EX-99.1 2 exh99-1_13253.txt PRESS RELEASE DATED FEBRUARY 4, 2005 EXHIBIT 99.1 ------------ FOR IMMEDIATE RELEASE -------------------------------------------------------------------------------- February 4, 2005 FOR MORE INFORMATION, CONTACT: -------------------------------------------------------------------------------- John M. Lilly, Treasurer and Chief Financial Officer (413) 747-1465 Nasdaq Symbol - WBKC WESTBANK CORPORATION REPORTS FOURTH QUARTER EARNINGS West Springfield, MA -- Westbank Corporation (Nasdaq: WBKC) today reported net income of $1,129,000 or $.23 per diluted share for the quarter ended December 31, 2004, versus the same quarter of 2003 when earnings totaled $1,625,000 or $.33 per diluted share. For the year ended December 31, 2004, net income totaled $4,611,000 or $.95 per diluted share compared to $6,054,000 or $1.26 per diluted share for the year ended December 31, 2003. Earnings for the fourth quarter of 2004 included a provision for loan losses of $75,000 versus no provision for the same quarter of 2003. During the most recent quarter, the Corporation recorded a net loss on the sale of securities and loans totaling $8,000 versus a net gain of $490,000 during the fourth quarter of 2003. As previously reported during the third quarter, the Corporation's 2004 results included the refinancing of the Corporation's Trust Preferred Securities, which required a write-down of $807,000, and a write-down of equity securities deemed to be other than temporarily impaired in the amount of $628,000. Net interest income for the quarter and year ended December 31, 2004 totaled $5,589,000 and $22,535,000 respectively versus $5,731,000 and $21,767,000 for the quarter and year ended December 31, 2003 respectively. The net interest margin for the year and quarter ended December 31, 2004 was 3.25% and 3.24% respectively versus 3.53% and 3.56% for the same periods of 2003. Non-interest income for the year and three months ended December 31, 2004 was $3,084,000 and $749,000 respectively, as compared to $3,065,000 and $763,000 for the same periods of 2003. Operating expenses for the year and quarter ended December 31, 2004 totaled $19,149,000 and $4,603,000 respectively compared to $17,439,000 and $4,504,000 for the same periods of 2003. Included in operating expenses for 2004 is the $807,000 write-down related to the refinancing of the Corporation's prior Trust Preferred Securities previously discussed. As of December 31, 2004, assets totaled $756.4 million compared to $725.4 million at December 31, 2003, an increase of $31 million. Investments totaled $274.3 million versus $242.1 million, an increase of $32.2 million or 13% over year-end 2003. At year-end 2004, loans totaled $439.4 million compared to $440.8 million at December 31, 2003. During the twelve-month period ended December 31, 2004, the Corporation sold $23.6 million of residential real estate loans in the secondary market. At December 31, 2004, deposits had grown to $590 million versus $537.3 million one year ago, an increase of $52.7 million or 10%. WESTBANK CORPORATION For immediate release: February 4, 2005 Nasdaq Symbol - WBKC Donald R. Chase, President and CEO, said, "During the past year, commercial, commercial mortgage and commercial leasing activity grew by more than $20 million, or 11%, versus year-end 2003." According to Chase, "We believe the increased commercial lending activity, along with the refinancing of our Trust Preferred Securities, will be the impetus needed to begin 2005 on a positive note." "The refinancing of the Trust Preferred Securities is expected to save the Corporation $787,000 annually, based on the initial interest rates," Chase said. As of December 31, 2004, the allowance for loan losses totaled $4,356,000, representing .99% of the loans, while non-performing loans totaled $2,135,000, and the Corporation held one property as other real estate owned totaling $630,000. At December 31, 2004, non-performing assets represented 0.37% of total assets. Stockholders' equity at December 31, 2004 totaled $47,462,000 compared to $45,275,000 at December 31, 2003, representing a book value of $10.06 and a tangible book value of $8.19. The results of the year ended December 31, 2004 represented a return on average assets of .62% and a return on average equity of 9.82%. 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 included in this discussion and in future filings by Westbank Corporation with the Securities and Exchange Commission, in Westbank Corporation press releases and in oral statements made with the approval of an authorized executive officer, which are not historical or current facts, are "forward-looking statements" made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements are subject to certain risks and uncertainties that could cause actual results to differ materially from historical earnings and those presently anticipated or projected. Westbank Corporation wishes to caution readers not to place undue reliance on such forward-looking statements that speak only as of the date made. The following important factors, among others, in some cases have affected, and could affect in the future, Westbank Corporation's actual results and could cause Westbank Corporation's actual financial performance to differ materially from that expressed in any forward-looking statement: (1) competitive pressures among depository and other financial institutions may increase significantly; (2) revenues may be lower than expected; (3) changes in the interest rate environment may reduce interest margins; (4) general economic conditions, either national or regional, may be less favorable than expected, resulting in, among other things, a deterioration in credit quality and/or a reduced demand for credit; (5) legislative or regulatory changes, including changes in accounting standards, may adversely affect the business in which the Corporation is engaged; (6) competitors may have greater financial resources and may have developed products that enable such competitors to compete more successfully than the Corporation; and (7) adverse changes may occur in the securities markets or with respect to inflation. The foregoing list should not be construed as exhaustive and Westbank Corporation disclaims any obligation to subsequently revise 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. CONDENSED CONSOLIDATED BALANCE SHEETS Westbank Corporation and Subsidiaries December 31 (Unaudited) (Dollar amounts in thousands) 2004 2003 -------------------------------------------------------------------------------- ASSETS Cash and due from banks Non-interest bearing $ 12,451 $ 14,599 Interest bearing 34 40 Federal funds sold 669 39 Securities held to maturity 112,424 250 Securities available for sale 161,855 241,812 Loans $ 439,369 $ 440,767 Less allowance for loan loss 4,356 4,428 -------------------------------------------------------------------------------- Net Loans 435,013 436,339 Bank premises and equipment 6,885 6,749 Other real estate owned - net 630 Intangible assets 8,837 8,837 Other assets 17,643 16,777 -------------------------------------------------------------------------------- TOTAL ASSETS $ 756,441 $ 725,442 ================================================================================ LIABILITIES AND EQUITY Deposits Non-interest bearing $ 84,758 $ 76,871 Interest bearing 505,274 460,439 -------------------------------------------------------------------------------- Total Deposits 590,032 537,310 Funds borrowed 97,354 122,204 Other liabilities 4,067 3,127 Mandatorily redeemable preferred stock 17,526 17,526 -------------------------------------------------------------------------------- Total Liabilities 708,979 680,167 -------------------------------------------------------------------------------- Stockholders' Equity Common stock 9,493 9,047 Unearned compensation - restricted stock award (1,652) Additional paid in capital 20,377 14,524 Retained earnings 19,958 22,724 Treasury stock (606) (1,692) Accumulated other comprehensive (loss) income (108) 672 -------------------------------------------------------------------------------- Total Stockholders' Equity 47,462 45,275 -------------------------------------------------------------------------------- TOTAL LIABILITIES AND EQUITY $ 756,441 $ 725,442 ================================================================================ CONDENSED CONSOLIDATED STATEMENTS OF INCOME Westbank Corporation and Subsidiaries December 31 (Unaudited) (Dollar amounts in thousands, except per share data)
Quarter Ended Year Ended 2004 2003(1) 2004 2003(1) --------------------------------------------------------------------------------------------------------- Income: Interest and fees on loans $ 6,231 $ 6,653 $ 24,679 $ 28,529 Interest on federal funds sold 84 5 101 169 Interest on securities 2,698 2,433 12,029 7,154 --------------------------------------------------------------------------------------------------------- 9,013 9,091 36,809 35,852 Interest expense 3,424 3,360 14,274 14,085 --------------------------------------------------------------------------------------------------------- Net interest income 5,589 5,731 22,535 21,767 Provision for (recovery of) loan losses 75 225 (354) --------------------------------------------------------------------------------------------------------- Net interest income after provision 5,514 5,731 22,310 22,121 --------------------------------------------------------------------------------------------------------- (Loss)/gain on securities (45) 574 (121) 1,138 Gain/(loss) on sale of loans 37 (84) 478 333 Other non-interest income 749 763 3,084 3,065 --------------------------------------------------------------------------------------------------------- Total non-interest income 741 1,253 3,441 4,536 --------------------------------------------------------------------------------------------------------- Operating Expenses: Salaries and benefits 2,586 2,426 10,393 9,741 Other operating expenses 1,680 1,676 7,186 6,107 Occupancy - net 337 402 1,570 1,591 --------------------------------------------------------------------------------------------------------- Total operating expenses 4,603 4,504 19,149 17,439 --------------------------------------------------------------------------------------------------------- Income before income taxes 1,652 2,480 6,602 9,218 Income taxes 523 855 1,991 3,164 --------------------------------------------------------------------------------------------------------- Net Income $ 1,129 $ 1,625 $ 4,611 $ 6,054 --------------------------------------------------------------------------------------------------------- Earnings per share - Basic $ 0.24 $ 0.35 $ 1.00 $ 1.32 - Diluted $ 0.23 $ 0.33 $ 0.95 $ 1.26 Weighted average shares outstanding - Basic 4,704,917 4,624,461 4,606,094 4,597,930 - Diluted 4,951,172 4,875,749 4,863,741 4,798,656
(1) Share amounts and earnings per share are adjusted for the 5% stock dividend declared and distributed in May 2004.