Wainwright Bank & Trust Company Reports Third Quarter Results

BOSTON, Oct. 20 /PRNewswire-FirstCall/ -- Wainwright Bank & Trust Company WAIN reported consolidated net income of $2,134,000 for the quarter ended September 30, 2010 and basic earnings per share of $.28 ($.25 per diluted share).  This compares to consolidated net income of $1,585,000 and basic earnings per share of $.17 ($.16 per diluted share) for the quarter ended September 30, 2009.  Consolidated net income of $6,442,000 for the nine months ended September 30, 2010 represents an increase of $1,902,000 from $4,540,000 for the same nine-month period in 2009.  Basic earnings per share was $.85 for the nine months ended September 30, 2010 ($.77 per diluted share) compared to $.48 for the nine months ended September 30, 2009 ($.45 per diluted share).  

The average balance of core deposit products increased $66 million, or 15%, to $498 million in the nine months ending September 30, 2010 compared to September 30, 2009.  NOW, demand deposit, money market, and savings products increased $20 million, $20 million, $14 million, and $12 million, respectively.  This increase in core deposits was partially offset by a decline of $11 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 reduction of $33 million in the average outstanding balance.

The Bank's average interest earning assets remained relatively constant during the first three quarters of 2010 at nearly $1 billion when compared to the first three quarters of 2009.  The total average outstanding loans also remained constant at $826 million.  However, the Bank adjusted the mix of loans in this soft economy by reducing its exposure in commercial construction loans by $18 million.  Residential real estate mortgages increased by $19 million during the same period.  The average available for sale security balance decreased $6 million, or 5%, as the Bank took advantage of favorable pricing and sold specific securities within the portfolio, primarily mortgage backed securities.  

Net interest income was $26.6 million for the nine months ended September 30, 2010 compared to $23.5 million for the same period of 2009, an increase of $3.1 million, or 13%.  The Bank's net interest margin climbed to 3.57% in the nine months ending September 30, 2010 compared to 3.16% in the same nine-month period in 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 1.76% for the nine months ending September 30, 2010 compared to 2009, resulting in a decline in interest expense of $3.3 million.  Partially offsetting the benefit from reduced funding costs was the decline in interest and dividend income.  The investment portfolio's decline in average balance as well as the current low rate environment contributed to reduced interest and dividend income earned on its securities portfolio.  Offsetting this decline in income was the slight increase in the interest income earned from the loan portfolio.

Jan A. Miller, President and CEO, stated, "We are once again very pleased with our financial performance through the first nine months of 2010. Our record earnings have been fueled by a substantial increase in core deposits, an improving margin, excellent credit quality and significant year to date commercial loan growth. Since year end 2009, our commercial loans have grown 23%, with most of the growth attributed to our Community Development group. Credit quality remains very strong with negligible charge offs and loans past due more than 30 days less than 1%. In addition we are on track for another record year in residential mortgage originations."

The provision for credit losses was $200,000 and $2.0 million for the nine months ended September 30, 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 $10.3 million, $10.3 million, and $10.0 million representing 1.19%, 1.26%, and 1.20% of total loans at September 30, 2010, December 31, 2009, and September 30, 2009, respectively.  The Bank had net charge-offs of $175,000 and $706,000 in the nine months ended September 30, 2010 and 2009, respectively.  Nonaccrual loans amounted to $3.4 million, $3.5 million, and $2.2 million at September 30, 2010, December 31, 2009, and September 30, 2009, respectively.  The nonaccrual loans as of September 30, 2010 included ten residential customers that total $2.9 million, of which four totaling $1.3 million represent modified mortgages where the borrower is current on payments and one totaling $308,000 that is in the process of foreclosure.  The remaining nonaccrual loans include five commercial relationships totaling $480,000.  At September 30, 2010, loans 30 days or more past due represented 0.80% of the total loan portfolio, a decrease from 1.25% at December 31, 2009, and 1.18% at September 30, 2009.

Total noninterest income was $5.9 million and $5.2 million for the nine months ended September 30, 2010 and 2009, respectively, an increase of $732,000, or 14%.  The variance between the two periods is due to an increase in New Market Tax Credit fees and one-time fees paid upon the payoff of commercial real estate loans which were partially offset by a decrease in the gains on the sales of securities.  As a result of using a portion of the awarded allocation of federal New Market Tax Credits, the Bank recorded fee income in the amounts of $777,000 and $447,000 in the nine months ended September 30, 2010 and 2009, respectively.  In addition, the Bank received one-time fees of $433,000 paid upon the payoff of one commercial real estate loan.  Deposit service charges increase $139,000 as a result of increased deposit balances as well as income earned as a result of the increase in debit card usage.  The Bank recorded an increase of $139,000 in mortgage banking income.  As residential mortgage rates declined to historical lows in the third quarter of 2010, the volume of saleable refinance and purchase activity continued to increase resulting in $434,000 in gains on the sales of loans.  Partially offsetting these increases, the Bank recorded $960,000 in net gains on securities in the nine months ending September 30, 2010, which included $559,000 in net gains earned on the available for sale and trading portfolios combined with a $401,000 unrealized gain in market value of the Bank's trading portfolio.  This compares to a gain of $1,142,000 in the same period of 2009, which included $451,000 in net gains earned on the available for sale and trading portfolios combined with a $691,000 unrealized gain in market value of the Bank's trading portfolio.  There were no other-than-temporary impairment losses during the nine months ended September 30, 2010 compared with $390,000 in 2009 which is not included in the above noted net gains earned.   In addition, the Bank benefited from the Bank Enterprise award of $477,000 in the third quarter of 2009 from the Community Development Financial Institutions Fund of the U.S. Treasury.  The Bank was notified in October it was the recipient of this award once again in the amount of $600,000.  This amount will be recorded in the fourth quarter of 2010.    

Total operating expenses were $23.6 million and $21.4 million for each of the nine months ending September 30, 2010 and 2009, respectively.  The Bank incurred $835,000 in acquisition related costs during the second and third quarter of 2010 as a result of the expected acquisition of the Bank, as detailed in our press release in late June.  Salaries and employee benefits increased $575,000, a result of normal merit increases, commission pay, and increased medical costs and other employee benefits.  Occupancy and equipment costs increased $403,000.  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.  Loan and other real estate owned collections increased $851,000, primarily the result of a $761,000 impairment write down on the value of other real estate owned.  The Bank had a decrease in assessment fees of $339,000 as there was a special assessment paid in the second quarter of 2009 in order to increase FDIC insurance fund.  Professional fees decreased $291,000 primarily due to a decline in consulting, legal, and audit and accounting fees.  

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 $800 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