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Fox Chase Bancorp, Inc. Reports Earnings for the Three Months Ended March 31, 2016

HATBORO, Pa., April 27, 2016 (GLOBE NEWSWIRE) -- Fox Chase Bancorp, Inc. (the “Company”) (NASDAQ:FXCB), the holding company for Fox Chase Bank (the “Bank”), today announced net income of $2.2 million, or $0.20 per diluted share, for the three months ended March 31, 2016, compared to net income of $2.3 million, or $0.20 per diluted share, for the three months ended March 31, 2015.  

The first quarter 2016 results include after-tax merger-related professional fees of $320,000 ($0.03 per share).  The first quarter 2015 results include after-tax core data processing system conversion-related expenses of $152,000 ($0.01 per share).

Commenting on performance for the quarter, Thomas M. Petro, President and CEO said, “The Company continues to execute on its commercial business strategy as average commercial loans increased 10.2% as compared to the same quarter in 2015.  We continue to be excited about the merger with Univest Corporation of Pennsylvania and are moving forward to obtain the necessary approvals to close the transaction in the third quarter of 2016.  We believe this affiliation will create a stronger franchise and provide greater benefits to customers, shareholders and the communities we serve.”

Highlights for the quarter ended March 31, 2016 included:

  • Total average assets were $1.13 billion for the three months ended March 31, 2016 as compared to $1.12 billion for the three months ended December 31, 2015 and $1.10 billion for the three months ended March 31, 2015. Average commercial loans increased by $62.6 million, or 10.2%, to $678.1 million for the three months ended March 31, 2016, compared to $615.5 million for the three months ended March 31, 2015.  Additionally, average commercial loans increased by $33.7 million, or 5.2%, for the three months ended March 31, 2016, compared to $644.4 million for the three months ended December 31, 2015. 
  • Total assets were $1.13 billion at March 31, 2016 as compared to $1.13 billion at December 31, 2015 and $1.12 billion at March 31, 2015.  Total commercial loans increased by $13.8 million, or 2.0%, to $687.3 million at March 31, 2016, compared to $673.5 at December 31, 2015, and increased $44.8 million, or 7.0%, compared to $642.5 million at March 31, 2015.                                             
  • Nonperforming assets totaled $5.2 million, or 0.46% of total assets, at March 31, 2016 and at December 31, 2015, respectively, and $6.2 million, or 0.55% of total assets, at March 31, 2015.
  • Net interest income decreased $128,000, or 1.5%, to $8.5 million for the three months ended March 31, 2016, compared to $8.7 million for the three months ended March 31, 2015. The net interest margin was 3.16% for the three months ended March 31, 2016, 3.10% for the three months ended December 31, 2015, and 3.29% for the three months ended March 31, 2015.  The increase in net interest margin as compared to the three months ended December 31, 2015 was primarily due to a reduction in excess liquidity from the three months ended December 31 2015.  The decrease from the three months ended March 31, 2015 was primarily due to the receipt of a $254,000 special dividend from the FHLB of Pittsburgh, which increased the net interest margin by 0.10%.
  • Credit related costs, which include (i) provision for loan losses, (ii) valuation adjustments on assets acquired through foreclosure and (iii) net (loss) gain on sale of assets acquired through foreclosure, totaled $61,000 for the three months ended March 31, 2016, compared to $98,000 for the three months ended December 31, 2015 and $487,000 for the three months ended March 31, 2015.  Net loan charge-offs totaled $37,000 for the three months ended March 31, 2016, compared to $161,000 for the three months ended December 31, 2015 and $24,000 for the three months ended March 31, 2015. There were no commercial loan charge-offs during the three months ended March 31, 2016.
  • The allowance for loan losses was $10.6 million, or 1.34% of total loans, at March 31, 2016, compared to $10.6 million, or 1.36% of total loans, at December 31, 2015 and $11.2 million, or 1.46% of total loans at March 31, 2015.
  • Noninterest income increased $95,000, or 16.6%, to $666,000 for the three months ended March 31, 2016 compared to $571,000 for the three months ended March 31, 2015 primarily due to an increase of $95,000 in income on bank-owned life insurance as the Bank purchased $10.0 million of bank-owned life insurance in the third quarter of 2015 and an increase of $67,000 in other noninterest income primarily due to increased cash management fees offset by a decrease of $45,000 in equity in earnings of affiliate due to lower mortgage volumes.
  • Noninterest expense increased $120,000, or 2.1%, to $5.9 million for the three months ended March 31, 2016, compared to $5.8 million for the three months ended March 31, 2015.  This increase was primarily due to an increase of $224,000 in salaries, benefits and other compensation and an increase of $175,000 in professional fees related to legal fees regarding the merger offset by a decrease of $165,000 in data processing fees.  Data processing fees were higher in 2015 due to the Bank’s change in outsourced data processing systems, which was completed in the fourth quarter of 2015.
  • Excluding the $346,000 of pre-tax merger-related costs incurred in the three months ended March 31, 2016 and the pre-tax one-time core data processing system costs of $230,000 during the three months ended March 31, 2015, noninterest expense remained flat at $5.5 million.
  • The efficiency ratio was 63.7% and 62.2% for the three months ended March 31, 2016 and 2015, respectively. Excluding the previously discussed merger-related costs for 2016 and one-time core data processing systems conversion costs for 2015, the efficiency ratio was 60.0% and 59.7% for the three months ended March 31, 2016 and 2015, respectively.
  • Income tax provision increased $304,000, or 41.8%, to $1.0 million for the three months ended March 31, 2016, compared to $727,000 for the three months ended March 31, 2015.  Income tax provision for the three months ended March 31, 2015 includes the reversal of an $182,000 valuation allowance on certain state deferred tax assets. The effective income tax rate for the three months ended March 31, 2016 and March 31, 2015 was 31.4% and 24.2%, respectively.  Excluding the reversal, the effective income tax rate for the three months ended March 31, 2015 was 30.3%.  

The Company also announced that its Board of Directors declared a cash dividend of $0.14 per outstanding share of common stock. The dividend will be paid on or about May 26, 2016 to stockholders of record as of the close of business on May 12, 2016. 

Fox Chase Bancorp, Inc. is the stock holding company of Fox Chase Bank. The Bank is a Pennsylvania state-chartered savings bank originally established in 1867.  The Bank offers traditional banking services and products from its main office in Hatboro, Pennsylvania and nine branch offices in Bucks, Montgomery, Chester and Philadelphia Counties in Pennsylvania and Atlantic and Cape May Counties in New Jersey.  For more information, please visit the Bank’s website at www.foxchasebank.com.

This news release contains forward-looking statements within the meaning of the federal securities laws. Forward-looking statements can generally be identified by the fact that they do not relate strictly to historical or current facts.  They often include words like “believe,” “expect,” “anticipate,” “estimate” and “intend” or future or conditional verbs such as “will,” “would,” “should,” “could” or “may.”  Statements in this release that are not strictly historical are forward-looking and are based upon current expectations that may differ materially from actual results.  These forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those anticipated by the statements made herein.  These risks and uncertainties involve general economic trends, changes in interest rates, loss of deposits and loan demand to other financial institutions, substantial changes in financial markets; changes in real estate value and the real estate market, regulatory changes, possibility of unforeseen events affecting the industry generally, the uncertainties associated with newly developed or acquired operations, the outcome of pending litigation, and market disruptions and other effects of terrorist activities.  The Company undertakes no obligation to update these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unforeseen events, except as required under the rules and regulations of the Securities and Exchange Commission.

 

CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in Thousands, Except Per Share Data)
 
            Three Months Ended
            March 31,
              2016       2015  
                         
            (Unaudited)
INTEREST INCOME    
  Interest and fees on loans   $   8,506     $   8,139  
  Interest and dividends on investment securities       1,632         1,982  
  Other interest income       9         3  
      Total Interest Income       10,147         10,124  
INTEREST EXPENSE        
  Deposits         807         715  
  Short-term borrowings       59         32  
  Federal Home Loan Bank advances       557         539  
  Other borrowed funds       180         166  
      Total Interest Expense       1,603         1,452  
      Net Interest Income       8,544         8,672  
  Provision for loan losses       45         472  
      Net Interest Income after Provision for Loan Losses       8,499         8,200  
NONINTEREST INCOME        
  Service charges and other fee income       362         384  
  Income on bank-owned life insurance       215         120  
  Equity in earnings of affiliate       (5 )       40  
  Other           94         27  
                 
      Total Noninterest Income       666         571  
NONINTEREST EXPENSE        
  Salaries, benefits and other compensation       3,943         3,719  
  Occupancy expense       430         477  
  Furniture and equipment expense       77         83  
  Data processing costs       408         573  
  Professional fees       538         363  
  Marketing expense       24         41  
  FDIC premiums       134         119  
  Assets acquired through foreclosure expense       30         30  
  Other           301         360  
      Total Noninterest Expense       5,885         5,765  
      Income Before Income Taxes       3,280         3,006  
    Income tax provision       1,031         727  
      Net Income   $   2,249     $   2,279  
Earnings per share:        
  Basic       $   0.20     $   0.21  
  Diluted     $   0.20     $   0.20  

/EIN News/ --

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Dollars in Thousands, Except Share Data)
 
        March 31,   December 31,
          2016       2015  
        (Unaudited)   (Audited)
ASSETS
  Cash and due from banks   $ 3,737     $ 3,413  
  Interest-earning demand deposits in other banks     5,375       4,385  
    Total cash and cash equivalents     9,112       7,798  
  Investment securities available-for-sale     135,826       139,751  
  Investment securities held-to-maturity (fair value of $146,665 at        
    March 31, 2016 and $149,850 at December 31, 2015)     144,528       150,190  
  Loans, net of allowance for loan losses of $10,570        
    at March 31, 2016 and $10,562 at December 31, 2015     776,669       767,683  
  Federal Home Loan Bank stock, at cost     6,186       6,734  
  Bank-owned life insurance     25,902       25,687  
  Premises and equipment, net     8,895       9,030  
  Assets acquired through foreclosure     2,615       2,623  
  Real estate held for investment     1,620       1,620  
  Accrued interest receivable     3,348       3,145  
  Mortgage servicing rights, net     97       104  
  Deferred tax asset, net     3,993       5,142  
  Other assets     12,950       6,096  
    Total Assets   $ 1,131,741     $ 1,125,603  
             
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
  Deposits   $ 815,708     $ 764,974  
  Short-term borrowings     15,000       38,496  
  Federal Home Loan Bank advances     90,000       110,000  
  Other borrowed funds     30,000       30,000  
  Advances from borrowers for taxes and insurance     1,350       1,422  
  Accrued interest payable     302       319  
  Accrued expenses and other liabilities     1,541       3,478  
    Total Liabilities     953,901       948,689  
STOCKHOLDERS' EQUITY
  Preferred stock ($.01 par value; 1,000,000 shares authorized,        
    none issued and outstanding at March 31, 2016 and December 31, 2015)     -       -  
  Common stock ($.01 par value; 60,000,000 shares authorized,        
    11,767,590 shares outstanding at March 31, 2016        
    and December 31, 2015)     149       149  
  Additional paid-in capital     141,833       142,189  
  Treasury stock, at cost (3,141,201 shares at March 31, 2016 and        
    December 31, 2015)     (44,468 )     (44,468 )
  Common stock acquired by benefit plans     (5,876 )     (6,717 )
  Retained earnings     85,542       86,241  
  Accumulated other comprehensive income (loss), net     660       (480 )
    Total Stockholders' Equity     177,840       176,914  
             
    Total Liabilities and Stockholders' Equity   $ 1,131,741     $ 1,125,603  
             


SELECTED CONSOLIDATED FINANCIAL AND OTHER DATA OF THE COMPANY (UNAUDITED)
(Dollars in Thousands, Except Per Share Data)
 
      March 31,   December 31,   March 31,  
        2016       2015       2015    
CAPITAL RATIOS:              
Stockholders’ equity (to total assets) (1)     15.71   %   15.72   %   15.59   %
                 
Common equity tier 1 capital ratio (to risk-weighted assets) (2)     16.66       16.69       16.28    
Tier 1 leverage ratio (to adjusted average assets) (2)     13.74       13.52       13.04    
Tier 1 capital ratio (to risk-weighted assets) (2)     16.66       16.69       16.28    
Total capital ratio (to risk-weighted assets) (2)     17.63       17.68       17.34    
                 
ASSET QUALITY INDICATORS:              
Nonperforming Assets:              
  Nonaccruing loans   $ 2,606     $ 2,534     $ 3,374    
  Accruing loans past due 90 days or more     -       -       -    
  Total nonperforming loans   $ 2,606     $ 2,534     $ 3,374    
  Assets acquired through foreclosure     2,615       2,623       2,804    
  Total nonperforming assets   $ 5,221     $ 5,157     $ 6,178    
                 
  Ratio of nonperforming loans to total loans     0.33   %   0.33   %   0.44   %
  Ratio of nonperforming assets to total assets     0.46       0.46       0.55    
  Ratio of allowance for loan losses to total loans     1.34       1.36       1.46    
  Ratio of allowance for loan losses to nonperforming loans     405.6       416.8       331.3    
Troubled Debt Restructurings:              
  Nonaccruing troubled debt restructurings (3)   $ 1,113     $ 1,122     $ 1,349    
  Accruing troubled debt restructurings     6,488       6,440       4,817    
  Total troubled debt restructurings   $ 7,601     $ 7,562     $ 6,166    
                 
Past Due Loans:              
  30 - 59 days   $ 412     $ 1,021     $ 653    
  60 - 89 days     70       685       127    
  Total   $ 482     $ 1,706     $ 780    
                             
(1) Represents stockholders’ equity ratio of Fox Chase Bancorp, Inc.  
(2) Represents regulatory capital ratios of Fox Chase Bank.  
(3) Nonaccruing troubled debt restructurings are included in total nonaccruing loans above  


    At or for the Three Months Ended
      March 31,   December 31,   March 31,  
        2016       2015       2015    
PERFORMANCE RATIOS  (4):              
  Return on average assets     0.80  %     0.64  %     0.83  %  
  Return on average equity     5.07       4.03       5.18    
  Net interest margin     3.16       3.10       3.29    
  Efficiency ratio (5)     63.7       69.9       62.2    
  Efficiency ratio (excluding one-time costs) (6)     60.0       61.4       59.7    
OTHER:              
  Average commercial loans   $ 678,099     $ 644,403     $ 615,474    
  Tangible book value per share - Core (7)   $ 15.06     $ 15.07     $ 14.88    
  Tangible book value per share (8)   $ 15.11     $ 15.03     $ 14.94    
  Employees (full-time equivalents)     132       134       136    
   
(4) Annualized  
(5)  Represents noninterest expense, excluding valuation adjustments on assets acquired through foreclosure, 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.  
(6)  Same as (5) except noninterest expense in this ratio excludes costs related to the core data processing systems conversion and the previously announced merger with Univest Corporation of Pennsylvania.  Such costs were $346,000, $779,000 and $230,000 for the three months ended March 31, 2016, December 31, 2015 and March 31, 2015, respectively.   
(7) Total stockholders’ equity, excluding the impact of accumulated other comprehensive income (loss), net ($660,000 at March 31, 2016, $(480,000) at December 31, 2015 and $666,000 at March 31, 2015), divided by total shares outstanding.  
(8) 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 March 31,
          2016       2015  
            Interest           Interest    
        Average   and   Yield/   Average   and   Yield/
        Balance   Dividends   Cost (2)   Balance   Dividends   Cost (2)
Assets:                                                
Interest-earning assets:                      
  Interest-earning demand deposits $ 10,417     $ 9       0.34 %   $ 11,550     $ 3       0.10 %
  Investment securities   292,553       1,632       2.23 %     311,049       1,982       2.55 %
  Loans (1)   781,349       8,506       4.37 %     742,005       8,139       4.44 %
  Allowance for loan losses   (10,563 )             (10,777 )        
  Net loans   770,786       8,506           731,228       8,139      
    Total interest-earning assets   1,073,756       10,147       3.80 %     1,053,827       10,124       3.88 %
Noninterest-earning assets   53,961               42,702          
  Total assets $ 1,127,717             $ 1,096,529          
Liabilities and equity:                      
Interest-bearing liabilities:                      
  Interest-bearing deposits $ 591,839     $ 807       0.55 %   $ 546,465     $ 715       0.53 %
  Borrowings   178,098       796       1.80 %     190,129       737       1.57 %
  Total interest-bearing liabilities   769,937       1,603       0.84 %     736,594       1,452       0.80 %
  Noninterest-bearing deposits   175,527               176,389          
  Other noninterest-bearing liabilities   4,645               7,442          
    Total liabilities   950,109               920,425          
  Stockholders' equity   177,444               175,552          
  Accumulated comprehensive income   164               552          
    Total stockholders' equity   177,608               176,104          
    Total liabilities and stockholders' equity $ 1,127,717             $ 1,096,529          
                             
  Net interest income     $ 8,544             $ 8,672      
  Interest rate spread           2.96 %             3.08 %
  Net interest margin           3.16 %             3.29 %
 
(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
        March 31, 2016   December 31, 2015
            Interest           Interest    
        Average   and   Yield/   Average   and   Yield/
        Balance   Dividends   Cost (2)   Balance   Dividends   Cost (2)
Assets:                                                
Interest-earning assets:                      
  Interest-earning demand deposits $ 10,417     $ 9       0.34 %   $ 26,625     $ 15       0.23 %
  Investment securities   292,553       1,632       2.23 %     298,284       1,650       2.21 %
  Loans (1)   781,349       8,506       4.37 %     752,744       8,288       4.37 %
  Allowance for loan losses   (10,563 )             (10,605 )        
  Net loans   770,786       8,506           742,139       8,288      
    Total interest-earning assets   1,073,756       10,147       3.80 %     1,067,048       9,953       3.71 %
Noninterest-earning assets   53,961               53,523          
  Total assets $ 1,127,717             $ 1,120,571          
Liabilities and equity:                      
Interest-bearing liabilities:                      
  Interest-bearing deposits $ 591,839     $ 807       0.55 %   $ 586,944     $ 812       0.55 %
  Borrowings   178,098       796       1.80 %     154,865       751       1.93 %
  Total interest-bearing liabilities   769,937       1,603       0.84 %     741,809       1,563       0.84 %
  Noninterest-bearing deposits   175,527               197,711          
  Other noninterest-bearing liabilities   4,645               4,292          
    Total liabilities   950,109               943,812          
  Stockholders' equity   177,444               176,601          
  Accumulated comprehensive income   164               158          
    Total stockholders' equity   177,608               176,759          
    Total liabilities and stockholders' equity $ 1,127,717             $ 1,120,571          
                             
  Net interest income     $ 8,544             $ 8,390      
  Interest rate spread           2.96 %             2.87 %
  Net interest margin           3.16 %             3.10 %
 
(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

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