NEWPORT – Newport Bancorp Inc., the holding company for Newport Federal Savings Company, posted a first-quarter loss of $7,000, or less than 1 cent a share, compared with a profit of $74,000, or 2 cents a share, in the same period a year ago, the company announced on Friday evening.
During the first three months of the year, Newport Bancorp (Nasdaq: NFSB) said its total revenue increased by 6.5 percent to $6.15 million, compared with $5.78 million in the same period a year ago. Total interest and dividend income rose 9.5 percent to $5.72 million from $5.22 million a year ago.
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The bank said the growth in interest income was primarily due to increased interest earned on loans and securities and an increase in average interest-earning assets, offset by a decrease in the yield on assets and higher borrowing expenses. Newport Fed’s quarterly net interest margin rose 9 basis points compared with a year ago to 2.76 percent.
Non-interest income fell 22.2 percent year over year to $435,000, “primarily due to the $76,000 impairment charge for the Bank’s holding in the AMF Ultra Short Mortgage Fund and a $41,000 decrease in fees earned on checking accounts,” the bank said.
Total assets showed an increase of 2.1 percent as of March 31 to $441.4 million, from $432.3 million at the end of 2008, and up by 13 percent from the same period a year earlier. The primary sources for the growth in assets were increases of 2.7 percent, or $9 million, in net loans, and 21.5 percent, or $1.4 million, in cash and due from banks, the bank said. But those were offset by a $3.5 million decrease in short-term investments and securities.
In the quarter, NewportFed’s construction loans rose 10.2 percent, or $1.1 million; commercial real estate mortgages increased 2.7 percent, or $5.4 million; and residential real estate mortgages grew 1.8 percent, or $2.6 million.
The bank said the growth in assets was funded by a $14.5 million increase in deposit balances, offset by a $2.6 million decrease in Federal Home Loan Bank borrowings.
Deposits as of March 31 totaled $243.64 million. Deposit growth in the first quarter was concentrated in money market accounts – which increased 11.4 percent, or $4.5 million – and time deposit accounts, which increased 9.1 percent, or $6.7 million, compared with a year earlier.
Total deposits in NOW/Demand accounts grew 3.8 percent, or $3.5 million. But total deposits in savings account decreased slightly, 0.5 percent, or $117,000.
NewportFed said it had no non-performing assets as of March 31 or Dec. 31. The bank’s provision for loan losses was $186,000, up from $111,000 at the end of the first quarter last year.
“The [loan-loss] provision increased during the first quarter of 2009, when compared to the first quarter of 2008, due to the growth and changes in the composition of the loan portfolio and changes in economic conditions,” the bank said, adding: “Asset quality continues to remain strong.”
NewportFed lost $848,000, or 21 cents a share, in 2008, after earning a profit of $757,000 in 2007.
Newport Bancorp Inc. (Nasdaq: NFSB) is the holding company for Newport Federal Savings Bank. A $290 million institution created by the 2005 merger of NewportFed and Westerly Savings bank, it converted from a mutual bank to a shareholder institution in mid-2006. Additional information is available at www.newportfederal.com.
