GuruFocus Premium Membership

Serving Intelligent Investors since 2004. Only 96 cents a day.

Free Trial

Free 7-day Trial
All Articles and Columns »

Rockville Financial Inc. Reports Operating Results (10-Q)

November 09, 2010 | About:
insider

10qk

18 followers
Rockville Financial Inc. (RCKB) filed Quarterly Report for the period ended 2010-09-30.

Rockville Financial Inc. has a market cap of $221.9 million; its shares were traded at around $11.35 with and P/S ratio of 2.7. The dividend yield of Rockville Financial Inc. stocks is 2.1%. Rockville Financial Inc. had an annual average earning growth of 9.3% over the past 5 years.

Highlight of Business Operations:

The unallocated allowance represents the results of an analysis that measures the probable losses inherent in each portfolio. If the allowance for loan losses is too low, the Company may incur higher provisions for loan loss expense in the future resulting in lower net income. If an estimate of the allowance for loan losses is too high, the Company may experience lower provisions for loan loss expense resulting in higher net income. The unallocated allowance increased to $279,000 as of September 30, 2010 from $209,000 as of December 31, 2009. The unallocated allowance supports the possible loss that exists in emerging problem loans that cannot be fully quantified or disposition costs that may be affected by conditions not fully understood at this time. Based on the qualitative assessment of the portfolio and in thorough consideration of non-performing loans, management believes that the allowance for loan losses properly supports the level of associated loss and risk.

Net income increased by $919,000 to $3.3 million for the quarter ended September 30, 2010 compared to $2.3 million for the same period last year. The increase in net income primarily resulted from an increase in net interest income of $2.3 million and non-interest income of $937,000 which was partially offset by an increase of $1.0 million in non-interest expense, an increase of $602,000 in the provision for loan loss expense and an increase in income tax provision of $635,000. The increase in net interest income was due to a reduction of deposit expense of $2.0 million and higher interest and dividend income of $385,000. The increase in non-interest income was the result of the recognition of gains made on the sale of loans held for sale totaling

$669,000 compared to $328,000 in the third quarter of 2009 and a $572,000 increase in service charges and fees to $1.9 million in the third quarter of 2010. The increase in service charges and fees resulted from $628,000 of loan fee income generated by Rockville Bank Mortgage, Inc. and an additional $82,000 in ATM fees which was offset by a net reduction in insufficient funds fees totaling $123,000 compared to the third quarter of 2009.

Non-interest expense increased $1.0 million for the quarter-ended September 2010 as compared to the same period in 2009. Increases in salaries and employee benefits of $248,000, service bureau fees of $68,000, professional fees of $176,000, marketing and promotions of $98,000, FDIC assessments of $31,000 and other real estate owned of $487,000, including $380,000 in write offs, and reductions in occupancy and equipment of $71,000 accounted for much of the increase for the quarter. Income before income taxes increased $1.5 million to $5.1 million in the third quarter of 2010 from $3.6 million for the same quarter last year.

Year to date net income increased by $2.7 million to $9.6 million compared to $6.9 million for the same period last year. The increase in net income resulted from an increase in net interest income of $6.2 million and additional non-interest income of $1.4 million, which was partially offset by increases in the provision for loan loss expense of $1.8 million, non-interest expense of $1.2 million and income tax provision of $1.9 million. The increase in net interest income was due to a reduction of interest expense on deposits of $6.8 million offset by lower interest and dividend income of $492,000. The increase of non-interest income resulted from $1.3 million of loan fee income generated by Rockville Bank Mortgage, Inc., an increase of $536,000 in gains on the sale of loans and the absence of additional other-than-temporary impairment charges compared to $357,000 last year. Offsetting these improvements was a reduction of $746,000 in securities gains in 2010 compared to the same period last year.

Non-interest expense increased $1.2 million for the nine-months ended September 2010 as compared to the same period in 2009. Increases in salaries and employee benefits of $487,000, service bureau fees of $82,000, professional fees of $233,000, marketing and promotions of $151,000, other real estate owned of $954,000 and reductions in occupancy and equipment of $86,000 and FDIC assessments of $667,000 accounted for much of the increase. Income before income taxes increased $4.6 million to $14.9 million in the first nine months of 2010 compared to $10.3 million compared to the same period last year.

Read the The complete Report

About the author:

10qk
GuruFocus - Stock Picks and Market Insight of Gurus

Rating: 1.0/5 (1 vote)

Comments

Please leave your comment:


Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
Free 7-day Trial
FEEDBACK