Wake Forest Bancshares, Inc. Announces Third Quarter Results
WAKE FOREST, N.C., July 19, 2022 (GLOBE NEWSWIRE) -- Wake Forest Bancshares, Inc. (OTC: WAKE), parent company of Wake Forest Federal Savings and Loan Association, announced today that the Company reported earnings of $364,958 or $0.34 per share for its quarter ended June 30, 2022. The Company reported earnings of $322,721 or $0.29 per share for the same quarter a year earlier. Earnings for the first nine months of the Company’s fiscal year were reported at $997,584 or $0.93 per share versus $910,146 or $0.83 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’s earnings were reflective of stable local economic conditions and our resilient real estate markets but continue to be influenced by Federal Reserve rate policies. Federal Reserve policy actions to combat inflation in the past few months have increased short term interest rates by 1.50% with projections of further rate increases for the remainder of calendar year 2022. The Company’s balance sheet is intentionally shorter term and rate sensitive in order to avoid prolonged interest rate risk. While we believe that moderately higher rates will positively impact our short term results, such rate increases have had only a marginal effect on our earnings to date. The Company’s overall interest rate margin was 3.16% for the current quarter, versus 3.01% for its second quarter this year. In addition, included in our results for this quarter are certain employee retention credits (ERC credits) that the bank qualified for based on a pandemic related drop in revenues during two quarters in calendar year 2021.
While our area’s economic conditions and residential home sales continue to remain robust despite recent inflationary concerns, higher mortgage rates and home prices could begin to price certain buyers out of the market. However, our lending environment 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 remained largely unchanged from levels outstanding a year ago but has grown slightly from levels outstanding during our first two quarters this fiscal year. Because we hold the mortgage loans we originate, a conscious decision to limit growth in our long term residential loan portfolio and emphasize construction lending was undertaken while market rates were historically low in order to avoid excessive interest rate risk. As mortgage rates rise to more typical levels, we intend to become more active in permanent residential financing. In addition, the credit quality of our loan portfolio has continued to be excellent. The Company was delighted that problem assets were essentially non-existent and that no foreclosures or loan charge-offs occurred during the current quarter. As a result, no additional loan loss provisions during the current quarter were considered necessary because of the healthy level of our existing loss allowances. The Company’s loan loss allowance amounted to approximately 2.09% of total loans outstanding at June 30, 2022.
Wake Forest Bancshares paid a special cash dividend of $1.00 per share during the current quarter. Although the Company has paid quarterly cash dividends consecutively to its shareholders for the past twenty five years its Board chose to pay this special dividend in celebration of its 100th year as an independent community bank.
Total assets of the Company amounted to $113,623,115 at June 30, 2022. Total loans receivable and deposits outstanding at June 30, 2022 amounted to $68,653,410 and $86,129,490, respectively. Wake Forest Bancshares Inc.’s tier 1 capital leverage ratio was 23.07% at June 30, 2022. 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
