Wainwright Bank & Trust Company Reports Second Quarter Results

BOSTON, July 15 /PRNewswire-FirstCall/ -- Wainwright Bank & Trust Company (NASDAQ:WAIN) reported consolidated net income of $1,395,000 for the three months ended June 30, 2009 with basic and diluted earnings per share of $.14. This compares to a consolidated net income of $1,154,000 and basic earnings per share of $.15 ($.14 per diluted share) for the quarter ended June 30, 2008. Consolidated net income for the six months ended June 30, 2009 is $2,955,000 which represents an increase of $617,000 from $2,338,000 for the same six-month period in 2008. Basic earnings per share were $.31 for the six months ended June 30, 2009 ($.29 per diluted share) compared to $.30 for the six months ended June 30, 2008 ($.28 per diluted share). The Bank's weighted average interest-earning assets increased $94 million, or 10%, to $1.0 billion from $909 million for the six months ending June 30, 2009 and 2008, respectively. The average outstanding loan balances grew $93 million, or 13%, from the first six months of 2008 to $823 million in the first six months of 2009. Residential real estate loans increased $57 million, or 17% during the period and accounted for the majority of the increase. The Bank also saw increases in its commercial and commercial real estate loans of $37 million. Jan A. Miller, President and CEO stated, "The Bank is pleased to announce growth in earnings for the second consecutive quarter during these difficult economic times. As a result of our capital and liquidity strength, Wainwright has continued to capture additional market share with conservatively underwritten residential real estate products. Our 17% growth in residential loans, in a challenging market, reflects our commitment to providing housing financing. We also believe that borrowers appreciate the opportunity to conduct business with a local, socially conscious community bank. In the second quarter of this year we have generated more than $46 million in new residential loans and have over $50 million in our pipeline." "Our commercial loan growth continues to be strong as well, particularly our community development and non-profit lending. In the fall of 2008, Wainwright was awarded an allocation of federal New Market Tax Credits. This allocation allows the Bank to provide critical capital to investments in low-income neighborhoods. The Bank used a portion of this allocation for the Hope House, a non-profit that provides clinical treatment, job training and placement for recovering alcoholics and substance abusers. Along with over $7 million in financing it enabled Hope House to build a new facility in the Roxbury neighborhood of Boston. In May 2009 the Bank provided over $22 million in construction, permanent, and working capital financing to The Boston Conservatory for the renovation and expansion of their theater in the Fenway. The Boston Conservatory trains exceptional young performing artists for careers that enrich and transform human experience. We have made more than $46 million in commercial loans in the second quarter, and there is more than $18 million in loans approved and in the process of closing." Average deposits increased $72 million, or 11%, from the first six months of 2008 to $717 million in the same period of 2009, $61 million of which was due to certificate of deposit balances. NOW, demand deposit, and savings products increased $14 million, $4 million, and $3 million, respectively, which offsets the decline of $11 million in MMDA accounts. The Bank also used advances from the Federal Home Loan Bank, as needed, as a component of its balance sheet management to help fund the growth in earning assets. Net interest income was $15.3 million for the six months ended June 30, 2009 compared to $13.9 million for the same period of 2008, an increase of $1.4 million, or 10%. The Bank's net interest margin remained at 3.08% in the six months ended June 30, 2009 compared to the same six-month period in 2008. As the economy continued to decline throughout 2008 and early 2009 the Federal Reserve addressed the decline with monetary policy and reduced the target Federal Funds reserve rate to historic levels. The Bank's offering rates for various lending products generally declined and loans tied to external indices generated lower income as rates fell. Despite a significant increase of $94 million in interest-earning assets, the Bank had a decline in total interest and dividend income of $777,000, or 3% for the six months ending June 30, 2009 compared to 2008. In addition, the decline in the target Federal Funds reserve rate led to the Bank's decision to reduce rates on all deposit products. As such, the primary reason for the increase in net interest income is the decline in the cost of interest-bearing liabilities, which decreased 78 basis points to 2.36% for the six months ending June 30, 2009 compared to 2008, resulting in a decline in interest expense of $2.2 million. The provision for credit losses was $1.0 million for each of the six months ended June 30, 2009 and 2008. A provision is made based on management's assessment of the adequacy of the allowance for credit losses after considering historical experience, current economic conditions, changes in the composition of the loan portfolio, and the level of non-accrual and other non-performing loans. The provision in the current period is attributable to the trend of increased delinquent and impaired loans as well as the continued economic uncertainty due to the slow economic response to various initiatives to stabilize the economy and the housing market in particular. The reserve for credit losses was $9,473,000, $8,736,000, and $8,449,000 representing 1.15%, 1.04%, and 1.09% of total loans at June 30, 2009, December 31, 2008, and June 30, 2008, respectively. The Bank had net charge-offs of $263,000 and $189,000 in the first two quarters of 2009 and 2008, respectively. Nonaccrual loans amounted to $4,211,000, $2,069,000, and $973,000 at June 30, 2009, December 31, 2008, and June 30, 2008, respectively. The nonaccrual loans as of June 30, 2009 consisted of five residential mortgage customers, three of which are in the process of foreclosure, and four commercial relationships. At June 30, 2009, loans 30 days or more past due represented .83% of the portfolio compared to 1.15% at December 31, 2008. Total noninterest income was $3.6 million and $2.2 million for the six months ended June 30, 2009 and 2008, respectively, an increase of $1.4 million, or 62%. The Bank recorded $786,000 in net gains on securities in the first two quarters of 2009, compared to a loss of $93,000 in the same period of 2008. As a result of using a portion of the awarded allocation of federal New Market Tax Credits previously noted, the Bank recorded fee income in the amount of $447,000 in the second quarter that was not present in the same period of 2008. The Bank recorded $207,000 and $7,000 in the first two quarters of 2009 and 2008, respectively, in mortgage banking income. The increase in mortgage banking income was the result of the Bank taking advantage of market opportunities, which presented itself with a decrease in residential mortgage rates and subsequent increase in refinanced loan activity. These increases were offset by declines in investment management and loan fees of $75,000 and $56,000, respectively. Total operating expenses were $14.3 million and $12.3 million for the six months ended June 30, 2009 and 2008, respectively, an increase of $2.0 million, or 16%. The Bank absorbed a $930,000 increase in assessment fees as a result of increased FDIC insurance premiums, including an additional special assessment of approximately $475,000 in June 2009. Premiums increased as a result of the FDIC's plan to reestablish the Deposit Insurance Fund to levels required by the Federal Deposit Institution Reform Act of 2005. Salaries and employee benefits increased $431,000, a result of normal merit increases, an increased head count primarily as a result of our new branch in Ashmont, commission pay, contract labor, and increased medical costs. Professional fees increased $235,000 primarily due to various enterprise risk management costs and legal fees. Advertising and marketing costs increased $186,000 as a result of promotional costs for various product specials. Occupancy and equipment costs increased $135,000 due to increased utility costs and real estate taxes for the branches as well as an increase in depreciation on leasehold improvements and furniture and equipment. Founded in 1987, with $1 billion in assets and 12 branches serving Greater Boston, Wainwright Bank is widely recognized as the country's leading socially progressive bank. It has committed over $700 million in loans to socially responsible development projects including affordable housing, environmental protection, HIV/AIDS services, homeless shelters, immigration services and more. The Bank was named the "ultimate high-purpose company" in a recently published book by award-winning author, Christine Arena, entitled "The High-Purpose Company: The Truly Responsible (and Highly Profitable) Firms That Are Changing Business Now." With Boston branches in the Financial District, Back Bay/South End, Jamaica Plain, Dorchester, Cambridge branches within Harvard Square, Kendall Square, Central Square and the Fresh Pond Mall, its Watertown, Somerville, Newton, and Brookline branches, Wainwright is strategically positioned to provide consumer and commercial mortgages, loans, and deposit services to individuals, families, businesses, and non-profit organizations. This Press Release contains statements relating to future results of the Bank (including certain projections and business trends) that are considered "forward-looking statements" as defined in the Private Securities Legislation Reform Act of 1995. Actual results may differ materially from those projected as a result of certain risks and uncertainties, including but not limited to changes in political and economic conditions, interest rate fluctuations, competitive product and pricing pressures within the Bank's market, bond market fluctuations, personal and corporate customers' bankruptcies, and inflation, as well as other risks and uncertainties. FINANCIAL HIGHLIGHTS: (dollars in thousands) (Unaudited) For the three months ended June 30, 2009 2008 ---- ---- Net interest income $7,604 $7,171 Provision for credit losses 500 750 Noninterest income 2,128 1,012 Other noninterest expense 7,549 6,039 Income before taxes 1,683 1,394 Income tax provision 109 242 Net income 1,574 1,152 Net income (loss) attributable to noncontrolling interest 179 (2) Net income attributable to Wainwright Bank & Trust 1,395 1,154 Earnings per share: Basic $0.14 $0.15 Diluted $0.14 $0.14 Return on average shareholders' equity 6.22% 6.69% Return on average assets 0.54% .48% Net interest margin 3.08% 3.14% Weighted average common shares outstanding: Basic 7,305,736 7,294,024 Diluted 8,246,163 8,267,763 FINANCIAL HIGHLIGHTS: (dollars in thousands) (Unaudited) For the six months ended June 30, 2009 2008 ---- ---- Net interest income $15,328 $13,923 Provision for credit losses 1,000 1,000 Noninterest income 3,550 2,192 Other noninterest expense 14,317 12,327 Income before taxes 3,561 2,788 Income tax provision 429 452 Net income 3,132 2,336 Net income (loss) attributable to noncontrolling interest 177 (2) Net income attributable to Wainwright Bank & Trust 2,955 2,338 Earnings per share: Basic $0.31 $0.30 Diluted $0.29 $0.28 Net interest margin 3.08% 3.08% Return on average assets .57% .50% Return on average shareholders' equity 6.69% 6.67% Weighted average common shares outstanding: Basic 7,292,155 7,386,327 Diluted 8,231,895 8,370,069 at June 30, 2009 and 2008 Total Assets $1,011,921 $1,002,495 Total Loans 822,496 774,320 Total Investments 135,965 143,235 Total Deposits 696,768 708,810 Total Borrowed Funds 214,830 222,679 Shareholders' Equity 91,239 67,369 Book Value Per Common Share $8.41 $8.20 James J. Barrett Senior VP and Chief Financial Officer Tel: (617) 478-4000 Fax: (617) 439-4854 Website: http://www.wainwrightbank.com/ DATASOURCE: Wainwright Bank & Trust Company CONTACT: James J. Barrett, Senior VP and Chief Financial Officer, +1-617-478-4000, or fax, +1-617-439-4854 Web Site: http://www.wainwrightbank.com/