MIDLAND PARK, NJ--(Marketwire - May 3, 2010) - Stewardship Financial Corporation (
NASDAQ:
SSFN), parent of Atlantic Stewardship Bank, announced today its financial
results for the first quarter ended March 31, 2010. Net income for the
three months ended March 31, 2010 was $871,000, or $0.13 per diluted common
share, as compared to net income of $1.2 million, or $0.19 per diluted
common share, for the three months ended March 31, 2009. Results for the
current year period include an increased provision for loan losses. All per
share calculations have been adjusted for a 5% stock dividend paid in
November 2009.
"While our earnings were again impacted by the provision for loan losses,"
said Paul Van Ostenbridge, Stewardship Financial Corporation's President
and Chief Executive Officer, "positives for the quarter included an
increase in net interest income as well as an increase in fees and service
charges, and effective management of noninterest expenses."
Net interest income grew $581,000, or 10.4%, in the first quarter of 2010
compared to last year. For the three months ended March, 31, 2010, the net
interest spread and margin grew to 3.74% and 4.08%, respectively, from
3.42% and 3.87%, respectively, for the three months ended March 31, 2009.
The current period yield on earning assets of 5.58%, compared to an earning
asset yield of 5.81% for the three months ended March 31, 2009, reflects
the effect of a prolonged low interest rate environment. More than
offsetting the decline in the asset yield, the cost of interest-bearing
liabilities declined to 1.84% for the three months ended March 31, 2010 as
compared to 2.39% reported for the same prior year period, principally
reflecting the repricing of deposits at lower rates, consistent with the
lower interest rate environment.
The Corporation recorded a $1.55 million provision for loan losses for the
three months ended March 31, 2010 compared to a provision for loan losses
of $150,000 for the March 2009 period. The total allowance for loan losses
increased to 1.77% of total loans from a comparable ratio of 1.50% at
December 31, 2009 and 1.22% at March 31, 2009, reflecting the continuing
uncertain economic environment.
Commenting on the Corporation's loan loss provision, Van Ostenbridge
stated, "While the results of our reserve analysis process required us to
increase the provision for loan losses, our team continues to work
diligently to assertively address problem and potential problem loans. We
are making progress in working through these problem assets and the current
difficult economic cycle." Van Ostenbridge continued, "While additional
problem loans emerged, we were encouraged by our ability during the current
quarter to resolve several of the problem loans existing at December 31,
2009." Non-performing loans declined slightly to $22.3 million, or 4.83% of
total loans at March 31, 2010, compared to $22.9 million, or 4.98% at
December 31, 2009.
During the first quarter of 2010, the Corporation realized a $328,000 gain
on sale of securities. The security sale addressed the anticipated impact
of rising interest rates and provided the Corporation with additional
liquidity. In addition, noninterest income included increased fees and
service charges when compared to the same period last year. This increase
is partially the result of higher debit card related income due to
increased customer usage.
Effective expense management was demonstrated by only a slight increase in
total noninterest expenses in comparison to the first quarter of 2009.
Total assets at March 31, 2010 were $662.2 million, relatively unchanged
from assets of $663.8 million at December 31, 2009. A $9.1 million decrease
in the securities available for sale is primarily attributable to the sale
of securities as discussed previously. Loans receivable, gross increased
$1.4 million from December 31, 2009, reflecting a sufficient level of
demand offset by payoffs and normal principal amortization. The Corporation
adheres to appropriate underwriting standards to ensure the origination of
quality loans.
Total deposits were $542.9 million at March 31, 2010, representing solid
growth of $13.0 million when compared to deposits of $529.9 million at
December 31, 2009. The growth in deposits consisted of both
interest-bearing and non-interest bearing accounts, demonstrating
appropriate product offerings. As a result of the deposit growth, other
borrowings were reduced $18.6 million since December 31, 2009.
Van Ostenbridge concluded, "During this challenging time for the banking
industry, our philosophy has been, and continues to be, to manage the net
interest margin without compromising asset quality or future earnings
potential. For the near term, the size and extent of our loan loss
provisioning will remain the most important single factor in our earnings.
However, we believe that with stabilization in our credit quality and a
rebound in overall economic activity, we are well positioned for future
growth."
Stewardship Financial Corporation's subsidiary, the Atlantic Stewardship
Bank, has 13 banking offices in Midland Park, Hawthorne (2), Montville,
North Haledon, Pequannock, Ridgewood, Waldwick, Wayne (3), Westwood and
Wyckoff, New Jersey. The bank is known for tithing 10% of its pre-tax
profits to Christian and local charities. The Bank's Tithe amounts to over
$7.0 million in total donations since the program began.
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, March 31,
2010 2009 2009
------------- ------------- -------------
Selected Financial Condition
Data:
Cash and cash equivalents $ 12,196 $ 8,871 $ 11,820
Securities available for
sale 93,926 103,026 106,577
Securities held to
maturity 70,758 67,717 70,842
FHLB Stock 2,390 3,227 3,032
Loans receivable:
Loans receivable,
gross 461,877 460,476 437,196
Allowance for loan
losses (8,174) (6,920) (5,324)
Other, net (422) (437) (405)
------------- ------------- -------------
Loans receivable, net 453,281 453,119 431,467
Loans held for sale 2,724 660 1,968
Other assets 26,951 27,224 23,310
------------- ------------- -------------
Total assets $ 662,226 $ 663,844 $ 649,016
============= ============= =============
Total deposits $ 542,930 $ 529,930 $ 515,470
Other borrowings 36,000 54,600 50,500
Subordinated debentures 7,217 7,217 7,217
Securities sold under
agreements to repurchase 15,399 15,396 15,162
Other liabilities 6,677 3,190 7,087
Stockholders' equity 54,003 53,511 53,580
------------- ------------- -------------
Total liabilities and
stockholders' equity $ 662,226 $ 663,844 $ 649,016
============= ============= =============
Book value per common
share $ 7.57 $ 7.50 $ 7.53
Equity to assets 8.15% 8.06% 8.26%
Asset Quality Data:
Nonaccrual loans $ 19,525 $ 19,656 $ 6,592
Loans past due 90 days or
more and accruing - 415 414
Restructured loans 2,775 2,846 2,375
------------- ------------- -------------
Total nonperforming loans $ 22,300 $ 22,917 $ 9,381
============= ============= =============
Non-performing loans to
total loans 4.83% 4.98% 2.15%
Non-performing loans to
total assets 3.37% 3.45% 1.45%
Allowance for loan losses
to nonperforming loans 36.65% 30.20% 56.75%
Allowance for loan losses
to total gross loans 1.77% 1.50% 1.22%
All share data has been restated to include the effects of a 5% stock
dividend paid in November 2009.
Stewardship Financial Corporation
Selected Consolidated Financial Information
(dollars in thousands, except per share amounts)
(unaudited)
For the three months ended
March 31,
------------------------------
2010 2009
-------------- --------------
Selected Operating Data:
Interest income $ 8,495 $ 8,473
Interest expense 2,316 2,875
-------------- --------------
Net interest and dividend income 6,179 5,598
Provision for loan losses 1,550 150
-------------- --------------
Net interest and dividend income
after provision for loan losses 4,629 5,448
Non-interest income:
Fees and service charges 469 396
Bank owned life insurance 86 83
Gain on sales of mortgage loans 55 11
Gain on calls and sales of securities 328 39
Merchant processing - 118
Other 73 60
-------------- --------------
Total noninterest income 1,011 707
Non-interest expenses:
Salaries and employee benefits 2,126 2,059
Occupancy, net 489 472
Equipment 309 265
Data processing 325 305
FDIC insurance premium 224 170
Charitable contributions 165 171
Merchant processing - 108
Other 786 858
-------------- --------------
Total noninterest expenses 4,424 4,408
-------------- --------------
Income before income taxes 1,216 1,747
Income tax expense 345 560
-------------- --------------
Net income 871 1,187
Dividends on preferred stock 137 84
-------------- --------------
Net income available to common
stockholders $ 734 $ 1,103
============== ==============
Weighted avg. no. of diluted common
shares 5,841,633 5,834,953
Diluted earnings per common share $ 0.13 $ 0.19
Return on average common equity 5.48% 9.04%
Return on average assets 0.54% 0.76%
Yield on average interest-earning assets 5.58% 5.81%
Cost of average interest-bearing
liabilities 1.84% 2.39%
-------------- --------------
Net interest rate spread 3.74% 3.42%
============== ==============
Net interest margin 4.08% 3.87%
All share data has been restated to include the effects of a 5% stock
dividend paid in November 2009.
Contact Information: Contact:
Claire M. Chadwick
SVP and Chief Financial Officer
630 Godwin Avenue
Midland Park, NJ 07432
201-444-7100