First National Community Bancorp, Inc. Reports 4th Quarter and Annual Results for 2012

First National Community Bancorp, Inc. Reports 4th Quarter and Annual Results
                                   for 2012

PR Newswire

DUNMORE, Pa., March 28, 2013

DUNMORE, Pa., March 28, 2013 /PRNewswire/ --First National Community Bancorp,
Inc. (OTCQB: FNCB), the parent company of Dunmore-based First National
Community Bank, announced today that it has filed its annual report on Form
10-K for the year ended December 31, 2012. Company results for the fourth
quarter of 2012 include a net loss of $5.1 million, or ($0.30) per basic and
diluted share, compared to a net profit of $436,000, or $0.03 per basic and
diluted share, for the prior year fourth quarter. Total interest income was
$8.9 million compared to $9.7 million for the fourth quarter 2011, and total
interest expense for the fourth quarter 2012 was $2.1 million, down 25% from
$2.8 million in the prior year quarter. The Company's fourth quarter 2012
provision for loan and lease losses was $689,000 compared to a credit of $1.5
million for the fourth quarter 2011. Non-interest expense was $10.8 million,
down $337,000, or 3%, from $11.1 million in the prior year fourth quarter,
reflecting the Company's focus on reducing non-interest expenses. Fourth
quarter 2012 legal expense of approximately $1 million remained elevated above
the Company's estimated ongoing cost going forward. These costs are expected
to remain above projected normal operating levels until certain legal matters
are resolved.

2012 Summary Highlights:

  oThe Company returned to current SEC reporting status
  oThe Bank's total risk-based capital at December 31, 2012 was $78.4
    million, or 11.79% of risk-weighted assets
  oNon-performing loans decreased 51%, or $10.2 million, from December 31,
    2011
  oThe non-performing loans to total loans ratio at year-end decreased by 131
    basis points to 1.62%, compared to December31, 2011
  oOther real estate owned ("OREO") was down 43% compared to December 31,
    2011
  oThe Company's liquidation of higher-risk investments, primarily trust
    preferred debt securities, led to a reduction of credit exposure in its
    investment securities portfolio.

"We continued to positively reduce the amount of risk and leverage on our
balance sheet in 2012. Although this process came at a cost to current
earnings, we believe that these measures position our organization for
improved financial performance and operating results in 2013 and beyond. Our
asset quality metrics showed improvement, reflecting our heightened efforts to
work-out nonperforming loans and to dispose of other real estate owned. Our
year-end ratio for non-performing loans as a percentage of total loans
declined to 1.62%, which was 77 basis points better than the average for all
commercial banks between $100 million and $1 billion in total assets, as per
the FDIC statistics on depository institutions report at December 31, 2012,"
said Steven R. Tokach, President and Chief Executive Officer. "We also
utilized our excess liquidity to reduce our Federal Home Loan Bank borrowings
which positively impacted our funding cost. This initiative helped to drive
our 2012 net interest margin up 18 basis points compared to 2011, and improved
our net interest margin for the fourth quarter by 32 basis points compared to
theprior year quarter. These accomplishments were realized in a
less-than-ideal banking economy characterized by persistently low interest
rates, margin compression and intense competition for quality lending
opportunities. Even as the environment poses challenges to our industry, we
continue to focus on the customer, as reflected in our recent announcement to
relocate our downtown Wilkes-Barre branch to an even more convenient location
to better serve business and personal banking customers in the area. In
addition, the Bank launched several electronic banking enhancements, including
mobile remote deposit and other additions to our menu of online banking
products. We believe that this reflects our focus on maintaining the strong
competitive position that FNCB has historically enjoyed in Northeastern
Pennsylvania."

Summary Results for 2012

The Company's net loss for 2012 was $13.7 million, or $(0.83) per basic and
diluted share, compared to a loss of $335,000, or $(0.02) per basic and
diluted share, for 2011.

Total interest income for 2012 was $37.0 million, down $5.9 million, or 13.7%,
from $42.9 million in 2011, primarily a result of lower average investment
securities, loan balances and lower yields. Total interest expense of $9.2
million was down $4.6 million, or 34%, from $13.8 million in 2011, reflecting
a decrease in the average balance of interest-bearing liabilities and a 31
basis-point decline in the average rate paid on interest-bearing liabilities.
As a result, net interest income for 2012 was $27.8 million, down $1.3
million from $29.1 million in the prior year. The 2012 provision for loan and
lease losses was $4.1 million, up $3.6 million, from $0.5 million in 2011,
primarily resulting from one large commercial charge-off totaling $3.2 million
that occurred during the third quarter.

Total non-interest income was $4.3 million for 2012, down $8.6 million, or
66.7%, from $12.9 million for the prior year period. The reduction was
primarily the result of a net loss on the sale of investment securities of
$1.7 million in 2012 compared to a net gain of $5.1 million on the sale of
investment securities in 2011, as well as smaller gains on the sale of other
real estate owned of $305,000 in 2012 compared to $2.5 million in 2011.

Total non-interest expense for 2012 was $41.7 million, down from $41.8 million
in 2011, primarily resulting from a $1.7 million decrease in OREO expense and
a $1.0 million decrease in professional fees, and partially offset by
increases in legal expenses of $1.5 million. Professional fees are expected
to decline to normalized levels in 2013 reflecting the Company's recent return
to current SEC reporting status. Legal fees are expected to remain at a
heightened level until certain litigation matters are resolved.

Continued Improvement in Asset Quality

FNCB's asset quality ratios continued to improve through the end of 2012,
reflecting heightened work-out efforts on nonperforming loans, as well as the
disposal of foreclosed properties and all of the trust preferred debt
securities previously held in our portfolio. Total non-performing loans at
December 31, 2012 were $9.7 million, down $10.2 million, or 51%, from December
31, 2011, and down $3.7 million, or 27%, from September 30, 2012. The ratio
of non-performing loans to total loans was 1.62% at December 31, 2012, an
improvement of 131 basis points from 2.93% at December 31, 2011, and an
improvement of 49 basis points compared to 2.11% at September 30, 2012.

Financial Condition

The Company's total assets at December 31, 2012 year end were $968.3 million,
a decrease of $134.4 million compared to December 31, 2011. Total deposits
were $854.6 million, a decrease of $102.5 million from December 31, 2011.
Total borrowed funds declined by $29.7 million to $53.9 million compared to
December 31, 2011. FNCB's capital ratios for the Bank at December 31, 2012
were as follows: total risk-based capital ratio of 11.79%, Tier 1 risk-based
capital ratio of 10.52%, and Tier 1 leverage ratio of 7.20%.

Availability of Filings

A copy of the Company's Form 10-K for the period ended December 31, 2012 will
be provided upon request from: Shareholder Relations, First National Community
Bancorp, Inc., 102 East Drinker Street, Dunmore, PA 18512 or by calling (570)
348-6419. The 2012 Form 10-K is also available on the Investor Relations page
of the Company's website, www.fncb.com, and on the SEC website at:

http://www.sec.gov/edgar/searchedgar/companysearch.html

About First National Community Bank:
First National Community Bancorp, Inc. is the bank holding company of First
National Community Bank, which provides personal, small business and
commercial banking services to individuals and businesses throughout
Lackawanna, Luzerne, Monroe and Wayne Counties in Northeastern Pennsylvania.
The institution was established as a National Banking Association in 1910 as
The First National Bank of Dunmore, and has been operating under its current
name since 1988. The Company's common stock trades on the OTCQB under the
symbol FNCB.

Additional product, Company and investor information is available at FNCB's
web site, please visit www.fncb.com.

MEDIA CONTACT:                            INVESTOR CONTACT:
Joseph J. Earyes, CPA                     James M. Bone, Jr., CPA
First Senior Vice President and           Executive Vice President and
Chief Retail Banking & Operations Officer Chief Financial Officer
First National Community Bank             First National Community Bank
(570) 558-6701                            (570) 348-6419
joseph.earyes@fncb.com                    james.bone@fncb.com

This release contains forward-looking statements as defined in the Private
Securities Litigation Reform Act of 1995. Actual results and trends could
differ materially from those set forth in such statements due to various
risks, uncertainties and other factors (some of which are beyond the Company's
control). The words "may," "could," "should," "would," "believe,"
"anticipate," "estimate," "expect," "intend," "plan" and similar expressions
are intended to identify forward-looking statements. Such risks, uncertainties
and other factors that could cause actual results and experience to differ
include, but are not limited to, the following: the strength of the United
States economy in general and the strength of the local economies in the
Company's markets; the effects of, and changes in trade, monetary and fiscal
policies and laws, including interest rate policies of the Board of Governors
of the Federal Reserve System; inflation, interest rate, market and monetary
fluctuations; the timely development of and acceptance of new products and
services; the impact of the Company's ability to comply with its regulatory
agreements and orders; the effectiveness of the Company's internal control
over financial reporting and disclosure controls; the ability of the Company
to attract additional capital investment; the impact of changes in financial
services' laws and regulations (including laws concerning taxes, banking,
securities and insurance); technological changes; changes in consumer spending
and saving habits; the nature, extent, and timing of governmental actions and
reforms, and the success of the Company at managing the risks involved in the
foregoing and other risks and uncertainties, including those detailed in the
Company's filings with the Securities and Exchange Commission. The Company
does not undertake to update any forward looking statement, whether written or
oral, that may be made from time to time by or on behalf of the Company to
reflect events or circumstances occurring after the date of this release.

SOURCE First National Community Bancorp, Inc.

Website: http://www.fncb.com
 
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