WAKE FOREST, N.C., April 28, 2020 (GLOBE NEWSWIRE) -- Wake Forest Bancshares, Inc., (OTC BB: WAKE) parent company of Wake Forest Federal Savings and Loan Association, announced today that the Company reported earnings of $297,069 or $0.27 per share for its quarter ended March 31, 2020. The Company reported earnings of $381,861 or $0.34 per share for the same quarter a year earlier. Earnings for the first six months of the Company’s fiscal year were reported at $647,747 or $0.59 per share versus $802,745 or $0.72 per share for the same six month period a year earlier.
In announcing the earnings, Renee H. Shaw, President and Chief Executive Officer, stated that although the Company’s quarterly results were in line with expectations, earnings were adversely impacted by Federal Reserve rate movements over the past nine months and specifically during the month of March, 2020. The Fed has decreased rates by a combined 225 basis points beginning in July of 2019, including 150 basis points in March 2020 alone as a result of the economic impact of the COVID 19 pandemic. As a result, the Company’s interest rate margins contracted from 3.62% during its March 2019 quarter to 3.33% for its most recent quarter. At March 31, 2020, the Company’s net interest rate spread was 2.78% and further deterioration in spread is expected to occur during April when segments of the Company’s rate sensitive loan portfolio tied to Prime reprice. In addition, the Company incurred approximately $49,000 in expense associated with a core processing conversion during the current quarter, and close to $100,000 in such expense for the first six months of its current fiscal year. However, the Company’s operations continue to be positively impacted by the absence of nonperforming assets and the lack of need for additional loan loss provisions. The Company was delighted to report that it had no problem assets at any time during the current quarter.
Economic conditions and residential home sales continue to be stable in our local markets. Our real estate markets have benefited because we are a part of the Research Triangle area which is consistently recognized as one of the top regions in the country for economic activity and quality of life issues. During the current quarter, sales activity has remained resilient, home prices have stabilized, and inventories of available homes have continued to remain tight. Although there has been no significant effect on the local housing market as of yet, the COVID 19 pandemic is expected to cause a sizable increase in the local unemployment rate which could impact our credit quality, at least in the short term.
The Company’s loan portfolio declined slightly from the previous quarter primarily because very little additional lending occurred in March once the social distancing measures of the pandemic were implemented. No additional loan loss provisions were necessary this quarter because of our sufficient level of loan loss allowances and lack of problem loans. The Company had no loan charge-offs in the current quarter and its loan loss allowance amounted to approximately 2.15% of total loans outstanding at March 31, 2020.
Total assets of the Company amounted to $104,224,528 at March 31, 2020. Total loans receivable and deposits outstanding at March 31, 2020 amounted to $66,975,716 and $77,050,471, respectively. Wake Forest Bancshares Inc.’s tier 1 capital leverage ratio was 24.43% at March 31, 2020.
Wake Forest Bancshares, Inc. has 1,100,393 shares of common stock outstanding. Based in Wake Forest, North Carolina since 1922, the Company conducts business as Wake Forest Federal from its office in Wake Forest, (Wake County), North Carolina.
Contact: Renee H. Shaw, CEO
(919) 556-5146