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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 Strong Asset Growth
and Results for the Three Months Ended June 30, 2009
ENFIELD, CT, July 31, 2009- New England Bancshares, Inc. (the "Company") (NASDAQ
GM: NEBS), the holding company for New England Bank, reported a net loss for the
quarter ended June 30, 2009 of $181,000, or $0.03 per diluted share as compared
to net income of $452,000, or $0.08 per diluted share, reported for the same
quarter a year ago.
Key Balance Sheet Changes at June 30, 2009 compared to March 31, 2009:
The June 30, 2009 balance sheet includes amounts from the acquisition of Apple
Valley Bank & Trust, which was completed on June 8, 2009.
o Total assets increased $103.2 million, or 18.1%, to $674.9 million at June
30, 2009.
o Net loans increased $75.5 million, or 18.3%, to $489.1 million at June 30,
2009. This increase was comprised of a $37.8 million increase in
residential mortgage loans, a $24.1 million increase in commercial
mortgage loans, an $11.8 million increase in commercial business loans and
a $2.0 million increase in construction loans.
o Deposits increased $94.8 million, or 22.6%, from $419.4 million at March
31, 2009 to $514.2 million at June 30, 2009. The increase is comprised of
a $48.1 million increase in certificate of deposits, a $23.3 million
increase in NOW and money market accounts, a $12.0 million increase in
savings accounts and an $11.5 million increase in noninterest-bearing
demand deposits. At June 30, 2009 certificates of deposit comprised 57.7%
of deposits.
Key Items for the Quarter:
o The Company recorded $540,000 in FDIC insurance expense in the current
quarter compared to $38,000 in the year ago period. The current year
quarter expense includes $313,000 for the special FDIC assessment.
o Net interest margin, on a fully tax equivalent basis, was 2.84% for the
quarter ended June 30, 2009 compared to 3.39% in the same quarter a year
ago. The Company's margin has been negatively impacted by the historically
low interest rates, including a Federal Funds rate which has a target
between 0% and 0.25%. At June 30, 2009 the Company had $56.6 million of
funds at the Federal Reserve Bank earning 0.25% which put downward
pressure on the Company's margin. In addition, the Company has seen a
decrease in the yield earned on loans from 6.48% for the quarter ended
June 30, 2008 to 5.99% for the quarter ended June 30, 2009 due to the
decrease in market rates and an increase in nonaccrual loans. See Asset
Quality below.
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o The Company recorded approximately $220,000 in merger related expenses
during the quarter ended June 30, 2009; these expenses are not tax
deductible. See Acquisition below.
o The Company recorded a provision for loan losses of $680,000 for the
quarter ended June 30, 2009 compared to $148,000 for the quarter ended
June 30, 2008. See Asset Quality below.
o The Company sold Riverside Investments, New England Bank's advisory and
investment services division, during the current quarter and recognized a
$175,000 gain on sale of the division.
o Capital remains strong with an equity to assets ratio of 9.9%. In addition
New England Bank remains well capitalized with a Tier 1 capital ratio of
9.72%.
Asset Quality:
Total nonaccrual loans were $14.1 million at June 30, 2009, an increase of $2.2
million from $11.9 million at March 31, 2009. In addition, the Bank had $1.1
million in other real estate owned at June 30, 2009 compared to $141,000 at
March 31, 2009. The allowance for loan losses as a percentage of gross loans
outstanding decreased from 1.54% at March 31, 2009 to 1.30% at June 30, 2009.
During the quarter the Company acquired Apple Valley Bank & Trust's ("Apple
Valley") $60.2 million in net loans. In accordance with FASB Statement No.
141(R), the allowance for loan losses of Apple Valley was not consolidated into
New England Bank's allowance for loan losses. Instead, individual loan book
values were reduced by the estimated credit loss associated with the allowance
for loan losses. If the $929,000 of allowance for loan losses of Apple Valley
was consolidated into New England Bank's allowance, the ratio of allowance for
loan losses to gross loans outstanding would have been 1.49% at June 30, 2009.
Acquisition:
On June 8, 2009 the Company completed its acquisition of Apple Valley Bank &
Trust Company of Cheshire, Connecticut, and it was merged into New England
Bancshares' wholly-owned banking subsidiary, New England Bank. Under the terms
of the transaction, shareholders of Apple Valley Bank were entitled to elect to
receive either one share of New England Bancshares common stock or $8.50 in cash
for each share of Apple Valley Bank common stock, subject to an aggregate
allocation of 60% stock and 40% cash. The Company issued 517,196 shares of New
England Bancshares stock and paid $2.9 million to Apple Valley Bank & Trust
stockholders.
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 New England Bank with fifteen banking centers servicing the communities
of Bristol, Cheshire, East Windsor, Ellington, Enfield, Manchester, Plymouth,
Southington, Suffield, Wallingford and Windsor Locks. For more information
regarding New England Bank's products and services, please visit
www.nebankct.com.
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Selected Financial Highlights
(unaudited)
(dollars in thousands, except per share data)
Income Statement Data Three Months Ended June 30,
2009 2008
------------ ------------
Net interest and dividend income $ 3,883 $ 3,877
Provision for loan losses 680 148
Noninterest income 687 467
Noninterest expense 4,293 3,544
Net (loss) income (181) 452
(Loss) earnings per share:
Basic $ (0.03) $ 0.08
Diluted (0.03) 0.08
Dividend per share $ 0.02 $ 0.03
Balance Sheet Data June 30, 2009 March 31, 2009
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Total assets $ 674,894 $ 571,664
Total loans, net 489,076 413,566
Allowance for loan losses 6,452 6,458
Total deposits 514,216 419,436
Repurchase agreements 17,180 12,069
FHLB advances 66,033 66,833
Total equity 66,723 63,954
Book value per share(1) 10.97 11.43
Tangible book value per share(2) 7.89 8.41
Key Ratios Three Months Ended June 30,
2009 2008
---- ----
Return on average assets (0.03)% 0.34%
Return on average equity (0.28)% 2.64%
Net interest margin 2.84% 3.39%
(1) Calculation excludes unallocated ESOP shares and unvested incentive stock
grants. Including these shares in the calculation causes book value per
share to decrease to $10.44 and $10.83 at June 30, 2009 and March 31,
2009, respectively.
(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 $7.51 and $7.98 at June 30, 2009 and March 31, 2009,
respectively.
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