First Colebrook Bancorp, Inc. Releases June 30, 2017 Consolidated Earnings

COLEBROOK, N.H., Aug. 7, 2017 /PRNewswire/ -- First Colebrook Bancorp, Inc.(OTCQX: FCNH), the bank holding company of Granite Bank, today announced its consolidated unaudited financial results for the six months ended June 30, 2017. 

First Colebrook Bancorp, Inc. reported unaudited, consolidated net income for the six (6) month period ended June 30, 2017 of  $134,100 as compared to $465,170 for the six (6) month period ended June 30, 2016.

These results reflect previously disclosed non-recurring bank holding company events relating to the refinancing of First Colebrook Bancorp, Inc.'s subordinated debt and its sale of foreclosed real estate that was previously carried as other real estate owned (OREO) on the financial statements of First Colebrook Bancorp, Inc.  The combined expenses of these two items resulted in a charge to second quarter and year-to-date 2017 earnings of $245,391, net of taxes, or $0.25 per share.

While these non-recurring events effected bank holding company income, the primary source of income for First Colebrook Bancorp, Inc. is its wholly owned bank subsidiary, Granite Bank.  Unaudited net income from Granite Bank for the three (3) and six (6) months ended June 30, 2017 was $355,660 and $550,423, respectively, as compared with $392,369 and $589,913 for the same periods in 2016.  Results for both the three (3) and six (6) months ended June 30, 2016, reflected security gains of $248,089, net of taxes, or $0.33 per share.

First Colebrook Bancorp, Inc. (the Company) and its subsidiary Granite Bank (the Bank) believes that these recently completed actions should better position the Company to compete more profitably in the future.  Completed and ongoing actions include the following:

• The restructuring of First Colebrook Bancorp, Inc.'s subordinated debt in the second quarter of 2017 enabled the Company to reduce its subordinated debt outstanding and reduce the interest rate and expense on outstanding debt.
• The previously announced sale in the second quarter of 2017 by First Colebrook Bancorp, Inc. of its only OREO property will eliminate the expense associated with carrying such non-productive property while returning cash to the Company. In addition, the sale of this property into the local economy is expected to encourage additional economic development in Coos County.
• The Bank has taken and continues to take actions to manage and improve its net interest margin with ongoing prudent asset and liability management initiatives.
• The Bank continues to seek strategic opportunities to profitably manage its balance sheet while developing new customer relationships and deepening existing customer relationships.
• The Bank has taken steps and continues to evaluate and manage its personnel expenses through attrition and retirement opportunities, as well as executing other non-interest expense control initiatives.

The Company strategically managed its balance sheet, reducing total assets to $262.4 million at June 30, 2017 from $270.7 million at June 30, 2016. Total cash and cash equivalents at June 30, 2017 decreased to $5.4 million from $26.8 million at June 30, 2016 as short term funds were invested in loan growth initiatives. While reducing overall asset size, the Company grew net loans to $219.7 million at June 30, 2017 from $200.5 million at June 30, 2016.

Net interest and dividend income for the six months ended June 30, 2017 grew by $101,261 compared to the six months ended June 30, 2016. Through the second quarter 2017, a provision of $255,000 was made to the Allowance for Loan Losses compared to $100,000 during the same period a year ago.  This increase in loan loss provision was to accommodate 2017 loan growth.  Non-interest income in both 2017 and 2016 reflect the non-recurring items described above including the OREO loss of $286,251 in 2017 and the $409,455 gain on sale of investments in 2016. Other income increased to $638,413 at June 30, 2017 from $307,378 at June 30, 2016 due in large part to the secondary market loans that the Company began booking in fourth quarter 2016.

Non-interest expense increased $78,000 for the six months ended June 30, 2017 from the six months ended June 30, 2016. Included in consolidated non-interest expenses for the six months ended was the non-recurring write-off of refinancing sub debt of $118,751. Despite the addition of a mortgage division and related personnel expenses, overall salaries and benefits increased only slightly by $24,000 in comparing the first six (6) months of 2017 to the same period in 2016.  As noted previously, Management continues to closely monitor staffing levels and proactively controls non-interest expenses to achieve competitive efficiencies.

In November 2016, the number of the Company's common shares outstanding increased by 250,000 shares to 999,243 common shares from 749,243 common shares as a result of the Company's completion of its stock offering.  Both the increase in number of common shares outstanding and the previously referenced non-recurring events were the primary reasons for a decrease in earnings per common share for the six months ended June 30, 2017, which decreased to $0.13 compared to $0.48 per share for the same period in 2016.  

Common shareholder equity (total equity less issued preferred stock) increased to $24.8 million at June 30, 2017 from $20.8 million at June 30, 2016. The book value per share of common stock decreased to $24.85 at June 30, 2017 from $27.82 per share a year earlier, as restated.  The tangible book value per share of common stock decreased to $24.33 at June 30, 2017 from $27.58 a year earlier, as restated.

The unaudited financial balance sheet and income statement can be found on our website at: www.firstcolebrookbancorp.com under "Investor Relations; Filings/ Documents/ Quarterly Report". 

First Colebrook Bancorp, Inc. is a single bank holding company formed in 1984 and headquartered in Colebrook, New Hampshire.  It's wholly owned subsidiary, Granite Bank, f/k/a First Colebrook Bank, was established in 1889.  Granite Bank operates four banking offices located in Colebrook, Concord, Amherst and Portsmouth, New Hampshire and a loan production office in Portsmouth, New Hampshire.                

This press release may contain forward-looking statements regarding the financial performance, business prospects, growth, and operating strategies of First Colebrook Bancorp, Inc.  For these statements, First Colebrook Bancorp, Inc. claims the protections of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.  Statements in this press release should be considered in conjunction with other information available about First Colebrook Bancorp, Inc., including the information in the filings we make to regulatory authorities.  Forward-looking statements are based on management's expectations and are subject to a number of risks and uncertainties.  We have tried, wherever possible, to identify such statements by using words such as "anticipate," "estimate," "project," "intend," "plan," "believe," "will," and similar expressions in connection with any discussion of future operating or financial performance.  Although management believes that the expectations reflected in such forward-looking statements are reasonable, actual results may differ materially from those expressed or implied in such statements.  Risks and uncertainties that could cause actual results to differ materially include risk factors relating to the banking industry and the other factors detailed from time to time in First Colebrook Bancorp, Inc. reports publically issued.  Undue reliance should not be placed on the forward-looking statements, which speak only as of the date of this press release.  First Colebrook Bancorp, Inc.  does not undertake, and specifically disclaims any obligation, to publicly release the result of any revisions that may be made to update any forward-looking statements to reflect the events or circumstances after the date on which the forward-looking statement is made, or reflect the occurrence of unanticipated events, except to the extent required by law.

For additional information, contact Avis Brosseau, Senior Vice President/Chief Financial Officer at abrosseau@granitebank.com or by calling 603-237-7016.

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SOURCE First Colebrook Bancorp, Inc.