EXTON, PA — First Resource Bancorp, Inc. (OTCQX: FRSB), holding company for First Resource Bank, reported robust financial results for the second quarter of 2024, driven by significant growth in loans and deposits.
Financial Highlights
Net income for the quarter was $1.3 million, slightly surpassing the previous quarter’s earnings. Total interest income surged by 27% year-over-year, reaching $9.0 million. The net interest margin expanded to 3.43% from 3.35% in the first quarter.
Lauren C. Ranalli, President and CEO, remarked, “Our strategy of consistent balance sheet expansion delivered strong results in the second quarter. Loan growth surpassed our original expectations as our markets continue to thrive and competitors scale back on lending. Deposit growth is keeping pace with funding needs, and we continue to win new customers with our free banking services and award-winning customer service.”
In detail, total loans grew by 4% during the quarter, translating to an annualized growth of 17%. Deposits also saw a 5% increase, or 18% annualized growth. Swap loan referral income totaled $62,000 for the quarter, accumulating $245,000 year-to-date, more than triple the prior year’s total. Notably, there were no loans past due greater than 30 days, non-accrual loans, or non-performing assets as of June 30, 2024.
Performance Metrics
The bank achieved a book value per share growth of 3%, reaching $15.78. It was also named a “Best Places to Work” by the Philadelphia Business Journal and recognized as the Best Commercial Bank and Best Community Bank by the Main Line Times readers. Additionally, American Banker listed the bank among the top 100 performing community banks in the U.S. with under $2 billion in assets.
Total interest income for the second quarter of 2024 was $9.0 million, an 8% increase from the first quarter. This was primarily due to a 4% growth in loans. On an annual basis, total interest income increased by $1.9 million, or 27%, from the second quarter of 2023. This rise was driven by a 14% expansion in loans and a favorable interest rate environment.
Interest expenses also rose. For the second quarter, total interest expense increased by 8% compared to the previous quarter and by 66% year-over-year. This was due to higher costs for money market and time deposit accounts and increased FHLB borrowings.
Net Interest Income and Margin
Net interest income for the second quarter grew by $321,000, or 7%, compared to the first quarter. The net interest margin improved by 8 basis points to 3.43%. The yield on interest-earning assets rose by 18 basis points, while the cost of interest-bearing deposits increased by 10 basis points.
For the first half of 2024, net interest income was $9.6 million, a 7% increase from the same period in 2023. This growth was offset by a $3.2 million rise in deposit interest expenses.
Credit Quality and Non-Interest Income
The provision for credit losses in the second quarter was $246,000, up from $64,000 in the first quarter. Year-over-year, the provision increased by $226,000. Despite a specific charge-off for one loan relationship, the bank reported no non-performing assets as of June 30, 2024.
Non-interest income for the second quarter was $291,000, compared to $396,000 in the previous quarter. Year-over-year, non-interest income increased to $687,000 for the first half of 2024 from $413,000 in the same period last year.
Non-Interest Expenses
Non-interest expenses increased by 1% in the second quarter compared to the prior quarter. The bank cited additional office space requirements due to its growth trajectory as a contributing factor. For the first half of 2024, non-interest expenses were $6.7 million, up from $6.0 million in the previous year.
Deposits and Loans
Deposits grew by $23.4 million, or 5%, from March 31, 2024, to June 30, 2024. Non-interest-bearing deposits increased by 9% to $104.7 million. The total loan portfolio expanded by $23.6 million, or 4%, to $573.6 million during the same period.
Investment Securities and Equity
Investment securities totaled $17.0 million as of June 30, 2024. The held-to-maturity investment portfolio had an unrealized loss of $1.1 million. Total stockholders’ equity increased by 3% to $48.9 million, primarily driven by net income.
First Resource Bancorp’s strategic focus on balance sheet expansion and customer service continues to yield positive results, positioning the bank for sustained growth in the competitive financial landscape.
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