Exhibit 99.1
FOR IMMEDIATE RELEASE
For further information contact:
Donald A. Williams, President & CEO
Michael J. Janosco Jr., CFO
413-568-1911
Westfield Financial, Inc. Reports Results for the Year and Quarter Ended
December 31, 2003.
Westfield, Massachusetts, January 28, 2004: (AMEX:WFD) Westfield Financial,
Inc. (the "Company"), the holding company for Westfield Bank (the "Bank"),
reported net income for the three months ended December 31, 2003 of $1.5
million, or $0.14 per diluted share, versus $658,000, or $0.06 per diluted
share, for the comparable prior year period and net income for the year
ended December 31, 2003 of $3.7 million, or $0.36 per diluted share, versus
$4.0 million, or $0.38 per diluted share, for the prior year.
As previously reported, the Company's 2003 results included a charge of
$1.45 million representing the additional state tax liability, including
interest, relating to the deduction for dividends received from the Bank's
real estate investment trust subsidiary (the "REIT") for 2002 and prior
years.
Donald A. Williams, President and Chief Executive Officer, said, "We
continue to execute our strategic plan of growing our commercial business
relationships. The commercial and industrial loan portfolio increased
$23.8 million or 38.7% to $85.3 million at December 31, 2003 from $61.5
million at December 31, 2002. Additionally, transaction deposit accounts
which include checking, NOW, money market and regular savings accounts
increased $17.2 million or 6.1%, to $298.2 million while time certificates
of deposit decreased $40.8 to $334.2 million for the year ended December
31, 2003." The strategic plan calls for a lesser reliance on time deposit
accounts. Mr. Williams also stated, "The Board of Directors declared a
$0.05 cash dividend on January 27, 2004 to all shareholders of record on
February 10, 2004 payable on February 24, 2004.
Net interest and dividend income for the year and three months ended
December 31, 2003 was $21.8 million and $5.6 million, respectively,
compared with $24.2 million and $5.9 million for the year and three months
ended December 31, 2002. Net interest margin for the year and three months
ended December 31, 2003 was 2.86% and 2.92%, respectively, compared with
3.12% and 2.97% for the same periods in 2002.
Net gains from sales and writedowns of securities for the year and three
months ended December 31, 2003 were $409,000 and $276,000, respectively.
This compares with net losses of $1.8 million and $854,000 for the same
periods in 2002. Included in the writedowns were certain equity
securities whose impairment was determined to be other than temporary of
$85,000 for the year and three months ended December 31, 2003, compared to
$2.1 million and $854,000 for the year and three months ended December 31,
2002.
The provision for loan losses for the year and three months ended December
31, 2003 was $750,000 and $250,000, compared with $934,000 and $200,000 for
the same periods in 2002.
Noninterest income for the year and three months ended December 31, 2003
was $2.7 million and $640,000, respectively, compared to $1.4 million and
$208,000 for the year and three months ended December 31, 2002. The
increase was primarily the result of income on Bank Owned Life Insurance
("BOLI") of $806,000 and $232,000 for the year and three months ended
December 31, 2003, compared to none for the year and three months ended
December 31, 2002.
Noninterest expense for the year and three months ended December 31, 2003
was $17.6 million and $4.2 million, respectively, compared to $16.7 million
and $3.9 million respectively, for the same periods in 2002. Employee
salaries and benefits for the year and three months ended December 31, 2003
was $9.7 million and $2.3 million respectively, compared to $8.9 million
and $2.0 million for the same period in 2002. The increase in both periods
was the result of normal salary increases, along with an increase in
employee benefit expense of $688,000 for the year and $189,000 for the
three months ended December 31, 2003, primarily as a result of increased
expenses for the management recognition and retention plan and supplemental
employee retirement plan.
Total assets decreased $17.8 million, or 2.2%, to $795.2 million at
December 31, 2003 from $813.0 million at December 31, 2002.
Securities for the year ended December 31, 2003 decreased by $12.0 million
or 3.2%, to $363.6 million at December 31, 2003 from $375.6 million at
December 31, 2002. Net loans during this period decreased by $12.2
million, or 3.4%, to $345.0 million at December 31, 2003 from $357.2
million at December 31, 2002. The decrease is primarily the result of the
residential real estate loan program with a third party mortgage company.
Under this program, which commenced on September 1, 2001, Westfield Bank
takes applications from residential real estate borrowers and forwards the
applications to a third party mortgage company. Substantially all of the
Bank's residential real estate loans are underwritten and originated by the
third party mortgage company. The Bank receives a fee of 65 basis points
for each of these loans originated. The Bank believes that this program
diversifies its loan portfolio and reduces interest rate risk.
Customer repurchase agreements increased $3.4 million from $8.7 million at
December 31, 2002 to $12.1 at December 31, 2003. Federal Home Loan Bank
borrowings increased $5.0 million to $20.0 million at December 31, 2003 to
take advantage of the current interest rate environment.
Stockholders' equity at December 31, 2003 and December 31, 2002 was $124.8
million and $126.7 million, respectively, representing 15.7% and 15.6% of
total assets. The change is comprised of net income of $3.7 million for
the year ended December 31, 2003, a decrease in net unrealized gains on
securities available for sale of $430,000, net of income taxes, the net
repurchase of 57,700 shares of common stock for $1.1 million, the purchase
of shares of common stock for the management recognition and retention plan
for $2.3 million and the declaration by the Board of Directors of quarterly
$0.05 per share cash dividends aggregating $2.1 million.
The Bank is headquartered in Westfield, Massachusetts and operates through
10 banking offices in Agawam, East Longmeadow, Holyoke, Southwick,
Springfield, West Springfield and Westfield, Massachusetts. The Bank's
deposits are insured by the Federal Deposit Insurance Corporation and the
Depositors Insurance Fund.
The Company wishes to caution readers not to place undue reliance on any
such forward-looking statements contained in this news release, which speak
only as of the date made. The Company wishes to advise readers that the
factors listed above could affect the Company's financial performance and
could cause the Company's actual results for future periods to differ
materially from any opinions or statements expressed with respect to future
period in any current statements. The Company and the Bank do not
undertake and specifically decline any obligation to publicly release the
result of any revisions that may be made to any forward-looking statements
to reflect events or circumstances after the date of such statements or to
reflect the occurrence of anticipated or unanticipated events.
WESTFIELD FINANCIAL, INC. and SUBSIDIARIES
Selected Consolidated Balance Sheet and Other Data
($ in thousands, except per share data)
(Unaudited)
December 31 December 31
2003 2002
----------- -----------
<s> <c> <c>
Total assets $795,216 $812,980
Securities held to maturity 261,610 205,299
Securities available for sale 101,983 170,310
Stock in Federal Home Loan Bank of Boston 4,237 3,933
Loans 349,622 361,480
Allowance for loan losses 4,642 4,325
-------- --------
Net loans 344,980 357,155
Total deposits 632,431 656,065
Stockholders' equity 124,804 126,699
Book value per share 12.50 12.25
Other Data:
Nonperforming loans $ 1,768 $ 2,684
Nonperforming loans as a percentage of total assets 0.22% 0.34%
Nonperforming loans as a percentage of total loans 0.50% 0.64%
Allowance for loan losses as a percent
of nonperforming loans 263% 146%
Allowance for loan losses as a percentage of total loans 1.33% 0.94%
WESTFIELD FINANCIAL, INC. and SUBSIDIARIES
Condensed Consolidated Statements of Income and Other Data
($ in thousands, except per share data)
(Unaudited)
Three Months Ended Year Ended
December 31 December 31
------------------------ ------------------------
2003 2002 2003 2002
---- ---- ---- ----
<s> <c> <c> <c> <c>
Interest and dividend income $ 8,577 $ 10,195 $ 35,635 $ 43,013
Interest expense 3,006 4,314 13,858 18,775
---------- ---------- ---------- ----------
Net interest and dividend income 5,571 5,881 21,777 24,238
Provision for loan losses 250 200 750 934
---------- ---------- ---------- ----------
Net interest and dividend income after
provision for loan losses 5,321 5,681 21,027 23,304
Net gains (losses) on sales or writedowns
of securities available for sale 276 (854) 409 (1,750)
Noninterest income 640 208 2,665 1,388
Noninterest expense 4,206 3,893 17,630 16,659
---------- ---------- ---------- ----------
Income before income taxes 2,031 1,142 6,471 6,283
Income taxes 558 484 2,820 2,239
---------- ---------- ---------- ----------
Net Income $ 1,473 $ 658 $ 3,651 $ 4,044
========== ========== ========== ==========
Basic earnings per share $ 0.15 $ 0.06 $ 0.36 $ 0.39
Basic average shares outstanding 9,995,794 10,175,068 10,036,653 10,336,283
Diluted earnings per share $ 0.14 $ 0.06 $ 0.36 $ 0.38
Diluted average shares outstanding 10,223,263 10,800,988 10,212,975 10,597,298
Other Data:
Return on average assets (1) 0.72% 0.33% 0.45% 0.51%
Return on average equity (1) 4.71% 2.05% 2.94% 3.14%
Net interest margin (1) 2.92% 2.97% 2.86% 3.12%
<FN>
<F1> Three month results have been annualized.
</FN>