First National Community Bancorp, Inc. Announces Third Quarter 2015 Net Income

DUNMORE, Pa., Oct. 30, 2015 (GLOBE NEWSWIRE) — First National Community Bancorp, Inc. (the “Company”) (OTCQX:FNCB), the parent company of Dunmore-based First National Community Bank (the “Bank”), today reported net income for the three months ended September 30, 2015 of $2.3 million, or $0.14 per basic and diluted share. Net income for the comparable period of 2014 was $3.4 million, or $0.20 per basic and diluted share. The $1.1 million decrease in third quarter earnings was primarily attributable to a decrease in non-interest income partially offset by further non-interest expense reductions, an improvement in net interest income and an increase in the credit for loan and lease losses. For the nine months ended September 30, 2015, net income was $6.6 million, or $0.40 per basic and diluted share, a decrease of $6.9 million compared to $13.5 million, or $0.82 per basic and diluted share, for the same nine months of 2014. The decrease in year-to-date earnings reflected a $3.7 million decrease in gains on the sale of investment securities, coupled with non-recurring income recorded in 2014 related to two legal settlements and a gain on the sale of the Company’s retail banking operations in Monroe County. Annualized return on average assets was 0.91% and 0.90%, respectively for the three- and nine-month periods ended September 30, 2015, compared to 1.38% and 1.85%, respectively, for the same periods of 2014. For the third quarter and year-to-date periods of 2015, annualized return on average equity was 16.38% and 15.96%, respectively, and 26.81% and 41.43%, respectively, for the comparable 2014 periods.

Third Quarter 2015 Highlights:

  • Company was released from Written Agreement with the Federal Reserve Bank of Philadelphia (“Reserve Bank”) effective September 2, 2015
  • Growth in net loans of $40.1 million, or 6.0%, from the end of the second quarter of 2015
  • Tax-equivalent net interest margin improved 22 basis points in the third quarter compared to the second quarter of 2015
  • Decrease of $4.9 million, or 19.7%, in year-to-date non-interest expense
  • Increase in tangible book value of $0.50 per share to $3.60 at September 30, 2015 from $3.10 per share at December 31, 2014

On September 8, 2015, the Company received written notification that effective September 2, 2015 it was released from the Written Agreement by the Reserve Bank. On March 25, 2015, the Company was released from the Consent Order by the Office of the Comptroller of the Currency (“OCC”). Previously the Company had been operating under the Consent Order since September 2010 and the Written Agreement since November 2010. The releases signify that the Reserve Bank and the OCC have determined that the Company and the Bank have met all of the requirements mandated by the Written Agreement and Consent Order, respectively.

“The Company achieved yet another positive milestone in the third quarter with the release from the Written Agreement,” stated Steven R. Tokach, President and Chief Executive Officer. “The Company’s non-interest expense levels continued to be positively impacted by our improved risk profile. In addition, our net interest income levels rebounded in the third quarter with strong loan growth and the effect of the 44.0% principal prepayment and rate modification from 9.00% to 4.50% of the Company’s subordinated debentures at the end of the second quarter of 2015,” concluded Mr. Tokach.

Summary Results for the Three and Nine Months Ended September 30, 2015

Net interest income before the credit for loan and lease losses increased $371 thousand, or 5.4%, to $7.2 million for the third quarter of 2015 from $6.8 million for the same period of 2014. The increase was primarily a result of lower interest expense due to the $11.0 million principal prepayment and rate modification of the Company’s subordinated debentures completed on June 30, 2015. In addition, net interest income for the third quarter of 2015 improved $0.9 million, or 13.6%, compared to the second quarter of 2015, which largely reflected increased interest income due to higher average balances of loans and investment securities, coupled with lower interest expense resulting from the principal prepayment and rate modification on the subordinated debentures. The tax-equivalent net interest margin for third quarter 2015 was 3.07%, a decrease of 11 basis points compared to the same quarter of 2014. However, the tax-equivalent net interest margin improved 22 basis points compared to 2.85% for the second quarter of 2015.

Non-interest income was $1.4 million for the three months ended September 30, 2015, a decrease of $3.0 million, or 69.0%, compared to $4.4 million for the same period of 2014. The revenue decline was due entirely to a $3.0 million decrease in net gains received on security sales. Non-interest income totaled $6.3 million for the nine months ended September 30, 2015, a decrease of $6.6 million, or 50.7%, from $12.9 million for the same nine months of 2014. The reduction in non-interest income for the year-to-date periods reflected the decrease in net gains on investment security sales, coupled with non-recurring income earned in 2014. Year-to-date net gains on the sale of securities were $2.3 million in 2015, which was $3.7 million lower than the $6.0 million in net gains on the sale of securities recorded in 2014. In addition, non-interest income for the nine months ended September 30, 2014 included $2.1 million of non-recurring income received from the settlement of judgments filed pursuant to a large commercial credit relationship resulting in the recovery of all past due interest, late charges and legal and other expenses associated with a previously charged-off commercial real estate loan relationship, and a $0.6 million net gain recorded on the divestiture of the Company’s retail banking operations in Monroe County.

For the three months ended September 30, 2015, non-interest expense decreased $1.4 million, or 17.6%, to $6.4 million, from $7.8 million for the same three months of 2014. On a year-to-date basis, non-interest expense decreased $4.8 million, or 19.7%, to $19.9 million in 2015 from $24.7 million in 2014. For both the three-month and year-to-date periods, the decrease resulted primarily from reductions in expenses of other real estate owned, regulatory assessments, legal expense professional fees and Federal Deposit Insurance Corporation (“FDIC”) insurance expense, all of which reflected improvement in the Company’s risk profile.

Asset Quality

Net charge-offs were $0.3 million and $1.4 million for the three and nine months ended September 30, 2015, respectively, compared to net charge-offs of $0.2 million for the three months ended September 30, 2014 and net recoveries of $3.5 million for the 2014 year-to-date period. Net charge-offs for the nine months ended September 30, 2015 resulted primarily from the partial charge-off of two commercial loan relationships: two construction, land acquisition and development loans to one commercial customer aggregating $0.7 million in the third quarter of 2015 and one commercial real estate loan to another commercial customer in the amount of $0.9 million in the second quarter of 2015. The net recovery position in 2014 was due largely to the previously mentioned legal settlement.

Total non-performing loans were $6.7 million at September 30, 2015, an increase of $1.0 million, or 17.1%, from $5.8 million at June 30, 2015, and $1.2 million, or 22.1%, from December 31, 2014. The ratio of non-performing loans to total loans was 0.93% at September 30, 2015 compared to 0.84% at June 30, 2015 and 0.82% at December 31, 2014. (At June 30, 2015, the most recent data available, the FDIC average for bank holding companies with assets between $1.0 billion and $3.0 billion was 0.92%.) At September 30, 2015, the Company’s allowance for loan and lease losses as a percentage of gross loans at September 30, 2015 equaled 1.36% which was comparable to that of the peer group. (The above described FDIC peer group average was 1.30% at June 30, 2015.)

Financial Condition

Total assets reached $1.1 billion at September 30, 2015, an increase of $85.2 million, or 8.8%, from $970.0 million at December 31, 2014. The Company experienced strong growth in its earning assets. Specifically, net loans grew $54.6 million, or 8.3%, to $713.3 million at September 30, 2015 from $658.7 million at December 31, 2014. In addition, available-for-sale securities increased $30.2 million, or 13.8%, to $249.2 million at the end of the third quarter of 2015 from $219.0 million at year-end 2014. Earning asset growth was funded primarily by an increase in total deposits of $56.7 million, or 7.1%, coupled with an increase in borrowed funds of $20.9 million, or 21.6%. With regard to deposit growth, interest-bearing deposits increased $28.7 million, or 4.3% from year-end 2014 to the close of the third quarter of 2015, while non-interest bearing demand deposits grew by $28.0 million, or 22.6%. The increase in interest-bearing deposits primarily reflected the attainment of a large commercial deposit relationship and normal cyclical deposit growth, partially offset by the planned runoff of higher-costing certificates of deposit generated through QwickRate®, a national deposit listing service. The increase in borrowed funds reflected an increase of $31.9 million, or 52.1%, in FHLB of Pittsburgh advances, partially offset by the $11.0 million, or 44.0%, prepayment of the Company’s subordinated debentures.

Total shareholders’ equity increased $8.2 million, or 16.0%, to $59.6 million at September 30, 2015 from $51.4 million at December 31, 2014. The capital improvement resulted primarily from net income of $6.6 million coupled with a $1.4 million increase in accumulated other comprehensive income, which resulted entirely from appreciation in the fair value of available-for-sale securities offset by the tax impact of the appreciation. At September 30, 2015, the Company’s total risk-based capital and Tier I leverage ratios were 11.20% and 6.57%, respectively. The respective ratios for the Bank at September 30, 2015 were 13.29% and 9.11%. The ratios exceeded the 10.00% and 5.00% required to be well capitalized under the prompt corrective action provisions of the Basel III capital framework for U.S. banking organizations, which became effective for the Company and the Bank on January 1, 2015.

Availability of Filings

Copies of the Company’s most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q 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. These reports, along with all of the Company’s filings with the Securities and Exchange Commission are also available on the Investor Relations page of the Company’s website, www.fncb.com/investorrelations.

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.

The Company may from time to time make written or oral “forward-looking statements,” including statements contained in the Company’s filings with the Securities and Exchange Commission (“SEC”), in its reports to shareholders, and in other communications by the Company, which are made in good faith by the Company pursuant to the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995.

These forward-looking statements include statements with respect to the Company’s beliefs, plans, objectives, goals, expectations, anticipations, estimates and intentions, that are subject to significant risks and uncertainties, and are subject to change based on various 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. The following factors, among others, could cause the Company’s financial performance to differ materially from the plans, objectives, expectations, estimates and intentions expressed in such forward-looking statements: 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 SEC.

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 report, 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 report.

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, 2014.

First National Community Bancorp, Inc.
Selected Financial Data
           
  Sept 30, Jun 30, Mar 31, Dec 31, Sept 30,
  2015 2015 2015 2014 2014
Per share data:          
Net income (fully diluted)  $ 0.14  $ 0.05  $ 0.21  $ —   $ 0.20
Cash dividends declared  $ —   $ —   $ —   $ —   $ — 
Book value  $ 3.61  $ 3.33  $ 3.38  $ 3.12  $ 3.06
Tangible book value  $ 3.60  $ 3.32  $ 3.36  $ 3.10  $ 3.03
Market value:          
High  $ 6.05  $ 6.55  $ 5.40  $ 6.65  $ 6.85
Low  $ 5.02  $ 5.15  $ 5.25  $ 5.60  $ 5.75
Close  $ 5.19  $ 6.05  $ 5.26  $ 6.00  $ 6.75
Common shares outstanding  16,500,945  16,500,945  16,500,945  16,484,419  16,471,569
           
Selected ratios:          
Annualized return on average assets 0.91% 0.34% 1.45% (0.01)% 1.38%
Annualized return on average shareholders’ equity 16.38% 5.89% 26.34% (0.24)% 26.81%
Tier I leverage ratio 6.57% 6.64% 6.57% 6.05% 6.19%
Total risk-based capital to risk-adjusted assets 11.20% 11.60% 12.96% 13.67% 13.50%
Average shareholders’ equity to average total assets 5.55% 5.73% 5.52% 5.22% 5.14%
Yield on earning assets (FTE) 3.50% 3.45% 3.48% 3.56% 3.84%
Cost of funds 0.51% 0.73% 0.75% 0.79% 0.80%
Net interest spread (FTE) 2.98% 2.72% 2.73% 2.77% 3.04%
Net interest margin (FTE) 3.07% 2.85% 2.85% 2.90% 3.18%
Total delinquent loans/total loans 1.29% 1.34% 1.10% 1.21% 1.16%
Allowance for loan and lease losses/total loans 1.36% 1.51% 1.63% 1.72% 1.76%
Non-performing loans/total loans 0.93% 0.84% 0.77% 0.82% 0.82%
Net charge-offs/average loans 0.04% 0.14% 0.01% 0.02% 0.03%
           
           
First National Community Bancorp, Inc.
Year-to-Date Consolidated Statements of Income
  Nine Months Ended
  September 30, 
(in thousands, except share data) 2015 2014
Interest income    
Interest and fees on loans  $ 19,640  $ 19,958
Interest and dividends on securities    
U.S. government agencies  3,044  2,496
State and political subdivisions, tax-free  91  1,679
State and political subdivisions, taxable  447  271
Other securities  331  206
Total interest and dividends on securities  3,913  4,652
Interest on interest-bearing deposits in other banks  42  44
Total interest income  23,595  24,654
Interest expense    
Interest on deposits  2,003  2,435
Interest on borrowed funds    
Interest on Federal Home Loan Bank of Pittsburgh advances  367  334
Interest on subordinated debentures  1,290  1,706
Interest on junior subordinated debentures   150  149
Total interest on borrowed funds  1,807  2,189
Total interest expense  3,810  4,624
Net interest income before credit for loan and lease losses  19,785  20,030
Credit for loan and lease losses  (340)  (5,629)
Net interest income after credit for loan and lease losses  20,125  25,659
Non-interest income    
Deposit service charges  2,218  2,217
Net gain on the sale of securities  2,302  6,006
Net gain on the sale of mortgage loans held for sale  69  223
Net loss on the sale of education loans  —  (13)
Net gain on the sale of other real estate owned  145  103
Gain on branch divestitures  —  607
Loan-related fees  290  292
Income from bank-owned life insurance  415  496
Legal settlements  184  2,127
Other  720  799
Total non-interest income  6,343  12,857
Non-interest expense    
Salaries and employee benefits  9,582  9,809
Occupancy expense  1,665  1,554
Equipment expense  1,234  1,068
Advertising expense  335  353
Data processing expense  1,420  1,556
Regulatory assessments  711  1,389
Bank shares tax  652  372
Expense of other real estate owned  338  2,495
Legal expense  331  1,428
Professional fees  780  1,240
Insurance expense  528  757
Other operating expenses  2,301  2,718
Total non-interest expense  19,877  24,739
Income before income taxes  6,591  13,777
(Credit) provision for income taxes  (40)  326
Net income  $ 6,631  $ 13,451
     
Income per share    
Basic  $ 0.40  $ 0.82
Diluted  $ 0.40  $ 0.82
     
Cash dividends declared per common share  $ —   $ — 
Weighted average number of shares outstanding:    
Basic 16,497,373 16,471,569
Diluted 16,497,373 16,471,851
     
     
First National Community Bancorp, Inc.
Quarter-to-Date Consolidated Statements of Income
           
  Three Months Ended
  Sept 30, Jun 30, Mar 31, Dec 31, Sept 30,
(in thousands, except share data) 2015 2015 2015 2014 2014
Interest income          
Interest and fees on loans  $ 6,693  $ 6,475  $ 6,472  $ 6,671  $ 6,852
Interest and dividends on securities          
U.S. government agencies  1,061  1,012  971  998  893
State and political subdivisions, tax-free  19  22  50  204  409
State and political subdivisions, taxable  324  97  26  53  76
Other securities  92  82  157  66  74
Total interest and dividends on securities  1,496  1,213  1,204  1,321  1,452
Interest on interest-bearing deposits in other banks  10  11  21  27  8
Total interest income  8,199  7,699  7,697  8,019  8,312
Interest expense          
Interest on deposits  677  643  683  745  751
Interest on borrowed funds          
Interest on Federal Home Loan Bank of Pittsburgh advances  128  119  120  116  125
Interest on subordinated debentures  162  565  563  575  575
Interest on junior subordinated debentures  50  51  49  87  50
Total interest on borrowed funds  340  735  732  778  750
Total interest expense  1,017  1,378  1,415  1,523  1,501
Net interest income before (credit) provision for loan and lease losses  7,182  6,321  6,282  6,496  6,811
(Credit) provision for loan and lease losses  (191)  345  (494)  (240)  (54)
Net interest income after (credit) provision for loan and lease losses  7,373  5,976  6,776  6,736  6,865
Non-interest income          
Deposit service charges  799  745  674  758  781
Net gain on the sale of securities  4  74  2,224  634  2,958
Net gain on the sale of mortgage loans held for sale  13  16  40  69  57
Net gain on the sale of other real estate owned  129  11  5  106  35
Loan-related fees  94  106  90  148  101
Income from bank-owned life insurance  145  135  135  154  165
Legal settlements  —  184  —  —  —
Other  195  274  251  194  345
Total non-interest income  1,379  1,545  3,419  2,063  4,442
Non-interest expense          
Salaries and employee benefits  3,240  3,203  3,139  3,302  3,316
Occupancy expense  500  532  633  534  438
Equipment expense  408  442  384  403  355
Data processing expense  471  501  448  532  508
Regulatory assessments  203  99  409  412  266
Bank shares tax  217  218  217  150  21
Expense of other real estate owned  91  147  100  74  514
Legal expense  80  88  163  371  268
Professional fees  193  286  301  327  306
Insurance expense  128  202  198  194  196
Other operating expenses  884  962  790  2,531  1,595
Total non-interest expense  6,415  6,680  6,782  8,830  7,783
Income before income taxes  2,337  841  3,413  (31)  3,524
Provision (Credit) for income taxes  —  22  (62)  —  166
Net income  $ 2,337  $ 819  $ 3,475  $ (31)  $ 3,358
           
Income per share          
Basic  $ 0.14  $ 0.05  $ 0.21  $ —   $ 0.20
Diluted  $ 0.14  $ 0.05  $ 0.21  $ —   $ 0.20
           
Cash dividends declared per common share  $ —   $ —   $ —   $ —   $ — 
Weighted average number of shares outstanding:          
Basic 16,500,945 16,500,945 16,490,111 16,475,899 16,471,569
Diluted 16,500,945 16,500,945 16,490,111 16,475,899 16,471,569
           
           
First National Community Bancorp, Inc.
Consolidated Balance Sheets
           
  Sept 30, Jun 30, Mar 31, Dec 31, Sept 30,
(in thousands) 2015 2015 2015 2014 2014
Assets          
Cash and cash equivalents:          
Cash and due from banks  $ 20,631  $ 22,443  $ 19,985  $ 22,657  $ 21,532
Interest-bearing deposits in other banks  10,383  49,872  17,390  13,010  18,461
Total cash and cash equivalents  31,014  72,315  37,375  35,667  39,993
Securities available for sale, at fair value  249,228  226,539  204,635  218,989  217,412
Stock in Federal Home Loan Bank of Pittsburgh at cost  4,298  2,684  3,061  2,803  4,356
Loans held for sale  4,634  138  —  603  171
Loans, net of net deferred costs and unearned income  723,166  683,588  672,165  670,267  678,160
Allowance for loan and lease losses  (9,825)  (10,328)  (10,944)  (11,520)  (11,898)
Net loans  713,341  673,260  661,221  658,747  666,262
Bank premises and equipment, net  11,258  11,059  11,221  11,003  11,094
Accrued interest receivable  2,618  2,174  2,118  2,075  2,158
Intangible assets  179  220  261  302  344
Bank-owned life insurance  29,232  29,087  28,952  28,817  28,663
Other real estate owned  1,618  1,740  2,369  2,255  2,617
Other assets  7,799  8,455  9,028  8,768  9,063
Total assets  $ 1,055,219  $ 1,027,671  $ 960,241  $ 970,029  $ 982,133
           
Liabilities          
Deposits:          
Demand (non-interest-bearing)  $ 152,038  $ 144,075  $ 134,993  $ 124,064  $ 148,430
Interest-bearing  700,004  721,293  640,118  671,272  654,766
Total deposits  852,042  865,368  775,111  795,336  803,196
Borrowed funds:          
Federal Home Loan Bank of Pittsburgh advances  93,058  57,771  67,612  61,194  68,786
Subordinated debentures  14,000  14,000  25,000  25,000  25,000
Junior subordinated debentures  10,310  10,310  10,310  10,310  10,310
Total borrowed funds  117,368  82,081  102,922  96,504  104,096
Accrued interest payable  11,187  11,344  10,788  10,262  10,515
Other liabilities  14,989  13,935  15,678  16,529  14,005
Total liabilities  995,586  972,728  904,499  918,631  931,812
           
Shareholders’ equity          
Preferred stock  —  —  —  —  —
Common stock  20,626  20,626  20,626  20,605  20,589
Additional paid-in capital  61,939  61,870  61,801  61,781  61,692
Accumulated deficit  (25,495)  (27,832)  (28,651)  (32,126)  (32,095)
Accumulated other comprehensive income  2,563  279  1,966  1,138  135
Total shareholders’ equity  59,633  54,943  55,742  51,398  50,321
Total liabilities and shareholders’ equity  $ 1,055,219  $ 1,027,671  $ 960,241  $ 970,029  $ 982,133
           
           
First National Community Bancorp, Inc.
Summary Tax-equivalent Net Interest Income
           
  Three Months Ended
  Sept 30, Jun 30, Mar 31, Dec 31, Sept 30,
(dollars in thousands) 2015 2015 2015 2014 2014
Interest income          
Loans:          
Loans – taxable  $ 6,371  $ 6,148  $ 6,148  $ 6,340  $ 6,524
Loans – tax-free  488  495  491  501  497
Total loans  6,859  6,643  6,639  6,841  7,021
Securities:          
Securities, taxable  1,477  1,191  1,154  1,117  1,043
Securities, tax-free  29  33  76  309  620
Total interest and dividends on securities  1,506  1,224  1,230  1,426  1,663
Interest-bearing deposits in other banks  10  11  21  27  8
Total interest income  8,375  7,878  7,890  8,294  8,692
Interest expense          
Deposits  677  643  683  745  751
Borrowed funds  340  735  732  778  750
Total interest expense  1,017  1,378  1,415  1,523  1,501
Net interest income  $ 7,358  $ 6,500  $ 6,475  $ 6,771  $ 7,191
           
Average balances          
Earning assets:          
Loans:          
Loans – taxable  $ 660,709  $ 637,005  $ 633,731  $ 635,146  $ 635,032
Loans – tax-free  41,746  42,225  41,125  40,477  39,849
Total loans  702,455  679,230  674,856  675,623  674,881
Securities:          
Securities, taxable  241,799  211,833  194,268  196,351  177,863
Securities, tax-free  1,707  2,007  4,283  17,055  36,246
Total interest and dividends on securities  243,506  213,840  198,551  213,406  214,109
Interest-bearing deposits in other banks  12,185  18,984  34,708  43,618  15,983
Total interest-earning assets  958,146  912,054  908,115  932,647  904,973
Non-earning assets  62,063  62,254  61,476  58,826  62,582
Total assets  $ 1,020,209  $ 974,308  $ 969,591  $ 991,473  $ 967,555
Interest-bearing liabilities:          
Deposits  $ 690,039  $ 646,656  $ 658,193  $ 675,901  $ 640,394
Borrowed funds  105,109  108,234  99,046  99,251  114,137
Total interest-bearing liabilities  795,148  754,890  757,239  775,152  754,531
Demand deposits  143,140  137,674  132,316  139,336  137,992
Other liabilities  25,303  25,964  26,525  25,278  25,337
Shareholders’ equity  56,618  55,780  53,511  51,707  49,695
Total liabilities and shareholders’ equity  $ 1,020,209  $ 974,308  $ 969,591  $ 991,473  $ 967,555
           
Yield/Cost          
Earning assets:          
Loans:          
Interest and fees on loans – taxable 3.86% 3.86% 3.88% 3.99% 4.11%
Interest and fees on loans – tax-free 4.67% 4.69% 4.78% 4.95% 4.99%
Total loans 3.91% 3.91% 3.94% 4.05% 4.16%
Securities:          
Securities, taxable 2.44% 2.25% 2.38% 2.28% 2.35%
Securities, tax-free 6.75% 6.64% 7.10% 7.25% 6.84%
Total interest and dividends on securities 2.47% 2.29% 2.48% 2.67% 3.11%
Interest on interest-bearing deposits in other banks 0.33% 0.23% 0.24% 0.25% 0.20%
Total earning assets 3.50% 3.45% 3.48% 3.56% 3.84%
Interest-bearing liabilities:          
Interest on deposits 0.39% 0.40% 0.42% 0.44% 0.47%
Interest on borrowed funds 1.29% 2.72% 2.96% 3.14% 2.63%
Total interest-bearing liabilities 0.51% 0.73% 0.75% 0.79% 0.80%
Net interest spread 2.98% 2.72% 2.73% 2.77% 3.04%
Net interest margin 3.07% 2.85% 2.85% 2.90% 3.18%
           
           
First National Community Bancorp, Inc.
Asset Quality Data
           
  Sept 30, Jun 30, Mar 31, Dec 31, Sept 30,
(in thousands) 2015 2015 2015 2014 2014
At period end          
Non-accrual loans, including non-performing troubled debt restructured loans (TDRs)  $ 6,741  $ 5,757  $ 5,184  $ 5,522  $ 5,539
Loans past due 90 days or more and still accruing  —  —  —  —  49
Total non-performing loans  6,741  5,757  5,184  5,522  5,588
Other real estate owned (OREO)  1,618  1,740  2,369  2,255  2,617
Total non-performing loans and OREO  $ 8,359  $ 7,497  $ 7,553  $ 7,777  $ 8,205
           
TDRs performing in accordance with modified terms  $ 5,065  $ 5,289  $ 5,807  $ 5,282  $ 5,326
           
           
For the three months ended          
Allowance for loan and lease losses          
Beginning balance  $ 10,328  $ 10,944  $ 11,520  $ 11,898  $ 12,175
Loans charged-off  968  1,192  277  427  359
Recoveries of charged-off loans  656  231  195  289  136
Net charge-offs  312  961  82  138  223
(Credit) provision for loan and lease losses  (191)  345  (494)  (240)  (54)
Ending balance  $ 9,825  $ 10,328  $ 10,944  $ 11,520  $ 11,898
           
CONTACT: INVESTOR CONTACT:
         James M. Bone, Jr., CPA
         Executive Vice President and
         Chief Financial Officer
         First National Community Bank
         (570) 348-6419
         james.bone@fncb.com