FARMINGTON, Conn., April 18, 2017 (GLOBE NEWSWIRE) -- First Connecticut Bancorp, Inc. (NASDAQ:FBNK), the holding company for Farmington Bank, reported a 41% increase in net income to $5.1 million, or $0.32 diluted earnings per share for the quarter ended March 31, 2017 compared to net income of $3.6 million, or $0.24 diluted earnings per share for the quarter ended March 31, 2016. 

“I am pleased to report record earnings for the first quarter. Our emphasis on expense management and efficiency, coupled with our asset sensitive balance sheet reflect marked improvement in our return on average assets of 0.71%, return on average equity of 7.67% and efficiency ratio of 67.85%, as compared to a year ago. Our business model remains focused on the essential banking services of taking in deposits and making loans in the communities in which we serve.  The work being accomplished by our employees in producing operational efficiencies through our quality improvement initiatives is impressive,” stated John J. Patrick Jr., First Connecticut Bancorp’s Chairman, President and CEO.

“I am also pleased that for the third year in a row, we have been named “Best Community Bank”, through a reader’s poll by a large Connecticut based magazine.

Financial Highlights

• Net interest income increased $1.1 million to $19.3 million in the first quarter of 2017 compared to the linked quarter and increased $1.7 million compared to the first quarter of 2016.  

• Net interest rate margin was 2.94% in the first quarter of 2017 compared to 2.75% in the linked quarter and 2.82% in the prior year quarter.

• Efficiency ratio was 67.85% in the first quarter of 2017 compared to 70.64% in the linked quarter and 75.19% in the prior year quarter.

• Noninterest expense to average assets was 2.12% in the first quarter of 2017 compared to 2.13% in the linked quarter and 2.27% in the prior year quarter.

• Organic loan growth remained strong during the first quarter of 2017 as loans increased $59.4 million to $2.6 billion at March 31, 2017 and increased $236.5 million or 10% from a year ago. 

• Overall deposits increased $72.8 million to $2.3 billion in the first quarter of 2017 compared to the linked quarter and increased $190.0 million or 9% from a year ago. 

• Loans to deposits were 114% in the first quarter of 2017 compared to 115% in the linked quarter and 113% in the first quarter of 2016.

• Tangible book value per share increased to $16.62 for the quarter ended March 31, 2017 compared to $16.37 on a linked quarter basis and $15.72 at March 31, 2016.

• Checking accounts grew by 7% or 3,810 net new accounts from a year ago.

• Loan delinquencies 30 days and greater represented 0.67% of total loans at March 31, 2017 compared to 0.68% of total loans at December 31, 2016 and 0.55% at March 31, 2016.  Non-accrual loans represented 0.61% of total loans compared to 0.69% of total loans on a linked quarter basis and 0.55% of total loans at March 31, 2016. 

• The allowance for loan losses represented 0.82% of total loans at March 31, 2017 and 0.85% of total loans at December 31, 2016 and at March 31, 2016. 

• The Company paid a quarterly cash dividend of $0.11 per share during the first quarter, an increase of $0.02 compared to the linked quarter and an increase of $0.04 from a year ago.

First quarter 2017 compared with fourth quarter 2016

Net interest income

• Net interest income increased $1.1 million to $19.3 million in the first quarter of 2017 compared to the linked quarter primarily due to a $78.4 million increase in the average loans balance and a 12 basis point increase in the loan yield to 3.64%.

• Net interest margin was 2.94% in the first quarter of 2017 compared to 2.75% in the linked quarter.

• The cost of interest-bearing liabilities decreased 1 basis point to 76 basis points in the first quarter of 2017 compared to 77 basis points in the linked quarter.

Provision for loan losses

• Provision for loan losses was $325,000 for the first quarter of 2017 compared to $616,000 for the linked quarter. 

• Net charge-offs in the quarter were $505,000 or 0.08% to average loans (annualized) compared to $350,000 or 0.06% to average loans (annualized) in the linked quarter. 

• The allowance for loan losses represented 0.82% of total loans at March 31, 2017 and 0.85% of total loans at December 31, 2016. 

Noninterest income

• Total noninterest income decreased $371,000 to $3.2 million in the first quarter of 2017 compared to the linked quarter primarily due to a $509,000 decrease in net gain on loans sold offset by a $208,000 increase in other noninterest income.

• Net gain on loans sold decreased $509,000 to $416,000 primarily due to a decrease in volume and a higher rate environment.

• Other noninterest income increased $208,000 primarily due to a $432,000 increase in swap fees offset by a $283,000 recovery in fair value in mortgage servicing rights in the fourth quarter of 2016.

• Other noninterest income includes swap fees totaling $711,000 compared to $279,000 in the linked quarter.

Noninterest expense

• Noninterest expense increased $53,000 in the first quarter of 2017 to $15.2 million compared to the linked quarter primarily due to a $218,000 increase in salaries and employee benefits, $102,000 increase in occupancy expense offset by a $316,000 decrease in other operating expenses.

• Other operating expenses decreased $316,000 in the first quarter of 2017 compared to the linked quarter primarily due to decreases of $157,000 in outside services and $97,000 in check and debit card losses.

Income tax expense

• Income tax expense was $1.8 million in the first quarter of 2017 and in the fourth quarter of 2016. Income tax expense in the fourth quarter of 2016 included a $137,000 write-off of a deferred tax asset associated with the establishment of the Bank’s foundation in 2011.

First quarter 2017 compared with first quarter 2016

Net interest income

• Net interest income increased $1.7 million to $19.3 million in the first quarter of 2017 compared to the prior year quarter due primarily to a $209.4 million increase in the average loan balance and a 5 basis point increase in the loan yield to 3.64%.  

• Net interest margin was 2.94% in the first quarter of 2017 compared to 2.82% in the prior year quarter.

• The cost of interest-bearing liabilities decreased 1 basis point to 76 basis points in the first quarter of 2017 compared to 77 basis points in the prior year quarter.

Provision for loan losses

• Provision for loan losses was $325,000 for the first quarter of 2017 compared to $217,000 for the prior year quarter.  

• Net charge-offs in the quarter were $505,000 or 0.08% to average loans (annualized) compared to $241,000 or 0.04% to average loans (annualized) in the prior year quarter.    

• The allowance for loan losses represented 0.82% of total loans at March 31, 2017 and 0.85% of total loans at March 31, 2016. 

Noninterest income

• Total noninterest income increased $265,000 to $3.2 million in the first quarter of 2017 compared to the prior year quarter primarily due to a $416,000 increase in other noninterest income offset by a $169,000 decrease in net gains on loans sold and bank owned life insurance.

• Other noninterest income increased $416,000 to $874,000 in the first quarter of 2017 compared to the prior year quarter primarily due to a $396,000 increase in swap fees.

Noninterest expense

• Noninterest expense decreased $125,000 in the first quarter of 2017 to $15.2 million compared to the prior year quarter primarily due to a $263,000 decrease in other operating expenses offset by a $146,000 increase in marketing expenses.

• Other operating expenses decreased $263,000 to $2.5 million primarily due to decreases in check and debit card losses and a one-time charge reissuing EMV chip debit cards in the prior year quarter.

• Marketing expense increased $146,000 primarily due to efforts to increase the Bank’s sales support in central Connecticut and western Massachusetts.

Income tax expense

• Income tax expense was $1.8 million in the first quarter of 2017 and $1.3 million in the prior year quarter.  Increase in income tax expense was primarily due to a $2.0 million increase in income over the prior year.

March 31, 2017 compared to March 31, 2016

Financial Condition

• Total assets increased $202.7 million or 8% at March 31, 2017 to $2.9 billion compared to $2.7 billion at March 31, 2016, largely reflecting an increase in net loans.

• Our investment portfolio totaled $155.9 million at March 31, 2017 compared to $148.6 million at March 31, 2016, an increase of $7.2 million due to an increase in collateral requirements.

• Net loans increased $235.3 million or 10% at March 31, 2017 to $2.6 billion compared to $2.4 billion at March 31, 2016 due to our continued focus on commercial and residential lending.

• Deposits increased $190.0 million or 9% to $2.3 billion at March 31, 2017 compared to $2.1 billion at March 31, 2016 primarily due to an increase in retail deposits as we continue to develop and grow relationships in the geographical areas we serve.  We had municipal deposit balances totaling $451.2 million and $424.8 million at March 31, 2017 and 2016, respectively. 

• Federal Home Loan Bank of Boston advances increased $22.5 million to $282.1 million at March 31, 2017 compared to $259.6 million at March 31, 2016. 

Asset Quality

• At March 31, 2017 the allowance for loan losses represented 0.82% of total loans and 133.63% of non-accrual loans, compared to 0.85% of total loans and 122.60% of non-accrual loans at December 31, 2016 and 0.85% of total loans and 154.08% of non-accrual loans at March 31, 2016.

• Loan delinquencies 30 days and greater represented 0.67% of total loans at March 31, 2017 compared to 0.68% of total loans at December 31, 2016 and 0.55% of total loans at March 31, 2016.

• Non-accrual loans represented 0.61% of total loans at March 31, 2017 compared to 0.69% of total loans at December 31, 2016 and 0.55% of total loans at March 31, 2016.

• Net charge-offs in the quarter were $505,000 or 0.08% to average loans (annualized) compared to $350,000 or 0.06% to average loans (annualized) in the linked quarter and $241,000 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 12.67% at March 31, 2017. 

• Tangible book value per share is $16.62 compared to $16.37 on a linked quarter basis and $15.72 at March 31, 2016.

• The Company had 600,945 shares remaining to repurchase at March 31, 2017 from prior regulatory approval. Repurchased shares are held as treasury stock and will be available for general corporate purposes. 

• At March 31, 2017, 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 24 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 Wednesday, April 19, 2017 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)		2017				2016				2016				2016				2016
Selected Financial Condition Data:
Total assets	$	2,904,264			$	2,837,555			$	2,831,960			$	2,779,224			$	2,701,614
Cash and cash equivalents		36,427				47,723				89,940				66,743				59,166
Securities held-to-maturity, at amortized cost		50,320				33,061				7,338				7,640				19,964
Securities available-for-sale, at fair value		105,541				103,520				134,094				149,396				128,681
Federal Home Loan Bank of Boston stock, at cost		16,418				16,378				15,139				18,240				15,688
Loans, net		2,585,521				2,525,983				2,455,101				2,403,420				2,350,245
Deposits		2,287,852				2,215,090				2,247,873				2,051,438				2,097,832
Federal Home Loan Bank of Boston advances		282,057				287,057				220,600				340,600				259,600
Total stockholders' equity		264,667				260,176				255,615				252,242				248,013
Allowance for loan losses		21,349				21,529				21,263				20,720				20,174
Non-accrual loans		15,976				17,561				17,829				13,523				13,093
Impaired loans		32,407				34,273				37,599				38,216				38,588
Loan delinquencies 30 days and greater		17,346				17,271				18,238				12,206				13,095
Selected Operating Data:
Interest income	$	23,212			$	22,160			$	21,805			$	21,698			$	21,323
Interest expense		3,962				4,038				4,050				3,826				3,817
Net interest income		19,250				18,122				17,755				17,872				17,506
Provision for loan losses		325				616				698				801				217
Net interest income after provision for loan losses		18,925				17,506				17,057				17,071				17,289
Noninterest income		3,165				3,536				3,685				2,617				2,900
Noninterest expense		15,152				15,099				15,484				14,644				15,277
Income before income taxes		6,938				5,943				5,258				5,044				4,912
Income tax expense		1,845				1,757				1,485				1,401				1,299
Net income	$	5,093			$	4,186			$	3,773			$	3,643			$	3,613
Performance Ratios (annualized):
Return on average assets		0.71	%			0.59	%			0.54	%			0.54	%			0.54	%
Return on average equity		7.67	%			6.43	%			5.89	%			5.77	%			5.82	%
Net interest rate spread (1)		2.76	%			2.57	%			2.56	%			2.70	%			2.65	%
Net interest rate margin (2)		2.94	%			2.75	%			2.74	%			2.87	%			2.82	%
Non-interest expense to average assets (3)		2.12	%			2.13	%			2.22	%			2.23	%			2.27	%
Efficiency ratio (4)		67.85	%			70.64	%			72.53	%			73.52	%			75.19	%
Average interest-earning assets to average
interest-bearing liabilities		129.85	%			130.20	%			129.42	%			129.54	%			128.45	%
Loans to deposits		114	%			115	%			110	%			118	%			113	%
Asset Quality Ratios:
Allowance for loan losses as a percent of total loans		0.82	%			0.85	%			0.86	%			0.86	%			0.85	%
Allowance for loan losses as a percent of
non-accrual loans		133.63	%			122.60	%			119.26	%			153.22	%			154.08	%
Net charge-offs (recoveries) to average loans (annualized)		0.08	%			0.06	%			0.03	%			0.04	%			0.04	%
Non-accrual loans as a percent of total loans		0.61	%			0.69	%			0.72	%			0.56	%			0.55	%
Non-accrual loans as a percent of total assets		0.55	%			0.62	%			0.63	%			0.49	%			0.48	%
Loan delinquencies 30 days and greater as a
percent of total loans		0.67	%			0.68	%			0.74	%			0.50	%			0.55	%
Per Share Related Data:
Basic earnings per share	$	0.34			$	0.28			$	0.25			$	0.24			$	0.24
Diluted earnings per share	$	0.32			$	0.27			$	0.25			$	0.24			$	0.24
Dividends declared per share	$	0.11			$	0.09			$	0.08			$	0.07			$	0.07
Tangible book value (5)	$	16.62			$	16.37			$	16.17			$	15.95			$	15.72
Common stock shares outstanding		15,923,514				15,897,698				15,805,748				15,818,494				15,780,657
Weighted-average basic shares outstanding		15,068,036				14,973,610				14,823,914				14,765,452				14,720,892
Weighted-average diluted shares outstanding		15,691,338				15,502,481				15,192,006				15,077,291				15,012,540
(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)		2017				2016				2016				2016				2016
Capital Ratios:
Equity to total assets at end of period		9.11	%			9.17	%			9.03	%			9.08	%			9.18	%
Average equity to average assets		9.28	%			9.18	%			9.20	%			9.34	%			9.22	%
Total Capital (to Risk Weighted Assets)		12.67	%	*		12.78	%			12.57	%			12.63	%			12.88	%
Tier I Capital (to Risk Weighted Assets)		11.74	%	*		11.82	%			11.62	%			11.69	%			11.92	%
Common Equity Tier I Capital		11.74	%	*		11.82	%			11.62	%			11.69	%			11.92	%
Tier I Leverage Capital (to Average Assets)		9.47	%	*		9.41	%			9.40	%			9.55	%			9.44	%
Total equity to total average assets		9.25	%			9.18	%			9.17	%			9.32	%			9.20	%
* Estimated
Loans and Allowance for Loan Losses:
Real estate
Residential	$	954,764			$	907,946			$	864,054			$	842,427			$	855,148
Commercial		992,861				979,370				931,703				922,643				893,477
Construction		60,694				49,679				50,083				41,466				36,557
Commercial		420,747				430,539				449,008				437,046				402,960
Home equity line of credit		168,157				170,786				172,148				171,212				172,325
Other		5,375				5,348				5,426				5,570				5,842
Total loans		2,602,598				2,543,668				2,472,422				2,420,364				2,366,309
Net deferred loan costs		4,272				3,844				3,942				3,776				4,110
Loans		2,606,870				2,547,512				2,476,364				2,424,140				2,370,419
Allowance for loan losses		(21,349	)			(21,529	)			(21,263	)			(20,720	)			(20,174	)
Loans, net	$	2,585,521			$	2,525,983			$	2,455,101			$	2,403,420			$	2,350,245
Deposits:
Noninterest-bearing demand deposits	$	437,385			$	441,283			$	419,664			$	415,562			$	396,356
Interest-bearing
NOW accounts		622,844				542,764				590,213				429,973				529,267
Money market		521,759				532,681				536,979				498,847				488,497
Savings accounts		239,743				233,792				223,848				229,868				223,188
Time deposits		466,121				464,570				477,169				477,188				460,524
Total interest-bearing deposits		1,850,467				1,773,807				1,828,209				1,635,876				1,701,476
Total deposits	$	2,287,852			$	2,215,090			$	2,247,873			$	2,051,438			$	2,097,832

First Connecticut Bancorp, Inc. Consolidated Statements of Condition (Unaudited)
							March 31,				December 31,				March 31,
								2017				2016				2016
(Dollars in thousands)
Assets
Cash and due from banks							$	32,706			$	44,086			$	36,418
Interest bearing deposits with other institutions								3,721				3,637				22,748
		Total cash and cash equivalents						36,427				47,723				59,166
Securities held-to-maturity, at amortized cost								50,320				33,061				19,964
Securities available-for-sale, at fair value								105,541				103,520				128,681
Loans held for sale								2,464				3,270				6,145
Loans (1)								2,606,870				2,547,512				2,370,419
	Allowance for loan losses							(21,349	)			(21,529	)			(20,174	)
		Loans, net						2,585,521				2,525,983				2,350,245
Premises and equipment, net								17,903				18,002				18,210
Federal Home Loan Bank of Boston stock, at cost								16,418				16,378				15,688
Accrued income receivable								7,398				7,432				6,346
Bank-owned life insurance								52,044				51,726				50,725
Deferred income taxes								14,790				14,795				15,506
Prepaid expenses and other assets								15,438				15,665				30,938
					Total assets		$	2,904,264			$	2,837,555			$	2,701,614
Liabilities and Stockholders' Equity
Deposits
	Interest-bearing						$	1,850,467			$	1,773,807			$	1,701,476
	Noninterest-bearing							437,385				441,283				396,356
								2,287,852				2,215,090				2,097,832
Federal Home Loan Bank of Boston advances								282,057				287,057				259,600
Repurchase agreement borrowings								10,500				10,500				10,500
Repurchase liabilities								19,526				18,867				31,118
Accrued expenses and other liabilities								39,662				45,865				54,551
					Total liabilities			2,639,597				2,577,379				2,453,601
Stockholders' Equity
	Common stock							181				181				181
	Additional paid-in-capital							184,456				184,111				182,747
	Unallocated common stock held by ESOP							(10,309	)			(10,567	)			(11,363	)
	Treasury stock, at cost							(30,047	)			(30,400	)			(32,355	)
	Retained earnings							126,882				123,541				115,444
	Accumulated other comprehensive loss							(6,496	)			(6,690	)			(6,641	)
					Total stockholders' equity			264,667				260,176				248,013
					Total liabilities and stockholders' equity		$	2,904,264			$	2,837,555			$	2,701,614
(1) Loans include net deferred fees and unamortized premiums of $4.3 million, $3.8 million and $4.1 million at March 31, 2017, December 31, 2016 and March 31, 2016, 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)								2017			2016			2016
Interest income
Interest and fees on loans
	Mortgage						$	17,558		$	16,451		$	15,907
	Other							4,947			5,058			4,714
Interest and dividends on investments
	United States Government and agency obligations							474			335			418
	Other bonds							7			10			13
	Corporate stocks							199			231			239
Other interest income								27			75			32
					Total interest income			23,212			22,160			21,323
Interest expense
Deposits								2,911			3,010			2,736
Interest on borrowed funds								949			924			967
Interest on repo borrowings								95			96			95
Interest on repurchase liabilities								7			8			19
					Total interest expense			3,962			4,038			3,817
					Net interest income			19,250			18,122			17,506
Provision for loan losses								325			616			217
					Net interest income
						after provision for loan losses		18,925			17,506			17,289
Noninterest income
Fees for customer services								1,506			1,537			1,484
Net gain on loans sold								416			925			490
Brokerage and insurance fee income								50			47			54
Bank owned life insurance income								319			361			414
Other								874			666			458
					Total noninterest income			3,165			3,536			2,900
Noninterest expense
Salaries and employee benefits								9,327			9,109			9,376
Occupancy expense								1,313			1,211			1,219
Furniture and equipment expense								984			983			1,061
FDIC assessment								428			424			404
Marketing								567			523			421
Other operating expenses								2,533			2,849			2,796
					Total noninterest expense			15,152			15,099			15,277
					Income before income taxes			6,938			5,943			4,912
Income tax expense								1,845			1,757			1,299
					Net income		$	5,093		$	4,186		$	3,613
Earnings per share:
	Basic						$	0.34		$	0.28		$	0.24
	Diluted							0.32			0.27			0.24
Weighted average shares outstanding:
	Basic							15,068,036			14,973,610			14,720,892
	Diluted							15,691,338			15,502,481			15,012,540

 

First Connecticut Bancorp, Inc. Consolidated Average Balances, Yields and Rates (Unaudited)
	For The Three Months Ended
	March 31, 2017								December 31, 2016								March 31, 2016
	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	$	2,576,295	$	23,101		3.64	%		$	2,497,897	$	22,092		3.52	%		$	2,366,935	$	21,132		3.59	%
Securities		142,929		529		1.50	%			131,837		402		1.21	%			154,534		483		1.26	%
Federal Home Loan Bank of Boston stock		16,165		151		3.79	%			15,200		174		4.55	%			19,804		187		3.80	%
Federal funds and other earning assets		6,351		27		1.72	%			60,518		75		0.49	%			27,148		32		0.47	%
Total interest-earning assets		2,741,740		23,808		3.52	%			2,705,452		22,743		3.34	%			2,568,421		21,834		3.42	%
Noninterest-earning assets		118,104								128,332								127,192
Total assets	$	2,859,844							$	2,833,784							$	2,695,613
Interest-bearing liabilities:
NOW accounts	$	602,631	$	528		0.36	%		$	552,444	$	443		0.32	%		$	522,876	$	380		0.29	%
Money market		529,409		970		0.74	%			557,864		1,109		0.79	%			478,954		995		0.84	%
Savings accounts		231,465		61		0.11	%			229,052		64		0.11	%			216,102		58		0.11	%
Certificates of deposit		466,852		1,352		1.17	%			471,023		1,394		1.18	%			450,917		1,303		1.16	%
Total interest-bearing deposits		1,830,357		2,911		0.64	%			1,810,383		3,010		0.66	%			1,668,849		2,736		0.66	%
Federal Home Loan Bank of Boston Advances		245,591		949		1.57	%			226,766		924		1.62	%			272,610		967		1.43	%
Repurchase agreement borrowings		10,500		95		3.67	%			10,500		96		3.64	%			10,500		95		3.64	%
Repurchase liabilities		24,984		7		0.11	%			30,245		8		0.11	%			47,543		19		0.16	%
Total interest-bearing liabilities		2,111,432		3,962		0.76	%			2,077,894		4,038		0.77	%			1,999,502		3,817		0.77	%
Noninterest-bearing deposits		433,058								434,659								390,926
Other noninterest-bearing liabilities		49,886								61,023								56,765
Total liabilities		2,594,376								2,573,576								2,447,193
Stockholders' equity		265,468								260,208								248,420
Total liabilities and stockholders' equity	$	2,859,844							$	2,833,784							$	2,695,613
Tax-equivalent net interest income			$	19,846							$	18,705							$	18,017
Less: tax-equivalent adjustment				(596	)							(583	)							(511	)
Net interest income			$	19,250							$	18,122							$	17,506
Net interest rate spread (2)						2.76	%							2.57	%							2.65	%
Net interest-earning assets (3)	$	630,308							$	627,558							$	568,919
Net interest margin (4)						2.94	%							2.75	%							2.82	%
Average interest-earning assets to average interest-bearing liabilities
				129.85	%							130.20	%							128.45	%
(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, 2017, December 31, 2016, September 30, 2016, June 30, 2016 and March 31, 2016.  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)			2017				2016				2016				2016				2016
Net Income		$	5,093			$	4,186			$	3,773			$	3,643			$	3,613
	Adjustments:
	Plus: Mortgage servicing rights (recovery) impairment		-				(283	)			(91	)			374				-
	Less: Prepayment penalty fees		(84	)			-				-				(370	)			(10	)
	Less: Off-balance sheet commitments change in accounting estimate		-				-				-				(423	)			-
	Less: Bank-owned life insurance proceeds		-				-				-				-				(77	)
Total core adjustments before taxes			(84	)			(283	)			(91	)			(419	)			(87	)
	Tax benefit on core adjustments		29				99				32				147				4
	Deferred tax asset write-off (1)		-				137				-				-				-
Total core adjustments after taxes			(55	)			(47	)			(59	)			(272	)			(83	)
Total core net income		$	5,038			$	4,139			$	3,714			$	3,371			$	3,530
Total net interest income		$	19,250			$	18,122			$	17,755			$	17,872			$	17,506
	Less: Prepayment penalty fees		(84	)			-				-				(370	)			(10	)
Total core net interest income		$	19,166			$	18,122			$	17,755			$	17,502			$	17,496
Total noninterest income		$	3,165			$	3,536			$	3,685			$	2,617			$	2,900
	Plus: Mortgage servicing rights (recovery) impairment		-				(283	)			(91	)			374				-
	Less: Bank-owned life insurance proceeds		-				-				-				-				(77	)
Total core noninterest income		$	3,165			$	3,253			$	3,594			$	2,991			$	2,823
Total noninterest expense		$	15,152			$	15,099			$	15,484			$	14,644			$	15,277
	Plus: Off-balance sheet commitments change in accounting estimate		-				-				-				423				-
Total core noninterest expense		$	15,152			$	15,099			$	15,484			$	15,067			$	15,277
Core earnings per common share, diluted		$	0.32			$	0.27			$	0.24			$	0.22			$	0.23
Core net interest rate margin (2)			2.92	%			2.75	%			2.74	%			2.81	%			2.82	%
Core return on average assets (annualized)			0.70	%			0.58	%			0.53	%			0.50	%			0.52	%
Core return on average equity (annualized)			7.59	%			6.36	%			5.80	%			5.34	%			5.68	%
Core non-interest expense to average assets (annualized)			2.12	%			2.13	%			2.22	%			2.23	%			2.27	%
Efficiency ratio (3)			67.85	%			70.64	%			72.53	%			73.52	%			75.19	%
Tangible book value (4)		$	16.62			$	16.37			$	16.17			$	15.95			$	15.72
(1) Represents a write-off of the remaining deferred tax asset associated with the establishment of the Bank’s foundation in 2011.
(2) Represents tax-equivalent core net interest income as a percent of average interest-earning assets.
(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.

 

Contact:
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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