New Hampshire Thrift Bancshares, Inc. Announces Earnings for First Quarter of 2014

NEWPORT, NH--(Marketwired - Apr 14, 2014) - New Hampshire Thrift Bancshares, Inc. (the "Company") (NASDAQ: NHTB), the holding company for Lake Sunapee Bank, fsb (the "Bank"), today reported consolidated net income for the three months ended March 31, 2014, of $2.1 million, or $0.25 per common share, assuming dilution, compared to $2.1 million, or $0.27 per common share, assuming dilution, for same period in 2013, an increase of $92 thousand, or 4.49%. The weighted average numbers of common shares, assuming dilution, were 8,231,992 and 7,060,234 for the three periods ended March 31, 2014, and 2013, respectively.

"We are pleased by the positive impact of our 2013 acquisitions on earnings during the first quarter of 2014," President and Chief Executive Officer, Steve Theroux, stated. "Amidst a challenging residential market with refinancing demand waning, we experienced an increase in commercial lending which resulted in higher loan production volume during the first quarter compared to the same period last year. We continually strive to enhance our franchise value by taking advantage of our product platforms which offer a full array of financial products and services to benefit customers at any stage of their financial lives."

2013 Financial Highlights

• Total assets increased $11.6 million, or 0.82%, to $1.4 billion at March 31, 2014, from $1.4 billion at December 31, 2013.
  
  

• Net loans increased $20.9 million, or 1.85%, to $1.2 billion at March 31, 2014, from $1.1 billion at December 31, 2013.
  
  

• In the three months ended March 31, 2014, the Company originated $79.9 million in loans, compared to $77.7 million during to the same period in 2013.
  
  

• The Company's loan servicing portfolio was $413.2 million at March 31, 2014, compared to $417.3 million at December 31, 2013.
  
  

• Total deposits decreased $19.9 million, or 1.83%, to $1.1 billion at March 31, 2014, from $1.1 billion at December 31, 2013.
  
  

• Net interest and dividend income for the three months ended March 31, 2014, was $10.3 million compared to $8.2 million for the same period in 2013.
  
  

• Net income available to common stockholders was $2.1 million for the three months ended March 31, 2014, compared to $2.0 million for the same period in 2013
  
  

• As a percentage of total loans, non-performing loans decreased to 1.73% at March 31, 2014, from 1.86% at December 31, 2013.
  
  

Earnings Summary

Net income of $2.1 million for the three months ended March 31, 2014, includes an increase of $2.1 million, or 25.85%, in net interest and dividend income. The provision for loan losses decreased $414 thousand with no provisions required based on adequacy calculations for the three months ended March 31, 2014, compared to $414 thousand for the same period in 2013. Noninterest income increased $1.2 million, or 37.80%, to $4.4 million for the three months ended March 31, 2014, compared to $3.2 million for the same period in 2013. This increase includes the addition of $2.1 million from trust and investment management fees earned by Charter Trust Company during the three months ended March 31, 2014 and an increase of $252 thousand, or 21.25%, in customer service fees, partially offset by decreases of $159 thousand in net gains on sales and calls of securities, $881 thousand on net gains on sales of loans, and $98 thousand from our former equity position in Charter Holding Corp.

Noninterest expense increased $3.6 million, or 44.35%, to $11.6 million for the three months ended March 31, 2014, compared to $8.0 million for the same period in 2013. Within noninterest expense, salaries and employee benefits increased $1.7 million, or 39.73%, to $6.0 million for the three months ended March 31, 2014, compared to $4.3 million for the same period in 2013. This increase includes expenses related to additional staff and operations for Charter Trust Company, acquired in September 2013, and The Randolph National Bank and its eight branches, acquired in October 2013, which represent over 85% of the increase in salaries and employees benefits. Occupancy expense increased $502 thousand, or 46.65%, to $1.6 million for the three month period ended March 31, 2014, compared to the same period in 2013. The occupancy expenses from Charter Holding Corp. and former The Randolph National Bank branches represent $205 thousand and $281 thousand, respectively, representing nearly 97% of the increase in occupancy expenses. Depositors' insurance increased $94 thousand, or 53.11%, due to the growth in deposits comparing March 31, 2014 to March 31, 2013. The increase of $384 thousand in outside services for the three months ended March 31, 2014, compared to the same period in 2013 includes $246 thousand related to Charter Trust Company operations and an increase of $65 thousand related to our core processing provider. Amortization of intangible assets increased $243 thousand, or 126.56%, to $435 thousand for the three months ended March 31, 2014, compared to the same period in 2013 due to the additional core deposit intangible from the acquisition of The Randolph National Bank and the customer list intangible from the acquisition of Charter Holding Corp. Other expenses increased $403 thousand to $1.5 million for the three months ended March 31, 2014, including $221 thousand from Charter Trust Company operations and an increase of $80 thousand in tax-qualified contributions.

Balance Sheet Summary

Total assets were $1.4 billion at March 31, 2014, compared to $1.4 billion at December 31, 2013, an increase of $11.6 million, or 0.82%. Securities available-for-sale decreased $11.1 million to $114.1 million at March 31, 2014, from $125.2 million at December 31, 2013. Net loans held in portfolio increased $20.9 million, or 1.85%, to $1.2 billion million at March 31, 2014, from $1.1 billion at December 31, 2013. The allowance for loan losses was $9.8 million at March 31, 2014, compared to $9.8 million at December 31, 2013. The change of $20 thousand in the allowance for loan losses is the net effect of charge-offs of $223 thousand and recoveries of $243 thousand in addition to a net decrease of $3 thousand to the reserve for the overdraft protection program. Additionally, the Bank had a credit mark of $6.5 million at March 31, 2014 related to acquired loan balances of $184.1 million. Total loan production for the three months ended March 31, 2014 was 79.9 million in loans, compared to $77.7 million for the same period in 2013.

Goodwill increased $70 thousand, or 0.16%, to $44.7 million at March 31, 2014, from $44.6 million at December 31, 2013. Intangible assets decreased $435 thousand, or 3.95%, to $10.6 million at March 31, 2014, compared to $11.0 million at December 31, 2013. This reflects amortizations of intangible assets of $435 thousand for the three months ended March 31, 2014.

Total deposits decreased $19.9 million, or 1.83%, to $1.1 billion at March 31, 2014, from $1.1 billion at December 31, 2013. Advances from the Federal Home Loan Bank increased $34.3 million, or 28.14%, to $156.0 million at March 31, 2014, from $121.7 million at December 31, 2013. Securities sold under agreements to repurchase decreased $5.2 million, or 18.71%, to $22.7 million at March 31, 2014 from $27.9 million at December 31, 2013.

Stockholders' equity of $150.8 million resulted in a book value of $15.55 per common share at March 31, 2014, based on 8,219,442 shares of common stock outstanding. The Bank remains well capitalized with a Leverage Capital ratio of 8.42% at March 31, 2014.

Quarterly Dividend

On April 10, 2014, the Company declared a regular quarterly cash dividend of $0.13 per share payable April 30, 2014 to stockholders of record as of April 23, 2014.

About New Hampshire Thrift Bancshares, Inc.

New Hampshire Thrift Bancshares, Inc. is the holding company of Lake Sunapee Bank, fsb, a federally chartered savings bank that provides a wide range of life-cycle banking and financial services. Lake Sunapee Bank has four wholly owned subsidiaries: Lake Sunapee Financial Services Corp., Lake Sunapee Group, Inc., which owns and maintains all buildings and investment properties, McCrillis & Eldredge Insurance, Inc., a full-line independent insurance agency, and Charter Holding Corp., which wholly owns Charter Trust Company, a trust services and wealth management company. New Hampshire Thrift Bancshares, Inc., through its direct and indirect subsidiaries, operates 29 offices in New Hampshire in Grafton, Hillsborough, Merrimack and Sullivan counties and 18 offices in Vermont in Orange, Rutland and Windsor counties.

Forward-Looking Statements

The Company wishes to caution readers not to place undue reliance on any such forward-looking statements contained in this press release, which speak only as of the date made. Actual results may differ materially from those indicated by such forward-looking statements as a result of various important factors discussed under the caption "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2013, and in subsequent filings with the Securities and Exchange Commission. In addition, the forward-looking statements included in this press release represent our views as of the date of this release. The Company and Lake Sunapee Bank do not undertake and specifically decline any obligation to publicly release the result of any revisions that 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.

New Hampshire Thrift Bancshares, Inc.
Selected Financial Highlights
For the Three Months Ended March 31,			2014				2013
(Dollars in thousands except for per share data)
Net Income			$	2,143			$	2,052
Per Share Data:
	Basic Earnings			0.25				0.27
	Diluted Earnings (1)			0.25				0.27
	Dividends Paid			0.13				0.13
	Dividend Payout Ratio			52.00	%			48.15	%

			As of
(Dollars in thousands except for per share data)			March 31, 2014			December 31, 2013
Total Assets			$	1,435,469		$	1,422,207
Total Securities (2)				123,935			134,998
Loans, Net				1,155,053			1,134,110
Total Deposits				1,068,218			1,088,092
Federal Home Loan Bank Advances				155,986			121,734
Stockholders' Equity				150,778			149,257
Book Value per Common Share			$	15.55		$	15.37
Common Shares Outstanding				8,219,442			8,216,747
Leverage (Tier I) Capital				8.42	%		8.29	%
Number of Offices:
	Banking Offices			38			38
	Insurance Offices			3			3
	Trust Offices			6			6

(1)	Diluted earnings per share are calculated using the weighted-average number of shares outstanding for the period, including common stock equivalents, as appropriate.
(2)	Includes available-for-sale securities shown at fair value and Federal Home Loan Bank stock at cost.

New Hampshire Thrift Bancshares, Inc.
Consolidated Balance Sheets
					March 31,				December 31,
(Dollars in thousands)					2014				2013
ASSETS					(unaudited)
	Cash and due from banks				$	20,697			$	12,005
	Overnight deposits					15,179				21,573
			Total cash and cash equivalents			35,876				33,578
	Interest-bearing time deposits with other banks					1,245				1,743
	Securities available-for-sale					114,117				125,238
	Federal Home Loan Bank stock					9,818				9,760
	Loans held-for-sale					406				680
	Loans receivable, net of the allowance for loan losses of $9.8 million as of March 31, 2014, and $9.8 million as of December 31, 2013					1,155,053				1,134,110
	Accrued interest receivable					3,292				2,628
	Bank premises and equipment, net					24,576				23,842
	Investments in real estate					3,644				3,681
	Other real estate owned					1,208				1,343
	Goodwill					44,702				44,632
	Intangible assets					10,585				11,020
	Bank-owned life insurance					19,702				19,544
	Other assets					11,244				12,071
		Total assets			$	1,435,468			$	1,423,870
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
	Deposits:
			Noninterest-bearing		$	94,394			$	101,446
			Interest-bearing			973,824				986,646
			Total deposits			1,068,218				1,088,092
	Federal Home Loan Bank advances					155,986				121,734
	Securities sold under agreements to repurchase					22,667				27,885
	Subordinated debentures					20,620				20,620
	Accrued expenses and other liabilities					17,201				16,282
		Total liabilities				1,284,692				1,274,613
STOCKHOLDERS' EQUITY
	Preferred stock, $.01 par value per share: 2,500,000 shares authorized:
		Series B, fixed rate noncumulative perpetual, fixed rate cumulative perpetual, 23,000 shares issued and outstanding at March 31, 2014, and December 31, 2013				-				-
	Common stock, $.01 par value per share: 10,000,000 shares authorized, 8,653,771 shares issued and 8,219,442 shares outstanding as of March 31, 2014 and 8,651,076 shares issued and 8,216,747 shares outstanding as of December 31, 2013					87				87
	Paid-in capital					100,998				100,961
	Retained earnings					59,363				58,347
	Accumulated other comprehensive loss					(2,443	)			(2,897	)
	Unearned stock awards					(478	)			(490	)
	Treasury stock, at cost, 434,329 shares as of March 31, 2014 and December 31, 2013					(6,751	)			(6,751	)
		Total stockholders' equity				150,776				149,257
		Total liabilities and stockholders' equity			$	1,435,468			$	1,423,870

New Hampshire Thrift Bancshares, Inc.
Consolidated Statements of Income (unaudited)
				For the Three Months Ended March 31,
(Dollars in thousands except for per share data)				2014				2013
INTEREST AND DIVIDEND INCOME
	Interest and fees on loans			$	11,350			$	9,181
	Interest and dividends on debt investments
		Taxable			325				524
		Dividends			35				13
		Other			170				139
	Total interest and dividend income				11,880				9,857
INTEREST EXPENSE
	Interest on deposits				1,102				1,025
	Interest on advances and other borrowed money				525				684
	Total interest expense				1,627				1,709
	Net interest and dividend income				10,253				8,148
PROVISION FOR LOAN LOSSES					-				414
	Net interest and dividend income after provision for loan losses				10,253				7,734
NONINTEREST INCOME
	Customer service fees				1,438				1,186
	Net gain on sales and calls of securities				8				167
	Net gain on sales of loans				52				933
	Net gain on sales of premises and equipment				2				-
	Net loss on sales of other real estate owned				(2	)			-
	Rental income				175				183
	Realized gain in Charter Holding Corp.				-				98
	Bank owned life insurance income				149				128
	Insurance commission income				484				485
	Trust and investment management fees				2,076				-
	Total noninterest income				4,382				3,180

		For the Three Months Ended March 31,
(Dollars in thousands except for per share data)		2014			2013
NONINTEREST EXPENSES
Salaries and employee benefits			6,002			4,295
Occupancy and equipment expenses			1,578			1,076
Advertising and promotion			155			99
Depositors' insurance			271			177
Professional services			272			336
Data processing and outside services			703			319
Telephone			295			163
ATM processing fees			221			151
Supplies			164			129
Amortization of intangible assets			435			192
Other expenses			1,497			1,094
Total noninterest expenses			11,593			8,031
INCOME BEFORE PROVISION FOR INCOME TAXES			3,042			2,883
PROVISION FOR INCOME TAXES			899			831
NET INCOME		$	2,143		$	2,052
NET INCOME AVAILABLE TO COMMON STOCKHOLDERS		$	2,085		$	1,911
Earnings Per Common Share, basic		$	0.25		$	0.27
Earnings Per Common Share, assuming dilution (1)		$	0.25		$	0.27
Dividends Declared per common share		$	0.13		$	0.13

(1)	Diluted earnings per share are calculated using the weighted-average number of shares outstanding for the period, including common stock equivalents, as appropriate.