0000914260-17-000047.txt : 20171018 0000914260-17-000047.hdr.sgml : 20171018 20171018161555 ACCESSION NUMBER: 0000914260-17-000047 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20171018 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20171018 DATE AS OF CHANGE: 20171018 FILER: COMPANY DATA: COMPANY CONFORMED NAME: First Connecticut Bancorp, Inc. CENTRAL INDEX KEY: 0001511198 STANDARD INDUSTRIAL CLASSIFICATION: SAVINGS INSTITUTIONS, NOT FEDERALLY CHARTERED [6036] IRS NUMBER: 000000000 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-35209 FILM NUMBER: 171142765 BUSINESS ADDRESS: STREET 1: ONE FARM GLEN BOULEVARD CITY: FARMINGTON STATE: CT ZIP: 06032 BUSINESS PHONE: 860-676-4600 MAIL ADDRESS: STREET 1: ONE FARM GLEN BOULEVARD CITY: FARMINGTON STATE: CT ZIP: 06032 8-K 1 fcb8k-101817.htm FIRST CONNECTICUT BANCORP, INC. 8-K 10 18 17

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 18, 2017
First Connecticut Bancorp, Inc.
 (Exact name of registrant as specified in its charter)

Maryland
333-171913
45-1496206
(State or other jurisdiction of incorporation)
(Commission File Number)
(IRS Employer Identification No.)

One Farm Glen Boulevard, Farmington, Connecticut 06032
(860) 676-4600
(Address and Telephone Number)

N/A
(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:
 
☐
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
☐
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
☐
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
☐
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR 230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR 240.12b-2).

Emerging growth company
☐
   
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
☐

TABLE OF CONTENTS
 
Item 2.02
Results of Operations and Financial Conditions
Item 9.01
Financial Statements and Exhibits
SIGNATURES
EXHIBIT INDEX
Press Release

 
Item 2.02
Results of Operations and Financial Conditions
   
 
On October 18, 2017, First Connecticut Bancorp, Inc., the holding company for Farmington Bank, issued a Press Release describing its results of operations for the third quarter ended September 30, 2017.
 
A copy of the Press Release is included as Exhibit 99.1 to this current Form 8-K and is incorporated herein by reference.
   
Item 9.01
Financial Statements and Exhibits
(a)
Not applicable.
(b)
Not applicable.
(c)
Not applicable.
(d)
Exhibits.
   
   


Exhibit Number
Description
   
Press Release dated October 18, 2017.

2

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.
   
 
FIRST CONNECTICUT BANCORP, INC.
 
Registrant
   
   
   
October 18, 2017
By:  /s/ John J. Patrick, Jr.
 
John J. Patrick, Jr.
 
Chairman, President and
 
and Chief Executive Officer




3
EXHIBIT INDEX


Exhibit Number
Description
   
Press Release dated October 18, 2017.



4
 EX-99.1 2 ex99-1.htm EXHIBIT 99.1 - PRESS RELEASE

Exhibit 99.1
 
First Connecticut Bancorp, Inc. reports third quarter 2017 earnings of $0.35 diluted earnings per share

 
FARMINGTON, Conn., October 18, 2017 – First Connecticut Bancorp, Inc. (NASDAQ: FBNK), the holding company for Farmington Bank, reported a 48% increase in net income to $5.6 million, or $0.35 diluted earnings per share for the quarter ended September 30, 2017 compared to net income of $3.8 million, or $0.25 diluted earnings per share for the quarter ended September 30, 2016.

  "I am pleased that we continue to report strong earnings driven by organic loan and deposit growth coupled with expense management and pristine asset quality. The results are reflective of our disciplined strategic approach to growing market share and building franchise value," stated John J. Patrick Jr., First Connecticut Bancorp's Chairman, President and CEO.

Financial Highlights

·
Net interest income increased $1.0 million to $20.8 million in the third quarter of 2017 compared to the linked quarter and increased $3.1 million compared to the third quarter of 2016.

·
Net interest margin was 2.95% in the third quarter of 2017 compared to 2.92% in the linked quarter and 2.74% in the prior year quarter. Net interest margin, excluding $165,000 prepayment penalty fees, was 2.93% in the third quarter of 2017.

·
Efficiency ratio was 66.38% in the third quarter of 2017 compared to 66.31% in the linked quarter and 72.53% in the prior year quarter.

·
Noninterest expense to average assets was 2.11% in the third quarter of 2017 compared to 2.12% in the linked quarter and 2.22% in the prior year quarter.

·
Organic loan growth remained strong during the third quarter of 2017 as loans increased $32.0 million to $2.7 billion at September 30, 2017 primarily due to a $21.0 million increase in commercial real estate loans and a $6.9 million increase in residential real estate loans.  Loans increased $222.2 million or 9% from a year ago.

·
Overall deposits increased $137.5 million to $2.4 billion in the third quarter of 2017 compared to the linked quarter and increased $134.7 million or 6% from a year ago.

·
Loans to deposits ratio was 113% for the quarter ended September 30, 2017 compared to 119% in the linked quarter and 110% in the third quarter of 2016.

·
Tangible book value per share increased to $17.12 for the quarter ended September 30, 2017 compared to $16.86 on a linked quarter basis and $16.17 at September 30, 2016.

·
Checking accounts grew by 2% or 1,235 net new accounts in the third quarter of 2017 and 6% or 3,538 net new accounts from a year ago.

·
Asset quality remained strong as loan delinquencies 30 days and greater represented 0.66% of total loans at September 30, 2017 compared to 0.60% of total loans at June 30, 2017 and 0.74% at September 30, 2016.  Non-accrual loans represented 0.57% of total loans at September 30, 2017 compared to 0.60% of total loans at June 30, 2017 and 0.72% of total loans at September 30, 2016.

·
The allowance for loan losses represented 0.82% of total loans at September 30, 2017 compared to 0.83% of total loans at June 30, 2017 and 0.86% at September 30, 2016.

·
The Company paid a quarterly cash dividend of $0.14 per share during the third quarter, an increase of $0.02 compared to the linked quarter and an increase of $0.06 from a year ago.

Third quarter 2017 compared with second quarter 2017

Net interest income

·
Net interest income increased $1.0 million to $20.8 million in the third quarter of 2017 compared to the linked quarter primarily due to a $68.5 million increase in the average loans balance and an 8 basis point increase in the loans yield to 3.73% offset by a $463,000 increase in interest expense.

·
Net interest margin was 2.95% in the third quarter of 2017 compared to 2.92% in the linked quarter. Net interest margin, excluding $165,000 prepayment penalty fees, was 2.93% in the third quarter.

·
The cost of interest-bearing liabilities increased 5 basis points to 84 basis points in the third quarter of 2017 compared to 79 basis points in the linked quarter.

Provision for loan losses

·
Provision for loan losses was $217,000 for the third quarter of 2017 compared to $710,000 for the linked quarter.

·
Net charge-offs in the quarter were $52,000 or 0.01% to average loans (annualized) compared to $22,000 or 0.00% to average loans (annualized) in the linked quarter.

·
The allowance for loan losses represented 0.82% of total loans at September 30, 2017 and 0.83% of total loans at June 30, 2017.

Noninterest income

·
Total noninterest income decreased $576,000 to $3.3 million in the third quarter of 2017 compared to the linked quarter primarily due to a $241,000 decrease in bank-owned life insurance income and a $585,000 decrease in other noninterest income offset by a $161,000 increase in net gain on loans sold.

·
Net gain on loans sold increased to $872,000 from $711,000 primarily due to an increase in volume.

·
Bank-owned life insurance income decreased $241,000 primarily due to receiving $271,000 in death benefit proceeds in the linked quarter.

·
Other noninterest income decreased primarily due to swap fees totaling $251,000 compared to $562,000 in the linked quarter and a decrease in SBIC fund income of $229,000.

Noninterest expense

·
Noninterest expense increased $41,000 in the third quarter of 2017 to $15.9 million compared to the linked quarter primarily due to a $125,000 increase in occupancy expenses and a $197,000 increase in other operating expenses offset by a $368,000 decrease in salaries and employee benefits.

·
Salaries and employee benefits decreased $368,000 to $9.7 million in the third quarter primarily due to $343,000 in severance expense in the linked quarter.
 
Income tax expense

·
Income tax expense was $2.4 million in the third quarter of 2017 and $2.1 million in the second quarter of 2017.

Third quarter 2017 compared with third quarter 2016

Net interest income

·
Net interest income increased $3.1 million to $20.8 million in the third quarter of 2017 compared to the prior year quarter due primarily to a $267.9 million increase in the average loans balance and a 19 basis point increase in the loans yield to 3.73% offset by a $706,000 increase in interest expense.

·
Net interest margin was 2.95% in the third quarter of 2017 compared to 2.74% in the prior year quarter.  Net interest margin, excluding $165,000 prepayment penalty fees, was 2.93% in the third quarter of 2017.

·
The cost of interest-bearing liabilities increased 5 basis points to 84 basis points in the third quarter of 2017 compared to 79 basis points in the prior year quarter.

Provision for loan losses

·
Provision for loan losses was $217,000 for the third quarter of 2017 compared to $698,000 for the prior year quarter.

·
Net charge-offs in the quarter were $52,000 or 0.01% to average loans (annualized) compared to $155,000 or 0.03% to average loans (annualized) in the prior year quarter.

·
The allowance for loan losses represented 0.82% of total loans at September 30, 2017 and 0.86% of total loans at September 30, 2016.

Noninterest income

·
Total noninterest income decreased $385,000 to $3.3 million in the third quarter of 2017 compared to the prior year quarter primarily due a $398,000 decrease in other noninterest income.

·
Other noninterest income decreased primarily due to a decrease in swap fees totaling $251,000 compared to $692,000 the prior year quarter and a $184,000 decrease in banking derivatives offset by a $172,000 impairment on a SBIC fund in the prior year quarter.
 
Noninterest expense

·
Noninterest expense increased $435,000 in the third quarter of 2017 to $15.9 million compared to the prior year quarter primarily due to a $383,000 increase in salaries and employee benefits expense.

Income tax expense

·
Income tax expense was $2.4 million in the third quarter of 2017 and $1.5 million in the prior year quarter.  Increase in income tax expense was primarily due to a $2.8 million increase in income over the prior year.

September 30, 2017 compared to September 30, 2016

Financial Condition

·
Total assets increased $169.7 million or 6% at September 30, 2017 to $3.0 billion compared to $2.8 billion at September 30, 2016, reflecting a $221.3 million increase in net loans offset by a $45.5 million decrease in cash and cash equivalents.

·
Our investment portfolio totaled $144.1 million at September 30, 2017 compared to $141.4 million at September 30, 2016, an increase of $2.7 million.

·
Net loans increased $221.3 million or 9% at September 30, 2017 to $2.7 billion compared to $2.5 billion at September 30, 2016 due to our continued focus on commercial and residential lending.

·
Deposits increased $134.7 million or 6% to $2.4 billion at September 30, 2017 compared to $2.2 billion at September 30, 2016 primarily due to an increase in retail deposits as we continue to develop and grow relationships in the geographical areas we serve.  We had municipal deposit balances totaling $451.8 million and $459.3 million at September 30, 2017 and 2016, respectively.

·
Federal Home Loan Bank of Boston advances increased $50.9 million to $271.5 million at September 30, 2017 compared to $220.6 million at September 30, 2016.

Asset Quality

·
At September 30, 2017 the allowance for loan losses represented 0.82% of total loans and 145.06% of non-accrual loans, compared to 0.83% of total loans and 137.54% of non-accrual loans at June 30, 2017 and 0.86% of total loans and 119.26% of non-accrual loans at September 30, 2016.

·
Loan delinquencies 30 days and greater represented 0.66% of total loans at September 30, 2017 compared to 0.60% of total loans at June 30, 2017 and 0.74% of total loans at September 30, 2016.

·
Non-accrual loans represented 0.57% of total loans at September 30, 2017 compared to 0.60% of total loans at June 30, 2017 and 0.72% of total loans at September 30, 2016.

·
Net charge-offs in the quarter were $52,000 or 0.01% to average loans (annualized) compared to $22,000 or 0.00% to average loans (annualized) in the linked quarter and $155,000 or 0.03% to average loans (annualized) in the prior year quarter.

Capital and Liquidity

·
The Company remained well-capitalized with an estimated total capital to risk-weighted asset ratio of 12.50% at September 30, 2017.

·
Tangible book value per share is $17.12 compared to $16.86 on a linked quarter basis and $16.17 at September 30, 2016.

·
The Company had 600,945 shares remaining to repurchase at September 30, 2017 from prior regulatory approval. Repurchased shares are held as treasury stock and will be available for general corporate purposes.

·
At September 30, 2017, the Company continued to have adequate liquidity including significant unused borrowing capacity at the Federal Home Loan Bank of Boston and the Federal Reserve Bank, as well as access to funding through brokered deposits and pre-approved unsecured lines of credit.


About First Connecticut Bancorp, Inc.

First Connecticut Bancorp, Inc. (NASDAQ: FBNK) is a Maryland-chartered stock holding company that wholly owns Farmington Bank. Farmington Bank is a full-service, community bank with 24 branch locations throughout central Connecticut and western Massachusetts, offering commercial and residential lending as well as wealth management services. Established in 1851, Farmington Bank is a diversified consumer and commercial bank with an ongoing commitment to contribute to the betterment of the communities in our region. For more information regarding the Bank's products and services and for First Connecticut Bancorp, Inc. investor relations information, please visit www.farmingtonbankct.com.

Conference Call

First Connecticut will host a conference call on Thursday, October 19, 2017 at 10:30am Eastern Time to discuss third quarter results.  Those wishing to participate in the call may dial-in to the call at 1-888-336-7151.  The Canada dial-in number is 1-855-669-9657 and the international dial-in number is 1-412-902-4177.  A webcast of the call will be available on the Investor Relations Section of the Farmington Bank website for an extended period of time.

Forward Looking Statements

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

Non-GAAP Financial Measures

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

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

We utilize these measures for internal planning and forecasting purposes. These non-GAAP financial measures should not be considered a substitute for GAAP basis measures and results, and we strongly encourage investors to review our consolidated financial statements in their entirety and not to rely on any single financial measure.
First Connecticut Bancorp, Inc.
Selected Financial Data (Unaudited)
 
At or for the Three Months Ended     
 
September 30,
June 30,
  
March 31,
  
December  31,
September 30,
(Dollars in thousands, except per share data)
2017
  
2017
  
2017
  
2016
  
2016
  
Selected Financial Condition Data:
                    
                     
Total assets
 $    3,001,679
  
 $    2,992,126
  
 $    2,904,264
  
 $    2,837,555
  
 $    2,831,960
  
Cash and cash equivalents
           44,475
  
           46,551
  
           36,427
  
           47,723
  
           89,940
  
Securities held-to-maturity, at amortized cost
           56,848
  
           50,655
  
           50,320
  
           33,061
  
             7,338
  
Securities available-for-sale, at fair value
           87,299
  
         112,443
  
         105,541
  
         103,520
  
         134,094
  
Federal Home Loan Bank of Boston stock, at cost
           15,954
  
           19,583
  
           16,418
  
           16,378
  
           15,139
  
Loans, net
       2,676,411
  
       2,644,618
  
       2,585,521
  
       2,525,983
  
       2,455,101
  
Deposits
       2,382,551
  
       2,245,004
  
       2,287,852
  
       2,215,090
  
       2,247,873
  
Federal Home Loan Bank of Boston advances
         271,458
  
         389,458
  
         282,057
  
         287,057
  
         220,600
  
Total stockholders' equity
         273,193
  
         268,836
  
         264,667
  
         260,176
  
         255,615
  
Allowance for loan losses
           22,202
  
           22,037
  
           21,349
  
           21,529
  
           21,263
  
Non-accrual loans
           15,305
  
           16,022
  
           15,976
  
           17,561
  
           17,829
  
Impaired loans
           29,924
  
           30,007
  
           32,407
  
           34,273
  
           37,599
  
Loan delinquencies 30 days and greater
           17,808
  
           16,059
  
           17,346
  
           17,271
  
           18,238
  
                     
Selected Operating Data:
                    
                     
Interest income
 $        25,604
  
 $        24,116
  
 $        23,212
  
 $        22,160
  
 $        21,805
  
Interest expense
             4,756
  
             4,293
  
             3,962
  
             4,038
  
             4,050
  
    Net interest income
           20,848
  
           19,823
  
           19,250
  
           18,122
  
           17,755
  
    Provision for loan losses
                217
  
                710
  
                325
  
                616
  
                698
  
Net interest income after provision for loan losses
           20,631
  
           19,113
  
           18,925
  
           17,506
  
           17,057
  
Noninterest income
             3,300
  
             3,876
  
             3,165
  
             3,536
  
             3,685
  
Noninterest expense
           15,919
  
           15,878
  
           15,152
  
           15,099
  
           15,484
  
Income before income taxes
             8,012
  
             7,111
  
             6,938
  
             5,943
  
             5,258
  
Income tax expense
             2,415
  
             2,109
  
             1,845
  
             1,757
  
             1,485
  
                     
Net income
 $          5,597
  
 $          5,002
  
 $          5,093
  
 $          4,186
  
 $          3,773
  
                     
Performance Ratios (annualized):
                    
                     
Return on average assets
0.74%
  
0.68%
  
0.71%
  
0.59%
  
0.54%
  
Return on average equity
8.17%
  
7.43%
  
7.67%
  
6.43%
  
5.89%
  
Net interest rate spread (1)
2.77%
  
2.74%
  
2.76%
  
2.57%
  
2.56%
  
Net interest rate margin (2)
2.95%
  
2.92%
  
2.94%
  
2.75%
  
2.74%
  
Non-interest expense to average assets (3)
2.11%
  
2.12%
  
2.12%
  
2.13%
  
2.22%
  
Efficiency ratio (4)
66.38%
  
66.31%
  
67.85%
  
70.64%
  
72.53%
  
Average interest-earning assets to average
                  
     interest-bearing liabilities
128.50%
  
128.46%
  
129.85%
  
130.20%
  
129.42%
  
Loans to deposits
113%
  
119%
  
114%
  
115%
  
110%
  
                     
Asset Quality Ratios:
                    
                     
Allowance for loan losses as a percent of total loans
0.82%
  
0.83%
  
0.82%
  
0.85%
  
0.86%
  
Allowance for loan losses as a percent of
                  
     non-accrual loans
145.06%
  
137.54%
  
133.63%
  
122.60%
  
119.26%
  
Net charge-offs (recoveries) to average loans (annualized)
0.01%
  
0.00%
  
0.08%
  
0.06%
  
0.03%
  
Non-accrual loans as a percent of total loans
0.57%
  
0.60%
  
0.61%
  
0.69%
  
0.72%
  
Non-accrual loans as a percent of total assets
0.51%
  
0.54%
  
0.55%
  
0.62%
  
0.63%
  
Loan delinquencies 30 days and greater as a
                  
     percent of total loans
0.66%
  
0.60%
  
0.67%
  
0.68%
  
0.74%
  
                     
Per Share Related Data:
                    
                     
Basic earnings per share
 $            0.37
  
 $            0.33
  
 $            0.34
  
 $            0.28
  
 $            0.25
  
Diluted earnings per share
 $            0.35
  
 $            0.32
  
 $            0.32
  
 $            0.27
  
 $            0.25
  
Dividends declared per share
 $            0.14
  
 $            0.12
  
 $            0.11
  
 $            0.09
  
 $            0.08
  
Tangible book value (5)
 $          17.12
  
 $          16.86
  
 $          16.62
  
 $          16.37
  
 $          16.17
  
Common stock shares outstanding
     15,952,946
  
     15,942,614
  
     15,923,514
  
     15,897,698
  
     15,805,748
  
Weighted-average basic shares outstanding
     15,143,379
  
     15,107,190
  
     15,068,036
  
     14,973,610
  
     14,823,914
  
Weighted-average diluted shares outstanding
     15,820,659
  
     15,791,112
  
     15,691,338
  
     15,502,481
  
     15,192,006
  
 
(1)
Represents the difference between the yield on average interest-earning assets and the cost of average interest-bearing liabilities on a tax-equivalent basis.
(2)
Represents tax-equivalent net interest income as a percent of average interest-earning assets.
(3)
Represents core noninterest expense annualized divided by average assets.  See "Reconciliation of Non-GAAP Financial Measures" table.
(4)
Represents core noninterest expense divided by the sum of core net interest income and core noninterest income.
See "Reconciliation of Non-GAAP Financial Measures" table.
(5)
Represents ending stockholders' equity less goodwill and intangible assets (excluding mortgage servicing rights) divided by ending common shares outstanding.
The Company does not have goodwill and intangible assets for any of the periods presented.  See "Reconciliation of Non-GAAP Financial Measures" table.
First Connecticut Bancorp, Inc.
Selected Financial Data (Unaudited)
 
At or for the Three Months Ended       
 
September 30,
  
June 30,
  
March 31,
  
December 31,
  
September 30,
  
(Dollars in thousands)
2017
  
2017
  
2017
  
2016
  
2016
  
Capital Ratios:
                    
                     
Equity to total assets at end of period
9.10%
  
8.98%
  
9.11%
  
9.17%
  
9.03%
  
Average equity to average assets
9.10%
  
9.18%
  
9.28%
  
9.18%
  
9.20%
  
Total Capital (to Risk Weighted Assets)
12.50%
*
12.45%
  
12.67%
  
12.80%
  
12.57%
  
Tier I Capital (to Risk Weighted Assets)
11.57%
*
11.53%
  
11.74%
  
11.84%
  
11.62%
  
Common Equity Tier I Capital
11.57%
*
11.53%
  
11.74%
  
11.84%
  
11.62%
  
Tier I Leverage Capital (to Average Assets)
9.25%
*
9.36%
  
9.45%
  
9.39%
  
9.40%
  
Total equity to total average assets
9.07%
  
9.17%
  
9.25%
  
9.18%
  
9.17%
  
                     
* Estimated
                    
                     
Loans and Allowance for Loan Losses:
                    
                     
Real estate
                    
  Residential
$       969,679
  
$         962,732
  
$       954,764
  
$       907,946
  
$       864,054
  
  Commercial
      1,028,930
  
        1,020,560
  
         992,861
  
         979,370
  
         931,703
  
  Construction
           86,713
  
            74,063
  
           60,694
  
           49,679
  
           50,083
  
Commercial
         436,172
  
          431,243
  
         420,747
  
         430,539
  
         449,008
  
Home equity line of credit
         166,791
  
          168,278
  
         168,157
  
         170,786
  
         172,148
  
Other
             5,733
  
              5,410
  
             5,375
  
             5,348
  
             5,426
  
    Total loans
2,694,018
  
2,662,286
  
2,602,598
  
2,543,668
  
2,472,422
  
 Net deferred loan costs
4,595
  
              4,369
  
             4,272
  
             3,844
  
             3,942
  
    Loans
2,698,613
  
        2,666,655
  
      2,606,870
  
      2,547,512
  
      2,476,364
  
 Allowance for loan losses
(22,202)
  
           (22,037)
  
          (21,349)
  
          (21,529)
  
          (21,263)
  
    Loans, net
 $    2,676,411
  
 $     2,644,618
  
 $    2,585,521
  
 $    2,525,983
  
 $    2,455,101
  
                     
Deposits:
                    
                     
Noninterest-bearing demand deposits
$       437,372
  
$         445,049
  
$       437,385
  
$       441,283
  
$       419,664
  
Interest-bearing
                    
  NOW accounts
652,631
  
547,868
  
         622,844
  
         542,764
  
         590,213
  
  Money market
549,674
  
522,070
  
         521,759
  
         532,681
  
         536,979
  
  Savings accounts
233,330
  
241,898
  
         239,743
  
         233,792
  
         223,848
  
  Time deposits
509,544
  
488,119
  
         466,121
  
         464,570
  
         477,169
  
Total interest-bearing deposits
      1,945,179
  
        1,799,955
  
      1,850,467
  
      1,773,807
  
      1,828,209
  
    Total deposits
$     2,382,551
  
$      2,245,004
  
$     2,287,852
  
$     2,215,090
  
$     2,247,873
  
 
 
First Connecticut Bancorp, Inc.
Consolidated Statements of Condition (Unaudited)
                       
             
September 30,
  
June 30,
  
September 30,
             
2017
  
2017
  
2016
(Dollars in thousands)
          
Assets
                
Cash and due from banks
$            35,452
  
$            37,308
  
$            33,206
Interest bearing deposits with other institutions
9,023
  
9,243
  
             56,734
   
Total cash and cash equivalents
44,475
  
46,551
  
89,940
Securities held-to-maturity, at amortized cost
56,848
  
50,655
  
7,338
Securities available-for-sale, at fair value
87,299
  
112,443
  
134,094
Loans held for sale
6,902
  
2,537
  
5,462
Loans (1)
    
2,698,613
  
2,666,655
  
2,476,364
 
Allowance for loan losses
(22,202)
  
(22,037)
  
(21,263)
   
Loans, net
2,676,411
  
2,644,618
  
2,455,101
Premises and equipment, net
17,005
  
17,609
  
18,383
Federal Home Loan Bank of Boston stock, at cost
15,954
  
19,583
  
15,139
Accrued income receivable
8,039
  
7,939
  
6,413
Bank-owned life insurance
57,156
  
56,802
  
51,364
Deferred income taxes
13,965
  
13,970
  
15,136
Prepaid expenses and other assets
17,625
  
19,419
  
33,590
         
Total assets
$       3,001,679
  
$       2,992,126
  
$       2,831,960
                       
Liabilities and Stockholders' Equity
          
Deposits
              
 
Interest-bearing
$       1,945,179
  
$       1,799,955
  
$       1,828,209
 
Noninterest-bearing
437,372
  
445,049
  
419,664
             
2,382,551
  
2,245,004
  
2,247,873
Federal Home Loan Bank of Boston advances
271,458
  
389,458
  
220,600
Repurchase agreement borrowings
10,500
  
10,500
  
10,500
Repurchase liabilities
21,538
  
36,101
  
35,036
Accrued expenses and other liabilities
42,439
  
42,227
  
62,336
         
Total liabilities
2,728,486
  
2,723,290
  
2,576,345
                       
Stockholders' Equity
          
 
Common stock
181
  
181
  
181
 
Additional paid-in-capital
185,319
  
184,871
  
183,769
 
Unallocated common stock held by ESOP
(9,796)
  
(10,053)
  
(10,833)
 
Treasury stock, at cost
(29,620)
  
(29,770)
  
(31,645)
 
Retained earnings
133,337
  
129,972
  
120,487
 
Accumulated other comprehensive loss
(6,228)
  
(6,365)
  
(6,344)
         
Total stockholders' equity
273,193
  
268,836
  
255,615
         
Total liabilities and stockholders' equity
$       3,001,679
  
$       2,992,126
  
$       2,831,960
 
(1)
Loans include net deferred fees and unamortized premiums of $4.6 million, $4.4 million and $3.9 million at September 30, 2017, June 30, 2017 and September 30, 2016, respectively.
 
First Connecticut Bancorp, Inc.
Consolidated Statements of Income (Unaudited)
             
Three Months Ended   
  
Nine Months Ended
             
September 30,
June 30,
  
September 30,
September 30,
(Dollars in thousands, except per share data)
2017
  
2017
  
2016
  
2017
  
2016
Interest income
                  
Interest and fees on loans
                  
 
Mortgage
$        19,165
  
$        18,056
  
$        16,134
  
$      54,779
  
$      48,161
 
Other
    
5,535
  
5,209
  
4,983
  
15,691
  
14,555
Interest and dividends on investments
                  
 
United States Government and agency obligations
602
  
598
  
419
  
1,674
  
         1,285
 
Other bonds
6
  
7
  
13
  
20
  
              40
 
Corporate stocks
242
  
216
  
210
  
657
  
            681
Other interest income
54
  
30
  
46
  
111
  
            104
         
Total interest income
25,604
  
24,116
  
21,805
  
72,932
  
64,826
Interest expense
                  
Deposits
  
3,423
  
3,026
  
2,975
  
9,360
  
         8,446
Interest on borrowed funds
1,230
  
1,164
  
955
  
3,343
  
         2,902
Interest on repo borrowings
95
  
96
  
98
  
286
  
            289
Interest on repurchase liabilities
8
  
7
  
22
  
22
  
              56
         
Total interest expense
4,756
  
4,293
  
4,050
  
13,011
  
11,693
         
Net interest income
20,848
  
19,823
  
17,755
  
59,921
  
53,133
Provision for loan losses
217
  
710
  
698
  
1,252
  
1,716
         
Net interest income
                  
           
after provision for loan losses
20,631
  
19,113
  
17,057
  
58,669
  
51,417
Noninterest income
                  
Fees for customer services
1,662
  
1,572
  
1,600
  
4,740
  
         4,614
Net gain on loans sold
872
  
711
  
939
  
1,999
  
         2,180
Brokerage and insurance fee income
54
  
55
  
58
  
159
  
            166
Bank owned life insurance income
357
  
598
  
335
  
1,274
  
         1,056
Other
      
355
  
940
  
753
  
2,169
  
         1,186
         
Total noninterest income
3,300
  
3,876
  
3,685
  
10,341
  
9,202
Noninterest expense
                  
Salaries and employee benefits
9,668
  
10,036
  
9,285
  
29,031
  
       27,874
Occupancy expense
1,312
  
1,187
  
1,271
  
3,812
  
         3,679
Furniture and equipment expense
1,054
  
985
  
1,020
  
3,023
  
         3,099
FDIC assessment
419
  
410
  
392
  
1,257
  
         1,179
Marketing
  
717
  
708
  
682
  
1,992
  
         1,647
Other operating expenses
2,749
  
2,552
  
2,834
  
7,834
  
         7,927
         
Total noninterest expense
15,919
  
15,878
  
15,484
  
46,949
  
45,405
         
Income before income taxes
8,012
  
7,111
  
5,258
  
22,061
  
15,214
Income tax expense
2,415
  
2,109
  
1,485
  
6,369
  
         4,185
         
Net income
$          5,597
  
$          5,002
  
$          3,773
  
$      15,692
  
$      11,029
                               
Earnings per share:
                  
 
Basic
    
 $           0.37
  
 $           0.33
  
 $           0.25
  
 $        1.04
  
 $        0.74
 
Diluted
  
             0.35
  
             0.32
  
             0.25
  
           0.99
  
           0.73
Weighted average shares outstanding:
                  
 
Basic
    
    15,143,379
  
    15,107,190
  
14,823,914
  
 15,106,478
  
 14,770,282
 
Diluted
  
    15,820,659
  
    15,791,112
  
15,192,006
  
 15,768,177
  
 15,093,109
 
First Connecticut Bancorp, Inc.
Consolidated Average Balances, Yields and Rates (Unaudited)
                       
 
For The Three Months Ended         
 
September 30, 2017 
  
June 30, 2017  
  
September 30, 2016 
 
Average Balance
Interest and Dividends (1)
Yield/
Cost
Average Balance
Interest and Dividends (1)
Yield/
Cost
Average Balance
Interest and Dividends (1)
Yield/
Cost
(Dollars in thousands)
                      
Interest-earning assets:
                      
Loans
 $       2,697,978
 $      25,342
3.73%
  
 $ 2,629,493
 $      23,900
3.65%
  
 $ 2,430,114
 $      21,650
3.54%
Securities
             159,450
              660
1.64%
  
       157,230
              659
1.68%
  
       165,738
              481
1.15%
Federal Home Loan Bank of Boston stock
               18,284
              190
4.12%
  
         18,056
              162
3.60%
  
         18,206
              161
3.52%
Federal funds and other earning assets
               10,089
                54
2.12%
  
           7,715
                30
1.56%
  
         36,439
                46
0.50%
Total interest-earning assets
          2,885,801
         26,246
3.61%
  
    2,812,494
         24,751
3.53%
  
    2,650,497
         22,338
3.35%
Noninterest-earning assets
             126,234
      
       120,308
      
       135,828
    
Total assets
 $       3,012,035
      
 $ 2,932,802
      
 $ 2,786,325
    
                       
Interest-bearing liabilities:
                      
NOW accounts
 $          644,947
 $           832
0.51%
  
 $    595,350
 $           574
0.39%
  
 $    506,509
 $           385
0.30%
Money market
             519,265
              982
0.75%
  
       525,266
              979
0.75%
  
       525,301
           1,085
0.82%
Savings accounts
             233,878
                63
0.11%
  
       242,009
                63
0.10%
  
       221,981
                60
0.11%
Certificates of deposit
             489,203
           1,546
1.25%
  
       471,905
           1,410
1.20%
  
       481,901
           1,445
1.19%
Total interest-bearing deposits
          1,887,293
           3,423
0.72%
  
    1,834,530
           3,026
0.66%
  
    1,735,692
           2,975
0.68%
Federal Home Loan Bank of Boston Advances
             320,219
           1,230
1.52%
  
       315,665
           1,164
1.48%
  
       250,459
              955
1.52%
Repurchase agreement borrowings
               10,500
                95
3.59%
  
         10,500
                96
3.67%
  
         10,500
                98
3.71%
Repurchase liabilities
               27,695
                  8
0.11%
  
         28,728
                  7
0.10%
  
         51,297
                22
0.17%
Total interest-bearing liabilities
          2,245,707
           4,756
0.84%
  
    2,189,423
           4,293
0.79%
  
    2,047,948
           4,050
0.79%
Noninterest-bearing deposits
             446,428
      
       431,336
      
       417,917
    
Other noninterest-bearing liabilities
               45,905
      
         42,857
      
         64,201
    
Total liabilities
          2,738,040
      
    2,663,616
      
    2,530,066
    
Stockholders' equity
             273,995
      
       269,186
      
       256,259
    
Total liabilities and stockholders' equity
 $       3,012,035
      
 $ 2,932,802
      
 $ 2,786,325
    
                       
Tax-equivalent net interest income
  
 $      21,490
      
 $      20,458
      
 $      18,288
  
Less: tax-equivalent adjustment
  
             (642)
      
             (635)
      
             (533)
  
Net interest income
  
 $      20,848
      
 $      19,823
      
 $      17,755
  
                       
Net interest rate spread (2)
    
2.77%
      
2.74%
      
2.56%
Net interest-earning assets (3)
 $          640,094
      
 $    623,071
      
 $    602,549
    
Net interest margin (4)
    
2.95%
      
2.92%
      
2.74%
Average interest-earning assets to
                 
average interest-bearing liabilities   
128.50%
      
128.46%
      
129.42%
  
(1)
On a fully-tax equivalent basis.
(2)
Net interest rate spread represents the difference between the yield on average interest-earning assets and the cost of average interest-bearing liabilities on a tax-equivalent basis.
(3)
Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities.
(4)
Net interest margin represents tax-equivalent net interest income divided by average total interest-earning assets.
 
First Connecticut Bancorp, Inc.
Consolidated Average Balances, Yields and Rates (Unaudited)
               
 
For The Nine Months Ended September 30,  
 
2017  
  
2016  
 
Average
Balance
Interest and Dividends (1)
Yield/
Cost
  
Average
Balance
Interest and Dividends (1)
Yield/
Cost
(Dollars in thousands)
              
Interest-earning assets:
              
Loans
 $  2,635,035
 $      72,343
3.67%
  
 $ 2,394,991
 $      64,282
3.59%
Securities
        153,263
           1,848
1.61%
  
       156,876
           1,479
1.26%
Federal Home Loan Bank of Boston stock
          17,510
              503
3.84%
  
         18,590
              527
3.79%
Federal funds and other earning assets
            8,066
              111
1.84%
  
         28,677
              104
0.48%
Total interest-earning assets
     2,813,874
         74,805
3.55%
  
    2,599,134
         66,392
3.41%
Noninterest-earning assets
        121,577
      
       130,327
    
Total assets
 $  2,935,451
      
 $ 2,729,461
    
               
Interest-bearing liabilities:
              
NOW accounts
 $     614,464
 $        1,934
0.42%
  
 $    500,097
 $        1,101
0.29%
Money market
        524,610
           2,931
0.75%
  
       497,130
           3,010
0.80%
Savings accounts
        235,793
              187
0.11%
  
       221,635
              177
0.11%
Certificates of deposit
        476,069
           4,308
1.21%
  
       468,979
           4,158
1.18%
Total interest-bearing deposits
     1,850,936
           9,360
0.68%
  
    1,687,841
           8,446
0.67%
Federal Home Loan Bank of Boston Advances
        294,099
           3,343
1.52%
  
       267,527
           2,902
1.45%
Repurchase agreement borrowings
          10,500
              286
3.64%
  
         10,500
              289
3.66%
Repurchase liabilities
          27,146
                22
0.11%
  
         46,882
                56
0.16%
Total interest-bearing liabilities
     2,182,681
         13,011
0.80%
  
    2,012,750
         11,693
0.78%
Noninterest-bearing deposits
        436,990
      
       404,599
    
Other noninterest-bearing liabilities
          46,200
      
         59,668
    
Total liabilities
     2,665,871
      
    2,477,017
    
Stockholders' equity
        269,580
      
       252,444
    
Total liabilities and stockholders' equity
 $  2,935,451
      
 $ 2,729,461
    
               
Tax-equivalent net interest income
  
 $      61,794
      
 $      54,699
  
Less: tax-equivalent adjustment
  
          (1,873)
      
          (1,566)
  
Net interest income
  
 $      59,921
      
 $      53,133
  
               
Net interest rate spread (2)
    
2.75%
      
2.63%
Net interest-earning assets (3)
 $     631,193
      
 $    586,384
    
Net interest margin (4)
    
2.94%
      
2.81%
Average interest-earning assets to average
         
interest-bearing liabilities   
128.92%
      
129.13%
  
 
(1)
On a fully-tax equivalent basis.
(2)
Net interest rate spread represents the difference between the yield on average interest-earning assets and the cost of average interest-bearing liabilities on a tax-equivalent basis.
(3)
Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities.
(4)
Net interest margin represents tax-equivalent net interest income divided by average total interest-earning assets.
 
First Connecticut Bancorp, Inc.
Reconcilliation of Non-GAAP Financial Measures (Unaudited)
The table below presents a reconciliation of non-GAAP financial measures with financial measures defined by GAAP for the three months ended September 30, 2017, June 30, 2017, March 31, 2017, December 31, 2016 and September 30, 2016.  The Company believes the use of these non-GAAP financial measures provides additional clarity in assessing the results of the Company.
 
   
At or for the Three Months Ended     
   
September 30,
June 30,
  
March 31,
  
December 31,
September 30,
(Dollars in thousands, except per share data)
2017
  
2017
  
2017
  
2016
  
2016
  
Net Income
 $          5,597
  
 $          5,002
  
 $         5,093
  
 $         4,186
  
 $          3,773
  
 
Adjustments:
                    
 
Plus: Severance expense
-
  
343
  
-
  
-
  
-
  
 
Plus: Mortgage servicing rights (recovery) impairment
-
  
-
  
-
  
(283)
  
(91)
  
 
Less: Prepayment penalty fees
(165)
  
-
  
(84)
  
-
  
-
  
 
Less: Bank-owned life insurance proceeds
-
  
(271)
  
-
  
-
  
-
  
Total core adjustments before taxes
(165)
  
72
  
(84)
  
(283)
  
(91)
  
 
Tax (expense) benefit on core adjustments
58
  
(120)
  
29
  
99
  
32
  
 
Deferred tax asset write-off (1)
-
  
-
  
-
  
137
  
-
  
Total core adjustments after taxes
(107)
  
(48)
  
(55)
  
(47)
  
(59)
  
Total core net income
 $          5,490
  
 $          4,954
  
 $         5,038
  
 $         4,139
  
 $          3,714
  
                       
                       
Total net interest income
 $        20,848
  
 $         19,823
  
 $        19,250
  
 $       18,122
  
 $        17,755
  
 
Less: Prepayment penalty fees
(165)
  
-
  
(84)
  
-
  
-
  
Total core net interest income
 $        20,683
  
 $         19,823
  
 $        19,166
  
 $       18,122
  
 $        17,755
  
                       
Total noninterest income
 $          3,300
  
 $          3,876
  
 $         3,165
  
 $         3,536
  
 $          3,685
  
 
Plus: Mortgage servicing rights (recovery) impairment
-
  
-
  
-
  
(283)
  
(91)
  
 
Less: Bank-owned life insurance proceeds
-
  
(271)
  
-
  
-
  
-
  
Total core noninterest income
 $          3,300
  
 $          3,605
  
 $         3,165
  
 $         3,253
  
 $          3,594
  
                       
Total noninterest expense
 $        15,919
  
 $         15,878
  
 $        15,152
  
 $       15,099
  
 $        15,484
  
 
Less: Severance expense
-
  
(343)
  
-
  
-
  
-
  
Total core noninterest expense
 $        15,919
  
 $         15,535
  
 $        15,152
  
 $       15,099
  
 $        15,484
  
                       
Core earnings per common share, diluted
 $            0.35
  
 $            0.31
  
 $           0.32
  
 $          0.27
  
 $            0.24
  
                       
Core net interest rate margin (2)
2.93%
  
2.92%
  
2.92%
  
2.75%
  
2.74%
  
Core return on average assets (annualized)
0.73%
  
0.68%
  
0.70%
  
0.58%
  
0.53%
  
Core return on average equity (annualized)
8.01%
  
7.36%
  
7.59%
  
6.36%
  
5.80%
  
Core non-interest expense to average assets (annualized)
2.11%
  
2.12%
  
2.12%
  
2.13%
  
2.22%
  
Efficiency ratio (3)
66.38%
  
66.31%
  
67.85%
  
70.64%
  
72.53%
  
                       
Tangible book value (4)
 $          17.12
  
 $          16.86
  
 $         16.62
  
 $         16.37
  
 $          16.17
  
 
(1)
Represents a write-off of the remaining deferred tax asset associated with the establishment of the Bank's foundation in 2011.
(2)
Represents tax-equivalent core net interest income as a percent of average interest-earning assets.
(3)
Represents core noninterest expense divided by the sum of core net interest income and core noninterest income.
(4)
Represents ending stockholders' equity less goodwill and intangible assets (excluding mortgage servicing rights) divided by ending common shares outstanding.
The Company does not have goodwill and intangible assets for any of the periods presented.
 
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