Wake Forest Bancshares, Inc. Announces Year End Results

Rhea-AI Summary

Wake Forest Bancshares, Inc. (OTC: WAKE) reported fiscal year earnings of $1,395,000 ($1.30 per share) for the year ended September 30, 2022, an increase from $1,235,550 ($1.13 per share) in the previous year. The fourth quarter earnings reached $397,400 ($0.37 per share), up from $325,400 ($0.30 per share) a year prior. The company's interest rate margin improved to 3.27% from 3.06% year-over-year. Additionally, a special cash dividend of $1.00 per share was paid, celebrating its 100th anniversary. Total assets stood at $114,248,550 as of September 30, 2022.

Positive

• Earnings increased to $1,395,000 from $1,235,550 year-over-year.
• Fourth quarter earnings rose to $397,400 from $325,400 year-over-year.
• Interest rate margin improved to 3.27% compared to 3.06% in prior year.
• Paid a special cash dividend of $1.00 per share, marking its 100th anniversary.
• Strong credit quality with no foreclosures or loan charge-offs.

Negative

• Loan portfolio showed a marginal drop due to refinancing elsewhere.
• Higher mortgage rates could price buyers out of the market.

WAKE FOREST, N.C., Dec. 12, 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 $1,395,000 or $1.30 per share for its fiscal year ended September 30, 2022. The Company’s earnings for the prior fiscal year were $1,235,550 or $1.13 per share. Earnings for the current quarter were reported at $397,400 or $0.37 per share versus $325,400 or $0.30 per share for the quarter ended September 30, 2021.

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 solid local economic conditions, our resilient and robust real estate markets, and Federal Reserve rate policies that have widened our spreads. Federal Reserve policy actions to combat inflation in the past six months have increased short term interest rates by 3.00% with projections of further rate increases for the remainder of calendar year 2022.   Because the Company’s balance sheet is intentionally shorter term and rate sensitive in order to avoid prolonged interest rate risk, moderately higher rates positively impact our short term results and such rate increases have had a marginal effect on our earnings to date. The Company’s overall interest rate margin was 3.27% for the current year, versus 3.06% for its fiscal year in 2021. For the most recent fourth quarter, the Company’s interest rate margin was 3.67% vs 3.01% for same quarter a year earlier.

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 exhibited a marginal drop from levels outstanding a year ago primarily due to refinances elsewhere earlier in the year when market rates were much lower. 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 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 year. As a result, no additional loan loss provisions during the current year were considered necessary because of the healthy level of our existing loss allowances. The Company’s loan loss allowance amounted to approximately 2.12% of total loans outstanding at September 30, 2022. However, as the Federal Reserve continues to push short term rates higher, we intend to closely monitor our loan portfolios that adjust with market rates for any signs of credit concerns.

During the year, Wake Forest Bancshares paid a special cash dividend of $1.00 per share to its shareholders. Although the Company has now paid quarterly cash dividends consecutively to its shareholders for the past twenty six years its Board chose to pay this special dividend in celebration of its 100^th year as an independent community bank.

Total assets of the Company amounted to $114,248,550 at September 30, 2022. Total loans receivable and deposits outstanding at September 30, 2022 amounted to $67,734,300 and $86,667,050, respectively. Wake Forest Bancshares Inc.’s tier 1 capital leverage ratio was 23.18% at September 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

FAQ

What were the earnings for Wake Forest Bancshares in 2022?

Wake Forest Bancshares reported earnings of $1,395,000 or $1.30 per share for the fiscal year ended September 30, 2022.

How much did Wake Forest Bancshares pay in dividends?

The company paid a special cash dividend of $1.00 per share during the year.

What was the interest rate margin for Wake Forest Bancshares?

The interest rate margin for Wake Forest Bancshares was 3.27% for the fiscal year ended September 30, 2022.

What are the total assets of Wake Forest Bancshares?

Total assets amounted to $114,248,550 at September 30, 2022.

What challenges could Wake Forest Bancshares face due to rising mortgage rates?

Higher mortgage rates may price certain buyers out of the market, potentially affecting loan demand.