HAMILTON, NJ--(Marketwired - February 02, 2015) - First Bank (NASDAQ: FRBA) today announced fourth quarter and full-year 2014 results. Net income for the quarter was $586 thousand or $0.06 per diluted share, compared to net income of $311 thousand or $0.05 per diluted share for the fourth quarter of 2013 and $1.1 million or $0.12 per diluted share for the third quarter of 2014.
Fourth quarter results were primarily effected by three items: i) $1.1 million in income tax expense, which included $634,000 which related to the bargain purchase gain from the acquisition of Heritage Community Bank (HCB); ii) $472,000 in gains on recovery of acquired loans; and iii) a higher provision for loan losses of $947,000. The higher provision for loan losses was primarily driven by strong loan growth during the quarter. Book value per share was $6.88 at the end of 2014, an increase of $0.09 compared to $6.79 at the end of the third quarter of 2014 and an increase of $0.72 over book value per share at year end 2013.
Net income for the full year was $5.8 million compared to $1.7 million for 2013, an increase of $4.1 million or 242%. Diluted earnings per share for the comparative periods were $0.63 and $0.33, respectively. For the year over year comparison, the increase in net income was driven by a $8.0 million (61%) increase in net interest income and a $4.6 million (896%) increase in non-interest income, partially offset by a $6.4 million (69%) increase in non-interest expenses.
President and Chief Executive Officer Patrick L. Ryan discussed the results: "We had a strong finish to the year: total loans increased $43 million in the quarter; total assets increased $34 million; and book value per share increased to $6.88, an increase of $0.72 per share (12%) compared to year end 2013. We continued to realize benefits from the HCB acquisition as certain acquired loans performed better than expected, generating an additional $472 thousand in non-interest income during the quarter. Partially offsetting this benefit, deterioration in other components of the acquired portfolio drove our non-performing loan ratios up modestly. Our net interest margin of 3.84% for the quarter was up slightly from the third quarter, a solid accomplishment considering the current rate environment."
Ryan continued, "Despite these positive developments, bottom line results for the quarter were lower than expected because of a higher income tax provision related to the gain from the acquisition. All things considered, we look back at 2014 as a year of great progress and profitability for First Bank. Our customer base and our geographic footprint expanded. Our margin held steady. And, our core earnings showed solid, steady improvement. During the year, we answered key questions: i) we showed that we could effectively price, analyze, and integrate another bank; ii) we showed that our core organic growth engine could continue to churn out solid deposit and loan growth; and iii) we showed that as we grow we can generate positive operating leverage."
Highlights
- Balance Sheet
- Total assets at December 31, 2014 were $677.5 million, an increase of $34.0 million or 5.3% compared to September 30, 2014, and an increase of $210.7 million or 45.1% compared to December 31, 2013.
- Total loans reached $547.8 million at December 31, 2014, an increase of $42.8 million or 8.5% compared to September 30, 2014 and an increase of $207.8 million or 61.1% compared to December 31, 2013.
- Total deposits reached $596.5 million at December 31, 2014, an increase of $33.0 million or 5.9% compared to September 30, 2014 and an increase of $197.4 million or 49.5% compared to December 31, 2013. Non-interest bearing deposits increased to $92.0 million or 15.4% of total deposits at December 31, 2014.
- Stockholders' equity increased to $64.8 million at December 31, 2014.
- Book value per share was $6.88 at December 31, 2014 compared to $6.79 per share at September 30, 2014 and $6.16 per share at December 31, 2013. Tangible book value per share was $6.85 at December 31, 2014, compared to $6.75 per share at September 30, 2014 and $6.16 per share at December 31, 2013.
- Quarterly Income Statement
- Net interest income for the fourth quarter of 2014 totaled $6.1 million, an increase of $574 thousand or 10.4% compared to $5.5 million for the third quarter of 2014, and an increase of $2.5 million or 68.4% compared to the fourth quarter of 2013.
- Non-interest income for the fourth quarter of 2014 totaled $966 thousand, a decrease of $112 thousand or 10.4% compared to $1.1 million for the third quarter of 2014. When compared to the fourth quarter of 2013, non-interest income increased $864 thousand or 847.1%.
- Non-interest expense for the fourth quarter of 2014 totaled $4.4 million, an increase of $256 thousand or 6.2% compared to $4.1 million for the third quarter of 2014, and an increase of $1.9 million or 76.8% compared to $2.5 million in the fourth quarter of 2013.
- Pre-tax income for the fourth quarter of 2014 totaled $1.7 million, an increase of $236 thousand or 15.8% compared to $1.5 million for the third quarter of 2014, and an increase of $1.2 million or 240.4% compared to the fourth quarter of 2013.
- Net income for the fourth quarter of 2014 totaled $586 thousand, a decrease of $503 thousand or 46.2% compared to $1.1 million in the third quarter of 2014, and an increase of $275 thousand or 88.4% compared to the fourth quarter of 2013.
- Diluted earnings per share for the fourth quarter totaled $0.06, a decrease of $0.06 per share compared to $0.12 per share in the third quarter of 2014, and an increase of $0.01 per share compared to the fourth quarter of 2013.
- The provision for loan losses in the fourth quarter of 2014 totaled $947 thousand, a decrease of $30 thousand or 3.1% compared to $977 thousand for the third quarter of 2014, and an increase of $214 thousand or 29.2% compared to the fourth quarter of 2013.
- Pre-provision net revenue
1 for the fourth quarter was $2.2 million, an increase of $486 thousand or 28.2% compared to $1.7 million in the third quarter of 2014, and an increase of $972 thousand or 78.4% compared to the fourth quarter of 2013.
- Year to Date Income Statement
- Net interest income for the year ended December 31, 2014 totaled $21.2 million, an increase of $8.0 million or 60.6% compared to $13.2 million for 2013.
- Non-interest income for the year ended December 31, 2014 totaled $5.1 million, an increase of $4.6 million or 895.7% compared to $512 thousand for 2013.
- Non-interest expense for the year ended December 31, 2014 totaled $15.8 million, an increase of $6.4 million or 68.5% compared to $9.4 million for 2013.
- The provision for loan losses for the year ended December 31, 2014 totaled $2.4 million, an increase of $895 thousand or 58.0% compared to $1.5 million for 2013.
- Other items
- The tax equivalent net interest margin ("NIM") for the fourth quarter of 2014 was 3.84% compared to 3.72% for the third quarter of 2014 and 3.33% for the fourth quarter of 2013.
- Non-performing assets ("NPAs") were $9.4 million or 1.39% of total assets at December 31, 2014 compared to $7.0 million or 1.09% of total assets at September 30, 2014.
- Non-accrual loans totaled $4.7 million or 0.85% of total loans at December 31, 2014 compared to non-accrual loans of $4.3 million or 0.85% of total loans at September 30, 2014.
- Loans 30-89 days past due totaled $5.5 million at December 31, 2014 compared to $8.5 million at September 30, 2014. We had 2 loans over 90 days past due and still accruing at December 31, 2014 totaling $2.4 million.
- Other real estate owned (including other repossessed assets) totaled $2.3 million at December 31, 2014.
- Regulatory capital ratios at December 31, 2014:
- Tier 1 Leverage ratio of 9.72%.
- Tier 1 Risk-Based capital ratio of 10.96%.
- Total Risk-Based capital ratio of 12.00%.
- The allowance for loan losses ("ALLL") to total loans at December 31, 2014 was 1.11% compared to 1.09% at September 30, 2014. The increase in the ALLL ratio related primarily to an increase in our organic portfolio and payoffs/reductions in the loan portfolio acquired in the Heritage transaction that carries no loan loss reserve because of the mark to market accounting treatment on that portfolio at the time of acquisition.
- 94 full-time equivalent employees ("FTEs") at December 31, 2014, compared to 89 FTEs at September 30, 2014.
About First Bank
First Bank (www.firstbanknj.com) is a New Jersey state-chartered bank with nine full-service branches in Cranbury, Denville, Ewing, Hamilton, Lawrence, Randolph (2), Somerset and Williamstown, New Jersey. With $677 million in assets as of December 31, 2014, First Bank offers a traditional range of deposit and loan products to individuals and businesses throughout the New York City to Philadelphia, PA corridor. 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 may be identified by use of terms such as "estimates", "believes", "intends", "expects", "projects", or similar expressions. 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 Annual Report on Form 10K 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. These risks and uncertainties should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. First Bank does not undertake, and specifically disclaims any obligation, to publicly release the result of any revisions which may be made to any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.
FIRST BANK AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(in thousands, except share data, unaudited)
December 31,
--------------------
2014 2013
--------- ---------
Assets
Cash and due from banks $ 4,352 $ 9,787
Interest bearing deposits with banks 16,018 13,927
--------- ---------
Cash and cash equivalents 20,370 23,714
--------- ---------
Interest bearing time deposits with banks 5,183 4,903
Investment securities available for sale 40,390 65,017
Investment securities held to maturity (fair value of
$34,734 and $15,353 at December 31, 2014 and 2013,
respectively) 34,273 15,414
Restricted investment in bank stocks 1,304 1,131
Other investments 5,000 5,000
Loans, net of deferred fees and costs 547,759 339,975
Less: Allowance for loan losses 6,104 4,675
--------- ---------
Net loans 541,655 335,300
Premises and equipment, net 3,452 1,787
Other real estate owned, net 2,182 1,664
Accrued interest receivable 1,724 1,232
Bank-owned life insurance 14,147 8,805
Intangible assets, net 356 -
Deferred income taxes 6,864 2,352
Other assets 558 473
--------- ---------
Total assets $ 677,458 $ 466,792
========= =========
Liabilities and Stockholders' Equity
Deposits:
Non-interest bearing $ 91,972 $ 48,186
Interest bearing 504,510 350,927
--------- ---------
Total deposits 596,482 399,113
Long-term borrowings 14,000 14,000
Accrued interest payable 337 156
Other liabilities 1,880 1,016
--------- ---------
Total liabilities 612,699 414,285
--------- ---------
Stockholders' Equity:
Preferred stock, par value $2 per share; authorized
5,000,000 shares; no shares issued and outstanding - -
Common stock, par value $5 per share; authorized
20,000,000 shares; issued and outstanding 9,408,491
shares and 8,520,299 shares at December 31, 2014 and
2013, respectively 47,042 42,602
Additional paid-in capital 14,301 13,052
Retained earnings (accumulated deficit) 3,546 (2,290)
Accumulated other comprehensive loss (130) (857)
--------- ---------
Total stockholders' equity 64,759 52,507
--------- ---------
Total liabilities and stockholders' equity $ 677,458 $ 466,792
========= =========
FIRST BANK AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except share data, unaudited)
Three Months Ended Year Ended
December 31, December 31,
--------------------- ---------------------
2014 2013 2014 2013
---------- ---------- ---------- ----------
Interest and Dividend Income
Investment securities - taxable $ 307 $ 303 $ 1,288 $ 969
Investment securities - tax-
exempt 86 52 291 138
Federal funds sold - - 2 -
Interest bearing deposits with
banks and other 53 55 233 173
Loans, including fees 6,807 4,127 23,536 15,340
---------- ---------- ---------- ----------
Total interest and dividend
income 7,253 4,537 25,350 16,620
---------- ---------- ---------- ----------
Interest Expense
Deposits 1,123 874 3,919 3,215
Borrowings 55 55 218 199
---------- ---------- ---------- ----------
Total interest expense 1,178 929 4,137 3,414
---------- ---------- ---------- ----------
Net interest income 6,075 3,608 21,213 13,206
Provision for loan losses 947 733 2,438 1,543
---------- ---------- ---------- ----------
Net interest income after
provision for loan losses 5,128 2,875 18,775 11,663
---------- ---------- ---------- ----------
Non-Interest Income
Service fees on deposit accounts 30 18 136 75
Loan fees 4 4 22 33
Title insurance fees 14 7 19 30
Income from bank-owned life
insurance 111 41 342 151
Gains on sale of investment
securities, net - - 34 18
Gains on sale of loans held for
sale 246 - 283 134
Gain on acquisition of Heritage
Community Bank - - 2,606 -
Gains on recovery of acquired
loans 472 - 1,426 -
Other non-interest income 89 32 231 71
---------- ---------- ---------- ----------
Total non-interest income 966 102 5,099 512
---------- ---------- ---------- ----------
Non-Interest Expense
Salaries and employee benefits 2,214 1,251 7,904 4,751
Occupancy and equipment 552 369 1,981 1,410
Legal fees 100 18 346 203
Other professional fees 252 179 1,091 562
Regulatory fees 150 83 539 253
Directors' fees 94 57 330 231
Data processing 187 107 730 413
Marketing and advertising 191 148 511 347
Travel and entertainment 75 60 238 163
Insurance 58 29 167 114
Other real estate owned expense,
net 135 34 435 385
Merger-related expenses 11 37 590 88
Other expense 349 98 958 468
---------- ---------- ---------- ----------
Total non-interest expense 4,368 2,470 15,820 9,388
---------- ---------- ---------- ----------
Income Before Income Taxes 1,726 507 8,054 2,787
Income tax expense 1,140 196 2,218 1,079
---------- ---------- ---------- ----------
Net Income $ 586 $ 311 $ 5,836 $ 1,708
========== ========== ========== ==========
Basic earnings per share $ 0.06 $ 0.05 $ 0.63 $ 0.33
Diluted earnings per share $ 0.06 $ 0.05 $ 0.63 $ 0.33
Basic weighted average common
shares outstanding 9,408,491 6,436,965 9,244,005 5,128,061
Diluted weighted average common
shares outstanding 9,466,647 6,509,078 9,309,134 5,172,233
FIRST BANK AND SUBSIDIARIES
AVERAGE BALANCE SHEETS WITH INTEREST AND AVERAGE RATES
(unaudited)
Three Months Ended December 31,
--------------------------------------------------------
2014 2013
--------------------------- ---------------------------
Average Average
Average Rate Average Rate
Balance Interest (5) Balance Interest (5)
-------- -------- ------- -------- -------- -------
(dollars in thousands)
Interest earning
assets
Investment
securities (1)
(2) $ 74,087 $ 423 2.27% $ 68,032 $ 373 2.17%
Loans (3) 521,216 6,807 5.18% 322,601 4,127 5.08%
Interest bearing
deposits with
banks 29,679 24 0.32% 35,502 26 0.29%
Restricted
investment in
bank stocks 1,305 13 3.95% 1,131 10 3.51%
Other investments 5,000 16 1.27% 5,000 19 1.51%
-------- -------- -------- --------
Total interest
earning assets
(2) 631,287 7,283 4.58% 432,266 4,555 4.18%
Allowance for loan
losses (5,718) (4,640)
Non-interest
earning assets 38,849 21,268
-------- --------
Total assets $664,418 $448,894
======== ========
Interest bearing
liabilities
Interest bearing
demand deposits $ 26,525 $ 39 0.58% $ 11,921 $ 10 0.33%
Money market
deposits 100,402 157 0.62% 78,340 130 0.66%
Savings deposits 105,456 158 0.59% 91,545 172 0.75%
Time deposits 259,266 769 1.18% 163,785 562 1.36%
-------- -------- -------- --------
Total interest
bearing deposits 491,649 1,123 0.91% 345,591 874 1.00%
Borrowings 14,000 55 1.56% 14,014 55 1.56%
-------- -------- -------- --------
Total interest
bearing
liabilities 505,649 1,178 0.92% 359,605 929 1.02%
Non-interest
bearing deposits 91,565 45,632
Other liabilities 1,930 1,924
Stockholders'
equity 65,274 41,733
-------- --------
Total liabilities
and
stockholders'
equity $664,418 $448,894
======== ========
Net interest
income/interest
rate spread (2) 6,105 3.66% 3,626 3.16%
Net interest
margin (4) 3.84% 3.33%
Tax-equivalent
adjustment (2) (30) (18)
-------- --------
Net interest
income $ 6,075 $ 3,608
======== ========
------------------
(1) Average balances of investment securities available for sale are based
on amortized cost.
(2) Interest and average rates are tax equivalent using a Federal income tax
rate of 34 percent.
(3) Average balances of loans include loans on nonaccrual status.
(4) Net interest income divided by average total interest earning assets.
FIRST BANK AND SUBSIDIARIES
AVERAGE BALANCE SHEETS WITH INTEREST AND AVERAGE RATES
(unaudited)
Year Ended December 31,
--------------------------------------------------------
2014 2013
--------------------------- ---------------------------
Average Average
Average Rate Average Rate
Balance Interest (5) Balance Interest (5)
-------- -------- ------- -------- -------- -------
(dollars in thousands)
Interest earning
assets
Investment
securities (1)
(2) $ 73,741 $ 1,678 2.28% $ 59,118 $ 1,154 1.95%
Loans (3) 456,105 23,536 5.16% 294,751 15,340 5.20%
Federal funds sold
and interest
bearing deposits
with banks 31,508 101 0.32% 21,861 61 0.28%
Restricted
investment in
bank stocks 1,337 53 3.96% 997 34 3.41%
Other investments 5,000 81 1.62% 5,000 78 1.56%
-------- -------- -------- --------
Total interest
earning assets
(2) 567,691 25,449 4.48% 381,727 16,667 4.37%
Allowance for loan
losses (5,138) (4,405)
Non-interest
earning assets 35,258 19,652
-------- --------
Total assets $597,811 $396,974
======== ========
Interest bearing
liabilities
Interest bearing
demand deposits $ 19,380 $ 84 0.43% $ 11,556 $ 40 0.35%
Money market
deposits 91,121 521 0.57% 71,134 488 0.69%
Savings deposits 113,415 713 0.63% 87,471 670 0.77%
Time deposits 218,934 2,601 1.19% 140,669 2,017 1.43%
-------- -------- -------- --------
Total interest
bearing
deposits 442,850 3,919 0.88% 310,830 3,215 1.03%
Borrowings 14,000 218 1.56% 11,843 199 1.68%
-------- -------- -------- --------
Total interest
bearing
liabilities 456,850 4,137 0.91% 322,673 3,414 1.06%
Non-interest
bearing deposits 77,831 39,030
Other liabilities 1,600 1,164
Stockholders'
equity 61,530 34,107
-------- --------
Total
liabilities and
stockholders'
equity $597,811 $396,974
======== ========
Net interest
income/interest
rate spread (2) 21,312 3.57% 13,253 3.31%
Net interest
margin (4) 3.75% 3.47%
Tax-equivalent
adjustment (2) (99) (47)
-------- --------
Net interest
income $ 21,213 $ 13,206
======== ========
------------------
(1) Average balances of investment securities available for sale are based
on amortized cost.
(2) Interest and average rates are tax equivalent using a Federal income tax
rate of 34 percent.
(3) Average balances of loans include loans on nonaccrual status.
(4) Net interest income divided by average total interest earning assets.
(5) Average rates are annualized.
FIRST BANK AND SUBSIDIARIES
QUARTERLY FINANCIAL HIGHLIGHTS
(in thousands, except share data, unaudited)
4Q2014 3Q2014 2Q2014 1Q2014 4Q2013
--------- --------- --------- --------- ---------
EARNINGS
Net interest income $ 6,075 $ 5,501 $ 5,415 $ 4,222 $ 3,608
Provision for loan
losses 947 977 336 178 733
Non-interest income 966 1,078 316 2,739 102
Non-interest
expense 4,368 4,112 4,119 3,221 2,470
Income tax expense 1,140 401 353 324 196
Net income 586 1,089 923 3,238 311
PER SHARE DATA
Basic earnings per
share $ 0.06 $ 0.12 $ 0.10 $ 0.37 $ 0.05
Diluted earnings
per share 0.06 0.12 0.10 0.37 0.05
Book value 6.88 6.79 6.68 6.54 6.16
Tangible book value 6.85 6.75 6.64 6.50 6.16
PERFORMANCE RATIOS
Return on average
assets 0.35% 0.69% 0.61% 2.63% 0.27%
Return on average
equity 3.56% 6.77% 5.95% 23.79% 2.96%
Net interest
margin, tax
equivalent basis 3.84% 3.72% 3.81% 3.61% 3.33%
Efficiency ratio 75.06% 70.12% 68.98% 74.20% 69.85%
MARKET DATA
Market value per
share, period end $ 6.24 $ 6.15 $ 6.00 $ 6.50 $ 6.34
Market value / book
value (x) 0.91 0.91 0.90 0.99 1.03
Common shares
outstanding,
period-end 9,408 9,408 9,408 9,395 8,520
Market
capitalization $ 58,706 $ 57,859 $ 56,448 $ 61,068 $ 54,017
CAPITAL & LIQUIDITY
Tangible equity /
assets 9.51% 9.87% 10.23% 10.19% 11.25%
Equity / assets 9.56% 9.93% 10.29% 10.26% 11.25%
Loans / deposits 91.83% 89.63% 87.73% 86.27% 85.18%
ASSET QUALITY
Net charge offs $ 354 $ 490 $ 165 $ 124 $ 600
Annualized net
charge offs /
average loans 0.27% 0.41% 0.14% 0.14% 0.74%
Nonperforming loans $ 7,112 $ 4,666 $ 3,411 $ 3,175 $ 3,336
Nonperforming loans
/ total loans 1.30% 0.92% 0.73% 0.70% 0.98%
Nonperforming
assets $ 9,394 $ 7,014 $ 5,745 $ 5,539 $ 5,087
Nonperforming
assets / total
assets 1.39% 1.09% 0.94% 0.92% 1.09%
Allowance for loan
losses / total
loans 1.11% 1.09% 1.08% 1.05% 1.38%
PERIOD-END DATA
Total assets $ 677,458 $ 643,499 $ 610,645 $ 599,212 $ 466,792
Total loans 547,759 505,008 466,878 450,424 339,975
Total deposits 596,482 563,433 532,147 522,102 399,113
Total stockholders'
equity 64,759 63,895 62,847 61,453 52,507
Full-time
equivalent
employees 94 89 95 91 59
CONTACT:
Patrick L. Ryan
President and CEO
(609) 643-0168
patrick.ryan@firstbanknj.com
