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First National Community Bancorp, Inc. Announces Third Quarter 2013 Net Income of $1.9 Million
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First National Community Bancorp, Inc. (QB) (USOTC:FNCB)
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Today : Tuesday 12 November 2013
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DUNMORE, Pa., Nov. 12, 2013 /PRNewswire/ -- First National Community Bancorp, Inc. (OTCQB: FNCB), the parent company of Dunmore-based First National Community Bank, today announced continued improvement in operating results for the third quarter and nine months ended September 30, 2013, compared to the prior year periods. The Company reported net income of $1.9 million, or $0.11 per basic and diluted share, compared to a net loss of $6.5 million, or $(0.40) per basic and diluted share, for the third quarter of 2012. Net income for the nine months ended September 30, 2013 was $4.3 million, or $0.26 per basic and diluted share, compared to a net loss of $8.7 million, or $(0.53) per basic and diluted share, for the comparable period of 2012. The improved performance for the quarter and nine months ended September 30, 2013 resulted primarily from: a reduction in the allowance for loan and lease losses reserve of $1.2 million and $2.4 million respectively, compared with loan and lease loss provisions of $3.8 million and $3.4 million for the prior year comparable periods; an increase in non-interest income of $0.7 million and $2.5 million for the respective periods, primarily reflecting increased gains on the sale of securities; and decreased non-interest expense of $3.1 million and $6.7 million for the respective periods, primarily due to successful cost containment initiatives and reduced reliance on outside consultants.
Performance Highlights:
A $59.5 million increase in net loans compared to December 31, 2012
A $3.1 million, or 27.8%, decrease in third quarter non-interest expense, and a $6.7 million, or 21.6%, reduction in non-interest expense for the first nine months, compared with the prior year comparable periods
A 20 basis point improvement, to 1.10%, in the third quarter ratio of non-performing loans to total loans, compared to 1.30% at June 30, 2013, and a 52 basis point improvement, compared with 1.62% at December 31, 2012
A $2.5 million, or 25.6%, decrease in non-performing loans from December 31, 2012
The Bank's total risk-based capital of $84.8 million, or 12.62% of risk-weighted assets at September 30, 2013, was up $6.4 million from December 31, 2012
"Our third quarter 2013 results represent continued meaningful improvement in the Bank's operating performance and encompasses our focus on organic loan generation, core deposit (demand deposit and savings accounts) growth, improving our operating profile, and maintaining solid asset quality metrics," said Steven R. Tokach, President and Chief Executive Officer. "Despite sluggish economic activity across our market area, we generated annualized net loan growth of nearly 14% through the first three quarters, reflecting strong activity in our residential and commercial real estate portfolios, as well as solid gains in our consumer lending portfolio. Our asset quality has continued to improve throughout 2013, reflecting our commitment to sound underwriting and credit monitoring practices. Non-performing loans at September 30, 2013 were $7.2 million, down from $8.3 million and $9.7 million at June 30, 2013, and at December 31, 2012, respectively. We believe that this substantive improvement reflects effective efforts to manage problem credits through heightened and effective work-out activity on non-performing loans."
Summary Results for the Three and Nine Months Ended September 30, 2013
Net interest income before the credit for loan and lease losses was $6.4 million for the three months, and $19.1 million for the nine months ended September 30, 2013, compared to $6.8 million and $21.0 million for the respective periods in 2012. The reduced net interest income for the third quarter 2013 was a result of lower yields on average interest-earning assets, partially offset by reduced cost of funds and an increase in average loan balances, as a result of strong third quarter loan demand. Lower net interest income for the nine months ended September 30, 2013 was a result of a decline in the yield on average interest-earning assets coupled with a decrease in average interest-earning assets, which was partially mitigated by a decrease in average interest-bearing liabilities, and to a lesser extent, a decline in the cost of funds.
The tax-equivalent net interest margin for the third quarter 2013 was 3.17%, a decrease of 12 basis points compared with the third quarter 2012. Third quarter 2013 interest income on a tax equivalent basis declined by $912 thousand, compared with the prior year quarter, primarily as a result of a 27 basis point decrease in the yield on average interest-earning assets. Interest expense for the third quarter 2013 declined by $394 thousand, or 17.9%, compared to the third quarter 2012 reflecting an 18 basis point decrease in the cost of funds and a $17.5 million reduction in average interest-bearing liabilities.
Non-interest income was $2.4 million and $7.2 million for the three and nine months ended September 30, 2013, compared to $1.7 million and $4.7 million for the same periods in 2012. The increase in non-interest income was primarily the result of increased net gains on the sale of securities.
