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
*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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