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 26, 2011

FOX CHASE BANCORP, INC.

(Exact Name of Registrant as Specified in Its Charter)

Maryland	000-54025	35-2379633
(State or other jurisdiction of	(Commission	(IRS Employer
incorporation or organization)	File Number)	Identification No.)

4390 Davisville Road, Hatboro, Pennsylvania 19040

(Address of principal executive offices) (Zip Code)

(215) 682-7400

(Registrant’s telephone number, including area code)

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:

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

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

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

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

Item 2.02Results of Operations and Financial Condition.

On October 26, 2011, Fox Chase Bancorp, Inc. (the “Company”), the holding company for Fox Chase Bank, issued a press release announcing its financial results for the three and nine months ended September 30, 2011.  The Company also announced a quarterly dividend payment of $0.02 per share payable on November 28, 2011 to shareholders of record as of November 11, 2011.  For more information, reference is made to the Company’s press release dated October 26, 2011, a copy of which is attached to this Report as Exhibit 99.1 and is furnished herewith.

Item 9.01Financial Statements and Exhibits.

(d)Exhibits

Number	Description
99.1	Press Release dated October 26, 2011

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SIGNATURE

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 thereunto duly authorized.

Date: October 27, 2011	By:	/s/ Roger S. Deacon
		Roger S. Deacon
		Executive Vice President and Chief Financial Officer

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EX-99.1

Exhibit 99.1

FOX CHASE BANCORP, INC. 3rd QUARTER EARNINGS 2011

4390 Davisville Road, Hatboro, PA 19040 Phone (215) 682-7400 Fax (215) 682-4144

NEWS RELEASE

For Immediate Release

Date:	October 26, 2011
Contact:	Roger S. Deacon
	Chief Financial Officer
Phone:	(215) 775-1435

FOX CHASE BANCORP, INC. ANNOUNCES EARNINGS

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2011

HATBORO, PA, October 26, 2011 — Fox Chase Bancorp, Inc. (the “Company”) (NASDAQ GM: FXCB), the holding company for Fox Chase Bank (the “Bank”), today announced net income of $1.2 million, or $0.09 per share, and $3.7 million, or $0.28 per share, for the three and nine months ended September 30, 2011, respectively, compared to net income of $692,000, or $0.05 per share, and $1.9 million, or $0.13 per share, for the three and nine months ended September 30, 2010, respectively.

The Company also announced that its Board of Directors has declared a cash dividend of $0.02 per share of common stock. The dividend will be paid on or about November 28, 2011 to stockholders of record as of the close of business on November 11, 2011.

Highlights for the three and nine month periods ended September 30, 2011 included:

·Return on assets improved to 0.46% for the three months ended September 30, 2011, compared to 0.23% for the three months ended September 30, 2010.

·Net interest income increased $1.0 million, or 14.8%, to $8.1 million for the three months ended September 30, 2011, compared to $7.0 million for the three months ended

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September 30, 2010, and increased $3.3 million, or 16.5%, to $23.5 million for the nine months ended September 30, 2011, compared to $20.1 million for the nine months ended September 30, 2010. Net interest margin was 3.10% for the three months ended September 30, 2011, compared to 2.35% for the three months ended September 30, 2010.  The improvements in net interest income and margin were primarily driven by decreases in interest expense on deposits as higher rate certificates of deposit matured and other deposit products repriced in the lower rate environment throughout 2010 and the first nine months of 2011. Reduced interest costs on Federal Home Loan Bank (the “FHLB”) advances also contributed to the decrease in interest expense as $30.0 million matured during the three months ended September 30, 2011.

·Net interest income increased $281,000, or 3.6%, to $8.1 million compared to $7.8 million for the three months ended June 30, 2011.  Net interest margin was 3.10% for the three months ended September 30, 2011, compared to 2.95% for the three months ended June 30, 2011.  The improvements in net interest income and margin were primarily due to a decrease in the cost of funds on deposits from 1.50% to 1.40% as well as the maturity of FHLB advances.

·The efficiency ratio improved to 61.6% for the three months ended September 30, 2011 compared to 64.0% for the three months ended June 30, 2011 and 70.0% for the three months ended September 30, 2010.

·Service charges and other fee income increased $180,000, or 72.6%, and $450,000, or 59.4%, for the three and nine months ended September 30, 2011, respectively.  The increases were primarily due to an increase in cash management and commercial fees of $185,000 and $428,000 for the three and nine months ended September 30, 2011, respectively, which included unused lines and letters of credit and international banking transaction fees.

·The Bank recorded a $160,000 ($106,000 after tax) additional other-than-temporary credit impairment charge on its private label residential mortgage related security in the third quarter of 2011.  Total other-than-temporary credit impairment on this security is $361,000 ($238,000 after tax) for the nine months ended September 30, 2011.  The additional impairment during the three months ended September 30, 2011 was due to continued increases in default rates and reduction in payment speeds on the underlying

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residential mortgage collateral. The security had a net book value after impairment of $175,000 as of September 30, 2011.

·Noninterest expense increased $132,000, or 2.4%, to $5.7 million and $528,000, or 3.3%, to $16.5 million for the three and nine months ended September 30, 2011, respectively, compared to $5.6 million and $15.9 million for the three and nine months ended September 30, 2010, respectively. Salaries, benefits and other compensation increased $227,000 and $662,000 for the three and nine months ended September 30, 2011, respectively, primarily as a result of increased employee stock ownership benefits implemented  in conjunction with the Bank’s mutual-to-stock conversion in the second quarter of 2010 and higher incentive compensation accruals.  Professional fees increased $103,000 and $321,000 for the three and nine months ended September 30, 2011, respectively, primarily due to legal costs associated with the Bank’s nonperforming assets as well as other consulting costs.  The Bank recorded a provision for loss on other real estate owned of $310,000 and $410,000 for the three and nine months ended September 30, 2011, respectively.  FDIC premiums decreased $173,000 and $434,000 for the three and nine months ended September 30, 2011, respectively.  The decrease was a result of lower deposit balances and a lower assessment rate.

·Total assets were $1.03 billion at September 30, 2011, a decrease of $64.1 million, or 5.8%, from $1.10 billion at December 31, 2010.  Total loans were $648.1 million at September 30, 2011, an increase of $5.5 million, or 0.9%, from $642.7 million at December 31, 2010.  The Bank’s multi-family and commercial real estate portfolio increased $25.9 million and the commercial and industrial portfolio increased $26.2 million, offset by decreases in the one-to four-family real estate portfolio of $29.3 million, commercial construction portfolio of $10.3 million and consumer loan portfolio of $6.9 million.

·Total loans increased $9.5 million, or 1.5%, from $638.6 million at June 30, 2011 to $648.1 million at September 30, 2011.  The Bank’s multi-family and commercial real estate portfolio increased $16.7 million and its commercial and industrial portfolio increased $8.0 million, offset by decreases in the one-to four-family real estate portfolio of $10.2 million, consumer loan portfolio of $2.3 million and commercial construction portfolio of $2.5 million.

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Credit related items as of and for the three and nine months ended September 30, 2011 include:

·The allowance for loan losses was $12.6 million, or 1.90% of total loans, at September 30, 2011, compared to $12.4 million, or 1.91% of total loans, at June 30, 2011 and $12.4 million, or 1.90% of total loans, at December 31, 2010.

·The provision for loan losses was $1.0 million for the three months ended September 30, 2011, compared to $900,000 for the three months ended June 30, 2011 and $2.9 million for the three months ended September 30, 2010.

·Net loan charge-offs totaled $888,000 and $2.8 million for the three and nine months ended September 30, 2011, respectively, compared to $3.3 million and $4.1 million for the three and nine months ended September 30, 2010, respectively.

·Nonperforming assets increased $4.0 million for the three months ended September 30, 2011 and decreased $4.2 million for the nine months ended September 30, 2011 to $25.7 million, or 2.49% of total assets at September 30, 2011.  Nonperforming assets increased during the three months ended September 30, 2011 as a construction borrower continued to experience difficulty in this challenging economy. This borrower had been previously identified as a troubled debt restructuring.

·Delinquent loans totaled $4.5 million at September 30, 2011, compared to $2.0 million at June 30, 2011 and $5.1 million at December 31, 2010.

From July 1, 2011 to October 25, 2011, the Company repurchased 877,900, or 6.0% of its issued shares as part of its current 10% stock repurchase plan announced in April 2011 (“April 2011 Plan”).   On October 26, 2011, the Board of Directors approved an additional 5% stock repurchase plan (“October 2011 Plan”).  Repurchases related to the October 2011 Plan would begin subsequent to completion of purchases under the April 2011 Plan, subject to market conditions and other factors.

Commenting on the third quarter 2011 performance, Thomas M. Petro, President and Chief Executive Officer said, “We continue to make steady progress towards our strategy of transitioning Fox Chase Bank from a traditional thrift to a commercial bank.  Again this quarter, we made progress in our key metrics: return on assets, net interest margin and efficiency ratio. Consistent with our strategy, commercial real estate and commercial and industrial loans grew $24.7 million during the quarter, offset by reductions in residential mortgages loans and

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consumer loan portfolios.  We continue to be well positioned to exit this credit cycle with a strong balance sheet and capital to grow.”

Fox Chase Bancorp, Inc. will host a conference call to discuss its third quarter 2011 results on Thursday, October 27, 2011 at 9:00 am EDT.  The general public can access the call by dialing (877) 317-6789.  A replay of the conference call will be available through November 18, 2011 by dialing (877) 344-7529; use Conference ID: 10005309.

Fox Chase Bancorp, Inc. is the stock holding company of Fox Chase Bank. The Bank is a federally chartered savings bank originally established in 1867.  The Bank offers traditional banking services and products from its main office in Hatboro, Pennsylvania and ten branch offices in Bucks, Montgomery, Chester, Delaware and Philadelphia Counties in Pennsylvania and Atlantic and Cape May Counties in New Jersey.  For more information, please visit the Bank’s website at www.foxchasebank.com.

This news release contains forward-looking statements within the meaning of the federal securities laws. Forward-looking statements can generally be identified by the fact that they do not relate strictly to historical or current facts.  They often include words like “believe,” “expect,” “anticipate,” “estimate” and “intend” or future or conditional verbs such as “will,” “would,” “should,” “could” or “may.”  Statements in this release that are not strictly historical are forward-looking and are based upon current expectations that may differ materially from actual results.  These forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those anticipated by the statements made herein.  These risks and uncertainties involve general economic trends, changes in interest rates, loss of deposits and loan demand to other financial institutions, substantial changes in financial markets; changes in real estate value and the real estate market, regulatory changes, possibility of unforeseen events affecting the industry generally, the uncertainties associated with newly developed or acquired operations, the outcome of pending litigation, and market disruptions and other effects of terrorist activities.  The Company undertakes no obligation to update these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unforeseen events, except as required under the rules and regulations of the Securities and Exchange Commission.

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CONSOLIDATED STATEMENTS OF OPERATIONS

(Dollars in Thousands, Except Per Share Data)

	Three Months Ended					Nine Months Ended
	September 30,					September 30,
	2011			2010		2011			2010
	(Unaudited)
INTEREST INCOME
Interest and fees on loans	$	9,021		$	9,382	$	26,579		$	27,317
Interest on mortgage related securities	2,425			2,691		7,651			9,438
Interest on investment securities available-for-sale
Taxable	116			142		380			315
Nontaxable	28			84		165			257
Other interest income	16			86		69			249
Total Interest Income	11,606			12,385		34,844			37,576
INTEREST EXPENSE
Deposits	2,099			3,734		6,769			12,531
Short-term borrowings	2			—		2			—
Federal Home Loan Bank advances	1,007			1,194		3,314			3,602
Other borrowed funds	437			437		1,296			1,296
Total Interest Expense	3,545			5,365		11,381			17,429
Net Interest Income	8,061			7,020		23,463			20,147
Provision for loan losses	1,034			2,889		2,909			4,855
Net Interest Income after Provision for Loan Losses	7,027			4,131		20,554			15,292
NONINTEREST INCOME
Service charges and other fee income	428			248		1,207			757
Net gain on sale of premises and equipment	—			6		—			6
Net gain on sale of other real estate owned	57			—		77			—
Impairment loss on real estate held for investment	(110		)	—		(110		)	—
Income on bank-owned life insurance	119			119		349			352
Other	133			57		222			152
Total other-than-temporary impairment loss	(206		)	—		(407		)	—
Less: Portion of loss recognized in other comprehensive income (before taxes)	46			—		46			—
Net other-than-temporary impairment loss	(160		)	—		(361		)	—
Net gains on sale of investment securities	—			1,963		—			1,963
Net investment securities (losses) gains	(160		)	1,963		(361		)	1,963
Total Noninterest Income	467			2,393		1,384			3,230
NONINTEREST EXPENSE
Salaries, benefits and other compensation	3,297			3,070		9,678			9,016
Occupancy expense	457			455		1,388			1,394
Furniture and equipment expense	107			113		314			346
Data processing costs	439			408		1,277			1,237
Professional fees	410			307		1,245			924
Marketing expense	95			75		240			241
FDIC premiums	170			343		682			1,116
Provision for loss on other real estate owned	310			345		410			379
Other real estate owned expense	5			46		49			75
Other	400			396		1,185			1,212
Total Noninterest Expense	5,690			5,558		16,468			15,940
Income Before Income Taxes	1,804			966		5,470			2,582
Income tax provision	572			274		1,735			731
Net Income	$	1,232		$	692	$	3,735		$	1,851
Earnings per share:
Basic	$	0.09		$	0.05	$	0.28		$	0.13
Diluted	$	0.09		$	0.05	$	0.28		$	0.13

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CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(Dollars in Thousands, Except Share Data)

	September 30,			December 31,
	2011			2010
	(Unaudited)
ASSETS
Cash and due from banks	$	132		$	156
Interest-earning demand deposits in other banks	5,327			38,158
Total cash and cash equivalents	5,459			38,314
Investment securities available-for-sale	24,343			32,671
Mortgage related securities available-for-sale	258,562			278,632
Mortgage related securities held-to-maturity (fair value of $46,309 at September 30, 2011 and $50,817 at December 31, 2010)	45,517			51,835
Loans, net of allowance for loan losses of $12,581 at September 30, 2011 and $12,443 at December 31, 2010	648,149			642,653
Other real estate owned	2,907			3,186
Federal Home Loan Bank stock, at cost	8,499			9,913
Bank-owned life insurance	13,487			13,138
Premises and equipment	10,549			10,693
Real estate held for investment	1,620			1,730
Accrued interest receivable	4,626			4,500
Mortgage servicing rights, net	329			448
Deferred tax asset, net	854			1,376
Other assets	6,547			6,414
Total Assets	$	1,031,448		$	1,095,503
LIABILITIES AND STOCKHOLDERS’ EQUITY
LIABILITIES
Deposits	$	666,522		$	711,763
Short-term borrowings	24,000			—
Federal Home Loan Bank advances	89,423			122,800
Other borrowed funds	50,000			50,000
Advances from borrowers for taxes and insurance	1,109			1,896
Accrued interest payable	435			580
Accrued expenses and other liabilities	2,588			2,760
Total Liabilities	834,077			889,799
STOCKHOLDERS’ EQUITY
Preferred stock ($.01 par value; 1,000,000 shares authorized, none issued and outstanding at September 30, 2011 and December 31, 2010)	—			—
Common stock ($.01 par value; 60,000,000 shares authorized, 13,772,410 shares issued and outstanding at September 30, 2011 and 60,000,000 shares authorized, 14,547,173 shares issued and outstanding at December 31, 2010)	146			145
Additional paid-in capital	134,540			133,997
Treasury stock, at cost (789,800 shares at September 30, 2011 and 0 shares at December 31, 2010)	(10,398		)	—
Common stock acquired by benefit plans	(11,699		)	(9,283		)
Retained earnings	77,132			74,307
Accumulated other comprehensive income, net	7,650			6,538
Total Stockholders’ Equity	197,371			205,704
Total Liabilities and Stockholders’ Equity	$	1,031,448		$	1,095,503

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SELECTED CONSOLIDATED FINANCIAL AND OTHER DATA OF THE COMPANY (UNAUDITED)

(Dollars in Thousands, Except Per Share Data)

	September 30,			June 30,			December 31,			September 30,
	2011			2011			2010			2010
CAPITAL RATIOS:
Total stockholders’ equity (to total assets) (1)	19.14		%	19.29		%	18.78		%	18.13		%
Tier 1 capital (to adjusted assets) (2)	14.95			14.01			13.60			13.09
Tier 1 risk —based capital (to risk-weighted assets) (2)	23.27			23.19			22.53			22.48
Total risk-based capital (to risk-weighted assets) (2)	24.28			24.18			23.76			23.70
ASSET QUALITY INDICATORS:
Nonperforming Assets:
Nonperforming loans	$	20,629		$	18,679		$	26,637		$	27,672
Accruing loans past due 90 days or more (4)	2,117			—			—			—
Total nonperforming loans and accruing loans 90 days or more past due	$	22,746		$	18,679		$	26,637		$	27,672
Other real estate owned	2,907			3,024			3,186			3,786
Total nonperforming assets	$	25,653		$	21,703		$	29,823		$	31,458
Ratio of nonperforming loans to total loans (3)	3.44		%	2.87		%	4.07		%	4.15		%
Ratio of nonperforming assets to total assets	2.49			1.99			2.72			2.78
Ratio of allowance for loan losses to total loans	1.90			1.91			1.90			1.70
Ratio of allowance for loan losses to nonperforming loans (3)	55.3			66.6			46.7			40.9
Impaired Loans:
Nonperforming loans (3)	$	22,746		$	18,679		$	26,637		$	27,672
Troubled debt restructurings	6,856			11,321			8,617			985
Other impaired loans	—			—			3,894			—
Total impaired loans	$	29,602		$	30,000		$	39,148		$	28,657
Past Due Loans:
30 - 59 days	$	846		$	1,578		$	5,001		$	5,638
60 - 89 days	3,612			442			144			82
Total	$	4,458		$	2,020		$	5,145		$	5,720

(1) Represents stockholders’ equity ratio of Fox Chase Bancorp, Inc.

(2) Represents capital ratios of Fox Chase Bank.

(3) Includes nonaccruing loans and accruing loans past due 90 days or more.

(4) Accruing loans past due 90 days or more includes $2.1 million of consumer loans that matured during the September quarter and are currently in the process of being sold or liquidated.  Management anticipates the loans will be paid off in full.

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	At or for the Three Months Ended
	September 30,			June 30,			September 30,
	2011			2011			2010
PERFORMANCE RATIOS (5):
Return on average assets	0.46		%	0.47		%	0.23		%
Return on average equity	2.42			2.41			1.34
Net interest margin	3.10			2.95			2.35
Efficiency ratio (6)	61.6			64.0			70.0
OTHER:
Tangible book value per share	$	14.33		$	14.41		$	14.10
Employees (full-time equivalents)	135			133			139

	At or for the Nine Months Ended
	September 30,		September 30,
	2011		2010
PERFORMANCE RATIOS (5):
Return on average assets	0.46	%	0.21	%
Return on average equity	2.41		1.61
Net interest margin	2.96		2.33
Efficiency ratio (6)	63.6		72.7

(5)Annualized.

(6)Represents noninterest expense, excluding provision for loss on other real estate owned, divided by the sum of net interest income and noninterest income, excluding gains or losses on the sale of securities, premises and equipment and other real estate owned and excluding impairment loss on real estate held for investment.

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AVERAGE BALANCE SHEET

(Dollars in Thousands, Unaudited)

	Three Months Ended September 30,
	2011							2010
				Interest							Interest
	Average			and		Yield/		Average			and		Yield/
	Balance			Dividends		Cost (2)		Balance			Dividends		Cost (2)
	(Dollars in thousands)
Assets:
Interest-earning assets:
Interest-earning demand deposits	$	28,268		$	16	0.22	%	$	137,373		$	86	0.25	%
Mortgage related securities	315,815			2,425		3.07	%	338,400			2,691		3.18	%
Taxable securities	31,516			116		1.47	%	32,823			142		1.73	%
Nontaxable securities	2,105			28		5.30	%	8,206			84		4.09	%
Loans (1)	652,669			9,021		5.45	%	672,041			9,382		5.52	%
Allowance for loan losses	(12,834		)					(12,005		)
Net loans	639,835			9,021				660,036			9,382
Total interest-earning assets	1,017,539			11,606		4.46	%	1,176,838			12,385		4.13	%
Noninterest-earning assets	44,186							47,787
Total assets	$	1,061,725						$	1,224,625
Liabilities and equity:
Interest-bearing liabilities:
Interest-bearing deposits	596,979			2,099		1.40	%	755,477			3,734		1.96	%
Borrowings	160,201			1,446		3.53	%	174,590			1,631		3.65	%
Total interest-bearing liabilities	757,180			3,545		1.85	%	930,067			5,365		2.28	%
Noninterest-bearing deposits	91,414							73,206
Other noninterest-bearing liabilities	9,176							14,155
Total liabilities	857,770							1,017,428
Stockholders’ equity	195,957							197,571
Accumulated comprehensive income	7,998							9,626
Total stockholder’s equity	203,955							207,197
Total liabilities and stockholders’ equity	$	1,061,725						$	1,224,625
Net interest income				$	8,061						$	7,020
Interest rate spread						2.61	%						1.85	%
Net interest margin						3.10	%						2.35	%

(1)Nonperforming loans are included in average balance computation.

(2)Yields are not presented on a tax-equivalent basis.

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AVERAGE BALANCE SHEET

(Dollars in Thousands, Unaudited)

	Three Months Ended							Three Months Ended
	September 30, 2011							June 30, 2011
				Interest							Interest
	Average			and		Yield/		Average			and		Yield/
	Balance			Dividends		Cost (2)		Balance			Dividends		Cost (2)
	(Dollars in thousands)
Assets:
Interest-earning assets:
Interest-earning demand deposits	$	28,268		$	16	0.22	%	$	43,479		$	25	0.23	%
Mortgage related securities	315,815			2,425		3.07	%	329,439			2,665		3.24	%
Taxable securities	31,516			116		1.47	%	32,032			124		1.54	%
Nontaxable securities	2,105			28		5.30	%	5,271			67		5.07	%
Loans (1)	652,669			9,021		5.45	%	638,747			8,726		5.43	%
Allowance for loan losses	(12,834		)					(12,926		)	—
Net loans	639,835			9,021				625,821			8,726
Total interest-earning assets	1,017,539			11,606		4.46	%	1,036,042			11,607		4.40	%
Noninterest-earning assets	44,186							45,334
Total assets	$	1,061,725						$	1,081,376
Liabilities and equity:
Interest-bearing liabilities:
Interest-bearing deposits	596,979			2,099		1.40	%	600,405			2,242		1.50	%
Borrowings	160,201			1,446		3.53	%	171,268			1,585		3.66	%
Total interest-bearing liabilities	757,180			3,545		1.85	%	771,673			3,827		1.98	%
Noninterest-bearing deposits	91,414							91,511
Other noninterest-bearing liabilities	9,176							9,588
Total liabilities	857,770							872,772
Stockholders’ equity	195,957							201,636
Accumulated comprehensive income	7,998							6,968
Total stockholder’s equity	203,955							208,604
Total liabilities and stockholders’ equity	$	1,061,725						$	1,081,376
Net interest income				$	8,061						$	7,780
Interest rate spread						2.61	%						2.42	%
Net interest margin						3.10	%						2.95	%

(1)Nonperforming loans are included in average balance computation.

(2)Yields are not presented on a tax-equivalent basis.

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AVERAGE BALANCE SHEET

(Dollars in Thousands, Unaudited)

	Nine Months Ended September 30,
	2011							2010
				Interest							Interest
	Average			and		Yield/		Average			and		Yield/
	Balance			Dividends		Cost (2)		Balance			Dividends		Cost (2)
	(Dollars in thousands)
Assets:
Interest-earning assets:
Interest-earning demand deposits	$	40,141		$	69	0.23	%	$	89,233		$	249	0.37	%
Mortgage related securities	325,387			7,651		3.14	%	365,720			9,438		3.44	%
Taxable securities	32,464			380		1.56	%	25,820			315		1.63	%
Nontaxable securities	4,767			165		4.62	%	8,538			257		4.02	%
Loans (1)	646,002			26,579		5.45	%	657,860			27,317		5.51	%
Allowance for loan losses	(12,851		)					(11,304		)
Net loans	633,151			26,579				646,556			27,317
Total interest-earning assets	1,035,910			34,844		4.41	%	1,135,867			37,576		4.35	%
Noninterest-earning assets	42,140							47,476
Total assets	$	1,078,050						$	1,183,343
Liabilities and equity:
Interest-bearing liabilities:
Interest-bearing deposits	606,981			6,769		1.49	%	776,417			12,531		2.16	%
Borrowings	167,949			4,612		3.62	%	176,789			4,898		3.65	%
Total interest-bearing liabilities	774,930			11,381		1.95	%	953,206			17,429		2.44	%
Noninterest-bearing deposits	90,021							67,244
Other noninterest-bearing liabilities	6,686							9,334
Total liabilities	871,637							1,029,784
Stockholders’ equity	199,263							145,232
Accumulated comprehensive income	7,150							8,327
Total stockholder’s equity	206,413							153,559
Total liabilities and stockholders’ equity	$	1,078,050						$	1,183,343
Net interest income				$	23,463						$	20,147
Interest rate spread						2.46	%						1.91	%
Net interest margin						2.96	%						2.33	%

(1)           Nonperforming loans are included in average balance computation.

(2)           Yields are not presented on a tax-equivalent basis.

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