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05-04-2010 | Liberty Bell Bank Announces Profitable Quarter and 16% Deposit Increase

Liberty Bell Bank Announces Profitable Quarter and 16% Deposit Increase for Year

MARLTON, N.J.--(BUSINESS WIRE)--Liberty Bell Bank (OTC: LBBB) today announced 16% growth in total deposits along with a 6% growth in total loans for the year 2009. The bank also reported a profitable fourth quarter 2009 of $62,000 as compared to an operating loss of $(210,000) for the same period 2008. The bank reported an operating loss for the year 2009 of $(415,000) as compared to an operating loss for the year 2008 of $(315,000). The operating loss is largely attributed to increased loan loss provision expense, increased FDIC insurance premiums and increased non-interest operating expenses primarily attributed to the bank’s Mount Laurel office that opened for business in February 2009 for which there were no operational expenses in the prior year.

“It is difficult to overcome the effects of things out of our control. All banks have been significantly impacted by increased FDIC insurance expenses and, to varying degrees, by the aftereffects of the economy that show in loan portfolios as some borrowers struggle”

Highlights for the period include:
  • Total deposits increased $20.6 million or 16% over year end 2008, approximately half of which is attributed to the new Mount Laurel office.
  • Total loans increased $7.2 million or 6% since year end 2008.
  • Net interest income, which is our core net revenue, increased $685,000 or 16% year over year and is up 19% for the fourth quarter 2009 as compared to the fourth quarter 2008.
  • The Bank’s net interest margin improved to 3.19% on average for 2009 as compared to 2.97% on average 2008. The Bank’s net interest margin for quarter ended December 31, 2009 was 3.30% as compared to 3.03 % for the same period last year.
  • Total non-interest (overhead) expenses increased $900,000 or 21% over 2008, mostly attributed to increased FDIC insurance expense of $190,000 and approximately $450,000 of expenses associated with the new Mount Laurel office that opened in February 2009 for which there was no appreciable expense in the prior year.
  • The loan loss provision expense increased $93,000 to $610,000 for 2009 from $516,000 in 2008 due in part to charged-off loans and commensurate with the bank’s quarterly analysis of the adequacy of its loan loss reserves relative to the characteristics of and circumstances relevant to its overall loan portfolio that includes its non-performing loans.
  • The Bank realized $98,000 in gains on the sale of investment securities in 2009, all during the fourth quarter 2009, as compared to $9,000 in 2008.
  • The Bank has $6.1 million of non-performing loans of which $5.4 million relates to four loan relationships. Anticipated and estimated deficiencies, if any, relative to non-accrual loans is incorporated in the Bank’s analysis of the adequacy of its loan loss reserves. The Bank does not anticipate that it will experience material loss from these loans.
  • The Bank’s Mount Laurel office ended 2009 with $10 million in deposits after ten months of operations.

“It is difficult to overcome the effects of things out of our control. All banks have been significantly impacted by increased FDIC insurance expenses and, to varying degrees, by the aftereffects of the economy that show in loan portfolios as some borrowers struggle,” said President and CEO Kevin Kutcher, adding, “For us, FDIC insurance expense increased $190,000 from 2008 to 2009. Even with interest revenue lost to some non-performing loans, our net interest margin improved and our core revenue is up, as reflected in increased net interest income. The Mount Laurel expansion is part of our core business growth strategy that helps position us with deposit and funding growth to support the eventual growth of loans. Discounting the increase in FDIC insurance (which was not within our control), our operating results for 2009 improved by about $100,000 over 2008 even with the added costs related to our investment in our future with our Mount Laurel branch.”

“It was great to end the year on an up note with a profitable fourth quarter. Absent unforeseen surprises or further economic deterioration, we remain cautiously optimistic that this will initiate a trend toward favorable earnings in 2010,” said CEO Kutcher.

Liberty Bell Bank is a New Jersey-chartered commercial bank that maintains offices in Cherry Hill, Marlton, Moorestown, and Mt. Laurel, New Jersey. Some discussions in this press release may contain forward-looking statements. These forward-looking statements include statements of the Bank’s plans, objectives, expectations, estimates and intentions, involve risks and uncertainties and are subject to change based on various important factors (some of which are beyond the Bank’s control). The following factors, among others, could cause the Bank’s financial performance to differ materially from the plans, objectives, expectations, estimates and intentions expressed in such forward-looking statements: the strength of the United States economy in general and the strength of the local economies in which the Bank conducts operations; the effects of, and changes in, trade, monetary and fiscal policies and laws, including interest rate policies of the Board of Governors of the Federal Reserve System, inflation, interest rate, market and monetary fluctuations; the perceived overall value of the Bank’s products and services by users, including the features, pricing and service compared to competitors’ products and services; the impact of changes in financial services’ laws and regulations; increased deposit insurance assessments; continuing hostile shareholder activism; technological changes; acquisitions; changes in consumer spending and saving habits; and the success of the Bank at managing the risks involved in the foregoing. The Bank cautions that the foregoing list of important factors is not exclusive. The Bank also cautions readers not to place undue reliance on these forward-looking statements, which reflect management’s analysis only as of the date on which they are given.

The Bank’s unaudited balance sheet as of December 31, 2009 and its unaudited statements of operations for the year ended December 31, 2009 are set forth below.


Liberty Bell Bank

Balance Sheets
December 31, 2009 (Unaudited) and December 31, 2008

Assets 2009 2008
Cash and cash due from banks $ 1,538,947 $ 1,215,446
Federal funds sold 5,025,000 -
Cash and cash equivalents 6,563,947 1,215,446
Investment securities available for sale, at fair value 16,810,241 25,660,329
Interest-bearing deposits with other banks 7,948,017 -
Loans (net of allowance for loan losses of $1,420,000 and $1,326,676 as of December 31, 2009 and December 31,
2008, respectively)
131,565,224 124,315,679
Bank premises and equipment, net 4,461,772 4,591,574
Accrued interest receivable and other assets 2,475,056 1,714,495
Total assets $ 169,824,257 $ 157,497,523
Liabilities and Shareholders' Equity    
Noninterest-bearing $ 8,123,787 $ 6,587,608
Interest-bearing 140,478,336 121,356,417
Total deposits 148,602,123 127,944,025
Borrowings 7,500,000 15,400,000
Accrued interest payable and other accrued liabilities 486,011 520,879
Total liabilities 156,588,134 143,864,904
Shareholders' Equity    
Common stock, $5 par value, 5,000,000 shares authorized; Issued and outstanding, 2,771,414 shares at December
31, 2009 and 2008
13,857,070 13,452,965
Additional paid-in capital 6,847,071 7,223,776
Accumulated deficit (7,839,590 ) (7,424,696 )
Accumulated other comprehensive income 371,572 380,574
Total shareholders' equity 13,236,123 13,632,619
Total liabilities and shareholders' equity $ 169,824,257 $ 157,497,523

Statements of Operations
Years Ended December 31, 2009 (Unaudited) and 2008

  2009 2008
Interest Income    
Interest and fees on loans $ 7,834,304 $ 7,521,714
Interest and dividends on securities 699,735 1,052,725
Interest on deposits with banks 39,487 2,149
Interest on federal funds sold 19,711 95,972
Total interest income 8,593,237 8,672,560
Interest Expense    
Interest on deposits 3,395,225 4,150,223
Interest on borrowings 301,592 310,843
Total interest expense 3,696,817 4,461,066
Net interest income 4,896,420 4,211,494
Provision for Loan Losses 609,813 516,000
Net interest income after provision for loan losses 4,286,607 3,695,494
Noninterest Income    
Service charges on deposit accounts 190,651 66,504
Other income 124,071 127,357
Gain on sale of investment securities available for sale 97,611 8,985
Total noninterest income 412,333 202,846
Noninterest Expenses    
Compensation and benefits 2,449,053 2,183,042
Occupancy 804,326 591,015
Equipment and data processing 424,963 367,288
Marketing and business development 117,611 105,831
Professional services 440,969 392,445
Other operating expenses 876,912 573,958
Total noninterest expenses 5,113,834 4,213,579
Loss Before Income Tax Expense (414,894 ) (315,239 )
Income Tax Expense - -
Net Loss $ (414,894 ) $ (315,239 )
Net Loss Per Common Share, Basic and Diluted $ (0.15 ) $ (0.12 )
Weighted Average Shares Outstanding, Basic and Diluted 2,734,878 2,690,593