EX-99.1 2 a991-032016er.htm EXHIBIT 99.1 FCFP EARNINGS RELEASE Exhibit


Exhibit 99.1
News Release
Contact: Glen L. Stiteley, Chief Financial Officer
   (815) 725-1885
Source:   First Community Financial Partners, Inc.

First Community Financial Partners, Inc. Announces First Quarter 2016 Financial Results
Investments for future: Announcement of strategic acquisition and addition of commercial lending team
First Quarter Highlights:
•
Announced the signing of a definitive agreement to acquire Mazon State Bank, a neighboring bank with $85 million in total assets, $33 million in total loans, $48 million in residential mortgage loan serviced, and $74 million in deposits as of March 31, 2016, 99.59% of which are core deposits
•
Announced the addition of six seasoned commercial bankers
•
Asset growth of $20.2 million, or 1.94%, from the fourth quarter
•
Loan growth of $2.0 million, or 0.25%, from the fourth quarter
•
Deposit growth of $13.0 million, or 1.50%, from the fourth quarter
•
Noninterest bearing deposit growth of $8.4 million, or 4.26%, from the fourth quarter
•
Diluted earnings per share (“EPS”) of $0.12 for the first quarter of 2016; $0.03 or 33.33% per diluted share increase over prior year
•Pre-tax, pre-provision core income grew by $562,000, or 22.27%, compared to first quarter of 2015
•
Net interest income growth of $1.1 million, or 15.49%, compared to the first quarter of 2015
•
No loan loss provision in first quarter of 2016 or 2015, reflecting continued overall improvement in asset quality
•
Noninterest expense increased by $779,000, or 15.11%, year-over-year primarily due to the addition of six commercial bankers in the first quarter of 2016
•
Shareholders’ equity increased $3.7 million or 3.64% to $106.8 million million year-over-year; tangible equity ratio of 10.07% as of March 31, 2016

JOLIET, IL, April 27, 2016 -- First Community Financial Partners, Inc. (NASDAQ:FCFP) (“First Community” or the “Company”), the parent company of First Community Financial Bank (the “Bank”), today reported financial results as of and for the three months ended March 31, 2016.
Net income applicable to shareholders for the quarter ended March 31, 2016 was $2.0 million, or $0.12 per diluted share, compared with $1.6 million, or $0.09 per diluted share, for the quarter ended March 31, 2015. Earnings in the first quarter of 2016 reflected year-over-year growth in net interest income offset by growth in expenses primarily related to the addition of six commercial bankers and one leasing officer. During the first quarter of 2016, the Company also incurred $100,000 of professional fees related to the acquisition of Mazon State Bank.
From the Mazon State Bank merger, First Community anticipates it will be able to achieve an earnback of less than one year on the estimated dilution to tangible book value and expects accretion to its earnings per share in 2016 and beyond. Subject to regulatory approval, the closing of the transaction is expected to occur during the third quarter of 2016.
Roy Thygesen, CEO said, “We have made some key investments in the first quarter which we expect will facilitate a transformative year for First Community in 2016. The Mazon State Bank organization is a strong cultural and geographic fit for First Community. Additionally, we invested in acquiring a group of talented commercial bankers

1


and expect the merger with Mazon State Bank will help facilitate funding our anticipated loan growth with low-cost core deposits.

Our investments this quarter are consistent with our strategic focus on efficient organic growth along with prudent strategic acquisitions. With our commitment to highly personalized service, we believe these recent activities continue to build on the attractiveness of our organization to existing and potential customers, as well as talented potential strategic hires. We are confident these activities will continue to build the value of our Company for shareholders.”

First Quarter 2016 Financial Results
Loans
Total loans increased $2.0 million, or 0.25%, since the end of the fourth quarter and $62.4 million or 8.77% year-over-year. Commercial loans grew $1.5 million, or 0.85%, since the end of the fourth quarter and $4.9 million, or 2.76%, year-over-year. Commercial real estate loans decreased $2.8 million, or 0.73%, since the end of the fourth quarter, but grew $9.2 million, or 2.49%, year-over-year. Since the end of the fourth quarter, five commercial real estate loans totaling $22.0 million were paid off, $15.3 million of which was due to the sale of the business/property. Residential real estate loans grew $3.3 million, or 2.46%, since the end of the fourth quarter and $36.8 million, or 35.90%, year-over-year. Construction loans were up $5.7 million, or 25.89%, since the end of the fourth quarter and $9.2 million, or 49.81%, year-over-year.

Deposits
Total deposits increased $13.0 million or 1.50% since the end of the fourth quarter and $77.9 million, or 9.72%, year-over-year. The growth in deposits has included growth in lower cost transactional accounts. Noninterest bearing demand deposits increased $8.4 million, or 4.26%, since the end of the fourth quarter 2015 and $36.7 million or, 21.87%, year-over-year. Our focus on relationship banking and growth in transactional accounts has resulted in a decline in time deposits of $200.4 million, or 67.37%, to $294.1 million at March 31, 2016 from $297.5 million at December 31, 2015. The ratio of time deposits to total deposits has steadily improved from 38.78% at March 31, 2015 to 34.36% at December 31, 2015 and 33.46% at March 31, 2016.

Net Interest Income and Margin
First quarter 2016 net interest income was up $131,000, or 1.60%, from the fourth quarter of 2015. The Company’s net interest margin was 3.36% for the first quarter of 2016, compared to 3.29% in the fourth quarter 2015. The increase in net interest income was due to continued growth in the loan portfolio and continued reduction in time deposit balances as a source of funding.
First quarter 2016 net interest income was up $1.1 million or 15.49% from the first quarter of 2015. The Company’s net interest margin was 3.36% for the first quarter of 2016, compared to 3.23% for the first quarter of 2015. The increase in net interest income was due to growth in the loan portfolio, continued reduction in time deposit balances, and refinancing of our subordinated debentures with lower-cost secured borrowings at the end of the second quarter 2015.

Noninterest Income and Expense
Noninterest income decreased $204,000, or 26.88%, from the fourth quarter of 2015 but increased $110,000, or 24.72%, from the first quarter of 2015. The decrease from the fourth quarter was due to no securities gains in the first quarter of 2016 versus $212,000 of securities gains in the fourth quarter of 2015. The increase from the first quarter of 2015 was largely due to $110,000 in additional bank owned life insurance (“BOLI”) income due to a $12.0 million purchase of BOLI in the fourth quarter of 2015.

2


Noninterest expense increased $891,000, or 17.66%, from the fourth quarter of 2015 and $779,000, or 15.11%, from the first quarter of 2015. The increase was in relation to the addition of six commercial banking officers and one leasing officer during the first quarter of 2016. In addition, $100,000 of professional fees were incurred during the first quarter of 2016 as a result of the work related to the acquisition of Mazon State Bank.

Asset Quality
Total nonperforming assets increased from the fourth quarter by $486,000, or 6.98%, to $7.4 million at March 31, 2016. The ratio of nonperforming assets to total assets was 0.70% at March 31, 2016.
The Company had net charge-offs of $406,000 in the first quarter of 2016, compared to net charge-offs of $127,000 in the first quarter of 2015 and net recoveries of $503,000 in the fourth quarter of 2015.
The Company’s allowance for loan losses to nonperforming loans and allowance to loans was 528.19% and 1.46% at March 31, 2016, respectively.
The Company did not take a provision for loan losses in the first quarter of 2016, or for the same period in 2015, as a result of continued improvement in the level of nonperforming loans and continued lower levels of net charge-offs.

About First Community Financial Partners, Inc.: First Community Financial Partners, Inc., headquartered in Joliet, Illinois, is a bank holding company whose common stock trades on the NASDAQ Capital Market (NASDAQ:FCFP). First Community Financial Partners has one bank subsidiary, First Community Financial Bank. First Community Financial Bank, based in Plainfield, Illinois, is a wholly owned banking subsidiary of First Community Financial Partners, with locations in Joliet, Plainfield, Homer Glen, Channahon, Naperville and Burr Ridge, Illinois. The Bank is dedicated to its founding principles by being actively involved in the communities it serves and providing exceptional personal service delivered by experienced local professionals.



3


Special Note Concerning Forward-Looking Statements
---------------------------------------------------------------------
Any statements in this release other than statements of historical facts, including statements about management’s beliefs and expectations, are forward-looking statements and should be evaluated as such. These statements are made on the basis of management’s views and assumptions regarding future events and business performance. Words such as “estimate,” “believe,” “anticipate,” “expect,” “intend,” “plan,” “target,” “project,” “should,” “may,” “will” and similar expressions are intended to identify forward-looking statements. Forward-looking statements (including oral representations) involve risks and uncertainties that may cause actual results to differ materially from any future results, performance or achievements expressed or implied by such statements. These risks and uncertainties involve a number of factors related to the businesses of First Community and its wholly owned bank subsidiary, including: risks associated with First Community’s possible pursuit of acquisitions; unexpected results of acquisitions, including the planned acquisition of Mazon State Bank; economic conditions in First Community’s, and its wholly owned bank subsidiary’s; service areas; system failures; losses of large customers; disruptions in relationships with third party vendors; losses of key management personnel and the inability to attract and retain highly qualified management personnel in the future; the impact of legislation and regulatory changes on the banking industry, including the implementation of the Basel III capital reforms; losses related to cyber-attacks; and liability and compliance costs regarding banking regulations. These and other risks and uncertainties are discussed in more detail in First Community’s filings with the Securities and Exchange Commission, including First Community’s Annual Report on Form 10-K filed on March 11, 2016.
Many of these risks are beyond management’s ability to control or predict. All forward-looking statements attributable to First Community, and its wholly owned bank subsidiary, or persons acting on behalf of each of them are expressly qualified in their entirety by the cautionary statements and risk factors contained in this communication. Because of these risks, uncertainties and assumptions, you should not place undue reliance on these forward-looking statements. Furthermore, forward-looking statements speak only as of the date they are made. Except as required under the federal securities laws or the rules and regulations of the Securities and Exchange Commission, First Community does not undertake any obligation to update or review any forward-looking information, whether as a result of new information, future events or otherwise.


4


FINANCIAL SUMMARY
 
 
 


 
 
 
 
 

March 31, 2016
December 31, 2015
September 30, 2015
June 30, 2015
March 31, 2015
Period-End Balance Sheet

 
 
 

(In thousands)(Unaudited)
 
 
 

Assets

 
 
 

Mortgage loans held for sale
$
133

$
400

$
—

$
1,449

$
1,729

Commercial real estate
378,304

381,098

368,896

363,575

369,113

Commercial
181,142

179,623

180,674

187,780

176,281

Residential 1-4 family
139,208

135,864

126,316

109,819

102,432

Multifamily
31,511

34,272

30,771

29,829

26,015

Construction and land development
27,798

22,082

19,451

19,612

18,555

Farmland and agricultural production
9,060

9,989

8,984

8,604

8,869

Consumer and other
7,250

9,391

7,963

8,578

10,570

Total loans
774,273

772,319

743,055

727,797

711,835

Allowance for loan losses
11,335

11,741

11,753

12,420

13,778

Net loans
762,938

760,578

731,302

715,377

698,057

Investment securities
205,241

206,971

217,194

184,349

190,909

Other earning assets
47,261

23,967

25,743

42,777

14,447

Other non-earning assets
45,289

48,736

49,193

50,517

53,997

Total Assets
$
1,060,862

$
1,040,652

$
1,023,432

$
994,469

$
959,139



 
 
 
 
Liabilities and Shareholders' Equity
 
 
 
 
Noninterest bearing deposits
$
204,414

$
196,063

$
174,849

$
174,527

$
167,733

Savings deposits
38,481

36,206

34,933

33,567

33,101

NOW accounts
104,136

102,882

101,828

95,406

71,983

Money market accounts
237,873

233,315

232,195

231,185

217,637

Time deposits
294,076

297,525

302,892

299,703

310,674

Total deposits
878,980

865,991

846,697

834,388

801,128

Total borrowings
72,237

68,315

72,551

59,398

57,953

Other liabilities
2,855

3,305

4,065

4,513

5,140

Total Liabilities
954,071

937,611

923,313

898,299

864,221

Shareholders’ equity
106,790

103,041

100,119

96,170

94,918

Total Shareholders’ Equity
106,790

103,041

100,119

96,170

94,918

Total Liabilities and Shareholders’ Equity
$
1,060,862

$
1,040,652

$
1,023,432

$
994,469

$
959,139




5


FINANCIAL SUMMARY
 
 
 
 
 
 
Three months ended,
 
March 31, 2016
December 31, 2015
September 30, 2015
June 30, 2015
March 31, 2015
Interest income:
(In thousands, except per share data)(Unaudited)
Loans, including fees
$
8,508

$
8,401

$
8,218

$
8,090

$
7,815

Securities
1,101

1,117

1,103

962

951

Federal funds sold and other
19

19

19

15

13

Total interest income
9,628

9,537

9,340

9,067

8,779

Interest expense:
 
 
 
 
 
Deposits
940

986

973

987

977

Federal funds purchased and other borrowed funds
93

87

98

17

14

Subordinated debt
297

297

297

603

603

Total interest expense
1,330

1,370

1,368

1,607

1,594

Net interest income
8,298

8,167

7,972

7,460

7,185

Provision for loan losses
—

(515
)
(813
)
(749
)
—

Net interest income after provision for loan losses
8,298

8,682

8,785

8,209

7,185

Noninterest income:
 
 
 
 
 
Service charges on deposit accounts
204

190

188

194

183

Gain on sale of securities
—

212

251

—

21

Mortgage fee income
78

96

178

153

103

Other
273

261

152

174

138

Total noninterest income
555

759

769

521

445

Noninterest expenses:
 
 
 
 
 
Salaries and employee benefits
3,256

3,004

2,841

2,810

2,884

Occupancy and equipment expense
437

494

486

505

492

Data processing
257

203

248

237

224

Professional fees
392

68

342

411

380

Advertising and business development
215

219

217

227

189

Losses on sale and writedowns of foreclosed assets, net
16

109

58

20

—

Foreclosed assets, net of rental income
53

50

(61
)
70

72

Other expense
1,310

898

1,005

919

916

Total noninterest expense
5,936

5,045

5,136

5,199

5,157

Income before income taxes
2,917

4,396

4,418

3,531

2,473

Income taxes
889

1,474

1,471

1,189

867

Net income applicable to common shareholders
$
2,028

$
2,922

$
2,947

$
2,342

$
1,606

 


 
 
 


Basic earnings per share
$
0.12

$
0.17

$
0.17

$
0.14

$
0.10

 


 
 
 


Diluted earnings per share
$
0.12

$
0.17

$
0.17

$
0.14

$
0.09


6



Three months ended,

March 31, 2016
December 31, 2015
March 31, 2015
 
Average
Balances
Income/
Expense
Yields/
Rates
Average
Balances
Income/
Expense
Yields/
Rates
Average
Balances
Income/
Expense
Yields/
Rates
Assets
(Dollars in thousands)(Unaudited)
Loans (1)
$
768,983

$
8,508

4.43
%
$
760,332

$
8,401

4.42
%
$
694,514

$
7,815

4.50
%
Investment securities (2)
206,535

1,101

2.13
%
209,936

1,117

2.13
%
182,504

951

2.08
%
Federal funds sold
—

—

—
%
—

—

—
%
—

—

—
%
Interest-bearing deposits with other banks
13,690

19

0.56
%
22,378

19

0.34
%
11,779

13

0.44
%
Total earning assets
$
989,208

$
9,628

3.89
%
$
992,646

$
9,537

3.84
%
$
888,797

$
8,779

3.95
%
Other assets
55,124



61,572

 
 
45,034




Total assets
$
1,044,332



$
1,054,218

 
 
$
933,831









 
 



Liabilities



 
 
 



NOW accounts
$
104,467

$
71

0.27
%
$
102,783

$
66

0.26
%
$
72,246

$
23

0.13
%
Money market accounts
234,455

162

0.28
%
237,818

163

0.27
%
205,616

137

0.27
%
Savings accounts
37,194

11

0.12
%
36,015

14

0.16
%
31,785

13

0.16
%
Time deposits
292,491

696

0.95
%
304,941

743

0.97
%
303,293

804

1.06
%
Total interest bearing deposits
668,607

940

0.56
%
681,557

986

0.58
%
612,940

977

0.64
%
Securities sold under agreements to repurchase
23,902

9

0.15
%
32,315

12

0.15
%
28,820

7

0.10
%
Secured borrowings
10,528

74

2.81
%
12,875

73

2.27
%
—

—

—

Mortgage payable
—

—

—
%
—

—

—
%
450

7

6.22
%
FHLB borrowings
12,067

10

0.33
%
3,261

2

—
%
656

—

—
%
Subordinated debentures
15,300

297

7.76
%
15,300

297

7.76
%
29,136

603

8.28
%
Total interest bearing liabilities
$
730,404

$
1,330

0.73
%
$
745,308

$
1,370

0.74
%
$
672,002

$
1,594

0.95
%
Noninterest bearing deposits
205,215





203,108





164,072





Other liabilities
3,051



3,963

 
 
4,194




Total liabilities
$
938,670





$
952,379

 
 
$
840,268














 
 






Total shareholders' equity
$
105,662





$
101,839

 
 
$
93,563










 
 
 





Total liabilities and shareholders’ equity
$
1,044,332



$
1,054,218

 
 
$
933,831











 
 





Net interest income

$
8,298



 
$
8,167

 

$
7,185







 
 





Interest rate spread


3.16
%
 

3.10
%


3.00
%




 
 




Net interest margin



3.36
%
 
 
3.29
%




3.23
%
Footnotes:
(1) Average loans include nonperforming loans.
(2) No tax-equivalent adjustments were made, as the effect thereof was not material.

7


COMMON STOCK DATA
 
 
 
 
 
 
 
 
 
 
 
2016
2015
 
First Quarter
Fourth Quarter
Third Quarter
Second Quarter
First Quarter
 
(Unaudited)
Market value (1):
 
 
 
 
 
End of period
$
8.70

$
7.24

$
6.51

$
6.45

$
5.47

High
8.84

7.31

7.00

6.55

5.75

Low
7.00

6.26

6.25

5.47

5.14

Book value (end of period)
6.22

6.05

5.88

5.66

5.59

Tangible book value (end of period)
6.22

6.05

5.88

5.66

5.59

Shares outstanding (end of period)
17,175,864

17,026,941

17,017,441

16,984,221

16,970,721

Average shares outstanding
17,125,928

16,939,010

16,993,822

16,970,721

16,768,908

Average diluted shares outstanding
17,451,354

17,085,752

17,161,783

17,088,102

16,958,466

(1) The prices shown are as reported on the NASDAQ Capital Market other than the first and second quarters of 2015, which are reported on the OTC Pink Marketplace.
ASSET QUALITY DATA
 
 
 
 
 
 
 
 
 
 
 
 
March 31, 2016
December 31, 2015
September 30, 2015
June 30, 2015
March 31, 2015
(Dollars in thousands)(Unaudited)
 
 
 
 
 
Loans identified as nonperforming
$
2,146

$
1,411

$
3,117

$
4,185

$
6,211

Other nonperforming loans
—

67

55

55

—

Total nonperforming loans
2,146

1,478

3,172

4,240

6,211

Foreclosed assets
5,231

5,487

4,109

4,248

2,550

Total nonperforming assets
$
7,377

$
6,965

$
7,281

$
8,488

$
8,761

 
 
 
 
 
 
Allowance for loan losses
11,335

11,741

11,753

12,420

13,778

Nonperforming assets to total assets
0.70
%
0.67
%
0.71
%
0.85
%
0.91
%
Nonperforming loans to total assets
0.20
%
0.14
%
0.31
%
0.43
%
0.65
%
Allowance for loan losses to nonperforming loans
528.19
%
794.38
%
370.52
%
292.92
%
221.83
%


8


ALLOWANCE FOR LOAN LOSSES ROLLFORWARD
(Unaudited)
Three months ended,
 
March 31, 2016
December 31, 2015
September 30, 2015
June 30, 2015
March 31, 2015
Beginning balance
$
11,741

$
11,753

$
12,420

$
13,778

$
13,905

Charge-offs
506

133

654

736

335

Recoveries
100

636

800

127

208

Net charge-offs
406

(503
)
(146
)
609

127

Provision for loan losses
—

(515
)
(813
)
(749
)
—

Ending balance
$
11,335

$
11,741

$
11,753

$
12,420

$
13,778

 
 
 
 
 
 
Net charge-offs
406

(503
)
(146
)
609

127

Net chargeoff percentage (annualized)
0.21
%
(0.26
)%
(0.08
)%
0.34
%
0.07
%

OTHER DATA
 
 
 
 
 
(Unaudited)
 
 
 
 
 
 
Three months ended,
 
March 31, 2016
December 31, 2015
September 30, 2015
June 30, 2015
March 31, 2015
Return on average assets
0.78
%
1.11
%
1.17
%
0.96
%
0.69
%
Return on average equity
7.68
%
11.48
%
12.01
%
9.77
%
6.87
%
Net interest margin
3.36
%
3.29
%
3.31
%
3.23
%
3.23
%
Average loans to assets
73.63
%
72.12
%
72.37
%
73.27
%
74.37
%
Average loans to deposits
88.00
%
85.95
%
86.63
%
87.62
%
89.38
%
Average noninterest bearing deposits to total deposits
23.35
%
23.45
%
20.79
%
22.08
%
20.48
%
 
 
 
 
 
 
COMPANY CAPITAL RATIOS
 
 
 
 
 
(Unaudited)
March 31, 2016
December 31, 2015
September 30, 2015
June 30, 2015
March 31, 2015
Tier 1 leverage ratio
9.72
%
9.36
%
9.39
%
9.24
%
9.70
%
Common equity tier 1 capital ratio
11.94
%
11.62
%
11.57
%
11.20
%
11.47
%
Tier 1 capital ratio
11.94
%
11.62
%
11.57
%
11.20
%
11.47
%
Total capital ratio
14.99
%
14.69
%
14.71
%
14.39
%
15.08
%
Tangible common equity to tangible assets
10.07
%
9.90
%
9.78
%
9.67
%
9.90
%


9


NON-GAAP MEASURES
 
 
 
 
 
 
 
 
 
 
Pre-tax pre-provision core income (1)
 
 
 
 
(Dollars in thousands)(Unaudited)
 
 
 
 
 
 
For the three months ended,
 
March 31, 2016
December 31, 2015
September 30, 2015
June 30, 2015
March 31, 2015
Pre-tax net income
$
2,917

$
4,396

$
4,418

$
3,531

$
2,473

Provision for loan losses
—

(515
)
(813
)
(749
)
—

Gain on sale of securities
—

(212
)
(251
)
—

(21
)
Merger related expenses included in professional fees
100

—

—

—

—

Losses on sale and writedowns of foreclosed assets, net
16

109

58

20

—

Foreclosed assets expense, net of rental income
53

50

(61
)
70

72

Pre-tax pre-provision core income
$
3,086

$
3,828

$
3,351

$
2,872

$
2,524

(1)  This is a non-GAAP financial measure. The Company’s management believes the presentation of pre-tax pre-provision core income provides investors with a greater understanding of the Company’s operating results, in addition to the results measured in accordance with GAAP.


10