A $4 million write down as a result of tax reform wiped out profits for Westfield Bank’s parent company in the fourth quarter of 2017 after a year of slow growth.
The company reported a loss of $353,000, or $0.01 loss per diluted share, for the fourth quarter of 2017, compared to $1.9 million in the fourth quarter of 2016. Net income for the year, however, was $12.3 million compared to $4.8 million for 2016.
“On Oct. 21, 2017, we marked the one year anniversary of the merger between the company and Chicopee Bancorp. Our continued focus will be to make a meaningful impact in our market area, grow the balance sheet and improve our financial performance. We are confident that we will continue to provide a strong and increasing value proposition to our shareholders, customers and community,” James C. Hagan, president and CEO, said in a statement. “In the short term, the Tax Cuts and Jobs Act enacted by President [Donald] Trump on Dec. 22 negatively impacted the company’s reported net income and capital in 2017, however, lowering the company’s federal tax rate to 21 percent will positively benefit net income in future years.”
The company grew its balance sheet at a slow pace.
Total assets grew a little over $7 million, putting the company at $2.08 billion in total assets. Loans grew about $63 million year-over-year, reaching $1.62 billion total. But total deposits year-over-year declined $12 million, settling at roughly $1.5 billion.
The decrease was attributed to losses in savings accounts and time deposits. Time deposits decreased due to customers and brokered deposits seeking higher yields.
Net interest income for the year was $59.4 million, up more than $22 million from 2016. The net interest margin grew 42 basis points year-over-year, reaching 3.12 percent at the end of 2017. Noninterest income for 2017 was $8.5 million, up about $2.5 million from 2016.
The provision for loan losses for 2017 was $1.36 million, up from $575,000 in 2016. Net charge-offs for 2017 totaled $597,000, compared to net recoveries of $653,000 in 2016.
