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Fox Chase Bancorp, Inc. Announces Results For the Three and Six Months Ended June 30, 2013

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HATBORO, Pa., July 31, 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 $1.0 million, or $0.09 per share, and $2.9 million, or $0.25 per share, for the three and six months ended June 30, 2013, respectively, compared to net income of $539,000, or $0.05 per share, and $1.7 million, or $0.15 per share, for the three and six months ended June 30, 2012, respectively.

Commenting on the performance for the quarter, Thomas M. Petro, President and Chief Executive Officer said, "We are pleased with our quarterly performance as we were successful in reducing nonperforming assets to $19.9 million, or 1.78% of total assets, at June 30, 2013 while improving our coverage ratio for nonperforming loans to 105.1%. We believe the real estate market in the greater Philadelphia area has begun to stabilize, providing greater opportunity to exit certain types of nonperforming assets. Our business strategy, which is focused on expanding our commercial relationships, continues to yield positive results as commercial loans increased by $35 million during the quarter to $547 million and now represents 77% of our loan portfolio. Commercial deposits increased to $126 million, or 18% of our deposits, at June 30, 2013. We remain focused on increasing profitability and expanding our commercial business. Finally, we are excited to once again increase our quarterly dividend to $0.08 per share, as we continue to look for opportunities to return capital to our investors."

Highlights for the three and six months ended June 30, 2013 included:

  • Total assets were $1.12 billion at June 30, 2013 and $1.09 billion at December 31, 2012. Total loans were $701.1 million at June 30, 2013, an increase of $23.6 million, or 3.5%, from $677.5 million at March 31, 2013, and an increase of $17.2 million, or 2.5%, from $683.9 million at December 31, 2012. Total commercial loans increased $41.4 million, or 8.2%, from $505.4 million at December 31, 2012 to $546.8 million at June 30, 2013 primarily due to increases of $24.7 million in commercial and industrial loans and $32.0 million in multi-family and commercial real estate loans. This was partially offset by a decrease of $15.3 million in commercial construction loans. As expected, one- to four-family residential mortgage loans decreased $18.4 million due to normal amortization exceeding new loans originated and consumer loans decreased $6.2 million.
  • Total stockholders' equity was $173.4 million at June 30, 2013, a decrease of $8.0 million from $181.5 million at December 31, 2012, primarily due to the decrease in accumulated other comprehensive income of $6.9 million and the repurchase of 218,572 shares of Company common stock at an aggregate cost of $3.7 million. Excluding accumulated other comprehensive (loss) income, tangible book value per share increased by $0.05 per share for the quarter to $14.48 as of June 30, 2013.
  • Return on assets was 0.53% for the six months ended June 30, 2013 compared to 0.34% for the six months ended June 30, 2012.
  • Net interest income increased $196,000, or 2.6%, to $7.9 million for the three months ended June 30, 2013, compared to $7.7 million for the three months ended June 30, 2012, and increased $129,000, or 0.8%, to $15.8 million for the six months ended June 30, 2013, compared to $15.7 million for the six months ended June 30, 2012. Net interest income decreased $46,000, or 0.6%, to $7.9 million for the three months ended June 30, 2013, compared to $7.9 million for the three months ended March 31, 2013.
  • The net interest margin was 3.01% for the three months ended June 30, 2013, compared to 3.07% for the three months ended March 31, 2013 and 3.15% for the three months ended June 30, 2012. The decline is a result of yields on assets decreasing at a rate faster than our ability to reprice interest-bearing liabilities.
  • The efficiency ratio was 63.7% for the six months ended June 30, 2013, compared to 66.5% for the six months ended June 30, 2012.
  • Total noninterest income decreased $1.6 million to $2.2 million for the six months ended June 30, 2013 compared to $3.8 million for the six months ended June 30, 2012. This was primarily due to gains on the sales of investment securities of $2.3 million in 2012 compared to $532,000 in 2013.
  • Noninterest expense decreased $357,000, or 2.5%, to $14.0 million for the six months ended June 30, 2013, compared to $14.3 million for the six months ended June 30, 2012. Loss on extinguishment of debt decreased $3.0 million due to the extinguishment of debt during the six months ended June 30, 2012. No debt was extinguished during the six months ended June 30, 2013. This decrease was offset by an increase of $2.9 million in assets acquired through foreclosure expense as the Company recorded $3.0 million in valuation adjustments on assets acquired through foreclosure during the six months ended June 30, 2013 compared to $45,000 for the six months ended June 30, 2012. This increase was primarily driven by $2.9 million in valuation adjustments on foreclosed life insurance policies based on updated valuations for the quarter ended June 30, 2013. Salaries, benefits and other compensation increased $293,000 for the six months ended June 30, 2013, primarily as a result of increased staffing costs and annual compensation increases. These increases were offset by decreases of $182,000 in professional fees primarily due to lower loan work-out expense and $153,000 in data processing costs related to a renegotiated data processing contract that became effective in January 2013.
  • Excluding the previously mentioned loss on the extinguishment of debt of $3.0 million in the three months ended June 30, 2012 and valuation adjustments on assets acquired through foreclosure of $2.7 million in the three months ended June 30, 2013, noninterest expense decreased $124,000, or 2.2%, from $5.7 million for the three months ended June 30, 2012 to $5.6 million for the three months ended June 30, 2013.

Credit related items as of and for the quarter ended June 30, 2013 include:

  • Total credit related costs, which include (i) provision or credit for loan losses, (ii) valuation adjustments on assets acquired through foreclosure, offset by (iii) net gain on sale of assets acquired through foreclosure, totaled $1.8 million for the three months ended June 30, 2013, compared to $885,000 for the three months ended March 31, 2013 and $1.2 million for the three months ended June 30, 2012.
  • The allowance for loan losses was $10.5 million, or 1.48% of total loans, at June 30, 2013 compared to $11.6 million, or 1.68% of total loans, at March 31, 2013 and $11.2 million, or 1.61% of total loans, at December 31, 2012. The coverage ratio for nonperforming loans and the levels of nonperforming assets improved during the three months ended June 30, 2013;
  • There was a credit to the provision for loan losses of $783,000 for the three months ended June 30, 2013, compared to provisions of $640,000 for the three months ended March 31, 2013 and $1.3 million for the three months ended June 30, 2012 due to improving credit metrics in the Bank's loan portfolio;
  • Net loan charge-offs totaled $322,000 and $529,000 for the three and six months ended June 30, 2013, respectively, compared to $1.4 million and $3.4 million for the three and six months ended June 30, 2012, respectively;
  • Delinquent loans totaled $1.9 million at June 30, 2013, compared to $1.6 million at March 31, 2013 and $2.1 million at December 31, 2012.

The Company also announced that its Board of Directors increased its cash dividend to $0.08 per outstanding share of common stock. The dividend will be paid on or about August 29, 2013 to stockholders of record as of the close of business on August 15, 2013.

Fox Chase Bancorp, Inc. will host a conference call to discuss second quarter 2013 results on Thursday, August 1, 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 September 13, 2013 by dialing (877) 344-7529; use Conference ID: 10031660.

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 Six Months Ended
June 30, June 30,
2013 2012 2013 2012
(Unaudited)
INTEREST INCOME
Interest and fees on loans $8,016 $8,362 $16,078 $17,210
Interest on mortgage related securities 1,751 1,955 3,489 3,934
Interest on investment securities available-for-sale
Taxable 58 78 129 171
Nontaxable -- 14 -- 33
Other interest income -- 2 1 5
Total Interest Income 9,825 10,411 19,697 21,353
INTEREST EXPENSE
Deposits 1,141 1,637 2,318 3,408
Short-term borrowings 17 5 49 10
Federal Home Loan Bank advances 549 688 1,051 1,442
Other borrowed funds 251 410 499 842
Total Interest Expense 1,958 2,740 3,917 5,702
Net Interest Income 7,867 7,671 15,780 15,651
Provision (Credit) for loan losses (783) 1,291 (143) 2,566
Net Interest Income after Provision (Credit) for Loan Losses 8,650 6,380 15,923 13,085
NONINTEREST INCOME
Service charges and other fee income 462 385 823 774
Net gain on sale of assets acquired through foreclosure 185 98 181 127
Income on bank-owned life insurance 117 118 233 237
Equity in earnings of affiliate 165 120 335 235
Net gain on sale of investment securities 171 2,340 532 2,340
Other 39 19 89 61
Total Noninterest Income 1,139 3,080 2,193 3,774
NONINTEREST EXPENSE
Salaries, benefits and other compensation 3,480 3,353 6,985 6,692
Occupancy expense 393 420 840 879
Furniture and equipment expense 117 138 241 290
Data processing costs 367 472 765 918
Professional fees 488 489 776 958
Marketing expense 78 106 108 152
FDIC premiums 165 201 350 382
Assets acquired through foreclosure expense 2,810 38 3,095 153
Loss on extinguishment of debt -- 3,018 -- 3,018
Other 409 464 822 897
Total Noninterest Expense 8,307 8,699 13,982 14,339
Income Before Income Taxes 1,482 761 4,134 2,520
Income tax provision 438 222 1,263 794
Net Income $1,044 $539 $2,871 $1,726
Earnings per share:
Basic $0.09 $0.05 $0.25 $0.15
Diluted $0.09 $0.05 $0.25 $0.15
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Dollars in Thousands, Except Share Data)
June 30, December 31,
2013 2012
(Unaudited) (Audited)
ASSETS
Cash and due from banks $213 $162
Interest-earning demand deposits in other banks 8,859 24,928
Total cash and cash equivalents 9,072 25,090
Investment securities available-for-sale 10,475 12,491
Mortgage related securities available-for-sale 273,037 283,616
Mortgage related securities held-to-maturity (fair value of $63,704 at June 30, 2013 and $29,451 at December 31, 2012) 64,225 28,369
Loans held for sale 3,157 --
Loans, net of allowance for loan losses of $10,498 at June 30, 2013 and $11,170 at December 31, 2012 701,112 683,865
Federal Home Loan Bank stock, at cost 9,610 8,097
Bank-owned life insurance 14,310 14,077
Premises and equipment, net 10,084 10,443
Assets acquired through foreclosure 9,948 8,524
Real estate held for investment 1,620 1,620
Accrued interest receivable 3,301 3,223
Mortgage servicing rights, net 169 170
Deferred tax asset, net 7,361 2,953
Other assets 4,873 5,803
Total Assets $1,122,354 $1,088,341
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Deposits $700,614 $687,409
Short-term borrowings 70,300 70,500
Federal Home Loan Bank advances 140,000 110,000
Other borrowed funds 30,000 30,000
Advances from borrowers for taxes and insurance 1,831 1,699
Accrued interest payable 303 330
Accrued expenses and other liabilities 5,880 6,938
Total Liabilities 948,928 906,876
STOCKHOLDERS' EQUITY
Preferred stock ($.01 par value; 1,000,000 shares authorized, none issued and outstanding at June 30, 2013 and December 31, 2012) -- --
Common stock ($.01 par value; 60,000,000 shares authorized, 12,142,600 shares issued and outstanding at June 30, 2013 and 12,356,564 shares issued and outstanding at December 31, 2012) 146 146
Additional paid-in capital 136,743 136,132
Treasury stock, at cost (2,468,172 shares at June 30, 2013 and 2,249,600 shares at December 31, 2012) (33,436) (29,733)
Common stock acquired by benefit plans (9,694) (10,228)
Retained earnings 82,076 80,608
Accumulated other comprehensive (loss) income, net (2,409) 4,540
Total Stockholders' Equity 173,426 181,465
Total Liabilities and Stockholders' Equity $1,122,354 $1,088,341
SELECTED CONSOLIDATED FINANCIAL AND OTHER DATA OF THE COMPANY (UNAUDITED)
(Dollars in Thousands, Except Per Share Data)
June 30, March 31, December 31, June 30,
2013 2013 2012 2012
CAPITAL RATIOS:
Stockholders' equity (to total assets) (1) 15.45% 16.53% 16.67% 18.05%
Tier 1 capital (to adjusted assets) (2) 12.78 13.13 12.90 14.82
Tier 1 risk –based capital (to risk-weighted assets) (2) 18.94 19.50 19.45 22.32
Total risk-based capital (to risk-weighted assets) (2) 19.98 20.53 20.48 23.33
ASSET QUALITY INDICATORS:
Nonperforming Assets:
Nonaccruing loans $9,989 $12,680 $17,124 $17,271
Accruing loans past due 90 days or more -- -- -- --
Total nonperforming loans $9,989 $12,680 $17,124 $17,271
Assets acquired through foreclosure 9,948 11,592 8,524 8,165
Total nonperforming assets $19,937 $24,272 $25,648 $25,436
Ratio of nonperforming loans to total loans 1.40% 1.84% 2.46% 2.59%
Ratio of nonperforming assets to total assets 1.78 2.24 2.36 2.51
Ratio of allowance for loan losses to total loans 1.48 1.68 1.61 1.68
Ratio of allowance for loan losses to nonperforming loans 105.1 91.5 65.2 65.0
Impaired Loans:
Nonperforming loans $9,989 $12,680 $17,124 $17,271
Troubled debt restructurings 7,265 7,561 7,388 7,747
Other impaired loans -- -- -- --
Total impaired loans $17,254 $20,241 $24,512 $25,018
Past Due Loans:
30 - 59 days $1,618 $1,477 $41 $1,546
60 - 89 days 323 74 2,026 754
Total $1,941 $1,551 $2,067 $2,300
(1) Represents stockholders' equity ratio of Fox Chase Bancorp, Inc.
(2) Represents regulatory capital ratios of Fox Chase Bank.
At or for the Three Months Ended
June 30, March 31, December 31, June 30,
2013 2013 2012 2012
PERFORMANCE RATIOS (3):
Return on average assets 0.38% 0.68% 0.73% 0.22%
Return on average equity 2.34 4.05 4.15 1.16
Net interest margin 3.01 3.07 3.11 3.15
Efficiency ratio (4) 64.2 63.1 62.8 68.3
OTHER:
Tangible book value per share - Core (5) $14.48 $14.43 $14.32 $14.11
Tangible book value per share (6) $14.28 $14.63 $14.69 $14.50
Employees (full-time equivalents) 143 138 141 138
At or for the Six Months Ended
June 30, June 30,
2013 2012
PERFORMANCE RATIOS (3):
Return on average assets 0.53% 0.34%
Return on average equity 3.20 1.85
Net interest margin 3.04 3.19
Efficiency ratio (4) 63.7 66.5
(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.
(5) Total stockholders' equity, excluding the impact of accumulated other comprehensive (loss) income, net ($2.4 million loss at June 30, 2013) divided by total shares outstanding.
(6) Total stockholders' equity divided by total shares outstanding. Tangible book value per share and book value per share were the same for all periods indicated.
AVERAGE BALANCE SHEET
(Dollars in Thousands, Unaudited)
Three Months Ended June 30,
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 $5,822 $ -- 0.04% $7,207 $2 0.10%
Mortgage related securities 331,110 1,751 2.12% 281,767 1,955 2.78%
Taxable securities 20,713 58 1.14% 22,059 78 1.40%
Nontaxable securities -- -- 0.00% 1,075 14 5.45%
Loans (1) 690,584 8,016 4.65% 653,730 8,362 5.08%
Allowance for loan losses (11,962) (11,597)
Net loans 678,622 8,016 642,133 8,362
Total interest-earning assets 1,036,267 9,825 3.80% 954,241 10,411 4.34%
Noninterest-earning assets 51,250 43,375
Total assets $1,087,517 $997,616
Liabilities and equity:
Interest-bearing liabilities:
Interest-bearing deposits $581,391 $1,141 0.79% 569,395 1,637 1.16%
Borrowings 196,632 817 1.67% 137,038 1,103 3.18%
Total interest-bearing liabilities 778,023 1,958 1.01% 706,433 2,740 1.55%
Noninterest-bearing deposits 124,025 101,143
Other noninterest-bearing liabilities 6,727 4,712
Total liabilities 908,775 812,288
Stockholders' equity 176,645 178,651
Accumulated comprehensive income 2,097 6,677
Total stockholder's equity 178,742 185,328
Total liabilities and stockholders' equity $1,087,517 $997,616
Net interest income $7,867 $7,671
Interest rate spread 2.79% 2.79%
Net interest margin 3.01% 3.15%
(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
June 30, 2013 March 31, 2013
Interest Interest
Average and Yield/ Average and Yield/
Balance Dividends Cost (2) Balance Dividends Cost (2)
Assets:
Interest-earning assets:
Interest-earning demand deposits $5,822 $ -- 0.04% $5,146 $1 0.04%
Mortgage related securities 331,110 1,751 2.12% 323,372 1,738 2.15%
Taxable securities 20,713 58 1.14% 20,970 71 1.34%
Nontaxable securities -- -- 0.00% -- -- 0.00%
Loans (1) 690,584 8,016 4.65% 688,284 8,062 4.73%
Allowance for loan losses (11,962) (11,443)
Net loans 678,622 8,016 676,841 8,062
Total interest-earning assets 1,036,267 9,825 3.80% 1,026,329 9,872 3.88%
Noninterest-earning assets 51,250 47,877
Total assets $1,087,517 $1,074,206
Liabilities and equity:
Interest-bearing liabilities:
Interest-bearing deposits $581,391 $1,141 0.79% $580,026 $1,177 0.82%
Borrowings 196,632 817 1.67% 192,188 782 1.65%
Total interest-bearing liabilities 778,023 1,958 1.01% 772,214 1,959 1.03%
Noninterest-bearing deposits 124,025 112,873
Other noninterest-bearing liabilities 6,727 8,537
Total liabilities 908,775 893,624
Stockholders' equity 176,645 177,119
Accumulated comprehensive income 2,097 3,463
Total stockholder's equity 178,742 180,582
Total liabilities and stockholders' equity $1,087,517 $1,074,206
Net interest income $7,867 $7,913
Interest rate spread 2.79% 2.85%
Net interest margin 3.01% 3.07%
(1) Nonperforming loans are included in average balance computation.
(2) Yields are not presented on a tax-equivalent basis.
AVERAGE BALANCE SHEET
(Dollars in Thousands, Unaudited)
Six Months Ended June 30,
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 $5,484 $1 0.04% $7,948 $5 0.11%
Mortgage related securities 327,241 3,489 2.13% 278,061 3,934 2.83%
Taxable securities 20,841 129 1.24% 23,998 171 1.43%
Nontaxable securities -- -- 0.00% 1,474 33 4.54%
Loans (1) 689,434 16,078 4.69% 662,270 17,210 5.16%
Allowance for loan losses (11,703) (11,947)
Net loans 677,731 16,078 650,323 17,210
Total interest-earning assets 1,031,297 19,697 3.80% 961,804 21,353 4.36%
Noninterest-earning assets 49,565 43,116
Total assets $1,080,862 $1,004,920
Liabilities and equity:
Interest-bearing liabilities:
Interest-bearing deposits $580,709 $2,318 0.80% 573,511 3,408 1.20%
Borrowings 194,410 1,599 1.66% 142,528 2,294 3.18%
Total interest-bearing liabilities 775,119 3,917 1.02% 716,039 5,702 1.59%
Noninterest-bearing deposits 118,449 97,457
Other noninterest-bearing liabilities 7,632 5,100
Total liabilities 901,200 818,596
Stockholders' equity 176,882 179,683
Accumulated comprehensive income 2,780 6,641
Total stockholder's equity 179,662 186,324
Total liabilities and stockholders' equity $1,080,862 $1,004,920
Net interest income $15,780 $15,651
Interest rate spread 2.78% 2.77%
Net interest margin 3.04% 3.19%
(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.