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First Connecticut Bancorp, Inc. Reports Second Quarter 2015 Earnings of $0.23 Earnings Per Share

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FARMINGTON, Conn., July 22, 2015 (GLOBE NEWSWIRE) -- First Connecticut Bancorp, Inc. (the "Company") (NASDAQ: FBNK), the holding company for Farmington Bank (the "Bank"), reported net income of $3.5 million, or $0.23 diluted earnings per share for the quarter ended June 30, 2015 compared to net income of $2.2 million, or $0.14 diluted earnings per share for the quarter ended June 30, 2014.

Net income on a core earnings basis was $2.8 million, or $0.19 diluted core earnings per share for the quarter ended June 30, 2015.  Core earnings exclude non-recurring items.  The significant non-recurring items during the quarter ended June 30, 2015 were a $1.3 million gain on sale of investments related to the sale of a trust preferred security and $258,000 in stock compensation costs related to two directors retiring during the quarter.

"Our positive results reflect the impact of our significant organic growth strategy and ongoing focus on enhancing tangible book value and earnings per share. Over the past several quarters our double digit loan growth has produced a diversified portfolio with flexibility to make future structural changes and one that remains asset sensitive in a changing interest rate environment" stated John J. Patrick Jr., First Connecticut Bancorp's Chairman, President and CEO.

Financial Highlights

  • Net interest income increased $724,000 to $17.1 million in the second quarter of 2015 compared to the linked quarter and increased $1.5 million or 10% compared to the second quarter of 2014.
  • Strong organic loan growth continued during the quarter as total loans increased $81.6 million to $2.3 billion at June 30, 2015 and increased $338.8 million or 17% from a year ago. 
  • Overall deposits remained flat at $1.9 billion in the second quarter of 2015 compared to the linked quarter and increased $247.3 million or 15% from a year ago. 
  • Checking accounts grew by 3.3% or 1,517 net new accounts in the second quarter of 2015 and by 12.1% or 5,169 net new accounts from a year ago.
  • Noninterest expense to average assets was 2.43% in the second quarter of 2015 compared to 2.38% in the linked quarter and 2.60% in the second quarter of 2014.
  • Tangible book value per share is $15.01 compared to $14.82 on a linked quarter basis and $14.39 at June 30, 2014.
  • Asset quality improved as loan delinquencies 30 days and greater decreased to 0.58% of total loans at June 30, 2015 compared to 0.64% at March 31, 2015 and 0.78% at June 30, 2014.  Non-accrual loans represented 0.57% of total loans compared to 0.64% of total loans on a linked quarter basis and 0.75% of total loans at June 30, 2014. 
  • The allowance for loan losses represented 0.86% of total loans at June 30, 2015 compared to 0.87% at March 31, 2015 and 0.92% at June 30, 2014. 
  • The Company paid a cash dividend of $0.05 per share on June 11, 2015. This marks the fifteenth consecutive quarter the Company has paid a dividend since it became a public company on June 29, 2011.

Second quarter 2015 compared with first quarter 2015

Net interest income

  • Net interest income increased $724,000 to $17.1 million in the second quarter of 2015 compared to the linked quarter due primarily to a $73.6 million increase in the average net loan balance and a $92,000 decrease in interest expense.
  • Net interest margin increased 3 basis points to 2.86% in the second quarter of 2015 compared to 2.83% in the linked quarter due to a decrease in the cost of interest-bearing liabilities. 
  • The cost of interest-bearing liabilities decreased 4 basis points to 64 basis points in the second quarter of 2015 compared to 68 basis points in the linked quarter primarily due to expiring money market promotions.

Provision for loan losses

  • Provision for loan losses was $663,000 for the second quarter of 2015 compared to $615,000 for the linked quarter.  
  • Net charge-offs in the quarter were $314,000 or 0.06% to average loans (annualized) compared to $343,000 or 0.06% to average loans (annualized) in the linked quarter.
  • The allowance for loan losses represented 0.86% of total loans at June 30, 2015 compared to 0.87% at March 31, 2015. 

Noninterest income

  • Total noninterest income increased $1.4 million to $4.1 million in the second quarter of 2015 compared to the linked quarter primarily due to a $977,000 increase in gain on sale of investments and a $352,000 increase in other noninterest income. 
  • Gain on sale of investments was $1.3 million in the second quarter of 2015 due to the sale of a trust preferred security.
  • Other income increased $352,000 to $528,000 in the second quarter of 2015 compared to the linked quarter primarily due to a $485,000 increase in swap fees offset by a decrease in mortgage banking derivatives income.

Noninterest expense

  • Noninterest expense increased $660,000 in the second quarter of 2015 to $15.6 million compared to the linked quarter primarily due to a $245,000 increase in salaries and employee benefits and other operating expenses.  
  • Other operating expenses increased $354,000 primarily due to $258,000 in non-recurring stock compensation costs related to two directors retiring during the quarter and a $149,000 loss on a credit sharing arrangement on a sold loan.

Income tax expense

  • Income tax expense was $1.4 million in the second quarter of 2015 compared to $976,000 in the linked quarter.  The increase in income tax expense in the second quarter was primarily due to a $1.4 million increase in income before taxes.

Second quarter 2015 compared with second quarter 2014

Net interest income

  • Net interest income increased $1.5 million to $17.1 million in the second quarter of 2015 compared to the prior year quarter primarily due to a $333.5 million increase in the average net loan balance offset by a $775,000 increase in interest expense.
  • Net interest margin decreased to 2.86% in the second quarter of 2015 compared to 3.02% in the second quarter of 2014 primarily due to a 14 basis point decrease in the yield on loans and a 7 basis point increase in the cost of interest-bearing liabilities.
  • The cost of interest-bearing liabilities increased to 64 basis points in the second quarter of 2015 compared to 57 basis points in the prior year quarter primarily due to certificate of deposit promotions and entering the brokered deposit market.

Provision for loan losses

  • Provision for loan losses was $663,000 for the second quarter of 2015 compared to $410,000 for the prior year quarter. 
  • Net charge-offs in the quarter were $314,000 or 0.06% to average loans (annualized) compared to $129,000 or 0.03% to average loans (annualized) in the prior year quarter.
  • The allowance for loan losses represented 0.86% of total loans at June 30, 2015 compared to 0.92% at June 30, 2014. 

Noninterest income

  • Total noninterest income increased $2.0 million to $4.1 million in the second quarter of 2015 compared to the prior year quarter due to an $183,000 increase in fees for customer services, a $1.3 million gain on sale of investments and a $485,000 increase in swap fees.

Noninterest expense

  • Noninterest expense increased $1.3 million in the second quarter of 2015 to $15.6 million compared to the prior year quarter primarily due to an increase in salaries and employee benefits and other operating expenses.
  • Salaries and employee benefits increased $397,000 primarily due to costs associated with our expansion into western Massachusetts and growth driven staff increases in our compliance areas.
  • Other operating expenses increased $806,000 primarily due to $258,000 in non-recurring stock compensation costs related to two directors retiring during the quarter, $149,000 loss on a credit sharing arrangement on a sold loan and a general increase in other costs to support the Bank's operations.

Income tax expense

  • Income tax expense was $1.4 million in the second quarter of 2015 compared to $776,000 in the prior year quarter.  The increase in income tax expense in the second quarter was primarily due to a $1.9 million increase in income before taxes.

June 30, 2015 compared to June 30, 2014

Financial Condition

  • Total assets increased $358.5 million or 16% at June 30, 2015 to $2.6 billion compared to $2.3 billion at June 30, 2014, largely reflecting an increase in loans.
  • Our investment portfolio totaled $178.2 million at June 30, 2015 compared to $173.5 million at June 30, 2014, an increase of $4.7 million.
  • Net loans increased $337.9 million at June 30, 2015 to $2.3 billion compared to $1.9 billion at June 30, 2014 due to our continued focus on commercial and residential lending.
  • Deposits increased $247.3 million at June 30, 2015 to $1.9 billion compared to $1.6 billion at June 30, 2014 primarily due to increases in municipal deposits, demand deposits and time deposits accounts as we continue to develop and grow relationships in the geographical areas we serve.  We entered the brokered deposit market during the quarter with balances totaling $52.2 million at June 30, 2015.
  • Federal Home Loan Bank of Boston advances increased $109.7 million to $400.7 million at June 30, 2015 compared to $291.0 million at June 30, 2014.  Advances were used to support loan and securities growth.

Asset Quality

  • At June 30, 2015, the allowance for loan losses represented 0.86% of total loans and 150.94% of non-accrual loans, compared to 0.92% of total loans and 122.25% of non-accrual loans at June 30, 2014.
  • Loan delinquencies 30 days and greater decreased to 0.58% of total loans at June 30, 2015 compared to 0.78% of total loans at June 30, 2014.
  • Non-accrual loans represented 0.57% of total loans at June 30, 2015 compared to 0.75% of total loans at June 30, 2014.
  • Net charge-offs in the quarter were $314,000 or 0.06% to average loans (annualized) compared to $129,000 or 0.03% to average loans (annualized) in the prior year quarter.

Capital and Liquidity

  • The Company remained well-capitalized with an estimated total capital to risk-weighted asset ratio of 13.11% at June 30, 2015. 
  • Tangible book value per share was $15.01 compared to $14.82 on a linked quarter basis and $14.39 at June 30, 2014.
  • During the second quarter of 2015, the Company repurchased 115,117 shares of common stock at an average price per share of $14.81 at a total cost of $1.7 million.  Repurchased shares are held as treasury stock and will be available for general corporate purposes.  The Company has 780,334 shares remaining to repurchase at June 30, 2015 from prior regulatory approval.
  • At June 30, 2015, the Company continued to have adequate liquidity including significant unused borrowing capacity at the Federal Home Loan Bank of Boston and the Federal Reserve Bank, as well as access to funding through brokered deposits.

About First Connecticut Bancorp, Inc.

First Connecticut Bancorp, Inc. (NASDAQ: FBNK) is a Maryland-chartered stock holding company that wholly owns Farmington Bank. Farmington Bank is a full-service, community bank with 22 branch locations throughout central Connecticut, offering commercial and residential lending as well as wealth management services in Connecticut and western Massachusetts. Established in 1851, Farmington Bank is a diversified consumer and commercial bank with an ongoing commitment to contribute to the betterment of the communities in our region. For more information regarding the Bank's products and services and for First Connecticut Bancorp, Inc. investor relations information, please visit www.farmingtonbankct.com.

Conference Call

First Connecticut will host a conference call on Thursday, July 23, 2015 at 11:00am Eastern Time to discuss second quarter results.  Those wishing to participate in the call may dial-in to the call at 1-888-336-7151.  The Canada dial-in number is 1-855-669-9657 and the international dial-in number is 1-412-902-4177.  A webcast of the call will be available on the Investor Relations Section of the Farmington Bank website for an extended period of time.

Forward Looking Statements

In addition to historical information, this earnings release may contain forward-looking statements for purposes of applicable securities laws. Any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements. Such forward-looking statements may or may not include words such as "believe," "expect," "anticipate," "estimate," and "intend" or future or conditional verbs such as "will," "would," "should," "could," or "may." Forward-looking statements are subject to numerous assumptions, risks and uncertainties. There are a number of important factors described in documents previously filed by the Company with the Securities and Exchange Commission, and other factors that could cause the Company's actual results to differ materially from those contemplated by such forward-looking statements. The Company undertakes no obligation to publicly release the results of any revisions to those forward-looking statements which may be made to reflect events or circumstances after the date of this release or to reflect the occurrence of unanticipated events.

Non-GAAP Financial Measures

In addition to evaluating the Company's financial performance in accordance with U.S. generally accepted accounting principles ("GAAP"), management routinely supplements their evaluation with an analysis of certain non-GAAP financial measures, such as core net income, the efficiency ratio and tangible book value per share. A reconciliation to the most directly comparable GAAP financial measure; net income in the case of core net income and the efficiency ratio and stockholders' equity in the case of tangible book value per share, appears in tabular form in the accompanying Reconciliation of Non-GAAP Financial Measures table.

We believe that providing certain non-GAAP financial measures provides investors with information useful in understanding our financial performance, our performance trends and financial position. Specifically, we provide measures based on what we believe are our operating earnings on a consistent basis and exclude non-core operating items which affect the GAAP reporting of results of operations. The Company believes that core net income is useful for both investors and management to understand the effects of items that are non-recurring and infrequent in nature. The Company believes that the efficiency ratio, which measures the costs expended to generate a dollar of revenue, is useful in the assessment of financial performance, including non-interest expense control. The Company believes that tangible book value per share is useful to evaluate the relative strength of the Company's capital position. The Company does not have goodwill and intangible assets for any of the periods presented. As such, tangible book value per common share is equal to book value per common share.

We utilize these measures for internal planning and forecasting purposes. These non-GAAP financial measures should not be considered a substitute for GAAP basis measures and results, and we strongly encourage investors to review our consolidated financial statements in their entirety and not to rely on any single financial measure.


First Connecticut Bancorp, Inc.
Selected Financial Data (Unaudited)
 
            
            
 At or for the Three Months Ended  
 June 30, March 31, December 31, September 30, June 30,  
(Dollars in thousands, except per share data) 2015   2015   2014   2014   2014   
Selected Financial Condition Data:           
            
Total assets$  2,626,217  $  2,549,074  $  2,485,360  $  2,395,674  $  2,267,709   
Cash and cash equivalents    42,992     44,847     42,863     43,914     50,778   
Securities held-to-maturity, at amortized cost   34,366     21,006     16,224     12,439     12,715   
Securities available-for-sale, at fair value   143,799     173,829     188,041     194,706     160,784   
Federal Home Loan Bank of Boston stock, at cost   21,496     19,785     19,785     17,724     17,724   
Loans, net   2,268,385     2,186,937     2,119,917     2,031,780     1,930,502   
Deposits   1,878,040     1,887,954     1,733,041     1,727,994     1,630,779   
Federal Home Loan Bank of Boston advances   400,700     308,700     401,700     304,700     291,000   
Total stockholders' equity   239,082     237,709     234,563     233,646     231,269   
Allowance for loan losses   19,581     19,232     18,960     18,556     17,912   
Non-accrual loans   12,973     14,086     15,468     15,475     14,652   
Impaired loans   39,975     42,130     43,452     39,579     41,892   
Loan delinquencies 30 days and greater   13,244     14,193     16,079     15,922     15,257   
            
Selected Operating Data:           
            
Interest income$  20,164  $  19,532  $  19,412  $  18,528  $  17,854   
Interest expense   3,065     3,157     3,017     2,543     2,290   
  Net interest income   17,099     16,375     16,395     15,985     15,564   
  Provision for loan losses   663     615     632     1,041     410   
Net interest income after provision for loan losses   16,436     15,760     15,763     14,944     15,154   
Noninterest income   4,074     2,664     2,498     2,778     2,066   
Noninterest expense   15,597     14,937     14,615     14,219     14,254   
Income before income taxes   4,913     3,487     3,646     3,503     2,966   
Income tax expense   1,441     976     499     997     776   
            
Net income$  3,472  $  2,511     3,147  $  2,506  $  2,190   
            
Performance Ratios (annualized):           
            
Return on average assets 0.54%  0.40%  0.52%  0.43%  0.40%  
Return on average equity 5.77%  4.24%  5.31%  4.27%  3.77%  
Interest rate spread (1)  2.72%  2.68%  2.68%  2.78%  2.89%  
Net interest rate margin (2)  2.86%  2.83%  2.83%  2.91%  3.02%  
Non-interest expense to average assets 2.43%  2.38%  2.39%  2.46%  2.60%  
Efficiency ratio (3) 77.13%  78.35%  77.70%  75.78%  80.85%  
Average interest-earning assets to average           
  interest-bearing liabilities 126.98%  125.86%  127.89%  128.17%  129.13%  
Loans to deposits 121.83%  116.86%  123.42%  118.65%  119.48%  
            
Asset Quality Ratios:           
            
Allowance for loan losses as a percent of total loans 0.86%  0.87%  0.89%  0.91%  0.92%  
Allowance for loan losses as a percent of           
  non-accrual loans 150.94%  136.53%  122.58%  119.91%  122.25%  
Net charge-offs to average loans (annualized) 0.06%  0.06%  0.04%  0.08%  0.03%  
Non-accrual loans as a percent of total loans 0.57%  0.64%  0.72%  0.76%  0.75%  
Non-accrual loans as a percent of total assets 0.49%  0.55%  0.62%  0.65%  0.65%  
Loan delinquencies 30 days and greater as a           
  percent of total loans 0.58%  0.64%  0.75%  0.78%  0.78%  
            
Per Share Related Data:           
            
Basic earnings per share$  0.23  $  0.17  $  0.21  $  0.17  $  0.15   
Diluted earnings per share$  0.23  $  0.17  $  0.21  $  0.17  $  0.14   
Dividends declared per share$  0.05  $  0.05  $  0.05  $  0.05  $  0.04   
Tangible book value (4)$  15.01  $  14.82  $  14.64  $  14.56  $  14.39   
Common stock shares outstanding   15,922,888     16,035,005   16,026,319   16,043,031   16,072,637   
Weighted-average basic shares outstanding   14,694,472   14,722,112   14,695,490   14,613,115   14,601,416   
Weighted-average diluted shares outstanding   14,839,454   14,850,597   14,836,032   14,710,880   14,707,472   
            
            
(1) Represents the difference between the weighted-average yield on average interest-earning assets and the weighted-average cost of interest-bearing liabilities.    
            
(2) Represents tax-equivalent net interest income as a percent of average interest-earning assets.        
            
(3) Represents core noninterest expense divided by the sum of core net interest income and core noninterest income.       
      See "Reconciliation of Non-GAAP Financial Measures" table.          
            
(4) Represents ending stockholders' equity less goodwill and intangible assets (excluding mortgage servicing rights) divided by ending common shares outstanding.  
      The Company does not have goodwill and intangible assets for any of the periods presented.  See "Reconciliation of Non-GAAP Financial Measures" table.  
            


First Connecticut Bancorp, Inc.
Selected Financial Data (Unaudited)
 
            
 At or for the Three Months Ended  
 June 30, March 31, December 31, September 30, June 30,  
(Dollars in thousands) 2015   2015   2014   2014   2014   
Capital Ratios:           
            
Equity to total assets at end of period 9.10%  9.33%  9.44%  9.75%  10.20%  
Average equity to average assets 9.36%  9.45%  9.71%  10.13%  10.59%  
Total Capital (to Risk Weighted Assets) 13.11%* 13.44%  13.73%  14.12%  14.56%  
Tier I Capital (to Risk Weighted Assets) 12.12%* 12.44%  12.70%  13.07%  13.51%  
Common Equity Tier I Capital  12.12%* 12.44% n/a n/a n/a  
Tier I Leverage Capital (to Average Assets) 9.57%* 9.72%  9.86%  10.25%  10.70%  
Total equity to total average assets 9.29%  9.48%  9.61%  10.09%  10.54%  
            
* Estimated           
            
Loans and Allowance for Loan Losses:           
            
Real estate           
  Residential$  888,376  $  850,819  $  827,005  $  789,166  $  749,124   
  Commercial   817,955     769,712     765,066     717,399     686,299   
  Construction   42,858     53,913     57,371     80,242     69,047   
Installment   3,103     3,114     3,356     3,524     3,850   
Commercial   359,537     352,085     309,708     289,708     277,483   
Collateral   1,551     1,676     1,733     1,826     1,480   
Home equity line of credit   169,507     169,969     169,768     163,608     156,625   
Revolving credit   77     80     99     97     75   
Resort   837     880     929     1,019     1,068   
  Total loans 2,283,801   2,202,248   2,135,035   2,046,589   1,945,051   
Less:           
 Allowance for loan losses    (19,581)    (19,232)    (18,960)    (18,556)    (17,912)  
 Net deferred loan costs    4,165     3,921     3,842     3,747     3,363   
  Loans, net$  2,268,385  $  2,186,937  $  2,119,917  $  2,031,780  $  1,930,502   
            
Deposits:           
            
Noninterest-bearing demand deposits$  377,092  $  337,211  $  330,524  $  323,499  $  315,916   
Interest-bearing           
  NOW accounts   425,789     499,130     355,412     454,650   377,570   
  Money market   430,558     462,532     470,991     417,498   401,694   
  Savings accounts   220,154     214,083     210,892     200,501   202,970   
  Time deposits   424,447     374,998     365,222     331,846   332,629   
Total interest-bearing deposits   1,500,948     1,550,743     1,402,517     1,404,495     1,314,863   
  Total deposits$  1,878,040  $  1,887,954  $  1,733,041  $  1,727,994  $  1,630,779   
            


First Connecticut Bancorp, Inc.
Consolidated Statements of Condition (Unaudited)
 
             
       June 30, March 31, June 30, 
        2015   2015   2014  
(Dollars in thousands)      
Assets         
Cash and due from banks$  35,595  $  33,175  $  46,303  
Interest bearing deposits with other institutions 7,397   11,672   4,475  
  Total cash and cash equivalents 42,992   44,847   50,778  
Securities held-to-maturity, at amortized cost 34,366   21,006   12,715  
Securities available-for-sale, at fair value 143,799   173,829   160,784  
Loans held for sale 7,550   2,187   4,576  
Loans (1)   2,287,966   2,206,169   1,948,414  
 Allowance for loan losses (19,581)  (19,232)  (17,912) 
  Loans, net 2,268,385   2,186,937   1,930,502  
Premises and equipment, net 17,964   18,289   20,072  
Federal Home Loan Bank of Boston stock, at cost 21,496   19,785   17,724  
Accrued income receivable 6,425   6,047   5,133  
Bank-owned life insurance 50,283   39,960   39,120  
Deferred income taxes 16,450   16,759   14,756  
Prepaid expenses and other assets 16,507   19,428   11,549  
     Total assets$  2,626,217  $  2,549,074  $  2,267,709  
             
Liabilities and Stockholders' Equity      
Deposits        
 Interest-bearing$  1,500,948  $  1,550,743  $  1,314,863  
 Noninterest-bearing 377,092   337,211   315,916  
        1,878,040   1,887,954   1,630,779  
Federal Home Loan Bank of Boston advances 400,700   308,700   291,000  
Repurchase agreement borrowings 10,500   10,500   21,000  
Repurchase liabilities 56,041   59,198   55,326  
Accrued expenses and other liabilities 41,854   45,013   38,335  
     Total liabilities 2,387,135   2,311,365   2,036,440  
             
Stockholders' Equity      
 Common stock 181   181   181  
 Additional paid-in-capital 180,764   179,683   177,431  
 Unallocated common stock held by ESOP (12,160)  (12,422)  (13,218) 
 Treasury stock, at cost (30,389)  (28,725)  (28,577) 
 Retained earnings 108,014   105,339   99,386  
 Accumulated other comprehensive loss (7,328)  (6,347)  (3,934) 
     Total stockholders' equity 239,082   237,709   231,269  
     Total liabilities and stockholders' equity$  2,626,217  $  2,549,074  $  2,267,709  
             
(1) Loans include net deferred fees and unamortized premiums of $4.2 million, $3.9 million and $3.4 million at June 30, 2015, March 31, 2015 and June 30, 2014, respectively.  
             


First Connecticut Bancorp, Inc.
Consolidated Statements of Income (Unaudited)
 
                 
       Three Months Ended Six Months Ended 
       June 30, March 31, June 30, June 30, 
(Dollars in thousands, except per share data) 2015   2015   2014   2015   2014  
Interest income          
Interest and fees on loans          
 Mortgage $  15,331  $  15,058  $  13,875  $  30,389  $  27,303  
 Other   4,264   3,995   3,573   8,259   6,781  
Interest and dividends on investments          
 United States Government and agency obligations 385   323   218   708   407  
 Other bonds 35   18   81   53   139  
 Corporate stocks 145   131   105   276   198  
Other interest income 4   7   2   11   6  
     Total interest income 20,164   19,532   17,854   39,696   34,834  
Interest expense          
Deposits   2,140   2,209   1,711   4,349   3,405  
Interest on borrowed funds 804   751   368   1,555   687  
Interest on repo borrowings 92   163   179   255   356  
Interest on repurchase liabilities 29   34   32   63   72  
     Total interest expense 3,065   3,157   2,290   6,222   4,520  
     Net interest income 17,099   16,375   15,564   33,474   30,314  
Provision for loan losses 663   615   410   1,278   915  
     Net interest income          
      after provision for loan losses 16,436   15,760   15,154   32,196   29,399  
Noninterest income          
Fees for customer services 1,500   1,373   1,317   2,873   2,508  
Gain on sale of investments 1,250   273   -   1,523   -  
Net gain on loans sold 412   520   317   932   439  
Brokerage and insurance fee income 60   49   49   109   93  
Bank owned life insurance income 324   273   281   597   563  
Other    528   176   102   704   225  
     Total noninterest income 4,074   2,664   2,066   6,738   3,828  
Noninterest expense          
Salaries and employee benefits 9,035   8,790   8,638   17,825   16,926  
Occupancy expense 1,272   1,367   1,209   2,639   2,558  
Furniture and equipment expense 1,077   1,036   1,106   2,113   2,124  
FDIC assessment 402   412   321   814   649  
Marketing  534   409   509   943   887  
Other operating expenses   3,277     2,923   2,471   6,200   5,070  
     Total noninterest expense 15,597   14,937   14,254   30,534   28,214  
     Income before income taxes 4,913   3,487   2,966   8,400   5,013  
Income tax expense 1,441   976   776   2,417   1,331  
     Net income$  3,472  $  2,511  $  2,190  $  5,983  $  3,682  
                 
Earnings per share:           
 Basic  $  0.23  $  0.17  $  0.15  $  0.40  $  0.24  
 Diluted     0.23     0.17     0.14     0.40     0.24  
Weighted average shares outstanding:          
 Basic     14,694,472   14,722,112   14,601,416   14,708,215   14,710,453  
 Diluted     14,839,454   14,850,597   14,707,472   14,844,994   14,813,566  
                 


First Connecticut Bancorp, Inc.
Consolidated Average Balances, Yields and Rates (Unaudited)
    
                
 For The Three Months Ended    
 June 30, 2015 March 31, 2015 June 30, 2014    
 Average BalanceInterest and Dividends (1)Yield/Cost Average BalanceInterest and Dividends (1)Yield/Cost Average BalanceInterest and Dividends (1)Yield/Cost    
(Dollars in thousands)               
Interest-earning assets:               
Loans$  2,241,447 $  19,949  3.57% $  2,167,879 $  19,391  3.63% $  1,907,900 $  17,633  3.71%    
Securities    178,780    478  1.07%    196,087    394  0.81%    167,199    355  0.85%    
Federal Home Loan Bank of Boston stock   20,310    86  1.70%    19,785    79  1.62%    14,744    49  1.33%    
Federal funds and other earning assets    10,032    5  0.20%    12,394    6  0.20%    3,567    2  0.22%    
Total interest-earning assets    2,450,569    20,518  3.36%    2,396,145    19,870  3.36%    2,093,410    18,039  3.46%    
Noninterest-earning assets    121,820       112,534       100,339       
Total assets $  2,572,389    $  2,508,679    $  2,193,749       
                
Interest-bearing liabilities:               
NOW accounts$  454,532 $  310  0.27% $  449,897 $  321  0.29% $  332,597 $  185  0.22%    
Money market   435,749    798  0.73%    480,687    970  0.82%    414,774    754  0.73%    
Savings accounts    217,651    57  0.11%    208,626    57  0.11%    204,218    42  0.08%    
Certificates of deposit    392,941    975  1.00%    367,501    861  0.95%    335,391    730  0.87%    
Total interest-bearing deposits    1,500,873    2,140  0.57%    1,506,711    2,209  0.59%    1,286,980    1,711  0.53%    
Federal Home Loan Bank of Boston Advances   366,460    804  0.88%    304,411    751  1.00%    259,980    368  0.57%    
Repurchase agreement borrowings   10,500    92  3.51%    19,133    163  3.46%    21,000    179  3.42%    
Repurchase liabilities    52,043    29  0.22%    58,507    34  0.24%    53,159    32  0.24%    
Total interest-bearing liabilities    1,929,876    3,065  0.64%    1,888,762    3,157  0.68%    1,621,119    2,290  0.57%    
Noninterest-bearing deposits   348,857       330,865       303,473       
Other noninterest-bearing liabilities    52,831       52,092       36,890       
Total liabilities    2,331,564       2,271,719       1,961,482       
Stockholders' equity   240,825       236,960       232,267       
Total liabilities and stockholders' equity$  2,572,389    $  2,508,679    $  2,193,749           
                
Tax-equivalent net interest income $  17,453    $  16,713    $  15,749      
Less: tax-equivalent adjustment    (354)      (338)      (185)     
Net interest income $  17,099    $  16,375    $  15,564      
                
Net interest rate spread (2)    2.72%    2.68%    2.89%    
Net interest-earning assets (3) $  520,693    $  507,383    $  472,291       
Net interest margin (4)    2.86%    2.83%    3.02%    
Average interest-earning assets to average interest-bearing liabilities                
 126.98%  126.86%  129.13%    
                
(1) On a fully-tax equivalent basis.               
(2) Net interest rate spread represents the difference between the yield on average interest-earning assets and the cost of average interest-bearing liabilities.      
(3) Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities.         
(4) Net interest margin represents tax-equivalent net interest income divided by average total interest-earning assets.        
                


First Connecticut Bancorp, Inc.
Consolidated Average Balances, Yields and Rates (Unaudited)
  
          
 For The Six Months Ended June 30,  
  2015   2014   
 Average
Balance
Interest and
Dividends (1)
Yield/
Cost
 Average
Balance
Interest and
Dividends (1)
Yield/
Cost
  
(Dollars in thousands)         
Interest-earning assets:         
Loans$  2,204,867 $  39,322  3.60% $  1,873,082 $  34,439  3.71%  
Securities    187,385    872  0.94%    163,980    657  0.81%  
Federal Home Loan Bank of Boston stock   20,049    165  1.66%    13,944    87  1.26%  
Federal funds and other earning assets    11,206    11  0.20%    3,580    6  0.34%  
Total interest-earning assets    2,423,507    40,370  3.36%    2,054,586    35,189  3.45%  
Noninterest-earning assets    117,203       104,727     
Total assets $  2,540,710    $  2,159,313     
          
Interest-bearing liabilities:         
NOW accounts$  452,227 $  631  0.28% $  342,458 $  382  0.22%  
Money market   458,094    1,768  0.78%    411,983    1,438  0.70%  
Savings accounts    213,163    114  0.11%    198,710    97  0.10%  
Certificates of deposit    380,291    1,836  0.97%    335,836    1,488  0.89%  
Total interest-bearing deposits    1,503,775    4,349  0.58%    1,288,987    3,405  0.53%  
Federal Home Loan Bank of Boston Advances   335,607    1,555  0.93%    220,968    687  0.63%  
Repurchase agreement borrowings   14,793    255  3.48%    21,000    356  3.42%  
Repurchase liabilities    55,257    63  0.23%    57,151    72  0.25%  
Total interest-bearing liabilities    1,909,432    6,222  0.66%    1,588,106    4,520  0.57%  
Noninterest-bearing deposits   339,911       301,557     
Other noninterest-bearing liabilities    52,464       36,758     
Total liabilities    2,301,807       1,926,421     
Stockholders' equity   238,903       232,892     
Total liabilities and stockholders' equity$  2,540,710    $  2,159,313     
          
Tax-equivalent net interest income $  34,148    $  30,669    
Less: tax-equivalent adjustment    (674)      (355)   
Net interest income $  33,474    $  30,314    
          
Net interest rate spread (2)    2.70%    2.88%  
Net interest-earning assets (3) $  514,075    $  466,480     
Net interest margin (4)    2.84%    3.01%  
Average interest-earning assets to average interest-bearing liabilities          
  126.92%    129.37%   
          
(1) On a fully-tax equivalent basis.         
(2) Net interest rate spread represents the difference between the yield on average interest-earning assets and the cost of average interest-bearing liabilities. 
(3) Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities.   
(4) Net interest margin represents tax-equivalent net interest income divided by average total interest-earning assets.  
          


First Connecticut Bancorp, Inc.
Reconciliation of Non-GAAP Financial Measures (Unaudited)
 
             
The table below presents a reconciliation of non-GAAP financial measures with financial measures defined by GAAP for the three months ended June 30, 2015, March 31, 2015, December 31, 2014,  
September 30, 2014 and June 30, 2014.  The Company believes the use of these non-GAAP financial measures provides additional clarity in assessing the results of the Company.  
             
  At or for the Three Months Ended  
  June 30, March 31, December 31, September 30, June 30,  
(Dollars in thousands, except per share data) 2015   2015   2014   2014   2014   
Net Income$  3,472  $  2,511  $  3,147  $  2,506  $  2,190   
 Adjustments:           
 Plus: Accelerated vesting of stock compensation 258   140   -   -   -   
 Plus: Employee severance -   93   -   -   -   
 Less: Prepayment penalty fees (35)  -   -   -   (185)  
 Less: Non-recurring payment related to a loan participation -   -   (250)  -   -   
 Less: Net gain on sales of investments (1,250)  (273)  -   -   -   
Total core adjustments before taxes (1,027)  (40)  (250)  -   (185)  
 Tax benefit on core adjustments 359   14   88   -   63   
 Tax rate adjustment (1) -   -   (441)  -   -   
Total core adjustments after taxes (668)  (26)  (603)  -   (122)  
Total core net income$  2,804  $  2,485  $  2,544  $  2,506  $  2,068   
             
             
Total net interest income$  17,099  $  16,375  $  16,395  $  15,985  $  15,564   
 Less: Prepayment penalty fees (35)  -   -   -   (185)  
 Less: Non-recurring payment related to a loan participation -   -   (250)  -   -   
Total core net interest income$  17,064  $  16,375  $  16,145  $  15,985  $  15,379   
             
Total noninterest income$  4,074  $  2,664  $  2,498  $  2,778  $  2,066   
 Less: Net gain on sales of investments (1,250)  (273)  -   -   -   
Total core noninterest income$  2,824  $  2,391  $  2,498  $  2,778  $  2,066   
             
Total noninterest expense$  15,597  $  14,937  $  14,615  $  14,219  $  14,254   
 Less: Accelerated vesting of stock compensation   (258)    (140)  -   -   -   
 Less: Employee severances   -      (93)  -   -   -   
Total core noninterest expense$  15,339  $  14,704  $  14,615  $  14,219  $  14,254   
             
Core earnings per common share, diluted$  0.19  $  0.16  $  0.17  $  0.17  $  0.14   
             
Core return on average assets (annualized) 0.44%  0.40%  0.42%  0.43%  0.38%  
Core return on average equity (annualized) 4.66%  4.19%  4.29%  4.27%  3.56%  
Efficiency ratio (2)  77.13%  78.35%  77.70%  75.78%  80.85%  
             
Tangible book value (3) $  15.01  $  14.82  $  14.64  $  14.56  $  14.39   
             
             
(1) Represents the tax benefit derived from adjusting the tax rate on the Company's deferred tax assets from 34% to 35%.  The Company's taxable income placed it in the 35% corporate tax bracket.  
             
(2) Represents core noninterest expense divided by the sum of core net interest income and core noninterest income.       
             
(3) Represents ending stockholders' equity less goodwill and intangible assets (excluding mortgage servicing rights) divided by ending common shares outstanding. The Company does not have goodwill and intangible assets for any of the periods presented.  
Jennifer H. Daukas Investor Relations Officer One Farm Glen Boulevard, Farmington, CT 06032 P 860-284-6359 F 860-409-3316 jdaukas@farmingtonbankct.com

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