1st Colonial Bancorp Reports Third Quarter Net Income Growth and Year to Date Profit of $765,000

COLLINGSWOOD, N.J.--(BUSINESS WIRE)--

1^st Colonial Bancorp, Inc. FCOB, holding company of 1^st Colonial Community Bank, today reported that its net income for the three months ended September 30, 2014 was $362,000 ($0.11 per share) compared to $256,000 ($0.08 per share) for the three months ended September 30, 2013. Net interest income increased $333,000 resulting from an increase in average interest earning assets of approximately $60 million for the three months ended September 30, 2014 compared to the three months ended September, 2013. Non-interest income also increased by $69,000.

Offsetting these increases, our provision for loan losses increased by $100,000 for the quarter ended September 30, 2014 from the quarter ended September 30, 2013. Non-interest expense also increased by $104,000 in the three months ended September 30, 2014 compared to the three months ended September 30, 2013, as salaries and benefits increased by $161,000 offset by a reduction in other operating expenses of $57,000. The increase in salaries and benefits was a result of key additions of personnel in the residential lending area.

Gerry Banmiller, President and Chief Executive Officer, commented, “We have diversified our loan portfolio in such a way as to not rely too much on any particular loan type. We will continue this diversification which will cause our portfolio to increase, with a concomitant earnings benefit.”

Net income for the nine months ended September 30, 2014 was $765,000 ($0.22 per share), compared to $720,000 ($0.21 per share) for the nine months ended September 30, 2013.

At September 30, 2014, 1^st Colonial also reported $352.7 million in total assets, $321.8 million in deposits and $224.8 million in loans. These amounts reflect increases of $36.8 million in assets, $36.2 million in deposits and $36.4 million in loans from September 30, 2013. Investment securities also increased by $19.5 million and other borrowings decreased by $931,000.

Net interest income of $7,665,000 for the nine months ended September 30, 2014 was $869,000, or 12.8%, higher than the net interest income of $6,796,000 for the nine months ended September 30, 2013, resulting from an increase in average interest earning assets of approximately $43 million for the nine months ended September 30, 2014 compared to the nine months ended September 30, 2013. 1^st Colonial's provision for loan losses was $825,000 for the nine months ended September 30, 2014 compared to a provision for loan losses of $800,000 for the nine months ended September 30, 2013.

Non-interest income of $1.28 million for the nine months ended September 30, 2014 was $436,000 lower than non-interest income for the nine months ended September 30, 2013. Fees generated by the origination and sale of residential mortgage loans and SBA loans decreased by $298,000 and $266,000 respectively, due to a decrease in the number of such loans closed in 2014 compared to 2013 and a decision to retain some of the residential loans in the Bank's portfolio. These decreases were partially offset by a gain on the sale of investment securities of $108,000 for the nine months ended September 30, 2014 compared to no such gain during the nine months ended September 30, 2013.

Non-interest expense for the nine months ended September 30, 2014 increased $326,000 or 4.8% from the comparable period in 2013. Occupancy and equipment expenses increased $196,000 due to the relocation of our Administration and Loan Offices, and salaries and benefits increased by $98,000 due to the additions to our residential lending staff mentioned above.

The company also reported that its shareholders equity of $26.2 million and book value per share of $7.44 at September 30, 2014 increased by 5.6% and 5.4% respectively since September 30, 2013. This was due to a reduction in the unrealized loss in the investment portfolio, as interest rates moved lower compared to the prior year, and additions to capital through accretive earnings of approximately $1 million since September 30, 2013.

During the quarter, the Bank announced that it is closing its current branch office located at 2802 Route 130 North, Cinnaminson, New Jersey. This branch will cease all branch banking operations at the close of business on Friday, December 19, 2014. The Bank anticipates that closing the branch will save the Bank approximately $250,000 per year in operating costs, and significantly more than that when the building is sold. The building is owned by the Bank, and is for sale. Until the building can be sold for a suitable price, the Bank intends to maintain the building as a loan production office after the branch ceases branching functions.

Highlights as of September 30, 2014 and September 30, 2013, and comparing the three and nine months ended September 30, 2014 and the three and nine months ended September 30, 2013, respectively, include the following (dollars in thousands, except per share data):

			At			At			$ increase/			% increase/
			September 30, 2014			September 30, 2013			decrease			decrease
Total assets			$352,657			$315,865			$36,792			11.6%
Total loans			224,801			188,408			36,393			19.3%
Investments			113,159			99,442			13,717			13.8%
Total deposits			321,845			285,634			36,211			12.7%
Shareholders' equity			26,171			24,792			1,379			5.6%
Book Value per share (1)			$7.44			$7.06			$0.38			5.4%
			For the nine months ended
									$ increase/			% increase/
			September 30, 2014			September 30, 2013			decrease			decrease
Net interest income			$7,665			$6,796			$869			12.8%
Provision for loan losses			825			800			25			3.1%
Other income			1,277			1,713			(436)			-25.5%
Non interest expense			7,048			6,722			326			4.8%
Tax expense			304			267			37			13.9%
Net income			765			720			45			6.3%
Earnings per share (1)			$0.22			$0.21			$0.01			6.0%
			For the three months ended
									$ increase/			% increase/
			September 30, 2014			September 30, 2013			decrease			decrease
Net interest income			$2,671			$2,338			$333			14.2%
Provision for loan losses			300			200			100			50.0%
Other income			490			421			69			16.4%
Non interest expense			2,323			2,219			104			4.7%
Tax expense			176			84			92			109.5%
Net income			362			256			106			41.4%
Earnings per share (1)			$0.11			$0.08			$0.03			43.2%

(1) Adjusted to give effect to the 5% stock dividend distributed to shareholders on April 15, 2014.

1^st Colonial Community Bank, the subsidiary of 1^st Colonial Bancorp, provides a range of business and consumer financial services, placing emphasis on customer service and access to decision makers. Headquartered in Collingswood, New Jersey, the Bank also has branches in the New Jersey communities of Westville and Cinnaminson. To learn more, call (856) 858-8402 or visit www.1stcolonial.com.

This Release contains forward-looking statements that are not historical facts and include statements about management's strategies and expectations about our business. There are risks and uncertainties that may cause our actual results and performance to be materially different from results indicated by these forward-looking statements. Factors that might cause a difference include economic conditions; unanticipated loan losses, inability to close loans in our pipeline, lack of liquidity; varying and unanticipated costs of collection with respect to nonperforming loans; an inability to dispose of its other real estate owned; changes in interest rates, changes in FDIC assessments, deposit flows, loan demand, and real estate values; changes in relationships with major customers; operational risks, including the risk of fraud by employees, customers or outsiders; competition; changes in accounting principles, policies or guidelines; changes in laws or regulations and in the manner in which the regulators enforce same; new technology and other factors affecting our operations, pricing, products and services.