Exhibit 99.1
FOR IMMEDIATE RELEASE
For further information contact:
Donald A. Williams, Chairman & CEO
Michael J. Janosco Jr., CFO
413-568-1911
Westfield Financial, Inc. Declares Special Dividend and Reports Results for
the Quarter Ended March 31, 2006
Westfield, Massachusetts, April 26, 2006: (AMEX:WFD) Westfield Financial,
Inc. (the "Company"), the holding company for Westfield Bank (the "Bank"),
reported net income for the three months ended March 31, 2006 of $1.3
million or $0.14 per diluted share, versus $1.5 million, or $0.16 per
diluted share, for the comparable prior year period.
Total assets increased $17.5 million to $822.6 million at March 31, 2006
from $805.1 million at December 31, 2005. Total deposits increased $16.0
million to $639.0 million at March 31, 2006 from $623.0 million at December
31, 2005. The increase in deposits was primarily the result of an increase
in term deposits of $29.2 million, which were $364.2 million at March 31,
2005. Customer repurchase agreements increased $1.6 million to $16.0
million at March 31, 2006 from $14.4 million at December 31, 2005. Federal
Home Loan Bank borrowings were $45.0 million at both March 31, 2006 and
December 31, 2005.
Net loans during this period increased by $1.8 million to $380.6 million at
March 31, 2006 from $378.8 million at December 31, 2005. Securities
increased $3.8 million to $358.7 million at March 31, 2006 from $354.9
million at December 31, 2005.
Donald A. Williams, Chairman and Chief Executive Officer, said, "We are
pleased with our asset and deposit growth this quarter, especially in an
environment of increased competition." Mr. Williams also stated, "On April
25, 2006, the Board of Directors declared a regular cash dividend of $0.15
per share and a special cash dividend of $0.20 per share to all
shareholders of record on May 11, 2006 payable on May 25, 2006."
James C. Hagan, President and COO, said "The year 2006 began on a positive
note with the addition of William Fleming as a new commercial relationship
officer whose focus is on expanding our footprint in Connecticut." Mr.
Hagan also commented, "Relocating our downtown Springfield branch to Tower
Square during the quarter gives Westfield Bank a better presence in that
marketplace."
Stockholders' equity at March 31, 2006 and December 31, 2005 was $115.0
million and $115.8 million, respectively, representing 14.0% and 14.4% of
total assets, respectively. The change is comprised of net income of $1.3
million for the three months ended March 31, 2006, the net repurchase of
65,000 shares of common stock for $1.6 million, and the declaration and
payment by the Board of Directors of a quarterly dividend amounting to
$573,000.
1
Net interest and dividend income was $5.8 million for the three months
ended March 31, 2006 compared to $5.9 million for the three months ended
March 31, 2005. The net interest margin for the three months ended March
31, 2006 was 3.08% compared with 3.21% for the same period in 2005. The
net interest margin for the three months ended December 31, 2005 was also
3.08%. The decrease in the net interest margin was primarily the result of
higher funding costs resulting from the rising interest rate environment.
As the rates on term deposits have increased over the past several months,
some customers have shifted funds out of core deposits, which generally pay
lower rates, and into term deposits.
While the deposit growth occurred throughout the first quarter, Management
did not fully reinvest the funds until late in the quarter. On March 24,
2006, the Bank purchased $9.8 million of seasoned, adjustable rate
residential loans, which are serviced by the originating financial
institution.
The provision for loan losses for the three months ended March 31, 2006 was
$75,000 compared with $140,000 for the same period in 2005.
Noninterest income for the three months ended March 31, 2006 was $853,000,
compared to $748,000 for the three months ended March 31, 2005. This was
primarily the result of an increase in net checking account processing fee
income, which was $463,000 for the three months ended March 31, 2006 as
compared to $390,000 for the same period in 2005.
Noninterest expense for the three months ended March 31, 2006 was $4.8
million compared to $4.6 million for the same period in 2005. Salaries and
benefits increased $271,000 to $3.0 million for the three months ended
March 31, 2006. This was primarily the result of an increase in salary
expense of $99,000 related to hiring additional personnel and normal salary
increases, a $101,000 increase in employee benefit plan costs, along with
an additional expense of $73,000 related to stock options. The Financial
Accounting Standards Board now requires public and nonpublic companies to
recognize stock-based compensation related to stock options in their income
statements. This requirement became effective for Westfield Financial for
the fiscal year beginning on January 1, 2006. In previous periods,
Westfield Financial was not required to treat stock-based compensation
related to stock options as an expense.
The Company's annual meeting of shareholders will be held on Friday, May
19, 2006 at 10:00 a.m., at the Tekoa Country Club located at 459 Russell
Road, Westfield, Massachusetts 01085. At the meeting, shareholders of
record on March 24, 2006, will be asked to consider and vote upon the
election of three directors and any other matters as may properly come
before the meeting, or any adjournments thereof.
2
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.
This press release contains certain forward-looking statements. These
forward-looking statements are made in good faith pursuant to the "safe
harbor" provisions of the Private Securities Litigation Reform Act of 1995.
The words "may," "could," "should," "would," "believe," "anticipate,"
"estimate," "expect," "intend," "plan" and similar expressions are intended
to identify forward-looking statements. These forward-looking statements
may be subject to significant known and unknown risks, uncertainties, and
other factors, including, but not limited to, those matters referred to in
the preceding sentence.
Although we believe that the expectations reflected in such forward-looking
statements are reasonable, actual results may differ materially from the
results discussed in these forward-looking statements. You are cautioned
not to place undue reliance on these forward-looking statements, which
speak only as of the date hereof. The Company undertakes no obligation to
republish revised forward-looking statements to reflect events or
circumstances after the date hereof or to reflect the occurrence of
unanticipated events.
3
WESTFIELD FINANCIAL, INC. and SUBSIDIARIES
Selected Consolidated Statement of Operations and Other Data
($ in thousands, except per share data)
(Unaudited)
Three Months Ended
March 31,
2006 2005
---- ----
<s> <c> <c>
Interest and dividend income $ 9,928 $ 8,878
Interest expense 4,150 2,963
---------- ----------
Net interest and dividend income 5,778 5,915
Provision for loan losses 75 140
---------- ----------
Net interest and dividend income after
provision for loan losses 5,703 5,775
Noninterest income 853 748
Noninterest expense 4,794 4,582
---------- ----------
Income before income taxes 1,762 1,941
Income taxes 449 430
---------- ----------
Net income $ 1,313 $ 1,511
========== ==========
Basic earnings per share $ 0.14 $ 0.16
Average shares outstanding 9,330,933 9,499,055
Diluted earnings per share $ 0.14 $ 0.16
Diluted average shares outstanding 9,472,797 9,712,330
Other Data:
Return on Average Assets (1) 0.66% 0.77%
Return on Average Equity (1) 4.62% 5.17%
Net Interest Margin 3.08% 3.21%
<FN>
<F1> Three month results have been annualized.
</FN>
4
WESTFIELD FINANCIAL, INC. and SUBSIDIARIES
Selected Consolidated Balance Sheet and Other Data
($ in thousands, except per share data)
(Unaudited)
March 31 December 31
2006 2005
<s> <c> <c>
Total assets $822,571 $805,095
Securities held to maturity 221,795 225,450
Securities available for sale 136,867 129,459
Stock in Federal Home Loan Bank of Boston 4,237 4,237
Loans 386,119 384,259
Allowance for loan losses 5,529 5,422
-------- --------
Net loans 380,590 378,837
Total deposits 639,027 623,045
Federal Home Loan Bank advances 45,000 45,000
Customer repurchase agreements 15,968 14,441
Stockholders' equity 115,015 115,842
Book value per share 12.36 12.37
Other Data:
Nonperforming loans $ 2,074 $ 1,919
Nonperforming loans as a percentage of total assets 0.25% 0.24%
Nonperforming loans as a percentage of total loans 0.54% 0.50%
Allowance for loan losses as a percent of nonperforming
loans 267% 283%
Allowance for loan losses as a percentage of total loans 1.43% 1.41%
5