SOURCE: First Bank

First Bank

February 24, 2014 16:53 ET

First Bank Reports 2013 Earnings of $1.7 Million; Total Assets Reach $467 Million

HAMILTON, NJ--(Marketwired - February 24, 2014) - First Bank (NASDAQ: FRBA) today announced fourth quarter and full year 2013 results. Net income for the quarter was $311,000 or $0.05 per diluted share, compared to net income of $1,000,000 or $0.21 per diluted share for the fourth quarter of 2012 and $492,000 or $0.10 per diluted share for the third quarter of 2013. 

Net income for the year ended December 31, 2013 totaled $1.7 million or $0.33 per diluted share compared to net income of $2.6 million or $0.63 per diluted share for the prior year. The decrease in net income reflects the depletion of certain tax benefits during 2012 as First Bank's 2013 results were fully taxable.

President and Chief Executive Officer Patrick L. Ryan discussed the results: "Strong top-line growth continued during the fourth quarter, but further clean-up of the pre-recap loan portfolio led to lower bottom-line results. All things considered, 2013 turned out to be a good year for First Bank: assets increased $116 million or 33%; loans increased $80 million or 31%; deposits increased $90 million or 29%; we opened another new branch; we announced and received regulatory approval for our pending acquisition of Heritage Community Bank; and we closed our initial public offering raising gross proceeds of $23 million in new equity capital. As a result of these positive developments throughout the year, our strategic positioning has improved significantly. 

"Our asset quality profile continued to improve during 2013. Criticized and classified loans and OREO, including other repossessed assets, declined from $14.9 million at December 31, 2012 to $11.2 million at December 31, 2013, a reduction of 25%. When you add in our higher capital base at year end, these adversely classified assets dropped to 19% of our risk-based capital, down from 44% a year earlier."

Ryan continued, "We expect to finalize the Heritage merger during the first quarter. Once completed we will be an approximately $600 million franchise with eight (8) branches and sufficient capital available for continued growth. We remain excited about our prospects in an industry where headwinds are subsiding and renewed consolidation should create additional expansion opportunities."

Fourth Quarter and Full Year 2013 Highlights

  • Balance Sheet
    • Total assets at December 31, 2013 were $466.8 million, an increase of $41.1 million or 9.7% compared to September 30, 2013 and an increase of $116.0 million or 33.1% compared to December 31, 2012. 
    • Total loans reached $340.0 million at year end, an increase of $26.0 million or 8.3% compared to September 30, 2013 and an increase of $79.9 million or 30.7% compared to December 31, 2012. Loan growth occurred across all product categories consistent with our current loan mix.
    • Total deposits reached $399.1 million, an increase of $20.8 million or 5.5% compared to September 30, 2013 and an increase of $90.1 million or 29.1% compared to December 31, 2012. 
    • Book equity increased to $52.5 million at December 31, 2013, driven primarily by the new capital raised in the November capital offering. 
    • Book value per share was $6.16 at December 31, 2013 compared to $6.73 per share at September 30, 2013 and $6.62 per share at December 31, 2012; dilution from the capital offering was the biggest driver of the decline during the fourth quarter.
  • Income Statement
    • Net interest income for the fourth quarter of 2013 totaled $3.6 million, an increase of $137 thousand or 3.9% compared to $3.5 million for the third quarter of 2013. Net interest income totaled $13.2 million for the full year 2013, an increase of $2.3 million or 20.8% compared to the full year 2012. Strong loan growth led net interest income higher during all periods.
    • Non-interest income for the fourth quarter of 2013 totaled $102 thousand, an increase of $16 thousand or 18.6% compared to $86 thousand for the third quarter of 2013. Non-interest income totaled $512 thousand for the full year 2013 compared to $394 thousand for the full year 2012. The year over year increase of $118 thousand or 29.9% was largely the result of an SBA loan sale in 2013.
    • Non-interest expense for the fourth quarter of 2013 totaled $2.5 million, an increase of $44 thousand or 1.8% compared to $2.4 million for the third quarter of 2013. Increases in staff and consultants along with higher marketing costs drove the expense growth during the quarter. Non-interest expense totaled $9.4 million for the full year 2013, an increase of $1.7 million or 21.9% compared to $7.7 million for the full year 2012.
    • Pre-tax income for the fourth quarter of 2013 totaled $507 thousand, a decrease of $328 thousand or 39.3% compared to $835 thousand for the third quarter of 2013. A higher provision for loan losses drove the reduction in pre-tax income. Pre-tax income totaled $2.8 million for the full year 2013, an increase of $529 thousand or 23.4% compared to $2.3 million for the full year 2012. Strong loan growth drove the increase in pre-tax income for the year.
    • The provision for loan losses in the fourth quarter of 2013 totaled $733 thousand, an increase of $437 thousand or 147.6% compared to $296 thousand for the third quarter of 2013. Elevated charge offs associated with two, pre-recap loan relationships drove the need for a significantly higher provision during the quarter. The provision for loan losses totaled $1.5 million for the full year 2013, an increase of $177 thousand or 13.0% compared to $1.4 million for the full year 2012. Higher net charge offs in 2013 compared to 2012 ($952 thousand compared to $589 thousand) coupled with strong loan growth in 2013 led to the higher provision expense for the year.
  • Other items
    • The net interest margin (NIM) for the fourth quarter of 2013 was 3.38% compared to 3.57% for the third quarter of 2013 and 3.75% for fourth quarter of 2012. The NIM, on a tax equivalent basis, for the full year 2013 was 3.47% compared to 3.68% for the full year 2012. The low rate environment coupled with increased pricing pressure on commercial loans led to the margin compression during the quarter and the full year.
    • Non-performing assets (NPAs) were $5.1 million or 1.09% of total assets at December 31, 2013 compared to $5.9 million or 1.69% of total assets at December 31, 2012.
    • Non-accrual loans totaled $3.3 million at December 31, 2013. Loans 30-59 days past due totaled $4.8 million. We had no loans 60-89 days past due nor did we have any loans over 90 days past due and still accruing at year-end 2013. OREO (including other repossessed assets) totaled $1.8 million.
    • Regulatory capital ratios at December 31, 2013:
      • Tier 1 Leverage ratio of 11.89%
      • Tier 1 Risk-Based capital ratio of 14.11%
      • Total Risk-Based capital ratio of 15.35%
    • The allowance for loan losses to total loans at December 31, 2013 was 1.38% compared to 1.57% at December 31, 2012.
    • 59 full-time equivalent employees (FTEs) at December 31, 2013, compared to 48 FTEs at December 31, 2012.
    • Loan portfolio breakdown at December 31, 2013:
      • Commercial Acquisition, Construction and Development (ACD) loans equaled 6.9% of total loans
      • Commercial Real-Estate, Investor (CREI; including multi-family) loans equaled 41.0% of total loans
      • Commercial Real-Estate, Owner-occupied (CREO) loans equaled 23.5% of total loans
      • Commercial and Industrial (C&I) loans equaled 17.8% of total loans
      • Residential, Consumer and Other loans equaled 10.8% of total loans
    • Non-interest bearing deposits totaled $48.2 million at December 31, 2013 or 12.1% of total deposits.

About First Bank
First Bank (www.firstbanknj.com) is a New Jersey state-chartered bank with five full-service branches in Ewing, Hamilton, Lawrence, Somerset and Williamstown, New Jersey. With $467 million in assets as of December 31, 2013, First Bank offers a traditional range of deposit and loan products to individuals and businesses in its Central and Southern New Jersey markets. First Bank's common stock is listed on the Nasdaq Global Market under the symbol "FRBA". 

This news release contains certain forward-looking statements, either expressed or implied, which are provided to assist the reader in understanding anticipated future financial performance. These statements involve certain risks, uncertainties, estimates and assumptions made by management, which are subject to factors beyond First Bank's control and could impede its ability to achieve these goals. These factors include those listed in our Registration Statement on From 10 under the caption "Item 1A- Risk Factors", and general economic conditions, trends in interest rates, the ability of our borrowers to repay their loans, and results of regulatory exams, among other factors.

   
   
FIRST BANK AND SUBSIDIARY  
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION  
(in thousands, except for share data)  
(Unaudited)  
         
  December 31,  
  2013   2012  
Assets          
Cash and due from banks $9,787   $6,234  
Interest bearing deposits with banks  13,927    17,694  
   Cash and cash equivalents  23,714    23,928  
Interest bearing time deposits with banks  4,903    1,469  
Investment securities available for sale  65,017    43,265  
Investment securities held to maturity (fair value of $15,353 and $7,052 at December 31, 2013 and 2012, respectively)  15,414    6,693  
Restricted investment in bank stocks  1,131    824  
Other investments  5,000    5,000  
Loans, net of deferred fees and costs  339,975    260,039  
  Less: Allowance for loan losses  4,675    4,084  
   Net loans  335,300    255,955  
Premises and equipment, net  1,787    1,901  
Other real estate owned, net  1,664    2,604  
Accrued interest receivable  1,232    1,033  
Bank-owned life insurance  8,805    5,154  
Deferred income taxes  2,352    2,225  
Other assets  473    731  
   Total assets $466,792   $350,782  
           
Liabilities and Stockholders' Equity          
Deposits:          
  Non-interest bearing $48,186   $27,460  
  Interest bearing  350,927    281,588  
   Total deposits  399,113    309,048  
Long-term borrowings  14,000    10,219  
Accrued interest payable  156    139  
Other liabilities  1,016    351  
   Total liabilities  414,285    319,757  
Stockholders' Equity:          
Preferred stock, par value $2.00 per share; authorized 5,000,000 shares at December 31, 2013 and 1,000,000 shares at December 31, 2012; no shares issued and outstanding  -    -  
Common stock, par value $5 per share; authorized 20,000,000 shares at December 31, 2013 and 10,000,000 shares at December 31, 2012; issued and outstanding 8,520,299 shares at December 31, 2013 and 4,686,965 shares at December 31, 2012  42,602    23,435  
Additional paid-in capital  13,052    11,277  
Accumulated deficit  (2,290 )  (3,998 )
Accumulated other comprehensive (loss) income  (857 )  311  
   Total stockholders' equity  52,507    31,025  
   Total liabilities and stockholders' equity $466,792   $350,782  
   
   
FIRST BANK AND SUBSIDIARY  
CONSOLIDATED STATEMENTS OF INCOME  
(in thousands, except for share data)  
(Unaudited)  
                
   Three Months Ended   Year Ended  
   December 31,   December 31,  
   2013  2012   2013  2012  
Interest and Dividend Income                   
Investment securities - taxable  $303  $212   $969  $674  
Investment securities - tax-exempt   52   21    138   54  
Interest bearing deposits and other   55   39    173   158  
Federal funds sold   -   -    -   1  
Loans, including fees   4,127   3,498    15,341   13,323  
  Total interest and dividend income   4,537   3,770    16,621   14,210  
                    
Interest Expense                   
Deposits   874   772    3,215   3,136  
Borrowings   55   39    199   142  
  Total interest expense   929   811    3,414   3,278  
Net interest income   3,608   2,959    13,207   10,932  
Provision for loan losses   733   418    1,543   1,366  
Net interest income after provision for loan losses   2,875   2,541    11,664   9,566  
                    
Non-Interest Income                   
Service fees on deposit accounts   18   18    75   82  
Loan fees   4   13    33   45  
Title insurance fees   7   20    30   59  
Income on bank-owned life insurance   41   36    151   142  
Gains on sale of investment securities   -   -    18   -  
Gains on sale of loans held for sale   -   -    134   -  
Other non-interest income   32   31    71   66  
  Total non-interest income   102   118    512   394  
                    
Non-Interest Expense                   
Salaries and employee benefits   1,251   823    4,751   3,963  
Occupancy and equipment   369   283    1,410   1,091  
Legal fees   18   (11 )  203   143  
Other professional fees   179   75    562   296  
Regulatory fees   83   90    253   234  
Directors' fees   57   25    231   112  
Data processing   107   61    413   362  
Marketing and advertising   148   45    347   214  
Travel and entertainment   60   61    163   155  
Insurance   29   37    114   122  
Other real estate owned expense, net   34   343    385   420  
Litigation settlement   -   -    -   150  
Other expense   135   159    557   440  
  Total non-interest expense   2,470   1,991    9,389   7,702  
                    
Income Before Income Taxes   507   668    2,787   2,258  
Income tax expense (benefit)   196   (332 )  1,079   (330 )
Net Income  $311  $1,000   $1,708  $2,588  
                    
Basic earnings per share  $0.05  $0.21   $0.33  $0.63  
Diluted earnings per share  $0.05  $0.21   $0.33  $0.63  
                    
Basic weighted average common shares   6,436,965   4,658,194    5,128,061   4,083,012  
Diluted weighted average common shares   6,509,078   4,664,964    5,172,233   4,083,012  
                             
                             

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