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Liberty Bell Bank Reports Increased Profit from Operations

^{Published on 2011-08-10 17:21:41 - Market Wire}
 

MARLTON, N.J.--([ BUSINESS WIRE ])--Liberty Bell Bank (OTC: LBBB) today announced earnings of $51 thousand for the second quarter 2011, an increase of 51% as compared to $34 thousand for the comparable prior year period. On a year to date basis, net income is $87 thousand for the six months ended June 30, 2011 as compared to $100 thousand for the same period last year. Exclusive of non-recurring securities gains realized in the first quarter of last year of $72 thousand, net income of $87 thousand year to date 2011 compares to $28 thousand for the same period last year, an increase of $59 thousand or 210%.

"At the same time we have managed non-interest operating expenses very effectively while absorbing the elevated legal expenses associated with working through our problem loan situations and the increased FDIC insurance premium rates burdening all banks."

Highlights for the second quarter of 2011 include:

• Net interest income, our core revenue, for the second quarter 2011 increased by $76 thousand or 5% from the second quarter 2010, due largely to decreased interest expense mostly from lower market rates for interest bearing deposits. Net interest income has been generally trending upward every quarter since 2008.
• Net interest margin increased to 3.88% for the second quarter 2011 as compared to 3.70% for the second quarter 2010. Although the average yield on total interest bearing assets decreased 30 basis points to 5.17% for the second quarter 2011 as compared to 5.47% for the comparable period last year, the average rate paid on total interest bearing deposits reduced 52 basis points, from a combination lower CD rates and improving mix of deposits, to 1.23% for the second quarter 2011 as compared to 1.75% for the same period last year, offsetting the lower average yield on total earning assets.
• Total non-interest income of $98 thousand for the second quarter 2011 increased $30 thousand or 43% over the second quarter of 2010 due mostly to increased service fee revenue from deposit accounts related to more accounts and new fee structures. The approximate current level of service fee revenue is anticipated to continue.
• Non-interest expense of $1.4 million increased $108 thousand or 8% over the same period last year due principally to FDIC insurance premium expense that increased $37 thousand and increased legal/loan related expenses (up $43 thousand) that together accounted for 74% of the total increase in non-interest operating expenses. Excluding FDIC insurance premium expense and legal/loan related expense, total non-interest operating expenses, inclusive of compensation, occupancy and all other expenses, increased only 2% in the second quarter 2011 as compared to the same period 2010 and for the six months ended June 30, 2011 was up only 3% from the same 2011 period.
• Non-accrual loans, inclusive of loan related OREO, at June 30, 2011 were $11.2 million as compared to $9.4 million at December 31, 2010, largely due to the addition during the first quarter of 2011 of one loan relationship we had previously identified among our troubled loan relationships, which relationship we believe remains adequately addressed in our loan loss reserve adequacy analysis.
• Total deposits decreased $4.6 million or 3% as compared to December 31, 2010, largely by design as interest bearing deposits, mostly CDs, decreased while core non interest demand deposits held at $11 million.

aWe are especially pleased to continue our trend of quarterly profits that began in the fourth quarter 2009 that is built largely on consistently positive core earnings. These earnings are largely the result of positive trends in our net interest income, which we have achieved despite the loss of revenue associated with our now year-long stable level of problem loans,a said President and CEO Kevin Kutcher. He added, aAt the same time we have managed non-interest operating expenses very effectively while absorbing the elevated legal expenses associated with working through our problem loan situations and the increased FDIC insurance premium rates burdening all banks.a

aOur most troublesome problem loans remain consistently limited to the same relatively small minority of relationships that have been in non-accrual status since mid 2010, and we believe that all remain adequately reserved for in our loan loss reserves. We remain vigilant in our efforts to work our way through the very slow legal process of foreclosure,a said SVP and senior loan officer John Herring.

CEO Kutcher added, aAs much as we remain reasonably confident that we are generally well collateralized based on independent appraisals and re-appraisals, we have begun evaluating alternatives for accelerating the reduction of the level of non-accrual loan situations outside of the slow legal process of foreclosure. It may be to our advantage to consider selectively negotiating appropriate discounts to settle some situations to free up non-earning funds and avoid additional carrying and legal costs working these matters through foreclosure or liquidation. This, in turn, would improve various financial ratios by reducing levels of classified non-accrual loans more quickly and would have positive bottom line impact.a

All disclosure contained in this press release is qualified in its entirety by the more complete information contained in the Banka™s Quarterly Report on Form 10-Q for the quarter ended June 30, 2011, which will be filed with the FDIC on or before August 15, 2011. The Bank will furnish a copy of the 10-Q to any person requesting same upon written request made to Mr. Dennis Costa, Vice President/Finance, at the Banka™s offices located at 145 North Maple Ave., Marlton, New Jersey 08053.

Liberty Bell Bank is a New Jersey chartered commercial bank that maintains offices in Cherry Hill, Marlton, Moorestown, and Mt. Laurel, New Jersey. Some discussions in this press release may contain forward-looking statements. These forward-looking statements, include statements of the Banka™s plans, objectives, expectations, estimates and intentions, involve risks and uncertainties and are subject to change based on various important factors (some of which are beyond the Banka™s control). The following factors, among others, could cause the Banka™s financial performance to differ materially from the plans, objectives, expectations, estimates and intentions expressed in such forward-looking statements: the strength of the United States economy in general and the strength of the local economies in which the Bank conducts operations; the effects of, and changes in, trade, monetary and fiscal policies and laws, including interest rate policies of the Board of Governors of the Federal Reserve System, inflation, interest rate, market and monetary fluctuations; the perceived overall value of the Banka™s products and services by users, including the features, pricing and service compared to competitorsa™ products and services; the impact of changes in financial servicesa™ laws and regulations and changes in the interpretation and manner of enforcement of such laws and regulations by the Banka™s regulators; increased deposit insurance assessments; increased shareholder activism; technological changes; acquisitions; changes in consumer spending and saving habits; and the success of the Bank at managing the risks involved in the foregoing. The Bank cautions that the foregoing list of important factors is not exclusive. The Bank also cautions readers not to place undue reliance on these forward-looking statements, which reflect managementa™s analysis only as of the date on which they are given.

The Banka™s Balance Sheet as of June 30, 2011 and its Statements of Operations for the three and six months ended June 30, 2011 are set forth on the following pages: