1ST Constitution Bancorp Reports Third Quarter 2020 Results and Declares a Quarterly Dividend of $0.09 Per Share
1st Constitution Bancorp (NASDAQ: FCCY) reported a significant increase in net income to $4.9 million (up 35.5%) and diluted earnings per share of $0.48 for Q3 2020. This compares to $3.6 million and $0.42 in Q3 2019. A quarterly cash dividend of $0.09 per share was declared, payable on November 25, 2020. Notably, the provision for loan losses rose to $2.3 million, reflecting economic uncertainty due to COVID-19. The Bank’s loan portfolio grew, with total loans at $1.5 billion, and deposits increased by $101.6 million to $1.5 billion by September 30, 2020.
- Net income increased 35.5% to $4.9 million.
- Diluted earnings per share rose 14.3% to $0.48.
- Total loans increased by $100.2 million to $1.5 billion.
- Deposits grew by $101.6 million to $1.5 billion.
- Declared quarterly cash dividend of $0.09 per share.
- Provision for loan losses increased to $2.3 million amidst economic uncertainty.
- Non-performing assets rose by $3.5 million to $17.5 million, or 0.95% of total assets.
CRANBURY, N.J., Oct. 23, 2020 (GLOBE NEWSWIRE) -- 1ST Constitution Bancorp (NASDAQ: FCCY), the holding company (the “Company”) for 1ST Constitution Bank (the “Bank”), today reported net income of
The Board of Directors declared a quarterly cash dividend of
Robert F. Mangano, President and Chief Executive Officer, stated “The Company continued to generate solid fundamental operating performance during the third quarter of 2020 despite the challenging economic environment. The Company’s residential mortgage banking and mortgage warehouse lending operations continued to benefit from the low interest rate environment, which drove a
Mr. Mangano added, “As we are navigating through the COVID-19 pandemic impact and the economic and social disruption to our customers and communities we serve, we continue to closely monitor our loan portfolio to identify potential weaknesses. The unknown severity and duration of the pandemic present a continuing challenge. However, we believe that the Company has the financial strength and flexibility to address these adverse economic and operating conditions.”
THIRD QUARTER 2020 HIGHLIGHTS
- Return on average total assets and return on average shareholders' equity were
1.08% and10.92% , respectively. - Net interest income was
$15.4 million and net interest margin was3.67% on a tax equivalent basis. - A provision for loan losses of
$2.3 million was recorded for the third quarter of 2020, net recoveries were$5,000. - Total loans were
$1.5 billion at September 30, 2020 and increased$100.2 million from June 30, 2020. Mortgage warehouse loans increased$76.9 million and commercial real estate loans increased$23.7 million from June 30, 2020. - As of September 30, 2020, the Bank had funded
$75.6 million in Small Business Administration ("SBA") Paycheck Protection Program ("PPP") loans under the Coronavirus Aid, Relief and Economic Security Act ("CARES Act"). - Total deposits were
$1.5 billion at September 30, 2020 and increased$101.6 million , with non-interest demand deposits increasing$29.3 million , from June 30, 2020. - Non-performing assets were
$17.5 million , or0.95% of total assets at September 30, 2020, increased$3.5 million from June 30, 2020 and included$267,000 of other real estate owned ("OREO").
For the nine months ended September 30, 2020, net income was
COVID-19 Impact and Response
In the earnings press releases issued for the first and second quarters of 2020, the Company reported the initial steps that it took in response to the sudden emergence of the COVID-19 global pandemic.
During the third quarter of 2020, the Company continued working with customers severely impacted by the economic disruption. Management significantly increased the provision for loan losses in response to the higher incurred losses in the loan portfolio. Management may further adjust the provision and allowance for loan losses in response to changes in economic conditions and the performance of the loan portfolio in future periods.
As we conduct our daily operations, the safety of our employees and customers remains our primary concern and we continue to maintain the same measures and protective procedures that we implemented in the second quarter of 2020.
To support our loan and deposit customers and the communities we serve:
- We continue to provide access to additional credit and forbearance on loan interest and or principal payments for up to 90 days where management has determined that it is warranted. Through September 30, 2020,
$149.3 million of loans ($140.9 million of commercial loans and$8.4 million of consumer loans) were modified to provide deferral of interest and or principal by borrowers for up to 90 days. - As a long-standing SBA preferred lender, we actively participated in the SBA’s PPP lending program established under the CARES Act. As of September 30, 2020, we funded 467 SBA PPP loans totaling
$75.6 million . - We are registered to utilize the Main Street New Loan Facility (“Facility”) established by the Board of Governors of the Federal Reserve System (the “Federal Reserve”) under the CARES Act to provide financing to our customers and communities. This Facility is intended to facilitate lending by banks to small and medium-sized businesses, which we believe may be beneficial to certain of our customers.
- We are participating in the Federal Reserve's PPP loan funding program and are pledging the PPP loans to collateralize a like amount of borrowings from the Federal Reserve at a favorable interest rate of
0.35% up to a two-year term.
Modification of Loans and Deferral of Payments
Through September 30, 2020,
FAQ
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