EXTON, Pa., Jan. 28, 2015 /PRNewswire/ -- First Resource Bank (OTCQX: FRSB) announced fourth quarter and full year financial results through December 31, 2014. Net income for the year ended December 31, 2014 was $1,105,693, growth of 5% over the prior year. The loan portfolio grew 12% in the year ended December 31, 2014 to a record high of $157.3 million. Total assets grew 9% in 2014 to end the year at $180.5 million. Net interest income grew 12% for the year ended December 31, 2014 as compared to the prior year.
Net income for the three months ended December 31, 2014 was $256,007 as compared to $253,327 for the quarter ended September 30, 2014 and net income of $291,181 for the quarter ended December 31, 2013. After accounting for preferred stock dividends, net income available to common shareholders for the quarter ended December 31, 2014 was $243,299. This compares to net income available to common shareholders of $240,620 for the quarter ended September 30, 2014 and $278,472 for the quarter ended December 31, 2013.
Glenn B. Marshall, President & CEO, stated, "2014 was a great year for First Resource Bank. We relocated the Exton branch to a superior facility, started construction on the West Chester branch, relocated all corporate and operational employees into a combined corporate office, added an enhanced trading platform by moving our stock trading to the OTCQX marketplace and rebranded the Bank for future growth. We accomplished all of this while producing record profitability for our shareholders."
Net interest income was $1,648,820 for the quarter ended December 31, 2014 as compared to $1,541,575 for the previous quarter. The net interest margin increased 8 basis points from 3.89% for the quarter ended September 30, 2014 to 3.97% for the quarter ended December 31, 2014. The overall yield on interest earning assets increased 7 basis points during the fourth quarter, to 4.83%, with loan yields up 4 basis points, to 5.00%. The total cost of interest bearing liabilities declined 2 basis points during the fourth quarter, led by a 21 basis point decline in the cost of borrowings, caused by an increase in short term borrowings. The deposit cost of funds was unchanged at 0.98%.
Net interest income for the year ended December 31, 2014 was $6,154,464, an improvement of $645 thousand, or 12% over the prior year. This improvement was attributed to strong loan growth, steady loan yields and low levels of excess cash. The net interest margin for 2014 was 3.90%, which was 16 basis points higher than the prior year. This margin improvement is mainly attributed to lower cash and short term investments as well as a 9 basis point decline in the cost of deposits, offset by a 4 basis point decline in the yield on loans.
Deposits increased $618 thousand, or 0.4%, from $142.7 million at September 30, 2014 to $143.3 million at December 31, 2014. During the fourth quarter, certificates of deposit increased $3.0 million, or 4%, from $75.2 million at September 30, 2014 to $78.2 million at December 31, 2014. Money market deposits decreased $2.1 million, or 4%, from $53.5 million at September 30, 2014 to $51.4 million at December 31, 2014. Non-interest bearing deposits decreased $2.1 million, or 18% from $11.5 million at September 30, 2014 to $9.4 million at December 31, 2014. Interest-bearing checking balances increased $1.8 million, or 69% from $2.6 million at September 30, 2014 to $4.3 million at December 31, 2014. During the year ended December 31, 2014, total deposits increased $3.5 million, or 3%, primarily due to an improvement in non-interest bearing deposits and certificates of deposit.
The loan portfolio increased $7.1 million, or 5%, during the fourth quarter from $150.2 million at September 30, 2014 to $157.3 million at December 31, 2014. Approximately half of that growth was in the commercial real estate portfolio, however each section of the loan portfolio grew during the quarter. During the year ended December 31, 2014 the loan portfolio grew $17.3 million, or 12%. Almost half of this growth was in the commercial real estate portfolio which grew $9.9 million, or 11% in 2014.
The following table illustrates the composition of the loan portfolio:
Dec. 31, Dec. 31,
2014 2013
---- ----
Commercial real estate $102,290,962 $92,435,418
Commercial construction 12,235,078 8,119,740
Commercial business 17,483,708 14,199,765
Consumer 25,316,420 25,243,538
---------- ----------
Total loans $157,326,168 $139,998,461
============ ============
The allowance for loan losses to total loans was 0.84% at December 31, 2014 as compared to 0.87% at September 30, 2014, 0.96% at June 30, 2014 and March 31, 2014, and 0.89% at December 31, 2013. Non-performing assets, which include non-performing loans of $2.6 million and other real estate owned of $256 thousand, totaled $2.9 million at December 31, 2014. Non-performing assets to total assets decreased from 1.76% at September 30, 2014 to 1.57% at December 31, 2014 due to a decrease in nonperforming loans and other real estate owned as well as an increase in total assets.
Non-interest income for the quarter ended December 31, 2014 was $218,705, as compared to $115,344 for the previous quarter and $99,077 for the fourth quarter of the prior year. During the fourth quarter of 2014, the Bank sold its first SBA guaranteed loan for a gain of $104 thousand. In addition, the Bank recognized $50 thousand of gains on the sale of securities in the fourth quarter.
Non-interest income for the year ended December 31, 2014 was $528,962, as compared to $367,016 for the prior year, an improvement of 44%. This increase is attributed to the gain on sale of an SBA loan and gains on sales of securities during the fourth quarter.
Non-interest expense increased $20 thousand, or 2%, in the three months ended December 31, 2014 as compared to the prior quarter. This increase was due to higher occupancy expenses, and higher other expenses, offset by a decrease in professional fees and advertising expenses.
Non-interest expense increased $597 thousand, or 15%, in the year ended December 31, 2014 as compared to the same period in the prior year. This increase was due to higher salaries and benefits expenses, occupancy expense, professional fees, advertising expenses and other expenses, offset by lower other real estate expenses.
Selected Financial Data:
Balance Sheets (unaudited)
December 31, December 31,
2013
2014
----
Cash and due from banks $817,026 $606,230
Investments 11,711,637 16,317,779
Loans 157,326,168 139,998,461
Allowance for loan losses (1,317,363) (1,252,853)
Premises & equipment 5,517,252 3,515,038
Other assets 6,472,819 6,458,705
--------- ---------
Total assets $180,527,539 $165,643,360
============ ============
Non-interest bearing deposits $9,355,013 $6,429,207
Interest-bearing checking 4,349,552 3,809,040
Money market 51,400,506 53,960,919
Time deposits 78,243,292 75,672,226
---------- ----------
Total deposits 143,348,363 139,871,392
----------- -----------
Short term borrowings 12,000,000 2,555,000
Long term borrowings 6,499,000 5,599,000
Other liabilities 654,739 610,372
------- -------
Total liabilities 162,502,102 148,635,764
----------- -----------
Preferred stock 5,083,000 5,083,000
Common stock 1,612,283 1,608,595
Surplus 9,523,083 9,505,069
Accumulated other
comprehensive income 91,577 102,015
Retained earnings 1,715,494 708,917
--------- -------
Total stockholders' equity 18,025,437 17,007,596
---------- ----------
Total Liabilities & $180,527,539 $165,643,360
Stockholders' Equity
Performance Statistics (unaudited)
Qtr Ended Qtr Ended Qtr Ended Qtr Ended Qtr Ended
Dec. 31, Sept. 30, June 30, Mar. 31, Dec. 31,
2014 2014 2014 2014 2013
---- ---- ---- ---- ----
Net interest margin 3.97% 3.89% 3.93% 3.81% 3.65%
Nonperforming loans/
total loans 1.64% 1.77% 1.21% 1.24% 1.31%
Nonperforming assets/ 1.57% 1.76% 1.31% 1.44% 1.51%
Total assets
Allowance for loan
losses/ 0.84% 0.87% 0.96% 0.96% 0.89%
Total loans
Average loans/Average
assets 88.1% 87.4% 86.8% 85.2% 83.5%
Non-interest
expenses*/ 2.71% 2.79% 2.81% 2.54% 2.53%
Average assets
Earnings per share -
basic and $0.15 $0.15 $0.18 $0.18 $0.17
diluted
* Annualized
Income Statements (unaudited)
Qtr. Ended Qtr. Ended Qtr. Ended Qtr. Ended Qtr. Ended
Dec. 31, Sept. 30, June 30, Mar. 31, Dec. 31,
2014 2014 2014 2014 2013
---- ---- ---- ---- ----
INTEREST INCOME
Loans, including
fees $1,940,824 $1,825,644 $1,784,064 $1,743,733 $1,727,215
Securities 63,004 58,636 59,811 60,488 57,162
Other 60 46 910 1,904 5,729
--- --- --- ----- -----
Total interest
income 2,003,888 1,884,326 1,844,785 1,806,125 1,790,106
--------- --------- --------- --------- ---------
INTEREST EXPENSE
Borrowings 25,173 21,576 17,893 17,478 17,947
Checking 720 672 712 660 851
Money Market 96,203 99,246 100,541 99,206 97,839
Time deposits 232,972 221,257 220,220 230,131 247,462
------- ------- ------- ------- -------
Total interest
expense 355,068 342,751 339,366 347,475 364,099
------- ------- ------- ------- -------
Net interest
income 1,648,820 1,541,575 1,505,419 1,458,650 1,426,007
--------- --------- --------- --------- ---------
Provision for
loan losses 296,205 116,176 27,270 97,250 57,640
------- ------- ------ ------ ------
Net interest
income after
provision for
loan losses 1,352,615 1,425,399 1,478,149 1,361,400 1,368,367
NON-INTEREST
INCOME 218,705 115,344 98,946 95,967 99,077
NON-INTEREST
EXPENSE
Salaries &
benefits 565,894 572,973 562,031 527,231 500,167
Occupancy &
equipment 196,056 157,885 139,784 113,157 96,881
Data processing 76,368 69,316 68,379 66,469 64,230
Professional fees 60,069 76,624 93,708 88,923 93,486
Advertising 29,792 51,268 33,200 17,537 22,794
Other real estate 42,789 35,000 59,689 42,730 69,025
Other 222,717 210,872 183,345 169,786 192,127
------- ------- ------- ------- -------
Total non-
interest 1,193,685 1,173,938 1,140,136 1,025,833 1,038,710
Expense
Income before
income tax
expense 377,635 366,805 436,959 431,534 428,734
Federal Income
Tax expense 121,628 113,478 136,349 135,785 137,553
------- ------- ------- ------- -------
Net income $256,007 $253,327 $300,610 $295,749 $291,181
======== ======== ======== ======== ========
Preferred stock
dividends (12,708) (12,707) (12,707) (12,708) (12,709)
------- ------- ------- ------- -------
Net income
available to
common
shareholders $243,299 $240,620 $287,903 $283,041 $278,472
======== ======== ======== ======== ========
Income Statements (unaudited)
Twelve Months Twelve Months
Ended Ended
December 31, December 31,
2014 2013
---- ----
INTEREST INCOME
Loans, including fees $7,294,265 $6,723,468
Securities 241,939 197,089
Other 2,920 12,142
----- ------
Total interest income 7,539,124 6,932,699
--------- ---------
INTEREST EXPENSE
Borrowings 82,120 52,513
Checking 2,764 2,955
Money Market 395,196 356,505
Time deposits 904,580 1,011,020
------- ---------
Total interest expense 1,384,660 1,422,993
--------- ---------
Net interest income 6,154,464 5,509,706
--------- ---------
Provision for loan losses 536,901 395,493
------- -------
Net interest income after
provision for loan
losses 5,617,563 5,114,213
NON-INTEREST INCOME 528,962 367,016
NON-INTEREST EXPENSE
Salaries & benefits 2,228,129 1,938,876
Occupancy & equipment 606,882 378,400
Data processing 280,532 253,775
Professional fees 319,324 298,433
Advertising 131,797 104,108
Other real estate 180,208 219,614
Other 786,720 743,215
------- -------
Total non-interest
expense 4,533,592 3,936,421
--------- ---------
Income before income tax
expense 1,612,933 1,544,808
Federal Income Tax
expense 507,240 489,150
------- -------
Net income $1,105,693 $1,055,658
========== ==========
Preferred stock dividends (50,830) (50,830)
------- -------
Net income available to
common shareholders $1,054,863 $1,004,828
========== ==========
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.
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SOURCE First Resource Bank
