COLLINGSWOOD, N.J.–(BUSINESS WIRE)–1st Colonial Bancorp, Inc. (FCOB), holding company of 1st Colonial Community Bank, today reported net income of $1.1 million, or $0.23 per diluted share, for the three months ended June 30, 2019 compared to net income of $1.3 million, or $0.28 per diluted share, for the three months ended June 30, 2018. For the six months ended June 30, 2019, net income was $1.9 million, or $0.40 per diluted share, compared to $2.4 million, or $0.51 per diluted share for the same period in 2018. The 2018 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, “The first half of 2019 has been challenging due to an increase in non-performing assets. We are taking a proactive, conservative approach as we work through these credits. As we look to grow our franchise, we recently hired two experienced commercial lending officers who will work closely with our Business Development Manager to grow our customer base.”
Highlights for the three and six months ended June 30, 2019, included:
Balance Sheet Trends:
- At June 30, 2019, total assets were $543.7 million compared to $543.9 million at December 31, 2018.
- Total loans were $409.9 million at June 30, 2019, an increase of $5.4 million, or 1.3%, from $404.5 million at December 31, 2018. During the first six months of 2019, commercial mortgage loans and residential mortgages grew $6.0 million and $4.5 million, respectively, while commercial and construction loans declined $2.7 million and $2.4 million respectively. At June 30, 2019, commercial commitments to extend credit were $31.4 million and included $16.5 million in construction commitments.
- Total deposits were $486.8 million at June 30, 2019, a decrease of $3.3 million, or 0.7%, from $490.1 million at December 31, 2018. Brokered deposits, demand deposits and CDs increased $9.3 million, $8.4 million and $7.4 million, respectively, as municipal NOWs, money markets, and NOW accounts decreased $20.4 million, $4.3 million, and $2.2 million, respectively.
- Total shareholders’ equity was $46.4 million at June 30, 2019, an increase of $2.7 million, or 6.1%, from $43.7 million at December 31, 2018.
- 1st Colonial’s non-performing assets at June 30, 2019 were $4.7 million and included $3.9 million in non-accrual loans and $826 thousand in other real estate owned (OREO). Non-performing assets were $2.7 million at December 31, 2018. Non-performing assets to total assets at June 30, 2019 were 0.87% compared to 0.50% at December 31, 2018. We are conservative in actively managing our criticized and classified assets with the goal of maximizing value and minimizing losses. During June we accepted deeds in lieu of foreclosure on seven residential rental properties. We have retained a management company to manage these properties while we work on their disposal.
Income Statement and Other Highlights:
- Net interest income for the three months ended June 30, 2019 increased $140 thousand, or 3.1%, to $4.7 million from $4.5 million for the three months ended June 30, 2018. For the first six months of 2019, net interest income grew $418 thousand, or 4.5%, to $9.4 million from $8.9 million for the same period in 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. The 50 basis point increase in the fed funds rate since June 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 certificates of deposit and NOW accounts.
- The net interest margin was 3.45% for the second quarter of 2019 compared to 3.45% for the second quarter of 2018, and was 3.52% for the six months ended June 30, 2019 compared to 3.44% for the six months ended June 30, 2018. The increase in net interest margin for the six month period was directly related to an increase in the yield on average interest-earning assets.
- For the three and six months ended June 30, 2019, we recorded a provision to the allowance for loan losses of $300 thousand and $979 thousand, respectively, compared to $311 thousand and $589 thousand for the three and six months ended June 30, 2018. The increase in the 2019 provision was related to an increase in specific reserves required on impaired loans and, to a smaller extent, an increase in qualitative factors. During the first half of 2019, we recorded net charge-offs of $1.4 million compared to $199 thousand for the first half of 2018. The majority of the charge-offs were related to specific reserves. The allowance for loan losses as a percentage of total loans was 1.26% at June 30, 2019 compared to 1.39% at December 31, 2018.
- Non-interest income for the second quarter of 2019 was $774 thousand, a decrease of $247 thousand, or 24.2%, from $1.0 million for the second quarter of 2018. Gains on the sale of small business administration (“SBA”) loans decreased $118 thousand while the gains on the sale of residential mortgages declined $113 thousand, the latter due to a decline in the volume of mortgage loans sold.
- For the six months ended June 30, 2019, non-interest income was $1.4 million, a decrease of $300 thousand, or 18.1%, from $1.7 million for the same period in 2018. Gains on the sale of residential mortgages and the sale of SBA loans declined $153 thousand and $133 thousand, respectively, due to a decline in the volume of loans sold. During the first two quarters of 2019, the residential mortgage loan originations retained in the bank’s portfolio increased $5.5 million from the same period in 2018. This strategy will positively impact interest income over time, but it has an immediate negative effect on non-interest revenue.
- Non-interest expense was $3.7 million for the three months ended June 30, 2019 an increase of $236 thousand, or 6.8%, from $3.5 million for the comparable period in 2018. Contributing to the increase in non-interest expense for the second quarter of 2019 was a $190 thousand increase in expenses associated with non-performing assets.
- Non-interest expense was $7.2 million for the six months ended June 30, 2019 an increase of $389 thousand, or 5.7%, from $6.8 million for the comparable period in 2018. Contributing to the increase in non-interest expense for 2019 were increases of $166 thousand, $99 thousand and $66 thousand in non-performing asset expenses, salaries and benefits, and data processing expenses, respectively. During 2018 we added personnel in commercial lending and in the lending support functions creating increased salaries and benefits for 2019.
- For the three and six months ended June 30, 2019, income tax expense was $332 thousand and $665 thousand, respectively, compared to $412 thousand and $800 thousand for the three and six months ended June 30, 2018, respectively.
Highlights as of June 30, 2019 and 2018, and a comparison of the three and six months ended June 30, 2019 to the three and six months ended June 30, 2018 include the following:
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1st COLONIAL BANCORP, INC. |
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CONSOLIDATED INCOME STATEMENTS |
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(Unaudited, dollars in thousands, except per share data) |
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For the three months |
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For the six months |
||||||||||
|
ended June 30, |
|
ended June 30, |
||||||||||
|
2019 |
|
2018 |
|
2019 |
|
2018 |
||||||
|
Interest income |
$ |
6,014 |
$ |
5,521 |
$ |
11,991 |
$ |
10,728 |
||||
|
Interest expense |
|
1,342 |
|
989 |
|
2,627 |
|
1,782 |
||||
|
Net Interest Income |
|
4,672 |
|
4,532 |
|
9,364 |
|
8,946 |
||||
|
Provision for loan losses |
|
300 |
|
311 |
|
979 |
|
589 |
||||
|
Net interest income after provision for loan losses |
|
4,372 |
|
4,221 |
|
8,385 |
|
8,357 |
||||
|
Non-interest income |
|
774 |
|
1,021 |
|
1,366 |
|
1,666 |
||||
|
Non-interest expense |
|
3,729 |
|
3,493 |
|
7,186 |
|
6,797 |
||||
|
Income before taxes |
|
1,417 |
|
1,749 |
|
2,565 |
|
3,226 |
||||
|
Income tax expense |
|
332 |
|
412 |
|
635 |
|
800 |
||||
|
Net Income |
$ |
1,085 |
$ |
1,337 |
$ |
1,930 |
$ |
2,426 |
||||
|
Earnings Per Share – Basic (1) |
$ |
0.23 |
$ |
0.29 |
$ |
0.41 |
$ |
0.53 |
||||
|
Earnings Per Share – Diluted (1) |
$ |
0.23 |
$ |
0.28 |
$ |
0.40 |
$ |
0.51 |
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SELECTED PERFORMANCE RATIOS: |
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For the three months |
|
For the six months |
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|
2019 |
|
2018 |
|
2019 |
|
2018 |
||||||
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Return on Average Assets |
|
0.79% |
|
0.99% |
|
0.71% |
|
0.91% |
||||
|
Return on Average Equity |
|
9.56% |
|
13.42% |
|
8.65% |
|
12.39% |
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|
Book value per share (1) |
$ |
9.94 |
$ |
8.81 |
$ |
9.94 |
$ |
8.81 |
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|
|
At June 30, 2019 |
At December 31, 2018 |
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Capital ratios: |
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|
Tier 1 Leverage |
8.28% |
7.98% |
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|
Total Risk Based Capital |
13.68% |
13.42% |
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|
Common Equity Tier 1 |
12.43% |
12.16% |
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(1) |
Adjusted to give effect to the 5% stock dividend distributed to shareholders on April 15, 2019. |
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1st COLONIAL BANCORP, INC. |
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CONSOLIDATED BALANCE SHEETS |
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|
(Unaudited, in thousands) |
At June 30, 2019 |
At December 31, 2018 |
|||||
|
Cash and cash equivalents |
$ |
5,556 |
$ |
12,114 |
|||
|
Total investments |
|
110,089 |
|
115,093 |
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Mortgage loans held for sale |
|
6,824 |
|
2,989 |
|||
|
Total loans |
|
409,899 |
|
404,535 |
|||
|
Less Allowance for loan losses |
|
(5,167) |
|
(5,627) |
|||
|
Loans and leases, net |
|
404,732 |
|
398,908 |
|||
|
Bank owned life insurance |
|
8,484 |
|
8,368 |
|||
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Premises and equipment, net |
|
715 |
|
798 |
|||
|
Other real estate owned, net |
|
826 |
|
– |
|||
|
Accrued interest receivable |
|
2,177 |
|
1,737 |
|||
|
Other assets |
|
4,282 |
|
3,931 |
|||
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Total Assets |
$ |
543,685 |
$ |
543,938 |
|||
|
Total deposits |
$ |
486,814 |
$ |
490,096 |
|||
|
Other borrowings |
|
8,174 |
|
8,157 |
|||
|
Other liabilities |
|
2,322 |
|
1,989 |
|||
|
Total Shareholders’ Equity |
|
46,375 |
|
43,696 |
|||
|
Total Liabilities and Equity |
$ |
543,685 |
$ |
543,938 |
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1st COLONIAL BANCORP, INC. |
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NET INTEREST INCOME AND MARGIN TABLES |
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|
(Unaudited, in thousands, except percentages) |
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|
For the three months ended |
|
For the three months ended |
||||||||||||||
|
June 30, 2019 |
|
June 30, 2018 |
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|
Average |
|
Interest |
|
Yield |
|
Average |
|
Interest |
|
Yield |
||||||
|
Cash and cash equivalents |
$ |
12,410 |
$ |
57 |
1.84% |
$ |
16,544 |
$ |
50 |
1.21% |
||||||
|
Investment securities |
|
110,676 |
|
592 |
2.15% |
|
111,732 |
|
499 |
1.79% |
||||||
|
Mortgage loans held for sale |
|
6,442 |
|
45 |
2.80% |
|
8,258 |
|
69 |
3.35% |
||||||
|
Loans |
|
407,504 |
|
5,320 |
5.24% |
|
390,716 |
|
4,903 |
5.03% |
||||||
|
Total interest-earning assets |
|
537,032 |
|
6,014 |
4.49% |
|
527,250 |
|
5,521 |
4.20% |
||||||
|
Non-interest earning assets |
|
13,750 |
|
12,583 |
||||||||||||
|
Total average assets |
$ |
550,782 |
$ |
539,833 |
||||||||||||
|
Interest-bearing deposits |
||||||||||||||||
|
Checking accounts |
$ |
217,359 |
$ |
411 |
0.76% |
$ |
214,023 |
$ |
260 |
0.49% |
||||||
|
Money markets and Savings |
|
64,624 |
|
71 |
0.44% |
|
71,061 |
|
80 |
0.45% |
||||||
|
Certificates of deposit |
|
151,073 |
|
832 |
2.21% |
|
149,181 |
|
644 |
1.73% |
||||||
|
Total interest-bearing deposits |
|
433,056 |
|
1,314 |
1.22% |
|
434,265 |
|
984 |
0.91% |
||||||
|
Borrowings |
|
6,315 |
|
28 |
1.78% |
|
3,279 |
|
5 |
0.61% |
||||||
|
Total interest-bearing liabilities |
|
439,371 |
|
1,342 |
1.23% |
|
437,544 |
|
989 |
0.91% |
||||||
|
Non-interest bearing deposits |
|
63,850 |
|
61,142 |
||||||||||||
|
Other liabilities |
|
2,016 |
|
1,213 |
||||||||||||
|
Shareholders’ equity |
|
45,545 |
|
39,934 |
||||||||||||
|
Total average liabilities and equity |
$ |
550,782 |
$ |
539,833 |
||||||||||||
|
Net interest income |
$ |
4,672 |
$ |
4,532 |
||||||||||||
|
Net interest margin |
3.49% |
3.45% |
||||||||||||||
|
Net interest spread |
3.27% |
3.29% |
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|
For the six months ended |
|
For the six months ended |
||||||||||||||
|
June 30, 2019 |
|
June 30, 2018 |
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|
Average |
|
Interest |
|
Yield |
|
Average |
|
Interest |
|
Yield |
||||||
|
Cash and cash equivalents |
$ |
12,792 |
$ |
120 |
1.89% |
$ |
19,560 |
$ |
126 |
1.29% |
||||||
|
Investment securities |
|
112,267 |
|
1,201 |
2.16% |
|
114,010 |
|
1,011 |
1.79% |
||||||
|
Mortgage loans held for sale |
|
5,429 |
|
69 |
2.56% |
|
7,044 |
|
116 |
3.32% |
||||||
|
Loans |
|
406,116 |
|
10,601 |
5.26% |
|
384,051 |
|
9,475 |
4.98% |
||||||
|
Total interest-earning assets |
|
536,604 |
|
11,991 |
4.51% |
|
524,755 |
|
10,728 |
4.12% |
||||||
|
Non-interest earning assets |
|
13,346 |
|
|
|
12,530 |
|
|
||||||||
|
Total average assets |
$ |
549,950 |
|
|
$ |
537,285 |
|
|
||||||||
|
Interest-bearing deposits |
|
|
|
|
|
|
||||||||||
|
Checking accounts |
$ |
221,324 |
$ |
828 |
0.75% |
$ |
215,483 |
$ |
423 |
0.40% |
||||||
|
Money markets and Savings |
|
65,471 |
|
144 |
0.44% |
|
74,088 |
|
166 |
0.45% |
||||||
|
Certificates of deposit |
|
149,516 |
|
1,613 |
2.18% |
|
141,041 |
|
1,184 |
1.69% |
||||||
|
Total interest-bearing deposits |
|
436,311 |
|
2,585 |
1.19% |
|
430,612 |
|
1,773 |
0.83% |
||||||
|
Borrowings |
|
5,366 |
|
42 |
1.58% |
|
3,303 |
|
9 |
0.55% |
||||||
|
Total interest-bearing liabilities |
|
441,677 |
|
2,627 |
1.20% |
|
433,915 |
|
1,782 |
0.83% |
||||||
|
Non-interest bearing deposits |
|
61,546 |
|
|
|
62,719 |
|
|
||||||||
|
Other liabilities |
|
1,731 |
|
|
|
1,169 |
|
|
||||||||
|
Shareholders’ equity |
|
44,996 |
|
|
|
39,482 |
|
|
||||||||
|
Total average liabilities and equity |
$ |
549,950 |
|
|
$ |
537,285 |
|
|
||||||||
|
Net interest income |
|
$ |
9,364 |
|
|
$ |
8,946 |
|
||||||||
|
Net interest margin |
|
|
3.52% |
|
|
3.44% |
||||||||||
|
Net interest spread |
|
|
3.31% |
|
|
3.29% |
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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; changes in or additions to management and/or key employees; 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.
Contacts
Gerry Banmiller, 856‑858‑8402
