First Commerce Bancorp, Inc. Reports First Quarter 2025 Results - First Commerce Bancorp (OTC:CMRB) (2025)

LAKEWOOD, N.J., April 25, 2025 (GLOBE NEWSWIRE) -- First Commerce Bancorp, Inc. (the "Company"), CMRB, the holding company for First Commerce Bank (the "Bank"),today reported net income of $1.7million and basic earnings per common share of $0.08for the three months ended March 31, 2025, as compared to net income of $1.2million and basic earnings per common share of $0.05for the three months ended March 31, 2024.

President & CEO Donald Mindiak commented, "Measured balance sheet growth during the first quarter was highlighted by calculated increases in both loans and investment securities, redeploying excess liquidity into higher yielding assets, with arisk profileconsistent with our underwriting standards. While our average yield on interest earning assets and average cost on interest bearing liabilities remained relatively stable as compared to the first quarter of 2024, on a linked quarter basis the average yield on interest earning assets increased by nine basis points and the average cost of interest bearing liabilities decreased by nine basis points resulting in a thirteen basis point increase in our net interest margin and a thirteen basis point increase in our return on average assets in the comparativequarters endedMarch 31, 2025 and December 31, 2024, respectively. The continued success of our stock repurchase plan, coupled with improving profitability, is reflected in the increase in book value by $0.08/share since year end 2024 and $0.34/share since March 31, 2024."

Continuing, Mr. Mindiak remarked that, "From an asset quality perspective, one large loan of $21.0 million migrated into non-accrual status during the first quarter, however, a contract is in place to remediate this facility which is anticipated to close during the second quarter of 2025. While a degreeof uncertainty has permeated the marketplace as a result of certain prospective economic, regulatory and geopolitical headwinds which remainan on-going challenge to navigate, we will endeavor to continue toexecute our strategies with prudence and forethought in an effort to increase franchise and shareholder value."

Financial Highlights

• Total interest income increased by $1.4 millionor 7.4% forthefirst quarter of2025 compared to thefirst quarter of2024as a result of the growth in average interest-earning assetsyear over year.
• Total interest expenseincreased by $1.0million or 9.5% for the first quarter of2025 compared tothefirst quarter of2024as a result of the growth in interest-bearing liabilities.
• Total deposits increased by $96.9million or 8.8% to $1.20billion atMarch 31, 2025,compared to $1.11billion atMarch 31, 2024.
• The annualized return on average total assets increased by twelve basis points to0.44% atMarch 31, 2025,compared to 0.32% atMarch 31, 2024.
• The annualized return on average shareholders'equity was 3.93% atMarch 31, 2025, compared to 2.54% atMarch 31, 2024.
• The book value per common share was $8.47atMarch 31, 2025, compared to $8.13at March 31, 2024.
• Net interest margin increased thirteen basis points on a linked quarter basis to 2.33% as of March 31, 2025, from 2.20% as of December 31, 2024.

Balance Sheet Review

Total assets increased by $30.9million or 2.0% to $1.58billion atMarch 31, 2025, from $1.55billion at December 31, 2024.The increase in total assets was primarily related to increases in total investment securities and total loans receivable, partially offset by a decrease in cash and cash equivalentsduring thethree months ended March 31, 2025.

Total cash and cash equivalents decreased by $48.1million or 36.3% to $84.3million atMarch 31, 2025, from $132.5million at December 31, 2024. This decrease was primarily due to funding of loan closings andthe purchases of investment securities during the first quarter of 2025.

Total investment securities increased by $65.6million or 58.5% to $177.8million atMarch 31, 2025, from $112.2million at December 31, 2024. The increase in investment securities resulted primarily from $69.3million in purchases of investment securities, partially offset by $1.3millionin redemptionsand $2.4million in mortgage-backed security amortization.

Total loans receivable, net of allowance for credit losses increased by $17.1million or 1.4% to$1.24billion atMarch 31, 2025, from$1.22billion at December 31, 2024. Commercial mortgage loans, and construction loans increased $8.2 million and $13.5 million, respectively, partially offset by decreases in commercialloans, residential loans and home equity loans of $1.8million, $1.6 million and $1.4 million, respectively.The allowance for credit losses increased by $78,000 to $14.8million or 1.18% of gross loans atMarch 31, 2025, as compared to $14.7million or 1.19% of gross loans at December 31, 2024.

Total deposits increased $27.1 million or 2.3% to $1.20billion at March 31, 2025,from $1.17billion atDecember 31, 2024. Within the components of total deposits, time depositsincreased $33.6million, savingsdeposits increased $9.9million, and non-interest-bearing demand deposits increased $7.0million, partially offset bydecreases of $10.8million in NOW deposits, $7.9million in money marketaccount deposits and $4.6 million in brokered deposits.

Stockholders' equity decreased by $1.8million or 1.1% to $170.4million at March 31, 2025,from $172.3million at December 31, 2024. The decrease in stockholders' equity was primarily dueto $4.1million in repurchases of common stock, offset by increases of $1.7million in retained earnings and $713,000 in additional paid-in-capital. During thethree months ended March 31, 2025, the Company repurchased 653,000shares for approximately $4.1million, or a weighted average price of approximately $6.23per share.

Three Months of Operations

Net interest income increased by $382,000or 4.6% to $8.6million for thethree months ended March 31, 2025, from $8.2million for thethree months ended March 31, 2024. The increase in net interest income was primarily due to an increase in total interest income of $1.4 million as a result of an increase in average interest earning assets, partially offset by an increase in total interest expense of $1.0 millionas a result of an increase inaverage interest-bearing liabilities.

Total interest income increased by $1.4 millionor 7.4% to $20.5million for thethree months ended March 31, 2025, from $19.1million for the three months ended March 31, 2024. Interest income on loans, including fees, decreased$289,000or 1.6% to $17.4million for thethree months ended March 31, 2025, as compared to $17.7million for thethree months ended March 31, 2024. The decrease in interest income on loans, including fees, resulted primarily from adeclinein the average balance of loans receivable of $9.9million or 0.8% to $1.24billion for thethree months ended March 31, 2025,as compared to $1.25billion for thethree months ended March 31, 2024. Average yield on loans receivable was 5.67% for thethree months ended March 31, 2025,unchanged year over year. Interest income on interest-bearing deposits with other banks increased by $338,000 or 51.6% to $993,000for thethree months ended March 31, 2025, as compared to $655,000 for the same period in the prior year. This increase resulted from a higher average balanceofinterest-bearing deposits with banks of $43.7million or 80.7% to $97.8million for thethree months ended March 31, 2025, as compared to $54.1millionfor the same period in the prior year. Interest income on investment securities increased by $1.3 millionor 231.0% to $1.9 millionfor thethree months ended March 31, 2025, as compared to $561,000 for the same period in the prior year, as a result of purchasing and replacing paydowns of investment securities with higher yielding investment securities. The average balance of investment securities portfolio increased by $81.8million or 117.2% to $151.6 million for thethree months ended March 31, 2025, as compared to $69.8millionfor the same period in the prior year. The average yield on investment securities increased by 168basis points to 4.90% for thethree months ended March 31, 2025, as compared to 3.22% for the same period in the prior year. Dividend income on FHLBstock increased by$63,000 or 40.1% to $220,000 for thethree months ended March 31, 2025, as compared to $157,000 for the same period in the prior year, primarily as a result of an increase in average yield of 128 basis points to 9.34%for thethree months ended March 31, 2025, as compared to 8.06% for the same period in the prior year.

Total interest expense increased by $1.0million or 9.5% to $11.8million for thethree months ended March 31, 2025, from $10.8million for thethree months ended March 31, 2024. The increase in interest expense occurred primarily as a result ofan increase in average balance of interest-bearing liabilities of $118.6million or 11.0%, to $1.20billion for thethree months ended March 31, 2025, from $1.08billion for thethree months ended March 31, 2024. Despite the increase in the average balance of interest-bearing liabilities, the average cost of interest-bearing liabilities decreasedto3.99% for thethree months ended March 31, 2025, as compared to 4.01% for thethree months ended March 31, 2024. The increase in average balance of interest-bearing liabilities included a $85.3million increasein average interest-bearing deposit liabilities and a$33.3million increasein average wholesale borrowings for thethree months ended March 31, 2025. The increase in interest-bearing liabilities was primarily used to maintain an increased level of liquidity consistent with regulatory guidance.

During thefirst quarter of 2025, the Company recorded an$83,000provision for credit lossesas compared to a$7,000 provision for credit losses for the same period in the prior year. Based on the results of the CECL model and management's evaluation of both quantitative and qualitative factors for thefirst quarter of 2025, the Company recorded a provision for credit losses of $51,000 on corporate securities held-to-maturity, a $19,000 provision for credit losses for unfunded commitments and a $13,000 provision for credit losses on loans. Based upon the aforementioned analyses, management believes that the allowance for credit losses on loans and investment securitiesat March 31, 2025,and2024were appropriate.

Net interest margin decreased by sixbasis points to 2.33% for thethree months ended March 31, 2025, compared to 2.39% for thethree months ended March 31, 2024. The decrease in the net interest margin is primarily due to anincrease in the average balance of interest bearing liabilities of $118.6 million to$1.20 billion for thethree months ended March 31, 2025from $1.08 billionthree months ended March 31, 2024, despite a decrease in the cost of interest-bearing liabilities to 3.99% for thethree months ended March 31, 2025 from 4.01% for thethree months ended March 31, 2024. This increase was partially offset by an increase in average balance of interest earning assets of $117.3million to $1.50billion for thethree months ended March 31, 2025, compared to $1.39billion for thethree months ended March 31, 2024.

Non-interest income increased by $872,000 or 167.0% to $1.4 millionfor thethree months ended March 31, 2025, from $522,000 for thethree months ended March 31, 2024. The increase in total non-interest income resulted primarily from an increase in other income of $764,000as a result of a non-recurring gain of $778,000 on the sale of a Companyowned propertyrecorded in the firstquarter of 2025. Excluding thisnon-recurring gain, other income would have decreased $14,000 when compared to the same period in the prior year. Service charges and fees increased by $102,000 or 53.4% to $293,000 for thethree months ended March 31, 2025,from $191,000 for the same period in the prior year, primarily due to an increase in loanfeesof $47,000 and an increase in deposit accounts fees of $51,000.

Non-interest expense increased by $638,000 or 8.8% to $7.8million for thethree months ended March 31, 2025, compared to $7.2million for thethree months ended March 31, 2024. Salaries and employee benefits increased by $238,000 or 5.3% to $4.7million for thethree months ended March 31, 2025, as compared to $4.5million for thethree months ended March 31, 2024. The increase in salaries and employee benefits resulted primarily due to new positions appointed to assist in the growth of the Bank andannual merit increases partially offset by a decrease in health insurance costs year over year. Occupancy and equipment expense increased by $245,000 or 26.9% to $1.2 million for thethree months ended March 31, 2025, as compared to $912,000for thethree months ended March 31, 2024, primarily due to additional lease expense related to the Company leasing additional office space to relocate its corporate offices. Advertising and marketing expense decreased by $23,000 or 29.5% to $55,000 for thethree months ended March 31, 2025,as compared to $78,000 for thethree months ended March 31, 2024,as a result of reduction in marketing consultant services. Data processing expense increased by $57,000 or 20.0% to $342,000 for thethree months ended March 31, 2025,compared to $285,000 for thethree months ended March 31, 2024,primarily as a result of adding new services and annual cost increases. FDIC insurance assessment increased $26,000 or 13.3% to $221,000 for thethree months ended March 31, 2025,from $195,000 for thethree months ended March 31, 2024,as a result of an increase in the assessment rate. Other operating expenses increased by $79,000 or 10.5% to $828,000 for thethree months ended March 31, 2025,from $749,000 for thethree months ended March 31, 2024,primarily due to minor increases in various components of other operating expenses.Other operating expenses are primarily comprised of loanrelated expenses, dues and subscriptions, digital banking expenses, sponsorships,training and education, software maintenance and depreciation, and miscellaneous expenses. Management's focus continues to remainon prudently managing itsoperating expenses.

The income tax provision increased by $22,000or 5.8%to $403,000 for thethree months ended March 31, 2025, from $381,000for thethree months ended March 31, 2024. This increase in the income tax provision resulted primarily from an increase in the pre-tax income year over year. In addition, the effective tax yield declined year over year as a result of a reduction in New York state tax apportionment.The effective tax rate for the quarter ended March 31, 2025, was 19.4% compared to 24.8% for the quarter ended March 31, 2024.

Asset Quality

The allowance for credit losses increased by $78,000 to $14.8million or 1.18% of gross loans atMarch 31, 2025, as compared to $14.7million or 1.19% of gross loans at December 31, 2024,and $14.6 million or 1.18% at March 31, 2024. During the first quarter of2025, the Company added a $13,000 provision to the allowance for credit losses and had net recoveriesof$65,000.Based on the results of the CECL model and management's evaluation of both quantitative and qualitative factors duringthe quarter, changes in the allowance for credit losses are adjusted accordingly.

The Bank had non-accrual loans totaling $37.9million or 3.02% of gross loans atMarch 31, 2025, as compared to $16.6million or 1.34% of gross loans atDecember 31, 2024. Non-accrual loans increased by $21.3millionor 128.0% fromDecember 31, 2024,as a result of one commercial real estate loan in the amount of approximately $21.0 million which was placed on non-accrual status during the first quarter of2025.A contract is in place to remediate this facility which is anticipated to close during the second quarter of2025. The allowance for credit losses was 39.1% of non-accrual loans atMarch 31, 2025, compared to 88.7%, atDecember 31, 2024.

About First Commerce Bancorp, Inc.

First Commerce Bancorp, Inc, is a financial services organization headquartered in Lakewood, New Jersey. The Bank, the Company's wholly owned subsidiary, provides businesses and individuals a wide range of loans, deposit products and retail and commercial banking services through its branch network located in Allentown, Bordentown, Closter, Englewood, Fairfield, Freehold, Jackson, Lakewood, Robbinsville and Teaneck, New Jersey. For more information, please visit our website https://www.firstcommercebk.com/ or contact our offices at 732-364-0032.

Forward-Looking Statements

This release, like many written and oral communications presented by First Commerce Bancorp Inc., and our authorized officers, may contain certain forward-looking statements regarding our prospective performance and strategies within the meaning of Section 27A of the Securities Act of 1933 as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and are including this statement for purposes of said safe harbor provisions. Forward-looking statements, which are based on certain assumptions and describe future plans, strategies, and expectations of the Company, are generally identified by use of the words "anticipate," "believe," "estimate," "expect," "intend," "plan," "project," "seek," "strive," "try," or future or conditional verbs such as "could," "may," "should," "will," "would," or similar expressions. Our ability to predict results or the actual effects of our plans or strategies is inherently uncertain. Accordingly, actual results may differ materially from anticipated results.

In addition to the factors previously disclosed in prior Bank communications and those identified elsewhere, the following factors, among others, could cause actual results to differ materially from forward-looking statements or historical performance: the impact of changes in interest rates and in the credit quality and strength of underlying collateral and the effect of such changes on the market value of First Commerce Bank's investment securities portfolio; changes in asset quality and credit risk; the inability to sustain revenue and earnings growth; difficult market conditions and unfavorable economic trends in the United States generally, and particularly in the market areas in which First Commerce Bank operates and in which its loans are concentrated, including the effects of declines in housing market values; inflation; customer acceptance of the Bank's products and services; customer borrowing, repayment, investment and deposit practices; customer disintermediation; the introduction, withdrawal, success and timing of business initiatives; competitive conditions; the inability to realize cost savings or revenues or to implement integration plans and other consequences associated with certain corporate initiatives; economic conditions; and the impact, extent and timing of technological changes, capital management activities, and actions of governmental agencies and legislative and regulatory actions and reforms.