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First Connecticut Bancorp, Inc. reports second quarter 2017 earnings of $0.32 diluted earnings per share

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FARMINGTON, Conn., July 19, 2017 (GLOBE NEWSWIRE) -- First Connecticut Bancorp, Inc. (NASDAQ:FBNK), the holding company for Farmington Bank, reported a 37% increase in net income to $5.0 million, or $0.32 diluted earnings per share for the quarter ended June 30, 2017 compared to net income of $3.6 million, or $0.24 diluted earnings per share for the quarter ended June 30, 2016. 

Net income on a core earnings basis was $5.0 million, or $0.31 diluted core earnings per share for the quarter ended June 30, 2017 compared to $3.4 million, or $0.22 diluted core earnings per share for the quarter ended June 30, 2016.  Core earnings exclude non-recurring items.  

"I am once again pleased to report strong earnings for the second quarter. Year over year loan and deposit growth remained very strong, while our focus on total quality improvement continues to drive our efficiency ratio lower each quarter. Asset quality remains strong and our balance sheet remains well positioned for the current and projected future interest rate environment," stated John J. Patrick Jr., First Connecticut Bancorp's Chairman, President and CEO.

Financial Highlights

  • Net interest income increased $573,000 to $19.8 million in the second quarter of 2017 compared to the linked quarter and increased $2.0 million compared to the second quarter of 2016.  Net interest income includes $370,000 in prepayment penalty fees in the second quarter of 2016.
  • Core net interest margin was 2.92% in the second quarter of 2017 compared to 2.92% in the linked quarter and 2.81% in the prior year quarter.
  • Efficiency ratio was 66.31% in the second quarter of 2017 compared to 67.85% in the linked quarter and 73.52% in the prior year quarter.
  • Noninterest expense to average assets was 2.12% in the second quarter of 2017 and in the linked quarter and 2.23% in the prior year quarter.
  • Organic loan growth remained strong during the second quarter of 2017 as loans increased $59.8 million to $2.7 billion at June 30, 2017 primarily due to a $27.7 million increase in commercial real estate and a $10.5 million increase in commercial and industrial loans.  Loans increased $242.5 million or 10% from a year ago. 
  • Overall deposits decreased $42.8 million to $2.2 billion in the second quarter of 2017 due to municipal deposits seasonality compared to the linked quarter and increased $193.6 million or 9% from a year ago.
  • Loans to deposits were 119% in the second quarter of 2017 compared to 114% in the linked quarter and 118% in the second quarter of 2016.
  • Tangible book value per share increased to $16.86 for the quarter ended June 30, 2017 compared to $16.62 on a linked quarter basis and $15.95 at June 30, 2016.
  • Checking accounts grew by 7% or 3,927 net new accounts from a year ago.
  • Asset quality remained strong as loan delinquencies 30 days and greater represented 0.60% of total loans at June 30, 2017 compared to 0.67% of total loans at March 31, 2017 and 0.50% at June 30, 2016.  Non-accrual loans represented 0.60% of total loans at June 30, 2017 compared to 0.61% of total loans on a linked quarter basis and 0.56% of total loans at June 30, 2016. 
  • The allowance for loan losses represented 0.83% of total loans at June 30, 2017 and 0.82% of total loans at March 31, 2017 and 0.86% at June 30, 2016. 
  • The Company paid a quarterly cash dividend of $0.12 per share during the second quarter, an increase of $0.01 compared to the linked quarter and an increase of $0.05 from a year ago.

Second quarter 2017 compared with first quarter 2017

Net interest income

  • Net interest income increased $573,000 to $19.8 million in the second quarter of 2017 compared to the linked quarter primarily due to a $53.2 million increase in the average loans balance offset by a $331,000 increase in interest expense.
  • Net interest margin was 2.92% in the second quarter of 2017 compared to 2.94% in the linked quarter. Net interest margin, excluding $84,000 prepayment penalty fees, was 2.92% in the linked quarter.
  • The cost of interest-bearing liabilities increased 3 basis points to 79 basis points in the second quarter of 2017 compared to 76 basis points in the linked quarter.

Provision for loan losses

  • Provision for loan losses was $710,000 for the second quarter of 2017 compared to $325,000 for the linked quarter.       
  • Net charge-offs in the quarter were $22,000 or 0.00% to average loans (annualized) compared to $505,000 or 0.08% to average loans (annualized) in the linked quarter.    
  • The allowance for loan losses represented 0.83% of total loans at June 30, 2017 and 0.82% of total loans at March 31, 2017. 

Noninterest income

  • Total noninterest income increased $711,000 to $3.9 million in the second quarter of 2017 compared to the linked quarter primarily due to a $295,000 increase in net gain on loans sold and a $279,000 increase in bank owned life insurance income.  
  • Net gain on loans sold increased to $711,000 from $416,000 primarily due to an increase in volume and a higher rate environment.  
  • Bank owned life insurance income increased $279,000 primarily due to receiving $271,000 in death benefit proceeds. 
  • Other noninterest income includes swap fees totaling $562,000 compared to $711,000 in the linked quarter and an increase in SBIC fund income of $217,000.   

Noninterest expense

  • Noninterest expense increased $726,000 in the second quarter of 2017 to $15.9 million compared to the linked quarter primarily due to a $709,000 increase in salaries and employee benefits.
  • Salaries and employee benefits increased $709,000 to $10.0 million primarily due to $343,000 in severance expense and general salary increases which became effective in mid-March. 

Income tax expense

  • Income tax expense was $2.1 million in the second quarter of 2017 and $1.8 million in the first quarter of 2017.

Second quarter 2017 compared with second quarter 2016

Net interest income

  • Net interest income increased $2.0 million to $19.8 million in the second quarter of 2017 compared to the prior year quarter due primarily to a $242.0 million increase in the average loan balance and a 3 basis point increase in the loan yield to 3.65% offset by a $467,000 increase in interest expense.  
  • Net interest margin was 2.92% in the second quarter of 2017 compared to 2.87% in the prior year quarter.  Net interest margin, excluding $370,000 prepayment penalty fees, was 2.81% in the prior year quarter.
  • The cost of interest-bearing liabilities increased 2 basis points to 79 basis points in the second quarter of 2017 compared to 77 basis points in the prior year quarter.

Provision for loan losses

  • Provision for loan losses was $710,000 for the second quarter of 2017 compared to $801,000 for the prior year quarter.
  • Net charge-offs in the quarter were $22,000 or 0.00% to average loans (annualized) compared to $255,000 or 0.04% to average loans (annualized) in the prior year quarter.
  • The allowance for loan losses represented 0.83% of total loans at June 30, 2017 and 0.86% of total loans at June 30, 2016. 

Noninterest income

  • Total noninterest income increased $1.3 million to $3.9 million in the second quarter of 2017 compared to the prior year quarter primarily due to a $291,000 increase in bank owned life insurance and a $965,000 increase in other noninterest income.
  • Bank owned life insurance income increased $291,000 primarily due to receiving $271,000 in death benefit proceeds.
  • Other noninterest income increased $965,000 to $940,000 in the second quarter of 2017 compared to the prior year quarter primarily due to a $288,000 increase in swap fees, an $180,000 increase in SBIC fund income and a $374,000 mortgage servicing rights impairment in the prior year quarter.

Noninterest expense

  • Noninterest expense increased $1.2 million in the second quarter of 2017 to $15.9 million compared to the prior year quarter primarily due to an $823,000 increase in salaries and employee benefits, a $164,000 increase in marketing and a $255,000 increase in other operating expenses.
  • Salaries and employee benefits increased $823,000 to $10.0 million primarily due to $343,000 in severance expense and general salary increases which became effective in mid-March.
  • Marketing increased $164,000 primarily due to efforts to increase the Bank's sales support in central Connecticut and western Massachusetts.
  • Other operating expenses increased $255,000 to $2.6 million primarily due to a $354,000 decrease in the provision for off-balance sheet commitments as a result of a change in accounting estimate in the prior year quarter offset by a $151,000 decrease in directors' share-based compensation expense due to the 2012 Stock Incentive Plan fully vesting in September 2016.

Income tax expense

  • Income tax expense was $2.1 million in the second quarter of 2017 and $1.4 million in the prior year quarter.  Increase in income tax expense was primarily due to a $2.1 million increase in income over the prior year.

June 30, 2017 compared to June 30, 2016

Financial Condition

  • Total assets increased $212.9 million or 8% at June 30, 2017 to $3.0 billion compared to $2.8 billion at June 30, 2016, largely reflecting an increase in net loans.
  • Our investment portfolio totaled $163.1 million at June 30, 2017 compared to $157.0 million at June 30, 2016, an increase of $6.1 million due to an increase in collateral requirements.
  • Net loans increased $241.2 million or 10% at June 30, 2017 to $2.6 billion compared to $2.4 billion at June 30, 2016 due to our continued focus on commercial and residential lending.
  • Deposits increased $193.6 million or 9% to $2.2 billion at June 30, 2017 compared to $2.1 billion at June 30, 2016 primarily due to an increase in retail deposits as we continue to develop and grow relationships in the geographical areas we serve.  We had municipal deposit balances totaling $351.3 million and $298.9 million at June 30, 2017 and 2016, respectively. 
  • Federal Home Loan Bank of Boston advances increased $48.9 million to $389.5 million at June 30, 2017 compared to $340.6 million at June 30, 2016. 

Asset Quality

  • At June 30, 2017 the allowance for loan losses represented 0.83% of total loans and 137.54% of non-accrual loans, compared to 0.82% of total loans and 133.63% of non-accrual loans at March 31, 2017 and 0.86% of total loans and 153.22% of non-accrual loans at June 30, 2016.
  • Loan delinquencies 30 days and greater represented 0.60% of total loans at June 30, 2017 compared to 0.67% of total loans at March 31, 2017 and 0.50% of total loans at June 30, 2016.
  • Non-accrual loans represented 0.60% of total loans at June 30, 2017 compared to 0.61% of total loans at March 31, 2017 and 0.56% of total loans at June 30, 2016.
  • Net charge-offs in the quarter were $22,000 or 0.00% to average loans (annualized) compared to $505,000 or 0.08% to average loans (annualized) in the linked quarter and $255,000 or 0.04% 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 12.45% at June 30, 2017. 
  • Tangible book value per share is $16.86 compared to $16.62 on a linked quarter basis and $15.95 at June 30, 2016.
  • The Company had 600,945 shares remaining to repurchase at June 30, 2017 from prior regulatory approval. Repurchased shares are held as treasury stock and will be available for general corporate purposes. 
  • At June 30, 2017, 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 24 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, July 20, 2017 at 10:30am 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 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)   2017       2017       2016       2016       2016    
Selected Financial Condition Data:                    
                     
Total assets $   2,992,126     $   2,904,264     $   2,837,555     $   2,831,960     $   2,779,224    
Cash and cash equivalents      46,551         36,427         47,723         89,940         66,743    
Securities held-to-maturity, at amortized cost     50,655         50,320         33,061         7,338         7,640    
Securities available-for-sale, at fair value     112,443         105,541         103,520         134,094         149,396    
Federal Home Loan Bank of Boston stock, at cost     19,583         16,418         16,378         15,139         18,240    
Loans, net     2,644,618         2,585,521         2,525,983         2,455,101         2,403,420    
Deposits     2,245,004         2,287,852         2,215,090         2,247,873         2,051,438    
Federal Home Loan Bank of Boston advances     389,458         282,057         287,057         220,600         340,600    
Total stockholders' equity     268,836         264,667         260,176         255,615         252,242    
Allowance for loan losses     22,037         21,349         21,529         21,263         20,720    
Non-accrual loans     16,022         15,976         17,561         17,829         13,523    
Impaired loans     30,007         32,407         34,273         37,599         38,216    
Loan delinquencies 30 days and greater     16,059         17,346         17,271         18,238         12,206    
                     
Selected Operating Data:                    
                     
Interest income $   24,116     $   23,212     $   22,160     $   21,805     $   21,698    
Interest expense     4,293         3,962         4,038         4,050         3,826    
  Net interest income     19,823         19,250         18,122         17,755         17,872    
  Provision for loan losses     710         325         616         698         801    
Net interest income after provision for loan losses     19,113         18,925         17,506         17,057         17,071    
Noninterest income     3,876         3,165         3,536         3,685         2,617    
Noninterest expense     15,878         15,152         15,099         15,484         14,644    
Income before income taxes     7,111         6,938         5,943         5,258         5,044    
Income tax expense     2,109         1,845         1,757         1,485         1,401    
                     
Net income $   5,002     $   5,093     $   4,186     $   3,773     $   3,643    
                     
Performance Ratios (annualized):                    
                     
Return on average assets   0.68 %     0.71 %     0.59 %     0.54 %     0.54 %  
Return on average equity   7.43 %     7.67 %     6.43 %     5.89 %     5.77 %  
Net interest rate spread (1)    2.74 %     2.76 %     2.57 %     2.56 %     2.70 %  
Net interest rate margin (2)    2.92 %     2.94 %     2.75 %     2.74 %     2.87 %  
Non-interest expense to average assets (3)    2.12 %     2.12 %     2.13 %     2.22 %     2.23 %  
Efficiency ratio (4)   66.31 %     67.85 %     70.64 %     72.53 %     73.52 %  
Average interest-earning assets to average                    
  interest-bearing liabilities   128.46 %     129.85 %     130.20 %     129.42 %     129.54 %  
Loans to deposits   119 %     114 %     115 %     110 %     118 %  
                     
Asset Quality Ratios:                    
                     
Allowance for loan losses as a percent of total loans   0.83 %     0.82 %     0.85 %     0.86 %     0.86 %  
Allowance for loan losses as a percent of                    
  non-accrual loans   137.54 %     133.63 %     122.60 %     119.26 %     153.22 %  
Net charge-offs (recoveries) to average loans (annualized)   0.00 %     0.08 %     0.06 %     0.03 %     0.04 %  
Non-accrual loans as a percent of total loans   0.60 %     0.61 %     0.69 %     0.72 %     0.56 %  
Non-accrual loans as a percent of total assets   0.54 %     0.55 %     0.62 %     0.63 %     0.49 %  
Loan delinquencies 30 days and greater as a                    
  percent of total loans   0.60 %     0.67 %     0.68 %     0.74 %     0.50 %  
                     
Per Share Related Data:                    
                     
Basic earnings per share $   0.33     $   0.34     $   0.28     $   0.25     $   0.24    
Diluted earnings per share $   0.32     $   0.32     $   0.27     $   0.25     $   0.24    
Dividends declared per share $   0.12     $   0.11     $   0.09     $   0.08     $   0.07    
Tangible book value (5) $   16.86     $   16.62     $   16.37     $   16.17     $   15.95    
Common stock shares outstanding     15,942,614         15,923,514         15,897,698         15,805,748         15,818,494    
Weighted-average basic shares outstanding     15,107,190         15,068,036         14,973,610         14,823,914         14,765,452    
Weighted-average diluted shares outstanding     15,791,112         15,691,338         15,502,481         15,192,006         15,077,291    
                     
                     
(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  
  June 30,   March 31,   December 31,   September 30,   June 30,  
(Dollars in thousands)   2017       2017       2016       2016       2016    
Capital Ratios:                    
                     
Equity to total assets at end of period   8.98 %     9.11 %     9.17 %     9.03 %     9.08 %  
Average equity to average assets   9.18 %     9.28 %     9.18 %     9.20 %     9.34 %  
Total Capital (to Risk Weighted Assets)   12.45 % *   12.67 %     12.80 %     12.57 %     12.63 %  
Tier I Capital (to Risk Weighted Assets)   11.53 % *   11.74 %     11.84 %     11.62 %     11.69 %  
Common Equity Tier I Capital    11.53 % *   11.74 %     11.84 %     11.62 %     11.69 %  
Tier I Leverage Capital (to Average Assets)   9.36 % *   9.45 %     9.39 %     9.40 %     9.55 %  
Total equity to total average assets   9.17 %     9.25 %     9.18 %     9.17 %     9.32 %  
                     
* Estimated                    
                     
Loans and Allowance for Loan Losses:                    
                     
Real estate                    
  Residential $   962,732     $   954,764     $   907,946     $   864,054     $   842,427    
  Commercial     1,020,560         992,861         979,370         931,703         922,643    
  Construction     74,063         60,694         49,679         50,083         41,466    
Commercial     431,243         420,747         430,539         449,008         437,046    
Home equity line of credit     168,278         168,157         170,786         172,148         171,212    
Other     5,410         5,375         5,348         5,426         5,570    
  Total loans   2,662,286       2,602,598       2,543,668       2,472,422       2,420,364    
 Net deferred loan costs    4,369         4,272         3,844         3,942         3,776    
  Loans   2,666,655         2,606,870         2,547,512         2,476,364         2,424,140    
 Allowance for loan losses    (22,037 )       (21,349 )       (21,529 )       (21,263 )       (20,720 )  
  Loans, net $   2,644,618     $   2,585,521     $   2,525,983     $   2,455,101     $   2,403,420    
                     
Deposits:                    
                     
Noninterest-bearing demand deposits $   445,049     $   437,385     $   441,283     $   419,664     $   415,562    
Interest-bearing                    
  NOW accounts   547,868       622,844         542,764         590,213         429,973    
  Money market   522,070       521,759         532,681         536,979         498,847    
  Savings accounts   241,898       239,743         233,792         223,848         229,868    
  Time deposits   488,119       466,121         464,570         477,169         477,188    
Total interest-bearing deposits     1,799,955         1,850,467         1,773,807         1,828,209         1,635,876    
     Total deposits $   2,245,004     $   2,287,852     $   2,215,090     $   2,247,873     $   2,051,438    
                     


First Connecticut Bancorp, Inc.
Consolidated Statements of Condition (Unaudited)
 
              June 30,   March 31,   June 30,
                2017       2017       2016  
(Dollars in thousands)          
Assets                
Cash and due from banks $   37,308     $   32,706     $   37,455  
Interest bearing deposits with other institutions   9,243         3,721         29,288  
    Total cash and cash equivalents   46,551       36,427       66,743  
Securities held-to-maturity, at amortized cost   50,655       50,320       7,640  
Securities available-for-sale, at fair value   112,443       105,541       149,396  
Loans held for sale   2,537       2,464       6,912  
Loans (1)       2,666,655       2,606,870       2,424,140  
  Allowance for loan losses   (22,037 )     (21,349 )     (20,720 )
    Loans, net   2,644,618       2,585,521       2,403,420  
Premises and equipment, net   17,609       17,903       18,917  
Federal Home Loan Bank of Boston stock, at cost   19,583       16,418       18,240  
Accrued income receivable   7,939       7,398       6,736  
Bank-owned life insurance   56,802       52,044       51,029  
Deferred income taxes   13,970       14,790       15,405  
Prepaid expenses and other assets   19,419       15,438       34,786  
          Total assets $   2,992,126     $   2,904,264     $   2,779,224  
                       
Liabilities and Stockholders' Equity          
Deposits              
  Interest-bearing $   1,799,955     $   1,850,467     $   1,635,876  
  Noninterest-bearing   445,049       437,385       415,562  
                2,245,004       2,287,852       2,051,438  
Federal Home Loan Bank of Boston advances   389,458       282,057       340,600  
Repurchase agreement borrowings   10,500       10,500       10,500  
Repurchase liabilities   36,101       19,526       63,027  
Accrued expenses and other liabilities   42,227       39,662       61,417  
          Total liabilities   2,723,290       2,639,597       2,526,982  
                       
Stockholders' Equity          
  Common stock   181       181       181  
  Additional paid-in-capital   184,871       184,456       183,504  
  Unallocated common stock held by ESOP   (10,053 )     (10,309 )     (11,100 )
  Treasury stock, at cost   (29,770 )     (30,047 )     (31,868 )
  Retained earnings   129,972       126,882       117,980  
  Accumulated other comprehensive loss   (6,365 )     (6,496 )     (6,455 )
          Total stockholders' equity   268,836       264,667       252,242  
          Total liabilities and stockholders' equity $   2,992,126     $   2,904,264     $   2,779,224  
                       
(1) Loans include net deferred fees and unamortized premiums of $4.4 million, $4.3 million and $3.8 million at June 30, 2017, March 31, 2017 and June 30, 2016, 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)   2017     2017     2016       2017     2016  
Interest income                    
Interest and fees on loans                    
  Mortgage   $   18,056   $   17,558   $   16,120     $   35,614   $   32,027  
  Other       5,209     4,947     4,858       10,156     9,572  
Interest and dividends on investments                    
  United States Government and agency obligations   598     474     448         1,072     866  
  Other bonds   7     7     14         14     27  
  Corporate stocks   216     199     232         415     471  
Other interest income   30     27     26         57     58  
          Total interest income   24,116     23,212     21,698       47,328     43,021  
Interest expense                    
Deposits       3,026     2,911     2,735         5,937     5,471  
Interest on borrowed funds   1,164     949     980         2,113     1,947  
Interest on repo borrowings   96     95     96         191     191  
Interest on repurchase liabilities   7     7     15         14     34  
          Total interest expense   4,293     3,962     3,826       8,255     7,643  
          Net interest income   19,823     19,250     17,872       39,073     35,378  
Provision for loan losses   710     325     801       1,035     1,018  
          Net interest income                    
            after provision for loan losses   19,113     18,925     17,071       38,038     34,360  
Noninterest income                    
Fees for customer services   1,572     1,506     1,530       3,078     3,014  
Net gain on loans sold   711     416     751         1,127     1,241  
Brokerage and insurance fee income   55     50     54         105     108  
Bank owned life insurance income   598     319     307         917     721  
Other         940     874     (25 )       1,814     433  
          Total noninterest income   3,876     3,165     2,617       7,041     5,517  
Noninterest expense                    
Salaries and employee benefits   10,036     9,327     9,213         19,363     18,589  
Occupancy expense   1,187     1,313     1,189         2,500     2,408  
Furniture and equipment expense   985     984     1,018         1,969     2,079  
FDIC assessment   410     428     383         838     787  
Marketing     708     567     544         1,275     965  
Other operating expenses   2,552     2,533     2,297         5,085     5,093  
          Total noninterest expense   15,878     15,152     14,644       31,030     29,921  
          Income before income taxes   7,111     6,938     5,044       14,049     9,956  
Income tax expense   2,109     1,845     1,401       3,954     2,700  
          Net income $   5,002   $   5,093   $   3,643     $   10,095   $   7,256  
                                 
Earnings per share:                     
  Basic     $   0.33   $   0.34   $   0.24     $   0.67   $   0.49  
  Diluted         0.32       0.32       0.24         0.64       0.48  
Weighted average shares outstanding:                    
  Basic         15,107,190       15,068,036       14,765,452        15,087,721      14,743,172  
  Diluted         15,791,112       15,691,338       15,077,291        15,741,500      15,043,555  
                                 

 

First Connecticut Bancorp, Inc.
Consolidated Average Balances, Yields and Rates (Unaudited)
 
   
  For The Three Months Ended  
  June 30, 2017   March 31, 2017   June 30, 2016  
  Average
Balance
Interest and
Dividends (1)
Yield/
Cost
  Average
Balance
Interest and
Dividends (1)
Yield/
Cost
  Average
Balance
Interest and
Dividends (1)
Yield/
Cost
 
(Dollars in thousands)                        
Interest-earning assets:                        
Loans $   2,629,493 $   23,900   3.65 %   $   2,576,295 $   23,101   3.64 %   $   2,387,538 $   21,499   3.62 %  
Securities      157,230     659   1.68 %       142,929     529   1.50 %       150,257     515   1.38 %  
Federal Home Loan Bank of Boston stock     18,056     162   3.60 %       16,165     151   3.79 %       17,763     179   4.05 %  
Federal funds and other earning assets      7,715     30   1.56 %       6,351     27   1.72 %       22,607     26   0.46 %  
Total interest-earning assets      2,812,494     24,751   3.53 %       2,741,740     23,808   3.52 %       2,578,165     22,219   3.47 %  
Noninterest-earning assets      120,308           118,104           127,656      
Total assets  $   2,932,802       $   2,859,844       $   2,705,821      
                         
Interest-bearing liabilities:                        
NOW accounts $   595,350 $   574   0.39 %   $   602,631 $   528   0.36 %   $   470,835 $   336   0.29 %  
Money market     525,266     979   0.75 %       529,409     970   0.74 %       486,826     930   0.77 %  
Savings accounts      242,009     63   0.10 %       231,465     61   0.11 %       226,820     59   0.10 %  
Certificates of deposit      471,905     1,410   1.20 %       466,852     1,352   1.17 %       473,976     1,410   1.20 %  
Total interest-bearing deposits      1,834,530     3,026   0.66 %       1,830,357     2,911   0.64 %       1,658,457     2,735   0.66 %  
Federal Home Loan Bank of Boston Advances     315,665     1,164   1.48 %       245,591     949   1.57 %       279,601     980   1.41 %  
Repurchase agreement borrowings     10,500     96   3.67 %       10,500     95   3.67 %       10,500     96   3.68 %  
Repurchase liabilities      28,728     7   0.10 %       24,984     7   0.11 %       41,757     15   0.14 %  
Total interest-bearing liabilities      2,189,423     4,293   0.79 %       2,111,432     3,962   0.76 %       1,990,315     3,826   0.77 %  
Noninterest-bearing deposits     431,336           433,058           404,809      
Other noninterest-bearing liabilities      42,857           49,886           58,085      
Total liabilities      2,663,616           2,594,376           2,453,209      
Stockholders' equity     269,186           265,468           252,612      
Total liabilities and stockholders' equity $   2,932,802       $   2,859,844       $   2,705,821      
                         
Tax-equivalent net interest income   $   20,458         $   19,846         $   18,393      
Less: tax-equivalent adjustment       (635 )           (596 )           (521 )    
Net interest income   $   19,823         $   19,250         $   17,872      
                         
Net interest rate spread (2)      2.74 %       2.76 %       2.70 %  
Net interest-earning assets (3)  $   623,071       $   630,308       $   587,850      
Net interest margin (4)      2.92 %       2.94 %       2.87 %  
Average interest-earning assets to average interest-bearing liabilities                         
  128.46 %     129.85 %     129.54 %  
                         
(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.
Consolidated Average Balances, Yields and Rates (Unaudited)
   
     
  For The Six Months Ended June 30,    
    2017       2016      
  Average
Balance
Interest and
Dividends (1)
Yield/
Cost
  Average
Balance
Interest and
Dividends (1)
Yield/
Cost
   
(Dollars in thousands)                  
Interest-earning assets:                  
Loans $   2,603,041 $   47,001   3.64 %   $   2,377,236 $   42,631   3.61 %    
Securities      150,119     1,188   1.60 %       152,395     998   1.32 %    
Federal Home Loan Bank of Boston stock     17,116     313   3.69 %       18,783     366   3.92 %    
Federal funds and other earning assets      7,037     57   1.63 %       24,753     58   0.47 %    
Total interest-earning assets      2,777,313     48,559   3.53 %       2,573,167     44,053   3.44 %    
Noninterest-earning assets      119,211           127,550        
Total assets  $   2,896,524       $   2,700,717        
                   
Interest-bearing liabilities:                  
NOW accounts $   598,970 $   1,102   0.37 %   $   496,856 $   716   0.29 %    
Money market     527,326     1,949   0.75 %       482,890     1,925   0.80 %    
Savings accounts      236,766     124   0.11 %       221,461     117   0.11 %    
Certificates of deposit      469,393     2,762   1.19 %       462,446     2,713   1.18 %    
Total interest-bearing deposits      1,832,455     5,937   0.65 %       1,663,653     5,471   0.66 %    
Federal Home Loan Bank of Boston Advances     280,822     2,113   1.52 %       276,156     1,947   1.42 %    
Repurchase agreement borrowings     10,500     191   3.67 %       10,500     191   3.66 %    
Repurchase liabilities      26,866     14   0.11 %       44,650     34   0.15 %    
Total interest-bearing liabilities      2,150,643     8,255   0.77 %       1,994,959     7,643   0.77 %    
Noninterest-bearing deposits     432,192           397,868        
Other noninterest-bearing liabilities      46,352           57,374        
Total liabilities      2,629,187           2,450,201        
Stockholders' equity     267,337           250,516        
Total liabilities and stockholders' equity $   2,896,524       $   2,700,717        
                   
Tax-equivalent net interest income   $   40,304         $   36,410        
Less: tax-equivalent adjustment       (1,231 )           (1,032 )      
Net interest income   $   39,073         $   35,378        
                   
Net interest rate spread (2)      2.76 %       2.67 %    
Net interest-earning assets (3)  $   626,670       $   578,208        
Net interest margin (4)      2.93 %       2.85 %    
Average interest-earning assets to average interest-bearing liabilities                   
  129.14 %     128.98 %    
                   
(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.
Consolidated Average Balances, Yields and Rates (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, 2017, March 31, 2017, December 31, 2016, September 30, 2016 and June 30, 2016.  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)   2017       2017       2016       2016       2016    
Net Income $   5,002     $   5,093     $   4,186     $   3,773     $   3,643    
  Adjustments:                    
  Plus: Severance expense   343       -       -       -       -    
  Plus: Mortgage servicing rights (recovery) impairment   -       -       (283 )     (91 )     374    
  Less: Prepayment penalty fees   -       (84 )     -       -       (370 )  
  Less: Off-balance sheet commitments change in accounting estimate   -       -       -       -       (423 )  
  Less: Bank-owned life insurance proceeds   (271 )     -       -       -       -    
Total core adjustments before taxes   72       (84 )     (283 )     (91 )     (419 )  
  Tax (expense) benefit on core adjustments   (120 )     29       99       32       147    
  Deferred tax asset write-off (1)   -       -       137       -       -    
Total core adjustments after taxes   (48 )     (55 )     (47 )     (59 )     (272 )  
Total core net income $   4,954     $   5,038     $   4,139     $   3,714     $   3,371    
                       
                       
Total net interest income $   19,823     $   19,250     $   18,122     $   17,755     $   17,872    
  Less: Prepayment penalty fees   -       (84 )     -       -       (370 )  
Total core net interest income $   19,823     $   19,166     $   18,122     $   17,755     $   17,502    
                       
Total noninterest income $   3,876     $   3,165     $   3,536     $   3,685     $   2,617    
  Plus: Mortgage servicing rights (recovery) impairment   -       -       (283 )     (91 )     374    
  Less: Bank-owned life insurance proceeds   (271 )     -       -       -       -    
Total core noninterest income $   3,605     $   3,165     $   3,253     $   3,594     $   2,991    
                       
Total noninterest expense $   15,878     $   15,152     $   15,099     $   15,484     $   14,644    
  Plus: Off-balance sheet commitments change in accounting estimate   -       -       -       -       423    
  Less: Severance expense   (343 )     -       -       -       -    
Total core noninterest expense $   15,535     $   15,152     $   15,099     $   15,484     $   15,067    
                       
Core earnings per common share, diluted $   0.31     $   0.32     $   0.27     $   0.24     $   0.22    
                       
Core net interest rate margin (2)    2.92 %     2.92 %     2.75 %     2.74 %     2.81 %  
Core return on average assets (annualized)   0.68 %     0.70 %     0.58 %     0.53 %     0.50 %  
Core return on average equity (annualized)   7.36 %     7.59 %     6.36 %     5.80 %     5.34 %  
Core non-interest expense to average assets (annualized)   2.12 %     2.12 %     2.13 %     2.22 %     2.23 %  
Efficiency ratio (3)    66.31 %     67.85 %     70.64 %     72.53 %     73.52 %  
                       
Tangible book value (4)  $   16.86     $   16.62     $   16.37     $   16.17     $   15.95    
                       
(1) Represents a write-off of the remaining deferred tax asset associated with the establishment of the Bank's foundation in 2011.   
(2) Represents tax-equivalent core 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.   
(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.   

 

Contact:
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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