Read Time:35 Minute, 36 Second
LAKEWOOD, NJ / ACCESSWIRE / July 27, 2023 / As previously reported, First Commerce Bank (the “Bank”) completed its reorganization into First Commerce Bancorp, Inc. (the “Company”) to form a bank holding company. Each shareholder of the Bank received one share of the Company’s common stock in exchange for each share of the Bank’s common stock. Following the reorganization, the Company’s stock began trading on the OTC market under the symbol CMRB.
In addition, First Commerce Bancorp, Inc., (OTC:CMRB), the holding company for First Commerce Bank, today reported net income of $2.9 million and $6.2 million, respectively, for the three and six months ended June 30, 2023, as compared to $2.9 million and $7.1 million, respectively, for the three and six months ended June 30, 2022. Basic earnings per common share for the three and six months ended June 30, 2023, was $0.12 and $0.26 respectively, compared to $0.12 and $0.30 for the three and six months ended June 30, 2022.
The Company’s Board of Directors declared a quarterly cash dividend of $0.04 per common share payable on August 18, 2023 to shareholders of record on August 7, 2023.
Donald Mindiak, President & Chief Executive Officer, commented, “This has been a challenging time for the banking industry as we navigate through a volatile operational and interest rate environment. Competition for low-cost funding remains extremely competitive and we are engaged in initiatives to maintain our strong liquidity position. We remain confident that our healthy capital ratios provide a sense of comfort and confidence to our shareholders and customers alike regarding the strength of this institution. We continue to practice prudent risk mitigation techniques to manage our balance sheet judiciously. Despite the market volatility, we have realized growth in the loan portfolio of $110.4 million year-to-date. The Bank continues to produce competitive operating results, and while these results were negatively impacted by the costs associated with maintaining on-balance sheet liquidity, our management team continues to employ strategies to effectively manage non-interest expenses. We remain committed to enhancing franchise and shareholder value by addressing the financial needs of the communities we serve.”
Financial Highlights
- Net interest margin decreased by 84 basis points to 3.16% for the second quarter of 2023 as compared to 4.00% for the second quarter of 2022 and decreased by 77 basis points to 3.25% year-to-date for 2023 as compared to 4.02% year-to-date for 2022.
- Total yield on interest earning assets increased by 114 basis points to 5.42% for the second quarter of 2023 as compared to 4.28% for the second quarter of 2022 and increased by 100 basis points to 5.29% year-to-date for 2023 as compared to 4.29% year-to-date for 2022.
- The average cost of funds increased by 223 basis points to 2.55% for the second quarter of 2023 compared to 0.32% for the second quarter of 2022 and increased by 201 basis points to 2.32% year-to-date for 2023 as compared to 0.31% year-to-date for 2022.
- The efficiency ratio was 61.54% year-to-date for 2023 as compared to 56.37% year-to-date for 2022.
- Loans receivable, net increased by $109.4 million or 9.9% to $1.2 billion at June 30, 2023, as compared to $1.1 billion at December 31, 2022.
- The net loans to deposits ratio increased to 109.49% at June 30, 2023, from 101.34% at June 30, 2022.
- Return on average assets year-to-date was 0.93% at June 30, 2023 compared to 1.24% at June 30, 2022.
- Return on average equity year-to-date was 6.87% at June 30, 2023 compared to 8.12% at June 30, 2022.
Balance Sheet Review
Total assets increased by $133.9 million or 10.4% to $1.43 billion at June 30, 2023 from $1.29 billion at December 31, 2022. The increase in total assets was primarily related to increases in cash and cash equivalents and total loans, partially offset by decreases in total investment securities and other real estate owned (“OREO”).
Total cash and cash equivalents increased by $31.5 million or 74.1% to $74.1 million at June 30, 2023 from $42.6 million at December 31, 2022. This increase was primarily due to an increase in Federal Home Loan Bank (“FHLB”) advances of $61.0 million or 103.4% to $120.0 million at June 30, 2023 from $59.0 million at December 31, 2022 and an increase in deposits of $70.7 million or 6.8% to $1.10 billion at June 30, 2023 from $1.03 billion at December 31, 2022. The increase in FHLB advances was the result of the Company’s decision to enhance its liquidity position.
Loans receivable, net, increased by $109.4 million or 9.9% to $1.2 billion at June 30, 2023 from $1.1 billion at December 31, 2022. Total loan increases during the six months ended June 30, 2023 occurred primarily as a result of a $102.2 million increase in commercial mortgages, a $13.8 million increase in construction loans and a $1.7 million increase in Small Business Administration loans, partially offset by a $6.4 million decrease in commercial loans. The allowance for credit losses increased by $982,000 or 5.5% to $18.8 million or 1.53% of gross loans at June 30, 2023 as compared to $17.8 million or 1.59% of gross loans at December 31, 2022.
Total investment securities decreased by $6.4 million or 8.0% to $73.3 million at June 30, 2023 from $79.7 million at December 31, 2022. The decrease in investment securities resulted primarily from $5.1 million in mortgage-backed security amortization, $700,000 in agency bond maturities and $645,000 in municipal bond maturities.
Total deposits increased by $70.7 million or 6.8% to $1.10 billion at June 30, 2023 from $1.03 billion at December 31, 2022. The increase in total deposits occurred primarily as a result of a $135.7 million increase in time deposits, partially offset by decreases of $25.5 million in savings deposits, $20.1 million in noninterest-bearing demand deposits, $11.0 million in money market deposits, $5.7 million in NOW deposits and $5.0 million in interest checking deposits.
Stockholders’ equity increased by $4.5 million or 2.5% to $184.9 million at June 30, 2023 from $180.4 million at December 31, 2022. The increase in stockholders’ equity was primarily attributable to net income of $6.2 million for the six months ended June 30, 2023 and an increase of $58,000 in additional paid in capital as a result of the exercise of certain stock options, partially offset by the distribution of $1.9 million in cash dividends to shareholders and a decrease of $14,000 in other comprehensive income.
Three Months of Operations
Net interest income decreased by $661,000 or 5.9% to $10.6 million for the three months ended June 30, 2023 from $11.3 million for the three months ended June 30, 2022. The decrease in net interest income was primarily due to a significant increase in the cost of interest-bearing liabilities.
Total interest income increased by $6.1 million or 51.0% to $18.2 million for the three months ended June 30, 2023 from $12.0 million for the three months ended June 30, 2022. Interest income on loans, including fees, increased $5.7 million or 49.9% to $17.0 million for the three months ended June 30, 2023 compared to $11.4 million for the three months June 30, 2022. The increase in interest income from loans, including fees, resulted primarily from an increase in the average balance of loans receivable of $250.4 million or 26.0% to $1.2 billion for the three months ended June 30, 2023 compared to $964.3 million for the three months ended June 30, 2022 and an increase of ninety basis points in the average yield on loans to 5.62% for the three months ended June 30, 2023 compared to 4.72% for the same period in the prior year. Loan fees increased $112,000 or 48.3% to $343,000 for the three months ended June 30, 2023 from $231,000 for the three months ended June 30, 2022. The increase in loan fees is primarily related to fees collected from prepayment penalties and an increase in commercial loan fees. Interest income on interest-bearing deposits with banks increased $378,000 or 253.7% to $527,000 for the three months ended June 30, 2023 as compared to $149,000 for the same period in the prior year. This increase resulted from a significantly higher average yield on interest-bearing deposits with banks of 4.47% for the three months ended June 30, 2023 compared to 0.77% for the same period in the prior year, and an increase of $36.4 million in average balances of interest-bearing deposits with banks year over year.
Total interest expense increased by $6.8 million or 884.4% to $7.6 million for the three months ended June 30, 2023 from $768,000 for the three months ended June 30, 2022. The increase in interest expense occurred primarily as a result of a 265 basis points increase in the average cost of interest-bearing liabilities to 3.06% for the three months ended June 30, 2023 from 0.41% for the three months ended June 30, 2022 and an increase in average balance of interest-bearing liabilities of $240.0 million or 31.9%, to $991.5 million for the three months ended June 30, 2023 from $751.5 million for the three months ended June 30, 2022. The increase in average balance of interest-bearing liabilities included a $106.3 million increase in average interest-bearing deposit liabilities and a $133.7 million increase in average wholesale borrowings for the three months ended June 30, 2023. The Bank had no wholesale borrowings at June 30, 2022. The increase in the average cost of interest-bearing liabilities resulted primarily from a significant increase in market interest rates over the past several quarters. The increase in interest-bearing liabilities was primarily used to support loan growth.
Net interest margin decreased by eighty-four basis points to 3.16% for the three months ended June 30, 2023 compared to 4.00% for the three months ended June 30, 2022. The decrease in the net interest margin is primarily attributable to a significant increase in the average cost of interest-bearing liabilities to 3.06% for the three months ended June 30, 2023 from 0.41% for the three months ended June 30, 2022 and an increase in the average balance of interest-bearing liabilities to $991.5 million for the three months ended June 30, 2023 from $751.5 million for the three months ended June 30, 2022. These increases were partially offset by an increase in average balance of interest earning assets of $219.7 million or 19.5% to $1.34 billion for the three months ended June 30, 2023 compared to $1.13 billion for the three months ended June 30, 2022 and an increase in the average yield of interest earning assets to 5.42% for the three months ended June 30, 2023 from 4.28% for the three months ended June 30, 2022.
Non-interest income increased by $20,000 or 6.1% to $347,000 for the three months ended June 30, 2023 from $327,000 for the three months ended June 30, 2022. The increase in total non-interest income resulted primarily from an increase in service charges and fees of $14,000 or 9.2% to $167,000 for the three months ended June 30, 2023 from $153,000 for the three months ended June 30, 2022. All other variances within non-interest income were not material.
Non-interest expense increased by $536,000 or 8.4% to $6.95 million for the three months ended June 30, 2023 compared to $6.42 million for the three months ended June 30, 2022. Salaries and employee benefits increased by $445,000 or 11.4% to $4.34 million for the three months ended June 30, 2023 as compared to $3.89 million for the three months ended June 30, 2022. The increase in salaries and employee benefits resulted primarily due to additions to staff, payout of separation cost, increase in employee incentive plan cost and a moderate increase in health care benefits. Advertising and marketing expense increased by $47,000 or 90.4% to $99,000 for the three months ended June 30, 2023 from $52,000 for the three months ended June 30, 2022. Marketing expense increased as a result of the Bank utilizing resources to build our brand and attract retail deposits. Professional fees increased by $231,000 or 63.8% to $593,000 for the three months ended June 30, 2023 from $362,000 for the three months ended June 30, 2022 as a result of increased fees related to the formation of the bank holding company and the initiative to up list to the Nasdaq Capital Market exchange. Data processing costs increased by $41,000 or 23.0% to $219,000 for the three months ended June 30, 2023 from $178,000 for the three months ended June 30, 2022. FDIC insurance assessment increased by $80,000 or 53.3% to $230,000 for the three months ended June 30, 2023 from $150,000 for the three months ended June 30, 2022 as a result of an increased deposit insurance assessment rate. Other expenses decreased by $318,000 or 32.8% to $651,000 for the three months ended June 30, 2023 from $969,000 for the three months ended June 30, 2022. Other expenses are primarily comprised of miscellaneous loan expense, telephone, subscriptions, software maintenance and depreciation, office supplies and computer supplies. The decrease in other expenses resulted from a $399,000 reduction in miscellaneous loan expense with the offsetting variances in various components of other expenses.
The income tax provision decreased by $104,000 or 10.2% to $914,000 for the three months ended June 30, 2023 from $1.0 million for the three months ended June 30, 2022. The decrease in the income tax provision resulted primarily from a decrease in the effective tax rate to 24.0% in the second quarter of 2023 as compared to 25.7% in the second quarter of 2022.
Six Months of Operations
Net interest income decreased by $1.1 million or 5.1% to $21.1 million for the six months ended June 30, 2023 from $22.3 million for the six months ended June 30, 2022.
Total interest income increased by $10.7 million or 45.0% to $34.4 million for the six months ended June 30, 2023 from $23.7 million for the six months ended June 30, 2022. Interest income on loans, including fees, increased $9.7 million or 42.9% year over year resulting primarily from an increase in the average balance of loans receivable of $238.8 million or 25.3% to $1.2 billion for the six months ended June 30, 2023 compared to $943.8 million for the six months ended June 30, 2022 and an increase of sixty-eight basis points in the average yield on loans to 5.49% for the six months ended June 30, 2023 from 4.81% for the six months ended June 30, 2022. Fee income from loans decreased $683,000 for the six months ended June 30, 2023 primarily due to declines in both prepayment penalty fees and Paycheck Protection Program fees of $431,000 and $396,000, respectively, partially offset by an increase of $115,000 in commercial loan fees compared to the same period in the prior year. Interest income on investments securities increased $107,000 or 10.9% as a result of increase in average balance of investment securities of $14.1 million or 22.4% to $77.1 million for the six months ended June 30, 2023 from $63.0 million for the six months ended June 30, 2022. Interest income on interest-bearing deposits with banks increased $771,000 or 372.5% to $978,000 for the six months ended June 30, 2023 compared to $207,000 for the same period in the prior year. This increase resulted from a significantly higher average yield on interest-bearing deposits with banks of 4.27% for the six months ended June 30, 2023 compared to 0.39% for the same period in the prior year, despite a decline of $59.9 million in average balances of interest-bearing deposits with banks year over year.
Total interest expense increased by $11.8 million or 797.2% to $13.3 million for the six months ended June 30, 2023 from $1.5 million for the six months ended June 30, 2022. The increase in interest expense occurred primarily as a result of an increase in the average cost of interest-bearing liabilities of 201 basis points to 2.32% for the six months ended June 30, 2023 from 0.31% for the six months ended June 30, 2022, coupled with an increase in average balance of interest-bearing liabilities of $211.8 million or 28.4% to $956.8 million for the six months ended June 30, 2023 from $745.0 million for the six months ended June 30, 2022. The average balance of interest-bearing liabilities included a $109.7 million increase in average interest-bearing deposit liabilities and a $102.0 million increase in average wholesale borrowings for the six months ended June 30, 2023. The Bank had no wholesale borrowings at June 30, 2022. The increase in the average cost of interest-bearing liabilities resulted primarily from a significant increase in market interest rates over the past eighteen months as the Federal Reserve Bank has embarked on their strategy of reducing forty years high inflation rates by systematically tightening short-term interest rates.
Net interest margin decreased by seventy-seven basis points to 3.25% for the six months ended June 30, 2023 compared to 4.02% for the six months ended June 30, 2022. The decrease in the net interest margin is primarily attributable to a significant increase in the cost of interest-bearing liabilities and increase in the average balance of interest-bearing liabilities year over year, partially offset by an increase in the average balance of interest earning assets of $197.8 million or 17.8% to $1.3 billion for the six months ended June 30, 2023 compared to $1.1 billion for the six months ended June 30, 2022, as well as an increase of 100 basis points on the yield of average interest earning assets to 5.29% for the six months ended June 30, 2023 from 4.29% for the six months ended June 30, 2022.
Non-interest income increased by $535,000 or 77.9% to $1.2 million for the six months ended June 30, 2023 from $687,000 for the six months ended June 30, 2022. The increase in total non-interest income resulted primarily from an increase in Bank owned life insurance (“BOLI”) income of $523,000 or 160.4% to $849,000 for the six months ended June 30, 2023 from $326,000 for the six months ended June 30, 2022. The increase in BOLI income resulted from a one-time benefit received on the Bank’s investment in BOLI.
Non-interest expense increased by $816,000 or 6.3% to $13.7 million for the six months ended June 30, 2023 compared to $12.9 million for the six months ended June 30, 2022. Salaries and employee benefits increased by $552,000 or 6.9% to $8.6 million for the six months ended June 30, 2023 as compared to $8.1 million for the six months ended June 30, 2022. The increase in salaries and employee benefits resulted primarily due to additions to staff year-over-year as well as increased employee incentive plan cost. Occupancy and equipment expense increased by $41,000 or 2.3% to $1.81 million for the six months ended June 30, 2023 as compared to $1.77 million for the six months ended June 30, 2022. Marketing expense increased by $96,000 or 102.1% to $190,000 for the six months ended June 30, 2023 from $94,000 for the six months ended June 30, 2022. Marketing expense increased as a result of the Bank utilizing resources to build our brand and attract retail deposits. Professional fees increased by $251,000 or 31.3% to $1.05 million for the six months ended June 30, 2023 from $803,000 for the six months ended June 30, 2022 as a result of increased fees related to the bank holding company reorganization application and the initiative to up list to the Nasdaq Capital Market exchange. Data processing costs increased by $79,000 or 22.1% to $437,000 for the six months ended June 30, 2023 from $358,000 for the six months ended June 30, 2022. FDIC assessment decreased by $53,000 or 16.0% to $279,000 for the six months ended June 30, 2023 from $332,000 for the six months ended June 30, 2022 primarily due to a lower deposit insurance assessment rate in effect during the first six months of 2023 compared to the first six months of 2022. Other expenses decreased by $212,000 or 13.9% to $1.31 million for the six months ended June 30, 2023 from $1.53 million for the six months ended June 30, 2022. Other expenses are primarily comprised of miscellaneous loan expense, telephone, subscriptions, software maintenance and depreciation, office supplies and computer supplies. These decreases were partially offset by a $59,000 loss recorded on the sale of OREO for the six months ended June 30, 2023 compared to a gain on sale of OREO of $3,000 for the six months ended June 30, 2022.
The income tax provision decreased by $460,000 or 18.9% to $1.97 million for the six months ended June 30, 2023 from $2.43 million for the six months ended June 30, 2022. The decrease in the income tax provision resulted primarily from a decrease in earnings before income taxes of $1.35 million or 14.1%, which included additional non-taxable income of $510,000 for the one-time benefit from BOLI investment, to $8.22 million for the six months ended June 30, 2023 from $9.57 million for the six months ended June 30, 2022. The effective tax rate for the six months ended June 30, 2023 was 24.0% as compared to 25.4% for the six months ended June 30, 2022.
Asset Quality
The allowance for credit losses increased by $982,000 and $519,000 respectively, to $18.76 million or 1.53% of gross loans at June 30, 2023 as compared to $17.78 million or 1.59% of gross loans at December 31, 2022 and $18.24 million or 1.81% of gross loans at June 30, 2022. Changes in the allowance for credit losses are calculated and adjusted quarterly, relative to those identified parameters within CECL which include, but are not necessarily limited to; loan growth, expected credit losses, economic conditions and forecasts. Total loans increased by $110.4 million or 9.9% and $222.8 million or 22.2% respectively, to $1.23 billion at June 30, 2023 from $1.12 billion at December 31, 2022 and $1.01 billion at June 30, 2022.
The Bank had non-accrual loans totaling $15.7 million or 1.28% of gross loans at June 30, 2023 as compared to $12.7 million or 1.14% of gross loans at December 31, 2022 and $13.6 million or 1.35% of gross loans at June 30, 2022. Non-accrual loans increased by $3.0 or 23.8% to $15.7 million at June 30, 2023 from $12.7 million at December 31, 2022 and OREO balances decreased by $4.0 million or 100% to no OREO at June 30, 2023 from $4.0 million at December 31, 2022.
The allowance for credit losses was 119.3% of non-accrual loans at June 30, 2023, 139.6% of non-accrual loans at December 31, 2022 and 134.2% of non-accrual loans at June 30, 2022.
About First Commerce Bancorp, Inc.
First Commerce Bancorp, Inc, is a financial services organization headquartered in Lakewood, New Jersey. The Bank, the Company’s wholly owned subsidiary, provides businesses and individuals a wide range of loans, deposit products and retail and commercial banking services through its branch network located in Allentown, Bordentown, Closter, Englewood, Fairfield, Freehold, Lakewood, Montvale, Robbinsville and Teaneck, New Jersey, with a new office in Jackson anticipated to open during the third quarter of 2023. For more information, please go to www.firstcommercebk.com.
Forward-Looking Statements
This release, like many written and oral communications presented by First Commerce Bancorp Inc., and our authorized officers, may contain certain forward-looking statements regarding our prospective performance and strategies within the meaning of Section 27A of the Securities Act of 1933 as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and are including this statement for purposes of said safe harbor provisions. Forward-looking statements, which are based on certain assumptions and describe future plans, strategies, and expectations of the Company, are generally identified by use of the words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “plan,” “project,” “seek,” “strive,” “try,” or future or conditional verbs such as “could,” “may,” “should,” “will,” “would,” or similar expressions. Our ability to predict results or the actual effects of our plans or strategies is inherently uncertain. Accordingly, actual results may differ materially from anticipated results.
In addition to the factors previously disclosed in prior Bank communications and those identified elsewhere, the following factors, among others, could cause actual results to differ materially from forward-looking statements or historical performance: the impact of changes in interest rates and in the credit quality and strength of underlying collateral and the effect of such changes on the market value of First Commerce Bank’s investment securities portfolio; changes in asset quality and credit risk; the inability to sustain revenue and earnings growth; difficult market conditions and unfavorable economic trends in the United States generally, and particularly in the market areas in which First Commerce Bank operates and in which its loans are concentrated, including the effects of declines in housing market values; the effects of the recent turmoil in the banking industry (including the failures of two financial institutions); inflation; customer acceptance of the Bank’s products and services; customer borrowing, repayment, investment and deposit practices; customer disintermediation; the introduction, withdrawal, success and timing of business initiatives; competitive conditions; the inability to realize cost savings or revenues or to implement integration plans and other consequences associated with certain corporate initiatives; economic conditions; and the impact, extent and timing of technological changes, capital management activities, and actions of governmental agencies and legislative and regulatory actions and reforms.
First Commerce Bancorp, Inc.
Consolidated Balance Sheets
(Unaudited)
| June 30, 2023 vs. | ||||||||||||||||||||||||||||
| December 31, 2022 |
June 30, 2022 |
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(In thousands, except percentages) |
June 30, 2023 |
December 31, 2022 | June 30, 2022 |
Amount | % | Amount | % | |||||||||||||||||||||
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Assets |
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Cash and cash equivalents: |
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|
Cash on hand |
$ | 1,532 | $ | 1,686 | $ | 1,541 | $ | (154 | ) | -9.1 | % | $ | (9 | ) | -0.6 | % | ||||||||||||
|
Interest bearing deposits in other banks |
72,591 | 40,899 | 35,597 | 31,692 | 77.5 | % | 36,994 | 103.9 | % | |||||||||||||||||||
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Total cash and cash equivalents |
74,123 | 42,585 | 37,138 | 31,538 | 74.1 | % | 36,985 | 99.6 | % | |||||||||||||||||||
|
Investment securities held to maturity, at amortized cost |
61,719 | 65,788 | 70,268 | (4,069 | ) | -6.2 | % | (8,549 | ) | -12.2 | % | |||||||||||||||||
|
Investment securities available for sale, at fair value |
11,566 | 13,902 | 16,327 | (2,336 | ) | -16.8 | % | (4,761 | ) | -29.2 | % | |||||||||||||||||
|
Total investment securities |
73,285 | 79,690 | 86,595 | (6,405 | ) | -8.0 | % | (13,310 | ) | -15.4 | % | |||||||||||||||||
|
Federal Home Loan Bank stock |
6,719 | 3,699 | 1,044 | 3,020 | 81.6 | % | 5,675 | 543.6 | % | |||||||||||||||||||
|
Loans receivables |
1,228,451 | 1,118,081 | 1,005,640 | 110,370 | 9.9 | % | 222,811 | 22.2 | % | |||||||||||||||||||
|
Less: Allowance for credit losses |
(18,763 | ) | (17,781 | ) | (18,244 | ) | (982 | ) | 5.5 | % | (519 | ) | 2.8 | % | ||||||||||||||
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Net loans |
1,209,688 | 1,100,300 | 987,396 | 109,388 | 9.9 | % | 222,292 | 22.5 | % | |||||||||||||||||||
|
Premises and equipment |
15,864 | 15,725 | 16,164 | 139 | 0.9 | % | (300 | ) | -1.9 | % | ||||||||||||||||||
|
Right-of-use asset |
9,707 | 9,913 | 9,178 | (206 | ) | -2.1 | % | 529 | 5.8 | % | ||||||||||||||||||
|
Bank owned life insurance |
25,360 | 25,781 | 25,441 | (421 | ) | -1.6 | % | (81 | ) | -0.3 | % | |||||||||||||||||
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Other real estate owned |
– | 3,971 | 4,345 | (3,971 | ) | -100.0 | % | (4,345 | ) | -100.0 | % | |||||||||||||||||
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Deferred tax asset |
4,181 | 4,436 | 4,134 | (255 | ) | -5.7 | % | 47 | 1.1 | % | ||||||||||||||||||
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Accrued interest receivable |
5,336 | 4,638 | 4,032 | 698 | 15.0 | % | 1,304 | 32.3 | % | |||||||||||||||||||
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Other assets |
1,740 | 1,388 | 1,266 | 352 | 25.4 | % | 474 | 37.4 | % | |||||||||||||||||||
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Total assets |
$ | 1,426,003 | $ | 1,292,126 | $ | 1,176,733 | $ | 133,877 | 10.4 | % | $ | 249,270 | 21.2 | % | ||||||||||||||
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Liabilities and Stockholders’ Equity |
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Liabilities |
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Deposits: |
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Non-interest bearing |
$ | 191,736 | $ | 209,680 | $ | 224,217 | $ | (17,944 | ) | -8.6 | % | $ | (32,481 | ) | -14.5 | % | ||||||||||||
|
Interest bearing |
913,147 | 824,520 | 750,125 | 88,627 | 10.7 | % | 163,022 | 21.7 | % | |||||||||||||||||||
|
Total Deposits |
1,104,883 | 1,034,200 | 974,342 | 70,683 | 6.8 | % | 130,541 | 13.4 | % | |||||||||||||||||||
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Borrowings |
120,000 | 59,000 | – | 61,000 | 103.4 | % | 120,000 | 0.0 | % | |||||||||||||||||||
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Accrued interest payable |
1,592 | 993 | 117 | 599 | 60.3 | % | 1,475 | 1260.7 | % | |||||||||||||||||||
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Lease liability |
10,311 | 10,453 | 9,661 | (142 | ) | -1.4 | % | 650 | 6.7 | % | ||||||||||||||||||
|
Other liabilities |
4,337 | 7,090 | 12,442 | (2,753 | ) | -38.8 | % | (8,105 | ) | -65.1 | % | |||||||||||||||||
|
Total liabilities |
1,241,123 | 1,111,736 | 996,562 | 129,387 | 11.6 | % | 244,561 | 24.5 | % | |||||||||||||||||||
|
Commitments and contingencies |
– | – | – | – | – | |||||||||||||||||||||||
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Stockholders’ equity |
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Preferred stock |
– | – | – | – | N/A | – | N/A | |||||||||||||||||||||
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Common stock |
– | 47,570 | 47,346 | (47,570 | ) | N/A | (47,346 | ) | N/A | |||||||||||||||||||
|
Additional paid-in capital |
88,650 | 41,022 | 40,847 | 47,628 | 116.1 | % | 47,803 | 117.0 | % | |||||||||||||||||||
|
Retained earnings |
96,553 | 92,107 | 92,019 | 4,446 | 4.8 | % | 4,534 | 4.9 | % | |||||||||||||||||||
|
Accumulated other comprehensive (loss) income |
(323 | ) | (309 | ) | (41 | ) | (14 | ) | 4.5 | % | (282 | ) | 687.8 | % | ||||||||||||||
|
Total stockholders’ equity |
184,880 | 180,390 | 180,171 | 4,490 | 2.5 | % | 4,709 | 2.6 | % | |||||||||||||||||||
|
Total liabilities and stockholders’ equity |
$ | 1,426,003 | $ | 1,292,126 | $ | 1,176,733 | $ | 133,877 | 10.4 | % | $ | 249,270 | 21.2 | % | ||||||||||||||
First Commerce Bancorp, Inc.
Consolidated Statements of Income
For the three months ended June 30, 2023 and 2022
(Unaudited)
| Variance | ||||||||||||||||
|
(In thousands, except percentages and per share amounts) |
June 30, 2023 | June 30, 2022 | Amount | % | ||||||||||||
|
Interest Income |
||||||||||||||||
|
Loans, including fees |
$ | 17,020 | $ | 11,357 | $ | 5,663 | 49.9 | % | ||||||||
|
Investment securities available for sale |
94 | 121 | (27 | ) | -22.3 | % | ||||||||||
|
Investment securities held to maturity |
441 | 394 | 47 | 11.9 | % | |||||||||||
|
Interest-bearing deposits with banks |
527 | 149 | 378 | 253.7 | % | |||||||||||
|
FHLB stock |
81 | 11 | 70 | 636.4 | % | |||||||||||
|
Total interest income |
18,163 | 12,032 | 6,131 | 51.0 | % | |||||||||||
|
Interest expense |
– | |||||||||||||||
|
Deposits |
5,905 | 768 | 5,137 | 668.9 | % | |||||||||||
|
Borrowings |
1,655 | – | 1,655 | N/A | ||||||||||||
|
Total interest expense |
7,560 | 768 | 6,792 | 884.4 | % | |||||||||||
|
Net interest income |
10,603 | 11,264 | (661 | ) | -5.9 | % | ||||||||||
|
Provision for credit losses |
251 | 1,216 | (965 | ) | -79.4 | % | ||||||||||
|
Benefit for unfund commitments for credit losses |
(69 | ) | – | (69 | ) | N/A | ||||||||||
|
Total provision for credit losses and |
182 | 1,216 | (1,034 | ) | -85.0 | % | ||||||||||
|
Net interest income after provision for |
10,421 | 10,048 | 373 | 3.7 | % | |||||||||||
|
Non-interest income |
||||||||||||||||
|
Service charges and fees |
167 | 153 | 14 | 9.2 | % | |||||||||||
|
Bank owned life insurance income |
171 | 164 | 7 | 4.3 | % | |||||||||||
|
Other income |
9 | 10 | (1 | ) | -10.0 | % | ||||||||||
|
Total non-interest income |
347 | 327 | 20 | 6.1 | % | |||||||||||
|
Non-Interest Expenses |
||||||||||||||||
|
Salaries and employee benefits |
4,338 | 3,893 | 445 | 11.4 | % | |||||||||||
|
Occupancy and equipment expense |
824 | 815 | 9 | 1.1 | % | |||||||||||
|
Marketing |
99 | 52 | 47 | 90.4 | % | |||||||||||
|
Professional fees |
593 | 362 | 231 | 63.8 | % | |||||||||||
|
Data processing |
219 | 178 | 41 | 23.0 | % | |||||||||||
|
Loss/(gain) on valuation of OREO |
– | (1 | ) | 1 | -100.0 | % | ||||||||||
|
FDIC assessment |
230 | 150 | 80 | 53.3 | % | |||||||||||
|
Other expenses |
651 | 969 | (318 | ) | -32.8 | % | ||||||||||
|
Total non-interest expenses |
6,954 | 6,418 | 536 | 8.4 | % | |||||||||||
|
Income before income taxes |
3,814 | 3,957 | (143 | ) | -3.6 | % | ||||||||||
|
Income tax expense |
914 | 1,018 | (104 | ) | -10.2 | % | ||||||||||
|
Net income |
$ | 2,900 | $ | 2,939 | $ | (39 | ) | -1.3 | % | |||||||
|
Earnings per common share – Basic |
$ | 0.12 | $ | 0.12 | $ | – | 0.0 | % | ||||||||
|
Earnings per common share – Diluted |
0.12 | 0.12 | – | 0.0 | % | |||||||||||
|
Weighted average shares outstanding – Basic |
23,788 | 23,304 | 484 | 2.1 | % | |||||||||||
|
Weighted average shares outstanding – Diluted |
24,070 | 23,596 | 474 | 2.0 | % | |||||||||||
First Commerce Bancorp, Inc.
Consolidated Statements of Income
For the six months ended June 30, 2023 and 2022
(Unaudited)
| Variance | ||||||||||||||||
|
(In thousands, except percentages and per share amounts) |
June 30, 2023 | June 30, 2022 | Amount | % | ||||||||||||
|
Interest Income |
||||||||||||||||
|
Loans, including fees |
$ | 32,202 | $ | 22,531 | $ | 9,671 | 42.9 | % | ||||||||
|
Investment securities available for sale |
194 | 353 | (159 | ) | -45.0 | % | ||||||||||
|
Investment securities held to maturity |
892 | 626 | 266 | 42.5 | % | |||||||||||
|
Interest-bearing deposits with banks |
978 | 207 | 771 | 372.5 | % | |||||||||||
|
Federal Home Loan Bank stock |
141 | 20 | 121 | 605.0 | % | |||||||||||
|
Total interest income |
34,407 | 23,737 | 10,670 | 45.0 | % | |||||||||||
|
Interest expense |
– | |||||||||||||||
|
Deposits |
10,781 | 1,481 | 9,300 | 628.0 | % | |||||||||||
|
Borrowings |
2,507 | – | 2,507 | 0.0 | % | |||||||||||
|
Total interest expense |
13,288 | 1,481 | 11,807 | 797.2 | % | |||||||||||
|
Net interest income |
21,119 | 22,256 | (1,137 | ) | -5.1 | % | ||||||||||
|
Provision for credit losses |
760 | 441 | 319 | 72.3 | % | |||||||||||
|
Benefit for unfund commitments for credit losses |
(388 | ) | – | (388 | ) | N/A | ||||||||||
|
Total provision for credit losses and |
372 | 441 | (69 | ) | -15.6 | % | ||||||||||
|
Net interest income after provision for |
20,747 | 21,815 | (1,068 | ) | -4.9 | % | ||||||||||
|
Non-interest income |
||||||||||||||||
|
Service charges and fees |
355 | 320 | 35 | 10.9 | % | |||||||||||
|
Bank owned life insurance income |
849 | 326 | 523 | 160.4 | % | |||||||||||
|
Other income |
18 | 41 | (23 | ) | -56.1 | % | ||||||||||
|
Total non-interest income |
1,222 | 687 | 535 | 77.9 | % | |||||||||||
|
Non-Interest Expenses |
||||||||||||||||
|
Salaries and employee benefits |
8,607 | 8,055 | 552 | 6.9 | % | |||||||||||
|
Occupancy and equipment expense |
1,809 | 1,768 | 41 | 2.3 | % | |||||||||||
|
Marketing |
190 | 94 | 96 | 102.1 | % | |||||||||||
|
Professional fees |
1,054 | 803 | 251 | 31.3 | % | |||||||||||
|
Data processing |
437 | 358 | 79 | 22.1 | % | |||||||||||
|
Loss/(gain) on valuation of OREO |
59 | (3 | ) | 62 | -2066.7 | % | ||||||||||
|
FDIC assessment |
279 | 332 | (53 | ) | -16.0 | % | ||||||||||
|
Other expenses |
1,313 | 1,525 | (212 | ) | -13.9 | % | ||||||||||
|
Total non-interest expenses |
13,748 | 12,932 | 816 | 6.3 | % | |||||||||||
|
Income before income taxes |
8,221 | 9,570 | (1,349 | ) | -14.1 | % | ||||||||||
|
Income tax expense |
1,975 | 2,435 | (460 | ) | -18.9 | % | ||||||||||
|
Net income |
$ | 6,246 | $ | 7,135 | $ | (889 | ) | -12.5 | % | |||||||
|
Earnings per common share – Basic |
$ | 0.26 | $ | 0.30 | $ | (0.04 | ) | -13.3 | % | |||||||
|
Earnings per common share – Diluted |
0.26 | 0.30 | (0.04 | ) | -13.3 | % | ||||||||||
|
Weighted average shares outstanding – Basic |
23,787 | 23,596 | 191 | 0.8 | % | |||||||||||
|
Weighted average shares outstanding – Diluted |
24,069 | 23,596 | 473 | 2.0 | % | |||||||||||
First Commerce Bancorp, Inc.
Financial Highlights & Ratios
As of June 30, 2023 and 2022
(Unaudited)
| QTD | QTD | YTD | YTD | |||||||||||||
|
Financial & Operating Ratios |
6/30/2023 | 6/30/2022 | 6/30/2023 | 6/30/2022 | ||||||||||||
|
Yields |
||||||||||||||||
|
Commercial Mortgages |
5.19 | % | 4.50 | % | 4.93 | % | 4.61 | % | ||||||||
|
Construction Loans |
8.29 | % | 5.17 | % | 8.62 | % | 4.97 | % | ||||||||
|
Commercial loans |
7.69 | % | 5.44 | % | 7.52 | % | 5.29 | % | ||||||||
|
Consumer |
3.45 | % | 4.08 | % | 3.57 | % | 3.95 | % | ||||||||
|
Residential Mortgages |
4.80 | % | 4.69 | % | 4.80 | % | 4.74 | % | ||||||||
|
Home Equity |
6.88 | % | 3.98 | % | 6.69 | % | 3.71 | % | ||||||||
|
SBA Loans |
7.55 | % | 5.69 | % | 7.46 | % | 6.42 | % | ||||||||
|
Average Yield on Loans |
5.62 | % | 4.72 | % | 5.49 | % | 4.81 | % | ||||||||
|
DFB Interest Bearing |
4.47 | % | 0.77 | % | 4.27 | % | 0.39 | % | ||||||||
|
Securities |
3.26 | % | 2.70 | % | 3.17 | % | 3.10 | % | ||||||||
|
Average Yield on Interest Earning Assets |
5.42 | % | 4.28 | % | 5.29 | % | 4.29 | % | ||||||||
|
Cost of Funds |
||||||||||||||||
|
Interest bearing |
0.71 | % | 0.33 | % | 0.65 | % | 0.33 | % | ||||||||
|
Money market |
2.43 | % | 0.37 | % | 2.14 | % | 0.36 | % | ||||||||
|
Savings |
0.34 | % | 0.34 | % | 0.33 | % | 0.34 | % | ||||||||
|
Time Deposits |
3.32 | % | 0.53 | % | 3.16 | % | 0.51 | % | ||||||||
|
IRA’s |
2.47 | % | 0.50 | % | 2.27 | % | 0.50 | % | ||||||||
|
Brokered CD’s |
5.72 | % | 0.00 | % | 5.75 | % | 0.00 | % | ||||||||
|
Borrowings |
4.96 | % | 0.00 | % | 4.95 | % | 0.00 | % | ||||||||
|
Average cost of Interest-bearing Liabilities |
3.06 | % | 0.41 | % | 2.80 | % | 0.40 | % | ||||||||
|
Average Cost of Funds |
2.55 | % | 0.32 | % | 2.32 | % | 0.31 | % | ||||||||
|
Risk Based Capital Ratios |
||||||||||||||||
|
Tier 1 leverage capital ratio |
13.34 | % | 15.36 | % | 13.34 | % | 15.36 | % | ||||||||
|
Common equity tier 1 risk-based capital ratio |
14.56 | % | 16.52 | % | 14.56 | % | 16.52 | % | ||||||||
|
Tier 1 risk-based capital ratio |
14.56 | % | 16.52 | % | 14.56 | % | 16.52 | % | ||||||||
|
Total risk-based capital ratio |
15.81 | % | 17.78 | % | 15.81 | % | 17.78 | % | ||||||||
|
Capital conservation buffer |
7.81 | % | 9.78 | % | 7.81 | % | 9.78 | % | ||||||||
|
Tier 1 capital (in thousands) |
$ | 185,193 | $ | 180,198 | $ | 185,193 | $ | 180,198 | ||||||||
|
Tier 2 capital (in thousands) |
$ | 201,146 | $ | 193,912 | $ | 201,146 | $ | 193,912 | ||||||||
|
Other Ratios |
||||||||||||||||
|
ALLL/Gross loans |
1.53 | % | 1.81 | % | 1.53 | % | 1.81 | % | ||||||||
|
Total investments/Total assets |
5.14 | % | 7.36 | % | 5.14 | % | 7.36 | % | ||||||||
|
Net loans/Total assets |
84.83 | % | 83.91 | % | 84.83 | % | 83.91 | % | ||||||||
|
Net loans/Total deposits |
109.49 | % | 101.34 | % | 109.49 | % | 101.34 | % | ||||||||
|
Return on average total assets |
0.84 | % | 1.00 | % | 0.93 | % | 1.24 | % | ||||||||
|
Return on average shareholders’ equity |
6.30 | % | 6.57 | % | 6.87 | % | 8.12 | % | ||||||||
|
Net interest margin |
3.16 | % | 4.00 | % | 3.25 | % | 4.02 | % | ||||||||
|
Interest spread |
2.83 | % | 3.92 | % | 2.92 | % | 3.93 | % | ||||||||
|
Efficiency ratio |
63.50 | % | 55.37 | % | 61.54 | % | 56.37 | % | ||||||||
|
Legal lending limit |
$ | 30,172 | $ | 29,087 | $ | 30,172 | $ | 29,087 | ||||||||
First Commerce Bancorp, Inc.
Selected Quarterly Financial Data
(Unaudited)
| As of and for the quarters ended | ||||||||||||||||||||
|
(In thousands, except per share data) |
6/30/2023 | 3/31/2023 | 12/31/2022 | 9/30/2022 | 6/30/2022 | |||||||||||||||
|
Summary earnings: |
||||||||||||||||||||
|
Interest income |
$ | 18,163 | $ | 16,244 | $ | 15,289 | $ | 13,941 | $ | 12,032 | ||||||||||
|
Interest expense |
7,560 | 5,728 | 3,520 | 1,599 | 768 | |||||||||||||||
|
Net interest income |
10,603 | 10,516 | 11,769 | 12,342 | 11,264 | |||||||||||||||
|
Provision (benefit) for credit losses |
182 | 190 | (114 | ) | (685 | ) | 1,216 | |||||||||||||
|
Net interest income after provision (benefit) for credit losses |
10,421 | 10,326 | 11,883 | 13,027 | 10,048 | |||||||||||||||
|
Non-interest income |
347 | 875 | 411 | 406 | 327 | |||||||||||||||
|
Non-interest expenses |
6,954 | 6,794 | 7,156 | 6,273 | 6,418 | |||||||||||||||
|
Income before income tax expense |
3,814 | 4,407 | 5,138 | 7,160 | 3,956 | |||||||||||||||
|
Income tax expense |
914 | 1,061 | 1,127 | 1,712 | 1,018 | |||||||||||||||
|
Net income |
$ | 2,900 | $ | 3,346 | $ | 4,011 | $ | 5,448 | $ | 2,939 | ||||||||||
|
Per share data: |
||||||||||||||||||||
|
Net income per common share – basic |
$ | 0.12 | $ | 0.14 | $ | 0.17 | $ | 0.23 | $ | 0.12 | ||||||||||
|
Net income per common share – diluted |
0.12 | 0.14 | 0.17 | 0.23 | 0.12 | |||||||||||||||
|
Cash dividends paid per common share |
0.04 | 0.04 | 0.04 | 0.35 | – | |||||||||||||||
|
Book value at period end |
7.77 | 7.79 | 7.58 | 7.45 | 7.61 | |||||||||||||||
|
Shares outstanding at period end |
23,789 | 23,785 | 23,785 | 23,785 | 23,673 | |||||||||||||||
|
Weighted average shares outstanding – basic |
23,788 | 23,785 | 23,785 | 23,743 | 23,304 | |||||||||||||||
|
Weighted average shares outstanding – diluted |
24,070 | 24,164 | 24,176 | 24,124 | 23,596 | |||||||||||||||
|
Balance sheet data (at period end): |
||||||||||||||||||||
|
Total assets |
$ | 1,426,003 | $ | 1,382,231 | $ | 1,292,127 | $ | 1,249,389 | $ | 1,176,733 | ||||||||||
|
Securities, available for sale |
11,566 | 12,891 | 13,902 | 14,371 | 16,327 | |||||||||||||||
|
Securities, held to maturity |
61,719 | 64,135 | 65,788 | 69,736 | 70,268 | |||||||||||||||
|
Total loans |
1,228,451 | 1,188,898 | 1,118,081 | 1,082,210 | 1,005,640 | |||||||||||||||
|
Allowance for credit losses |
(18,763 | ) | (18,563 | ) | (17,781 | ) | (17,652 | ) | (18,244 | ) | ||||||||||
|
Total deposits |
1,104,883 | 1,045,473 | 1,034,200 | 1,010,137 | 974,342 | |||||||||||||||
|
Shareholders’ equity |
184,880 | 182,977 | 180,390 | 177,246 | 180,171 | |||||||||||||||
|
Common cash dividends |
951 | 951 | 951 | 8,325 | – | |||||||||||||||
|
Selected performance ratios: |
||||||||||||||||||||
|
Return on average total assets |
0.84 | % | 1.02 | % | 1.27 | % | 1.77 | % | 1.00 | % | ||||||||||
|
Return on average shareholders’ equity |
6.30 | % | 7.44 | % | 8.93 | % | 11.92 | % | 6.57 | % | ||||||||||
|
Dividend payout ratio (1) |
32.79 | % | 28.42 | % | 23.71 | % | 152.81 | % | 0.00 | % | ||||||||||
|
Net interest margin |
3.16 | % | 3.33 | % | 3.93 | % | 4.28 | % | 4.00 | % | ||||||||||
|
Non-interest income to average assets |
0.10 | % | 0.27 | % | 0.13 | % | 0.13 | % | 0.11 | % | ||||||||||
|
Non-interest expenses to average assets |
2.01 | % | 2.08 | % | 2.25 | % | 2.04 | % | 2.19 | % | ||||||||||
|
Asset quality ratios: |
||||||||||||||||||||
|
Non-performing loans to total assets |
1.28 | % | 99.00 | % | 1.14 | % | 1.61 | % | 1.35 | % | ||||||||||
|
Non-performing assets to total assets |
1.10 | % | 85.00 | % | 1.29 | % | 1.71 | % | 1.52 | % | ||||||||||
|
Allowance for credit losses to non-performing loans |
119.25 | % | 158.04 | % | 139.63 | % | 101.25 | % | 134.23 | % | ||||||||||
|
Allowance for credit losses to total loans |
1.53 | % | 1.56 | % | 1.59 | % | 1.63 | % | 1.81 | % | ||||||||||
|
Net recoveries (charge-offs) to average loans |
-0.02 | % | 0.01 | % | -0.15 | % | 0.00 | % | 0.00 | % | ||||||||||
|
Liquidity and capital ratios: |
||||||||||||||||||||
|
Average loans to average deposits |
115.19 | % | 109.33 | % | 108.36 | % | 104.43 | % | 99.02 | % | ||||||||||
|
Total shareholders’ equity to total assets |
12.96 | % | 13.24 | % | 13.96 | % | 14.19 | % | 15.31 | % | ||||||||||
|
Total capital to risk-weighted assets |
15.81 | % | 15.72 | % | 16.23 | % | 16.44 | % | 17.78 | % | ||||||||||
|
Tier 1 capital to risk-weighted assets |
14.56 | % | 14.47 | % | 14.97 | % | 15.19 | % | 16.52 | % | ||||||||||
|
Common equity tier 1 capital ratio to risk-weighted assets |
14.56 | % | 14.47 | % | 14.97 | % | 15.19 | % | 16.52 | % | ||||||||||
|
Tier 1 leverage ratio |
13.34 | % | 13.83 | % | 14.33 | % | 14.56 | % | 15.36 | % | ||||||||||
(1) Dividend payout ratio is calculated by dividing dividends paid by net income.
CONTACT:
SOURCE: First Commerce Bancorp, Inc.
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