EXTON, Pa., July 23, 2026 /PRNewswire/ -- First Resource Bancorp, Inc. (OTCQX: FRSB), reported strong financial performance for the second quarter ended June 30, 2026.
Lauren C. Ranalli, President and CEO, stated, "Our second quarter results highlight the strength and scalability of our franchise. As First Resource Bank continues to grow, we are seeing improvement across virtually every meaningful financial metric, including earnings, net interest margin, returns on assets and equity, book value per share, and credit quality. We believe long-term value creation is achieved through disciplined growth that strengthens profitability and capital alongside the balance sheet. The results reported this quarter reflect the continued execution of that strategy."
Second Quarter 2026 Highlights
- Net income of $2.8 million exceeded the prior year by 46% and the prior quarter by 13%
- Earnings per common share increased to $0.93, up 48% from the prior year
- Annualized return on average equity was 17.82%
- Annualized return on average assets was 1.36%
- Net interest margin expanded 29 basis points to 4.09%
- Efficiency ratio improved to 54.39% compared to 60.05% a year ago
- Net interest income increased 36% year over year
- Total loans grew 3% during the quarter, or 12% on an annualized basis
- Total deposits grew 4% during the quarter, or 15% on an annualized basis
- Noninterest-bearing deposits grew 5% during the quarter, or 18% on an annualized basis
- Book value per share increased 4% to $21.19
- Non-performing assets to total assets decreased to 0.10%
- Paid second quarterly cash dividend of $0.02 per common share
Earnings and Profitability
For the quarter ended June 30, 2026, net income totaled $2.8 million, compared to $1.9 million for the same period a year ago and $2.5 million for the prior quarter. Earnings per share increased to $0.93, up from $0.63 in the second quarter of 2025 and $0.82 in the first quarter of 2026.
For the six months ended June 30, 2026, net income totaled $5.3 million, compared to $3.6 million for the same period in 2025.
Annualized return on average assets rose to 1.36% for the second quarter of 2026, compared to 1.15% for the same period in 2025. Annualized return on average equity increased to 17.82%, up from 14.38% a year ago, reflecting improved operating leverage and balance sheet growth.
Net Interest Income and Net Interest Margin
Net interest income totaled $8.1 million for the second quarter of 2026, representing an increase of $755 thousand, or 10%, compared to the prior quarter and an increase of 36% compared to the same period a year ago. The net interest margin expanded to 4.09%, up from 3.80% in the first quarter of 2026 and 3.72% in the second quarter of 2025.
Ranalli added, "The net interest margin expansion experienced in the second quarter was partially due to a full recovery of past due interest income on a nonaccrual loan that was paid in full during the quarter. This was a positive outcome for both the margin and our credit quality metrics."
Net interest income totaled $15.4 million for the six months ended June 30, 2026, representing an increase of $4.0 million, or 35%, compared to the same period in 2025.
Total interest income increased to $12.8 million for the second quarter of 2026, representing a 6% increase from the prior quarter and a 24% increase compared to the second quarter of 2025. Quarterly growth was driven primarily by a 3% increase in average loan balances in addition to a 20 basis point increase in loan yields. Year-over-year growth reflected a 15% increase in average loan balances and overall higher loan yields.
Total interest income increased to $24.8 million for the six months ended June 30, 2026, representing a 24% increase from the same period in 2025.
Total interest expense for the second quarter of 2026 was relatively unchanged from the prior quarter, as higher money market balances offset lower time deposit balances and a 20 basis point decline in time deposit costs. Compared to the second quarter of 2025, total interest expense increased 8%, driven by higher volumes of interest-bearing deposits and borrowings, partially mitigated by lower deposit rates.
Total interest expense increased to $9.4 million for the six months ended June 30, 2026, representing a 10% increase from the same period in 2025.
Asset Quality, Provision for Credit Losses, and Allowance for Credit Losses on Loans
The provision for credit losses totaled $386 thousand for the second quarter of 2026, compared to $377 thousand in the first quarter of 2026 and $130 thousand in the second quarter of 2025. As of June 30, 2026, the allowance for credit losses represented 0.79% of total loans, compared to 0.73% at December 31, 2025.
Non-performing assets totaled $881 thousand, or 0.10% of total assets, at June 30, 2026, compared to $3.0 million, or 0.37% of total assets, at March 31, 2026. Non-performing assets represented 0.09% and 0.03% of total assets at December 31, 2025, and June 30, 2025, respectively. Two of the Company's three non-accrual loan relationships are fully secured by real estate collateral, while the third required a specific reserve of $127 thousand during the second quarter.
"We were pleased to meaningfully reduce non-performing assets during the second quarter through the successful resolution of a $2.3 million non-accrual commercial loan relationship, which was collected in full. Our lending strategy emphasizes well-structured loans typically supported by real estate collateral. This approach has historically helped limit credit losses and preserve capital when borrower challenges emerge. The positive resolution of this relationship is a tangible example of the effectiveness of our underwriting philosophy and disciplined approach to credit risk management," stated Ranalli.
Non-Interest Income and Expense
Non-interest income totaled $435 thousand for the quarter, representing a decrease of 20% from the prior quarter and an increase of 17% from the same period last year. Gains on the sale of SBA loans were $108 thousand, compared to $274 thousand in the prior quarter and $26 thousand in the second quarter of 2025. There was no swap referral fee income in the second or first quarters of 2026, compared to $108 thousand in the second quarter of 2025. Service charges increased 35% from the prior quarter, primarily due to late fees collected in connection with the previously discussed non-accrual loan resolution.
Non-interest income totaled $979 thousand for the six months ended June 30, 2026, representing a 36% increase compared to $722 thousand for the same period in 2025. Gains on sale of SBA loans were $383 thousand for the six months ended June 30, 2026, compared to $113 thousand for the same period in 2025. There was no swap referral fee income for the six months ended June 30, 2026, compared to $132 thousand in the same period of 2025.
Non-interest expenses increased 6% from the prior quarter and 22% compared to the second quarter of 2025, reflecting higher costs across most operating categories, including one-time renovation costs for our Exton branch which was built in 2014. The ratio of non-interest expense to average assets was 2.27%, compared to 2.21% in the prior quarter and 2.29% in the second quarter of 2025. The efficiency ratio was 54.39%, compared to 55.77% in the prior quarter and 60.05% in the second quarter of 2025.
Non-interest expenses increased 22% for the six months ended June 30, 2026, compared to the same period in 2025, reflecting higher costs across all operating categories.
Balance Sheet
Total deposits increased $27.4 million, or 4%, during the second quarter of 2026, reflecting a shift in deposit mix. Increases in non-interest-bearing deposits and money market balances were partially offset by decreases in interest-bearing checking and time deposits. On a year-over-year basis, total deposits increased $145.7 million, or 24%, driven by growth across all deposit categories except time deposits. Approximately 81% of total deposits were insured or collateralized as of June 30, 2026.
"We are encouraged by the continued growth of our customer deposit base during the second quarter, which supported 3% loan growth while enabling us to reduce non-core deposits by an additional $12.9 million," stated Ranalli.
Total loans increased $21.6 million, or 3%, during the second quarter of 2026 to $726.9 million, driven primarily by strong growth in commercial real estate loans. Compared to June 30, 2025, total loans increased $102.1 million, or 16%, driven by continued strength in commercial real estate and construction lending.
The following table illustrates the composition of the loan portfolio, net of unearned loan origination fees and costs:
June 30, | March 31, | December 31, | September 30, | June 30, | |||||
2026 | 2026 | 2025 | 2025 | 2025 | |||||
Commercial real estate | $553,196,932 | $531,440,586 | $525,443,319 | $ 516,826,603 | $487,283,100 | ||||
Commercial construction | 89,742,205 | 88,293,400 | 68,110,339 | 49,287,152 | 52,208,827 | ||||
Commercial business | 64,907,888 | 67,016,443 | 66,353,744 | 69,578,865 | 66,271,853 | ||||
Consumer | 19,007,086 | 18,541,133 | 18,548,853 | 19,645,273 | 19,037,313 | ||||
Total loans | $726,854,111 | $705,291,562 | $678,456,255 | $ 655,337,893 | $624,801,093 |
Investment securities totaled $31.1 million at June 30, 2026, compared to $31.8 million at March 31, 2026. The Company's held-to-maturity investment portfolio had an amortized cost of $9.0 million and a fair value of $8.4 million, resulting in an unrealized loss of $561 thousand, compared to an unrealized loss of $683 thousand as of March 31, 2026. On an after-tax basis, this unrealized loss totaled $443 thousand, representing approximately 0.7% of total stockholders' equity as of June 30, 2026.
The remainder of the Company's investment portfolio was classified as available-for-sale and had a book value of $23.2 million and a fair value of $22.1 million at June 30, 2026. This resulted in an unrealized loss of $1.1 million, compared to a similar amount at March 31, 2026. The after-tax unrealized loss of $880 thousand is reflected in accumulated other comprehensive loss within stockholders' equity.
Total assets increased 4% during the quarter, driven primarily by loan growth and higher cash balances associated with deposit growth.
Total stockholders' equity increased $2.7 million, or 4%, during the second quarter of 2026, rising from $61.0 million at March 31, 2026, to $63.8 million at June 30, 2026. This increase was driven primarily by net income earned during the quarter. During the quarter, the Company paid a cash dividend of $0.02 per common share. Book value per share increased by $0.89, or 4%, during the second quarter to $21.19 per share at June 30, 2026.
Selected Financial Data: | |||||||||
Consolidated Balance Sheets (unaudited) | |||||||||
June 30, | March 31, | December 31, | September 30, | June 30, | |||||
2026 | 2026 | 2025 | 2025 | 2025 | |||||
Assets: | |||||||||
Cash and due from banks | $ 62,564,468 | $ 52,953,190 | $ 90,422,400 | $ 29,590,356 | $ 34,917,531 | ||||
Time deposits at other banks | 100,000 | 100,000 | 100,000 | 100,000 | 100,000 | ||||
Investments | 31,068,571 | 31,759,063 | 27,634,611 | 19,065,497 | 16,473,298 | ||||
Loans receivable | 726,854,111 | 705,291,562 | 678,456,255 | 655,337,893 | 624,801,093 | ||||
Allowance for credit losses | (5,739,175) | (5,338,337) | (4,977,305) | (4,706,905) | (4,733,781) | ||||
Premises & equipment | 7,258,468 | 7,312,947 | 7,360,342 | 7,467,535 | 7,561,092 | ||||
Other assets | 18,862,663 | 18,923,756 | 18,359,879 | 18,030,984 | 18,141,421 | ||||
Total assets | $840,969,106 | $811,002,181 | $817,356,182 | $ 724,885,360 | $ 697,260,654 | ||||
Liabilities: | |||||||||
Noninterest-bearing deposits | $125,099,120 | $119,590,197 | $120,359,227 | $ 99,688,828 | $ 99,411,113 | ||||
Interest-bearing checking | 58,644,735 | 66,652,272 | 69,271,915 | 55,875,100 | 43,620,103 | ||||
Money market | 401,304,624 | 349,036,565 | 326,603,007 | 257,517,175 | 256,694,537 | ||||
Time deposits | 160,401,444 | 182,731,610 | 209,098,258 | 217,695,517 | 200,018,778 | ||||
Total deposits | 745,449,923 | 718,010,644 | 725,332,407 | 630,776,620 | 599,744,531 | ||||
Short term borrowings | - | - | - | 8,000,000 | 20,000,000 | ||||
Long term borrowings | 14,162,000 | 14,162,000 | 16,012,000 | 13,887,000 | 8,210,000 | ||||
Subordinated debt | 10,470,219 | 10,468,289 | 10,466,463 | 8,485,386 | 8,481,329 | ||||
Other liabilities | 7,124,273 | 7,338,138 | 6,777,883 | 7,320,262 | 6,830,863 | ||||
Total liabilities | 777,206,415 | 749,979,071 | 758,588,753 | 668,469,268 | 643,266,723 | ||||
Stockholders' Equity | |||||||||
Common stock | 3,100,773 | 3,100,773 | 3,100,773 | 3,100,773 | 3,100,773 | ||||
Additional paid-in capital | 19,916,183 | 19,892,023 | 19,863,401 | 19,857,275 | 19,855,264 | ||||
Treasury stock | (1,290,483) | (1,318,700) | (1,346,793) | (1,375,079) | (1,409,115) | ||||
Accumulated other comprehensive loss | (880,267) | (843,939) | (630,812) | (638,426) | (766,374) | ||||
Retained earnings | 42,916,485 | 40,192,953 | 37,780,860 | 35,471,549 | 33,213,383 | ||||
Total stockholders' equity | 63,762,691 | 61,023,110 | 58,767,429 | 56,416,092 | 53,993,931 | ||||
Total liabilities & stockholders' equity | $840,969,106 | $811,002,181 | $817,356,182 | $ 724,885,360 | $ 697,260,654 | ||||
Performance Statistics (unaudited) | |||||||||
Three Months Ended | |||||||||
June 30, | March 31, | December 31, | September 30, | June 30, | |||||
2026 | 2026 | 2025 | 2025 | 2025 | |||||
Per Share Data: | |||||||||
Earnings per share - basic | $ 0.93 | $ 0.82 | $ 0.78 | $ 0.75 | $ 0.63 | ||||
Earnings per share - diluted | $ 0.92 | $ 0.82 | $ 0.78 | $ 0.75 | $ 0.63 | ||||
Total shares outstanding | 3,008,592 | 3,006,555 | 3,004,527 | 3,002,485 | 3,000,028 | ||||
Weighted average shares outstanding | 3,007,673 | 3,005,613 | 3,003,726 | 3,001,454 | 2,999,200 | ||||
Book value per share | $ 21.19 | $ 20.30 | $ 19.56 | $ 18.79 | $ 18.00 | ||||
Performance Ratios: | |||||||||
Return on average assets * | 1.36 % | 1.24 % | 1.18 % | 1.29 % | 1.15 % | ||||
Return on average equity * | 17.82 % | 16.64 % | 15.87 % | 16.19 % | 14.38 % | ||||
Net interest margin | 4.09 % | 3.80 % | 3.77 % | 3.87 % | 3.72 % | ||||
Non-interest expenses* to average assets | 2.27 % | 2.21 % | 2.15 % | 2.21 % | 2.29 % | ||||
Efficiency ratio | 54.39 % | 55.77 % | 56.25 % | 56.11 % | 60.05 % | ||||
Asset Quality Ratios: | |||||||||
Non-performing loans to total loans | 0.12 % | 0.43 % | 0.11 % | 0.00 % | 0.03 % | ||||
Non-performing assets to total assets | 0.10 % | 0.37 % | 0.09 % | 0.00 % | 0.03 % | ||||
Allowance for credit losses to total loans | 0.79 % | 0.76 % | 0.73 % | 0.72 % | 0.76 % | ||||
* Annualized | |||||||||
Consolidated Income Statements (unaudited) | |||||||||
Three Months Ended | |||||||||
June 30, | March 31, | December 31, | September 30, | June 30, | |||||
2026 | 2026 | 2025 | 2025 | 2025 | |||||
Interest income: | |||||||||
Loans, including fees | $ 12,017,007 | $11,182,544 | $ 11,098,085 | $10,719,087 | $10,126,623 | ||||
Securities | 328,305 | 280,104 | 206,991 | 136,606 | 118,920 | ||||
Other | 439,133 | 560,555 | 599,764 | 138,292 | 28,289 | ||||
Total interest income | 12,784,445 | 12,023,203 | 11,904,840 | 10,993,985 | 10,273,832 | ||||
Interest expense: | |||||||||
Deposits | 4,405,473 | 4,395,446 | 4,520,311 | 4,231,636 | 4,111,978 | ||||
Borrowings | 119,399 | 122,789 | 125,620 | 77,963 | 85,822 | ||||
Subordinated debt | 162,556 | 162,556 | 137,058 | 134,682 | 134,681 | ||||
Total interest expense | 4,687,428 | 4,680,791 | 4,782,989 | 4,444,281 | 4,332,481 | ||||
Net interest income | 8,097,017 | 7,342,412 | 7,121,851 | 6,549,704 | 5,941,351 | ||||
Provision for credit losses | 386,010 | 377,167 | 368,729 | 189,087 | 130,416 | ||||
Net interest income after provision for credit losses | 7,711,007 | 6,965,245 | 6,753,122 | 6,360,617 | 5,810,935 | ||||
Non-interest income: | |||||||||
Service charges and other fees | 175,655 | 130,399 | 116,476 | 107,182 | 97,887 | ||||
BOLI income | 69,341 | 68,580 | 69,075 | 68,585 | 66,998 | ||||
Gain on sale of SBA loans | 108,308 | 274,352 | - | - | 26,326 | ||||
Swap referral fee income | - | - | 69,890 | 96,813 | 107,925 | ||||
Other | 81,640 | 70,899 | 81,363 | 76,913 | 73,275 | ||||
Total non-interest income | 434,944 | 544,230 | 336,804 | 349,493 | 372,411 | ||||
Non-interest expense | |||||||||
Salaries & benefits | 2,769,316 | 2,657,536 | 2,635,943 | 2,370,422 | 2,253,069 | ||||
Occupancy & equipment | 424,243 | 349,732 | 313,743 | 316,684 | 318,631 | ||||
Professional fees | 176,904 | 173,999 | 137,279 | 143,108 | 192,378 | ||||
Advertising | 124,258 | 126,442 | 87,011 | 104,356 | 113,923 | ||||
Data processing | 246,663 | 245,419 | 240,384 | 213,565 | 207,430 | ||||
FDIC premium expense | 180,310 | 191,252 | 166,763 | 135,382 | 128,019 | ||||
Other | 719,020 | 653,955 | 614,101 | 587,553 | 577,942 | ||||
Total non-interest expense | 4,640,714 | 4,398,335 | 4,195,224 | 3,871,070 | 3,791,392 | ||||
Income before federal income tax expense | 3,505,237 | 3,111,140 | 2,894,702 | 2,839,040 | 2,391,954 | ||||
Federal income tax expense | 721,573 | 638,956 | 585,391 | 580,874 | 488,827 | ||||
Net income | $ 2,783,664 | $ 2,472,184 | $ 2,309,311 | $ 2,258,166 | $ 1,903,127 | ||||
Consolidated Income Statements (unaudited) | |||
Six Months Ended | |||
June 30, | June 30, | ||
2026 | 2025 | ||
Interest income: | |||
Loans, including fees | $23,199,551 | $19,709,716 | |
Securities | 608,409 | 235,292 | |
Other | 999,688 | 75,710 | |
Total interest income | 24,807,648 | 20,020,718 | |
Interest expense: | |||
Deposits | 8,800,919 | 8,114,973 | |
Borrowings | 242,188 | 163,125 | |
Subordinated debt | 325,112 | 269,363 | |
Total interest expense | 9,368,219 | 8,547,461 | |
Net interest income | 15,439,429 | 11,473,257 | |
Provision for credit losses | 763,177 | 304,513 | |
Net interest income after provision for credit losses | 14,676,252 | 11,168,744 | |
Non-interest income: | |||
Service charges and other fees | 306,054 | 207,247 | |
BOLI income | 137,921 | 132,848 | |
Gain on sale of SBA loans | 382,660 | 113,186 | |
Swap referral fee income | - | 132,126 | |
Other | 152,539 | 136,118 | |
Total non-interest income | 979,174 | 721,525 | |
Non-interest expense | |||
Salaries & benefits | 5,426,852 | 4,380,106 | |
Occupancy & equipment | 773,975 | 653,329 | |
Professional fees | 350,903 | 342,554 | |
Advertising | 250,700 | 222,644 | |
Data processing | 492,082 | 411,922 | |
FDIC premium expense | 371,562 | 259,194 | |
Other | 1,372,975 | 1,111,101 | |
Total non-interest expense | 9,039,049 | 7,380,850 | |
Income before federal income tax expense | 6,616,377 | 4,509,419 | |
Federal income tax expense | 1,360,529 | 919,068 | |
Net income | $ 5,255,848 | $ 3,590,351 | |
About First Resource Bancorp, Inc.
First Resource Bancorp, Inc. is the holding company of First Resource Bank. First Resource Bank is a locally owned and operated Pennsylvania state-chartered bank with three full-service branches, serving the banking needs of businesses, professionals and individuals in the Delaware Valley. The Bank offers a full range of deposit and credit services with a high level of personalized service. First Resource Bank also offers a broad range of traditional financial services and products, competitively priced and delivered in a responsive manner to small businesses, professionals and residents in the local market. For additional information visit our website at www.firstresourcebank.com. Member FDIC.
This press release contains statements that are not of historical facts and may pertain to future operating results or events or management's expectations regarding those results or events. These are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities and Exchange Act of 1934. These forward-looking statements may include, but are not limited to, statements about our plans, objectives, expectations and intentions and other statements contained in this press release that are not historical facts. When used in this press release, the words "expects", "anticipates", "intends", "plans", "believes", "seeks", "estimates", or words of similar meaning, or future or conditional verbs, such as "will", "would", "should", "could", or "may" are generally intended to identify forward-looking statements. These forward-looking statements are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are either beyond our control or not reasonably capable of predicting at this time. In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change. Actual results may differ materially from the results discussed in these forward-looking statements. Readers of this press release are accordingly cautioned not to place undue reliance on forward-looking statements. First Resource Bank disclaims any intent or obligation to update publicly any of the forward-looking statements herein, whether in response to new information, future events or otherwise.
SOURCE First Resource Bank
