First Resource Bank Announces 19% Net Income Growth For The First Half Of 2014

EXTON, Pa., July 22, 2014 /PRNewswire/ -- First Resource Bank (OTC Bulletin Board: FRSB) announced second quarter financial results through June 30, 2014. Quarterly net income reached a record high as did total loans outstanding. Year to date net income through June 30, 2014 grew 19% as compared the first half of the prior year.

Net income for the three months ended June 30, 2014 was $300,610 as compared to $295,749 for the quarter ended March 31, 2014 and net income of $261,407 for the quarter ended June 30, 2013. After accounting for preferred stock dividends, net income available to common shareholders for the quarter ended June 30, 2014 was $287,903. This compares to net income available to common shareholders of $283,041 for the quarter ended March 31, 2014 and $248,700 for the quarter ended June 30, 2013.

Glenn B. Marshall, President & CEO, stated, "The achievement of record profitability while expanding the retail presence of the Bank is an accomplishment that we are very proud of this year. The Exton branch relocation will be completed in August with construction commencing on the West Chester branch in the same month."

Net interest income was $1,505,419 for the quarter ended June 30, 2014 as compared to $1,458,650 for the previous quarter.  The net interest margin improved 12 basis points from 3.81% for the quarter ended March 31, 2014 to 3.93% for the quarter ended June 30, 2014. The overall yield on interest earning assets increased 9 basis points during the second quarter, with loan yields unchanged and the improvement attributed to lower levels of excess cash maintained on the balance sheet. The cost of interest bearing liabilities declined 2 basis points during the second quarter, led by a 2 basis point decline in the cost of certificates of deposit. 

Net interest income for the six months ended June 30, 2014 was $2,964,069, an improvement of $272 thousand, or 10% over the same period in the prior year.  This improvement was attributed to steady loan yields, low levels of excess cash and continued focus on lowering deposit costs.

Deposits decreased $161 thousand, or 0.1% from $139.0 million at March 31, 2014 to $138.8 million at June 30, 2014. During the second quarter, certificates of deposit decreased $546 thousand, or 0.8%, from $72.0 million at March 31, 2014 to $71.4 million at June 30, 2014. Money market deposits decreased $1.1 million, or 1.9%, from $57.0 million at March 31, 2014 to $55.9 million at June 30, 2014. Non-interest bearing deposits increased $1.3 million, or 17.9% from $7.3 million at March 31, 2014 to $8.6 million at June 30, 2014. Interest checking balances increased $136 thousand, or 5.1% from $2.7 million at March 31, 2014 to $2.8 million at June 30, 2014. Year to date total deposits declined $1.1 million, or 0.8%, primarily due to a decline in certificates of deposit.

The loan portfolio increased $3.5 million, or 2.5%, during the second quarter from $139.8 million at March 31, 2014 to $143.3 million at June 30, 2014. Most of this growth was in the commercial real estate portfolio which grew 3.1% during the second quarter. Year to date loan growth in 2014 was $3.3 million, or 2.4% due to a slight contraction in the portfolio during the first quarter attributed to an unusually bad winter and intense competition for loans in Chester County.

The following table illustrates the composition of the loan portfolio:

The allowance for loan losses to total loans was 0.96% at June 30, 2014 and March 31, 2014 as compared to 0.89% at December 31, 2013 and 1.04% at June 30, 2013. Non-performing assets, which include non-performing loans of $1.7 million and other real estate owned of $430 thousand, totaled $2.2 million at June 30, 2014, a 7% decline as compared to the prior quarter. Non-performing assets to total assets decreased from 1.44% at March 31, 2014 to 1.31% at June 30, 2014 due to a decline in other real estate owned and an increase in total assets.

Non-interest income for the quarter ended June 30, 2014 was $98,946, as compared to $95,967 for the previous quarter and $88,030 for the second quarter of the prior year.

Non-interest income for the six months ended June 30, 2014 was $194,913, as compared to $181,063 for the same period in the prior year, a 7.6% improvement.

Non-interest expense increased $114 thousand, or 11.1%, in the three months ended June 30, 2014 as compared to the prior quarter. This increase was due to higher salaries and benefits expenses, higher occupancy expenses, advertising expenses, other real estate owned expenses and other non-interest expenses. Salaries and benefits expenses increased during the second quarter mainly due to an expansion of the lending team.

Non-interest expense increased $275 thousand, or 14.6%, in the six months ended June 30, 2014 as compared to the same period in the prior year. This increase was due to higher salaries and benefits expenses, higher professional fees and higher other real estate owned expenses.

First Resource Bank Chairman, James B. Griffin, stated, "The Bank paid its first cash dividend in the second quarter and grew its retained earnings in excess of $500,000 in the first half of 2014.  The Board of Directors was pleased to provide our shareholders with a cash return on their investment, while working hard to expand the retail branch network."

Selected Financial Data:

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