WAIN Wainwright Bank & Trust Company (MM)

BOSTON, April 14 /PRNewswire-FirstCall/ -- Wainwright Bank & Trust Company (NASDAQ:WAIN) reported 2009 first quarter consolidated net income of $1,558,000 and diluted earnings per share of $.16 ($.17 per basic share). This compares to consolidated net income of $1,184,000 and diluted earnings per share of $.14 ($.15 per basic share) for the quarter ended March 31, 2008. The Bank's weighted average earning assets increased $117 million, or 13%, to $1.015 billion from $898 million for the three months ending March 31, 2009 and 2008, respectively. The average outstanding loan balances grew $121 million, or 17%, from the first quarter of 2008 to $827 million in the first quarter of 2009. Residential real estate loans increased $78 million, or 25% during the period and accounted for the majority of the increase. The Bank also saw increases in its commercial and commercial real estate of $44 million. Jan A. Miller, President and CEO stated, "The Bank is pleased to announce growth in earnings 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 25% 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 first quarter of this year we have made more than $23 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 a $25 million 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 $10 million of this allocation the first week of April and expects to close the remaining portion by the end of the second quarter. The allocation was provided to Hope House, a non-profit that provides clinical treatment, job training and placement for recovering alcoholics and substance abusers. Along with $7.4 million in financing it enabled Hope House to build a new facility in the Roxbury neighborhood of Boston. We have made more than $6.7 million in commercial loans in the first quarter, there is more than $26 million in loans approved and in the process of closing, and we have $100 million in our pipeline." Average deposits increased $86 million, or 14%, from the first quarter of 2008 to $721 million in the first quarter of 2009, almost all of which was due to higher certificate of deposit balances. NOW, savings, and demand deposit products increased $8 million, $2 million, and $2 million, respectively, which offsets the decline of $12 million in MMDA accounts. The Bank also 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 $10 million, or 4.5%, from the first quarter of 2008. Net interest income was $7.7 million for the three months ended March 31, 2009 compared to $6.8 million in the same period of 2008, an increase of $972,000, or 14%. The Bank's net interest margin rose to 3.09% in the three months ended March 31, 2009 compared to 3.02% for the same three-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 record increase of $118 million in interest-earning assets the Bank had a decline in interest and dividend income of $275,000, or 2% for the three months ending March 31, 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 margin is the decline in the cost of interest-bearing liabilities, which decreased 95 basis points to 2.41% for the three months ending March 31, 2009, resulting in a decline in interest expense of $1.2 million. The provision for credit losses was $500,000 and $250,000 for the three months ended March 31, 2009 and 2008, 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 attributable to the trend of increased delinquent and impaired loans as well as the continued economic uncertainty due to the slow economic response to the Department of the Treasury and Federal Reserve's initiatives to stabilize the economy and the housing market in particular. The reserve for credit losses was $9,109,000, $8,736,000, and $7,813,000 representing 1.11%, 1.04%, and 1.07% of total loans at March 31, 2009, December 31, 2008, and March 31, 2008, respectively. The Bank had net charge-offs of $127,000 and $75,000 in the first quarter of 2009 and 2008, respectively. Nonaccrual loans amounted to $1,680,000, $2,069,000, and $842,000 at March 31, 2009, December 31, 2008, and March 31, 2008, respectively. The nonaccrual loans as of March 31, 2009 consisted of two residential mortgages, both in the process of foreclosure, and four commercial relationships. At March 31, 2009, loans 30 days or more past due represented 1.15% of the portfolio compared to .88% at December 31, 2008. Total noninterest income was $1.4 million and $1.2 million for the three months ended March 31, 2009 and 2008, respectively, an increase of $242,000, or 28%. The Bank recorded a $277,000 net gain on securities in the first quarter of 2009, compared to $31,000 in the same period of 2008. In addition, primarily as a result of decreased residential mortgage rates and a subsequent increase in refinanced loan activity in the first quarter of 2009, the Bank recorded $90,000 in mortgage banking income. The Bank was not originating residential loans with the intent to sell such loans in the first quarter of 2008. These increases were offset by declines in investment management and loan fees, which declined $42,000 and $34,000, respectively, in addition to declines in bank owned life insurance income and deposit services charges, which declined $12,000 and $6,000, respectively. Total operating expenses were $6.8 million and $6.3 million for the three months ended March 31, 2009 and 2008, respectively, an increase of $480,000, or 8%. The most significant increase was a $239,000 increase in assessment fees as a result of increased FDIC insurance premiums. 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 $184,000, a result of normal merit increases, an increased head count as a result of our new branch in Ashmont, commission pay, and increased medical costs. Occupancy and equipment costs increased $78,000 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. Professional fees increased $58,000 primarily due to various risk management costs and legal fees. Advertising and marketing costs increased $53,000 as a result of promotional costs for various product specials. Founded in 1987, Wainwright Bank offers a complete array of commercial banking services, including investment management. 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 March 31, 2009 2008 Net interest income $ 7,724 $ 6,752 Provision for credit losses 500 250 Noninterest income 1,422 1,180 Other noninterest expense 6,768 6,288 Income before taxes 1,878 1,394 Income tax provision 320 210 Net income 1,558 1,184 Net income available to common shareholders 1,202 1,109 Earnings per share: Basic $ 0.17 $ 0.15 Diluted $ 0.16 $ 0.14 Return on average shareholders' equity 7.17% 6.66% Return on average assets 0.60% .51% Net interest margin 3.09% 3.02% Weighted average common shares outstanding: Basic 7,250,361 7,478,630 Diluted 8,190,310 8,453,919 at March 31, 2009 and 2008 Total Assets $1,050,113 $ 929,251 Total Loans 820,837 732,198 Total Investments 120,167 155,417 Total Deposits 732,186 623,792 Total Borrowed Funds 221,263 233,509 Shareholders' Equity 87,892 68,511 Book Value Per Common Share $ 8.01 $ 8.34 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/

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