WAKE FOREST, N.C., Jan. 20 /PRNewswire-FirstCall/ -- Wake Forest Bancshares, Inc., (OTC Bulletin Board: WAKE) parent company of Wake Forest Federal Savings and Loan Association, announced today that the Company reported earnings of $53,645 or $0.05 per share for the quarter ended December 31, 2009, compared to earnings of $135,024 or $0.12 per share for the same quarter a year earlier.
In announcing the earnings, Robert C. White, President and Chief Executive Officer, stated that the current quarter's results were significantly impacted by compressed interest rate margins, elevated non-performing assets which required higher loan loss provisions, charge-offs, and costs associated with foreclosed properties, and assessments levied by the FDIC. A significant portion of the Company's loans and investments have either shorter maturities or variable rates and therefore the portfolio reacts fairly quickly to movements in the prime rate. The Federal Reserve lowered interest rates by 400 basis points since January of 2008 and the Company's interest rate sensitive loan and investment portfolios have adjusted more quickly to those rate movements than has the Company's deposit base. The Company's net interest margin was 2.28% during the quarter ended December 31, 2009 as compared to a margin of 2.12% for the same quarter a year earlier.
The weakened economic environment and tenuous housing market lingered throughout the past quarter and weighed heavily on the Company's operations. Real estate lending, including construction lending, continues to be significantly below normal for the Company's markets. As a high growth area, the relocation market represents a sizable portion of local real estate sales but has suffered recently because of higher than normal unemployment rates as well as newcomers being unable to sell their homes from other areas. The broader local real estate market has declined as inventories of new homes have climbed, the sluggish economy has created uncertainty, and numerous buyers have had difficulty obtaining financing.
Earnings for the current quarter were also impacted by elevated loss provisions, charge-offs and expenses associated with foreclosed loans. The Company provided $125,000 during the quarter in additional loss provisions to bolster its loan loss reserves and to reflect for declines in the value of its foreclosed properties. The Company charged off $102,332 in loans during the current quarter, primarily associated with its construction loan portfolio. In comparison, the Company added $60,000 in loss provisions and charged off $55,500 in loans against its loss allowances during the quarter ended December 31, 2008. In addition, the Company incurred $110,079 in foreclosure related expense and holding costs during the quarter ended December 31, 2009. Such costs totaled $17,316 during the same quarter a year earlier. The Company's loan loss allowances amounted to approximately 1.62% of total loans outstanding at December 31, 2009.
Total assets of the Company amounted to $111.6 million at December 31, 2009. Total loans receivable and deposits outstanding at December 31, 2009 amounted to $70.0 million and $90.1 million, respectively. Wake Forest Bancshares Inc.'s capital to assets ratio was 18.37% at December 31, 2009.
Wake Forest Bancshares, Inc. has 1,155,410 shares of common stock outstanding. Based in Wake Forest, North Carolina since 1922, the Company conducts business as Wake Forest Federal Savings & Loan Association from its office in Wake Forest, (Wake County), North Carolina.
SOURCE Wake Forest Bancshares, Inc.