Rockville Bank Posts Record Fourth Quarter Earnings

Rockville Financial, Inc., the parent company of Rockville Bank, has declared record fourth-quarter earnings.

For the final three months of 2011, the bank had net income of $4 million, or 14 cents per diluted share, compared to fourth quarter 2010 net income of $2.7 million, or 9 cents per diluted share.

The 49.1 percent increase resulted from "continued organic growth in both commercial loans and low cost core deposits during the fourth quarter 2011, together with the Company’s previously communicated balance sheet restructure," according to a news release.

For all of 2011, net income was $7.1 million, or 25 cents per diluted share, compared to $12.3 million, or 44 cents per diluted share for the year 2010.

Here are some fourth quarter highlights (revenue and expense comparisons are to prior year fourth quarter results, unless noted otherwise):

• Net income of $4 million is a record for a fourth quarter.

• 16 percent net interest income growth due to average loan growth and decreased funding costs.
 
• 3.77 percent net interest margin, compared to 3.37 percent in the fourth quarter of 2010 and 3.70 percent in the third quarter 2011.

• 1.07 percent cost of interest bearing liabilities, decreased 65 basis points from prior year and 16 basis points from prior quarter.

• High cost debt declined with $29 million of Federal Home Loan Bank of Boston advances maturing at a weighted average cost of 3.60 percent.

• 6.2 percent linked quarter commercial loan growth.

• Sold residential mortgages totaling $37 million, realizing gains of $1.3 million.

• 2.7 percent non-interest expense as a percentage of average assets increased from 2.63 percent in the prior year and 2.43 percent in the prior quarter.

• Efficiency ratio decreased to 63.20 percent from 68.28 percent.

• 15 dividend increase to $0.075 from $0.065 per share.

Year 2011 Highlights:

• 8.5 percent net interest income growth year-over-year due to average loan growth and decreased funding costs.

• 3.40 percent net interest margin compared to 3.49 percent in 2010.

• 1.38 percent cost of interest bearing liabilities, decreased 36 basis points from the prior year.

• Balance sheet restructuring during the second quarter paid down $122.2 million of Federal Home Loan Bank of Boston advances at a weighted average cost of 4.17 percent and substantially liquidated the common and preferred stock portfolios.

• Strengthened management team across a number of lines and responsibilities to better position the company for balance sheet growth and to meet evolving regulatory requirements.

• Recruited former NewAlliance Bank heads of C&I lending, commercial real estate lending and cash management/treasury services along with five commercial relationship managers, doubling the company’s customer facing commercial banking staff.

• 19 percent commercial loan growth compared to the prior year.

• Sold residential mortgages totaling $57.2 million, realizing gains of $1.7 million.

• 22.3 percent demand deposit growth compared to prior year.

• 19.9 percent low cost core deposit growth compared to prior year.

• 8.8 percent total deposit growth compared to prior year.

Rockville Bank has 22 branches serving Tolland, Hartford and New London counties.