Mail Stop 4561
July 26, 2006
Mr. Thomas M. Petro
President and Chief Executive Officer
Fox Chase Bancorp, Inc.
4390 Davisville Road
Hatboro, Pennsylvania 19040
Re: Fox Chase Bancorp, Inc.
Amendment Number One to Registration Statement on Form S-1
File No. 333-134160
Filed July 5, 2006
Dear Mr. Petro:
We have reviewed your filings and have the following
comments.
Where indicated, we think you should revise your documents in
response
to these comments. If you disagree, we will consider your
explanation
as to why our comment is inapplicable or a revision is
unnecessary.
Please be as detailed as necessary in your explanation. In some
of
our comments, we may ask you to provide us with information so we
may
better understand your disclosure. After reviewing this
information,
we may raise additional comments.
The purpose of our review process is to assist you in your
compliance with the applicable disclosure requirements and to
enhance
the overall disclosure in your filing. We look forward to working
with you in these respects. We welcome any questions you may have
about our comments or any other aspect of our review. Feel free
to
call us at the telephone numbers listed at the end of this letter.
Cease and Desist Order, page 2
1. We note your response to comment 4 of our letter to you dated
June
19, 2006. Please revise this section as follows:
* as we requested, disclose, on page 2, that OTS had designated
you as
a "troubled institution" and summarize reasons for and the
significance of such designation as well as the period for which
such
designation applied;
* revise, in the second paragraph on page 2, the overview of the
nature and extent of the problems identified by OTS to more
accurately
and fully disclose the problems including the following:
* explain in plain English the nature of the violations including
whether they involved the classification of loans or the
originations
of the loans;
* discuss the magnitude and consequences of these failures in
quantitative terms including the losses that you suffered as a
result
of these problems;
* delete any explanations for the failures such as "lack of
expertise;"
* revise, on page 2, your list of violations to explain each
violation
in plain English;
* revise the list of practices, on page 3, to explain, in plain
English, each one; and
* provide more detail regarding each of the material actions
undertaken to address the violations noted by the OTS.
2. We note that the OTS placed a 10% limitation on beneficial
ownership. Revise this section and the section on page 101 to
discuss
the impact of this restriction. Also, revise this section to
discuss
the impact of compliance upon your asset size, income and income
ratios from before the OTS took action to the most recent stub
period.
Stockholder and Member Voting Rights After the Reorganization,
page 4
3. We note your response to comment 3 of our letter to you dated
June
19, 2006. Please revise this section to disclose, in the first
paragraph, on page 5, the percentage of outstanding shares
required
for approval of the specified actions.
How We Determined the Offering Range, page 5
4. We note your response to comment 7 of our letter to you dated
June
19, 2006. Please revise this section as follows:
* disclose the methodology utilized to estimate the proforma
market
value of the stock and identifying each of the bases for adjusting
the
market value and the extent of the adjustment as discussed on page
60
of the appraisal;
* revise your discussion, on page 6, of the "the following
factors,
among others` that FinPro considered to note those that it
"considered" but did not adjust its estimate (such as the cease
and
desist order);
* briefly discuss each of the six criteria utilized to "ensure
comparability" an discuss the extent to which you are not
comparable
(as discussed on pages 35-36 of the appraisal);
* explain, on page 6. how Fin Pro and the Board determined that
companies with assets as high as $2.0 billion were "similarly
situated" to you given your assets of $754,000; and
* as we requested, revise the second bullet point on page 6 to
disclose whether investors can view the projections provided to
Finpro.
5. We note your response to comment 8 of our letter to you dated
June
19, 2006. Please revise the discussion as follows:
* revise your discussion, on the top of page 6, regarding your
basing
the appraisal on a fully converted basis to discuss the extent to
which the market prices stock differently based upon the
percentage of
public ownership and how your stock would be priced given the
minority
stake being offered to the public;
* as we requested, provide detail, in the first paragraph on page
7,
as to the composition of the peer group including the
characteristics
on which they were deemed "comparable" including disclosing the
range
of profitability and capital levels and describing the balance
sheet
mix and operating strategy;
* disclose for the peer group the range of the percentage of stock
owned by the public;
* disclose the date as of which you determined tangible book value
instead of "as of the most recent publicly available information;"
* disclose the dates of the twelve month period as of which you
determined core earnings for the peer group;
* using footnotes to the table, disclose the date as of which you
determined the price of the peer groups stock;
* provide citations for the OTS rules to which you refer in your
response letter.
Mutual Holding Company Data, page 8
6. Please revise your disclosure that companies issued a different
percentage of their stock to disclose data for these companies.
Reasons for the Reorganization, page 8
7. We note your response to comment 11 of our letter to you dated
June
19, 2006. As we requested, please explain more clearly your
reasons
for choosing to offer less than 100 percent and less than 49
percent
of your stock to the public and to set the price at $10 per share.
Management`s Discussion and Analysis, page 55
Overview, page 55
8. Please provide analysis, consistent with Release No. 33-8350,
of
the opportunities, challenges, risks and uncertainties on which
the
company`s executives are most focused for both the short and long
term, as well as the actions they are taking to address these
opportunities, challenges risks and uncertainties including but
not
limited to the following:
* your high level of loans that are non performing , doubtful,
substandard special mention or loss;
* the adequacy of your allowance for loan losses;
* trends including the decline in deposits cash and total assets,
and
erratic net interest income;
* your plans to increase your multi family loans, commercial real
estate loans, and commercial loans; and
* increases in interest rates.
In addition, please provide analysis of economic or industry-wide
factors relevant to the company on which management is concerned.
Please move to another subsection your description, on pages 55-
56. of
various components that affect your results of operations and add
analysis of each of these components.
Operating Strategy, page 58
9. Please provide more detailed analysis of the following:
* your operating strategy from 2003 to 2005, including a detailed
description of the business practices and analysis of their impact
on
your results of operations;
* your strategy during the pendancy of the Cease and Desist Order
including a detailed description of the Order, such as the types
of
loans that you were prohibited from originating, and analysis of
their
impact of the Order on your results of operations; and
* your current strategy including a detailed description including
a
detailed description of the business practices and analysis of
their
impact on your results of operations.
10. Please reconcile the statement that you added, in the last
paragraph on page 58, that your loan portfolio and asset size
decreased because the Cease and Desist Order prohibited you from
originating various types of loans with your statement in the
second
full paragraph on page 61 that your loan portfolio decreased
because
you sold $130 million loans in the secondary market.
How We Determined the Offering Range and the $10 Purchase Price,
page
127
11. We note your response to comment 27 of our letter to you dated
June 19, 2006. Given its relative importance, please consider
moving
this section closer to the front of the document. Please revise
this
section to more accurately and completely describe the basis for
the
board`s determination including the appraisal and the process of
determining the range and the purchase price including, but not
limited to, the following:
* discuss the selection criteria on pages 33-34of the appraisal
report;
* include the analysis of the overview of comparables on pages 35-
36
of the appraisal;
* discuss, in detail, the market value adjustments (on pages 38-60
of
the appraisal); and
* revise your discussion of factors, including the effect of the
compensation plans, on page 127, to explain how these factors were
considered and whether or not the price was adjusted for each
factor.
* * * * * * * * * * * * *
As appropriate, please amend your registration statement in
response to these comments. You may wish to provide us with
marked
copies of the amendment to expedite our review. Please furnish a
cover letter with your amendment that keys your responses to our
comments and provides any requested information. Detailed cover
letters greatly facilitate our review. Please understand that we
may
have additional comments after reviewing your amendment and
responses
to our comments.
We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filing reviewed by the staff to
be
certain that they have provided all information investors require
for
an informed decision. Since the company and its management are in
possession of all facts relating to a company`s disclosure, they
are
responsible for the accuracy and adequacy of the disclosures they
have
made.
In connection with responding to our comments, please
provide, in
writing, a statement from the company and each filing person
acknowledging that:
* the company or filing person is responsible for the adequacy and
accuracy of the disclosure in the filing;
* staff comments or changes to disclosure in response to staff
comments do not foreclose the Commission from taking any action
with
respect to the filing; and
* the company or filing person may not assert staff comments as a
defense in any proceeding initiated by the Commission or any
person
under the federal securities laws of the United States.
In addition, please be advised that the Division of
Enforcement
has access to all information you provide to the staff of the
Division
of Corporation Finance in our review of your filing or in response
to
our comments on your filing.
You may contact Rebekah Moore at (202) 551-3463 or Paul
Ellis
Cline at 202-551-3851 if you have questions regarding comments on
the
financial statements and related matters. Please contact either
Jonathan E. Gottlieb at (202) 551-3416 or me at (202) 551-3419
with
any other questions.
Sincerely,
Christian N. Windsor
Special Counsel
cc. Gary R. Bronstein, Esquire
Muldoon Murphy & Aguggia LLP
5101 Wisconsin Avenue, N.W.
Washington, D.C. 20016
Mr. Thomas M. Petro
Fox Chase Bancorp, Inc.
July 26, 2006
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