New Resource Bank Pre-Tax Profits Grew 15% for 2017, Fueled by 8% Loan Growth and 6% Deposit Growth
SAN FRANCISCO, Jan. 31, 2018 (GLOBE NEWSWIRE) -- New Resource Bank (OTC Link LLC:NRBC) today reported that its pretax profits improved 15% to $2.7 million for 2017 compared to $2.3 million a year ago. All financial results are unaudited.
The bank finished the year with solid momentum. The loan portfolio grew $19.2 million, or 8%, to $262.8 million at December 31, 2017, compared to $243.5 million at December 31, 2016. The solid growth in loans reflects the improving economy and appeal of the bank’s values-based banking model. Total deposits grew $16.9 million, or 6%, to $304.8 million at year end, compared to $287.9 million at December 31, 2016. Asset quality remained solid, with nonperforming assets to total assets declining to 0.01% from 0.09%.
Pre-tax net income totaled $415,000 for the fourth quarter of 2017, compared to $841,000 in the fourth quarter of 2016, reflecting an increased provision for loan losses and higher operating expenses related to increased IT and professional services costs. Pre-tax net income grew 15% to $2.7 million in 2017 from $2.3 million in 2016, reflecting a 17% increase in revenues, year-over-year. The fourth quarter was impacted by the downgrade of a loan relationship for which a $345,000 loan loss provision was recorded. Including the $1.6 million additional tax provision for the revaluation of its deferred tax asset, the bank lost $1.4 million in the fourth quarter and recorded a profit of $27,000 for the year.
The bank also announced in December the signing of a definitive merger agreement with Amalgamated Bank. “Amalgamated Bank, a fellow B Corp, will acquire New Resource Bank in a merger that will extend and grow the reach of our founding mission,” said Vincent Siciliano, president and CEO. “Amalgamated, a New York-based bank that is also a Global Alliance for Banking on Values (GABV) member, has nearly a century of experience in serving the needs of working people. Their mission is to be the financial institution for progressive people and organizations: those who are working and living to make the world more just, compassionate and sustainable. I believe the combination of our two banks creates an even more effective catalyst for change.”
Key financial results from 2017 compared with the like period in 2016 include:
- Loan growth: Loans outstanding grew 8% to $262.8 million at year-end 2017, from $243.6 million at year-end 2016.
- Asset quality: Non-performing assets to total assets decreased to 0.01% as of December 31, 2017, compared to 0.09% as of December 31, 2016.
- Deposit growth: Deposits rose 6% for the year, reaching $304.8 million at year-end 2017, from $287.9 million at year-end 2016.
- Total assets: Total assets increased 5% to $348.6 million as of December 31, 2017, from $330.8 million as of December 31, 2016.
- Net interest income: Net interest income was $3.5 million for the fourth quarter and $14.0 million for the full year 2017, an increase of 6% and 15% respectively in 2016.
- Non-interest income: Non-interest income was $430,000 for the fourth quarter and $1.4 million for the full year 2017, an increase of 47% and 34% respectively in 2016. Treasury fees and bank-owned life insurance contributed to this growth.
- Net interest margin: Net interest margin remains well above industry average at 4.26% in the fourth quarter and 4.29% for the full year in 2017.
- Non-interest expense: Non-interest expense was $3.2 million for the quarter and $12.2 million for the full year 2017, an increase of 15% for both periods from 2016. The rise was influenced by increased staffing needs to support the bank’s growth, the 2017 conversion of the bank’s information technology system and professional services.
- Provision expense: Provision expense reflected a $345,000 increase for the quarter. For the full year, provision totaled $565,000, an increase from $339,000 in 2016. The quarter and full year was impacted by the downgrade of one loan relationship.
- Efficiency ratio: The bank’s efficiency ratio was 80.9% for the fourth quarter and 79.1% for the full year 2017, an increase of 4.5% for the quarter, but an improvement from 80.1% for 2016. Performance was impacted by a 17% increase in revenue, partially offset by a 14% growth in expenses.
- Risk-based capital: The common equity tier 1 capital ratio was 12.51% and the total risk-based capital ratio was 13.76% in the fourth quarter of 2017, significantly above the standard for a well-capitalized bank.
“The success of New Resource Bank over the years will result in a powerful new union of two values-based banks — New Resource and Amalgamated Bank of New York. I am pleased at the momentum this gives the values-based banking movement to address climate and social injustice and restore the financial system to its proper role in support of people and the planet,” stated Mark A. Finser, chairman of the New Resource Bank board. Mark Finser is expected to join the Amalgamated Bank Board once the merger between the two banks has closed.
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 | December 31, 2017 | December 31, 2016 | % Change | |||||||
| Assets | ||||||||||
| Cash & Due From | $ | 11,275 | $ | 7,478 | 50.8 | % | ||||
| Interest Bearing Deposits | 38,025 | 37,685 | 0.9 | % | ||||||
| Money Market Funds | - | - | 0.0 | % | ||||||
| Fed Funds | - | - | 0.0 | % | ||||||
| Investments | 25,989 | 29,223 | -11.1 | % | ||||||
| Gross Loans | 262,789 | 243,556 | 7.9 | % | ||||||
| Allowance for Loan Loss | (4,284 | ) | (3,682 | ) | 16.4 | % | ||||
| Premises & Equipment | 2,119 | 2,392 | -11.4 | % | ||||||
| Other Real Estate Owned | - | - | NM | |||||||
| Other Assets | 12,667 | 14,109 | -10.2 | % | ||||||
| Total Assets | $ | 348,582 | $ | 330,760 | 5.4 | % | ||||
| Liabilities & Equity | ||||||||||
| Deposits | $ | 304,789 | $ | 287,873 | 5.9 | % | ||||
| Borrowings | - | - | 0.0 | % | ||||||
| Other Liabilities | 3,024 | 2,408 | 25.6 | % | ||||||
| Total Liabilities | 307,813 | 290,281 | 6.0 | % | ||||||
| Equity | 40,769 | 40,479 | 0.7 | % | ||||||
| Total Liabilities & Equity | $ | 348,582 | $ | 330,760 | 5.4 | % | ||||
| Book value per outstanding share | $ | 6.91 | $ | 6.95 | ||||||
| Leverage ratio | 10.90 | % | 11.03 | % | ||||||
| Total risk based capital ratio | 13.76 | % | 14.22 | % | ||||||
| BASEL III Common Equity Tier 1 | 12.51 | % | 12.96 | % | ||||||
| Loan loss reserves to total loans | 1.63 | % | 1.51 | % | ||||||
| Loan loss reserves to non-performing loans | 10113 | % | 1281 | % | ||||||
| Non-performing loans to total loans | 0.02 | % | 0.12 | % | ||||||
| Non-performing assets to total assets | 0.01 | % | 0.09 | % | ||||||
| Income Statement | Quarter Ended | |||||||||
| December 31, 2017 | December 31, 2016 | % Change | ||||||||
| Interest Income | $ | 3,583 | $ | 3,374 | 6.2 | % | ||||
| Interest Expense | 34 | 35 | -2.9 | % | ||||||
| Net Interest Income | 3,549 | 3,339 | 6.3 | % | ||||||
| Non-Interest Income | 430 | 293 | 46.8 | % | ||||||
| Provision for Loan Loss | 345 | (21 | ) | NM | ||||||
| Non-Interest Expense | 3,219 | 2,812 | 14.5 | % | ||||||
| Net Operating Income/(Loss) | 415 | 841 | -50.7 | % | ||||||
| Taxes | 1,817 | 258 | 604.3 | % | ||||||
| Net Income/(Loss) | $ | (1,403 | ) | $ | 582 | -341.1 | % | |||
| Return on Average Assets | -0.39 | % | 0.18 | % | -323.8 | % | ||||
| Return on Average Equity | -3.29 | % | 1.43 | % | -329.5 | % | ||||
| Earnings per Outstanding Share | $ | (0.24 | ) | $ | 0.10 | -338.0 | % | |||
| Net Interest Margin | 4.26 | % | 4.31 | % | -1.1 | % | ||||
| Efficiency Ratio | 80.91 | % | 77.42 | % | 4.5 | % | ||||
| Income Statement | 12 Months Ended | |||||||||
| December 31, 2017 | December 31, 2016 | % Change | ||||||||
| Interest Income | $ | 14,173 | $ | 12,317 | 15.1 | % | ||||
| Interest Expense | 139 | 132 | 5.3 | % | ||||||
| Net Interest Income | 14,035 | 12,185 | 15.2 | % | ||||||
| Non-Interest Income | 1,404 | 1,045 | 34.4 | % | ||||||
| Provision for Loan Loss | 565 | 339 | 66.7 | % | ||||||
| Non-Interest Expense | 12,216 | 10,594 | 15.3 | % | ||||||
| Net Operating Income/(Loss) | 2,658 | 2,297 | 15.7 | % | ||||||
| Taxes | 2,629 | 998 | NM | |||||||
| Net Income/(Loss) | $ | 27 | $ | 1,298 | -97.9 | % | ||||
| Return on Average Assets | 0.01 | % | 0.42 | % | -98.2 | % | ||||
| Return on Average Equity | 0.06 | % | 3.23 | % | -98.0 | % | ||||
| Earnings per Outstanding Share | $ | 0.005 | $ | 0.22 | -98.0 | % | ||||
| Net Interest Margin | 4.29 | % | 4.21 | % | 1.9 | % | ||||
| Efficiency Ratio | 79.13 | % | 80.08 | % | -1.2 | % | ||||
| NM = Not Meaningful | ||||||||||
| N/A = Not Available | ||||||||||
Media contact:
Vincent Siciliano, President and CEO
415.995.8170
vsiciliano@newresourcebank.com
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