Wellesley Bancorp, Inc. (Nasdaq Capital Market: WEBK) (the “Company”), the holding company for Wellesley Bank (the “Bank”) reported net income of $434,000 for the quarter ended June 30, 2012, compared to net income of $466,000 for the same period in 2011. Earnings per share for the three months ended June 30, 2011 were $0.20, basic and fully diluted. The Bank completed its mutual-to-stock conversion (the “conversion”) and the Company’s public offering on January 25, 2011. Accordingly, the 2011 results reflect the Bank on a consolidated basis and do not include the Company which was not an operating company during 2011. In addition, earnings per share information is not presented for periods where the shares were not outstanding for the entire period. For the six months ended June 30, 2012, the Company reported a net loss of $119,000, compared to net income of $958,000 for the same period in 2011. The 2012 results reflect a one-time $1.8 million pre-tax contribution ($1.1 million after-tax) to the Wellesley Bank Charitable Foundation formed in connection with the conversion.
With respect to the three month period ended June 30, 2012, net income decreased $32,000 to $434,000, compared to the three month period ended June 30, 2011. The provision for loan losses declined to $100,000 in the three month period ended June 30, 2012 compared to $300,000 for the comparable 2011 period, as certain impaired loans were brought to favorable resolution during the 2012 quarter leading to a reduction in related specific reserves. Net interest income increased 11.9% to $2.8 million for the three month period ended June 30, 2012 from $2.5 million in the comparable 2011 period. The increase was largely due to higher levels of interest income from growth in our loan portfolio, and a reduction in interest expense as we reduced our balances of higher cost Federal Home Loan Bank (FHLB) advances, and replaced them with lower costing long-term advances. Deposit costs also declined due to the generally lower interest rate environment. The net interest margin was 3.74% for the 2012 three month period, compared to 3.96% for the 2011 period as funding costs declined more slowly than earning asset yields in the period.