Wainwright Bank & Trust Company Reports Third Quarter Results

BOSTON, Oct. 12  /PRNewswire-FirstCall/ -- Wainwright Bank & Trust Company (NASDAQ:WAIN) reported 2007 third quarter consolidated net income of $1,314,000 and diluted earnings per share of $.15 ($.16 per basic share). This compares to consolidated net income of $1,855,000 and diluted earnings per share of $.21 ($.23 per basic share) for the quarter ended September 30, 2006.  Consolidated net income for the nine months ended September 30, 2007 is $4,871,000, with diluted earnings per share of $.57 ($.61 per basic share). Consolidated net income for the nine months ended September 30, 2006 was $5,248,000 with diluted earnings per share of $.60 ($.65 per basic share). 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 2007.

The Bank's average outstanding loan balances grew $87 million or over 14% from the third quarter of 2006 to $694 million in the third quarter of 2007. The commercial loan portfolio, including higher yielding commercial real estate and construction loans, increased by $59 million and the residential real estate portfolio grew $28 million.  Jan A. Miller, President and CEO stated, "In this competitive market, we have been able to record solid loan growth while maintaining our high credit standards.  We have no exposure to the sub-prime market and there are no residential mortgages in default.  Our commercial loan portfolio has increased 17% in the last 12 months.  In addition, our deposit base has also seen some recent growth in core transaction accounts.  The relatively flat yield curve and the accompanying margin compression continue to impede our net interest income, despite the success we have had in growing the balance sheet."

Average deposits increased $51 million from the third quarter of 2006 to $629 million in the third quarter of 2007.  Certificates of deposit increased by $29 million or 14%, transaction account balances are up $16 million or 10%, and money market and savings accounts grew $6 million or 3%.  In addition to the increase in deposits, an increase in borrowed funds of $62 million was used to help fund the growth in the loan portfolio.  Net interest income was $6.5 million in the third quarter of 2007 compared to $6.9 million in the third quarter of 2006.  Continuing margin compression has reduced the Bank's net interest yield to 3.00% in the third quarter of 2007 compared to 3.71% in the third quarter of 2006.

The provision for credit losses was $500,000 and $675,000 for the nine months ended September 30, 2007 and 2006, respectively.  The reserve for credit losses was $7,482,000, $6,984,000, and $6,783,000 representing 1.06%, 1.10% and 1.09% of total loans at September 30, 2007, December 31, 2006, and September 30, 2006, respectively.  The Bank had net chargeoffs of $2,000 in the first three quarters of 2007 compared to net recoveries of $53,000 in the first three quarters of 2006.  The Bank had no nonaccrual loans at September 30, 2007 and 2006.  There was one nonaccrual loan for $86,000 at December 31, 2006.

Total noninterest income was $4.3 million and $4.4 million for the nine months ended September 30, 2007 and 2006, respectively.  In the first quarter of 2007 the Bank sold one property held for investment purposes and recorded an $850,000 gain on the sale.  The rental income associated with this property was $185,000 in the first three quarters of 2006.  The 2006 period benefited from awards totaling $540,000 from the Community Development Financial Institutions Fund of the U. S. Treasury.  The awards were provided in recognition of the Bank's lending activities in distressed communities.  In addition, there were insignificant increases in investment management fees, bank owned life insurance income, and loan fees in the amounts of $89,000, $45,000, and $41,000, respectively, which were offset by decreases in net security gains and deposit service charges of $410,000 and $49,000, respectively.

Total operating expenses were $17.2 million and $17.6 million for the nine months ended September 30, 2007 and 2006, respectively.  Occupancy and equipment costs were down $242,000 due to lower depreciation charges, maintenance costs, and property taxes.  The Bank recorded non-cash charges of $371,000 in the first three quarters of 2007 compared to $472,000 in the first three quarters of 2006 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 which has helped the Bank earn its current CRA rating of "Outstanding".  In an earlier period, the Bank sold its credit card portfolio. The first three quarters of 2006 included $81,000 of final processing costs related to the sold portfolio.  Partially offsetting the above was an increase of $328,000, or 3%, in compensation costs due to normal merit raises and higher medical cost as well as a $42,000 increase in debit and ATM card expenses related to increased volumes in transaction accounts.

With Boston branches in the Financial District, Back Bay/South End, Jamaica Plain, 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:  [phone]
  Fax:  [phone]
  Website: http://www.wainwrightbank.com/



                            FINANCIAL HIGHLIGHTS:
                           (dollars in thousands)

  Three months ended September 30,                 2007              2006

  Net interest income                             $6,518            $6,949

  Provision for credit losses                        250               450

  Noninterest income                               1,046             1,661

  Noninterest expense                              5,736             5,608

  Income before taxes                              1,578             2,552

  Income tax provision                               264               697

  Net income                                       1,314             1,855

  Net income available to common shareholders      1,239             1,780

  Earnings per share:
     Basic                                         $0.16             $0.23
     Diluted                                       $0.15             $0.21

  Return on average shareholders' equity           7.43%            11.04%

  Return on average assets                          .58%              .94%

  Net interest yield                               3.00%             3.71%

  Weighted average common shares outstanding:
     Basic                                     7,543,338         7,646,725
     Diluted                                   8,546,668         8,642,878



                           FINANCIAL HIGHLIGHTS:
                           (dollars in thousands)

  Nine months ended September 30,                  2007              2006

  Net interest income                            $19,725           $21,056

  Provision for credit losses                        500               675

  Noninterest income                               4,257             4,421

  Other noninterest expense                       17,217            17,562

  Income before taxes                              6,265             7,240

  Income tax provision                             1,394             1,992

  Net income                                       4,871             5,248

  Net income available to common shareholders      4,646             5,023

  Earnings per share:
     Basic                                         $0.61             $0.65
     Diluted                                       $0.57             $0.60

  Return on average shareholders' equity           9.31%            10.57%

  Return on average assets                          .75%              .88%

  Net interest yield                               3.19%             3.72%

  Weighted average common shares outstanding:
     Basic                                     7,570,893         7,691,982
     Diluted                                   8,571,668         8,687,593

  at September 30, 2007 and 2006

  Total Assets                                  $913,006          $816,206

  Total Loans                                    703,376           620,133

  Total Investments                              145,128           118,134

  Total Deposits                                 639,180           574,926

  Shareholders' Equity                            70,060            67,195

  Book Value Per Common Share                      $8.29             $7.85


DATASOURCE: Wainwright Bank & Trust Company



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

Wainwright Bank & Trust Company, [phone], or Fax [phone]



Web site:  http://www.wainwrightbank.com/

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