

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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