WAIN Wainwright Bank & Trust Company (MM)

BOSTON, April 14 /PRNewswire-FirstCall/ -- Wainwright Bank & Trust Company (Nasdaq: WAIN) reported consolidated net income of $2,109,000 for the quarter ended March 31, 2010 and basic earnings per share of $.28 ($.25 per diluted share).  This compares to consolidated net income of $1,560,000 and basic earnings per share of $.17 ($.16 per diluted share) for the quarter ended March 31, 2009.  Net income increased $549,000, or 35%, over the first quarter of 2009.  Fully diluted earnings per common share increased 56% having been further enhanced by the repayment in full of the Series D Preferred Stock to the U. S. Treasury in the fourth quarter of 2009.  The increase in net income for the three months ending March 31, 2010 is primarily due to a $651,000 increase in net interest income and a $594,000 increase in noninterest income. Due to the record increase in earnings the Bank's book value per common share and tangible net worth increased to $8.99 and $8.92 at March 31, 2010, respectively.

The average balance of core deposit products increased $55 million, or 13%, to $471 million in the three months ending March 31, 2010 compared to March 31, 2009.  NOW, demand deposit, and savings products increased $29 million, $15 million, and $13 million, respectively, which offsets the decline of $2 million in money market accounts.  This increase in core deposits was partially offset by a decline of $45 million in higher cost certificates of deposit.  In addition, the Bank has benefited from the maturities of higher cost, long term Federal Home Loan Bank advances resulting in a net repayment of $16 million.

The Bank's average interest-earning assets decreased $33 million, or 3%, to $982 million from $1.01 billion for the three months ending March 31, 2010 and 2009, respectively.  In addition to a $17 million decline in net federal funds and money market average balances, the Bank's average outstanding loan balances declined $19 million, or 2%, to $808 million in the first three months of 2010 when compared to the same period in 2009.  Residential real estate loans increased $27 million, or 7%, during the period partially offset by a decline of $17 million in commercial loans.  As a result of the soft economy, the Bank has continued to reduce its exposure in the commercial construction segment of the loan portfolio, which has decreased $31 million.  

Net interest income was $8.4 million for the three months ended March 31, 2010 compared to $7.7 million for the same period of 2009, an increase of $651,000, or 8%.  The Bank's net interest margin climbed to 3.46% from 3.09% in the three months ending March 31, 2010 compared to the same three-month period in 2009.  Furthermore, at 3.46% for the three months ended March 31, 2010, the net interest margin increased 12 basis points, up from 3.34% for the three months ending December 31, 2009.  The primary reason for the increase in net interest income is the decline in the cost of interest-bearing liabilities, which decreased 54 basis points to 1.87% for the three months ending March 31, 2010 compared to 2009, resulting in a decline in interest expense of $1.3 million.  Partially offsetting the benefit from reduced funding costs was the decline in interest and dividend income.  The decrease of $19 million in the loan portfolio described above contributed to the decrease in interest income.  Similarly, the current low rate environment contributed to reduced interest and dividend income earned on its securities portfolio.  

Jan A. Miller, President and CEO, stated, "We are extremely pleased with our financial performance in the first quarter.  We continue to see improvement in our net interest margin through disciplined pricing in both our loans and deposits.  While not yet reflected in our loan portfolio, we have seen increased activity in commercial loans, particularly non-profit and community development.  Our pipeline of loans in progress is at its highest level in years.  It includes a New Markets Tax Credit leveraged loan to construct a new yogurt manufacturing facility in Vermont, tax credit bridge and construction financing for rental apartments in Waltham and New Bedford, the expansion of a neighborhood restaurant in Boston, among others.  Our residential lending continues the record performance of the prior two years with over $30 million loans closed in the first quarter.  This represents a 31% increase over 2009."

The provision for credit losses was $200,000 and $500,000 for the three months ended March 31, 2010 and 2009, respectively.  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 reserve for credit losses was $10.2 million, $10.3 million, and $9.1 million representing 1.27%, 1.26%, and 1.11% of total loans at March 31, 2010, December 31, 2009, and March 31, 2009, respectively.  The Bank had net charge-offs of $308,000 and $125,000 in the three months ended March 31, 2010 and 2009, respectively.  Nonaccrual loans amounted to $6.5 million, $3.5 million, and $1.7 million at March 31, 2010, December 31, 2009, and March 31, 2009, respectively.  The nonaccrual loans as of March 31, 2010 included ten residential mortgages that total $2.6 million, of which four represent modified mortgages where the borrower is current on payments and three that are in the process of foreclosure.  The remaining nonaccrual loans include six commercial relationships.  The largest is a $3.3 million commercial real estate loan that is adequately collateralized based on a recent appraisal.  At March 31, 2010, loans 30 days or more past due represented 1.21% of the total loan portfolio, a decrease from 1.25% at December 31, 2009.  

Total noninterest income was $2.0 million and $1.4 million for the three months ended March 31, 2010 and 2009, respectively, an increase of $594,000, or 41%.  The variance between the two quarters is due primarily to one-time fees paid upon the payoff of commercial real estate loans and mortgage banking income as residential mortgage rates remained low in the first quarter of 2010 and the volume of both refinance and purchase activity within the Bank's residential mortgage loan products remained high.  Service charge increases in various products as well as the volume increase in debit card usage led to a $41,000 increase in deposit service charges.  These increases were offset by declines in investment management fees of $22,000.  In addition, the Bank recorded $352,000 in net gains on securities in the three months ending March 31, 2010, compared to a gain of $367,000 in the same period of 2009.  In addition, there were no other-than-temporary impairment losses during the three months ended March 31, 2010 compared with $90,000 in 2009.  

Total operating expenses were $7.4 million and $6.8 million for each of the three months ending March 31, 2010 and 2009, respectively.  Total operating expenses were $7.4 million for the three months ended December 31, 2009.  Salaries and employee benefits increased $489,000, a result of normal merit increases, commission pay, and increased medical costs and other employee benefits.  Occupancy and equipment costs increased $157,000.  The Bank saw normal increases in rent and absorbed the loss of a tenant in its headquarters building.  This was partially offset by a decrease in depreciation on leasehold improvements and furniture and equipment.  The Bank absorbed a $51,000 increase in assessment fees due to increased FDIC insurance premiums as a result of the increase in deposits.  Professional fees decreased $72,000 primarily due to a decline in consulting, legal, and audit and accounting fees.  Advertising and marketing costs decreased $108,000 as a result of promotional costs for various product specials in the prior period.  

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.

SOURCE Wainwright Bank & Trust Company