| FOX CHASE BANCORP, INC. | | ANNUAL EARNINGS RELEASE 2010 |
| PAGE 1 | | |
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For Immediate Release
Date: Contact: Phone: | | February 2, 2011 Roger S. Deacon Chief Financial Officer (215) 775-1435 |
FOX CHASE BANCORP, INC. REPORTS INCREASE IN EARNINGS
FOR THE YEAR AND FOURTH QUARTER
(Announces Initial Cash Dividend)
HATBORO, PA, February 2, 2011 – Fox Chase Bancorp, Inc. (the “Company”) (NASDAQ GM: FXCB), the holding company for Fox Chase Bank (the “Bank”), today announced net income of $2.7 million, or $0.20 per share, for the year ended December 31, 2010, compared to a net loss of $1.0 million, or $(0.07) per share, for the year ended December 31, 2009. The Company reported net income of $893,000, or $0.07 per share, for the quarter ended December 31, 2010 compared to a net loss of $2.4 million, or $(0.18) per share, for the quarter ended December 31, 2009.
The Company also announced that its Board of Directors has declared a cash dividend of $0.02 per outstanding share of common stock. The dividend will be paid on or about March 1, 2011 to stockholders of record as of the close of business on February 14, 2011. This is the first cash dividend since the Company completed its conversion to a stock holding company in 2010.
| FOX CHASE BANCORP, INC. | | ANNUAL EARNINGS RELEASE 2010 |
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Highlights for the year and quarter ended December 31, 2010 included:
| · | Net interest income increased $3.8 million, or 16.0%, to $27.6 million for the year ended December 31, 2010 from $23.8 million for the same period in 2009. Net interest margin was 2.42% for the year ended December 31, 2010 compared to 2.16% for the year ended December 31, 2009. The improvement in net interest income and margin was primarily driven by a decrease in interest expense on deposits as significant maturities of higher rate certificates of deposit and repricing of other deposit products occurred during the year. |
| · | Net interest income increased $975,000, or 15.1%, to $7.4 million for the quarter ended December 31, 2010, compared to $6.4 million for the quarter ended December 31, 2009. Net interest margin was 2.72% for the quarter ended December 31, 2010 compared to 2.35% for the quarter ended September 30, 2010 and 2.20% for the quarter ended December 31, 2009. |
| · | The efficiency ratio improved to 71.1% for the year ended December 31, 2010 compared to 79.9% for the year ended December 31, 2009. The efficiency ratio improved to 67.0% for the quarter ended December 31, 2010 compared to 70.0% for the quarter ended September 30, 2010 and 67.7% for the quarter ended December 31, 2009. The quarter ended December 31, 2009 included a reversal of certain incentive compensation accruals recorded in prior quarters in 2009. |
| · | The provision for loan losses decreased $2.8 million to $6.2 million for the year ended December 31, 2010 from $9.0 million for year ended December 31, 2009. The provision for loan losses was elevated in 2009 due to increases in nonperforming loans, criticized and classified loans and delinquent loans during that year. |
| · | Service charges and other fee income increased $194,000, or 21.1%, to $1.1 million for the year ended December 31, 2010 from $918,000 for the same period in 2009. The increase was primarily due to an increase in loan and cash management fee income due to continued emphasis on commercial loan customers. |
| · | Noninterest expense increased $1.0 million, or 5.1%, to $21.4 million for the year ended December 31, 2010 from $20.3 million for the same period in 2009. Included in this increase is $543,000 of costs related to other real estate owned. There were no such other real estate owned costs in the year ended December 31, 2009. Salaries, benefits and compensation increased $625,000 for the year ended December 31, 2010 due to higher salary expense from annual merit increases, higher incentive compensation accruals and incremental ESOP costs as the Company increased the benefits for employees in conjunction with the mutual to stock conversion in the second quarter of 2010. Professional fees increased by $267,000 for the year ended December 31, 2010 primarily due to incremental legal costs associated with the elevated lev el of nonperforming assets. FDIC premiums decreased $394,000 for the year ended December 31, 2010 primarily due to the special assessment of $536,000 which occurred during the second quarter of 2009. |
| FOX CHASE BANCORP, INC. | | ANNUAL EARNINGS RELEASE 2010 |
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| · | Total assets were $1.10 billion at December 31, 2010, a decrease of $78.3 million, or 6.7%, from $1.17 billion at December 31, 2009. The decrease was primarily due to a $72.5 million, or 18.0%, decrease in total mortgage related securities, a $27.1 million decrease in cash and cash equivalents offset by an $11.4 million increase in loans and $13.1 million increase in investment securities. |
| · | During the quarter ended December 31, 2010, loans decreased by $12.7 million to $642.7 million from $655.4 million at September 30, 2010. The Company experienced decreases in residential mortgage loans of $18.1 million, consumer loans of $5.3 million and commercial construction loans of $3.9 million, as the Company continued to de-emphasize these types of loans. The decrease was offset by increases in multi-family and commercial real estate loans of $13.7 million and commercial and industrial loans of $2.0 million. |
| · | Total liabilities were $889.8 million at December 31, 2010, a decrease of $160.4 million, or 15.3%, from $1.05 billion at December 31, 2009. The decrease was primarily a result of a reduction in higher-rate certificates of deposit of approximately $127.6 million and in higher-rate money market accounts of approximately $35.5 million offset by an increase in noninterest-bearing deposit accounts. During 2010, the Bank had $157.2 million of promotional certificates of deposit mature at an average rate of 3.50%. Of this promotion, approximately $57.8 million were retained at an average rate of 1.37%. Additionally, FHLB advances decreased $14.4 million to $122.8 million at December 31, 2010 from $137.2 million at December 31, 2009 due to a $10.0 million maturity as well as principal amortization during 2010. |
| · | Total stockholders’ equity was $205.7 million at December 31, 2010, an increase of $82.1 million, or 66.4%, from $123.6 million at December 31, 2009, due primarily to the $77.8 million in net proceeds from the Company’s second step conversion and reorganization to a fully public entity. |
| FOX CHASE BANCORP, INC. | | ANNUAL EARNINGS RELEASE 2010 |
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Credit related items as of and for the quarter ended December 31, 2010 include:
| · | The allowance for loan losses increased to $12.4 million, or 1.90% of total loans, at December 31, 2010 compared to $11.3 million, or 1.70% of total loans at September 30, 2010 and $10.6 million, or 1.65% of total loans, at December 31, 2009; |
| · | Net loan charge-offs decreased $332,000 to $4.4 million for the twelve months ended December 31, 2010 compared to $4.7 million for the twelve months ended December 31, 2009. |
| · | Nonperforming assets declined to $29.8 million, or 2.72% of total assets, at December 31, 2010 from $31.5 million, or 2.78% of total assets, at September 30, 2010 and $33.7 million, or 2.87% of total assets, at December 31, 2009; |
| · | Nonperforming assets were comprised of the following asset classes at December 31, 2010 and September 30, 2010, respectively: |
| o | construction loans for residential projects – decreased to $9.3 million from $11.1 million; |
| o | commercial real estate loans – decreased to $6.2 million from $8.2 million; |
| o | commercial and industrial loans – decreased to $0 from $308,000; |
| o | one-to-four family residential and home equity loans – increased to $11.2 million from $8.0 million; and |
| o | other real estate owned – decreased to $3.2 million from $3.8 million. |
Commenting on the Company’s fourth quarter and year to date performance, Thomas M. Petro, President and Chief Executive Officer said, “We closed the year with encouraging results. Our operating returns improved, driven by an increase in net interest margin and continued improvement in our efficiency ratio. Loan growth in our commercial real estate and C&I portfolios has been slow and, we believe, prudent in light of soft economic conditions in our region. From a credit perspective, we believe there has been a certain level of economic stabilization, but we expect an elevated level of credit stress in the near term as we work through individual credits. We believe the Company is well positioned to exit the credit cycle with a strong balance sheet and capital to grow. Finally, we are pleased to annou nce our first dividend of $0.02 per share for the Company as we return a portion of earnings to shareholders.”
| FOX CHASE BANCORP, INC. | | ANNUAL EARNINGS RELEASE 2010 |
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Fox Chase Bancorp, Inc will host a conference call to discuss fourth quarter and year to date 2010 results on Thursday, February 3, 2011 at 9:00 am EST. The general public can access the call by dialing (877) 317-6789. A replay of the conference call will be available through February 18, 2011 by dialing (877) 344-7529; use Conference ID: 447921.
Fox Chase Bancorp, Inc. is the stock holding company of Fox Chase Bank. The Bank is a federally chartered savings bank originally established in 1867. The Bank offers traditional banking services and products from its main office in Hatboro, Pennsylvania and ten branch offices in Bucks, Montgomery, Chester, Delaware 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 materiall y 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. 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.
| FOX CHASE BANCORP, INC. | | ANNUAL EARNINGS RELEASE 2010 |
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CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in Thousands, Except Per Share Data)
| | | Three Months Ended | | | Twelve Months Ended | |
| | | December 31, | | | December 31, | |
| | | 2010 | | | 2009 | | | 2010 | | | 2009 | |
| | | (Unaudited) | (Unaudited) | | (Audited) | |
| INTEREST INCOME | | | | | | | | | |
| Interest and fees on loans | | $ | 9,003 | | | $ | 8,860 | | | $ | 36,320 | | | $ | 34,693 | |
| Interest on money market funds | | | - | | | | - | | | | - | | | | 183 | |
| Interest on mortgage related securities | | | 2,436 | | | | 3,919 | | | | 11,874 | | | | 14,654 | |
| Interest on investment securities available-for-sale | | | | | | | | | | | | | | | | |
| Taxable | | | 156 | | | | 140 | | | | 471 | | | | 763 | |
| Nontaxable | | | 77 | | | | 92 | | | | 334 | | | | 482 | |
| Dividend income | | | - | | | | - | | | | - | | | | 1 | |
| Other interest income | | | 37 | | | | 196 | | | | 286 | | | | 622 | |
| Total Interest Income | | | 11,709 | | | | 13,207 | | | | 49,285 | | | | 51,398 | |
| INTEREST EXPENSE | | | | | | | | | | | | | | | | |
| Deposits | | | 2,672 | | | | 5,013 | | | | 15,203 | | | | 20,589 | |
| Federal Home Loan Bank advances | | | 1,187 | | | | 1,319 | | | | 4,789 | | | | 5,311 | |
| Other borrowed funds | | | 437 | | | | 437 | | | | 1,733 | | | | 1,735 | |
| Total Interest Expense | | | 4,296 | | | | 6,769 | | | | 21,725 | | | | 27,635 | |
| Net Interest Income | | | 7,413 | | | | 6,438 | | | | 27,560 | | | | 23,763 | |
| Provision for loan losses | | | 1,358 | | | | 6,640 | | | | 6,213 | | | | 9,052 | |
| Net Interest Income (Loss) after Provision for Loan Losses | | | 6,055 | | | | (202 | ) | | | 21,347 | | | | 14,711 | |
| NONINTEREST INCOME | | | | | | | | | | | | | | | | |
| Service charges and other fee income | | | 370 | | | | 246 | | | | 1,112 | | | | 918 | |
| Net gain on sale of premises and equipment | | | - | | | | - | | | | 6 | | | | 3 | |
| Net gain on sale of other real estate owned | | | 44 | | | | - | | | | 44 | | | | - | |
| Impairment loss on real estate held for investment | | | - | | | | (150 | ) | | | - | | | | (150 | ) |
| Income on bank-owned life insurance | | | 119 | | | | 117 | | | | 471 | | | | 453 | |
| Other | | | 126 | | | | 50 | | | | 293 | | | | 319 | |
| | | | | | | | | | | | | | | | | |
| Total other-than-temporary impairment loss | | | - | | | | - | | | | - | | | | (605 | ) |
| Less: Portion of loss recognized in other comprehensive income (before taxes) | | | - | | | | - | | | | - | | | | 448 | |
| Net other-than-temporary impairment loss | | | - | | | | - | | | | - | | | | (157 | ) |
| Net gains on sale of investment securities | | | - | | | | 835 | | | | 1,963 | | | | 2,381 | |
| Net investment securities gains | | | - | | | | 835 | | | | 1,963 | | | | 2,224 | |
| Total Noninterest Income | | | 659 | | | | 1,098 | | | | 3,889 | | | | 3,767 | |
| NONINTEREST EXPENSE | | | | | | | | | | | | | | | | |
| Salaries, benefits and other compensation | | | 3,112 | | | | 2,540 | | | | 12,128 | | | | 11,503 | |
| Occupancy expense | | | 428 | | | | 451 | | | | 1,822 | | | | 1,825 | |
| Furniture and equipment expense | | | 135 | | | | 153 | | | | 562 | | | | 724 | |
| Data processing costs | | | 390 | | | | 372 | | | | 1,524 | | | | 1,518 | |
| Professional fees | | | 450 | | | | 276 | | | | 1,374 | | | | 1,107 | |
| Marketing expense | | | 50 | | | | 104 | | | | 291 | | | | 346 | |
| FDIC premiums | | | 285 | | | | 380 | | | | 1,401 | | | | 1,795 | |
| Provision for loss on other real estate owned | | | 57 | | | | - | | | | 436 | | | | - | |
| Other real estate owned expense | | | 32 | | | | - | | | | 107 | | | | - | |
| Other | | | 493 | | | | 360 | | | | 1,727 | | | | 1,515 | |
| Total Noninterest Expense | | | 5,432 | | | | 4,636 | | | | 21,372 | | | | 20,333 | |
| Income (Loss) Before Income Taxes | | | 1,282 | | | | (3,740 | ) | | | 3,864 | | | | (1,855 | ) |
| Income tax provision (benefit) | | | 389 | | | | (1,300 | ) | | | 1,120 | | | | (827 | ) |
| Net Income (Loss) | | $ | 893 | | | $ | (2,440 | ) | | $ | 2,744 | | | $ | (1,028 | ) |
| Earnings (loss) per share: | | | | | | | | | | | | | | | | |
| Basic | | $ | 0.07 | | | $ | (0.18 | ) | | $ | 0.20 | | | $ | (0.07 | ) |
| Diluted | | $ | 0.07 | | | $ | (0.18 | ) | | $ | 0.20 | | | $ | (0.07 | ) |
FOX CHASE BANCORP, INC. ANNUAL EARNINGS 2010
PAGE 7
CONSOLIDATED STATEMENTS OF CONDITION
(Dollars in Thousands, Except Per Share Data)
| | | December 31, | |
| | | 2010 | | | 2009 | |
| | | (Unaudited) | | | (Audited) | |
| ASSETS | |
| Cash and due from banks | | $ | 156 | | | $ | 44 | |
| Interest-earning demand deposits in other banks | | | 38,158 | | | | 65,374 | |
| Total cash and cash equivalents | | | 38,314 | | | | 65,418 | |
| | | | | | | | | |
| Investment securities available-for-sale | | | 32,671 | | | | 19,548 | |
| Mortgage related securities available-for-sale | | | 278,632 | | | | 402,919 | |
| Mortgage related securities held-to-maturity (fair value of $50,817 and $0) | | | 51,835 | | | | - | |
| Loans, net of allowance for loan losses of $12,443 | | | | | | | | |
| at December 31, 2010 and $10,605 at December 31, 2009 | | | 642,653 | | | | 631,296 | |
| Other real estate owned | | | 3,186 | | | | 4,052 | |
| Federal Home Loan Bank stock, at cost | | | 9,913 | | | | 10,435 | |
| Bank-owned life insurance | | | 13,138 | | | | 12,667 | |
| Premises and equipment | | | 10,693 | | | | 11,137 | |
| Real estate held for investment | | | 1,730 | | | | 1,730 | |
| Accrued interest receivable | | | 4,500 | | | | 4,467 | |
| Mortgage servicing rights, net | | | 448 | | | | 683 | |
| Deferred tax asset, net | | | 1,376 | | | | 1,467 | |
| Other assets | | | 6,414 | | | | 7,999 | |
| Total Assets | | $ | 1,095,503 | | | $ | 1,173,818 | |
| | | | | | | | | |
| LIABILITIES AND STOCKHOLDERS' EQUITY | |
| LIABILITIES | |
| Deposits | | $ | 711,763 | | | $ | 858,277 | |
| Federal Home Loan Bank advances | | | 122,800 | | | | 137,165 | |
| Other borrowed funds | | | 50,000 | | | | 50,000 | |
| Advances from borrowers for taxes and insurance | | | 1,896 | | | | 2,119 | |
| Accrued interest payable | | | 580 | | | | 696 | |
| Accrued expenses and other liabilities | | | 2,760 | | | | 1,927 | |
| Total Liabilities | | | 889,799 | | | | 1,050,184 | |
| STOCKHOLDERS' EQUITY | |
| Preferred stock ($.01 par value; 1,000,000 shares authorized, | | | | | | | | |
| none issued and outstanding at December 31, 2010 and | | | | | | | | |
| December 31, 2009) | | | - | | | | - | |
| Common stock ($.01 par value; 60,000,000 shares authorized, | | | | | | | | |
| 14,547,173 shares issued and outstanding at December 31, 2010 | | | | | | | | |
| and 35,000,000 shares authorized, 14,679,750 shares issued | | | | | | | | |
| and 13,609,187 shares outstanding at December 31, 2009) | | | 145 | | | | 147 | |
| Additional paid-in capital | | | 133,997 | | | | 64,016 | |
| Treasury stock, at cost (0 shares at December 31, 2010 and | | | | | | | | |
| 1,070,563 shares at December 31, 2009) | | | - | | | | (11,814 | ) |
| Common stock acquired by benefit plans | | | (9,283 | ) | | | (6,862 | ) |
| Retained earnings | | | 74,307 | | | | 71,604 | |
| Accumulated other comprehensive income, net | | | 6,538 | | | | 6,543 | |
| Total Stockholders' Equity | | | 205,704 | | | | 123,634 | |
| | | | | | | | | |
| Total Liabilities and Stockholders' Equity | | $ | 1,095,503 | | | $ | 1,173,818 | |
FOX CHASE BANCORP, INC. ANNUAL EARNINGS 2010
PAGE 8
SELECTED CONSOLIDATED FINANCIAL AND OTHER DATA OF THE COMPANY (UNAUDITED)
(Dollars in Thousands, Except Per Share Data)
| | | December 31, | | | September 30, | | | December 31, | |
| | | 2010 | | | 2010 | | | 2009 | |
| CAPITAL RATIOS: | | | | | | | | | |
| Total stockholders’ equity (to total assets) (1) | | | 18.78 | % | | | 18.13 | % | | | 10.53 | % |
| | | | | | | | | | | | | |
| Tier 1 capital (to adjusted assets) (2) | | | 13.60 | | | | 13.09 | | | | 8.51 | |
| Tier 1 risk –based capital (to risk-weighted assets) (2) | | | 22.53 | | | | 22.49 | | | | 15.41 | |
| Total risk-based capital (to risk-weighted assets) (2) | | | 23.76 | | | | 23.63 | | | | 16.57 | |
| | | | | | | | | | | | | |
| ASSET QUALITY INDICATORS: | | | | | | | | | | | | |
| Nonperforming loans (3) | | $ | 26,637 | | | $ | 27,672 | | | $ | 29,680 | |
| Other real estate owned | | | 3,186 | | | | 3,786 | | | | 4,052 | |
| Total nonperforming assets | | $ | 29,823 | | | $ | 31,458 | | | $ | 33,732 | |
| | | | | | | | | | | | | |
| Ratio of nonperforming loans to total loans | | | 4.07 | % | | | 4.15 | % | | | 4.62 | % |
| Ratio of nonperforming assets to total assets | | | 2.72 | | | | 2.78 | | | | 2.87 | |
| Ratio of allowance for loan losses to total loans | | | 1.90 | | | | 1.70 | | | | 1.65 | |
| Ratio of allowance for loan losses to | | | | | | | | | | | | |
| nonperforming loans | | | 46.7 | | | | 40.9 | | | | 35.7 | |
| | | | | | | | | | | | | |
| Past due loans | | | | | | | | | | | | |
| 30 - 59 days | | $ | 5,001 | | | $ | 5,638 | | | $ | 1,269 | |
| 60 - 89 days | | | 144 | | | | 82 | | | | 2,306 | |
| Total | | $ | 5,145 | | | $ | 5,720 | | | $ | 3,575 | |
(1) Represents stockholders’ equity ratio of Fox Chase Bancorp, Inc.
(2) Represents capital ratios of Fox Chase Bank
(3) Includes nonaccruing loans and accruing loans past due 90 days or more
FOX CHASE BANCORP, INC. ANNUAL EARNINGS 2010
PAGE 9
SELECTED CONSOLIDATED FINANCIAL AND OTHER DATA OF THE COMPANY (UNAUDITED)
(Dollars in Thousands, Except Per Share Data)
| | | At or for the Three Months Ended | |
| | | December 31, | | | September 30, | | | December 31, | |
| | | 2010 | | | 2010 | | | 2009 | |
PERFORMANCE RATIOS (4): | | | | | | | | | |
| Return on average assets | | | 0.32 | % | | | 0.23 | % | | | (0.82 | ) % |
| Return on average equity | | | 1.73 | | | | 1.34 | | | | (7.62 | ) |
| Net interest margin | | | 2.72 | | | | 2.35 | | | | 2.20 | |
| Efficiency ratio (5) | | | 67.0 | | | | 70.0 | | | | 67.7 | |
| OTHER: | | | | | | | | | | | | |
| Book value per share | | $ | 14.14 | | | $ | 14.10 | | | $ | 9.08 | |
| Employees (full-time equivalents) | | | 138 | | | | 139 | | | | 138 | |
| | | | | | | | | | | | | |
| | | For the Twelve Months Ended | | | | | |
| | | December 31, | | | | | |
| | | | 2010 | | | | 2009 | | | | | |
| PERFORMANCE RATIOS: | | | | | | | | | | | | |
| Return on average assets | | | 0.24 | % | | | (0.09 | ) % | | | | |
| Return on average equity | | | 1.65 | | | | (0.82 | ) | | | | |
| Net interest margin | | | 2.42 | | | | 2.16 | | | | | |
| Efficiency ratio (5) | | | 71.1 | | | | 79.9 | | | | | |
| | | | | | | | | | | | | |
| (5) | Represents noninterest expense, excluding provision for loss on other real estate owned, divided by the sum of net interest income and noninterest income, excluding gains or losses on the sale of securities, premises and equipment and other real estate owned. |
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