First Connecticut Bancorp Reports Q4 2015 Earnings

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$0.16 Earnings Per Share

© Mike Hodges

First Connecticut Bancorp, Inc.(NASDAQ:FBNK), the holding company for Farmington Bank, reported net income of $2.4 million, or $0.16 diluted earnings per share for the quarter ended December 31, 2015 compared to net income of $3.1 million, or $0.21 diluted earnings per share for the quarter ended December 31, 2014.

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

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

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

Financial Highlights

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

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