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First Connecticut Bancorp, Inc. Reports Third Quarter 2015 Earnings of $0.28 Earnings Per Share

FARMINGTON, Conn., Oct. 21, 2015 (GLOBE NEWSWIRE) -- First Connecticut Bancorp, Inc. (the “Company”) (NASDAQ:FBNK), the holding company for Farmington Bank (the “Bank”), reported net income of $4.2 million, or $0.28 diluted earnings per share for the quarter ended September 30, 2015 compared to net income of $2.5 million, or $0.17 diluted earnings per share for the quarter ended September 30, 2014.

Net income on a core earnings basis was $3.9 million, or $0.25 diluted core earnings per share for the quarter ended September 30, 2015 compared to $2.5 million, or $0.17 diluted core earnings per share for the quarter ended September 30, 2014. Core earnings exclude non-recurring items.

“The impact of our organic growth strategy and commitment to improve earnings and consequently grow tangible book value and earnings per share is evident in our results this quarter” stated John J. Patrick Jr., First Connecticut Bancorp’s Chairman, President and CEO.

“We opened our 23rd branch office in West Springfield, MA on October 6, 2015 and anticipate opening our 24th branch office in East Longmeadow, MA in November. We have received regulatory approval to open two additional branch offices in Manchester, CT and Vernon, CT in the first half of 2016.”

Financial Highlights

  • Net interest income increased $573,000 to $17.7 million in the third quarter of 2015 compared to the linked quarter and increased $1.7 million or 11% compared to the third quarter of 2014.
  • Net gain on loans sold increased $581,000 to $993,000 in the third quarter of 2015 compared to the linked quarter primarily due to selling $83.2 million of fixed rate residential portfolio loans to reposition the balance sheet and maintain our asset sensitive interest rate position.
  • Strong organic loan growth continued during the quarter as total loans increased $50.4 million to $2.3 billion at September 30, 2015 and increased $287.6 million or 14% from a year ago. Loan growth during the quarter was primarily driven by an $82.0 million increase in the commercial loan portfolio offset by a $31.5 million decrease in the residential loan portfolio.
  • Overall deposits increased $95.3 million to $2.0 billion in the third quarter of 2015 compared to the linked quarter and increased $245.4 million or 14% from a year ago.
  • Checking accounts grew by 3.0% or 1,432 net new accounts in the third quarter of 2015 and by 11.8% or 5,182 net new accounts from a year ago.
  • Core noninterest expense to average assets was 2.26% in the third quarter of 2015 compared to 2.39% in the linked quarter and 2.46% in the third quarter of 2014.
  • Tangible book value per share is $15.30 compared to $15.01 on a linked quarter basis and $14.56 at September 30, 2014.
  • Asset quality decreased slightly compared to the linked quarter due to one commercial loan relationship but improved year over year. Loan delinquencies 30 days and greater represented 0.67% of total loans at September 30, 2015 compared to 0.58% at June 30, 2015 and 0.78% at September 30, 2014. Non-accrual loans represented 0.71% of total loans compared to 0.57% of total loans on a linked quarter basis and 0.76% of total loans at September 30, 2014.
  • The allowance for loan losses represented 0.86% of total loans at September 30, 2015 and June 30, 2015 and 0.91% at September 30, 2014.
  • The Company paid a cash dividend of $0.06 per share on September 14, 2015, an increase of $0.01 compared to the linked quarter.

Third quarter 2015 compared with second quarter 2015

Net interest income

  • Net interest income increased $573,000 to $17.7 million in the third quarter of 2015 compared to the linked quarter due primarily to a $117.8 million increase in the average net loan balance offset by a $357,000 increase in interest expense.
  • Net interest margin decreased 7 basis points to 2.79% in the third quarter of 2015 compared to 2.86% in the linked quarter due to a 5 basis point decrease in the loan yield and a 2 basis point increase in the cost of interest-bearing liabilities. The decrease in the loan yield was primarily due to lower yields on new loans originated as a result of a low interest rate environment during the quarter.
  • The cost of interest-bearing liabilities increased 2 basis points to 66 basis points in the third quarter of 2015 compared to 64 basis points in the linked quarter primarily due to money market and certificate of deposit promotions.

Provision for loan losses

  • Provision for loan losses was $386,000 for the third quarter of 2015 compared to $663,000 for the linked quarter.
  • Net charge-offs (recoveries) in the quarter were ($43,000) or (0.01%) to average loans (annualized) compared to $314,000 or 0.06% to average loans (annualized) in the linked quarter.
  • The allowance for loan losses represented 0.86% of total loans at September 30, 2015 and June 30, 2015.

Noninterest income

  • Total noninterest income decreased $833,000 to $3.2 million in the third quarter of 2015 compared to the linked quarter primarily due to no gain on sale of investments during the quarter, a $219,000 decrease in other noninterest income offset by a $581,000 increase in net gain on loans sold.
  • Gain on sale of investments was $1.3 million in the second quarter of 2015 due to the sale of a trust preferred security.
  • Net gain on loans sold increased $581,000 primarily due to selling $83.2 million of fixed rate residential portfolio loans to reposition the balance sheet and maintain our asset sensitive interest rate position.
  • Other income decreased $219,000 to $309,000 in the third quarter of 2015 compared to $528,000 in the linked quarter primarily due to a $95,000 decrease in swap fees and a decrease in mortgage banking derivatives income.

Noninterest expense

  • Noninterest expense decreased $879,000 in the third quarter of 2015 to $14.7 million compared to the linked quarter primarily due to a $970,000 decrease in other operating expenses offset by a $267,000 increase in salaries and employee benefits. Noninterest expense on a core basis remained flat at $15.3 million in the third quarter of 2015 compared to the linked quarter.
  • Other operating expenses decreased $970,000 on a linked quarter basis primarily due to a $557,000 gain on foreclosed real estate in the third quarter and $258,000 in non-recurring stock compensation costs in the second quarter related to the retirement of two directors and a $149,000 loss on a credit sharing arrangement on a sold loan incurred in the second quarter.

Income tax expense

  • Income tax expense was $1.6 million in the third quarter of 2015 compared to $1.4 million in the linked quarter. The increase in income tax expense in the third quarter was primarily due to an $896,000 increase in income before taxes.

Third quarter 2015 compared with third quarter 2014

Net interest income

  • Net interest income increased $1.7 million to $17.7 million in the third quarter of 2015 compared to the prior year quarter primarily due to a $362.3 million increase in the average net loan balance offset by an $879,000 increase in interest expense.
  • Net interest margin decreased to 2.79% in the third quarter of 2015 compared to 2.91% in the third quarter of 2014 primarily due to a 5 basis point decrease in the yield on interest-earning assets and a 7 basis point increase in the cost of interest-bearing liabilities.
  • The yield on interest-earning assets decreased to 3.31% in the third quarter of 2015 compared to 3.36% in the prior year quarter primarily due to a 12 basis point decrease in the yield on average loans offset by increases in the investments yields.
  • The cost of interest-bearing liabilities increased to 66 basis points in the third quarter of 2015 compared to 59 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 $386,000 for the third quarter of 2015 compared to $1.0 million for the prior year quarter.
  • Net charge-offs (recoveries) in the quarter were ($43,000) or (0.01%) to average loans (annualized) compared to $397,000 or 0.08% to average loans (annualized) in the prior year quarter.
  • The allowance for loan losses represented 0.86% of total loans at September 30, 2015 compared to 0.91% at September 30, 2014.

Noninterest income

  • Total noninterest income increased $463,000 to $3.2 million in the third quarter of 2015 compared to the prior year quarter primarily due to a $360,000 increase in net gain on loans sold, a $77,000 increase in fees for customer services and a $65,000 increase in bank owned life insurance income.

Noninterest expense

  • Noninterest expense on a core basis increased $1.1 million in the third quarter of 2015 compared to the prior year quarter primarily due to a $709,000 increase in salaries and employee benefits and a $295,000 increase in other operating expenses.
  • Salaries and employee benefits increased $709,000 primarily due to costs associated with our expansion into western Massachusetts, growth driven staff increases in our compliance areas and a general increase to maintain the Bank’s growth.
  • Other operating expenses increased $295,000 due to a general increase in other costs to support the Bank’s operations.

Income tax expense

  • Income tax expense was $1.6 million in the third quarter of 2015 compared to $997,000 in the prior year quarter. The increase in income tax expense in the third quarter was primarily due to a $2.3 million increase in income before taxes.

September 30, 2015 compared to September 30, 2014

Financial Condition

  • Total assets increased $312.8 million or 13% at September 30, 2015 to $2.7 billion compared to $2.4 billion at September 30, 2014, largely reflecting an increase in loans.
  • Our investment portfolio totaled $196.9 million at September 30, 2015 compared to $207.1 million at September 30, 2014, a decrease of $10.3 million.
  • Net loans increased $286.5 million at September 30, 2015 to $2.3 billion compared to $2.0 billion at September 30, 2014 due to our continued focus on commercial and residential lending.
  • Deposits increased $245.4 million at September 30, 2015 to $2.0 billion compared to $1.7 billion at September 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 second quarter of 2015 with balances totaling $55.5 million at September 30, 2015.
  • Federal Home Loan Bank of Boston advances increased $68.9 million to $373.6 million at September 30, 2015 compared to $304.7 million at September 30, 2014. Advances were used to support loan and securities growth during the quarter.

Asset Quality

  • Asset quality decreased slightly compared to the linked quarter due to one commercial loan relationship totaling $3.5 million at September 30, 2015 was 30 days delinquent and on nonaccrual due to a Chapter 11 Bankruptcy filing.
  • At September 30, 2015, the allowance for loan losses represented 0.86% of total loans and 120.05% of non-accrual loans, compared to 0.86% of total loans and 150.94% of non-accrual loans at June 30, 2015 and 0.91% of total loans and 119.91% of non-accrual loans at September 30, 2014.
  • Loan delinquencies 30 days and greater represented to 0.67% of total loans at September 30, 2015 compared to 0.58% of total loans at June 30, 2015 and 0.78% of total loans at September 30, 2014.
  • Non-accrual loans represented 0.71% of total loans at September 30, 2015 compared to 0.57% of total loans at June 30, 2015 and 0.76% of total loans at September 30, 2014.
  • Net charge-offs (recoveries) in the quarter were ($43,000) or (0.01%) to average loans (annualized) compared to $314,000 or 0.06% to average loans (annualized) in the linked quarter and $397,000 or 0.08% 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 12.72% at September 30, 2015.
  • Tangible book value per share was $15.30 compared to $15.01 on a linked quarter basis and $14.56 at September 30, 2014.
  • During the third quarter of 2015, the Company repurchased 7,589 shares of common stock at an average price per share of $15.76 at a total cost of $120,000. Repurchased shares are held as treasury stock and will be available for general corporate purposes. The Company has 772,745 shares remaining to repurchase at September 30, 2015 from prior regulatory approval.
  • At September 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 23 branch locations throughout central Connecticut and western Massachusetts, offering commercial and residential lending as well as wealth management services. 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 22, 2015 at 10:30am 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 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
September 30, June 30, March 31, December 31, September 30,
(Dollars in thousands, except per share data) 2015 2015 2015 2014 2014
Selected Financial Condition Data:
Total assets$ 2,708,454 $ 2,626,217 $ 2,549,074 $ 2,485,360 $ 2,395,674
Cash and cash equivalents 47,447 42,992 44,847 42,863 43,914
Securities held-to-maturity, at amortized cost 25,486 34,366 21,006 16,224 12,439
Securities available-for-sale, at fair value 171,390 143,799 173,829 188,041 194,706
Federal Home Loan Bank of Boston stock, at cost 23,038 21,496 19,785 19,785 17,724
Loans, net 2,318,257 2,268,385 2,186,937 2,119,917 2,031,780
Deposits 1,973,355 1,878,040 1,887,954 1,733,041 1,727,994
Federal Home Loan Bank of Boston advances 373,600 400,700 308,700 401,700 304,700
Total stockholders' equity 243,195 239,082 237,709 234,563 233,646
Allowance for loan losses 20,010 19,581 19,232 18,960 18,556
Non-accrual loans 16,668 12,973 14,086 15,468 15,475
Impaired loans 42,662 39,975 42,130 43,452 39,579
Loan delinquencies 30 days and greater 15,598 13,244 14,193 16,079 15,922
Selected Operating Data:
Interest income$ 21,094 $ 20,164 $ 19,532 $ 19,412 $ 18,528
Interest expense 3,422 3,065 3,157 3,017 2,543
Net interest income 17,672 17,099 16,375 16,395 15,985
Provision for loan losses 386 663 615 632 1,041
Net interest income after provision for loan losses 17,286 16,436 15,760 15,763 14,944
Noninterest income 3,241 4,074 2,664 2,498 2,778
Noninterest expense 14,718 15,597 14,937 14,615 14,219
Income before income taxes 5,809 4,913 3,487 3,646 3,503
Income tax expense 1,594 1,441 976 499 997
Net income$ 4,215 $ 3,472 $ 2,511 $ 3,147 $ 2,506
Performance Ratios (annualized):
Return on average assets 0.62% 0.54% 0.40% 0.52% 0.43%
Return on average equity 6.92% 5.77% 4.24% 5.31% 4.27%
Net interest rate spread (1) 2.65% 2.72% 2.68% 2.68% 2.78%
Net interest rate margin (2) 2.79% 2.86% 2.83% 2.83% 2.91%
Non-interest expense to average assets (3) 2.26% 2.39% 2.34% 2.39% 2.46%
Efficiency ratio (4) 73.04% 77.13% 78.35% 77.70% 75.78%
Average interest-earning assets to average
interest-bearing liabilities 126.44% 126.98% 125.86% 127.89% 128.17%
Loans to deposits 118.49% 121.83% 116.86% 123.42% 118.65%
Asset Quality Ratios:
Allowance for loan losses as a percent of total loans 0.86% 0.86% 0.87% 0.89% 0.91%
Allowance for loan losses as a percent of
non-accrual loans 120.05% 150.94% 136.53% 122.58% 119.91%
Net charge-offs (recoveries) to average loans (annualized) (0.01%) 0.06% 0.06% 0.04% 0.08%
Non-accrual loans as a percent of total loans 0.71% 0.57% 0.64% 0.72% 0.76%
Non-accrual loans as a percent of total assets 0.62% 0.49% 0.55% 0.62% 0.65%
Loan delinquencies 30 days and greater as a
percent of total loans 0.67% 0.58% 0.64% 0.75% 0.78%
Per Share Related Data:
Basic earnings per share$ 0.28 $ 0.23 $ 0.17 $ 0.21 $ 0.17
Diluted earnings per share$ 0.28 $ 0.23 $ 0.17 $ 0.21 $ 0.17
Dividends declared per share$ 0.06 $ 0.05 $ 0.05 $ 0.05 $ 0.05
Tangible book value (5)$ 15.30 $ 15.01 $ 14.82 $ 14.64 $ 14.56
Common stock shares outstanding 15,893,263 15,922,888 16,035,005 16,026,319 16,043,031
Weighted-average basic shares outstanding 14,632,951 14,694,472 14,722,112 14,695,490 14,613,115
Weighted-average diluted shares outstanding 14,887,461 14,839,454 14,850,597 14,836,032 14,710,880
(1) Represents the difference between the yield on average interest-earning assets and the cost of average interest-bearing liabilities.
(2) Represents tax-equivalent net interest income as a percent of average interest-earning assets.
(3) Represents core noninterest expense annualized divided by average assets. See "Reconciliation of Non-GAAP Financial Measures" table.
(4) 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.
(5) 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) 2015 2015 2015 2014 2014
Capital Ratios:
Equity to total assets at end of period 8.98% 9.10% 9.33% 9.44% 9.75%
Average equity to average assets 9.00% 9.36% 9.45% 9.71% 10.13%
Total Capital (to Risk Weighted Assets) 12.72%* 13.11% 13.44% 13.73% 14.12%
Tier I Capital (to Risk Weighted Assets) 11.76%* 12.12% 12.44% 12.70% 13.07%
Common Equity Tier I Capital 11.76%* 12.12% 12.44% n/a n/a
Tier I Leverage Capital (to Average Assets) 9.24%* 9.57% 9.72% 9.86% 10.25%
Total equity to total average assets 8.98% 9.29% 9.48% 9.61% 10.09%
* Estimated
Loans and Allowance for Loan Losses:
Real estate
Residential$ 851,784 $ 888,376 $ 850,819 $ 827,005 $ 789,166
Commercial 862,367 817,955 769,712 765,066 717,399
Construction 29,244 42,858 53,913 57,371 80,242
Installment 3,007 3,103 3,114 3,356 3,524
Commercial 410,704 359,537 352,085 309,708 289,708
Collateral 1,632 1,551 1,676 1,733 1,826
Home equity line of credit 174,579 169,507 169,969 169,768 163,608
Revolving credit 96 77 80 99 97
Resort 807 837 880 929 1,019
Total loans 2,334,220 2,283,801 2,202,248 2,135,035 2,046,589
Net deferred loan costs 4,047 4,165 3,921 3,842 3,747
Loans 2,338,267 2,287,966 2,206,169 2,138,877 2,050,336
Allowance for loan losses (20,010) (19,581) (19,232) (18,960) (18,556)
Loans, net$ 2,318,257 $ 2,268,385 $ 2,186,937 $ 2,119,917 $ 2,031,780
Deposits:
Noninterest-bearing demand deposits$ 359,757 $ 377,092 $ 337,211 $ 330,524 $ 323,499
Interest-bearing
NOW accounts 527,128 425,789 499,130 355,412 454,650
Money market 440,249 430,558 462,532 470,991 417,498
Savings accounts 211,170 220,154 214,083 210,892 200,501
Time deposits 435,051 424,447 374,998 365,222 331,846
Total interest-bearing deposits 1,613,598 1,500,948 1,550,743 1,402,517 1,404,495
Total deposits$ 1,973,355 $ 1,878,040 $ 1,887,954 $ 1,733,041 $ 1,727,994


First Connecticut Bancorp, Inc.
Consolidated Statements of Condition (Unaudited)
September 30, June 30, September 30,
2015 2015 2014
(Dollars in thousands)
Assets
Cash and due from banks$ 33,564 $ 35,595 $ 41,159
Interest bearing deposits with other institutions 13,883 7,397 2,755
Total cash and cash equivalents 47,447 42,992 43,914
Securities held-to-maturity, at amortized cost 25,486 34,366 12,439
Securities available-for-sale, at fair value 171,390 143,799 194,706
Loans held for sale 8,416 7,550 5,533
Loans (1) 2,338,267 2,287,966 2,050,336
Allowance for loan losses (20,010) (19,581) (18,556)
Loans, net 2,318,257 2,268,385 2,031,780
Premises and equipment, net 17,870 17,964 19,384
Federal Home Loan Bank of Boston stock, at cost 23,038 21,496 17,724
Accrued income receivable 6,305 6,425 5,331
Bank-owned life insurance 50,633 50,283 39,403
Deferred income taxes 15,935 16,450 14,529
Prepaid expenses and other assets 23,677 16,507 10,931
Total assets$ 2,708,454 $ 2,626,217 $ 2,395,674
Liabilities and Stockholders' Equity
Deposits
Interest-bearing$ 1,613,598 $ 1,500,948 $ 1,404,495
Noninterest-bearing 359,757 377,092 323,499
1,973,355 1,878,040 1,727,994
Federal Home Loan Bank of Boston advances 373,600 400,700 304,700
Repurchase agreement borrowings 10,500 10,500 21,000
Repurchase liabilities 58,084 56,041 73,855
Accrued expenses and other liabilities 49,720 41,854 34,479
Total liabilities 2,465,259 2,387,135 2,162,028
Stockholders' Equity
Common stock 181 181 181
Additional paid-in-capital 181,195 180,764 177,937
Unallocated common stock held by ESOP (11,893) (12,160) (12,949)
Treasury stock, at cost (30,411) (30,389) (28,585)
Retained earnings 111,274 108,014 101,089
Accumulated other comprehensive loss (7,151) (7,328) (4,027)
Total stockholders' equity 243,195 239,082 233,646
Total liabilities and stockholders' equity$ 2,708,454 $ 2,626,217 $ 2,395,674
(1) Loans include net deferred fees and unamortized premiums of $4.0 million, $4.2 million and $3.7 million at September 30, 2015,
June 30, 2015 and September 30, 2014, respectively.


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) 2015 2015 2014 2015 2014
Interest income
Interest and fees on loans
Mortgage $ 15,861 $ 15,331 $ 14,490 $ 46,250 $ 41,793
Other 4,594 4,264 3,608 12,853 10,389
Interest and dividends on investments
United States Government and agency obligations 401 385 258 1,109 665
Other bonds 13 35 57 66 196
Corporate stocks 217 145 109 493 307
Other interest income 8 4 6 19 12
Total interest income 21,094 20,164 18,528 60,790 53,362
Interest expense
Deposits 2,412 2,140 1,845 6,761 5,250
Interest on borrowed funds 890 804 479 2,445 1,166
Interest on repo borrowings 96 92 182 351 538
Interest on repurchase liabilities 24 29 37 87 109
Total interest expense 3,422 3,065 2,543 9,644 7,063
Net interest income 17,672 17,099 15,985 51,146 46,299
Provision for loan losses 386 663 1,041 1,664 1,956
Net interest income
after provision for loan losses 17,286 16,436 14,944 49,482 44,343
Noninterest income
Fees for customer services 1,536 1,500 1,459 4,409 3,967
Gain on sale of investments - 1,250 - 1,523 -
Net gain on loans sold 993 412 633 1,925 1,072
Brokerage and insurance fee income 54 60 47 163 140
Bank owned life insurance income 349 324 284 946 847
Other 309 528 355 1,013 580
Total noninterest income 3,241 4,074 2,778 9,979 6,606
Noninterest expense
Salaries and employee benefits 9,302 9,035 8,593 27,127 25,519
Occupancy expense 1,219 1,272 1,271 3,858 3,829
Furniture and equipment expense 1,034 1,077 1,093 3,147 3,217
FDIC assessment 413 402 361 1,227 1,010
Marketing 443 534 332 1,386 1,219
Other operating expenses 2,307 3,277 2,569 8,507 7,639
Total noninterest expense 14,718 15,597 14,219 45,252 42,433
Income before income taxes 5,809 4,913 3,503 14,209 8,516
Income tax expense 1,594 1,441 997 4,011 2,328
Net income$ 4,215 $ 3,472 $ 2,506 $ 10,198 $ 6,188
Earnings per share:
Basic $ 0.28 $ 0.23 $ 0.17 $ 0.68 $ 0.41
Diluted 0.28 0.23 0.17 0.67 0.41
Weighted average shares outstanding:
Basic 14,632,951 14,694,472 14,613,115 14,706,908 14,677,650
Diluted 14,887,461 14,839,454 14,710,880 14,883,362 14,778,961

First Connecticut Bancorp, Inc.
Consolidated Average Balances, Yields and Rates (Unaudited)
For The Three Months Ended
September 30, 2015 June 30, 2015 September 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$ 2,359,293 $ 20,937 3.52% $ 2,241,447 $ 19,949 3.57% $ 1,997,010 $ 18,303 3.64%
Securities 191,530 465 0.96% 178,780 478 1.07% 189,208 369 0.77%
Federal Home Loan Bank of Boston stock 22,883 166 2.88% 20,310 86 1.70% 17,724 55 1.23%
Federal funds and other earning assets 11,089 8 0.29% 10,032 5 0.20% 4,918 6 0.48%
Total interest-earning assets 2,584,795 21,576 3.31% 2,450,569 20,518 3.36% 2,208,860 18,733 3.36%
Noninterest-earning assets 122,438 121,820 106,705
Total assets $ 2,707,233 $ 2,572,389 $ 2,315,565
Interest-bearing liabilities:
NOW accounts$ 486,798 $ 357 0.29% $ 454,532 $ 310 0.27% $ 436,303 $ 313 0.28%
Money market 437,000 867 0.79% 435,749 798 0.73% 406,293 748 0.73%
Savings accounts 210,978 58 0.11% 217,651 57 0.11% 199,505 57 0.11%
Certificates of deposit 430,152 1,130 1.04% 392,941 975 1.00% 330,497 727 0.87%
Total interest-bearing deposits 1,564,928 2,412 0.61% 1,500,873 2,140 0.57% 1,372,598 1,845 0.53%
Federal Home Loan Bank of Boston Advances 411,236 890 0.86% 366,460 804 0.88% 270,250 479 0.70%
Repurchase agreement borrowings 10,500 96 3.63% 10,500 92 3.51% 21,000 182 3.44%
Repurchase liabilities 57,644 24 0.17% 52,043 29 0.22% 59,624 37 0.25%
Total interest-bearing liabilities 2,044,308 3,422 0.66% 1,929,876 3,065 0.64% 1,723,472 2,543 0.59%
Noninterest-bearing deposits 368,200 348,857 321,008
Other noninterest-bearing liabilities 51,089 52,831 36,481
Total liabilities 2,463,597 2,331,564 2,080,961
Stockholders' equity 243,636 240,825 234,604
Total liabilities and stockholders' equity$ 2,707,233 $ 2,572,389 $ 2,315,565
Tax-equivalent net interest income $ 18,154 $ 17,453 $ 16,190
Less: tax-equivalent adjustment (482) (354) (205)
Net interest income $ 17,672 $ 17,099 $ 15,985
Net interest rate spread (2) 2.65% 2.72% 2.78%
Net interest-earning assets (3) $ 540,487 $ 520,693 $ 485,388
Net interest margin (4) 2.79% 2.86% 2.91%
Average interest-earning assets to average interest-bearing liabilities
126.44% 126.98% 128.16%
(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 Nine Months Ended September 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$ 2,256,907 $ 60,259 3.57% $ 1,914,846 $ 52,742 3.68%
Securities 188,781 1,337 0.95% 172,482 1,026 0.80%
Federal Home Loan Bank of Boston stock 21,004 331 2.11% 15,218 142 1.25%
Federal funds and other earning assets 11,166 19 0.23% 3,913 12 0.41%
Total interest-earning assets 2,477,858 61,946 3.34% 2,106,459 53,922 3.42%
Noninterest-earning assets 118,969 105,511
Total assets $ 2,596,827 $ 2,211,970
Interest-bearing liabilities:
NOW accounts$ 463,878 $ 988 0.28% $ 374,084 $ 695 0.25%
Money market 450,985 2,635 0.78% 410,066 2,186 0.71%
Savings accounts 212,427 172 0.11% 198,978 154 0.10%
Certificates of deposit 397,094 2,966 1.00% 334,037 2,215 0.89%
Total interest-bearing deposits 1,524,384 6,761 0.59% 1,317,165 5,250 0.53%
Federal Home Loan Bank of Boston Advances 361,094 2,445 0.91% 237,576 1,166 0.66%
Repurchase agreement borrowings 13,346 351 3.52% 21,000 538 3.43%
Repurchase liabilities 56,061 87 0.21% 57,984 109 0.25%
Total interest-bearing liabilities 1,954,885 9,644 0.66% 1,633,725 7,063 0.58%
Noninterest-bearing deposits 349,444 308,112
Other noninterest-bearing liabilities 52,000 36,664
Total liabilities 2,356,329 1,978,501
Stockholders' equity 240,498 233,469
Total liabilities and stockholders' equity$ 2,596,827 $ 2,211,970
Tax-equivalent net interest income $ 52,302 $ 46,859
Less: tax-equivalent adjustment (1,156) (560)
Net interest income $ 51,146 $ 46,299
Net interest rate spread (2) 2.68% 2.84%
Net interest-earning assets (3) $ 522,973 $ 472,734
Net interest margin (4) 2.82% 2.97%
Average interest-earning assets to average interest-bearing liabilities
126.75% 128.94%
(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 September 30, 2015, June 30, 2015, March 31, 2015, December 31, 2014 and September 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
September 30, June 30, March 31, December 31, September 30,
(Dollars in thousands, except per share data) 2015 2015 2015 2014 2014
Net Income$ 4,215 $ 3,472 $ 2,511 $ 3,147 $ 2,506
Adjustments:
Plus: Accelerated vesting of stock compensation - 258 140 - -
Plus: Employee severance - - 93 - -
Less: Prepayment penalty fees - (35) - - -
Less: Non-recurring payment related to a loan participation - - - (250) -
Less: Gain on sale of foreclosed real estate (557) - - - -
Less: Net gain on sales of investments - (1,250) (273) - -
Total core adjustments before taxes (557) (1,027) (40) (250) -
Tax benefit on core adjustments 195 359 14 88 -
Tax rate adjustment (1) - - - (441) -
Total core adjustments after taxes (362) (668) (26) (603) -
Total core net income$ 3,853 $ 2,804 $ 2,485 $ 2,544 $ 2,506
Total net interest income$ 17,672 $ 17,099 $ 16,375 $ 16,395 $ 15,985
Less: Prepayment penalty fees - (35) - - -
Less: Non-recurring payment related to a loan participation - - - (250) -
Total core net interest income$ 17,672 $ 17,064 $ 16,375 $ 16,145 $ 15,985
Total noninterest income$ 3,241 $ 4,074 $ 2,664 $ 2,498 $ 2,778
Less: Net gain on sales of investments - (1,250) (273) - -
Total core noninterest income$ 3,241 $ 2,824 $ 2,391 $ 2,498 $ 2,778
Total noninterest expense$ 14,718 $ 15,597 $ 14,937 $ 14,615 $ 14,219
Less: Accelerated vesting of stock compensation - (258) (140) - -
Less: Employee severances - - (93) - -
Less: Gain on sale of foreclosed real estate 557 - - - -
Total core noninterest expense$ 15,275 $ 15,339 $ 14,704 $ 14,615 $ 14,219
Core earnings per common share, diluted$ 0.25 $ 0.19 $ 0.16 $ 0.17 $ 0.17
Core return on average assets (annualized) 0.57% 0.44% 0.40% 0.42% 0.43%
Core return on average equity (annualized) 6.33% 4.66% 4.19% 4.29% 4.27%
Core non-interest expense to average assets (annualized) 2.26% 2.43% 2.34% 2.39% 2.46%
Efficiency ratio (2) 73.04% 77.13% 78.35% 78.39% 75.78%
Tangible book value (3) $ 15.30 $ 15.01 $ 14.82 $ 14.64 $ 14.56
(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.