WAIN Wainwright Bank & Trust Company (MM)

BOSTON, Oct. 12 /PRNewswire-FirstCall/ -- Wainwright Bank & Trust Company (NASDAQ:WAIN) reported 2006 third quarter consolidated net income of $1,855,000 and diluted earnings per share of $.23 ($.24 per basic share). This compares to consolidated net income of $1,814,000 and diluted earnings per share of $.21 ($.23 per basic share) for the quarter ended September 30, 2005. Consolidated net income for the nine months ended September 30, 2006 is $5,248,000, slightly higher than the previous nine month record earnings of $5,185,000 for the same prior year period. Diluted earnings per share were $.63 for the nine months ended September 30, 2006 ($.69 per basic share) compared to diluted earnings per share of $.60 for the nine months ended September 30, 2005 ($.65 per basic share). The EPS amounts reflect the impact of stock repurchases made during the last twelve months. All prior period earnings per share amounts have been adjusted to reflect the 5% common stock dividend declared and paid in the second quarter of 2006. Net interest income was $6,949,000 in the third quarter of 2006 compared to $6,683,000 in the third quarter of 2005. Through the first nine months of 2006, net interest income was $21,056,000 compared to $20,220,000 for the first nine months of 2005. Jan A. Miller, President and CEO stated, "We are pleased with our performance in the first nine months of 2006. The $5.2 million in net income represents a record level of earnings for Wainwright for the first nine months of the year. Our average outstanding loan balances have grown 10% to $602 million during 2006. This solid loan growth has been achieved in a highly competitive market without any relaxation of our credit standards." Miller added, "However, we are not immune to the continued flat, and, at times inverted, yield curve. Despite the growth in the loan portfolio, especially in higher yielding commercial loans, our net interest yield has declined from 3.82% in the nine months ended September 30, 2005 to 3.72% in the nine months ended September 30, 2006." The loan growth has been funded by increases in deposits and borrowed funds, and cash flows provided by the investment portfolio. As short term rates have increased over the past year, the Bank has seen a larger percentage of its deposit base migrate into higher cost certificates of deposit. The provision for credit losses was $675,000 in the first three quarters of 2006 compared to $400,000 in the first three quarters of 2005. The reserve for credit losses was $6,783,000, $6,055,000, and $5,809,000 representing 1.09%, 0.99% and 1.01% of total loans at September 30, 2006, December 31, 2005, and September 30, 2005, respectively. The Bank had net recoveries of $53,000 in the first three quarters of 2006 compared to net chargeoffs of $70,000 in the first three quarters of 2005. The Bank had no loans on nonaccrual status at September 30, 2006 and December 31, 2005 compared to $65,000 at September 30, 2005. As the mix of the loan portfolio has shifted slightly from residential mortgages to commercial loans, a higher reserve level is required. Total noninterest revenue increased from $3.9 million in the first three quarters of 2005 to $4.4 million in the first three quarters of 2006. In the fourth quarter of 2005 the Bank invested $10 million in a Bank owned life insurance product which provided tax free income of $329,000 in the first three quarters of 2006. In each of the past two years, the Bank has been the recipient of a Bank Enterprise Award from the Community Development Financial Institutions fund of the U.S. Treasury. These awards have been provided in recognition of the Bank's lending activities in distressed communities. The Bank received $540,000 in the nine months ended September 30, 2006 compared to $227,000 in the nine months ended September 30, 2005. Loan fee income is down by $57,000 primarily due to the sale of the credit card portfolio in the third quarter of 2005. Total operating expenses were $17.6 million in the nine months ended September 30, 2006 compared to $16.3 million in the nine months ended September 30, 2005. The Bank opened two new branches in the latter half of 2005, which contributed $625,000 of additional cost in the first nine months of 2006. Compensation costs were up $850,000 due to a small increase in headcount to service the new branches and the growth in loans and deposits, medical insurance increases, and normal merit raises. Occupancy and equipment costs rose $645,000 largely due to the new two branches. The Bank recorded non-cash charges of $472,000 in the first three quarters of 2006 compared to $718,000 in the first three quarters of 2005 related to equity investments in affordable housing projects. These pretax charges will be more than offset by tax credits available to the Bank and tax deductions from operations. These community development investments are part of the Bank's nationally recognized commitment to community development activities. The Bank's current CRA rating is "Outstanding." Founded in 1987, Wainwright Bank offers a complete array of commercial banking services, including investment management. With Boston branches in the Financial District, Back Bay/South End, Jamaica Plain, Cambridge branches within Harvard Square, Kendall Square, Central Square and the Fresh Pond Mall, its Watertown branch, and Somerville branch, Brookline branch and Newton Centre, Wainwright is strategically positioned to provide consumer and commercial mortgages, loans, and deposit services to individuals, families, businesses, and non-profit organizations. This Press Release contains statements relating to future results of the Bank (including certain projections and business trends) that are considered "forward-looking statements" as defined in the Private Securities Legislation Reform Act of 1995. Actual results may differ materially from those projected as a result of certain risks and uncertainties, including but not limited to changes in political and economic conditions, interest rate fluctuations, competitive product and pricing pressures within the Bank's market, bond market fluctuations, personal and corporate customers' bankruptcies, and inflation, as well as other risks and uncertainties. FINANCIAL HIGHLIGHTS: (dollars in thousands) Three months ended September 30, 2006 and 2005 2006 2005 Net interest income $6,949 $6,683 Provision for credit losses 450 - Noninterest income 1,661 1,514 Noninterest expense 5,608 5,446 Income before taxes 2,552 2,751 Income tax provision 697 937 Net income 1,855 1,814 Net income available to common shareholders 1,780 1,739 Earnings per share: Basic $0.24 $0.23 Diluted $0.23 $0.21 Return on shareholders' equity (annualized) 11.04% 10.68% Return on assets (annualized) 0.94% 1.00% Net interest yield 3.71% 3.82% Weighted average common shares outstanding: Basic 7,282,595 7,604,953 Diluted 8,231,312 8,588,161 FINANCIAL HIGHLIGHTS: (dollars in thousands) Nine months ended September 30, 2006 and 2005 2006 2005 Net interest income $21,056 $20,220 Provision for credit losses 675 400 Noninterest income 4,421 3,934 Noninterest expense 17,562 16,301 Income before taxes 7,240 7,453 Income tax provision 1,992 2,268 Net income 5,248 5,185 Net income available to common shareholders 5,023 4,960 Earnings per share: Basic $0.69 $0.65 Diluted $0.63 $0.60 Return on shareholders' equity (annualized) 10.57% 10.48% Return on assets (annualized) 0.88% 0.94% Net interest yield 3.72% 3.82% Weighted average common shares outstanding: Basic 7,324,982 7,602,097 Diluted 8,271,261 8,602,347 at September 30, 2006 and 2005 Total Assets $816,206 $737,832 Total Loans 620,133 573,569 Total Investments 118,134 124,543 Total Deposits 574,926 541,983 Shareholders' Equity 67,195 67,172 Book Value Per Common Share $8.24 $7.92 Contact: James J. Barrett Senior Vice President and Chief Financial Officer Tel: (617) 478-4000 Fax: (617) 439-4854 Website: http://www.wainwrightbank.com/ DATASOURCE: Wainwright Bank & Trust Company CONTACT: James J. Barrett, Senior Vice President and Chief Financial Officer of Wainwright Bank, +1-617-478-4000, +1-617-439-4854 (fax) Web site: http://www.wainwrightbank.com/

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