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First Connecticut Bancorp, Inc. reports first quarter 2018 net income of $6.0 million or $0.38 diluted earnings per share

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FARMINGTON, Conn., April 18, 2018 (GLOBE NEWSWIRE) -- First Connecticut Bancorp, Inc. (NASDAQ:FBNK), the holding company for Farmington Bank, reported a 18% increase in net income of $6.0 million or $0.38 diluted earnings per share for the quarter ended March 31, 2018 compared to net income of $5.1 million or $0.32 diluted earnings per share for the quarter ended March 31, 2017. 

"I am pleased to report solid earnings for the first quarter. Compared to the first quarter a year ago our return on average assets, return on average equity and efficiency ratio continue to improve. During the quarter I am also pleased to report we opened our 25th branch office in Manchester, Connecticut," stated John J. Patrick Jr., First Connecticut Bancorp's Chairman, President and CEO.

Financial Highlights

  • Net interest income increased $394,000 to $20.9 million in the first quarter of 2018 compared to the linked quarter and increased $1.7 million compared to the first quarter of 2017.
  • Organic loan growth remained strong during the first quarter of 2018 as loans increased $68.7 million to $2.8 billion at March 31, 2018 primarily due to a $69.8 million increase in residential real estate loans.  Loans increased $209.9 million or 8% from a year ago. 
  • Asset quality remained strong as loan delinquencies 30 days and greater represented 0.46% of total loans at March 31, 2018 compared to 0.63% of total loans at December 31, 2017 and 0.67% of total loans at March 31, 2017.  Non-accrual loans represented 0.46% of total loans at March 31, 2018 compared to 0.58% of total loans at December 31, 2017 and 0.61% of total loans at March 31, 2017. 
  • Overall deposits increased $9.3 million to $2.4 billion in the first quarter of 2018 compared to the linked quarter and increased $155.5 million or 7% from a year ago.
  • Loans to deposits ratio was 115% for the quarter ended March 31, 2018 compared to 113% in the linked quarter and 114% in the first quarter of 2017.
  • Checking accounts grew by 7% or 3,976 net new accounts from a year ago.
  • Net interest margin was 2.90% in the first quarter of 2018 compared to 2.91% in the linked quarter and 2.94% in the prior year quarter.
  • Efficiency ratio was 67.54% in the first quarter of 2018 compared to 65.06% in the linked quarter and 67.85% in the prior year quarter.
  • Noninterest expense to average assets was 2.10% in the first quarter of 2018 compared to 2.05% in the linked quarter and 2.12% in the prior year quarter.
  • Tangible book value per share was $17.32 for the quarter ended March 31, 2018 compared to $17.08 on a linked quarter basis and $16.62 at March 31, 2017.
  • The allowance for loan losses represented 0.80% of total loans at March 31, 2018 compared to 0.82% of total loans at December 31, 2017 and 0.82% at March 31, 2017. 
  • The Company paid a quarterly cash dividend of $0.16 per share during the first quarter, an increase of $0.01 compared to the linked quarter and an increase of $0.05 from a year ago.

First quarter 2018 compared with fourth quarter 2017

Net interest income

  • Net interest income increased $394,000 to $20.9 million in the first quarter of 2018 compared to the linked quarter primarily due to a $58.0 million increase in the average loans balance and a 7 basis point increase in the loan yield to 3.76% offset by a $518,000 increase in interest expense.
  • Net interest margin was 2.90% in the first quarter of 2018 compared to 2.91% in the linked quarter. The Tax Cuts and Jobs Act (the "Tax Act") negatively affected the net interest margin by 4 basis points on a tax-equivalent basis in the first quarter of 2018. 
  • The cost of interest-bearing liabilities increased 8 basis points to 97 basis points in the first quarter of 2018 compared to 89 basis points in the linked quarter.

Provision for loan losses

  • Provision for loan losses was $465,000 for the first quarter of 2018 compared to $299,000 for the linked quarter. 
  • Net charge-offs in the quarter were $293,000 or 0.04% to average loans (annualized) compared to $53,000 or 0.01% to average loans (annualized) in the linked quarter.
  • The allowance for loan losses represented 0.80% of total loans at March 31, 2018 and 0.82% of total loans at December 31, 2017. 

Noninterest income

  • Total noninterest income was $3.1 million in the first quarter of 2018 compared to $3.2 million in the linked quarter.
  • Net gain on loans sold decreased to $288,000 from $598,000 primarily due to a decrease in volume of loans sold.
  • Other noninterest income increased $317,000 to $801,000 due to a $382,000 increase in swap fees to $624,000 in the first quarter of 2018 compared to $242,000 in the linked quarter.

Noninterest expense

  • Noninterest expense increased $852,000 to $16.2 million in the first quarter of 2018 compared to the linked quarter primarily due to a $395,000 increase in salaries and employee benefits and a $357,000 increase in other operating expenses.
  • Salaries and employee benefits increased $395,000 in the first quarter of 2018 compared to the linked quarter primarily due to a $245,000 increase in cyclical payroll tax related expenses and an $83,000 increase in share based compensation expense related to the 2016 Stock Incentive Plan.
  • Other operating expenses increased $357,000 in the first quarter of 2018 compared to the linked quarter primarily due to increases of $209,000 in 3rd party services.

Income tax expense

Income tax expense was $1.4 million in the first quarter of 2018 and $7.5 million in the fourth quarter of 2017.  As a result of the Tax Act, the Company recorded a reduction in the value of its net deferred tax asset resulting in a charge of $5.0 million to income tax expense in the fourth quarter of 2017.

First quarter 2018 compared with first quarter 2017

Net interest income

  • Net interest income increased $1.7 million or 9% to $20.9 million in the first quarter of 2018 compared to the prior year quarter due primarily to a $195.8 million increase in the average loans balance and a 12 basis point increase in the loans yield to 3.76% offset by a $1.6 million increase in interest expense.  
  • Net interest margin was 2.90% in the first quarter of 2018 compared to 2.94% in the prior year quarter.  The Tax Act negatively affected the net interest margin by 4 basis points on a tax-equivalent basis in the first quarter of 2018. 
  • The cost of interest-bearing liabilities increased 21 basis points to 97 basis points in the first quarter of 2018 compared to 76 basis points in the prior year quarter.

Provision for loan losses

  • Provision for loan losses was $465,000 for the first quarter of 2018 compared to $325,000 for the prior year quarter.
  • Net charge-offs in the quarter were $293,000 or 0.04% to average loans (annualized) compared to $505,000 or 0.08% to average loans (annualized) in the prior year quarter.
  • The allowance for loan losses represented 0.80% of total loans at March 31, 2018 and 0.82% of total loans at March 31, 2017. 

Noninterest income

  • Total noninterest income was $3.1 million in the first quarter of 2018 compared to $3.2 million in the prior year quarter.
  • Net gain on loans sold decreased to $288,000 from $416,000 primarily due to a decrease in volume of loans sold.
  • Other noninterest income includes swap fees totaling $624,000 compared to $711,000 in the prior year quarter.

Noninterest expense

  • Noninterest expense increased $1.1 million to $16.2 million in the first quarter of 2018 compared to the prior year quarter primarily due to a $632,000 increase in salaries and employee benefits expense and a $441,000 increase in other operating expenses.
  • Salaries and employee benefits increased $632,000 to $9.8 million primarily due to general salary increases which became effective in March 2017 and a $123,000 increase in share based compensation expense related to the 2016 Stock Incentive Plan.
  • Other operating expenses increased $441,000 to $3.2 million primarily due to increases of $232,000 in 3rd party services.

Income tax expense

Income tax expense was $1.4 million in the first quarter of 2018 compared to $1.8 million in the prior year quarter. As a result of the Tax Act, the Company's federal tax rate was lowered from 35% to 21% for the first quarter of 2018.

March 31, 2018 compared to March 31, 2017

Financial Condition

  • Total assets increased $233.4 million or 8% at March 31, 2018 to $3.1 billion compared to $2.9 billion at March 31, 2017, reflecting a $208.7 million increase in net loans.
  • Our investment portfolio totaled $176.9 million at March 31, 2018 compared to $155.9 million at March 31, 2017, an increase of $21.1 million.
  • Net loans increased $208.7 million or 8% at March 31, 2018 to $2.8 billion compared to $2.6 billion at March 31, 2017 due to our continued focus on commercial and residential lending.
  • Deposits increased $155.5 million or 7% to $2.4 billion at March 31, 2018 compared to $2.3 billion at March 31, 2017 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 $424.6 million and $451.2 million at March 31, 2018 and 2017, respectively. 
  • Federal Home Loan Bank of Boston advances increased $73.4 million to $355.5 million at March 31, 2018 compared to $282.1 million at March 31, 2017. 

Asset Quality

  • At March 31, 2018 the allowance for loan losses represented 0.80% of total loans and 175.73% of non-accrual loans, compared to 0.82% of total loans and 142.15% of non-accrual loans at December 31, 2017 and 0.82% of total loans and 133.63% of non-accrual loans at March 31, 2017.
  • Loan delinquencies 30 days and greater represented 0.46% of total loans at March 31, 2018 compared to 0.63% of total loans at December 31, 2017 and 0.67% of total loans at March 31, 2017.
  • Non-accrual loans represented 0.46% of total loans at March 31, 2018 compared to 0.58% of total loans at December 31, 2017 and 0.61% of total loans at March 31, 2017.
  • Net charge-offs in the quarter were $293,000 or 0.04% to average loans (annualized) compared to $53,000 or 0.01% to average loans (annualized) in the linked quarter and $505,000 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 12.38% at March 31, 2018. 
  • Tangible book value per share is $17.32 compared to $17.08 on a linked quarter basis and $16.62 at March 31, 2017.
  • The Company had 600,945 shares remaining to repurchase at March 31, 2018 from prior regulatory approval. Repurchased shares are held as treasury stock and will be available for general corporate purposes. 
  • At March 31, 2018, 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 25 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 19, 2018 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)   2018       2017       2017       2017       2017  
Selected Financial Condition Data:                  
                   
Total assets $ 3,137,645     $ 3,055,050     $ 3,001,679     $ 2,992,126     $ 2,904,264  
Cash and cash equivalents   26,452       35,350       44,475       46,551       36,427  
Securities held-to-maturity, at amortized cost   80,977       74,985       56,848       50,655       50,320  
Securities available-for-sale, at fair value   95,945       87,251       87,299       112,443       105,541  
Federal Home Loan Bank of Boston stock, at cost   17,665       15,537       15,954       19,583       16,418  
Loans, net   2,794,187       2,725,633       2,676,411       2,644,618       2,585,521  
Deposits   2,443,357       2,434,100       2,382,551       2,245,004       2,287,852  
Federal Home Loan Bank of Boston advances   355,457       255,458       271,458       389,458       282,057  
Total stockholders' equity   276,861       272,459       273,193       268,836       264,667  
Allowance for loan losses   22,620       22,448       22,202       22,037       21,349  
Non-accrual loans   12,872       15,792       15,305       16,022       15,976  
Non-performing assets (1)   15,036       15,792       15,305       16,022       15,976  
Impaired loans   28,383       30,194       29,924       30,007       32,407  
Loan delinquencies 30 days and greater   13,036       17,254       17,808       16,059       17,346  
                   
Selected Operating Data:                  
                   
Interest income $ 26,463     $ 25,551     $ 25,604     $ 24,116     $ 23,212  
Interest expense   5,541       5,023       4,756       4,293       3,962  
Net interest income   20,922       20,528       20,848       19,823       19,250  
Provision for loan losses   465       299       217       710       325  
Net interest income after provision for loan losses   20,457       20,229       20,631       19,113       18,925  
Noninterest income   3,145       3,158       3,300       3,876       3,165  
Noninterest expense   16,239       15,387       15,919       15,878       15,152  
Income before income taxes   7,363       8,000       8,012       7,111       6,938  
Income tax expense   1,352       7,503       2,415       2,109       1,845  
Net income $ 6,011     $ 497     $ 5,597     $ 5,002     $ 5,093  
                   
Performance Ratios (annualized):                  
                   
Return on average assets   0.78 %     0.07 %     0.74 %     0.68 %     0.71 %
Core return on average assets   0.78 %     0.73 %     0.73 %     0.68 %     0.70 %
Return on average equity   8.68 %     0.72 %     8.17 %     7.43 %     7.67 %
Core return on average equity   8.65 %     7.86 %     8.01 %     7.36 %     7.59 %
Net interest rate spread (2)   2.69 %     2.71 %     2.77 %     2.74 %     2.76 %
Net interest rate margin (3)   2.90 %     2.91 %     2.95 %     2.92 %     2.94 %
Non-interest expense to average assets (4)   2.10 %     2.05 %     2.11 %     2.12 %     2.12 %
Efficiency ratio (5)   67.54 %     65.06 %     66.38 %     66.31 %     67.85 %
Average interest-earning assets to average                  
interest-bearing liabilities   128.49 %     129.44 %     128.50 %     128.46 %     129.85 %
Loans to deposits   115 %     113 %     113 %     119 %     114 %
                   
Asset Quality Ratios:                  
                   
Allowance for loan losses as a percent of total loans   0.80 %     0.82 %     0.82 %     0.83 %     0.82 %
Allowance for loan losses as a percent of                  
non-accrual loans   175.73 %     142.15 %     145.06 %     137.54 %     133.63 %
Net charge-offs (recoveries) to average loans (annualized)   0.04 %     0.01 %     0.01 %     0.00 %     0.08 %
Non-accrual loans as a percent of total loans   0.46 %     0.58 %     0.57 %     0.60 %     0.61 %
Non-performing assets as a percent of total assets   0.48 %     0.52 %     0.51 %     0.54 %     0.55 %
Loan delinquencies 30 days and greater as a                  
percent of total loans   0.46 %     0.63 %     0.66 %     0.60 %     0.67 %
                   
Per Share Related Data:                  
                   
Basic earnings per share $ 0.39     $ 0.03     $ 0.37     $ 0.33     $ 0.34  
Diluted earnings per share $ 0.38     $ 0.03     $ 0.35     $ 0.32     $ 0.32  
Dividends declared per share $ 0.16     $ 0.15     $ 0.14     $ 0.12     $ 0.11  
Tangible book value (6) $ 17.32     $ 17.08     $ 17.12     $ 16.86     $ 16.62  
Common stock shares outstanding   15,984,932       15,952,946       15,952,946       15,942,614       15,923,514  
Weighted-average basic shares outstanding   15,214,839       15,174,285       15,143,379       15,107,190       15,068,036  
Weighted-average diluted shares outstanding   15,900,088       15,882,690       15,820,659       15,791,112       15,691,338  
                   
                   
(1) Consists of non-accruing loans including non-accruing loans identified as troubled debt restructurings, loans past due more than 90 days and still accruing interest and other real estate owned.
(2) 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) Represents tax-equivalent net interest income as a percent of average interest-earning assets.            
(4) Represents core noninterest expense annualized divided by average assets.  See "Reconciliation of Non-GAAP Financial Measures" table.    
(5) 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.                  
(6) 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)   2018       2017       2017       2017       2017  
Capital Ratios:                  
                   
Equity to total assets at end of period   8.82 %     8.93 %     9.10 %     8.98 %     9.11 %
Average equity to average assets   8.96 %     9.23 %     9.10 %     9.18 %     9.28 %
Total Capital (to Risk Weighted Assets)   12.38 % *   12.38 %     12.50 %     12.45 %     12.67 %
Tier I Capital (to Risk Weighted Assets)   11.47 % *   11.45 %     11.57 %     11.53 %     11.74 %
Common Equity Tier I Capital   11.47 % *   11.45 %     11.57 %     11.53 %     11.74 %
Tier I Leverage Capital (to Average Assets)   9.17 % *   9.23 %     9.23 %     9.36 %     9.45 %
Total equity to total average assets   8.96 %     9.05 %     9.07 %     9.17 %     9.25 %
                   
* Estimated                  
                   
Loans and Allowance for Loan Losses:                  
                   
Real estate                  
Residential $ 1,059,116     $ 989,366     $ 969,679     $ 962,732     $ 954,764  
Commercial   1,071,485       1,063,755       1,028,930       1,020,560       992,861  
Construction   98,469       90,059       86,713       74,063       60,694  
Commercial   417,660       429,116       436,172       431,243       420,747  
Home equity line of credit   159,030       165,070       166,791       168,278       168,157  
Other   5,240       5,650       5,733       5,410       5,375  
Total loans   2,811,000       2,743,016       2,694,018       2,662,286       2,602,598  
Net deferred loan costs   5,807       5,065       4,595       4,369       4,272  
Loans   2,816,807       2,748,081       2,698,613       2,666,655       2,606,870  
Allowance for loan losses   (22,620 )     (22,448 )     (22,202 )     (22,037 )     (21,349 )
Loans, net $ 2,794,187     $ 2,725,633     $ 2,676,411     $ 2,644,618     $ 2,585,521  
                   
Deposits:                  
                   
Noninterest-bearing demand deposits $ 443,555     $ 473,428     $ 437,372     $ 445,049     $ 437,385  
Interest-bearing                  
NOW accounts   625,362       623,135       652,631       547,868       622,844  
Money market   587,389       559,297       549,674       522,070       521,759  
Savings accounts   242,377       237,380       233,330       241,898       239,743  
Certificates of deposit   544,674       540,860       509,544       488,119       466,121  
Total interest-bearing deposits   1,999,802       1,960,672       1,945,179       1,799,955       1,850,467  
Total deposits $ 2,443,357     $ 2,434,100     $ 2,382,551     $ 2,245,004     $ 2,287,852  
                   

 

First Connecticut Bancorp, Inc.
Consolidated Statements of Condition (Unaudited)
                       
              March 31,   December 31,   March 31,
                2018       2017       2017  
(Dollars in thousands)          
Assets                
Cash and due from banks $   25,385     $   33,320     $   32,706  
Interest bearing deposits with other institutions   1,067       2,030         3,721  
    Total cash and cash equivalents   26,452       35,350       36,427  
Securities held-to-maturity, at amortized cost   80,977       74,985       50,320  
Securities available-for-sale, at fair value   95,945       87,251       105,541  
Loans held for sale   5,980       5,295       2,464  
Loans (1)       2,816,807       2,748,081       2,606,870  
  Allowance for loan losses   (22,620 )     (22,448 )     (21,349 )
    Loans, net   2,794,187       2,725,633       2,585,521  
Premises and equipment, net   17,007       16,845       17,903  
Federal Home Loan Bank of Boston stock, at cost   17,665       15,537       16,418  
Accrued income receivable   9,043       8,979       7,398  
Bank-owned life insurance   57,852       57,511       52,044  
Deferred income taxes   7,763       7,662       14,790  
Prepaid expenses and other assets   24,774       20,002       15,438  
          Total assets $   3,137,645     $   3,055,050     $   2,904,264  
                       
Liabilities and Stockholders' Equity          
Deposits              
  Interest-bearing $   1,999,802     $   1,960,672     $   1,850,467  
  Noninterest-bearing   443,555       473,428       437,385  
                2,443,357       2,434,100       2,287,852  
Federal Home Loan Bank of Boston advances   355,457       255,458       282,057  
Repurchase agreement borrowings   -       10,500       10,500  
Repurchase liabilities   16,851       34,496       19,526  
Accrued expenses and other liabilities   45,119       48,037       39,662  
          Total liabilities   2,860,784       2,782,591       2,639,597  
                       
Stockholders' Equity          
  Common stock   181       181       181  
  Additional paid-in-capital   186,269       185,779       184,456  
  Unallocated common stock held by ESOP   (9,290 )     (9,539 )     (10,309 )
  Treasury stock, at cost   (29,204 )     (29,620 )     (30,047 )
  Retained earnings   136,303       131,887       126,882  
  Accumulated other comprehensive loss   (7,398 )     (6,229 )     (6,496 )
          Total stockholders' equity   276,861       272,459       264,667  
          Total liabilities and stockholders' equity $   3,137,645     $   3,055,050     $   2,904,264  
                       
(1) Loans include net deferred fees and unamortized premiums of $5.8 million, $5.1 million and $4.3 million at March 31, 2018, December 31, 2017 and March 31, 2017, 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) 2018   2017   2017
Interest income          
Interest and fees on loans          
  Mortgage   $ 19,927   $ 19,143   $ 17,558
  Other       5,465     5,494     4,947
Interest and dividends on investments          
  United States Government and agency obligations   797     613     474
  Other bonds   -     4     7
  Corporate stocks   241     259     199
Other interest income   33     38     27
        Total interest income   26,463     25,551     23,212
Interest expense          
Deposits       4,339     3,888     2,911
Interest on borrowed funds   1,119     1,031     949
Interest on repo borrowings   74     95     95
Interest on repurchase liabilities   9     9     7
        Total interest expense   5,541     5,023     3,962
        Net interest income   20,922     20,528     19,250
Provision for loan losses   465     299     325
        Net interest income          
          after provision for loan losses   20,457     20,229     18,925
Noninterest income          
Fees for customer services   1,657     1,663     1,506
Net gain on loans sold   288     598     416
Brokerage and insurance fee income   58     59     50
Bank owned life insurance income   341     354     319
Other         801     484     874
        Total noninterest income   3,145     3,158     3,165
Noninterest expense          
Salaries and employee benefits   9,772     9,377     9,140
Occupancy expense   1,329     1,261     1,313
Furniture and equipment expense   948     931     984
FDIC assessment   424     436     428
Marketing     605     578     567
Other operating expenses   3,161     2,804     2,720
        Total noninterest expense   16,239     15,387     15,152
        Income before income taxes   7,363     8,000     6,938
Income tax expense   1,352     7,503     1,845
        Net income $ 6,011   $ 497   $ 5,093
                       
Earnings per share:          
  Basic     $ 0.39   $ 0.03   $ 0.34
  Diluted       0.38     0.03     0.32
Weighted average shares outstanding:          
  Basic       15,214,839     15,174,285     15,068,036
  Diluted       15,900,088     15,882,690     15,691,338
                       

 

First Connecticut Bancorp, Inc.
Consolidated Average Balances, Yields and Rates (Unaudited)
                       
  For The Three Months Ended
  March 31, 2018   December 31, 2017   March 31, 2017
  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 $ 2,772,063 $ 25,692   3.76 %   $ 2,714,017 $ 25,272   3.69 %   $ 2,576,295 $ 23,101   3.64 %
Securities   175,912   851   1.96 %     147,768   676   1.81 %     142,929   529   1.50 %
Federal Home Loan Bank of Boston stock   14,986   187   5.06 %     14,860   200   5.34 %     16,165   151   3.79 %
Federal funds and other earning assets   2,140   33   6.25 %     7,833   38   1.92 %     6,351   27   1.72 %
Total interest-earning assets   2,965,101   26,763   3.66 %     2,884,478   26,186   3.60 %     2,741,740   23,808   3.52 %
Noninterest-earning assets   126,282         124,537         118,104    
Total assets $ 3,091,383       $ 3,009,015       $ 2,859,844    
                       
Interest-bearing liabilities:                      
NOW accounts $ 664,211 $ 1,145   0.70 %   $ 624,372 $ 916   0.58 %   $ 602,631 $ 528   0.36 %
Money market   568,362   1,317   0.94 %     558,743   1,212   0.86 %     529,409   970   0.74 %
Savings accounts   234,660   63   0.11 %     235,058   65   0.11 %     231,465   61   0.11 %
Certificates of deposit   538,189   1,814   1.37 %     517,252   1,695   1.30 %     466,852   1,352   1.17 %
Total interest-bearing deposits   2,005,422   4,339   0.88 %     1,935,425   3,888   0.80 %     1,830,357   2,911   0.64 %
Federal Home Loan Bank of Boston Advances   261,580   1,119   1.73 %     252,775   1,031   1.62 %     245,591   949   1.57 %
Repurchase agreement borrowings   8,467   74   3.54 %     10,500   95   3.59 %     10,500   95   3.67 %
Repurchase liabilities   32,104   9   0.11 %     29,796   9   0.12 %     24,984   7   0.11 %
Total interest-bearing liabilities   2,307,573   5,541   0.97 %     2,228,496   5,023   0.89 %     2,111,432   3,962   0.76 %
Noninterest-bearing deposits   451,067         454,278         433,058    
Other noninterest-bearing liabilities   55,634         48,593         49,886    
Total liabilities   2,814,274         2,731,367         2,594,376    
Stockholders' equity   277,109         277,648         265,468    
Total liabilities and stockholders' equity $ 3,091,383       $ 3,009,015       $ 2,859,844    
                       
Tax-equivalent net interest income   $ 21,222         $ 21,163         $ 19,846    
Less: tax-equivalent adjustment     (300 )         (635 )         (596 )  
Net interest income   $ 20,922         $ 20,528         $ 19,250    
                       
Net interest rate spread (2)     2.69 %       2.71 %       2.76 %
Net interest-earning assets (3) $ 657,528       $ 655,982       $ 630,308    
Net interest margin (4)     2.90 %       2.91 %       2.94 %
Average interest-earning assets to average interest-bearing liabilities                      
  128.49 %     129.44 %     129.85 %
                       
(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, 2018, December 31, 2017, September 30, 2017, June 30, 2017 and March 31, 2017.  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)   2018       2017       2017       2017       2017    
Net Income $ 6,011     $ 497     $ 5,597     $ 5,002     $ 5,093    
  Adjustments:                    
  Plus: Severance expense   -       -       -       343       -    
  Less: Prepayment penalty fees   (25 )     (36 )     (165 )     -       (84 )  
  Less: Bank-owned life insurance proceeds   -       -       -       (271 )     -    
Total core adjustments before taxes   (25 )     (36 )     (165 )     72       (84 )  
  Tax (expense) benefit on core adjustments   5       13       58       (120 )     29    
  Tax rate reduction due to Tax Cuts and Jobs Act   -       4,981       -       -       -    
Total core adjustments after taxes   (20 )     4,958       (107 )     (48 )     (55 )  
Total core net income $ 5,991     $ 5,455     $ 5,490     $ 4,954     $ 5,038    
                       
                       
Total net interest income $ 20,922     $ 20,528     $ 20,848     $ 19,823     $ 19,250    
  Less: Prepayment penalty fees   (25 )     (36 )     (165 )     -       (84 )  
Total core net interest income $ 20,897     $ 20,492     $ 20,683     $ 19,823     $ 19,166    
                       
Total noninterest income $ 3,145     $ 3,158     $ 3,300     $ 3,876     $ 3,165    
  Less: Bank-owned life insurance proceeds   -       -       -       (271 )     -    
Total core noninterest income $ 3,145     $ 3,158     $ 3,300     $ 3,605     $ 3,165    
                       
Total noninterest expense $ 16,239     $ 15,387     $ 15,919     $ 15,878     $ 15,152    
  Less: Severance expense   -       -       -       (343 )     -    
Total core noninterest expense $ 16,239     $ 15,387     $ 15,919     $ 15,535     $ 15,152    
                       
Core earnings per common share, diluted $ 0.38     $ 0.34     $ 0.35     $ 0.31     $ 0.32    
                       
Core net interest rate margin (1)    2.90 %     2.91 %     2.93 %     2.92 %     2.92 %  
Core return on average assets (annualized)   0.78 %     0.73 %     0.73 %     0.68 %     0.70 %  
Core return on average equity (annualized)   8.65 %     7.86 %     8.01 %     7.36 %     7.59 %  
Core non-interest expense to average assets (annualized)   2.10 %     2.05 %     2.11 %     2.12 %     2.12 %  
Efficiency ratio (2)    67.54 %     65.06 %     66.38 %     66.31 %     67.85 %  
                       
Tangible book value (3)  $ 17.32     $ 17.08     $ 17.12     $ 16.86     $ 16.62    
                       
(1) Represents tax-equivalent core net interest income as a percent of average interest-earning assets.                  
                       
(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.                  

CONTACT:
Jennifer H. Daukas
Senior Vice President, Investor Relations Officer
One Farm Glen Boulevard, Farmington, CT 06032
P 860-284-6359 | F 860-409-3316
jdaukas@farmingtonbankct.com
farmingtonbankct.com

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