October 18, 2013
Mars National Bank Announces Earnings
MARS, PENNSYLVANIA –Mars National Bank (OTCQB: MNBP) announced today that for the
nine months ended September 30, 2013, the Bank earned $1,099,000 as compared to $871,000 for the
same period in the prior year, an increase of $228,000 or 26.1%. The increase in earnings primarily
relates to growth in residential mortgage and commercial loan originations and the unanticipated
payoff of a large non-accrual loan which resulted in significant interest income being recognized
during the period. This increase was partially offset by generally flat interest rates, declining yields on
earning assets and higher regulatory and operating costs.
Net interest income increased by $130,000 or 1.8% for the nine months ended September 30, 2013 as
compared to the same period in 2012. This increase primarily relates to the significant income
recognized from the aforementioned payoff of a non-accrual loan, new and refinanced residential
mortgage and commercial loan originations and lower rates paid on deposit products. The increase in
net interest income was partially offset by continued maturities and calls of investment securities
reinvested at lower yields. Net interest spread and net interest margin equaled 3.02% and 3.11% at
September 30, 2013, respectively, as compared to 2.92% and 3.07%, respectively, in 2012. Loans
outstanding grew to $159.3 million or 10.0% at September 30, 2013 as compared to $144.8 at
December 31, 2012 while deposits increased to $317.2 million or 3.5% at September 30, 2013 from
$306.6 million at December 31, 2012.
There was no provision for loan losses recorded for the nine months ended September 30, 2013 and
$15,000 recorded for the same period in 2012. This was reflective of the Bank’s strong credit quality
position at September 30, 2013 with delinquencies at 0.41% of total loans and the allowance for loan
losses to loans coverage at 1.20%.
Non-interest income was higher by $636,000 or 43.7% for the nine months ended September 30, 2013.
This reflects gains on sales of residential mortgages originated for sale and higher investment services
Non-interest expense increased by $838,000 or 11.1% for the nine months ended September 30, 2013,
primarily related to increased personnel costs in the commercial lending, credit, and mortgage
origination departments, non-recurring expenses associated with the restructuring of the Bank’s
operations and retail banking functions and increased marketing activities.
The Bank recognized a tax benefit of $270,000 for the nine months ended September 30, 2013 as
compared to a tax expense of $15,000 for the same period in the prior year.
Following are additional highlights related to the financial performance of the Bank.
|For the Three Months Ended September 30,|
|(dollars in thousands, except per share data; unaudited)|
|Net interest income||$7,149||$7,019||1.8%|
|Provision for loan losses||-||15||n/m|
|Income tax (benefit) expense||-270||15||n/m|
|Earnings per share||$13.74||$10.89||26.1%|
|Return on average assets||0.42%||0.34%||8bps|
|Return on average equity||4.11%||3.14%||97bps|
|Net interest margin||3.11%||3.07%||4bps|
|At September 30, and December 31,|
|(dollars in millions, except per share data; unaudited)|
|Book value per share||$427.80||$461.50||-7.3%|
|Total risk-based capital ratio||18.97%||21.53%||-256bps|
|Allowance for loan losses/loans||1.20%||1.42%||-22bps|
|n/m – not meaningful|