Fox Chase Bancorp, Inc. Announces Earnings For The Three And Six Months Ended June 30, 2010

HATBORO, Pa., July 28, 2010 (GLOBE NEWSWIRE) -- Fox Chase Bancorp, Inc. (the "Company") (Nasdaq:FXCB), the holding company for Fox Chase Bank (the "Bank"), today announced net income of $608,000 and $1.2 million for the three and six months ended June 30, 2010, respectively, compared to net income of $298,000 and $899,000 for the three and six months ended June 30, 2009, respectively.

Highlights for the three and six month periods ended June 30, 2010 included:

• Net interest income increased $1.2 million, or 23.0%, to $6.7 million for the three months ended June 30, 2010, compared to $5.4 million for the three months ended June 30, 2009 and increased $1.9 million, or 16.8%, to $13.1 million for the six months ended June 30, 2010 from $11.2 million for the same period in 2009, primarily due to a decrease in interest expense on deposits due to maturities of higher rate certificates of deposits and repricing of other deposit products.
• Net interest income increased $253,000, or 3.9%, to $6.7 million for the three months ended June 30, 2010, compared to $6.4 million for the three months ended March 31, 2010.
• Net interest margin increased to 2.37% for the three months ended June 30, 2010 compared to 2.26% for the three months ended March 31, 2010 and 1.93% for the three months ended June 30, 2009.
• Efficiency ratio improved to 73.0% for the three months ended June 30, 2010 compared to 75.7% for the three months ended March 31, 2010 and 91.4% for the three months ended June 30, 2009.
• Provision for loan losses increased $508,000, or 89.6%, to $1.1 million for the three months ended June 30, 2010, from $567,000 for the three months ended June 30, 2009 and increased $1.0 million, or 104.4%, to $2.0 million for the six months ended June 30, 2010 from $962,000 for the same period in 2009. During the three months ended June 30, 2010, the Bank increased its specific reserves on impaired loans by $368,000 as well as increased its general reserves by $598,000 primarily due to growth in the commercial loan portfolio and continued elevated levels of classified loans.
• Provision for loan losses increased $184,000, or 20.7%, to $1.1 million for the three months ended June 30, 2010, from $891,000 for the three months ended March 31, 2010.
• Increased valuation allowance on the Bank's mortgage servicing rights of $67,000 for the three months ended June 30, 2010, compared to a reduced valuation allowance of $99,000 for the three months ended June 30, 2009 and an increased valuation allowance of $65,000 for the six months ended June 30, 2010 compared to a reduced valuation allowance of $75,000 for the same period in 2009.
• Total assets were $1.24 billion at June 30, 2010, an increase of $69.1 million, or 5.9%, from $1.17 billion at December 31, 2009, primarily due to $77.8 million in net proceeds from the Company's public offering and a $29.0 million, or 4.6%, increase in loans, offset by a $54.7 million, or 13.6%, decrease in mortgage related securities.
• Total stockholders' equity was $206.4 million at June 30, 2010, an increase of $82.7 million, or 66.9% from $123.6 million at December 31, 2009, due primarily to the effects of the second step conversion and reorganization to a fully public entity.

Credit related items as of and for the quarter ended June 30, 2010 include:

• Allowance for loan losses increased to $11.7 million, or 1.74% of total loans at June 30, 2010 compared to $10.6 million, or 1.65% of total loans at December 31, 2009;
• Allowance for loan losses to nonperforming loans was 42.1% at June 30, 2010 compared to 35.7% at December 31, 2009;
• Loan charge-offs increased $103,000 to $109,000 for the three months ended June 30, 2010 compared to $6,000 for the three months ended June 30, 2009 and increased $733,000 to $884,000 for the six months ended June 30, 2010 compared to $151,000 for the six months ended June 30, 2009. Loan charge-offs during the quarter were comprised of $50,000 related to a residential mortgage loan and $59,000 related to a second mortgage home equity loan;
• Nonperforming assets declined to $32.0 million, or 2.57% of total assets, at June 30, 2010 from $33.6 million, or 2.91% of total assets, at March 31, 2010 and $33.7 million, or 2.87% of total assets, at December 31, 2009;
• Nonperforming assets were comprised of the following asset classes at June 30, 2010 and March 31, 2010, respectively:

• construction loans for residential projects – decreased to $12.1 million from $13.0 million;

• commercial real estate loans – increased to $6.2 million from $6.1 million;

• commercial and industrial loans – decreased to $313,000 from $568,000;

• one-to-four family residential and home equity loans – increased to $9.1 million from $8.9 million; and

• assets acquired through foreclosure – decreased to $4.3 million from $5.1 million;

• Specific reserves related to nonperforming loans totaled $4.3 million at June 30, 2010, the same level as December 31, 2009; 
• Delinquent loans 30 to 89 days totaled $5.2 million at June 30, 2010, compared to $3.6 million at December 31, 2009. Of the $5.2 million in delinquent loans at June 30, 2010, $2.1 million relates to a loan that became current in July 2010.

Commenting on the second quarter 2010 performance, Thomas M. Petro, President and Chief Executive Officer of Fox Chase Bancorp said, "The completion of our second step conversion in June 2010 raised $77.8 million in additional capital and positions the Bank to execute our long-term strategic business plan, grow market share and drive earnings growth as the economy improves. While general economic conditions continue to be fragile, we did see modest improvement in the levels of nonperforming assets during the quarter. We continue to be proactive in identifying loan problems and during the quarter continued to increase our allowance for loan losses to address these issues. We are very pleased with our progress thus far, and continue to be focused on growing our loan portfolio organically while improving our margin by making the right pricing decisions and reducing our cost of funds. These initiatives will improve our profitability and increase our operating leverage in future periods."

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