Transition • Values Success
NASDAQ Global Select Market Investor Update –Sterne Agee Conference
RCKB February 13, 2012
Forward Looking Statements
This Presentation contains forward-looking statements that are within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are based upon the current beliefs and expectations of our management and are subject to significant risks and uncertainties. These risks and uncertainties could cause our results to differ materially from those set forth in such forward-looking statements. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. Words such as “believes,” “anticipates,” “expects,” “intends,” “plans,” “estimates,” “targeted” and similar expressions, and future or conditional verbs, such as “will,” “would,” “should,” “could” or “may” are intended to identify forward-looking statements but are not the only means to identify these statements. Forward-looking statements involve risks and uncertainties. Actual conditions, events or results may differ materially from those contemplated by a forward-looking statement. Factors that could cause this difference — many of which are beyond our control — include without limitation the following: Any forward-looking statements made by or on behalf of us in this Presentation speak only as of the date of this Presentation. We do not undertake to update forward-looking statements to reflect the impact of circumstances or events that arise after the date the forward-looking statement was made. The reader should; however, consult any further disclosures of a forward-looking nature we may make in future filings.
With regard to presentations related to recently converted second step conversions, the peer companies include: PBNY, BRKL, OCFC, ESBF, UBNK, WFD, ESSA, BFED, NHTB, HIFS, HARL, and THRD. The data presented in this presentation relating to the peer companies is based on the calendar year. Data for peers is sourced from SNL Financial LLC.
Table of Contents
Page
Why Rockville Financial 5
Infrastructure Investment 6
Recent Strategic Initiatives 10
Strategic Priorities 11
Financial Performance 14
Loans 18
Deposits 23
Asset Quality 29
Institutional Ownership 31
Appendix—Peer Analysis 33
Corporate Contacts
William H. W. Crawford, IV
President & Chief Executive Officer
Marino J. Santarelli
Executive Vice President, Chief Operating Officer
Scott C. Bechtle
Executive Vice President, Chief Risk Officer
John T. Lund
Executive Vice President, Chief Financial Officer & Treasurer
Mark A. Kucia
Executive Vice President, Commercial Banking Executive
Investor Information: Marliese L. Shaw
Vice President, Investor Relations Officer 860-291-3622 or mshaw@rockvillebank.com
Why Rockville Financial
Commercial loan growth 18.0% 3-year CAGR
Demand deposit growth 16.6% 3-year CAGR
Low cost core deposit growth 13.7% 3-year CAGR
Assets increased $72 million YTD 2011, growth was diminished by $122 million pay down of FHLB advances Q2 2011
Residential mortgage $13 million decline YTD 2011 due to intentional sales of long duration, low coupon mortgages to the secondary market for interest sensitivity purposes. Transitioning this product line to a fee based income business.
Year over year 13.4% revenue growth in Q3 2011
Strong asset quality –NCOs/average assets 0.07% YTD 2011
Strong credit review program—Third party review of commercial loan portfolio and new originations four times a year, in addition to new origination review by CRO and EVP/Commercial Banking.
Stock buybacks will become available as an option at the end of Q1 2012
Infrastructure Investment
Preparing for Prudent Growth Opportunities
As the Company prepares to prudently leverage capital and accelerate growth, while also positioning for the evolving regulatory environment, staff additions have been implemented in the areas of Risk Management, Compliance, Information Technology, Commercial Banking, Cash Management, Retail Banking and Treasury. Rockville Financial, Inc. additionally announced in July that Marino Santarelli joined the Company as its Chief Operating Officer. All of these staff additions were achieved without the assistance of an executive recruitment firm.
Infrastructure Investment
Recruited Experienced Management Team
Years in
Name Title Industry Prior Experience
William H. W. President and Chief Executive 23 Wells Fargo Bank, Wachovia Bank
Crawford, IV Officer and SouthTrust Bank
Marino J. Santarelli Executive Vice President, Chief 38 Wells Fargo Bank, Wachovia Bank
Operating Officer and United Penn Bank
Scott C. Bechtle Executive Vice President, Chief 29 Florida Shores Bank, SouthTrust
Risk Officer Bank and Bank of America (fka
Barnett Banks)
John T. Lund Executive Vice President, Chief 18 FDIC Examiner, Capital Markets
Financial Officer Specialist
Mark A. Kucia Executive Vice President, 24 Liberty Bank, Mechanics Bank,
Commercial Banking BayBank, National Westminster PLC
Steve Koniecki Senior Vice President, 30 Space Coast Credit Union, West
Information Technology and Bank
Operations Officer
Tammy Howe Vice President, Operations 10 Chicopee Savings Bank, West Bank
Officer
Eric Newell Vice President, Treasury 8 Alliance Bernstein, Fitch Ratings, and
Officer FDIC. CFA designation
Gina Esposito Vice President, Branch 27 NewAlliance Bank
Administration Officer
Infrastructure Investment
Risk Management
The Company strengthened Risk Management with the following new positions:
Name Title Years in Prior Experience
Industry
Jay Peters Vice President, BSA/AML, 36 NewAlliance Bank, Webster Bank,
Red Flags Officer Bank of Southern Connecticut, Dime
Savings Bank
Beth Donna Vice President, Internal 17 NewAlliance Bank, Dime Savings
Audit Manager, Enterprise Bank
Risk Management
Christine Keeney Vice President, Information 20 NewAlliance Bank, Savings Bank of
Security Officer Manchester
Deborah Gabinelle Vice President, Senior 25 Webster Bank, Fleet Bank, Federal
Credit Risk Officer Reserve Bank of New York
Nathan Kelley Vice President, Credit Risk 9 NewAlliance Bank, FirstFed America
Officer Bankcorp
Infrastructure Investment
Commercial Banking Expansion
Name Title Years in Prior Experience
Industry
Stephen Villecco Senior Vice President, Regional 23 Headed up NewAlliance Bank’s $0.
Commercial Banking Officer Commercial and Industrial department since
1998
Thomas Reid Senior Vice President, 36 Headed up NewAlliance Bank’s $1.
Commercial Banking Officer Commercial Real Estate department since
2003
Matt Proto Vice President, Senior 15 Bank of Southern Connecticut and
Commercial Banking Officer NewAlliance Bank
Raymond Kostka Vice President, Commercial 32 NewAlliance Bank
Banking Officer
Robert Landfear Vice President, Commercial 17 NewAlliance Bank
Banking Officer
Michael Kelleher Vice President, Commercial 34 NewAlliance Bank
Banking Officer
Joseph Tartaglia Vice President, Senior Cash 20 First Vice President, Cash Management
Management Officer Sales Manager NewAlliance Bank
Kristine Carlson-Koehler Assistant Vice President, Cash 24 NewAlliance Bank, Tolland Bank
Management Officer
Recent Strategic Initiatives
Positioning the Company for prudent future growth
• Recruited Chief Operating Officer and Chief Risk Officer
• Significantly enhanced risk management, IT/Operations, finance and retail delivery departments as the Company prepares to leverage capital
• Recruited New Alliance Bank’s heads of C&I Estate lending and Cash Management/Treasury services along with five Commercial relationship managers commercial banking staff.
• Received regulatory approval and opened New Haven County Commercial Banking Office.
• Balance sheet restructure: Liquidated $14.5 million (materially all) available for sale equity securities in June, realizing a pre-tax gain of $6.2 million and removing significant risk of market volatility from the balance sheet. Extinguished $122.2 million of FHLB debt in June with a 4.17% weighted average cost, eliminating approximately $5.4 million in annualized pre-tax interest expense. After the restructure, the Company had $51 million of remaining FHLB debt maturing in Q3 and Q4 2011 with a 3.75% weighted average cost .
• Retail organization focused on growing core deposits and reducing cost of funds
Strategic Priorities
Soundness • Complete comprehensive enterprise wide 5-year Strategic Plan
with Board of Directors in Q1 2012
• Continue managing asset/liability and liquidity risk
• Continue focus on superior customer service, risk management,
asset quality and being regulatory best practice
• Continue to become the employer of choice to obtain and retain
the best talent in Connecticut and to serve our communities
Profitability • Enterprise wide NIE efficiency exercise, lead by project team.
NIE/Average Assets ratio 2.44 at 9/30/11, among the best of peers
• Review branch network efficiency, de novo branch strategy, and
retail delivery/residential mortgage model per strategic planning
• Achieve optimal balance between core deposit growth and total
funding cost by driving more commercial DDA, municipal
deposits and low cost core deposits versus higher cost CDs
• Increase Net Interest Margin
Growth • Expand market share via organic growth in Tolland, Hartford,
New London and New Haven counties
• Execute on current commercial banking opportunity created by
large in-market merger while maintaining discipline on loan
pricing and asset quality diligence
Strategic Priorities continued
Acquisitions • Management has a disciplined approach to protecting
tangible book value, enhancing franchise value and on the
effective use of excess capital. At this time, Management
believes quality organic growth, share repurchases once
conversion restriction is eliminated, and dividend strategy
are a more effective path for total shareholder return.
Capital
Management • The Company is overcapitalized with a 25.80% total risk
based capital ratio as of September 30, 2011
• Stock buybacks will become available as an option at the
end of Q1 2012 per State of Connecticut Department of
Banking mutual conversion banking regulations
• The Company has paid dividends for 22 consecutive
quarters, most recent a 15% increase to $0.075 per share
• At September 30, 2011 closing price was $9.48, tangible
book value was $11.32, price to tangible book value was
84%
• The Company is focused on effective and efficient use of
excess capital
Strategic Priorities continued
Employee
Engagement
• Expansion of the management team was accomplished without recruitment fees, except for CEO
• New management team members were added by personal
invitation from the CEO or executive management –We
know them…They know us… They
Customer
Experience
• Long term focus on superior customer service
• For the seventh consecutive Central News” (Conn.) have
received area’s this recognition “Best from Financial the readers every year since
the paper’s annual Best of 2005.
Community Leadership
• $5.0 million contribution to the Rockville Bank Foundation
in Q1 2011 in association with the conversion to a fully
public company
• The Bank and the Foundation support 343 organizations
through donations and employee volunteerism
Solid Performance Q3 2011
First Quarter of New Management and Absent of One-Time Events
Efficiency Ratio vs Peers:
63.5 63.0 63.0
62.5
(%)
62.0
Ratio 61.5 61.0
60.5
Efficiency 60.5 60.0
59.5
59.0
RCKB Peer Median
Net Interest Margin vs Peers:
3.7 3.7
3.6
(%) Margin 3.5
3.4
3.3
Interest 3.3 Net
3.2
3.1
RCKB Peer Median
Return on Average Assets vs Peers:
1.0 0.9
0.9
0.8
0.7
0.7
(%) 0.6
0.5
ROAA 0.4
0.3
0.2
0.1
0.0
RCKB Peer Median
YoY Loan Growth vs. Peers:
4.5
4.1
4.0
(%) 3.5
3.0
Growth 2.5
2.0
Loan 1.4 YoY 1.5
1.0
0.5
0.0
RCKB Peer Median
Total Assets
• Despite a difficult operating environment, we were able to grow assets at a CAGR of 7.7% through a disciplined growth strategy.
2,000,000
1,750,179 1,678,073 1,533,073 1,571,134 1,600,000 1,327,012 1,232,836 1,200,000
800,000
400,000
0
2006Y 2007Y 2008Y 2009Y 2010Y 2011Q3
Total Assets ($000)
Capital Ratios
• The Company continues to be well capitalized. At September 30, 2011, our core capital ratio was 18.60% of total adjusted tangible assets
• In addition, our Tier 1 Capital to Risk-Weighted Assets and Total Capital to Risk-Weighted Assets were 24.60% and 25.80%, respectively.
30.00%
25.80% 24.60% 25.00%
20.00% 18.60%
15.00%
10.00% 8.00% 4.00% 4.00% 5.00%
0.00%
Tier 1 Leverage Tier 1 Risk-based Total Risk-based
Rockville Financial, Inc. Requirement
Dividend History
Loan Growth
| 5 |
Year Organic Growth History, CAGR = 6.9% |
Loans Annualized Receivable, net % Change Date (in thousands) From Prior Year
9/30/11 1,445,492 3%
12/31/10 1,410,498 4% 12/31/09 1,361,019 5% 12/31/08 1,291,791 16% 12/31/07 1,116,327 8% 12/31/06 1,033,355 20%
Loan Composition
Yield on loans Q3-2011: 4.93%
12/31/2010 9/30/2011 (in thousands)
Real estate loans
Residential 719,925 706,473 Commercial 489,511 562,604 Construction 78,627 55,264
Commercial business loans 130,303 131,740
Installment and collateral loans 5,921 4,562
Total loans 1,424,287 1,460,643
Net deferred loan costs and premiums 523 376 Allowance for loan losses (14,312) (15,527) Loans, net 1,410,498 1,445,492
Loan Mix – 3 Year Comparison
Loan Portfolio RCKB % Of RCKB % Of CAGR ($mm) 9/30/2008 Total 9/30/2011 Total ‘08—‘11
Real estate loans:
Residential $ 729.0 57.8% $ 706.5 48.4% -1.0% Commercial 320.3 25.4% 562.6 38.5% 20.7% Construction 98.9 7.8% 55.3 3.8% -17.6% Commercial business loans 102.3 8.1% 131.7 9.0% 8.8% Installment and collateral loans 10.2 0.8% 4.5 0.3% -23.8%
Total Loans $ 1,260.6 100.0% $ 1,460.6 100.0% 5.0%
CRE & Commercial business loans $ 422.6 33.5% $ 694.3 47.5% 18.0%
Commercial Real Estate (Q3 2011)
Type of Commercial Real Estate Loan Geographic Region
Other South New Jersey/ New England* Land 11. Other 40% Regional CRE Pennsylvania 7.10% 2.80% 11.3% Program Regional CRE North/Central South New Jersey New England* Land 5.40% Program New Jersey / Pennsylvania 7.9% 2.2% 34.40% Multi-Family 40.0% North 7.90% / Central 3.6%
8. Multi-Family 50% New Jersey Connecticut Metropolitan 7.4% 9.3% 67.00% New York Metropolitan 1.30% New York Retail 1.0% West/Upstate 14.50% New York Retail 11.30% 15.1% West / Upstate New York Owner Occupied 18.9% Office 8.40% 11.90% Industrial Office Connecticut 10.8% 8.10% Owner Occupied 59.2% Industrial 5.7% 7.5%
(Dollars in thousands) Type of Commercial Real Estate Loan
Type of Commercial Real Estate Loan Connecticut $ 332,875 Regional CRE Program $ 224,991 West / Upstate New York 106,593 Owner Occupied 42,221 Metropolitan New York 5,684 Industrial 32,027 North / Central New Jersey 52,598 Office 60,737 South New Jersey / Pennsylvania 20,148 Retail 85,126 New England* 44,706 Multi-Family 41,507 Total Commercial Real Estate Loans $ 562,604 Land 12,193 Other 63,802 Total Commercial Real Estate Loans $ 562,604
Regional Commercial Real Estate Data
Data as of September 30, 2011
• Approximately $225 million outstanding – 32 loans
• Average loan size $7.0 million
• Average LTV: 64%
• Average debt service coverage ratio: 1.69x
• Weighted average yield: 5.42%
• All loans are paying as agreed
CRE and Commercial business loan 3 Year CAGR = 18.0%
Note: Approximately $720 million of commercial and construction loans serviced by 7 commercial bankers prior to the commercial banking team expansion in Q3 2011 ($102 million per banker)
Deposit Growth
| 5 |
Year Organic Growth History, CAGR = 8.0% |
Total Annualized Deposits % Change Date (in thousands) From Prior Year
9/30/11 1,297,563 9%
12/31/10 1,219,260 8% 12/31/09 1,129,108 8% 12/31/08 1,042,508 10% 12/31/07 951,038 8% 12/31/06 884,511 16%
Deposit Composition
Deposit Portfolio
Cost of total interest-bearing deposits Q3-2011: 1.03%, a decline of 13bps from 1.16% in 2010
Rockville Financial 9/30/11 12/31/10 Change
Demand and NOW 309,733 286,061 8% Regular savings 179,644 162,090 11% Money market savings 250,947 227,007 11% Club accounts 1,208 272 344% Time deposits 556,031 543,830 2% Total deposits 1,297,563 1,219,260 6%
Deposit Mix – 3 Year Comparison
Deposit Portfolio RCKB % Of RCKB % Of CAGR Double digit growth in all ($mm) 9/30/2008 Total 9/30/2011 Total ‘08—‘11 core deposit products
Demand and NOW $ 199.2 20.0% $ 309.7 23.9% 15.9% Regular savings & Club 123.9 12.4% 180.8 13.9% 13.4% Money market savings 179.0 18.0% 250.9 19.3% 11.9% Time deposits 493.4 49.6% 556.0 42.9% 4.1%
Total Deposits $ 995.5 100.0% $ 1,297.6 100.0% 9.2%
Reducing Cost of Funds ~ Growing Core Deposits
RCKB VS SNL Thrift Peer Weighted Average
Year over Year Deposit Growth
Strong Branch Franchise
RCKB’s 2011 2010-2011 Market Deposits Growth Position Address City ($000) Rate(%) in Town
| 1 |
Rt 83 & Pitkin St Vernon 154,240 18.38 1 |
| 2 |
341 Broad St Manchester 137,073 21.83 2 |
| 3 |
1645 Ellington Rd South Windsor 133,788 19.27 1 |
| 4 |
25 Park St Vernon Rockville 96,165 2.97 2 |
| 5 |
12 Main St Ellington 86,645 9.24 1 |
| 6 |
20 Hyde Ave Vernon 84,968 6.65 1 |
| 7 |
612 Main St Somers 75,331 6.12 1 |
| 8 |
869 Sullivan Ave South Windsor 73,523 7.37 1 |
9 231 Hazard Ave Enfield 70,074 14.32 2
10 1009 Hebron Ave Glastonbury 59,507 37.30 7
11 6 Fieldstone Cmns Tolland 55,330 34.81 2
12 1671 Boston Tpke Coventry 54,942 29.63 2
13 234 Tolland Tpke Manchester 51,894 0.37 2
14 275 Mountain Rd Suffield 46,233 13.16 3
15 902 Main St South Glastonbury 45,788 96.41 1
16 99 Linwood Ave Colchester 31,124 45.52 5
17 65 Palomba Dr Enfield 25,618 9.08 2
18 768 N Main St Manchester 24,456 28.68 2
19 660 Enfield St Enfield 22,667 46.21 2
20 39 Prospect Hill Rd East Windsor 20,003 51.78 4
21 67 Prospect Hill Rd East Windsor 17,808 19.36 4 21.5* 161 Nevers Rd South Windsor 62 1,450.00 1
| * |
Branch in High School |
Deposit Market Share
Deposit Growth Potential
Deposit Market Share Summary for Connecticut
2011 2010 Institution (ST) 2011 2011 2011 Rank Rank Number of Total Total Branches Deposits in Market Market Share $0 (%)
| 1 |
1 Bank of America Corp. (NC) 167 24,269,869 24.34 |
| 2 |
2 Webster Financial Corp. (CT) 126 11,595,963 11.63 |
| 3 |
3 People’s United Financial Inc. (CT) 167 10,109,215 10.14 |
| 4 |
4 Wells Fargo & Co. (CA) 75 8,011,347 8.04 |
| 5 |
5 Toronto-Dominion Bank 80 5,456,330 5.47 |
| 6 |
6 First Niagara Finl Group (NY) 78 4,907,602 4.92 |
| 7 |
7 JPMorgan Chase & Co. (NY) 51 4,046,297 4.06 |
| 8 |
10 Citigroup Inc. (NY) 20 2,828,454 2.84 |
9 8 Liberty Bank (CT) 43 2,708,876 2.72
10 9 RBS 51 2,474,554 2.48
11 11 Santander 32 1,762,122 1.77
12 12 Union Savings Bank (CT) 29 1,565,237 1.57
13 16 First Connecticut Bancorp (CT) 19 1,368,381 1.37
14 14 Rockville Financial Inc. (CT) 22 1,367,239 1.37
15 15 Hudson City Bancorp Inc. (NJ) 9 1,292,792 1.30
Total For Institutions In Market 1,299 99,694,414
Note: Market Share is for U.S. Territories only and non-retail branches are not included.
28
Loan Quality and Reserve Levels
Rockville Financial 9/30/11 12/31/10
Non-performing loans/total loans 0.95% 0.87% Non-performing assets/total assets 0.81% 0.80% Allowance for loan losses/total loans 1.06% 1.00% Allowance for loan losses/non-performing loans 111.43% 115.79%
Solid Asset Quality Despite Tough Environment
Compares Favorably to Peers
Loan Loss Reserves / Loans vs Peers:
1.30
1.3 1.24
(%) 1.1 1.00 1.06
0.94 0.94 0.96
Loans 0.91
0.9 /
0.93
0.7 0.83 0.84 0.86 Reserves 0.5
2006Y 2007Y 2008Y 2009Y 2010Y 2011 YTD RCKB Peer Group Median
NCOs / Avg. Loans vs Peers:
0.3 0.23
0.18 0.18 (%) 0.2
0.16
Loans 0.2 0.11 0.17
. 0.1 0.06 0.07 Avg 0.04 0.04
/ 0.1 0.05
0.00 NCOs 0.0
2006Y 2007Y RCKB 2008Y 2009YPeer Group Median 2010Y 2011 YTD
Non-Performing Loans / Total Loans vs Peers:
1.3 1.4
1.4
1.2 1.1
1.0 (%) 1.0 0.9 0.9
0.8
0.8 Loans 0.6 /
0.4 0.3 0.6
0.2
NPLs 0.2 0.1
0.0 0.1
2006Y 2007Y 2008Y 2009Y 2010Y 2011 YTD 30 RCKB Peer Group Median
Institutional Ownership
Significant increase year to date
45.00%
40.00% 42.01% 38.62% 38.64% 39.21% 40.39% 35.00% 32.61% 30.00% 28.93%28.93% 25.00%
20.00%
15.00% 11.07%11.34% 10.00%
5.00%
0.00%
03/01/11 04/01/11 05/01/11 06/01/11 07/01/11
08/01/11 09/01/11 10/01/11 11/01/11 12/01/11
Institutional Ownership
The institutions that held market stock as of September 30, 2011, and that have attributed to the substantial increase in shares institutionally held are as follows:
$ Market Q3 2011 Value Pos September 30, % Holder Name Position change 2011 Outstanding Wellington 2,870,873 54,332 27,215,876 9.73 Management BlackRock Fund 1,444,340 55,409 13,692,343 4.90 Advisors The Vanguard 1,155,332 78,591 10,952,547 3.92 Group Keeley Asset 926,600 140,400 8,784,168 3.14 Management Brandywine Global 785,102 11,552 7,442,767 2.66 Invest Sandler O’Neill 656,600 96,300 6,224,568 2.23 Asset Management Gruss Asset 593,000 0 5,621,640 2.01 Management
APPENDIX
Non-Interest Expense to Average Assets Peer Comparison
NIE / Average Assets (Quarterly)—Peers
9/30/2011 6/30/2011 3/31/2011 12/31/2010 9/30/2010
Fairfield County Bank CT 3.80 3.79 3.60 4.28 3.75 Newtown Savings Bank CT 3.45 3.20 3.23 3.46 3.14 Naugatuck Savings Bank CT 3.42 3.31 3.50 3.44 3.27 SI Financial Group, Inc (SIFI) CT 3.40 3.54 3.49 3.36 3.44 SBT Bancorp, Inc (SBIB) CT 3.13 3.32 3.42 3.36 3.52 People’s United Financial, Inc (PBCT) CT 3.10 3.23 3.24 3.35 3.30 First County Bank CT 3.08 2.93 3.01 3.03 2.89 Naugatuck Valley Financial Corp (NVSL) CT 3.06 2.68 3.00 2.67 2.56 Dime Bank CT 2.92 3.01 3.22 2.95 2.73 Union Savings Bank CT 2.88 2.92 3.03 2.69 2.86 Farmington Bank CT 2.81 3.43 3.21 3.23 2.59 United Financial Bancorp, Inc. (UBNK) MA 2.74 2.85 2.77 2.76 2.73 Liberty Bank CT 2.71 2.72 2.78 2.56 2.78 Webster Financial Corporation (WBS) CT 2.70 2.80 2.85 2.78 2.85 Rockville Financial Inc (RCKB) CT 2.44 2.53 2.37 2.64 2.46 New England Bank CT 2.43 2.62 2.74 2.42 2.63 First Niagara Financial Group (FNFG) NY 2.30 2.29 2.61 2.54 2.56
Source: SNL Financial; FDIC Call Reports
Efficiency Peer Comparison
Efficiency Ratio (Quarterly)—Peers
9/30/2011 6/30/2011 3/31/2011 12/31/2010 9/30/2010 NII %Ch QoQ First County Bank CT 89.55 85.68 85.96 82.83 83.28 1.4% SBT Bancorp, Inc (SBIB) CT 88.13 92.38 92.69 81.17 80.71 0.1% Farmington Bank CT 87.80 97.61 88.13 85.95 73.63 -1.6% SI Financial Group, Inc (SIFI) CT 87.36 88.73 90.98 82.12 85.15 -0.2% Newtown Savings Bank CT 86.50 81.94 80.83 76.16 79.10 0.0% Union Savings Bank CT 79.13 75.61 84.65 74.57 79.94 -9.1% Naugatuck Savings Bank CT 78.64 79.06 82.50 79.44 73.81 2.1% Fairfield County Bank CT 72.30 79.62 72.22 91.91 82.24 -0.5% United Financial Bancorp, Inc. (UBNK) MA 69.39 72.85 73.23 70.11 67.64 0.1% New England Bank CT 68.25 74.76 78.37 70.38 70.50 1.5% Liberty Bank CT 66.91 67.71 71.83 63.85 71.94 2.1% Naugatuck Valley Financial Corp (NVSL) CT 66.14 69.93 83.45 66.45 67.96 9.4% People’s United Financial, Inc (PBCT) CT 65.23 67.36 67.74 74.20 74.24 8.5% Webster Financial Corporation (WBS) CT 65.00 67.71 70.80 67.44 69.76 0.2% Rockville Financial Inc (RCKB) CT 60.54 76.64 72.13 68.27 60.60 11.6% First Niagara Financial Group (FNFG) NY 58.71 57.21 61.31 60.20 62.00 2.2% Dime Bank CT 55.28 77.35 80.52 74.96 69.82 0.1%
Rockville Financial is a significant outlier in terms of net interest income
35
growth from 2Q11 to 3Q11
Peer Comparison(1)
General Information: Profitability: Balance Sheet: Asset Quality: Pricing Info: Dividends: Total Adj 11/2/2011 Price / Current Oper. Oper. Eff. TCE / Capital Loans / LLR / Texas NPAs / Market Stock Tang. Div. Annual Assets ROA ROE NIM Ratio TA Ratio Deposits Loans Ratio Assets Cap Price Book Yield Div.
Institution Ticker Headquarters ($mm) (%) (%) (%) (%) (%) (%) (%) (%) (%) (%) ($mm) ($) (X) (%) ($)
Rockville Financial, Inc. RCKB Vernon Rockville, CT 1,750 0.23 1.39 3.29 87.10 19.11 25.80 112.76 1.06 3.98 0.81 295 9.98 0.88 2.61 0.26 Peer Group:
Provident New York Bancorp PBNY Montebello, NY 3,137 0.63 5.90 3.13 59.61 8.94 13.76 74.37 1.93 3.36 0.28 87 13.80 0.76 1.45 0.20 Brookline Bancorp, Inc. (2) BRKL Brookline, MA 3,115 1.00 5.94 3.72 48.96 14.66 17.88 119.91 1.19 0.00 0.00 471 7.97 1.05 4.27 0.34 Ocean First Financial Corp. OCFC Toms River, NJ 2,282 0.87 9.68 2.68 55.73 9.46 15.67 95.63 1.42 6.44 0.67 249 13.19 1.15 3.03 0.40
ESB Financial Corporation ESBF Ellwood City, PA 2,007 0.48 3.16 2.78 75.12 7.21 27.99 55.98 1.09 8.97 0.67 168 11.27 1.21 1.77 0.20 United Financial Bancorp, Inc. UBNK West Springfield, MA 1,607 0.63 9.77 2.23 64.08 13.65 12.57 93.48 0.63 1.63 0.22 56 14.84 0.98 5.12 0.76 Westfield Financial, Inc. WFD Westfield, MA 1,263 1.14 15.40 3.50 40.33 18.19 13.40 75.58 0.88 5.11 0.96 100 47.00 1.24 2.13 1.00 ESSA Bancorp, Inc. ESSA Stroudsburg, PA 1,097 0.79 8.34 3.01 73.75 14.59 13.09 117.07 1.35 1.50 0.86 67 11.60 1.13 4.48 0.52 Hingham Institution for Savings HIFS Hingham, MA 1,086 0.90 9.81 3.57 57.21 7.40 15.91 110.93 1.42 47.99 4.56 241 12.78 1.12 3.76 0.48 Beacon Federal Bancorp, Inc. BFED East Syracuse, NY 1,071 0.40 2.75 3.65 72.99 10.62 13.94 113.26 1.63 41.71 4.97 263 6.94 0.99 3.46 0.24 New Hampshire Thrift Bancshares, Inc. NHTB Newport, NH 1,041 0.46 4.25 3.71 70.61 5.85 17.61 91.10 1.86 34.85 2.30 55 19.40 0.75 1.03 0.20 Harleysville Savings Financial Corp HARL Harleysville, PA 836 0.69 4.84 3.46 71.63 6.83 16.39 99.50 0.96 18.25 1.48 252 15.93 1.15 2.26 0.36 TF Financial Corporation THRD Newtown, PA 695 0.47 2.62 2.69 74.47 10.56 17.76 93.41 1.30 4.74 0.55 195 7.07 0.27 3.39 0.24
Average: 0.71 6.87 3.18 63.71 10.66 16.33 95.02 1.31 14.55 1.46 0.98 3.01 0.41 Median: 0.66 5.92 3.30 67.34 10.01 15.79 94.56 1.32 5.78 0.77 1.08 3.21 0.35
Note: Data through YTD 9/30/11, unless otherwise noted and has been annualized where applicable. NPAs and Loan 90 Days Past Due are adjusted for covered assets Pricing data as of 11/2/11. DNBK has been removed due to merger with PBCT. Data at bank level where information was unavailable at parent level (1) Peer group companies selected by independent appraisal firm during second step conversion (2) Data as of YTD 6/30/11
Recently Converted Second Step Conversions
• Second step conversions since January 1, 2010 with gross proceeds greater than $20mm
General Information Offering Information and Pro Forma Data Price Change Since IPO (%) At Ann. Gross Tg. Eq. / Price / Last NPAs / Proceeds Point in Assets Tg. Bk. Charit. 1 Day 1 Month 3 Month Close Assets Company Name Ticker ST IPO Date ($000) Range (%) (%) Fndn? (%) (%) (%) (%) (%) Second Step Conversions
| 1 |
Naugatuck Valley Financial Corporation NVSL CT 6/30/11 33,384 Mid-Max 13.4 70.1 NO (1.3) 1.9 (1.8) (6.9) 2.18 |
| 2 |
Rockville Financial, Inc. RCKB CT 3/4/11 171,099 Supermax 17.8 92.2 YES 6.0 5.0 (5.6) (0.2) 1.07 |
| 3 |
Alliance Bancorp, Inc. of Pennsylvania ALLB PA 1/18/11 32,585 Mid-Max 17.0 66.8 NO 10.0 11.9 10.8 2.7 3.19 |
| 4 |
SI Financial Group, Inc. SIFI CT 1/13/11 52,356 Min-Mid 13.0 69.9 YES 15.9 17.5 25.0 11.1 0.97 |
| 5 |
Capitol Federal Financial, Inc. CFFN KS 12/22/10 1,181,500 Minimum 21.0 83.9 YES 16.5 16.0 14.0 9.9 0.71 |
| 6 |
Heritage Financial Group, Inc. HBOS GA 11/30/10 65,918 Min-Mid 16.3 74.3 NO 2.5 25.0 31.2 5.5 2.35 |
| 7 |
Kaiser Federal Financial Group, Inc. KFFG CA 11/19/10 63,750 Minimum 15.7 66.3 NO (0.1) (0.4) 37.2 21.3 3.54 |
| 8 |
Colonial Financial Services, Inc. COBK NJ 7/13/10 22,950 Minimum 11.0 64.7 NO 0.5 (2.6) (2.8) 22.5 1.77 |
9 Oneida Financial Corp. ONFC NY 7/7/10 31,500 Midpoint 9.3 97.8 NO (6.3) (1.3) (6.8) 12.5 0.41
10 View Point Financial Group, Inc. VPFG TX 7/7/10 198,573 Min-Mid 14.6 93.9 NO (5.0) (3.0) (7.0) 28.9 0.61
11 Fox Chase Bancorp, Inc. FXCB PA 6/29/10 87,125 Minimum 16.0 72.6 NO (4.1) (1.8) (4.0) 26.3 2.84
12 Oritani Financial Corp. ORIT NJ 6/24/10 413,632 Mid—Max 25.8 90.6 NO 3.1 (0.9) (2.5) 29.8 2.62
13 Eagle Bancorp Montana, Inc. EBMT MT 4/5/10 24,643 Mid—Max 15.7 81.1 NO 5.5 4.0 (2.8) (0.2) 0.46
Average: 15.9 78.8 3.3 5.5 6.5 12.6 1.75 Median: 15.7 74.3 2.5 1.9 -2.5 11.1 1.77
Note: Charter Financial Corp. (MHC) not included in above analysis due to unique structure as an incremental MHC offering Source: SNL Financial, pricing as of 11/2/11
Recently Converted Second Step Conversions (cont.)
General Information: Profitability: Balance Sheet: Asset Quality: Pricing Info: Dividends: Total Adj 11/2/2011 Price / Current Oper. Oper. Eff. TCE / Capital Loans / LLR / Texas NPAs / Market Stock Tang. Div. Annual Assets ROA ROE NIM Ratio TA Ratio Deposits Loans Ratio Assets Cap Price Book Yield Div.
Institution Ticker Headquarters ($mm) (%) (%) (%) (%) (%) (%) (%) (%) (%) (%) ($mm) ($) (X) (%) ($)
Rockville Financial, Inc. RCKB Vernon Rockville, CT 1,750 0.23 1.39 3.29 87.10 19.11 25.80 112.76 1.06 3.98 0.81 295 9.98 0.88 2.61 0.26 Peer Group:
Capitol Federal Financial, Inc. CFFN Topeka, KS 9,451 0.41 2.20 1.84 47.65 20.52 37.64 114.91 0.30 1.80 0.37 1,841 10.99 0.95 2.73 0.30 Northwest Bancshares, Inc. NWBI Warren, PA 7,989 0.81 5.25 3.67 58.93 12.70 22.31 94.93 1.33 0.00 0.00 1,193 12.23 1.20 3.60 0.44 ViewPoint Financial Group, Inc. VPFG Plano, TX 3,235 0.77 5.40 2.84 69.52 12.55 16.98 89.57 0.89 4.46 0.58 442 12.89 1.09 1.55 0.20 Oritani Financial Corp. ORIT Township of Wash., NJ 2,622 1.14 4.93 3.42 35.77 20.09 23.65 127.00 1.56 4.33 0.92 614 12.98 1.17 3.85 0.50 Fox Chase Bancorp, Inc. FXCB Hatboro, PA 1,031 0.46 2.41 2.98 63.42 19.14 24.28 99.13 1.90 9.78 1.99 174 12.63 0.88 0.63 0.08 Heritage Financial Group, Inc. HBOS Albany, GA 1,103 0.35 2.70 3.35 88.58 10.81 21.40 62.93 1.22 1.50 1.92 92 10.55 0.78 1.14 0.12 SI Financial Group, Inc. SIFI Willimantic, CT 945 0.23 1.70 2.97 88.95 13.38 22.62 89.66 0.84 6.39 0.89 94 8.89 0.75 1.35 0.12 Kaiser Federal Financial Group, Inc. KFFG Covina, CA 915 0.93 5.19 3.47 60.99 17.04 21.87 111.78 1.49 13.32 2.42 117 12.13 0.75 1.98 0.24
Oneida Financial Corp. ONFC Oneida, NY 678 0.81 6.15 3.42 79.39 9.43 15.32 52.28 1.07 8.16 0.78 61 9.00 0.99 5.33 0.48 Colonial Financial Services, Inc. (1) COBK Vineland, NJ 601 0.47 3.96 3.01 70.49 11.95 18.93 60.68 1.31 13.49 1.70 51 12.25 0.71 0.00 0.00 Naugatuck Valley Financial Corporation NVSL Naugatuck, CT 580 0.38 3.26 3.51 71.31 14.16 16.48 120.28 1.79 19.20 3.01 52 7.45 0.63 1.61 0.12
Alliance Bancorp, Inc. of Pennsylvania ALLB Broomall, PA 460 0.15 0.86 3.35 71.08 18.25 22.24 78.61 1.42 19.36 3.05 56 10.27 0.67 1.95 0.20
Eagle Bancorp Montana, Inc. EBMT Helena, MT 336 0.51 3.23 3.66 74.32 15.90 19.70 89.39 0.81 0.00 0.00 39 9.98 0.73 2.86 0.29
Average: 0.57 3.63 3.19 67.72 15.07 21.80 91.63 1.23 7.83 1.36 0.87 2.20 0.24 Median: 0.47 3.26 3.35 70.49 14.16 21.87 89.66 1.31 6.39 0.92 0.78 1.95 0.20
Note: Data through YTD 9/30/11, unless otherwise noted and has been annualized where applicable. NPAs and Loan 90 Days Past Due are adjusted for covered assets CFFN & NWBI have also been included due to their large 2nd step offerings relative to peers Pricing data as of 11/2/11. Data at bank level where information was unavailable at parent level
| (1) |
Data as of YTD 6/30/11 |