Page 1 of 4
NEW ENGLAND BANCSHARES, INC.
660 Enfield Street
Enfield, CT 06082
For Immediate Release
CONTACT: Scott D. Nogles, Chief Financial Officer
(860) 253-5200
New England Bancshares, Inc. Reports Earnings for the
Quarter and Year Ended March 31, 2005
ENFIELD, CT, April 25, 2005 - New England Bancshares, Inc. (the "Company") (OTC:
NEBS), the holding company for Enfield Federal Savings and Loan Association (the
"Bank"), reported net income for the quarter ended March 31, 2005 of $331,000,
or $0.15 per diluted share, an increase of $119,000, or 56.1%, from the
$212,000, or $0.10 per diluted share, reported for the same quarter a year ago.
The increase in net income was primarily due to a $115,000 increase in net
interest and dividend income, a $91,000 decrease in non-interest expense, a
$56,000 reduction in the provision for loan losses and a $38,000 increase in
non-interest income, partially offset by a $181,000 increase in income tax
expense. Net income for the twelve months ended March 31, 2005 amounted to $1.2
million, or $0.54 per diluted share, an increase of $371,000, or 45.4%, from the
$817,000, or $0.39 per diluted share, for the twelve-month period a year ago.
The increase was comprised primarily of a $1.3 million increase in net interest
and dividend income, a $212,000 increase in non-interest income and a $109,000
reduction in the provision for loan losses, partially offset by an $888,000
increase in non-interest expense and a $321,000 increase in income tax expense.
Net interest and dividend income for the quarter and twelve months ended March
31, 2005 increased by $115,000 and $1.3 million, respectively. The increase for
the twelve month period was primarily from the growth in earning assets due to
the loans and securities acquired in the acquisition of Windsor Locks Community
Bank FSL in December 2003. The Company's net interest margin for the quarter and
twelve months ended March 31, 2005 was 3.95% and 3.81%, respectively, compared
to 3.89% and 3.73% in the year earlier periods.
The provision for loan losses was $4,000 and $131,000 for the quarter and twelve
months ended March 31, 2005, respectively, compared to $60,000 and $240,000 for
the quarter and twelve months ended March 31, 2004, respectively. The allowance
for loan losses as a percentage of gross loans was 1.07% and 1.06% at March 31,
2005 and March 31, 2004, respectively. The allowance for loan losses as a
percentage of non-performing
Page 2 of 4
loans increased from 138.85% at March 31, 2004 to 309.48% at March 31, 2005. To
determine the adequacy of the allowance, the Company looks at historical trends
in the growth and composition of its loan portfolio, the amount of
non-performing loans, and net charge-offs among other factors. The Company will
determine the necessity of providing for loan losses in the future depending
upon the factors listed above as well as the growth of the inherently riskier
commercial loan portfolio.
Non-interest income for the quarter ended March 31, 2005 was $194,000 compared
to $156,000 reported for the same period last year, an increase of $38,000. The
increase was caused by a $41,000 increase in service charges on deposit
accounts, and a $20,000 increase in other non-interest income, partially offset
by a $13,000 decrease in the increase in cash surrender value of life insurance
policies, and a $10,000 decrease in gain on sale and calls of investments. For
the twelve months ended March 31, 2005 non-interest income increased $212,000 to
$805,000 compared to $593,000 for the year-ago period. This increase was
primarily caused by a $205,000 increase in service charges on deposit accounts
and a $71,000 increase in other income, partially offset by a $61,000 decrease
in gain on sales and calls of investments. During the second quarter of fiscal
year 2005, the Bank started offering an Overdraft Privilege product which allows
customers to overdraw their account to a specified limit at the Bank's option.
This new product was the primary driver for the increase in service charges on
deposit accounts for the quarter and twelve month periods. The decrease in the
gain on sales and calls of investment securities for the quarter and twelve
months ended March 31, 2005 was caused by a decrease in the sales of such
securities in light of the increasing interest rate environment.
Non-interest expense for the quarter ended March 31, 2005 was $1.5 million, a
decrease of $91,000, from $1.6 million for the same quarter a year ago. For the
twelve months ended March 31, 2005 non-interest expense increased $888,000 to
$6.1 million compared to $5.2 million for the year ago period. The increase in
the twelve month period reflects our growth in staff and occupancy expenses
associated with the acquisition of Windsor Locks Community Bank FSL in December
2003.
At March 31, 2005, total assets were $213.2 million, an increase of $10.0
million from March 31, 2004. Net loans outstanding increased $11.2 million to
$132.6 million at March 31, 2005 compared to March 31, 2004. The increase in
loans was due to an increase of $6.0 million in one-to four-family residential
mortgage loans and a $6.4 million increase in commercial mortgage loans,
partially offset by a $672,000 decrease in commercial loans and a $335,000
decrease in consumer loans. The growth in assets was supported by the growth in
deposits and Federal Home Loan Bank advances. Total deposits, including
securities sold under agreements to repurchase, were $167.2 million at March 31,
2005, an increase of $3.7 million over March 31, 2004. Federal Home Loan Bank
advances increased to $15.6 million at March 31, 2005 compared to $9.9 million
at March 31, 2004.
Statements contained in this news release, which are not historical facts, are
forward-looking statements as that term is defined in the Private Securities
Litigation reform Act of 1995. Such forward-looking statements are subject to
Page 3 of 4
risks and uncertainties, which could cause actual results to differ materially
from those currently anticipated due to a number of factors, which include, but
are not limited to, factors discussed in documents filed by the Company with the
Securities and Exchange Commission from time to time. Subject to applicable laws
and regulation, the Company does not undertake - and specifically disclaims any
obligation - to publicly release the results of any revisions which 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.
New England Bancshares, Inc. is headquartered in Enfield, Connecticut, and
operates Enfield Federal Savings and Loan Association with seven banking centers
servicing the communities of Enfield, Manchester, Suffield, East Windsor and
Windsor Locks. For more information regarding the Bank's products and services,
please visit www.enfieldfederal.com.
Page 4 of 4
Statistical Summary
(unaudited)
(dollars in thousands, except per share data)
- ------------------------------------------------------------------------------------
Income Statement Data Quarter Ended Twelve Months Ended
March 31, March 31,
2005 2004 2005 2004
- ------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------
Net interest and dividend income $1,884 $1,769 $7,203 $5,944
- ------------------------------------------------------------------------------------
Provision for loan losses $ 4 $ 60 $ 131 $ 240
- ------------------------------------------------------------------------------------
Non-interest income $ 194 $ 156 $ 805 $ 593
- ------------------------------------------------------------------------------------
Non-interest expense $1,531 $1,622 $6,059 $5,171
- ------------------------------------------------------------------------------------
Net income $ 331 $ 212 $1,188 $ 817
- ------------------------------------------------------------------------------------
Earnings per share:
- ------------------------------------------------------------------------------------
Basic $ 0.15 $ 0.10 $ 0.55 $ 0.40
- ------------------------------------------------------------------------------------
Diluted $ 0.15 $ 0.10 $ 0.54 $ 0.39
- ------------------------------------------------------------------------------------
Dividend per share $ 0.05 -- $ 0.05 --
- ------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
Balance Sheet Data March 31, 2005 March 31, 2004
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
Total assets $213,202 $203,168
- ------------------------------------------------------------------------------
Total loans, net $132,557 $121,404
- ------------------------------------------------------------------------------
Loan loss reserve $ 1,437 $ 1,301
- ------------------------------------------------------------------------------
Total deposits $162,991 $162,790
- ------------------------------------------------------------------------------
Repurchase agreements $ 4,244 $ 788
- ------------------------------------------------------------------------------
FHLB advances $ 15,620 $ 9,926
- ------------------------------------------------------------------------------
Total equity $ 28,439 $ 27,594
- ------------------------------------------------------------------------------
Book value per share(1) $ 13.02 $ 12.72
- ------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Key Ratios Quarter Ended Twelve Months
March 31, Ended March 31,
- -------------------------------------------------------------------------------
2005 2004 2005 2004
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Return on average assets 0.64% 0.42% 0.57% 0.47%
- -------------------------------------------------------------------------------
Return on average equity 4.72% 3.11% 4.26% 3.40%
- -------------------------------------------------------------------------------
Net interest margin 3.95% 3.89% 3.81% 3.73%
- -------------------------------------------------------------------------------
(1) Calculation excludes unallocated ESOP shares and unvested incentive stock
grants.
###