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

Oct 27, 2010, 17:08 ET from First Bank of Delaware

WILMINGTON, Del., Oct. 27 /PRNewswire-FirstCall/ -- First Bank of Delaware ("the Company") (OTC Bulletin Board: FBOD), today reported third quarter 2010 earnings of $1.0 million or $0.09 per share, compared to $483,000 or $0.04 per share for the third quarter 2009, an improvement of $547,000.  Earnings for the nine month period ended September 30, 2010 were $1.8 million or $0.16 per share compared to earnings of $1.2 million or $0.10 per share for the comparable prior year period, an improvement of $644,000. The increased earnings were primarily the result of increases in net interest income from growth in the Company's commercial loan portfolio.

Highlights for the third quarter 2010 include:

Net Interest Income for the third quarter 2010 was $4.5 million, an increase of $2.2 million or 95% from $2.3 million for the third quarter 2009.

Net interest income for the nine months ended September 30, 2010 was $11.1 million, an increase of $4.5 million or 70.0% from $6.6 million for the same period last year.

Revenue from Electronic Payment Services, which includes Remote Check Deposits, ACH Services and Merchant Transaction processing was $1.1 million for the third quarter of 2010, an increase of $1.0 million from the third quarter of 2009. This revenue is included in non interest income.

Total Shareholder's Equity at September 30, 2010 was $43.3 million.  The Company's Tier 1 Leverage Capital Ratio was 22.42% and the Total Risk Based Capital Ratio was 35.52%.    

Total assets at September 30, 2010 were $205.3 million, representing an increase of $65.0 million or 46.3% over December 31, 2009. The increase was primarily the result of increases in overnight fed funds sold of $34.1 million and loans of $30.7 million.  The increase in total assets was primarily funded by growth of retail deposits.

Total Loans at September 30, 2010 were $116.8 million, an increase of $30.7 million or 35.7% from December 31, 2009. The $30.7 million increase in Total loans includes an increase of $26.9 million of Commercial Loans or a 34% increase from $78.6 million at December 31, 2009.  The increase resulted from several new commercial lending relationships that were added in the first nine months of 2010. The increase in commercial loans was spread among various types of relationships including commercial and industrial, owner occupied real estate, commercial construction and commercial real estate. The Company has increased its number of loan officers and loan production capabilities in 2010. We look to continue growth in our commercial loan production over the next quarter and into 2011.

Total deposits increased $63.6 million or 67.1% to $158.3 million at September 30, 2010 from $94.7 million at December 31, 2009.  The $63.6 million increase in Deposits was primarily due to a $69.8 million increase in Core Deposits which includes demand and money market accounts.  Our commercial customers have established higher deposit balances with us and we have expanded our electronic payment offerings which have lead to additional deposit growth and fee income.  The increase in core deposits was partially offset by a decrease of $6.2 million in non-core deposits such as brokered deposits.

At September 30, 2010, our non-performing assets were $2.8 million, an $800,000 decrease from $3.6 million at December 31, 2009.  Non-performing assets represented 1.38% of total assets at September 30, 2010 versus 2.59% at December 31, 2009.  Non-performing assets as of September 30, 2010 consisted of two OREO properties totaling $800,000 and two commercial relationships that were in non-accrual status but continued to make payments, totaling $1.3 million. One of the non-accrual commercial relationships totaling $1.1 million was repaid in October of 2010.  The Company also had non-accrual short-term installment loans totaling $721,000.

The Company launched its secured credit card in September 2010 and will look to expand the secured offering in the near future.

Due to the current bank regulatory environment concerning subprime consumer lending, the Company has decided to cease offering its consumer installment loan product as of December 31, 2010. These consumer loans were offered nationally via the Internet and telephone. Interest income from this product totaled $3.2 million or 65.6% of the Banks total interest income and $1.0 million or 40.3% of the Bank's non-interest income for the third quarter of 2010.  The income resulting from this consumer installment loan product was partially offset by a $1.5 million provision for loan losses.  While the decision to cease offering these loans will cause both net interest income and non-interest income from these loans to decrease during 2011 and thereafter as loans are repaid, the Bank believes that the growth in its commercial loan interest income and increases in non-interest income from our electronic payment services products as well as other products will offset a portion of the loss of income from the discontinued installment loan product. The Company will also lose certain deposit balances totaling approximately $15 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 the prior year on both a quarter and year to date basis. Our growth in interest income and fee income from our electronic payments business has allowed us to offset lower non-interest income from credit card products as we have reduced our third party relationships. We continue to focus on growing our commercial banking area, expanding our electronic payment offerings, growing fee income products and offering our own suite of consumer loan and card products. The addition of several new lenders lead to loan growth of 35.7%." Mr. Primus added: "Although we are exiting the internet installment loan business, we expect to remain profitable by growing our other lines of business. We believe we will continue to attract high quality customers as a result of our high capital levels, personal service and attention, strong loan portfolio and high liquidity. We are focused on maintaining pricing and underwriting discipline in growing our loan portfolio and are diversifying the types of loans that we make. We believe this has allowed us to expand our commercial customer base in the Delaware market and in the contiguous counties of Pennsylvania."

SELECTED BALANCE SHEET DATA (Unaudited, in thousands)

September 30, 2010

December 31, 2009

Fed funds sold and interest bearing cash

$ 67,960

$ 33,853

Investment securities

5,746

8,079

Loans receivable

116,767

86,076

Total assets

205,328

140,360

Deposits

158,296

94,714

Shareholders' equity

43,325

41,447

SELECTED INCOME STATEMENT DATA (Unaudited, in thousands except per share data)

Quarter ended September 30,

Year to Date September 30,

2010

2009

2010

2009

Net interest income

$ 4,540

$ 2,324

$ 11,144

$ 6,562

Provision for loan losses

2,075

1,125

4,000

3,400

Non-interest income

2,509

2,382

5,438

7,617

Other expenses

3,408

2,854

9,799

8,988

Provision for income taxes

536

244

955

607

Net income

1,030

483

1,828

1,184

Earnings per share:

Basic

$ 0.09

$ 0.04

$ 0.16

$ 0.10

Diluted

$ 0.09

$ 0.04

$ 0.16

$ 0.10

Capital Ratios:

Leverage Capital

22.42%

32.78%

Total risk based capital

35.52%

45.30%

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," as that term is defined in the Private Securities Litigation Reform Act of 1995, 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. The forward-looking statements contained herein are subject to certain risks and uncertainties that could cause actual results to differ materially from those projected in the forward-looking statements. For example, risks and uncertainties can arise with changes in: general economic conditions, including their impact on capital expenditures; business conditions in the financial services industry; the regulatory and litigation environment, including additional restrictions on short term consumer loans and other products and evolving banking industry standards; rapidly changing technology and competition with community, regional and national financial institutions; new service and product offerings by competitors, price pressures; and similar items. You should carefully review the risk factors described in the Form 10-K for the year ended December 31, 2009 and other documents the Company files from time to time with the Federal Deposit Insurance Company.  Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management's analysis only as of the date hereof. 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.

Attachment  #1

First Bank of Delaware September 30, 2010

First Bank of Delaware Condensed Income Statement (unaudited) (Dollar amounts in thousands except per share data)  

Three Months Ended September 30,

Nine Months Ended September 30,

2010

2009

2010

2009

Net Interest Income

$                      4,540

$                    2,324

$                        11,144

$                        6,562

Provision for Loan Losses

2,075

1,125

4,000

3,400

Other Income

2,509

2,382

5,438

7,617

Other Expenses

3,408

2,854

9,799

8,988

Income Taxes

$                         536

$                       244

$                             955

$                           607

Net Income

$                      1,030

$                       483

$                          1,828

$                        1,184

Diluted EPS

$                        0.09

$                      0.04

$                            0.16

$                          0.10

First Bank of Delaware Condensed Balance Sheet (unaudited) (Dollar amounts in thousands)

Assets

September 30, 2009

December 31, 2009

September 30, 2009

Federal Funds Sold and Other Interest Bearing Cash  

$                    67,960

$                  33,853

$                        24,157

Investment Securities

5,746

8,079

13,349

Commercial and Other Loans

116,767

86,076

84,828

Allowance for Loan Losses

(5,011)

(3,512)

(3,923)

Other Assets

19,866

15,864

13,309

Total Assets

$                  205,328

$                140,360

$                      131,720

Liabilities and Shareholders' Equity:      

Transaction Accounts

$                  132,462

$                  62,693

$                        57,840

Time Deposit Accounts

25,834

32,021

29,598

Other Liabilities

3,707

4,199

3,157

Shareholders' Equity

43,325

41,447

41,125

Total Liabilities and Shareholders' Equity

$                  205,328

$                140,360

$                      131,720

Attachment #2

First Bank of Delaware September 30, 2010 (Dollars in thousands) (unaudited)

At or For the Three Months Ended

At or For the Nine Months Ended

September 30, 2010

September 30, 2009

September 30, 2010

September 30, 2009

Financial Data:

Return on average assets

2.12%

1.53%

1.39%

1.33%

Return on average equity

9.56%

4.74%

5.79%

3.91%

Share information:

Book value per share

$3.79

$3.60

$3.79

$3.60

Shares o/s at period end, net of treasury stock

11,418,900

11,418,900

11,418,900

11,418,900

Average diluted shares o/s

11,455,000

11,418,900

11,450,000

11,415,000

Attachment #3

First Bank of Delaware September 30, 2010 (Dollars in thousands) (unaudited) Credit Quality Ratios:

At

September 30, 2010

December 31, 2009

September 30, 2009

Non-accrual and loans accruing,

but past due 90 days or more

$              279

$             240

$              936

Non-accrual loans

$           1,719

$          2,346

$                  -

Restructured loans

-

-

-

Total non-performing loans

1,998

2,586

936

OREO

835

1,049

1,049

Total non-performing assets

$           2,833

$          3,635

$           1,985

Allowance for loan losses

$           5,011

$          3,512

$           3,923

Non-performing loans as

a percentage of total loans

1.71%

3.00%

1.10%

Nonperforming assets as

a percentage of total assets

1.38%

2.59%

1.51%

Allowance for loan losses

to total loans

4.29%

4.08%

4.62%

Allowance for loan losses

to total non-performing loans

250.80%

135.81%

419.12%

Attachment #4

First Bank of Delaware September 30, 2010 (Dollars in thousands) (unaudited)

Quarter-to-Date

Average Balance Sheet

Three months ended

Three months ended

September 30, 2010

September 30, 2009

Average

Average

Interest-Earning Assets:

Average

Yield/

Average

Yield/

Balance

Interest

Cost

Balance

Interest

Cost

Commercial and other loans

$ 115,331

$ 4,759

16.37%

$   74,304

$ 2,383

12.72%

Investment securities

5,959

76

5.06

14,227

159

4.48

Federal funds sold

55,019

35

0.25

25,998

16

0.24

Total interest-earning assets

176,309

4,870

10.96

114,529

2,558

8.86

Other assets

16,098

10,391

Total assets

$ 192,407

$ 4,870

$ 124,920

$ 2,558

Interest-bearing liabilities:

Interest-bearing deposits

$   91,242

$    330

1.43%

$   58,295

$    234

1.59%

Borrowed funds

-

-

-

-

-

-

Total interest-bearing

liabilities

91,242

330

1.43

58,295

234

1.59

Non-interest and

interest-bearing funding

146,298

330

0.89

81,122

234

1.14

Other liabilities:

3,342

3,367

Total liabilities

149,640

84,489

Shareholders' equity

42,767

40,431

Total liabilities &

shareholders' equity

$ 192,407

$ 124,920

Net interest income

$ 4,540

$ 2,324

Net interest margin

10.22%

8.05%

Attachment #5

First Bank of Delaware September 30, 2010 (Dollars in thousands) (unaudited)

Year-to-Date

Average Balance Sheet

Nine months ended

Nine months ended

September 30, 2010

September 30, 2009

Average

Average

Interest-Earning Assets:

Average

Yield/

Average

Yield/

Balance

Interest

Cost

Balance

Interest

Cost

Commercial and other loans

$ 104,131

$ 11,694

15.01%

$   73,771

$ 6,616

11.99%

Investment securities

       8,754

        323

4.92

     18,082

      558

4.11

Federal funds sold

     48,105

          95

0.26

     16,715

        31

0.25

Total interest-earning assets

   160,990

   12,112

10.06

   108,568

   7,205

8.87

Other assets

     14,362

     10,628

Total assets

$ 175,352

$ 12,112

$ 119,196

$ 7,205

Interest-bearing liabilities:

Interest-bearing deposits

$   85,763

$      968

1.51%

$   47,935

$    641

1.79%

Borrowed funds

               -

             -

-

          366

          2

0.73

Total interest-bearing

liabilities

     85,763

        968

1.51

     48,301

      643

1.78

Non-interest and

interest-bearing funding

   129,734

        968

1.00

     75,363

      643

1.14

Other liabilities:

       3,436

       3,394

Total liabilities

   133,170

     78,757

Shareholders' equity

     42,182

     40,439

Total liabilities &

shareholders' equity

$ 175,352

$ 119,196

Net interest income

$ 11,144

$ 6,562

Net interest margin

9.25%

8.08%

SOURCE First Bank of Delaware



RELATED LINKS

http://www.fbdel.com