FCOB 1st Colonial Bancorp Inc (PK)

1st Colonial Bancorp, Inc. (OTCQB:FCOB), holding company of 1st Colonial Community Bank, today reported that its net income for the three months ended September 30, 2013 was $256,000 ($0.09 per share) compared to $417,000 ($0.13 per share) for the three months ended September 30, 2012. Net interest income increased $47,000 resulting from growth in the average balance sheet of $32 million. However, non-interest income decreased by $483,000, as fees generated by the origination and sale of residential mortgage loans and SBA loans decreased $325,000 and $139,000, respectively.

Non-interest expense increased by $139,000 for the three months ended September 30, 2013 over the same period in 2012, primarily due to an increase in costs associated with problem loans by $93,000 (from $72,000 in 2012 to $165,000 in 2013) and an increase in losses on the sale of assets of $40,000 (from $27,000 in 2012 to $67,000 in 2013).

The decrease in non-interest income and increase in non-interest expense were partially offset by a $325,000 decrease in our provision for loan losses for the quarter ended September 30, 2013 from the quarter ended September 30, 2012 reflecting the improvement in our loan portfolio, and by an $89,000 decrease in our tax expense.

Net income for the nine months ended September 30, 2013 was $720,000 ($0.22 per share), compared to $1,039,000 ($0.31 per share) for the nine months ended September 30, 2012.

Gerry Banmiller, President and Chief Executive Officer, commented, “The increase in residential interest rates negatively impacted the residential loan demand which in turn caused a decrease in the Bank’s overall performance in the third quarter compared to the prior year.”

At September 30, 2013, 1st Colonial also reported $315.9 million in total assets, $285.6 million in deposits and $188.4 million in loans. These amounts reflect increases of $11.7 million in assets and $13.4 million in deposits from December 31, 2012. Also increasing were loans by $4.2 million and other borrowings decreased by $1.5 million.

Net interest income of $6,796,000 for the nine months ended September 30, 2013 was $219,000 lower than the net interest income of $7,015,000 for the nine months ended September 30, 2012. This was due primarily to a decrease of 0.46% in net interest spread to 2.98% for the nine months ended September 30, 2013 compared to 3.44% for the nine months ended September 30, 2012.

1st Colonial’s provision for loan losses was $800,000 for the nine months ended September 30, 2013 compared to a provision for loan losses of $1,375,000 for the nine months ended September 30, 2012.

Non-interest income of $1,713,000 for the nine months ended September 30, 2013 was $93,000 lower than non-interest income for the nine months ended September 30, 2012. Fees generated by the origination and sale of residential mortgage loans decreased by $87,000 and fees generated from the sale of SBA loans increased by $46,000. There were no gains or losses on investment securities sold for the nine months ended September 30, 2013 compared to $30,000 in gains from the sale of investments during the nine months ended September 30, 2012.

Non-interest expense for the nine months ended September 30, 2013 increased $694,000 from the comparable period in 2012. Salaries and benefits increased by $163,000 due to increases in staff in the compliance, residential lending and SBA departments. Also increasing were costs associated with problem loans by $300,000 and data processing expenses by $50,000 due to increased customer volume.

The company also reported that its shareholders equity and book value per share decreased since December 31, 2012 due to a shift from an unrealized gain to an unrealized loss in the investment portfolio, as interest rates moved higher during the current year.

Highlights as of September 30, 2013 and December 31, 2012, and comparing the three and nine months ended September 30, 2013 and the three and nine months ended September 30, 2012, respectively, include the following (dollars in thousands, except per share data):

        At At $ increase/ % increase/

September 30, 2013

December 31, 2012

(decrease)

(decrease)

  Total assets $ 315,865 $ 304,196 $ 11,669 3.8 %   Total loans 188,408 184,185 4,223 2.3 %   Investments 99,442 99,198 244 0.2 %   Total deposits 285,634 272,204 13,430 4.9 %  

Shareholders' equity

24,792 25,312 (520 ) -2.1 %  

Book value per share (1)

7.41 7.57 (0.16 ) -2.1 %  

 

For the nine months ended $ increase/ % increase/

September 30, 2013

September 30, 2012

(decrease)

(decrease)

  Net interest income $ 6,796 $ 7,015 $ (219 ) -3.1 %   Provision for loan losses 800 1,375 (575 ) -41.8 %   Other income 1,713 1,806 (93 ) -5.1 %   Non-interest expense 6,722 6,028 694 11.5 %   Tax expense 267 379 (112 ) -29.6 %   Net income 720 1,039 (319 ) -30.7 %   Earnings per share, diluted (1) $ 0.22 $ 0.31 $ (0.09 ) -29.0 %   For the three months ended $ increase/ % increase/

September 30, 2013

September 30, 2012

(decrease)

(decrease)

  Net interest income $ 2,338 $ 2,291 $ 47 2.1 %   Provision for loan losses 200 525 (325 ) -61.9 %   Other income 421 904 (483 ) -53.4 %   Non-interest expense 2,219 2,080 139 6.7 %   Tax expense 84 173 (89 ) -51.4 %   Net income 256 417 (161 ) -38.6 %   Earnings per share, diluted (1) $ 0.09 $ 0.13 $ ( 0.04 ) -30.8 %

(1) Adjusted to give effect to the 5% stock dividend distributed to shareholders on April 15, 2013.

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 branches in the New Jersey communities of Westville and Cinnaminson. 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, lack of liquidity; varying and unanticipated costs of collection with respect to nonperforming loans; 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 by employees, customers or outsiders; 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.

1st Colonial Bancorp, Inc.Gerry Banmiller, 856-858-8402