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Rockville Financial, Inc. Announces Record Annual Earnings

ROCKVILLE, Conn., Jan. 30, 2013 (GLOBE NEWSWIRE) -- Rockville Financial, Inc. ("Rockville Financial" or the "Company") (Nasdaq:RCKB), the holding company for Rockville Bank (the "Bank"), today announced net income of $4.3 million, or $0.16 per diluted share, for the quarter ended December 31, 2012, compared to net income of $4.0 million, or $0.14 per diluted share, for the quarter ended December 31, 2011. For the year 2012, net income is $15.8 million, or $0.56 per diluted share, compared to $7.1 million, or $0.25 per diluted share for the year 2011.

"I am pleased to announce that Rockville Financial, Inc. reported record annual earnings, and that the fourth quarter included strong fundamentals, increased commercial loan growth, record residential mortgage originations and continued strong asset quality," stated William H. W. Crawford, IV, President and Chief Executive Officer of Rockville Financial, Inc. and Rockville Bank. "The Company's quarterly results, however, do reflect the pressure that the net interest margin is under and the volatile nature of the mortgage banking business. During the quarter, yields on loans and securities and mortgage spreads declined due to the continued low interest rate environment and the actions by the Federal Reserve Board. While 2013 will likely be a tough operating environment for the banking industry, Rockville's management will continue its disciplined management approach and will make decisions that are in the long term best interests of its shareholders."

Earnings in both years were affected by non-core income and expense. A reconciliation of these non-GAAP measures may be found in the tables titled "Reconciliation of Non-GAAP Financial Measures."

Financial Highlights

  • Record annual net income of $15.8 million in 2012, 2.2 times 2011 net income
  • Record annual diluted earnings per share of $0.56 in 2012 compared to $0.25 in 2011
  • 20% annual core operating revenue growth of $13.3 million
  • 11% quarterly core operating revenue growth, compared to fourth quarter 2011
  • 3% decrease in core operating revenue, compared to linked quarter
  • Core operating expense were flat compared to linked quarter
  • $1.3 million net gain from sales of loans, compared to $2.5 million in the linked quarter
  • 3.74% tax equivalent net interest margin, compared to 3.80% in the linked quarter
  • 13% growth in deposits in 2012
  • 16% growth in non-interest-bearing deposits in the year
  • 0.13% annualized net loan charge-offs to average loans
  • 0.88% ROA in the fourth quarter of 2012, 0.84% ROA for the year 2012
  • Pension plan hard-freeze as of year-end 2012

Loan Production Highlights

  • 15% annualized linked quarter loan growth
  • 29% annualized linked quarter commercial loan growth
  • 18% commercial loan growth in 2012
  • Record annual residential mortgage originations of $294 million
  • Record quarterly residential mortgage originations of $87 million
  • 141% annual increase in residential mortgage production
  • 113% increase in residential mortgage production, compared to fourth quarter of 2011
  • 328% increase in purchase mortgage production, compared to fourth quarter of 2011

Capital Highlights

  • 30% total shareholder return year-over-year, compared to 22% SNL thrift index
  • 54% dividend increase since 2011 conversion
  • 61% of stock buyback plan completed at $11.97 per share average cost, compared to $12.09 per share average closing price
  • 94% dividend payout ratio in 2012, including special cash dividend

Fourth Quarter Talent Recruitment Highlights

  • 6 branch team members for new West Hartford Banking Center opening in Q1 2013
  • 2 financial advisors and sales assistant for Rockville Financial Services subsidiary
  • Senior Vice President team leader for Western C&I Commercial Team
  • 25 net new FTE, 331 at year-end up from 306 at linked quarter-end comprised largely of commercial credit and mortgage banking support positions

Operating Results

Rockville Financial reported record fourth quarter and annual earnings, and achieved these results despite the increased expense incurred in the fourth quarter and during the year from building out the infrastructure in both technology and human capital.

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