West Bend-based Westbury Bancorp Inc. reported lower profits in the second quarter, driven by costs associated with opening a new loan office and interest expense.
Second quarter net income was $746,000, or 21 cents per share, down from $873,000, or 23 cents per share, in the second quarter of 2016.
Net interest income was $5.3 million in the quarter, up from $5.1 million in the second quarter of 2016. Non-interest income totaled $1.4 million, down from $1.5 million in the year-ago quarter.
Compensation and other employee benefits costs increased to $2.8 million, up from $2.5 million in the second quarter of 2016. Occupancy and furniture and equipment costs rose to $623,000, compared with $443,000 in the year-ago quarter. The company attributed these increases to a new loan production office having opened in Madison and upgrades to its information technology and compliance capabilities.
Interest expense also increased, to $795,000 from $641,000 in the year-ago quarter, which the company attributed to deposit growth and use of long-term FHLB advances.
Westbury’s net loan portfolio grew by 6.2 percent year-over-year, driven by commercial real estate, commercial business and construction and land development loans. The company’s deposits increased by 9.8 percent on an annualized basis.
"Our earnings for the quarter were stable compared to the first quarter, as our loan production office in the Madison market had its first full quarter of operations,” said Greg Remus, president and chief executive officer. “Our Madison team has added $16 million in high quality commercial business and real estate loans to our portfolio so far and their pipeline is strong. We believe we will see additional growth and related revenue from this new business, which will enhance our earnings in the quarters ahead. Our goal is to continue to build and maintain a high quality loan portfolio balanced between single family, multifamily, non-owner occupied commercial real estate, and owner-occupied commercial real estate and commercial business loans. Toward that goal, owner-occupied commercial real estate and commercial business loans have increased to 21 percent of our loan portfolio as of March 31, 2017, from 19 percent as of Sept. 30, 2016."
Westbury Bancorp operates eight branches and two loan production offices in Wisconsin. The company had $755.5 million in total assets as of March 31, up from $655.1 million in the same period a year ago.