Wake Forest Bancshares, Inc. Announces Second Quarter Results
WAKE FOREST, N.C., April 20 /PRNewswire-FirstCall/ -- Wake Forest Bancshares, Inc., (OTC Bulletin Board: WAKE) parent company of Wake Forest Federal Savings and Loan Association, announced today that the Company reported earnings of $85,237 or $0.07 per share for the quarter ended March 31, 2010, compared to earnings of $64,314 or $0.06 per share for the same quarter a year earlier. Earnings for the first six months of the Company's fiscal year were reported at $138,882 or $0.12 per share versus $199,338 or $0.17 per share for the same six month period a year earlier.
In announcing the earnings, Robert C. White, President and Chief Executive Officer, stated that the current quarter's results continue to be significantly impacted by compressed interest rate margins, elevated non-performing assets which required higher loss provisions, and costs associated with foreclosed properties. A significant portion of the Company's loans and investments have either shorter maturities or variable rates and therefore the portfolio reacts fairly quickly to movements in the prime rate. The Federal Reserve has lowered interest rates by 400 basis points since January of 2008 and the Company's interest rate sensitive loan and investment portfolios have adjusted more quickly to those rate movements than has the Company's deposit base. The Company's net interest margin was 2.21% during the quarter ended March 31, 2010 as compared to a margin of 1.81% for the same quarter a year earlier.
The weakened economic environment and tenuous housing market lingered throughout the past quarter and weighed heavily on the Company's operations. Home sales and real estate lending, including construction lending, continues at a pace significantly below normal for the Company's markets. As a high growth area, the relocation market represents a sizable portion of local real estate sales for our community but has suffered recently because of higher than normal unemployment rates as well as newcomers being unable to sell their homes from other areas. The broader local real estate market has declined as inventories of new homes have climbed, the sluggish economy has created uncertainty, and numerous buyers have had difficulty obtaining financing.
Earnings for the current quarter were also impacted by elevated loss provisions, charge-offs and expenses associated with foreclosed loans. The Company provided $108,900 and $233,900 during the quarter and six months ended March 31, 2010, respectively, in additional loss provisions to bolster its loan loss reserves and to reflect for declines in the value of its foreclosed properties. The Company charged off or wrote down loans or foreclosed properties amounting to $56,500 and $168,850 during the quarter and six month period ended March 31, 2010, respectively. In comparison, the Company added $60,000 and $120,000 in loss provisions and charged off or wrote down $62,300 and $132,800 against its loan loss and REO allowances during the quarter and six months ended March 31, 2009, respectively. In addition, the Company incurred $35,170 and $145,250 in foreclosure related expense and loss during the quarter and six months ended March 31, 2010. Such costs totaled $16,850 and $34,150 during the same quarter and six month period a year earlier. The Company's loan loss allowances amounted to approximately 1.70% of total loans outstanding at March 31, 2010.
Total assets of the Company amounted to $111.7 million at March 31, 2010. Total loans receivable and deposits outstanding at March 31, 2010 amounted to $69.5 million and $90.1 million, respectively. Wake Forest Bancshares Inc.'s capital to assets ratio was 18.46% at March 31, 2010.
Wake Forest Bancshares, Inc. has 1,155,410 shares of common stock outstanding. Based in Wake Forest, North Carolina since 1922, the Company conducts business as Wake Forest Federal Savings & Loan Association from its office in Wake Forest, (Wake County), North Carolina.
SOURCE Wake Forest Bancshares, Inc.
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