Connecticut Bancshares, Inc. Announces First Quarter Results, Higher Operating Profits

Apr 24, 2001, 01:00 ET from Connecticut Bancshares, Inc.

    MANCHESTER, Conn., April 24 /PRNewswire Interactive News Release/ --
 Connecticut Bancshares, Inc. (the "Company") (Nasdaq: SBMC), the holding
 company for The Savings Bank of Manchester (the "Bank"), reported net income
 of $3.69 million for the first quarter of 2001, compared to a net loss of
 $4.37 million for the first quarter of 2000.  Earnings per diluted share for
 the quarter ended March 31, 2001 were $0.34 based on 10.81 million weighted
 average shares outstanding.  Net income for first quarter 2000 was reduced by
 a one-time nonrecurring expense of $8.32 million ($5.57 million after tax)
 relating to the Company's establishment of SBM Charitable Foundation, Inc. in
 March 2000 in connection with the Bank's conversion from the mutual holding
 company form of organization to the stock holding company form of
 organization.  Due to the timing of the conversion, earnings per share for the
 three months ended March 31, 2000 are not presented. Gains and losses
 resulting from sales of securities affected earnings in the current and prior
 year periods.  In the first quarter of 2001 the Company recognized net
 security gains of $235,000 ($153,000 after tax) representing $0.01 per share
 after tax, while in the first quarter of 2000 the Company recognized net
 security losses of $1.76 million ($1.18 million after tax).
     Operating earnings, which exclude securities gains and the previously
 discussed nonrecurring expense of $8.32 million net of related tax effect,
 were significantly higher than the prior year's levels.  Operating earnings,
 net of tax, for the quarter ended March 31, 2001 were $3.53 million compared
 to $2.38 million in the first quarter of 2000.
     During the first quarter of 2001 the Company and First Federal Savings and
 Loan Association of East Hartford ("First Federal") entered in a definitive
 agreement under which the Bank will acquire all of the outstanding common
 stock of First Federal for cash equal to approximately $110.00 million.
 Immediately after the completion of the acquisition, First Federal will be
 merged into the Bank.  The Board of Directors of the Company expects the
 transaction to close in the third quarter of 2001.  The transaction is subject
 to approval by the First Federal shareholders and federal and state regulatory
 agencies.  Also during the first quarter of 2001, the Company declared a
 quarterly cash dividend of $0.09 per share on the outstanding shares of its
 common stock.  The dividend was paid on April 20, 2001 to stockholders of
 record as of the close of business on April 6, 2001.  This was the first
 dividend payment since the Company completed its initial public offering in
 March 2000.
     Company President and CEO, Richard P. Meduski, stated, "As we pass our one
 year anniversary as a public company, we have many achievements to be proud
 of.  We have increased our operating profits significantly.  We have initiated
 a quarterly dividend to our shareholders.  We have been able to expand our
 lending capabilities and our commitment to the community.  Our anticipated
 merger with First Federal will allow us to further meet the demands of today's
 consumers and businesses."
     First quarter 2001 earnings benefited from higher levels of interest
 earning assets and higher net interest margins, compared to year-earlier
 levels.  The capital raised in the conversion from mutual to stock holding
 company form of organization was the primary reason for the improvement in the
 Company's net interest margins.  Net interest income for the first quarter of
 2001 was $14.11 million, a $2.72 million or 23.88% increase over the $11.39
 million for the first quarter of 2000.
     Average interest-earning assets were $1.36 billion for the quarter ended
 March 31, 2001 compared to $1.24 billion for the prior period.  The Company's
 net interest margin was 4.14% for the quarter ended March 31, 2001 compared to
 3.65% for the prior period.
     Established in 1905, The Savings Bank of Manchester is one of
 Connecticut's oldest and largest independent banks - the seventh largest
 public banking institution based in Connecticut.  The Bank is headquartered in
 Manchester, Connecticut, with 23 branch offices serving 17 communities
 throughout central and eastern Connecticut.  The Bank is committed to
 operating as an independent bank, delivering quality customer service and a
 broad array of competitively priced retail and commercial products to
 customers.
     Statements contained in this news release, which are not historical facts,
 are forward-looking statements as that term is defined in the Private
 Securities Litigation Reform Act of 1995.  Such forward-looking statements are
 subject to risks and uncertainties, which could cause actual results to differ
 materially from those currently anticipated due to a number of factors, which
 include, but are not limited to, factors discussed in documents filed by the
 Company with the Securities and Exchange Commission from time to time.  The
 Company does not undertake - and specifically disclaims any obligation - to
 publicly release the results of any revisions which may be made to any
 forward-looking statements to reflect events or circumstances after the date
 of such statements or to reflect the occurrence of anticipated or
 unanticipated events.
 
 
     CONNECTICUT BANCSHARES, INC. AND SUBSIDIARY
 
     Consolidated Statements of Condition
     (dollars in thousands)
                                    March 31,      March 31,      December 31,
                                      2001           2000             2000
     ASSETS                        (unaudited)    (unaudited)     (unaudited)
     Cash and due from banks:
       Non-interest-bearing
        deposits and cash            $13,846         $28,990       $23,905
       Short-term investments         68,176         130,000        40,892
         Cash and cash equivalents    82,022         158,990        64,797
     Securities available for sale
      (cost of $264,486 at
       March 31, 2001, $ 159,732
       at March 31, 2000 and
       $287,830 at
        December 31, 2000)           280,507         179,791       308,081
     Loans held for sale                 434              35           290
     Loans:
       One- to four-family
        residential mortgages        598,606         565,374       586,536
     Construction mortgages           34,402          37,514        32,590
     Commercial and multi-family
       mortgages                     172,189         160,252       162,411
     Commercial business             147,177         139,739       146,360
     Installment                      80,106          75,273        79,561
        Total loans, gross         1,032,480         978,152     1,007,458
     Allowance for loan losses        12,064          10,947        11,694
        Total loans, net           1,020,416         967,205       995,764
     Federal Home Loan Bank Stock,
      at cost                          7,492           6,654         6,654
     Premises and equipment, net      13,003          14,253        13,197
     Accrued interest receivable       8,364           6,424         8,747
     Other real estate owned               -             283           125
     Current and deferred income taxes 1,414               -             -
     Intangible assets                 1,859           2,291         1,967
     Other assets                      4,365           4,180         3,689
 
         Total assets             $1,419,876      $1,340,106    $1,403,311
 
     LIABILITIES AND STOCKHOLDERS' EQUITY
 
     Deposits:
       Savings and money market    $ 304,843       $ 297,026     $ 292,700
       Certificates of deposit       451,077         434,511       439,839
       NOW Accounts                  131,599         120,493       131,536
       Demand deposits                64,515          53,649        69,295
         Total deposits              952,034         905,679       933,370
     Short-term borrowed funds       102,211         116,308       106,493
     Mortgagors escrow accounts        5,692           5,533         8,896
     Advances from Federal
      Home Loan Bank                 120,000          84,000       100,000
     Current and deferred
      income taxes                         -              40           419
     Accrued benefits and
      other liabilities               16,133           8,538        21,594
 
         Total liabilities         1,196,070       1,120,098     1,170,772
 
     Stockholders' equity:
      Common stock ($.01 par value; 45,000,000 authorized
      shares; 11,232,000 shares issued and outstanding at
      March 31, 2001, March 31, 2000
      and December 31, 2000)             112             112           112
     Additional paid-in capital      107,233         108,022       108,257
     Retained earnings               122,366         107,940       119,691
     ESOP unearned compensation      (8,530)         (9,305)       (8,685)
     Restricted stock unearned
      compensation                   (7,789)               -             -
     Accumulated other
      comprehensive income            10,414          13,239        13,164
 
         Total stockholders' equity  223,806         220,008       232,539
 
         Total liabilities and
          stockholders' equity    $1,419,876      $1,340,106    $1,403,311
 
 
     CONNECTICUT BANCSHARES, INC. AND SUBSIDIARY
 
     Consolidated Statements of Operations
     (dollars in thousands except for earnings per share)
 
                                              For the Quarters Ended March 31,
                                                        2001           2000
                                                             (unaudited)
     Interest and dividend income:
       Interest income on loans                       $19,943        $17,961
       Interest and dividends on securities             5,131          3,784
 
         Total interest and dividend income            25,074         21,745
 
     Interest expense:
       Interest on deposits                             8,548          8,264
       Interest on short-term borrowed funds              775            785
       Interest on Advances from Federal
        Home Loan Bank                                  1,642          1,302
 
         Total interest expense                        10,965         10,351
 
     Net interest income                               14,109         11,394
     Provision for loan losses                            375            225
 
     Net interest income after
      provision for loan losses                        13,734         11,169
 
     Noninterest income:
       Service charges and fees                         2,151          1,658
       Gains (losses) on sales of securities, net         235        (1,755)
       Gains on mortgage loan sales, net                   82             38
       Other                                              425            576
 
         Total noninterest income                       2,893            517
 
 
     Noninterest expense:
       Salaries                                         4,087          4,008
       Employee benefits                                2,128          1,421
       Fees and services                                1,496            923
       Occupancy, net                                     822            827
       Furniture and equipment                            760            770
       Marketing                                          440            323
       Foreclosed real estate expense                      39            114
       Net gains on sales of other real estate owned      (8)           (26)
       Securities contributed to
        SBM Charitable Foundation, Inc.                     -          8,316
       Other operating expenses                         1,278          1,530
 
         Total noninterest expense                     11,042         18,206
 
     Income (loss) before provision
      for (benefit from) income taxes                   5,585        (6,520)
     Provision for (benefit from) income taxes          1,899        (2,152)
 
         Net income (loss)                             $3,686       $(4,368)
 
 
     Earnings per share (1):
       Basic                                           $ 0.36            N/A
       Diluted                                         $ 0.34            N/A
 
     Weighted average shares outstanding:
       Basic                                       10,342,256            N/A
       Diluted                                     10,806,862            N/A
 
     (1) Earnings per share is calculated for the three months ended March 31,
 2001 only.  The Company converted to stock form on March 1, 2000, therefore
 per share amounts for the three months ended March 31, 2000 are not
 meaningful.
 
 
     Connecticut Bancshares, Inc. and Subsidiary
     Selected Financial Data
     (dollars in thousands, except per share amounts)
 
                                               For the Quarters ended March 31,
                                                         2001         2000
                                                             (unaudited)
     Operating ratios:
       Return on average assets                         1.08%        (1.39%)
       Return on average stockholders' equity           6.42%       (12.00%)
       Average stockholders' equity to
        average assets                                 16.84%         11.55%
 
     Yields:
       Net interest rate spread                         3.29%          3.00%
       Net interest margin                              4.14%          3.65%
 
     Gross loans                                        7.85%          7.51%
     Securities and short term investments              6.11%          5.38%
     Total interest-earning assets                      7.42%          7.03%
 
     Interest-bearing deposits and escrow               3.99%          3.91%
     Short-term borrowed funds                          3.16%          3.22%
     Advances from Federal Home Loan Bank               6.18%          6.09%
     Total interest-bearing liabilities                 4.13%          4.03%
 
     Allowance for loan losses summary:
       Allowance for loan losses, beginning
        of period                                     $11,694        $10,617
       Provision for loan losses                          375            225
       Loans charged off                                   60             65
       Recoveries of loans previously charged off        (55)          (170)
        Net charge offs (recoveries)                        5          (105)
       Allowance for loan losses, end of period       $12,064        $10,947
 
 
     Net charge offs (recoveries)
      to average gross loans (annualized)               0.00%        (0.04%)
     Allowance for loan losses to:
        Total gross loans                               1.17%          1.12%
        Total nonperforming loans                     162.52%        104.45%
 
 
                                             At March 31,       At December 31,
                                         2001           2000           2000
     Other selected data:
       Nonperforming loans           $ 7,423         $10,481        $6,921
       Other real estate owned             -             283           125
         Total nonperforming assets  $ 7,423         $10,764        $7,046
 
     Total nonperforming
      loans as a percentage
      of total gross loans             0.72%           1.07%         0.69%
     Total nonperforming assets
      as a percentage
      of total assets                  0.52%           0.80%         0.50%
 
     Shares outstanding           11,232,000      11,232,000    11,232,000
     Book value per share            $ 19.93         $ 19.59        $20.70
     Market value per share          $ 20.88         $ 10.81        $18.25
 
 
      Contact:
      Connecticut Bancshares, Inc.
      Michael J. Hartl
      Senior Vice President and Chief Financial Officer
      (860) 646-1700
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X58138870
 
 

SOURCE Connecticut Bancshares, Inc.
    MANCHESTER, Conn., April 24 /PRNewswire Interactive News Release/ --
 Connecticut Bancshares, Inc. (the "Company") (Nasdaq: SBMC), the holding
 company for The Savings Bank of Manchester (the "Bank"), reported net income
 of $3.69 million for the first quarter of 2001, compared to a net loss of
 $4.37 million for the first quarter of 2000.  Earnings per diluted share for
 the quarter ended March 31, 2001 were $0.34 based on 10.81 million weighted
 average shares outstanding.  Net income for first quarter 2000 was reduced by
 a one-time nonrecurring expense of $8.32 million ($5.57 million after tax)
 relating to the Company's establishment of SBM Charitable Foundation, Inc. in
 March 2000 in connection with the Bank's conversion from the mutual holding
 company form of organization to the stock holding company form of
 organization.  Due to the timing of the conversion, earnings per share for the
 three months ended March 31, 2000 are not presented. Gains and losses
 resulting from sales of securities affected earnings in the current and prior
 year periods.  In the first quarter of 2001 the Company recognized net
 security gains of $235,000 ($153,000 after tax) representing $0.01 per share
 after tax, while in the first quarter of 2000 the Company recognized net
 security losses of $1.76 million ($1.18 million after tax).
     Operating earnings, which exclude securities gains and the previously
 discussed nonrecurring expense of $8.32 million net of related tax effect,
 were significantly higher than the prior year's levels.  Operating earnings,
 net of tax, for the quarter ended March 31, 2001 were $3.53 million compared
 to $2.38 million in the first quarter of 2000.
     During the first quarter of 2001 the Company and First Federal Savings and
 Loan Association of East Hartford ("First Federal") entered in a definitive
 agreement under which the Bank will acquire all of the outstanding common
 stock of First Federal for cash equal to approximately $110.00 million.
 Immediately after the completion of the acquisition, First Federal will be
 merged into the Bank.  The Board of Directors of the Company expects the
 transaction to close in the third quarter of 2001.  The transaction is subject
 to approval by the First Federal shareholders and federal and state regulatory
 agencies.  Also during the first quarter of 2001, the Company declared a
 quarterly cash dividend of $0.09 per share on the outstanding shares of its
 common stock.  The dividend was paid on April 20, 2001 to stockholders of
 record as of the close of business on April 6, 2001.  This was the first
 dividend payment since the Company completed its initial public offering in
 March 2000.
     Company President and CEO, Richard P. Meduski, stated, "As we pass our one
 year anniversary as a public company, we have many achievements to be proud
 of.  We have increased our operating profits significantly.  We have initiated
 a quarterly dividend to our shareholders.  We have been able to expand our
 lending capabilities and our commitment to the community.  Our anticipated
 merger with First Federal will allow us to further meet the demands of today's
 consumers and businesses."
     First quarter 2001 earnings benefited from higher levels of interest
 earning assets and higher net interest margins, compared to year-earlier
 levels.  The capital raised in the conversion from mutual to stock holding
 company form of organization was the primary reason for the improvement in the
 Company's net interest margins.  Net interest income for the first quarter of
 2001 was $14.11 million, a $2.72 million or 23.88% increase over the $11.39
 million for the first quarter of 2000.
     Average interest-earning assets were $1.36 billion for the quarter ended
 March 31, 2001 compared to $1.24 billion for the prior period.  The Company's
 net interest margin was 4.14% for the quarter ended March 31, 2001 compared to
 3.65% for the prior period.
     Established in 1905, The Savings Bank of Manchester is one of
 Connecticut's oldest and largest independent banks - the seventh largest
 public banking institution based in Connecticut.  The Bank is headquartered in
 Manchester, Connecticut, with 23 branch offices serving 17 communities
 throughout central and eastern Connecticut.  The Bank is committed to
 operating as an independent bank, delivering quality customer service and a
 broad array of competitively priced retail and commercial products to
 customers.
     Statements contained in this news release, which are not historical facts,
 are forward-looking statements as that term is defined in the Private
 Securities Litigation Reform Act of 1995.  Such forward-looking statements are
 subject to risks and uncertainties, which could cause actual results to differ
 materially from those currently anticipated due to a number of factors, which
 include, but are not limited to, factors discussed in documents filed by the
 Company with the Securities and Exchange Commission from time to time.  The
 Company does not undertake - and specifically disclaims any obligation - to
 publicly release the results of any revisions which may be made to any
 forward-looking statements to reflect events or circumstances after the date
 of such statements or to reflect the occurrence of anticipated or
 unanticipated events.
 
 
     CONNECTICUT BANCSHARES, INC. AND SUBSIDIARY
 
     Consolidated Statements of Condition
     (dollars in thousands)
                                    March 31,      March 31,      December 31,
                                      2001           2000             2000
     ASSETS                        (unaudited)    (unaudited)     (unaudited)
     Cash and due from banks:
       Non-interest-bearing
        deposits and cash            $13,846         $28,990       $23,905
       Short-term investments         68,176         130,000        40,892
         Cash and cash equivalents    82,022         158,990        64,797
     Securities available for sale
      (cost of $264,486 at
       March 31, 2001, $ 159,732
       at March 31, 2000 and
       $287,830 at
        December 31, 2000)           280,507         179,791       308,081
     Loans held for sale                 434              35           290
     Loans:
       One- to four-family
        residential mortgages        598,606         565,374       586,536
     Construction mortgages           34,402          37,514        32,590
     Commercial and multi-family
       mortgages                     172,189         160,252       162,411
     Commercial business             147,177         139,739       146,360
     Installment                      80,106          75,273        79,561
        Total loans, gross         1,032,480         978,152     1,007,458
     Allowance for loan losses        12,064          10,947        11,694
        Total loans, net           1,020,416         967,205       995,764
     Federal Home Loan Bank Stock,
      at cost                          7,492           6,654         6,654
     Premises and equipment, net      13,003          14,253        13,197
     Accrued interest receivable       8,364           6,424         8,747
     Other real estate owned               -             283           125
     Current and deferred income taxes 1,414               -             -
     Intangible assets                 1,859           2,291         1,967
     Other assets                      4,365           4,180         3,689
 
         Total assets             $1,419,876      $1,340,106    $1,403,311
 
     LIABILITIES AND STOCKHOLDERS' EQUITY
 
     Deposits:
       Savings and money market    $ 304,843       $ 297,026     $ 292,700
       Certificates of deposit       451,077         434,511       439,839
       NOW Accounts                  131,599         120,493       131,536
       Demand deposits                64,515          53,649        69,295
         Total deposits              952,034         905,679       933,370
     Short-term borrowed funds       102,211         116,308       106,493
     Mortgagors escrow accounts        5,692           5,533         8,896
     Advances from Federal
      Home Loan Bank                 120,000          84,000       100,000
     Current and deferred
      income taxes                         -              40           419
     Accrued benefits and
      other liabilities               16,133           8,538        21,594
 
         Total liabilities         1,196,070       1,120,098     1,170,772
 
     Stockholders' equity:
      Common stock ($.01 par value; 45,000,000 authorized
      shares; 11,232,000 shares issued and outstanding at
      March 31, 2001, March 31, 2000
      and December 31, 2000)             112             112           112
     Additional paid-in capital      107,233         108,022       108,257
     Retained earnings               122,366         107,940       119,691
     ESOP unearned compensation      (8,530)         (9,305)       (8,685)
     Restricted stock unearned
      compensation                   (7,789)               -             -
     Accumulated other
      comprehensive income            10,414          13,239        13,164
 
         Total stockholders' equity  223,806         220,008       232,539
 
         Total liabilities and
          stockholders' equity    $1,419,876      $1,340,106    $1,403,311
 
 
     CONNECTICUT BANCSHARES, INC. AND SUBSIDIARY
 
     Consolidated Statements of Operations
     (dollars in thousands except for earnings per share)
 
                                              For the Quarters Ended March 31,
                                                        2001           2000
                                                             (unaudited)
     Interest and dividend income:
       Interest income on loans                       $19,943        $17,961
       Interest and dividends on securities             5,131          3,784
 
         Total interest and dividend income            25,074         21,745
 
     Interest expense:
       Interest on deposits                             8,548          8,264
       Interest on short-term borrowed funds              775            785
       Interest on Advances from Federal
        Home Loan Bank                                  1,642          1,302
 
         Total interest expense                        10,965         10,351
 
     Net interest income                               14,109         11,394
     Provision for loan losses                            375            225
 
     Net interest income after
      provision for loan losses                        13,734         11,169
 
     Noninterest income:
       Service charges and fees                         2,151          1,658
       Gains (losses) on sales of securities, net         235        (1,755)
       Gains on mortgage loan sales, net                   82             38
       Other                                              425            576
 
         Total noninterest income                       2,893            517
 
 
     Noninterest expense:
       Salaries                                         4,087          4,008
       Employee benefits                                2,128          1,421
       Fees and services                                1,496            923
       Occupancy, net                                     822            827
       Furniture and equipment                            760            770
       Marketing                                          440            323
       Foreclosed real estate expense                      39            114
       Net gains on sales of other real estate owned      (8)           (26)
       Securities contributed to
        SBM Charitable Foundation, Inc.                     -          8,316
       Other operating expenses                         1,278          1,530
 
         Total noninterest expense                     11,042         18,206
 
     Income (loss) before provision
      for (benefit from) income taxes                   5,585        (6,520)
     Provision for (benefit from) income taxes          1,899        (2,152)
 
         Net income (loss)                             $3,686       $(4,368)
 
 
     Earnings per share (1):
       Basic                                           $ 0.36            N/A
       Diluted                                         $ 0.34            N/A
 
     Weighted average shares outstanding:
       Basic                                       10,342,256            N/A
       Diluted                                     10,806,862            N/A
 
     (1) Earnings per share is calculated for the three months ended March 31,
 2001 only.  The Company converted to stock form on March 1, 2000, therefore
 per share amounts for the three months ended March 31, 2000 are not
 meaningful.
 
 
     Connecticut Bancshares, Inc. and Subsidiary
     Selected Financial Data
     (dollars in thousands, except per share amounts)
 
                                               For the Quarters ended March 31,
                                                         2001         2000
                                                             (unaudited)
     Operating ratios:
       Return on average assets                         1.08%        (1.39%)
       Return on average stockholders' equity           6.42%       (12.00%)
       Average stockholders' equity to
        average assets                                 16.84%         11.55%
 
     Yields:
       Net interest rate spread                         3.29%          3.00%
       Net interest margin                              4.14%          3.65%
 
     Gross loans                                        7.85%          7.51%
     Securities and short term investments              6.11%          5.38%
     Total interest-earning assets                      7.42%          7.03%
 
     Interest-bearing deposits and escrow               3.99%          3.91%
     Short-term borrowed funds                          3.16%          3.22%
     Advances from Federal Home Loan Bank               6.18%          6.09%
     Total interest-bearing liabilities                 4.13%          4.03%
 
     Allowance for loan losses summary:
       Allowance for loan losses, beginning
        of period                                     $11,694        $10,617
       Provision for loan losses                          375            225
       Loans charged off                                   60             65
       Recoveries of loans previously charged off        (55)          (170)
        Net charge offs (recoveries)                        5          (105)
       Allowance for loan losses, end of period       $12,064        $10,947
 
 
     Net charge offs (recoveries)
      to average gross loans (annualized)               0.00%        (0.04%)
     Allowance for loan losses to:
        Total gross loans                               1.17%          1.12%
        Total nonperforming loans                     162.52%        104.45%
 
 
                                             At March 31,       At December 31,
                                         2001           2000           2000
     Other selected data:
       Nonperforming loans           $ 7,423         $10,481        $6,921
       Other real estate owned             -             283           125
         Total nonperforming assets  $ 7,423         $10,764        $7,046
 
     Total nonperforming
      loans as a percentage
      of total gross loans             0.72%           1.07%         0.69%
     Total nonperforming assets
      as a percentage
      of total assets                  0.52%           0.80%         0.50%
 
     Shares outstanding           11,232,000      11,232,000    11,232,000
     Book value per share            $ 19.93         $ 19.59        $20.70
     Market value per share          $ 20.88         $ 10.81        $18.25
 
 
      Contact:
      Connecticut Bancshares, Inc.
      Michael J. Hartl
      Senior Vice President and Chief Financial Officer
      (860) 646-1700
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X58138870
 
 SOURCE  Connecticut Bancshares, Inc.