FCOB 1st Colonial Bancorp Inc (PK)

1st Colonial Bancorp, Inc. (OTCBB:FCOB), the holding company of 1st Colonial National Bank, today reported that its net income for the six months ended June 30, 2011 was $345,000 ($0.11 per share), compared to $373,000 ($0.12 per share) for the six months ended June 30, 2010.

Gerry Banmiller, President and Chief Executive Officer, commented, “It is apparent that our economy is in the doldrums. The bank is adjusting to this lack of strength by reducing expenses wherever possible. I have commented in the past that we are attacking the cost of deposits by reducing our CD portfolio, which is the high-priced side of our liabilities. We are also focused on fee income as a source of profit. Specifically, our residential mortgage unit and our SBA area will continue to receive our attention. I believe that expense control and a focus on high-quality loans will help cause us to come out of this malaise without undue risk.”

At June 30, 2011, 1st Colonial also reported $276.3 million in total assets, $176.1 million in total loans and $241.3 million in deposits. These amounts are relatively flat when compared to the $276.9 million in total assets, $173.3 million in total loans and $239.1 million in deposits from June 30, 2010. The stalling of the balance sheet is reflective of the continued lack of qualified commercial loan demand. Investments were $83.5 million compared to $84.6 million at June 30, 2010.

Net interest income of $4,381,000 for the six months ended June 30, 2011 was $239,000, or 5.8%, higher than the net interest income of $4,142,000 for the six months ended June 30, 2010. This was due primarily to a 0.30% increase in net interest spread to 3.24% for the six months ended June 30, 2011 compared to 2.94% for the six months ended June 30, 2010.

1st Colonial’s provision for loan losses for the six months ended June 30, 2011 was $900,000 compared to the $995,000 provision for the six months ended June 30, 2010.

Non-interest income decreased $127,000 or 14.8% from the prior year. Non-interest income for the six months ended June 30, 2010 included a gain on sale of investments of $212,000, and there was no gain or loss from the sale of investments during the six months ended June 30, 2011. Fees generated by the origination and sale of SBA loans and residential mortgage loans increased by $43,000 and $32,000 respectively, partially offsetting the decrease in non-interest income caused by the 2010 investment sale.

Non-interest expense increased $335,000 or 9.5% from the comparable period in 2010. Salaries and benefits accounted for $164,000 of the increase due to increased commission expenses related to loan volume in our residential lending department and general salary and benefit increases. Expenses related to loans in foreclosure and legal expenses inherent with enforcing loan contracts increased by $136,000. Included in non-interest expense for the six months ended June 30, 2011 were losses on real estate owned of $51,000, compared to $29,000 for the six months ended June 30, 2010. As a result of lower pre-tax earnings and increased tax exempt investments, our income tax expense decreased from $123,000 for the six months ended June 30, 2010 to $23,000 for the six months ended June 30, 2011.

The company also reported that its net income for the three months ended June 30, 2011 was $175,000, a decrease of $87,000 from the comparable period ended June 30, 2010. Additionally, diluted earnings per share decreased to $0.06 for the quarter ended June 30, 2011 from $0.09 for the quarter ended June 30, 2010. Net interest income increased $122,000, but this was more than offset by a $142,000 increase in noninterest expenses due primarily to increased loan collection costs. In addition, our provision for loan losses increased $95,000, and our noninterest income decreased by $25,000 due to an increase in losses on real estate owned of $51,000. Our lower pre-tax earnings and increased tax exempt investments for the quarter caused a decrease in income tax expense of $53,000 compared to the three months ended June 30, 2010.

Highlights as of June 30, 2011 and June 30, 2010, and comparing the three and six months ended June 30, 2011 and the three and six months ended June 30, 2010, respectively (all unaudited), include the following (dollars in thousands, except per share data):

        at at $ increase/ % increase/

June 30, 2011

June 30, 2010

Decrease

decrease

  Total assets $276,303 $276,897 ($594) -0.2%   Total loans 176,090 173,315 2,775 1.6%   Investments 83,535 84,597 (1,062) -1.3%   Total deposits 241,300 239,134 2,166 0.9%   Shareholders' equity 23,712 23,658 54 0.2%     For the six months ended $ increase/ % increase/

June 30, 2011

June 30, 2010

Decrease

decrease

  Net interest income $4,381 $4,142 $239 5.8%   Provision for loan losses 900 995 (95) -9.5%   Other income 733 860 (127) -14.8%   Non interest expense 3,846 3,511 335 9.5%   Tax expense (benefit) 23 123 (100) -81.3%  

Net income

345 373 (28) -7.5%   Earnings per share (diluted) $0.11 $0.12 ($0.01) -8.3%     For the three months ended $ increase/ % increase/

June 30, 2011

June 30, 2010

Decrease

decrease

  Net interest income $2,228 $2,106 $122 5.8%   Provision for loan losses 450 355 95 26.8%   Other income 346 371 (25) -6.7%   Non interest expense 1,914 1,772 142 8.0%   Tax expense (benefit) 35 88 (53) -60.2%  

Net income

175 262 (87) -33.2%   Earnings per share (diluted) $0.06 $0.09 ($0.03) -33.3%  

1st Colonial National Bank, the subsidiary of 1st Colonial Bancorp, 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 also has branches in the New Jersey communities of Westville and Cinnaminson. To learn more, call (856) 858-8402 or visit www.1stcolonial.com.

This Release contains forward-looking statements that are not historical facts and include statements about management’s strategies and expectations about our business. There are risks and uncertainties that may cause our actual results and performance to be materially different from results indicated by these forward-looking statements. Factors that might cause a difference include economic conditions; unanticipated loan losses, lack of liquidity; changes in interest rates, changes in FDIC assessments, deposit flows, loan demand, and real estate values; competition; changes in accounting principles, policies or guidelines; changes in laws or regulations and in the manner in which the regulators enforce same; new technology and other factors affecting our operations, pricing, products and services.