Westfield Financial, Inc. (the “Company”) (NasdaqGS:WFD), the holding company for Westfield Bank (the “Bank”), reported net income of $1.6 million, or $0.07 per diluted share, for the quarter ended December 31, 2012, compared to $1.4 million, or $0.06 per diluted share, for the quarter ended September 30, 2012, and $1.5 million, or $0.06 per diluted share, for the quarter ended December 31, 2011.
For the year ended December 31, 2012, net income was $6.3 million, or $0.26 per diluted share, compared to $5.9 million, or $0.22 per diluted share, for 2011.
Selected financial highlights for the fourth quarter 2012 include:
- During the fourth quarter 2012, commercial and industrial loans increased $10.7 million to $126.1 million at December 31, 2012. In addition, commercial real estate loans increased $5.4 million to $245.8 million at December 31, 2012. The increase in both commercial and industrial loans and commercial real estate loans was primarily due to new loan originations. While in prior quarters management has used residential loan growth to supplement the loan portfolio, the long-term strategy remains focused on commercial lending.
- The Company repurchased 2,424,554 shares of its common stock pursuant to its stock repurchase programs for a total of $17.6 million, which equates to 9.6% of the outstanding shares as of September 30, 2012. The shares were repurchased at an average price of $7.25.
- Net interest and dividend income decreased $109,000 to $7.6 million for the quarter ended December 31, 2012, compared to $7.7 million for the quarter ended September 30, 2012. The decrease in the yield on earning assets was greater than the decrease in the cost of funds due to the low rate environment.
- The Bank prepaid repurchase agreements in the amount $28.0 million and incurred a prepayment expense of $1.0 million. The repurchase agreements had a weighted average cost of 3.06% and the prepayment will decrease the cost of funds which will help increase the net interest margin. The repurchase agreements were paid off during the last week of December 2012 and therefore had minimal impact to the cost of funds in the fourth quarter 2012.
- There was no provision for loan losses for the fourth quarter 2012, compared to $218,000 for the third quarter 2012. There was net loan growth during the fourth quarter; however, an overall positive change in the risk profile of the loan portfolio offset the need for a provision.
Income Statement Discussion and AnalysisNet interest and dividend income decreased $109,000 to $7.6 million for the quarter ended December 31, 2012, compared to $7.7 million for the quarter ended September 30, 2012. The net interest margin decreased 5 basis points from the third quarter 2012. This resulted from a decrease of 9 basis points in the yield on average interest-earning assets partially offset by a decrease of 5 basis points in the cost of interest-bearing liabilities and an increase in average interest-earning assets of $6.4 million.
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