HAMILTON, NJ--(Marketwired - May 04, 2015) - First Bank (NASDAQ: FRBA) today announced first quarter 2015 results. Net income for the quarter was $1.7 million or $0.18 per diluted share, compared to net income of $2.6 million or $0.29 per diluted share for the first quarter of 2014 and $1.2 million or $0.13 per diluted share for the fourth quarter of 2014.
First quarter net income for 2015 included $624,000 in non-interest income associated with gains on recoveries of acquired loans. First quarter 2014 results included $2.6 million in non-interest income from the gain on acquisition of Heritage Community Bank ("HCB"). Book value per share was $7.09 at the end of the first quarter 2015, an increase of 3.1% compared to book value of $6.88 at year-end.
President and Chief Executive Officer Patrick L. Ryan discussed the results: "We are pleased to announce another good quarter. After two very strong quarters for loan growth at the end of last year, we saw a pause in loan growth for Q1 as we looked to rebuild our pipeline. It's nice to see our hard work sourcing new business is paying off and pipeline levels are back near historic highs. We anticipate good loan growth throughout the rest of 2015. Even without the benefit of our normal loan growth, earnings improved nicely thanks to improving asset quality metrics, a steady margin, and continued gains from the recovery of acquired loans.
"Continued strong deposit growth has pushed liquidity up to very high levels. We will be looking to deploy that excess liquidity throughout the next couple of quarters. Until that happens, we expect our margin will be hurt as the funds held overnight earn very little and investment opportunities remain limited with rates at historically low levels. Competitive pressures on loan pricing will be an additional headwind for the margin. Despite these margin pressures, overall profit metrics can and should continue to improve as we look to leverage economies of scale while we grow."
Ryan continued, "We achieved important strategic milestones in the early part of 2015. We finalized a Tier 2 capital raise in April by raising $22 million of subordinated debt. With a coupon of 6.75% fixed for the first five years, our after-tax cost for the new capital should be close to 4.75%. And, we were able to avoid the dilution of a common equity or preferred equity capital raise. We expect the additional capital, together with internally generated retained earnings, should provide a strong enough base for an additional two or three years of organic growth. Importantly, we expect we can reach the strategically-important $1.0 billion asset threshold during that time period. We also received approval for our new branch and loan production office in Trevose, PA. Our team has been working very hard, and we expect to be fully operational in May. We have high hopes for expansion in this Bucks County market as the third growth market within our New York City to Philadelphia corridor."
First Quarter 2015 Highlights
Income Statement results when comparing year-to-year periods reflect the impact of strong organic growth and the acquisition of HCB. Income tax expense, as reflected in the Consolidated Statements of Income, for the first and fourth quarters of 2014 reflects First Bank's annual effective tax rate for 2014.
- Balance Sheet
- Total assets at March 31, 2015 were $730.9 million, an increase of $53.5 million or 7.9% compared to December 31, 2014, and an increase of $131.7 million or 22.0% compared to March 31, 2014.
- Total loans were $545.1 million at March 31, 2015, a decrease of $2.7 million or 0.5% compared to December 31, 2014 and an increase of $94.7 million or 21.0% compared to March 31, 2014.
- Loan portfolio breakdown at March 31, 2015:
- Acquisition, Construction and Development (ACD) loans equaled 6.1% of total loans
- Commercial Real Estate, Investor (CREI; including multi-family) loans equaled 41.9% of total loans
- Commercial Real Estate, Owner-Occupied (CREO) loans equaled 22.3% of total loans
- Commercial and Industrial (C&I) loans equaled 17.3% of total loans
- Residential, Consumer and Other loans equaled 12.4% of total loans
- Total deposits reached $648.3 million, an increase of $51.8 million or 8.7% compared to December 31, 2014 and an increase of $126.2 million or 24.2% compared to March 31, 2014. Non-interest bearing deposits totaled $89.5 million at March 31, 2015 or 13.8% of total deposits.
- Stockholders' equity increased to $66.7 million at March 31, 2015.
- Book value per share was $7.09 at March 31, 2015 compared to $6.88 per share at December 31, 2014 and $6.54 per share at March 31, 2014. Tangible book value per share was $7.05 at March 31, 2015, compared to $6.85 per share at December 31, 2014 and $6.50 per share at March 31, 2014.
- Quarterly and Year to Date Income Statement
- Net interest income for the first quarter of 2015 totaled $6.13 million, an increase of $57 thousand or 0.9% compared to $6.08 million for the fourth quarter of 2014 and an increase of $1.9 million or 45.2% compared to the first quarter of 2014.
- Non-interest income for the first quarter of 2015 totaled $832 thousand compared to $966 thousand for the fourth quarter of 2014. Gains on recovery of acquired loans totaled $624 thousand in the first quarter of 2015 compared to $472 thousand for the fourth quarter of 2014. When compared to the first quarter of 2014 non-interest income decreased $1.9 million. Non-interest income for the first quarter of 2014 included the gain on acquisition of HCB of $2.6 million.
- Non-interest expense for the first quarter of 2015 totaled $4.43 million, an increase of $66 thousand or 1.5% compared to $4.37 million for the fourth quarter of 2014 and an increase of $1.2 million or 37.7% compared to the first quarter of 2014.
- Pre-tax income for the first quarter of 2015 totaled $2.5 million, an increase of $748 thousand or 43.3% compared to $1.7 million for the fourth quarter of 2014 and a decrease of $1.1 million or 30.5% compared to the first quarter of 2014, based upon the gain on acquisition of HCB of $2.6 million in the first quarter of 2014.
- Net income for the first quarter of 2015 totaled $1.7 million, an increase of $478 thousand or 38.2% compared to $1.2 million in the fourth quarter of 2014, and a decrease of $853 thousand or 33.0% compared to the first quarter of 2014.
- Diluted earnings per share for the first quarter of 2015 totaled $0.18, an increase of $0.05 per share compared to $0.13 per share in the fourth quarter of 2014, and a decrease of $0.11 per share compared to the first quarter of 2014.
- The provision for loan losses in the first quarter of 2015 totaled $56 thousand, a decrease of $891 thousand or 94.1% compared to $947 thousand for the fourth quarter of 2014 and a decrease of $122 thousand or 68.5% compared to the first quarter of 2014.
- Pre-provision net revenue(1) for the first quarter of 2015 was $2.1 million, a decrease of $156 thousand or 7.1% compared to $2.2 million in the fourth quarter of 2014, and an increase of $693 thousand or 50.8% compared to the first quarter of 2014.
- Net interest income for the first quarter of 2015 totaled $6.13 million, an increase of $57 thousand or 0.9% compared to $6.08 million for the fourth quarter of 2014 and an increase of $1.9 million or 45.2% compared to the first quarter of 2014.
- Other Items
- The tax equivalent net interest margin (NIM) for the first quarter of 2015 was 3.74% compared to 3.84% for the fourth quarter of 2014 and 3.61% for the first quarter of 2014.
- Non-performing assets ("NPAs") were $7.5 million or 1.03% of total assets at March 31, 2015 compared to $9.4 million or 1.39% of total assets at December 31, 2014.
- Non-accrual loans totaled $4.9 million or 0.90% of total loans at March 31, 2015 compared to non-accrual loans of $4.7 million or 0.85% of total loans at December 31, 2014.
- Loans 30-89 days past due totaled $6.7 million at March 31, 2015 compared to $5.5 million at December 31, 2014. We had $513 thousand in loans over 90 days past due and still accruing at March 31, 2015 compared to $2.4 million in such loans at December 31, 2014.
- Other real estate owned (including other repossessed assets) totaled $2.1 million at March 31, 2015 compared to $2.3 million at December 31, 2014.
- Regulatory capital ratios at March 31, 2015:
- Tier 1 leverage ratio of 9.46%
- Tier 1 Risk-Based capital ratio of 10.73%.
- Total Risk-Based capital ratio of 11.74%.
- Common Equity Tier 1 capital ratio of 10.73%.
- The allowance for loan losses (ALLL) to total loans at March 31, 2015 was 1.13% compared to 1.11% at December 31, 2014.
- 94 full-time equivalent employees (FTEs) at March 31, 2015, and December 31, 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 $731 million in assets as of March 31, 2015, 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 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.
(1) A non-GAAP metric defined by SNL Financial as net interest income before provision for loan losses plus non-interest income excluding non-ordinary items (e.g. gains on sale of investment securities, gains on recovery of acquired loans, and bargain purchase gains) minus non-interest expense excluding non-ordinary items (e.g. merger related expenses, or other one-time, non-ordinary costs).
FIRST BANK AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(in thousands, except share data, unaudited)
March 31, December 31,
2015 2014
---------------- -----------------
Assets
Cash and due from banks $ 11,680 $ 4,352
Interest bearing deposits with banks 63,226 16,018
---------------- -----------------
Cash and cash equivalents 74,906 20,370
---------------- -----------------
Interest bearing time deposits with banks 5,074 5,183
Investment securities available for sale 39,101 40,390
Investment securities held to maturity
(fair value of $38,450 at March 31, 2015
and $34,734 at December 31, 2014) 37,642 34,273
Restricted investment in bank stocks 1,304 1,304
Other investments 5,000 5,000
Loans, net of deferred fees and costs 545,074 547,759
Less: Allowance for loan losses 6,181 6,104
---------------- -----------------
Net loans 538,893 541,655
Premises and equipment, net 3,429 3,452
Other real estate owned, net 2,007 2,182
Accrued interest receivable 1,680 1,724
Bank-owned life insurance 14,252 14,147
Intangible assets, net 337 356
Deferred income taxes 6,749 6,864
Other assets 561 558
---------------- -----------------
Total assets $ 730,935 $ 677,458
================ =================
Liabilities and Stockholders' Equity
Deposits:
Non-interest bearing $ 89,480 $ 91,972
Interest bearing 558,836 504,510
---------------- -----------------
Total deposits 648,316 596,482
Long-term borrowings 14,000 14,000
Accrued interest payable 354 337
Other liabilities 1,580 1,880
---------------- -----------------
Total liabilities 664,250 612,699
---------------- -----------------
Stockholders' Equity:
Preferred stock, par value $2 per share;
5,000,000 shares authorized; no shares
outstanding - -
Common stock, par value $5 per share;
20,000,000 shares authorized; 9,408,491
shares outstanding 47,042 47,042
Additional paid-in capital 14,325 14,301
Retained earnings 5,275 3,546
Accumulated other comprehensive income
(loss) 43 (130)
---------------- -----------------
Total stockholders' equity 66,685 64,759
---------------- -----------------
Total liabilities and stockholders'
equity $ 730,935 $ 677,458
================ =================
FIRST BANK AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except share data, unaudited)
Three Months Ended
March 31,
---------------------------------
2015 2014
---------------- ----------------
Interest and Dividend Income
Investment securities - taxable $ 295 $ 367
Investment securities - tax-exempt 92 64
Federal funds sold - 1
Interest bearing deposits with banks and
other 61 58
Loans, including fees 6,996 4,662
---------------- ----------------
Total interest and dividend income 7,444 5,152
---------------- ----------------
Interest Expense
Deposits 1,258 876
Borrowings 54 54
---------------- ----------------
Total interest expense 1,312 930
---------------- ----------------
Net interest income 6,132 4,222
Provision for loan losses 56 178
---------------- ----------------
Net interest income after provision for
loan losses 6,076 4,044
---------------- ----------------
Non-Interest Income
Service fees on deposit accounts 28 27
Loan fees 10 2
Income from bank-owned life insurance 106 63
Gains on sale of loans held for sale - 14
Gain on acquisition of Heritage Community
Bank - 2,606
Gains on recovery of acquired loans 624 -
Other non-interest income 64 27
---------------- ----------------
Total non-interest income 832 2,739
---------------- ----------------
Non-Interest Expense
Salaries and employee benefits 2,231 1,517
Occupancy and equipment 546 412
Legal fees 92 71
Other professional fees 417 272
Regulatory fees 147 86
Directors' fees 110 59
Data processing 189 145
Marketing and advertising 118 92
Travel and entertainment 56 34
Insurance 54 32
Other real estate owned expense, net 234 120
Merger-related expenses - 207
Other expense 240 174
---------------- ----------------
Total non-interest expense 4,434 3,221
---------------- ----------------
Income Before Income Taxes 2,474 3,562
Income tax expense 745 980
---------------- ----------------
Net Income $ 1,729 $ 2,582
================ ================
Basic earnings per share $ 0.18 $ 0.29
Diluted earnings per share $ 0.18 $ 0.29
Basic weighted average common shares
outstanding 9,408,491 8,753,684
Diluted weighted average common shares
outstanding 9,467,977 8,839,284
FIRST BANK AND SUBSIDIARIES
AVERAGE BALANCE SHEETS WITH INTEREST AND AVERAGE RATES
(unaudited)
Three Months Ended March 31,
-----------------------------------------------------------
2015 2014
----------------------------- -----------------------------
Average Average Average Average
Balance Interest Rate (5) Balance Interest Rate (5)
--------- ---------- -------- --------- ---------- --------
(dollars in thousands)
Interest earning
assets
Investment
securities (1)
(2) $ 74,361 $ 438 2.39% $ 79,624 $ 453 2.31%
Loans (3) 548,014 6,996 5.18% 368,496 4,662 5.13%
Federal funds
sold and
interest
bearing
deposits with
banks 41,806 30 0.29% 22,590 23 0.41%
Restricted
investment in
bank stocks 1,305 15 4.66% 1,188 14 4.78%
Other
investments 5,000 16 1.30% 5,000 22 1.78%
--------- ---------- --------- ----------
Total interest
earning
assets (2) 670,486 7,495 4.53% 476,898 5,174 4.40%
Allowance for
loan losses (6,289) (4,775)
Non-interest
earning assets 36,071 27,825
--------- ---------
Total assets $700,268 $499,948
========= =========
Interest bearing
liabilities
Interest bearing
demand deposits $ 34,588 $ 61 0.72% $ 13,531 $ 11 0.33%
Money market
deposits 103,979 165 0.64% 79,302 120 0.61%
Savings deposits 99,691 146 0.59% 103,428 181 0.71%
Time deposits 293,414 886 1.22% 177,762 564 1.29%
--------- ---------- --------- ----------
Total interest
bearing
deposits 531,672 1,258 0.96% 374,023 876 0.95%
Borrowings 14,046 54 1.56% 14,000 54 1.56%
--------- ---------- --------- ----------
Total interest
bearing
liabilities 545,718 1,312 0.98% 388,023 930 0.97%
Non-interest
bearing
deposits 86,666 55,421
Other
liabilities 1,905 1,308
Stockholders'
equity 65,979 55,196
--------- ---------
Total
liabilities
and
stockholders'
equity $700,268 $499,948
========= =========
Net interest
income/interest
rate spread (2) 6,183 3.55% 4,244 3.43%
Net interest
margin (2) (4) 3.74% 3.61%
Tax-equivalent
adjustment (2) (51) (22)
---------- ----------
Net interest
income $ 6,132 $ 4,222
========== ==========
(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)
1Q2015 4Q2014 3Q2014 2Q2014 1Q2014
---------- --------- --------- --------- ---------
EARNINGS
Net interest income $ 6,132 $ 6,075 $ 5,501 $ 5,415 $ 4,222
Provision for loan
losses 56 947 977 336 178
Non-interest income 832 966 1,078 316 2,739
Non-interest expense 4,434 4,368 4,112 4,119 3,221
Income tax expense 745 484 401 353 980
Net income 1,729 1,242 1,089 923 2,582
PER SHARE DATA
Basic earnings per
share $ 0.18 $ 0.13 $ 0.12 $ 0.10 $ 0.29
Diluted earnings per
share 0.18 0.13 0.12 0.10 0.29
Book value 7.09 6.88 6.79 6.68 6.54
Tangible book value 7.05 6.85 6.75 6.64 6.50
PERFORMANCE RATIOS
Return on average
assets (1) 1.00% 0.75% 0.70% 0.61% 2.07%
Return on average
equity (1) 10.63% 7.61% 6.83% 5.94% 18.71%
Net interest margin,
tax equivalent basis
(1) 3.74% 3.84% 3.72% 3.81% 3.61%
Efficiency ratio 69.94% 68.91% 70.12% 68.98% 69.43%
MARKET DATA
Market value per share,
period end $ 6.03 $ 6.24 $ 6.15 $ 6.00 $ 6.50
Market value / book
value 85.07% 90.65% 90.55% 89.82% 99.37%
Common shares
outstanding, period-
end 9,408 9,408 9,408 9,408 9,395
Market capitalization $ 56,730 $ 58,706 $ 57,859 $ 56,448 $ 61,068
CAPITAL & LIQUIDITY
Tangible equity /
assets 9.08% 9.51% 9.87% 10.23% 10.19%
Equity / assets 9.12% 9.56% 9.93% 10.29% 10.26%
Loans / deposits 84.08% 91.83% 89.63% 87.73% 86.27%
ASSET QUALITY
Net (recoveries) charge
offs $ (21) $ 354 $ 490 $ 165 $ 124
Nonperforming loans 5,414 7,112 4,666 3,411 3,175
Nonperforming assets 7,521 9,394 7,014 5,745 5,539
Net (recoveries) charge
offs / average loans
(1) (0.02%) 0.27% 0.41% 0.14% 0.14%
Nonperforming loans /
total loans 0.99% 1.30% 0.92% 0.73% 0.70%
Nonperforming assets /
total assets 1.03% 1.39% 1.09% 0.94% 0.92%
Allowance for loan
losses / total loans 1.13% 1.11% 1.09% 1.08% 1.05%
PERIOD-END DATA
Total assets $730,935 $ 677,458 $ 643,499 $ 610,645 $ 599,212
Total loans 545,074 547,759 505,008 466,878 450,424
Total deposits 648,316 596,482 563,433 532,147 522,102
Total stockholders'
equity 66,684 64,759 63,895 62,847 61,453
Full-time equivalent
employees 94 94 89 95 91
(1) Annualized.
CONTACT:
Patrick L. Ryan
President and CEO
(609) 643-0168
patrick.ryan@firstbanknj.com
