Newmil Bancorp (NASDAQ:NMIL)
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The Board of Directors of NewMil Bancorp, Inc.
(NASDAQ/NM:NMIL) today announced results of its first quarter ended
March 31, 2006.
Diluted earnings per share increased 4% to $0.54 for the first
quarter ended March 31, 2006 from $0.52 for the first quarter ended
March 31, 2005. Net income for the quarter was substantially unchanged
at $2.22 million compared to $2.23 million for first quarter of 2005.
NewMil's results for the first quarter of 2006 reflect the
challenging interest rate environment affecting the entire banking
industry. Net interest income was $6.3 million for the quarter as
compared with $6.4 million in the fourth quarter of 2005 and $6.6
million in the first quarter of 2005. Taxable equivalent net interest
income was $6.5 million for the quarter compared with $6.6 million in
the fourth quarter of 2005 and $6.6 million in the first quarter of
2005.
The net interest margin was 3.19% for the quarter compared to
3.31% in the fourth quarter of 2005 and 3.71% in the first quarter of
2005. The compression in net interest margin was mostly due to the
rise in short term rates and the prolonged flatness of the yield
curve, which has reduced the gap between short- and intermediate-term
interest rates and the spread between what banks earn on loans and
securities and pay on deposits and borrowings. NewMil has sought to
offset this effect by growing earning assets. During the quarter
average earning assets were up $20 million over the fourth quarter of
2005 and up $120 million over the first quarter of 2005.
Non-interest income was $1.1 million for the quarter, and included
a gain of $200,000 from the sale of OREO, as compared with $0.9
million for the first quarter of 2005. Non-interest expense was $4.3
million for the quarter and was substantially unchanged when compared
with the prior year period. The decrease in the provision for income
tax for the quarter when compared with the prior year period was
principally due to increased holdings of tax exempt securities. The
efficiency ratio was 58.6% for the first quarter of 2006.
NewMil's assets grew $3.3 million during the first quarter to
$877.8 million at March 31, 2006. Gross loans increased $18.5 million
during the quarter to $516.2 million at March 31, 2006. Asset quality
remains strong, as evidenced by nonperforming assets at 23 basis
points of total assets at March 31, 2006. Deposits grew $3.3 million
during the quarter to $619.3 million at March 31, 2006.
At March 31, 2006, book value and tangible book value per common
share were $12.84 and $10.85, respectively, and tier 1 leverage and
total risk-based capital ratios were 6.77% and 13.17%, respectively.
Return on average shareholders' equity was 17% for the first quarter
of 2006 versus 16% for the first quarter of 2005.
Francis J. Wiatr, NewMil's Chairman, President and CEO noted,
"Given the continued compression of net interest margin due to the
current flat interest rate environment, we are pleased with our
results for the quarter. Our commercial lending business was solid
during the quarter and we continued to build market share with this
important segment of our business. Recently released statistics by the
U.S. Small Business Administration rank NewMil Bank as one of the top
originators in the State of Connecticut for 504 loans.
"Our retail banking programs also continued to grow during the
quarter, even as we faced an ever more competitive market. Sales of
our highly competitive Health Savings Account (HSA) product were
particularly successful during the quarter, and we attracted many new
accounts as a result of targeted marketing programs to benefits
brokers.
The Board of Directors also announced a quarterly dividend of
$0.22 per common share, payable on May 17, 2006 to shareholders of
record on May 3, 2006.
NewMil Bancorp is the parent company of NewMil Bank, which has
served western Connecticut since 1858, and operates 20 full-service
banking offices.
Please also refer to Webster Financial Corporation's (NYSE: WBS)
press release of April 25, 2006, which announced that the Board of
Directors of NewMil has entered into a definitive agreement with
Webster for Webster to acquire NewMil.
Statements in this news release concerning future results,
performance, expectations or intentions are forward-looking
statements. Actual results, performance or developments may differ
materially from forward-looking statements as a result of known or
unknown risks, uncertainties, and other factors, including those
identified from time to time in the Company's other filings with the
Securities and Exchange Commission, press releases and other
communications.
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NewMil Bancorp, Inc
SELECTED CONSOLIDATED FINANCIAL DATA
(in thousands except ratios and per share amounts)
Three month
period ended
March 31
STATEMENT OF INCOME 2006 2005
Interest and dividend income $11,256 $9,279
Interest expense 4,972 2,719
Net interest income 6,284 6,560
Provision for loan losses - -
Non-interest income
Service fees on deposit accounts 656 702
Gains on sales of mortgage loans 11 52
Gain on sale of OREO 200 -
Other non-interest income 198 193
Total non-interest income 1,065 947
Non-interest expense
Compensation 2,419 2,312
Occupancy and equipment 791 787
Postage and telecommunication 145 133
Professional services, collection & OREO 182 226
Printing and office supplies 97 104
Marketing 67 67
Service bureau EDP 92 93
Amortization of intangible assets 25 37
Other 489 496
Total non-interest expense 4,307 4,255
Income before income taxes 3,042 3,252
Provision for income taxes 824 1,017
Net income $ 2,218 $ 2,235
Per common share
Diluted earnings $ 0.54 $ 0.52
Basic earnings 0.54 0.53
Cash dividends 0.22 0.20
Statistical data
Net interest margin, (fully tax
equivalent) 3.19% 3.71%
Efficiency ratio 58.61 56.68
Return on average assets 1.02 1.19
Return on average common
shareholders' equity 16.81 16.08
Weighted average equivalent
common shares outstanding, diluted 4,141 4,309
NewMil Bancorp, Inc.
SELECTED CONSOLIDATED FINANCIAL DATA
(in thousands except ratios and per share amounts)
March 31, March 31, December 31,
2006 2005 2005
FINANCIAL CONDITION
Total assets $877,774 $789,800 $872,991
Loans, net 511,265 476,772 492,763
Allowance for loan losses 4,941 5,001 4,949
Securities 306,264 258,079 322,343
Cash and cash equivalents 23,235 20,664 22,564
Intangible assets 8,069 8,203 8,093
Deposits 619,251 604,284 615,995
Federal Home Loan Bank
advances 180,299 98,663 174,266
Repurchase agreements 11,806 14,186 15,491
Long term debt 9,881 9,821 9,866
Shareholders' equity 52,272 54,582 53,016
Non-performing assets 2,041 476 1,590
Deposits
Demand (non-interest
bearing) $ 79,818 $ 71,039 $ 77,383
NOW accounts 79,475 84,766 82,400
Money market 138,401 151,220 146,007
Savings and other 90,658 87,130 88,142
Certificates of deposit 230,899 210,129 222,063
Total deposits 619,251 604,284 615,995
Per common share
Book value $ 12.84 $ 12.96 $ 12.98
Tangible book value 10.85 11.01 10.99
Statistical data
Non-performing assets to
total assets 0.23% 0.06% 0.18%
Allowance for loan losses
to total loans 0.96 1.04 0.99
Allowance for loan losses
to non-performing loans 242.09 1,240.94 311.26
Common shareholders'
equity to assets 5.96 6.91 6.07
Tangible common
shareholders' equity to
assets 5.04 5.87 5.15
Tier 1 leverage capital 6.77 7.75 6.81
Total risk-based capital 13.17 14.23 13.09
Common shares outstanding, net
(period end) 4,073 4,211 4,086
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