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Fox Chase Bancorp, Inc. Announces Increased Earnings for the Three Months Ended March 31, 2013

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HATBORO, Pa., April 24, 2013 (GLOBE NEWSWIRE) -- Fox Chase Bancorp, Inc. (the "Company") (Nasdaq:FXCB), the holding company for Fox Chase Bank (the "Bank"), today announced net income of $1.8 million, or $0.16 per diluted share, for the three months ended March 31, 2013, compared to net income of $1.2 million, or $0.10 per diluted share, for the three months ended March 31, 2012.

Commenting on the performance for the quarter, Thomas M. Petro, President and Chief Executive Officer said, "We are pleased with our financial performance for the quarter as diluted earnings per share increased by 60% to $0.16 per share and our return on assets increased to 0.68%. Our business strategy, which is focused on building commercial relationships, continues to generate an increase in commercial loans, which represented 74% of our loan portfolio at March 31, 2013. While economic conditions remain challenging in our markets, we did see improvement in certain asset quality metrics, which resulted in lower credit costs compared to prior quarters. We continue to remain focused on increasing profitability, building our commercial loan portfolio and reducing nonperforming assets."

Highlights for the quarter ended March 31, 2013 included:

  • Total assets were $1.09 billion at March 31, 2013 and December 31, 2012. Total loans were $677.5 million at March 31, 2013, a decrease of $6.4 million, or 0.9%, from $683.9 million at December 31, 2012. Total commercial loans increased $6.7 million, or 1.3%, primarily due to increases of $16.0 million in commercial and industrial loans and $4.5 million in multi-family and commercial real estate loans, partially offset by a decrease of $13.8 million in commercial construction loans. As expected, one- to four-family residential mortgage loans decreased $8.6 million due to normal amortization exceeding new loans originated and consumer loans decreased $4.0 million.
  • Total stockholders' equity was $179.4 million at March 31, 2013, a decrease of $2.1 million from $181.5 million at December 31, 2012, primarily due to the repurchase of 101,000 shares of Company common stock at an aggregate cost of $1.7 million.
  • Return on assets improved to 0.68% for the three months ended March 31, 2013, compared to 0.47% for the three months ended March 31, 2012.
  • Net interest income decreased $67,000, or 0.8%, to $7.9 million for the three months ended March 31, 2013, compared to $8.0 million for the three months ended March 31, 2012. The net interest margin was 3.07% for the three months ended March 31, 2013 compared to 3.11% for the three months ended December 31, 2012 and 3.23% for the three months ended March 31, 2012.
  • The efficiency ratio improved to 63.1% for the three months ended March 31, 2013 from 64.7% for the three months ended March 31, 2012;
  • Total noninterest income increased $360,000 to $1.1 million for the three months ended March 31, 2013 compared to $694,000 for the three months ended March 31, 2012 primarily due to a gain on sale of investment securities of $361,000 in 2013;
  • Noninterest expense increased $35,000, or 0.6%, to $5.7 million for the three months ended March 31, 2013, compared to $5.6 million for the three months ended March 31, 2012. Assets acquired through foreclosure expense increased $170,000, of which $196,000 related to an increase in valuation adjustments on assets acquired through foreclosure. Valuation adjustments on assets acquired through foreclosure were $241,000 for the three months ended March 31, 2013 compared to $45,000 for the three months ended March 31, 2012. Salaries, benefits and other compensation increased $166,000, or 5.0%, for the three months ended March 31, 2013 compared to the three months ended March 31, 2012, primarily as a result of increased staffing costs. These increases were offset by a $181,000 decrease in professional fees primarily due to lower loan work-out expense and a $48,000 decrease in data processing costs related to a renegotiated data processing contract that became effective in January 2013.
  • Noninterest expense decreased $762,000, or 11.8%, to $5.7 million for the three months ended March 31, 2013, compared to $6.4 million for the three months ended December 31, 2012. Assets acquired through foreclosure expense decreased $743,000, of which $738,000 related to a decrease in valuation adjustments on assets acquired through foreclosure. Valuation adjustments on assets acquired through foreclosure were $241,000 for the three months ended March 31, 2013 compared to $979,000 for the three months ended December 31, 2012. Additionally, professional fees decreased by $91,000 due to lower loan work-out expense and data processing costs decreased by $40,000 due to the renegotiated data processing contract that became effective in January 2013. These decreases were offset by a $115,000, or 3.4% increase, in salaries, benefits and other compensation for the three months ended March 31, 2013 compared to the three months ended December 31, 2012, primarily as a result of seasonal related payroll expense.

Credit related items as of and for the quarter ended March 31, 2013 include:

  • The allowance for loan losses was $11.6 million, or 1.68% of total loans, at March 31, 2013 compared to $11.2 million, or 1.61% of total loans, at December 31, 2012;
  • The provision for loan losses was $640,000 for the three months ended March 31, 2013, compared to $1.3 million for the three months ended March 31, 2012;
  • Total credit related costs, which include (i) provision for loan losses, (ii) valuation adjustments on assets acquired through foreclosure, offset by (iii) net (loss) gain on sale of assets acquired through foreclosure, totaled $885,000 for the three months ended March 31, 2013, compared to $1.4 million for the three months ended December 31, 2012 and $1.3 million for the three months ended March 31, 2012.
  • Net loan charge-offs totaled $207,000 for the three months ended March 31, 2013, compared to $492,000 for the three months ended December 31, 2012 and $2.1 million for the three months ended March 31, 2012.
  • Nonperforming assets totaled $24.3 million, or 2.24% of total assets, at March 31, 2013 compared to $25.6 million, or 2.36% of total assets, at December 31, 2012.
  • Delinquent loans totaled $1.6 million at March 31, 2013 compared to $2.1 million at December 31, 2012.

The Company also announced that its Board of Directors declared a cash dividend of $0.06 per outstanding share of common stock. The dividend will be paid on or about May 23, 2013 to stockholders of record as of the close of business on May 9, 2013.

Fox Chase Bancorp, Inc. will host a conference call to discuss first quarter 2013 results on Thursday, April 25, 2013 at 9:00 am EDT. The general public can access the call by dialing (888) 317-6016. A replay of the conference call will be available through June 7, 2013 by dialing (877) 344-7529; use Conference ID: 10027521.

Fox Chase Bancorp, Inc. is a stock holding company of Fox Chase Bank. The Bank is a federally chartered savings bank originally established in 1867. The Bank offers traditional banking services and products from its main office in Hatboro, Pennsylvania and ten branch offices in Bucks, Montgomery, Chester, Delaware 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
March 31,
2013 2012
(Unaudited)
INTEREST INCOME
Interest and fees on loans $8,062 $8,848
Interest on mortgage related securities 1,738 1,979
Interest on investment securities available-for-sale
Taxable 71 93
Nontaxable -- 19
Other interest income 1 3
Total Interest Income 9,872 10,942
INTEREST EXPENSE
Deposits 1,177 1,771
Short-term borrowings 32 5
Federal Home Loan Bank advances 502 754
Other borrowed funds 248 432
Total Interest Expense 1,959 2,962
Net Interest Income 7,913 7,980
Provision for loan losses 640 1,275
Net Interest Income after Provision for Loan Losses 7,273 6,705
NONINTEREST INCOME
Service charges and other fee income 361 389
Net (loss) gain on sale of assets acquired through foreclosure (4) 29
Income on bank-owned life insurance 116 119
Equity in earnings of affiliate 170 115
Net gain on sale of investment securities 361 --
Other 50 42
Total Noninterest Income 1,054 694
NONINTEREST EXPENSE
Salaries, benefits and other compensation 3,505 3,339
Occupancy expense 447 459
Furniture and equipment expense 124 152
Data processing costs 398 446
Professional fees 288 469
Marketing expense 30 46
FDIC premiums 185 181
Assets acquired through foreclosure expense 285 115
Other 413 433
Total Noninterest Expense 5,675 5,640
Income Before Income Taxes 2,652 1,759
Income tax provision 825 572
Net Income $1,827 $1,187
Earnings per share:
Basic $0.16 $0.10
Diluted $0.16 $0.10
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Dollars in Thousands, Except Share Data)
March 31, December 31,
2013 2012
(Unaudited) (Audited)
ASSETS
Cash and due from banks $148 $162
Interest-earning demand deposits in other banks 5,725 24,928
Total cash and cash equivalents 5,873 25,090
Investment securities available-for-sale 12,542 12,491
Mortgage related securities available-for-sale 302,727 283,616
Mortgage related securities held-to-maturity (fair value of $26,638 at
March 31, 2013 and $29,451 at December 31, 2012) 25,611 28,369
Loans, net of allowance for loan losses of $11,603
at March 31, 2013 and $11,170 at December 31, 2012 677,478 683,865
Federal Home Loan Bank stock, at cost 9,707 8,097
Bank-owned life insurance 14,193 14,077
Premises and equipment, net 10,252 10,443
Assets acquired through foreclosure 11,592 8,524
Real estate held for investment 1,620 1,620
Accrued interest receivable 3,394 3,223
Mortgage servicing rights, net 170 170
Deferred tax asset, net 3,966 2,953
Other assets 6,215 5,803
Total Assets $1,085,340 $1,088,341
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Deposits $696,936 $687,409
Short-term borrowings 29,700 70,500
Federal Home Loan Bank advances 140,000 110,000
Other borrowed funds 30,000 30,000
Advances from borrowers for taxes and insurance 1,399 1,699
Accrued interest payable 335 330
Accrued expenses and other liabilities 7,551 6,938
Total Liabilities 905,921 906,876
STOCKHOLDERS' EQUITY
Preferred stock ($.01 par value; 1,000,000 shares authorized,
none issued and outstanding at March 31, 2013 and December 31, 2012) -- --
Common stock ($.01 par value; 60,000,000 shares authorized,
12,260,172 shares issued and outstanding at March 31, 2013
and 12,356,564 shares issued and outstanding at December 31, 2012) 146 146
Additional paid-in capital 136,453 136,132
Treasury stock, at cost (2,350,600 shares at March 31, 2013 and
2,249,600 shares at December 31, 2012) (31,462) (29,733)
Common stock acquired by benefit plans (9,998) (10,228)
Retained earnings 81,724 80,608
Accumulated other comprehensive income, net 2,556 4,540
Total Stockholders' Equity 179,419 181,465
Total Liabilities and Stockholders' Equity $1,085,340 $1,088,341
SELECTED CONSOLIDATED FINANCIAL AND OTHER DATA OF THE COMPANY (UNAUDITED)
(Dollars in Thousands, Except Per Share Data)
March 31, December 31, March 31,
2013 2012 2012
CAPITAL RATIOS:
Stockholders' equity (to total assets) (1) 16.53% 16.67% 18.41%
Tier 1 capital (to adjusted assets) (2) 13.13 12.90 15.57
Tier 1 risk –based capital (to risk-weighted assets) (2) 19.50 19.45 23.73
Total risk-based capital (to risk-weighted assets) (2) 20.53 20.48 24.71
ASSET QUALITY INDICATORS:
Nonperforming Assets:
Nonaccruing loans $12,680 $17,124 $19,980
Accruing loans past due 90 days or more -- -- --
Total nonperforming loans $12,680 $17,124 $19,980
Assets acquired through foreclosure 11,592 8,524 6,473
Total nonperforming assets $24,272 $25,648 $26,453
Ratio of nonperforming loans to total loans 1.84% 2.46% 3.04%
Ratio of nonperforming assets to total assets 2.24 2.36 2.62
Ratio of allowance for loan losses to total loans 1.68 1.61 1.72
Ratio of allowance for loan losses to nonperforming loans 91.5 65.2 56.5
Impaired Loans:
Nonperforming loans $12,680 $17,124 $19,980
Troubled debt restructurings 7,561 7,388 7,556
Other impaired loans -- -- --
Total impaired loans $20,241 $24,512 $27,536
Past Due Loans:
30 - 59 days $1,477 $41 $176
60 - 89 days 74 2,026 528
Total $1,551 $2,067 $704
At or for the Three Months Ended
March 31, December 31, March 31,
2013 2012 2012
PERFORMANCE RATIOS (3):
Return on average assets 0.68% 0.73% 0.47%
Return on average equity 4.05 4.15 2.53
Net interest margin 3.07 3.11 3.23
Efficiency ratio (4) 63.1 62.8 64.7
OTHER:
Tangible book value per share $14.63 $14.69 $14.55
Employees (full-time equivalents) 138 141 134
(1) Represents stockholders' equity ratio of Fox Chase Bancorp, Inc.
(2) Represents regulatory capital ratios of Fox Chase Bank.
(3) Annualized
(4) Represents noninterest expense, excluding valuation adjustments on assets acquired through foreclosure and loss on extinguishment of debt, 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.
AVERAGE BALANCE SHEET
(Dollars in Thousands, Unaudited)
Three Months Ended March 31,
2013 2012
Interest Interest
Average and Yield/ Average and Yield/
Balance Dividends Cost (2) Balance Dividends Cost (2)
Assets:
Interest-earning assets:
Interest-earning demand deposits $5,146 $1 0.04% $8,690 $3 0.13%
Mortgage related securities 323,372 1,738 2.15% 274,353 1,979 2.88%
Taxable securities 20,970 71 1.34% 25,937 93 1.45%
Nontaxable securities -- -- 0.00% 1,873 19 4.02%
Loans (1) 688,284 8,062 4.73% 670,809 8,848 5.24%
Allowance for loan losses (11,443) (12,295)
Net loans 676,841 8,062 658,514 8,848
Total interest-earning assets 1,026,329 9,872 3.88% 969,367 10,942 4.49%
Noninterest-earning assets 47,877 42,858
Total assets $1,074,206 $1,012,225
Liabilities and equity:
Interest-bearing liabilities:
Interest-bearing deposits $580,026 $1,177 0.82% $577,628 $1,771 1.23%
Borrowings 192,188 782 1.65% 148,017 1,191 3.18%
Total interest-bearing liabilities 772,214 1,959 1.03% 725,645 2,962 1.63%
Noninterest-bearing deposits 112,873 93,770
Other noninterest-bearing liabilities 8,537 5,489
Total liabilities 893,624 824,904
Stockholders' equity 177,119 180,715
Accumulated comprehensive income 3,463 6,606
Total stockholder's equity 180,582 187,321
Total liabilities and stockholders' equity $1,074,206 $1,012,225
Net interest income $7,913 $7,980
Interest rate spread 2.85% 2.86%
Net interest margin 3.07% 3.23%
(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 Three Months Ended
March 31, 2013 December 31, 2012
Interest Interest
Average and Yield/ Average and Yield/
Balance Dividends Cost (2) Balance Dividends Cost (2)
Assets:
Interest-earning assets:
Interest-earning demand deposits $5,146 $1 0.04% $8,637 $3 0.11%
Mortgage related securities 323,372 1,738 2.15% 312,198 1,784 2.29%
Taxable securities 20,970 71 1.34% 19,677 77 1.57%
Nontaxable securities -- -- 0.00% -- -- 0.00%
Loans (1) 688,284 8,062 4.73% 664,939 8,086 4.84%
Allowance for loan losses (11,443) (11,614)
Net loans 676,841 8,062 653,325 8,086
Total interest-earning assets 1,026,329 9,872 3.88% 993,837 9,950 3.99%
Noninterest-earning assets 47,877 44,527
Total assets $1,074,206 $1,038,364
Liabilities and equity:
Interest-bearing liabilities:
Interest-bearing deposits $580,026 $1,177 0.82% $589,464 $1,361 0.92%
Borrowings 192,188 782 1.65% 142,745 756 2.11%
Total interest-bearing liabilities 772,214 1,959 1.03% 732,209 2,117 1.15%
Noninterest-bearing deposits 112,873 118,675
Other noninterest-bearing liabilities 8,537 4,281
Total liabilities 893,624 855,165
Stockholders' equity 177,119 177,214
Accumulated comprehensive income 3,463 5,985
Total stockholder's equity 180,582 183,199
Total liabilities and stockholders' equity $1,074,206 $1,038,364
Net interest income $7,913 $7,833
Interest rate spread 2.85% 2.84%
Net interest margin 3.07% 3.11%
(1) Nonperforming loans are included in average balance computation.
(2) Yields are not presented on a tax-equivalent basis.

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

Source:Fox Chase Bancorp, Inc.

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