Westbank Corporation Reports 2006 First Quarter Earnings

WEST SPRINGFIELD, Mass., April 21  /PRNewswire-FirstCall/ -- Westbank Corporation (NASDAQ:WBKC) today reported net income of $909,000 for the quarter ended March 31, 2006, representing $.19 per share (diluted) versus $1,411,000 or $.29 per share (diluted) for the quarter ended March 31, 2005. Included in earnings for the quarter ended March 31, 2006 were gains on sale of loans totaling $19,000, while the quarter ended March 31, 2005 included non-taxable life insurance proceeds of $430,000 and gains on the sale of securities and loans totaling $112,000.

For the quarter ended March 31, 2006, net interest income totaled $5,403,000 compared to $5,697,000 at the end of the first quarter of 2005. The Corporation's net interest margin totaled 2.84% for the period ended March 31, 2006 compared to 3.18% for the period ended March 31, 2005.

At March 31, 2006, the allowance for loan losses was $4,173,000 or 0.94% of total loans compared to $4,199,000 or 0.97% of total loans at December 31, 2005.  The Corporation's provision for loan losses for the first quarter of 2006 was $0 versus $140,000 for the first quarter of 2005.  As of March 31, 2006, credit quality remained strong as non-performing loans totaled $1,806,000, representing 0.41% of total loans, compared to December 31, 2005 when non-performing loans totaled $2,216,000 or 0.51% of total loans.  Donald R. Chase, President and Chief Executive Officer, said, "We are very pleased with the strong credit quality of our loan portfolio."  As of March 31, 2006, other real estate owned totaled $608,000.

Non-interest income totaled $913,000 for the quarter ended March 31, 2006 versus $1,217,000 for the same period of 2005.  During the quarter ended March 31, 2006, non-interest income declined by $304,000, primarily as a result of the life insurance proceeds and gain on the sale of securities and loans discussed above, offset by an increase in deposit services charges of $88,000 and other fee income of $131,000.

Non-interest expense for the quarter ended March 31, 2006 totaled $4,993,000 versus $4,922,000 for the same period of 2005.

As of March 31, 2006, securities totaled $323 million, while net loans grew to $437 million from $428 million at December 31, 2005.  Deposits totaled $584 million at March 31, 2006, as compared to $599 million at December 31, 2005 and assets totaled $822 million at March 31, 2006 versus $809 million at December 31, 2005.

Shareholders' equity at March 31, 2006 totaled $46,588,000, representing a book value of $9.80 per share.  The annualized return on average assets was 0.45% and the annualized return on average equity was 7.76% for the three months ended March 31, 2006.

According to Chase, "Commercial loan activity continues to drive our loan volume, with commercial mortgages totaling $141 million at March 31, 2006 versus $118 million at March 31, 2005, an increase of $23 million or 19%.  In addition, we are pleased to see a slight increase in residential mortgage activity."

"We are also pleased to report that construction of our newest full-service branch office in Southwick, Massachusetts, is moving along nicely," Chase continued.  "This new office will be a 3,000-square-foot facility with two drive-up windows and a drive-up ATM.  The office will replace our much smaller Southwick office and will be located at 664 College Highway in the town of Southwick.  We expect the office to open for business during June of this year."

Chase also commented that, "April marks the one-year anniversary of our affiliation with Infinex Financial Services.  The Financial Services division (Westco Financial Services) offers investment and insurance services.  We begin our second year of operation with assets under management of approximately $10 million and we look forward to continued growth in this business line during the coming year."

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.

  Condensed Consolidated Balance Sheets
  Westbank Corporation and Subsidiaries


  (In thousands)                     March 31, 2006        December 31, 2005
                                                    (Unaudited)
  Assets
  Cash and due from banks
     Non-interest bearing                $15,645                $13,899
     Interest bearing cash and cash
      equivalents                            488                     10
  Federal funds sold                         105                     24
  Total cash and cash equivalents         16,238                 13,933
  Securities held to maturity            154,157                151,358
  Securities available for sale          168,676                172,073
  Loans held for sale                        206                      -
  Loans                       $441,657                   $432,459
    Less allowance for loan
     losses                     4,173                      4,199
  Net loans                              437,484                428,260
  Investment in Federal Home
   Loan Bank stock                         7,676                  6,450
  Bank premises and equipment              7,993                  7,577
  Other real estate owned -- net             608                    630
  Goodwill                                 8,837                  8,837
  Bank-owned life insurance                9,238                  9,149
  Other intangible assets                  1,792                  1,792
  Investment in unconsolidated
   investees                                 526                    526
  Other assets                             8,405                  8,122
  Total Assets                          $821,836               $808,707


  Liabilities and Stockholders' Equity
  Deposits
     Non-interest bearing                $80,910                $84,300
     Interest bearing                    502,755                515,059
        Total deposits                   583,665                599,359
  Funds borrowed                         167,865                138,454
  Junior subordinated debentures          17,526                 17,526
  Other liabilities                        6,192                  5,990
     Total Liabilities                   775,248                761,329

  Stockholders' equity
     Common stock                          9,560                  9,560
     Unearned compensation -
      restricted stock                         -                 (1,424)
     Additional paid in capital           17,708                 19,105
     Retained earnings                    22,661                 22,417
     Treasury stock                         (381)                  (420)
     Accumulated other comprehensive
      income                              (2,960)                (1,860)
        Total stockholders' equity        46,588                 47,378
  Total Liabilities and Stockholders'
   Equity                               $821,836               $808,707




  Condensed Consolidated Statements of Income
  Westbank Corporation and Subsidiaries


                                                   Quarter Ended March 31,
  (Dollar amounts in thousands,
   except per share data)                          2006              2005
                                                         (Unaudited)
  Income:
    Interest and fees on loans                    $6,643            $6,246
    Interest on securities                         3,858             3,147
    Interest from interest-bearing cash
     equivalents and federal funds sold                7                 3
  Total interest income                           10,508             9,396
  Interest expense                                 5,105             3,699
  Net interest income                              5,403             5,697
  Provision for loan losses                            -               140
  Net interest income after
    provision for loan losses                      5,403             5,557
  Gain on sale of securities
    available for sale                                 -                96
  Gain on sale of loans                               19                16
  Other non-interest income                          894             1,105
  Total non-interest income                          913             1,217
  Non-interest Expense:
    Salaries and benefits                          2,876             2,697
    Occupancy -- net                                 432               499
    Other non-interest expense                     1,685             1,726
  Total non-interest expense                       4,993             4,922
  Income before income taxes                       1,323             1,852
  Income taxes                                       414               441
  Net Income                                        $909            $1,411

  Earnings per share
    Basic                                          $0.19             $0.30
    Diluted                                        $0.19             $0.29
  Weighted average shares outstanding
    Basic                                      4,676,319         4,728,089
    Diluted                                    4,838,219         4,939,485


DATASOURCE: Westbank Corporation



CONTACT: John M. Lilly, Treasurer and Chief Financial Officer of Westbank

Corporation, [phone] 

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