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Rockville Financial, Inc. Announces Record Earnings and Dividend Increase



Rockville Financial, Inc. Announces Record Earnings and Dividend Increase

ROCKVILLE, Conn., Oct. 25, 2012 (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 $4.7 million,
or $0.17 per diluted share, for the quarter ended September 30, 2012.

"I am pleased to announce that Rockville Financial, Inc. reported its highest
quarterly earnings in the Company's 154 year history, and its fourth
consecutive quarter of record core earnings. The quarter's results were in
part driven by the recognition of $2.5 million of gains on sales of loans due
to the expansion of our mortgage banking business. This is a 101% increase
over our next highest quarter. Asset quality remains strong and Rockville
continues to enjoy organic growth," stated William (Bill) H. W. Crawford, IV,
President and Chief Executive Officer (CEO) of Rockville Financial, Inc. and
Rockville Bank. "The Company's organic growth strategy is positively reflected
in its increase in deposit market share. During the twelve months ending June
30, 2012, Rockville moved up in rank in the State of Connecticut to 12^th
position from 14^th position and increased market share in all but one of its
branch locations. I would like to personally thank our employees for their
continued focus on superior customer service."

Third Quarter Highlights (revenue and expense comparisons are to prior year
third quarter results, unless noted otherwise)

  * 58.3% increase in operating earnings on a linked quarter basis, 14.3%
    increase in operating earnings year-over-year.
  * 12.7% growth in operating revenue on a linked quarter basis, 22.8% growth
    in operating revenue year-over-year.
  * 5.0% increase in operating expense on a linked quarter basis, 36.9%
    increase in operating expense year-over-year.
  * 240.6% increase in residential mortgage production year-over-year to $82.8
    million in the third quarter of 2012 from $24.3 million in the prior year,
    and a 3.5% increase in residential mortgage production from $80.0 million
    in the linked quarter.
  * 1.0% linked quarter net commercial loan growth, after approximately $10
    million of commercial loan payoffs in the third quarter.
  * 10.4% net interest income growth due to average loan growth and decreased
    funding costs.
  * 3.80% tax equivalent net interest margin, compared to 3.70% in the prior
    year and 3.87% in the linked quarter.
  * 0.79% cost of interest-bearing liabilities, decreased 44 basis points from
    prior year and 6 basis points from the linked quarter.
  * 0.68% total cost of funds, decreased 40 basis points from prior year and 5
    basis points from the linked quarter.
  * Efficiency ratio increased to 67.25% from 60.29% in the prior year and
    decreased from 72.14% in the linked quarter.
  * 3.00% non-interest expense as a percentage of average assets, increased
    from 2.44% in the prior year and increased from 2.93% in the linked
    quarter.
  * 0.00% net loan charge-offs to average loans for the quarter, 0.04% for the
    year-to-date.

Operating Results

The Company reported third quarter 2012 net income and core operating earnings
of $4.7 million, or $0.17 per diluted share, compared to the linked quarter
net income of $2.9 million, or $0.11 per diluted share. Core operating
earnings for the second quarter of 2012 were $3.8 million (Non-GAAP, see
attached table), or $0.14 per diluted share excluding the accelerated stock
award grant expense. For the third quarter 2011, the Company recorded net
income and core operating earnings of $4.1 million, or $0.14 per diluted
share. This 14.3% operating earnings increase year-over-year, was attributable
to strong mortgage banking revenue as a result of especially favorable market
spreads and the expansion of the residential mortgage business program, and
continued organic growth in both commercial loans and low cost core deposits
during the third quarter 2012. Operating revenue of $21.6 million in the third
quarter 2012 was an increase from $19.2 million in the second quarter and from
$17.6 million in the prior year period.

Net Interest Income Increases

Net interest income of $17.0 million for the third quarter of 2012 increased
by $73,000, or 0.4%, from $16.9 million for the second quarter of 2012 and by
$1.6 million, or 10.4%, from the comparable 2011 period. This increase is due
to both the growth in average earning assets and the continued reduction in
the cost of funds. The tax equivalent net interest margin for the third
quarter of 2012 was 3.80%, compared to 3.87% for the second quarter of 2012
and 3.70% for the comparable period in 2011.

The Company's tax equivalent yield on interest-earning assets decreased 11
basis points during the quarter ending September 30, 2012 to 4.39% from 4.50%
during the second quarter 2012, and decreased by 22 basis points from 4.61%
during the third quarter of 2011. The reduction in the average yield during
the third quarter from both a linked quarter and year-over-year basis, was
primarily attributable to the impact that the extended low interest rate
environment has had on the yields of new loan originations and adjustable rate
mortgage repricings. The tax equivalent yield on investment securities has
benefited from the inclusion of $67.7 million of municipal bonds during the
year-to-date 2012.

The cost of interest-bearing deposits decreased across all comparable periods
as a result of the Company's continued focus on growing low cost core deposits
and on reducing the cost of funds as well as the continued migration out of
time deposits to other interest bearing deposit types. The cost of
interest-bearing deposits decreased 5 basis points to 0.69% in the third
quarter of 2012 from 0.74% in the second quarter of 2012, and decreased by 34
basis points from 1.03% in the comparable 2011 period. The cost of
interest-bearing liabilities decreased 6 basis points to 0.79% in the third
quarter of 2012 from 0.85% in the second quarter of 2012, and decreased by 44
basis points from 1.23% during the third quarter of 2011.

Provision For Loan Losses Increases

The provision for loan losses increased $39,000, or 5.2%, to $793,000 for the
three months ended September 30, 2012 compared to $754,000 for the comparable
2011 period due to growth in the loan portfolio during this time period. Net
charge-offs for the third quarter were $17,000, or 0.00% of average loans
outstanding, a decrease from $555,000, or 0.04% of average loans outstanding,
in the prior year period. Provision expense continues to be assessed in
correlation with the Company's loan growth and risk profile.

Non-Interest Income

Non-interest income totaled $4.6 million for the third quarter 2012, an
increase of $2.4 million, or 104.3%, on a linked quarter basis and up $2.4
million, or 108.6%, from the third quarter 2011. The linked quarter and
year-over-year change in non-interest income is primarily attributable to the
varying levels of net gains from sales of loans which totaled $2.5 million for
the third quarter 2012, $44,000 in the second quarter 2012 and $405,000 in the
third quarter 2011. The Company sold residential mortgage loans totaling $63.6
million in the third quarter 2012 compared to $1.0 million in the second
quarter 2012 due to timing of the application process. In the third quarter
2011 the Company sold $20.2 million of residential mortgage loans. Loans held
for sale totaled $5.8 million and $2.1 million at September 30, 2012 and 2011,
respectively.

As the results reflect, the advantageous market spreads and the expansion of
the Company's mortgage banking business in 2012 were significant drivers to
its financial performance in the third quarter. Over the course of the year,
the Company hired twelve mortgage loan officers and sixteen mortgage
underwriters and processors which contributed to both the significant increase
in production and the mix of that production. The Company continues to evolve
this business and develop efficiencies. During the third quarter 2012 the
Company originated 413 loans totaling $82.8 million, an increase of 222.7% and
240.6%, respectively, from 128 loans totaling $24.3 million in the third
quarter 2011. Additionally, the inclusion of mortgage loan officers in the
business model allows the Company to cultivate purchase mortgage production
with local realtors and has increased the volume of purchase mortgages to
$32.4 million in the third quarter 2012 as compared to $8.7 million in the
prior year period, a 272.4% increase in that production source.

Service charges and fee income totaled $1.6 million for the third quarter
2012, an increase of $47,000, or 3.1%, on a linked quarter basis and an
increase of $64,000, or 4.2%, from the same period in the prior year. Other
income totaled $301,000 for the third quarter 2012, a decrease of $258,000, or
46.2%, on a linked quarter basis and an increase of $89,000, or 42.0%, from
the same period in the prior year.

Non-Interest Expense

Non-interest expense as a percentage of average assets increased to 3.00% in
the third quarter of 2012 from 2.93% in the second quarter of 2012, and
increased from 2.44% in the third quarter 2011.

Non-interest expense totaled $14.5 million for the third quarter of 2012, up
$695,000, or 5.0%, on a linked quarter basis and up $3.9 million, or 36.9%,
from the third quarter 2011. The linked quarter change in non-interest expense
is primarily attributable to a $604,000, or 31.9%, increase in other expense
as a result of a $275,000 increase in directors stock award expense related to
the June 2012 restricted stock and stock option grant, a $244,000 increase in
other public company expenses and a $179,000 increase in electronic banking
operational losses related largely to debit card losses. The debit card losses
are the result of charge backs at large independent third-party servicers used
by merchants for standard processing of customer debit card transactions.

On a year-over-year basis, the $3.9 million increase in non-interest expense
is primarily attributable to a $2.3 million, or 38.0%, increase in salaries
and employee benefits costs and a $1.0 million, or 70.5%, increase in other
expense. The increase in salaries and employee benefits costs is attributable
to the human capital infrastructure investment, significantly in 2011 and
continued to a lesser extent in 2012, and is also inclusive of a $455,000
increase in officer stock award expense related to the June 2012 restricted
stock and stock option grant and a $236,000 increase in pension expense.
Full-time equivalent employees increased to 306 at September 30, 2012 from 261
at September 30, 2011. The increase in other expense is primarily due to a
$303,000 increase in directors stock award expense related to the June 2012
restricted stock and stock option grant, a $188,000 increase in other public
company expenses, a $162,000 increase in electronic banking operational losses
related largely to debit card losses, and a $153,000 increase in telephone
expense as a result of a new system installation.

Organic Loan and Deposit Growth Continues;
Securities, BOLI and Borrowings Increase

Rockville Financial's total assets increased $199.3 million, or 11.4%, to
$1.95 billion at September 30, 2012 from December 31, 2011. During the nine
month period, net loans grew by $73.2 million, or 5.0%, with an increase of
$47.0 million, or 7.9%, in the commercial real estate portfolio, an increase
of $26.6 million, or 18.5%, in the commercial business portfolio and an
increase of $2.9 million, or 0.4%, in the residential mortgage portfolio.

The available for sale securities portfolio increased $94.7 million, or 62.6%,
to $246.0 million at September 30, 2012 from $151.2 million at December 31,
2011. The increase includes the Company's net purchase of $67.7 million of AA
or better rated municipal bonds, $11.8 million of A and AA rated floating rate
corporate bonds, $9.2 million of government sponsored multi-family
mortgage-backed bonds and $8.0 million of variable rate investment grade
collateralized loan obligations. The municipal bonds represent a wide
geographic diversification and consist of both general obligation and revenue
bonds.

Bank Owned Life Insurance ("BOLI") increased $26.8 million during the nine
months ended September 30, 2012, primarily due to the purchase of $25.0
million of new life insurance policies during the first quarter. As a result
of both the BOLI and municipal bond purchases during the year-to-date, the
Company's effective tax rate has decreased to 25.6% in the third quarter 2012
from 34.5% during the prior year period.

During the three months ended September 30, 2012, the Company entered into its
second interest rate swap to hedge the variable cash flows associated with a
forecasted adjustable rate wholesale funding. The total notional value of two
outstanding interest rate derivatives was $75 million, and both were
designated as cash flow hedges of interest rate risk.

Deposits totaled $1.48 billion at September 30, 2012 and increased $150.4
million, or 11.3% from $1.33 billion at December 31, 2011, reflecting a $17.1
million, or 8.3%, increase in non-interest bearing deposits and a $133.3
million, or 11.9%, increase in interest bearing deposits. The increase in
interest bearing deposits included the purchase of $41.7 million of brokered
time deposits. The balance was comprised of $20.0 million and $21.7 million of
six month and 4 year callable time deposits at the Company's option,
respectively. The weighted average cost of brokered deposits was 0.64% at
September 30, 2012, with balances representing 2.8% of total deposits. Federal
Home Loan Bank of Boston advances increased $53.0 million, or 80.4%,
year-to-date to $118.9 million at September 30, 2012 due to the addition of
advances with terms of three months or less with a cost ranging from 0.20% to
0.27%.

Average net loans increased $41.5 million to $1.540 billion for the quarter
ended September 30, 2012 from $1.499 billion for the quarter ended June 30,
2012. Average available for sale securities increased $14.4 million to $233.1
million for the quarter ended September 30, 2012 from $218.7 million for the
quarter ended June 30, 2012, while average other earning assets decreased
$11.9 million to $23.4 million during the same time period.

Average total deposits increased $35.7 million to $1.469 billion for the
quarter ended September 30, 2012 from $1.433 billion for the quarter ended
June 30, 2012. Average core deposits increased $32.2 million to $934.0 million
for the quarter ended September 30, 2012 from $901.8 million for the quarter
ended June 30, 2012, while average time deposits decreased $5.5 million during
the same time period.

Asset Quality

Non-performing assets increased $1.0 million to $16.6 million at September 30,
2012 from $15.6 million at December 31, 2011. The ratio of non-performing
assets to total assets decreased 4 basis points to 0.85% at September 30, 2012
from 0.89% at December 31, 2011. Loans on non-accrual increased $1.4 million
to $14.0 million at September 30, 2012 from $12.6 million at December 31,
2011. Included in non-accrual loans are non-accruing troubled debt
restructurings. Non-accruing troubled debt restructurings (TDR) decreased
$402,000 to $3.0 million at September 30, 2012 from $3.4 million at December
31, 2011. The ratio of non-performing loans to total loans increased 5 basis
points to 0.91% at September 30, 2012 from 0.86% at December 31, 2011. At
September 30, 2012, the allowance for loan losses as a percentage of
non-performing loans and of total loans outstanding was 128.93% and 1.17%,
compared to 127.08% and 1.09% at December 31, 2011, respectively.

Dividend Increase

The Board of Directors voted to increase the cash dividend on the Company's
common stock, declaring a dividend of $0.10 per share to shareholders of
record at the close of business on November 5, 2012 and payable on November
13, 2012. The dividend is being increased by 11% from the prior dividend of
$0.09 per share, and has increased by 54% since the Company's second-step
conversion in May 2011. This dividend equates to a 3.37% annualized yield
based on the $11.88 average closing price of the Company's common stock in the
third quarter of 2012. The Company has paid dividends for 26 consecutive
quarters. The dividend payout ratio for the quarter ended September 30, 2012
was 55%. Of note, 49% of the Company's certificate holders have committed to
purchasing additional shares of the Company's stock on a quarterly basis since
implementation of its dividend reinvestment program in April 2012.

Stock Repurchase Program

In accordance with State of Connecticut Department of Banking mutual
conversion banking regulations the Company was eligible to adopt a stock
repurchase program at the one year anniversary of its March 3, 2011 stock
conversion. As such, the Company's Board of Directors approved a buyback plan
on March 2, 2012 and commenced the plan upon receiving satisfactory response
from the Company's regulator, the Federal Reserve Bank of Boston, on March 13,
2012. Under this plan, the Company may repurchase up to 2,951,250 shares, or
10% of the outstanding shares at the time the plan was approved. As of
September 30, 2012, the Company had repurchased 1,356,379 shares at an average
cost of $11.61 per share. The average closing price of the Company's common
stock over this time period was $11.69 per share.

The Company repurchased 28,000 shares during the quarter ended September 30,
2012, at an average price of $11.72, which was 104% of the Company's tangible
book value of $11.24. The closing price on the first business day of the
quarter was $11.60, or 103% of the Company's tangible book value, while the
closing price on the last business day of the quarter was $12.27, or 109% of
the Company's tangible book value. The average closing price during the third
quarter was $11.88, or 106% of the Company's tangible book value.

Management Comments

"Rockville reported record quarterly earnings and has made significant
progress in decreasing funding costs, accelerating commercial loan growth and
mortgage loan production, protecting asset quality, and efficiently returning
capital to shareholders via increased dividends and our 10% stock buyback
program," stated William (Bill) H. W. Crawford, IV, President and Chief
Executive Officer (CEO). "Our total shareholder return year-over-year is 33.4%
compared to the SNL thrift index of 30.0%. At Rockville, we remain focused on
creating prosperity for our customers and communities and wealth for our
shareholders."

About Rockville Financial, Inc.

Rockville Financial, Inc. is the parent of Rockville Bank, which is a
21-branch community bank serving Tolland, Hartford and New London counties in
Connecticut. Rockville Bank has established a New Haven County Commercial
Banking Office in Hamden, Conn., and will be opening a full service branch in
West Hartford, Conn., in the coming months. For more information about
Rockville Bank's services and products, call (860) 291-3600 or visit
www.rockvillebank.com. For more information about Rockville Financial, Inc.,
visit www.rockvillefinancialinc.com.

The Rockville Financial, Inc. logo is available at
http://www.globenewswire.com/newsroom/prs/?pkgid=10954

Investor Call

Rockville Financial, Inc. is hosting a conference call on Friday, October 26,
2012 at 10:00 a.m. Eastern Time (ET) to discuss the Company's third quarter
financial results. Those wishing to participate in the call may dial toll-free
1-877-317-6789. A replay of the call will be available on October 26, 2012 by
dialing 1-877-344-7529, Conference ID # 10019061, and will be available until
9:00 a.m. ET on November 12, 2012.

Forward Looking Statements

This press release may contain certain forward-looking statements about the
Company. Forward-looking statements include statements regarding anticipated
future events and can be identified by the fact that they do not relate
strictly to historical or current facts. They often include words such as
"believe," "expect," "anticipate," "estimate," and "intend" or future or
conditional verbs such as "will," "would," "should," "could," or "may."
Forward-looking statements, by their nature, are subject to risks and
uncertainties. Certain factors that could cause actual results to differ
materially from expected results include increased competitive pressures,
changes in the interest rate environment, general economic conditions or
conditions within the securities markets, and legislative and regulatory
changes that could adversely affect the business in which the Company and its
subsidiaries are engaged.

Rockville Financial, Inc. and Subsidiaries
Consolidated Statements of Income
(In Thousands, Except Share Data)
(Unaudited)
                                                                      
                                      For the Three Months For the Nine Months
                                      Ended September 30,  Ended September 30,
                                      2012       2011      2012      2011
INTEREST AND DIVIDEND INCOME:                                         
Loans                                  $ 17,883   $ 17,828  $ 53,377  $ 52,844
Securities-interest                   1,733      1,244     4,742     3,579
Securities-dividends                  42         45        127       324
Interest-bearing deposits             13         8         50        39
Total interest and dividend income    19,671     19,125    58,296    56,786
INTEREST EXPENSE:                                                     
Deposits                              2,149      2,862     6,646     8,670
Borrowed funds                        558        899       1,669     5,587
Total interest expense                2,707      3,761     8,315     14,257
Net interest income                   16,964     15,364    49,981    42,529
PROVISION FOR LOAN LOSSES             793        754       2,678     2,260
Net interest income after             16,171     14,610    47,303    40,269
provision for loan losses
NON-INTEREST INCOME:                                                  
Total other-than-temporary
impairment losses on equity            –          –         –        (29)
securities
Service charges and fees              1,585      1,521     4,949     4,799
Net gain from sales of securities     214        74        335       6,275
Net gain from sales of loans          2,514      405       3,083     464
Other income                          301        212       1,176     210
Total non-interest income             4,614      2,212     9,543     11,719
NON-INTEREST EXPENSE:                                                 
Salaries and employee benefits        8,314      6,023     23,905    18,307
Service bureau fees                   946        1,110     3,234     3,297
Occupancy and equipment               1,254      1,097     3,355     3,363
Professional fees                     1,049      725       2,595     1,907
Marketing and promotions              70         202       287       967
FDIC assessments                      268        (29)      774       991
Other real estate owned               110        2         444       76
Contribution to Rockville Bank         –          –         –        5,043
Foundation, Inc.
Loss on extinguishment of debt         –          –         –        8,914
Other                                 2,499      1,466     6,074     4,383
Total non-interest expense            14,510     10,596    40,668    47,248
INCOME BEFORE INCOME TAXES            6,275      6,226     16,178    4,740
Income tax provision                  1,607      2,143     4,706     1,636
NET INCOME                             $ 4,668    $ 4,083   $ 11,472  $ 3,104

 
 
Rockville Financial, Inc. and Subsidiaries
Consolidated Statements of Income - Concluded
(In Thousands, Except Share Data)
(Unaudited)
                                                                     
                                   For the Three Months  For the Nine Months
                                   Ended September 30,   Ended September 30,
                                   2012       2011       2012       2011
                                                                     
                                                                     
Net income per share:                                                
Basic                              $0.17      $0.14      $0.41      $0.11
Diluted                            $0.17      $0.14      $0.41      $0.11
                                                                     
Weighted-average shares                                              
outstanding:
Basic                              27,659,996 28,913,173 27,892,886 28,952,796
Diluted                            27,847,021 29,035,511 28,067,129 29,036,136

 
 
Rockville Financial, Inc. and Subsidiaries
Consolidated Statements of Income
(In Thousands)
(Unaudited)
                                                                      
                            For the Three Months Ended
                            September June 30,  March 31, December   September
                            30,                           31,        30,
                            2012      2012      2012      2011       2011
INTEREST AND DIVIDEND                                                 
INCOME:
Loans                        $ 17,883  $ 17,930  $ 17,564  $  17,619  $ 17,828
Securities-interest         1,733     1,703     1,306     1,100      1,244
Securities-dividends        42        41        44        43         45
Interest-bearing deposits   13        26        11        32         8
Total interest and dividend 19,671    19,700    18,925    18,794     19,125
income
INTEREST EXPENSE:                                                     
Deposits                    2,149     2,246     2,251     2,582      2,862
Borrowed funds              558       563       548       632        899
Total interest expense      2,707     2,809     2,799     3,214      3,761
Net interest income         16,964    16,891    16,126    15,580     15,364
PROVISION FOR LOAN LOSSES   793       1,181     704       761        754
Net interest income after   16,171    15,710    15,422    14,819     14,610
provision for loan losses
NON-INTEREST INCOME:                                                  
Service charges and fees    1,585     1,538     1,826     1,565      1,521
Net gain from sales of      214       118       3         2          74
securities
Net gain from sales of      2,514      44       525       1,251      405
loans
Other income                301        559      316       222        212
Total non-interest income   4,614      2,259    2,670     3,040      2,212
NON-INTEREST EXPENSE:                                                 
Salaries and employee       8,314      8,468    7,123     5,938      6,023
benefits
Service bureau fees         946        1,231    1,057     1,041      1,110
Occupancy and equipment     1,254      1,036    1,065     1,038      1,097
Professional fees           1,049      828      718       630        725
Marketing and promotions    70         103      114       204        202
FDIC assessments            268        201      305       256        (29)
Other real estate owned     110        53       281       601        2
Other                       2,499     1,895     1,680     2,060      1,466
Total non-interest expense  14,510    13,815    12,343    11,768     10,596
INCOME BEFORE INCOME TAXES  6,275     4,154     5,749     6,091      6,226
Income Tax Provision        1,607     1,205     1,894     2,103      2,143
NET INCOME                   $ 4,668   $ 2,949   $ 3,855   $ 3,988    $ 4,083

 
 
Rockville Financial, Inc. and Subsidiaries
Consolidated Statements of Condition
(In Thousands)
(Unaudited)
                                                                          
                     September    June 30,     March 30,    December 30, September
                     30,                                                 30,
ASSETS               2012         2012         2012         2011         2011
CASH AND CASH                                                             
EQUIVALENTS:
Cash and due from     $  14,000    $ 20,151     $ 15,303     $ 40,677     $ 68,487
banks
Short-term           24,365       13,739       24,549       308          312
investments
Total cash and cash  38,365       33,890       39,852       40,985       68,799
equivalents
AVAILABLE FOR SALE
SECURITIES-At fair   245,952      221,714      195,501      151,237      134,642
value
HELD TO MATURITY
SECURITIES-At        6,935        7,692        8,603        9,506        10,504
amortized cost
TOTAL LOANS HELD FOR 5,786        598           –            –           2,081
SALE
LOANS RECEIVABLE     1,548,696    1,562,553    1,512,813    1,473,423    1,461,016
Less allowance for   (18,079)     (17,303)     (16,527)     (16,025)     (15,524)
loan losses
Total Net Loans      1,530,617    1,545,250    1,496,286    1,457,398    1,445,492
FEDERAL HOME LOAN    15,867       15,867       15,867       17,007       17,007
BANK STOCK, at cost
ACCRUED INTEREST     5,521        5,070        4,624        4,089        4,084
RECEIVABLE
DEFERRED TAX         9,843        10,492       10,590       10,368       7,494
ASSET-Net
PREMISES AND         18,965       17,331       16,082       15,502       15,500
EQUIPMENT-Net
GOODWILL             1,070        1,070        1,070        1,149        1,149
CASH SURRENDER VALUE
OF BANK-OWNED LIFE   57,838       56,912       56,388       31,082       30,790
INSURANCE
OTHER REAL ESTATE    2,618        2,084        2,746        3,008        303
OWNED
PREPAID FDIC         2,334        2,569        2,805        3,034        5,378
ASSESSMENTS
CURRENT INCOME TAX   1,316        3,121        612          2,848        3,260
RECEIVABLE
OTHER ASSETS         6,160        4,739        4,128        2,659        3,696
                      $ 1,949,187  $ 1,928,399  $ 1,855,154  $ 1,749,872  $ 1,750,179
LIABILITIES AND                                                           
STOCKHOLDERS' EQUITY
LIABILITIES:                                                              
DEPOSITS:                                                                 
Non-interest-bearing  $ 223,525    $ 220,924    $ 216,567    $ 206,416    $ 181,637
Interest-bearing     1,253,605    1,234,750    1,165,702    1,120,350    1,115,926
Total deposits       1,477,130    1,455,674    1,382,269    1,326,766    1,297,563
MORTGAGORS' AND
INVESTORS' ESCROW    3,364        6,556        3,217        5,852        3,106
ACCOUNTS
ADVANCES FROM THE
FEDERAL HOME LOAN    118,865      125,871      125,876      65,882       94,887
BANK
ACCRUED EXPENSES AND 22,539       17,593       16,142       17,901       19,267
OTHER LIABILITIES
TOTAL LIABILITIES    1,621,898    1,605,694    1,527,504    1,416,401    1,414,823
COMMITMENTS AND                                                           
CONTINGENCIES
STOCKHOLDERS' EQUITY 327,289      322,705      327,650      333,471      335,356
                      $ 1,949,187  $ 1,928,399  $ 1,855,154  $ 1,749,872  $ 1,750,179

 
 
Rockville Financial, Inc. and Subsidiaries
Selected Financial Highlights
(Dollars In Thousands, Except Share Data)
(Unaudited)
                                                                      
                             For the Three Months Ended
                             September June 30,  March 31, December  September
                             30,                           31,       30,
                             2012      2012      2012      2011      2011
Share Data:                                                           
Basic net income per share    $ 0.17    $ 0.11    $ 0.13    $ 0.14    $ 0.14
common
Diluted net income per share 0.17      0.11      0.13      0.14      0.14
common
Dividends declared per share 0.09      0.09      0.08      0.075     0.075
                                                                      
Operating Data:                                                       
Total operating revenue       $ 21,578  $ 19,150  $ 18,796  $ 18,620  $ 17,576
Total operating expense      14,510    13,815    12,343    11,768    10,596
                                                                      
Key Ratios:                                                           
Return on average assets     0.97%     0.63%     0.86%     0.92%     0.94%
Return on average equity     5.73%     3.63%     4.62%     4.73%     4.88%
Tax-equivalent net interest  3.80%     3.87%     3.83%     3.77%     3.70%
margin
                                                                      
Non-performing Assets:                                                
Residential real estate       $ 6,911   $  8,087  $ 6,730   $ 6,332   $ 5,670
Commercial real estate       $1,609    1,624     1,274     750       1,941
Construction                 $1,221    1,235     1,006     1,099     2,886
Commercial business          $1,285    1,200     1,445     1,033     1,046
Installment and collateral   32        33        34        29        25
Total non-accrual loans      11,058    12,179    10,489    9,243     11,568
Troubled debt restructured - 2,965     3,071     3,166     3,367     0
non-accruing
Total non-performing loans   14,023    15,250    13,655    12,610    11,568
Other real estate owned      2,618     2,074     2,746     3,008     303
Total non-performing assets   $ 16,641  $ 17,324  $ 16,401  $ 15,618  $ 11,871
                                                                      
Non-performing loans to      0.91%     0.98%     0.90%     0.86%     0.79%
total loans
Non-performing assets to     0.85%     0.90%     0.88%     0.89%     0.66%
total assets
Allowance for loan losses to 128.93%   113.47%   121.03%   127.08%   111.43%
non-performing loans
Allowance for loan losses to 1.17%     1.11%     1.09%     1.09%     1.06%
total loans
                                                                      
Non-GAAP Ratios:                                                      
Non-interest expense to      3.00%     2.93%     2.77%     2.70%     2.43%
average assets
Efficiency ratio             67.25%    72.14%    65.67%    63.20%    60.29%
Cost of interest-bearing     0.69%     0.74%     0.79%     1.02%     1.03%
deposits

                                                                                        
Rockville Financial, Inc. and Subsidiaries                                              
Average Balance Sheets, Interest and Yields/Costs                                       
(Dollars In Thousands)                                                                  
(Unaudited)                                                                             
                                                                                        
                     Three Months Ended September 30,                                   
                     2012                             2011                              
                                 Interest                         Interest              
                     Average     and                  Average     and                   
                     Balance     Dividends Yield/Cost Balance     Dividends Yield/Cost  
Loans receivable,     $1,540,280  $ 17,883 4.64%       $1,445,825  $ 17,828 4.93%       
net
Investment            233,104     1,991    3.42        161,817     1,278    3.16        
securities
Federal Home Loan     15,867      21       0.53        17,007      11       0.26        
Bank stock
Other earning assets  23,385      12       0.22        35,039      8        0.09        
Total
interest-earning      1,812,636   19,907   4.39%       1,659,688   19,125   4.61%       
assets
Noninterest-earning   122,068                          81,687                           
assets
Total assets          $1,934,704                       $1,741,375                       
                                                                                        
Interest-bearing                                                                        
liabilities:
NOW and money market  $ 518,176    381     0.29%       $ 372,542   351      0.38%       
accounts
Savings accounts      209,197     47       0.09        182,068     106      0.23        
Certificates of       525,799     1,721    1.31        557,636     2,405    1.73        
deposit
Total
interest-bearing      1,253,172   2,149    0.69        1,112,246   2,862    1.03        
deposits
Advances from the
Federal Home Loan     119,802     558      1.86        108,324      899     3.32        
Bank
Total
interest-bearing      1,372,974   2,707    0.79%       1,220,570   3,761    1.23%       
liabilities
Non-interest-bearing  236,068                          186,235                          
liabilities
Total liabilities     1,609,042                        1,406,805                        
Stockholders' equity  325,662                          334,570                          
Total liabilities
and Stockholders'     $1,934,704                       $1,741,375                       
Equity
                                                                                        
Net interest-earning  $ 439,662                        $ 439,118                        
assets
Tax equivalent net                17,200                           15,364               
interest income
Tax equivalent net                         3.60%                            3.38%       
interest rate spread
Tax equivalent net                         3.80%                            3.70%       
interest margin
                                                                                        
Average
interest-earning
assets to average                          132.02%                          135.98%     
interest-bearing
liabilities
                                                                                        
Less tax equivalent               236                              --                   
adjustment
Net Interest Income               $ 16,964                         $ 15,364             

                                                                                        
                                                                                        
Rockville Financial, Inc. and Subsidiaries                                              
Average Balance Sheets, Interest and Yields/Costs                                       
(Dollars In Thousands)                                                                  
(Unaudited)                                                                             
                                                                                        
                     Nine Months Ended September 30,                                    
                     2012                             2011                              
                                 Interest                         Interest              
                     Average     and                  Average     and                   
                     Balance     Dividends Yield/Cost Balance     Dividends Yield/Cost  
Interest-earning                                                                        
assets:
Loans receivable,     $1,504,986  $ 53,377  4.73%      $1,428,073  $ 52,844  4.93%      
net
Investment            209,359     5,308     3.38       162,173     3,866     3.18       
securities
Federal Home Loan     16,150      63        0.52       17,007      37        0.29       
Bank stock
Other earning assets  26,047      50        0.26       118,129     39         0.05      
Total
interest-earning      1,756,542   58,798    4.46%      1,725,382   56,786    4.39%      
assets
Non-interest-earning  111,740                          90,454                           
assets
Total assets          $1,868,282                       $1,815,836                       
                                                                                        
Interest-bearing                                                                        
liabilities:
NOW and money market  $ 475,036   $ 1,015   0.28%      $ 359,101   $ 1,043   0.39%      
accounts
Savings accounts      204,575     199       0.13       177,433     342       0.26       
Certificates of       523,627     5,432     1.38       556,854     7,285     1.74       
deposit
Total
interest-bearing      1,203,238   6,646     0.74       1,093,388   8,670     1.06       
deposits
Advances from the
Federal Home Loan     105,852     1,669     2.10       198,950      5,587    3.74       
Bank
Total
interest-bearing      1,309,090   8,315     0.85%      1,292,338   14,257    1.47%      
liabilities
Non-interest-bearing  230,963                          225,713                          
liabilities
Total liabilities     1,540,053                        1,518,051                        
Stockholders' equity  328,229                          297,785                          
Total liabilities
and Stockholders'     $1,868,282                       $1,815,836                       
Equity
                                                                                        
                                                                                        
Net interest-earning  $ 447,452                        $ 433,044                        
assets
Tax equivalent net                50,483                           42,529               
interest income
Tax equivalent net                          3.61%                            2.92%      
interest rate spread
Tax equivalent net                          3.83%                            3.29%      
interest margin
                                                                                        
Average
interest-earning
assets to average                          134.18%                          133.51%     
interest-bearing
liabilities
                                                                                        
Less tax equivalent                502                             --                   
adjustment
Net Interest Income.              $ 49,981                         $ 42,529             

                           
                           
                          Rockville Financial, Inc. and Subsidiaries
                          Reconciliation of Non-GAAP Financial Measures
                          (In Thousands)
                          (Unaudited)
                                                                      
                          For the Three Months Ended
                          September 30, June 30,  March 31, December September
                          2012          2012      2012      31, 2011 30, 2011
                                                                      
                                                                      
Income before income       $ 6,275       $ 4,154   $ 5,749   $ 6,091  $ 6,226
taxes
                                                                      
Stock-based compensation   –             1,167     –         –        – 
                                                                      
                                                                      
Core operating earnings    6,275         5,321      5,749    6,091    6,226
before taxes
                                                                      
Income taxes              1,607         1,543     1,894     2,103    2,143
                                                                      
Core operating earnings    $ 4,668       $  3,778  $ 3,855   $ 3,988  $ 4,083
after taxes

CONTACT: Investor Relations Contact:
         Marliese L. Shaw
         Senior Vice President, Investor Relations Officer
         860-291-3622
         mshaw@rockvillebank.com
        
         Media Relations Contact:
         Adam J. Jeamel
         Vice President, Corporate Communications
         860-291-3765
         ajeamel@rockvillebank.com

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