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Press Release

First Connecticut Bancorp, Inc. reports third quarter 2016 earnings of $0.25 earnings per share

Company Release - 10/19/2016 4:25 PM ET

FARMINGTON, Conn., Oct. 19, 2016 (GLOBE NEWSWIRE) -- First Connecticut Bancorp, Inc. (the “Company”) (NASDAQ:FBNK), the holding company for Farmington Bank (the “Bank”), reported net income of $3.8 million, or $0.25 diluted earnings per share for the quarter ended September 30, 2016 compared to net income of $4.2 million, or $0.28 diluted earnings per share for the quarter ended September 30, 2015.

For the quarter ended September 30, 2015, diluted earnings per share were positively affected ($0.03) by a $557,000 gain on the sale of foreclosed real estate.

“Once again this quarter we achieved solid organic growth in deposits, commercial loans and mortgage banking. We continue to build and enhance the franchise, in central Connecticut and western Massachusetts while focusing on growing tangible book value in this historic low interest rate environment,” stated John J. Patrick Jr., First Connecticut Bancorp’s Chairman, President and CEO.

Financial Highlights

  • Core net interest income increased $253,000 to $17.8 million in the third quarter of 2016 compared to the linked quarter and increased $83,000 compared to the third quarter of 2015.  
  • Core net interest rate margin was 2.74% in the third quarter of 2016 compared to 2.81% in the linked quarter and 2.79% in the prior year quarter.
  • Core noninterest expense to average assets was 2.22% in the third quarter of 2016 compared to 2.23% in the linked quarter and 2.26% in the prior year quarter.
  • Organic loan growth remained strong during the third quarter of 2016 as loans increased $52.2 million to $2.5 billion at September 30, 2016 and increased $138.1 million or 6% from a year ago.  Loan growth during the quarter was driven by the commercial and residential loan portfolios.
  • Overall deposits increased $196.4 million to $2.2 billion in the third quarter of 2016 compared to the linked quarter and increased $274.5 million or 14% from a year ago. 
  • Loans to deposits were 110.16% in the third quarter of 2016 compared to 118.17% in the linked quarter and 118.49% in the third quarter of 2015.
  • Tangible book value per share increased to $16.17 for the quarter ended September 30, 2016 compared to $15.95 on a linked quarter basis and $15.30 at September 30, 2015.
  • Checking accounts grew by 3% or 1,624 net new accounts in the third quarter of 2016 and by 12% or 5,815 net new accounts from a year ago.
  • Loan delinquencies 30 days and greater represented 0.74% of total loans at September 30, 2016 compared to 0.50% at June 30, 2016 and 0.67% at September 30, 2015.  Non-accrual loans represented 0.72% of total loans compared to 0.56% of total loans on a linked quarter basis and 0.71% of total loans at September 30, 2015.  The increase in non-accruals and delinquencies is primarily the result of one commercial real estate loan with a current loan to value of 35%.
  • The allowance for loan losses represented 0.86% of total loans at September 30, 2016, June 30, 2016 and at September 30, 2015. 
  • The Company paid a quarterly cash dividend of $0.08 per share during the third quarter, an increase of $0.01 compared to the linked quarter.           

Third quarter 2016 compared with second quarter 2016

Net interest income

  • Core net interest income increased $253,000 to $17.8 million in the third quarter of 2016 compared to the linked quarter primarily due to a $42.6 million increase in the average loans balance.
  • Core net interest margin was 2.74% in the third quarter of 2016 compared to 2.81% in the linked quarter.  The decrease in net margin was primarily due to lower yields on new loans originated and securities and an increase in cost of interest-bearing liabilities.
  • The cost of interest-bearing liabilities increased 2 basis points to 79 basis points in the third quarter of 2016 compared to 77 basis points in the linked quarter.

Provision for loan losses

  • Provision for loan losses was $698,000 for the third quarter of 2016 compared to $801,000 for the linked quarter. 
  • Net charge-offs in the quarter were $155,000 or 0.03% to average loans (annualized) compared to $255,000 or 0.04% to average loans (annualized) in the linked quarter.
  • The allowance for loan losses represented 0.86% of total loans at September 30, 2016 and June 30, 2016. 

Noninterest income

  • Total noninterest income increased $1.1 million to $3.7 million in the third quarter of 2016 compared to the linked quarter primarily due to an $188,000 increase in net gain on loans sold and a $778,000 increase in other noninterest income.
  • Net gain on loans sold increased $188,000 to $939,000 primarily due to an increase in volume.
  • Other income increased $778,000 primarily due to a $91,000 recovery in fair value in mortgage servicing rights compared to a $374,000 mortgage servicing rights impairment during the linked quarter and a $418,000 increase in swap fees offset by a $172,000 impairment on a SBIC fund.
  • Other noninterest income includes swap fees totaling $692,000 compared to $274,000 in the linked quarter.

Noninterest expense

  • Noninterest expense increased $840,000 in the third quarter of 2016 to $15.5 million compared to the linked quarter primarily due to a $138,000 increase in marketing expenses and a $537,000 increase in other operating expenses.
  • Other operating expenses increased $537,000 on a linked quarter basis primarily due to a $436,000 decrease in the provision for off-balance sheet commitments as a result of a change in accounting estimate in the linked quarter.

Income tax expense

  • Income tax expense was $1.5 million in the third quarter of 2016 compared to $1.4 million in the linked quarter.

Third quarter 2016 compared with third quarter 2015

Net interest income

  • Net interest income increased $83,000 to $17.8 million in the third quarter of 2016 compared to the prior year quarter due primarily to a $70.8 million increase in the average loan balance offset by a $628,000 increase in interest expense.  
  • Net interest margin decreased 5 basis points to 2.74% in the third quarter of 2016 compared to 2.79% in the prior year quarter primarily due to an increase in the cost of interest-bearing liabilities.
  • The cost of interest-bearing liabilities increased 13 basis points to 79 basis points in the third quarter of 2016 compared to 66 basis points in the prior year quarter due to money market and certificate of deposit promotions.

Provision for loan losses

  • Provision for loan losses was $698,000 for the third quarter of 2016 compared to $386,000 for the prior year quarter.
  • Net charge-offs (recoveries) in the quarter were $155,000 or 0.03% to average loans (annualized) compared to ($43,000) or (0.01%) to average loans (annualized) in the prior year quarter.
  • The allowance for loan losses represented 0.86% of total loans at September 30, 2016 and 2015. 

Noninterest income

  • Total noninterest income increased $444,000 to $3.7 million in the third quarter of 2016 compared to the prior year quarter primarily due to a $444,000 increase in other noninterest income.
  • Other noninterest income increased $444,000 in the third quarter of 2016 compared to the prior year quarter primarily due to an $180,000 increase in mortgage banking derivatives and a $302,000 increase in swap fees offset by a $141,000 increase in impairment on a SBIC fund.

Noninterest expense

  • Noninterest expense increased $766,000 in the third quarter of 2016 to $15.5 million compared to the prior year quarter primarily due to a $239,000 increase in marketing expenses and a $527,000 increase in other operating expenses.  Noninterest expense on a core basis increased $209,000 compared to the prior year quarter.
  • Other operating expenses increased $527,000 primarily due to a $557,000 gain on foreclosed real estate in the prior year quarter.

Income tax expense

  • Income tax expense was $1.5 million in the third quarter of 2016 compared to $1.6 million in the prior year quarter.

September 30, 2016 compared to September 30, 2015

Financial Condition

  • Total assets increased $123.5 million or 5% at September 30, 2016 to $2.8 billion compared to $2.7 billion at September 30, 2015, largely reflecting an increase in net loans.
  • Our investment portfolio totaled $141.4 million at September 30, 2016 compared to $196.9 million at September 30, 2015, a decrease of $55.4 million due to a reduction in collateral requirements.
  • Net loans increased $136.8 million or 6% at September 30, 2016 to $2.5 billion compared to $2.3 billion at September 30, 2015 due to our continued focus on commercial and residential lending.
  • Deposits increased $274.5 million or 14% to $2.2 billion at September 30, 2016 compared to $2.0 billion at September 30, 2015 primarily due to increases in money markets, demand deposits and certificates of deposit as we continue to develop and grow relationships in the geographical areas we serve.  We had brokered deposit balances totaling $43.2 million and $55.5 million at September 30, 2016 and 2015, respectively.
  • Federal Home Loan Bank of Boston advances decreased $153.0 million to $220.6 million at September 30, 2016 compared to $373.6 million at September 30, 2015.  Advances are used to support loan and securities growth.

Asset Quality

  • At September 30, 2016 the allowance for loan losses represented 0.86% of total loans and 119.26% of non-accrual loans, compared to 0.86% of total loans and 153.22% of non-accrual loans at June 30, 2016 and 0.86% of total loans and 120.05% of non-accrual loans at September 30, 2015.
  • Loan delinquencies 30 days and greater represented 0.74% of total loans at September 30, 2016 compared to 0.50% of total loans at June 30, 2016 and 0.67% of total loans at September 30, 2015.
  • Non-accrual loans represented 0.72% of total loans at September 30, 2016 compared to 0.56% of total loans at June 30, 2016 and 0.71% of total loans at September 30, 2015.
  • Net charge-offs (recoveries) in the quarter were $155,000 or 0.03% to average loans (annualized) compared to $255,000 or 0.04% to average loans (annualized) in the linked quarter and ($43,000) or (0.01%) 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 12.57% at September 30, 2016. 
  • Tangible book value per share is $16.17 compared to $15.95 on a linked quarter basis and $15.30 at September 30, 2015.
  • The Company had 600,945 shares remaining to repurchase at September 30, 2016 from prior regulatory approval. Repurchased shares are held as treasury stock and will be available for general corporate purposes. 
  • At September 30, 2016, the Company continued to have adequate liquidity including significant unused borrowing capacity at the Federal Home Loan Bank of Boston and the Federal Reserve Bank, as well as access to funding through brokered deposits and pre-approved unsecured lines of credit.

About First Connecticut Bancorp, Inc.

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

Conference Call

First Connecticut will host a conference call on Thursday, October 20, 2016 at 10:30am Eastern Time to discuss third quarter results.  Those wishing to participate in the call may dial-in to the call at 1-888-336-7151.  The Canada dial-in number is 1-855-669-9657 and the international dial-in number is 1-412-902-4177.  A webcast of the call will be available on the Investor Relations Section of the Farmington Bank website for an extended period of time.

Forward Looking Statements

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

Non-GAAP Financial Measures

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

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

We utilize these measures for internal planning and forecasting purposes. These non-GAAP financial measures should not be considered a substitute for GAAP basis measures and results, and we strongly encourage investors to review our consolidated financial statements in their entirety and not to rely on any single financial measure.

First Connecticut Bancorp, Inc.
Selected Financial Data (Unaudited)
          
 At or for the Three Months Ended
 September 30, June 30, March 31, December 31, September 30,
(Dollars in thousands, except per share data) 2016   2016   2016   2015   2015 
Selected Financial Condition Data:         
          
Total assets$2,831,960  $2,779,224  $2,701,614  $2,708,546  $2,708,454 
Cash and cash equivalents 89,940   66,743   59,166   59,139   47,447 
Securities held-to-maturity, at amortized cost 7,338   7,640   19,964   32,246   25,486 
Securities available-for-sale, at fair value 134,094   149,396   128,681   132,424   171,390 
Federal Home Loan Bank of Boston stock, at cost 15,139   18,240   15,688   21,729   23,038 
Loans, net 2,455,101   2,403,420   2,350,245   2,341,598   2,318,257 
Deposits 2,247,873   2,051,438   2,097,832   1,991,358   1,973,355 
Federal Home Loan Bank of Boston advances 220,600   340,600   259,600   377,600   373,600 
Total stockholders' equity 255,615   252,242   248,013   245,721   243,195 
Allowance for loan losses 21,263   20,720   20,174   20,198   20,010 
Non-accrual loans 17,829   13,523   13,093   14,913   16,668 
Impaired loans 37,599   38,216   38,588   41,017   42,664 
Loan delinquencies 30 days and greater 18,238   12,206   13,095   14,945   15,598 
          
Selected Operating Data:         
          
Interest income$21,805  $21,698  $21,323  $21,094  $21,094 
Interest expense 4,050   3,826   3,817   3,731   3,422 
Net interest income 17,755   17,872   17,506   17,363   17,672 
Provision for loan losses 698   801   217   776   386 
Net interest income after provision for loan losses 17,057   17,071   17,289   16,587   17,286 
Noninterest income 3,685   2,617   2,900   3,468   3,241 
Noninterest expense 15,484   14,644   15,277   15,958   14,718 
Income before income taxes 5,258   5,044   4,912   4,097   5,809 
Income tax expense 1,485   1,401   1,299   1,716   1,594 
          
Net income$3,773  $3,643  $3,613  $2,381  $4,215 
          
Performance Ratios (annualized):         
          
Return on average assets 0.54%  0.54%  0.54%  0.35%  0.62%
Return on average equity 5.89%  5.77%  5.82%  3.86%  6.92%
Net interest rate spread (1) 2.56%  2.70%  2.65%  2.61%  2.65%
Net interest rate margin (2) 2.74%  2.87%  2.82%  2.76%  2.79%
Non-interest expense to average assets (3) 2.22%  2.23%  2.27%  2.37%  2.26%
Efficiency ratio (4) 72.53%  73.52%  75.19%  78.19%  73.04%
Average interest-earning assets to average         
interest-bearing liabilities 129.42%  129.54%  128.45%  127.48%  126.44%
Loans to deposits 110.16%  118.17%  112.99%  118.60%  118.49%
          
Asset Quality Ratios:         
          
Allowance for loan losses as a percent of total loans 0.86%  0.86%  0.85%  0.86%  0.86%
Allowance for loan losses as a percent of         
non-accrual loans 119.26%  153.22%  154.08%  135.44%  120.05%
Net charge-offs (recoveries) to average loans (annualized) 0.03%  0.04%  0.04%  0.10%  (0.01%)
Non-accrual loans as a percent of total loans 0.72%  0.56%  0.55%  0.63%  0.71%
Non-accrual loans as a percent of total assets 0.63%  0.49%  0.48%  0.55%  0.62%
Loan delinquencies 30 days and greater as a         
percent of total loans 0.74%  0.50%  0.55%  0.63%  0.67%
          
Per Share Related Data:         
          
Basic earnings per share$0.25  $0.24  $0.24  $0.16  $0.28 
Diluted earnings per share$0.25  $0.24  $0.24  $0.16  $0.28 
Dividends declared per share$0.08  $0.07  $0.07  $0.06  $0.06 
Tangible book value (5)$16.17  $15.95  $15.72  $15.47  $15.30 
Common stock shares outstanding 15,805,748   15,818,494   15,780,657   15,881,663   15,893,263 
Weighted-average basic shares outstanding 14,823,914   14,765,452   14,720,892   14,785,058   14,632,951 
Weighted-average diluted shares outstanding 15,192,006   15,077,291   15,012,540   15,146,365   14,887,461 
          
          
(1) Represents the difference between the yield on average interest-earning assets and the cost of average interest-bearing liabilities on a tax-equivalent basis.
          
(2) Represents tax-equivalent net interest income as a percent of average interest-earning assets.
          
(3) Represents core noninterest expense annualized divided by average assets.  See "Reconciliation of Non-GAAP Financial Measures" table.
          
(4) Represents core noninterest expense divided by the sum of core net interest income and core noninterest income. See "Reconciliation of Non-GAAP Financial Measures" table.
          
(5) Represents ending stockholders’ equity less goodwill and intangible assets (excluding mortgage servicing rights) divided by ending common shares outstanding. The Company does not have goodwill and intangible assets for any of the periods presented.  See "Reconciliation of Non-GAAP Financial Measures" table.
          


First Connecticut Bancorp, Inc.
Selected Financial Data (Unaudited)
          
 At or for the Three Months Ended
 September 30, June 30, March 31, December 31, September 30,
(Dollars in thousands) 2016   2016   2016   2015   2015 
Capital Ratios:         
          
Equity to total assets at end of period 9.03%  9.08%  9.18%  9.07%  8.98%
Average equity to average assets 9.20%  9.34%  9.22%  9.17%  9.00%
Total Capital (to Risk Weighted Assets) 12.57%* 12.63%  12.88%  12.88%  12.72%
Tier I Capital (to Risk Weighted Assets) 11.62%* 11.69%  11.92%  11.91%  11.76%
Common Equity Tier I Capital 11.62%* 11.69%  11.92%  11.91%  11.76%
Tier I Leverage Capital (to Average Assets) 9.40%* 9.55%  9.44%  9.39%  9.24%
Total equity to total average assets 9.17%  9.32%  9.20%  9.13%  8.98%
          
* Estimated         
          
Loans and Allowance for Loan Losses:         
          
Real estate         
Residential$864,054  $842,427  $855,148  $849,722  $851,784 
Commercial 931,703   922,643   893,477   887,431   862,367 
Construction 50,083   41,466   36,557   30,895   29,244 
Installment 3,211   3,267   3,338   2,970   3,007 
Commercial 449,008   437,046   402,960   409,550   410,704 
Collateral 1,621   1,689   1,668   1,668   1,632 
Home equity line of credit 172,148   171,212   172,325   174,701   174,579 
Revolving credit 82   79   77   91   96 
Resort 512   535   759   784   807 
Total loans 2,472,422   2,420,364   2,366,309   2,357,812   2,334,220 
Net deferred loan costs 3,942   3,776   4,110   3,984   4,047 
Loans 2,476,364   2,424,140   2,370,419   2,361,796   2,338,267 
Allowance for loan losses (21,263)  (20,720)  (20,174)  (20,198)  (20,010)
Loans, net$2,455,101  $2,403,420  $2,350,245  $2,341,598  $2,318,257 
          
Deposits:         
          
Noninterest-bearing demand deposits$419,664  $415,562  $396,356  $401,388  $359,757 
Interest-bearing         
NOW accounts 590,213   429,973   529,267   468,054   527,128 
Money market 536,979   498,847   488,497   460,737   440,249 
Savings accounts 223,848   229,868   223,188   220,389   211,170 
Time deposits 477,169   477,188   460,524   440,790   435,051 
Total interest-bearing deposits 1,828,209   1,635,876   1,701,476   1,589,970   1,613,598 
Total deposits$2,247,873  $2,051,438  $2,097,832  $1,991,358  $1,973,355 
          


First Connecticut Bancorp, Inc.
Consolidated Statements of Condition (Unaudited)
            
       September 30 June 30, September 30
        2016   2016   2015 
(Dollars in thousands)           
Assets           
Cash and due from banks      $33,206  $37,455  $33,564 
Interest bearing deposits with other institutions       56,734   29,288   13,883 
Total cash and cash equivalents       89,940   66,743   47,447 
Securities held-to-maturity, at amortized cost       7,338   7,640   25,486 
Securities available-for-sale, at fair value       134,094   149,396   171,390 
Loans held for sale       5,462   6,912   8,416 
Loans (1)       2,476,364   2,424,140   2,338,267 
Allowance for loan losses       (21,263)  (20,720)  (20,010)
Loans, net       2,455,101   2,403,420   2,318,257 
Premises and equipment, net       18,383   18,917   17,870 
Federal Home Loan Bank of Boston stock, at cost       15,139   18,240   23,038 
Accrued income receivable       6,413   6,736   6,305 
Bank-owned life insurance       51,364   51,029   50,633 
Deferred income taxes       15,136   15,405   15,935 
Prepaid expenses and other assets       33,590   34,786   23,677 
Total assets     $2,831,960  $2,779,224  $2,708,454 
            
Liabilities and Stockholders' Equity           
Deposits           
Interest-bearing      $1,828,209  $1,635,876  $1,613,598 
Noninterest-bearing       419,664   415,562   359,757 
        2,247,873   2,051,438   1,973,355 
Federal Home Loan Bank of Boston advances       220,600   340,600   373,600 
Repurchase agreement borrowings       10,500   10,500   10,500 
Repurchase liabilities       35,036   63,027   58,084 
Accrued expenses and other liabilities       62,336   61,417   49,720 
Total liabilities      2,576,345   2,526,982   2,465,259 
            
Stockholders' Equity           
Common stock       181   181   181 
Additional paid-in-capital       183,769   183,504   181,195 
Unallocated common stock held by ESOP       (10,833)  (11,100)  (11,893)
Treasury stock, at cost       (31,645)  (31,868)  (30,411)
Retained earnings       120,487   117,980   111,274 
Accumulated other comprehensive loss       (6,344)  (6,455)  (7,151)
Total stockholders' equity      255,615   252,242   243,195 
Total liabilities and stockholders' equity     $2,831,960  $2,779,224  $2,708,454 
            
(1) Loans include net deferred fees and unamortized premiums of $3.9 million, $3.8 million and $4.0 million at September 30, 2016, June 30, 2016 and September 30, 2015, respectively.
            
            


First Connecticut Bancorp, Inc.
Consolidated Statements of Income (Unaudited)
                
       Three Months Ended Nine Months Ended
       September 30 June 30, September 30 September 30
(Dollars in thousands, except per share data)       2016   2016   2015   2016   2015 
Interest income               
Interest and fees on loans               
Mortgage      $16,134  $16,120  $15,861  $48,161  $46,250 
Other       4,983   4,858   4,594   14,555   12,853 
Interest and dividends on investments               
United States Government and agency obligations       419   448   401   1,285   1,109 
Other bonds       13   14   13   40   66 
Corporate stocks       210   232   217   681   493 
Other interest income       46   26   8   104   19 
Total interest income      21,805   21,698   21,094   64,826   60,790 
Interest expense               
Deposits       2,975   2,735   2,412   8,446   6,761 
Interest on borrowed funds       955   980   890   2,902   2,445 
Interest on repo borrowings       98   96   96   289   351 
Interest on repurchase liabilities       22   15   24   56   87 
Total interest expense      4,050   3,826   3,422   11,693   9,644 
Net interest income      17,755   17,872   17,672   53,133   51,146 
Provision for loan losses       698   801   386   1,716   1,664 
Net interest income              
after provision for loan losses       17,057   17,071   17,286   51,417   49,482 
Noninterest income               
Fees for customer services       1,600   1,530   1,536   4,614   4,409 
Gain on sale of investments       -   -   -   -   1,523 
Net gain on loans sold       939   751   993   2,180   1,925 
Brokerage and insurance fee income       58   54   54   166   163 
Bank owned life insurance income       335   307   349   1,056   946 
Other       753   (25)  309   1,186   1,013 
Total noninterest income      3,685   2,617   3,241   9,202   9,979 
Noninterest expense               
Salaries and employee benefits       9,285   9,213   9,302   27,874   27,127 
Occupancy expense       1,271   1,189   1,219   3,679   3,858 
Furniture and equipment expense       1,020   1,018   1,034   3,099   3,147 
FDIC assessment       392   383   413   1,179   1,227 
Marketing       682   544   443   1,647   1,386 
Other operating expenses       2,834   2,297   2,307   7,927   8,507 
Total noninterest expense      15,484   14,644   14,718   45,405   45,252 
Income before income taxes      5,258   5,044   5,809   15,214   14,209 
Income tax expense       1,485   1,401   1,594   4,185   4,011 
Net income     $3,773  $3,643  $4,215  $11,029  $10,198 
                
Earnings per share:               
Basic      $0.25  $0.24  $0.28  $0.74  $0.68 
Diluted       0.25   0.24   0.28   0.73   0.67 
Weighted average shares outstanding:               
Basic       14,823,914   14,765,452   14,632,951   14,770,282   14,706,908 
Diluted       15,192,006   15,077,291   14,887,461   15,093,109   14,883,362 
                


First Connecticut Bancorp, Inc.
Consolidated Average Balances, Yields and Rates (Unaudited)
            
 For The Three Months Ended
 September 30, 2016 June 30, 2016 September 30, 2015
 Average BalanceInterest and Dividends (1)Yield/Cost Average BalanceInterest and Dividends (1)Yield/Cost Average BalanceInterest and Dividends (1)Yield/Cost
(Dollars in thousands)           
Interest-earning assets:           
Loans$2,430,114 $21,650  3.54% $2,387,538 $21,499  3.62% $2,359,293 $20,937  3.52%
Securities 165,738  481  1.15%  150,257  515  1.38%  191,530  465  0.96%
Federal Home Loan Bank of Boston stock 18,206  161  3.52%  17,763  179  4.05%  22,883  166  2.88%
Federal funds and other earning assets 36,439  46  0.50%  22,607  26  0.46%  11,089  8  0.29%
Total interest-earning assets 2,650,497  22,338  3.35%  2,578,165  22,219  3.47%  2,584,795  21,576  3.31%
Noninterest-earning assets 135,828     127,656     122,438   
Total assets$2,786,325    $2,705,821    $2,707,233   
            
Interest-bearing liabilities:           
NOW accounts$506,509 $385  0.30% $470,835 $336  0.29% $486,798 $357  0.29%
Money market 525,301  1,085  0.82%  486,826  930  0.77%  437,000  867  0.79%
Savings accounts 221,981  60  0.11%  226,820  59  0.10%  210,978  58  0.11%
Certificates of deposit 481,901  1,445  1.19%  473,976  1,410  1.20%  430,152  1,130  1.04%
Total interest-bearing deposits 1,735,692  2,975  0.68%  1,658,457  2,735  0.66%  1,564,928  2,412  0.61%
Federal Home Loan Bank of Boston Advances 250,459  955  1.52%  279,601  980  1.41%  411,236  890  0.86%
Repurchase agreement borrowings 10,500  98  3.71%  10,500  96  3.68%  10,500  96  3.63%
Repurchase liabilities 51,297  22  0.17%  41,757  15  0.14%  57,644  24  0.17%
Total interest-bearing liabilities 2,047,948  4,050  0.79%  1,990,315  3,826  0.77%  2,044,308  3,422  0.66%
Noninterest-bearing deposits 417,917     404,809     368,200   
Other noninterest-bearing liabilities 64,201     58,085     51,089   
Total liabilities 2,530,066     2,453,209     2,463,597   
Stockholders' equity 256,259     252,612     243,636   
Total liabilities and stockholders' equity$2,786,325    $2,705,821    $2,707,233   
            
Tax-equivalent net interest income $18,288    $18,393    $18,154  
Less: tax-equivalent adjustment  (533)    (521)    (482) 
Net interest income $17,755    $17,872    $17,672  
            
Net interest rate spread (2)   2.56%    2.70%    2.65%
Net interest-earning assets (3)$602,549    $587,850    $540,487   
Net interest margin (4)   2.74%    2.87%    2.79%
Average interest-earning assets to average interest-bearing liabilities           
 129.42%  129.54%  126.44%
            
(1) On a fully-tax equivalent basis.
(2) Net interest rate spread represents the difference between the yield on average interest-earning assets and the cost of average interest-bearing liabilities on a tax-equivalent basis.
(3) Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities.
(4) Net interest margin represents tax-equivalent net interest income divided by average total interest-earning assets.
            


First Connecticut Bancorp, Inc.
Consolidated Average Balances, Yields and Rates (Unaudited)
        
 For The Nine Months Ended September 30,
  2016   2015 
 Average BalanceInterest and
Dividends (1)
Yield/Cost Average BalanceInterest and
Dividends (1)
Yield/Cost
(Dollars in thousands)       
Interest-earning assets:       
Loans$2,394,991 $64,282  3.59% $2,256,907 $60,259  3.57%
Securities 156,876  1,479  1.26%  188,781  1,337  0.95%
Federal Home Loan Bank of Boston stock 18,590  527  3.79%  21,004  331  2.11%
Federal funds and other earning assets 28,677  104  0.48%  11,166  19  0.23%
Total interest-earning assets 2,599,134  66,392  3.41%  2,477,858  61,946  3.34%
Noninterest-earning assets 130,327     118,969   
Total assets$2,729,461    $2,596,827   
        
Interest-bearing liabilities:       
NOW accounts$500,097 $1,101  0.29% $463,878 $988  0.28%
Money market 497,130  3,010  0.80%  450,985  2,635  0.78%
Savings accounts 221,635  177  0.11%  212,427  172  0.11%
Certificates of deposit 468,979  4,158  1.18%  397,094  2,966  1.00%
Total interest-bearing deposits 1,687,841  8,446  0.67%  1,524,384  6,761  0.59%
Federal Home Loan Bank of Boston Advances 267,527  2,902  1.45%  361,094  2,445  0.91%
Repurchase agreement borrowings 10,500  289  3.66%  13,346  351  3.52%
Repurchase liabilities 46,882  56  0.16%  56,061  87  0.21%
Total interest-bearing liabilities 2,012,750