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First Resource Bank Announces Most Profitable Quarter To Date; Net Income Grew 8% Over The Prior Quarter And 25% Over The Prior Year Second Quarter

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First Resource Bank Announces Most Profitable Quarter To Date; Net Income Grew 8% Over The Prior Quarter And 25% Over The Prior Year Second Quarter

PR Newswire

EXTON, Pa., July 24, 2018 /PRNewswire/ -- First Resource Bank (OTCQX:FRSB) announced financial results for the three months ended June 30, 2018.

First Resource Bank is proud to be a community bank that believes in providing exceptional service, managing your banking needs responsibly, and treating you with respect. We are committed to supporting our surrounding towns and neighborhoods. At First Resource Bank, our driving goal is to be your first resource when you want to save, invest or manage your hard-earned dollars, or when you need a lending partner to help you achieve a personal or business goal. (PRNewsFoto/First Resource Bank)

Highlights for the second quarter of 2018 included:

  • Net income of $520,825 was the highest quarterly profit in the Bank's history
  • Net income grew 8% over the quarter ended March 31, 2018 and 25% over the quarter ended June 30, 2017
  • Total interest income grew 7% over the quarter ended March 31, 2018 and 17% over the quarter ended June 30, 2017
  • Total loans grew $10.3 million, or 5%, to a total of $233.6 million at June 30, 2018
  • Total deposits grew $12.3 million, or 6%, to a total of $223.8 million at June 30, 2018
  • Non-interest bearing deposits increased 19% during the second quarter
  • Attracting key personnel at the management level to enhance the Bank's growth opportunities
  • Navigating through the township planning commission process for the opening of our third branch in the spring of 2019

Glenn B. Marshall, President & CEO, stated, "We continue to see the Bank's profitability increase as we continue our growth as an organization. As loans and deposits continue double digit annual growth, the Bank has allocated current year tax savings to add key personnel in the second quarter to ensure the Bank's continued success. The third branch site development plans are moving forward on schedule and we anticipate opening our Wayne, PA branch in mid-2019."  

Net income for the quarter ended June 30, 2018 was $520,825, which compares to $480,992 for the previous quarter and $417,701 for the second quarter of the prior year.

Net income for the six months ended June 30, 2018 was $1,001,817, a 22% increase over the same period in the prior year. The increase in net income is primarily attributable to a 14% increase in net interest income and lower income tax expense as a result of the passage of the Tax Cuts and Jobs Act in 2017, partially offset by lower non-interest income and a higher provision for loan losses and higher non-interest expense.

Net interest income was $2,493,870 for the quarter ended June 30, 2018 as compared to $2,397,303 for the previous quarter, an improvement of 4%. The net interest margin decreased 1 basis point from 3.98% for the quarter ended March 31, 2018 to 3.97% for the quarter ended June 30, 2018. The overall yield on interest earning assets increased 14 basis points during the second quarter led by a 13 basis point increase in loan yields to 5.36%. The cost of interest bearing deposits increased 16 basis points during the second quarter to 1.12%. 

Net interest income for the six months ended June 30, 2018 was $4,891,173, a 14% improvement over net interest income of $4,300,076 for the six months ended June 30, 2017. This growth was driven by a 16% increase in loan interest income.

Non-interest income for the quarter ended June 30, 2018 was $139,730, as compared to $115,742 for the previous quarter and $99,552 for the second quarter of the prior year. There were $28,725 in gains on sales of SBA loans recognized during the second quarter of 2018, as compared to none in the prior quarter or the second quarter of 2017.

Non-interest income for the six months ended June 30, 2018 was $255,472 as compared to $360,822 for the same period in the prior year. There was $28,725 in SBA loan sale income in the first six months of 2018 as comparted to $155,337 in the first six months of 2017.

Non-interest expense increased a nominal $5 thousand in the three months ended June 30, 2018 as compared to the prior quarter. The increase was primarily due to an increase in salaries and benefits, professional fees and data processing costs, partially offset by a decrease in occupancy, advertising and other costs.

Non-interest expense increased $288 thousand, or 9%, in the six months ended June 30, 2018 as compared to the same period in the prior year. This increase was due to higher salaries and benefits expense, advertising, and data processing costs, partially offset by lower occupancy costs and professional fees.

Deposits grew a net $12.3 million from $211.5 million at March 31, 2018 to $223.8 million at June 30, 2018. During the second quarter, non-interest bearing deposits increased $4.7 million, or 19%, from $25.0 million at March 31, 2018 to $29.8 million at June 30, 2018. Interest-bearing checking balances increased $1.2 million, or 14%, from $8.6 million at March 31, 2018 to $9.8 million at June 30, 2018. Money market deposits decreased $13.7 million, or 13%, from $107.7 million at March 31, 2018 to $93.9 million at June 30, 2018. Certificates of deposit increased $20.1 million, or 29%, from $70.2 million at March 31, 2018 to $90.3 million at June 30, 2018. The deposit portfolio grew $12.9 million, or 6%, in the first six months of 2018, with a $4.8 million increase in total checking balances and a $22.7 million increase in certificates of deposit, partially offset by a $14.6 million decline in money market balances. The deposit portfolio experienced year-over-year growth of $20 million, or 10%, from June 30, 2017 to June 30, 2018.

The loan portfolio grew $10.3 million, or 5%, during the second quarter from $223.3 million at March 31, 2018 to $233.6 million at June 30, 2018, with the majority of that growth in commercial real estate loans. Year-to-date net loan growth in 2018 was $16.2 million, or 7%, with increases in all loan categories, with the vast majority of that growth in commercial real estate loans. Year-over-year net loan growth was $28.5 million, or 14%.

The following table illustrates the composition of the loan portfolio:


June 30,

2018


Dec. 31,

2017


June 30,

2017







Commercial real estate

$  160,356,631


$  147,895,320


$  138,997,879

Commercial construction

20,853,766


19,794,234


19,925,026

Commercial business

30,942,553


28,315,241


25,350,384

Consumer

21,487,555


21,459,111


20,829,024







Total loans

$  233,640,505


$  217,463,906


$  205,102,313

The allowance for loan losses to total loans was 0.87% at June 30, 2018 as compared to 0.81% at December 31, 2017 and 0.80% at June 30, 2017. Non-performing assets, which include non-performing loans of $3.3 million and other real estate owned of $199 thousand, totaled $3.5 million at June 30, 2018, a 17% increase as compared to the prior quarter due to one loan relationship being placed on non-accrual during the quarter. Non-performing assets to total assets increased from 1.17% at March 31, 2018 to 1.30% at June 30, 2018.

Total stockholder's equity increased 2% from $23.5 million at March 31, 2018 to $24.0 million at June 30, 2018, primarily due to net income generated. Book value per share increased 18 cents during the second quarter of 2018 to $9.15 per share at June 30, 2018.

Total assets increased $13.7 million, or 5% during the second quarter of 2018. This increase was primarily the result of strong loan growth funded by deposits.

 

Selected Financial Data:

Balance Sheets (unaudited)



June 30,
2018


December 31,
2017





Cash and due from banks

$     5,530,776


$     2,998,367

Time deposits at other banks

599,000


599,000

Investments

19,525,126


36,219,930

Loans

233,640,505


217,463,906

Allowance for loan losses

(2,034,295)


(1,751,953)

Premises & equipment

5,747,450


5,671,763

Other assets

8,460,218


7,353,942





Total assets

$ 271,468,780


$ 268,554,955





Non-interest bearing deposits

$   29,770,431


$   24,987,354

Interest-bearing checking

9,798,555


9,755,198

Money market

93,927,020


108,500,566

Time deposits

90,312,104


67,658,995

  Total deposits

223,808,110


210,902,113

Short term borrowings

-


17,997,000

Long term borrowings

18,515,500


11,287,500

Subordinated debt

3,981,850


3,977,603

Other liabilities

1,141,561


1,227,099





Total liabilities

247,447,021


245,391,315





Total stockholders' equity

24,021,759


23,163,640





Total liabilities & 
     
stockholders' equity

$ 271,468,780


$ 268,554,955

 

 

Performance Statistics

(unaudited)



Qtr Ended

June 30,

2018


Qtr Ended

Mar. 31,

2018


Qtr Ended

Dec. 31,

2017


Qtr Ended

Sept. 30,

2017


Qtr Ended

June 30,

2017











Net interest margin

3.97%


3.98%


3.90%


3.96%


3.87%











Nonperforming loans/ 
     
Total loans

1.42%


1.35%


1.39%


1.54%


0.99%











Nonperforming assets/ 
     
Total assets

1.30%


1.17%


1.13%


1.28%


0.83%











Allowance for loan losses/ 
     
Total loans

0.87%


0.85%


0.81%


0.86%


0.80%











Average loans/Average 
     assets

86.6%


86.1%


84.3%


84.6%


84.3%











Non-interest expenses*/ 
     Average assets

2.72%


2.84%


2.57%


2.68%


2.78%











Earnings per share – basic 
     
and diluted

$0.20


$0.18


$0.15


$0.18


$0.18











Book value per share

$9.15


$8.97


$8.83


$8.72


$8.55











Total shares outstanding

2,625,130


2,623,575


2,621,887


2,619,773


2,617,596


* Annualized

 

 

Income Statements (unaudited)



Qtr. Ended

June 30,

2018


Qtr. Ended

Mar. 31,

2018


Qtr. Ended

Dec. 31,

2017


Qtr. Ended

Sept 30,

2017


Qtr. Ended

June 30,

2017











INTEREST INCOME










Loans, including fees

$3,076,950


$2,849,596


$2,768,463


$2,714,301


$2,615,571

Securities

126,632


130,141


113,230


109,255


102,142

Other

1,733


2,563


15,593


13,976


10,888

 Total interest income

3,205,315


2,982,300


2,897,286


2,837,532


2,728,601











INTEREST EXPENSE










Deposits

513,174


441,063


433,287


410,731


408,308

Borrowings

130,785


76,810


47,575


47,005


49,122

Subordinated debt

67,486


67,124


67,843


67,847


67,486

 Total interest expense

711,445


584,997


548,705


525,583


524,916











Net interest income

2,493,870


2,397,303


2,348,581


2,311,949


2,203,685











Provision for loan losses

191,321


134,322


89,233


123,974


20,085











Net interest income after
provision for loan losses

2,302,549


2,262,981


2,259,348


2,187,975


2,183,600











NON-INTEREST INCOME










BOLI income

37,564


35,040


28,258


28,473


28,522

Gain on sale of SBA loans

28,725


-


-


41,536


-

Other

73,441


80,702


65,463


65,797


71,030

 Total non-interest income

139,730


115,742


93,721


135,806


99,552











NON-INTEREST EXPENSE










Salaries & benefits

1,055,702


1,028,005


923,583


947,285


895,634

Occupancy & equipment

178,119


194,772


175,539


188,968


187,672

Professional fees

99,919


87,452


90,275


82,922


144,447

Advertising

45,638


62,222


24,802


41,717


47,905

Data processing

111,828


105,617


102,435


93,119


98,353

Other

309,324


317,187


309,388


292,103


294,235

Total non-interest 
     
expense

1,800,530


1,795,255


1,626,022


1,646,114


1,668,246











Income before income tax
expense

641,749


583,468


727,047


677,667


614,906











Federal income tax expense

120,924


102,476


325,290


215,963


197,205











Net income

$  520,825


$  480,992


$  401,757


$   461,704


$   417,701

 

 

Income Statements (unaudited)



Six Months

Ended

June 30,

2018


Six Months

Ended

June 30,

2017





INTEREST INCOME




Loans

$   5,926,546


$   5,119,148

Investments

256,773


200,965

Other

4,296


32,611

 Total interest income

6,187,615


5,352,724





INTEREST EXPENSE




Deposits

954,237


817,981

Borrowings

207,595


100,057

Subordinated debt

134,610


134,610

 Total interest expense

1,296,442


1,052,648





Net interest income

4,891,173


4,300,076





Provision for loan losses

325,643


140,109





Net interest income after provision for
loan losses

4,565,530


4,159,967





NON-INTEREST INCOME




BOLI income

72,604


56,892

Gain on sale of SBA loans

28,725


155,337

Other

154,143


148,593

 Total non-interest income

255,472


360,822





NON-INTEREST EXPENSE




Salaries & benefits

2,083,707


1,759,456

Occupancy & equipment

372,891


378,453

Professional fees

187,371


257,941

Advertising

107,860


90,380

Data processing

217,445


194,631

Other non-interest expense

626,511


626,968

Total non-interest expense

3,595,785


3,307,829





Pre-tax income

1,225,217


1,212,960





Tax expense

223,400


388,706





Net income

$   1,001,817


$      824,254

About First Resource Bank

First Resource Bank is a locally owned and operated Pennsylvania state-chartered bank with two full-service branches, 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. 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.

 

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SOURCE First Resource Bank

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