Wainwright Bank & Trust Company reported 2006 second quarter consolidated net income of $1,708,000 and diluted earnings per share of $.21 ($.22 per basic share).
This report compares to consolidated net income of $1,847,000 and diluted earnings per share of $.21 ($.23 per basic share) for the quarter ended June 30, 2005.
Jan A. Miller, President and CEO stated, “We are pleased with our performance in the first two quarters of 2006. The $3.4 million in net income represents a record level for Wainwright for the first six months of the year. Although we have experienced some recent loan payoffs, overall our loan portfolio has continued its solid growth in a highly competitive market over the past twelve months.”
Consolidated net income for the six months ended June 30, 2006 is $3,393,000, slightly higher than the previous six-month record earnings of $3,371,000 for the same prior year period. Diluted earnings per share were $.41 for the six months ended June 30, 2006 ($.44 per basic share) compared to diluted earnings per share of $.39 for the six months ended June 30, 2005 ($.42 per basic share).
The EPS amounts reflect the impact of stock repurchases made during the last twelve months. All prior period earnings per share amounts have been adjusted to reflect the 5% common stock dividend declared and paid in the second quarter of 2006.
Net interest income was $7.1 million in the second quarter of 2006 compared to $6.9 million in the second quarter of 2005. Through the first six months of 2006, net interest income was $14.1 million compared to $13.5 million for the first six months of 2005.
The Bank’s average total earning assets increased $63 million to $771 million in the second quarter of 2006. Average outstanding loans increased $43 million, or 8%. Of this amount, $41 million was due to growth in the Bank’s commercial and industrial loan portfolio. The loan growth has been funded by increases in deposits, borrowed funds, and cash flows provided by the investment portfolio.
The Bank is a member of the Federal Home Loan Bank of Boston and routinely uses the FHLB as a source of borrowed funds. The Bank maintains an investment position in the FHLB which is generally determined by its level of borrowing activity and during the second quarter of 2006 amounted to approximately $8.7 million. The FHLB of Boston amended its dividend schedule and deferred the declaration of its normal quarterly dividend. As such, no income was recognized by the Bank on this investment for the second quarter of 2006. The dividend recorded in the first quarter of this year amounted to $121,000.
The provision for credit losses was $225,000 in the first two quarters of 2006 compared to $400,000 in the first two quarters of 2005. The reserve for credit losses was $6,284,000, $6,055,000, and $5,885,000 representing 1.05%, 0.99%, and 1.06% of total loans at June 30, 2006, December 31, 2005, and June 30, 2005, respectively. The Bank had net recoveries of $4,000 and $6,000 in the first two quarters of 2006 and 2005, respectively. The Bank had no loans on nonaccrual status at June 30, 2006 and December 31, 2005 compared to $243,000 at June 30, 2005.
Total noninterest revenue increased from $2.4 million in the first two quarters of 2005 to $2.8 million in the first two quarters of 2006. In the fourth quarter of 2005 the Bank invested $10 million in a Bank-owned life insurance product which provided tax-free income of $218,000 in the first two quarters of 2006.
Total operating expenses were $12.0 million in the six months ended June 30, 2006 compared to $10.9 million in the six months ended June 30, 2005. The Bank opened two new branches in the latter half of 2005 which contributed $553,000 of additional cost in the first six months of 2006. Compensation costs were up $631,000 due to a small increase in headcount to service the new branches and the growth in loans and deposits, medical insurance increases, and normal merit raises. Occupancy and equipment costs rose $512,000 largely due to the new two branches.
The Bank recorded non-cash charges of $314,000 in the first two quarters of 2006 compared to $574,000 in the first two quarters of 2005 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.”