EX 99.1
FIRST LITCHFIELD FINANCIAL CORPORATION
13 North Street, Litchfield, Connecticut 06759
NEWS RELEASE
For Immediate Release
First Litchfield Financial Corporation Announces Third Quarter Results
Litchfield, Connecticut, November 17, 2009, First Litchfield Financial
Corporation (Trading Symbol: FLFL.OB) (the "Company") the holding company for
The First National Bank of Litchfield (the "Bank") reported financial results
for the three (3) and nine (9) months ended September 30, 2009. Net loss
available to common shareholders for the third quarter of 2009 totaled
$2,253,000 versus a net loss of $5,426,000 for the third quarter of 2008. Basic
and diluted net loss per common share for the third quarter of 2009 were both
$0.96, compared to basic and diluted net loss per share of $2.30 for the third
quarter of 2008. Net loss available to common shareholders for the nine months
ended September 30, 2009 totaled $1,878,000 versus net loss of $4,311,000 for
the nine months ended September 30, 2008. Basic and diluted net loss per common
share for the nine months ended September 30, 2009 were both $0.80, compared to
basic and diluted net loss per share of $1.82 for the nine months ended
September 30, 2008.
Third quarter 2009 net interest income, decreased 4.07% year-over-year to
$3,727,000 from $3,885,000 in the third quarter of 2008. The decrease in the
volume of earning assets resulted in the decrease in net interest income. For
the first nine months of 2009, net interest income was $11,700,000, up 4.70%
from $11,175,000 in the first nine months of 2008. The increase in the volume of
earning assets resulted in the improvement in net interest income.
The third quarter 2009 provision for loan and lease losses totaled $2,683,000 as
compared to $155,000 provided for the third quarter of 2008. The provision for
the nine months ended September 30, 2009 totaled $3,470,000, which is an
increase of $3,103,000 from the nine months ended September 30, 2008. The
year-over-year increase in the provision for loan and lease loss 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. Despite the major increases
in the reserves, the Company's actual loan losses and delinquencies remain
relatively low and manageable. The ratio of the allowance for such loan and
lease losses to total loans and leases at September 30, 2009 was 1.59% as
compared with 1.00% at December 31, 2008 and .64% at September 30, 2008. At
September 30, 2009, the allowance for loan and lease losses was equivalent to
48% of total nonperforming assets as compared with 66% of total nonperforming
assets at December 31, 2008 and 48% of total nonperforming assets at September
30, 2008.
Noninterest income for the three and nine months ended September 30, 2009
totaled $1,215,000 and $3,260,000 respectively as compared to noninterest loss
for the same periods in 2008, which were $(5,808,000) and $(4,018,000),
respectively. The change in noninterest income is primarily attributable to the
Other Than Temporarily Impaired losses totaling $(6,946,000) recorded in the
third quarter of 2008. During the three and nine months ended September 30, 2009
the Company originated and sold residential mortgages in the secondary market,
which resulted in gains on sales of loans totaling $349,000 and $510,000,
respectively, compared to similar sales transacted during the three and nine
months ended September 30, 2008, which resulted in gains totaling $17,000 and
$35,000, respectively.
Trust income for the third quarter ended September 30, 2009 totaled $345,000,
compared to third quarter 2008 trust income of $319,000. For the first nine
months of 2009, trust income totaled $893,000, compared to the nine months ended
September 30, 2008 trust income of $992,000. The increase from third quarter
2008 levels is due to new asset management business. The decrease on the year-to
date basis reflects declines in the market value of assets under management and
the resulting reduction in fees from such decline.
Noninterest expense increased 35.94% for the third quarter of 2009 and increased
19.25% year-over-year. The majority of the increase is a result of higher 2009
costs for FDIC insurance and loss due to dishonored items. 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. In addition to the $260,000 special FDIC assessment levied in
the second quarter, regulatory assessments increased by $120,000 to $211,000 for
the third quarter of 2009 from $91,000 paid in the third quarter a year ago. For
the nine months ended September 30, 2009, these costs totaled $930,000 compared
to $184,000 for the first nine months of 2008.
On October 26, 2009, Union Savings Bank, a Connecticut-chartered mutual savings
bank, and the Company jointly announced a definitive agreement for the merger of
the Company and the Bank with and into Union Savings Bank.
Under terms of the agreement, upon completion of the merger, each shareholder of
the Company will receive $15.00 per share in cash, giving the transaction a
value of approximately $35 million. The definitive agreement has been
unanimously approved by the Boards of Union Savings Bank, the Company and the
Bank.
The transaction is subject to approval by the shareholders of the Company, as
well as customary regulatory approvals including the Office of the Comptroller
of the Currency, State of Connecticut Department of Banking and the Federal
Deposit Insurance Corporation. The transaction is expected to close in the first
quarter of 2010.
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 two in 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.
This press release does not constitute a solicitation of proxies. The Company
will file a proxy statement and other relevant documents concerning the proposed
transaction with the Securities and Exchange Commission ("SEC"). Shareholders of
the Company are urged to read the proxy statement and all other documents which
will be filed with the SEC, and any amendments or supplements to those
documents, because they will contain important information which you should
consider before making any decision regarding the transaction. You will be able
to obtain a free copy of the proxy statement, as well as other filings
containing information about the Company, at the SEC's website (www.sec.gov),
and at the Company's website (www.fnbl.com). Copies of the proxy statement may
also be obtained without charge, when available, by directing a request to First
Litchfield Financial Corporation, 13 North Street, P. O. Box 578, Litchfield, CT
06759.
The Company and its directors and executive officers may be deemed to be
participants in the solicitation of proxies from the shareholders of the Company
in connection with the acquisition. Information about the directors and
executive officers of the Company and their ownership of the Company common
stock is set forth in its proxy statement for its 2009 annual meeting of
shareholders, dated April 27, 2009, filed with the SEC which is available at the
Company and SEC websites noted above. Additional information regarding the
interests of such participants in the transaction will be contained in the proxy
statement when it becomes available.
Contact:
Joseph J. Greco, President and CEO
(860) 567-6438
Selected financial data follows
First Litchfield Financial Corporation
Selected Consolidated Financial Data
Unaudited
Period end balance sheet data: September 30,
2009 2008
------------ ------------
Total Assets $551,203,000 $506,538,000
Loans, net 376,567,000 351,737,000
Investments 98,324,000 104,949,000
Deposits 382,524,000 340,727,000
Borrowings 133,065,000 140,224,000
Stockholders' equity 31,241,000 20,061,000
Book value per common share $ 13.26 $ 8.51
Tangible book value per common share $ 13.26 $ 8.51
Leverage ratio 16.50% 6.31%
Common shares issued and outstanding 2,356,875 2,356,875
Dividends declared per common share -- 0.15
For the Three Months
Ended September 30,
2009 2008
------------ ------------
Operating results:
Net interest income $ 3,727,000 $ 3,885,000
Securities losses, net (6,000) (6,721,000)
Total noninterest income (loss) 1,215,000 (5,808,000)
Loan and lease loss provision 2,683,000 155,000
Total noninterest expense 5,102,000 3,753,000
Loss before tax (2,844,000) (5,831,000)
Income tax benefit (770,000) (405,000)
Net loss before preferred dividends and
discount accretion (2,115,000) (5,426,000)
Net loss available to common shareholders (2,253,000) (5,426,000)
Loss per common share (basic) $ (0.96) $ (2.30)
Return on average assets -1.60% -4.01%
Return on average equity -26.86% -87.77%
For the Nine Months
Ended September 30,
2009 2008
------------ ------------
Operating results:
Net interest income $ 11,700,000 $ 11,175,000
Securities gains (losses), net 315,000 (6,688,000)
Total noninterest income (loss) 3,260,000 (4,018,000)
Loan and lease loss provision 3,470,000 367,000
Total noninterest expense 13,566,000 11,376,000
Loss before tax (2,076,000) (4,586,000)
Income tax benefit (706,000) (275,000)
Net loss before preferred dividends and
discount accretion (1,465,000) (4,311,000)
Net loss available to common shareholders (1,878,000) (4,311,000)
Loss per common share (basic) $ (0.80) $ (1.82)
Return on average assets -0.45% -1.08%
Return on average equity -7.56% -21.28%