New Hampshire Thrift Bancshares, Inc. Announces Earnings for Third Quarter

NEWPORT, NH--(Marketwire - Oct 15, 2012) - 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 nine months ended September 30, 2012, of $6.1 million, or $0.94 per diluted common share, compared to $6.0 million, or $0.96 per diluted common share for same period in 2011, an increase of $86 thousand, or 1.42%. For the quarter ended September 30, 2012, the Company reported consolidated net income of $2.0 million, or $0.32 per diluted common share compared to $2.0 million, or $0.31 per diluted common share, for the quarter ended September 30, 2011, an increase of $17 thousand, or 0.84%.

Financial Highlights

• Total assets increased $76.5 million, or 7.34%, to $1.1 billion at September 30, 2012, from $1.0 billion at December 31, 2011.
  
  
• Net loans increased $95.3 million, or 13.34%, to $810.3 million at September 30, 2012, from $715.0 million at December 31, 2011.
  
  
• The Company originated $323.3 million in loans for the nine months ended September 30, 2012, compared to $195.8 million for the same period in 2011.
  
  
• The Company's loan servicing portfolio was $361.1 million at September 30, 2012, compared to $365.8 million at December 31, 2011.
  
  
• Total deposits increased $27.6 million, or 3.44%, to $830.7 million at September 30, 2012, from $803.0 million at December 31, 2011.
  
  
• Net interest and dividend income for the nine months ended September 30, 2012, was $21.7 million compared to $21.5 million for the same period in 2011.
  
  
• Net income available to common stockholders was $5.5 million for the nine months ended September 30, 2012, compared to $5.6 million for the same period in 2011.
  
  
• The Company's returns on average assets and average equity for the nine months ended September 30, 2012, were 0.82% and 7.24%, respectively, compared to 0.88% and 7.91%, respectively, for the same period in 2011.
  
  
• As a percentage of total loans, non-performing loans decreased from 2.32% at December 31, 2011, to 2.04% at September 30, 2012.

Earnings Summary

Net income of $6.1 million for the nine months ended September 30, 2012 includes an increase of $196 thousand, or 0.91%, in net interest and dividend income compared to the same period in 2011. The provision for loan losses increased $1.3 million, to $2.3 million for the nine months ended September 30, 2012, compared to $984 thousand for the same period in 2011. Noninterest income increased $2.9 million, or 36.11%, to $10.8 million for the nine months ended September 30, 2012, compared to $8.0 million for the same period in 2011. This increase includes increases of $971 thousand in net gains on the sales of loans, $1.2 million in net gains on sales and calls of securities, and $1.0 million in insurance commission income. Noninterest expense increased $1.5 million, or 7.50%, to $21.5 million for the nine months ended September 30, 2012, compared to $20.0 million for the same period in 2011. Within noninterest expense, salaries and employee benefits increased $628 thousand, or 5.97%, to $11.2 million for the nine months ended September 30, 2012, compared to $10.5 million for the same period in 2011, including $532 thousand of salaries and employees benefits of the insurance agency, which was acquired on November 10, 2011.

Net income of $2.0 million for the quarter ended September 30, 2012 includes an increase of $98 thousand, or 1.37%, in net interest and dividend income compared to the same period in 2011. The provision for loan losses increased $458 thousand to $1.0 million for the quarter ended September 30, 2012, compared to $574 thousand for the same period in 2011. Noninterest income increased $1.0 million, or 36.40%, to $3.9 million for the quarter ended September 30, 2012, compared to $2.9 million for the same period in 2011. This increase includes increases of $645 thousand in net gains on the sales of loans, $162 thousand in net gains on sales and calls of securities, and $343 thousand in insurance commission income. Noninterest expense increased $513 thousand, or 7.60%, to $7.3 million for the quarter ended September 30, 2012, compared to $6.8 million for the same period in 2011.

Balance Sheet Summary

Total assets were $1.1 billion at September 30, 2012, compared to $1.0 billion at December 31, 2011, an increase of 7.34%. Securities available-for-sale decreased $36.1 million to $174.2 million at September 30, 2012, from $210.3 million at December 31, 2011. Net loans held in portfolio increased $95.3 million, or 13.34% to $810.3 million at September 30, 2012, from $715.0 million at December 31, 2011. The allowance for loan losses was $9.8 million at September 30, 2012, compared to $9.1 million at December 31, 2011. Within the allowance for loan losses is the net effect of provisions of $2.2 million, charge-offs of $1.9 million, and recoveries of $390 thousand during the nine months ended September 30, 2012. As a percentage of total loans, non-performing loans decreased from 2.32% at December 31, 2011, to 2.04% at September 30, 2012. The Company originated $323.3 million in loans for the nine months ended September 30, 2012, compared to $195.8 million for the same period in 2011. Loan production during the second quarter of 2012 was $116.5 million compared to $63.8 million for the same period in 2011.

Total deposits increased $27.6 million, or 3.44%, to $830.7 million at September 30, 2012, from $803.0 million at December 31, 2011. Within deposits, savings and money market accounts increased $29.2 million, transaction accounts increased $7.8 million, brokered deposits increased $15.0 million, and time deposits decreased $24.4 million. Advances from the Federal Home Loan Bank increased $40.0 million, or 49.41% to $121.0 million at September 30, 2012, from $81.0 million at December 31, 2011.

Stockholders' equity of $112.0 million resulted in a book value of $15.58 per common share at September 30, 2012, based on 5,902,402 shares of common stock outstanding, an increase of $0.38, or 2.50%, per common share from December 31, 2011. As previously announced, a regular quarterly dividend of $0.13 per share is payable on October 31, 2012 to stockholders of record of October 24, 2012. The Bank remains well-capitalized with a Tier I (Leverage) Capital ratio of 9.22% at September 30, 2012.

Acquisition of The Nashua Bank

On August 1, 2012, the Company announced the execution of a definitive agreement in which it will acquire The Nashua Bank in an exchange of cash and stock (the "Merger"). The Nashua Bank will merge with and into the Bank and will operate under the name "The Nashua Bank, a division of Lake Sunapee Bank." Completion of the transaction is subject to customary closing conditions, including the receipt of regulatory approval and the approval of The Nashua Bank's shareholders. The transaction is expected to close in the fourth quarter of 2012.

For additional information, please see the Current Report on Form 8-K filed with the Securities and Exchange Commission on August 7, 2012.

About New Hampshire Thrift Bancshares, Inc.

New Hampshire Thrift Bancshares, Inc. is the bank holding company of Lake Sunapee Bank, fsb, a federally-chartered stock savings bank, which provides a wide range of banking and financial service, and McCrillis & Eldredge Insurance, Inc., a full-line independent insurance agency which offers a complete range of commercial insurance services and consumer products. These wholly-owned subsidiaries operate through 29 offices strategically located within the greater Dartmouth-Lake Sunapee-Kearsarge and Monadnock regions of west-central New Hampshire and central Vermont. New Hampshire Thrift Bancshares, Inc. has total assets of approximately $1.1 billion.

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, 2011, 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 the 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
(Dollars in thousands except for per share data)
		For the three months ended September 30,								For the nine months ended September 30,
		2012				2011				2012				2011
Net Income		$	2,030			$	2,013			$	6,124			$	6,038
Per Share Data:
	Basic Earnings	$	0.32			$	0.31			$	0.94			$	0.96
	Diluted Earnings (1)		0.32				0.31				0.94				0.96
	Dividends Declared		0.13				0.13				0.39				0.39
	Dividend Payout Ratio		40.63	%			41.94	%			41.49	%			40.63	%

		As of
		September 30, 2012				December 31, 2011
(Dollars in thousands except for per share data)
Total Assets		$	1,118,361			$	1,041,819
Total Securities (2)			183,370				217,933
Loans, Net			810,307				714,952
Total Deposits			830,664				803,023
Federal Home Loan Bank Advances			120,974				80,967
Stockholders' Equity			111,986				108,660
Book Value per Common Share		$	15.58			$	15.20
Common Shares Outstanding			5,902,402				5,832,360
Tier I (Core) Capital			9.21	%			9.58	%
Number of Locations			29				30

(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
					As of
(Dollars in thousands, except for per share data)					September 30, 2012				December 31, 2011
ASSETS					(unaudited)
	Cash and due from banks				$	16,839			$	21,841
	Federal Reserve Bank interest-bearing deposit					12,000				2,899
			Total cash and cash equivalents			28,839				24,740
	Securities available-for-sale					174,247				210,318
	Federal Home Loan Bank stock					9,123				7,615
	Loans held-for-sale					10,718				3,434
	Loans receivable, net					810,307				714,952
	Accrued interest receivable					2,616				2,669
	Bank premises and equipment, net					16,573				16,450
	Investments in real estate					3,863				3,451
	Other real estate owned					-				1,344
	Goodwill and intangible assets					30,077				30,352
	Investment in partially owned Charter Holding Corp., at equity					5,217				4,895
	Bank-owned life insurance					18,758				13,347
	Other assets					8,023				8,252
		Total assets			$	1,118,361			$	1,041,819
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
	Deposits:
		Noninterest-bearing			$	68,465			$	64,356
		Interest-bearing				762,199				738,667
			Total deposits			830,664				803,023
	Federal Home Loan Bank advances					120,974				80,967
	Other borrowings					272				543
	Securities sold under agreements to repurchase					18,330				15,514
	Subordinated debentures					20,620				20,620
	Accrued expenses and other liabilities					15,515				12,492
		Total liabilities				1,006,375				933,159
STOCKHOLDERS' EQUITY
	Preferred stock, $.01 par value per share: 2,500,000 shares authorized: Series B, non-cumulative perpetual, 20,000 shares issued and outstanding at September 30, 2012 and at December 31, 2011, liquidation value $1,000 per share					-				-
	Common stock, $.01 par value, per share: 10,000,000 shares authorized, 6,332,681 shares issued and 5,902,402 shares outstanding as of September 30, 2012, and 6,292,639 shares issued and 5,832,360 shares outstanding as of December 31, 2011					63				63
	Warrants					-				85
	Paid-in capital					66,292				66,658
	Retained earnings					53,067				49,892
	Accumulated other comprehensive loss					(389	)			(887	)
	Unearned Stock Awards					(377	)			-
	Treasury stock, at cost, 430,279 shares as of September 30, 2012, and 460,279 at December 31, 2011					(6,670	)			(7,151	)
		Total stockholders' equity				111,986				108,660
		Total liabilities and stockholders' equity			$	1,118,361			$	1,041,819

New Hampshire Thrift Bancshares, Inc.
Consolidated Statements of Income (unaudited)
				Three months Ended September 30,						Nine months Ended September 30,
(Dollars in thousands except for per share data)				2012			2011			2012				2011
INTEREST AND DIVIDEND INCOME
	Interest and fees on loans			$	8,305		$	7,947		$	24,053			$	23,797
	Interest and dividends on debt investments
		Taxable			628			1,154			2,757				3,612
		Dividends			15			9			47				29
		Other			134			226			443				679
	Total interest and dividend income				9,082			9,336			27,300				28,117
INTEREST EXPENSE
	Interest on deposits				1,072			1,466			3,358				4,411
	Interest on advances and other borrowed money				755			712			2,243				2,203
	Total interest expense				1,827			2,178			5,601				6,614
	Net interest and dividend income				7,255			7,158			21,699				21,503
PROVISION FOR LOAN LOSSES					1,032			574			2,261				984
	Net interest and dividend income after provision for loan losses				6,223			6,584			19,438				20,519
OTHER INCOME
	Customer service fees				1,306			1,348			3,764				3,813
	Net gain on sales of loans				778			133			1,534				563
	Net gain on sales and calls of securities				1,091			929			3,415				2,239
	Net gain (loss) on sales of other real estate owned and fixed assets				-			18			(150	)			27
	Rental income				187			210			560				551
	Realized gain in Charter Holding Corp.				72			124			298				459
	Insurance commission income				343			-			1,048				-
	Brokerage service income				1			1			3				2
	Bank-owned life insurance income				141			110			374				314
	Total noninterest income				3,919			2,873			10,846				7,968

(unaudited)		Three months Ended September 30,							Nine months Ended September 30,
(Dollars in thousands except for per share data)		2012			2011				2012			2011
NONINTEREST EXPENSES
Salaries and employee benefits			3,694			3,691				11,153			10,525
Occupancy and equipment expenses			876			881				2,767			2,850
Advertising and promotion			96			111				350			369
Depositors' insurance			204			(27	)			603			610
Data processing and outside services			301			266				848			763
Professional services			404			230				919			808
ATM processing fees			130			107				367			363
Mortgage servicing (income), net of amortization of mortgage servicing rights			50			(67	)			96			(128	)
Supplies			93			85				279			251
Other expenses			1,419			1,477				4,162			3,632
Total noninterest expenses			7,267			6,754				21,544			20,043
INCOME BEFORE PROVISION FOR INCOME TAXES			2,875			2,703				8,740			8,444
PROVISION FOR INCOME TAXES			845			690				2,616			2,406
NET INCOME		$	2,030		$	2,013			$	6,124		$	6,038
NET INCOME AVAILABLE TO COMMON STOCKHOLDERS		$	1,914		$	1,800			$	5,508		$	5,567
Earnings Per Common Share, basic		$	0.32		$	0.31			$	0.94		$	0.96
Earnings Per Common Share, assuming dilution (1)		$	0.32		$	0.31			$	0.94		$	0.96
Dividends Declared per common share		$	0.13		$	0.13			$	0.39		$	0.39

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