The Board of Directors of NewMil Bancorp, Inc. (NASDAQ/GS:NMIL)
today announced results of its second quarter ended June 30, 2006.
Diluted earnings were $0.45 for the second quarter ended June 30,
2006 versus $0.53 for the second quarter ended June 30, 2005. Net
income for the quarter was $1.9 million versus $2.2 million for
second quarter of 2005. NewMil's results for the second quarter of
2006 reflect a change in investment portfolio strategy in
preparation for the previously announced merger with Webster
Financial Corporation ("Webster"), the absence of any Federal Home
Loan Bank of Boston ("FHLBB") dividend income for the quarter, the
challenging interest rate environment affecting the entire banking
industry, and from charges incurred in connection with the pending
merger with Webster. Merger expenses amounted to $369,000, or $0.06
per share, net of taxes, for the period. Positively impacting the
period was a gain of $364,000 arising from the termination of post
retirement health care and life insurance benefits. During the
quarter the FHLBB changed its policy for dividend declarations such
that the dividend based on net income for the second quarter of
2006 is not expected to be declared until the third quarter of
2006. In the first quarter NewMil recognized dividend income of
$132,000, or $0.03 per share, net of taxes, based on average FHLBB
shares outstanding of $10.2 million for the quarter. NewMil had
average FHLBB shares of $10.6 million for the second quarter. Net
interest income was $6.1 million for the quarter as compared with
$6.3 million in the first quarter of 2006 and $6.6 million in the
second quarter of 2005. Taxable equivalent net interest income was
$6.3 million for the quarter compared with $6.6 million in the
first quarter of 2006 and $6.8 million in the second quarter of
2005. The net interest margin was 3.08% for the quarter compared to
3.19% in the first quarter of 2006 and 3.61% in the second quarter
of 2005. The compression in net interest margin was mostly due to
the rise in short term rates and the prolonged flatness of the
yield curve. NewMil has sought to offset this effect by growing
earning assets. During the quarter average earning assets were up
$15.1 million over the fourth quarter of 2005 and up $72.3 million
over the second quarter of 2005. Non-interest income was $0.9
million for the quarter, as compared with $1.0 million for the
second quarter of 2005 which included a gain of $65,000 from the
sale of OREO. Non-interest expense was $4.4 million for the quarter
and was substantially unchanged when compared with the prior year
period. During the quarter NewMil incurred $369,000 of expenses
related to the merger with Webster Bank. The efficiency ratio was
61.5% for the second quarter of 2006. NewMil's gross loans
increased $17.1 million during the first six months to $514.8
million at June 30, 2006. Asset quality remains strong, as
evidenced by nonperforming assets at 18 basis points of total
assets at June 30, 2006. Deposits grew $6.5 million during the
period to $622.5 million at June 30, 2006. At June 30, 2006, book
value and tangible book value per common share were $12.80 and
$10.84, respectively, and tier 1 leverage and total risk-based
capital ratios were 7.02% and 13.71%, respectively. Return on
average shareholders' equity was 14.4% for the second quarter of
2006 versus 16.3% for the second quarter of 2005. Francis J. Wiatr,
NewMil's Chairman, President and CEO noted, "We have made
substantial progress during the quarter with our transition plans
for the upcoming merger (subject to regulatory and shareholder
approval) with Webster, while at the same time continuing to grow
our core franchise as evidenced by the increase in both loans and
deposits. Our commercial lending business was solid during the
quarter and we continued to build market share with this important
segment of our business. Recently released statistics by the U.S.
Small Business Administration rank NewMil Bank as one of the top
originators in the State of Connecticut for 504 loans. "To support
the company's future growth plan in the greater Danbury area, we
opened our drive-up ATM in the "Reserve" (located at One Reserve
Road, Danbury, Connecticut), which will be the future home of a
branch office as development there proceeds." The Board of
Directors also announced a quarterly dividend of $0.22 per common
share, payable on August 15, 2006 to shareholders of record on July
28, 2006. NewMil Bancorp is the parent company of NewMil Bank,
which has served western Connecticut since 1858, and operates 20
full-service banking offices. Please also refer to Webster
Financial Corporation's (NYSE: WBS) press release of April 25,
2006, which announced that the Board of Directors of NewMil has
entered into a definitive agreement with Webster for Webster to
acquire NewMil. Financial highlights are attached. Statements in
this news release concerning future results, performance,
expectations or intentions are forward-looking statements. Actual
results, performance or developments may differ materially from
forward-looking statements as a result of known or unknown risks,
uncertainties, and other factors, including those identified from
time to time in the Company's other filings with the Securities and
Exchange Commission, press releases and other communications. -0-
*T NewMil Bancorp, Inc SELECTED CONSOLIDATED FINANCIAL DATA (in
thousands except ratios and per share amounts) (unaudited) Three
month Six month period ended period ended June 30 June 30 STATEMENT
OF INCOME 2006 2005 2006 2005 ---- ---- ---- ------ Interest and
dividend income $11,464 $9,836 $22,720 $19,115 Interest expense
5,368 3,285 10,340 6,004 Net interest income 6,096 6,551 12,380
13,111 Provision for loan losses - - - - Non-interest income
Service fees on deposit accounts 695 741 1,351 1,443 Gains on sales
of mortgage loans 47 39 58 91 Gain on sale of OREO - 65 200 65
Other non-interest income 206 196 404 389 Total non-interest income
948 1,041 2,013 1,988 Non-interest expense Compensation 2,059 2,441
4,478 4,753 Occupancy and equipment 842 783 1,633 1,570 Postage and
telecommunication 162 145 307 278 Professional services, collection
& OREO 188 188 370 414 Printing and office supplies 93 113 190
217 Marketing 72 81 139 148 Service bureau EDP 96 97 188 190
Amortization of intangible assets 24 36 49 73 Merger Expense 369 -
369 - Other 511 536 1,000 1,032 Total non-interest expense 4,416
4,420 8,723 8,675 Income before income taxes 2,762 3,172 5,804
6,424 Provision for income taxes 735 923 1,559 1,940 Net income $
1,893 $ 2,249 $ 4,111 $ 4,484 Per common share Diluted earnings $
0.45 $ 0.53 $ 0.99 $ 1.04 Basic earnings 0.46 0.53 1.01 1.07 Cash
dividends 0.22 0.20 0.44 0.40 Statistical data Net interest margin,
(fully tax equivalent) 3.08% 3.61% 3.13% 3.68% Efficiency ratio
62.69 58.22 60.61 57.45 Return on average assets 0.88 1.13 0.95
1.16 Return on average common shareholders' equity 14.38 16.34
15.60 16.21 Weighted average equivalent common shares outstanding,
diluted 4,177 4,275 4,163 4,298 NewMil Bancorp, Inc. SELECTED
CONSOLIDATED FINANCIAL DATA (in thousands except ratios and per
share amounts) June 30, June 30, December 31, 2006 2005 2005 ----
---- ---- Unaudited Unaudited FINANCIAL CONDITION Total assets
$864,060 $812,312 $872,991 Loans, net 509,895 490,255 492,763
Allowance for loan losses 4,900 4,981 4,949 Securities 289,256
264,162 322,343 Cash and cash equivalents 27,036 24,091 22,564
Intangible assets 8,044 8,167 8,093 Deposits 622,514 603,577
615,995 Federal Home Loan Bank advances 165,988 128,836 174,266
Repurchase agreements 10,265 12,416 15,491 Long term debt 9,896
9,836 9,866 Shareholders' equity 52,494 54,541 53,016
Non-performing assets 1,571 280 1,590 Deposits Demand (non-interest
bearing) $ 79,677 $ 76,549 $ 77,383 NOW accounts 77,036 79,316
82,400 Money market 114,505 146,571 146,007 Savings and other
95,266 84,903 88,142 Certificates of deposit 256,030 216,238
222,063 Total deposits 622,514 603,577 615,995 Per common share
Book value $ 12.80 $ 13.18 $ 12.98 Tangible book value 10.84 11.21
10.99 Statistical data Non-performing assets to total assets 0.18%
0.03% 0.18% Allowance for loan losses to total loans 0.95 1.01 0.99
Allowance for loan losses to non-performing loans 311.90 1778.93
311.26 Common shareholders' equity to assets 6.08 6.71 6.07
Tangible common shareholders' equity to assets 5.14 5.71 5.15 Tier
1 leverage capital 7.02 7.14 6.81 Total risk-based capital 13.71
13.12 13.09 Common shares outstanding, net (period end) 4,101 4,138
4,086 *T
Newmil Bancorp (NASDAQ:NMIL)
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Newmil Bancorp (NASDAQ:NMIL)
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