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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 Twelve Months Ended March 31, 2007
ENFIELD, CT, May 1, 2007 - 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 March 31, 2007 of
$196,000, or $0.04 per diluted share. For the corresponding quarter in the prior
fiscal year, the Company reported net income of $313,000, or $0.06 per diluted
share. Net income for the twelve months ended March 31, 2007 was $970,000, or
$0.19 per diluted share as compared to $1.3 million, or $0.26 per diluted share,
for the prior year.
NET INTEREST AND DIVIDEND INCOME IMPROVES OVER PRIOR YEAR
Net interest and dividend income for the three and twelve months ended March 31,
2007 increased by $64,000 and $1.3 million, respectively. The increase for the
quarter and year were primarily due to increases in interest-earning assets of
$24.7 million and $39.2 million, respectively, partially offset by an increase
in the cost of funds due to the higher interest rate environment. The Company's
net interest margin for the three and twelve months ended March 31, 2007 was
3.66% and 3.79%, respectively, compared to 3.91% and 3.87%, respectively, in the
year earlier periods.
TOTAL ASSETS AND DEPOSITS GROW
At March 31, 2007, total assets were $284.2 million, an increase of $26.4
million from March 31, 2006. The increase in assets was caused primarily by a
$50.3 million increase in net loans, partially offset by a $20.0 million
decrease in cash and cash equivalents, a $2.8 million decrease in
available-for-sale securities and a $2.3 million decrease in interest-bearing
time deposits with other banks. The increase in net loans was primarily due to
an increase of $28.3 million in one-to four-family residential mortgage loans, a
$12.7 million increase in commercial real estate loans, a $7.2 million increase
in commercial loans and a $1.7 million increase in consumer loans. Cash and cash
equivalents decreased as these funds were used to fund the loan growth.
Total deposits were $181.7 million at March 31, 2007 and $169.0 million at March
31, 2006, a $12.6 million increase. The increase in deposits was due primarily
to an $11.8 million increase in money market accounts, a $6.6 million increase
in certificate of deposit accounts and a $1.9 million increase in checking
accounts, partially offset by an $8.2 million decrease in savings accounts.
Securities sold under agreements to repurchase increased $1.9 million from $7.3
million at March 31, 2006 to $9.2 million at March 31, 2007. Federal Home Loan
Bank
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advances increased $11.9 million to $33.6 million at March 31, 2007 compared to
$21.6 million at March 31, 2006. The increase in repurchase agreements and
borrowings were used to fund loan growth.
PROVISION FOR LOAN LOSSES
The provision for loan losses was $60,000 and $242,000 for the three and twelve
months ended March 31, 2007, respectively, compared to $61,000 and $210,000 for
the three and twelve months ended March 31, 2007, respectively.
ASSET QUALITY
The Company's asset quality remained favorable. Non-performing assets totaled
$824,000 at March 31, 2007 compared to $600,000 at March 31, 2006. Charge-offs
were $1,000 for the twelve months ended March 31, 2007 and $7,000 for the same
period last year. The allowance for loan losses was 0.94% of total loans at
March 31, 2007 compared to 1.09% of total loans at March 31, 2006.
NON-INTEREST EXPENSE INCREASES
Non-interest expense for the quarter ended March 31, 2007 was $2.2 million, an
increase of $219,000, from $2.0 million for the same quarter a year ago. For the
twelve months ended March 31, 2007, non-interest expense increased $1.9 million
to $8.6 million compared to $6.8 million for the year ago period. The increase
in the three and twelve month periods reflect additional salaries and employee
benefits, professional fees, and occupancy and equipment expense. The increase
in occupancy and equipment expense for the quarter and twelve months ended March
31, 2007 was due to the Company opening additional banking offices and moving
its headquarters and main retail office. During the twelve months ended March
31, 2007, the Company recognized approximately $203,000 of compensation expense
related to the expensing of stock options in accordance with SFAS 123 (revised
2004), "Share-based Payment." In the prior year period, the Company did not
record any expense related to stock options as the implementation date was April
1, 2006.
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 Twelve Months Ended
March 31, March 31,
--------- ---------
2007 2006 2007 2006
---- ---- ---- ----
Net interest and dividend income $ 2,304 $ 2,240 $ 9,369 $ 8,117
Provision for loan losses $ 60 $ 61 $ 242 $ 210
Non-interest income $ 316 $ 251 $ 991 $ 835
Non-interest expense $ 2,211 $ 1,992 $ 8,643 $ 6,789
Net income $ 196 $ 313 $ 970 $ 1,309
Earnings per share(1) :
Basic $ 0.04 $ 0.06 $ 0.20 $ 0.27
Diluted $ 0.04 $ 0.06 $ 0.19 $ 0.26
Dividend per share(1) $ 0.03 $ 0.02 $ 0.12 $ 0.08
Balance Sheet Data March 31, 2007 March 31, 2006
-------------- --------------
Total assets $284,158 $257,799
Total loans, net $198,447 $148,113
Loan loss reserve $ 1,875 $ 1,636
Total deposits $181,675 $169,044
Repurchase agreements $ 9,177 $ 7,325
FHLB advances $ 33,587 $ 21,642
Total equity $ 57,266 $ 56,821
Book value per share(2) $ 11.65 $ 11.45
Key Ratios Three Months Ended Twelve Months Ended
March 31, March 31,
--------- ---------
2007 2006 2007 2006
---- ---- ---- ----
Return on average assets 0.29% 0.50% 0.36% 0.57%
Return on average equity 1.39% 2.23% 1.70% 3.63%
Net interest margin 3.66% 3.91% 3.79% 3.87%
(1) Earnings per share and dividends per share have been adjusted to reflect the
2.3683 shares of common stock exchanged for each share of existing stock 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 $10.71 and $10.63 at March 31, 2007 and March 31, 2006.
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