1st Colonial Bancorp Reports Third Quarter Net Income Growth and Year to Date Profit of $3.1 Million

COLLINGSWOOD, N.J.--(BUSINESS WIRE)--1st Colonial Bancorp, Inc. (FCOB), holding company of 1^st Colonial Community Bank, today reported that its net income for the three and nine months ended September 30, 2017 was $1.1 million, or $0.25 per diluted share, and $3.1 million, or $0.72 per diluted share, respectively. Net income was $988 thousand, or $0.23 per diluted share, and $2.8 million, or $0.65 per diluted share for the three and nine months ended September 30, 2016, respectively.

Gerry Banmiller, President and Chief Executive Officer, commented, “Our growth has been accomplished with prudent risk and fair pricing on our deposit and loan products. Our contact officers have successfully combined this cautious approach with an aggressive calling campaign yielding the desired results.”

At September 30, 2017, 1^st Colonial reported $522.8 million in total assets, $480.8 million in deposits and $382.6 million in loans. These amounts reflect increases of $40.8 million in assets, $38.1 million in deposits, and $33.4 million in loans and a decrease of $9.6 million in investment securities from September 30, 2016.

The Company also reported that its shareholders’ equity of $37.6 million and book value per share of $9.10 at September 30, 2017 increased by 10.8% and 9.2%, respectively, since September 30, 2016, the latter after giving effect to the 5% stock dividend distributed in April 2017.

Net interest income increased $507 thousand, or 13.2%, from $3.8 million for the third quarter of 2016 to $4.3 million for the third quarter of 2017. For the first nine months of 2017, net interest income increased $1.5 million, or 13.2%, to $12.6 million. The growth in net interest income was primarily related to an increase in interest income on loans and in the average yield earned on average interest-earning assets. During the past twelve months, the composition of our interest-earning assets changed from lower yielding investment securities to higher yielding loans. Additionally, the 75 basis point increase in the fed funds rate since December 2016 has had a positive impact on our variable rate loans. As of September 30, 2017, average loan balances increased $44.8 million while average interest-earning deposits and investments declined $19.0 million from September 30, 2016.

For the three and nine months ended September 30, 2017, the Company recorded a provision to the allowance for loan losses of $170 thousand and $549 thousand, respectively, compared to $250 thousand and $800 thousand for same periods in 2016, respectively. The decline in the 2017 provision was primarily attributable to a decline in our historical loss rates and a $98 thousand decline in net charge-offs.

Non-interest income was $966 thousand for the third quarter of 2017, a decline of $84 thousand from $1.1 million for the third quarter of 2016. For the nine months ended September 30, 2017, non-interest income was $2.9 million, a decrease of $52 thousand, or 1.7%, from $3.0 million for the nine months ended September 30, 2016. The decrease in the 2017 periods is directly related to lower gains on the sale of loans.

Non-interest expense of $3.4 million increased by $363 thousand, or 11.9%, in the three months ended September 30, 2017 compared to the three months ended September 30, 2016. Salaries and benefits increased by $108 thousand and were related to planned increases in headcount in the lending support and compliance functions. Professional fees increased $113 thousand and was mostly related to consulting costs.

Non-interest expense of $10.0 million for the nine months ended September 30, 2017 increased $1.1 million, or 13.0%, from the comparable period in 2016. Salaries and benefits increased by $580 thousand, primarily due to the reasons mentioned for the third quarter. Professional fees increased $290 thousand mostly due to increased consulting and loan workout costs.

As a result of the quarterly and year-over year increases in pre-tax net income, income tax expense also increased by $54 thousand and $198 thousand for the three and nine months ended September 30, 2017, respectively, compared to the same periods in 2016.

Highlights as of September 30, 2017 and 2016, and a comparison of the three and nine months ended September 30, 2017 to the three and nine months ended September 30, 2016 include the following (dollars in thousands, except per share data):

	at	at	$ increase/	% increase/
	September 30, 2017	September 30, 2016	(decrease)	(decrease)
Total assets	$522,834	$481,988	$40,846	8.5%
Total loans	382,571	349,207	33,364	9.6%
Investments	105,162	114,769	(9,607)	-8.4%
Total deposits	480,759	442,689	38,070	8.6%
Shareholders' equity	37,618	33,956	3,662	10.8%
Book Value ^(1)	$9.10	$8.33	$0.77	9.2%

	For the nine months ended
			$ increase/	% increase/
	September 30, 2017	September 30, 2016	(decrease)	(decrease)
Net interest income	$12,553	$11,087	$1,466	13.2%
Provision for loan losses	549	800	(251)	-31.4%
Other income	2,924	2,977	(52)	-1.7%
Non-interest expense	9,996	8,848	1,148	13.0%
Tax expense	1,833	1,635	198	12.1%
Net income	3,099	2,781	319	11.5%
Earnings per diluted share ^(1)	$0.72	$0.65	$0.07	10.6%
	For the three months ended
			$ increase/	% increase/
	September 30, 2017	September 30, 2016	decrease	decrease
Net interest income	$4,347	$3,840	$507	13.2%
Provision for loan losses	170	250	(80)	-32.0%
Other income	966	1,050	(84)	-8.0%
Non-interest expense	3,419	3,056	363	11.9%
Tax expense	650	596	54	9.0%
Net income	1,074	988	86	8.7%
Earnings per diluted share ^(1)	$0.25	$0.23	$0.02	8.2%

(1)	Adjusted to give effect to the 5% stock dividend distributed to shareholders on April 17, 2017.

1st Colonial Community Bank, the subsidiary of 1^st Colonial Bancorp, provides a range of business and consumer financial services, placing emphasis on customer service and access to decision makers. Headquartered in Collingswood, New Jersey, the Bank also has a branch in the New Jersey community of Westville and administrative offices in Cherry Hill, New Jersey. To learn more, call [phone] or visit www.1stcolonial.com.

This release contains forward-looking statements that are not historical facts and include statements about management’s strategies and expectations about our business. There are risks and uncertainties that may cause our actual results and performance to be materially different from results indicated by these forward-looking statements. Factors that might cause a difference include economic conditions; unanticipated loan losses, inability to close loans in our pipeline, lack of liquidity; varying and unanticipated costs of collection with respect to nonperforming loans; an inability to dispose of real estate owned; changes in interest rates, changes in FDIC assessments, deposit flows, loan demand, and real estate values; changes in relationships with major customers; operational risks, including the risk of fraud by employees, customers or outsiders; competition; changes in accounting principles, policies or guidelines; changes in laws or regulations and in the manner in which the regulators enforce same; new technology and other factors affecting our operations, pricing, products and services.