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First Connecticut Bancorp, Inc. reports first quarter 2016 earnings of $0.24 earnings per share

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FARMINGTON, Conn., April 20, 2016 (GLOBE NEWSWIRE) -- First Connecticut Bancorp, Inc. (the "Company") (NASDAQ: FBNK), the holding company for Farmington Bank (the "Bank"), reported net income of $3.6 million, or $0.24 diluted earnings per share for the quarter ended March 31, 2016 compared to net income of $2.5 million, or $0.17 diluted earnings per share for the quarter ended March 31, 2015.

"Despite the continued challenging operating environment, we are pleased with our first quarter results reflecting continued growth in tangible book value and earnings per share. Last year we indicated loan growth would slow during 2016, as we believe competition in the market has loosened credit standards, and we believe taking on additional credit risk to drive earnings is not prudent. We remain diligent with respect to expense control while maintaining solid overall risk management fundamentals," stated John J. Patrick Jr., First Connecticut Bancorp's Chairman, President and CEO.

"We are pleased with our deposit growth especially in our new western Massachusetts branches where we have over $80.0 million in new deposits since the two branches opened in the fourth quarter of 2015. Additionally, we look forward to expanding into Vernon and Manchester, CT later this year."

Financial Highlights

  • Net interest income increased $143,000 to $17.5 million in the first quarter of 2016 compared to the linked quarter and increased $1.1 million or 7% compared to the first quarter of 2015.
  • Net interest rate margin increased 6 basis points to 2.82% in the first quarter of 2016 compared to 2.76% in the linked quarter and 2.83% in the prior year quarter.
  • Core noninterest expense to average assets was 2.27% in the first quarter of 2016 compared to 2.37% in the linked quarter and 2.34% in the first quarter of 2015.
  • Our loan to deposit ratio improved to 113.0% compared to 118.6% at December 31, 2015 and 116.9% at March 31, 2015.
  • Tangible book value per share increased to $15.72 for the quarter ended March 31, 2016 compared to $15.47 on a linked quarter basis and $14.82 at March 31, 2015.
  • Loans remained flat at $2.4 billion during the quarter ended March 31, 2016 and increased $164.3 million or 7% from a year ago. 
  • Overall deposits increased $106.5 million to $2.1 billion in the first quarter of 2016 compared to the linked quarter and increased $209.9 million or 11% from a year ago. 
  • Checking accounts grew by 2.5% or 1,284 net new accounts in the first quarter of 2016 and by 13.1% or 6,079 net new accounts from a year ago.
  • Net gain on loans sold decreased $77,000 to $490,000 in the first quarter of 2016 compared to the linked quarter primarily due to a seasonal decrease in volume.
  • Asset quality improved as loan delinquencies 30 days and greater represented 0.55% of total loans at March 31, 2016 compared to 0.63% at December 31, 2015 and 0.64% at March 31, 2015.  Non-accrual loans represented 0.55% of total loans compared to 0.63% of total loans on a linked quarter basis and 0.64% of total loans at March 31, 2015. 
  • The allowance for loan losses represented 0.85% of total loans at March 31, 2016, 0.86% at December 31, 2015 and 0.87% at March 31, 2015. 
  • The Company paid a quarterly cash dividend of $0.07 per share during the first quarter, an increase of $0.01 compared to the linked quarter.

First quarter 2016 compared with fourth quarter 2015

Net interest income

  • Net interest income increased $143,000 to $17.5 million in the first quarter of 2016 compared to the linked quarter primarily due to a 5 basis point increase in the loans yield offset by increases in interest expense related to money market and certificate of deposit promotions.
  • Net interest margin increased 6 basis points to 2.82% in the first quarter of 2016 compared to 2.76% in the linked quarter primarily due to a 5 basis point increase in the yield on loans. 

Provision for loan losses

  • Provision for loan losses was $217,000 for the first quarter of 2016 compared to $776,000 for the linked quarter.  The decrease was primarily due to $293,000 in charge-offs during the linked quarter related to one commercial customer who is in bankruptcy.
  • Net charge-offs in the quarter were $241,000 or 0.04% to average loans (annualized) compared to $588,000 or 0.10% to average loans (annualized) in the linked quarter.
  • The allowance for loan losses represented 0.85% of total loans at March 31, 2016 compared to 0.86% of total loans at December 31, 2015. 

Noninterest income

  • Total noninterest income decreased $568,000 to $2.9 million in the first quarter of 2016 compared to the linked quarter primarily due to a $312,000 decrease in bank owned life insurance income.
  • Other income includes swap fees totaling $315,000 compared to $313,000 in the linked quarter.
  • Net gain on loans sold decreased $77,000 to $490,000 primarily due to a seasonal decrease in volume.

Noninterest expense

  • Noninterest expense decreased $681,000 in the first quarter of 2016 to $15.3 million compared to the linked quarter primarily due to a $352,000 decrease in salaries and employee benefits and a $342,000 decrease in marketing.
  • Salaries and employee benefits decreased $352,000 on a linked quarter basis primarily due to a $465,000 decrease in incentives offset by a $161,000 increase in employee benefits.
  • Marketing decreased $342,000 on a linked quarter basis primarily due to costs incurred in the linked quarter related to our expansion into western Massachusetts.

Income tax expense

  • Income tax expense was $1.3 million in the first quarter of 2016 compared to $1.7 million in the linked quarter. The decrease in income tax expense was primarily due to a linked quarter $768,000 valuation allowance related to a deferred tax asset associated with the establishment of the Bank's foundation in 2011 offset by an increase in income before taxes.

First quarter 2016 compared with first quarter 2015

Net interest income

  • Net interest income increased $1.1 million to $17.5 million in the first quarter of 2016 compared to the prior year quarter due primarily to a $199.1 million increase in the average loan balance offset by a $660,000 increase in interest expense.  
  • Net interest margin decreased 1 basis point to 2.82% in the first quarter of 2016 compared to 2.83% in the prior year quarter.

Provision for loan losses

  • Provision for loan losses was $217,000 for the first quarter of 2016 compared to $615,000 for the prior year quarter.
  • Net charge-offs in the quarter were $241,000 or 0.04% to average loans (annualized) compared to $343,000 or 0.06% to average loans (annualized) in the prior year quarter.
  • The allowance for loan losses represented 0.85% of total loans at March 31, 2016 and 0.87% of total loans at March 31, 2015. 

Noninterest income

  • Total noninterest income increased $236,000 to $2.9 million in the first quarter of 2016 compared to the prior year quarter primarily due to a $111,000 increase in customer service fees, $141,000 increase in bank owned life insurance income and a $282,000 increase in other noninterest income offset by a $273,000 decrease in gain on sales of investments.
  • Other income increased $282,000 to $458,000 in the first quarter of 2016 compared to the prior year quarter primarily due to a $314,000 increase in swaps fees offset by a $76,000 decrease in mortgage banking derivatives income.
  • There was no gain on sale of investments in the first quarter of 2016 compared to $273,000 gain on sale of investments in the prior year quarter.

Noninterest expense

  • Noninterest expense increased $340,000 in the first quarter of 2016 to $15.3 million compared to the prior year quarter primarily due to a $586,000 increase in salaries and employee benefits offset by decreases in occupancy expense and other operating expenses.
  • Salaries and employee benefits increased $586,000 primarily due to our branch expansion into western Massachusetts and to maintain the Bank's growth.

Income tax expense

  • Income tax expense was $1.3 million in the first quarter of 2016 compared to $976,000 in the prior year quarter.  The increase in income tax expense in the first quarter of 2016 was primarily due to a $1.4 million increase in income before taxes.

March 31, 2016 compared to March 31, 2015

Financial Condition

  • Total assets increased $152.5 million or 6% at March 31, 2016 to $2.7 billion compared to $2.5 billion at March 31, 2015, largely reflecting an increase in net loans.
  • Our investment portfolio totaled $148.6 million at March 31, 2016 compared to $194.8 million at March 31, 2015, a decrease of $46.2 million due to reduction in collateral requirements.
  • Net loans increased $163.3 million or 8% at March 31, 2016 to $2.4 billion compared to $2.2 billion at March 31, 2015 due to our continued focus on commercial and residential lending.
  • Deposits increased $209.9 million to $2.1 billion at March 31, 2016 compared to $1.9 billion at March 31, 2015 primarily due to increases in NOW accounts, demand deposits and certificates of deposit 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 $43.2 million at March 31, 2016.
  • Federal Home Loan Bank of Boston advances decreased $49.1 million to $259.6 million at March 31, 2016 compared to $308.7 million at March 31, 2015.  Advances are used to support loan and securities growth.

Asset Quality

  • At March 31, 2016, the allowance for loan losses represented 0.85% of total loans and 154.08% of non-accrual loans, compared to 0.86% of total loans and 135.44% of non-accrual loans at December 31, 2015 and 0.87% of total loans and 136.53% of non-accrual loans at March 31, 2015.
  • Loan delinquencies 30 days and greater represented 0.55% of total loans at March 31, 2016 compared to 0.63% of total loans at December 31, 2015 and 0.64% of total loans at March 31, 2015.
  • Non-accrual loans represented 0.55% of total loans at March 31, 2016 compared to 0.63% of total loans at December 31, 2015 and 0.64% of total loans at March 31, 2015.
  • Net charge-offs in the quarter were $241,000 or 0.04% to average loans (annualized) compared to $588,000 or 0.10% to average loans (annualized) in the linked quarter and $343,000 or 0.06% 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 12.88% at March 31, 2016. 
  • Tangible book value per share is $15.72 compared to $15.47 on a linked quarter basis and $14.82 at March 31, 2015.
  • During the first quarter of 2016, the Company repurchased 147,100 shares of common stock at an average price per share of $16.13 at a total cost of $2.4 million.  Repurchased shares are held as treasury stock and will be available for general corporate purposes.  The Company had 610,645 shares remaining to repurchase at March 31, 2016 from prior regulatory approval.
  • At March 31, 2016, 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 and pre-approved unsecured lines of credit.

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, April 21, 2016 at 10:30am Eastern Time to discuss first 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 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 
 March 31, December 31, September 30, June 30, March 31, 
(Dollars in thousands, except per share data) 2016   2015   2015   2015   2015  
Selected Financial Condition Data:          
           
Total assets$2,701,614  $2,708,546  $2,708,454  $2,626,217  $2,549,074  
Cash and cash equivalents 59,166   59,139   47,447   42,992   44,847  
Securities held-to-maturity, at amortized cost 19,964   32,246   25,486   34,366   21,006  
Securities available-for-sale, at fair value 128,681   132,424   171,390   143,799   173,829  
Federal Home Loan Bank of Boston stock, at cost 15,688   21,729   23,038   21,496   19,785  
Loans, net 2,350,245   2,341,598   2,318,257   2,268,385   2,186,937  
Deposits 2,097,832   1,991,358   1,973,355   1,878,040   1,887,954  
Federal Home Loan Bank of Boston advances 259,600   377,600   373,600   400,700   308,700  
Total stockholders' equity 248,013   245,721   243,195   239,082   237,709  
Allowance for loan losses 20,174   20,198   20,010   19,581   19,232  
Non-accrual loans 13,093   14,913   16,668   12,973   14,086  
Impaired loans 38,588   41,017   42,664   39,975   42,130  
Loan delinquencies 30 days and greater 13,095   14,945   15,598   13,244   14,193  
           
Selected Operating Data:          
           
Interest income$21,323  $21,094  $21,094  $20,164  $19,532  
Interest expense 3,817   3,731   3,422   3,065   3,157  
Net interest income 17,506   17,363   17,672   17,099   16,375  
Provision for loan losses 217   776   386   663   615  
Net interest income after provision for loan losses 17,289   16,587   17,286   16,436   15,760  
Noninterest income 2,900   3,468   3,241   4,074   2,664  
Noninterest expense 15,277   15,958   14,718   15,597   14,937  
Income before income taxes 4,912   4,097   5,809   4,913   3,487  
Income tax expense 1,299   1,716   1,594   1,441   976  
           
Net income$3,613  $2,381  $4,215  $3,472  $2,511  
           
Performance Ratios (annualized):          
           
Return on average assets 0.54%  0.35%  0.62%  0.54%  0.40% 
Return on average equity 5.82%  3.86%  6.92%  5.77%  4.24% 
Net interest rate spread (1) 2.65%  2.61%  2.65%  2.72%  2.68% 
Net interest rate margin (2) 2.82%  2.76%  2.79%  2.86%  2.83% 
Non-interest expense to average assets (3) 2.27%  2.37%  2.26%  2.39%  2.34% 
Efficiency ratio (4) 75.19%  78.19%  73.04%  77.13%  78.35% 
Average interest-earning assets to average          
interest-bearing liabilities 128.45
%  127.48%  126.44%  126.98%  126.86% 
Loans to deposits 112.99%  118.60%  118.49%  121.83%  116.86% 
           
Asset Quality Ratios:          
           
Allowance for loan losses as a percent of total loans 0.85%  0.86%  0.86%  0.86%  0.87% 
Allowance for loan losses as a percent of          
non-accrual loans 154.08%  135.44%  120.05%  150.94%  136.53% 
Net charge-offs (recoveries) to average loans (annualized) 0.04%  0.10%  (0.01%)  0.06%  0.06% 
Non-accrual loans as a percent of total loans 0.55%  0.63%  0.71%  0.57%  0.64% 
Non-accrual loans as a percent of total assets 0.48%  0.55%  0.62%  0.49%  0.55% 
Loan delinquencies 30 days and greater as a          
percent of total loans 0.55%  0.63%  0.67%  0.58%  0.64% 
           
Per Share Related Data:          
           
Basic earnings per share$0.24  $0.16  $0.28  $0.23  $0.17  
Diluted earnings per share$0.24  $0.16  $0.28  $0.23  $0.17  
Dividends declared per share$0.07  $0.06  $0.06  $0.05  $0.05  
Tangible book value (5)$15.72  $15.47  $15.30  $15.01  $14.82  
Common stock shares outstanding 15,780,657   15,881,663   15,893,263   15,922,888   16,035,005  
Weighted-average basic shares outstanding 14,720,892   14,785,058   14,632,951   14,694,472   14,722,112  
Weighted-average diluted shares outstanding 15,012,540   15,146,365   14,887,461   14,839,454   14,850,597  
           
           
(1) Represents the difference between the yield on average interest-earning assets and the cost of average interest-bearing liabilities on a tax-equivalent basis. 
           
(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 
 March 31, December 31, September 30, June 30, March 31, 
(Dollars in thousands) 2016   2015   2015   2015   2015  
Capital Ratios:          
           
Equity to total assets at end of period 9.18%  9.07%  8.98%  9.10%  9.33% 
Average equity to average assets 9.22%  9.17%  9.00%  9.36%  9.45% 
Total Capital (to Risk Weighted Assets) 12.88%* 12.88%  12.72%  13.11%  13.44% 
Tier I Capital (to Risk Weighted Assets) 11.92%* 11.91%  11.76%  12.12%  12.44% 
Common Equity Tier I Capital 11.92%* 11.91%  11.76%  12.12%  12.44% 
Tier I Leverage Capital (to Average Assets) 9.44%* 9.39%  9.24%  9.57%  9.72% 
Total equity to total average assets 9.20%  9.13%  8.98%  9.29%  9.48% 
           
* Estimated          
           
Loans and Allowance for Loan Losses:          
           
Real estate          
Residential$855,148  $849,722  $851,784  $888,376  $850,819  
Commercial 893,477   887,431   862,367   817,955   769,712  
Construction 36,557   30,895   29,244   42,858   53,913  
Installment 3,338   2,970   3,007   3,103   3,114  
Commercial 402,960   409,550   410,704   359,537   352,085  
Collateral 1,668   1,668   1,632   1,551   1,676  
Home equity line of credit 172,325   174,701   174,579   169,507   169,969  
Revolving credit 77   91   96   77   80  
Resort 759   784   807   837   880  
Total loans 2,366,309   2,357,812   2,334,220   2,283,801   2,202,248  
Net deferred loan costs 4,110   3,984   4,047   4,165   3,921  
Loans 2,370,419   2,361,796   2,338,267   2,287,966   2,206,169  
Allowance for loan losses (20,174)  (20,198)  (20,010)  (19,581)  (19,232) 
Loans, net$2,350,245  $2,341,598  $2,318,257  $2,268,385  $2,186,937  
           
Deposits:          
           
Noninterest-bearing demand deposits$396,356  $401,388  $359,757  $377,092  $337,211  
Interest-bearing          
NOW accounts 529,267   468,054   527,128   425,789   499,130  
Money market 488,497   460,737   440,249   430,558   462,532  
Savings accounts 223,188   220,389   211,170   220,154   214,083  
Time deposits 460,524   440,790   435,051   424,447   374,998  
Total interest-bearing deposits 1,701,476   1,589,970   1,613,598   1,500,948   1,550,743  
Total deposits$2,097,832  $1,991,358  $1,973,355  $1,878,040  $1,887,954  
           

 

 
First Connecticut Bancorp, Inc.
Consolidated Statements of Condition (Unaudited)
       March 31, December 31, March 31, 
        2016   2015   2015  
(Dollars in thousands)      
Assets         
Cash and due from banks$36,418  $45,732  $33,175  
Interest bearing deposits with other institutions 22,748   13,407   11,672  
Total cash and cash equivalents 59,166   59,139   44,847  
Securities held-to-maturity, at amortized cost 19,964   32,246   21,006  
Securities available-for-sale, at fair value 128,681   132,424   173,829  
Loans held for sale 6,145   9,637   2,187  
Loans (1)   2,370,419   2,361,796   2,206,169  
Allowance for loan losses (20,174)  (20,198)  (19,232) 
Loans, net 2,350,245   2,341,598   2,186,937  
Premises and equipment, net 18,210   18,565   18,289  
Federal Home Loan Bank of Boston stock, at cost 15,688   21,729   19,785  
Accrued income receivable 6,346   6,747   6,047  
Bank-owned life insurance 50,725   50,618   39,960  
Deferred income taxes 15,506   15,443   16,759  
Prepaid expenses and other assets 30,938   20,400   19,428  
Total assets$2,701,614  $2,708,546  $2,549,074  
             
Liabilities and Stockholders' Equity      
Deposits        
Interest-bearing$1,701,476  $1,589,970  $1,550,743  
Noninterest-bearing 396,356   401,388   337,211  
        2,097,832   1,991,358   1,887,954  
Federal Home Loan Bank of Boston advances 259,600   377,600   308,700  
Repurchase agreement borrowings 10,500   10,500   10,500  
Repurchase liabilities 31,118   35,769   59,198  
Accrued expenses and other liabilities 54,551   47,598   45,013  
Total liabilities 2,453,601   2,462,825   2,311,365  
             
Stockholders' Equity      
Common stock 181   181   181  
Additional paid-in-capital 182,747   181,997   179,683  
Unallocated common stock held by ESOP (11,363)  (11,626)  (12,422) 
Treasury stock, at cost (32,355)  (30,602)  (28,725) 
Retained earnings 115,444   112,933   105,339  
Accumulated other comprehensive loss (6,641)  (7,162)  (6,347) 
Total stockholders' equity 248,013   245,721   237,709  
Total liabilities and stockholders' equity$2,701,614  $2,708,546  $2,549,074  
             
(1) Loans include net deferred fees and unamortized premiums of $4.1 million, $4.0 million and $3.9 million at March 31, 2016, 
 December 31, 2015 and March 31, 2015, respectively.      
             
             

 

 
First Connecticut Bancorp, Inc.
Consolidated Statements of Income (Unaudited)
      Three Months Ended 
      March 31, December 31, March 31, 
(Dollars in thousands, except per share data) 2016   2015   2015  
Interest income      
Interest and fees on loans      
Mortgage $15,907  $15,670  $15,058  
Other   4,714   4,731   3,995  
Interest and dividends on investments      
United States Government and agency obligations 418   425   323  
Other bonds 13   13   18  
Corporate stocks 239   248   131  
Other interest income 32   7   7  
Total interest income 21,323   21,094   19,532  
Interest expense      
Deposits   2,736   2,611   2,209  
Interest on borrowed funds 967   1,004   751  
Interest on repo borrowings 95   97   163  
Interest on repurchase liabilities 19   19   34  
Total interest expense 3,817   3,731   3,157  
Net interest income 17,506   17,363   16,375  
Provision for loan losses 217   776   615  
Net interest income after provision for loan losses      
 17,289   16,587   15,760  
Noninterest income      
Fees for customer services 1,484   1,566   1,373  
Gain on sale of investments -   -   273  
Net gain on loans sold 490   567   520  
Brokerage and insurance fee income 54   52   49  
Bank owned life insurance income 414   726   273  
Other    458   557   176  
Total noninterest income 2,900   3,468   2,664  
Noninterest expense      
Salaries and employee benefits 9,376   9,728   8,790  
Occupancy expense 1,219   1,257   1,367  
Furniture and equipment expense 1,061   1,057   1,036  
FDIC assessment 404   430   412  
Marketing  421   763   409  
Other operating expenses 2,796   2,723   2,923  
Total noninterest expense 15,277   15,958   14,937  
Income before income taxes 4,912   4,097   3,487  
Income tax expense 1,299   1,716   976  
Net income$3,613  $2,381  $2,511  
            
Earnings per share:      
Basic  $0.24  $0.16  $0.17  
Diluted   0.24   0.16   0.17  
Weighted average shares outstanding:      
Basic   14,720,892   14,785,058   14,722,112  
Diluted   15,012,540   15,146,365   14,850,597  
            

 

 
First Connecticut Bancorp, Inc.
Consolidated Average Balances, Yields, and Rates (Unaudited)
 For The Three Months Ended
 March 31, 2016 December 31, 2015 March 31, 2015
 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$2,366,935 $21,132  3.59% $2,346,218 $20,916  3.54% $2,167,879 $19,391  3.63%
Securities 154,534  483  1.26%  185,697  495  1.06%  196,087  394  0.81%
Federal Home Loan Bank of Boston stock 19,804  187  3.80%  21,729  191  3.49%  19,785  79  1.62%
Federal funds and other earning assets 27,148  32  0.47%  14,258  7  0.19%  12,394  6  0.20%
Total interest-earning assets 2,568,421  21,834  3.42%  2,567,902  21,609  3.34%  2,396,145  19,870  3.36%
Noninterest-earning assets 127,192     122,500     112,534   
Total assets$2,695,613    $2,690,402    $2,508,679   
            
Interest-bearing liabilities:           
NOW accounts$522,876 $380  0.29% $498,658 $363  0.29% $449,897 $321  0.29%
Money market 478,954  995  0.84%  459,047  957  0.83%  480,687  970  0.82%
Savings accounts 216,102  58  0.11%  216,219  54  0.10%  208,626  57  0.11%
Certificates of deposit 450,917  1,303  1.16%  436,676  1,237  1.12%  367,501  861  0.95%
Total interest-bearing deposits 1,668,849  2,736  0.66%  1,610,600  2,611  0.64%  1,506,711  2,209  0.59%
Federal Home Loan Bank of Boston Advances 272,610  967  1.43%  343,024  1,004  1.16%  304,411  751  1.00%
Repurchase agreement borrowings 10,500  95  3.64%  10,500  97  3.67%  19,133  163  3.46%
Repurchase liabilities 47,543  19  0.16%  50,264  19  0.15%  58,507  34  0.24%
Total interest-bearing liabilities 1,999,502  3,817  0.77%  2,014,388  3,731  0.73%  1,888,762  3,157  0.68%
Noninterest-bearing deposits 390,926     380,041     330,865   
Other noninterest-bearing liabilities 56,765     49,273     52,092   
Total liabilities 2,447,193     2,443,702     2,271,719   
Stockholders' equity 248,420     246,700     236,960   
Total liabilities and stockholders' equity$2,695,613    $2,690,402    $2,508,679   
            
Tax-equivalent net interest income $18,017    $17,878    $16,713  
Less: tax-equivalent adjustment  (511)    (515)    (338) 
Net interest income $17,506    $17,363    $16,375  
            
Net interest rate spread (2)   2.65%    2.61%    2.68%
Net interest-earning assets (3)$568,919    $553,514    $507,383   
Net interest margin (4)   2.82%    2.76%    2.83%
Average interest-earning assets to average interest-bearing liabilities           
 128.45%  127.48%  126.86%
            
(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 on a tax-equivalent basis.         
(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 March 31, 2016, December 31, 2015, September 30, 2015, June 30, 2015 and March 31, 2015.  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
 March 31, December 31, September 30, June 30, March 31,
(Dollars in thousands, except per share data) 2016   2015   2015   2015   2015 
Net Income$3,613  $2,381  $4,215  $3,472  $2,511 
Adjustments:         
Plus: Accelerated vesting of stock compensation -   -   -   258   140 
Plus: Employee severance -   -   -   -   93 
Less: Prepayment penalty fees (10)  (43)  -   (35)  - 
Less: Non-recurring payment related to a loan participation -   -   -   -   - 
Less: Gain on sale of foreclosed real estate -   -   (557)  -   - 
Less: Bank-owned life insurance proceeds (77)  (379)  -   -   - 
Less: Net gain on sales of investments -   -   -   (1,250)  (273)
Total core adjustments before taxes (87)  (422)  (557)  (1,027)  (40)
Tax benefit on core adjustments 4   15   195   359   14 
Deferred tax asset valuation allowance (1) -   768   -   -   - 
Total core adjustments after taxes (83)  361   (362)  (668)  (26)
Total core net income$3,530  $2,742  $3,853  $2,804  $2,485 
          
          
Total net interest income$17,506  $17,363  $17,672  $17,099  $16,375 
Less: Prepayment penalty fees (10)  (43)  -   (35)  - 
Total core net interest income$17,496  $17,320  $17,672  $17,064  $16,375 
          
Total noninterest income$2,900  $3,468  $3,241  $4,074  $2,664 
Less: Bank-owned life insurance proceeds (77)  (379)  -   -   - 
Less: Net gain on sales of investments -   -   -   (1,250)  (273)
Total core noninterest income$2,823  $3,089  $3,241  $2,824  $2,391 
          
Total noninterest expense$15,277  $15,958  $14,718  $15,597  $14,937 
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$15,277  $15,958  $15,275  $15,339  $14,704 
          
Core earnings per common share, diluted$0.23  $0.18  $0.25  $0.19  $0.16 
          
Core return on average assets (annualized) 0.52%  0.41%  0.57%  0.44%  0.40%
Core return on average equity (annualized) 5.68%  4.45%  6.33%  4.66%  4.19%
Core non-interest expense to average assets (annualized) 2.27%  2.37%  2.26%  2.39%  2.34%
Efficiency ratio (2)  75.19%  78.19%  73.04%  77.13%  78.35%
          
Tangible book value (3) $15.72  $15.47  $15.30  $15.01  $14.82 
          
          
(1) Represents a valuation allowance related to a deferred tax asset associated with the establishment of the Bank's foundation in 2011.   
          
(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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