FARMINGTON, Conn., April 20, 2016 (GLOBE NEWSWIRE) -- First Connecticut Bancorp, Inc. (the “Company”) (NASDAQ:FBNK), the holding company for Farmington Bank (the “Bank”), reported net income of $3.6 million, or $0.24 diluted earnings per share for the quarter ended March 31, 2016 compared to net income of $2.5 million, or $0.17 diluted earnings per share for the quarter ended March 31, 2015.

“Despite the continued challenging operating environment, we are pleased with our first quarter results reflecting continued growth in tangible book value and earnings per share. Last year we indicated loan growth would slow during 2016, as we believe competition in the market has loosened credit standards, and we believe taking on additional credit risk to drive earnings is not prudent. We remain diligent with respect to expense control while maintaining solid overall risk management fundamentals,” stated John J. Patrick Jr., First Connecticut Bancorp’s Chairman, President and CEO.

“We are pleased with our deposit growth especially in our new western Massachusetts branches where we have over $80.0 million in new deposits since the two branches opened in the fourth quarter of 2015. Additionally, we look forward to expanding into Vernon and Manchester, CT later this year.”

Financial Highlights

• Net interest income increased $143,000 to $17.5 million in the first quarter of 2016 compared to the linked quarter and increased $1.1 million or 7% compared to the first quarter of 2015.

• Net interest rate margin increased 6 basis points to 2.82% in the first quarter of 2016 compared to 2.76% in the linked quarter and 2.83% in the prior year quarter.

• Core noninterest expense to average assets was 2.27% in the first quarter of 2016 compared to 2.37% in the linked quarter and 2.34% in the first quarter of 2015.

• Our loan to deposit ratio improved to 113.0% compared to 118.6% at December 31, 2015 and 116.9% at March 31, 2015.

• Tangible book value per share increased to $15.72 for the quarter ended March 31, 2016 compared to $15.47 on a linked quarter basis and $14.82 at March 31, 2015.

• Loans remained flat at $2.4 billion during the quarter ended March 31, 2016 and increased $164.3 million or 7% from a year ago. 

• Overall deposits increased $106.5 million to $2.1 billion in the first quarter of 2016 compared to the linked quarter and increased $209.9 million or 11% from a year ago. 

• Checking accounts grew by 2.5% or 1,284 net new accounts in the first quarter of 2016 and by 13.1% or 6,079 net new accounts from a year ago.

• Net gain on loans sold decreased $77,000 to $490,000 in the first quarter of 2016 compared to the linked quarter primarily due to a seasonal decrease in volume.

• Asset quality improved as loan delinquencies 30 days and greater represented 0.55% of total loans at March 31, 2016 compared to 0.63% at December 31, 2015 and 0.64% at March 31, 2015.  Non-accrual loans represented 0.55% of total loans compared to 0.63% of total loans on a linked quarter basis and 0.64% of total loans at March 31, 2015. 

• The allowance for loan losses represented 0.85% of total loans at March 31, 2016, 0.86% at December 31, 2015 and 0.87% at March 31, 2015. 

• The Company paid a quarterly cash dividend of $0.07 per share during the first quarter, an increase of $0.01 compared to the linked quarter.

First quarter 2016 compared with fourth quarter 2015

Net interest income

• Net interest income increased $143,000 to $17.5 million in the first quarter of 2016 compared to the linked quarter primarily due to a 5 basis point increase in the loans yield offset by increases in interest expense related to money market and certificate of deposit promotions.

• Net interest margin increased 6 basis points to 2.82% in the first quarter of 2016 compared to 2.76% in the linked quarter primarily due to a 5 basis point increase in the yield on loans. 

Provision for loan losses

• Provision for loan losses was $217,000 for the first quarter of 2016 compared to $776,000 for the linked quarter.  The decrease was primarily due to $293,000 in charge-offs during the linked quarter related to one commercial customer who is in bankruptcy.

• Net charge-offs in the quarter were $241,000 or 0.04% to average loans (annualized) compared to $588,000 or 0.10% to average loans (annualized) in the linked quarter.

• The allowance for loan losses represented 0.85% of total loans at March 31, 2016 compared to 0.86% of total loans at December 31, 2015. 

Noninterest income

• Total noninterest income decreased $568,000 to $2.9 million in the first quarter of 2016 compared to the linked quarter primarily due to a $312,000 decrease in bank owned life insurance income.

• Other income includes swap fees totaling $315,000 compared to $313,000 in the linked quarter.

• Net gain on loans sold decreased $77,000 to $490,000 primarily due to a seasonal decrease in volume.

Noninterest expense

• Noninterest expense decreased $681,000 in the first quarter of 2016 to $15.3 million compared to the linked quarter primarily due to a $352,000 decrease in salaries and employee benefits and a $342,000 decrease in marketing.

• Salaries and employee benefits decreased $352,000 on a linked quarter basis primarily due to a $465,000 decrease in incentives offset by a $161,000 increase in employee benefits.

• Marketing decreased $342,000 on a linked quarter basis primarily due to costs incurred in the linked quarter related to our expansion into western Massachusetts.

Income tax expense

• Income tax expense was $1.3 million in the first quarter of 2016 compared to $1.7 million in the linked quarter. The decrease in income tax expense was primarily due to a linked quarter $768,000 valuation allowance related to a deferred tax asset associated with the establishment of the Bank’s foundation in 2011 offset by an increase in income before taxes.

First quarter 2016 compared with first quarter 2015

Net interest income

• Net interest income increased $1.1 million to $17.5 million in the first quarter of 2016 compared to the prior year quarter due primarily to a $199.1 million increase in the average loan balance offset by a $660,000 increase in interest expense.  

• Net interest margin decreased 1 basis point to 2.82% in the first quarter of 2016 compared to 2.83% in the prior year quarter.

Provision for loan losses

• Provision for loan losses was $217,000 for the first quarter of 2016 compared to $615,000 for the prior year quarter.

• Net charge-offs in the quarter were $241,000 or 0.04% to average loans (annualized) compared to $343,000 or 0.06% to average loans (annualized) in the prior year quarter.

• The allowance for loan losses represented 0.85% of total loans at March 31, 2016 and 0.87% of total loans at March 31, 2015. 

Noninterest income

• Total noninterest income increased $236,000 to $2.9 million in the first quarter of 2016 compared to the prior year quarter primarily due to a $111,000 increase in customer service fees, $141,000 increase in bank owned life insurance income and a $282,000 increase in other noninterest income offset by a $273,000 decrease in gain on sales of investments.

• Other income increased $282,000 to $458,000 in the first quarter of 2016 compared to the prior year quarter primarily due to a $314,000 increase in swaps fees offset by a $76,000 decrease in mortgage banking derivatives income.

• There was no gain on sale of investments in the first quarter of 2016 compared to $273,000 gain on sale of investments in the prior year quarter.

Noninterest expense

• Noninterest expense increased $340,000 in the first quarter of 2016 to $15.3 million compared to the prior year quarter primarily due to a $586,000 increase in salaries and employee benefits offset by decreases in occupancy expense and other operating expenses.

• Salaries and employee benefits increased $586,000 primarily due to our branch expansion into western Massachusetts and to maintain the Bank’s growth.

Income tax expense

• Income tax expense was $1.3 million in the first quarter of 2016 compared to $976,000 in the prior year quarter.  The increase in income tax expense in the first quarter of 2016 was primarily due to a $1.4 million increase in income before taxes.

March 31, 2016 compared to March 31, 2015

Financial Condition

• Total assets increased $152.5 million or 6% at March 31, 2016 to $2.7 billion compared to $2.5 billion at March 31, 2015, largely reflecting an increase in net loans.

• Our investment portfolio totaled $148.6 million at March 31, 2016 compared to $194.8 million at March 31, 2015, a decrease of $46.2 million due to reduction in collateral requirements.

• Net loans increased $163.3 million or 8% at March 31, 2016 to $2.4 billion compared to $2.2 billion at March 31, 2015 due to our continued focus on commercial and residential lending.

• Deposits increased $209.9 million to $2.1 billion at March 31, 2016 compared to $1.9 billion at March 31, 2015 primarily due to increases in NOW accounts, 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 $43.2 million at March 31, 2016.

• Federal Home Loan Bank of Boston advances decreased $49.1 million to $259.6 million at March 31, 2016 compared to $308.7 million at March 31, 2015.  Advances are used to support loan and securities growth.

Asset Quality

• At March 31, 2016, the allowance for loan losses represented 0.85% of total loans and 154.08% of non-accrual loans, compared to 0.86% of total loans and 135.44% of non-accrual loans at December 31, 2015 and 0.87% of total loans and 136.53% of non-accrual loans at March 31, 2015.

• Loan delinquencies 30 days and greater represented 0.55% of total loans at March 31, 2016 compared to 0.63% of total loans at December 31, 2015 and 0.64% of total loans at March 31, 2015.

• Non-accrual loans represented 0.55% of total loans at March 31, 2016 compared to 0.63% of total loans at December 31, 2015 and 0.64% of total loans at March 31, 2015.

• Net charge-offs in the quarter were $241,000 or 0.04% to average loans (annualized) compared to $588,000 or 0.10% to average loans (annualized) in the linked quarter and $343,000 or 0.06% 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 March 31, 2016. 

• Tangible book value per share is $15.72 compared to $15.47 on a linked quarter basis and $14.82 at March 31, 2015.

• During the first quarter of 2016, the Company repurchased 147,100 shares of common stock at an average price per share of $16.13 at a total cost of $2.4 million.  Repurchased shares are held as treasury stock and will be available for general corporate purposes.  The Company had 610,645 shares remaining to repurchase at March 31, 2016 from prior regulatory approval.

• At March 31, 2016, 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, April 21, 2016 at 10:30am Eastern Time to discuss first 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
	March 31,				December 31,				September 30,				June 30,				March 31,
(Dollars in thousands, except per share data)		2016				2015				2015				2015				2015
Selected Financial Condition Data:
Total assets	$	2,701,614			$	2,708,546			$	2,708,454			$	2,626,217			$	2,549,074
Cash and cash equivalents		59,166				59,139				47,447				42,992				44,847
Securities held-to-maturity, at amortized cost		19,964				32,246				25,486				34,366				21,006
Securities available-for-sale, at fair value		128,681				132,424				171,390				143,799				173,829
Federal Home Loan Bank of Boston stock, at cost		15,688				21,729				23,038				21,496				19,785
Loans, net		2,350,245				2,341,598				2,318,257				2,268,385				2,186,937
Deposits		2,097,832				1,991,358				1,973,355				1,878,040				1,887,954
Federal Home Loan Bank of Boston advances		259,600				377,600				373,600				400,700				308,700
Total stockholders' equity		248,013				245,721				243,195				239,082				237,709
Allowance for loan losses		20,174				20,198				20,010				19,581				19,232
Non-accrual loans		13,093				14,913				16,668				12,973				14,086
Impaired loans		38,588				41,017				42,664				39,975				42,130
Loan delinquencies 30 days and greater		13,095				14,945				15,598				13,244				14,193
Selected Operating Data:
Interest income	$	21,323			$	21,094			$	21,094			$	20,164			$	19,532
Interest expense		3,817				3,731				3,422				3,065				3,157
Net interest income		17,506				17,363				17,672				17,099				16,375
Provision for loan losses		217				776				386				663				615
Net interest income after provision for loan losses		17,289				16,587				17,286				16,436				15,760
Noninterest income		2,900				3,468				3,241				4,074				2,664
Noninterest expense		15,277				15,958				14,718				15,597				14,937
Income before income taxes		4,912				4,097				5,809				4,913				3,487
Income tax expense		1,299				1,716				1,594				1,441				976
Net income	$	3,613			$	2,381			$	4,215			$	3,472			$	2,511
Performance Ratios (annualized):
Return on average assets		0.54	%			0.35	%			0.62	%			0.54	%			0.40	%
Return on average equity		5.82	%			3.86	%			6.92	%			5.77	%			4.24	%
Net interest rate spread (1)		2.65	%			2.61	%			2.65	%			2.72	%			2.68	%
Net interest rate margin (2)		2.82	%			2.76	%			2.79	%			2.86	%			2.83	%
Non-interest expense to average assets (3)		2.27	%			2.37	%			2.26	%			2.39	%			2.34	%
Efficiency ratio (4)		75.19	%			78.19	%			73.04	%			77.13	%			78.35	%
Average interest-earning assets to average
interest-bearing liabilities		128.45	%			127.48	%			126.44	%			126.98	%			126.86	%
Loans to deposits		112.99	%			118.60	%			118.49	%			121.83	%			116.86	%
Asset Quality Ratios:
Allowance for loan losses as a percent of total loans		0.85	%			0.86	%			0.86	%			0.86	%			0.87	%
Allowance for loan losses as a percent of
non-accrual loans		154.08	%			135.44	%			120.05	%			150.94	%			136.53	%
Net charge-offs (recoveries) to average loans (annualized)		0.04	%			0.10	%			(0.01	%)			0.06	%			0.06	%
Non-accrual loans as a percent of total loans		0.55	%			0.63	%			0.71	%			0.57	%			0.64	%
Non-accrual loans as a percent of total assets		0.48	%			0.55	%			0.62	%			0.49	%			0.55	%
Loan delinquencies 30 days and greater as a
percent of total loans		0.55	%			0.63	%			0.67	%			0.58	%			0.64	%
Per Share Related Data:
Basic earnings per share	$	0.24			$	0.16			$	0.28			$	0.23			$	0.17
Diluted earnings per share	$	0.24			$	0.16			$	0.28			$	0.23			$	0.17
Dividends declared per share	$	0.07			$	0.06			$	0.06			$	0.05			$	0.05
Tangible book value (5)	$	15.72			$	15.47			$	15.30			$	15.01			$	14.82
Common stock shares outstanding		15,780,657				15,881,663				15,893,263				15,922,888				16,035,005
Weighted-average basic shares outstanding		14,720,892				14,785,058				14,632,951				14,694,472				14,722,112
Weighted-average diluted shares outstanding		15,012,540				15,146,365				14,887,461				14,839,454				14,850,597
(1) Represents the difference between the yield on average interest-earning assets and the cost of average interest-bearing liabilities on a tax-equivalent basis.
(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
	March 31,				December 31,				September 30,				June 30,				March 31,
(Dollars in thousands)		2016				2015				2015				2015				2015
Capital Ratios:
Equity to total assets at end of period		9.18	%			9.07	%			8.98	%			9.10	%			9.33	%
Average equity to average assets		9.22	%			9.17	%			9.00	%			9.36	%			9.45	%
Total Capital (to Risk Weighted Assets)		12.88	%	*		12.88	%			12.72	%			13.11	%			13.44	%
Tier I Capital (to Risk Weighted Assets)		11.92	%	*		11.91	%			11.76	%			12.12	%			12.44	%
Common Equity Tier I Capital		11.92	%	*		11.91	%			11.76	%			12.12	%			12.44	%
Tier I Leverage Capital (to Average Assets)		9.44	%	*		9.39	%			9.24	%			9.57	%			9.72	%
Total equity to total average assets		9.20	%			9.13	%			8.98	%			9.29	%			9.48	%
* Estimated
Loans and Allowance for Loan Losses:
Real estate
Residential	$	855,148			$	849,722			$	851,784			$	888,376			$	850,819
Commercial		893,477				887,431				862,367				817,955				769,712
Construction		36,557				30,895				29,244				42,858				53,913
Installment		3,338				2,970				3,007				3,103				3,114
Commercial		402,960				409,550				410,704				359,537				352,085
Collateral		1,668				1,668				1,632				1,551				1,676
Home equity line of credit		172,325				174,701				174,579				169,507				169,969
Revolving credit		77				91				96				77				80
Resort		759				784				807				837				880
Total loans		2,366,309				2,357,812				2,334,220				2,283,801				2,202,248
Net deferred loan costs		4,110				3,984				4,047				4,165				3,921
Loans		2,370,419				2,361,796				2,338,267				2,287,966				2,206,169
Allowance for loan losses		(20,174	)			(20,198	)			(20,010	)			(19,581	)			(19,232	)
Loans, net	$	2,350,245			$	2,341,598			$	2,318,257			$	2,268,385			$	2,186,937
Deposits:
Noninterest-bearing demand deposits	$	396,356			$	401,388			$	359,757			$	377,092			$	337,211
Interest-bearing
NOW accounts		529,267				468,054				527,128				425,789				499,130
Money market		488,497				460,737				440,249				430,558				462,532
Savings accounts		223,188				220,389				211,170				220,154				214,083
Time deposits		460,524				440,790				435,051				424,447				374,998
Total interest-bearing deposits		1,701,476				1,589,970				1,613,598				1,500,948				1,550,743
Total deposits	$	2,097,832			$	1,991,358			$	1,973,355			$	1,878,040			$	1,887,954

 

First Connecticut Bancorp, Inc.
Consolidated Statements of Condition (Unaudited)
							March 31,				December 31,				March 31,
								2016				2015				2015
(Dollars in thousands)
Assets
Cash and due from banks							$	36,418			$	45,732			$	33,175
Interest bearing deposits with other institutions								22,748				13,407				11,672
Total cash and cash equivalents								59,166				59,139				44,847
Securities held-to-maturity, at amortized cost								19,964				32,246				21,006
Securities available-for-sale, at fair value								128,681				132,424				173,829
Loans held for sale								6,145				9,637				2,187
Loans (1)								2,370,419				2,361,796				2,206,169
Allowance for loan losses								(20,174	)			(20,198	)			(19,232	)
Loans, net								2,350,245				2,341,598				2,186,937
Premises and equipment, net								18,210				18,565				18,289
Federal Home Loan Bank of Boston stock, at cost								15,688				21,729				19,785
Accrued income receivable								6,346				6,747				6,047
Bank-owned life insurance								50,725				50,618				39,960
Deferred income taxes								15,506				15,443				16,759
Prepaid expenses and other assets								30,938				20,400				19,428
Total assets							$	2,701,614			$	2,708,546			$	2,549,074
Liabilities and Stockholders' Equity
Deposits
Interest-bearing							$	1,701,476			$	1,589,970			$	1,550,743
Noninterest-bearing								396,356				401,388				337,211
								2,097,832				1,991,358				1,887,954
Federal Home Loan Bank of Boston advances								259,600				377,600				308,700
Repurchase agreement borrowings								10,500				10,500				10,500
Repurchase liabilities								31,118				35,769				59,198
Accrued expenses and other liabilities								54,551				47,598				45,013
Total liabilities								2,453,601				2,462,825				2,311,365
Stockholders' Equity
Common stock								181				181				181
Additional paid-in-capital								182,747				181,997				179,683
Unallocated common stock held by ESOP								(11,363	)			(11,626	)			(12,422	)
Treasury stock, at cost								(32,355	)			(30,602	)			(28,725	)
Retained earnings								115,444				112,933				105,339
Accumulated other comprehensive loss								(6,641	)			(7,162	)			(6,347	)
Total stockholders' equity								248,013				245,721				237,709
Total liabilities and stockholders' equity							$	2,701,614			$	2,708,546			$	2,549,074
(1) Loans include net deferred fees and unamortized premiums of $4.1 million, $4.0 million and $3.9 million at March 31, 2016,
	December 31, 2015 and March 31, 2015, respectively.

 

First Connecticut Bancorp, Inc.
Consolidated Statements of Income (Unaudited)
						Three Months Ended
						March 31,				December 31,				March 31,
(Dollars in thousands, except per share data)							2016				2015				2015
Interest income
Interest and fees on loans
Mortgage						$	15,907			$	15,670			$	15,058
Other							4,714				4,731				3,995
Interest and dividends on investments
United States Government and agency obligations							418				425				323
Other bonds							13				13				18
Corporate stocks							239				248				131
Other interest income							32				7				7
Total interest income							21,323				21,094				19,532
Interest expense
Deposits							2,736				2,611				2,209
Interest on borrowed funds							967				1,004				751
Interest on repo borrowings							95				97				163
Interest on repurchase liabilities							19				19				34
Total interest expense							3,817				3,731				3,157
Net interest income							17,506				17,363				16,375
Provision for loan losses							217				776				615
Net interest income after provision for loan losses
							17,289				16,587				15,760
Noninterest income
Fees for customer services							1,484				1,566				1,373
Gain on sale of investments							-				-				273
Net gain on loans sold							490				567				520
Brokerage and insurance fee income							54				52				49
Bank owned life insurance income							414				726				273
Other							458				557				176
Total noninterest income							2,900				3,468				2,664
Noninterest expense
Salaries and employee benefits							9,376				9,728				8,790
Occupancy expense							1,219				1,257				1,367
Furniture and equipment expense							1,061				1,057				1,036
FDIC assessment							404				430				412
Marketing							421				763				409
Other operating expenses							2,796				2,723				2,923
Total noninterest expense							15,277				15,958				14,937
Income before income taxes							4,912				4,097				3,487
Income tax expense							1,299				1,716				976
Net income						$	3,613			$	2,381			$	2,511
Earnings per share:
Basic						$	0.24			$	0.16			$	0.17
Diluted							0.24				0.16				0.17
Weighted average shares outstanding:
Basic							14,720,892				14,785,058				14,722,112
Diluted							15,012,540				15,146,365				14,850,597

 

First Connecticut Bancorp, Inc.
Consolidated Average Balances, Yields, and Rates (Unaudited)
	For The Three Months Ended
	March 31, 2016										December 31, 2015										March 31, 2015
	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	$	2,366,935		$	21,132			3.59	%		$	2,346,218		$	20,916			3.54	%		$	2,167,879		$	19,391			3.63	%
Securities		154,534			483			1.26	%			185,697			495			1.06	%			196,087			394			0.81	%
Federal Home Loan Bank of Boston stock		19,804			187			3.80	%			21,729			191			3.49	%			19,785			79			1.62	%
Federal funds and other earning assets		27,148			32			0.47	%			14,258			7			0.19	%			12,394			6			0.20	%
Total interest-earning assets		2,568,421			21,834			3.42	%			2,567,902			21,609			3.34	%			2,396,145			19,870			3.36	%
Noninterest-earning assets		127,192										122,500										112,534
Total assets	$	2,695,613									$	2,690,402									$	2,508,679
Interest-bearing liabilities:
NOW accounts	$	522,876		$	380			0.29	%		$	498,658		$	363			0.29	%		$	449,897		$	321			0.29	%
Money market		478,954			995			0.84	%			459,047			957			0.83	%			480,687			970			0.82	%
Savings accounts		216,102			58			0.11	%			216,219			54			0.10	%			208,626			57			0.11	%
Certificates of deposit		450,917			1,303			1.16	%			436,676			1,237			1.12	%			367,501			861			0.95	%
Total interest-bearing deposits		1,668,849			2,736			0.66	%			1,610,600			2,611			0.64	%			1,506,711			2,209			0.59	%
Federal Home Loan Bank of Boston Advances		272,610			967			1.43	%			343,024			1,004			1.16	%			304,411			751			1.00	%
Repurchase agreement borrowings		10,500			95			3.64	%			10,500			97			3.67	%			19,133			163			3.46	%
Repurchase liabilities		47,543			19			0.16	%			50,264			19			0.15	%			58,507			34			0.24	%
Total interest-bearing liabilities		1,999,502			3,817			0.77	%			2,014,388			3,731			0.73	%			1,888,762			3,157			0.68	%
Noninterest-bearing deposits		390,926										380,041										330,865
Other noninterest-bearing liabilities		56,765										49,273										52,092
Total liabilities		2,447,193										2,443,702										2,271,719
Stockholders' equity		248,420										246,700										236,960
Total liabilities and stockholders' equity	$	2,695,613									$	2,690,402									$	2,508,679
Tax-equivalent net interest income				$	18,017									$	17,878									$	16,713
Less: tax-equivalent adjustment					(511	)									(515	)									(338	)
Net interest income				$	17,506									$	17,363									$	16,375
Net interest rate spread (2)								2.65	%									2.61	%									2.68	%
Net interest-earning assets (3)	$	568,919									$	553,514									$	507,383
Net interest margin (4)								2.82	%									2.76	%									2.83	%
Average interest-earning assets to average interest-bearing liabilities
					128.45	%									127.48	%									126.86	%
(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 on a tax-equivalent basis.
(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 March 31, 2016, December 31, 2015, September 30, 2015, June 30, 2015 and March 31, 2015.  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
	March 31,				December 31,				September 30,				June 30,				March 31,
(Dollars in thousands, except per share data)		2016				2015				2015				2015				2015
Net Income	$	3,613			$	2,381			$	4,215			$	3,472			$	2,511
Adjustments:
Plus: Accelerated vesting of stock compensation		-				-				-				258				140
Plus: Employee severance		-				-				-				-				93
Less: Prepayment penalty fees		(10	)			(43	)			-				(35	)			-
Less: Non-recurring payment related to a loan participation		-				-				-				-				-
Less: Gain on sale of foreclosed real estate		-				-				(557	)			-				-
Less: Bank-owned life insurance proceeds		(77	)			(379	)			-				-				-
Less: Net gain on sales of investments		-				-				-				(1,250	)			(273	)
Total core adjustments before taxes		(87	)			(422	)			(557	)			(1,027	)			(40	)
Tax benefit on core adjustments		4				15				195				359				14
Deferred tax asset valuation allowance (1)		-				768				-				-				-
Total core adjustments after taxes		(83	)			361				(362	)			(668	)			(26	)
Total core net income	$	3,530			$	2,742			$	3,853			$	2,804			$	2,485
Total net interest income	$	17,506			$	17,363			$	17,672			$	17,099			$	16,375
Less: Prepayment penalty fees		(10	)			(43	)			-				(35	)			-
Total core net interest income	$	17,496			$	17,320			$	17,672			$	17,064			$	16,375
Total noninterest income	$	2,900			$	3,468			$	3,241			$	4,074			$	2,664
Less: Bank-owned life insurance proceeds		(77	)			(379	)			-				-				-
Less: Net gain on sales of investments		-				-				-				(1,250	)			(273	)
Total core noninterest income	$	2,823			$	3,089			$	3,241			$	2,824			$	2,391
Total noninterest expense	$	15,277			$	15,958			$	14,718			$	15,597			$	14,937
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	$	15,277			$	15,958			$	15,275			$	15,339			$	14,704
Core earnings per common share, diluted	$	0.23			$	0.18			$	0.25			$	0.19			$	0.16
Core return on average assets (annualized)		0.52	%			0.41	%			0.57	%			0.44	%			0.40	%
Core return on average equity (annualized)		5.68	%			4.45	%			6.33	%			4.66	%			4.19	%
Core non-interest expense to average assets (annualized)		2.27	%			2.37	%			2.26	%			2.39	%			2.34	%
Efficiency ratio (2)		75.19	%			78.19	%			73.04	%			77.13	%			78.35	%
Tangible book value (3)	$	15.72			$	15.47			$	15.30			$	15.01			$	14.82
(1) Represents a valuation allowance related to a deferred tax asset associated with the establishment of the Bank’s foundation in 2011.
(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

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