Fox Chase Bancorp, Inc. Reports Increase in Earnings for the Quarter and Year Ended December 31, 2012

Announces an Increase in Cash Dividend to $0.06 Per Share


HATBORO, Pa., Feb. 5, 2013 (GLOBE NEWSWIRE) -- Fox Chase Bancorp, Inc. (the "Company") (Nasdaq:FXCB), the holding company for Fox Chase Bank (the "Bank"), today announced net income of $5.1 million, or $0.43 per diluted share, for the year ended December 31, 2012, compared to $4.8 million, or $0.36 per diluted share, for the year ended December 31, 2011. The Company reported net income of $1.9 million, or $0.16 per diluted share for the quarter ended December 31, 2012 compared to net income of $1.0 million, or $0.09 per diluted share, for the quarter ended December 31, 2011.

The Company also announced that its Board of Directors declared an increase in the cash dividend to $0.06 per outstanding share of common stock. The dividend will be paid on or about March 5, 2013 to stockholders of record as of the close of business on February 19, 2013.

Thomas M. Petro, President and Chief Executive Officer said, "We are pleased with our financial performance as 2012 diluted earnings per share increased by 19.4% to $0.43 per share. Continued focus on our commercial business strategy produced an annual increase of 18.6% in the average balance of commercial loans and an 18.4% in the average balance of non-interest bearing deposits. While the pace of nonperforming asset formation has slowed, the levels remain elevated and we continue to devote considerable energy and costs to resolving these issues. In looking ahead to 2013, we remain focused on increasing the Company's profitability, building our commercial loan portfolio and reducing nonperforming assets."

Highlights for the year and quarter ended December 31, 2012 included:

  • Total assets were $1.09 billion at December 31, 2012, an increase of $72.5 million, or 7.1% from $1.02 billion at December 31, 2011. Total loans were $683.9 million at December 31, 2012, an increase of $13.3 million, or 2.0%, from $670.6 million at December 31, 2011, and an increase of $10.2 million, or 1.5%, from $673.7 million at September 30, 2012. The increase during the year ended December 31, 2012 was driven by an increase of $66.3 million, or 15.1%, in commercial loans. The increase in commercial loans was comprised of $55.9 million in multi-family and commercial real estate loans, $6.0 million in commercial and industrial loans and $4.4 million in commercial construction loans, offset by a $39.8 million decrease in one-to four-family residential mortgage loans due to normal amortization exceeding new loans originated, and a $14.1 million decrease in consumer loans. The increase in total loans during the three months ended December 31, 2012 was driven by an increase in commercial loans of $23.9 million, representing an annualized increase of 19.9%. This commercial loan increase was comprised of $16.5 million in multi-family and commercial real estate loans, $3.1 million in commercial construction loans and $4.3 million in commercial and industrial loans.
  • Total stockholders' equity was $181.5 million at December 31, 2012, a decrease of $6.7 million, or 3.6%, from $188.2 million at December 31, 2011, primarily due to the repurchase of 724,700 shares of Company common stock at an aggregate cost of $9.9 million. The Company repurchased 91,800 shares of stock during the three months ended December 31, 2012.
  • Return on average assets was 0.50% for the year ended December 31, 2012 compared to 0.45% for the year ended December 31, 2011. Return on average assets improved to 0.73% for the three months ended December 31, 2012 compared to 0.56% for the three months ended September 30, 2012 and 0.41% for the three months ended December 31, 2011.
  • Net interest income increased $266,000, or 0.8%, to $31.7 million for the year ended December 31, 2012, compared to $31.5 million for the year ended December 31, 2011. The net interest margin was 3.21% for the year ended December 31, 2012, compared to 3.02% for the year ended December 31, 2011. The improved net interest margin is primarily due to the Company's balance sheet restructuring in the second quarter of 2012.
  • Net interest income decreased $400,000, or 4.9%, to $7.8 million for the three months ended December 31, 2012, compared to $8.2 million for the three months ended September 30, 2012. This decrease was primarily driven by a $16.6 million decrease in the average balance of loans, due to the timing of commercial loan payoffs and new commercial loans during the fourth quarter, and an 18 basis point decrease in net interest margin to 3.11% from 3.29%, due to interest-earning assets repricing at a faster pace than interest-bearing liabilities.
  • The efficiency ratio was 64.3% for the year ended December 31, 2012 compared to 63.1% for the year ended December 31, 2011.
  • Noninterest income increased $3.0 million to $6.3 million for the year ended December 31, 2012, compared to $3.3 million for the year ended December 31, 2011.  The increase is primarily due to net investment securities gains of $3.3 million for the year ended December 31, 2012, of which $952,000 was in the fourth quarter of 2012, compared to net investment securities gains of $730,000 for the year ended December 31, 2011. Additionally, equity in earnings of affiliate increased to $690,000 for the year ended December 31, 2012 from $245,000 for the year ended December 31, 2011 as a result of higher income and volumes from mortgage banking activities.
  • Excluding the loss on extinguishment of debt of $3.0 million in 2012, noninterest expense increased $2.1 million to $24.2 million for the year ended December 31, 2012, compared to $22.1 million for the year ended December 31, 2011. Assets acquired through foreclosure expense increased $1.4 million, of which $1.3 million related to an increase in valuation adjustments on assets acquired through foreclosure. Valuation adjustments on assets acquired through foreclosure were $1.9 million for the year ended December 31, 2012 compared to $657,000 for the year ended December 31, 2011. Salaries, benefits and other compensation increased $779,000, or 6.1%, for the year ended December 31, 2012 compared to the year ended December 31, 2011, primarily as a result of increased staffing and annual merit increases. 
  • Noninterest expense increased $836,000 to $6.4 million for the three months ended December 31, 2012, compared to $5.6 million for the three months ended December 31, 2011.  Assets acquired through foreclosure expense increased $725,000, of which $731,000 related to an increase in valuation adjustments on assets acquired through foreclosure. Valuation adjustments on assets acquired through foreclosure were $978,000 for the three months ended December 31, 2012 compared to $247,000 for the three months ended December 31, 2011. Salaries, benefits and other compensation increased $307,000, or 10.0%, for the three months ended December 31, 2012 compared to the three months ended December 31, 2011, primarily as a result of increased staffing and annual merit increases. 

Credit related items as of and for the quarter and year ended December 31, 2012 include:

  • The allowance for loan losses was $11.2 million, or 1.61% of total loans at December 31, 2012 compared to $11.2 million, or 1.64% of total loans at September 30, 2012 and $12.1 million, or 1.77% of total loans at December 31, 2011; 
  • Total credit related costs, which include (i) provision for loan losses, (ii) valuation adjustments on assets acquired through foreclosure, offset by (iii) net gain on sale of assets acquired through foreclosure, totaled $1.4 million for the three months ended December 31, 2012, compared to $1.3 million for the three months ended September 30, 2012 and $2.9 million for the three months ended December 31, 2011. Credit related costs totaled $5.3 million for the year ended December 31, 2012, compared to $6.1 million for the year ended December 31, 2011.
  • Net loan charge-offs totaled $492,000 and $4.4 million for the quarter and year ended December 31, 2012, respectively, compared to $3.3 million and $6.1 million for the quarter and year ended December 31, 2011, respectively.
  • Nonperforming assets totaled $25.6 million at December 31, 2012 compared to $25.2 million at September 30, 2012 and $23.4 million at December 31, 2011.

Fox Chase Bancorp, Inc. will host a conference call to discuss 2012 results on Wednesday, February 6, 2013 at 9:00 am EST. The general public can access the call by dialing (888) 317-6016. A replay of the conference call will be available through March 20, 2013 by dialing (877) 344-7529; use Conference ID: 10024277.

Fox Chase Bancorp, Inc. is a stock holding company of Fox Chase Bank. The Bank is a federally chartered savings bank originally established in 1867. The Bank offers traditional banking services and products from its main office in Hatboro, Pennsylvania and ten branch offices in Bucks, Montgomery, Chester, Delaware 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.

The Fox Chase Bancorp, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=4080

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
December 31,
Twelve Months Ended
December 31,
 2012201120122011
 (Unaudited)(Unaudited)(Audited)
INTEREST INCOME    
Interest and fees on loans $ 8,086 $ 8,849 $ 33,878 $ 35,428
Interest on mortgage related securities  1,784 2,124 7,606 9,775
Interest on investment securities available-for-sale    
Taxable 77 108 308 488
Nontaxable -- 19 34 184
Other interest income 3 2 8 71
Total Interest Income 9,950 11,102 41,834 45,946
INTEREST EXPENSE    
Deposits 1,361 1,903 6,347 8,672
Short-term borrowings 12 3 38 5
Federal Home Loan Bank advances 491 771 2,383 4,085
Other borrowed funds  253 437 1,349 1,733
Total Interest Expense 2,117 3,114 10,117 14,495
Net Interest Income 7,833 7,988 31,717 31,451
Provision for loan losses 442 2,825 3,478 5,734
Net Interest Income after Provision for Loan Losses 7,391 5,163 28,239 25,717
NONINTEREST INCOME    
Service charges and other fee income 459 423 1,597 1,630
Net gain on sale of assets acquired through foreclosure -- 173 135 250
Impairment loss on real estate held for investment -- -- -- (110)
Income on bank-owned life insurance 117 119 471 468
Equity in earnings of affiliate 245 125 690 245
Other 31 28 130 130
     
Total other-than-temporary impairment loss -- -- -- (407)
Less: Portion of loss recognized in other comprehensive income (before taxes) -- -- -- 46
Net other-than-temporary impairment loss -- -- -- (361)
Net gains on sale of investment securities 952 1,091 3,292 1,091
Net investment securities gains 952 1,091 3,292 730
     
Total Noninterest Income 1,804 1,959 6,315 3,343
NONINTEREST EXPENSE    
Salaries, benefits and other compensation 3,390 3,083 13,540 12,761
Occupancy expense 408 457 1,702 1,845
Furniture and equipment expense 128 128 537 442
Data processing costs 438 442 1,797 1,719
Professional fees 379 475 1,706 1,720
Marketing expense 53 116 270 356
FDIC premiums 192 188 773 870
Assets acquired through foreclosure expense 1,028 303 2,143 762
Loss on extinguishment of debt -- -- 3,018 --
Other 421 409 1,688 1,594
Total Noninterest Expense 6,437 5,601 27,174 22,069
Income Before Income Taxes 2,758 1,521 7,380 6,991
Income tax provision 858 477 2,318 2,212
Net Income  $ 1,900 $ 1,044 $ 5,062 $ 4,779
Earnings per share:    
Basic $ 0.17 $ 0.09 $ 0.44 $ 0.36
Diluted $ 0.16 $ 0.09 $ 0.43 $ 0.36
  
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION  
(Dollars in Thousands, Except Share Data)  
   
 December 31,
2012
December 31,
2011
 (Unaudited)(Audited)
ASSETS  
Cash and due from banks $ 162 $ 734
Interest-earning demand deposits in other banks 24,928 6,852
Total cash and cash equivalents 25,090 7,586
Investment securities available-for-sale 12,491 23,106
Mortgage related securities available-for-sale 283,616 225,664
Mortgage related securities held-to-maturity (fair value of $29,451 at December 31, 2012 and $41,758 at December 31, 2011) 28,369 41,074
Loans, net of allowance for loan losses of $11,170 at December 31, 2012 and $12,075 at December 31, 2011 683,865 670,572
Federal Home Loan Bank stock, at cost 8,097 8,074
Bank-owned life insurance 14,077 13,606
Premises and equipment, net 10,443 10,431
Assets acquired through foreclosure 8,524 2,423
Real estate held for investment 1,620 1,620
Accrued interest receivable 3,223 4,578
Mortgage servicing rights, net 170 316
Deferred tax asset, net 2,953 1,682
Other assets 5,803 5,131
Total Assets $ 1,088,341 $ 1,015,863
   
LIABILITIES AND STOCKHOLDERS' EQUITY  
LIABILITIES  
Deposits $ 687,409 $ 676,594
Short-term borrowings 70,500 8,500
Federal Home Loan Bank advances 110,000 88,278
Other borrowed funds 30,000 50,000
Advances from borrowers for taxes and insurance 1,699 1,736
Accrued interest payable 330 418
Accrued expenses and other liabilities 6,938 2,145
Total Liabilities 906,876 827,671
STOCKHOLDERS' EQUITY  
Preferred stock ($.01 par value; 1,000,000 shares authorized, none issued and outstanding at December 31, 2012 and December 31, 2011) -- --
Common stock ($.01 par value; 60,000,000 shares authorized, 12,356,564 shares issued and outstanding at December 31, 2012 and 13,037,310 shares issued and outstanding at December 31, 2011) 146 146
Additional paid-in capital 136,132 134,871
Treasury stock, at cost (2,249,600 shares at December 31, 2012 and 1,524,900 shares at December 31, 2011) (29,733) (19,822)
Common stock acquired by benefit plans (10,228) (11,541)
Retained earnings 80,608 77,971
Accumulated other comprehensive income, net 4,540 6,567
Total Stockholders' Equity 181,465 188,192
   
Total Liabilities and Stockholders' Equity $ 1,088,341 $ 1,015,863
    
SELECTED CONSOLIDATED FINANCIAL AND OTHER DATA OF THE COMPANY (UNAUDITED)   
(Dollars in Thousands, Except Per Share Data)   
    
 December 31,
2012
September 30,
2012
December 31,
2011
CAPITAL RATIOS:   
Stockholders' equity (to total assets) (1) 16.67 % 17.14 % 18.53 %
    
Tier 1 capital (to adjusted assets) (2) 12.90 14.01 15.30
Tier 1 risk –based capital (to risk-weighted assets) (2) 19.45 21.37 22.88
Total risk-based capital (to risk-weighted assets) (2) 20.48 22.39 23.90
    
ASSET QUALITY INDICATORS:   
Nonperforming Assets:   
Nonaccruing loans $ 17,124 $ 17,385 $ 17,078
Accruing loans past due 90 days or more --  165 3,875
Total nonperforming loans  $ 17,124 $ 17,550 $ 20,953
Assets acquired through foreclosure 8,524 7,646 2,423
Total nonperforming assets $ 25,648 $ 25,196 $ 23,376
    
Ratio of nonperforming loans to total loans 2.46 % 2.56 % 3.07 %
Ratio of nonperforming assets to total assets 2.36 2.35 2.30
Ratio of allowance for loan losses to total loans 1.61 1.64 1.77
Ratio of allowance for loan losses to nonperforming loans 65.2 63.9 57.6
    
Impaired Loans:   
Nonperforming loans  $ 17,124 $ 17,550 $ 20,953
Troubled debt restructurings 7,388 7,342 7,207
Other impaired loans --  --  2,354
Total impaired loans $ 24,512 $ 24,892 $ 30,514
    
Past Due Loans:   
30 - 59 days $ 41 $ 700 $ 1,467
60 - 89 days  2,026 523 421
Total $ 2,067 $ 1,223 $ 1,888
    
(1) Represents stockholders' equity ratio of Fox Chase Bancorp, Inc.   
(2) Represents regulatory capital ratios of Fox Chase Bank.   
  
 At or for the Three Months Ended
 December 31,
2012
September 30,
2012
December 31,
2011
PERFORMANCE RATIOS (3):   
Return on average assets  0.73 % 0.56 % 0.41 %
Return on average equity  4.15 3.13 2.17
Net interest margin  3.11 3.29 3.18
Efficiency ratio (4) 62.8 61.5 61.7
OTHER:   
Tangible book value per share $ 14.69 $ 14.75 $ 14.43
Employees (full-time equivalents) 141 144 136
    
 At or for the Twelve Months Ended 
 December 31,
2012
December 31,
2011
 
PERFORMANCE RATIOS (3):   
Return on average assets  0.50 % 0.45 % 
Return on average equity  2.74 2.36 
Net interest margin  3.21 3.02 
Efficiency ratio (4) 64.3 63.1 
    
(3) Annualized
(4) Represents noninterest expense, excluding valuation adjustments on assets acquired through foreclosure and loss on extinguishment of debt, 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.
       
AVERAGE BALANCE SHEET      
(Dollars in Thousands, Unaudited)      
       
 Twelve Months Ended December 31,
 20122011
 Average
Balance
Interest
and
Dividends
Yield/
Cost (2)
Average
Balance
Interest
and
Dividends
Yield/
Cost (2)
Assets:      
Interest-earning assets:      
Interest-earning demand deposits $ 7,569 $ 8 0.10% $ 31,894 $ 71 0.22%
Mortgage related securities 290,808 7,606 2.62% 316,780 9,775 3.09%
Taxable securities 21,220 308 1.45% 31,818 488 1.53%
Nontaxable securities 738 34 4.65% 4,043 184 4.55%
Loans (1) 667,763 33,878 5.07% 650,612 35,428 5.40%
Allowance for loan losses (11,781)   (12,895)  
Net loans 655,982 33,878  637,717 35,428 
Total interest-earning assets 976,317 41,834 4.23% 1,022,252 45,946 4.41%
Noninterest-earning assets 43,923   41,466  
Total assets $ 1,020,240   $ 1,063,718  
Liabilities and equity:      
Interest-bearing liabilities:      
Interest-bearing deposits $ 586,422 $ 6,347 1.08% $ 601,963 $ 8,672 1.44%
Borrowings 137,279 3,770 2.75% 162,419 5,823 3.54%
Total interest-bearing liabilities 723,701 10,117 1.40% 764,382 14,495 1.89%
Noninterest-bearing deposits 107,143   90,460  
Other noninterest-bearing liabilities 4,503   6,001  
Total liabilities 835,347   860,843  
Stockholders' equity 178,687   195,683  
Accumulated comprehensive income 6,206   7,192  
Total stockholder's equity 184,893   202,875  
Total liabilities and stockholders' equity $ 1,020,240   $ 1,063,718  
       
Net interest income  $ 31,717   $ 31,451 
Interest rate spread   2.83%   2.52%
Net interest margin   3.21%   3.02%
       
(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 December 31,
 20122011
 Average
Balance
Interest
and
Dividends
Yield/
Cost (2)
Average
Balance
Interest
and
Dividends
Yield/
Cost (2)
Assets:      
Interest-earning assets:      
Interest-earning demand deposits $ 8,637 $ 3 0.11% $ 7,153 $ 2 0.12%
Mortgage related securities 312,198 1,784 2.29% 290,958 2,124 2.92%
Taxable securities 19,677 77 1.57% 29,879 108 1.46%
Nontaxable securities -- -- 0.00% 1,872 19 4.00%
Loans (1) 664,939 8,086 4.84% 664,441 8,849 5.25%
Allowance for loan losses (11,614)   (13,030)  
Net loans 653,325 8,086  651,411 8,849 
Total interest-earning assets 993,837 9,950 3.99% 981,273 11,102 4.42%
Noninterest-earning assets 44,527   39,445  
Total assets $ 1,038,364   $ 1,020,718  
Liabilities and equity:      
Interest-bearing liabilities:      
Interest-bearing deposits $ 589,464 $ 1,361 0.92% $ 586,913 $ 1,903 1.29%
Borrowings 142,745 756 2.11% 145,827 1,211 3.25%
Total interest-bearing liabilities 732,209 2,117 1.15% 732,740 3,114 1.68%
Noninterest-bearing deposits 118,675   91,777  
Other noninterest-bearing liabilities 4,281   3,940  
Total liabilities 855,165   828,457  
Stockholders' equity 177,214   184,945  
Accumulated comprehensive income 5,985   7,316  
Total stockholder's equity 183,199   192,261  
Total liabilities and stockholders' equity $ 1,038,364   $ 1,020,718  
       
Net interest income  $ 7,833   $ 7,988 
Interest rate spread   2.84%   2.74%
Net interest margin   3.11%   3.18%
       
(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 EndedThree Months Ended
 December 31, 2012September 30, 2012
 Average
Balance
Interest
and
Dividends
Yield/
Cost (2)
Average
Balance
Interest
and
Dividends
Yield/
Cost (2)
Assets:      
Interest-earning assets:      
Interest-earning demand deposits $ 8,637 $ 3 0.11% $ 5,741 $ -- 0.05%
Mortgage related securities 312,198 1,784 2.29% 294,914 1,888 2.56%
Taxable securities 19,677 77 1.57% 17,207 60 1.38%
Nontaxable securities -- -- 0.00% 4 1 87.75%
Loans (1) 664,939 8,086 4.84% 681,575 8,582 5.02%
Allowance for loan losses (11,614)   (11,615)  
Net loans 653,325 8,086  669,960 8,582 
Total interest-earning assets 993,837 9,950 3.99% 987,826 10,531 4.25%
Noninterest-earning assets 44,527   44,930  
Total assets $ 1,038,364   $ 1,032,756  
Liabilities and equity:      
Interest-bearing liabilities:      
Interest-bearing deposits $ 589,464 $ 1,361 0.92% $ 609,202 $ 1,578 1.03%
Borrowings 142,745 756 2.11% 121,318 720 2.36%
Total interest-bearing liabilities 732,209 2,117 1.15% 730,520 2,298 1.25%
Noninterest-bearing deposits 118,675   114,983  
Other noninterest-bearing liabilities 4,281   3,529  
Total liabilities 855,165   849,032  
Stockholders' equity 177,214   178,169  
Accumulated comprehensive income 5,985   5,555  
Total stockholder's equity 183,199   183,724  
Total liabilities and stockholders' equity $ 1,038,364   $ 1,032,756  
       
Net interest income  $ 7,833   $ 8,233 
Interest rate spread   2.84%   3.00%
Net interest margin   3.11%   3.29%
       
(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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