1st Colonial Bancorp Reports a Year-to-Date Profit of $449,000

Gerry Banmiller, President and Chief Executive Officer, commented, "Although these year-to-date earnings for 2009 are lower than the prior year, they must be considered in the context of several factors: First, our core earnings actually increased in 2009, as we had a one-time gain from insurance proceeds of $232,000 in 2008. Absent this one-time gain, our pre-tax net income for the nine months ended September 30, 2009 of $461,000 was $15,000 greater than our adjusted pre-tax income of $446,000 for the nine months ended September 30, 2008. Second, we achieved this increase in our core earnings despite the increased expenses that are concomitant with a troubled economy, such as an increased provision for loan losses, the FDIC special assessment imposed on all banks, and legal expenses inherent with enforcing loan contracts. We are pleased with our deposit and loan growth, which is a function of the individual efforts of our officers as well as increased advertising in newspaper and radio."

At September 30, 2009, 1st Colonial also reported total assets of $257.4 million compared to $225.6 million at September 30, 2008; total loans were $160.5 million, an increase of $19.1 million from September 30, 2008. Deposits were $221.1 million, an increase of $27.1 million from September 30, 2008.

1st Colonial's net interest income of $5.2 million for the nine months ended September 30, 2009 was $572,000, or 12.3%, higher than the net interest income of $4.7 million for the nine month period ended September 30, 2008. The provision for loan losses was $807,000 compared to $704,000 for the prior period.

Non-interest income increased $194,000 from the comparable period in 2008 due to an increase in income from our new Residential Lending Division. Fees from the sale of residential mortgage loans increased by $445,000 in the first nine months of 2009 compared to the same period in 2008. Non-interest income in the third quarter of 2008 was aided by the onetime insurance proceeds benefit of $232,000 mentioned above. Non-interest expense also increased $880,000 or 22.0% from the comparable period in 2008. Salaries and benefits accounted for $491,000 of the increase due to the addition of our residential lending department and general salary and benefit increases. FDIC assessments increased by $180,000; occupancy and equipment expense increased by $54,000 due to our acquiring additional space in our administrative headquarters to accommodate our growth; and professional fees increased by $74,000.

The company also reported that its net income for the three months ended September 30, 2009 was $109,000, a decrease of $33,000 from the comparable period ended September 30, 2008. Net income from the comparable period ended September 30, 2008 included the one time insurance proceeds benefit of $232,000. Additionally, diluted earnings per share decreased from $0.05 for the quarter ended September 30, 2008 to $0.03 for the quarter ended September 30, 2009. The earnings per share numbers stated herein for all periods have been adjusted to reflect the 5% stock dividends paid on April 15, 2009 and April 15, 2008.

Highlights as of September 30, 2009 and September 30, 2008, and comparing the nine and three months ended September 30, 2009 and the nine and three months ended September 30, 2008, respectively (all unaudited), include the following (dollars in thousands, except per share data):

                             At                  At                  $ increase/  % increase/
                             September 30, 2009  September 30, 2008  (decrease)   (decrease)
Total assets                 $ 257,371           $ 225,608           $ 31,763     14.1%
Total loans                  160,467             141,329             19,138       13.5%
Total deposits               221,107             194,004             27,103       14.0%
Shareholders' equity         22,984              21,745              1,239        5.7%
                             For the nine months ended
                                                                     $ increase/  % increase/
                             September 30, 2009  September 30, 2008  (decrease)   (decrease)
Net interest income          $ 5,240             $ 4,668             $ 572        12.3%
Provision for loan losses    807                 704                 103          14.6%
Other income                 902                 708                 194          27.4%
Non-interest expense         4,874               3,994               880          22.0%
Tax benefit (expense)        (12)                (25)                (13)         -52.0%
Net income                   449                 653                 (204)        -31.2%
Earnings per share, diluted  $ 0.15              $ 0.22              $ (0.07)     -31.8%
                             For the three months ended
                                                                     $ increase/  % increase/
                             September 30, 2009  September 30, 2008  (decrease)   (decrease)
Net interest income          $ 1,812             $ 1,614             $ 198        12.3%
Provision for loan losses    306                 621                 (315)        -50.7%
Other income                 322                 415                 (93)         -22.4%
Non-interest expense         1,697               1,385               312          22.5%
Tax benefit (expense)        (22)                119                 141          -118.5%
Net income                   109                 142                 (33)         -23.2%
Earnings per share, diluted  $ 0.03              $ 0.05              $ (0.02)     -40.0%

1st Colonial National Bank, the subsidiary of 1st Colonial Bancorp, provides a range of business and consumer financial services, placing emphasis on customer service, access to decision makers and quick turnaround on credit applications. Headquartered in Collingswood, New Jersey, the Bank also has branches in the New Jersey communities of Westville and Cinnaminson. To learn more, call (856) 858-8402 or visit www.1stcolonial.com.

This Release contains forward-looking statements that are not historical facts and include statements about management's strategies and expectations about our business. There are risks and uncertainties that may cause our actual results and performance to be materially different from results indicated by these forward-looking statements. Factors that might cause a difference include economic conditions; lack of liquidity; changes in interest rates, changes in FDIC assessments, deposit flows, loan demand, and real estate values; competition; changes in accounting principles, policies or guidelines; changes in laws or regulation; new technology and other factors affecting our operations, pricing, products and services.

SOURCE: 1st Colonial Bancorp, Inc.

1st Colonial Bancorp 
Gerry Banmiller, 856-858-8402