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EXHIBIT 99.1
FOX CHASE BANCORP, INC. ANNUAL EARNINGS 2007
PAGE 1
[FOX CHASE BANCORP, INC. LETTERHEAD]
NEWS RELEASE
------------
FOR IMMEDIATE RELEASE
DATE: February 7, 2008
CONTACT: Jerry Holbrook
Chief Financial Officer
PHONE: (215) 682-4107
FAX: (215) 682-4144
FOX CHASE BANCORP, INC. ANNOUNCES EARNINGS
FOR THE FOURTH QUARTER AND YEAR,
(ANNOUNCES 5% STOCK REPURCHASE PROGRAM
AND ANNUAL MEETING DATE)
HATBORO, PA, FEBRUARY 7, 2008 - Fox Chase Bancorp, Inc. (the "Company") (NASDAQ
GM: FXCB), the holding company for Fox Chase Bank (the "Bank"), today announced
net income of $1.9 million for the year ended December 31, 2007, compared to net
income of $3.6 million for the year ended December 31, 2006. The 2007 results
included a gain on the sale of the Bank's operations center of $577,000, net of
taxes. The 2006 earnings included a credit to the provision for loan losses of
$5.4 million and a $1.5 million contribution to the Fox Chase Bank Charitable
Foundation. These two items, net of taxes, increased earnings by approximately
$2.6 million during 2006.
The Company reported earnings of $330,000 for the three months ended December
31, 2007 compared to $2.0 million for the three months ended December 31, 2006.
Fourth quarter 2006 earnings included a credit to the provision for loan losses
of $2.2 million, which increased earnings, net of tax, by $1.5 million.
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FOX CHASE BANCORP, INC. ANNUAL EARNINGS 2007
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HIGHLIGHTS FOR THE YEAR INCLUDED:
o Loan growth of $91.4 million, or 26%;
o Net interest margin increased to 2.60% for 2007 from 2.33% for 2006;
o Continued improvement in asset quality with reductions in nonperforming
assets from $3.2 million at December 31, 2006 to $819,000 at December
31, 2007;
o There were no charge offs in 2007;
o The Company completed the repurchase of 327,000 shares (5% of its
minority common stock outstanding) during December 2007;
o The Bank remained "well capitalized" by all regulatory measures at
December 31, 2007. The Company had $122.4 million in capital and a
tangible equity ratio of 15.05% at December 31, 2007.
FOURTH QUARTER 2007 EARNINGS INCLUDED:
o Settlement of litigation between the Bank and its former Chief
Executive Officer for $150,000 (net of taxes $99,000);
o Costs of $88,000, net of taxes, related to certain charges associated
with the Bank's pension plan, which will be terminated and settled in
2008;
o Gain on sale of land previously held for branch expansion in New Jersey
of $64,000, net of taxes;
o Gain on sale of investment securities of $99,000, net of taxes,
associated with a balance sheet restructuring program.
BALANCE SHEET
- -------------
Total assets increased $55.9 million, or 7.4%, to $812.9 million at December 31,
2007, compared to $757.0 million at December 31, 2006. The increase in assets
was primarily due to a $91.4 million, or 25.7%, increase in loans, driven by a
$91.3 million increase in commercial, commercial real estate and construction
loans, and a $46.8 million, or 29.6%, increase in mortgage related securities.
The increase in securities was due to the Bank implementing a $50.0 million
leverage strategy during the fourth quarter of 2007 to deploy capital and take
advantage of the steepening yield curve. The Bank also increased investment
securities by $41.0 million, or 58.5%, as it utilized excess liquidity to invest
$60.0 million in short-term auction rate
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FOX CHASE BANCORP, INC. ANNUAL EARNINGS 2007
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bonds. Such bonds reset monthly and had a weighted average rate of 6.28% at
December 31, 2007. These increases in assets were offset by a decrease of $123.2
million in the levels of interest-earnings deposits held in other banks.
Deposits decreased $11.0 million, or 1.8%, to $585.6 million at December 31,
2007. The Bank is located in a highly competitive deposit market, which has
created a difficult climate for gathering deposits in a cost-effective manner.
As a result of the Company's liquidity and investment portfolio, the Bank is not
wholly reliant on deposit growth to fund asset growth. Borrowings increased
$70.0 million during the year primarily to fund the previously mentioned $50.0
million leverage strategy and loan growth.
Stockholders' equity decreased $3.3 million to $122.4 million at December 31,
2007 compared to $125.6 million at December 31, 2006. The primary reason for the
decrease was the purchase of $3.7 million of common stock to fund the Company's
equity incentive plan during the third and fourth quarters of 2007 and the
completion of the previously discussed 5% repurchase of common stock in the
amount of $3.9 million in the open market during the fourth quarter 2007. Such
decreases were offset by net income of $1.9 million, adjustments for the costs
associated with equity plans ($928,000) and the increase in fair value of
investments held for sale of $1.5 million.
ASSET QUALITY
- -------------
Nonperforming assets totaled $819,000, or 0.10% of total assets, at December 31,
2007 compared to $3.2 million, or 0.43% of total assets, at December 31, 2006.
During the three months ended December 31, 2006, a commercial loan totaling $2.9
million went past its contractual maturity and was classified as a nonperforming
asset. This loan was paid off during the fourth quarter of 2007.
The Bank believes it has processes in place to address credit quality issues
before such loans become a problem. The Bank's primary market area in the
Mid-Atlantic region of the U.S. has a relatively stable and well-diversified
economy and the Bank has not experienced any significant charge-offs in the last
six years. Additionally, the Bank has never targeted subprime customers as part
of its lending strategy and is continuing to monitor consumer delinquencies
closely during this credit cycle.
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FOX CHASE BANCORP, INC. ANNUAL EARNINGS 2007
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NET INTEREST MARGIN
- -------------------
Net interest income increased $174,000, or 3.6%, and $2.1 million, or 12.5%, for
the three and twelve months ended December 31, 2007, respectively, compared to
the same periods in 2006. The net interest margin was 2.60% for the twelve
months ended December 31, 2007 compared to 2.33% for the comparable period in
2006. The net interest margin was 2.74% for the three months ended December 31,
2006 compared to 2.69% for the same period in 2006. The three months ended
December 31, 2006 included a significant level of past due interest income from
a nonperforming loan that was paid in full in October 2006. The improvements in
net interest income and the net interest margin reflect the Bank's increase in
higher-yielding commercial, commercial real estate and construction loans funded
with the proceeds from liquidating lower-yielding securities, an increase in the
volume of interest-earning assets generated by the proceeds received in the
Company's initial public offering and an increase in noninterest-bearing
deposits. Offsetting these improvements were higher costs associated with retail
certificates of deposit and money market accounts during the three and twelve
months ended December 31, 2007 when compared to the same period in 2006 due
primarily to strong retail deposit pricing competition.
PROVISION FOR LOAN LOSSES
- -------------------------
The Company recorded provisions for loan losses of $225,000 and $425,000
for the three and twelve months ended December 31, 2007, respectively. The
provisions for loan losses reflect continued growth in the loan portfolio, a
shift in the mix of the loan portfolio to more commercial-type loans, which
typically have higher levels of risk, and the increase of $298,000 in
nonperforming assets since September 30, 2007. The Company recorded a credit to
the provision for loan losses of $2.2 million and $5.4 million for the three and
twelve months ended December 31, 2006, respectively, which was a result of: (1)
a reduction in criticized and classified assets, (2) a decrease in the size of
the loan portfolio, and (3) the absence of charge-offs in the portfolio during
those periods. The allowance for loan losses at December 31, 2007 was 0.75% of
total loans outstanding compared to 0.74% at September 30, 2007 and 0.82% at
December 31, 2006.
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FOX CHASE BANCORP, INC. ANNUAL EARNINGS 2007
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NONINTEREST INCOME
- ------------------
Noninterest income decreased $1,000 and increased $623,000 for the three and
twelve months ended December 31, 2007, respectively, compared to the same
periods in 2006. The increase for the twelve months ended December 2007 was
primarily due to an $875,000 gain on sale of the Bank's operations center in the
second quarter of 2007 plus the previously mentioned $97,000 gain on sale of
land during the fourth quarter of 2007. The Company also recorded gains on the
sale of investment securities of $169,000 in the twelve months ended December
31, 2007 compared to a loss on the sale of investment securities of $17,000 for
the comparative period in 2006. Gains on sales of loans decreased by $90,000 and
$121,000 in the three and twelve months ended 2007, respectively, when compared
with the levels for the comparable 2006 periods as the Company discontinued
selling residential mortgages during the second quarter of 2007. These gains
were offset by a reduction in service charges and other fee income of $296,000
between comparable twelve-month periods as 2006 included a significant level of
past due loan fees from nonperforming loans that paid off during that year.
NONINTEREST EXPENSE
- -------------------
Noninterest expense decreased by $226,000, or 4.3%, and $1.2 million, or 5.9%,
during the three and twelve months ended December 31, 2007, respectively,
compared to the same periods in 2006. Salaries and benefits costs rose $136,000
between three-month periods and $755,000 between years. The 2007 salaries and
benefits costs were impacted by (1) a full year of expense associated with the
hiring of a team of experienced commercial lenders and commercial credit staff
in the spring of 2006, (2) four months of expenses, or $318,000, associated with
the awards granted under the Company's 2007 Equity Incentive Plan (3) the
previously mentioned pension adjustment in the pre-tax amount of $134,000 and
(4) expenses associated with the Bank opening its eleventh full service branch
in West Chester, Pennsylvania in September 2007.
The salaries and benefits costs for the three months ended December 31, 2006
reflected a charge of $512,000 in conjunction with the release of shares for
allocation to employees at December 31, 2006 under the Bank's employee stock
ownership plan. Occupancy expense increased $93,000 and $332,000 during the
three and twelve months ended December 31, 2007, respectively, primarily a
result of the Company moving its operations center to a new location in the
second quarter of 2007 and the opening of the West Chester branch. Professional
fees
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FOX CHASE BANCORP, INC. ANNUAL EARNINGS 2007
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decreased by $287,000 and increased by $65,000 during the three and twelve
month periods. Professional fees in 2007 included the hiring of consulting firms
primarily during the second and third quarters to assist with the implementation
of internal policies and procedures related to the Sarbanes-Oxley Act as well as
fees related to various strategic considerations. The remainder of the decrease
in noninterest expense for the year was attributable to the $1.5 million
contribution to the Fox Chase Bank Charitable Foundation in the third quarter of
2006 and a decrease of $712,000 in FDIC insurance premiums due to the lifting of
the Bank's Cease and Desist order by the Office of Thrift Supervision on June
28, 2006.
INCOME TAXES
- ------------
The Company's effective income tax rate was 9.8% and 16.9% for the three months
ended December 31, 2007 and 2006, respectively, reflecting the Company's levels
of tax-exempt income relative to overall levels of taxable income. The Company's
effective income tax rate was 19.2% and 15.8% for the twelve month periods ended
December 31, 2007 and 2006, respectively. The twelve-month period ended December
31, 2006 included the Company reversing a valuation allowance of $312,000 it had
established in prior periods for possible non-realizable deferred tax asset
benefits associated with certain capital loss carryforwards.
STOCK REPURCHASE PLAN AND ANNUAL MEETING
- ----------------------------------------
The Company also announced today that its Board of Directors has approved the
repurchase of up to 5% of its minority common shares outstanding (excluding
shares held by Fox Chase MHC), or approximately 327,000 shares. The repurchase
plan authorizes shares to be repurchased on the open market or in privately
negotiated transactions. Timing of purchases and the exact number of shares to
be purchased will depend on market conditions and other factors. Repurchased
shares will be held in treasury.
The Company also announced that its annual meeting of stockholders will be held
at the Doubletree Guest Suites, 640 West Germantown Pike, Plymouth Meeting,
Pennsylvania on Thursday, May 22, 2008 at 9:00 a.m.
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FOX CHASE BANCORP, INC. ANNUAL EARNINGS 2007
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Mr. Thomas Petro, President and CEO of the Company said, "During 2007, Fox Chase
Bank celebrated its 140th anniversary as a leading provider of banking services
to individuals and small businesses in the greater Philadelphia area. During
2008, we will continue to execute our strategy of becoming the local community
bank serving small and medium size businesses in the Philadelphia, Southern New
Jersey and Delaware markets while maintaining our disciplined credit approach to
commercial, residential and consumer lending. Additionally, we will continue to
deploy our excess capital and liquidity to optimize results for our
stockholders."
Fox Chase Bancorp, Inc. is the mid-tier 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 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 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.
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FOX CHASE BANCORP, INC. ANNUAL EARNINGS 2007
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CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
Three Months Ended Year Ended
December 31, December 31,
2007 2006 2007 2006
-------------- -------------- ------------ ---------------
INTEREST INCOME
Interest and fees on loans $ 7,023 $ 5,826 $ 25,361 $ 21,742
Interest on mortgage related securities 2,142 1,954 7,329 8,035
Interest on investments securities AFS:
Taxable 1,174 610 2,987 3,523
Nontaxable 215 245 924 934
Dividend income 100 58 289 370
Other income 197 1,488 4,167 2,573
-------------- -------------- ------------ ---------------
Total Interest Income 10,851 10,181 41,057 37,177
-------------- -------------- ------------ ---------------
INTEREST EXPENSE
Deposits 5,204 4,946 20,526 18,974
Other borrowed money 82 - 82 -
Federal Home Loan Bank advances 531 375 1,642 1,485
-------------- -------------- ------------ ---------------
Total Interest Expense 5,817 5,321 22,250 20,459
-------------- -------------- ------------ ---------------
Net Interest Income 5,034 4,860 18,807 16,718
-------------- -------------- ------------ ---------------
Provision (Credit) for Loan Losses 225 (2,233) 425 (5,394)
-------------- -------------- ------------ ---------------
Net Interest Income after Provision
(Credit) for Loan Losses 4,809 7,093 18,382 22,112
-------------- -------------- ------------ ---------------
NONINTEREST INCOME
Service charges and other fee income 219 408 842 1,138
Gain (loss) on sale of:
Securities 150 - 169 (17)
Loans 5 95 78 199
Assets acquired through foreclosure - - - 85
Premises and equipment 96 (53) 970 (59)
Income on bank-owned life insurance 111 109 438 427
Other 39 62 199 300
-------------- -------------- ------------ ---------------
Total Noninterest Income 620 621 2,696 2,073
-------------- -------------- ------------ ---------------
NONINTEREST EXPENSE
Salaries, benefits and other compensation 2,795 2,659 9,949 9,194
Occupancy 474 381 1,828 1,496
Furniture and equipment 228 415 940 1,060
Data processing costs 388 423 1,537 1,514
Professional fees 401 688 1,846 1,781
Marketing 196 181 645 621
FDIC premiums 22 71 84 796
Contribution to charitable foundation - - - 1,500
Other 559 471 1,859 1,905
-------------- -------------- ------------ ---------------
Total Noninterest Expense 5,063 5,289 18,688 19,867
-------------- -------------- ------------ ---------------
Income before Income Taxes 366 2,425 2,390 4,318
Income tax provision 36 410 460 684
-------------- -------------- ------------ ---------------
Net Income $ 330 $ 2,015 $ 1,930 $ 3,634
============== ============== ============ ===============
Earnings per share (1) :
Basic $ 0.02 0.14 $ 0.14 $ 0.14
Diluted 0.02 0.14 0.14 0.14
(1) Due to the timing of the Bank's reorganization into the mutual holding
company form and the completion of the Company's initial public offering on
September 29, 2006, earnings per share information for the year ended December
31, 2006 is only for the period September 29, 2006 through December 31, 2006.
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FOX CHASE BANCORP, INC. ANNUAL EARNINGS 2007
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CONSOLIDATED STATEMENTS OF CONDITION (UNAUDITED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
December 31,
2007 2006
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ASSETS
Cash and due from banks $ 3,307 $ 3,295
Interest-earning deposits in other banks 7,968 131,146
Investment securities available-for-sale 111,159 70,112
Mortgage related securities available-for-sale 205,145 158,320
Loans held for sale - 1,194
Loans, net of allowance for loan loss of $3,376
and $2,949 at December 31, 2007 and 2006 447,035 355,617
Federal Home Loan Bank stock, at cost 5,875 4,422
Bank-owned life insurance 11,762 11,324
Premises and equipment 14,466 14,287
Accrued interest and dividends receivable 3,360 3,397
Mortgage servicing rights 1,066 1,177
Deferred tax asset, net 410 1,087
Other assets 1,366 1,607
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Total Assets $ 812,919 $ 756,985
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LIABILITIES
Deposits $ 585,560 $ 596,534
Federal Home Loan Bank advances 80,000 30,000
Other borrowed funds 20,000 -
Advances from borrowers for taxes and insurance 2,374 2,262
Accrued interest payable 504 298
Accrued expenses and other liabilities 2,110 2,246
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Total Liabilities 690,548 631,340
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STOCKHOLDERS' EQUITY
Preferred stock ($.01 par value; 1,000,000 shares authorized,
none issued) - -
Common stock ($.01 par value; 35,000,000 shares authorized,
14,679,750 shares issued and 14,352,750 shares outstanding at
December 31, 2007 and 14,679,750 shares issued and outstanding at
December 31, 2006) 147 147
Additional paid-in capital 62,909 62,365
Treasury stock (at cost, 327,000 shares at December 31, 2007 and none at
December 31, 2006) (3,924) -
Common stock acquired by stock benefit plans (8,732) (5,371)
Retained earnings 71,475 69,545
Accumulated other comprehensive gain (loss) 496 (1,041)
------------------ -----------------
Total Stockholders' Equity 122,371 125,645
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Total Liabilities and Stockholders' Equity $ 812,919 $ 756,985
================== =================
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FOX CHASE BANCORP, INC. ANNUAL EARNINGS 2007
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SELECTED CONSOLIDATED FINANCIAL AND OTHER DATA OF THE COMPANY (UNAUDITED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
December 31, September 30, December 31,
2007 2007 2006
------------ ------------ ------------
CAPITAL RATIOS (1):
Tier 1 capital (to adjusted assets) 12.03% 12.98% 12.49%
Tier 1 risk -based capital (to risk-weighted assets) 21.78 23.30 26.79
Total risked-based capital (to risk-weighted assets) 22.54 24.06 27.62
ASSET QUALITY INDICATORS:
Nonperforming loans(2) $ 819 $ 521 $ 3,225
Real estate owned - - -
------------ ------------ ------------
Total nonperforming assets $ 819 $ 521 $ 3,225
============ ============ ============
Ratio of nonperforming loans to total loans 0.18% 0.12% 0.90%
============ ============ ============
Ratio of nonperforming loans to total assets 0.10 0.07 0.43
============ ============ ============
Ratio of allowance for loan losses to total loans 0.75 0.74 0.82
============ ============ ============
At or for the three months ended
December 31, September 30, December 31,
2007 2007 2006
---------------- --------------- ----------------
PERFORMANCE RATIOS (3):
Return on average assets 0.17% 0.24% 1.07%
Return on average equity 1.06 1.44 6.48
Net interest margin 2.74 2.72 2.69
OTHER:
Book value per share $ 8.53 $ 8.66 $ 8.56
Employees (full-time equivalents) 141 139 141
For the twelve months ended
December 31, December 31,
2007 2006
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PERFORMANCE RATIOS:
Return on average assets 0.26% 0.49%
Return on average equity 1.54 4.59
Net interest margin 2.60 2.33
(1) Represents capital ratios at Fox Chase Bank
(2) Includes nonaccruing loans and accruing loans past due 90 days or more
(3) Annualized
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