WAKE FOREST, N.C., Dec. 16, 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 $1,170,850 or $1.06 per share for its fiscal year ended September 30, 2020. The Company’s earnings for the prior fiscal year were $1,631,600 or $1.47 per share. Earnings for the current quarter were reported at $268,550 or $0.24 per share versus $254,566 or $0.23 for the previous quarter and $418,450 or $0.38 per share for the quarter ended September 30, 2019.
In announcing the earnings, Renee H. Shaw, President and Chief Executive Officer, stated that given the challenging times, the Company’s fiscal year end and quarterly results were in line with expectations and surprisingly slightly less than budgetary amounts established at the beginning of the year. Earnings for both the current quarter and the Company’s fiscal year were adversely impacted by Federal Reserve rate movements over the past fifteen months but specifically during the month of March, 2020. The Fed decreased rates by a combined 225 basis points since 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 margin contracted from 3.69% during its year ended September 30, 2019 to 3.23% for its current fiscal year end. At September 30, 2020, the Company’s net interest rate spread was 2.96%. In addition, the Company incurred approximately $100,000 in data processing expense associated with a core processing conversion this year which impacted current year results.
Economic conditions and residential home sales continue to be stable in our local markets. Our real estate markets benefit because we are a part of the Research Triangle area which is consistently recognized as one of the top regions in the country for innovation, economic activity and quality of life issues. During the most recent quarter, sales activity remained resilient not only due to historically low mortgage rates, but also because of stable home prices and tight housing inventories. Although there has been no significant effect on the local housing market as of yet, the COVID 19 pandemic created a sizable increase in the local unemployment rate. However, the pandemic has yet to impact the credit quality of our loan portfolio, perhaps because requested loan modifications and pandemic financial assistance in the form of stimulus payments and enhanced unemployment insurance payments have masked the potential long term effects of the economic slowdown. Earlier forms of government assistance have now essentially ended and the future of additional governmental support is uncertain. In addition, the Company provided loan modifications to certain borrowers adversely and directly impacted by the pandemic but those accommodations have also recently ended. The Company will continue to evaluate the actual impact of the lingering pandemic on credit quality and consider any future accommodations or adjustments to its loss allowances.
The Company’s loan portfolio has largely remained unchanged from levels outstanding a year ago. The Company was particularly pleased with its lending performance this past year because given the economic impact of the pandemic, a significant decline was possible, particularly since the size of the Company’s loan portfolio was not distorted by any short term PPP loans. In addition, 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 or loan charge-offs during the current year. As a result, no additional loan loss provisions were considered necessary this year because of our healthy level of loss allowances. The Company’s loan loss allowance amounted to approximately 2.11% of total loans outstanding at September 30, 2020.
Total assets of the Company amounted to $107,452,350 at September 30, 2020. Total loans receivable and deposits outstanding at September 30, 2020 amounted to $68,438,450 and $80,010,450, respectively. Wake Forest Bancshares Inc.’s tier 1 capital leverage ratio was 24.43% at September 30, 2020. Wake Forest Bancshares, Inc. has 1,097,790 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