WAIN Wainwright Bank & Trust Company (MM)

BOSTON, Feb. 15 /PRNewswire-FirstCall/ -- Wainwright Bank & Trust Company (NASDAQ:WAIN) reported record consolidated net income of $7.0 million for 2006 and diluted earnings per share of $.84 ($.91 per basic share). This compares to consolidated net income of $6.8 million and diluted earnings per share of $.79 ($.86 per basic share) for 2005. Net income for the fourth quarter of 2006 was $1.7 million with diluted and basic earnings per share of $.21 and $.23, respectively. This compares to net income of $1.6 million and diluted and basic earnings per share of $.19 and $.21, respectively, for the fourth quarter of 2005. All prior year earnings per share amounts have been adjusted to reflect a 5% common stock dividend declared and paid during 2006. Net interest income was $27.6 million in 2006 compared to $26.9 million in 2005. Jan A. Miller, President and CEO stated, "During 2006 we continued to generate healthy loan growth across both our commercial and commercial real estate business lines while maintaining outstanding loan quality. Our average loans outstanding increased $50 million, or 9%, compared to 2005. This solid loan growth has been achieved in a highly competitive market without any relaxation of our credit standards. However, we are not immune to the continued inverted yield curve. Despite the growth in the loan portfolio, especially in higher yielding commercial loans, our net interest yield has declined from 3.78% in 2005 to 3.63% in 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 $875,000 in 2006 compared to $650,000 in 2005. The reserve for credit losses was $6,984,000 and $6,055,000 representing 1.10% and 0.99% of total loans at December 31, 2006 and 2005, respectively. The Bank had net recoveries of $54,000 in 2006 compared to net chargeoffs of $74,000 in 2005. The Bank had one loan on nonaccrual at December 31, 2006 amounting to $86,000 compared to no nonaccrual loans at December 31, 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 $5.3 million in 2005 to $5.7 million in 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 $449,000 in 2006 compared to $97,000 in 2005. 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 2006 compared to $227,000 in 2005. Loan fee income is down by $83,000 and securities gains were down $27,000. Total operating expenses were $22.8 million in 2006 compared to $22.5 million in 2005. The Bank opened two new branches in the latter half of 2005, which contributed $597,000 of additional cost in 2006. Compensation costs were up $876,000 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 $556,000 largely due to the two new branches. The Bank recorded non-cash charges of $699,000 in 2006 compared to $1,097,000 in 2005 related to equity investments in affordable housing projects. These pretax charges will be more than offset by tax credits available to the Bank. 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". During the fourth quarter of 2006, the Bank sold two real estate properties which had no carrying value. The sales proceeds netted $659,000. 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. James J. Barrett Senior VP and Chief Financial Officer Tel: (617) 478-4000 Fax: (617) 439-4854 Website: http://www.wainwrightbank.com/ FINANCIAL HIGHLIGHTS: (dollars in thousands) Twelve months ended December 31, 2006 and 2005 2006 2005 Net interest income $27,588 $26,937 Provision for credit losses 875 650 Noninterest income 5,705 5,319 Noninterest expense 22,812 22,497 Income before taxes 9,606 9,109 Income tax provision 2,632 2,297 Net income 6,974 6,812 Net income available to common shareholders 6,674 6,512 Earnings per share: Basic $0.91 $0.86 Diluted $0.84 $0.79 Return on shareholders' equity 10.43% 10.26% Return on assets 0.87% 0.92% Weighted average common shares outstanding: Basic 7,307,519 7,587,117 Diluted 8,279,900 8,579,080 FINANCIAL HIGHLIGHTS: (dollars in thousands) Three months ended December 31, 2006 and 2005 2006 2005 Net interest income $6,532 $6,717 Provision for credit losses 200 250 Noninterest income 1,284 1,385 Noninterest expense 5,249 6,196 Income before taxes 2,367 1,656 Income tax provision 641 29 Net income 1,726 1,627 Net income available to common shareholders 1,651 1,552 Earnings per share: Basic $0.23 $0.21 Diluted $0.21 $0.19 Return on shareholders' equity - annualized 10.04% 9.60% Return on assets - annualized 0.84% 0.84% Weighted average common shares outstanding: Basic 7,255,700 7,542,665 Diluted 8,209,958 8,510,520 at December 31, 2006 and 2005 Total assets $811,690 $841,954 Total loans 636,499 610,919 Total investments 123,291 178,655 Total deposits 581,812 561,507 Shareholders' equity 67,971 65,655 Book value per common share $8.38 $7.95 DATASOURCE: Wainwright Bank & Trust Company CONTACT: James J. Barrett, Senior VP and Chief Financial Officer of Wainwright Bank & Trust Company, +1-617-478-4000, or Fax, +1-617-439-4854 Web site: http://www.wainwrightbank.com/

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