EXHIBIT 99.1
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FOR IMMEDIATE RELEASE
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November 2, 2004
FOR MORE INFORMATION, CONTACT:
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John M. Lilly, Treasurer and Chief Financial Officer (413) 747-1465
Nasdaq Symbol - WBKC
WESTBANK CORPORATION ANNOUNCES QUARTERLY EARNINGS
AND COMPLETION OF REFINANCING
West Springfield, MA -- Westbank Corporation (Nasdaq: WBKC) (the "Corporation")
today reported quarterly net income of $452,000, representing $0.09 per share
(diluted), while net income for the nine-month period ended September 30, 2004
totaled $3,482,000 or $0.72 per share (diluted). Net income for the third
quarter of 2003 totaled $1,421,000 or $0.29 per share (diluted) and $4,429,000
or $0.93 per share (diluted) for the first nine months of 2003. The decrease in
net income for the current quarter and nine-month period is primarily
attributable to a write-down of $807,000 related to the redemption of the
Corporation's prior trust preferred securities and a write-down of preferred
stock deemed to be other than temporarily impaired in the amount of $583,000. In
addition, the quarterly provision for loan losses was $150,000 for the three
months ended September 30, 2004 versus a reversal of the provision for loan
losses of $354,000 for the same period of 2003.
Excluding the write-down for the trust preferred security, gains and losses on
loans and securities, and loan loss provisions, core earnings for the current
quarter improved by $359,000 or 25% versus the third quarter of 2003.
"We are very pleased with the results of the refinancing of our trust preferred
securities this past quarter," stated Donald R. Chase, President and CEO, "the
results of which are expected to save the Corporation approximately $780,000 in
interest expense annually based on current interest rates." The trust preferred
securities are a hybrid debt financing. The Corporation issued an aggregate
principal amount of $17,526,000 in junior subordinated deferrable interest
debentures to two trust subsidiaries, which in turn each issued an aggregate
principal amount of $8.5 million of capital securities to a pooled investment
vehicle and an aggregate principal amount of $263,000 of common securities to
the Corporation. The Corporation guarantees the payment of the capital
securities and controls the trusts. The Corporation first issued trust preferred
securities in September 1999 for capital purposes to facilitate its acquisition
of the Connecticut division of the New London Trust Company. By refinancing in
the current interest rate environment, the Corporation will realize significant
savings in interest expense related to its trust preferred financing.
Net interest income improved to $5,682,000 for the quarter ended September 30,
2004, an increase of $511,000 versus the same quarter last year. This
improvement was the result of a growth in earning assets. The Corporation's net
interest margin for the quarter and nine months ended September 30, 2004 was
3.20% and 3.26% respectively.
Non-interest income for the three-month period ended September 30, 2004 totaled
$489,000 versus $1,296,000 for the same quarter during 2003. This decrease in
non-interest income in the current period was primarily due to net losses on the
write-down of securities in the amount of $303,000 offset by a gain on sale of
mortgages totaling $14,000 as compared to a gain on sale of securities and loans
totaling $301,000 and $171,000 respectively for the quarter ended September 30,
2003. The net loss on securities of $303,000 in the current quarter includes
gains on sale of securities of $280,000 that were offset by the impairment
charge of $583,000 on preferred stock, as noted above.
WESTBANK CORPORATION ANNOUNCES QUARTERLY EARNINGS
AND COMPLETION OF REFINANCING
Page 2 of 2
Operating expenses for the quarter ended September 30, 2004 totaled $5,457,000
versus $4,544,000 for the quarter ended September 30, 2003. The increase in
operating expenses is a direct result of the overall growth of the Corporation
and the write-down of the issuance costs from the Corporation's initial trust
preferred financing in 1999 totaling $807,000, which was required when these
trust preferred securities were redeemed in this quarter and replaced with trust
preferred securities bearing a lower interest rate, as described above.
As of September 30, 2004, assets totaled $749.5 million, an increase of $97.3
million or 15% from September 30, 2003. Investments increased by $93.6 million
and total $248.8 million as of September 30, 2004, while loans totaled $435.2
million as of September 30, 2004. Deposits also showed significant growth,
totaling $594.1 million as of September 30, 2004 as compared to $543.7 million
at September 30, 2003.
Asset quality remains strong, with non-performing assets totaling $2,308,000,
representing just 0.31% of total assets. During the quarter ended September 30,
2004, the Corporation's provision for loan losses was $150,000 and the allowance
for loan losses to total loans was 1.00%.
Mr. Chase explained that, "As noted last quarter, the Corporation has seen an
increase in commercial loan and commercial mortgage volume, and this has
continued during the third quarter. Commercial volume increased by more than $22
million versus September 2003 or 13% and grew by another $10 million or 5% over
the last three months. Moving into the fourth quarter, commercial loan and
mortgage commitments total more than $45 million."
Stockholders' equity as of September 30, 2004 totaled $46,622,000, representing
a book value of $9.93 per share. The results of the nine months ended September
30, 2004 represent a return on assets of 0.63% and a return on equity of 10.2%.
Westbank Corporation is the holding company for Westbank of West Springfield,
Massachusetts, a commercial bank and trust company operating 18 banking offices
in Massachusetts and Connecticut.
Statements contained in this news release, which are not historical facts,
contain forward-looking statements as that term is defined in the Private
Securities Litigation Reform Act of 1995. Such forward-looking statements are
subject to risk and uncertainties that could cause actual results to differ
materially from those currently anticipated due to a number of factors, which
include, but are not limited to, factors discussed in documents filed by the
Corporation with the Securities and Exchange Commission from time to time. The
Corporation does not undertake to update any forward-looking statement, whether
written or oral, that may be made from time to time by it or on its behalf.
CONDENSED CONSOLIDATED BALANCE SHEETS
Westbank Corporation and Subsidiaries
September 30, (Unaudited)
(Dollar amounts in thousands) 2004 2003
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ASSETS
Cash and due from banks
Non-interest bearing $ 15,753 $ 17,001
Interest bearing 175 26
Federal funds sold 19,610 1,975
Securities held to maturity 63,259 276
Securities available for sale 185,571 154,982
Loans $ 435,167 $ 450,247
(Less) allowance for loan losses 4,349 4,714
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Net loans 430,818 445,533
Bank premises and equipment 6,799 6,707
Other real estate owned - net 706
Goodwill 8,837 8,837
Intangible assets 929
Investment in unconsolidated investees 526 526
Other assets 16,543 16,352
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TOTAL ASSETS $ 749,526 $ 652,215
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LIABILITIES AND EQUITY
Deposits
Non-interest bearing $ 90,472 $ 80,342
Interest bearing 503,620 463,311
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Total Deposits 594,092 543,653
Funds borrowed 86,292 41,305
Payable to Westbank Capital Trust I 17,526
Payable to Westbank Capital Trust II 8,763
Payable to Westbank Capital Trust III 8,763
Other liabilities 4,994 5,027
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Total Liabilities 702,904 607,511
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Stockholders' Equity
Common stock 9,493 9,047
Unearned compensation -
restricted stock award (1,708)
Additional paid in capital 20,426 14,483
Retained earnings 19,486 21,626
Treasury stock (1,001) (1,990)
Accumulated other comprehensive
income (loss) (74) 1,538
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Total Stockholders' Equity 46,622 44,704
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 749,526 $ 652,215
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CONDENSED CONSOLIDATED STATEMENTS OF INCOME
Westbank Corporation and Subsidiaries
September 30, (Unaudited)
(Dollar amounts in thousands, Quarter Ended Nine Months Ended
except per share data) 2004 2003 (1) 2004 2003 (1)
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Income:
Interest and fees on loans $ 6,140 $ 6,962 $ 18,448 $ 21,876
Interest on securities 3,227 1,454 9,331 4,721
Interest on federal funds sold 8 48 17 164
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Total interest income 9,375 8,464 27,796 26,761
Interest expense 3,693 3,293 10,850 10,725
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Net interest income 5,682 5,171 16,946 16,036
Provision for (Recovery of) loan losses 150 (354) 150 (354)
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Net interest income after provision 5,532 5,525 16,796 16,390
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Gain/(loss) on sale of securities
available for sale (303) 301 (76) 564
Gain on sale of loans 14 171 441 417
Other non-interest income 778 824 2,335 2,302
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Total non-interest income 489 1,296 2,700 3,283
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Operating Expenses:
Salaries and benefits 2,644 2,502 7,807 7,315
Other operating expenses 2,426 1,663 5,506 4,431
Occupancy - net 387 379 1,233 1,189
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Total operating expenses 5,457 4,544 14,546 12,935
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Income before income taxes 564 2,277 4,950 6,738
Income taxes 112 856 1,468 2,309
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Net Income $ 452 $ 1,421 $ 3,482 $ 4,429
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Earnings per share
- Basic $ 0.10 $ 0.31 $ 0.76 $ 0.97
- Diluted $ 0.09 $ 0.29 $ 0.72 $ 0.93
Weighted average shares outstanding
- Basic 4,694,391 4,604,265 4,572,912 4,588,988
- Diluted 4,958,002 4,848,606 4,834,356 4,777,570
(1) Share amounts and earnings per share are adjusted for the 5% stock dividend
and distribution in May 2004.
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