First Resource Bank Announces 2010 Results
EXTON, Pa., Jan. 27, 2011 /PRNewswire/ -- First Resource Bank (OTC Bulletin Board: FRSB) announced net income of $490,360 for the year ended December 31, 2010 as compared to a net loss of $244,905 for the year ended December 31, 2009, representing a $735,265 improvement year over year. Net income of $108,861 for the quarter ended December 31, 2010 compares to net income of $152,576 for the quarter ended September 30, 2010, and net income of $69,617 for the quarter ended December 31, 2009.
Glenn B. Marshall, President & CEO, stated, "We are pleased to report the most profitable year in the Bank's history. We have worked hard in 2010 to expand our earning asset base, continue our expense controls and reduce our cost of funds without sacrificing duration. While we are still actively working through credit issues and the related costs in our loan portfolio, we absorbed these costs and achieved profits every quarter of 2010."
Net interest income was $1,188,676 for the quarter ended December 31, 2010, as compared to $1,098,100 for the previous quarter. The net interest margin improved 37 basis points, from 3.40% for the three months ended September 30, 2010 to 3.77% for the three months ended December 31, 2010. This net interest margin improvement resulted from lower money market deposit costs and continued deployment of excess cash balances during the fourth quarter.
The allowance for loan losses to total loans was 1.24% at December 31, 2010 as compared to 1.23% at September 30, 2010 and 1.32% at December 31, 2009. Non-performing assets, which include non-performing loans of $2.5 million and other real estate owned of $1.8 million, totaled $4.3 million at December 31, 2010. Non-performing assets to total assets increased from 3.34% at September 30, 2010 to 3.45% at December 31, 2010 due to an increase in other real estate owned. To lower the risk in the overall loan portfolio, the lending team has actively managed both existing and new loans to lower the Bank's exposure. As an example newly underwritten first lien consumer loans have replaced second lien position credits that have rolled off over the past 18 months.
The loan portfolio grew $3.3 million, or 3.0%, during the fourth quarter from $109.6 million at September 30, 2010 to $113.0 million at December 31, 2010. Construction loan exposure continues to decline, with construction loans representing 2.5% of total loans at December 31, 2010 as compared to 8.5% of total loans at December 31, 2009. Year over year, total loans increased $9.2 million, or 8.9%, from $103.7 million at December 31, 2009 to $113.0 million at December 31, 2010.
The following table illustrates the composition of the loan portfolio:
Dec. 31, |
Sept. 30, |
Dec. 31, |
|||
Commercial real estate |
$ 71,538,599 |
$ 67,828,719 |
$ 59,639,428 |
||
Commercial construction |
2,840,605 |
3,757,082 |
8,845,112 |
||
Commercial business |
12,276,455 |
12,633,286 |
12,197,348 |
||
Consumer |
26,331,755 |
25,428,264 |
23,058,326 |
||
Total loans |
$112,987,414 |
$109,647,351 |
$103,740,214 |
||
Deposits increased slightly during the fourth quarter, with total deposits increasing $228 thousand, or 0.2% from $109.2 million at September 30, 2010 to $109.5 million at December 31, 2010. Year over year, total deposits decreased $1.3 million, or 1.2%, from $110.8 million at December 31, 2009 to $109.5 million at December 31, 2010. During 2010, there was a significant shift in the composition of the deposit portfolio from certificates of deposit to money market deposits. Certificates of deposit declined $17.4 million, while money market deposits increased $15.3 million during the twelve months ended December 31, 2010.
During 2009, the Bank participated in the United States Department of the Treasury's Capital Purchase Program. Preferred stock dividends are accrued monthly and all dividend payments have been made in accordance with the terms of the preferred stock issued. Preferred stock dividends and accretion were $72,138 for the fourth quarter resulting in net income available to common shareholders of $36,723. This compares to net income available to common shareholders of $80,439 for the quarter ended September 31, 2010 and $21,314 for the quarter ended December 31, 2009.
Chairman James B. Griffin stated, "The preferred stock issued under the Capital Purchase Plan has allowed the Bank to continue to grow the loan portfolio at a time when the community bank capital markets were inaccessible. We are currently investigating participation in the Small Business Lending Fund to replace the Capital Purchase Plan preferred stock outstanding to possibly lower our preferred stock dividend rates while continuing to lend in our community."
Non-interest income for the quarter ended December 31, 2010 was a $22,428, as compared to $23,332 for the previous quarter.
Non-interest expense increased $237,510, or 34.6% in the three months ended December 31, 2010 as compared to the three months ended September 30, 2010. This increase was primarily due to higher professional fees and higher other real estate owned expenses in the fourth quarter.
Selected Financial Data:
Balance Sheets (unaudited) |
||||
Dec. 31, 2010 |
Dec. 31, 2009 |
|||
Cash and due from banks |
$ 1,968,246 |
$ 11,123,360 |
||
Investments |
9,333,483 |
15,229,190 |
||
Loans |
112,987,414 |
103,740,214 |
||
Allowance for loan losses |
(1,399,993) |
(1,364,884) |
||
Premises & equipment |
127,419 |
192,363 |
||
Other assets |
3,341,266 |
3,116,423 |
||
Total assets |
$ 126,357,835 |
$ 132,036,666 |
||
Non-interest bearing deposits |
$ 4,393,823 |
$ 2,672,825 |
||
Interest-bearing checking |
1,168,134 |
1,143,283 |
||
Money market |
51,075,527 |
35,778,349 |
||
Time deposits |
53,821,057 |
71,188,321 |
||
Total deposits |
109,458,541 |
110,782,778 |
||
Borrowings |
1,928,000 |
5,928,000 |
||
Other liabilities |
395,402 |
1,345,273 |
||
Total liabilities |
111,781,943 |
118,056,051 |
||
Preferred stock |
5,066,833 |
5,040,833 |
||
Common stock |
1,453,094 |
1,343,873 |
||
Surplus |
9,635,586 |
9,468,406 |
||
Accumulated other comprehensive income (loss) |
(31,982) |
(123,048) |
||
Accumulated deficit |
(1,547,639) |
(1,749,449) |
||
Total stockholders' equity |
14,575,892 |
13,980,615 |
||
Total Liabilities & Stockholders' Equity |
$ 126,357,835 |
$ 132,036,666 |
||
Performance Statistics (unaudited) |
Qtr Ended Dec. 31, 2010 |
Qtr Ended Sept. 30, 2010 |
Qtr Ended June 30, 2010 |
Qtr Ended Mar. 31, 2010 |
Qtr Ended Dec. 31, 2009 |
|
Net interest margin |
3.77% |
3.40% |
3.25% |
3.17% |
2.98% |
|
Nonperforming loans/total loans |
2.23% |
3.08% |
2.43% |
1.30% |
1.27% |
|
Nonperforming assets/ Total assets |
3.45% |
3.34% |
2.68% |
1.88% |
1.81% |
|
Allowance for loan losses/ Total loans |
1.24% |
1.23% |
1.24% |
1.32% |
1.32% |
|
Average loans/Average assets |
87.8% |
84.3% |
81.7% |
82.0% |
81.9% |
|
Non interest expenses/ Average assets |
0.61% |
0.54% |
0.62% |
0.52% |
0.55% |
|
Income Statements (unaudited) |
||||||
Qtr Ended 2010 |
Qtr Ended 2010 |
Qtr Ended 2010 |
Qtr Ended 2010 |
Qtr Ended 2009 |
||
INTEREST INCOME |
||||||
Loans |
$1,594,093 |
$1,575,193 |
$1,530,023 |
$1,502,552 |
$1,494,117 |
|
Investments |
28,027 |
39,327 |
99,889 |
111,333 |
108,477 |
|
Federal funds sold |
704 |
822 |
821 |
497 |
506 |
|
Other |
5,047 |
7,069 |
2,891 |
4,661 |
4,315 |
|
Total interest income |
1,627,871 |
1,622,411 |
1,633,624 |
1,619,043 |
1,607,415 |
|
INTEREST EXPENSE |
||||||
Borrowings |
23,060 |
28,818 |
33,407 |
40,050 |
56,815 |
|
Checking |
817 |
865 |
819 |
764 |
808 |
|
Money Market |
145,307 |
204,531 |
223,164 |
178,761 |
133,715 |
|
Time deposits |
270,011 |
290,097 |
334,733 |
405,015 |
496,840 |
|
Total interest expense |
439,195 |
524,311 |
592,123 |
624,590 |
688,178 |
|
Net interest income |
1,188,676 |
1,098,100 |
1,041,501 |
994,453 |
919,237 |
|
Provision for loan losses |
120,888 |
202,576 |
84,766 |
162,466 |
145,353 |
|
NON INTEREST INCOME |
22,428 |
23,332 |
21,190 |
22,433 |
1,202 |
|
NON INTEREST EXPENSE |
||||||
Salaries & benefits |
313,127 |
307,260 |
317,889 |
329,024 |
328,651 |
|
Occupancy & equipment |
75,080 |
74,445 |
76,943 |
87,543 |
88,289 |
|
Data processing |
49,154 |
46,908 |
50,704 |
51,578 |
52,783 |
|
Professional fees |
99,816 |
78,435 |
189,922 |
56,541 |
42,486 |
|
Advertising |
2,903 |
4,825 |
8,194 |
4,903 |
1,558 |
|
Other real estate owned expenses |
237,791 |
14,387 |
1,650 |
3,929 |
6,525 |
|
Other non interest Expenses |
146,188 |
160,288 |
164,072 |
140,495 |
147,792 |
|
Total non interest Expense |
924,059 |
686,548 |
809,374 |
674,013 |
668,084 |
|
Pre-tax income |
166,157 |
232,308 |
168,551 |
180,407 |
107,002 |
|
Tax expense |
(57,296) |
(79,731) |
(58,233) |
(61,803) |
(37,385) |
|
Net income |
$ 108,861 |
$ 152,577 |
$ 110,318 |
$ 118,604 |
$ 69,617 |
|
Preferred stock dividends and accretion |
(72,138) |
(72,138) |
(72,137) |
(72,137) |
(48,303) |
|
Net income available to common shareholders |
$ 36,723 |
$ 80,439 |
$ 38,181 |
$ 46,467 |
$ 21,314 |
|
Income Statements (unaudited) |
|||
Year Ended 2010 |
Year Ended Dec. 31, 2009 |
||
INTEREST INCOME |
|||
Loans |
$6,201,861 |
$5,684,136 |
|
Investments |
278,576 |
335,040 |
|
Federal funds sold |
2,844 |
506 |
|
Other |
19,668 |
12,168 |
|
Total interest income |
6,502,949 |
6,031,850 |
|
INTEREST EXPENSE |
|||
Borrowings |
125,335 |
306,546 |
|
Checking |
3,265 |
3,073 |
|
Money Market |
751,763 |
345,617 |
|
Time deposits |
1,299,856 |
2,288,119 |
|
Total interest expense |
2,180,219 |
2,943,355 |
|
Net interest income |
4,322,730 |
3,088,495 |
|
Provision for loan losses |
570,696 |
586,597 |
|
NON INTEREST INCOME |
89,383 |
62,508 |
|
NON INTEREST EXPENSE |
|||
Salaries & benefits |
1,267,300 |
1,356,810 |
|
Occupancy & equipment |
314,011 |
385,404 |
|
Data processing |
198,344 |
214,522 |
|
Professional fees |
424,714 |
221,920 |
|
Advertising |
20,825 |
23,584 |
|
Other real estate owned Expenses |
257,757 |
115,434 |
|
Other non interest expense |
611,043 |
613,888 |
|
Total non interest expense |
3,093,994 |
2,931,562 |
|
Pre-tax income (loss) |
747,423 |
(367,156) |
|
Tax benefit (expense) |
(257,063) |
122,251 |
|
Net income (loss) |
$ 490,360 |
$ (244,905) |
|
Preferred stock dividends and accretion |
(288,550) |
(160,103) |
|
Net income (loss) attributed to common shareholders |
$ 201,810 |
$ (405,008) |
|
About First Resource Bank
First Resource Bank is a locally owned and operated Pennsylvania state-chartered bank, 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 www.firstresourcebank.com. 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.
SOURCE First Resource Bank
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