Apr. 29--NEW HAVEN -- NewAlliance Bancshares Inc., the holding company for NewAlliance Bank, on Tuesday announced net income of $11.6 million, or 12 cents per diluted share, for the first quarter of 2009, compared with $12.9 million, or 13 cents per diluted share, in the first quarter of 2008.

The company repurchased about 164,000 shares during the quarter at an average price of $10.48 and paid a cash dividend of 7 cents during the quarter.

When earnings are reported using per diluted share calculations, it reflects a conservative, worst-case scenario outlook, assuming that everyone holding options, warrants, preferred shares or other securities would convert them all at once.

Company officials said asset quality trends and reserve levels remain strong, despite deterioration in the overall economy.

NewAlliance funded about $290 million in mortgage loans over the first quarter, helping nearly 900 applicants purchase a home or lower their payments through refinancing.

N o n p e r f o r m i n g l o a n s increased by $11.8 million to $50.1 million, compared with the previous quarter, primarily in the residential real estate portfolio.

A $4.1 million provision for loan losses was recorded during the first quarter, similar to the provision recorded in each of the prior three quarters.

Total deposits increased $404.5 million over the prior year quarter.

"As we continue throughout 2009 we will augment the strength of NewAlliance by focusing on the key business priorities that I outlined at the beginning of the year, including strengthening balance sheet profitability, improving core banking fee income, maintaining superior credit quality and improving our operating efficiency," Chairwoman and Chief Executive Officer Peyton Patterson said in a statement.

The bank's board of directors voted to pay a quarterly dividend of 7 cents per share May 19 to shareholders of record as of May 8.

Earlier this month, C. Gene Kirby was appointed president of the bank and will oversee retail and business banking, trust services and NewAlliance investments. He will report to Patterson.

As of March 31, NewAlliance Bancshares had $8.50 billion in assets and operated 89 banking offices in Connecticut and Massachusetts.

The company's stock closed Tuesday at $12.49 per share, up 20 cents on the New York Stock Exchange.

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