First Connecticut Bancorp, Inc. Reports Second Quarter 2014 Earnings of $0.15 Basic and $0.14 Diluted Earnings Per Share Driven by a 47% Increase in Linked Quarter Earnings

GlobeNewswire

FARMINGTON, Conn., July 24, 2014 (GLOBE NEWSWIRE) -- First Connecticut Bancorp, Inc. (the "Company") (FBNK), the holding company for Farmington Bank (the "Bank"), reported net income of $2.2 million, or $0.15 basic and $0.14 diluted earnings per share for the quarter ended June 30, 2014 compared to net income of $1.5 million, or $0.10 basic and diluted earnings per share in the linked quarter. Basic and diluted earnings per share were $0.05 for the second quarter of 2013.

"We are pleased with our second quarter results which reflect a significant lift in earnings, driven by our core banking activities of taking in deposits and making loans. The strategic investments made in our company over the past several years are beginning to be reflected in our earnings which have increased 47% linked quarter and 167% year over year. We continue to reward shareholders by growing tangible book value and paying dividends," stated John J. Patrick Jr., First Connecticut Bancorp's Chairman, President & CEO.

Financial Highlights

  • Net interest income increased $814,000 to $15.6 million in the second quarter of 2014 compared to $14.8 million in the linked quarter and increased $2.7 million or 21% compared to second quarter of 2013.
  • Strong organic loan growth continued during the quarter as total loans increased $76.2 million to $1.9 billion at June 30, 2014 and increased $343.0 million or 21% from a year ago.
  • Noninterest expense to average assets was 2.60% in the second quarter of 2014 compared to 2.63% in the linked quarter and 3.17% in the second quarter of 2013.
  • Tangible book value per share grew to $14.39 compared to $14.22 on a linked quarter basis and $13.81 at June 30, 2013.
  • Checking accounts grew by 3.2% or 1,321 net new accounts in the second quarter of 2014.
  • Asset quality remains stable as loan delinquencies 30 days and greater decreased slightly to 0.78% of total loans at June 30, 2014 compared to 0.80% of total loans at March 31, 2014. Non-accrual loans represented 0.75% of total loans compared to 0.69% of total loans on a linked quarter basis.
  • During the second quarter of 2014, the Company repurchased 131,296 shares of common stock at an average price per share of $15.49 at a total cost of $2.0 million. Repurchased shares will be held as treasury stock and will be available for general corporate purposes.
  • The Company paid a cash dividend of $0.04 per share on June 16, 2014, an increase of $0.01 compared to the linked quarter. This marks the eleventh consecutive quarter the Company has paid a dividend since it became a public company on June 29, 2011.

Second quarter 2014 compared with first quarter 2014

Net interest income

  • Net interest income increased $814,000 to $15.6 million in the second quarter of 2014 compared to the linked quarter due primarily to a $70.6 million increase in the average net loan balance and a 2 basis point increase in the net interest rate spread to 2.88%.
  • Net interest margin increased to 3.01% in the second quarter of 2014 compared to 2.99% in the first quarter of 2014.
  • The cost of interest-bearing liabilities declined to 57 basis points in the second quarter of 2014 compared to 58 basis points in the first quarter of 2014.

Provision for loan losses

  • Provision for loan losses was $410,000 for the second quarter of 2014 compared to $505,000 for the linked quarter.
  • Net charge-offs in the quarter were $128,000 or 0.03% to average loans (annualized) compared to $1.2 million or 0.26% to average loans (annualized) in the linked quarter.
  • The allowance for loan losses represented 0.92% of total loans at June 30, 2014 compared to 0.94% at March 31, 2014.

Noninterest income

  • Total noninterest income increased $304,000 to $2.1 million in the second quarter of 2014 compared to the linked quarter due to a $195,000 increase in net gain on loans sold and $126,000 increase in fees for customer services.

Noninterest expense

  • Noninterest expense increased $294,000 or 2% to $14.3 million in the second quarter of 2014 compared to the linked quarter as a result of increases in salaries and employee benefits and marketing expenses offset by decreases in occupancy expense and other operating expenses. Occupancy expenses were up in the first quarter of 2014 due to winter related expenses.

Income tax expense

  • Income tax expense was $776,000 in the second quarter of 2014 compared to $555,000 in the linked quarter.

Second quarter 2014 compared with second quarter 2013

Net interest income

  • Net interest income increased $2.7 million or 21% to $15.6 million compared to $12.9 million in the second quarter of 2013 primarily due to a $312.6 million increase in the average net loan balance despite a 14 basis point decrease in the yield on loans.
  • Net interest margin was 3.01% for both quarters. Excluding resort and prepayment penalty fee income for both quarters, the net interest margin would have been 2.97% and 2.98% in the second quarters of 2014 and 2013, respectively.
  • The cost of interest-bearing liabilities declined 19 basis points to 57 basis points in the second quarter of 2014 compared to 76 basis points in the second quarter of 2013 due primarily to a 12 basis point decrease in certificate of deposits and a decrease in Federal Home Loan Bank of Boston advance costs due to an increase in short-term advances which carry lower rates.

Provision for loan losses

  • Provision for loan losses was $410,000 for the second quarter of 2014 compared to $256,000 for the prior year quarter.
  • Net charge-offs in the quarter were $128,000 or 0.03% to average loans (annualized) compared to $83,000 or 0.02% to average loans (annualized) in the prior year quarter.
  • The allowance for loan losses represented 0.92% of total loans at June 30, 2014 compared to 1.09% at June 30, 2013.

Noninterest income

  • Total noninterest income decreased $933,000 to $2.1 million compared to the prior year quarter primarily due to a $1.3 million decrease in net gain on loans sold primarily as a result of a decrease in the dollar amount of loans sold, offset by a $220,000 increase in fees for customer services.

Noninterest expense

  • Noninterest expense decreased $301,000 or 2% to $14.3 million in the second quarter of 2014 compared to the prior year quarter.

Income tax expense

  • Income tax expense was $776,000 in the second quarter of 2014 compared to $256,000 in the prior year quarter.

Financial Condition

  • Total assets increased $422.3 million or 23% at June 30, 2014 to $2.3 billion compared to $1.8 billion at June 30, 2013 largely reflecting an increase in loans and securities.
  • Our investment portfolio totaled $173.5 million at June 30, 2014 compared to $115.8 million at June 30, 2013, an increase of $57.7 million.
  • Net loans increased $342.4 million at June 30, 2014 to $1.9 billion compared to $1.6 billion at June 30, 2013 due to our continued focus on commercial and residential lending, which combined, increased $356.1 million.
  • Deposits increased $178.5 million at June 30, 2014 to $1.6 billion compared to $1.5 billion at June 30, 2013, due to increases in municipal deposits, noninterest-bearing deposits and de novo branch openings as we continue to develop and grow relationships in the geographical areas we serve.
  • Federal Home Loan Bank of Boston advances increased $239.8 million to $291.0 million at June 30, 2014 compared to $51.3 million at June 30, 2013. Advances were used to support loan and securities growth.

Asset Quality

  • At June 30, 2014, the allowance for loan losses represented 0.92% of total loans and 122.25% of non-accrual loans, compared to 1.09% of total loans and 122.20% of non-accrual loans at June 30, 2013.
  • Loan delinquencies 30 days and greater decreased to 0.78% of total loans at June 30, 2014 compared to 0.95% of total loans at June 30, 2013.
  • Non-accrual loans represented 0.75% of total loans at June 30, 2014 compared to 0.89% of total loans at June 30, 2013.
  • Net charge-offs in the quarter were $128,000 or 0.03% to average loans (annualized) compared to $83,000 or 0.02% to average loans (annualized) in the prior year quarter.

Capital and Liquidity

  • The Company remained well-capitalized with an estimated total capital to risk-weighted asset ratio of 14.56% at June 30, 2014.
  • Tangible book value per share grew to $14.39 compared to $14.22 on a linked quarter basis and $13.81 at the quarter ended June 30, 2013.
  • During the second quarter of 2014, the Company repurchased 131,296 shares of common stock at an average price per share of $15.49 at a total cost of $2.0 million. Repurchased shares will be held as treasury stock and will be available for general corporate purposes.
  • At June 30, 2014, the Company continued to have adequate liquidity including significant unused borrowing capacity at the Federal Home Loan Bank of Boston and the Federal Reserve Bank, as well as access to funding through brokered deposits.

About First Connecticut Bancorp, Inc.

First Connecticut Bancorp, Inc. (FBNK) is a Maryland-chartered stock holding company that wholly owns Farmington Bank. Farmington Bank is a full-service, community bank with 22 branch locations throughout central Connecticut. Established in 1851, Farmington Bank is a diversified consumer and commercial bank with an ongoing commitment to contribute to the betterment of the communities in our region. For more information regarding the Bank's products and services and for First Connecticut Bancorp, Inc. investor relations information, please visit www.farmingtonbankct.com.

Conference Call

First Connecticut will host a conference call on Thursday, July 24, 2014 at 1:00pm Eastern Time to discuss second quarter results. Those wishing to participate in the call may dial-in to the call at 1-888-336-7151. The international dial-in number is 1-412-902-4177. A webcast of the call will be available on the Investor Relations Section of the Farmington Bank website for an extended period of time.

Forward Looking Statements

In addition to historical information, this earnings release may contain forward-looking statements for purposes of applicable securities laws. Any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements. Such forward-looking statements may or may not include words such as "believe," "expect," "anticipate," "estimate," and "intend" or future or conditional verbs such as "will," "would," "should," "could," or "may." Forward-looking statements are subject to numerous assumptions, risks and uncertainties. There are a number of important factors described in documents previously filed by the Company with the Securities and Exchange Commission, and other factors that could cause the Company's actual results to differ materially from those contemplated by such forward-looking statements. The Company undertakes no obligation to publicly release the results of any revisions to those forward-looking statements which may be made to reflect events or circumstances after the date of this release or to reflect the occurrence of unanticipated events.

Non-GAAP Financial Measures

In addition to evaluating the Company's financial performance in accordance with U.S. generally accepted accounting principles ("GAAP"), management routinely supplements their evaluation with an analysis of certain non-GAAP financial measures, such as core net income, the efficiency ratio and tangible book value per share. A reconciliation to the most directly comparable GAAP financial measure; net income in the case of core net income and the efficiency ratio and stockholders' equity in the case of tangible book value per share, appears in tabular form in the accompanying Reconciliation of Non-GAAP Financial Measures table.

We believe that providing certain non-GAAP financial measures provides investors with information useful in understanding our financial performance, our performance trends and financial position. Specifically, we provide measures based on what we believe are our operating earnings on a consistent basis and exclude non-core operating items which affect the GAAP reporting of results of operations. The Company believes that core net income is useful for both investors and management to understand the effects of items that are non-recurring and infrequent in nature. The Company believes that the efficiency ratio, which measures the costs expended to generate a dollar of revenue, is useful in the assessment of financial performance, including non-interest expense control. The Company believes that tangible book value per share is useful to evaluate the relative strength of the Company's capital position. The Company does not have goodwill and intangible assets for any of the periods presented. As such, tangible book value per common share is equal to book value per common share.

We utilize these measures for internal planning and forecasting purposes. These non-GAAP financial measures should not be considered a substitute for GAAP basis measures and results, and we strongly encourage investors to review our consolidated financial statements in their entirety and not to rely on any single financial measure.

First Connecticut Bancorp, Inc.




Selected Financial Data (Unaudited)







At or for the Three Months Ended
(Dollars in thousands, except per share data) June 30,
2014
March 31,
2014
December 31,
2013
September 30,
2013
June 30,
2013
Selected Financial Condition Data:










Total assets $ 2,267,709 $ 2,181,759 $ 2,110,028 $ 1,992,517 $ 1,845,440
Cash and cash equivalents 50,778 44,110 38,799 50,323 36,650
Securities held-to-maturity, at amortized cost 12,715 12,872 12,983 3,002 3,003
Securities available-for-sale, at fair value 160,784 163,232 150,886 120,382 112,801
Federal Home Loan Bank of Boston stock, at cost 17,724 13,137 13,136 8,383 8,383
Loans, net 1,930,502 1,854,497 1,800,987 1,712,507 1,588,080
Deposits 1,630,779 1,634,400 1,513,501 1,550,627 1,452,319
Federal Home Loan Bank of Boston advances 291,000 206,000 259,000 104,000 51,250
Total stockholders' equity 231,269 230,488 232,209 227,864 231,541
Allowance for loan losses 17,912 17,631 18,314 17,678 17,505
Non-accrual loans 14,652 12,974 14,800 13,887 14,325
Impaired loans 41,891 41,782 39,623 42,587 39,159
Loan delinquencies 30 days and greater 15,257 14,882 15,511 15,032 15,191






Selected Operating Data:










Interest income $ 17,854 $ 16,980 $ 16,697 $ 15,806 $ 15,336
Interest expense 2,290 2,230 2,366 2,523 2,449
Net interest income 15,564 14,750 14,331 13,283 12,887
Provision for loan losses 410 505 660 215 256
Net interest income after provision for loan losses 15,154 14,245 13,671 13,068 12,631
Noninterest income 2,066 1,762 2,183 2,182 2,999
Noninterest expense 14,254 13,960 14,398 14,110 14,555
Income before income taxes 2,966 2,047 1,456 1,140 1,075
Income tax expense 776 555 322 275 256






Net income $ 2,190 $ 1,492 $ 1,134 $ 865 $ 819






Performance Ratios (annualized):










Return on average assets 0.40% 0.28% 0.22% 0.18% 0.18%
Return on average equity 3.77% 2.56% 1.96% 1.49% 1.39%
Interest rate spread (1) 2.88% 2.86% 2.80% 2.77% 2.83%
Net interest rate margin (2) 3.01% 2.99% 2.94% 2.94% 3.01%
Non-interest expense to average assets 2.60% 2.63% 2.80% 2.95% 3.17%
Efficiency ratio (3) 80.85% 84.54% 87.19% 91.24% 91.62%
Average interest-earning assets to average interest-bearing liabilities 128.04% 128.59% 129.64% 130.77% 132.30%






Asset Quality Ratios:










Allowance for loan losses as a percent of total loans 0.92% 0.94% 1.01% 1.02% 1.09%
Allowance for loan losses as a percent of non-accrual loans 122.25% 135.89% 123.74% 127.30% 122.20%
Net charge-offs to average loans (annualized) 0.03% 0.26% 0.01% 0.01% 0.02%
Non-accrual loans as a percent of total loans 0.75% 0.69% 0.81% 0.80% 0.89%
Non-accrual loans as a percent of total assets 0.65% 0.59% 0.70% 0.70% 0.78%
Loan delinquencies 30 days and greater as a percent of total loans 0.78% 0.80% 0.85% 0.87% 0.95%






Per Share Related Data:










Basic earnings per share $ 0.15 $ 0.10 $ 0.07 $ 0.06 $ 0.05
Diluted earnings per share $ 0.14 $ 0.10 $ 0.07 $ 0.06 $ 0.05
Dividends declared per share $ 0.04 $ 0.03 $ 0.03 $ 0.03 $ 0.03
Tangible book value (4) $ 14.39 $ 14.22 $ 14.11 $ 13.88 $ 13.81
Common stock shares outstanding 16,072,637 16,203,933 16,457,642 16,416,427 16,763,516






(1) Represents the difference between the weighted-average yield on average interest-earning assets and the weighted-average cost of interest-bearing liabilities.
(2) Represents net interest income as a percent of average interest-earning assets.


(3) Represents noninterest expense divided by the sum of net interest income and noninterest income, adjusted for non-recurring items. See "Reconciliation of Non-GAAP Financial Measures" table.
(4) Represents ending stockholders' equity less goodwill and intangible assets (excluding mortgage servicing rights) divided by ending common shares outstanding. The Company does not have goodwill and intangible assets for any of the periods presented. See "Reconciliation of Non-GAAP Financial Measures" table.





First Connecticut Bancorp, Inc.



Selected Financial Data (Unaudited)










At or for the Three Months Ended






(Dollars in thousands) June 30,
2014
March 31,
2014
December 31,
2013
September 30,
2013
June 30,
2013
Capital Ratios:










Equity to total assets at end of period 10.20% 10.56% 11.01% 11.44% 12.55%
Average equity to average assets 10.59% 10.99% 11.23% 12.11% 12.84%
Total capital to risk-weighted assets 14.56% * 15.05% 15.50% 16.13% 17.49%
Tier I capital to risk-weighted assets 13.51% * 13.97% 14.36% 14.97% 16.26%
Tier I capital to total average assets 10.70% * 11.02% 11.47% 12.20% 12.93%
Total equity to total average assets 10.54% 10.85% 11.30% 11.90% 12.61%






* Estimated










Loans and Allowance for Loan Losses:










Real estate




Residential $ 749,124 $ 716,836 $ 693,046 $ 674,804 $ 625,345
Commercial 686,299 677,948 633,764 585,628 533,072
Construction 69,047 69,476 78,191 90,033 80,198
Installment 3,850 4,109 4,516 4,671 5,384
Commercial 277,483 244,075 252,032 213,103 199,328
Collateral 1,480 1,455 1,600 1,819 1,801
Home equity line of credit 156,625 153,619 151,606 147,026 144,548
Demand -- 124 85 -- --
Revolving credit 75 80 94 78 62
Resort 1,068 1,124 1,374 9,849 12,425
Total loans 1,945,051 1,868,846 1,816,308 1,727,011 1,602,163
Less:




Allowance for loan losses (17,912) (17,631) (18,314) (17,678) (17,505)
Net deferred loan costs 3,363 3,282 2,993 3,174 3,422
Loans, net $ 1,930,502 $ 1,854,497 $ 1,800,987 $ 1,712,507 $ 1,588,080






Deposits:










Noninterest-bearing demand deposits $ 315,916 $ 303,966 $ 308,459 $ 278,275 $ 275,781
Interest-bearing




NOW accounts 377,570 368,700 285,392 339,350 280,462
Money market 401,694 427,535 387,225 386,682 349,621
Savings accounts 202,970 199,532 193,937 187,040 191,688
Time deposits 332,629 334,667 338,488 359,280 354,767
Total interest-bearing deposits 1,314,863 1,330,434 1,205,042 1,272,352 1,176,538
Total deposits $ 1,630,779 $ 1,634,400 $ 1,513,501 $ 1,550,627 $ 1,452,319




First Connecticut Bancorp, Inc.


Consolidated Statements of Condition (Unaudited)







June 30,
2014
March 31,
2014
December 31,
2013
(Dollars in thousands)


Assets


Cash and cash equivalents $ 50,778 $ 44,110 $ 38,799
Securities held-to-maturity, at amortized cost 12,715 12,872 12,983
Securities available-for-sale, at fair value 160,784 163,232 150,886
Loans held for sale 4,576 3,035 3,186
Loans, net 1,930,502 1,854,497 1,800,987
Premises and equipment, net 20,072 20,436 20,619
Federal Home Loan Bank of Boston stock, at cost 17,724 13,137 13,136
Accrued income receivable 5,133 4,973 4,917
Bank-owned life insurance 39,120 38,838 38,556
Deferred income taxes 14,756 14,603 14,884
Prepaid expenses and other assets 11,549 12,026 11,075
Total assets $ 2,267,709 $ 2,181,759 $ 2,110,028




Liabilities and Stockholders' Equity


Deposits


Interest-bearing $ 1,314,863 $ 1,330,434 $ 1,205,042
Noninterest-bearing 315,916 303,966 308,459

1,630,779 1,634,400 1,513,501
Federal Home Loan Bank of Boston advances 291,000 206,000 259,000
Repurchase agreement borrowings 21,000 21,000 21,000
Repurchase liabilities 55,326 52,893 50,816
Accrued expenses and other liabilities 38,335 36,978 33,502
Total liabilities 2,036,440 1,951,271 1,877,819




Commitments and contingencies -- -- --




Stockholders' Equity


Common stock 181 181 181
Additional paid-in-capital 177,431 176,602 175,766
Unallocated common stock held by ESOP (13,218) (13,485) (13,747)
Treasury stock, at cost (28,577) (26,543) (22,599)
Retained earnings 99,386 97,830 96,832
Accumulated other comprehensive loss (3,934) (4,097) (4,224)
Total stockholders' equity 231,269 230,488 232,209
Total liabilities and stockholders' equity $ 2,267,709 $ 2,181,759 $ 2,110,028





First Connecticut Bancorp, Inc.



Consolidated Statements of Income (Unaudited)










Three Months Ended Six Months Ended

June 30, March 31, June 30, June 30,
(Dollars in thousands, except per share data) 2014 2014 2013 2014 2013
Interest income




Interest and fees on loans




Mortgage $ 13,875 $ 13,428 $ 11,872 $ 27,303 $ 23,340
Other 3,573 3,208 3,233 6,781 6,547
Interest and dividends on investments




United States Government and agency obligations 218 189 102 407 241
Other bonds 81 58 59 139 118
Corporate stocks 105 93 64 198 126
Other interest income 2 4 6 6 11
Total interest income 17,854 16,980 15,336 34,834 30,383
Interest expense




Deposits 1,711 1,694 1,827 3,405 3,532
Interest on borrowed funds 368 319 401 687 870
Interest on repo borrowings 179 177 180 356 351
Interest on repurchase liabilities 32 40 41 72 91
Total interest expense 2,290 2,230 2,449 4,520 4,844
Net interest income 15,564 14,750 12,887 30,314 25,539
Provision for loan losses 410 505 256 915 655
Net interest income after provision for loan losses 15,154 14,245 12,631 29,399 24,884
Noninterest income




Fees for customer services 1,317 1,191 1,097 2,508 2,079
Gain on sale of investments -- -- 36 -- 36
Net gain on loans sold 317 122 1,589 439 3,619
Brokerage and insurance fee income 49 44 41 93 73
Bank owned life insurance income 281 282 303 563 712
Other 102 123 (67) 225 128
Total noninterest income 2,066 1,762 2,999 3,828 6,647
Noninterest expense




Salaries and employee benefits 8,638 8,288 8,555 16,926 17,589
Occupancy expense 1,209 1,349 1,126 2,558 2,366
Furniture and equipment expense 1,106 1,018 1,099 2,124 2,117
FDIC assessment 321 328 311 649 602
Marketing 509 378 610 887 1,204
Other operating expenses 2,471 2,599 2,854 5,070 5,376
Total noninterest expense 14,254 13,960 14,555 28,214 29,254
Income before income taxes 2,966 2,047 1,075 5,013 2,277
Income tax expense 776 555 256 1,331 572
Net income $ 2,190 $ 1,492 $ 819 $ 3,682 $ 1,705






Earnings per share:




Basic $ 0.15 $ 0.10 $ 0.05 $ 0.24 $ 0.11
Diluted 0.14 0.10 0.05 0.24 0.11
Weighted average shares outstanding:




Basic 14,601,416 14,820,700 15,240,618 14,710,453 15,587,380
Diluted 14,707,472 14,920,837 15,240,618 14,813,566 15,587,380









First Connecticut Bancorp, Inc.







Consolidated Average Balances, Yields and Rates (Unaudited)














For The Three Months Ended

June 30, 2014 March 31, 2014 June 30, 2013

Average
Balance
Interest and
Dividends
Yield/
Cost
Average
Balance
Interest and
Dividends
Yield/
Cost
Average
Balance
Interest and
Dividends
Yield/
Cost
(Dollars in thousands)








Interest-earning assets:








Loans, net $ 1,890,132 $ 17,448 3.70% $ 1,819,567 $ 16,636 3.71% $1,577,559 $ 15,105 3.84%
Securities 167,250 355 0.85% 160,663 302 0.76% 115,280 216 0.75%
Federal Home Loan Bank of Boston stock 14,744 49 1.33% 13,136 38 1.17% 8,383 9 0.43%
Federal funds and other earning assets 3,567 2 0.22% 5,858 4 0.28% 14,317 6 0.17%
Total interest-earning assets 2,075,693 17,854 3.45% 1,999,224 16,980 3.44% 1,715,539 15,336 3.59%
Noninterest-earning assets 118,056

125,272

120,888

Total assets $ 2,193,749

$ 2,124,496

$1,836,427











Interest-bearing liabilities:








NOW accounts $ 332,597 $ 185 0.22% $ 352,428 $ 197 0.23% $ 266,905 $ 151 0.23%
Money market 414,774 754 0.73% 409,161 684 0.68% 354,914 725 0.82%
Savings accounts 204,217 42 0.08% 193,142 55 0.12% 184,307 73 0.16%
Certificates of deposit 335,391 730 0.87% 336,286 758 0.91% 354,381 878 0.99%
Total interest-bearing deposits 1,286,979 1,711 0.53% 1,291,017 1,694 0.53% 1,160,507 1,827 0.63%
Advances from the Federal Home Loan Bank 259,980 368 0.57% 181,522 319 0.71% 68,660 401 2.34%
Repurchase agreement borrowings 21,000 179 3.42% 21,000 177 3.42% 21,000 180 3.44%
Repurchase liabilities 53,159 32 0.24% 61,187 40 0.27% 46,539 41 0.35%
Total interest-bearing liabilities 1,621,118 2,290 0.57% 1,554,726 2,230 0.58% 1,296,706 2,449 0.76%
Noninterest-bearing deposits 303,473

299,620

257,670

Other noninterest-bearing liabilities 36,891

36,625

46,233

Total liabilities 1,961,482

1,890,971

1,600,609

Stockholders' equity 232,267

233,525

235,818

Total liabilities and stockholders' equity $ 2,193,749

$ 2,124,496

$1,836,427











Net interest income
$ 15,564

$ 14,750

$ 12,887
Net interest rate spread (1)

2.88%

2.86%

2.83%
Net interest-earning assets (2) $ 454,575

$ 444,498

$ 418,833

Net interest margin (3)

3.01%

2.99%

3.01%
Average interest-earning assets to average interest-bearing liabilities
128.04%

128.59%

132.30%










(1) Net interest rate spread represents the difference between the yield on average interest-earning assets and the cost of average interest-bearing liabilities.
(2) Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities.


(3) Net interest margin represents net interest income divided by average total interest-earning assets.









First Connecticut Bancorp, Inc.




Consolidated Average Balances, Yields and Rates (Unaudited)









For The Six Months Ended June 30,

2014 2013

Average
Balance
Interest and
Dividends
Yield/Cost Average
Balance
Interest and
Dividends
Yield/Cost
(Dollars in thousands)





Interest-earning assets:





Loans, net $ 1,855,044 $ 34,084 3.71% $ 1,550,337 $ 29,887 3.89%
Securities 163,975 657 0.81% 120,783 468 0.78%
Federal Home Loan Bank of Boston stock 13,944 87 1.26% 8,595 17 0.40%
Federal funds and other earning assets 3,580 6 0.34% 12,675 11 0.18%
Total interest-earning assets 2,036,543 34,834 3.45% 1,692,390 30,383 3.62%
Noninterest-earning assets 122,770

121,227

Total assets $ 2,159,313

$ 1,813,617








Interest-bearing liabilities:





NOW accounts $ 342,458 $ 382 0.22% $ 250,489 $ 286 0.23%
Money market 411,983 1,438 0.70% 345,486 1,311 0.77%
Savings accounts 198,710 97 0.10% 177,825 158 0.18%
Certificates of deposit 335,836 1,488 0.89% 355,396 1,777 1.01%
Total interest-bearing deposits 1,288,987 3,405 0.53% 1,129,196 3,532 0.63%
Federal Home Loan Bank of Boston advances 220,968 687 0.63% 74,531 870 2.35%
Repurchase agreement borrowings 21,000 356 3.42% 21,000 351 3.37%
Repurchase liabilities 57,151 72 0.25% 51,031 91 0.36%
Total interest-bearing liabilities 1,588,106 4,520 0.57% 1,275,758 4,844 0.77%
Noninterest-bearing deposits 301,557

248,804

Other noninterest-bearing liabilities 36,758

48,979

Total liabilities 1,926,421

1,573,541

Stockholders' equity 232,892

240,076

Total liabilities and stockholders' equity $ 2,159,313

$ 1,813,617








Net interest income
$ 30,314

$ 25,539
Net interest rate spread (1)

2.88%

2.85%
Net interest-earning assets (2) $ 448,437

$ 416,632

Net interest margin (3)

3.00%

3.04%
Average interest-earning assets to average interest-bearing liabilities
128.24%

132.66%













(1) Net interest rate spread represents the difference between the yield on average interest-earning assets and the cost of average interest-bearing liabilities.
(2) Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities.
(3) Net interest margin represents net interest income divided by average total interest-earning assets.


First Connecticut Bancorp, Inc.
Reconciliation of Non-GAAP Financial Measures (Unaudited)
The table below presents a reconciliation of non-GAAP financial measures with financial measures defined by GAAP for the three months ended June 30, 2014, March 31, 2014, December 31, 2013, September 30, 2013 and June 30, 2013. The Company believes the use of these non-GAAP financial measures provides additional clarity in assessing the results of the Company.







At or for the Three Months Ended






(Dollars in thousands, except per share data) June 30,
2014
March 31,
2014
December 31,
2013
September 30,
2013
June 30,
2013
Net Income $ 2,190 $ 1,492 $ 1,134 $ 865 $ 819
Adjustments:




Less: Prepayment penalty fees (185) -- (144) -- (20)
Less: Net gain on sales of investments -- -- -- (304) (36)
Total core adjustments before taxes (185) -- (144) (304) (56)
Tax benefit - 34% rate 63 -- 49 103 19
Total core adjustments after taxes (122) -- (95) (201) (37)
Total core net income $ 2,068 $ 1,492 $ 1,039 $ 664 $ 782












Total net interest income $ 15,564 $ 14,750 $ 14,331 $ 13,283 $ 12,887
Less: Prepayment penalty fees (185) -- (144) -- (20)
Total core net interest income $ 15,379 $ 14,750 $ 14,187 $ 13,283 $ 12,867












Total noninterest income $ 2,066 $ 1,762 $ 2,183 $ 2,182 $ 2,999
Less: Net gain on sales of investments -- -- -- (304) (36)
Total core noninterest income $ 2,066 $ 1,762 $ 2,183 $ 1,878 $ 2,963












Total noninterest expense $ 14,254 $ 13,960 $ 14,398 $ 14,110 $ 14,555
Total core noninterest expense $ 14,254 $ 13,960 $ 14,398 $ 14,110 $ 14,555






Core earnings per common share, diluted $ 0.14 $ 0.10 $ 0.07 $ 0.04 $ 0.05






Core return on assets (annualized) 0.38% 0.28% 0.20% 0.14% 0.17%
Core return on equity (annualized) 3.56% 2.56% 1.80% 1.14% 1.33%
Efficiency ratio (1) 81.71% 84.54% 87.95% 93.07% 91.95%






Tangible book value (2) $ 14.39 $ 14.22 $ 14.11 $ 13.88 $ 13.81






(1) Represents core noninterest expense divided by the sum of core net interest income and core noninterest income.
(2) Represents ending stockholders' equity less goodwill and intangible assets (excluding mortgage servicing rights) divided by ending common shares outstanding. The Company does not have goodwill and intangible assets for any of the periods presented.

Contact:
Jennifer H. Daukas
Investor Relations Officer
One Farm Glen Boulevard, Farmington, CT 06032
P 860-284-6359
F 860-409-3316
jdaukas@farmingtonbankct.com

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