In a quarter that closed with its parent company announcing that it had sold itself, Envision Bank experienced a net loss in the first quarter.
Envision Bank had a first-quarter net loss of $235,000, or $0.05 per basic share and diluted share, compared to net income of $4.1 million, or $0.81 per basic share and $0.78 per diluted share, in the first quarter of 2021. Net income in the fourth quarter was $786,000, or $0.17 per basic share and $0.16 per diluted share.
The bank’s parent company, Randolph Bancorp, announced on March 28 that it would be acquired by Easthampton-based Hometown Financial Group. The deal will see Envision Bank merge into Abington Bank, one of three Massachusetts banks held by Hometown Financial Group.
Envision Bank’s first-quarter financial results included $588,000 in merger expenses. The bank also had $240,000 in severance expenses.
The mortgage lending business also affected Envision Bank’s first-quarter results, President and CEO William Parent said in the bank’s first-quarter earnings statement.
“In the first quarter, we saw many challenges in the mortgage banking environment, as the extent and pace of interest rate increases, and the slower winter season negatively impacted residential lending production and mortgage banking profitability,” Parent said.
The bank had total assets of $770.3 million at the end of the first quarter, down 4.1 percent from $803.3 million on Dec. 31 and up from $738.2 million on March 31, 2021.
Net loans grew year-over-year in the first quarter from $492 million last year to $579.6 million on March 31. The bank attributed part of that growth to a $52.3 million, or 35.6 percent, increase in commercial real estate loans as part of a focus on diversifying the bank’s loan mix. The bank also saw net loans increase from Dec. 31, including a $35.4 million increase in 1- to 4-family residential loans.
First-quarter noninterest income decreased by $10.2 million, or 82.4 percent, to $2.2 million compared to $12.4 million in the same quarter last year. The bank said in the earnings statement that the decrease was primarily due to a $9.7 million decrease in the net gain on loan origination and sale activities.
The bank’s sold mortgage loans totaled $129.9 million in the first quarter compared to $503.3 million in the first quarter of 2021 and $297.3 million in the fourth quarter. The bank ended the first quarter with a mortgage pipeline of $42.7 million, compared to a $239.5 million pipeline in the same quarter last year and a fourth-quarter pipeline of $85.9 million.
Parent had said in the bank’s fourth-quarter earnings statement that the bank would reduce its mortgage-related workforce in the first quarter. The staff reduction in part resulted in a first-quarter decrease of $515,000, or 5.6 percent, in noninterest expenses, which had totaled $9.2 million in the fourth quarter. Salaries and employee benefits expenses were reduced by $930,000, or 15.3 percent, due to the staff reduction as well as lower commissions and incentives associated with lower residential loan production.
The bank expects to complete the merger with Hometown Financial Group in the fourth quarter.
“We are excited by the recently announced merger with Hometown Financial Group, Inc. and look forward to the anticipated closing of that transaction in the fourth quarter of 2022,” Parent said in the statement. “I want to thank all of our employees who continue to contribute to the ongoing improvement of our company and their commitment to our customers.”
