EXHIBIT 99.1
| | | | | FOR IMMEDIATE RELEASE |
First National Community Bancorp, Inc.AnnouncesThird Quarter 2015 Net Income
Dunmore, Pa., October 30, 2015—First National Community Bancorp, Inc. (the “Company”) (OTCQX: FNCB), the parent company of Dunmore-based First National Community Bank (the “Bank”), today reported net income for the three months ended September 30, 2015 of $2.3 million, or $0.14 per basic and diluted share. Net income for the comparable period of 2014 was $3.4 million, or $0.20 per basic and diluted share. The $1.1 million decrease in third quarter earnings was primarily attributable to a decrease in non-interest income partially offset by further non-interest expense reductions, an improvement in net interest income and an increase in the credit for loan and lease losses. For the nine months ended September 30, 2015, net income was $6.6 million, or $0.40 per basic and diluted share, a decrease of $6.9 million compared to $13.5 million, or $0.82 per basic and diluted share, for the same nine months of 2014. The decrease in year-to-date earnings reflected a $3.7 million decrease in gains on the sale of investment securities, coupled with non-recurring income recorded in 2014 related to two legal settlements and a gain on the sale of the Company’s retail banking operations in Monroe County. Annualized return on average assets was 0.91% and 0.90%, respectively for the three- and nine-month periods ended September 30, 2015, compared to 1.38% and 1.85%, respectively, for the same periods of 2014. For the third quarter and year-to-date periods of 2015, annualized return on average equity was 16.38% and 15.96%, respectively, and 26.81% and 41.43%, respectively, for the comparable 2014 periods.
Third Quarter 2015Highlights:
| | ● | Company was released from Written Agreement with the Federal Reserve Bank of Philadelphia (“Reserve Bank”) effective September 2, 2015 |
| | ● | Growth in net loans of $40.1 million, or 6.0%, from the end of the second quarter of 2015 |
| | ● | Tax-equivalent net interest margin improved 22 basis points in the third quarter compared to the second quarter of 2015 |
| | ● | Decrease of $4.9 million, or 19.7%, in year-to-date non-interest expense |
| | ● | Increase in tangible book value of $0.50 per share to $3.60 at September 30, 2015 from $3.10 per share at December 31, 2014 |
On September 8, 2015, the Company received written notification that effective September 2, 2015 it was released from the Written Agreement by the Reserve Bank. On March 25, 2015, the Company was released from the Consent Order by the Office of the Comptroller of the Currency (“OCC”). Previously the Company had been operating under the Consent Order since September 2010 and the Written Agreement since November 2010. The releases signify that the Reserve Bank and the OCC have determined that the Company and the Bank have met all of the requirements mandated by the Written Agreement and Consent Order, respectively.
“The Company achieved yet another positive milestone in the third quarter with the release from the Written Agreement,” stated Steven R. Tokach, President and Chief Executive Officer. “The Company’s non-interest expense levels continued to be positively impacted by our improved risk profile. In addition, our net interest income levels rebounded in the third quarter with strong loan growth and the effect of the 44.0% principal prepayment and rate modification from 9.00% to 4.50% of the Company’s subordinated debentures at the end of the second quarter of 2015,” concluded Mr. Tokach.
Summary Results forthe Three and Nine Months Ended September 30, 2015
Net interest income before the credit for loan and lease losses increased $371 thousand, or 5.4%, to $7.2 million for the third quarter of 2015 from $6.8 million for the same period of 2014. The increase was primarily a result of lower interest expense due to the $11.0 million principal prepayment and rate modification of the Company’s subordinated debentures completed on June 30, 2015. In addition, net interest income for the third quarter of 2015 improved $0.9 million, or 13.6%, compared to the second quarter of 2015, which largely reflected increased interest income due to higher average balances of loans and investment securities, coupled with lower interest expense resulting from the principal prepayment and rate modification on the subordinated debentures. The tax-equivalent net interest margin for third quarter 2015 was 3.07%, a decrease of 11 basis points compared to the same quarter of 2014. However, the tax-equivalent net interest margin improved 22 basis points compared to 2.85% for the second quarter of 2015.
Non-interest income was $1.4 million for the three months ended September 30, 2015, a decrease of $3.0 million, or 69.0%, compared to $4.4 million for the same period of 2014. The revenue decline was due entirely to a $3.0 million decrease in net gains received on security sales. Non-interest income totaled $6.3 million for the nine months ended September 30, 2015, a decrease of $6.6 million, or 50.7%, from $12.9 million for the same nine months of 2014. The reduction in non-interest income for the year-to-date periods reflected the decrease in net gains on investment security sales, coupled with non-recurring income earned in 2014. Year-to-date net gains on the sale of securities were $2.3 million in 2015, which was $3.7 million lower than the $6.0 million in net gains on the sale of securities recorded in 2014. In addition, non-interest income for the nine months ended September 30, 2014 included $2.1 million of non-recurring income received from the settlement of judgements filed pursuant to a large commercial credit relationship resulting in the recovery of all past due interest, late charges and legal and other expenses associated with a previously charged-off commercial real estate loan relationship, and a $0.6 million net gain recorded on the divestiture of the Company’s retail banking operations in Monroe County.
For the three months ended September 30, 2015, non-interest expense decreased $1.4 million, or 17.6%, to $6.4 million, from $7.8 million for the same three months of 2014. On a year-to-date basis, non-interest expense decreased $4.8 million, or 19.7%, to $19.9 million in 2015 from $24.7 million in 2014. For both the three-month and year-to-date periods, the decrease resulted primarily from reductions in expenses of other real estate owned, regulatory assessments, legal expense professional fees and Federal Deposit Insurance Corporation (“FDIC”) insurance expense, all of which reflected improvement in the Company’s risk profile.
Asset Quality
Net charge-offs were $0.3 million and $1.4 million for the three and nine months ended September 30, 2015, respectively, compared to net charge-offs of $0.2 million for the three months ended September 30, 2014 and net recoveries of $3.5 million for the 2014 year-to-date period. Net charge-offs for the nine months ended September 30, 2015 resulted primarily from the partial charge-off of two commercial loan relationships: two construction, land acquisition and development loans to one commercial customer aggregating $0.7 million in the third quarter of 2015 and one commercial real estate loan to another commercial customer in the amount of $0.9 million in the second quarter of 2015. The net recovery position in 2014 was due largely to the previously mentioned legal settlement.
Total non-performing loans were $6.7 million at September 30, 2015, an increase of $1.0 million, or 17.1%, from $5.8 million at June 30, 2015, and $1.2 million, or 22.1%, from December 31, 2014. The ratio of non-performing loans to total loans was 0.93% at September 30, 2015 compared to 0.84% at June 30, 2015 and 0.82% at December 31, 2014. (At June 30, 2015, the most recent data available, the FDIC average for bank holding companies with assets between $1.0 billion and $3.0 billion was 0.92%.) At September 30, 2015, the Company’s allowance for loan and lease losses as a percentage of gross loans at September 30, 2015 equaled 1.36% which was comparable to that of the peer group. (The above described FDIC peer group average was 1.30% at June 30, 2015.)
Financial Condition
Total assets reached $1.1 billion at September 30, 2015, an increase of $85.2 million, or 8.8%, from $970.0 million at December 31, 2014. The Company experienced strong growth in its earning assets. Specifically, net loans grew $54.6 million, or 8.3%, to $713.3 million at September 30, 2015 from $658.7 million at December 31, 2014. In addition, available-for-sale securities increased $30.2 million, or 13.8%, to $249.2 million at the end of the third quarter of 2015 from $219.0 million at year-end 2014. Earning asset growth was funded primarily by an increase in total deposits of $56.7 million, or 7.1%, coupled with an increase in borrowed funds of $20.9 million, or 21.6%. With regard to deposit growth, interest-bearing deposits increased $28.7 million, or 4.3% from year-end 2014 to the close of the third quarter of 2015, while non-interest bearing demand deposits grew by $28.0 million, or 22.6%. The increase in interest-bearing deposits primarily reflected the attainment of a large commercial deposit relationship and normal cyclical deposit growth, partially offset by the planned runoff of higher-costing certificates of deposit generated through QwickRate®, a national deposit listing service. The increase in borrowed funds reflected an increase of $31.9 million, or 52.1%, in FHLB of Pittsburgh advances, partially offset by the $11.0 million, or 44.0%, prepayment of the Company’s subordinated debentures.
Total shareholders’ equity increased $8.2 million, or 16.0%, to $59.6 million at September 30, 2015 from $51.4 million at December 31, 2014. The capital improvement resulted primarily from net income of $6.6 million coupled with a $1.4 million increase in accumulated other comprehensive income, which resulted entirely from appreciation in the fair value of available-for-sale securities offset by the tax impact of the appreciation. At September 30, 2015, the Company’s total risk-based capital and Tier I leverage ratios were 11.20% and 6.57%, respectively. The respective ratios for the Bank at September 30, 2015 were 13.29% and 9.11%. The ratios exceeded the 10.00% and 5.00% required to be well capitalized under the prompt corrective action provisions of the Basel III capital framework for U.S. banking organizations, which became effective for the Company and the Bank on January 1, 2015.
Availability of Filings
Copies of the Company’s most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q will be provided upon request from: Shareholder Relations, First National Community Bancorp, Inc., 102 East Drinker Street, Dunmore, PA 18512 or by calling (570) 348-6419. These reports, along with all of the Company’s filings with the Securities and Exchange Commission are also available on the Investor Relations page of the Company’s website, www.fncb.com/investorrelations.
About First National Community Bank:
First National Community Bancorp, Inc. is the bank holding company of First National Community Bank, which provides personal, small business and commercial banking services to individuals and businesses throughout Lackawanna, Luzerne, and Wayne Counties in Northeastern Pennsylvania. The institution was established as a National Banking Association in 1910 as The First National Bank of Dunmore, and has been operating under its current name since 1988. For more information about FNCB, visit www.fncb.com.
INVESTOR CONTACT:
James M. Bone, Jr., CPA
Executive Vice President and
Chief Financial Officer
First National Community Bank
(570) 348-6419
james.bone@fncb.com
The Company may from time to time make written or oral “forward-looking statements,” including statements contained in the Company’s filings with the Securities and Exchange Commission (“SEC”), in its reports to shareholders, and in other communications by the Company, which are made in good faith by the Company pursuant to the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995.
These forward-looking statements include statements with respect to the Company’s beliefs, plans, objectives, goals, expectations, anticipations, estimates and intentions, that are subject to significant risks and uncertainties, and are subject to change based on various factors (some of which are beyond the Company’s control). The words “may,” “could,” “should,” “would,” “believe,” “anticipate,” “estimate,” “expect,” “intend,” “plan” and similar expressions are intended to identify forward-looking statements. The following factors, among others, could cause the Company’s financial performance to differ materially from the plans, objectives, expectations, estimates and intentions expressed in such forward-looking statements: the strength of the United States economy in general and the strength of the local economies in the Company’s markets; the effects of, and changes in trade, monetary and fiscal policies and laws, including interest rate policies of the Board of Governors of the Federal Reserve System; inflation, interest rate, market and monetary fluctuations; the timely development of and acceptance of new products and services; the ability of the Company to compete with other institutions for business; the composition and concentrations of the Company’s lending risk and the adequacy of the Company’s reserves to manage those risks; the valuation of the Company’s investment securities; the ability of the Company to pay dividends or repurchase common shares; the ability of the Company to retain key personnel; the impact of any pending or threatened litigation against the Company; the marketability of shares of the Company and fluctuations in the value of the Company’s share price; the impact of the Company’s ability to comply with its regulatory agreements and orders; the effectiveness of the Company’s system of internal controls; the ability of the Company to attract additional capital investment; the impact of changes in financial services’ laws and regulations (including laws concerning capital adequacy, taxes, banking, securities and insurance); the impact of technological changes and security risks upon the Company’s information technology systems; changes in consumer spending and saving habits; the nature, extent, and timing of governmental actions and reforms, and the success of the Company at managing the risks involved in the foregoing and other risks and uncertainties, including those detailed in the Company’s filings with the SEC.
The Company cautions that the foregoing list of important factors is not all inclusive. Readers are also cautioned not to place undue reliance on any forward-looking statements, which reflect management’s analysis only as of the date of this report, even if subsequently made available by the Company on its website or otherwise. The Company does not undertake to update any forward-looking statement, whether written or oral, that may be made from time to time by or on behalf of the Company to reflect events or circumstances occurring after the date of this report.
Readers should carefully review the risk factors described in the Annual Report and other documents that the Company periodically files with the Securities and Exchange Commission, including its Form 10-K for the year ended December 31, 2014.
First National Community Bancorp, Inc. |
Selected Financial Data |
| |
| | | Sept 30, | | | Jun 30, | | | Mar 31, | | | Dec 31, | | | Sept 30, | |
| | | 2015 | | | 2015 | | | 2015 | | | 2014 | | | 2014 | |
Per share data: | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
Net income (fully diluted) | | $ | 0.14 | | | $ | 0.05 | | | $ | 0.21 | | | $ | - | | | $ | 0.20 | |
| | | | | | | | | | | | | | | | | | | | | |
Cash dividends declared | | $ | - | | | $ | - | | | $ | - | | | $ | - | | | $ | - | |
| | | | | | | | | | | | | | | | | | | | | |
Book value | | $ | 3.61 | | | $ | 3.33 | | | $ | 3.38 | | | $ | 3.12 | | | $ | 3.06 | |
| | | | | | | | | | | | | | | | | | | | | |
Tangible book value | | $ | 3.60 | | | $ | 3.32 | | | $ | 3.36 | | | $ | 3.10 | | | $ | 3.03 | |
| | | | | | | | | | | | | | | | | | | | | |
Market value: | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
High | | $ | 6.05 | | | $ | 6.55 | | | $ | 5.40 | | | $ | 6.65 | | | $ | 6.85 | |
| | | | | | | | | | | | | | | | | | | | | |
Low | | $ | 5.02 | | | $ | 5.15 | | | $ | 5.25 | | | $ | 5.60 | | | $ | 5.75 | |
| | | | | | | | | | | | | | | | | | | | | |
Close | | $ | 5.19 | | | $ | 6.05 | | | $ | 5.26 | | | $ | 6.00 | | | $ | 6.75 | |
| | | | | | | | | | | | | | | | | | | | | |
Common shares outstanding | | | 16,500,945 | | | | 16,500,945 | | | | 16,500,945 | | | | 16,484,419 | | | | 16,471,569 | |
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
Selected ratios: | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
Annualized return on average assets | | | 0.91 | % | | | 0.34 | % | | | 1.45 | % | | | (0.01 | )% | | | 1.38 | % |
| | | | | | | | | | | | | | | | | | | | | |
Annualized return on average shareholders' equity | | | 16.38 | % | | | 5.89 | % | | | 26.34 | % | | | (0.24 | )% | | | 26.81 | % |
| | | | | | | | | | | | | | | | | | | | | |
Tier I leverage ratio | | | 6.57 | % | | | 6.64 | % | | | 6.57 | % | | | 6.05 | % | | | 6.19 | % |
| | | | | | | | | | | | | | | | | | | | | |
Total risk-based capital to risk-adjusted assets | | | 11.20 | % | | | 11.60 | % | | | 12.96 | % | | | 13.67 | % | | | 13.50 | % |
| | | | | | | | | | | | | | | | | | | | | |
Average shareholders' equity to average total assets | | | 5.55 | % | | | 5.73 | % | | | 5.52 | % | | | 5.22 | % | | | 5.14 | % |
| | | | | | | | | | | | | | | | | | | | | |
Yield on earning assets (FTE) | | | 3.50 | % | | | 3.45 | % | | | 3.48 | % | | | 3.56 | % | | | 3.84 | % |
| | | | | | | | | | | | | | | | | | | | | |
Cost of funds | | | 0.51 | % | | | 0.73 | % | | | 0.75 | % | | | 0.79 | % | | | 0.80 | % |
| | | | | | | | | | | | | | | | | | | | | |
Net interest spread (FTE) | | | 2.98 | % | | | 2.72 | % | | | 2.73 | % | | | 2.77 | % | | | 3.04 | % |
| | | | | | | | | | | | | | | | | | | | | |
Net interest margin (FTE) | | | 3.07 | % | | | 2.85 | % | | | 2.85 | % | | | 2.90 | % | | | 3.18 | % |
| | | | | | | | | | | | | | | | | | | | | |
Total delinquent loans/total loans | | | 1.29 | % | | | 1.34 | % | | | 1.10 | % | | | 1.21 | % | | | 1.16 | % |
| | | | | | | | | | | | | | | | | | | | | |
Allowance for loan and lease losses/total loans | | | 1.36 | % | | | 1.51 | % | | | 1.63 | % | | | 1.72 | % | | | 1.76 | % |
| | | | | | | | | | | | | | | | | | | | | |
Non-performing loans/total loans | | | 0.93 | % | | | 0.84 | % | | | 0.77 | % | | | 0.82 | % | | | 0.82 | % |
| | | | | | | | | | | | | | | | | | | | | |
Net charge-offs/average loans | | | 0.04 | % | | | 0.14 | % | | | 0.01 | % | | | 0.02 | % | | | 0.03 | % |
First National Community Bancorp, Inc. |
Year-to-Date Consolidated Statements of Income |
| |
| | | Nine Months Ended | |
| | | September 30, | |
(in thousands, except share data) | | 2015 | | | 2014 | |
Interest income | | | | | | | | |
Interest and fees on loans | | $ | 19,640 | | | $ | 19,958 | |
Interest and dividends on securities | | | | | | | | |
U.S. government agencies | | | 3,044 | | | | 2,496 | |
State and political subdivisions, tax-free | | | 91 | | | | 1,679 | |
State and political subdivisions, taxable | | | 447 | | | | 271 | |
Other securities | | | 331 | | | | 206 | |
Total interest and dividends on securities | | | 3,913 | | | | 4,652 | |
Interest on interest-bearing deposits in other banks | | | 42 | | | | 44 | |
Total interest income | | | 23,595 | | | | 24,654 | |
Interest expense | | | | | | | | |
Interest on deposits | | | 2,003 | | | | 2,435 | |
Interest on borrowed funds | | | | | | | | |
Interest on Federal Home Loan Bank of Pittsburgh advances | | | 367 | | | | 334 | |
Interest on subordinated debentures | | | 1,290 | | | | 1,706 | |
Interest on junior subordinated debentures | | | 150 | | | | 149 | |
Total interest on borrowed funds | | | 1,807 | | | | 2,189 | |
Total interest expense | | | 3,810 | | | | 4,624 | |
Net interest income before credit for loan and lease losses | | | 19,785 | | | | 20,030 | |
Credit for loan and lease losses | | | (340 | ) | | | (5,629 | ) |
Net interest income after credit for loan and lease losses | | | 20,125 | | | | 25,659 | |
Non-interest income | | | | | | | | |
Deposit service charges | | | 2,218 | | | | 2,217 | |
Net gain on the sale of securities | | | 2,302 | | | | 6,006 | |
Net gain on the sale of mortgage loans held for sale | | | 69 | | | | 223 | |
Net loss on the sale of education loans | | | - | | | | (13 | ) |
Net gain on the sale of other real estate owned | | | 145 | | | | 103 | |
Gain on branch divestitures | | | - | | | | 607 | |
Loan-related fees | | | 290 | | | | 292 | |
Income from bank-owned life insurance | | | 415 | | | | 496 | |
Legal settlements | | | 184 | | | | 2,127 | |
Other | | | 720 | | | | 799 | |
Total non-interest income | | | 6,343 | | | | 12,857 | |
Non-interest expense | | | | | | | | |
Salaries and employee benefits | | | 9,582 | | | | 9,809 | |
Occupancy expense | | | 1,665 | | | | 1,554 | |
Equipment expense | | | 1,234 | | | | 1,068 | |
Advertising expense | | | 335 | | | | 353 | |
Data processing expense | | | 1,420 | | | | 1,556 | |
Regulatory assessments | | | 711 | | | | 1,389 | |
Bank shares tax | | | 652 | | | | 372 | |
Expense of other real estate owned | | | 338 | | | | 2,495 | |
Legal expense | | | 331 | | | | 1,428 | |
Professional fees | | | 780 | | | | 1,240 | |
Insurance expense | | | 528 | | | | 757 | |
Other operating expenses | | | 2,301 | | | | 2,718 | |
Total non-interest expense | | | 19,877 | | | | 24,739 | |
Income before income taxes | | | 6,591 | | | | 13,777 | |
(Credit) provision for income taxes | | | (40 | ) | | | 326 | |
Net income | | $ | 6,631 | | | $ | 13,451 | |
| | | | | | | | | |
Income per share | | | | | | | | |
Basic | | $ | 0.40 | | | $ | 0.82 | |
Diluted | | $ | 0.40 | | | $ | 0.82 | |
| | | | | | | | | |
Cash dividends declared per common share | | $ | - | | | $ | - | |
Weighted average number of shares outstanding: | | | | | | | | |
Basic | | | 16,497,373 | | | | 16,471,569 | |
Diluted | | | 16,497,373 | | | | 16,471,851 | |
First National Community Bancorp, Inc. |
Quarter-to-Date Consolidated Statements of Income |
| |
| | | Three Months Ended | |
| | | Sept 30, | | | Jun 30, | | | Mar 31, | | | Dec 31, | | | Sept 30, | |
(in thousands, except share data) | | 2015 | | | 2015 | | | 2015 | | | 2014 | | | 2014 | |
Interest income | | | | | | | | | | | | | | | | | | | | |
Interest and fees on loans | | $ | 6,693 | | | $ | 6,475 | | | $ | 6,472 | | | $ | 6,671 | | | $ | 6,852 | |
Interest and dividends on securities | | | | | | | | | | | | | | | | | | | | |
U.S. government agencies | | | 1,061 | | | | 1,012 | | | | 971 | | | | 998 | | | | 893 | |
State and political subdivisions, tax-free | | | 19 | | | | 22 | | | | 50 | | | | 204 | | | | 409 | |
State and political subdivisions, taxable | | | 324 | | | | 97 | | | | 26 | | | | 53 | | | | 76 | |
Other securities | | | 92 | | | | 82 | | | | 157 | | | | 66 | | | | 74 | |
Total interest and dividends on securities | | | 1,496 | | | | 1,213 | | | | 1,204 | | | | 1,321 | | | | 1,452 | |
Interest on interest-bearing deposits in other banks | | | 10 | | | | 11 | | | | 21 | | | | 27 | | | | 8 | |
Total interest income | | | 8,199 | | | | 7,699 | | | | 7,697 | | | | 8,019 | | | | 8,312 | |
Interest expense | | | | | | | | | | | | | | | | | | | | |
Interest on deposits | | | 677 | | | | 643 | | | | 683 | | | | 745 | | | | 751 | |
Interest on borrowed funds | | | | | | | | | | | | | | | | | | | | |
Interest on Federal Home Loan Bank of Pittsburgh advances | | | 128 | | | | 119 | | | | 120 | | | | 116 | | | | 125 | |
Interest on subordinated debentures | | | 162 | | | | 565 | | | | 563 | | | | 575 | | | | 575 | |
Interest on junior subordinated debentures | | | 50 | | | | 51 | | | | 49 | | | | 87 | | | | 50 | |
Total interest on borrowed funds | | | 340 | | | | 735 | | | | 732 | | | | 778 | | | | 750 | |
Total interest expense | | | 1,017 | | | | 1,378 | | | | 1,415 | | | | 1,523 | | | | 1,501 | |
Net interest income before (credit) provision for loan and lease losses | | | 7,182 | | | | 6,321 | | | | 6,282 | | | | 6,496 | | | | 6,811 | |
(Credit) provision for loan and lease losses | | | (191 | ) | | | 345 | | | | (494 | ) | | | (240 | ) | | | (54 | ) |
Net interest income after (credit) provision for loan and lease losses | | | 7,373 | | | | 5,976 | | | | 6,776 | | | | 6,736 | | | | 6,865 | |
Non-interest income | | | | | | | | | | | | | | | | | | | | |
Deposit service charges | | | 799 | | | | 745 | | | | 674 | | | | 758 | | | | 781 | |
Net gain on the sale of securities | | | 4 | | | | 74 | | | | 2,224 | | | | 634 | | | | 2,958 | |
Net gain on the sale of mortgage loans held for sale | | | 13 | | | | 16 | | | | 40 | | | | 69 | | | | 57 | |
Net gain on the sale of other real estate owned | | | 129 | | | | 11 | | | | 5 | | | | 106 | | | | 35 | |
Loan-related fees | | | 94 | | | | 106 | | | | 90 | | | | 148 | | | | 101 | |
Income from bank-owned life insurance | | | 145 | | | | 135 | | | | 135 | | | | 154 | | | | 165 | |
Legal settlements | | | - | | | | 184 | | | | - | | | | - | | | | - | |
Other | | | 195 | | | | 274 | | | | 251 | | | | 194 | | | | 345 | |
Total non-interest income | | | 1,379 | | | | 1,545 | | | | 3,419 | | | | 2,063 | | | | 4,442 | |
Non-interest expense | | | | | | | | | | | | | | | | | | | | |
Salaries and employee benefits | | | 3,240 | | | | 3,203 | | | | 3,139 | | | | 3,302 | | | | 3,316 | |
Occupancy expense | | | 500 | | | | 532 | | | | 633 | | | | 534 | | | | 438 | |
Equipment expense | | | 408 | | | | 442 | | | | 384 | | | | 403 | | | | 355 | |
Data processing expense | | | 471 | | | | 501 | | | | 448 | | | | 532 | | | | 508 | |
Regulatory assessments | | | 203 | | | | 99 | | | | 409 | | | | 412 | | | | 266 | |
Bank shares tax | | | 217 | | | | 218 | | | | 217 | | | | 150 | | | | 21 | |
Expense of other real estate owned | | | 91 | | | | 147 | | | | 100 | | | | 74 | | | | 514 | |
Legal expense | | | 80 | | | | 88 | | | | 163 | | | | 371 | | | | 268 | |
Professional fees | | | 193 | | | | 286 | | | | 301 | | | | 327 | | | | 306 | |
Insurance expense | | | 128 | | | | 202 | | | | 198 | | | | 194 | | | | 196 | |
Other operating expenses | | | 884 | | | | 962 | | | | 790 | | | | 2,531 | | | | 1,595 | |
Total non-interest expense | | | 6,415 | | | | 6,680 | | | | 6,782 | | | | 8,830 | | | | 7,783 | |
Income before income taxes | | | 2,337 | | | | 841 | | | | 3,413 | | | | (31 | ) | | | 3,524 | |
Provision (Credit) for income taxes | | | - | | | | 22 | | | | (62 | ) | | | - | | | | 166 | |
Net income | | $ | 2,337 | | | $ | 819 | | | $ | 3,475 | | | $ | (31 | ) | | $ | 3,358 | |
| | | | | | | | | | | | | | | | | | | | | |
Income per share | | | | | | | | | | | | | | | | | | | | |
Basic | | $ | 0.14 | | | $ | 0.05 | | | $ | 0.21 | | | $ | - | | | $ | 0.20 | |
Diluted | | $ | 0.14 | | | $ | 0.05 | | | $ | 0.21 | | | $ | - | | | $ | 0.20 | |
| | | | | | | | | | | | | | | | | | | | | |
Cash dividends declared per common share | | $ | - | | | $ | - | | | $ | - | | | $ | - | | | $ | - | |
Weighted average number of shares outstanding: | | | | | | | | | | | | | | | | | | | | |
Basic | | | 16,500,945 | | | | 16,500,945 | | | | 16,490,111 | | | | 16,475,899 | | | | 16,471,569 | |
Diluted | | | 16,500,945 | | | | 16,500,945 | | | | 16,490,111 | | | | 16,475,899 | | | | 16,471,569 | |
First National Community Bancorp, Inc. |
Consolidated Balance Sheets |
| |
| | | Sept 30, | | | Jun 30, | | | Mar 31, | | | Dec 31, | | | Sept 30, | |
(in thousands) | | 2015 | | | 2015 | | | 2015 | | | 2014 | | | 2014 | |
Assets | | | | | | | | | | | | | | | | | | | | |
Cash and cash equivalents: | | | | | | | | | | | | | | | | | | | | |
Cash and due from banks | | $ | 20,631 | | | $ | 22,443 | | | $ | 19,985 | | | $ | 22,657 | | | $ | 21,532 | |
Interest-bearing deposits in other banks | | | 10,383 | | | | 49,872 | | | | 17,390 | | | | 13,010 | | | | 18,461 | |
Total cash and cash equivalents | | | 31,014 | | | | 72,315 | | | | 37,375 | | | | 35,667 | | | | 39,993 | |
Securities available for sale, at fair value | | | 249,228 | | | | 226,539 | | | | 204,635 | | | | 218,989 | | | | 217,412 | |
Stock in Federal Home Loan Bank of Pittsburgh at cost | | | 4,298 | | | | 2,684 | | | | 3,061 | | | | 2,803 | | | | 4,356 | |
Loans held for sale | | | 4,634 | | | | 138 | | | | - | | | | 603 | | | | 171 | |
Loans, net of net deferred costs and unearned income | | | 723,166 | | | | 683,588 | | | | 672,165 | | | | 670,267 | | | | 678,160 | |
Allowance for loan and lease losses | | | (9,825 | ) | | | (10,328 | ) | | | (10,944 | ) | | | (11,520 | ) | | | (11,898 | ) |
Net loans | | | 713,341 | | | | 673,260 | | | | 661,221 | | | | 658,747 | | | | 666,262 | |
Bank premises and equipment, net | | | 11,258 | | | | 11,059 | | | | 11,221 | | | | 11,003 | | | | 11,094 | |
Accrued interest receivable | | | 2,618 | | | | 2,174 | | | | 2,118 | | | | 2,075 | | | | 2,158 | |
Intangible assets | | | 179 | | | | 220 | | | | 261 | | | | 302 | | | | 344 | |
Bank-owned life insurance | | | 29,232 | | | | 29,087 | | | | 28,952 | | | | 28,817 | | | | 28,663 | |
Other real estate owned | | | 1,618 | | | | 1,740 | | | | 2,369 | | | | 2,255 | | | | 2,617 | |
Other assets | | | 7,799 | | | | 8,455 | | | | 9,028 | | | | 8,768 | | | | 9,063 | |
Total assets | | $ | 1,055,219 | | | $ | 1,027,671 | | | $ | 960,241 | | | $ | 970,029 | | | $ | 982,133 | |
| | | | | | | | | | | | | | | | | | | | | |
Liabilities | | | | | | | | | | | | | | | | | | | | |
Deposits: | | | | | | | | | | | | | | | | | | | | |
Demand (non-interest-bearing) | | $ | 152,038 | | | $ | 144,075 | | | $ | 134,993 | | | $ | 124,064 | | | $ | 148,430 | |
Interest-bearing | | | 700,004 | | | | 721,293 | | | | 640,118 | | | | 671,272 | | | | 654,766 | |
Total deposits | | | 852,042 | | | | 865,368 | | | | 775,111 | | | | 795,336 | | | | 803,196 | |
Borrowed funds: | | | | | | | | | | | | | | | | | | | | |
Federal Home Loan Bank of Pittsburgh advances | | | 93,058 | | | | 57,771 | | | | 67,612 | | | | 61,194 | | | | 68,786 | |
Subordinated debentures | | | 14,000 | | | | 14,000 | | | | 25,000 | | | | 25,000 | | | | 25,000 | |
Junior subordinated debentures | | | 10,310 | | | | 10,310 | | | | 10,310 | | | | 10,310 | | | | 10,310 | |
Total borrowed funds | | | 117,368 | | | | 82,081 | | | | 102,922 | | | | 96,504 | | | | 104,096 | |
Accrued interest payable | | | 11,187 | | | | 11,344 | | | | 10,788 | | | | 10,262 | | | | 10,515 | |
Other liabilities | | | 14,989 | | | | 13,935 | | | | 15,678 | | | | 16,529 | | | | 14,005 | |
Total liabilities | | | 995,586 | | | | 972,728 | | | | 904,499 | | | | 918,631 | | | | 931,812 | |
| | | | | | | | | | | | | | | | | | | | | |
Shareholders' equity | | | | | | | | | | | | | | | | | | | | |
Preferred stock | | | - | | | | - | | | | - | | | | - | | | | - | |
Common stock | | | 20,626 | | | | 20,626 | | | | 20,626 | | | | 20,605 | | | | 20,589 | |
Additional paid-in capital | | | 61,939 | | | | 61,870 | | | | 61,801 | | | | 61,781 | | | | 61,692 | |
Accumulated deficit | | | (25,495 | ) | | | (27,832 | ) | | | (28,651 | ) | | | (32,126 | ) | | | (32,095 | ) |
Accumulated other comprehensive income | | | 2,563 | | | | 279 | | | | 1,966 | | | | 1,138 | | | | 135 | |
Total shareholders' equity | | | 59,633 | | | | 54,943 | | | | 55,742 | | | | 51,398 | | | | 50,321 | |
Total liabilities and shareholders’ equity | | $ | 1,055,219 | | | $ | 1,027,671 | | | $ | 960,241 | | | $ | 970,029 | | | $ | 982,133 | |
First National Community Bancorp, Inc. |
Summary Tax-equivalent Net Interest Income |
| |
| | | Three Months Ended | |
| | | Sept 30, | | | Jun 30, | | | Mar 31, | | | Dec 31, | | | Sept 30, | |
(dollars in thousands) | | 2015 | | | 2015 | | | 2015 | | | 2014 | | | 2014 | |
Interest income | | | | | | | | | | | | | | | | | | | | |
Loans: | | | | | | | | | | | | | | | | | | | | |
Loans - taxable | | $ | 6,371 | | | $ | 6,148 | | | $ | 6,148 | | | $ | 6,340 | | | $ | 6,524 | |
Loans - tax-free | | | 488 | | | | 495 | | | | 491 | | | | 501 | | | | 497 | |
Total loans | | | 6,859 | | | | 6,643 | | | | 6,639 | | | | 6,841 | | | | 7,021 | |
Securities: | | | | | | | | | | | | | | | | | | | | |
Securities, taxable | | | 1,477 | | | | 1,191 | | | | 1,154 | | | | 1,117 | | | | 1,043 | |
Securities, tax-free | | | 29 | | | | 33 | | | | 76 | | | | 309 | | | | 620 | |
Total interest and dividends on securities | | | 1,506 | | | | 1,224 | | | | 1,230 | | | | 1,426 | | | | 1,663 | |
Interest-bearing deposits in other banks | | | 10 | | | | 11 | | | | 21 | | | | 27 | | | | 8 | |
Total interest income | | | 8,375 | | | | 7,878 | | | | 7,890 | | | | 8,294 | | | | 8,692 | |
Interest expense | | | | | | | | | | | | | | | | | | | | |
Deposits | | | 677 | | | | 643 | | | | 683 | | | | 745 | | | | 751 | |
Borrowed funds | | | 340 | | | | 735 | | | | 732 | | | | 778 | | | | 750 | |
Total interest expense | | | 1,017 | | | | 1,378 | | | | 1,415 | | | | 1,523 | | | | 1,501 | |
Net interest income | | $ | 7,358 | | | $ | 6,500 | | | $ | 6,475 | | | $ | 6,771 | | | $ | 7,191 | |
| | | | | | | | | | | | | | | | | | | | | |
Average balances | | | | | | | | | | | | | | | | | | | | |
Earning assets: | | | | | | | | | | | | | | | | | | | | |
Loans: | | | | | | | | | | | | | | | | | | | | |
Loans - taxable | | $ | 660,709 | | | $ | 637,005 | | | $ | 633,731 | | | $ | 635,146 | | | $ | 635,032 | |
Loans - tax-free | | | 41,746 | | | | 42,225 | | | | 41,125 | | | | 40,477 | | | | 39,849 | |
Total loans | | | 702,455 | | | | 679,230 | | | | 674,856 | | | | 675,623 | | | | 674,881 | |
Securities: | | | | | | | | | | | | | | | | | | | | |
Securities, taxable | | | 241,799 | | | | 211,833 | | | | 194,268 | | | | 196,351 | | | | 177,863 | |
Securities, tax-free | | | 1,707 | | | | 2,007 | | | | 4,283 | | | | 17,055 | | | | 36,246 | |
Total interest and dividends on securities | | | 243,506 | | | | 213,840 | | | | 198,551 | | | | 213,406 | | | | 214,109 | |
Interest-bearing deposits in other banks | | | 12,185 | | | | 18,984 | | | | 34,708 | | | | 43,618 | | | | 15,983 | |
Total interest-earning assets | | | 958,146 | | | | 912,054 | | | | 908,115 | | | | 932,647 | | | | 904,973 | |
Non-earning assets | | | 62,063 | | | | 62,254 | | | | 61,476 | | | | 58,826 | | | | 62,582 | |
Total assets | | $ | 1,020,209 | | | $ | 974,308 | | | $ | 969,591 | | | $ | 991,473 | | | $ | 967,555 | |
Interest-bearing liabilities: | | | | | | | | | | | | | | | | | | | | |
Deposits | | $ | 690,039 | | | $ | 646,656 | | | $ | 658,193 | | | $ | 675,901 | | | $ | 640,394 | |
Borrowed funds | | | 105,109 | | | | 108,234 | | | | 99,046 | | | | 99,251 | | | | 114,137 | |
Total interest-bearing liabilities | | | 795,148 | | | | 754,890 | | | | 757,239 | | | | 775,152 | | | | 754,531 | |
Demand deposits | | | 143,140 | | | | 137,674 | | | | 132,316 | | | | 139,336 | | | | 137,992 | |
Other liabilities | | | 25,303 | | | | 25,964 | | | | 26,525 | | | | 25,278 | | | | 25,337 | |
Shareholders' equity | | | 56,618 | | | | 55,780 | | | | 53,511 | | | | 51,707 | | | | 49,695 | |
Total liabilities and shareholders' equity | | $ | 1,020,209 | | | $ | 974,308 | | | $ | 969,591 | | | $ | 991,473 | | | $ | 967,555 | |
| | | | | | | | | | | | | | | | | | | | | |
Yield/Cost | | | | | | | | | | | | | | | | | | | | |
Earning assets: | | | | | | | | | | | | | | | | | | | | |
Loans: | | | | | | | | | | | | | | | | | | | | |
Interest and fees on loans - taxable | | | 3.86 | % | | | 3.86 | % | | | 3.88 | % | | | 3.99 | % | | | 4.11 | % |
Interest and fees on loans - tax-free | | | 4.67 | % | | | 4.69 | % | | | 4.78 | % | | | 4.95 | % | | | 4.99 | % |
Total loans | | | 3.91 | % | | | 3.91 | % | | | 3.94 | % | | | 4.05 | % | | | 4.16 | % |
Securities: | | | | | | | | | | | | | | | | | | | | |
Securities, taxable | | | 2.44 | % | | | 2.25 | % | | | 2.38 | % | | | 2.28 | % | | | 2.35 | % |
Securities, tax-free | | | 6.75 | % | | | 6.64 | % | | | 7.10 | % | | | 7.25 | % | | | 6.84 | % |
Total interest and dividends on securities | | | 2.47 | % | | | 2.29 | % | | | 2.48 | % | | | 2.67 | % | | | 3.11 | % |
Interest on interest-bearing deposits in other banks | | | 0.33 | % | | | 0.23 | % | | | 0.24 | % | | | 0.25 | % | | | 0.20 | % |
Total earning assets | | | 3.50 | % | | | 3.45 | % | | | 3.48 | % | | | 3.56 | % | | | 3.84 | % |
Interest-bearing liabilities: | | | | | | | | | | | | | | | | | | | | |
Interest on deposits | | | 0.39 | % | | | 0.40 | % | | | 0.42 | % | | | 0.44 | % | | | 0.47 | % |
Interest on borrowed funds | | | 1.29 | % | | | 2.72 | % | | | 2.96 | % | | | 3.14 | % | | | 2.63 | % |
Total interest-bearing liabilities | | | 0.51 | % | | | 0.73 | % | | | 0.75 | % | | | 0.79 | % | | | 0.80 | % |
Net interest spread | | | 2.98 | % | | | 2.72 | % | | | 2.73 | % | | | 2.77 | % | | | 3.04 | % |
Net interest margin | | | 3.07 | % | | | 2.85 | % | | | 2.85 | % | | | 2.90 | % | | | 3.18 | % |
First National Community Bancorp, Inc. |
Asset Quality Data |
| |
| | | Sept 30, | | | Jun 30, | | | Mar 31, | | | Dec 31, | | | Sept 30, | |
(in thousands) | | 2015 | | | 2015 | | | 2015 | | | 2014 | | | 2014 | |
At period end | | | | | | | | | | | | | | | | | | | | |
Non-accrual loans, including non-performing troubled debt restructured loans (TDRs) | | $ | 6,741 | | | $ | 5,757 | | | $ | 5,184 | | | $ | 5,522 | | | $ | 5,539 | |
Loans past due 90 days or more and still accruing | | | - | | | | - | | | | - | | | | - | | | | 49 | |
Total non-performing loans | | | 6,741 | | | | 5,757 | | | | 5,184 | | | | 5,522 | | | | 5,588 | |
Other real estate owned (OREO) | | | 1,618 | | | | 1,740 | | | | 2,369 | | | | 2,255 | | | | 2,617 | |
Total non-performing loans and OREO | | $ | 8,359 | | | $ | 7,497 | | | $ | 7,553 | | | $ | 7,777 | | | $ | 8,205 | |
| | | | | | | | | | | | | | | | | | | | | |
TDRs performing in accordance with modified terms | | $ | 5,065 | | | $ | 5,289 | | | $ | 5,807 | | | $ | 5,282 | | | $ | 5,326 | |
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
For the three months ended | | | | | | | | | | | | | | | | | | | | |
Allowance for loan and lease losses | | | | | | | | | | | | | | | | | | | | |
Beginning balance | | $ | 10,328 | | | $ | 10,944 | | | $ | 11,520 | | | $ | 11,898 | | | $ | 12,175 | |
Loans charged-off | | | 968 | | | | 1,192 | | | | 277 | | | | 427 | | | | 359 | |
Recoveries of charged-off loans | | | 656 | | | | 231 | | | | 195 | | | | 289 | | | | 136 | |
Net charge-offs | | | 312 | | | | 961 | | | | 82 | | | | 138 | | | | 223 | |
(Credit) provsion for loan and lease losses | | | (191 | ) | | | 345 | | | | (494 | ) | | | (240 | ) | | | (54 | ) |
Ending balance | | $ | 9,825 | | | $ | 10,328 | | | $ | 10,944 | | | $ | 11,520 | | | $ | 11,898 | |
