SAN FRANCISCO, July 22, 2016 (GLOBE NEWSWIRE) -- New Resource Bank (OTCMarkets:NWBN) has announced unaudited financial results for the second quarter ended June 30, 2016.
New Resource Bank reported strong growth over the second quarter. The bank is ahead of its quarterly loan goals with gross loans totaling $228 million — a 27 percent increase over June 30, 2015. We believe that loan growth remained robust despite increased competition for loans due to the appeal of our triple-bottom-line mission combined with our target market expertise.
Our deposit growth is also in the double digits, with 17 percent growth over June 30, 2015 to arrive at $267 million in deposits. Asset quality remained sound, with non-performing assets to total assets declining from 0.67 percent at June 30, 2015 to 0.18 percent in the second quarter of 2016.
Quarterly net income was $265,000, a 26 percent decline compared with net income of $359,000 for the quarter ended June 30, 2015. The majority of this decline is attributed to the impact of paying income taxes, which the bank did not pay throughout most of 2015. For the majority of 2015, the bank made minimal tax payments as a result of our operating loss carryforward. At the end of 2015, the bank recognized the deferred tax asset associated with the operating loss carryforward and began to pay taxes at normalized rates.
On a pre-tax net income basis, the bank earned $442,000 for the quarter ended June 30, 2016, a 21 percent increase from the period ended June 30, 2015. The increase in pre-tax net income reflects positive operating leverage of 12 percent as total revenue increased 15 percent while total expenses grew only 3%; revenue growth was driven primarily by loan growth.
“Our second quarter results demonstrate that we are beginning to realize the benefits of our investment in growth over the last year,” said Vincent Siciliano, New Resource Bank president and CEO. “We hope to continue this trend as a result of the June launch of our Colorado loan office, which we expect will be a successful new market for our growth.”
Key financial results from the second quarter of 2016 compared with the same quarter of 2015 include:
- Loan growth: Loans outstanding grew $48 million or 27 percent, to $227.8 million from $179.6 million one year ago.
- Asset quality: Non-performing assets to total assets decreased from 0.67 percent as of quarter end June 30, 2015 to 0.18 percent.
- Deposits: Deposits rose 17 percent, or $38 million, to $267.0 million from $229.1 million one year ago.
- Other assets: Other assets, which include the deferred tax asset (DTA) and bank owned life insurance, grew to $14.7 million from $1.9 million in the previous year.
- Total assets: Total assets increased 18 percent, to $309.4 million from $262 million one year ago.
- Net interest income: Net interest income for the second quarter ended June 30, 2016 was $3.0 million, an increase of $446,000 or 18 percent from the second quarter of 2015.
- Non-interest expense: Non-interest expense for the second quarter was $2.5 million, an increase of $60,000 or 3 percent. The increase was influenced by the expansion in staffing to support the bank’s growth. The bank currently has 48 employees.
- Provision expense: Provision expense amounted to $300,000 for the quarter whereas the bank had no provision expense in the second quarter of 2015.
- Efficiency ratio: The bank’s efficiency ratio for the second quarter was 77 percent, a decrease from 87 percent from the second quarter of 2015. Second quarter performance was influenced by positive operating leverage of 12 percent.
- Risk-based capital: Common equity tier 1 capital ratio amounted to 13.17 percent and total risk-based capital ratio was 14.43 percent, significantly above the standard for a well-capitalized bank.
“Our second quarter results show positive momentum so far this year. The results validate the investments we made in our growth over 2015 and the continuing appeal of our mission. I expect this momentum to carry us to a favorable year-end finish,” stated Mark A. Finser, chairman of the New Resource Bank board.
| Quarter Ended | ||||||||||||||||||||||
| (in thousands) | ||||||||||||||||||||||
| Balance Sheet | June 30, 2016 | June 30, 2015 | % Change | |||||||||||||||||||
| Assets | ||||||||||||||||||||||
| Cash & Due From | $ | 14,028 | $ | 7,406 | 89.4 | % | ||||||||||||||||
| Interest Bearing Deposits | 25,355 | 43,660 | -41.9 | % | ||||||||||||||||||
| Money Market Funds | - | - | 0.0 | % | ||||||||||||||||||
| Fed Funds | - | - | 0.0 | % | ||||||||||||||||||
| Investments | 28,602 | 30,989 | -7.7 | % | ||||||||||||||||||
| Gross Loans | 227,806 | 179,574 | 26.9 | % | ||||||||||||||||||
| Allowance for Loan Loss | (3,715 | ) | (3,360 | ) | 10.6 | % | ||||||||||||||||
| Premises & Equipment | 2,534 | 1,789 | 41.7 | % | ||||||||||||||||||
| Other Real Estate Owned | 87 | - | 0.0 | % | ||||||||||||||||||
| Other Assets | 14,664 | 1,922 | 662.8 | % | ||||||||||||||||||
| Total Assets | $ | 309,362 | $ | 261,980 | 18.1 | % | ||||||||||||||||
| Liabilities & Equity | ||||||||||||||||||||||
| Deposits | $ | 266,971 | $ | 229,055 | 16.6 | % | ||||||||||||||||
| Borrowings | - | - | 0.0 | % | ||||||||||||||||||
| Other Liabilities | 2,287 | 1,020 | 124.3 | % | ||||||||||||||||||
| Total Liabilities | 269,259 | 230,075 | 17.0 | % | ||||||||||||||||||
| Equity | 40,103 | 31,905 | 25.7 | % | ||||||||||||||||||
| Total Liabilities & Equity | $ | 309,362 | $ | 261,980 | 18.1 | % | ||||||||||||||||
| Book value per outstanding share | $ | 6.90 | $ | 5.48 | ||||||||||||||||||
| Leverage ratio | 11.21 | % | 12.30 | % | ||||||||||||||||||
| Total risk based capital ratio | 14.43 | % | 17.04 | % | ||||||||||||||||||
| BASEL III Common Equity Tier 1 | 13.17 | % | 15.79 | % | ||||||||||||||||||
| Loan loss reserves to total loans | 1.63 | % | 1.87 | % | ||||||||||||||||||
| Loan loss reserves to non-performing loans | 809 | % | 191 | % | ||||||||||||||||||
| Non-performing loans to total loans | 0.20 | % | 0.98 | % | ||||||||||||||||||
| Non-performing assets to total assets | 0.18 | % | 0.67 | % | ||||||||||||||||||
| Quarter Ended | ||||||||||||||||||||||
| (in thousands) | ||||||||||||||||||||||
| Income Statement | ||||||||||||||||||||||
| June 30, 2016 | June 30, 2015 | % Change | ||||||||||||||||||||
| Interest Income | $ | 3,026 | $ | 2,571 | 17.7 | % | ||||||||||||||||
| Interest Expense | 36 | 28 | 29.0 | % | ||||||||||||||||||
| Net Interest Income | 2,989 | 2,543 | 17.6 | % | ||||||||||||||||||
| Non-Interest Income | 248 | 259 | -4.2 | % | ||||||||||||||||||
| Provision for Loan Loss | 300 | - | NM | |||||||||||||||||||
| Non-Interest Expense | 2,495 | 2,435 | 2.5 | % | ||||||||||||||||||
| Net Operating Income/(Loss) | 442 | 366 | 20.6 | % | ||||||||||||||||||
| Taxes | 177 | 7 | NM | |||||||||||||||||||
| Net Income/(Loss) | $ | 265 | $ | 359 | -26.2 | % | ||||||||||||||||
| Net Interest Margin | 4.08 | % | 4.03 | % | 1.3 | % | ||||||||||||||||
| Efficiency Ratio | 77.08 | % | 86.93 | % | -11.3 | % | ||||||||||||||||
| NM = Not Meaningful | ||||||||||||||||||||||
About New Resource Bank
New Resource Bank (https://www.newresourcebank.com/) is a triple-bottom-line bank serving values-driven businesses and nonprofits that are building a more sustainable world. We see money as an agent of positive social, environmental and economic change. We use banking to transform the economy into one that serves all people and the planet. By putting deposits to work for good, we lend to organizations that benefit our communities and preserve our planet.
This press release contains forward-looking statements such as statements about certain expectations and projections, and the bank’s preparedness for the coming year. Forward-looking statements are based on currently available information, are not guarantees of future performance and are subject to numerous risks and uncertainties. Such risks and uncertainties may include, but are not necessarily limited to, fluctuations in interest rates; fluctuations in asset prices, including real estate; inflation; changes in laws or government regulations or policies; general economic conditions, including the real estate market in California; the adequacy of the bank’s allowance for loan losses; and other factors beyond the bank’s control. Such risks and uncertainties could cause results for subsequent interim periods or for entire years to differ materially from those indicated. Readers should not place undue reliance on forward-looking statements, which reflect management’s view only as of the date of this press release. The bank undertakes no obligation to publicly revise these forward-looking statements to reflect subsequent events or circumstances.