January 17, 2018

Wake Forest Bancshares, Inc. Announces First Quarter Results

WAKE FOREST, N.C., Jan. 20, 2011 /PRNewswire/ — 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 $146,858 or $0.13 per share for the quarter ended December 31, 2010, compared to earnings of $53,645 or $0.05 per share for the same quarter a year earlier.  

In announcing the earnings, Robert C. White, President and Chief Executive Officer, stated that while the current quarter’s results continue to be impacted by compressed interest rate margins, the Company showed improvement in its level of non-performing assets and associated loan loss provisions, charge-offs, and lesser costs related to foreclosed properties. A significant portion of the Company’s loans and investments have either shorter maturities or variable rates and therefore the portfolios tend to move in tandem with the prime rate.  The Federal Reserve has kept interest rates at historic lows since December of 2008 and the Company’s interest rate sensitive loan and investment portfolios have adjusted to those rate movements to a greater extent than has the Company’s deposit base.  The Company’s net interest spread was 1.88% at December 31, 2010 compared to 2.12% at December 31, 2009.

The depressed economic environment and tenuous housing market have lingered throughout the past three years and continue to weigh heavily on the Company’s operations.  Real estate lending, including construction lending, are at levels significantly below what is considered normal for the Company’s markets.  As a high growth area, relocation sales have historically represented a sizable portion of our local real estate market but have suffered recently because of limited job opportunities as well as newcomers being unable to sell their existing homes.  The broader local real estate market has also declined as inventories of new homes have increased and the economy has created uncertainty, causing buyers to forego home purchases in the interim.

Earnings for the current quarter were positively impacted by lower loss provisions, charge-offs and expenses associated with foreclosed loans. The Company provided $70,000 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 compared to $125,000 during the same quarter a year earlier. The Company charged off $30,000 and $102,332 in loans during the quarters ended December 31, 2010 and 2009, respectively.  In addition, the Company incurred $30,009 and $110,079 in foreclosure related expense and loss from holding and disposing of foreclosed properties during the quarters ended December 31, 2010 and 2009, respectively.  The Company’s loan loss allowances amounted to approximately 1.95% of total loans outstanding at December 31, 2010. 

Total assets of the Company amounted to $113.5 million at December 31, 2010.  Total loans receivable and deposits outstanding at December 31, 2010 amounted to $67.5 million and $91.8 million, respectively.  Wake Forest Bancshares Inc.’s capital to assets ratio was 18.30% at December 31, 2010.   

Wake Forest Bancshares, Inc. has 1,155,210 shares of common stock outstanding.  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.