First Chester County Corporation (“First Chester”) (NasdaqCM:
FCEC), parent company of First National Bank of Chester County (the
“Bank”), today announced financial results for the quarter ended
March 31, 2010. First Chester has also filed its Quarterly Report
on Form 10-Q for the quarter ended March 31, 2010 with the
Securities and Exchange Commission (“SEC”).
The net loss from continuing operations was $604,000 for the
first quarter of 2010, or 10 cents per common share, compared to
net income of $139,000, or 2 cents per common share, in the quarter
ended March 31, 2009. The financial results in the first quarter
were negatively impacted by lower net interest income as a result
of a lower level of loans and leases compared to the prior year’s
quarter, increased professional fees due to the pending merger with
Tower Bancorp, Inc., as well as an increase in write-downs related
to other real estate owned. These were partially offset by lower
salaries and employee benefits due to cost reduction efforts and a
reduction on the provision for loan and lease losses compared to
the prior year’s quarter.
The net loss from discontinued operations, which includes
operations related to First Chester’s mortgage banking segment,
which was announced for sale during the first quarter, was $1.2
million for the quarter, or 19 cents per common share, compared to
net income of $3.2 million or 51 cents per common share, in the
quarter ended March 31, 2009.
The net loss attributable to First Chester was $1.8 million for
the quarter, or 28 cents per common share, compared to net income
of $3.3 million, or 53 cents per common share, in the quarter ended
March 31, 2009.
The following is a summary of key financial metrics during the
quarter:
- Total assets were $1.29 billion
at March 31, 2010, a decrease of 6.12% from $1.38 billion at
December 31, 2009.
- Gross loans and leases at
quarter end were $884.3 million, down 1.95% compared to $901.9
million at December 31, 2009.
- Total deposits were $1.07
billion, compared to $1.11 billion in the prior year’s
quarter.
- Net interest income was $8.3
million in the first quarter of 2010, compared to $9.0 million for
the same period in 2009.
- Net interest margin on earning
assets decreased to 2.97% for the three month period ending March
31, 2010, a decline of 42 basis points compared to 3.39% in the
first quarter of 2009.
- Wealth management and advisory
fees were $888,000, down 3.27% from $918,000 in the first quarter
of 2009.
- Non-interest expense was $9.6
million, compared to $9.8 million in last year’s first
quarter.
- Total nonperforming assets were
$48.1 million at March 31, 2010, compared to $45.8 million at
December 31, 2009. Non-performing loans and leases as a percentage
of total loans and leases was 5.11%, compared to 4.67% at December
31, 2009. Allowance for loan and lease losses as a percentage of
non-performing loans and leases was 49.72%, compared to 55.07% at
year end.
- As of March 31, 2010, the Bank
met the individual minimum capital ratio requirements for Tier 1
risk-based capital and total risk-based capital, but was below the
threshold for Tier 1 leverage. The Bank’s total risk-based capital
ratio was 12.48%, compared to regulatory requirement of 12%; its
Tier 1 capital ratio was 11.22%, compared to regulatory requirement
of 10%; and its Tier 1 Leverage ratio was 7.71%, compared to
regulatory requirement of 8%.
John A. Featherman, III, Chairman and CEO of First Chester,
stated, “First Chester is continuing to work through these
challenging economic times and take the necessary steps to serve
our customers and our communities. While we are disappointed in the
first quarter financial results, we believe that our pending merger
with Tower Bancorp, Inc. positions our franchise for the long term
and will be a positive step for our shareholders.”
Mr. Featherman added, “First Chester expects to file its
quarterly report for the second quarter of 2010 in the upcoming
weeks. At that time, all filings with the SEC will be current and
First Chester will be back in compliance with the Nasdaq Capital
Markets continued listing requirements.”
A copy of First Chester’s Quarterly Report on Form 10-Q for the
quarter ended March 31, 2010 can be obtained on our website,
www.1nbank.com. The SEC also maintains a website at www.sec.gov
that contains reports and other information regarding our
company.
About First Chester County Corporation
First Chester County Corporation and its wholly owned
subsidiary, First National Bank of Chester County, is a financial
institution with $1.3 billion in assets and with 23 branch offices
located in Chester, Delaware, Lancaster and Cumberland counties.
Founded in 1863, First National Bank of Chester County is the
eighth oldest national bank in the country. First National provides
quality financial services to individuals, businesses, government
entities, nonprofit organizations, and community service groups.
Wealth Management and Trust Services are provided through First
National Wealth Management, a division of First National Bank of
Chester County. For more information, visit www.1nbank.com.
Mortgage services are provided through American Home Bank, a
division of First National Bank of Chester County. American Home
Bank (AHB) has multiple national delivery channels in the retail
and wholesale mortgage arena as well as joint venture mortgage
partnerships with builders and systems-built manufacturers. For
more information visit www.bankahb.com.
Additional Information About the Merger
The proposed transaction will be submitted to the shareholders
of First Chester County Corporation (“First Chester”) and Tower
Bancorp (“Tower”) for their consideration and approval. In
connection with the proposed transaction, Tower will be filing with
the Securities and Exchange Commission (the “SEC”) a registration
statement on Form S-4 which will include a joint proxy
statement/prospectus and other relevant documents to be distributed
to the shareholders of Tower and First Chester. Investors are urged
to read the registration statement and the joint proxy
statement/prospectus regarding the proposed transaction when it
becomes available and any other relevant documents filed with the
SEC, as well as any amendments or supplements to those documents,
because they will contain important information. Investors will be
able to obtain a free copy of the joint proxy statement/prospectus,
as well as other flings containing information about Tower and
First Chester, free of charge from the SEC’s Internet site
(www.sec.gov), by contacting Tower Bancorp, Inc., 112 Market
Street, Harrisburg, Pennsylvania 17101, Attention: Brent Smith,
Investor Relations, telephone 717-724-4666 or by contacting First
Chester Financial Corporation, 9 North High Street, West Chester,
Pennsylvania 19381, Attention: John Stoddart, Investor Relations,
telephone 484-881-4141. INVESTORS SHOULD READ THE JOINT PROXY
STATEMENT/PROSPECTUS AND OTHER DOCUMENTS TO BE FILED WITH THE SEC
CAREFULLY BEFORE MAKING A DECISION CONCERNING THE TRANSACTION.
Tower, First Chester and their respective directors, executive
officers, and certain other members of management and employees may
be soliciting proxies from Tower and First Chester shareholders in
favor of the transaction. Information regarding the persons who
may, under the rules of the SEC, be considered participants in the
solicitation of the Tower and First Chester shareholders in
connection with the proposed transaction will be set forth in the
joint proxy statement/prospectus when it is filed with the SEC. You
can find information about Tower’s executive officers and directors
in its most recent proxy statement filed with the SEC, which is
available at the SEC’s Internet site (www.sec.gov). Information
about First Chester’s executive officers and directors is set forth
in its most recent Annual Report on Form 10-K filed with the SEC,
which is available at the SEC’s Internet site. You can also obtain
free copies of these documents from Tower or First Chester, as
appropriate, using the contact information above.
Safe Harbor for Forward-Looking Statements
This document may contain forward-looking statements as defined
in the Private Securities Litigation Reform Act of 1995. Actual
results and trends could differ materially from those set forth in
such statements due to various risks, uncertainties and other
factors. Such risks, uncertainties and other factors that could
cause actual results and experience to differ from those projected
include, but are not limited to, the following: ineffectiveness of
the company's business strategy due to changes in current or future
market conditions; the effects of competition, and of changes in
laws and regulations, including industry consolidation and
development of competing financial products and services; interest
rate movements; changes in credit quality; inability to achieve
merger-related synergies; difficulties in integrating distinct
business operations, including information technology difficulties;
volatilities in the securities markets; and deteriorating economic
conditions, and other risks and uncertainties, including those
detailed in Tower's and First Chester’s filings with the SEC.
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