BOSTON, Oct. 23 /PRNewswire-FirstCall/ -- Wainwright Bank & Trust Company
(Nasdaq: WAIN) reported a 2008 third quarter consolidated net loss of
$220,000, a loss of $0.04 per share. This compares to consolidated net income
of $1,314,000 and diluted earnings per share of $.15 ($.16 per basic share)
for the quarter ended September 30, 2007. Consolidated net income for the
nine months ended September 30, 2008 is $2,116,000, down from the previous
nine-month earnings of $4,871,000 for the same prior year period. Diluted
earnings per share were $.25 for the nine months ended September 30, 2008
($.26 per basic share) compared to $.57 ($.61 per basic share) for the same
prior year period. The Bank recognized a non-cash pre-tax impairment charge
of $1,900,000 related to certain investments in Lehman Brothers and one other
preferred stock in the third quarter of 2008. Without the impairment charge,
the Bank's net income for the third quarter of 2008 would have been
approximately $1.2 million, or $.15 per basic share. In addition, the Bank
recorded a provision for credit losses of $1,400,000 in the first three
quarters of 2008 compared to $500,000 in the first three quarters of 2007,
primarily as a result of significant loan growth. Furthermore, in the first
quarter 2007, the Bank recorded an $850,000 gain on the sale of one property
held for investment purposes.
The Bank's average assets increased $87 million, or 10%, to $988 million
from $901 million the third quarter of 2008 compared to 2007. The average
outstanding loan balances grew $102 million, or 15%, from the third quarter of
2007 to $796 million in the third quarter of 2008. Residential real estate
loans (primarily first mortgages) increased $90 million, or 31% during the
period and accounted for the majority of the increase. The Bank also saw
increases in its commercial real estate and commercial loans in the amounts of
$22 million and $20 million, respectively, which were partially offset by net
payoffs of $30 million in the commercial construction portfolio. Jan A.
Miller, President and CEO stated, "Capital growth, liquidity, and earnings are
a major focus for the Bank during these uncertain economic times. We have
been able to continue to achieve solid loan growth while maintaining high
credit standards in today's challenging economy. The turmoil in the financial
markets has continued to create opportunities for Wainwright to capture
additional market share in our residential real estate products. We are
pleased that there continues to be a market for conservatively underwritten
residential mortgages. Commercial loan growth was also strong, particularly
community development and non-profit lending, while our portfolio of
construction loans continues to see net payoffs. The Bank recently issued $5
million of subordinated debt with warrants to purchase 500,000 shares of its
common stock ($4.35 million of which closed on September 30th). The Bank
remains well capitalized and in fact, this additional regulatory capital
increased our risk based capital ratio to 10.8% as of September 30, 2008.
"Our deposit base has also seen some recent growth in core transaction
accounts. We are pleased to open our new 'Banking Cafe' at Ashmont Station,
Dorchester, featuring an in-lobby espresso bar and cafe run by Flat Black, a
local fair trade coffee merchant. As we have with our prior three new
branches, we are seeking LEED certification from the U.S. Green Building
Council. We have also recently learned that Wainwright has been awarded a
2008 Bank Enterprise Award of $300,000 from the U.S Treasury's Community
Development Financial Institutions Fund in recognition of providing financial
services and support within distressed communities. Wainwright was one of
only two New England banks to receive the award."
Average deposits increased $55 million, or 9%, from the third quarter of
2007 to $684 million in the third quarter of 2008. Certificate of deposit
products increased $37 million, or 16%, to an average of $273 million in the
third quarter of 2008. Money market and demand deposit products increased $23
million and $5 million, respectively, while the Bank saw a decline of $11
million in NOW accounts. The Bank used advances from the Federal Home Loan
Bank as a component of its balance sheet management to help fund the growth in
earning assets. Borrowed funds increased $35 million, or 18%, from the third
quarter of 2007.
Net interest income was $21.3 million for the nine months ended September
30, 2008 compared to $19.7 million in the same period of 2007, an increase of
$1.6 million, or 8%. The Bank's net interest yield rose to 3.09% in the three
months ended September 30, 2008 compared to 3.00% for the same three-month
period in 2007. However, the Bank's net interest yield for the nine months
ended September 30, 2008 is 3.08%, a decline of 11 basis points, from 3.19%
for the same nine-month period in 2007.
The provision for credit losses was $1,400,000 and $500,000 for the nine
months ended September 30, 2008 and 2007, 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 provision in the current period is
primarily attributable to the growth in the loan portfolio, although economic
conditions have clearly weakened and the Bank has absorbed higher charge-offs
in 2008. The reserve for credit losses was $8,370,000, $7,638,000, and
$7,482,000 representing 1.04%, 1.07%, and 1.06% of total loans at September
30, 2008, December 31, 2007, and September 30, 2007, respectively. The Bank
had net charge-offs of $668,000 and $2,000 in the first three quarters of 2008
and 2007, respectively. Nonaccrual loans amounted to $847,000 and $50,000 at
September 30, 2008 and December 31, 2007, respectively. The nonaccrual loans
as of September 30, 2008 consisted of two residential mortgages, one in the
process of foreclosure, and three commercial relationships. There were no
nonaccrual loans at September 30, 2007. At September 30, 2008, loans 30 days
or more past due represented only .62% of the portfolio compared to .45% at
December 31, 2007.
Total noninterest income was $1.3 million and $4.3 million for the nine
months ended September 30, 2008 and 2007, respectively, a decline of $3
million, or 71%. There are two significant reasons for the decline, a current
period loss on impairment of securities and a prior period gain on the sale of
property that is not present in the current period. As previously noted, the
Bank realized a non-cash pre-tax impairment charge of $1,900,000 related to
certain investments in Lehman Brothers and one other preferred stock. In the
first quarter of 2007, an $850,000 gain on the sale of one property held for
investment purposes was recorded. In addition to these significant items,
investment management and deposit service charges decreased $197,000 and
$101,000, respectively. Bank owned life insurance income and mortgage banking
income increased $25,000 and $38,000, respectively, the latter of which is the
result of loans sold during the period.
Total operating expenses were $18.9 million and $17.2 million for the nine
months ended September 30, 2008 and 2007, respectively, an increase of $1.7
million, or 10%. Salaries and employee benefits increased $1.0 million, a
result of normal merit increases, an increased head count, commission pay, and
increased medical costs. Occupancy and equipment costs increased $242,000 due
to increased rent, utility costs, and taxes for the branches. Professional
fees increased $232,000 primarily due to consultants hired to complete
information technology related projects and legal fees. Regulatory assessment
fees increased $276,000 due to FDIC insurance premiums. Advertising and
marketing costs increased $134,000 as a result of promotional costs for
various product specials.
Debit and ATM card expenses decreased $197,000, the result of savings
realized from a systems conversion completed in 2007. The Bank recorded
non-cash charges of $175,000 in the first three quarters of 2008 compared to
$371,000 in the first three quarters of 2007 related to equity investments in
affordable housing projects. These pretax charges will be more than offset by
tax credits available to the Bank. These community development investments
are part of the Bank's nationally recognized commitment to community
development activities. The Bank's current CRA rating is "Outstanding".
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.
James J. Barrett
Senior VP and Chief Financial Officer
Tel: (617) 478-4000
Fax: (617) 439-4854
Website: www.wainwrightbank.com
FINANCIAL HIGHLIGHTS:
(dollars in thousands)
(Unaudited)
For the three months ended September 30, 2008 2007
Net interest income $7,382 $6,518
Provision for credit losses 400 250
Noninterest income (937) 1,046
Other noninterest expense 6,549 5,736
Income (loss) before taxes (504) 1,578
Income tax provision (benefit) (284) 264
Net income (loss) (220) 1,314
Net income (loss) available to common
shareholders (295) 1,239
Earnings (loss) per share:
Basic $(0.04) $0.16
Diluted $(0.04) $0.15
Return on average shareholders' equity (1.30)% 7.43%
Return on average assets (0.09)% .58%
Net interest margin 3.09% 3.00%
Weighted average common shares
outstanding:
Basic 7,248,130 7,543,338
Diluted 7,248,130 8,546,668
FINANCIAL HIGHLIGHTS:
(dollars in thousands)
(Unaudited)
For the nine months ended September 30, 2008 2007
Net interest income $21,306 $19,725
Provision for credit losses 1,400 500
Noninterest income 1,255 4,257
Other noninterest expense 18,876 17,217
Income before taxes 2,285 6,265
Income tax provision 169 1,394
Net income 2,116 4,871
Net income available to common
shareholders 1,891 4,646
Earnings per share:
Basic $0.26 $0.61
Diluted $0.25 $0.57
Net interest margin 3.08% 3.19%
Return on average assets .29% .75%
Return on average shareholders' equity 4.07% 9.31%
Weighted average common shares
outstanding:
Basic 7,339,925 7,570,893
Diluted 8,315,412 8,571,668
at September 30, 2008 and 2007
Total Assets $979,538 $913,006
Total Loans 802,504 703,376
Total Investments 116,029 145,200
Total Deposits 682,522 639,180
Total Borrowed Funds 224,736 199,081
Shareholders' Equity 64,084 70,060
Book Value Per Common Share $7.84 8.29
SOURCE Wainwright Bank & Trust Company
WAINWRIGHT BANK & TRUST 
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