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1st Constitution Bancorp Reports Operating Results (10-Q)

August 16, 2010 | About:
10qk

10qk

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1st Constitution Bancorp (FCCY) filed Quarterly Report for the period ended 2010-06-30.

1st Constitution Bancorp has a market cap of $31.68 million; its shares were traded at around $7 with a P/E ratio of 13.33 and P/S ratio of 0.91. 1st Constitution Bancorp had an annual average earning growth of 1.1% over the past 10 years.

Highlight of Business Operations:

The Company realized net income of $795,559 for the three months ended June 30, 2010, an increase of $260,949, or 48.8%, from the $534,610 reported for the three months ended June 30, 2009. The increase is due primarily to increases in net interest income and non-interest income and to a decrease in the level of noninterest expenses for the three months ended June 30, 2010. Net income per diluted common share was $0.14 for the three months ended June 30, 2010 compared to net income per diluted common share of $0.08 for the three months ended June 30, 2009. Net income available to common shareholders increased from $357,625 for the three months ended June 30, 2009 to $618,575 for the three months ended June 30, 2010 principally for the reasons indicated above. Net income available to common shareholders in the 2010 and 2009 periods reflected an aggregate of $176,984 and $176,985, respectively, attributable to dividends and discount accretion related to the preferred stock issued to the United States Department of the Treasury (the “Treasury”). All prior year share information has been adjusted for the effect of a 5% stock dividend declared on December 17, 2009 and paid on February 3, 2010 to shareholders of record on January 19, 2010.

Average interest earning assets increased by $79,240,831, or 14.7%, to $620,128,601 for the quarter ended June 30, 2010 from $540,887,770 for the quarter ended June 30, 2009. Overall, the yield on interest earning assets, on a tax-equivalent basis, decreased 107 basis points to 4.60% for the quarter ended June 30, 2010 when compared to 5.67% for the quarter ended June 30, 2009.

Average interest bearing liabilities increased by $39,217,337, or 8.5%, to $499,709,691 for the quarter ended June 30, 2010 from $460,492,354 for the quarter ended June 30, 2009. Overall, the cost of total interest bearing liabilities decreased 90 basis points to 1.78% for the three months ended June 30, 2010 compared to 2.68% for the three months ended June 30, 2009.

Management considers a complete review of the following specific factors in determining the provisions for loan losses: historical losses by loan category, non-accrual loans, problem loans as identified through internal classifications, collateral values, and the growth and size of the loan portfolio. In addition to these factors, management takes into consideration current economic conditions and local real estate market conditions. Using this evaluation process, the Company s provision for loan losses was $550,000 for the three months ended June 30, 2010 and $325,000 for the three months ended June 30, 2009. While the risk profile of the loan portfolio was reduced by a change in its composition via a $10,356,396 reduction in higher risk construction loans, non-performing loans increased by $3,000,304. This change in the overall risk profile necessitated the increased provision.

All other expenses decreased by $147,925, or 45.9%, to $174,297 for the three months ended June 30, 2010 compared to $322,222 for the three months ended June 30, 2009. Current year decreases occurred in correspondent bank fees, maintenance agreements and ATM operating expenses. All other expenses are comprised of a variety of operating expenses and fees as well as expenses associated with lending activities.

The Company realized net income of $1,494,817 for the six months ended June 30, 2010, an increase of 47.8% from the $1,011,300 reported for the six months ended June 30, 2009. The increase is due primarily to increases in net interest income and noninterest income and to a decrease in the level of noninterest expenses for the six months ended June 30, 2010 compared to the same period in 2009. Net income available to common shareholders for the six months ended June 30, 2010 increased to $1,140,849 from $645,665 for the six months ended June 30, 2009 principally for the reasons indicated above. Net income available to common shareholders for the six months ended June 30, 2010 and 2009 reflected an aggregate of $353,968 and $365,635, respectively, attributable to dividends and discount accretion related to the preferred stock issued to the Treasury.

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