For the first time in over two years, Randolph-based Envision Bank has had a profitable quarter.
The parent company of the bank reported second quarter net income of roughly $1.51 million, or $0.28 per share, compared to a net loss of $1.01 million, or $0.18 per share, for the three months ended June 30, 2018. With only a first quarter net loss of roughly $50,000, the bank may yet be able to turn in a profitable year.
The bank attributed declining mortgage rates and four new loan production offices in Central and Western Massachusetts for the success.
“The decrease in mortgage rates over the past several months has provided homeowners the opportunity to realize a meaningful reduction in their monthly mortgage payments and has also provided home buyers increased opportunities to purchase a home,” James P. McDonough, president and CEO of Envision, said in a statement. “With our expanded team of loan originators, we were able to capitalize on the resulting market growth for residential mortgages.”
During the second quarter of 2019, the bank originated $226.2 million in residential mortgages compared to $145.9 million in the prior year quarter, an increase of 55 percent. Refinanced loans accounted for $60.8 million, or 75 percent, of that increase.
The surge in residential mortgage loan production combined with the continuing flow of borrower applications resulted in a $3.2 million, or a 173 percent, increase in the gain on loan origination and sales activities in the second quarter of 2019 compared to the prior year quarter.
“We are optimistic that this higher production level will continue in the third quarter,” McDonough said. “With the decline in interest rates, we also saw an opportunity to reduce our portfolio of lower-yielding residential mortgage loans. With the transfer of $28.6 million of such loans from portfolio to loans held for sale, we positioned the portfolio for future growth of both commercial and residential real estate loans.”
Net interest income in the quarter was $4.5 million, up more than $450,000 from the same quarter last year. The margin lost 21 basis points on the year, falling to 2.91 percent.
Total assets reached more than $652 million at the end of the second quarter, up almost $100 million year-over-year, which is 17 percent growth. Non-interest income in the quarter was $5.9 million, up $3.1 million from the second quarter of 2018.
During the second quarter, Envision also sold its Boston branch, contributing to a decline in occupancy and equipment costs by $86,000 in the second quarter.
The company recognized a credit of $144,000 for the allowance for loan losses for second quarter, compared to a credit of $90,000 for the second quarter of 2018. This was due primarily to decreases in the loan portfolio attributable to the transfer of residential mortgages loans to loans held for sale and the repayment of a large commercial and industrial loan.
Non-performing assets as a percentage of total assets in the quarter was .37 percent, up two basis points from last year.
