MIDLAND PARK, N.J., May 10, 2017 (GLOBE NEWSWIRE) -- Stewardship Financial Corporation (NASDAQ:SSFN), parent company of Atlantic Stewardship Bank, announced net income for the three months ended March 31, 2017 of $991,000, or $0.16 per common share. While the current year period net results were comparable to the three months ended March 31, 2016, the first quarter of 2017 reflected a provision for loan losses of $300,000 as a result of substantial loan growth compared to a recovery of $350,000 of the allowance for loan losses for the three months ended March 31, 2016.
“The current period results demonstrate the Corporation’s ability to report core earnings achieved through growing our loan portfolio, even with a related need to provide for a loan loss reserve,” stated Paul Van Ostenbridge, Stewardship Financial Corporation’s President and Chief Executive Officer.
Operating Results
Net interest income and net interest margin was $6.2 million and 3.23% for the first quarter of 2017 compared to $5.3 million and 3.11% for the comparable period a year earlier. Net interest income benefited from the recent loan growth. The three months ended March 31, 2017 included approximately $105,000 of prepayment premiums on loan payoffs compared to $27,000 for the same prior year period.
The Corporation reported noninterest income of $799,000 for the three months ended March 31, 2017 compared to $819,000 for the equivalent prior year period. Excluding $24,000 of nonrecurring gains from securities transactions, noninterest income would have been $795,000 for the three months ended March 31, 2016, relatively comparable to the current year period.
Total noninterest expenses were $5.1 million for the three months ended March 31, 2017 compared to the $4.9 million incurred in the prior year period. “We remain committed to controlling expenses as we grow our balance sheet,” stated Van Ostenbridge.
Asset Quality
Results for the three months ended March 31, 2017 were affected by the Corporation recording a provision for loan losses of $300,000 as compared to the positive impact of a $350,000 negative provision for loan losses for the three months ended March 31, 2016. With the significant improvement in credit quality the recording of a provision for loan losses is directly linked to the robust growth in the loan portfolio.
Balance Sheet / Financial Condition
Total assets at March 31, 2017 were $844.4 million, reflecting an increase from the $795.5 million of assets at December 31, 2016. The growth in the balance sheet was the result of strong origination levels. New loan originations, partially offset by normal principal amortization and payoffs, resulted in net growth in the loan portfolio of $50.7 million. According to Van Ostenbridge, “The new loans originated represent a record level for the Corporation.”
Total deposits were $700.7 million at March 31, 2017, reflecting net growth of $41.8 million since December 31, 2016. The Corporation continues to experience growth in both noninterest-bearing and interest-bearing deposits.
At March 31, 2017, the Corporation’s Tier 1 leverage ratio and total risk based capital ratio were 7.38% and 12.38%, respectively. These ratios are both significantly above the respective 4.0% and 8% minimum levels required and result in categorizing the Corporation as a “well capitalized” institution under regulatory guidelines.
The Corporation previously announced on April 17, 2017 the closing of its underwritten public offering of 2,509,090 shares of the Corporation’s common stock, which included 327,272 shares issued pursuant to the full exercise of the underwriter’s over-allotment option, at a price to the public of $8.25 per share, for aggregate gross proceeds of approximately $20.7 million. The net proceeds to the Corporation, after deducting the underwriting discount and estimated offering expenses, were approximately $18.8 million. The Corporation expects to use the net proceeds of this offering to support organic growth and other general corporate purposes.
About Stewardship Financial Corporation
Stewardship Financial Corporation’s subsidiary, the Atlantic Stewardship Bank, has 11 banking offices in Midland Park, Hawthorne, Montville, North Haledon, Pequannock, Ridgewood, Waldwick, Wayne (2), Westwood and Wyckoff, New Jersey. Additionally, the Bank is scheduled to open its 12th branch location in Morristown, New Jersey in late spring. The Bank is known for tithing 10% of its pre-tax profits to Christian and local charities. To date, the Bank’s tithe donations total over $9.3 million.
We invite you to visit our website at www.asbnow.com for additional information.
The information disclosed in this document contains certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, and may be identified by the use of such words as “believe,” “expect,” “anticipate,” “should,” “plan,” “estimate,” and “potential.” Examples of forward-looking statements include, but are not limited to, estimates with respect to the financial condition, results of operations and business of the Corporation that are subject to various factors which could cause actual results to differ materially from these estimates. These factors include changes in general, economic and market conditions, legislative and regulatory conditions, or the development of an interest rate environment that adversely affects the Corporation’s interest rate spread or other income anticipated from operations and investments.
| Stewardship Financial Corporation | |||||||||||||||||||
| Selected Consolidated Financial Information | |||||||||||||||||||
| (dollars in thousands, except per share amounts) | |||||||||||||||||||
| (unaudited) | |||||||||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | |||||||||||||||
| 2017 | 2016 | 2016 | 2016 | 2016 | |||||||||||||||
| Selected Financial Condition Data: | |||||||||||||||||||
| Cash and cash equivalents | $ | 12,793 | $ | 11,680 | $ | 21,025 | $ | 13,901 | $ | 13,319 | |||||||||
| Securities available for sale | 95,632 | 98,583 | 103,546 | 98,533 | 97,637 | ||||||||||||||
| Securities held to maturity | 52,805 | 52,330 | 54,179 | 65,666 | 62,427 | ||||||||||||||
| FHLB Stock | 3,784 | 3,515 | 2,425 | 2,650 | 2,608 | ||||||||||||||
| Loans held for sale | 188 | 773 | 300 | 581 | 783 | ||||||||||||||
| Loans receivable: | |||||||||||||||||||
| Loans receivable, gross | 654,769 | 604,083 | 552,106 | 537,638 | 528,011 | ||||||||||||||
| Allowance for loan losses | (8,246 | ) | (7,905 | ) | (8,150 | ) | (8,388 | ) | (8,540 | ) | |||||||||
| Other, net | (327 | ) | (226 | ) | (110 | ) | (25 | ) | (64 | ) | |||||||||
| Loans receivable, net | 646,196 | 595,952 | 543,846 | 529,225 | 519,407 | ||||||||||||||
| Other real estate owned, net | 401 | 401 | 834 | 834 | 1,013 | ||||||||||||||
| Bank owned life insurance | 16,673 | 16,558 | 16,439 | 16,320 | 14,212 | ||||||||||||||
| Other assets | 15,927 | 15,743 | 15,333 | 14,877 | 15,251 | ||||||||||||||
| Total assets | $ | 844,399 | $ | 795,535 | $ | 757,927 | $ | 742,587 | $ | 726,657 | |||||||||
| Noninterest-bearing deposits | $ | 170,566 | $ | 169,306 | $ | 172,072 | $ | 160,461 | $ | 154,201 | |||||||||
| Interest-bearing deposits | 530,138 | 489,624 | 474,012 | 466,008 | 458,225 | ||||||||||||||
| Total deposits | 700,704 | 658,930 | 646,084 | 626,469 | 612,426 | ||||||||||||||
| Other borrowings | 65,200 | 59,200 | 35,000 | 40,000 | 40,000 | ||||||||||||||
| Subordinated debentures and subordinated notes | 23,268 | 23,252 | 23,235 | 23,219 | 23,203 | ||||||||||||||
| Other liabilities | 2,810 | 2,766 | 2,040 | 2,213 | 1,836 | ||||||||||||||
| Total liabilities | 791,982 | 744,148 | 706,359 | 691,901 | 677,465 | ||||||||||||||
| Shareholders' equity | 52,417 | 51,387 | 51,568 | 50,686 | 49,192 | ||||||||||||||
| Total liabilities and shareholders' equity | $ | 844,399 | $ | 795,535 | $ | 757,927 | $ | 742,587 | $ | 726,657 | |||||||||
| Gross loans to deposits | 93.44 | % | 91.68 | % | 85.45 | % | 85.82 | % | 86.22 | % | |||||||||
| Equity to assets | 6.21 | % | 6.46 | % | 6.80 | % | 6.83 | % | 6.77 | % | |||||||||
| Book value per share | $ | 8.55 | $ | 8.39 | $ | 8.43 | $ | 8.29 | $ | 8.05 | |||||||||
| Asset Quality Data: | |||||||||||||||||||
| Nonaccrual loans | $ | 592 | $ | 606 | $ | 929 | $ | 949 | $ | 2,304 | |||||||||
| Loans past due 90 days or more and accruing | - | - | - | - | - | ||||||||||||||
| Total nonperforming loans | 592 | 606 | 929 | 949 | 2,304 | ||||||||||||||
| Other real estate owned | 401 | 401 | 834 | 834 | 1,013 | ||||||||||||||
| Total nonperforming assets | $ | 993 | $ | 1,007 | $ | 1,763 | $ | 1,783 | $ | 3,317 | |||||||||
| Nonperforming loans to total loans | 0.09 | % | 0.10 | % | 0.17 | % | 0.18 | % | 0.44 | % | |||||||||
| Nonperforming assets to total assets | 0.12 | % | 0.13 | % | 0.23 | % | 0.24 | % | 0.46 | % | |||||||||
| Allowance for loan losses to total gross loans | 1.26 | % | 1.31 | % | 1.48 | % | 1.56 | % | 1.62 | % | |||||||||
| Stewardship Financial Corporation | ||||||||
| Selected Consolidated Financial Information | ||||||||
| (dollars in thousands, except per share amounts) | ||||||||
| (unaudited) | ||||||||
| For the three months ended | ||||||||
| March 31, | ||||||||
| 2017 | 2016 | |||||||
| Selected Operating Data: | ||||||||
| Interest income | $ | 7,424 | $ | 6,449 | ||||
| Interest expense | 1,244 | 1,173 | ||||||
| Net interest and dividend income | 6,180 | 5,276 | ||||||
| Provision for loan losses | 300 | (350 | ) | |||||
| Net interest income | ||||||||
| after provision for loan losses | 5,880 | 5,626 | ||||||
| Noninterest income: | ||||||||
| Fees and service charges | 535 | 529 | ||||||
| Bank owned life insurance | 115 | 101 | ||||||
| Gain on calls and sales of securities | - | 24 | ||||||
| Gain on sales of mortgage loans | 17 | 18 | ||||||
| Other | 132 | 147 | ||||||
| Total noninterest income | 799 | 819 | ||||||
| Noninterest expenses: | ||||||||
| Salaries and employee benefits | 2,844 | 2,715 | ||||||
| Occupancy, net | 409 | 398 | ||||||
| Equipment | 162 | 150 | ||||||
| Data processing | 469 | 472 | ||||||
| Advertising | 136 | 151 | ||||||
| FDIC insurance premium | 77 | 106 | ||||||
| Charitable contributions | 125 | 70 | ||||||
| Bank-card related services | 142 | 131 | ||||||
| Other real estate owned, net | 15 | 74 | ||||||
| Miscellaneous | 735 | 635 | ||||||
| Total noninterest expenses | 5,114 | 4,902 | ||||||
| Income before income tax expense | 1,565 | 1,543 | ||||||
| Income tax expense | 574 | 552 | ||||||
| Net income | $ | 991 | $ | 991 | ||||
| Weighted avg. no. of diluted common shares | 6,124,926 | 6,092,351 | ||||||
| Diluted earnings per common share | $ | 0.16 | $ | 0.16 | ||||
| Return on average common equity | 7.71 | % | 8.21 | % | ||||
| Return on average assets | 0.49 | % | 0.55 | % | ||||
| Yield on average interest-earning assets | 3.88 | % | 3.79 | % | ||||
| Cost of average interest-bearing liabilities | 0.84 | % | 0.90 | % | ||||
| Net interest rate spread | 3.04 | % | 2.89 | % | ||||
| Net interest margin | 3.23 | % | 3.11 | % | ||||
| Stewardship Financial Corporation | ||||||||||||||||||||
| Selected Consolidated Financial Information | ||||||||||||||||||||
| (dollars in thousands, except per share amounts) | ||||||||||||||||||||
| (unaudited) | ||||||||||||||||||||
| For the three months ended | ||||||||||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | ||||||||||||||||
| 2017 | 2016 | 2016 | 2016 | 2016 | ||||||||||||||||
| Selected Operating Data: | ||||||||||||||||||||
| Interest income | $ | 7,424 | $ | 7,000 | $ | 6,657 | $ | 6,979 | $ | 6,449 | ||||||||||
| Interest expense | 1,244 | 1,103 | 1,113 | 1,124 | 1,173 | |||||||||||||||
| Net interest and dividend income | 6,180 | 5,897 | 5,544 | 5,855 | 5,276 | |||||||||||||||
| Provision for loan losses | 300 | (300 | ) | (250 | ) | (450 | ) | (350 | ) | |||||||||||
| Net interest and dividend income | ||||||||||||||||||||
| after provision for loan losses | 5,880 | 6,197 | 5,794 | 6,305 | 5,626 | |||||||||||||||
| Noninterest income: | ||||||||||||||||||||
| Fees and service charges | 535 | 564 | 536 | 530 | 529 | |||||||||||||||
| Bank owned life insurance | 115 | 119 | 120 | 107 | 101 | |||||||||||||||
| Gain on calls and sales of securities | - | 1 | 6 | 32 | 24 | |||||||||||||||
| Gain on sales of mortgage loans | 17 | 94 | 33 | 19 | 18 | |||||||||||||||
| Gain on sales of other real estate owned | - | 30 | - | 6 | - | |||||||||||||||
| Other | 132 | 129 | 128 | 138 | 147 | |||||||||||||||
| Total noninterest income | 799 | 937 | 823 | 832 | 819 | |||||||||||||||
| Noninterest expenses: | ||||||||||||||||||||
| Salaries and employee benefits | 2,844 | 2,735 | 2,788 | 2,742 | 2,715 | |||||||||||||||
| Occupancy, net | 409 | 396 | 400 | 404 | 398 | |||||||||||||||
| Equipment | 162 | 156 | 155 | 148 | 150 | |||||||||||||||
| Data processing | 469 | 481 | 485 | 477 | 472 | |||||||||||||||
| Advertising | 136 | 196 | 165 | 157 | 151 | |||||||||||||||
| FDIC insurance premium | 77 | 21 | 100 | 90 | 106 | |||||||||||||||
| Charitable contributions | 125 | 135 | 80 | 90 | 70 | |||||||||||||||
| Bank-card related services | 142 | 148 | 150 | 150 | 131 | |||||||||||||||
| Other real estate owned, net | 15 | 14 | 27 | 28 | 74 | |||||||||||||||
| Other | 735 | 720 | 649 | 713 | 635 | |||||||||||||||
| Total noninterest expenses | 5,114 | 5,002 | 4,999 | 4,999 | 4,902 | |||||||||||||||
| Income before income tax expense | 1,565 | 2,132 | 1,618 | 2,138 | 1,543 | |||||||||||||||
| Income tax expense | 574 | 784 | 583 | 776 | 552 | |||||||||||||||
| Net income | $ | 991 | $ | 1,348 | $ | 1,035 | $ | 1,362 | $ | 991 | ||||||||||
| Weighted avg. no. of diluted common shares | 6,124,926 | 6,119,693 | 6,115,987 | 6,111,729 | 6,092,351 | |||||||||||||||
| Diluted earnings per common share | $ | 0.16 | $ | 0.22 | $ | 0.17 | $ | 0.22 | $ | 0.16 | ||||||||||
| Return on average common equity | 7.71 | % | 10.40 | % | 8.06 | % | 11.05 | % | 8.21 | % | ||||||||||
| Return on average assets | 0.49 | % | 0.69 | % | 0.54 | % | 0.74 | % | 0.55 | % | ||||||||||
| Yield on average interest-earning assets | 3.88 | % | 3.77 | % | 3.68 | % | 4.02 | % | 3.79 | % | ||||||||||
| Cost of average interest-bearing liabilities | 0.84 | % | 0.80 | % | 0.83 | % | 0.86 | % | 0.90 | % | ||||||||||
| Net interest rate spread | 3.04 | % | 2.97 | % | 2.85 | % | 3.16 | % | 2.89 | % | ||||||||||
| Net interest margin | 3.23 | % | 3.18 | % | 3.07 | % | 3.38 | % | 3.11 | % | ||||||||||