ROCKVILLE, Conn., Aug. 2, 2011 (GLOBE NEWSWIRE) -- Rockville Financial, Inc. (the "Company") (Nasdaq:RCKB), the holding company for Rockville Bank (the "Bank"), today announced earnings results for the period ended June 30, 2011.
SECOND QUARTER HIGHLIGHTS
- Year-over-year interest income growth of 1.7% to $18.9 million due to growth in average loan balances.
- Balance sheet restructuring during the second quarter paid down $122.2 million of Federal Home Loan Bank Advances with a weighted average cost of 4.17% and substantially liquidated the entire common and preferred stock portfolios.
- Strengthened management team across a number of lines and responsibilities to better position the Company for balance sheet growth and meet evolving regulatory requirements.
- Net income was $43,000 for the three-month period ended June 30, 2011, or $0.00 per diluted share. Without quarterly events which are described below, normalized earnings would have been $2.6 million, or $0.09 per share on a diluted basis.
- Announced our New Haven County Commercial Banking Office managed by three senior commercial banking professionals with a combined 75 years of serving business needs in New Haven County.
Net income was $43,000 for the three-month period ended June 30, 2011, or $0.00 per diluted share, compared to net income of $3.5 million, or $0.12 per diluted share, for the three-month period ended June 30, 2010. Lower net income for the second quarter 2011 included the recognition of securities gains of $6.2 million, or $4.1 million net of taxes, the Federal Home Loan Bank of Boston prepayment penalty of $8.9 million, or $5.9 million net of taxes, and the increase in salary and benefits expense related to contractual obligations of $1.2 million, or $798,000 net of taxes, whereas net income excluding these quarterly events would have been $2.6 million, or $0.09 per diluted share.
For the six-month period ended June 30, 2011, the net loss was $979,000. Net income in 2011 declined $7.3 million as compared to the year-to-date period ended June 30, 2010 due to the aforementioned balance sheet restructure, an increase in salary and benefits expense from additions to the Company's management team and a one-time contribution to the Rockville Bank Charitable Foundation, Inc. of $5.0 million, pre-tax.
NET INTEREST INCOME
Net interest income increased 4.6% to $13.8 million in the second quarter of 2011 from $13.2 million in the comparable 2010 period. The net interest margin declined 39 basis points to 3.08% in the second quarter of 2011 from the comparable period in 2010. For the first six months of 2011, net interest income increased 2.3% to $27.2 million from $26.6 million in the first half of 2010. The net interest margin declined 44 basis points to 3.09% for the first six months of 2011 from the comparable 2010 period.
PROVISION FOR LOAN LOSSES
The provision for loan losses declined $155,000 to $754,000 for the three months ended June 30, 2011 compared to $909,000 for the comparable 2010 period. For the six months ending June 30, 2011, the provision for loan losses declined $0.3 million to $1.5 million from $1.8 million for the comparable 2010 period.
NON-INTEREST INCOME
Non-interest income increased $5.5 million to $7.8 million during the second quarter of 2011 in comparison to the second quarter of 2010. The increase is attributed to realized securities gains totaling $6.2 million from the sale of common and preferred stock. Non-interest income increased $5.5 million to $9.5 million during the first half of 2011 in comparison to the first half of 2010.
NON-INTEREST EXPENSE
Non-interest expense increased $11.3 million, or 120.5%, to $20.7 million for the three months ended June 30, 2011 compared to $9.4 million for the comparable 2010 period. Non-interest expense increased $17.7 million, or 92.6%, to $36.7 million for the six months ended June 30, 2011 compared to $19.0 million for the comparable 2010 period. Of the $11.3 and $17.7 million increases respectively, 88.3% and 89.5%, is related to the quarterly events summarized above.
BALANCE SHEET
The Company's total assets increased $68.5 million, or 4.1% to $1.75 billion at June 30, 2011 from December 31, 2010. The increase is attributed to a $20.0 million increase in cash and cash equivalents, a $26.0 million increase in investment securities, and a $20.1 million increase in net loans. The growth was funded primarily with the proceeds received from additional deposits of $57.6 million. During the second quarter, the Company restructured the balance sheet by extinguishing $122.2 million of FHLB advances and selling $14.5 million of common and preferred stock securities. The debt extinguishment was funded with the net proceeds available from the Company's "second step" conversion which closed in March 2011.
ASSET QUALITY
Non-performing assets declined $0.4 million to $13.0 million at June 30, 2011 from $13.4 million at December 31, 2010. The ratio of non-performing assets to total assets declined 6 basis points to 0.74% at June 30, 2011 from 0.80% at December 31, 2010.
Loans on non-accrual increased $0.5 million to $12.9 million at June 30, 2011 from $12.4 million at December 31, 2010. Included in non-accrual loans are troubled debt restructurings. Troubled debt restructurings increased $0.6 million to $2.3 million at June 30, 2011 from $1.7 million at December 31, 2010. The ratio of non-performing loans to total loans increased 2 basis points to 0.89% at June 30, 2011 from 0.87% at December 31, 2010.
Commenting on second quarter results, William (Bill) H. W. Crawford, IV, President and Chief Executive Officer (CEO) stated, "Rockville Financial, Inc. continues to enjoy excellent asset quality and solid operating performance. I am pleased about the transition the Company is making from a mutual holding company. The Company remains committed to superior customer service, providing shareholder value and being Connecticut's Best Community Bank."
Rockville Bank is a 21½-branch community bank serving Tolland, Hartford, and New London counties in Connecticut. It provides a convenient banking lifestyle for Colchester, Coventry, East Windsor, Ellington, Enfield, Glastonbury, Manchester, Rockville, Somers, South Glastonbury, South Windsor, Suffield, Vernon, seven days a week in Tolland, and three Big Y supermarket locations. A New Haven County Commercial Banking Office will be located in Hamden, Conn. to provide an array of commercial products and services for businesses located in New Haven County and surrounding areas. For more information about Rockville Bank's services and products, call (860) 291-3600 or visit http://www.rockvillebank.com/">www.rockvillebank.com. For more information about the Company, Rockville Financial, Inc. (RCKB), visit Investor Relations at www.rockvillebank.com and click on About Us. For investor relations questions please contact John T. Lund, Executive Vice President and Chief Financial Officer at 860-291-3626 or Marliese L. Shaw, Vice President, Investor Relations Officer at 860-291-3622.
The Rockville Bank logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=8558
Note that share amounts related to periods prior to the date of completion of the conversion (March 3, 2011) have been restated to give retroactive recognition to the exchange ratio applied in the conversion (1.5167).
This press release may contain certain forward-looking statements about the Company. Forward-looking statements include statements regarding anticipated future events and can be identified by the fact that they do not relate strictly to historical or current facts. They often include words such as "believe," "expect," "anticipate," "estimate," and "intend" or future or conditional verbs such as "will," "would," "should," "could," or "may." Forward-looking statements, by their nature, are subject to risks and uncertainties. Certain factors that could cause actual results to differ materially from expected results include increased competitive pressures, changes in the interest rate environment, general economic conditions or conditions within the securities markets, and legislative and regulatory changes that could adversely affect the business in which the Company and its subsidiaries are engaged.
| Rockville Financial, Inc. and Subsidiaries | ||
| Consolidated Statements of Condition | ||
| (In Thousands, Except Share Amounts) | ||
| (Unaudited) | ||
|
June 30, 2011 |
December 31, 2010 |
|
| ASSETS | ||
| CASH AND CASH EQUIVALENTS: | ||
| Cash and due from banks | $ 30,502 | $ 16,692 |
| Short-term investments | 50,230 | 44,016 |
| Total cash and cash equivalents | 80,732 | 60,708 |
| AVAILABLE FOR SALE SECURITIES-At fair value | 153,838 | 125,447 |
| HELD TO MATURITY SECURITIES-At amortized cost | 11,327 | 13,679 |
| LOANS HELD FOR SALE | 0 | 380 |
| LOANS RECEIVABLE (Net of allowance for loan losses of $15,328 in 2011 and $14,312 in 2010) | 1,430,609 | 1,410,498 |
| FEDERAL HOME LOAN BANK STOCK, at cost | 17,007 | 17,007 |
| ACCRUED INTEREST RECEIVABLE | 4,578 | 4,176 |
| DEFERRED TAX ASSET-Net | 7,744 | 11,327 |
| PREMISES AND EQUIPMENT-Net | 14,507 | 14,912 |
| GOODWILL | 1,149 | 1,149 |
| CASH SURRENDER VALUE OF BANK-OWNED LIFE INSURANCE | 10,648 | 10,459 |
| OTHER REAL ESTATE OWNED | 148 | 990 |
| CURRENT FEDERAL TAX RECEIVABLE | 7,603 | 0 |
| PREPAID FDIC ASSESSMENTS | 2,930 | 3,875 |
| OTHER ASSETS | 3,857 | 3,466 |
| $ 1,746,677 | $ 1,678,073 | |
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||
| LIABILITIES: | ||
| DEPOSITS: | ||
| Non-interest-bearing | $ 166,863 | $ 168,736 |
| Interest-bearing | 1,110,007 | 1,050,524 |
| Total deposits | 1,276,870 | 1,219,260 |
| MORTGAGORS' AND INVESTORS' ESCROW ACCOUNTS | 6,418 | 6,131 |
| ADVANCES FROM THE FEDERAL HOME LOAN BANK | 116,892 | 261,423 |
| AVAILABLE FOR SALE SECURITIES PAYABLE | 0 | 10,534 |
| ACCRUED EXPENSES AND OTHER LIABILITIES | 14,372 | 14,297 |
| TOTAL LIABILITIES | 1,414,552 | 1,511,645 |
| COMMITMENTS AND CONTINGENCIES (Note 13) | ||
| STOCKHOLDERS' EQUITY: | ||
| Preferred stock (no par value; 2,000,000 and 1,000,000 shares authorized; no shares issued and outstanding) | 0 | 0 |
| Common stock (no par value; 60,000,000 shares authorized; 29,506,948 and 29,653,088 shares issued and 29,506,948 and 28,610,081 outstanding at June 30, 2011 and December 31, 2010, respectively)(1) | 243,776 | 85,249 |
| Additional paid-in capital | 14,932 | 4,789 |
| Unearned compensation - ESOP | (10,028) | (3,478) |
| Treasury stock, at cost (1,043,007 shares at December 31, 2010)(1) | 0 | (9,495) |
| Retained earnings | 86,522 | 90,645 |
| Accumulated other comprehensive loss, net of tax | (3,077) | (1,282) |
| TOTAL STOCKHOLDERS' EQUITY | 332,125 | 166,428 |
| $ 1,746,677 | $ 1,678,073 | |
| Rockville Financial, Inc. and Subsidiaries | ||||
| Consolidated Statements of Operations | ||||
| (In Thousands, Except Share Data) | ||||
| (Unaudited) | ||||
| For the Three Months | For the Six Months | |||
| Ended June 30, | Ended June 30, | |||
| 2011 | 2010 | 2011 | 2010 | |
| INTEREST AND DIVIDEND INCOME: | ||||
| Loans | $ 17,481 | $ 17,357 | $ 35,016 | $ 34,998 |
| Securities-interest | 1,286 | 1,145 | 2,335 | 2,342 |
| Securities-dividends | 149 | 115 | 279 | 218 |
| Interest-bearing deposits | 16 | 3 | 31 | 3 |
| Total interest and dividend income | 18,932 | 18,620 | 37,661 | 37,561 |
| INTEREST EXPENSE: | ||||
| Deposits | 2,897 | 2,853 | 5,808 | 5,853 |
| Borrowed funds | 2,265 | 2,608 | 4,688 | 5,151 |
| Total interest expense | 5,162 | 5,461 | 10,496 | 11,004 |
| Net interest income | 13,770 | 13,159 | 27,165 | 26,557 |
| PROVISION FOR LOAN LOSSES | 754 | 909 | 1,506 | 1,812 |
| Net interest income after provision | 13,016 | 12,250 | 25,659 | 24,745 |
| for loan losses | ||||
| NON-INTEREST INCOME: | ||||
| Total other-than-temporary impairment losses on equity securities | 0 | 0 | (29) | 0 |
| Service charges and fees | 1,682 | 1,992 | 3,278 | 3,234 |
| Net gain from sales of securities | 6,201 | 0 | 6,201 | 188 |
| Net gain from sales of loans | 0 | 364 | 59 | 523 |
| Other income (loss) | (64) | 9 | (2) | 107 |
| Total non-interest income | 7,819 | 2,365 | 9,507 | 4,052 |
| NON-INTEREST EXPENSE: | ||||
| Salaries and employee benefits | 6,613 | 4,831 | 12,284 | 9,621 |
| Service bureau fees | 1,128 | 987 | 2,187 | 1,986 |
| Occupancy and equipment | 1,100 | 1,055 | 2,266 | 2,182 |
| Professional fees | 498 | 368 | 1,182 | 758 |
| Marketing and promotions | 441 | 397 | 765 | 671 |
| FDIC assessments | 506 | 401 | 1,020 | 801 |
| Other real estate owned | 15 | 99 | 74 | 467 |
| Contribution to Rockville Bank Foundation, Inc. | 0 | 0 | 5,043 | 0 |
| Loss on extinguishment of debt | 8,914 | 0 | 8,914 | 0 |
| Other | 1,493 | 1,254 | 2,917 | 2,541 |
| Total non-interest expense | 20,708 | 9,392 | 36,652 | 19,027 |
| INCOME (LOSS) BEFORE INCOME TAXES | 127 | 5,223 | (1,486) | 9,770 |
| INCOME TAX PROVISION (BENEFIT) | 84 | 1,759 | (507) | 3,452 |
| NET INCOME (LOSS) | $ 43 | $ 3,464 | $ (979) | $ 6,318 |
| Rockville Financial, Inc. and Subsidiaries | ||||
| Consolidated Statements of Operations – Concluded | ||||
| (In Thousands, Except Share Data) | ||||
| (Unaudited) | ||||
| For the Three Months | For the Six Months | |||
| Ended June 30, | Ended June 30, | |||
| 2011 | 2010(1) | 2011 | 2010(1) | |
| Net income (loss) per share: | ||||
| Basic | $0.00 | $0.12 | $ (0.03) | $0.22 |
| Diluted | $0.00 | $0.12 | $ (0.03) | $0.22 |
| Weighted-average basic shares outstanding: | ||||
| Basic | 28,803,416 | 28,086,689 | 28,941,501 | 28,087,770 |
| Diluted | 28,931,099 | 28,116,659 | 28,941,501 | 28,105,296 |