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First Connecticut Bancorp, Inc. Reports Second Quarter 2015 Earnings of $0.23 Earnings Per Share

FARMINGTON, Conn., July 22, 2015 (GLOBE NEWSWIRE) -- First Connecticut Bancorp, Inc. (the “Company”) (NASDAQ:FBNK), the holding company for Farmington Bank (the “Bank”), reported net income of $3.5 million, or $0.23 diluted earnings per share for the quarter ended June 30, 2015 compared to net income of $2.2 million, or $0.14 diluted earnings per share for the quarter ended June 30, 2014.

Net income on a core earnings basis was $2.8 million, or $0.19 diluted core earnings per share for the quarter ended June 30, 2015. Core earnings exclude non-recurring items. The significant non-recurring items during the quarter ended June 30, 2015 were a $1.3 million gain on sale of investments related to the sale of a trust preferred security and $258,000 in stock compensation costs related to two directors retiring during the quarter.

“Our positive results reflect the impact of our significant organic growth strategy and ongoing focus on enhancing tangible book value and earnings per share. Over the past several quarters our double digit loan growth has produced a diversified portfolio with flexibility to make future structural changes and one that remains asset sensitive in a changing interest rate environment” stated John J. Patrick Jr., First Connecticut Bancorp’s Chairman, President and CEO.

Financial Highlights

  • Net interest income increased $724,000 to $17.1 million in the second quarter of 2015 compared to the linked quarter and increased $1.5 million or 10% compared to the second quarter of 2014.
  • Strong organic loan growth continued during the quarter as total loans increased $81.6 million to $2.3 billion at June 30, 2015 and increased $338.8 million or 17% from a year ago.
  • Overall deposits remained flat at $1.9 billion in the second quarter of 2015 compared to the linked quarter and increased $247.3 million or 15% from a year ago.
  • Checking accounts grew by 3.3% or 1,517 net new accounts in the second quarter of 2015 and by 12.1% or 5,169 net new accounts from a year ago.
  • Noninterest expense to average assets was 2.43% in the second quarter of 2015 compared to 2.38% in the linked quarter and 2.60% in the second quarter of 2014.
  • Tangible book value per share is $15.01 compared to $14.82 on a linked quarter basis and $14.39 at June 30, 2014.
  • Asset quality improved as loan delinquencies 30 days and greater decreased to 0.58% of total loans at June 30, 2015 compared to 0.64% at March 31, 2015 and 0.78% at June 30, 2014. Non-accrual loans represented 0.57% of total loans compared to 0.64% of total loans on a linked quarter basis and 0.75% of total loans at June 30, 2014.
  • The allowance for loan losses represented 0.86% of total loans at June 30, 2015 compared to 0.87% at March 31, 2015 and 0.92% at June 30, 2014.
  • The Company paid a cash dividend of $0.05 per share on June 11, 2015. This marks the fifteenth consecutive quarter the Company has paid a dividend since it became a public company on June 29, 2011.

Second quarter 2015 compared with first quarter 2015

Net interest income

  • Net interest income increased $724,000 to $17.1 million in the second quarter of 2015 compared to the linked quarter due primarily to a $73.6 million increase in the average net loan balance and a $92,000 decrease in interest expense.
  • Net interest margin increased 3 basis points to 2.86% in the second quarter of 2015 compared to 2.83% in the linked quarter due to a decrease in the cost of interest-bearing liabilities.
  • The cost of interest-bearing liabilities decreased 4 basis points to 64 basis points in the second quarter of 2015 compared to 68 basis points in the linked quarter primarily due to expiring money market promotions.

Provision for loan losses

  • Provision for loan losses was $663,000 for the second quarter of 2015 compared to $615,000 for the linked quarter.
  • Net charge-offs in the quarter were $314,000 or 0.06% to average loans (annualized) compared to $343,000 or 0.06% to average loans (annualized) in the linked quarter.
  • The allowance for loan losses represented 0.86% of total loans at June 30, 2015 compared to 0.87% at March 31, 2015.

Noninterest income

  • Total noninterest income increased $1.4 million to $4.1 million in the second quarter of 2015 compared to the linked quarter primarily due to a $977,000 increase in gain on sale of investments and a $352,000 increase in other noninterest income.
  • Gain on sale of investments was $1.3 million in the second quarter of 2015 due to the sale of a trust preferred security.
  • Other income increased $352,000 to $528,000 in the second quarter of 2015 compared to the linked quarter primarily due to a $485,000 increase in swap fees offset by a decrease in mortgage banking derivatives income.

Noninterest expense

  • Noninterest expense increased $660,000 in the second quarter of 2015 to $15.6 million compared to the linked quarter primarily due to a $245,000 increase in salaries and employee benefits and other operating expenses.
  • Other operating expenses increased $354,000 primarily due to $258,000 in non-recurring stock compensation costs related to two directors retiring during the quarter and a $149,000 loss on a credit sharing arrangement on a sold loan.

Income tax expense

  • Income tax expense was $1.4 million in the second quarter of 2015 compared to $976,000 in the linked quarter. The increase in income tax expense in the second quarter was primarily due to a $1.4 million increase in income before taxes.

Second quarter 2015 compared with second quarter 2014

Net interest income

  • Net interest income increased $1.5 million to $17.1 million in the second quarter of 2015 compared to the prior year quarter primarily due to a $333.5 million increase in the average net loan balance offset by a $775,000 increase in interest expense.
  • Net interest margin decreased to 2.86% in the second quarter of 2015 compared to 3.02% in the second quarter of 2014 primarily due to a 14 basis point decrease in the yield on loans and a 7 basis point increase in the cost of interest-bearing liabilities.
  • The cost of interest-bearing liabilities increased to 64 basis points in the second quarter of 2015 compared to 57 basis points in the prior year quarter primarily due to certificate of deposit promotions and entering the brokered deposit market.

Provision for loan losses

  • Provision for loan losses was $663,000 for the second quarter of 2015 compared to $410,000 for the prior year quarter.
  • Net charge-offs in the quarter were $314,000 or 0.06% to average loans (annualized) compared to $129,000 or 0.03% to average loans (annualized) in the prior year quarter.
  • The allowance for loan losses represented 0.86% of total loans at June 30, 2015 compared to 0.92% at June 30, 2014.

Noninterest income

  • Total noninterest income increased $2.0 million to $4.1 million in the second quarter of 2015 compared to the prior year quarter due to an $183,000 increase in fees for customer services, a $1.3 million gain on sale of investments and a $485,000 increase in swap fees.

Noninterest expense

  • Noninterest expense increased $1.3 million in the second quarter of 2015 to $15.6 million compared to the prior year quarter primarily due to an increase in salaries and employee benefits and other operating expenses.
  • Salaries and employee benefits increased $397,000 primarily due to costs associated with our expansion into western Massachusetts and growth driven staff increases in our compliance areas.
  • Other operating expenses increased $806,000 primarily due to $258,000 in non-recurring stock compensation costs related to two directors retiring during the quarter, $149,000 loss on a credit sharing arrangement on a sold loan and a general increase in other costs to support the Bank’s operations.

Income tax expense

  • Income tax expense was $1.4 million in the second quarter of 2015 compared to $776,000 in the prior year quarter. The increase in income tax expense in the second quarter was primarily due to a $1.9 million increase in income before taxes.

June 30, 2015 compared to June 30, 2014

Financial Condition

  • Total assets increased $358.5 million or 16% at June 30, 2015 to $2.6 billion compared to $2.3 billion at June 30, 2014, largely reflecting an increase in loans.
  • Our investment portfolio totaled $178.2 million at June 30, 2015 compared to $173.5 million at June 30, 2014, an increase of $4.7 million.
  • Net loans increased $337.9 million at June 30, 2015 to $2.3 billion compared to $1.9 billion at June 30, 2014 due to our continued focus on commercial and residential lending.
  • Deposits increased $247.3 million at June 30, 2015 to $1.9 billion compared to $1.6 billion at June 30, 2014 primarily due to increases in municipal deposits, demand deposits and time deposits accounts as we continue to develop and grow relationships in the geographical areas we serve. We entered the brokered deposit market during the quarter with balances totaling $52.2 million at June 30, 2015.
  • Federal Home Loan Bank of Boston advances increased $109.7 million to $400.7 million at June 30, 2015 compared to $291.0 million at June 30, 2014. Advances were used to support loan and securities growth.

Asset Quality

  • At June 30, 2015, the allowance for loan losses represented 0.86% of total loans and 150.94% of non-accrual loans, compared to 0.92% of total loans and 122.25% of non-accrual loans at June 30, 2014.
  • Loan delinquencies 30 days and greater decreased to 0.58% of total loans at June 30, 2015 compared to 0.78% of total loans at June 30, 2014.
  • Non-accrual loans represented 0.57% of total loans at June 30, 2015 compared to 0.75% of total loans at June 30, 2014.
  • Net charge-offs in the quarter were $314,000 or 0.06% to average loans (annualized) compared to $129,000 or 0.03% 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 13.11% at June 30, 2015.
  • Tangible book value per share was $15.01 compared to $14.82 on a linked quarter basis and $14.39 at June 30, 2014.
  • During the second quarter of 2015, the Company repurchased 115,117 shares of common stock at an average price per share of $14.81 at a total cost of $1.7 million. Repurchased shares are held as treasury stock and will be available for general corporate purposes. The Company has 780,334 shares remaining to repurchase at June 30, 2015 from prior regulatory approval.
  • At June 30, 2015, 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, July 23, 2015 at 11:00am Eastern Time to discuss second quarter results. Those wishing to participate in the call may dial-in to the call at 1-888-336-7151. The Canada dial-in number is 1-855-669-9657 and 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
June 30, March 31, December 31, September 30, June 30,
(Dollars in thousands, except per share data) 2015 2015 2014 2014 2014
Selected Financial Condition Data:
Total assets$ 2,626,217 $ 2,549,074 $ 2,485,360 $ 2,395,674 $ 2,267,709
Cash and cash equivalents 42,992 44,847 42,863 43,914 50,778
Securities held-to-maturity, at amortized cost 34,366 21,006 16,224 12,439 12,715
Securities available-for-sale, at fair value 143,799 173,829 188,041 194,706 160,784
Federal Home Loan Bank of Boston stock, at cost 21,496 19,785 19,785 17,724 17,724
Loans, net 2,268,385 2,186,937 2,119,917 2,031,780 1,930,502
Deposits 1,878,040 1,887,954 1,733,041 1,727,994 1,630,779
Federal Home Loan Bank of Boston advances 400,700 308,700 401,700 304,700 291,000
Total stockholders' equity 239,082 237,709 234,563 233,646 231,269
Allowance for loan losses 19,581 19,232 18,960 18,556 17,912
Non-accrual loans 12,973 14,086 15,468 15,475 14,652
Impaired loans 39,975 42,130 43,452 39,579 41,892
Loan delinquencies 30 days and greater 13,244 14,193 16,079 15,922 15,257
Selected Operating Data:
Interest income$ 20,164 $ 19,532 $ 19,412 $ 18,528 $ 17,854
Interest expense 3,065 3,157 3,017 2,543 2,290
Net interest income 17,099 16,375 16,395 15,985 15,564
Provision for loan losses 663 615 632 1,041 410
Net interest income after provision for loan losses 16,436 15,760 15,763 14,944 15,154
Noninterest income 4,074 2,664 2,498 2,778 2,066
Noninterest expense 15,597 14,937 14,615 14,219 14,254
Income before income taxes 4,913 3,487 3,646 3,503 2,966
Income tax expense 1,441 976 499 997 776
Net income$ 3,472 $ 2,511 3,147 $ 2,506 $ 2,190
Performance Ratios (annualized):
Return on average assets 0.54% 0.40% 0.52% 0.43% 0.40%
Return on average equity 5.77% 4.24% 5.31% 4.27% 3.77%
Interest rate spread (1) 2.72% 2.68% 2.68% 2.78% 2.89%
Net interest rate margin (2) 2.86% 2.83% 2.83% 2.91% 3.02%
Non-interest expense to average assets 2.43% 2.38% 2.39% 2.46% 2.60%
Efficiency ratio (3) 77.13% 78.35% 77.70% 75.78% 80.85%
Average interest-earning assets to average
interest-bearing liabilities 126.98% 125.86% 127.89% 128.17% 129.13%
Loans to deposits 121.83% 116.86% 123.42% 118.65% 119.48%
Asset Quality Ratios:
Allowance for loan losses as a percent of total loans 0.86% 0.87% 0.89% 0.91% 0.92%
Allowance for loan losses as a percent of
non-accrual loans 150.94% 136.53% 122.58% 119.91% 122.25%
Net charge-offs to average loans (annualized) 0.06% 0.06% 0.04% 0.08% 0.03%
Non-accrual loans as a percent of total loans 0.57% 0.64% 0.72% 0.76% 0.75%
Non-accrual loans as a percent of total assets 0.49% 0.55% 0.62% 0.65% 0.65%
Loan delinquencies 30 days and greater as a
percent of total loans 0.58% 0.64% 0.75% 0.78% 0.78%
Per Share Related Data:
Basic earnings per share$ 0.23 $ 0.17 $ 0.21 $ 0.17 $ 0.15
Diluted earnings per share$ 0.23 $ 0.17 $ 0.21 $ 0.17 $ 0.14
Dividends declared per share$ 0.05 $ 0.05 $ 0.05 $ 0.05 $ 0.04
Tangible book value (4)$ 15.01 $ 14.82 $ 14.64 $ 14.56 $ 14.39
Common stock shares outstanding 15,922,888 16,035,005 16,026,319 16,043,031 16,072,637
Weighted-average basic shares outstanding 14,694,472 14,722,112 14,695,490 14,613,115 14,601,416
Weighted-average diluted shares outstanding 14,839,454 14,850,597 14,836,032 14,710,880 14,707,472
(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 tax-equivalent net interest income as a percent of average interest-earning assets.
(3) Represents core noninterest expense divided by the sum of core net interest income and core noninterest income.
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
June 30, March 31, December 31, September 30, June 30,
(Dollars in thousands) 2015 2015 2014 2014 2014
Capital Ratios:
Equity to total assets at end of period 9.10% 9.33% 9.44% 9.75% 10.20%
Average equity to average assets 9.36% 9.45% 9.71% 10.13% 10.59%
Total Capital (to Risk Weighted Assets) 13.11%* 13.44% 13.73% 14.12% 14.56%
Tier I Capital (to Risk Weighted Assets) 12.12%* 12.44% 12.70% 13.07% 13.51%
Common Equity Tier I Capital 12.12%* 12.44% n/a n/a n/a
Tier I Leverage Capital (to Average Assets) 9.57%* 9.72% 9.86% 10.25% 10.70%
Total equity to total average assets 9.29% 9.48% 9.61% 10.09% 10.54%
* Estimated
Loans and Allowance for Loan Losses:
Real estate
Residential$ 888,376 $ 850,819 $ 827,005 $ 789,166 $ 749,124
Commercial 817,955 769,712 765,066 717,399 686,299
Construction 42,858 53,913 57,371 80,242 69,047
Installment 3,103 3,114 3,356 3,524 3,850
Commercial 359,537 352,085 309,708 289,708 277,483
Collateral 1,551 1,676 1,733 1,826 1,480
Home equity line of credit 169,507 169,969 169,768 163,608 156,625
Revolving credit 77 80 99 97 75
Resort 837 880 929 1,019 1,068
Total loans 2,283,801 2,202,248 2,135,035 2,046,589 1,945,051
Less:
Allowance for loan losses (19,581) (19,232) (18,960) (18,556) (17,912)
Net deferred loan costs 4,165 3,921 3,842 3,747 3,363
Loans, net$ 2,268,385 $ 2,186,937 $ 2,119,917 $ 2,031,780 $ 1,930,502
Deposits:
Noninterest-bearing demand deposits$ 377,092 $ 337,211 $ 330,524 $ 323,499 $ 315,916
Interest-bearing
NOW accounts 425,789 499,130 355,412 454,650 377,570
Money market 430,558 462,532 470,991 417,498 401,694
Savings accounts 220,154 214,083 210,892 200,501 202,970
Time deposits 424,447 374,998 365,222 331,846 332,629
Total interest-bearing deposits 1,500,948 1,550,743 1,402,517 1,404,495 1,314,863
Total deposits$ 1,878,040 $ 1,887,954 $ 1,733,041 $ 1,727,994 $ 1,630,779


First Connecticut Bancorp, Inc.
Consolidated Statements of Condition (Unaudited)
June 30, March 31, June 30,
2015 2015 2014
(Dollars in thousands)
Assets
Cash and due from banks$ 35,595 $ 33,175 $ 46,303
Interest bearing deposits with other institutions 7,397 11,672 4,475
Total cash and cash equivalents 42,992 44,847 50,778
Securities held-to-maturity, at amortized cost 34,366 21,006 12,715
Securities available-for-sale, at fair value 143,799 173,829 160,784
Loans held for sale 7,550 2,187 4,576
Loans (1) 2,287,966 2,206,169 1,948,414
Allowance for loan losses (19,581) (19,232) (17,912)
Loans, net 2,268,385 2,186,937 1,930,502
Premises and equipment, net 17,964 18,289 20,072
Federal Home Loan Bank of Boston stock, at cost 21,496 19,785 17,724
Accrued income receivable 6,425 6,047 5,133
Bank-owned life insurance 50,283 39,960 39,120
Deferred income taxes 16,450 16,759 14,756
Prepaid expenses and other assets 16,507 19,428 11,549
Total assets$ 2,626,217 $ 2,549,074 $ 2,267,709
Liabilities and Stockholders' Equity
Deposits
Interest-bearing$ 1,500,948 $ 1,550,743 $ 1,314,863
Noninterest-bearing 377,092 337,211 315,916
1,878,040 1,887,954 1,630,779
Federal Home Loan Bank of Boston advances 400,700 308,700 291,000
Repurchase agreement borrowings 10,500 10,500 21,000
Repurchase liabilities 56,041 59,198 55,326
Accrued expenses and other liabilities 41,854 45,013 38,335
Total liabilities 2,387,135 2,311,365 2,036,440
Stockholders' Equity
Common stock 181 181 181
Additional paid-in-capital 180,764 179,683 177,431
Unallocated common stock held by ESOP (12,160) (12,422) (13,218)
Treasury stock, at cost (30,389) (28,725) (28,577)
Retained earnings 108,014 105,339 99,386
Accumulated other comprehensive loss (7,328) (6,347) (3,934)
Total stockholders' equity 239,082 237,709 231,269
Total liabilities and stockholders' equity$ 2,626,217 $ 2,549,074 $ 2,267,709
(1) Loans include net deferred fees and unamortized premiums of $4.2 million, $3.9 million and $3.4 million at June 30, 2015, March 31, 2015 and June 30, 2014, respectively.


First Connecticut Bancorp, Inc.
Consolidated Statements of Income (Unaudited)
Three Months Ended Six Months Ended
June 30, March 31, June 30, June 30,
(Dollars in thousands, except per share data) 2015 2015 2014 2015 2014
Interest income
Interest and fees on loans
Mortgage $ 15,331 $ 15,058 $ 13,875 $ 30,389 $ 27,303
Other 4,264 3,995 3,573 8,259 6,781
Interest and dividends on investments
United States Government and agency obligations 385 323 218 708 407
Other bonds 35 18 81 53 139
Corporate stocks 145 131 105 276 198
Other interest income 4 7 2 11 6
Total interest income 20,164 19,532 17,854 39,696 34,834
Interest expense
Deposits 2,140 2,209 1,711 4,349 3,405
Interest on borrowed funds 804 751 368 1,555 687
Interest on repo borrowings 92 163 179 255 356
Interest on repurchase liabilities 29 34 32 63 72
Total interest expense 3,065 3,157 2,290 6,222 4,520
Net interest income 17,099 16,375 15,564 33,474 30,314
Provision for loan losses 663 615 410 1,278 915
Net interest income
after provision for loan losses 16,436 15,760 15,154 32,196 29,399
Noninterest income
Fees for customer services 1,500 1,373 1,317 2,873 2,508
Gain on sale of investments 1,250 273 - 1,523 -
Net gain on loans sold 412 520 317 932 439
Brokerage and insurance fee income 60 49 49 109 93
Bank owned life insurance income 324 273 281 597 563
Other 528 176 102 704 225
Total noninterest income 4,074 2,664 2,066 6,738 3,828
Noninterest expense
Salaries and employee benefits 9,035 8,790 8,638 17,825 16,926
Occupancy expense 1,272 1,367 1,209 2,639 2,558
Furniture and equipment expense 1,077 1,036 1,106 2,113 2,124
FDIC assessment 402 412 321 814 649
Marketing 534 409 509 943 887
Other operating expenses 3,277 2,923 2,471 6,200 5,070
Total noninterest expense 15,597 14,937 14,254 30,534 28,214
Income before income taxes 4,913 3,487 2,966 8,400 5,013
Income tax expense 1,441 976 776 2,417 1,331
Net income$ 3,472 $ 2,511 $ 2,190 $ 5,983 $ 3,682
Earnings per share:
Basic $ 0.23 $ 0.17 $ 0.15 $ 0.40 $ 0.24
Diluted 0.23 0.17 0.14 0.40 0.24
Weighted average shares outstanding:
Basic 14,694,472 14,722,112 14,601,416 14,708,215 14,710,453
Diluted 14,839,454 14,850,597 14,707,472 14,844,994 14,813,566


First Connecticut Bancorp, Inc.
Consolidated Average Balances, Yields and Rates (Unaudited)
For The Three Months Ended
June 30, 2015 March 31, 2015 June 30, 2014
Average BalanceInterest and Dividends (1)Yield/Cost Average BalanceInterest and Dividends (1)Yield/Cost Average BalanceInterest and Dividends (1)Yield/Cost
(Dollars in thousands)
Interest-earning assets:
Loans$ 2,241,447 $ 19,949 3.57% $ 2,167,879 $ 19,391 3.63% $ 1,907,900 $ 17,633 3.71%
Securities 178,780 478 1.07% 196,087 394 0.81% 167,199 355 0.85%
Federal Home Loan Bank of Boston stock 20,310 86 1.70% 19,785 79 1.62% 14,744 49 1.33%
Federal funds and other earning assets 10,032 5 0.20% 12,394 6 0.20% 3,567 2 0.22%
Total interest-earning assets 2,450,569 20,518 3.36% 2,396,145 19,870 3.36% 2,093,410 18,039 3.46%
Noninterest-earning assets 121,820 112,534 100,339
Total assets $ 2,572,389 $ 2,508,679 $ 2,193,749
Interest-bearing liabilities:
NOW accounts$ 454,532 $ 310 0.27% $ 449,897 $ 321 0.29% $ 332,597 $ 185 0.22%
Money market 435,749 798 0.73% 480,687 970 0.82% 414,774 754 0.73%
Savings accounts 217,651 57 0.11% 208,626 57 0.11% 204,218 42 0.08%
Certificates of deposit 392,941 975 1.00% 367,501 861 0.95% 335,391 730 0.87%
Total interest-bearing deposits 1,500,873 2,140 0.57% 1,506,711 2,209 0.59% 1,286,980 1,711 0.53%
Federal Home Loan Bank of Boston Advances 366,460 804 0.88% 304,411 751 1.00% 259,980 368 0.57%
Repurchase agreement borrowings 10,500 92 3.51% 19,133 163 3.46% 21,000 179 3.42%
Repurchase liabilities 52,043 29 0.22% 58,507 34 0.24% 53,159 32 0.24%
Total interest-bearing liabilities 1,929,876 3,065 0.64% 1,888,762 3,157 0.68% 1,621,119 2,290 0.57%
Noninterest-bearing deposits 348,857 330,865 303,473
Other noninterest-bearing liabilities 52,831 52,092 36,890
Total liabilities 2,331,564 2,271,719 1,961,482
Stockholders' equity 240,825 236,960 232,267
Total liabilities and stockholders' equity$ 2,572,389 $ 2,508,679 $ 2,193,749
Tax-equivalent net interest income $ 17,453 $ 16,713 $ 15,749
Less: tax-equivalent adjustment (354) (338) (185)
Net interest income $ 17,099 $ 16,375 $ 15,564
Net interest rate spread (2) 2.72% 2.68% 2.89%
Net interest-earning assets (3) $ 520,693 $ 507,383 $ 472,291
Net interest margin (4) 2.86% 2.83% 3.02%
Average interest-earning assets to average interest-bearing liabilities
126.98% 126.86% 129.13%
(1) On a fully-tax equivalent basis.
(2) Net interest rate spread represents the difference between the yield on average interest-earning assets and the cost of average interest-bearing liabilities.
(3) Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities.
(4) Net interest margin represents tax-equivalent net interest income divided by average total interest-earning assets.


First Connecticut Bancorp, Inc.
Consolidated Average Balances, Yields and Rates (Unaudited)
For The Six Months Ended June 30,
2015 2014
Average
Balance
Interest and
Dividends (1)
Yield/
Cost
Average
Balance
Interest and
Dividends (1)
Yield/
Cost
(Dollars in thousands)
Interest-earning assets:
Loans$ 2,204,867 $ 39,322 3.60% $ 1,873,082 $ 34,439 3.71%
Securities 187,385 872 0.94% 163,980 657 0.81%
Federal Home Loan Bank of Boston stock 20,049 165 1.66% 13,944 87 1.26%
Federal funds and other earning assets 11,206 11 0.20% 3,580 6 0.34%
Total interest-earning assets 2,423,507 40,370 3.36% 2,054,586 35,189 3.45%
Noninterest-earning assets 117,203 104,727
Total assets $ 2,540,710 $ 2,159,313
Interest-bearing liabilities:
NOW accounts$ 452,227 $ 631 0.28% $ 342,458 $ 382 0.22%
Money market 458,094 1,768 0.78% 411,983 1,438 0.70%
Savings accounts 213,163 114 0.11% 198,710 97 0.10%
Certificates of deposit 380,291 1,836 0.97% 335,836 1,488 0.89%
Total interest-bearing deposits 1,503,775 4,349 0.58% 1,288,987 3,405 0.53%
Federal Home Loan Bank of Boston Advances 335,607 1,555 0.93% 220,968 687 0.63%
Repurchase agreement borrowings 14,793 255 3.48% 21,000 356 3.42%
Repurchase liabilities 55,257 63 0.23% 57,151 72 0.25%
Total interest-bearing liabilities 1,909,432 6,222 0.66% 1,588,106 4,520 0.57%
Noninterest-bearing deposits 339,911 301,557
Other noninterest-bearing liabilities 52,464 36,758
Total liabilities 2,301,807 1,926,421
Stockholders' equity 238,903 232,892
Total liabilities and stockholders' equity$ 2,540,710 $ 2,159,313
Tax-equivalent net interest income $ 34,148 $ 30,669
Less: tax-equivalent adjustment (674) (355)
Net interest income $ 33,474 $ 30,314
Net interest rate spread (2) 2.70% 2.88%
Net interest-earning assets (3) $ 514,075 $ 466,480
Net interest margin (4) 2.84% 3.01%
Average interest-earning assets to average interest-bearing liabilities
126.92% 129.37%
(1) On a fully-tax equivalent basis.
(2) Net interest rate spread represents the difference between the yield on average interest-earning assets and the cost of average interest-bearing liabilities.
(3) Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities.
(4) Net interest margin represents tax-equivalent 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 June 30, 2015, March 31, 2015, December 31, 2014,
September 30, 2014 and June 30, 2014. 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
June 30, March 31, December 31, September 30, June 30,
(Dollars in thousands, except per share data) 2015 2015 2014 2014 2014
Net Income$ 3,472 $ 2,511 $ 3,147 $ 2,506 $ 2,190
Adjustments:
Plus: Accelerated vesting of stock compensation 258 140 - - -
Plus: Employee severance - 93 - - -
Less: Prepayment penalty fees (35) - - - (185)
Less: Non-recurring payment related to a loan participation - - (250) - -
Less: Net gain on sales of investments (1,250) (273) - - -
Total core adjustments before taxes (1,027) (40) (250) - (185)
Tax benefit on core adjustments 359 14 88 - 63
Tax rate adjustment (1) - - (441) - -
Total core adjustments after taxes (668) (26) (603) - (122)
Total core net income$ 2,804 $ 2,485 $ 2,544 $ 2,506 $ 2,068
Total net interest income$ 17,099 $ 16,375 $ 16,395 $ 15,985 $ 15,564
Less: Prepayment penalty fees (35) - - - (185)
Less: Non-recurring payment related to a loan participation - - (250) - -
Total core net interest income$ 17,064 $ 16,375 $ 16,145 $ 15,985 $ 15,379
Total noninterest income$ 4,074 $ 2,664 $ 2,498 $ 2,778 $ 2,066
Less: Net gain on sales of investments (1,250) (273) - - -
Total core noninterest income$ 2,824 $ 2,391 $ 2,498 $ 2,778 $ 2,066
Total noninterest expense$ 15,597 $ 14,937 $ 14,615 $ 14,219 $ 14,254
Less: Accelerated vesting of stock compensation (258) (140) - - -
Less: Employee severances - (93) - - -
Total core noninterest expense$ 15,339 $ 14,704 $ 14,615 $ 14,219 $ 14,254
Core earnings per common share, diluted$ 0.19 $ 0.16 $ 0.17 $ 0.17 $ 0.14
Core return on average assets (annualized) 0.44% 0.40% 0.42% 0.43% 0.38%
Core return on average equity (annualized) 4.66% 4.19% 4.29% 4.27% 3.56%
Efficiency ratio (2) 77.13% 78.35% 77.70% 75.78% 80.85%
Tangible book value (3) $ 15.01 $ 14.82 $ 14.64 $ 14.56 $ 14.39
(1) Represents the tax benefit derived from adjusting the tax rate on the Company's deferred tax assets from 34% to 35%. The Company's taxable income placed it in the 35% corporate tax bracket.
(2) Represents core noninterest expense divided by the sum of core net interest income and core noninterest income.
(3) 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.

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.