First National Community Bancorp, Inc. Reports 4th Quarter and Annual Net Income for 2013
DUNMORE, Pa., March 24, 2014 /PRNewswire/ -- First National Community Bancorp, Inc. (OTCQB: FNCB), the parent company of Dunmore-based First National Community Bank (the "Bank"), announced today that it has filed its annual report on Form 10-K for the year ended December 31, 2013. Company results for the fourth quarter of 2013 include net income of $2.0 million, or $0.13 per basic and diluted share, compared to a net loss of $5.1 million, or $(0.30) per basic and diluted share, for the prior year fourth quarter. Total interest income was $8.4 million compared to $8.9 million for fourth quarter 2012, and total interest expense for fourth quarter 2013 was $1.7 million, a decrease from $2.1 million in the prior year quarter. The Company recorded a credit for loan and lease losses in the fourth quarter of 2013 in the amount of $3.9 million compared to a provision for loan and lease losses of $689,000 for fourth quarter 2012. Non-interest expense totaled $10.7 million for fourth quarter 2013, down $110,000 from $10.8 million in the prior year fourth quarter, reflecting reduced operating expenses offset by an accrual of $2.5 million for attorneys' fees and costs as part of the settlement of the shareholders' derivative lawsuit. Legal expense of approximately $650,000 in the fourth quarter 2013 remained above the Company's estimated costs for future periods, though costs are expected to normalize at the conclusion of certain ongoing legal matters.
Performance Highlights for 2013:
- A $50.5 million or 8.7% increase in net loans compared to December 31, 2012;
- A $6.8 million, or 16.3%, decrease in non-interest expense for 2013, compared with the 2012;
- The December 31, 2013 ratio of non-performing loans to total loans of 0.99%, an improvement of 11 basis points compared to 1.10% at September 30, 2013, and improved 63 basis points, compared with 1.62% at December 31, 2012;
- Non-performing loans at December 31, 2013 were $6.4 million, a reduction of $3.3 million, or 34.0%, from December 31, 2012;
- The Bank's total risk-based capital of $90.0 million, or 13.43% of risk-weighted assets at December 31, 2013, was up $11.6 million from $78.4 million, or 11.79% of risk-weighted assets at December 31, 2012.
"Our team's consistent efforts throughout 2013 resulted in four consecutive quarters of positive earnings and improved results compared to prior year periods. Continued effective execution of our operating strategy focused on organic loan growth, core deposit growth, specifically in demand and savings accounts, and an improved operating profile drove our positive results for the fourth quarter and for 2013," said Steven R. Tokach, President and Chief Executive Officer. "At December 31, 2013, our net loans were up by more than $50 million and deposits had grown by $30 million compared with the 2012 year end. The Bank's asset quality returned to being a core operating strength in 2013 as the ratio of non-performing loans to total loans dropped below 1.00%, enabling the Bank to reduce loan loss reserves by $6.3 million during the year. And importantly, the Bank's total risk-based capital at year end of 13.43% exceeds the supervisory requirement established by the Office of the Comptroller of the Currency. We're also pleased that the Bank's improved operating performance in 2013 was reflected in an increase in the Company's common stock valuation from the 2012 year end."
Summary Results for 2013
The Company's net income for 2013 was $6.4 million, or $0.39 per basic and diluted share, compared to a net loss of $13.7 million, or $(0.83) per basic and diluted share, for 2012.
Total interest income for 2013 was $33.0 million, down $4.0 million, or 11.00%, from $37.0 million in 2012, primarily a result of lower loan and investment yields, coupled with decreases in average balances of loans and investments. Total interest expense of $7.2 million was down $2.0 million, or 22.15%, from $9.2 million in 2012, reflecting a decrease in the average balance of interest-bearing liabilities and an 18 basis-point decline in the average rate paid on interest-bearing liabilities. As a result, net interest income before credit for loan and lease losses for 2013 was $25.8 million, down $2.0 million from $27.8 million in the prior year. The 2013 credit for loan and lease losses was $6.3 million, a positive change of $10.3 million as compared to a provision of $4.1 million in 2012, primarily resulting from reductions in historical loss factors, improved asset quality metrics, and net recoveries on previously charged-off loans.
Total non-interest income was $9.3 million for 2013, an increase of $5.0 million, or 116.74%, from $4.3 million for the prior year period. The increase was primarily the result of net gains on the sale of investment securities of $2.9 million in 2013 compared to a net loss of $1.7 million on the sale of investment securities in 2012.
Total non-interest expense for 2013 was $34.9 million, down from $41.7 million in 2012, primarily resulting from a $1.5 million decrease in salaries and employee benefits, a $1.7 million decrease in legal expenses and a $2.7 million decrease in professional fees. Professional fees are expected to further decline to normalized levels in 2014, and legal fees are expected to decrease but still remain at a heightened level until certain litigation matters are resolved.
Continued Improvement in Asset Quality
FNCB's asset quality ratios continued to improve through the end of 2013, reflecting heightened work-out efforts on non-performing loans, as well as the disposal of foreclosed properties. Total non-performing loans at December 31, 2013 were $6.4 million, down $3.3 million, or 34.0%, from December 31, 2012, and down $848 thousand, or 11.7%, from September 30, 2013. The ratio of non-performing loans to total loans was 0.99% at December 31, 2013, an improvement of 63 basis points from 1.62% at December 31, 2012, and an improvement of 11 basis points compared to 1.10% at September 30, 2013.
The Company's total assets at December 31, 2013 year end were $1.0 billion, an increase of $35.5 million compared to December 31, 2012. Total deposits were $884.7 million, an increase of $30.1 million from December 31, 2012. Total borrowed funds increased by $8.5 million to $62.4 million compared to December 31, 2012. The Bank's capital ratios at December 31, 2013 were as follows: total risk-based capital ratio of 13.43%, Tier 1 risk-based capital ratio of 12.17%, and Tier 1 leverage ratio of 8.32%.
Availability of Filings
A copy of the Company's Form 10-K for the period ended December 31, 2013 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 2013 Form 10-K 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. The Company's common stock trades on the OTCQB under the symbol FNCB.
Additional product, Company and investor information is available at FNCB's web site, please 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 taxes, capital adequacy, banking, securities, capital adequacy 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.
SOURCE First National Community Bancorp, Inc.