First Commerce Bank Earns $16.6 Million for the Year Ended December 31, 2022, and Declares a Quarterly Cash Dividend of $0.04 per Common Share

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LAKEWOOD, NJ / ACCESSWIRE / January 31, 2023 / First Commerce Bank (the “Bank”) (OTC PINK:CMRB) today reported net income of $16.6 million for the fiscal year ended December 31, 2022 as compared to $16.7 million for the fiscal year ended December 31, 2021. Basic earnings per common share for the fiscal year ended December 31, 2022 was $0.70, compared to $0.72 for the fiscal year ended December 31, 2021. The Board of Directors unanimously approved and declared a quarterly cash dividend of $0.04 per common share payable to shareholders on February 21, 2023 for shareholders of record as of February 6, 2023.

Regarding the performance of the Bank, President & CEO Donald Mindiak commented, “Strong balance sheet growth in the areas of loans receivable, net, and investment securities resulted in increases in both total interest income and net interest income. Total assets grew by $157.7 million or 13.9% with the asset growth occurring primarily as a result of growth in total loans receivable, net, of $191.0 million or 21.0% and investment security growth of $33.5 million or 72.4%. As a result of this asset growth, total interest income increased by $6.7 million or 14.6% and net interest income grew by $3.8 million or 8.9% year-over-year. In addition, asset quality metrics improved through the fourth quarter as non-accrual loan totals decreased by $5.0 million and, while the Bank continues to report $4.0 million in REO balances at year-end, executed contracts are in place for both properties that comprise this balance which should close shortly.”

He continued, “We are proud to have begun paying a cash dividend this past year, demonstrating the ability to provide a competitive return on investment to our shareholders. We have also received regulatory approval for our Holding Company Reorganization Application and look forward to shareholder approval and availing ourselves to the benefits that the Holding Company structure can provide. Lastly, while the Federal Reserve substantially increased interest rates last year, creating market challenges for financial institutions, coupled with the economic headwinds of persistent inflation, possible recession and credit quality concerns, your management team will continue to explore and execute initiatives that have the capacity to increase both franchise and shareholder value.”

Year-End Financial Highlights

  • Loans receivable, net increased by $191.0 million or 21.0% from year-end 2021 primarily as a result of growth in commercial and construction loans.
  • Investment security balances increased by $33.5 million or 72.4% from year-end 2021 as the Bank deployed excess liquidity into higher yielding interest earning assets.
  • Net interest income increased by $3.8 million or 8.9% from year-end 2021 as a result of the growth in loans receivable, net, and investment securities described above.
  • Net interest margin increased to 4.07% at year-end 2022 from 3.99% at year-end 2021.
  • Total deposits increased by $84.7 million or 9.0% with a category breakdown at December 31, 2022 of 19.7% in non-interest bearing deposits, 6.4% in savings deposits, 27.1% in interest-bearing demand deposits and 46.8% in time deposits.
  • Return on average equity was 9.28% at December 31, 2022 as compared to 9.66% at December 31, 2021.
  • Return on average assets was 1.38% at December 31, 2022 as compared to 1.50% at December 31, 2021.

Balance Sheet Review

Total assets increased by $157.7 million or 13.9% to $1.29 billion at December 31, 2022 from $1.13 billion at December 31, 2021. The increase in total assets was primarily attributable to increases in loans receivable, net and investment securities, partially offset by a decrease in cash and cash equivalents.

Total cash and cash equivalents decreased by $70.8 million or 62.4% to $42.6 million at December 31, 2022 from $113.3 million at December 31, 2021. This decrease was primarily due to the investment of excess liquidity into investment securities and loans receivable, net.

Loans receivable, net, increased by $191.0 million or 21.0% to $1.1 billion at December 31, 2022 from $909.3 million at December 31, 2021. Total loan increases for the fiscal year ended December 31, 2022 occurred primarily as a result of a $207.0 million increase in commercial mortgages and a $22.3 million increase in construction loans, partially offset by a $15.9 million decrease in SBA loans and a $17.3 million decrease in commercial loans. The allowance for loan losses increased by $48,000 to $17.8 million or 1.59% of gross loans at December 31, 2022 as compared to $17.7 million or 1.91% of gross loans at December 31, 2021.

Total investment securities increased by $33.5 million or 72.4% to $79.7 million at December 31, 2022 from $46.2 million at December 31, 2021. The increase in investment securities resulted primarily from investment security purchases totaling $54.1 million, partially offset by $17.0 million in mortgage-backed security paydowns and $2.3 million in municipal and agency bond maturities. In addition, the unrealized gain on the available-for-sale portfolio decreased by $1.34 million due to the prevailing interest rate environment and its impact on the market value of those debt securities. Because the Bank does not intend to sell the investments and it is not more than likely than not that the Bank will be required to sell the investments before recovery of their amortized cost basis, which may be at maturity, the Bank does not consider those investments to be other-than-temporarily impaired at December 31, 2022.

Deposit liabilities increased by $84.7 million or 9.0% to $1.03 billion at December 31, 2022 from $941.9 million at December 31, 2021. The increase in total deposits occurred primarily as a result of a $227.4 million increase in time deposits and a $3.3 million increase in NOW deposits, partially offset by decreases of $101.8 million, $25.8 million, $9.9 million and $8.5 million in savings, money market, non-interest bearing and interest checking deposits, respectively. As a result of the Federal Reserves’ efforts to reduce inflation through systematic short-term interest rate increases during 2022, internal disintermediation has occurred which has restructured the Bank’s deposit mix to be more heavily weighted in time deposits as opposed to core deposits. Through the second half of 2022, the Bank utilized wholesale borrowings from the Federal Home Loan Bank of New York to fund loan demand. Wholesale borrowings totaled $59.0 million at December 31, 2022 from no such balance at December 31, 2021.

Stockholders’ equity increased by $8.1 million or 4.7% to $180.4 million at December 31, 2022 from $172.3 million at December 31, 2021. The increase in stockholders’ equity was primarily attributable to net income of $16.6 million for the fiscal year ended December 31, 2022 and increases of $938,000 and $810,000 in common stock and additional paid in capital, respectively as a result of the exercise of certain stock options, partially offset by a decrease of $9.3 million in undivided profits related to the declaration and payment of cash dividends during the fiscal year and a decrease in accumulated other comprehensive income of $974,000 related to the mark-to-market valuation of the available-for-sale investment portfolio.

Annual Operational Review

Net interest income increased by $3.8 million or 8.9% to $46.4 million for the fiscal year ended December 31, 2022 from $42.6 million for the fiscal year ended December 31, 2021.

Total interest income increased by $6.8 million or 14.6% to $53.0 million for the fiscal year ended December 31, 2022 from $46.2 million for the fiscal year ended December 31, 2021. The increase in interest income resulted primarily from an increase in the average balance of loans receivable, net of $124.2 million or 14.2% to $998.0 million for the twelve months ended December 31, 2022 compared to $873.8 million for the twelve months ended December 31, 2021 and an increase in the average balance of investment securities of $23.2 million or 44.5% to $75.2 million for the twelve months ended December 31, 2022 from $52.0 million for the twelve months ended December 31, 2021. Partially offsetting the increase in interest income was a decrease in loan fees of $1.1 million or 36.1% to $1.9 million for the twelve months ended December 31, 2022 from $3.0 million for the twelve months ended December 31, 2021. The decrease in loan fees was primarily related to the reduction in fees recognized from the Paycheck Protection Program (PPP) of $1.3 million as the majority of the Bank’s PPP loans were forgiven and fees earned in 2021. The lower PPP fees were partially offset by higher prepayment penalties of $118,000 and other loan fees of $131,000 collected during the twelve months ended December 31, 2022 as compared to the twelve months ended December 31, 2021.

Total interest expense increased by $3.0 million or 81.2% to $6.6 million for the twelve months ended December 31, 2022 from $3.6 million for the twelve months ended December 31, 2021. The increase in interest expense occurred primarily as a result of an increase in the average balance of interest bearing deposit liabilities of $38.7 million or 5.3% to $766.4 million for the twelve months ended December 31, 2022 from $727.7 million for the twelve months ended December 31, 2021, and an increase in the average balance of interest bearing wholesale borrowings from the Federal Home Loan Bank of New York, of $15.2 million for the twelve months ended December 31, 2022 from no such borrowings for the twelve months ended December 31, 2021. The average cost of funds increased by twenty-seven basis points to 0.66% for the twelve months ended December 31, 2022 from 0.39% for the twelve months ended December 31, 2021. The increase in the average balance of interest-bearing liabilities occurred as a result of the Bank’s efforts to fund loan closings and grow the balance sheet.

Net interest margin increased by eight basis points to 4.07% for the twelve months ended December 31, 2022 compared to 3.99% for the twelve months ended December 31, 2021. The increase in the net interest margin is primarily attributable to an increase in the average balance of interest earning assets of $76.9 million or 7.2% to $1.15 billion for the twelve months ended December 31, 2022 compared to $1.07 billion for the twelve months ended December 31, 2021 and an increase of thirty basis points in the yield of average interest earning assets to 4.54% for the twelve months ended December 31, 2022 from 4.24% for the twelve months ended December 31, 2021.

Non-interest income increased by $505,000 or 53.9% to $1.4 million for the twelve months ended December 31, 2022 from $936,000 for the twelve months ended December 31, 2021. The increase in total non-interest income resulted primarily from an increase in Bank-Owned Life Insurance (“BOLI”) income of $551,000 or 479.1% to $666,000 for the twelve months ended December 31, 2022 from $115,000 in income for the twelve months ended December 31, 2021. The Bank made a $25.0 million BOLI purchase during the fourth quarter of 2021 which accounts for the higher amount of BOLI income for the twelve months ended December 31, 2022. The increase in non-interest income was partially offset by a decrease in service charges and fees of $54,000 or 7.0% to $718,000 for the twelve months ended December 31, 2022 from $772,000 for the twelve months ended December 31, 2021.

Non-interest expense increased by $4.6 million or 21.4% to $26.3 million for the twelve months ended December 31, 2022 compared to $21.7 million for the twelve months ended December 31, 2021. Salaries and employee benefits increased by $2.7 million or 19.9% to $16.0 million for the twelve months ended December 31, 2022 as compared to $13.4 million for the twelve months ended December 31, 2021. The increase in salaries and employee benefits resulted primarily from a 27% year-over-year increase in employee benefits costs as well increased salary expense. In an effort to both retain and attract qualified personnel, the Bank instituted an industry competitive bonus plan which was not in place in 2021. Occupancy and equipment expense increased by $228,000 or 7.2% to $3.4 million for the twelve months ended December 31, 2022 as compared to $3.2 million for the twelve months ended December 31, 2021. The increase in occupancy and equipment expense occurred primarily as a result of the renewal and increase in several service contracts. Other non-interest expense increased by $1.74 million or 33.8% to $6.89 million for the twelve months ended December 31, 2022 from $5.15 million for the twelve months ended December 31, 2021. Other non-interest expense consists primarily of marketing, professional fees, data processing, FDIC assessments and other expenses. The increase in other non-interest expense occurred primarily as a result of increases of $267,000, $668,000, $98,000, $173,000 and $138,000, respectively, in FDIC assessment, other loan expenses, marketing, professional fees and data processing, respectively. The increase in other loan expenses occurred primarily as a result of the increase in the allowance for unfunded commitments related to the strong loan demand which occurred through 2022. The increase in professional fees resulted primarily from an increase in legal expense associated with the Holding Company Reorganization application.

The income tax provision decreased by $468,000 or 8.1% to $5.3 million for the twelve months ended December 31, 2022 from $5.7 million for the twelve months ended December 31, 2021. The decrease in the income tax provision resulted primarily from a decrease in earnings before income taxes of $559,000 or 2.5% to $21.9 million for the twelve months ended December 31, 2022 from $22.4 million for the twelve months ended December 31, 2021 and a reduction in the effective tax rate to 24.1% for the twelve months ended December 31, 2022 from 25.6% for the twelve months ended December 31, 2021.

Asset Quality

The allowance for loan losses increased by $48,000 to $17.8 million or 1.59% of gross loans at December 31, 2022 as compared to $17.7 million or 1.91% of gross loans at December 31, 2021.

Changes in the allowance for loan and lease losses are calculated and adjusted quarterly and accordingly, relative to loan growth and quantitatively measured asset quality metrics. Total loans, gross, increased by $191.0 million or 21.0% to $1.12 billion at December 31, 2022 from $927.0 million at December 31, 2021. The Bank had non-accrual loans totaling $12.7 million or 1.14% of gross loans at December 31, 2022 as compared to $8.8 million or 0.94% of gross loans at December 31, 2021. Quarter-over-quarter, non-accrual loans decreased by $5.0 million or 28.2% to $12.7 million at December 31, 2022 from $17.7 million at September 30, 2022.

The allowance for loan losses was $17.8 million or 1.59% of gross loans at December 31, 2022 as compared to $17.7 million or 1.91% of gross loans at December 31, 2021. The allowance for loan losses was 139.6% of non-accrual loans at December 31, 2022 and 193.6% of non-accrual loans at December 31, 2021. Additionally, the Bank recorded recoveries of $584,000 in previously charged-off loans in 2022.

About First Commerce Bank

Established in 2006 and headquartered in Lakewood, New Jersey, the Bank has offices in Allentown, Bordentown, Closter, Englewood, Fairfield, Freehold, Lakewood, Montvale, Robbinsville and Teaneck, New Jersey. The Bank provides businesses and individuals a wide range of loans, deposit products and retail and commercial banking services. For more information, please go to www.firstcommercebk.com.

Forward-Looking Statements

This release, like many written and oral communications presented by First Commerce Bank, 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 Bank, 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 the COVID-19 pandemic on the Bank, its operations and its customers, changes in asset quality and credit risk; the inability to sustain revenue and earnings growth; changes in interest rates and capital markets; 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.

FIRST COMMERCE BANK
Consolidated Balance Sheets
(Unaudited)

December 31, 2022 vs.
December 31, 2021

(In thousands, except percentages)

December 31, 2022 December 31, 2021 Amount %

Assets

Cash and Cash Equivalents:

Cash on hand

$ 1,686 $ 1,736 $ (50 ) -2.9 %

Interest bearing deposits in other banks

40,899 111,602 (70,703 ) -63.4 %

Total cash and cash equivalents

42,585 113,338 (70,753 ) -62.4 %

Investment Securities HTM, at amortized cost

65,788 23,611 42,177 178.6 %

Investment Securities AFS, at fair value

13,902 22,617 (8,715 ) -38.5 %

Restricted stock

3,699 945 2,754 291.4 %

Loans Receivable, net of ALLL

1,100,300 909,312 190,988 21.0 %

Premises and equipment

15,725 16,385 (660 ) -4.0 %

Right-of-Use Asset

9,913 9,368 545 5.8 %

Bank Owned Life Insurance

25,781 25,115 666 2.7 %

Other Real Estate Owned

3,971 4,345 (374 ) -8.6 %

Deferred tax asset

4,437 3,805 632 16.6 %

Accrued interest receivable

4,638 443 205 4.6 %

Other assets

1,388 1,162 225 19.3 %

Total Assets

$ 1,292,127 $ 1,134,435 $ 157,690 13.9 %

Liabilities and Stockholders’ Equity

Liabilities

Deposits:

Non-interest bearing

$ 202,155 $ 212,016 $ (9,862 ) -4.7 %

Interest bearing

824,520 729,910 94,610 13.0 %

Total Deposits

1,026,675 941,926 84,748 9.0 %

Total Borrowings

59,000 59,000 0.0 %

Accrued Interest Payable

993 100 893 883.2 %

Lease Liability

10,453 9,791 662 6.8 %

Other liabilities

14,615 10,318 4,297 41.6 %

Total Liabilities

1,111,736 962,135 149,599 15.5 %

Commitments and Contingencies

Stockholders’ Equity

Preferred Stock

Common Stock

47,570 46,632 938 2.0 %

Additional paid-in capital

40,929 40,119 810 2.0 %

Retained earnings

92,201 84,884 7,317 8.6 %

Accumulated other comprehensive income

(309 ) 665 (974 ) -146.5 %

Total Stockholders’ Equity

180,391 172,300 8,091 4.7 %

Total Liabilities and Stockholders’ Equity

$ 1,292,127 $ 1,134,435 $ 157,690 13.9 %

FIRST COMMERCE BANK
Consolidated Income Statements
For the three months ended December 31, 2022 and 2021
(Unaudited)

Variance
(In thousands, except percentages and
per share amounts)
December 31, 2022 December 31, 2021 Amount %

Interest Income

Loans, including fees

$ 14,413 $ 11,219 $ 3,194 28.5 %

Investment securities – HTM

475 172 303 176.2 %

Investment securities – AFS

106 160 (54 ) -33.8 %

Interest-bearing deposits

295 69 226 328.1 %

Total Interest Income

15,289 11,620 3,669 31.6 %

Interest Expense

Deposits

2,975 764 2,211 289.4 %

Other borrowings

545 545 0.0 %

Total Interest Expense

3,520 764 2,756 360.7 %

Net Interest Income

11,769 10,856 913 8.4 %

(Credit)/Provision for Loan Losses

(114 ) 150 (264 ) -176.0 %

Net Interest Income after ALLL

11,883 10,706 1,177 11.0 %

Non-Interest Income

Service charges and fees

231 207 24 11.6 %

BOLI income

172 115 57 0.0 %

Other income

8 15 (7 ) 46.7 %

Total Non-Interest Income

411 337 74 22.0 %

Non-Interest Expenses

Salaries and employee benefits

4,023 3,877 146 3.8 %

Occupancy & equip. expense

784 657 127 19.3 %

Marketing

61 19 42 221.1 %

Professional fees

492 374 118 31.6 %

Data processing

335 181 154 85.1 %

FDIC assessment

49 69 (20 ) -29.0 %

Loss/(gain) on valuation of OREO

230 (3 ) 233 -7766.7 %

Other expenses

1,182 435 747 171.7 %

Total Non-Interest Expense

7,156 5,609 1,547 27.6 %

Income before income tax provision

5,138 5,434 (296 ) -5.4 %

Income tax expense

1,127 1,380 (253 ) -18.3 %

Net Income

$ 4,011 $ 4,054 $ (43 ) -1.1 %

Basic earnings per share

$ 0.17 $ 0.17 $ (0.00 ) 0.0 %

Average shares outstanding

23,785,490 23,303,631 481,859 2.1 %

Fully diluted earnings per share

$ 0.17 $ 0.17 $ (0.00 ) 0.0 %

Diluted shares outstanding

24,175,545 23,595,981 579,564 2.5 %

FIRST COMMERCE BANK
Consolidated Income Statements
For the years ended December 31, 2022 and 2021
(Unaudited)

Variance

(In thousands, except percentages
and per share amounts)

December 31, 2022 December 31, 2021 Amount %

Interest Income

Loans, including fees

$ 50,089 $ 44,443 $ 5,646 12.7 %

Investment securities – HTM

1,586 812 774 95.3 %

Investment securities – AFS

573 743 (170 ) -22.9 %

Interest-bearing deposits

719 220 499 226.8 %

Total Interest Income

52,967 46,218 6,749 14.6 %

Interest Expense

Deposits

5,969 3,643 2,326 63.8 %

Other borrowings

630 630 0.0 %

Total Interest Expense

6,599 3,643 2,956 81.1 %

Net Interest Income

46,368 42,575 3,793 8.9 %

(Credit)/Provision for Loan Losses

(358 ) (586 ) 228 -38.9 %

Net Interest Income after ALLL

46,726 43,161 3,565 8.3 %

Non-Interest Income

Service charges and fees

718 772 (54 ) -7.0 %

BOLI income

666 115 551 479.1 %

Other income

57 49 8 15.4 %

Total Non-Interest Income

1,441 936 505 53.9 %

Non-Interest Expenses

Salaries and employee benefits

16,020 13,359 2,661 19.9 %

Occupancy & equip. expense

3,391 3,163 228 7.2 %

Marketing

212 114 98 86.0 %

Professional fees

1,651 1,478 173 11.7 %

Data processing

869 731 138 18.9 %

FDIC assessment

531 264 267 101.1 %

Loss on valuation of OREO

165 114 51 -44.9 %

Other expenses

3,459 2,447 1,012 41.4 %

Total Non-Interest Expense

26,298 21,670 4,628 21.4 %

Income before income tax provision

21,869 22,427 (558 ) -2.5 %

Income tax expense

5,275 5,742 (467 ) -8.1 %

Net Income

$ 16,594 $ 16,685 $ (91 ) -0.5 %

Basic earnings per share

$ 0.70 $ 0.72 $ (0.02 ) -2.8 %

Basic avg shares outstanding

23,596,635 23,098,390 498,245 2.2 %

Fully diluted earnings per share

$ 0.69 $ 0.71 $ (0.02 ) -2.8 %

Fully diluted avg shares outstanding

23,986,690 23,595,981 390,709 1.7 %

First Commerce Bank
Financial Highlights & Ratios
As of December 31, 2022 and 2021
(Unaudited)

QTD QTD YTD YTD

Financial & Operating Ratios

12/31/2022 12/31/2021 12/31/2022 12/31/2021

Yields

Commercial Mortgages

4.71 % 4.93 % 4.64 % 4.92 %

Construction Loans

7.86 % 4.76 % 6.30 % 5.10 %

Commercial Loans

7.52 % 4.81 % 6.06 % 5.14 %

Consumer

3.45 % 3.27 % 3.77 % 3.51 %

Residential Mortgages

5.41 % 4.25 % 4.88 % 4.87 %

Home Equity

5.94 % 3.67 % 4.54 % 3.67 %

SBA Loans

6.66 % 6.29 % 6.52 % 5.15 %

Total Yield on Loans

5.16 % 4.96 % 4.91 % 4.94 %

DFB Interest Bearing

3.37 % 0.17 % 1.01 % 0.16 %

Securities

2.85 % 2.82 % 2.90 % 2.90 %

Total Yield on Interest Earning Assets

4.95 % 4.17 % 4.54 % 4.24 %

Cost of Funds

Non-interest Bearing

0.00 % 0.00 % 0.00 % 0.00 %

Interest Bearing

0.52 % 0.35 % 0.41 % 0.37 %

Money Market

1.36 % 0.35 % 0.75 % 0.38 %

Savings

0.32 % 0.34 % 0.34 % 0.38 %

Time Deposits

2.02 % 0.52 % 1.14 % 0.67 %

IRA’s

1.48 % 0.57 % 0.84 % 0.76 %

Brokered CD’s

0.00 % 0.00 % 0.00 % 0.00 %

Borrowed Funds

4.43 % 0.00 % 4.15 % 0.36 %

Total Cost of Funds

1.32 % 0.32 % 0.66 % 0.39 %

Equity & Returns

Common Stock (In Thousands)

23,785 23,316 23,785 23,316

Book Value Per Share

$ 7.60 $ 7.36 $ 7.60 $ 7.36

Market Value Per Share

$ 6.75 $ 5.90 $ 6.75 $ 5.90

Basic Earnings Per Share

$ 0.17 $ 0.17 $ 0.70 $ 0.72

Return on Avg Assets

1.27 % 1.41 % 1.38 % 1.50 %

Return on Avg Equity

8.93 % 9.34 % 9.28 % 9.66 %

Tangible Equity/Tangible Assets

13.98 % 15.13 % 13.98 % 15.13 %

Risk Based Capital Ratios

Tier 1 Leverage Capital Ratio

14.33 % 15.11 % 14.33 % 15.11 %

Common Equity Tier 1 Risk-Based Capital

14.97 % 18.13 % 14.97 % 18.13 %

Tier 1 Risk-Based Capital Ratio

14.97 % 18.13 % 14.97 % 18.13 %

Total Risk-Based Capital Ratio

16.23 % 19.39 % 16.23 % 19.39 %

Capital Conservation Buffer

8.23 % 11.39 % 8.23 % 11.39 %

Tier 1 Capital (In Thousands)

180,688 171,573 180,688 171,573

Tier 2 Capital (In Thousands)

195,834 183,497 195,834 183,497

Other Ratios

ALLL/Gross Loans

1.59 % 1.91 % 1.59 % 1.91 %

Total Investments/Total Assets

6.17 % 4.08 % 6.17 % 4.08 %

Net Loans/Total Assets

85.15 % 80.19 % 85.15 % 80.19 %

Net Loans/Total Deposits

107.17 % 90.40 % 107.17 % 96.54 %

Net Interest Margin

3.93 % 4.01 % 4.07 % 3.99 %

Interest Spread

3.63 % 3.85 % 3.88 % 3.85 %

Efficiency Ratio

57.95 % 50.13 % 54.85 % 49.67 %

Legal Lending Limit

29,375 27,525 29,375 27,525

First Commerce Bank
Selected Quarterly Financial Data
(Unaudited)

As of and for the quarters ended

(In thousands, except per share data)

12/31/2022 9/30/2022 6/30/2022 3/31/2022 12/31/2021 9/30/2021 6/30/2021 3/31/2021

Summary earnings:

Interest income

$ 15,289 $ 13,941 $ 12,032 $ 11,705 $ 11,620 $ 11,990 $ 11,399 $ 11,208

Interest expense

3,520 1,599 768 713 764 844 943 1,092

Net interest income

11,769 12,342 11,264 10,992 10,856 11,146 10,456 10,117

Provision (credit) for loan losses

(114 ) (685 ) 1,216 (775 ) 150 (136 ) (600 )

Net interest income after provision (credit) for loan losses

11,883 13,027 10,048 11,767 10,706 11,282 11,056 10,117

Non-interest income

411 406 326 363 337 180 101 203

Non-interest expense

7,156 6,273 6,418 6,517 5,609 6,083 5,321 4,541

Income before income tax expense

5,138 7,160 3,956 5,613 5,434 5,379 5,836 5,778

Income tax expense

1,127 1,712 1,018 1,417 1,380 1,405 1,425 1,532

Net income

$ 4,011 $ 5,448 $ 2,939 $ 4,196 $ 4,054 $ 3,974 $ 4,411 $ 4,246

Per share data:

Earnings per share – basic

$ 0.17 $ 0.23 $ 0.13 $ 0.18 $ 0.17 $ 0.17 $ 0.19 $ 0.19

Earnings per share – diluted

0.17 0.23 0.12 0.18 0.17 0.17 0.19 0.18

Cash dividends declared

0.04 0.35

Book value at period end

7.60 7.45 7.61 7.55 7.36 7.23 7.07 6.93

Shares outstanding at period end

23,785 23,785 23,673 23,316 23,316 23,279 23,196 22,899

Basic weighted average shares outstanding

23,785 23,743 23,535 23,316 23,304 23,196 22,899 22,801

Fully diluted weighted average shares outstanding

24,176 24,124 23,970 23,773 23,596 23,198 23,014 22,871

Balance sheet data (at period end):

Total assets

$ 1,292,127 $ 1,249,389 $ 1,176,733 $ 1,158,783 $ 1,134,437 $ 1,117,982 $ 1,095,095 $ 1,103,039

Securities, available for sale

13,902 14,371 16,327 17,793 22,617 24,593 27,452 28,957

Securities, held to maturity

65,788 69,736 70,268 54,289 23,611 22,609 25,190 27,835

Total loans

1,118,081 1,082,210 1,005,640 934,193 926,876 878,380 902,781 900,368

Allowance for loan losses

(17,781 ) (17,652 ) (18,245 ) (17,009 ) (17,733 ) (17,577 ) (17,668 ) (17,867 )

Total deposits

1,026,675 1,010,137 974,342 962,313 941,927 931,150 913,757 926,321

Shareholders’ equity

180,390 177,246 180,171 175,965 172,300 168,274 164,061 158,732

Common cash dividends

951 8,325

Selected performance ratios:

Return on average total assets

1.27 % 1.77 % 1.00 % 1.48 % 1.41 % 1.44 % 1.63 % 1.61 %

Return on average shareholders’ equity

8.93 % 11.92 % 6.57 % 9.73 % 9.34 % 9.42 % 10.90 % 11.02 %

Dividend payout ratio (1)

5.98 % 38.52 % 0.00 % 0.00 % 0.00 % 0.00 % 0.00 % 0.00 %

Net interest margin

3.93 % 4.28 % 4.06 % 4.04 % 4.01 % 4.11 % 3.92 % 3.93 %

Non-interest income to average assets

0.13 % 0.13 % 0.11 % 0.13 % 0.12 % 0.07 % 0.04 % 0.08 %

Non-interest expenses to average assets

2.25 % 2.04 % 2.19 % 2.30 % 1.96 % 2.20 % 1.97 % 1.73 %

Asset quality ratios:

Non-performing loans to total loans

1.14 % 1.61 % 1.35 % 1.31 % 0.99 % 0.90 % 0.99 % 1.00 %

Non-performing assets to total assets

1.29 % 1.71 % 1.52 % 1.43 % 1.19 % 1.08 % 1.20 % 1.31 %

Allowance for loan losses to non-performing loans

139.63 % 101.25 % 134.23 % 139.42 % 193.59 % 223.54 % 197.10 % 198.72 %

Allowance for loan losses to total loans

1.59 % 1.63 % 1.81 % 1.82 % 1.91 % 2.00 % 1.96 % 1.98 %

Net recoveries (charge-offs) to average loans

-0.15 % 0.00 % 0.00 % 0.01 % 0.00 % 0.01 % 0.04 % 0.00 %

Liquidity and capital ratios:

Average loans to average deposits

108.36 % 104.43 % 99.02 % 96.80 % 93.69 % 95.51 % 97.60 % 97.42 %

Total shareholders’ equity to total assets

13.96 % 14.19 % 15.31 % 15.19 % 15.19 % 15.05 % 14.98 % 14.39 %

Total capital to risk-weighted assets

16.23 % 16.44 % 17.78 % 18.84 % 19.39 % 20.26 % 19.99 % 19.73 %

Tier 1 capital to risk-weighted assets

14.97 % 15.19 % 16.52 % 17.58 % 18.13 % 19.00 % 18.73 % 18.47 %

Common equity tier 1 capital ratio to risk-weighted assets

14.97 % 15.19 % 16.52 % 17.58 % 18.13 % 19.00 % 18.73 % 18.47 %

Tier 1 leverage ratio

14.33 % 14.56 % 15.36 % 15.29 % 15.11 % 14.98 % 14.79 % 14.68 %

(1) Dividend payout ratio calculated by dividing dividends declared during the year by net income.

SOURCE: First Commerce Bank

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