LAKEWOOD, NJ / ACCESSWIRE / October 27, 2022 / First Commerce Bank (the "Bank") (OTC PINK:CMRB) today reported net income of $5.4 million and $12.6 million, respectively, for the three and nine months ended September 30, 2022, as compared to $4.0 million and $12.6 million, respectively, for the three and nine months ended September 30, 2021. Basic earnings per common share for the three and nine months ended September 30, 2022, were $0.23 and $0.54 respectively, compared to $0.17 and $0.55 for the three and nine months ended September 30, 2021. The Board of Directors unanimously approved and declared a quarterly cash dividend of $0.04 per common share payable to shareholders on November 23, 2022 for shareholders of record as of November 9, 2022.
Regarding the performance of the Bank, President & CEO Donald Mindiak stated, "We are proud to have declared and paid our first special cash dividend of $0.35/share in September and equally proud of the declaration of our first regular quarterly cash dividend. The implementation of the Bank's initiative to deploy excess liquidity into higher yielding assets in the form of quality credit facilities and federally sponsored investment securities has proven successful as witnessed by improvements in net income, net interest margin and quarterly earnings per share results."
He continued, "The changes in net income for the 2022 periods compared to the 2021 periods primarily reflect increases in net interest income and non-interest income, partially offset by an increase in non-interest expense. The increase in net interest income resulted primarily from the redeployment of excess liquidity and growth in loans and investments, coupled with the active management of the pricing of interest paying liabilities. The increase in non-interest income resulted primarily from the impact of the income for the nine months ended September 30, 2022 derived from our BOLI investment acquired in the fourth quarter of 2021. The increase in non-interest expense resulted from increases in salary and benefits expense and the impact of a new bonus plan designed to attract and retain employees in a competitive labor market. Our effective tax rate decreased slightly during the 2022 fiscal year as a result of the BOLI purchase consummated during the fourth quarter of 2021 with the Allowance for Loan and Lease Losses adjusted accordingly relative to loan growth and quantitatively measured asset quality metrics.
He concluded, "We have benefitted from strong loan demand in the markets that we serve and will endeavor to avail ourselves to market opportunities brought about as a result of recent industry merger and acquisition activity. We continue to monitor economic and geopolitical events for their potential impact on our business customers and shareholders."
Financial Highlights
- Net interest margin increased by seventeen basis points to 4.28% for the third quarter of 2022 as compared to 4.11% for the third quarter of 2021 and increased by sixteen basis points to 4.14% year-to-date for 2022 as compared to 3.98% year-to-date for 2021.
- Total yield on interest earning assets increased by thirty-six basis points to 4.66% for the third quarter of 2022 as compared to 4.30% for the third quarter of 2021 and increased by twelve basis points to 4.39% year-to-date for 2022 as compared to 4.27% year-to-date for 2021.
- The cost of funds increased by twenty-seven basis points to 0.63% for the third quarter of 2022 compared to 0.36% for the third quarter of 2021 and remained unchanged at 0.42% for the year-to-date 2022 and 2021 time periods.
- The efficiency ratio was 53.81% year-to-date for 2022 as compared to 49.51% year-to-date for 2021.
- Loans receivable (net) increased by $155.2 million or 17.1% to $1.07 billion at September 30, 2022, as compared to $909.31 million at December 31, 2021.
- The loans receivable (net) to deposits ratio increased to 105.39% at September 30, 2022, from 92.45% at September 30, 2021.
- Return on average equity was 9.39% at September 30, 2022 compared to 10.01% at September 30, 2021.
- Return on average assets was 1.42% at September 30, 2022 compared to 1.54% at September 30, 2021.
Balance Sheet Review
Total assets increased by $114.95 million or 10.1% to $1.25 billion at September 30, 2022 from $1.13 billion at December 31, 2021. The increase in total assets was primarily attributable to increases in investment securities and loans receivable, net, partially offset by a decrease in total cash and cash equivalents.
Total cash and cash equivalents decreased by $79.7 million or 70.3% to $33.7 million at September 30, 2022 from $113.3 million at December 31, 2021. This decrease was primarily due to the investment of excess liquidity into investment securities and loans receivable, net.
Loans receivable, net, increased by $155.2 million or 17.1% to $1.07 billion at September 30, 2022 from $909.31 million at December 31, 2021. Total loan increases for the nine months ended September 30, 2022 occurred primarily as a result of a $174.5 million increase in commercial mortgages and a $14.3 million increase in construction loans, partially offset by a $16.7 million decrease in SBA loans and a $14.6 million decrease in commercial loans. The allowance for loan losses decreased by $80,000 to $17.65 million or 1.63% of gross loans at September 30, 2022 as compared to $17.73 million or 1.91% of gross loans at December 31, 2021.
Total investment securities increased by $37.9 million or 81.9% to $84.1 million at September 30, 2022 from $46.2 million at December 31, 2021. The increase in investment securities resulted primarily from investment security purchases totaling $54.1 million, partially offset by $12.5 million in mortgage-backed security paydowns and $2.3 million in municipal and agency bond maturities. In addition, the unrealized gain on the available-for-sale portfolio re-priced down by $1.4 million due to the prevailing interest rate environment. Because the Bank does not intend to sell the investments and it is not more than likely than not that the Bank will be required to sell the investments before recovery of their amortized cost basis, which may be at maturity, the Bank does not consider those investments to be other-than-temporarily impaired at September 30, 2022.
Deposit liabilities increased by $68.2 million or 7.2% to $1.01 billion at September 30, 2022 from $941.9 million at December 31, 2021. The increase in total deposits occurred primarily as a result of an $88.7 million increase in time deposits, a $27.4 million increase in money market deposits and an $18.7 million increase in non-interest-bearing deposits, partially offset by decreases of $56.5 million, $5.7 million and $4.4 million in savings, NOW and interest-bearing checking deposits, respectively.
Stockholders' equity increased by $4.95 million or 2.9% to $177.3 million at September 30, 2022 from $172.3 million at December 31, 2021. The increase in stockholders' equity was primarily attributable to net income of $12.6 million for the nine months ended September 30, 2022 and increases of $938,000 and $804,000 in common stock and additional paid in capital, respectively as a result of the exercise of certain stock options, partially offset by a decrease of $8.3 million in undivided profits related to the declaration and payment of the special cash dividend paid during the third quarter and a decrease in accumulated other comprehensive income of $1.05 million related to the mark-to-market valuation of the available-for-sale investment portfolio.
Three Months of Operations
Net interest income increased by $1.19 million or 10.7% to $12.34 million for the three months ended September 30, 2022 from $11.15 million for the three months ended September 30, 2021.
Interest income increased by $1.95 million or 16.3% to $13.94 million for the three months ended September 30, 2022 from $11.99 million for the three months ended September 30, 2021. The increase in interest income resulted primarily from an increase in the average balance of loans receivable, net of $155.5 million or 17.8% to $1.03 billion million for the three months ended September 30, 2022 compared to $872.7 million for the three months ended September 30, 2021 and an increase in the average balance of investment securities of $36.1 million or 72.0% to $86.2 million for the three months ended September 30, 2022 from $50.1 million for the three months ended September 30, 2021. Partially offsetting the increase in interest income was a decrease in loan fees of $810,000 or 75.6% to $262,000 for the three months ended September 30, 2022 from $1.1 million for the three months ended September 30, 2021. The decrease in loan fees is primarily related to the reduction in fees recognized from the Paycheck Protection Program - (PPP) ($466,000) as the bulk of the Bank's PPP loans were forgiven prior to the 2022 period and fees were earned in 2021. In addition, there was also a decrease in prepayment penalties collected of $324,000 for the three months ended September 30, 2022 as compared to the three months ended September 30, 2021.
Interest expense increased by $755,000 or 89.5% to $1.6 million for the three months ended September 30, 2022 from $844,000 for the three months ended September 30, 2021. The increase in interest expense occurred primarily as a result of an increase in the average balance of interest-bearing deposit liabilities of $40.9 million or 5.5% to $780.2 million for the three months ended September 30, 2022 from $739.3 million for the three months ended September 30, 2021. In addition, there was an increase in the average balance of interest-bearing wholesale borrowings from the Federal Home Loan Bank of New York, of $11.6 million for the three months ended September 30, 2022 from no such borrowing for the three months ended September 30, 2021. The average cost of funds increased by twenty-seven basis points to 0.63% for the three months ended September 30, 2022 from 0.36% for the three months ended September 30, 2021. The increase in the average balance of interest-bearing liabilities occurred as a result of the Bank's effort to grow the balance sheet. The increase in the average cost of funds resulted primarily from the increase in market interest rates for liability pricing as the Federal Reserve continues its efforts to reduce inflation by systematically increasing market interest rates.
Net interest margin increased by seventeen basis points to 4.28% for the three months ended September 30, 2022 compared to 4.11% for the three months ended September 30, 2021. The increase in the net interest margin is primarily attributable an increase in the average balance of interest earning assets of $78.5 million or 7.2% to $1.17 billion for the three months ended September 30, 2022 compared to $1.09 billion for the three months ended September 30, 2021 and an increase of thirty-six basis points on the yield of average interest earning assets to 4.66% for the three months ended September 30, 2022 from 4.30% for the three months ended September 30, 2021.
Non-interest income increased by $228,000 or 127.4% to $407,000 for the three months ended September 30, 2022 from $179,000 for the three months ended September 30, 2021. The increase in total non-interest income resulted primarily from BOLI income of $168,000 for the three months ended September 30, 2022 from no such income for the three months ended September 30, 2021. The Bank made a $25.0 million BOLI purchase during the fourth quarter of 2021 which accounts for the lack of BOLI income for the three months ended September 30, 2021. This was partially offset by a decrease in service charges and fees of $8,000 or 4.7% to $170,000 for the three months ended September 30, 2022 from $178,000 for the three months ended September 30, 2021.
Non-interest expense increased by $190,000 or 3.1% to $6.3 million for the three months ended September 30, 2022 compared to $6.1 million for the three months ended September 30, 2021. Salaries and employee benefits increased by $504,000 or 14.7% to $3.9 million for the three months ended September 30, 2022 as compared to $3.4 million for the three months ended September 30, 2021. The increase in salaries and employee benefits resulted primarily from a 27% year-over-year increase in employee benefits costs as well as increased salary expense. In an effort to both retain and attract qualified personnel, the Bank instituted an industry competitive bonus plan which was not in place in 2021. Occupancy and equipment expense increased by $11,000 or 1.3% to $839,000 for the three months ended September 30, 2022 as compared to $828,000 for the three months ended September 30, 2021. The increase in occupancy and equipment expense occurred primarily as a result of the renewal and increase in several service contracts. Other non-interest expense decreased by $325,000 or 17.9% to $1.49 million for the three months ended September 30, 2022 from $1.82 million for the three months ended September 30, 2021. Other non-interest expense consists primarily of marketing, professional fees, data processing, FDIC assessments and other expenses. The decrease in other non-interest expense occurred primarily as a result of a decrease in other expenses of $446,000 or 37.2% to $751,000 for the three months ended September 30, 2022 from $1.2 million for the three months ended September 30, 2021, partially offset by increases of $87,000, $29,000 and $25,000 in FDIC assessment, marketing and professional fees, respectively for the three months ended September 30, 2022 as compared to the three months ended September 30, 2021.
The income tax provision increased by $307,000 or 21.9% to $1.7 million for the three months ended September 30, 2022 from $1.4 million for the three months ended September 30, 2021. The increase in the income tax provision resulted primarily from an increase in earnings before income taxes of $1.8 million or 33.1% to $7.2 million for the three months ended September 30, 2022 from $5.4 million for the three months ended September 30, 2021.
Nine Months of Operations
Net interest income increased by $2.9 million or 9.1% to $34.6 million for the nine months ended September 30, 2022 from $31.7 million for the nine months ended September 30, 2021.
Interest income increased by $3.1 million or 8.9% to $37.7 million for the nine months ended September 30, 2022 from $34.6 million for the nine months ended September 30, 2021. The increase in interest income resulted primarily from an increase in the average balance of loans receivable, net of $91.2 million or 10.5% to $960.2 million for the nine months ended September 30, 2022 compared to $869.1 million for the nine months ended September 30, 2021 and an increase in the average balance of investment securities of $15.8 million or 28.9% to $70.6 million for the nine months ended September 30, 2022 from $54.8 million for the nine months ended September 30, 2021. Partially offsetting the increase in interest income was a decrease in loan fees of $660,000 or 31.0% to $1.47 million for the nine months ended September 30, 2022 from $2.13 million for the nine months ended September 30, 2021. The decrease in loan fees was primarily related to the reduction in fees recognized from the Paycheck Protection Program (PPP) of $959,000 as the bulk of the Bank's loans were forgiven and fees earned in 2021. The lower PPP fees were partially offset by higher prepayment penalties of $204,000 collected during the nine months ended September 30, 2022 as compared to the nine months ended September 30, 2021.
Interest expense increased by $201,000 or 7.0% to $3.1 million for the nine months ended September 30, 2022 from $2.9 million for the nine months ended September 30, 2021. The increase in interest expense occurred primarily as a result of an increase in the average balance of interest bearing deposit liabilities of $31.1 million or 4.3% to $756.7 million for the nine months ended September 30, 2022 from $725.6 million for the nine months ended September 30, 2021, and an increase in the average balance of interest bearing wholesale borrowings from the Federal Home Loan Bank of New York, of $3.9 million for the nine months ended September 30, 2022 from no such borrowing for the nine months ended September 30, 2021. The average cost of funds remained consistent year over year at 0.42% for the nine months ended September 30, 2022, and 2021. The increase in the average balance of interest-bearing liabilities occurred as a result of the Bank's effort grow the balance sheet.
Net interest margin increased by sixteen basis points to 4.14% for the nine months ended September 30, 2022 compared to 3.98% for the nine months ended September 30, 2021. The increase in the net interest margin is primarily attributable an increase in the average balance of interest earning assets of $62.8 million or 5.9% to $1.13 billion for the nine months ended September 30, 2022 compared to $1.07 billion for the nine months ended September 30, 2021 and an increase of twelve basis points in the yield of average interest earning assets to 4.39% for the nine months ended September 30, 2022 from 4.27% for the nine months ended September 30, 2021.
Non-interest income increased by $612,000 or 126.6% to $1.1 million for the nine months ended September 30, 2022 from $483,000 for the nine months ended September 30, 2021. The increase in total non-interest income resulted primarily from BOLI income of $494,000 for the nine months ended September 30, 2022 from no such income for the nine months ended September 30, 2021. The Bank made a $25.0 million BOLI purchase during the fourth quarter of 2021 which accounts for the lack of BOLI income for the nine months ended September 30, 2021. In addition, there was a loss on sale of REO of $116,000 for the nine months ended September 30, 2021 compared to a gain on sale of REO of $65,000 for the nine months ended September 30, 2022, increasing other non-interest income by $181,000 or 155.8%. This was partially offset by a decrease in service charges and fees of $78,000 or 13.5% to $502,000 for the nine months ended September 30, 2022 from $580,000 for the nine months ended September 30, 2021.
Non-interest expense increased by $3.26 million or 20.5% to $19.2 million for the nine months ended September 30, 2022 compared to $15.9 million for the nine months ended September 30, 2021. Salaries and employee benefits increased by $2.5 million or 26.5% to $12.0 million for the nine months ended September 30, 2022 as compared to $9.5 million for the nine months ended September 30, 2021. The increase in salaries and employee benefits resulted primarily from a 27% year-over-year increase in employee benefits costs as well increased salary expense. In an effort to both retain and attract qualified personnel, the Bank instituted an industry competitive bonus plan which was not in place in 2021. Occupancy and equipment expense increased by $101,000 or 4.0% to $2.6 million for the nine months ended September 30, 2022 as compared to $2.5 million for the nine months ended September 30, 2021. The increase in occupancy and equipment expense occurred primarily as a result of the renewal and increase in several service contracts. Other non-interest expense increased by $646,000 or 16.3% to $4.6 million for the nine months ended September 30, 2022 from $3.9 million for the nine months ended September 30, 2021. Other non-interest expense consists primarily of marketing, professional fees, data processing, FDIC assessments and other expenses. The increase in other non-interest expense occurred primarily as a result of increases of $287,000, $264,000, $56,000 and $54,000, respectively, in FDIC assessment, other expenses, marketing and professional fees, partially offset by a decrease of $15,000 in data processing.
The income tax provision decreased by $216,000 or 5.0% to $4.15 million for the nine months ended September 30, 2022 from $4.36 million for the nine months ended September 30, 2021. The decrease in the income tax provision resulted primarily from a decrease in earnings before income taxes of $263,000 or 1.5% to $16.7 million for the nine months ended September 30, 2022 from $16.9 million for the nine months ended September 30, 2021 and a reduction in the effective tax rate to 24.8% for the nine months ended September 30, 2022 from 25.7% for the nine months ended September 30, 2021.
Asset Quality
The allowance for loan losses decreased by $80,000 or 0.46% and increased by $75,000 or 0.42% from December 31, 2021 and September 30, 2021, respectively to $17.65 million at September 30, 2022 from $17.73 million at December 31, 2021 and $17.58 million at September 30, 2021. Changes in the allowance for loan and lease losses is calculated and adjusted quarterly and accordingly, relative to loan growth and quantitatively measured asset quality metrics. Total loans, gross, increased by $155.2 million or 16.7% to $1.08 billion at September 30, 2022 from $927.0 million at December 31, 2021 and $203.8 million or 23.2% from $878.4 million at September 30, 2021. The Bank had non-accrual loans totaling $17.4 million or 1.61% of gross loans at September 30, 2022 as compared to $8.8 million or 0.94% of gross loans at December 31, 2021 and $7.9 million or 0.89% of gross loans at September 30, 2021.
The allowance for loan losses was $17.6 million or 1.63% of gross loans at September 30, 2022 as compared to $17.7 million or 1.91% of gross loans at December 31, 2021 and $17.6 million or 2.00% of gross loans at September 30, 2021. The allowance for loan losses was 101.7% of non-accrual loans at September 30, 2022, 202.1% of non-accrual loans at December 31, 2021 and 222.8% of non-accrual loans at September 30, 2021.
About First Commerce Bank
Established in 2006 and headquartered in Lakewood, New Jersey, the Bank has offices in Allentown, Bordentown, Closter, Englewood, Fairfield, Freehold, Lakewood, Montvale, Robbinsville and Teaneck, New Jersey. The Bank provides businesses and individuals a wide range of loans, deposit products and retail and commercial banking services. For more information, please go to www.firstcommercebk.com .
Forward-Looking Statements
This release, like many written and oral communications presented by First Commerce Bank, 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 Bank, 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 the COVID-19 pandemic on the Bank, its operations and its customers, changes in asset quality and credit risk; the inability to sustain revenue and earnings growth; changes in interest rates and capital markets; 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.
CONTACT:
David Onderko
Senior Vice President
Chief Financial Officer
105 River Avenue
Lakewood NJ 08701-4267
Phone: (732) 364-0032 x1245
Direct: (732) 719-6516
Fax: (732) 364-0042
[email protected]
FIRST COMMERCE BANK
Consolidated Balance Sheets
(Unaudited)
| September 30, 2022 vs. | ||||||||||||||||||||||||||||
| September 30, | December 31, | September 30, | December 31, 2021 | September 30, 2021 | ||||||||||||||||||||||||
(In thousands, except percentages) | 2022 | 2021 | 2021 | Amount | % | Amount | % | |||||||||||||||||||||
Assets | ||||||||||||||||||||||||||||
Cash and Cash Equivalents: | ||||||||||||||||||||||||||||
Cash on hand$ | $ | 1,498 | $ | 1,736 | $ | 1,529 | $ | (238 | ) | -13.7 | % | $ | (31 | ) | -2.0 | % | ||||||||||||
Interest bearing deposits in other banks | 32,184 | 111,602 | 168,254 | (79,418 | ) | -71.2 | % | (136,070 | ) | -80.9 | % | |||||||||||||||||
Total cash and cash equivalents | 33,682 | 113,338 | 169,783 | (79,656 | ) | -70.3 | % | 169,783 | 100.0 | % | ||||||||||||||||||
Investment Securities HTM, at amortized cost | 69,736 | 23,611 | 22,609 | 46,125 | 195.4 | % | 47,127 | 208.4 | % | |||||||||||||||||||
Investment Securities AFS, at fair value | 14,371 | 22,617 | 24,593 | (8,246 | ) | -36.5 | % | (10,222 | ) | -41.6 | % | |||||||||||||||||
Restricted stock | 2,731 | 945 | 945 | 1,786 | 189.0 | % | 1,786 | 189.0 | % | |||||||||||||||||||
Loans Receivable, net of ALLL | 1,064,558 | 909,312 | 860,802 | 155,246 | 17.1 | % | 203,756 | 23.7 | % | |||||||||||||||||||
Premises and equipment | 15,912 | 16,385 | 16,618 | (473 | ) | -2.9 | % | (706 | ) | -4.2 | % | |||||||||||||||||
Right-of-Use Asset | 9,082 | 9,368 | 9,462 | (286 | ) | -3.1 | % | (380 | ) | -4.0 | % | |||||||||||||||||
Bank Owned Life Insurance | 25,609 | 25,115 | - | 494 | 2.0 | % | 25,609 | 0.0 | % | |||||||||||||||||||
Other Real Estate Owned | 4,201 | 4,345 | 4,201 | (144 | ) | -3.3 | % | - | 0.0 | % | ||||||||||||||||||
Deferred tax asset | 3,990 | 3,805 | 3,228 | 185 | 4.9 | % | 762 | 23.6 | % | |||||||||||||||||||
Accrued interest receivable | 4,276 | 4,433 | 4,594 | (157 | ) | -3.5 | % | (318 | ) | -6.9 | % | |||||||||||||||||
Other assets | 1,241 | 1,163 | 1,147 | 78 | 6.7 | % | 94 | 8.2 | % | |||||||||||||||||||
Total Assets | $ | 1,249,389 | $ | 1,134,437 | $ | 1,117,982 | $ | 114,952 | 10.1 | % | $ | 131,407 | 11.8 | % | ||||||||||||||
Liabilities and Stockholders' Equity | ||||||||||||||||||||||||||||
Liabilities | ||||||||||||||||||||||||||||
Deposits: | ||||||||||||||||||||||||||||
Non-interest bearing | $ | 230,759 | $ | 212,017 | $ | 199,073 | $ | 18,742 | 8.8 | % | $ | 31,686 | 15.9 | % | ||||||||||||||
Interest bearing | 779,379 | 729,910 | 732,077 | 49,469 | 6.8 | % | 47,302 | 6.5 | % | |||||||||||||||||||
Total Deposits | 1,010,138 | 941,927 | 931,150 | 68,211 | 7.2 | % | 78,988 | 8.5 | % | |||||||||||||||||||
Total Borrowings | 37,500 | - | - | 37,500 | 0.0 | % | 37,500 | 0.0 | % | |||||||||||||||||||
Accrued Interest Payable | 398 | 101 | 109 | 297 | 294.1 | % | 289 | 265.1 | % | |||||||||||||||||||
Lease Liability | 9,594 | 9,791 | 9,853 | (197 | ) | -2.0 | % | (259 | ) | -2.6 | % | |||||||||||||||||
Other liabilities | 14,514 | 10,318 | 8,596 | 4,196 | 40.7 | % | 5,918 | 68.8 | % | |||||||||||||||||||
Total Liabilities | 62,006 | 20,210 | 18,558 | 41,796 | 206.8 | % | 43,448 | 234.1 | % | |||||||||||||||||||
Commitments and Contingencies | - | - | - | - | 0.0 | % | - | 0.0 | % | |||||||||||||||||||
Stockholders' Equity | ||||||||||||||||||||||||||||
Preferred Stock | - | - | - | - | 0.0 | % | - | 0.0 | % | |||||||||||||||||||
Common Stock | 47,570 | 46,632 | 46,557 | 938 | 2.0 | % | 1,013 | 2.2 | % | |||||||||||||||||||
Additional paid-in capital | 40,923 | 40,119 | 40,004 | 804 | 2.0 | % | 919 | 2.3 | % | |||||||||||||||||||
Retained earnings | 89,141 | 84,884 | 80,830 | 4,257 | 5.0 | % | 8,311 | 10.3 | % | |||||||||||||||||||
Accumulated other comprehensive income | (389 | ) | 665 | 883 | (1,054 | ) | -158.5 | % | (1,272 | ) | -144.1 | % | ||||||||||||||||
Total Stockholders' Equity | 177,245 | 172,300 | 168,274 | 4,945 | 2.9 | % | 8,971 | 5.3 | % | |||||||||||||||||||
Total Liabilities and Stockholders' Equity | $ | 1,249,389 | $ | 1,134,437 | $ | 1,117,982 | $ | 114,952 | 10.1 | % | $ | 131,407 | 11.8 | % | ||||||||||||||
FIRST COMMERCE BANK
Consolidated Income Statements
For the three months ended September 30, 2022 and 2021
(Unaudited)
| Variance | ||||||||||||||||
(In thousands, except percentages and per share amounts) | September 30, 2022 | September 30, 2021 | Amount | % | ||||||||||||
Interest Income | ||||||||||||||||
Loans, including fees | $ | 13,146 | $ | 11,520 | $ | 1,626 | 14.1 | % | ||||||||
Investment securities - HTM | 485 | 222 | 263 | 118.5 | % | |||||||||||
Investment securities - AFS | 114 | 182 | (68 | ) | -37.4 | % | ||||||||||
Interest-bearing deposits | 195 | 66 | 129 | 196.1 | % | |||||||||||
Total Interest Income | 13,940 | 11,990 | 1,950 | 16.3 | % | |||||||||||
Interest Expense | ||||||||||||||||
Deposits | 1,513 | 844 | 669 | 79.3 | % | |||||||||||
Other borrowings | 86 | - | 86 | 0.0 | % | |||||||||||
Total Interest Expense | 1,599 | 844 | 755 | 89.5 | % | |||||||||||
Net Interest Income | 12,341 | 11,146 | 1,195 | 10.7 | % | |||||||||||
(Credit)/Provision for Loan Losses | (685 | ) | (136 | ) | (549 | ) | 403.7 | % | ||||||||
Net Interest Income after ALLL | 13,026 | 11,282 | 1,744 | 15.5 | % | |||||||||||
Non-Interest Income | ||||||||||||||||
Service charges and fees | 170 | 178 | (8 | ) | -4.5 | % | ||||||||||
BOLI income | 168 | - | 168 | 0.0 | % | |||||||||||
Gain/(loss) on valuation of REO | 63 | (6 | ) | 69 | -1150.0 | % | ||||||||||
Other income | 6 | 7 | (1 | ) | -14.3 | % | ||||||||||
Total Non-Interest Income | 407 | 179 | 228 | 127.4 | % | |||||||||||
Non-Interest Expenses | ||||||||||||||||
Salaries and employee benefits | 3,943 | 3,439 | 504 | 14.7 | % | |||||||||||
Occupancy & equip. expense | 839 | 828 | 11 | 1.3 | % | |||||||||||
Marketing | 57 | 28 | 29 | 103.6 | % | |||||||||||
Professional fees | 356 | 331 | 25 | 7.6 | % | |||||||||||
Data processing | 177 | 197 | (20 | ) | -10.2 | % | ||||||||||
FDIC assessment | 150 | 63 | 87 | 138.1 | % | |||||||||||
Other expenses | 751 | 1,197 | (446 | ) | -37.3 | % | ||||||||||
Total Non-Interest Expense | 6,273 | 6,083 | 190 | 3.1 | % | |||||||||||
Income before income tax provision | 7,160 | 5,378 | 1,782 | 33.1 | % | |||||||||||
Income tax expense | 1,712 | 1,405 | 307 | 21.9 | % | |||||||||||
Net Income | $ | 5,448 | $ | 3,973 | $ | 1,475 | 37.1 | % | ||||||||
Basic earnings per share | $ | 0.23 | $ | 0.17 | $ | 0.06 | 34.0 | % | ||||||||
Average shares outstanding | 23,743,033 | 23,196,418 | 546,615 | 2.4 | % | |||||||||||
Fully diluted earnings per share | $ | 0.23 | $ | 0.17 | $ | 0.06 | 34.6 | % | ||||||||
Diluted shares outstanding | 24,124,491 | 23,682,086 | 442,405 | 1.9 | % | |||||||||||
FIRST COMMERCE BANK
Consolidated Income Statements
For the nine months ended September 30, 2022 and 2021
(Unaudited)
| Variance | ||||||||||||||||
| (In thousands, except percentages and per share amounts) | September 30, 2022 | September 30, 2021 | Amount | % | ||||||||||||
Interest Income | ||||||||||||||||
Loans, including fees | $ | 35,677 | $ | 33,224 | $ | 2,453 | 7.4 | % | ||||||||
Investment securities - HTM | 1,111 | 640 | 471 | 73.6 | % | |||||||||||
Investment securities - AFS | 467 | 583 | (116 | ) | -19.9 | % | ||||||||||
Interest-bearing deposits | 423 | 151 | 272 | 180.1 | % | |||||||||||
Total Interest Income | 37,678 | 34,598 | 3,080 | 8.9 | % | |||||||||||
Interest Expense | ||||||||||||||||
Deposits | 2,994 | 2,879 | 115 | 4.0 | % | |||||||||||
Other borrowings | 86 | - | 86 | 0.0 | % | |||||||||||
Total Interest Expense | 3,080 | 2,879 | 201 | 7.0 | % | |||||||||||
Net Interest Income | 34,598 | 31,719 | 2,879 | 9.1 | % | |||||||||||
(Credit)/Provision for Loan Losses | (244 | ) | (736 | ) | 492 | -66.8 | % | |||||||||
Net Interest Income after ALLL | 34,842 | 32,455 | 2,387 | 7.4 | % | |||||||||||
Non-Interest Income | ||||||||||||||||
Service charges and fees | 502 | 580 | (78 | ) | -13.5 | % | ||||||||||
BOLI income | 494 | - | 494 | 0.0 | % | |||||||||||
Gain on valuation of REO | 65 | (116 | ) | 181 | 155.8 | % | ||||||||||
Other income | 34 | 19 | 15 | 76.3 | % | |||||||||||
Total Non-Interest Income | 1,095 | 483 | 612 | 126.6 | % | |||||||||||
Non-Interest Expenses | ||||||||||||||||
Salaries and employee benefits | 11,997 | 9,482 | 2,515 | 26.5 | % | |||||||||||
Occupancy & equip. expense | 2,607 | 2,506 | 101 | 4.0 | % | |||||||||||
Marketing | 151 | 95 | 56 | 58.9 | % | |||||||||||
Professional fees | 1,158 | 1,104 | 54 | 4.9 | % | |||||||||||
Data processing | 535 | 550 | (15 | ) | -2.7 | % | ||||||||||
FDIC assessment | 482 | 195 | 287 | 147.2 | % | |||||||||||
Other expenses | 2,277 | 2,013 | 264 | 13.1 | % | |||||||||||
Total Non-Interest Expense | 19,207 | 15,945 | 3,262 | 20.5 | % | |||||||||||
Income before income tax provision | 16,730 | 16,993 | (263 | ) | -1.5 | % | ||||||||||
Income tax expense | 4,147 | 4,363 | (216 | ) | -5.0 | % | ||||||||||
Net Income | $ | 12,583 | $ | 12,630 | $ | (47 | ) | -0.4 | % | |||||||
Basic earnings per share | $ | 0.54 | $ | 0.55 | $ | (0.01 | ) | -1.6 | % | |||||||
Basic avg shares outstanding | 23,532,992 | 23,029,224 | 503,768 | 2.2 | % | |||||||||||
Fully diluted earnings per share | $ | 0.53 | $ | 0.54 | $ | (0.01 | ) | -1.1 | % | |||||||
Fully diluted avg shares outstanding | 23,914,450 | 23,512,892 | 401,558 | 1.7 | % | |||||||||||
First Commerce Bank
Financial Highlights & Ratios
As of September 30, 2022 and 2021
(Unaudited)
| QTD | QTD | YTD | YTD | |||||||||||||
| Financial & Operating Ratios | 9/30/2022 | 9/30/2021 | 9/30/2022 | 9/30/2021 | ||||||||||||
Yields | ||||||||||||||||
Commercial Mortgages | 4.56 | % | 5.00 | % | 4.60 | % | 4.92 | % | ||||||||
Construction Loans | 6.67 | % | 4.85 | % | 5.69 | % | 5.16 | % | ||||||||
Commercial Loans | 6.53 | % | 5.23 | % | 5.67 | % | 5.24 | % | ||||||||
Consumer | 3.73 | % | 3.61 | % | 3.88 | % | 3.58 | % | ||||||||
Residential Mortgages | 4.71 | % | 5.00 | % | 4.73 | % | 5.06 | % | ||||||||
Home Equity | 4.96 | % | 3.67 | % | 4.10 | % | 3.67 | % | ||||||||
SBA Loans | 6.62 | % | 5.93 | % | 6.48 | % | 4.92 | % | ||||||||
Total Yield on Loans | 4.92 | % | 5.07 | % | 4.81 | % | 4.94 | % | ||||||||
DFB Interest Bearing | 2.03 | % | 0.17 | % | 0.68 | % | 0.16 | % | ||||||||
Securities | 2.78 | % | 3.23 | % | 2.95 | % | 2.94 | % | ||||||||
Total Yield on Interest Earning Assets | 4.66 | % | 4.30 | % | 4.39 | % | 4.27 | % | ||||||||
Cost of Funds | ||||||||||||||||
Non-interest Bearing | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | ||||||||
Interest Bearing | 0.45 | % | 0.36 | % | 0.38 | % | 0.38 | % | ||||||||
Money Market | 0.96 | % | 0.35 | % | 0.39 | % | 0.39 | % | ||||||||
Savings | 0.33 | % | 0.34 | % | 0.39 | % | 0.39 | % | ||||||||
Time Deposits | 0.92 | % | 0.61 | % | 0.71 | % | 0.71 | % | ||||||||
IRA's | 0.75 | % | 0.67 | % | 0.82 | % | 0.82 | % | ||||||||
Brokered CD's | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | ||||||||
Borrowed Funds | 2.95 | % | 0.00 | % | 0.36 | % | 0.36 | % | ||||||||
Total Cost of Funds | 0.63 | % | 0.36 | % | 0.42 | % | 0.42 | % | ||||||||
Equity & Returns | ||||||||||||||||
Common Stock (In Thousands) | 23,785 | 23,279 | 23,785 | 23,279 | ||||||||||||
Book Value Per Share | $ | 7.47 | $ | 7.19 | $ | 7.47 | $ | 7.19 | ||||||||
Market Value Per Share | $ | 6.66 | $ | 5.70 | $ | 6.66 | $ | 5.70 | ||||||||
Earnings Per Share (Basic) | $ | 0.23 | $ | 0.17 | $ | 0.54 | $ | 0.55 | ||||||||
Return on Avg Assets | 1.79 | % | 1.42 | % | 1.42 | % | 1.54 | % | ||||||||
Return on Avg Equity | 12.02 | % | 7.86 | % | 9.39 | % | 10.01 | % | ||||||||
Tangible Equity/Tangible Assets | 14.22 | % | 14.97 | % | 14.22 | % | 14.97 | % | ||||||||
Risk Based Capital Ratios | ||||||||||||||||
Tier 1 Leverage Capital Ratio | 14.56 | % | 14.98 | % | 14.56 | % | 14.98 | % | ||||||||
Common Equity Tier 1 Risk-Based Capital | 15.18 | % | 19.00 | % | 15.18 | % | 19.00 | % | ||||||||
Tier 1 Risk-Based Capital Ratio | 15.18 | % | 19.00 | % | 15.18 | % | 19.00 | % | ||||||||
Total Risk-Based Capital Ratio | 16.44 | % | 20.26 | % | 16.44 | % | 20.26 | % | ||||||||
Capital Conservation Buffer | 8.44 | % | 12.26 | % | 8.44 | % | 12.26 | % | ||||||||
Tier 1 Capital (In Thousands) | 177,622 | 167,370 | 177,622 | 167,370 | ||||||||||||
Tier 2 Capital (In Thousands) | 192,304 | 178,482 | 192,304 | 178,482 | ||||||||||||
Other Ratios | ||||||||||||||||
ALLL/Gross Loans | 1.63 | % | 2.00 | % | 1.63 | % | 2.00 | % | ||||||||
Total Investments/Total Assets | 6.73 | % | 4.22 | % | 6.73 | % | 4.22 | % | ||||||||
Net Loans/Total Assets | 85.21 | % | 77.00 | % | 85.21 | % | 77.00 | % | ||||||||
Net Loans/Total Deposits | 105.39 | % | 92.45 | % | 105.39 | % | 92.45 | % | ||||||||
Net Interest Margin | 4.28 | % | 4.11 | % | 4.14 | % | 3.98 | % | ||||||||
Interest Spread | 4.04 | % | 3.94 | % | 3.97 | % | 3.85 | % | ||||||||
Efficiency Ratio | 49.21 | % | 53.71 | % | 53.81 | % | 49.51 | % | ||||||||
Legal Lending Limit | 28,846 | 26,772 | 28,846 | 26,772 | ||||||||||||
First Commerce Bank
Selected Financial Data
(Unaudited)
| As of and for the quarters ended | ||||||||||||||||||||||||||||
(In thousands, except per share data) | 9/30/2022 | 6/30/2022 | 3/31/2022 | 12/31/2021 | 9/30/2021 | 6/30/2021 | 3/31/2021 | |||||||||||||||||||||
Summary earnings: | ||||||||||||||||||||||||||||
Interest income$ | $ | 13,941 | $ | 12,032 | $ | 11,705 | $ | 11,619 | $ | 11,990 | $ | 11,399 | $ | 11,208 | ||||||||||||||
Interest expense | 1,599 | 768 | 713 | 764 | 844 | 943 | 1,092 | |||||||||||||||||||||
Net interest income | 12,342 | 11,264 | 10,992 | 10,856 | 11,146 | 10,456 | 10,117 | |||||||||||||||||||||
Provision (credit) for loan losses | (685 | ) | 1,216 | (775 | ) | 150 | (136 | ) | (600 | ) | - | |||||||||||||||||
Net interest income after provision (credit) for loan losses | 13,027 | 10,048 | 11,767 | 10,706 | 11,282 | 11,056 | 10,117 | |||||||||||||||||||||
Non-interest income | 406 | 326 | 363 | 339 | 180 | 101 | 203 | |||||||||||||||||||||
Non-interest expense | 6,273 | 6,418 | 6,517 | 5,612 | 6,083 | 5,321 | 4,541 | |||||||||||||||||||||
Income before income tax expense | 7,160 | 3,956 | 5,613 | 5,433 | 5,379 | 5,836 | 5,778 | |||||||||||||||||||||
Income tax expense | 1,712 | 1,018 | 1,417 | 1,380 | 1,405 | 1,425 | 1,532 | |||||||||||||||||||||
Net income | $ | 5,448 | $ | 2,939 | $ | 4,196 | $ | 4,054 | $ | 3,974 | $ | 4,411 | $ | 4,246 | ||||||||||||||
Per share data: | ||||||||||||||||||||||||||||
Earnings per share - basic | $ | 0.23 | $ | 0.13 | $ | 0.18 | $ | 0.17 | $ | 0.17 | $ | 0.19 | $ | 0.19 | ||||||||||||||
Earnings per share - diluted | 0.23 | 0.12 | 0.18 | 0.17 | 0.17 | 0.19 | 0.19 | |||||||||||||||||||||
Cash dividends declared | 0.35 | - | - | - | - | - | - | |||||||||||||||||||||
Book value at period end (1) | 7.45 | 7.61 | 7.55 | 7.39 | 7.23 | 7.07 | 6.93 | |||||||||||||||||||||
Shares outstanding at period end | 23,785 | 23,673 | 23,316 | 23,316 | 23,279 | 23,196 | 22,899 | |||||||||||||||||||||
Basic weighted average shares outstanding | 23,743 | 23,535 | 23,316 | 23,196 | 23,196 | 22,899 | 22,801 | |||||||||||||||||||||
Fully diluted weighted average shares outstanding | 24,124 | 23,970 | 23,773 | 23,198 | 23,198 | 23,014 | 22,871 | |||||||||||||||||||||
Balance sheet data (at period end): | ||||||||||||||||||||||||||||
Total assets | $ | 1,249,389 | $ | 1,176,733 | $ | 1,158,783 | $ | 1,134,437 | $ | 1,117,982 | $ | 1,095,095 | $ | 1,103,039 | ||||||||||||||
Securities, available for sale | 14,371 | 16,327 | 17,793 | 22,617 | 24,593 | 27,452 | 28,957 | |||||||||||||||||||||
Securities, held to maturity | 69,736 | 70,268 | 54,289 | 23,611 | 22,609 | 25,190 | 27,835 | |||||||||||||||||||||
Total loans | 1,082,210 | 1,005,640 | 934,193 | 926,876 | 878,380 | 902,781 | 900,368 | |||||||||||||||||||||
Allowance for loan losses | (17,652 | ) | (18,245 | ) | (17,009 | ) | (17,733 | ) | (17,577 | ) | (17,668 | ) | (17,867 | ) | ||||||||||||||
Total deposits | 1,015,916 | 979,285 | 966,496 | 946,855 | 931,150 | 913,757 | 926,321 | |||||||||||||||||||||
Shareholders' equity | 177,246 | 180,171 | 175,965 | 172,300 | 168,274 | 164,061 | 158,732 | |||||||||||||||||||||
Common cash dividends | 8,325 | - | - | - | - | - | - | |||||||||||||||||||||
Selected performance ratios: | ||||||||||||||||||||||||||||
Return on average total assets | 1.77 | % | 1.00 | % | 1.48 | % | 1.42 | % | 1.44 | % | 1.63 | % | 1.61 | % | ||||||||||||||
Return on average shareholders' equity | 11.92 | % | 6.57 | % | 9.73 | % | 9.37 | % | 9.42 | % | 10.90 | % | 11.02 | % | ||||||||||||||
Dividend payout ratio (2) | 38.52 | % | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | ||||||||||||||
Net interest margin | 4.28 | % | 4.06 | % | 4.04 | % | 4.01 | % | 4.11 | % | 3.92 | % | 3.93 | % | ||||||||||||||
Non-interest income to average assets | 0.13 | % | 0.11 | % | 0.13 | % | 0.12 | % | 0.07 | % | 0.04 | % | 0.08 | % | ||||||||||||||
Non-interest expenses to average assets | 2.04 | % | 2.19 | % | 2.30 | % | 1.96 | % | 2.20 | % | 1.97 | % | 1.73 | % | ||||||||||||||
Asset quality ratios: | ||||||||||||||||||||||||||||
Non-performing loans to total loans | 1.61 | % | 1.35 | % | 1.31 | % | 0.99 | % | 0.90 | % | 0.99 | % | 1.00 | % | ||||||||||||||
Non-performing assets to total assets | 1.73 | % | 1.52 | % | 1.43 | % | 1.19 | % | 1.08 | % | 1.20 | % | 1.31 | % | ||||||||||||||
Allowance for loan losses to non-performing loans | 101.25 | % | 134.23 | % | 139.42 | % | 193.59 | % | 223.54 | % | 197.10 | % | 198.72 | % | ||||||||||||||
Allowance for loan losses to total loans | 1.63 | % | 1.81 | % | 1.82 | % | 1.91 | % | 2.00 | % | 1.96 | % | 1.98 | % | ||||||||||||||
Net recoveries (charge-offs) to average loans | 0.00 | % | 0.00 | % | 0.01 | % | 0.00 | % | 0.01 | % | 0.04 | % | 0.00 | % | ||||||||||||||
Liquidity and capital ratios: | ||||||||||||||||||||||||||||
Average loans to average deposits | 104.43 | % | 99.02 | % | 96.80 | % | 93.69 | % | 95.51 | % | 97.60 | % | 97.42 | % | ||||||||||||||
Total shareholders' equity to total assets | 14.19 | % | 15.31 | % | 15.19 | % | 15.19 | % | 15.05 | % | 14.98 | % | 14.39 | % | ||||||||||||||
Total capital to risk-weighted assets | 16.44 | % | 17.78 | % | 18.84 | % | 19.39 | % | 20.26 | % | 19.99 | % | 19.73 | % | ||||||||||||||
Tier 1 capital to risk-weighted assets | 15.19 | % | 16.52 | % | 17.58 | % | 18.13 | % | 19.00 | % | 18.73 | % | 18.47 | % | ||||||||||||||
Common equity tier 1 capital ratio to risk-weighted assets | 15.19 | % | 16.52 | % | 17.58 | % | 18.13 | % | 19.00 | % | 18.73 | % | 18.47 | % | ||||||||||||||
Tier 1 leverage ratio | 14.56 | % | 15.36 | % | 15.29 | % | 15.12 | % | 14.98 | % | 14.79 | % | 14.68 | % | ||||||||||||||
| 1 Book value at end-of-period calculated by dividing shareholders' equity by number of outstanding common shares at end of period. | ||||||||||||||||||||||||||||
| 2 Dividend payout ratio calculated by dividing dividends declared during the year by net income. | ||||||||||||||||||||||||||||
| 92 | 91 | 90 | 92 | 92 | 91 | 90 | ||||||||||||||||||||||
| 365 | 365 | 365 | 365 | 365 | 365 | 365 | ||||||||||||||||||||||
Average assets | 1,219,870 | 1,173,200 | 1,150,787 | 1,136,064 | 1,096,112 | 1,085,077 | 1,067,499 | |||||||||||||||||||||
Average loans | 1,046,602 | 964,249 | 923,169 | 885,110 | 890,313 | 901,524 | 868,950 | |||||||||||||||||||||
Average deposits | 1,002,224 | 973,793 | 953,714 | 944,718 | 932,188 | 923,674 | 891,981 | |||||||||||||||||||||
Average equity | 181,353 | 179,525 | 174,931 | 171,634 | 167,453 | 162,288 | 156,281 | |||||||||||||||||||||
90 days PD and still accruing | - | - | - | - | - | - | - | |||||||||||||||||||||
Nonperforming loans | 17,434 | 13,592 | 12,200 | 9,160 | 7,863 | 8,964 | 8,991 | |||||||||||||||||||||
Nonperforming assets | 21,635 | 17,937 | 16,545 | 13,505 | 12,064 | 13,165 | 14,437 | |||||||||||||||||||||
Net recoveries (charge-off) | 20 | 51 | 5 | 45 | 401 | 5 | ||||||||||||||||||||||
OREO | 4,201 | 4,345 | 4,345 | 4,345 | 4,201 | 4,201 | 5,446 | |||||||||||||||||||||
SOURCE: First Commerce Bank