DUNMORE, Pa., Jan. 29, 2016 (GLOBE NEWSWIRE) -- First National Community Bancorp, Inc. (OTCQX:FNCB), the parent company of Dunmore-based First National Community Bank (the “Bank”), today reported record net income of $35.8 million, or $2.17 per basic and diluted share, for the year ended December 31, 2015, an increase of $22.4 million, or 167.1%, compared to $13.4 million, or $0.81 per basic and diluted share, for the year ended December 31, 2014.
167% Earnings Increase Included Reversal of Deferred Tax Asset Valuation Allowance
The Company’s earnings performance was significantly impacted by the non-recurring reversal of a deferred tax asset (“DTA”) valuation allowance, which resulted in the Company recording a tax benefit of $27.8 million in the consolidated statement of income for the year ended December 31, 2015. The reversal of the DTA valuation allowance indicates that upon consideration of all objectively verifiable evidence, management determined that it is more likely than not that future taxable income will be available to utilize the benefit of the Company’s net deferred tax assets, excluding DTAs for charitable contribution carryforwards, going forward. Also impacting the Company’s earnings performance in 2015 were decreases in non-interest income and the credit for loan and lease losses of $7.1 million and $4.5 million, respectively, which were partially offset by a $5.1 million reduction in non-interest expense and a $0.9 million increase in net interest income. For the fourth quarter of 2015, the Company recorded net income of $29.2 million, or $1.77, per basic and diluted common share, compared to a net loss of $31 thousand or $0.00 per basic and diluted share, for the same quarter of 2014. The improvement in fourth quarter results primarily reflected the reversal of DTA valuation allowance, increases in net interest income and the credit for loan and lease losses, partially offset by a reduction in non-interest income.
With the reversal of the DTA valuation allowance, at December 31, 2015, shareholders’ equity increased $34.8 million, or 67.7%, to $86.2 million, or $5.22 per share, from $51.4 million, or $3.12 per share, at December 31, 2014. Return on average assets and return on average shareholders’ equity equaled 3.57% and 63.24%, respectively in 2015, compared to 1.38% and 29.50%, respectively, in 2014. For the three months ended December 31, 2015, return on average assets and return on average shareholders’ equity were 10.99% and 192.68%, respectively, compared to (0.01)% and (0.24)%, respectively, for the same three months of 2014.
Performance Highlights:
- Earnings per share increased $1.36 to $2.17 in 2015 from $0.81 in 2014.
- Net interest income before the credit for loan and lease losses grew by 3.3% over 2014.
- Non-interest expense decreased $5.1 million, or 15.2% from 2014.
- Strong growth in net loans for 2015 of $66.2 million, or 10.0%.
- Asset quality improvement as evidenced by a 10.7% decline in nonperforming assets compared to December 31, 2014.
- Tangible book value improved 68.1% to $5.21 per share at December 31, 2015 compared to $3.10 per share at December 31, 2014.
“2015 has proved to be pivotal for our Company as we achieved several significant milestones this year,” stated Dominick L. DeNaples, Chairman of the Board. “Our accomplishments in 2015, including the termination of all regulatory enforcement actions, reflected our continued resolve and commitment to strengthen the Company’s risk profile and profitability through the execution of sound balance sheet management strategies,” commented Steven R. Tokach, President and Chief Executive Officer. “The reversal of the DTA valuation allowance further reinforces our confidence in the Company’s ability to generate sustained profitability and enhance shareholder value going forward, and underscores our belief that the Company has regained its position as a premier community banking franchise in Northeastern Pennsylvania,” concluded Mr. Tokach.
Summary Results for 2015
Net interest income before the credit for loan and lease losses increased $874 thousand, or 3.3%, to $27.4 million in 2015 from $26.5 million in 2014. The improvement in net interest income reflected a $1.3 million, or 21.9%, decrease in interest expense, which was due primarily to a 19 basis point reduction in the Company’s cost of funds to 0.61% in 2015 from 0.80% in 2014. Having the greatest impact on funding costs was an $11.0 million principal payment and rate modification of the Company’s subordinated debentures decreasing the interest rate 450 basis points completed on June 30, 2015. As a result, interest expense on the subordinated debentures decreased $0.8 million. Overall, the cost of borrowed funds decreased 116 basis points to 2.01% in 2015 from 3.17% in 2014. Partially offsetting the decrease in interest expense was a $0.5 million, or 1.4%, decrease in interest income to $32.2 million in 2015 from $32.7 million in 2014. The reduction in interest income was primarily caused by a 25 basis point reduction in the tax-equivalent yield on earning assets to 3.50% in 2015 from 3.75% in 2014. The Company’s tax-equivalent margin decreased 9 basis points to 2.99% in 2015 from 3.08% in 2014. The margin contraction reflected repositioning of the Company’s investment securities portfolio from tax-free to taxable securities as part of tax planning strategies aimed at facilitating the reversal of the DTA valuation allowance, and a 17 basis point decrease in the tax-equivalent yield on the loan portfolio, partially offset by the positive effects of $26.8 million in growth in average earning assets.
Non-interest income decreased $7.1 million to $7.8 million in 2015 from $14.9 million in 2014. The 47.7% decrease was due largely to a decrease in net gains on the sale of investment securities of $4.3 million, coupled with non-recurring income earned in 2014. Net gains on the sale of investment securities were $2.3 million in 2015, a $4.3 million, or 65.4%, decrease compared to $6.6 million in 2014. In addition, non-interest income in 2014 included $2.1 million of non-recurring income received from the settlement of judgements filed pursuant to a large, previously charged-off, commercial credit relationship, and a $0.6 million net gain recorded on the divestiture of the Company’s retail banking operations in Monroe County, Pennsylvania.
Non-interest expense levels were positively impacted by continued improvement in the Company’s asset quality and risk profile, termination of regulatory enforcement actions and on-going cost containment initiatives. Non-interest expense decreased $5.1 million, or 15.2%, to $28.5 million in 2015 from $33.6 million in 2014. Specifically, the above factors contributed directly to reductions of $2.2 million, or 84.4%, in expense of other real estate owned, $1.4 million, or 75.7%, in legal expense, $0.9 million, or 47.3%, in regulatory assessments, $0.6 million, or 35.3% in professional fees and $0.3 million, or 30.7%, in insurance costs.
Improved Asset Quality
The Company’s asset quality continued to improve in 2015, which reflects the ongoing focus on sound problem credit resolutions and commitment to disciplined credit risk management. Total non-performing assets decreased $0.9 million, or 10.7%, to $6.9 million at December 31, 2015 from $7.8 million at December 31, 2014. A $1.7 million decrease in non-performing loans, including non-accruing troubled debt restructurings, was partially offset by a $0.9 million increase in other real estate owned (“OREO”). In the fourth quarter of 2015, the Company foreclosed upon a commercial property collateralizing a $3.5 million non-accrual commercial real estate loan. The property was transferred to OREO at its fair value less cost to sell of $1.5 million. The loan was supported by a governmental agency guarantee. Accordingly, the Company does not expect to incur any loss on the difference between the recorded investment of this loan and the fair value of the collateral less cost to sell.
The ratio of non-performing loans to total loans improved 30 basis points to 0.52% at December 31, 2015, compared to 0.82% at December 31, 2014. The allowance for loan and lease losses as a percentage of total loans was 1.21% at December 31, 2015 compared to 1.72% at the end of 2014. Net charge-offs as a percentage of average loans outstanding for the year ended December 31, 2015 was 0.20%. In comparison, the Company posted net recoveries as a percentage of average loans outstanding of 0.51% in 2014, which was largely due to the aforementioned favorable legal settlement.
Financial Position
Total assets increased $120.6 million, or 12.4%, to $1.1 billion at December 31, 2015 from $970.0 million at December 31, 2014. Net loans grew $66.2 million, or 10.0%, which reflected strong demand for both commercial and consumer loan products. In addition, available-for-sale securities increased $34.8 million, or 15.9%. The balance sheet was also impacted by the reversal of the DTA valuation allowance, which was the primary factor causing a $28.7 million increase in other assets. Total deposits increased $26.2 million, or 3.3%, to $821.5 million at December 31, 2015 from $795.3 million at the end of 2014. Specifically, non-interest-bearing demand deposits increased $30.5 million, or 24.6%, while interest-bearing deposits decreased $4.3 million, or 0.6%. The increase in non-interest bearing demand deposits primarily reflected the positive balance fluctuations of several large commercial customer relationships. The decrease in interest-bearing deposits was largely related to lower deposit balances of the Company’s municipal customers due to a state budget impasse, and the planned runoff of higher-costing certificates of deposit generated through QwickRate®, a national deposits listing service. These decreases were partially offset by the attainment of a large commercial deposit relationship. Due to their lower cost, the Company increased its utilization of FHLB borrowings as an alternative funding source of liquidity by $74.6 million or 121.9%. This was the primary factor leading to a $63.6 million, or 65.9%, increase in total borrowed funds. Partially offsetting the increase in FHLB advances was the $11.0 million principal repayment of the Company’s subordinated debentures.
Impacted by the DTA valuation allowance reversal, total shareholders’ equity improved $34.8 million, or 67.7%, to $86.2 million at December 31, 2015 from $51.4 million at the end of 2014. Net income for 2015 of $35.8 million, which included an income tax benefit of $27.8 million related to the reversal of the DTA valuation allowance, was the primary factor leading to the Company’s improved capital position.
At December 31, 2015, the Company’s total risk-based capital ratio and the Tier 1 leverage ratio were 11.75% and 7.27%, respectively, at December 31, 2015. The respective ratios for the Bank at December 31, 2015 were 13.79% and 9.79%. The ratios for both the Company and the Bank 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 Reports on for 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. The Company’s SEC filings including Annual Report on Form 10-K and Quarterly Reports on Form 10-Q 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, 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.
[The Company provides tabular information as follows]
| First National Community Bancorp, Inc. |
| Selected Financial Data |
| | | | | | | | | | | | |
| | | | |
| | | | Dec 31, | | Sept 30, | | Jun 30, | | Mar 31, | | Dec 31, |
| | | | | 2015 | | | | 2015 | | | | 2015 | | | | 2015 | | | | 2014 | |
| Per share data: | | | | | | | | | | |
| Net income (fully diluted) | | $ | 1.77 | | | $ | 0.14 | | | $ | 0.05 | | | $ | 0.21 | | | $ | - | |
| Cash dividends declared | | $ | - | | | $ | - | | | $ | - | | | $ | - | | | $ | - | |
| Book value | | $ | 5.22 | | | $ | 3.61 | | | $ | 3.33 | | | $ | 3.38 | | | $ | 3.12 | |
| Tangible book value | | $ | 5.21 | | | $ | 3.60 | | | $ | 3.32 | | | $ | 3.36 | | | $ | 3.10 | |
| Market value: | | | | | | | | | | |
| | High | | $ | 5.50 | | | $ | 6.05 | | | $ | 6.55 | | | $ | 5.40 | | | $ | 6.65 | |
| | Low | | $ | 5.06 | | | $ | 5.02 | | | $ | 5.15 | | | $ | 5.25 | | | $ | 5.60 | |
| | Close | | $ | 5.25 | | | $ | 5.19 | | | $ | 6.05 | | | $ | 5.26 | | | $ | 6.00 | |
| Common shares outstanding | | | 16,514,245 | | | | 16,500,945 | | | | 16,500,945 | | | | 16,500,945 | | | | 16,484,419 | |
| | | | | | | | | | | | |
| Selected ratios: | | | | | | | | | | |
| Annualized return on average assets | | | 10.99 | % | | | 0.91 | % | | | 0.34 | % | | | 1.45 | % | | | (0.01 | )% |
| Annualized return on average shareholders' equity | | | 192.68 | % | | | 16.38 | % | | | 5.89 | % | | | 26.34 | % | | | (0.24 | )% |
| Tier I leverage ratio | | | 7.27 | % | | | 6.57 | % | | | 6.64 | % | | | 6.57 | % | | | 6.05 | % |
| Total risk-based capital to risk-adjusted assets | | | 11.79 | % | | | 11.20 | % | | | 11.60 | % | | | 12.96 | % | | | 13.67 | % |
| Average shareholders' equity to average total assets | | | 5.70 | % | | | 5.55 | % | | | 5.73 | % | | | 5.52 | % | | | 5.22 | % |
| Yield on earning assets (FTE) | | | 3.56 | % | | | 3.50 | % | | | 3.45 | % | | | 3.48 | % | | | 3.56 | % |
| Cost of funds | | | 0.48 | % | | | 0.51 | % | | | 0.73 | % | | | 0.75 | % | | | 0.79 | % |
| Net interest spread (FTE) | | | 3.08 | % | | | 2.98 | % | | | 2.72 | % | | | 2.73 | % | | | 2.77 | % |
| Net interest margin (FTE) | | | 3.15 | % | | | 3.07 | % | | | 2.85 | % | | | 2.85 | % | | | 2.90 | % |
| Total delinquent loans/total loans | | | 0.85 | % | | | 1.29 | % | | | 1.34 | % | | | 1.10 | % | | | 1.21 | % |
| Allowance for loan and lease losses/total loans | | | 1.21 | % | | | 1.36 | % | | | 1.51 | % | | | 1.63 | % | | | 1.72 | % |
| Non-performing loans/total loans | | | 0.52 | % | | | 0.93 | % | | | 0.84 | % | | | 0.77 | % | | | 0.82 | % |
| Net charge-offs/average loans | | | 0.02 | % | | | 0.04 | % | | | 0.14 | % | | | 0.01 | % | | | 0.02 | % |
| | | | | | | | | | | | |
| First National Community Bancorp, Inc. | |
| Year-to-Date Consolidated Statements of Income | |
| | Year Ended | |
| | December 31, | |
| (in thousands, except share data) | | | 2015 | | | | 2014 | | |
| Interest income | | | | | |
| Interest and fees on loans | | $ | 26,672 | | | $ | 26,629 | | |
| Interest and dividends on securities | | | | | |
| | U.S. government agencies | | | 4,036 | | | | 3,494 | | |
| | State and political subdivisions, tax-free | | | 109 | | | | 1,883 | | |
| | State and political subdivisions, taxable | | | 905 | | | | 324 | | |
| | Other securities | | | 433 | | | | 272 | | |
| | | Total interest and dividends on securities | | | 5,483 | | | | 5,973 | | |
| Interest on interest-bearing deposits in other banks | | | 46 | | | | 71 | | |
| | | | Total interest income | | | 32,201 | | | | 32,673 | | |
| Interest expense | | | | | |
| Interest on deposits | | | 2,631 | | | | 3,180 | | |
| Interest on borrowed funds | | | | | |
| | Interest on Federal Home Loan Bank of Pittsburgh advances | | | 514 | | | | 450 | | |
| | Interest on subordinated debentures | | | 1,450 | | | | 2,281 | | |
| | Interest on junior subordinated debentures | | | 206 | | | | 236 | | |
| | | Total interest on borrowed funds | | | 2,170 | | | | 2,967 | | |
| | | | Total interest expense | | | 4,801 | | | | 6,147 | | |
| Net interest income before credit for loan and lease losses | | | 27,400 | | | | 26,526 | | |
| Credit for loan and lease losses | | | (1,345 | ) | | | (5,869 | ) | |
| Net interest income after credit for loan and lease losses | | | 28,745 | | | | 32,395 | | |
| Non-interest income | | | | | |
| Deposit service charges | | | 2,960 | | | | 2,975 | | |
| Net gain on the sale of securities | | | 2,296 | | | | 6,640 | | |
| Net gain on the sale of mortgage loans held for sale | | | 292 | | | | 292 | | |
| Net loss on the sale of education loans | | | - | | | | (13 | ) | |
| Net gain on the sale of other real estate owned | | | 162 | | | | 209 | | |
| Gain on branch divestitures | | | - | | | | 607 | | |
| Loan-related fees | | | 442 | | | | 440 | | |
| Income from bank-owned life insurance | | | 564 | | | | 650 | | |
| Legal settlements | | | 184 | | | | 2,127 | | |
| Other | | | | | 900 | | | | 993 | | |
| | | | Total non-interest income | | | 7,800 | | | | 14,920 | | |
| Non-interest expense | | | | | |
| Salaries and employee benefits | | | 13,810 | | | | 13,111 | | |
| Occupancy expense | | | 2,284 | | | | 2,088 | | |
| Equipment expense | | | 1,657 | | | | 1,471 | | |
| Data processing expense | | | 1,976 | | | | 2,088 | | |
| Regulatory assessments | | | 950 | | | | 1,801 | | |
| Bank shares tax | | | 705 | | | | 522 | | |
| Expense of other real estate owned | | | 400 | | | | 2,569 | | |
| Legal expense | | | 437 | | | | 1,799 | | |
| Professional fees | | | 1,014 | | | | 1,567 | | |
| Insurance expense | | | 659 | | | | 951 | | |
| Legal/regulatory settlements | | | 777 | | | | 1,500 | | |
| Other operating expenses | | | 3,795 | | | | 4,102 | | |
| | | | Total non-interest expense | | | 28,464 | | | | 33,569 | | |
| Income before income taxes | | | 8,081 | | | | 13,746 | | |
| Income tax (benefit) expense | | | (27,759 | ) | | | 326 | | |
| Net income | | | $ | 35,840 | | | $ | 13,420 | | |
| | | | | | | | | |
| Income per share | | | | | |
| | Basic | | | $ | 2.17 | | | $ | 0.81 | | |
| | Diluted | | | $ | 2.17 | | | $ | 0.81 | | |
| | | | | | | | | |
| Cash dividends declared per common share | | $ | - | | | $ | - | | |
| Weighted average number of shares outstanding: | | | | | |
| | Basic | | | | 16,499,622 | | | | 16,472,660 | | |
| | Diluted | | | | 16,499,622 | | | | 16,472,871 | | |
| First National Community Bancorp, Inc. | |
| Quarter-to-Date Consolidated Statements of Income | |
| | | | | | | | | | | | | | | |
| | Three Months Ended | |
| | Dec 31, | | Sept 30, | | Jun 30, | | Mar 31, | | Dec 31, | |
| (in thousands, except share data) | | | 2015 | | | | 2015 | | | | 2015 | | | | 2015 | | | | 2014 | | |
| Interest income | | | | | | | | | | | |
| Interest and fees on loans | | $ | 7,032 | | | $ | 6,693 | | | $ | 6,475 | | | $ | 6,472 | | | $ | 6,671 | | |
| Interest and dividends on securities | | | | | | | | | | | |
| | U.S. government agencies | | | 992 | | | | 1,061 | | | | 1,012 | | | | 971 | | | | 998 | | |
| | State and political subdivisions, tax-free | | | 18 | | | | 19 | | | | 22 | | | | 50 | | | | 204 | | |
| | State and political subdivisions, taxable | | | 458 | | | | 324 | | | | 97 | | | | 26 | | | | 53 | | |
| | Other securities | | | 102 | | | | 92 | | | | 82 | | | | 157 | | | | 66 | | |
| | | Total interest and dividends on securities | | | 1,570 | | | | 1,496 | | | | 1,213 | | | | 1,204 | | | | 1,321 | | |
| Interest on interest-bearing deposits in other banks | | | 4 | | | | 10 | | | | 11 | | | | 21 | | | | 27 | | |
| | | | Total interest income | | | 8,606 | | | | 8,199 | | | | 7,699 | | | | 7,697 | | | | 8,019 | | |
| Interest expense | | | | | | | | | | | |
| Interest on deposits | | | 628 | | | | 677 | | | | 643 | | | | 683 | | | | 745 | | |
| Interest on borrowed funds | | | | | | | | | | | |
| | Interest on Federal Home Loan Bank of Pittsburgh advances | | | 147 | | | | 128 | | | | 119 | | | | 120 | | | | 116 | | |
| | Interest on subordinated debentures | | | 160 | | | | 162 | | | | 565 | | | | 563 | | | | 575 | | |
| | Interest on junior subordinated debentures | | | 56 | | | | 50 | | | | 51 | | | | 49 | | | | 87 | | |
| | | Total interest on borrowed funds | | | 363 | | | | 340 | | | | 735 | | | | 732 | | | | 778 | | |
| | | | Total interest expense | | | 991 | | | | 1,017 | | | | 1,378 | | | | 1,415 | | | | 1,523 | | |
| Net interest income before (credit) provision for loan and lease losses | | | 7,615 | | | | 7,182 | | | | 6,321 | | | | 6,282 | | | | 6,496 | | |
| (Credit) provision for loan and lease losses | | | (1,005 | ) | | | (191 | ) | | | 345 | | | | (494 | ) | | | (240 | ) | |
| Net interest income after (credit) provision for loan and lease losses | | | 8,620 | | | | 7,373 | | | | 5,976 | | | | 6,776 | | | | 6,736 | | |
| Non-interest income | | | | | | | | | | | |
| Deposit service charges | | | 742 | | | | 799 | | | | 745 | | | | 674 | | | | 758 | | |
| Net (loss) gain on the sale of securities | | | (6 | ) | | | 4 | | | | 74 | | | | 2,224 | | | | 634 | | |
| Net gain on the sale of mortgage loans held for sale | | | 223 | | | | 13 | | | | 16 | | | | 40 | | | | 69 | | |
| Net gain on the sale of other real estate owned | | | 17 | | | | 129 | | | | 11 | | | | 5 | | | | 106 | | |
| Loan-related fees | | | 152 | | | | 94 | | | | 106 | | | | 90 | | | | 148 | | |
| Income from bank-owned life insurance | | | 149 | | | | 145 | | | | 135 | | | | 135 | | | | 154 | | |
| Legal settlements | | | - | | | | - | | | | 184 | | | | - | | | | - | | |
| Other | | | | | 180 | | | | 195 | | | | 274 | | | | 251 | | | | 194 | | |
| | | | Total non-interest income | | | 1,457 | | | | 1,379 | | | | 1,545 | | | | 3,419 | | | | 2,063 | | |
| Non-interest expense | | | | | | | | | | | |
| Salaries and employee benefits | | | 4,228 | | | | 3,240 | | | | 3,203 | | | | 3,139 | | | | 3,302 | | |
| Occupancy expense | | | 619 | | | | 500 | | | | 532 | | | | 633 | | | | 534 | | |
| Equipment expense | | | 423 | | | | 408 | | | | 442 | | | | 384 | | | | 403 | | |
| Data processing expense | | | 556 | | | | 471 | | | | 501 | | | | 448 | | | | 532 | | |
| Regulatory assessments | | | 239 | | | | 203 | | | | 99 | | | | 409 | | | | 412 | | |
| Bank shares tax | | | 53 | | | | 217 | | | | 218 | | | | 217 | | | | 150 | | |
| Expense of other real estate owned | | | 62 | | | | 91 | | | | 147 | | | | 100 | | | | 74 | | |
| Legal expense | | | 106 | | | | 80 | | | | 88 | | | | 163 | | | | 371 | | |
| Professional fees | | | 234 | | | | 193 | | | | 286 | | | | 301 | | | | 327 | | |
| Insurance expense | | | 131 | | | | 128 | | | | 202 | | | | 198 | | | | 194 | | |
| Legal settlement | | | 777 | | | | - | | | | - | | | | - | | | | 1,500 | | |
| Other operating expenses | | | 1,159 | | | | 884 | | | | 962 | | | | 790 | | | | 1,031 | | |
| | | | Total non-interest expense | | | 8,587 | | | | 6,415 | | | | 6,680 | | | | 6,782 | | | | 8,830 | | |
| Income (loss) before income taxes | | | 1,490 | | | | 2,337 | | | | 841 | | | | 3,413 | | | | (31 | ) | |
| Income tax (benefit) expense | | | (27,719 | ) | | | - | | | | 22 | | | | (62 | ) | | | - | | |
| Net income (loss) | | $ | 29,209 | | | $ | 2,337 | | | $ | 819 | | | $ | 3,475 | | | $ | (31 | ) | |
| | | | | | | | | | | | | | | |
| Income per share | | | | | | | | | | | |
| | Basic | | | $ | 1.77 | | | $ | 0.14 | | | $ | 0.05 | | | $ | 0.21 | | | $ | - | | |
| | Diluted | | | $ | 1.77 | | | $ | 0.14 | | | $ | 0.05 | | | $ | 0.21 | | | $ | - | | |
| | | | | | | | | | | | | | | |
| Cash dividends declared per common share | | $ | - | | | $ | - | | | $ | - | | | $ | - | | | $ | - | | |
| Weighted average number of shares outstanding: | | | | | | | | | | | |
| | Basic | | | | 16,506,294 | | | | 16,500,945 | | | | 16,500,945 | | | | 16,490,111 | | | | 16,475,899 | | |
| | Diluted | | | | 16,506,294 | | | | 16,500,945 | | | | 16,500,945 | | | | 16,490,111 | | | | 16,475,899 | | |
| First National Community Bancorp, Inc. |
| Consolidated Balance Sheets |
| | | | | | | | | | | | | | |
| | |
| | Dec 31, | | Sept 30, | | Jun 30, | | Mar 31, | | Dec 31, |
| (in thousands) | | | 2015 | | | | 2015 | | | | 2015 | | | | 2015 | | | | 2014 | |
| Assets | | | | | | | | | | | |
| Cash and cash equivalents: | | | | | | | | | |
| | Cash and due from banks | | $ | 19,544 | | | $ | 20,631 | | | $ | 22,443 | | | $ | 19,985 | | | $ | 22,657 | |
| | Interest-bearing deposits in other banks | | | 1,539 | | | | 10,383 | | | | 49,872 | | | | 17,390 | | | | 13,010 | |
| | | Total cash and cash equivalents | | | 21,083 | | | | 31,014 | | | | 72,315 | | | | 37,375 | | | | 35,667 | |
| Securities available for sale, at fair value | | | 253,773 | | | | 249,228 | | | | 226,539 | | | | 204,635 | | | | 218,989 | |
| Stock in Federal Home Loan Bank of Pittsburgh at cost | | | 6,344 | | | | 4,298 | | | | 2,684 | | | | 3,061 | | | | 2,803 | |
| Loans held for sale | | | 683 | | | | 4,634 | | | | 138 | | | | - | | | | 603 | |
| Loans, net of net deferred costs and unearned income | | | 733,716 | | | | 723,166 | | | | 683,588 | | | | 672,165 | | | | 670,267 | |
| Allowance for loan and lease losses | | | (8,790 | ) | | | (9,825 | ) | | | (10,328 | ) | | | (10,944 | ) | | | (11,520 | ) |
| Net loans | | | | 724,926 | | | | 713,341 | | | | 673,260 | | | | 661,221 | | | | 658,747 | |
| Bank premises and equipment, net | | | 11,193 | | | | 11,258 | | | | 11,059 | | | | 11,221 | | | | 11,003 | |
| Accrued interest receivable | | | 2,475 | | | | 2,618 | | | | 2,174 | | | | 2,118 | | | | 2,075 | |
| Intangible assets | | | 137 | | | | 179 | | | | 220 | | | | 261 | | | | 302 | |
| Bank-owned life insurance | | | 29,381 | | | | 29,232 | | | | 29,087 | | | | 28,952 | | | | 28,817 | |
| Other real estate owned | | | 3,154 | | | | 1,618 | | | | 1,740 | | | | 2,369 | | | | 2,255 | |
| Other assets | | | | 37,469 | | | | 7,799 | | | | 8,455 | | | | 9,028 | | | | 8,768 | |
| | | | Total assets | | $ | 1,090,618 | | | $ | 1,055,219 | | | $ | 1,027,671 | | | $ | 960,241 | | | $ | 970,029 | |
| | | | | | | | | | | | | | |
| Liabilities | | | | | | | | | | | |
| Deposits: | | | | | | | | | | | |
| | Demand (non-interest-bearing) | | $ | 154,531 | | | $ | 152,038 | | | $ | 144,075 | | | $ | 134,993 | | | $ | 124,064 | |
| | Interest-bearing | | | 667,015 | | | | 700,004 | | | | 721,293 | | | | 640,118 | | | | 671,272 | |
| | | Total deposits | | | 821,546 | | | | 852,042 | | | | 865,368 | | | | 775,111 | | | | 795,336 | |
| Borrowed funds: | | | | | | | | | | |
| | Federal Home Loan Bank of Pittsburgh advances | | | 135,802 | | | | 93,058 | | | | 57,771 | | | | 67,612 | | | | 61,194 | |
| | Subordinated debentures | | | 14,000 | | | | 14,000 | | | | 14,000 | | | | 25,000 | | | | 25,000 | |
| | Junior subordinated debentures | | | 10,310 | | | | 10,310 | | | | 10,310 | | | | 10,310 | | | | 10,310 | |
| | | Total borrowed funds | | | 160,112 | | | | 117,368 | | | | 82,081 | | | | 102,922 | | | | 96,504 | |
| Accrued interest payable | | | 11,165 | | | | 11,187 | | | | 11,344 | | | | 10,788 | | | | 10,262 | |
| Other liabilities | | | 11,617 | | | | 14,989 | | | | 13,935 | | | | 15,678 | | | | 16,529 | |
| | | Total liabilities | | | 1,004,440 | | | | 995,586 | | | | 972,728 | | | | 904,499 | | | | 918,631 | |
| | | | | | | | | | | | | | |
| Shareholders' equity | | | | | | | | | | |
| Preferred stock | | | - | | | | - | | | | - | | | | - | | | | - | |
| Common stock | | | 20,643 | | | | 20,626 | | | | 20,626 | | | | 20,626 | | | | 20,605 | |
| Additional paid-in capital | | | 62,059 | | | | 61,939 | | | | 61,870 | | | | 61,801 | | | | 61,781 | |
| Retained earnings (accumulated deficit) | | | 3,714 | | | | (25,495 | ) | | | (27,832 | ) | | | (28,651 | ) | | | (32,126 | ) |
| Accumulated other comprehensive (loss) income | | | (238 | ) | | | 2,563 | | | | 279 | | | | 1,966 | | | | 1,138 | |
| | | Total shareholders' equity | | | 86,178 | | | | 59,633 | | | | 54,943 | | | | 55,742 | | | | 51,398 | |
| | | | Total liabilities and shareholders’ equity | | $ | 1,090,618 | | | $ | 1,055,219 | | | $ | 1,027,671 | | | $ | 960,241 | | | $ | 970,029 | |
| | | | | |
| First National Community Bancorp, Inc. | |
| Summary Tax-equivalent Net Interest Income | |
| | | | | | | | | | | | | | | |
| | | | | | Three Months Ended | |
| | | | | | Dec 31, | | Sept 30, | | Jun 30, | | Mar 31, | | Dec 31, | |
| (dollars in thousands) | | | 2015 | | | | 2015 | | | | 2015 | | | | 2015 | | | | 2014 | | |
| Interest income | | | | | | | | | | | |
| Loans: | | | | | | | | | | | | | |
| Loans - taxable | | $ | 6,694 | | | $ | 6,371 | | | $ | 6,148 | | | $ | 6,148 | | | $ | 6,340 | | |
| Loans - tax-free | | | 512 | | | | 488 | | | | 495 | | | | 491 | | | | 501 | | |
| | Total loans | | | 7,206 | | | | 6,859 | | | | 6,643 | | | | 6,639 | | | | 6,841 | | |
| Securities: | | | | | | | | | | | | |
| Securities, taxable | | | 1,552 | | | | 1,477 | | | | 1,191 | | | | 1,154 | | | | 1,117 | | |
| Securities, tax-free | | | 27 | | | | 29 | | | | 33 | | | | 76 | | | | 309 | | |
| | Total interest and dividends on securities | | | 1,579 | | | | 1,506 | | | | 1,224 | | | | 1,230 | | | | 1,426 | | |
| Interest-bearing deposits in other banks | | | 4 | | | | 10 | | | | 11 | | | | 21 | | | | 27 | | |
| | | | Total interest income | | | 8,789 | | | | 8,375 | | | | 7,878 | | | | 7,890 | | | | 8,294 | | |
| Interest expense | | | | | | | | | | | |
| Deposits | | | | 628 | | | | 677 | | | | 643 | | | | 683 | | | | 745 | | |
| Borrowed funds | | | 363 | | | | 340 | | | | 735 | | | | 732 | | | | 778 | | |
| | | | Total interest expense | | | 991 | | | | 1,017 | | | | 1,378 | | | | 1,415 | | | | 1,523 | | |
| | | | Net interest income | | $ | 7,798 | | | $ | 7,358 | | | $ | 6,500 | | | $ | 6,475 | | | $ | 6,771 | | |
| |
| Average balances | | | | | | | | | | | |
| Earning assets: | | | | | | | | | | | |
| Loans: | | | | | | | | | | | | | |
| Loans - taxable | | $ | 685,795 | | | $ | 660,709 | | | $ | 637,005 | | | $ | 633,731 | | | $ | 635,146 | | |
| Loans - tax-free | | | 43,429 | | | | 41,746 | | | | 42,225 | | | | 41,125 | | | | 40,477 | | |
| | Total loans | | | 729,224 | | | | 702,455 | | | | 679,230 | | | | 674,856 | | | | 675,623 | | |
| Securities: | | | | | | | | | | | | |
| Securities, taxable | | | 251,108 | | | | 241,799 | | | | 211,833 | | | | 194,268 | | | | 196,351 | | |
| Securities, tax-free | | | 1,713 | | | | 1,707 | | | | 2,007 | | | | 4,283 | | | | 17,055 | | |
| | Total interest and dividends on securities | | | 252,821 | | | | 243,506 | | | | 213,840 | | | | 198,551 | | | | 213,406 | | |
| Interest-bearing deposits in other banks | | | 6,797 | | | | 12,185 | | | | 18,984 | | | | 34,708 | | | | 43,618 | | |
| | | | Total interest-earning assets | | | 988,842 | | | | 958,146 | | | | 912,054 | | | | 908,115 | | | | 932,647 | | |
| Non-earning assets | | | 65,633 | | | | 62,063 | | | | 62,254 | | | | 61,476 | | | | 58,826 | | |
| | | | Total assets | | $ | 1,054,475 | | | $ | 1,020,209 | | | $ | 974,308 | | | $ | 969,591 | | | $ | 991,473 | | |
| Interest-bearing liabilities: | | | | | | | | | | | |
| Deposits | | | $ | 702,783 | | | $ | 690,039 | | | $ | 646,656 | | | $ | 658,193 | | | $ | 675,901 | | |
| Borrowed funds | | | 119,281 | | | | 105,109 | | | | 108,234 | | | | 99,046 | | | | 99,251 | | |
| | | | Total interest-bearing liabilities | | | 822,064 | | | | 795,148 | | | | 754,890 | | | | 757,239 | | | | 775,152 | | |
| Demand deposits | | | 146,457 | | | | 143,140 | | | | 137,674 | | | | 132,316 | | | | 139,336 | | |
| Other liabilities | | | 25,811 | | | | 25,303 | | | | 25,964 | | | | 26,525 | | | | 25,278 | | |
| Shareholders' equity | | | 60,143 | | | | 56,618 | | | | 55,780 | | | | 53,511 | | | | 51,707 | | |
| | Total liabilities and shareholders' equity | | $ | 1,054,475 | | | $ | 1,020,209 | | | $ | 974,308 | | | $ | 969,591 | | | $ | 991,473 | | |
| | | | | | | | | | | | | |
| Yield/Cost | | |
| Earning assets: | |
| Loans: | | | |
| Interest and fees on loans - taxable | | | 3.90 | % | | | 3.86 | % | | | 3.86 | % | | | 3.88 | % | | | 3.99 | % | |
| Interest and fees on loans - tax-free | | | 4.72 | % | | | 4.67 | % | | | 4.69 | % | | | 4.78 | % | | | 4.95 | % | |
| | Total loans | | | 3.95 | % | | | 3.91 | % | | | 3.91 | % | | | 3.94 | % | | | 4.05 | % | |
| Securities: | | | | | | | | | | | | |
| Securities, taxable | | | 2.47 | % | | | 2.44 | % | | | 2.25 | % | | | 2.38 | % | | | 2.28 | % | |
| Securities, tax-free | | | 6.37 | % | | | 6.75 | % | | | 6.64 | % | | | 7.10 | % | | | 7.25 | % | |
| | Total interest and dividends on securities | | | 2.50 | % | | | 2.47 | % | | | 2.29 | % | | | 2.48 | % | | | 2.67 | % | |
| Interest on interest-bearing deposits in other banks | | | 0.24 | % | | | 0.33 | % | | | 0.23 | % | | | 0.24 | % | | | 0.25 | % | |
| | | | Total earning assets | | | 3.56 | % | | | 3.50 | % | | | 3.45 | % | | | 3.48 | % | | | 3.56 | % | |
| Interest-bearing liabilities: | | | | | | | | | | | |
| Interest on deposits | | | 0.36 | % | | | 0.39 | % | | | 0.40 | % | | | 0.42 | % | | | 0.44 | % | |
| Interest on borrowed funds | | | 1.22 | % | | | 1.29 | % | | | 2.72 | % | | | 2.96 | % | | | 3.14 | % | |
| | | | Total interest-bearing liabilities | | | 0.48 | % | | | 0.51 | % | | | 0.73 | % | | | 0.75 | % | | | 0.79 | % | |
| | | | Net interest spread | | | 3.08 | % | | | 2.98 | % | | | 2.72 | % | | | 2.73 | % | | | 2.77 | % | |
| | Net interest margin | | | 3.15 | % | | | 3.07 | % | | | 2.85 | % | | | 2.85 | % | | | 2.90 | % | |
| First National Community Bancorp, Inc. |
| Asset Quality Data |
| | | | | | | | | | | | | |
| | | | | | | | | | |
| | Dec 31, | | Sept 30, | | Jun 30, | | Mar 31, | | Dec 31, |
| (in thousands) | | | 2015 | | | | 2015 | | | | 2015 | | | | 2015 | | | | 2014 | |
| At period end | | | | | | | | | | |
| Non-accrual loans, including non-accruing troubled debt restructured loans (TDRs) | | $ | 3,788 | | | $ | 6,741 | | | $ | 5,757 | | | $ | 5,184 | | | $ | 5,522 | |
| Loans past due 90 days or more and still accruing | | | - | | | | - | | | | - | | | | - | | | | - | |
| | Total non-performing loans | | | 3,788 | | | | 6,741 | | | | 5,757 | | | | 5,184 | | | | 5,522 | |
| Other real estate owned (OREO) | | | 3,154 | | | | 1,618 | | | | 1,740 | | | | 2,369 | | | | 2,255 | |
| | Total non-performing loans and OREO | | $ | 6,942 | | | $ | 8,359 | | | $ | 7,497 | | | $ | 7,553 | | | $ | 7,777 | |
| | | | | | | | | | | | | |
| Accruing TDRs | | $ | 4,982 | | | $ | 5,065 | | | $ | 5,289 | | | $ | 5,807 | | | $ | 5,282 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| For the three months ended | | | | | | | | | | |
| Allowance for loan and lease losses | | | | | | | | | | |
| Beginning balance | | $ | 9,825 | | | $ | 10,328 | | | $ | 10,944 | | | $ | 11,520 | | | $ | 11,898 | |
| Loans charged-off | | | 198 | | | | 968 | | | | 1,192 | | | | 277 | | | | 427 | |
| Recoveries of charged-off loans | | | 168 | | | | 656 | | | | 231 | | | | 195 | | | | 289 | |
| Net charge-offs | | | 30 | | | | 312 | | | | 961 | | | | 82 | | | | 138 | |
| (Credit) provision for loan and lease losses | | | (1,005 | ) | | | (191 | ) | | | 345 | | | | (494 | ) | | | (240 | ) |
| Ending balance | | $ | 8,790 | | | $ | 9,825 | | | $ | 10,328 | | | $ | 10,944 | | | $ | 11,520 | |
| | | | | | | | | | | | | |
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