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First Connecticut Bancorp, Inc. Announces Third Quarter 2013 Results

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FARMINGTON, Conn., Oct. 24, 2013 (GLOBE NEWSWIRE) -- First Connecticut Bancorp, Inc. (the "Company") (Nasdaq:FBNK), the holding company for Farmington Bank (the "Bank"), reported net income of $901,000 or $0.06 per diluted share for the quarter ended September 30, 2013 compared to a net loss of $1.1 million or ($0.07) per diluted share for the quarter ended September 30, 2012.

"Our Company remains focused on strategic organic growth as evidenced by a $124 million increase in net loans and a $98 million increase in deposits for the third quarter. While margins remain compressed, we are encouraged by the ongoing increase in net interest income and declining operating expenses. As a result of our growth, tangible book value increased $0.39 per share year over year," stated John J. Patrick Jr., First Connecticut Bancorp's Chairman, President & CEO.

"During the quarter we opened our 21st branch office in East Hartford, CT and have recently applied for regulatory approval to open our 22nd branch office in Rocky Hill, CT in the first quarter 2014."

Financial Highlights

  • Strong organic loan originations totaled approximately $199.0 million during the quarter resulting in a $124.4 million increase in total net loans. Loan growth was primarily driven by increases in Commercial Real Estate totaling $52.6 million and $49.5 million in Residential Real Estate.
  • Net interest income increased $396,000 to $13.3 million in the third quarter of 2013 compared to $12.9 million in the linked quarter.
  • Net gain on residential loans sold was $625,000 for the third quarter of 2013 based on $22.9 million in loans sold compared to a net gain of $1.6 million on $62.7 million in loans sold during the linked quarter.
  • Noninterest expense decreased $445,000 in the third quarter of 2013 compared to the linked quarter.
  • Overall deposits increased $98.3 million or 7% in the third quarter of 2013 compared to the linked quarter.
  • Checking accounts grew by 2.9% or 1,102 net new accounts in the third quarter of 2013.
  • Asset quality continued to improve as non-accrual loans represented 0.80% of total loans compared to 0.89% of total loans on a linked quarter basis. Net charge-offs totaled $42,000 for the quarter ended September 30, 2013 compared to $83,000 for the quarter ended June 30, 2013, a decrease of $41,000.
  • Tangible book value grew to $13.86 compared to $13.79 on a linked quarter basis and $13.47 at the quarter ended September 30, 2012.
  • During the third quarter of 2013, we repurchased 317,885 shares of common stock at an average price per share of $14.25 at a total cost of $4.5 million. 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 September 16, 2013. This marks the eighth consecutive quarter we have paid a dividend since First Connecticut Bancorp, Inc. became a public company on June 29, 2011.

Third quarter 2013 compared with second quarter 2013

Net interest income

  • Net interest income increased $396,000 to $13.3 million in the third quarter of 2013 compared to the linked quarter due primarily to new loans originated during the second and third quarters.
  • Yield on average interest earning assets decreased 9 basis points from the linked quarter to 3.50% for the quarter ended September 30, 2013. Net interest margin decreased 7 basis points to 2.94% in the third quarter of 2013 compared to the linked quarter.
  • The cost of interest-bearing deposits remained relatively stable at 62 basis points compared to 63 basis points on a linked quarter basis.

Provision for loan losses

  • Provision for loan losses was $215,000 for the third quarter of 2013 compared to $256,000 for the linked quarter and net charge-offs in the quarter were $42,000 or 0.01% to average loans (annualized) compared to $83,000 or 0.02% to average loans (annualized) in the linked quarter.

Noninterest income

  • Total noninterest income decreased $739,000 to $2.2 million for the third quarter of 2013 compared to the linked quarter primarily due to a $964,000 decrease in net gain on loans sold and a decrease of $172,000 in other income offset by an increase in fees for customer services of $133,000 and an increase in gain on sale of an investment of $268,000 compared to the linked quarter.

Noninterest expense

  • Noninterest expense decreased $445,000 to $14.1 million in the third quarter of 2013 compared to the linked quarter as a result of decreases in marketing and other operating expenses.
  • Marketing expense decreased $187,000 or 31% compared to the linked quarter primarily due to general expense control initiatives.
  • Other operating expenses decreased $252,000 or 9%, primarily due to the recognition of an $84,000 loss on the sale of an OREO property and system conversion costs incurred in the linked quarter.

Third quarter 2013 compared with third quarter 2012

Net interest income

  • Net interest income decreased slightly to $13.3 million compared to $13.4 million in the third quarter of 2012.
  • Net interest margin decreased 34 basis points in the third quarter of 2013 compared to 3.28% in the third quarter of 2012 primarily due to a lower interest rate environment and a $39.9 million decline in the resort loan portfolio. Excluding resort income for both periods, the net interest margin decreased 25 basis points.
  • The cost of interest-bearing deposits declined slightly to 62 basis points compared to 64 basis points on a quarter over quarter basis.

Provision for loan losses

  • Provision for loan losses was $215,000 for both quarters.
  • Net charge-offs for the quarter were $42,000 or 0.01% to average loans (annualized) compared to $222,000 or 0.06% to average loans (annualized) in the third quarter of 2012.

Noninterest income

  • Total noninterest income increased $90,000 to $2.2 million compared to the third quarter of 2012 primarily due to increases in fees for customer service of $280,000 and gain on sale of investments of $304,000, partially offset with decreases in net gains on loans sold and other income of $62,000 and $412,000, respectively.
  • Other income decreased $412,000 primarily due to a decrease of $331,000 in mortgage banking derivatives and an increase of $95,000 in amortization of mortgage servicing rights.

Noninterest expense

  • Noninterest expense decreased $2.8 million to $14.1 million in the third quarter of 2013 compared to the third quarter of 2012 primarily due to recognizing $3.0 million in stock compensation expense during the third quarter of 2012 related to the implementation of the 2012 Stock Incentive Plan (the "Plan").
  • Salaries and employee benefits, excluding stock compensation expense related to the Plan remained relatively flat between the two quarters.
  • Other operating expenses decreased $1.1 million compared to the third quarter of 2012 primarily due to both the initial vesting of directors' stock compensation expense related to the Plan and a $394,000 loss on the sale of non-strategic properties in the third quarter of 2012.

Income tax provision

  • Income taxes increased $811,000 to a tax expense of $292,000 in the third quarter of 2013 compared to a tax benefit of $519,000 in the third quarter of 2012.

September 30, 2013 compared to June 30, 2013

Financial condition

  • Total assets increased $147.1 million or 8% at September 30, 2013 to $2.0 billion compared to June 30, 2013 largely reflecting an increase in loans.
  • Our investment portfolio totaled $123.4 million at September 30, 2013 compared to $115.8 million at June 30, 2013, an increase of $7.6 million.
  • Net loans increased $124.4 million at September 30, 2013 to $1.7 billion compared to June 30, 2013 due to our continued focus on commercial and residential lending which, combined, increased $128.1 million, offset by a $2.6 million decrease in resort loans as we continue our planned exit of the resort financing market.
  • Deposits increased $98.3 million at September 30, 2013 compared to June 30, 2013, due to an increase in municipal and customer deposits as we continue to develop and grow relationships in the geographical areas we serve.
  • Federal Home Loan Bank of Boston advances increased $52.8 million to $104.0 million, primarily due to an increase in overnight borrowings at September 30, 2013 compared to June 30, 2013.
  • Stockholders' equity decreased $3.6 million to $227.5 million at September 30, 2013 compared to June 30, 2013 primarily due to the $4.5 million repurchase of 317,885 shares of common stock at an average stock price of $14.25.

Asset Quality

  • Non-accrual loans decreased $438,000 to $13.9 million or 0.80% of total loans at September 30, 2013 compared to $14.3 million or 0.89% of total loans at June 30, 2013.
  • At September 30, 2013, the allowance for loan losses represented 1.02% of total loans and 127.30% of non-accrual loans, compared to 1.09% of total loans and 122.20% of non-accrual loans at June 30, 2013.
  • Loan delinquencies 30 days and greater decreased slightly to 0.87% of total loans at September 30, 2013 compared to 0.95% of total loans at June 30, 2013.

Capital and Liquidity

  • The Company remained well-capitalized with an estimated total capital to risk-weighted asset ratio of 16.12% at September 30, 2013.
  • Tangible book value was $13.86 compared to $13.79 on a linked quarter basis and $13.47 from a year ago.
  • At September 30, 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 21 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 results presented in accordance with GAAP, this press release contains certain non-GAAP financial measures. A reconciliation of net income and other performance ratios, as adjusted, is included in the accompanying reconciliation of Non-GAAP 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. We utilize these measures for internal planning and forecasting purposes. These non-GAAP 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) 2013 2013 2013 2012 2012
Selected Financial Condition Data:
Total assets $ 1,992,201 $ 1,845,116 $ 1,799,392 $ 1,822,946 $ 1,756,133
Cash and cash equivalents 50,323 36,650 34,946 50,641 33,021
Held to maturity securities 3,002 3,003 3,003 3,006 3,007
Available for sale securities 120,382 112,801 108,787 138,241 125,614
Federal Home Loan Bank of Boston stock, at cost 8,383 8,383 8,383 8,939 8,056
Loans receivable, net 1,712,507 1,588,080 1,544,687 1,520,170 1,485,275
Deposits 1,550,627 1,452,319 1,376,092 1,330,455 1,257,987
Federal Home Loan Bank of Boston advances 104,000 51,250 76,000 128,000 125,200
Total stockholders' equity 227,536 231,180 242,869 241,522 242,199
Allowance for loan losses 17,678 17,505 17,332 17,229 17,920
Non-accrual loans 13,887 14,325 13,911 13,782 13,240
Impaired loans 42,587 39,159 39,210 36,857 37,863
Selected Operating Data:
Interest income $ 15,806 $ 15,336 $ 15,047 $ 16,507 $ 15,780
Interest expense 2,523 2,449 2,395 2,415 2,393
Net Interest Income 13,283 12,887 12,652 14,092 13,387
Provision for allowance for loan losses 215 256 399 315 215
Net interest income after provision for loan losses 13,068 12,631 12,253 13,777 13,172
Noninterest income 2,235 2,974 3,538 4,054 2,145
Noninterest expense 14,110 14,555 14,699 13,411 16,905
Income (loss) before income taxes 1,193 1,050 1,092 4,420 (1,588)
Provision (benefit) for income taxes 292 248 279 1,250 (519)
Net income (loss) $ 901 $ 802 $ 813 $ 3,170 $ (1,069)
Performance Ratios (annualized):
Return on average assets 0.19% 0.17% 0.18% 0.77% -0.25%
Return average equity 1.55% 1.36% 1.33% 5.62% -1.74%
Interest rate spread (1) 2.77% 2.83% 2.89% 3.19% 3.09%
Net interest rate margin (2) 2.94% 3.01% 3.07% 3.37% 3.28%
Non-interest expense to average assets 2.95% 3.17% 3.28% 3.01% 3.89%
Efficiency ratio (3) 90.93% 91.77% 90.79% 73.91% 108.84%
Average interest-earning assets to average interest-bearing liabilities 130.77% 132.30% 132.04% 131.80% 131.75%
Asset Quality Ratios:
Allowance for loan losses as a percent of total loans 1.02% 1.09% 1.11% 1.12% 1.19%
Allowance for loan losses as a percent of non-accrual loans 127.30% 122.20% 124.59% 125.01% 135.35%
Net charge-offs to average loans (annualized) 0.01% 0.02% 0.08% 0.27% 0.06%
Non-accrual loans as a percent of total loans 0.80% 0.89% 0.89% 0.90% 0.88%
Non-accrual loans as a percent of total assets 0.70% 0.78% 0.77% 0.76% 0.75%
Per Share Related Data:
Basic earnings (loss) per share $ 0.06 $ 0.05 $ 0.05 $ 0.19 $ (0.07)
Diluted earnings (loss) per share $ 0.06 $ 0.05 $ 0.05 $ 0.19 $ (0.07)
Dividends declared per share $ 0.03 $ 0.03 $ 0.03 $ 0.03 $ 0.03
Tangible book value $ 13.86 $ 13.79 $ 13.76 $ 13.63 $ 13.47
Common stock shares outstanding 16,416,427 16,763,516 17,644,449 17,714,481 17,986,596
(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.
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) 2013 2013 2013 2012 2012
Capital Ratios:
Equity to total assets at end of period 11.42% 12.53% 13.50% 13.25% 13.79%
Average equity to average assets 12.11% 12.83% 13.62% 13.68% 14.19%
Total capital to risk-weighted assets 16.12%* 17.48% 18.61% 18.78% 19.15%
Tier I capital to risk-weighted assets 14.96%* 16.25% 17.37% 17.53% 17.90%
Tier I capital to total average assets 12.19%* 12.92% 13.84% 13.88% 14.24%
Total equity to total average assets 11.88% 12.59% 13.56% 13.56% 13.95%
* Estimated
Loans and Allowance for Loan Losses:
Real estate
Residential $ 674,804 $ 625,345 $ 619,741 $ 620,991 $ 605,794
Commercial 585,628 533,072 504,722 473,788 448,684
Construction 90,033 80,198 66,508 64,362 54,909
Installment 4,671 5,384 5,949 6,719 7,372
Commercial 213,103 199,328 200,610 192,210 196,813
Collateral 1,819 1,801 1,945 2,086 2,161
Home equity line of credit 147,026 144,548 143,992 142,543 134,314
Demand -- -- -- 25 25
Revolving credit 78 62 73 65 86
Resort 9,849 12,425 15,252 31,232 49,760
Total loans 1,727,011 1,602,163 1,558,792 1,534,021 1,499,918
Less:
Allowance for loan losses (17,678) (17,505) (17,332) (17,229) (17,920)
Net deferred loan costs 3,174 3,422 3,227 3,378 3,277
Loans, net $ 1,712,507 $ 1,588,080 $ 1,544,687 $ 1,520,170 $ 1,485,275
Deposits:
Noninterest-bearing demand deposits $ 278,275 $ 275,781 $ 245,912 $ 247,586 $ 221,464
Interest-bearing
NOW accounts 339,350 280,462 234,450 227,205 220,490
Money market 386,682 349,621 352,759 317,030 285,540
Savings accounts 187,040 191,688 186,171 179,290 171,516
Time deposits 359,280 354,767 356,800 359,344 358,977
Total interest-bearing deposits 1,272,352 1,176,538 1,130,180 1,082,869 1,036,523
Total deposits $ 1,550,627 $ 1,452,319 $ 1,376,092 $ 1,330,455 $ 1,257,987
First Connecticut Bancorp, Inc.
Consolidated Statements of Condition
September 30, June 30, December 31,
(Dollars in thousands) 2013 2013 2012
Assets
Cash and cash equivalents $ 50,323 $ 36,650 $ 50,641
Securities held-to-maturity, at amortized cost 3,002 3,003 3,006
Securities available-for-sale, at fair value 120,382 112,801 138,241
Loans held for sale 5,357 4,801 9,626
Loans, net 1,712,507 1,588,080 1,520,170
Premises and equipment, net 21,013 20,767 19,967
Federal Home Loan Bank of Boston stock, at cost 8,383 8,383 8,939
Accrued income receivable 4,579 4,403 4,415
Bank-owned life insurance 38,255 37,952 37,449
Deferred income taxes 16,095 15,918 15,682
Prepaid expenses and other assets 12,305 12,358 14,810
Total assets $ 1,992,201 $ 1,845,116 $ 1,822,946
Liabilities and Stockholders' Equity
Deposits
Interest-bearing $ 1,272,352 $ 1,176,538 $ 1,082,869
Noninterest-bearing 278,275 275,781 247,586
1,550,627 1,452,319 1,330,455
Federal Home Loan Bank of Boston advances 104,000 51,250 128,000
Repurchase agreement borrowings 21,000 21,000 21,000
Repurchase liabilities 50,432 50,262 54,187
Accrued expenses and other liabilities 38,606 39,105 47,782
Total liabilities 1,764,665 1,613,936 1,581,424
Commitments and contingencies -- -- --
Stockholders' Equity
Common stock 181 181 181
Additional paid-in-capital 174,817 174,342 172,247
Unallocated common stock held by ESOP (14,014) (14,281) (14,806)
Treasury stock, at cost (23,053) (18,524) (4,860)
Retained earnings 95,873 95,470 94,890
Accumulated other comprehensive loss (6,268) (6,008) (6,130)
Total stockholders' equity 227,536 231,180 241,522
Total liabilities and stockholders' equity $ 1,992,201 $ 1,845,116 $ 1,822,946
First Connecticut Bancorp, Inc.
Consolidated Statements of Income
Three Months Ended Nine Months Ended
September 30, June 30, September 30, September 30,
(Dollars in thousands, except per share data) 2013 2013 2012 2013 2012
Interest income
Interest and fees on loans
Mortgage $ 12,381 $ 11,872 $ 11,460 $ 35,721 $ 33,452
Other 3,199 3,233 3,927 9,746 11,675
Interest and dividends on investments
United States Government and agency obligations 103 102 234 344 749
Other bonds 59 59 87 177 205
Corporate stocks 62 64 69 188 209
Other interest income 2 6 3 13 63
Total interest income 15,806 15,336 15,780 46,189 46,353
Interest expense
Deposits 1,914 1,827 1,644 5,446 5,042
Interest on borrowed funds 383 401 499 1,253 1,442
Interest on repo borrowings 181 180 179 532 540
Interest on repurchase liabilities 45 41 71 136 189
Total interest expense 2,523 2,449 2,393 7,367 7,213
Net interest income 13,283 12,887 13,387 38,822 39,140
Provision for allowance for loan losses 215 256 215 870 1,065
Net interest income after provision for loan losses 13,068 12,631 13,172 37,952 38,075
Noninterest income
Fees for customer services 1,230 1,097 950 3,309 2,666
Net gain on sales of investments 304 36 -- 340 --
Net gain on loans sold 625 1,589 687 4,244 1,216
Brokerage and insurance fee income 37 41 34 110 91
Bank owned life insurance income 303 303 326 1,015 966
Other (264) (92) 148 (271) 497
Total noninterest income 2,235 2,974 2,145 8,747 5,436
Noninterest expense
Salaries and employee benefits 8,571 8,555 10,243 26,160 25,286
Occupancy expense 1,175 1,126 1,108 3,541 3,396
Furniture and equipment expense 998 1,099 1,120 3,115 3,331
FDIC assessment 341 311 255 943 828
Marketing 423 610 509 1,627 1,868
Other operating expenses 2,602 2,854 3,670 7,978 7,958
Total noninterest expense 14,110 14,555 16,905 43,364 42,667
Income before income taxes 1,193 1,050 (1,588) 3,335 844
Provision for income taxes 292 248 (519) 819 91
Net income $ 901 $ 802 $ (1,069) $ 2,516 $ 753
Earnings per share:
Basic and Diluted $ 0.06 $ 0.05 $ (0.07) $ 0.16 $ 0.05
Weighted average shares outstanding:
Basic and Diluted 15,445,082 15,774,385 16,471,023 15,894,357 16,647,253
First Connecticut Bancorp, Inc.
Consolidated Average Balances, Yields and Rates (Unaudited)
For The Three Months Ended
September 30, 2013 June 30, 2013 September 30, 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 $ 1,648,948 $ 15,580 3.75% $ 1,577,559 $ 15,105 3.84% $1,460,686 $ 15,387 4.18%
Securities 131,602 216 0.65% 115,280 216 0.75% 141,367 380 1.07%
Federal Home Loan Bank of Boston stock 8,383 8 0.38% 8,383 9 0.43% 7,671 10 0.52%
Federal funds and other earning assets 3,288 2 0.24% 14,317 6 0.17% 10,317 3 0.12%
Total interest-earning assets 1,792,221 15,806 3.50% 1,715,539 15,336 3.59% 1,620,041 15,780 3.86%
Noninterest-earning assets 122,566 120,622 116,100
Total assets $ 1,914,787 $ 1,836,161 $1,736,141
Interest-bearing liabilities:
NOW accounts $ 303,882 $ 180 0.24% $ 266,905 $ 151 0.23% $ 207,763 $ 100 0.19%
Money market 371,614 794 0.85% 354,914 725 0.82% 280,572 498 0.70%
Savings accounts 185,732 79 0.17% 184,307 73 0.16% 172,494 67 0.15%
Certificates of deposit 356,994 861 0.96% 354,381 878 0.99% 361,648 979 1.07%
Total interest-bearing deposits 1,218,222 1,914 0.62% 1,160,507 1,827 0.63% 1,022,477 1,644 0.64%
Advances from the Federal Home Loan Bank 74,101 383 2.05% 68,660 401 2.34% 112,850 499 1.75%
Repurchase agreement borrowings 21,000 181 3.42% 21,000 180 3.44% 21,000 179 3.38%
Repurchase liabilities 57,187 45 0.31% 46,539 41 0.35% 73,268 71 0.38%
Total interest-bearing liabilities 1,370,510 2,523 0.73% 1,296,706 2,449 0.76% 1,229,595 2,393 0.77%
Noninterest-bearing deposits 272,621 257,670 216,205
Other noninterest-bearing liabilities 39,810 46,291 43,965
Total liabilities 1,682,941 1,600,667 1,489,765
Stockholders' equity 231,846 235,494 246,376
Total liabilities and stockholders' equity $ 1,914,787 $ 1,836,161 $1,736,141
Net interest income $ 13,283 $ 12,887 $ 13,387
Net interest rate spread (1) 2.77% 2.83% 3.09%
Net interest-earning assets (2) $ 421,711 $ 418,833 $ 390,446
Net interest margin (3) 2.94% 3.01% 3.28%
Average interest-earning assets to average interest-bearing liabilities 130.77% 132.30% 131.75%
(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,
2013 2012
Average
Balance
Interest and
Dividends

Yield/Cost
Average
Balance
Interest and
Dividends

Yield/Cost
(Dollars in thousands)
Interest-earning assets:
Loans, net $ 1,583,569 $ 45,467 3.84% $ 1,379,256 $ 45,127 4.36%
Securities 124,507 684 0.73% 134,943 1,135 1.12%
Federal Home Loan Bank of Boston stock 8,524 25 0.39% 7,393 28 0.50%
Federal funds and other earning assets 9,513 13 0.18% 41,579 63 0.20%
Total interest-earning assets 1,726,113 46,189 3.58% 1,563,171 46,353 3.95%
Noninterest-earning assets 121,440 116,811
Total assets $ 1,847,553 $ 1,679,982
Interest-bearing liabilities:
NOW accounts $ 268,482 $ 466 0.23% $ 205,776 272 0.18%
Money market 354,291 2,105 0.79% 271,051 1,530 0.75%
Savings accounts 180,490 237 0.18% 169,491 192 0.15%
Certificates of deposit 355,934 2,638 0.99% 370,514 3,048 1.10%
Total interest-bearing deposits 1,159,197 5,446 0.63% 1,016,832 5,042 0.66%
Federal Home Loan Bank of Boston advances 74,386 1,253 2.25% 79,708 1,442 2.41%
Repurchase agreement borrowings 21,000 532 3.39% 21,000 540 3.43%
Repurchase liabilities 53,106 136 0.34% 64,864 189 0.39%
Total interest-bearing liabilities 1,307,689 7,367 0.75% 1,182,404 7,213 0.81%
Noninterest-bearing deposits 256,830 207,456
Other noninterest-bearing liabilities 45,931 40,404
Total liabilities 1,610,450 1,430,264
Stockholders' equity 237,103 249,718
Total liabilities and stockholders' equity $ 1,847,553 $ 1,679,982
Net interest income $ 38,822 $ 39,140
Net interest rate spread (1) 2.83% 3.14%
Net interest-earning assets (2) $ 418,424 $ 380,767
Net interest margin (3) 3.01% 3.34%
Average interest-earning assets to average interest-bearing liabilities 132.00% 132.20%
(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)
At or for the Three Months Ended
September 30, June 30, March 31, December 31, September 30,
(Dollars in thousands, except per share data) 2013 2013 2013 2012 2012
Net Income (loss) $ 901 $ 802 $ 813 $ 3,170 $ (1,069)
Adjustments:
Less: Prepayment penalty fees -- (20) (127) (771) (11)
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 -- 3,047
Total core adjustments before taxes -- (20) 398 (2,507) 3,036
Tax benefit (provision) - 34% rate -- 7 (135) 852 (1,032)
Total core adjustments after taxes -- (13) 263 (1,655) 2,004
Total core net income (loss) $ 901 $ 789 $ 1,076 $ 1,515 $ 935
Total net interest income $ 13,283 $ 12,887 $ 12,652 $ 14,092 $ 13,387
Less: Prepayment penalty fees -- (20) (127) (771) (11)
Total core net interest income $ 13,283 $ 12,867 $ 12,525 $ 13,321 $ 13,376
Total noninterest income $ 2,235 $ 2,974 $ 3,538 $ 4,054 $ 2,145
Less: Bank-owned life insurance proceeds -- -- (108) (249) --
Total core noninterest income $ 2,235 $ 2,974 $ 3,430 $ 3,805 $ 2,145
Total noninterest expense $ 14,110 $ 14,555 $ 14,699 $ 13,411 $ 16,905
Plus: Pension prior service cost (1) -- -- -- 1,208 --
Plus: Post retirement service cost (1) -- -- -- 279 --
Plus: Loss on sale of non-strategic properties -- -- -- -- 394
Less: Accelerated vesting of stock compensation (2) -- -- (633) -- (3,047)
Total core noninterest expense $ 14,110 $ 14,555 $ 14,066 $ 14,898 $ 14,252
Core earnings per common share, diluted $ 0.06 $ 0.05 $ 0.07 $ 0.09 $ 0.06
Core return on assets (annualized) 0.19% 0.17% 0.24% 0.34% 0.22%
Core return on equity (annualized) 1.55% 1.34% 1.76% 2.45% 1.52%
Efficiency ratio (3) 90.93% 91.88% 88.16% 86.99% 91.82%
(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 core noninterest expense divided by the sum of core net interest income and core noninterest income.

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

Source:First Connecticut Bancorp, Inc.