Income Statement Highlights include:
- Net income was $2.0 million for the second quarter of 2024
consistent with the same quarter in 2023 and a $371 thousand
increase from the first quarter of 2024.
- Net interest income for the quarter ended June 30, 2024 was
$5.9 million, a decrease of $1 million, or 15% from the same period
in 2023.
- Net interest margin for the quarter ended June 30, 2024 was
3.11%, a 15% decrease from the same period in 2023, and a 6%
decrease from the quarter ended March 31, 2024.
- Provision for credit losses was a net release of $439 thousand
for the second quarter of 2024 and was mainly related to a planned
loan sale. The provision for credit losses was $170 thousand for
the second quarter of 2023 and $155 thousand for the first quarter
of 2024.
- The allowance for credit losses was 1.50% of total loans as of
June 30, 2024 compared to 1.56% as of March 31, 2024 and 1.52% as
of December 31, 2023.
- Noninterest income for the quarter ended June 30, 2024 was $969
thousand, an increase of 39%, from the comparable quarter in 2023
and up 34% from the first quarter of 2024.
- Noninterest expense for the quarter ended June 30, 2024 was
$4.8 million, a decrease of 2% from the same period in 2023 and was
the same as the first quarter of 2024.
- Annualized return on average assets for the second quarters of
2024 and 2023, was 1.00%, compared to 0.80% for the first quarter
of 2024.
- Diluted earnings per share was $0.40 for the quarter ended June
30, 2024 compared to $0.41 for the quarter ended June 30,
2023.
Balance Sheet Highlights include:
- Total assets declined $14.4 million, or 2%, to $811.2 million
as of June 30, 2024 from $825.6 million as of December 31,
2023.
- Total loans declined $14.3 million, or 2%, to $622.7 million as
of June 30, 2024 from $637.0 million as of December 31, 2023.
- Total deposits declined $35.5 million, or 5%, from $687.4
million as of December 31, 2023 to $651.9 million as of June 30,
2024.
- For the second quarter of 2024, annualized return on average
equity was 11.10% compared to 12.70% for the same period in 2023
and 9.23% for the first quarter of 2024.
- Book value per share increased 14% to $15.09 as of June 30,
2024 from $13.23 as of December 31, 2023.
- Leverage ratio for the Bank grew to 10.55% as of June 30, 2024
from 10.02% as of December 31, 2023.
1st Colonial Bancorp, Inc. (FCOB), holding company of 1st
Colonial Community Bank, today reported net income of $2.0 million,
or $0.40 per diluted share, for the three months ended June 30,
2024, compared to net income of $2.0 million, or $0.41 per diluted
share, for the three months ended June 30, 2023. For the six months
ended June 30, 2024, net income was $3.5 million, or $0.72 per
diluted share, compared to $3.5 million, or $0.72 per diluted
share, for the same period in 2023.
Robert White, President and Chief Executive Officer, commented,
“We are pleased to report our second quarter results, which reflect
our continued financial resiliency in this prolonged higher
interest rate environment. The continued pressure on deposit rates
has caused a decrease in our net interest margin. We remain focused
on managing our operating costs to account for the anticipated and
ongoing pressure on our funding costs. Our team remains committed
to delivering high quality, value-added products and services to
our clients. Our asset quality and overall portfolio performance
remains strong, which we attribute to our disciplined underwriting
practices.”
Operating Results
Net Interest Income
Net interest income for the three months ended June 30, 2024 and
2023 was $5.9 million and $6.9 million, respectively. The $1
million decline in net interest income was primarily attributable
to a $1.5 million increase in interest paid on average
interest-bearing liabilities that was partially offset by a $486
thousand increase in interest income earned on average
interest-earning assets. For the second quarter of 2024, average
loan balances increased $10.8 million to $632.5 million from $621.7
million for the second quarter of 2023. Average residential
mortgages, and home equity loans and lines outstanding increased
$29.8 million and $5.4 million, respectively. Average outstanding
constructions loans, which have higher interest rates based on the
Wall Street Journal (WSJ) prime rate, declined $21.8 million for
the second quarter of 2024 compared to the same period in 2023.
When compared to the first quarter of 2024, net interest income
declined by $394 thousand.
For the first six months of 2024, net interest income decreased
$1.2 million, or 9%, to $12.2 million from $13.4 million for the
same period in 2023. The decline in net interest income was
primarily attributable to a $3.1 million increase in interest paid
on average interest-bearing liabilities and was partially mitigated
by a $1.9 million increase in interest income earned on average
interest-earning assets. During the first six months of 2024,
interest income on average loans and average investments increased
$1.4 million and $323 thousand, respectively. Our average
outstanding loan balance grew $20.9 million.
For the second quarter of 2024, interest expense was $4.4
million, an increase of $1.5 million from $2.9 million for the
second quarter of 2023. For the second quarter of 2024, average
interest-bearing deposits increased $6.4 million from the second
quarter of 2023. Average brokered certificates of deposit (CDs)
increased $50.2 million due to declines in average interest
checking, savings and money market and retail CD balances of $24.5
million, $8.9 million and $10.4 million, respectively. As a result
of the prolonged higher interest rates, we have increased our
deposit rates over the last year. The increase in deposit rates
combined with the increase in the average balance of higher cost
brokered CDs led to an increase of $1.6 million in deposit interest
expense in the second quarter of 2024 compared to the second
quarter of 2023. When compared to the first quarter of 2024, total
interest expense increased $186 thousand from $4.2 million. The
average rate paid on interest bearing liabilities was 2.74% for the
second quarter of 2024 compared to 2.61% for the first quarter of
2024 and 1.78% for the second quarter of 2023.
For the first six months of 2024, interest expense was $8.6
million, an increase of $3.1 million from $5.5 million for the
first six months of 2023. For the first six months of 2024, average
interest-bearing deposits increased $18.9 million from the average
balance for the comparable 2023 period. Average brokered CD
balances increased $46.3 million while average interest checking,
savings and money market and retail CD balances declined $6.2
million, $15.4 million, and $5.8 million, respectively. The
increase in deposit rates combined with the increase in average
brokered CD balances led to an increase of $3.3 million in deposit
interest expense for the first two quarters of 2024 compared to the
same period in 2023. Average borrowings decreased $9.0 million
during the first six months of 2024 compared to the same period in
2023.
The net interest margin was 3.11% for the second quarter of 2024
compared to 3.66% for the second quarter of 2023. The average yield
on interest-earning assets grew 26 basis points from 5.17% for the
quarter ended June 30, 2023 to 5.43% for the quarter ended June 30,
2024. The average rate paid on average interest-bearing liabilities
increased 96 basis points from 1.78% for the second quarter of 2023
to 2.74% for the second quarter of 2024. When compared to the first
quarter of 2024, the second quarter 2024 net interest margin
declined 20 basis points from 3.31% and was mainly related to an 8
basis point decrease in the average yield on average
interest-earning assets coupled with a 12 basis point increase in
the average rate paid on average interest bearing deposits. Net
interest margin was 3.21% for the six months ended June 30, 2024
compared to 3.60% for the six months ended June 30, 2023.
Provision for Credit Losses
For the three months ended June 30, 2024, the provision for
credit losses was a net release of $439 thousand and included $380
thousand for loans and $59 thousand for off balance sheet (“OBS”)
commitments. The release was mainly due to a planned sale of $15
million in home equity lines of credit in June 2024. As a result of
the sale, we were able to expand our ability to originate new lines
of credit without increasing our concentration in single family
residential mortgages. For the three months ended June 30, 2023,
the provision for credit losses was $170 thousand and included $251
thousand for loans and ($81) thousand for OBS commitments. For the
second quarter of 2024 net charge-offs were $208 thousand compared
to $150 thousand for the second quarter of 2023 and net recoveries
of $116 thousand for the first quarter of 2024.
For the six months ended June 30, 2024, the provision for credit
losses was a net release of $284 thousand and included $260
thousand for loans and $24 thousand for OBS commitments. For the
six months ended June 30, 2023, the provision for credit losses was
a net release of $4 thousand and included $54 thousand for loans
and ($58) thousand for OBS commitments. Net charge-offs were $92
thousand for the first half of 2024 compared to $118 thousand for
the same period in 2023.
Noninterest Income
Noninterest income for the second quarter of 2024 was $969
thousand, an increase of $270 thousand, or 39%, from $699 thousand
for the second quarter of 2023. Income from the origination and
sales of residential mortgages grew $315 thousand, or 99%, from the
second quarter in 2023. While mortgage originations grew $7.0
million, or 27%, we sold 92% of the originations in the second
quarter of 2024 compared to 58% in the second quarter of 2023. We
also recorded a $35 thousand gain on the sale of $15 million in
home equity lines of credit. Gains on the sale of SBA loans were
$21 thousand for the second quarter of 2024 compared to $118
thousand for the comparable 2023 period. When compared to the first
quarter of 2024, non-interest income for the second quarter of 2024
increased $248 thousand, or 34%, from $721 thousand.
For the six months ended June 30, 2024, noninterest income was
$1.7 million, an increase of $537 thousand, or 47%, from $1.2
million for the same period in 2023. Income from the origination
and sales of residential mortgages grew $568 thousand, or 112%,
from $508 thousand for the first two quarters of 2023 to $1.1
million for the first two quarters in 2024. For the first half of
2024, we sold $49.1 million, or 88%, of the $55.9 million in
mortgage loan originations compared to sales of $25.8 million, or
52%, of the $49.4 million in mortgage loan originations for the
first half of 2023. For the first six months of 2024 gains on the
sale of SBA loans were $21 thousand and declined $110 thousand from
$131 thousand for the same period in 2023.
Noninterest Expense
Noninterest expense was $4.8 million for the three months ended
June 30, 2024, and decreased $82 thousand, or 2%, from $4.9 million
for the comparable period in 2023. Salaries and benefits and FDIC
assessment expenses decreased $84 thousand and $61 thousand and
were partially offset by an increase in audit expenses of $75
thousand. When compared to the first quarter of 2024, non-interest
expense for the second quarter of 2024 increased $29 thousand.
Noninterest expense was $9.6 million for the six months ended
June 30, 2024 and decreased $173 thousand from $9.7 million for the
same period in 2023. Salaries and benefits decreased $369 thousand,
or 6%, mainly due to the recognition of severance that was
negotiated with a former executive in 2023. Audit fees and legal
expenses increased $157 thousand and $71 thousand, respectively.
The increase in audit expenses was mostly related to optional
targeted testing of operational areas and the increase in legal
fees was related to the workout and disposition of nonaccrual
assets.
Income Taxes
For the three and six months ended June 30, 2024, income tax
expenses were $556 thousand and $1.1 million, respectively,
compared to $634 thousand and $1.4 million for the three and six
months ended June 30, 2023, respectively. Income taxes were
favorably impacted by an increase in non-taxable income and a
reduction in the New Jersey corporate surtax rate.
Financial Condition
Assets
As of June 30, 2024, total assets were $811.1 million and
decreased $7.0 million, or 1%, from $818.1 million as of March 31,
2024. Total assets were $825.6 million as of December 31, 2023.
Total loans were $622.7 million as of June 30, 2024, a decrease
of $14.4 million, or 2%, from $637.2 million as of March 31, 2024.
Total loans declined $14.3 million, or 2%, from $637.0 million as
of December 31, 2023. Home equity loans and lines of credit
declined $15.3 million in the second quarter and $4.8 million
during the first half of 2024 as a result of the loan sale.
Commercial loans, including commercial real estate and construction
loans, increased $2.0 million in the second quarter and declined
$7.8 million during the six months ended June 30, 2024. As of June
30, 2024, loans held for sale were $11.4 million and increased $5.9
million and $7.8 million from $5.5 million as of March 31, 2024 and
$3.6 million as of December 31, 2024, respectively.
Investments decreased $2.9 million, or 3%, to $108.6 million as
of June 30, 2024 from $111.5 million as of March 31, 2024.
Investments were $107.6 million as of December 31, 2023. During
2024 we received $3.2 million in principal paydowns and reinvested
the proceeds in short-term municipal bond anticipation notes. The
unrealized loss was $5.8 million as of June 30, 2024 compared to
$6.2 million as of December 31, 2023.
Asset Quality
As of June 30, 2024, the allowance for credit losses (“ACL”) for
loans was $9.3 million, or 1.50%, of total loans compared to $9.9
million, or 1.56%, of total loans as of March 31, 2024. The ACL was
$9.7 million, or 1.52% of total loans, as of December 31, 2023. As
of June 30, 2024, non-performing assets were $1.7 million compared
to $1.6 million as of March 31, 2024 and $4.9 million as of
December 31, 2023. During the second quarter we foreclosed on the
commercial real estate collateral for a commercial mortgage and
transferred the net realizable value of $258 thousand from a
nonaccrual loan to other real estate owned. The ACL to non-accrual
loans was 641.4% as of June 30, 2024 compared to 631.5% as of March
31, 2024 and 199.0% as of December 31, 2023. As of June 30, 2024,
the ratio of non-performing assets to total assets was 0.28%
compared to 0.25% as of March 31, 2024 and 0.76% as of December 31,
2023.
Liabilities
Total deposits were $651.9 million as of June 30, 2024, a
decrease of $17.0 million, or 3%, from $669.0 million as of March
31, 2024. For the first six months of 2024, total deposits declined
$35.5 million, or 5%, from $687.4 million as of December 31, 2023.
Municipal interest checking accounts, retail CDs, interest checking
deposits, and money market accounts decreased $29.2 million, $20.0
million, $5.7 million and $3.3 million, respectively, while savings
accounts increased $8.5 million. Brokered CDs increased $15.0
million to replace the reduction in deposit balances. The current
interest rate environment has made it highly competitive in
retaining and growing our deposit customers.
As of June 30, 2024, short-term borrowings were $70.8 million
and increased $8.1 million from March 31, 2024 and $17.2 million
from December 31, 2023. The increase in short-term borrowings was
to supplement funding requirements.
Shareholder’s Equity
Total shareholders’ equity was $72.0 million as of June 30,
2024, compared to $69.7 million as of March 31, 2024 and $67.9
million as of December 31, 2023. The accumulated comprehensive loss
was $4.3 million as of June 30, 2024 compared to $4.5 million for
March 31, 2024 and December 31, 2023. The accumulated comprehensive
loss is related to the unrealized loss in our investment portfolio.
Tangible book value per share increased $0.44 from $14.65 as of
March 31, 2024 to $15.09 as of June 30, 2024. Tangible book value
per share was $14.31 as of December 31, 2023.
Consolidated Financial Statements and Other Highlights:
1st COLONIAL BANCORP, INC.
CONSOLIDATED INCOME STATEMENTS
(Unaudited, dollars in thousands, except
per share data)
For the three months
ended
For the six months
June 30,
March 31,
June 30,
ended June 30,
2024
2024
2023
2024
2023
Interest income
$
10,292
$
10,500
$
9,806
$
20,792
$
18,885
Interest expense
4,389
4,203
2,865
8,592
5,453
Net Interest Income
5,903
6,297
6,941
12,200
13,432
Provision for (release of) credit
losses
(439)
155
170
(284)
(4)
Net interest income after provision for
credit losses
6,342
6,142
6,771
12,484
13,436
Non-interest income
969
721
699
1,690
1,153
Non-interest expense
4,802
4,773
4,884
9,575
9,748
Income before taxes
2,509
2,090
2,586
4,599
4,841
Income tax expense
556
508
634
1,064
1,360
Net Income
$
1,953
$
1,582
$
1,952
$
3,535
$
3,481
Earnings Per Share – Basic
$
0.41
$
0.33
$
0.42
$
0.74
$
0.74
Earnings Per Share – Diluted
$
0.40
$
0.32
$
0.41
$
0.72
$
0.72
SELECTED PERFORMANCE RATIOS:
For the three months
ended
For the six months
June 30,
March 31,
June 30,
ended June 30,
2024
2024
2023
2024
2023
Annualized Return on Average Assets
1.00
%
0.80
%
0.99
%
0.90
%
0.90
%
Annualized Return on Average Equity
11.10
%
9.23
%
12.70
%
10.18
%
11.63
%
Book value per share (1)
$
15.09
$
14.65
$
13.23
$
15.09
$
13.23
As of
June 30, 2024
As of
December 31, 2023
Bank Capital Ratios:
Tier 1 Leverage
10.55%
10.02%
Total Risk Based Capital
16.51%
15.55%
Common Equity Tier 1
15.26%
14.30%
1st COLONIAL BANCORP, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited, in thousands)
As of June 30, 2024
As of December 31,
2023
Cash and cash equivalents
$
44,065
$
52,727
Total investments
108,557
107,577
Loans held for sale
11,419
3,619
Total loans
622,730
637,037
Less ACL-loans
(9,339)
(9,690)
Loans and leases, net
613,391
627,347
Bank owned life insurance
18,180
17,894
Premises and equipment, net
1,596
1,770
Other real estate owned (“OREO”)
258
-
Accrued interest receivable
3,825
3,431
Other assets
9,871
11,279
Total Assets
$
811,162
$
825,644
Total deposits
$
651,924
$
687,444
Other borrowings
70,800
53,600
Subordinated debt
10,667
10,631
Other liabilities
5,725
6,046
Total Liabilities
739,116
757,721
Total Shareholders’ Equity
72,046
67,923
Total Liabilities and Equity
$
811,162
$
825,644
1st COLONIAL BANCORP, INC.
NET INTEREST INCOME AND MARGIN
TABLES
(Unaudited, in thousands, except
percentages)
For the three months
ended
June 30, 2024
March 31, 2024
June 30, 2023
Average
Balance
Interest
Yield/
Rate
Average
Balance
Interest
Yield/
Rate
Average
Balance
Interest
Yield/
Rate
Cash and cash equivalents
$
13,650
$
157
4.63%
$
14,298
$
146
3.94%
$
18,021
$
212
4.72%
Investment securities
108,370
808
3.00%
111,182
806
2.91%
115,830
631
2.19%
Loans held for sale
8,294
131
6.35%
4,746
75
6.39%
4,653
42
3.60%
Loans
632,463
9,196
5.85%
635,318
9,473
6.00%
621,731
8,921
5.76%
Total interest-earning assets
762,777
10,292
5.43%
766,174
10,500
5.51%
760,235
9,806
5.17%
Non-interest earning assets
25,935
27,760
28,094
Total average assets
$
788,712
$
793,934
$
788,329
Interest-bearing deposits
Interest checking accounts
$
364,634
$
1,485
1.64%
$
373,812
$
1,413
1.52%
$
389,120
$
1,007
1.04%
Savings and money markets
69,478
334
1.93%
64,296
273
1.71%
78,356
228
1.17%
Certificates of deposit
73,253
744
4.08%
85,499
815
3.83%
83,675
422
2.02%
Brokered deposits
103,360
1,313
5.11%
94,625
1,239
5.27%
53,167
631
4.76%
Total interest-bearing deposits
610,725
3,876
2.55%
618,232
3,740
2.43%
604,318
2,288
1.52%
Borrowings
33,031
513
6.25%
29,182
463
6.37%
39,427
577
5.87%
Total interest-bearing liabilities
643,756
4,389
2.74%
647,414
4,203
2.61%
643,745
2,865
1.78%
Non-interest bearing deposits
68,668
71,677
76,400
Other liabilities
5,555
5,917
6,559
Total average liabilities
717,979
725,008
726,704
Shareholders' equity
70,733
68,926
61,625
Total average liabilities and equity
$
788,712
$
793,934
$
788,329
Net interest income
$
5,903
$
6,297
$
6,941
Net interest margin
3.11%
3.31%
3.66%
Net interest spread
2.68%
2.90%
3.39%
1st COLONIAL BANCORP, INC.
NET INTEREST INCOME AND MARGIN TABLES –
Continued
(Unaudited, in thousands, except
percentages)
For the six months
ended
For the six months
ended
June 30, 2024
June 30, 2023
Average
Balance
Interest
Yield
Average
Balance
Interest
Yield/Rate
Cash and cash equivalents
$
14,289
$
303
4.26%
$
13,456
$
275
4.12%
Investment securities
109,776
1,613
2.95%
121,803
1,290
2.14%
Loans held for sale
6,520
206
6.35%
4,838
90
3.74%
Loans
633,892
18,670
5.92%
612,958
17,230
5.67%
Total interest-earning assets
764,477
20,792
5.47%
753,055
18,885
5.06%
Non-interest earning assets
26,847
27,856
Total average assets
$
791,324
$
780,911
Interest-bearing deposits
Interest checking accounts
$
369,223
$
2,898
1.58%
$
375,435
$
1,907
1.02%
Savings and money market deposits
66,887
607
1.82%
82,280
436
1.07%
Certificates of deposit
79,376
1,559
3.95%
85,145
770
1.81%
Brokered deposits
98,993
2,552
5.18%
121,139
1,198
4.56%
Total interest-bearing deposits
614,479
7,616
2.49%
595,543
4,311
1.46%
Borrowings
31,107
976
6.31%
40,135
1,142
5.74%
Total interest-bearing liabilities
645,586
8,592
2.68%
635,678
5,453
1.73%
Non-interest bearing deposits
70,173
78,432
Other liabilities
5,735
6,418
Total average liabilities
721,494
720,528
Shareholders' equity
69,830
60,383
Total average liabilities and equity
$
791,324
$
780,911
Net interest income
$
12,200
$
13,432
Net interest margin
3.21%
3.60%
Net interest spread
2.79%
3.33%
About 1st Colonial Bancorp,
Inc.
1st Colonial Bancorp, Inc, is a Pennsylvania corporation
headquartered in Mount Laurel, New Jersey, and the parent company
of 1st Colonial Community Bank (the “Bank”). The Bank 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 has branches in Westville, New
Jersey and Limerick, Pennsylvania. The bank also has administrative
offices in Mount Laurel, New Jersey. To learn more, call (877)
785-8550 or visit www.1stcolonial.com.
“Safe Harbor” Statement
In addition to historical information, this press release may
contain “forward-looking statements” within the meaning of the
“safe harbor” provisions of the Private Securities Litigation
Reform Act of 1995. These forward-looking statements include
statements with respect to 1st Colonial Bancorp, Inc.’s strategies,
goals, beliefs, expectations, estimates, intentions, capital
raising efforts, financial condition and results of operations,
future performance, and business. Statements preceded by, followed
by, or that include the words “may,” “could,” “should,” “pro
forma,” “looking forward,” “would,” “believe,” “expect,”
“anticipate,” “estimate,” “intend,” “plan,” or similar expressions
generally indicate a forward-looking statement. These
forward-looking statements involve risks and uncertainties that are
subject to change based on various important factors (some of
which, in whole or in part, are beyond 1st Colonial Bancorp, Inc.’s
control). Numerous competitive, economic, regulatory, legal and
technological factors, risks and uncertainties that could cause
actual results to differ materially include, without limitation,
the impact of the ongoing pandemic and government responses
thereto; on the U.S. economy, including the markets in which we
operate; actions that we and our customers take in response to
these factors and the effects such actions have on our operations,
products, services and customer relationships; increased
competitive pressures; changes in the interest rate environment;
changes in general economic conditions and conditions within the
securities markets; legislative and regulatory changes; and the
effects of inflation, a potential recession, among others, could
cause 1st Colonial Bancorp, Inc.’s financial performance to differ
materially from the goals, plans, objectives, intentions and
expectations expressed in such forward-looking statements. 1st
Colonial Bancorp, Inc. cautions that the foregoing factors are not
exclusive, and neither such factors nor any such forward-looking
statement takes into account the impact of any future events. All
forward-looking statements and information set forth herein are
based on management’s current beliefs and assumptions as of the
date hereof and speak only as of the date they are made. 1st
Colonial Bancorp, Inc. does not undertake to update any
forward-looking statement whether written or oral, that may be made
from time to time by 1st Colonial Bancorp, Inc. or by or on behalf
of 1st Colonial Community Bank.
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version on businesswire.com: https://www.businesswire.com/news/home/20240723892398/en/
Mary Kay Shea at 856‑885‑2391