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 Regular and Special Dividends and Reports
Results for the Quarter Ended September 30, 2007
Westfield, Massachusetts, October 24, 2007: (NASDAQ:WFD) Westfield Financial,
Inc. (the "Company"), the holding company for Westfield Bank (the "Bank"),
reported net income of $2.2 million for the quarter ended September 30, 2007
compared to $0.9 million for the same period in 2006. This increase in net
income represents earnings of $0.07 per diluted share for the quarter ended
September 30, 2007, compared to $0.03 per diluted share for the same period in
2006. For the nine months ended September 30, 2007, net income was $6.1 million,
or $0.20 per diluted share, compared to $3.4 million, or $0.11 per diluted
share, for the same period in 2006.
The increase in earnings was primarily the result of an increase in net interest
income. Net interest income was $7.6 million for the three months ended
September 30, 2007 and $5.5 million for the same period in 2006. The increase in
net interest income was mainly due to a $183.9 million increase in average
earning assets as a result of funds raised in the second step stock offering.
The net interest margin, on a tax equivalent basis, was 3.18% for the three
months ended September 30, 2007, compared to 2.94% for the same period in 2006.
Noninterest expense for the three months ended September 30, 2007 was $5.4
million, compared to $4.9 million for the same period in 2006. This increase was
primarily due to a $470,000 increase in salaries and benefits to $3.5 million
for the three months ended September 30, 2007, compared to $3.0 million for the
same period in 2006. Salaries expense increased $269,000 as a result of hiring
new employees and normal increases in employee salaries. Much of the new hiring
was associated with a new Westfield Bank branch which opened for business during
the second quarter of 2007. Expenses related to share-based compensation
increased $226,000 as a result of new grants of restricted stock and stock
options in 2007, along with expenses related to the 2007 Employee Stock
Ownership Plan.
The results for the three 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. The Company recorded no losses on the sale of fixed assets in the
three months ended September 30, 2007.
1
Balance Sheet Growth
Total assets increased $46.8 million to over $1.0 billion at September 30, 2007
from $996.8 million at December 31, 2006.
Investment securities increased $116.0 million to $525.0 million at September
30, 2007 from $409.0 million at December 31, 2006. Investment securities
increased as Management invested the proceeds of the second step stock offering.
Cash and cash equivalents decreased $101.5 million, to $53.0 million at
September 30, 2007 from $154.5 million at December 31, 2006. The decrease in
cash and cash equivalents is the result of using funds to purchase investment
securities.
Net loans increased by $16.9 million, to $402.1 million at September 30, 2007
from $385.2 million at December 31, 2006. The increase in net loans was
primarily the result of an increase in commercial and industrial loans and
commercial real estate loans. Commercial and industrial loans increased $10.7
million to $111.1 million at September 30, 2007 from $100.4 million at December
31, 2006. Commercial real estate loans increased $6.9 million to $181.4 million
at September 30, 2007 from $174.5 million at December 31, 2006.
Asset growth was funded primarily through a $48.0 million increase in Federal
Home Loan Bank borrowings, which totaled $103.0 million at September 30, 2007.
In addition, customer repurchase agreements increased $4.9 million to $22.8
million at September 30, 2007 from $17.9 million at December 31, 2006. All of
Westfield Bank's customer repurchase agreements at September 30, 2007 were held
by commercial customers.
Total deposits decreased $13.3 million to $614.2 million at September 30, 2007
from $627.5 million at December 31, 2006. The decrease in deposits was due to a
decrease in money market accounts and time deposits, partially offset by an
increase in regular savings accounts. Money market accounts decreased $12.9
million to $81.6 million at September 30, 2007. Time deposits decreased $6.1
million to $367.9 million at September 30, 2006. These decreases were partially
offset by an increase of $6.5 million in regular savings accounts which was
fueled by a new product with a higher interest rate than the Bank's other
regular savings products.
Stockholders' equity at September 30, 2007 and December 31, 2006 was $289.6
million and $289.4 million, respectively, which represented 27.8% of total
assets as of September 30, 2007 and 29.0% of total assets as of December 31,
2006.
Credit Quality
Nonperforming loans were $1.5 million at September 30, 2007 and $1.0 million at
December 31, 2006. This represents 0.36% of total loans at September 30, 2007
and 0.26% of total loans at December 31, 2006.
2
James Hagan, President and COO, stated "Westfield Bank has emphasized high
quality commercial credit and we are pleased with our loan quality. I'd like to
reiterate that the Bank has not conducted any sub-prime residential lending
programs." In September 2001, Westfield Bank began referring substantially all
of the originations of its residential real estate loans to a third party
mortgage company.
The allowance for loan losses was $5.8 million at September 30, 2007 and $5.4
million at December 31, 2006. This represents 1.42% of total loans at September
30, 2007 and 1.39% of total loans at December 31, 2006. The allowance for loan
losses as a percentage of nonperforming loans was 390% at September 30, 2007 and
529% at December 31, 2006.
Mortgage-backed securities totaled $378.0 million at September 30, 2007 and were
primarily comprised of securities issued by government-sponsored enterprises,
such as Fannie Mae. Privately issued mortgage-backed securities comprised 10.2%
of the mortgage-backed securities portfolio at September 30, 2007, are rated AAA
by Standard & Poors, and contain no sub-prime collateral.
Declaration of Regular and Special Dividends
Donald A. Williams, Chairman and Chief Executive Officer stated, "On October 23,
2007, the Board of Directors declared a regular cash dividend of $0.05 per share
and a special cash dividend of $0.20 per share. Both the regular and special
dividends are payable on November 20, 2007, to all shareholders of record on
November 7, 2007."
The Bank is headquartered in Westfield, Massachusetts and operates through 11
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.
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.
3
WESTFIELD FINANCIAL, INC. and SUBSIDIARIES
Selected Consolidated Statement of Operations and Other Data
(Dollars in thousands, except per share data)
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2007 2006 2007 2006
---- ---- ---- ----
Interest and dividend income $ 13,752 $ 10,727 $ 39,655 $ 31,269
Interest expense 6,173 5,183 17,143 14,035
----------- ----------- ----------- -----------
Net interest and dividend income 7,579 5,544 22,512 17,234
Provision for loan losses 50 50 225 325
----------- ----------- ----------- -----------
Net interest and dividend income after
provision for loan losses 7,529 5,494 22,287 16,909
Noninterest income 964 493 2,757 2,231
Noninterest expense 5,351 4,877 16,237 14,578
----------- ----------- ----------- -----------
Income before income taxes 3,142 1,110 8,807 4,562
Income taxes 970 236 2,710 1,115
----------- ----------- ------------ -----------
Net income $ 2,172 $ 874 $ 6,097 $ 3,447
=========== =========== =========== ===========
Basic earnings per share (1) $ 0.07 $ 0.03 $ 0.20 $ 0.11
Average shares outstanding (1) 29,785,103 30,680,142 29,999,156 30,615,656
Diluted earnings per share (1) $ 0.07 $ 0.03 $ 0.20 $ 0.11
Diluted average shares outstanding (1) 30,248,763 31,256,723 30,498,623 31,204,677
Other Data:
Return on Average Assets (2) 0.84% 0.42% 0.81% 0.56%
Return on Average Equity (2) 2.97% 2.99% 2.80% 4.00%
Net Interest Margin (3) 3.18% 2.94% 3.27% 3.11%
(1) Per share amounts related to periods prior to the date of completion of the conversion
(January 3, 2007) have been restated to give retroactive recognition to the exchange ratio
applied in the conversion.
(2) Three and nine month results have been annualized.
(3) Net interest margin is calculated on a tax equivalent basis.
4
WESTFIELD FINANCIAL, INC. and SUBSIDIARIES
Selected Consolidated Balance Sheet and Other Data
(Dollars in thousands, except per share data)
(Unaudited)
September 30, December 31,
2007 2006
---- ----
Total assets $1,043,588 $996,829
Securities held to maturity 285,427 240,392
Securities available for sale 239,598 168,629
Stock in Federal Home Loan Bank of Boston 6,610 4,246
Loans 407,881 390,621
Allowance for loan losses 5,793 5,437
---------- --------
Net loans 402,088 385,184
Total deposits 614,169 627,466
Federal Home Loan Bank advances 103,000 55,000
Customer repurchase agreements 22,823 17,919
Stockholders' equity 289,602 289,408
Book value per share 9.07 9.07
Other Data:
Nonperforming loans $ 1,486 $ 1,028
Nonperforming loans as a percentage
of total assets 0.14% 0.10%
Nonperforming loans as a percentage
of total loans 0.36% 0.26%
Allowance for loan losses as a percentage
of nonperforming loans 390% 529%
Allowance for loan losses as a percentage
of total loans 1.42% 1.39%
5