First Connecticut Bancorp, Inc. Reports Second Quarter 2015 Earnings of $0.23 Earnings Per Share

FARMINGTON, Conn., July 22, 2015 (GLOBE NEWSWIRE) -- First Connecticut Bancorp, Inc. (the “Company”) (NASDAQ: FBNK), the holding company for Farmington Bank (the “Bank”), reported net income of $3.5 million, or $0.23 diluted earnings per share for the quarter ended June 30, 2015 compared to net income of $2.2 million, or $0.14 diluted earnings per share for the quarter ended June 30, 2014.

Net income on a core earnings basis was $2.8 million, or $0.19 diluted core earnings per share for the quarter ended June 30, 2015.  Core earnings exclude non-recurring items.  The significant non-recurring items during the quarter ended June 30, 2015 were a $1.3 million gain on sale of investments related to the sale of a trust preferred security and $258,000 in stock compensation costs related to two directors retiring during the quarter.

“Our positive results reflect the impact of our significant organic growth strategy and ongoing focus on enhancing tangible book value and earnings per share. Over the past several quarters our double digit loan growth has produced a diversified portfolio with flexibility to make future structural changes and one that remains asset sensitive in a changing interest rate environment” stated John J. Patrick Jr., First Connecticut Bancorp’s Chairman, President and CEO.

Financial Highlights

• Net interest income increased $724,000 to $17.1 million in the second quarter of 2015 compared to the linked quarter and increased $1.5 million or 10% compared to the second quarter of 2014.

• Strong organic loan growth continued during the quarter as total loans increased $81.6 million to $2.3 billion at June 30, 2015 and increased $338.8 million or 17% from a year ago. 

• Overall deposits remained flat at $1.9 billion in the second quarter of 2015 compared to the linked quarter and increased $247.3 million or 15% from a year ago. 

• Checking accounts grew by 3.3% or 1,517 net new accounts in the second quarter of 2015 and by 12.1% or 5,169 net new accounts from a year ago.

• Noninterest expense to average assets was 2.43% in the second quarter of 2015 compared to 2.38% in the linked quarter and 2.60% in the second quarter of 2014.

• Tangible book value per share is $15.01 compared to $14.82 on a linked quarter basis and $14.39 at June 30, 2014.

• Asset quality improved as loan delinquencies 30 days and greater decreased to 0.58% of total loans at June 30, 2015 compared to 0.64% at March 31, 2015 and 0.78% at June 30, 2014.  Non-accrual loans represented 0.57% of total loans compared to 0.64% of total loans on a linked quarter basis and 0.75% of total loans at June 30, 2014. 

• The allowance for loan losses represented 0.86% of total loans at June 30, 2015 compared to 0.87% at March 31, 2015 and 0.92% at June 30, 2014. 

• The Company paid a cash dividend of $0.05 per share on June 11, 2015. This marks the fifteenth consecutive quarter the Company has paid a dividend since it became a public company on June 29, 2011.

Second quarter 2015 compared with first quarter 2015

Net interest income

• Net interest income increased $724,000 to $17.1 million in the second quarter of 2015 compared to the linked quarter due primarily to a $73.6 million increase in the average net loan balance and a $92,000 decrease in interest expense.

• Net interest margin increased 3 basis points to 2.86% in the second quarter of 2015 compared to 2.83% in the linked quarter due to a decrease in the cost of interest-bearing liabilities. 

• The cost of interest-bearing liabilities decreased 4 basis points to 64 basis points in the second quarter of 2015 compared to 68 basis points in the linked quarter primarily due to expiring money market promotions.

Provision for loan losses

• Provision for loan losses was $663,000 for the second quarter of 2015 compared to $615,000 for the linked quarter.  

• Net charge-offs in the quarter were $314,000 or 0.06% to average loans (annualized) compared to $343,000 or 0.06% to average loans (annualized) in the linked quarter.

• The allowance for loan losses represented 0.86% of total loans at June 30, 2015 compared to 0.87% at March 31, 2015. 

Noninterest income

• Total noninterest income increased $1.4 million to $4.1 million in the second quarter of 2015 compared to the linked quarter primarily due to a $977,000 increase in gain on sale of investments and a $352,000 increase in other noninterest income. 

• Gain on sale of investments was $1.3 million in the second quarter of 2015 due to the sale of a trust preferred security.

• Other income increased $352,000 to $528,000 in the second quarter of 2015 compared to the linked quarter primarily due to a $485,000 increase in swap fees offset by a decrease in mortgage banking derivatives income.

Noninterest expense

• Noninterest expense increased $660,000 in the second quarter of 2015 to $15.6 million compared to the linked quarter primarily due to a $245,000 increase in salaries and employee benefits and other operating expenses.  

• Other operating expenses increased $354,000 primarily due to $258,000 in non-recurring stock compensation costs related to two directors retiring during the quarter and a $149,000 loss on a credit sharing arrangement on a sold loan.

Income tax expense

• Income tax expense was $1.4 million in the second quarter of 2015 compared to $976,000 in the linked quarter.  The increase in income tax expense in the second quarter was primarily due to a $1.4 million increase in income before taxes.

Second quarter 2015 compared with second quarter 2014

Net interest income

• Net interest income increased $1.5 million to $17.1 million in the second quarter of 2015 compared to the prior year quarter primarily due to a $333.5 million increase in the average net loan balance offset by a $775,000 increase in interest expense.

• Net interest margin decreased to 2.86% in the second quarter of 2015 compared to 3.02% in the second quarter of 2014 primarily due to a 14 basis point decrease in the yield on loans and a 7 basis point increase in the cost of interest-bearing liabilities.

• The cost of interest-bearing liabilities increased to 64 basis points in the second quarter of 2015 compared to 57 basis points in the prior year quarter primarily due to certificate of deposit promotions and entering the brokered deposit market.

Provision for loan losses

• Provision for loan losses was $663,000 for the second quarter of 2015 compared to $410,000 for the prior year quarter. 

• Net charge-offs in the quarter were $314,000 or 0.06% to average loans (annualized) compared to $129,000 or 0.03% to average loans (annualized) in the prior year quarter.

• The allowance for loan losses represented 0.86% of total loans at June 30, 2015 compared to 0.92% at June 30, 2014. 

Noninterest income

• Total noninterest income increased $2.0 million to $4.1 million in the second quarter of 2015 compared to the prior year quarter due to an $183,000 increase in fees for customer services, a $1.3 million gain on sale of investments and a $485,000 increase in swap fees.

Noninterest expense

• Noninterest expense increased $1.3 million in the second quarter of 2015 to $15.6 million compared to the prior year quarter primarily due to an increase in salaries and employee benefits and other operating expenses.

• Salaries and employee benefits increased $397,000 primarily due to costs associated with our expansion into western Massachusetts and growth driven staff increases in our compliance areas.

• Other operating expenses increased $806,000 primarily due to $258,000 in non-recurring stock compensation costs related to two directors retiring during the quarter, $149,000 loss on a credit sharing arrangement on a sold loan and a general increase in other costs to support the Bank’s operations.

Income tax expense

• Income tax expense was $1.4 million in the second quarter of 2015 compared to $776,000 in the prior year quarter.  The increase in income tax expense in the second quarter was primarily due to a $1.9 million increase in income before taxes.

June 30, 2015 compared to June 30, 2014

Financial Condition

• Total assets increased $358.5 million or 16% at June 30, 2015 to $2.6 billion compared to $2.3 billion at June 30, 2014, largely reflecting an increase in loans.

• Our investment portfolio totaled $178.2 million at June 30, 2015 compared to $173.5 million at June 30, 2014, an increase of $4.7 million.

• Net loans increased $337.9 million at June 30, 2015 to $2.3 billion compared to $1.9 billion at June 30, 2014 due to our continued focus on commercial and residential lending.

• Deposits increased $247.3 million at June 30, 2015 to $1.9 billion compared to $1.6 billion at June 30, 2014 primarily due to increases in municipal deposits, demand deposits and time deposits accounts as we continue to develop and grow relationships in the geographical areas we serve.  We entered the brokered deposit market during the quarter with balances totaling $52.2 million at June 30, 2015.

• Federal Home Loan Bank of Boston advances increased $109.7 million to $400.7 million at June 30, 2015 compared to $291.0 million at June 30, 2014.  Advances were used to support loan and securities growth.

Asset Quality

• At June 30, 2015, the allowance for loan losses represented 0.86% of total loans and 150.94% of non-accrual loans, compared to 0.92% of total loans and 122.25% of non-accrual loans at June 30, 2014.

• Loan delinquencies 30 days and greater decreased to 0.58% of total loans at June 30, 2015 compared to 0.78% of total loans at June 30, 2014.

• Non-accrual loans represented 0.57% of total loans at June 30, 2015 compared to 0.75% of total loans at June 30, 2014.

• Net charge-offs in the quarter were $314,000 or 0.06% to average loans (annualized) compared to $129,000 or 0.03% 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 13.11% at June 30, 2015. 

• Tangible book value per share was $15.01 compared to $14.82 on a linked quarter basis and $14.39 at June 30, 2014.

• During the second quarter of 2015, the Company repurchased 115,117 shares of common stock at an average price per share of $14.81 at a total cost of $1.7 million.  Repurchased shares are held as treasury stock and will be available for general corporate purposes.  The Company has 780,334 shares remaining to repurchase at June 30, 2015 from prior regulatory approval.

• At June 30, 2015, 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.

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 22 branch locations throughout central Connecticut, offering commercial and residential lending as well as wealth management services in Connecticut and western Massachusetts. 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, July 23, 2015 at 11:00am Eastern Time to discuss second 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 tabular form 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)		2015				2015				2014				2014				2014
Selected Financial Condition Data:
Total assets	$	2,626,217			$	2,549,074			$	2,485,360			$	2,395,674			$	2,267,709
Cash and cash equivalents		42,992				44,847				42,863				43,914				50,778
Securities held-to-maturity, at amortized cost		34,366				21,006				16,224				12,439				12,715
Securities available-for-sale, at fair value		143,799				173,829				188,041				194,706				160,784
Federal Home Loan Bank of Boston stock, at cost		21,496				19,785				19,785				17,724				17,724
Loans, net		2,268,385				2,186,937				2,119,917				2,031,780				1,930,502
Deposits		1,878,040				1,887,954				1,733,041				1,727,994				1,630,779
Federal Home Loan Bank of Boston advances		400,700				308,700				401,700				304,700				291,000
Total stockholders' equity		239,082				237,709				234,563				233,646				231,269
Allowance for loan losses		19,581				19,232				18,960				18,556				17,912
Non-accrual loans		12,973				14,086				15,468				15,475				14,652
Impaired loans		39,975				42,130				43,452				39,579				41,892
Loan delinquencies 30 days and greater		13,244				14,193				16,079				15,922				15,257
Selected Operating Data:
Interest income	$	20,164			$	19,532			$	19,412			$	18,528			$	17,854
Interest expense		3,065				3,157				3,017				2,543				2,290
Net interest income		17,099				16,375				16,395				15,985				15,564
Provision for loan losses		663				615				632				1,041				410
Net interest income after provision for loan losses		16,436				15,760				15,763				14,944				15,154
Noninterest income		4,074				2,664				2,498				2,778				2,066
Noninterest expense		15,597				14,937				14,615				14,219				14,254
Income before income taxes		4,913				3,487				3,646				3,503				2,966
Income tax expense		1,441				976				499				997				776
Net income	$	3,472			$	2,511				3,147			$	2,506			$	2,190
Performance Ratios (annualized):
Return on average assets		0.54	%			0.40	%			0.52	%			0.43	%			0.40	%
Return on average equity		5.77	%			4.24	%			5.31	%			4.27	%			3.77	%
Interest rate spread (1)		2.72	%			2.68	%			2.68	%			2.78	%			2.89	%
Net interest rate margin (2)		2.86	%			2.83	%			2.83	%			2.91	%			3.02	%
Non-interest expense to average assets		2.43	%			2.38	%			2.39	%			2.46	%			2.60	%
Efficiency ratio (3)		77.13	%			78.35	%			77.70	%			75.78	%			80.85	%
Average interest-earning assets to average
interest-bearing liabilities		126.98	%			125.86	%			127.89	%			128.17	%			129.13	%
Loans to deposits		121.83	%			116.86	%			123.42	%			118.65	%			119.48	%
Asset Quality Ratios:
Allowance for loan losses as a percent of total loans		0.86	%			0.87	%			0.89	%			0.91	%			0.92	%
Allowance for loan losses as a percent of
non-accrual loans		150.94	%			136.53	%			122.58	%			119.91	%			122.25	%
Net charge-offs to average loans (annualized)		0.06	%			0.06	%			0.04	%			0.08	%			0.03	%
Non-accrual loans as a percent of total loans		0.57	%			0.64	%			0.72	%			0.76	%			0.75	%
Non-accrual loans as a percent of total assets		0.49	%			0.55	%			0.62	%			0.65	%			0.65	%
Loan delinquencies 30 days and greater as a
percent of total loans		0.58	%			0.64	%			0.75	%			0.78	%			0.78	%
Per Share Related Data:
Basic earnings per share	$	0.23			$	0.17			$	0.21			$	0.17			$	0.15
Diluted earnings per share	$	0.23			$	0.17			$	0.21			$	0.17			$	0.14
Dividends declared per share	$	0.05			$	0.05			$	0.05			$	0.05			$	0.04
Tangible book value (4)	$	15.01			$	14.82			$	14.64			$	14.56			$	14.39
Common stock shares outstanding		15,922,888				16,035,005				16,026,319				16,043,031				16,072,637
Weighted-average basic shares outstanding		14,694,472				14,722,112				14,695,490				14,613,115				14,601,416
Weighted-average diluted shares outstanding		14,839,454				14,850,597				14,836,032				14,710,880				14,707,472
(1) Represents the difference between the weighted-average yield on average interest-earning assets and the weighted-average cost of interest-bearing liabilities.
(2) Represents tax-equivalent net interest income as a percent of average interest-earning assets.
(3) Represents core noninterest expense divided by the sum of core net interest income and core noninterest income.
See "Reconciliation of Non-GAAP Financial Measures" table.
(4) Represents ending stockholders’ equity less goodwill and intangible assets (excluding mortgage servicing rights) divided by ending common shares outstanding.
The Company does not have goodwill and intangible assets for any of the periods presented.  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)		2015				2015				2014				2014				2014
Capital Ratios:
Equity to total assets at end of period		9.10	%			9.33	%			9.44	%			9.75	%			10.20	%
Average equity to average assets		9.36	%			9.45	%			9.71	%			10.13	%			10.59	%
Total Capital (to Risk Weighted Assets)		13.11	%	*		13.44	%			13.73	%			14.12	%			14.56	%
Tier I Capital (to Risk Weighted Assets)		12.12	%	*		12.44	%			12.70	%			13.07	%			13.51	%
Common Equity Tier I Capital		12.12	%	*		12.44	%		n/a				n/a				n/a
Tier I Leverage Capital (to Average Assets)		9.57	%	*		9.72	%			9.86	%			10.25	%			10.70	%
Total equity to total average assets		9.29	%			9.48	%			9.61	%			10.09	%			10.54	%
* Estimated
Loans and Allowance for Loan Losses:
Real estate
Residential	$	888,376			$	850,819			$	827,005			$	789,166			$	749,124
Commercial		817,955				769,712				765,066				717,399				686,299
Construction		42,858				53,913				57,371				80,242				69,047
Installment		3,103				3,114				3,356				3,524				3,850
Commercial		359,537				352,085				309,708				289,708				277,483
Collateral		1,551				1,676				1,733				1,826				1,480
Home equity line of credit		169,507				169,969				169,768				163,608				156,625
Revolving credit		77				80				99				97				75
Resort		837				880				929				1,019				1,068
Total loans		2,283,801				2,202,248				2,135,035				2,046,589				1,945,051
Less:
Allowance for loan losses		(19,581	)			(19,232	)			(18,960	)			(18,556	)			(17,912	)
Net deferred loan costs		4,165				3,921				3,842				3,747				3,363
Loans, net	$	2,268,385			$	2,186,937			$	2,119,917			$	2,031,780			$	1,930,502
Deposits:
Noninterest-bearing demand deposits	$	377,092			$	337,211			$	330,524			$	323,499			$	315,916
Interest-bearing
NOW accounts		425,789				499,130				355,412				454,650				377,570
Money market		430,558				462,532				470,991				417,498				401,694
Savings accounts		220,154				214,083				210,892				200,501				202,970
Time deposits		424,447				374,998				365,222				331,846				332,629
Total interest-bearing deposits		1,500,948				1,550,743				1,402,517				1,404,495				1,314,863
Total deposits	$	1,878,040			$	1,887,954			$	1,733,041			$	1,727,994			$	1,630,779

First Connecticut Bancorp, Inc. Consolidated Statements of Condition (Unaudited)
							June 30,				March 31,				June 30,
								2015				2015				2014
(Dollars in thousands)
Assets
Cash and due from banks							$	35,595			$	33,175			$	46,303
Interest bearing deposits with other institutions								7,397				11,672				4,475
		Total cash and cash equivalents						42,992				44,847				50,778
Securities held-to-maturity, at amortized cost								34,366				21,006				12,715
Securities available-for-sale, at fair value								143,799				173,829				160,784
Loans held for sale								7,550				2,187				4,576
Loans (1)								2,287,966				2,206,169				1,948,414
	Allowance for loan losses							(19,581	)			(19,232	)			(17,912	)
		Loans, net						2,268,385				2,186,937				1,930,502
Premises and equipment, net								17,964				18,289				20,072
Federal Home Loan Bank of Boston stock, at cost								21,496				19,785				17,724
Accrued income receivable								6,425				6,047				5,133
Bank-owned life insurance								50,283				39,960				39,120
Deferred income taxes								16,450				16,759				14,756
Prepaid expenses and other assets								16,507				19,428				11,549
					Total assets		$	2,626,217			$	2,549,074			$	2,267,709
Liabilities and Stockholders' Equity
Deposits
	Interest-bearing						$	1,500,948			$	1,550,743			$	1,314,863
	Noninterest-bearing							377,092				337,211				315,916
								1,878,040				1,887,954				1,630,779
Federal Home Loan Bank of Boston advances								400,700				308,700				291,000
Repurchase agreement borrowings								10,500				10,500				21,000
Repurchase liabilities								56,041				59,198				55,326
Accrued expenses and other liabilities								41,854				45,013				38,335
					Total liabilities			2,387,135				2,311,365				2,036,440
Stockholders' Equity
	Common stock							181				181				181
	Additional paid-in-capital							180,764				179,683				177,431
	Unallocated common stock held by ESOP							(12,160	)			(12,422	)			(13,218	)
	Treasury stock, at cost							(30,389	)			(28,725	)			(28,577	)
	Retained earnings							108,014				105,339				99,386
	Accumulated other comprehensive loss							(7,328	)			(6,347	)			(3,934	)
					Total stockholders' equity			239,082				237,709				231,269
					Total liabilities and stockholders' equity		$	2,626,217			$	2,549,074			$	2,267,709
(1) Loans include net deferred fees and unamortized premiums of $4.2 million, $3.9 million and $3.4 million at June 30, 2015, March 31, 2015 and June 30, 2014, 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)								2015				2015				2014				2015				2014
Interest income
Interest and fees on loans
	Mortgage						$	15,331			$	15,058			$	13,875			$	30,389			$	27,303
	Other							4,264				3,995				3,573				8,259				6,781
Interest and dividends on investments
	United States Government and agency obligations							385				323				218				708				407
	Other bonds							35				18				81				53				139
	Corporate stocks							145				131				105				276				198
Other interest income								4				7				2				11				6
					Total interest income			20,164				19,532				17,854				39,696				34,834
Interest expense
Deposits								2,140				2,209				1,711				4,349				3,405
Interest on borrowed funds								804				751				368				1,555				687
Interest on repo borrowings								92				163				179				255				356
Interest on repurchase liabilities								29				34				32				63				72
					Total interest expense			3,065				3,157				2,290				6,222				4,520
					Net interest income			17,099				16,375				15,564				33,474				30,314
Provision for loan losses								663				615				410				1,278				915
					Net interest income
						after provision for loan losses		16,436				15,760				15,154				32,196				29,399
Noninterest income
Fees for customer services								1,500				1,373				1,317				2,873				2,508
Gain on sale of investments								1,250				273				-				1,523				-
Net gain on loans sold								412				520				317				932				439
Brokerage and insurance fee income								60				49				49				109				93
Bank owned life insurance income								324				273				281				597				563
Other								528				176				102				704				225
					Total noninterest income			4,074				2,664				2,066				6,738				3,828
Noninterest expense
Salaries and employee benefits								9,035				8,790				8,638				17,825				16,926
Occupancy expense								1,272				1,367				1,209				2,639				2,558
Furniture and equipment expense								1,077				1,036				1,106				2,113				2,124
FDIC assessment								402				412				321				814				649
Marketing								534				409				509				943				887
Other operating expenses								3,277				2,923				2,471				6,200				5,070
					Total noninterest expense			15,597				14,937				14,254				30,534				28,214
					Income before income taxes			4,913				3,487				2,966				8,400				5,013
Income tax expense								1,441				976				776				2,417				1,331
					Net income		$	3,472			$	2,511			$	2,190			$	5,983			$	3,682
Earnings per share:
	Basic						$	0.23			$	0.17			$	0.15			$	0.40			$	0.24
	Diluted							0.23				0.17				0.14				0.40				0.24
Weighted average shares outstanding:
	Basic							14,694,472				14,722,112				14,601,416				14,708,215				14,710,453
	Diluted							14,839,454				14,850,597				14,707,472				14,844,994				14,813,566

First Connecticut Bancorp, Inc. Consolidated Average Balances, Yields and Rates (Unaudited)
	For The Three Months Ended
	June 30, 2015										March 31, 2015										June 30, 2014
	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	$	2,241,447		$	19,949			3.57	%		$	2,167,879		$	19,391			3.63	%		$	1,907,900		$	17,633			3.71	%
Securities		178,780			478			1.07	%			196,087			394			0.81	%			167,199			355			0.85	%
Federal Home Loan Bank of Boston stock		20,310			86			1.70	%			19,785			79			1.62	%			14,744			49			1.33	%
Federal funds and other earning assets		10,032			5			0.20	%			12,394			6			0.20	%			3,567			2			0.22	%
Total interest-earning assets		2,450,569			20,518			3.36	%			2,396,145			19,870			3.36	%			2,093,410			18,039			3.46	%
Noninterest-earning assets		121,820										112,534										100,339
Total assets	$	2,572,389									$	2,508,679									$	2,193,749
Interest-bearing liabilities:
NOW accounts	$	454,532		$	310			0.27	%		$	449,897		$	321			0.29	%		$	332,597		$	185			0.22	%
Money market		435,749			798			0.73	%			480,687			970			0.82	%			414,774			754			0.73	%
Savings accounts		217,651			57			0.11	%			208,626			57			0.11	%			204,218			42			0.08	%
Certificates of deposit		392,941			975			1.00	%			367,501			861			0.95	%			335,391			730			0.87	%
Total interest-bearing deposits		1,500,873			2,140			0.57	%			1,506,711			2,209			0.59	%			1,286,980			1,711			0.53	%
Federal Home Loan Bank of Boston Advances		366,460			804			0.88	%			304,411			751			1.00	%			259,980			368			0.57	%
Repurchase agreement borrowings		10,500			92			3.51	%			19,133			163			3.46	%			21,000			179			3.42	%
Repurchase liabilities		52,043			29			0.22	%			58,507			34			0.24	%			53,159			32			0.24	%
Total interest-bearing liabilities		1,929,876			3,065			0.64	%			1,888,762			3,157			0.68	%			1,621,119			2,290			0.57	%
Noninterest-bearing deposits		348,857										330,865										303,473
Other noninterest-bearing liabilities		52,831										52,092										36,890
Total liabilities		2,331,564										2,271,719										1,961,482
Stockholders' equity		240,825										236,960										232,267
Total liabilities and stockholders' equity	$	2,572,389									$	2,508,679									$	2,193,749
Tax-equivalent net interest income				$	17,453									$	16,713									$	15,749
Less: tax-equivalent adjustment					(354	)									(338	)									(185	)
Net interest income				$	17,099									$	16,375									$	15,564
Net interest rate spread (2)								2.72	%									2.68	%									2.89	%
Net interest-earning assets (3)	$	520,693									$	507,383									$	472,291
Net interest margin (4)								2.86	%									2.83	%									3.02	%
Average interest-earning assets to average interest-bearing liabilities
					126.98	%									126.86	%									129.13	%
(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.
(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,
		2015										2014
	Average Balance			Interest and Dividends (1)			Yield/Cost				Average Balance			Interest and Dividends (1)			Yield/Cost
(Dollars in thousands)
Interest-earning assets:
Loans	$	2,204,867		$	39,322			3.60	%		$	1,873,082		$	34,439			3.71	%
Securities		187,385			872			0.94	%			163,980			657			0.81	%
Federal Home Loan Bank of Boston stock		20,049			165			1.66	%			13,944			87			1.26	%
Federal funds and other earning assets		11,206			11			0.20	%			3,580			6			0.34	%
Total interest-earning assets		2,423,507			40,370			3.36	%			2,054,586			35,189			3.45	%
Noninterest-earning assets		117,203										104,727
Total assets	$	2,540,710									$	2,159,313
Interest-bearing liabilities:
NOW accounts	$	452,227		$	631			0.28	%		$	342,458		$	382			0.22	%
Money market		458,094			1,768			0.78	%			411,983			1,438			0.70	%
Savings accounts		213,163			114			0.11	%			198,710			97			0.10	%
Certificates of deposit		380,291			1,836			0.97	%			335,836			1,488			0.89	%
Total interest-bearing deposits		1,503,775			4,349			0.58	%			1,288,987			3,405			0.53	%
Federal Home Loan Bank of Boston Advances		335,607			1,555			0.93	%			220,968			687			0.63	%
Repurchase agreement borrowings		14,793			255			3.48	%			21,000			356			3.42	%
Repurchase liabilities		55,257			63			0.23	%			57,151			72			0.25	%
Total interest-bearing liabilities		1,909,432			6,222			0.66	%			1,588,106			4,520			0.57	%
Noninterest-bearing deposits		339,911										301,557
Other noninterest-bearing liabilities		52,464										36,758
Total liabilities		2,301,807										1,926,421
Stockholders' equity		238,903										232,892
Total liabilities and stockholders' equity	$	2,540,710									$	2,159,313
Tax-equivalent net interest income				$	34,148									$	30,669
Less: tax-equivalent adjustment					(674	)									(355	)
Net interest income				$	33,474									$	30,314
Net interest rate spread (2)								2.70	%									2.88	%
Net interest-earning assets (3)	$	514,075									$	466,480
Net interest margin (4)								2.84	%									3.01	%
Average interest-earning assets to average interest-bearing liabilities
					126.92	%									129.37	%
(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.
(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, 2015, March 31, 2015, December 31, 2014,
September 30, 2014 and June 30, 2014.  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)			2015				2015				2014				2014				2014
Net Income		$	3,472			$	2,511			$	3,147			$	2,506			$	2,190
	Adjustments:
	Plus: Accelerated vesting of stock compensation		258				140				-				-				-
	Plus: Employee severance		-				93				-				-				-
	Less: Prepayment penalty fees		(35	)			-				-				-				(185	)
	Less: Non-recurring payment related to a loan participation		-				-				(250	)			-				-
	Less: Net gain on sales of investments		(1,250	)			(273	)			-				-				-
Total core adjustments before taxes			(1,027	)			(40	)			(250	)			-				(185	)
	Tax benefit on core adjustments		359				14				88				-				63
	Tax rate adjustment (1)		-				-				(441	)			-				-
Total core adjustments after taxes			(668	)			(26	)			(603	)			-				(122	)
Total core net income		$	2,804			$	2,485			$	2,544			$	2,506			$	2,068
Total net interest income		$	17,099			$	16,375			$	16,395			$	15,985			$	15,564
	Less: Prepayment penalty fees		(35	)			-				-				-				(185	)
	Less: Non-recurring payment related to a loan participation		-				-				(250	)			-				-
Total core net interest income		$	17,064			$	16,375			$	16,145			$	15,985			$	15,379
Total noninterest income		$	4,074			$	2,664			$	2,498			$	2,778			$	2,066
	Less: Net gain on sales of investments		(1,250	)			(273	)			-				-				-
Total core noninterest income		$	2,824			$	2,391			$	2,498			$	2,778			$	2,066
Total noninterest expense		$	15,597			$	14,937			$	14,615			$	14,219			$	14,254
	Less: Accelerated vesting of stock compensation		(258	)			(140	)			-				-				-
	Less: Employee severances		-				(93	)			-				-				-
Total core noninterest expense		$	15,339			$	14,704			$	14,615			$	14,219			$	14,254
Core earnings per common share, diluted		$	0.19			$	0.16			$	0.17			$	0.17			$	0.14
Core return on average assets (annualized)			0.44	%			0.40	%			0.42	%			0.43	%			0.38	%
Core return on average equity (annualized)			4.66	%			4.19	%			4.29	%			4.27	%			3.56	%
Efficiency ratio (2)			77.13	%			78.35	%			77.70	%			75.78	%			80.85	%
Tangible book value (3)		$	15.01			$	14.82			$	14.64			$	14.56			$	14.39
(1) Represents the tax benefit derived from adjusting the tax rate on the Company's deferred tax assets from 34% to 35%.  The Company's taxable income placed it in the 35% corporate tax bracket.
(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.

Jennifer H. Daukas
Investor Relations Officer
One Farm Glen Boulevard, Farmington, CT 06032
P 860-284-6359
F 860-409-3316
[email protected]

Source: First Connecticut Bancorp, Inc.

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