FIRST RESOURCE BANCORP, INC. ANNOUNCES 2025 SECOND QUARTER RESULTS; NET INCOME GREW 41% OVER PRIOR YEAR, NET INTEREST MARGIN EXPANDS
EXTON, Pa., July 23, 2025 /PRNewswire/ -- First Resource Bancorp, Inc. (OTCQX:FRSB), the holding company for First Resource Bank, announced financial results for the three months ended June 30, 2025.
Lauren C. Ranalli, President and CEO, stated, "The second quarter of 2025 marked the most profitable quarter in the Bank's history, capping off a record breaking first half of the year. This exceptional performance was fueled by a widening net interest margin and sustained growth in loans and deposits. Management's disciplined approach to pricing across the balance sheet has generated significant net interest margin expansion - from 3.50% in the fourth quarter of 2024, to 3.60% in the first quarter of 2025 and now 3.72% in the second quarter of 2025. With total assets approaching the $700 million threshold, each additional basis point of margin expansion contributes significantly to our bottom line."
Highlights for the second quarter of 2025 included:
Net income of $1.9 million exceeded the prior year by 41% and the prior quarter by 13%
Net interest margin expanded 12 basis points over the prior quarter to 3.72%
Total interest income grew 14% over the prior year second quarter
Net interest income grew 19% over the prior year second quarter
Earnings per share grew 43% over the prior year second quarter to $0.63 per share
Total loans grew 3% during the second quarter, or 13% annualized
Total deposits grew 4% during the second quarter, or 18% annualized
Book value per share grew 4% to $18.00 during the second quarter
Total assets grew $22.0 million, or 3%, ending the quarter at $697.3 million
Non-performing assets to total assets remain low at 0.03%
Named a "Best Places to Work" company by the Philadelphia Business Journal for the seventh consecutive year
Named Best Commercial Bank and Best Community Bank by the readers of the Main Line Times for the fifth consecutive year
Recognized as one of the top 100 performing community banks in 2024 with under $2 billion in assets in the US by American Banker
Ranalli added, "This record profitability has boosted book value to $18.00 per share as of June 30, 2025. We remain focused on effectively managing the factors that we can control to steadily increase book value per share, with the goal of delivering long-term value to our shareholders."
Net income for the quarter ended June 30, 2025, totaled $1.9 million, or $0.63 per common share, marking a significant increase from $1.7 million, or $0.56 per share, in the previous quarter, and up from $1.3 million, or $0.44 per common share, in the same quarter of 2024. The annualized return on average assets rose to 1.15% for the second quarter of 2025, compared to 0.89% in the second quarter of 2024. Similarly, the annualized return on average equity also improved, reaching 14.38%, up from 11.27% during the same period last year.
Total interest income for the second quarter of 2025 reached $10.3 million, reflecting a $527 thousand or 5% increase over the prior quarter. This growth was fueled by a 3% increase in loans during the second quarter, coupled with an overall increase in loan yields.
Total interest income increased by $1.3 million, marking a 14% increase from $9.0 million in the second quarter of 2024 to $10.3 million in the corresponding period of 2025. This growth was driven by a 9% year-over-year expansion in loans, complemented by an overall increase in loan yields.
Total interest income grew $2.6 million, or 15%, from $17.4 million for the six months ended June 30, 2024, to $20.0 million for the corresponding period in 2025. This growth was primarily driven by loan portfolio expansion and an increased rate environment, as previously noted.
Total interest expense rose 3% in the second quarter of 2025 compared to the prior quarter, primarily due to a 2 basis point increase in the cost of money market accounts and greater volumes of money market accounts and time deposits. This was partially offset by a 20 basis point reduction in the cost of time deposits. Additionally, interest expense on borrowings increased by 11%, driven by an increase in the average balance of FHLB borrowings during the second quarter.
Total interest expense increased by 7%, climbing from $4.0 million in the second quarter of 2024 to $4.3 million in the second quarter of 2025. This increase was primarily attributable to greater volumes of interest-bearing deposits, partially offset by a 19 basis point decrease in the cost of interest-bearing deposits year-over-year. Interest expense on subordinated debt grew by 45%, while interest expense on borrowings declined by 50% when compared to the second quarter of 2024.
Total interest expense for the six months ended June 30, 2025 increased by 10%, to $8.5 million, up from $7.8 million in the same period of 2024. Primary factors of this increase include greater volumes of interest-bearing deposits and subordinated debt. These increases were partially offset by a reduction in FHLB borrowings and declines in the cost of funds, including a 12 basis point decrease in cost of money market accounts, a 32 basis point drop in the cost of time deposits, and a 14 basis point decline in cost of FHLB borrowings.
In the second quarter of 2025, net interest income grew by $409 thousand, or 7%, compared to the previous quarter. The net interest margin also improved, rising to 3.72% from 3.60% in the first quarter of 2025. The overall yield on interest-earning assets climbed by 8 basis points, primarily driven by an 8 basis point increase in loan yields to 6.55% for the quarter. Meanwhile, the cost of interest-bearing deposits declined 3 basis points to 3.36%, primarily due to a 20 basis point drop in the cost of time deposit accounts. This decrease was partially offset by a 2 basis point rise in money market rates and higher volumes in those categories. As a result, the total cost of deposits fell by 3 basis points for the quarter, from 2.85% to 2.82%.
Net interest income for the six months ended June 30, 2025, totaled $11.5 million, reflecting a 19% improvement from $9.6 million for the same period in 2024. This growth was fueled by a $2.6 million, or 15%, increase in loan interest income and a $116 thousand, or 42%, decline in interest expense on borrowings, partially offset by an $829 thousand, or 11%, increase in deposit interest expense and an $83 thousand, or 45%, increase in interest expense on subordinated debt.
The provision for credit losses in the second quarter of 2025 was $130 thousand, down from $174 thousand in the prior quarter. A charge-off amounting to $47 thousand in the second quarter of 2025 had been previously reserved and, as such, did not affect the provision for the quarter. Year over year, the provision for credit losses fell $116 thousand from $246 thousand in the second quarter of 2024 to $130 thousand in the second quarter of 2025. The higher provision for credit losses in the second quarter of 2024 was due to a $204 thousand charge-off related to a single loan relationship.
As of June 30, 2025, the allowance for credit losses to total loans stood at 0.76%, down from 0.93% as of December 31, 2024. The reserve decreased due to a first-quarter charge-off of a previously reserved credit. Non-performing assets, consisting solely of non-performing loans, totaled $215 thousand as of June 30, 2025, down from $262 thousand at the end of the prior quarter. There were no non-performing assets as of June 30, 2024. Non-performing assets to total assets stood at 0.03% as of June 30, 2025, compared to 0.19% as of December 31, 2024, and 0.00% at June 30, 2024.
Non-interest income totaled $372 thousand in the second quarter of 2025, representing a 7% increase from $349 thousand in the previous quarter, and a 28% increase from $291 thousand in the same period of 2024. Notably, swap referral fee income contributed $108 thousand in the second quarter of 2025, up from $24 thousand in the first quarter of 2025 and $62 thousand in the second quarter of 2024. Gains on the sale of SBA loans totaled $26 thousand in the second quarter of 2025, compared to $87 thousand in the previous quarter, and none in the second quarter of 2024.
Non-interest income for the six months ended June 30, 2025, totaled $722 thousand, up from $687 thousand in the same period of 2024. Swap referral fee income was $132 thousand in the first half of 2025, compared to $245 thousand in the first half of 2024. Gains on the sale of SBA loans totaled $113 thousand in the first half of 2025, whereas no such gains were recorded in the prior year period.
Non-interest expenses increased $202 thousand, or 6%, in the second quarter of 2025 compared to the prior quarter. This increase was driven by higher salaries & benefits, professional fees, advertising, data processing, and other costs. However, these increases were partially offset by decreases in occupancy & equipment.
Non-interest expenses increased $455 thousand, or 14%, in the second quarter of 2025 compared to the same period in 2024. Increases in salaries & benefits, professional fees, advertising, data processing, and other costs were partially offset by a decrease in occupancy & equipment costs. The ratio of non-interest expenses to average assets was 2.29% in the second quarter of 2025, up from 2.25% in the previous quarter and up from 2.21% in the second quarter of the prior year.
Non-interest expenses for the six months ended June 30, 2025, were $7.4 million compared to $6.7 million for the same period in the prior year. The increase of $729 thousand, or 11%, was mostly attributed to increases in salaries & benefits associated with an expanded workforce, along with professional fees, advertising, data processing, and other expenses.
Total deposits increased by $25.8 million, or 4% during the second quarter of 2025, rising from $574.0 million as of March 31, 2025, to $599.7 million on June 30, 2025. Noninterest-bearing deposits rose by 6% in the second quarter, increasing $6.0 million to $99.4 million, up from $93.4 million in the previous quarter. Interest-bearing checking balances declined by $3.1 million, or 7%, to $43.6 million, down from $46.8 million in the prior quarter. Money market deposits grew $6.6 million, or 3%, rising from $250.1 million at the end of the first quarter of 2025, to $256.7 million by the close of the second quarter, while time deposits grew $16.3 million, or 9%, from $183.7 million on March 31, 2025, to $200.0 million on June 30, 2025.
Between June 30, 2024, and June 30, 2025, total deposits grew 12%, driven by increases in interest-bearing checking accounts, money markets, and time deposits. This growth was partially offset by a decline in noninterest-bearing deposits. As of June 30, 2025, approximately 81% of total deposits were insured or otherwise collateralized, down from 82% in the prior quarter.
The loan portfolio expanded by $19.8 million, representing a 3% increase, from $605.0 million on March 31, 2025, to $624.8 million on June 30, 2025, with strong growth in all loan categories. Year-to-date, total loans grew $26.3 million, or 4%, reflecting continued strength and diversification in lending activity.
Between June 30, 2024, and June 30, 2025, total loans expanded by 9%, with strong growth noted in all commercial loan categories.
The following table illustrates the composition of the loan portfolio:
Jun. 30,
2025
Dec. 31,
2024
Jun. 30,
2024
Commercial real estate
$ 487,283,100
$ 480,933,654
$ 457,437,009
Commercial construction
52,208,827
39,760,197
42,138,883
Commercial business
66,271,853
59,862,802
55,316,506
Consumer
19,037,313
17,907,914
18,697,974
Total loans
$ 624,801,093
$ 598,464,567
$ 573,590,372
Investment securities totaled $16.5 million on June 30, 2025, compared to $16.8 million on March 31, 2025. The held-to-maturity investment portfolio had a book value of $8.5 million and a fair market value of $7.5 million, resulting in an unrealized loss of $961 thousand, compared to an unrealized loss of $1.0 million as of March 31, 2025. After tax, this loss amounts to $759 thousand, representing approximately 1.4% of total equity as of June 30, 2025. The remainder of the investment portfolio was classified as available-for-sale, with a book value of $9.0 million and a fair value of $8.0 million, resulting in an unrealized loss of $970 thousand, compared to $1.1 million as of March 31, 2025. This unrealized loss, net of tax, totals $766 thousand and is reflected in accumulated other comprehensive loss on the balance sheet.
On August 12, 2024, the Company announced a stock repurchase ...
