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First National Community Bancorp, Inc. Announces Second Quarter 2015 Net Income

07/30/2015

DUNMORE, Pa., July 30, 2015 (GLOBE NEWSWIRE) -- First National Community Bancorp, Inc. (OTCQX:FNCB), the parent company of Dunmore-based First National Community Bank (the "Bank"), today reported net income for the three months ended June 30, 2015 of $0.8 million, or $0.05 per basic and diluted share. Net income for the comparable period of 2014 was $6.6 million, or $0.40 per basic and diluted share. For the six months ended June 30, 2015, net income was $4.3 million, or $0.26 per basic and diluted share, a decrease of $5.8 million compared to $10.1 million, or $0.61 per basic and diluted share, for the same six months of 2014. The decrease in quarter- and year-to-date earnings reflected non-recurring income recorded in 2014 related to two legal settlements received in the second quarter of 2014 and a gain on the sale of the Company's retail banking operations in Monroe County in the first quarter of 2014.

Annualized return on average assets was 0.34% and 0.89%, respectively for the three and six-month periods ended June 30, 2015, compared to 2.73% and 2.09%, respectively, for the same periods of 2014. For the second quarter and year-to-date periods of 2015, annualized return on average equity was 5.89% and 15.84%, respectively, and 60.91% and 50.62%, respectively, for the comparable 2014 periods.

On June 30, 2015, pursuant to approval from both the holders of the Company's fixed-rate subordinated notes due 2019 (the "Notes") and the Federal Reserve Bank of Philadelphia, the Company amended the original terms of the Notes to reduce the annual interest rate from 9.00% to 4.50% effective July 1, 2015 and to accelerate a partial repayment of principal amount. On June 30, 2015, the Company repaid $11.0 million, or 44.0%, of outstanding principal. These changes equate to a savings of $1.6 million in annual interest expense related to the Notes.

Second Quarter 2015 Highlights:

  • Lowered annual interest rate on the Notes by 50.0% and made a 44.0% principal reduction payment;
  • Total deposit growth of $70.0 million, or 8.8%, from the end of 2014 and $90.3 million, or 11.6%, from the end of the first quarter of 2015; and
  • Non-interest expense decreased 20.6% comparing the six-month periods ended June 30, 2015 and 2014.

"Amending the interest rate and accelerating repayment of 44.0% of the principal on the Notes was a key strategic transaction for the Company that will improve our net interest margin and profitability going forward," stated Steven R. Tokach, President and Chief Executive Officer. "Additionally, future non-interest expense levels should benefit from reduced insurance costs, given our improved risk profile," concluded Mr. Tokach.

Summary Results for the Three and Six Months Ended June 30, 2015

Net interest income before credit for loan and lease losses was $6.3 million for the second quarter, and $12.6 million for the six months ended June 30, 2015 compared to $6.7 million and $13.2 million for the same periods in 2014. The decrease was primarily a result of lower interest and dividend income on securities, which reflected tax planning strategies involving the repositioning of the investment portfolio from tax-exempt securities into taxable securities and the timing of the reinvestment of sales proceeds. Partially offsetting the reduction in interest income was a $0.3 million reduction in interest expense, which was primarily due to a decrease in funding costs. The tax-equivalent net interest margin for second quarter 2015 was 2.85%, which was unchanged from the first quarter of 2015, and a decrease of 30 basis points from the prior year period. The Company anticipates an improvement in its future funding costs and tax-equivalent net interest margin as a result of the 50.0% reduction in the annual interest rate and 44.0% principal reduction of the Notes.

Non-interest income was $1.6 million and $5.0 million, respectively, for the three and six months ended June 30, 2015, compared to $5.0 million and $8.4 million, respectively, for the same periods in 2014. The decrease in second quarter and year-to-date 2015 non-interest income was primarily due to nonrecurring income recorded in the comparable periods of 2014. In the second quarter of 2014, the Company received $2.1 million in recoveries related to two legal settlements, one of which was the recovery of all past due interest, late charges and legal and other expenses as part of a settlement of previously charged-off commercial real estate loans, and the other was a recovery in connection with a previously disclosed shareholder derivative suit. In addition, net gains on the sale of securities decreased $1.4 million and $0.7 million, respectively, comparing the three and six month periods ended June 30, 2015 and 2014. Also impacting the decrease in non-interest income for the year-to-date periods, were nonrecurring income in 2014 from the legal settlements detailed above and the divestiture of retail banking operations in Monroe County.

For the three months ended June 30, 2015, non-interest expense decreased $2.3 million, or 25.5%, to $6.7 million, from $9.0 million for the same three months of 2014. On a year-to-date basis, non-interest expense decreased $3.5 million, or 20.6%, to $13.5 million in 2015 from $17.0 million in 2014. For both the three-month and year-to-date periods, the decrease resulted primarily from reductions in expenses of other real estate owned, legal expense and Federal Deposit Insurance Corporate ("FDIC") insurance expense. With regard to the reduction in FDIC insurance, the Company was notified during the second quarter of 2015 that it was now considered in Risk Category I, the lowest risk category, for assessment purposes. Also during the second quarter of 2015, due to its improved risk profile, the Company renewed its professional liability, fidelity bond and errors and omissions insurance policies at considerably lower rates.

Asset Quality

The Company recorded net charge-offs of $1.0 million and $1.1 million, respectively, for the three and six months ended June 30, 2015, respectively, compared to net recoveries of $3.6 million and $3.7 million, respectively, for the same periods of 2014. During the second quarter of 2015, the Company recorded a partial charge-off in the amount of $0.9 million on one commercial real estate loan. The net recovery position in 2014 was due largely to the previously mentioned legal settlement. The majority of the balance of net charge-offs was recorded during the second quarter of 2015.

Total non-performing loans were $5.8 million at June 30, 2015, an increase of $0.6 million, or 11.1%, from $5.2 million at March 31, 2015, and $0.2 million, or 4.3%, from December 31, 2014. The ratio of non-performing loans to total loans was 0.84% at June 30, 2015 compared to 0.77% at March 31, 2015 and 0.82% at December 31, 2014. (At March 31, 2015, the most recent data available, the FDIC average for commercial banks with assets between $1.0 billion and $3.0 billion at March 31, 2015 was 0.91%.) The allowance for loan and lease losses as a percentage of gross loans was 1.51% at June 30, 2015, 1.63% at March 31, 2015 and 1.72% at the end of 2014. (The above described FDIC peer group average was 1.35% at March 31, 2015.)

Financial Condition

Total assets increased $57.6 million, or 5.9%, to $1.0 billion at June 30, 2015 as compared to $970.0 million at December 31, 2014. The balance sheet growth largely reflected a $36.6 million increase in cash and cash equivalents, which resulted from a $70.0 million or 8.8%, increase in total deposits, partially offset by a $14.4 million, or 14.9%, reduction in borrowed funds. Interest-bearing deposits increased $50.0 million, or 7.5% from year-end 2014 to the close of the second quarter of 2015, while non-interest bearing demand deposits grew by $20.0 million, or 16.1%. The increase in interest-bearing deposits primarily reflected the attainment of a large deposit relationship, partially offset by the planned runoff of higher-costing certificates of deposit generated through QwickRate®, a national deposit listing service. The Company experienced moderate loan demand, as loans, net of unearned income, net deferred loan fees and costs and the ALLL, increased $14.5 million, or 2.2% from December 31, 2014 to June 30, 2015. The reduction in borrowed funds reflected decreases of $3.4 million, or 5.6%, in FHLB of Pittsburgh advances and $11.0 million, or 44.0%, in the Company's Notes.   

Total shareholders' equity increased $3.5 million, or 6.9%, to $54.9 million at June 30, 2015 from $51.4 million at December 31, 2014. The capital improvement resulted primarily from net income of $4.3 million partially offset by a $0.8 million decrease in accumulated other comprehensive income, which resulted entirely from depreciation in the fair value of available-for-sale securities offset by the tax impact of the depreciation. At June 30, 2015, the Company's total risk-based capital and Tier I leverage ratios were 11.60% and 6.64%, respectively. The respective ratios for the Bank at June 30, 2015 were 13.82% and 9.28%. The ratios well exceeded the 10.00% and 5.00% required to be well capitalized under the prompt corrective action provisions of the Basel III capital framework for U.S. banking organizations, which became effective for the Company and the Bank on January 1, 2015.

Availability of Filings

Copies of the Company's most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q will be provided upon request from: Shareholder Relations, First National Community Bancorp, Inc., 102 East Drinker Street, Dunmore, PA 18512 or by calling (570) 348-6419. These reports, along with all of the Company's filings with the Securities and Exchange Commission are also available on the Investor Relations page of the Company's website, www.fncb.com/investorrelations.

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, 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.                                       

The Company may from time to time make written or oral "forward-looking statements," including statements contained in the Company's filings with the Securities and Exchange Commission ("SEC"), in its reports to shareholders, and in other communications by the Company, which are made in good faith by the Company pursuant to the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995.

These forward-looking statements include statements with respect to the Company's beliefs, plans, objectives, goals, expectations, anticipations, estimates and intentions, that are subject to significant risks and uncertainties, and are subject to change based on various 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. The following factors, among others, could cause the Company's financial performance to differ materially from the plans, objectives, expectations, estimates and intentions expressed in such forward-looking statements: 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 ability of the Company to compete with other institutions for business; the composition and concentrations of the Company's lending risk and the adequacy of the Company's reserves to manage those risks; the valuation of the Company's investment securities; the ability of the Company to pay dividends or repurchase common shares; the ability of the Company to retain key personnel; the impact of any pending or threatened litigation against the Company; the marketability of shares of the Company and fluctuations in the value of the Company's share price; the impact of the Company's ability to comply with its regulatory agreements and orders; the effectiveness of the Company's 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 capital adequacy, taxes, banking, securities and insurance); the impact of technological changes and security risks upon the Company's information technology systems; 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 SEC.

The Company cautions that the foregoing list of important factors is not all inclusive. Readers are also cautioned not to place undue reliance on any forward-looking statements, which reflect management's analysis only as of the date of this report, even if subsequently made available by the Company on its website or otherwise. 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 report.

Readers should carefully review the risk factors described in the Annual Report and other documents that the Company periodically files with the Securities and Exchange Commission, including its Form 10-K for the year ended December 31, 2014.

First National Community Bancorp, Inc.
Selected Financial Data
           
 Jun 30,Mar 31,Dec 31,Sept 30,Jun 30,
  2015 2015 2014 2014 2014
Per share data:          
Net income (fully diluted)  $ 0.05  $ 0.21  $ --   $ 0.20  $ 0.40
Cash dividends declared  $ --   $ --   $ --   $ --   $ -- 
Book value  $ 3.33  $ 3.38  $ 3.12  $ 3.06  $ 2.99
Tangible book value  $ 3.32  $ 3.36  $ 3.10  $ 3.03  $ 2.96
Market value:          
High   $ 6.55  $ 5.40  $ 6.65  $ 6.85  $ 6.85
Low  $ 5.15  $ 5.25  $ 5.60  $ 5.75  $ 5.16
Close  $ 6.05  $ 5.26  $ 6.00  $ 6.75  $ 6.05
Common shares outstanding  16,500,945  16,500,945  16,484,419  16,471,569  16,471,569
           
Selected ratios:          
Annualized return on average assets 0.34% 1.45% (0.01)% 1.38% 2.73%
Annualized return on average shareholders' equity 5.89% 26.34% (0.24)% 26.81% 60.91%
Tier I leverage ratio 6.64% 6.57% 6.05% 6.19% 5.84%
Total risk-based capital to risk-adjusted assets 11.60% 12.96% 13.67% 13.50% 13.07%
Average shareholders' equity to average total assets 5.73% 5.52% 5.22% 5.14% 4.49%
Yield on earning assets (FTE) 3.45% 3.48% 3.56% 3.84% 3.83%
Cost of funds 0.73% 0.75% 0.79% 0.80% 0.80%
Net interest spread (FTE) 2.72% 2.73% 2.77% 3.04% 3.03%
Net interest margin (FTE) 2.85% 2.85% 2.90% 3.18% 3.15%
Total delinquent loans/total loans 1.34% 1.10% 1.21% 1.16% 1.24%
Allowance for loan and lease losses/total loans 1.51% 1.63% 1.72% 1.76% 1.82%
Non-performing loans/total loans 0.84% 0.77% 0.82% 0.82% 0.83%
Net charge-offs (recoveries)/average loans 0.14% 0.01% 0.02% 0.03% (0.54)%
     
First National Community Bancorp, Inc.
Year-to-Date Consolidated Statements of Income
     
  Six Months Ended
 June 30, 
(in thousands, except share data) 2015 2014
Interest income    
Interest and fees on loans  $ 12,947  $ 13,106
Interest and dividends on securities    
U.S. government agencies  1,983  1,603
State and political subdivisions, tax-free  72  1,270
State and political subdivisions, taxable  123  195
Other securities  239  132
Total interest and dividends on securities  2,417  3,200
Interest on interest-bearing deposits in other banks  32  36
Total interest income  15,396  16,342
Interest expense    
Interest on deposits  1,326  1,684
Interest on borrowed funds    
Interest on Federal Home Loan Bank of Pittsburgh advances  239  209
Interest on subordinated debentures  1,128  1,131
Interest on junior subordinated debentures   100  99
Total interest on borrowed funds  1,467  1,439
Total interest expense  2,793  3,123
Net interest income before provision (credit) for loan and lease losses  12,603  13,219
Provision (Credit) for loan and lease losses  (149)  (5,575)
Net interest income after provision (credit) for loan and lease losses  12,752  18,794
Non-interest income    
Deposit service charges  1,419  1,436
Net gain on the sale of securities  2,298  3,048
Net gain on the sale of mortgage loans held for sale  56  166
Net loss on the sale of education loans  --  (13)
Net gain on the sale of other real estate owned  16  68
Gain on branch divestitures  --  607
Loan-related fees  196  191
Income from bank-owned life insurance  270  331
Legal settlements  184  2,127
Other  525  454
Total non-interest income  4,964  8,415
Non-interest expense    
Salaries and employee benefits  6,342  6,493
Occupancy expense  1,165  1,116
Equipment expense  826  713
Advertising expense  249  244
Data processing expense  949  1,048
Regulatory assessments  508  1,123
Bank shares tax  435  351
Expense of other real estate owned  247  1,981
Legal expense  251  1,160
Professional fees  587  934
Insurance expense  400  561
Other operating expenses  1,503  1,232
Total non-interest expense  13,462  16,956
Income before income taxes  4,254  10,253
(Credit) provision for income taxes  (40)  160
Net income  $ 4,294  $ 10,093
     
Income per share    
Basic  $ 0.26  $ 0.61
Diluted  $ 0.26  $ 0.61
     
Cash dividends declared per common share  $ --   $ -- 
Weighted average number of shares outstanding:    
Basic 16,495,558 16,471,569
Diluted 16,495,558 15,471,992
 
First National Community Bancorp, Inc.
Quarter-to-Date Consolidated Statements of Income
 
  Three Months Ended
 Jun 30,Mar 31,Dec 31,Sept 30,Jun 30,
(in thousands, except share data) 2015 2015 2014 2014 2014
Interest income          
Interest and fees on loans  $ 6,475  $ 6,472  $ 6,671  $ 6,852  $ 6,612
Interest and dividends on securities          
U.S. government agencies  1,012  971  998  893  860
State and political subdivisions, tax-free  22  50  204  409  560
State and political subdivisions, taxable  97  26  53  76  97
Other securities  82  157  66  74  76
Total interest and dividends on securities  1,213  1,204  1,321  1,452  1,593
Interest on interest-bearing deposits in other banks  11  21  27  8  13
Total interest income  7,699  7,697  8,019  8,312  8,218
Interest expense          
Interest on deposits  643  683  745  751  819
Interest on borrowed funds          
Interest on Federal Home Loan Bank of Pittsburgh advances  119  120  116  125  113
Interest on subordinated debentures  565  563  575  575  568
Interest on junior subordinated debentures   51  49  87  50  50
Total interest on borrowed funds  735  732  778  750  731
Total interest expense  1,378  1,415  1,523  1,501  1,550
Net interest income before provision (credit) for loan and lease losses  6,321  6,282  6,496  6,811  6,668
Provision (Credit) for loan and lease losses  345  (494)  (240)  (54)  (4,005)
Net interest income after provision (credit) for loan and lease losses  5,976  6,776  6,736  6,865  10,673
Non-interest income          
Deposit service charges  745  674  758  781  746
Net gain on the sale of securities  74  2,224  634  2,958  1,480
Net gain on the sale of mortgage loans held for sale  16  40  69  57  91
Net loss on the sale of education loans  --  --  --  --  --
Net gain on the sale of other real estate owned  11  5  106  35  39
Loan-related fees  106  90  148  101  98
Income from bank-owned life insurance  135  135  154  165  164
Legal settlements  184  --  --  --  2,127
Other  274  251  194  345  217
Total non-interest income  1,545  3,419  2,063  4,442  4,962
Non-interest expense          
Salaries and employee benefits  3,203  3,139  3,302  3,316  3,093
Occupancy expense  532  633  534  438  472
Equipment expense  442  384  403  355  357
Data processing expense  501  448  532  508  526
Regulatory assessments  99  409  412  266  450
Bank shares tax  218  217  150  21  175
Expense of other real estate owned  147  100  74  514  1,818
Legal expense  88  163  371  268  513
Professional fees  286  301  327  306  484
Insurance expense  202  198  194  196  279
Other operating expenses  962  790  2,531  1,595  798
Total non-interest expense  6,680  6,782  8,830  7,783  8,965
Income before income taxes  841  3,413  (31)  3,524  6,670
Provision (Credit) for income taxes  22  (62)  --  166  90
Net income  $ 819  $ 3,475  $ (31)  $ 3,358  $ 6,580
           
Income per share          
Basic  $ 0.05  $ 0.21  $ --   $ 0.20  $ 0.40
Diluted  $ 0.05  $ 0.21  $ --   $ 0.20  $ 0.40
           
Cash dividends declared per common share  $ --   $ --   $ --   $ --   $ -- 
Weighted average number of shares outstanding:          
Basic 16,500,945 16,490,111 16,475,899 16,471,569 16,471,569
Diluted 16,500,945 16,490,111 16,475,899 16,471,569 16,471,569
 
First National Community Bancorp, Inc.
Consolidated Balance Sheets
 
 Jun 30,Mar 31,Dec 31,Sept 30,Jun 30,
(in thousands) 2015 2015 2014 2014 2014
Assets          
Cash and cash equivalents:          
Cash and due from banks  $ 22,443  $ 19,985  $ 22,657  $ 21,532  $ 21,429
Interest-bearing deposits in other banks  49,872  17,390  13,010  18,461  9,220
Total cash and cash equivalents  72,315  37,375  35,667  39,993  30,649
Securities available for sale at fair value  226,539  204,635  218,989  217,412  209,264
Stock in Federal Home Loan Bank of Pittsburgh at cost  2,684  3,061  2,803  4,356  4,339
Loans held for sale  138  --  603  171  424
Loans, net of net deferred costs and unearned income  683,588  672,165  670,267  678,160  670,977
Allowance for loan and lease losses  (10,328)  (10,944)  (11,520)  (11,898)  (12,175)
Net loans  673,260  661,221  658,747  666,262  658,802
Bank premises and equipment, net  11,059  11,221  11,003  11,094  11,338
Accrued interest receivable  2,174  2,118  2,075  2,158  2,272
Intangible assets  220  261  302  344  385
Bank-owned life insurance  29,087  28,952  28,817  28,663  28,498
Other real estate owned  1,740  2,369  2,255  2,617  3,182
Other assets  8,455  9,028  8,768  9,063  8,722
Total assets  $ 1,027,671  $ 960,241  $ 970,029  $ 982,133  $ 957,875
           
Liabilities          
Deposits:          
Demand (non-interest-bearing)  $ 144,075  $ 134,993  $ 124,064  $ 148,430  $ 125,578
Interest-bearing   721,293  640,118  671,272  654,766  644,660
Total deposits  865,368  775,111  795,336  803,196  770,238
Borrowed funds:          
Federal Home Loan Bank of Pittsburgh advances  57,771  67,612  61,194  68,786  77,378
Subordinated debentures  14,000  25,000  25,000  25,000  25,000
Junior subordinated debentures  10,310  10,310  10,310  10,310  10,310
Total borrowed funds  82,081  102,922  96,504  104,096  112,688
Accrued interest payable  11,344  10,788  10,262  10,515  9,953
Other liabilities  13,935  15,678  16,529  14,005  15,790
Total liabilities  972,728  904,499  918,631  931,812  908,669
           
Shareholders' equity          
Preferred stock  --  --  --  --  --
Common stock  20,626  20,626  20,605  20,589  20,589
Additional paid-in capital  61,870  61,801  61,781  61,692  61,664
Accumulated deficit  (27,832)  (28,651)  (32,126)  (32,095)  (35,453)
Accumulated other comprehensive income  279  1,966  1,138  135  2,406
Total shareholders' equity  54,943  55,742  51,398  50,321  49,206
Total liabilities and shareholders' equity  $ 1,027,671  $ 960,241  $ 970,029  $ 982,133  $ 957,875
           
First National Community Bancorp, Inc.
Summary Tax-equivalent Net Interest Income
 
  Three Months Ended
 Jun 30,Mar 31,Dec 31,Sept 30,Jun 30,
(dollars in thousands) 2015 2015 2014 2014 2014
Interest income          
Loans:          
Loans - taxable  $ 6,148  $ 6,148  $ 6,340  $ 6,524  $ 6,292
Loans - tax-free  495  491  501  497  485
Total loans  6,643  6,639  6,841  7,021  6,777
Securities:          
Securities, taxable  1,191  1,154  1,117  1,043  1,033
Securities, tax-free  33  76  309  620  848
Total interest and dividends on securities  1,224  1,230  1,426  1,663  1,881
Interest-bearing deposits in other banks  11  21  27  8  13
Total interest income  7,878  7,890  8,294  8,692  8,671
Interest expense          
Deposits  643  683  745  751  819
Borrowed funds  735  732  778  750  731
Total interest expense  1,378  1,415  1,523  1,501  1,550
Net interest income  $ 6,500  $ 6,475  $ 6,771  $ 7,191  $ 7,121
           
Average balances          
Earning assets:          
Loans:          
Loans - taxable  $ 637,005  $ 633,731  $ 635,146  $ 635,032  $ 622,815
Loans - tax-free  42,225  41,125  40,477  39,849  39,465
Total loans  679,230  674,856  675,623  674,881  662,280
Securities:          
Securities, taxable  211,833  194,268  196,351  177,863  174,076
Securities, tax-free  2,007  4,283  17,055  36,246  48,349
Total interest and dividends on securities  213,840  198,551  213,406  214,109  222,425
Interest-bearing deposits in other banks  18,984  34,708  43,618  15,983  20,782
Total interest-earning assets  912,054  908,115  932,647  904,973  905,487
Non-earning assets  62,254  61,476  58,826  62,582  60,607
Total assets  $ 974,308  $ 969,591  $ 991,473  $ 967,555  $ 966,094
Interest-bearing liabilities:          
Deposits  $ 646,656  $ 658,193  $ 675,901  $ 640,394  $ 676,969
Borrowed funds  108,234  99,046  99,251  114,137  94,952
Total interest-bearing liabilities  754,890  757,239  775,152  754,531  771,921
Demand deposits  137,674  132,316  139,336  137,992  126,372
Other liabilities  25,964  26,525  25,278  25,337  24,470
Shareholders' equity  55,780  53,511  51,707  49,695  43,331
Total liabilities and shareholders' equity  $ 974,308  $ 969,591  $ 991,473  $ 967,555  $ 966,094
           
Yield/Cost          
Earning assets:          
Loans:          
Interest and fees on loans - taxable 3.86% 3.88% 3.99% 4.11% 4.04%
Interest and fees on loans - tax-free 4.69% 4.78% 4.95% 4.99% 4.91%
Total loans 3.91% 3.94% 4.05% 4.16% 4.09%
Securities:          
Securities, taxable 2.25% 2.38% 2.28% 2.35% 2.37%
Securities, tax-free 6.64% 7.10% 7.25% 6.84% 7.02%
Total interest and dividends on securities 2.29% 2.48% 2.67% 3.11% 3.38%
Interest on interest-bearing deposits in other banks 0.23% 0.24% 0.25% 0.20% 0.25%
Total earning assets 3.45% 3.48% 3.56% 3.84% 3.83%
Interest-bearing liabilities:          
Interest on deposits 0.40% 0.42% 0.44% 0.47% 0.48%
Interest on borrowed funds 2.72% 2.96% 3.14% 2.63% 3.08%
Total interest-bearing liabilities 0.73% 0.75% 0.79% 0.80% 0.80%
Net interest spread 2.72% 2.73% 2.77% 3.04% 3.03%
Net interest margin 2.85% 2.85% 2.90% 3.18% 3.15%
 
First National Community Bancorp, Inc.
Asset Quality Data
           
 Jun 30,Mar 31,Dec 31,Sept 30,Jun 30,
(in thousands) 2015 2015 2014 2014 2014
At period end          
Non-accrual loans, including non-performing troubled debt restructured loans (TDRs)  $ 5,757  $ 5,184  $ 5,522  $ 5,539  $ 5,550
Loans past due 90 days or more and still accruing  --  --  --  49  --
Total non-performing loans  5,757  5,184  5,522  5,588  5,550
Other real estate owned (OREO)  1,740  2,369  2,255  2,617  3,182
Total non-performing loans and OREO  $ 7,497  $ 7,553  $ 7,777  $ 8,205  $ 8,732
           
TDRs performing in accordance with modified terms  $ 5,289  $ 5,807  $ 5,282  $ 5,326  $ 4,991
           
           
For the three months ended          
Allowance for loan and lease losses          
Beginning balance  $ 10,944  $ 11,520  $ 11,898  $ 12,175  $ 12,589
Loans charged-off  1,192  277  427  359  333
Recoveries of charged-off loans  231  195  289  136  3,924
Net charge-offs (recoveries)  961  82  138  223  (3,591)
Provision (credit) for loan and lease losses  345  (494)  (240)  (54)  (4,005)
Ending balance  $ 10,328  $ 10,944  $ 11,520  $ 11,898  $ 12,175
CONTACT: INVESTOR CONTACT:
         James M. Bone, Jr., CPA
         Executive Vice President and
         Chief Financial Officer
         First National Community Bank
         (570) 348-6419
         james.bone@fncb.com
Source: First National Community Bancorp

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