1st Colonial Bancorp, Inc. Reports First Quarter 2021 Net Income

  • First quarter revenues were $7.4 million, an increase of 35% from the same period in 2020.
  • Non-interest income was $2.6 million for the quarter ended March 31, 2021 compared to $878 thousand for the same period in 2020, an increase of 196% year over year.
  • Provision for loan losses was $240 thousand for the first quarter of 2021 and decreased 81% from $1.2 million for the first quarter of 2020.
  • Net recoveries were $142 thousand for the three months ended March 31, 2021 compared to net charge-offs of $2.4 million for the three months ended March 31, 2020.
  • Tangible book value increased 13% to $11.04 as of March 31, 2021 from $9.80 as of March 31, 2020. Tangible book value was $10.82 as of December 31, 2020.
  • Efficiency ratio improved 15%, from 77% for the first quarter of 2020 to 65% for the first quarter of 2021.

1st Colonial Bancorp, Inc. (FCOB), holding company of 1st Colonial Community Bank, today reported net income of $1.7 million, or $0.33 per diluted share, for the three months ended March 31, 2021 compared to net income of $5 thousand, or $0.00 per diluted share for the three months ended March 31, 2020.

Robert White, President and Chief Executive Officer, commented, “Our results for the first quarter were strong, led by our substantial increase in non-interest income over the same period in 2020. The management changes that were implemented during 2020, coupled with the addition of revenue producing teams throughout the year, had a measurable impact on performance. As economic conditions continue to improve, we believe we are well positioned to capitalize on opportunities.”

“We remain very focused on accomplishing our strategic objectives, while we provide ongoing support for our team members, customers and communities that we serve. Our new full-service branch in Limerick, Pennsylvania opened in March. We are excited to deliver our concierge banking model, 'where we bring the bank to you’ to the Limerick area, as well as expand our reach in Southeastern Pennsylvania.”

“We continue to integrate our technology upgrades and expect to have enhanced mobile and online banking features in place by the fourth quarter. Our goal is to deliver the bank to our customers whenever and wherever they prefer. Along the way we anticipate seeing improved efficiency while modernizing the overall customer experience.”

Operating Results

Net Interest Income

Net interest income for the three months ended March 31, 2021 and 2020 was $4.8 million and $4.6 million, respectively. The increase in net interest income was primarily attributable to a 40.5% decline in interest expense. A shift in our deposit composition to non-interest bearing, and lower cost deposit products coupled with interest rate reductions, led to the improvement in interest expense. For the first quarter of 2021, average certificates of deposit balances (“CD”) declined $41.0 million from the first quarter of 2020.

The net interest margin was 3.12% for the first quarter of 2021 compared to 3.24% for the first quarter of 2020. The decrease in net interest margin was mostly related to lower loan interest income coupled with a reduction in the average yield on interest-earning cash. The lower rate environment, however, did enable us to reduce our total cost of deposits by 57 basis points from 0.98% for the first quarter of 2020 to 0.41% for the first quarter of 2021.

Loan Loss Provision

For the three months ended March 31, 2021, we recorded a provision to the allowance for loan losses (“allowance”) of $240 thousand compared to $1.2 million for the three months ended March 31, 2020. The provision for the first quarter of 2020 was related to an increase in qualitative reserve factors due to the pandemic, and an increase in the historical loss rates. No adjustments were made to the qualitative factors in the first quarter of 2021. Net recoveries were $142 thousand for the first quarter of 2021 compared to net charge-offs of $2.4 million for the first quarter of 2020. The net charge-offs for 2020 included $1.8 million in specific reserves on impaired loans. The allowance as a percentage of total loans was 1.32% as of March 31, 2021 compared to 1.33% as of December 31, 2020 and 1.30% as of March 31, 2020. Mary Kay Shea, Executive Vice President and Chief Financial Officer, stated, “The credit outlook is positive based on our low charge-offs this quarter and the 81% decline in provision expense from the prior year period.”

Non-interest Income

Non-interest income for the first quarter of 2021 was $2.6 million, an increase of $1.7 million, or 195.6%, from $878 thousand for the first quarter of 2020. Income from the origination and sales of residential mortgages was $2.0 million and grew $1.3 million, or 200%, from the first quarter in 2020 due to a $44.8 million increase in the volume of loans sold during the 2021 period. During the first quarter of 2021 we earned $335 thousand in gains on the sale of SBA loans. There were no such gains on the sale of SBA loans in the comparable 2020 period.

Non-interest Expense

Non-interest expense was $4.8 million for the quarter ended March 31, 2021 and rose $611 thousand, or 14.5%, from $4.2 million for the quarter ended March 31, 2020. Throughout 2020, we made key investments in highly experienced revenue producers and operational team members as we executed upon our strategic plan. Additionally, the growth in volume of sold residential mortgages led to a $414 thousand increase in paid commissions to our mortgage lending originators. Reductions in professional fees and impaired loan expenses partially mitigated the increase in salaries and benefits.

Income Taxes

For the first quarter of 2021, income tax expense was $662 thousand compared to $15 thousand for the first quarter of 2020. The significant improvement in pre-tax income led to the increase in income taxes.

Financial Condition

Assets

As of March 31, 2021, total assets were $659.4 million and grew $23.4 million from $636.1 million as of December 31, 2020.

Total loans were $455.8 million as of March 31, 2021, an increase of $32.7 million, or 7.7%, over the balance as of December 31, 2020. During the first quarter, Paycheck Protection Program (“PPP”) loans grew $28.9 million and commercial loans, including commercial real estate and construction, grew $5.3 million. Home equity loans and lines of credit declined slightly by $1.4 million. Residential mortgages held for sale grew $3.7 million from $21.9 million as of December 31, 2020 to $25.6 million as of March 31, 2021.

Liabilities

Total deposits were $587.5 million as of March 31, 2021, and grew $21.7 million, or 3.8%, from $565.8 million as of December 31, 2020. Demand deposits, municipal deposits and interest checking accounts increased $15.0 million, $9.7 million and $2.0 million, respectively. Money market and savings accounts declined $2.7 million and $1.9 million, respectively.

Shareholder’s Equity

Total shareholders’ equity was $54.4 million as of March 31, 2021 compared to $53.7 million as of December 31, 2020. Tangible book value increased $0.22, or 2.0%, from $10.82 as of December 31, 2020 to $11.04 as of March 31, 2021.

Asset Quality

1st Colonial's non-performing assets as of March 31, 2021 were $4.9 million compared to $4.8 million as of December 31, 2020. The ratio of non-performing assets to total assets as of March 31, 2021 was 0.74% compared to 0.75% as of December 31, 2020. As of March 31, 2021, the allowance was $6.0 million, or 1.32% of total loans. The allowance was $5.6 million, or 1.33% of total loans as of December 31, 2020. The recent stimulus payments coupled with expanding access and availability of vaccines should lead to continued economic improvement.

Income Statement and Other Highlights:

Highlights as of March 31, 2021 and December 31, 2020, and a comparison of the three months ended March 31, 2021 to the three months ended March 31, 2020 include the following:

1st COLONIAL BANCORP, INC.

CONSOLIDATED INCOME STATEMENTS

(Unaudited, dollars in thousands, except per share data)

For the three months

ended March 31,

2021

 

2020

Interest income

$

5,546

$

5,881

Interest expense

 

773

 

1,300

Net Interest Income

 

4,773

 

4,581

Provision for loan losses

 

240

 

1,237

Net interest income after provision for loan losses

 

4,533

 

3,344

Non-interest income

 

2,595

 

878

Non-interest expense

 

4,813

 

4,202

Income before taxes

 

2,315

 

20

Income tax expense

 

662

 

15

Net Income

$

1,653

$

5

Earnings Per Share – Basic

$

0.33

$

0.00

Earnings Per Share – Diluted

$

0.33

$

0.00

 

 

 

 

 

SELECTED PERFORMANCE RATIOS:

 

For the three months

ended March 31, 2021

 

For the three months

ended March 31, 2020

 

Return on Average Assets

 

1.04%

 

 

0.00%

Return on Average Equity

 

12.43%

 

 

0.04%

Book value per share

$

11.04

 

$

9.80

 

 

 

 

 

As of March 31, 2021

 

As of December 31, 2020

Capital ratios:

 

Tier 1 Leverage

 

9.67%

 

 

9.60%

Total Risk Based Capital

 

17.16%

 

 

17.54%

Common Equity Tier 1

 

15.91%

 

 

16.29%

 

1st COLONIAL BANCORP, INC.

CONSOLIDATED BALANCE SHEETS

(Unaudited, in thousands)

As of March 31, 2021

As of December 31, 2020

 

Cash and cash equivalents

$

28,712

 

$

37,040

 

Total investments

 

132,013

 

 

137,027

 

Mortgage loans held for sale

 

25,587

 

 

21,859

 

Total loans

 

455,804

 

 

423,147

 

Less allowance for loan losses

 

(6,006

)

 

(5,624

)

Loans and leases, net

 

449,798

 

 

417,523

 

Bank owned life insurance

 

14,845

 

 

14,739

 

Premises and equipment, net

 

1,062

 

 

769

 

Accrued interest receivable

 

1,847

 

 

1,811

 

Other assets

 

5,563

 

 

5,288

 

Total Assets

$

659,427

 

$

636,056

 

 

Total deposits

$

587,546

 

$

565,820

 

Other borrowings

 

2,326

 

 

2,325

 

Subordinated debt

 

10,413

 

 

 

10,404

 

Other liabilities

 

4,722

 

 

3,821

 

Total Liabilities

 

605,007

 

 

 

582,370

 

Total Shareholders’ Equity

 

54,420

 

 

53,686

 

Total Liabilities and Shareholders’ Equity

$

659,427

 

$

636,056

 

1st COLONIAL BANCORP, INC.

NET INTEREST INCOME AND MARGIN

(Unaudited, in thousands, except percentages)

For the three months ended

 

For the three months ended

March 31, 2021

 

March 31, 2020

Average

Balance

 

Interest

 

Yield

 

Average

Balance

 

Interest

 

Yield

Cash and cash equivalents

$

27,625

$

7

0.10

%

$

54,944

$

188

1.38

%

Investment securities

 

135,255

 

461

1.38

%

 

92,755

 

456

1.98

%

Mortgage loans held for sale

 

 

22,255

 

 

120

 

2.19

%

 

 

6,396

 

 

47

 

2.96

%

Loans

 

 

435,271

 

4,958

4.62

%

 

415,088

 

5,190

5.03

%

Total interest-earning assets

 

 

620,406

 

5,546

3.63

%

 

569,183

 

5,881

4.16

%

Non-interest earning assets

 

21,370

 

 

17,880

 

Total average assets

$

641,776

$

587,063

 

Interest-bearing deposits

NOW and money markets

$

250,347

$

117

0.19

%

$

264,309

$

470

0.72

%

Savings

 

117,507

 

84

0.29

%

 

51,072

 

52

0.41

%

Certificates of deposit

 

114,454

 

375

1.33

%

 

155,469

 

771

1.99

%

Total interest-bearing deposits

 

482,308

 

576

0.48

%

 

470,850

 

1,293

1.10

%

Borrowings

 

12,735

 

197

6.27

%

 

2,290

 

7

1.29

%

Total interest-bearing liabilities

 

495,043

 

773

0.63

%

 

473,140

 

1,300

1.17

%

Non-interest bearing deposits

 

88,649

 

62,164

Other liabilities

 

4,142

 

3,166

Total average liabilities

 

 

587,834

 

 

 

 

 

 

538,470

 

 

 

 

Shareholders' equity

 

53,942

 

48,593

Total average liabilities and equity

$

641,776

$

587,063

Net interest income

$

4,773

$

4,581

Net interest margin

3.12

%

3.24

%

Net interest spread

3.00

%

3.05

%

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 has branches in Westville, New Jersey and Limerick, Pennsylvania. The bank also has a loan production office in Haddonfield, New Jersey and administrative offices in Cherry Hill, New Jersey. To learn more, call (877) 785-8550 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 the extent of the adverse impact of the current global coronavirus outbreak on our customers, prospects and business, as well as the impact of any future pandemics or other natural disasters; economic conditions; civil unrest, rioting, acts or threats of terrorism, or actions taken by the local, state and Federal governments in response to such events, which could impact business and economic conditions in our market area; unanticipated loan losses, inability to close loans in our pipeline, lack of liquidity; varying and unanticipated costs of collection with respect to nonperforming loans; an inability to dispose of real estate owned; 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.

Contacts

Mary Kay Shea at 856-885-2391

 

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