1st Colonial Bancorp, Inc. Reports 2017 Profit of $4.0 Million

10% increase in net income
Announces 5% stock dividend

COLLINGSWOOD, N.J.--()--1st Colonial Bancorp, Inc. (FCOB), holding company of 1st Colonial Community Bank, today reported net income of $944 thousand, or $0.22 per diluted share, and $4.0 million, or $0.94 per diluted share, for the three and twelve months ended December 31, 2017, respectively. Comparatively, net income was $880 thousand, or $0.21 per diluted share, and $3.7 million, or $0.85 per diluted share, for the three and twelve months ended December 31, 2016, respectively. Net income for 2017 was negatively impacted by a re-measurement of 1st Colonial’s deferred tax asset related to the enactment of the Tax Cuts and Jobs Act (“Tax Act”). 1st Colonial recorded an additional $317 thousand in income taxes as a result of the re-measurement.

“We are very pleased to announce our 10% growth in net income for 2017 and we are equally pleased to be able to provide another 5% stock dividend to our shareholders in appreciation of their support. We believe that we are well positioned to continue our growth into 2018 and beyond.”

1st Colonial also announced that on January 29, 2018, its Board of Directors declared a five percent (5%) stock dividend to the company's shareholders. The dividend will be distributed on all issued and outstanding shares of common stock held of record as of April 2, 2018 and will be payable on April 16, 2018. Each shareholder as of the record date also will receive an additional share of common stock in lieu of any fractional share payable to the shareholder.

Gerry Banmiller, President and Chief Executive Officer, commented, “We are very pleased to announce our 10% growth in net income for 2017 and we are equally pleased to be able to provide another 5% stock dividend to our shareholders in appreciation of their support. We believe that we are well positioned to continue our growth into 2018 and beyond.”

Highlights for the year ended December 31, 2017, included:

Balance Sheet Trends:

  • At December 31, 2017, total assets were $540.1 million and grew $52.3 million, or 10.7% from $487.8 million at December 31, 2016.
  • Total loans were $376.5 million at December 31, 2017, an increase of $24.5 million, or 7.0%, from $352.0 million at December 31, 2016. Increases were recognized in commercial loans secured by real estate and home equity loans.
  • Total deposits were $496.8 million at December 31, 2017 and increased $50.4 million, or 11.3%, from $446.4 million at December 31, 2016. In 2017, 1st Colonial ran a successful certificates of deposit promotion which helped grow such deposits by $47.8 million from 2016.
  • Total shareholders’ equity was $38.4 million at December 31, 2017, an increase of $4.3 million, or 12.6%, from $34.1 million at December 31, 2016.
  • 1st Colonial's non-performing assets at December 31, 2017 were $2.3 million as compared to $2.6 million at December 31, 2016. Non-performing assets to total assets at December 31, 2017 were 0.43% compared to 0.53% at December 31, 2016.

Income Statement and Other Highlights:

  • Net interest income for the three months ended December 31, 2017 increased $487 thousand, or 12.3%, to $4.5 million from $4.0 million for the three months ended December 31, 2016. Net interest income for the year ended December 31, 2017 increased $1.9 million, or 13.0%, to $17.0 million from $15.1 million for the year ended December 31, 2016. The growth in net interest income was primarily related to an increase in interest income on loans and in the average yield earned on average interest-earning assets. During the past twelve months, the composition of a portion of our interest-earning assets changed from lower yielding investment securities to higher yielding loans. Additionally, the 75 basis point increase in the fed funds rate since December 2016 has had a positive impact on our variable rate loans. For the year ended December 31, 2017, average loan balances increased $42.4 million while average interest-earning deposits and investments declined $16.5 million from the year ended December 31, 2016.
  • The net interest margin was 3.28% for the fourth quarters of 2017 and 2016 and was 3.36% for the year ended December 31, 2017 compared to 3.13% for the year ended December 31, 2016. The increase in net interest margin was directly related to an increase in the yield on average interest-earning assets.
  • For the three months and year ended December 31, 2017, the Company recorded a provision to the allowance for loan losses of $303 thousand and $852 thousand, respectively, compared to $175 thousand and $975 thousand for same periods in 2016, respectively. The increase in the quarter over quarter provision was related to specific reserves required on impaired loans. The decline in the 2017 provision was primarily attributable to a decline in our historical loss rates and lower loan growth in 2017 compared to loan growth in 2016 (7% in 2017 versus 18% in 2016). The loss allowance as a percentage of total loans was 1.29% at December 31, 2017 compared to 1.35% at December 31, 2016.
  • Non-interest income for the fourth quarter of 2017 was $918 thousand, a decrease of $11 thousand, or 1.2%, from $929 thousand for the fourth quarter of 2016. Gains on the sale of residential mortgages declined $188 thousand due to a decline in the volume of loans sold. Partially offsetting the decline in gains on the sale of residential mortgages was an increase of $159 thousand in gains on the sale of small business administration (“SBA”) loans.
  • Non-interest income was $3.8 million for the year ended December 31, 2017 and declined $64 thousand, or 1.6%, from $3.9 million for the year ended December 31, 2016. Gains on the sale of residential mortgages declined $452 thousand due to a decline in the volume of loans sold. Partially mitigating the decrease in gains on the sale of residential mortgages was an increase of $286 thousand in gains on the sale of SBA loans, a $43 thousand increase in income related to bank owned life insurance, and $25 thousand in gains on sold investment securities. There were no sales of investment securities in 2016.
  • Non-interest expense was $3.2 million for the quarter ended December 31, 2017 and declined $135 thousand, or 4.1%, from $3.3 million for the comparable period in 2016. Contributing to the decrease in non-interest expense for the fourth quarter of 2017 was a $146 thousand decrease in salaries and benefits and $161 thousand decrease in the sale of other real estate owned (“OREO”). The decline in salaries and benefits was directly related to a decline in the commissions paid on sold residential mortgages. During the fourth quarter of 2017, we sold two OREO properties and recorded a gain of $11 thousand. During the fourth quarter of 2016, we sold three OREO properties and recorded a loss of $150 thousand. Partially offsetting these decreases in non-interest expense were increases of $95 thousand and $56 thousand in professional and legal fees and communications and data processing expenses, respectively, during the fourth quarter of 2017.
  • Non-interest expense was $13.2 million for the year ended December 31, 2017 and increased $1.0 million, or 8.3%, from $12.2 million for the comparable period in 2016. Contributing to the planned growth in non-interest expense for 2017 was a $495 thousand increase in salaries and benefits, a $384 thousand increase in professional and legal fees, and a $172 thousand increase in communications and data processing expenses. The increase in salaries and benefits was related to an increase in headcount in the lending support and compliance functions to support our continued loan and deposit growth. Included in professional and legal fees was $267 thousand in consulting fees related to our Bank Secrecy Act program and increased loan workout costs. The increase in communications and data processing was mainly related to an increase in our managed information technology expenses caused by outsourcing significant IT functions.
  • For the three months and year ended December 31, 2017, income tax expense was $956 thousand and $2.8 million, respectively, compared to $537 thousand and $2.2 million for the three months and year ended December 31, 2016, respectively. The increase in tax expense was related to the growth in pre-tax income and the re-measurement of the deferred tax asset in accordance with the Tax Act.

Highlights as of December 31, 2017 and 2016, and a comparison of the year and three months ended December 31, 2017 to the year and three months ended December 31, 2016 include the following:

   

1st COLONIAL BANCORP, INC.

CONSOLIDATED INCOME STATEMENTS
(Unaudited, dollars in thousands, except per share data)
 
For the three months For the years
ended December 31, ended December 31,

2017

 

2016

2017

 

2016

Interest income $ 5,191 $ 4,465 $ 19,563 $ 17,002
Interest expense   739   500   2,558   1,950
Net Interest Income 4,452 3,965 17,005 15,052
Provision for loan losses   303   175   852   975
Net interest income after provision for loan losses 4,149 3,790 16,153 14,077
Non-interest income 918 929 3,842 3,906
Non-interest expense   3,167   3,302   13,162   12,150
Income before taxes 1,900 1,417 6,833 5,833
Income tax expense   956   537   2,790   2,172
Net Income $ 944 $ 880 $ 4,043 $ 3,661
Earnings Per Share – Basic (1) $ 0.25 $ 0.23 $ 1.00 $ 0.91
Earnings Per Share – Diluted (1) $ 0.22 $ 0.21 $ 0.94 $ 0.85
 

SELECTED PERFORMANCE RATIOS:

 
  At December 31,   At December 31,

2017

2016

Return on Average Assets 0.78 % 0.74 %
Return on Average Equity 11.21 % 11.26 %
Book value per share (1) $ 9.45 $ 8.36
Capital ratios:
Tier 1 Leverage 7.07 % 6.81 %
Total Risk Based Capital 12.36 % 11.86 %
Common Equity Tier 1 11.11 % 10.61 %
   

1st COLONIAL BANCORP, INC.

CONSOLIDATED BALANCE SHEETS
 
(Unaudited, in thousands)

At December 31,
2017

At December 31,
2016

Cash and cash equivalents $ 28,395 $ 4,965
Total investments 118,547 114,840
Total loans held for sale 7,169 7,264
Total loans 376,514 351,997
Less Allowance for loan losses   4,858     (4,739 )
Loans and leases, net 371,656 347,258
Bank owned life insurance 8,434 6,697
Premises and equipment, net 864 1,399
Other real estate owned, net 244 131
Accrued interest receivable 1,505 1,253
Other assets   3,317     4,013  
Total Assets $ 540,131   $ 487,820  
 
Total deposits $ 496,847 $ 446,404
Other borrowings 3,166 5,575
Other liabilities 1,708 1,741
Total Shareholders’ Equity   38,410     34,100  
Total Liabilities and Equity $ 540,131   $ 487,820  
 
(1)   Adjusted to give effect to the 5% stock dividend distributed to shareholders on April 17, 2017.
 

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 a branch in the New Jersey community of Westville and administrative offices in Cherry Hill, New Jersey. 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, 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

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

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