1st Colonial Bancorp, Inc. (FCOB), holding company of 1st Colonial Community Bank, today reported net income of $1.2 million, or $0.26 per diluted share, for the three months ended September 30, 2018 compared to net income of $1.1 million, or $0.24 per diluted share, for the three months ended September 30, 2017. For the nine months ended September 30, 2018, net income was $3.6 million, or $0.79 per diluted share, compared to $3.1 million, or $0.69 per diluted share for the same period in 2017. The 2017 earnings per diluted share were adjusted to give effect to the 5% stock dividend distributed to shareholders on April 16, 2018.
Gerry Banmiller, President and Chief Executive Officer, commented, “With the increase in interest rates, we have seen a decline in mortgage applications which negatively impacted non-interest revenue. We have been able to mitigate this reduction in revenue through balanced loan growth and overall product pricing. This prudent tactic resulted in a 9% increase in net interest income, which is a key component of our earnings.”
Highlights for the three and nine months ended September 30, 2018, included:
Balance Sheet Trends:
- At September 30, 2018, total assets were $539.3 million and declined $816 thousand, or (0.2%) from $540.1 million at December 31, 2017.
- Total loans were $400.8 million at September 30, 2018, an increase of $24.3 million, or 6.5%, from $376.5 million at December 31, 2017. During the first nine months of 2018, commercial and residential mortgage loans grew $16.8 million and $5.6 million, respectively.
- Total deposits were $493.1 million at September 30, 2018, a decrease of $3.7 million, or (0.8%), from $496.8 million at December 31, 2017. During the second quarter of 2018, we ran a successful certificates of deposit promotion which helped grow such deposits by $20.6 million, or 19.9%, since December 31, 2017. However, money market and savings accounts, brokered deposits, municipal deposits and checking accounts declined $10.3 million, $6.1 million, $4.3 million and $3.4 million, respectively.
- Total shareholders’ equity was $41.7 million at September 30, 2018, an increase of $3.3 million, or 8.5%, from $38.4 million at December 31, 2017.
- 1st Colonial's non-performing assets at September 30, 2018 were $2.2 million compared to $2.3 million at December 31, 2017. Non-performing assets to total assets at September 30, 2018 were 0.40% compared to 0.43% at December 31, 2017.
Income Statement and Other Highlights:
- Net interest income for the three months ended September 30, 2018 increased $425 thousand, or 9.8%, to $4.8 million from $4.4 million for the three months ended September 30, 2017. For the first nine months of 2018, net interest income grew $1.2 million, or 9.3%, to $13.7 million from $12.5 million for the same period in 2017. 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. The 100 basis-point increase in the fed funds rate since September 2017 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 certificates of deposit, NOW accounts and money market accounts.
- The net interest margin was 3.49% for the third quarter of 2018 compared to 3.41% for the third quarter of 2017 and was 3.46% for the nine months ended September 30, 2018 compared to 3.37% for the nine months ended September 30, 2017. The increase in net interest margin was directly related to an increase in the yield on average interest-earning assets.
- For the three and nine months ended September 30, 2018, we recorded a provision to the allowance for loan losses of $499 thousand and $1.1 million, respectively, compared to $170 thousand and $549 thousand for the three and nine months ended September 30, 2017. The increase in the 2018 provision was related to an increase in the specific reserves required on impaired loans. The allowance for loan losses as a percentage of total loans was 1.38% at September 30, 2018 compared to 1.29% at December 31, 2017.
- Non-interest income for the third quarter of 2018 was $730 thousand, a decrease of $236 thousand, or (24.4%), from $966 thousand for the third quarter of 2017. Gains on the sale of residential mortgages and small business administration (“SBA”) loans decreased $242 thousand due to a decline in the volume of loans originated and sold.
- Non-interest income for the first three quarters of 2018 was $2.4 million, a decrease of $528 thousand, or (18.1%), from $2.9 million for the first three quarters of 2017. Gains on the sale of residential mortgages and the sale of SBA loans and declined $407 thousand and $96 thousand, respectively, due to a decline in the volume of loans originated and sold. As interest rates have started to increase, residential mortgage originations have become increasingly competitive.
- Non-interest expense was $3.4 million for the three months ended September 30, 2018 and 2017. During the third quarter of 2018, we sold a property that we acquired through foreclosure and recorded a loss of $58 thousand, as a result of the sale. Both occupancy and equipment and data processing expenses increased $38 thousand and were partially mitigated by a $116 thousand decline in professional fees.
- Non-interest expense was $10.2 million for the nine months ended September 30, 2018 and increased $177 thousand, or 1.8%, from $10.0 million for the comparable period in 2017. Contributing to the increase in non-interest expense for 2018 was a $213 thousand increase in salaries and benefits related to the planned increase in headcount in the lending support and compliance functions. Data processing and occupancy and equipment expenses increased $179 thousand and $112 thousand, respectively. During the fourth quarter of 2017 we leased additional office space at our operations and administration center in Cherry Hill, New Jersey. Partially offsetting these increases in non-interest expense was a decline in professional fees and advertising expenses of $163 thousand and $128 thousand, respectively.
- For the three and nine months ended September 30, 2018, income tax expense was $424 thousand and $1.2 million, respectively, compared to $650 thousand and $1.8 million for the three and nine months ended September 30, 2017, respectively. The $611 thousand decrease in tax expense year-over-year was related to H.R. 1 (originally known as the “Tax Cuts and Jobs Act”) which was enacted on December 22, 2017. H.R. 1 lowered the maximum federal corporate tax rate to 21% from 35%.
Highlights as of September 30, 2018 and 2017, and a comparison of the three and nine months ended September 30, 2018 to the three and nine months ended September 30, 2017 include the following:
1st COLONIAL BANCORP, INC. CONSOLIDATED INCOME STATEMENTS (Unaudited, dollars in thousands, except per share data) | ||||||||||||
For the three months | For the nine months | |||||||||||
ended September 30, | ended September 30, | |||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||
Interest income | $ | 5,848 | $ | 5,030 | $ | 16,575 | $ | 14,372 | ||||
Interest expense | 1,076 | 683 | 2,858 | 1,818 | ||||||||
Net Interest Income | 4,772 | 4,347 | 13,717 | 12,554 | ||||||||
Provision for loan losses | 499 | 170 | 1,088 | 549 | ||||||||
Net interest income after provision for loan losses | 4,273 | 4,177 | 12,629 | 12,005 | ||||||||
Non-interest income | 730 | 966 | 2,396 | 2,924 | ||||||||
Non-interest expense | 3,374 | 3,419 | 10,172 | 9,995 | ||||||||
Income before taxes | 1,628 | 1,724 | 4,853 | 4,934 | ||||||||
Income tax expense | 424 | 650 | 1,223 | 1,834 | ||||||||
Net Income | $ | 1,204 | $ | 1,074 | $ | 3,630 | $ | 3,100 | ||||
Earnings Per Share — Basic (1) | $ | 0.27 | $ | 0.25 | $ | 0.83 | $ | 0.72 | ||||
Earnings Per Share — Diluted (1) | $ | 0.26 | $ | 0.24 | $ | 0.79 | $ | 0.69 |
SELECTED PERFORMANCE RATIOS: | ||||||||||||||||
For the three months | For the nine months | |||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
Return on Average Assets | 0.86 | % | 0.82 | % | 0.89 | % | 0.81 | % | ||||||||
Return on Average Equity | 11.57 | % | 11.45 | % | 12.10 | % | 11.49 | % | ||||||||
Book value per share (1) | $ | 9.50 | $ | 8.67 | $ | 9.50 | $ | 8.67 | ||||||||
At September 30, 2018 | At December 31, 2017 | |||||||||||||||
Capital ratios: | ||||||||||||||||
Tier 1 Leverage | 7.56 | % | 7.07 | % | ||||||||||||
Total Risk Based Capital | 13.03 | % | 12.36 | % | ||||||||||||
Common Equity Tier 1 | 11.77 | % | 11.11 | % |
(1) Adjusted to give effect to the 5% stock dividend distributed to shareholders on April 16, 2018.
1st COLONIAL BANCORP, INC. CONSOLIDATED BALANCE SHEETS | ||||||||
(Unaudited, in thousands) | At September 30, 2018 | At December 31, 2017 | ||||||
Cash and cash equivalents | $ | 16,332 | $ | 28,395 | ||||
Total investments | 108,296 | 118,547 | ||||||
Mortgage loans held for sale | 4,472 | 7,169 | ||||||
Total loans | 400,814 | 376,514 | ||||||
Less Allowance for loan losses | (5,519 | ) | (4,858 | ) | ||||
Loans and leases, net | 395,295 | 371,656 | ||||||
Bank owned life insurance | 8,614 | 8,434 | ||||||
Premises and equipment, net | 837 | 864 | ||||||
Other real estate owned, net | 104 | 244 | ||||||
Accrued interest receivable | 1,824 | 1,505 | ||||||
Other assets | 3,541 | 3,317 | ||||||
Total Assets | $ | 539,315 | $ | 540,131 | ||||
Total deposits | $ | 493,131 | $ | 496,847 | ||||
Other borrowings | 3,167 | 3,166 | ||||||
Other liabilities | 1,330 | 1,708 | ||||||
Total Shareholders’ Equity | 41,687 | 38,410 | ||||||
Total Liabilities and Equity | $ | 539,315 | $ | 540,131 |
1st COLONIAL BANCORP, INC. NET INTEREST INCOME AND MARGIN TABLES (Unaudited, in thousands, except percentages) | |||||||||||||||||||
For the three months ended | For the three months ended | ||||||||||||||||||
September 30, 2018 | September 30, 2017 | ||||||||||||||||||
Average | Interest | Yield | Average | Interest | Yield | ||||||||||||||
Cash and cash equivalents | $ | 28,756 | $ | 135 | 1.86 | % | $ | 23,633 | $ | 64 | 1.07 | % | |||||||
Investment securities | 109,927 | 527 | 1.90 | % | 106,184 | 374 | 1.40 | % | |||||||||||
Mortgage loans held for sale | 6,034 | 53 | 3.48 | % | 8,093 | 62 | 3.04 | % | |||||||||||
Loans | 397,850 | 5,133 | 5.12 | % | 368,499 | 4,530 | 4.88 | % | |||||||||||
Total interest-earning assets | 542,567 | 5,848 | 4.28 | % | 506,409 | 5,030 | 3.94 | % | |||||||||||
Non-interest earning assets | 12,595 | 12,299 | |||||||||||||||||
Total average assets | $ | 555,162 | $ | 518,708 | |||||||||||||||
Interest-bearing deposits | |||||||||||||||||||
Checking accounts | $ | 225,288 | $ | 312 | 0.55 | % | $ | 208,317 | $ | 142 | 0.27 | % | |||||||
Money markets and Savings | 74,400 | 85 | 0.45 | % | 82,635 | 95 | 0.46 | % | |||||||||||
Certificates of deposit | 147,067 | 675 | 1.82 | % | 113,132 | 442 | 1.55 | % | |||||||||||
Total interest-bearing deposits | 446,755 | 1,072 | 0.95 | % | 404,084 | 679 | 0.67 | % | |||||||||||
Borrowings | 3,166 | 4 | 0.50 | % | 3,000 | 4 | 0.53 | % | |||||||||||
Total interest-bearing liabilities | 449,921 | 1,076 | 0.95 | % | 407,084 | 683 | 0.67 | % | |||||||||||
Non-interest bearing deposits | 62,465 | 72,817 | |||||||||||||||||
Other liabilities | 1,474 | 1,575 | |||||||||||||||||
Shareholders' equity | 41,302 | 37,232 | |||||||||||||||||
Total average liabilities and equity | $ | 555,162 | $ | 518,708 | |||||||||||||||
Net interest income | $ | 4,772 | $ | 4,347 | |||||||||||||||
Net interest margin | 3.49 | % | 3.41 | % | |||||||||||||||
Net interest spread | 3.33 | % | 3.28 | % |
For the nine months ended | For the nine months ended | |||||||||||||||||
September 30, 2018 | September 30, 2017 | |||||||||||||||||
Average | Interest | Yield | Average | Interest | Yield | |||||||||||||
Cash and cash equivalents | $ | 22,719 | $ | 261 | 1.54 | % | $ | 18,730 | $ | 118 | 0.84 | % | ||||||
Investment securities | 112,634 | 1,538 | 1.83 | % | 109,166 | 1,121 | 1.37 | % | ||||||||||
Mortgage loans held for sale | 6,703 | 169 | 3.37 | % | 7,366 | 165 | 2.99 | % | ||||||||||
Loans | 388,702 | 14,607 | 5.02 | % | 363,166 | 12,968 | 4.77 | % | ||||||||||
Total interest-earning assets | 530,758 | 16,575 | 4.18 | % | 498,428 | 14,372 | 3.86 | % | ||||||||||
Non-interest earning assets | 12,552 | 12,419 | ||||||||||||||||
Total average assets | $ | 543,310 | $ | 510,847 | ||||||||||||||
Interest-bearing deposits | ||||||||||||||||||
Checking accounts | $ | 234,267 | $ | 792 | 0.45 | % | $ | 237,349 | $ | 516 | 0.29 | % | ||||||
Money markets and Savings | 58,518 | 194 | 0.44 | % | 66,025 | 223 | 0.45 | % | ||||||||||
Certificates of deposit | 143,072 | 1,859 | 1.74 | % | 99,136 | 1,067 | 1.44 | % | ||||||||||
Total interest-bearing deposits | 435,857 | 2,845 | 0.87 | % | 402,510 | 1,806 | 0.60 | % | ||||||||||
Borrowings | 3,256 | 13 | 0.54 | % | 3,349 | 13 | 0.52 | % | ||||||||||
Total interest-bearing liabilities | 439,113 | 2,858 | 0.87 | % | 405,859 | 1,819 | 0.60 | % | ||||||||||
Non-interest bearing deposits | 62,633 | 67,419 | ||||||||||||||||
Other liabilities | 1,468 | 1,512 | ||||||||||||||||
Shareholders' equity | 40,095 | 36,057 | ||||||||||||||||
Total average liabilities and equity | $ | 543,310 | $ | 510,847 | ||||||||||||||
Net interest income | $ | 13,717 | $ | 12,553 | ||||||||||||||
Net interest margin | 3.46 | % | 3.37 | % | ||||||||||||||
Net interest spread | 3.31 | % | 3.26 | % |
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 or theft by employees, customers or outsiders, and the risk of interruptions in and breaches in security of our information systems; 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/20181031005538/en/
1st Colonial Bancorp, Inc.
Gerry Banmiller, 856-858-8402
Copyright Business Wire 2018