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 March 31, 2008
Westfield, Massachusetts, April 23, 2008: Westfield Financial, Inc. (the
"Company") (NASDAQ:WFD), the holding company for Westfield Bank (the "Bank"),
reported net income of $1.9 million for the quarter ended March 31, 2008,
compared to $2.0 million for the same period in 2007. This represents earnings
of $0.06 per diluted share for the quarter ended March 31, 2008, compared to
$0.07 per diluted share for the same period in 2007. The decrease in earnings
was primarily the result of an increase in noninterest expense, partially
offset by an increase in net interest and dividend income.
For the three months ended March 31, 2008, noninterest expense was $5.8 million
compared to $5.3 million for the same period in 2007. This was primarily due to
an increase of $294,000 in salaries and benefits, which were $3.6 million for
the three months ended March 31, 2008. The increase in salaries and benefits
for the three months ended March 31, 2008 was primarily the result of an
increase of $202,000 in expenses related to share-based compensation, due to
new grants of restricted stock and stock options in the third quarter of 2007.
In addition, expenses related to employee health insurance increased $57,000
due to normal increases in this area.
Net interest income was $7.7 million for the three months ended March 31, 2008
and $7.5 million for the same period in 2007. The increase in net interest
income was mainly due to a $75.9 million increase in average earning assets.
The net interest margin, on a tax equivalent basis, was 3.16% for the three
months ended March 31, 2008, compared to 3.34% for the same period in 2007.
Westfield Financial, Inc. incurred a net loss of $10,000 on the sale and
writedown of securities for the three months ended March 31, 2008. This was due
to a writedown of $310,000 on preferred stock issued by Freddie Mac, a
government-sponsored enterprise. Management deemed the value of this preferred
stock to be other than temporarily impaired. The writedown was offset by net
gains of $300,000 for the three months ended March 31, 2008 on the sale of
other investment securities. There were no gains, losses, or writedowns related
to investment securities for the same period in 2007.
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Balance Sheet Growth
Total assets increased $43.0 million to $1.1 billion at March 31, 2008 from
$1.0 billion at December 31, 2007.
Cash and cash equivalents increased $25.6 million to $63.2 million at March 31,
2008 from $37.6 million at December 31, 2007. The increase in cash and cash
equivalents was primarily the result of cash flow received from the investment
portfolio late in the first quarter of 2008. Management intends to reinvest
some of these funds during the second quarter of 2008.
Investment securities increased $11.6 million to $534.4 million at March 31,
2008 from $522.8 million at December 31, 2007. The increase in investment
securities was the result of reinvesting funds from short-term borrowings and
long-term debt as discussed below.
Net loans increased by $3.2 million to $418.1 million at March 31, 2008 from
$414.9 million at December 31, 2007. This was the result of increases in
commercial and industrial loans and commercial real estate loans, partially
offset by a decrease in residential real estate loans. Commercial and
industrial loans increased $7.3 million to $123.8 million at March 31, 2008
from $116.5 million at December 31, 2007. Commercial real estate loans
increased $2.1 million to $192.0 million at March 31, 2008. Residential real
estate loans decreased by $5.4 million to $102.7 million at March 31, 2008.
Asset growth was funded primarily through a $56.6 million increase in
short-term borrowings and long-term debt, which totaled $196.8 million at March
31, 2008. This was primarily due to $48.5 million in new long-term debt, in the
form of institutional repurchase agreements, at March 31, 2008. The slope of
the yield curve provided opportunities to earn a spread by borrowing funds and
reinvesting in loans and securities.
Total deposits decreased $9.1 million to $593.6 million at March 31, 2008 from
$602.7 million at December 31, 2007. The decrease in deposits was due to a
decrease in time deposits and money market accounts, partially offset by an
increase in regular savings and checking accounts. Time deposits decreased
$16.6 million to $336.7 million at March 31, 2008. Management placed less
emphasis on gathering time deposits in favor of using other types of funding,
such as borrowings.
Stockholders' equity at March 31, 2008 and December 31, 2007 was $281.9 million
and $286.5 million, respectively, which represented 26.0% of total assets as of
March 31, 2008 and 27.6% of total assets as of December 31, 2007. The change in
stockholders' equity is comprised of the net repurchase of 361,958 shares for
$3.7 million related to the stock repurchase plan, a dividend amounting to $1.5
million declared on January 22, 2008, partially offset by net income of $1.9
million for the three months ended March 31, 2008.
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Credit Quality
Nonperforming loans increased $1.8 million to $3.0 million at March 31, 2008
compared to $1.2 million at December 31, 2007. This represented 0.70% of total
loans at March 31, 2008 and 0.29%, of total loans, at December 31, 2007. The
increase was the result of a single agricultural commercial loan relationship
of $1.8 million. The loan relationship is primarily secured by real estate.
Management does not anticipate incurring significant losses on this
relationship.
The allowance for loan losses was $5.9 million at March 31, 2008 and $5.7
million at December 31, 2007. This represents 1.39% of total loans at March 31,
2008 and 1.36% of total loans at December 31, 2007. At these levels, the
allowance for loan losses as a percentage of nonperforming loans was 199% at
March 31, 2008 and 476% at December 31, 2007.
Declaration of Regular and Special Dividends
Donald A. Williams, Chairman and Chief Executive Officer stated, "On April 22,
2008, the Board of Directors declared a regular cash dividend of $0.05 per
share and a special cash dividend of $0.15 per share. Both regular and special
dividends are payable on May 22, 2008 to all shareholders of record on May 8,
2008."
The Bank is headquartered in Westfield, Massachusetts and operates through 11
banking offices in Agawam, East Longmeadow, Holyoke, Southwick, Springfield,
West Springfield and Westfield, Massachusetts. The Bank's deposits are insured
by the Federal Deposit Insurance Corporation.
The Company wishes to caution readers not to place undue reliance on any such
forward-looking statements contained in this news release, which speak only as
of the date made. The Company wishes to advise readers that the Company's
actual results for future periods may differ materially from any opinions or
statements expressed with respect to future periods in any current statements.
The Company and the Bank do not undertake and specifically decline any
obligation to publicly release the result of any revisions that may be made to
any forward-looking statements to reflect events or circumstances after the
date of such statements or to reflect the occurrence of anticipated or
unanticipated events.
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WESTFIELD FINANCIAL, INC. and SUBSIDIARIES
Selected Consolidated Statement of Operations and Other Data
($ in thousands, except per share data)
(Unaudited)
Three Months Ended
March 31,
2008 2007
---- ----
Interest and dividend income $ 13,769 $ 12,844
Interest expense 6,061 5,323
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Net interest and dividend income 7,708 7,521
Provision for loan losses 175 100
----------- -----------
Net interest and dividend income after
provision for loan losses 7,533 7,421
Noninterest income 865 819
Noninterest expense 5,784 5,306
----------- -----------
Income before income taxes 2,614 2,934
Income taxes 753 913
----------- -----------
Net income $ 1,861 $ 2,021
=========== ===========
Basic earnings per share $ 0.06 $ 0.07
Average shares outstanding 29,477,668 30,103,285
Diluted earnings per share $ 0.06 $ 0.07
Diluted average shares outstanding 29,992,198 30,683,318
Other Data:
Return on Average Assets (1) 0.71% 0.84%
Return on Average Equity (1) 2.62% 2.81%
Net Interest Margin (2) 3.16% 3.34%
(1) Three 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)
March 31, December 31,
2008 2007
---- ----
Total assets $1,082,735 $1,039,784
Securities held to maturity 273,905 278,619
Securities available for sale 260,531 244,229
Stock in Federal Home Loan Bank of Boston
and other stock 7,871 7,510
Loans 424,053 420,628
Allowance for loan losses 5,908 5,726
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Net loans 418,145 414,902
Total deposits 593,582 602,676
Short-term borrowings 48,339 35,268
Long-term debt 148,500 105,000
Stockholders' equity 281,909 286,532
Book value per share 8.93 8.97
Other Data:
Nonperforming loans $ 2,963 $ 1,202
Nonperforming loans as a percentage of total assets 0.27% 0.12%
Nonperforming loans as a percentage of total loans 0.70% 0.29%
Allowance for loan losses as a percent
of nonperforming loans 199% 476%
Allowance for loan losses as a percentage
of total loans 1.39% 1.36%
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