WAKE FOREST, N.C., July 18, 2023 (GLOBE NEWSWIRE) -- Wake Forest Bancshares, Inc., (OTC: WAKE), parent company of Wake Forest Federal, announced today that the Company reported earnings of $498,980 or $0.47 per share for its quarter ended June 30, 2023. The Company reported earnings of $364,958 or $0.34 per share for the same quarter a year earlier. Earnings for the first nine months of the Company’s fiscal year were reported at $1,462,211 or $1.37 per share versus $997,584 or $0.93 per share for the same nine-month period a year earlier.
In announcing the earnings, Renee H. Shaw, President and Chief Executive Officer stated that the Company was very pleased with the reported earnings which were reflective of stable local economic conditions, our resilient real estate markets, and Federal Reserve rate policies that have widened our spreads. Federal Reserve policy actions to combat inflation since March of 2022 have increased short term interest rates by 5.00% with the potential for further rate increases in the future. Because the Company’s balance sheet is intentionally shorter term and rate sensitive in order to avoid prolonged interest rate risk, higher rates positively impact our short-term results and such rate increases have had a significant effect on our earnings for the past three quarters. For the most recent quarter, the Company’s interest rate margin was 4.09% vs 3.15% for the same quarter a year earlier.
While our area’s economic conditions, unemployment rates, and residential home sales continue to remain healthy despite current inflationary concerns, higher mortgage rates and home prices tend to price certain buyers out of the market. These factors could impact the health of certain segments of our real estate market but have yet to materialize. However, our lending environment and labor force benefits because we are a part of the desirable Research Triangle area which is recognized as one of the top regions in the country for innovation, growth, business and quality of life factors.
The Company’s loan portfolio has increased from levels outstanding from the previous quarter and from a year ago. Because we house the mortgage loans we originate, a conscious decision to limit growth in our long-term residential loan portfolio and emphasize construction lending was made when market rates were still relatively low in order to avoid excessive interest rate risk. While mortgage rates have now risen to more historically typical levels, demand for longer fixed rate residential financing at these new rates has decreased, driven somewhat by a lack of new refinancings. In addition, the credit quality of our loan portfolio has continued to be excellent. The Company was delighted that it had no reported problem assets and no foreclosures or loan charge-offs during the current quarter. As a result, no additional loan loss provisions this quarter were considered necessary because of the lack of credit concerns and the healthy level of our existing loss allowances. The Company’s loan loss allowance amounted to approximately 1.99% of total loans outstanding at June 30, 2023. However, as the Federal Reserve continues to push short term rates higher, we will closely monitor our loan portfolios that adjust with market rates for any signs of credit concerns.
During the quarter, the Board declared a cash dividend of $0.11 per share to its shareholders. The Company has now paid quarterly cash dividends consecutively to its shareholders for the past twenty-seven years.
On June 27, 2023, the Company announced its intent to be acquired by Piedmont Financial Holding Company. Per the terms of the transaction, minority shareholders of Wake Forest Bancshares will receive $34.34 in cash for each publicly owned share. Based on 435,296 publicly held shares, the aggregate cash payment equals approximately $14.95 million. The transaction has an implied aggregate deal value of $36.75 million based on a total of 1,070,296 shares outstanding, which includes 635,000 shares of Wake Forest Bancshares owned by Wake Forest Bancorp, M.H.C that will be cancelled concurrently with the transaction. The transaction is expected to close during the fourth quarter of 2023, subject to regulatory and shareholder approval, and the satisfaction of the closing conditions to the merger. For additional information, please see our press release issued concurrently with our announcement.
Total assets of the Company amounted to $118,601,344 at June 30, 2023. Total loans receivable and deposits outstanding at June 30, 2023 amounted to $72,096,645 and $89,528,765, respectively. Wake Forest Bancshares Inc.’s tier 1 capital leverage ratio was 23.21% at June 30, 2023. Wake Forest Bancshares, Inc. has 1,070,296 shares of common stock outstanding, including 635,000 shares held by its mutual holding company. 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
