CHERRY HILL, N.J.–(BUSINESS WIRE)–1st Colonial Bancorp, Inc. (FCOB), holding company of 1st Colonial Community Bank, today reported net income of 1.7 million, or $0.34 per diluted share, for the three months ended March 31, 2022 compared to net income of $1.7 million, or $0.33 per diluted share, for the three months ended March 31, 2021.

Robert White, President and Chief Executive Officer, commented, “Our results for the first quarter show our continued financial strength and momentum, led by a significant increase in net interest income due to solid loan growth. We have been focused on replacing the non-recurring PPP revenue and the elevated mortgage revenue from the historically high volume of mortgage refinancing activity.”

“Loan demand remains strong in both commercial and consumer lending, with consumer being driven by purchase activity. Housing sales remain robust in our markets with inventory still low and demand remaining high. We continue to monitor new loan application volumes to measure further impact associated with the Federal Reserve’s decision to increase short-term rates in an attempt to reduce or control current inflation. We are also closely monitoring and managing our operating costs to limit the impact of high inflation on our bottom line.”

“Our team is committed to delivering exceptional products and services through multiple distribution channels to support the needs of our customers.”

Operating Results

Net Interest Income

Net interest income for the three months ended March 31, 2022 and 2021 was $5.8 million and $4.8 million, respectively. The increase in net interest income was primarily attributable to a $1.0 million increase in interest income on average loans outstanding. For the first quarter of 2022, average loan balances increased $78.5 million to $513.8 million from $435.3 million for the first quarter of 2021. When compared to the fourth quarter of 2021, net interest income declined $296 thousand from $6.1 million, which was directly related to a $435 thousand decline in net loan origination income on the SBA’s Paycheck Protection Program (“PPP”) loans. Average PPP loans outstanding declined from $23.9 million for the quarter ended December 31, 2021 to $8.7 million for the first quarter of 2022.

The net interest margin was 3.46% for the first quarter of 2022 compared to 3.12% for the first quarter of 2021. The improvement in net interest margin was mostly related to an increase in the yield on interest-earning assets coupled with a reduction in the average rate paid on interest-bearing liabilities. The average yield on interest-earning assets grew 22 basis points from 3.63% for the quarter ended March 31, 2021 to 3.85% for the quarter ended March 31, 2022. Also we continue to benefit from the repricing of maturing certificates of deposit (CDs). The average rates paid on CDs declined 42 basis points from 1.33% for the first quarter of 2021 to 0.91% for the first quarter of 2022. When compared to the fourth quarter of 2021, the first quarter 2022 net interest margin declined five basis points from 3.51%.

Loan Loss Provision

For the three months ended March 31, 2022, we recorded a provision to the allowance for loan losses (“allowance”) of $300 thousand compared to $240 thousand for the three months ended March 31, 2021. Net recoveries were $137 thousand for the first quarter of 2022 compared to $142 thousand for the first quarter of 2021. The allowance as a percentage of total loans was 1.37% as of March 31, 2022 compared to 1.38% as of December 31, 2021 and 1.32% as of March 31, 2021.

Non-interest Income

Non-interest income for the first quarter of 2022 was $1.5 million, a decrease of $1.1 million, or 43%, from $2.6 million for the first quarter of 2021. Income from the origination and sales of residential mortgages declined $1.1 million, or 56%, from the first quarter in 2021 due to a $22.3 million, or 30%, decline in originations. Additionally, we retained in our loan portfolio $21.5 million, or 42%, of the $51.0 million in mortgage originations in the first quarter of 2022 compared to $9.2 million, or 13%, of the first quarter of 2021 originations. Mortgage activity was impacted by a drop in refinancing transactions and a lack of inventory in the purchase market. During the first quarter of 2022, we earned $347 thousand in gains on the sale of SBA loans compared to $335 thousand for the comparable 2021 period.

When compared to the fourth quarter of 2021, non-interest income for the first quarter of 2022 declined $653 thousand from $2.1 million. Income from the sales of SBA loans and the origination and sales of residential mortgages declined $349 thousand and $347 thousand, respectively, from their amounts for the fourth quarter of 2021. Mortgage originations declined $4.0 million from $55.0 million for the fourth quarter of 2021 and the loans retained in our loan portfolio grew $4.5 million, or 26% from $17.0 million in the fourth quarter of 2021.

Non-interest Expense

Non-interest expense was $4.6 million for the quarter ended March 31, 2022, representing a $228 thousand decline, or 4.7%, from $4.8 million for the quarter ended March 31, 2021. Reductions in professional fees and impaired loan expenses were the primary causes for the improvement in non-interest expenses.

When compared to the fourth quarter of 2021, non-interest expense for the first quarter of 2022 declined $517 thousand from $5.1 million. Reductions in professional fees, lending expenses and impaired loan expenses were the primary cause for the improvement in non-interest expenses.

Income Taxes

For the first quarter of 2022, income tax expense was $707 thousand compared to $662 thousand for the first quarter of 2021. A $101 thousand decline in tax-free interest income on our municipal investments negatively impacted income tax expense.

Financial Condition

Assets

As of March 31, 2022, total assets were $697.8 million and grew $15.0 million from $682.8 million as of December 31, 2021.

Total loans were $535.2 million as of March 31, 2022, an increase of $33.3 million, or 6.6%, from $501.9 million as of December 31, 2021. During the first quarter, commercial loans, including commercial real estate and construction and excluding PPP loans, grew $23.1 million. Residential mortgages and home equity loans and lines of credit increased $20.8 million. PPP loans declined $10.3 million to $3.7 million as of March 31, 2022. Residential mortgages held for sale grew $1.4 million from $10.0 million as of December 31, 2021 to $11.4 million as of March 31, 2022.

Liabilities

Total deposits were $626.0 million as of March 31, 2022, and grew $15.5 million, or 2.5%, from $610.5 million as of December 31, 2021. Municipal deposits and interest checking accounts increased $33.0 million and $2.0 million, respectively. Certificates of deposit and demand deposits declined $9.6 million and $8.7 million, respectively.

Shareholder’s Equity

Total shareholders’ equity was $56.6 million as of March 31, 2022, compared to $57.8 million as of December 31, 2021. During the first quarter of 2022, the net unrealized loss in our investment portfolio caused a $2.8 million decline in accumulated other comprehensive income (“AOCI”) from $272 thousand as of December 31, 2021 to an accumulated other comprehensive loss of $2.5 million as of March 31, 2022. The decline in AOCI was caused by higher interest rates and the widening spreads in our government agency sponsored bonds and mortgage-backed securities. We have minimal credit risk in the investment portfolio. As a result of the decrease in shareholders’ equity, tangible book value per share decreased $0.22, or 1.8%, from $12.23 as of December 31, 2021 to $12.01 as of March 31, 2022.

Asset Quality

Non-performing assets as of March 31, 2022 were $3.3 million compared to $3.5 million as of December 31, 2021. The ratio of non-performing assets to total assets as of March 31, 2022 was 0.48% compared to 0.52% as of December 31, 2021. As of March 31, 2022, the allowance was $7.3 million, or 1.37% of total loans. The allowance to non-accrual loans was 220.9% as of March 31, 2022, compared to 195.9% as of December 31, 2021.

Income Statement and Other Highlights:

Highlights as of March 31, 2022 and December 31, 2021, and a comparison of the three months ended March 31, 2022 to the three months ended March 31, 2021 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,

2022

2021

Interest income

$

6,421

$

5,546

Interest expense

 

650

 

773

Net Interest Income

 

5,771

 

4,773

Provision for loan losses

 

300

 

240

Net interest income after provision for loan losses

 

5,471

 

4,533

Non-interest income

 

1,480

 

2,595

Non-interest expense

 

4,585

 

4,813

Income before taxes

 

2,366

 

2,315

Income tax expense

 

707

 

662

Net Income

$

1,659

$

1,653

Earnings Per Share – Basic

$

0.35

$

0.33

Earnings Per Share – Diluted

$

0.34

$

0.33

 

 

 

SELECTED PERFORMANCE RATIOS:

 

For the three months

ended March 31, 2022

 

For the three months

ended March 31, 2021

 

Return on Average Assets

 

0.96

%

 

1.04

%

Return on Average Equity

 

11.69

%

 

12.43

%

Book value per share

$

12.01

 

$

11.04

 

 

 

 

 

As of March 31, 2022

 

As of December 31, 2021

Bank Capital ratios:

Tier 1 Leverage

 

9.60

%

 

 

9.22

%

Total Risk Based Capital

 

14.45

%

 

 

15.37

%

Common Equity Tier 1

 

13.20

%

 

 

14.11

%

 
 

1st COLONIAL BANCORP, INC.

CONSOLIDATED BALANCE SHEETS

 

(Unaudited, in thousands)

As of March 31, 2022

As of December 31, 2021

Cash and cash equivalents

$

26,128

 

$

40,877

 

Total investments

 

106,864

 

 

111,807

 

Mortgage loans held for sale

 

11,418

 

 

9,957

 

Total loans

 

535,224

 

 

501,883

 

Less allowance for loan losses

 

(7,343

)

 

(6,906

)

Loans and leases, net

 

527,881

 

 

494,977

 

Bank owned life insurance

 

16,263

 

 

16,160

 

Premises and equipment, net

 

993

 

 

1,072

 

Accrued interest receivable

 

1,680

 

 

1,664

 

Other assets

 

6,558

 

 

6,320

 

Total Assets

$

697,785

 

$

682,834

 

 

Total deposits

$

625,984

 

$

610,477

 

Subordinated debt

 

10,449

 

 

 

10,440

 

Other liabilities

 

4,778

 

 

4,100

 

Total Liabilities

 

641,211

 

 

 

625,017

 

Total Shareholders’ Equity

 

56,574

 

 

57,817

 

Total Liabilities and Shareholders’ Equity

$

697,785

 

$

682,834

 

 

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, 2022

March 31, 2021

 

Average

Balance

Interest

Yield

Average

Balance

Interest

Yield

Cash and cash equivalents

$

41,227

$

15

0.15

%

$

27,625

$

7

0.10

%

Investment securities

 

110,342

 

378

1.39

%

 

135,255

 

461

1.38

%

Mortgage loans held for sale

 

 

11,016

 

 

81

 

2.98

%

 

 

22,255

 

 

120

 

2.19

%

Loans

 

 

513,770

 

5,947

4.69

%

 

435,271

 

4,958

4.62

%

Total interest-earning assets

 

 

676,355

 

6,421

3.85

%

 

620,406

 

5,546

3.63

%

Non-interest earning assets

 

22,633

 

 

21,370

 

Total average assets

$

698,988

$

641,776

 

Interest-bearing deposits

NOW and money markets

$

283,404

$

86

0.12

%

$

250,347

$

117

0.19

%

Savings

 

129,219

 

92

0.29

%

 

117,507

 

84

0.29

%

Certificates of deposit

 

122,900

 

275

0.91

%

 

114,454

 

375

1.33

%

Total interest-bearing deposits

 

535,523

 

453

0.34

%

 

482,308

 

576

0.48

%

Borrowings

 

10,535

 

197

7.58

%

 

12,735

 

197

6.27

%

Total interest-bearing liabilities

 

546,058

 

650

0.48

%

 

495,043

 

773

0.63

%

Non-interest bearing deposits

 

91,335

 

88,649

Other liabilities

 

4,026

 

4,142

Total average liabilities

 

 

641,419

 

 

 

 

 

 

587,834

 

 

 

 

Shareholders’ equity

 

57,569

 

53,942

Total average liabilities and equity

$

698,988

$

641,776

Net interest income

$

5,771

$

4,773

Net interest margin

3.46

%

3.12

%

Net interest spread

3.37

%

3.00

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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 including rising inflation and supply chain shortages; 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.

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