WAKE FOREST, N.C., April 18, 2023 (GLOBE NEWSWIRE) -- Wake Forest Bancshares, Inc., (OTC: WAKE) parent company of Wake Forest Federal, announced today that the Company reported earnings of $486,910 or $0.45 per share for its quarter ended March 31, 2023. The Company reported earnings of $295,562 or $0.28 per share for the same quarter a year earlier. Earnings for the first six months of the Company’s fiscal year were reported at $963,231 or $0.90 per share versus $632,626 or $0.59 per share for the same six-month period a year earlier.

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 stable local economic conditions, our resilient real estate markets, and Federal Reserve rate policies that have widened our spreads. Federal Reserve policy actions to combat inflation over the past year have increased short term interest rates by 4.75% with the potential for further rate increases in the future.   Because the Company’s balance sheet is intentionally shorter term and rate sensitive in order to avoid prolonged interest rate risk, higher rates positively impact our short-term results and such rate increases have had a significant effect on our earnings for the past two quarters. For the most recent quarter, the Company’s interest rate margin was 4.07% vs 3.01% for the same quarter a year earlier.

While our area’s economic conditions, unemployment rates, and residential home sales continue to remain healthy despite current inflationary concerns, higher mortgage rates and home prices have priced certain buyers out of the market.   These factors could impact the health of certain segments of our real estate market. However, our lending environment and labor force 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 increased from levels outstanding both in the first quarter and from a year ago. 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 when market rates were still relatively low in order to avoid excessive interest rate risk. While mortgage rates have now risen to more historically typical levels, demand for longer fixed rate residential financing at these new rates has decreased, driven somewhat by a lack of new refinancings. As always, an equilibrium between affordability and pricing will ultimately determine demand. In addition, the credit quality of our loan portfolio has continued to be excellent. The Company was delighted that it had no reported problem assets and no foreclosures or loan charge-offs occurred during the current quarter. As a result, no additional loan loss provisions during the current quarter were considered necessary because of the lack of credit concerns and the healthy level of our existing loss allowances. The Company’s loan loss allowance amounted to approximately 2.05% of total loans outstanding at March 31, 2023. However, as the Federal Reserve continues to push short term rates higher, we will closely monitor our loan portfolios that adjust with market rates for any signs of credit concerns.

During the quarter, the Board declared a cash dividend of $0.11 per share to its shareholders. The Company has now paid quarterly cash dividends consecutively to its shareholders for the past twenty six years.

Total assets of the Company amounted to $117,856,929 at March 31, 2023. Total loans receivable and deposits outstanding at March 31, 2023 amounted to $69,954,293 and $89,359,248, respectively. Wake Forest Bancshares Inc.’s tier 1 capital leverage ratio was 23.10% at March 31, 2023. 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