NEWPORT – Newport Bancorp Inc. (Nasdaq: NFSB), the holding company for Newport Federal Savings Bank, reported a net loss of $848,000 or 21 cents per diluted share for the year ended Dec. 31, compared with 2007 earnings of $757,000 or 17 cents per share.
Total assets increased by $71.08 million, or 19.67 percent, to $432.33 million at year’s end, slowing from 2007’s 24.4-percent rise, the company said in its Friday after-market report. (READ MORE) The growth was led by increases in net loans, which grew by $39.94 million or 13.63 percent; and securities held to maturity, which grew $21.27 million or 68.89 percent.
Helping fuel that growth were an increase in borrowings, which grew by $39.08 million, or 37.09 percent, of which about $15 million was used to purchase securities; and an increase in deposits, which grew $35.83 million, or 18.54 percent, to $229.12 million.
The bank’s loan portfolio grew to $335.95 million at year’s end – from $295.48 million at the end of 2007 – led by commercial real estate mortgages, which grew $16.7 million, or 21.7 percent; residential mortgages, up $22.5 million, or 12.6 percent; and construction loans, up $1.8 million, or 18.9 percent, compared with the end of 2007.
Deposit growth last year was concentrated in NOW / Demand accounts, which grew $31.5 million, or 53.2 percent; and money-market accounts, up $10.8 million, or 37.5 percent, the bank said. Those gains were partly offset by declines in total deposits in time-deposit accounts, down $6.1 million, or 7.7 percent; and savings accounts, down $372,000, or 1.4 percent, compared with the end of 2007.
NewportFed’s non-interest income shrank 32.04 percent to $1.57 million as a slight increase in fees on bank-owned life insurance was more than offset by declines in other fees and a $706,000 impairment charge on available-for-sale securities.
Net interest income after loan-loss provisions grew 16.42 percent to $11.49 million. Interest and dividend income grew 20.32 percent to $21.64 million, but the bank increased its provision against loan losses by 33.33 percent to $568,000, although non-performing assets declined to none at year’s end from 0.25 percent a year earlier.
The bank’s interest-rate spread increased to 2.77 percent, from 2.69 percent in 2007, as the yield on interest-bearing assets outpaced fell 25 basis points (0.25 percentage points) to 5.96 percent but the cost of its interest-bearing liabilities shrank 33 basis points to 3.19 percent.
NewportFed emphasized that, despite its full-year loss, the bank continues to be “well-capitalized,” based on Federal Deposit Insurance Corporation (FDIC) standards. As of Dec. 31, it posted a total capital-to-asset ratio “in excess of 12 percent.”
For the three months ended Dec. 31, NewportFed posted a net loss of $609,000, or 15 cents per diluted share. That was nearly 13 times its year ago net loss of $47,000, or 1 cent per share.
The fourth-quarter loss “was a result of the other-than-temporary impairment charge of $226,000 for the bank’s holding in the AMF Ultra Short Mortgage Fund; a $250,000 increase in the valuation reserve against deferred tax assets; and a $300,000 write-down of the net deferred state tax asset, in conjunction with the formation of a passive investment company subsidiary,” the bank said.
Newport Bancorp Inc. (Nasdaq: NFSB) is the holding company for Newport Federal Savings Bank – a $432.33 million institution, created by the 2005 merger of Newport Fed and Westerly Savings Bank, that converted from a mutual bank to a shareholder-owned institution in mid-2006. Newport Fed has five branches, all in Rhode Island. Additional information is available at www.NewportFederal.com.
