Exhibit 99.1
FOR IMMEDIATE RELEASE
| For further information contact: |
Westfield Financial, Inc. Declares Regular and Special Dividends and Reports
Results for the Quarter Ended March 31, 2009
Westfield, Massachusetts, April 29, 2009:Westfield Financial, Inc. (the “Company”) (NASDAQ:WFD), the holding company for Westfield Bank (the “Bank”), reported net income of $1.2 million for the quarter ended March 31, 2009, compared to $1.9 million for the same period in 2008. This represents earnings of $0.04 per basic and diluted share for the quarter ended March 31, 2009, compared to $0.06 per basic and diluted share for the same period in 2008. The decrease in earnings was primarily the result of increases in the provision for loan losses and noninterest expense, partially offset by an increase in net interest and dividend income and noninterest income.
The provision for loan losses was $1.2 million for the three months ended March 31, 2009 compared to $175,000 for the same period in 2008. The primary reasons for the increase in the provision for loan losses were an increase in loan charge-offs, primarily pertaining to a manufacturing commercial loan relationship, and the continued weakening of the national and local economy.
For the three months ended March 31, 2009, noninterest expense was $6.4 million compared to $5.8 million for the same period in 2008. This was primarily due to an increase of $499,000 in salaries and benefits, which were $4.1 million for the three months ended March 31, 2009. The increase in salaries and benefits for the three months ended March 31, 2009 was primarily the result of an increase of $226,000 in share-based compensationand $178,000 related to the defined benefit pension plan due to a decline in the value of assets held by the plan.
Net interest income was $8.0 million for the three months ended March 31, 2009 and $7.7 million for the same period in 2008. The increase in net interest income was mainly due to a $37.4 million increase in average earning assets. The net interest margin, on a tax equivalent basis, was 3.17% for the three months ended March 31, 2009, compared to 3.16% for the same period in 2008.
1
Noninterest income increased $274,000 to $1.1 million for the three months ended March 31, 2009, compared to the same period in 2008. This was primarily the result of an increase of $151,000 in fees received from the third party mortgage program. Westfield Bank experienced an increase in mortgage referrals due to a decrease in interest rates. In addition, income from bank-owned life insurance (“BOLI”) increased $32,000 as a result of higher balances in BOLI.
Balance Sheet Growth
Total assets increased $16.6 million to $1.1 billion at March 31, 2009. Investment securities increased $44.9 million to $550.6 million at March 31, 2009 from $505.8 million at December 31, 2008. The increase in investment securities was the result of reinvesting funds from short-term borrowings and long-term debt as discussed below.
Net loans decreased by $6.5 million to $465.6 million at March 31, 2009 from $472.1 million at December 31, 2008. This was the result of decreases in commercial and industrial loans and commercial real estate loans, partially offset by an increase in residential real estate loans. Commercial and industrial loans decreased $6.2 million to $147.7 million at March 31, 2009 from $153.9 million at December 31, 2008. Commercial real estate loans decreased $3.6 million to $220.3 million at March 31, 2009 from $223.9 at December 31, 2008. Residential real estate loans increased $2.1 million to $100.5 million at March 31, 2009. The decrease in commercial real estate loans and commercial and industrial loans was primarily the result of customers decreasing their balances on lines of credit, a $2.6 million charge-off pertaining to a manufacturing commercial loan relationship, and normal loan payments and payoffs.
Short-term borrowings and long-term debt increased $23.1 million to total $246.3 million at March 31, 2009. This was primarily due to $20.5 million in new long-term debt, in the form of securities sold under repurchase agreements and Federal Home Loan Bank advances, at March 31, 2009. The slope of the yield curve provided opportunities to earn a more advantageous spread by borrowing funds and reinvesting in loans and securities.
Total deposits increased $12.8 million to $600.8 million at March 31, 2009 from $588.0 million at December 31, 2008. The increase in deposits was due to an increase in regular savings and time deposit accounts. Regular savings accounts increased $8.1 million to $76.2 million, primarily due to an account which pays a higher interest rate than comparable products. Time deposit accounts increased $6.8 million to $334.4 million at March 31, 2009.
2
Stockholders’ equity at March 31, 2009 and December 31, 2008 was $262.5 million and $259.9 million, respectively, which represented 23.3% of total assets as of March 31, 2009 and 23.4% of total assets as of December 31, 2008. The change in stockholders’ equity is comprised of a $3.3 million increase in other comprehensive income, net income of $1.2 million for the three months ended March 31, 2009 and the issuance of 59,721 shares of common stock amounting to $574,000 in connection with stock option exercises. This was partially offset by the repurchase of 172,397 shares for $1.6 million related to the stock repurchase plan and a dividend amounting to $1.5 million declared on January 27, 2009.
As previously reported, the Board of Directors voted to authorize the commencement of a repurchase program on January 22, 2008 authorizing the Company to repurchase up to 3,194,000 shares, or ten percent of its outstanding shares of common stock. At March 31, 2009, the Company had repurchased a total of 1,211,418 shares pursuant to this program.
Credit Quality
Nonperforming loans decreased $3.0 million to $5.8 million at March 31, 2009 compared to $8.8 million at December 31, 2008. This represented 1.22% of total loans at March 31, 2009 and 1.83% of total loans at December 31, 2008. The decrease was the result the charge off of $2.6 million in nonperforming loans related to a manufacturing commercial loan relationship.
The allowance for loan losses was $7.3 million at March 31, 2009 and $8.8 million at December 31, 2008. This represents 1.54% of total loans at March 31, 2009 and 1.83% of total loans at December 31, 2008. At these levels, the allowance for loan losses as a percentage of nonperforming loans was 126% at March 31, 2009 and 100% at December 31, 2008. At December 31, 2008, the allowance for loan losses included a specific valuation allowance of $2.1 million related to a manufacturing commercial loan relationship. This amount was charged off at March 31, 2009 and contributed to the decrease in the allowance for loan losses and the allowance for loan losses as a percent of total loans.
Declaration of Regular and Special Dividends
James C. Hagan, Chief Executive Officer stated, “On April 28, 2009, the Board of Directors declared a regular cash dividend of $0.05 per share and a special cash dividend of $0.15 per share. Both the regular and special dividends are payable on May 27, 2009 to all shareholders of record on May 13, 2009.” Mr. Hagan added, “Westfield Financial’s capital position, core earnings and net interest margin remained strong during the first quarter. The earnings pressure we experienced in the first quarter was primarily due to circumstances surrounding one loan relationship.”
3
The Bank is headquartered in Westfield, Massachusetts and operates through 11 banking offices in Agawam, East Longmeadow, Holyoke, Southwick, Springfield, West Springfield and Westfield, Massachusetts. The Bank’s deposits are insured by the Federal Deposit Insurance Corporation.
The Company wishes to caution readers not to place undue reliance on any such forward-looking statements contained in this news release, which speak only as of the date made. Actual results may differ materially from those indicated by such forward-looking statements as a result of various important factors discussed in our Annual Report on Form 10-K for the year ended December 31, 2008, as filed with the Securities and Exchange Commission (SEC), and additional filings we make with the SEC. In addition, the forward-looking statements included in this press release represent our views as of the date of this release. The Company and the Bank do not undertake and specifically decline any obligation to publicly release the result of any revisions that may be made to any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events .
4
WESTFIELD FINANCIAL, INC. and SUBSIDIARIES
Selected Consolidated Statement of Income and Other Data
(Dollars in thousands, except per share data)
(Unaudited)
|
| Three Months Ended | ||||
|
| 2009 |
| 2008 | ||
|
|
|
|
|
|
|
INTEREST AND DIVIDEND INCOME: |
|
|
|
|
|
|
Loans |
| $ 6,458 |
|
| $ 6,738 |
|
Investment securities |
| 6,640 |
|
| 6,816 |
|
Short-term investments |
| 4 |
|
| 215 |
|
Total interest and dividend income |
| 13,102 |
|
| 13,769 |
|
|
|
|
|
|
|
|
INTEREST EXPENSE: |
|
|
|
|
|
|
Deposits |
| 3,275 |
|
| 4,341 |
|
Short-term borrowings |
| 98 |
|
| 318 |
|
Long-term debt |
| 1,711 |
|
| 1,402 |
|
Total interest expense |
| 5,084 |
|
| 6,061 |
|
|
|
|
|
|
|
|
Net interest and dividend income |
| 8,018 |
|
| 7,708 |
|
|
|
|
|
|
|
|
PROVISION FOR LOAN LOSSES |
| 1,150 |
|
| 175 |
|
|
|
|
|
|
|
|
Net interest and dividend income after |
| 6,868 |
|
| 7,533 |
|
|
|
|
|
|
|
|
NONINTEREST INCOME: |
|
|
|
|
|
|
Income from bank-owned life insurance |
| 351 |
|
| 319 |
|
Service charges and fees |
| 709 |
|
| 556 |
|
Loss on disposition of premises and equipment, net |
| (8) |
|
| - |
|
Gain (loss) on sales of securities, net |
| 87 |
|
| 300 |
|
Other-than-temporary impairment of securities |
| - |
|
| (310) |
|
Total noninterest income |
| 1,139 |
|
| 865 |
|
|
|
|
|
|
|
|
NONINTEREST EXPENSE: |
|
|
|
|
|
|
Salaries and employees benefits |
| 4,107 |
|
| 3,608 |
|
Occupancy |
| 649 |
|
| 603 |
|
Professional fees |
| 401 |
|
| 474 |
|
Computer operations |
| 437 |
|
| 435 |
|
Stationery, supplies and postage |
| 97 |
|
| 125 |
|
Other |
| 717 |
|
| 539 |
|
Total noninterest expense |
| 6,408 |
|
| 5,784 |
|
|
|
|
|
|
|
|
INCOME BEFORE INCOME TAXES |
| 1,599 |
|
| 2,614 |
|
|
|
|
|
|
|
|
INCOME TAXES |
| 394 |
|
| 753 |
|
NET INCOME |
| $ 1,205 |
|
| $ 1,861 |
|
|
|
|
|
|
|
|
Basic earnings per share |
| $ 0.04 |
|
| $ 0.06 |
|
|
|
|
|
|
|
|
Average shares outstanding (1) |
| 29,685,701 |
|
| 30,060,311 |
|
|
|
|
|
|
|
|
Diluted earnings per share |
| $ 0.04 |
|
| $ 0.06 |
|
|
|
|
|
|
|
|
Diluted average shares outstanding (1) |
| 29,970,633 |
|
| 30,531,934 |
|
|
|
|
|
|
|
|
Other Data: |
|
|
|
|
|
|
Return on Average Assets (2) |
| 0.52 | % |
| 0.71 | % |
|
|
|
|
|
|
|
Return on Average Equity (2) |
| 2.21 |
|
| 2.62 |
|
|
|
|
|
|
|
|
Net Interest Margin (3) |
| 3.17 |
|
| 3.16 |
|
|
| ||
(1) | Weighted-average shares outstanding for 2008 have been adjusted retrospectively for restricted shares that were determined to be "participating" in accordance with Financial Accounting Standards Board Staff Position EITF 03-6-1, "Determining Whether Instruments Granted in Share-Based Payment Tansactions Are Participating Securities." | ||
(2) | Three month results have been annualized. | ||
(3) | Net interest margin is calculated on a tax equivalent basis. |
5
WESTFIELD FINANCIAL, INC. and SUBSIDIARIES
Selected Consolidated Balance Sheet and Other Data
(Dollars in thousands, except per share data)
(Unaudited)
|
| March 31, |
| December 31, | ||
|
|
|
|
|
|
|
Cash and cash equivalents |
| $ 35,741 |
|
| $ 56,533 |
|
|
|
|
|
|
|
|
Securities held to maturity, at cost |
| 279,175 |
|
| 247,635 |
|
Securities available for sale, at fair value |
| 271,455 |
|
| 258,143 |
|
Federal Home Loan Bank of Boston and other |
| 9,093 |
|
| 8,456 |
|
|
|
|
|
|
|
|
Loans |
| 472,904 |
|
| 480,931 |
|
Allowance for loan losses |
| 7,276 |
|
| 8,796 |
|
Net loans |
| 465,628 |
|
| 472,135 |
|
|
|
|
|
|
|
|
Bank-owned life insurance |
| 36,451 |
|
| 36,100 |
|
|
|
|
|
|
|
|
Other assets |
| 28,190 |
|
| 30,054 |
|
|
|
|
|
|
|
|
TOTAL ASSETS |
| $1,125,733 |
|
| $1,109,056 |
|
|
|
|
|
|
|
|
Total deposits |
| $ 600,807 |
|
| $ 588,029 |
|
|
|
|
|
|
|
|
Short-term borrowings |
| 52,474 |
|
| 49,824 |
|
Long-term debt |
| 193,800 |
|
| 173,300 |
|
Due to broker |
| 5,000 |
|
| 27,603 |
|
Other liabilities |
| 11,113 |
|
| 10,381 |
|
|
|
|
|
|
|
|
TOTAL LIABILITIES |
| 863,194 |
|
| 849,137 |
|
|
|
|
|
|
|
|
TOTAL STOCKHOLDERS' EQUITY |
| 262,539 |
|
| 259,919 |
|
|
|
|
|
|
|
|
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY |
| $1,125,733 |
|
| $1,109,056 |
|
|
|
|
|
|
|
|
Book value per share |
| $ 8.42 |
|
| $ 8.30 |
|
|
|
|
|
|
|
|
Other Data: |
|
|
|
|
|
|
Nonperforming loans |
| $ 5,756 |
|
| $ 8,805 |
|
|
|
|
|
|
|
|
Nonperforming loans as a percentage of total assets |
| 0.51 | % |
| 0.79 | % |
|
|
|
|
|
|
|
Nonperforming loans as a percentage of total loans |
| 1.22 |
|
| 1.83 |
|
|
|
|
|
|
|
|
Allowance for loan losses as a percentage of nonperforming loans |
| 126.00 |
|
| 100.00 |
|
|
|
|
|
|
|
|
Allowance for loan losses as a percentage of total loans |
| 1.54 |
|
| 1.83 |
|
6