First Commerce Bancorp, Inc., Reports Third Quarter and Year-to-Date 2023 Results and Declares a Quarterly Cash Dividend of $0.04 per share

LAKEWOOD, NJ / ACCESSWIRE / October 27, 2023 / First Commerce Bancorp, Inc., (OTC PINK:CMRB), (the "Company"), today reported net income of $1.7 million and $7.9 million, respectively, for the three and nine months ended September 30, 2023, as compared to $5.4 million and $12.6 million, respectively, for the three and nine months ended September 30, 2022. Basic earnings per common share for the three and nine months ended September 30, 2023, were $0.07 and $0.33 respectively, compared to $0.23 and $0.54 for the three and nine months ended September 30, 2022.

The Company's Board of Directors declared a quarterly cash dividend of $0.04 per common share payable on November 20, 2023 to shareholders of record on November 10, 2023.

Donald Mindiak, President & Chief Executive Officer, commented, "We are pleased by the steady loan growth demonstrated year to date despite unfavorable market conditions. While higher interest rates and shift in funding mix have adversely impacted our net interest margin, our interest rate risk management remains both diligent and prudent. Our retail deposit balances have remained stable while consumers shift balances into higher yielding deposit products. The provision for credit losses increased primarily due to changes in our CECL projections which also impacted the quarterly results, however, nonperforming assets improved year over year. Our management team continues to monitor the on-balance sheet liquidity as well as prudent expense management. Lastly, our stock repurchase plan, which started in August 2023, has produced encouraging results."

Financial Highlights

  • Net interest margin decreased by 145 basis points to 2.73% for the third quarter of 2023 as compared to 4.18% for the third quarter of 2022 and decreased by 101 basis points to 3.07% year-to-date for 2023 as compared to 4.08% year-to-date for 2022.
  • Total yield on interest earning assets increased by 66 basis points to 5.38% for the third quarter of 2023 as compared to 4.72% for the third quarter of 2022 and increased by 88 basis points to 5.32% year-to-date for 2023 as compared to 4.44% year-to-date for 2022.
  • Total cost of interest-bearing liabilities increased by 271 basis points to 3.51% for the third quarter of 2023 compared to 0.80% for the third quarter of 2022 and increased by 251 basis points to 3.05% year-to-date for 2023 as compared to 0.54% year-to-date for 2022.
  • The year-to-date efficiency ratio was 64.53% at September 30, 2023 as compared to 53.73% at September 30, 2022.
  • Total loans receivable, net of allowance for credit losses, increased by $144.1 million or 13.1% to $1.24 billion at September 30, 2023, as compared to $1.1 billion at December 31, 2022.
  • The net loan to deposit ratio increased to 110.92% at September 30, 2023, from 104.36% at September 30, 2022.
  • The annualized return on average total assets was 0.47% at September 30, 2023 compared to 1.77% at September 30, 2022.
  • The annualized return on average shareholders' equity was 3.63% at September 30, 2023 compared to 11.92% at September 30, 2022.
  • The tangible book value per common share was $7.80 at September 30, 2023 compared to $7.45 at September 30, 2022.

Balance Sheet Review

Total assets increased by $136.8 million or 10.6% to $1.43 billion at September 30, 2023 from $1.29 billion at December 31, 2022. The increase in total assets was primarily related to increase in total loans, partially offset by decreases in total investment securities and other real estate owned ("OREO").

Total cash and cash equivalents increased by $948,000 or 2.2% to $43.5 million at September 30, 2023 from $42.6 million at December 31, 2022. This increase was primarily due to an increase in in total deposits.

Total loans receivable, net of allowance for credit losses, increased by $144.1 million or 13.1% to $1.24 billion at September 30, 2023 from $1.10 billion at December 31, 2022. This increase occurred primarily as a result of a $129.3 million increase in commercial mortgages, a $25.6 million increase in construction loans and a $818,000 increase in Small Business Administration loans, partially offset by an $8.6 million decrease in commercial loans and a $717,000 decrease in home equity loans. The allowance for credit losses increased by $1.8 million or 10.0% to $19.6 million or 1.55% of gross loans at September 30, 2023 as compared to $17.8 million or 1.59% of gross loans at December 31, 2022.

Total investment securities decreased by $7.8 million or 9.7% to $71.9 million at September 30, 2023 from $79.7 million at December 31, 2022. The decrease in investment securities resulted primarily from $8.1 million in total amortization of investment securities and a $4.1 million in maturities, partially offset by $4.5 million in purchases.

Total deposits increased by $85.5 million or 8.3% to $1.12 billion at September 30, 2023 from $1.03 billion at December 31, 2022. The increase in total deposits occurred primarily as a result of a $99.4 million increase in time deposits, an $84.3 million increase in brokered time deposits and a $6.2 million increase in interest checking deposits, partially offset by decreases of $31.7 million in noninterest-bearing demand deposits, $31.2 million in savings deposits, $26.3 million in money market deposits and $15.2 million in NOW deposits.

Shareholders' equity increased by $5.1 million or 2.8% to $185.5 million at September 30, 2023 from $180.4 million at December 31, 2022. The increase in shareholders' equity was primarily attributable to increase in retained earnings of $5.2 million and an increase of $62,000 in additional paid in capital as a result of the exercise of certain stock options, partially offset by $74,000 in share repurchase and an increase of $84,000 in accumulated other comprehensive loss. During the third quarter of 2023, the Company repurchased 11,912 shares for approximately $74,000, or a weighted average price of $6.21 per share.

Three Months of Operations

Net interest income decreased by $2.8 million or 23.1% to $9.5 million for the three months ended September 30, 2023 from $12.3 million for the three months ended September 30, 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 $4.8 million or 34.2% to $18.7 million for the three months ended September 30, 2023 from $13.9 million for the three months ended September 30, 2022. Interest income on loans, including fees, increased $4.2 million or 32.0% to $17.3 million for the three months ended September 30, 2023 compared to $13.1 million for the three months September 30, 2022. The increase in interest income from loans, including fees, resulted primarily from an increase in the average balance of loans receivable of $199.5 million or 19.1% to $1.25 billion for the three months ended September 30, 2023 compared to $1.05 billion for the three months ended September 30, 2022 and an increase of fifty-four basis points in the average yield on loans to 5.52% for the three months ended September 30, 2023 compared to 4.98% for the same period in the prior year. Interest income on interest-bearing deposits with banks increased $495,000 or 272.0% to $677,000 for the three months ended September 30, 2023 as compared to $182,000 for the same period in the prior year. This increase resulted from a significantly higher average yield on interest-bearing deposits with banks of 4.90% for the three months ended September 30, 2023 compared to 1.88% for the same period in the prior year, and an increase of $16.3 million in average balances of interest-bearing deposits with banks year over year.

Total interest expense increased by $7.6 million or 476.4% to $9.2 million for the three months ended September 30, 2023 from $1.6 million for the three months ended September 30, 2022. The increase in interest expense occurred primarily as a result of a 271 basis points increase in the average cost of interest-bearing liabilities to 3.51% for the three months ended September 30, 2023 from 0.80% for the three months ended September 30, 2022 and an increase in average balance of interest-bearing liabilities of $249.4 million or 31.5%, to $1.04 billion for the three months ended September 30, 2023 from $791.7 million for the three months ended September 30, 2022. The increase in average balance of interest-bearing liabilities included a $152.7 million increase in average interest-bearing deposit liabilities and a $96.7 million increase in average wholesale borrowings for the three months ended September 30, 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.

Net interest margin decreased by 145 basis points to 2.73% for the three months ended September 30, 2023 compared to 4.18% for the three months ended September 30, 2022. The decrease in the net interest margin is primarily attributable to a significant increase in the average cost of interest-bearing liabilities to 3.51% for the three months ended September 30, 2023 from 0.80% for the three months ended September 30, 2022 and an increase in the average balance of interest-bearing liabilities to $1.04 billion for the three months ended September 30, 2023 from $791.7 million for the three months ended September 30, 2022. These increases were partially offset by an increase in average balance of interest earning assets to $1.38 billion for the three months ended September 30, 2023 compared to $1.17 billion for the three months ended September 30, 2022 and an increase in the average yield of interest earning assets to 5.38% for the three months ended September 30, 2023 from 4.72% for the three months ended September 30, 2022.

Non-interest income increased by $34,000 or 9.9% to $378,000 for the three months ended September 30, 2023 from $344,000 for the three months ended September 30, 2022. The increase in total non-interest income resulted primarily from an increase in service charges and fees of $20,000 or 11.9% to $188,000 for the three months ended September 30, 2023 from $168,000 for the three months ended September 30, 2022. All other variances within non-interest income were not material.

Non-interest expense increased by $828,000 or 13.3% to $7.0 million for the three months ended September 30, 2023 compared to $6.2 million for the three months ended September 30, 2022. Salaries and employee benefits increased by $423,000 or 10.7% to $4.37 million for the three months ended September 30, 2023 as compared to $3.94 million for the three months ended September 30, 2022. The increase in salaries and employee benefits resulted primarily due to additions to staff and separation cost. Advertising and marketing expense increased by $39,000 or 68.4% to $96,000 for the three months ended September 30, 2023 from $57,000 for the three months ended September 30, 2022. Marketing expense increased as a result of the Bank utilizing resources to build our brand and attract retail deposits. Professional fees increased by $234,000 or 65.7% to $590,000 for the three months ended September 30, 2023 from $356,000 for the three months ended September 30, 2022 as a result of increased fees related to the formation of the bank holding company and the initiative to up list to the Nasdaq Capital Market exchange. Data processing costs increased by $41,000 or 23.2% to $218,000 for the three months ended September 30, 2023 from $177,000 for the three months ended September 30, 2022. The Bank had no gain/loss on other real estate owned in the third quarter of 2023 compared to a $63,000 gain on other real estate owned in the third quarter of 2022. All other variances within the other components of non-interest expenses were not material.

The income tax provision decreased by $1.2 million or 68.7% to $536,000 for the three months ended September 30, 2023 from $1.7 million for the three months ended September 30, 2022. The decrease in the income tax provision resulted primarily from a significant decrease in the pre-tax income year over year.

Nine Months of Operations

Net interest income decreased by $4.0 million or 11.5% to $30.6 million for the nine months ended September 30, 2023 from $34.6 million for the nine months ended September 30, 2022.

Total interest income increased by $15.4 million or 41.0% to $53.1 million for the nine months ended September 30, 2023 from $37.7 million for the nine months ended September 30, 2022. Interest income on loans, including fees, increased $13.9 million or 38.9% year over year resulting primarily from an increase in the average balance of loans receivable of $225.7 million or 23.1% to $1.2 billion for the nine months ended September 30, 2023 compared to $978.4 million for the nine months ended September 30, 2022 and an increase of sixty-two basis points in the average yield on loans to 5.50% for the nine months ended September 30, 2023 from 4.88% for the nine months ended September 30, 2022. Fee income from loans decreased $697,000 for the nine months ended September 30, 2023 primarily due to declines in both prepayment penalty fees and Paycheck Protection Program fees of $446,000 and $495,000, respectively, partially offset by a net increase of $182,000 in commercial loan fees compared to the same period in the prior year.

Interest income on interest-bearing deposits with banks increased $1.3 million or 325.4% to $1.7 million for the nine months ended September 30, 2023 compared to $389,000 for the same period in the prior year. This increase resulted from a significantly higher average yield on interest-bearing deposits with banks of 4.50% for the nine months ended September 30, 2023 compared to 0.62% for the same period in the prior year, despite a decline of $34.1 million in average balances of interest-bearing deposits with banks year over year. Dividend income on Federal Home Loan Bank stock increased $261,000, or 767.6% to $295,000 for the nine months ended September 30, 2023 compared to $34,000 for the same period in the prior year. This increase was a result of an increase in dividend yield to 6.64% for the nine months ended September 30, 2023 compared to 3.82% for the same period in the prior year coupled with an increase in average balance of $4.7 million to $5.9 million compared to $1.2 million year over year. Interest income on investment securities increased $38,000 or 2.4% as a result of increase in average balance of investment securities of $5.0 million or 7.0% to $75.8 million for the nine months ended September 30, 2023 from $70.8 million for the nine months ended September 30, 2022. The average yield on investment securities declined ten basis points to 2.84% for the nine months ended September 30, 2023 compared to 2.94% for the same period in the prior year.

Total interest expense increased by $19.4 million or 630.7% to $22.5 million for the nine months ended September 30, 2023 from $3.1 million for the nine months ended September 30, 2022. The increase in interest expense occurred primarily as a result of an increase in the average cost of interest-bearing liabilities of 251 basis points to 3.05% for the nine months ended September 30, 2023 from 0.54% for the nine months ended September 30, 2022, coupled with an increase in average balance of interest-bearing liabilities of $224.7 million or 29.5% to $985.5 million for the nine months ended September 30, 2023 from $760.7 million for the nine months ended September 30, 2022. The average balance of interest-bearing liabilities included a $124.1 million increase in average interest-bearing deposit liabilities and a $100.6 million increase in average wholesale borrowings for the nine months ended September 30, 2023. The increase in the average cost of interest-bearing liabilities resulted primarily from a significant increase in market interest rates over the past two years as the Federal Reserve Bank has embarked on their strategy of reducing forty years high inflation rates by systematically tightening short-term interest rates.

Net interest margin decreased by 101 basis points to 3.07% for the nine months ended September 30, 2023 compared to 4.08% for the nine months ended September 30, 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 $570,000 or 55.3% to $1.6 million for the nine months ended September 30, 2023 from $1.0 million for the nine months ended September 30, 2022. The increase in total non-interest income resulted primarily from an increase in Bank owned life insurance ("BOLI") income of $530,000 or 107.3% to $1.0 million for the nine months ended September 30, 2023 from $494,000 for the nine months ended September 30, 2022. The increase in BOLI income resulted from a one-time benefit received on the Bank's investment in BOLI.

Non-interest expense increased by $1.6 million or 8.6% to $20.8 million for the nine months ended September 30, 2023 compared to $19.1 million for the nine months ended September 30, 2022. Salaries and employee benefits increased by $976,000 or 8.1% to $13.0 million for the nine months ended September 30, 2023 compared to $12.0 million for the nine months ended September 30, 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 $60,000 or 2.3% to $2.7 million for the nine months ended September 30, 2023 compared to $2.6 million for the nine months ended September 30, 2022. Marketing expense increased by $135,000 or 89.4% to $286,000 for the nine months ended September 30, 2023 from $151,000 for the nine months ended September 30, 2022. Marketing expense increased as a result of the Bank utilizing resources to build our brand and attract retail deposits. Professional fees increased by $486,000 or 42.0% to $1.6 million for the nine months ended September 30, 2023 from $1.1 million for the nine months ended September 30, 2022 as a result of increased fees related to the bank holding company reorganization application and the initiative to up list to the Nasdaq Capital Market exchange. Data processing costs increased by $120,000 or 22.4% to $655,000 for the nine months ended September 30, 2023 from $535,000 for the nine months ended September 30, 2022. FDIC assessment decreased by $53,000 or 11.0% to $429,000 for the nine months ended September 30, 2023 from $482,000 for the nine months ended September 30, 2022 primarily due to a lower deposit insurance assessment rate in effect during the first nine months of 2023 compared to the first nine months of 2022. Other expenses decreased by $204,000 or 9.0% to $2.1 million for the nine months ended September 30, 2023 from $2.3 million for the nine months ended September 30, 2022. Other expenses are primarily comprised of miscellaneous loan expense, telephone, subscriptions, software maintenance and depreciation, office supplies and computer supplies. These decreases were partially offset by a $59,000 loss recorded on the sale of OREO for the nine months ended September 30, 2023 compared to a gain on sale of OREO of $65,000 for the nine months ended September 30, 2022.

The income tax provision decreased by $1.6 million or 39.5% to $2.5 million for the nine months ended September 30, 2023 from $4.1 million for the nine months ended September 30, 2022. The decrease in the income tax provision resulted primarily from a decrease in earnings before income taxes of $6.3 million or 37.5%, which included additional non-taxable income of $510,000 for the one-time benefit from BOLI investment, to $10.5 million for the nine months ended September 30, 2023 from $16.7 million for the nine months ended September 30, 2022. The effective tax rate for the nine months ended September 30, 2023 was 24.0% as compared to 24.8% for the nine months ended September 30, 2022.

Asset Quality

The allowance for credit losses increased by $1.8 million and $1.9 million respectively from December 31, 2022 and September 30, 2022, to $19.6 million or 1.55% of gross loans at September 30, 2023 as compared to $17.8 million or 1.59% of gross loans at December 31, 2022 and $17.7 million or 1.63% of gross loans at September 30, 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. Total loans increased by $145.8 million or 13.0% and $181.7 million or 16.8% at December 31, 2022 and September 30, 2022, respectively, to $1.26 billion at September 30, 2023 from $1.1 billion at December 31, 2022 and $1.1 billion at September 30, 2022.

The Bank had non-accrual loans totaling $15.7 million or 1.24% of gross loans at September 30, 2023 as compared to $12.7 million or 1.14% of gross loans at December 31, 2022 and $17.4 million or 1.61% of gross loans at September 30, 2022. Non-accrual loans increased by $3.0 million or 23.6% to $15.7 million at September 30, 2023 from $12.7 million at December 31, 2022 and OREO balances decreased by $4.0 million or 100% to no OREO at September 30, 2023 from $4.0 million at December 31, 2022.

The allowance for credit losses was 124.3% of non-accrual loans at September 30, 2023, 139.6% of non-accrual loans at December 31, 2022 and 101.2% of non-accrual loans at September 30, 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)

September 30, 2023 vs.
December 31, 2022 September 30, 2022
(In thousands, except percentages and share amounts)
September 30, 2023 December 31, 2022 September 30, 2022 Amount % Amount %
Assets
Cash and cash equivalents:
Cash on hand
$ 1,795 $ 1,686 $ 1,498 $ 109 6.5 % $ 297 19.8 %
Interest bearing deposits in other banks
41,738 40,899 32,184 839 2.1 % 9,554 29.7 %
Total cash and cash equivalents
43,533 42,585 33,682 948 2.2 % 9,851 29.2 %
Investment securities:
Available-for-sale, at fair value
10,703 13,902 14,371 (3,199 ) -23.0 % (3,668 ) -25.5 %
Held-to-maturity, at amortized cost
61,262 65,788 69,736 (4,526 ) -6.9 % (8,474 ) -12.2 %
Less: Allowance for credit losses - HTM securities
(28 ) - - (28 ) 0.0 % (28 ) 0.0 %
Total investment securities
71,937 79,690 84,107 (7,753 ) -9.7 % (12,170 ) -14.5 %
Federal Home Loan Bank stock
6,044 3,699 2,731 2,345 63.4 % 3,313 121.3 %
Loans receivables
1,263,918 1,118,081 1,082,210 145,837 13.0 % 181,708 16.8 %
Less: Allowance for credit losses
(19,562 ) (17,781 ) (17,652 ) (1,781 ) 10.0 % (1,910 ) 10.8 %
Net loans
1,244,356 1,100,300 1,064,558 144,056 13.1 % 179,798 16.9 %
Premises and equipment
16,228 15,725 15,912 503 3.2 % 316 2.0 %
Right-of-use asset
9,603 9,913 9,082 (310 ) -3.1 % 521 5.7 %
Bank owned life insurance
25,535 25,781 25,609 (246 ) -1.0 % (74 ) -0.3 %
Other real estate owned
- 3,971 4,201 (3,971 ) -100.0 % (4,201 ) -100.0 %
Deferred tax asset
4,428 4,436 3,990 (8 ) -0.2 % 438 11.0 %
Accrued interest receivable
5,630 4,638 4,276 992 21.4 % 1,354 31.7 %
Other assets
1,679 1,388 1,241 291 21.0 % 438 35.3 %
Total assets
$ 1,428,973 $ 1,292,126 $ 1,249,389 $ 136,847 10.6 % $ 179,584 14.4 %
Liabilities and Shareholders' Equity
Liabilities
Deposits:
Non-interest bearing
$ 180,047 $ 211,794 $ 240,698 $ (31,747 ) -15.0 % $ (60,651 ) -25.2 %
Interest bearing
941,814 824,520 779,379 117,294 14.2 % 162,435 20.8 %
Total Deposits
1,121,861 1,036,314 1,020,077 85,547 8.3 % 101,784 10.0 %
Borrowings
105,000 59,000 37,500 46,000 78.0 % 67,500 0.0 %
Accrued interest payable
1,742 993 398 749 75.4 % 1,344 337.7 %
Lease liability
10,237 10,453 9,594 (216 ) -2.1 % 643 6.7 %
Other liabilities
4,647 4,976 4,575 (329 ) -6.6 % 72 1.6 %
Total liabilities
1,243,487 1,111,736 1,072,144 131,751 11.9 % 171,343 16.0 %
Commitments and contingencies
- - - - -
Shareholders' equity
Preferred stock
- - - - N/A - N/A
Common stock
- 47,570 47,570 (47,570 ) N/A (47,570 ) N/A
Additional paid-in capital
88,654 41,022 40,923 47,632 116.1 % 47,731 116.6 %
Retained earnings
97,299 92,107 89,141 5,192 5.6 % 8,158 9.2 %
Treasury shares, at cost
(74 ) - - (74 ) (74 )
Accumulated other comprehensive loss
(393 ) (309 ) (389 ) (84 ) 27.2 % (4 ) 1.0 %
Total shareholders' equity
185,486 180,390 177,245 5,096 2.8 % 8,241 4.6 %
Total liabilities and shareholders' equity
$ 1,428,973 $ 1,292,126 $ 1,249,389 $ 136,847 10.6 % $ 179,584 14.4 %

Shares issued
23,788,990 23,785,490 23,785,490
Shares outstanding
23,777,078 23,785,490 23,785,490
Treasury shares
11,912 - -

First Commerce Bancorp, Inc.
Consolidated Statements of Income
For the three months ended September 30, 2023 and 2022
(Unaudited)

Variance
(In thousands, except percentages and per share amounts)
September 30, 2023 September 30, 2022 Amount %
Interest Income
Loans, including fees
$ 17,349 $ 13,146 $ 4,203 32.0 %
Investment securities:
Available-for-sale
85 114 (29 ) -25.4 %
Held-to-maturity
445 485 (40 ) -8.2 %
Interest-bearing deposits with banks
677 182 495 272.0 %
Federal Home Loan Bank stock
154 13 141 1084.6 %
Total interest income
18,710 13,940 4,770 34.2 %
Interest expense
-
Deposits
7,869 1,513 6,356 420.1 %
Borrowings
1,348 86 1,262 1467.4 %
Total interest expense
9,217 1,599 7,618 476.4 %
Net interest income
9,493 12,341 (2,848 ) -23.1 %
Provision (benefit) for credit losses
736 (685 ) 1,421 -207.4 %
Benefit for unfund commitments for credit losses
(164 ) - (164 ) N/A
Provision for credit losses - HTM securities
28 - 28 N/A
Total provision (benefit) for credit losses
600 (685 ) 1,285 -187.6 %
Net interest income after provision for
credit losses
8,893 13,026 (4,133 ) -31.7 %
Non-interest income
Service charges and fees
188 168 20 11.9 %
Bank owned life insurance income
175 168 7 4.2 %
Other income
15 8 7 87.5 %
Total non-interest income
378 344 34 9.9 %
Non-Interest Expenses
Salaries and employee benefits
4,366 3,943 423 10.7 %
Occupancy and equipment expense
858 839 19 2.3 %
Marketing
96 57 39 68.4 %
Professional fees
590 356 234 65.7 %
Data processing
218 177 41 23.2 %
FDIC assessment
150 150 - 0.0 %
Loss/(gain) on valuation of OREO
- (63 ) 63 -100.0 %
Other expenses
760 751 9 1.2 %
Total non-interest expenses
7,038 6,210 828 13.3 %
Income before income taxes
2,233 7,160 (4,927 ) -68.8 %
Income tax expense
536 1,712 (1,176 ) -68.7 %
Net income
$ 1,697 $ 5,448 $ (3,751 ) -68.9 %

Earnings per common share - Basic
$ 0.07 $ 0.23 $ (0.16 ) -69.6 %
Earnings per common share - Diluted
0.07 0.23 (0.16 ) -69.6 %
Weighted average shares outstanding - Basic
23,787 23,743 44 0.2 %
Weighted average shares outstanding - Diluted
24,116 23,891 225 0.9 %


Consolidated Statements of Income
For the nine months ended September 30, 2023 and 2022
(Unaudited)

Variance
(In thousands, except percentages and per share amounts)
September 30, 2023 September 30, 2022 Amount %
Interest Income
Loans, including fees
$ 49,550 $ 35,677 $ 13,873 38.9 %
Investment securities:
Available-for-sale
279 467 (188 ) -40.3 %
Held-to-maturity
1,337 1,111 226 20.3 %
Interest-bearing deposits with banks
1,655 389 1,266 325.4 %
Federal Home Loan Bank stock
295 34 261 767.6 %
Total interest income
53,116 37,678 15,438 41.0 %
Interest expense
-
Deposits
18,651 2,994 15,657 522.9 %
Borrowings
3,854 86 3,768 4381.4 %
Total interest expense
22,505 3,080 19,425 630.7 %
Net interest income
30,611 34,598 (3,987 ) -11.5 %
Provision (benefit) for credit losses
1,496 (244 ) 1,740 -713.1 %
Benefit for unfund commitments for credit losses
(553 ) - (553 ) N/A
Provision for credit losses - HTM securities
28 - 28 N/A
Total provision (benefit) for credit losses
971 (244 ) 1,215 -498.0 %
Net interest income after provision for
credit losses
29,640 34,842 (5,202 ) -14.9 %
Non-interest income
Service charges and fees
543 487 56 11.5 %
Bank owned life insurance income
1,024 494 530 107.3 %
Other income
33 49 (16 ) -32.7 %
Total non-interest income
1,600 1,030 570 55.3 %
Non-Interest Expenses
Salaries and employee benefits
12,973 11,997 976 8.1 %
Occupancy and equipment expense
2,667 2,607 60 2.3 %
Marketing
286 151 135 89.4 %
Professional fees
1,644 1,158 486 42.0 %
Data processing
655 535 120 22.4 %
FDIC assessment
429 482 (53 ) -11.0 %
Loss/(gain) on valuation of OREO
59 (65 ) 124 -190.8 %
Other expenses
2,073 2,277 (204 ) -9.0 %
Total non-interest expenses
20,786 19,142 1,644 8.6 %
Income before income taxes
10,454 16,730 (6,276 ) -37.5 %
Income tax expense
2,511 4,147 (1,636 ) -39.5 %
Net income
$ 7,943 $ 12,583 $ (4,640 ) -36.9 %
Earnings per common share - Basic
$ 0.33 $ 0.54 $ (0.21 ) -38.9 %
Earnings per common share - Diluted
0.33 0.53 (0.04 ) -7.5 %
Weighted average shares outstanding - Basic
23,787 23,533 254 1.1 %
Weighted average shares outstanding - Diluted
24,116 23,681 435 1.8 %

First Commerce Bancorp, Inc.
Net Interest Margin Analysis
(Unaudited)

Three months ended September 30, 2023 Three months ended September 30, 2022
Average Average Average Average
Balance Interest Yield/Cost Balance Interest Yield/Cost
(Dollars in thousands)
Assets:
Interest-earning assets:
Interest-bearing deposits
$ 54,790 $ 677 4.90 % $ 38,474 $ 182 1.88 %
Investment securities:
Available -for-sale
11,099 85 3.06 % 15,561 114 2.92 %
Held-to-maturity
62,107 445 2.87 % 70,636 485 2.74 %
Total investment securities
73,206 530 2.90 % 86,197 598 2.78 %
Federal Hone Loan Bank stock
6,185 154 9.95 % 1,557 14 0.22 %
Loans:
Consumer loans
326 2 2.92 % 282 3 3.74 %
Home equity loans
3,337 60 7.14 % 3,832 48 4.96 %
Construction loans
122,440 2,750 8.79 % 96,823 1,650 6.67 %
Commercial loans
35,227 703 7.81 % 50,318 838 6.52 %
Commercial mortgage loans
1,040,349 13,087 4.99 % 847,069 9,886 4.57 %
Residential mortgage loans
15,363 186 4.81 % 17,728 211 4.71 %
SBA loans
28,738 561 7.63 % 30,235 511 6.61 %
Loans Held for Sale
24 - 0.00 % 3 - 0.00 %
Total loans
1,245,804 17,349 5.52 % 1,046,291 13,146 4.98 %
Total interest-earning assets
1,379,985 18,710 5.38 % 1,172,519 13,941 4.72 %
Non-interest-earning assets:
Allowance for credit losses
(18,786 ) (18,402 )
Cash and due from bank
1,759 1,751
Other assets
60,666 63,810
Total non-interest-earning assets
43,639 47,159
Total assets
$ 1,423,624 $ 1,219,678
Liabilities and shareholders' equity:
Interest-bearing liabilities:
Interest-bearing checking accounts
$ 51,250 $ 162 1.25 % $ 57,161 $ 71 0.49 %
NOW accounts
23,195 45 0.77 % 29,379 28 0.38 %
Money market accounts
178,827 1,259 2.79 % 247,324 597 0.96 %
Savings accounts
37,457 34 0.36 % 140,295 117 0.33 %
Certificates of deposit
574,328 5,391 3.72 % 306,128 700 0.91 %
Brokered CDs
67,960 978 5.71 % - - 0.00 %
Borrowings
108,128 1,348 4.95 % 11,413 86 2.98 %
Total interest-bearing liabilities
1,041,145 $ 9,217 3.51 % 791,700 $ 1,599 0.80 %
Non-interest-bearing liabilities:
Demand deposits
179,651 230,931
Other liabilities
17,071 15,652
Total non-interest bearing liabilities
196,722 246,584
Shareholders' equity
185,757 181,394
Total liabilities and shareholders' equity
$ 1,423,624 $ 1,219,678
Net interest spread
1.87 % 3.92 %
Net interest margin
$ 9,493 2.73 % $ 12,342 4.18 %

First Commerce Bancorp, Inc.
Net Interest Margin Analysis
(Unaudited)

Nine months ended September 30, 2023 Nine months ended September 30, 2022
Average Average Average Average
Balance Interest Yield/Cost Balance Interest Yield/Cost
(Dollars in thousands)
Assets:
Interest-earning assets:
Interest-bearing deposits
$ 49,191 $ 1,655 4.50 % $ 83,295 $ 389 0.62 %
Investment securities:
Available -for-sale
12,293 279 3.03 % 17,762 467 3.50 %
Held-to-maturity
63,489 1,337 2.81 % 53,041 1,111 2.79 %
Total investment securities
75,782 1,616 2.84 % 70,803 1,578 2.94 %
Federal Home Loan Bank stock
5,924 295 6.64 % 1,184 34 3.82 %
Loans:
Consumer loans
294 7 3.33 % 278 8 3.88 %
Home equity loans
3,611 185 6.83 % 4,142 127 4.10 %
Construction loans
112,118 7,379 8.68 % 94,691 3,987 5.55 %
Commercial loans
38,047 2,197 7.61 % 55,179 2,372 5.67 %
Commercial mortage loans
1,006,038 37,603 4.93 % 773,290 26,938 4.59 %
Residential mortgage loans
15,513 557 4.80 % 18,273 646 4.73 %
SBA loans
28,455 1,622 7.52 % 32,510 1,599 6.48 %
Loans held for sale
8 - 0.00 % 1 - 0.00 %
Total loans
1,204,084 49,550 5.50 % 978,365 35,677 4.88 %
Total interest-earning assets
1,334,981 53,116 5.32 % 1,133,647 37,678 4.44 %
Non-interest-earning assets:
Allowance for credit losses
(18,389 ) (17,723 )
Cash and due from bank
1,733 1,793
Other assets
61,106 63,746
Total non-interest-earning assets
44,450 47,816
Total assets
$ 1,379,431 $ 1,181,462
Liabilities and shareholders' equity:
Interest-bearing liabilities:
Interest-bearing checking accounts
$ 48,583 $ 345 0.95 % $ 59,794 $ 162 0.36 %
NOW accounts
27,046 110 0.54 % 29,452 86 0.39 %
Money market accounts
178,937 3,158 2.36 % 237,712 1,014 0.57 %
Savings accounts
45,771 118 0.34 % 164,555 416 0.34 %
Certificates of deposit
554,874 13,817 3.33 % 265,370 1,315 0.66 %
Brokered CDs
25,795 1,103 5.72 % - - 0.00 %
Borrowings
104,478 3,854 4.93 % 3,846 86 2.98 %
Total interest-bearing liabilities
985,484 $ 22,505 3.05 % 760,729 $ 3,079 0.54 %
Non-interest-bearing liabilities:
Demand deposits
193,105 226,930
Other liabilities
16,595 15,163
Total non-interest bearing liabilities
209,700 242,093
Shareholders' equity
184,247 178,640
Total liabilities and shareholders' equity
$ 1,379,431 $ 1,181,462
Net interest spread
2.27 % 3.90 %
Net interest margin
$ 30,611 3.07 % $ 34,598 4.08 %

First Commerce Bancorp, Inc.
Selected Quarterly Financial Data
(Unaudited)

As of and for the quarters ended
(In thousands, except per share data)
9/30/2023 6/30/2023 3/31/2023 12/31/2022 9/30/2022
Summary earnings:
Interest income
$ 18,710 $ 18,163 $ 16,244 $ 15,289 $ 13,940
Interest expense
9,217 7,560 5,728 3,520 1,599
Net interest income
9,493 10,603 10,516 11,769 12,341
Provision (credit) for credit losses
600 182 190 (114 ) (685 )
Net interest income after provision (credit) for credit losses
8,893 10,421 10,326 11,883 13,026
Non-interest income
378 347 875 411 344
Non-interest expense
7,038 6,954 6,794 7,156 6,210
Income before income tax expense
2,233 3,814 4,407 5,138 7,160
Income tax expense
536 914 1,061 1,127 1,712
Net income
$ 1,697 $ 2,900 $ 3,346 $ 4,011 $ 5,448
Per share data:
Earnings per share - basic
$ 0.07 $ 0.12 $ 0.14 $ 0.17 $ 0.23
Earnings per share - diluted
0.07 0.12 0.14 0.17 0.23
Cash dividends declared
0.04 0.04 0.04 0.04 0.35
Book value at period end
7.80 7.77 7.69 7.58 7.45
Shares outstanding at period end
23,777 23,789 23,785 23,785 23,785
Basic weighted average shares outstanding
23,787 23,788 23,785 23,785 23,743
Fully diluted weighted average shares outstanding
24,116 24,070 24,164 24,176 24,124
Balance sheet data (at period end):
Total assets
$ 1,428,973 $ 1,426,003 $ 1,382,231 $ 1,292,127 $ 1,249,389
Investment securities, available-for-sale
10,703 11,566 12,891 13,902 14,371
Investment securities, held-to-maturity
61,234 61,719 64,135 65,788 69,736
Total loans
1,263,918 1,228,451 1,188,898 1,118,081 1,082,210
Allowance for credit losses
(19,562 ) (18,763 ) (18,563 ) (17,781 ) (17,652 )
Total deposits
1,121,861 1,104,883 1,045,473 1,034,200 1,020,077
Shareholders' equity
185,486 184,880 182,977 180,390 177,246
Common cash dividends
952 951 951 951 8,325
Selected performance ratios:
Return on average total assets
0.47 % 0.84 % 1.02 % 1.27 % 1.77 %
Return on average shareholders' equity
3.63 % 6.30 % 7.44 % 8.93 % 11.92 %
Dividend payout ratio
56.09 % 32.79 % 28.42 % 23.71 % 152.81 %
Net interest margin
2.73 % 3.16 % 3.33 % 3.93 % 4.18 %
Efficiency ratio
71.30 % 63.51 % 59.64 % 58.75 % 48.96 %
Non-interest income to average assets
0.11 % 0.10 % 0.27 % 0.13 % 0.11 %
Non-interest expenses to average assets
1.96 % 2.01 % 2.08 % 2.25 % 2.02 %
Asset quality ratios:
Non-performing loans to total loans
1.24 % 1.28 % 0.99 % 1.14 % 1.61 %
Non-performing assets to total assets
1.10 % 1.10 % 0.85 % 1.29 % 1.71 %
Allowance for credit losses to non-performing loans
124.32 % 119.25 % 158.04 % 139.63 % 101.25 %
Allowance for credit losses to total loans
1.55 % 1.53 % 1.56 % 1.59 % 1.63 %
Net recoveries (charge-offs) to average loans
0.02 % -0.02 % 0.01 % -0.15 % 0.00 %
Liquidity and capital ratios:
Net loans to deposits
110.92 % 109.49 % 111.94 % 106.39 % 104.36 %
Average loans to average deposits
111.97 % 115.19 % 109.33 % 108.36 % 104.43 %
Total shareholders' equity to total assets
12.98 % 12.96 % 13.24 % 13.96 % 14.19 %
Total capital to risk-weighted assets
15.58 % 15.81 % 15.72 % 16.23 % 16.44 %
Tier 1 capital to risk-weighted assets
14.32 % 14.56 % 14.47 % 14.97 % 15.19 %
Common equity tier 1 capital ratio to risk-weighted assets
14.32 % 14.56 % 14.47 % 14.97 % 15.19 %
Tier 1 leverage ratio
13.05 % 13.34 % 13.83 % 14.33 % 14.56 %

SOURCE: First Commerce Bancorp, Inc.



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https://www.accesswire.com/797183/first-commerce-bancorp-inc-reports-third-quarter-and-year-to-date-2023-results-and-declares-a-quarterly-cash-dividend-of-004-per-share

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