1st Colonial Bancorp, Inc. Reports Fourth Quarter and Full Year 2024 Results

Income Statement Highlights include:

• Net income for the fourth quarter of 2024 was $2.7 million, a 46% increase from the third quarter of 2024 and a 26% increase from the fourth quarter of 2023.
• Net income for 2024 was $8.1 million, an increase of $625 thousand, or 8%, from 2023.
• Net interest income for the fourth quarter of 2024 was $6.6 million, an 8% increase from the third quarter of 2024 and a 5% increase from the fourth quarter of 2023.
• Net interest income for 2024 was $25.0 million, a decrease of $1.3 million, or 5% from 2023.
• Net interest margin for the fourth quarter of 2024 was 3.29% compared to 3.16% for the third quarter of 2024 and 3.26% for the fourth quarter of 2023.
• Net interest margin for 2024 was 3.21% compared to 3.46% for 2023.
• Non-interest income for the quarter ended December 31, 2024 was $1.1 million, a 21% increase from the third quarter of 2024 and a 59% increase from the fourth quarter in 2023.
• Non-interest income for 2024 was $3.8 million, an increase of $986 thousand, or 35%, from 2023.
• Non-interest expense for the fourth quarter of 2024 was $4.6 million, a 1% decrease from the third quarter of 2024 and a 9% increase from the fourth quarter of 2023.
• Non-interest expense for 2024 was $18.8 million, a decrease of $129 thousand, or 1%, from 2023.
• Diluted earnings per share for the fourth quarter was $0.55, a 49% increase from third quarter of 2024 and a 25% increase from the fourth quarter of 2023.
• Diluted earnings per share was $1.64 for 2024, an increase of 6% from $1.54 for 2023.
• Annualized return on average assets for the fourth quarter of 2024, was 1.29% compared to 0.91% for the third quarter of 2024 and 1.07% for the fourth quarter of 2023.
• Return on average assets for 2024 was 1.00% compared to 0.95% for 2023.

Balance Sheet Highlights include:

• Total assets grew $26.2 million, or 3%, to $841.5 million from $815.3 million as of September 30, 2024 and by $15.9 million, or 2%, from $825.6 million as of December 31, 2023.
• Total loans declined $1.7 million, or 0.3%, to $622.5 million from $624.1 million as of September 30, 2024, and by $14.5 million, or 2%, from $637.0 million as of December 31, 2023.
• Total deposits grew $48.6 million, or 7%, to $747.7 million from $699.1 million as of September 30, 2024, and by $60.3 million, or 9%, from $687.4 million as of December 31, 2023.
• Annualized return on average equity for the fourth quarter of 2024 was 13.88% compared to 9.91% for the third quarter of September 30, 2024 and 13.05% for the fourth quarter of 2023.
• Return on average equity for 2024 was 11.10% compared to 11.98% for 2023.
• Book value per share increased 3% to $16.20 as of December 31, 2024 from $15.76 as of September 30, 2024 and 13% from $14.31 as of December 31, 2023.
• Leverage ratio for the Bank grew to 10.68% as of December 31, 2024 from 10.02% as of December 31, 2023.

1st Colonial Bancorp, Inc. (FCOB), holding company of 1^st Colonial Community Bank, today reported net income of $2.7 million, or $0.55 per diluted share, for the three months ended December 31, 2024, compared to net income of $2.1 million, or $0.44 per diluted share, for the three months ended December 31, 2023. For the year ended December 31, 2024, net income was $8.1 million, or $1.64 per diluted share, compared to $7.4 million, or $1.54 per diluted share, for the same period in 2023.

Robert White, President and Chief Executive Officer, commented, “We are pleased to report our 2024 results, which reflects our continued focus on profitability and maintaining positive operating leverage. Our non-interest income growth for the quarter and full year was led by improved production in our residential mortgage business. We are seeing continued momentum in residential and consumer lending as we head into 2025. We saw strong deposit growth in the fourth quarter as a result of our commitment to deliver exceptional products and services to our clients, as well as our commitment to paying highly competitive deposit rates. Our net interest margin improved for the second consecutive quarter and we believe that trend will likely continue into 2025. We are seeing renewed enthusiasm in the market and a renewed interest in credit products designed to support our clients business growth. That has led to a month over month increase in our commercial pipeline. While we believe our foundation is strong, our 2025 plan calls for additional investment in talent and technology, which will lead to continued profitable growth for 2025 and beyond.”

Operating Results

Net Interest Income

The net interest margin was 3.29% for the fourth quarter of 2024 compared to 3.16% for the third quarter of 2024 and 3.26% for the fourth quarter of 2023. The average yield on interest-earning assets grew 8 basis points from 5.30% for the quarter ended December 31, 2023 to 5.38% for the quarter ended December 31, 2024. The average rate paid on average interest-bearing liabilities increased 8 basis points from 2.41% for the fourth quarter of 2023 to 2.49% for the fourth quarter of 2024. When compared to the third quarter of 2024, the average yield on interest-earning assets declined 13 basis points and the average rate paid on average interest-bearing liabilities improved 31 basis points.

Net interest margin was 3.21% for the year ended December 31, 2024, compared to 3.46% for the year ended December 31, 2023. The average yield on interest-earning assets grew 28 basis points from 5.17% for 2023 to 5.45% for 2024. The average rate paid on average interest-bearing liabilities increased 63 basis points from 2.03% for 2023 to 2.66% for 2024.

Net interest income for the three months ended December 31, 2024 and 2023 was $6.6 million and $6.3 million, respectively. The $341 thousand increase in net interest income was primarily attributable to a $639 thousand increase in interest income earned on average interest-earning assets that was partially offset by a $298 thousand increase in interest paid on average interest-bearing liabilities. For the fourth quarter of 2024, average interest-earning cash and investment securities increased $37.9 million and $5.9 million from their respective average balances for the fourth quarter of 2023 and led to $584 thousand in additional interest income. For the fourth quarter of 2024, average loan balances decreased $12.4 million to $626.3 million from $638.7 million for the fourth quarter of 2023 and resulted in a $26 thousand decline in interest income. Average commercial loans and lines and residential mortgages outstanding increased $4.1 million and $1.7 million, respectively, while average outstanding commercial real estate and construction loans declined $11.5 million and $6.3 million, respectively. When compared to the third quarter of 2024, net interest income increased $473 thousand from $6.2 million. The yield on average loans outstanding was 5.87% for the fourth quarter of 2024 compared to 5.97% for the third quarter of 2024 and 5.75% for the fourth quarter of 2023.

Net interest income for 2024 was $25.0 million and declined $1.3 million from $26.3 million for 2023. The decline in net interest income was primarily attributable to a $4.4 million increase in interest paid on average interest-bearing liabilities and was partially mitigated by a $3.1 million increase in interest income earned on average interest-earning assets. During 2024, interest income on average loans outstanding, average investments and average cash increased $1.5 million, $720 thousand and $627 thousand, respectively. Our average outstanding loan balance grew $4.3 million. Average residential mortgages outstanding increased $22.4 million and average outstanding construction loans and commercial real estate loans decreased $16.3 million and $3.7 million, respectively. The yield on average loans outstanding was 5.91% for 2024 compared to 5.70% for 2023.

For the fourth quarter of 2024, interest expense was $4.2 million and increased $298 thousand from $3.9 million for the fourth quarter of 2023. For the fourth quarter of 2024, average interest-bearing deposits increased $42.0 million to $664.2 million from $622.2 million for the fourth quarter of 2023. Average interest checking and savings and money market balances increased $31.4 million and $19.8 million, respectively. Average brokered certificates of deposit (CDs) increased $17.5 million due to a $26.7 million decline in average retail CDs. Deposit interest expense increased $483 thousand from $3.5 million for the fourth quarter of 2023 to $4.0 million for the fourth quarter of 2024. The average rate paid on interest-bearing deposits was 2.40% for the fourth quarter of 2024 compared to 2.25% for the same quarter in 2023. As a result of the increase in average deposits, average borrowings decreased $12.7 million and led to a reduction of $185 thousand in interest expense. When compared to the third quarter of 2024, interest expense on deposits decreased $227 thousand from $4.2 million and the average rate paid decreased 27 basis points from 2.67%.

Interest expense grew $4.4 million from $13.0 million for 2023 to $17.4 million for 2024. For 2024 average interest-bearing deposits increased $24.0 million from the average balance for 2023. Average brokered CDs and interest checking grew $36.7 million and $2.7 million respectively. Average retail CDs and savings and money market balances declined $13.9 million and $1.6 million, respectively. The higher deposit rates combined with the increase in average brokered CD balances led to an increase of $4.8 million in deposit interest expense for 2024 compared to 2023. Average borrowings decreased $8.9 million to $23.4 million for 2024 compared to $32.3 million for 2023 and led to $416 thousand reduction in interest expense. The average rate paid on interest bearing deposits was 2.51% for 2024 compared to 1.82% for 2023.

Provision for Credit Losses

For the three months ended December 31, 2024, the net provision release for credit losses was $42 thousand and included a $158 thousand provision release for loans and $116 thousand provision expense for off balance sheet (“OBS”) commitments. For the fourth quarter of 2023, the provision for credit losses was $148 thousand and included $95 thousand for loans and $53 for OBS commitments. For the fourth quarter of 2024, net charge-offs were $55 thousand and included $125 thousand in charge-offs for the non-guaranteed portion of one SBA lending relationship. For the fourth quarter of 2023 and the third quarter of 2024, net charge-offs were $172 thousand and $291 thousand, respectively.

For the year ended December 31, 2024, the net provision release for credit losses was $244 thousand and included a $298 thousand provision release for loans and a $54 thousand provision expense for OBS commitments. For the year ended December 31, 2023, the net provision for credit losses was $270 thousand and included a $275 thousand provision expense for loans and a $5 thousand provision release for OBS commitments. For 2024, we recognized net charge-offs of $438 thousand compared to $69 thousand for 2023. The reserve required for individually evaluated loans declined from $470 thousand as of December 31, 2023 to $140 thousand as of December 31, 2024.

Noninterest Income

Noninterest income for the fourth quarter of 2024 was $1.1 million, an increase of $423 thousand from $719 thousand for the fourth quarter of 2023. Income from the origination and sales of residential mortgages was $515 thousand and grew $313 thousand from the fourth quarter in 2023. While mortgage originations grew $2.0 million, or 8%, we sold 93% of the originations in the fourth quarter of 2024 compared to 50% of the originations in the fourth quarter of 2023. Income from the sales of SBA loans was $314 thousand and increased $70 thousand from $244 thousand for the fourth quarter of 2023. When compared to the third quarter of 2024, noninterest income for the fourth quarter of 2024 increased $198 thousand from $944 thousand. Income from the origination and sales of residential mortgages declined $144 thousand and gains on the sale of SBA loans increased $305 thousand from their amounts for the third quarter in 2024.

For the year ended December 31, 2024, noninterest income was $3.8 million, an increase of $986 thousand, or 35%, from $2.8 million for 2023. Income from the origination and sales of residential mortgages increased $1.0 million, or 91%, from $1.2 million for 2023 to $2.2 million for 2024. During 2024, we sold $102.7 million, or 91%, of the $113.3 million in mortgage loan originations compared to sales of $54.7 million, or 58%, of the $95.2 million in mortgage loan originations for 2023. In 2024, we earned $345 thousand in gains on the sale of SBA loans, which declined $134 thousand, or 28%, from $479 thousand in 2023.

Noninterest Expense

Noninterest expense was $4.6 million for the three months ended December 31, 2024, an increase of $372 thousand, or 9%, from $4.2 million for the comparable period in 2023. Total personnel expenses grew $429 thousand while professional fee, which include audit and legal expenses, decreased $123 thousand. During the fourth quarter we added two key positions in marketing and retail and government banking to assist in the execution of our 2025 strategy. When compared to the third quarter of 2024, noninterest expense decreased $25 thousand.

Noninterest expense was $18.8 million for 2024 and decreased $129 thousand, or 1%, from $18.9 million for 2023. For 2024, data processing and software expenses, salaries and benefits, and occupancy and equipment expenses increased $37 thousand, $30 thousand, $21 thousand, respectively, while the FDIC insurance assessment and loan expenses declined $118 thousand and $86 thousand, respectively.

Income Taxes

For the three and twelve months ended December 31, 2024, income tax expense was $536 thousand and $2.1 million, respectively, compared to $497 thousand and $2.5 million for the three and twelve months ended December 31, 2023, respectively. The 2024 combined effective tax rate improved to 21.1% compared to 25.1% for 2023. The New Jersey corporate surcharge rate of 2.5% expired at the end of 2023. Additionally, tax exempt income for 2024 increased $643 thousand, or 40%, from 2023 and a favorable impact on the effective tax rate.

Financial Condition

Assets

As of December 31, 2024, total assets were $841.5 million and grew $26.2 million, or 3%, from $815.3 million as of September 30, 2024. Total assets increased $15.9 million, or 2%, from $825.6 million as of December 31, 2023. As of December 31, 2024, cash and cash equivalents increased $23.5 million, or 54%, to $67.4 million from $43.9 million as of September 30, 2024. Cash and cash equivalents were $52.7 million as of December 31, 2023.

Total loans were $622.5 million as of December 31, 2024 and declined $1.7 million, or less than 1%, from $624.1 million as of September 30, 2024. Total loans decreased $14.6 million, or 2%, from $637.0 million as of December 31, 2023. Commercial loans, including commercial real estate and construction loans, declined $6.7 million; residential mortgages and consumer loans decreased $4.4 million; and nonaccrual loans decreased $3.4 million. Loans held for sale were $6.3 million as of December 31, 2024, compared to $12.8 million as of September 30, 2024 and $3.6 million as of December 31, 2023.

Investments grew $7.9 million, or 7%, to $118.7 million as of December 31, 2024 from $110.8 million as of September 30, 2024. Total investments increased $11.1 million, or 10%, from $107.6 million as of December 31, 2023. During 2024 we made net investments of $8.0 in short-term municipal bond anticipation notes and $7.5 million in U.S. government agency bonds. We received $6.2 million in principal paydowns on mortgage-backed securities. The unrealized loss in the investment portfolio was $4.3 million as of December 31, 2024 compared to $6.2 million as of December 31, 2023. Approximately 85% of the available for sale investment portfolio is invested in U.S. government sponsored securities.

Asset Quality

As of December 31, 2024, the allowance for credit losses (“ACL”) for loans was $9.0 million, or 1.44%, of total loans compared to $9.2 million, or 1.47%, of total loans as of September 30, 2024. The allowance for credit losses was $9.7 million, or 1.52% of total loans, as of December 31, 2023. As of December 31, 2024 and September 30, 2024, non-performing assets were $1.7 million compared to $4.9 million as of December 31, 2023. Specific reserves on individually evaluated loans decreased $330 thousand from $470 thousand as of December 31, 2023 to $140 thousand as of December 31, 2024.

The ACL to non-accrual loans was 617% as of December 31, 2024 compared to 653% as of September 30, 2024. The ACL to non-accrual loans was 199.0% as of December 31, 2023. As of December 31, 2024 and September 30, 2024, the ratio of non-performing assets to total assets was 0.20% compared to 0.59% as of December 31, 2023.

As of December 31, 2024, total delinquent loans were $1.8 million and included $252 thousand in SBA guaranteed loans. Total delinquent loans were $1.2 million as of September 30, 2024 and $3.9 million as of December 31, 2023 and included $1.7 million in SBA guaranteed loans. Total delinquent loans to total loans was 0.52% as of December 31, 2024 compared to 0.42% as of September 30, 2024. Total delinquent loans to total loans was 1.38% as of December 31, 2023.

Liabilities

Total deposits were $747.7 million as of December 31, 2024, an increase of $48.6 million, or 7%, from $699.1 million as of September 30, 2024. For the year ended December 31, 2024, total deposits increased $60.2 million, or 9%, from $687.4 million as of December 31, 2023. Municipal checking, money markets and savings deposits, interest checking, demand deposits, and brokered deposits, increased $45.5 million, $25.9 million, $4.8 million, $2.9 million and $2.5 million, respectively, while retail CDs decreased $22.0 million. Our refocused marketing strategy is having a positive impact on acquiring new customer relationships.

As of December 31, 2024, we had no short-term borrowings due to our growth in deposits. Short-term borrowings were $24.6 million as of September 30, 2024 and $53.6 million as of December 31, 2023.

Shareholder’s Equity

Total shareholders’ equity was $78.2 million as of December 31, 2024, an increase of $2.8 million, or 4%, from $75.5 million as of September 30, 2024. Total shareholders’ equity increased $10.3 million, or 15% from $67.9 million as of December 31, 2023. The accumulated comprehensive loss was $3.1 million as of December 31, 2024 compared to $2.9 million as of September 30, 2024 and is related to the unrealized loss in our investment portfolio. The accumulated comprehensive loss was $4.5 million as of December 31, 2023. Tangible book value per share increased $0.44, from $15.76 as of September 30, 2024 to $16.20 as of December 31, 2024. Tangible book value per share was $14.31 as of December 31, 2023. As of December 31, 2024, the Bank’s capital ratios remain strong with a leverage ratio and a total risk-based capital ratio of 10.68% and 17.51%, respectively, compared to 10.02% and 15.55%, respectively, as of December 31, 2023.

Consolidated Financial Statements and Other Highlights:

About 1^st Colonial Bancorp, Inc.

1st Colonial Bancorp, Inc, is a Pennsylvania corporation headquartered in Mount Laurel, New Jersey, and the parent company of 1^st Colonial Community Bank (the “Bank”). The Bank provides a range of business and consumer financial services, placing emphasis on customer service and access to decision makers. Headquartered in Collingswood, New Jersey, the Bank has branches in Westville, New Jersey and Limerick, Pennsylvania. The bank also has administrative offices in Mount Laurel, New Jersey. To learn more, call (877) 785-8550 or visit www.1stcolonial.com.

“Safe Harbor” Statement

In addition to historical information, this press release may contain “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include statements with respect to 1st Colonial Bancorp, Inc.’s strategies, goals, beliefs, expectations, estimates, intentions, capital raising efforts, financial condition and results of operations, future performance, and business. Statements preceded by, followed by, or that include the words “may,” “could,” “should,” “pro forma,” “looking forward,” “would,” “believe,” “expect,” “anticipate,” “estimate,” “intend,” “plan,” or similar expressions generally indicate a forward-looking statement. These forward-looking statements involve risks and uncertainties that are subject to change based on various important factors (some of which, in whole or in part, are beyond 1st Colonial Bancorp, Inc.’s control). Numerous competitive, economic, regulatory, legal and technological factors, risks and uncertainties that could cause actual results to differ materially include, without limitation, the impact of the ongoing pandemic and government responses thereto; on the U.S. economy, including the markets in which we operate; actions that we and our customers take in response to these factors and the effects such actions have on our operations, products, services and customer relationships; increased competitive pressures; changes in the interest rate environment; changes in general economic conditions and conditions within the securities markets; legislative and regulatory changes; and the effects of inflation, a potential recession, among others, could cause 1st Colonial Bancorp, Inc.’s financial performance to differ materially from the goals, plans, objectives, intentions and expectations expressed in such forward-looking statements. 1st Colonial Bancorp, Inc. cautions that the foregoing factors are not exclusive, and neither such factors nor any such forward-looking statement takes into account the impact of any future events. All forward-looking statements and information set forth herein are based on management’s current beliefs and assumptions as of the date hereof and speak only as of the date they are made. 1st Colonial Bancorp, Inc. does not undertake to update any forward-looking statement whether written or oral, that may be made from time to time by 1st Colonial Bancorp, Inc. or by or on behalf of 1st Colonial Community Bank.

View source version on businesswire.com: https://www.businesswire.com/news/home/20250121960795/en/