FCFP First Community Financial Partners, Inc.

Fourth Quarter 2016 Highlights

First Community Financial Partners, Inc. (NASDAQ:FCFP) (“First Community,” “FCFP” or the “Company”), the parent company of First Community Financial Bank (the “Bank”), today reported financial results as of and for the three and twelve months ended December 31, 2016.

Net income applicable to shareholders for the quarter ended December 31, 2016 was $2.7 million, or $0.15 per diluted share, compared with $2.9 million, or $0.17 per diluted share, for the quarter ended December 31, 2015.  Financial results for the fourth quarter of 2015 were positively impacted by a negative provision for credit losses of $515,000.  Pre-tax, pre-provision core income was $4.3 million in the fourth quarter of 2016, an increase of 11.29% from $3.8 million in the same period of the prior year.

“We delivered a strong performance in the fourth quarter, driven by positive trends in revenue, operating efficiencies and asset quality,” said Roy Thygesen, Chief Executive Officer of First Community.

“We had another strong quarter of business development, resulting in organic loan growth of 15% on an annualized basis.  We are generating well balanced loan production and seeing solid growth across all of our major lending areas.”

“We were able to create significant franchise value in 2016 through organic growth and the completion of our first acquisition.  We intend to continue to execute on our core strategies in 2017, focusing on developing additional commercial banking relationships with small- and middle-market companies and exploring other acquisitions in our existing footprint that can strengthen our core deposit base.  We anticipate another year of double-digit organic loan growth, increased operating efficiencies, and stable credit quality in 2017, resulting in further improvement in our overall level of profitability and additional value being created for our shareholders,” said Mr. Thygesen.

Fourth Quarter 2016 Financial Results

Loans

At December 31, 2016, total loans were $991.6 million, an increase of $34.7 million, or 3.62%, since the end of the third quarter of 2016, and $219.3 million, or 28.39%, year-over-year.  The loan growth was the result of a continued strong loan pipeline along with results produced by the addition of six commercial lenders and one new leasing officer hired during the first quarter of 2016.

Commercial loans grew $6.9 million, or 2.52%, since the end of the third quarter and $102.2 million, or 56.89%, year-over-year.  Commercial real estate loans increased $6.0 million, or 1.42%, since the end of the third quarter and $44.9 million, or 11.78%, year-over-year.  Residential real estate loans grew $8.6 million, or 5.13%, since the end of the third quarter and $40.1 million, or 29.53%, year-over-year.  Construction loans were up $7.5 million, or 18.83%, since the third quarter and $25.3 million, or 114.37%, year-over-year. 

Deposits and Other Borrowings

At December 31, 2016, total deposits were $1.1 billion, an increase of $17.9 million, or 1.68%, since the end of the third quarter and $217.2 million, or 25.08%, year-over-year.

Noninterest bearing demand deposits increased $1.6 million, or 0.65%, since the end of the third quarter and $51.8 million, or 26.42%, year-over-year. Interest bearing transactional accounts (NOW, savings and money market accounts) increased $28.1 million, or 5.85%, during the fourth quarter of 2016 and $136.0 million, or 36.52%, year-over-year.  Time deposits decreased $11.8 million, or 3.48%, to $326.9 million at December 31, 2016, from $338.7 million at September 30, 2016, and increased $29.4 million, or 9.87%, year-over-year.   The ratio of time deposits to interest bearing deposits was 39.13% at December 31, 2016, down from 41.35% at September 30, 2016. 

Other borrowings increased $4.5 million, or 7.34%, since the end of the third quarter due to higher FHLB borrowings resulting from loan growth during the fourth quarter, partially offset by the payoff of our secured borrowings of $7.0 million during the quarter.

Net Interest Income and Margin

Fourth quarter 2016 net interest income was up $418,000, or 4.26%, from the third quarter of 2016. The increase was primarily attributable to an increase in average loan balances, partially offset by a lower net interest margin. 

The Company’s net interest margin was 3.42% for the fourth quarter of 2016, compared to 3.40% in the third quarter of 2016.  The increase was due to the effect of the prime rate increase in mid December 2016.

Noninterest Income and Expense

Fourth quarter 2016 noninterest income decreased $1.9 million, or 67.62%, from the third quarter of 2016 and increased $3.0 million, or 54.33%, from the year ended December 31, 2015.  The decrease from the third quarter was primarily attributable to a $1.9 million bargain purchase option gain recorded in the third quarter related to the acquisition of Mazon State Bank.

Service charges on deposits decreased $4,000, or 1.38%, from the third quarter of 2016, which was primarily the result of  a decrease in overdraft fees, partially offset by an increase in account analysis charges.  Mortgage income was also up $45,000, or 26.63%, for the fourth quarter of 2016, compared to the third quarter, as a result of higher mortgage sale volumes.

Fourth quarter 2016 noninterest expense decreased $140,000, or 1.98%, from the third quarter of 2016 due to reduced data processing fees following the integration of Mazon State Bank, partially offset by increased incentive compensation expense.

Salaries and benefits expense increased $497,000, or 13.04%, from the third quarter 2016 due to increased incentive compensation expense, partially offset by cost savings from the integration of Mazon State Bank.    Data processing fees decreased $433,000, or 61.86%, from the third quarter due to lower data processing conversion expenses following the integration of Mazon State Bank.

Asset Quality

Total nonperforming assets decreased $2.6 million, or 28.48%, to $6.6 million at December 31, 2016 from $9.2 million at September 30, 2016.  The ratio of nonperforming assets to total assets was 0.52% at December 31, 2016 compared to 0.74% at September 30, 2016.  The decrease was the result of the sale of $2.6 million in nonaccrual loans, $1.1 million in loans transferred to loans held for sale, and the charge-offs recorded in the quarter.  This outflow was partially offset by new additions to nonaccrual loans.

The Company had net charge-offs on loans of $783,000 in the fourth quarter of 2016, compared to net charge-offs of $143,000 in the third quarter of 2016.  The net charge-offs in the fourth quarter of 2016 primarily related to one loan relationship totaling $4.5 million that was placed on non-accrual status during the third quarter of 2016.  At year-end 2016, $1.1 million of this relationship remained and was held for sale.  This sale took place after year-end and this loan relationship has been paid off in full.

The ratios of the Company’s allowance for loan losses to nonperforming loans and allowance for loan losses to total loans were 199.52% and 1.18% at December 31, 2016, respectively.

The Company recorded a provision for loan losses in the fourth quarter of 2016 of $183,000, primarily as a result of  the growth in the loan portfolio.

About First Community Financial Partners, Inc.: First Community Financial Partners, Inc., headquartered in Joliet, Illinois, is a bank holding company whose common stock trades on the NASDAQ Capital Market (NASDAQ:FCFP). First Community Financial Partners has one bank subsidiary, First Community Financial Bank. First Community Financial Bank, based in Plainfield, Illinois, has locations in Joliet, Plainfield, Homer Glen, Channahon, Naperville, Burr Ridge, Mazon, Braidwood, and Diamond, Illinois. The Bank is dedicated to its founding principles by being actively involved in the communities it serves and providing exceptional personal service delivered by experienced local professionals.

Special Note Concerning Forward-Looking Statements

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Any statements in this release other than statements of historical facts, including statements about management’s beliefs and expectations, are forward-looking statements and should be evaluated as such. These statements are made on the basis of management’s views and assumptions regarding future events and business performance. Words such as “estimate,” “believe,” “anticipate,” “expect,” “intend,” “plan,” “target,” “project,” “should,” “may,” “will” and similar expressions are intended to identify forward-looking statements. Forward-looking statements (including oral representations) involve risks and uncertainties that may cause actual results to differ materially from any future results, performance or achievements expressed or implied by such statements. These risks and uncertainties involve a number of factors related to the businesses of First Community and its wholly owned bank subsidiary, including: risks associated with First Community’s possible pursuit of acquisitions; unexpected results of acquisitions, including the acquisition of Mazon State Bank; economic conditions in First Community’s, and its wholly owned bank subsidiary’s service areas; system failures; losses of large customers; disruptions in relationships with third party vendors; losses of key management personnel and the inability to attract and retain highly qualified management personnel in the future; the impact of legislation and regulatory changes on the banking industry, including the implementation of the Basel III capital reforms; losses related to cyber-attacks; and liability and compliance costs regarding banking regulations; and changes in local, national and international economic conditions. These and other risks and uncertainties are discussed in more detail in First Community’s filings with the Securities and Exchange Commission, including First Community’s Annual Report on Form 10-K filed on March 14, 2016.

Many of these risks are beyond management’s ability to control or predict. All forward-looking statements attributable to First Community, and its wholly owned bank subsidiary, or persons acting on behalf of each of them are expressly qualified in their entirety by the cautionary statements and risk factors contained in this communication. Because of these risks, uncertainties and assumptions, you should not place undue reliance on these forward-looking statements. Furthermore, forward-looking statements speak only as of the date they are made. Except as required under the federal securities laws or the rules and regulations of the Securities and Exchange Commission, First Community does not undertake any obligation to update or review any forward-looking information, whether as a result of new information, future events or otherwise.

FINANCIAL SUMMARY
	December 31, 2016			September 30, 2016			June 30, 2016			March 31, 2016			December 31, 2015
Period-End Balance Sheet
(In thousands)(Unaudited)
Assets
Cash and due from banks	$	16,225		$	21,622		$	13,777		$	9,132		$	10,699
Interest-bearing deposits in banks	8,548			33,349			19,335			30,558			7,406
Securities available for sale	202,198			188,062			179,517			203,874			205,604
Mortgage loans held for sale	1,230			1,331			711			133			400
Loans held for sale	1,085			—						—			—
Commercial real estate	425,910			419,958			410,461			378,304			381,098
Commercial	281,804			274,889			239,038			181,142			179,623
Residential 1-4 family	175,978			167,388			143,908			139,208			135,864
Multifamily	36,703			31,880			30,809			31,511			34,272
Construction and land development	47,338			39,836			30,834			27,798			22,082
Farmland and agricultural production	12,628			12,985			9,235			9,060			9,989
Consumer and other	7,967			9,280			7,924			7,250			9,391
Leases	3,290			739			448			—			—
Total loans and leases	991,618			956,955			872,657			774,273			772,319
Allowance for loan and lease losses	11,684			12,284			12,044			11,335			11,741
Net loans and leases	979,934			944,671			860,613			762,938			760,578
Other assets	58,990			57,563			51,409			54,227			55,965
Total Assets	$	1,268,210		$	1,246,598		$	1,125,362		$	1,060,862		$	1,040,652
Liabilities and Shareholders' Equity
Noninterest bearing deposits	$	247,856		$	246,262		$	203,258		$	204,414		$	196,063
Savings deposits	64,695			61,399			40,603			38,481			36,206
NOW accounts	160,862			151,243			103,324			104,136			102,882
Money market accounts	282,865			267,667			238,229			237,873			233,315
Time deposits	326,878			338,680			311,416			294,076			297,525
Total deposits	1,083,156			1,065,251			896,830			878,980			865,991
Total borrowings	66,419			61,879			114,701			72,237			68,315
Other liabilities	4,920			4,304			2,722			2,855			3,305
Total Liabilities	1,154,495			1,131,434			1,014,253			954,072			937,611
Shareholders’ equity	113,715			115,164			111,109			106,790			103,041
Total Shareholders’ Equity	113,715			115,164			111,109			106,790			103,041
Total Liabilities and Shareholders’ Equity	$	1,268,210		$	1,246,598		$	1,125,362		$	1,060,862		$	1,040,652

FINANCIAL SUMMARY
	Three months ended,
	December 31, 2016			September 30, 2016			June 30, 2016			March 31, 2016			December 31, 2015
Interest income:	(In thousands, except per share data)(Unaudited)
Loans, including fees	$	10,663		$	10,229		$	9,024		$	8,508		$	8,401
Securities	1,033			1,041			1,042			1,101			1,117
Federal funds sold and other	53			43			21			19			19
Total interest income	11,749			11,313			10,087			9,628			9,537
Interest expense:
Deposits	1,150			1,081			957			940			986
Federal funds purchased and other borrowed funds	61			112			119			93			87
Subordinated debentures	297			297			297			297			297
Total interest expense	1,508			1,490			1,373			1,330			1,370
Net interest income	10,241			9,823			8,714			8,298			8,167
Provision for loan losses	183			383			500			—			(515		)
Net interest income after provision for loan losses	10,058			9,440			8,214			8,298			8,682
Noninterest income:
Service charges on deposit accounts	285			289			207			204			190
Gain on sale of loans	9			—			7			—			—
Gain on sale of securities	—			14			603			—			212
Mortgage fee income	214			169			109			78			96
Bargain purchase gain	—			1,920			—			—			—
Other	390			381			315			273			261
Total noninterest income	898			2,773			1,241			555			759
Noninterest expenses:
Salaries and employee benefits	4,309			3,812			3,311			3,256			3,004
Occupancy and equipment expense	548			568			429			437			494
Data processing	267			700			690			257			203
Professional fees	286			369			375			392			68
Advertising and business development	245			328			262			215			219
Losses on sale and writedowns of foreclosed assets, net	—			1			31			16			109
Foreclosed assets expenses, net of rental income	26			(99		)	60			53			50
Other expense	1,238			1,380			974			1,310			898
Total noninterest expense	6,919			7,059			6,132			5,936			5,045
Income before income taxes	4,037			5,154			3,323			2,917			4,396
Income taxes	1,358			1,019			1,058			889			1,474
Net income	$	2,679		$	4,135		$	2,265		$	2,028		$	2,922
Basic earnings per share	$	0.16		$	0.24		$	0.13		$	0.12		$	0.17
Diluted earnings per share	$	0.15		$	0.24		$	0.13		$	0.12		$	0.17

	Years Ended December 31,
	2016			2015
Interest income:	(in thousands, except share data) (unaudited)
Loans, including fees	$	38,424		$	32,525
Securities	4,217			4,134
Federal funds sold and other	136			66
Total interest income	42,777			36,725
Interest expense:
Deposits	4,128			3,923
Federal funds purchased and other borrowed funds	385			215
Subordinated debt	1,188			1,800
Total interest expense	5,701			5,938
Net interest income	37,076			30,787
Provision for loan losses	1,066			(2,077		)
Net interest income after provision for loan losses	36,010			32,864
Noninterest income:
Service charges on deposit accounts	985			756
Gain on sale of loans	16			—
Gain on sale of securities	617			484
Gain on foreclosed assets, net	—			—
Mortgage fee income	570			531
Bargain purchase gain	1,920			—
Other	1,359			726
	5,467			2,497
Noninterest expenses:
Salaries and employee benefits	14,688			11,538
Occupancy and equipment expense	1,982			1,977
Data processing	1,914			912
Professional fees	1,422			1,201
Advertising and business development	1,050			853
Losses on sale and writedowns of foreclosed assets, net	48			187
Foreclosed assets expenses, net of rental income	40			130
Other expense	4,902			3,744
	26,046			20,542
Income before income taxes	15,431			14,819
Income taxes	4,324			5,000
Net income	$	11,107		$	9,819
Common share data
Basic earnings per common share	$	0.65		$	0.58
Diluted earnings per common share	0.64			0.57
Weighted average common shares outstanding for basic earnings per common share	17,184,432			16,939,010
Weighted average common shares outstanding for diluted earnings per common share	17,630,600			17,085,752

	Three months ended,
	December 31, 2016								September 30, 2016								December 31, 2015
	Average Balances			Income/ Expense			Yields/ Rates		Average Balances			Income/ Expense			Yields/ Rates		Average Balances			Income/ Expense			Yields/ Rates
Assets	(Dollars in thousands)(Unaudited)
Loans (1)	$	973,149		$	10,663		4.38	%	$	932,047		$	10,229		4.39	%	$	760,332		$	8,401		4.42	%
Investment securities (2)	199,940			1,033			2.07	%	199,139			1,041			2.09	%	209,936			1,117			2.13	%
Interest-bearing deposits with other banks	25,612			53			0.83	%	24,580			43			0.70	%	22,378			19			0.34	%
Total earning assets	$	1,198,701		$	11,749		3.92	%	$	1,155,766		$	11,313		3.92	%	$	992,646		$	9,537		3.84	%
Other assets	61,777								62,470								61,572
Total assets	$	1,260,478							$	1,218,236							$	1,054,218
Liabilities
NOW accounts	$	147,627		$	118		0.32	%	$	122,727		$	90		0.29	%	$	102,783		$	66		0.26	%
Money market accounts	279,110			203			0.29	%	260,070			190			0.29	%	237,818			163			0.27	%
Savings accounts	63,816			15			0.09	%	62,179			15			0.10	%	36,015			14			0.16	%
Time deposits	331,025			814			0.98	%	326,860			786			0.96	%	304,941			743			0.97	%
Total interest bearing deposits	821,578			1,150			0.56	%	771,836			1,081			0.56	%	681,557			986			0.58	%
Securities sold under agreements to repurchase	26,548			11			0.17	%	23,339			10			0.17	%	32,315			12			0.15	%
Secured borrowings	2,134			22			4.12	%	7,752			58			2.99	%	12,875			73			2.27	%
FHLB borrowings	21,764			28			0.51	%	42,391			44			0.42	%	3,261			2			0.25	%
Subordinated debentures	15,300			297			7.76	%	15,300			297			7.76	%	15,300			297			7.76	%
Total interest bearing liabilities	$	887,324		$	1,508		0.68	%	$	860,618		$	1,490		0.69	%	$	745,308		$	1,370		0.74	%
Noninterest bearing deposits	253,877								239,802								203,108
Other liabilities	3,817								3,726								3,963
Total liabilities	$	1,145,018							$	1,104,146							$	952,379
Total shareholders’ equity	$	113,509							$	114,090							$	101,839
Total liabilities and shareholders’ equity	$	1,258,527							$	1,218,236							$	1,054,218
Net interest income				$	10,241							$	9,823							$	8,167
Interest rate spread							3.24	%							3.23	%							3.10	%
Net interest margin							3.42	%							3.40	%							3.29	%

Footnotes:

(1) Average loans include nonperforming loans.

(2) No tax-equivalent adjustments were made, as the effect thereof was not material.

	Year ended December 31,
	2016								2015
	Average Balances			Income/ Expense			Yields/ Rates		Average Balances			Income/ Expense			Yields/ Rates
Assets	(Dollars in thousands)(Unaudited)
Loans (1)	$	842,580		$	38,424		4.56	%	$	728,276		$	32,525		4.47	%
Investment securities (2)	198,867			4,217			2.12	%	197,427			4,134			2.09	%
Federal funds sold	—			—			—	%	—			—			—	%
Interest-bearing deposits with other banks	17,256			136			0.79	%	18,087			66			0.36	%
Total earning assets	$	1,058,703		$	42,777		4.04	%	$	943,790		$	36,725		3.89	%
Other assets	56,124								49,879
Total assets	$	1,114,827							$	993,669
Liabilities
NOW accounts	$	112,221		$	360		0.32	%	$	91,410		$	204		0.22	%
Money market accounts	242,890			716			0.29	%	224,640			620			0.28	%
Savings accounts	46,357			53			0.11	%	33,815			56			0.17	%
Time deposits	304,138			2,999			0.99	%	303,668			3,043			1.00	%
Total interest bearing deposits	705,606			4,128			0.59	%	653,533			3,923			0.60	%
Securities sold under agreements to repurchase	22,966			38			0.17	%	30,849			39			0.13	%
Secured borrowings	9,175			221			2.41	%	6,662			160			2.40	%
Mortgage payable	—			—			—	%	180			13			7.22	%
FHLB borrowings	33,058			126			0.38	%	1,686			3			0.18	%
Subordinated debentures	15,300			1,188			7.76	%	22,124			1,800			8.14	%
Total interest bearing liabilities	$	786,105		$	5,701		0.73	%	$	715,034		$	5,938		0.83	%
Noninterest bearing deposits	216,430								177,085
Other liabilities	3,113								4,157
Total liabilities	$	1,005,648							$	896,276
Total shareholders’ equity	$	109,179							$	97,393
Total liabilities and shareholders’ equity	$	1,114,827							$	993,669
Net interest income				$	37,076							$	30,787
Interest rate spread							3.31	%							3.06	%
Net interest margin							3.50	%							3.26	%

Footnotes:

(1) Average loans include nonperforming loans.

(2) No tax-equivalent adjustments were made, as the effect thereof was not material.

COMMON STOCK DATA
	2016												2015
	Fourth Quarter			Third Quarter			Second Quarter			First Quarter			Fourth Quarter
	(Unaudited)
Market value (1):
End of period	$	11.70		$	9.52		$	8.80		$	8.70		$	7.24
High	12.15			9.55			9.10			8.84			7.31
Low	9.10			8.35			8.18			7.00			6.26
Book value (end of period)	6.59			6.68			6.47			6.22			6.05
Tangible book value (end of period)	6.53			6.62			6.47			6.22			6.05
Shares outstanding (end of period)	17,242,645			17,237,845			17,183,780			17,175,864			17,026,941
Average shares outstanding	17,239,897			17,189,113			17,182,197			17,125,928			16,939,010
Average diluted shares outstanding	17,860,017			17,565,667			17,550,547			17,451,354			17,085,752

(1)  The prices shown are as reported on the NASDAQ Capital Market

ASSET QUALITY DATA
	December 31, 2016			September 30, 2016			June 30, 2016			March 31, 2016			December 31, 2015
(Dollars in thousands)(Unaudited)
Loans identified as nonperforming	$	5,856		$	8,385		$	2,622		$	2,146		$	1,411
Other nonperforming loans	—			91			—			—			67
Total nonperforming loans	5,856			8,476			2,622			2,146			1,478
Foreclosed assets	725			725			2,211			5,231			5,487
Total nonperforming assets	$	6,581		$	9,201		$	4,833		$	7,377		$	6,965
Allowance for loan and lease losses	$	11,684		$	12,284		$	12,044		$	11,335		$	11,741
Nonperforming assets to total assets	0.52		%	0.74		%	0.43		%	0.70		%	0.67		%
Nonperforming loans to total assets	0.46		%	0.68		%	0.23		%	0.20		%	0.14		%
Allowance for loan and lease losses to nonperforming loans	199.52		%	144.93		%	459.34		%	528.19		%	794.38		%

ALLOWANCE FOR LOAN AND LEASE LOSSES ROLLFORWARD
(Dollars in thousands)(Unaudited)	Three months ended,
	December 31, 2016			September 30, 2016			June 30, 2016			March 31, 2016			December 31, 2015
Beginning balance	$	12,284		$	12,044		$	11,335		$	11,741		$	11,753
Charge-offs	1,363			340			193			506			133
Recoveries	580			197			402			100			636
Net charge-offs (recoveries)	783			143			(209		)	406			(503		)
Provision for loan losses	183			383			500			—			(515		)
Ending balance	$	11,684		$	12,284		$	12,044		$	11,335		$	11,741
Net chargeoff percentage annualized	0.32		%	0.06		%	(0.11		)%	0.21		%	(0.26		)%

OTHER DATA
(Unaudited)
	Three months ended,
	December 31, 2016		September 30, 2016		June 30, 2016		March 31, 2016		December 31, 2015
Return on average assets	0.85	%	1.36	%	0.84	%	0.78	%	1.11	%
Return on average equity	9.44	%	14.50	%	8.36	%	7.68	%	11.48	%
Net interest margin	3.42	%	3.44	%	3.39	%	3.36	%	3.29	%
Average loans to assets	77.20	%	75.50	%	76.55	%	73.63	%	72.12	%
Average loans to deposits	90.49	%	90.92	%	94.16	%	88.00	%	85.95	%
Average noninterest bearing deposits to total deposits	23.44	%	22.51	%	22.75	%	23.35	%	23.45	%
COMPANY CAPITAL RATIOS
(Unaudited)	December 31, 2016		September 30, 2016		June 30, 2016		March 31, 2016		December 31, 2015
Tier 1 leverage ratio	9.10	%	9.15	%	9.77	%	9.72	%	9.36	%
Common equity tier 1 capital ratio	10.51	%	10.83	%	11.26	%	11.94	%	11.62	%
Tier 1 capital ratio	10.51	%	10.83	%	11.26	%	11.94	%	11.62	%
Total capital ratio	12.99	%	13.52	%	14.14	%	14.99	%	14.69	%
Tangible common equity to tangible assets	8.88	%	9.24	%	10.47	%	10.26	%	10.07	%

NON-GAAP MEASURES
Pre-tax pre-provision core income (1)
(In thousands)(Unaudited)
				For the three months ended,
	December 31, 2016			September 30, 2016			June 30, 2016			March 31, 2016			December 31, 2015
Income before income taxes	$	4,037		$	5,154		$	3,323		$	2,917		$	4,396
Provision for loan losses	183			383			500			—			(515		)
Gain on sale of securities	—			(14		)	(603		)	—			(212		)
Merger related expenses included in professional fees	—			24			26			100			—
Merger related expenses included in data processing fees	14			363			410			—			—
Severances paid in relation to the merger	—			92			—			—			—
Stock options included in other expense	—			164
Bargain purchase option				(1,920		)	—			—			—
Losses (gain) on sale and writedowns of foreclosed assets, net	—			1			31			16			109
Foreclosed assets expense, net of rental income	26			(99		)	60			53			50
Pre-tax pre-provision core income	$	4,260		$	4,148		$	3,747		$	3,086		$	3,828

(1)  This is a non-GAAP financial measure.  In compliance with applicable rules of the Securities and Exchange Commission, this non-GAAP measure is reconciled to pre-tax net income, which is the most directly comparable GAAP financial measure.  The Company’s management believes the presentation of pre-tax pre-provision core income provides investors with a greater understanding of the Company’s operating results, in addition to the results measured in accordance with GAAP.

 

Contact: Glen L. Stiteley, Chief Financial Officer - (815) 725-1885