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