Growth in deposits and assets in excess of 20 percent by the end of the first quarter of 2012, when compared to the same date last year, accompanied by an increase of net loans by a smaller 9 percent, combined to hold earnings growth to a modest 5.3 percent, according to figures released last week by First Evanston Bancorp, Inc.
The holding company for First Bank & Trust reported net income for the first quarter of the year of $962,000, compared with $914,000 for the first quarter of 2011. Meanwhile, total assets rose to $771.5 million from $640.8 million, a 20 percent increase, while deposits climbed to nearly $700 million from $574 million, or about 22 percent.
The bank’s loans-to-deposits ratio, an indicator of its ability to put its deposits to work, declined to 71 percent, compared with 79.3 percent a year earlier.
“This liquidity will allow the bank to grow in the months ahead,” wrote Robert R. Yohanan, managing director and chief executive officer in a letter to stockholders, “but, in the meantime, will put pressure on our net interest margin until those deposits can be employed by making good loans.”
On the positive side, the bank earned another 5-Star Rating from Bauer Financial as of Dec. 31, 2011, based on capital, loan portfolio quality, and earnings, Yohanan said.
To increase its competitive strength in the western suburbs, the bank is adding its ninth branch this month, in Naperville, to join its Itasca branch, aimed at increasing market share among middle market businesses.
While the bank has weathered the financial crisis “in an excellent manner,” Yohanan said, the bank is taking a cautious approach to the future.
“Competition for business has not only become intense,” he warned, “but it has also brought with it extremely low lending rates and deteriorating credit standards on the part of lending institutions. We have no desire to follow the crowd in this regard and will reserve our resources for the highest quality companies.”