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First Resource Bank (Pennsylvania)

FIRST RESOURCE BANCORP, INC. ANNOUNCES 2025 FIRST QUARTER RESULTS; NET INCOME GREW 27% OVER PRIOR YEAR, NET INTEREST MARGIN EXPANDS

EXTON, Pa. , April 24, 2025 /PRNewswire/ -- First Resource Bancorp, Inc. (OTCQX: FRSB), the holding company for First Resource Bank, announced financial results for the three months ended March 31, 2025. 

Lauren C. Ranalli, President and CEO, stated, "First Resource Bancorp achieved record profitability in the first quarter of 2025, driven by an improved net interest margin and robust deposit growth. Our disciplined approach to loan and deposit pricing continues to strengthen our bottom line, while our superior level of customer service has fueled continued balance sheet expansion. We are excited to start the year on such a strong note and look forward to building on this momentum."

Highlights for the first quarter of 2025 included:

  • Net income of $1.7 million exceeded the prior year by 27% and the prior quarter by 67%
  • Net interest margin expanded 10 basis points over the prior quarter to 3.60%
  • Total interest income grew 16% over the prior year first quarter
  • Net interest income grew 19% over the prior year first quarter
  • Earnings per share grew 30% over the prior year first quarter to $0.56 per share
  • Total deposits grew 4% during the first quarter, or 16% annualized
  • Book value per share grew 4% to $17.34 during the first quarter
  • Total assets grew $11.7 million, or 2%, ending the quarter at $675.3 million
  • Non-performing assets to total assets fell to 0.04% from 0.19% from the prior quarter

Ranalli added, "Our performance is driven not only by consistent growth, but also the upward repricing of loans originated during periods of historically low interest rates —a trend we expect to persist through the remainder of this year and into next. We also saw a decline in deposit costs compared to the previous quarter, while still achieving 4% deposit growth in the first quarter. Our strategic approach to rates has allowed us to steadily grow and quickly enhance our net interest margin."

Net income for the quarter ended March 31, 2025, totaled $1.7 million, or $0.56 per common share, marking a significant increase from $1.0 million, or $0.33 per share, in the previous quarter, and up from $1.3 million, or $0.43 per common share, in the same quarter of 2024. The annualized return on average assets rose to 1.06% for the first quarter of 2025, compared to 0.92% in the first quarter of 2024. Similarly, the annualized return on average equity also improved, reaching 13.31%, up from 11.39% during the same period last year. 

Total interest income was $9.7 million for the first quarter of 2025, a $95 thousand, or 1%, increase from the fourth quarter of 2024. This growth was fueled by a 1% increase in loans during the first quarter.

Total interest income increased by $1.4 million, marking a 16% increase from $8.4 million in the first quarter of 2024 to $9.7 million in the corresponding period of 2025. This growth was driven by a 10% year-over-year expansion in loans, complemented by an overall increase in loan yields. 

Total interest expense fell by 2% in the first quarter of 2025 compared to the fourth quarter of 2024. This decline was primarily driven by a 5 basis point reduction in the cost of money market accounts and a 24 basis point reduction in the cost of time deposits. These savings were partially offset by an increased volume of interest-bearing deposits. Additionally, interest expense on borrowings fell by 15%, resulting from a decrease in the average balance of overnight advances during the first quarter of 2025 compared to the fourth quarter of 2024.

Total interest expense increased by 13%, climbing from $3.7 million in the first quarter of 2024 to $4.2 million in the first quarter of 2025. This increase was primarily driven by greater volumes of interest-bearing deposits, partially offset by a 6 basis point decrease in the cost of interest-bearing deposits year-over-year. Interest expense on subordinated debt grew by 45%, while interest expense on borrowings declined by 27% when compared to the first quarter of 2024.

In the first quarter of 2025, net interest income grew by $163 thousand, or 3%, compared to the previous quarter. The net interest margin also increased to 3.60%, up from 3.50% for the fourth quarter of 2024. The overall yield on interest-earning assets rose by 5 basis points, primarily driven by a 5 basis point increase in loan yields to 6.47% for the quarter. Meanwhile, the cost of interest-bearing deposits dropped by 10 basis points to 3.39%, reflecting lower rates on money market and time deposit accounts, partially offset by increased volumes in those categories. As a result, the total cost of deposits fell by 4 basis points for the quarter, from 2.89% to 2.85%.

The provision for credit losses in the first quarter of 2025 was $174 thousand, down significantly from $1.1 million in the fourth quarter of 2024. The elevated provision in the previous quarter was primarily attributable to a $1.0 million specific reserve established for a non-accrual commercial loan relationship, and that amount was subsequently charged off during the first quarter of 2025. An additional $100 thousand charge-off for an unrelated commercial loan, brought the total charge-offs for the quarter to $1.1 million. Year over year, the provision for credit losses rose $110 thousand from $64 thousand in the first quarter of 2024 to $174 thousand in the first quarter of 2025. 

"The vast majority of the first quarter charge-offs had already been provided for through a specific reserve in the prior quarter, resulting in minimal impact on earnings this quarter," commented Ranalli. "Despite the charge-off decisions, we are actively pursuing all available collection options related to these loans."

As of March 31, 2025, the allowance for credit losses to total loans stood at 0.77%, down from 0.93% as of December 31, 2024. Non-performing assets consisted solely of non-performing loans, totaling $262 thousand as of March 31, 2025, a decrease from $1.3 million at the end of the prior quarter. There were no non-performing assets as of March 31, 2024. Non-performing assets to total assets stood at 0.04% at March 31, 2025, compared to 0.19% as of December 31, 2024, and 0.00% at March 31, 2024.

Non-interest income totaled $349 thousand in the first quarter of 2025, representing a 21% increase from $289 thousand in the previous quarter, and a 12% decrease from $396 thousand in the same quarter of the prior year. Notably, swap referral fee income contributed $24 thousand in the first quarter of 2025, compared to $31 thousand in the fourth quarter of 2024 and $182 thousand in the first quarter of 2024. Gains on the sale of SBA loans were $87 thousand in the first quarter of 2025, compared to an immaterial amount in the fourth quarter of 2024, and none in the first quarter of 2024.

Non-interest expenses increased $290 thousand, or 9%, in the first quarter of 2025 compared to the prior quarter. This increase was driven by higher salaries & employee benefits, professional fees, advertising, data processing, and other costs. However, these increases were partially offset by decreases in occupancy & equipment. 

Non-interest expenses increased $274 thousand, or 8%, in the first quarter of 2025 compared to the same period in 2024. This rise was driven by increases in all categories when comparing the first quarter of 2025 to the first quarter of 2024. The ratio of non-interest expenses to average assets was 2.25% in the first quarter of 2025, up from 2.07% in the previous quarter and down from 2.28% in the first quarter of the prior year.

Deposits for the first quarter experienced a net increase of $21.8 million, or 4%, rising from $552.2 million on December 31, 2024, to $574.0 million on March 31, 2025. Noninterest-bearing deposits rose by 8% in the first quarter, increasing $6.8 million to $93.4 million, up from $86.6 million in the previous quarter. Interest-bearing checking balances rose by $6.6 million, or 17%, to $46.8 million, up from $40.1 the prior quarter. Money market deposits grew $10.3 million, or 4%, rising from $239.8 million at the end of the fourth quarter of 2024, to $250.1 by the close of the first quarter of 2025. These gains were partially offset by a $2.0 million, or 1%, decline in time deposits, which fell from $185.7 million on December 31, 2024, to $183.7 million on March 31, 2025.

Between March 31, 2024, and March 31, 2025, total deposits grew 12%, driven by increases in interest-bearing checking accounts, money markets, and time deposits. This growth was partially offset by a decline in noninterest-bearing deposits. As of March 31, 2025, approximately 82% of total deposits were insured or otherwise collateralized, up from 81% in the prior quarter.

The loan portfolio expanded by $6.6 million, representing a 1% increase, from $598.5 million on December 31, 2024, to $605.0 million on March 31, 2025. Robust growth in commercial business, construction loans, and consumer loans was partially offset by a decrease in commercial real estate loans when comparing loan balances over the same period.

Ranalli noted, "Robust loan fundings in the first quarter were offset by several large loan payoffs. We consider the resulting relatively slow net loan growth in the first quarter to be an anomaly, with stronger growth expected for the remainder of the year."

Between March 31, 2024 and March 31, 2025, total loans expanded by 10%, with strong growth in all loan categories.

The following table illustrates the composition of the loan portfolio:

Mar. 31,

2025


Dec. 31,

2024


Mar. 31,

2024







Commercial real estate

$   476,539,433


$   480,933,654


$   444,909,373

Commercial construction

46,800,635


39,760,197


35,337,226

Commercial business

63,018,850


59,862,802


51,780,407

Consumer

18,681,505


17,907,914


17,979,804







Total loans

$   605,040,423


$   598,464,567


$   550,006,810

 

Investment securities totaled $16.8 million on March 31, 2025, compared to $26.6 million on December 31, 2024. The held-to-maturity investment portfolio had a book value of $8.5 million and a fair market value of $7.5 million, resulting in an unrealized loss of $1.0 million, compared to an unrealized loss of $1.1 million at year-end 2024. After tax, this loss amounts to $799 thousand, representing approximately 1.5% of total equity as of March 31, 2025. The remainder of the investment portfolio was classified as available-for-sale, with a book value of $9.4 million and a fair value of $8.3 million, resulting in an unrealized loss of $1.1 million, compared to $1.2 million as of December 31, 2024. This unrealized loss, net of tax, totals $841 thousand and is reflected in accumulated other comprehensive loss on the balance sheet.

On August 12, 2024, the Company announced a stock repurchase program authorizing the repurchase of up to 155,922 shares of its common stock. During the quarter ended March 31, 2025, the Company repurchased 9,248 shares at a total cost of $136 thousand and an average price of $14.62 per share, a significant discount to book value per share of $17.34 at the end of the first quarter. As of March 31, 2025, 49,759 shares remained available for repurchase under the program.

Total stockholders' equity increased by $1.7 million, or 3%, rising from $50.3 million on December 31, 2024, to $52.0 million on March 31, 2025, largely driven by net income. During the quarter ended March 31, 2025, book value per share increased by 61 cents, or 4%, reaching $17.34.

Selected Financial Data:

Consolidated Balance Sheets (unaudited)






March 31,
2025


December 31,
2024





Cash and due from banks

$    32,001,499


$    17,837,920

Time deposits at other banks

100,000


100,000

Investments

16,832,703


26,611,867

Loans

605,040,423


598,464,567

Allowance for credit losses

(4,649,701)


(5,574,679)

Premises & equipment

7,612,821


7,551,410

Other assets

18,343,387


18,593,449





Total assets

$  675,281,132


$  663,584,534





Noninterest-bearing deposits

$    93,370,878


$    86,581,276

Interest-bearing checking

46,765,157


40,119,102

Money market

250,128,786


239,828,130

Time deposits

183,711,945


185,697,340

  Total deposits

573,976,766


552,225,848

Short term borrowings

30,000,000


40,000,000

Long term borrowings

4,250,000


6,250,000

Subordinated debt

8,477,273


8,473,216

Other liabilities

6,574,889


6,341,010





Total liabilities

623,278,928


613,290,074





Common stock

3,100,773


3,100,773

Surplus

19,854,676


19,852,352

Treasury stock

(1,422,978)


(1,316,876)

Accumulated other comprehensive loss

(840,523)


(964,821)

Retained earnings

31,310,256


29,623,032





Total stockholders' equity

52,002,204


50,294,460





Total liabilities &

     stockholders' equity

$  675,281,132


$  663,584,534

 

Performance Statistics
(unaudited)









Qtr Ended

Mar. 31,

2025

Qtr Ended

Dec. 31,

2024

Qtr Ended

Sep. 30,

2024

Qtr Ended

Jun. 30,

2024

Qtr Ended

Mar. 31,

2024







Net interest margin

3.60 %

3.50 %

3.43 %

3.43 %

3.35 %







Nonperforming loans/

   total loans

0.04 %

0.21 %

0.00 %

0.00 %

0.00 %







Nonperforming assets/

   total assets

0.04 %

0.19 %

0.00 %

0.00 %

0.00 %







Allowance for credit losses/

   total loans

0.77 %

0.93 %

0.76 %

0.77 %

0.80 %







Average loans/average

   assets

93.0 %

93.2 %

92.9 %

92.7 %

92.4 %







Non-interest expenses*/

   average assets

2.25 %

2.07 %

2.17 %

2.21 %

2.28 %







Efficiency ratio

61.0 %

58.3 %

62.3 %

63.3 %

65.5 %







Earnings per share – basic

   and diluted

$0.56

$0.33

$0.53

$0.44

$0.43







Book value per share

$17.34

$16.73

$16.45

$15.78

$15.34







Total shares outstanding

2,998,977

3,006,039

3,004,689

3,098,431

3,096,138







Weighted average shares
outstanding

3,003,194

3,005,408

3,055,157

3,097,433

3,094,951







*  Annualized

 

Consolidated Income Statements (unaudited)












Qtr. Ended

Mar. 31,

2025


Qtr. Ended

Dec. 31,

2024


Qtr. Ended

Sep. 30,

2024


Qtr. Ended

Jun. 30,

2024


Qtr. Ended

Mar. 31,

2024











INTEREST INCOME










Loans, including fees

$9,583,093


$9,512,689


$9,346,895


$8,859,695


$8,228,102

Securities

116,372


115,291


123,678


122,082


120,713

Other

47,421


24,256


25,135


34,964


31,735

 Total interest income

9,746,886


9,652,236


9,495,708


9,016,741


8,380,550











INTEREST EXPENSE










Deposits

4,002,995


4,057,530


3,979,691


3,767,011


3,519,176

Borrowings

77,303


90,767


245,596


173,198


105,860

Subordinated debt

134,682


134,681


120,829


93,124


93,124

 Total interest expense

4,214,980


4,282,978


4,346,116


4,033,333


3,718,160











Net interest income

5,531,906


5,369,258


5,149,592


4,983,408


4,662,390











Provision for credit losses

174,097


1,127,547


13,317


246,273


63,651











Net interest income after

provision for credit losses

5,357,809


4,241,711


5,136,275


4,737,135


4,598,739











NON-INTEREST INCOME










Service charges and other fees

109,360


114,958


94,812


104,748


100,164

BOLI income

65,850


66,248


65,800


59,613


51,356

Gain on sale of SBA loans

86,860


(367)


59,296


-


-

Swap referral fee income

24,201


31,030


-


62,460


182,060

Other

62,843


77,225


65,944


64,085


62,548

 Total non-interest income

349,114


289,094


285,852


290,906


396,128











NON-INTEREST EXPENSE










Salaries & benefits

2,127,037


1,948,007


1,999,957


1,944,755


2,045,083

Occupancy & equipment

334,698


336,629


368,339


362,850


289,202

Professional fees

150,176


109,819


128,748


130,767


137,482

Advertising

108,721


77,809


76,383


81,510


81,745

Data processing

204,492


201,671


189,429


180,257


176,685

Other

664,334


625,603


622,590


636,589


584,926

Total non-interest expense

3,589,458


3,299,538


3,385,446


3,336,728


3,315,123











Income before federal income
tax expense

2,117,465


1,231,267


2,036,681


1,691,313


1,679,744











Federal income tax expense

430,241


223,486


413,607


342,880


348,807











Net income

$1,687,224


$1,007,781


$1,623,074


$1,348,433


$1,330,937

 

About First Resource Bancorp, Inc.

First Resource Bancorp, Inc. is the holding company of First Resource Bank. First Resource Bank is a locally owned and operated Pennsylvania state-chartered bank with three full-service branches, serving the banking needs of businesses, professionals and individuals in the Delaware Valley. The Bank offers a full range of deposit and credit services with a high level of personalized service. First Resource Bank also offers a broad range of traditional financial services and products, competitively priced and delivered in a responsive manner to small businesses, professionals and residents in the local market. For additional information visit our website at www.firstresourcebank.com. Member FDIC.

This press release contains statements that are not of historical facts and may pertain to future operating results or events or management's expectations regarding those results or events. These are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities and Exchange Act of 1934. These forward-looking statements may include, but are not limited to, statements about our plans, objectives, expectations and intentions and other statements contained in this press release that are not historical facts. When used in this press release, the words "expects", "anticipates", "intends", "plans", "believes", "seeks", "estimates", or words of similar meaning, or future or conditional verbs, such as "will", "would", "should", "could", or "may" are generally intended to identify forward-looking statements. These forward-looking statements are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are either beyond our control or not reasonably capable of predicting at this time. In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change. Actual results may differ materially from the results discussed in these forward-looking statements. Readers of this press release are accordingly cautioned not to place undue reliance on forward-looking statements. First Resource Bank disclaims any intent or obligation to update publicly any of the forward-looking statements herein, whether in response to new information, future events or otherwise.

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SOURCE First Resource Bank