February 28, 2013
Mars National Bank Announces Earnings
MARS, PENNSYLVANIA – Mars National Bank (OTCQB: MNBP) announced today that for the twelve months ended December 31, 2012, the Bank earned $1.2 million as compared to $1.6 million for the same period in the prior year, a decrease of $407,000 or 24.9%. This decrease primarily relates to the low and generally flat interest rates, declining net interest margin, growing liquidity, a weak economy, limited commercial lending opportunities and higher regulatory and operating costs.
Net interest income decreased $757,000 or 7.6% as new and refinanced loans originated and continued maturities and calls of investment securities reinvested at lower yields, resulted in lower interest income, which was only partially offset by lower rates paid on deposit products. Net interest spread and net interest margin equaled 2.96% and 3.10% in 2012, respectively, as compared to 3.19% and 3.38%, respectively, in 2011. Loans outstanding declined to $144.8 million at December 31, 2012 as compared to $148.7 at December 31, 2011 while deposits grew to $306.6 million at December 31, 2012 from $303.6 million at December 31, 2011.
The provision for loan losses totaled $15,000 for the twelve months ended December 31, 2012 as compared to $110,000 for the same period in 2011. This was reflective of the Bank’s strong credit quality position at December 31, 2012 with delinquencies at 0.23% of total loans and the allowance for loan losses to loans coverage at 1.42%.
Non-interest income was higher by $235,000 for the twelve months ended December 31, 2012. This reflects higher investment services income and gains on sales of residential mortgages originated for sale. Also, included in non-interest income were recognized gains on sale of available for sale securities of $390,000 in 2012 as compared to gains of $267,000 for the twelve months ended December 31, 2011.
Non-interest expense increased $113,000 or 1.1% for the twelve months ended December 31, 2012, primarily related to increased salaries and professional consulting fees (interim commercial lending and credit functions). These expenses were offset by the active management of occupancy, equipment and overhead related costs.
The Bank recognized a tax benefit of $105,000 for the twelve months ended December 31, 2012 as compared to a tax expense of $28,000 for the same period in the prior year.
Following are additional highlights related to the financial performance of the Bank.
|For the Year||2012||2011||Change|
|(dollars in thousands, except per share data)|
|Net interest income||$9,268||$10,025||-7.60%|
|Provision for loan losses||15||110||-86.40%|
|Income tax (benefit) expense||-105||28||-475.00%|
|Earnings per share||$15.36||$20.45||-24.90%|
|Return on average assets||0.36%||0.49%||-13bps|
|Return on average equity||3.32%||4.53%||-121bps|
|Net interest margin||3.10%||3.38%||-28bps|
|At December 31,|
|(dollars in millions, except per share data)|
|Book value per share||$461.50||$465.87||-0.90%|
|Total risk-based capital ratio||21.53%||20.25%||128bps|
|Allowance for loan losses/loans||1.42%||1.38%||4bps|