Market Overview

1ST Constitution Bancorp Reports Third Quarter 2016 Results

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CRANBURY, N.J., Oct. 21, 2016 (GLOBE NEWSWIRE) -- 1ST Constitution Bancorp (NASDAQ: FCCY), the holding company (the "Company") for 1ST Constitution Bank (the "Bank"), today reported net income of $2.7 million and diluted earnings per share of $0.33 for the three months ended September 30, 2016. For the nine months ended September 30, 2016, the Company reported net income of $7.2 million and diluted earnings per share of $0.89. 

THIRD QUARTER 2016 HIGHLIGHTS

  • Net income increased 9.5% and diluted earnings per share increased 10.0% compared to the third quarter of 2015.
  • Return on Average Assets and Return on Average Equity were 1.03% and 10.45%, respectively.
  • Book value per share and tangible book value per share were $13.02 and $11.39, respectively.
  • Net interest income was $9.5 million and the net interest margin was 3.92% on a tax equivalent basis.
  • Non-performing assets were $5.4 million, or 0.51% of assets, at September 30, 2016.
  • The Bank did not record a provision for loan losses in the third quarter due to lower historical loan loss factors that reflected the continued improvement in loan credit quality and the current economic and operating environment. Through the first nine months of 2016 net recoveries of loans of $226,000 were recorded.
  • On September 16, 2016, the Company announced that its Board of Directors declared a quarterly cash dividend of $0.05 per common share to be paid on October 21, 2016 to shareholders of record as of the close of business on September 28, 2016.  This action represents the first cash dividend declared by 1ST Constitution Bancorp on its common shares.

Robert F. Mangano, President and Chief Executive Officer, stated "We are pleased with our financial performance for the third quarter. Net income increased $233,000 and 9.5% compared to the third quarter of last year and return on average assets was 1.03%." Mr. Mangano added, "I am encouraged by the progress generated by our new residential lending team that joined us in August and the building of our residential mortgage pipeline to $30.0 million by the end of September."

Discussion of Financial Results

Net income was $2.7 million, or $0.33 per diluted share, for the third quarter of 2016 compared to $2.5 million, or $0.30 per diluted share, for the third quarter of 2015. The increase in net income of $233,000, or 9.5%, was generated primarily by a $333,000 increase in non-interest income and a $283,000 reduction of non-interest expenses in the third quarter of 2016 compared to the third quarter of 2015. All share and per share amounts have been adjusted to reflect the effect of the five percent common stock dividend paid on February 1, 2016.

Net interest income was $9.5 million for the quarter ended September 30, 2016 and declined $175,000 compared to net interest income of $9.7 million for the third quarter of 2015 principally due to an increase in interest expense of $186,000. Interest income was $10.8 million for each of the three months ended September 30, 2016 and 2015. Average earning assets were $987.8 million with a yield of 4.47% for the third quarter of 2016 compared to $938.3 million with a yield of 4.68% for the third quarter of 2015. The lower yield on average earning assets in the third quarter of 2016 reflected primarily the lower yield earned on commercial and commercial real estate loans and investments and the lower percentage of average loans to average earning assets compared to the third quarter of 2015. The yield on loans and investments declined due to the continued low interest rate environment as new loans were originated and investment securities were purchased at yields lower than the average yield on loans and investments, respectively, in the prior year period.

Interest expense on average interest bearing liabilities was $1.4 million, or 0.71%, for the third quarter of 2016 compared to $1.2 million, or 0.63%, for the third quarter of 2015. The $186,000 increase in the interest expense on interest bearing liabilities for the third quarter of 2016 reflected primarily higher short-term market interest rates in 2016 and increased competition for deposits compared to 2015.

The net interest margin declined to 3.92% in the third quarter of 2016 compared to 4.19% in the third quarter of 2015 due primarily to the lower yield on average earning assets and the higher cost of average interest bearing liabilities.

The Company did not record a provision for loan losses in the third quarter of 2016 compared to a provision for loan losses of $100,000 in the third quarter of 2015. A provision for loan losses was not required for the third quarter of 2016 due to lower historical loan loss factors, which reflected the improvement in loan credit quality, the resolution of non-performing loans and the significant reduction of net charge-offs of commercial and commercial real estate loans in 2016 and 2015. Management believes that the current economic and operating conditions are generally positive, which also was considered in management's evaluation of the adequacy of the allowance for loan losses. Through the first three quarters of 2016, net recoveries of loans were $226,000 compared to net charge-offs of loans of $393,000 for the first three quarters of 2015. Net charge-offs of loans for all of 2015 were $465,000, or 0.07% of average loans.

Non-interest income was $1.8 million for the third quarter of 2016, an increase of $333,000, or 23.3%, compared to $1.4 million for the third quarter of 2015. Other income increased $272,000 in the third quarter of 2016 and included an insurance recovery of $125,000 and a recovery of $75,000 in excess of the fair value of an acquired non-performing loan. An increase of $93,000 in gains from the sales of loans also contributed to the increase in non-interest income for the third quarter of 2016. In the third quarter of 2016, $3.5 million of SBA loans were sold and gains of $347,000 were recorded compared to $2.2 million of loans sold and gains of $193,000 recorded in the third quarter of 2015. SBA guaranteed commercial lending activity and loan sales vary from period to period.  In the third quarter of 2016, $12.2 million of residential mortgages were sold and $529,000 of gains were recorded compared to $38.0 million of loans sold and $590,000 of gains recorded in the third quarter of 2015. Service charge income was relatively unchanged from the 2015 quarter.

Non-interest expenses were $7.1 million for the third quarter of 2016, a decrease of $283,000, or 3.8%, compared to $7.4 million for the third quarter of 2015. Salaries and employee benefits expense increased $159,000, or 3.6%, due primarily to an increase in full-time equivalent employees. Commissions paid to residential loan officers, which were included in salaries and benefits expense, declined $142,000 due to the lower volume of mortgages originated in the third quarter of 2016. Occupancy costs increased $43,000, or 4.5%, due primarily to the occupancy costs of four residential mortgage loan production offices added in the third quarter of 2016. FDIC insurance expense declined $55,000, or 34.4%, due to a lower assessment rate that reflected the Bank's improvement in asset quality and financial performance. OREO expense declined due to the significant reduction in OREO assets. Other operating expenses decreased $311,000 due primarily to an $88,000 decrease in expense incurred for the collection and recovery of non-performing loans, lower telephone and communication expense of $63,000 due to the termination of certain services and decreases in various other operating expenses, which were partially offset by a $60,000 increase in internal and external professional audit fees related to management's required year-end 2016 attestation regarding internal controls (SOX 404).

Income tax expense was $1.5 million in the third quarter of 2016, resulting in an effective tax rate of 35.1% compared to income tax expense of $1.1 million, which resulted in an effective tax rate of 31.8% in the third quarter of 2015. The effective tax rate increased primarily due to the higher pretax income in the third quarter of 2016.

At September 30, 2016, the allowance for loan losses was $7.5 million compared to $7.6 million at December 31, 2015. As a percentage of total loans, the allowance was 1.00% at September 30, 2016 compared to 1.11% at year end 2015. The decline in the allowance for loan losses as a percentage of loans reflected the lower level of non-performing loans and the lower historical loan loss factors at September 30, 2016 compared to December 31, 2015.

Total assets increased to $1.06 billion at September 30, 2016 from $968.0 million at December 31, 2015 due primarily to a $67.3 million increase in total loans, an increase of $9.7 million in investments, and an increase of $4.4 million in loans held for sale, which were funded primarily by increases of $40.3 million in deposits and $38.1 million in short-term borrowings. Total portfolio loans at September 30, 2016 were $749.4 million compared to $682.1 million at December 31, 2015. The increase in loans was due primarily to a $37.6 million increase in mortgage warehouse loans, reflecting the seasonality of residential home buying in our markets, a $25.6 million increase in commercial real estate loans, and a $4.2 million increase in residential mortgage loans. Total investment securities at September 30, 2016 were $224.4 million, an increase of $9.7 million from $214.7 million at December 31, 2015.

Total deposits at September 30, 2016 were $827.1 million compared to $786.8 million at December 31, 2015. Total deposits grew $40.3 million, with savings deposits increasing $15.1 million, non-interest bearing demand deposits increasing $14.0 million and interest-bearing demand deposits increasing $11.0 million.

Regulatory capital ratios continue to reflect a strong capital position. Under the regulatory capital standards (Basel III) that became effective on January 1, 2015, the Company's common equity Tier 1 to risk based assets ("CET1"), total risk-based capital, Tier I capital, and leverage ratios were 9.91%, 12.68%, 11.87% and 10.57%, respectively, at September 30, 2016. The Bank's CET1, total risk-based capital, Tier 1 capital and leverage ratios were 11.60%, 12.41%, 11.60% and 10.33%, respectively, at September 30, 2016. The Company and the Bank are considered "well capitalized" under these capital standards.

Asset Quality

Net recoveries of loans were $4,000 during the third quarter of 2016 and were $226,000 for the nine months ended September 30, 2016. Non-accrual loans were $5.2 million at September 30, 2016 compared to $6.0 million at December 31, 2015. During the third quarter of 2016, $748,000 of non-performing loans were resolved and $829,000 of loans were placed on non-accrual. The allowance for loan losses was 143% of non-accrual loans at September 30, 2016 compared to 126% of non-accrual loans at December 31, 2015.

Overall, we observed stable trends in loan quality with net recoveries of $4,000 during the third quarter of 2016, non-performing loans to total loans of 0.70% and non-performing assets to total assets of 0.51% at September 30, 2016.

OREO at September 30, 2016 decreased to $166,000 from $1.0 million at December 31, 2015 due to the sale in the second quarter of 2016 of one residential property previously held in OREO.

About 1ST Constitution Bancorp

1ST Constitution Bancorp, through its primary subsidiary, 1ST Constitution Bank, operates 19 branch banking offices in Cranbury (2), Fort Lee, Hamilton, Hightstown, Hillsborough, Hopewell, Jamesburg, Lawrenceville, Perth Amboy, Plainsboro, Rocky Hill, West Windsor, Princeton, Rumson, Fair Haven, Shrewsbury, Little Silver and Asbury Park, New Jersey. 1ST Constitution Bank also operates four residential mortgage loan production offices in Forked River, Flemington, Jersey City and Somerset, New Jersey.

1ST Constitution Bancorp is traded on the Nasdaq Global Market under the trading symbol "FCCY" and can be accessed through the Internet at www.1STCONSTITUTION.com 

The foregoing contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are not historical facts and include expressions about management's confidence and strategies and management's expectations about new and existing programs and products, relationships, opportunities, taxation, technology and market conditions. These statements may be identified by such forward-looking terminology as "expect," "look," "believe," "anticipate," "may," "will," or similar statements or variations of such terms. Actual results may differ materially from such forward-looking statements. Factors that may cause results to differ materially from such forward-looking statements include, but are not limited to, changes in the direction of the economy in New Jersey, the direction of interest rates, effective income tax rates, loan prepayment assumptions, continued levels of loan quality and origination volume, continued relationships with major customers including sources for loans, a higher level of net loan charge-offs and delinquencies than anticipated, bank regulatory rules, regulations or policies that restrict or direct certain actions, the adoption, interpretation and implementation of new or pre-existing accounting pronouncements, a change in legal and regulatory barriers including issues related to compliance with anti-money laundering and bank secrecy act laws, as well as the effects of general economic conditions and legal and regulatory barriers and structure. 1ST Constitution Bancorp assumes no obligation for updating any such forward-looking statements at any time, except as required by law.

1ST Constitution Bancorp
    
Selected Consolidated Financial Data
    
 (Dollars in thousands, except per share data)
    
 (Unaudited)
    
            
 Three Months Ended Nine Months Ended    
 September 30, September 30,    
  2016   2015   2016   2015     
Per Common Share Data: 1           
Earnings per common share - Basic$  0.34  $  0.31  $  0.91  $  0.89     
Earnings per common share - Diluted   0.33     0.30     0.89     0.87     
Tangible book value per common share at the period-end       11.39     10.43     
Book value per common share at the period end       13.02     12.11     
Average common shares outstanding:           
Basic 7,974,323   7,920,192   7,954,212   7,893,719     
Diluted 8,185,758   8,079,836   8,159,419   8,058,693     
Performance Ratios / Data:           
Return on average assets 1.03%  0.98%  0.97%  0.96%    
Return on average equity 10.45%  10.56%  9.68%  10.46%    
Net interest income (tax-equivalent basis) 2$  9,734  $  9,914  $  27,354  $  28,389     
Net interest margin (tax-equivalent basis) 3 3.92%  4.19%  3.89%  4.11%    
Efficiency ratio 4 61.70%  64.00%  65.00%  64.50%    
            
     September 30, December 31,    
      2016   2015     
            
Loan Portfolio Composition:           
Commercial Business    $  98,147  $  99,277     
Commercial Real Estate     232,812   207,250     
Construction Loans     93,839   93,745     
Mortgage Warehouse Lines     254,168   216,572     
Residential Real Estate     44,975   40,744     
Loans to Individuals     23,503   23,074     
Other Loans     220   233     
Gross Loans     747,664   680,895     
Deferred Costs (net)       1,772     1,226     
Total Loans (net)    $  749,436  $  682,121     
            
Asset Quality Data:           
Loans past due over 90 days and still accruing       -     -     
Non-accrual loans       5,238     6,020     
OREO property       166     966     
Other repossessed assets       -     -     
Total non-performing assets    $  5,404  $  6,986     
            
Net recoveries (charge-offs)$  4  $  (318) $  226  $  (465)    
Allowance for loan losses to total loans     1.00%  1.11%    
Non-performing loans to total loans     0.70%  0.88%    
Non-performing assets to total assets     0.51%  0.72%    
            
Capital Ratios:           
1ST Constitution Bancorp           
Common equity to risk weighted assets ("CET 1")     9.91%  10.03%    
Total capital to risk weighted assets     12.68%  13.08%    
Tier 1 capital to risk weighted assets     11.87%  12.18%    
Tier 1 capital to average assets (leverage ratio)     10.57%  10.80%    
1ST Constitution Bank           
Common equity to risk weighted assets ("CET 1")     11.60%  11.90%    
Total capital to risk weighted assets     12.41%  12.80%    
Tier 1 capital to risk weighted assets     11.60%  11.90%    
Tier 1 capital to average assets (leverage ratio)     10.33%  10.55%    
            
            
1 All share and per share amounts have been adjusted to reflect the effect of the 5% stock dividend paid on February 1, 2016.      
2 The tax equivalent adjustment was $246 and $251 for the three months ended September 30, 2016 and September 30, 2015, respectively.    
3 Represents net interest income on a taxable equivalent basis as a percent of average interest earning assets.      
4 Represents non-interest expenses divided by the sum of net interest income on a taxable equivalent basis and non-interest income.    


1ST Constitution Bancorp  
Consolidated Balance Sheets 
  (Dollars in Thousands)     
(Unaudited) 
 September 30 December 31,    
ASSETS 2016   2015     
        
 Cash and Due From Banks$  16,947  $  11,368     
 Federal Funds Sold / Short Term Investments   -     -     
    Total cash and cash equivalents   16,947     11,368     
 Investment Securities:       
  Available for sale, at fair value   103,114     91,422     
  Held to maturity (fair value of $125,841 and $127,157       
  at September 30, 2016 and December 31, 2015, respectively)   121,236     123,261     
    Total investment securities   224,350     214,683     
        
 Loans Held for Sale   10,416     5,997     
 Loans   749,436     682,121     
  Less- Allowance for loan losses   (7,486)    (7,560)    
    Net loans   741,950     674,561     
        
 Premises and Equipment (net)   10,760     11,109     
 Accrued Interest Receivable   2,855     2,853     
 Bank Owned Life Insurance   22,048     21,583     
 Other Real Estate Owned   166     966     
 Goodwill and Intangible Assets   12,981     13,284     
 Other Assets   12,835     11,587     
      Total Assets$  1,055,308  $  967,991     
        
LIABILITIES AND SHAREHOLDERS' EQUITY       
 LIABILITIES:       
  Deposits       
          Non-interest bearing$  173,946  $  159,918     
          Interest bearing   653,116     626,839     
      Total deposits   827,062     786,757     
        
 Borrowings   97,099     58,896     
 Redeemable Subordinated Debentures   18,557     18,557     
 Accrued Interest Payable   794     846     
 Accrued Expense and Other Liabilities   7,849     6,975     
      Total liabilities   951,361     872,031     
        
SHAREHOLDERS EQUITY:       
Preferred stock, no par value; 5,000,000 shares authorized; none issued   -     -     
Common Stock, no par value; 30,000,000 shares authorized; 8,016,592 and       
  7,575,492 shares issued and 7,983,294 and 7,545,684 shares outstanding       
  as of September 30, 2016 and December 31, 2015, respectively   71,394     70,845     
Retained earnings   32,420     25,589     
Treasury Stock, 33,298 shares and 29,908 shares at September 30, 2016       
  and December 31, 2015, respectively    (368)    (344)    
Accumulated other comprehensive income (loss)    501     (130)    
      Total shareholders' equity   103,947     95,960     
Total liabilities and shareholders' equity$  1,055,308  $  967,991     


1ST Constitution Bancorp 
Consolidated Statements of Income 
(Dollars in thousands, except per share data) 
(Unaudited) 
         
 Three Months Ended Nine Months Ended 
 September 30, September 30, 
  2016   2015   2016   2015  
         
INTEREST INCOME:        
  Loans, including fees$  9,489  $  9,527  $  26,314  $  27,054  
  Securities:        
    Taxable   827     776     2,459     2,383  
    Tax-exempt   514     522     1,554     1,608  
  Federal funds sold and        
    short-term investments   13     7     79     38  
        Total interest income   10,843     10,832     30,406     31,083  
INTEREST EXPENSE:        
  Deposits   1,051     921     2,989     2,765  
  Borrowings   197     159     498     438  
  Redeemable subordinated debentures   107     89     311     263  
        Total interest expense   1,355     1,169     3,798     3,466  
        Net interest income   9,488     9,663     26,608     27,617  
(CREDIT) PROVISION FOR LOAN LOSSES   -     100     (300)    600  
  Net interest income after (credit) provision        
  for loan losses   9,488     9,563     26,908     27,017  
NON-INTEREST INCOME:        
  Service charges on deposit accounts   185     186     558     615  
  Gain on sales of loans    876     783     2,525     3,278  
  Income on Bank-owned life insurance   113     144     414     420  
  Other income   586     314     1,392     1,231  
        Total non-interest income   1,760     1,427   4,889   5,544  
NON-INTEREST EXPENSES:        
  Salaries and employee benefits   4,532     4,373     13,138     13,037  
  Occupancy expense   1,006     963     2,946     3,121  
  Data processing expenses   314     326     941     951  
  FDIC insurance expense   105     160     328     530  
  Other real estate owned expenses   12     119     76     631  
  Other operating expenses   1,128     1,439     3,522     3,939  
        Total non-interest expenses   7,097     7,380     20,951     22,209  
         
        Income before income taxes   4,151     3,610     10,846     10,352  
INCOME TAXES   1,456     1,148     3,616     3,315  
        Net Income$  2,695  $  2,462  $  7,230  $  7,037  
         
NET INCOME PER COMMON SHARE        
  Basic$0.34  $0.31  $0.91  $0.89  
  Diluted$0.33  $0.30  $0.89  $0.87  
WEIGHTED AVERAGE SHARES        
  OUTSTANDING        
  Basic 7,974,323   7,920,192     7,954,212     7,893,719  
  Diluted 8,185,758   8,079,836     8,159,419     8,058,693  


1ST Constitution Bancorp 
Net interest Margin Analysis 
(Dollars in thousands) 
(Unaudited) 
         
 Three months ended Three months ended 
 September 30, 2016 September 30,  2015 
 Average Average Average Average 
 BalanceInterestYield BalanceInterestYield 
         
Assets        
  Federal Funds Sold/Short-Term Investments$  12,434 $  13  0.40% $  15,381 $  7  0.19% 
  Investment Securities:        
  Taxable 148,715    827  2.22%  119,047    776  2.61% 
  Tax-exempt (4) 79,916    760  3.81%  76,975    773  4.02% 
  Total 228,632  1,587  2.78%  196,022  1,549  3.16% 
  Loan Portfolio: (1)        
  Construction 89,509  1,364  6.06%    93,953  1,470  6.20% 
  Residential real estate 45,919  493  4.30%    41,828  445  4.25% 
  Home Equity 23,286  279  4.76%    22,314  272  4.84% 
  Commercial and commercial real estate 335,887  4,722  5.59%    311,411  4,611  5.94% 
  Mortgage warehouse Lines 245,654  2,600  4.21%    243,273  2,634  4.30% 
  Installment 616  7  4.48%    516  5  4.11% 
  All Other Loans 5,869  24  1.63%    13,590  90  2.64% 
  Total 746,740  9,489  5.06%  726,884  9,527  5.20% 
Total Interest-Bearing Assets   987,806  $   11,089   4.47%    938,288  $   11,083   4.68% 
Allowance for Loan Losses (7,552)    (7,661)   
Cash and Due From Bank 5,019     5,253    
Other Assets 59,886     65,139    
     Total Assets$   1,045,159     $   1,001,018     
         
Liabilities and Shareholders' Equity:        
  Money Market and NOW Accounts$  296,554 $  281  0.38% $  295,479 $  248  0.33% 
  Savings Accounts 209,703  316  0.60%  195,051  231  0.47% 
  Certificates of Deposit 173,652  454  1.04%  170,500  441  1.03% 
  Other Borrowed Funds 64,463  197  1.22%  52,082  159  1.21% 
  Trust Preferred Securities 18,557  107  2.32%  18,557  89  1.89% 
      Total Interest-Bearing Liabilities  762,929  $   1,355   0.71%  731,668  $   1,169   0.63% 
         Net interest Spread (2)   3.76%    4.05% 
Demand Deposits 171,631     167,526    
Other Liabilities 7,958     9,536    
Total Liabilities   942,522       908,730    
Shareholders' Equity 102,637     92,288    
Total Liabilities and Shareholders' Equity$   1,045,159     $   1,001,018     
Net interest Margin (3) $   9,734   3.92%  $   9,914   4.19% 
         
(1) Loan Origination fees are considered an adjustment to interest income. for the purpose of calculating loan yields, average loan  
balances include non-accrual loans with no related interest income and the average balance of loans held for sale.   
(2) The net interest spread is the difference between the average yield on interest-earning assets and the average rate paid on interest 
bearing liabilities.        
(3) The net interest margin is equal to net interest income divided by average interest-earning assets.   
(4) Tax equivalent basis.        

 

1ST Constitution Bancorp 
Net Interest Margin Analysis 
(Dollars in thousands) 
(Unaudited) 
         
 Nine months ended Nine months ended 
  September 30, 2016  September 30, 2015 
 Average Average Average Average 
 BalanceInterestYield BalanceInterestYield 
         
Assets        
  Federal Funds Sold/Short-Term Investments$  24,508 $  79  0.43% $  22,042 $  38  0.23% 
  Investment Securities:        
  Taxable 144,534    2,459  2.27%  128,404    2,383  2.47% 
  Tax-exempt (4) 80,203    2,299  3.82%  82,207    2,380  3.86% 
  Total 224,737  4,758  2.82%  210,611  4,763  3.02% 
  Loan Portfolio: (1)        
  Construction 92,795  4,026  5.80%  95,936  4,551  6.34% 
  Residential real estate 42,375  1,352  4.19%  43,796  1,381  4.16% 
  Home Equity 23,454  769  4.38%  22,308  777  4.66% 
  Commercial and commercial real estate 319,748  13,606  5.68%  308,697  13,391  5.80% 
  Mortgage warehouse lines 201,322  6,436  4.27%  205,753  6,714  4.36% 
  Installment 582  19  4.35%  468  16  4.54% 
  All Other Loans 6,078  106  2.32%  12,715  224  2.36% 
  Total 686,354  26,314  5.12%  689,674  27,054  5.24% 
Total Interest-Bearing Assets   935,599  $   31,151   4.45%    922,327  $   31,855   4.62% 
Allowance for Loan Losses (7,534)    (7,532)   
Cash and Due From Bank 5,086     7,816    
Other Assets 59,652     62,474    
     Total Assets$   992,803     $985,085     
         
Liabilities and Shareholders' Equity:        
  Money Market and NOW Accounts$  295,776 $  821  0.37% $  302,777 $  754  0.33% 
  Savings Accounts 206,355  888  0.58%  196,266  686  0.47% 
  Certificates of Deposit 153,544  1,280  1.11%  162,085  1,325  1.09% 
  Other Borrowed Funds 46,257  498  1.44%  41,767  438  1.40% 
  Trust Preferred Securities 18,557  311  2.23%  18,557  263  1.87% 
     Total Interest-Bearing Liabilities  720,489  $   3,798   0.70%  721,452  $   3,466   0.64% 
         Net Interest Spread (2)   3.75%    3.98% 
Demand Deposits 164,963     164,867    
Other Liabilities 7,612     8,782    
Total Liabilities   893,064       895,101    
         
Shareholders' Equity 99,739     89,984    
Total Liabilities and Shareholders' Equity$   992,803     $  985,085     
Net Interest Margin (3) $   27,353   3.89%  $   28,389   4.11% 
         
(1) Loan Origination fees are considered an adjustment to interest income. For the purpose of calculating loan yields, average loan   
balances include non-accrual loans with no related interest income and the average balance of loans held for sale.    
(2) The net interest spread is the difference between the average yield on interest-earning assets and the average rate paid on interest-  
bearing liabilities.        
(3) The net interest margin is equal to net interest income divided by average interest-earning assets.     
(4) Tax equivalent basis.        
Robert F. Mangano President & Chief Executive Officer (609) 655-4500 Stephen J. Gilhooly Sr. Vice President & Chief Financial Officer (609) 655-4500

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