Fox Chase Bancorp, Inc. Reports Increased Earnings for the

HATBORO, Pa., July 29, 2015 (GLOBE NEWSWIRE) -- Fox Chase Bancorp, Inc. (the “Company”) (NASDAQ:FXCB), the holding company for Fox Chase Bank (the “Bank”), today announced net income of $3.2 million, or $0.28 per diluted share, and $5.4 million, or $0.48 per diluted share, for the three and six months ended June 30, 2015, compared to net income of $2.3 million, or $0.20 per diluted share, and $4.3 million, or $0.37 per diluted share, for the three and six months ended June 30, 2014, respectively.

Commenting on performance for the quarter, Thomas M. Petro, President and CEO said, “We are pleased with the impressive earnings growth for the three and six months ended June 30, 2015. We continue to build our commercial bank balance sheet as commercial loans increased to 84% of total loans, average commercial loan growth was 10.4% and our business fundamentals remain strong. The current quarter results were positively impacted by $840,000 (pre-tax) of recoveries on previously charged-off loans. The outsourced data processing systems conversion, which will provide the Company the ability to be more responsive to commercial customers, deliver innovative services and provide increased productivity, is expected to be completed in the fourth quarter of 2015. The pre-tax expenses related to this initiative were $248,000 in the second quarter of 2015 and $478,000 for the first half of 2015. Total expense related to this initiative is estimated to be approximately $1.1 million to $1.3 million for 2015.”

Highlights for the three and six months ended June 30, 2015 included:

Total average assets were $1.10 billion for the six months ended June 30, 2015 compared to $1.09 billion for the six months ended June 30, 2014. Total average commercial loans increased by $54.4 million, or 9.6%, to $623.0 million for the six months ended June 30, 2015, compared to $568.6 million for the six months ended June 30, 2014. Additionally, average commercial loans increased by $15.1 million, or 2.5%, to $630.6 million for the three months ended June 30, 2015, compared to $615.5 million for the three months ended March 31, 2015.
Assets were $1.09 billion at June 30, 2015 as compared to $1.09 billion at December 31, 2014 and $1.11 billion at June 30, 2014. Total commercial loans increased by $17.4 million, or 2.8% to $624.9 million at June 30, 2015 compared to $607.5 million at December 31, 2014. As anticipated, total commercial loans decreased by $17.6 million, or 2.7%, to $624.9 million at June 30, 2015 compared to $642.5 million at March 31, 2015. This reduction was due to seasonal line usage and expected payoffs.
Return on average assets was 1.15% and 0.99% for the three and six months ended June 30, 2015, respectively, compared to 0.85% and 0.78% for the three and six months ended June 30, 2014, respectively.
Net interest income increased $583,000, or 3.5%, to $17.3 million for the six months ended June 30, 2015, compared to $16.7 million for the six months ended June 30, 2014 and increased $228,000, or 2.7%, to $8.7 million for the three months ended June 30, 2015, compared to $8.4 million for the three months ended June 30, 2014. The net interest margin was 3.24% for the three months ended June 30, 2015, compared to 3.29% for the three months ended March 31, 2015 and 3.20% for the three months ended June 30, 2014. During the three months ended June 30, 2015, the Company received $130,000 in prepayment fees, which increased net interest margin by five basis points. During the three months ended March 31, 2015, the Company received a $254,000 special dividend from the FHLB of Pittsburgh, which increased the net interest margin by ten basis points.
The Company recorded a credit to the provision for loan losses of $1.3 million during the three months ended June 30, 2015, which was primarily due to $840,000 of recoveries on previously charged-off loans, a decrease in the loan portfolio of $25.0 million, of which $17.6 million was commercial loans, and loan pay downs on two classified loans. The ratio of the allowance for loan losses to total loans was 1.45% at June 30, 2015, compared to 1.46% at March 31, 2015 and December 31, 2014.
Nonperforming assets continued to decrease to $5.8 million, or 0.53% of total assets, at June 30, 2015 compared to $6.2 million, or 0.55% of total assets, at March 31, 2015 and $6.3 million, or 0.57% of total assets, at December 31, 2014. Delinquent loans totaled $660,000 at June 30, 2015, compared to $780,000 at March 31, 2015 and $258,000 at December 31, 2014. There was only one delinquent commercial loan totaling $49,000 at June 30, 2015.
Noninterest income increased $294,000 to $1.3 million for the six months ended June 30, 2015 compared to $973,000 for the six months ended June 30, 2014 primarily due to an increase of $117,000 in equity in earnings of affiliate due to higher mortgage volumes, an increase of $47,000 in service charges and other fee income due to increased loan fees.
Noninterest expense increased $376,000, or 3.3%, to 11.8 million for the six months ended June 30, 2015, compared to $11.4 million for the six months ended June 30, 2014. This increase was primarily due to the Company incurring $478,000 of system conversion costs offset by a decrease of $301,000 in assets acquired through foreclosure expense. System conversion costs for the six months ended June 30, 2015 are captured in the following financial statement categories: Salary, benefits and other compensation ($70,000), data processing costs ($247,000), professional fees ($147,000) and other ($14,000).
Income tax provision for the six months ended June 30, 2015 includes the reversal of an $182,000 valuation allowance on certain state deferred tax assets, which occurred during the three months ended March 31, 2015. The effective income tax rate for the six months ended June 30, 2015 was 28.5%. Excluding this reversal, the effective income tax rate for the six months ended June 30, 2015 was 30.9% compared to 31.1% for the six months ended June 30, 2014.

The Company also announced that its Board of Directors declared a cash dividend of $0.14 per outstanding share of common stock. The dividend will be paid on or about August 27, 2015 to stockholders of record as of the close of business on August 13, 2015. Finally, on July 29, 2015, the Board of Directors approved an additional 5% stock repurchase plan (the “July 2015 Plan”). Subject to market conditions and other factors, repurchases related to the July 2015 Plan will begin subsequent to the completion of repurchases under the Company’s existing repurchase plan, which was approved in July 2014. During the three months ended June 30, 2015, the Company repurchased 199,329 shares of treasury stock and has approximately 258,000 shares remaining in its’ approved repurchase plan.

Fox Chase Bancorp, Inc. will host a conference call to discuss second quarter 2015 results on Thursday, July 30, 2015 at 9:00 am EDT. The general public can access the call by dialing (877) 507-3275. A replay of the conference call will be available through September 11, 2015 by dialing (877) 344-7529; use Conference ID: 10067181. Participants may preregister at http://dpregister.com/10067181.

Fox Chase Bancorp, Inc. is the stock holding company of Fox Chase Bank. The Bank is a Pennsylvania state-chartered savings bank originally established in 1867. The Bank offers traditional banking services and products from its main office in Hatboro, Pennsylvania and nine branch offices in Bucks, Montgomery, Chester 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.

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 and other effects of terrorist activities. 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 STATEMENTS OF OPERATIONS
(Dollars in Thousands, Except Per Share Data)


				Three Months Ended June 30,						Six Months Ended June 30,
					2015			2014			2015			2014
				(Unaudited)
INTEREST INCOME
	Interest and fees on loans			$	8,391		$	8,130		$	16,530		$	16,240
	Interest and dividends on investment securities				1,696			1,947			3,678			3,895
	Other interest income				3			1			6			1
			Total Interest Income		10,090			10,078			20,214			20,136
INTEREST EXPENSE
	Deposits				728			797			1,443			1,695
	Short-term borrowings				22			30			54			55
	Federal Home Loan Bank advances				523			576			1,062			1,146
	Other borrowed funds				164			250			330			498
			Total Interest Expense		1,437			1,653			2,889			3,394
			Net Interest Income		8,653			8,425			17,325			16,742
	(Credit) provision for loan losses				(1,267	)		100			(795	)		100

			Net Interest Income after Provision for Loan Losses		9,920			8,325			18,120			16,642
NONINTEREST INCOME
	Service charges and other fee income				439			424			823			776
	Net loss on sale of assets acquired through foreclosure				(15	)		(121	)		(15	)		(121	)
	Income on bank-owned life insurance				122			120			242			237
	Equity in earnings of affiliate				111			67			151			34
	Other				39			24			66			47

			Total Noninterest Income		696			514			1,267			973
NONINTEREST EXPENSE
	Salaries, benefits and other compensation				3,943			3,519			7,662			7,160
	Occupancy expense				420			418			897			914
	Furniture and equipment expense				99			96			182			207
	Data processing costs				502			377			1,075			762
	Professional fees				414			337			777			815
	Marketing expense				57			61			98			102
	FDIC premiums				141			150			260			315
	Assets acquired through foreclosure expense				62			72			92			393
	Other				385			389			745			744
			Total Noninterest Expense		6,023			5,419			11,788			11,412
			Income Before Income Taxes		4,593			3,420			7,599			6,203
		Income tax provision			1,437			1,105			2,164			1,932
			Net Income	$	3,156		$	2,315		$	5,435		$	4,271
Earnings per share:
	Basic			$	0.29		$	0.21		$	0.49		$	0.38
	Diluted			$	0.28		$	0.20		$	0.48		$	0.37

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Dollars in Thousands, Except Share Data)

			June 30, 2015			December 31, 2014
			(Unaudited)			(Audited)
ASSETS
	Cash and due from banks		$	1,795		$	2,763
	Interest-earning demand deposits in other banks			3,557			14,450
		Total cash and cash equivalents		5,352			17,213
	Investment securities available-for-sale			139,381			134,037
	Investment securities held-to-maturity (fair value of $162,182 at
		June 30, 2015 and $170,854 at December 31, 2014)		162,995			170,172
	Loans, net of allowance for loan losses of $10,736
		at June 30, 2015 and $10,730 at December 31, 2014		729,217			724,326
	Federal Home Loan Bank stock, at cost			6,786			6,015
	Bank-owned life insurance			15,269			15,027
	Premises and equipment, net			9,269			9,418
	Assets acquired through foreclosure			2,819			2,814
	Real estate held for investment			1,620			1,620
	Accrued interest receivable			3,118			3,147
	Mortgage servicing rights, net			102			111
	Deferred tax asset, net			4,536			4,561
	Other assets			9,506			6,155
		Total Assets	$	1,089,970		$	1,094,616

LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
	Deposits		$	715,630		$	711,909
	Short-term borrowings			64,800			50,000
	Federal Home Loan Bank advances			100,000			120,000
	Other borrowed funds			30,000			30,000
	Advances from borrowers for taxes and insurance			1,592			1,447
	Accrued interest payable			269			311
	Accrued expenses and other liabilities			3,866			5,038
		Total Liabilities		916,157			918,705
STOCKHOLDERS' EQUITY
	Preferred stock ($.01 par value; 1,000,000 shares authorized,
		none issued and outstanding at June 30, 2015 and December 31, 2014)		-			-
	Common stock ($.01 par value; 60,000,000 shares authorized,
		11,567,540 shares outstanding at June 30, 2015
		and 11,802,791 shares outstanding at December 31, 2014)		147			147
	Additional paid-in capital			139,837			139,177
	Treasury stock, at cost (3,121,701 shares at June 30, 2015 and
		2,852,572 at December 31, 2014)		(44,135	)		(39,698	)
	Common stock acquired by benefit plans			(7,201	)		(8,056	)
	Retained earnings			85,264			84,225
	Accumulated other comprehensive income, net			(99	)		116
		Total Stockholders' Equity		173,813			175,911

		Total Liabilities and Stockholders' Equity	$	1,089,970		$	1,094,616

SELECTED CONSOLIDATED FINANCIAL AND OTHER DATA OF THE COMPANY (UNAUDITED)
(Dollars in Thousands, Except Per Share Data)

			June 30, 2015			March 31, 2015			December 31, 2014			June 30, 2014
CAPITAL RATIOS:
Stockholders’ equity (to total assets) (1)			15.95	%		15.59	%		16.07	%		16.13	%

Common equity tier 1 capital ratio (to risk-weighted assets) (2)			16.86			16.28		N/A			N/A
Tier 1 leverage ratio (to adjusted average assets) (2)			13.30			13.04			13.99			13.18
Tier 1 capital ratio (to risk-weighted assets) (2)			16.86			16.28			18.97			18.59
Total capital ratio (to risk-weighted assets) (2)			17.91			17.34			20.02			19.64

ASSET QUALITY INDICATORS:
Nonperforming Assets:
	Nonaccruing loans	$	3,002		$	3,374		$	3,454		$	4,144
	Accruing loans past due 90 days or more		-			-			-			-
	Total nonperforming loans	$	3,002		$	3,374		$	3,454		$	4,144
	Assets acquired through foreclosure		2,819			2,804			2,814			2,017
	Total nonperforming assets	$	5,821		$	6,178		$	6,268		$	6,161

	Ratio of nonperforming loans to total loans		0.41	%		0.44	%		0.47	%		0.56	%
	Ratio of nonperforming assets to total assets		0.53			0.55			0.57			0.56
	Ratio of allowance for loan losses to total loans		1.45			1.46			1.46			1.57
	Ratio of allowance for loan losses to nonperforming loans		357.6			331.3			310.7			279.3
Troubled Debt Restructurings:
	Nonaccruing troubled debt restructurings (3)	$	1,331		$	1,349		$	1,401		$	282
	Accruing troubled debt restructurings		5,892			4,817			3,624			5,324
	Total troubled debt restructurings	$	7,223		$	6,166		$	5,025		$	5,606

Past Due Loans:
	30 - 59 days	$	639		$	653		$	113		$	526
	60 - 89 days		21			127			145			10
	Total	$	660		$	780		$	258		$	536

⁽¹⁾Represents stockholders’ equity ratio of Fox Chase Bancorp, Inc.
⁽²⁾Represents regulatory capital ratios of Fox Chase Bank.
⁽³⁾Nonaccruing troubled debt restructurings are included in total nonaccruing loans above

		At or for the Three Months Ended
			June 30, 2015			March 31, 2015			December 31, 2014			June 30, 2014
PERFORMANCE RATIOS (4):
	Return on average assets		1.15	%		0.83	%		0.79	%		0.85	%
	Return on average equity		7.22			5.18			4.76			5.25
	Net interest margin		3.24			3.29			3.18			3.20
	Efficiency ratio (5)		64.3			62.2			63.3			59.8
OTHER:
	Average commercial loans	$	630,577		$	615,474		$	571,875		$	571,032
	Tangible book value per share - Core (6)	$	15.03		$	14.88		$	14.89		$	14.73
	Tangible book value per share (7)	$	15.03		$	14.94		$	14.90		$	14.71
	Employees (full-time equivalents)		136			136			138			140


		At or for the Six Months Ended
			June 30, 2015			June 30, 2014
PERFORMANCE RATIOS (4):
	Average commercial loans	$	623,026		$	568,591
	Return on average assets		0.99	%		0.78	%
	Return on average equity		6.20			4.85
	Net interest margin		3.26			3.19
	Efficiency ratio (5)		63.2			62.4

⁽⁴⁾Annualized
⁽⁵⁾Represents noninterest expense, excluding valuation adjustments on assets acquired through foreclosure, 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.
⁽⁶⁾ Total stockholders’ equity, excluding the impact of accumulated other comprehensive (loss) income, net (($99,000) at June 30, 2015, $666,000 at March 31, 2015, $116,000 at December 31, 2014 and ($252,000) at June 30, 2014), divided by total shares outstanding.
⁽⁷⁾ Total stockholders’ equity divided by total shares outstanding. Tangible book value per share and book value per share were the same for all periods indicated.

AVERAGE BALANCE SHEET
(Dollars in Thousands, Unaudited)

			Three Months Ended June 30,
				2015								2014
						Interest								Interest
			Average			and		Yield/			Average			and		Yield/
			Balance			Dividends		Cost (2)			Balance			Dividends		Cost (2)
Assets:
Interest-earning assets:
	Interest-earning demand deposits		$	10,285		$	3		0.13	%	$	6,241		$	1		0.05	%
	Investment securities			309,583			1,696		2.19	%		332,940			1,947		2.34	%
	Loans (1)			749,997			8,391		4.49	%		714,243			8,130		4.56	%
	Allowance for loan losses			(11,919	)							(11,553	)
	Net loans			738,078			8,391					702,690			8,130
		Total interest-earning assets		1,057,946			10,090		3.82	%		1,041,871			10,078		3.88	%
Noninterest-earning assets				42,400								45,628
	Total assets		$	1,100,346							$	1,087,499
Liabilities and equity:
Interest-bearing liabilities:
	Interest-bearing deposits		$	585,892		$	728		0.50	%	$	560,578		$	797		0.57	%
	Borrowings			156,130			709		1.82	%		220,770			856		1.56	%
	Total interest-bearing liabilities			742,022			1,437		0.78	%		781,348			1,653		0.85	%
	Noninterest-bearing deposits			177,223								122,395
	Other noninterest-bearing liabilities			6,353								7,284
		Total liabilities		925,598								911,027
	Stockholders' equity			174,201								177,895
	Accumulated comprehensive income			547								(1,423	)
		Total stockholders' equity		174,748								176,472
		Total liabilities and stockholders' equity	$	1,100,346							$	1,087,499

	Net interest income					$	8,653							$	8,425
	Interest rate spread								3.04	%							3.03	%
	Net interest margin								3.24	%							3.20	%

(1) Nonperforming loans are included in average balance computation.
(2) Yields are not presented on a tax-equivalent basis.

AVERAGE BALANCE SHEET
(Dollars in Thousands, Unaudited)

			Three Months Ended
			June 30, 2015								March 31, 2015
						Interest								Interest
			Average			and		Yield/			Average			and		Yield/
			Balance			Dividends		Cost (2)			Balance			Dividends		Cost (2)
Assets:
Interest-earning assets:
	Interest-earning demand deposits		$	10,285		$	3		0.13	%	$	11,550		$	3		0.10	%
	Investment securities			309,583			1,696		2.19	%		311,049			1,982		2.55	%
	Loans (1)			749,997			8,391		4.49	%		742,005			8,139		4.44	%
	Allowance for loan losses			(11,919	)							(10,777	)
	Net loans			738,078			8,391					731,228			8,139
		Total interest-earning assets		1,057,946			10,090		3.82	%		1,053,827			10,124		3.88	%
Noninterest-earning assets				42,400								42,702
	Total assets		$	1,100,346							$	1,096,529
Liabilities and equity:
Interest-bearing liabilities:
	Interest-bearing deposits		$	585,892		$	728		0.50	%	$	546,465		$	715		0.53	%
	Borrowings			156,130			709		1.82	%		190,129			737		1.57	%
	Total interest-bearing liabilities			742,022			1,437		0.78	%		736,594			1,452		0.80	%
	Noninterest-bearing deposits			177,223								176,389
	Other noninterest-bearing liabilities			6,353								7,442
		Total liabilities		925,598								920,425
	Stockholders' equity			174,201								175,552
	Accumulated comprehensive income			547								552
		Total stockholders' equity		174,748								176,104
		Total liabilities and stockholders' equity	$	1,100,346							$	1,096,529

	Net interest income					$	8,653							$	8,672
	Interest rate spread								3.04	%							3.08	%
	Net interest margin								3.24	%							3.29	%

(1) Nonperforming loans are included in average balance computation.
(2) Yields are not presented on a tax-equivalent basis.

AVERAGE BALANCE SHEET
(Dollars in Thousands, Unaudited)

			Six Months Ended June 30,
				2015								2014
						Interest								Interest
			Average			and		Yield/			Average			and		Yield/
			Balance			Dividends		Cost (2)			Balance			Dividends		Cost (2)
Assets:
Interest-earning assets:
	Interest-earning demand deposits		$	10,917		$	6		0.11	%	$	6,783		$	1		0.04	%
	Investment securities			310,316			3,678		2.37	%		334,228			3,895		2.33	%
	Loans (1)			746,001			16,530		4.46	%		714,613			16,240		4.57	%
	Allowance for loan losses			(11,348	)							(11,578	)
	Net loans			734,653			16,530					703,035			16,240
		Total interest-earning assets		1,055,886			20,214		3.85	%		1,044,046			20,136		3.88	%
Noninterest-earning assets				42,551								46,043
	Total assets		$	1,098,437							$	1,090,089
Liabilities and equity:
Interest-bearing liabilities:
	Interest-bearing deposits		$	566,178		$	1,443		0.51	%	$	566,963		$	1,695		0.60	%
	Borrowings			173,130			1,446		1.68	%		218,343			1,699		1.57	%
	Total interest-bearing liabilities			739,308			2,889		0.79	%		785,306			3,394		0.87	%
	Noninterest-bearing deposits			176,806								120,801
	Other noninterest-bearing liabilities			6,897								7,952
		Total liabilities		923,011								914,059
	Stockholders' equity			174,877								178,081
	Accumulated comprehensive income			549								(2,051	)
		Total stockholders' equity		175,426								176,030
		Total liabilities and stockholders' equity	$	1,098,437							$	1,090,089

	Net interest income					$	17,325							$	16,742
	Interest rate spread								3.06	%							3.01	%
	Net interest margin								3.26	%							3.19	%

(1) Nonperforming loans are included in average balance computation.
(2) Yields are not presented on a tax-equivalent basis.

Fox Chase Bancorp, Inc. Reports Increased Earnings for the Three and Six Months Ended June 30, 2015

(Announces Additional 5% Stock Repurchase Plan)

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