Naugatuck Valley Financial Corporation Reports 184.5% Increase In Earnings And Announces Cash Dividend For The Quarter Ended June 30, 2010

NAUGATUCK, Conn., July 21, 2010 (GLOBE NEWSWIRE) -- Naugatuck Valley Financial Corporation (the "Company") (Nasdaq:NVSL), the parent company of Naugatuck Valley Savings and Loan (the "Bank"), announced net income of $680,000 for the quarter ended June 30, 2010, compared to net income of $239,000 for the quarter ended June 30, 2009, an increase of $441,000 or 184.5%. In addition, for the six month period ended June 30, 2010, the Company announced net income of $993,000 compared to net income of $608,000 for the six months ended June 30, 2009, an increase of $385,000 or 63.3%. Earnings per share for the quarter and six months ended June 30, 2010 were $.10 and $.15 respectively, compared to $.04 and $.09 for the quarter and six months ended June 30, 2009.

In addition, the Board of Directors of the Company declared a cash dividend for the quarter ended June 30, 2010, of $.03 per share payable to stockholders of record on August 10, 2010. Payment of the cash dividend will be made on or about September 1, 2010. Naugatuck Valley Mutual Holding Company, the Company's mutual holding company, has waived receipt of the dividend.           

Net Interest Income

Net interest income for the quarter ended June 30, 2010 totaled $4.6 million compared to $3.7 million for the quarter ended June 30, 2009, an increase of $873,000 or 23.3%.  For the six month period ended June 30, 2010, net interest income totaled $9.1 million compared to $7.4 million for the six months ended June 30, 2009, an increase of $1.7 million or 23.3%. The increase in net interest income was primarily due to a decrease in interest expense, combined with a smaller increase in interest income. Interest expense decreased by $695,000, or 21.3%, and by $1.5 million, or 22.4%, in the three and six month periods, respectively. These decreases were primarily due to a decrease in the average rates paid on interest bearing liabilities. The average rates paid on deposits and borrowings decreased by 66 basis points in the three month period and by 68 basis points in the six month period. The Company experienced an increase in the average balances of deposits of 5.0% and 3.4% and an increase in the average balances of borrowings of 3.9% and 4.5% for the three and six month periods, respectively. Increases in the average balances of deposits in both periods were experienced in regular savings accounts, checking accounts and money market accounts, partially offset by decreases in the average balances of certificate accounts. The increases in deposits and borrowings were primarily used to fund increased loan demand.