EXHIBIT 99.1
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FOR IMMEDIATE RELEASE
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January 31, 2006
FOR MORE INFORMATION, CONTACT:
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John M. Lilly, Treasurer and Chief Financial Officer (413) 747-1465
Nasdaq Symbol - WBKC
WESTBANK CORPORATION REPORTS 11% EARNINGS INCREASE
FOR THE QUARTER AND YEAR ENDED DECEMBER 31, 2005
West Springfield, MA -- Westbank Corporation (Nasdaq: WBKC) today reported net
income for the fourth quarter ended December 31, 2005 increased by $119,000 or
11% versus the fourth quarter ended December 31, 2004. For the fourth quarter of
2005, net income totaled $1,248,000 or $.26 per share (diluted) versus net
income of $1,129,000 or $.23 per share (diluted) for the fourth quarter ended
December 31, 2004.
For the year ended December 31, 2005, earnings increased by $494,000, also
representing an 11% increase over the year ended December 31, 2004. For the year
ended December 31, 2005, net income totaled $5,105,000 or $1.05 per share
(diluted) versus $4,611,000 or $.95 per share (diluted) for the year ended
December 31, 2004.
Net interest income for the quarter and year ended December 31, 2005 totaled
$5,621,000 and $22,664,000 respectively versus $5,589,000 and $22,535,000 for
the quarter and year ended December 31, 2004 respectively. The net interest
margin for the year and quarter ended December 31, 2005 was 3.15% and 3.03%
respectively versus 3.25% and 3.24% for the same periods of 2004.
During the quarter and year ended December 31, 2005, the Corporation's provision
for loan losses was $-0- and $140,000 respectively, compared to $75,000 and
$225,000 for the quarter and year ended December 31, 2004.
The allowance for loan losses totaled $4,199,000 or 0.97% of total loans at
December 31, 2005 as compared to $4,356,000 or 0.99% of total loans at December
31, 2004. Non-performing loans totaled $2,216,000 or 0.51% of total loans and
the Corporation held other real estate owned totaling $630,000 at December 31,
2005.
Non-interest income for the quarter and year ended December 31, 2005 was
$889,000 and $4,010,000 respectively, as compared to $741,000 and $3,441,000 for
the same periods of 2004.
Included in non-interest income for the year ended December 31, 2005 was $96,000
from gains on sale of securities and $419,000 representing gains on sale of
loans. This compares to the year ended December 31, 2004, when gains on sale of
securities and loans totaled $507,000 and $478,000 respectively. The Corporation
also recorded a write-down of $628,000 on securities deemed other than
temporarily impaired during the year ended December 31, 2004.
Non-interest expense for the quarter and year ended December 31, 2005 totaled
$4,674,000 and $19,254,000 respectively compared to $4,603,000 and $19,149,000
for the same periods of 2004. Included in non-interest expense for 2004 is an
$807,000 write-down of origination costs related to the refinancing of the
Corporation's Trust Preferred Securities.
As of December 31, 2005, investment securities totaled $323,431,000, an increase
of 21% or $55,602,000 compared to December 31, 2004. During the same period,
deposits grew by 2% or $9,327,000 and totaled $599,359,000 at December 31, 2005.
Total assets increased to $808,707,000, representing growth of 7% or
$52,266,000.
At December 31, 2005, gross loans totaled $432,459,000, a decline of 2% or
$6,910,000. The decline is the result of the sale of approximately $47,400,000
in fixed-rate residential real estate loans during the year. The Corporation
completed this restructuring strategy in anticipation of higher interest rates.
Donald R. Chase, President and Chief Executive Officer, said, "We were
encouraged with our commercial real estate growth this past year, which
increased by approximately $17,900,000 or 15% over year-end 2004."
Stockholders' equity at December 31, 2005 was $47,378,000, representing a book
value of $9.97 per share. For the year ended December 31, 2005, the return on
average assets was 0.67%, while the return on average equity was 10.78%.
"The newly-formed Westco Financial Services Division continues to grow at a
steady pace and our Financial Services representatives now have approximately $8
million under management," according to Chase. The Financial Services Division
became active during June 2005.
Chase also said, "We anticipate announcing a new relationship account within the
next 30 days." The new account will reward customers with multiple account
relationships with better rate structures, as well as reduced fees and free
services for many of our banking products. Chase continued, "This should blend
well with our Overdraft Privilege product that was just introduced during
November."
Westbank Corporation is the parent company of Westbank, a West Springfield,
Massachusetts, commercial bank and trust company operating 17 banking offices in
Massachusetts and Connecticut, with $808 million of total assets at December 31,
2005.
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 that
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
(In thousands) DECEMBER 31, 2005 DECEMBER 31, 2004
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(Unaudited)
ASSETS
Cash and due from banks
Non-interest bearing $ 13,899 $ 12,451
Interest bearing 10 34
Federal funds sold 24 669
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Total cash and cash equivalents 13,933 13,154
Securities held to maturity 151,358 112,424
Securities available for sale 172,073 155,405
Loans $ 432,459 $ 439,369
Less allowance for loan losses 4,199 4,356
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Net loans 428,260 435,013
Investment in Federal Home Loan Bank stock 6,450 6,450
Bank premises and equipment 7,577 6,885
Other real estate owned - net 630 630
Goodwill 8,837 8,837
Bank-owned life insurance 9,149 9,204
Other intangible assets 1,792 862
Investment in unconsolidated investees 526 526
Other assets 8,122 7,051
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Total Assets $ 808,707 $ 756,441
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LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits
Non-interest bearing $ 84,300 $ 84,758
Interest bearing 515,059 505,274
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Total deposits 599,359 590,032
Funds borrowed 138,454 97,354
Junior subordinated debentures 17,526 17,526
Other liabilities 5,990 4,067
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Total Liabilities 761,329 708,979
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Stockholders' equity
Common stock 9,560 9,493
Unearned compensation -
restricted stock (1,424) (1,652)
Additional paid in capital 19,105 20,377
Retained earnings 22,417 19,958
Treasury stock (420) (606)
Accumulated other comprehensive income (1,860) (108)
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Total stockholders' equity 47,378 47,462
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Total Liabilities and Stockholders' Equity $ 808,707 $ 756,441
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CONDENSED CONSOLIDATED STATEMENTS OF INCOME
Westbank Corporation and Subsidiaries
Quarter Ended December 31, Year Ended December 31,
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(Dollar amounts in thousands, except per share data) 2005 2004 2005 2004
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(Unaudited)
Income:
Interest and fees on loans $ 6,612 $ 6,231 $ 25,927 $ 24,679
Interest on securities 3,620 2,698 12,952 12,029
Interest on federal funds sold 4 84 11 101
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Total interest income 10,236 9,013 38,890 36,809
Interest expense 4,615 3,424 16,226 14,274
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Net interest income 5,621 5,589 22,664 22,535
Provision for loan losses - 75 140 225
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Net interest income after
provision for loan losses 5,621 5,514 22,524 22,310
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Gain on sale of securities
available for sale - - 96 507
Other-than-temporary impairment
of investment securities - (45) - (628)
Gain on sale of loans 4 37 419 478
Other non-interest income 885 749 3,495 3,084
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Total non-interest income 889 741 4,010 3,441
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Non-interest Expense:
Salaries and benefits 2,655 2,586 10,908 10,393
Occupancy - net 445 337 1,769 1,570
Other non-interest expense 1,574 1,680 6,577 7,186
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Total non-interest expense 4,674 4,603 19,254 19,149
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Income before income taxes 1,836 1,652 7,280 6,602
Income taxes 588 523 2,175 1,991
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Net Income $ 1,248 $ 1,129 $ 5,105 $ 4,611
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Earnings per share
Basic $ 0.27 $ 0.24 $ 1.08 $ 1.00
Diluted $ 0.26 $ 0.23 $ 1.05 $ 0.95
Weighted average shares outstanding
Basic 4,682,281 4,704,917 4,708,589 4,606,094
Diluted 4,815,687 4,942,219 4,883,724 4,859,071