MIDLAND PARK, N.J., Nov. 07, 2017 (GLOBE NEWSWIRE) — Stewardship Financial Corporation (NASDAQ:SSFN), parent company of Atlantic Stewardship Bank, announced improved results for the current year periods. Net income for the three and nine months ended September 30, 2017 was reported at $1.6 million and $3.9 million, respectively, compared to net income of $1.0 million and $3.4 million for the three and nine months ended September 30, 2016.
Paul Van Ostenbridge, President and Chief Executive Officer of Stewardship Financial Corporation commented, “Following a successful capital raise in April 2017 and the opening of a new location in Morristown, NJ in June 2017, the Corporation is focused on growing the bank and generating solid core earnings. Increased revenue will result from a growing loan portfolio and we intend to continue to work to maintain expense levels.”
Operating Results
For the three and nine months ended September 30, 2017, the Corporation reported net interest income of $6.8 million and $19.5 million, respectively. Current net interest income levels reflect improvement over the $5.5 million and $16.7 million reported in the comparable prior year periods, with the current year increases primarily driven by growth in the loan portfolio. Average loan balances increased $146.5 million and $130.7 million for the three and nine months ended September 30, 2017 over the comparable prior year periods. The net interest margins for the current three and nine month periods were 3.09% and 3.15%, respectively, compared to 3.07% and 3.18% for the three and nine months ended September 30, 2016. The margins are generally reflective of an environment with a flattened yield curve.
With year-over-year growth in the loan portfolio, provisions for loan losses of $20,000 and $580,000 were recorded for the three and nine months ended September 30, 2017, respectively, compared to negative provisions for loan losses of $250,000 and $1.1 million for the three and nine months ended September 30, 2016, respectively. As the Corporation continues to maintain stable credit quality, the allowance for loan losses to total gross loans was 1.24% at September 30, 2017 compared to 1.31% at December 31, 2016 and 1.48% a year earlier.
For the three and nine months ended September 30, 2017, noninterest income was $845,000 and $2.5 million, respectively, compared to $823,000 and $2.5 million in the equivalent prior year periods. For the three and nine months ended September 30, 2017, noninterest income included $68,000 and $123,000 of gains on sales of mortgage loans, respectively, compared to $33,000 and $70,000 for the comparable prior year periods. For the nine months ended September 30, 2017, noninterest income included $1,000 of gains on calls and sales of securities compared to $62,000 for the comparable prior year period.
Noninterest expenses for the three and nine months ended September 30, 2017 were $5.0 million and $15.2 million, respectively, compared to $5.0 million and $14.9 million in the comparable prior year periods. “In growing our loan portfolio, we are realizing efficiencies and remain committed to managing our expenses and infrastructure, as appropriate,” stated Van Ostenbridge.
Balance Sheet / Financial Condition
Total assets of $910.7 million at September 30, 2017 reflected a $152.8 million increase, or 20%, from a year earlier. The asset growth was driven by organic loan originations which resulted in a $139.8 million increase in the gross loan portfolio over the last twelve months.
Van Ostenbridge noted, “We have demonstrated our ability to fund the increase in loans with deposit growth coupled with, to a lesser extent, borrowings.” At September 30, 2017, deposits totaled $741.0 million, reflecting net growth over the past year of $94.9 million. A mix of organic growth and the retention / expansion of existing relationships has resulted in solid increases in deposits. Other borrowings were $68.8 million at September 30, 2017 compared to $35.0 million at September 30, 2016. Approximately $20 million of the growth in other borrowings can be attributed to a leverage strategy undertaken in conjunction with the capital raise in April 2017.
All regulatory capital levels at September 30, 2017 remain above the levels considered to be “well capitalized” under the applicable regulations. Tier 1 leverage ratio was 8.88% and 7.65% at September 30, 2017 and December 31, 2016, respectively. Total risk based capital ratio was 14.62% at September 30, 2017 compared to 13.10% at December 31, 2016.
The Corporation recently announced the establishment of a Small Business Administration (SBA) Department – staffed with newly hired employees with significant experience in the SBA process. Van Ostenbridge explained, “We view the SBA product offerings as value-added lending solutions for small businesses that do not meet traditional lending requirements.”
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.
Contact:
Claire M. Chadwick
Executive Vice President and
Chief Financial Officer
630 Godwin Avenue
Midland Park, NJ 07432
P: 201.444.7100
| Stewardship Financial Corporation | |||||||||||||||||||
| Selected Consolidated Financial Information | |||||||||||||||||||
| (dollars in thousands, except per share amounts) | |||||||||||||||||||
| (unaudited) | |||||||||||||||||||
| September 30, | June 30, | March 31, | December 31, | September 30, | |||||||||||||||
| 2017 | 2017 | 2017 | 2016 | 2016 | |||||||||||||||
| Selected Financial Condition Data: | |||||||||||||||||||
| Cash and cash equivalents | $ | 17,213 | $ | 19,459 | $ | 12,793 | $ | 11,680 | $ | 21,025 | |||||||||
| Securities available for sale | 115,733 | 116,244 | 95,632 | 98,583 | 103,546 | ||||||||||||||
| Securities held to maturity | 53,323 | 52,091 | 52,805 | 52,330 | 54,179 | ||||||||||||||
| FHLB stock | 3,919 | 5,169 | 3,784 | 3,515 | 2,425 | ||||||||||||||
| Loans held for sale | 688 | 446 | 188 | 773 | 300 | ||||||||||||||
| Loans receivable: | |||||||||||||||||||
| Loans receivable, gross | 691,953 | 692,056 | 654,769 | 604,083 | 552,106 | ||||||||||||||
| Allowance for loan losses | (8,614 | ) | (8,550 | ) | (8,246 | ) | (7,905 | ) | (8,150 | ) | |||||||||
| Other, net | (422 | ) | (344 | ) | (327 | ) | (226 | ) | (110 | ) | |||||||||
| Loans receivable, net | 682,917 | 683,162 | 646,196 | 595,952 | 543,846 | ||||||||||||||
| Other real estate owned, net | — | — | 401 | 401 | 834 | ||||||||||||||
| Bank owned life insurance | 20,943 | 20,802 | 16,673 | 16,558 | 16,439 | ||||||||||||||
| Other assets | 15,958 | 15,934 | 15,927 | 15,743 | 15,333 | ||||||||||||||
| Total assets | $ | 910,694 | $ | 913,307 | $ | 844,399 | $ | 795,535 | $ | 757,927 | |||||||||
| Noninterest-bearing deposits | $ | 171,609 | $ | 177,678 | $ | 170,566 | $ | 169,306 | $ | 172,072 | |||||||||
| Interest-bearing deposits | 569,352 | 543,215 | 530,138 | 489,624 | 474,012 | ||||||||||||||
| Total deposits | 740,961 | 720,893 | 700,704 | 658,930 | 646,084 | ||||||||||||||
| Other borrowings | 68,760 | 93,760 | 65,200 | 59,200 | 35,000 | ||||||||||||||
| Subordinated debentures and subordinated notes | 23,301 | 23,284 | 23,268 | 23,252 | 23,235 | ||||||||||||||
| Other liabilities | 3,564 | 2,859 | 2,810 | 2,766 | 2,040 | ||||||||||||||
| Total liabilities | 836,586 | 840,796 | 791,982 | 744,148 | 706,359 | ||||||||||||||
| Shareholders’ equity | 74,108 | 72,511 | 52,417 | 51,387 | 51,568 | ||||||||||||||
| Total liabilities and shareholders’ equity | $ | 910,694 | $ | 913,307 | $ | 844,399 | $ | 795,535 | $ | 757,927 | |||||||||
| Gross loans to deposits | 93.39 | % | 96.00 | % | 93.44 | % | 91.68 | % | 85.45 | % | |||||||||
| Equity to assets | 8.14 | % | 7.94 | % | 6.21 | % | 6.46 | % | 6.80 | % | |||||||||
| Book value per share | $ | 8.57 | $ | 8.39 | $ | 8.55 | $ | 8.39 | $ | 8.43 | |||||||||
| Asset Quality Data: | |||||||||||||||||||
| Nonaccrual loans | $ | 806 | $ | 826 | $ | 592 | $ | 606 | $ | 929 | |||||||||
| Loans past due 90 days or more and accruing | — | 320 | — | — | — | ||||||||||||||
| Total nonperforming loans | 806 | 1,146 | 592 | 606 | 929 | ||||||||||||||
| Other real estate owned | — | — | 401 | 401 | 834 | ||||||||||||||
| Total nonperforming assets | $ | 806 | $ | 1,146 | $ | 993 | $ | 1,007 | $ | 1,763 | |||||||||
| Nonperforming loans to total loans | 0.12 | % | 0.17 | % | 0.09 | % | 0.10 | % | 0.17 | % | |||||||||
| Nonperforming assets to total assets | 0.09 | % | 0.13 | % | 0.12 | % | 0.13 | % | 0.23 | % | |||||||||
| Allowance for loan losses to total gross loans | 1.24 | % | 1.24 | % | 1.26 | % | 1.31 | % | 1.48 | % | |||||||||
| Stewardship Financial Corporation | |||||||||||||||
| Selected Consolidated Financial Information | |||||||||||||||
| (dollars in thousands, except per share amounts) | |||||||||||||||
| (unaudited) | |||||||||||||||
| For the three months ended | For the nine months ended | ||||||||||||||
| September 30, | September 30, | ||||||||||||||
| 2017 | 2016 | 2017 | 2016 | ||||||||||||
| Selected Operating Data: | |||||||||||||||
| Interest income | $ | 8,400 | $ | 6,657 | $ | 23,767 | $ | 20,085 | |||||||
| Interest expense | 1,577 | 1,113 | 4,230 | 3,410 | |||||||||||
| Net interest income | 6,823 | 5,544 | 19,537 | 16,675 | |||||||||||
| Provision for loan losses | 20 | (250 | ) | 580 | (1,050 | ) | |||||||||
| Net interest income | |||||||||||||||
| after provision for loan losses | 6,803 | 5,794 | 18,957 | 17,725 | |||||||||||
| Noninterest income: | |||||||||||||||
| Fees and service charges | 524 | 536 | 1,578 | 1,595 | |||||||||||
| Bank owned life insurance | 141 | 120 | 385 | 328 | |||||||||||
| Gain on calls and sales of securities | 1 | 6 | 1 | 62 | |||||||||||
| Gain on sales of mortgage loans | 68 | 33 | 123 | 70 | |||||||||||
| Gain on sales of other real estate owned | — | — | 13 | 6 | |||||||||||
| Miscellaneous | 111 | 128 | 357 | 413 | |||||||||||
| Total noninterest income | 845 | 823 | 2,457 | 2,474 | |||||||||||
| Noninterest expenses: | |||||||||||||||
| Salaries and employee benefits | 2,843 | 2,788 | 8,567 | 8,245 | |||||||||||
| Occupancy, net | 414 | 400 | 1,216 | 1,202 | |||||||||||
| Equipment | 173 | 155 | 497 | 453 | |||||||||||
| Data processing | 444 | 485 | 1,369 | 1,434 | |||||||||||
| Advertising | 182 | 165 | 529 | 473 | |||||||||||
| FDIC insurance premium | 50 | 100 | 236 | 296 | |||||||||||
| Charitable contributions | 130 | 80 | 375 | 240 | |||||||||||
| Bank-card related services | 137 | 150 | 421 | 431 | |||||||||||
| Other real estate owned, net | — | 27 | 24 | 129 | |||||||||||
| Miscellaneous | 663 | 649 | 1,999 | 1,997 | |||||||||||
| Total noninterest expenses | 5,036 | 4,999 | 15,233 | 14,900 | |||||||||||
| Income before income tax expense | 2,612 | 1,618 | 6,181 | 5,299 | |||||||||||
| Income tax expense | 972 | 583 | 2,282 | 1,911 | |||||||||||
| Net income | $ | 1,640 | $ | 1,035 | $ | 3,899 | $ | 3,388 | |||||||
| Weighted avg. no. of diluted common shares | 8,643,737 | 6,115,987 | 7,656,942 | 6,106,723 | |||||||||||
| Diluted earnings per common share | $ | 0.19 | $ | 0.17 | $ | 0.51 | $ | 0.55 | |||||||
| Return on average common equity | 8.83 | % | 8.06 | % | 8.02 | % | 9.09 | % | |||||||
| Return on average assets | 0.71 | % | 0.54 | % | 0.60 | % | 0.61 | % | |||||||
| Yield on average interest-earning assets | 3.80 | % | 3.68 | % | 3.83 | % | 3.83 | % | |||||||
| Cost of average interest-bearing liabilities | 0.94 | % | 0.83 | % | 0.89 | % | 0.86 | % | |||||||
| Net interest rate spread | 2.86 | % | 2.85 | % | 2.94 | % | 2.97 | % | |||||||
| Net interest margin | 3.09 | % | 3.07 | % | 3.15 | % | 3.18 | % | |||||||
| Stewardship Financial Corporation | ||||||||||||||||||||
| Selected Consolidated Financial Information | ||||||||||||||||||||
| (dollars in thousands, except per share amounts) | ||||||||||||||||||||
| (unaudited) | ||||||||||||||||||||
| For the three months ended | ||||||||||||||||||||
| September 30, | June 30, | March 31, | December 31, | September 30, | ||||||||||||||||
| 2017 | 2017 | 2017 | 2016 | 2016 | ||||||||||||||||
| Selected Operating Data: | ||||||||||||||||||||
| Interest income | $ | 8,400 | $ | 7,943 | $ | 7,424 | $ | 7,000 | $ | 6,657 | ||||||||||
| Interest expense | 1,577 | 1,409 | 1,244 | 1,103 | 1,113 | |||||||||||||||
| Net interest income | 6,823 | 6,534 | 6,180 | 5,897 | 5,544 | |||||||||||||||
| Provision for loan losses | 20 | 260 | 300 | (300 | ) | (250 | ) | |||||||||||||
| Net interest and dividend income | ||||||||||||||||||||
| after provision for loan losses | 6,803 | 6,274 | 5,880 | 6,197 | 5,794 | |||||||||||||||
| Noninterest income: | ||||||||||||||||||||
| Fees and service charges | 524 | 519 | 535 | 564 | 536 | |||||||||||||||
| Bank owned life insurance | 141 | 129 | 115 | 119 | 120 | |||||||||||||||
| Gain on calls and sales of securities | 1 | — | — | 1 | 6 | |||||||||||||||
| Gain on sales of mortgage loans | 68 | 38 | 17 | 94 | 33 | |||||||||||||||
| Gain on sales of other real estate owned | — | 13 | — | 30 | — | |||||||||||||||
| Miscellaneous | 111 | 114 | 132 | 129 | 128 | |||||||||||||||
| Total noninterest income | 845 | 813 | 799 | 937 | 823 | |||||||||||||||
| Noninterest expenses: | ||||||||||||||||||||
| Salaries and employee benefits | 2,843 | 2,880 | 2,844 | 2,735 | 2,788 | |||||||||||||||
| Occupancy, net | 414 | 393 | 409 | 396 | 400 | |||||||||||||||
| Equipment | 173 | 162 | 162 | 156 | 155 | |||||||||||||||
| Data processing | 444 | 456 | 469 | 481 | 485 | |||||||||||||||
| Advertising | 182 | 211 | 136 | 196 | 165 | |||||||||||||||
| FDIC insurance premium | 50 | 109 | 77 | 21 | 100 | |||||||||||||||
| Charitable contributions | 130 | 120 | 125 | 135 | 80 | |||||||||||||||
| Bank-card related services | 137 | 142 | 142 | 148 | 150 | |||||||||||||||
| Other real estate owned, net | — | 9 | 15 | 14 | 27 | |||||||||||||||
| Miscellaneous | 663 | 601 | 735 | 720 | 649 | |||||||||||||||
| Total noninterest expenses | 5,036 | 5,083 | 5,114 | 5,002 | 4,999 | |||||||||||||||
| Income before income tax expense | 2,612 | 2,004 | 1,565 | 2,132 | 1,618 | |||||||||||||||
| Income tax expense | 972 | 736 | 574 | 784 | 583 | |||||||||||||||
| Net income | $ | 1,640 | $ | 1,268 | $ | 991 | $ | 1,348 | $ | 1,035 | ||||||||||
| Weighted avg. no. of diluted common shares | 8,643,737 | 8,174,484 | 6,124,926 | 6,119,693 | 6,115,987 | |||||||||||||||
| Diluted earnings per common share | $ | 0.19 | $ | 0.16 | $ | 0.16 | $ | 0.22 | $ | 0.17 | ||||||||||
| Return on average common equity | 8.83 | % | 7.37 | % | 7.71 | % | 10.40 | % | 8.06 | % | ||||||||||
| Return on average assets | 0.71 | % | 0.58 | % | 0.49 | % | 0.69 | % | 0.54 | % | ||||||||||
| Yield on average interest-earning assets | 3.80 | % | 3.81 | % | 3.88 | % | 3.77 | % | 3.68 | % | ||||||||||
| Cost of average interest-bearing liabilities | 0.94 | % | 0.90 | % | 0.84 | % | 0.80 | % | 0.83 | % | ||||||||||
| Net interest rate spread | 2.86 | % | 2.91 | % | 3.04 | % | 2.97 | % | 2.85 | % | ||||||||||
| Net interest margin | 3.09 | % | 3.14 | % | 3.23 | % | 3.18 | % | 3.07 | % | ||||||||||