Fox Chase Bancorp, Inc. Reports Earnings for the Quarter and Year Ended December 31, 2013

Announces Increased Dividend

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| Source: Fox Chase Bancorp, Inc.

HATBORO, Pa., Jan. 29, 2014 (GLOBE NEWSWIRE) -- Fox Chase Bancorp, Inc. (the "Company") (Nasdaq:FXCB), the holding company for Fox Chase Bank (the "Bank"), today announced net income of $5.5 million, or $0.48 per diluted share, for the year ended December 31, 2013, compared to $5.1 million, or $0.43 per diluted share, for the year ended December 31, 2012. The Company reported net income of $1.5 million, or $0.13 per diluted share for the quarter ended December 31, 2013 compared to net income of $1.9 million, or $0.16 per diluted share, for the quarter ended December 31, 2012.

The Company also announced that its Board of Directors declared a cash dividend of $0.26 per outstanding share of common stock. This quarter's dividend is comprised of a regular quarterly dividend of $0.10 (which is a $0.02 increase from the previous quarter) and a nonrecurring dividend of $0.16 per outstanding common share. Cumulative dividends paid for 2013 will be $0.48 per share which represents 100% of the Company's 2013 earnings. The dividend will be paid on or about February 27, 2014 to stockholders of record as of the close of business on February 13, 2014. 

Thomas M. Petro, President and Chief Executive Officer said, "We are very pleased with the Company's performance for 2013 evidenced by a 12% increase in earnings per share and a 41% decrease in nonperforming assets. Our commercial business strategy is producing strong organic growth and increased returns as average commercial loans outstanding increased by 18% and average noninterest-bearing deposits increased by 13%. Commercial loans represented 80% of total loans at year-end 2013. The increased dividend demonstrates the Company's commitment to total shareholder returns. Looking forward our focus will be on improving the Company's profitability through continued commercial lending growth, improving asset quality and controlling costs."

Highlights for the year and quarter ended December 31, 2013 included:

  • Total assets were $1.1 billion at December 31, 2013, an increase of $28.3 million, or 2.6%, from December 31, 2012. Total loans were $720.5 million at December 31, 2013, an increase of $36.6 million, or 5.4%, from $683.9 million at December 31, 2012, and an increase of $19.9 million, or 2.8%, from $700.5 million at September 30, 2013. The increase during the year ended December 31, 2013 was driven by an increase in commercial loans of $76.9 million, or 15.2%. The increase in commercial loans was comprised of $54.2 million in commercial and industrial loans, $39.4 million in multi-family and commercial real estate loans and a decrease of $16.7 million in commercial construction loans. The increase in commercial loans was offset by a $39.4 million decrease in one-to four-family residential mortgage and consumer loans as normal amortization exceeded new loans originated. For the three months ended December 31, 2013 the increase was driven by commercial loan growth of $26.9 million, representing an annualized increase of 19.6%. This commercial loan growth was comprised of $18.5 million in commercial and industrial loans, $9.0 million in multi-family and commercial real estate loans and a decrease of $531,000 in commercial construction loans. The commercial loan growth was offset by a $6.4 million decrease in one-to four-family residential mortgage and consumer loans.
  • Total stockholders' equity was $173.5 million at December 31, 2013, a decrease of $8.0 million, or 4.4%, from $181.5 million at December 31, 2012, primarily due to a reduction in accumulated other comprehensive income of $9.0, the purchase of treasury stock in the amount of $3.7 million offset by net income of $5.5 million for the year. Core tangible book value per share (as defined in the tables that follow) increased to $14.65 at December 31, 2013 from $14.32 at December 31, 2012.
  • Return on average assets was 0.51% for the year ended December 31, 2013 compared to 0.50% for the year ended December 31, 2012. Return on average assets was 0.54% for the three months ended December 31, 2013 compared to 0.42% for the three months ended September 30, 2013 and 0.73% for the three months ended December 31, 2012.
  • Net interest income increased $743,000, or 2.3%, to $32.5 million for the year ended December 31, 2013, compared to $31.7 million for the year ended December 31, 2012. The net interest margin was 3.08% for the year ended December 31, 2013, compared to 3.21% for the year ended December 31, 2012. 
  • Net interest income increased $216,000, or 2.6%, to $8.4 million for the three months ended December 31, 2013, compared to $8.2 million for the three months ended September 30, 2013 as net interest margin increased to 3.17% from 3.06%. Included in net interest income for the three months ended December 31, 2013 is $165,000 of nonrecurring interest income related to payments received on nonaccruing loans. Excluding this nonrecurring item, net interest margin would have been 3.11% for the three months ended December 31, 2013.
  • The efficiency ratio was 63.7% for the year ended December 31, 2013 compared to 64.3% for the year ended December 31, 2012.
  • Noninterest income decreased $2.5 million to $3.8 million for the year ended December 31, 2013, compared to $6.3 million for the year ended December 31, 2012.   The decrease was primarily due to a decrease of $2.8 million in net investment securities gains from $3.3 million for the year ended December 31, 2012 compared to $532,000 for the year ended December 31, 2013. Additionally, equity in earnings of affiliate decreased $245,000 to $445,000 for the year ended December 31, 2013 from $690,000 for the year ended December 31, 2012 as a result of decreased income and volumes from mortgage banking activities. These decreases were offset by an increase in net gain on sale of assets acquired through foreclosure of $349,000 from $135,000 for the year ended December 31, 2012 compared to $484,000 for the year ended December 31, 2013.
  • Noninterest expense increased $297,000, or 1.1%, to $27.5 million for the year ended December 31, 2013, compared to $27.2 million for the year ended December 31, 2012. Loss on extinguishment of debt decreased $3.0 million due to the extinguishment of debt during the year ended December 31, 2012. This decrease was offset by an increase of $3.1 million in assets acquired through foreclosure expense as the Company recorded $5.0 million in valuation adjustments on assets acquired through foreclosure during the year ended December 31, 2013 compared to $1.9 million for the year ended December 31, 2012. Salaries, benefits and other compensation increased $798,000, or 5.9%, for the year ended December 31, 2013 compared to the year ended December 31, 2012, primarily as a result of increased staffing costs and annual merit increases. These increases were offset by decreases of $260,000 in data processing costs related to a renegotiated data processing contract effective in January 2013. 
  • Excluding the previously mentioned loss on extinguishment of debt and valuation adjustments, noninterest expense increased $209,000, or 0.9%, from $22.2 million for the year ended December 31, 2012, to $22.5 million for the year ended December 31, 2013.
  • Noninterest expense increased $50,000, or 0.8%, to $6.5 million for the three months ended December 31, 2013, compared to $6.4 million for the three months ended December 31, 2012. Salaries, benefits and other compensation increased $319,000, or 9.4%, for the three months ended December 31, 2013 compared to the three months ended December 31, 2012, primarily as a result of increased staffing costs and annual merit increases. This increase was offset by a decrease in assets acquired through foreclosure expense of $292,000, of which $265,000 related to a decrease in valuation adjustments on assets acquired through foreclosure. Valuation adjustments on assets acquired through foreclosure were $713,000 for the three months ended December 31, 2013 compared to $978,000 for the three months ended December 31, 2012.  

Credit related items as of and for the quarter and year ended December 31, 2013 include:

  • The allowance for loan losses was $11.5 million, or 1.57% of total loans at December 31, 2013 compared to $11.1 million, or 1.56% of total loans at September 30, 2013 and $11.2 million, or 1.61% of total loans at December 31, 2012; 
  • Total credit-related costs, which include (i) provision for loan losses, (ii) valuation adjustments on assets acquired through foreclosure, offset by (iii) net gain on sale of assets acquired through foreclosure, totaled $1.2 million for the three months ended December 31, 2013, compared to $1.7 million for the three months ended September 30, 2013 and $1.4 million for the three months ended December 31, 2012. Credit-related costs totaled $5.5 million for the year ended December 31, 2013 compared to $5.3 million for the year ended December 31, 2012.
  • Net loan charge-offs totaled $49,000 and $623,000 for the quarter and year ended December 31, 2013, respectively, compared to $492,000 and $4.4 million for the quarter and year ended December 31, 2012, respectively. There were no commercial loan charge-offs during the quarter ended December 31, 2013.
  • Nonperforming assets totaled $15.0 million at December 31, 2013 compared to $17.3 million at September 30, 2013 and $25.6 million at December 31, 2012. Nonperforming assets at December 31, 2013 included $1.9 million of insurance assets which are all under agreements of sale with disposition anticipated in the 1st quarter of 2014.
  • Delinquent loans totaled $418,000 at December 31, 2013 compared to $2.1 million at September 30, 2013 and December 31, 2012. There were no delinquent commercial loans at December 31, 2013.

Fox Chase Bancorp, Inc. will host a conference call to discuss 2013 results on Thursday, January 30, 2014 at 9:00 am EST. The general public can access the call by dialing (888) 317-6016. A replay of the conference call will be available through March 21, 2014 by dialing (877) 344-7529; use Conference ID: 10039813.

Fox Chase Bancorp, Inc. is a stock holding company of Fox Chase Bank. The Bank is a Pennsylvania state-chartered savings bank originally established in 1867. The Bank offers traditional banking services and products from its main office in Hatboro, Pennsylvania and ten branch offices in Bucks, Montgomery, Chester, Delaware and Philadelphia Counties in Pennsylvania and Atlantic and Cape May Counties in New Jersey. For more information, please visit the Bank's website at www.foxchasebank.com.

This news release contains forward-looking statements within the meaning of the federal securities laws. Forward-looking statements can generally be identified by the fact that they do not relate strictly to historical or current facts. They often include words like "believe," "expect," "anticipate," "estimate" and "intend" or future or conditional verbs such as "will," "would," "should," "could" or "may." Statements in this release that are not strictly historical are forward-looking and are based upon current expectations that may differ materially from actual results. These forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those anticipated by the statements made herein. These risks and uncertainties involve general economic trends, changes in interest rates, loss of deposits and loan demand to other financial institutions, substantial changes in financial markets; changes in real estate value and the real estate market, regulatory changes, possibility of unforeseen events affecting the industry generally, the uncertainties associated with newly developed or acquired operations, the outcome of pending litigation, and market disruptions and other effects of terrorist activities. The Company undertakes no obligation to update these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unforeseen events, except as required under the rules and regulations of the Securities and Exchange Commission.

CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in Thousands, Except Per Share Data)
         
  Three Months Ended
December 31,
Twelve Months Ended
December 31,
  2013 2012 2013 2012
  (Unaudited) (Unaudited) (Audited)
INTEREST INCOME        
Interest and fees on loans  $ 8,331  $ 8,086  $ 32,650  $ 33,878
Interest on mortgage related securities 1,863 1,784 7,159 7,606
Interest on investment securities available-for-sale        
Taxable 97 77 318 308
Nontaxable 34
Other interest income 3 2 8
Total Interest Income 10,291 9,950 40,129 41,834
INTEREST EXPENSE        
Deposits 971 1,361 4,344 6,347
Short-term borrowings 36 12 130 38
Federal Home Loan Bank advances 582 491 2,188 2,383
Other borrowed funds 254 253 1,007 1,349
Total Interest Expense 1,843 2,117 7,669 10,117
Net Interest Income 8,448 7,833 32,460 31,717
Provision for loan losses 450 442 982 3,478
Net Interest Income after Provision for Loan Losses 7,998 7,391 31,478 28,239
NONINTEREST INCOME        
Service charges and other fee income 434 459 1,694 1,597
Net gain on sale of assets acquired through foreclosure 484 135
Income on bank-owned life insurance 119 117 470 471
Equity in (loss) earnings of affiliate (25) 245 445 690
Other 40 31 165 130
Net investment securities gains 952 532 3,292
Total Noninterest Income 568 1,804 3,790 6,315
NONINTEREST EXPENSE        
Salaries, benefits and other compensation 3,709 3,390 14,338 13,540
Occupancy expense 446 408 1,689 1,702
Furniture and equipment expense 111 128 469 537
Data processing costs 382 438 1,537 1,797
Professional fees 441 379 1,691 1,706
Marketing expense 81 53 248 270
FDIC premiums 184 192 709 773
Assets acquired through foreclosure expense 736 1,028 5,201 2,143
Loss on extinguishment of debt 3,018
Other 397 421 1,589 1,688
Total Noninterest Expense 6,487 6,437 27,471 27,174
Income Before Income Taxes 2,079 2,758 7,797 7,380
Income tax provision 589 858 2,263 2,318
Net Income  $ 1,490  $ 1,900  $ 5,534  $ 5,062
Earnings per share:        
Basic  $ 0.13  $ 0.17  $ 0.49  $ 0.44
Diluted  $ 0.13  $ 0.16  $ 0.48  $ 0.43
 
 
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION 
(Dollars in Thousands, Except Share Data)
     
  December 31,
2013
December 31,
2012
  (Unaudited) (Audited)
ASSETS    
Cash and due from banks  $ 149  $ 162
Interest-earning demand deposits in other banks 11,798 24,928
Total cash and cash equivalents 11,947 25,090
Investment securities available-for-sale 10,489 12,491
Mortgage related securities available-for-sale 246,068 283,616
Mortgage related securities held-to-maturity (fair value of $67,491 at December 31, 2013 and $29,451 at December 31, 2012) 68,397 28,369
Loans, net of allowance for loan losses of $11,529 at December 31, 2013 and $11,170 at December 31, 2012 720,490 683,865
Federal Home Loan Bank stock, at cost 9,813 8,097
Bank-owned life insurance 14,547 14,077
Premises and equipment, net 9,814 10,443
Assets acquired through foreclosure 6,252 8,524
Real estate held for investment 1,620 1,620
Accrued interest receivable 3,308 3,223
Mortgage servicing rights, net 152 170
Deferred tax asset, net 8,906 2,953
Other assets 4,819 5,803
Total Assets  $ 1,116,622  $ 1,088,341
     
LIABILITIES AND STOCKHOLDERS' EQUITY    
LIABILITIES    
Deposits  $ 673,715  $ 687,409
Short-term borrowings 80,500 70,500
Federal Home Loan Bank advances 150,000 110,000
Other borrowed funds 30,000 30,000
Advances from borrowers for taxes and insurance 1,525 1,699
Accrued interest payable 314 330
Accrued expenses and other liabilities 7,101 6,938
Total Liabilities 943,155 906,876
     
STOCKHOLDERS' EQUITY    
Preferred stock ($.01 par value; 1,000,000 shares authorized, none issued and outstanding at December 31, 2013 and December 31, 2012)
Common stock ($.01 par value; 60,000,000 shares authorized, 12,147,803 shares issued and outstanding at December 31, 2013 and 12,356,564 shares issued and outstanding at December 31, 2012) 146 146
Additional paid-in capital 137,593 136,132
Treasury stock, at cost (2,468,172 shares at December 31, 2013 and 2,249,600 shares at December 31, 2012) (33,436) (29,733)
Common stock acquired by benefit plans (9,272) (10,228)
Retained earnings 82,885 80,608
Accumulated other comprehensive income, net (4,449) 4,540
Total Stockholders' Equity 173,467 181,465
Total Liabilities and Stockholders' Equity  $ 1,116,622  $ 1,088,341
 
SELECTED CONSOLIDATED FINANCIAL AND OTHER DATA OF THE COMPANY (UNAUDITED)
(Dollars in Thousands, Except Per Share Data)
       
  December 31,
2013
September 30,
2013
December 31,
2012
CAPITAL RATIOS:      
Stockholders' equity (to total assets) (1)  15.53%  15.74%  16.67%
       
Tier 1 capital (to adjusted assets) (2)  13.12  13.10  12.90
Tier 1 risk –based capital (to risk-weighted assets) (2)  18.44  18.98  19.45
Total risk-based capital (to risk-weighted assets) (2)  19.48  20.02  20.48
       
ASSET QUALITY INDICATORS:      
Nonperforming Assets:      
Nonaccruing loans  $ 8,780  $ 9,057  $ 17,124
Accruing loans past due 90 days or more (3) 1,640  —
Total nonperforming loans  $ 8,780  $ 10,697  $ 17,124
Assets acquired through foreclosure 6,252 6,588 8,524
Total nonperforming assets  $ 15,032  $ 17,285  $ 25,648
       
Ratio of nonperforming loans to total loans  1.20%  1.50%  2.46%
Ratio of nonperforming assets to total assets  1.35  1.56  2.36
Ratio of allowance for loan losses to total loans  1.57  1.56  1.61
Ratio of allowance for loan losses to nonperforming loans  131.3  104.0  65.2
Impaired Loans:      
Nonaccruing loans  $ 8,780  $ 9,057  $ 17,124
Troubled debt restructurings 6,786 7,265 7,388
Other impaired loans
Total impaired loans  $ 15,566  $ 16,322  $ 24,512
       
Past Due Loans:      
30 - 59 days  $ 413  $ 1,481  $ 41
60 - 89 days 5 569 2,026
Total  $ 418  $ 2,050  $ 2,067
       
(1) Represents stockholders' equity ratio of Fox Chase Bancorp, Inc.
(2) Represents regulatory capital ratios of Fox Chase Bank.
(3) As of September 30, 2013, represents one commercial loan relationship which was greater than 90 days past maturity. The loan was extended in October 2013 and the loan is no longer considered delinquent.
       
  At or for the Three Months Ended
  December 31,
2013
September 30,
2013
December 31,
2012
PERFORMANCE RATIOS (4):      
Return on average assets  0.54%  0.42%  0.73%
Return on average equity  3.40  2.71  4.15
Net interest margin  3.17  3.06  3.11
Efficiency ratio (5)  64.0  63.5  62.8
OTHER:      
Tangible book value per share - Core (6)  $ 14.65  $ 14.55  $ 14.32
Tangible book value per share (7)  $ 14.28  $ 14.34  $ 14.69
Employees (full-time equivalents) 142 142 141
       
       
  At or for the Twelve Months Ended  
  December 31,
2013
December 31,
2012
 
PERFORMANCE RATIOS (4):      
Return on average assets  0.51%  0.50%  
Return on average equity  3.13  2.74  
Net interest margin  3.08  3.21  
Efficiency ratio (5) 63.7 64.3  
       
(4) Annualized
(5) Represents noninterest expense, excluding valuation adjustments on assets acquired through foreclosure and loss on extinguishment of debt, divided by the sum of net interest income and noninterest income, excluding gains or losses on the sale of securities, premises and equipment and assets acquired through foreclosure.
(6) Total stockholders' equity, excluding the impact of accumulated other comprehensive (loss) income, net ($4.4 million loss at December 31, 2013, $2.5 million loss at September 30, 2013 and $4.5 million income at December 31, 2012), divided by total shares outstanding.
(7) Total stockholders' equity divided by total shares outstanding. Tangible book value per share and book value per share were the same for all periods indicated.
 
 
AVERAGE BALANCE SHEET
(Dollars in Thousands, Unaudited)
             
  Twelve Months Ended December 31,
  2013 2012
  Average
Balance
Interest and
Dividends
Yield/
Cost (2)
Average
Balance
Interest and
Dividends
Yield/
Cost (2)
Assets:            
Interest-earning assets:            
Interest-earning demand deposits  $ 5,921  $ 2  0.04%  $ 7,569  $ 8  0.10%
Mortgage related securities 328,338 7,159  2.18% 290,808 7,606  2.62%
Taxable securities 20,755 318  1.53% 21,220 308  1.45%
Nontaxable securities —% 738 34  4.65%
Loans (1) 698,860 32,650  4.67% 667,763 33,878  5.07%
Allowance for loan losses (11,438)     (11,781)    
Net loans 687,422 32,650   655,982 33,878  
Total interest-earning assets 1,042,436 40,129  3.81% 976,317 41,834  4.23%
Noninterest-earning assets 49,202     43,923    
Total assets  $ 1,091,638      $ 1,020,240    
Liabilities and equity:            
Interest-bearing liabilities:            
Interest-bearing deposits $ 573,487 $ 4,344  0.76% $ 586,422 $ 6,347  1.08%
Borrowings 213,175 3,325  1.56% 137,279 3,770  2.75%
Total interest-bearing liabilities 786,662 7,669  0.97% 723,701 10,117  1.40%
Noninterest-bearing deposits 121,101     107,143    
Other noninterest-bearing liabilities 6,851     4,503    
Total liabilities 914,614     835,347    
Stockholders' equity 177,141     178,687    
Accumulated comprehensive income (117)     6,206    
Total stockholder's equity 177,024     184,893    
Total liabilities and stockholders' equity  $ 1,091,638      $ 1,020,240    
             
Net interest income    $ 32,460      $ 31,717  
Interest rate spread      2.84%      2.83%
Net interest margin      3.08%      3.21%
             
(1)  Nonperforming loans are included in average balance computation.
(2)  Yields are not presented on a tax-equivalent basis.
             
             
AVERAGE BALANCE SHEET
(Dollars in Thousands, Unaudited)
             
  Three Months Ended December 31,
  2013 2012
  Average
Balance
Interest and
Dividends
Yield/
Cost (2)
Average
Balance
Interest and
Dividends
Yield/
Cost (2)
Assets:            
Interest-earning assets:            
Interest-earning demand deposits  $ 7,067  $ —   0.03%  $ 8,637  $ 3  0.11%
Mortgage related securities 323,987 1,863  2.30% 312,198 1,784  2.29%
Taxable securities 20,323 97  1.92% 19,677 77  1.57%
Loans (1) 708,397 8,331  4.67% 664,939 8,086  4.84%
Allowance for loan losses (11,495)     (11,614)    
Net loans 696,902 8,331   653,325 8,086  
Total interest-earning assets 1,048,279 10,291  3.91% 993,837 9,950  3.99%
Noninterest-earning assets 47,090     44,527    
Total assets  $ 1,095,369      $ 1,038,364    
Liabilities and equity:            
Interest-bearing liabilities:            
Interest-bearing deposits $ 565,787 $ 971  0.68% $ 589,464 $ 1,361  0.92%
Borrowings 229,097 872  1.51% 142,745 756  2.11%
Total interest-bearing liabilities 794,884 1,843  0.92% 732,209 2,117  1.15%
Noninterest-bearing deposits 119,069     118,675    
Other noninterest-bearing liabilities 6,060     4,281    
Total liabilities 920,013     855,165    
Stockholders' equity 177,883     177,214    
Accumulated comprehensive income (2,527)     5,985    
Total stockholder's equity 175,356     183,199    
Total liabilities and stockholders' equity  $ 1,095,369      $ 1,038,364    
             
Net interest income   $ 8,448     $ 7,833  
Interest rate spread      2.99%      2.84%
Net interest margin (3)      3.17%      3.11%
             
(1)  Nonperforming loans are included in average balance computation.
(2)  Yields are not presented on a tax-equivalent basis.
(3)  Includes $165,000 of nonrecurring interest income related to payments received on nonaccruing loans.
             
             
AVERAGE BALANCE SHEET
(Dollars in Thousands, Unaudited)
             
  Three Months Ended
December 31, 2013
Three Months Ended
September 30, 2013
  Average
Balance
Interest and
Dividends
Yield/
Cost (2)
Average
Balance
Interest and
Dividends
Yield/
Cost (2)
Assets:            
Interest-earning assets:            
Interest-earning demand deposits  $ 7,067  $ —  0.03%  $ 5,652 $ 1 0.03%
Mortgage related securities 323,987 1,863 2.30% 334,883 1,807 2.16%
Taxable securities 20,323 97 1.92% 21,012 92 1.74%
Loans (1) 708,397 8,331 4.67% 708,177 8,241 4.63%
Allowance for loan losses (11,495)     (10,854)    
Net loans 696,902 8,331   697,323 8,241  
Total interest-earning assets 1,048,279 10,291 3.91% 1,058,870 10,141 3.81%
Noninterest-earning assets 47,090     50,589    
Total assets  $ 1,095,369      $ 1,109,459    
Liabilities and equity:            
Interest-bearing liabilities:            
Interest-bearing deposits  $ 565,787 $ 971 0.68% $ 566,745 $ 1,055 0.74%
Borrowings 229,097 872 1.51% 234,783 854 1.44%
Total interest-bearing liabilities 794,884 1,843 0.92% 801,528 1,909 0.94%
Noninterest-bearing deposits 119,069     128,437    
Other noninterest-bearing liabilities 6,060     6,080    
Total liabilities 920,013     936,045    
Stockholders' equity 177,883     176,915    
Accumulated comprehensive income (2,527)     (3,501)    
Total stockholder's equity 175,356     173,414    
Total liabilities and stockholders' equity  $ 1,095,369      $ 1,109,459    
             
Net interest income   $ 8,448      $ 8,232  
Interest rate spread     2.99%     2.87%
Net interest margin (3)     3.17%     3.06%
             
(1)  Nonperforming loans are included in average balance computation.
(2)  Yields are not presented on a tax-equivalent basis.
(3)  Includes $165,000 of nonrecurring interest income related to payments received on nonaccruing loans.
Roger S. Deacon
Chief Financial Officer
(215) 775-1435