First Bank of Delaware Reports First Quarter Earnings

WILMINGTON, Del., May 4, 2011 /PRNewswire/ -- First Bank of Delaware ("the Company") (OTCBB:FBOD), today reported first quarter 2011 earnings of $2.1 million or $0.18 per share, compared to $339,000 or $0.03 per share for the first quarter 2010, an improvement of $1.8 million.

Highlights include:

Net interest income for the first quarter of 2011 was $3.9 million, an increase of $681,000 or 21.3% from $3.2 million for the first quarter of 2010. The improvement in net interest income was due primarily to an increase in average interest earning assets, primarily commercial Loans, and improvement in the interest rates earned on those assets and a lower cost of funds.  

Net interest margin for the first quarter of 2011 was 7.48% a decrease of 1.63% from 9.11% for the first quarter of 2010. The margin decrease was mainly the result of increased cash balances sold as fed funds which are lower yielding assets and have the effect of decreasing our margin.  In addition, average interest bearing deposits increased $38.4 million to $115.0 million, or 50.1% from the first quarter of 2010.  Net interest margin excluding short-term loans, which the Company discontinued offering on December 31, 2010, was 3.07% and 2.95% for the first quarter of 2011 and 2010, respectively.  The improvement was due primarily to a decrease in the rates paid on interest-bearing deposits.

Total shareholder's equity at March 31, 2011 was $46.5 million. The Company's Tier 1 Leverage Capital Ratio was 19.39% and the Total Risk Based Capital Ratio was 36.32%.    

Total assets at March 31, 2011 were $229.9 million, representing an increase of $59.0 million or 34.6% over March 31, 2010. The increase was primarily the result of increases in overnight fed funds sold of $31.3 million and net loans of $26.3 million.  Total deposits at March 31, 2011 were $179.2 million, an increase of $53.2 million from $126.0 million at March 31, 2010.

Total loans at March 31, 2011 were $126.8 million, an increase of $24.9 million or 24.5% from March 31, 2010. The $24.9 million increase in total loans includes an increase of $27.6 million of commercial loans or a 29.3% increase from $94.2 million at March 31, 2010.  The increase resulted from several new commercial lending relationships that were added between the periods. The increase in commercial loans continues to be spread among various types of relationships including commercial and industrial, owner occupied real estate, commercial construction and commercial real estate. With an increase in the number of loan production officers, we anticipate a continued increase in our commercial loan portfolio. The Company sold its  $4.0 million short-term consumer loan portfolio in the first quarter of 2011.

Total deposits increased $53.2 million or 42.2% to $179.2 million at March 31, 2011 from $126.0 million at March 31, 2010.  The $53.2 million increase in deposits was primarily due to a $66.7 million increase in core deposits which includes demand and money market accounts.  This increase was partially offset by a $10.0 million reduction in brokered certificates of deposits and a decrease in retail certificates of deposits of $3.5 million. Our commercial customers continue to establish higher deposit balances with us and we have expanded our electronic payment offerings which have lead to additional deposit growth and fee income.

At March 31, 2011, our non-performing assets were $338,000, an $3.0 million decrease from $3.3 million at March 31, 2010.  This decrease was due primarily to the sale of a non-accruing loan. Non-performing assets represented 0.15% of total assets at March 31, 2011 versus 1.95% at March 31, 2010.  Non-performing assets as of March 31, 2011 consist of two OREO properties totaling $338,000. The Company charged off five unsecured loans totaling $750,000 during the first quarter.

Due to changes in laws, regulations and policies in 2010 concerning loans to sub-prime borrowers, in the fourth quarter of 2010 the Bank made the decision to exit its national consumer installment loan business. The decision to cease offering these loans will continue to have a materially adverse effect on earnings. The Company sold these loans at par during the first quarter of 2011. Revenues from the internet installment product included Interest Income of $2.3 million and Fee Income of $1.7 million for the first quarter of 2011 compared to $2.2 million and $784,000 in the first quarter of 2010. Revenue from these loans was 51% of the Company's total revenues of $7.7 million for the first quarter of 2011.  The Company will continue to earn fee income for this product until the loans are repaid.  Because of the nine month average duration of the loans, it is expected that a majority of the income will be earned and loans repaid by September 2011.  The Company also lost certain core deposit balances totaling approximately $20 million as a result of the termination of this product.  

The Company's CEO and President, Alonzo J. Primus, commented, "Our earnings have increased from prior year.  We continue to focus on growing our commercial loans and core deposits and increasing fee income. The addition of several new lenders lead to commercial loan growth of 29.3%."  Mr. Primus added: "We continue to attract high quality customers as a result of our high capital levels, personal service and attention, strong loan portfolio and high amounts of liquidity. We are maintaining pricing and underwriting discipline in growing our loan portfolio and are diversifying the types of loans that we make. This has allowed us to expand our commercial customer base in the Delaware market and in the contiguous counties of Pennsylvania. We believe our opportunities for future loan, deposit, card product and fee income growth remain strong."

First Bank of Delaware is a full-service, state-chartered commercial bank, whose deposits are insured by the Federal Deposit Insurance Corporation (FDIC).

The Company provides diversified financial products through two locations in New Castle County, and additionally offers a variety of loan and card products nationally.

The Company may from time to time make written or oral "forward-looking statements", including statements contained in this release and in the Company's filings with the FDIC. These forward-looking statements include statements with respect to the Company's beliefs, plans, objectives, goals, expectations, anticipations, estimates, and intentions that are subject to significant risks and uncertainties and are subject to change based on various factors, many of which are beyond the Company's control. The words "may", "could", "should", "would", "believe", "anticipate", "estimate", "expect", "intend", "plan", and similar expressions are intended to identify forward-looking statements. All such statements are made in good faith by the Company pursuant to the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. The Company does not undertake to update any forward-looking statement, whether written or oral, that may be made from time to time by or on behalf of the Company.

SOURCE First Bank of Delaware