SAN FRANCISCO, April 25, 2017 (GLOBE NEWSWIRE) -- New Resource Bank (OTC Link LLC:NWBN) reports higher earnings in the first quarter of 2017 compared to a year ago, reflecting strong growth in revenues, loans and deposits and strong asset quality. All financial results are unaudited.
Net income for the first quarter of 2017 was $308,000, or $0.05 per share, a 74% increase versus net income of $177,000, or $0.03 per share, for the first quarter of 2016, but down from $582,000, or $0.10 per share, for the fourth quarter of 2016. Key factors impacting the annual comparison included a 22% increase in revenue largely due to strong loan growth, offset by a 21% increase in operating expense due to investments in staffing and technology.
As of March 31, 2017, gross loans stood at $255.1 million, an increase of 22%, or $46.5 million, compared to a year ago, and 5%, or $11.5 million, from December 31, 2016. Factors influencing the robust loan growth included loan purchases and the continuing appeal of New Resource Bank’s triple-bottom-line mission as well as its target-market expertise. Total deposits grew 23% to $309.4 million, from $251.3 million a year ago, and increased 8% from $287.9 million on December 31, 2016. Asset quality was strong, with non-performing assets to total assets declining to 0.01% from 0.19% a year ago.
“We are committed to advancing sustainability through lending and putting deposits to work for good. Socially responsible investing continues to withstand the scrutiny of modern investment analysis, to which our consistent growth also attests,” said Vince Siciliano, President and CEO. In an April 2016 white paper, “Responsible Investing: Delivering Competitive Performance,” TIAA-CREF noted:
“A TIAA analysis of leading RI (Responsible Investing) equity indexes over the long term found no statistical difference in returns compared to broad market benchmarks, suggesting the absence of any systematic performance penalty. Moreover, incorporating environmental, social and governance (ESG) criteria in security selection did not entail additional risk. RI indexes and their broad market counterparts had similar risk profiles, based on Sharpe ratios and standard deviation measures.” https://www.tiaa.org/public/pdf/ri_delivering_competitive_performance.pdf.
“At New Resource Bank, we are very proud to demonstrate that banking can be both mission-driven and profitable,” Siciliano added. We continue to find strong loan demand from green builders, organic producers, clean energy providers and not-for profit enterprises. Likewise, more and more business owners and consumers are looking to make a positive impact on their communities and the planet by aligning their savings and deposits with their values. These trends fuel our growth and profitability.”
Key financial results from the first quarter of 2017 compared with the first quarter of 2016 include:
- Loan growth: Loans outstanding grew 22%, to $255.1 million from $208.6 million a year ago.
- Asset quality: Non-performing assets to total assets decreased to 0.01% from 0.19%.
- Net Recovery: A net recovery of $183,000 was booked in the quarter for the repayment of the balance on a single loan that had been charged off previously.
- Deposits: Deposits rose 23%, to $309.4 million from $251.3 million one year ago.
- Total assets: Total assets increased 20%, to $352.5 million from $293.2 million a year ago.
- Net interest income: Net interest income for the first quarter of 2017 was $3.3 million, an increase of $570,000, or 21%, from the first quarter of 2016.
- Non-interest expense: Non-interest expense for the first quarter was $3.1 million, an increase of $538,000, or 21%, of which $230,000 was non-recurring. The increase was the result of higher staffing levels to support the bank’s growth; a non-recurring, long-term director/employee bonus, and a one-time investment in the upgrade of the bank’s core information technology system.
- Provision expense: There was no provision expense for the quarter, compared to $75,000 during the first quarter of 2016.
- Efficiency ratio: The bank’s efficiency ratio for the first quarter was 86%, an improvement from 88% for the first quarter of 2016. Overall there was positive operating leverage of +1% as revenue grew 22% versus operating expense at 21%.
- Risk-based capital: Common equity tier 1 capital ratio amounted to 12.47% and total risk-based capital ratio was 13.73%, significantly above the standard for a well-capitalized bank.
“We are committed to delivering great service and competitive lending and deposit rates to our customers,” stated Mark A. Finser, Chairman of the Board, New Resource Bank. “We believe that investing in our employees by providing competitive wages and benefits helps us attract the best and the brightest bankers, customer service representatives and back-office support team. We view these costs as long-term investments that align our people with our mission and clients.”
| NEW RESOURCE BANK | ||||||||||||||||||||
| Consolidated Balance Sheets | ||||||||||||||||||||
| ($ in thousands, except per share amounts) | ||||||||||||||||||||
| (unaudited) | ||||||||||||||||||||
| Balance Sheet | 31-Mar-17 | 31-Dec-16 | % Change | 31-Mar-16 | % Change | |||||||||||||||
| Assets | ||||||||||||||||||||
| Cash & Due From Banks | $ | 10,446 | $ | 7,478 | 39.7 | % | $ | 6,629 | 57.6 | % | ||||||||||
| Interest Bearing Deposits | 45,935 | 37,685 | 21.9 | % | 34,730 | 32.3 | % | |||||||||||||
| Money Market Funds | - | - | - | - | - | |||||||||||||||
| Fed Funds | - | - | - | - | - | |||||||||||||||
| Investments | 28,366 | 29,223 | -2.9 | % | 34,522 | -17.8 | % | |||||||||||||
| Gross Loans | 255,052 | 243,556 | 4.7 | % | 208,636 | 22.2 | % | |||||||||||||
| Allowance for Loan Loss | (3,865 | ) | (3,682 | ) | 5.0 | % | (3,414 | ) | 13.2 | % | ||||||||||
| Net Loans | 251,187 | 239,874 | 4.7 | % | 205,222 | 22.4 | % | |||||||||||||
| Premises & Equipment | 2,325 | 2,392 | -2.8 | % | 2,533 | -8.2 | % | |||||||||||||
| Other Real Estate Owned | - | - | - | 87 | - | |||||||||||||||
| Other Assets | 14,245 | 14,109 | 1.0 | % | 9,526 | 49.5 | % | |||||||||||||
| Total Assets | $ | 352,503 | $ | 330,760 | 6.6 | % | $ | 293,248 | 20.2 | % | ||||||||||
| Liabilities & Equity | ||||||||||||||||||||
| Deposits | $ | 309,380 | $ | 287,873 | 7.5 | % | $ | 251,269 | 23.1 | % | ||||||||||
| Borrowings | - | - | - | - | - | |||||||||||||||
| Other Liabilities | 2,269 | 2,408 | -5.8 | % | 2,298 | -1.3 | % | |||||||||||||
| Total Liabilities | 311,649 | 290,281 | 7.4 | % | 253,566 | 22.9 | % | |||||||||||||
| Equity | 40,854 | 40,479 | 0.9 | % | 39,682 | 3.0 | % | |||||||||||||
| Total Liabilities & Equity | $ | 352,503 | $ | 330,760 | 6.6 | % | $ | 293,248 | 20.2 | % | ||||||||||
| Balance Sheet Data | ||||||||||||||||||||
| Book value per outstanding share | $ | 7.01 | $ | 6.95 | $ | 6.82 | ||||||||||||||
| Leverage ratio | 10.94 | % | 11.03 | % | 12.27 | % | ||||||||||||||
| Total risk based capital ratio | 13.76 | % | 14.22 | % | 15.19 | % | ||||||||||||||
| BASEL III Common Equity Tier 1 | 12.50 | % | 12.96 | % | 13.92 | % | ||||||||||||||
| Loan loss reserves to total loans | 1.52 | % | 1.51 | % | 1.64 | % | ||||||||||||||
| Loan loss reserves to non-performing loans | 9972 | % | 1281 | % | 710 | % | ||||||||||||||
| Non-performing loans to total loans | 0.02 | % | 0.12 | % | 0.23 | % | ||||||||||||||
| Non-performing assets to total assets | 0.01 | % | 0.09 | % | 0.19 | % | ||||||||||||||
| NEW RESOURCE BANK | Three Months Ended | |||||||||||||||||
| Consolidated Statements of Income | ||||||||||||||||||
| ($ in thousands, except per share amounts) | March 31, | Dec 31, | % Change | March 31, | % Change | |||||||||||||
| (unaudited) | 2017 | 2016 | 2016 | |||||||||||||||
| Interest Income | $ | 3,351 | $ | 3,374 | -0.7 | % | $ | 2,776 | 20.7 | % | ||||||||
| Interest Expense | 32 | 35 | -8.6 | % | 28 | 14.3 | % | |||||||||||
| Net Interest Income | 3,318 | 3,339 | -0.6 | % | 2,748 | 20.7 | % | |||||||||||
| Provision for Loan Loss | - | (21 | ) | NM | 75 | NM | ||||||||||||
| Net Interest Income After Provision | 3,318 | 3,360 | -1.3 | % | 2,673 | 24.1 | % | |||||||||||
| Non-Interest Income | 304 | 293 | 3.8 | % | 216 | 40.7 | % | |||||||||||
| Non-Interest Expense | 3,133 | 2,812 | 11.4 | % | 2,595 | 20.7 | % | |||||||||||
| Net Operating Income | 489 | 841 | -41.9 | % | 294 | 66.3 | % | |||||||||||
| Provision for Income Taxes | 181 | 259 | -30.1 | % | 117 | 54.7 | % | |||||||||||
| Net Income | $ | 308 | $ | 582 | -47.1 | % | $ | 177 | 74.0 | % | ||||||||
| Earnings Per Share | $ | 0.05 | $ | 0.10 | $ | 0.03 | ||||||||||||
| Shares Outstanding | 5,831,227 | 5,821,333 | 5,817,832 | |||||||||||||||
| Performance Ratios | ||||||||||||||||||
| Return on Average Assets | 0.09 | % | 0.18 | % | 0.06 | % | ||||||||||||
| Return on Average Equity | 0.75 | % | 1.43 | % | 0.45 | % | ||||||||||||
| Net Interest Margin | 4.30 | % | 4.35 | % | 4.16 | % | ||||||||||||
| Efficiency Ratio | 86.50 | % | 77.42 | % | 87.55 | % | ||||||||||||
| NM = Not Meaningful | ||||||||||||||||||
About New Resource Bank
New Resource Bank (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. We put deposits to work for good by lending to organizations that benefit our communities and protect our planet. By using banking to promote well-being, we aim to have an impact in four key areas: environmental protection; health & wellness; education & community empowerment; and sustainable commerce.
The company’s internal commitment to sustainability is equally crucial and demonstrated in many ways, notably through our LEED-certified San Francisco headquarters, our purchase of carbon offsets, our 87% waste diversion rate and generous employee benefits. In 2010, New Resource Bank became the first publicly traded, Certified B Corporation. B Corporations meet comprehensive social and environmental performance standards. For five consecutive years, New Resource Bank has earned the ‘B Corp Best for the World’ award. This list honors businesses that earned an overall score in the top 10% of more than 1,200 Certified B Corporations from over 120 industries on the B Impact Assessment, a rigorous and comprehensive assessment of a company’s impact on its workers, community, and the environment.
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.