Wainwright Bank & Trust Company Reports 5% Increase in Fourth Quarter Results

BOSTON, Feb. 3  /PRNewswire-FirstCall/ -- Wainwright Bank & Trust Company (NASDAQ:WAIN) reported consolidated net income of $1,228,000 for the fourth quarter of 2008 and diluted and basic earnings per share of $.15.  This compares to $1,165,000 for the fourth quarter of 2007 and diluted and basic earnings per share of $.14.  Consolidated net income for 2008 was $3,344,000 with diluted earnings per share of $.40 ($.41 per share basic).  This compares to consolidated net income of $6,036,000 and diluted earnings per share of $.71 ($.76 per share basic) for 2007.  The decline in net income is primarily the result of two significant items.  The Bank recorded net securities losses of $3,129,000 in 2008 compared to net securities losses of $307,000 in 2007.  The 2008 loss included $2,017,000 recognized on certain investments in Lehman Brothers which declared bankruptcy in the third quarter.  Furthermore, in the first quarter 2007, the Bank recorded an $850,000 gain on the sale of one property held for investment purposes.  In addition, the Bank recorded a provision for credit losses of $1,800,000 for the twelve months ending December 31, 2008 compared to $700,000 in 2007.  The increased provision is primarily due to the substantial growth in the loan portfolio.

The Bank's assets increased $141 million, or 15%, to $1.055 billion from $914 million for the years ended December 31, 2008 and 2007, respectively.  The outstanding loan balances grew $129 million, or 18%, from December 31, 2007 to $842 million at December 31, 2008.  Residential real estate loans (primarily first mortgages) increased $87 million, or 28% during the period and accounted for the majority of the increase.  The Bank also saw increases in its commercial and commercial real estate loans in the amounts of $37 million and $17 million, respectively, which were partially offset by net payoffs of $12 million in the commercial construction portfolio.

Previously, in December, the Bank announced it had received a $22 million investment from the U.S. Treasury's Capital Purchase Program.  Since receipt of the investment, the Bank has made more than $17 million in community development loans, more than $6 million in business loans and more than $2.5 million in residential mortgages.  Jan A. Miller, President and CEO stated, "We are pleased that the U.S. Treasury chose to make an investment in Wainwright to enhance our strong capital position and enable us to continue to meet the financing needs of our customers.  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 which is a core business strategy of the Bank, while our portfolio of construction loans continues to see net payoffs."

"Our deposit base has also seen growth in core transaction accounts.  We are encouraged with the excitement generated after opening our newest branch at Ashmont Station, Dorchester.  As we have with our prior three new branches, we are seeking LEED certification from the U.S. Green Building Council.  Wainwright has also been awarded a $25 million allocation of federal New Market Tax Credits and a $300,000 2008 Bank Enterprise Award.  The New Markets Tax Credit allows the Bank to provide critical capital to investments in low-income neighborhoods that could not happen without the program.  The Bank Enterprise Award from the U.S. Treasury's Community Development Financial Institutions Fund is in recognition of providing financial services and support within distressed communities.  Wainwright was one of only two New England banks to receive the award."

Deposits increased $100 million, or 16%, from December 31, 2007 to $717 million at December 31, 2008.  As market rates have decreased to unprecedented low levels, certificate of deposit products have attracted the majority of the increase in deposit volumes.  The Bank also uses 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 $20 million to $241 million at December 31, 2008.

Net interest income increased almost $3 million, or 11%, to $29.1 million for the twelve months ending December 31, 2008 compared to $26.2 million for 2007.  The Bank's net interest yield rose to 3.20% in the three months ending December 31, 2008 compared to 2.97% for the same three-month period in 2007.  However, the Bank's net interest yield for the twelve months ending December 31, 2008 is 3.11%, a slight decline of 2 basis points, from 3.13% for the same twelve-month period in 2007.

The provision for credit losses was $1,800,000 and $700,000 for the twelve months ending December 31, 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 attributable to the growth in the loan portfolio, weakened economic conditions, and both increased nonaccrual loans and charge-offs in 2008.  The reserve for credit losses was $8,736,000, $7,638,000, and $6,984,000 representing 1.04%, 1.07%, and 1.10% of total loans at December 31, 2008, 2007, and 2006, respectively.  The Bank had net charge-offs of $702,000 and $46,000 in the twelve months ending December 31, 2008 and 2007, respectively, and net recoveries of $54,000 in 2006.  Nonaccrual loans amounted to $2,069,000, $50,000, and $86,000 at December 31, 2008, 2007, and 2006, respectively.  The nonaccrual loans as of December 31, 2008 consisted of three residential mortgages and four commercial relationships.  At December 31, 2008, loans 30 days or more past due represented .88% of the portfolio compared to .45% at December 31, 2007.

Total noninterest income was $1.7 million and $5.4 million for the twelve months ended December 31, 2008 and 2007, respectively, a decline of $3.7 million, or 69%.  The increase in securities losses noted above, a prior period gain of $850,000 on the sale of property that is not present in the current period, a reduction in asset management fees of $274,000, and a reduction in deposit service charges of $97,000 account for the decrease.  Mortgage banking income and bank owned life insurance income increased $43,000 and $15,000, respectively.

Total operating expenses were $25.5 million and $23.4 million for the twelve months ended December 31, 2008 and 2007, respectively, an increase of $2.1 million, or 9%.  Salaries and employee benefits increased $1.1 million, a result of normal merit increases, an increased head count as a result of opening Ashmont branch, commission pay, and increased medical and other benefit costs.  Regulatory assessment fees increased $539,000 due to FDIC insurance premiums.  Occupancy and equipment costs increased $373,000 due to increased rent, utility costs, and taxes for the branches.  Professional fees increased $207,000 primarily due to consultants hired to complete information technology related projects and legal fees.  Advertising and marketing costs increased $99,000 as a result of promotional costs for various product specials.

The Bank recorded non-cash charges of $237,000 in the twelve months ended December 31, 2008 compared to $491,000 in the same period 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".  Debit and ATM card expenses decreased $202,000, the result of savings realized from a systems conversion completed in 2007, and postage and courier costs declined $52,000.

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)

  Twelve months ended December 31,              2008              2007

  Net interest income                         $29,116           $26,247

  Provision for credit losses                   1,800               700

  Noninterest income                            1,679             5,427

  Other noninterest expense                    25,522            23,385

  Income before taxes                           3,473             7,589

  Income tax provision                            129             1,553

  Net income                                    3,344             6,036

  Net income available to common shareholders   3,007             5,736

  Earnings per share:
  Basic                                       $0.41             $0.76
  Diluted                                     $0.40             $0.71

  Return on average shareholders' equity        4.85%             8.60%

  Return on average assets                       .34%              .69%

  Net interest yield                            3.11%             3.13%

  Weighted average common shares
  outstanding:
  Basic                                   7,317,485         7,559,938
  Diluted                                 8,287,068         8,560,691

  at December 31, 2008 and 2007

  Total Assets                             $1,055,288          $913,695

  Total Loans                                 841,786           713,279

  Total Investments                           126,628           146,992

  Total Deposits                              717,134           617,287

  Shareholders' Equity                         87,439            70,814

  Book Value Per Common Share                   $8.00             $8.38



  FINANCIAL HIGHLIGHTS:
  (dollars in thousands)

  Three months ended December 31,                2008              2007

  Net interest income                          $7,810            $6,522

  Provision for credit losses                     400               200

  Noninterest income                              424             1,170

  Noninterest expense                           6,646             6,168

  Income before taxes                           1,188             1,324

  Income tax (benefit) provision                 (40)               159

  Net income                                    1,228             1,165

  Net income available to common shareholders   1,116             1,090

  Earnings per share:
  Basic                                       $0.15             $0.14
  Diluted                                     $0.15             $0.14

  Return on average shareholders' equity        7.21%             6.51%

  Return on average assets                       .48%              .51%

  Net interest yield                            3.20%             2.97%

  Weighted average common shares
  outstanding:
  Basic                                   7,250,653         7,527,430
  Diluted                                 8,202,134         8,530,200





  James J. Barrett
  Senior VP and Chief Financial Officer
  Tel: [phone]
  Fax: [phone]
  Website: http://www.wainwrightbank.com/

DATASOURCE: Wainwright Bank & Trust Company



CONTACT:  James J. Barrett, Senior VP and Chief Financial Officer,

[phone], Fax, [phone]



Web Site:  https://www.wainwrightbank.com/ 

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