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Fox Chase Bancorp, Inc. Announces Earnings for the Quarter and Year Ended December 31, 2014

HATBORO, Pa., Jan. 28, 2015 (GLOBE NEWSWIRE) -- Fox Chase Bancorp, Inc. (the "Company") (Nasdaq:FXCB), the holding company for Fox Chase Bank (the "Bank"), today announced net income of $8.2 million, or $0.71 per diluted share, for the year ended December 31, 2014, compared to $5.5 million, or $0.48 per diluted share, for the year ended December 31, 2013. The Company reported net income of $2.1 million, or $0.19 per diluted share, for the quarter ended December 31, 2014 compared to net income of $1.5 million, or $0.13 per diluted share, for the quarter ended December 31, 2013.

The Company also announced that its Board of Directors declared a cash dividend of $0.26 per outstanding share of common stock. This quarter's dividend is comprised of a regular quarterly dividend of $0.14 (a $0.02 increase from the previous quarter) and a nonrecurring dividend of $0.12 per outstanding common share. Cumulative dividends paid for 2014 will be $0.60 per share which represents 85% of the Company's 2014 earnings. The dividend will be paid on or about February 26, 2015 to stockholders of record as of the close of business on February 12, 2015.

Commenting on the Company's performance, Thomas M. Petro, President and Chief Executive Officer stated, "We are pleased to report a 48% increase in net income for 2014. This increase was driven by improvements in several key financial metrics, including the net interest margin of 3.19% and an efficiency ratio of 61.2%, leading to a return on assets of 0.76%. We continue to execute on our commercial lending strategy as highlighted by an 8.5% growth in average commercial loans, which now represents 83% of our loan portfolio, and generated over $800,000 in cash management fee income. We also reduced nonperforming assets by 58% as credit quality continues to improve. As we look into 2015, our strategy is to continue building our commercial business."

Highlights for the year and quarter ended December 31, 2014 included:

  • Total assets were $1.09 billion at December 31, 2014 compared to $1.12 billion at December 31, 2013. Total loans were $724.3 million at December 31, 2014, an increase of $14.1 million, or 2.0%, from $710.2 million at September 30, 2014, and an increase of $3.8 million, or 0.5%, from $720.5 million at December 31, 2013. Total commercial loans increased $17.6 million, or 3.0%, from $589.9 million at September 30, 2014 to $607.5 million at December 31, 2014 primarily due to increases of $39.0 million in commercial and industrial loans and $8.2 million in commercial construction loans offset by payoffs of $29.6 million in multi-family and commercial real estate loans. Total commercial loans increased $25.2 million, or 4.3%, from $582.3 million at December 31, 2013 to $607.5 million at December 31, 2014 primarily due to increases of $33.6 million in commercial construction loans and $11.1 million in commercial and industrial loans offset by payoffs of $19.5 million in multi-family and commercial real estate loans.
  • Total stockholders' equity was $175.9 million at December 31, 2014, an increase of $2.4 million from $173.5 million at December 31, 2013. The increase was primarily due to an improvement in accumulated other comprehensive income (loss) of $4.6 million. During the year ended December 31, 2014, the Company paid dividends totaling $6.9 million, or $0.60 per share, and repurchased 384,400 shares of Company common stock at an aggregate cost of $6.3 million. Core tangible book value per share (as defined in the tables that follow) increased to $14.89 at December 31, 2014 from $14.65 at December 31, 2013.
  • Total average assets were $1.08 billion for the year ended December 31, 2014 compared to $1.09 billion for the year ended December 31, 2013. Total average commercial loans increased by $45.0 million, or 8.5%, to $575.7 million for the year ended December 31, 2014, compared to $530.7 million for the year ended December 31, 2013.
  • Nonperforming assets totaled $6.3 million, or 0.57% of total assets, at December 31, 2014 compared to $5.5 million, or 0.51% of total assets, at September 30, 2014 and $15.0 million, or 1.35% of total assets, at December 31, 2013.
  • Return on average assets was 0.76% for the year ended December 31, 2014 compared to 0.51% for the year ended December 31, 2013. Return on average assets was 0.79% for the three months ended December 31, 2014 compared to 0.67% for the three months ended September 30, 2014 and 0.54% for the three months ended December 31, 2013.
  • Net interest income increased $1.0 million, or 3.2%, to $33.5 million for the year ended December 31, 2014, compared to $32.5 million for the year ended December 31, 2013. The net interest margin was 3.19% for the year ended December 31, 2014, compared to 3.08% for the year ended December 31, 2013.
  • The efficiency ratio was 61.2% for the year ended December 31, 2014 compared to 63.7% for the year ended December 31, 2013.
  • Credit related costs, which include (i) provision for loan losses and (ii) valuation adjustments on assets acquired through foreclosure, adjusted by (iii) net gain (loss) on sale of assets acquired through foreclosure, totaled $305,000 and $2.3 million for the quarter and year ended December 31, 2014, respectively, compared to $1.2 million and $5.5 million, respectively, for the quarter and year ended December 31, 2013. Net loan charge-offs totaled $720,000 and $2.7 million, respectively, for the quarter and year ended December 31, 2014, respectively, compared to $49,000 and $623,000 for the quarter and year ended December 31, 2013. The increase in net loan charge-offs and the level of provision for loan losses was primarily due to a $2.0 million charge-off on one commercial and industrial loan during the third quarter of 2014.
  • The allowance for loan losses was $10.7 million, or 1.46% of total loans at December 31, 2014 compared to $11.1 million, or 1.54% of total loans at September 30, 2014 and $11.5 million or 1.57% of total loans at December 31, 2013.
  • Noninterest income decreased $1.5 million to $2.3 million for the year ended December 31, 2014, compared to $3.8 million for the year ended December 31, 2013 primarily due to a gain on sale of investment securities of $532,000 in 2013, a decrease of $273,000 in equity in earnings of affiliate due to lower mortgage volumes and a decrease of $552,000 in gain (loss) on sale of assets acquired through foreclosure due to a gain of $484,000 recorded in 2013 and a loss of $68,000 recorded in 2014.
  • Noninterest expense decreased $5.2 million, or 19.1%, to $22.2 million for the year ended December 31, 2014, compared to $27.5 million for the year ended December 31, 2013. This decrease was primarily due to a decrease of $4.8 million in assets acquired through foreclosure expense as the Company recorded $305,000 in valuation adjustments on assets acquired through foreclosure during the year ended December 31, 2014 compared to $5.0 million for the year ended December 31, 2013.
  • Excluding a decrease of $4.8 million in valuation adjustments on assets acquired through foreclosure, noninterest expense decreased $528,000, or 2.4%, to $21.9 million for the year ended December 31, 2014 from $22.5 million for the year ended December 31, 2013. The efficiency ratio was 61.2% and 63.3% for the year and quarter ended December 31, 2014, respectively, compared to 63.7% and 64.0% for the year and quarter ended December 31, 2013, respectively.

Fox Chase Bancorp, Inc. will host a conference call to discuss fourth quarter and year end 2014 results on Thursday, January 29, 2015 at 9:00 am EDT. The general public can access the call by dialing (877) 507-3275. A replay of the conference call will be available through March 13, 2015 by dialing (877) 344-7529; use Conference ID: 10059223. Participants may preregister at http://dpregister.com/10059223.

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 Twelve Months Ended
December 31, December 31,
2014 2013 2014 2013
(Unaudited) (Unaudited) (Audited)
Interest and fees on loans $8,085 $8,331 $32,700 $32,650
Interest on mortgage related securities 1,624 1,863 6,859 7,159
Interest and dividends on investment securities 126 97 563 318
Other interest income 5 -- 7 2
Total Interest Income 9,840 10,291 40,129 40,129
Deposits 761 971 3,216 4,344
Short-term borrowings 27 36 127 130
Federal Home Loan Bank advances 565 582 2,288 2,188
Other borrowed funds 253 254 1,004 1,007
Total Interest Expense 1,606 1,843 6,635 7,669
Net Interest Income 8,234 8,448 33,494 32,460
Provision for loan losses 350 450 1,943 982
Net Interest Income after Provision for Loan Losses 7,884 7,998 31,551 31,478
Service charges and other fee income 412 434 1,604 1,694
Net (loss) gain on sale of assets acquired through foreclosure 68 -- (68) 484
Income on bank-owned life insurance 122 119 480 470
Equity in earnings of affiliate 47 (25) 172 445
Net gain on sale of investment securities -- -- -- 532
Other 29 40 105 165
Total Noninterest Income 678 568 2,293 3,790
Salaries, benefits and other compensation 3,710 3,709 14,380 14,338
Occupancy expense 388 446 1,709 1,689
Furniture and equipment expense 90 111 390 469
Data processing costs 396 382 1,542 1,537
Professional fees 331 441 1,417 1,691
Marketing expense 146 81 302 248
FDIC premiums 120 184 571 709
Assets acquired through foreclosure expense 17 736 420 5,201
Other 423 397 1,500 1,589
Total Noninterest Expense 5,621 6,487 22,231 27,471
Income Before Income Taxes 2,941 2,079 11,613 7,797
Income tax provision 833 589 3,418 2,263
Net Income $2,108 $1,490 $8,195 $5,534
Basic $0.19 $0.13 $0.73 $0.49
Diluted $0.19 $0.13 $0.71 $0.48
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Dollars in Thousands, Except Share Data)
December 31, December 31,
2014 2013
(Unaudited) (Audited)
ASSETS
Cash and due from banks $2,763 $149
Interest-earning demand deposits in other banks 14,450 11,798
Total cash and cash equivalents 17,213 11,947
Investment securities available-for-sale 8,388 10,489
Mortgage related securities available-for-sale 125,649 246,068
Mortgage related securities held-to-maturity (fair value of $170,854 at December 31, 2014 and $67,491 at December 31, 2013) 170,172 68,397
Loans, net of allowance for loan losses of $10,730 at December 31, 2014 and $11,529 at December 31, 2013 724,326 720,490
Federal Home Loan Bank stock, at cost 6,015 9,813
Bank-owned life insurance 15,027 14,547
Premises and equipment, net 9,418 9,814
Assets acquired through foreclosure 2,814 6,252
Real estate held for investment 1,620 1,620
Accrued interest receivable 3,147 3,308
Mortgage servicing rights, net 111 152
Deferred tax asset, net 4,561 8,906
Other assets 6,155 4,819
Total Assets $1,094,616 $1,116,622
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Deposits $711,909 $673,715
Short-term borrowings 50,000 80,500
Federal Home Loan Bank advances 120,000 150,000
Other borrowed funds 30,000 30,000
Advances from borrowers for taxes and insurance 1,447 1,525
Accrued interest payable 311 314
Accrued expenses and other liabilities 5,038 7,101
Total Liabilities 918,705 943,155
STOCKHOLDERS' EQUITY
Preferred stock ($.01 par value; 1,000,000 shares authorized, none issued and outstanding at December 31, 2014 and December 31, 2013) -- --
Common stock ($.01 par value; 60,000,000 shares authorized, 11,802,791 shares outstanding at December 31, 2014 and 12,147,803 shares outstanding at December 31, 2013) 147 146
Additional paid-in capital 139,177 137,593
Treasury stock, at cost (2,852,572 shares at December 31, 2014 and 2,468,172 at December 31, 2013) (39,698) (33,436)
Common stock acquired by benefit plans (8,056) (9,272)
Retained earnings 84,225 82,885
Accumulated other comprehensive income (loss), net 116 (4,449)
Total Stockholders' Equity 175,911 173,467
Total Liabilities and Stockholders' Equity $1,094,616 $1,116,622
SELECTED CONSOLIDATED FINANCIAL AND OTHER DATA OF THE COMPANY (UNAUDITED)
(Dollars in Thousands, Except Per Share Data)
December 31, September 30, December 31,
2014 2014 2013
CAPITAL RATIOS:
Stockholders' equity (to total assets) (1) 16.07% 16.59% 15.53%
Tier 1 capital (to adjusted assets) (2) 13.99 13.35 13.12
Tier 1 risk-based capital (to risk-weighted assets) (2) 18.97 19.18 18.44
Total risk-based capital (to risk-weighted assets) (2) 20.02 20.22 19.48
ASSET QUALITY INDICATORS:
Nonperforming Assets:
Nonaccruing loans $3,454 $3,641 $8,780
Accruing loans past due 90 days or more -- -- --
Total nonperforming loans $3,454 $3,641 $8,780
Assets acquired through foreclosure 2,814 1,889 6,252
Total nonperforming assets $6,268 $5,530 $15,032
Ratio of nonperforming loans to total loans 0.47% 0.50% 1.20%
Ratio of nonperforming assets to total assets 0.57 0.51 1.35
Ratio of allowance for loan losses to total loans 1.46 1.54 1.57
Ratio of allowance for loan losses to nonperforming loans 310.7 304.8 131.3
Troubled Debt Restructurings:
Nonaccruing troubled debt restructurings (3) $1,401 $277 $3,488
Accruing troubled debt restructurings 3,624 5,504 6,786
Total troubled debt restructurings $5,025 $5,781 $10,274
Past Due Loans:
30 - 59 days $113 $939 $413
60 - 89 days 145 124 5
Total $258 $1,063 $418
(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
December 31, September 30, December 31,
2014 2014 2013
PERFORMANCE RATIOS (4):
Return on average assets 0.79% 0.67% 0.54%
Return on average equity 4.76 4.07 3.40
Net interest margin 3.18 3.20 3.17
Efficiency ratio (5) 63.3 56.7 64.0
OTHER:
Tangible book value per share - Core (6) $14.89 $14.81 $14.65
Tangible book value per share (7) $14.90 $14.78 $14.28
Employees (full-time equivalents) 138 141 142
At or for the Twelve Months Ended
December 31, December 31,
2014 2013
PERFORMANCE RATIOS (4):
Return on average assets 0.76% 0.51%
Return on average equity 4.63 3.13
Net interest margin 3.19 3.08
Efficiency ratio (5) 61.2 63.7
(4) Annualized
(5) Represents noninterest expense, excluding valuation adjustments on assets acquired through foreclosure, 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 gain (loss), net ($116,000 at December 31, 2014, $(453,000) at September 30, 2014, $(4.4 million) at December 31, 2013 and $(2.5 million) at September 30, 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 December 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 $12,883 $5 0.14% $7,067 $ -- 0.03%
Mortgage related securities 296,457 1,624 2.19% 323,987 1,863 2.30%
Investment securities 17,715 126 2.84% 20,323 97 1.92%
Loans (1) 703,052 8,085 4.57% 708,397 8,331 4.67%
Allowance for loan losses (11,133) (11,495)
Net loans 691,919 8,085 696,902 8,331
Total interest-earning assets 1,018,974 9,840 3.84% 1,048,279 10,291 3.91%
Noninterest-earning assets 43,137 47,090
Total assets $1,062,111 $1,095,369
Liabilities and equity:
Interest-bearing liabilities:
Interest-bearing deposits $546,781 $761 0.55% $565,787 $971 0.68%
Borrowings 194,498 845 1.73% 229,097 872 1.51%
Total interest-bearing liabilities 741,279 1,606 0.86% 794,884 1,843 0.92%
Noninterest-bearing deposits 135,746 119,069
Other noninterest-bearing liabilities 7,962 6,060
Total liabilities 884,987 920,013
Stockholders' equity 177,126 177,883
Accumulated comprehensive income (2) (2,527)
Total stockholder's equity 177,124 175,356
Total liabilities and stockholders' equity $1,062,111 $1,095,369
Net interest income $8,234 $8,448
Interest rate spread 2.98% 2.99%
Net interest margin 3.18% 3.17%
(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
December 31, 2014 September 30, 2014
Interest Interest
Average and Yield/ Average and Yield/
Balance Dividends Cost (2) Balance Dividends Cost (2)
Assets:
Interest-earning assets:
Interest-earning demand deposits $12,883 $5 0.14% $6,815 $1 0.06%
Mortgage related securities 296,457 1,624 2.19% 302,562 1,633 2.16%
Investment securities 17,715 126 2.84% 19,616 144 2.93%
Loans (1) 703,052 8,085 4.57% 730,410 8,375 4.56%
Allowance for loan losses (11,133) (11,541)
Net loans 691,919 8,085 718,869 8,375
Total interest-earning assets 1,018,974 9,840 3.84% 1,047,862 10,153 3.85%
Noninterest-earning assets 43,137 41,403
Total assets $1,062,111 $1,089,265
Liabilities and equity:
Interest-bearing liabilities:
Interest-bearing deposits $546,781 $761 0.55% $552,072 $760 0.55%
Borrowings 194,498 845 1.73% 228,737 875 1.52%
Total interest-bearing liabilities 741,279 1,606 0.86% 780,809 1,635 0.83%
Noninterest-bearing deposits 135,746 123,709
Other noninterest-bearing liabilities 7,962 6,407
Total liabilities 884,987 910,925
Stockholders' equity 177,126 178,984
Accumulated comprehensive income (2) (644)
Total stockholder's equity 177,124 178,340
Total liabilities and stockholders' equity $1,062,111 $1,089,265
Net interest income $8,234 $8,518
Interest rate spread 2.98% 3.02%
Net interest margin 3.18% 3.20%
(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)
Twelve Months Ended December 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 $8,316 $7 0.08% $5,921 $2 0.04%
Mortgage related securities 307,514 6,859 2.23% 328,338 7,159 2.18%
Investment securities 18,687 563 3.01% 20,755 318 1.53%
Nontaxable securities -- -- -- -- 0.00%
Loans (1) 715,673 32,700 4.57% 698,860 32,650 4.67%
Allowance for loan losses (11,458) (11,438)
Net loans 704,215 32,700 687,422 32,650
Total interest-earning assets 1,038,732 40,129 3.86% 1,042,436 40,129 3.81%
Noninterest-earning assets 44,156 49,202
Total assets $1,082,888 $1,091,638
Liabilities and equity:
Interest-bearing liabilities:
Interest-bearing deposits $558,194 $3,216 0.58% $573,487 $4,344 0.76%
Borrowings 214,980 3,419 1.59% 213,175 3,325 1.56%
Total interest-bearing liabilities 773,174 6,635 0.86% 786,662 7,669 0.97%
Noninterest-bearing deposits 125,264 121,101
Other noninterest-bearing liabilities 7,569 6,851
Total liabilities 906,007 914,614
Stockholders' equity 178,068 177,141
Accumulated comprehensive income (1,187) (117)
Total stockholder's equity 176,881 177,024
Total liabilities and stockholders' equity $1,082,888 $1,091,638
Net interest income $33,494 $32,460
Interest rate spread 3.00% 2.84%
Net interest margin 3.19% 3.08%
(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.