FARMINGTON, Conn., Oct. 23, 2014 (GLOBE NEWSWIRE) -- First Connecticut Bancorp, Inc. (the "Company") (Nasdaq:FBNK), the holding company for Farmington Bank (the "Bank"), reported net income of $2.5 million, or $0.17 diluted earnings per share for the quarter ended September 30, 2014 compared to net income of $2.2 million, or $0.14 diluted earnings per share in the linked quarter. Diluted earnings per share were $0.06 for the third quarter of 2013.
"We continue to be pleased with our earnings growth, which is a direct result of our organic growth strategy. We continue to focus on our long term objective of growing tangible book value for shareholders," stated John J. Patrick Jr., First Connecticut Bancorp's Chairman, President & CEO.
"Our recent expansion into western Massachusetts enables us to grow the franchise organically and provides us the opportunity to expand our role as a vital and active participant in the communities we serve."
Financial Highlights
- Net interest income increased $421,000 to $16.0 million in the third quarter of 2014 compared to $15.6 million in the linked quarter and increased $2.7 million or 20% compared to third quarter of 2013.
- Strong organic loan growth continued during the quarter as total loans increased $101.5 million to $2.0 billion at September 30, 2014 and increased $319.6 million or 19% from a year ago.
- Noninterest expense to average assets was 2.46% in the third quarter of 2014 compared to 2.60% in the linked quarter and 2.95% in the third quarter of 2013.
- Tangible book value per share grew to $14.56 compared to $14.39 on a linked quarter basis and $13.88 at September 30, 2013.
- Checking accounts grew by 3.3% or 1,419 net new accounts in the third quarter of 2014.
- Asset quality remains stable as loan delinquencies 30 days and greater remained flat at 0.78% of total loans at September 30, 2014 and June 30, 2014 and improved from 0.87% of total loans at September 30, 2013. Non-accrual loans represented 0.76% of total loans compared to 0.75% of total loans on a linked quarter basis and improved from 0.80% of total loans at September 30, 2013.
- The allowance for loan losses represented 0.91% of total loans at September 30, 2014 compared to 0.92% at June 30, 2014 and 1.02% at September 30, 2013.
- The Company paid a cash dividend of $0.05 per share on September 15, 2014, an increase of $0.01 compared to the linked quarter. This marks the twelfth consecutive quarter the Company has paid a dividend since it became a public company on June 29, 2011.
Third quarter 2014 compared with second quarter 2014
Net interest income
- Net interest income increased $421,000 to $16.0 million in the third quarter of 2014 compared to the linked quarter due primarily to an $88.7 million increase in the average net loan balance offset by an 11 basis point decrease in the net interest rate spread to 2.77%.
- Net interest margin decreased to 2.89% in the third quarter of 2014 compared to 3.01% in the second quarter of 2014. Excluding prepayment penalty fee income, second quarter net interest margin would have been 2.97%.
- The cost of interest-bearing liabilities increased to 59 basis points in the third quarter of 2014 compared to 57 basis points in the second quarter of 2014.
Provision for loan losses
- Provision for loan losses was $1.0 million for the third quarter of 2014 compared to $410,000 for the linked quarter. The increase in the third quarter 2014 provision was primarily due to an increase in loan growth and the composition of new loan originations.
- Net charge-offs in the quarter were $397,000 or 0.08% to average loans (annualized) compared to $129,000 or 0.03% to average loans (annualized) in the linked quarter.
- The allowance for loan losses represented 0.91% of total loans at September 30, 2014 compared to 0.92% at June 30, 2014.
Noninterest income
- Total noninterest income increased $712,000 to $2.8 million in the third quarter of 2014 compared to the linked quarter due to a $316,000 increase in net gain on loans sold, $142,000 increase in fees for customer services and a $253,000 increase in other income related to swap fees and mortgage banking derivatives.
Noninterest expense
- Noninterest expense remained flat in the third quarter of 2014 at $14.2 million compared to the linked quarter. Marketing expenses decreased $177,000 due to seasonal sponsorships offset by increases in occupancy expense and other operating expenses.
Income tax expense
- Income tax expense was $997,000 in the third quarter of 2014 compared to $776,000 in the linked quarter.
Third quarter 2014 compared with third quarter 2013
Net interest income
- Net interest income increased $2.7 million or 20% to $16.0 million compared to $13.3 million in the third quarter of 2013 primarily due to a $329.9 million increase in the average net loan balance despite a 12 basis point decrease in the yield on loans.
- Net interest margin decreased to 2.89% in the third quarter of 2014 compared to 2.94% in the third quarter of 2013.
- The cost of interest-bearing liabilities declined 14 basis points to 59 basis points in the third quarter of 2014 compared to 73 basis points in the third quarter of 2013. The decline was primarily due to a 9 basis point decrease in certificates of deposit and a 135 basis point decrease in Federal Home Loan Bank of Boston advance costs due to an increase in short-term advances which carry lower rates.
Provision for loan losses
- Provision for loan losses was $1.0 million for the third quarter of 2014 compared to $215,000 for the prior year quarter. The increase in the third quarter 2014 provision was primarily due to the composition of new loan originations.
- Net charge-offs in the quarter were $397,000 or 0.08% to average loans (annualized) compared to $42,000 or 0.01% to average loans (annualized) in the prior year quarter.
- The allowance for loan losses represented 0.91% of total loans at September 30, 2014 compared to 1.02% at September 30, 2013.
Noninterest income
- Total noninterest income increased $596,000 to $2.8 million compared to the prior year quarter primarily due to a $230,000 increase in fees for customer services and a $671,000 increase in other income offset by a $304,000 decrease in gain on sale of investments. Other income increased $671,000 primarily due to swap fees and mortgage banking derivatives. There were no sales of investments in the third quarter of 2014.
Noninterest expense
- Noninterest expense increased $109,000 to $14.2 million in the third quarter of 2014 compared to the prior year quarter.
Income tax expense
- Income tax expense was $997,000 in the third quarter of 2014 compared to $275,000 in the prior year quarter.
Financial Condition
- Total assets increased $403.2 million or 20% at September 30, 2014 to $2.4 billion compared to $2.0 billion at September 30, 2013 largely reflecting an increase in loans and securities.
- Our investment portfolio totaled $207.1 million at September 30, 2014 compared to $123.4 million at September 30, 2013, an increase of $83.8 million.
- Net loans increased $319.3 million at September 30, 2014 to $2.0 billion compared to $1.7 billion at September 30, 2013 due to our continued focus on commercial and residential lending, which combined, increased $329.5 million.
- Deposits increased $177.4 million at September 30, 2014 to $1.7 billion compared to $1.6 billion at September 30, 2013, due to increases in municipal deposits, noninterest-bearing deposits and de novo branch openings as we continue to develop and grow relationships in the geographical areas we serve.
- Federal Home Loan Bank of Boston advances increased $200.7 million to $304.7 million at September 30, 2014 compared to $104.0 million at September 30, 2013. Advances were used to support loan and securities growth.
Asset Quality
- At September 30, 2014, the allowance for loan losses represented 0.91% of total loans and 119.91% of non-accrual loans, compared to 1.02% of total loans and 127.30% of non-accrual loans at September 30, 2013.
- Loan delinquencies 30 days and greater decreased to 0.78% of total loans at September 30, 2014 compared to 0.87% of total loans at September 30, 2013.
- Non-accrual loans represented 0.76% of total loans at September 30, 2014 compared to 0.80% of total loans at September 30, 2013.
- Net charge-offs in the quarter were $397,000 or 0.08% to average loans (annualized) compared to $42,000 or 0.01% 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 14.11% at September 30, 2014.
- Tangible book value per share grew to $14.56 compared to $14.39 on a linked quarter basis and $13.88 at the quarter ended September 30, 2013.
- During the third quarter of 2014, the Company repurchased 2,500 shares of common stock at an average price per share of $14.54 at a total cost of $36,000. Repurchased shares are held as treasury stock and will be available for general corporate purposes. The Company has 921,477 shares remaining to repurchase at September 30, 2014 from prior regulatory approval.
- At September 30, 2014, 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.
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 22 branch locations throughout central Connecticut, offering commercial and residential lending as well as wealth management services in Connecticut and western Massachusetts. 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, October 23, 2014 at 9:30am Eastern Time to discuss third quarter results. Those wishing to participate in the call may dial-in to the call at 1-888-336-7151. 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 tabular form 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 | |||||
| September 30, | June 30, | March 31, | December 31, | September 30, | |
| (Dollars in thousands, except per share data) | 2014 | 2014 | 2014 | 2013 | 2013 |
| Selected Financial Condition Data: | |||||
| Total assets | $ 2,395,674 | $ 2,267,709 | $ 2,181,759 | $ 2,110,028 | $ 1,992,517 |
| Cash and cash equivalents | 43,914 | 50,778 | 44,110 | 38,799 | 50,323 |
| Securities held-to-maturity, at amortized cost | 12,439 | 12,715 | 12,872 | 12,983 | 3,002 |
| Securities available-for-sale, at fair value | 194,706 | 160,784 | 163,232 | 150,886 | 120,382 |
| Federal Home Loan Bank of Boston stock, at cost | 17,724 | 17,724 | 13,137 | 13,136 | 8,383 |
| Loans, net | 2,031,780 | 1,930,502 | 1,854,497 | 1,800,987 | 1,712,507 |
| Deposits | 1,727,994 | 1,630,779 | 1,634,400 | 1,513,501 | 1,550,627 |
| Federal Home Loan Bank of Boston advances | 304,700 | 291,000 | 206,000 | 259,000 | 104,000 |
| Total stockholders' equity | 233,646 | 231,269 | 230,488 | 232,209 | 227,864 |
| Allowance for loan losses | 18,556 | 17,912 | 17,631 | 18,314 | 17,678 |
| Non-accrual loans | 15,475 | 14,652 | 12,974 | 14,800 | 13,887 |
| Impaired loans | 39,579 | 41,891 | 41,782 | 39,623 | 42,587 |
| Loan delinquencies 30 days and greater | 15,922 | 15,257 | 14,882 | 15,511 | 15,032 |
| Selected Operating Data: | |||||
| Interest income | $ 18,528 | $ 17,854 | $ 16,980 | $ 16,697 | $ 15,806 |
| Interest expense | 2,543 | 2,290 | 2,230 | 2,366 | 2,523 |
| Net interest income | 15,985 | 15,564 | 14,750 | 14,331 | 13,283 |
| Provision for loan losses | 1,041 | 410 | 505 | 660 | 215 |
| Net interest income after provision for loan losses | 14,944 | 15,154 | 14,245 | 13,671 | 13,068 |
| Noninterest income | 2,778 | 2,066 | 1,762 | 2,183 | 2,182 |
| Noninterest expense | 14,219 | 14,254 | 13,960 | 14,398 | 14,110 |
| Income before income taxes | 3,503 | 2,966 | 2,047 | 1,456 | 1,140 |
| Income tax expense | 997 | 776 | 555 | 322 | 275 |
| Net income | $ 2,506 | $ 2,190 | $ 1,492 | $ 1,134 | $ 865 |
| Performance Ratios (annualized): | |||||
| Return on average assets | 0.43% | 0.40% | 0.28% | 0.22% | 0.18% |
| Return on average equity | 4.27% | 3.77% | 2.56% | 1.96% | 1.49% |
| Interest rate spread (1) | 2.77% | 2.88% | 2.86% | 2.80% | 2.77% |
| Net interest rate margin (2) | 2.89% | 3.01% | 2.99% | 2.94% | 2.94% |
| Non-interest expense to average assets | 2.46% | 2.60% | 2.63% | 2.80% | 2.95% |
| Efficiency ratio (3) | 75.78% | 80.85% | 84.54% | 87.19% | 91.24% |
| Average interest-earning assets to average interest-bearing liabilities | 127.11% | 128.04% | 128.59% | 129.64% | 130.77% |
| Asset Quality Ratios: | |||||
| Allowance for loan losses as a percent of total loans | 0.91% | 0.92% | 0.94% | 1.01% | 1.02% |
| Allowance for loan losses as a percent of non-accrual loans | 119.91% | 122.25% | 135.89% | 123.74% | 127.30% |
| Net charge-offs to average loans (annualized) | 0.08% | 0.03% | 0.26% | 0.01% | 0.01% |
| Non-accrual loans as a percent of total loans | 0.76% | 0.75% | 0.69% | 0.81% | 0.80% |
| Non-accrual loans as a percent of total assets | 0.65% | 0.65% | 0.59% | 0.70% | 0.70% |
| Loan delinquencies 30 days and greater as a percent of total loans | 0.78% | 0.78% | 0.80% | 0.85% | 0.87% |
| Per Share Related Data: | |||||
| Basic earnings per share | $ 0.17 | $ 0.15 | $ 0.10 | $ 0.07 | $ 0.06 |
| Diluted earnings per share | $ 0.17 | $ 0.14 | $ 0.10 | $ 0.07 | $ 0.06 |
| Dividends declared per share | $ 0.05 | $ 0.04 | $ 0.03 | $ 0.03 | $ 0.03 |
| Tangible book value (4) | $ 14.56 | $ 14.39 | $ 14.22 | $ 14.11 | $ 13.88 |
| Common stock shares outstanding | 16,043,031 | 16,072,637 | 16,203,933 | 16,457,642 | 16,416,427 |
| (1) Represents the difference between the weighted-average yield on average interest-earning assets and the weighted-average cost of interest-bearing liabilities. | |||||
| (2) Represents net interest income as a percent of average interest-earning assets. | |||||
| (3) Represents noninterest expense divided by the sum of net interest income and noninterest income, adjusted for non-recurring items. See "Reconciliation of Non-GAAP Financial Measures" table. | |||||
| (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. See "Reconciliation of Non-GAAP Financial Measures" table. | |||||
| First Connecticut Bancorp, Inc. | |||||
| Selected Financial Data (Unaudited) | |||||
| At or for the Three Months Ended | |||||
| September 30, | June 30, | March 31, | December 31, | September 30, | |
| (Dollars in thousands) | 2014 | 2014 | 2014 | 2013 | 2013 |
| Capital Ratios: | |||||
| Equity to total assets at end of period | 9.75% | 10.20% | 10.56% | 11.01% | 11.44% |
| Average equity to average assets | 10.13% | 10.59% | 10.99% | 11.23% | 12.11% |
| Total capital to risk-weighted assets | 14.11% * | 14.56% | 15.05% | 15.50% | 16.13% |
| Tier I capital to risk-weighted assets | 13.06% * | 13.51% | 13.97% | 14.36% | 14.97% |
| Tier I capital to total average assets | 10.24% * | 10.70% | 11.02% | 11.47% | 12.20% |
| Total equity to total average assets | 10.09% | 10.54% | 10.85% | 11.30% | 11.90% |
| * Estimated | |||||
| Loans and Allowance for Loan Losses: | |||||
| Real estate | |||||
| Residential | $ 789,166 | $ 749,124 | $ 716,836 | $ 693,046 | $ 674,804 |
| Commercial | 717,399 | 686,299 | 677,948 | 633,764 | 585,628 |
| Construction | 80,242 | 69,047 | 69,476 | 78,191 | 90,033 |
| Installment | 3,524 | 3,850 | 4,109 | 4,516 | 4,671 |
| Commercial | 289,708 | 277,483 | 244,075 | 252,032 | 213,103 |
| Collateral | 1,826 | 1,480 | 1,455 | 1,600 | 1,819 |
| Home equity line of credit | 163,608 | 156,625 | 153,619 | 151,606 | 147,026 |
| Demand | -- | -- | 124 | 85 | -- |
| Revolving credit | 97 | 75 | 80 | 94 | 78 |
| Resort | 1,019 | 1,068 | 1,124 | 1,374 | 9,849 |
| Total loans | 2,046,589 | 1,945,051 | 1,868,846 | 1,816,308 | 1,727,011 |
| Less: | |||||
| Allowance for loan losses | (18,556) | (17,912) | (17,631) | (18,314) | (17,678) |
| Net deferred loan costs | 3,747 | 3,363 | 3,282 | 2,993 | 3,174 |
| Loans, net | $ 2,031,780 | $ 1,930,502 | $ 1,854,497 | $ 1,800,987 | $ 1,712,507 |
| Deposits: | |||||
| Noninterest-bearing demand deposits | $ 323,499 | $ 315,916 | $ 303,966 | $ 308,459 | $ 278,275 |
| Interest-bearing | |||||
| NOW accounts | 454,650 | 377,570 | 368,700 | 285,392 | 339,350 |
| Money market | 417,498 | 401,694 | 427,535 | 387,225 | 386,682 |
| Savings accounts | 200,501 | 202,970 | 199,532 | 193,937 | 187,040 |
| Time deposits | 331,846 | 332,629 | 334,667 | 338,488 | 359,280 |
| Total interest-bearing deposits | 1,404,495 | 1,314,863 | 1,330,434 | 1,205,042 | 1,272,352 |
| Total deposits | $ 1,727,994 | $ 1,630,779 | $ 1,634,400 | $ 1,513,501 | $ 1,550,627 |
| First Connecticut Bancorp, Inc. | |||
| Consolidated Statements of Condition (Unaudited) | |||
| September 30, | June 30, | December 31, | |
| 2014 | 2014 | 2013 | |
| (Dollars in thousands) | |||
| Assets | |||
| Cash and cash equivalents | $ 43,914 | $ 50,778 | $ 38,799 |
| Securities held-to-maturity, at amortized cost | 12,439 | 12,715 | 12,983 |
| Securities available-for-sale, at fair value | 194,706 | 160,784 | 150,886 |
| Loans held for sale | 5,533 | 4,576 | 3,186 |
| Loans, net | 2,031,780 | 1,930,502 | 1,800,987 |
| Premises and equipment, net | 19,384 | 20,072 | 20,619 |
| Federal Home Loan Bank of Boston stock, at cost | 17,724 | 17,724 | 13,136 |
| Accrued income receivable | 5,331 | 5,133 | 4,917 |
| Bank-owned life insurance | 39,403 | 39,120 | 38,556 |
| Deferred income taxes | 14,529 | 14,756 | 14,884 |
| Prepaid expenses and other assets | 10,931 | 11,549 | 11,075 |
| Total assets | $ 2,395,674 | $ 2,267,709 | $ 2,110,028 |
| Liabilities and Stockholders' Equity | |||
| Deposits | |||
| Interest-bearing | $ 1,404,495 | $ 1,314,863 | $ 1,205,042 |
| Noninterest-bearing | 323,499 | 315,916 | 308,459 |
| 1,727,994 | 1,630,779 | 1,513,501 | |
| Federal Home Loan Bank of Boston advances | 304,700 | 291,000 | 259,000 |
| Repurchase agreement borrowings | 21,000 | 21,000 | 21,000 |
| Repurchase liabilities | 73,855 | 55,326 | 50,816 |
| Accrued expenses and other liabilities | 34,479 | 38,335 | 33,502 |
| Total liabilities | 2,162,028 | 2,036,440 | 1,877,819 |
| Stockholders' Equity | |||
| Common stock | 181 | 181 | 181 |
| Additional paid-in-capital | 177,937 | 177,431 | 175,766 |
| Unallocated common stock held by ESOP | (12,949) | (13,218) | (13,747) |
| Treasury stock, at cost | (28,585) | (28,577) | (22,599) |
| Retained earnings | 101,089 | 99,386 | 96,832 |
| Accumulated other comprehensive loss | (4,027) | (3,934) | (4,224) |
| Total stockholders' equity | 233,646 | 231,269 | 232,209 |
| Total liabilities and stockholders' equity | $ 2,395,674 | $ 2,267,709 | $ 2,110,028 |
| First Connecticut Bancorp, Inc. | |||||
| Consolidated Statements of Income (Unaudited) | |||||
| Three Months Ended | Nine Months Ended | ||||
| September 30, | June 30, | September 30, | September 30, | ||
| (Dollars in thousands, except per share data) | 2014 | 2014 | 2013 | 2014 | 2013 |
| Interest income | |||||
| Interest and fees on loans | |||||
| Mortgage | $ 14,490 | $ 13,875 | $ 12,381 | $ 41,793 | $ 35,721 |
| Other | 3,608 | 3,573 | 3,199 | 10,389 | 9,746 |
| Interest and dividends on investments | |||||
| United States Government and agency obligations | 258 | 218 | 103 | 665 | 344 |
| Other bonds | 57 | 81 | 59 | 196 | 177 |
| Corporate stocks | 109 | 105 | 62 | 307 | 188 |
| Other interest income | 6 | 2 | 2 | 12 | 13 |
| Total interest income | 18,528 | 17,854 | 15,806 | 53,362 | 46,189 |
| Interest expense | |||||
| Deposits | 1,845 | 1,711 | 1,914 | 5,250 | 5,446 |
| Interest on borrowed funds | 479 | 368 | 383 | 1,166 | 1,253 |
| Interest on repo borrowings | 182 | 179 | 181 | 538 | 532 |
| Interest on repurchase liabilities | 37 | 32 | 45 | 109 | 136 |
| Total interest expense | 2,543 | 2,290 | 2,523 | 7,063 | 7,367 |
| Net interest income | 15,985 | 15,564 | 13,283 | 46,299 | 38,822 |
| Provision for loan losses | 1,041 | 410 | 215 | 1,956 | 870 |
| Net interest income after provision for loan losses | 14,944 | 15,154 | 13,068 | 44,343 | 37,952 |
| Noninterest income | |||||
| Fees for customer services | 1,459 | 1,317 | 1,229 | 3,967 | 3,308 |
| Gain on sale of investments | -- | -- | 304 | -- | 340 |
| Net gain on loans sold | 633 | 317 | 625 | 1,072 | 4,244 |
| Brokerage and insurance fee income | 47 | 49 | 37 | 140 | 110 |
| Bank owned life insurance income | 284 | 281 | 303 | 847 | 1,015 |
| Other | 355 | 102 | (316) | 580 | (188) |
| Total noninterest income | 2,778 | 2,066 | 2,182 | 6,606 | 8,829 |
| Noninterest expense | |||||
| Salaries and employee benefits | 8,593 | 8,638 | 8,571 | 25,519 | 26,160 |
| Occupancy expense | 1,271 | 1,209 | 1,175 | 3,829 | 3,541 |
| Furniture and equipment expense | 1,093 | 1,106 | 998 | 3,217 | 3,115 |
| FDIC assessment | 361 | 321 | 341 | 1,010 | 943 |
| Marketing | 332 | 509 | 423 | 1,219 | 1,627 |
| Other operating expenses | 2,569 | 2,471 | 2,602 | 7,639 | 7,978 |
| Total noninterest expense | 14,219 | 14,254 | 14,110 | 42,433 | 43,364 |
| Income before income taxes | 3,503 | 2,966 | 1,140 | 8,516 | 3,417 |
| Income tax expense | 997 | 776 | 275 | 2,328 | 847 |
| Net income | $ 2,506 | $ 2,190 | $ 865 | $ 6,188 | $ 2,570 |
| Earnings per share: | |||||
| Basic | $ 0.17 | $ 0.15 | $ 0.06 | $ 0.41 | $ 0.16 |
| Diluted | 0.17 | 0.14 | 0.06 | 0.41 | 0.16 |
| Weighted average shares outstanding: | |||||
| Basic | 14,613,115 | 14,601,416 | 14,947,576 | 14,677,650 | 15,372,552 |
| Diluted | 14,710,880 | 14,707,472 | 14,947,576 | 14,778,961 | 15,372,552 |
| First Connecticut Bancorp, Inc. | |||||||||
| Consolidated Average Balances, Yields and Rates (Unaudited) | |||||||||
| For The Three Months Ended | |||||||||
| September 30, 2014 | June 30, 2014 | September 30, 2013 | |||||||
|
Average Balance |
Interest and Dividends |
Yield/ Cost |
Average Balance |
Interest and Dividends |
Yield/ Cost |
Average Balance |
Interest and Dividends |
Yield/ Cost |
|
| (Dollars in thousands) | |||||||||
| Interest-earning assets: | |||||||||
| Loans, net | $ 1,978,854 | $ 18,098 | 3.63% | $ 1,890,132 | $ 17,448 | 3.70% | $ 1,648,948 | $ 15,580 | 3.75% |
| Securities | 189,246 | 369 | 0.77% | 167,250 | 355 | 0.85% | 131,602 | 216 | 0.65% |
| Federal Home Loan Bank of Boston stock | 17,724 | 55 | 1.23% | 14,744 | 49 | 1.33% | 8,383 | 8 | 0.38% |
| Federal funds and other earning assets | 4,918 | 6 | 0.48% | 3,567 | 2 | 0.22% | 3,288 | 2 | 0.24% |
| Total interest-earning assets | 2,190,742 | 18,528 | 3.36% | 2,075,693 | 17,854 | 3.45% | 1,792,221 | 15,806 | 3.50% |
| Noninterest-earning assets | 124,823 | 118,056 | 122,886 | ||||||
| Total assets | $ 2,315,565 | $ 2,193,749 | $ 1,915,107 | ||||||
| Interest-bearing liabilities: | |||||||||
| NOW accounts | $ 436,303 | $ 313 | 0.28% | $ 332,597 | $ 185 | 0.22% | $ 303,882 | $ 180 | 0.24% |
| Money market | 406,293 | 748 | 0.73% | 414,774 | 754 | 0.73% | 371,614 | 794 | 0.85% |
| Savings accounts | 199,505 | 57 | 0.11% | 204,217 | 42 | 0.08% | 185,732 | 79 | 0.17% |
| Certificates of deposit | 330,496 | 727 | 0.87% | 335,391 | 730 | 0.87% | 356,994 | 861 | 0.96% |
| Total interest-bearing deposits | 1,372,597 | 1,845 | 0.53% | 1,286,979 | 1,711 | 0.53% | 1,218,222 | 1,914 | 0.62% |
| Advances from the Federal Home Loan Bank | 270,250 | 479 | 0.70% | 259,980 | 368 | 0.57% | 74,101 | 383 | 2.05% |
| Repurchase agreement borrowings | 21,000 | 182 | 3.44% | 21,000 | 179 | 3.42% | 21,000 | 181 | 3.42% |
| Repurchase liabilities | 59,624 | 37 | 0.25% | 53,159 | 32 | 0.24% | 57,187 | 45 | 0.31% |
| Total interest-bearing liabilities | 1,723,471 | 2,543 | 0.59% | 1,621,118 | 2,290 | 0.57% | 1,370,510 | 2,523 | 0.73% |
| Noninterest-bearing deposits | 321,008 | 303,473 | 272,621 | ||||||
| Other noninterest-bearing liabilities | 36,482 | 36,891 | 39,772 | ||||||
| Total liabilities | 2,080,961 | 1,961,482 | 1,682,903 | ||||||
| Stockholders' equity | 234,604 | 232,267 | 232,204 | ||||||
| Total liabilities and stockholders' equity | $ 2,315,565 | $ 2,193,749 | $ 1,915,107 | ||||||
| Net interest income | $ 15,985 | $ 15,564 | $ 13,283 | ||||||
| Net interest rate spread (1) | 2.77% | 2.88% | 2.77% | ||||||
| Net interest-earning assets (2) | $ 467,271 | $ 454,575 | $ 421,711 | ||||||
| Net interest margin (3) | 2.89% | 3.01% | 2.94% | ||||||
| Average interest-earning assets to average interest-bearing liabilities | 127.11% | 128.04% | 130.77% | ||||||
| (1) Net interest rate spread represents the difference between the yield on average interest-earning assets and the cost of average interest-bearing liabilities. | |||||||||
| (2) Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities. | |||||||||
| (3) Net interest margin represents net interest income divided by average total interest-earning assets. | |||||||||
| First Connecticut Bancorp, Inc. | ||||||
| Consolidated Average Balances, Yields and Rates (Unaudited) | ||||||
| For The Nine Months Ended September 30, | ||||||
| 2014 | 2013 | |||||
|
Average Balance |
Interest and Dividends |
Yield/Cost |
Average Balance |
Interest and Dividends |
Yield/Cost |
|
| (Dollars in thousands) | ||||||
| Interest-earning assets: | ||||||
| Loans, net | $ 1,896,768 | $ 52,182 | 3.68% | $ 1,583,569 | $ 45,467 | 3.84% |
| Securities | 172,491 | 1,026 | 0.80% | 124,429 | 684 | 0.73% |
| Federal Home Loan Bank of Boston stock | 15,218 | 142 | 1.25% | 8,524 | 25 | 0.39% |
| Federal funds and other earning assets | 3,913 | 12 | 0.41% | 9,513 | 13 | 0.18% |
| Total interest-earning assets | 2,088,390 | 53,362 | 3.42% | 1,726,035 | 46,189 | 3.58% |
| Noninterest-earning assets | 123,580 | 121,784 | ||||
| Total assets | $ 2,211,970 | $ 1,847,819 | ||||
| Interest-bearing liabilities: | ||||||
| NOW accounts | $ 374,084 | $ 695 | 0.25% | $ 268,483 | $ 466 | 0.23% |
| Money market | 410,066 | 2,186 | 0.71% | 354,291 | 2,105 | 0.79% |
| Savings accounts | 198,978 | 154 | 0.10% | 180,490 | 237 | 0.18% |
| Certificates of deposit | 334,037 | 2,215 | 0.89% | 355,934 | 2,638 | 0.99% |
| Total interest-bearing deposits | 1,317,165 | 5,250 | 0.53% | 1,159,198 | 5,446 | 0.63% |
| Federal Home Loan Bank of Boston advances | 237,576 | 1,166 | 0.66% | 74,386 | 1,253 | 2.25% |
| Repurchase agreement borrowings | 21,000 | 538 | 3.43% | 21,000 | 532 | 3.39% |
| Repurchase liabilities | 57,984 | 109 | 0.25% | 53,106 | 136 | 0.34% |
| Total interest-bearing liabilities | 1,633,725 | 7,063 | 0.58% | 1,307,690 | 7,367 | 0.75% |
| Noninterest-bearing deposits | 308,112 | 256,830 | ||||
| Other noninterest-bearing liabilities | 36,664 | 45,876 | ||||
| Total liabilities | 1,978,501 | 1,610,396 | ||||
| Stockholders' equity | 233,469 | 237,423 | ||||
| Total liabilities and stockholders' equity | $ 2,211,970 | $ 1,847,819 | ||||
| Net interest income | $ 46,299 | $ 38,822 | ||||
| Net interest rate spread (1) | 2.84% | 2.83% | ||||
| Net interest-earning assets (2) | $ 454,665 | $ 418,345 | ||||
| Net interest margin (3) | 2.96% | 3.01% | ||||
| Average interest-earning assets to average interest-bearing liabilities | 127.83% | 131.99% | ||||
| (1) Net interest rate spread represents the difference between the yield on average interest-earning assets and the cost of average interest-bearing liabilities. | ||||||
| (2) Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities. | ||||||
| (3) Net interest margin represents 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 September 30, 2014, June 30, 2014, March 31, 2014, December 31, 2013 and September 30, 2013. 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 | |||||
| September 30, | June 30, | March 31, | December 31, | September 30, | |
| (Dollars in thousands, except per share data) | 2014 | 2014 | 2014 | 2013 | 2013 |
| Net Income | $ 2,506 | $ 2,190 | $ 1,492 | $ 1,134 | $ 865 |
| Adjustments: | |||||
| Less: Prepayment penalty fees | -- | (185) | -- | (144) | -- |
| Less: Net gain on sales of investments | -- | -- | -- | -- | (304) |
| Total core adjustments before taxes | -- | (185) | -- | (144) | (304) |
| Tax benefit - 34% rate | -- | 63 | -- | 49 | 103 |
| Total core adjustments after taxes | -- | (122) | -- | (95) | (201) |
| Total core net income | $ 2,506 | $ 2,068 | $ 1,492 | $ 1,039 | $ 664 |
| Total net interest income | $ 15,985 | $ 15,564 | $ 14,750 | $ 14,331 | $ 13,283 |
| Less: Prepayment penalty fees | -- | (185) | -- | (144) | -- |
| Total core net interest income | $ 15,985 | $ 15,379 | $ 14,750 | $ 14,187 | $ 13,283 |
| Total noninterest income | $ 2,778 | $ 2,066 | $ 1,762 | $ 2,183 | $ 2,182 |
| Less: Net gain on sales of investments | -- | -- | -- | -- | (304) |
| Total core noninterest income | $ 2,778 | $ 2,066 | $ 1,762 | $ 2,183 | $ 1,878 |
| Total noninterest expense | $ 14,219 | $ 14,254 | $ 13,960 | $ 14,398 | $ 14,110 |
| Total core noninterest expense | $ 14,219 | $ 14,254 | $ 13,960 | $ 14,398 | $ 14,110 |
| Core earnings per common share, diluted | $ 0.17 | $ 0.14 | $ 0.10 | $ 0.07 | $ 0.04 |
| Core return on assets (annualized) | 0.43% | 0.38% | 0.28% | 0.20% | 0.14% |
| Core return on equity (annualized) | 4.27% | 3.56% | 2.56% | 1.80% | 1.14% |
| Efficiency ratio (1) | 75.78% | 81.71% | 84.54% | 87.95% | 93.07% |
| Tangible book value (2) | $ 14.56 | $ 14.39 | $ 14.22 | $ 14.11 | $ 13.88 |
| (1) Represents core noninterest expense divided by the sum of core net interest income and core noninterest income. | |||||
| (2) 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. | |||||