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EXHIBIT 99.1
[FOX CHASE BANCORP, INC. LETTERHEAD]
NEWS RELEASE
------------
FOR IMMEDIATE RELEASE
DATE: February 5, 2009
CONTACT: Roger Deacon
Chief Financial Officer
PHONE: (215) 682-4116
FOX CHASE BANCORP, INC. ANNOUNCES EARNINGS
FOR THE YEAR AND FOURTH QUARTER
(ANNOUNCES MAY 21, 2009 ANNUAL MEETING)
HATBORO, PA, FEBRUARY 5, 2009 - Fox Chase Bancorp, Inc. (the "Company") (NASDAQ
GM: FXCB), the holding company for Fox Chase Bank (the "Bank"), today announced
net income of $1.2 million for the year ended December 31, 2008, compared to net
income of $1.9 million for the year ended December 31, 2007. Net income for the
year ended December 31, 2008 included a provision for loan losses of $2.9
million compared to a provision for loan losses of $425,000 for the year ended
December 31, 2007. Net income for the year ended December 31, 2007 included a
gain of $577,000, net of taxes, related to the sale of the Bank's former
operations center.
The Company reported a net loss of $93,000 for the three months ended December
31, 2008 compared to net income of $330,000 for the three months ended December
31, 2007. Net loss for the three months ended December 31, 2008 included a
provision for loan losses of $2.0 million compared to a provision for loan
losses of $225,000 for the same period in 2007.
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FOX CHASE BANCORP, INC. ANNUAL EARNINGS 2008
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Highlights for the year include:
o Loan growth of $141.9 million, or 32%;
o Interest income on loans increased $5.6 million, or 22%;
o Net interest income $3.0 million, or 16%;
o Noninterest expense increased $260,000, or 1.4%;
o Efficiency ratio improved to 82.0% from 91.8%;
o Allowance for loan losses increased to 1.05% of total loans,
representing 107% of nonperforming loans; .
o There were no commercial loan charge offs in 2008;
o The Bank remains "well capitalized" by all regulatory measures at
December 31, 2008. The Company had $121.2 million in capital and a
stockholders' equity to total assets ratio of 13.0% at December 31,
2008; and
o The Company did not participate in the U.S. Government sponsored
Troubled Assets Relief Program ("TARP").
Commenting on the fourth quarter 2008 and full year operating performance,
Thomas M. Petro, President and Chief Executive Officer of Fox Chase Bancorp
said, "Our quarterly results reflect a deterioration in local economic
conditions, which is putting a strain on our loan portfolio and led us to
significantly increase our loan loss reserves in the fourth quarter of 2008.
Despite the economic headwinds, the Company increased net interest income by
16.0% during 2008 and limited its operating expenses to a 1.4% year over year
increase. Our strong capital ratios position us well for handling the uncertain
economic conditions in 2009. As previously announced, Fox Chase Bancorp did not
participate in the U.S. Government sponsored TARP due to its strong capital
levels."
Total assets increased $118.4 million, or 14.6%, to $931.3 million at
December 31, 2008, compared to $812.9 million at December 31, 2007. The increase
in assets was primarily due to a $141.9 million, or 31.8%, increase in loans,
driven by a $101.8 million increase in commercial, commercial real estate and
construction loans as we continue our strategic initiative to increase our
commercial loan portfolio. The growth in loans was primarily funded through the
liquidation of $60.0 million in short-term auction rate bonds, the liquidation
of $20.0 million of money market funds and additional other borrowed funds of
$30.0 million. The $64.5 million, or 31.5%, increase in mortgage related
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FOX CHASE BANCORP, INC. ANNUAL EARNINGS 2008
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securities was funded by $60 million of Federal Home Loan Bank advances.
Deposits increased $22.9 million, or 3.9%, to $608.5 million at December 31,
2008. The increase was primarily a result of a $50.7 million increase in money
market accounts, as a result of targeted promotional activities, offset by a
reduction of $24.3 million in certificates of deposit balances. Stockholders'
equity decreased $1.2 million to $121.2 million at December 31, 2008 compared to
$122.4 million at December 31, 2007. The primary reasons for the decrease were
the repurchase of $3.4 million of common stock as well as a decrease in
accumulated other comprehensive income of $491,000. Such decreases were offset
by net income of $1.2 million, and adjustments for costs associated with equity
benefit plans of $1.5 million.
Net interest income increased $3.0 million, or 16.0%, and $894,000, or 17.8%,
during the twelve and three months ended December 31, 2008, respectively,
compared to the same periods in 2007. Net interest margin was 2.59% for the
twelve months ended December 31, 2008 compared to 2.60% for the comparable
period in 2007. Net interest margin was 2.70% for the three months ended
December 31, 2008 compared to 2.74% for the same period in 2007. The increase in
net interest income was primarily attributable to an increase of $116.3 million,
or 16.2%, of average interest earning assets in 2008 as compared to 2007, as
average loans increased $114.7 million, or 28.4%, in 2008 as compared to 2007.
The Company recorded provisions for loan losses of $2.9 million and $2.0 million
for the twelve and three months ended December 31, 2008, respectively as
compared to $425,000 and $225,000 for the twelve and three months ended December
31, 2007, respectively. As previously announced on January 20, 2009, the
increase in the provision for the fourth quarter of 2008 was a result of: (1)
downgrades to existing credits, primarily in the residential real estate
development portfolio; (2) increases to loss factors for classified loans and
the construction loan portfolio, which were a result of the significant
deterioration in the economic environment during the fourth quarter; and (3) the
establishment of a specific reserve of $624,000 related to a $3.5 million
construction loan collateralized by a residential housing development located in
southern New Jersey. Specific reserves were $769,000 at December 31, 2008. The
Company did not recognize any commercial or commercial real estate loan
charge-offs during the year ended December 31, 2008. The allowance for loan
losses at December 31, 2008 was $6.3 million or 1.05% of total loans
outstanding, compared to $4.3 million or 0.74% of total loans at September 30,
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FOX CHASE BANCORP, INC. ANNUAL EARNINGS 2008
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2008, and $3.4 million, or 0.75% of total loans at December 31, 2007.
Nonperforming assets totaled $5.9 million, or 0.63% of total assets, at December
31, 2008 compared to $1.9 million, or 0.21% of total assets at September 30,
2008, and $819,000, or 0.10% of total assets at December 31, 2007. During the
fourth quarter, the Bank placed the previously discussed $3.5 million
construction loan on nonaccrual status. Other nonperforming assets include
$700,000 of loans secured by commercial real estate, $1.5 million of loans
secured by residential mortgages and $200,000 of home equity loans secured by a
second or third position on a residential property. The increase in
nonperforming assets was directly related to the continued deterioration in the
residential housing market and declining economic conditions.
Noninterest income decreased $1.3 million and $370,000 for the twelve and three
months ended December 31, 2008, respectively, compared to the same periods in
2007. The decrease for the twelve months ended December 2008 was primarily due
to $970,000 of gains on the sales of properties in 2007, which included a gain
on the sale of the Bank's operations center of $875,000 and a gain on sale of
land of $97,000 during the fourth quarter of 2007. Gains on sales of loans
decreased by $68,000 in the twelve months ended December 31, 2008 when compared
with the 2007 levels as the Company discontinued selling residential mortgages
during the second quarter of 2007. Gains on sales of investments decreased
$51,000 and $150,000, respectively for the twelve and three months ended
December 2008 as the Bank sold fewer securities in 2008. Other noninterest
income decreased by $122,000 for the twelve months ended December 31, 2008,
primarily as a result of the Bank receiving a reduced rate on the funds held at
a third party check processor as well as the Bank discontinuing that
relationship in the third quarter of 2008. Finally, for 2008, the Bank recorded
a valuation allowance of $133,000 on its mortgage servicing rights, of which
$102,000 was in the three months ended December 31, 2008. This was due to a
significant decrease in interest rates in the fourth quarter for residential
mortgages and assumed higher mortgage prepayments.
Noninterest expense increased $260,000, or 1.4%, and decreased $582,000, or
11.5%, during the twelve and three months ended December 31, 2008, respectively,
compared to the same periods in 2007. The increase in noninterest expense for
the twelve month period was primarily a result of increased salaries and
benefits costs of $1.4 million associated with awards granted under the
Company's 2007 Equity Incentive Plan, final distributions from the Company's
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FOX CHASE BANCORP, INC. ANNUAL EARNINGS 2008
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terminated pension plan, costs associated with the opening of the Bank's West
Chester, Pennsylvania branch in October 2007 and the establishment of a regional
lending group in Ocean City, New Jersey in March 2008, as well as annual merit
increases. These increases were offset by (1) a decrease in professional fees of
$722,000 due to lower levels of Sarbanes-Oxley compliance ("SOX") and audit
related costs as 2007 was the initial year of SOX, and lower levels of legal
costs primarily due to legal fees paid in the first quarter of 2007 in relation
to the litigation with the Bank's former CEO, which was settled in the fourth
quarter of 2007, (2) a decrease in marketing expense of $182,000 due to reduced
promotional offers and advertising and (3) a decrease in other noninterest
expense of $375,000 primarily due to the Company paying a settlement of $150,000
to its former CEO in the fourth quarter of 2007 and reductions in public company
costs, insurance, and postage and freight as the Company continued its
disciplined focus on reducing other expenses.
The decrease of $582,000 in noninterest expense for the three months ended
December 31, 2008 as compared to the three months ended December 31, 2007 was
primarily a result of a reduction in salaries and benefits costs of $272,000 due
to reduced incentive plan accruals. Additionally, professional fees decreased
$140,000, marketing expense decreased $70,000 and other noninterest expense
decreased $186,000 for the reasons previously described. These decreases were
offset by an increase in FDIC insurance premiums of $73,000 as the Bank fully
utilized its FDIC credit during the fourth quarter of 2008. The Bank anticipates
such costs will increase in the first quarter of 2009 as FDIC assessment rates
increase.
The Company's effective income tax rate was 12.0% and 19.2% for the twelve-month
periods ended December 31, 2008 and 2007 and (69.3)% and 9.8% for the three
months ended December 31, 2008 and 2007, respectively. The annual rates reflect
the Company's levels of tax-exempt income for both periods relative to the
overall level of taxable income.
During the three and twelve months ended December 31, 2008, the Company
repurchased 63,300 and 286,191 shares of common stock, respectively, in
conjunction with its stock repurchase program announced in February 2008 (the
"February 2008 program"). There are 40,809 shares remaining to be repurchased
under the February 2008 program and 327,000 shares remaining to be purchased
under the repurchase program announced in July 2008 (the "July 2008" program).
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Timing and volume of purchases 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 would be held
at its Corporate Offices located at 510 East Township Line Road, Suite 200, Blue
Bell, Pennsylvania on Thursday, May 21, 2009 at 9:00 a.m. Directions to the
meeting will be sent with the proxy statement in April 2009.
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 2008
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CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
THREE MONTHS ENDED YEARS ENDED
DECEMBER 31, DECEMBER 31,
2008 2007 2008 2007
--------- --------- --------- ----------
INTEREST INCOME
Interest and fees on loans $ 8,593 $ 7,023 $ 31,008 $ 25,361
Interest on money market funds 15 40 536 40
Interest on mortgage related securities available-for-sale 3,108 2,142 12,356 7,329
Interest on investment securities available-for-sale
Taxable 118 1,174 994 2,987
Nontaxable 144 215 613 924
Dividend income 53 60 246 249
Other interest income 7 197 131 4,167
-------- -------- -------- --------
TOTAL INTEREST INCOME 12,038 10,851 45,884 41,057
-------- -------- -------- --------
INTEREST EXPENSE
Deposits 4,459 5,204 18,463 20,526
Federal Home Loan Bank advances 1,255 531 4,635 1,642
Other borrowed funds 396 82 963 82
-------- -------- -------- --------
TOTAL INTEREST EXPENSE 6,110 5,817 24,061 22,250
-------- -------- -------- --------
NET INTEREST INCOME 5,928 5,034 21,823 18,807
Provision for loan losses 2,000 225 2,900 425
-------- -------- -------- --------
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 3,928 4,809 18,923 18,382
-------- -------- -------- --------
NONINTEREST INCOME
Service charges and other fee income 115 219 748 842
Net gain on sale of:
Securities available-for-sale - 150 118 169
Loans - 5 10 78
Premises and equipment - 96 - 970
Income on bank-owned life insurance 114 111 452 438
Other 21 39 77 199
-------- -------- -------- --------
TOTAL NONINTEREST INCOME 250 620 1,405 2,696
-------- -------- -------- --------
NONINTEREST EXPENSE
Salaries, benefits and other compensation 2,523 2,795 11,313 9,949
Occupancy expense 467 474 1,879 1,828
Furniture and equipment expense 230 228 899 940
Data processing costs 406 388 1,610 1,537
Professional fees 261 401 1,124 1,846
Marketing expense 126 196 463 645
FDIC premiums 95 22 176 84
Other 373 559 1,484 1,859
-------- -------- -------- --------
TOTAL NONINTEREST EXPENSE 4,481 5,063 18,948 18,688
-------- -------- -------- --------
INCOME (LOSS) BEFORE INCOME TAXES (303) 366 1,380 2,390
Income tax provision (benefit) (210) 36 165 460
-------- -------- -------- --------
NET INCOME (LOSS) $ (93) $ 330 $ 1,215 $ 1,930
======== ======== ======== ========
Earnings (loss) per share:
Basic $ (0.01) $ 0.02 $ 0.09 $ 0.14
Diluted $ (0.01) $ 0.02 $ 0.09 $ 0.14
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CONSOLIDATED STATEMENTS OF CONDITION (UNAUDITED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
DECEMBER 31,
----------------------------
2008 2007
------------ ------------
ASSETS
Cash and due from banks $ 642 $ 3,307
Interest-earning demand deposits in other banks 3,302 7,968
Money market funds -- 20,000
------------ ------------
Total cash and cash equivalents 3,944 31,275
Investment securities available-for-sale 25,041 91,159
Mortgage related securities available-for-sale 269,682 205,145
Loans, net of allowance for loan losses of $6,260 at
December 31, 2008 and $3,376 at December 31, 2007 588,975 447,035
Federal Home Loan Bank stock, at cost 9,707 5,875
Bank-owned life insurance 12,214 11,762
Premises and equipment 13,705 14,466
Accrued interest receivable 3,721 3,360
Mortgage servicing rights 827 1,066
Deferred tax asset, net 1,869 410
Other assets 1,585 1,366
------------ ------------
TOTAL ASSETS $ 931,270 $ 812,919
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Deposits $ 608,472 $ 585,560
Federal Home Loan Bank advances 146,379 80,000
Other borrowed funds 50,000 20,000
Advances from borrowers for taxes and insurance 2,589 2,374
Accrued interest payable 727 504
Accrued expenses and other liabilities 1,883 2,110
------------ ------------
TOTAL LIABILITIES 810,050 690,548
------------ ------------
STOCKHOLDERS' EQUITY
Preferred stock ($.01 par value; 1,000,000 shares authorized, none issued
and outstanding at December 31, 2008 and
December 31, 2007) -- --
Common stock ($.01 par value; 35,000,000 shares authorized,
14,679,750 shares issued and 14,066,559 shares outstanding
at December 31, 2008 and 14,679,750 shares issued and
14,352,750 shares outstanding at December 31, 2007) 147 147
Additional paid-in capital 63,490 62,909
Treasury stock (at cost, 613,191 shares at December 31, 2008
and 327,000 shares at December 31, 2007) (7,293) (3,924)
Common stock acquired by benefit plans (7,819) (8,732)
Retained earnings 72,690 71,475
Accumulated other comprehensive income, net 5 496
------------ ------------
TOTAL STOCKHOLDERS' EQUITY 121,220 122,371
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 931,270 $ 812,919
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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,
2008 2008 2007
------------- ------------- ------------
CAPITAL RATIOS:
Total stockholders' equity (to total assets) (1) 13.02% 13.61% 15.05%
Tier 1 capital (to adjusted assets) (2) 10.70% 11.20% 12.03%
Tier 1 risk -based capital (to risk-weighted assets) (2) 18.11 18.72 21.78
Total risked-based capital (to risk-weighted assets) (2) 19.25 19.52 22.54
ASSET QUALITY INDICATORS:
Nonperforming loans (3) $ 5,850 $ 1,871 $ 819
Real estate owned - - -
--------- --------- ---------
Total nonperforming assets $ 5,850 $ 1,871 $ 819
========= ========= =========
Ratio of nonperforming loans to total loans 0.98% 0.32% 0.18%
========= ========= =========
Ratio of nonperforming loans to total assets 0.63 0.21 0.10
========= ========= =========
Ratio of allowance for loan losses to total loans 1.05 0.74 0.75
========= ========= =========
At or for the three months ended
December 31, September 30, December 31,
2008 2008 2007
---------------- --------------- ----------------
PERFORMANCE RATIOS (4):
Return on average assets (0.04)% 0.31% 0.17%
Return on average equity (0.31) 2.18 1.06
Net interest margin 2.70 2.79 2.74
OTHER:
Book value per share $ 8.62 $ 8.54 $ 8.53
Employees (full-time equivalents) 137 139 141
For the twelve months ended
December 31, December 31,
2008 2007
------------------- ----------------
PERFORMANCE RATIOS:
Return on average assets 0.14% 0.26%
Return on average equity 1.00 1.54
Net interest margin 2.59 2.60
- --------------------
(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
(4) Annualized
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