0000914260-18-000002.txt : 20180124 0000914260-18-000002.hdr.sgml : 20180124 20180124161237 ACCESSION NUMBER: 0000914260-18-000002 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20180124 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20180124 DATE AS OF CHANGE: 20180124 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: 18545314 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-012418.htm FIRST CONNECTICUT BANCORP, INC. 8-K 1 24 18

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):  January 24, 2018
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 January 24, 2018, First Connecticut Bancorp, Inc., the holding company for Farmington Bank, issued a Press Release describing its results of operations for the fourth quarter and year ended December 31, 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 January 24, 2018.

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
   
   
   
January 24, 2018
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 January 24, 2018.



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

Exhibit 99.1
 
 
First Connecticut Bancorp, Inc. reports fourth quarter 2017 net income of $497,000 or $0.03 diluted earnings per share

Fourth quarter 2017 net income of $5.5 million or $0.34 diluted earnings per share excluding non-recurring items

FARMINGTON, Conn., January 24, 2018 – First Connecticut Bancorp, Inc. (NASDAQ: FBNK), the holding company for Farmington Bank, reported net income of $497,000 or $0.03 diluted earnings per share for the quarter ended December 31, 2017 compared to net income of $4.2 million or $0.27 diluted earnings per share for the quarter ended December 31, 2016.  Excluding non-recurring items, the Company reported a 32% increase in core net income to $5.5 million, or $0.34 diluted earnings per share for the quarter ended December 31, 2017 compared to core net income of $4.1 million, or $0.27 diluted earnings per share for the quarter ended December 31, 2016.

Net income for the full year was $16.2 million or $1.02 diluted earnings per share compared to $15.2 million or $1.00 diluted earnings per share in the prior year.  Excluding non-recurring items, core net income for the full year was $20.9 million, or $1.32 diluted earnings per share as compared to $14.8 million, or $0.97 diluted earnings per share in the prior year. Core net income excludes non-recurring items.

On December 22, 2017, the Tax Cuts and Jobs Act (the "Tax Act") was enacted, which lowered the Company's federal tax rate from 35% to 21% effective January 1, 2018.  As a result of the tax reduction, the Company recorded a reduction in the value of its net deferred tax asset resulting in a charge of $5.0 million to income tax expense for the fourth quarter of 2017.  However, the tax rate reduction will increase future earnings.  The Tax Act impact on earnings per share for the year 2018 is an estimated $0.24 - $0.25 increase.

"I am once again pleased to report strong core earnings for the fourth quarter of $0.34 per share and $1.32 per share for the year. Since going public in 2011, we have had six consecutive years of earnings per share growth.  An increase in core earnings combined with internal operational efficiencies continues to have a positive effect on return on assets, return on equity and our efficiency ratio" stated John J. Patrick Jr., First Connecticut Bancorp's Chairman, President and CEO.

"Additionally, we increased our dividend $0.06 or 67% during 2017 as we continue to reward shareholders with a combination of share price appreciation and increased dividend yield."

Financial Highlights

·
Organic loan growth remained strong during the fourth quarter of 2017 as loans increased $49.5 million to $2.7 billion at December 31, 2017 primarily due to a $34.8 million increase in commercial real estate loans and a $19.7 million increase in residential real estate loans.  Loans increased $200.6 million or 8% from a year ago.

·
Overall deposits increased $51.5 million to $2.4 billion in the fourth quarter of 2017 compared to the linked quarter and increased $219.0 million or 10% from a year ago.

·
Loans to deposits ratio was 113% for the quarter ended December 31, 2017 compared to 113% in the linked quarter and 115% in the fourth quarter of 2016.

·
Checking accounts grew by 2% or 864 net new accounts in the fourth quarter of 2017 and 8% or 4,136 net new accounts from a year ago.

·
Net interest income decreased $320,000 to $20.5 million in the fourth quarter of 2017 compared to the linked quarter and increased $2.4 million compared to the fourth quarter of 2016.  Core net interest income decreased $191,000 compared to the linked quarter.

·
Net interest margin was 2.91% in the fourth quarter of 2017 compared to 2.95% in the linked quarter and 2.75% in the prior year quarter. Net interest margin, excluding $165,000 prepayment penalty fees, was 2.93% in the linked quarter of 2017.

·
Efficiency ratio was 65.06% in the fourth quarter of 2017 compared to 66.38% in the linked quarter and 70.64% in the prior year quarter.

·
Noninterest expense to average assets was 2.05% in the fourth quarter of 2017 compared to 2.11% in the linked quarter and 2.13% in the prior year quarter.

·
Tangible book value per share was $17.08 for the quarter ended December 31, 2017 compared to $17.12 on a linked quarter basis and $16.37 at December 31, 2016.

·
Asset quality remained strong as loan delinquencies 30 days and greater represented 0.63% of total loans at December 31, 2017 compared to 0.66% of total loans at September 30, 2017 and 0.68% at December 31, 2016.  Non-accrual loans represented 0.58% of total loans at December 31, 2017 compared to 0.57% of total loans at September 30, 2017 and 0.69% of total loans at December 31, 2016.

·
The allowance for loan losses represented 0.82% of total loans at December 31, 2017 compared to 0.82% of total loans at September 30, 2017 and 0.85% at December 31, 2016.

·
The Company paid a quarterly cash dividend of $0.15 per share during the fourth quarter, an increase of $0.01 compared to the linked quarter and an increase of $0.06 from a year ago.

Fourth quarter 2017 compared with third quarter 2017

Net interest income

·
Net interest income decreased $320,000 to $20.5 million in the fourth quarter of 2017 compared to the linked quarter primarily due to a 5 basis point increase in interest-bearing liabilities yield to 0.89%.

·
Net interest margin was 2.91% in the third quarter of 2017 compared to 2.95% in the linked quarter. Net interest margin, excluding $165,000 prepayment penalty fees, was 2.93% in the linked quarter.

·
The cost of interest-bearing liabilities increased 5 basis points to 89 basis points in the fourth quarter of 2017 compared to 84 basis points in the linked quarter.

Provision for loan losses

·
Provision for loan losses was $299,000 for the fourth quarter of 2017 compared to $217,000 for the linked quarter.

·
Net charge-offs in the quarter were $53,000 or 0.01% to average loans (annualized) compared to $52,000 or 0.01% to average loans (annualized) in the linked quarter.

·
The allowance for loan losses represented 0.82% of total loans at December 31, 2017 and September 30, 2017.

Noninterest income

·
Total noninterest income decreased $142,000 to $3.2 million in the fourth quarter of 2017 compared to the linked quarter primarily due to a $274,000 decrease in net gain on loans sold offset by a $129,000 increase in other noninterest income.

·
Net gain on loans sold decreased to $598,000 from $872,000 primarily due to a decrease in volume of loans sold.

·
Other noninterest income increased $129,000 to $484,000 primarily due to a $95,000 increase in mortgage banking derivatives.  Other noninterest income includes swap fees totaling $242,000 in the fourth quarter of 2017 compared to $251,000 in the linked quarter.

Noninterest expense

·
Noninterest expense decreased $532,000 to $15.4 million in the fourth quarter of 2017 compared to the linked quarter primarily due to a $123,000 decrease in furniture and equipment expenses, a $139,000 decrease in marketing expenses and a $132,000 decrease in other operating expenses.

Income tax expense

Income tax expense was $7.5 million in the fourth quarter of 2017 and $2.4 million in the third quarter of 2017.  As a result of the Tax Act, the Company recorded a reduction in the value of its net deferred tax asset resulting in a charge of $5.0 million to income tax expense in the fourth quarter of 2017.

Fourth quarter 2017 compared with fourth quarter 2016

Net interest income

·
Net interest income increased $2.4 million or 13% to $20.5 million in the fourth quarter of 2017 compared to the prior year quarter due primarily to a $216.1 million increase in the average loans balance and a 17 basis point increase in the loans yield to 3.69% offset by a $985,000 increase in interest expense.

·
Net interest margin was 2.91% in the fourth quarter of 2017 compared to 2.75% in the prior year quarter.

·
The cost of interest-bearing liabilities increased 12 basis points to 89 basis points in the fourth quarter of 2017 compared to 77 basis points in the prior year quarter.

Provision for loan losses

·
Provision for loan losses was $299,000 for the fourth quarter of 2017 compared to $616,000 for the prior year quarter.

·
Net charge-offs in the quarter were $53,000 or 0.01% to average loans (annualized) compared to $350,000 or 0.06% to average loans (annualized) in the prior year quarter.

·
The allowance for loan losses represented 0.82% of total loans at December 31, 2017 and 0.85% of total loans at December 31, 2016.

Noninterest income

·
Total noninterest income decreased $378,000 to $3.2 million in the fourth quarter of 2017 compared to the prior year quarter primarily due to a $327,000 decrease in net gain on loans sold and a $182,000 decrease in other noninterest income offset by a $126,000 increase in fees for customer services.
 
·
Net gain on loans sold decreased to $598,000 from $925,000 primarily due to a decrease in volume of loans sold.

·
Other noninterest income decreased primarily due to a $283,000 recovery in fair value in mortgage servicing rights in the prior year quarter offset by a $99,000 impairment on a SBIC fund in the prior year quarter.
 
Noninterest expense

·
Noninterest expense increased $288,000 to $15.4 million in the fourth quarter of 2017 compared to the prior year quarter primarily due to a $455,000 increase in salaries and employee benefits expense offset by a $232,000 decrease in other operating expenses.

·
Salaries and employee benefits increased $455,000 to $9.6 million primarily due to general salary increases which became effective in mid-March.

·
Other operating expenses decreased $232,000 to $2.6 million primarily due to a $134,000 reduction in 3rd party services.

Income tax expense

Income tax expense was $7.5 million in the fourth quarter of 2017 compared to $1.8 million in the prior year quarter. As a result of the Tax Act, the Company recorded a reduction in the value of its net deferred tax asset resulting in a charge of $5.0 million to income tax expense in the fourth quarter of 2017.  Income tax expense in the fourth quarter of 2016 included a $137,000 write-off of a deferred tax asset associated with the establishment of the Bank's foundation in 2011.

For the year ended December 31, 2017 compared with the year ended December 31, 2016

Net interest income

·
Net interest income increased $9.2 million or 13% to $80.4 million for the year ended 2017 compared to $71.3 million for the year ended 2016 primarily due to a $234.1 million increase in the average loans balance and an 11 basis point increase in the loans yield to 3.68% offset by a $2.3 million increase in interest expense.

·
Net interest margin was 2.93% for the year ended 2017 compared to 2.80% for the year ended 2016.

·
The total interest-earning assets yield increased 18 basis points to 3.57% for the year ended 2017 compared to 3.39% for the year ended 2016 primarily due to an increase in yield on our loan and securities portfolios.

·
The cost of interest-bearing liabilities increased 4 basis points to 82 basis points for the year ended 2017 compared to 78 basis points for the year ended 2016.

Provision for loan losses

·
Provision for loan losses was $1.6 million for the year ended 2017 compared to $2.3 million for the year ended 2016.

·
Net charge-offs for the year ended 2017 were $632,000 or 0.02% to average loans compared to $1.0 million or 0.04% to average loans for the year ended 2016.

·
The allowance for loan losses represented 0.82% of total loans at December 31, 2017 compared to 0.85% at December 31, 2016.

Noninterest income

·
Total noninterest income increased $761,000 to $13.5 million for the year ended 2017 compared to $12.7 million for the year ended 2016.

·
Fees for customer services increased $252,000 to $6.4 million for the year ended 2017 compared to the year ended 2016 driven by our growth in checking accounts and debit card fees.

·
Net gain on loans sold decreased $508,000 to $2.6 million for the year ended 2017 compared to the year ended 2016 as a result of a decrease in volume of loans sold.

·
Bank owned life insurance income increased $211,000 to $1.6 million for the year ended 2017 compared to the year ended 2016 primarily due to $194,000 more in bank owned life insurance proceeds in 2017 than in the prior year.

·
Other noninterest income increased $801,000 to $2.7 million for the year ended 2017 compared to the year ended 2016 primarily due to a $206,000 increase in swap fee income, a $161,000 increase in loan servicing fees for others and $319,000 SBIC fund impairment in the prior year offset by a $159,000 decrease in mortgage banking derivatives.

·
Other noninterest income includes swap fees totaling $1.8 million compared to $1.6 million in the prior year.

Noninterest expense

·
Noninterest expense increased $1.8 million to $62.3 million for the year ended 2017 compared to $60.5 million for the year ended 2016.

·
Salaries and employee benefits increased $1.6 million to $38.6 million for the year ended 2017 compared to the year ended 2016.  The increase is primarily due to general salary increases which became effective in mid-March and $343,000 in severance expense.

·
Marketing increased $400,000 primarily due to efforts to increase the Bank's sales support in central Connecticut and western Massachusetts.

·
Other operating expenses decreased $325,000 to $10.5 million for the year ended 2017 compared to the prior year primarily due to a $296,000 decrease in directors' share-based compensation expense as a result of the majority of the 2012 Stock Incentive Plan fully vesting in September 2016.

Income tax expense

·
Income tax expense was $13.9 million for the year ended 2017 compared to $5.9 million for the year ended 2016.  As a result of the Tax Act, the Company recorded a reduction in the value of its net deferred tax asset resulting in a charge of $5.0 million to income tax expense in the fourth quarter of 2017. Income tax expense in 2016 included a $137,000 write-off of a deferred tax asset associated with the establishment of the Bank's foundation in 2011.

December 31, 2017 compared to December 31, 2016

Financial Condition

·
Total assets increased $212.7 million or 8% at December 31, 2017 to $3.0 billion compared to $2.8 billion at December 31, 2016, reflecting a $199.7 million increase in net loans.

·
Our investment portfolio totaled $162.2 million at December 31, 2017 compared to $136.6 million at December 31, 2016, an increase of $25.7 million.

·
Net loans increased $199.7 million or 8% at December 31, 2017 to $2.7 billion compared to $2.5 billion at December 31, 2016 due to our continued focus on commercial and residential lending.

·
Deposits increased $219.0 million or 10% to $2.4 billion at December 31, 2017 compared to $2.2 billion at December 31, 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 $437.1 million and $394.5 million at December 31, 2017 and 2016, respectively.

·
Federal Home Loan Bank of Boston advances decreased $31.6 million to $255.5 million at December 31, 2017 compared to $287.1 million at December 31, 2016.

Asset Quality

·
At December 31, 2017 the allowance for loan losses represented 0.82% of total loans and 142.15% of non-accrual loans, compared to 0.82% of total loans and 145.06% of non-accrual loans at September 30, 2017 and 0.85% of total loans and 122.60% of non-accrual loans at December 31, 2016.

·
Loan delinquencies 30 days and greater represented 0.63% of total loans at December 31, 2017 compared to 0.66% of total loans at September 30, 2017 and 0.68% of total loans at December 31, 2016.

·
Non-accrual loans represented 0.58% of total loans at December 31, 2017 compared to 0.57% of total loans at September 30, 2017 and 0.69% of total loans at December 31, 2016.

·
Net charge-offs in the quarter were $53,000 or 0.01% to average loans (annualized) compared to $52,000 or 0.01% to average loans (annualized) in the linked quarter and $350,000 or 0.06% 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 12.38% at December 31, 2017.

·
Tangible book value per share is $17.08 compared to $17.12 on a linked quarter basis and $16.37 at December 31, 2016.

·
The Company had 600,945 shares remaining to repurchase at December 31, 2017 from prior regulatory approval. Repurchased shares are held as treasury stock and will be available for general corporate purposes.

·
At December 31, 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, January 25, 2018 at 10:30am Eastern Time to discuss fourth 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    
  
 
December  31,
September 30,
June 30,
  
March 31,
  
December  31,
(Dollars in thousands, except per share data)
2017
  
2017
  
2017
  
2017
  
2016
  
Selected Financial Condition Data:
                    
                     
Total assets
 $    3,050,286
  
 $    3,001,679
  
 $    2,992,126
  
 $    2,904,264
  
 $    2,837,555
  
Cash and cash equivalents
           35,350
  
           44,475
  
           46,551
  
           36,427
  
           47,723
  
Securities held-to-maturity, at amortized cost
           74,985
  
           56,848
  
           50,655
  
           50,320
  
           33,061
  
Securities available-for-sale, at fair value
           87,251
  
           87,299
  
         112,443
  
         105,541
  
         103,520
  
Federal Home Loan Bank of Boston stock, at cost
           15,537
  
           15,954
  
           19,583
  
           16,418
  
           16,378
  
Loans, net
       2,725,633
  
       2,676,411
  
       2,644,618
  
       2,585,521
  
       2,525,983
  
Deposits
       2,434,100
  
       2,382,551
  
       2,245,004
  
       2,287,852
  
       2,215,090
  
Federal Home Loan Bank of Boston advances
         255,458
  
         271,458
  
         389,458
  
         282,057
  
         287,057
  
Total stockholders' equity
         272,459
  
         273,193
  
         268,836
  
         264,667
  
         260,176
  
Allowance for loan losses
           22,448
  
           22,202
  
           22,037
  
           21,349
  
           21,529
  
Non-accrual loans
           15,792
  
           15,305
  
           16,022
  
           15,976
  
           17,561
  
Impaired loans
           30,194
  
           29,924
  
           30,007
  
           32,407
  
           34,273
  
Loan delinquencies 30 days and greater
           17,254
  
           17,808
  
           16,059
  
           17,346
  
           17,271
  
                     
Selected Operating Data:
                    
                     
Interest income
 $        25,551
  
 $        25,604
  
 $        24,116
  
 $        23,212
  
 $        22,160
  
Interest expense
             5,023
  
             4,756
  
             4,293
  
             3,962
  
             4,038
  
    Net interest income
           20,528
  
           20,848
  
           19,823
  
           19,250
  
           18,122
  
    Provision for loan losses
                299
  
                217
  
                710
  
                325
  
                616
  
Net interest income after provision for loan losses
           20,229
  
           20,631
  
           19,113
  
           18,925
  
           17,506
  
Noninterest income
             3,158
  
             3,300
  
             3,876
  
             3,165
  
             3,536
  
Noninterest expense
           15,387
  
           15,919
  
           15,878
  
           15,152
  
           15,099
  
Income before income taxes
             8,000
  
             8,012
  
             7,111
  
             6,938
  
             5,943
  
Income tax expense
             7,503
  
             2,415
  
             2,109
  
             1,845
  
             1,757
  
                     
Net income
 $             497
  
 $          5,597
  
 $          5,002
  
 $          5,093
  
 $          4,186
  
                     
Performance Ratios (annualized):
                    
                     
Return on average assets
0.07%
  
0.74%
  
0.68%
  
0.71%
  
0.59%
  
Core return on average assets
0.73%
  
0.73%
  
0.68%
  
0.70%
  
0.58%
  
Return on average equity
0.72%
  
8.17%
  
7.43%
  
7.67%
  
6.43%
  
Core return on average equity
7.86%
  
8.01%
  
7.36%
  
7.59%
  
6.36%
  
Net interest rate spread (1)
2.71%
  
2.77%
  
2.74%
  
2.76%
  
2.57%
  
Net interest rate margin (2)
2.91%
  
2.95%
  
2.92%
  
2.94%
  
2.75%
  
Non-interest expense to average assets (3)
2.05%
  
2.11%
  
2.12%
  
2.12%
  
2.13%
  
Efficiency ratio (4)
65.06%
  
66.38%
  
66.31%
  
67.85%
  
70.64%
  
Average interest-earning assets to average
                  
     interest-bearing liabilities
129.44%
  
128.50%
  
128.46%
  
129.85%
  
130.20%
  
Loans to deposits
113%
  
113%
  
119%
  
114%
  
115%
  
                     
Asset Quality Ratios:
                    
                     
Allowance for loan losses as a percent of total loans
0.82%
  
0.82%
  
0.83%
  
0.82%
  
0.85%
  
Allowance for loan losses as a percent of
                  
     non-accrual loans
142.15%
  
145.06%
  
137.54%
  
133.63%
  
122.60%
  
Net charge-offs (recoveries) to average loans (annualized)
0.01%
  
0.01%
  
0.00%
  
0.08%
  
0.06%
  
Non-accrual loans as a percent of total loans
0.58%
  
0.57%
  
0.60%
  
0.61%
  
0.69%
  
Non-accrual loans as a percent of total assets
0.52%
  
0.51%
  
0.54%
  
0.55%
  
0.62%
  
Loan delinquencies 30 days and greater as a
                  
     percent of total loans
0.63%
  
0.66%
  
0.60%
  
0.67%
  
0.68%
  
                     
Per Share Related Data:
                    
                     
Basic earnings per share
 $            0.03
  
 $            0.37
  
 $            0.33
  
 $            0.34
  
 $            0.28
  
Diluted earnings per share
 $            0.03
  
 $            0.35
  
 $            0.32
  
 $            0.32
  
 $            0.27
  
Dividends declared per share
 $            0.15
  
 $            0.14
  
 $            0.12
  
 $            0.11
  
 $            0.09
  
Tangible book value (5)
 $          17.08
  
 $          17.12
  
 $          16.86
  
 $          16.62
  
 $          16.37
  
Common stock shares outstanding
     15,952,946
  
     15,952,946
  
     15,942,614
  
     15,923,514
  
     15,897,698
  
Weighted-average basic shares outstanding
     15,174,285
  
     15,143,379
  
     15,107,190
  
     15,068,036
  
     14,973,610
  
Weighted-average diluted shares outstanding
     15,882,690
  
     15,820,659
  
     15,791,112
  
     15,691,338
  
     15,502,481
  
 
(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      
  
 
December 31,
  
September 30,
  
June 30,
  
March 31,
  
December 31,
  
(Dollars in thousands)
2017
  
2017
  
2017
  
2017
  
2016
  
Capital Ratios:
                    
                     
Equity to total assets at end of period
8.93%
  
9.10%
  
8.98%
  
9.11%
  
9.17%
  
Average equity to average assets
9.23%
  
9.10%
  
9.18%
  
9.28%
  
9.18%
  
Total Capital (to Risk Weighted Assets)
12.38%
*
12.50%
  
12.45%
  
12.67%
  
12.80%
  
Tier I Capital (to Risk Weighted Assets)
11.45%
*
11.57%
  
11.53%
  
11.74%
  
11.84%
  
Common Equity Tier I Capital
11.45%
*
11.57%
  
11.53%
  
11.74%
  
11.84%
  
Tier I Leverage Capital (to Average Assets)
9.23%
*
9.23%
  
9.36%
  
9.45%
  
9.39%
  
Total equity to total average assets
9.05%
  
9.07%
  
9.17%
  
9.25%
  
9.18%
  
                     
* Estimated
                    
                     
Loans and Allowance for Loan Losses:
                    
                     
Real estate
                    
  Residential
$       989,366
  
$         969,679
  
$       962,732
  
$       954,764
  
$       907,946
  
  Commercial
      1,063,755
  
        1,028,930
  
      1,020,560
  
         992,861
  
         979,370
  
  Construction
           90,059
  
            86,713
  
           74,063
  
           60,694
  
           49,679
  
Commercial
         429,116
  
          436,172
  
         431,243
  
         420,747
  
         430,539
  
Home equity line of credit
         165,070
  
          166,791
  
         168,278
  
         168,157
  
         170,786
  
Other
             5,650
  
              5,733
  
             5,410
  
             5,375
  
             5,348
  
    Total loans
2,743,016
  
2,694,018
  
2,662,286
  
2,602,598
  
2,543,668
  
 Net deferred loan costs
5,065
  
              4,595
  
             4,369
  
             4,272
  
             3,844
  
    Loans
2,748,081
  
        2,698,613
  
      2,666,655
  
      2,606,870
  
      2,547,512
  
 Allowance for loan losses
(22,448)
  
           (22,202)
  
          (22,037)
  
          (21,349)
  
          (21,529)
  
    Loans, net
 $    2,725,633
  
 $     2,676,411
  
 $    2,644,618
  
 $    2,585,521
  
 $    2,525,983
  
                     
Deposits:
                    
                     
Noninterest-bearing demand deposits
$       473,428
  
$         437,372
  
$       445,049
  
$       437,385
  
$       441,283
  
Interest-bearing
                    
  NOW accounts
623,135
  
652,631
  
         547,868
  
         622,844
  
         542,764
  
  Money market
559,297
  
549,674
  
         522,070
  
         521,759
  
         532,681
  
  Savings accounts
237,380
  
233,330
  
         241,898
  
         239,743
  
         233,792
  
  Certificates of deposit
540,860
  
509,544
  
         488,119
  
         466,121
  
         464,570
  
Total interest-bearing deposits
      1,960,672
  
        1,945,179
  
      1,799,955
  
      1,850,467
  
      1,773,807
  
    Total deposits
$     2,434,100
  
$      2,382,551
  
$     2,245,004
  
$     2,287,852
  
$     2,215,090
  
 
 
First Connecticut Bancorp, Inc.
Consolidated Statements of Condition (Unaudited)
                   
                   
   
December 31,
    
September 30,
    
December 31,
  
   
2017
    
2017
    
2016
  
(Dollars in thousands)
                  
Assets
                  
Cash and due from banks
  
$
33,320
    
$
35,452
    
$
44,086
  
Interest bearing deposits with other institutions
    
2,030
      
9,023
      
3,637
  
Total cash and cash equivalents
    
35,350
      
44,475
      
47,723
  
Securities held-to-maturity, at amortized cost
    
74,985
      
56,848
      
33,061
  
Securities available-for-sale, at fair value
    
87,251
      
87,299
      
103,520
  
Loans held for sale
    
5,295
      
6,902
      
3,270
  
Loans (1)
    
2,748,081
      
2,698,613
      
2,547,512
  
Allowance for loan losses
    
(22,448
)
    
(22,202
)
    
(21,529
)
Loans, net
    
2,725,633
      
2,676,411
      
2,525,983
  
Premises and equipment, net
    
16,845
      
17,005
      
18,002
  
Federal Home Loan Bank of Boston stock, at cost
    
15,537
      
15,954
      
16,378
  
Accrued income receivable
    
8,979
      
8,039
      
7,432
  
Bank-owned life insurance
    
57,511
      
57,156
      
51,726
  
Deferred income taxes
    
7,662
      
13,965
      
14,795
  
Prepaid expenses and other assets
    
15,238
      
17,625
      
15,665
  
Total assets
  
$
3,050,286
    
$
3,001,679
    
$
2,837,555
  
                         
Liabilities and Stockholders' Equity
                        
Deposits
                        
Interest-bearing
  
$
1,960,672
    
$
1,945,179
    
$
1,773,807
  
Noninterest-bearing
    
473,428
      
437,372
      
441,283
  
     
2,434,100
      
2,382,551
      
2,215,090
  
Federal Home Loan Bank of Boston advances
    
255,458
      
271,458
      
287,057
  
Repurchase agreement borrowings
    
10,500
      
10,500
      
10,500
  
Repurchase liabilities
    
34,496
      
21,538
      
18,867
  
Accrued expenses and other liabilities
    
43,273
      
42,439
      
45,865
  
Total liabilities
    
2,777,827
      
2,728,486
      
2,577,379
  
                         
Stockholders' Equity
                        
Common stock
    
181
      
181
      
181
  
Additional paid-in-capital
    
185,779
      
185,319
      
184,111
  
Unallocated common stock held by ESOP
    
(9,539
)
    
(9,796
)
    
(10,567
)
Treasury stock, at cost
    
(29,620
)
    
(29,620
)
    
(30,400
)
Retained earnings
    
131,887
      
133,337
      
123,541
  
Accumulated other comprehensive loss
    
(6,229
)
    
(6,228
)
    
(6,690
)
Total stockholders' equity
    
272,459
      
273,193
      
260,176
  
Total liabilities and stockholders' equity
  
$
3,050,286
    
$
3,001,679
    
$
2,837,555
  
                         
(1)
Loans include net deferred fees and unamortized premiums of $5.1 million, $4.6 million and $3.8 million at December 31, 2017, September 30, 2017 and December 31, 2016, respectively.
 
 
First Connecticut Bancorp, Inc.
Consolidated Statements of Income (Unaudited)
                               
   
Three Months Ended   
    
For The Year Ended
  
   
December 31,
    
September 30,
    
December 31,
    
December 31,
  
(Dollars in thousands, except per share data)
  
2017
    
2017
    
2016
    
2017
    
2016
  
Interest income
                              
Interest and fees on loans
                              
Mortgage
  
$
19,143
    
$
19,165
    
$
16,451
    
$
73,922
    
$
64,612
  
Other
    
5,494
      
5,535
      
5,058
      
21,185
      
19,613
  
Interest and dividends on investments
                                        
United States Government and agency obligations
    
613
      
602
      
335
      
2,287
      
1,620
  
Other bonds
    
4
      
6
      
10
      
24
      
50
  
Corporate stocks
    
259
      
242
      
231
      
916
      
912
  
Other interest income
    
38
      
54
      
75
      
149
      
179
  
Total interest income
    
25,551
      
25,604
      
22,160
      
98,483
      
86,986
  
Interest expense
                                        
Deposits
    
3,888
      
3,423
      
3,010
      
13,248
      
11,456
  
Interest on borrowed funds
    
1,031
      
1,230
      
924
      
4,374
      
3,826
  
Interest on repo borrowings
    
95
      
95
      
96
      
381
      
385
  
Interest on repurchase liabilities
    
9
      
8
      
8
      
31
      
64
  
Total interest expense
    
5,023
      
4,756
      
4,038
      
18,034
      
15,731
  
Net interest income
    
20,528
      
20,848
      
18,122
      
80,449
      
71,255
  
Provision for loan losses
    
299
      
217
      
616
      
1,551
      
2,332
  
Net interest income
                                        
after provision for loan losses
    
20,229
      
20,631
      
17,506
      
78,898
      
68,923
  
Noninterest income
                                        
Fees for customer services
    
1,663
      
1,662
      
1,537
      
6,403
      
6,151
  
Net gain on loans sold
    
598
      
872
      
925
      
2,597
      
3,105
  
Brokerage and insurance fee income
    
59
      
54
      
47
      
218
      
213
  
Bank owned life insurance income
    
354
      
357
      
361
      
1,628
      
1,417
  
Other
    
484
      
355
      
666
      
2,653
      
1,852
  
Total noninterest income
    
3,158
      
3,300
      
3,536
      
13,499
      
12,738
  
Noninterest expense
                                        
Salaries and employee benefits
    
9,564
      
9,668
      
9,109
      
38,595
      
36,983
  
Occupancy expense
    
1,261
      
1,312
      
1,211
      
5,073
      
4,890
  
Furniture and equipment expense
    
931
      
1,054
      
983
      
3,954
      
4,082
  
FDIC assessment
    
436
      
419
      
424
      
1,693
      
1,603
  
Marketing
    
578
      
717
      
523
      
2,570
      
2,170
  
Other operating expenses
    
2,617
      
2,749
      
2,849
      
10,451
      
10,776
  
Total noninterest expense
    
15,387
      
15,919
      
15,099
      
62,336
      
60,504
  
Income before income taxes
    
8,000
      
8,012
      
5,943
      
30,061
      
21,157
  
Income tax expense
    
7,503
      
2,415
      
1,757
      
13,872
      
5,942
  
Net income
  
$
497
    
$
5,597
    
$
4,186
    
$
16,189
    
$
15,215
  
                                         
Earnings per share:
                                        
Basic
  
$
0.03
    
$
0.37
    
$
0.28
    
$
1.07
    
$
1.02
  
Diluted
    
0.03
      
0.35
      
0.27
      
1.02
      
1.00
  
Weighted average shares outstanding:
                                        
Basic
    
15,174,285
      
15,143,379
      
14,973,610
      
15,123,568
      
14,821,391
  
Diluted
    
15,882,690
      
15,820,659
      
15,502,481
      
15,797,039
      
15,196,011
  
 
 
First  Connecticut Bancorp, Inc.
Consolidated Average Balance, Yields and Rates (Unaudited)
                       
 
For The Three Months Ended         
 
December 31, 2017 
  
September 30, 2017 
  
December 31, 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
 $       2,714,017
 $      25,272
3.69%
  
 $ 2,697,978
 $      25,342
3.73%
  
 $ 2,497,897
 $      22,092
3.52%
Securities
             147,768
              676
1.81%
  
       159,450
              660
1.64%
  
       131,837
              402
1.21%
Federal Home Loan Bank of Boston stock
               14,860
              200
5.34%
  
         18,284
              190
4.12%
  
         15,200
              174
4.55%
Federal funds and other earning assets
                 7,833
                38
1.92%
  
         10,089
                54
2.12%
  
         60,518
                75
0.49%
Total interest-earning assets
          2,884,478
         26,186
3.60%
  
    2,885,801
         26,246
3.61%
  
    2,705,452
         22,743
3.34%
Noninterest-earning assets
             124,537
      
       126,234
      
       128,332
    
Total assets
 $       3,009,015
      
 $ 3,012,035
      
 $ 2,833,784
    
                       
Interest-bearing liabilities:
                      
NOW accounts
 $          624,372
 $           916
0.58%
  
 $    644,947
 $           832
0.51%
  
 $    552,444
 $           443
0.32%
Money market
             558,743
           1,212
0.86%
  
       519,265
              982
0.75%
  
       557,864
           1,109
0.79%
Savings accounts
             235,058
                65
0.11%
  
       233,878
                63
0.11%
  
       229,052
                64
0.11%
Certificates of deposit
             517,252
           1,695
1.30%
  
       489,203
           1,546
1.25%
  
       471,023
           1,394
1.18%
Total interest-bearing deposits
          1,935,425
           3,888
0.80%
  
    1,887,293
           3,423
0.72%
  
    1,810,383
           3,010
0.66%
Federal Home Loan Bank of Boston Advances
             252,775
           1,031
1.62%
  
       320,219
           1,230
1.52%
  
       226,766
              924
1.62%
Repurchase agreement borrowings
               10,500
                95
3.59%
  
         10,500
                95
3.59%
  
         10,500
                96
3.64%
Repurchase liabilities
               29,796
                  9
0.12%
  
         27,695
                  8
0.11%
  
         30,245
                  8
0.11%
Total interest-bearing liabilities
          2,228,496
           5,023
0.89%
  
    2,245,707
           4,756
0.84%
  
    2,077,894
           4,038
0.77%
Noninterest-bearing deposits
             454,278
      
       446,428
      
       434,659
    
Other noninterest-bearing liabilities
               48,593
      
         45,905
      
         61,023
    
Total liabilities
          2,731,367
      
    2,738,040
      
    2,573,576
    
Stockholders' equity
             277,648
      
       273,995
      
       260,208
    
Total liabilities and stockholders' equity
 $       3,009,015
      
 $ 3,012,035
      
 $ 2,833,784
    
                       
Tax-equivalent net interest income
  
 $      21,163
      
 $      21,490
      
 $      18,705
  
Less: tax-equivalent adjustment
  
             (635)
      
             (642)
      
             (583)
  
Net interest income
  
 $      20,528
      
 $      20,848
      
 $      18,122
  
                       
Net interest rate spread (2)
    
2.71%
      
2.77%
      
2.57%
Net interest-earning assets (3)
 $          655,982
      
 $    640,094
      
 $    627,558
    
Net interest margin (4)
    
2.91%
      
2.95%
      
2.75%
Average interest-earning assets to
average interest-bearing liabilities
129.44%
      
128.50%
      
130.20%
  
                       
(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 Years Ended December 31,    
 
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
 $  2,654,943
 $      97,615
3.68%
  
 $ 2,420,859
 $      86,374
3.57%
Securities
        151,878
           2,524
1.66%
  
       150,582
           1,881
1.25%
Federal Home Loan Bank of Boston stock
          16,842
              703
4.17%
  
         17,738
              701
3.95%
Federal funds and other earning assets
            8,006
              149
1.86%
  
         36,679
              179
0.49%
Total interest-earning assets
     2,831,669
       100,991
3.57%
  
    2,625,858
         89,135
3.39%
Noninterest-earning assets
        122,324
      
       129,826
    
Total assets
 $  2,953,993
      
 $ 2,755,684
    
               
Interest-bearing liabilities:
              
NOW accounts
 $     616,962
 $        2,850
0.46%
  
 $    513,256
 $        1,544
0.30%
Money market
        533,213
           4,143
0.78%
  
       512,396
           4,119
0.80%
Savings accounts
        235,608
              252
0.11%
  
       223,499
              241
0.11%
Certificates of deposit
        486,449
           6,003
1.23%
  
       469,493
           5,552
1.18%
Total interest-bearing deposits
     1,872,232
         13,248
0.71%
  
    1,718,644
         11,456
0.67%
Federal Home Loan Bank of Boston Advances
        283,683
           4,374
1.54%
  
       257,281
           3,826
1.49%
Repurchase agreement borrowings
          10,500
              381
3.63%
  
         10,500
              385
3.67%
Repurchase liabilities
          27,814
                31
0.11%
  
         42,700
                64
0.15%
Total interest-bearing liabilities
     2,194,229
         18,034
0.82%
  
    2,029,125
         15,731
0.78%
Noninterest-bearing deposits
        441,347
      
       412,155
    
Other noninterest-bearing liabilities
          46,804
      
         60,008
    
Total liabilities
     2,682,380
      
    2,501,288
    
Stockholders' equity
        271,613
      
       254,396
    
Total liabilities and stockholders' equity
 $  2,953,993
      
 $ 2,755,684
    
               
Tax-equivalent net interest income
  
 $      82,957
      
 $      73,404
  
Less: tax-equivalent adjustment
  
          (2,508)
      
          (2,149)
  
Net interest income
  
 $      80,449
      
 $      71,255
  
               
Net interest rate spread (2)
    
2.75%
      
2.61%
Net interest-earning assets (3)
 $     637,440
      
 $    596,733
    
Net interest margin (4)
    
2.93%
      
2.80%
Average interest-earning assets to
average interest-bearing liabilities
129.05%
      
129.41%
  
               
 
(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.
Reconciliation 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 December 31, 2017, September 30, 2017, June 30, 2017, March 31, 2017 and December 31, 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     
   
December 31,
September 30,
June 30,
  
March 31,
  
December 31,
(Dollars in thousands, except per share data)
2017
  
2017
  
2017
  
2017
  
2016
  
Net Income
 $             497
  
 $          5,597
  
 $         5,002
  
 $         5,093
  
 $          4,186
  
 
Adjustments:
                    
 
Plus: Severance expense
-
  
-
  
343
  
-
  
-
  
 
Plus: Mortgage servicing rights (recovery) impairment
-
  
-
  
-
  
-
  
(283)
  
 
Less: Prepayment penalty fees
(36)
  
(165)
  
-
  
(84)
  
-
  
 
Less: Bank-owned life insurance proceeds
-
  
-
  
(271)
  
-
  
-
  
Total core adjustments before taxes
(36)
  
(165)
  
72
  
(84)
  
(283)
  
 
Tax (expense) benefit on core adjustments
13
  
58
  
(120)
  
29
  
99
  
 
Tax rate reduction due to Tax Cuts and Jobs Act
4,981
  
-
  
-
  
-
  
-
  
 
Deferred tax asset write-off (1)
-
  
-
  
-
  
-
  
137
  
Total core adjustments after taxes
4,958
  
(107)
  
(48)
  
(55)
  
(47)
  
Total core net income
 $          5,455
  
 $          5,490
  
 $         4,954
  
 $         5,038
  
 $          4,139
  
                       
                       
Total net interest income
 $        20,528
  
 $         20,848
  
 $        19,823
  
 $       19,250
  
 $        18,122
  
 
Less: Prepayment penalty fees
(36)
  
(165)
  
-
  
(84)
  
-
  
Total core net interest income
 $        20,492
  
 $         20,683
  
 $        19,823
  
 $       19,166
  
 $        18,122
  
                       
Total noninterest income
 $          3,158
  
 $          3,300
  
 $         3,876
  
 $         3,165
  
 $          3,536
  
 
Plus: Mortgage servicing rights (recovery) impairment
-
  
-
  
-
  
-
  
(283)
  
 
Less: Bank-owned life insurance proceeds
-
  
-
  
(271)
  
-
  
-
  
Total core noninterest income
 $          3,158
  
 $          3,300
  
 $         3,605
  
 $         3,165
  
 $          3,253
  
                       
Total noninterest expense
 $        15,387
  
 $         15,919
  
 $        15,878
  
 $       15,152
  
 $        15,099
  
 
Less: Severance expense
-
  
-
  
(343)
  
-
  
-
  
Total core noninterest expense
 $        15,387
  
 $         15,919
  
 $        15,535
  
 $       15,152
  
 $        15,099
  
                       
Core earnings per common share, diluted
 $            0.34
  
 $            0.35
  
 $           0.31
  
 $          0.32
  
 $            0.27
  
                       
Core net interest rate margin (2)
2.91%
  
2.93%
  
2.92%
  
2.92%
  
2.75%
  
Core return on average assets (annualized)
0.73%
  
0.73%
  
0.68%
  
0.70%
  
0.58%
  
Core return on average equity (annualized)
7.86%
  
8.01%
  
7.36%
  
7.59%
  
6.36%
  
Core non-interest expense to average assets (annualized)
2.05%
  
2.11%
  
2.12%
  
2.12%
  
2.13%
  
Efficiency ratio (3)
65.06%
  
66.38%
  
66.31%
  
67.85%
  
70.64%
  
                       
Tangible book value (4)
 $          17.08
  
 $          17.12
  
 $         16.86
  
 $         16.62
  
 $          16.37
  
                     
(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.
 
First Connecticut Bancorp, Inc.
Reconciliation of Non-GAAP Financial Measures
The table below presents a reconciliation of non-GAAP financial measures with financial measures defined by GAAP for the years ended December 31, 2017 and December 31, 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 Year Ended December 31,
(Dollars in thousands, except per share data)
2017
  
2016
  
Net Income
 $              16,189
  
 $              15,215
  
 
Adjustments:
        
 
Plus: Employee severance
343
  
-
  
 
Less: Prepayment penalty fees
(285)
  
(380)
  
 
Less:  Off-balance sheet commitment change in accounting estimate
-
  
(423)
  
 
Less: Bank-owned life insurance proceeds
(271)
  
(77)
  
Total core adjustments before taxes
(213)
  
(880)
  
 
Tax (expense) benefit on core adjustments
(20)
  
282
  
 
Deferred tax asset write-off (1)
-
  
137
  
 
Tax rate reduction (2)
4,981
  
-
  
Total core adjustments after taxes
4,748
  
(461)
  
Total core net income
 $              20,937
  
 $              14,754
  
           
           
Total net interest income
 $              80,449
  
 $              71,255
  
 
Less: Prepayment penalty fees
(285)
  
(380)
  
Total core net interest income
 $              80,164
  
 $              70,875
  
           
Total noninterest income
 $              13,499
  
 $              12,738
  
 
Less: Bank-owned life insurance proceeds
(271)
  
(77)
  
Total core noninterest income
 $              13,228
  
 $              12,661
  
           
Total noninterest expense
 $              62,336
  
 $              60,504
  
 
Plus: Off-balance sheet commitments change in accounting estimate
-
  
423
  
 
Less: Employee severances
(343)
  
-
  
Total core noninterest expense
 $              61,993
  
 $              60,927
  
           
Core earnings per common share, diluted
 $                  1.32
  
 $                  0.97
  
           
Core net interest rate margin (3)
2.92%
  
2.78%
  
Core return on average assets (annualized)
0.71%
  
0.54%
  
Core return on average equity (annualized)
7.71%
  
5.80%
  
Core non-interest expense to average assets (annualized)
2.10%
  
2.21%
  
Efficiency ratio (4)
66.38%
  
72.94%
  
           
Tangible book value (5)
 $                17.08
  
 $                16.37
  
           
(1)
Represents a write-off of the remaining deferred tax asset associated with the establishment of the Bank's foundation in 2011.
(2)
Represents the reduction in the value of the Company's deferred tax asset as a result of the Tax Cuts and Jobs Act enacted on December 22, 2017, which lowered the Company's federal tax rate from 35% to 21%.
(3)
Represents tax-equivalent core net interest income as a percent of average interest-earning assets.
(4)
Represents core noninterest expense divided by the sum of core net interest income and core noninterest income.
(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.
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