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New England Bancshares, Inc. Reports Second Quarter Net Income of $849,000, a $548,000 Improvement, and a $1.4 Million Increase

^{Published on 2010-10-20 06:10:28 - Market Wire}
 

ENFIELD, Conn.--([ BUSINESS WIRE ])--New England Bancshares, Inc. (the aCompanya) (NASDAQ GM: NEBS), the holding company for New England Bank, today announced net income for the quarter ended September 30, 2010 of $849,000, or $0.14 per diluted share as compared to $301,000, or $0.05 per diluted share, for the quarter ended September 30, 2009. For the six months ended September 30, 2010 the Company reported net income of $1.5 million, or $0.26 per diluted share, as compared to $120,000, or $0.02 per diluted share, for the same period last year. The increases were primarily attributable to higher net interest income and higher noninterest income for the current year periods.

Presidenta™s Comments:

President and CEO David J. Oa™Connor commented, aThe Companya™s core operating earnings has remained strong as evidenced by our increasing net interest income and strong net interest margin. However, economic uncertainty has slowed the growth in our loan portfolio, as loan demand by credit worthy borrowers continues to be low. The Companya™s focus continues to be increasing earnings per share and book value while serving the needs of our customers and the local community.a

Results a" Second Quarter, September 30, 2010:

• Net interest income was $5.5 million for the three months ended September 30, 2010, an increase of $841,000, or 18.0%, compared to the same quarter last year. The Company has seen expansion in its net interest margin which rose to 3.52% for the quarter ended September 30, 2010 from 3.00% for the quarter ended September 30, 2009.
• Net loans decreased $1.5 million to $514.1 million at September 30, 2010. During the quarter ended September 30, 2010, the Company sold $5.7 million of long-term fixed rate residential loans in part to manage interest rate risk and recorded a gain on sale of loans of $217,000. If rates remain low it is anticipated that the Company will continue to sell fixed rate residential mortgages. At September 30, 2010 the Company had $1.8 million of loans held for sale.
• Non-interest expense for the quarter ended September 30, 2010 was $4.6 million, or $364,000 higher than the previous year period. The primary cause of the increase is the $282,000 increase in other real estate owned expense.
• Non-accruing loans were $10.6 million at September 30, 2010 versus $9.0 million at March 31, 2010.
• The Company has ample liquidity, ending the current quarter with $60.2 million in cash and cash equivalents. Management will seek to prudently deploy these funds into loans and securities.
• The Bank is well capitalized, as defined by regulatory agencies, with a Tier 1 capital ratio of 7.32%.

Results a" Six Months Ended September 30, 2010:

• For the six months ended September 30, 2010 assets increased $15.9 million, or 2.4% and deposits increased $16.6 million, or 3.2%. The loan portfolio decreased $1.5 million, or 0.3%, as the Company started selling its long-term fixed rate residential mortgages originated during the period into the secondary market. This decision was made to reduce the Companya™s interest rate risk associated with holding 30 year residential loans at historically low rates.
• Net interest income was $11.0 million, an increase of $2.5 million, or 29.0%, compared to the six months ended September 30, 2009.
• The provision for loan losses amounted to $1.3 million and $1.4 million for the six months ended September 30, 2010 and 2009, respectively. For the current year period the Company recorded $519,000 of charge-offs and the ratio of the allowance for loan losses to total loans increased to 1.04% at September 30, 2010.
• Operating expenses totaled $8.9 million for the six months ended September 30, 2010, a $417,000 increase from the same period last year. Core operating expenses remained relatively flat however the Company had a $360,000 increase in other real estate owned expense.

Statements contained in this news release, which are not historical facts, are forward-looking statements as that term is defined in the Private Securities Litigation reform Act of 1995. Such forward-looking statements are subject to risks and uncertainties, which could cause actual results to differ materially from those currently anticipated due to a number of factors, which include, but are not limited to, factors discussed in documents filed by the Company with the Securities and Exchange Commission from time to time. Subject to applicable laws and regulation, the Company does not undertake a" and specifically disclaims any obligation a" to publicly release the results of any revisions which 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.

New England Bancshares, Inc. is headquartered in Enfield, Connecticut, and operates New England Bank with fifteen banking centers servicing the communities of Bristol, Cheshire, East Windsor, Ellington, Enfield, Manchester, Plymouth, Southington, Suffield, Wallingford and Windsor Locks. For more information regarding New England Banka™s products and services, please visit [ www.nebankct.com ].