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Fox Chase Bancorp Announces Earnings for 2008 Second Quarter HATBORO, Pa., July 31, 2008 (PRIME NEWSWIRE) -- Fox Chase
Bancorp, Inc. (the ``Company'') (NasdaqGM:FXCB - News), the holding
company for Fox Chase Bank (the ``Bank''), today announced
net income of $304,000 and $649,000 for the three and six
months ended June 30, 2008, respectively, compared to net
income of $852,000 and $1.1 million for the three and six
months ended June 30, 2007, respectively. Net income for the three and six months ended June 30, 2008 included a one-time expense of $244,000 and $297,000, respectively (after tax $161,000 and $196,000) associated with final distributions from the Company's terminated pension plan. Net income for the three and six months ended June 30, 2007 included a gain of $874,000 (after tax $577,000) related to the sale of the Bank's former operations center. Highlights for the three and six month periods included: * Loans totaled $525.1 million at June 30, 2008, representing a $118.3 million, or 29.1%, increase from June 30, 2007 and a $78.1 million, or 17.5%, increase from December 31, 2007. * Net interest income increased $628,000, or 13.9%, to $5.1 million for the three months ended June 30, 2008, compared to $4.5 million for the three months ended June 30, 2007 and increased $1.2 million, or 13.7%, to $10.1 million for the six months ended June 30, 2008 from $8.9 million for the same period in 2007; and * Continued emphasis on expense reduction strategies resulting in nominal increases in noninterest expenses. Thomas M. Petro, President and CEO stated, ``Strong second quarter performance, evidenced by solid loan growth, good asset quality, tight expense controls and an improving net interest margin demonstrates that our business strategy is working. While maintaining our disciplined approach to loan underwriting and structuring, we were able to generate significant loan growth during the quarter. We were able to leverage our investments in the commercial lending business by growing the loan portfolio without significant additional expenditures. Like other banks, we continue to operate in a very challenging economic and competitive environment. We are working diligently to address these challenges with particular focus on asset quality and expense management.'' Total assets increased $37.7 million, or 4.6%, to $850.6 million at June 30, 2008, compared to $812.9 million at December 31, 2007. Loans increased $78.1 million from December 31, 2007 to June 30, 2008. Approximately $57.9 million of this increase was in commercial, commercial real estate and construction loans as we continue our strategic initiative to increase our commercial loan portfolio. The growth in loans was primarily funded through the liquidation of $60.0 million in short-term auction rate bonds, which accounted for the majority of the $66.8 million decrease in investment securities available-for-sale, and the liquidation of $20.0 million of money market funds. Federal Home Loan Bank advances increased approximately $39.9 million, which funded a majority of the $46.2 million increase in mortgage related securities due to a leverage strategy implemented during the first quarter of 2008. Deposits decreased $2.4 million, or 0.4%, from $585.6 million at December 31, 2007 to $583.2 million at June 30, 2008. Net interest income increased $628,000, or 13.9%, and $1.2 million, or 13.7%, during the three and six months ended June 30, 2008, respectively, compared to the same periods in 2007. The increases in net interest income were primarily due to the increase in loans. The Company's net interest margin was 2.48% for the three months ended June 30, 2008, compared to 2.50% for the comparable period in 2007 and 2.39% for the three months ended March 31, 2008. The increase from the March 31, 2008 quarter was primarily the result of a change in composition of interest-earning assets to higher-yielding loans from lower-yielding investment securities as well as deposits repricing to lower rates in the second quarter of 2008. The Company recorded provisions for loan losses of $225,000 and $400,000 for the three and six months ended June 30, 2008, respectively and $75,000 for both the three and six months ended June 30, 2007. The increase in the provision reflected loan growth, primarily in the commercial categories discussed previously and an increase in nonperforming and classified assets. Nonperforming assets totaled $1.5 million, or 0.17% of total assets, at June 30, 2008 compared to $819,000, or 0.10% of total assets, at December 31, 2007 and $241,000, or 0.03% of total assets, at June 30, 2007. The allowance for loan losses at June 30, 2008 was 0.71% of total loans compared to 0.75% of total loans at December 31, 2007. The allowance for loan losses as a percentage of nonperforming loans was 258% at June 30, 2008 as compared to 412% at December 31, 2007. Noninterest expense increased by $409,000, or 9.0% and $674,000, or 7.5%, between the three and six months ended June 30, 2008 and 2007, respectively. The increase for the three and six month periods was primarily a result of increased salaries and benefits costs due to the previously discussed expense associated with final distributions from the Company's terminated pension plan, expense associated with the awards granted under the Company's 2007 Equity Incentive Plan, costs associated with the opening of the Bank's West Chester, Pennsylvania branch in October 2007 as well as annual merit increases. These increases were offset by a decrease in professional fees due to litigation related matters in 2007 and lower levels of Sarbanes-Oxley compliance costs. During the three and six months ended June 30, 2008, the Company repurchased 97,700 and 128,900 shares of common stock, respectively, in conjunction with its stock repurchase program announced in February 2008 (the ``February 2008 program''). There are 198,100 shares remaining to be repurchased under the February 2008 program. Additionally, the Company announced that its Board of Directors approved the repurchase of up to an additional 5% of its common shares outstanding (excluding shares held by Fox Chase MHC), or an additional 327,000 shares (the ``July 2008 program''). The July 2008 program authorizes shares to be repurchased on the open market or in privately negotiated transactions. The July 2008 program would be executed after completion of purchases related to the February 2008 program. Timing and volume of purchases will depend on market conditions and other factors. Repurchased shares will be held in treasury. Fox Chase Bancorp, Inc. is the mid-tier 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 http://www.foxchasebank.com. The Fox Chase Bancorp, Inc. logo is available at http://www.primenewswire.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 (UNAUDITED)
(Dollars in Thousands, Except Per Share Data)
Three Months Ended Six Months Ended
June 30, June 30,
------------------ ------------------
2008 2007 2008 2007
-------- -------- -------- --------
INTEREST INCOME
Interest and fees on loans $7,181 $6,044 $14,309 $11,592
Interest on money market funds 246 -- 521 --
Interest on mortgage related
securities 3,206 1,712 6,110 3,530
Interest on investment
securities available-for-sale:
Taxable 104 455 755 908
Non-taxable 155 259 323 504
Dividend income 66 62 124 128
Other interest income 37 1,494 107 2,951
-------- -------- -------- --------
Total Interest Income 10,995 10,026 22,249 19,613
-------- -------- -------- --------
INTEREST EXPENSE
Deposits 4,552 5,143 9,659 10,013
Federal Home Loan Bank
advances 1,120 370 2,150 736
Other borrowed funds 182 -- 364 --
-------- -------- -------- --------
Total Interest Expense 5,854 5,513 12,173 10,749
-------- -------- -------- --------
Net Interest Income 5,141 4,513 10,076 8,864
Provision for loan losses 225 75 400 75
-------- -------- -------- --------
Net Interest Income after
Provision for Loan Losses 4,916 4,438 9,676 8,789
-------- -------- -------- --------
NONINTEREST INCOME
Service charges and other fee
income 224 208 415 424
Net gain on sale of:
Loans 1 16 4 73
Fixed assets -- 874 -- 874
Securities available-for-sale 48 -- 118 --
Income on bank-owned life
insurance 113 109 224 216
Other 17 51 35 107
-------- -------- -------- --------
Total Noninterest Income 403 1,258 796 1,694
-------- -------- -------- --------
NONINTEREST EXPENSE
Salaries, benefits and other
compensation 3,064 2,252 5,862 4,669
Occupancy expense 468 480 954 879
Furniture and equipment
expense 227 250 443 482
Data processing costs 409 388 802 761
Professional fees 265 512 578 985
Marketing expense 125 176 220 297
FDIC premiums 25 22 55 42
Other 373 467 764 889
-------- -------- -------- --------
Total Noninterest Expense 4,956 4,547 9,678 9,004
-------- -------- -------- --------
Income Before Income Taxes 363 1,149 794 1,479
Income tax provision 59 297 145 334
-------- -------- -------- --------
Net Income $ 304 $ 852 $ 649 $1,145
======== ======== ======== ========
Earnings per share:
Basic $ 0.02 $ 0.06 $ 0.05 $ 0.08
Diluted $ 0.02 $ 0.06 $ 0.05 $ 0.08
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Dollars in Thousands, Except Share Data)
June 30, December 31,
2008 2007
------------ ------------
(Unaudited)
ASSETS
Cash and due from banks $ 1,929 $ 3,307
Interest-earning demand deposits in other
banks 5,732 7,968
Money market funds -- 20,000
------------ ------------
Total cash and cash equivalents 7,661 31,275
Investment securities available-for-sale 24,391 91,159
Mortgage related securities available-for-
sale 251,367 205,145
Loans, net of allowance for loan losses of
$3,760 and $3,376 at June 30, 2008 and
December 31, 2007, respectively 525,128 447,035
Federal Home Loan Bank stock, at cost 8,067 5,875
Bank-owned life insurance 11,986 11,762
Premises and equipment 14,074 14,466
Accrued interest receivable 3,298 3,360
Mortgage servicing rights 1,003 1,066
Deferred tax asset, net 1,327 410
Other assets 2,340 1,366
------------ ------------
Total Assets $ 850,642 $ 812,919
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Deposits $ 583,233 $ 585,560
Federal Home Loan Bank advances 119,912 80,000
Other borrowed funds 20,000 20,000
Advances from borrowers for taxes and
insurance 3,146 2,374
Accrued interest payable 557 504
Accrued expenses and other liabilities 2,725 2,110
------------ ------------
Total Liabilities 729,573 690,548
------------ ------------
STOCKHOLDERS' EQUITY
Preferred stock ($.01 par value; 1,000,000
shares authorized, none issued and
outstanding at June 30, 2008 or December 31,
2007) -- --
Common stock ($.01 par value; 35,000,000
shares authorized, 14,679,750 shares issued;
14,223,850 and 14,352,750 shares outstanding
at June 30, 2008 and December 31, 2007,
respectively) 147 147
Additional paid-in capital 63,423 62,909
Treasury stock (at cost, 455,900 and 327,000
shares at June 30, 2008 and December 31,
2007, respectively) (5,456) (3,924)
Common stock acquired by benefit plans (8,540) (8,732)
Retained earnings 72,124 71,475
Accumulated other comprehensive income
(loss), net (629) 496
------------ ------------
Total Stockholders' Equity 121,069 122,371
------------ ------------
Total Liabilities and Stockholders' Equity $ 850,642 $ 812,919
============ ============
SELECTED CONSOLIDATED FINANCIAL AND OTHER DATA OF THE COMPANY
(UNAUDITED)
(Dollars in Thousands, Except Per Share Data)
June 30, December 31, June 30,
2008 2007 2007
------------ ------------- ------------
CAPITAL RATIOS(1):
Tier 1 capital (to adjusted
assets) 11.63% 12.03% 12.62%
Tier 1 risk-based capital (to
risk-weighted assets) 20.01 21.78 24.37
Total risk-based capital (to
risk-weighted assets) 20.77 22.54 25.14
ASSET QUALITY INDICATORS:
Nonperforming loans(2) $ 1,460 $ 819 $ 241
Real estate owned -- -- --
--------- --------- ---------
Total nonperforming assets $ 1,460 $ 819 $ 241
========= ========= =========
Ratio of nonperforming loans
to total loans 0.28% 0.18% 0.06%
========= ========= =========
Ratio of nonperforming loans
to total assets 0.17 0.10 0.03
========= ========= =========
Ratio of allowance for loan
losses to total loans 0.71 0.75 0.74
========= ========= =========
Ratio of allowance for loan
losses to nonperforming loans 258% 412% 1,255%
========= ========= =========
At or for the Three Months Ended;
June 30, March 31, June 30,
2008 2008 2007
--------- --------- ---------
PERFORMANCE RATIOS(3):
Return on average assets 0.14% 0.16% 0.45%
Return on average equity 0.99 1.12 2.69
Net interest margin 2.48 2.39 2.50
OTHER:
Book value per share $8.56 $8.62 $8.63
Employees (full-time
equivalents) 138 140 141
(1) Represents capital ratios of Fox Chase Bank
(2) Includes nonaccruing loans and accruing loans past due 90 days or more
(3) Annualized
Contact: Fox Chase Bancorp, Inc.
Roger Deacon, Chief Financial Officer
(215) 682-4116
Source: Fox Chase Bancorp, Inc.
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