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SOURCE First National Community Bancorp, Inc.
DUNMORE, Pa., May 12, 2014 /PRNewswire/ -- First National Community Bancorp, Inc. (OTCQB: FNCB), the parent company of Dunmore-based First National Community Bank, today announced its operating results for the quarter ended March 31, 2014. The Company reported net income of $3.5 million, or $0.21 per basic and diluted share, compared to net income of $1.7 million or $0.11 per basic and diluted share, for the prior year first quarter. The improved performance for the first quarter 2014 was a result of higher non-interest income, primarily related to a net gain on the sale of securities, an increase in the credit for loan and lease losses, and lower non-interest expense compared to the first quarter 2013.
"We believe our $3.5 million first quarter profit is indicative of our solid all-around performance, which included strong loan growth, improved asset quality and effective management of non-interest expense," said Steven R. Tokach, President and Chief Executive Officer. "This was our fifth consecutive quarter of positive net earnings, which started in the first quarter of 2013, and indicates to us that 2013 was an inflection point for the Bank's performance. During this 15 month period we have substantially strengthened our capital position, continuously improved our asset quality metrics, significantly reduced non-interest expense and realized strong organic loan growth across our portfolios. During the first quarter we completed the sale of our Monroe County retail banking presence, which allowed us to refocus our service area, and realize a gain of more than $600 thousand from the sale. We believe that the significant progress realized during the last five quarters positions FNCB for solid performance through the remainder of 2014."
Summary Results for the Three Months Ended March 31, 2014
Net interest income before credit for loan and lease losses was $6.6 million for the first three months of 2014, compared to $6.4 million for the same period in 2013, resulting mainly from a decrease in funding costs. Net interest margin for the three months ended March 31, 2014 was 3.10%, a decrease of 17 basis points from the same period in 2013. Interest expense was $1.6 million for the three months ended March 31, 2014, reflecting a decrease of $284 thousand, or 15.29%, compared to the same period in 2013,and resulting from an 18 basis-point decline in the Bank's cost of funds, partially offset by an increase in average interest-bearing liabilities.
Non-interest income was $3.5 million for the three months ended March 31, 2014, compared to $2.5 million for the same period in 2013. The increase in non-interest income was primarily the result of $726 thousand increase in net gains on the sale of securities, and a $607 thousand gain on branch divestitures.
Non-interest expense for the three months ended March 31, 2014 was $8.0 million, a decrease of $314 thousand from $8.3 million in the same period in 2013. Professional fees, consisting of accounting and consulting expenses, decreased by $101 thousand for the quarter ended March 31, 2013 to $450 thousand for the same period in 2014. Professional fees are expected to continue to decline to more normalized levels in coming quarters, reflecting less reliance on outside advisors and consultants.
Improved Asset Quality
The Company's asset quality ratios continued to improve through March 31, 2014 as a result of aggressive problem credit resolutions. The Company's total non-performing loans were $5.8 million at March 31, 2014, a decrease of $587 thousand, or 9.21%, from December 31, 2013. The ratio of non-performing loans to total loans improved 10 basis points to 0.89% at March 31, 2014, compared to 0.99% at December 31, 2013. (The FDIC average for commercial banks with assets between $100 million and $1 billion at March 31, 2014 was 1.38%). The allowance for loan and lease losses as a percentage of loans was 1.93% at March 31, 2014 versus 2.18% at the end of 2013. (The above described FDIC peer group average was 1.59% at March 31, 2014). The Company's ratio of net charge-offs (recoveries) to average loans outstanding for the quarter ended March 31, 2014 was (0.02) % reflecting net recoveries of $142 thousand in the quarter. (The above described FDIC peer group had average net charge-offs of 0.03% for the quarter ended March 31, 2014.)
The Company's total assets at March 31, 2014 were $974.1 million, a decrease of $29.7 million as compared to December 31, 2013, which reflected a decrease in cash and cash equivalents resulting from the decrease in deposits. Total loans (before allowance for loan and lease losses) at March 31, 2014 were $654.2 million, an increase of $10.3 million as compared to December 31, 2013. Total deposits at March 31, 2014 were $835.2 million, a decrease of $49.5 million from December 31, 2013, which resulted primarily from cyclical deposit trends of municipal customers and the Company's first quarter branch divestiture. Total borrowed funds of $69.8 million at March 31, 2014 were up $7.4 million from December 31, 2013.
At March 31, 2014, First National Community Bank's capital ratios were as follows: total risk-based capital ratio of 13.86%, tier 1 risk-based capital ratio of 12.60%, and tier 1 leverage ratio of 8.76%.
Availability of Filings
A copy of the Company's Form 10-Q for the quarter ended March 31, 2014 will be provided upon request from: Shareholder Relations, First National Community Bancorp, Inc., 102 East Drinker Street, Dunmore, PA 18512 or by calling (570) 348-6419. The Company's March 31, 2014 quarterly report on Form 10-Q is also available on the Investor Relations page of the Company's website, www.fncb.com, and on the SEC website at:
About First National Community Bank:
First National Community Bancorp, Inc. is the bank holding company of First National Community Bank, which provides personal, small business and commercial banking services to individuals and businesses throughout Lackawanna, Luzerne, and Wayne Counties in Northeastern Pennsylvania. The institution was established as a National Banking Association in 1910 as The First National Bank of Dunmore, and has been operating under its current name since 1988. For more information about FNCB, visit www.fncb.com.
James M. Bone, Jr., CPA
Executive Vice President and
Chief Financial Officer
First National Community Bank
This communication contains forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Actual results and trends could differ materially from those set forth in such statements due to various risks, uncertainties and other factors (some of which are beyond the Company's control). The words "may," "could," "should," "would," "believe," "anticipate," "estimate," "expect," "intend," "plan" and similar expressions are intended to identify forward-looking statements. Such risks, uncertainties and other factors that could cause actual results and experience to differ include, but are not limited to, the following: the strength of the United States economy in general and the strength of the local economies in the Company's markets; the effects of, and changes in trade, monetary and fiscal policies and laws, including interest rate policies of the Board of Governors of the Federal Reserve System; inflation, interest rate, market and monetary fluctuations; the timely development of and acceptance of new products and services; the ability of the Company to compete with other institutions for business; the composition and concentrations of the Company's lending risk and the adequacy of the Company's reserves to manage those risks; the valuation of the Company's investment securities; the ability of the Company to pay dividends or repurchase common shares; the ability of the Company to retain key personnel; the impact of any pending or threatened litigation against the Company; the marketability of shares of the Company and fluctuations in the value of the Company's share price; the impact of the Company's ability to comply with its regulatory agreements and orders; the effectiveness of the Company's system of internal controls; the ability of the Company to attract additional capital investment; the impact of changes in financial services' laws and regulations (including laws concerning capital adequacy, taxes, banking, securities, and insurance); the impact of technological changes and security risks upon the Company's information technology systems; changes in consumer spending and saving habits; the nature, extent, and timing of governmental actions and reforms, and the success of the Company at managing the risks involved in the foregoing and other risks and uncertainties, including those detailed in the Company's filings with the Securities and Exchange Commission.
The Company cautions that the foregoing list of important factors is not all inclusive. Readers are also cautioned not to place undue reliance on any forward-looking statements, which reflect management's analysis only as of the date of this release, even if subsequently made available by the Company on its website or otherwise. The Company does not undertake to update any forward-looking statement, whether written or oral, that may be made from time to time by or on behalf of the Company to reflect events or circumstances occurring after the date of this release. Readers should carefully review the risk factors described in the Annual Report and other documents that the Company periodically files with the Securities and Exchange Commission, including its Form 10-K for the year ended December 31, 2013.
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