EXTON, PA — Against a challenging backdrop where many financial institutions are retreating from aggressive lending, First Resource Bancorp, Inc. (OTCQX: FRSB), the parent company of First Resource Bank, has reported an impressive financial performance for the first quarter of 2024. Fueled by diligent loan growth and careful pricing strategies, the company managed to mitigate the impact of rising deposit costs, keeping the net interest income largely unchanged from the previous quarter.
Financial highlights from the company’s fiscal report include a 31% annual increase in total interest income, a 7% rise in net interest income, a quarterly growth of 4% and an annualized 14% upturn in total loans. Total deposits mirrored these figures with a 3% quarterly and 11% annualized growth. A significant achievement to note for the company is the doubling of swap loan referral income during the first quarter, surpassing the total income generated in this arena during the entire previous year.
The company’s CEO, Lauren C. Ranalli, acknowledges the uphill battle against rising deposit costs, a significant challenge currently facing the industry. To offset this, concerted efforts are being made by the company to optimize funds cost, while simultaneously growing the deposit portfolio to support their expanding loan division. The company’s management team has gained strength from the recent addition of a seasoned retail banking executive, fostering collaboration between lending and deposit teams to identify and capitalize on new deposit relationships.
Interest income figures saw a significant increase during the first quarter, growing by $200 thousand, or 2%, from the previous quarter. This growth was fueled by 4% growth in loans during the first quarter and a 31% rise from the same quarter of the previous year, largely due to a 14% expansion in loans.
However, the company is not immune to market pressures. The interest expense increased by 7% compared to the fourth quarter of 2023, mainly due to an 8 basis point rise in the cost of money market accounts, a 29 basis point increase in the cost of time deposits, and the higher volume of time deposits quarter over quarter.
Net interest income in the first quarter of 2024 saw a slight dip compared to the previous quarter, while net interest margin also contracted slightly. This is primarily due to the increase in the cost of interest-bearing deposits, driven by the increase in costs for money market and time deposit accounts and an increase in the volume of time deposit accounts.
Despite the modest downward adjustments, First Resource Bancorp still maintains a healthy financial landscape. Total stockholders’ equity experienced a rise of $1.3 million, or 3%, from the previous quarter, primarily due to generated net income. The book value per share also experienced an increase during the quarter, reaching $15.34.
This positive fiscal performance by First Resource Bancorp, amid a climate where many are scaling back, is a testament to the company’s robust strategic planning and execution. The company’s Q1 results reveal a resilient entity that is not only weathering the storm of rising deposit costs but also harnessing opportunities to grow and expand, thereby enriching its value to shareholders.
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