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Fox Chase Bancorp, Inc. Reports Increased Earnings for the Three and Six Months Ended June 30, 2015

HATBORO, Pa., July 29, 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 $3.2 million, or $0.28 per diluted share, and $5.4 million, or $0.48 per diluted share, for the three and six months ended June 30, 2015, compared to net income of $2.3 million, or $0.20 per diluted share, and $4.3 million, or $0.37 per diluted share, for the three and six months ended June 30, 2014, respectively.

Commenting on performance for the quarter, Thomas M. Petro, President and CEO said, “We are pleased with the impressive earnings growth for the three and six months ended June 30, 2015. We continue to build our commercial bank balance sheet as commercial loans increased to 84% of total loans, average commercial loan growth was 10.4% and our business fundamentals remain strong. The current quarter results were positively impacted by $840,000 (pre-tax) of recoveries on previously charged-off loans. The outsourced data processing systems conversion, which will provide the Company the ability to be more responsive to commercial customers, deliver innovative services and provide increased productivity, is expected to be completed in the fourth quarter of 2015. The pre-tax expenses related to this initiative were $248,000 in the second quarter of 2015 and $478,000 for the first half of 2015. Total expense related to this initiative is estimated to be approximately $1.1 million to $1.3 million for 2015.”

Highlights for the three and six months ended June 30, 2015 included:

  • Total average assets were $1.10 billion for the six months ended June 30, 2015 compared to $1.09 billion for the six months ended June 30, 2014. Total average commercial loans increased by $54.4 million, or 9.6%, to $623.0 million for the six months ended June 30, 2015, compared to $568.6 million for the six months ended June 30, 2014. Additionally, average commercial loans increased by $15.1 million, or 2.5%, to $630.6 million for the three months ended June 30, 2015, compared to $615.5 million for the three months ended March 31, 2015.
  • Assets were $1.09 billion at June 30, 2015 as compared to $1.09 billion at December 31, 2014 and $1.11 billion at June 30, 2014. Total commercial loans increased by $17.4 million, or 2.8% to $624.9 million at June 30, 2015 compared to $607.5 million at December 31, 2014. As anticipated, total commercial loans decreased by $17.6 million, or 2.7%, to $624.9 million at June 30, 2015 compared to $642.5 million at March 31, 2015. This reduction was due to seasonal line usage and expected payoffs.
  • Return on average assets was 1.15% and 0.99% for the three and six months ended June 30, 2015, respectively, compared to 0.85% and 0.78% for the three and six months ended June 30, 2014, respectively.
  • Net interest income increased $583,000, or 3.5%, to $17.3 million for the six months ended June 30, 2015, compared to $16.7 million for the six months ended June 30, 2014 and increased $228,000, or 2.7%, to $8.7 million for the three months ended June 30, 2015, compared to $8.4 million for the three months ended June 30, 2014. The net interest margin was 3.24% for the three months ended June 30, 2015, compared to 3.29% for the three months ended March 31, 2015 and 3.20% for the three months ended June 30, 2014. During the three months ended June 30, 2015, the Company received $130,000 in prepayment fees, which increased net interest margin by five basis points. During the three months ended March 31, 2015, the Company received a $254,000 special dividend from the FHLB of Pittsburgh, which increased the net interest margin by ten basis points.
  • The Company recorded a credit to the provision for loan losses of $1.3 million during the three months ended June 30, 2015, which was primarily due to $840,000 of recoveries on previously charged-off loans, a decrease in the loan portfolio of $25.0 million, of which $17.6 million was commercial loans, and loan pay downs on two classified loans. The ratio of the allowance for loan losses to total loans was 1.45% at June 30, 2015, compared to 1.46% at March 31, 2015 and December 31, 2014.
  • Nonperforming assets continued to decrease to $5.8 million, or 0.53% of total assets, at June 30, 2015 compared to $6.2 million, or 0.55% of total assets, at March 31, 2015 and $6.3 million, or 0.57% of total assets, at December 31, 2014. Delinquent loans totaled $660,000 at June 30, 2015, compared to $780,000 at March 31, 2015 and $258,000 at December 31, 2014. There was only one delinquent commercial loan totaling $49,000 at June 30, 2015.
  • Noninterest income increased $294,000 to $1.3 million for the six months ended June 30, 2015 compared to $973,000 for the six months ended June 30, 2014 primarily due to an increase of $117,000 in equity in earnings of affiliate due to higher mortgage volumes, an increase of $47,000 in service charges and other fee income due to increased loan fees.
  • Noninterest expense increased $376,000, or 3.3%, to 11.8 million for the six months ended June 30, 2015, compared to $11.4 million for the six months ended June 30, 2014. This increase was primarily due to the Company incurring $478,000 of system conversion costs offset by a decrease of $301,000 in assets acquired through foreclosure expense. System conversion costs for the six months ended June 30, 2015 are captured in the following financial statement categories: Salary, benefits and other compensation ($70,000), data processing costs ($247,000), professional fees ($147,000) and other ($14,000).
  • Income tax provision for the six months ended June 30, 2015 includes the reversal of an $182,000 valuation allowance on certain state deferred tax assets, which occurred during the three months ended March 31, 2015. The effective income tax rate for the six months ended June 30, 2015 was 28.5%. Excluding this reversal, the effective income tax rate for the six months ended June 30, 2015 was 30.9% compared to 31.1% for the six months ended June 30, 2014.


The Company also announced that its Board of Directors declared a cash dividend of $0.14 per outstanding share of common stock. The dividend will be paid on or about August 27, 2015 to stockholders of record as of the close of business on August 13, 2015. Finally, on July 29, 2015, the Board of Directors approved an additional 5% stock repurchase plan (the “July 2015 Plan”). Subject to market conditions and other factors, repurchases related to the July 2015 Plan will begin subsequent to the completion of repurchases under the Company’s existing repurchase plan, which was approved in July 2014. During the three months ended June 30, 2015, the Company repurchased 199,329 shares of treasury stock and has approximately 258,000 shares remaining in its’ approved repurchase plan.

Fox Chase Bancorp, Inc. will host a conference call to discuss second quarter 2015 results on Thursday, July 30, 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 September 11, 2015 by dialing (877) 344-7529; use Conference ID: 10067181. Participants may preregister at http://dpregister.com/10067181.

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
June 30,
Six Months Ended
June 30,
2015 2014 2015 2014
(Unaudited)
INTEREST INCOME
Interest and fees on loans$ 8,391 $ 8,130 $ 16,530 $ 16,240
Interest and dividends on investment securities 1,696 1,947 3,678 3,895
Other interest income 3 1 6 1
Total Interest Income 10,090 10,078 20,214 20,136
INTEREST EXPENSE
Deposits 728 797 1,443 1,695
Short-term borrowings 22 30 54 55
Federal Home Loan Bank advances 523 576 1,062 1,146
Other borrowed funds 164 250 330 498
Total Interest Expense 1,437 1,653 2,889 3,394
Net Interest Income 8,653 8,425 17,325 16,742
(Credit) provision for loan losses (1,267) 100 (795) 100
Net Interest Income after Provision for Loan Losses 9,920 8,325 18,120 16,642
NONINTEREST INCOME
Service charges and other fee income 439 424 823 776
Net loss on sale of assets acquired through foreclosure (15) (121) (15) (121)
Income on bank-owned life insurance 122 120 242 237
Equity in earnings of affiliate 111 67 151 34
Other 39 24 66 47
Total Noninterest Income 696 514 1,267 973
NONINTEREST EXPENSE
Salaries, benefits and other compensation 3,943 3,519 7,662 7,160
Occupancy expense 420 418 897 914
Furniture and equipment expense 99 96 182 207
Data processing costs 502 377 1,075 762
Professional fees 414 337 777 815
Marketing expense 57 61 98 102
FDIC premiums 141 150 260 315
Assets acquired through foreclosure expense 62 72 92 393
Other 385 389 745 744
Total Noninterest Expense 6,023 5,419 11,788 11,412
Income Before Income Taxes 4,593 3,420 7,599 6,203
Income tax provision 1,437 1,105 2,164 1,932
Net Income $ 3,156 $ 2,315 $ 5,435 $ 4,271
Earnings per share:
Basic$ 0.29 $ 0.21 $ 0.49 $ 0.38
Diluted$ 0.28 $ 0.20 $ 0.48 $ 0.37


CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Dollars in Thousands, Except Share Data)

June 30,
2015
December 31,
2014
(Unaudited) (Audited)
ASSETS
Cash and due from banks$ 1,795 $ 2,763
Interest-earning demand deposits in other banks 3,557 14,450
Total cash and cash equivalents 5,352 17,213
Investment securities available-for-sale 139,381 134,037
Investment securities held-to-maturity (fair value of $162,182 at
June 30, 2015 and $170,854 at December 31, 2014) 162,995 170,172
Loans, net of allowance for loan losses of $10,736
at June 30, 2015 and $10,730 at December 31, 2014 729,217 724,326
Federal Home Loan Bank stock, at cost 6,786 6,015
Bank-owned life insurance 15,269 15,027
Premises and equipment, net 9,269 9,418
Assets acquired through foreclosure 2,819 2,814
Real estate held for investment 1,620 1,620
Accrued interest receivable 3,118 3,147
Mortgage servicing rights, net 102 111
Deferred tax asset, net 4,536 4,561
Other assets 9,506 6,155
Total Assets$ 1,089,970 $ 1,094,616
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Deposits$ 715,630 $ 711,909
Short-term borrowings 64,800 50,000
Federal Home Loan Bank advances 100,000 120,000
Other borrowed funds 30,000 30,000
Advances from borrowers for taxes and insurance 1,592 1,447
Accrued interest payable 269 311
Accrued expenses and other liabilities 3,866 5,038
Total Liabilities 916,157 918,705
STOCKHOLDERS' EQUITY
Preferred stock ($.01 par value; 1,000,000 shares authorized,
none issued and outstanding at June 30, 2015 and December 31, 2014) - -
Common stock ($.01 par value; 60,000,000 shares authorized,
11,567,540 shares outstanding at June 30, 2015
and 11,802,791 shares outstanding at December 31, 2014) 147 147
Additional paid-in capital 139,837 139,177
Treasury stock, at cost (3,121,701 shares at June 30, 2015 and
2,852,572 at December 31, 2014) (44,135) (39,698)
Common stock acquired by benefit plans (7,201) (8,056)
Retained earnings 85,264 84,225
Accumulated other comprehensive income, net (99) 116
Total Stockholders' Equity 173,813 175,911
Total Liabilities and Stockholders' Equity$ 1,089,970 $ 1,094,616


SELECTED CONSOLIDATED FINANCIAL AND OTHER DATA OF THE COMPANY (UNAUDITED)
(Dollars in Thousands, Except Per Share Data)

June 30,
2015
March 31,
2015
December 31,
2014
June 30,
2014
CAPITAL RATIOS:
Stockholders’ equity (to total assets) (1) 15.95% 15.59% 16.07% 16.13%
Common equity tier 1 capital ratio (to risk-weighted assets) (2) 16.86 16.28 N/A N/A
Tier 1 leverage ratio (to adjusted average assets) (2) 13.30 13.04 13.99 13.18
Tier 1 capital ratio (to risk-weighted assets) (2) 16.86 16.28 18.97 18.59
Total capital ratio (to risk-weighted assets) (2) 17.91 17.34 20.02 19.64
ASSET QUALITY INDICATORS:
Nonperforming Assets:
Nonaccruing loans$ 3,002 $ 3,374 $ 3,454 $ 4,144
Accruing loans past due 90 days or more - - - -
Total nonperforming loans$ 3,002 $ 3,374 $ 3,454 $ 4,144
Assets acquired through foreclosure 2,819 2,804 2,814 2,017
Total nonperforming assets$ 5,821 $ 6,178 $ 6,268 $ 6,161
Ratio of nonperforming loans to total loans 0.41% 0.44% 0.47% 0.56%
Ratio of nonperforming assets to total assets 0.53 0.55 0.57 0.56
Ratio of allowance for loan losses to total loans 1.45 1.46 1.46 1.57
Ratio of allowance for loan losses to nonperforming loans 357.6 331.3 310.7 279.3
Troubled Debt Restructurings:
Nonaccruing troubled debt restructurings (3)$ 1,331 $ 1,349 $ 1,401 $ 282
Accruing troubled debt restructurings 5,892 4,817 3,624 5,324
Total troubled debt restructurings$ 7,223 $ 6,166 $ 5,025 $ 5,606
Past Due Loans:
30 - 59 days$ 639 $ 653 $ 113 $ 526
60 - 89 days 21 127 145 10
Total$ 660 $ 780 $ 258 $ 536
(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
June 30,
2015
March 31,
2015
December 31,
2014
June 30,
2014
PERFORMANCE RATIOS (4):
Return on average assets 1.15% 0.83% 0.79% 0.85%
Return on average equity 7.22 5.18 4.76 5.25
Net interest margin 3.24 3.29 3.18 3.20
Efficiency ratio (5) 64.3 62.2 63.3 59.8
OTHER:
Average commercial loans $ 630,577 $ 615,474 $ 571,875 $ 571,032
Tangible book value per share - Core (6) $ 15.03 $ 14.88 $ 14.89 $ 14.73
Tangible book value per share (7) $ 15.03 $ 14.94 $ 14.90 $ 14.71
Employees (full-time equivalents) 136 136 138 140
At or for the Six Months
Ended
June 30,
2015
June 30,
2014
PERFORMANCE RATIOS (4):
Average commercial loans $ 623,026 $ 568,591
Return on average assets 0.99% 0.78%
Return on average equity 6.20 4.85
Net interest margin 3.26 3.19
Efficiency ratio (5) 63.2 62.4
(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 (loss) income, net (($99,000) at June 30, 2015, $666,000 at March 31, 2015, $116,000 at December 31, 2014 and ($252,000) at June 30, 2014), 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 June 30,
2015 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$ 10,285 $ 3 0.13% $ 6,241 $ 1 0.05%
Investment securities 309,583 1,696 2.19% 332,940 1,947 2.34%
Loans (1) 749,997 8,391 4.49% 714,243 8,130 4.56%
Allowance for loan losses (11,919) (11,553)
Net loans 738,078 8,391 702,690 8,130
Total interest-earning assets 1,057,946 10,090 3.82% 1,041,871 10,078 3.88%
Noninterest-earning assets 42,400 45,628
Total assets$ 1,100,346 $ 1,087,499
Liabilities and equity:
Interest-bearing liabilities:
Interest-bearing deposits$ 585,892 $ 728 0.50% $ 560,578 $ 797 0.57%
Borrowings 156,130 709 1.82% 220,770 856 1.56%
Total interest-bearing liabilities 742,022 1,437 0.78% 781,348 1,653 0.85%
Noninterest-bearing deposits 177,223 122,395
Other noninterest-bearing liabilities 6,353 7,284
Total liabilities 925,598 911,027
Stockholders' equity 174,201 177,895
Accumulated comprehensive income 547 (1,423)
Total stockholders' equity 174,748 176,472
Total liabilities and stockholders' equity$ 1,100,346 $ 1,087,499
Net interest income $ 8,653 $ 8,425
Interest rate spread 3.04% 3.03%
Net interest margin 3.24% 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)

Three Months Ended
June 30, 2015 March 31, 2015
Interest Interest
Average and Yield/ Average and Yield/
Balance Dividends Cost (2) Balance Dividends Cost (2)
Assets:
Interest-earning assets:
Interest-earning demand deposits$ 10,285 $ 3 0.13% $ 11,550 $ 3 0.10%
Investment securities 309,583 1,696 2.19% 311,049 1,982 2.55%
Loans (1) 749,997 8,391 4.49% 742,005 8,139 4.44%
Allowance for loan losses (11,919) (10,777)
Net loans 738,078 8,391 731,228 8,139
Total interest-earning assets 1,057,946 10,090 3.82% 1,053,827 10,124 3.88%
Noninterest-earning assets 42,400 42,702
Total assets$ 1,100,346 $ 1,096,529
Liabilities and equity:
Interest-bearing liabilities:
Interest-bearing deposits$ 585,892 $ 728 0.50% $ 546,465 $ 715 0.53%
Borrowings 156,130 709 1.82% 190,129 737 1.57%
Total interest-bearing liabilities 742,022 1,437 0.78% 736,594 1,452 0.80%
Noninterest-bearing deposits 177,223 176,389
Other noninterest-bearing liabilities 6,353 7,442
Total liabilities 925,598 920,425
Stockholders' equity 174,201 175,552
Accumulated comprehensive income 547 552
Total stockholders' equity 174,748 176,104
Total liabilities and stockholders' equity$ 1,100,346 $ 1,096,529
Net interest income $ 8,653 $ 8,672
Interest rate spread 3.04% 3.08%
Net interest margin 3.24% 3.29%
(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)

Six Months Ended June 30,
2015 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$ 10,917 $ 6 0.11% $ 6,783 $ 1 0.04%
Investment securities 310,316 3,678 2.37% 334,228 3,895 2.33%
Loans (1) 746,001 16,530 4.46% 714,613 16,240 4.57%
Allowance for loan losses (11,348) (11,578)
Net loans 734,653 16,530 703,035 16,240
Total interest-earning assets 1,055,886 20,214 3.85% 1,044,046 20,136 3.88%
Noninterest-earning assets 42,551 46,043
Total assets$ 1,098,437 $ 1,090,089
Liabilities and equity:
Interest-bearing liabilities:
Interest-bearing deposits$ 566,178 $ 1,443 0.51% $ 566,963 $ 1,695 0.60%
Borrowings 173,130 1,446 1.68% 218,343 1,699 1.57%
Total interest-bearing liabilities 739,308 2,889 0.79% 785,306 3,394 0.87%
Noninterest-bearing deposits 176,806 120,801
Other noninterest-bearing liabilities 6,897 7,952
Total liabilities 923,011 914,059
Stockholders' equity 174,877 178,081
Accumulated comprehensive income 549 (2,051)
Total stockholders' equity 175,426 176,030
Total liabilities and stockholders' equity$ 1,098,437 $ 1,090,089
Net interest income $ 17,325 $ 16,742
Interest rate spread 3.06% 3.01%
Net interest margin 3.26% 3.19%
(1) Nonperforming loans are included in average balance computation.
(2) Yields are not presented on a tax-equivalent basis.


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

Source:Fox Chase Bancorp, Inc.