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Wed, November 30, 2011
Tue, November 29, 2011

Liberty Bell Bank Reports Profit from Operations


Published on 2011-11-29 14:41:21 - Market Wire
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MARLTON, N.J.--([ ])--Liberty Bell Bank (OTC: LBBB) today announced earnings of $151 thousand for the third quarter 2011, an increase of 50% as compared to $101 thousand for the comparable prior year period. On a year to date basis, net income is $238 thousand for the nine months ended September 30, 2011 as compared to $202 thousand for the same period last year. Exclusive of year-to-date securities gains in 2010 and 2011 of $184 thousand and $35 thousand respectively, net income of $203 thousand year to date 2011 compares to $17 thousand for the same period last year, an increase of $186 thousand or nearly twelve-fold.

"We continue to closely monitor expenses. Aside FDIC insurance expense and elevated expenses associated with problem loan resolutions our non-interest expense year over year has increased less than 4%."

Highlights for the third quarter of 2011 include:

  • Net interest income, our core revenue, for the third quarter 2011 increased by $79 thousand or 6% from the third quarter 2010, due largely to decreased interest expense of $176 thousand mostly ($132 thousand) from lower market rates for interest bearing deposits. The decreased interest expense was partly offset by $98 thousand less interest revenue mostly from a reduction in Commercial Mortgage Loan balances of approximately $8 million. Net interest income has been trending favorably every quarter since 2008.
  • Net interest margin increased to 3.96% for the third quarter 2011 as compared to 3.54 % for the third quarter 2010 mostly due to reductions in average cost of funds. The average rate paid on total interest bearing deposits reduced 43 basis points, from a combination of lower CD rates and improving mix of deposits, to 1.08% for the third quarter 2011 as compared to 1.51% for the same period last year. Average non-interest demand deposit balances for the third quarter 2011 were $11.8 million, an increase of 9% or $977 thousand for the same period last year, and an increase to 8.1% of total deposits in the third quarter 2011 from 7.1% of total deposits in the third quarter of last year. The average yield on total interest bearing assets increased slightly to 5.20% for the third quarter 2011 as compared to 5.16% for the comparable period last year.
  • Total non-interest income of $95 thousand for the third quarter 2011 increased $32 thousand or 51% over the third 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 for the third quarter 2011 of $1.4 million increased $67 thousand or 5% over the same period last year due principally to increased legal/loan related expenses (up $28 thousand) that together accounted for 42% 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 less than 4% for the nine months ended September 30, 2011 as compared to the same period last year.
  • Non-accrual loans, inclusive of loan related OREO, at September 30, 2011 were $11.1 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 $5.9 million or 4% as compared to December 31, 2010, largely by design, as interest bearing deposits, mostly CDs, decreased while concentrated efforts to attract core non interest demand deposits resulted in an increase of nearly 6% in non interest demand deposits to $11.8 million.

aOur trend of quarterly profits that began in the fourth quarter 2009 continues. These earnings are largely the result of positive trends in our net interest income that fortunately have offset the impact of revenue loss related to our stable level of problem loans.a said President and CEO Kevin Kutcher. He added, aWe continue to closely monitor expenses. Aside FDIC insurance expense and elevated expenses associated with problem loan resolutions our non-interest expense year over year has increased less than 4%.a

aWe have enjoyed a fair amount of recent and continuing progress with respect to our problem loans such that we are now in position of significant control on five of the largest of our problem loans that comprise nearly 80% of the total of our non-accrual loans and ORE properties,a said SVP and senior loan officer John Herring. He added, aWhile we remain reasonably confident that we are generally well collateralized based upon independent appraisals and re-appraisals, with our improved positioning we can more appropriately evaluate selectively negotiating justifiable discounts if it accelerates situations sufficiently to avoid associated carrying and legal costs. This would improve various financial ratios by reducing levels of classified non-accrual loans more quickly and, in turn, have a net 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 Bankas Quarterly Report on Form 10-Q for the quarter ended September 30, 2011, which was filed with the FDIC on November 14, 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 Bankas 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 Bankas 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 Bankas control). The following factors, among others, could cause the Bankas 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 Bankas 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; 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.

Liberty Bell Bank
Balance Sheets
September 30, 2011 and December 31, 2010
(Unaudited)
2011 2010
Assets
Cash and cash due from banks $1,684,448 $ 1,385,434
Interest-bearing deposits with other banks 1,000,000 838,000
Federal funds sold 10,335,000 11,375,000
Cash and cash equivalents 13,019,448 13,598,434
Certificates of deposit with other banks - 735,000
Investment securities available for sale, at fair value 15,214,693 17,445,492

Loans (net of allowance for loan losses of $1,587,171 and $1,778,661 at September 30, 2011 and December 31, 2010, respectively)

132,604,255 135,336,647
Other Real Estate Owned 2,242,881 -
Bank premises and equipment, net 3,591,144 3,849,549
Federal Home Loan Bank stock, at cost 547,300 549,700
Prepaid FDIC assessment 373,597 632,145
Other assets held for sale 588,672 585,672
Accrued interest receivable and other assets 1,002,072 908,412
Total assets $169,184,062 $ 173,641,051
Liabilities and Shareholders' Equity
Liabilities
Deposits
Noninterest-bearing $11,836,372 $ 11,173,685
Interest-bearing 134,889,209 141,468,194
Total deposits 146,725,581 152,641,879
Federal Home Loan Bank advances 7,500,000 7,500,000
Accrued interest payable and other accrued liabilities 398,367 398,780
Total liabilities 154,623,948 160,540,659
Commitments and Contingencies (see note 8)
Shareholders' Equity

Common stock, $5 par value, 5,000,000 shares authorized; Issued and outstanding 3,014,871 and 2,808,551 shares at September 30, 2011 and December 31, 2010

15,074,355 14,042,755
Additional paid-in capital 6,391,437 6,789,077
Accumulated deficit (7,394,735) (7,632,711 )
Accumulated other comprehensive income (loss) 489,057 (98,729 )
Total shareholders' equity 14,560,114 13,100,392
Total liabilities and shareholders' equity $169,184,062 $ 173,641,051
Liberty Bell Bank
Statements of Income and Other Comprehensive Income

(Unaudited)

Three Months ended,Nine Months ended,
September 30,September 30,

2011

2010

2011

2010

Interest and Dividend Income
Interest and fees on loans $1,837,802 $ 1,948,060 $5,509,178 $ 5,778,126
Interest on securities available for sale 112,036 89,943 385,586 353,484
Interest on deposits with banks 951 4,861 4,896 25,648
Dividends on FHLB stock 5,142 7,302 19,081 17,938
Interest on federal funds sold 4,469 8,340 14,357 18,586
Total interest income 1,960,400 2,058,506 5,933,098 6,193,782
Interest Expense
Interest on deposits 393,892 570,669 1,264,153 1,800,923
Interest on FHLB advances 75,581 75,615 224,348 224,312
Total interest expense 469,473 646,284 1,488,501 2,025,235
Net interest income 1,490,927 1,412,222 4,444,597 4,168,547
Provision for Loan Losses 60,000 145,000 260,000 365,000
Net interest income after provision for loan losses 1,430,927 1,267,222 4,184,597 3,803,547
Noninterest Income
Service charges on deposit accounts 71,125 46,404 183,621 128,412
Other income 24,019 16,747 105,143 76,225
Gain on sale of investment securities available for sale 35,457 112,911 35,457 184,939
Loss on disposition of premises & equipment - - (1,344) -
Total noninterest income 130,601 176,062 322,877 389,576
Noninterest Expenses
Compensation and benefits 658,493 678,138 2,013,218 2,019,418
Occupancy 212,024 197,069 613,150 587,508
Equipment expense 122,370 110,931 362,939 331,260
Marketing and business development 35,483 36,022 110,649 98,935
Professional services 162,844 121,188 435,823 358,744
FDIC assessments 55,341 69,690 259,420 199,753
Other operating expenses 162,451 128,578 472,379 395,598
Total noninterest expenses 1,409,006 1,341,616 4,267,578 3,991,216
Income Before Income Tax Expense 152,522 101,668 239,896 201,907
Income Tax Expense 1,920 320 1,920 320
Net income $150,602 $ 101,348 $237,976 $ 201,587
Net income Per Share, Basic and Diluted $0.05 $ 0.04 $ 0.08 $ 0.07
Weighted Average Shares Outstanding, Basic and Diluted 3,014,871 2,808,551 2,968,014 2,796,452
Other Comprehensive Income (Loss)
Net Income $150,602 $ 101,348 $237,976 $ 201,587
Unrealized gains (losses) on available for sale securities 179,493 (18,954 ) 623,243 22,718
Reclassification adjustments for (gains) losses realized (35,457) (112,911 ) (35,457) (184,939 )
Total comprehensive income (Loss) $294,638 $ (30,517 ) $825,762 $ 39,366

Contributing Sources