Form 8-K WESTFIELD FINANCIAL INC For: Oct 28

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

---

 

FORM 8-K

 

---

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): October 28, 2015

 

---

 

WESTFIELD FINANCIAL, INC.

(Exact name of registrant as specified in its charter)

 

Massachusetts (State or other jurisdiction of incorporation or organization)

001-16767 (Commission File Number)

73-1627673 (I.R.S. Employer Identification No.)

 

141 Elm Street

Westfield, Massachusetts 01085
(Address of principal executive offices, zip code)

 

Registrant's telephone number, including area code: (413) 568-1911

 

(Former name or former address, if changed since last report)

 

---

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

☐  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

Item 2.02.

Results of Operations and Financial Condition

On October 28, 2015, Westfield Financial, Inc. (the “Company”) issued a press release announcing its financial results for the quarter ended September 30, 2015.  The press release also announced the declaration of a regular cash dividend of $0.03 per share.  A copy of the press release is furnished as Exhibit 99.1 hereto and is hereby incorporated by reference into this Item 2.02.

The information contained in this current report on Form 8-K, including Exhibit 99.1, shall not be deemed “filed” with the Securities and Exchange Commission nor incorporated by reference in any registration statement filed by the Company under the Securities Act of 1933, as amended.

Item 9.01

Financial Statements and Exhibits.

(a)  Not applicable.

 

(b)  Not applicable.

 

(c)  Not applicable.

 

(d)  Exhibits.

 

The exhibits required by this item are set forth on the Exhibit Index attached hereto.

 

 

Exhibit Number		Description
99.1		Press Release, dated October 28, 2015

 

 

 

SIGNATURES

 

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

	WESTFIELD FINANCIAL, INC.
	By:	/s/ Leo R. Sagan, Jr.
		Leo R. Sagan, Jr.
		Chief Financial Officer
Dated:    October 28, 2015

 

 

 

EXHIBIT INDEX

 

 

Exhibit Number		Description
99.1		Press Release, dated October 28, 2015

 

 

 

 

 

 

Westfield Financial, Inc. 8-K

 

Exhibit 99.1

 

For further information contact: James C. Hagan, President & CEO Leo R. Sagan, Jr., CFO Meghan Hibner, VP Investor Relations Officer 413-568-1911

 

WESTFIELD FINANCIAL, INC. REPORTS RESULTS FOR THE QUARTER ENDED SEPTEMBER 30, 2015 AND DECLARES QUARTERLY DIVIDEND

 

Loan growth continues to be strong at 12.1% year-over-year

 

Westfield, Massachusetts, October 28, 2015: Westfield Financial, Inc. (the “Company”) (NasdaqGS: WFD), the holding company for Westfield Bank (the “Bank”), reported net income of $1.6 million, or $0.09 per diluted share, for the quarter ended September 30, 2015, compared to $1.5 million, or $0.08 per diluted share, for the quarter ended September 30, 2014. For the nine months ended September 30, 2015, net income was $4.3 million, or $0.25 per diluted share, compared to $4.5 million, or $0.25 per diluted share, for the same period in 2014.

 

 

Selected financial highlights for third quarter 2015 include:

 

●		Total loans increased $87.3 million, or 12.1%, to $806.9 million at September 30, 2015 compared to $719.6 million at September 30, 2014. This was primarily due to increases in residential loans of $69.7 million, commercial real estate loans of $8.6 million and commercial and industrial loans of $6.3 million. On a sequential-quarter basis, total loans increased $47.5 million, or 6.3%, during the third quarter of 2015. This was due to an increase in residential loans of $36.9 million, commercial real estate loans of $7.7 million and commercial and industrial loans of $644,000.
●		Securities decreased $55.0 million, or 10.8%, to $455.9 million at September 30, 2015, compared to $510.9 million at September 30, 2014. On a sequential-quarter basis, securities decreased $60.8 million, or 11.8% at September 30, 2015, compared to $516.7 million at June 30, 2015.
●		Net interest and dividend income increased $326,000 to $8.2 million for the quarter ended September 30, 2015 compared to $7.8 million for the comparable 2014 period. On a sequential-quarter basis, net interest and dividend income increased $381,000 for the quarter ended September 30, 2015, compared to the quarter ended June 30, 2015. On a sequential quarter basis, the net interest margin increase 3 basis points to 2.53%, compared to 2.50% for the quarter ended June 30, 2015.
●		The Bank prepaid $19.0 million in Federal Home Loan Bank borrowings with a weighted average rate of 2.93% and incurred a prepayment expense of $429,000 in the third quarter of 2015 in order to eliminate a higher-cost liability. Because the transaction was completed at the end of the third quarter 2015, it did not have an impact on the Bank’s cost of funds in this quarter.
●		Noninterest expense increased $519,000 to $6.9 million for the quarter ended September 30, 2015 compared to the third quarter of 2014. On a sequential-quarter basis, noninterest expense was stable at $6.9 million for the quarters ended September 30, 2015 and June 30, 2015, respectively. The efficiency ratio, excluding non-core items, was 73.7% for the third quarter of 2015, compared to 76.1% for the quarter ended June 30, 2015.

 

President and CEO, James C. Hagan stated, “One of our strategic objectives has been the improvement of our asset mix through reducing securities and growing our loan portfolio. The results through September 30, 2015 demonstrate that we continue to execute on this strategy, and in doing so, we have improved our net interest income. We remain committed to growing our core customer franchise and our shareholder value.”

 

 

Additional Income Statement Discussion

 

Net interest and dividend income increased $339,000 to $23.5 million for the nine months ended September 30, 2015, as compared to $23.2 million for the nine months ended September 30, 2014. The net interest margin for the nine months ended September 30, 2015 decreased 9 basis points to 2.52%, as compared to 2.61% for the same period in 2014. This was a result of a decrease of 5 basis points in the yield on average interest-earning assets along with a 5 basis point increase in the cost of average interest-bearing liabilities.

 

Non-interest income decreased $97,000 to $1.1 million for the quarter ended September 30, 2015, compared to $1.2 million for the quarter ended June 30, 2015. The June 30, 2015 period included a $130,000 one-time payment pertaining to a vendor contract renegotiation.

 

Non-interest expense increased $1.0 million to $20.4 million from $19.4 million for the nine months ended September 30, 2015, compared to the same period in 2014. Salaries and benefits increased $522,000 and occupancy expense increased $188,000. This was driven, in part, by the addition of the Enfield branch, which opened in November 2014, as well as annual increases in benefits expense. The efficiency ratio, excluding non-core items, was 75.9% and 73.8% for the nine months ended September 30, 2015 and 2014, respectively.

 

Additional Balance Sheet Discussion

 

Total deposits increased $80.2 million, or 9.7%, to $909.0 million at September 30, 2015, compared to $828.8 million at September 30, 2014. This was primarily due to increases in term accounts of $64.8 million, money market accounts of $13.7 million and checking accounts of $3.9 million, partially offset by a decrease in savings accounts of $2.1 million. The increase in term accounts from September 30, 2014 includes $40.2 million in brokered and listing service deposits, which provide a diversified, low cost funding source. Total deposits increased $11.3 million, or 1.3%, to $909.0 million at September 30, 2015, compared to $897.7 million at June 30, 2015. In addition, short-term borrowings and long term debt decreased $19.4 million to $287.6 million at September 30, 2015, compared to $307.0 million at June 30, 2015.  

 

Shareholders’ equity was $139.6 million at September 30, 2015 and $139.8 million at June 30, 2015, which represented 10.3% of total assets at September 30 and June 30, 2015, respectively. The decrease in shareholders’ equity during the quarter reflects a decrease in accumulated other comprehensive income of $744,000, the repurchase of 97,579 shares of common stock for $740,000 (an average price of $7.58 per share) and the payment of a quarterly dividend of $523,000. This was offset by net income of $1.6 million for the quarter ended September 30, 2015.

 

On March 13, 2014, the Company announced a repurchase program under which it may repurchase up to 1,970,000 shares, or 10% of its outstanding common stock. At September 30, 2015, there were 614,154 shares remaining under this repurchase program.

 

 

Credit Quality

 

The allowance for loan losses was $8.4 million, $8.3 million and $7.7 million at September 30, 2015, June 30, 2015 and September 30, 2014, representing 1.04%, 1.09% and 1.07% of total loans, respectively. This represents 114.0%, 103.5% and 86.8% of nonperforming loans, respectively.

 

An analysis of the changes in the allowance for loan losses is as follows:

 

				Three Months Ended
				September 30,				June 30,				September 30,
				2015				2015				2014
				(In thousands)
	Balance, beginning of period			$	8,295			$	8,035			$	8,017
	Provision				150				350				750
	Charge-offs				(85	)			(101	)			(1,076	)
	Recoveries				12				11				4
	Balance, end of period			$	8,372			$	8,295			$	7,695

 

Nonperforming loans were $7.3 million and $8.0 million, representing 0.91% and 1.06% of total loans at September 30, 2015 and June 30, 2015, respectively. Loans delinquent 30 – 89 days increased $4.2 million to $5.9 million at September 30, 2015 from $1.7 million at June 30, 2015 primarily due to one commercial and industrial loan relationship of $3.3 million. There are no loans 90 or more days past due and still accruing interest.

 

Declaration of Quarterly Dividend

 

The Board of Directors approved the declaration of a quarterly cash dividend of $0.03 per share. The dividend is payable on November 25, 2015 to all shareholders of record on November 11, 2015.

 

About Westfield Financial, Inc.

 

Westfield Financial, Inc. is a Massachusetts-chartered stock holding company and the parent company of Westfield Bank, Elm Street Securities Corporation, WFD Securities, Inc. and WB Real Estate Holdings, LLC. Westfield Financial and its subsidiaries are headquartered in Westfield, Massachusetts and operate through 13 banking offices located in Agawam, East Longmeadow, Feeding Hills, Holyoke, Southwick, Springfield, West Springfield and Westfield, Massachusetts, and Granby and Enfield, Connecticut.  To learn more, visit our website at www.westfieldbank.com.

 

Forward-Looking Statements

 

The Company wishes to caution readers not to place undue reliance on any such forward-looking statements contained in this press release, which speak only as of the date made. Actual results may differ materially from those indicated by such forward-looking statements as a result of various important factors discussed under the caption “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2014, and in subsequent filings with the Securities and Exchange Commission. The Company and the Bank do not undertake and specifically decline any obligation to publicly release the result of any revisions that may be made to any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.

  

 

WESTFIELD FINANCIAL, INC. AND SUBSIDIARIES

Consolidated Statements of Income and Other Data

(Dollars in thousands, except share and per share data)

(Unaudited)

 

		Three Months Ended																				Nine Months Ended
		September 30,				June 30,				March 31,				December 31,				September 30,				September 30,
		2015				2015				2015				2014				2014				2015				2014
INTEREST AND DIVIDEND INCOME:
Loans		$	7,849			$	7,371			$	7,229			$	7,331			$	7,135			$	22,449			$	20,513
Securities			2,997				3,049				2,885				3,079				3,147				8,931				9,808
Other investments - at cost			126				69				68				59				59				263				187
Federal funds sold, interest-bearing deposits and other short-term investments			2				5				6				2				2				13				11
Total interest and dividend income			10,974				10,494				10,188				10,471				10,343				31,656				30,519
INTEREST EXPENSE:
Deposits			1,414				1,380				1,341				1,300				1,298				4,135				3,877
Long-term debt			1,083				1,092				1,070				1,119				1,125				3,244				3,207
Short-term borrowings			317				243				187				174				86				748				245
Total interest expense			2,814				2,715				2,598				2,593				2,509				8,127				7,329
Net interest and dividend income			8,160				7,779				7,590				7,878				7,834				23,529				23,190
PROVISION FOR LOAN LOSSES			150				350				300				275				750				800				1,300
Net interest and dividend income after provision for loan losses			8,010				7,429				7,290				7,603				7,084				22,729				21,890
NONINTEREST INCOME:
Service charges and fees			789				840				638				659				655				2,266				1,958
Income from bank-owned life insurance			374				407				367				374				384				1,149				1,150
Loss on prepayment of borrowings			(429	)			(278	)			(593	)			—				—				(1,300	)			—
Gain on sales of securities, net			414				276				817				44				226				1,507				276
Total noninterest income			1,148				1,245				1,229				1,077				1,265				3,622				3,384
NONINTEREST EXPENSE:
Salaries and employees benefits			3,903				3,863				3,821				3,643				3,623				11,588				11,066
Occupancy			784				818				840				821				743				2,443				2,255
Data processing			636				559				585				616				600				1,779				1,725
Professional fees			596				488				472				447				495				1,555				1,489
FDIC insurance			212				188				193				205				166				592				508
Other			736				949				800				764				721				2,486				2,370
Total noninterest expense			6,867				6,865				6,711				6,496				6,348				20,443				19,413
INCOME BEFORE INCOME TAXES			2,291				1,809				1,808				2,184				2,001				5,908				5,861
INCOME TAX PROVISION			680				445				470				523				491				1,595				1,360
NET INCOME		$	1,611			$	1,364			$	1,338			$	1,661			$	1,510			$	4,313			$	4,501
Basic earnings per share		$	0.09			$	0.08			$	0.08			$	0.09			$	0.08			$	0.25			$	0.25
Weighted average shares outstanding			17,461,472				17,519,562				17,684,498				17,718,143				17,910,223				17,554,361				18,340,642
Diluted earnings per share		$	0.09			$	0.08			$	0.08			$	0.09			$	0.08			$	0.25			$	0.25
Weighted average diluted shares outstanding			17,461,472				17,519,562				17,684,498				17,718,143				17,910,223				17,554,361				18,340,642
Other Data:
Return on average assets (1)			0.47	%			0.41	%			0.41	%			0.50	%			0.46	%			0.43	%			0.47	%
Return on average equity (1)			4.69	%			3.89	%			3.82	%			4.57	%			4.12	%			4.13	%			4.05	%
Efficiency ratio (2)			73.66	%			76.06	%			78.08	%			72.90	%			71.54	%			75.87	%			73.82	%
Net interest margin			2.53	%			2.50	%			2.52	%			2.56	%			2.58	%			2.52	%			2.61	%

(1)

Annualized

(2)

The efficiency ratio represents the ratio of operating expenses divided by the sum of net interest and dividend income and noninterest income, excluding gain and loss on sale of securities, gain on bank-owned life insurance death benefit and loss on prepayment of borrowings.

 

 

WESTFIELD FINANCIAL, INC. AND SUBSIDIARIES

Consolidated Balance Sheets and Other Data

(Dollars in thousands, except per share data)

(Unaudited)

 

		September 30,				June 30,				March 31,				December 31,				September 30,
		2015				2015				2015				2014				2014
Cash and cash equivalents		$	21,980			$	13,694			$	12,719			$	18,785			$	14,429
Securities available for sale, at fair value			191,324				245,004				233,591				215,750				212,460
Securities held to maturity, at cost			248,757				256,303				266,718				278,080				283,684
Federal Home Loan Bank of Boston and other  restricted stock - at cost			15,839				15,372				14,934				14,934				14,720
Loans			806,893				759,382				730,354				724,686				719,555
Allowance for loan losses			8,372				8,295				8,035				7,948				7,695
Net loans			798,521				751,087				722,319				716,738				711,860
Bank-owned life insurance			49,852				49,477				49,070				48,703				48,329
Other assets			30,942				30,749				29,660				27,106				25,699
TOTAL ASSETS		$	1,357,215			$	1,361,686			$	1,329,011			$	1,320,096			$	1,311,181
Total deposits		$	909,041			$	897,714			$	873,303			$	834,218			$	828,785
Short-term borrowings			121,222				111,251				82,625				93,997				78,685
Long-term debt			166,407				195,772				212,637				232,479				246,804
Securities pending settlement			—				—				—				—				137
Other liabilities			20,937				17,124				20,156				16,859				12,464
TOTAL LIABILITIES			1,217,607				1,221,861				1,188,721				1,177,553				1,166,875
TOTAL SHAREHOLDERS' EQUITY			139,608				139,825				140,290				142,543				144,306
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY		$	1,357,215			$	1,361,686			$	1,329,011			$	1,320,096			$	1,311,181
Book value per share		$	7.59			$	7.56			$	7.56			$	7.61			$	7.67
Other Data:
30- 89 day delinquent loans		$	5,882			$	1,744			$	1,973			$	3,821			$	4,254
Nonperforming loans			7,347				8,013				8,340				8,830				8,867
Nonperforming loans as a percentage of total loans			0.91	%			1.06	%			1.14	%			1.22	%			1.23	%
Nonperforming assets as a percentage of total assets			0.54	%			0.59	%			0.63	%			0.67	%			0.68	%
Allowance for loan losses as a percentage of nonperforming loans			113.95	%			103.52	%			96.34	%			90.01	%			86.78	%
Allowance for loan losses as a percentage of total loans			1.04	%			1.09	%			1.10	%			1.10	%			1.07	%

 

 

 

 

The following tables set forth the information relating to our average balances and net interest income for the three months ended September 30, 2015, June 30, 2015, and September 30, 2014, and the nine months ended September 30, 2015 and 2014, and reflect the average yield on interest-earning assets and average cost of interest-bearing liabilities for the periods indicated.

 

		Three Months Ended
		September 30, 2015												June 30, 2015												September 30, 2014
		Average								Avg Yield/				Average								Avg Yield/				Average								Avg Yield/
		Balance				Interest				Cost				Balance				Interest				Cost				Balance				Interest				Cost
		(Dollars in thousands)
ASSETS:
Interest-earning assets
Loans(1)(2)		$	788,637			$	7,879				4.00	%		$	742,475			$	7,401				3.99	%		$	703,736			$	7,170				4.08	%
Securities(2)			481,360				3,068				2.55				498,093				3,135				2.52				492,948				3,245				2.63
Other investments - at cost			16,963				126				2.97				16,460				69				1.68				16,129				59				1.46
Short-term investments(3)			7,704				2				0.10				11,231				5				0.18				12,399				2				0.06
Total interest-earning assets			1,294,664				11,075				3.42				1,268,259				10,610				3.35				1,225,212				10,476				3.42
Total noninterest-earning assets			76,614												80,303												72,984
Total assets		$	1,371,278											$	1,348,562											$	1,298,196
LIABILITIES AND EQUITY:
Interest-bearing liabilities
Interest-bearing accounts		$	34,725				20				0.23			$	35,954				20				0.22			$	38,889				22				0.23
Savings accounts			75,943				20				0.11				75,669				20				0.11				78,860				20				0.10
Money market accounts			239,112				198				0.33				236,322				208				0.35				227,554				225				0.40
Time certificates of deposit			398,238				1,176				1.18				390,616				1,132				1.16				342,281				1,031				1.20
Total interest-bearing deposits			748,018				1,414								738,561				1,380								687,584				1,298
Short-term borrowings and long-term debt			320,712				1,400				1.75				307,892				1,335				1.73				318,357				1,211				1.52
Interest-bearing liabilities			1,068,730				2,814				1.05				1,046,453				2,715				1.04				1,005,941				2,509				1.00
Noninterest-bearing deposits			149,626												143,323												133,817
Other noninterest-bearing liabilities			16,755												18,302												13,139
Total noninterest-bearing liabilities			166,381												161,625												146,956
Total liabilities			1,235,111												1,208,078												1,152,897
Total equity			136,167												140,484												145,299
Total liabilities and equity		$	1,371,278											$	1,348,562											$	1,298,196
Less: Tax-equivalent adjustment(2)							(101	)											(116	)											(133	)
Net interest and dividend income						$	8,160											$	7,779											$	7,834
Net interest rate spread(4)											2.37	%											2.31	%											2.42	%
Net interest margin(5)											2.53	%											2.50	%											2.58	%
Ratio of average interest-earning assets to average interest-bearing liabilities											121.14												121.20												121.80

 

 

 

		Nine Months Ended September 30,
		2015												2014
		Average								Avg Yield/				Average								Avg Yield/
		Balance				Interest				Cost				Balance				Interest				Cost
		(Dollars in thousands)
ASSETS:
Interest-earning assets
Loans(1)(2)		$	753,077			$	22,542				3.99	%		$	670,102			$	20,622				4.10	%
Securities(2)			487,122				9,177				2.51				507,906				10,107				2.65
Other investments - at cost			16,555				263				2.12				16,730				187				1.49
Short-term investments(3)			11,531				13				0.15				15,107				11				0.10
Total interest-earning assets			1,268,285				31,995				3.36				1,209,845				30,927				3.41
Total noninterest-earning assets			78,288												72,676
Total assets		$	1,346,573											$	1,282,521
LIABILITIES AND EQUITY:
Interest-bearing liabilities
Interest-bearing checking		$	36,240				61				0.22			$	41,178				77				0.25
Savings accounts			75,780				59				0.10				80,150				61				0.10
Money market accounts			236,305				627				0.35				217,283				625				0.38
Time certificates of deposit			385,881				3,388				1.17				341,256				3,114				1.22
Total interest-bearing deposits			734,206				4,135								679,867				3,877
Short-term borrowings and long-term debt			312,373				3,992				1.70				311,954				3,452				1.48
Interest-bearing liabilities			1,046,579				8,127				1.04				991,821				7,329				0.99
Noninterest-bearing deposits			142,671												131,107
Other noninterest-bearing liabilities			17,797												10,981
Total noninterest-bearing liabilities			160,468												142,088
Total liabilities			1,207,047												1,133,909
Total equity			139,526												148,612
Total liabilities and equity		$	1,346,573											$	1,282,521
Less: Tax-equivalent adjustment(2)							(339	)											(408	)
Net interest and dividend income						$	23,529											$	23,190
Net interest rate spread(4)											2.32	%											2.42	%
Net interest margin(5)											2.52	%											2.61	%
Ratio of average interest-earning assets to average interest-bearing liabilities							121.18												121.98

 

(1)

Loans, including non-accrual loans, are net of deferred loan origination costs and unadvanced funds.

(2)

Securities, loan income and net interest income are presented on a tax-equivalent basis using a tax rate of 34%. The tax-equivalent adjustment is deducted from tax-equivalent net interest and dividend income to agree to the amount reported on the statements of income.

(3)

Short-term investments include federal funds sold.

(4)

Net interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average cost of interest-bearing liabilities.

(5)

Net interest margin represents tax-equivalent net interest and dividend income as a percentage of average interest-earning assets.

 

 

---

Serious News for Serious Traders! Try StreetInsider.com Premium Free!

---

You May Also Be Interested In

• Adams Natural Resources Fund Declares Distribution and Announces First Quarter Performance
• Prairie Donair Signs Area Developer AB
• Builders Capital Mortgage Corp. Releases Annual Financial Statements; Reports Strong Results for 2023: Annual Income up 21.6% Year-Over-Year