EXHIBIT 99.1
FOR IMMEDIATE RELEASE
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July 28, 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 SECOND QUARTER EARNINGS AND PREPARES FOR MERGER
WITH NEWALLIANCE BANCSHARES
West Springfield, MA -- Westbank Corporation (Nasdaq: WBKC) today reported net
income of $581,000 for the quarter ended June 30, 2006, representing $.12 per
share (diluted) versus $1,248,000 or $.25 per share (diluted) for the quarter
ended June 30, 2005. For the six-month period ended June 30, 2006, net income
totaled $1,490,000 or $.31 per share (diluted) compared to $2,659,000 or $.54
per share (diluted) for the six months ended June 30, 2005. The results of the
quarter and year-to-date periods were largely impacted by net interest margin
compression, as well as higher operating expenses.
For the quarter and six-month period ended June 30, 2006, net interest income
was $5,021,000 and $10,424,000 respectively compared to $5,763,000 and
$11,460,000 for the same periods during 2005. The net interest margin was 2.60%
and 2.72% for the three- and six-month periods ended June 30, 2006 respectively.
The allowance for loan losses was $4,123,000 or .92% of total loans at June 30,
2006 as compared to $4,199,000 or .97% of total loans at December 30, 2005.
Non-performing loans totaled $2,016,000 or .45% of total loans and the
Corporation held other real estate owned totaling $608,000 at June 30, 2006.
Non-interest income was $900,000 for the quarter ended June 30, 2006 versus
$902,000 for the quarter ended June 30, 2005. Included in the quarter ended June
30, 2005 were gains on the sale of loans totaling $149,000.
Non-interest expense for the three-months ended June 30, 2006 totaled $5,105,000
compared to $4,820,000 for the same period of 2005. Included in non-interest
expense for the quarter ended June 30, 2006 was approximately $115,000 in
employment-related fees and strategic business planning costs.
During the quarter, the Federal Home Loan Bank of Boston (the "FHLB") changed
its policy for dividend declarations such that the dividend based on net income
for the second quarter of 2006 is not expected to be declared until the third
quarter of 2006. In the first quarter of 2006, the Corporation recognized
dividend income of approximately $92,000 from the FHLB.
As of June 30, 2006, securities totaled $318 million as compared to $323 million
at December 31, 2005, while net loans grew to $445 million from $428 million at
December 31, 2005. Deposits totaled $606 million at June 30, 2006 as compared to
$599 million at December 31, 2005 and assets totaled $822 million at June 30,
2006 versus $809 million at December 31, 2005.
On July 18, 2006, Westbank Corporation and NewAlliance Bancshares announced
their intent to enter into a definitive agreement through which NewAlliance
Bancshares will acquire Westbank Corporation for approximately $116 million in
cash and stock. The acquisition is expected to close early in the first quarter
of 2007 and is subject to Westbank shareholder approval, as well as approval of
banking regulators.
President and Chief Executive Officer Donald R. Chase said, "We are looking
forward to working with NewAlliance in planning and implementing what we expect
to be a very smooth and successful transition leading up to the merger. In
selecting NewAlliance, we believe we have selected the best possible partner in
terms of our shareholders, customers and employees."
Westbank Corporation is the holding company for Westbank of West Springfield,
Massachusetts, a commercial bank and trust company operating 17 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 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.
This press release does not constitute an offer of securities. NewAlliance
Bancshares and Westbank Corporation will file a registration statement, a proxy
statement/prospectus and other relevant documents concerning the proposed
transaction with the Securities and Exchange Commission ("SEC"). Shareholders of
Westbank Corporation are urged to read the registration statement, the proxy
statement/prospectus and all other documents which will be filed with SEC, and
any amendments or supplements to those documents, because they will contain
important information which you should consider before making any decision
regarding the merger. You will be able to obtain a free copy of the proxy
statement/prospectus, as well as other filings containing information about
NewAlliance Bancshares and Westbank Corporation, at the SEC's Web site
(http://www.sec.gov) and at their respective Web sites, www.newalliancebank.com
and www.westbankonline.com.
Copies of the proxy statement/prospectus can be obtained without charge, when
available, by directing a request to NewAlliance Bancshares, Inc., 195 Church
Street, New Haven, Connecticut 06510, or to Westbank Corporation, 225 Park
Avenue, West Springfield, Massachusetts 01089-3326.
Westbank Corporation and its directors and executive officers may be deemed to
be participants in the solicitation of proxies from the shareholders of Westbank
Corporation in connection with the merger. Information about the directors and
executive officers of Westbank Corporation and their ownership of Westbank
Corporation common stock is set forth in its proxy statement for its 2006 Annual
Meeting of Shareholders, dated March 15, 2006, filed with the SEC which is
available at the Westbank Corporation and SEC Web sites noted above. Additional
information regarding the interests of such participants may be obtained by
reading the proxy statement/prospectus when it becomes available.
CONDENSED CONSOLIDATED BALANCE SHEETS
Westbank Corporation and Subsidiaries
JUNE 30, DECEMBER 31,
(In thousands) 2006 2005
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(Unaudited)
ASSETS
Cash and due from banks
Non-interest bearing $ 12,493 $ 13,899
Interest bearing cash and cash equivalents 407 10
Federal funds sold 189 24
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Total cash and cash equivalents 13,089 13,933
Securities held to maturity 151,831 151,358
Securities available for sale 165,741 172,073
Loans $ 448,689 $ 432,459
Less allowance for loan losses 4,123 4,199
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Net loans 444,566 428,260
Investment in Federal Home Loan Bank stock 7,682 6,450
Bank premises and equipment 8,348 7,577
Other real estate owned - net 608 630
Goodwill 8,837 8,837
Bank-owned life insurance 9,324 9,149
Other intangible assets 1,792 1,792
Investment in unconsolidated investees 526 526
Other assets 9,752 8,122
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Total Assets $ 822,096 $ 808,707
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LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits
Non-interest bearing $ 76,762 $ 84,300
Interest bearing 529,568 515,059
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Total deposits 606,330 599,359
Funds borrowed 144,836 138,454
Junior subordinated debentures 17,526 17,526
Other liabilities 7,051 5,990
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Total Liabilities 775,743 761,329
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Stockholders' equity
Common stock 9,699 9,560
Unearned compensation -
restricted stock - (1,424)
Additional paid in capital 18,308 19,105
Retained earnings 22,576 22,417
Treasury stock (431) (420)
Accumulated other comprehensive loss (3,799) (1,860)
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Total stockholders' equity 46,353 47,378
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Total Liabilities and Stockholders' Equity $ 822,096 $ 808,707
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CONDENSED CONSOLIDATED STATEMENTS OF INCOME
Westbank Corporation and Subsidiaries
Quarter Ended June 30, Six Months Ended June 30,
(Dollar amounts in thousands, -------------------------------------------------------------------
except per share data) 2006 2005 2006 2005
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(Unaudited)
Interest Income:
Interest and fees on loans $ 7,053 $ 6,541 $ 13,696 $ 12,787
Interest on securities 3,804 3,083 7,662 6,230
Interest from interest-bearing cash
equivalents and federal funds sold 9 2 16 5
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Total interest income 10,866 9,626 21,374 19,022
Interest expense 5,845 3,863 10,950 7,562
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Net interest income 5,021 5,763 10,424 11,460
Provision for loan losses - - - 140
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Net interest income after
provision for loan losses 5,021 5,763 10,424 11,320
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Gain on sale of securities
available for sale - - - 96
(Loss) gain on sale of loans (3) 149 16 165
Other non-interest income 903 753 1,797 1,858
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Total non-interest income 900 902 1,813 2,119
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Non-interest expense:
Salaries and benefits 2,849 2,820 5,725 5,517
Occupancy - net 376 319 745 731
Other non-interest expense 1,880 1,681 3,628 3,494
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Total non-interest expense 5,105 4,820 10,098 9,742
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Income before income taxes 816 1,845 2,139 3,697
Income taxes 235 597 649 1,038
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Net Income $ 581 $ 1,248 $ 1,490 $ 2,659
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Earnings per share
- Basic $ 0.12 $ 0.26 $ 0.32 $ 0.56
- Diluted $ 0.12 $ 0.25 $ 0.31 $ 0.54
Weighted average shares outstanding
- Basic 4,690,360 4,730,604 4,683,379 4,729,354
- Diluted 4,869,183 4,909,831 4,853,740 4,924,666