First Resource Bank Announces First Quarter Results

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Apr 25, 2011, 08:00 ET

EXTON, Pa., April 25, 2011 /PRNewswire/ -- First Resource Bank (OTC Bulletin Board: FRSB) announced net income of $174,120 for the quarter ended March 31, 2011 as compared to net income of $108,861 for the quarter ended December 31, 2010 and net income of $118,604 for the quarter ended March 31, 2010. The first quarter of 2011 results were the most profitable quarter since the First Resource Bank opened and marked the 6th consecutive profitable quarter.

Glenn B. Marshall, President & CEO, stated, "We have worked diligently to achieve the critical mass needed to maintain consistent profitability as demonstrated over the past six quarters. Credit issues continue to arise, but they have become manageable within each quarter due to the growth in core earnings generated by the Bank."

Net interest income was $1,207,832 for the quarter ended March 31, 2011, as compared to $1,188,676 for the previous quarter. The net interest margin improved 14 basis points, from 3.77% for the three months ended December 31, 2010 to 3.91% for the three months ended March 31, 2011. This net interest margin improvement resulted from lower certificate of deposit costs and the deployment of excess cash balances into investments during the first quarter.

The allowance for loan losses to total loans was 1.27% at March 31, 2011 as compared to 1.24% at December 31, 2010 and 1.32% at March 31, 2010. Non-performing assets, which include non-performing loans of $2.6 million and other real estate owned of $1.7 million, totaled $4.3 million at March 31, 2011. Non-performing assets to total assets decreased from 3.45% at December 31, 2010 to 3.32% at March 31, 2011 due to an increase in total assets. James B. Griffin, Chairman of the Board stated, "We will continue to emphasize the need to reduce the non-performing assets ratio by focusing on resolving the credit problems as they occur. The Bank continues to work with existing borrowers who have experienced economic troubles, to assist them in finding ways to fulfill their obligations to the Bank, and get these borrowers back on the right track." Approximately $879 thousand in other real estate owned properties are currently under agreement of sale and scheduled to close during the second quarter of 2011. The provision for loan losses increased from $120,888 for the three months ended December 31, 2010 to $179,756 for the three months ended March 31, 2011 due to a higher level of loan charge-offs during the first quarter.

The loan portfolio declined $866 thousand, or 0.8%, during the first quarter from $113.0 million at December 31, 2010 to $112.1 million at March 31, 2011. The loan portfolio increased $6.6 million, or 6.2%, from $105.6 million at March 31, 2010 to $112.1 million at March 31, 2011.

The following table illustrates the composition of the loan portfolio:


	Mar. 31, 2011	Dec. 31, 2010	Mar. 31, 2010

Commercial real estate	$ 69,577,048	$ 71,538,599	$ 61,693,564
Commercial construction	5,005,791	2,840,605	7,424,092
Commercial business	12,070,933	12,276,455	12,108,467
Consumer	25,467,683	26,331,755	24,333,883

Total loans	$112,121,455	$112,987,414	$105,560,006

Deposits increased $4.9 million, or 4.5% from $109.5 million at December 31, 2010 to $114.4 million at March 31, 2011. During the first quarter, certificates of deposit increased $9.5 million, or 18.1%, from $52.8 million at December 31, 2010 to $62.4 million at March 31, 2011, as liabilities were extended in this historically low interest rate environment. Money market deposits declined $4.3 million, or 8.5%, from $51.1 million at December 31, 2010 to $46.7 million at March 31, 2011.

During 2009, the Bank participated in the United States Department of the Treasury's Capital Purchase Program. Preferred stock dividends are accrued monthly and all dividend payments have been made in accordance with the terms of the preferred stock issued. Preferred stock dividends and accretion were $72,138 for the fourth quarter resulting in net income available to common shareholders of $101,982. This compares to net income available to common shareholders of $36,723 for the quarter ended December 31, 2010 and $46,467 for the quarter ended March 31, 2010.

Non-interest income for the quarter ended March 31, 2011 was $33,667, as compared to $22,428 for the previous quarter. This increase is primarily attributed to one-time loan referral fee income.

Non-interest expense decreased $127,648, or 13.8% in the three months ended March 31, 2011 as compared to the three months ended December 31, 2010. This decrease was primarily due to lower other real estate owned expenses in the first quarter.

Selected Financial Data: Balance Sheets (unaudited)
	Mar. 31, 2011	Dec. 31, 2010

Cash and due from banks	$ 4,281,194	$ 1,968,246
Investments	12,420,652	9,333,483
Loans	112,121,455	112,987,414
Allowance for loan losses	(1,426,301)	(1,399,993)
Premises & equipment	114,210	127,419
Other assets	3,412,048	3,341,266

Total assets	$ 130,923,258	$ 126,357,835

Non-interest bearing deposits	$ 3,729,108	$ 4,393,823
Interest-bearing checking	1,540,630	1,168,134
Money market	46,744,963	51,075,527
Time deposits	62,367,062	52,821,057
Total deposits	114,381,763	109,458,541
Borrowings	928,000	1,928,000
Other liabilities	918,562	395,402

Total liabilities	116,228,325	111,781,943

Preferred stock	5,073,333	5,066,833
Common stock	1,453,094	1,453,094
Surplus	9,639,831	9,635,586
Accumulated other comprehensive income (loss)	(25,667)	(31,982)
Accumulated deficit	(1,445,658)	(1,547,639)
Total stockholders' equity	14,694,933	14,575,892

Total Liabilities & Stockholders' Equity	$ 130,923,258	$ 126,357,835


Performance Statistics (unaudited)	Qtr Ended Mar. 31, 2011	Qtr Ended Dec. 31, 2010	Qtr Ended Sept. 30, 2010	Qtr Ended June 30, 2010	Qtr Ended Mar. 31, 2010

Net interest margin	3.91%	3.77%	3.40%	3.25%	3.17%
Nonperforming loans/total loans	2.35%	2.23%	3.08%	2.43%	1.30%
Nonperforming assets/ Total assets	3.32%	3.45%	3.34%	2.68%	1.88%
Allowance for loan losses/ Total loans	1.27%	1.24%	1.23%	1.24%	1.32%
Average loans/Average assets	88.0%	87.8%	84.3%	81.7%	82.0%
Non interest expenses/ Average assets	0.62%	0.71%	0.54%	0.62%	0.52%

Income Statements (unaudited)
	Qtr Ended Mar. 31, 2011	Qtr Ended Dec. 31, 2010	Qtr Ended Sept. 30, 2010	Qtr Ended June 30, 2010	Qtr Ended Mar. 31, 2010

INTEREST INCOME
Loans	$1,585,435	$1,594,093	$1,575,193	$1,530,023	$1,502,552
Investments	55,056	28,027	39,327	99,889	111,333
Federal funds sold	147	704	822	821	497
Other	1,016	5,047	7,069	2,891	4,661
Total interest income	1,641,654	1,627,871	1,622,411	1,633,624	1,619,043

INTEREST EXPENSE
Borrowings	13,973	23,060	28,818	33,407	40,050
Checking	708	817	865	819	764
Money Market	137,358	145,307	204,531	223,164	178,761
Time deposits	281,783	270,011	290,097	334,733	405,015
Total interest expense	433,822	439,195	524,311	592,123	624,590

Net interest income	1,207,832	1,188,676	1,098,100	1,041,501	994,453

Provision for loan losses	179,756	120,888	202,576	84,766	162,466

NON INTEREST INCOME	33,667	22,428	23,332	21,190	22,433

NON INTEREST EXPENSE
Salaries & benefits	343,817	313,127	307,260	317,889	329,024
Occupancy & equipment	78,338	75,080	74,445	76,943	87,543
Data processing	50,909	49,154	46,908	50,704	51,578
Professional fees	88,589	99,816	78,435	189,922	56,541
Advertising	16,203	2,903	4,825	8,194	4,903
Other real estate owned expenses	53,258	237,791	14,387	1,650	3,929
Other non interest Expenses	165,297	146,188	160,288	164,072	140,495
Total non interest Expense	796,411	924,059	686,548	809,374	674,013

Pre-tax income	265,332	166,157	232,308	168,551	180,407

Tax expense	(91,212)	(57,296)	(79,731)	(58,233)	(61,803)

Net income	$ 174,120	$ 108,861	$ 152,577	$ 110,318	$ 118,604

Preferred stock dividends and accretion	(72,138)	(72,138)	(72,138)	(72,137)	(72,137)

Net income available to common shareholders	$ 101,982	$ 36,723	$ 80,439	$ 38,181	$ 46,467

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