99.1. Press Release dated August 24, 2009
Exhibit 99.1
FIRST LITCHFIELD FINANCIAL CORPORATION
News Release
For Immediate Release
First Litchfield Financial Corporation Announces Second Quarter Earnings
Litchfield, Connecticut, August 24, 2009, ...First Litchfield Financial
Corporation (Trading Symbol: FLFL.OB) (the "Company") the holding company for
The First National Bank of Litchfield (the "Bank") reported earnings for the
three (3) and six (6) months ended June 30, 2009. Net income available to common
shareholders for the second quarter of 2009 totaled $108,906 versus net income
of $616,448 for the second quarter of 2008. Basic and diluted net income per
common share for the second quarter of 2009 were both $.05, compared to basic
and diluted net income per share of $.26 for the second quarter of 2008. Net
income available to common shareholders for the six months ended June 30, 2009
totaled $375,156 versus $1,114,971 for the six months ended June 30, 2008. Basic
and diluted net income per common share for the six months ended June 30, 2009
were both $.16, compared to basic and diluted net income per share of $.47 for
the six months ended June 30, 2008.
President and CEO, Joseph J. Greco stated, "Second quarter results were heavily
impacted by the additional costs for FDIC insurance as well as by an increased
provision for loan and lease losses. However, we are optimistic with regard to
new business development. During the second quarter, we continued to build new
business relationships with consumers, commercial banking, and wealth management
customers. We experienced growth in our core lending and deposit products, much
of which was through the FNBL Stimulus Package initiative."
Second quarter 2009 net interest income, increased 7.94% year-over-year to
$4,000,928 from $3,706,697 in the second quarter of 2008. For the first six
months of 2009, net interest income was $7,973,495 up 9.72% from $7,266,868 in
the first half of 2008. For each comparison, both the increase in the volume of
earning assets as well as increased interest margin contributed to the
improvement in net interest income.
The Company's net interest margin (net interest income as a percentage of
average earning assets on a tax equivalent basis) was 3.13% in the second
quarter of 2009, compared to 3.09% in the second quarter a year ago. For the
first six months of 2009, the Company's net interest margin was 3.19% compared
to 3.07% in the same period a year ago. The low interest rate environment
resulted in decreased deposit rates compared with the prior year. Although
yields on earning assets have been subject to similar declines, the strategy to
shift to a more profitable mix of earning assets from investments to loans, has
offset some of this decline.
The increase in loans and leases came from growth in commercial leasing and
mortgage lending. Average earning assets for the second quarter of 2009 totaled
$523,941,000, which was $17,759,000 or 3.51% higher than average earning assets
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for the second quarter of 2008 which totaled $506,182,000. Similarly, average
earning assets for the six months ended June 30, 2009 totaled $512,796,000,
which was $16,676,000 or 3.36% higher than average earning assets for the six
months ended June 30, 2008 which totaled $496,120,000.
The second quarter 2009 provision for loan and lease losses totaled $517,589 as
compared to $137,000 provided for the second quarter of 2008. The provision for
the six months ended June 30, 2009 totaled $787,589, which is an increase of
$575,589 from the six months ended June 30, 2008. The year-over-year increase in
the provision for loan and lease losses is due to economic uncertainty, the
continued downturn in the real estate markets both regionally and nationally,
analysis of the risk within the loan portfolio, as well as the growth in the
loan and lease portfolio. The ratio of the allowance for such loan and lease
losses to total loans and leases at June 30, 2009 was 1.05% as compared with
1.00% at December 31, 2008 and .66% at June 30, 2008. At June 30, 2009, the
allowance for loan and lease losses was equivalent to 46% of total nonperforming
assets as compared with 66% of total nonperforming assets at December 31, 2008
and 60% of total nonperforming assets at June 30, 2008.
As of June 30, 2009, deposits totaled $377 million which was an increase of $32
million over the June 30, 2008 level of $345 million. Deposit growth was
primarily in savings deposits and time certificates of deposit. Growth in
savings deposits has been in traditional savings and municipal NOW accounts.
Growth has also been in the Bank's CDARs deposits, which provide FDIC deposit
insurance beyond the $250,000 limit.
Noninterest income for the three and six months ended June 30, 2009 totaled
$1,230,000 and $2,045,000 respectively as compared to noninterest income for the
same periods in 2008 which were $939,000 and $1,813,000, respectively. In both
comparisons, the increase in noninterest income is primarily attributable to
gains from the sale of available for sale securities. During the second quarter
the Company sold approximately $20 million of available for sale securities.
These securities were sold with the purpose of reducing interest rate risk and
increasing liquidity. The sales resulted in gains totaling $321,074. Gains on
securities for the second quarter of 2008 totaled $20,899.
Trust income totaled $275,483, compared to second quarter 2008 trust income of
$333,569. For the first six months of 2009, Trust income totaled $547,539,
compared to the six months ended June 30, 2008 trust income of $673,093. The
decline from second quarter 2008 levels is due to market declines of assets
under management. These decreases remain reflective of declines in the market
value of assets under management and the resulting reduction in fees from such
decline. However, the demand for fiduciary services provided in the Trust
department continues to be strong.
Noninterest expense increased 16.12% for the second quarter of 2009 and
increased 11.02% year-over-year. The majority of the increase is a result of
higher 2009 costs for FDIC insurance, benefits, legal and audit fees. The impact
of these increases was mitigated by cost containment efforts for advertising,
salaries, insurance, travel, and memberships. In addition to boosting its
regular insurance fees, the FDIC levied a special assessment on all banks to
bolster its insurance fund. Including the $260,000 special FDIC assessment
levied in the second quarter, regulatory assessments increased by $465,000 to
$516,000 for the second quarter of 2009 from $51,000 paid in the second quarter
a year ago. For the six months ended June 30, 2009, these costs totaled $719,000
compared to $92,000 for the first six months of 2008.
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Statements contained in this news release contain forward-looking statements
within the meaning of the Private Securities Litigation Reform Act of 1995.
These statements are based on the beliefs and expectations of management as well
as the assumption made using information currently available to management.
Since these statements reflect the views of management concerning future events,
these statements involve risks, uncertainties and assumptions, including, among
others: changes in market interest rates and general and regional economic
conditions; changes in government regulations; changes in accounting principles;
and the quality or composition of the loan and investment portfolios and other
factors that may be described in the Company's quarterly reports on Form 10-Q
and its annual report on Form 10-K, each filed with the Securities and Exchange
Commission, which are available at the Securities and Exchange Commission's
internet website (www.sec.gov) and to which reference is hereby made. Therefore,
actual future results may differ significantly from results discussed in the
forward-looking statements.
The First National Bank of Litchfield is a community bank operating full service
banking offices in Canton, Goshen, Litchfield, Marble Dale, New Milford,
Roxbury, Washington and Torrington. The Bank maintains a full service Trust
department that offers asset management, custody and estate settlement services
to individuals, non-profit and commercial customers. Additionally, the Bank
offers non-deposit retail investment products such as mutual funds, annuities
and insurance through its relationship with Infinex Investments, Inc. The Bank's
subsidiary, First Litchfield Leasing Corporation, provides middle market
equipment leasing/financing to the commercial markets of Connecticut and
Massachusetts. The Company's website address is www.fnbl.com.
Contact:
Joseph J. Greco, President & CEO
(860) 567-6438
Selected financial data follows
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First Litchfield Financial Corporation
Selected Consolidated Financial Data
Unaudited
Period end balance sheet data: June 30,
2009 2008
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Total Assets $551,018,000 $544,630,000
Loans, net 378,792,000 337,242,000
Investments 84,003,000 152,223,000
Deposits 377,151,000 344,758,000
Borrowings 133,718,000 170,511,000
Stockholders' equity 32,809,000 25,362,000
Book value per common share 13.92 10.75
Tangible book value per common share 13.92 10.75
Leverage ratio 7.57% 7.34%
Common shares issued and outstanding 2,356,875 2,360,283
Dividends declared per common share 0.05 0.15
For the Three Months
Ended June 30,
2009 2008
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Operating results:
Net interest income $ 4,001,000 $ 3,707,000
Securities gains, net 321,000 21,000
Total noninterest income 1,230,000 939,000
Loan and lease loss provision 518,000 137,000
Total noninterest expense 4,440,000 3,824,000
Income before tax 274,000 685,000
Income tax (benefit) expense -5,000 69,000
Net income before preferred dividends and
discount accretion 279,000 616,000
Net income available to common shareholders 109,000 616,000
Income per common share (basic) $ 0.05 $ 0.26
Return on average assets 0.08% 0.46%
Return on average equity 1.31% 8.99%
For the Six Months
Ended June 30,
2009 2008
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Operating results:
Net interest income $ 7,973,000 $ 7,267,000
Securities gains, net 321,000 33,000
Total noninterest income 2,045,000 1,813,000
Loan and lease loss provision 788,000 212,000
Total noninterest expense 8,463,000 7,623,000
Income before tax 767,000 1,245,000
Income tax expense 65,000 130,000
Net income before preferred dividends and
discount accretion 703,000 1,115,000
Net income available to common shareholders 375,000 1,115,000
Income per common share (basic) $ 0.16 $ 0.47
Return on average assets 0.14% 0.42%
Return on average equity 2.28% 7.93%