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Revenues continued to increase for the third consecutive quarter and credit quality remained stable. Total revenue grew by 4.6% from $65.2 million to $68.2 million on a linked quarter basis and 11.0% from $61.5 million as compared to the prior year quarter. Total delinquencies are 1.45% at quarter end, down from 1.51% from the prior quarter. Nonperforming loans to total loans were 1.02% as compared to 1.13% in the prior quarter and nonperforming assets to total assets were 0.61% as compared to 0.65% for the same period.
"Our strong earnings performance in the third quarter was the result of excellent business momentum, sustained revenue growth and improved credit quality. This reaffirms the soundness of our operating strategy and the value we offer in the marketplace," stated Peyton R. Patterson, Chairman, President and Chief Executive Officer.
Financial Highlights:
-- Net interest income before provision increased by 3.8%, or $1.8 million, to $51.8 million compared with $49.9 million for the linked quarter and by 7.7%, or $3.7 million, compared with $48.1 million for the prior year quarter.
-- The net interest margin continued to trend upward and increased to 2.71% compared to 2.63% on a linked quarter basis and 2.63% compared with the prior year quarter.
-- Gains recorded from mortgage banking activity and loan sales remain strong at $1.3 million for the third quarter, down $213,000 from the linked quarter and up $840,000 compared to the prior year quarter.
-- Total Deposits increased $111.8 million from the linked quarter and $567.4 million from the prior year quarter mainly due to growth in core deposits which increased $87.1 million from the linked quarter and $832.8 million from the prior year quarter.
-- Deposit costs were reduced by $2.3 million on a linked quarter basis while average balances of interest-bearing core deposits increased $219.6 million. Deposit costs were reduced by $5.7 million compared to the prior year quarter while average balances of interest-bearing core deposits increased by $775.4 million.
-- Total non-interest income increased $1.2 million on the linked quarter and $3.0 million from the prior year quarter.
-- Loan origination levels remained robust, with loan originations of $358.7 million for the quarter as compared to $403.5 million on a linked quarter basis and $82.5 million for the third quarter of 2008.
-- Commercial mortgages and commercial loan originations increased from $39.0 million to $92.8 million, or 138.0% growth, on a linked quarter basis.
-- Nonperforming asset levels improved as the balance decreased by 7.3% on a linked quarter basis to a total of $51.8 million.
-- The efficiency ratio for the quarter was 63.61% compared to the prior quarter of 63.42% and compared to the prior year quarter of 66.90%.
-- The Board of Directors voted to pay a quarterly dividend of $0.07 per share on October 27, 2009 to shareholders of record on November 6, 2009 and payable on November 17, 2009. This will be the Company's 22nd consecutive quarterly dividend payment.
Net Interest Income
Net interest income before provision for loan loss increased by $1.8 million on a linked quarter basis and $3.7 million as compared to the prior year quarter demonstrating strong revenue momentum as it represents the third consecutive quarterly increase. The net interest margin increased to 2.71% compared to 2.63% on a linked quarter basis. The increase in net interest income and the net interest margin is directly related to the reduction in costs associated with borrowings and deposits. The cost of deposits has continued to decrease over the last three quarters and has decreased by over 23% compared to the prior year quarter while the average balance of interest bearing core deposits has increased by $775.4 million from the prior year quarter.
"We are extremely pleased with the expansion in our net interest margin as it is the highest that it has been in three years. The increase in our net interest margin, coupled with robust balance sheet growth, reflects our pricing discipline and competitive strength," Ms. Patterson stated.
Non-Interest Income and Non-Interest Expense
Non-interest income for the quarter increased $1.2 million on a linked quarter basis and increased $3.0 million compared to the prior year quarter. In the second quarter of 2009, an impairment charge of $626,000 was recorded and thus the increase in non-interest income on a linked quarter basis, excluding this charge, was $532,000. The increases for the quarter and as compared to the prior year quarter are primarily due to depositor service charges. In addition, wealth management fees showed a significant improvement on a linked quarter basis.
Non-interest expense decreased $2.2 million or 4.9% on a linked quarter basis. Included in non-interest expense for the prior quarter is the FDIC special assessment of approximately $4.0 million, before tax. Absent this item, non-interest expense for the current quarter increased from the prior quarter by $1.8 million and primarily relates to an increase in salary and marketing expenditures. NewAlliance has made significant investments over the past two quarters in the franchise via personnel, marketing and consulting initiatives. These initiatives are having a positive impact on core account generation including business checking, consumer checking and first mortgage originations. We expect 2009 expense levels to be in line with the 2008 levels.
Credit Quality
"Our experienced team continues to exhibit superior performance in managing the credit quality of our loan portfolio as evidenced by positive asset quality indicators, such as the stabilization of the nonperforming loan levels. With the high unemployment rate, there will continue to be pressure on asset quality but we expect our performance to remain among the best in the industry," said Don Chaffee, Interim Chief Financial Officer, Executive Vice President and Chief Credit Officer.
Key Developments:
-- Nonperforming loans to total loans improved from 1.13% to 1.02% on a linked quarter basis and nonperforming assets to total assets also improved from 0.65% to 0.61% for the same period.
-- Nonperforming loans decreased $5.8 million to $49.1 million on a linked quarter basis.
-- Nonperforming assets decreased on a quarterly basis by $4.1 million, or 7.3%, in the third quarter compared to an increase of $4.4 million, or 8.5%, in the second quarter of 2009.
-- The provision for loan losses increased by $433,000 on a linked quarter basis and $1.2 million compared to the prior year quarter.
-- NewAlliance experienced an increase in net charge-offs of $1.1 million to $5.2 million on a linked quarter basis. Although the Company's net charge-offs increased from the prior quarter, the charge-off levels remain low relative to peer levels.
-- Total delinquencies are 1.45% at quarter end, down from 1.51% from the prior quarter.
-- The allowance for loan losses to total loans increased to 1.08% from 1.06% on a linked quarter basis.
Capital Management
The tangible common equity ratio and total risk-based capital ratio was 10.82% and 21.1%, respectively, and total shareholder's equity was $1.43 billion at September 30, 2009. The Company's Tier 1 leverage capital ratio was 10.97% and is more than double the 5% regulatory benchmark that is considered 'well-capitalized' for banks. "Maintaining a solid capital position to strengthen the Company is just as important as maintaining good asset quality and keeping a firm hand on sound underwriting," stated Ms. Patterson.
Today, the Board of Directors authorized the filing of a shelf registration statement with the Securities and Exchange Commission. This is a common step for banks to take to position themselves to raise capital quickly should an appropriate opportunity arise.
At September 30, 2009, NewAlliance Bancshares, the parent company of NewAlliance Bank, had $8.54 billion in assets and operated 87 banking offices in Connecticut and Massachusetts.
NewAlliance Bank provides a full range of consumer and commercial banking products and services, trust services and investment and insurance products and services. The Bank's website is at www.newalliancebank.com. Shareholders are encouraged to monitor the Investor Relations section of the Company's website.
NewAlliance will hold a conference call on third quarter earnings at 10:00 a.m. Eastern Time on Wednesday, October 28, 2009. The call is being webcast and will be available at the Investor Relations section of the Company's website at www.newalliancebank.com. Individuals can dial in to the call at 1-800-860-2442. The international dial-in number is 1-412-858-4600.
A replay of the webcast and call will be available after noon on October 28th through November 11, 2009. To access the replay, dial 1-877-344-7529. For international access, dial 1-412-317-0088. The passcode for either replay number is 434042.
Note: In discussing financial results, management may refer to certain non-GAAP (Generally Accepted Accounting Principles) measures. The Company's management believes these non-GAAP measurements are essential to a proper understanding of the operating results of the Company's core business. These non-GAAP measurements are not a substitute for operating results determined in accordance with GAAP nor do they necessarily conform to non-GAAP performance measures that may be presented by other companies. A reconciliation of GAAP and non-GAAP information is included in this release.
Statements in this news release, if any, 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 filings with the Securities and Exchange Commission, press releases and other communications. Actual results also may differ based on the Company's ability to successfully maintain and integrate customers from acquisitions.
The Company intends any forward-looking statements to be covered by the Litigation Reform Act of 1995 and is including this statement for purposes of said safe harbor provisions. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date of this news release. Except as required by applicable law or regulation, the Company undertakes no obligation to update any forward-looking statements to reflect events or circumstances that occur after the date as of which such statements are made.
The Company's capital strategy includes deployment of excess capital through acquisitions. Future acquisitions are expected to impact the Company's results in future periods.
NewAlliance Bancshares, Inc.
Consolidated Statements of Income (Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
(In thousands, except share data) 2009 2008 2009 2008
Interest and dividend income $ 92,268 $ 99,042 $ 281,104 $ 300,436
Interest expense 40,506 50,983 131,422 158,123
Net interest income before provision for loan losses 51,762 48,059 149,682 142,313
Provision for loan losses 5,433 4,200 14,533 9,600
Net interest income after provision for loan losses 46,329 43,859 135,149 132,713
Non-interest income
Depositor service charges 7,270 7,052 20,175 20,393
Loan and servicing income 322 325 498 971
Trust fees 1,569 1,635 4,219 4,984
Investment management, brokerage & insurance fees 1,700 1,872 5,514 6,248
Bank owned life insurance 882 1,164 2,652 3,984
Other-than-temporary impairment losses on securities - (2,610 ) (2,522 ) (2,610 )
Less: Portion of loss recognized in other comprehensive income - - 1,896 -
(before taxes)
Net impairment losses on securities recognized in earnings - (2,610 ) (626 ) (2,610 )
Net gain on sale of securities 2,029 2,395 6,139 3,620
Net gain on securities 2,029 (215 ) 5,513 1,010
Mortgage banking activity & loan sale income 1,268 428 4,768 1,341
Other 1,409 1,144 2,664 4,660
Total non-interest income 16,449 13,405 46,003 43,591
Non-interest expense
Salaries and employee benefits 22,443 22,354 65,281 68,978
Occupancy 4,287 4,415 13,686 13,629
Furniture and fixtures 1,419 1,624 4,348 4,964
Outside services 4,779 5,047 14,584 13,791
Advertising, public relations, and sponsorships 1,932 1,667 4,202 5,412
Amortization of identifiable intangible assets 2,122 2,364 6,379 7,092
Merger related charges 4 99 27 177
FDIC insurance premiums 1,880 178 8,717 544
Other 3,376 3,623 9,805 10,339
Total non-interest expense 42,242 41,371 127,029 124,926
Income before income taxes 20,536 15,893 54,123 51,378
Income tax provision 7,916 4,957 19,805 15,726
Net income $ 12,620 $ 10,936 $ 34,318 $ 35,652
Earnings per share
Basic $ 0.13 $ 0.11 $ 0.35 $ 0.36
Diluted 0.13 0.11 0.35 0.36
Weighted average shares outstanding
Basic 99,506,517 98,988,777 99,292,067 99,802,810
Diluted 99,569,908 99,145,940 99,298,399 99,855,692
NewAlliance Bancshares, Inc.
Consolidated Statements of Income (Unaudited)
Three Months Ended
September 30, June 30, March 31, December 31, September 30,
(In thousands, except share data) 2009 2009 2009 2008 2008
Interest and dividend income $ 92,268 $ 94,082 $ 94,755 $ 98,737 $ 99,042
Interest expense 40,506 44,155 46,762 50,934 50,983
Net interest income before provision for loan losses 51,762 49,927 47,993 47,803 48,059
Provision for loan losses 5,433 5,000 4,100 3,800 4,200
Net interest income after provision for loan losses 46,329 44,927 43,893 44,003 43,859
Non-interest income
Depositor service charges 7,270 6,953 5,953 6,788 7,052
Loan and servicing income 322 357 (181 ) (3 ) 325
Trust fees 1,569 1,392 1,259 1,367 1,635
Investment management, brokerage & insurance fees 1,700 1,564 2,250 1,646 1,872
Bank owned life insurance 882 899 871 953 1,164
Other-than-temporary impairment losses on securities - (2,522 ) - (70 ) (2,610 )
Less: Portion of loss recognized in other comprehensive income - 1,896 - - -
(before taxes)
Net impairment losses on securities recognized in earnings - (626 ) - (70 ) (2,610 )
Net gain on sale of securities 2,029 2,243 1,866 903 2,395
Net gain (loss) on securities 2,029 1,617 1,866 833 (215 )
Mortgage banking activity & loan sale income 1,268 1,481 2,019 209 428
Other 1,409 1,028 226 513 1,144
Total non-interest income 16,449 15,291 14,263 12,306 13,405
Non-interest expense
Salaries and employee benefits 22,443 21,607 21,231 22,710 22,354
Occupancy 4,287 4,644 4,755 4,462 4,415
Furniture and fixtures 1,419 1,453 1,475 1,585 1,624
Outside services 4,779 4,455 5,350 5,523 5,047
Advertising, public relations, and sponsorships 1,932 1,056 1,213 1,017 1,667
Amortization of identifiable intangible assets 2,122 2,129 2,129 2,364 2,364
Merger related charges 4 22 1 8 99
FDIC insurance premiums 1,880 5,893 945 177 178
Other 3,376 3,146 3,282 3,797 3,623
Total non-interest expense 42,242 44,405 40,381 41,643 41,371
Income before income taxes 20,536 15,813 17,775 14,666 15,893
Income tax provision 7,916 5,705 6,185 5,022 4,957
Net income $ 12,620 $ 10,108 $ 11,590 $ 9,644 $ 10,936
Earnings per share
Basic $ 0.13 $ 0.10 $ 0.12 $ 0.10 $ 0.11
Diluted 0.13 0.10 0.12 0.10 0.11
Weighted average shares outstanding
Basic 99,506,517 99,278,162 99,254,242 98,944,841 98,988,777
Diluted 99,569,908 99,310,611 99,270,068 99,221,856 99,145,940
NewAlliance Bancshares, Inc.
Consolidated Balance Sheets (Unaudited)
September 30, June 30, March 31, December 31, September 30,
(In thousands) 2009 2009 2009 2008 2008
Assets
Cash and due from banks $ 106,539 $ 85,070 $ 137,381 $ 98,131 $ 112,121
Federal funds sold - - - - 50,000
Short-term investments 40,000 62,000 80,000 55,000 25,000
Investment securities available for sale 2,391,260 2,291,350 2,085,958 1,928,562 1,886,001
Investment securities held to maturity 263,103 288,104 312,095 309,782 299,622
Loans held for sale 14,749 54,479 20,413 5,361 4,687
Loans
Residential real estate 2,424,962 2,481,352 2,532,700 2,546,018 2,556,962
Commercial real estate 1,222,980 1,196,010 1,217,929 1,220,810 1,206,666
Commercial business 422,814 435,556 441,811 458,952 459,998
Consumer 734,951 738,540 740,308 737,005 729,850
Total loans 4,805,707 4,851,458 4,932,748 4,962,785 4,953,476
Less allowance for loan losses (51,720 ) (51,502 ) (50,635 ) (49,911 ) (49,175 )
Total loans, net 4,753,987 4,799,956 4,882,113 4,912,874 4,904,301
Federal Home Loan Bank of Boston stock 120,821 120,821 120,821 120,821 120,821
Premises and equipment, net 57,396 57,499 58,307 59,419 59,832
Cash surrender value of bank owned life insurance 139,257 138,375 137,476 136,868 135,975
Goodwill 527,167 527,167 527,167 527,167 527,167
Identifiable intangible assets 37,481 39,603 41,732 43,860 46,224
Other assets 88,993 117,016 95,136 101,673 93,510
Total assets $ 8,540,753 $ 8,581,440 $ 8,498,599 $ 8,299,518 $ 8,265,261
Liabilities
Deposits
Regular savings $ 1,841,605 $ 1,913,169 $ 1,651,874 $ 1,463,341 $ 1,402,874
Money market 696,464 520,902 477,569 346,522 344,681
NOW 367,627 389,495 359,598 368,730 356,162
Demand 528,614 523,618 494,412 494,978 497,749
Time 1,540,025 1,515,322 1,678,706 1,774,259 1,805,488
Total deposits 4,974,335 4,862,506 4,662,159 4,447,830 4,406,954
Borrowings
Federal Home Loan Bank advances 1,885,389 2,057,720 2,167,536 2,190,914 2,175,184
Repurchase agreements 133,802 132,511 148,259 159,530 185,465
Junior subordinated debentures 21,135 21,135 24,685 24,735 24,785
Other borrowings 1,204 1,243 1,281 1,317 1,354
Other liabilities 97,401 99,077 100,502 93,976 71,113
Total liabilities 7,113,266 7,174,192 7,104,422 6,918,302 6,864,855
Stockholders' equity 1,427,487 1,407,248 1,394,177 1,381,216 1,400,406
Total liabilities and stockholders' equity $ 8,540,753 $ 8,581,440 $ 8,498,599 $ 8,299,518 $ 8,265,261
NewAlliance Bancshares, Inc.
Selected Financial Highlights (Unaudited)
Three Months Ended
September 30, June 30, March 31, December 31, September 30,
(Dollars in thousands, except per share data) 2009 2009 2009 2008 2008
Net interest income before provision for loan losses $ 51,762 $ 49,927 $ 47,993 $ 47,803 $ 48,059
Net income 12,620 10,108 11,590 9,644 10,936
Shares outstanding (end of period) 106,638,777 106,788,454 106,788,675 107,058,509 107,058,509
Weighted average shares outstanding:
Basic 99,506,517 99,278,162 99,254,242 98,944,841 98,988,777
Diluted 99,569,908 99,310,611 99,270,068 99,221,856 99,145,940
Earnings per share:
Basic $ 0.13 $ 0.10 $ 0.12 $ 0.10 $ 0.11
Diluted 0.13 0.10 0.12 0.10 0.11
Shareholders' equity (end of period) 1,427,487 1,407,248 1,394,177 1,381,216 1,400,406
Book value per share (end of period) 13.39 13.18 13.06 12.90 13.08
Tangible book value per share (end of period) 8.09 7.87 7.73 7.57 7.72
Ratios & Other Information
Net interest margin (net interest income as a % of average 2.71 % 2.63 % 2.58 % 2.59 % 2.63 %
earnings assets)
Net interest spread (yield on earning assets minus yield on 2.34 2.24 2.17 2.13 2.16
interest-bearing liabilities)
Average yield on interest-earning assets 4.83 4.95 5.09 5.35 5.41
Average rate paid on interest-bearing liabilities 2.49 2.71 2.92 3.22 3.25
Return on average assets 0.59 0.47 0.55 0.47 0.53
Return on average equity 3.57 2.89 3.35 2.76 3.13
At period end:
Tier 1 leverage capital ratio 10.97 % 10.88 % 11.02 % 11.05 % 11.03 %
Asset Quality Information
Nonperforming loans $ 49,091 $ 54,872 $ 50,122 $ 38,331 $ 34,996
Total nonperforming assets 51,793 55,864 51,504 40,354 36,335
Nonperforming loans as a % of total loans 1.02 % 1.13 % 1.02 % 0.77 % 0.71 %
Nonperforming assets as a % of total assets 0.61 0.65 0.61 0.49 0.44
Allowance for loan losses as a % of total loans 1.08 1.06 1.03 1.01 0.99
Allowance for loan losses as a % of nonperforming loans 105.36 93.86 101.02 130.21 140.52
Provision for loan losses $ 5,433 $ 5,000 $ 4,100 $ 3,800 $ 4,200
Banking offices 87 87 89 89 89
Non-GAAP Financial Information and Ratios
Noninterest income (1) $ 14,136 $ 13,585 $ 13,145 $ 12,127 $ 13,642
Noninterest income as a percent of operating revenue (1) 21.45 % 21.39 % 21.50 % 20.24 % 22.11 %
Efficiency ratio (2) 63.61 69.65 65.71 68.98 66.90
Expenses to average assets (3) 1.98 2.07 1.91 2.01 2.00
Return on average tangible assets 0.63 0.51 0.59 0.50 0.57
Return on average tangible equity 5.95 4.87 5.68 4.66 5.34
Tangible common equity/tangible assets 10.82 10.49 10.41 10.48 10.75
Net income, GAAP $ 10,108
FDIC special assessment, net of tax 2,571
Proforma net income 12,679
Proforma net income per share - basic 0.13
Proforma net income per share - diluted 0.13
Proforma return on average assets (4) 0.59 %
Proforma return on average equity (4) 3.63
Proforma return on average tangible assets (4) 0.64
Proforma return on average tangible equity (4) 6.11
Proforma efficiency ratio (2) (4) 63.42
Proforma expenses to average assets (3) (4) 1.88
(1) Excludes total net gains or losses on securities and limited
partnerships
(2) Excludes total net gains or losses on securities and limited
partnerships and other real estate owned expenses
(3) Excludes severance and merger costs (Where applicable)
(4) Excludes FDIC special assessment (2nd quarter 2009)
NewAlliance Bancshares, Inc.
Average Balance Sheets (Unaudited)
Three Months Ended
September 30, 2009 September 30, 2008
Average Average
Average Yield/ Average Yield/
(Dollars in thousands) Balance Interest Rate Balance Interest Rate
Interest-earning assets
Loans
Residential real estate $ 2,462,668 $ 31,983 5.19 % $ 2,562,448 $ 35,202 5.50 %
Commercial real estate 1,212,759 17,791 5.87 1,194,106 18,273 6.12
Commercial business 437,842 5,419 4.95 471,555 7,021 5.96
Consumer 737,405 8,517 4.62 719,016 9,718 5.41
Total Loans 4,850,674 63,710 5.25 4,947,125 70,214 5.68
Fed funds sold and other short-term investments 87,864 63 0.29 79,171 494 2.50
Federal Home Loan Bank of Boston stock 120,821 - - 120,821 911 3.02
Investment securities 2,579,856 28,495 4.42 2,176,072 27,423 5.04
Total interest-earning assets 7,639,215 $ 92,268 4.83 % 7,323,189 $ 99,042 5.41 %
Non-interest-earning assets 899,599 921,916
Total assets $ 8,538,814 $ 8,245,105
Interest-bearing liabilities
Deposits
Money market $ 621,017 $ 2,419 1.56 % $ 383,234 $ 1,913 2.00 %
NOW 366,770 280 0.31 359,033 288 0.32
Savings 1,878,458 5,701 1.21 1,348,578 7,742 2.30
Time 1,512,703 10,530 2.78 1,769,126 14,667 3.32
Total interest-bearing deposits 4,378,948 18,930 1.73 3,859,971 24,610 2.55
Repurchase agreements 127,307 375 1.18 179,350 1,045 2.33
FHLB advances and other borrowings 1,988,712 21,201 4.26 2,243,820 25,328 4.52
Total interest-bearing liabilities 6,494,967 40,506 2.49 % 6,283,141 50,983 3.25 %
Non-interest-bearing demand deposits 532,792 494,104
Other non-interest-bearing liabilities 96,367 69,233
Total liabilities 7,124,126 6,846,478
Equity 1,414,688 1,398,627
Total liabilities and equity $ 8,538,814 $ 8,245,105
Net interest-earning assets $ 1,144,248 $ 1,040,048
Net interest income $ 51,762 $ 48,059
Interest rate spread 2.34 % 2.16 %
Net interest margin (net interest income as a percentage of total 2.71 % 2.63 %
interest-earning assets)
Ratio of total interest-earning assets to total interest-bearing 117.62 % 116.55 %
liabilities
NewAlliance Bancshares, Inc.
Average Balance Sheets (Unaudited)
Three Months Ended
September 30, 2009 June 30, 2009
Average Average
Average Yield/ Average Yield/
(Dollars in thousands) Balance Interest Rate Balance Interest Rate
Interest-earning assets
Loans
Residential real estate $ 2,462,668 $ 31,983 5.19 % $ 2,542,771 $ 33,782 5.31 %
Commercial real estate 1,212,759 17,791 5.87 1,207,563 17,448 5.78
Commercial business 437,842 5,419 4.95 443,738 5,527 4.98
Consumer 737,405 8,517 4.62 743,531 8,596 4.62
Total Loans 4,850,674 63,710 5.25 4,937,603 65,353 5.29
Fed funds sold and other short-term investments 87,864 63 0.29 65,684 116 0.71
Federal Home Loan Bank of Boston stock 120,821 - - 120,821 - -
Investment securities 2,579,856 28,495 4.42 2,482,036 28,613 4.61
Total interest-earning assets 7,639,215 $ 92,268 4.83 % 7,606,144 $ 94,082 4.95 %
Non-interest-earning assets 899,599 925,389
Total assets $ 8,538,814 $ 8,531,533
Interest-bearing liabilities
Deposits
Money market $ 621,017 $ 2,419 1.56 % $ 508,796 $ 2,163 1.70 %
NOW 366,770 280 0.31 368,666 261 0.28
Savings 1,878,458 5,701 1.21 1,769,134 6,661 1.51
Time 1,512,703 10,530 2.78 1,604,027 12,192 3.04
Total interest-bearing deposits 4,378,948 18,930 1.73 4,250,623 21,277 2.00
Repurchase agreements 127,307 375 1.18 140,269 389 1.11
FHLB advances and other borrowings 1,988,712 21,201 4.26 2,135,450 22,489 4.21
Total interest-bearing liabilities 6,494,967 40,506 2.49 % 6,526,342 44,155 2.71 %
Non-interest-bearing demand deposits 532,792 512,890
Other non-interest-bearing liabilities 96,367 94,117
Total liabilities 7,124,126 7,133,349
Equity 1,414,688 1,398,184
Total liabilities and equity $ 8,538,814 $ 8,531,533
Net interest-earning assets $ 1,144,248 $ 1,079,802
Net interest income $ 51,762 $ 49,927
Interest rate spread 2.34 % 2.24 %
Net interest margin (net interest income as a percentage of total 2.71 % 2.63 %
interest-earning assets)
Ratio of total interest-earning assets to total interest-bearing 117.62 % 116.55 %
liabilities
NewAlliance Bancshares, Inc.
Average Balance Sheets (Unaudited)
Nine Months Ended
September 30, 2009 September 30, 2008
Average Average
Average Yield/ Average Yield/
(Dollars in thousands) Balance Interest Rate Balance Interest Rate
Interest-earning assets
Loans
Residential real estate $ 2,522,403 $ 100,358 5.30 % $ 2,485,609 $ 102,992 5.52 %
Commercial real estate 1,213,877 52,855 5.81 1,198,238 55,450 6.17
Commercial business 443,564 16,658 5.01 462,889 21,205 6.11
Consumer 739,600 25,821 4.65 702,436 29,551 5.61
Total Loans 4,919,444 195,692 5.30 4,849,172 209,198 5.75
Fed funds sold and other short-term investments 93,336 342 0.49 45,740 969 2.82
Federal Home Loan Bank of Boston stock 120,821 - - 118,369 3,766 4.24
Investment securities 2,456,203 85,070 4.62 2,232,525 86,503 5.17
Total interest-earning assets 7,589,804 $ 281,104 4.94 % 7,245,806 $ 300,436 5.53 %
Non-interest-earning assets 889,869 936,922
Total assets $ 8,479,673 $ 8,182,728
Interest-bearing liabilities
Deposits
Money market $ 515,048 $ 6,500 1.68 % $ 444,882 $ 7,442 2.23 %
NOW 360,717 777 0.29 375,545 1,083 0.38
Savings 1,729,690 19,125 1.47 1,195,774 20,946 2.34
Time 1,617,893 36,646 3.02 1,792,976 49,942 3.71
Total interest-bearing deposits 4,223,348 63,048 1.99 3,809,177 79,413 2.78
Repurchase agreements 142,383 1,302 1.22 182,670 3,113 2.27
FHLB advances and other borrowings 2,109,595 67,072 4.24 2,229,373 75,597 4.52
Total interest-bearing-liabilities 6,475,326 131,422 2.71 % 6,221,220 158,123 3.39 %
Non-interest-bearing demand deposits 510,864 478,817
Other non-interest-bearing liabilities 93,788 73,398
Total liabilities 7,079,978 6,773,435
Equity 1,399,695 1,409,293
Total liabilities and equity $ 8,479,673 $ 8,182,728
Net interest-earning assets $ 1,114,478 $ 1,024,586
Net interest income $ 149,682 $ 142,313
Interest rate spread 2.24 % 2.14 %
Net interest margin (net interest income as a percentage of total 2.63 % 2.62 %
interest-earning assets)
Ratio of total interest-earning assets to total interest-bearing 117.21 % 116.47 %
liabilities
NewAlliance Bancshares, Inc.
Asset Quality (Unaudited)
September 30, June 30, March 31, December 31, September 30,
(Dollars in thousands) 2009 2009 2009 2008 2008
Nonperforming assets
Residential real estate $ 26,654 $ 25,817 $ 21,616 $ 12,634 $ 8,191
Commercial real estate 9,714 15,478 18,429 18,435 19,233
Commercial business 10,693 12,039 8,495 5,863 6,383
Consumer 2,030 1,538 1,582 1,399 1,189
Total nonperforming loans 49,091 54,872 50,122 38,331 34,996
Other nonperforming assets, net 2,702 992 1,382 2,023 1,339
Total nonperforming assets $ 51,793 $ 55,864 $ 51,504 $ 40,354 $ 36,335
Allowance for loan losses $ 51,720 $ 51,502 $ 50,635 $ 49,911 $ 49,175
Three Months Ended
September 30, June 30, March 31, December 31, September 30,
2009 2009 2009 2008 2008
Net loan charge-offs
Residential real estate $ 957 $ 887 $ 466 $ 473 $ 81
Commercial real estate 864 1,757 2,284 1,781 2,005
Total real estate 1,821 2,644 2,750 2,254 2,086
Commercial business 2,938 1,262 598 588 282
Consumer 456 227 28 222 455
Total net charge-offs $ 5,215 $ 4,133 $ 3,376 $ 3,064 $ 2,823
Provision for loan losses $ 5,433 $ 5,000 $ 4,100 $ 3,800 $ 4,200
At or For the Three Months Ended
September 30, June 30, March 31, December 31, September 30,
2009 2009 2009 2008 2008
Ratios
Allowance for loan losses to total loans 1.08 % 1.06 % 1.03 % 1.01 % 0.99 %
Allowance for loan losses to nonperforming loans 105.36 93.86 101.02 130.21 140.52
Nonperforming loans to total loans 1.02 1.13 1.02 0.77 0.71
Nonperforming assets to total assets 0.61 0.65 0.61 0.49 0.44
Net charge-offs to average loans (annualized) 0.43 0.33 0.27 0.25 0.23
SOURCE: NewAlliance Bancshares, Inc.
NewAlliance Bank Don Chaffee, 203-789-2795 Executive Vice President www.newalliancebank.com
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