Westfield Financial, Inc. (the "Company"), the holding company for Westfield Bank (the "Bank"), reported net income for the three months ended December 31, 2004 of $1.5 million or $0.16 per diluted share, versus $1.5 million, or $0.14 per diluted share, for the comparable prior year period. Net income for the year ended December 31, 2004 was $6.3 million, or $0.64 per diluted share, versus $3.7 million, or $0.36 per diluted share, for the prior year.

As previously reported, the Company's 2003 results included a charge of $1.45 million representing the additional state tax liability, including interest, relating to the deduction for dividends received from the Bank's real estate investment trust subsidiary for 2002 and prior years.

Donald A. Williams, President and Chief Executive Officer, said, "We continue to execute our strategic plan of growing our commercial business relationships. Commercial real estate loans and commercial and industrial loans increased $22.5 million or 10.4% to $239.1 million at December 31, 2004 from $216.6 million at December 31, 2003." Mr. Williams also stated, "The Board of Directors declared a $0.10 cash dividend on January 25, 2005 to all shareholders of record on February 10, 2005 payable on February 24, 2005."

Net interest and dividend income for the year and three months ended December 31, 2004 was $23.5 million and $6.1 million, respectively, compared with $21.8 million and $5.6 million for the year and three months ended December 31, 2003. Net interest margin for the year and three months ended December 31, 2004 was 3.13% and 3.20%, respectively, compared with 2.86% and 2.88% for the same periods in 2003.

Net gains from sales of securities for the year and three months ended December 31, 2004 were $877,000 and $10,000 respectively. This compares with net gains of $409,000 and $276,000 for the same periods in 2003. This is primarily the result of the Company selling its common stock portfolio in 2004.

The provision for loan losses for the year and three months ended December 31, 2004 was $750,000 and $275,000, compared with $750,000 and $250,000 for the same periods in 2003.

Noninterest income for the year and three months ended December 31,2004 was $3.0 million and $767,000, respectively, compared to $2.7 million and $640,000 for the year and three months ended December 31, 2003. Net checking account processing fee income was $1.7 million and $421,000 for the year and three months ended December 31, 2004 as compared to $1.0 million and $275,000 for the same periods in 2003. The increase is a result of new products and services provided to Westfield Bank's checking account customers commencing in the second quarter of 2004. Fees received from the third party mortgage company were $100,000 and $35,000 for the year and three months ended December 30, 2004 as compared to $340,000 and $39,000 for the same periods in 2003. Higher market interest rates resulted in reduced mortgage origination activity and fewer referrals to the third party mortgage company. Fee income from the third party mortgage company in the future may be affected by borrower activity, which generally decreases in rising interest rate environment.

Noninterest expense for the year and three months ended December 31, 2004 was $17.8 million and $4.5 million, respectively, compared to $17.6 million and $4.2 million respectively, for the same periods in 2003.

Total assets increased $1.7 million to $796.9 million at December 31, 2004 from $795.2 million at December 31, 2003. Net loans during this period increased by $23.6 million, or 6.8%, to $368.6 million at December 31, 2004 from $345.0 million at December 31, 2003. Securities for the year ended December 31, 2004 decreased $28.7 million, or 7.9%, to $334.9 million at December 31, 2004 from $363.6 million at December 31, 2003.

Total deposits decreased $19.8 million from $632.4 million at December 31, 2003 to $612.6 million at December 31, 2004. The decrease in deposits was primarily the result of a decrease of $21.1 million in term deposits, which were $313.1 million at December 31, 2004. The strategic plan calls for a lesser reliance on term deposits.

The decrease in deposits was offset by increases in customer repurchase agreements and Federal Home Loan Bank borrowings. Customer repurchase agreements increased $2.5 million from $12.1 million at December 31, 2003 to $14.6 million at December 31, 2004. Federal Home Loan Bank borrowings increased $25.0 million to $45.0 million at December 31, 2004 to take advantage of the current interest rate environment.

Stockholders' equity at December 31, 2004 and December 31, 2003 was $118.1 million and $124.8 million, respectively, representing 14.8% and 15.7% of total assets. The change is comprised of net income and $6.3 million for the year ended December 31, 2004, the net repurchase of 567,788 shares of common stock for $12.0 million, and the declaration by the Board of Directors of quarterly dividends aggregating $1.7 million.

The Bank is headquartered in Westfield, Massachusetts and operates through 10 banking offices in Agawam, East Longmeadow, Holyoke, Southwick, Springfield, West Springfield and Westfield, Massachusetts. The Bank's deposits are insured by the Federal Deposit Insurance Corporation.

The Company wishes to caution readers not to place undue reliance on any such forward-looking statements contained in this news release, which speak only as of the date made. The Company wishes to advise readers that the factors listed above could affect the Company's financial performance and could cause the Company's actual results for future periods to differ materially from any opinions or statements expressed with respect to future period in any current statements. 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.

WESTFIELD FINANCIAL, INC. and SUBSIDIARIES
Selected Consolidated Balance Sheet and Other Data
($ in thousands, except per share data)
(Unaudited)

December 31, December 31,
2004 2003
------------- --------------
Total assets $796,903 $795,216
Securities held to maturity 246,600 261,610
Securities available for sale 88,284 101,983
Stock in Federal Home Loan Bank of Boston 4,237 4,237

Loans 373,828 349,622
Allowance for loan losses 5,227 4,642
------------- --------------
Net loans 368,601 344,980

Total Deposits 612,621 632,431

Federal home loan bank advances 45,000 20,000

Stockholders' equity 118,051 124,804

Book value per share 12.43 12.50

Other Data:

Nonperforming loans $2,171 $1,768

Nonperforming loans as a percentage of
total assets 0.27% 0.22%

Nonperforming loans as a percentage of
total loans 0.58% 0.50%

Allowance for loan losses as a percent of
nonperforming loans 241% 263%

Allowance for loan losses as a percentage
of total loans 1.40% 1.33%

WESTFIELD FINANCIAL, INC. and SUBSIDIARIES
Selected Consolidated Statement of Operations and Other Data
($ in thousands, except per share data)
(Unaudited)

Three Months Ended Year Ended
December 31, December 31,
2004 2003 2004 2003
---------- ----------- ---------- -----------
Interest and dividend
income $8,858 $8,577 $34,428 $35,635
Interest expense 2,790 3,006 10,913 13,858
---------- ----------- ---------- -----------

Interest and dividend
income 6,068 5,571 23,515 21,777
Provision for loan
losses 275 250 750 750
---------- ----------- ---------- -----------

Net interest and dividend income
after provision for loan
losses 5,793 5,321 22,765 21,027
Net gains on sales on
securities available
for sale 10 276 877 409
Noninterest income 767 640 3,019 2,665
Noninterest expense 4,527 4,206 17,776 17,630
---------- ----------- ---------- -----------

Income before income taxes 2,043 2,031 8,885 6,471
Income taxes 514 558 2,562 2,820
---------- ----------- ---------- -----------
Net income (loss) $1,529 $1,473 $6,323 $3,651
========== =========== ========== ===========

Basic earnings per share $0.16 $0.15 $0.65 $0.36

Average shares
outstanding 9,493,478 9,995,794 9,705,856 10,036,653

Diluted earnings per
share $0.16 $0.14 $0.64 $0.36

Diluted average shares
outstanding 9,718,667 10,223,263 9,929,516 10,212,975

Other Data:

Return on Average Assets(1) 0.76% 0.72% 0.79% 0.45%

Return on Average Equity(1) 5.19% 4.71% 5.24% 2.94%

Net Interest Margin 3.20% 2.88% 3.13% 2.86%

(1) Three month results have been annualized.

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Contact:
Westfield Financial, Inc.
Donald A. Williams, President & CEO
Michael J. Janosco Jr., CFO
413-568-1911

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Source: Westfield Financial, Inc.