02/02/2015 | Press release | Archived content
HAMILTON, NJ -- (Marketwired) -- 02/02/15 -- 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
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).
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. RyanPresident and CEO(609) [email protected]
Source: First Bank