SAN FRANCISCO, Oct. 26, 2017 (GLOBE NEWSWIRE) -- New Resource Bank (OTC Link LLC: NWBN) reports significantly higher earnings in the third quarter of 2017, compared to a year ago, reflecting year-over-year solid growth in loans, deposits and revenue. Asset quality remains excellent. New Resource Bank’s unique approach to banking focuses on lending for good and specializing in environmental protection, health and wellness, education and community empowerment, and sustainable commerce. All financial results are unaudited.
Net income for the third quarter of 2017 was $728,000, or $0.12 per share, a 166% increase versus net income of $274,000, or $0.05 per share, for the third quarter of 2016, and up 85% from $394,000, or $0.07 per share, for the second quarter of 2017. Key factors impacting the annual comparison include a 19.4% increase in revenue largely due to solid loan growth, partially offset by a 9.6% increase in operating expenses due to investments in staffing and technology.
As of September 30, 2017, gross loans increased 8.5%, or $20.1 million, to $257.0 million, compared to a year ago, and decreased slightly from the preceding quarter. Factors influencing the loan growth included the continuing attraction of New Resource Bank’s triple-bottom-line mission, as well as its target-market expertise. Total deposits grew 10.9% to $307.5 million, from $277.3 million a year ago, and decreased slightly on a linked quarter basis. Asset quality remains strong, with non-performing assets to total assets at 0.08%, down from 0.13% a year ago and up from 0.07% in the preceding quarter.
“Our year-over-year results reflect our focus on triple-bottom-line lending and generating operating efficiencies as we grow. We continue to demonstrate that banking can be mission-focused and profitable at the same time,” said Vince Siciliano, President and CEO. “Our financial performance this quarter was above expectations. Our outlook for results remains positive but at more moderate levels due to higher than expected loan payoffs over the course of this year.”
Socially responsible investing (“SRI”) continues to attract investors, growing 33% to $8.72 trillion in 2016. The significant growth in environmental, social and governance (“ESG”) assets reflects several factors. These include growing market penetration of SRI products, the development of new products that incorporate ESG criteria and the incorporation of ESG criteria by numerous large asset managers across wider portions of their holdings, according to the US SIF Foundation in its “Report of Sustainable and Responsible Investing Trends in the United States in 2016.” Visit http://www.ussif.org/trends.
“We continue to see strong loan demand from green builders, organic producers, clean energy providers and nonprofit enterprises. In addition, business owners and consumers are consciously choosing to make a difference by banking with financial service providers that match their values. These trends continue to fuel our growth and profitability,” said Siciliano.
Key financial results from the third quarter of 2017 compared with the third quarter of 2016 include:
- Loan growth: Loans outstanding grew 8.5%, to $257.0 million from $237.0 million a year ago.
- Deposits: Deposits rose 10.9%, to $307.5 million from $277.3 million one year ago.
- Total assets: Total assets increased 10.2%, to $353.1 million from $320.4 million a year ago.
- Net interest income: Net interest income grew 19.1% in the third quarter of 2017 to $3.7 million, an increase of $593,000 from the third quarter of 2016.
- Net interest margin: NIM expanded six basis points to 4.32% compared to both the second quarter of 2017 and the third quarter a year ago.
- Non-interest expense: Non-interest expense for the third quarter was $2.9 million, an increase of $259,000, or 9.6%, from a year ago.
- Provision expense: Provision expense for the quarter was a credit of $34,000, and increased from a $15,000 credit during the third quarter of 2016.
- Asset quality: Credit quality continues to be excellent, with non-performing assets to total assets at 0.08%, down from 0.13% a year ago and up from 0.07% in the preceding quarter.
- Efficiency ratio: The bank’s efficiency ratio for the third quarter improved to 73% from 79% during the third quarter of 2016.
- Return on average assets was 0.20% for the third quarter of 2017 and 0.09% for the third quarter of 2016.
- Return on average equity was 1.73% for the third quarter of 2017 and 0.68% for the third quarter of 2016.
- Risk-based capital: Common equity tier 1 capital ratio amounted to 12.75% and total risk-based capital ratio was 14.00%, significantly above the standard for a well-capitalized bank.
“We have been profitable now for more than five years and in that timeframe have almost doubled our loan portfolio and deposit base,” stated Mark A. Finser, Chairman of the Board, New Resource Bank. “We appreciate the loyalty of our customers, the dedication of our employees and the confidence of our shareholders.”
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 second publicly traded, Certified B Corporation. B Corporations meet comprehensive social and environmental performance standards. For six 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 2,100 Certified B Corporations from over 130 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.
| Quarter Ended | |||||||||||||||||
| (in thousands) | |||||||||||||||||
| Balance Sheet | September 30, 2017 | June 30, 2017 | % Change | September 30, 2016 | % Change | ||||||||||||
| Assets | |||||||||||||||||
| Cash & Due From | $ | 10,376 | $ | 10,762 | -3.6 | % | $ | 7,352 | 41.1 | % | |||||||
| Interest Bearing Deposits | 46,329 | 42,755 | 8.4 | % | 31,360 | 47.7 | % | ||||||||||
| Money Market Funds | - | - | 0.0 | % | - | 0.0 | % | ||||||||||
| Fed Funds | - | - | 0.0 | % | - | 0.0 | % | ||||||||||
| Investments | 26,781 | 27,584 | -2.9 | % | 31,396 | -14.7 | % | ||||||||||
| Gross Loans | 257,011 | 259,596 | -1.0 | % | 236,949 | 8.5 | % | ||||||||||
| Allowance for Loan Loss | (3,938 | ) | (3,985 | ) | -1.2 | % | (3,702 | ) | 6.4 | % | |||||||
| Premises & Equipment | 2,180 | 2,253 | -3.2 | % | 2,464 | -11.5 | % | ||||||||||
| Other Real Estate Owned | - | - | 0.0 | % | 87 | NM | |||||||||||
| Other Assets | 14,320 | 14,188 | 0.9 | % | 14,461 | -1.0 | % | ||||||||||
| Total Assets | $ | 353,059 | $ | 353,153 | 0.0 | % | $ | 320,367 | 10.2 | % | |||||||
| Liabilities & Equity | |||||||||||||||||
| Deposits | $ | 307,451 | $ | 309,032 | -0.5 | % | $ | 277,335 | 10.9 | % | |||||||
| Borrowings | - | - | 0.0 | % | - | 0.0 | % | ||||||||||
| Other Liabilities | 3,393 | 2,732 | 24.2 | % | 2,671 | 27.0 | % | ||||||||||
| Total Liabilities | 310,844 | 311,764 | -0.3 | % | 280,006 | 11.0 | % | ||||||||||
| Equity | 42,215 | 41,389 | 2.0 | % | 40,361 | 4.6 | % | ||||||||||
| Total Liabilities & Equity | $ | 353,059 | $ | 353,153 | 0.0 | % | $ | 320,367 | 10.2 | % | |||||||
| Book value per outstanding share | $ | 7.16 | $ | 7.02 | $ | 6.94 | |||||||||||
| Leverage ratio | 10.71 | % | 10.74 | % | 11.37 | % | |||||||||||
| Total risk based capital ratio | 14.00 | % | 13.75 | % | 14.09 | % | |||||||||||
| BASEL III Common Equity Tier 1 | 12.75 | % | 12.50 | % | 12.83 | % | |||||||||||
| Loan loss reserves to total loans | 1.53 | % | 1.54 | % | 1.56 | % | |||||||||||
| Loan loss reserves to non-performing loans | 1428 | % | 1696 | % | 1098 | % | |||||||||||
| Non-performing loans to total loans | 0.11 | % | 0.09 | % | 0.14 | % | |||||||||||
| Non-performing assets to total assets | 0.08 | % | 0.07 | % | 0.13 | % | |||||||||||
| Income Statement | Quarter Ended | ||||||||||||||||
| September 30, 2017 | June 30, 2017 | % Change | September 30, 2016 | % Change | |||||||||||||
| Interest Income | $ | 3,737 | $ | 3,503 | 6.7 | % | $ | 3,141 | 19.0 | % | |||||||
| Interest Expense | 36 | 36 | 0.0 | % | 33 | 9.1 | % | ||||||||||
| Net Interest Income | 3,701 | 3,467 | 6.7 | % | 3,108 | 19.1 | % | ||||||||||
| Non-Interest Income | 354 | 316 | 12.0 | % | 288 | 22.9 | % | ||||||||||
| Provision for Loan Loss | (34 | ) | 254 | NM | (15 | ) | NM | ||||||||||
| Non-Interest Expense | 2,951 | 2,914 | 1.3 | % | 2,692 | 9.6 | % | ||||||||||
| Net Operating Income/(Loss) | 1,138 | 615 | 85.0 | % | 719 | 58.3 | % | ||||||||||
| Taxes | 410 | 221 | 85.5 | % | 445 | -7.9 | % | ||||||||||
| Net Income/(Loss) | $ | 728 | $ | 394 | 84.8 | % | $ | 274 | 165.7 | % | |||||||
| Return on Average Assets | 0.20 | % | 0.11 | % | 78.4 | % | 0.09 | % | 128.3 | % | |||||||
| Return on Average Equity | 1.73 | % | 0.95 | % | 81.8 | % | 0.68 | % | 155.6 | % | |||||||
| Earnings per Outstanding Share | $ | 0.12 | $ | 0.07 | 84.9 | % | $ | 0.05 | 162.1 | % | |||||||
| Net Interest Margin | 4.32 | % | 4.26 | % | 1.5 | % | 4.26 | % | 1.5 | % | |||||||
| Efficiency Ratio | 72.78 | % | 77.02 | % | -5.5 | % | 79.25 | % | -8.2 | % | |||||||
| NM = Not Meaningful | |||||||||||||||||
Media contact:
Vincent Siciliano, President and CEO
415.995.8170
vsiciliano@newresourcebank.com