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On Jan. 30, 2009,

First Constitution Bancorp

(FCCY) - Get 1st Constitution Bancorp Report

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reported that its Q4 FY08 earnings plunged 63.8%, hurt by increased provision for loan losses and reduced interest income. Net income declined to $457,000 or $0.11 per share from $1.26 million or $0.30 per share in Q4 FY07. The latest quarterly earnings missed the consensus estimate of $0.16 per share.

Total interest income during Q4 FY08 fell 4.4% to $7.37 million from $7.71 million in the prior-year quarter, while interest expense inched down 1.1% to $3.19 million from $3.22 million a year ago. As a result, net interest income dipped 6.7% to $4.19 million from $4.49 million in the same quarter of the last year. Subsequently, net interest margin (on a tax-equivalent basis) contracted 93 basis points to 3.64% from 4.57%. On the flip side, noninterest income rose 18.4% to $734,000 from $620,000; whereas noninterest expenses surged 30.3% to $4.09 million from $3.14 million a year ago. Meanwhile, income before income tax shrunk 62.6% to $724,000 million from $1.94 million in the year-ago quarter.

During the latest fourth quarter, the bank's provision for loan losses more than tripled to $105,000 from $30,000. Furthermore, FCCY's efficiency ratio deteriorated, as it rose to 76.4% from 59.5%, while net charge-offs were $303,000 as of Dec. 31, 2008 compared to $10,000 as of Dec. 31, 2007, mainly led by an increase in provision for loan losses. Moreover, nonperforming loans as a percentage of total loans advanced to 0.89% from 0.69%, while allowance for loan losses to total loans came down to 0.98% from 1.14%. Finally, as on Dec. 31, 2008, total loans mounted 25.6% to $383.05 million, while total deposits climbed 25.9% to $414.69 million.

For FY08, FCCY's net income plunged 49.3% to $2.76 million or $0.65 per share from $5.44 million or $1.29 per share in FY07. Furthermore, interest income fell 4.1% to $29.12 million, while non-interest income ascended 29.0% to $3.30 million.

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