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Liberty Bell Bank Reports First Quarter 2013 Results of Operations



  Liberty Bell Bank Reports First Quarter 2013 Results of Operations

Business Wire

MARLTON, N.J. -- April 16, 2013

Liberty Bell Bank (OTCQB:LBBB) today reported net income of $202,000 or $0.06
per diluted share for the three months ended March 31, 2013, compared to net
income of $35,000 or $0.01 per diluted share for the same period in 2012, an
increase of $167,000 or $0.05 per diluted share. The increased earnings are
primarily the result of gains on the sale of securities available for sale of
$156,000. At March 31, 2013, the Bank remains well capitalized by all
regulatory measures.

In addition to gains on the sale of securities available for sale, the
increase in earnings also was due to a $67,000 decrease in total non-interest
expense, a $51,000 decrease in the provision for loan losses, a $12,000
decrease in write-downs on other real estate owned and a $3,000 decrease in
income tax expense. These positive variances were partially offset by reduced
net interest income of $94,000 and a decrease in service charges on deposit
accounts and other income of $28,000.

The decrease of $94,000 in net interest income for the three months ended
March 31, 2013 as compared to the three months ended March 31, 2012, was due
to a $219,000 decrease in interest and dividend income partially offset by a
$125,000 reduction in interest expense, primarily from a decrease of interest
on deposits. The decrease in interest and dividend income was due primarily to
a decrease of $271,000 in interest and fees from loans, offset partially by an
increase of $54,000 in interest on securities available for sale.

The decrease of $271,000 in interest and fees from loans was due primarily to
a 46 basis point reduction of the yield from the loan portfolio from 5.77% to
5.31%. In addition, the average loan balance outstanding for the first three
months of 2013 as compared to the first three months of 2012 decreased by $8.5
million. The increase of $54,000 in interest on securities available for sale
was due primarily to an increase in the average balance outstanding from $13.3
million to $26.3 million.

Net interest margin for the first quarter of 2013 was 3.51%, a decrease of
0.26% from the 3.77% net interest margin for the first quarter of 2012. The
margin decrease was mainly the result of a 0.59% lower yield from
interest-earning assets partially offset by a 0.35% reduction in the rate paid
for interest-bearing deposits.

Total assets at March 31, 2013 were $172.2 million, representing a decrease of
$2.1 million from $174.3 million at December 31, 2012. The decrease was due
primarily to cash and cash equivalents, which decreased $6.9 million and net
loans which decreased $2.6 million from December 31, 2012. These decreases
were partially offset by investments which increased $6.9 million and other
assets which increased $297,000. Other real estate owned increased $272,000
from $5.6 million at December 31, 2012 to $5.9 million at March 31, 2013.

Total deposits decreased $2.1 million to $152.7 million at March 31, 2013 from
$154.8 million at December 31, 2012. The decrease was primarily due to a $2.4
million decrease in interest-bearing accounts offset by a $374,000 increase in
non-interest bearing accounts.

The Bank continues to increase non-interest bearing deposit accounts. Total
non-interest bearing deposit accounts at March 31, 2013 were $15.8 million as
compared to $15.4 million at December 31, 2012. The growth in non-interest
bearing deposits was from the Bank’s local area market.

The decrease in interest-bearing deposit accounts of $2.4 million was due
primarily to a decrease in certificates of deposit, our highest cost deposits,
which decreased $3.0 million from $68.8 million at December 31, 2012 to $65.8
million at March 31, 2013.

At March 31, 2013, our criticized/classified assets totaled $8.6 million,
substantially the same as at December 31, 2012, but a $7.0 million decrease
from $15.6 million at December 31, 2011. Other real estate owned increased
$272,000 from $5.6 million at December 31, 2012 to $5.9 million at March 31,
2013. Criticized/classified assets plus other real estate owned totaled $14.5
million at March 31, 2013 as compared to $14.2 million at December 31, 2012,
and $20.2 million at December 31, 2011.

“We’re seeing positive activity that is giving us reasonable and justifiable
optimism that we will see further reducing of problem loans and assets in
2013,” said CEO Kevin Kutcher, adding, “While we believe that our current
valuations reflect market values, we may realize justifiable losses as we
resolve remaining problem assets. At the same time we’re seeing signs of
increased loan demand that should translate favorably in 2013. We’re
continuing to improve our deposit mix by increasing our lower and non-interest
bearing checking based accounts. Three years ago at this time non-interest
checking represented approximately 5%, or $8 million, of total deposits, where
today that has doubled to 10% of total deposits and is growing.”

CFO Ben Watts added, “The continuing low interest rate environment impacts our
overall loan portfolio yield. Fortunately we do not generally make fixed rate
long term loans. Even though new loan rates are lower than the rates on some
loans paying off and while some of our variable rate loans come up for
re-pricing while rates are low, when market rates begin to increase overtime,
we will see the loan portfolio yield also rise. Not making long term fixed
rate loans and increasing our core lower cost funding through improved deposit
mix will translate favorable as rates eventually rise, as will continuing
decreases in our problem loans and assets.”

Separately, the bank announced that it is not renewing the lease of its Mount
Laurel office. “After carefully considering all relevant factors, we elected
to not renew the lease of our Mount Laurel office and have announced its
closure effective June 15, 2013,” said CEO Kevin Kutcher, who added, “We
notified all affected Mount Laurel customers in early March and, as we
anticipated, we’ve had minimal negative response. While we’ve done very well
growing that office since signing the lease in 2008, the economic realities of
the recent recession, advances in electronic banking access and the close
proximity of our headquarters office led us to this determination. We
anticipate little depositor/customer loss.” The bank also projects that it
will realize meaningful cost efficiencies and favorable bottom line results
related to the branch closure. In conclusion CEO Kutcher said, “We are already
talking about where the new fourth office will be.”

Set forth below is certain selected balance sheet and income statement data at
March 31, 2013 and December 31, 2012 and for the three months ended March 31,
2013 and 2012.

 
SELECTED BALANCE SHEET DATA
(Unaudited, in thousands)
                                March 31,   December 31,
                                2013        2012
                                             
Cash and cash equivalents       $12,405     $19,319
Investment securities           28,573      21,655
Net loans receivable            119,923     122,508
Total assets                    172,173     174,328
Deposits                        152,735     154,811
Shareholders’ equity            11,482      11,572
                                             

 
SELECTED INCOME STATEMENT DATA
(Unaudited, in thousands except per share data)
                                                
                                 Quarter ended   Quarter ended
                                 March 31,       March 31,
                                 2013            2012
                                                  
Net interest income              $1,360          $1,454
Provision for loan losses        9               60
Gain on sale of securities       156             0
Other Non-interest income        88              116
Loss on write-down of ORE        1               13
Other expenses                   1,386           1,453
Provision for income taxes       6               9
Net income                       $202            $35
                                                  
Earnings per share:
Basic                            $0.06           $0.01
Diluted                          $0.06           $0.01
Capital Ratios:
Leverage Capital                 6.65%           8.05%
Total risk based capital         10.26%          11.31%
                                                  

Liberty Bell Bank is a full-service, state-chartered commercial bank, whose
deposits are insured by the Federal Deposit Insurance Corporation (FDIC). The
Bank provides diversified financial products through three locations in
Burlington County, New Jersey and one location in Camden County, New Jersey.

The Bank may from time to time make written or oral “forward-looking
statements”, including statements contained in this release. Such statements
are not historical facts and include expressions about management's confidence
and strategies and management's current views and expectations about new and
existing programs and products, relationships, opportunities, taxation,
technology and market conditions. Actual results may differ materially from
such forward-looking statements, and no undue reliance should be placed on any
forward-looking statement. Factors that may cause results to differ materially
from such forward-looking statements include, but are not limited to,
unanticipated changes in the financial markets and the direction of interest
rates; volatility in earnings due to certain financial assets and liabilities
held at fair value; stronger competition from banks, other financial
institutions and other companies; insufficient allowance for credit losses; a
higher level of net loan charge-offs and delinquencies than anticipated;
material adverse changes in the Bank’s operations or earnings; a decline in
the economy in our primary market areas; changes in relationships with major
customers; changes in effective income tax rates; higher or lower cash flow
levels than anticipated; inability to hire or retain qualified employees; a
decline in the levels of deposits or loss of alternate funding sources; a
decrease in loan origination volume; changes in laws and regulations,
including issues related to compliance with anti-money laundering and the bank
secrecy act laws; adoption, interpretation and implementation of new or
pre-existing accounting pronouncements; operational risks, including the risk
of fraud by employees or outsiders; the inability to successfully implement
new lines of business or new products and services .and other factors, many of
which are beyond the Bank's control. The words “may”, “could”, “should”,
“would”, “believe”, “anticipate”, “estimate”, “expect”, “intend”, “plan”, and
similar expressions are intended to identify forward-looking statements. All
such statements are made in good faith by the Bank pursuant to the “safe
harbor” provisions of the Private Securities Litigation Reform Act of 1995.
The Bank does not undertake to update any forward-looking statement, whether
written or oral, that may be made from time to time by or on behalf of the
Bank.

Contact:

Liberty Bell Bank
Benjamin F. Watts, 856-830-1135
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