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Rockville Financial, Inc. Announces Record Earnings and Dividend Increase

Rockville Financial, Inc. Logo

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 12th position from 14th 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 provision for loan losses 16,171 14,610 47,303 40,269
NON-INTEREST INCOME:
Total other-than-temporary impairment losses on equity securities (29)
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 Foundation, Inc. 5,043
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 30, June 30, March 31, December 31, September 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 income 19,671 19,700 18,925 18,794 19,125
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 provision for loan losses 16,171 15,710 15,422 14,819 14,610
NON-INTEREST INCOME:
Service charges and fees 1,585 1,538 1,826 1,565 1,521
Net gain from sales of securities 214 118 3 2 74
Net gain from sales of loans 2,514 44 525 1,251 405
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 benefits 8,314 8,468 7,123 5,938 6,023
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 30, June 30, March 30, December 30, September 30,
ASSETS 2012 2012 2012 2011 2011
CASH AND CASH EQUIVALENTS:
Cash and due from banks $ 14,000 $ 20,151 $ 15,303 $ 40,677 $ 68,487
Short-term investments 24,365 13,739 24,549 308 312
Total cash and cash equivalents 38,365 33,890 39,852 40,985 68,799
AVAILABLE FOR SALE SECURITIES-At fair value 245,952 221,714 195,501 151,237 134,642
HELD TO MATURITY SECURITIES-At amortized cost 6,935 7,692 8,603 9,506 10,504
TOTAL LOANS HELD FOR SALE 5,786 598 2,081
LOANS RECEIVABLE 1,548,696 1,562,553 1,512,813 1,473,423 1,461,016
Less allowance for loan losses (18,079) (17,303) (16,527) (16,025) (15,524)
Total Net Loans 1,530,617 1,545,250 1,496,286 1,457,398 1,445,492
FEDERAL HOME LOAN BANK STOCK, at cost 15,867 15,867 15,867 17,007 17,007
ACCRUED INTEREST RECEIVABLE 5,521 5,070 4,624 4,089 4,084
DEFERRED TAX ASSET-Net 9,843 10,492 10,590 10,368 7,494
PREMISES AND EQUIPMENT-Net 18,965 17,331 16,082 15,502 15,500
GOODWILL 1,070 1,070 1,070 1,149 1,149
CASH SURRENDER VALUE OF BANK-OWNED LIFE INSURANCE 57,838 56,912 56,388 31,082 30,790
OTHER REAL ESTATE OWNED 2,618 2,084 2,746 3,008 303
PREPAID FDIC ASSESSMENTS 2,334 2,569 2,805 3,034 5,378
CURRENT INCOME TAX RECEIVABLE 1,316 3,121 612 2,848 3,260
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 ACCOUNTS 3,364 6,556 3,217 5,852 3,106
ADVANCES FROM THE FEDERAL HOME LOAN BANK 118,865 125,871 125,876 65,882 94,887
ACCRUED EXPENSES AND OTHER LIABILITIES 22,539 17,593 16,142 17,901 19,267
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 30, June 30, March 31, December 31, September 30,
2012 2012 2012 2011 2011
Share Data:
Basic net income per share common $ 0.17 $ 0.11 $ 0.13 $ 0.14 $ 0.14
Diluted net income per share common 0.17 0.11 0.13 0.14 0.14
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 margin 3.80% 3.87% 3.83% 3.77% 3.70%
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 - non-accruing 2,965 3,071 3,166 3,367 0
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 total loans 0.91% 0.98% 0.90% 0.86% 0.79%
Non-performing assets to total assets 0.85% 0.90% 0.88% 0.89% 0.66%
Allowance for loan losses to non-performing loans 128.93% 113.47% 121.03% 127.08% 111.43%
Allowance for loan losses to total loans 1.17% 1.11% 1.09% 1.09% 1.06%
Non-GAAP Ratios:
Non-interest expense to average assets 3.00% 2.93% 2.77% 2.70% 2.43%
Efficiency ratio 67.25% 72.14% 65.67% 63.20% 60.29%
Cost of interest-bearing deposits 0.69% 0.74% 0.79% 1.02% 1.03%
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, net $1,540,280 $ 17,883 4.64% $1,445,825 $ 17,828 4.93%
Investment securities 233,104 1,991 3.42 161,817 1,278 3.16
Federal Home Loan Bank stock 15,867 21 0.53 17,007 11 0.26
Other earning assets 23,385 12 0.22 35,039 8 0.09
Total interest-earning assets 1,812,636 19,907 4.39% 1,659,688 19,125 4.61%
Noninterest-earning assets 122,068 81,687
Total assets $1,934,704 $1,741,375
Interest-bearing liabilities:
NOW and money market accounts $ 518,176 381 0.29% $ 372,542 351 0.38%
Savings accounts 209,197 47 0.09 182,068 106 0.23
Certificates of deposit 525,799 1,721 1.31 557,636 2,405 1.73
Total interest-bearing deposits 1,253,172 2,149 0.69 1,112,246 2,862 1.03
Advances from the Federal Home Loan Bank 119,802 558 1.86 108,324 899 3.32
Total interest-bearing liabilities 1,372,974 2,707 0.79% 1,220,570 3,761 1.23%
Non-interest-bearing liabilities 236,068 186,235
Total liabilities 1,609,042 1,406,805
Stockholders' equity 325,662 334,570
Total liabilities and Stockholders' Equity $1,934,704 $1,741,375
Net interest-earning assets $ 439,662 $ 439,118
Tax equivalent net interest income 17,200 15,364
Tax equivalent net interest rate spread 3.60% 3.38%
Tax equivalent net interest margin 3.80% 3.70%
Average interest-earning assets to average interest-bearing liabilities 132.02% 135.98%
Less tax equivalent adjustment 236 --
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, net $1,504,986 $ 53,377 4.73% $1,428,073 $ 52,844 4.93%
Investment securities 209,359 5,308 3.38 162,173 3,866 3.18
Federal Home Loan Bank stock 16,150 63 0.52 17,007 37 0.29
Other earning assets 26,047 50 0.26 118,129 39 0.05
Total interest-earning assets 1,756,542 58,798 4.46% 1,725,382 56,786 4.39%
Non-interest-earning assets 111,740 90,454
Total assets $1,868,282 $1,815,836
Interest-bearing liabilities:
NOW and money market accounts $ 475,036 $ 1,015 0.28% $ 359,101 $ 1,043 0.39%
Savings accounts 204,575 199 0.13 177,433 342 0.26
Certificates of deposit 523,627 5,432 1.38 556,854 7,285 1.74
Total interest-bearing deposits 1,203,238 6,646 0.74 1,093,388 8,670 1.06
Advances from the Federal Home Loan Bank 105,852 1,669 2.10 198,950 5,587 3.74
Total interest-bearing liabilities 1,309,090 8,315 0.85% 1,292,338 14,257 1.47%
Non-interest-bearing liabilities 230,963 225,713
Total liabilities 1,540,053 1,518,051
Stockholders' equity 328,229 297,785
Total liabilities and Stockholders' Equity $1,868,282 $1,815,836
Net interest-earning assets $ 447,452 $ 433,044
Tax equivalent net interest income 50,483 42,529
Tax equivalent net interest rate spread 3.61% 2.92%
Tax equivalent net interest margin 3.83% 3.29%
Average interest-earning assets to average interest-bearing liabilities 134.18% 133.51%
Less tax equivalent adjustment 502 --
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, 2012 June 30, 2012 March 31, 2012 December 31, 2011 September 30, 2011
Income before income taxes $ 6,275 $ 4,154 $ 5,749 $ 6,091 $ 6,226
Stock-based compensation 1,167
Core operating earnings before taxes 6,275 5,321 5,749 6,091 6,226
Income taxes 1,607 1,543 1,894 2,103 2,143
Core operating earnings after taxes $ 4,668 $ 3,778 $ 3,855 $ 3,988 $ 4,083
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

Source:Rockville Financial, Inc.