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


First Connecticut Bancorp, Inc. reports second quarter 2018 net income of $6.7 million or $0.42 diluted earnings per share

FARMINGTON, Conn., July 18, 2018 – First Connecticut Bancorp, Inc. (NASDAQ: FBNK), the holding company for Farmington Bank, reported a 35% increase in net income of $6.7 million or $0.42 diluted earnings per share for the quarter ended June 30, 2018 compared to net income of $5.0 million or $0.32 diluted earnings per share for the quarter ended June 30, 2017.

Net income on a core earnings basis was $7.4 million, or $0.46 diluted core earnings per share for the quarter ended June 30, 2018 compared to $5.0 million, or $0.31 diluted core earnings per share for the quarter ended June 30, 2017.  Core earnings exclude non-recurring items.

On June 19, 2018, First Connecticut Bancorp, Inc. ("FCB") announced its entry into a definitive Agreement and Plan of Merger with People's United Financial, Inc. ("People's United"), pursuant to which FCB will merge with and into People's United.  Completion of the transaction is subject to customary closing conditions, including receipt of regulatory approvals and the approval of First Connecticut Bancorp, Inc. shareholders.

"I am pleased to report solid core second quarter earnings for the company. As indicated earnings were impacted by certain one-time charges related to our acquisition by Peoples United Financial, Inc. The Board of Directors and Senior Management have always focused on shareholder value and we believe this acquisition maximized shareholder value at a time when, we believe, the operating paradigm is changing for smaller community banks. I would also like to thank our dedicated employees who executed our strategy, which maximized our results for shareholders" stated John J. Patrick Jr., First Connecticut Bancorp's Chairman, President and CEO.

Financial Highlights

·
Net interest income increased $1.1 million to $22.0 million in the second quarter of 2018 compared to the linked quarter and increased $2.2 million compared to the second quarter of 2017.

·
Organic loan growth remained strong during the second quarter of 2018 as loans increased $106.6 million to $2.9 billion at June 30, 2018 primarily due to an $81.9 million increase in residential real estate loans.  Loans increased $256.7 million or 10% from a year ago.

·
Asset quality remained strong as loan delinquencies 30 days and greater represented 0.44% of total loans at June 30, 2018 compared to 0.46% of total loans at March 31, 2018 and 0.60% of total loans at June 30, 2017.  Non-accrual loans represented 0.41% of total loans at June 30, 2018 compared to 0.46% of total loans at March 31, 2018 and 0.60% of total loans at June 30, 2017.

·
Overall deposits remained flat at $2.4 billion in the second quarter of 2018 compared to the linked quarter and increased $198.8 million or 9% from a year ago.

·
Loans to deposits ratio was 120% for the quarter ended June 30, 2018 compared to 115% in the linked quarter and 119% in the second quarter of 2017.

·
Checking accounts grew by 7% or 4,023 net new accounts from a year ago.

·
Net interest margin was 2.90% in the second quarter of 2018 and in the linked quarter and 2.92% in the prior year quarter.

·
Efficiency ratio was 63.96% in the second quarter of 2018 compared to 67.54% in the linked quarter and 66.31% in the prior year quarter.

·
Noninterest expense to average assets was 2.01% in the second quarter of 2018 compared to 2.10% in the linked quarter and 2.12% in the prior year quarter.

·
Tangible book value per share was $17.60 for the quarter ended June 30, 2018 compared to $17.32 on a linked quarter basis and $16.86 at June 30, 2017.

·
The allowance for loan losses represented 0.78% of total loans at June 30, 2018 compared to 0.80% of total loans at March 31, 2018 and 0.83% at June 30, 2017.

·
The Company paid a quarterly cash dividend of $0.17 per share during the second quarter, an increase of $0.01 compared to the linked quarter and an increase of $0.05 from a year ago.

Second quarter 2018 compared with first quarter 2018

Net interest income

·
Net interest income increased $1.1 million to $22.0 million in the second quarter of 2018 compared to the linked quarter primarily due to a $106.5 million increase in the average loans balance and a 8 basis point increase in the loan yield to 3.84% offset by a $939,000 increase in interest expense.

·
Net interest margin was 2.90% in both the second quarter of 2018 and in the linked quarter.

·
The cost of interest-bearing liabilities increased 10 basis points to 1.07% in the second quarter of 2018 compared to 0.97% in the linked quarter.

Provision for loan losses

·
Provision for loan losses was $69,000 for the second quarter of 2018 compared to $465,000 for the linked quarter.

·
Net charge-offs in the quarter were $17,000 or 0.00% to average loans (annualized) compared to $293,000 or 0.04% to average loans (annualized) in the linked quarter.

·
The allowance for loan losses represented 0.78% of total loans at June 30, 2018 and 0.80% of total loans at March 31, 2018.

Noninterest income

·
Total noninterest income increased $117,000 to $3.3 million in the second quarter of 2018 compared to $3.1 million in the linked quarter.

·
Other noninterest income includes swap fees totaling $574,000 in the second quarter of 2018 compared to $624,000 in the linked quarter.

Noninterest expense

·
Noninterest expense increased $780,000 to $17.0 million in the second quarter of 2018 compared to the linked quarter primarily due to increases in other operating expenses.

·
Other operating expenses increased to $3.9 million primarily due to a $451,000 other real estate owned writedown, a $211,000 software termination buyout fee and $210,000 in acquisition related expenses.
 
Income tax expense

Income tax expense was $1.4 million in the second quarter of 2018 and in the linked quarter.

Second quarter 2018 compared with second quarter 2017

Net interest income

·
Net interest income increased $2.2 million or 11% to $22.0 million in the second quarter of 2018 compared to the prior year quarter due primarily to a $249.1 million increase in the average loans balance and a 19 basis point increase in the loans yield to 3.84% offset by a $2.2 million increase in interest expense.

·
Net interest margin was 2.90% in the second quarter of 2018 compared to 2.92% in the prior year quarter.  The Tax Act negatively affected the net interest margin by 4 basis points on a tax-equivalent basis in the second quarter of 2018.

·
The cost of interest-bearing liabilities increased 28 basis points to 1.07% in the second quarter of 2018 compared to 0.79% in the prior year quarter.

Provision for loan losses

·
Provision for loan losses was $69,000 for the second quarter of 2018 compared to $710,000 for the prior year quarter.

·
Net charge-offs in the quarter were $17,000 or 0.00% to average loans (annualized) compared to $22,000 or 0.00% to average loans (annualized) in the prior year quarter.

·
The allowance for loan losses represented 0.78% of total loans at June 30, 2018 and 0.83% of total loans at June 30, 2018.

Noninterest income

·
Total noninterest income was $3.3 million in the second quarter of 2018 compared to $3.9 million in the prior year quarter.

·
Net gain on loans sold decreased to $341,000 from $711,000 primarily due to a decrease in volume of loans sold.

·
Bank owned life insurance income decreased $257,000 primarily due to receiving $271,000 in death benefit proceeds in the prior year quarter.

·
Other noninterest income includes swap fees totaling $574,000 compared to $562,000 in the prior year quarter.

Noninterest expense

·
Noninterest expense increased $1.1 million to $17.0 million in the second quarter of 2018 compared to the prior year quarter primarily due to a $1.1 million increase in other operating expenses.

·
Other operating expenses increased $1.1 million to $3.9 million primarily due to a $451,000 other real estate owned writedown, a $211,000 software termination buyout fee and $210,000 in acquisition related expenses.

Income tax expense

Income tax expense was $1.4 million in the second quarter of 2018 compared to $2.1 million in the prior year quarter. As a result of the Tax Act, the Company's federal tax rate was lowered from 35% to 21% beginning in the first quarter of 2018.
June 30, 2018 compared to June 30, 2017

Financial Condition

·
Total assets increased $283.7 million or 10% at June 30, 2018 to $3.3 billion compared to $3.0 billion at June 30, 2017, reflecting a $256.1 million increase in net loans.

·
Our investment portfolio totaled $185.0 million at June 30, 2018 compared to $156.2 million at June 30, 2017, an increase of $28.8 million.

·
Net loans increased $256.1 million or 10% at June 30, 2018 to $2.9 billion compared to $2.6 billion at June 30, 2017 due to our continued focus on commercial and residential lending.

·
Deposits increased $198.8 million or 9% to $2.4 billion at June 30, 2018 compared to $2.2 billion at June 30, 2017 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 $354.5 million and $351.3 million at June 30, 2018 and 2017, respectively.

·
Federal Home Loan Bank of Boston advances increased $68.0 million to $457.5 million at June 30, 2018 compared to $389.5 million at June 30, 2017.

Asset Quality

·
At June 30, 2018 the allowance for loan losses represented 0.78% of total loans and 190.12% of non-accrual loans, compared to 0.80% of total loans and 175.73% of non-accrual loans at March 31, 2018 and 0.83% of total loans and 137.54% of non-accrual loans at June 30, 2017.

·
Loan delinquencies 30 days and greater represented 0.44% of total loans at June 30, 2018 compared to 0.46% of total loans at March 31, 2018 and 0.60% of total loans at June 30, 2017.

·
Non-accrual loans represented 0.41% of total loans at June 30, 2018 compared to 0.46% of total loans at March 31, 2018 and 0.60% of total loans at June 30, 2017.

·
Net charge-offs in the quarter were $17,000 or 0.00% to average loans (annualized) compared to $293,000 or 0.04% to average loans (annualized) in the linked quarter and $22,000 or 0.00% 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 12.23% at June 30, 2018.

·
Tangible book value per share is $17.60 compared to $17.32 on a linked quarter basis and $16.86 at June 30, 2017.

·
The Company had 600,945 shares remaining to repurchase at June 30, 2018 from prior regulatory approval. Repurchased shares are held as treasury stock and will be available for general corporate purposes.

·
At June 30, 2018, 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 25 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.

Additional Information for Stockholders

In connection with the proposed merger, People's United will file with the Securities and Exchange Commission ("SEC") a Registration Statement on Form S-4 that will include a Proxy Statement of FCB and a Prospectus of People's United, as well as other relevant documents concerning the proposed transaction.  This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval.  Stockholders are urged to read the Registration Statement, the Proxy Statement of FCB and Prospectus of People's United regarding the merger when it becomes available and any other relevant documents filed with the SEC, as well as any amendments or supplements to those documents, because they will contain important information.  A free copy of the Proxy Statement/Prospectus, as well as other filings containing information about FCB and People's United, may be obtained at the SEC's Internet site (http://www.sec.gov).  A definitive copy of the Proxy Statement/Prospectus will also be sent to the FCB stockholders seeking any required stockholder approval. You will also be able to obtain these documents, free of charge, from FCB by accessing FCB's website at www.firstconnecticutbancorp.com under the tab "SEC Filings" and then under the heading "Documents" or from People's United at www.peoples.com under the tab "Investor Relations" and then under the heading "Financial Information."  Alternatively, these documents, when available, can be obtained free of charge from FCB upon written request to First Connecticut Bancorp, Inc. Investor Relations, One Farm Glen Boulevard, Farmington, Connecticut 06032, by calling (860) 284-6359, or by sending an email to investor-relations@firstconnecticutbancorp.com, or from People's United upon written request to People's United Financial, Inc., 850 Main Street, Bridgeport, Connecticut 06604, Attn: Investor Relations, by calling (203) 338-4581, or by sending an email to andrew.hersom@peoples.com.

FCB and People's United and certain of their directors and executive officers may be deemed to be participants in the solicitation of proxies from the stockholders of FCB in connection with the proposed merger.  Information about the directors and executive officers of FCB is set forth in the proxy statement for FCB's 2018 annual meeting of stockholders, as filed with the SEC on a Schedule 14A on March 30, 2018.  Information about the directors and executive officers of People's United is set forth in the proxy statement for People's United's 2018 annual meeting of stockholders, as filed with the SEC on a Schedule 14A on March 7, 2018.  Additional information regarding the interests of those participants and other persons who may be deemed participants in the transaction may be obtained by reading the Proxy Statement/Prospectus regarding the proposed merger when it becomes available.  Free copies of this document may be obtained as described in the preceding paragraph.

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    
  
 
June 30,
  
March 31,
  
December  31,
September 30,
June 30,
  
(Dollars in thousands, except per share data)
2018
  
2018
  
2017
  
2017
  
2017
  
Selected Financial Condition Data:
                    
                     
Total assets
 $    3,275,838
  
 $    3,137,645
  
 $    3,055,050
  
 $    3,001,679
  
 $    2,992,126
  
Cash and cash equivalents
           36,968
  
           26,452
  
           35,350
  
           44,475
  
           46,551
  
Debt securities held-to-maturity, at amortized cost
           86,981
  
           80,977
  
           74,985
  
           56,848
  
           50,655
  
Debt securities available-for-sale, at fair value
           98,010
  
           89,107
  
           80,358
  
           80,355
  
         105,503
  
Federal Home Loan Bank of Boston stock, at cost
           22,195
  
           17,665
  
           15,537
  
           15,954
  
           19,583
  
Loans, net
       2,900,714
  
       2,794,187
  
       2,725,633
  
       2,676,411
  
       2,644,618
  
Deposits
       2,443,806
  
       2,443,357
  
       2,434,100
  
       2,382,551
  
       2,245,004
  
Federal Home Loan Bank of Boston advances
         457,457
  
         355,457
  
         255,458
  
         271,458
  
         389,458
  
Total stockholders' equity
         281,864
  
         276,861
  
         272,459
  
         273,193
  
         268,836
  
Allowance for loan losses
           22,672
  
           22,620
  
           22,448
  
           22,202
  
           22,037
  
Non-accrual loans
           11,925
  
           12,872
  
           15,792
  
           15,305
  
           16,022
  
Non-performing assets (1)
           13,638
  
           15,036
  
           15,792
  
           15,305
  
           16,022
  
Impaired loans
           28,814
  
           28,383
  
           30,194
  
           29,924
  
           30,007
  
Loan delinquencies 30 days and greater
           12,797
  
           13,036
  
           17,254
  
           17,808
  
           16,059
  
                     
Selected Operating Data:
                    
                     
Interest income
 $        28,471
  
 $        26,463
  
 $        25,551
  
 $        25,604
  
 $        24,116
  
Interest expense
             6,480
  
             5,541
  
             5,023
  
             4,756
  
             4,293
  
    Net interest income
           21,991
  
           20,922
  
           20,528
  
           20,848
  
           19,823
  
    Provision for loan losses
                 69
  
                465
  
                299
  
                217
  
                710
  
Net interest income after provision for loan losses
           21,922
  
           20,457
  
           20,229
  
           20,631
  
           19,113
  
Noninterest income
             3,262
  
             3,145
  
             3,158
  
             3,300
  
             3,876
  
Noninterest expense
           17,019
  
           16,239
  
           15,387
  
           15,919
  
           15,878
  
Income before income taxes
             8,165
  
             7,363
  
             8,000
  
             8,012
  
             7,111
  
Income tax expense
             1,435
  
             1,352
  
             7,503
  
             2,415
  
             2,109
  
Net income
 $          6,730
  
 $          6,011
  
 $             497
  
 $          5,597
  
 $          5,002
  
                     
Performance Ratios (annualized):
                    
                     
Return on average assets
0.84%
  
0.78%
  
0.07%
  
0.74%
  
0.68%
  
Core return on average assets
0.92%
  
0.78%
  
0.73%
  
0.73%
  
0.68%
  
Return on average equity
9.56%
  
8.68%
  
0.72%
  
8.17%
  
7.43%
  
Core return on average equity
10.53%
  
8.65%
  
7.86%
  
8.01%
  
7.36%
  
Net interest rate spread (2)
2.67%
  
2.69%
  
2.71%
  
2.77%
  
2.74%
  
Net interest rate margin (3)
2.90%
  
2.90%
  
2.91%
  
2.95%
  
2.92%
  
Non-interest expense to average assets (4)
2.01%
  
2.10%
  
2.05%
  
2.11%
  
2.12%
  
Efficiency ratio (5)
63.96%
  
67.54%
  
65.06%
  
66.38%
  
66.31%
  
Average interest-earning assets to average
                  
     interest-bearing liabilities
127.48%
  
128.49%
  
129.44%
  
128.50%
  
128.46%
  
Loans to deposits
120%
  
115%
  
113%
  
113%
  
119%
  
                     
Asset Quality Ratios:
                    
                     
Allowance for loan losses as a percent of total loans
0.78%
  
0.80%
  
0.82%
  
0.82%
  
0.83%
  
Allowance for loan losses as a percent of
                  
     non-accrual loans
190.12%
  
175.73%
  
142.15%
  
145.06%
  
137.54%
  
Net charge-offs (recoveries) to average loans (annualized)
0.00%
  
0.04%
  
0.01%
  
0.01%
  
0.00%
  
Non-accrual loans as a percent of total loans
0.41%
  
0.46%
  
0.58%
  
0.57%
  
0.60%
  
Non-performing assets as a percent of total assets
0.42%
  
0.48%
  
0.52%
  
0.51%
  
0.54%
  
Loan delinquencies 30 days and greater as a
                  
     percent of total loans
0.44%
  
0.46%
  
0.63%
  
0.66%
  
0.60%
  
                     
Per Share Related Data:
                    
                     
Basic earnings per share
 $            0.44
  
 $            0.39
  
 $            0.03
  
 $            0.37
  
 $            0.33
  
Diluted earnings per share
 $            0.42
  
 $            0.38
  
 $            0.03
  
 $            0.35
  
 $            0.32
  
Dividends declared per share
 $            0.17
  
 $            0.16
  
 $            0.15
  
 $            0.14
  
 $            0.12
  
Tangible book value (6)
 $          17.60
  
 $          17.32
  
 $          17.08
  
 $          17.12
  
 $          16.86
  
Common stock shares outstanding
     16,012,664
  
     15,984,932
  
     15,952,946
  
     15,952,946
  
     15,942,614
  
Weighted-average basic shares outstanding
     15,260,635
  
     15,214,839
  
     15,174,285
  
     15,143,379
  
     15,107,190
  
Weighted-average diluted shares outstanding
     15,942,471
  
     15,900,088
  
     15,882,690
  
     15,820,659
  
     15,791,112
  
 
(1)
Consists of non-accruing loans including non-accruing loans identified as troubled debt restructurings, loans past due more than 90 days and still accruing interest and other real estate owned.
(2)
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)
Represents tax-equivalent net interest income as a percent of average interest-earning assets.
(4)
Represents core noninterest expense annualized divided by average assets.
See "Reconciliation of Non-GAAP Financial Measures" table.
(5)
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.
(6)
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        
  
 
June 30,
  
March 31,
  
December 31,
  
September 30,
  
June 30,
  
(Dollars in thousands)
2018
  
2018
  
2017
  
2017
  
2017
  
Capital Ratios:
                    
                     
Equity to total assets at end of period
8.60%
  
8.82%
  
8.93%
  
9.10%
  
8.98%
  
Average equity to average assets
8.76%
  
8.96%
  
9.23%
  
9.10%
  
9.18%
  
Total Capital (to Risk Weighted Assets)
12.23%
*
12.38%
  
12.38%
  
12.50%
  
12.45%
  
Tier I Capital (to Risk Weighted Assets)
11.34%
*
11.47%
  
11.45%
  
11.57%
  
11.53%
  
Common Equity Tier I Capital
11.34%
*
11.47%
  
11.45%
  
11.57%
  
11.53%
  
Tier I Leverage Capital (to Average Assets)
8.99%
*
9.17%
  
9.23%
  
9.23%
  
9.36%
  
Total equity to total average assets
8.78%
  
8.96%
  
9.05%
  
9.07%
  
9.17%
  
                     
* Estimated
                    
                     
Loans and Allowance for Loan Losses:
                    
                     
Real estate
                    
  Residential
$     1,141,015
  
$      1,059,116
  
$       989,366
  
$       969,679
  
$       962,732
  
  Commercial
      1,085,903
  
        1,071,485
  
      1,063,755
  
      1,028,930
  
      1,020,560
  
  Construction
           94,615
  
            98,469
  
           90,059
  
           86,713
  
           74,063
  
Commercial
         435,034
  
          417,660
  
         429,116
  
         436,172
  
         431,243
  
Home equity line of credit
         155,853
  
          159,030
  
         165,070
  
         166,791
  
         168,278
  
Other
             5,039
  
              5,240
  
             5,650
  
             5,733
  
             5,410
  
    Total loans
2,917,459
  
2,811,000
  
2,743,016
  
2,694,018
  
2,662,286
  
 Net deferred loan costs
5,927
  
5,807
  
             5,065
  
             4,595
  
             4,369
  
    Loans
2,923,386
  
2,816,807
  
      2,748,081
  
      2,698,613
  
      2,666,655
  
 Allowance for loan losses
(22,672)
  
(22,620)
  
          (22,448)
  
          (22,202)
  
          (22,037)
  
    Loans, net
 $    2,900,714
  
 $     2,794,187
  
 $    2,725,633
  
 $    2,676,411
  
 $    2,644,618
  
                     
Deposits:
                    
                     
Noninterest-bearing demand deposits
$       478,319
  
$         443,555
  
$       473,428
  
$       437,372
  
$       445,049
  
Interest-bearing
                    
  NOW accounts
570,952
  
625,362
  
623,135
  
         652,631
  
         547,868
  
  Money market
564,810
  
587,389
  
559,297
  
         549,674
  
         522,070
  
  Savings accounts
250,194
  
242,377
  
237,380
  
         233,330
  
         241,898
  
  Certificates of deposit
579,531
  
544,674
  
540,860
  
         509,544
  
         488,119
  
Total interest-bearing deposits
      1,965,487
  
        1,999,802
  
      1,960,672
  
      1,945,179
  
      1,799,955
  
    Total deposits
$     2,443,806
  
$      2,443,357
  
$     2,434,100
  
$     2,382,551
  
$     2,245,004
  
                     
 
 
 
First Connecticut Bancorp, Inc.
Consolidated Statements of Condition (Unaudited)
                       
                       
             
June 30,
  
March 31,
  
June 30,
             
2018
  
2018
  
2017
(Dollars in thousands)
          
Assets
                
Cash and due from banks
$            36,028
  
$            25,385
  
$            37,308
Interest bearing deposits with other institutions
940
  
1,067
  
9,243
   
Total cash and cash equivalents
36,968
  
26,452
  
46,551
Debt securities held-to-maturity, at amortized cost
86,981
  
80,977
  
50,655
Debt securities available-for-sale, at fair value
98,010
  
89,107
  
105,503
Loans held for sale
5,331
  
5,980
  
2,537
Loans (1)
    
2,923,386
  
2,816,807
  
2,666,655
 
Allowance for loan losses
(22,672)
  
(22,620)
  
(22,037)
   
Loans, net
2,900,714
  
2,794,187
  
2,644,618
Premises and equipment, net
16,965
  
17,007
  
17,609
Federal Home Loan Bank of Boston stock, at cost
22,195
  
17,665
  
19,583
Accrued income receivable
9,913
  
9,043
  
7,939
Bank-owned life insurance
58,193
  
57,852
  
56,802
Deferred income taxes
7,724
  
7,763
  
13,970
Prepaid expenses and other assets
32,844
  
31,612
  
26,359
         
Total assets
$       3,275,838
  
$       3,137,645
  
$       2,992,126
                       
Liabilities and Stockholders' Equity
          
Deposits
              
 
Interest-bearing
$       1,965,487
  
$       1,999,802
  
$       1,799,955
 
Noninterest-bearing
478,319
  
443,555
  
445,049
             
2,443,806
  
2,443,357
  
2,245,004
Federal Home Loan Bank of Boston advances
457,457
  
355,457
  
389,458
Repurchase agreement borrowings
-
  
-
  
10,500
Repurchase liabilities
40,374
  
16,851
  
36,101
Accrued expenses and other liabilities
52,337
  
45,119
  
42,227
         
Total liabilities
2,993,974
  
2,860,784
  
2,723,290
                       
Stockholders' Equity
          
 
Common stock
181
  
181
  
181
 
Additional paid-in-capital
186,776
  
186,269
  
184,871
 
Unallocated common stock held by ESOP
(9,043)
  
(9,290)
  
(10,053)
 
Treasury stock, at cost
(28,802)
  
(29,204)
  
(29,770)
 
Retained earnings
140,228
  
136,303
  
129,972
 
Accumulated other comprehensive loss
(7,476)
  
(7,398)
  
(6,365)
         
Total stockholders' equity
281,864
  
276,861
  
268,836
         
Total liabilities and stockholders' equity
$       3,275,838
  
$       3,137,645
  
$       2,992,126
 
(1)
Loans include net deferred fees and unamortized premiums of $5.9 million, $5.8 million and $4.4 million at June 30, 2018, March 31, 2018 and June 30, 2017, respectively.
 
First Connecticut Bancorp, Inc.
Consolidated Statements of Income (Unaudited)
             
Three Months Ended  
  
Six Months Ended
             
June 30,
  
March 31,
  
June 30,
  
June 30,  
(Dollars in thousands, except per share data)
2018
  
2018
  
2017
  
2018
  
2017
Interest income
                  
Interest and fees on loans
                  
 
Mortgage
$        21,560
  
$        19,927
  
$        18,056
  
$      41,487
  
$      35,614
 
Other
    
5,672
  
5,465
  
5,209
  
11,137
  
10,156
Interest and dividends on investments
                  
 
United States Government and agency obligations
              954
  
              797
  
598
  
         1,751
  
         1,072
 
Other bonds
                 -
  
                 -
  
7
  
              -
  
              14
 
Corporate stocks
              258
  
              241
  
216
  
            499
  
            415
Other interest income
                27
  
                33
  
30
  
              60
  
              57
         
Total interest income
28,471
  
26,463
  
24,116
  
54,934
  
47,328
Interest expense
                  
Deposits
  
            4,702
  
            4,339
  
3,026
  
         9,041
  
         5,937
Interest on borrowed funds
            1,771
  
            1,119
  
1,164
  
         2,890
  
         2,113
Interest on repo borrowings
                 -
  
                74
  
96
  
              74
  
            191
Interest on repurchase liabilities
                  7
  
                  9
  
7
  
              16
  
              14
         
Total interest expense
6,480
  
5,541
  
4,293
  
12,021
  
8,255
         
Net interest income
21,991
  
20,922
  
19,823
  
42,913
  
39,073
Provision for loan losses
69
  
465
  
710
  
534
  
1,035
         
Net interest income
                  
           
after provision for loan losses
21,922
  
20,457
  
19,113
  
42,379
  
38,038
Noninterest income
                  
Fees for customer services
            1,718
  
            1,657
  
1,572
  
         3,375
  
3,078
Net gain on loans sold
              341
  
              288
  
711
  
            629
  
         1,127
Brokerage and insurance fee income
                63
  
                58
  
55
  
            121
  
            105
Bank owned life insurance income
              341
  
              341
  
598
  
            682
  
            917
Other
      
              799
  
              801
  
940
  
         1,600
  
         1,814
         
Total noninterest income
3,262
  
3,145
  
3,876
  
6,407
  
7,041
Noninterest expense
                  
Salaries and employee benefits (1)
            9,704
  
            9,772
  
9,848
  
       19,476
  
       18,986
Occupancy expense
            1,315
  
            1,329
  
1,187
  
         2,644
  
         2,500
Furniture and equipment expense
              947
  
              948
  
985
  
         1,895
  
         1,969
FDIC assessment
              422
  
              424
  
410
  
            846
  
            838
Marketing
  
              767
  
              605
  
708
  
         1,372
  
         1,275
Other operating expenses (1)
            3,864
  
            3,161
  
2,740
  
         7,025
  
         5,462
         
Total noninterest expense
17,019
  
16,239
  
15,878
  
33,258
  
31,030
         
Income before income taxes
8,165
  
7,363
  
7,111
  
15,528
  
14,049
Income tax expense
1,435
  
1,352
  
2,109
  
2,787
  
3,954
         
Net income
$          6,730
  
$          6,011
  
$          5,002
  
$      12,741
  
$      10,095
                               
Earnings per share:
                  
 
Basic
    
 $           0.44
  
 $           0.39
  
 $           0.33
  
 $        0.83
  
 $        0.67
 
Diluted
  
             0.42
  
             0.38
  
             0.32
  
           0.80
  
           0.64
Weighted average shares outstanding:
                  
 
Basic
    
    15,260,635
  
    15,214,839
  
    15,107,190
  
 15,237,994
  
 15,087,721
 
Diluted
  
    15,942,471
  
    15,900,088
  
    15,791,112
  
 15,921,527
  
 15,741,500
 
(1)
Prior period presentation reflects a reclassification of certain pension related costs between salaries and employee benefits and other operating expenses in accordance with ASU 2017-07.
 
First Connecticut Bancorp, Inc.
Consolidated Average Balances, Yields and Rates (Unaudited)
                       
 
For The Three Months Ended         
 
June 30, 2018 
  
March 31, 2018 
  
June 30, 2017  
 
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
 $       2,878,570
 $      27,537
3.84%
  
 $ 2,772,063
 $      25,692
3.76%
  
 $ 2,629,493
 $      23,900
3.65%
Securities
             187,681
           1,010
2.16%
  
       175,912
              851
1.96%
  
       157,230
              659
1.68%
Federal Home Loan Bank of Boston stock
               19,566
              202
4.14%
  
         14,986
              187
5.06%
  
         18,056
              162
3.60%
Federal funds and other earning assets
                    915
                27
11.84%
  
           2,140
                33
6.25%
  
           7,715
                30
1.56%
Total interest-earning assets
          3,086,732
         28,776
3.74%
  
    2,965,101
         26,763
3.66%
  
    2,812,494
         24,751
3.53%
Noninterest-earning assets
             125,358
      
       126,282
      
       120,308
    
Total assets
 $       3,212,090
      
 $ 3,091,383
      
 $ 2,932,802
    
                       
Interest-bearing liabilities:
                      
NOW accounts
 $          609,571
 $        1,072
0.71%
  
 $    664,211
 $        1,145
0.70%
  
 $    595,350
 $           574
0.39%
Money market
             584,667
           1,388
0.95%
  
       568,362
           1,317
0.94%
  
       525,266
              979
0.75%
Savings accounts
             247,015
                66
0.11%
  
       234,660
                63
0.11%
  
       242,009
                63
0.10%
Certificates of deposit
             581,263
           2,176
1.50%
  
       538,189
           1,814
1.37%
  
       471,905
           1,410
1.20%
Total interest-bearing deposits
          2,022,516
           4,702
0.93%
  
    2,005,422
           4,339
0.88%
  
    1,834,530
           3,026
0.66%
Federal Home Loan Bank of Boston Advances
             372,128
           1,771
1.91%
  
       261,580
           1,119
1.73%
  
       315,665
           1,164
1.48%
Repurchase agreement borrowings
                       -
                 -
0.00%
  
           8,467
                74
3.54%
  
         10,500
                96
3.67%
Repurchase liabilities
               26,623
                  7
0.11%
  
         32,104
                  9
0.11%
  
         28,728
                  7
0.10%
Total interest-bearing liabilities
          2,421,267
           6,480
1.07%
  
    2,307,573
           5,541
0.97%
  
    2,189,423
           4,293
0.79%
Noninterest-bearing deposits
             458,686
      
       451,067
      
       431,336
    
Other noninterest-bearing liabilities
               50,639
      
         55,634
      
         42,857
    
Total liabilities
          2,930,592
      
    2,814,274
      
    2,663,616
    
Stockholders' equity
             281,498
      
       277,109
      
       269,186
    
Total liabilities and stockholders' equity
 $       3,212,090
      
 $ 3,091,383
      
 $ 2,932,802
    
                       
Tax-equivalent net interest income
  
 $      22,296
      
 $      21,222
      
 $      20,458
  
Less: tax-equivalent adjustment
  
             (305)
      
             (300)
      
             (635)
  
Net interest income
  
 $      21,991
      
 $      20,922
      
 $      19,823
  
                       
Net interest rate spread (2)
    
2.67%
      
2.69%
      
2.74%
Net interest-earning assets (3)
 $          665,465
      
 $    657,528
      
 $    623,071
    
Net interest margin (4)
    
2.90%
      
2.90%
      
2.92%
 
Average interest-earning assets to average
interest-bearing liabilities
 
127.48%  
    
128.49%
      
 
   
128.46%
  
 
(1)
On a fully-tax equivalent basis calculated using a federal income tax rate of 21% for three months ended June 30, 2018 and March 31, 2018 and 35% for the three months ended June 30, 2017.
(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 Six Months Ended June 30,    
 
2018
  
2017 
 
Average
Balance
Interest and Dividends (1)
Yield/
Cost
  
Average
Balance
Interest and Dividends (1)
Yield/
Cost
(Dollars in thousands)
              
Interest-earning assets:
              
Loans
 $  2,825,611
 $      53,229
3.80%
  
 $ 2,603,041
 $      47,001
3.64%
Securities
        181,592
           1,861
2.07%
  
       150,119
           1,188
1.60%
Federal Home Loan Bank of Boston stock
          17,289
              389
4.54%
  
         17,116
              313
3.69%
Federal funds and other earning assets
            1,524
                60
7.94%
  
           7,037
                57
1.63%
Total interest-earning assets
     3,026,016
         55,539
3.70%
  
    2,777,313
         48,559
3.53%
Noninterest-earning assets
        126,054
      
       119,211
    
Total assets
 $  3,152,070
      
 $ 2,896,524
    
               
Interest-bearing liabilities:
              
NOW accounts
 $     636,740
 $        2,217
0.70%
  
 $    598,970
 $        1,102
0.37%
Money market
        576,560
           2,705
0.95%
  
       527,326
           1,949
0.75%
Savings accounts
        240,872
              129
0.11%
  
       236,766
              124
0.11%
Certificates of deposit
        559,845
           3,990
1.44%
  
       469,393
           2,762
1.19%
Total interest-bearing deposits
     2,014,017
           9,041
0.91%
  
    1,832,455
           5,937
0.65%
Federal Home Loan Bank of Boston Advances
        317,159
           2,890
1.84%
  
       280,822
           2,113
1.52%
Repurchase agreement borrowings
            4,210
                74
3.54%
  
         10,500
              191
3.67%
Repurchase liabilities
          29,348
                16
0.11%
  
         26,866
                14
0.11%
Total interest-bearing liabilities
     2,364,734
         12,021
1.03%
  
    2,150,643
           8,255
0.77%
Noninterest-bearing deposits
        454,897
      
       432,192
    
Other noninterest-bearing liabilities
          53,123
      
         46,352
    
Total liabilities
     2,872,754
      
    2,629,187
    
Stockholders' equity
        279,316
      
       267,337
    
Total liabilities and stockholders' equity
 $  3,152,070
      
 $ 2,896,524
    
               
Tax-equivalent net interest income
  
 $      43,518
      
 $      40,304
  
Less: tax-equivalent adjustment
  
             (605)
      
          (1,231)
  
Net interest income
  
 $      42,913
      
 $      39,073
  
               
Net interest rate spread (2)
    
2.67%
      
2.76%
Net interest-earning assets (3)
 $     661,282
      
 $    626,670
    
Net interest margin (4)
    
2.90%
      
2.93%
Average interest-earning assets to average interest-bearing liabilities
          
   
127.96%
      
129.14%
  
               
(1)
On a fully-tax equivalent basis calculated using a federal income tax rate of 21% for six months ended June 30, 2018 and 35% for the six months ended June 30, 2017.
(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 June 30, 2018, March 31, 2018, December 31, 2017, September 30, 2017 and June 30, 2017.  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    
  
   
June 30,
  
March 31,
  
December 31,
September 30,
June 30,
  
(Dollars in thousands, except per share data)
2018
  
2018
  
2017
  
2017
  
2017
  
Net Income
 $          6,730
  
 $          6,011
  
 $            497
  
 $         5,597
  
 $          5,002
  
 
Adjustments:
                    
 
Plus: Other real estate owned writedown
451
  
-
  
-
  
-
  
-
  
 
Plus: Software termination buyout fee
211
  
-
  
-
  
-
  
-
  
 
Plus: Acquisition related expenses
210
  
-
  
-
  
-
  
-
  
 
Plus: Severance expense
-
  
-
  
-
  
-
  
343
  
 
Less: Prepayment penalty fees
(8)
  
(25)
  
(36)
  
(165)
  
-
  
 
Less: Bank-owned life insurance proceeds
-
  
-
  
-
  
-
  
(271)
  
Total core adjustments before taxes
864
  
(25)
  
(36)
  
(165)
  
72
  
 
Tax (expense) benefit on core adjustments
(181)
  
5
  
13
  
58
  
(120)
  
 
Tax rate reduction due to Tax Cuts and Jobs Act
-
  
-
  
4,981
  
-
  
-
  
Total core adjustments after taxes
683
  
(20)
  
4,958
  
(107)
  
(48)
  
Total core net income
 $          7,413
  
 $          5,991
  
 $         5,455
  
 $         5,490
  
 $          4,954
  
                       
                       
Total net interest income
 $        21,991
  
 $         20,922
  
 $        20,528
  
 $       20,848
  
 $        19,823
  
 
Less: Prepayment penalty fees
(8)
  
(25)
  
(36)
  
(165)
  
-
  
Total core net interest income
 $        21,983
  
 $         20,897
  
 $        20,492
  
 $       20,683
  
 $        19,823
  
                       
Total noninterest income
 $          3,262
  
 $          3,145
  
 $         3,158
  
 $         3,300
  
 $          3,876
  
 
Less: Bank-owned life insurance proceeds
-
  
-
  
-
  
-
  
(271)
  
Total core noninterest income
 $          3,262
  
 $          3,145
  
 $         3,158
  
 $         3,300
  
 $          3,605
  
                       
Total noninterest expense
 $        17,019
  
 $         16,239
  
 $        15,387
  
 $       15,919
  
 $        15,878
  
 
Less: Other real estate owned writedown
              (451)
  
-
  
-
  
-
  
-
  
 
Less: Software termination buyout fee
              (211)
  
-
  
-
  
-
  
-
  
 
Less: Acquisition related expenses
              (210)
  
-
  
-
  
-
  
-
  
 
Less: Severance expense
-
  
-
  
-
  
-
  
(343)
  
Total core noninterest expense
 $        16,147
  
 $         16,239
  
 $        15,387
  
 $       15,919
  
 $        15,535
  
                       
Core earnings per common share, diluted
 $            0.46
  
 $            0.38
  
 $           0.34
  
 $          0.35
  
 $            0.31
  
                       
Core net interest rate margin (1)
2.90%
  
2.90%
  
2.91%
  
2.93%
  
2.92%
  
Core return on average assets (annualized)
0.92%
  
0.78%
  
0.73%
  
0.73%
  
0.68%
  
Core return on average equity (annualized)
10.53%
  
8.68%
  
7.86%
  
8.01%
  
7.36%
  
Core non-interest expense to average assets (annualized)
2.01%
  
2.10%
  
2.05%
  
2.11%
  
2.12%
  
Efficiency ratio (2)
63.96%
  
67.54%
  
65.06%
  
66.38%
  
66.31%
  
                       
Tangible book value (3)
 $          17.60
  
 $          17.32
  
 $         17.08
  
 $         17.12
  
 $          16.86
  
 
(1)
Represents tax-equivalent core net interest income as a percent of average interest-earning assets.
(2)
Represents core noninterest expense divided by the sum of core net interest income and core noninterest income.
(3)
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.