Naugatuck Valley Financial Corp. said its earnings jumped 185 percent in the second quarter, spurred by greater interest income.
The parent company to Naugatuck Valley Savings and Loan said its net income for the quarter ended June 30, was $680,000, or 10 cents per share, compared to $239,000, or 4 cents per share, in the year ago period.
“We are pleased with our growth year to date and our increase in earnings which is the result of an improved spread plus expense controls,” said John C. Roman, Naugatuck Valley’s president and CEO.
Net interest income, or the money the bank earned on interest-bearing assets, totaled $4.6 million during the quarter compared to $3.7 million a year earlier, a 23 percent increase.
That boost was primarily aided by a decrease in interest expense, the bank said.
The company’s Noninterest income and deposit base also showed signs of growth in the quarter, improving to $659 million and $ 394 million respectively.
The tough economy, however, is still causing the bank, with $565 million in assets and 10 branches, some problems.
During the quarter, Naugatuck Valley set aside $361,000 for loans that may go bad in the future, an increase from $272,000 a year earlier.
Meanwhile, the company’s non-performing loans have nearly doubled over the past six months to $12.6 million.
The increase was primarily a result of the bank placing three commercial mortgages-totaling about $5 million-in non-accrual status, which means the bank is no longer recording interest on them.
“In spite of our increase in non-performing assets, our asset quality ratios remain strong,” Roman said. “We continue to work to resolve troubled loans while assisting borrowers through the economic slowdown.”
Roman added that the bank is working diligently toward a planned stock sale and he anticipates the bank’s acquisition of Southern Connecticut Bancorp to be completed later this year.
