Wellesley Bancorp posted double-digit gains in net income in the third quarter, as increases in residential mortgage loans lifted its bottom line.
The holding company for Wellesley Bank recorded net income totaling $700,000 and $1.7 million for the three and nine months ended Sept. 30, respectively. That represented year-over-year increases of 35.7 percent and 30.1 percent.
“We are very pleased with the progress we have made to grow the company and to achieve substantial earnings improvements over prior year results,” President and CEO Thomas J. Fontaine said in a statement. “We believe the investments we have made in our retail network, technology and staffing at all levels will continue to support the growth path we have set for ourselves while producing improving returns for our shareholders.”
Total assets increased $54.4 million, or 10.2 percent, to $589.5 million from year-end 2014. That was driven largely by a $58.8 million increase in net loans that were supported primarily by a $30.5 million increase in deposits.
Net loans totaled $502.2 million at Sept. 30, up 13.3 percent, or $58.8 million, from year-end 2014. Residential mortgage loans increased $31 million to $264.2 million over that period, primarily due to growth in the bank’s adjustable-rate mortgage portfolio. Commercial and construction loans increased $24.6 million to $211.1 million.
Net interest income increased 13.5 percent year-over-year to $4.7 million – again, the result of an increased in the balance of the bank’s loan portfolio – though it was offset partially by higher interest expense as the average balance of deposits also increased.
The company decreased its provision for loan losses by $30,000 to $150,000 in the third quarter as impaired and nonperforming loans declined. Nonperforming loans stood at 0.79 percent of total loans at the end of the third quarter, compared with 1.21 percent in the year-ago quarter.
Year-over-year noninterest income increased $46,000, or 18.9 percent, to $290,000. Wealth management fees increased $13,000 over that period, while gains on sales of securities increased $26,000.
Noninterest expenses increased 10.5 percent, or $351,000, year-over-year to $3.7 million in the third quarter. The company attributed that increase to staffing additions late last year in its wealth management subsidiary, relocation expenses for its wealth management office, rising employee benefit costs and higher deposit insurance premiums.
