1ST Constitution Bancorp Reports a 57% Increase in Net Income for the Second Quarter Ended June 30, 2012

CRANBURY, NJ--(Marketwire - Jul 30, 2012) - 1^ST Constitution Bancorp (NASDAQ: FCCY), parent company of 1^ST Constitution Bank, reported net income of $1.3 million, or $0.25 per diluted common share, for the quarter ended June 30, 2012, a 57% increase above the $829 thousand in net income, or $0.16 per diluted common share, reported for the second quarter of 2011. 

For the six months ended June 30, 2012, the Company reported net income of $2.5 million, or $0.48 per diluted common share, compared with net income of $1.6 million, or $0.32 per diluted common share, for the first six months of 2011. 

All share and per share data for the respective reporting periods have been adjusted for a 5% stock dividend paid on common shares on February 2, 2012. At June 30, 2012, the Company's tangible book value per common share was $10.28.

Robert F. Mangano, President and Chief Executive Officer, said, "The growth in net income for the quarter and the six months ended June 30, 2012 was principally the result of an increase in the Company's mortgage banking business, both retail and wholesale, partially offset by the increased non-interest expenses primarily associated with carrying costs and write-downs of foreclosed real estate."

Total assets at June 30, 2012 decreased to $777.5 million from $791.7 million at December 31, 2011. Gross portfolio loans at June 30, 2012 were $479.8 million, compared with $475.4 million at December 31, 2011; total investment securities at June 30, 2012 were $220.5 million, compared to $236.2 million at December 31, 2011, and total deposits at June 30, 2012 were $669.1 million, up from $623.9 million at December 31, 2011.

Net interest income for the quarter ended June 30, 2012 totaled $6.6 million, an increase of 27.1% from $5.2 million earned for the second quarter of 2011. Further supporting earnings was the continued generation of non-interest income, which increased by 4.2% to $1.2 million for the quarter ended June 30, 2012, from $1.1 million earned for the second quarter of 2011.

Non-interest expense increased to $5.4 million for the second quarter of 2012, compared to $5.2 million for the second quarter of 2011. The key increases in non-interest expense related to other real estate owned expenses, occupancy expense associated with the acquisition of branches in March 2011, and increases in salary and employee benefits primarily relating to merit increases, increased health costs, and overall increases in staffing levels.

For the second quarter of 2012, the provision for loan losses was $550 thousand, and net charge-offs were $175 thousand, compared to a provision for loan losses of $275 thousand and net charge-offs of $155 thousand for the second quarter of 2011. 

At June 30, 2012, the allowance for loan losses was $6.3 million, or 1.30% of total loans, compared to $5.5 million, or 1.16% of total loans, at December 31, 2011. Total non-performing assets, which includes nonaccrual loans and OREO, was, as a percentage of total assets, 1.84% at June 30, 2012 and 1.95% at December 31, 2011.

Regulatory capital ratios continue to reflect a strong capital position. The Company's total risk-based capital, Tier I capital, and leverage capital were 12.51%, 11.47%, and 9.16%, respectively, at June 30, 2012. The regulatory requirements to be considered "well-capitalized" for total risk-based capital, Tier 1 capital, and leverage capital are 10%, 6%, and 5%, respectively.

1^ST Constitution Bancorp, through its primary subsidiary, 1^ST Constitution Bank, operate fourteen branch banking offices in Cranbury (2), Fort Lee, Hamilton, Hightstown, Hillsborough, Hopewell, Jamesburg, Lawrenceville, Perth Amboy, Plainsboro, Rocky Hill, West Windsor, and Princeton, New Jersey.

1^ST Constitution Bancorp is traded on the Nasdaq Global Market under the trading symbol "FCCY" and can be accessed through the Internet at www.1STCONSTITUTION.com

The foregoing contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are not historical facts and include expressions about management's confidence and strategies and management's expectations about new and existing programs and products, relationships, opportunities, taxation, technology and market conditions. These statements may be identified by such forward-looking terminology as "expect," "look," "believe," "anticipate," "may," "will," or similar statements or variations of such terms. Actual results may differ materially from such forward-looking statements. Factors that may cause results to differ materially from such forward-looking statements include, but are not limited to, changes in the direction of the economy in New Jersey, the direction of interest rates, effective income tax rates, loan prepayment assumptions, continued levels of loan quality and origination volume, continued relationships with major customers including sources for loans, a higher level of net loan charge-offs and delinquencies than anticipated, bank regulatory rules, regulations or policies that restrict or direct certain actions, the adoption, interpretation and implementation of new or pre-existing accounting pronouncements, a change in legal and regulatory barriers including issues related to compliance with anti-money laundering and bank secrecy act laws, as well as the effects of general economic conditions and legal and regulatory barriers and structure. 1^ST Constitution Bancorp assumes no obligation for updating any such forward-looking statements at any time, except as required by law.

1st Constitution Bancorp
Selected Consolidated Financial Data
( Unaudited )
($ in thousands except per share amounts)					Three Months Ended								Six Months Ended
					June 30,								June 30,
					2012				2011				2012				2011
Income Statement Data:
	Interest income				$	7,907			$	7,085			$	15,941			$	14,019
	Interest expense					1,279				1,871				2,683				3,640
	Net interest income					6,628				5,214				13,258				10,379
	Provision for loan losses					550				275				1,150				675
	Net interest income after prov.for loan losses					6,078				4,939				12,108				9,704
	Non-interest income					1,188				1,141				2,353				2,165
	Non-interest expenses					5,374				5,156				10,986				9,819
	Income before income taxes					1,892				924				3,475				2,050
	Income tax expense					594				95				1,010				431
	Net income				$	1,298			$	829			$	2,465			$	1,619
Per Common Share Data (a):
	Earnings per common share - Basic				$	0.25			$	0.16			$	0.48			$	0.32
	Earnings per common share - Diluted				$	0.25			$	0.16			$	0.48			$	0.32
	Tangible book value per common share												$	10.28			$	9.75
	Average common shares outstanding:
		Basic				5,096,317				5,043,504				5,096,252				5,043,324
		Diluted				5,198,411				5,092,442				5,177,314				5,105,046
	(a) Includes the effect of the 5% stock dividend paid February 2, 2011.
Performance Ratios:
	Return on average assets					0.68	%			0.45	%			0.65	%			0.47	%
	Return on average equity					9.18	%			6.55	%			8.81	%			6.52	%
	Net interest margin (tax-equivalent basis)					3.87	%			3.25	%			3.92	%			3.38	%
	Efficiency ratio					68.8	%			81.1	%			70.4	%			78.3	%
													June 30,				December 31,
													2012				2011
Balance Sheet Data:
	Total Assets												$	777,499			$	791,727
	Investment Securities													220,530				236,158
	Loans													479,795				475,432
	Loans held for sale													16,596				19,234
	Allowance for loan losses													(6,257	)			(5,534	)
	Goodwill and other intangible assets													5,292				5,426
	Deposits													669,071				623,862
	Shareholders' Equity													57,673				55,000
Asset Quality Data:
		Loans past due over 90 days and still accruing											$	0			$	0
		Nonaccrual loans												2,699				2,991
		OREO property												11,605				12,409
	Total non-performing assets													14,304				15,400
	Net charge-offs for the six-month period and year, respectively													427				2,787
	Allowance for loan losses to total loans													1.30	%			1.16	%
	Nonperforming loans to total loans													0.56	%			0.63	%
	Nonperforming assets to total assets													1.84	%			1.95	%
Capital Ratios:
	1st Constitution Bancorp
		Tier 1 capital to average assets												9.16	%			8.82	%
		Tier 1 capital to risk weighted assets												11.47	%			11.27	%
		Total capital to risk weighted assets												12.51	%			12.22	%
	1st Constitution Bank
		Tier 1 capital to average assets												8.83	%			8.49	%
		Tier 1 capital to risk weighted assets												11.02	%			10.79	%
		Total capital to risk weighted assets												12.06	%			11.73	%