8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

____________

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of report (Date of earliest event reported)                       October 22,2015

1ST CONSTITUTION BANCORP

(Exact Name of Registrant as Specified in Charter)

New Jersey	000-32891	22-3665653
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification Number)

2650 Route 130, P.O. Box 634, Cranbury, New Jersey	08512
(Address of Principal Executive Offices)	(Zip Code)

Registrant’s telephone number, including area code              (609) 655-4500

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o      Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o      Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o      Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o      Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02               Results of Operations and Financial Condition.

On October 22, 2015, 1st Constitution Bancorp issued a press release reporting earnings and other financial results for its third quarter and nine months ended September 30, 2015.  A copy of the press release is attached and is being furnished as Exhibit 99.

Item 9.01.              Financial Statements and Exhibits.

(d)           Exhibits.

99           Press Release of 1st Constitution Bancorp, dated October 22, 2015

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	1ST CONSTITUTION BANCORP
Date:           October 22, 2015	By:	/s/ STEPHEN J. GILHOOLY
	Name:	Stephen J. Gilhooly
	Title:	Chief Financial Officer

EXHIBIT INDEX

Exhibit No.	Title
99	Press Release of 1st Constitution Bancorp, dated October 22,2015

EX-99

Exhibit 99

CONTACT:	Robert F. Mangano	Stephen J. Gilhooly
	President & Chief Executive Officer	Sr. Vice President & Chief Financial Officer
	(609) 655-4500	(609) 655-4500

PRESS RELEASE – FOR IMMEDIATE RELEASE

1ST CONSTITUTION BANCORP

REPORTS THIRD QUARTER 2015 RESULTS

Cranbury NJ – October 22, 2015 –– 1ST Constitution Bancorp (NASDAQ: FCCY), the holding company (the “Company”) for 1ST Constitution Bank (the “Bank”), today reported net income for the third quarter of 2015 of $2.5 million, a 15% increase, compared to net income of $2.1 million for the third quarter of 2014. Net income per diluted share for the third quarter of 2015 was $0.32, a 14% increase, compared to net income per diluted share of $0.28 for the third quarter of 2014.

Return on average assets was 0.98% and return on average equity was 10.56% for the third quarter of 2015 compared to return on average assets and return on average equity of 0.88% and 10.25%, respectively, for the third quarter of 2014.

The significant increase in net income for the third quarter of 2015 compared to net income for the third quarter of 2014 was due in part to the $716,000 increase in net interest income to $9.7 million, which was driven by the growth of the Bank’s loan portfolio in 2015. Due to stable loan quality and a moderate level of net charge-offs during the third quarter of 2015, the provision for loan losses declined to $100,000 compared to $650,000 in the third quarter of 2014. Lower non-interest income and higher non-interest expenses in the third quarter of 2015 compared to the third quarter of 2014 partially offset the higher net interest income and lower provision for loan losses for the third quarter of 2015.

For the nine months ended September 30, 2015, the Company reported net income of $7.0 million, a 28% increase, compared to Adjusted Net Income of $5.5 million for the nine months ended September 30, 2014. Net income per diluted share was $0.92 for the nine months ended September 30, 2015, a 26% increase, compared to Adjusted Net Income Per Diluted Share of $0.73 for the nine months ended September 30, 2014. Net income and net income per diluted share as reported for the nine months ended September 30, 2014 were $2.3 million and $0.31, respectively.

Adjusted Net Income excludes the after-tax effect of merger related expenses that were incurred in the first and second quarters of 2014 in connection with the merger of Rumson-Fair Haven Bank and Trust Company (“Rumson”) with and into the Bank on February 7, 2014 and the provision for loan losses related to the full charge-off of a loan participation due to fraudulent misrepresentations by the borrower and its principals recorded in the second quarter of 2014. Adjusted Net Income, Adjusted Net Income Per Diluted Share, Adjusted Return on Assets and Adjusted Return on Equity are non-GAAP measures. A reconciliation of these non-GAAP measures to the reported net income, net income per diluted share, return on average assets and return on average equity is included in this release.

Third Quarter Highlights

· Net interest income was $9.7 million in the third quarter of 2015 compared to $9.4 million in the second quarter of 2015 and $8.9 million in the third quarter of 2014. The net interest margin for each of these periods was 4.19%, 4.19% and 4.07%, respectively.

· During the third quarter of 2015, the total loan portfolio decreased $49.1 million, or 6.5%, to $709.4 million and mortgage warehouse lines outstanding decreased $46.8 million to $232.9 million at September 30, 2015, reflecting total pay-downs on lines that exceeded the total loan fundings during the quarter. Approximately 67% of the $1.1 billion of mortgage warehouse funding activity during the third quarter were for home purchases. The loan to asset ratio was 72% at September 30, 2015 compared to 72% at June 30, 2015, 68% at December 31, 2014 and 64% at September 30, 2014.

· The provision for loan losses was $100,000 for the third quarter of 2015 and reflected the Bank’s stable loan quality trends, the moderate level of net-charge-offs and management’s assessment of strengthening economic conditions in the Bank’s markets.

· SBA loan sales were $2.2 million and generated gains on sales of loans of $193,000, and SBA commercial loan originations were $850,000 during the third quarter of 2015.

· During the third quarter of 2015, the Bank’s residential mortgage banking operation originated $22.9 million of residential mortgages and sold $38.0 million of residential mortgage loans, which generated gains from the sales of loans of $262,000. At September 30, 2015, the pipeline of residential mortgage loans in process was $41.5 million.

· The Company’s efficiency ratio for the third quarter of 2015 was 64.0% compared to 67.4% for the second quarter of 2015 and 62.8% for the third quarter of 2014.

Robert F. Mangano, President and Chief Executive Officer, stated “We focused on enhancing our operational and financial performance and we are pleased with our progress over the last five quarters. Our net interest margin, driven primarily by the increase in mortgage warehouse lending, expanded to 4.19%, which generated an increase in ROA and ROE to 0.98% and 10.6%, respectively in the third quarter this year. Our commercial, construction, SBA and residential lending groups also contributed to our increased profitability. As we enter the fourth quarter, we anticipate that the financing of home purchase activity within our residential mortgage banking operation and our mortgage warehouse lending operation will slow due to seasonal factors.”

Discussion of Financial Results

Net interest income was $9.7 million for the third quarter ended September 30, 2015, an increase of $252,000, or 2.7%, compared to $9.4 million for the second quarter of 2015 and an increase of $716,000, or 8.0%, compared to $8.9 million for the third quarter ended September 30, 2014. The $716,000 increase compared to the third quarter of 2014 was due primarily to the increase in the loan portfolio in 2015 and the higher proportion of average loans to average assets, which generated the higher yield on earning assets of 4.68% compared to 4.58% for the third quarter of 2014.

Interest expense on average interest bearing liabilities was 0.63% for the third quarter of 2015 compared to 0.64% for the second quarter of 2015 and 0.66% for the third quarter of 2014.

A provision for loan losses of $100,000 was recorded for the third quarter of 2015 compared to no provision for loan losses for the second quarter of 2015 and $650,000 for the third quarter of 2014. The $100,000 provision for loan losses for the third quarter of 2015 reflected the moderate level of net charge-offs, the Bank’s stable loan quality trends over the last five quarters, the level of estimated loss in the loan portfolio and management’s assessment of the strengthening economic conditions in the Bank’s markets.

Non-interest income was $1.1 million for the third quarter of 2015, a decrease of $519,000, or 32.1%, compared to $1.6 million for the second quarter of 2015, and a decrease of $383,000, or 25.9%, compared to $1.5 million for the third quarter of 2014. Lower gains from the sales of SBA and residential mortgage loans of $377,000 and lower customer service fees in the third quarter of 2015 of $143,000 were the principal reasons for the decrease in non-interest income compared to the second quarter of 2015. Gains from the sale of SBA and residential mortgage loans in the third quarter of 2015 were $101,000 lower than the gains from the sales of these loans in the third quarter of 2014 and customer service fees were $282,000 lower due to lower customer activity.

Non-interest expenses were $7.1 million for the third quarter of 2015 and decreased $550,000, or 7.2%, compared to $7.6 million for the second quarter of 2015 and  increased  $328,000, or 4.9%, compared to $6.7 million for the third quarter of 2014. Non-interest expenses in the third quarter of 2015 declined compared to the second quarter of 2015 due primarily to lower OREO expenses of $119,000 and lower professional fees of $390,000, compared to OREO expenses of $416,000 and professional fees of $743,000. Non-interest expenses increased in the third quarter of 2015 compared to the third quarter of 2014 due to a $123,000, or 3.1%, increase in employee compensation and benefits expense and additional operating costs due to the growth and expansion of the Bank’s operations.

Income taxes were $1.1 million, which resulted in an effective tax rate of 31.8% for the third quarter of 2015 compared to income taxes of $1.1 million and an effective tax rate of 32.4% for the second quarter of 2015 and income taxes of $917,000 and an effective tax rate of 30.0% for the third quarter of 2014. The increase in income taxes was due to the higher amount of pre-tax income in the third quarter of 2015 compared to the third quarter of 2014.

At September 30, 2015, the allowance for loan losses was $7.1 million, a $207,000 increase from the allowance for loan losses at December 31, 2014. As a percentage of total loans, the allowance was 1.01% at the end of the third quarter of 2015 compared to 1.06% at year-end 2014.  With respect to the acquired Rumson loans of approximately $94 million at September 30, 2015, the accretable general credit discount was $778,000 and the non-accretable credit discount was $546,000.

Total assets increased approximately $23 million to $980 million at September 30, 2015 from $957 million at December 31, 2014 due principally to the $55.1 million increase in loans. The increase in loans was funded primarily by a $40.1 million increase in FHLB borrowings. Total portfolio loans at September 30, 2015 were $709.4 million compared to $654.3 million at December 31, 2014. Total investment securities at September 30, 2015 were $195.6 million, a decrease from $223.8 million at December 31, 2014. Total deposits at September 30, 2015 were $793.8 million compared to $817.8 million at December 31, 2014. The decrease in deposits was due primarily to the outflow of municipal deposits.

Regulatory capital ratios continue to reflect a strong capital position. Under the new regulatory capital standards (Basel III) that became effective on January 1, 2015, the Company’s common equity Tier 1 to risk based assets (“CET1”) ratio, total risk-based capital ratio, Tier I capital ratio and Leverage ratio were 9.56%, 12.49%, 11.66% and 10.12%, respectively, at September 30, 2015. The Bank’s CET1 ratio, total risk-based capital ratio, Tier 1 capital ratio and Leverage ratio were 11.38%, 12.21%, 11.38% and 9.88%, respectively, at September 30, 2015. The Company and the Bank are considered “well capitalized” under the new capital standards.

Asset Quality

Net charge-offs during the third quarter of 2015 were $318,000. Non-accrual loans were $3.6 million at September 30, 2015 compared to $4.5 million at December 31, 2014. The allowance for loan losses was 196% of non-accrual loans at September 30, 2015 compared to 153% of non-accrual loans at December 31, 2014.

Overall, the Company observed stable trends in loan quality with net charge-offs of $318,000 during the third quarter of 2015, non-performing loans to total loans of 0.62% and non-performing assets to total assets of 0.95% at September 30, 2015.

OREO at September 30, 2015 was comprised of three properties that totaled $4.9 million compared to $5.7 million at December 31, 2014.

About 1st Constitution Bancorp

1ST Constitution Bancorp, through its primary subsidiary, 1ST Constitution Bank, operates 19 branch banking offices in Cranbury (2), Fort Lee, Hamilton, Hightstown, Hillsborough, Hopewell, Jamesburg, Lawrenceville, Perth Amboy, Plainsboro, Rocky Hill, West Windsor, Princeton, Rumson, Fair Haven, Shrewsbury, Little Silver  and Asbury Park, New Jersey.

1ST Constitution Bancorp is traded on the Nasdaq Global Market under the trading symbol “FCCY” and can be accessed through the Internet at www.1STCONSTITUTION.com

The foregoing contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are not historical facts and include expressions about management’s confidence and strategies and management’s expectations about new and existing programs and products, relationships, opportunities, taxation, technology and market conditions. These statements may be identified by such forward-looking terminology as “expect,” “look,” “believe,” “anticipate,” “may,” “will,” or similar statements or variations of such terms. Actual results may differ materially from such forward-looking statements. Factors that may cause results to differ materially from such forward-looking statements include, but are not limited to, changes in the direction of the economy in New Jersey, the direction of interest rates, effective income tax rates, loan prepayment assumptions, continued levels of loan quality and origination volume, continued relationships with major customers including sources for loans, a higher level of net loan charge-offs and delinquencies than anticipated, bank regulatory rules, regulations or policies that restrict or direct certain actions, the adoption, interpretation and implementation of new or pre-existing accounting pronouncements, a change in legal and regulatory barriers including issues related to compliance with anti-money laundering and bank secrecy act laws, as well as the effects of general economic conditions and legal and regulatory barriers and structure. 1ST Constitution Bancorp assumes no obligation for updating any such forward-looking statements at any time, except as required by law.

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1st Constitution Bancorp

Selected Consolidated Financial Data

(Unaudited)

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
($ in thousands, except per share amounts)	2015			2014			2015			2014
Income Statement Data :
Interest income	$	10,832		$	10,133		$	31,083		$	27,693
Interest expense		1,169			1,186			3,466			3,471
Net interest income		9,663			8,947			27,617			24,222
Provision for loan losses		100			650			600			5,250
Net interest income after provision for loan losses		9,563			8,297			27,017			18,972
Non-interest income		1,099			1,482			4,602			4,379
Non-interest expenses		7,052			6,724			21,267			20,776
Income before income taxes		3,610			3,055			10,352			2,575
Income tax expense		1,148			917			3,315			235
Net income	$	2,462		$	2,138		$	7,037		$	2,340
Per Common Share Data: (1)
Earnings per common share - Basic	$	0.33		$	0.29		$	0.94		$	0.32
Earnings per common share - Diluted		0.32		$	0.28			0.92		$	0.31
Tangible book value per common share at the period-end								10.74			9.80
Book value per common share at the period end								12.51			11.63
Average common shares outstanding:
Basic		7,543,040			7,475,069			7,517,828			7,364,465
Diluted		7,695,082			7,603,626			7,674,946			7,498,647
Adjusted Net Income  (2)
Net Income		2,462			2,138			7,037			2,340
Adjusted Expenses After-tax		-			-			-			3,157
		2,462			2,138			7,037			5,497
Performance Ratios / Data:
Return on average assets (2)		0.98	%		0.88	%		0.96	%		0.78	%
Return on average equity (2)		10.56	%		10.25	%		10.46	%		9.16	%
Net interest income (tax-equivalent basis) (3)	$	9,914		$	9,224		$	28,389		$	25,060
Net interest margin (tax-equivalent basis) (4)		4.19	%		4.07	%		4.11	%		3.84	%
Efficiency ratio (5)		64.0	%		62.8	%		64.5	%		65.4	%
							September 30,			December 31,
							2015			2014
Balance Sheet Data:
Total Assets							$	980,450		$	956,780
Investment Securities								195,581			223,799
Total loans								709,399			654,297
Loans held for sale								5,707			8,372
Allowance for  loan losses								(7,132	)		(6,925	)
Goodwill and other intangible assets								13,391			13,712
Deposits								793,842			817,761
Borrowings								65,187			25,107
Shareholders' Equity								94,432			87,110
Asset Quality Data:
Loans past due over 90 days and still accruing							$	764		$	317
Non-accrual loans								3,632			4,523
OREO property								4,927			5,710
Other repossessed assets								-			66
Total non-performing assets							$	9,323		$	10,616
Net charge-offs							$	(319	)	$	(1,189	)
Allowance for loan losses to total loans								1.01	%		1.06	%
Non-performing loans to total loans								0.62	%		0.74	%
Non-performing assets to total assets								0.95	%		1.11	%
Capital Ratios:
1st Constitution Bancorp
Common equity to risk weighted assets ("CET 1")								9.56	%	NA
Tier 1 capital to average assets (leverage ratio)								10.12	%		9.35	%
Tier 1 capital to risk weighted assets								11.66	%		11.42	%
Total capital to risk weighted assets								12.49	%		12.33	%
1st Constitution Bank
Common equity to risk weighted assets ("CET 1")								11.38	%	NA
Tier 1 capital to average assets (leverage ratio)								9.88	%		9.11	%
Tier 1 capital to risk weighted assets								11.38	%		11.13	%
Total capital to risk weighted assets								12.21	%		12.04	%

(1) Includes the effect of the 5% stock dividend declared February 20, 2015 to shareholders of record on March 16, 2015 and paid April 6, 2015.

(2) The Company used the non-GAAP financial measures, Adjusted Net Income (Loss) and Adjusted Net Income (Loss) per diluted share, because the Company believes that it is useful for the users of the financial information to understand the effect on net income of the merger related expenses incurred in the merger with Rumson and the large provision for loan losses recorded as a result of the fraudulent misrepresentations by a borrower and its principals. Management believes that these non-GAAP financial measures improve the comparability of the current period results with the results of prior periods. The Company cautions that the non-GAAP financial measures should be considered in addition to, but not as a substitute for the Company's GAAP results.

(3) The tax equivalent adjustments were $251 and  $277 for the three months ended September 30, 2015 and September 30, 2014, respectively.

(4) Represents net interest income on a taxable equivalent basis as a percent of average interest earning assets.

(5) Represents non-interest expenses, excluding merger-related expenses, divided by the sum of net interest income on a taxable equivalent basis and non-interest income.

1st Constitution Bancorp

Average Balance Sheets with Resultant Interest and Rates

	Three months ended September 30, 2015								Three months ended September 30, 2014
(yields on a tax-equivalent basis)	Average					Average			Average					Average
	Balance			Interest		Yield			Balance			Interest		Yield
Assets
Federal Funds Sold/Short Term Investments	$	14,827,056		$	7,434		0.20	%	$	18,858,143		$	10,183		0.21	%
Investment Securities :
U.S.Treasury Bonds		0			0		-			0			0		-
Taxable		122,093,749			776,219		2.54	%		168,912,644			961,043		2.28	%
Tax-exempt		76,971,556			772,898		4.02	%		90,191,047			852,447		3.78	%
Total		199,065,305			1,549,117		3.11	%		259,103,691			1,813,490		2.80	%
Loan Portfolio:
Construction		93,952,844			1,470,231		6.21	%		84,776,306			1,408,170		6.59	%
Residential real estate		41,827,836			444,764		4.22	%		49,466,308			524,861		4.21	%
Home Equity		19,684,595			272,243		5.49	%		23,097,660			356,320		6.12	%
Commercial and commercial real estate		293,937,584			4,314,060		5.82	%		286,369,323			4,306,422		5.97	%
Mortgage warehouse lines		243,273,189			2,634,426		4.30	%		155,715,974			1,689,856		4.31	%
Installment		516,182			5,345		4.11	%		417,619			5,469		5.20	%
All Other Loans		33,692,214			385,518		4.54	%		24,885,673			294,851		4.70	%
Total		726,884,443			9,526,587		5.20	%		624,728,863			8,585,949		5.45	%
Total Interest-Earning Assets		940,776,804			11,083,138		4.68	%		902,690,698			10,409,622		4.58	%
Allowance for Loan Losses		(7,665,137	)							(7,542,268	)
Cash and Due From Bank		5,806,826								13,872,593
Other Assets		62,093,731								58,467,465
Total Assets	$	1,001,012,223							$	967,488,488
Liabilities and Shareholders' Equity :
Interest-Bearing Liabilities:
Money Market and NOW Accounts	$	295,478,919		$	248,396		0.33	%	$	290,077,290		$	244,485		0.33	%
Savings Accounts		194,948,382			231,196		0.47	%		196,936,099			226,556		0.46	%
Certificates of Deposit		170,499,683			441,080		1.03	%		172,114,159			484,203		1.12	%
Other Borrowed Funds		52,082,010			158,943		1.21	%		35,420,518			144,006		1.61	%
Trust Preferred Securities		18,557,000			89,433		1.89	%		18,557,000			86,535		1.82	%
Total Interest-Bearing Liabilities		731,565,994			1,169,049		0.63	%		713,105,065			1,185,785		0.66	%
Net Interest Spread							4.05	%							3.92	%
Demand Deposits		167,525,970								165,617,916
Other Liabilities		9,405,949								6,011,491
Total Liabilities		908,497,914								884,734,472
Shareholders' Equity		92,514,310								82,754,016
Total Liabilities and Shareholders' Equity	$	1,001,012,223							$	967,488,488
Net Interest Margin				$	9,914,089		4.19	%				$	9,223,837		4.07	%

1st Constitution Bancorp

Average Balance Sheets with Resultant Interest and Rates

	Nine months ended September 30, 2015								Nine months ended September 30, 2014
	Average					Average			Average					Average
	Balance			Interest		Yield			Balance			Interest		Yield
Assets
Federal Funds Sold/Short Term Investments	$	22,042,333		$	38,299		0.23	%	$	60,616,449		$	110,892		0.24	%
Investment Securities :
U.S.Treasury Bonds		0			0		-			0			0		-
Taxable		128,404,116			2,382,766		2.47	%		177,880,389			3,141,788		2.35	%
Tax-exempt		82,207,355			2,380,084		3.86	%		87,095,642			2,583,648		3.96	%
Total		210,611,471			4,762,849		3.02	%		264,976,031			5,725,436		2.88	%
Loan Portfolio:
Construction		95,935,994			4,550,562		6.34	%		73,497,268			3,791,105		6.90	%
Residential real estate		43,796,422			1,381,188		4.22	%		44,761,735			1,363,469		4.07	%
Home Equity		22,308,186			778,475		4.67	%		21,985,052			921,528		5.60	%
Commercial and commercial real estate		291,656,494			12,524,444		5.74	%		264,617,694			11,779,442		5.95	%
Mortgage warehouse lines		205,752,931			6,713,760		4.36	%		118,959,945			4,022,743		4.52	%
Installment		467,804			15,901		4.54	%		321,030			13,668		5.69	%
All Other Loans		29,755,674			1,089,404		4.89	%		21,900,870			802,694		4.90	%
Total		689,673,504			27,053,735		5.24	%		546,043,594			22,694,649		5.56	%
Total Interest-Earning Assets		922,327,308			31,854,883		4.62	%		871,636,075			28,530,977		4.37	%
Allowance for Loan Losses		(7,532,730	)							(7,547,794	)
Cash and Due From Bank		7,816,389								15,325,837
Other Assets		62,474,477								57,087,058
Total Assets		985,085,444							$	936,501,176
Liabilities and Shareholders' Equity :
Interest-Bearing Liabilities:
Money Market and NOW Accounts	$	302,776,858		$	753,925		0.33	%	$	279,311,533		$	692,097		0.33	%
Savings Accounts		196,265,638			686,202		0.47	%		200,283,559			676,075		0.45	%
Certificates of Deposit		162,085,520			1,324,342		1.09	%		169,628,119			1,458,167		1.15	%
Other Borrowed Funds		41,767,238			438,241		1.40	%		24,630,579			387,422		2.10	%
Trust Preferred Securities		18,557,000			263,216		1.87	%		18,557,000			257,314		1.83	%
Total Interest-Bearing Liabilities		721,452,254			3,465,927		0.64	%		692,410,789			3,471,075		0.67	%
Net Interest Spread							3.97	%							3.70	%
Demand Deposits		164,867,369								156,999,596
Other Liabilities		8,782,231								6,859,237
Total Liabilities		895,101,854								856,269,622
Shareholders' Equity		89,983,590								80,231,552
Total Liabilities and Shareholders' Equity	$	985,085,444							$	936,501,174
Net Interest Margin				$	28,388,956		4.11	%				$	25,059,902		3.84	%

1st Constitution Bancorp

Reconciliation of Non-GAAP Measures (1)

(Dollars in thousands, except per share amounts)

(Unaudited)

	Three Months Ended						Nine Months Ended
	September 30, 2015			September 30, 2014			September 30, 2015			September 30, 2014
Adjusted  Net Income
Net Income (Loss)	$	2,462		$	2,138		$	7,037		$	2,340
Adjustments
Provision for  Loan losses (2)											3,656
Merger-related Expenses											1,532
Income Tax Effect of Adjustments  (3)											(2,031	)
Adjusted Net Income (Loss)	$	2,462		$	2,138		$	7,037		$	5,497
Adjusted Net Income (Loss) per Diluted Share
Adjusted Net Income	$	2,462		$	2,138		$	7,037		$	5,497
Diluted Shares Outstanding		7,695,082			7,603,626			7,674,946			7,498,647
Adjusted Net Income (Loss) per Diluted Share	$	0.32		$	0.28		$	0.92		$	0.73
Adjusted Return on Assets (4)		0.98	%		0.88	%		0.96	%		0.78	%
Adjusted Return on Equity (4)		10.56	%		10.25	%		10.46	%		9.16	%

(1) Adjusted Net Income (Loss) and Adjusted Net Income (Loss) per diluted share are measures not in accordance with generally accepted  accounting principles ("GAAP"). The Company used the non-GAAP financial measures, Adjusted Net Income (Loss) and Adjusted Net    Income (Loss) per diluted  share, because the Company believes that it is useful for the users of the financial information to understand the effect on net income of the merger related expenses incurred in the merger with Rumson Fair Haven Bank and Trust Company and the large provision for loan losses recorded as the result of the fraudulent misrepresentations by a borrower and its principals.  Management believes that these non-GAAP financial measures improve the comparability of the current period results with the results of prior periods. The Company cautions that the non-GAAP financial measures should be considered in addition to, but not as a substitute for, the Company's GAAP results.

(2) The amount represents the full charge-off of a loan participation due to fraudulent misrepresentations by the borrower and its principals that was recorded in the second quarter of 2014.

(3) Tax effected at an income tax rate of 39.94%, less the impact of non-deductible merger expenses.

(4) Adjusted Return on Assets and Adjusted Return on Equity excludes the after-tax effect of the merger related expenses and loan loss provision in 2014.