First Bank Reports Third Quarter 2020 Net Income of $5.9 Million
First Bank (FRBA) reported a strong financial performance for Q3 and the first nine months of 2020. Net income for Q3 was $5.9 million, up from $1.1 million in Q3 2019, showing a significant increase of 436%. Year-to-date net income reached $13.3 million, a 61.6% rise year-over-year. Total net revenue for Q3 was $19.9 million, a 33.6% increase, driven by robust loan growth, including $190.7 million in PPP loans. Total loans reached $2 billion, up 15%, and total deposits increased to $1.84 billion, an 11.1% rise. Asset quality remains stable with a low ratio of nonperforming loans at 0.63%. The bank declared a cash dividend of $0.03 per share.
- Net income for Q3 2020 was $5.9 million, a 436% increase from Q3 2019.
- Year-to-date net income was $13.3 million, up 61.6% compared to the same period in 2019.
- Total net revenue for Q3 2020 was $19.9 million, increasing 33.6% year-over-year.
- Total loans increased by $260.8 million, or 15.0%, to $2.00 billion compared to Q3 2019.
- Total deposits rose to $1.84 billion, an increase of 11.1% from the previous year.
- Nonperforming loans ratio improved to 0.63% from 0.91% a year ago.
- Provision for loan losses for Q3 2020 was $2.0 million, up from $1.6 million in Q3 2019.
- Net interest margin for the nine months ended September 30, 2020, decreased by 13 basis points year-over-year.
Net Income of
For the Third Quarter and Nine Months of 2020: Strong Revenue Growth, Continued Solid Organic Loan Origination, Effective Management of Non-Interest Expense
HAMILTON, N.J., Oct. 26, 2020 (GLOBE NEWSWIRE) -- First Bank (Nasdaq Global Market: FRBA) today announced results for the three and nine months ended September 30, 2020. Net income for the third quarter of 2020 was
Third Quarter 2020 Performance Highlights:
- Total net revenue (net interest income plus non-interest income) of
$19.9 million for the quarter increased$5.0 million , or33.6% , from$14.9 million , compared to the prior year quarter. Total net revenue for the nine months ended September 30, 2020 was$55.2 million , an increase of$10.4 million , or23.3% , compared to the prior year period. - Total loans of
$2.00 billion at September 30, 2020 increased$260.8 million , or15.0% , from$1.74 billion on September 30, 2019, and increased$281.1 million , or16.3% , from December 31, 2019. Total loans on September 30, 2020 included$190.7 million in Paycheck Protection Program (“PPP”) loans. - Total deposits of
$1.84 billion at September 30, 2020 increased$182.8 million , or11.1% , from$1.65 billion on September 30, 2019 and increased$194.6 million , or11.9% , compared to December 31, 2019. - Asset quality metrics remained solid and stable during the quarter, despite the ongoing economic uncertainty associated with the COVID-19 pandemic, with net charge-offs of
$633,000 , or an annualized0.13% of average loans, for third quarter 2020, compared to net charge-offs of$1.1 million for third quarter 2019. Nonperforming loans were$12.7 million on September 30, 2020,$15.8 million on September 30, 2019, and$14.1 million on June 30, 2020. The ratio of nonperforming loans to total loans was0.63% at September 30, 2020 compared to0.91% at September 30, 2019, and0.72% at June 30, 2020. - Continued effective non-interest expense management was reflected in the third quarter 2020 efficiency ratio2 of
50.08% compared to57.19% for third quarter 2019, and53.66% for the linked second quarter of 2020.
“First Bank’s overall performance for third quarter 2020 was very solid despite the ongoing COVID-related challenges to the operating environment,” said Patrick L. Ryan, President and Chief Executive Officer. “Total net revenue increased by more than
“The third quarter net interest margin improved in comparison to both third quarter 2019 and second quarter 2020, driven primarily by our focus on lowering deposit costs and improving our mix. We were able to lower interest bearing deposit costs by 91 basis points compared to third quarter 2019, primarily by allowing higher-cost time deposits to run off and replacing them with lower-cost savings and transaction accounts. Our ratio of non-interest bearing deposits to total deposits has increased to
“We continue to demonstrate a disciplined approach to managing operating expenses. We believe our third quarter total non-interest expense of
“Our third quarter provision for loan losses of
"While additional COVID-related uncertainty likely remains ahead, the underlying strength of our franchise and business strategy will become more apparent as the benefit of our lower funding costs are reflected in our results. Our focus remains on driving organic growth, optimizing the balance sheet and executing on operational efficiency.”
Income Statement
First Bank’s net interest income for the third quarter of 2020 was
The increase in interest income was primarily a result of a
The third quarter 2020 tax equivalent net interest margin was
The tax equivalent net interest margin for the nine months ended September 30, 2020 was
The provision for loan losses for the third quarter of 2020 was
Third quarter 2020 non-interest income was
Non-interest expense for third quarter 2020 totaled
Non-interest expense for the first nine months of 2020 totaled
Pre-provision net revenue3 for the third quarter of 2020 was
Income tax expense for the three months ended September 30, 2020 was
Balance Sheet
Total assets at September 30, 2020 were
Total deposits were
Stockholders’ equity was
As of September 30, 2020, the Bank continued to exceed all regulatory capital requirements to be considered well capitalized, with a Tier 1 Leverage ratio of
Asset Quality
First Bank’s asset quality metrics have remained relatively stable and favorable during the past 12 months. Net charge-offs were
COVID-19 Response
First Bank participated in the PPP, established by the Coronavirus Aid, Relief, and Economic Securities Act (CARES Act), during the first nine months of 2020. PPP is a specialized low-interest loan program funded by the U.S. Treasury Department and administered by the U.S. Small Business Administration (SBA). The PPP provides borrower guarantees for lenders, as well as loan forgiveness incentives for borrowers that utilize the loan proceeds to cover compensation-related business operating costs. As of September 30, 2020, First Bank has 1,147 PPP loans with a current balance of
First Bank continues to monitor and analyze its COVID-19 related financial hardship payment deferrals (COVID-19 deferrals) based on asset class and borrower type. As of October 15, 2020, the Bank’s population of COVID-19 deferrals was
The
Consistent with industry regulatory guidance, borrowers that were otherwise current on loan payments that were granted COVID-19 related financial hardship payment deferrals continue to be reported as current loans throughout the agreed upon deferral period, continue to accrue interest and are not required to be accounted for as a troubled debt restructuring.
Cash Dividend Declared
On October 20, 2020, First Bank’s Board of Directors declared a quarterly cash dividend of
Share Repurchase Program
On October 23, 2020, the Bank received regulatory approval for the repurchase of up to 1.5 million shares of First Bank common stock in the open market. This new share repurchase program was also approved by the Bank’s board and will run through September 30, 2021. No shares were repurchased during the quarter ended September 30, 2020, however 1.0 million shares of common stock have been repurchased during first six months of 2020 for an aggregate purchase price of approximately
Conference Call
First Bank will host its earnings call on Tuesday, October 27, 2020 at 9:00 AM eastern time. The direct dial toll free number for the call is 1-844-825-9784. For those unable to participate in the call, a replay will be available by dialing 1-877-344-7529 (access code 10148521) from one hour after the end of the conference call until January 28, 2021. Replay information will also be available on First Bank’s website at www.firstbanknj.com under the “About Us” tab. Click on “Investor Relations” to access the replay of the conference call.
About First Bank
First Bank is a New Jersey state-chartered bank with 18 full-service branches in Cinnaminson, Cranbury, Delanco, Denville, Ewing, Flemington, Hamilton, Hamilton Square, Lawrence, Mercerville, Pennington, Randolph, Somerset and Williamstown, New Jersey; and Doylestown, Trevose, Warminster and West Chester, Pennsylvania. With
Forward Looking Statements
This press release contains certain forward-looking statements, either express or implied, within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include information regarding First Bank’s future financial performance, business and growth strategy, projected plans and objectives, and related transactions, integration of acquired businesses, ability to recognize anticipated operational efficiencies, and other projections based on macroeconomic and industry trends, which are inherently unreliable due to the multiple factors that impact economic trends, and any such variations may be material. Such forward-looking statements are based on various facts and derived utilizing important assumptions, current expectations, estimates and projections about First Bank, any of which may change over time and some of which may be beyond First Bank’s control. Statements preceded by, followed by or that otherwise include the words “believes,” “expects,” “anticipates,” “intends,” “projects,” “estimates,” “plans” and similar expressions or future or conditional verbs such as “will,” “should,” “would,” “may” and “could” are generally forward-looking in nature and not historical facts, although not all forward-looking statements include the foregoing. Further, certain factors that could affect our future results and cause actual results to differ materially from those expressed in the forward-looking statements include, but are not limited to: whether First Bank can: successfully implement its growth strategy, including identifying acquisition targets and consummating suitable acquisitions; continue to sustain its internal growth rate; provide competitive products and services that appeal to its customers and target markets; difficult market conditions and unfavorable economic trends in the United States generally, and particularly in the market areas in which First Bank operates and in which its loans are concentrated, including the effects of declines in housing market values; the impact of disease pandemics, such as the novel strain of coronavirus disease (COVID-19), on First Bank, its operations and its customers and employees; an increase in unemployment levels and slowdowns in economic growth; First Bank's level of nonperforming assets and the costs associated with resolving any problem loans including litigation and other costs; changes in market interest rates may increase funding costs and reduce earning asset yields thus reducing margin; the impact of changes in interest rates and the credit quality and strength of underlying collateral and the effect of such changes on the market value of First Bank's investment securities portfolio; the extensive federal and state regulation, supervision and examination governing almost every aspect of First Bank's operations including changes in regulations affecting financial institutions, including the Dodd-Frank Wall Street Reform and Consumer Protection Act and the rules and regulations being issued in accordance with this statute and potential expenses associated with complying with such regulations; uncertainties in tax estimates and valuations, including due to changes in state and federal tax law; First Bank's ability to comply with applicable capital and liquidity requirements, including First Bank’s ability to generate liquidity internally or raise capital on favorable terms, including continued access to the debt and equity capital markets; possible changes in trade, monetary and fiscal policies, laws and regulations and other activities of governments, agencies, and similar organizations. For discussion of these and other risks that may cause actual results to differ from expectations, please refer to “Forward-Looking Statements” and “Risk Factors” in First Bank’s Annual Report on Form 10-K and any updates to those risk factors set forth in First Bank’s proxy statement, subsequent Quarterly Reports on Form 10-Q or Current Reports on Form 8-K. If one or more events related to these or other risks or uncertainties materialize, or if First Bank’s underlying assumptions prove to be incorrect, actual results may differ materially from what First Bank anticipates. Accordingly, you should not place undue reliance on any such forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made, and First Bank does not undertake any obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise. All forward-looking statements, expressed or implied, included in this communication are expressly qualified in their entirety by this cautionary statement. This cautionary statement should also be considered in connection with any subsequent written or oral forward-looking statements that First Bank or persons acting on First Bank’s behalf may issue.
1 Adjusted diluted earnings per share, adjusted return on average assets and adjusted return on average equity are non-U.S. GAAP financial measures and are calculated by dividing net income adjusted for certain merger-related expenses and other one-time gains or expenses by diluted weighted average shares, average assets and average equity, respectively. For a reconciliation of these non-U.S. GAAP financial measures, along with the other non-U.S. GAAP financial measures in this press release, to their comparable U.S. GAAP measures, see the financial reconciliations at the end of this press release.
2 The efficiency ratio is a non-U.S. GAAP financial measure and is calculated by dividing non-interest expense less merger-related expenses by adjusted total revenue (net interest income plus non-interest income). For a reconciliation of this non-U.S. GAAP financial measure, along with the other non-U.S. GAAP financial measures in this press release, to their comparable U.S. GAAP measures, see the financial reconciliations at the end of this press release.
3 Pre-provision net revenue is a non-U.S. GAAP financial measure and is calculated by adding net interest income and non-interest income and subtracting non-interest expense adjusted by certain non-recurring items. For a reconciliation of this non-U.S. GAAP financial measure, along with the other non-U.S. GAAP financial measures in this press release, to their comparable U.S. GAAP measures, see the financial reconciliations at the end of this press release.
4 Certain reclassifications, none of which are material, have been made to prior period information to conform to the current 2020 quarter presentation.
CONTACT: Patrick L. Ryan, President and CEO
(609) 643-0168, patrick.ryan@firstbanknj.com
| FIRST BANK AND SUBSIDIARIES | |||||||||
| CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION | |||||||||
| (in thousands, except for share data) | |||||||||
| September 30, 2020 | |||||||||
| (unaudited) | December 31, 2019 | ||||||||
| Assets | |||||||||
| Cash and due from banks | $ | 24,393 | $ | 16,751 | |||||
| Federal funds sold | - | 40,000 | |||||||
| Interest bearing deposits with banks | 60,007 | 25,041 | |||||||
| Cash and cash equivalents |
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FAQ
What were First Bank's (FRBA) Q3 2020 net income results?
First Bank reported a net income of $5.9 million for Q3 2020, a significant increase from $1.1 million in Q3 2019.
How much did First Bank (FRBA) increase its total loans by in Q3 2020?
Total loans increased by $260.8 million, or 15.0%, reaching $2.00 billion as of September 30, 2020.
What is the ratio of nonperforming loans at First Bank (FRBA)?
As of September 30, 2020, the ratio of nonperforming loans to total loans was 0.63%, down from 0.91% a year ago.
What cash dividend was declared by First Bank (FRBA) in October 2020?
First Bank declared a quarterly cash dividend of $0.03 per share, payable on November 20, 2020.
What was the total net revenue for First Bank (FRBA) in Q3 2020?
Total net revenue for Q3 2020 was $19.9 million, representing a 33.6% increase from the previous year.
First Bank
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Banks - Regional
Financial Services
United States of America
Hamilton
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