First Bank of Delaware Reports Second Quarter and Year to Date Earnings

WILMINGTON, Del., Aug. 3, 2011 /PRNewswire/ -- First Bank of Delaware ("the Company") (OTCBB: FBOD), today reported second quarter 2011 earnings of $1.0 million or $0.09 per diluted share, compared to $459,000 or $0.04 per diluted share for the comparable prior year period. The increase in earnings reflected the growth of our commercial loan portfolio and increases in non-interest income. Earnings for the six month period ended June 30, 2011 were $3.1 million or $0.27 per diluted share based on average shares outstanding of 11,533,852, compared to $798,000 or $0.07 per diluted share for the comparable prior year period based on average shares outstanding of 11,447,937. The increased earnings of $2.3 million are primarily the result of increases in non interest income. At June 30, 2011, total shareholders' equity was $47.5 million and our leverage ratio was 20.68%. The total risk-based capital ratio was 35.96%, and our book value per share was $4.16 at June 30, 2011.

Second quarter 2011 earnings of $1.0 million are an improvement of $552,000 or 120.3% from earnings of $459,000 reported for the second quarter of 2010.  This increase is primarily due to a reduction in the provision for loan losses of $1.0 million, due primarily to the sale of the short term consumer loan portfolio in the first quarter of 2011, and an increase in non-interest income of $1.6 million. The increase in non-interest income was primarily due to fees from our merchant acquiring program and short term consumer loan portfolio. These increases were offset by a decrease of $1.7 million in net interest income primarily due to $2.1 million reduced interest earned from the short-term consumer loan product which was discontinued on December 31, 2010. This decrease was partially offset by an increase of $417,000 in interest earned from growth in loan receivables.

Earnings for the six months ended June 30, 2011 are $3.1 million, an increase of $2.3 million from $798,000 for the six months ended June 30, 2010. This increase is primarily due to a reduction in the provision for loan losses of $1.3 million, due primarily to the sale of the short term consumer loan portfolio in the first quarter of 2011, and an increase in non-interest income of $4.3 million. The increase in non-interest income was primarily due to fees from our merchant acquiring program and short term consumer loan portfolio. These increases were offset by a decrease of $1.0 million in net interest income primarily due to reduced interest earned of $2.0 million from the short-term consumer loan product which was discontinued on December 31, 2010. This decrease was partially offset by an increase of $1.0 million in interest earned from growth in loan receivables.

Net interest margin for the second quarter of 2011 was 3.29% a decrease of 5.00% from 8.29% for the second quarter of 2010. The margin decrease was mainly the result of discontinuing the short-term consumer loan program.  In addition, average interest bearing deposits increased $17.5 million to $106.7 million, or 19.6% from the second quarter of 2010.  Net interest margin excluding short-term loans, which the Company discontinued offering on December 31, 2010, was 3.12% for the second quarter of 2010.  The improvement was due primarily to a decrease in the rates paid on interest-bearing deposits.

Net interest margin for the six months ended June 30, 2011 was 5.31% a decrease of 3.37% from 8.68% for the six months ended June 30, 2010. The margin decrease was mainly the result of discontinuing the short-term consumer loan program.  In addition, average interest bearing deposits increased $27.9 million to $110.9 million, or 33.6% from the average for the six months ended June 30, 2010.  Net interest margin excluding short-term loans, which the Company discontinued offering on December 31, 2010, was 3.14% and 3.06% for the six months ended June 30, 2011 and 2010, respectively.  The improvement was due primarily to a decrease in the rates paid on interest-bearing deposits.

Total assets at June 30, 2011 were $212.2 million, representing a decrease of $6.9 million or 3.2% from December 31, 2010. The decrease was primarily the result of a decrease of $12.6 million in cash and cash equivalents and loans held for sale which decreased $5.5 million as these loans were sold on March 1, 2011.  In addition, cash and due from banks decreased $6.3 million, investments securities available for sale decreased $600,000 and other assets decreased $1.0 million. These decreases were partially offset by an increase of $6.1 million of interest bearing deposits with banks and an increase in loans receivable of $13.1 million.

Loans receivable at June 30, 2011 were $133.6 million, an increase of $13.1 million or 10.8% from December 31, 2010. The increase resulted from several new commercial lending relationships that were added in the first six months of 2011. The increase in commercial loans was spread among various types of relationships including commercial and industrial, construction and commercial real estate. We look to continue growth in our commercial loan production over the next few quarters.

Total deposits decreased $9.7 million or 5.7% to $160.2 million at June 30, 2011 from $170.0 million at December 31, 2010. The decrease was primarily due to money market accounts which decreased $14.2 million to $61.9 million and certificates of deposits which decreased $3.0 million to $11.6 million.  These decreases were partially offset by an increase in non-interest bearing demand accounts which increased $7.2 million to $75.1 million.

At June 30, 2011, our non-performing assets were $127,000, a $488K decrease from $615,000 at December 31, 2010. The decrease was due to sales of other real estate owned during the period. Non-performing assets represented 0.06% of total assets at June 30, 2011. Non-performing assets as of June 30, 2011 consist of two OREO properties totaling $127,000.

The decision to cease offering short term consumer loans at December 31, 2010 continues to affect earnings. The Company sold these loans at a gain of $610,000 during the first quarter of 2011. Revenues from this product for the six months ended June 30, 2011 included interest income of $2.3 million and fee income of $3.1 million. Revenues for the three month period ended June 30, 2011 included only fee income of $1.4 million. The decrease in revenues was partially offset by a reduction of the provision for loan losses and an improvement in expense associated with personnel required for this program. The Company will continue to earn fee income for this product until the loans are repaid, which is anticipated to be September 2011.  

The Company discontinued the remotely created check processing program in May 2011.  Fees from this program for the six months ended June 30, 2011 totaled $328,000 and no revenue from this product was earned for the second quarter of 2011. The decrease in revenues was partially offset by a reduction of the expense associated with personnel required for this program.

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, Delaware.

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