x
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Ended December 31, 2012
|
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from________ to ________
|
Maryland
|
45-1496206
|
|
(State or Other Jurisdiction of
Incorporation on Organization)
|
(IRS Employer
Identification Number)
|
|
One Farm Glen Boulevard, Farmington, CT
|
06032
|
|
(Address of Principal Executive Office)
|
(Zip Code)
|
Title of Class
|
Name of Each Exchange On Which Registered
|
|
Common Stock, par value $0.01 per share
|
The NASDAQ Global Select Market
|
Large Accelerated Filer
|
o
|
|
Accelerated Filer
|
x
|
||
Non-Accelerated Filer
|
o
|
|
Smaller Reporting Company
|
o
|
PART I
|
Page
|
||
ITEM 1.
|
Business
|
1
|
|
ITEM 1A.
|
Risk Factors
|
33
|
|
ITEM 1B.
|
Unresolved Staff Comments
|
36
|
|
ITEM 2.
|
Properties
|
37
|
|
ITEM 3.
|
Legal Proceedings
|
38
|
|
ITEM 4.
|
Mine Safety Disclosures
|
38
|
|
PART II
|
|||
ITEM 5.
|
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
|
38
|
|
ITEM 6.
|
Selected Financial Data
|
40
|
|
ITEM 7.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
42
|
|
ITEM 7A.
|
Quantitative and Qualitative Disclosures about Market Risk
|
61
|
|
ITEM 8.
|
Financial Statements and Supplementary Data
|
61
|
|
ITEM 9.
|
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
|
129
|
|
ITEM 9A.
|
Controls and Procedures
|
129
|
|
ITEM 9B.
|
Other Information
|
129
|
|
PART III
|
130
|
||
ITEM 10.
|
Directors, Executive Officers, and Corporate Governance
|
130
|
|
ITEM 11.
|
Executive Compensation
|
130
|
|
ITEM 12.
|
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
|
130
|
|
ITEM 13.
|
Certain Relationships and Related Transactions, and Director Independence
|
130
|
|
ITEM 14.
|
Principal Accountant Fees and Services
|
130
|
|
PART IV
|
|||
ITEM 15.
|
Exhibits and Financial Statement Schedules
|
130
|
|
SIGNATURES
|
133
|
At December 31, | ||||||||||||||||||||||||||||||||||||||||
2012
|
2011
|
2010
|
2009
|
2008
|
||||||||||||||||||||||||||||||||||||
Amount
|
Percent
|
Amount
|
Percent
|
Amount
|
Percent
|
Amount
|
Percent
|
Amount
|
Percent
|
|||||||||||||||||||||||||||||||
Real Estate Loans:
|
(Dollars in Thousands) | |||||||||||||||||||||||||||||||||||||||
Residential
|
$ | 620,991 | 40.5 | % | $ | 503,361 | 38.4 | % | $ | 453,557 | 38.6 | % | $ | 446,880 | 42.4 | % | $ | 385,943 | 45.9 | % | ||||||||||||||||||||
Commercial
|
473,788 | 30.9 | % | 408,169 | 31.2 | % | 361,838 | 30.8 | % | 265,515 | 25.2 | % | 201,511 | 24.0 | % | |||||||||||||||||||||||||
Construction(1)
|
64,362 | 4.2 | % | 46,381 | 3.5 | % | 46,623 | 4.0 | % | 68,704 | 6.5 | % | 59,442 | 7.1 | % | |||||||||||||||||||||||||
Installment
|
6,719 | 0.4 | % | 10,333 | 0.8 | % | 12,597 | 1.1 | % | 16,423 | 1.6 | % | 21,518 | 2.6 | % | |||||||||||||||||||||||||
Commercial
|
192,210 | 12.6 | % | 154,300 | 11.8 | % | 112,535 | 9.6 | % | 104,476 | 9.9 | % | 87,717 | 10.4 | % | |||||||||||||||||||||||||
Collateral
|
2,086 | 0.1 | % | 2,348 | 0.2 | % | 1,941 | 0.1 | % | 2,486 | 0.2 | % | 2,124 | 0.2 | % | |||||||||||||||||||||||||
Home equity line of credit
|
142,543 | 9.3 | % | 109,771 | 8.4 | % | 81,837 | 7.0 | % | 66,658 | 6.3 | % | 33,411 | 4.0 | % | |||||||||||||||||||||||||
Demand
|
25 | * | 41 | * | 227 | * | 415 | * | 627 | 0.1 | % | |||||||||||||||||||||||||||||
Revolving Credit
|
65 | * | 90 | * | 84 | * | 75 | * | 74 | * | ||||||||||||||||||||||||||||||
Resort
|
31,232 | 2.0 | % | 75,363 | 5.7 | % | 105,215 | 8.8 | % | 82,794 | 7.9 | % | 47,674 | 5.7 | % | |||||||||||||||||||||||||
Total loans
|
1,534,021 | 100.0 | % | 1,310,157 | 100.0 | % | 1,176,454 | 100.0 | % | 1,054,426 | 100.0 | % | 840,041 | 100.0 | % | |||||||||||||||||||||||||
Less:
|
||||||||||||||||||||||||||||||||||||||||
Allowance for loan losses
|
(17,229 | ) | (17,533 | ) | (20,734 | ) | (16,316 | ) | (9,952 | ) | ||||||||||||||||||||||||||||||
Net Deferred loan costs
|
3,378 | 2,553 | 2,197 | 1,885 | 1,822 | |||||||||||||||||||||||||||||||||||
Loans, net
|
$ | 1,520,170 | $ | 1,295,177 | $ | 1,157,917 | $ | 1,039,995 | $ | 831,911 |
1.
|
$27.7 million relationship consisting of commercial mortgages on five distinct properties extended to a well-known local real estate developer for the refinancing of a medical office building, construction of single-tenant office building, financing for a 78 unit apartment complex in Bristol, CT, and construction of a medical office building affiliated with the Hospital of Central Connecticut.
|
2.
|
$20.0 million revolving warehouse line of credit to a privately held mortgage company to fund conforming, pre-approved first residential mortgages which are then sold to secondary market investors.
|
3.
|
$20.0 million revolving warehouse line of credit to a privately held mortgage company to fund conforming, pre-approved first residential mortgages which are then sold to secondary market investors.
|
4.
|
$17.1 million relationship consisting of three commercial mortgages whose tenant is a national drugstore chain: one mortgage to purchase a building in Dayville, CT and two mortgages to construct buildings in Waterbury, CT and Ridgefield, CT.
|
5.
|
$17.0 million commercial mortgage loan to provide financing for the acquisition and renovation of a national chain Hotel and Conference Center located in Framingham, MA.
|
2012
|
2011
|
|||||||||||||||
Amount
|
Percent
|
Amount
|
Percent
|
|||||||||||||
Type of Commercial Real Estate Loans
|
(Dollars in thousands) | |||||||||||||||
Owner Occupied
|
$ | 136,736 | 28.9 | % | $ | 130,011 | 31.9 | % | ||||||||
Retail
|
120,215 | 25.4 | % | 89,614 | 22.0 | % | ||||||||||
Office
|
67,204 | 14.2 | % | 75,932 | 18.6 | % | ||||||||||
Industrial
|
23,836 | 5.0 | % | 20,129 | 4.9 | % | ||||||||||
Multi-Family
|
55,143 | 11.6 | % | 34,335 | 8.4 | % | ||||||||||
Land
|
6,375 | 1.3 | % | 7,339 | 1.8 | % | ||||||||||
Hotel
|
16,996 | 3.6 | % | 13,019 | 3.2 | % | ||||||||||
Other
|
47,283 | 10.0 | % | 37,790 | 9.2 | % | ||||||||||
Total
|
$ | 473,788 | 100.0 | % | $ | 408,169 | 100.0 | % |
2012
|
2011
|
|||||||||||||||
Amount
|
Percent
|
Amount
|
Percent
|
|||||||||||||
Type of Construction Loans
|
(Dollars in thousands) | |||||||||||||||
Retail
|
$ | 17,996 | 28.0 | % | $ | 15,482 | 33.4 | % | ||||||||
Office
|
15,881 | 24.7 | % | 2,830 | 6.1 | % | ||||||||||
Residential
|
10,081 | 15.7 | % | 6,002 | 12.9 | % | ||||||||||
Subdivision
|
7,200 | 11.2 | % | 12,691 | 27.4 | % | ||||||||||
Other
|
4,390 | 6.8 | % | - | 0.0 | % | ||||||||||
Multi-family
|
4,335 | 6.7 | % | 86 | 0.2 | % | ||||||||||
Subdivision speculative
|
2,829 | 4.5 | % | 3,892 | 8.4 | % | ||||||||||
Commercial owner-occupied
|
848 | 1.2 | % | 1,529 | 3.2 | % | ||||||||||
Condo
|
655 | 1.0 | % | 1,463 | 3.2 | % | ||||||||||
Contract
|
147 | 0.2 | % | 2,406 | 5.2 | % | ||||||||||
Total
|
$ | 64,362 | 100.0 | % | $ | 46,381 | 100.0 | % |
Loans Maturing During the Years Ending December 31, | ||||||||||||||||||||||||||||||||
2013
|
2014 to 2017
|
2018 and beyond
|
Total
|
|||||||||||||||||||||||||||||
Weighted
|
Weighted
|
Weighted
|
Weighted
|
|||||||||||||||||||||||||||||
Average
|
Average
|
Average
|
Average
|
|||||||||||||||||||||||||||||
Amount
|
Rate
|
Amount
|
Rate
|
Amount
|
Rate
|
Amount
|
Rate
|
|||||||||||||||||||||||||
Real Estate Loans:
|
(Dollars in Thousands) | |||||||||||||||||||||||||||||||
Residential
|
$ | 521 | 1.96 | % | $ | 5,245 | 6.17 | % | $ | 615,225 | 3.91 | % | $ | 620,991 | 3.93 | % | ||||||||||||||||
Commercial
|
9,639 | 5.48 | % | 42,935 | 3.44 | % | 421,214 | 4.23 | % | 473,788 | 4.18 | % | ||||||||||||||||||||
Construction
|
26,993 | 4.02 | % | 33,468 | 3.52 | % | 3,901 | 4.30 | % | 64,362 | 3.78 | % | ||||||||||||||||||||
Installment
|
88 | 9.15 | % | 1,798 | 6.29 | % | 4,833 | 6.23 | % | 6,719 | 6.28 | % | ||||||||||||||||||||
Commercial
|
53,845 | 3.68 | % | 86,037 | 3.55 | % | 52,328 | 4.39 | % | 192,210 | 3.81 | % | ||||||||||||||||||||
Collateral
|
- | - | - | - | 2,086 | 2.78 | % | 2,086 | 2.78 | % | ||||||||||||||||||||||
Home equity line of credit
|
1,988 | 2.83 | % | 21,453 | 3.08 | % | 119,102 | 2.70 | % | 142,543 | 2.76 | % | ||||||||||||||||||||
Demand
|
25 | 7.55 | % | - | - | - | - | 25 | 7.55 | % | ||||||||||||||||||||||
Revolving Credit
|
65 | 23.08 | % | - | - | - | - | 65 | 23.08 | % | ||||||||||||||||||||||
Resort
|
- | - | 21,500 | 5.98 | % | 9,732 | 6.00 | % | 31,232 | 5.99 | % | |||||||||||||||||||||
Total
|
$ | 93,164 | 3.96 | % | $ | 212,436 | 3.81 | % | $ | 1,228,421 | 3.95 | % | $ | 1,534,021 | 3.93 | % |
Fixed
|
Adjustable
|
Total
|
|||||||||||
Real Estate Loans:
|
(Dollars in Thousands)
|
||||||||||||
Residential
|
$ | 413,650 | $ | 206,820 | $ | 620,470 | |||||||
Commercial
|
124,151 | 339,998 | 464,149 | ||||||||||
Construction
|
12,381 | 24,988 | 37,369 | ||||||||||
Installment
|
6,631 | - | 6,631 | ||||||||||
Commercial
|
66,089 | 72,276 | 138,365 | ||||||||||
Collateral
|
19 | 2,067 | 2,086 | ||||||||||
Home equity line of credit
|
843 | 139,712 | 140,555 | ||||||||||
Demand
|
- | - | - | ||||||||||
Revolving Credit
|
- | - | - | ||||||||||
Resort
|
73 | 31,159 | 31,232 | ||||||||||
Total
|
$ | 623,837 | $ | 817,020 | $ | 1,440,857 |
Loans Delinquent For | ||||||||||||||||||||||||
60-89 Days
|
90 Days and Over
|
Total
|
||||||||||||||||||||||
Number
|
Amount
|
Number
|
Amount
|
Number
|
Amount
|
|||||||||||||||||||
At December 31, 2012
|
(Dollars in thousands)
|
|||||||||||||||||||||||
Real estate
|
||||||||||||||||||||||||
Residential
|
6 | $ | 1,663 | 16 | $ | 7,803 | 22 | $ | 9,466 | |||||||||||||||
Commercial
|
1 | 349 | 2 | 925 | 3 | 1,274 | ||||||||||||||||||
Construction
|
- | - | 1 | 419 | 1 | 419 | ||||||||||||||||||
Installment
|
- | - | 2 | 73 | 2 | 73 | ||||||||||||||||||
Commercial
|
1 | 66 | 6 | 585 | 7 | 651 | ||||||||||||||||||
Collateral
|
- | - | - | - | - | - | ||||||||||||||||||
Home equity line of credit
|
2 | 94 | 3 | 379 | 5 | 473 | ||||||||||||||||||
Demand
|
- | - | 2 | 40 | 2 | 40 | ||||||||||||||||||
Revolving Credit
|
- | - | - | - | - | - | ||||||||||||||||||
Resort
|
- | - | - | - | - | - | ||||||||||||||||||
Total
|
10 | $ | 2,172 | 32 | $ | 10,224 | 42 | $ | 12,396 | |||||||||||||||
At December 31, 2011
|
||||||||||||||||||||||||
Real estate
|
||||||||||||||||||||||||
Residential
|
4 | $ | 730 | 17 | $ | 7,926 | 21 | $ | 8,656 | |||||||||||||||
Commercial
|
- | - | 9 | 2,934 | 9 | 2,934 | ||||||||||||||||||
Construction
|
- | - | 2 | 484 | 2 | 484 | ||||||||||||||||||
Installment
|
1 | 78 | 2 | 63 | 3 | 141 | ||||||||||||||||||
Commercial
|
- | - | 8 | 802 | 8 | 802 | ||||||||||||||||||
Collateral
|
- | - | - | - | - | - | ||||||||||||||||||
Home equity line of credit
|
- | - | 6 | 1,555 | 6 | 1,555 | ||||||||||||||||||
Demand
|
- | - | 1 | 25 | 1 | 25 | ||||||||||||||||||
Revolving Credit
|
- | - | - | - | - | - | ||||||||||||||||||
Resort
|
- | - | - | - | - | - | ||||||||||||||||||
Total
|
5 | $ | 808 | 45 | $ | 13,789 | 50 | $ | 14,597 | |||||||||||||||
At December 31, 2010
|
||||||||||||||||||||||||
Real estate
|
||||||||||||||||||||||||
Residential
|
6 | $ | 4,624 | 10 | $ | 4,128 | 16 | $ | 8,752 | |||||||||||||||
Commercial
|
2 | 793 | 6 | 3,160 | 8 | 3,953 | ||||||||||||||||||
Construction
|
- | - | 2 | 897 | 2 | 897 | ||||||||||||||||||
Installment
|
- | - | 5 | 98 | 5 | 98 | ||||||||||||||||||
Commercial
|
- | - | 10 | 761 | 10 | 761 | ||||||||||||||||||
Collateral
|
- | - | - | - | - | - | ||||||||||||||||||
Home equity line of credit
|
1 | 24 | 5 | 1,843 | 6 | 1,867 | ||||||||||||||||||
Demand
|
- | - | 1 | 25 | 1 | 25 | ||||||||||||||||||
Revolving Credit
|
- | - | - | - | - | - | ||||||||||||||||||
Resort
|
- | - | - | - | - | - | ||||||||||||||||||
Total
|
9 | $ | 5,441 | 39 | $ | 10,912 | 48 | $ | 16,353 |
At December 31, | ||||||||||||||||||||
2012
|
2011
|
2010
|
2009
|
2008
|
||||||||||||||||
Non-performing loans:
|
(Dollars in thousands) | |||||||||||||||||||
Real estate loans
|
||||||||||||||||||||
Residential
|
$ | 9,194 | $ | 9,224 | $ | 5,209 | $ | 6,441 | $ | 3,049 | ||||||||||
Commercial
|
925 | 2,934 | 3,693 | 5,316 | 1,468 | |||||||||||||||
Construction
|
419 | 484 | 898 | 1,074 | 1,319 | |||||||||||||||
Installment
|
157 | 209 | 124 | 88 | 108 | |||||||||||||||
Commercial
|
2,351 | 956 | 862 | 823 | 88 | |||||||||||||||
Collateral
|
- | - | - | - | - | |||||||||||||||
Home equity line of credit
|
711 | 1,669 | 2,031 | 1,079 | 80 | |||||||||||||||
Demand
|
25 | 25 | 25 | 25 | 3 | |||||||||||||||
Revolving Credit
|
- | - | - | - | - | |||||||||||||||
Resort
|
- | - | 4,880 | - | - | |||||||||||||||
Total non-performing loans
|
13,782 | 15,501 | 17,722 | 14,846 | 6,115 | |||||||||||||||
Loans 90 days past due and still accruing
|
- | - | - | - | - | |||||||||||||||
Other real estate owned
|
549 | 302 | 238 | 422 | - | |||||||||||||||
Total nonperforming assets
|
$ | 14,331 | $ | 15,803 | $ | 17,960 | $ | 15,268 | $ | 6,115 | ||||||||||
Total non-performing loans to total loans
|
0.90 | % | 1.18 | % | 1.51 | % | 1.41 | % | 0.73 | % | ||||||||||
Total non-performing assets to total assets
|
0.76 | % | 0.96 | % | 1.25 | % | 1.18 | % | 0.56 | % |
At December 31, | ||||||||||||||||||||
2012
|
2011
|
2010
|
2009
|
2008
|
||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Restructured loans on accrual status
|
$ | 22,124 | $ | 23,515 | $ | 16,925 | $ | 5,417 | $ | - | ||||||||||
Restructured loans on non-accrual status
|
7,550 | 7,809 | 10,068 | 3,515 | - | |||||||||||||||
Total restructured loans
|
$ | 29,674 | $ | 31,324 | $ | 26,993 | $ | 8,932 | $ | - |
For the Years Ended December 31, | ||||||||||||||||||||
2012
|
2011
|
2010
|
2009
|
2008
|
||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Balance at beginning of year
|
$ | 17,533 | $ | 20,734 | $ | 16,316 | $ | 9,952 | $ | 8,124 | ||||||||||
Provision for (reversal of) loan losses
|
1,380 | 4,090 | 6,694 | 7,896 | 2,117 | |||||||||||||||
Charge-offs:
|
||||||||||||||||||||
Real estate
|
||||||||||||||||||||
Residential
|
(337 | ) | (411 | ) | (1,152 | ) | (134 | ) | (1 | ) | ||||||||||
Commercial
|
(454 | ) | (1,314 | ) | (1,138 | ) | (284 | ) | (136 | ) | ||||||||||
Construction
|
- | - | - | (246 | ) | - | ||||||||||||||
Installment
|
(9 | ) | (28 | ) | (3 | ) | (41 | ) | (4 | ) | ||||||||||
Commercial
|
(33 | ) | (517 | ) | (8 | ) | (879 | ) | (161 | ) | ||||||||||
Collateral
|
- | - | - | (1 | ) | - | ||||||||||||||
Home equity line of credit
|
(1,019 | ) | (114 | ) | - | - | - | |||||||||||||
Demand
|
- | - | (25 | ) | (20 | ) | (20 | ) | ||||||||||||
Revolving credit
|
(61 | ) | (59 | ) | (32 | ) | (34 | ) | (32 | ) | ||||||||||
Resort
|
- | (4,880 | ) | - | - | - | ||||||||||||||
Total charge-offs
|
(1,913 | ) | (7,323 | ) | (2,358 | ) | (1,639 | ) | (354 | ) | ||||||||||
Recoveries:
|
||||||||||||||||||||
Real estate
|
||||||||||||||||||||
Residential
|
9 | - | - | - | - | |||||||||||||||
Commercial
|
4 | - | 48 | - | 10 | |||||||||||||||
Construction
|
- | - | - | - | - | |||||||||||||||
Installment
|
7 | 2 | 13 | 2 | 4 | |||||||||||||||
Commercial
|
194 | 12 | 15 | 91 | 39 | |||||||||||||||
Collateral
|
- | - | - | 1 | - | |||||||||||||||
Home equity line of credit
|
- | - | - | - | - | |||||||||||||||
Demand
|
- | 18 | 6 | - | - | |||||||||||||||
Revolving credit
|
15 | - | - | 13 | 12 | |||||||||||||||
Resort
|
- | - | - | - | - | |||||||||||||||
Total recoveries
|
229 | 32 | 82 | 107 | 65 | |||||||||||||||
Net charge-offs
|
(1,684 | ) | (7,291 | ) | (2,276 | ) | (1,532 | ) | (289 | ) | ||||||||||
Allowance at end of year
|
$ | 17,229 | $ | 17,533 | $ | 20,734 | $ | 16,316 | $ | 9,952 | ||||||||||
Ratios:
|
||||||||||||||||||||
Allowance for loan losses to non-performing
|
||||||||||||||||||||
loans at end of year
|
125.01 | % | 113.11 | % | 117.00 | % | 109.90 | % | 162.75 | % | ||||||||||
Allowance for loan losses to total loans
|
||||||||||||||||||||
outstanding at end of year
|
1.12 | % | 1.34 | % | 1.76 | % | 1.54 | % | 1.18 | % | ||||||||||
Net charge-offs to average loans outstanding
|
0.12 | % | 0.61 | % | 0.21 | % | 0.17 | % | 0.04 | % |
At December 31, | ||||||||||||||||||||||||
2012 | 2011 | |||||||||||||||||||||||
% of Loans
|
% of Loans
|
|||||||||||||||||||||||
Allowance
|
% of Allowance
|
in Category
|
% of Allowance
|
in Category
|
||||||||||||||||||||
for Loan
|
for Loan
|
to Total
|
Allowance for
|
for Loan
|
to Total
|
|||||||||||||||||||
Losses
|
Losses
|
Loans
|
Loan Losses
|
Losses
|
Loans
|
|||||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||||||
Real estate
|
||||||||||||||||||||||||
Residential
|
$ | 3,778 | 21.9 | % | 40.5 | % | $ | 2,874 | 16.4 | % | 38.4 | % | ||||||||||||
Commercial
|
8,105 | 47.1 | % | 30.9 | % | 8,755 | 49.9 | % | 31.2 | % | ||||||||||||||
Construction
|
760 | 4.4 | % | 4.2 | % | 590 | 3.4 | % | 3.5 | % | ||||||||||||||
Installment
|
77 | 0.4 | % | 0.4 | % | 92 | 0.5 | % | 0.8 | % | ||||||||||||||
Commercial
|
2,654 | 15.4 | % | 12.6 | % | 2,140 | 12.2 | % | 11.8 | % | ||||||||||||||
Collateral
|
- | 0.0 | % | 0.1 | % | - | - | 0.2 | % | |||||||||||||||
Home equity line of credit
|
1,377 | 8.0 | % | 9.3 | % | 1,295 | 7.4 | % | 8.4 | % | ||||||||||||||
Demand
|
- | - | * | - | - | * | ||||||||||||||||||
Revolving credit
|
- | - | * | - | - | * | ||||||||||||||||||
Resort
|
456 | 2.7 | % | 2.0 | % | 1,787 | 10.2 | % | 5.7 | % | ||||||||||||||
Unallocated allowance
|
22 | 0.1 | % | n/a | - | - | n/a | |||||||||||||||||
Total
|
$ | 17,229 | 100.0 | % | 100.0 | % | $ | 17,533 | 100.0 | % | 100.0 | % |
At December 31, | ||||||||||||||||||||||||||||||||||||
2010 | 2009 | 2008 | ||||||||||||||||||||||||||||||||||
% of Loans
|
% of Loans
|
|||||||||||||||||||||||||||||||||||
Allowance
|
% of Allowance
|
in Category
|
% of Allowance
|
in Category
|
Allowance
|
% of
|
% of Loans in
|
|||||||||||||||||||||||||||||
for Loan
|
for Loan
|
to Total
|
Allowance for
|
for Loan
|
to Total
|
for Loan
|
Allowance for
|
Category to
|
||||||||||||||||||||||||||||
Losses
|
Losses
|
Loans
|
Loan Losses
|
Losses
|
Loans
|
Losses
|
Loan Losses
|
Total Loans
|
||||||||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||||||||||||
Real estate
|
||||||||||||||||||||||||||||||||||||
Residential
|
$ | 3,056 | 14.7 | % | 38.6 | % | $ | 2,138 | 13.1 | % | 42.4 | % | $ | 1,068 | 10.7 | % | 45.9 | % | ||||||||||||||||||
Commercial
|
7,726 | 37.3 | % | 30.8 | % | 6,890 | 42.2 | % | 25.2 | % | 3,118 | 31.3 | % | 24.0 | % | |||||||||||||||||||||
Construction
|
524 | 2.5 | % | 4.0 | % | 1,538 | 9.4 | % | 6.5 | % | 1,319 | 13.3 | % | 7.1 | % | |||||||||||||||||||||
Installment
|
115 | 0.6 | % | 1.1 | % | 124 | 0.8 | % | 1.6 | % | 433 | 4.4 | % | 2.6 | % | |||||||||||||||||||||
Commercial
|
1,564 | 7.5 | % | 9.6 | % | 2,828 | 17.3 | % | 9.9 | % | 2,749 | 27.6 | % | 10.4 | % | |||||||||||||||||||||
Collateral
|
- | - | 0.1 | % | - | - | 0.2 | % | - | - | 0.2 | % | ||||||||||||||||||||||||
Home equity line of credit
|
558 | 2.7 | % | 7.0 | % | 487 | 3.0 | % | 6.3 | % | - | - | 4.0 | % | ||||||||||||||||||||||
Demand
|
3 | * | * | 1 | * | * | - | - | 0.1 | % | ||||||||||||||||||||||||||
Revolving credit
|
- | - | * | - | - | * | - | - | * | |||||||||||||||||||||||||||
Resort
|
7,188 | 34.7 | % | 8.8 | % | 2,310 | 14.2 | % | 7.9 | % | 334 | 3.4 | % | 5.7 | % | |||||||||||||||||||||
Unallocated allowance
|
- | - | n/a | - | - | n/a | 931 | 9.3 | % | n/a | ||||||||||||||||||||||||||
Total
|
$ | 20,734 | 100.0 | % | 100.0 | % | $ | 16,316 | 100.0 | % | 100.0 | % | $ | 9,952 | 100.0 | % | 100.0 | % |
At December 31, | ||||||||||||||||||||||||
2012
|
2011
|
2010
|
||||||||||||||||||||||
Amortized
|
Amortized
|
Amortized
|
||||||||||||||||||||||
(Dollars in thousands)
|
Cost
|
Fair Value
|
Cost
|
Fair Value
|
Cost
|
Fair Value
|
||||||||||||||||||
Available-for-Sale:
|
||||||||||||||||||||||||
U.S. Treasury obligations
|
$ | 118,984 | $ | 118,980 | $ | 80,999 | $ | 80,999 | $ | 112,973 | $ | 112,975 | ||||||||||||
U.S. Government agency obligations
|
- | - | 27,003 | 27,006 | 11,004 | 11,080 | ||||||||||||||||||
Government sponsored residential
|
||||||||||||||||||||||||
mortgage-backed securities
|
9,803 | 10,603 | 19,254 | 20,545 | 30,516 | 32,294 | ||||||||||||||||||
Corporate debt securities
|
2,958 | 3,153 | 1,000 | 1,175 | 1,000 | 1,052 | ||||||||||||||||||
Trust preferred debt securities
|
- | - | 42 | 42 | 44 | 44 | ||||||||||||||||||
Preferred equity securities
|
2,100 | 1,786 | 2,100 | 1,573 | 2,110 | 1,860 | ||||||||||||||||||
Marketable equity securities
|
348 | 372 | 348 | 366 | 398 | 406 | ||||||||||||||||||
Mutual funds
|
3,585 | 3,587 | 3,439 | 3,464 | 3,280 | 3,297 | ||||||||||||||||||
Total available-for-sale
|
$ | 137,778 | $ | 138,481 | $ | 134,185 | $ | 135,170 | $ | 161,325 | $ | 163,008 | ||||||||||||
Held-to-Maturity:
|
||||||||||||||||||||||||
Government sponsored residential
|
||||||||||||||||||||||||
mortgage-backed securities
|
$ | 6 | $ | 6 | $ | 7 | $ | 7 | $ | 9 | $ | 9 | ||||||||||||
Municipal debt securities
|
- | - | 209 | 209 | 663 | 663 | ||||||||||||||||||
Trust preferred debt securities
|
3,000 | 3,000 | 3,000 | 3,000 | 3,000 | 3,000 | ||||||||||||||||||
Total held-to-maturity
|
$ | 3,006 | $ | 3,006 | $ | 3,216 | $ | 3,216 | $ | 3,672 | $ | 3,672 |
One Year or Less
|
More than One Year
|
More than Five Years
|
More than Ten Years
|
Total Securities
|
||||||||||||||||||||||||||||||||||||
Weighted-
|
Weighted-
|
Weighted-
|
Weighted-
|
Weighted-
|
||||||||||||||||||||||||||||||||||||
Average
|
Average
|
Average
|
Average
|
Average
|
||||||||||||||||||||||||||||||||||||
December 31, 2012
|
Fair Value
|
Yield
|
Fair Value
|
Yield
|
Fair Value
|
Yield
|
Fair Value
|
Yield
|
Fair Value
|
Yield
|
||||||||||||||||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||||||||||||||||||||||
Available-for-Sale:
|
||||||||||||||||||||||||||||||||||||||||
U. S. Treasury obligations
|
$ | 118,980 | * | $ | - | - | $ | - | - | $ | - | 0.00 | % | $ | 118,980 | * | ||||||||||||||||||||||||
Government-sponsored residential
|
||||||||||||||||||||||||||||||||||||||||
mortgage-backed securities
|
701 | 4.10 | % | 2,855 | 3.77 | % | 1,350 | 4.50 | % | 5,697 | 6.04 | % | $ | 10,603 | 5.10 | % | ||||||||||||||||||||||||
Corporate debt securities
|
- | - | 3,153 | 2.48 | % | - | - | - | - | 3,153 | 2.48 | % | ||||||||||||||||||||||||||||
Total debt securities available-for-sale
|
$ | 119,681 | 0.02 | % | $ | 6,008 | 3.09 | % | $ | 1,350 | 4.50 | % | $ | 5,697 | 6.04 | % | $ | 132,736 | 0.47 | % | ||||||||||||||||||||
Held-to-Maturity:
|
||||||||||||||||||||||||||||||||||||||||
Mortgage-backed securities
|
$ | - | - | $ | 6 | 11.50 | % | $ | - | - | $ | - | - | $ | 6 | 11.50 | % | |||||||||||||||||||||||
Trust preferred debt securities
|
- | - | - | - | - | - | 3,000 | 4.73 | % | 3,000 | 4.73 | % | ||||||||||||||||||||||||||||
Total debt securities held-to-maturity
|
$ | - | - | $ | 6 | 11.50 | % | $ | - | - | $ | 3,000 | 4.73 | % | $ | 3,006 | 4.74 | % | ||||||||||||||||||||||
One Year or Less
|
More than One Year
|
More than Five Years
|
More than Ten Years
|
Total Securities
|
||||||||||||||||||||||||||||||||||||
Weighted-
|
Weighted-
|
Weighted-
|
Weighted-
|
Weighted-
|
||||||||||||||||||||||||||||||||||||
Average
|
Average
|
Average
|
Average
|
Average
|
||||||||||||||||||||||||||||||||||||
December 31, 2011
|
Fair Value
|
Yield
|
Fair Value
|
Yield
|
Fair Value
|
Yield
|
Fair Value
|
Yield
|
Fair Value
|
Yield
|
||||||||||||||||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||||||||||||||||||||||
Available-for-Sale:
|
||||||||||||||||||||||||||||||||||||||||
U. S. Treasury obligations
|
$ | 80,999 | * | $ | - | - | $ | - | - | $ | - | - | $ | 80,999 | * | |||||||||||||||||||||||||
U.S. Government agency obligations
|
- | - | 27,006 | 0.68 | % | - | - | - | - | 27,006 | 0.68 | % | ||||||||||||||||||||||||||||
Government-sponsored residential
|
||||||||||||||||||||||||||||||||||||||||
mortgage-backed securities
|
80 | 5.00 | % | 11,614 | 4.08 | % | 1,101 | 4.74 | % | 7,750 | 6.01 | % | 20,545 | 4.85 | % | |||||||||||||||||||||||||
Corporate debt securities
|
- | - | 584 | 5.36 | % | 591 | 5.41 | % | - | - | 1,175 | 5.38 | % | |||||||||||||||||||||||||||
Trust preferred debt securities
|
- | - | - | - | - | - | 42 | * | 42 | * | ||||||||||||||||||||||||||||||
Total debt securities available-for-sale
|
$ | 81,079 | 0.01 | % | $ | 39,204 | 1.76 | % | $ | 1,692 | 4.98 | % | $ | 7,792 | 6.01 | % | $ | 129,767 | 0.96 | % | ||||||||||||||||||||
Held-to-Maturity:
|
||||||||||||||||||||||||||||||||||||||||
Mortgage-backed securities
|
$ | - | - | $ | 7 | 11.50 | % | $ | - | - | $ | - | - | $ | 7 | 11.50 | % | |||||||||||||||||||||||
Municipal debt securities
|
209 | 1.60 | % | - | - | - | - | - | - | 209 | 1.60 | % | ||||||||||||||||||||||||||||
Trust preferred debt securities
|
- | - | - | - | - | - | 3,000 | 4.73 | % | 3,000 | 4.73 | % | ||||||||||||||||||||||||||||
Total debt securities held-to-maturity
|
$ | 209 | 1.60 | % | $ | 7 | 11.50 | % | $ | - | - | $ | 3,000 | 4.73 | % | $ | 3,216 | 4.54 | % |
At December 31, | ||||||||||||||||||||||||
2012
|
2011
|
2010
|
||||||||||||||||||||||
Balance
|
Percent
|
Balance
|
Percent
|
Balance
|
Percent
|
|||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||
Demand deposits
|
$ | 247,586 | 18.6 | % | $ | 195,625 | 16.6 | % | $ | 152,906 | 13.7 | % | ||||||||||||
NOW accounts
|
227,205 | 17.1 | % | 189,577 | 16.1 | % | 217,151 | 19.4 | % | |||||||||||||||
Money markets
|
317,030 | 23.8 | % | 247,693 | 21.1 | % | 158,232 | 14.1 | % | |||||||||||||||
Savings accounts
|
179,290 | 13.5 | % | 157,913 | 13.4 | % | 136,256 | 12.2 | % | |||||||||||||||
Total non-time deposit accounts
|
971,111 | 73.0 | % | 790,808 | 67.2 | % | 664,545 | 59.4 | % | |||||||||||||||
Time deposits
|
359,344 | 27.0 | % | 385,874 | 32.8 | % | 453,677 | 40.6 | % | |||||||||||||||
Total deposits
|
$ | 1,330,455 | 100.0 | % | $ | 1,176,682 | 100.0 | % | $ | 1,118,222 | 100.0 | % |
At December 31, | ||||||||||||||||||||||||||||||||||||
2012
|
2011 |
2010
|
||||||||||||||||||||||||||||||||||
Weighted
|
Weighted
|
Weighted
|
||||||||||||||||||||||||||||||||||
Average
|
Average
|
Average
|
Average
|
Average
|
Average
|
|||||||||||||||||||||||||||||||
Balance
|
Interest
|
Rate
|
Balance
|
Interest
|
Rate
|
Balance
|
Interest
|
Rate
|
||||||||||||||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||||||||||||||||||
Non interest bearing deposit
|
$ | 213,697 | $ | - | - | $ | 176,459 | $ | - | - | $ | 134,924 | $ | - | - | |||||||||||||||||||||
NOW accounts
|
208,161 | 389 | 0.19 | % | 252,381 | 632 | 0.25 | % | 272,652 | 1,087 | 0.40 | % | ||||||||||||||||||||||||
Money markets
|
278,179 | 2,017 | 0.73 | % | 208,985 | 1,993 | 0.95 | % | 153,696 | 1,282 | 0.83 | % | ||||||||||||||||||||||||
Savings accounts
|
171,871 | 291 | 0.17 | % | 149,598 | 334 | 0.22 | % | 132,677 | 341 | 0.26 | % | ||||||||||||||||||||||||
Time deposits
|
367,380 | 3,994 | 1.09 | % | 419,084 | 4,706 | 1.12 | % | 430,934 | 5,619 | 1.30 | % | ||||||||||||||||||||||||
Total interest bearing deposit
|
1,025,591 | $ | 6,691 | 0.65 | % | 1,030,048 | $ | 7,665 | 0.74 | % | 989,959 | $ | 8,329 | 0.84 | % | |||||||||||||||||||||
Total deposits
|
$ | 1,239,288 | $ | 1,206,507 | $ | 1,124,883 |
At December 31, 2012 | ||||||||||||||||||||||||||||||||
Period to Maturity |
Total at December 31,
|
|||||||||||||||||||||||||||||||
Two to
|
More than
|
|||||||||||||||||||||||||||||||
Less Than
|
One to
|
Three
|
Three
|
Percent of
|
||||||||||||||||||||||||||||
One Year
|
Two Years
|
Years
|
Years
|
Total
|
Total
|
2011
|
2010
|
|||||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||||||||
Interest Rate Range:
|
||||||||||||||||||||||||||||||||
1.00% and below
|
$ | 207,230 | $ | 21,974 | $ | 3,937 | $ | 28 | $ | 233,169 | 64.9 | % | $ | 230,431 | $ | 250,346 | ||||||||||||||||
1.01% - 2.00%
|
26,589 | 15,753 | 6,471 | 8,778 | 57,591 | 16.0 | % | 85,028 | 130,908 | |||||||||||||||||||||||
2.01% - 3.00%
|
5,639 | 10,558 | 15,126 | 36,768 | 68,091 | 18.9 | % | 68,000 | 64,459 | |||||||||||||||||||||||
3.01% - 4.00%
|
338 | - | 155 | - | 493 | 0.2 | % | 1,934 | 5,163 | |||||||||||||||||||||||
4.01% - 5.00%
|
- | - | - | - | - | 0.0 | % | 481 | 1,331 | |||||||||||||||||||||||
5.01% - 6.00%
|
- | - | - | - | - | 0.0 | % | - | 1,470 | |||||||||||||||||||||||
Total
|
$ | 239,796 | $ | 48,285 | $ | 25,689 | $ | 45,574 | $ | 359,344 | 100.0 | % | $ | 385,874 | $ | 453,677 |
Maturity | ||||||||||||||||||||||||
Three months
|
Over three to
|
Over six to
|
Over one year
|
Over three
|
||||||||||||||||||||
or less
|
six months
|
twelve months
|
to three years
|
Years
|
Total
|
|||||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||||||
Time deposits less than $100,000
|
$ | 55,882 | $ | 50,053 | $ | 36,110 | $ | 46,377 | $ | 19,652 | $ | 208,074 | ||||||||||||
Time deposits of $100,000 or more
|
35,292 | 38,326 | 24,133 | 27,597 | 25,922 | 151,270 | ||||||||||||||||||
$ | 91,174 | $ | 88,379 | $ | 60,243 | $ | 73,974 | $ | 45,574 | $ | 359,344 |
Years Ended December 31,
|
||||||||||||
2012
|
2011
|
2010
|
||||||||||
(Dollars in thousands)
|
||||||||||||
Balance beginning of period
|
$ | 981,057 | $ | 965,316 | $ | 870,591 | ||||||
Net increase in deposits before interest credited
|
95,121 | 8,076 | 86,396 | |||||||||
Interest credited
|
6,691 | 7,665 | 8,329 | |||||||||
Net increase in deposits
|
101,812 | 15,741 | 94,725 | |||||||||
Balance end of period
|
$ | 1,082,869 | $ | 981,057 | $ | 965,316 |
Branch
|
Address
|
Owned or Leased
|
|||
Avon West
|
427 West Avon Road, Avon, CT 06001
|
Lease (Expires 2019)
|
|||
Avon 44
|
310 West Main Street, Avon, CT 06001
|
Own
|
|||
Berlin
|
1191 Farmington Avenue, Berlin, CT 06037
|
Lease (Expires 2020)
|
|||
Bristol
|
475 Broad Street, Bristol, CT 06010
|
Own
|
|||
Burlington
|
253 Spielman Highway, Burlington, CT 06013
|
Own
|
|||
Main Street
|
32 Main Street, Farmington, CT 06032
|
Own
|
|||
Gables
(1) (3)
|
20 Devonwood Drive, Farmington, CT 06032
|
n/a
|
|||
Village Gate
(1) (3)
|
88 Scott Swamp Road, Farmington, CT 06032
|
n/a
|
|||
Westwoods
|
282 Scotts Swamp Road, Farmington, CT 06032
|
Own
|
|||
Westfarms
|
550 South Road, Farmington, CT 06032
|
Lease (Expires 2016)
|
|||
Farm Glen
(1)(2)
|
One Farm Glen Boulevard, Farmington, CT 06032
|
Lease (Expires 2019)
|
|||
Glastonbury
|
669 Hebron Avenue, Glastonbury, CT 06033
|
Own
|
|||
New Britain
|
73 Broad Street, New Britain, CT 06053
|
Own
|
|||
Plainville - Route 10
|
117 East Street, Plainville, CT 06062
|
Lease (Expires 2015)
|
|||
Plainville 372
|
129 New Britain Avenue, Plainville, CT 06062
|
Lease (Expires 2025)
|
|||
Southington
|
One Center Street, Southington, CT 06489
|
Lease (Expires 2015)
|
|||
Southington Drive-Thru
(1)
|
17 Center Place, Southington, CT 06489
|
Lease (Expires 2014)
|
|||
Unionville
|
1845 Farmington Avenue, Unionville, CT 06085
|
Own
|
|||
West Hartford
|
962 Farmington Avenue, West Hartford, CT 06110
|
Lease (Expires 2014)
|
|||
Elmwood
|
176 Newington Road, West Hartford, CT 06110
|
Lease (Expires 2026)
|
|||
Wethersfield
|
486 Silas Deane Highway, Wethersfield, CT 06129
|
Own
|
|||
Bloomfield
|
782 Park Avenue, Bloomfield, CT 06002
|
Lease (Expires 2022)
|
|||
South Windsor
|
350 Buckland Road, South Windsor, CT 06074
|
Lease (Expires 2032)
|
|||
Newington
|
1095 Main Street, Newington, CT 06111
|
Lease (Expires 2033)
|
(1) Limited Service Office
|
|
(2) Executive Office
|
|
(3) Bank provided space at no cost.
|
Cash
|
|||||||||||||
Dividend
|
|||||||||||||
Quarter Ended
|
High
|
Low
|
Declared
|
||||||||||
December 31, 2012
|
$ | 13.75 | $ | 13.50 | $ | 0.03 | |||||||
September 30, 2012
|
13.60 | 13.49 | 0.03 | ||||||||||
June 30, 2012
|
13.45 | 13.16 | 0.03 | ||||||||||
March 31, 2012
|
13.41 | 12.99 | 0.03 | ||||||||||
December 31, 2011
|
13.60 | 11.14 | 0.03 | ||||||||||
September 30, 2011
|
11.32 | 10.34 | - | ||||||||||
June 30, 2011
*
|
11.08 | 11.08 | - | ||||||||||
March 31, 2011
|
n/a | n/a | - |
(d) Maximum Number
|
||||||||||||||||
(a) Total
|
(c) Total Number of
|
(or Approximate Dollar
|
||||||||||||||
Number of
|
(b) Average
|
Shares (or Units)
|
Value) of Shares (or
|
|||||||||||||
Shares
|
Price Paid
|
Purchased as Part of
|
Units) that May Yet Be
|
|||||||||||||
(or Units)
|
per Share
|
Publicly Announced
|
Purchased Under the
|
|||||||||||||
Period
|
Purchased
|
(or Unit)
|
Plans or Programs
|
Plans or Programs
|
||||||||||||
October 1-31, 2012
|
- | $ | - | 577,322 | 1,210,698 | |||||||||||
November 1-30, 2012
|
209,020 | $ | 13.52 | 786,342 | 1,001,678 | |||||||||||
December 1-31, 2012
|
63,095 | $ | 13.64 | 849,437 | 938,583 |
At December 31, | ||||||||||||||||||||
2012
|
2011
|
2010
|
2009
|
2008
|
||||||||||||||||
Selected Financial Condition Data:
|
(Dollars in thousands) | |||||||||||||||||||
Total assets
|
$ | 1,822,946 | $ | 1,617,650 | $ | 1,416,630 | $ | 1,255,186 | $ | 1,094,387 | ||||||||||
Cash and cash equivalents
|
50,641 | 90,296 | 18,608 | 28,299 | 31,732 | |||||||||||||||
Held to maturity securities
|
3,006 | 3,216 | 3,672 | 3,010 | 3,011 | |||||||||||||||
Available for sale securities
|
138,481 | 135,170 | 163,008 | 121,350 | 178,104 | |||||||||||||||
Federal Home Loan Bank of Boston stock
|
8,939 | 7,449 | 7,449 | 7,449 | 7,420 | |||||||||||||||
Loans receivable, net
|
1,520,170 | 1,295,177 | 1,157,917 | 1,039,995 | 831,911 | |||||||||||||||
Deposits
|
1,330,455 | 1,176,682 | 1,118,222 | 1,002,780 | 811,848 | |||||||||||||||
Federal Home Loan Bank advances
|
128,000 | 63,000 | 71,000 | 62,000 | 117,000 | |||||||||||||||
Total stockholders' equity
|
241,522 | 251,980 | 94,993 | 93,673 | 90,663 | |||||||||||||||
Allowance for loan losses
|
17,229 | 17,533 | 20,734 | 16,316 | 9,952 | |||||||||||||||
Non-performing loans
(*)
|
13,782 | 15,501 | 17,722 | 14,846 | 6,115 | |||||||||||||||
(*)
Non-performing loans include loans for which Farmington Bank does not accrue interest (non-accrual loans) and loans 90 days past due and still accruing
interest.
|
||||||||||||||||||||
2012 | 2011 | 2010 | 2009 | 2008 | ||||||||||||||||
Selected Operating Data:
|
(Dollars in thousands) | |||||||||||||||||||
Interest income
|
$ | 62,860 | $ | 59,025 | $ | 60,901 | $ | 57,917 | $ | 55,718 | ||||||||||
Interest expense
|
9,628 | 10,826 | 11,613 | 17,408 | 22,605 | |||||||||||||||
Net Interest Income
|
53,232 | 48,199 | 49,288 | 40,509 | 33,113 | |||||||||||||||
Provision for allowances for loan losses
|
1,380 | 4,090 | 6,694 | 7,896 | 2,117 | |||||||||||||||
Net interest income after provision for loan losses
|
51,852 | 44,109 | 42,594 | 32,613 | 30,996 | |||||||||||||||
Noninterest income
|
9,490 | 5,688 | 7,051 | 3,693 | (560 | ) | ||||||||||||||
Noninterest expense, excluding contribution
|
||||||||||||||||||||
to charitable foundation
(**)
|
56,078 | 49,435 | 42,674 | 34,747 | 27,343 | |||||||||||||||
Contribution to charitable foundation
(**)
|
- | 6,877 | - | 495 | 534 | |||||||||||||||
Total noninterest expense
|
56,078 | 56,312 | 42,674 | 35,242 | 27,877 | |||||||||||||||
Income (loss) before income taxes
|
5,264 | (6,515 | ) | 6,971 | 1,064 | 2,559 | ||||||||||||||
Income tax expense (benefit)
|
1,341 | (2,475 | ) | 2,102 | 175 | 613 | ||||||||||||||
Net income (loss)
|
3,923 | (4,040 | ) | 4,869 | 889 | 1,946 |
At or For the Years Ended December 31, | ||||||||||||||||||||
2012
|
2011
|
2010
|
2009
|
2008
|
||||||||||||||||
Selected Financial Ratios and Other Data:
|
||||||||||||||||||||
Performance Ratios:
|
(Dollars in thousands, except per share amounts) | |||||||||||||||||||
Return on average assets
|
0.23 | % | (0.26 | )% | 0.35 | % | 0.07 | % | 0.19 | % | ||||||||||
Return on average equity
|
1.58 | % | (2.24 | )% | 4.95 | % | 0.95 | % | 2.13 | % | ||||||||||
Interest rate spread
(1)
|
3.16 | % | 3.05 | % | 3.61 | % | 3.30 | % | 2.94 | % | ||||||||||
Net interest margin
(2)
|
3.35 | % | 3.23 | % | 3.75 | % | 3.57 | % | 3.40 | % | ||||||||||
Non-interest expense to average assets
|
3.29 | % | 3.57 | % | 3.05 | % | 2.94 | % | 2.69 | % | ||||||||||
Efficiency Ratio
(3)
|
89.41 | % | 104.50 | % | 75.75 | % | 79.73 | % | 85.64 | % | ||||||||||
Efficiency ratio, excluding foundation contribution
|
89.41 | % | 91.74 | % | 75.75 | % | 78.61 | % | 84.00 | % | ||||||||||
Average interest-earning assets to average
|
||||||||||||||||||||
interest-bearing liabilities
|
132.09 | % | 125.26 | % | 115.46 | % | 117.12 | % | 119.43 | % | ||||||||||
Asset Quality Ratios:
|
||||||||||||||||||||
Allowance for loan losses as a percent of total loans
|
1.12 | % | 1.34 | % | 1.76 | % | 1.54 | % | 1.18 | % | ||||||||||
Allowance for loan losses as a percent
|
||||||||||||||||||||
of non-performing loans
|
125.01 | % | 113.11 | % | 117.00 | % | 109.90 | % | 162.75 | % | ||||||||||
Net charge-offs to average loans
|
0.12 | % | 0.61 | % | 0.21 | % | 0.17 | % | 0.04 | % | ||||||||||
Non-performing loans as a percent of total loans
|
0.90 | % | 1.18 | % | 1.51 | % | 1.41 | % | 0.73 | % | ||||||||||
Non-performing loans as a percent of total assets
|
0.76 | % | 0.96 | % | 1.25 | % | 1.18 | % | 0.56 | % | ||||||||||
Per Share Related Data:
|
||||||||||||||||||||
Basic and diluted earnings per share
(5)
|
$ | 0.24 | $ | (0.29 | ) | n/a | n/a | n/a | ||||||||||||
Dividends per share
|
$ | 0.12 | $ | 0.03 | n/a | n/a | n/a | |||||||||||||
Dividend ratio payout
|
50.00 | % | (10.34 | )% | n/a | n/a | n/a | |||||||||||||
Capital Ratios:
|
||||||||||||||||||||
Equity to total assets at end of period
|
13.25 | % | 15.58 | % | 6.71 | % | 7.46 | % | 8.28 | % | ||||||||||
Average equity to average assets
|
14.55 | % | 11.45 | % | 7.05 | % | 7.80 | % | 8.83 | % | ||||||||||
Tier I capital to risk-weighted assets
|
17.53 | % | 21.13 | % | 9.02 | % | 9.23 | % | 11.28 | % | ||||||||||
Tier I capital to total average assets
|
13.88 | % | 15.51 | % | 6.48 | % | 7.37 | % | 8.31 | % | ||||||||||
Total capital to risk-weighted assets
|
18.78 | % | 22.38 | % | 10.28 | % | 10.48 | % | 12.53 | % | ||||||||||
Total capital to total average assets
|
14.16 | % | 15.98 | % | 6.80 | % | 7.82 | % | 8.76 | % | ||||||||||
Other Data:
|
||||||||||||||||||||
Number of full service offices
|
19 | 17 | 15 | 12 | 12 | |||||||||||||||
Number of limited service offices
|
4 | 4 | 4 | 4 | 4 | |||||||||||||||
(1)
|
Represents the difference between the weighted-average yield on average interest-earning assets and the weighted-average cost of the
interest-bearing liabilities.
|
(2)
|
Represents net interest income as a percent of average interest-earning assets
|
(3)
|
Represents non-interest expense divided by the sum of net interest income and non-interest income
|
(4)
|
Represents dividends per share divided by basic earnings per share.
|
(5)
|
Net loss per share for the year ended December 31, 2011 reflects earnings for the period from June 29, 2011, the date the Company completed
a Plan of Conversion and Reorganization to December 31, 2011.
|
|
●
|
Strong Regulatory Capital Ratios: Our total Risk Based Capital rate at December 31, 2012 is 18.78%. The minimum ratio to remain Well Capitalized is 10.00%. Our total Leverage Ratio or Tier I Capital Ratio at December 31, 2012 is 13.88%. The minimum ratio to remain Well Capitalized is 5.00%.
|
|
●
|
Strong Asset Growth: Total assets increased $205.3 million or 12.7% to $1.8 billion at December 31, 2012.
|
|
●
|
Strong Loan Growth: Total loans increased $223.9 million or 17.1% to $1.5 billion at December 31, 2012. This growth was achieved despite resort loans decreasing $44.1 million or 59% for the year ended December 31, 2012.
|
|
●
|
Critical loan portfolios experienced very strong loan growth. Growth rates are as follows: Commercial Real Estate 16.1%, Commercial Loans 24.6%, Real Estate Construction 38.8%, Residential Real Estate 23.4% and Home Equity Line of Credit 29.9%.
|
|
●
|
Core (Critical) Deposits experienced very strong growth. Growth rates are as follows: Savings 13.5%, Money markets 28.0% and Non-interest bearing deposits 26.6%.
|
|
●
|
Checking accounts grew by 17% or 5,066 net new accounts for the year ended December 31, 2012.
|
|
●
|
On December 27, 2012, the Company announced the freeze of its non-contributory defined benefit and other post-retirement plans effective February 28, 2013 limiting future growth in the Company’s pension and other post-retirement liabilities. As a result, the Company recognized a $1.4 million reduction in pension and other post-retirement benefit expenses related to unrecognized prior service costs for the quarter ended December 31, 2012. For 2013, it is expected the net incremental decrease in pension and other post-retirement expenses will be approximately $606,000.
|
|
●
|
The Company implemented the First Connecticut Bancorp, Inc. 2012 Stock Incentive Plan which will allow us to retain and attract the resources needed to attain our strategic goals.
|
●
|
Maintaining a strong capital position in excess of the well-capitalized standards set by our banking regulators to support our current operations and future growth
. The FDIC’s requirement for a “well-capitalized” bank is a total risk-based capital ratio of 10.0% or greater. As of December 31, 2012 our total risk-based capital ratio was 18.58%.
|
●
|
Increasing our focus on commercial lending and continuing to expand commercial banking operations.
We will continue to focus on commercial lending and the origination of commercial loans using prudent lending standards. We plan to continue to grow our commercial lending portfolio, while enhancing our complementary business products and services.
|
●
|
Continuing to focus on residential and consumer lending and the implementation of our secondary market residential lending program.
We offer traditional residential and consumer lending products and plan to continue to build a strong residential and consumer lending program that supports our secondary market residential lending program. Under our expanding secondary market residential lending program, we may sell a portion of our fixed rate residential originations while retaining the loan servicing function mitigating our interest rate risk .
|
●
|
Maintaining asset quality and prudent lending standards.
We will continue to originate all loans utilizing prudent lending standards in an effort to maintain strong asset quality. While our delinquencies and charge-offs have decreased we continue to diligently manage our collection function to minimize loan losses and non-performing assets. We will continue to employ sound risk management practices as we continue to expand our lending portfolio.
|
●
|
Expanding our existing products and services and developing new products and services to meet the changing needs of consumers and businesses in our market area.
We will continue to evaluate our consumer and business customers’ needs to ensure that we continue to offer relevant, up-to-date products and services such as our mobile banking app which was released in 2012.
|
●
|
Continuing expansion through de novo branching
. Farmington Bank opened new branch offices in Bloomfield and South Windsor, Connecticut in 2012 and Newington, Connecticut in February 2013. We anticipate opening our 21st new branch office in East Hartford, Connecticut in the third quarter of 2013. We intend to continue to explore opportunities to expand our branch network that are consistent with our strategic growth plans.
|
●
|
Continuing to control non-interest expenses
. As part of our strategic plan, we have implemented several programs designed to control costs. We monitor our expense ratios and plan to reduce our efficiency ratio by controlling expenses and increasing net interest income and noninterest income. We plan to continue to evaluate and improve the effectiveness of our business processes and our efficiency, utilizing information technology when possible.
|
●
|
Taking advantage of acquisition opportunities that are consistent with our strategic growth plans.
In addition to de novo branching, we intend to continue to evaluate opportunities to acquire other financial institutions and financial service related businesses in our current market area or contiguous market areas that will enable us to enhance our existing products and services and develop new products and services. We have no specific plans, agreements or understandings with respect to any expansion or acquisition opportunities.
|
Risk-free interest rate
|
0.82 | % | ||
Expected volatility
|
33.69 | % | ||
Expected dividend yield
|
1.78 | % | ||
Expected life of options granted
|
6.0 years
|
For the Years Ended December 31, | ||||||||||||||||
2012 | 2011 | $ Change |
% Change
|
|||||||||||||
(Dollars in thousands)
|
||||||||||||||||
Net interest income
|
$ | 53,232 | $ | 48,199 | $ | 5,033 | 10.4 | % | ||||||||
Provision for loan losses
|
1,380 | 4,090 | (2,710 | ) | (66.3 | ) | ||||||||||
Non-interest income
|
9,490 | 5,688 | 3,802 | 66.8 | ||||||||||||
Non-interest expense
|
56,078 | 56,312 | (234 | ) | (0.4 | ) | ||||||||||
Income (loss) before taxes
|
5,264 | (6,515 | ) | 11,779 | (180.8 | ) | ||||||||||
Income tax expense (benefit)
|
1,341 | (2,475 | ) | 3,816 | (154.2 | ) | ||||||||||
Net income (loss)
|
$ | 3,923 | $ | (4,040 | ) | $ | 7,963 | (197.1 | ) % |
For the Years Ended December 31,
|
||||||||||||||||
2012
|
2011
|
$ Change
|
% Change
|
|||||||||||||
(Dollars in thousands)
|
||||||||||||||||
Fees for customer services
|
$ | 3,714 | $ | 3,355 | $ | 359 | 10.7 | % | ||||||||
Net gain on sales of investments
|
- | 89 | (89 | ) | (100.0 | ) | ||||||||||
Net gain on loans sold
|
3,151 | 671 | 2,480 | 369.6 | ||||||||||||
Brokerage and insurance fee income
|
123 | 189 | (66 | ) | (34.9 | ) | ||||||||||
Bank owned life insurance income
|
1,537 | 725 | 812 | 112.0 | ||||||||||||
Other
|
965 | 659 | 306 | 46.4 | ||||||||||||
Total noninterest income
|
$ | 9,490 | $ | 5,688 | $ | 3,802 | 66.8 | % |
For the Years Ended December 31,
|
||||||||||||||||
2012
|
2011
|
$ Change
|
% Change
|
|||||||||||||
(Dollars in thousands)
|
||||||||||||||||
Salaries and employee benefits
|
$ | 32,828 | $ | 28,605 | $ | 4,223 | 14.8 | % | ||||||||
Occupancy expense
|
4,491 | 4,534 | (43 | ) | (0.9 | ) | ||||||||||
Furniture and equipment expense
|
4,381 | 4,047 | 334 | 8.3 | ||||||||||||
FDIC assessment
|
1,170 | 1,466 | (296 | ) | (20.2 | ) | ||||||||||
Marketing
|
2,455 | 2,474 | (19 | ) | (0.8 | ) | ||||||||||
Contribution to Farmington Bank
|
||||||||||||||||
Community Foundation, Inc.
|
- | 6,877 | (6,877 | ) | (100.0 | ) | ||||||||||
Other operating expenses
|
10,753 | 8,309 | 2,444 | 29.4 | ||||||||||||
Total noninterest expense
|
$ | 56,078 | $ | 56,312 | $ | (234 | ) | (0.4 | )% |
For the Years Ended December 31,
|
||||||||||||||||
2011
|
2010
|
$ Change
|
% Change
|
|||||||||||||
(Dollars in thousands)
|
||||||||||||||||
Net interest income
|
$ | 48,199 | $ | 49,288 | $ | (1,089 | ) | (2.2 | )% | |||||||
Provision for loan losses
|
4,090 | 6,694 | (2,604 | ) | (38.9 | ) | ||||||||||
Non-interest income
|
5,688 | 7,051 | (1,363 | ) | (19.3 | ) | ||||||||||
Non-interest expense
|
56,312 | 42,674 | 13,638 | 32.0 | ||||||||||||
Income before taxes
|
(6,515 | ) | 6,971 | (13,486 | ) | (193.5 | ) | |||||||||
Income tax (benefit) expense
|
(2,475 | ) | 2,102 | (4,577 | ) | (217.7 | ) | |||||||||
Net (loss) income
|
$ | (4,040 | ) | $ | 4,869 | $ | (8,909 | ) | (183.0 | )% |
For the Years Ended December 31,
|
||||||||||||||||
2011
|
2010
|
$ Change
|
% Change
|
|||||||||||||
(Dollars in thousands)
|
||||||||||||||||
Other-than-temporary impairment
|
||||||||||||||||
losses on securities
|
$ | - | $ | - | $ | - | ||||||||||
Fees for customer services
|
3,355 | 3,061 | 294 | 9.6 | % | |||||||||||
Net gain on sales of investments
|
89 | 1,686 | (1,597 | ) | (94.7 | ) | ||||||||||
Net gain on loans sold
|
671 | 822 | (151 | ) | (18.4 | ) | ||||||||||
Brokerage and insurance fee income
|
189 | 377 | (188 | ) | (49.9 | ) | ||||||||||
Bank owned life insurance income
|
725 | 667 | 58 | 8.7 | ||||||||||||
Other
|
659 | 438 | 221 | 50.5 | ||||||||||||
Total noninterest income
|
$ | 5,688 | $ | 7,051 | $ | (1,363 | ) | (19.3 | )% |
For the Years Ended December 31,
|
||||||||||||||||
2011
|
2010
|
$ Change
|
% Change
|
|||||||||||||
(Dollars in thousands)
|
||||||||||||||||
Salaries and employee benefits
|
$ | 28,605 | $ | 23,221 | $ | 5,384 | 23.2 | % | ||||||||
Occupancy expense
|
4,534 | 4,142 | 392 | 9.5 | ||||||||||||
Furniture and equipment expense
|
4,047 | 4,022 | 25 | 0.6 | ||||||||||||
FDIC assessment
|
1,466 | 1,760 | (294 | ) | (16.7 | ) | ||||||||||
Marketing
|
2,474 | 2,583 | (109 | ) | (4.2 | ) | ||||||||||
Contribution to Farmington Bank
|
||||||||||||||||
Community Foundation, Inc.
|
6,877 | - | 6,877 | 100.0 | ||||||||||||
Other operating expenses
|
8,309 | 6,946 | 1,363 | 19.6 | ||||||||||||
Total noninterest expense
|
$ | 56,312 | $ | 42,674 | $ | 13,638 | 32.0 | % |
For The Years Ended December 31,
|
||||||||||||||||||||||||||||||||||||
2012
|
2011
|
2010
|
||||||||||||||||||||||||||||||||||
Average Balance
|
Interest and
Dividends
|
Yield/Cost
|
Average Balance
|
Interest and
Dividends
|
Yield/Cost
|
Average Balance
|
Interest and
Dividends
|
Yield/Cost
|
||||||||||||||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||||||||||||||||||
Interest-earning assets:
|
||||||||||||||||||||||||||||||||||||
Loans, net
|
$ | 1,410,822 | 61,312 | 4.35 | % | $ | 1,194,804 | 56,883 | 4.76 | % | $ | 1,095,848 | 56,131 | 5.12 | % | |||||||||||||||||||||
Securities
|
136,302 | 1,443 | 1.06 | % | 152,213 | 1,823 | 1.20 | % | 139,824 | 4,620 | 3.30 | % | ||||||||||||||||||||||||
Federal Home Loan Bank of Boston stock
|
7,714 | 37 | 0.48 | % | 7,449 | 16 | 0.21 | % | 7,449 | - | 0.00 | % | ||||||||||||||||||||||||
Federal funds and other earning assets
|
33,521 | 68 | 0.20 | % | 135,973 | 303 | 0.22 | % | 70,991 | 150 | 0.21 | % | ||||||||||||||||||||||||
Total interest-earning assets
|
1,588,359 | 62,860 | 3.96 | % | 1,490,439 | 59,025 | 3.96 | % | 1,314,112 | 60,901 | 4.63 | % | ||||||||||||||||||||||||
Noninterest-earning assets
|
117,209 | 86,446 | 82,986 | |||||||||||||||||||||||||||||||||
Total assets
|
$ | 1,705,568 | $ | 1,576,885 | $ | 1,397,098 | ||||||||||||||||||||||||||||||
Interest-bearing liabilities:
|
||||||||||||||||||||||||||||||||||||
NOW accounts
|
$ | 208,161 | 389 | 0.19 | % | $ | 252,381 | 632 | 0.25 | % | $ | 272,652 | 1,087 | 0.40 | % | |||||||||||||||||||||
Money market
|
278,179 | 2,017 | 0.73 | % | 208,985 | 1,993 | 0.95 | % | 153,696 | 1,282 | 0.83 | % | ||||||||||||||||||||||||
Savings accounts
|
171,871 | 291 | 0.17 | % | 149,598 | 334 | 0.22 | % | 132,677 | 341 | 0.26 | % | ||||||||||||||||||||||||
Certificates of deposit
|
367,380 | 3,994 | 1.09 | % | 419,084 | 4,706 | 1.12 | % | 430,934 | 5,619 | 1.30 | % | ||||||||||||||||||||||||
Total interest-bearing deposits
|
1,025,591 | 6,691 | 0.65 | % | 1,030,048 | 7,665 | 0.74 | % | 989,959 | 8,329 | 0.84 | % | ||||||||||||||||||||||||
Advances from the Federal Home Loan Bank
|
89,419 | 1,953 | 2.18 | % | 66,314 | 2,061 | 3.11 | % | 66,586 | 2,149 | 3.23 | % | ||||||||||||||||||||||||
Repurchase agreement borrowing
|
21,000 | 727 | 3.46 | % | 21,000 | 721 | 3.43 | % | 21,000 | 719 | 3.42 | % | ||||||||||||||||||||||||
Repurchase liabilities
|
66,436 | 257 | 0.39 | % | 72,543 | 379 | 0.52 | % | 60,600 | 416 | 0.69 | % | ||||||||||||||||||||||||
Total interest-bearing liabilities
|
1,202,446 | 9,628 | 0.80 | % | 1,189,905 | 10,826 | 0.91 | % | 1,138,145 | 11,613 | 1.02 | % | ||||||||||||||||||||||||
Noninterest-bearing deposits
|
213,697 | 176,459 | 134,924 | |||||||||||||||||||||||||||||||||
Other noninterest-bearing liabilities
|
41,223 | 30,018 | 25,596 | |||||||||||||||||||||||||||||||||
Total liabilities
|
1,457,366 | 1,396,382 | 1,298,665 | |||||||||||||||||||||||||||||||||
Stockholders’ equity
|
248,202 | 180,503 | 98,433 | |||||||||||||||||||||||||||||||||
Total liabilities and stockholders’ equity
|
$ | 1,705,568 | $ | 1,576,885 | $ | 1,397,098 | ||||||||||||||||||||||||||||||
Net interest income
|
53,232 | 48,199 | 49,288 | |||||||||||||||||||||||||||||||||
Net interest rate spread
(1)
|
3.16 | % | 3.05 | % | 3.61 | % | ||||||||||||||||||||||||||||||
Net interest-earning assets
(2)
|
$ | 385,913 | $ | 300,534 | $ | 175,967 | ||||||||||||||||||||||||||||||
Net interest margin
(3)
|
3.35 | % | 3.23 | % | 3.75 | % | ||||||||||||||||||||||||||||||
Average interest-earning assets to average
|
||||||||||||||||||||||||||||||||||||
interest-bearing liabilities
|
132.09 | % | 125.26 | % | 115.46 | % |
2012 vs. 2011
|
2011 vs. 2010
|
|||||||||||||||||||||||
Increase (decrease) due to
|
Increase (decrease) due to
|
|||||||||||||||||||||||
(Dollars in thousands)
|
Volume
|
Rate
|
Total
|
Volume
|
Rate
|
Total
|
||||||||||||||||||
Interest-earning assets:
|
||||||||||||||||||||||||
Loans, net
|
$ | 8,607 | $ | (4,178 | ) | $ | 4,429 | $ | 3,487 | $ | (2,735 | ) | $ | 752 | ||||||||||
Investment securities
|
(190 | ) | (190 | ) | (380 | ) | 448 | (3,245 | ) | (2,797 | ) | |||||||||||||
Federal Home Loan Bank of Boston stock
|
1 | 20 | 21 | - | 16 | 16 | ||||||||||||||||||
Federal funds and other interest-earning assets
|
(210 | ) | (25 | ) | (235 | ) | 144 | 9 | 153 | |||||||||||||||
Total interest-earning assets
|
8,208 | (4,373 | ) | 3,835 | 4,079 | (5,955 | ) | (1,876 | ) | |||||||||||||||
Interest-bearing liabilities:
|
||||||||||||||||||||||||
NOW accounts
|
(87 | ) | (156 | ) | (243 | ) | (76 | ) | (379 | ) | (455 | ) | ||||||||||||
Money market
|
99 | (75 | ) | 24 | 496 | 215 | 711 | |||||||||||||||||
Savings accounts
|
43 | (86 | ) | (43 | ) | (7 | ) | - | (7 | ) | ||||||||||||||
Certificates of deposit
|
(607 | ) | (105 | ) | (712 | ) | (148 | ) | (765 | ) | (913 | ) | ||||||||||||
Total interest-bearing deposits
|
(552 | ) | (422 | ) | (974 | ) | 265 | (929 | ) | (664 | ) | |||||||||||||
Advances from the Federal Home Loan Bank
|
(657 | ) | 549 | (108 | ) | (7 | ) | (81 | ) | (88 | ) | |||||||||||||
Repurchase agreement borrowing
|
- | 6 | 6 | 2 | - | 2 | ||||||||||||||||||
Repurchase liabilities
|
(30 | ) | (92 | ) | (122 | ) | 168 | (205 | ) | (37 | ) | |||||||||||||
Total interest-bearing liabilities
|
(1,239 | ) | 41 | (1,198 | ) | 428 | (1,215 | ) | (787 | ) | ||||||||||||||
Increase (decrease) in net interest income
|
$ | 9,447 | $ | (4,414 | ) | $ | 5,033 | $ | 3,651 | $ | (4,740 | ) | $ | (1,089 | ) |
Percentage Increase (Decrease) in
|
||||||||
Estimated Net Interest Income Over
|
||||||||
12 Months
|
||||||||
At December 31,
|
||||||||
2012
|
2011
|
|||||||
300 basis point increase
|
7.31 | % | 8.86 | % | ||||
400 basis point increase
|
6.23 | % | 11.36 | % | ||||
100 basis point decrease
|
(4.89 | )% | (3.90 | )% |
Less Than
One Year
|
One to
Three
Years
|
Three to
Five Years
|
More than
Five Years
|
Total
|
||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
FHLB Advances
(1)
|
$ | 92,000 | $ | 17,000 | $ | 19,000 | $ | - | $ | 128,000 | ||||||||||
Interest expense payable on FHLB Advances
|
1,539 | 909 | - | - | 2,448 | |||||||||||||||
Repurchase agreement borrowings
|
- | 10,500 | - | 10,500 | 21,000 | |||||||||||||||
Operating leases
(2)
|
2,307 | 4,617 | 4,205 | 10,204 | 21,333 | |||||||||||||||
Other liabilities
(3)
|
1,115 | 2,381 | 2,525 | 7,071 | 13,092 | |||||||||||||||
Total
|
$ | 96,961 | $ | 35,407 | $ | 25,730 | $ | 27,775 | $ | 185,873 |
Less Than
One Year
|
One to
Three
Years
|
Three to
Five Years
|
More than
Five Years
|
Total
|
||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Real estate loan commitments
(1)
|
$ | 14,761 | $ | - | $ | - | $ | - | $ | 14,761 | ||||||||||
Commercial lines of credit
(2)
|
11,046 | 50,877 | - | - | 61,923 | |||||||||||||||
Unused portion of home equity lines of credit
(2)
|
- | 2,768 | - | - | 2,768 | |||||||||||||||
Unused portion of construction loans
|
6,050 | 8,919 | 10,544 | 120,565 | 146,078 | |||||||||||||||
Unused portion of resort loans
|
402 | - | - | - | 402 | |||||||||||||||
Unused revolving lines of credit
|
3,362 | 4,997 | 48 | 55 | 8,462 | |||||||||||||||
Standby letters of credit
|
75,669 | 24,413 | 11,661 | 23,636 | 135,379 | |||||||||||||||
Total
|
$ | 111,290 | $ | 91,974 | $ | 22,253 | $ | 144,256 | $ | 369,773 |
●
|
statements of our goals, intentions and expectations;
|
●
|
statements regarding our business plans, prospects, growth and operating strategies;
|
●
|
statements regarding the asset quality of our loan and investment portfolios; and
|
●
|
estimates of our risks and future costs and benefits.
|
●
|
Local, regional and national business or economic conditions may differ from those expected.
|
●
|
The effects of and changes in trade, monetary and fiscal policies and laws, including the U.S. Federal Reserve Board’s interest rate policies, may adversely affect our business.
|
●
|
The ability to increase market share and control expenses may be more difficult than anticipated.
|
●
|
Changes in laws and regulatory requirements (including those concerning taxes, banking, securities and insurance) may adversely affect us or our business.
|
●
|
Changes in accounting policies and practices, as may be adopted by regulatory agencies, the Public Company Accounting Oversight Board or the Financial Accounting Standards Board, may affect expected financial reporting.
|
●
|
Future changes in interest rates may reduce our profits which could have a negative impact on the value of our stock.
|
●
|
We are subject to lending risk and could incur losses in our loan portfolio despite our underwriting practices. Changes in real estate values could also increase our lending risk.
|
●
|
Changes in demand for loan products, financial products and deposit flow could impact our financial performance.
|
●
|
Strong competition within our market area may limit our growth and profitability.
|
●
|
We may not manage the risks involved in the foregoing as well as anticipated.
|
●
|
If our allowance for loan losses is not sufficient to cover actual loan losses, our earnings could decrease.
|
●
|
Our stock value may be negatively affected by federal regulations and articles of incorporation provisions restricting takeovers.
|
●
|
Implementation of stock benefit plans will increase our costs, which will reduce our income.
|
●
|
The Dodd-Frank Act has resulted in dramatic regulatory changes that affected the industry in general, and may impact our competitive position in ways that cannot be predicted at this time.
|
●
|
The Emergency Economic Stabilization Act (“EESA”) of 2008 has and may continue to have a significant impact on the banking industry.
|
|
●
|
Computer systems on which we depend could fail or experience a security breach, implementation of new technologies may not be successful; and our ability to anticipate and respond to technological changes can affect our ability to meet customer needs..
|
|
(A)
|
Report of Independent Registered Public Accounting Firm
|
|
(B)
|
Consolidated Statements of Financial Condition as of December 31, 2012 and 2011
|
|
(C)
|
Consolidated Statements of Operations for the years ended December 31, 2012, 2011 and 2010
|
|
(D)
|
Consolidated Statements of Comprehensive Income (Loss) for the years ended December 31, 2012, 2011 and 2010
|
|
(E)
|
Consolidated Statements of Changes in Stockholders’ Equity for the years ended December 31, 2012, 2011 and 2010
|
|
(F)
|
Consolidated Statements of Cash Flows for the years ended December 31, 2012, 2011 and 2010
|
|
(G)
|
Notes to Consolidated Financial Statements
|
Page
|
|
Report of Independent Registered Public Accounting Firm
|
63
|
Consolidated Financial Statements:
|
|
Consolidated Statements of Condition
|
64
|
Consolidated Statements of Operations
|
65
|
Consolidated Statements of Comprehensive Income (Loss)
|
66
|
Consolidated Statements of Changes in Stockholders’ Equity
|
67
|
Consolidated Statements of Cash Flows
|
68
|
Notes to Consolidated Financial Statements
|
69
|
First Connecticut Bancorp, Inc.
|
||||
Consolidated Statements of Condition
|
December 31,
|
||||||||
2012
|
2011
|
|||||||
(Dollars in thousands)
|
||||||||
Assets
|
||||||||
Cash and due from banks
|
$ | 50,641 | $ | 40,296 | ||||
Federal funds sold
|
- | 50,000 | ||||||
Cash and cash equivalents
|
50,641 | 90,296 | ||||||
Securities held-to-maturity, at amortized cost
|
3,006 | 3,216 | ||||||
Securities available-for-sale, at fair value
|
138,481 | 135,170 | ||||||
Loans held for sale
|
9,626 | 1,039 | ||||||
Loans, net
|
1,520,170 | 1,295,177 | ||||||
Premises and equipment, net
|
19,967 | 21,379 | ||||||
Federal Home Loan Bank of Boston stock, at cost
|
8,939 | 7,449 | ||||||
Accrued income receivable
|
4,415 | 4,185 | ||||||
Bank-owned life insurance
|
37,449 | 30,382 | ||||||
Deferred income taxes
|
15,682 | 13,907 | ||||||
Prepaid expenses and other assets
|
14,570 | 15,450 | ||||||
Total assets
|
$ | 1,822,946 | $ | 1,617,650 | ||||
Liabilities and Stockholders’ Equity
|
||||||||
Deposits
|
||||||||
Interest-bearing
|
$ | 1,082,869 | $ | 981,057 | ||||
Noninterest-bearing
|
247,586 | 195,625 | ||||||
1,330,455 | 1,176,682 | |||||||
Federal Home Loan Bank of Boston advances
|
128,000 | 63,000 | ||||||
Repurchase agreement borrowings
|
21,000 | 21,000 | ||||||
Repurchase liabilities
|
54,187 | 64,466 | ||||||
Accrued expenses and other liabilities
|
47,782 | 40,522 | ||||||
Total liabilities
|
1,581,424 | 1,365,670 | ||||||
Commitments and contingencies
|
- | - | ||||||
Stockholders’ Equity
|
||||||||
Common stock, $0.01 par value, 30,000,000 shares authorized;
18,076,971 shares issued and 17,714,481 shares outstanding at December 31, 2012; 17,880,200 shares issued and outstanding at December 31, 2011
|
181 | 179 | ||||||
Additional paid-in-capital
|
172,247 | 174,836 | ||||||
Unallocated common stock held by ESOP
|
(14,806 | ) | (10,490 | ) | ||||
Treasury stock, at cost (362,490 shares at December 31, 2012)
|
(4,860 | ) | - | |||||
Retained earnings
|
94,890 | 92,937 | ||||||
Accumulated other comprehensive loss
|
(6,130 | ) | (5,482 | ) | ||||
Total stockholders’ equity
|
241,522 | 251,980 | ||||||
Total liabilities and stockholders’ equity
|
$ | 1,822,946 | $ | 1,617,650 |
First Connecticut Bancorp, Inc.
|
||||||
Consolidated Statements of Operations
|
For the Year Ended
|
||||||||||||
December 31, | ||||||||||||
2012
|
2011
|
2010
|
||||||||||
(Dollars in thousands, except per share data)
|
||||||||||||
Interest income
|
||||||||||||
Interest and fees on loans
|
||||||||||||
Mortgage
|
$ | 45,867 | $ | 42,552 | $ | 42,404 | ||||||
Other
|
15,445 | 14,331 | 13,727 | |||||||||
Interest and dividends on investments
|
||||||||||||
United States Government and agency obligations
|
939 | 1,373 | 4,013 | |||||||||
Other bonds
|
266 | 191 | 229 | |||||||||
Corporate stocks
|
275 | 275 | 378 | |||||||||
Other interest income
|
68 | 303 | 150 | |||||||||
Total interest income
|
62,860 | 59,025 | 60,901 | |||||||||
Interest expense
|
||||||||||||
Deposits
|
6,691 | 7,665 | 8,329 | |||||||||
Interest on borrowed funds
|
1,953 | 2,061 | 2,149 | |||||||||
Interest on repo borrowings
|
727 | 721 | 719 | |||||||||
Interest on repurchase liabilities
|
257 | 379 | 416 | |||||||||
Total interest expense
|
9,628 | 10,826 | 11,613 | |||||||||
Net interest income
|
53,232 | 48,199 | 49,288 | |||||||||
Provision for allowance for loan losses
|
1,380 | 4,090 | 6,694 | |||||||||
Net interest income after provision for loan losses
|
51,852 | 44,109 | 42,594 | |||||||||
Noninterest income
|
||||||||||||
Fees for customer services
|
3,714 | 3,355 | 3,061 | |||||||||
Net gain on sale of investments
|
- | 89 | 1,686 | |||||||||
Net gain on loans sold
|
3,151 | 671 | 822 | |||||||||
Brokerage and insurance fee income
|
123 | 189 | 377 | |||||||||
Bank owned life insurance income
|
1,537 | 725 | 667 | |||||||||
Other
|
965 | 659 | 438 | |||||||||
Total noninterest income
|
9,490 | 5,688 | 7,051 | |||||||||
Noninterest expense
|
||||||||||||
Salaries and employee benefits
|
32,828 | 28,605 | 23,221 | |||||||||
Occupancy expense
|
4,491 | 4,534 | 4,142 | |||||||||
Furniture and equipment expense
|
4,381 | 4,047 | 4,022 | |||||||||
FDIC assessment
|
1,170 | 1,466 | 1,760 | |||||||||
Marketing
|
2,455 | 2,474 | 2,583 | |||||||||
Contribution to Farmington Bank Community Foundation, Inc.
|
- | 6,877 | - | |||||||||
Other operating expenses
|
10,753 | 8,309 | 6,946 | |||||||||
Total noninterest expense
|
56,078 | 56,312 | 42,674 | |||||||||
Income (loss) before income taxes
|
5,264 | (6,515 | ) | 6,971 | ||||||||
Income tax expense (benefit)
|
1,341 | (2,475 | ) | 2,102 | ||||||||
Net income (loss)
|
$ | 3,923 | $ | (4,040 | ) | $ | 4,869 | |||||
Net earnings (loss) per share (
1)
(See Note 2):
|
||||||||||||
Basic and Diluted
|
$ | 0.24 | $ | (0.29 | ) | N/A | ||||||
Weighted average shares outstanding:
|
||||||||||||
Basic and Diluted
|
16,643,566 | 17,145,031 | N/A | |||||||||
Pro forma net income (loss) per share
(2)
:
|
||||||||||||
Basic and Diluted
|
N/A | $ | (0.23 | ) | $ | 0.28 |
First Connecticut Bancorp, Inc.
|
||||||
Consolidated Statements of Comprehensive Income (Loss)
|
2012
|
2011
|
2010
|
||||||||||
(Dollars in thousands)
|
||||||||||||
Net income (loss)
|
$ | 3,923 | $ | (4,040 | ) | $ | 4,869 | |||||
Other comprehensive income (loss), before tax
|
||||||||||||
Unrealized losses on securities:
|
||||||||||||
Unrealized holding losses arising during the year
|
(280 | ) | (787 | ) | (4,095 | ) | ||||||
Less: reclassification adjustment for gains
|
||||||||||||
included in net income
|
- | 89 | 1,686 | |||||||||
Net change in unrealized losses
|
(280 | ) | (698 | ) | (2,409 | ) | ||||||
Change related to employee benefit plans
|
(702 | ) | (3,790 | ) | (2,968 | ) | ||||||
Other comprehensive loss, before tax
|
(982 | ) | (4,488 | ) | (5,377 | ) | ||||||
Income tax benefit
|
(334 | ) | (1,526 | ) | (1,828 | ) | ||||||
Other comprehensive loss, net of tax
|
(648 | ) | (2,962 | ) | (3,549 | ) | ||||||
Comprehensive income (loss)
|
$ | 3,275 | $ | (7,002 | ) | $ | 1,320 |
First Connecticut Bancorp, Inc.
|
|||||||||||||||||
Consolidated Statement of Changes in Stockholders’ Equity
|
Unallocated
|
Accumulated
|
|||||||||||||||||||||||||||||||
Common Stock
|
Additional
|
Common
|
Other
|
|||||||||||||||||||||||||||||
Shares
|
Paid in
|
Shares Held
|
Treasury
|
Retained
|
Comprehensive
|
|||||||||||||||||||||||||||
Outstanding
|
Amount
|
Capital
|
by ESOP
|
Stock
|
Earnings
|
Income (Loss)
|
Total
|
|||||||||||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||||||||||||||
Balance at December 31, 2009
|
- | $ | - | $ | - | $ | - | $ | - | $ | 92,644 | $ | 1,029 | $ | 93,673 | |||||||||||||||||
Net income
|
- | - | - | - | - | 4,869 | - | 4,869 | ||||||||||||||||||||||||
Other comprehensive loss
|
- | - | - | - | - | - | (3,549 | ) | (3,549 | ) | ||||||||||||||||||||||
Balance at December 31, 2010
|
- | - | - | - | - | 97,513 | (2,520 | ) | 94,993 | |||||||||||||||||||||||
Issuance of common stock for initial public offering,
|
||||||||||||||||||||||||||||||||
net of expenses of $4.1 million (Note 1)
|
17,192,500 | 172 | 167,666 | - | - | - | - | 167,838 | ||||||||||||||||||||||||
Issuance of common stock to Farmington Bank Community
|
||||||||||||||||||||||||||||||||
Foundation, Inc. including additional tax benefit due to
|
||||||||||||||||||||||||||||||||
higher basis for tax purposes
|
687,700 | 7 | 7,123 | - | - | - | - | 7,130 | ||||||||||||||||||||||||
Purchase of common stock for Employee Stock
|
||||||||||||||||||||||||||||||||
Ownership Plan "ESOP"
|
- | - | - | (11,545 | ) | - | - | - | (11,545 | ) | ||||||||||||||||||||||
ESOP shares committed to be released
|
- | - | 47 | 1,055 | - | - | - | 1,102 | ||||||||||||||||||||||||
Cash dividend paid ($0.03 per common share)
|
- | - | - | - | - | (536 | ) | - | (536 | ) | ||||||||||||||||||||||
Net loss
|
- | - | - | - | - | (4,040 | ) | - | (4,040 | ) | ||||||||||||||||||||||
Other comprehensive loss
|
- | - | - | - | (2,962 | ) | (2,962 | ) | ||||||||||||||||||||||||
Balance at December 31, 2011
|
17,880,200 | 179 | 174,836 | (10,490 | ) | - | 92,937 | (5,482 | ) | 251,980 | ||||||||||||||||||||||
Purchase of common stock for Employee Stock
|
||||||||||||||||||||||||||||||||
Ownership Plan ("ESOP")
|
- | - | - | (5,376 | ) | - | - | - | (5,376 | ) | ||||||||||||||||||||||
ESOP shares released and committed to be released
|
- | - | 203 | 1,060 | - | - | - | 1,263 | ||||||||||||||||||||||||
Additional tax benefit related to the issuance
|
||||||||||||||||||||||||||||||||
of common stock to the Farmington Bank
|
||||||||||||||||||||||||||||||||
Community Foundation, Inc.
|
- | - | 18 | - | - | - | - | 18 | ||||||||||||||||||||||||
Cash dividend paid ($0.12 per common share)
|
- | - | - | - | - | (1,970 | ) | - | (1,970 | ) | ||||||||||||||||||||||
Treasury stock acquired
|
(849,437 | ) | - | - | - | (11,283 | ) | - | - | (11,283 | ) | |||||||||||||||||||||
Treasury stock issued for restricted stock
|
486,947 | - | (6,423 | ) | - | 6,423 | - | - | - | |||||||||||||||||||||||
Issuance of common stock for restricted stock
|
228,261 | 2 | (2 | ) | - | - | - | - | - | |||||||||||||||||||||||
Cancellation of shares for tax withholding
|
(31,490 | ) | - | (407 | ) | - | - | - | - | (407 | ) | |||||||||||||||||||||
Tax benefit due to dividends on restricted stock
|
- | - | 11 | - | - | - | - | 11 | ||||||||||||||||||||||||
Share based compensation expense
|
- | - | 4,011 | - | - | - | - | 4,011 | ||||||||||||||||||||||||
Net income
|
- | - | - | - | - | 3,923 | - | 3,923 | ||||||||||||||||||||||||
Other comprehensive loss
|
- | - | - | - | - | - | (648 | ) | (648 | ) | ||||||||||||||||||||||
Balance at December 31, 2012
|
17,714,481 | $ | 181 | $ | 172,247 | $ | (14,806 | ) | $ | (4,860 | ) | $ | 94,890 | $ | (6,130 | ) | $ | 241,522 |
First Connecticut Bancorp, Inc.
|
||||||
Consolidated Statements of Cash Flows
|
||||||
For Year Ended December 31
|
||||||||||||
(Dollars in thousands)
|
2012
|
2011
|
2010
|
|||||||||
Cash flows from operating activities
|
||||||||||||
Net income (loss)
|
$ | 3,923 | $ | (4,040 | ) | $ | 4,869 | |||||
Adjustments to reconcile net income to net cash provided by
operating activities:
|
||||||||||||
Provision for allowance for loan losses
|
1,380 | 4,090 | 6,694 | |||||||||
Provision for off-balance sheet commitments
|
124 | 28 | (16 | ) | ||||||||
Depreciation and amortization
|
3,309 | 3,108 | 3,014 | |||||||||
Gain on sale of investments
|
- | (89 | ) | (1,686 | ) | |||||||
Amortization of ESOP expense
|
1,263 | 1,102 | - | |||||||||
Share based compensation expense
|
4,011 | - | - | |||||||||
Contribution of stock to Farmington Bank Community Foundation, Inc.
|
- | 6,877 | - | |||||||||
Loans originated for sale
|
(100,676 | ) | (40,729 | ) | (36,719 | ) | ||||||
Proceeds from the sale of loans held for sale
|
117,189 | 41,223 | 36,679 | |||||||||
Loss on sale of foreclosed real estate
|
28 | - | 48 | |||||||||
Loss on sale of premises and equipment
|
371 | - | - | |||||||||
Tax benefit due to dividends on restricted stock
|
11 | - | - | |||||||||
Net gain on loans sold
|
(3,151 | ) | (671 | ) | (822 | ) | ||||||
Accretion and amortization of investment security discounts
and premiums, net
|
(153 | ) | (110 | ) | 86 | |||||||
Amortization and accretion of loan fees and discounts, net
|
(825 | ) | (356 | ) | (312 | ) | ||||||
(Increase) decrease in accrued income receivable
|
(230 | ) | 42 | (4 | ) | |||||||
Deferred income tax
|
(1,425 | ) | (721 | ) | (1,207 | ) | ||||||
Increase in cash surrender value of bank-owned life insurance
|
(1,286 | ) | (725 | ) | (667 | ) | ||||||
Decrease (increase) in prepaid expenses and other assets
|
1,127 | (7,471 | ) | 133 | ||||||||
Increase (decrease) in accrued expenses and other liabilities
|
6,436 | 9,320 | (1,214 | ) | ||||||||
Net cash provided by operating activities
|
31,426 | 10,878 | 8,876 | |||||||||
Cash flow from investing activities
|
||||||||||||
Maturities of securities held-to-maturity
|
210 | 665 | - | |||||||||
Maturities, calls and principal payments of securities available-for-sale
|
360,553 | 422,414 | 241,820 | |||||||||
Sales of securities available-for-sale
|
- | 50 | 37,439 | |||||||||
Purchases of securities held-to-maturity
|
- | (209 | ) | (662 | ) | |||||||
Purchases of securities available-for-sale
|
(363,991 | ) | (395,126 | ) | (321,725 | ) | ||||||
Loan originations, net of principal repayments
|
(248,842 | ) | (141,202 | ) | (124,542 | ) | ||||||
Purchases of Federal Home Loan Bank of Boston stock, net
|
(1,490 | ) | - | - | ||||||||
Purchases of bank-owned life insurance
|
(6,000 | ) | (10,000 | ) | (5,007 | ) | ||||||
Proceeds from sale of premises and equipment
|
3,146 | - | ||||||||||
Proceeds from bank-owned life insurance
|
219 | - | - | |||||||||
Proceeds from sale of foreclosed real estate
|
1,070 | 144 | 374 | |||||||||
Purchases of premises and equipment
|
(5,414 | ) | (2,580 | ) | (4,649 | ) | ||||||
Net cash used in investing activities
|
(260,539 | ) | (125,844 | ) | (176,952 | ) | ||||||
Cash flows from financing activities
|
||||||||||||
Proceeds from common stock offering, net of offering cost
|
- | 167,838 | - | |||||||||
Purchase of common stock for ESOP
|
(5,376 | ) | (11,545 | ) | - | |||||||
Net increase (decrease) in borrowings
|
65,000 | (8,000 | ) | 9,000 | ||||||||
Net increase in demand deposits, NOW accounts,
|
||||||||||||
savings accounts and money market accounts
|
180,303 | 126,263 | 108,470 | |||||||||
Net (decrease) increase in certificates of deposit
|
(26,530 | ) | (67,803 | ) | 6,972 | |||||||
Net (decrease) increase in repurchase liabilities
|
(10,279 | ) | (19,563 | ) | 33,943 | |||||||
Cancellation of shares for tax withholding
|
(407 | ) | - | - | ||||||||
Repurchase of common stock
|
(11,283 | ) | - | - | ||||||||
Cash dividend paid
|
(1,970 | ) | (536 | ) | - | |||||||
Net cash provided by financing activities
|
189,458 | 186,654 | 158,385 | |||||||||
Net (decrease) increase in cash and cash equivalents
|
(39,655 | ) | 71,688 | (9,691 | ) | |||||||
Cash and cash equivalents at beginning of period
|
90,296 | 18,608 | 28,299 | |||||||||
Cash and cash equivalents at end of period
|
$ | 50,641 | $ | 90,296 | $ | 18,608 | ||||||
Supplemental disclosure of cash flow information
|
||||||||||||
Cash paid for interest
|
$ | 6,712 | $ | 10,825 | $ | 11,611 | ||||||
Cash paid for income taxes
|
6 | 858 | 3,382 | |||||||||
Loans transferred to other real estate owned
|
1,345 | 208 | 238 |
1.
|
Summary of Significant Accounting Policies
|
First Connecticut Bancorp, Inc.
|
Notes to Consolidated Financial Statements
|
First Connecticut Bancorp, Inc.
|
Notes to Consolidated Financial Statements
|
First Connecticut Bancorp, Inc.
|
Notes to Consolidated Financial Statements
|
First Connecticut Bancorp, Inc.
|
Notes to Consolidated Financial Statements
|
First Connecticut Bancorp, Inc.
|
Notes to Consolidated Financial Statements
|
First Connecticut Bancorp, Inc.
|
Notes to Consolidated Financial Statements
|
First Connecticut Bancorp, Inc.
|
Notes to Consolidated Financial Statements
|
First Connecticut Bancorp, Inc.
|
Notes to Consolidated Financial Statements
|
First Connecticut Bancorp, Inc.
|
Notes to Consolidated Financial Statements
|
Risk-free interest rate
|
0.82%
|
Expected volatility
|
33.69%
|
Expected dividend yield
|
1.78%
|
Expected life of options granted
|
6.0 years
|
First Connecticut Bancorp, Inc.
|
Notes to Consolidated Financial Statements
|
First Connecticut Bancorp, Inc.
|
Notes to Consolidated Financial Statements
|
First Connecticut Bancorp, Inc.
|
Notes to Consolidated Financial Statements
|
2.
|
Restrictions on Cash and Due from Banks
|
3.
|
Earnings Per Share
|
For the Year Ended
December 31, 2012
|
For the Period from
June 29, 2011 to
December 31, 2011
|
|||||||
(Dollars in thousands, except Per Share data):
|
||||||||
Net income (loss)
|
$ | 3,923 | $ | (4,905 | ) | |||
Weighted-average shares outstanding
|
17,943,640 | 17,880,200 | ||||||
Less: Average unallocated ESOP shares
|
(1,205,970 | ) | (735,169 | ) | ||||
Average treasury stock
|
(94,104 | ) | - | |||||
Weighted-average basic shares outstanding
|
16,643,566 | 17,145,031 | ||||||
Weighted-average diluted shares outstanding
|
16,643,566 | 17,145,031 | ||||||
Net earnings (loss) per share:
|
||||||||
Basic
|
$ | 0.24 | $ | (0.29 | ) | |||
Diluted
|
$ | 0.24 | $ | (0.29 | ) |
First Connecticut Bancorp, Inc.
|
Notes to Consolidated Financial Statements
|
4.
|
Investment Securities
|
December 31, 2012
|
|||||||||||||||||
(Dollars in thousands)
|
Amortized
Cost
|
Gross
Unrealized
Gains
|
Gross
Unrealized
Losses
|
Market
Value
|
|||||||||||||
Available-for-sale
|
|||||||||||||||||
Debt securities:
|
|||||||||||||||||
U.S. Treasury obligations
|
$
|
118,984
|
$
|
5
|
$
|
(9
|
)
|
$
|
118,980
|
||||||||
Government sponsored residential mortgage-backed securities
|
9,803
|
800
|
-
|
10,603
|
|||||||||||||
Corporate debt securities
|
2,958
|
195
|
-
|
3,153
|
|||||||||||||
Preferred equity securities
|
2,100
|
19
|
(333
|
)
|
1,786
|
||||||||||||
Marketable equity securities
|
348
|
27
|
(3
|
)
|
372
|
||||||||||||
Mutual funds
|
3,585
|
2
|
-
|
3,587
|
|||||||||||||
Total securities available-for-sale
|
$
|
137,778
|
$
|
1,048
|
$
|
(345
|
)
|
$
|
138,481
|
||||||||
Held-to-maturity
|
|||||||||||||||||
Government sponsored residential mortgage-backed securities
|
$
|
6
|
$
|
-
|
$
|
-
|
$
|
6
|
|||||||||
Trust preferred debt security
|
3,000
|
-
|
-
|
3,000
|
|||||||||||||
Total securities held-to-maturity
|
$
|
3,006
|
$
|
-
|
$
|
-
|
$
|
3,006
|
December 31, 2011
|
|||||||||||||||||
(Dollars in thousands)
|
Amortized
Cost
|
Gross
Unrealized
Gains
|
Gross
Unrealized
Losses
|
Market
Value
|
|||||||||||||
Available-for-sale
|
|||||||||||||||||
Debt securities:
|
|||||||||||||||||
U.S. Treasury obligations
|
$
|
80,999
|
$
|
-
|
$
|
-
|
$
|
80,999
|
|||||||||
U.S. Government agency obligations
|
27,003
|
12
|
(9
|
)
|
27,006
|
||||||||||||
Government sponsored residential mortgage-backed securities
|
19,254
|
1,302
|
(11
|
)
|
20,545
|
||||||||||||
Corporate debt securities
|
1,000
|
175
|
-
|
1,175
|
|||||||||||||
Trust preferred debt securities
|
42
|
-
|
-
|
42
|
|||||||||||||
Preferred equity securities
|
2,100
|
112
|
(639
|
)
|
1,573
|
||||||||||||
Marketable equity securities
|
348
|
22
|
(4
|
)
|
366
|
||||||||||||
Mutual funds
|
3,439
|
25
|
-
|
3,464
|
|||||||||||||
Total securities available-for-sale
|
$
|
134,185
|
$
|
1,648
|
$
|
(663
|
)
|
$
|
135,170
|
||||||||
Held-to-maturity
|
|||||||||||||||||
Government sponsored residential mortgage-backed securities
|
$
|
7
|
$
|
-
|
$
|
-
|
$
|
7
|
|||||||||
Municipal debt securities
|
209
|
-
|
-
|
209
|
|||||||||||||
Trust preferred debt security
|
3,000
|
-
|
-
|
3,000
|
|||||||||||||
Total securities held-to-maturity
|
$
|
3,216
|
$
|
-
|
$
|
-
|
$
|
3,216
|
First Connecticut Bancorp, Inc.
|
Notes to Consolidated Financial Statements
|
Less than 12 Months
|
12 Months or More
|
Total
|
|||||||||||||||||||||||
(Dollars in thousands)
|
Fair
Value
|
Gross
Unrealized
Loss
|
Fair
Value
|
Gross
Unrealized
Loss
|
Fair
Value
|
Gross
Unrealized
Loss
|
|||||||||||||||||||
December 31, 2012
|
|||||||||||||||||||||||||
Available-for-sale:
|
|||||||||||||||||||||||||
U.S. Treasury obligations
|
$
|
52,985
|
$
|
(9
|
)
|
$
|
-
|
$
|
-
|
$
|
52,985
|
$
|
(9
|
)
|
|||||||||||
Preferred equity securities
|
-
|
-
|
1,667
|
(333
|
)
|
1,667
|
(333
|
)
|
|||||||||||||||||
Marketable equity securities
|
-
|
-
|
4
|
(3
|
)
|
4
|
(3
|
)
|
|||||||||||||||||
$
|
52,985
|
$
|
(9
|
)
|
$
|
1,671
|
$
|
(336
|
)
|
$
|
54,656
|
$
|
(345
|
)
|
Less than 12 Months
|
12 Months or More
|
Total
|
|||||||||||||||||||||||
(Dollars in thousands)
|
Fair
Value
|
Gross
Unrealized
Loss
|
Fair
Value
|
Gross
Unrealized
Loss
|
Fair
Value
|
Gross
Unrealized
Loss
|
|||||||||||||||||||
December 31, 2011
|
|||||||||||||||||||||||||
Available-for-sale:
|
|||||||||||||||||||||||||
U.S. Government agency obligations
|
$
|
16,994
|
$
|
(9
|
)
|
$
|
-
|
$
|
-
|
$
|
16,994
|
$
|
(9
|
)
|
|||||||||||
Government sponsored residential mortgage-backed securities
|
776
|
(9
|
)
|
124
|
(2
|
)
|
900
|
(11
|
)
|
||||||||||||||||
Preferred equity securities
|
87
|
(13
|
)
|
1,374
|
(626
|
)
|
1,461
|
(639
|
)
|
||||||||||||||||
Marketable equity securities
|
-
|
-
|
3
|
(4
|
)
|
3
|
(4
|
)
|
|||||||||||||||||
$
|
17,857
|
$
|
(31
|
)
|
$
|
1,501
|
$
|
(632
|
)
|
$
|
19,358
|
$
|
(663
|
)
|
First Connecticut Bancorp, Inc.
|
Notes to Consolidated Financial Statements
|
December 31, 2012
|
|||||||||||||||||
Available-for-Sale
|
Held-to-Maturity
|
||||||||||||||||
Amortized
Cost
|
Estimated
Market
Value
|
Amortized
Cost
|
Estimated
Market
Value
|
||||||||||||||
(Dollars in thousands)
|
|||||||||||||||||
Due in one year or less
|
$
|
118,984
|
$
|
118,980
|
$
|
-
|
$
|
-
|
|||||||||
Due after one year through five years
|
2,958
|
3,153
|
-
|
-
|
|||||||||||||
Due after five years through ten years
|
-
|
-
|
-
|
-
|
|||||||||||||
Due after ten years
|
-
|
-
|
3,000
|
3,000
|
|||||||||||||
Government sponsored residential mortgage-backed securities
|
9,803
|
10,603
|
6
|
6
|
|||||||||||||
$
|
131,745
|
$
|
132,736
|
$
|
3,006
|
$
|
3,006
|
December 31, 2011
|
|||||||||||||||||
Available-for-Sale
|
Held-to-Maturity
|
||||||||||||||||
Amortized
Cost
|
Estimated
Market
Value
|
Amortized
Cost
|
Estimated
Market
Value
|
||||||||||||||
(Dollars in thousands)
|
|||||||||||||||||
Due in one year or less
|
$
|
80,999
|
$
|
80,999
|
$
|
209
|
$
|
209
|
|||||||||
Due after one year through five years
|
27,503
|
27,590
|
-
|
-
|
|||||||||||||
Due after five years through ten years
|
500
|
591
|
-
|
-
|
|||||||||||||
Due after ten years
|
42
|
42
|
3,000
|
3,000
|
|||||||||||||
Government sponsored residential mortgage-backed securities
|
19,254
|
20,545
|
7
|
7
|
|||||||||||||
$
|
128,298
|
$
|
129,767
|
$
|
3,216
|
$
|
3,216
|
First Connecticut Bancorp, Inc.
|
Notes to Consolidated Financial Statements
|
5.
|
Loans and Allowance for Loan Losses
|
December 31,
2012
|
December 31,
2011
|
||||||||
(Dollars in thousands)
|
|||||||||
Real estate
|
|||||||||
Residential
|
$
|
620,991
|
$
|
503,361
|
|||||
Commercial
|
473,788
|
408,169
|
|||||||
Construction
|
64,362
|
46,381
|
|||||||
Installment
|
6,719
|
10,333
|
|||||||
Commercial
|
192,210
|
154,300
|
|||||||
Collateral
|
2,086
|
2,348
|
|||||||
Home equity line of credit
|
142,543
|
109,771
|
|||||||
Demand
|
25
|
41
|
|||||||
Revolving credit
|
65
|
90
|
|||||||
Resort
|
31,232
|
75,363
|
|||||||
Total loans
|
1,534,021
|
1,310,157
|
|||||||
Less:
|
|||||||||
Allowance for loan losses
|
(17,229
|
)
|
|
(17,533
|
)
|
||||
Net deferred loan costs
|
3,378
|
2,553
|
|||||||
Loans, net
|
$
|
1,520,170
|
$
|
1,295,177
|
First Connecticut Bancorp, Inc.
|
Notes to Consolidated Financial Statements
|
As of December 31,
|
|||||||||
(Dollars in thousands)
|
2012
|
2011
|
|||||||
Balance at beginning of period
|
$
|
17,533
|
$
|
20,734
|
|||||
Provision for loan losses
|
1,380
|
4,090
|
|||||||
Charge-offs
|
(1,913
|
)
|
(7,323
|
)
|
|||||
Recoveries
|
229
|
32
|
|||||||
Balance at end of period
|
$
|
17,229
|
$
|
17,533
|
For the Year Ended December 31, 2012
|
|||||||||||||||||||||
Balance at
beginning of
period
|
Charge-offs
|
Recoveries
|
Provision for
(Reduction)
loan losses
|
Balance at
end of period
|
|||||||||||||||||
(Dollars in thousands)
|
|||||||||||||||||||||
Real estate
|
|||||||||||||||||||||
Residential
|
$ | 2,874 | $ | (337 | ) | $ | 9 | $ | 1,232 | $ | 3,778 | ||||||||||
Commercial
|
8,755 | (454 | ) | 4 | (200 | ) | 8,105 | ||||||||||||||
Construction
|
590 | - | - | 170 | 760 | ||||||||||||||||
Installment
|
92 | (9 | ) | 7 | (13 | ) | 77 | ||||||||||||||
Commercial
|
2,140 | (33 | ) | 194 | 353 | 2,654 | |||||||||||||||
Collateral
|
- | - | - | - | - | ||||||||||||||||
Home equity line of credit
|
1,295 | (1,019 | ) | - | 1,101 | 1,377 | |||||||||||||||
Demand
|
- | - | - | - | - | ||||||||||||||||
Revolving credit
|
- | (61 | ) | 15 | 46 | - | |||||||||||||||
Resort
|
1,787 | - | - | (1,331 | ) | 456 | |||||||||||||||
Unallocated
|
- | - | - | 22 | 22 | ||||||||||||||||
$ | 17,533 | $ | (1,913 | ) | $ | 229 | $ | 1,380 | $ | 17,229 |
For the Year Ended December 31, 2011
|
|||||||||||||||||||||
Balance at
beginning of
period
|
Charge-offs
|
Recoveries
|
Provision for
(Reduction)
loan losses
|
Balance at
end of period
|
|||||||||||||||||
(Dollars in thousands)
|
|||||||||||||||||||||
Real estate
|
|||||||||||||||||||||
Residential
|
$ | 3,056 | $ | (411 | ) | $ | - | $ | 229 | $ | 2,874 | ||||||||||
Commercial
|
7,726 | (1,314 | ) | - | 2,343 | 8,755 | |||||||||||||||
Construction
|
524 | - | - | 66 | 590 | ||||||||||||||||
Installment
|
115 | (28 | ) | 2 | 3 | 92 | |||||||||||||||
Commercial
|
1,564 | (517 | ) | 12 | 1,081 | 2,140 | |||||||||||||||
Collateral
|
- | - | - | - | - | ||||||||||||||||
Home equity line of credit
|
558 | (114 | ) | - | 851 | 1,295 | |||||||||||||||
Demand
|
3 | - | 18 | (21 | ) | - | |||||||||||||||
Revolving credit
|
- | (59 | ) | - | 59 | - | |||||||||||||||
Resort
|
7,188 | (4,880 | ) | - | (521 | ) | 1,787 | ||||||||||||||
Unallocated
|
- | - | - | - | - | ||||||||||||||||
$ | 20,734 | $ | (7,323 | ) | $ | 32 | $ | 4,090 | $ | 17,533 |
First Connecticut Bancorp, Inc.
|
Notes to Consolidated Financial Statements
|
December 31, 2012
|
December 31, 2011
|
||||||||||||||||
(Dollars in thousands)
|
Total
|
Reserve
Allocation
|
Total
|
Reserve
Allocation
|
|||||||||||||
Real estate
|
|||||||||||||||||
Residential
|
$ | 10,695 | $ | 340 | $ | 10,632 | $ | 459 | |||||||||
Commercial
|
17,546 | 126 | 17,660 | 1,245 | |||||||||||||
Construction
|
1,179 | 6 | 994 | 34 | |||||||||||||
Installment
|
7 | - | - | - | |||||||||||||
Commercial
|
5,313 | 476 | 8,099 | 17 | |||||||||||||
Collateral
|
- | - | - | - | |||||||||||||
Home equity line of credit
|
491 | - | 1,555 | 455 | |||||||||||||
Demand
|
- | - | - | - | |||||||||||||
Revolving Credit
|
- | - | - | - | |||||||||||||
Resort
|
1,626 | 1 | 2,054 | 1 | |||||||||||||
Total
|
$ | 36,857 | $ | 949 | $ | 40,994 | $ | 2,211 |
December 31, 2012
|
December 31, 2011
|
||||||||||||||||
(Dollars in thousands)
|
Total
|
Reserve
Allocation
|
Total
|
Reserve
Allocation
|
|||||||||||||
Real estate
|
|||||||||||||||||
Residential
|
$ | 613,343 | $ | 3,438 | $ | 494,949 | $ | 2,415 | |||||||||
Commercial
|
456,109 | 7,979 | 390,466 | 7,510 | |||||||||||||
Construction
|
63,124 | 754 | 45,346 | 556 | |||||||||||||
Installment
|
6,712 | 77 | 10,333 | 92 | |||||||||||||
Commercial
|
187,466 | 2,178 | 146,755 | 2,123 | |||||||||||||
Collateral
|
2,086 | - | 2,348 | - | |||||||||||||
Home equity line of credit
|
142,056 | 1,377 | 108,219 | 840 | |||||||||||||
Demand
|
25 | - | 41 | - | |||||||||||||
Revolving Credit
|
65 | - | 90 | - | |||||||||||||
Resort
|
29,556 | 455 | 73,169 | 1,786 | |||||||||||||
Total
|
$ | 1,500,542 | $ | 16,258 | $ | 1,271,716 | $ | 15,322 | |||||||||
Unallocated
|
- | 22 | - | - | |||||||||||||
Total
|
$ | 1,537,399 | $ | 17,229 | $ | 1,312,710 | $ | 17,533 |
First Connecticut Bancorp, Inc.
|
Notes to Consolidated Financial Statements
|
December 31, 2012 | ||||||||||||||||||||||||||||||||||||
30-59 Days | 60-89 Days | > 90 Days |
Past Due 90
Days or More and Still Accruing |
|||||||||||||||||||||||||||||||||
(Dollars in thousands)
|
Past Due | Past Due | Past Due | Total | ||||||||||||||||||||||||||||||||
Number | Amount |
Number
|
Amount | Number | Amount | Number | Amount | |||||||||||||||||||||||||||||
Real estate
|
||||||||||||||||||||||||||||||||||||
Residential
|
17 | $ | 3,080 | 6 | $ | 1,663 | 16 | $ | 7,803 | 39 | $ | 12,546 | $ | - | ||||||||||||||||||||||
Commercial
|
- | - | 1 | 349 | 2 | 925 | 3 | 1,274 | - | |||||||||||||||||||||||||||
Construction
|
- | - | - | - | 1 | 419 | 1 | 419 | - | |||||||||||||||||||||||||||
Installment
|
1 | 14 | - | - | 2 | 73 | 3 | 87 | - | |||||||||||||||||||||||||||
Commercial
|
2 | 1,435 | 1 | 66 | 6 | 585 | 9 | 2,086 | - | |||||||||||||||||||||||||||
Collateral
|
7 | 57 | - | - | - | - | 7 | 57 | - | |||||||||||||||||||||||||||
Home equity line of credit
|
1 | 75 | 2 | 94 | 3 | 379 | 6 | 548 | - | |||||||||||||||||||||||||||
Demand
|
1 | 6 | - | - | 2 | 40 | 3 | 46 | - | |||||||||||||||||||||||||||
Revolving Credit
|
- | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||
Resort
|
- | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||
Total
|
29 | $ | 4,667 | 10 | $ | 2,172 | 32 | $ | 10,224 | 71 | $ | 17,063 | $ | - |
December 31, 2011 | ||||||||||||||||||||||||||||||||||||
30-59 Days | 60-89 Days | > 90 Days |
Past Due 90
Days or More and Still Accruing |
|||||||||||||||||||||||||||||||||
(Dollars in thousands) |
Past Due
|
Past Due
|
Past Due
|
Total
|
||||||||||||||||||||||||||||||||
Number
|
Amount
|
Number
|
Amount
|
Number
|
Amount
|
Number
|
Amount
|
|||||||||||||||||||||||||||||
Real estate
|
||||||||||||||||||||||||||||||||||||
Residential
|
12 | $ | 2,955 | 4 | $ | 730 | 17 | $ | 7,926 | 33 | $ | 11,611 | $ | - | ||||||||||||||||||||||
Commercial
|
1 | 963 | - | - | 9 | 2,934 | 10 | 3,897 | - | |||||||||||||||||||||||||||
Construction
|
- | - | - | - | 2 | 484 | 2 | 484 | - | |||||||||||||||||||||||||||
Installment
|
5 | 22 | 1 | 78 | 2 | 63 | 8 | 163 | - | |||||||||||||||||||||||||||
Commercial
|
- | - | - | - | 8 | 802 | 8 | 802 | - | |||||||||||||||||||||||||||
Collateral
|
9 | 70 | - | - | - | - | 9 | 70 | - | |||||||||||||||||||||||||||
Home equity line of credit
|
3 | 204 | - | - | 6 | 1,555 | 9 | 1,759 | - | |||||||||||||||||||||||||||
Demand
|
1 | 16 | - | - | 1 | 25 | 2 | 41 | - | |||||||||||||||||||||||||||
Revolving Credit
|
- | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||
Resort
|
- | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||
Total
|
31 | $ | 4,230 | 5 | $ | 808 | 45 | $ | 13,789 | 81 | $ | 18,827 | $ | - |
First Connecticut Bancorp, Inc.
|
Notes to Consolidated Financial Statements
|
December 31,
|
December 31,
|
||||||||
(Dollars in thousands)
|
2012
|
2011
|
|||||||
Nonaccrual loans:
|
|||||||||
Real estate
|
|||||||||
Residential
|
$ | 9,194 | $ | 9,224 | |||||
Commercial
|
925 | 2,934 | |||||||
Construction
|
419 | 484 | |||||||
Installment
|
157 | 209 | |||||||
Commercial
|
2,351 | 956 | |||||||
Collateral
|
- | - | |||||||
Home equity line of credit
|
711 | 1,669 | |||||||
Demand
|
25 | 25 | |||||||
Revolving Credit
|
- | - | |||||||
Resort
|
- | - | |||||||
Total nonaccruing loans
|
13,782 | 15,501 | |||||||
Loans 90 days past due and still accruing
|
- | - | |||||||
Real estate owned
|
549 | 302 | |||||||
Total nonperforming assets
|
$ | 14,331 | $ | 15,803 |
First Connecticut Bancorp, Inc.
|
Notes to Consolidated Financial Statements
|
December 31, 2012 | |||||||||||||||||||||||||
Cash-basis
|
|||||||||||||||||||||||||
Unpaid
|
Average
|
Interest
|
Interest
|
||||||||||||||||||||||
Recorded
|
Principal
|
Related
|
Recorded
|
Income
|
Income
|
||||||||||||||||||||
(Dollars in thousands)
|
Investment
|
Balance
|
Allowance
|
Investment
|
Recognized
|
Recognized
|
|||||||||||||||||||
Impaired loans without
|
|||||||||||||||||||||||||
a valuation allowance:
|
|||||||||||||||||||||||||
Real estate
|
|||||||||||||||||||||||||
Residential
|
$ | 4,061 | $ | 4,495 | $ | - | $ | 3,929 | $ | 10 | $ | 10 | |||||||||||||
Commercial
|
2,787 | 2,973 | - | 6,048 | 315 | 304 | |||||||||||||||||||
Construction
|
760 | 761 | - | 592 | 18 | 18 | |||||||||||||||||||
Installment
|
- | - | - | - | - | - | |||||||||||||||||||
Commercial
|
1,986 | 1,985 | - | 3,918 | 184 | 178 | |||||||||||||||||||
Collateral
|
- | - | - | - | - | - | |||||||||||||||||||
Home equity line of credit
|
491 | 569 | - | 494 | - | - | |||||||||||||||||||
Demand
|
- | - | - | - | - | ||||||||||||||||||||
Revolving Credit
|
- | - | - | - | - | ||||||||||||||||||||
Resort
|
- | - | - | 56 | 26 | 26 | |||||||||||||||||||
Total
|
10,085 | 10,783 | - | 15,037 | 553 | 536 | |||||||||||||||||||
Impaired loans with
|
|||||||||||||||||||||||||
a valuation allowance:
|
|||||||||||||||||||||||||
Real estate
|
|||||||||||||||||||||||||
Residential
|
6,634 | 6,882 | 340 | 6,864 | 78 | 68 | |||||||||||||||||||
Commercial
|
14,759 | 14,753 | 126 | 11,594 | 818 | 814 | |||||||||||||||||||
Construction
|
419 | 664 | 6 | 226 | - | - | |||||||||||||||||||
Installment
|
7 | 7 | - | 4 | - | - | |||||||||||||||||||
Commercial
|
3,327 | 3,339 | 476 | 2,111 | 86 | 78 | |||||||||||||||||||
Collateral
|
- | - | - | - | - | ||||||||||||||||||||
Home equity line of credit
|
- | - | - | - | - | - | |||||||||||||||||||
Demand
|
- | - | - | - | - | - | |||||||||||||||||||
Revolving Credit
|
- | - | - | - | - | - | |||||||||||||||||||
Resort
|
1,626 | 1,624 | 1 | 1,736 | 32 | 32 | |||||||||||||||||||
Total
|
26,772 | 27,269 | 949 | 22,535 | 1,014 | 992 | |||||||||||||||||||
Total impaired loans
|
$ | 36,857 | $ | 38,052 | $ | 949 | $ | 37,572 | $ | 1,567 | $ | 1,528 |
First Connecticut Bancorp, Inc.
|
Notes to Consolidated Financial Statements
|
First Connecticut Bancorp, Inc.
|
Notes to Consolidated Financial Statements
|
December 31, 2012 | |||||||||||||||||||||||||
TDRs on Accrual Status
|
TDRs on Nonaccrual Status
|
Total TDRs
|
|||||||||||||||||||||||
Number of
|
Recorded
|
Number of
|
Recorded
|
Number of
|
Recorded
|
||||||||||||||||||||
(Dollars in thousands)
|
Loans
|
Investment
|
Loans
|
Investment
|
Loans
|
Investment
|
|||||||||||||||||||
Real estate
|
|||||||||||||||||||||||||
Residential
|
3 | $ | 1,068 | 6 | $ | 5,264 | 9 | $ | 6,332 | ||||||||||||||||
Commercial
|
12 | 16,381 | - | - | 12 | 16,381 | |||||||||||||||||||
Construction
|
2 | 999 | 1 | 419 | 3 | 1,418 | |||||||||||||||||||
Installment
|
1 | 7 | - | - | 1 | 7 | |||||||||||||||||||
Commercial
|
7 | 2,043 | 6 | 1,867 | 13 | 3,910 | |||||||||||||||||||
Collateral
|
- | - | - | - | - | - | |||||||||||||||||||
Home equity line of credit
|
- | - | - | - | - | - | |||||||||||||||||||
Demand
|
- | - | - | - | - | - | |||||||||||||||||||
Revolving Credit
|
- | - | - | - | - | - | |||||||||||||||||||
Resort
|
2 | 1,626 | - | - | 2 | 1,626 | |||||||||||||||||||
Total
|
27 | $ | 22,124 | 13 | $ | 7,550 | 40 | $ | 29,674 |
First Connecticut Bancorp, Inc.
|
Notes to Consolidated Financial Statements
|
December 31, 2011 | |||||||||||||||||||||||||
TDRs on Accrual Status
|
TDRs on Nonaccrual Status
|
Total TDRs
|
|||||||||||||||||||||||
Number of
|
Recorded
|
Number of
|
Recorded
|
Number of
|
Recorded
|
||||||||||||||||||||
(Dollars in thousands)
|
Loans
|
Investment
|
Loans
|
Investment
|
Loans
|
Investment
|
|||||||||||||||||||
Real estate
|
|||||||||||||||||||||||||
Residential
|
3 | $ | 1,075 | 5 | $ | 5,072 | 8 | $ | 6,147 | ||||||||||||||||
Commercial
|
10 | 13,760 | 2 | 1,254 | 12 | 15,014 | |||||||||||||||||||
Construction
|
1 | 510 | 1 | 484 | 2 | 994 | |||||||||||||||||||
Installment
|
- | - | - | - | - | - | |||||||||||||||||||
Commercial
|
10 | 6,116 | - | - | 10 | 6,116 | |||||||||||||||||||
Collateral
|
- | - | - | - | - | - | |||||||||||||||||||
Home equity line of credit
|
- | - | 1 | 999 | 1 | 999 | |||||||||||||||||||
Demand
|
- | - | - | - | - | - | |||||||||||||||||||
Revolving Credit
|
- | - | - | - | - | - | |||||||||||||||||||
Resort
|
2 | 2,054 | - | - | 2 | 2,054 | |||||||||||||||||||
Total
|
26 | $ | 23,515 | 9 | $ | 7,809 | 35 | $ | 31,324 |
For the Year Ended December 31, 2012
|
|||||||||||||
Recorded
|
Recorded
|
||||||||||||
Investment
|
Investment
|
||||||||||||
Number of
|
Prior to
|
After
|
|||||||||||
(Dollars in thousands)
|
Modifications
|
Modification
|
Modification
(1)
|
||||||||||
Trouble Debt Restructurings:
|
|||||||||||||
Real estate
|
|||||||||||||
Residential
|
2 | $ | 579 | $ | 563 | ||||||||
Commercial
|
7 | 9,149 | 8,945 | ||||||||||
Construction
|
2 | 1,002 | 999 | ||||||||||
Installment
|
1 | 7 | 7 | ||||||||||
Commercial
|
8 | 2,721 | 2,332 | ||||||||||
Total
|
20 | $ | 13,458 | $ | 12,846 | ||||||||
For the Year Ended December 31, 2011
|
|||||||||||||
Recorded
|
Recorded
|
||||||||||||
Investment
|
Investment
|
||||||||||||
Number of
|
Prior to
|
After
|
|||||||||||
(Dollars in thousands)
|
Modifications
|
Modification
|
Modification
(1)
|
||||||||||
Trouble Debt Restructurings:
|
|||||||||||||
Real estate
|
|||||||||||||
Residential
|
7 | $ | 6,094 | $ | 5,727 | ||||||||
Commercial
|
6 | 7,410 | 7,339 | ||||||||||
Construction
|
1 | 510 | 510 | ||||||||||
Commercial
|
9 | 6,017 | 5,817 | ||||||||||
Resort
|
2 | 2,077 | 2,054 | ||||||||||
Total
|
25 | $ | 22,108 | $ | 21,447 |
First Connecticut Bancorp, Inc.
|
Notes to Consolidated Financial Statements
|
For the Year Ended December 31, 2012 | |||||||||||||||||||||||||
Adjusted
|
Combination
|
||||||||||||||||||||||||
Number of
|
Extended
|
Interest
|
of Rate and
|
||||||||||||||||||||||
(Dollars in thousands)
|
Modifications
|
Maturity
|
Rates
|
Maturity |
Other
|
Total
|
|||||||||||||||||||
Real estate
|
|||||||||||||||||||||||||
Residential
|
2 | $ | - | $ | 113 | $ | - | $ | 450 | $ | 563 | ||||||||||||||
Commercial
|
7 | 2,441 | 3,299 | - | 3,205 | 8,945 | |||||||||||||||||||
Construction
|
2 | 999 | - | - | - | 999 | |||||||||||||||||||
Installment
|
1 | - | 7 | - | - | 7 | |||||||||||||||||||
Commercial
|
8 | 2,169 | - | 163 | - | 2,332 | |||||||||||||||||||
Total
|
20 | $ | 5,609 | $ | 3,419 | $ | 163 | $ | 3,655 | $ | 12,846 | ||||||||||||||
For the Year Ended December 31, 2011
|
|||||||||||||||||||||||||
Adjusted
|
Combination
|
||||||||||||||||||||||||
Number of
|
Extended
|
Interest
|
of Rate and
|
||||||||||||||||||||||
(Dollars in thousands)
|
Modifications
|
Maturity
|
Rates
|
Maturity |
Other
|
Total
|
|||||||||||||||||||
Real estate
|
|||||||||||||||||||||||||
Residential
|
7 | $ | - | $ | 397 | $ | - | $ | 5,330 | $ | 5,727 | ||||||||||||||
Commercial
|
6 | 3,678 | - | 3,661 | - | 7,339 | |||||||||||||||||||
Construction
|
1 | 510 | - | - | - | 510 | |||||||||||||||||||
Commercial
|
9 | 4,301 | - | 1,423 | 93 | 5,817 | |||||||||||||||||||
Resort
|
2 | - | - | - | 2,054 | 2,054 | |||||||||||||||||||
Total
|
25 | $ | 8,489 | $ | 397 | $ | 5,084 | $ | 7,477 | $ | 21,447 |
For the
Year
Ended
|
For the Year Ended | ||||||||||||||||
December 31, 2012
|
December 31, 2011
|
||||||||||||||||
Number of
|
Recorded
|
Number of
|
Recorded
|
||||||||||||||
(Dollars in thousands)
|
Loans
|
Investment
(1)
|
Loans
|
Investment
(1)
|
|||||||||||||
Real estate
|
|||||||||||||||||
Residential
|
2 | $ | 1,374 | 1 | $ | 272 | |||||||||||
Commercial
|
1 | 349 | - | - | |||||||||||||
Commercial
|
5 | 1,587 | - | - | |||||||||||||
Total
|
8 | $ | 3,310 | 1 | $ | 272 |
(1)
|
The period end balances are inclusive of all partial paydow ns and charge-offs since the modification date.
TDRs fully paid off, charged-off or foreclosed upon by period end are not included.
|
First Connecticut Bancorp, Inc.
Notes to Consolidated Financial Statements
|
Loans rated 1 – 5:
|
Commercial loans in these categories are considered “pass” rated loans with low
to average risk.
|
|
Loans rated 6:
|
Residential, Consumer and Commercial loans in this category are considered
“special mention.” These loans are starting to show signs of potential weakness
and are being closely monitored by management.
|
|
Loans rated 7:
|
Loans in this category are considered “substandard.” Generally, a loan is
considered substandard if it is inadequately protected by the current net worth
and paying capacity of the obligors and/or the collateral pledged. There is a
distinct possibility that the Company will sustain some loss if the weakness is not
corrected.
|
|
Loans rated 8:
|
Loans in this category are considered “doubtful.” Loans classified as
doubtful have all the weaknesses inherent in those classified substandard with
the added characteristic that the weaknesses make collection or liquidation in
full, on the basis of currently existing facts, highly questionable and improbable.
|
|
Loans rated 9:
|
Loans in this category are considered uncollectible (“loss”) and of such
little value that their continuance as loans is not warranted.
|
First Connecticut Bancorp, Inc.
Notes to Consolidated Financial Statements
|
December 31, 2012
|
|||||||||||||||||||||
(Dollars in thousands)
|
Pass
|
Special Mention
|
Substandard
|
Doubtful
|
Total
|
||||||||||||||||
Real estate
|
|||||||||||||||||||||
Residential
|
$ | 606,998 | $ | 2,425 | $ | 11,568 | $ | - | $ | 620,991 | |||||||||||
Commercial
|
434,183 | 24,902 | 14,703 | - | 473,788 | ||||||||||||||||
Construction
|
60,293 | 770 | 3,299 | - | 64,362 | ||||||||||||||||
Installment
|
6,481 | 53 | 185 | - | 6,719 | ||||||||||||||||
Commercial
|
171,776 | 10,125 | 10,020 | 289 | 192,210 | ||||||||||||||||
Collateral
|
2,086 | - | - | - | 2,086 | ||||||||||||||||
Home equity line of credit
|
140,723 | 704 | 1,116 | - | 142,543 | ||||||||||||||||
Demand
|
- | - | 25 | - | 25 | ||||||||||||||||
Revolving Credit
|
65 | - | - | - | 65 | ||||||||||||||||
Resort
|
29,596 | 12 | 1,624 | - | 31,232 | ||||||||||||||||
Total Loans
|
$ | 1,452,201 | $ | 38,991 | $ | 42,540 | $ | 289 | $ | 1,534,021 | |||||||||||
December 31, 2011
|
|||||||||||||||||||||
(Dollars in thousands)
|
Pass
|
Special Mention
|
Substandard
|
Doubtful
|
Total
|
||||||||||||||||
Real estate
|
|||||||||||||||||||||
Residential
|
$ | 490,805 | $ | 2,079 | $ | 10,477 | $ | - | $ | 503,361 | |||||||||||
Commercial
|
370,688 | 14,480 | 23,001 | - | 408,169 | ||||||||||||||||
Construction
|
42,492 | 200 | 3,689 | - | 46,381 | ||||||||||||||||
Installment
|
10,051 | 66 | 216 | - | 10,333 | ||||||||||||||||
Commercial
|
135,953 | 3,020 | 15,327 | - | 154,300 | ||||||||||||||||
Collateral
|
2,348 | - | - | - | 2,348 | ||||||||||||||||
Home equity line of credit
|
107,421 | 432 | 1,918 | - | 109,771 | ||||||||||||||||
Demand
|
16 | - | 25 | - | 41 | ||||||||||||||||
Revolving Credit
|
90 | - | - | - | 90 | ||||||||||||||||
Resort
|
57,093 | 5,885 | 12,385 | - | 75,363 | ||||||||||||||||
Total Loans
|
$ | 1,216,957 | $ | 26,162 | $ | 67,038 | $ | - | $ | 1,310,157 |
First Connecticut Bancorp, Inc.
Notes to Consolidated Financial Statements
|
At
December 31,
|
|||||||||
2012
|
2011
|
||||||||
(Dollars in thousands)
|
|||||||||
Balance, at beginning of year
|
$ | 702 | $ | 831 | |||||
Additional loans and advances
|
55 | 201 | |||||||
Repayments
|
(41 | ) | (330 | ) | |||||
Balance, at end of year
|
$ | 716 | $ | 702 |
As of December 31,
|
|||||||||
2012
|
2011
|
||||||||
(Dollars in thousands)
|
|||||||||
Land
|
$ | 1,751 | $ | 2,198 | |||||
Premises and leasehold improvements
|
20,576 | 20,210 | |||||||
Furniture and equipment
|
26,204 | 24,226 | |||||||
48,531 | 46,634 | ||||||||
Less: accumulated depreciation and amortization
|
(28,564 | ) | (25,255 | ) | |||||
$ | 19,967 | $ | 21,379 |
First Connecticut Bancorp, Inc.
Notes to Consolidated Financial Statements
|
(Dollars in thousands)
|
As of December 31,
|
||||||||||||||
Advance Date
|
Interest Rate
|
Maturity Date
|
2012
|
2011
|
|||||||||||
04/11/08
|
3.17 | % |
04/11/12
|
$ | - | $ | 3,000 | ||||||||
12/31/12
|
0.31 | % |
01/02/13
|
68,000 | - | ||||||||||
04/11/08
|
3.40 | % |
04/11/13
|
9,000 | 9,000 | ||||||||||
08/29/08
|
4.26 | % |
08/29/13
|
5,000 | 5,000 | ||||||||||
12/26/08
|
3.31 | % |
12/26/13
|
8,000 | 8,000 | ||||||||||
12/26/08
|
3.17 | % |
12/26/13
|
2,000 | 2,000 | ||||||||||
10/05/09
|
2.72 | % |
04/07/14
|
10,000 | 10,000 | ||||||||||
01/25/10
|
2.52 | % |
07/25/14
|
7,000 | 7,000 | ||||||||||
04/11/08
|
3.83 | % |
04/13/15
|
6,000 | 6,000 | ||||||||||
07/12/10
|
2.25 | % |
07/13/15
|
7,000 | 7,000 | ||||||||||
07/20/10
|
2.11 | % |
07/20/15
|
6,000 | 6,000 | ||||||||||
$ | 128,000 | $ | 63,000 |
First Connecticut Bancorp, Inc.
Notes to Consolidated Financial Statements
|
(Dollars in thousands)
|
As of December 31,
|
||||||||||||||
Advance Date
|
Interest Rate
|
Maturity Date
|
2012
|
2011
|
|||||||||||
March 13, 2008
|
3.34 | % |
3/13/2018
|
$ | 6,000 | $ | 6,000 | ||||||||
March 13, 2008
|
3.93 | % |
3/13/2018
|
4,500 | 4,500 | ||||||||||
March 13, 2008
|
3.16 | % |
3/13/2015
|
10,500 | 10,500 | ||||||||||
$ | 21,000 | $ | 21,000 |
As of December 31, | |||||||||||||||||
2012
|
2011
|
||||||||||||||||
Amount
|
Rate
|
Amount
|
Rate
|
||||||||||||||
(Dollars in thousands)
|
|||||||||||||||||
Noninterest-bearing demand deposits
|
$ | 247,586 | $ | 195,625 | |||||||||||||
Interest-bearing
|
|||||||||||||||||
NOW accounts
|
227,205 | 0.19 | % | 189,577 | 0.25 | % | |||||||||||
Money market
|
317,030 | 0.73 | % | 247,693 | 0.95 | % | |||||||||||
Savings accounts
|
179,290 | 0.17 | % | 157,913 | 0.22 | % | |||||||||||
Time deposits
|
359,344 | 1.09 | % | 385,874 | 1.12 | % | |||||||||||
Total interest-bearing deposits
|
1,082,869 | 0.65 | % | 981,057 | 0.74 | % | |||||||||||
Total deposits
|
$ | 1,330,455 | $ | 1,176,682 |
First Connecticut Bancorp, Inc.
Notes to Consolidated Financial Statements
|
As of December 31,
|
|||||||||
2012
|
2011
|
||||||||
(Dollars in thousands)
|
|||||||||
Less than one year
|
$ | 239,796 | $ | 265,887 | |||||
One to two years
|
48,285 | 44,214 | |||||||
Two to three years
|
25,689 | 26,848 | |||||||
Three to four years
|
33,102 | 16,068 | |||||||
Four to five years
|
12,472 | 32,704 | |||||||
Five to six years
|
- | 153 | |||||||
$ | 359,344 | $ | 385,874 |
For the Year Ended December 31,
|
|||||||||||||
2012
|
2011
|
2010
|
|||||||||||
(Dollars in thousands)
|
|||||||||||||
NOW accounts
|
$ | 389 | $ | 632 | $ | 1,087 | |||||||
Money market
|
2,017 | 1,993 | 1,282 | ||||||||||
Savings accounts
|
291 | 334 | 341 | ||||||||||
Time deposits
|
3,994 | 4,706 | 5,619 | ||||||||||
Total interest expense
|
$ | 6,691 | $ | 7,665 | $ | 8,329 |
First Connecticut Bancorp, Inc.
Notes to Consolidated Financial Statements
|
First Connecticut Bancorp, Inc. |
Notes to Consolidated Financial Statements |
Pension Plans
|
Other Postretirement Benefits
|
|||||||||||||||
Year Ended December 31,
|
Year Ended December 31,
|
|||||||||||||||
2012
|
2011
|
2012
|
2011
|
|||||||||||||
(Dollars in thousands)
|
||||||||||||||||
Change in benefit obligation:
|
||||||||||||||||
Benefit obligation at
|
||||||||||||||||
beginning of year
|
$ | 23,603 | $ | 20,300 | $ | 3,394 | $ | 2,628 | ||||||||
Service cost
|
500 | 689 | 75 | 61 | ||||||||||||
Interest cost
|
1,087 | 1,058 | 150 | 137 | ||||||||||||
Plan participants’ contributions
|
- | - | 39 | 36 | ||||||||||||
Plan amendments
|
- | - | (386 | ) | - | |||||||||||
Actuarial loss
|
2,814 | 2,356 | 175 | 640 | ||||||||||||
Benefits paid
|
(911 | ) | (800 | ) | (117 | ) | (108 | ) | ||||||||
Curtailments
|
(2,963 | ) | - | - | - | |||||||||||
Benefit obligation at
|
||||||||||||||||
end of year
|
24,130 | 23,603 | 3,330 | 3,394 | ||||||||||||
Change in plan assets:
|
||||||||||||||||
Fair value of plan assets at
|
||||||||||||||||
beginning of year
|
14,169 | 13,676 | - | - | ||||||||||||
Actual return on plan assets
|
919 | 67 | - | - | ||||||||||||
Employer contributions
|
1,226 | 1,226 | 78 | 72 | ||||||||||||
Plan participants’ contributions
|
- | 39 | 36 | |||||||||||||
Benefits paid
|
(911 | ) | (800 | ) | (117 | ) | (108 | ) | ||||||||
Fair value of plan assets at
|
||||||||||||||||
end of year
|
15,403 | 14,169 | - | - | ||||||||||||
Funded status recognized in the
|
||||||||||||||||
statements of condition
|
$ | (8,727 | ) | $ | (9,434 | ) | $ | (3,330 | ) | $ | (3,394 | ) | ||||
Accumulated benefit obligation
|
$ | (24,128 | ) | $ | (21,442 | ) | ||||||||||
Pension Plans
|
Other Postretirement Benefits
|
|||||||||||||||
Year Ended December 31,
|
Year Ended December 31,
|
|||||||||||||||
2012
|
2011
|
2012
|
2011
|
|||||||||||||
(Dollars in thousands)
|
||||||||||||||||
Prior Service Cost
|
$ | - | $ | 880 | $ | 255 | $ | 212 | ||||||||
Actuarial gain
|
(6,246 | ) | (6,714 | ) | (604 | ) | (510 | ) | ||||||||
Unrecognized components of net periodic
|
||||||||||||||||
benefit cost in accumulated other
|
||||||||||||||||
comprehensive income, net of tax
|
$ | (6,246 | ) | $ | (5,834 | ) | $ | (349 | ) | $ | (298 | ) |
First Connecticut Bancorp, Inc. |
Notes to Consolidated Financial Statements |
Pension Plans
|
||||||||||||
Year Ended December 31,
|
||||||||||||
2012
|
2011
|
2010
|
||||||||||
(Dollars in thousands)
|
||||||||||||
Components of net periodic pension cost:
|
||||||||||||
Service cost
|
$ | 500 | $ | 689 | $ | 569 | ||||||
Interest cost
|
1,087 | 1,058 | 1,024 | |||||||||
Expected return on plan assets
|
(1,036 | ) | (1,078 | ) | (991 | ) | ||||||
Amortization of unrecognized prior
|
||||||||||||
service cost
|
(125 | ) | (125 | ) | (125 | ) | ||||||
Recognized net actuarial loss
|
676 | 389 | 263 | |||||||||
Curtailment charge
|
(1,208 | ) | - | - | ||||||||
Net periodic pension cost
|
(106 | ) | 933 | 740 | ||||||||
Change in Plan Assets and Benefit Obligations
|
||||||||||||
Recognized in Other Comprehensive Income:
|
||||||||||||
Net loss
|
2,931 | 3,366 | 2,937 | |||||||||
Amortization of net loss
|
(676 | ) | (389 | ) | (263 | ) | ||||||
Amortization of prior service cost
|
1,333 | 125 | 125 | |||||||||
Curtailment charge
|
(2,963 | ) | - | - | ||||||||
Total recognized in other comprehensive income
|
625 | 3,102 | 2,799 | |||||||||
Total recognized in net periodic pension
|
||||||||||||
cost and other comprehensive income
|
$ | 519 | $ | 4,035 | $ | 3,539 |
Other Postretirement Benefits
|
||||||||||||
Year Ended December 31,
|
||||||||||||
2012
|
2011
|
2010
|
||||||||||
(Dollars in thousands)
|
||||||||||||
Components of net periodic pension cost:
|
||||||||||||
Service cost
|
$ | 75 | $ | 61 | $ | 52 | ||||||
Interest cost
|
150 | 137 | 139 | |||||||||
Recognized net loss
|
32 | - | - | |||||||||
Amortization of unrecognized prior service cost
|
(41 | ) | (48 | ) | (48 | ) | ||||||
Curtailment charge
|
(279 | ) | - | - | ||||||||
Net periodic pension cost
|
(63 | ) | 150 | 143 | ||||||||
Change in Plan Assets and Benefit Obligations
|
||||||||||||
Recognized in Other Comprehensive Income:
|
||||||||||||
Net loss
|
175 | 640 | 121 | |||||||||
Amortization of prior service cost (credit)
|
(107 | ) | 48 | 48 | ||||||||
Amortization of net loss
|
(32 | ) | - | - | ||||||||
Change in prior service costs
|
41 | - | - | |||||||||
Total recognized in other comprehensive income
|
77 | 688 | 169 | |||||||||
Total recognized in net periodic pension
|
||||||||||||
cost and other comprehensive income
|
$ | 14 | $ | 838 | $ | 312 |
First Connecticut Bancorp, Inc. |
Notes to Consolidated Financial Statements |
Other Post
|
||||||||
Retirement
|
||||||||
(Dollars in thousands)
|
Pension Plans
|
Benefits
|
||||||
Prior service cost (credit)
|
$ | - | $ | (50 | ) | |||
Actuarial loss
|
570 | 42 |
Pension Benefits
|
Other Postretirement Benefits
|
|||||||||||||||
December 31,
|
December 31,
|
|||||||||||||||
2012
|
2011
|
2012
|
2011
|
|||||||||||||
Weighted-average assumptions used to
|
||||||||||||||||
determine funding status:
|
||||||||||||||||
Discount rate
(1)
|
4.10 | % | 4.65 | % | 3.90 | % | 4.50 | % | ||||||||
Rate of compensation increase *
(2)
|
3.00 | % | 3.00 | % | - | - | ||||||||||
Weighted-average assumptions used to
|
||||||||||||||||
determine net periodic pension costs:
|
||||||||||||||||
Discount rate
|
4.65 | % | 5.50 | % | 4.50 | % | 5.35 | % | ||||||||
Expected return on plan assets
(2)
|
7.25 | % | 7.75 | % | - | - | ||||||||||
Rate of compensation increase
(2)
|
3.00 | % | 4.50 | % | - | - |
At December 31,
|
||||||||
2012
|
2011
|
|||||||
Health care cost trend rate assumed for next year
|
9.50 | % | 10.00 | % | ||||
Rate that the cost trend rate gradually declines to
|
5.00 | % | 5.00 | % | ||||
Year that the rate reaches the rate it is assumed to remain at
|
2022 | 2022 |
First Connecticut Bancorp, Inc. |
Notes to Consolidated Financial Statements |
Effect of a Change in the Health Care Cost Trend Rates
|
|||||||||||||||||||
2012
|
2011
|
||||||||||||||||||
One
|
One
|
One
|
One
|
||||||||||||||||
Percentage
|
Percentage
|
Percentage
|
Percentage
|
||||||||||||||||
Point Increase
|
Point Decrease
|
Point Increase
|
Point Decrease
|
||||||||||||||||
(Dollars in thousands)
|
|||||||||||||||||||
Effect on total of service and
interest components
|
$ | 23 | $ | (19 | ) | $ | 20 | $ | (16 | ) | |||||||||
Effect on postretirement benefit
obligation
|
277 | (236 | ) | 374 | (311 | ) | |||||||||||||
First Connecticut Bancorp, Inc. |
Notes to Consolidated Financial Statements |
Quoted Prices in
|
Significant
|
Significant
|
||||||||||
Active Markets for
|
Observable
|
Unobservable
|
||||||||||
Identical Assets
|
Inputs
|
Inputs
|
||||||||||
(Level 1)
|
(Level 2)
|
(Level 3)
|
||||||||||
(Dollars in thousands)
|
||||||||||||
Mutual funds - equity
|
$ | 7,862 | $ | - | $ | - | ||||||
Mutual funds - fixed income
|
6,411 | - | - | |||||||||
Money market separate account
|
- | 569 | - | |||||||||
High yield separate account
|
- | 562 | - | |||||||||
Quoted Prices in
|
Significant
|
Significant
|
||||||||||
Active Markets for
|
Observable
|
Unobservable
|
||||||||||
Identical Assets
|
Inputs
|
Inputs
|
||||||||||
(Level 1)
|
(Level 2)
|
(Level 3)
|
||||||||||
(Dollars in thousands)
|
||||||||||||
Investments in pooled separate accounts
|
$
|
-
|
$
|
14,169
|
$
|
-
|
Actual Percentage of Fair Value
|
||||||||||||
At December 31,
|
Target
|
|||||||||||
2012
|
2011
|
Allocation
|
||||||||||
High yield and money market funds
|
7 | % | 55 | % | 5-15 | % | ||||||
Equity funds
|
51 | % | 25 | % | 30-70 | % | ||||||
Fixed income funds
|
42 | % | 20 | % | 30-70 | % | ||||||
Total
|
100 | % | 100 | % |
First Connecticut Bancorp, Inc. |
Notes to Consolidated Financial Statements |
2013
|
$ | 986 | ||
2014
|
1,012 | |||
2015
|
1,047 | |||
2016
|
1,079 | |||
2017
|
1,096 | |||
Years 2018 - 2022
|
6,140 | |||
$ | 11,360 | |||
2013
|
$ | 129 | ||
2014
|
167 | |||
2015
|
155 | |||
2016
|
166 | |||
2017
|
184 | |||
Years 2018 - 2022
|
931 | |||
$ | 1,732 |
First Connecticut Bancorp, Inc. |
Notes to Consolidated Financial Statements |
Allocated
|
190,722 | |||
Unallocated
|
1,239,694 | |||
1,430,416 |
First Connecticut Bancorp, Inc. |
Notes to Consolidated Financial Statements |
December 31, 2012
|
||||
Weighted per share average fair value of options granted
|
$ | 3.50 | ||
Assumptions:
|
||||
Risk-free interest rate
|
0.82 | % | ||
Expected volatility
|
33.69 | % | ||
Expected dividend yield
|
1.78 | % | ||
Weighted-average dividend yield
|
0.86% - 2.89 | % | ||
Expected life of options granted
|
6.0 years
|
Weighted-Average
|
||||||||||||||||||
Remaining
|
Aggregate
|
|||||||||||||||||
Number of
|
Weighted-Average
|
Contractual Term
|
Intrinsic Value
|
|||||||||||||||
Stock Options
|
Exercise Price
|
(in years)
|
(in thousands)
|
|||||||||||||||
Outstanding at December 31, 2011
|
- | $ | - | |||||||||||||||
Granted
|
1,698,157 | 12.95 | ||||||||||||||||
Exercised
|
- | - | ||||||||||||||||
Forfeited
|
(1,800 | ) | 12.95 | |||||||||||||||
Outstanding at December 31, 2012
|
1,696,357 | $ | 12.95 | 9.68 | $ | 1,345 | ||||||||||||
Exercisable at December 31, 2012
|
339,630 |
First Connecticut Bancorp, Inc. |
Notes to Consolidated Financial Statements |
Number of
|
Weighted-Average
|
|||||||
Restricted
|
Grant Date
|
|||||||
Stock
|
Fair Value
|
|||||||
Unvested at December 31, 2011
|
- | $ | - | |||||
Granted
|
715,208 | 12.95 | ||||||
Vested
|
(143,041 | ) | 12.95 | |||||
Forfeited
|
- | - | ||||||
Unvested at December 31, 2012
|
572,167 | $ | 12.95 | |||||
First Connecticut Bancorp, Inc. |
Notes to Consolidated Financial Statements |
December 31, 2012
|
December 31, 2011
|
|||||||||||||||||||||||||
Consolidated
|
Estimated
|
Estimated
|
||||||||||||||||||||||||
Balance Sheet
|
# of
|
Notional
|
Fair
|
# of
|
Notional
|
Fair
|
||||||||||||||||||||
Location
|
Instruments
|
Amount
|
Values
|
Instruments
|
Amount
|
Values
|
||||||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||||||||
Commercial loan customer
interest rate swap position
|
Other Assets
|
35 | $ | 105,828 | $ | 8,379 | 28 | $ | 83,897 | $ | 6,812 | |||||||||||||||
Commercial loan customer
interest rate swap position
|
Other Liabilities
|
2 | 7,731 | (24 | ) | - | - | - | ||||||||||||||||||
Counterparty interest
rate swap position
|
Other Liabilities
|
37 | 113,559 | (8,355 | ) | 28 | 83,897 | (6,812 | ) | |||||||||||||||||
Years Ended December 31,
|
||||||||||||||||||||||||||||||||||||
2012
|
2011
|
2010
|
||||||||||||||||||||||||||||||||||
MTM (Loss)
|
MTM (Loss)
|
MTM (Loss)
|
||||||||||||||||||||||||||||||||||
Interest Income
|
Gain Recorded
|
Interest Income
|
Gain Recorded
|
Interest Income
|
Gain Recorded
|
|||||||||||||||||||||||||||||||
Recorded in
|
in Noninterest
|
Recorded in
|
in Noninterest
|
Recorded in
|
in Noninterest
|
|||||||||||||||||||||||||||||||
Interest Income
|
Income
|
Net Impact
|
Interest Income
|
Income
|
Net Impact
|
Interest Income
|
Income
|
Net Impact
|
||||||||||||||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||||||||||||||||||
Commercial loan customer
interest rate swap position
|
$ | 2,416 | $ | - | $ | 2,416 | $ | 2,143 | $ | - | $ | 2,143 | $ | 1,529 | $ | - | $ | 1,529 | ||||||||||||||||||
Counterparty interest
rate swap position
|
(2,416 | ) | - | (2,416 | ) | (2,143 | ) | - | (2,143 | ) | (1,529 | ) | - | (1,529 | ) | |||||||||||||||||||||
Total
|
$ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - |
First Connecticut Bancorp, Inc.
|
Notes to Consolidated Financial Statements
|
12. | Income Taxes |
For the Year Ended December 31,
|
||||||||||||
2012
|
2011
|
2010
|
||||||||||
(Dollars in thousands)
|
||||||||||||
Current provision
|
||||||||||||
Federal
|
$ | 2,764 | $ | (1,763 | ) | $ | 3,302 | |||||
State
|
2 | 9 | 7 | |||||||||
2,766 | (1,754 | ) | 3,309 | |||||||||
Deferred benefit
|
||||||||||||
Federal
|
(1,425 | ) | (721 | ) | (1,207 | ) | ||||||
State
|
- | - | - | |||||||||
(1,425 | ) | (721 | ) | (1,207 | ) | |||||||
Total provision for income taxes
|
$ | 1,341 | $ | (2,475 | ) | $ | 2,102 |
For the Year Ended December 31,
|
||||||||||||
2012
|
2011
|
2010
|
||||||||||
(Dollars in thousands)
|
||||||||||||
Income tax expense at statutory federal tax rate
|
$ | 1,790 | $ | (2,215 | ) | $ | 2,370 | |||||
Changes in cash surrender value of life insurance
|
(437 | ) | (247 | ) | (227 | ) | ||||||
Dividends received deduction
|
(57 | ) | (61 | ) | (90 | ) | ||||||
State income taxes
|
1 | 6 | 5 | |||||||||
ESOP
|
37 | - | - | |||||||||
Death benefits
|
(85 | ) | - | - | ||||||||
Other - net
|
92 | 42 | 44 | |||||||||
Income tax provision as reported
|
$ | 1,341 | $ | (2,475 | ) | $ | 2,102 |
First Connecticut Bancorp, Inc.
|
|||||
Notes to Consolidated Financial Statements
|
|||||
At December 31,
|
||||||||
2012
|
2011
|
|||||||
(Dollars in thousands)
|
||||||||
Deferred tax assets
|
||||||||
Allowance for loan losses
|
$ | 5,857 | $ | 5,961 | ||||
Accrued pension
|
430 | 720 | ||||||
Minimum pension liability and postretirement benefits
|
4,350 | 4,159 | ||||||
Charitable contribution carryforward
|
2,393 | 2,593 | ||||||
Deferred compensation
|
2,439 | 2,227 | ||||||
Accrued bonus
|
1,253 | - | ||||||
Other than temporary impairment on securities
available-for-sale
|
990 | 990 | ||||||
Investment in partnerships
|
293 | 494 | ||||||
Stock compensation
|
737 | - | ||||||
Allowance for off-balance sheet provision
|
134 | 92 | ||||||
Other
|
560 | 528 | ||||||
Gross deferred tax assets
|
19,436 | 17,764 | ||||||
Valuation reserve
|
- | - | ||||||
Net deferred tax assets
|
19,436 | 17,764 | ||||||
Deferred tax liabilities
|
||||||||
Net origination fees
|
2,028 | 1,708 | ||||||
Fixed assets
|
995 | 1,576 | ||||||
Bond discount accretion
|
23 | 45 | ||||||
Net unrealized gain on securities available-for-sale
|
240 | 335 | ||||||
Other
|
468 | 193 | ||||||
Gross deferred tax liabilities
|
3,754 | 3,857 | ||||||
Net deferred tax assets
|
15,682 | 13,907 |
2012
|
2011
|
|||||||
(Dollars in thousands)
|
||||||||
Deferred tax benefit allocated to capital
|
$ | (350 | ) | $ | (1,778 | ) | ||
Deferred tax benefit allocated to income
|
(1,425 | ) | (721 | ) | ||||
Total change in deferred taxes
|
$ | (1,775 | ) | $ | (2,499 | ) |
First Connecticut Bancorp, Inc.
|
Notes to Consolidated Financial Statements
|
(Dollars in thousands)
|
2012
|
|||
Balance at December 31, 2011
|
$ | - | ||
Increases based on tax positions related to prior periods
|
982 | |||
Balance at December 31, 2012
|
$ | 982 |
First Connecticut Bancorp, Inc.
|
Notes to Consolidated Financial Statements
|
13. | Lease Commitments |
(Dollars in thousands)
|
||||
2013
|
$ | 2,307 | ||
2014
|
2,356 | |||
2015
|
2,261 | |||
2016
|
2,148 | |||
2017
|
2,057 | |||
Thereafter
|
10,204 | |||
$ | 21,333 |
14. | Financial Instruments with Off-Balance Sheet Risk |
December 31,
|
December 31,
|
|||||||
2012
|
2011
|
|||||||
(Dollars in thousands)
|
||||||||
Approved loan commitments
|
$ | 14,761 | $ | 21,483 | ||||
Unadvanced portion of construction loans
|
61,923 | 23,268 | ||||||
Unadvanced portion of resort loans
|
2,768 | 4,950 | ||||||
Unused lines for home equity loans
|
146,078 | 106,430 | ||||||
Unused revolving lines of credit
|
402 | 365 | ||||||
Unused commercial letters of credit
|
8,462 | 9,925 | ||||||
Unused commercial lines of credit
|
135,379 | 100,585 | ||||||
$ | 369,773 | $ | 267,006 |
First Connecticut Bancorp, Inc.
|
Notes to Consolidated Financial Statements
|
15. | Significant Group Concentrations of Credit Risk |
16. | Fair Value Measurements |
|
● |
Level 1 - Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;
|
|
● |
Level 2 - Quoted prices in markets that are not active, or inputs that are observable either directly or indirectly, for substantially the full term of the asset or liability;
|
|
● |
Level 3 - Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity).
|
First Connecticut Bancorp, Inc.
|
Notes to Consolidated Financial Statements
|
December 31, 2012
|
||||||||||||||||
|
|
|
||||||||||||||
(Dollars in thousands)
|
Total
|
Quoted Prices in
Active Markets for Identical Assets (Level 1) |
Significant
Observable Inputs (Level 2) |
Significant
Unobservable Inputs (Level 3) |
||||||||||||
Assets
|
||||||||||||||||
U.S. Treasury obligations
|
$ | 118,980 | $ | 118,980 | $ | - | $ | - | ||||||||
U.S. Government agency obligations
|
- | - | - | - | ||||||||||||
Government sponsored residential
mortgage-backed securities
|
10,603 | - | 10,603 | - | ||||||||||||
Corporate debt securities
|
3,153 | - | 3,153 | - | ||||||||||||
Preferred equity securities
|
1,786 | - | 1,786 | - | ||||||||||||
Marketable equity securities
|
372 | 132 | 240 | - | ||||||||||||
Mutual funds
|
3,587 | - | 3,587 | - | ||||||||||||
Securities available-for-sale
|
138,481 | 119,112 | 19,369 | - | ||||||||||||
Interest rate swap derivative
|
8,379 | - | 8,379 | - | ||||||||||||
Derivative loan commitments
|
450 | - | - | 450 | ||||||||||||
Forward loan sales commitments
|
38 | - | 38 | |||||||||||||
Total
|
$ | 147,348 | $ | 119,112 | $ | 27,748 | $ | 488 | ||||||||
Liabilities
|
||||||||||||||||
Interest rate swap derivative
|
$ | 8,379 | $ | - | $ | 8,379 | $ | - | ||||||||
Total
|
$ | 8,379 | $ | - | $ | 8,379 | $ | - |
First Connecticut Bancorp, Inc. |
Notes to Consolidated Financial Statements |
December 31, 2011 | ||||||||||||||||
Quoted Prices in
|
Significant
|
Significant
|
||||||||||||||
Active Markets for
|
Observable
|
Unobservable
|
||||||||||||||
Identical Assets
|
Inputs
|
Inputs
|
||||||||||||||
(Dollars in thousands)
|
Total
|
(Level 1)
|
(Level 2)
|
(Level 3)
|
||||||||||||
Assets
|
||||||||||||||||
U.S. Treasury obligations
|
$ | 80,999 | $ | 80,999 | $ | - | $ | - | ||||||||
U.S. Government agency obligations
|
27,006 | - | 27,006 | - | ||||||||||||
Government sponsored residential
mortgage-backed securities
|
20,545 | - | 20,545 | - | ||||||||||||
Corporate debt securities
|
1,175 | - | 1,175 | - | ||||||||||||
Trust preferred debt securities
|
42 | - | - | 42 | ||||||||||||
Preferred equity securities
|
1,573 | - | 1,573 | - | ||||||||||||
Marketable equity securities
|
366 | 126 | 240 | - | ||||||||||||
Mutual funds
|
3,464 | - | 3,464 | - | ||||||||||||
Securities available-for-sale
|
135,170 | 81,125 | 54,003 | 42 | ||||||||||||
Interest rate swap derivative
|
6,812 | - | 6,812 | - | ||||||||||||
Total
|
$ | 141,982 | $ | 81,125 | $ | 60,815 | $ | 42 | ||||||||
Liabilities
|
||||||||||||||||
Interest rate swap derivative
|
$ | 6,812 | $ | - | $ | 6,812 | $ | - | ||||||||
Forward loan sales commitments
|
5 | - | - | 5 | ||||||||||||
Derivative loan commitments
|
39 | - | - | 39 | ||||||||||||
Total
|
$ | 6,856 | $ | - | $ | 6,812 | $ | 44 |
Securities Available-for-Sale
|
||||||||||||
For the Year Ended December 31,
|
||||||||||||
2012
|
2011
|
2010
|
||||||||||
(Dollars in thousands)
|
||||||||||||
Balance, at beginning of year
|
$ | 42 | $ | 44 | $ | 90 | ||||||
Paydowns
|
(42 | ) | (2 | ) | (46 | ) | ||||||
Total losses - (realized/unrealized):
|
||||||||||||
Included in earnings
|
- | - | - | |||||||||
Balance, at the end of year
|
$ | - | $ | 42 | $ | 44 |
Derivative and Forward Loan Sales Commitments, Net
|
||||||||||||
For the Year Ended December 31,
|
||||||||||||
2012
|
2011
|
2010
|
||||||||||
(Dollars in thousands)
|
||||||||||||
Balance, at beginning of year
|
$ | (44 | ) | $ | - | $ | - | |||||
Total losses - (realized/unrealized):
|
||||||||||||
Included in earnings
|
532 | (44 | ) | - | ||||||||
Balance, at the end of year
|
$ | 488 | $ | (44 | ) | $ | - |
First Connecticut Bancorp, Inc. |
Notes to Consolidated Financial Statements |
First Connecticut Bancorp, Inc. |
Notes to Consolidated Financial Statements |
December 31, 2012
|
|||||||||||||
Quoted Prices in
|
Significant
|
Significant
|
|||||||||||
Active Markets for
|
Observable
|
Unobservable
|
|||||||||||
Identical Assets
|
Inputs
|
Inputs
|
|||||||||||
(Level 1)
|
(Level 2)
|
(Level 3)
|
|||||||||||
(Dollars in thousands)
|
|||||||||||||
Mortgage servicing rights
|
$ | - | $ | - | $ | 1,709 | |||||||
Loans held for sale
|
- | 9,626 | - | ||||||||||
Impaired loans
|
- | - | 35,908 | ||||||||||
Other real estate owned
|
- | - | 549 | ||||||||||
December 31, 2011
|
|||||||||||||
Quoted Prices in
|
Significant
|
Significant
|
|||||||||||
Active Markets for
|
Observable
|
Unobservable
|
|||||||||||
Identical Assets
|
Inputs
|
Inputs
|
|||||||||||
(Level 1)
|
(Level 2)
|
(Level 3)
|
|||||||||||
(Dollars in thousands)
|
|||||||||||||
Mortgage servicing rights
|
$ | - | $ | - | $ | 594 | |||||||
Loans held for sale
|
- | 1,039 | - | ||||||||||
Impaired loans
|
- | - | 38,783 | ||||||||||
Other real estate owned
|
- | - | 302 |
First Connecticut Bancorp, Inc. |
Notes to Consolidated Financial Statements |
Significant
|
Weighted
|
|||||||||||||||
(Dollars in thousands)
|
Fair Value
|
Valuation Methodology
|
Unobservable Inputs
|
Range of Inputs
|
Average Inputs
|
|||||||||||
Mortgage servicing rights
|
$ | 1,709 |
Discounted cash flows
|
Prepayment speed
|
6.5% - 8.7% | 13.0 | % | |||||||||
Discount rate
|
23.0% - 30.7% | 6.5 | % | |||||||||||||
Impaired loans
|
$ | 35,908 |
Appraisals
|
Discount for dated appraisal
|
0% - 20% | 10.0 | % | |||||||||
Discount for costs to sell
|
8% - 15% | 11.5 | % | |||||||||||||
Other real estate owned
|
$ | 549 |
Appraisals
|
Discount for costs to sell
|
8% - 10% | 9.0 | % |
First Connecticut Bancorp, Inc. |
Notes to Consolidated Financial Statements |
First Connecticut Bancorp, Inc. |
Notes to Consolidated Financial Statements |
At December 31, | |||||||||||||||||
2012
|
2011
|
||||||||||||||||
Estimated
|
Estimated
|
||||||||||||||||
Fair Value
|
Carrying
|
Fair
|
Carrying
|
Fair
|
|||||||||||||
Hierarchy Level
|
Amount
|
Value
|
Amount
|
Value
|
|||||||||||||
(Dollars in thousands)
|
|||||||||||||||||
Financial assets
|
|||||||||||||||||
Securities held-to-maturity
|
Level 2
|
$ | 3,006 | $ | 3,006 | $ | 3,216 | $ | 3,216 | ||||||||
Securities available-for-sale
|
See previous table
|
138,481 | 138,481 | 135,170 | 135,170 | ||||||||||||
Loans
|
Level 3
|
1,534,021 | 1,563,430 | 1,310,157 | 1,333,262 | ||||||||||||
Loans held-for-sale
|
Level 2
|
9,626 | 9,626 | 1,039 | 1,039 | ||||||||||||
Mortgage servicing rights
|
Level 3
|
1,327 | 1,709 | 497 | 594 | ||||||||||||
Federal Home Loan Bank of Boston stock
|
Level 2
|
8,939 | 8,939 | 7,449 | 7,449 | ||||||||||||
Financial liabilities
|
|||||||||||||||||
Deposits
|
|||||||||||||||||
Noninterest-bearing demand deposits
|
Level 1
|
247,586 | 247,586 | 195,625 | 195,625 | ||||||||||||
NOW accounts
|
Level 1
|
227,205 | 227,205 | 189,577 | 189,577 | ||||||||||||
Money market
|
Level 1
|
317,030 | 317,030 | 247,693 | 247,693 | ||||||||||||
Savings accounts
|
Level 1
|
179,290 | 179,290 | 157,913 | 157,913 | ||||||||||||
Time deposits
|
Level 2
|
359,344 | 363,156 | 385,874 | 389,857 | ||||||||||||
FHLB advances
|
Level 2
|
128,000 | 130,062 | 63,000 | 65,812 | ||||||||||||
Repurchase agreement borrowings
|
Level 2
|
21,000 | 22,819 | 21,000 | 22,963 | ||||||||||||
Repurchase liabilities
|
Level 2
|
54,187 | 54,189 | 64,466 | 64,466 | ||||||||||||
On-balance sheet derivative
financial instruments
|
|||||||||||||||||
Forward loan sales commitments:
|
|||||||||||||||||
Assets
|
Level 3
|
38 | 38 | - | - | ||||||||||||
Liabilities
|
Level 3
|
- | - | 5 | 5 | ||||||||||||
Interest rate swap derivative liability:
|
|||||||||||||||||
Assets
|
Level 2
|
8,379 | 8,379 | 6,812 | 6,812 | ||||||||||||
Liabilities
|
Level 2
|
8,379 | 8,379 | 6,812 | 6,812 | ||||||||||||
Derivative loan commitments
|
|||||||||||||||||
Assets
|
Level 3
|
450 | 450 | - | - | ||||||||||||
Liabilities
|
Level 3
|
- | - | 39 | 39 |
First Connecticut Bancorp, Inc. |
Notes to Consolidated Financial Statements |
To Be Well
|
||||||||||||||||||||||||
Minimum Required
|
Capitalized Under
|
|||||||||||||||||||||||
for Capital Adequacy
|
Prompt Corrective
|
|||||||||||||||||||||||
Actual
|
Purposes
|
Action
|
||||||||||||||||||||||
(Dollars in thousands)
|
Amount
|
Ratio
|
Amount
|
Ratio
|
Amount
|
Ratio
|
||||||||||||||||||
Farmington Bank:
|
||||||||||||||||||||||||
At December 31, 2012
|
||||||||||||||||||||||||
Total Capital (to Risk Weighted Assets)
|
$ | 203,344 | 14.44 | % | $ | 112,656 | 8.00 | % | $ | 140,820 | 10.00 | % | ||||||||||||
Tier I Capital (to Risk Weighted Assets)
|
185,743 | 13.19 | 56,328 | 4.00 | 84,493 | 6.00 | ||||||||||||||||||
Tier I Capital (to Average Assets)
|
185,743 | 10.44 | 71,166 | 4.00 | 88,957 | 5.00 | ||||||||||||||||||
At December 31, 2011
|
||||||||||||||||||||||||
Total Capital (to Risk Weighted Assets)
|
$ | 196,763 | 16.20 | % | $ | 97,167 | 8.00 | % | $ | 121,459 | 10.00 | % | ||||||||||||
Tier I Capital (to Risk Weighted Assets)
|
181,550 | 14.95 | 48,575 | 4.00 | 72,863 | 6.00 | ||||||||||||||||||
Tier I Capital (to Average Assets)
|
181,550 | 10.97 | 66,199 | 4.00 | 82,748 | 5.00 | ||||||||||||||||||
First Connecticut Bancorp, Inc.:
|
||||||||||||||||||||||||
At December 31, 2012
|
||||||||||||||||||||||||
Total Capital (to Risk Weighted Assets)
|
$ | 264,987 | 18.78 | % | $ | 112,881 | 8.00 | % | $ | 141,101 | 10.00 | % | ||||||||||||
Tier I Capital (to Risk Weighted Assets)
|
247,364 | 17.53 | 56,444 | 4.00 | 84,665 | 6.00 | ||||||||||||||||||
Tier I Capital (to Average Assets)
|
247,364 | 13.88 | 71,286 | 4.00 | 89,108 | 5.00 | ||||||||||||||||||
At December 31, 2011
|
||||||||||||||||||||||||
Total Capital (to Risk Weighted Assets)
|
$ | 272,365 | 22.38 | % | $ | 97,360 | 8.00 | % | $ | 121,700 | 10.00 | % | ||||||||||||
Tier I Capital (to Risk Weighted Assets)
|
257,152 | 21.13 | 48,680 | 4.00 | 73,020 | 6.00 | ||||||||||||||||||
Tier I Capital (to Average Assets)
|
257,152 | 15.51 | 66,319 | 4.00 | 82,899 | 5.00 |
First Connecticut Bancorp, Inc. |
Notes to Consolidated Financial Statements |
At December 31,
|
||||||||
2012
|
2011
|
|||||||
(Dollars in thousands)
|
||||||||
Assets
|
||||||||
Cash and cash equivalents
|
$ | 55,845 | $ | 72,989 | ||||
Deferred income taxes
|
2,607 | 2,591 | ||||||
Due from Farmington Bank
|
3,484 | - | ||||||
Investment in Farmington Bank
|
179,901 | 176,378 | ||||||
Prepaid expenses and other assets
|
27 | 27 | ||||||
Total assets
|
$ | 241,864 | $ | 251,985 | ||||
Liabilities
|
$ | 342 | $ | 5 | ||||
Stockholders' equity
|
241,522 | 251,980 | ||||||
Total liabilities and shareholders’ equity
|
$ | 241,864 | $ | 251,985 |
Condensed Statements of Operations
|
||||||||||||
For The Year Ended December 31,
|
||||||||||||
2012
|
2011
|
2010
|
||||||||||
(Dollars in thousands)
|
||||||||||||
Interest income
|
$ | 289 | $ | 132 | $ | - | ||||||
Contribution to Farmington Bank Community Foundation Inc.
|
- | (6,877 | ) | - | ||||||||
Noninterest expense
|
(609 | ) | (114 | ) | - | |||||||
Income tax benefit
|
72 | 2,336 | - | |||||||||
Loss before equity in undistributed earnings of Farmington Bank
|
(248 | ) | (4,523 | ) | - | |||||||
Equity in undistributed earnings of Farmington Bank
|
4,171 | 483 | 4,869 | |||||||||
Net income (loss)
|
$ | 3,923 | $ | (4,040 | ) | $ | 4,869 | |||||
Condensed Statements of Comprehensive Income (Loss)
|
||||||||||||
For The Year Ended December 31,
|
||||||||||||
2012 | 2011 | 2010 | ||||||||||
(Dollars in thousands)
|
||||||||||||
Net income (loss)
|
$ | 3,923 | $ | (4,040 | ) | $ | 4,869 | |||||
Other comprehensive loss, before tax
|
||||||||||||
Net change in unrealized losses on securities
|
(280 | ) | (698 | ) | (2,409 | ) | ||||||
Change related to employee benefit plans
|
(702 | ) | (3,790 | ) | (2,968 | ) | ||||||
Other comprehensive loss, before tax
|
(982 | ) | (4,488 | ) | (5,377 | ) | ||||||
Income tax benefit
|
(334 | ) | (1,526 | ) | (1,828 | ) | ||||||
Other comprehensive loss, net of tax
|
(648 | ) | (2,962 | ) | (3,549 | ) | ||||||
Comprehensive income (loss)
|
$ | 3,275 | $ | (7,002 | ) | $ | 1,320 |
First Connecticut Bancorp, Inc. |
Notes to Consolidated Financial Statements |
Condensed Statements of Cash Flows
|
||||||||||||
For The Year Ended December 31,
|
||||||||||||
2012
|
2011
|
2010
|
||||||||||
(Dollars in thousands)
|
||||||||||||
Cash flows from operating activities:
|
||||||||||||
Net income (loss)
|
$ | 3,923 | $ | (4,040 | ) | $ | 4,869 | |||||
Adjustments to reconcile net income (loss) to net cash
provided by (used in) operating activities:
|
||||||||||||
Contribution of stock to Farmington Bank
|
||||||||||||
Community Foundation, Inc.
|
- | 6,877 | - | |||||||||
Amortization of ESOP expense
|
1,263 | - | - | |||||||||
Share based compensation expense
|
4,011 | - | - | |||||||||
Equity in undistributed net income of Farmington Bank
|
(4,171 | ) | (483 | ) | (4,869 | ) | ||||||
Deferred income tax
|
13 | (2,338 | ) | - | ||||||||
Due from Farmington Bank
|
(3,484 | ) | - | - | ||||||||
Increase in prepaid expenses and other assets
|
- | (27 | ) | - | ||||||||
Increase in accrued expenses and other liabilities
|
337 | 5 | - | |||||||||
Net cash provided by (used in) operating activities
|
1,892 | (6 | ) | - | ||||||||
Cash flows from investing activities:
|
||||||||||||
Payments received on ESOP note receivable
|
- | 1,102 | - | |||||||||
Issuance of ESOP note receivable
|
- | (11,545 | ) | - | ||||||||
Capital contribution to Farmington Bank
|
- | (83,964 | ) | - | ||||||||
Net cash used in investing activities
|
- | (94,407 | ) | - | ||||||||
Cash flows from financing activities:
|
||||||||||||
Proceeds from common stock offering, net of offering cost
|
- | 167,838 | - | |||||||||
Purchase of common stock for ESOP
|
(5,376 | ) | - | - | ||||||||
Cancelation of shares for tax withholding
|
(407 | ) | - | - | ||||||||
Repurchase of common stock
|
(11,283 | ) | - | - | ||||||||
Cash dividend paid
|
(1,970 | ) | (536 | ) | - | |||||||
Net cash (used in) provided by financing activities
|
(19,036 | ) | 167,302 | - | ||||||||
Net (decrease) increase in cash and cash equivalents
|
(17,144 | ) | 72,889 | - | ||||||||
Cash and cash equivalents at beginning of year
|
72,989 | 100 | 100 | |||||||||
Cash and cash equivalents at end of year
|
$ | 55,845 | $ | 72,989 | $ | 100 |
First Connecticut Bancorp, Inc.
Notes to Consolidated Financial Statements
|
Year Ended December 31, 2012
|
||||||||||||||||
First
|
Second
|
Third
|
Fourth
|
|||||||||||||
quarter
|
quarter
|
quarter
|
quarter
|
|||||||||||||
(Dollars in thousands, except Per Share data)
|
||||||||||||||||
Interest income
|
$ | 15,427 | $ | 15,146 | $ | 15,780 | $ | 16,507 | ||||||||
Interest expense
|
2,473 | 2,347 | 2,393 | 2,415 | ||||||||||||
Net interest income
|
12,954 | 12,799 | 13,387 | 14,092 | ||||||||||||
Provision for allowance for loan losses
|
330 | 520 | 215 | 315 | ||||||||||||
Net interest income after provision for loan losses
|
12,624 | 12,279 | 13,172 | 13,777 | ||||||||||||
Noninterest income
|
1,313 | 1,978 | 2,145 | 4,054 | ||||||||||||
Noninterest expense
|
12,629 | 13,133 | 16,905 | 13,411 | ||||||||||||
Income (loss) before income taxes
|
1,308 | 1,124 | (1,588 | ) | 4,420 | |||||||||||
Income tax expense (benefit)
|
317 | 293 | (519 | ) | 1,250 | |||||||||||
Net income (loss)
|
$ | 991 | $ | 831 | $ | (1,069 | ) | $ | 3,170 | |||||||
Net income (loss) per share:
|
||||||||||||||||
Basic and Diluted
|
$ | 0.06 | $ | 0.05 | $ | (0.07 | ) | $ | 0.19 | |||||||
Year Ended December 31, 2011
|
||||||||||||||||
First
|
Second
|
Third
|
Fourth
|
|||||||||||||
quarter
|
quarter
|
quarter
|
quarter
|
|||||||||||||
(Dollars in thousands, except Per Share data)
|
||||||||||||||||
Interest income
|
$ | 14,731 | $ | 14,674 | $ | 14,659 | $ | 14,961 | ||||||||
Interest expense
|
2,780 | 2,760 | 2,672 | 2,614 | ||||||||||||
Net interest income
|
11,951 | 11,914 | 11,987 | 12,347 | ||||||||||||
Provision for allowance for loan losses
|
300 | 300 | 300 | 3,190 | ||||||||||||
Net interest income after provision for loan losses
|
11,651 | 11,614 | 11,687 | 9,157 | ||||||||||||
Noninterest income
|
1,281 | 1,429 | 1,728 | 1,250 | ||||||||||||
Noninterest expense
|
11,661 | 19,927 | 11,945 | 12,779 | ||||||||||||
Income (loss) before income taxes
|
1,271 | (6,884 | ) | 1,470 | (2,372 | ) | ||||||||||
Income tax expense (benefit)
|
255 | (2,239 | ) | 427 | (918 | ) | ||||||||||
Net income (loss)
|
$ | 1,016 | $ | (4,645 | ) | $ | 1,043 | $ | (1,454 | ) | ||||||
Net income (loss) per share:
|
||||||||||||||||
Basic and Diluted (1)
|
N/A | $ | (0.26 | ) | $ | 0.06 | $ | (0.09 | ) | |||||||
Pro forma net income (loss) per share (2):
|
||||||||||||||||
Basic and Diluted
|
$ | 0.06 | $ | (0.26 | ) | $ | 0.06 | $ | (0.09 | ) |
First Connecticut Bancorp, Inc.
Notes to Consolidated Financial Statements
|
3.2
|
Bylaws of First Connecticut Bancorp, Inc. (filed as Exhibit 3.2 to the Registration Statement on the Form S-1 filed for the Company on January 28, 2011, as amended, and incorporated herein by reference).
|
|
4.1
|
Form of Common Stock Certificate of First Connecticut Bancorp, Inc. (filed as Exhibit 4.1 to the Registration Statement on the Form S-1 filed for the Company on January 28, 2011, as amended, and incorporated herein by reference).
|
|
10.1
|
Phantom Stock Plan of Farmington Bank (filed as Exhibit 10.1 to the Registration Statement on the Form S-1 filed for the Company on January 28, 2011, as amended, and incorporated herein by reference).
|
|
10.2
|
Supplemental Executive Retirement Plan of Farmington Bank (filed as Exhibit 10.2 to the Registration Statement on the Form S-1 filed for the Company on January 28, 2011, as amended, and incorporated herein by reference).
|
|
10.3
|
Voluntary Deferred Compensation Plan for Directors and Key Employees (filed as Exhibit 10.3 to the Registration Statement on the Form S-1 filed for the Company on January 28, 2011, as amended, and incorporated herein by reference).
|
|
10.4
|
First Amendment to Voluntary Deferred Compensation Plan for Directors and Key Employees (filed as Exhibit 10.4 to the Registration Statement on the Form S-1 filed for the Company on January 28, 2011, as amended, and incorporated herein by reference).
|
|
10.4.1 | Second Amendment to Voluntary Deferred Compensation Plan for Directors and Key Employees (filed herewith). | |
10.5
|
Voluntary Deferred Compensation Plan for Key Employees (filed as Exhibit 10.5 to the Registration Statement on the Form S-1 filed for the Company on January 28, 2011, as amended, and incorporated herein by reference).
|
|
10.6
|
Life Insurance Premium Reimbursement Agreement between Farmington Bank and John J. Patrick, Jr. (filed as Exhibit 10.6 to the Registration Statement on the Form S-1 filed for the Company on January 28, 2011, as amended, and incorporated herein by reference).
|
|
10.7
|
Life Insurance Premium Reimbursement Agreement between Farmington Bank and Gregory A. White (filed as Exhibit 10.7 to the Registration Statement on the Form S-1 filed for the Company on January 28, 2011, as amended, and incorporated herein by reference).
|
|
10.8
|
Farmington Savings Bank Defined Benefit Employees’ Pension Plan, as amended (filed as Exhibit 10.8 to the Registration Statement on the Form S-1 filed for the Company on January 28, 2011, as amended, and incorporated herein by reference).
|
|
10.8.1 | Amendment to Farmington Savings Bank Defined Benefit Employees' Pension Plan as amended (filed herewith). | |
10.9
|
Annual Incentive Compensation Plan (filed as Exhibit 10.9 to the Registration Statement on the Form S-1 filed for the Company on January 28, 2011, as amended, and incorporated herein by reference).
|
|
10.10
|
Supplemental Retirement Plan Participation Agreement between John J. Patrick, Jr. and Farmington Bank (filed as Exhibit 10.10 to the Registration Statement on the Form S-1 filed for the Company on January 28, 2011, as amended, and incorporated herein by reference).
|
|
10.11
|
Supplemental Retirement Plan Participation Agreement between Michael T. Schweighoffer and Farmington Bank (filed as Exhibit 10.11 to the Registration Statement on the Form S-1 filed for the Company on January 28, 2011, as amended, and incorporated herein by reference).
|
|
10.12
|
Supplemental Retirement Plan Participation Agreement between Gregory A. White and Farmington Bank (filed as Exhibit 10.12 to the Registration Statement on the Form S-1 filed for the Company on January 28, 2011, as amended, and incorporated herein by reference).
|
|
10.13 | Employment Agreement among First Connecticut Bancorp, Inc., Farmington Bank and John J. Patrick, Jr. (filed as Exhibit 10.1 Employment Agreement on Form 8-K for the Company on April 24, 2012 and incorporated by reference). | |
10.13.1 |
Employment Agreement First Amendment among First Connecticut Bancorp, Inc., Farmington Bank and John J. Patrick, Jr.(filed as Exhibit 10.13.1 to the current report on the Form 8-K filed for the Company on February 28, 2013, as amended, and incorporated herein by reference).
|
|
10.14 | Life Insurance Premium Reimbursement Agreement between Farmington Bank and Michael T. Schweighoffer (filed as Exhibit 10.14 to the Form 10-K filed for the Company on May 15, 2012, and incorporated herein by reference). | |
10.15 | First Connecticut Bancorp, Inc. 2012 Stock Incentive Plan (incorporated by reference to Appendix A in the Definitive Proxy Statement on Form 14A filed on June 6, 2012 and amended on July 2, 2012 (File No. 001-35209-12890818 and 12960688). | |
21.1
|
Subsidiaries of First Connecticut Bancorp, Inc. and Farmington Bank (filed as Exhibit 21.1 to the Registration Statement on the Form S-1 filed for the Company on January 28, 2011, as amended, and incorporated herein by reference).
|
|
31.1
|
Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, signed by the Company’s Chief Executive Officer.
|
|
31.2
|
Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, signed by the Company’s Chief Financial Officer.
|
|
32.1
|
Written Statement pursuant to 18 U.S.C. § 1350, as created by section 906 of the Sarbanes-Oxley Act of 2002, signed by the Company’s Chief Executive Officer.
|
|
32.2
|
Written Statement pursuant to 18 U.S.C. § 1350, as created by section 906 of the Sarbanes-Oxley Act of 2002, signed by the Company’s Chief Financial Officer.
|
101
|
Interactive data files pursuant to Rule 405 of Regulation S-t: (i) the Consolidated Statements of Condition, (ii) the Consolidated Statements of Operations, (iii) the Consolidated Statement of Changes in
Stockholders’ Equity, (iv) the Consolidated Statements of Cash Flows, and (iv) Notes to Unaudited Consolidated Financial Statements tagged as blocks of text and in detail.*
|
|
*
|
As provided in Rule 406T of Regulation S-T, this information is furnished and not filed for purposes of Sections 11 and 12 of the Securities Act of 1933 and Section 18 of the Securities Act of 1934.
|
First Connecticut Bancorp, Inc.
|
||
By:
|
/s/ John J. Patrick, Jr.
|
|
John J. Patrick, Jr.
|
||
Date: March 18, 2013
|
Chairman, President and Chief Executive
Officer
|
Signatures
|
Title
|
Date
|
||
/s/ John J. Patrick Jr.
|
Chairman of the Board, President and Chief Executive Officer
|
March 18, 2013
|
||
John J. Patrick, Jr.
|
(Principal Executive Officer)
|
|||
/s/ Gregory A. White
|
Executive Vice President and Chief Financial Officer
|
March 18, 2013
|
||
Gregory A. White
|
(Principal Financial Officer)
|
|||
/s/ Kimberly Rozanski Ruppert
|
Senior Vice President and Chief Accounting Officer
|
March 18, 2013
|
||
Kimberly Rozanski Ruppert
|
(Principal Accounting Officer)
|
|||
/s/ Ronald A. Bucchi
|
Director
|
March 18, 2013
|
||
Ronald A. Bucchi
|
||||
/s/ John J. Carson
|
Director
|
March 18, 2013
|
||
John J. Carson
|
||||
/s/ David M. Drew
|
Director
|
March 18, 2013
|
||
David M. Drew
|
||||
/s/ Robert F. Edmunds, Jr.
|
Director
|
March 18, 2013
|
||
Robert F. Edmunds, Jr.
|
||||
/s/ Kevin S. Ray
|
Director
|
March 18, 2013
|
||
Kevin S. Ray
|
||||
/s/ Michael A. Ziebka
|
Director
|
March 18, 2013
|
||
Michael A. Ziebka
|
Farmington Bank
|
|
By
/s/ Lee D. Nordstrom
|
|
Its
SVP Human Resources
|
|
First Connecticut Bancorp | |
By
/s/ Gregory A. White
|
|
Its
Chief Financi al Officer
|
(a)
|
The Employer established this Plan effective July 1, 1952. The Employer is freezing the benefits under the Plan as of February 28, 2013, and is directing that the Trust be continued and that distribution of benefits to Participants be made at such time and in such manner as though the Plan had not frozen benefit accruals.
|
(b)
|
All provisions of the Plan shall be construed and interpreted in a manner consistent with the freezing of benefit accruals under the Plan as of February 28, 2013.
|
WITNESS | FARMINGTON BANK |
/s/ Gregory A. White | By: /s/ Lee D. Nordstrom |
Title:
SVP Human Resources
|
|
Exhibit 31.1 |
1.
|
I have reviewed this Annual Report on Form 10-K of First Connecticut Bancorp, Inc., a Maryland corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15-15(f) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors:
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: March 18, 2013
|
/s/ John J. Patrick Jr.
|
|
John J. Patrick, Jr.
|
||
Chairman, President and Chief Executive Officer
|
Exhibit 31.2 |
1.
|
I have reviewed this Annual Report on Form 10-K of First Connecticut Bancorp, Inc., a Maryland corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15-15(f) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors:
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: March 18, 2013
|
/s/ Gregory A. White
|
|
Gregory A. White
|
||
Executive Vice President and Chief Financial Officer
|
Exhibit 32.1 |
1.
|
the Report fully complies with the requirements of Sections 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date: March 18, 2013
|
/s/ John J. Patrick Jr.
|
|
John J. Patrick, Jr.
|
||
Chairman, President and Chief Executive Officer
|
Exhibit 32.2 |
1.
|
the Report fully complies with the requirements of Sections 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date: March 18, 2013
|
/s/ Gregory A. White
|
|
Gregory A. White
|
||
Executive Vice President and Chief Financial Officer
|