News & Analysis

Fox Chase Bancorp, Inc. Announces Earnings for the Three and Six Months Ended June 30, 2010

Source: Fox Chase Bancorp, Inc. Fox Chase Bancorp, Inc. Announces Earnings for the Three and Six Months Ended June 30, 2010

HATBORO, Pa., July 28, 2010 (GLOBE NEWSWIRE) -- Fox Chase Bancorp, Inc. (the "Company") (Nasdaq:FXCB), the holding company for Fox Chase Bank (the "Bank"), today announced net income of $608,000 and $1.2 million for the three and six months ended June 30, 2010, respectively, compared to net income of $298,000 and $899,000 for the three and six months ended June 30, 2009, respectively.

Highlights for the three and six month periods ended June 30, 2010 included:

Net interest income increased $1.2 million, or 23.0%, to $6.7 million for the three months ended June 30, 2010, compared to $5.4 million for the three months ended June 30, 2009 and increased $1.9 million, or 16.8%, to $13.1 million for the six months ended June 30, 2010 from $11.2 million for the same period in 2009, primarily due to a decrease in interest expense on deposits due to maturities of higher rate certificates of deposits and repricing of other deposit products. Net interest income increased $253,000, or 3.9%, to $6.7 million for the three months ended June 30, 2010, compared to $6.4 million for the three months ended March 31, 2010. Net interest margin increased to 2.37% for the three months ended June 30, 2010 compared to 2.26% for the three months ended March 31, 2010 and 1.93% for the three months ended June 30, 2009. Efficiency ratio improved to 73.0% for the three months ended June 30, 2010 compared to 75.7% for the three months ended March 31, 2010 and 91.4% for the three months ended June 30, 2009. Provision for loan losses increased $508,000, or 89.6%, to $1.1 million for the three months ended June 30, 2010, from $567,000 for the three months ended June 30, 2009 and increased $1.0 million, or 104.4%, to $2.0 million for the six months ended June 30, 2010 from $962,000 for the same period in 2009. During the three months ended June 30, 2010, the Bank increased its specific reserves on impaired loans by $368,000 as well as increased its general reserves by $598,000 primarily due to growth in the commercial loan portfolio and continued elevated levels of classified loans. Provision for loan losses increased $184,000, or 20.7%, to $1.1 million for the three months ended June 30, 2010, from $891,000 for the three months ended March 31, 2010. Increased valuation allowance on the Bank's mortgage servicing rights of $67,000 for the three months ended June 30, 2010, compared to a reduced valuation allowance of $99,000 for the three months ended June 30, 2009 and an increased valuation allowance of $65,000 for the six months ended June 30, 2010 compared to a reduced valuation allowance of $75,000 for the same period in 2009. Total assets were $1.24 billion at June 30, 2010, an increase of $69.1 million, or 5.9%, from $1.17 billion at December 31, 2009, primarily due to $77.8 million in net proceeds from the Company's public offering and a $29.0 million, or 4.6%, increase in loans, offset by a $54.7 million, or 13.6%, decrease in mortgage related securities. Total stockholders' equity was $206.4 million at June 30, 2010, an increase of $82.7 million, or 66.9% from $123.6 million at December 31, 2009, due primarily to the effects of the second step conversion and reorganization to a fully public entity.

Credit related items as of and for the quarter ended June 30, 2010 include:

Allowance for loan losses increased to $11.7 million, or 1.74% of total loans at June 30, 2010 compared to $10.6 million, or 1.65% of total loans at December 31, 2009; Allowance for loan losses to nonperforming loans was 42.1% at June 30, 2010 compared to 35.7% at December 31, 2009; Loan charge-offs increased $103,000 to $109,000 for the three months ended June 30, 2010 compared to $6,000 for the three months ended June 30, 2009 and increased $733,000 to $884,000 for the six months ended June 30, 2010 compared to $151,000 for the six months ended June 30, 2009. Loan charge-offs during the quarter were comprised of $50,000 related to a residential mortgage loan and $59,000 related to a second mortgage home equity loan; Nonperforming assets declined to $32.0 million, or 2.57% of total assets, at June 30, 2010 from $33.6 million, or 2.91% of total assets, at March 31, 2010 and $33.7 million, or 2.87% of total assets, at December 31, 2009; Nonperforming assets were comprised of the following asset classes at June 30, 2010 and March 31, 2010, respectively: construction loans for residential projects – decreased to $12.1 million from $13.0 million; commercial real estate loans – increased to $6.2 million from $6.1 million; commercial and industrial loans – decreased to $313,000 from $568,000; one-to-four family residential and home equity loans – increased to $9.1 million from $8.9 million; and assets acquired through foreclosure – decreased to $4.3 million from $5.1 million; Specific reserves related to nonperforming loans totaled $4.3 million at June 30, 2010, the same level as December 31, 2009;  Delinquent loans 30 to 89 days totaled $5.2 million at June 30, 2010, compared to $3.6 million at December 31, 2009. Of the $5.2 million in delinquent loans at June 30, 2010, $2.1 million relates to a loan that became current in July 2010.

Commenting on the second quarter 2010 performance, Thomas M. Petro, President and Chief Executive Officer of Fox Chase Bancorp said, "The completion of our second step conversion in June 2010 raised $77.8 million in additional capital and positions the Bank to execute our long-term strategic business plan, grow market share and drive earnings growth as the economy improves. While general economic conditions continue to be fragile, we did see modest improvement in the levels of nonperforming assets during the quarter. We continue to be proactive in identifying loan problems and during the quarter continued to increase our allowance for loan losses to address these issues. We are very pleased with our progress thus far, and continue to be focused on growing our loan portfolio organically while improving our margin by making the right pricing decisions and reducing our cost of funds. These initiatives will improve our profitability and increase our operating leverage in future periods."

Fox Chase Bancorp, Inc will host a conference call to discuss second quarter 2010 results on Thursday, July 29, 2010 at 9:00 am EDT. The general public can access the call by dialing (877) 317-6789. A replay of the conference call will be available through August 19, 2010 by dialing (877) 344-7529; use Conference ID: 442916.

Fox Chase Bancorp, Inc. is the 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. 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 STATEMENT OF OPERATIONS           (Dollars in Thousands, Except Per Share Data)                 Three Months Ended Six Months Ended   June 30, June 30,   2010 2009 2010 2009   (Unaudited)       INTEREST INCOME         Interest and fees on loans $9,153 $8,758 $17,935 $17,135 Interest on money market funds  --  122  --  160 Interest on mortgage related securities available-for-sale 3,135 3,505 6,747 6,760 Interest on investment securities available-for-sale     Taxable 96 261 173 385 Nontaxable 84 140 173 283 Dividend income  --   --   --  1 Other interest income 64 135 163 136 Total Interest Income 12,532 12,921 25,191 24,860 INTEREST EXPENSE         Deposits 4,219 5,719 8,797 10,098 Federal Home Loan Bank advances 1,191 1,329 2,408 2,659 Other borrowed funds 432 432 859 861 Total Interest Expense 5,842 7,480 12,064 13,618 Net Interest Income 6,690 5,441 13,127 11,242 Provision for loan losses 1,075 567 1,966 962 Net Interest Income after Provision for Loan Losses 5,615 4,874 11,161 10,280 NONINTEREST INCOME         Service charges and other fee income 246 310 499 480 Net gain on sale of loans  --   --   --  3 Income on bank-owned life insurance 118 112 233 221 Other 70 146 105 211           Total other-than-temporary impairment loss  --  (605)  --  (605) Less: Portion of loss recognized in other comprehensive income (before taxes)  --  448  --  448 Net other-than-temporary impairment loss  --  (157)  --  (157) Net gains on sale of investment securities  --  588  --  588 Net investment securities gains  --  431  --  431 Total Noninterest Income 434 999 837 1,346 NONINTEREST EXPENSE         Salaries, benefits and other compensation 2,963 2,915 5,946 5,765 Occupancy expense 440 438 939 933 Furniture and equipment expense 144 180 287 401 Data processing costs 393 377 762 762 Professional fees 355 298 617 564 Marketing expense 95 86 166 170 FDIC premiums 401 831 773 1,072 Other 411 367 892 776 Total Noninterest Expense 5,202 5,492 10,382 10,443 Income Before Income Taxes 847 381 1,616 1,183 Income tax provision  239 83 457 284 Net Income  $608 $298 $1,159 $899 Earnings per share:         Basic $0.04 $0.02 $0.08 $0.06 Diluted $0.04 $0.02 $0.08 $0.06             CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION      (Dollars in Thousands, Except Share Data)       June 30, December 31,   2010 2009   (unaudited)   ASSETS     Cash and due from banks $208 $44 Interest-earning demand deposits in other banks 157,556 65,374 Total cash and cash equivalents 157,764 65,418 Investment securities available-for-sale 24,342 19,548 Mortgage related securities available-for-sale 348,178 402,919 Loans, net of allowance for loan losses of $11,687 at June 30, 2010 and $10,605 at December 31, 2009 660,255 631,296 Assets acquired through foreclosure 4,276 4,052 Federal Home Loan Bank stock, at cost 10,435 10,435 Bank-owned life insurance 12,900 12,667 Premises and equipment 10,895 11,137 Real estate held for investment 1,730 1,730 Accrued interest receivable 4,481 4,467 Mortgage servicing rights, net 556 683 Deferred tax asset, net  --  1,467 Other assets 7,155 7,999 Total Assets $1,242,967 $1,173,818 LIABILITIES AND STOCKHOLDERS' EQUITY     LIABILITIES     Deposits $856,636 $858,277 Federal Home Loan Bank advances 125,001 137,165 Other borrowed funds 50,000 50,000 Advances from borrowers for taxes and insurance 2,559 2,119 Accrued interest payable 621 696 Deferred tax liability, net 79  --  Accrued expenses and other liabilities 1,719 1,927 Total Liabilities 1,036,615 1,050,184 STOCKHOLDERS' EQUITY     Preferred stock ($.01 par value; 1,000,000 shares authorized, none issued and outstanding at June 30, 2010 and December 31, 2009)  --   --  Common stock ($.01 par value; 60,000,000 shares authorized, 14,547,173 shares issued and outstanding at June 30, 2010 and 35,000,000 shares authorized,14,679,750 shares issued and 13,609,187 shares outstanding at December 31, 2009) 145 147 Additional paid-in capital 133,902 64,016 Treasury stock, at cost (0 shares at June 30, 2010 and     1,070,563 shares at December 31, 2009)  --  (11,814) Common stock acquired by benefit plans (10,069) (6,862) Retained earnings 72,746 71,604 Accumulated other comprehensive income, net 9,628 6,543 Total Stockholders' Equity 206,352 123,634       Total Liabilities and Stockholders' Equity $1,242,967 $1,173,818     SELECTED CONSOLIDATED FINANCIAL AND OTHER DATA OF THE COMPANY (UNAUDITED) (Dollars in Thousands, Except Per Share Data)                   June 30, March 31, December 31, June 30,   2010 2010 2009 2009 CAPITAL RATIOS:         Total stockholders' equity (to total assets) (1) 16.60% 10.83% 10.53% 10.65%           Tier 1 capital (to adjusted assets) (2) 11.89 9.37 8.51 8.71 Tier 1 risk –based capital (to risk-weighted assets)(2) 21.89 16.12 15.41 15.81 Total risk-based capital (to risk-weighted assets) (2) 23.14 17.33 16.57 16.80           ASSET QUALITY INDICATORS:         Nonperforming loans (3) $27,728 $28,523 $29,680 $7,713 Real estate owned 4,276 5,076 4,052  --  Total nonperforming assets $32,004 $33,599 $33,732 $7,713           Ratio of nonperforming loans to total loans 4.13% 4.35% 4.62% 1.22% Ratio of nonperforming assets to total assets 2.57 2.91 2.87 0.66 Ratio of allowance for loan losses to total loans 1.74 1.63 1.65 1.12  Ratio of allowance for loan losses to nonperforming loans 42.1 37.6 35.7 91.7           Past due loans         30 - 59 days (4) $5,173 $631 $1,269 $6,238 60 - 89 days 10 440 2,306 816 Total $5,183 $1,071 $3,575 $7,054                               (1) Represents stockholders' equity ratio of Fox Chase Bancorp, Inc.     (2) Represents capital ratios of Fox Chase Bank       (3) Includes nonaccruing loans and accruing loans past due 90 days or more   (4) Includes a $2.1 million loan which became current in July 2010           At or for the Three Months Ended   June 30, March 31, June 30,   2010 2010 2009 PERFORMANCE RATIOS (5):       Return on average assets  0.21% 0.19% 0.10% Return on average equity  1.90 1.76 0.96 Net interest margin  2.37 2.26 1.93 Efficiency ratio (6) 73.0 75.7 91.4 OTHER:       Book value per share $14.19 $9.20 $9.02 Employees (full-time equivalents) 137 135 142           For the Six Months Ended     June 30, June 30,     2010 2009   PERFORMANCE RATIOS:       Return on average assets  0.20% 0.17%   Return on average equity  1.83 1.46   Net interest margin   2.31 2.17   Efficiency ratio (6) 74.3 85.9                           (5) Annualized
(6) Represents noninterest expense 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. CONTACT: Fox Chase Bancorp, Inc. Roger S. Deacon, Chief Financial Officer (215) 775-1435