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Fox Chase Bancorp, Inc. Reports Earnings for the Three Months Ended March 31, 2014

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HATBORO, Pa., April 30, 2014 (GLOBE NEWSWIRE) -- Fox Chase Bancorp, Inc. (the "Company") (Nasdaq:FXCB), the holding company for Fox Chase Bank (the "Bank"), today announced net income of $2.0 million, or $0.17 per diluted share, for the three months ended March 31, 2014, compared to net income of $1.8 million, or $0.16 per diluted share, for the three months ended March 31, 2013 and $1.5 million, or $0.13 per diluted share, for the three months ended December 31, 2013.

Commenting on the performance for the quarter, Thomas M. Petro, President and CEO, said "We are pleased to report earnings of $2.0 million for the first quarter of 2014. Return on assets increased to 0.72% driven by improving credit quality and a stable net interest margin. Asset quality continues to improve, as evidenced by significant reductions in nonperforming assets to 0.79% of total assets at March 31, 2014. Our business strategy, which is focused on developing long-term business relationships, continues to generate commercial loan growth even though loans decreased this quarter due to seasonal factors."

Highlights for the quarter ended March 31, 2014 included:

  • Total average assets were $1.09 billion for the three months ended March 31, 2014 as compared to $1.10 billion for the three months ended December 31, 2013 and $1.07 billion for the three months ended March 31, 2013. Total average commercial loans increased by $12.2 million, or 2.2% to $566.2 million for the three months ended March 31, 2014, compared to $554.0 million for the three months ended December 31, 2013. Additionally, average commercial loans increased by $63.3 million, or 12.6% for three months ended March 31, 2014, compared to $502.9 million for the three months ended March 31, 2013.
  • Total end of period assets were $1.08 billion at March 31, 2014 as compared to $1.12 billion at December 31, 2013 and $1.09 billion at March 31, 2013. Total commercial loans decreased by $22.7 million, or 3.9% to $559.6 million at March 31, 2014, compared to $582.3 at December 31, 2013, and increased $47.6 million, or 9.3%, compared to $512.0 million at March 31, 2013. The decrease in the current quarter is primarily a result of a seasonal reduction in lines of credit utilization.
  • Nonperforming assets totaled $8.6 million, or 0.79% of total assets, at March 31, 2014 compared to $15.0 million, or 1.35% of total assets, at December 31, 2013 and $24.3 million, or 2.24% of total assets, at March 31, 2013.
  • Return on average assets improved to 0.72% for the three months ended March 31, 2014, compared to 0.54% for the three months ended December 31, 2013 and 0.68% for the three months ended March 31, 2013.
  • Net interest income increased $404,000, or 5.1%, to $8.3 million for the three months ended March 31, 2014, compared to $7.9 million for the three months ended March 31, 2013. The net interest margin was 3.17% for the three months ended March 31, 2014 and December 31, 2013, and 3.07% for the three months ended March 31, 2013.
  • Credit related costs, which include (i) provision for loan losses, (ii) valuation adjustments on assets acquired through foreclosure and (iii) net (loss) gain on sale of assets acquired through foreclosure, totaled $282,000 for the three months ended March 31, 2014, compared to $1.2 million for the three months ended December 31, 2013 and $885,000 for the three months ended March 31, 2013. Net loan charge-offs totaled $93,000 for the three months ended March 31, 2014, compared to $49,000 for the three months ended December 31, 2013 and $207,000 for the three months ended March 31, 2013.
  • Noninterest income decreased $595,000 to $459,000 for the three months ended March 31, 2014 compared to $1.1 million for the three months ended March 31, 2013 primarily due to a gain on sale of investment securities of $361,000 in 2013 and a decrease of $203,000 in equity in earnings of affiliates due to lower mortgage loan volume.
  • Noninterest expense increased $318,000, or 5.6%, to $6.0 million for the three months ended March 31, 2014, compared to $5.7 million for the three months ended March 31, 2013. Salaries, benefits and other compensation increased $136,000, or 3.9%, for the three months ended March 31, 2014 compared to the three months ended March 31, 2013, primarily as a result of increased staffing costs. Professional fees increased $190,000, or 66.0%, for the three months ended March 31, 2014 compared to the three months ended March 31, 2013 due to legal workout costs.

The Company also announced that its Board of Directors declared a cash dividend of $0.10 per outstanding share of common stock. The dividend will be paid on or about May 29, 2014 to stockholders of record as of the close of business on May 15, 2014.

Fox Chase Bancorp, Inc. will host a conference call to discuss first quarter 2014 results on Thursday, May 1, 2014 at 9:00 am EDT. The general public can access the call by dialing (888) 317-6016. A replay of the conference call will be available through June 16, 2014 by dialing (877) 344-7529; use Conference ID: 10044276.

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

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

CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in Thousands, Except Per Share Data)
Three Months Ended
March 31,
2014 2013
(Unaudited)
INTEREST INCOME
Interest and fees on loans $8,110 $8,062
Interest on mortgage related securities 1,828 1,738
Interest on investment securities 120 71
Other interest income -- 1
Total Interest Income 10,058 9,872
INTEREST EXPENSE
Deposits 898 1,177
Short-term borrowings 25 32
Federal Home Loan Bank advances 570 502
Other borrowed funds 248 248
Total Interest Expense 1,741 1,959
Net Interest Income 8,317 7,913
Provision for loan losses -- 640
Net Interest Income after Provision for Loan Losses 8,317 7,273
NONINTEREST INCOME
Service charges and other fee income 352 361
Net loss on sale of assets acquired through foreclosure -- (4)
Income on bank-owned life insurance 117 116
Equity in earnings of affiliate (33) 170
Net gain on sale of investment securities -- 361
Other 23 50
Total Noninterest Income 459 1,054
NONINTEREST EXPENSE
Salaries, benefits and other compensation 3,641 3,505
Occupancy expense 496 447
Furniture and equipment expense 111 124
Data processing costs 385 398
Professional fees 478 288
Marketing expense 41 30
FDIC premiums 165 185
Assets acquired through foreclosure expense 321 285
Other 355 413
Total Noninterest Expense 5,993 5,675
Income Before Income Taxes 2,783 2,652
Income tax provision 827 825
Net Income $1,956 $1,827
Earnings per share:
Basic $0.17 $0.16
Diluted $0.17 $0.16
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Dollars in Thousands, Except Share Data)
March 31, December 31,
2014 2013
(Unaudited) (Audited)
ASSETS
Cash and due from banks $257 $149
Interest-earning demand deposits in other banks 8,652 11,798
Total cash and cash equivalents 8,909 11,947
Investment securities available-for-sale 8,496 10,489
Mortgage related securities available-for-sale 241,457 246,068
Mortgage related securities held-to-maturity (fair value of $75,168 at March 31, 2014 and $67,491 at December 31, 2013) 75,609 68,397
Loans, net of allowance for loan losses of $11,436 at March 31, 2014 and $11,529 at December 31, 2013 693,391 720,490
Federal Home Loan Bank stock, at cost 9,721 9,813
Bank-owned life insurance 14,664 14,547
Premises and equipment, net 9,643 9,814
Assets acquired through foreclosure 4,574 6,252
Real estate held for investment 1,620 1,620
Accrued interest receivable 3,242 3,308
Mortgage servicing rights, net 138 152
Deferred tax asset, net 6,339 8,906
Other assets 5,381 4,819
Total Assets $1,083,184 $1,116,622
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Deposits $693,493 $673,715
Short-term borrowings 27,100 80,500
Federal Home Loan Bank advances 150,000 150,000
Other borrowed funds 30,000 30,000
Advances from borrowers for taxes and insurance 1,382 1,525
Accrued interest payable 300 314
Accrued expenses and other liabilities 6,157 7,101
Total Liabilities 908,432 943,155
STOCKHOLDERS' EQUITY
Preferred stock ($.01 par value; 1,000,000 shares authorized, none issued and outstanding at March 31, 2014 and December 31, 2013) -- --
Common stock ($.01 par value; 60,000,000 shares authorized, 12,148,430 shares outstanding at March 31, 2014 and 12,147,803 shares outstanding at December 31, 2013) 146 146
Additional paid-in capital 137,698 137,593
Treasury stock, at cost (2,468,172 shares at March 31, 2014 and December 31, 2013) (33,436) (33,436)
Common stock acquired by benefit plans (8,852) (9,272)
Retained earnings 81,894 82,885
Accumulated other comprehensive loss, net (2,698) (4,449)
Total Stockholders' Equity 174,752 173,467
Total Liabilities and Stockholders' Equity $1,083,184 $1,116,622
SELECTED CONSOLIDATED FINANCIAL AND OTHER DATA OF THE COMPANY (UNAUDITED)
(Dollars in Thousands, Except Per Share Data)
March 31, December 31, March 31,
2014 2013 2013
CAPITAL RATIOS:
Stockholders' equity (to total assets) (1) 16.13% 15.53% 16.53%
Tier 1 capital (to adjusted assets) (2) 12.87 13.12 13.13
Tier 1 risk –based capital (to risk-weighted assets) (2) 18.74 18.44 19.50
Total risk-based capital (to risk-weighted assets) (2) 19.78 19.48 20.53
ASSET QUALITY INDICATORS:
Nonperforming Assets:
Nonaccruing loans $3,979 $8,780 $12,680
Accruing loans past due 90 days or more -- -- --
Total nonperforming loans $3,979 $8,780 $12,680
Assets acquired through foreclosure 4,574 6,252 11,592
Total nonperforming assets $8,553 $15,032 $24,272
Ratio of nonperforming loans to total loans 0.56% 1.20% 1.84%
Ratio of nonperforming assets to total assets 0.79 1.35 2.24
Ratio of allowance for loan losses to total loans 1.62 1.57 1.68
Ratio of allowance for loan losses to nonperforming loans 287.4 131.3 91.5
Troubled Debt Restructurings:
Nonaccruing troubled debt restructurings (3) $157 $3,488 $5,654
Accruing troubled debt restructurings 5,107 6,786 7,561
Total troubled debt restructurings $5,264 $10,274 $13,215
Past Due Loans:
30 - 59 days $829 $413 $1,477
60 - 89 days 179 5 74
Total $1,008 $418 $1,551
(1) Represents stockholders' equity ratio of Fox Chase Bancorp, Inc.
(2) Represents regulatory capital ratios of Fox Chase Bank.
(3) Nonaccruing troubled debt restructurings are included in total nonaccruing loans above
At or for the Three Months Ended
March 31, December 31, March 31,
2014 2013 2013
PERFORMANCE RATIOS (4):
Return on average assets 0.72% 0.54% 0.68%
Return on average equity 4.46 3.40 4.05
Net interest margin 3.17 3.17 3.07
Efficiency ratio (5) 65.1 64.0 63.1
OTHER:
Tangible book value per share - Core (6) $14.61 $14.65 $14.43
Tangible book value per share (7) $14.38 $14.28 $14.63
Employees (full-time equivalents) 141 142 138
(4) Annualized
(5) Represents noninterest expense, excluding valuation adjustments on assets acquired through foreclosure and loss on extinguishment of debt, divided by the sum of net interest income and noninterest income, excluding gains or losses on the sale of securities, premises and equipment and assets acquired through foreclosure.
(6) Total stockholders' equity, excluding the impact of accumulated other comprehensive (loss) income, net ($2.7 million loss at March 31, 2014, $4.4 million loss at December 31, 2013 and $2.6 million income at March 31, 2013), divided by total shares outstanding.
(7) Total stockholders' equity divided by total shares outstanding. Tangible book value per share and book value per share were the same for all periods indicated.
AVERAGE BALANCE SHEET
(Dollars in Thousands, Unaudited)
Three Months Ended March 31,
2014 2013
Interest Interest
Average and Yield/ Average and Yield/
Balance Dividends Cost (2) Balance Dividends Cost (2)
Assets:
Interest-earning assets:
Interest-earning demand deposits $7,325 $ -- 0.03% $5,146 $1 0.04%
Mortgage related securities 317,098 1,828 2.31% 323,372 1,738 2.15%
Investment securities 18,416 120 2.61% 20,970 71 1.34%
Loans (1) 714,983 8,110 4.59% 688,284 8,062 4.73%
Allowance for loan losses (11,603) (11,443)
Net loans 703,380 8,110 676,841 8,062
Total interest-earning assets 1,046,219 10,058 3.88% 1,026,329 9,872 3.88%
Noninterest-earning assets 46,457 47,877
Total assets $1,092,676 $1,074,206
Liabilities and equity:
Interest-bearing liabilities:
Interest-bearing deposits $573,346 $898 0.64% 580,026 $1,177 0.82%
Borrowings 215,915 843 1.58% 192,188 782 1.65%
Total interest-bearing liabilities 789,261 1,741 0.89% 772,214 1,959 1.03%
Noninterest-bearing deposits 119,207 112,873
Other noninterest-bearing liabilities 8,619 8,537
Total liabilities 917,087 893,624
Stockholders' equity 178,266 177,119
Accumulated comprehensive income (2,677) 3,463
Total stockholder's equity 175,589 180,582
Total liabilities and stockholders' equity $1,092,676 $1,074,206
Net interest income $8,317 $7,913
Interest rate spread 2.99% 2.85%
Net interest margin 3.17% 3.07%
(1) Nonperforming loans are included in average balance computation.
(2) Yields are not presented on a tax-equivalent basis.
AVERAGE BALANCE SHEET
(Dollars in Thousands, Unaudited)
Three Months Ended
March 31, 2014 December 31, 2013
Interest Interest
Average and Yield/ Average and Yield/
Balance Dividends Cost (2) Balance Dividends Cost (2)
Assets:
Interest-earning assets:
Interest-earning demand deposits $7,325 $ -- 0.03% $7,067 $ -- 0.03%
Mortgage related securities 317,098 1,828 2.31% 323,987 1,863 2.30%
Investment securities 18,416 120 2.61% 20,323 97 1.92%
Loans (1) 714,983 8,110 4.59% 708,397 8,331 4.67%
Allowance for loan losses (11,603) (11,495)
Net loans 703,380 8,110 696,902 8,331
Total interest-earning assets 1,046,219 10,058 3.88% 1,048,279 10,291 3.91%
Noninterest-earning assets 46,457 47,090
Total assets $1,092,676 $1,095,369
Liabilities and equity:
Interest-bearing liabilities:
Interest-bearing deposits $573,346 $898 0.64% $565,787 $971 0.68%
Borrowings 215,915 843 1.58% 229,097 872 1.51%
Total interest-bearing liabilities 789,261 1,741 0.89% 794,884 1,843 0.92%
Noninterest-bearing deposits 119,207 119,069
Other noninterest-bearing liabilities 8,619 6,060
Total liabilities 917,087 920,013
Stockholders' equity 178,266 177,883
Accumulated comprehensive income (2,677) (2,527)
Total stockholder's equity 175,589 175,356
Total liabilities and stockholders' equity $1,092,676 $1,095,369
Net interest income $8,317 $8,448
Interest rate spread 2.99% 2.99%
Net interest margin 3.17% 3.17%
(1) Nonperforming loans are included in average balance computation.
(2) Yields are not presented on a tax-equivalent basis.

CONTACT: Roger S. Deacon Chief Financial Officer Phone:(215) 775-1435

Source:Fox Chase Bancorp, Inc.