UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 27, 2017
WELLESLEY BANCORP, INC.
(Exact Name of Registrant as Specified in Its Charter)
|
Maryland |
001-35352 |
45-3219901 | ||
| (State or other jurisdiction o f incorporation or organization) |
(Commission File Number) |
(IRS Employer Identification No.) |
40 Central Street, Wellesley, Massachusetts 02482
(Address of principal executive offices) (Zip Code)
(781) 235-2550
(Registrant’s telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).
Emerging growth company ¨
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
| Item 2.02 | Results of Operations and Financial Condition. |
On April 27, 2017, Wellesley Bancorp, Inc. (the “Company”), the stock holding company for Wellesley Bank, issued a press release announcing its financial results for the three months ended March 31, 2017. A copy of the press release dated April 27, 2017 is attached to this Report as Exhibit 99.1 and is furnished herewith.
The information contained in this Item 2.02 and in Exhibit 99.1 shall not be deemed “filed” for purposes of Section 18 of the “Exchange Act,” or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
| Item 9.01 | Financial Statements and Exhibits. |
| (d) | Exhibits |
| Number | Description |
| 99.1 | Press Release dated April 27, 2017 |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized.
| WELLESLEY BANCORP, INC. | |||
| Date: April 27, 2017 | By: | /s/ Thomas J. Fontaine | |
| Thomas J. Fontaine | |||
| President and Chief Executive Officer | |||
Wellesley Bancorp Reports Record Earnings for the Quarter Ended March 31, 2017
WELLESLEY, Mass., April 27, 2017 /PRNewswire/ -- Wellesley Bancorp, Inc. (Nasdaq Capital Market: WEBK) (the "Company"), the holding company for Wellesley Bank (the "Bank"), reported net income of $881 thousand for the quarter ended March 31, 2017 compared to net income of $732 thousand for the same period in 2016. The results for the quarter represent an increase of 20.4%, as compared to prior year first quarter results. Diluted earnings per share were $0.36 and $0.31 for the quarters ended March 31, 2017 and 2016, respectively. Total assets were $704.3 million at March 31, 2017, an increase of $9.0 million, or 1.3%, from December 31, 2016 as gross loans increased $11.0 million, funded largely by an increase in FHLB borrowings of $4.9 million and an increase in deposits of $3.3 million.
Thomas J. Fontaine, President and Chief Executive Officer, said, "We are pleased with our first quarter results. Continued growth in the balance sheet and net interest income, supplemented by strong fee income and loan performance, gave a boost to earnings and returns for the quarter."
First Quarter Earnings
Net income increased $149 thousand, or 20.4%, for the quarter ended March 31, 2017 compared to the quarter ended March 31, 2016, as net interest income and noninterest income increased, partially offset by an increase in noninterest expenses.
Net interest income increased $408 thousand, or 8.5%, to $5.2 million for the quarter ended March 31, 2017, as compared to the quarter ended March 31, 2016. This increase was primarily due to increased interest income as the average balance of our loan portfolio increased, partially offset by higher interest expense as the average balance of deposits and borrowings also increased. The yield on earning assets for the quarter ended March 31, 2017 was 3.91%, a decrease of nine basis points from the quarter ended March 31, 2016. Deposit and borrowing costs were 0.95% for the quarter ended March 31, 2017 compared to 0.97% for the quarter ended March 31, 2016 as both core deposits and FHLB advances were used to fund loan growth. The net interest margin was 3.14% for the 2017 quarter, compared to 3.20% for the 2016 quarter. No provision for loan losses was recorded for the quarter ended March 31, 2017, a decrease of $62 thousand over the prior year period, reflecting the decline in impaired and non-performing loans in recent quarters and a slight change to the mix of our loan portfolio.
Noninterest income totaled $521 thousand for the quarter ended March 31, 2017, an increase of $176 thousand, or 51.0%, compared to the same prior year period. Wealth management fees increased $84 thousand compared to the quarter ended March 31, 2016, primarily due to an increase in assets under management. Additionally, there was an $80 thousand increase in commercial loan fees, which are included in miscellaneous income.
Total noninterest expenses increased $387 thousand to $4.3 million for the quarter ended March 31, 2017, as compared to the same prior year period. Salaries and benefits costs increased $307 thousand from the prior year period as we recognized a full quarter of expenses related to our Newton Centre office which opened in the spring of 2016 along with several strategic hires in late 2016. Other staffing levels and other operating costs were relatively consistent on a comparative basis as we maintain focus on improving efficiencies within our organization.
Balance Sheet Growth
Total assets were $704.3 million at March 31, 2017, representing an increase of $9.0 million compared to $695.3 million at December 31, 2016. The increase was primarily related to growth in the loan portfolio and an increase in the level of securities available for sale, partially offset by a decrease in the level of cash and cash equivalents. On the liability side, long-term borrowings and deposits increased, while short-term borrowings decreased.
Net loans totaled $587.2 million at March 31, 2017, an increase of $11.0 million, as compared to December 31, 2016. Residential mortgage loans increased $13.7 million to $281.7 million at March 31, 2017, due to growth in both our adjustable- and fixed-rate mortgage portfolios. Construction loans decreased $743 thousand to $109.6 million at March 31, 2017, compared to $110.4 million at December 31, 2016, primarily due to the completion and payoff of several speculative construction projects during the quarter. Our portfolios of commercial real estate and commercial and industrial loans decreased $1.3 million and $692 thousand, respectively, due to seasonal fluctuations. Securities available for sale increased $2.3 million as excess liquidity was invested.
Deposits increased $3.3 million to $526.1 million at March 31, 2017. The increase was primarily attributable to an increase of $3.2 million in money market accounts and $2.8 million in savings accounts, while demand deposit accounts decreased $2.9 million. Balances in certificates of deposit remained relatively stable during the quarter. We continue to emphasize commercial deposit account origination in our business development efforts. Long-term FHLB advances increased $13.9 million to $96.9 million, while short-term borrowings, consisting entirely of advances from the FHLB, decreased by $9.0 million to $12.3 million at March 31, 2017. The net increase in borrowings was primarily used to fund loan portfolio growth.
Stockholders' equity increased $1.2 million to $56.4 million, primarily due to earnings and the impact of stock compensation plans during the quarter. At March 31, 2017, the Company's ratio of stockholders' equity to total assets was 8.01%, compared to 7.94% at December 31, 2016.
About Wellesley Bancorp
Wellesley Bank and its wholly-owned wealth management company, Wellesley Investment Partners, LLC, are subsidiaries of Wellesley Bancorp, Inc.
Wellesley Bank provides comprehensive premier banking and wealth management services to successful individuals, families, businesses and nonprofit organizations. The Company's teams of highly experienced and knowledgeable bankers provide exceptional personalized services to its clients. Wellesley Bank has been serving the greater Boston area for over 100 years. With the newest location in Newton Centre, the Bank has six banking offices and a wholly-owned wealth management company.
Forward Looking Statements
This press release contains certain forward-looking statements about the Company and the Bank. Forward-looking statements include statements regarding anticipated future events and can be identified by the fact that they do not relate strictly to historical or current facts. They often include words such as "believe," "expect," "anticipate," "estimate," and "intend" or future or conditional verbs such as "will," "would," "should," "could," or "may." Forward-looking statements, by their nature, are subject to risks and uncertainties. Certain factors that could cause actual results to differ materially from expected results include increased competitive pressures, changes in the interest rate environment, general economic conditions or conditions within the securities markets, and legislative
and regulatory changes that could adversely affect the business in which the Company and the Bank are engaged.
The Company's summary income statements and other data follow:
Wellesley Bancorp, Inc. and Subsidiary | |||
Consolidated Statements of Net Income | |||
(Dollars in thousands, except per share data) | |||
(Unaudited) | |||
|
| |||
|
|
Three Months Ended March 31, | ||
|
| 2017 |
| 2016 |
Interest and dividend income: |
|
|
|
Interest and fees on loans | $ 5,977 |
| $ 5,557 |
Other interest and dividend income | 508 |
| 452 |
Total interest and dividend income | 6,485 |
| 6,009 |
Interest expense | 1,269 |
| 1,201 |
|
|
|
|
|
Net interest income | 5,216 |
| 4,808 |
Provision for loan losses | -- |
| 62 |
|
|
|
|
|
Net interest income, after provision for loan losses | 5,216 |
| 4,746 |
|
|
|
|
|
Total noninterest income | 521 |
| 345 |
|
|
|
|
|
Noninterest expenses: |
|
|
|
Salaries and employee benefits | 2,609 |
| 2,302 |
Occupancy and equipment | 696 |
| 663 |
Data processing | 201 |
| 196 |
Professional fees | 173 |
| 191 |
Other general and administrative | 614 |
| 554 |
Total noninterest expenses | 4,293 |
| 3,906 |
|
|
|
|
|
Income before income taxes | 1,444 |
| 1,185 |
Provision for income taxes | 563 |
| 453 |
|
|
|
|
|
Net income | $ 881 |
| $ 732 |
|
|
|
|
|
Other Data: |
|
|
|
Return on average assets (1) | 0.52% |
| 0.47% |
Return on average equity (1) | 6.35% |
| 5.54% |
Net interest margin (1) | 3.14% |
| 3.20% |
Earnings per common share: |
|
|
|
Basic | $0.37 |
| $0.32 |
Diluted | $0.36 |
| $0.31 |
Weighted average shares outstanding: |
|
|
|
Basic | 2,358,074 |
| 2,318,937 |
Diluted | 2,441,993 |
| 2,339,800 |
Stockholders' equity to total assets at end of period | 8.01% |
| 8.62% |
Book value per common share at end of period | $22.69 |
| $21.76 |
Nonperforming loans to total loans at end of period | 0.10% |
| 0.19% |
|
|
|
|
|
(1) Annualized for the three month periods | |||
The Company's summary balance sheets follow:
Wellesley Bancorp, Inc. and Subsidiary | |||
Consolidated Balance Sheets | |||
(In thousands) | |||
(Unaudited) | |||
|
|
|
|
|
|
| March 31, 2017 |
| December 31, 2016 |
Assets |
|
|
|
Cash and cash equivalents | $ 26,337 |
| $ 28,525 |
Securities available for sale, at fair value | 66,943 |
| 64,648 |
Federal Home Loan Bank of Boston stock, at cost | 5,937 |
| 5,758 |
Loans held for sale | -- |
| 1,454 |
|
|
|
|
|
Loans | 592,586 |
| 581,563 |
Less allowance for loan losses | (5,421) |
| (5,432) |
Loans, net | 587,165 |
| 576,131 |
|
|
|
|
|
Bank-owned life insurance | 7,360 |
| 7,303 |
Premises and equipment, net | 3,788 |
| 3,876 |
Other assets | 6,737 |
| 7,588 |
|
|
|
|
|
Total assets | $704,267 |
| $695,283 |
|
|
|
|
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Liabilities and Stockholders' Equity |
|
|
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Deposits: |
|
|
|
Noninterest-bearing | $ 91,957 |
| $ 94,946 |
Interest-bearing | 434,109 |
| 427,864 |
|
| 526,066 |
| 522,810 |
|
|
|
|
|
Short-term borrowings | 12,250 |
| 21,250 |
Long-term debt | 96,934 |
| 83,020 |
Subordinated debt | 9,778 |
| 9,769 |
Accrued expenses and other liabilities | 2,853 |
| 3,220 |
Total liabilities | 647,881 |
| 640,069 |
|
|
|
|
|
Stockholders' equity | 56,386 |
| 55,214 |
|
|
|
|
|
Total liabilities and stockholders' equity | $704,267 |
| $695,283 |
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CONTACT: Wellesley Bancorp, Inc., Thomas J. Fontaine, President and Chief Executive Officer, 781-235-2550