Exhibit 99.1
FOR IMMEDIATE RELEASE
For further information contact:
Donald A. Williams, Chairman & CEO
Michael J. Janosco Jr., CFO
413-568-1911
Westfield Financial, Inc. Declares Special Dividend and Reports Results for the
Quarter Ended September 30, 2006
Westfield, Massachusetts, October 25, 2006: (AMEX:WFD) Westfield Financial, Inc.
(the "Company"), the holding company for Westfield Bank (the "Bank"), reported
net income of $874,000, or $0.09 per diluted share, for the quarter ended
September 30, 2006 compared to $1.6 million, or $0.16 per diluted share for the
same period in 2005. For the nine months ended September 30, 2006, net income
was $3.4 million, or $0.36 per diluted share compared to $4.5 million, or $0.46
per diluted share for the same period in 2005. The results for both the three
and nine months ended September 30, 2006 included a net loss of $378,000 on the
sale of fixed assets, which was the result of the sale of a building that
previously housed Westfield Bank's branch in downtown Springfield,
Massachusetts.
Net interest income was $5.5 million for the three months ended September 30,
2006 and $5.9 million for the same period in 2005. The net interest margin, on a
tax equivalent basis, was 2.94% for the three months ended September 30, 2006,
compared to 3.18% for the same periods in 2005. The decrease in the net interest
margin was primarily due to higher funding costs resulting from the rising rate
environment. As the rates on time deposits have increased over the past several
months, some customers have shifted funds out of core deposits, which generally
pay lower rates, and into time deposits.
Donald A. Williams, Chairman and Chief Executive Officer stated, "On October 24,
2006, the Board of Directors declared a regular cash dividend of $0.15 per share
and a special cash dividend of $0.20 per share. Both the regular and special
dividends are payable on November 22, 2006 to all shareholders of record on
November 8, 2006."
Total assets increased $32.4 million to $837.5 million at September 30, 2006
from $805.1 million at December 31, 2005. Total deposits increased $15.1 million
to $638.1 million at September 30, 2006 from $623.0 million at December 31,
2005. The increase in deposits was primarily the result of an increase in term
deposits of $46.1 million, which were $381.1 million at September 30, 2006.
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Net loans during the period increased by $1.0 million, to $379.8 million at
September 30, 2006 from $378.8 million at December 31, 2005. Commercial real
estate and commercial and industrial loans decreased $1.7 million to $267.9
million at September 30, 2006 from $269.6 million at December 31, 2005. The
decrease was primarily the result of the payoff of $18.2 million in commercial
loans involving 11 relationships that either divested real estate or the entire
businesses were sold to concerns headquartered outside of Westfield Bank's
market area.
Customer repurchase agreements were $20.0 million at September 30, 2006 and
$14.4 million at December 31, 2005. All of Westfield Bank's customer repurchase
agreements at September 30, 2006 were held by commercial customers.
Stockholders' equity at September 30, 2006 and December 31, 2005 was $117.0
million and $115.8 million, respectively, which represented 14.0% of total
assets as of September 30, 2006 and 14.4% of total assets as of December 31,
2005. The change is primarily attributable to net income of $3.4 million for the
nine months ended September 30, 2006, offset by the net repurchase of 25,845
shares of common stock for $726,000, and the declaration and payment by the
Board of Directors of regular and special dividends amounting to $2.5 million.
Other noninterest income for the three months ended September 30, 2006 was
$871,000 compared to $915,000 for the same period in 2005. The decrease was
primarily the result of deceases in checking account processing fee income.
Noninterest expense for the three months ended September 30, 2006 was $4.9
million compared to $4.6 million for the same period in 2005. The increase was
primarily the result of hiring new employees and normal increases in expenses
related to employee salaries and benefits. In addition, Westfield Financial
recorded expenses of $73,000 related to stock options for the three months ended
September 30, 2006 compared to - 0 - for the same period in 2005. The
requirement to expense stock based compensation related to stock options became
effective for Westfield Financial for the fiscal year beginning on January 1,
2006.
The Bank is headquartered in Westfield, Massachusetts and operates through 10
banking offices in Agawam, East Longmeadow, Holyoke, Southwick, Springfield,
West Springfield and Westfield, Massachusetts. The Bank's deposits are insured
by the Federal Deposit Insurance Corporation.
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The Company wishes to caution readers not to place undue reliance on any such
forward-looking statements contained in this news release, which speak only as
of the date made. The Company wishes to advise readers that the factors listed
above could affect the Company's financial performance and could cause the
Company's actual results for future periods to differ materially from any
opinions or statements expressed with respect to future periods in any current
statements. The Company and the Bank do not undertake and specifically decline
any obligation to publicly release the result of any revisions that may be made
to any forward-looking statements to reflect events or circumstances after the
date of such statements or to reflect the occurrence of anticipated or
unanticipated events.
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WESTFIELD FINANCIAL, INC. and SUBSIDIARIES
Selected Consolidated Statement of Operations and Other Data
($ in thousands, except per share data)
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2006 2005 2006 2005
---- ---- ---- ----
Interest and dividend income $ 10,727 $ 9,504 $ 31,269 $ 27,556
Interest expense 5,183 3,554 14,035 9,794
---------- ---------- ---------- ----------
Net interest and dividend income 5,544 5,950 17,234 17,762
Provision for loan losses 50 100 325 365
Net interest and dividend income after
provision for loan losses 5,494 5,850 16,909 17,397
Net losses on sales of fixed assets (378) - (378) -
Net gains on sales of securities
available for sale - - - 19
Other noninterest income 871 915 2,609 2,455
Other noninterest expense 4,877 4,617 14,578 13,998
---------- ---------- ---------- ----------
Income before income taxes 1,110 2,148 4,562 5,873
Income taxes 236 553 1,115 1,355
---------- ---------- ---------- ----------
Net income $ 874 $ 1,595 $ 3,447 $ 4,518
========== ========== ========== ==========
Basic earnings per share $ 0.09 $ 0.17 $ 0.37 $ 0.48
Average shares outstanding 9,349,768 9,451,534 9,330,116 9,484,074
Diluted earnings per share $ 0.09 $ 0.16 $ 0.36 $ 0.46
Diluted average shares outstanding 9,525,481 9,688,635 9,509,620 9,731,892
Other Data:
Return on Average Assets (1) 0.42% 0.78% 0.56% 0.75%
Return on Average Equity (1) 2.99% 5.33% 4.00% 5.09%
Net Interest Margin (2) 2.94% 3.18% 3.12% 3.24%
(1) Three and nine month results have been annualized.
(2) Net interest margin is calculated on a tax equivalent basis.
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WESTFIELD FINANCIAL, INC. and SUBSIDIARIES
Selected Consolidated Balance Sheet and Other Data
($ in thousands, except per share data)
(Unaudited)
September 30, December 31,
2006 2005
---- ----
Total assets $837,465 $805,095
Securities held to maturity 231,356 225,450
Securities available for sale 148,416 129,459
Stock in Federal Home Loan Bank of Boston
and other stock 4,246 4,237
Loans 385,096 384,259
Allowance for loan losses 5,345 5,422
-------- --------
Net loans 379,751 378,837
Total deposits 638,104 623,045
Federal Home Loan Bank Advances 55,000 45,000
Stockholders' equity 117,026 115,842
Book value per share 12.51 12.37
Other Data:
Nonperforming loans $ 706 $ 1,919
Nonperforming loans as a percentage of total assets 0.08% 0.24%
Nonperforming loans as a percentage of total loans 0.18% 0.50%
Allowance for loan losses as a percentage
of nonperforming loans 757% 283%
Allowance for loan losses as a percentage of total loans 1.39% 1.41%
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