1ST Constitution Bancorp Reports a 57% Increase in Net Income for the Second Quarter Ended June 30, 2012

Marketwired

CRANBURY, NJ--(Marketwire -07/30/12)- 1ST Constitution Bancorp (FCCY), parent company of 1ST Constitution Bank, reported net income of $1.3 million, or $0.25 per diluted common share, for the quarter ended June 30, 2012, a 57% increase above the $829 thousand in net income, or $0.16 per diluted common share, reported for the second quarter of 2011.

For the six months ended June 30, 2012, the Company reported net income of $2.5 million, or $0.48 per diluted common share, compared with net income of $1.6 million, or $0.32 per diluted common share, for the first six months of 2011.

All share and per share data for the respective reporting periods have been adjusted for a 5% stock dividend paid on common shares on February 2, 2012. At June 30, 2012, the Company's tangible book value per common share was $10.28.

Robert F. Mangano, President and Chief Executive Officer, said, "The growth in net income for the quarter and the six months ended June 30, 2012 was principally the result of an increase in the Company's mortgage banking business, both retail and wholesale, partially offset by the increased non-interest expenses primarily associated with carrying costs and write-downs of foreclosed real estate."

Total assets at June 30, 2012 decreased to $777.5 million from $791.7 million at December 31, 2011. Gross portfolio loans at June 30, 2012 were $479.8 million, compared with $475.4 million at December 31, 2011; total investment securities at June 30, 2012 were $220.5 million, compared to $236.2 million at December 31, 2011, and total deposits at June 30, 2012 were $669.1 million, up from $623.9 million at December 31, 2011.

Net interest income for the quarter ended June 30, 2012 totaled $6.6 million, an increase of 27.1% from $5.2 million earned for the second quarter of 2011. Further supporting earnings was the continued generation of non-interest income, which increased by 4.2% to $1.2 million for the quarter ended June 30, 2012, from $1.1 million earned for the second quarter of 2011.

Non-interest expense increased to $5.4 million for the second quarter of 2012, compared to $5.2 million for the second quarter of 2011. The key increases in non-interest expense related to other real estate owned expenses, occupancy expense associated with the acquisition of branches in March 2011, and increases in salary and employee benefits primarily relating to merit increases, increased health costs, and overall increases in staffing levels.

For the second quarter of 2012, the provision for loan losses was $550 thousand, and net charge-offs were $175 thousand, compared to a provision for loan losses of $275 thousand and net charge-offs of $155 thousand for the second quarter of 2011.

At June 30, 2012, the allowance for loan losses was $6.3 million, or 1.30% of total loans, compared to $5.5 million, or 1.16% of total loans, at December 31, 2011. Total non-performing assets, which includes nonaccrual loans and OREO, was, as a percentage of total assets, 1.84% at June 30, 2012 and 1.95% at December 31, 2011.

Regulatory capital ratios continue to reflect a strong capital position. The Company's total risk-based capital, Tier I capital, and leverage capital were 12.51%, 11.47%, and 9.16%, respectively, at June 30, 2012. The regulatory requirements to be considered "well-capitalized" for total risk-based capital, Tier 1 capital, and leverage capital are 10%, 6%, and 5%, respectively.

1ST Constitution Bancorp, through its primary subsidiary, 1ST Constitution Bank, operate fourteen branch banking offices in Cranbury (2), Fort Lee, Hamilton, Hightstown, Hillsborough, Hopewell, Jamesburg, Lawrenceville, Perth Amboy, Plainsboro, Rocky Hill, West Windsor, and Princeton, New Jersey.

1ST Constitution Bancorp is traded on the Nasdaq Global Market under the trading symbol "FCCY" and can be accessed through the Internet at www.1STCONSTITUTION.com

The foregoing contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are not historical facts and include expressions about management's confidence and strategies and management's expectations about new and existing programs and products, relationships, opportunities, taxation, technology and market conditions. These statements may be identified by such forward-looking terminology as "expect," "look," "believe," "anticipate," "may," "will," or similar statements or variations of such terms. Actual results may differ materially from such forward-looking statements. Factors that may cause results to differ materially from such forward-looking statements include, but are not limited to, changes in the direction of the economy in New Jersey, the direction of interest rates, effective income tax rates, loan prepayment assumptions, continued levels of loan quality and origination volume, continued relationships with major customers including sources for loans, a higher level of net loan charge-offs and delinquencies than anticipated, bank regulatory rules, regulations or policies that restrict or direct certain actions, the adoption, interpretation and implementation of new or pre-existing accounting pronouncements, a change in legal and regulatory barriers including issues related to compliance with anti-money laundering and bank secrecy act laws, as well as the effects of general economic conditions and legal and regulatory barriers and structure. 1ST Constitution Bancorp assumes no obligation for updating any such forward-looking statements at any time, except as required by law.

 


1st Constitution Bancorp
Selected Consolidated Financial Data
( Unaudited )

($ in thousands
except per share
amounts) Three Months Ended Six Months Ended
June 30, June 30,
2012 2011 2012 2011
----------- ----------- ------------ ------------
Income Statement
Data:
Interest income $ 7,907 $ 7,085 $ 15,941 $ 14,019
Interest expense 1,279 1,871 2,683 3,640
----------- ----------- ------------ ------------
Net interest income 6,628 5,214 13,258 10,379
Provision for loan
losses 550 275 1,150 675
----------- ----------- ------------ ------------
Net interest income
after prov.for
loan losses 6,078 4,939 12,108 9,704
Non-interest income 1,188 1,141 2,353 2,165
Non-interest
expenses 5,374 5,156 10,986 9,819
----------- ----------- ------------ ------------
Income before
income taxes 1,892 924 3,475 2,050
Income tax expense 594 95 1,010 431
----------- ----------- ------------ ------------
Net income $ 1,298 $ 829 $ 2,465 $ 1,619
=========== =========== ============ ============

Per Common Share Data
(a):
Earnings per common
share - Basic $ 0.25 $ 0.16 $ 0.48 $ 0.32
Earnings per common
share - Diluted $ 0.25 $ 0.16 $ 0.48 $ 0.32
Tangible book value
per common share $ 10.28 $ 9.75
Average common
shares
outstanding:
Basic 5,096,317 5,043,504 5,096,252 5,043,324
Diluted 5,198,411 5,092,442 5,177,314 5,105,046

(a) Includes the
effect of the 5%
stock dividend
paid February 2,
2011.

Performance Ratios:
Return on average
assets 0.68% 0.45% 0.65% 0.47%
Return on average
equity 9.18% 6.55% 8.81% 6.52%
Net interest margin
(tax-equivalent
basis) 3.87% 3.25% 3.92% 3.38%
Efficiency ratio 68.8% 81.1% 70.4% 78.3%

June 30, December 31,
2012 2011
------------ ------------
Balance Sheet Data:
Total Assets $ 777,499 $ 791,727
Investment
Securities 220,530 236,158
Loans 479,795 475,432
Loans held for sale 16,596 19,234
Allowance for loan
losses (6,257) (5,534)
Goodwill and other
intangible assets 5,292 5,426
Deposits 669,071 623,862
Shareholders'
Equity 57,673 55,000

Asset Quality Data:
Loans past due
over 90 days and
still accruing $ 0 $ 0
Nonaccrual loans 2,699 2,991
OREO property 11,605 12,409
------------ ------------
Total non-
performing assets 14,304 15,400
Net charge-offs for
the six-month
period and year,
respectively 427 2,787
Allowance for loan
losses to total
loans 1.30% 1.16%
Nonperforming loans
to total loans 0.56% 0.63%
Nonperforming
assets to total
assets 1.84% 1.95%

Capital Ratios:
1st Constitution
Bancorp
Tier 1 capital to
average assets 9.16% 8.82%
Tier 1 capital to
risk weighted
assets 11.47% 11.27%
Total capital to
risk weighted
assets 12.51% 12.22%
1st Constitution
Bank
Tier 1 capital to
average assets 8.83% 8.49%
Tier 1 capital to
risk weighted
assets 11.02% 10.79%
Total capital to
risk weighted
assets 12.06% 11.73%
Contact:
CONTACT:
Robert F. Mangano
President & Chief Executive Officer
(609) 655-4500

Joseph M. Reardon
Sr. Vice President & Treasurer
(609) 655-4500


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