EXTON, Pa., Jan. 25, 2016 /PRNewswire/ -- First Resource Bank (OTCQX: FRSB) announced fourth quarter and full year financial results through December 31, 2015. Net income for the year ended December 31, 2015 was $1,185,769, as compared to $1,105,693 for the prior year.
Significant accomplishments for the year ended December 31, 2015 included:
-- Completed a $2.3 million common equity raise and the issuance of $4
million in subordinated debt
-- Redeemed $3.8 million, or 75%, of the Bank's Small Business Lending Fund
preferred stock
-- Opened our second branch location in the largest deposit market in
Chester County
-- Achieved record net income, 7% higher than the prior year
-- Paid the Bank's second cash dividend to date
-- Total interest income grew 10% over the prior year
-- Total assets grew 15% to end the year at $208.1 million
-- Total loans grew 12% to a record high of $176.1 million
Net income for the three months ended December 31, 2015 of $252,344 compares to net income of $303,089 for the three months ended September 30, 2015 and $256,007 for the three months ended December 31, 2014. After accounting for preferred stock dividends, net income available to common shareholders for the three months ended December 31, 2015 was $244,297. This compares to net income available to common shareholders of $290,381 for the three months ended September 30, 2015 and $243,299 for the quarter ended December 31, 2014.
Glenn B. Marshall, President & CEO, stated, "2015 was a year of growth in the balance sheet, physical locations and employee team, while also achieving the sixth consecutive year of record net income. The growth in fee income on the sale of SBA guaranteed loans was a significant contributing factor to the bottom line this year. We are thrilled with the successful completion of our internal capital plan in 2015 and resulting reduction in preferred stock outstanding. The significant balance sheet growth experienced over the past year has established a solid foundation for 2016."
Net interest income was $1,753,210 for the quarter ended December 31, 2015 as compared to $1,679,581 for the previous quarter, an improvement of 4%. The net interest margin increased 2 basis points from 3.66% for the quarter ended September 30, 2015 to 3.68% for the quarter ended December 31, 2015. The overall yield on interest earning assets increased 9 basis points during the fourth quarter, to 4.65%, mainly due to a lower level of low yielding cash and a higher level of loans. The total cost of interest bearing liabilities increased 7 basis points during the fourth quarter, led by an 85 basis point increase in the cost of borrowings, as a result of the issuance of $2 million in subordinated debt on October 15. The deposit cost of funds decreased 1 basis point to 0.96%.
Net interest income for the year ended December 31, 2015 was $6,715,443, an improvement of $561 thousand, or 9% over the prior year. The net interest margin for 2015 was 3.80%, which was 10 basis points lower than the prior year. This margin movement is mainly attributed to higher cash and short term investments as well as higher cost of borrowings as a result of the subordinated debt issuance in 2015.
During the year ended December 31, 2015, total deposits increased $22.6 million, or 16%, with all deposit categories experiencing significant growth.. Deposits increased $592 thousand, or 0.4%, from $165.4 million at September 30, 2015 to $166.0 million at December 31, 2015. During the fourth quarter, money market deposits increased $2.2 million, or 4%, from $58.3 million at September 30, 2015 to $60.5 million at December 31, 2015. Interest-bearing checking balances increased $2.1 million, or 47%, from $4.3 million at September 30, 2015 to $6.4 million at December 31, 2015. Non-interest bearing deposits decreased $1.8 million, or 11%, from $16.0 million at September 30, 2015 to $14.2 million at December 31, 2015. Certificates of deposit decreased $1.8 million, or 2%, from $86.8 million at September 30, 2015 to $84.9 million at December 31, 2015.
During the year ended December 31, 2015, the loan portfolio grew $18.8 million, or 12%. Most of this growth was in the commercial real estate portfolio which grew $13.6 million, or 13% in 2015. The loan portfolio increased $8.9 million, or 5%, during the fourth quarter from $167.2 million at September 30, 2015 to $176.1 million at December 31, 2015. Strong growth in the commercial real estate and construction categories was partially offset by a decline in the commercial portfolio during the fourth quarter.
The following table illustrates the composition of the loan portfolio:
Dec. 31, Dec. 31,
2015 2014
---- ----
Commercial real estate $115,857,098 $102,290,962
Commercial construction 16,703,701 12,235,078
Commercial business 18,620,360 17,483,708
Consumer 24,921,308 25,316,420
---------- ----------
Total loans $176,102,467 $157,326,168
============ ============
The allowance for loan losses to total loans was 0.82% at December 31, 2015 as compared to 0.84% at December 31, 2014. Non-performing assets, which include non-performing loans of $2.3 million and other real estate owned of $117 thousand, totaled $2.4 million at December 31, 2015, a 9% decline as compared to the prior quarter. Non-performing assets to total assets decreased from 1.34% at September 30, 2015 to 1.17% at December 31, 2015 due to a decline in non-performing loans and an increase in total assets.
Non-interest income for the quarter ended December 31, 2015 was $75,825, as compared to $86,925 for the previous quarter and $218,705 for the fourth quarter of the prior year. Fourth quarter 2014 results include $104 thousand in SBA loan sale income, of which there were none during the current quarter or in the prior quarter of this year.
Non-interest income for the year ended December 31, 2015 was $702,904 as compared to $528,962 for the prior year. SBA loan sale income was $285 thousand higher in 2015 than the prior year.
Non-interest expense increased $95 thousand, or 8%, in the three months ended December 31, 2015 as compared to the prior quarter. All expense categories increased quarter over quarter, except for salaries and benefits.
Non-interest expense increased $729 thousand, or 16%, in the year ended December 31, 2015 as compared to the prior year. All expense categories increased year over year, except for other real estate owned expense. Much of the increase is associated with the opening of the West Chester branch in April 2015.
Selected Financial Data:
Balance Sheets (unaudited)
December 31, December 31,
2015 2014
---- ----
Cash and due from banks $1,254,982 $817,026
Investments 19,543,548 11,711,637
Loans 176,102,467 157,326,168
Allowance for loan losses (1,450,836) (1,317,363)
Premises & equipment 6,223,326 5,517,252
Other assets 6,378,550 6,472,819
--------- ---------
Total assets $208,052,037 $180,527,539
============ ============
Non-interest bearing deposits $14,200,995 $9,355,013
Interest-bearing checking 6,392,765 4,349,552
Money market 60,453,093 51,400,506
Time deposits 84,936,708 78,243,292
---------- ----------
Total deposits 165,983,561 143,348,363
----------- -----------
Short term borrowings 10,177,000 12,000,000
Long term borrowings 9,409,500 6,499,000
Subordinated debt 3,960,615 -
Other liabilities 966,129 654,739
------- -------
Total liabilities 190,496,805 162,502,102
----------- -----------
Preferred stock 1,271,000 5,083,000
Common stock 1,977,328 1,612,283
Surplus 11,484,125 9,523,083
Accumulated other
comprehensive income 32,207 91,577
Retained earnings 2,790,572 1,715,494
--------- ---------
Total stockholders' equity 17,555,232 18,025,437
---------- ----------
Total Liabilities & $208,052,037 $180,527,539
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,
2015 2015 2015 2015 2014
---- ---- ---- ---- ----
Net interest margin 3.68% 3.66% 3.89% 4.01% 3.97%
Nonperforming loans/
total loans 1.31% 1.53% 1.66% 1.95% 1.64%
Nonperforming
assets/ 1.17% 1.34% 1.56% 1.86% 1.57%
Total assets
Allowance for loan
losses/ 0.82% 0.83% 0.83% 0.84% 0.84%
Total loans
Average loans/
Average assets 85.1% 83.4% 88.5% 89.5% 88.1%
Non-interest
expenses*/ 2.69% 2.57% 3.07% 2.89% 2.71%
Average assets
Earnings per share -
basic and $0.12 $0.15 $0.19 $0.18 $0.15
diluted
Book value per share $8.24 $8.13 $8.34 $8.16 $8.03
Total shares
outstanding 1,977,328 1,975,520 1,613,592 1,613,009 1,612,283
* Annualized
Income Statements (unaudited)
Qtr. Ended Qtr. Ended Qtr. Ended Qtr. Ended Qtr. Ended
Dec. 31, Sept. 30, June 30, Mar. 31, Dec. 31,
2015 2015 2015 2015 2014
---- ---- ---- ---- ----
INTEREST INCOME
Loans, including fees $2,149,344 $2,045,914 $1,999,455 $1,923,274 $1,940,824
Securities 60,049 42,312 37,383 57,947 63,004
Other 5,571 6,983 1,198 63 60
----- ----- ----- --- ---
Total interest income 2,214,964 2,095,209 2,038,036 1,981,284 2,003,888
--------- --------- --------- --------- ---------
INTEREST EXPENSE
Deposits 365,375 358,649 346,228 332,872 329,895
Borrowings 33,950 34,170 34,729 22,839 25,173
Subordinated debt 62,429 22,809 - - -
------ ------ --- --- ---
Total interest expense 461,754 415,628 380,957 355,711 355,068
------- ------- ------- ------- -------
Net interest income 1,753,210 1,679,581 1,657,079 1,625,573 1,648,820
--------- --------- --------- --------- ---------
Provision for loan losses 110,446 62,090 92,217 17,622 296,205
------- ------ ------ ------ -------
Net interest income after provision for loan losses 1,642,764 1,617,491 1,564,862 1,607,951 1,352,615
NON-INTEREST INCOME
BOLI income 29,890 30,000 30,098 30,072 30,740
Gain on sale of SBA loans - - 389,160 - 103,661
Gain on sale of securities - - - 15,641 50,286
Other 45,935 56,925 44,606 30,577 34,018
------ ------ ------ ------ ------
Total non-interest income 75,825 86,925 463,864 76,290 218,705
NON-INTEREST EXPENSE
Salaries & benefits 704,372 704,651 688,885 673,716 565,894
Occupancy & equipment 186,665 179,855 190,100 151,801 196,056
Professional fees 83,234 64,368 89,414 82,427 60,069
Advertising 39,203 31,117 63,304 23,176 29,792
Data processing 83,772 78,694 82,476 74,957 76,368
Other real estate 9,960 (18,034) 44,113 25,361 42,789
Other 249,741 220,843 237,545 217,013 222,717
------- ------- ------- ------- -------
Total non-interest 1,356,947 1,261,494 1,395,837 1,248,451 1,193,685
expense
Income before income tax expense 361,642 442,922 632,889 435,790 377,635
Federal Income Tax expense 109,298 139,833 303,589 134,754 121,628
------- ------- ------- ------- -------
Net income $252,344 $303,089 $329,300 $301,036 $256,007
======== ======== ======== ======== ========
Preferred stock dividends (8,047) (12,708) (12,708) (12,708) (12,708)
------ ------- ------- ------- -------
Net income available to common shareholders $244,297 $290,381 $316,592 $288,328 $243,299
======== ======== ======== ======== ========
Income Statements
(unaudited)
Twelve Months Twelve Months
Ended Ended
December 31, December 31,
2015 2014
---- ----
INTEREST INCOME
Loans $8,117,987 $7,294,265
Investments 197,691 241,939
Other 13,815 2,920
------ -----
Total interest income 8,329,493 7,539,124
--------- ---------
INTEREST EXPENSE
Deposits 1,403,124 1,302,540
Borrowings 125,688 82,120
Subordinated debt 85,238 -
------ ---
Total interest expense 1,614,050 1,384,660
--------- ---------
Net interest income 6,715,443 6,154,464
--------- ---------
Provision for loan losses 282,375 536,901
------- -------
Net interest income after
provision for loan
losses 6,433,068 5,617,563
NON-INTEREST INCOME
BOLI income 120,060 123,999
Gain on sale of SBA loans 389,160 103,661
Gain on sale of
securities 15,641 50,286
Other 178,043 251,016
------- -------
Total non-interest
income 702,904 528,962
NON-INTEREST EXPENSE
Salaries & benefits 2,771,624 2,228,129
Occupancy & equipment 708,421 606,882
Professional fees 319,443 319,324
Advertising 156,800 131,797
Data processing 319,899 280,532
Other real estate owned
expenses 61,400 180,208
Other non-interest
expense 925,142 786,720
------- -------
Total non-interest
expense 5,262,729 4,533,592
--------- ---------
Pre-tax income 1,873,243 1,612,933
Tax expense 687,474 507,240
------- -------
Net income $1,185,769 $1,105,693
========== ==========
Preferred stock dividends (46,171) (50,830)
------- -------
Net income available to
common shareholders $1,139,598 $1,054,863
========== ==========
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
