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First Commerce Bancorp, Inc. Reports the Third Quarter and Year-to-Date 2024 Results

CMRB

LAKEWOOD, NJ / ACCESSWIRE / October 31, 2024 / First Commerce Bancorp, Inc. (the "Company"), (OTC PINK:CMRB), the holding company for First Commerce Bank (the "Bank"), today reported net income of $1.1 million and $3.4 million for the three and nine months ended September 30, 2024 respectively, as compared to $1.7 million and $7.9 million for the three and nine months ended September 30, 2023 respectively. Basic earnings per common share for the three and nine months ended September 30, 2024, were $0.05 and $0.15, respectively, compared to $0.07 and $0.33 for the three and nine months ended September 30, 2023, respectively.

President & CEO Donald Mindiak commented, "Our earnings continue to be impacted by higher cost of funds which in turn affected our net interest margin. In September, the Federal Reserve took action to cut its benchmark rate, signaling a potential tail-wind for bank fundamentals. We believe this will benefit us in the future given our interest rate sensitivity as well as our retail and wholesale funding structure. Our liquidity profile, credit metrics and capital position continue to be strong. We are focused on strengthening our balance sheet, enhancing our funding strategy and monitoring our operating expenses to achieve sustained growth and profitability."

Continuing, Mr. Mindiak remarked that, "with respect to the on-going stock repurchase plan, the Company has availed itself to advantageous market conditions in continuing to repurchase common shares at a discount to our book value. During the quarter ended September 30, 2024, we have repurchased just over 800,381 shares at an average price of $6.15/share which is a discount of $2.16/share or 26% of our book value of $8.31/share as of September 30, 2024. We remain committed to leveraging our capital organically and through corporate initiatives that have the capacity to enhance value for our shareholders."

Financial Highlights

Total interest income increased by $1.4 million or 7.7% for the third quarter of 2024 compared to the third quarter of 2023 as a result of the growth in average interest-earning assets year-over-year.

Average yield on interest earning assets increased by twenty-eight basis points to 5.66% for the third quarter of 2024 as compared to 5.38% for the third quarter of 2023.

Total cost of interest-bearing liabilities increased by sixty-seven basis points to 4.18% for the third quarter of 2024 compared to 3.51% for the third quarter of 2023.

Net interest margin decreased by thirty-eight basis points to 2.35% for the third quarter of 2024 as compared to 2.73% for the third quarter of 2023.

The annualized return on average total assets for the quarter ended September 30, 2024 was 0.31% compared to 0.47% for the quarter ended September 30, 2023.

The annualized return on average shareholders' equity for the quarter ended September 30, 2024 was 2.56% compared to 3.63% for the quarter ended September 30, 2023.

The book value per common share was $8.31 at September 30, 2024 compared to $7.80 at September 30, 2023, an increase of $0.51 per share year-over-year.

Balance Sheet Review

Total assets increased by $40.2 million or 2.8% to $1.48 billion at September 30, 2024 from $1.44 billion at December 31, 2023. The increase in total assets was primarily related to increases in total cash and cash equivalents, total investment securities and total loans receivable during the nine months ended September 30, 2024.

Total cash and cash equivalents increased by $12.9 million or 20.9% to $74.6 million at September 30, 2024 from $61.7 million at December 31, 2023. This increase was primarily due to an increase in wholesale borrowings which were used for standard operational purposes.

Total loans receivable, net of allowance for credit losses increased by $10.9 million or 0.9% to $1.25 billion at September 30, 2024 from $1.24 billion at December 31, 2023. Commercial real estate loans, commercial loans and construction loans increased $7.6 million, $4.0 million and $3.6 million, respectively, partially offset by a $3.3 million decrease in small business administration loans and a $1.1 million decrease in residential mortgage loans. The allowance for credit losses increased by $399,000 to $14.9 million or 1.18% of gross loans at September 30, 2024 as compared to $14.5 million or 1.16% of gross loans at December 31, 2023.

Total investment securities increased by $12.6 million or 18.3% to $81.7 million at September 30, 2024 from $69.1 million at December 31, 2023. The increase in investment securities resulted primarily from $21.3 million in purchases of investment securities, partially offset by $7.2 million in total paydowns and $1.5 million in maturities of investment securities.

Total deposits were $1.10 billion at September 30, 2024, almost unchanged from December 31, 2023. Within the components of total deposits, money market deposits increased $17.2 million, NOW and interest checking account deposits increased $17.1 million and brokered deposits increased $48.2 million, partially offset by a decrease of $60.9 million in time deposits, a $7.3 million decrease in non-interest bearing demand deposits and a $4.9 million decrease in savings deposits.

Stockholders' equity decreased by $11.4 million or 6.2% to $172.6 million at September 30, 2024 from $184.0 million at December 31, 2023. The decrease in stockholders' equity was primarily due to a $13.5 million in purchase of outstanding shares of common stock, offset by an increase of $1.6 million in retained earnings and an increase of $453,000 in additional paid-in-capital. During the first nine months of 2024, the Company repurchased 2.2 million shares for approximately $13.5 million, or a weighted average price of approximately $6.27 per share.

Three Months of Operations

Net interest income decreased by $1.1 million or 11.9% to $8.4 million for the three months ended September 30, 2024 from $9.5 million for the three months ended September 30, 2023. The decrease in net interest income was primarily due to an increase in funding costs as a result of the inverted yield curve where short-term rates continue to trend higher than medium and long-term maturities.

Total interest income increased by $1.4 million or 7.7% to $20.1 million for the three months ended September 30, 2024 from $18.7 million for the three months ended September 30, 2023. Interest income on loans, including fees, increased $945,000 or 5.4% to $18.3 million for the three months ended September 30, 2024, compared to $17.3 million for the three months ended September 30, 2023. The increase in interest income on loans, including fees, resulted primarily from an increase in the average balance of loans receivable of $11.9 million or 1.0% to $1.26 billion for the three months ended September 30, 2024 compared to $1.25 billion for the three months ended September 30, 2023 and an increase of twenty-seven basis points in the average yield on loans to 5.79% for the three months ended September 30, 2024 compared to 5.52% for the same period in the prior year. Interest income on interest-bearing deposits with other banks increased $158,000 or 23.3% to $834,000 for the three months ended September 30, 2024 as compared to $677,000 for the same period in the prior year. This increase resulted from a higher average balance of interest-bearing deposits with banks of $12.7 million or 23.3% to $67.5 million for the three months ended September 30, 2024 compared to $54.8 million for the same period in the prior year. Interest income on investment securities increased $294,000 or 55.5% to $824,000 for the three months ended September 30, 2024 as compared to $530,000 for the same period in the prior year, as a result of purchasing and replacing paydowns of investment securities with higher yielding corporate bonds. Average yield on investment securities increased by 112 basis points to 4.02% for the three months ended September 30, 2024 compared to 2.90% for the same period in the prior year. Dividend income on restricted stock increased $45,000 to $198,000 for the three months ended September 30, 2024 as compared to $154,000 for the same period in the prior year, primarily as a result of an increase of $2.8 million in average balance of restricted stock outstanding year over year.

Total interest expense increased by $2.6 million or 27.9% to $11.8 million for the three months ended September 30, 2024 from $9.2 million for the three months ended September 30, 2023. The increase in interest expense occurred primarily as a result of a sixty-seven basis points increase in the average cost of interest-bearing liabilities to 4.18% for the three months ended September 30, 2024 from 3.51% for the three months ended September 30, 2023 and an increase in average balance of interest-bearing liabilities of $79.6 million or 7.6%, to $1.12 billion for the three months ended September 30, 2024 from $1.04 billion for the three months ended September 30, 2023. The increase in average balance of interest-bearing liabilities included a $58.5 million increase in average wholesale borrowings and a $21.1 million increase in average interest-bearing deposit liabilities for the three months ended September 30, 2024. The increase in the average cost of interest-bearing liabilities resulted primarily from the continued higher interest rate environment. The increase in interest-bearing liabilities was primarily used to support loan growth and to maintain liquidity.

During the third quarter of 2024, the Company recorded a net $54,000 provision for credit losses as compared to a net $600,000 provision for credit losses for the same period in the prior year. Based on the results of the CECL model and management's evaluation of both quantitative and qualitative factors for the third quarter of 2024, the Company recorded a provision for credit losses of $73,000 on loans and corporate securities held-to-maturity, which was partially offset by a $19,000 reversal of credit losses for unfunded commitments. Management believes that the allowance for credit losses on loans was appropriate at September 30, 2024.

Net interest margin decreased by thirty-eight basis points to 2.35% for the three months ended September 30, 2024 compared to 2.73% for the three months ended September 30, 2023. The decrease in the net interest margin is primarily due to an increase in the average cost of interest-bearing liabilities to 4.18% for the three months ended September 30, 2024 from 3.51% for the three months ended September 30, 2023 and an increase in the average balance of interest-bearing liabilities to $1.12 billion for the three months ended September 30, 2024 from $1.04 billion for the three months ended September 30, 2023. This increase was partially offset by an increase in average balance of interest earning assets of $36.2 million or 2.6% to $1.42 billion for the three months ended September 30, 2024 compared to $1.38 billion for the three months ended September 30, 2023 and an increase in the average yield of interest earning assets to 5.66% for the three months ended September 30, 2024 from 5.38% for the three months ended September 30, 2023.

Non-interest expense increased by $392,000 or 5.5% to $7.5 million for the three months ended September 30, 2024 compared to $7.1 million for the three months ended September 30, 2023. Salaries and employee benefits increased by $185,000 or 4.2% to $4.6 million for the three months ended September 30, 2024 as compared to $4.4 million for the three months ended September 30, 2023. The increase in salaries and employee benefits resulted primarily from annual increase in health benefit costs year over year. Professional fees decreased by $139,000 or 23.6% to $451,000 for the three months ended September 30, 2024 as compared to $590,000 for the three months ended September 30, 2023, primarily due to a reduction in legal services related to the formation of the holding company and a reduction in audit fees compared to the same period in the prior year. Data processing costs increased by $112,000 or 51.2% to $330,000 for the three months ended September 30, 2024 from $218,000 for the three months ended September 30, 2023, as a result of annual fee increase, and additional cost related to new products and services. Other operating expenses increased by $277,000 or 36.4% to $1.0 million for the three months ended September 30, 2024 from $760,000 for the three months ended September 30, 2023. Other operating expenses are primarily comprised of loan related expenses, dues and subscriptions, digital banking expenses, sponsorships, training and education, software maintenance and depreciation, and miscellaneous expenses. Management will continue to monitor its operating expenses to enhance shareholder value.

The income tax provision decreased by $296,000 or 55.2% to $240,000 for the three months ended September 30, 2024 from $536,000 for the three months ended September 30, 2023. This decrease in the income tax provision resulted primarily from a decrease in the pre-tax income year over year. In addition, the effective tax yield declined year over year as a result of a reduction in New York state tax apportionment.

Nine Months of Operations

Net interest income decreased by $5.7 million or 18.5% to $24.9 million for the nine months ended September 30, 2024 from $30.6 million for the nine months ended September 30, 2023. The decrease in net interest income was primarily due to an increase in funding costs as a result of the inverted yield curve where short-term rates continue to trend higher than medium and long-term maturities.

Total interest income increased by $5.9 million or 11.1% to $59.0 million for the nine months ended September 30, 2024 from $53.1 million for the nine months ended September 30, 2023. Interest income on loans, including fees, increased $4.4 million or 8.8% to $53.9 million for the nine months ended September 30, 2024, compared to $49.6 million for the nine months ended September 30, 2023. The increase in interest income on loans, including fees, resulted primarily from an increase in the average balance of loans receivable of $49.7 million or 4.1% to $1.25 billion for the nine months ended September 30, 2024 compared to $1.20 billion for the nine months ended September 30, 2023 and an increase of twenty-five basis points in the average yield on loans to 5.75% for the nine months ended September 30, 2024 compared to 5.50% for the same period in the prior year. In addition, the increase in interest income on loans includes recovery of approximately $200,000 of past due interest on commercial real estate loans and approximately $400,000 in pre-payment penalties. Interest income on interest-bearing deposits with other banks increased $779,000 or 47.1% to $2.4 million for the nine months ended September 30, 2024 as compared to $1.7 million for the same period in the prior year. This increase resulted from a higher average yield on interest-bearing deposits with banks of 4.94% for the nine months ended September 30, 2024 compared to 4.50% for the same period in the prior year, and an increase of $16.5 million in average balances of interest-bearing deposits with banks year over year. Interest income on investment securities increased $482,000 or 29.8% to $2.1 million for the nine months ended September 30, 2024 as compared to $1.6 million for the same period in the prior year, as a result of purchasing and replacing paydowns of investment securities with higher yielding corporate bonds. Average yield on investment securities increased by eighty-three basis points to 3.67% for the nine months ended September 30, 2024 compared to 2.84% for the same period in the prior year. Dividend income on restricted stock increased $244,000 to $538,000 for the nine months ended September 30, 2024 as compared to $295,000 for the same period in the prior year, primarily as a result of significantly higher average yield on restricted stock of 8.54% for the nine months ended September 30, 2024 compared to 6.64% for the same period in the prior year, and an increase of $2.5 million in average restricted stock balance year over year.

Total interest expense increased by $11.5 million or 51.3% to $34.0 million for the nine months ended September 30, 2024 from $22.5 million for the nine months ended September 30, 2023. The increase in interest expense occurred primarily as a result of a 106 basis points increase in the average cost of interest-bearing liabilities to 4.11% for the nine months ended September 30, 2024 from 3.05% for the nine months ended September 30, 2023 and an increase in average balance of interest-bearing liabilities of $121.4 million or 12.3%, to $1.10 billion for the nine months ended September 30, 2024 from $985.5 million for the nine months ended September 30, 2023. The increase in average balance of interest-bearing liabilities included a $70.5 million increase in average interest-bearing deposit liabilities and a $50.9 million increase in average wholesale borrowings for the nine months ended September 30, 2024. The increase in the average cost of interest-bearing liabilities resulted primarily from the continued higher interest rate environment. The increase in interest-bearing liabilities was primarily used to support loan growth and to maintain liquidity.

During the first nine months of 2024 the Company recorded a net $362,000 provision for credit losses as compared to a net $971,000 provision for credit losses for the same period in the prior year. Based on the results of the CECL model and management's evaluation of both quantitative and qualitative factors during the first nine months of 2024, the Company recorded a provision for credit losses on loans and corporate securities held-to-maturity of $505,000, which was offset by a $143,000 reversal of credit losses for unfunded commitments. Unfunded commitment balances declined by $55.1 million during the first nine months of 2024 compared to the year-end 2023, which resulted in recording a reversal in provision for credit losses for unfunded commitments. Management believes that the allowance for credit losses on loans was appropriate at September 30, 2024.

Net interest margin decreased by seventy basis points to 2.37% for the nine months ended September 30, 2024 compared to 3.07% for the nine months ended September 30, 2023. The decrease in the net interest margin is primarily attributable to a significant increase in the cost of interest-bearing liabilities to 4.11% for the nine months ended September 30, 2024 from 3.05% for the nine months ended September 30, 2023 and increase in the average balance of interest-bearing liabilities to $1.10 billion for the nine months ended September 30, 2024 from $985.5 million for the nine months ended September 30, 2023, partially offset by an increase in the average balance of interest earning assets $1.40 billion for the nine months ended September 30, 2024 compared to $1.33 billion for the nine months ended September 30, 2023, as well as an increase of twenty-nine basis points on the yield of average interest earning assets to 5.61% for the nine months ended September 30, 2024 from 5.32% for the nine months ended September 30, 2023.

Non-interest income decreased by $269,000 or 13.9% to $1.7 million for the nine months ended September 30, 2024 from $1.9 million for the nine months ended September 30, 2023. The decrease in total non-interest income resulted primarily from a decrease in BOLI income of $313,000 or 30.6% to $711,000 for the nine months ended September 30, 2024 from $1.0 million for the nine months ended September 30, 2023. The decrease in BOLI income resulted from a one-time benefit received on the Bank's investment in BOLI during the first nine months of 2023. Services charges and fees increased $114,000 and other income decreased $70,000 in during the nine months ended September 30, 2024 compared to the same period in the prior year.

Non-interest expense increased by $849,000 or 4.0% to $22.0 million for the nine months ended September 30, 2024 compared to $21.1 million for the nine months ended September 30, 2023. Salaries and employee benefits increased by $567,000 or 4.4% to $13.5 million for the nine months ended September 30, 2024 as compared to $13.0 million for the nine months ended September 30, 2023. The increase in salaries and employee benefits resulted primarily from annual increase in health benefit costs year over year. Occupancy and equipment expense decreased by $280,000 or 9.3% to $2.7 million for the nine months ended September 30, 2024 as compared to $3.0 million for the nine months ended September 30, 2023 primarily due to a decrease in other real estate owned expenses ("OREO"), other occupancy expenses and equipment service contract costs. Professional fees decreased by $224,000 or 13.6% to $1.4 million for the nine months ended September 30, 2024 from $1.6 million for the nine months ended September 30, 2023 as a result of reduction in legal services related to the formation of the Holding Company and audit fees. Data processing costs increased by $260,000 or 39.7% to $915,000 for the nine months ended September 30, 2024 from $655,000 for the nine months ended September 30, 2023 as a result of annual fee increase and additional cost related to new products and services. FDIC assessment increased by $102,000 or 23.8% to $531,000 for the nine months ended September 30, 2024 from $429,000 for the nine months ended September 30, 2023 primarily due to overall higher deposit insurance assessment rate in effect during the first nine months of 2024 compared to the same period in the prior year. Other expenses increased by $482,000 or 23.2% to $2.6 million for the nine months ended September 30, 2024 from $2.1 million for the nine months ended September 30, 2023. Other operating expenses are primarily comprised of loan related expenses, dues and subscriptions, digital banking expenses, sponsorships, training and education, software maintenance and depreciation, and miscellaneous expenses. There was no loss on valuation of OREO for the nine months ended September 30, 2024 compared to a loss on sale of OREO of $59,000 recorded during the nine months ended September 30, 2023.

The income tax provision decreased by $1.6 million or 63.9% to $908,000 for the nine months ended September 30, 2024 from $2.5 million for the nine months ended September 30, 2023. The decrease in the income tax provision resulted primarily from a decrease in earnings before income taxes of $6.2 million or 59.1%, to $4.3 million for the nine months ended September 30, 2024 from $10.5 million for the nine months ended September 30, 2023. The effective tax rate for the nine months ended September 30, 2024 was 21.2% as compared to 24.0% for the nine months ended September 30, 2023.

Asset Quality

The allowance for credit losses increased by $399,000 or 2.8% to $14.9 million or 1.18% of gross loans at September 30, 2024 as compared to $14.5 million or 1.16% of gross loans at December 31, 2023 and $19.6 million or 1.55% of gross loans at September 30, 2023. During the first nine months of 2024, the Company added a $423,000 provision to the allowance for credit losses and had net charge-offs of $24,000. Changes in the allowance for credit losses are calculated and adjusted quarterly and accordingly, relative to loan growth and quantitatively measured asset quality metrics.

The Bank had non-accrual loans totaling $14.5 million or 1.15% of gross loans at September 30, 2024 as compared to $18.4 million or 1.47% of gross loans at December 31, 2023 and $15.7 million or 1.24% of gross loans at September 30, 2023. Non-accrual loans decreased by $3.9 million or 21.1% from December 31, 2023. The allowance for credit losses was 102.7% of non-accrual loans at September 30, 2024, compared to 78.8% and 124.3% of non-accrual loans at December 31, 2023 and September 30, 2023, respectively.

About First Commerce Bancorp, Inc.

First Commerce Bancorp, Inc, is a financial services organization headquartered in Lakewood, New Jersey. The Bank, the Company's wholly owned subsidiary, provides businesses and individuals a wide range of loans, deposit products and retail and commercial banking services through its branch network located in Allentown, Bordentown, Closter, Englewood, Fairfield, Freehold, Jackson, Lakewood, Robbinsville and Teaneck, New Jersey. For more information, please go to www.firstcommercebk.com.

Donald Mindiak
President and Chief Executive Officer
105 River Ave | Lakewood, NJ 08701
T: (732) 364-0032 x1224
DMindiak@firstcommercebk.com

Forward-Looking Statements

This release, like many written and oral communications presented by First Commerce Bancorp Inc., and our authorized officers, may contain certain forward-looking statements regarding our prospective performance and strategies within the meaning of Section 27A of the Securities Act of 1933 as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and are including this statement for purposes of said safe harbor provisions. Forward-looking statements, which are based on certain assumptions and describe future plans, strategies, and expectations of the Company, are generally identified by use of the words "anticipate," "believe," "estimate," "expect," "intend," "plan," "project," "seek," "strive," "try," or future or conditional verbs such as "could," "may," "should," "will," "would," or similar expressions. Our ability to predict results or the actual effects of our plans or strategies is inherently uncertain. Accordingly, actual results may differ materially from anticipated results.

In addition to the factors previously disclosed in prior Bank communications and those identified elsewhere, the following factors, among others, could cause actual results to differ materially from forward-looking statements or historical performance: the impact of changes in interest rates and in the credit quality and strength of underlying collateral and the effect of such changes on the market value of First Commerce Bank's investment securities portfolio; changes in asset quality and credit risk; the inability to sustain revenue and earnings growth; difficult market conditions and unfavorable economic trends in the United States generally, and particularly in the market areas in which First Commerce Bank operates and in which its loans are concentrated, including the effects of declines in housing market values; the effects of the recent turmoil in the banking industry (including the failures of two financial institutions); inflation; customer acceptance of the Bank's products and services; customer borrowing, repayment, investment and deposit practices; customer disintermediation; the introduction, withdrawal, success and timing of business initiatives; competitive conditions; the inability to realize cost savings or revenues or to implement integration plans and other consequences associated with certain corporate initiatives; economic conditions; and the impact, extent and timing of technological changes, capital management activities, and actions of governmental agencies and legislative and regulatory actions and reforms.

First Commerce Bancorp, Inc.
Consolidated Statements of Financial Condition
(Unaudited)

September 30, 2024 vs.

December 31, 2023

September 30, 2023

(dollars in thousands, except percentages and share data)

September 30,
2024

December 31, 2023

September 30,
2023

Amount

%

Amount

%

Assets

Cash and cash equivalents:

Cash on hand

$

1,872

$

1,745

$

1,795

$

126

7.2

%

$

77

4.3

%

Interest-bearing deposits in other banks

72,779

59,979

41,738

12,800

21.3

%

31,041

74.4

%

Total cash and cash equivalents

74,651

61,724

43,533

12,927

20.9

%

31,118

71.5

%

Investment securities:

Available-for-sale, at fair value

7,748

9,537

10,703

(1,790

)

-18.8

%

(2,955

)

-27.6

%

Held-to-maturity, at amortized cost

74,085

59,551

61,262

14,534

24.4

%

12,823

20.9

%

Less: Allowance for credit losses - HTM securities

(108

)

(26

)

(28

)

(82

)

317.0

%

(80

)

284.7

%

Held-to-maturity, net of allowance for credit losses

73,977

59,525

61,234

14,452

24.3

%

12,743

20.8

%

Total investment securities

81,725

69,062

71,937

12,663

18.3

%

9,788

13.6

%

Restricted stock

9,641

7,169

6,044

2,472

34.5

%

3,597

59.5

%

Loans receivable

1,262,481

1,251,227

1,263,918

11,254

0.9

%

(1,437

)

-0.1

%

Less: Allowance for credit losses

(14,869

)

(14,470

)

(19,562

)

(399

)

2.8

%

4,693

-24.0

%

Net loans receivable

1,247,612

1,236,757

1,244,356

10,854

0.9

%

3,256

0.3

%

Premises and equipment, net

16,574

15,861

16,228

713

4.5

%

346

2.1

%

Right-of-use asset

9,179

9,498

9,603

(319

)

-3.4

%

(424

)

-4.4

%

Accrued interest receivable

5,712

5,632

5,630

80

1.4

%

82

1.5

%

Bank owned life insurance

26,468

25,757

25,535

711

2.8

%

933

3.7

%

Deferred tax asset, net

2,921

2,947

4,428

(26

)

-0.9

%

(1,507

)

-34.0

%

Other assets

1,769

1,692

1,679

77

4.6

%

90

5.3

%

Total assets

$

1,476,252

$

1,436,099

$

1,428,973

$

40,152

2.8

%

$

47,279

3.3

%

Liabilities and Stockholders' Equity

Liabilities

Deposits:

Non-interest bearing

$

154,786

$

154,503

$

180,047

$

283

0.2

%

$

(25,261

)

-14.0

%

Interest-bearing

942,379

943,295

941,814

(916

)

-0.1

%

565

0.1

%

Total Deposits

1,097,165

1,097,798

1,121,861

(634

)

-0.1

%

(24,696

)

-2.2

%

Borrowings

181,500

130,000

105,000

51,500

39.6

%

76,500

72.9

%

Accrued interest payable

1,967

2,008

1,742

(40

)

-2.0

%

225

12.9

%

Lease liability

9,910

10,161

10,237

(251

)

-2.5

%

(327

)

-3.2

%

Other liabilities

13,068

12,136

4,647

932

7.7

%

8,421

181.2

%

Total liabilities

1,303,610

1,252,102

1,243,487

51,508

4.1

%

60,123

4.8

%

Commitments and contingencies

-

-

-

-

-

-

-

Stockholders' equity

Preferred stock; authorized 5,000,000 shares; non issued

-

-

-

-

N/A

-

N/A

Common stock, par value of $0; 30,000,000 authorized

-

-

-

-

N/A

-

N/A

Additional paid-in capital

89,394

88,941

88,654

453

0.5

%

740

0.8

%

Retained earnings

103,817

102,219

97,299

1,598

1.6

%

6,518

6.7

%

Treasury stock

(20,464

)

(6,964

)

(74

)

(13,500

)

193.8

%

(20,390

)

27554.0

%

Accumulated other comprehensive loss

(105

)

(200

)

(393

)

95

-47.7

%

288

-73.4

%

Total stockholders' equity

172,642

183,996

185,486

(11,354

)

-6.2

%

(12,844

)

-6.9

%

Total liabilities and stockholders' equity

$

1,476,252

$

1,436,099

$

1,428,973

$

40,154

2.8

%

$

47,279

3.3

%

Shares issued

23,958,990

23,856,990

23,788,990

Shares outstanding

20,779,710

22,830,559

23,777,078

Treasury shares

3,179,280

1,026,431

11,912

First Commerce Bancorp, Inc.
Consolidated Statements of Income
For the three months ended September 30, 2024 and 2023
(Unaudited)

Variance

(dollars in thousands, except percentages and share data)

September 30, 2024

September 30, 2023

Amount

%

Interest and Dividend Income

Loans, including fees

$

18,294

$

17,349

$

945

5.4

%

Investment securities:

Available-for-sale

59

85

(26

)

-30.8

%

Held-to-maturity

765

445

319

71.8

%

Interest-bearing deposits with other banks

834

677

157

23.2

%

Restricted stock dividends

198

154

45

28.9

%

Total interest and dividend income

20,150

18,710

1,440

7.7

%

Interest expense:

Deposits

9,720

7,870

1,851

23.5

%

Borrowings

2,065

1,347

718

53.3

%

Total interest expense

11,785

9,217

2,568

27.9

%

Net interest income

8,364

9,493

(1,128

)

-11.9

%

Provision for credit losses

39

736

(697

)

-94.7

%

Benefit for unfunded commitments for credit losses

(19

)

(164

)

146

-88.6

%

Provision for credit losses - HTM securities

34

28

6

22.5

%

Total provision for credit losses

54

600

(545

)

-90.9

%

Net interest income after provision for
credit losses

8,310

8,893

(583

)

-6.6

%

Non-interest Income:

Service charges and fees

217

168

49

29.4

%

Bank owned life insurance income

241

175

65

37.4

%

Other income

124

130

(6

)

-4.8

%

Total non-interest income

582

473

109

23.0

%

Non-Interest Expenses:

Salaries and employee benefits

4,552

4,366

185

4.2

%

Occupancy and equipment expense

898

953

(55

)

-5.8

%

Advertising and marketing

96

96

-

0.0

%

Professional fees

451

590

(139

)

-23.6

%

Data processing expense

330

218

112

51.2

%

FDIC insurance assessment

161

150

11

7.4

%

Other operating expenses

1,036

760

277

36.4

%

Total non-interest expenses

7,524

7,133

392

5.5

%

Income before income taxes

1,368

2,233

(865

)

-38.7

%

Income tax provision

240

536

(296

)

-55.2

%

Net income

$

1,128

$

1,697

$

(569

)

-33.5

%

Earnings per common share - Basic

$

0.05

$

0.07

$

(0.02

)

-25.3

%

Earnings per common share - Diluted

0.05

0.07

(0.02

)

-25.1

%

Weighted average shares outstanding - Basic

21,163,621

23,786,543

(2,622,922

)

-11.0

%

Weighted average shares outstanding - Diluted

21,386,694

24,115,633

(2,728,939

)

-11.3

%

First Commerce Bancorp, Inc.
Consolidated Statements of Income
For the nine months ended September 30, 2024 and 2023
(Unaudited)

Variance

(dollars in thousands, except percentages and share data)

September 30, 2024

September 30, 2023

Amount

%

Interest and Dividend Income

Loans, including fees

$

53,925

$

49,551

$

4,374

8.8

%

Investment securities:

Available-for-sale

191

279

(88

)

-31.6

%

Held-to-maturity

1,907

1,337

569

42.6

%

Interest-bearing deposits with other banks

2,433

1,655

779

47.1

%

Restricted stock dividends

538

295

244

82.6

%

Total interest and dividend income

58,994

53,116

5,878

11.1

%

Interest expense:

Deposits

28,311

18,650

9,661

51.8

%

Borrowings

5,736

3,854

1,881

48.8

%

Total interest expense

34,047

22,505

11,542

51.3

%

Net interest income

24,947

30,612

(5,664

)

-18.5

%

Provision (benefit) for credit losses

423

1,496

(1,073

)

-71.7

%

Benefit for unfunded commitments for credit losses

(143

)

(553

)

410

-74.2

%

Provision for credit losses - HTM securities

82

28

54

196.1

%

Total provision (benefit) for credit losses

362

971

(609

)

-62.7

%

Net interest income after provision for
credit losses

24,585

29,640

(5,055

)

-17.1

%

Non-interest Income:

Service charges and fees

637

523

114

21.9

%

Bank owned life insurance income

711

1,024

(313

)

-30.6

%

Other income

319

389

(70

)

-18.1

%

Total non-interest income

1,667

1,936

(269

)

-13.9

%

Non-Interest Expenses:

Salaries and employee benefits

13,541

12,973

567

4.4

%

Occupancy and equipment expense

2,723

3,003

(280

)

-9.3

%

Advertising and marketing

286

286

-

0.0

%

Professional fees

1,421

1,644

(224

)

-13.6

%

Data processing expense

915

655

260

39.7

%

FDIC insurance assessment

531

429

102

23.8

%

Loss on valuation of OREO

-

59

(58

)

-99.5

%

Other operating expenses

2,555

2,073

482

23.2

%

Total non-interest expenses

21,972

21,122

850

4.0

%

Income before income taxes

4,280

10,454

(6,174

)

-59.1

%

Income tax provision

908

2,511

(1,603

)

-63.9

%

Net income

$

3,372

$

7,944

$

(4,570

)

-57.5

%

Earnings per common share - Basic

$

0.15

$

0.33

$

(0.18

)

-53.7

%

Earnings per common share - Diluted

0.15

0.33

$

(0.18

)

-53.5

%

Weighted average shares outstanding - Basic

21,799,263

23,786,612

(1,987,349

)

-8.4

%

Weighted average shares outstanding - Diluted

22,022,336

24,115,702

(2,093,366

)

-8.7

%

First Commerce Bancorp, Inc.
Net Interest Margin Analysis
(Unaudited)

Three Months Ended September 30, 2024

Three Months Ended September 30, 2023

Average

Average

Average

Average

(dollars in thousands)

Balance

Interest

Yield/Cost

Balance

Interest

Yield/Cost

Assets:

Interest-earning assets:

Interest-bearing deposits in other banks

$

67,531

$

834

4.91

%

$

54,790

$

677

4.90

%

Investment securities:

Available -for-sale

7,900

59

2.99

%

11,100

85

3.06

%

Held-to-maturity

74,027

765

4.13

%

62,106

445

2.87

%

Total investment securities

81,927

824

4.02

%

73,206

530

2.90

%

Restricted stock

8,971

198

8.85

%

6,185

154

9.95

%

Loans receivable:

Consumer loans

535

2

1.58

%

326

2

2.92

%

Home equity loans

3,018

61

8.00

%

3,338

60

7.14

%

Construction loans

111,480

2,453

8.61

%

122,440

2,750

8.79

%

Commercial loans

41,023

855

8.16

%

35,227

703

7.81

%

Commercial mortgage loans

1,062,409

14,296

5.27

%

1,040,373

13,087

4.92

%

Residential mortgage loans

14,115

171

4.81

%

15,363

186

4.81

%

SBA loans

25,134

456

7.10

%

28,738

561

7.63

%

Total loans receivable

1,257,714

18,294

5.79

%

1,245,804

17,349

5.52

%

Total interest-earning assets

1,416,143

20,150

5.66

%

1,379,985

18,710

5.38

%

Non-interest-earning assets:

Allowance for credit losses

(14,905

)

(18,786

)

Cash and due from bank

2,010

1,759

Other assets

60,880

60,667

Total non-interest-earning assets

47,985

43,640

Total assets

$

1,464,128

$

1,423,624

Liabilities and shareholders' equity:

Interest-bearing liabilities:

Interest-bearing checking accounts

$

58,652

$

281

1.91

%

$

51,250

$

162

1.25

%

NOW accounts

45,104

395

3.49

%

23,195

45

0.77

%

Money market accounts

231,605

2,170

3.73

%

178,827

1,259

2.79

%

Savings accounts

24,729

32

0.51

%

37,457

34

0.36

%

Certificates of deposit

476,006

5,387

4.50

%

574,329

5,391

3.72

%

Brokered CDs

118,039

1,455

4.91

%

67,960

978

5.71

%

Borrowings

166,625

2,065

4.93

%

108,128

1,348

4.95

%

Total interest-bearing liabilities

1,120,760

$

11,785

4.18

%

1,041,145

$

9,217

3.51

%

Non-interest-bearing liabilities:

Demand deposits

143,936

179,651

Other liabilities

24,262

17,071

Total non-interest bearing liabilities

168,198

196,722

Shareholders' equity

175,170

185,757

Total liabilities and shareholders' equity

$

1,464,128

$

1,423,624

Net interest spread

1.48

%

1.87

%

Net interest margin

$

8,365

2.35

%

$

9,493

2.73

%

First Commerce Bancorp, Inc.
Net Interest Margin Analysis
(Unaudited)

Nine Months Ended September 30, 2024

Nine Months Ended September 30, 2023

Average

Average

Average

Average

(dollars in thousands)

Balance

Interest

Yield/Cost

Balance

Interest

Yield/Cost

Assets:

Interest-earning assets:

Interest-bearing deposits

$

65,736

$

2,433

4.94

%

$

49,191

$

1,655

4.50

%

Investment securities:

Available -for-sale

8,488

191

3.00

%

12,293

279

3.03

%

Held-to-maturity

67,674

1,907

3.76

%

63,489

1,337

2.81

%

Total investment securities

76,162

2,098

3.67

%

75,782

1,616

2.84

%

Restricted stock

8,410

538

8.54

%

5,924

295

6.64

%

Loans:

Consumer loans

459

7

1.90

%

294

7

3.33

%

Home equity loans

2,977

180

8.08

%

3,611

185

6.83

%

Construction loans

112,462

7,405

8.65

%

112,118

7,379

8.68

%

Commercial loans

37,360

2,237

7.87

%

38,047

2,197

7.61

%

Commercial mortgage loans

1,059,528

42,126

5.22

%

1,006,038

37,603

4.93

%

Residential mortgage loans

14,534

524

4.81

%

15,513

557

4.80

%

SBA loans

26,435

1,446

7.18

%

28,455

1,622

7.52

%

Loans Held for Sale

-

-

N/A

8

-

N/A

Total loans

1,253,755

53,925

5.75

%

1,204,084

49,550

5.50

%

Total interest-earning assets

1,404,063

58,994

5.61

%

1,334,981

53,116

5.32

%

Non-interest-earning assets:

Allowance for credit losses

(14,615

)

(18,389

)

Cash and due from bank

1,959

1,733

Other assets

60,283

61,106

Total non-interest-earning assets

47,627

44,450

Total assets

$

1,451,689

$

1,379,431

Liabilities and shareholders' equity:

Interest-bearing liabilities:

Interest-bearing checking accounts

$

53,617

$

703

1.75

%

$

48,583

$

345

0.95

%

NOW accounts

42,121

1,095

3.47

%

27,046

110

0.54

%

Money market accounts

223,467

5,960

3.56

%

178,937

3,158

2.36

%

Savings accounts

27,011

87

0.43

%

45,771

118

0.34

%

Certificates of deposit

492,532

16,314

4.42

%

554,874

13,817

3.33

%

Brokered CDs

112,782

4,152

4.92

%

25,795

1,103

5.72

%

Borrowings

155,341

5,736

4.93

%

104,478

3,854

4.93

%

Total interest-bearing liabilities

1,106,870

$

34,047

4.11

%

985,485

$

22,505

3.05

%

Non-interest-bearing liabilities:

Demand deposits

143,100

193,105

Other liabilities

23,190

16,595

Total non-interest bearing liabilities

166,289

209,700

Shareholders' equity

178,530

184,247

Total liabilities and shareholders' equity

$

1,451,689

$

1,379,431

Net interest spread

1.50

%

2.27

%

Net interest margin

$

24,947

2.37

%

$

30,611

3.07

%

First Commerce Bancorp, Inc.
Selected Financial Data
(Unaudited)

As of and for the quarters ended

(In thousands, except share data)

9/30/2024

6/30/2024

3/31/2024

12/31/2023

9/30/2023

Summary earnings:

Interest income

$

20,150

$

19,793

$

19,051

$

18,963

$

18,710

Interest expense

11,785

11,451

10,811

10,183

9,217

Net interest income

8,364

8,342

8,240

8,780

9,493

Provision (benefit) for credit losses

54

300

7

(5,698

)

600

Net interest income after provision (benefit) for credit losses

8,310

8,042

8,233

14,478

8,893

Non-interest income

582

562

522

506

378

Non-interest expense

7,524

7,230

7,217

7,005

7,038

Income before income tax expense

1,368

1,375

1,538

7,979

2,233

Income tax expense

240

287

381

2,146

536

Net income

$

1,128

$

1,087

$

1,156

$

5,833

$

1,697

Per share data:

Earnings per share - basic

$

0.05

$

0.05

$

0.05

$

0.25

$

0.07

Earnings per share - diluted

0.05

0.05

0.05

0.25

0.07

Cash dividends declared

-

-

0.04

0.04

0.04

Book value at period end

8.31

8.19

8.13

8.06

7.80

Shares outstanding at period end

20,780

21,489

22,146

22,831

23,777

Basic weighted average shares outstanding

21,164

21,641

22,600

22,969

23,787

Fully diluted weighted average shares outstanding

21,387

21,898

22,930

23,272

24,116

Balance sheet data (at period end):

Total assets

$

1,476,252

$

1,467,517

$

1,452,419

$

1,436,099

$

1,428,973

Investment securities, available-for-sale

7,748

8,337

8,758

9,537

10,703

Investment securities, held-to-maturity

73,977

74,109

61,483

59,525

61,234

Total loans

1,262,481

1,260,236

1,244,357

1,251,227

1,263,918

Allowance for credit losses

(14,869

)

(14,922

)

(14,628

)

(14,470

)

(19,562

)

Total deposits

1,097,165

1,107,159

1,105,161

1,097,798

1,112,406

Shareholders' equity

172,642

175,933

179,963

183,996

185,486

Common cash dividends

-

-

904

952

952

Selected performance ratios:

Return on average total assets

0.31

%

0.30

%

0.32

%

1.62

%

0.47

%

Return on average shareholders' equity

2.56

%

2.47

%

2.54

%

12.80

%

3.63

%

Dividend payout ratio

N/A

N/A

78.21

%

16.32

%

56.09

%

Net interest margin

2.35

%

2.38

%

2.39

%

2.51

%

2.73

%

Efficiency ratio

84.10

%

81.19

%

82.37

%

75.43

%

71.30

%

Non-interest income to average assets

0.16

%

0.16

%

0.15

%

0.14

%

0.11

%

Non-interest expenses to average assets

2.04

%

1.99

%

2.03

%

1.94

%

1.96

%

Asset quality ratios:

Non-performing loans to total loans

1.15

%

1.21

%

1.53

%

1.47

%

1.24

%

Non-performing assets to total assets

0.98

%

1.04

%

1.31

%

1.28

%

1.10

%

Allowance for credit losses to non-performing loans

102.67

%

97.76

%

76.77

%

78.82

%

124.32

%

Allowance for credit losses to total loans

1.18

%

1.18

%

1.18

%

1.16

%

1.55

%

Net recoveries (charge-offs) to average loans

-0.03

%

0.01

%

0.01

%

-0.03

%

0.02

%

Liquidity and capital ratios:

Net loans to deposits

113.71

%

112.48

%

111.27

%

111.66

%

110.92

%

Average loans to average deposits

114.54

%

113.30

%

115.79

%

112.57

%

111.97

%

Total shareholders' equity to total assets

11.69

%

11.99

%

12.39

%

12.81

%

12.98

%

Total capital to risk-weighted assets

14.30

%

14.67

%

15.33

%

15.71

%

15.58

%

Tier 1 capital to risk-weighted assets

13.13

%

13.48

%

15.15

%

14.52

%

14.32

%

Common equity tier 1 capital ratio to risk-weighted assets

13.13

%

13.48

%

15.15

%

14.52

%

14.32

%

Tier 1 leverage ratio

11.80

%

12.08

%

12.58

%

12.88

%

13.05

%

SOURCE: First Commerce Bancorp, Inc.



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