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Fox Chase Bancorp, Inc. Reports Earnings for the Three Months Ended March 31, 2016

HATBORO, Pa., April 27, 2016 (GLOBE NEWSWIRE) -- Fox Chase Bancorp, Inc. (the “Company”) (NASDAQ:FXCB), the holding company for Fox Chase Bank (the “Bank”), today announced net income of $2.2 million, or $0.20 per diluted share, for the three months ended March 31, 2016, compared to net income of $2.3 million, or $0.20 per diluted share, for the three months ended March 31, 2015.  

The first quarter 2016 results include after-tax merger-related professional fees of $320,000 ($0.03 per share).  The first quarter 2015 results include after-tax core data processing system conversion-related expenses of $152,000 ($0.01 per share).

Commenting on performance for the quarter, Thomas M. Petro, President and CEO said, “The Company continues to execute on its commercial business strategy as average commercial loans increased 10.2% as compared to the same quarter in 2015.  We continue to be excited about the merger with Univest Corporation of Pennsylvania and are moving forward to obtain the necessary approvals to close the transaction in the third quarter of 2016.  We believe this affiliation will create a stronger franchise and provide greater benefits to customers, shareholders and the communities we serve.”

Highlights for the quarter ended March 31, 2016 included:

  • Total average assets were $1.13 billion for the three months ended March 31, 2016 as compared to $1.12 billion for the three months ended December 31, 2015 and $1.10 billion for the three months ended March 31, 2015. Average commercial loans increased by $62.6 million, or 10.2%, to $678.1 million for the three months ended March 31, 2016, compared to $615.5 million for the three months ended March 31, 2015.  Additionally, average commercial loans increased by $33.7 million, or 5.2%, for the three months ended March 31, 2016, compared to $644.4 million for the three months ended December 31, 2015. 
  • Total assets were $1.13 billion at March 31, 2016 as compared to $1.13 billion at December 31, 2015 and $1.12 billion at March 31, 2015.  Total commercial loans increased by $13.8 million, or 2.0%, to $687.3 million at March 31, 2016, compared to $673.5 at December 31, 2015, and increased $44.8 million, or 7.0%, compared to $642.5 million at March 31, 2015.                                             
  • Nonperforming assets totaled $5.2 million, or 0.46% of total assets, at March 31, 2016 and at December 31, 2015, respectively, and $6.2 million, or 0.55% of total assets, at March 31, 2015.
  • Net interest income decreased $128,000, or 1.5%, to $8.5 million for the three months ended March 31, 2016, compared to $8.7 million for the three months ended March 31, 2015. The net interest margin was 3.16% for the three months ended March 31, 2016, 3.10% for the three months ended December 31, 2015, and 3.29% for the three months ended March 31, 2015.  The increase in net interest margin as compared to the three months ended December 31, 2015 was primarily due to a reduction in excess liquidity from the three months ended December 31 2015.  The decrease from the three months ended March 31, 2015 was primarily due to the receipt of a $254,000 special dividend from the FHLB of Pittsburgh, which increased the net interest margin by 0.10%.
  • Credit related costs, which include (i) provision for loan losses, (ii) valuation adjustments on assets acquired through foreclosure and (iii) net (loss) gain on sale of assets acquired through foreclosure, totaled $61,000 for the three months ended March 31, 2016, compared to $98,000 for the three months ended December 31, 2015 and $487,000 for the three months ended March 31, 2015.  Net loan charge-offs totaled $37,000 for the three months ended March 31, 2016, compared to $161,000 for the three months ended December 31, 2015 and $24,000 for the three months ended March 31, 2015. There were no commercial loan charge-offs during the three months ended March 31, 2016.
  • The allowance for loan losses was $10.6 million, or 1.34% of total loans, at March 31, 2016, compared to $10.6 million, or 1.36% of total loans, at December 31, 2015 and $11.2 million, or 1.46% of total loans at March 31, 2015.
  • Noninterest income increased $95,000, or 16.6%, to $666,000 for the three months ended March 31, 2016 compared to $571,000 for the three months ended March 31, 2015 primarily due to an increase of $95,000 in income on bank-owned life insurance as the Bank purchased $10.0 million of bank-owned life insurance in the third quarter of 2015 and an increase of $67,000 in other noninterest income primarily due to increased cash management fees offset by a decrease of $45,000 in equity in earnings of affiliate due to lower mortgage volumes.
  • Noninterest expense increased $120,000, or 2.1%, to $5.9 million for the three months ended March 31, 2016, compared to $5.8 million for the three months ended March 31, 2015.  This increase was primarily due to an increase of $224,000 in salaries, benefits and other compensation and an increase of $175,000 in professional fees related to legal fees regarding the merger offset by a decrease of $165,000 in data processing fees.  Data processing fees were higher in 2015 due to the Bank’s change in outsourced data processing systems, which was completed in the fourth quarter of 2015.
  • Excluding the $346,000 of pre-tax merger-related costs incurred in the three months ended March 31, 2016 and the pre-tax one-time core data processing system costs of $230,000 during the three months ended March 31, 2015, noninterest expense remained flat at $5.5 million.
  • The efficiency ratio was 63.7% and 62.2% for the three months ended March 31, 2016 and 2015, respectively. Excluding the previously discussed merger-related costs for 2016 and one-time core data processing systems conversion costs for 2015, the efficiency ratio was 60.0% and 59.7% for the three months ended March 31, 2016 and 2015, respectively.
  • Income tax provision increased $304,000, or 41.8%, to $1.0 million for the three months ended March 31, 2016, compared to $727,000 for the three months ended March 31, 2015.  Income tax provision for the three months ended March 31, 2015 includes the reversal of an $182,000 valuation allowance on certain state deferred tax assets. The effective income tax rate for the three months ended March 31, 2016 and March 31, 2015 was 31.4% and 24.2%, respectively.  Excluding the reversal, the effective income tax rate for the three months ended March 31, 2015 was 30.3%.  

The Company also announced that its Board of Directors declared a cash dividend of $0.14 per outstanding share of common stock. The dividend will be paid on or about May 26, 2016 to stockholders of record as of the close of business on May 12, 2016. 

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

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

 

CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in Thousands, Except Per Share Data)
 
      Three Months Ended
      March 31,
       2016   2015 
             
      (Unaudited)
INTEREST INCOME  
 Interest and fees on loans $  8,506  $  8,139 
 Interest and dividends on investment securities    1,632     1,982 
 Other interest income    9     3 
   Total Interest Income    10,147     10,124 
INTEREST EXPENSE    
 Deposits     807     715 
 Short-term borrowings    59     32 
 Federal Home Loan Bank advances    557     539 
 Other borrowed funds    180     166 
   Total Interest Expense    1,603     1,452 
   Net Interest Income    8,544     8,672 
 Provision for loan losses    45     472 
   Net Interest Income after Provision for Loan Losses    8,499     8,200 
NONINTEREST INCOME    
 Service charges and other fee income    362     384 
 Income on bank-owned life insurance    215     120 
 Equity in earnings of affiliate    (5)    40 
 Other      94     27 
         
   Total Noninterest Income    666     571 
NONINTEREST EXPENSE    
 Salaries, benefits and other compensation    3,943     3,719 
 Occupancy expense    430     477 
 Furniture and equipment expense    77     83 
 Data processing costs    408     573 
 Professional fees    538     363 
 Marketing expense    24     41 
 FDIC premiums    134     119 
 Assets acquired through foreclosure expense    30     30 
 Other      301     360 
   Total Noninterest Expense    5,885     5,765 
   Income Before Income Taxes    3,280     3,006 
  Income tax provision    1,031     727 
   Net Income  $  2,249  $  2,279 
Earnings per share:    
 Basic   $  0.20  $  0.21 
 Diluted  $  0.20  $  0.20 


CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Dollars in Thousands, Except Share Data)
 
    March 31, December 31,
     2016   2015 
    (Unaudited) (Audited)
ASSETS
 Cash and due from banks $3,737  $3,413 
 Interest-earning demand deposits in other banks  5,375   4,385 
  Total cash and cash equivalents  9,112   7,798 
 Investment securities available-for-sale  135,826   139,751 
 Investment securities held-to-maturity (fair value of $146,665 at    
  March 31, 2016 and $149,850 at December 31, 2015)  144,528   150,190 
 Loans, net of allowance for loan losses of $10,570    
  at March 31, 2016 and $10,562 at December 31, 2015  776,669   767,683 
 Federal Home Loan Bank stock, at cost  6,186   6,734 
 Bank-owned life insurance  25,902   25,687 
 Premises and equipment, net  8,895   9,030 
 Assets acquired through foreclosure  2,615   2,623 
 Real estate held for investment  1,620   1,620 
 Accrued interest receivable  3,348   3,145 
 Mortgage servicing rights, net  97   104 
 Deferred tax asset, net  3,993   5,142 
 Other assets  12,950   6,096 
  Total Assets $1,131,741  $1,125,603 
       
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
 Deposits $815,708  $764,974 
 Short-term borrowings  15,000   38,496 
 Federal Home Loan Bank advances  90,000   110,000 
 Other borrowed funds  30,000   30,000 
 Advances from borrowers for taxes and insurance  1,350   1,422 
 Accrued interest payable  302   319 
 Accrued expenses and other liabilities  1,541   3,478 
  Total Liabilities  953,901   948,689 
STOCKHOLDERS' EQUITY
 Preferred stock ($.01 par value; 1,000,000 shares authorized,    
  none issued and outstanding at March 31, 2016 and December 31, 2015)  -   - 
 Common stock ($.01 par value; 60,000,000 shares authorized,    
  11,767,590 shares outstanding at March 31, 2016    
  and December 31, 2015)  149   149 
 Additional paid-in capital  141,833   142,189 
 Treasury stock, at cost (3,141,201 shares at March 31, 2016 and    
  December 31, 2015)  (44,468)  (44,468)
 Common stock acquired by benefit plans  (5,876)  (6,717)
 Retained earnings  85,542   86,241 
 Accumulated other comprehensive income (loss), net  660   (480)
  Total Stockholders' Equity  177,840   176,914 
       
  Total Liabilities and Stockholders' Equity $1,131,741  $1,125,603 
       


SELECTED CONSOLIDATED FINANCIAL AND OTHER DATA OF THE COMPANY (UNAUDITED)
(Dollars in Thousands, Except Per Share Data)
 
   March 31, December 31, March 31, 
    2016   2015   2015  
CAPITAL RATIOS:       
Stockholders’ equity (to total assets) (1)  15.71 % 15.72 % 15.59 %
         
Common equity tier 1 capital ratio (to risk-weighted assets) (2)  16.66   16.69   16.28  
Tier 1 leverage ratio (to adjusted average assets) (2)  13.74   13.52   13.04  
Tier 1 capital ratio (to risk-weighted assets) (2)  16.66   16.69   16.28  
Total capital ratio (to risk-weighted assets) (2)  17.63   17.68   17.34  
         
ASSET QUALITY INDICATORS:       
Nonperforming Assets:       
 Nonaccruing loans $2,606  $2,534  $3,374  
 Accruing loans past due 90 days or more  -   -   -  
 Total nonperforming loans $2,606  $2,534  $3,374  
 Assets acquired through foreclosure  2,615   2,623   2,804  
 Total nonperforming assets $5,221  $5,157  $6,178  
         
 Ratio of nonperforming loans to total loans  0.33 % 0.33 % 0.44 %
 Ratio of nonperforming assets to total assets  0.46   0.46   0.55  
 Ratio of allowance for loan losses to total loans  1.34   1.36   1.46  
 Ratio of allowance for loan losses to nonperforming loans  405.6   416.8   331.3  
Troubled Debt Restructurings:       
 Nonaccruing troubled debt restructurings (3) $1,113  $1,122  $1,349  
 Accruing troubled debt restructurings  6,488   6,440   4,817  
 Total troubled debt restructurings $7,601  $7,562  $6,166  
         
Past Due Loans:       
 30 - 59 days $412  $1,021  $653  
 60 - 89 days  70   685   127  
 Total $482  $1,706  $780  
               
(1) Represents stockholders’ equity ratio of Fox Chase Bancorp, Inc. 
(2) Represents regulatory capital ratios of Fox Chase Bank. 
(3) Nonaccruing troubled debt restructurings are included in total nonaccruing loans above 


  At or for the Three Months Ended
   March 31, December 31,  March 31, 
    2016   2015   2015  
PERFORMANCE RATIOS  (4):       
 Return on average assets  0.80 %  0.64 %  0.83 % 
 Return on average equity  5.07   4.03   5.18  
 Net interest margin  3.16   3.10   3.29  
 Efficiency ratio (5)  63.7   69.9   62.2  
 Efficiency ratio (excluding one-time costs) (6)  60.0   61.4   59.7  
OTHER:       
 Average commercial loans $678,099  $644,403  $615,474  
 Tangible book value per share - Core (7) $15.06  $15.07  $14.88  
 Tangible book value per share (8) $15.11  $15.03  $14.94  
 Employees (full-time equivalents)  132   134   136  
  
(4) Annualized 
(5)  Represents noninterest expense, excluding valuation adjustments on assets acquired through foreclosure, divided by the sum of net interest income and noninterest income, excluding gains or losses on the sale of securities, premises and equipment and assets acquired through foreclosure. 
(6)  Same as (5) except noninterest expense in this ratio excludes costs related to the core data processing systems conversion and the previously announced merger with Univest Corporation of Pennsylvania.  Such costs were $346,000, $779,000 and $230,000 for the three months ended March 31, 2016, December 31, 2015 and March 31, 2015, respectively.   
(7) Total stockholders’ equity, excluding the impact of accumulated other comprehensive income (loss), net ($660,000 at March 31, 2016, $(480,000) at December 31, 2015 and $666,000 at March 31, 2015), divided by total shares outstanding. 
(8) Total stockholders’ equity divided by total shares outstanding.  Tangible book value per share and book value per share were the same for all periods indicated. 


AVERAGE BALANCE SHEET
(Dollars in Thousands, Unaudited)
 
    Three Months Ended March 31,
     2016   2015 
      Interest     Interest  
    Average and  Yield/ Average and  Yield/
    Balance Dividends Cost (2) Balance Dividends Cost (2)
Assets:                        
Interest-earning assets:           
 Interest-earning demand deposits$10,417  $9   0.34% $11,550  $3   0.10%
 Investment securities 292,553   1,632   2.23%  311,049   1,982   2.55%
 Loans (1) 781,349   8,506   4.37%  742,005   8,139   4.44%
 Allowance for loan losses (10,563)      (10,777)    
 Net loans 770,786   8,506     731,228   8,139   
  Total interest-earning assets 1,073,756   10,147   3.80%  1,053,827   10,124   3.88%
Noninterest-earning assets 53,961       42,702     
 Total assets$1,127,717      $1,096,529     
Liabilities and equity:           
Interest-bearing liabilities:           
 Interest-bearing deposits$591,839  $807   0.55% $546,465  $715   0.53%
 Borrowings 178,098   796   1.80%  190,129   737   1.57%
 Total interest-bearing liabilities 769,937   1,603   0.84%  736,594   1,452   0.80%
 Noninterest-bearing deposits 175,527       176,389     
 Other noninterest-bearing liabilities 4,645       7,442     
  Total liabilities 950,109       920,425     
 Stockholders' equity 177,444       175,552     
 Accumulated comprehensive income 164       552     
  Total stockholders' equity 177,608       176,104     
  Total liabilities and stockholders' equity$1,127,717      $1,096,529     
               
 Net interest income  $8,544      $8,672   
 Interest rate spread     2.96%      3.08%
 Net interest margin     3.16%      3.29%
 
(1) Nonperforming loans are included in average balance computation.
(2) Yields are not presented on a tax-equivalent basis.


AVERAGE BALANCE SHEET
(Dollars in Thousands, Unaudited)
 
    Three Months Ended
    March 31, 2016 December 31, 2015
      Interest     Interest  
    Average and  Yield/ Average and  Yield/
    Balance Dividends Cost (2) Balance Dividends Cost (2)
Assets:                        
Interest-earning assets:           
 Interest-earning demand deposits$10,417  $9   0.34% $26,625  $15   0.23%
 Investment securities 292,553   1,632   2.23%  298,284   1,650   2.21%
 Loans (1) 781,349   8,506   4.37%  752,744   8,288   4.37%
 Allowance for loan losses (10,563)      (10,605)    
 Net loans 770,786   8,506     742,139   8,288   
  Total interest-earning assets 1,073,756   10,147   3.80%  1,067,048   9,953   3.71%
Noninterest-earning assets 53,961       53,523     
 Total assets$1,127,717      $1,120,571     
Liabilities and equity:           
Interest-bearing liabilities:           
 Interest-bearing deposits$591,839  $807   0.55% $586,944  $812   0.55%
 Borrowings 178,098   796   1.80%  154,865   751   1.93%
 Total interest-bearing liabilities 769,937   1,603   0.84%  741,809   1,563   0.84%
 Noninterest-bearing deposits 175,527       197,711     
 Other noninterest-bearing liabilities 4,645       4,292     
  Total liabilities 950,109       943,812     
 Stockholders' equity 177,444       176,601     
 Accumulated comprehensive income 164       158     
  Total stockholders' equity 177,608       176,759     
  Total liabilities and stockholders' equity$1,127,717      $1,120,571     
               
 Net interest income  $8,544      $8,390   
 Interest rate spread     2.96%      2.87%
 Net interest margin     3.16%      3.10%
 
(1) Nonperforming loans are included in average balance computation.
(2) Yields are not presented on a tax-equivalent basis.



Contact: Roger S. Deacon 
Chief Financial Officer
Phone: (215) 775-1435

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