EX99.1
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NEW ENGLAND BANCSHARES, INC.
855 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
Three and Six Months Ended September 30, 2006
ENFIELD, CT, October 30, 2006 - New England Bancshares, Inc. (the "Company")
(Nasdaq GM: NEBS), the holding company for Enfield Federal Savings and Loan
Association (the "Bank"), reported net income for the quarter ended September
30, 2006 of $240,000, or $0.05 per diluted share. For the corresponding quarter
in the prior fiscal year the Company reported net income of $369,000, or $0.07
per diluted share. Net income for the six months ended September 30, 2006 was
$510,000, or $0.10 per diluted share as compared to $705,000, or $0.14 per
diluted share, for the prior year period.
NET INTEREST INCOME IMPROVES OVER PRIOR YEAR
Net interest and dividend income for the three and six months ended September
30, 2006 increased by $387,000 and $778,000, respectively. The increase for the
quarter and six months were primarily due to increases in interest earning
assets of $30.1 million and $29.8 million, respectively. The Company's net
interest margin for the quarter and six months ended September 30, 2006 was
3.82% and 3.86%, respectively, compared to 3.87% and 3.88%, respectively, in the
year earlier periods.
TOTAL ASSETS AND DEPOSITS GROW
At September 30, 2006, total assets were $272.2 million, an increase of $14.4
million from March 31, 2006. The increase in assets was caused primarily by the
$31.2 million increase in net loans and a $4.6 million increase in
available-for-sale investments, partially offset by a $21.7 million decrease in
cash and cash equivalents. The increase in net loans was primarily due to an
increase of $24.2 million in one-to four-family residential mortgage loans, a
$4.7 million increase in construction loans, a $1.6 million increase in
commercial loans and a $643,000 increase in commercial real estate loans. Total
deposits were $169.0 million at March 31, 2006 and $171.0 million at September
30, 2006, a $2.0 million increase. The increase in deposits was due primarily to
a $4.3 million increase in money market accounts and a $3.3 million increase in
certificate of deposit accounts, partially offset by a $4.7 million decrease in
savings accounts and a $952,000 decrease in checking accounts. Securities sold
under agreements to repurchase increased $2.6 million from $7.3 million at March
31, 2006 to $10.0 million at September 30, 2006. Federal Home Loan Bank advances
increased $8.6 million to $30.2 million at September 30, 2006 compared to $21.6
million at March 31, 2006.
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PROVISION FOR LOAN LOSSES EXPENSE INCREASES DUE TO LOAN GROWTH
The provision for loan losses was $62,000 and $123,000 for the three and six
months ended September 30, 2006, respectively, compared to $53,000 and $85,000
for the three and six months ended September 30, 2005, respectively. The
increase in the provision for loan losses was primarily due to the increase in
net loans from March 31, 2006 to September 30, 2006.
ASSET QUALITY
The Company's asset quality remained favorable. Non-performing assets totaled
$325,000 at September 30, 2006 compared to $600,000 at March 31, 2006.
Charge-offs were $4,000 for the six months ended September 30, 2006 and 2005.
The allowance for loan losses was 0.97% of total loans at September 30, 2006
compared to 1.09% of total loans at March 31, 2006.
NONINTEREST EXPENSE INCREASES
Non-interest expense for the quarter ended September 30, 2006 was $2.2 million,
an increase of $600,000, from $1.6 million for the same quarter a year ago. For
the six months ended September 30, 2006 non-interest expense increased $1.1
million to $4.2 million compared to $3.1 million for the year ago period. The
increase in the three and six month periods reflect additional salaries and
employee benefits, professional fees, and occupancy and equipment expense. The
increase in occupancy expense for the quarter and six months ended September 30,
2006 was due to the Company opening additional banking offices and moving its
headquarters and main retail office. During the six months ended September 30,
2006 the Company recognized approximately $79,000 of compensation expense
related to the expensing of stock options in accordance with FASB Statement
123R. In the prior year period the Company did not record any expense related to
stock options.
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
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 eight banking centers
servicing the communities of Enfield, Manchester, Suffield, East Windsor,
Ellington and Windsor Locks. For more information regarding the Bank's products
and services, please visit www.enfieldfederal.com.
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Statistical Summary
(unaudited)
(dollars in thousands, except per share data)
Income Statement Data Three Months Ended Six Months Ended
September 30, September 30,
2006 2005 2006 2005
------ ------ ------ ------
Net interest and dividend income $2,352 $1,965 $4,672 $3,894
Provision for loan losses $ 62 $ 53 $ 123 $ 85
Non-interest income $ 218 $ 212 $ 427 $ 397
Non-interest expense $2,161 $1,561 $4,239 $3,125
Net income $ 240 $ 369 $ 510 $ 705
Earnings per share(1) :
Basic $ 0.05 $ 0.07 $ 0.10 $ 0.14
Diluted $ 0.05 $ 0.07 $ 0.10 $ 0.14
Dividend per share(1) $ 0.03 $ 0.02 $ 0.06 $ 0.04
Balance Sheet Data September 30, 2006 March 31, 2006
------------------ --------------
Total assets $272,160 $257,799
Total loans, net $179,288 $148,113
Loan loss reserve $ 1,755 $ 1,636
Total deposits $171,042 $169,044
Repurchase agreements $ 9,962 $ 7,325
FHLB advances $ 30,228 $ 21,642
Total equity $ 57,227 $ 56,821
Book value per share(2) $ 11.53 $ 11.45
Key Ratios Three Months Ended Six Months Ended
September 30, September 30,
2006 2005 2006 2005
----- ----- ----- -----
Return on average assets 0.36% 0.67% 0.39% 0.64%
Return on average equity 1.68% 5.03% 1.79% 4.87%
Net interest margin 3.82% 3.87% 3.86% 3.88%
(1) Earnings per share and dividends per share have been adjusted to reflect the
shares issued in the second-step conversion that was completed on December 28,
2005.
(2) Calculation excludes unallocated ESOP shares and unvested incentive stock
grants. Including these shares in the calculation causes book value per share to
decrease to $10.70 and $10.63 at September 30, 2006 and March 31, 2006.
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