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First Connecticut Bancorp, Inc. Reports Fourth Quarter 2015 Earnings of $0.16 Earnings Per Share

FARMINGTON, Conn., Jan. 27, 2016 (GLOBE NEWSWIRE) -- First Connecticut Bancorp, Inc. (the “Company”) (NASDAQ:FBNK), the holding company for Farmington Bank (the “Bank”), reported net income of $2.4 million, or $0.16 diluted earnings per share for the quarter ended December 31, 2015 compared to net income of $3.1 million, or $0.21 diluted earnings per share for the quarter ended December 31, 2014.

Net income on a core earnings basis was $2.7 million or $0.18 diluted core earnings per share for the quarter ended December 31, 2015 compared to $2.5 million, or $0.17 diluted core earnings per share for the quarter ended December 31, 2014. Core earnings exclude non-recurring items which include a $768,000 valuation allowance in the fourth quarter related to a deferred tax asset associated with the establishment of the Bank’s foundation in 2011 offset by $379,000 of bank owned life insurance proceeds.

“In the fourth quarter we capped off another year of double digit organic loan and core deposit growth. During the year we repositioned and strengthened our balance sheet improving our interest rate risk position. In addition to growing the balance sheet, we focused on further strengthening our cybersecurity and compliance areas,” stated John J. Patrick Jr., First Connecticut Bancorp’s Chairman, President and CEO.

“Overall, I am pleased we continued to grow tangible book value to $15.47, an increase of $0.17 for the quarter and $0.83 for the year. Additionally, we opened two branch offices in western Massachusetts and a loan center in Branford, Connecticut during the fourth quarter.”

Financial Highlights

  • Strong organic loan growth continued during the quarter as loans increased $23.5 million to $2.4 billion at December 31, 2015 and increased $222.9 million or 10% from a year ago. Loan growth during the quarter was primarily driven by a $25.6 million increase in the commercial loan portfolio.
  • Net interest income decreased $309,000 to $17.4 million in the fourth quarter of 2015 compared to the linked quarter and increased $968,000 or 6% compared to the fourth quarter of 2014.
  • Net gain on loans sold decreased $426,000 to $567,000 in the fourth quarter of 2015 compared to the linked quarter primarily due to selling $83.2 million of fixed rate residential portfolio loans in the linked quarter to reposition the balance sheet and improve our interest rate risk position.
  • Overall deposits increased $18.0 million to $2.0 billion in the fourth quarter of 2015 compared to the linked quarter and increased $258.3 million or 15% from a year ago.
  • Checking accounts grew by 3.8% or 1,846 net new accounts in the fourth quarter of 2015 and by 12.8% or 5,786 net new accounts from a year ago.
  • Our loan to deposit ratio improved to 118.6% compared to 123.4% at December 31, 2014.
  • Tangible book value per share is $15.47 compared to $15.30 on a linked quarter basis and $14.64 at December 31, 2014.
  • Asset quality improved as loan delinquencies 30 days and greater represented 0.63% of total loans at December 31, 2015 compared to 0.67% at September 30, 2015 and 0.75% at December 31, 2014. Non-accrual loans represented 0.63% of total loans compared to 0.71% of total loans on a linked quarter basis and 0.72% of total loans at December 31, 2014.
  • The allowance for loan losses represented 0.86% of total loans at December 31, 2015 and September 30, 2015 and 0.89% at December 31, 2014.
  • The Company paid a quarterly cash dividend of $0.06 per share during the fourth quarter and paid a cash dividend of $0.22 per share for the year, an increase of $0.05 compared to the prior year.


Fourth quarter 2015 compared with third quarter 2015

Net interest income

  • Net interest income decreased $309,000 to $17.4 million in the fourth quarter of 2015 compared to the linked quarter due primarily to a $309,000 increase in interest expense related to money market and certificate of deposit promotions and higher average costs of Federal Home Loan Bank of Boston borrowings.
  • Net interest margin decreased 3 basis points to 2.76% in the fourth quarter of 2015 compared to 2.79% in the linked quarter due to a 7 basis point increase in the cost of interest-bearing liabilities offset by 3 basis point increase in the yield on interest-earning assets.


Provision for loan losses

  • Provision for loan losses was $776,000 for the fourth quarter of 2015 compared to $386,000 for the linked quarter. The increase in the fourth quarter was primarily due to $293,000 in charge-offs related to one commercial customer who is in bankruptcy.
  • Net charge-offs (recoveries) in the quarter were $588,000 or 0.10% to average loans (annualized) compared to ($43,000) or (0.01%) to average loans (annualized) in the linked quarter.
  • The allowance for loan losses represented 0.86% of total loans at December 31, 2015 and September 30, 2015.


Noninterest income

  • Total noninterest income increased $227,000 to $3.5 million in the fourth quarter of 2015 compared to the linked quarter primarily due to a $377,000 increase in bank owned life insurance income and a $248,000 increase in other noninterest income offset by a $426,000 decrease in net gain on loans sold.
  • Other income increased $248,000 to $557,000 in the fourth quarter of 2015 compared to $309,000 in the linked quarter primarily due to a $144,000 increase in mortgage banking derivatives income and a $52,000 increase in servicing fees.
  • Net gain on loans sold decreased $426,000 primarily due to selling $83.2 million of fixed rate residential portfolio loans in the linked quarter to reposition the balance sheet and improve our interest rate risk position.


Noninterest expense

  • Noninterest expense increased $1.2 million in the fourth quarter of 2015 to $16.0 million compared to the linked quarter primarily due to a $426,000 increase in salaries and employee benefits, a $416,000 increase in other operating expenses and a $320,000 increase in marketing.
  • Other operating expenses increased $416,000 on a linked quarter basis primarily due to a $557,000 gain on foreclosed real estate in the third quarter. Excluding the gain on foreclosed real estate, other operating expenses decreased $141,000 in the fourth quarter of 2015 compared to the third quarter.
  • Marketing increased $320,000 on a linked quarter basis primarily due to our expansion into western Massachusetts.


Income tax expense

  • Income tax expense was $1.7 million in the fourth quarter of 2015 compared to $1.6 million in the linked quarter. The increase in income tax expense in the fourth quarter was primarily due to a $768,000 valuation allowance related to a deferred tax asset associated with the establishment of the Bank’s foundation in 2011.


Fourth quarter 2015 compared with fourth quarter 2014

Net interest income

  • Net interest income increased $968,000 to $17.4 million in the fourth quarter of 2015 compared to the prior year quarter due primarily to a $243.3 million increase in the average loan balance offset by a $714,000 increase in interest expense. Excluding a $250,000 non-recurring payment related to a loan participation in the prior year quarter, core net interest income increased $1.2 million in the fourth quarter of 2015.
  • Net interest margin decreased 7 basis points to 2.76% in the fourth quarter of 2015 compared to 2.83% in the prior year quarter primarily due to an 8 basis point decrease in the yield on average loans balance and a 7 basis point increase in cost of interest-bearing liabilities. Excluding the non-recurring payment related to a loan participation in the prior year quarter, net interest margin would have been 2.79%.


Provision for loan losses

  • Provision for loan losses was $776,000 for the fourth quarter of 2015 compared to $632,000 for the prior year quarter.
  • Net charge-offs in the quarter were $588,000 or 0.10% to average loans (annualized) compared to $228,000 or 0.04% to average loans (annualized) in the prior year quarter.
  • The allowance for loan losses represented 0.86% of total loans at December 31, 2015 and 0.89% of total loans at December 31, 2014.


Noninterest income

  • Total noninterest income increased $970,000 to $3.5 million in the fourth quarter of 2015 compared to the prior year quarter primarily due to a $220,000 increase in net gain on loans sold, a $443,000 increase in bank owned life insurance income and a $262,000 increase in other noninterest income.
  • Net gain on loans sold increased $220,000 primarily due to an increase in the volume of loans sold.
  • Other income increased $262,000 to $557,000 in the fourth quarter of 2015 compared to the prior year quarter primarily due to a $152,000 increase in mortgage banking derivatives income and a $69,000 increase in servicing fees.


Noninterest expense

  • Noninterest expense increased $1.3 million in the fourth quarter of 2015 to $16.0 million compared to the prior year quarter primarily due to an $831,000 increase in salaries and employee benefits and a $392,000 increase in marketing.
  • Salaries and employee benefits increased $831,000 primarily due to an increase in staff to support our compliance areas, our expansion into western Massachusetts and to maintain the Bank’s growth.
  • Marketing increased $392,000 to $763,000 compared to the prior year quarter primarily due to our expansion into western Massachusetts.


Income tax expense

  • Income tax expense was $1.7 million in the fourth quarter of 2015 compared to $499,000 in the prior year quarter. The increase in income tax expense in the fourth quarter of 2015 was primarily due to a $768,000 valuation allowance related to a deferred tax asset associated with the establishment of the Bank’s foundation in 2011 and $451,000 increase in income before taxes. The income tax expense in the fourth quarter of 2014 also decreased $441,000 due to adjusting the tax rate on our deferred tax assets from 34% to 35%.


For the year ended December 31, 2015 compared with the year ended December 31, 2014

Net interest income

  • Net interest income increased $5.8 million or 9% to $68.5 million for the year ended 2015 compared to $62.7 million for the year ended 2014 primarily due to a $317.2 million increase in the average loan balance offset by a $3.3 million increase in interest expense.
  • Net interest margin decreased to 2.81% for the year ended 2015 compared to 2.94% for the year ended 2014. Excluding the non-recurring payment related to a loan participation, the year ended 2014 interest margin would have been 2.92%.
  • The total interest-earning assets yield decreased 6 basis points to 3.34% for the year ended 2015 compared to 3.40% for the year ended 2014 due to a $317.2 million increase in the average loan balance in a low interest rate environment.
  • The cost of interest-bearing liabilities increased 8 basis points to 68 basis points for the year ended 2015 compared to 60 basis points for the year ended 2014. The increase was primarily due to money market and certificate of deposit promotions and a 26 basis point increase in the average cost of Federal Home Loan Bank of Boston borrowings.


Provision for loan losses

  • Provision for loan losses was $2.4 million for the year ended 2015 compared to $2.6 million for the year ended 2014.
  • Net charge-offs for the year ended 2015 were $1.2 million or 0.05% to average loans compared to $1.9 million or 0.10% to average loans for the year ended 2014.
  • The allowance for loan losses represented 0.86% of total loans at December 31, 2015 compared to 0.89% at December 31, 2014.


Noninterest income

  • Total noninterest income increased $4.3 million to $13.4 million for the year ended 2015 compared to $9.1 million for the year ended 2014.
  • Fees for customer services increased $487,000 to $6.0 million for the year ended 2015 compared to the year ended 2014 driven by our growth in checking accounts and debit card fees.
  • Gain on sale of investments was $1.5 million for the year ended 2015 due to the sale of trust preferred securities. There was no gain on sale of investments for the year ended 2014.
  • Net gain on loans sold increased $1.1 million to $2.5 million for the year ended 2015 compared to the year ended 2014 as a result of an increase in volume of loans sold.
  • Bank owned life insurance income increased $542,000 to $1.7 million for the year ended 2015 compared to the year ended 2014 primarily due to a $10.0 million purchase of bank owned life insurance and $379,000 in bank owned life insurance proceeds in 2015.
  • Other income increased $695,000 to $1.6 million for the year ended 2015 compared to the year ended 2014 primarily due to a $709,000 increase in swap fee income.


Noninterest expense

  • Noninterest expense increased $4.2 million to $61.2 million for the year ended 2015 compared to $57.0 million for the year ended 2014.
  • Salaries and employee benefits increased $2.4 million to $36.9 million for the year ended 2015 compared to the year ended 2014. The increase is primarily due to an increase in staff to support our compliance areas, our expansion into western Massachusetts and to maintain the Bank’s growth.
  • Marketing increased $559,000 to $2.1 million for the year ended 2015 compared to the prior year primarily due to our expansion into western Massachusetts and an increase in premiums and giveaways to obtain new customers in the geographical areas we serve.
  • Other operating expenses increased $1.0 million to $11.2 million for the year ended 2015 compared to the prior year primarily due to a $246,000 increase in service bureau fees and a general increase in office expenses to support the Bank’s growth.


Income tax expense

  • Income tax expense was $5.7 million for the year ended 2015 compared to $2.8 million for the year ended 2014. The increase in income tax expense for the year ended 2015 was primarily due to a $768,000 valuation allowance related to a deferred tax asset associated with the establishment of the Bank’s foundation in 2011 and a $6.1 million increase in income before taxes. The income tax expense for the year ended 2014 also decreased $441,000 due to adjusting the tax rate on our deferred tax assets from 34% to 35%.


December 31, 2015 compared to December 31, 2014

Financial Condition

  • Total assets increased $223.2 million or 9% at December 31, 2015 to $2.7 billion compared to $2.5 billion at December 31, 2014, largely reflecting an increase in loan growth.
  • Our investment portfolio totaled $164.7 million at December 31, 2015 compared to $204.3 million at December 31, 2014, a decrease of $39.6 million due to reduction in collateral requirements.
  • Net loans increased $221.7 million or 11% at December 31, 2015 to $2.3 billion compared to $2.1 billion at December 31, 2014 due to our continued focus on commercial and residential lending.
  • Deposits increased $258.3 million to $2.0 billion at December 31, 2015 compared to $1.7 billion at December 31, 2014 primarily due to increases in municipal deposits, demand deposits and certificates of deposit 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 $44.3 million at December 31, 2015.
  • Federal Home Loan Bank of Boston advances decreased $24.1 million to $377.6 million at December 31, 2015 compared to $401.7 million at December 31, 2014. Advances were used to support loan and securities growth during the year.


Asset Quality

  • At December 31, 2015, the allowance for loan losses represented 0.86% of total loans and 135.44% of non-accrual loans, compared to 0.86% of total loans and 120.05% of non-accrual loans at September 30, 2015 and 0.89% of total loans and 122.58% of non-accrual loans at December 31, 2014.
  • Loan delinquencies 30 days and greater represented 0.63% of total loans at December 31, 2015 compared to 0.67% of total loans at September 30, 2015 and 0.75% of total loans at December 31, 2014.
  • Non-accrual loans represented 0.63% of total loans at December 31, 2015 compared to 0.71% of total loans at September 30, 2015 and 0.72% of total loans at December 31, 2014.
  • Net charge-offs (recoveries) in the quarter were $588,000 or 0.10% to average loans (annualized) compared to ($43,000) or (0.01%) to average loans (annualized) in the linked quarter and $228,000 or 0.04% 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 12.88% at December 31, 2015.
  • Tangible book value per share was $15.47 compared to $15.30 on a linked quarter basis and $14.64 at December 31, 2014.
  • During the fourth quarter of 2015, the Company repurchased 15,000 shares of common stock at an average price per share of $15.80 at a total cost of $237,000. Repurchased shares are held as treasury stock and will be available for general corporate purposes. The Company had 757,745 shares remaining to repurchase at December 31, 2015 from prior regulatory approval.
  • At December 31, 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 and pre-approved unsecured lines of credit.


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, January 28, 2016 at 10:30am Eastern Time to discuss fourth 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 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
December 31, September 30, June 30, March 31, December 31,
(Dollars in thousands, except per share data) 2015 2015 2015 2015 2014
Selected Financial Condition Data:
Total assets$ 2,708,546 $ 2,708,454 $ 2,626,217 $ 2,549,074 $ 2,485,360
Cash and cash equivalents 59,139 47,447 42,992 44,847 42,863
Securities held-to-maturity, at amortized cost 32,246 25,486 34,366 21,006 16,224
Securities available-for-sale, at fair value 132,424 171,390 143,799 173,829 188,041
Federal Home Loan Bank of Boston stock, at cost 21,729 23,038 21,496 19,785 19,785
Loans, net 2,341,598 2,318,257 2,268,385 2,186,937 2,119,917
Deposits 1,991,358 1,973,355 1,878,040 1,887,954 1,733,041
Federal Home Loan Bank of Boston advances 377,600 373,600 400,700 308,700 401,700
Total stockholders' equity 245,721 243,195 239,082 237,709 234,563
Allowance for loan losses 20,198 20,010 19,581 19,232 18,960
Non-accrual loans 14,913 16,668 12,973 14,086 15,468
Impaired loans 41,017 42,664 39,975 42,130 43,452
Loan delinquencies 30 days and greater 14,945 15,598 13,244 14,193 16,079
Selected Operating Data:
Interest income$ 21,094 $ 21,094 $ 20,164 $ 19,532 $ 19,412
Interest expense 3,731 3,422 3,065 3,157 3,017
Net interest income 17,363 17,672 17,099 16,375 16,395
Provision for loan losses 776 386 663 615 632
Net interest income after provision for loan losses 16,587 17,286 16,436 15,760 15,763
Noninterest income 3,468 3,241 4,074 2,664 2,498
Noninterest expense 15,958 14,718 15,597 14,937 14,615
Income before income taxes 4,097 5,809 4,913 3,487 3,646
Income tax expense 1,716 1,594 1,441 976 499
Net income$ 2,381 $ 4,215 $ 3,472 $ 2,511 $ 3,147
Performance Ratios (annualized):
Return on average assets 0.35% 0.62% 0.54% 0.40% 0.52%
Return on average equity 3.86% 6.92% 5.77% 4.24% 5.31%
Net interest rate spread (1) 2.61% 2.65% 2.72% 2.68% 2.68%
Net interest rate margin (2) 2.76% 2.79% 2.86% 2.83% 2.83%
Non-interest expense to average assets (3) 2.37% 2.26% 2.39% 2.34% 2.39%
Efficiency ratio (4) 78.19% 73.04% 77.13% 78.35% 78.39%
Average interest-earning assets to average
interest-bearing liabilities 127.48% 126.44% 126.98% 126.86% 127.88%
Loans to deposits 118.60% 118.49% 121.83% 116.86% 123.42%
Asset Quality Ratios:
Allowance for loan losses as a percent of total loans 0.86% 0.86% 0.86% 0.87% 0.89%
Allowance for loan losses as a percent of
non-accrual loans 135.44% 120.05% 150.94% 136.53% 122.58%
Net charge-offs (recoveries) to average loans (annualized) 0.10% (0.01%) 0.06% 0.06% 0.04%
Non-accrual loans as a percent of total loans 0.63% 0.71% 0.57% 0.64% 0.72%
Non-accrual loans as a percent of total assets 0.55% 0.62% 0.49% 0.55% 0.62%
Loan delinquencies 30 days and greater as a
percent of total loans 0.63% 0.67% 0.58% 0.64% 0.75%
Per Share Related Data:
Basic earnings per share$ 0.16 $ 0.28 $ 0.23 $ 0.17 $ 0.21
Diluted earnings per share$ 0.16 $ 0.28 $ 0.23 $ 0.17 $ 0.21
Dividends declared per share$ 0.06 $ 0.06 $ 0.05 $ 0.05 $ 0.05
Tangible book value (5)$ 15.47 $ 15.30 $ 15.01 $ 14.82 $ 14.64
Common stock shares outstanding 15,881,663 15,893,263 15,922,888 16,035,005 16,026,319
Weighted-average basic shares outstanding 14,785,058 14,632,951 14,694,472 14,722,112 14,695,490
Weighted-average diluted shares outstanding 15,146,365 14,887,461 14,839,454 14,850,597 14,836,032
(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
December 31, September 30, June 30, March 31, December 31,
(Dollars in thousands) 2015 2015 2015 2015 2014
Capital Ratios:
Equity to total assets at end of period 9.07% 8.98% 9.10% 9.33% 9.44%
Average equity to average assets 9.17% 9.00% 9.36% 9.45% 9.71%
Total Capital (to Risk Weighted Assets) 12.88%* 12.72% 13.11% 13.44% 13.73%
Tier I Capital (to Risk Weighted Assets) 11.91%* 11.76% 12.12% 12.44% 12.70%
Common Equity Tier I Capital 11.91%* 11.76% 12.12% 12.44% n/a
Tier I Leverage Capital (to Average Assets) 9.39%* 9.24% 9.57% 9.72% 9.86%
Total equity to total average assets 9.13% 8.98% 9.29% 9.48% 9.61%
* Estimated
Loans and Allowance for Loan Losses:
Real estate
Residential$ 849,722 $ 851,784 $ 888,376 $ 850,819 $ 827,005
Commercial 887,431 862,367 817,955 769,712 765,066
Construction 30,895 29,244 42,858 53,913 57,371
Installment 2,970 3,007 3,103 3,114 3,356
Commercial 409,550 410,704 359,537 352,085 309,708
Collateral 1,668 1,632 1,551 1,676 1,733
Home equity line of credit 174,701 174,579 169,507 169,969 169,768
Revolving credit 91 96 77 80 99
Resort 784 807 837 880 929
Total loans 2,357,812 2,334,220 2,283,801 2,202,248 2,135,035
Net deferred loan costs 3,984 4,047 4,165 3,921 3,842
Loans 2,361,796 2,338,267 2,287,966 2,206,169 2,138,877
Allowance for loan losses (20,198) (20,010) (19,581) (19,232) (18,960)
Loans, net$ 2,341,598 $ 2,318,257 $ 2,268,385 $ 2,186,937 $ 2,119,917
Deposits:
Noninterest-bearing demand deposits$ 401,388 $ 359,757 $ 377,092 $ 337,211 $ 330,524
Interest-bearing
NOW accounts 468,054 527,128 425,789 499,130 355,412
Money market 460,737 440,249 430,558 462,532 470,991
Savings accounts 220,389 211,170 220,154 214,083 210,892
Time deposits 440,790 435,051 424,447 374,998 365,222
Total interest-bearing deposits 1,589,970 1,613,598 1,500,948 1,550,743 1,402,517
Total deposits$ 1,991,358 $ 1,973,355 $ 1,878,040 $ 1,887,954 $ 1,733,041



First Connecticut Bancorp, Inc.
Consolidated Statements of Condition (Unaudited)
December 31, September 30, December 31,
2015 2015 2014
(Dollars in thousands)
Assets
Cash and due from banks$ 45,732 $ 33,564 $ 35,232
Interest bearing deposits with other institutions 13,407 13,883 7,631
Total cash and cash equivalents 59,139 47,447 42,863
Securities held-to-maturity, at amortized cost 32,246 25,486 16,224
Securities available-for-sale, at fair value 132,424 171,390 188,041
Loans held for sale 9,637 8,416 2,417
Loans (1) 2,361,796 2,338,267 2,138,877
Allowance for loan losses (20,198) (20,010) (18,960)
Loans, net 2,341,598 2,318,257 2,119,917
Premises and equipment, net 18,565 17,870 18,873
Federal Home Loan Bank of Boston stock, at cost 21,729 23,038 19,785
Accrued income receivable 6,747 6,305 5,777
Bank-owned life insurance 50,618 50,633 39,686
Deferred income taxes 15,443 15,935 16,841
Prepaid expenses and other assets 20,400 23,677 14,936
Total assets$ 2,708,546 $ 2,708,454 $ 2,485,360
Liabilities and Stockholders' Equity
Deposits
Interest-bearing$ 1,589,970 $ 1,613,598 $ 1,402,517
Noninterest-bearing 401,388 359,757 330,524
1,991,358 1,973,355 1,733,041
Federal Home Loan Bank of Boston advances 377,600 373,600 401,700
Repurchase agreement borrowings 10,500 10,500 21,000
Repurchase liabilities 35,769 58,084 48,987
Accrued expenses and other liabilities 47,598 49,720 46,069
Total liabilities 2,462,825 2,465,259 2,250,797
Stockholders' Equity
Common stock 181 181 181
Additional paid-in-capital 181,997 181,195 178,772
Unallocated common stock held by ESOP (11,626) (11,893) (12,681)
Treasury stock, at cost (30,602) (30,411) (28,828)
Retained earnings 112,933 111,274 103,630
Accumulated other comprehensive loss (7,162) (7,151) (6,511)
Total stockholders' equity 245,721 243,195 234,563
Total liabilities and stockholders' equity$ 2,708,546 $ 2,708,454 $ 2,485,360
(1) Loans include net deferred fees and unamortized premiums of $4.0 million, $4.0 million and $3.8 million at December 31, 2015,
September 30, 2015 and December 31, 2014, respectively.



First Connecticut Bancorp, Inc.
Consolidated Statements of Income (Unaudited)
Three Months Ended For The Year Ended
December 31, September 30, December 31, December 31,
(Dollars in thousands, except per share data) 2015 2015 2014 2015 2014
Interest income
Interest and fees on loans
Mortgage $ 15,670 $ 15,861 $ 15,170 $ 61,920 $ 56,963
Other 4,731 4,594 3,770 17,584 14,159
Interest and dividends on investments
United States Government and agency obligations 425 401 284 1,534 949
Other bonds 13 13 63 79 259
Corporate stocks 248 217 122 741 429
Other interest income 7 8 3 26 15
Total interest income 21,094 21,094 19,412 81,884 72,774
Interest expense
Deposits 2,611 2,412 2,119 9,372 7,369
Interest on borrowed funds 1,004 890 675 3,449 1,841
Interest on repo borrowings 97 96 181 448 719
Interest on repurchase liabilities 19 24 42 106 151
Total interest expense 3,731 3,422 3,017 13,375 10,080
Net interest income 17,363 17,672 16,395 68,509 62,694
Provision for loan losses 776 386 632 2,440 2,588
Net interest income
after provision for loan losses 16,587 17,286 15,763 66,069 60,106
Noninterest income
Fees for customer services 1,566 1,536 1,521 5,975 5,488
Gain on sale of investments - - - 1,523 -
Net gain on loans sold 567 993 347 2,492 1,419
Brokerage and insurance fee income 52 54 52 215 192
Bank owned life insurance income 726 349 283 1,672 1,130
Other 557 309 295 1,570 875
Total noninterest income 3,468 3,241 2,498 13,447 9,104
Noninterest expense
Salaries and employee benefits 9,728 9,302 8,897 36,855 34,416
Occupancy expense 1,257 1,219 1,251 5,115 5,080
Furniture and equipment expense 1,057 1,034 1,125 4,204 4,342
FDIC assessment 430 413 386 1,657 1,396
Marketing 763 443 371 2,149 1,590
Other operating expenses 2,723 2,307 2,585 11,230 10,224
Total noninterest expense 15,958 14,718 14,615 61,210 57,048
Income before income taxes 4,097 5,809 3,646 18,306 12,162
Income tax expense 1,716 1,594 499 5,727 2,827
Net income$ 2,381 $ 4,215 $ 3,147 $ 12,579 $ 9,335
Earnings per share:
Basic $ 0.16 $ 0.28 $ 0.21 $ 0.84 $ 0.62
Diluted 0.16 0.28 0.21 0.83 0.62
Weighted average shares outstanding:
Basic 14,785,058 14,632,951 14,695,490 14,726,607 14,682,147
Diluted 15,146,365 14,887,461 14,836,032 14,949,654 14,793,346




First Connecticut Bancorp, Inc.
Consolidated Average Balances, Yields and Rates (Unaudited)
For The Three Months Ended
December 31, 2015 September 30, 2015 December 31, 2014
Average
Balance
Interest and
Dividends (1)
Yield/
Cost
Average
Balance
Interest and
Dividends (1)
Yield/
Cost
Average
Balance
Interest and
Dividends (1)
Yield/
Cost
(Dollars in thousands)
Interest-earning assets:
Loans$ 2,346,218 $ 20,916 3.54% $ 2,359,293 $ 20,937 3.52% $ 2,102,879 $ 19,199 3.62%
Securities 185,697 495 1.06% 191,530 465 0.96% 207,534 403 0.77%
Federal Home Loan Bank of Boston stock 21,729 191 3.49% 22,883 166 2.88% 17,969 66 1.46%
Federal funds and other earning assets 14,258 7 0.19% 11,089 8 0.29% 8,014 3 0.15%
Total interest-earning assets 2,567,902 21,609 3.34% 2,584,795 21,576 3.31% 2,336,396 19,671 3.34%
Noninterest-earning assets 122,500 122,438 105,368
Total assets $ 2,690,402 $ 2,707,233 $ 2,441,764
Interest-bearing liabilities:
NOW accounts$ 498,658 $ 363 0.29% $ 486,798 $ 357 0.29% $ 401,269 $ 281 0.28%
Money market 459,047 957 0.83% 437,000 867 0.79% 451,288 926 0.81%
Savings accounts 216,219 54 0.10% 210,978 58 0.11% 206,794 51 0.10%
Certificates of deposit 436,676 1,237 1.12% 430,152 1,130 1.04% 352,100 861 0.97%
Total interest-bearing deposits 1,610,600 2,611 0.64% 1,564,928 2,412 0.61% 1,411,451 2,119 0.60%
Federal Home Loan Bank of Boston Advances 343,024 1,004 1.16% 411,236 890 0.86% 328,257 675 0.82%
Repurchase agreement borrowings 10,500 97 3.67% 10,500 96 3.63% 21,000 181 3.42%
Repurchase liabilities 50,264 19 0.15% 57,644 24 0.17% 66,305 42 0.25%
Total interest-bearing liabilities 2,014,388 3,731 0.73% 2,044,308 3,422 0.66% 1,827,013 3,017 0.66%
Noninterest-bearing deposits 380,041 368,200 336,141
Other noninterest-bearing liabilities 49,273 51,089 41,602
Total liabilities 2,443,702 2,463,597 2,204,756
Stockholders' equity 246,700 243,636 237,008
Total liabilities and stockholders' equity$ 2,690,402 $ 2,707,233 $ 2,441,764
Tax-equivalent net interest income $ 17,878 $ 18,154 $ 16,654
Less: tax-equivalent adjustment (515) (482) (259)
Net interest income $ 17,363 $ 17,672 $ 16,395
Net interest rate spread (2) 2.61% 2.65% 2.68%
Net interest-earning assets (3) $ 553,514 $ 540,487 $ 509,383
Net interest margin (4) 2.76% 2.79% 2.83%
Average interest-earning assets to average interest-bearing liabilities
127.48% 126.44% 127.88%
(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 Years Ended December 31,
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$ 2,279,418 $ 81,177 3.56% $ 1,962,239 $ 71,967 3.67%
Securities 188,004 1,832 0.97% 181,317 1,429 0.79%
Federal Home Loan Bank of Boston stock 21,187 522 2.46% 15,911 208 1.31%
Federal funds and other earning assets 11,947 26 0.22% 4,947 15 0.30%
Total interest-earning assets 2,500,556 83,557 3.34% 2,164,414 73,619 3.40%
Noninterest-earning assets 119,857 105,474
Total assets $ 2,620,413 $ 2,269,888
Interest-bearing liabilities:
NOW accounts$ 472,644 $ 1,351 0.29% $ 380,936 $ 976 0.26%
Money market 453,017 3,592 0.79% 420,456 3,112 0.74%
Savings accounts 213,383 226 0.11% 200,948 205 0.10%
Certificates of deposit 407,071 4,203 1.03% 338,590 3,076 0.91%
Total interest-bearing deposits 1,546,115 9,372 0.61% 1,340,930 7,369 0.55%
Federal Home Loan Bank of Boston Advances 356,539 3,449 0.97% 260,432 1,841 0.71%
Repurchase agreement borrowings 12,629 448 3.55% 21,000 719 3.42%
Repurchase liabilities 54,600 106 0.19% 60,082 151 0.25%
Total interest-bearing liabilities 1,969,883 13,375 0.68% 1,682,444 10,080 0.60%
Noninterest-bearing deposits 357,156 315,177
Other noninterest-bearing liabilities 51,312 37,909
Total liabilities 2,378,351 2,035,530
Stockholders' equity 242,062 234,358
Total liabilities and stockholders' equity$ 2,620,413 $ 2,269,888
Tax-equivalent net interest income $ 70,182 $ 63,539
Less: tax-equivalent adjustment (1,673) (845)
Net interest income $ 68,509 $ 62,694
Net interest rate spread (2) 2.66% 2.80%
Net interest-earning assets (3) $ 530,673 $ 481,970
Net interest margin (4) 2.81% 2.94%
Average interest-earning assets to average interest-bearing liabilities
126.94% 128.65%
(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 December 31, 2015, September 30, 2015, June 30, 2015, March 31, 2015 and December 31, 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
December 31, September 30, June 30, March 31, December 31,
(Dollars in thousands, except per share data) 2015 2015 2015 2015 2014
Net Income$ 2,381 $ 4,215 $ 3,472 $ 2,511 $ 3,147
Adjustments:
Plus: Accelerated vesting of stock compensation - - 258 140 -
Plus: Employee severance - - - 93 -
Less: Prepayment penalty fees (43) - (35) - -
Less: Non-recurring payment related to a loan participation - - - - (250)
Less: Gain on sale of foreclosed real estate - (557) - - -
Less: Bank-owned life insurance proceeds (379) - - - -
Less: Net gain on sales of investments - - (1,250) (273) -
Total core adjustments before taxes (422) (557) (1,027) (40) (250)
Tax benefit on core adjustments 15 195 359 14 88
Deferred tax asset valuation allowance (1) 768 - - - -
Tax rate adjustment (2) - - - - (441)
Total core adjustments after taxes 361 (362) (668) (26) (603)
Total core net income$ 2,742 $ 3,853 $ 2,804 $ 2,485 $ 2,544
Total net interest income$ 17,363 $ 17,672 $ 17,099 $ 16,375 $ 16,395
Less: Prepayment penalty fees (43) - (35) - -
Less: Non-recurring payment related to a loan participation - - - - (250)
Total core net interest income$ 17,320 $ 17,672 $ 17,064 $ 16,375 $ 16,145
Total noninterest income$ 3,468 $ 3,241 $ 4,074 $ 2,664 $ 2,498
Less: Bank-owned life insurance proceeds (379) - - - -
Less: Net gain on sales of investments - - (1,250) (273) -
Total core noninterest income$ 3,089 $ 3,241 $ 2,824 $ 2,391 $ 2,498
Total noninterest expense$ 15,958 $ 14,718 $ 15,597 $ 14,937 $ 14,615
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$ 15,958 $ 15,275 $ 15,339 $ 14,704 $ 14,615
Core earnings per common share, diluted$ 0.18 $ 0.25 $ 0.19 $ 0.16 $ 0.17
Core return on average assets (annualized) 0.41% 0.57% 0.44% 0.40% 0.42%
Core return on average equity (annualized) 4.45% 6.33% 4.66% 4.19% 4.29%
Core non-interest expense to average assets (annualized) 2.37% 2.26% 2.39% 2.34% 2.39%
Efficiency ratio (3) 78.19% 73.04% 77.13% 78.35% 78.39%
Tangible book value (4) $ 15.47 $ 15.30 $ 15.01 $ 14.82 $ 14.64
(1) Represents a valuation allowance related to a deferred tax asset associated with the establishment of the Bank’s foundation in 2011.
(2) 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.
(3) Represents core noninterest expense divided by the sum of core net interest income and core noninterest income.
(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.



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 years ended December 31, 2015 and 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 Years Ended December 31,
(Dollars in thousands, except per share data) 2015 2014
Net Income$ 12,579 $ 9,335
Adjustments:
Plus: Accelerated vesting of stock compensation 398 -
Plus: Employee severance 93 -
Less: Prepayment penalty fees (78) (185)
Less: Non-recurring payment related to a loan participation - (250)
Less: Gain on sale of foreclosed real estate (557) -
Less: Bank-owned life insurance proceeds (379) -
Less: Net gain on sales of investments (1,523) -
Total core adjustments before taxes (2,046) (435)
Tax benefit on core adjustments 583 151
Deferred tax asset valuation allowance (1) 768 -
Tax rate adjustment (2) - (441)
Total core adjustments after taxes (695) (725)
Total core net income$ 11,884 $ 8,610
Total net interest income$ 68,509 $ 62,694
Less: Prepayment penalty fees (78) (185)
Less: Non-recurring payment related to a loan participation��- (250)
Total core net interest income$ 68,431 $ 62,259
.
Total noninterest income$ 13,447 $ 9,104
Less: Bank-owned life insurance proceeds (379) -
Less: Net gain on sales of investments (1,523) -
Total core noninterest income$ 11,545 $ 9,104
Total noninterest expense$ 61,210 $ 57,048
Less: Accelerated vesting of stock compensation (398) -
Less: Employee severances (93) -
Less: Gain on sale of foreclosed real estate 557 -
Total core noninterest expense$ 61,276 $ 57,048
Core earnings per common share, diluted$ 0.78 $ 0.57
Core return on average assets (annualized) 0.45% 0.38%
Core return on average equity (annualized) 4.91% 3.67%
Core non-interest expense to average assets (annualized) 2.34% 2.51%
Efficiency ratio (3) 76.62% 79.94%
Tangible book value (4) $ 15.47 $ 15.30
(1) Represents a valuation allowance related to a deferred tax asset associated with the establishment of the Bank’s foundation in 2011.
(2) 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.
(3) Represents core noninterest expense divided by the sum of core net interest income and core noninterest income.
(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.



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.