Fraternity Community Bancorp, Inc. Reports Results for the Quarter and Year Ended December 31, 2014

Fraternity Community Bancorp, Inc. (OTCBB:FRTR), the holding company for Fraternity Federal Savings and Loan Association, today announced that it realized net income of $64,700 for the year ended December 31, 2014, compared to a net loss of $110,600 for the year ended December 31, 2013. This represented earnings per common share of $0.05 for the year ended December 31, 2014 as compared to a $0.08 loss per common share for the year ended December 31, 2013. The increase in net income is primarily due to a decrease in our provision for loan losses. For the year ended December 31, 2014 we had a provision for loan losses of $26,900, compared to a provision for loan losses of $223,000 for the year ended December 31, 2013.

For the three months ended December 31, 2014, we had net income of $147,400, compared to a net loss of $187,400 for the three months ended December 31, 2013. The increase in net income is primarily due to a decrease in our provision for loan losses. For the three months ended December 31, 2014 we had a negative provision for loan losses of $198,200, compared to a provision for loan losses of $91,600 for the same period ended December 31, 2013.

At December 31, 2014, total assets decreased by $3.0 million to $163.4 million at December 31, 2014 from $166.4 million at December 31, 2013. $1.9 million of this decrease was due to our successfully selling all of our other real estate owned during the year ended December 31, 2014. Additionally, there was a decrease in cash and cash equivalents of $2.7 million, from $15.3 million at December 31, 2013, to $12.6 million as of December 31, 2014, and a decrease in available-for-sale investment securities of $2.2 million, from $16.3 million at December 31, 2013, to $14.1 million as of December 31, 2014. We were also successful in growing our loan portfolio during 2014, as we experienced an increase of $3.1 million in loans receivable, net, from $114.6 million at December 31, 2013 to $117.7 million at December 31, 2014.

Non-accrual loans totaled $2.1 million at December 31, 2014 compared to $1.1 million at December 31, 2013. As of December 31, 2014, non-accrual loans included fourteen owner occupied one- to- four family residential loans totaling $189,000, twelve non-owner occupied one- to- four family residential loans totaling $1.8 million and two home equity lines of credit totaling $95,300. As of December 31, 2013, non-accrual loans included one troubled debt restructured loan totaling $386,400, eighteen one- to- four family residential loans totaling $404,000 and two home equity lines of credit totaling $289,900. The total increase of $1.0 million in non-accrual loans is primarily due to one loan relationship covering seven non-owner occupied one- to- four family residential loans.

As mentioned earlier, other real estate owned totaled $0 at December 31, 2014 compared to $1.9 million at December 31, 2013. The decrease in other real estate owned was due to the sale of a luxury residential property that had secured a speculative construction loan, the sale of an owner occupied property, and the sale of a non-owner occupied property during 2014. Other real estate owned at December 31, 2013 consisted of one luxury residential property that was a speculative construction loan (totaling $1.7 million), one owner occupied property and one non-owner occupied property.

The Company’s consolidated equity, all of which is tangible, was $27.6 million at December 31, 2014 compared to $26.8 million at December 31, 2013. The increase was primarily due to a reduction of $605,300 in accumulated other comprehensive loss, which was attributable to a decrease in long term rates that affect our available for sale investment portfolio. As of December 31, 2013, we had an accumulated loss of $669,700, compared to $64,400 as of December 31, 2014. The Bank remains well capitalized with a Tier 1 Leverage ratio, Tier 1 Risk-Based Capital ratio and Total Risk-Based Capital ratio of 14.57%, 26.35% and 27.61%, respectively, as compared to 14.19%, 25.71% and 26.96%, respectively for the same measures as of December 31, 2013.

Fraternity Community Bancorp, Inc. is the holding company for Fraternity Federal Savings and Loan Association, founded in 1913. The Bank is a community-oriented financial institution, dedicated to serving the financial service needs of customers and businesses within its market area, which consists of Baltimore City and Baltimore and Howard Counties in Maryland.