Stewardship Financial Corporation Announces Earnings For The Second Quarter of 2017

MIDLAND PARK, N.J. , Aug. 08, 2017 (GLOBE NEWSWIRE) -- Stewardship Financial Corporation (NASDAQ:SSFN), parent company of Atlantic Stewardship Bank, announced net income for the three and six months ended June 30, 2017 of $1.3 million and $2.3 million, respectively, compared to net income of $1.4 million and $2.4 million for the three and six months ended June 30, 2016. Current year periods were relatively comparable to the same prior year periods, however, the three and six month periods of 2017 reflected provision for loan losses of $260,000 and $560,000 as a result of robust loan growth, while the three and six months ended June 30, 2016 included recoveries of the allowance for loan losses of $450,000 and $800,000, respectively.

Earlier in the quarter, the Corporation announced the successful completion of an 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 $20.7 million. The net proceeds to the Corporation, after deducting the underwriting discount and offering expenses, were $18.9 million. The Corporation expects to use the net proceeds of this offering to support organic growth and other general corporate purposes. In connection with the raise of capital, an approximate $20.0 million leverage transaction was completed.

Further, the Corporation celebrated the June 2017 opening of a new branch and loan production office in Morristown, New Jersey.  Paul Van Ostenbridge, Stewardship Financial Corporation’s President and Chief Executive Officer remarked that, “Our Morristown location, which expands our presence in Morris County, will continue to meet the needs of our customers. This new location offers additional conveniences such as advanced technology with a new Interactive Teller Machine, which combines ATM functions with access to a live teller, as well as lending solutions tailored to meet customers’ requests with a commercial lender on-site to provide localized decision-making.”

With respect to the activity during 2017, Van Ostenbridge noted, “In addition to a number of positive accomplishments, the Corporation continued to demonstrate the ability to generate solid core earnings. We were able to maintain expense levels and provide for loan loss reserves for our increasing loan portfolio while continuing to grow assets and increase revenue.”

Operating Results
The Corporation reported net interest income of $6.5 million and $12.7 million for the three and six months ended June 30, 2017, respectively, compared to $5.9 million and $11.1 million for the comparable prior year periods. Net interest income benefited from the recent growth in the average balance of the loan portfolio. The net interest margin for the current three and six month periods was 3.14% and 3.18%, respectively, compared to 3.38% and 3.24% for the three and six months ended June 30, 2016. The compression in margin in the 2017 periods when compared to prior periods is generally reflective of asset growth in an environment with a flattening of the yield curve and, to a lesser extent, the impact of the previously mentioned leverage strategy.

For the three and six months ended June 30, 2017, noninterest income was $813,000 and $1.6 million, respectively, compared to $832,000 and $1.7 million in the equivalent prior year periods. Excluding $32,000 and $56,000 of gains from securities transactions, noninterest income would have been $800,000 and $1.6 million for the three and six months ended June 30, 2016, which are comparable to the current year periods.

Noninterest expenses for the three and six months ended June 30, 2017 were $5.1 million and $10.2 million, respectively, compared to $5.0 million and $9.9 million in the comparable prior year periods. “Even with the substantial growth in assets, we have been able to effectively manage our infrastructure and expenses, resulting in an improvement in our efficiency,” stated Van Ostenbridge.

Balance Sheet / Financial Condition
Total assets at June 30, 2017 were $913.3 million, reflecting an increase of $117.8 million from the $795.5 million of assets at December 31, 2016. The strong organic loan origination levels accounted for $88.0 million of net growth in the gross loan portfolio during the six months ended June 30, 2017.

The continued funding of loan growth has been supported by deposits and, to a lesser extent, borrowings. Total deposits were $720.9 million at June 30, 2017, reflecting net growth of $62.0 million since December 31, 2016. Other borrowings increased to $93.8 million at June 30, 2017 compared to $59.2 million at December 31, 2016. Approximately $20 million of the growth in other borrowings can be attributed to the $20.0 million leverage strategy.

Regulatory capital levels at June 30, 2017 include the net proceeds of $18.9 million from the Corporation's public offering of common stock. The Corporation’s Tier 1 leverage ratio and total risk based capital ratio were 9.15% and 14.36%, respectively, compared to 7.65% and 13.10% at December 31, 2016, respectively.

About Stewardship Financial Corporation
Stewardship Financial Corporation’s subsidiary, the Atlantic Stewardship Bank, is a full-service community bank serving both individuals and businesses. ASB is known for tithing, or sharing, 10% of its taxable income with nonprofit, educational, charitable and/or evangelical religious organizations. To date, ASB’s total tithing donations total over $ 9.3 million. ASB maintains 12 banking locations in NJ including; Hawthorne, Midland Park, Montville, Morristown, North Haledon, Pequannock, Ridgewood, Waldwick, Westwood, Wyckoff and two offices in Wayne. ASB invites you to visit their website at www.asbnow.com for additional information and to learn more.

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.