SOURCE: Stewardship Financial Corporation

Stewardship Financial Corporation

July 30, 2015 16:05 ET

Stewardship Financial Corporation Announces Earnings for Second Quarter of 2015

MIDLAND PARK, NJ--(Marketwired - July 30, 2015) - Stewardship Financial Corporation (NASDAQ: SSFN), parent of Atlantic Stewardship Bank, announced net income for the three and six months ended June 30, 2015 of $1.2 million and $2.1 million, respectively, as compared to net income of $726,000 and $1.2 million for the three and six months ended June 30, 2014, respectively. After dividends on preferred stock, net income available to common shareholders was $1.8 million, or $0.30 per common share, for the first six months of 2015 compared to $890,000, or $0.15 per common share, for the comparable period of 2014.

Commenting on the quarter and year-to-date numbers, Paul Van Ostenbridge, Stewardship Financial Corporation's President and Chief Executive Officer stated, "Our results continue to demonstrate our ability to generate improving earnings. The strong loan growth we have seen for the last few quarters continues -- with growth in the loan portfolio of $29.8 million for the first six months of 2015, or 12.5% on an annualized basis. In addition, results benefited from continued improvement in asset quality."

Operating Results
The Corporation reported net interest income of $5.5 million and $10.9 million for the three and six months ended June 30, 2015, compared to $5.4 million and $10.7 million for the equivalent prior year periods.

Contributing to the improving results was the growth in average interest earning assets partially offset by reduced margins. The net interest margin was 3.40% for both the three and six months ended June 30, 2014 compared to 3.51% and 3.45% for the three and six months ended June 30, 2014, respectively. "Financial institutions, including the Corporation, continue to operate in this prolonged low interest rate environment where margins are generally expected to remain flat or show slight declines," said Van Ostenbridge.

Noninterest income was reported at $882,000 and $1.8 million for the three and six months ended June 30, 2015, respectively, compared to $807,000 and $1.2 million for the equivalent prior year periods. The current year periods reflect increases in fees and service charges of $53,000 and $111,000 when compared to 2014. In addition, gains on sales of mortgage loans increased over the prior year three and six month periods as the Corporation has returned to selling the majority of residential loan production. Another positive factor was noninterest income for the six months ended June 30 2015 included gains of $152,000 from the sale of available for sale securities and $53,000 from the sale of other real estate owned. The prior year period included a loss of $241,000 from the sale of nonperforming loans.

For both 2015 and 2014, total noninterest expenses of amounted to $5.1 million and $10.2 million for the three and six month periods, respectively. The Corporation remains committed to controlling expenses even as growth in the balance sheet is achieved.

Asset Quality
For the three and six months ended June 30, 2015, results were positively impacted by the Corporation recording negative provisions for loan losses of $600,000 and $700,000, respectively. There were no provisions for loan losses recorded in either the three or six months ended June 30, 2014. During 2015, the Corporation recorded $299,000 and $397,000 for the three and six month periods, respectively, of net recoveries of previously charged off loan balances. Furthermore, nonperforming loans continue to decline and were $2.5 million, or 0.50% of total loans at June 30, 2015 compared to $3.6 million, or 0.76%, at December 31, 2014 and $4.9 million, or 1.13%, a year earlier. Total nonperforming assets of $2.8 million, which includes other real estate owned, also showed continued improvement and represented just 0.39% of total assets at June 30, 2015 compared to 0.71% and 0.91% at December 31, 2014 and June 30, 2014, respectively.

Balance Sheet / Financial Condition
As of June 30, 2015, total assets reached $701.2 million, reflecting a slightly larger balance sheet when compared to assets of $693.6 million at December 31, 2014. A $29.8 million increase in gross loans for the first half of 2015 resulted from new loan originations, partially offset by normal principal amortization. As previously reported, early in 2015, the Corporation identified and sold approximately $27.8 million of available for sale securities with higher price volatility thus providing a portion of the funding for the loan growth while still continuing to manage overall asset growth.

Total deposits grew to $586.0 million at June 30, 2015, an increase of $29.5 million when compared to deposits of $556.5 million at December 31, 2014. Van Ostenbridge noted, "We are now focused on building on this growth in deposits to fund loan growth."

In general, as a result of an increase in deposits, other borrowings decreased $21.7 million to $45.0 million at June 30, 2015. Other borrowings assist the Corporation in managing against rising interest rates through the extension of liabilities and enable us to handle temporary deposit outflows.

At June 30, 2015, capital levels continue to significantly exceed the regulatory capital requirements for a "well capitalized" institution with a tier 1 leverage ratio of 9.90% (4% requirement) and total risk based capital ratio of 14.47% (8% requirement).

About Stewardship Financial Corporation
Stewardship Financial Corporation's subsidiary, the Atlantic Stewardship Bank, has 12 banking offices in Midland Park, Hawthorne (2), Montville, North Haledon, Pequannock, Ridgewood, Waldwick, Wayne (2), Westwood and Wyckoff, New Jersey. 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 $8.2 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)
                    
   June 30,   March 31,   December 31,   September 30,   June 30,
   2015   2015   2014   2014   2014
                    
Selected Financial Condition Data:                   
 Cash and cash equivalents  $19,782    $21,035    $10,086    $10,850    $14,630  
 Securities available for sale   90,850     94,553     124,918     138,255     144,459  
 Securities held to maturity   58,363     55,811     55,097     54,234     54,225  
 FHLB Stock   2,833     3,026     3,777     2,882     2,429  
 Loans receivable:                              
  Loans receivable, gross   507,105     490,087     477,320     443,006     433,198  
  Allowance for loan losses   (9,299 )   (9,600 )   (9,602 )   (10,094 )   (9,825 )
  Other, net   (132 )   (7 )   (19 )   (17 )   40  
 Loans receivable, net   497,674     480,480     467,699     432,895     423,413  
                               
 Loans held for sale   1,416     798     -     364     259  
 Other assets   30,273     30,114     31,974     33,072     32,107  
 Total assets  $701,191    $685,817    $693,551    $672,552    $671,522  
                               
                               
 Noninterest-bearing deposits  $153,546    $141,406    $136,721    $140,345    $143,711  
 Interest-bearing deposits   432,453     424,916     419,755     416,666     422,669  
 Total deposits   585,999     566,322     556,476     557,011     566,380  
 Other borrowings   45,000     50,000     66,700     46,800     31,000  
 Securities sold under agreements to repurchase   -     -     -     100     7,601  
 Subordinated debentures   7,217     7,217     7,217     7,217     7,217  
 Other liabilities   2,123     2,166     4,189     4,166     2,329  
 Total liabilities   640,339     625,705     634,582     615,294     614,527  
 Shareholders' equity   60,852     60,112     58,969     57,258     56,995  
 Total liabilities and shareholders' equity  $701,191    $685,817    $693,551    $672,552    $671,522  
                               
 Gross loans to deposits   86.54 %   86.54 %   85.78 %   79.53 %   76.49 %
                               
 Equity to assets   8.68 %   8.77 %   8.50 %   8.51 %   8.49 %
                               
Asset Quality Data:                              
 Nonaccrual loans  $2,539    $2,798    $3,628    $4,434    $4,875  
 Loans past due 90 days or more and accruing   -     -     -     -     -  
 Total nonperforming loans   2,539     2,798     3,628     4,434     4,875  
 Other real estate owned   219     320     1,308     2,090     1,225  
 Total nonperforming assets  $2,758    $3,118    $4,936    $6,524    $6,100  
                                
                                
 Nonperforming loans to total loans   0.50 %   0.57 %   0.76 %   1.00 %   1.13 %
 Nonperforming assets to total assets   0.39 %   0.45 %   0.71 %   0.97 %   0.91 %
 Allowance for loan losses to nonperforming loans   366.25 %   343.10 %   264.66 %   227.65 %   201.54 %
 Allowance for loan losses to total gross loans   1.83 %   1.96 %   2.01 %   2.28 %   2.27 %
                     
 
Stewardship Financial Corporation
Selected Consolidated Financial Information
(dollars in thousands, except per share amounts)
(unaudited)
                     
        For the three months ended   For the six months ended
    June 30, June 30,
        2015   2014   2015   2014
Selected Operating Data:                
  Interest income   $6,360    $6,186    $12,554    $12,331  
  Interest expense    842     810     1,635     1,649  
    Net interest and dividend income    5,518     5,376     10,919     10,682  
  Provision for loan losses    (600 )   -     (700 )   -  
  Net interest and dividend income                         
    after provision for loan losses    6,118     5,376     11,619     10,682  
  Noninterest income:                         
    Fees and service charges    557     504     1,036     925  
    Bank owned life insurance    101     106     197     202  
    Gain on calls and sales of securities    -     -     152     -  
    Gain on sales of mortgage loans    55     2     65     14  
    Loss on sales of loans    -     -     -     (241 )
    Gain on sales of other real estate owned    -     54     53     54  
    Other    169     141     297     252  
    Total noninterest income    882     807     1,800     1,206  
  Noninterest expenses:                         
    Salaries and employee benefits    2,688     2,557     5,396     5,235  
    Occupancy, net    423     520     890     1,075  
    Equipment    165     175     321     363  
    Data processing    459     435     912     822  
    FDIC insurance premium    117     133     230     344  
    Other    1,253     1,286     2,405     2,361  
    Total noninterest expenses    5,105     5,106     10,154     10,200  
Income before income tax expense    1,895     1,077     3,265     1,688  
Income tax expense    673     351     1,126     456  
Net income    1,222     726     2,139     1,232  
Dividends on preferred stock    171     171     342     342  
Net income available to common shareholders   $1,051    $555    $1,797    $890  
                              
Weighted avg. no. of diluted common shares    6,086,474     5,999,897     6,066,191     5,978,511  
Diluted earnings per common share   $0.17    $0.09    $0.30    $0.15  
                              
Return on average common equity    9.25 %   5.41 %   8.03 %   4.43 %
                              
Return on average assets    0.71 %   0.44 %   0.63 %   0.37 %
                              
Yield on average interest-earning assets    3.91 %   4.03 %   3.91 %   3.98 %
Cost of average interest-bearing liabilities    0.70 %   0.70 %   0.68 %   0.70 %
Net interest rate spread    3.21 %   3.33 %   3.23 %   3.28 %
                              
Net interest margin    3.40 %   3.51 %   3.40 %   3.45 %
                 
 
Stewardship Financial Corporation
Selected Consolidated Financial Information
(dollars in thousands, except per share amounts)
(unaudited)
                         
        For the three months ended
        June 30,   March 31,   December 31,   September 30,   June 30,
        2015   2015   2014   2014   2014
Selected Operating Data:                    
  Interest income   $6,360    $6,194    $6,534    $6,069    $6,186  
  Interest expense    842     793     767     791     810  
    Net interest and dividend income    5,518     5,401     5,767     5,278     5,376  
  Provision for loan losses    (600 )   (100 )   (300 )   250     -  
  Net interest and dividend income                               
    after provision for loan losses    6,118     5,501     6,067     5,028     5,376  
  Noninterest income:                               
    Fees and service charges    557     479     568     510     504  
    Bank owned life insurance    101     96     103     100     106  
    Gain on calls and sales of securities    -     152     165     -     -  
    Gain on sales of mortgage loans    55     10     26     32     2  
    Loss on sales of loans    -     -     -     -     -  
    Gain on sales of other real estate owned  -     53     9     -     54  
    Other    169     128     119     122     141  
    Total noninterest income    882     918     990     764     807  
  Noninterest expenses:                               
    Salaries and employee benefits    2,688     2,708     2,738     2,624     2,557  
    Occupancy, net    423     467     420     439     520  
    Equipment    165     156     157     167     175  
    Data processing    459     453     447     433     435  
    FDIC insurance premium    117     113     103     133     133  
    Other    1,253     1,152     1,179     1,193     1,286  
    Total noninterest expenses    5,105     5,049     5,044     4,989     5,106  
Income before income tax expense    1,895     1,370     2,013     803     1,077  
Income tax expense    673     453     712     251     351  
Net income    1,222     917     1,301     552     726  
Dividends on preferred stock    171     171     171     170     171  
Net income available to common shareholders   $1,051    $746    $1,130    $382    $555  
                                    
Weighted avg. no. of diluted common shares    6,086,474     6,045,683     6,030,561     6,026,848     5,999,897  
Diluted earnings per common share   $0.17    $0.12    $0.19    $0.06    $0.09  
                                    
Return on average common equity    9.25 %   6.77 %   10.41 %   3.58 %   5.41 %
                                    
Return on average assets    0.71 %   0.54 %   0.75 %   0.33 %   0.44 %
                                    
Yield on average interest-earning assets    3.91 %   3.90 %   4.04 %   3.85 %   4.03 %
Cost of average interest-bearing liabilities    0.70 %   0.67 %   0.64 %   0.68 %   0.70 %
Net interest rate spread    3.21 %   3.23 %   3.40 %   3.17 %   3.33 %
                                    
Net interest margin    3.40 %   3.41 %   3.57 %   3.36 %   3.51 %

Contact Information

  • Contact:
    Claire M. Chadwick
    EVP and Chief Financial Officer
    630 Godwin Avenue
    Midland Park, NJ 07432
    201-444-7100