LAKEWOOD, N.J., April 28, 2022 — First Commerce Bank (the “Bank”) (OTC: CMRB) today reported net income of $4.196 million for the first quarter of 2022, compared to $4.054 million in the fourth quarter of 2021 and $4.246 million in the first quarter of 2021. Basic earnings per common share for the first quarter of 2022 were $0.18, compared to $0.17 in the preceding quarter and $0.19 in the first quarter of 2021.
Regarding balance sheet growth and the results of operations for the first quarter, President & CEO Donald Mindiak commented, “earnings for the first quarter of 2022 were strong and consistent with the preceding quarter as well as the first quarter of 2021. The migration to CECL has led to a reduction in our provision, inuring to income. Growth in the balance sheet occurred primarily in the Held-to-Maturity investment portfolio, net loans receivable, total deposits and stockholders’ equity. The Federal Reserve’s policy of tightening rates has provided an opportunity to purchase Bank-Qualifying investment securities at attractive prices and competitive yields, and the Bank has deployed excess liquidity into higher yielding interest-earning assets. We continue to monitor the developments of the COVID-19 pandemic as well as domestic and international economic and geopolitical events in an effort to make informed decisions that have the capacity to build franchise and shareholder value.”
Executive Summary
- Net interest margin was 4.04% for the first quarter of 2022, a three-basis point increase compared to 4.01% for the fourth quarter of 2021 and a four-basis point improvement from 4.00% for the first quarter of 2021.
- Total yield on interest earning assets increased by eight basis points to 4.25% for the first quarter of 2022, compared to 4.17% for the fourth quarter of 2021, and decreased seven basis points from 4.32% for the first quarter of 2021.
- The cost of interest-bearing liabilities decreased by two basis points to 0.30% for the first quarter of 2022, compared to 0.32% for the fourth quarter of 2021, and decreased twenty basis points from 0.50% for the first quarter of 2021.
- Net income was $4.196 million in the first quarter of 2022, compared to $4.054 million in the prior quarter and $4.246 million in the first quarter of 2021.
- Earnings per common share were $0.18 in the first quarter of 2022, compared to $0.17 in the prior quarter and $0.19 in the first quarter of 2021.
- The efficiency ratio was 57.39% for the first quarter of 2022 as compared to 50.13% for the prior quarter and 44.01% for the first quarter of 2021.
- Loans receivable, net increased by $7.9 million or 0.87% to $917.2 million at March 31, 2022 from $909.3 million at December 31, 2021.
- Investment Securities increased by $25.85 million or 55.9% to $72.1 million at March 31, 2022 from $46.23 million at December 31, 2021.
Balance Sheet Review
Total assets increased by $24.3 million or 2.15% to $1.16 billion at March 31, 2022 from $1.13 billion at December 31, 2021. The increase in total assets resulted primarily from increases in investment securities held-to-maturity and loans receivable, net, partially offset by a decrease in cash and cash equivalents.
Total cash and cash equivalents decreased by $8.96 million or 7.9% to $104.4 million at March 31, 2022 from $113.3 million at December 31, 2021. The decrease in cash and cash equivalents resulted primarily from investment security purchases and loan closings, partially offset by an increase in deposit liabilities.
Loans receivable, net increased by $7.9 million or 0.87% to $917.2 million at March 31, 2022 from $909.3 million at December 31, 2021.
Total investment securities increased by $25.85 million or 55.9% to $72.1 million at March 31, 2022 from $46.23 million at December 31, 2021. The increase in investment securities was a result of purchases of $33.3 million in held-to-maturity mortgage-backed securities, partially offset by principal amortization and maturities throughout the first quarter.
Deposit liabilities increased by $20.4 million or 2.16% to $962.3 million at March 31, 2022 from $941.9 million at December 31, 2021. The increase occurred primarily as a result of a $12.5 million or 5.90% increase in non-interest-bearing deposit liabilities to $224.5 million at March 31, 2022 from $212.0 million at December 31, 2021 and a $7.9 million or 1.08% increase in interest bearing deposits to $737.8 million at March 31, 2022 from $729.9 million at December 31, 2021.
Total stockholders’ equity increased by $3.66 million or 2.13% to $175.96 million at March 31, 2022 from $172.30 million at December 31, 2021. The increase in stockholders’ equity resulted primarily from net income for the quarter ended March 31, 2022 of $4.196 million, partially offset by a decrease of $557,000 in accumulated other comprehensive income for the quarter ended March 31, 2022.
Operating Statement Review
Net interest income increased by $876,000 or 8.65% to $10.99 million for the three months ended March 31, 2022 compared to $10.12 million for the three months ended March 31, 2021. The increase in net interest income resulted primarily from a $434,000 or 4.03% increase in interest income on loans, including fees, to $11.2 million for the three months ended March 31, 2022 from $10.7 million for the three months ended March 31, 2021 and a $379,000 or 34.7% decrease in total interest expense to $713,000 for the three months ended March 31, 2022 from $1.092 million for the three months ended March 31, 2021. The decrease in interest expense occurred primarily as a result of a decrease of twenty basis points in the cost of interest-bearing liabilities to 0.30% for the three months ended March 31, 2022 from 0.50% for the three months ended March 31, 2021.
Non-interest income increased by $157,000 or 77.5% to $360,000 for the three months ended March 31, 2022 from $203,000 for the three months ended March 31, 2021. The increase in non-interest income resulted primarily from a $161,000 increase in BOLI income to $161,000 for the three months ended March 31, 2022 from no such income for the three months ended March 31, 2021. The Bank made a $25.0 million BOLI purchase during the fourth quarter of 2021 which accounts for the lack of income in that asset category for the three months ended March 31, 2021.
Non-interest expense increased by $1.97 million or 43.45% to $6.51 million for the three months ended March 31, 2022 from $4.54 million for the three months ended March 31, 2021. The increase in non-interest expense occurred primarily as a result of increases in salaries and employee benefits, professional fees, FDIC assessments and other expenses. Salaries and employee benefits expense increased by $1.3 million or 44.2% to $4.2 million for the three months ended March 31, 2022 from $2.9 million for the three months ended March 31, 2021. The increase in salaries and employee benefits resulted primarily from a 27% year-over-year increase in employee health care costs as well as an increase in salary expenses as a result of certain severance and contract termination payments and the institution of a competitive bonus program in an effort to retain and attract quality personnel in a tight labor market. Professional fees increased by $178,000 or 67.8% to $441,000 for the three months ended March 31, 2022 from $263,000 for the three months ended March 31, 2021. FDIC assessments increased by $114,000 to $182,000 for the three months ended March 31, 2022 from $68,000 for the three months ended March 31, 2021. Other expenses increased by $365,000 to $556,000 for the three months ended March 31, 2022 from $191,000 for the three months ended March 31, 2021. The other expense category consists primarily of miscellaneous loan expense, telephone, subscriptions, software maintenance and depreciation and certain insurance policy coverage.
Income tax provision decreased by $115,000 or 7.50% to $1.42 million for the three months ended March 31, 2022 from $1.53 million for the three months ended March 31, 2021. The decrease in income tax provision resulted from a $165,000 or 2.85% decrease in EBIT to $5.61 million for the three months ended March 31, 2022 from $5.78 million for the three months ended March 31, 2021. The lower effective tax rate for the quarter ended March 31, 2022 resulted from the non-taxable BOLI income realized during the current quarter as compared to no such income for the quarter ended March 31, 2021.
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.firstcommercebank.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: 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.
SOURCE FIRST COMMERCE BANK
