(Source: PRNewswire-FirstCall)
MIDDLEBORO, Mass., May 29 /PRNewswire-FirstCall/ -- Mayflower Bancorp, Inc. (the "Company") the bank holding company for Mayflower Co-operative Bank (the "Bank") today reported net income of $305,000 or $0.15 per share for its fourth quarter ended April 30, 2009 as compared to earnings of $269,000 or $0.12 per share for the same quarter last year. Diluted earnings per share for the fourth quarter were $0.15 compared to $0.12 for the same quarter of last year.
For the year ended April 30, 2009, net income was $35,000 or $0.02 per share compared to $1,056,000 or $0.50 per share one year ago. Net results for the year ended April 30, 2009 were significantly impacted by the September 2008 announcement of a Federal conservatorship of the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation. As previously reported, this announcement prompted the Company to write off the balances of its preferred stock holdings in both entities, and resulted in a gross loss of $1.9 million and an after tax loss of $1.2 million.
Net interest income for the quarter ended April 30, 2009 increased by $153,000 or 9.2% to $1.8 million from $1.7 million for the quarter ended April 30, 2008, due to the reduction of interest rates paid on deposit accounts. During the current period, the Company's net interest margin increased from 2.95% for the quarter ended April 30, 2008 to 3.17% for the quarter ended April 30, 2009. Average interest earning assets for the quarter increased from $225.2 million for the quarter ended April 30, 2008 to $228.7 million for the quarter ended April 30, 2009 and average interest bearing liabilities grew from $220.4 million for the quarter ended April 30, 2008 to $226.7 million for the quarter ended April 30, 2009.
The Company made no provision for loan losses for either quarter ended April 30, 2009 or April 30, 2008. The Company provides for loan losses in order to maintain the allowance for loan losses at a level that it believes adequate to absorb potential losses based on known and inherent risks in its portfolio. In determining the appropriate level of the allowance for loan losses, the Company considers its past and anticipated loss experience, evaluations of underlying collateral, prevailing economic conditions, the nature and volume of the loan portfolio, and its levels of non-performing and other classified loans. The loan loss reserve is evaluated on a regular basis and was considered appropriate during both periods.
Non-interest income for the quarter increased by $93,000 as compared to the same quarter in the prior year. This increase was primarily due to an increase of $173,000 in gains realized upon the sale of mortgage loans, as partially offset by a decrease of $76,000 in gains on sales of investment securities. The decrease in prevailing mortgage interest rates resulted in increased volumes of fixed-rate residential refinance applications, and the Company was able to profitably sell these new mortgage originations. Additionally, loan origination and other loan fees decreased by $12,000 due to increased amortization of the mortgage servicing asset. Also, customer service fees decreased by $12,000, while other income increased by $20,000.
The Company's operating expenses increased by $148,000 or 8.7% for the quarter ended April 30, 2009 as compared to the quarter ended April 30, 2008. This increase was substantially the result of an increase of $120,000 in FDIC assessment expense as a function of the scheduled resumption and subsequent increase of deposit insurance premiums and of the accrual for an announced FDIC "Special Assessment" due in September 2009 and intended to replenish their insurance fund. Operating expenses also increased by $21,000 or 2.3% in compensation and fringe benefit expense due to additional employees hired to staff the new branch in Plymouth, MA and to increased benefit costs.
For the year ended April 30, 2009, net interest income was $7.3 million, representing an increase of $550,000 or 8.1% compared to the prior year. Because of lower funding costs, the Company's net interest margin increased from 2.99% for the year ended April 30, 2008 to 3.25% for year ended April 30, 2009. Average interest earning assets for the year ended April 30, 2009 were $225.5 million as compared to $226.9 million for the year ended April 30, 2008 and average interest bearing liabilities were $222.3 million compared to $221.2 million for the same period one year ago.
The provision for loan losses was zero for the years ended April 30, 2009 and April 30, 2008 as management and the Board of Directors considered the Bank's reserve for loan losses appropriate for both periods.
Non-interest income decreased by $1.8 million for the year ended April 30, 2009, primarily due a decrease in losses/gains on sales and writedowns of investment securities, from a gain of $108,000 for the year ended April 30, 2008 to a loss of $1.9 million for the year ended April 30, 2009.
