Fox Chase Bancorp, Inc. Announces 122% Increase in Earnings for the Three Months Ended June 30, 2014

(Increases Dividend; Announces Additional 5% Stock Repurchase Plan)

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| Source: Fox Chase Bancorp, Inc.

HATBORO, Pa., July 30, 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 $2.3 million, or $0.20 per diluted share, and $4.3 million, or $0.37 per diluted share, for the three and six months ended June 30, 2014, respectively, compared to net income of $1.0 million, or $0.09 per diluted share, and $2.9 million, or $0.25 per diluted share, for the three and six months ended June 30, 2013, respectively.

Commenting on the performance for the quarter, Thomas M. Petro, President and Chief Executive Officer said, "We are pleased to report a 122% increase in earnings for the three months ended June 30, 2014, as compared to the same period in 2013. The improved earnings were driven by solid growth in our commercial lending portfolio, increased net interest margin and continued reductions in credit-related costs. The continued improvement in credit quality reflects the strength of our balance sheet as our ratio for the allowance for losses to total loans remained at 1.57% at June 30, 2014 and December 31, 2013. Our business strategy of building long-term commercial relationships continues to increase profitability. Finally, we are excited to once again increase our quarterly dividend to $0.12 per share and announce another stock repurchase program, as we continue to look for opportunities to enhance shareholder value." 

Highlights for the three and six months ended June 30, 2014 included:

  • Total assets were $1.11 billion at June 30, 2014 compared to $1.12 billion at December 31, 2013. Total loans were $724.5 million at June 30, 2014, an increase of $31.1 million, or 4.5%, from $693.4 million at March 31, 2014, and an increase of $4.0 million, or 0.6%, from $720.5 million at December 31, 2013. Total commercial loans increased $37.4 million, or 6.7%, from $559.6 million at March 31, 2014 to $597.0 million at June 30, 2014 primarily due to increases of $26.3 million in multi-family and commercial real estate loans and $10.1 million in commercial construction loans. 
  • Total average assets were $1.09 billion for the six months ended June 30, 2014 as compared to $1.08 billion for the six months ended June 30, 2013. Total average commercial loans increased by $57.7 million, or 11.3%, to $568.6 million for the six months ended June 30, 2014, compared to $510.9 million for the six months ended June 30, 2013. 
  • Nonperforming assets totaled $6.2 million, or 0.56% of total assets, at June 30, 2014 compared to $8.6 million, or 0.79% of total assets, at March 31, 2014 and $15.0 million, or 1.35% of total assets, at December 31, 2013.
  • Return on assets was 0.85% and 0.78% for the three and six months ended June 30, 2014, respectively, compared to 0.38% and 0.53% for the three and six months ended June 30, 2013, respectively.
  • Net interest income increased $962,000, or 6.1%, to $16.7 million for the six months ended June 30, 2014, compared to $15.8 million for the six months ended June 30, 2013 and increased $558,000, or 7.1%, to $8.4 million for the three months ended June 30, 2014, compared to $7.9 million for the three months ended June 30, 2013. The net interest margin was 3.20% for the three months ended June 30, 2014, compared to 3.17% for the three months ended March 31, 2014 and 3.01% for the three months ended June 30, 2013. 
  • Credit related costs, which include (i) provision or credit for loan losses, (ii) valuation adjustments on assets acquired through foreclosure, adjusted by (iii) net gain (loss) on sale of assets acquired through foreclosure, totaled $221,000 and $503,000 for the three and six months ended June 30, 2014, respectively, compared to $1.8 million and $2.7 million, respectively, for the three month and six months ended June 30, 2013. Net loan (recoveries)/charge-offs totaled $(37,000) and $56,000 for the three and six months ended June 30, 2014, respectively, compared to $322,000 and $529,000 for the three and six months ended June 30, 2013. There were no commercial loan charge-offs during the three months ended June 30, 2014. 
  • Delinquent loans totaled $536,000 at June 30, 2014, compared to $1.0 million at March 31, 2014 and $418,000 at December 31, 2013. There were no delinquent commercial loans at June 30, 2014.
  • Noninterest income decreased $1.2 million to $973,000 for the six months ended June 30, 2014 compared to $2.2 million for the six months ended June 30, 2013 primarily due to a gain on sale of investment securities of $532,000 in 2013, a decrease of $301,000 in equity in earnings of affiliates due to lower mortgage volumes and a decrease of $302,000 in gain (loss) on sale of an asset acquired through foreclosure due to a gain of $181,000 recorded in 2013 and a loss of $121,000 recorded in 2014.
  • Noninterest expense decreased $2.6 million, or 18.4%, to $11.4 million for the six months ended June 30, 2014, compared to $14.0 million for the six months ended June 30, 2013. This decrease was primarily due to a decrease of $2.7 million in assets acquired through foreclosure expense as the Company recorded $282,000 in valuation adjustments on assets acquired through foreclosure during the six months ended June 30, 2014 compared to $3.0 million for the six months ended June 30, 2013.   
  • Excluding the previously mentioned decrease of $2.7 million in valuation adjustments on assets acquired through foreclosure, noninterest expense increased $139,000, or 1.3%, to $11.1 million for the six months ended June 30, 2014 from $11.0 million for the six months ended June 30, 2013.  The efficiency ratio was 59.8% and 62.4% for the three and six months ended June 30, 2014, respectively, compared to 64.2% and 63.7% for the three and six months ended June 30, 2013, respectively.

The Company also announced that its Board of Directors approved an increased cash dividend of $0.12 per outstanding share of common stock. The dividend will be paid on or about August 28, 2014 to stockholders of record as of the close of business on August 14, 2014. Finally, on July 30, 2014, the Board of Directors approved an additional 5% stock repurchase plan (the "July 2014 Plan"). Subject to market conditions and other factors, repurchases related to the July 2014 Plan will begin subsequent to completion of repurchases under the Company's existing repurchase plan, which was approved in April 2012. During the three months ended June 30, 2014, the Company repurchased 70,000 shares of common stock and, as of June 30, 2014, had 238,529 shares remaining under the April 2012 Plan.

Fox Chase Bancorp, Inc. will host a conference call to discuss second quarter 2014 results on Thursday, July 31, 2014 at 9:00 am EDT. The general public can access the call by dialing (877) 507-3275. A replay of the conference call will be available through September 15, 2014 by dialing (877) 344-7529; use Conference ID: 10049489.

Fox Chase Bancorp, Inc. is the 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 nine branch offices in Bucks, Montgomery, Chester 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 Six Months Ended
  June 30,  June 30,
  2014 2013 2014 2013
  (Unaudited)
INTEREST INCOME        
Interest and fees on loans $8,130 $8,016 $16,240 $16,078
Interest on mortgage related securities  1,774 1,751 3,602 3,489
Interest on investment securities 173 58 293 129
Other interest income 1  --  1 1
Total Interest Income 10,078 9,825 20,136 19,697
INTEREST EXPENSE        
Deposits 797 1,141 1,695 2,318
Short-term borrowings 30 17 55 49
Federal Home Loan Bank advances 576 549 1,146 1,051
Other borrowed funds  250 251 498 499
Total Interest Expense 1,653 1,958 3,394 3,917
Net Interest Income 8,425 7,867 16,742 15,780
Provision for loan losses 100  (783) 100  (143)
Net Interest Income after Provision for Loan Losses 8,325 8,650 16,642 15,923
NONINTEREST INCOME        
Service charges and other fee income 424 462 776 823
Net (loss) gain on sale of assets acquired through foreclosure  (121) 185  (121) 181
Income on bank-owned life insurance 120 117 237 233
Equity in earnings of affiliate 67 165 34 335
Net gain on sale of investment securities   --  171  --  532
Other 24 39 47 89
         
Total Noninterest Income 514 1,139 973 2,193
NONINTEREST EXPENSE        
Salaries, benefits and other compensation 3,519 3,480 7,160 6,985
Occupancy expense 418 393 914 840
Furniture and equipment expense 96 117 207 241
Data processing costs 377 367 762 765
Professional fees 337 488 815 776
Marketing expense 61 78 102 108
FDIC premiums 150 165 315 350
Assets acquired through foreclosure expense 72 2,810 393 3,095
Other 389 409 744 822
Total Noninterest Expense 5,419 8,307 11,412 13,982
Income Before Income Taxes 3,420 1,482 6,203 4,134
Income tax provision 1,105 438 1,932 1,263
Net Income  $2,315 $1,044 $4,271 $2,871
Earnings per share:        
Basic $0.21 $0.09 $0.38 $0.25
Diluted $0.20 $0.09 $0.37 $0.25
     
     
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION     
(Dollars in Thousands, Except Share Data)    
  June 30, December 31,
  2014 2013
  (Unaudited) (Audited)
ASSETS    
Cash and due from banks $274 $149
Interest-earning demand deposits in other banks 9,409 11,798
Total cash and cash equivalents 9,683 11,947
Investment securities available-for-sale 8,477 10,489
Mortgage related securities available-for-sale 236,143 246,068
Mortgage related securities held-to-maturity (fair value of $72,961 at  June 30, 2014 and $67,491 at December 31, 2013) 72,606 68,397
Loans, net of allowance for loan losses of $11,573 at June 30, 2014 and $11,529 at December 31, 2013 724,513 720,490
Federal Home Loan Bank stock, at cost 11,152 9,813
Bank-owned life insurance 14,784 14,547
Premises and equipment, net 9,569 9,814
Assets acquired through foreclosure 2,017 6,252
Real estate held for investment 1,620 1,620
Accrued interest receivable 3,275 3,308
Mortgage servicing rights, net 127 152
Deferred tax asset, net 4,743 8,906
Other assets 6,363 4,819
Total Assets $1,105,072 $1,116,622
     
LIABILITIES AND STOCKHOLDERS' EQUITY    
LIABILITIES    
Deposits $691,979 $673,715
Short-term borrowings 47,300 80,500
Federal Home Loan Bank advances 150,000 150,000
Other borrowed funds 30,000 30,000
Advances from borrowers for taxes and insurance 1,802 1,525
Accrued interest payable 312 314
Accrued expenses and other liabilities 5,474 7,101
Total Liabilities 926,867 943,155
STOCKHOLDERS' EQUITY    
Preferred stock ($.01 par value; 1,000,000 shares authorized, none issued and outstanding at June 30, 2014 and December 31, 2013)  --   -- 
Common stock ($.01 par value; 60,000,000 shares authorized, 12,112,491 shares outstanding at June 30, 2014 and 12,147,803 shares outstanding at December 31, 2013) 146 146
Additional paid-in capital 138,401 137,593
Treasury stock, at cost (2,538,172 shares at June 30, 2014 and 2,468,172 at December 31, 2013)  (34,581)  (33,436)
Common stock acquired by benefit plans  (8,566)  (9,272)
Retained earnings 83,057 82,885
Accumulated other comprehensive loss, net  (252)  (4,449)
Total Stockholders' Equity 178,205 173,467
     
Total Liabilities and Stockholders' Equity $1,105,072 $1,116,622
                 
SELECTED CONSOLIDATED FINANCIAL AND OTHER DATA OF THE COMPANY (UNAUDITED)                
(Dollars in Thousands, Except Per Share Data)                
                 
  June 30,   March 31,   December 31,   June 30,
  2014   2014   2013   2013  
CAPITAL RATIOS:                
Stockholders' equity (to total assets) (1) 16.13 % 16.13 % 15.53 % 15.45 %
                 
Tier 1 capital (to adjusted assets) (2) 13.18    12.87   13.12   12.78  
Tier 1 risk –based capital (to risk-weighted assets) (2) 18.59    18.74   18.44   18.94  
Total risk-based capital (to risk-weighted assets) (2) 19.64    19.78   19.48   19.98  
                 
ASSET QUALITY INDICATORS:                
Nonperforming Assets:                
Nonaccruing loans $4,144   $3,979   $8,780   $9,989  
Accruing loans past due 90 days or more  --    --    --     --   
Total nonperforming loans  $4,144   $3,979   $8,780   $9,989  
Assets acquired through foreclosure 2,017   4,574   6,252   9,948  
Total nonperforming assets $6,161   $8,553   $15,032   $19,937  
                 
Ratio of nonperforming loans to total loans 0.56 % 0.56 % 1.20 % 1.40
Ratio of nonperforming assets to total assets 0.56   0.79   1.35   1.78  
Ratio of allowance for loan losses to total loans 1.57   1.62   1.57   1.48  
Ratio of allowance for loan losses to nonperforming loans 279.3   287.4   131.3   105.1  
Troubled Debt Restructurings:                
Nonaccruing troubled debt restructurings (3)  $282   $157   $3,488   $9,989  
Accruing troubled debt restructurings 5,324   5,107   6,786   7,265  
Total troubled debt restructurings $5,606   $5,264   $10,274   $17,254  
                 
Past Due Loans:                
30 - 59 days $526   $829   $413   $1,618  
60 - 89 days  10   179   5   323  
Total $536   $1,008   $418   $1,941  
                 
(1) Represents stockholders' equity ratio of Fox Chase Bancorp, Inc.  
(2) Represents regulatory capital ratios of Fox Chase Bank.  
(3) Nonaccruing troubled debt restructurings are included in total nonaccruing loans above  
   
  At or for the Three Months Ended
  June 30,   March 31,   December 31,   June 30,  
  2014   2014   2013   2013  
PERFORMANCE RATIOS (4):                
Return on average assets  0.85 % 0.72 % 0.54 % 0.38 %
Return on average equity  5.25   4.46   3.40   2.34  
Net interest margin  3.20   3.17   3.17   3.01  
Efficiency ratio (5) 59.8   65.1   64.0   64.2  
OTHER:                
Tangible book value per share - Core (6) $14.73   $14.61   $14.65   $14.48  
Tangible book value per share (7) $14.71   $14.38   $14.28   $14.28  
Employees (full-time equivalents) 140   141   142   143  
                 
  At or for the Six Months Ended          
  June 30,   June 30,          
  2014   2013          
PERFORMANCE RATIOS (4):                
Return on average assets  0.78 % 0.53 %        
Return on average equity  4.85   3.20          
Net interest margin  3.19   3.04          
Efficiency ratio (5) 62.4   63.7          
                 
(4) Annualized  
(5) Represents noninterest expense, excluding valuation adjustments on assets acquired through foreclosure, 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, net ($252,000 at June 30, 2014, $2.7 million at March 31, 2014, $4.4 million at December 31, 2013 and $2.4 million at June 30, 2013) 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)            
             
  Three Months Ended June 30,
  2014 2013
    Interest     Interest  
  Average and  Yield/ Average and  Yield/
  Balance Dividends Cost (2) Balance Dividends Cost (2)
Assets:            
Interest-earning assets:            
Interest-earning demand deposits $6,241 $1 0.05% $5,822  $ --  0.04%
Mortgage related securities 313,939 1,774 2.26% 331,110 1,751 2.12%
Investment securities 19,001 173 3.65% 20,713 58 1.14%
Loans (1) 714,243 8,130 4.56% 690,584 8,016 4.65%
Allowance for loan losses  (11,553)      (11,962)    
Net loans 702,690 8,130   678,622 8,016  
Total interest-earning assets 1,041,871 10,078 3.88% 1,036,267 9,825 3.80%
Noninterest-earning assets 45,628     51,250    
Total assets $1,087,499     $1,087,517    
Liabilities and equity:            
Interest-bearing liabilities:            
Interest-bearing deposits $560,578 $797 0.57% $ 581,391 $1,141 0.79%
Borrowings 220,770 856 1.56% 196,632 817 1.67%
Total interest-bearing liabilities 781,348 1,653 0.85% 778,023 1,958 1.01%
Noninterest-bearing deposits 122,395     124,025    
Other noninterest-bearing liabilities 7,284     6,727    
Total liabilities 911,027     908,775    
Stockholders' equity 177,895     176,645    
Accumulated comprehensive income  (1,423)     2,097    
Total stockholder's equity 176,472     178,742    
Total liabilities and stockholders' equity $1,087,499     $1,087,517    
             
Net interest income   $8,425     $7,867  
Interest rate spread     3.03%     2.79%
Net interest margin     3.20%     3.01%
             
(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
  June 30, 2014 March 31, 2014
    Interest     Interest  
  Average and  Yield/ Average and  Yield/
  Balance Dividends Cost (2) Balance Dividends Cost (2)
Assets:            
Interest-earning assets:            
Interest-earning demand deposits $6,241 $1 0.05% $7,325  $ --  0.03%
Mortgage related securities 313,939 1,774 2.26% 317,098 1,828 2.31%
Investment securities 19,001 173 3.65% 18,416 120 2.61%
Loans (1) 714,243 8,130 4.56% 714,983 8,110 4.59%
Allowance for loan losses  (11,553)      (11,603)    
Net loans 702,690 8,130   703,380 8,110  
Total interest-earning assets 1,041,871 10,078 3.88% 1,046,219 10,058 3.88%
Noninterest-earning assets 45,628     46,457    
Total assets $1,087,499     $1,092,676    
Liabilities and equity:            
Interest-bearing liabilities:            
Interest-bearing deposits $560,578 $797 0.57% $573,346 $898 0.64%
Borrowings 220,770 856 1.56% 215,915 843 1.58%
Total interest-bearing liabilities 781,348 1,653 0.85% 789,261 1,741 0.89%
Noninterest-bearing deposits 122,395     119,207    
Other noninterest-bearing liabilities 7,284     8,619    
Total liabilities 911,027     917,087    
Stockholders' equity 177,895     178,266    
Accumulated comprehensive income  (1,423)      (2,677)    
Total stockholder's equity 176,472     175,589    
Total liabilities and stockholders' equity $1,087,499     $1,092,676    
             
Net interest income   $8,425     $8,317  
Interest rate spread     3.03%     2.99%
Net interest margin     3.20%     3.17%
             
(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)            
             
  Six Months Ended June 30,
  2014 2013
    Interest     Interest  
  Average and  Yield/ Average and  Yield/
  Balance Dividends Cost (2) Balance Dividends Cost (2)
Assets:            
Interest-earning assets:            
Interest-earning demand deposits $6,783 $1 0.04% $5,484 $1 0.04%
Mortgage related securities 315,519 3,602 2.28% 327,241 3,489 2.13%
Investment securities 18,709 293 3.14% 20,841 129 1.24%
Loans (1) 714,613 16,240 4.57% 689,434 16,078 4.69%
Allowance for loan losses (11,578)     (11,703)    
Net loans 703,035 16,240   677,731 16,078  
Total interest-earning assets 1,044,046 20,136 3.88% 1,031,297 19,697 3.80%
Noninterest-earning assets 46,043     49,565    
Total assets $1,090,089     $1,080,862    
Liabilities and equity:            
Interest-bearing liabilities:            
Interest-bearing deposits $566,963 $1,695 0.60% $ 580,709 $ 2,318 0.80%
Borrowings 218,343 1,699 1.57% 194,410 1,599 1.66%
Total interest-bearing liabilities 785,306 3,394 0.87% 775,119 3,917 1.02%
Noninterest-bearing deposits 120,801     118,449    
Other noninterest-bearing liabilities 7,952     7,632    
Total liabilities 914,059     901,200    
Stockholders' equity 178,081     176,882    
Accumulated comprehensive income (2,051)     2,780    
Total stockholder's equity 176,030     179,662    
Total liabilities and stockholders' equity $1,090,089     $1,080,862    
             
Net interest income   $16,742     $15,780  
Interest rate spread     3.01%     2.78%
Net interest margin     3.19%     3.04%
             
(1)  Nonperforming loans are included in average balance computation.
(2)  Yields are not presented on a tax-equivalent basis.
Roger S. Deacon
Chief Financial Officer
Phone: (215) 775-1435