Illinois | 001-37505 | 20-4718752 | ||
(State or other jurisdiction of incorporation) | (Commission File No.) | (IRS Employer Identification No.) |
2801 Black Road, Joliet, IL | 60435 | |
(Address of Principal Executive Offices) | (Zip Code) |
(d) | Exhibits. |
Exhibit No. | Description | |
99.1 | Press Release dated October 16, 2015 |
FIRST COMMUNITY FINANCIAL PARTNERS, INC. | ||
Date: October 16, 2015 | /s/ Glen L. Stiteley | |
Glen L. Stiteley | ||
Executive Vice President and Chief Financial Officer |
Exhibit No. | Description | |
99.1 | Press Release dated October 16, 2015 |
• | Transition to NASDAQ Capital Market |
• | Basic and diluted earnings per share (“EPS”) of $0.17 for the quarter; $.06 or 54.5% increase over prior year |
• | Tangible book value growth of $0.46, or 8.5%, to $5.88 year-over-year |
• | Asset growth of $105.5 million, or 11.5%, year-over-year to $1.0 billion |
• | Loan growth of $53.9 million, or 7.8%, year-over-year |
• | Noninterest bearing deposit growth of $34.6 million, or 24.7%, year-over-year |
• | Pre-tax, pre-provision core income growth year-to-date of $475,000 or 5.7% year-over-year |
• | Net interest income growth year to date of $1.3 million due to increased income from loan growth and reduction in interest expense |
• | Noninterest expense increased modestly by $331,000, or 2.2%, year-over-year |
• | Negative loan loss provision of $813,000 for the quarter and $1.6 million year to date reflecting overall improvement in asset quality |
• | Improved capital flexibility as bank subsidiary reached positive retained earnings allowing it to begin providing cash dividends to the parent company |
• | Return on average assets (“ROAA”) improved to 1.17% in the third quarter of 2015 from 0.81% in the third quarter of 2014, while return on average equity (“ROAE”) rose sharply to 12.01% in the third quarter of 2015 compared with 7.81% in the third quarter of 2014. |
• | Tangible book value per share rose to $5.88 at September 30, 2015, from $5.42 a year earlier, and was up from $5.52 at December 31, 2014. |
• | Pre-tax pre-provision core income, a non-GAAP measure, rose to $3.4 million in the third quarter of 2015 compared with $2.9 million in the third quarter of 2014. |
• | Net interest income before provision for loan losses increased to $8.0 million in the third quarter of 2015, up 9.49% compared with $7.3 million in the third quarter of 2014, reflecting higher interest income and lower year-over-year interest expense. |
• | Total assets increased $105.5 million, or 11.50%, and reached a Company-record $1.0 billion at September 30, 2015 from $917.9 million at September 30, 2014. |
• | Total loans increased 7.8%, or $54.0 million, to $743.1 million at September 30, 2015 from $689.1 million at September 30, 2014, with year-over-year growth in almost all loan categories led by commercial real estate, commercial, and residential 1-4 family. |
• | Total deposits increased 11.7%, or $88.6 million, to $846.7 million at September 30, 2015 from $758.1 million at September 30, 2014. Core demand deposits comprised 64.2% of total deposits at the end of the third quarter of 2015 compared with 57.1% of total deposits at the end of the third quarter of 2014. Noninterest bearing deposit accounts, an important source of lower-cost funding to support loan activity, increased $34.5 million, or 24.7%, to $174.8 million at the end of the third quarter of 2015 from $140.3 million at the end of the third quarter of 2014. |
• | Asset quality measures improved dramatically, including a decline in the ratio of nonperforming assets to total assets to 0.71% at September 30, 2015 from 1.37% a year earlier. Nonperforming assets decreased $5.3 million, or 42.0%, from $12.6 million at September 30, 2014 to $7.3 million at September 30, 2015. |
• | ROAA improved to 0.94% for the nine months ended September 30, 2015, from 0.53% for the nine months ended September 30, 2014, while ROAE rose sharply to 9.59% for the nine months ended September 30, 2015 compared with 5.04% for the nine months ended September 30, 2014. |
• | Pre-tax pre-provision core income, a non-GAAP measure, rose to $8.7 million for the nine months ended September 30, 2015 compared with $8.3 million for the same period in 2014. |
• | Net interest income before provision for loan losses increased to $22.6 million for the nine months ended September 30, 2015, up 6.1% compared with $21.3 million for the nine months ended September 30, 2014, reflecting higher interest income, which was the result of current year loan growth, and lower year-over-year interest expense. Interest expense was lower in 2015 due to lower parent company debt costs, in addition to improved deposit funding and a shift to noninterest bearing deposit accounts. |
• | Total assets reached a Company-record $1.0 billion at September 30, 2015, an increase of $99.4 million, or 10.8%, from $924.1 million at December 31, 2014. |
• | Total loans increased $53.9 million, or 7.8%, to $743.1 million at September 30, 2015 from $689.2 million at December 31, 2014. |
• | Total deposits increased $77.3 million, or 10.0%, to $846.7 million at September 30, 2015 from $769.4 million at December 31, 2014. Core demand deposits comprised 64.2% of total deposits in the third quarter of 2015 compared with 59.6% of total deposits at December 31, 2014. Noninterest bearing deposit accounts, an important source of lower-cost funding to support loan activity, increased $16.5 million, or 10.4%, to $174.8 million in the third quarter of 2015 from $158.3 million at December 31, 2014. |
FINANCIAL SUMMARY | ||||||||||||
Three months ended September 30, | Nine months ended September 30, | |||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||
Interest income: | (In thousands, except per share data)(Unaudited) | |||||||||||
Loans, including fees | $ | 8,218 | $ | 7,988 | $ | 24,124 | $ | 23,738 | ||||
Securities | 1,103 | 848 | 3,017 | 2,261 | ||||||||
Federal funds sold and other | 19 | 23 | 47 | 62 | ||||||||
Total interest income | 9,340 | 8,859 | 27,188 | 26,061 | ||||||||
Interest expense: | ||||||||||||
Deposits | 973 | 1,130 | 2,937 | 3,400 | ||||||||
Federal funds purchased and other borrowed funds | 98 | 16 | 129 | 50 | ||||||||
Subordinated debt | 297 | 432 | 1,503 | 1,295 | ||||||||
Total interest expense | 1,368 | 1,578 | 4,569 | 4,745 | ||||||||
Net interest income | 7,972 | 7,281 | 22,619 | 21,316 | ||||||||
Provision for loan losses | (813 | ) | — | (1,562 | ) | 2,667 | ||||||
Net interest income after provision for loan losses | 8,785 | 7,281 | 24,181 | 18,649 | ||||||||
Noninterest income: | ||||||||||||
Service charges on deposit accounts | 188 | 210 | 565 | 492 | ||||||||
Gain on sale of loans | — | — | — | 32 | ||||||||
Gain on foreclosed assets, net | — | — | — | 19 | ||||||||
Gain on sale of securities | 251 | 407 | 272 | 446 | ||||||||
Mortgage fee income | 178 | 196 | 435 | 336 | ||||||||
Other | 152 | 153 | 465 | 1,106 | ||||||||
Total noninterest income | 769 | 966 | 1,737 | 2,431 | ||||||||
Noninterest expenses: | ||||||||||||
Salaries and employee benefits | 2,841 | 2,812 | 8,535 | 8,452 | ||||||||
Occupancy and equipment expense | 486 | 543 | 1,483 | 1,607 | ||||||||
Data processing | 248 | 238 | 710 | 715 | ||||||||
Professional fees | 342 | 345 | 1,134 | 1,044 | ||||||||
Advertising and business development | 217 | 223 | 633 | 563 | ||||||||
Losses on sale and writedowns of foreclosed assets, net | 58 | 78 | 78 | 447 | ||||||||
Foreclosed assets, net of rental income | (61 | ) | 55 | 80 | 190 | |||||||
Other expense | 1,005 | 794 | 2,840 | 2,144 | ||||||||
Total noninterest expense | 5,136 | 5,088 | 15,493 | 15,162 | ||||||||
Income before income taxes | 4,418 | 3,159 | 10,425 | 5,918 | ||||||||
Income taxes | 1,471 | 1,149 | 3,527 | 1,936 | ||||||||
Net income attributable to First Community Financial Partners | 2,947 | 2,010 | 6,898 | 3,982 | ||||||||
Dividends and accretion on preferred shares | — | (145 | ) | — | (433 | ) | ||||||
Net income applicable to common shareholders | $ | 2,947 | $ | 1,865 | $ | 6,898 | $ | 3,549 | ||||
Basic earnings per share | $ | 0.17 | $ | 0.11 | $ | 0.41 | $ | 0.22 | ||||
Diluted earnings per share | $ | 0.17 | $ | 0.11 | $ | 0.40 | $ | 0.21 |
FINANCIAL SUMMARY | |||||||||||
September 30, 2015 | December 31, 2014 | September 30, 2014 | |||||||||
Period-End Balance Sheet | |||||||||||
(Dollars in thousands)(Unaudited) | |||||||||||
Assets | |||||||||||
Mortgage loans held for sale | $ | — | $ | 738 | $ | — | |||||
Construction and land development | 19,451 | 18,700 | 15,898 | ||||||||
Farmland and agricultural production | 8,984 | 9,350 | 9,393 | ||||||||
Residential 1-4 family | 126,316 | 100,773 | 100,716 | ||||||||
Multifamily | 30,771 | 24,426 | 24,496 | ||||||||
Commercial real estate | 368,896 | 353,973 | 353,456 | ||||||||
Commercial | 180,674 | 171,452 | 176,627 | ||||||||
Consumer and other | 7,963 | 10,519 | 8,558 | ||||||||
Total loans | 743,055 | 689,193 | 689,144 | ||||||||
Allowance for credit losses | 11,753 | 13,905 | 13,871 | ||||||||
Net loans | 731,302 | 675,288 | 675,273 | ||||||||
Investment securities | 217,194 | 170,054 | 157,094 | ||||||||
Other earning assets | 25,743 | 23,990 | 31,581 | ||||||||
Other non-earning assets | 49,193 | 54,005 | 53,943 | ||||||||
Total Assets | $ | 1,023,432 | $ | 924,075 | $ | 917,891 | |||||
Liabilities and Shareholders' Equity | |||||||||||
Noninterest bearing deposits | $ | 174,849 | $ | 158,329 | $ | 140,252 | |||||
Savings deposits | 34,933 | 30,211 | 27,546 | ||||||||
NOW accounts | 101,828 | 73,755 | 75,383 | ||||||||
Money market accounts | 232,195 | 196,222 | 190,037 | ||||||||
Time deposits | 302,892 | 310,893 | 324,897 | ||||||||
Total deposits | 846,697 | 769,410 | 758,115 | ||||||||
Total borrowings | 72,551 | 58,662 | 59,832 | ||||||||
Other liabilities | 4,065 | 3,950 | 3,963 | ||||||||
Total Liabilities | 923,313 | 832,022 | 821,910 | ||||||||
Shareholders’ equity - preferred | — | — | 6,233 | ||||||||
Shareholders’ equity - common | 100,119 | 92,053 | 89,748 | ||||||||
Total Shareholders’ Equity | 100,119 | 92,053 | 95,981 | ||||||||
Total Liabilities and Shareholders’ Equity | $ | 1,023,432 | $ | 924,075 | $ | 917,891 |
COMMON STOCK DATA | |||||||||||
2015 | 2014 | ||||||||||
Third Quarter | Fourth Quarter | Third Quarter | |||||||||
Market value (1): | |||||||||||
End of period | $ | 6.51 | $ | 5.20 | $ | 4.73 | |||||
High | 7.00 | 5.43 | 4.78 | ||||||||
Low | 6.25 | 4.60 | 4.30 | ||||||||
Book value (end of period) | 5.88 | 5.52 | 5.80 | ||||||||
Tangible book value (end of period) | 5.88 | 5.52 | 5.42 | ||||||||
Shares outstanding | 17,017,441 | 16,668,002 | 16,552,063 | ||||||||
Average shares outstanding | 16,993,822 | 16,563,405 | 16,549,096 | ||||||||
Average diluted shares outstanding | 17,161,783 | 16,800,247 | 16,770,189 |
(1) The prices shown are as reported on the OTC Pink Marketplace other than for the third quarter of 2015, which are as reported on the NASDAQ Capital Market. |
INVESTMENT PORTFOLIO | |||||||||||||||||||||
(Dollars in thousands)(Unaudited) | |||||||||||||||||||||
As of September 30, 2015 | |||||||||||||||||||||
Cost | Unrealized Gains | Unrealized Loss | Fair Value | Yield (%) | Duration (Years) | ||||||||||||||||
Investment Securities | |||||||||||||||||||||
Government sponsored enterprises | $ | 26,754 | $ | 383 | $ | — | $ | 27,137 | 1.73 | % | 3.21 | ||||||||||
Residential collateralized mortgage obligations | 61,325 | 419 | 111 | 61,633 | 2.22 | % | 3.33 | ||||||||||||||
Residential mortgage backed securities | 29,286 | 205 | 49 | 29,442 | 1.86 | % | 3.52 | ||||||||||||||
State and political subdivisions | 96,518 | 1,425 | 328 | 97,615 | 2.55 | % | 4.69 | ||||||||||||||
Total debt securities | 213,883 | 2,432 | 488 | 215,827 | 2.26 | % | 4.31 | ||||||||||||||
Federal Home Loan Bank stock | 1,367 | — | — | 1,367 | — | % | — | ||||||||||||||
Total Investment Securities | $ | 215,250 | $ | 2,432 | $ | 488 | $ | 217,194 | 2.26 | % | 4.31 | ||||||||||
(Dollars in thousands) | As of December 31, 2014 | ||||||||||||||||||||
Cost | Unrealized Gains | Unrealized Loss | Fair Value | Yield (%) | Duration (Years) | ||||||||||||||||
Investment Securities | |||||||||||||||||||||
Government sponsored enterprises | $ | 30,904 | $ | 83 | $ | 36 | $ | 30,951 | 1.69 | % | 2.80 | ||||||||||
Residential collateralized mortgage obligations | 44,095 | 241 | 62 | 44,274 | 2.35 | % | 2.71 | ||||||||||||||
Residential mortgage backed securities | 27,208 | 137 | 128 | 27,217 | 2.26 | % | 4.10 | ||||||||||||||
State and political subdivisions | 65,240 | 1,096 | 91 | 66,245 | 2.48 | % | 4.16 | ||||||||||||||
Total debt securities | 167,447 | 1,557 | 317 | 168,687 | 2.27 | % | 3.85 | ||||||||||||||
Federal Home Loan Bank stock | 1,367 | — | — | 1,367 | — | % | — | ||||||||||||||
Total Investment Securities | $ | 168,814 | $ | 1,557 | $ | 317 | $ | 170,054 | 2.27 | % | 3.85 |
ASSET QUALITY DATA | |||||||||||
September 30, 2015 | December 31, 2014 | September 30, 2014 | |||||||||
(Dollars in thousands)(Unaudited) | |||||||||||
Loans identified as nonperforming | $ | 3,117 | $ | 6,947 | 9,065 | ||||||
Other nonperforming loans | 55 | 50 | — | ||||||||
Total nonperforming loans | 3,172 | 6,997 | 9,065 | ||||||||
Foreclosed assets | 4,109 | 2,530 | 3,489 | ||||||||
Total nonperforming assets | $ | 7,281 | $ | 9,527 | $ | 12,554 | |||||
Allowance for loan losses losses | 11,753 | 13,905 | 13,871 | ||||||||
Nonperforming assets to total assets | 0.71 | % | 1.03 | % | 1.37 | % | |||||
Nonperforming loans to total assets | 0.31 | % | 0.76 | % | 0.99 | % | |||||
Allowance for loan losses to nonperforming loans | 370.52 | % | 198.73 | % | 153.02 | % |
Allowance for loan losses rollforward: | |||||||||||||||
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
Beginning balance | $ | 12,420 | $ | 14,383 | $ | 13,905 | $ | 15,820 | |||||||
Charge-offs | 654 | 659 | 1,725 | 5,761 | |||||||||||
Recoveries | 800 | 147 | 1,137 | 1,145 | |||||||||||
Net charge-offs | (146 | ) | 512 | 588 | 4,616 | ||||||||||
Provision for loan losses | (813 | ) | — | (1,562 | ) | 2,667 | |||||||||
Ending Balance | $ | 11,753 | $ | 13,871 | $ | 11,755 | $ | 13,871 | |||||||
Net charge-offs | (146 | ) | 512 | 588 | 4,616 | ||||||||||
Net chargeoff percentage (annualized) | (0.08 | )% | 0.30 | % | 0.16 | % | 1.38 | % |
OTHER DATA (1) | ||||||||||||||
For the three months ended, | For the nine months ended, | |||||||||||||
September 30, 2015 | September 30, 2014 | September 30, 2015 | September 30, 2014 | |||||||||||
Return on average assets | 1.17 | % | 0.81 | % | 0.94 | % | 0.53 | % | ||||||
Return on average equity | 12.01 | % | 7.81 | % | 9.59 | % | 5.04 | % | ||||||
Net yield on earning assets | 3.31 | % | 3.34 | % | 4.88 | % | 3.36 | % | ||||||
Average loans to assets | 72.37 | % | 73.51 | % | 73.70 | % | 74.77 | % | ||||||
Average loans to deposits | 86.63 | % | 88.19 | % | 87.62 | % | 90.30 | % | ||||||
Average noninterest bearing deposits to total deposits | 20.79 | % | 15.83 | % | 20.17 | % | 15.68 | % | ||||||
Average equity to assets | 9.59 | % | 15.54 | % | 9.64 | % | 10.54 | % | ||||||
COMPANY CAPITAL RATIOS | ||||||||||||||
(Dollars in thousands) | September 30, 2015 | December 31, 2014 | September 30, 2014 | |||||||||||
Tier 1 leverage ratio | 9.24 | % | 8.55 | % | 9.78 | % | ||||||||
Common equity tier 1 capital ratio | 11.20 | % | n/a | n/a | ||||||||||
Tier 1 capital ratio | 11.20 | % | 10.27 | % | 10.37 | % | ||||||||
Total capital ratio | 14.39 | % | 15.28 | % | 14.64 | % | ||||||||
Tangible common equity | $ | 100,119 | $ | 92,053 | $ | 89,748 | ||||||||
(1) The September 30, 2015 capital ratios are calculated under the Basel III capital rules that became effective on January 1, 2015. Prior period capital ratios were calculated under the prompt corrective action capital rules that were in effect for those periods. |
OTHER NON-GAAP MEASURES | ||||||||||||||||
Pre-tax pre-provision core income (1) | ||||||||||||||||
(Dollars in thousands) | ||||||||||||||||
Three months ended | Nine months ended | |||||||||||||||
September 30, 2015 | September 30, 2014 | September 30, 2015 | September 30, 2014 | |||||||||||||
Pre-tax net income | $ | 4,418 | $ | 3,159 | $ | 10,425 | $ | 5,918 | ||||||||
Provision for loan losses | (813 | ) | — | (1,562 | ) | 2,667 | ||||||||||
Gain on sale of investment securities | (251 | ) | (407 | ) | (272 | ) | 466 | (446 | ) | |||||||
Gain on sale of foreclosed assets | — | — | — | (19 | ) | |||||||||||
Bank owned life insurance gain | — | — | — | (483 | ) | |||||||||||
Losses on sale and writedowns of foreclosed assets, net | 58 | 78 | 78 | 447 | ||||||||||||
Foreclosed assets, net of rental income | (61 | ) | 55 | 80 | 190 | |||||||||||
Adjusted pre-tax pre-provision core income | $ | 3,351 | $ | 2,885 | $ | 8,749 | $ | 8,274 |
(1) This is a non-GAAP financial measure. The Company’s management believes the presentation of pre-tax pre-provision core net operating income provides investors with a greater understanding of the Company’s operating results, in addition to the results measured in accordance with GAAP. |