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Rockville Financial, Inc. Announces Record First Quarter Earnings And EPS Up 31% From Prior Year

ROCKVILLE, Conn., April 25, 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 $4.6 million, or $0.17 per diluted share, for the quarter ended March 31, 2013, compared to net income of $3.9 million, or $0.13 per diluted share, for the quarter ended March 31, 2012.

"I am pleased to announce that Rockville Financial, Inc. reported record first quarter earnings resulting in a 31% increase in earnings per share over the first quarter of 2012. The quarter included strong residential mortgage originations (up 74% versus the total U.S. lenders up 29% as reported by the Mortgage Bankers Association), solid execution on loan sales, stable expense management and continued superior asset quality," stated William H. W. Crawford, IV, President and Chief Executive Officer of Rockville Financial, Inc. and Rockville Bank.

"The Company's record quarterly results include the impact of the net interest margin decline attributable to decreased yields on loans and securities in the continued low interest rate environment. Offsetting the margin decline is the 4% increase in average earning assets for the quarter. I am proud of our team's accomplishment of producing yet another quarter of record profits in a tough operating environment. I would like to thank our employees for their continued commitment to delivering superior customer service, which is the driver to our success every day."

Earnings in both years were affected by non-core income and expense. A reconciliation of these non-GAAP measures may be found on page F-7.

Financial Highlights

  • Record first quarter net income of $4.6 million
  • Diluted earnings per share of $0.17, up 31% compared to first quarter 2012
  • 0.89% ROA, compared to 0.88% ROA in the linked quarter
  • 13% core operating revenue growth, compared to first quarter 2012
  • 2% increase in core operating revenue, compared to linked quarter
  • 19% increase in core operating expense, compared to first quarter 2012
  • 1% increase in core operating expense, compared to linked quarter
  • $2.1 million net gain from sales of loans, compared to $1.3 million in the linked quarter
  • 3.48% tax equivalent net interest margin, compared to 3.74% in the linked quarter
  • 3% linked quarter deposit growth
  • Nominal 0.08% annualized net loan charge-offs to average loans
  • NIE/Average Assets decreased to 2.87% from 3.07% in the linked quarter

Loan Production Highlights

  • Quarterly residential mortgage originations of $75 million
  • 21% of residential mortgage volume is for home purchases
  • 74% increase in residential mortgage production, compared to first quarter of 2012
  • 74% production increase outpaces 29% average increase for all U.S. lenders
  • 57% increase in purchase mortgage production, compared to first quarter of 2012
  • Commercial loans flat due to seasonality, impacted by large payoffs and adherence to price and underwriting discipline

Capital Highlights

  • 16% total shareholder return year-over-year, compared to 14% SNL U.S. Bank & Thrift index
  • 54% dividend increase since 2011 conversion
  • 67% of stock buyback plan completed at $12.05 per share average cost, compared to $12.27 per share average closing price
  • 62% dividend payout ratio in the first quarter
  • $11.38 tangible book value, compared to $11.33 tangible book value in the linked quarter
  • 13% decrease in Tangible Common Equity/Tangible Assets to 15.43% since 2011 conversion

First Quarter Talent Recruitment Highlights

  • Senior Vice President, Head of Consumer Lending
  • Senior Vice President, Head of Private Banking
  • 2 mortgage loan officers
  • 1 private banking business development officer
  • 1 financial advisor
  • 4 net new FTE, 335 at March 31, 2013 up from 331 at linked quarter-end

Operating Results

Rockville Financial reported record first quarter earnings, and achieved these results despite the downward pressure on net interest income and the net interest margin in the continued low interest rate environment and difficult operating environment that all banks are facing in 2013.

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