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First Connecticut Bancorp, Inc. Reports Third Quarter 2014 Earnings of $0.17 Earnings Per Share

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.

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.