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Randolph Savings Bank may have a new name, but it is still dealing with the same problems.
The parent company of Envision Bank reported a second quarter loss of more than $1 million, or $0.18 per share, compared to a net loss of $150,000, or $0.03 per share, for the second quarter of 2017. Total losses on the year now exceed $1.7 million.
Second quarter net interest income was about $4 million, a $340,000 increase from the second quarter of last year. The margin lost 13 basis points on the year, ending the quarter at 3.12 percent.
“Profit margins have been adversely affected by competitive pressure as banks and other lenders compete for market share, and lower demand for FHA loans which carry a higher profit margin than conforming conventional mortgages,” James P. McDonough, president and CEO of the company, said in a statement.
The company attributed a large part of the net losses to merger and integration costs of over $890,000 associated with its 2016 acquisition of First Eastern Bankshares Corp.
Total assets climbed to roughly $565 million, up about $22 million on a linked quarter basis and about $58 million year-over-year. Total loans reached $427.7 million, up about $63 million year-over-year, and despite layoffs in 2017, the bank has been hiring again to beef up its lending squad.
“As noted last quarter, we have added to our team of loan originators in 2018, which led directly to a 23 percent quarterly increase in production over the prior year period despite strong headwinds in the market for both purchase and refinance loan originations,” McDonough said. “Our increased production was the primary contributor to the strong growth we experienced in our loan portfolio during the second quarter. Our commitment to mortgage banking remains as strong as ever and we will continue to look to opportunities to expand our loan origination capabilities.”
The bank has tried to battle back after years of losses, but attempts have done little to ease the pain. Executives converted the company from a mutual bank to a publicly traded bank in 2016 and then used that money to purchase First Eastern Mortgage that same year.
The company reported $2.64 million in net income at the end of 2016, but the bank’s mortgage operations took a hit last year as the housing inventory shrunk and refinancing activity slowed. According to the bank’s 2017 third quarter earnings report, residential loan originations in 2017 were down 35 percent. The bank reported nearly $2 million in losses at the end of the year.
During the first quarter of this year, the company changed its subsidiary name from Randolph Savings Bank to Envision Bank in order to reflect a commitment to delivering a people and technology approach in support of healthier financial well-being for its customers and communities.
