EXTON, PA — First Resource Bancorp Inc. (OTCQX: FRSB) reported a 46% increase in second-quarter net income as loan and deposit growth, wider lending margins and improved credit quality boosted profitability despite higher operating expenses.
Net income increased to $2.8 million, or $0.93 per diluted share, for the quarter ended June 30, from $1.9 million, or $0.63 per share, a year earlier. Earnings also improved from $2.5 million, or $0.82 per share, in the first quarter.
President and Chief Executive Officer Lauren C. Ranalli attributed the performance to disciplined growth that improved profitability while strengthening the balance sheet.
Net interest income rose 36% from a year earlier to $8.1 million and increased 10% from the first quarter. Net interest margin expanded to 4.09%, up from 3.80% in the prior quarter and 3.72% a year earlier.
Ranalli noted that margin expansion benefited in part from the collection of previously unpaid interest on a nonaccrual loan that was repaid in full during the quarter.
The bank recorded a $386,000 provision for credit losses, compared with $377,000 in the first quarter and $130,000 a year earlier. The allowance for credit losses increased to 0.79% of total loans from 0.73% at the end of 2025.
Non-performing assets declined to $881,000, or 0.10% of total assets, from $3 million, or 0.37% of assets, at March 31, following the full collection of a $2.3 million nonaccrual commercial loan relationship.
“We were pleased to meaningfully reduce non-performing assets during the second quarter through the successful resolution of a $2.3 million non-accrual commercial loan relationship, which was collected in full,” Ranalli stated.
Total loans increased $21.6 million, or 3%, during the quarter to $726.9 million, driven primarily by commercial real estate lending. Compared with a year earlier, loans grew $102.1 million, or 16%.
Deposits increased $27.4 million, or 4%, during the quarter to reflect growth in noninterest-bearing and money market accounts. Compared with June 2025, deposits increased $145.7 million, or 24%. Approximately 81% of deposits were insured or collateralized as of June 30.
“We are encouraged by the continued growth of our customer deposit base during the second quarter, which supported 3% loan growth while enabling us to reduce non-core deposits by an additional $12.9 million,” Ranalli remarked.
Non-interest income totaled $435,000, down 20% from the prior quarter but up 17% from a year earlier. Gains on SBA loan sales declined from the first quarter, while service charges increased because of late fees associated with the resolved nonaccrual loan.
Non-interest expense increased 6% from the first quarter and 22% from a year earlier, reflecting broad-based operating cost increases and one-time renovation expenses at the bank’s Exton branch. Even so, the efficiency ratio improved to 54.39% from 60.05% in the second quarter of 2025.
Total assets increased 4% during the quarter, supported by loan growth and higher cash balances. Stockholders’ equity also increased 4% to $63.8 million as quarterly earnings more than offset the payment of a $0.02-per-share cash dividend.
Book value per share rose 4% during the quarter to $21.19.
For the first six months of 2026, First Resource reported net income of $5.3 million, compared with $3.6 million during the same period in 2025.
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