First Resource Bank Announces Third Quarter Results

EXTON, Pa., Oct. 21, 2013 /PRNewswire/ --  First Resource Bank (OTC Bulletin Board: FRSB) announced net income for the three months ended September 30, 2013 was $263,366 as compared to $261,407 for the quarter ended June 30, 2013 and net income of $226,310 for the quarter ended September 30, 2012. After accounting for preferred stock dividends, net income available to common shareholders for the quarter ended September 30, 2013 was $250,659. This compares to net income available to common shareholders of $248,700 for the quarter ended June 30, 2013 and $187,499 for the quarter ended September 30, 2012.

Preferred stock dividends continue to accrue at the lowest rate possible, 1%, under the Small Business Lending Fund due to the Bank's strong loan growth over the past few years. Preferred stock dividend costs declined 76% from $38,811 for the quarter ended September 30, 2012 to $12,707 for the quarter ended September 30, 2013. 

Net income for the nine months ended September 30, 2013 was $764,477 as compared to $683,302 for the same period in the prior year.  After accounting for preferred stock dividends, net income available to common shareholders for the nine months ended September 30, 2013 was $726,356 as compared to $528,729 for the same period in the prior year. Preferred stock dividends declined $116,452, or 75% when comparing the first nine months of 2013 to 2012.

Glenn B. Marshall, President & CEO, stated, "Year to date results are on track for the most profitable year in our history.  These strong results enable us to grow our branch footprint next year into the West Chester market. We are very excited about the upcoming Exton branch relocation and the construction of our second branch on top of record earnings this year."

Net interest income was $1,392,110 for the quarter ended September 30, 2013 as compared to $1,370,837 for the previous quarter.  The net interest margin declined 22 basis points from 3.89% for the quarter ended June 30, 2013 to 3.67% for the quarter ended September 30, 2013. The overall yield on interest earning assets decreased 25 basis points during the third quarter due to higher cash and short term investments as strong deposit growth exceeded loan growth. Loan yields declined 4 basis points during the third quarter due to continued intense competition for new loans, which has slowed loan growth, as well as the scheduled re-pricing of existing loans during a time of historically low interest rates. The cost of interest bearing liabilities declined 4 basis points during the third quarter, led by a 5 basis point decline in the cost of certificates of deposit. 

Deposits increased $8.0 million, or 6.2% from $130.4 million at June 30, 2013 to $138.4 million at September 30, 2013. During the third quarter, certificates of deposit decreased $735 thousand, or 0.9%, from $78.5 million at June 30, 2013 to $77.8 million at September 30, 2013. Money market deposits increased $7.2 million, or 16.7%, from $43.1 million at June 30, 2013 to $50.4 million at September 30, 2013. Non-interest bearing deposits increased $835 thousand, or 12.9% from $6.4 million at June 30, 2013 to $7.3 million at September 30, 2013.

The loan portfolio grew $336 thousand, or 0.3%, during the third quarter from $134.0 million at June 30, 2013 to $134.4 million at September 30, 2013. Significant growth in the commercial real estate portfolio was offset by payoffs of construction loans during the quarter.

The following table illustrates the composition of the loan portfolio:

The allowance for loan losses to total loans was 0.93% at September 30, 2013, as compared to 1.04% at June 30, 2013, 1.12% at December 31, 2012 and 1.21% at September 30, 2012. Non-performing assets, which include non-performing loans of $2.8 million and other real estate owned of $799 thousand, totaled $3.6 million at September 30, 2013. Non-performing assets to total assets decreased from 2.55% at June 30, 2013 to 2.25% at September 30, 2013 due to sales of other real estate owned as well as an increase in total assets. 

Non-interest income for the quarter ended September 30, 2013 was $86,876, as compared to $88,030 for the previous quarter.

Non-interest income for the nine months ended September 30, 2013 was $267,939, as compared to $188,151 for the same period in the prior year.  This increase was due to the addition of rental income on a building acquired in August 2012 to house the future branch location in West Chester.

Non-interest expense increased $49,400, or 5.2%, in the three months ended September 30, 2013 as compared to the three months ended June 30, 2013. This increase was due to higher salaries and benefits, higher depreciation costs and higher other non interest expenses.

Non-interest expense increased $260,381, or 9.9%, for the nine months ended September 30, 2013 as compared to the nine months ended September 30, 2012. This increase was mainly due to higher salaries and benefits associated with a higher headcount, higher depreciation due to the purchase of two buildings over the past year and higher other real estate owned expenses, offset by lower professional fees.

Selected Financial Data:

About First Resource Bank
First Resource Bank is a locally owned and operated Pennsylvania state-chartered bank, serving the banking needs of businesses, professionals and individuals in Chester County, Pennsylvania. The Bank offers a full range of deposit and credit services with a high level of personalized service. First Resource Bank also offers a broad range of traditional financial services and products, competitively priced and delivered in a responsive manner to small businesses, professionals and residents in the local market. For additional information visit our website at www.firstresourcebank.com. Member FDIC.

This press release contains statements that are not of historical facts and may pertain to future operating results or events or management's expectations regarding those results or events.  These are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities and Exchange Act of 1934.  These forward-looking statements may include, but are not limited to, statements about our plans, objectives, expectations and intentions and other statements contained in this press release that are not historical facts.  When used in this press release, the words "expects", "anticipates", "intends", "plans", "believes", "seeks", "estimates", or words of similar meaning, or future or conditional verbs, such as "will", "would", "should", "could", or "may" are generally intended to identify forward-looking statements.  These forward-looking statements are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are either beyond our control or not reasonably capable of predicting at this time.  In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change. Actual results may differ materially from the results discussed in these forward-looking statements.  Readers of this press release are accordingly cautioned not to place undue reliance on forward-looking statements.  First Resource Bank disclaims any intent or obligation to update publicly any of the forward-looking statements herein, whether in response to new information, future events or otherwise.                                

SOURCE First Resource Bank