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 Quarter Ended June 30,
2004 and Increases Quarterly Dividend
Westfield, Massachusetts, July 28, 2004: (AMEX:WFD) Westfield Financial,
Inc. (the "Company"), the holding company for Westfield Bank (the "Bank"),
reported net income of $1.6 million or $0.17 per basic share and $0.16 per
diluted share for the quarter ended June 30, 2004, compared to net income
of $2.7 million or $0.27 per basic share and diluted share for the same
period in 2003.
As a result of legislation enacted by the Commonwealth of Massachusetts in
connection with Real Estate Investment Trust ("REIT") subsidiaries, the
results for the first quarter of 2003 included an expense of $2.9 million
representing an estimate of the additional state tax liability, including
interest, relating to the deduction for dividends received from the Bank's
REIT subsidiary for 1999 through 2002. The second quarter of 2003 includes
a credit for approximately $1.45 million, which was the result of an
agreement with the Massachusetts Department of Revenue relating to the
Commonwealth of Massachusetts, REIT legislation and represents a reversal
of 50% of the charge taken in the first quarter of 2003.
Net interest and dividend income for the three months ended June 30, 2004
was $5.7 million compared with $5.4 million for the quarter ended June 30,
2003. Net interest margin for the quarters ended June 30, 2004 and 2003 was
3.04% and 2.87%, respectively.
The provision for loan losses for the three months ended June 30, 2004 and
2003 was $125,000 and $150,000, respectively.
Noninterest income increased $585,000 to $1.3 million for the three months
ended June 30, 2004 from $692,000 in the same period in 2003. Net gains on
the sale of securities were $389,000 for the quarter ended June 30, 2004 as
compared to $53,000 for the same period in 2003. The company has sold
essentially all its common stock portfolio as of June 30, 2004. Net
checking account processing fee income increased $268,000 to $523,000 for
the three months ended June 30, 2004 from $255,000 in the same period in
2003. The increase is a result of new products and services provided to
Westfield Bank's checking account customers commencing in the second
quarter of 2004. Fees received from the third party mortgage company
decreased $68,000 to $37,000 for the three months ended June 30, 2004 from
$105,000 for the same period in 2003. Higher interest rates resulted in
fewer referrals to the third party mortgage company. Fee income from the
third party mortgage company in the future will be affected by borrower
activity, which generally decreases in a rising interest rate environment.
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Noninterest expense was $4.5 million for the three months ended June 30,
2004 and June 30, 2003. The 2003 results include a reversal of $153,000 in
tax-related interest and penalties as a result of an agreement with the
Massachusetts Department of Revenue relating to the Commonwealth of
Massachusetts' REIT legislation, discussed above. Salaries and benefits
increased $86,000 for the three months ended June 30, 2004 as compared to
the same period in 2003. This was primarily the result of normal increases
in salaries and health care costs along with an increase in stock based
benefit plan expenses.
For the three months ended June 30, 2004, the Company had a tax provision
of $727,000 as compared to a tax benefit of $1.3 million for the same
period in 2003. The second quarter of 2003 included a credit of
approximately $1.45 million as the result of an agreement with the
Massachusetts Department of Revenue relating to the Commonwealth of
Massachusetts' REIT legislation, discussed above.
Total assets decreased $5.7 million to $789.5 million at June 30, 2004 from
$795.2 million at December 31, 2003. This is primarily the result of the
repurchase of 464,978 shares of common stock for $9.6 million.
Securities decreased $24.8 million, or 6.8%, to $338.8 million at June 30,
2004 from $363.6 million at December 31, 2003. The decrease was primarily
the result of the sale of certain mortgage backed securities with
significant paydowns. Net loans during the period increased by $11.0
million to $356.0 million at June 30, 2004 from $345.0 million at December
31, 2003. Commercial real estate and commercial and industrial loans
increased $19.0 million or 8.8% to $235.6 million at June 30, 2004 from
$216.6 million at December 31, 2003. This is consistent with Westfield
Bank's strategic plan, which emphasizes commercial lending. Residential
real estate loans decreased $0.7 million to $109.8 million at June 30, 2004
from $110.5 million at December 31. 2003. Indirect auto loans decreased by
$6.4 million, or 40.0% from $16.0 million at December 31, 2003 to $9.6
million at June 30, 2004. Management discontinued its indirect automobile
lending program in the fourth quarter of 2003.
Total deposits showed a decrease of $12.1 million to $620.3 million at June
30, 2004. Time deposits decreased $17.0 million to $317.2 million at June
30, 2004. Core deposits which include checking, NOW, savings, and money
market accounts, increased by $4.9 million to $303.1 million at June 30,
2004. The Bank's strategic plan calls for a lesser reliance on time deposit
accounts in order to decrease the Bank's cost of funds.
The decrease in deposits was offset by a $15.0 million increase in Federal
Home Loan Bank borrowings, which totaled $35.0 million at June 30, 2004.
Borrowings increased in order to take advantage of the low interest rate
environment. Customer repurchase agreements decreased $0.4 million, to
$11.7 million at June 30, 2004 from December 31, 2003.
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Stockholders' equity at June 30, 2004 and December 31, 2003 was $116.6
million and $124.8 million, respectively, which represented 14.8% of total
assets as of June 30, 2004 and 15.7% of total assets as of December 31,
2003. The change is primarily comprised of net income of $3.2 million for
the six months ended June 30, 2004, the repurchase of 464,978 shares of
common stock for $9.6 million, and the declaration by the Board of
Directors of dividends of $0.05 per share on January 27, 2004 and April 26,
2004 which aggregated $1.1 million.
Mr. Donald A. Williams, President and Chief Executive Officer of the
Company stated, "On July 27, 2004, the Board of Directors elected to
increase the cash dividend to $0.10 per share to all shareholders of record
on August 10, 2004 payable on August 24, 2004".
Mr. Williams also stated "During this quarter we effectively completed the
stock repurchase program announced on April 24, 2003. Therefore on July 27,
2004 the Board of Directors voted to authorize the repurchase into treasury
stock of up to 502,550 shares or five percent of its outstanding shares of
common stock". "The repurchase program will commence immediately and will
continue until complete".
On July 23, 2004, the Bank and the Westfield Mutual Holding Company,
completed its conversions from companies regulated by the Massachusetts
Division of Banks or the Federal Reserve Board to federally-chartered
companies regulated by the Office of Thrift Supervision (the "OTS").
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.
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WESTFIELD FINANCIAL, INC. and SUBSIDIARIES
Selected Consolidated Statement of Operations and Other Data
($ in thousands, except per share data)
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
2004 2003 2004 2003
---- ---- ---- ----
<s> <c> <c> <c> <c>
Interest and dividend income $ 8,372 $ 8,991 $ 16,991 $ 18,664
Interest expense 2,684 3,575 5,434 7,532
---------- ---------- ---------- ----------
Net interest and dividend income 5,688 5,416 11,557 11,132
Provision for loan losses 125 150 275 350
---------- ---------- ---------- ----------
Net interest and dividend income after
Provision for loan losses 5,563 5,266 11,282 10,782
Net gains on sales of securities
Available for sale 389 53 868 113
Other noninterest income 888 639 1,475 1,264
Other noninterest expense 4,480 4,478 8,963 9,107
---------- ---------- ---------- ----------
Income before income taxes 2,360 1,480 4,662 3,052
Income taxes (benefit) 727 (1,253) 1,422 1,925
---------- ---------- ---------- ----------
Net income $ 1,633 $ 2,733 $ 3,240 $ 1,127
========== ========== ========== ==========
Basic earnings per share $ 0.17 $ 0.27 $ 0.33 $ 0.11
Average shares outstanding 9,826,377 10,038,710 9,903,953 10,071,541
Diluted earnings per share $ 0.16 $ 0.27 $ 0.32 $ 0.11
Diluted average shares outstanding 10,016,749 10,297,174 10,119,972 10,311,146
Other Data:
Return on Average Assets (1) 0.82% 1.36% 0.82% 0.28%
Return on Average Equity (1) 5.36% 8.95% 5.28% 1.83%
Net Interest Margin 3.04% 2.87% 3.11% 2.95%
<FN>
<F1> Three and six month results have been annualized.
</FN>
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WESTFIELD FINANCIAL, INC. and SUBSIDIARIES
Selected Consolidated Balance Sheet and Other Data
($ in thousands, except per share data)
(Unaudited)
June 30, December 31,
2004 2003
-------- ------------
<s> <c> <c>
Total assets $789,509 $795,216
Securities held to maturity 253,370 261,610
Securities available for sale 85,464 101,983
Stock in Federal Home Loan Bank of Boston
and other stock 4,237 4,237
Loans 360,828 349,622
Allowance for loan losses 4,797 4,642
-------- --------
Net loans 356,031 344,980
Total deposits 620,349 632,431
Customer repurchase agreements 11,719 12,135
Federal Home Loan Bank Advances 35,000 20,000
Stockholders' equity 116,593 124,804
Book value per share 12.20 12.50
Other Data:
Nonperforming loans $ 2,581 $ 1,768
Nonperforming loans as a percentage of total assets 0.33% 0.22%
Nonperforming loans as a percentage of total loans 0.72% 0.50%
Allowance for loan losses as a percentage
of nonperforming loans 186% 263%
Allowance for loan losses as a percentage of total loans 1.33% 1.33%
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