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First Resource Bank Announces Record Annual Results

EXTON, Pa., Jan. 29, 2014 /PRNewswire/ -- First Resource Bank (OTC Bulletin Board: FRSB) announced net income grew 15% in 2013, to $1,055,658 for the year ended December 31, 2013 as compared to $917,557 for the prior year.  After accounting for preferred stock dividends, net income available to common shareholders grew 34% in 2013, to $1,004,828 for the year ended December 31, 2013, as compared to $750,187 for the prior year. Preferred stock dividends declined $116,540, or 70% when comparing 2013 to 2012.

Glenn B. Marshall, President & CEO, stated, "2013 was the most profitable year in the Bank's history and the year we achieved the milestone of positive retained earnings. These record results have increased shareholder's equity and strengthened the Bank's foundation as we take on our retail expansion in 2014 with our entry into the West Chester market. We are looking forward to an exciting year that will virtually transform the entire look and feel of First Resource Bank."

Net income for the three months ended December 31, 2013 was $291,181 as compared to $263,366 for the quarter ended September 30, 2013 and net income of $234,255 for the quarter ended December 31, 2012. After accounting for preferred stock dividends, net income available to common shareholders for the quarter ended December 31, 2013 was $278,472. This compares to net income available to common shareholders of $250,659 for the quarter ended September 30, 2013 and $221,458 for the quarter ended December 31, 2012.

Net interest income was $1,426,007 for the quarter ended December 31, 2013 as compared to $1,392,110 for the previous quarter.  The net interest margin declined 1 basis point from 3.66% for the quarter ended September 30, 2013 to 3.65% for the quarter ended December 31, 2013. The overall yield on interest earning assets decreased 4 basis points during the fourth quarter, with loan yields down 1 basis point. The cost of interest bearing liabilities declined 3 basis points during the fourth quarter, led by a 2 basis point decline in the cost of money market deposits. 

Net interest income for the year ended December 31, 2013 was $5,509,706, as compared to $5,326,357 in the prior year, an increase of $183 thousand or 3.4%.  The net interest margin for 2013 was 3.74%, which was 11 basis points lower than the prior year net interest margin of 3.85%. This margin compression was driven by a 26 basis point decline in loan yields, offset by an 18 basis point decline in deposit costs.

Deposits increased $1.5 million, or 1.1% from $138.4 million at September 30, 2013 to $139.9 million at December 31, 2013. During the fourth quarter, certificates of deposit decreased $2.1 million, or 2.7%, from $77.8 million at September 30, 2013 to $75.7 million at December 31, 2013. Money market deposits increased $3.6 million, or 7.2%, from $50.4 million at September 30, 2013 to $54.0 million at December 31, 2013. Non-interest bearing deposits decreased $856 thousand, or 11.7% from $7.3 million at September 30, 2013 to $6.4 million at December 31, 2013. Interest checking balances increased $826 thousand, or 27.7% from $3.0 million at September 30, 2013 to $3.8 million at December 31, 2013.

Total deposits grew $8.8 million, or 6.7% in 2013, from $131.1 million at December 31, 2012 to $139.9 million at December 31, 2013. Money market deposits increased $10.6 million, or 24.4% in 2013 due to strong deposit growth efforts across the organization. Non-interest bearing deposits grew $1.2 million, or 22.8% during 2013. Interest checking balances were down in 2013 due to temporary growth in one existing large deposit account at the 2012 year end. Absent that account fluctuation, interest checking balances increased $767 thousand, or 25.2% in 2013.

The loan portfolio grew $5.6 million, or 4.2%, during the fourth quarter from $134.4 million at September 30, 2013 to $140.0 million at December 31, 2013. The vast majority of this growth was in the commercial real estate portfolio.

During 2013 the loan portfolio grew $11.3 million, or 8.8%. Virtually all of this growth was in the commercial real estate portfolio, offset by small declines in the commercial business and construction loan portfolios.

The following table illustrates the composition of the loan portfolio:




Dec. 31,

2013

Dec. 31,

2012






Commercial real estate

$ 92,435,418

$ 80,500,799


Commercial construction

8,119,740

8,863,677


Commercial business

14,199,765

14,874,480


Consumer

25,243,538

24,433,976






Total loans

$139,998,461

$128,672,932




The allowance for loan losses to total loans was 0.89% at December 31, 2013 as compared to 0.93% at September 30, 2013 and 1.12% at December 31, 2012. Non-performing assets, which include non-performing loans of $2.1 million and other real estate owned of $663 thousand, totaled $2.7 million at December 31, 2013. Non-performing assets to total assets decreased from 2.25% at September 30, 2013 to 1.51% at December 31, 2013 due to a decline in non-accrual loans as well as an increase in total assets.  Non-performing assets to total assets decreased from 2.45% at December 31, 2012 to 1.51% at December 31, 2013.

Non-interest income for the quarter ended December 31, 2013 was $99,077, as compared to $86,876 for the previous quarter.

Non-interest income for the year ended December 31, 2013 was $367,016, as compared to $279,360 for the prior year.  This increase was due to the addition of rental income on a building acquired in August 2012 to house the future branch location in West Chester.  A full 12 months of rent was received in 2013 but only 4 months in 2012.

Non-interest expense increased $32 thousand, or 3.2%, in the three months ended December 31, 2013 as compared to the three months ended September 30, 2013. This increase was due to higher professional fees and higher salaries and benefits expenses, offset by lower advertising expenses.

Non-interest expense increased $375 thousand, or 10.5%, for the year ended December 31, 2013 as compared to the year ended December 31, 2012. This increase was mainly due to higher salaries and benefits associated with a higher headcount, higher depreciation due to the purchase of two buildings over the past 18 months, higher data processing fees and higher advertising expenses offset by lower other real estate owned expenses.

Selected Financial Data:



Balance Sheets (unaudited)





December 31,

2013

December 31,

2012






Cash and due from banks

$     606,230

$   5,633,237


Investments

16,317,779

10,688,356


Loans

139,998,461

128,672,932


Allowance for loan losses

(1,252,853)

(1,439,935)


Premises & equipment

3,515,038

2,671,344


Other assets

6,458,705

4,825,042






Total assets

$ 165,643,360

$ 151,050,976






Non-interest bearing deposits

$   6,429,207

$   5,236,362


Interest-bearing checking

3,809,040

6,921,675


Money market

53,960,919

43,363,298


Time deposits

75,672,226

75,567,700


  Total deposits

139,871,392

131,089,035


Short term borrowings

2,555,000

-


Long term borrowings

5,599,000

3,420,000


Other liabilities

610,372

481,168






Total liabilities

148,635,764

134,990,203






Preferred stock

5,083,000

5,083,000


Common stock

1,608,595

1,528,243


Surplus

9,505,069

9,565,547


Accumulated other

  comprehensive income

 

102,015

 

179,324


Retained earnings/

  (accumulated deficit)

 

708,917

 

(295,341)


Total stockholders' equity

17,007,596

16,060,773






Total Liabilities &

     Stockholders' Equity

$ 165,643,360

$ 151,050,976


 

Performance Statistics (unaudited)

Qtr Ended

Dec. 31,

2013

Qtr Ended

Sept. 30,

2013

Qtr Ended

June 30,

2013

Qtr Ended

Mar. 31,

2013

Qtr Ended

Dec. 31,

2012







Net interest margin

3.65%

3.66%

3.87%

3.78%

3.85%

Nonperforming loans/total loans

1.31%

2.11%

2.19%

2.34%

2.34%

Nonperforming assets/

   Total assets

1.51%

2.25%

2.55%

2.59%

2.45%

Allowance for loan losses/

   Total loans

0.89%

0.93%

1.04%

1.02%

1.12%

Average loans/Average assets

83.5%

84.4%

88.5%

86.7%

87.2%

Non-interest expenses*/

   Average assets

2.53%

2.52%

2.57%

2.55%

2.47%

Earnings per share – basic and

   Diluted

$0.17

$0.16

$0.16

$0.15

$0.14







* Annualized






 

Income Statements (unaudited)



Qtr Ended
Dec. 31,

2013

Qtr Ended
Sept. 30,

2013

Qtr Ended
June 30,

2013

Qtr Ended
Mar. 31,

2013

Qtr Ended
Dec. 31,

2012







INTEREST INCOME






Loans

$1,727,215

$1,701,342

$1,677,372

$1,617,539

$1,671,869

Investments

57,162

48,632

41,480

49,815

53,718

Other

5,729

4,436

464

1,513

88

 Total interest income

1,790,106

1,754,410

1,719,316

1,668,867

1,725,675







INTEREST EXPENSE






Borrowings

17,947

14,527

10,450

9,589

10,974

Checking

851

695

637

772

565

Money Market

97,839

92,181

82,420

84,065

82,226

Time deposits

247,462

254,897

254,972

253,689

267,497

 Total interest expense

364,099

362,300

348,479

348,115

361,262







Net interest income

1,426,007

1,392,110

1,370,837

1,320,752

1,364,413







Provision for loan losses

57,640

87,064

119,002

131,787

174,979







Net interest income after provision for loan losses

1,368,367

1,305,046

1,251,835

1,188,965

1,189,434







NON-INTEREST INCOME

99,077

86,876

88,030

93,033

91,209







NON-INTEREST EXPENSE






Salaries & benefits

500,167

486,315

469,194

483,200

438,058

Occupancy & equipment

96,881

96,004

90,158

95,357

88,799

Data processing

64,230

61,136

65,009

63,400

35,430

Professional fees

93,486

63,585

64,576

76,786

50,791

Advertising

22,794

34,268

31,735

15,311

15,978

Other real estate owned expenses

69,025

68,514

62,075

20,000

117,646

Other non-interest

     Expenses

192,127

197,043

174,718

179,327

176,983

Total non-interest

     Expense

1,038,710

1,006,865

957,465

933,381

923,685







Pre-tax income

428,734

385,057

382,400

348,617

356,958







Tax expense

(137,553)

(121,691)

(120,993)

(108,913)

(122,703)







Net income

$  291,181

$  263,366

$  261,407

$  239,704

$  234,255







Preferred stock dividends

 

(12,709)

 

(12,707)

 

(12,707)

 

(12,707)

 

(12,797)







Net income available to common shareholders

 

$  278,472

 

$  250,659

 

$  248,700

 

$  226,997

 

$  221,458

 

Income Statements (unaudited)



Year

Ended
Dec. 31,

2013

Year

Ended

Dec. 31,

2012




INTEREST INCOME



Loans

$6,723,468

$6,623,333

Investments

197,089

230,035

Other

12,142

5,902

 Total interest income

6,932,699

6,859,270




INTEREST EXPENSE



Borrowings

52,513

30,904

Checking

2,955

3,728

Money Market

356,505

372,449

Time deposits

1,101,020

1,125,832

 Total interest expense

1,422,993

1,532,913




Net interest income

5,509,706

5,326,357




Provision for loan losses

395,493

691,050




Net interest income after provision for loan losses

5,114,213

4,635,307




NON-INTEREST INCOME

367,016

279,360




NON-INTEREST EXPENSE



Salaries & benefits

1,938,876

1,748,046

Occupancy & equipment

378,400

332,920

Data processing

253,775

204,276

Professional fees

298,433

291,844

Advertising

104,108

61,270

Other real estate owned

    expenses

219,614

240,855

Other non-interest expense

743,215

681,804

Total non-interest expense

3,936,421

3,561,015




Pre-tax income

1,544,808

1,353,652




Tax expense

(489,150)

(436,095)




Net income

$1,055,658

$  917,557




Preferred stock dividends

(50,830)

(167,370)




Net income available to common shareholders

$1,004,828

$  750,187

 

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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