Community banks like First Federal are constantly trying to differentiate ourselves in the consumer’s mind from the large money center banks, many of which consolidated with the former investment banks, and were the biggest users of government bailout money in recent years. The implementation of the Dodd Frank Act reforms drove the “too big to fail” banks to seek out new sources of fee income to replace fee sources that were reduced as a result of this new legislation. Their ideas of charging monthly fees for once free debit cards so outraged the public that their cries were actually heeded and the large banks reversed their course, something I personally thought they would not do.

The good news about all of this is that your bank, First Federal, actually benefited from the increasing consumers’ and small business owners’ awareness of the difference between money center and large regional banks and community banks. First Federal was able to significantly grow our deposits (up $53.4 million, or 11.3%) and make new loans (up $31.5 million, or 7.9%) and new investments (up $23.5 million, or 15.3%) while maintaining our strong capital position (we closed the year with over $70 million in capital); our interest rate margins remained stable despite significant consumer refinancing into the lower fixed rate environment created by the Federal Reserve’s actions; our non-performing loans, which have consistently been amongst the lowest in the banking industry, were reduced in half by year’s end to .36% of total loans. All of this led to First Federal of Bucks County achieving record earnings of $4.16 million (up from 2010’s record earnings of $3.81 million, or 9.6%).  

During 2011, we expanded our Commercial Lending team to five experienced lenders. This group is uniquely positioned to identify the best opportunities to take disgruntled businesses away from the large banks in our marketplace. Our strategy is to continue to increase our commercial loan and deposit base while continuing to be a premier residential and consumer lender in our marketplace. This strategy has been at the core of our improved profitability over the last few years.

In December, we opened our newest branch in Lower Makefield, our eleventh branch office. We now have a strong branch network throughout Lower Bucks County from which we have grown our deposit base over 48% since the end of 2007.

Another result of the Dodd Frank legislation is that our Federal regulator will now be the Office of the Comptroller of the Currency, commonly known as the OCC. This transition occurred this past summer and we do not anticipate any significant issues from this change.

Despite the sluggish economic environment, the Team Members of the Association are proud of our continued growth of our deposits and loans and our improved profitability during 2011. We will continue to execute our strategic plan which should result in a similarly profitable 2012. The Board of Directors, Officers, and Team Members of First Federal of Bucks County thank all of our members for their support and look forward to continuing to serve you in the future.