The especially harsh winter dampened loan production in the first quarter at Westfield Financial, but the company still posted double-digit loan growth on a year-over-year basis.
The holding company for Westfield Bank posted net income of $1.3 million, or 8 cents per share, for the quarter ended March 31, a year-over-year decline of about 18 percent from $1.6 million, or 9 cents per share, last year.
“During the first quarter, harsh winter weather slowed economic activity, and therefore loan demand, particularly commercial construction projects,” President and CEO James C. Hagan said in a statement. “We continue to cultivate new and existing customer relationships in western Massachusetts and northern Connecticut, and our outlook for growth remains positive for 2015. We have an experienced, disciplined, regional leadership team prepared to take advantage of continued opportunities for organic growth and expansion into demographically attractive markets.”
Compared with the year-ago period, total loans increased $82.2 million, or 12.7 percent, to $730.4 million in the first quarter. Year-over-year, residential, commercial and industrial (C&I) and commercial real estate loans increased $38.9 million, $29.8 million and $13 million, respectively. Compared with the prior quarter, loans grew $5.7 million, or 0.8 percent. Commercial real estate loans increased $8.7 million over that time frame, but that was offset by a $2.8 million decline in C&I loans, largely due to normal payoffs and pay downs.
Net interest and dividend income decreased $65,000 to $7.6 million from $7.7 million for the comparable period last year. From the prior quarter, net interest and dividend income declined $288,000. The fourth quarter of 2014 included $88,000 in deferred fee income recognized upon the payoff of a relationship.
The bank prepaid a repurchase agreement in the amount of $10 million with a rate of 2.65 percent and incurred a prepayment expense of $593,000 for the first quarter 2015 in order to eliminate a higher-cost liability.
Non-interest expense totaled $6.7 million in the first quarter, compared with $6.5 million a year ago. On a sequential-quarter basis, noninterest expense increased by $215,000 for the quarter ended from $6.5 million in the fourth quarter 2014. The increase on a sequential-quarter basis was due in part to an increase in salaries and benefits of $178,000. Of this amount, $51,000 is attributable to salary-related taxes which are typically higher in the first quarter of each year.
In the statement announcing the company’s earnings, Hagan also touted $23 million in combined deposits across the bank’s Enfield and Granby branches. He also noted the relocation of a commercial loan team to the downtown Springfield area and said he anticipates adding another commercial lender in Connecticut this year.
“We have taken action to strategically expand our market reach, and while this initially has increased non-interest expense, we feel this will create opportunities to grow our franchise and generate higher revenue,” he said.
