Newport Bancorp, Inc. Reports Results For Third Quarter And First Nine Months Of 2010
The $8.2 million, or 3.2%, increase in deposits was primarily focused in money market accounts (an increase of $5.8 million, or 12.4%), NOW/Demand accounts (an increase of $3.5 million, or 3.2%) and savings accounts (an increase of $2.6 million, or 9.8%), offset by a decrease in time deposit accounts (a decrease of $3.7 million, or 4.6%). The customer’s hesitancy to place funds into longer term maturity deposits is the primary reason for the decrease in the time deposit category.
Total stockholders’ equity at September 30, 2010 was $48.9 million compared to $51.4 million at December 31, 2009. The decrease was primarily attributable to stock buybacks under the Company’s stock repurchase plan, partially offset by net income and stock-based compensation credits.
Net interest income increased to $3.8 million for the quarter ended September 30, 2010 from $3.4 million for the quarter ended September 30, 2009, an increase of 11.7%. Net interest income for the nine months ended September 30, 2010 was $11.3 million, compared to $9.8 million for the nine months ended September 30, 2009, an increase of 14.3%. The increase in net interest income was primarily due to a decrease in expense from deposits and borrowings, partially offset by a decrease in the interest earned on loans and securities.
As a result of the low interest rate environment, the average cost of interest-bearing liabilities decreased to 1.99% for the quarter ended September 30, 2010 from 2.55% for the quarter ended September 30, 2009. The average balance of interest-bearing deposits decreased in the third quarter of 2010 from the third quarter of 2009 by $570,000, or 0.25%, and the average cost of interest-bearing deposits decreased by 75 basis points, resulting in a $433,000 decrease in interest expense on such deposits. The average balance of interest earning assets decreased by $14.9 million in the third quarter of 2010, compared to the third quarter of 2009, but the average yield on interest-earning assets increased to 5.62% in the third quarter of 2010, compared to 5.53% for the same period in 2009. The Company’s third quarter 2010 interest rate spread increased to 3.63% from 2.98% in the third quarter of 2009, an increase of 65 basis points.
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