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First National Community Bancorp, Inc. Reports Third Quarter 2012 Results
By: PR Newswire
Nov. 14, 2012 04:39 PM
DUNMORE, Pa., Nov. 14, 2012 /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 and nine months ended September 30, 2012. The Company reported a net loss of $6.5 million or ($0.40) per diluted share for the quarter ended September 30, 2012, and a net loss of $8.7 million or ($0.53) per diluted share for the nine months ended September 30, 2012. The Company's operating results for the third quarter include a provision for loan and lease losses of $3.8 million, and also include above-normal legal and professional fees, both of which are expected to decrease in subsequent reporting periods.
"It was a very productive quarter as the Company successfully completed the financial statement restatement process and is now current with its SEC filings, continued to make substantial progress at reducing non-performing loans and improving our asset quality metrics, as well as filling key positions within our management group," said Steven R. Tokach, President and Chief Executive Officer. "Our financial results for the quarter include significant professional and consulting resources required to return to current SEC filing status and respond to litigation claims, as well as the expenses associated with reducing OREO and working to resolve other non-performing loans. We believe that the operational improvements achieved over the last two years will begin to become more apparent in our future financial results as we move beyond the SEC filing restatement process and the extraordinary expenses associated with that work. Our Company has much strength to build upon, including a well-credentialed and experienced management team, a sizable deposit market share, a very loyal customer base, and dedicated employees that remain committed to FNCB's success. We are also pleased to note that FNCB shares are once again being quoted and trading on the OTCQB, as a result of the Company's return to current SEC reporting compliance."
Summary Results for the Nine Months Ended September 30, 2012
Net interest income before provision for loan and lease losses was $21.0 million for the first nine months of 2012, compared to $22.2 million for the same period in 2011, resulting from a $106.5 million reduction in average interest-earning assets less a reduction of $145.1 million in average interest-bearing liabilities. Net interest margin for the nine months ended September 30, 2012 was 3.27%, an increase of nine basis points over the same period in 2011. Interest expense for the nine months ended September 30, 2012 decreased $3.9 million, or 35.6%, compared to the same period in 2011, resulting from lower average balances of interest-bearing liabilities along with a 36 basis-point decline in the Bank's average rate for interest-bearing liabilities.
Non-interest income was $4.7 million for the nine months ended September 30, 2012, compared to $9.8 million for the same period in 2011. The reduction in non-interest income was primarily the result of lower net gains on the sale of securities, which total $96,000 for the nine months ended 2012, compared to $3.2 million for the comparable prior year period, and lower net gains on the sale of OREO, from $2.5 million in 2011 to $260,000 in 2012.
Non-interest expense for the nine months ended September 30, 2012 was $31.0 million, an increase of $245,000 in comparison to the same period in 2011. Although professional fees, consisting of accounting and consulting expenses, decreased from $4.7 million for the nine-month period ended September 30, 2011 to $3.8 million for the same period in 2012, legal fees increased, from $1.8 million for the nine-month period ended September 30, 2011, to $3.2 million for the same period in 2012. Professional fees are expected to continue to decline to normalized levels in coming quarters, reflecting completion of the process to return the Company to current SEC reporting status. Legal fees will continue to be at a heightened level until certain litigation matters are resolved.
Improved Asset Quality
As a result of aggressive problem credit resolutions, the Company's asset quality ratios continued to improve through the end of the 2012 third quarter.
The Company's total non-performing loans were $13.4 million at September 30, 2012, a decrease of $6.6 million or 33%, from December 31, 2011. The ratio of non-performing loans to total loans improved to 2.11% at September 30, 2012, compared to 2.93% at December 31, 2011, representing a decrease of 82 basis points or 28%. (The FDIC peer group average at June 30, 2012, the most current FDIC statistical data, was 2.79%). The allowance for loan and lease losses as a percentage of non-performing loans was 154% at September 30, 2012, up from 105% at the end of 2011. (The FDIC peer group average was 69.3% at June 30, 2012). The Company's ratio of net charge-offs to average loans outstanding for the nine months ended September 30, 2012 was 0.56%. (The average for the FDIC peer group at June 30, 2012 quarter was 0.60%).
The Company's total assets at September 30, 2012 were $1.0 billion, a decrease of $89,000 as compared to December 31, 2011. Total deposits at September 30, 2012 were $856.4 million, a decrease of $100.7 million from December 31, 2011. Total borrowed funds of $67.9 million at September 30, 2012 were down $15.6 million from December 31, 2011.
At September 30, 2012, First National Community Bank's capital ratios were as follows: total risk-based capital ratio of 10.87%, Tier 1 risk-based capital ratio of 9.60%, and Tier 1 leverage ratio of 7.52%.
Availability of Filings
A copy of the Company's Form 10-Q for the period ended September 30, 2012 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 September 30, 2012 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, Monroe 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.
This release 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 impact of the Company's ability to comply with its regulatory agreements and orders; the effectiveness of the Company's revised 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, banking, securities and insurance); technological changes; 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 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.
SOURCE First National Community Bancorp, Inc.
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