U.S. Markets closed

1st Colonial Bancorp, Inc. Reports First Quarter 2019 Net Income of $845 Thousand

COLLINGSWOOD, N.J.--(BUSINESS WIRE)--

1st Colonial Bancorp, Inc. (FCOB), holding company of 1st Colonial Community Bank, today reported net income of $845 thousand, or $0.18 per diluted share, for the three months ended March 31, 2019 compared to net income of $1.1 million, or $0.23 per diluted share for the three months ended March 31, 2018. The decrease in net income is due to a $401 thousand increase in the loan loss provision, a $149,000 increase in non-interest expense, and a $58,000 decrease in non-interest income, each for the reasons explained below and which offset a $279,000 increase in net interest income. The earnings per diluted share were adjusted to give effect to the 5% stock dividend distributed to shareholders on April 15, 2019.

Gerry Banmiller, President and Chief Executive Officer, commented, “We are focused on our future. We plan on growing revenue through the addition of veteran relationship managers and the implementation of our digital strategy. Later this year, we will debut a modernized website, offer Zelle to our customers, and design a refresh of our branches. Collectively these initiatives will position us to grow our customer base and increase shareholder value.”

Highlights for the three months ended March 31, 2019, included:

Balance Sheet Trends:

  • At March 31, 2019, total assets were $545.6 million and grew $1.7 million from $543.9 million at December 31, 2018.
  • Total loans were $411.3 million at March 31, 2019, an increase of $6.8 million, or 1.7%, from $404.5 million at December 31, 2018. Increases were recognized in commercial loans secured by real estate and residential mortgage loans.
  • Total deposits were $487.5 million at March 31, 2019, a slight decrease of $2.6 million, or 0.5%, from $490.1 million at December 31, 2018. Certificates of deposit, demand deposits and savings accounts increased $7.3 million, $6.3 million and $2.6 million, respectively. Brokered deposits, money market accounts, and municipal deposits declined $11.9 million, $3.6 million and $2.7 million, respectively.
  • Total shareholders’ equity was $45.0 million at March 31, 2019, an increase of $1.3 million, or 2.9%, from $43.7 million at December 31, 2018.
  • 1st Colonial's non-performing assets at March 31, 2019 were $4.0 million compared to $2.7 million at December 31, 2018. Non-performing assets to total assets at March 31, 2019 were 0.74% compared to 0.50% at December 31, 2018. During March we had one large relationship that rapidly deteriorated and was placed on non-accrual.

Income Statement and Other Highlights:

  • Net interest income for the three months ended March 31, 2019 increased $279 thousand, or 6.3%, to $4.7 million from $4.4 million for the three months ended March 31, 2018. The growth in net interest income was primarily related to an increase in interest income on loans and in the average yield earned on average interest-earning assets. During the past twelve months, the 75 basis point increase in the fed funds rate since March 2018 has had a positive impact on our variable rate loans and our interest-earning deposits. The improvement in interest income was partially offset by an increase in the interest paid on interest-bearing deposits.
  • The net interest margin was 3.55% for the first quarter of 2019 compared to 3.43% for the first quarter of 2018. The increase in net interest margin was directly related to an increase in the yield on average interest-earning assets.
  • For the three months ended March 31, 2018, we recorded a provision to the allowance for loan losses of $679 thousand compared to $278 thousand for the three months ended March 31, 2018. The increase in the quarter over quarter provision was related to an increase in specific reserves required on impaired loans. The loan loss allowance as a percentage of total loans was 1.43% at March 31, 2019 compared to 1.39% at December 31, 2018.
  • Non-interest income for the first quarter of 2019 was $592 thousand, a decrease of $58 thousand, or 8.9%, from $650 thousand for the first quarter of 2018. Gains on the sale of residential mortgages and the sale of small business administration (“SBA”) loans declined $39 thousand and $15 thousand, respectively, due to a decline in the volume of loans sold.
  • Non-interest expense was $3.5 million for the quarter ended March 31, 2019 and increased $149 thousand, or 4.5%, from $3.3 million for the comparable period in 2018. Contributing to the increase in non-interest expense for the first quarter of 2019 were increases of $76 thousand and $53 thousand in salaries and benefits and data processing expenses, respectively. During 2018 we added personnel in commercial lending and in the lending support functions.
  • For the three months ended March 31, 2019, income tax expense was $303 thousand compared to $388 thousand for the three months ended March 31, 2018.

Highlights as of March 31, 2019 and December 31, 2018, and a comparison of the three months ended March 31, 2019 to the three months ended March 31, 2018 include the following:

 

1st COLONIAL BANCORP, INC.
CONSOLIDATED INCOME STATEMENTS
(Unaudited, dollars in thousands, except per share data)

 
    For the three months
ended March 31,

2019

   

2018

Interest income

$

5,977

$ 5,207
Interest expense   1,285   794
Net Interest Income 4,692 4,413
Provision for loan losses   679   278
Net interest income after provision for loan losses 4,013 4,135
Non-interest income 592 650
Non-interest expense   3,457   3,308
Income before taxes 1,148 1,477
Income tax expense   303   388
Net Income

$

845

$ 1,089
Earnings Per Share – Basic (1)

$

0.18

$ 0.24
Earnings Per Share – Diluted (1)

$

0.18

$ 0.23
 
 

SELECTED PERFORMANCE RATIOS:

 
   

For the three
months ended
March 31,

   

For the three
months ended
March 31,

2019

2018

Return on Average Assets 0.62% 0.83%
Return on Average Equity 7.71% 11.32%
Book value per share (1) $ 9.64 $ 8.54
 

At March 31, 2018

At December 31, 2018

Capital ratios:
Tier 1 Leverage 8.09% 7.98%
Total Risk Based Capital 13.51% 13.42%
Common Equity Tier 1 12.25% 12.16%
 

(1)

 

Adjusted to give effect to the 5% stock dividend distributed to shareholders on April 15, 2019.

 
 

1st COLONIAL BANCORP, INC.
CONSOLIDATED BALANCE SHEETS

 
(Unaudited, in thousands)     At March 31, 2019     At December 31, 2018
Cash and cash equivalents $ 9,571 $ 12,114
Total investments 112,918 115,093
Mortgage loans held for sale 2,977 2,989
Total loans 411,349 404,535
Less Allowance for loan losses   (5,890)   (5,627)
Loans and leases, net 405,459 398,908
Bank owned life insurance 8,426 8,368
Premises and equipment, net 739 798
Other real estate owned, net - -
Accrued interest receivable 2,080 1,737
Other assets   3,446   3,931
Total Assets $ 545,616 $ 543,938
 
Total deposits $ 487,518 $ 490,096
Other borrowings 11,168 8,157
Other liabilities 1,970 1,989
Total Shareholders’ Equity   44,960   43,696
Total Liabilities and Equity $ 545,616 $ 543,938
 
 

1st COLONIAL BANCORP, INC.
NET INTEREST INCOME AND MARGIN
(Unaudited, in thousands, except percentages)

 
  For the three months ended     For the three months ended
March 31, 2019 March 31, 2018
 

Average
Balance

    Interest     Yield

Average
Balance

    Interest     Yield
Cash and cash equivalents $ 13,177 $ 63 1.94% $ 22,791 $ 76 1.35%
Investment securities 113,876 609 2.17% 116,314 512 1.79%
Mortgage loans held for sale 4,406 25 2.30% 5,816 47 3.28%
Loans   404,711   5,280 5.29%   377,313   4,572 4.91%
Total interest-earning assets 536,170 5,977 4.52% 522,234 5,207 4.04%
Non-interest earning assets   12,938   12,475
Total average assets $ 549,108 $ 534,709

Interest-bearing deposits

NOW and money markets $ 238,823 $ 433 0.74% $ 233,099 $ 183 0.32%
Savings 52,836 57 0.44% 61,008 67 0.45%
Certificates of deposit   147,942   781 2.14%   132,812   540 1.65%
Total interest-bearing deposits 439,601 1,271 1.17% 426,919 790 0.75%
Borrowings   4,408   14 1.29%   3,327   4 0.49%
Total interest-bearing liabilities 444,009 1,285 1.17% 430,246 794 0.75%
Non-interest bearing deposits 59,216 64,313
Other liabilities 1,443 1,420
Shareholders' equity   44,440   38,578
Total average liabilities and equity $ 549,108 $ 534,557
Net interest income $ 4,692 $ 4,413
Net interest margin 3.55% 3.43%
Net interest spread 3.35% 3.30%
 

1st Colonial Community Bank, the subsidiary of 1st Colonial Bancorp, provides a range of business and consumer financial services, placing emphasis on customer service and access to decision makers. Headquartered in Collingswood, New Jersey, the Bank also has a branch in the New Jersey community of Westville and administrative offices in Cherry Hill, New Jersey. To learn more, call (856) 858-8402 or visit www.1stcolonial.com.

This release contains forward-looking statements that are not historical facts and include statements about management’s strategies and expectations about our business. There are risks and uncertainties that may cause our actual results and performance to be materially different from results indicated by these forward-looking statements. Factors that might cause a difference include economic conditions; unanticipated loan losses, inability to close loans in our pipeline, lack of liquidity; varying and unanticipated costs of collection with respect to nonperforming loans; an inability to dispose of real estate owned; changes in interest rates, changes in FDIC assessments, deposit flows, loan demand, and real estate values; changes in relationships with major customers; operational risks, including the risk of fraud by employees, customers or outsiders; competition; changes in accounting principles, policies or guidelines; changes in laws or regulations and in the manner in which the regulators enforce same; new technology and other factors affecting our operations, pricing, products and services.

View source version on businesswire.com: https://www.businesswire.com/news/home/20190501005976/en/