First Commerce Bancorp, Inc., Reports the Fourth Quarter and the Full Year 2023 Results and Declares a Quarterly Cash Dividend of $0.04 Per Share

Rhea-AI Summary

First Commerce Bancorp, Inc. reported net income of $5.8 million and basic earnings per common share of $0.25 for the three months ended December 31, 2023, with a quarterly cash dividend of $0.04 per common share. The company's net interest margin decreased by 134 basis points to 2.51% for the fourth quarter of 2023, and total yield on interest earning assets increased by forty-three basis points to 5.43%. Total loans receivable increased by $133.1 million, and total deposits increased by $71.3 million. The annualized return on average total assets was 0.99%, and the annualized return on average shareholders' equity was 7.51%. Total assets increased by $144.0 million or 11.1% to $1.44 billion at December 31, 2023. The company repurchased 1.0 million shares for approximately $7.0 million, and net interest income decreased by $3.0 million or 25.4% to $8.8 million for the three months ended December 31, 2023.

LAKEWOOD, NJ / ACCESSWIRE / February 1, 2024 / First Commerce Bancorp, Inc., (OTC PINK:CMRB), (the "Company"), today reported net income of $5.8 million and basic earnings per common share of $0.25 for the three months ended December 31, 2023, as compared to net income of $4.0 million and basic earnings per common share of $0.17 for the three months ended December 31, 2022. For the fiscal year ended December 31, 2023, net income was $13.8 million and basic earnings per common share of $0.58, as compared to net income of $16.6 million and basic earnings per common share of $0.70 for the fiscal year ended December 31, 2022.

The Company's Board of Directors declared a quarterly cash dividend of $0.04 per common share payable on February 20, 2024 to shareholders of record on February 6, 2024.

Regarding the year-end financial results, President & CEO Donald Mindiak commented, "Despite a challenging year that saw material disruptions in the banking industry as a result of liquidity concerns, the failure of several mid-size regional financial institutions, an inverted yield curve and continuing inflation, First Commerce Bank stayed true to its mission of a measured balance sheet and loan growth through prudent loan underwriting consistent with our strong capital base. Funding for loan growth occurred through growth in both deposits and wholesale borrowings appropriately laddered. Net interest margin compression continues to be challenging, however our recently opened office in Jackson, New Jersey boasts deposits of over $20.0 million after only four months of being open."

He continued, "A continued evaluation of our CECL Model and a corresponding review of the qualitative and quantitative factors resulted in a reduction of our year-end Allowance for Credit Losses consistent with the risk profile of the Bank's loan and investment portfolio. Diligent attention to non-interest expenses resulted in only a slight increase year-over-year and the management of this metric will continue to be engaged. Lastly, the Board and Management will continue to structure a balance sheet with a strong capital base, managing various forms of risk judiciously while generating competitive returns for our shareholders."

Financial Highlights

• Net interest margin decreased by 134 basis points to 2.51% for the fourth quarter of 2023 as compared to 3.85% for the fourth quarter of 2022 and decreased by 110 basis points to 2.92% at year-end 2023 as compared to 4.02% at year-end 2022.
• Total yield on interest earning assets increased by forty-three basis points to 5.43% for the fourth quarter of 2023 as compared to 5.00% for the fourth quarter of 2022 and increased by seventy-six basis points to 5.35% at year-end 2023 as compared to 4.59% at year-end 2022.
• Total cost of interest-bearing liabilities increased by 213 basis points to 3.78% for the fourth quarter of 2023 compared to 1.65% for the fourth quarter of 2022 and increased by 241 basis points to 3.25% at year-end 2023 as compared to 0.84% at year-end 2022.
• The efficiency ratio for the year ended December 31, 2023 was 66.97% as compared to 55.01% for the year ended December 31, 2022.
• Total loans receivable increased by $133.1 million or 11.9% to $1.25 billion at December 31, 2023, as compared to $1.1 billion at December 31, 2022.
• Total deposits increased by $71.3 million or 6.9% to $1.11 billion at December 31, 2023, as compared to $1.04 billion at December 31, 2022.
• The annualized return on average total assets was 0.99% at December 31, 2023 compared to 1.38% at December 31, 2022.
• The annualized return on average shareholders' equity was 7.51% at December 31, 2023 compared to 9.28% at December 31, 2022.
• The book value per common share was $8.06 at December 31, 2023 compared to $7.58 at December 31, 2022.

Balance Sheet Review

Total assets increased by $144.0 million or 11.1% to $1.44 billion at December 31, 2023 from $1.29 billion at December 31, 2022. The increase in total assets was primarily related to increases in total 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 $19.1 million or 44.9% to $61.7 million at December 31, 2023 from $42.6 million at December 31, 2022. This increase was primarily due to an increase in total deposits.

Total loans receivable, net of allowance for credit losses, increased by $136.5 million or 12.4% to $1.24 billion at December 31, 2023 from $1.10 billion at December 31, 2022. This increase occurred primarily as a result of a $126.9 million increase in commercial mortgages, a $12.3 million increase in construction loans and a $384,000 increase in Small Business Administration loans, partially offset by a $4.6 million decrease in commercial loans and a $1.1 million decrease in home equity loans. The allowance for credit losses decreased by $3.3 million or 18.6% to $14.5 million or 1.16% of gross loans at December 31, 2023 as compared to $17.8 million or 1.59% of gross loans at December 31, 2022.

Total investment securities decreased by $10.6 million or 13.3% to $69.1 million at December 31, 2023 from $79.7 million at December 31, 2022. The decrease in investment securities resulted primarily from $10.3 million in total paydowns of investment securities and $5.1 million in maturities, partially offset by $4.8 million in purchases.

Total deposits increased by $71.3 million or 6.9% to $1.11 billion at December 31, 2023 from $1.04 billion at December 31, 2022. The increase in total deposits occurred primarily as a result of a $61.9 million increase in time deposits, a $70.0 million increase in brokered time deposits, a $19.0 million increase in money market deposits and a $5.9 million increase in interest bearing checking deposits, partially offset by decreases of $47.5 million in noninterest-bearing demand deposits, $35.7 million in savings deposits and a $2.3 million in NOW deposits as customers move into high-yielding deposit products.

Shareholders' equity increased by $3.6 million or 2.0% to $184.0 million at December 31, 2023 from $180.4 million at December 31, 2022. The increase in shareholders' equity was primarily attributable to an increase in retained earnings of $10.0 million and an increase of $433,000 in additional paid in capital as a result of the exercise of certain stock options, partially offset by $7.0 million in share repurchases and a decrease of $109,000 in accumulated other comprehensive loss. During the year 2023, the Company repurchased 1.0 million shares for approximately $7.0 million, or a weighted average price of $6.78 per share.

Three Months of Operations

Net interest income decreased by $3.0 million or 25.4% to $8.8 million for the three months ended December 31, 2023 from $11.8 million for the three months ended December 31, 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 $3.7 million or 24.0% to $19.0 million for the three months ended December 31, 2023 from $15.3 million for the three months ended December 31, 2022. Interest income on loans, including fees, increased $3.2 million or 22.5% to $17.7 million for the three months ended December 31, 2023 compared to $14.4 million for the three months December 31, 2022. The increase in interest income from loans, including fees, resulted primarily from an increase in the average balance of loans receivable of $165.2 million or 15.1% to $1.26 billion for the three months ended December 31, 2023 compared to $1.09 billion for the three months ended December 31, 2022 and an increase of thirty-three basis points in the average yield on loans to 5.56% for the three months ended December 31, 2023 compared to 5.23% for the same period in the prior year. Interest income on interest-bearing deposits with banks increased $327,000 or 121.0% to $598,000 for the three months ended December 31, 2023 as compared to $271,000 for the same period in the prior year. This increase resulted from a significantly higher average yield on interest-bearing deposits with banks of 4.83% for the three months ended December 31, 2023 compared to 3.09% for the same period in the prior year, and an increase of $14.4 million in average balances of interest-bearing deposits with banks year over year.

Total interest expense increased by $6.7 million or 189.3% to $10.2 million for the three months ended December 31, 2023 from $3.5 million for the three months ended December 31, 2022. The increase in interest expense occurred primarily as a result of a 213 basis points increase in the average cost of interest-bearing liabilities to 3.78% for the three months ended December 31, 2023 from 1.65% for the three months ended December 31, 2022 and an increase in average balance of interest-bearing liabilities of $225.1 million or 26.7%, to $1.07 billion for the three months ended December 31, 2023 from $844.6 million for the three months ended December 31, 2022. The increase in average balance of interest-bearing liabilities included a $160.6 million increase in average interest-bearing deposit liabilities and a $64.5 million increase in average wholesale borrowings for the three months ended December 31, 2023. 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.

During the fourth quarter of 2023, the Company recorded a $5.7 million benefit to the provision (benefit) for credit losses as compared to a $114,000 benefit for the same period in the prior year. Management has continued to evaluate the Current Expected Credit Losses ("CECL") model since its adoption in the beginning of the year 2023. Given Management's fourth quarter evaluation of both quantitative and qualitative CECL model factors and experience with the model, the decision was made to reduce the level of qualitative factors within the CECL model. In addition, the loan portfolio and the unfunded commitments both declined in the fourth quarter of 2023 compared to the third quarter of 2023, which also contributed to the reduction in provision for credit losses. Finally, the CECL model is driven primarily by quantitative inputs and, as such, there was increased reliance on the quantitative factors rather than qualitative during 2023. Management believes that the allowance for credit losses on loans was appropriate at December 31, 2023 and 2022.

Net interest margin decreased by 134 basis points to 2.51% for the three months ended December 31, 2023 compared to 3.85% for the three months ended December 31, 2022. The decrease in the net interest margin is primarily attributable to a significant increase in the average cost of interest-bearing liabilities to 3.78% for the three months ended December 31, 2023 from 1.65% for the three months ended December 31, 2022 and an increase in the average balance of interest-bearing liabilities to $1.07 billion for the three months ended December 31, 2023 from $844.6 million for the three months ended December 31, 2022. These increases were partially offset by an increase in average balance of interest earning assets to $1.26 billion for the three months ended December 31, 2023 compared to $1.09 billion for the three months ended December 31, 2022 and an increase in the average yield of interest earning assets to 5.43% for the three months ended December 31, 2023 from 5.00% for the three months ended December 31, 2022.

Non-interest income increased by $95,000 or 23.1% to $506,000 for the three months ended December 31, 2023 from $411,000 for the three months ended December 31, 2022. The increase in total non-interest income resulted primarily from an increase in service charges and fees of $42,000 as a result of loan commitment fee income recorded in the fourth quarter of 2023. Income on bank owned life insurance increased $50,000 or 29.3% for the three months ended December 31, 2023 compared to the same period in the prior year as a result of an increase in interest rate.

Non-interest expense decreased by $151,000 or 2.1% to $7.0 million for the three months ended December 31, 2023 compared to $7.2 million for the three months ended December 31, 2022. Salaries and employee benefits increased by $213,000 or 5.3% to $4.2 million for the three months ended December 31, 2023 as compared to $4.0 million for the three months ended December 31, 2022. The increase in salaries and employee benefits resulted primarily due to additions to staff and separation cost. Occupancy and equipment expense increased by $125,000 or 16.0% to $909,000 for the three months ended December 31, 2023 from $784,000 for the three months ended December 31, 2022. The increase in occupancy and equipment expense was primarily due to addition of a new cloud-based software services to assist the Bank in improving the on-line banking experience. FDIC insurance assessment increased $203,000 or 414.7% to $252,000 for the three months ended December 31, 2023 as compared to $49,000 for the same period in the prior year as a result of an increase in the deposit insurance assessment rate. Data processing costs increased by $64,000 or 19.0% to $399,000 for the three months ended December 31, 2023 from $334,000 for the same period in the prior year. All of these increases were more than offset by a decrease in other operating expenses of $471,000 or 39.9% to $710,000 for the three months ended December 31, 2023 as compared to $1.2 million for the same period in the prior year, primarily due to reserve provided for unfunded loan commitments. The Bank had no gain/loss on other real estate owned in the fourth quarter of 2023 compared to a $230,000 loss on other real estate owned in the fourth quarter of 2022. All other variances within the other components of non-interest expenses were not material.

The income tax provision increased by $1.0 million or 90.4% to $2.1 million for the three months ended December 31, 2023 from $1.1 million for the three months ended December 31, 2022. The increase in the income tax provision resulted primarily from a significant increase in the pre-tax income and an increase in the state tax rate year over year.

Full Year of Operations

Net interest income decreased by $7.0 million or 15.0% to $39.4 million for the fiscal year ended December 31, 2023 from $46.4 million for the fiscal year ended December 31, 2022.

Total interest income increased by $19.1 million or 36.0% to $72.1 million for the fiscal year ended December 31, 2023 from $53.0 million for the fiscal year ended December 31, 2022. Interest income on loans, including fees, increased $17.1 million or 34.2% year over year resulting primarily from an increase in the average balance of loans receivable of $210.5 million or 20.9% to $1.2 billion for the fiscal year ended December 31, 2023 compared to $1.0 billion for the fiscal year ended December 31, 2022 and an increase of fifty-five basis points in the average yield on loans to 5.52% for the fiscal year ended December 31, 2023 from 4.97% for the fiscal year ended December 31, 2022. Fee income from loans decreased $913,000 for the fiscal year ended December 31, 2023 primarily due to declines in both prepayment penalty fees and Paycheck Protection Program fees of $685,000 and $505,000, respectively, partially offset by a net increase of $240,000 in commercial loan fees compared to the same period in the prior year.

Interest income on interest-bearing deposits with banks increased $1.6 million or 241.6% to $2.3 million for the fiscal year ended December 31, 2023 compared to $660,000 for the same period in the prior year. This increase resulted from a significantly higher average yield on interest-bearing deposits with banks of 4.58% for the fiscal year ended December 31, 2023 compared to 0.93% for the same period in the prior year, despite a decline of $21.9 million in average balances of interest-bearing deposits with banks year over year. Dividend income on Federal Home Loan Bank stock increased $382,000, or 642.9% to $442,000 for the fiscal year ended December 31, 2023 compared to $59,000 for the same period in the prior year. This increase was a result of an increase in dividend yield to 7.19% for the fiscal year ended December 31, 2023 compared to 3.44% for the same period in the prior year coupled with an increase in average balance of $4.3 million to $6.1 million compared to $1.7 million year over year. Interest income on investment securities totaled $2.2 for the year end December 31, 2023, almost unchanged when compared to $2.2 million for the fiscal year ended December 31, 2022. The average yield on investment securities declined two basis points to 2.88% for the fiscal year ended December 31, 2023 compared to 2.90% for the same period in the prior year.

Total interest expense increased by $26.1 million or 395.3% to $32.7 million for the fiscal year ended December 31, 2023 from $6.6 million for the fiscal year ended December 31, 2022. The increase in interest expense was primarily as a result of an increase in the average cost of interest-bearing liabilities of 241 basis points to 3.25% for the fiscal year ended December 31, 2023 from 0.84% for the fiscal year ended December 31, 2022, coupled with an increase in average balance of interest-bearing liabilities of $224.9 million or 28.8% to $1.01 billion for the fiscal year ended December 31, 2023 from $781.9 million for the fiscal year ended December 31, 2022. The average balance of interest-bearing liabilities included a $133.3 million increase in average interest-bearing deposit liabilities and a $91.5 million increase in average wholesale borrowings for the fiscal year ended December 31, 2023. The increase in the average cost of interest-bearing liabilities resulted primarily from a significant increase in market interest rates over the past few years as the Federal Reserve Board of Governors has systematically tightened short-term interest rates in an effort to combat inflation.

The Company recorded a $4.7 million benefit to the provision (benefit) for credit losses for the fiscal year ended December 31, 2023 as compared to a benefit of $358,000 for the fiscal year ended December 31, 2022. The increase in the benefit for credit losses was primarily due to the reduction in percentages of qualitative factors applied in estimating the provision (benefit) for credit losses which resulted in a benefit of $5.7 million recorded in the fourth quarter of 2023. Given Management's fourth quarter evaluation of both quantitative and qualitative model factors and experience with the CECL model, the decision was made to reduce the level of qualitative factors within the CECL model. The CECL model is driven primarily by quantitative inputs and, as such, there was increased reliance on the quantitative factors than qualitative during 2023. Management believes that the allowance for credit losses on loans was appropriate at December 31, 2023 and 2022.

Net interest margin decreased by 110 basis points to 2.92% for the fiscal year ended December 31, 2023 compared to 4.02% for the fiscal year ended December 31, 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 as well as an increase in average yield on average interest earning assets.

Non-interest income increased by $665,000 or 46.2% to $2.1 million for the fiscal year ended December 31, 2023 from $1.4 million for the fiscal year ended December 31, 2022. The increase in total non-interest income resulted primarily from an increase in Bank owned life insurance ("BOLI") income of $580,000 or 87.1% to $1.2 million for the fiscal year ended December 31, 2023 from $666,000 for the fiscal year ended December 31, 2022. The increase in BOLI income resulted from a one-time death benefit received on the Bank's investment in BOLI. Service charges and fees increased $98,000 to $816,000 for the fiscal year ended December 31, 2023 compared to $718,000 for the same period in the prior year, primarily as a result of fees collected on loan commitments.

Non-interest expense increased by $1.5 million or 5.7% to $27.8 million for the fiscal year ended December 31, 2023 compared to $26.3 million for the fiscal year ended December 31, 2022. Salaries and employee benefits increased by $1.2 million or 7.4% to $17.2 million for the fiscal year ended December 31, 2023 compared to $16.0 million for the fiscal year ended December 31, 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 and employee health benefits cost. Occupancy and equipment expense increased by $185,000 or 5.5% to $3.6 million for the fiscal year ended December 31, 2023 compared to $3.4 million for the fiscal year ended December 31, 2022, as a result of a significant reduction in rental income during the year 2023 as compared to the year 2022, coupled with the addition of a new cloud-based software services to assist the Bank in improving the on-line banking experience. Advertising and marketing expense increased by $138,000 or 65.0% to $350,000 for the fiscal year ended December 31, 2023 from $212,000 for the fiscal year ended December 31, 2022, as a result of the Bank utilizing resources to build our brand and attract retail deposits. Professional fees increased by $428,000 or 25.9% to $2.1 million for the fiscal year ended December 31, 2023 from $1.7 million for the fiscal year ended December 31, 2022, as a result of increased fees related to the bank holding company reorganization application and the initiative to list on the Nasdaq Capital Market exchange. Data processing costs increased by $185,000 or 21.2% to $1.1 million for the fiscal year ended December 31, 2023 from $869,000 for the fiscal year ended December 31, 2022, primarily due to the overall growth of the Bank. FDIC assessment increased by $150,000 or 28.2% to $681,000 for the fiscal year ended December 31, 2023 from $531,000 for the fiscal year ended December 31, 2022, primarily due to an increase in the deposit insurance assessment rate in effect during the fourth quarter of 2023. These increases were partially offset by a $676,000 or 19.5% decrease in other expenses to $2.8 million for the fiscal year ended December 31, 2023 from $3.5 million for the same period in the prior year, primarily due to a significant decrease in miscellaneous loan expenses. Other expenses also include telephone, subscriptions, software maintenance and depreciation, office supplies and computer supplies. Loss on OREO totaled $59,000 for the fiscal year ended December 31, 2023, a decrease of $106,000 or $64.3% compared to $165,000 for the fiscal year ended December 31, 2022.

The income tax provision decreased by $619,000 or 11.7% to $4.7 million for the fiscal year ended December 31, 2023 from $5.3 million for the fiscal year ended December 31, 2022. The decrease in the income tax provision resulted primarily from a decrease in earnings before income taxes of $3.4 million or 15.7%, which included additional non-taxable income of $510,000 for the one-time death benefit from BOLI investment, to $18.4 million for the fiscal year ended December 31, 2023 from $21.9 million for the fiscal year ended December 31, 2022. The effective tax rate for the fiscal year ended December 31, 2023 was 25.3% as compared to 24.1% for the fiscal year ended December 31, 2022. The increase in effective tax rate resulted from an increase in the state tax rate year over year.

Asset Quality

The allowance for credit losses decreased by $3.3 million to $14.5 million or 1.16% of gross loans at December 31, 2023 from $17.8 million or 1.59% of gross loans at December 31, 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.

The Bank had non-accrual loans totaling $18.4 million or 1.47% of gross loans at December 31, 2023 as compared to $12.7 million or 1.14% of gross loans at December 31, 2022. Non-accrual loans increased by $5.7 million or 44.9% during the year ended December 31, 2023 and OREO balances decreased by $4.0 million or 100% to no OREO at December 31, 2023 from $4.0 million at December 31, 2022.

The allowance for credit losses was 78.8% of non-accrual loans at December 31, 2023, compared to 139.6% of non-accrual loans at December 31, 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, Jackson, Lakewood, Montvale, Robbinsville and Teaneck, New Jersey. 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 and the impact of a potential shutdown of the federal government.

First Commerce Bancorp, Inc.
Consolidated Balance Sheets
(Unaudited)

										December 31, 2023 vs.
										December 31, 2022
(In thousands, except percentages and share amounts)		December 31, 2023				December 31, 2022				Amount				%
Assets
Cash and cash equivalents:
Cash on hand		$	1,745			$	1,686			$	59				3.5	%
Interest bearing deposits in other banks			59,979				40,899				19,080				46.7	%
Total cash and cash equivalents			61,724				42,585				19,139				44.9	%
Investment securities:
Available-for-sale, at fair value			9,537				13,902				(4,365	)			-31.4	%
Held-to-maturity, at amortized cost			59,551				65,788				(6,237	)			-9.5	%
Less: Allowance for credit losses - HTM securities			(26	)			-				(26	)			0.0	%
Total investment securities			69,062				79,690				(10,628	)			-13.3	%
Federal Home Loan Bank stock			7,169				3,699				3,470				93.8	%
Loans receivable			1,251,227				1,118,081				133,146				11.9	%
Less: Allowance for credit losses			(14,470	)			(17,781	)			3,311				-18.6	%
Net loans			1,236,757				1,100,300				136,457				12.4	%
Premises and equipment			15,861				15,725				136				0.9	%
Right-of-use asset			9,498				9,913				(415	)			-4.2	%
Bank owned life insurance			25,757				25,781				(24	)			-0.1	%
Other real estate owned			-				3,971				(3,971	)			-100.0	%
Deferred tax asset			2,947				4,436				(1,489	)			-33.6	%
Accrued interest receivable			5,632				4,638				994				21.4	%
Other assets			1,691				1,388				303				21.8	%
Total assets		$	1,436,099			$	1,292,126			$	143,973				11.1	%
Liabilities and Shareholders' Equity
Liabilities
Deposits:
Non-interest bearing		$	164,344			$	211,794			$	(47,450	)			-22.4	%
Interest bearing			943,295				824,520				118,775				14.4	%
Total Deposits			1,107,639				1,036,314				71,325				6.9	%
Borrowings			130,000				59,000				71,000				120.3	%
Accrued interest payable			2,009				993				1,016				102.3	%
Lease liability			10,161				10,453				(292	)			-2.8	%
Other liabilities			2,294				4,976				(2,682	)			-53.9	%
Total liabilities			1,252,103				1,111,736				140,367				12.6	%
Commitments and contingencies			-				-				-
Shareholders' equity
Preferred stock			-				-				-				N/A
Common stock			-				47,570				(47,570	)			N/A
Additional paid-in capital			88,941				41,022				47,919				116.8	%
Retained earnings			102,219				92,107				10,112				11.0	%
Treasury shares, at cost			(6,964	)			-				(6,964	)			N/A
Accumulated other comprehensive loss			(200	)			(309	)			109				-35.3	%
Total shareholders' equity			183,996				180,390				3,606				2.0	%
Total liabilities and shareholders' equity		$	1,436,099			$	1,292,126			$	143,973				11.1	%
Shares issued			23,856,990				23,785,490
Shares outstanding			22,830,559				23,785,490
Treasury shares			1,026,431				-

First Commerce Bancorp, Inc.
Consolidated Statements of Income
For the three months ended December 31, 2023 and 2022
(Unaudited)

										Variance
(In thousands, except percentages and per share amounts)		December 31, 2023				December 31, 2022				Amount				%
Interest Income
Loans, including fees		$	17,659			$	14,412			$	3,247				22.5	%
Investment securities:
Available-for-sale			81				106				(25	)			-23.6	%
Held-to-maturity			479				475				4				0.8	%
Interest-bearing deposits with banks			598				271				327				120.7	%
Federal Home Loan Bank stock			147				25				122				488.0	%
Total interest income			18,964				15,289				3,675				24.0	%
Interest expense											-
Deposits			8,765				2,976				5,789				194.5	%
Borrowings			1,418				544				874				160.7	%
Total interest expense			10,183				3,520				6,663				189.3	%
Net interest income			8,781				11,769				(2,988	)			-25.4	%
Provision (benefit) for credit losses			(4,981	)			(114	)			(4,867	)			4269.3	%
Benefit for unfunded commitments for credit losses			(715	)			-				(715	)			N/A
Provision for credit losses - HTM securities			(2	)			-				(2	)			N/A
Total provision (benefit) for credit losses			(5,698	)			(114	)			(5,584	)			4898.2	%
Net interest income after provision for credit losses			14,479				11,883				2,596				21.8	%
Non-interest income
Service charges and fees			273				231				42				18.2	%
Bank owned life insurance income			222				172				50				29.1	%
Other income			11				8				3				37.5	%
Total non-interest income			506				411				95				23.1	%
Non-Interest Expenses
Salaries and employee benefits			4,236				4,023				213				5.3	%
Occupancy and equipment expense			909				784				125				15.9	%
Marketing			64				61				3				4.9	%
Professional fees			435				493				(58	)			-11.8	%
Data processing			399				334				65				19.5	%
FDIC assessment			252				49				203				414.3	%
Loss/(gain) on valuation of OREO			-				230				(230	)			-100.0	%
Other expenses			710				1,182				(472	)			-39.9	%
Total non-interest expenses			7,005				7,156				(151	)			-2.1	%
Income before income taxes			7,980				5,138				2,842				55.3	%
Income tax expense			2,146				1,127				1,019				90.4	%
Net income		$	5,834			$	4,011			$	1,823				45.5	%
Earnings per common share - Basic		$	0.25			$	0.17			$	0.08				47.1	%
Earnings per common share - Diluted			0.25				0.17				0.08				47.1	%
Weighted average shares outstanding - Basic			22,969				23,785				(816	)			-3.4	%
Weighted average shares outstanding - Diluted			23,272				23,939				(667	)			-2.8	%

First Commerce Bancorp, Inc.
Consolidated Statements of Income
For the years ended December 31, 2023 and 2022
(Unaudited)

										Variance
(In thousands, except percentages and per share amounts)		December 31, 2023				December 31, 2022				Amount				%
Interest Income
Loans, including fees		$	67,208			$	50,089			$	17,119				34.2	%
Investment securities:
Available-for-sale			360				573				(213	)			-37.2	%
Held-to-maturity			1,816				1,586				231				14.5	%
Interest-bearing deposits with banks			2,253				660				1,593				241.6	%
Federal Home Loan Bank stock			442				59				382				642.9	%
Total interest income			72,079				52,967				19,112				36.1	%
Interest expense											-
Deposits			27,416				5,969				21,447				359.3	%
Borrowings			5,272				630				4,642				736.8	%
Total interest expense			32,688				6,599				26,089				395.3	%
Net interest income			39,391				46,368				(6,977	)			-15.0	%
Provision (benefit) for credit losses			(3,485	)			(358	)			(3,127	)			873.4	%
Benefit for unfunded commitments for credit losses			(1,268	)			-				(1,268	)			N/A
Provision for credit losses - HTM securities			26				-				26				N/A
Total provision (benefit) for credit losses			(4,727	)			(358	)			(4,369	)			1220.4	%
Net interest income after provision for credit losses			44,118				46,726				(2,608	)			-5.6	%
Non-interest income
Service charges and fees			816				718				98				13.6	%
Bank owned life insurance income			1,246				666				580				87.1	%
Other income			44				57				(13	)			-23.1	%
Total non-interest income			2,106				1,441				665				46.2	%
Non-Interest Expenses
Salaries and employee benefits			17,209				16,020				1,189				7.4	%
Occupancy and equipment expense			3,576				3,391				185				5.5	%
Marketing			350				212				138				65.0	%
Professional fees			2,079				1,651				428				25.9	%
Data processing			1,054				869				185				21.2	%
FDIC assessment			681				531				150				28.2	%
Loss/(gain) on valuation of OREO			59				165				(106	)			-64.5	%
Other expenses			2,783				3,459				(676	)			-19.5	%
Total non-interest expenses			27,791				26,298				1,493				5.7	%
Income before income taxes			18,433				21,869				(3,436	)			-15.7	%
Income tax expense			4,656				5,275				(619	)			-11.7	%
Net income		$	13,777			$	16,594			$	(2,817	)			-17.0	%
Earnings per common share - Basic		$	0.58			$	0.70			$	(0.12	)			-17.1	%
Earnings per common share - Diluted			0.58				0.69				(0.04	)			-5.8	%
Weighted average shares outstanding - Basic			23,581				23,597				(16	)			-0.1	%
Weighted average shares outstanding - Diluted			23,884				23,987				(103	)			-0.4	%

First Commerce Bancorp, Inc.
Net Interest Margin Analysis
(Unaudited)

		Three months ended December 31, 2023										Three months ended December 31, 2022
		Average						Average				Average						Average
		Balance			Interest			Yield/Cost				Balance			Interest			Yield/Cost
(Dollars in thousands)
Assets:
Interest-earning assets:
Interest-bearing deposits		$	49,164		$	598			4.83	%		$	34,729		$	271			3.09	%
Investment securities:
Available-for-sale			10,427			81			3.09	%			14,100			106			3.01	%
Held-to-maturity			60,489			479			3.17	%			67,432			475			2.82	%
Total investment securities			70,916			560			3.16	%			81,532			581			2.85	%
Federal Hone Loan Bank stock			6,435			147			9.12	%			3,256			25			3.13	%
Loans:
Consumer loans			389			2			2.37	%			298			3			3.45	%
Home equity loans			3,066			79			10.19	%			3,904			58			5.94	%
Construction loans			125,214			2,817			8.80	%			93,219			1,871			7.85	%
Commercial loans			33,910			699			8.07	%			44,439			854			7.52	%
Commercial mortgage loans			1,053,155			13,318			5.02	%			909,096			10,953			4.71	%
Residential mortgage loans			15,107			182			4.79	%			16,126			220			5.41	%
SBA loans			28,159			561			7.79	%			26,618			453			6.66	%
Loans Held for Sale			-			-			0.00	%			61			-			0.00	%
Total loans			1,259,000			17,658			5.56	%			1,093,761			14,412			5.23	%
Total interest-earning assets			1,385,515			18,963			5.43	%			1,213,278			15,289			5.00	%
Non-interest-earning assets:
Allowance for credit losses			(19,481	)									(17,831	)
Cash and due from bank			1,918										2,030
Other assets			61,138										63,128
Total non-interest-earning assets			43,575										47,327
Total assets		$	1,429,090									$	1,260,605
Liabilities and shareholders' equity:
Interest-bearing liabilities:
Interest-bearing checking accounts		$	58,274		$	225			1.53	%		$	50,930		$	76			0.59	%
NOW accounts			26,274			47			0.71	%			32,044			31			0.39	%
Money market accounts			176,786			1,327			2.98	%			215,130			736			1.36	%
Savings accounts			32,326			32			0.39	%			86,643			71			0.32	%
Certificates of deposit			580,521			6,007			4.11	%			410,703			2,062			1.99	%
Brokered CDs			81,875			1,126			5.46	%			-			-			0.00	%
Borrowings			113,696			1,418			4.95	%			49,158			544			4.39	%
Total interest-bearing liabilities			1,069,752		$	10,182			3.78	%			844,608		$	3,520			1.65	%
Non-interest-bearing liabilities:
Demand deposits			162,324										223,304
Other liabilities			16,148										13,090
Total non-interest bearing liabilities			178,472										236,394
Shareholders' equity			180,866										179,604
Total liabilities and shareholders' equity		$	1,429,090									$	1,260,606
Net interest spread									1.65	%									3.35	%
Net interest margin					$	8,781			2.51	%					$	11,769			3.85	%

First Commerce Bancorp, Inc.
Net Interest Margin Analysis
(Unaudited)

		Year ended December 31, 2023										Year ended December 31, 2022
		Average						Average				Average						Average
		Balance			Interest			Yield/Cost				Balance			Interest			Yield/Cost
(Dollars in thousands)
Assets:
Interest-earning assets:
Interest-bearing deposits		$	49,184		$	2,253			4.58	%		$	71,054		$	660			0.93	%
Investment securities:
Available-for-sale			11,823			360			3.00	%			16,839			573			3.35	%
Held-to-maturity			62,733			1,816			2.86	%			56,668			1,586			2.76	%
Total investment securities			74,556			2,176			2.88	%			73,507			2,159			2.90	%
Federal Home Loan Bank stock			6,053			442			7.19	%			1,706			59			3.44	%
Loans:
Consumer loans			318			10			3.03	%			283			11			3.77	%
Home equity loans			3,474			263			7.58	%			4,082			185			4.54	%
Construction loans			115,419			10,195			8.71	%			94,320			5,859			6.13	%
Commercial loans			37,004			2,896			7.72	%			52,472			3,226			6.06	%
Commercial mortgage loans			1,017,914			50,922			4.94	%			807,521			37,891			4.63	%
Residential mortgage loans			15,411			740			4.80	%			17,732			866			4.89	%
SBA loans			28,381			2,183			7.59	%			31,025			2,051			6.52	%
Loans held for sale			5			-			0.00	%			16			-			0.00	%
Total loans			1,217,926			67,209			5.52	%			1,007,451			50,089			4.97	%
Total interest-earning assets			1,347,719			72,080			5.35	%			1,153,718			52,967			4.59	%
Non-interest-earning assets:
Allowance for credit losses			(18,664	)									(17,750	)
Cash and due from bank			1,780										1,853
Other assets			61,113										63,590
Total non-interest-earning assets			44,229										47,693
Total assets		$	1,391,948									$	1,201,411
Liabilities and shareholders' equity:
Interest-bearing liabilities:
Interest-bearing checking accounts		$	51,026		$	570			1.12	%		$	57,560		$	239			0.41	%
NOW accounts			26,851			157			0.58	%			30,105			117			0.39	%
Money market accounts			178,395			4,486			2.51	%			232,020			1,750			0.75	%
Savings accounts			42,382			150			0.35	%			144,917			487			0.34	%
Certificates of deposit			561,340			19,825			3.53	%			302,002			3,376			1.12	%
Brokered CDs			39,930			2,229			5.58	%			-			-			0.00	%
Borrowings			106,801			5,272			4.94	%			15,267			630			4.13	%
Total interest-bearing liabilities			1,006,725		$	32,689			3.25	%			781,871		$	6,599			0.84	%
Non-interest-bearing liabilities:
Demand deposits			185,346										226,016
Other liabilities			16,482										14,641
Total non-interest bearing liabilities			201,828										240,657
Shareholders' equity			183,395										178,883
Total liabilities and shareholders' equity		$	1,391,948									$	1,201,411
Net interest spread									2.10	%									3.75	%
Net interest margin					$	39,391			2.92	%					$	46,368			4.02	%

First Commerce Bancorp, Inc.
Selected Financial Data
(Unaudited)

		As of and for the Quarters Ended								As of and for the Years Ended
(In thousands, except per share data)		12/31/2023				12/31/2022				12/31/2023				12/31/2022
Summary earnings:
Interest income		$	18,964			$	15,289			$	72,079			$	52,967
Interest expense			10,183				3,520				32,688				6,599
Net interest income			8,781				11,769				39,391				46,368
Provision (benefit) for credit losses			(5,698	)			(114	)			(4,727	)			(358	)
Net interest income after provision (benefit) for credit losses			14,479				11,883				44,118				46,726
Non-interest income			506				411				2,106				1,441
Non-interest expense			7,005				7,156				27,791				26,298
Income before income tax expense			7,980				5,138				18,433				21,869
Income tax expense			2,146				1,127				4,656				5,275
Net income		$	5,834			$	4,011			$	13,777			$	16,594
Per share data:
Earnings per share - basic		$	0.25			$	0.17			$	0.58			$	0.70
Earnings per share - diluted			0.25				0.17				0.58				0.69
Cash dividends declared			0.04				0.04				-				-
Book value at period end			8.06				7.58				8.06				7.58
Shares outstanding at period end			22,831				23,785				22,831				23,785
Basic weighted average shares outstanding			22,969				23,785				23,581				23,597
Fully diluted weighted average shares outstanding			23,272				24,176				23,884				23,987
Balance sheet data (at period end):
Total assets		$	1,436,099			$	1,292,127			$	1,436,099			$	1,292,127
Investment securities, available-for-sale			9,537				13,902				9,537				13,902
Investment securities, held-to-maturity			59,525				65,788				59,525				65,788
Total loans			1,251,227				1,118,081				1,251,228				1,118,081
Allowance for credit losses			(14,470	)			(17,781	)			(14,470	)			(17,781	)
Total deposits			1,107,639				1,034,200				1,107,639				1,036,314
Shareholders' equity			183,996				180,390				183,996				180,390
Common cash dividends			952				951				3,806				9,276
Selected performance ratios:
Return on average total assets			1.62	%			1.27	%			0.99	%			1.38	%
Return on average shareholders' equity			12.80	%			8.93	%			7.51	%			9.28	%
Dividend payout ratio			16.32	%			23.71	%			27.63	%			55.90	%
Net interest margin			2.51	%			3.85	%			2.92	%			4.02	%
Efficiency ratio			75.43	%			58.75	%			66.97	%			55.01	%
Non-interest income to average assets			0.14	%			0.13	%			0.15	%			0.11	%
Non-interest expenses to average assets			1.94	%			2.25	%			2.00	%			2.18	%
Asset quality ratios:
Non-performing loans to total loans			1.47	%			1.14	%			1.47	%			1.14	%
Non-performing assets to total assets			1.28	%			1.29	%			1.28	%			1.29	%
Allowance for credit losses to non-performing loans			78.82	%			139.63	%			78.81	%			139.63	%
Allowance for credit losses to total loans			1.16	%			1.59	%			1.16	%			1.59	%
Net recoveries (charge-offs) to average loans			-0.03	%			-0.15	%			-0.01	%			0.39	%
Liquidity and capital ratios:
Net loans to deposits			111.66	%			106.39	%			111.66	%			106.39	%
Average loans to average deposits			112.57	%			108.36	%			112.22	%			102.25	%
Total shareholders' equity to total assets			12.81	%			13.96	%			12.81	%			13.96	%
Total capital to risk-weighted assets			15.71	%			16.23	%			15.71	%			16.23	%
Tier 1 capital to risk-weighted assets			14.52	%			14.97	%			14.52	%			14.97	%
Common equity tier 1 capital ratio to risk-weighted assets			14.52	%			14.97	%			14.52	%			14.97	%
Tier 1 leverage ratio			12.88	%			14.33	%			12.88	%			14.33	%

SOURCE: First Commerce Bancorp, Inc.

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FAQ

What is the net income and basic earnings per common share for First Commerce Bancorp, Inc. for the three months ended December 31, 2023?

The net income was $5.8 million, and the basic earnings per common share was $0.25 for the three months ended December 31, 2023.

What is the quarterly cash dividend declared by First Commerce Bancorp, Inc.?

The quarterly cash dividend declared is $0.04 per common share payable on February 20, 2024.

What is the net interest margin for the fourth quarter of 2023?

The net interest margin decreased by 134 basis points to 2.51% for the fourth quarter of 2023.

How much did the total loans receivable and total deposits increase by?

The total loans receivable increased by $133.1 million, and total deposits increased by $71.3 million.

What was the annualized return on average total assets for December 31, 2023?

The annualized return on average total assets was 0.99% at December 31, 2023.