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First National Community Bancorp, Inc. Files Quarterly Reports on Form 10-Q for March 31, 2012 and June 30, 2012

08/24/2012

DUNMORE, Pa., Aug. 24, 2012 /PRNewswire/ -- First National Community Bancorp, Inc. (OTC Markets Group, Inc.: FNCB), the parent company of Dunmore-based First National Community Bank, today announced that it has filed with the Securities and Exchange Commission (SEC) its Quarterly Reports on Form 10-Q for the periods ended March 31, 2012 and June 30, 2012.  Today's filings fulfill the Company's SEC reporting requirements for all historical periods, returning the Company to current SEC reporting status.

"With today's return to current SEC reporting status, we are committed to improving operational efficiency and focusing our organization's full efforts on rebuilding our financial strength and growing our customer-driven Northeastern Pennsylvania franchise," said Steven R. Tokach, President and Chief Executive Officer.  "We are committed to leveraging the operational improvements achieved over the last two years to make us a stronger and more competitive bank in Northeastern Pennsylvania.  We also intend now to evaluate our stock listing options with the objective of increasing the liquidity of our common shares." 

Summary Results for the Six Months Ended June 30, 2012

The Company reported a net loss of $2.1 million, or ($0.13) per basic and diluted share for the first six months of 2012, compared to a net loss of $337,000, or $(0.02) per basic and diluted share, for the comparable period of 2011.  The increase in the year-to-date net loss compared to the prior year was attributable to lower non-interest income, partially offset by a credit provision for loan and lease losses.

Non-interest income was $3.0 million for the first six months of 2012, compared to $7.4 million for the same period in 2011.  The reduction in non-interest income was primarily the result of lower gains on the sale of other real estate owned and gains on the sale of securities, which together totaled gains of $162,000 for the first six months of 2012, compared to gains of $4.9 million in 2011.  The Company experienced fewer problem credit foreclosures, which resulted in fewer sales of other real estate owned in 2012.

Net interest income after the provision for loan and lease losses for the first six months of 2012 increased by $2.4 million, or 19.4%, to $14.7 million.  The increase reflected a stabilization of net interest income and a decrease in the required provision for loan and lease losses. This improvement included a credit of $416,000 in the provision for loan and lease losses in 2012, compared to a provision of $2.5 million in 2011. The Company's net interest margin increased by 13 basis points to 3.26% for the first six months of 2012, compared with the same prior-year period.  Average balances of interest-bearing liabilities declined by a moderately higher amount than interest-earning assets, while the interest rate spread increased from 3.05% in 2011 to 3.22% in 2012.  

Non-interest expense of $19.8 million for the six month period ending June 30, 2012 was down moderately from 2011, despite continued elevated legal and professional fees.  In 2012, the Company began reducing legal and professional services as a result of returning to current SEC reporting status.  The Company expects professional costs to continue to decline to normalized levels in coming quarters.

Improved Asset Quality

As a result of aggressive and heightened problem credit resolutions in prior quarters, the Company's asset quality significantly improved from June 2011 to June 2012.  Continued improvements enabled the Company to reduce its non-performing loans by $7.6 million, or 28.4%, from June 30, 2011 to June 30, 2012.  The ratio of non-performing loans to total loans improved to 3.09% at June 30, 2012, compared to 3.70% at June 30, 2011.  (The FDIC peer average for all commercial banks with assets of $500 million to $1 billion at March 31, 2012, the most current FDIC statistical data, was 3.29 %.). The allowance for loan and lease losses as a percentage of non-performing loans improved from 88% at June 30, 2011 to 102% at June 30, 2012. (The peer group average was 61% at March 31, 2012.).  The Company's ratio of net charge-offs to average loans outstanding also improved, falling from 0.18% in 2011 to 0.12% for the six months ended June 30, 2012. (The average for the FDIC peer group at March 31, 2012 quarter was 0.63 %.).   

Financial Condition

The Company's total assets decreased $134.9 million, or 12.2%, compared to December 31, 2011.  The reduction in total assets reflects lower loan balances resulting from loan payoffs and loan sales.  The declining level of assets over the past several quarters allowed the Company to continue to reduce higher-cost sources of funding in 2012. Total deposits declined by $120.4 million, or 12.6%, from December 31, 2011 to $836.7 million at June 30, 2012.  In addition, total borrowed funds declined $12.3 million, or 14.7% from December 31, 2011.

At June 30, 2012, First National Community Bank posted a total risk-based capital ratio of 11.85%, a Tier 1 risk-based capital ratio of 10.58%, and a Tier 1 leverage ratio of 7.89%. 

Availability of Filings

FNCB shareholders can obtain a copy of the filing documents by request from: Shareholder Relations, First National Community Bancorp, Inc., 102 East Drinker Street, Dunmore, PA 18512 or by calling (570) 348-6438.  The Forms 10-Q for the periods ended March 31, 2012 and June 30, 2012 are also available on the Investor Relations page of the Company's website, www.fncb.com, and on the SEC website at:

http://www.sec.gov/edgar/searchedgar/companysearch.html

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, Monroe 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.

MEDIA / INVESTOR CONTACT:                                                        

Joseph J. Earyes, CPA                                                  
First Senior Vice President and                                   
Retail Banking Officer                                                  
First National Community Bank                                   
(570) 558-6701                                                          
joseph.earyes@fncb.com                                           

This release contains forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Actual results and trends could differ materially from those set forth in such statements due to various risks, uncertainties and other 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. Such risks, uncertainties and other factors that could cause actual results and experience to differ include, but are not limited to, the following: 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 impact of the Company's ability to comply with its regulatory agreements and orders; the effectiveness of the Company's revised 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 taxes, banking, securities and insurance); technological changes; 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 Securities and Exchange Commission. 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 release.

SOURCE First National Community Bank

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