Attached files
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| 8-K - FIRST CONNECTICUT BANCORP, INC. 8-K 1 30 14 - First Connecticut Bancorp, Inc. | fcb8k13014.htm |
Exhibit 99.1
First Connecticut Bancorp, Inc. Announces Fourth Quarter 2013 Results
FARMINGTON, Conn., January 30, 2014 – First Connecticut Bancorp, Inc. (the “Company”) (NASDAQ: FBNK), the holding company for Farmington Bank (the “Bank”), reported net interest income of $14.2 million and net income of $1.1 million for the quarter ended December 31, 2013. Diluted earnings per share were $0.07 compared with $0.06 per diluted share for the third quarter of 2013 and $0.19 per diluted share for the fourth quarter of 2012. Earnings per share for the fourth quarter of 2012 included $0.06 related to the freezing of retirement plans.
“We continue to be encouraged that core earnings are building as a direct result of our annual increase in loans of $282 million and $89 million for the quarter. This organic growth coupled with the stabilization of our net interest margin and flat operating expenses resulted in a $0.45 increase in tangible book value per share for the year,” stated John J. Patrick Jr., First Connecticut Bancorp’s Chairman, President & CEO.
“During the year we completed our strategic exit of the resort financing market, opened two new branch offices and our 22nd branch office in Rocky Hill, CT in January, 2014. The opening of the Rocky Hill branch office completes the Company’s strategic de novo branch expansion.”
Financial Highlights
|
·
|
Net interest income increased $939,000 or 7% to $14.2 million in the fourth quarter of 2013 compared to $13.3 million in the linked quarter.
|
|
·
|
Noninterest expense to average assets was 2.80% in the fourth quarter of 2013 compared to 2.95% in the linked quarter.
|
|
·
|
Strong organic loan growth continued during the quarter as total loans increased $89.3 million or 5% to $1.8 billion at December 31, 2013 and increased $282.3 million or 18% for the year ended December 31, 2013.
|
|
·
|
Strong organic loan originations totaled $185.8 million during the quarter. Compared to prior quarter, the Commercial and Industrial, Commercial Real Estate and Residential Real Estate portfolios increased by $38.9 million, $48.1 million and $18.2 million, respectively.
|
|
·
|
Tangible book value per share grew to $14.08 compared to $13.86 on a linked quarter basis and $13.63 at the quarter ended December 31, 2012.
|
|
·
|
Checking accounts grew by 3.0% or 1,165 net new accounts in the fourth quarter of 2013.
|
|
·
|
Asset quality remained stable as non-accrual loans represented 0.81% of total loans compared to 0.80% of total loans on a linked quarter basis. Loan delinquencies 30 days and greater decreased slightly to 0.85% of total loans at December 31, 2013 compared to 0.87% of total loans at September 30, 2013.
|
|
·
|
The provision for loan losses was $660,000 in the fourth quarter compared to $215,000 in the linked quarter due to continued loan growth, specifically in Commercial Real Estate and Commercial and Industrial portfolios.
|
|
·
|
During the fourth quarter of 2013, we repurchased 48,585 shares of common stock at an average price per share of $14.75 at a total cost of $717,000. Repurchased shares will be held as treasury stock and will be available for general corporate purposes.
|
|
·
|
We paid a cash dividend of $0.03 per share on December 16, 2013. This marks the ninth consecutive quarter we have paid a dividend since First Connecticut Bancorp, Inc. became a public company on June 29, 2011.
|
Fourth quarter 2013 compared with third quarter 2013
Net interest income
|
·
|
Net interest income increased $939,000 to $14.2 million in the fourth quarter of 2013 compared to the linked quarter due primarily to an $118.5 million increase in the average loan balance and despite a 6 basis point decrease in the yield on loans.
|
|
·
|
Yield on average interest earning assets decreased 7 basis points from the linked quarter to 3.43% for the quarter ended December 31, 2013. Net interest margin decreased 2 basis points to 2.92% in the fourth quarter of 2013 compared to the linked quarter.
|
|
·
|
The cost of interest-bearing deposits decreased slightly to 59 basis points for the quarter ended December 31, 2013 compared to 62 basis points on a linked quarter basis.
|
Provision for loan losses
|
·
|
Provision for loan losses was $660,000 for the fourth quarter of 2013 compared to $215,000 for the linked quarter.
|
|
·
|
Net charge-offs in the quarter were $24,000 or 0.01% to average loans (annualized) compared to $42,000 or 0.01% to average loans (annualized) in the linked quarter.
|
|
·
|
The allowance for loan losses represented 1.01% of total loans at December 31, 2013 compared to 1.02% for the linked quarter.
|
Noninterest income
|
·
|
Total noninterest income decreased $60,000 to $2.2 million for the fourth quarter of 2013 compared to the linked quarter primarily due to a $304,000 decrease in gain on sale of investments offset by a $267,000 increase in other income.
|
|
·
|
Other income increased $267,000 primarily due to a $202,000 reduction in the mortgage banking derivatives loss due primarily to a decrease in volume in our secondary market residential lending program in the fourth quarter of 2013 when compared to the linked quarter.
|
Noninterest expense
|
·
|
Noninterest expense increased $275,000 or 2% to $14.4 million in the fourth quarter of 2013 compared to the linked quarter as a result of an increase in salaries and employee benefits, including severance, and increases in other operating expenses to support growth.
|
Income tax provision
|
·
|
Income tax provision was $288,000 in the fourth quarter of 2013 compared to $292,000 in the linked quarter.
|
Fourth quarter 2013 compared with fourth quarter 2012
Net interest income
|
·
|
Net interest income increased $130,000 to $14.2 million compared to $14.1 million in the fourth quarter of 2012. The increase was despite a decrease in interest income on the resort portfolio of $561,000 in the current quarter compared to the fourth quarter of 2012.
|
|
·
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Net interest margin decreased 45 basis points to 2.92% in the fourth quarter of 2013 compared to 3.37% in the fourth quarter of 2012 primarily due to a lower interest rate environment, lower prepayment penalty fees and a $30.7 million decline in the average balance of the resort portfolio. Excluding resort and prepayment penalty fee income for both quarters, the net interest margin decreased 26 basis points.
|
|
·
|
The cost of interest-bearing deposits declined slightly to 59 basis points in the fourth quarter of 2013 compared to 62 basis points in the fourth quarter of 2012.
|
Provision for loan losses
|
·
|
Provision for loan losses was $660,000 for the fourth quarter of 2013 compared to $315,000 for the prior year quarter.
|
|
·
|
Net charge-offs in the quarter were $24,000 or 0.01% to average loans (annualized) compared to $1.0 million or 0.27% to average loans (annualized) in the prior year quarter.
|
|
·
|
The allowance for loan losses represented 1.01% of total loans at December 31, 2013 compared to 1.12% for the prior year quarter.
|
Noninterest income
|
·
|
Total noninterest income decreased $1.9 million to $2.2 million compared to the prior year quarter primarily due to decreases in net gains on loans sold of $1.4 million, bank owned life insurance of $270,000 and other income of $465,000 offset by a $202,000 increase in fees for customer service.
|
|
·
|
Other income decreased $465,000 due to a $121,000 loss in the mortgage banking derivatives in the fourth quarter of 2013 compared to a $355,000 gain in the prior year quarter. The loss in the fourth quarter of 2013 was due to a decrease in volume in our secondary market residential lending program in the fourth quarter of 2013 when compared to the prior year quarter.
|
Noninterest expense
|
·
|
Noninterest expense, excluding the $1.5 million reduction in pension and other post-retirement benefits expense recognized in the prior year quarter due to the freezing of these plans, decreased $513,000 to $14.4 million in the fourth quarter of 2013 compared to the prior year quarter.
|
|
·
|
Salaries and employee benefits, excluding the pension and other post-retirement benefits recognized in the prior year quarter, decreased $351,000 to $8.7 million compared to the prior year quarter.
|
|
·
|
Marketing expense decreased $219,000 or 37% compared to the prior year quarter primarily due to general expense control initiatives.
|
Income tax provision
|
·
|
Income tax provision was $288,000 in the fourth quarter of 2013 compared to $1.3 million in the prior year quarter.
|
December 31, 2013 compared to September 30, 2013
Financial condition
|
·
|
Total assets increased $117.5 million or 6% at December 31, 2013 to $2.1 billion compared to September 30, 2013 largely reflecting an increase in loans and securities.
|
|
·
|
Our investment portfolio totaled $163.9 million at December 31, 2013 compared to $123.4 million at September 30, 2013, an increase of $40.5 million.
|
|
·
|
Net loans increased $88.5 million at December 31, 2013 to $1.8 billion compared to September 30, 2013 due to our continued focus on commercial and residential lending which, combined, increased $98.0 million, offset by an $8.5 million decrease in resort loans as we completed our planned exit of the resort financing market.
|
|
·
|
Deposits decreased $37.1 million at December 31, 2013 compared to September 30, 2013, due to a $65.6 million seasonal decline in municipal deposits offset by a $30.2 million increase in noninterest bearing customer deposits as we continue to develop and grow relationships in the geographical areas we serve.
|
|
·
|
Federal Home Loan Bank of Boston advances increased $155.0 million to $259.0 million at December 31, 2013 compared to September 30, 2013 to support loan and securities growth.
|
|
·
|
Stockholders’ equity increased $4.3 million to $231.8 million at December 31, 2013 compared to September 30, 2013.
|
Asset Quality
|
·
|
At December 31, 2013, the allowance for loan losses represented 1.01% of total loans and 123.74% of non-accrual loans, compared to 1.02% of total loans and 127.30% of non-accrual loans at September 30, 2013.
|
|
·
|
Non-accrual loans represented 0.81% of total loans at December 31, 2013 compared to 0.80% of total loans at September 30, 2013.
|
|
·
|
Loan delinquencies 30 days and greater decreased slightly to 0.85% of total loans at December 31, 2013 compared to 0.87% of total loans at September 30, 2013.
|
Capital and Liquidity
|
·
|
The Company remained well-capitalized with an estimated total capital to risk-weighted asset ratio of 15.48% at December 31, 2013.
|
|
·
|
Tangible book value per share was $14.08 compared to $13.86 on a linked quarter basis and $13.63 from a year ago.
|
|
·
|
At December 31, 2013, 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. 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.
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
|
||||||||||
|
December 31,
|
September 30,
|
June 30,
|
March 31,
|
December 31,
|
||||||
|
(Dollars in thousands, except per share data)
|
2013
|
2013
|
2013
|
2013
|
2012
|
|||||
|
Selected Financial Condition Data:
|
||||||||||
|
Total assets
|
$ 2,109,716
|
$ 1,992,201
|
$ 1,845,116
|
$ 1,799,392
|
$ 1,822,946
|
|||||
|
Cash and cash equivalents
|
38,799
|
50,323
|
36,650
|
34,946
|
50,641
|
|||||
|
Held to maturity securities
|
12,983
|
3,002
|
3,003
|
3,003
|
3,006
|
|||||
|
Available for sale securities
|
150,886
|
120,382
|
112,801
|
108,787
|
138,241
|
|||||
|
Federal Home Loan Bank of Boston stock, at cost
|
13,136
|
8,383
|
8,383
|
8,383
|
8,939
|
|||||
|
Loans receivable, net
|
1,800,987
|
1,712,507
|
1,588,080
|
1,544,687
|
1,520,170
|
|||||
|
Deposits
|
1,513,501
|
1,550,627
|
1,452,319
|
1,376,092
|
1,330,455
|
|||||
|
Federal Home Loan Bank of Boston advances
|
259,000
|
104,000
|
51,250
|
76,000
|
128,000
|
|||||
|
Total stockholders' equity
|
231,797
|
227,536
|
231,180
|
242,869
|
241,522
|
|||||
|
Allowance for loan losses
|
18,314
|
17,678
|
17,505
|
17,332
|
17,229
|
|||||
|
Non-accrual loans
|
14,800
|
13,887
|
14,325
|
13,911
|
13,782
|
|||||
|
Impaired loans
|
39,623
|
42,587
|
39,159
|
39,210
|
36,857
|
|||||
|
Selected Operating Data:
|
||||||||||
|
Interest income
|
$ 16,697
|
$ 15,806
|
$ 15,336
|
$ 15,047
|
$ 16,507
|
|||||
|
Interest expense
|
2,475
|
2,523
|
2,449
|
2,395
|
2,415
|
|||||
|
Net interest income
|
14,222
|
13,283
|
12,887
|
12,652
|
14,092
|
|||||
|
Provision for allowance for loan losses
|
660
|
215
|
256
|
399
|
315
|
|||||
|
Net interest income after provision for loan losses
|
13,562
|
13,068
|
12,631
|
12,253
|
13,777
|
|||||
|
Noninterest income
|
2,175
|
2,235
|
2,974
|
3,538
|
4,054
|
|||||
|
Noninterest expense
|
14,385
|
14,110
|
14,555
|
14,699
|
13,411
|
|||||
|
Income before income taxes
|
1,352
|
1,193
|
1,050
|
1,092
|
4,420
|
|||||
|
Provision for income taxes
|
288
|
292
|
248
|
279
|
1,250
|
|||||
|
Net income
|
$ 1,064
|
$ 901
|
$ 802
|
$ 813
|
$ 3,170
|
|||||
|
Performance Ratios (annualized):
|
||||||||||
|
Return on average assets
|
0.21%
|
0.19%
|
0.17%
|
0.18%
|
0.71%
|
|||||
|
Return on average equity
|
1.85%
|
1.55%
|
1.36%
|
1.33%
|
5.20%
|
|||||
|
Interest rate spread (1)
|
2.77%
|
2.77%
|
2.83%
|
2.89%
|
3.19%
|
|||||
|
Net interest rate margin (2)
|
2.92%
|
2.94%
|
3.01%
|
3.07%
|
3.37%
|
|||||
|
Non-interest expense to average assets
|
2.80%
|
2.95%
|
3.17%
|
3.28%
|
3.01%
|
|||||
|
Efficiency ratio (3)
|
88.51%
|
92.74%
|
92.09%
|
88.16%
|
86.99%
|
|||||
|
Average interest-earning assets to average
|
||||||||||
|
interest-bearing liabilities
|
129.65%
|
130.77%
|
132.30%
|
132.04%
|
131.80%
|
|||||
|
Asset Quality Ratios:
|
||||||||||
|
Allowance for loan losses as a percent of total loans
|
1.01%
|
1.02%
|
1.09%
|
1.11%
|
1.12%
|
|||||
|
Allowance for loan losses as a percent of
|
||||||||||
|
non-accrual loans
|
123.74%
|
127.30%
|
122.20%
|
124.59%
|
125.01%
|
|||||
|
Net charge-offs to average loans (annualized)
|
0.01%
|
0.01%
|
0.02%
|
0.08%
|
0.27%
|
|||||
|
Non-accrual loans as a percent of total loans
|
0.81%
|
0.80%
|
0.89%
|
0.89%
|
0.90%
|
|||||
|
Non-accrual loans as a percent of total assets
|
0.70%
|
0.70%
|
0.78%
|
0.77%
|
0.76%
|
|||||
|
Per Share Related Data:
|
||||||||||
|
Basic earnings per share
|
$ 0.07
|
$ 0.06
|
$ 0.05
|
$ 0.05
|
$ 0.19
|
|||||
|
Diluted earnings per share
|
$ 0.07
|
$ 0.06
|
$ 0.05
|
$ 0.05
|
$ 0.19
|
|||||
|
Dividends declared per share
|
$ 0.03
|
$ 0.03
|
$ 0.03
|
$ 0.03
|
$ 0.03
|
|||||
|
Tangible book value (4)
|
$ 14.08
|
$ 13.86
|
$ 13.79
|
$ 13.76
|
$ 13.63
|
|||||
|
Common stock shares outstanding
|
16,457,642
|
16,416,427
|
16,763,516
|
17,644,449
|
17,714,481
|
|||||
|
(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
|
|||||||||
|
December 31,
|
September 30,
|
June 30,
|
March 31,
|
December 31,
|
|||||
|
(Dollars in thousands)
|
2013
|
2013
|
2013
|
2013
|
2012
|
||||
|
Capital Ratios:
|
|||||||||
|
Equity to total assets at end of period
|
10.99%
|
11.42%
|
12.53%
|
13.50%
|
13.25%
|
||||
|
Average equity to average assets
|
11.22%
|
12.11%
|
12.83%
|
13.62%
|
13.68%
|
||||
|
Total capital to risk-weighted assets
|
15.48%
|
*
|
16.12%
|
17.48%
|
18.61%
|
18.78%
|
|||
|
Tier I capital to risk-weighted assets
|
14.34%
|
*
|
14.96%
|
16.25%
|
17.37%
|
17.53%
|
|||
|
Tier I capital to total average assets
|
11.45%
|
*
|
12.18%
|
12.92%
|
13.84%
|
13.88%
|
|||
|
Total equity to total average assets
|
11.28%
|
11.88%
|
12.59%
|
13.56%
|
13.56%
|
||||
|
* Estimated
|
|||||||||
|
Loans and Allowance for Loan Losses:
|
|||||||||
|
Real estate
|
|||||||||
|
Residential
|
$ 693,046
|
$ 674,804
|
$ 625,345
|
$ 619,741
|
$ 620,991
|
||||
|
Commercial
|
633,764
|
585,628
|
533,072
|
504,722
|
473,788
|
||||
|
Construction
|
78,191
|
90,033
|
80,198
|
66,508
|
64,362
|
||||
|
Installment
|
4,516
|
4,671
|
5,384
|
5,949
|
6,719
|
||||
|
Commercial
|
252,032
|
213,103
|
199,328
|
200,610
|
192,210
|
||||
|
Collateral
|
1,600
|
1,819
|
1,801
|
1,945
|
2,086
|
||||
|
Home equity line of credit
|
151,606
|
147,026
|
144,548
|
143,992
|
142,543
|
||||
|
Demand
|
85
|
-
|
-
|
-
|
25
|
||||
|
Revolving credit
|
94
|
78
|
62
|
73
|
65
|
||||
|
Resort
|
1,374
|
9,849
|
12,425
|
15,252
|
31,232
|
||||
|
Total loans
|
1,816,308
|
1,727,011
|
1,602,163
|
1,558,792
|
1,534,021
|
||||
|
Less:
|
|||||||||
|
Allowance for loan losses
|
(18,314)
|
(17,678)
|
(17,505)
|
(17,332)
|
(17,229)
|
||||
|
Net deferred loan costs
|
2,993
|
3,174
|
3,422
|
3,227
|
3,378
|
||||
|
Loans, net
|
$ 1,800,987
|
$ 1,712,507
|
$ 1,588,080
|
$ 1,544,687
|
$ 1,520,170
|
||||
|
Deposits:
|
|||||||||
|
Noninterest-bearing demand deposits
|
$ 308,459
|
$ 278,275
|
$ 275,781
|
$ 245,912
|
$ 247,586
|
||||
|
Interest-bearing
|
|||||||||
|
NOW accounts
|
285,392
|
339,350
|
280,462
|
234,450
|
227,205
|
||||
|
Money market
|
387,225
|
386,682
|
349,621
|
352,759
|
317,030
|
||||
|
Savings accounts
|
193,937
|
187,040
|
191,688
|
186,171
|
179,290
|
||||
|
Time deposits
|
338,488
|
359,280
|
354,767
|
356,800
|
359,344
|
||||
|
Total interest-bearing deposits
|
1,205,042
|
1,272,352
|
1,176,538
|
1,130,180
|
1,082,869
|
||||
|
Total deposits
|
$ 1,513,501
|
$ 1,550,627
|
$ 1,452,319
|
$ 1,376,092
|
$ 1,330,455
|
||||
First Connecticut Bancorp, Inc.
Consolidated Statements of Condition
|
December 31,
|
September 30,
|
December 31,
|
||||||||||
|
(Dollars in thousands)
|
2013
|
2013
|
2012
|
|||||||||
|
Assets
|
||||||||||||
|
Cash and cash equivalents
|
$ 38,799
|
$ 50,323
|
$ 50,641
|
|||||||||
|
Securities held-to-maturity, at amortized cost
|
12,983
|
3,002
|
3,006
|
|||||||||
|
Securities available-for-sale, at fair value
|
150,886
|
120,382
|
138,241
|
|||||||||
|
Loans held for sale
|
3,186
|
5,357
|
9,626
|
|||||||||
|
Loans, net
|
1,800,987
|
1,712,507
|
1,520,170
|
|||||||||
|
Premises and equipment, net
|
20,619
|
21,013
|
19,967
|
|||||||||
|
Federal Home Loan Bank of Boston stock, at cost
|
13,136
|
8,383
|
8,939
|
|||||||||
|
Accrued income receivable
|
4,917
|
4,579
|
4,415
|
|||||||||
|
Bank-owned life insurance
|
38,556
|
38,255
|
37,449
|
|||||||||
|
Deferred income taxes
|
15,157
|
16,095
|
15,682
|
|||||||||
|
Prepaid expenses and other assets
|
10,490
|
12,305
|
14,810
|
|||||||||
|
Total assets
|
$ 2,109,716
|
$ 1,992,201
|
$ 1,822,946
|
|||||||||
|
Liabilities and Stockholders' Equity
|
||||||||||||
|
Deposits
|
||||||||||||
|
Interest-bearing
|
$ 1,205,042
|
$ 1,272,352
|
$ 1,082,869
|
|||||||||
|
Noninterest-bearing
|
308,459
|
278,275
|
247,586
|
|||||||||
|
1,513,501
|
1,550,627
|
1,330,455
|
||||||||||
|
Federal Home Loan Bank of Boston advances
|
259,000
|
104,000
|
128,000
|
|||||||||
|
Repurchase agreement borrowings
|
21,000
|
21,000
|
21,000
|
|||||||||
|
Repurchase liabilities
|
50,816
|
50,432
|
54,187
|
|||||||||
|
Accrued expenses and other liabilities
|
33,602
|
38,606
|
47,782
|
|||||||||
|
Total liabilities
|
1,877,919
|
1,764,665
|
1,581,424
|
|||||||||
|
Commitments and contingencies
|
-
|
-
|
-
|
|||||||||
|
Stockholders' Equity
|
||||||||||||
|
Common stock
|
181
|
181
|
181
|
|||||||||
|
Additional paid-in-capital
|
175,612
|
174,817
|
172,247
|
|||||||||
|
Unallocated common stock held by ESOP
|
(13,747)
|
(14,014)
|
(14,806)
|
|||||||||
|
Treasury stock, at cost
|
(22,599)
|
(23,053)
|
(4,860)
|
|||||||||
|
Retained earnings
|
96,592
|
95,873
|
94,890
|
|||||||||
|
Accumulated other comprehensive loss
|
(4,242)
|
(6,268)
|
(6,130)
|
|||||||||
|
Total stockholders' equity
|
231,797
|
227,536
|
241,522
|
|||||||||
|
Total liabilities and stockholders' equity
|
$ 2,109,716
|
$ 1,992,201
|
$ 1,822,946
|
|||||||||
First Connecticut Bancorp, Inc.
Consolidated Statements of Income
|
Three Months Ended
|
For the Years Ended
|
||||||||||||||
|
December 31,
|
September 30,
|
December 31,
|
December 31,
|
||||||||||||
|
(Dollars in thousands, except per share data)
|
2013
|
2013
|
2012
|
2013
|
2012
|
||||||||||
|
Interest income
|
|||||||||||||||
|
Interest and fees on loans
|
|||||||||||||||
|
Mortgage
|
$ 13,007
|
$ 12,381
|
$ 12,415
|
$ 48,728
|
$ 45,867
|
||||||||||
|
Other
|
3,437
|
3,199
|
3,770
|
13,183
|
15,445
|
||||||||||
|
Interest and dividends on investments
|
|||||||||||||||
|
United States Government and agency obligations
|
134
|
103
|
190
|
478
|
939
|
||||||||||
|
Other bonds
|
53
|
59
|
61
|
230
|
266
|
||||||||||
|
Corporate stocks
|
64
|
62
|
66
|
252
|
275
|
||||||||||
|
Other interest income
|
2
|
2
|
5
|
15
|
68
|
||||||||||
|
Total interest income
|
16,697
|
15,806
|
16,507
|
62,886
|
62,860
|
||||||||||
|
Interest expense
|
|||||||||||||||
|
Deposits
|
1,845
|
1,914
|
1,649
|
7,291
|
6,691
|
||||||||||
|
Interest on borrowed funds
|
398
|
383
|
511
|
1,651
|
1,953
|
||||||||||
|
Interest on repo borrowings
|
181
|
181
|
187
|
713
|
727
|
||||||||||
|
Interest on repurchase liabilities
|
51
|
45
|
68
|
187
|
257
|
||||||||||
|
Total interest expense
|
2,475
|
2,523
|
2,415
|
9,842
|
9,628
|
||||||||||
|
Net interest income
|
14,222
|
13,283
|
14,092
|
53,044
|
53,232
|
||||||||||
|
Provision for allowance for loan losses
|
660
|
215
|
315
|
1,530
|
1,380
|
||||||||||
|
Net interest income
|
|||||||||||||||
|
after provision for loan losses
|
13,562
|
13,068
|
13,777
|
51,514
|
51,852
|
||||||||||
|
Noninterest income
|
|||||||||||||||
|
Fees for customer services
|
1,250
|
1,230
|
1,048
|
4,559
|
3,714
|
||||||||||
|
Net gain on sales of investments
|
-
|
304
|
-
|
340
|
-
|
||||||||||
|
Net gain on loans sold
|
581
|
625
|
1,935
|
4,825
|
3,151
|
||||||||||
|
Brokerage and insurance fee income
|
40
|
37
|
32
|
150
|
123
|
||||||||||
|
Bank owned life insurance income
|
301
|
303
|
571
|
1,316
|
1,537
|
||||||||||
|
Other
|
3
|
(264)
|
468
|
(268)
|
965
|
||||||||||
|
Total noninterest income
|
2,175
|
2,235
|
4,054
|
10,922
|
9,490
|
||||||||||
|
Noninterest expense
|
|||||||||||||||
|
Salaries and employee benefits
|
8,678
|
8,571
|
7,542
|
34,838
|
32,828
|
||||||||||
|
Occupancy expense
|
1,181
|
1,175
|
1,095
|
4,722
|
4,491
|
||||||||||
|
Furniture and equipment expense
|
964
|
998
|
1,050
|
4,079
|
4,381
|
||||||||||
|
FDIC assessment
|
329
|
341
|
342
|
1,272
|
1,170
|
||||||||||
|
Marketing
|
368
|
423
|
587
|
1,995
|
2,455
|
||||||||||
|
Other operating expenses
|
2,865
|
2,602
|
2,795
|
10,843
|
10,753
|
||||||||||
|
Total noninterest expense
|
14,385
|
14,110
|
13,411
|
57,749
|
56,078
|
||||||||||
|
Income before income taxes
|
1,352
|
1,193
|
4,420
|
4,687
|
5,264
|
||||||||||
|
Provision for income taxes
|
288
|
292
|
1,250
|
1,107
|
1,341
|
||||||||||
|
Net income
|
$ 1,064
|
$ 901
|
$ 3,170
|
$ 3,580
|
$ 3,923
|
||||||||||
|
Earnings per share:
|
|||||||||||||||
|
Basic
|
$ 0.07
|
$ 0.06
|
$ 0.19
|
$ 0.23
|
$ 0.24
|
||||||||||
|
Diluted
|
0.07
|
0.06
|
0.19
|
0.23
|
0.24
|
||||||||||
|
Weighted average shares outstanding:
|
|||||||||||||||
|
Basic
|
15,281,296
|
15,445,082
|
16,632,586
|
15,744,574
|
16,643,566
|
||||||||||
|
Diluted
|
15,347,912
|
15,445,082
|
16,632,586
|
15,761,365
|
16,643,566
|
||||||||||
First Connecticut Bancorp, Inc.
Consolidated Average Balances, Yields and Rates (Unaudited)
|
For The Three Months Ended
|
|||||||||||
|
December 31, 2013
|
September 30, 2013
|
December 31, 2012
|
|||||||||
|
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
|
$ 1,767,468
|
$ 16,444
|
3.69%
|
$ 1,648,948
|
$ 15,580
|
3.75%
|
$1,504,834
|
$ 16,185
|
4.28%
|
||
|
Securities
|
148,653
|
243
|
0.65%
|
131,602
|
216
|
0.65%
|
139,396
|
308
|
0.88%
|
||
|
Federal Home Loan Bank of Boston stock
|
10,338
|
8
|
0.31%
|
8,383
|
8
|
0.38%
|
8,670
|
9
|
0.41%
|
||
|
Federal funds and other earning assets
|
5,093
|
2
|
0.16%
|
3,288
|
2
|
0.24%
|
10,598
|
5
|
0.19%
|
||
|
Total interest-earning assets
|
1,931,552
|
16,697
|
3.43%
|
1,792,221
|
15,806
|
3.50%
|
1,663,498
|
16,507
|
3.95%
|
||
|
Noninterest-earning assets
|
123,577
|
122,566
|
118,273
|
||||||||
|
Total assets
|
$ 2,055,129
|
$ 1,914,787
|
$1,781,771
|
||||||||
|
Interest-bearing liabilities:
|
|||||||||||
|
NOW accounts
|
$ 305,045
|
$ 172
|
0.22%
|
$ 303,882
|
$ 180
|
0.24%
|
$ 215,266
|
$ 117
|
0.22%
|
||
|
Money market
|
388,503
|
773
|
0.79%
|
371,614
|
794
|
0.85%
|
299,408
|
487
|
0.65%
|
||
|
Savings accounts
|
190,258
|
78
|
0.16%
|
185,732
|
79
|
0.17%
|
178,959
|
99
|
0.22%
|
||
|
Certificates of deposit
|
346,977
|
822
|
0.94%
|
356,994
|
861
|
0.96%
|
358,047
|
946
|
1.05%
|
||
|
Total interest-bearing deposits
|
1,230,783
|
1,845
|
0.59%
|
1,218,222
|
1,914
|
0.62%
|
1,051,680
|
1,649
|
0.62%
|
||
|
Advances from the Federal Home Loan Bank
|
170,000
|
398
|
0.93%
|
74,101
|
383
|
2.05%
|
118,339
|
511
|
1.72%
|
||
|
Repurchase agreement borrowings
|
21,000
|
181
|
3.42%
|
21,000
|
181
|
3.42%
|
21,000
|
187
|
3.54%
|
||
|
Repurchase liabilities
|
68,122
|
51
|
0.30%
|
57,187
|
45
|
0.31%
|
71,115
|
68
|
0.38%
|
||
|
Total interest-bearing liabilities
|
1,489,905
|
2,475
|
0.66%
|
1,370,510
|
2,523
|
0.73%
|
1,262,134
|
2,415
|
0.76%
|
||
|
Noninterest-bearing deposits
|
294,071
|
272,621
|
232,286
|
||||||||
|
Other noninterest-bearing liabilities
|
40,557
|
39,810
|
43,663
|
||||||||
|
Total liabilities
|
1,824,533
|
1,682,941
|
1,538,083
|
||||||||
|
Stockholders' equity
|
230,596
|
231,846
|
243,688
|
||||||||
|
Total liabilities and stockholders' equity
|
$ 2,055,129
|
$ 1,914,787
|
$1,781,771
|
||||||||
|
Net interest income
|
$ 14,222
|
$ 13,283
|
$ 14,092
|
||||||||
|
Net interest rate spread (1)
|
2.77%
|
2.77%
|
3.19%
|
||||||||
|
Net interest-earning assets (2)
|
$ 441,647
|
$ 421,711
|
$ 401,364
|
||||||||
|
Net interest margin (3)
|
2.92%
|
2.94%
|
3.37%
|
||||||||
|
Average interest-earning assets
|
|||||||||||
|
to average interest-bearing liabilities
|
129.64%
|
130.77%
|
131.80%
|
||||||||
|
(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 Years Ended December 31,
|
|||||||
|
2013
|
2012
|
||||||
|
Average
Balance
|
Interest and
Dividends
|
Yield
/Cost
|
Average
Balance
|
Interest and
Dividends
|
Yield/
Cost
|
||
|
(Dollars in thousands)
|
|||||||
|
Interest-earning assets:
|
|||||||
|
Loans, net
|
$ 1,629,921
|
$ 61,911
|
3.80%
|
$ 1,410,822
|
$ 61,312
|
4.35%
|
|
|
Securities
|
130,593
|
927
|
0.71%
|
136,062
|
1,443
|
1.06%
|
|
|
Federal Home Loan Bank of Boston stock
|
8,981
|
33
|
0.37%
|
7,714
|
37
|
0.48%
|
|
|
Federal funds and other earning assets
|
8,398
|
15
|
0.18%
|
33,521
|
68
|
0.20%
|
|
|
Total interest-earning assets
|
1,777,893
|
62,886
|
3.54%
|
1,588,119
|
62,860
|
3.96%
|
|
|
Noninterest-earning assets
|
121,981
|
117,449
|
|||||
|
Total assets
|
$ 1,899,874
|
$ 1,705,568
|
|||||
|
Interest-bearing liabilities:
|
|||||||
|
NOW accounts
|
$ 277,698
|
$ 638
|
0.23%
|
$ 208,161
|
$ 389
|
0.19%
|
|
|
Money market
|
362,914
|
2,878
|
0.79%
|
278,179
|
2,017
|
0.73%
|
|
|
Savings accounts
|
182,952
|
315
|
0.17%
|
171,871
|
291
|
0.17%
|
|
|
Certificates of deposit
|
353,677
|
3,460
|
0.98%
|
367,380
|
3,994
|
1.09%
|
|
|
Total interest-bearing deposits
|
1,177,241
|
7,291
|
0.62%
|
1,025,591
|
6,691
|
0.65%
|
|
|
Federal Home Loan Bank of Boston advances
|
98,486
|
1,651
|
1.68%
|
89,419
|
1,953
|
2.18%
|
|
|
Repurchase agreement borrowings
|
21,000
|
713
|
3.40%
|
21,000
|
727
|
3.46%
|
|
|
Repurchase liabilities
|
56,891
|
187
|
0.33%
|
66,436
|
257
|
0.39%
|
|
|
Total interest-bearing liabilities
|
1,353,618
|
9,842
|
0.73%
|
1,202,446
|
9,628
|
0.80%
|
|
|
Noninterest-bearing deposits
|
266,217
|
213,697
|
|||||
|
Other noninterest-bearing liabilities
|
44,577
|
41,223
|
|||||
|
Total liabilities
|
1,664,411
|
1,457,366
|
|||||
|
Stockholders' equity
|
235,463
|
248,202
|
|||||
|
Total liabilities and stockholders' equity
|
$ 1,899,874
|
$ 1,705,568
|
|||||
|
Net interest income
|
$ 53,044
|
$ 53,232
|
|||||
|
Net interest rate spread (1)
|
2.81%
|
3.16%
|
|||||
|
Net interest-earning assets (2)
|
$ 424,275
|
$ 385,673
|
|||||
|
Net interest margin (3)
|
2.98%
|
3.35%
|
|||||
|
Average interest-earning assets to average interest-bearing liabilities
|
|||||||
|
131.34%
|
132.07%
|
||||||
|
(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.
|
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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 December 31, 2013, September 30, 2013, June 30, 2013, March 31, 2013, and December 31, 2012. 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
|
||||||||||
|
December 31,
|
September 30,
|
June 30,
|
March 31,
|
December 31,
|
||||||
|
(Dollars in thousands, except per share data)
|
2013
|
2013
|
2013
|
2013
|
2012
|
|||||
|
Net Income
|
$ 1,064
|
$ 901
|
$ 802
|
$ 813
|
$ 3,170
|
|||||
|
Adjustments:
|
||||||||||
|
Less: Prepayment penalty fees
|
(144)
|
-
|
(20)
|
(127)
|
(771)
|
|||||
|
Less: Net gain on sales of investments
|
-
|
(304)
|
(36)
|
-
|
-
|
|||||
|
Less: Bank-owned life insurance proceeds
|
-
|
-
|
-
|
(108)
|
(249)
|
|||||
|
Less: Pension prior service cost (1)
|
-
|
-
|
-
|
-
|
(1,208)
|
|||||
|
Less: Post retirement service cost (1)
|
-
|
-
|
-
|
-
|
(279)
|
|||||
|
Plus: Accelerated vesting of stock compensation (2)
|
-
|
-
|
-
|
633
|
-
|
|||||
|
Total core adjustments before taxes
|
(144)
|
(304)
|
(56)
|
398
|
(2,507)
|
|||||
|
Tax benefit (provision) - 34% rate
|
49
|
-
|
19
|
(135)
|
852
|
|||||
|
Total core adjustments after taxes
|
(95)
|
(304)
|
(37)
|
263
|
(1,655)
|
|||||
|
Total core net income
|
$ 969
|
$ 597
|
$ 765
|
$ 1,076
|
$ 1,515
|
|||||
|
Total net interest income
|
$ 14,222
|
$ 13,283
|
$ 12,887
|
$ 12,652
|
$ 14,092
|
|||||
|
Less: Prepayment penalty fees
|
(144)
|
-
|
(20)
|
(127)
|
(771)
|
|||||
|
Total core net interest income
|
$ 14,078
|
$ 13,283
|
$ 12,867
|
$ 12,525
|
$ 13,321
|
|||||
|
Total noninterest income
|
$ 2,175
|
$ 2,235
|
$ 2,974
|
$ 3,538
|
$ 4,054
|
|||||
|
Less: Net gain on sales of investments
|
-
|
(304)
|
(36)
|
-
|
-
|
|||||
|
Less: Bank-owned life insurance proceeds
|
-
|
-
|
-
|
(108)
|
(249)
|
|||||
|
Total core noninterest income
|
$ 2,175
|
$ 1,931
|
$ 2,938
|
$ 3,430
|
$ 3,805
|
|||||
|
Total noninterest expense
|
$ 14,385
|
$ 14,110
|
$ 14,555
|
$ 14,699
|
$ 13,411
|
|||||
|
Plus: Pension prior service cost (1)
|
-
|
-
|
-
|
-
|
1,208
|
|||||
|
Plus: Post retirement service cost (1)
|
-
|
-
|
-
|
-
|
279
|
|||||
|
Plus: Loss on sale of non-strategic properties
|
-
|
-
|
-
|
-
|
-
|
|||||
|
Less: Accelerated vesting of stock compensation (2)
|
-
|
-
|
-
|
(633)
|
-
|
|||||
|
Total core noninterest expense
|
$ 14,385
|
$ 14,110
|
$ 14,555
|
$ 14,066
|
$ 14,898
|
|||||
|
Core earnings per common share, diluted
|
$ 0.06
|
$ 0.05
|
$ 0.05
|
$ 0.07
|
$ 0.09
|
|||||
|
Core return on assets (annualized)
|
0.19%
|
0.15%
|
0.17%
|
0.24%
|
0.34%
|
|||||
|
Core return on equity (annualized)
|
1.68%
|
1.21%
|
1.30%
|
1.76%
|
2.45%
|
|||||
|
Efficiency ratio (3)
|
88.51%
|
92.74%
|
92.09%
|
88.16%
|
86.99%
|
|||||
|
Tangible book value (4)
|
$ 14.08
|
$ 13.86
|
$ 13.79
|
$ 13.76
|
$ 13.63
|
|||||
|
(1) Represents recognizing the unrecognized prior service cost as a result of the freeze of the Company's non-contributory defined benefit and other post-retirement plans.
|
||||||||||
|
(2) Represents the passing of a key executive in the first quarter of 2013 and 20% vesting of the 2012 Stock Incentive Plan in the third quarter of 2012.
|
||||||||||
|
(3) Represents noninterest expense divided by the sum of net interest income and noninterest income, adjusted for non-recurring items.
|
||||||||||
|
(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.
|
||||||||||