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First Connecticut Bancorp, Inc. Reports Third Quarter 2015 Earnings of $0.28 Earnings Per Share

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FARMINGTON, Conn., Oct. 21, 2015 (GLOBE NEWSWIRE) -- First Connecticut Bancorp, Inc. (the "Company") (NASDAQ: FBNK), the holding company for Farmington Bank (the "Bank"), reported net income of $4.2 million, or $0.28 diluted earnings per share for the quarter ended September 30, 2015 compared to net income of $2.5 million, or $0.17 diluted earnings per share for the quarter ended September 30, 2014.

Net income on a core earnings basis was $3.9 million, or $0.25 diluted core earnings per share for the quarter ended September 30, 2015 compared to $2.5 million, or $0.17 diluted core earnings per share for the quarter ended September 30, 2014.  Core earnings exclude non-recurring items. 

"The impact of our organic growth strategy and commitment to improve earnings and consequently grow tangible book value and earnings per share is evident in our results this quarter" stated John J. Patrick Jr., First Connecticut Bancorp's Chairman, President and CEO.

"We opened our 23rd branch office in West Springfield, MA on October 6, 2015 and anticipate opening our 24th branch office in East Longmeadow, MA in November.  We have received regulatory approval to open two additional branch offices in Manchester, CT and Vernon, CT in the first half of 2016."

Financial Highlights

  • Net interest income increased $573,000 to $17.7 million in the third quarter of 2015 compared to the linked quarter and increased $1.7 million or 11% compared to the third quarter of 2014.
  • Net gain on loans sold increased $581,000 to $993,000 in the third quarter of 2015 compared to the linked quarter primarily due to selling $83.2 million of fixed rate residential portfolio loans to reposition the balance sheet and maintain our asset sensitive interest rate position.
  • Strong organic loan growth continued during the quarter as total loans increased $50.4 million to $2.3 billion at September 30, 2015 and increased $287.6 million or 14% from a year ago.  Loan growth during the quarter was primarily driven by an $82.0 million increase in the commercial loan portfolio offset by a $31.5 million decrease in the residential loan portfolio.
  • Overall deposits increased $95.3 million to $2.0 billion in the third quarter of 2015 compared to the linked quarter and increased $245.4 million or 14% from a year ago. 
  • Checking accounts grew by 3.0% or 1,432 net new accounts in the third quarter of 2015 and by 11.8% or 5,182 net new accounts from a year ago.
  • Core noninterest expense to average assets was 2.26% in the third quarter of 2015 compared to 2.39% in the linked quarter and 2.46% in the third quarter of 2014.
  • Tangible book value per share is $15.30 compared to $15.01 on a linked quarter basis and $14.56 at September 30, 2014.
  • Asset quality decreased slightly compared to the linked quarter due to one commercial loan relationship but improved year over year.  Loan delinquencies 30 days and greater represented 0.67% of total loans at September 30, 2015 compared to 0.58% at June 30, 2015 and 0.78% at September 30, 2014.  Non-accrual loans represented 0.71% of total loans compared to 0.57% of total loans on a linked quarter basis and 0.76% of total loans at September 30, 2014. 
  • The allowance for loan losses represented 0.86% of total loans at September 30, 2015 and June 30, 2015 and 0.91% at September 30, 2014. 
  • The Company paid a cash dividend of $0.06 per share on September 14, 2015, an increase of $0.01 compared to the linked quarter.

Third quarter 2015 compared with second quarter 2015

Net interest income

  • Net interest income increased $573,000 to $17.7 million in the third quarter of 2015 compared to the linked quarter due primarily to a $117.8 million increase in the average net loan balance offset by a $357,000 increase in interest expense.
  • Net interest margin decreased 7 basis points to 2.79% in the third quarter of 2015 compared to 2.86% in the linked quarter due to a 5 basis point decrease in the loan yield and a 2 basis point increase in the cost of interest-bearing liabilities.  The decrease in the loan yield was primarily due to lower yields on new loans originated as a result of a low interest rate environment during the quarter. 
  • The cost of interest-bearing liabilities increased 2 basis points to 66 basis points in the third quarter of 2015 compared to 64 basis points in the linked quarter primarily due to money market and certificate of deposit promotions.

Provision for loan losses

  • Provision for loan losses was $386,000 for the third quarter of 2015 compared to $663,000 for the linked quarter.
  • Net charge-offs (recoveries) in the quarter were ($43,000) or (0.01%) to average loans (annualized) compared to $314,000 or 0.06% to average loans (annualized) in the linked quarter.
  • The allowance for loan losses represented 0.86% of total loans at September 30, 2015 and June 30, 2015. 

Noninterest income

  • Total noninterest income decreased $833,000 to $3.2 million in the third quarter of 2015 compared to the linked quarter primarily due to no gain on sale of investments during the quarter, a $219,000 decrease in other noninterest income offset by a $581,000 increase in net gain on loans sold.
  • Gain on sale of investments was $1.3 million in the second quarter of 2015 due to the sale of a trust preferred security.
  • Net gain on loans sold increased $581,000 primarily due to selling $83.2 million of fixed rate residential portfolio loans to reposition the balance sheet and maintain our asset sensitive interest rate position.
  • Other income decreased $219,000 to $309,000 in the third quarter of 2015 compared to $528,000 in the linked quarter primarily due to a $95,000 decrease in swap fees and a decrease in mortgage banking derivatives income.

Noninterest expense

  • Noninterest expense decreased $879,000 in the third quarter of 2015 to $14.7 million compared to the linked quarter primarily due to a $970,000 decrease in other operating expenses offset by a $267,000 increase in salaries and employee benefits.  Noninterest expense on a core basis remained flat at $15.3 million in the third quarter of 2015 compared to the linked quarter.  
  • Other operating expenses decreased $970,000 on a linked quarter basis primarily due to a $557,000 gain on foreclosed real estate in the third quarter and $258,000 in non-recurring stock compensation costs in the second quarter related to the retirement of two directors and a $149,000 loss on a credit sharing arrangement on a sold loan incurred in the second quarter.

Income tax expense

  • Income tax expense was $1.6 million in the third quarter of 2015 compared to $1.4 million in the linked quarter.  The increase in income tax expense in the third quarter was primarily due to an $896,000 increase in income before taxes.

Third quarter 2015 compared with third quarter 2014

Net interest income

  • Net interest income increased $1.7 million to $17.7 million in the third quarter of 2015 compared to the prior year quarter primarily due to a $362.3 million increase in the average net loan balance offset by an $879,000 increase in interest expense.
  • Net interest margin decreased to 2.79% in the third quarter of 2015 compared to 2.91% in the third quarter of 2014 primarily due to a 5 basis point decrease in the yield on interest-earning assets and a 7 basis point increase in the cost of interest-bearing liabilities.
  • The yield on interest-earning assets decreased to 3.31% in the third quarter of 2015 compared to 3.36% in the prior year quarter primarily due to a 12 basis point decrease in the yield on average loans offset by increases in the investments yields.
  • The cost of interest-bearing liabilities increased to 66 basis points in the third quarter of 2015 compared to 59 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 $386,000 for the third quarter of 2015 compared to $1.0 million for the prior year quarter.
  • Net charge-offs (recoveries) in the quarter were ($43,000) or (0.01%) to average loans (annualized) compared to $397,000 or 0.08% to average loans (annualized) in the prior year quarter.
  • The allowance for loan losses represented 0.86% of total loans at September 30, 2015 compared to 0.91% at September 30, 2014. 

Noninterest income

  • Total noninterest income increased $463,000 to $3.2 million in the third quarter of 2015 compared to the prior year quarter primarily due to a $360,000 increase in net gain on loans sold, a $77,000 increase in fees for customer services and a $65,000 increase in bank owned life insurance income.

Noninterest expense

  • Noninterest expense on a core basis increased $1.1 million in the third quarter of 2015 compared to the prior year quarter primarily due to a $709,000 increase in salaries and employee benefits and a $295,000 increase in other operating expenses.
  • Salaries and employee benefits increased $709,000 primarily due to costs associated with our expansion into western Massachusetts, growth driven staff increases in our compliance areas and a general increase to maintain the Bank's growth.
  • Other operating expenses increased $295,000 due to a general increase in other costs to support the Bank's operations.

Income tax expense

  • Income tax expense was $1.6 million in the third quarter of 2015 compared to $997,000 in the prior year quarter.  The increase in income tax expense in the third quarter was primarily due to a $2.3 million increase in income before taxes.

September 30, 2015 compared to September 30, 2014

Financial Condition

  • Total assets increased $312.8 million or 13% at September 30, 2015 to $2.7 billion compared to $2.4 billion at September 30, 2014, largely reflecting an increase in loans.
  • Our investment portfolio totaled $196.9 million at September 30, 2015 compared to $207.1 million at September 30, 2014, a decrease of $10.3 million.
  • Net loans increased $286.5 million at September 30, 2015 to $2.3 billion compared to $2.0 billion at September 30, 2014 due to our continued focus on commercial and residential lending.
  • Deposits increased $245.4 million at September 30, 2015 to $2.0 billion compared to $1.7 billion at September 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 second quarter of 2015 with balances totaling $55.5 million at September 30, 2015.
  • Federal Home Loan Bank of Boston advances increased $68.9 million to $373.6 million at September 30, 2015 compared to $304.7 million at September 30, 2014.  Advances were used to support loan and securities growth during the quarter.

Asset Quality

  • Asset quality decreased slightly compared to the linked quarter due to one commercial loan relationship totaling $3.5 million at September 30, 2015 was 30 days delinquent and on nonaccrual due to a Chapter 11 Bankruptcy filing.
  • At September 30, 2015, the allowance for loan losses represented 0.86% of total loans and 120.05% of non-accrual loans, compared to 0.86% of total loans and 150.94% of non-accrual loans at June 30, 2015 and 0.91% of total loans and 119.91% of non-accrual loans at September 30, 2014.
  • Loan delinquencies 30 days and greater represented to 0.67% of total loans at September 30, 2015 compared to 0.58% of total loans at June 30, 2015 and 0.78% of total loans at September 30, 2014.
  • Non-accrual loans represented 0.71% of total loans at September 30, 2015 compared to 0.57% of total loans at June 30, 2015 and 0.76% of total loans at September 30, 2014.
  • Net charge-offs (recoveries) in the quarter were ($43,000) or (0.01%) to average loans (annualized) compared to $314,000 or 0.06% to average loans (annualized) in the linked quarter and $397,000 or 0.08% 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 12.72% at September 30, 2015. 
  • Tangible book value per share was $15.30 compared to $15.01 on a linked quarter basis and $14.56 at September 30, 2014.
  • During the third quarter of 2015, the Company repurchased 7,589 shares of common stock at an average price per share of $15.76 at a total cost of $120,000.  Repurchased shares are held as treasury stock and will be available for general corporate purposes.  The Company has 772,745 shares remaining to repurchase at September 30, 2015 from prior regulatory approval.
  • At September 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 23 branch locations throughout central Connecticut and western Massachusetts, offering commercial and residential lending as well as wealth management services. 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, October 22, 2015 at 10:30am Eastern Time to discuss third 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  
 September 30, June 30, March 31, December 31, September 30,  
(Dollars in thousands, except per share data) 2015   2015   2015   2014   2014   
Selected Financial Condition Data:           
            
Total assets$  2,708,454  $  2,626,217  $  2,549,074  $  2,485,360  $  2,395,674   
Cash and cash equivalents    47,447     42,992     44,847     42,863     43,914   
Securities held-to-maturity, at amortized cost   25,486     34,366     21,006     16,224     12,439   
Securities available-for-sale, at fair value   171,390     143,799     173,829     188,041     194,706   
Federal Home Loan Bank of Boston stock, at cost   23,038     21,496     19,785     19,785     17,724   
Loans, net   2,318,257     2,268,385     2,186,937     2,119,917     2,031,780   
Deposits   1,973,355     1,878,040     1,887,954     1,733,041     1,727,994   
Federal Home Loan Bank of Boston advances   373,600     400,700     308,700     401,700     304,700   
Total stockholders' equity   243,195     239,082     237,709     234,563     233,646   
Allowance for loan losses   20,010     19,581     19,232     18,960     18,556   
Non-accrual loans   16,668     12,973     14,086     15,468     15,475   
Impaired loans   42,662     39,975     42,130     43,452     39,579   
Loan delinquencies 30 days and greater   15,598     13,244     14,193     16,079     15,922   
            
Selected Operating Data:           
            
Interest income$  21,094  $  20,164  $  19,532  $  19,412  $  18,528   
Interest expense   3,422     3,065     3,157     3,017     2,543   
  Net interest income   17,672     17,099     16,375     16,395     15,985   
  Provision for loan losses   386     663     615     632     1,041   
Net interest income after provision for loan losses   17,286     16,436     15,760     15,763     14,944   
Noninterest income   3,241     4,074     2,664     2,498     2,778   
Noninterest expense   14,718     15,597     14,937     14,615     14,219   
Income before income taxes   5,809     4,913     3,487     3,646     3,503   
Income tax expense   1,594     1,441     976     499     997   
            
Net income$  4,215  $  3,472  $  2,511  $  3,147  $  2,506   
            
Performance Ratios (annualized):           
            
Return on average assets 0.62%  0.54%  0.40%  0.52%  0.43%  
Return on average equity 6.92%  5.77%  4.24%  5.31%  4.27%  
Net interest rate spread (1)  2.65%  2.72%  2.68%  2.68%  2.78%  
Net interest rate margin (2)  2.79%  2.86%  2.83%  2.83%  2.91%  
Non-interest expense to average assets (3)  2.26%  2.39%  2.34%  2.39%  2.46%  
Efficiency ratio (4) 73.04%  77.13%  78.35%  77.70%  75.78%  
Average interest-earning assets to average           
  interest-bearing liabilities 126.44%  126.98%  125.86%  127.89%  128.17%  
Loans to deposits 118.49%  121.83%  116.86%  123.42%  118.65%  
            
Asset Quality Ratios:           
            
Allowance for loan losses as a percent of total loans 0.86%  0.86%  0.87%  0.89%  0.91%  
Allowance for loan losses as a percent of           
  non-accrual loans 120.05%  150.94%  136.53%  122.58%  119.91%  
Net charge-offs (recoveries) to average loans (annualized) (0.01%)  0.06%  0.06%  0.04%  0.08%  
Non-accrual loans as a percent of total loans 0.71%  0.57%  0.64%  0.72%  0.76%  
Non-accrual loans as a percent of total assets 0.62%  0.49%  0.55%  0.62%  0.65%  
Loan delinquencies 30 days and greater as a           
  percent of total loans 0.67%  0.58%  0.64%  0.75%  0.78%  
            
Per Share Related Data:           
            
Basic earnings per share$  0.28  $  0.23  $  0.17  $  0.21  $  0.17   
Diluted earnings per share$  0.28  $  0.23  $  0.17  $  0.21  $  0.17   
Dividends declared per share$  0.06  $  0.05  $  0.05  $  0.05  $  0.05   
Tangible book value (5)$  15.30  $  15.01  $  14.82  $  14.64  $  14.56   
Common stock shares outstanding   15,893,263     15,922,888   16,035,005   16,026,319   16,043,031   
Weighted-average basic shares outstanding   14,632,951   14,694,472   14,722,112   14,695,490   14,613,115   
Weighted-average diluted shares outstanding   14,887,461   14,839,454   14,850,597   14,836,032   14,710,880   
            
            
(1) Represents the difference between the yield on average interest-earning assets and the cost of average interest-bearing liabilities.    
            
(2) Represents tax-equivalent net interest income as a percent of average interest-earning assets.        
            
(3) Represents core noninterest expense annualized divided by average assets.  See "Reconciliation of Non-GAAP Financial Measures" table.    
            
(4) 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.           
            
(5) 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  
 September 30, June 30, March 31, December 31, September 30,  
(Dollars in thousands) 2015   2015   2015   2014   2014   
Capital Ratios:           
            
Equity to total assets at end of period 8.98%  9.10%  9.33%  9.44%  9.75%  
Average equity to average assets 9.00%  9.36%  9.45%  9.71%  10.13%  
Total Capital (to Risk Weighted Assets) 12.72%* 13.11%  13.44%  13.73%  14.12%  
Tier I Capital (to Risk Weighted Assets) 11.76%* 12.12%  12.44%  12.70%  13.07%  
Common Equity Tier I Capital  11.76%* 12.12%  12.44% n/a n/a  
Tier I Leverage Capital (to Average Assets) 9.24%* 9.57%  9.72%  9.86%  10.25%  
Total equity to total average assets 8.98%  9.29%  9.48%  9.61%  10.09%  
            
* Estimated           
            
Loans and Allowance for Loan Losses:           
            
Real estate           
  Residential$  851,784  $  888,376  $  850,819  $  827,005  $  789,166   
  Commercial   862,367     817,955     769,712     765,066     717,399   
  Construction   29,244     42,858     53,913     57,371     80,242   
Installment   3,007     3,103     3,114     3,356     3,524   
Commercial   410,704     359,537     352,085     309,708     289,708   
Collateral   1,632     1,551     1,676     1,733     1,826   
Home equity line of credit   174,579     169,507     169,969     169,768     163,608   
Revolving credit   96     77     80     99     97   
Resort   807     837     880     929     1,019   
  Total loans 2,334,220   2,283,801   2,202,248   2,135,035   2,046,589   
 Net deferred loan costs    4,047     4,165     3,921     3,842     3,747   
  Loans   2,338,267     2,287,966     2,206,169     2,138,877     2,050,336   
 Allowance for loan losses    (20,010)    (19,581)    (19,232)    (18,960)    (18,556)  
  Loans, net$  2,318,257  $  2,268,385  $  2,186,937  $  2,119,917  $  2,031,780   
            
Deposits:           
            
Noninterest-bearing demand deposits$  359,757  $  377,092  $  337,211  $  330,524  $  323,499   
Interest-bearing           
  NOW accounts   527,128     425,789     499,130     355,412   454,650   
  Money market   440,249     430,558     462,532     470,991   417,498   
  Savings accounts   211,170     220,154     214,083     210,892   200,501   
  Time deposits   435,051     424,447     374,998     365,222   331,846   
Total interest-bearing deposits   1,613,598     1,500,948     1,550,743     1,402,517     1,404,495   
  Total deposits$  1,973,355  $  1,878,040  $  1,887,954  $  1,733,041  $  1,727,994   
            


  
First Connecticut Bancorp, Inc.
Consolidated Statements of Condition (Unaudited)
 
         
             
       September 30, June 30, September 30, 
        2015   2015   2014  
(Dollars in thousands)      
Assets         
Cash and due from banks$  33,564  $  35,595  $  41,159  
Interest bearing deposits with other institutions   13,883   7,397   2,755  
  Total cash and cash equivalents 47,447   42,992   43,914  
Securities held-to-maturity, at amortized cost 25,486   34,366   12,439  
Securities available-for-sale, at fair value 171,390   143,799   194,706  
Loans held for sale 8,416   7,550   5,533  
Loans (1)   2,338,267   2,287,966   2,050,336  
 Allowance for loan losses (20,010)  (19,581)  (18,556) 
  Loans, net 2,318,257   2,268,385   2,031,780  
Premises and equipment, net 17,870   17,964   19,384  
Federal Home Loan Bank of Boston stock, at cost 23,038   21,496   17,724  
Accrued income receivable 6,305   6,425   5,331  
Bank-owned life insurance 50,633   50,283   39,403  
Deferred income taxes 15,935   16,450   14,529  
Prepaid expenses and other assets 23,677   16,507   10,931  
     Total assets$  2,708,454  $  2,626,217  $  2,395,674  
             
Liabilities and Stockholders' Equity      
Deposits        
 Interest-bearing$  1,613,598  $  1,500,948  $  1,404,495  
 Noninterest-bearing 359,757   377,092   323,499  
        1,973,355   1,878,040   1,727,994  
Federal Home Loan Bank of Boston advances 373,600   400,700   304,700  
Repurchase agreement borrowings 10,500   10,500   21,000  
Repurchase liabilities 58,084   56,041   73,855  
Accrued expenses and other liabilities 49,720   41,854   34,479  
     Total liabilities 2,465,259   2,387,135   2,162,028  
             
Stockholders' Equity      
 Common stock 181   181   181  
 Additional paid-in-capital 181,195   180,764   177,937  
 Unallocated common stock held by ESOP (11,893)  (12,160)  (12,949) 
 Treasury stock, at cost (30,411)  (30,389)  (28,585) 
 Retained earnings 111,274   108,014   101,089  
 Accumulated other comprehensive loss (7,151)  (7,328)  (4,027) 
     Total stockholders' equity 243,195   239,082   233,646  
     Total liabilities and stockholders' equity$  2,708,454  $  2,626,217  $  2,395,674  
             
(1) Loans include net deferred fees and unamortized premiums of $4.0 million, $4.2 million and $3.7 million at September 30, 2015,  
   June 30, 2015 and September 30, 2014, respectively.      
             


First Connecticut Bancorp, Inc.
Consolidated Statements of Income (Unaudited)
 
                 
                 
       Three Months Ended Nine Months Ended 
       September 30, June 30, September 30, September 30,  
(Dollars in thousands, except per share data) 2015   2015   2014   2015   2014  
Interest income          
Interest and fees on loans          
 Mortgage $  15,861  $  15,331  $  14,490  $  46,250  $  41,793  
 Other   4,594   4,264   3,608   12,853   10,389  
Interest and dividends on investments          
 United States Government and agency obligations 401   385   258   1,109   665  
 Other bonds 13   35   57   66   196  
 Corporate stocks 217   145   109   493   307  
Other interest income 8   4   6   19   12  
     Total interest income 21,094   20,164   18,528   60,790   53,362  
Interest expense          
Deposits   2,412   2,140   1,845   6,761   5,250  
Interest on borrowed funds 890   804   479   2,445   1,166  
Interest on repo borrowings 96   92   182   351   538  
Interest on repurchase liabilities 24   29   37   87   109  
     Total interest expense 3,422   3,065   2,543   9,644   7,063  
     Net interest income 17,672   17,099   15,985   51,146   46,299  
Provision for loan losses 386   663   1,041   1,664   1,956  
     Net interest income          
      after provision for loan losses 17,286   16,436   14,944   49,482   44,343  
Noninterest income          
Fees for customer services 1,536   1,500   1,459   4,409   3,967  
Gain on sale of investments -   1,250   -   1,523   -  
Net gain on loans sold 993   412   633   1,925   1,072  
Brokerage and insurance fee income 54   60   47   163   140  
Bank owned life insurance income 349   324   284   946   847  
Other    309   528   355   1,013   580  
     Total noninterest income 3,241   4,074   2,778   9,979   6,606  
Noninterest expense          
Salaries and employee benefits 9,302   9,035   8,593   27,127   25,519  
Occupancy expense 1,219   1,272   1,271   3,858   3,829  
Furniture and equipment expense 1,034   1,077   1,093   3,147   3,217  
FDIC assessment 413   402   361   1,227   1,010  
Marketing  443   534   332   1,386   1,219  
Other operating expenses 2,307     3,277     2,569   8,507     7,639  
     Total noninterest expense 14,718   15,597   14,219   45,252   42,433  
     Income before income taxes 5,809   4,913   3,503   14,209   8,516  
Income tax expense 1,594   1,441   997   4,011   2,328  
     Net income$  4,215  $  3,472  $  2,506  $  10,198  $  6,188  
                 
Earnings per share:           
 Basic  $  0.28  $  0.23  $  0.17  $  0.68  $  0.41  
 Diluted     0.28     0.23     0.17     0.67     0.41  
Weighted average shares outstanding:          
 Basic     14,632,951     14,694,472     14,613,115    14,706,908    14,677,650  
 Diluted     14,887,461     14,839,454     14,710,880    14,883,362    14,778,961  
                 

 

First Connecticut Bancorp, Inc.
Consolidated Average Balances, Yields and Rates (Unaudited)
    
                
                
 For The Three Months Ended    
 September 30, 2015 June 30, 2015 September 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$  2,359,293 $  20,937  3.52% $  2,241,447 $  19,949  3.57% $  1,997,010 $  18,303  3.64%    
Securities    191,530    465  0.96%    178,780    478  1.07%    189,208    369  0.77%    
Federal Home Loan Bank of Boston stock   22,883    166  2.88%    20,310    86  1.70%    17,724    55  1.23%    
Federal funds and other earning assets    11,089    8  0.29%    10,032    5  0.20%    4,918    6  0.48%    
Total interest-earning assets    2,584,795    21,576  3.31%    2,450,569    20,518  3.36%    2,208,860    18,733  3.36%    
Noninterest-earning assets    122,438       121,820       106,705       
Total assets $  2,707,233    $  2,572,389    $  2,315,565       
                
Interest-bearing liabilities:               
NOW accounts$  486,798 $  357  0.29% $  454,532 $  310  0.27% $  436,303 $  313  0.28%    
Money market   437,000    867  0.79%    435,749    798  0.73%    406,293    748  0.73%    
Savings accounts    210,978    58  0.11%    217,651    57  0.11%    199,505    57  0.11%    
Certificates of deposit    430,152    1,130  1.04%    392,941    975  1.00%    330,497    727  0.87%    
Total interest-bearing deposits    1,564,928    2,412  0.61%    1,500,873    2,140  0.57%    1,372,598    1,845  0.53%    
Federal Home Loan Bank of Boston Advances   411,236    890  0.86%    366,460    804  0.88%    270,250    479  0.70%    
Repurchase agreement borrowings   10,500    96  3.63%    10,500    92  3.51%    21,000    182  3.44%    
Repurchase liabilities    57,644    24  0.17%    52,043    29  0.22%    59,624    37  0.25%    
Total interest-bearing liabilities    2,044,308    3,422  0.66%    1,929,876    3,065  0.64%    1,723,472    2,543  0.59%    
Noninterest-bearing deposits   368,200       348,857       321,008       
Other noninterest-bearing liabilities    51,089       52,831       36,481       
Total liabilities    2,463,597       2,331,564       2,080,961       
Stockholders' equity   243,636       240,825       234,604       
Total liabilities and stockholders' equity$  2,707,233    $  2,572,389    $  2,315,565          
                
Tax-equivalent net interest income $  18,154    $  17,453    $  16,190      
Less: tax-equivalent adjustment    (482)      (354)      (205)     
Net interest income $  17,672    $  17,099    $  15,985      
                
Net interest rate spread (2)    2.65%    2.72%    2.78%    
Net interest-earning assets (3) $  540,487    $  520,693    $  485,388       
Net interest margin (4)    2.79%    2.86%    2.91%    
Average interest-earning assets to average interest-bearing liabilities                
 126.44%  126.98%  128.16%    
                
(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 Nine Months Ended September 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$  2,256,907 $  60,259  3.57% $  1,914,846 $  52,742  3.68%  
Securities    188,781    1,337  0.95%    172,482    1,026  0.80%  
Federal Home Loan Bank of Boston stock   21,004    331  2.11%    15,218    142  1.25%  
Federal funds and other earning assets    11,166    19  0.23%    3,913    12  0.41%  
Total interest-earning assets    2,477,858    61,946  3.34%    2,106,459  53,922  3.42%  
Noninterest-earning assets    118,969       105,511     
Total assets $  2,596,827    $  2,211,970     
          
Interest-bearing liabilities:         
NOW accounts$  463,878 $  988  0.28% $  374,084 $  695  0.25%  
Money market   450,985    2,635  0.78%    410,066    2,186  0.71%  
Savings accounts    212,427    172  0.11%    198,978    154  0.10%  
Certificates of deposit    397,094    2,966  1.00%    334,037    2,215  0.89%  
Total interest-bearing deposits    1,524,384    6,761  0.59%    1,317,165  5,250  0.53%  
Federal Home Loan Bank of Boston Advances   361,094    2,445  0.91%    237,576    1,166  0.66%  
Repurchase agreement borrowings   13,346    351  3.52%    21,000    538  3.43%  
Repurchase liabilities    56,061    87  0.21%    57,984    109  0.25%  
Total interest-bearing liabilities    1,954,885    9,644  0.66%    1,633,725  7,063  0.58%  
Noninterest-bearing deposits   349,444       308,112     
Other noninterest-bearing liabilities    52,000       36,664     
Total liabilities    2,356,329       1,978,501     
Stockholders' equity   240,498       233,469     
Total liabilities and stockholders' equity$  2,596,827    $  2,211,970     
          
Tax-equivalent net interest income $  52,302    $  46,859    
Less: tax-equivalent adjustment    (1,156)      (560)   
Net interest income $  51,146    $  46,299    
          
Net interest rate spread (2)    2.68%    2.84%  
Net interest-earning assets (3) $  522,973    $  472,734     
Net interest margin (4)    2.82%    2.97%  
Average interest-earning assets to average interest-bearing liabilities          
 126.75%  128.94%  
          
(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 September 30, 2015, June 30, 2015, March 31, 2015, December 31, 2014 and September 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 
  September 30, June 30, March 31, December 31, September 30, 
(Dollars in thousands, except per share data) 2015   2015   2015   2014   2014  
Net Income$  4,215  $  3,472  $  2,511  $  3,147  $  2,506  
 Adjustments:          
 Plus: Accelerated vesting of stock compensation -   258   140   -   -  
 Plus: Employee severance -   -   93   -   -  
 Less: Prepayment penalty fees -   (35)  -   -   -  
 Less: Non-recurring payment related to a loan participation -   -   -   (250)  -  
 Less: Gain on sale of foreclosed real estate (557)  -   -   -   -  
 Less: Net gain on sales of investments -   (1,250)  (273)  -   -  
Total core adjustments before taxes (557)  (1,027)  (40)  (250)  -  
 Tax benefit on core adjustments 195   359   14   88   -  
 Tax rate adjustment (1) -   -   -   (441)  -  
Total core adjustments after taxes (362)  (668)  (26)  (603)  -  
Total core net income$  3,853  $  2,804  $  2,485  $  2,544  $  2,506  
            
            
Total net interest income$  17,672  $  17,099  $  16,375  $  16,395  $  15,985  
 Less: Prepayment penalty fees -   (35)  -   -   -  
 Less: Non-recurring payment related to a loan participation -   -   -   (250)  -  
Total core net interest income$  17,672  $  17,064  $  16,375  $  16,145  $  15,985  
            
Total noninterest income$  3,241  $  4,074  $  2,664  $  2,498  $  2,778  
 Less: Net gain on sales of investments -   (1,250)  (273)  -   -  
Total core noninterest income$  3,241  $  2,824  $  2,391  $  2,498  $  2,778  
            
Total noninterest expense$  14,718  $  15,597  $  14,937  $  14,615  $  14,219  
 Less: Accelerated vesting of stock compensation -     (258)  (140)  -   -  
 Less: Employee severances -   -   (93)  -   -  
 Less: Gain on sale of foreclosed real estate   557   -   -   -   -  
Total core noninterest expense$  15,275  $  15,339  $  14,704  $  14,615  $  14,219  
            
Core earnings per common share, diluted$  0.25  $  0.19  $  0.16  $  0.17  $  0.17  
            
Core return on average assets (annualized) 0.57%  0.44%  0.40%  0.42%  0.43% 
Core return on average equity (annualized) 6.33%  4.66%  4.19%  4.29%  4.27% 
Core non-interest expense to average assets (annualized) 2.26%  2.43%  2.34%  2.39%  2.46% 
Efficiency ratio (2)  73.04%  77.13%  78.35%  78.39%  75.78% 
            
Tangible book value (3) $  15.30  $  15.01  $  14.82  $  14.64  $  14.56  
            
            
(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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