SOURCE: Stewardship Financial Corporation

May 09, 2013 16:01 ET

Stewardship Financial Corporation Announces First Quarter of 2013 Earnings

MIDLAND PARK, NJ--(Marketwired - May 9, 2013) - Stewardship Financial Corporation (NASDAQ: SSFN), parent of Atlantic Stewardship Bank, announced net income for the three months ended March 31, 2013 of $822,000 as compared to net income of $776,000 for the three months ended March 31, 2012. After dividends on preferred stock, the net income available to the common stockholders was $656,000, or $0.11 per diluted common share, for the current 2013 period compared to $701,000, or $0.12 per diluted common share, for the comparable period of 2012.

Net interest income was $5.9 million in the first quarter of 2013 compared to $6.1 million a year earlier. "In this prolonged, low interest rate environment, the Corporation continues to monitor and manage all expenses in order to alleviate some of the pressure on our asset yields," said Paul Van Ostenbridge, Stewardship Financial Corporation's President and Chief Executive Officer.

The Corporation recorded a $1.6 million provision for loan losses for the three months ended March 31, 2013 compared to a provision for loan losses of $1.8 million for the three months ended March 31, 2012. Van Ostenbridge commented, "The 2013 provision for loan losses, while lower than the prior year, remains elevated as a result of the continued challenging economic environment and its impact on our borrowers."

Non-performing loans decreased to $17.5 million, or 3.97% of total loans at March 31, 2013, compared to $26.8 million, or 5.91% a year earlier and $18.2 million, or 4.14% at December 31, 2012. The ratio of allowance for loan losses to nonperforming loans increased to 65.67% at March 31, 2013, providing additional allowance coverage as compared to 48.83% at March 31, 2012 and 58.31% at December 31, 2012.

Addressing the Corporation's problem assets, Van Ostenbridge stated, "Over the last year we have seen a significant decline in our level of nonperforming loans. While problem loans continue to migrate through the lengthy workout phase, including a very slow New Jersey foreclosure process, we are encouraged by the recent progress."

The Corporation reported noninterest income of $1.5 million for the three months ended March 31, 2013 compared to $1.6 million for the equivalent prior year period. During the first quarter of 2013, noninterest income included $537,000 as a result of a death benefit insurance payment received. For the three months ended March 31, 2012 the Corporation realized a $433,000 gain from the sale of securities. Gain on sales of mortgage loans totaled $162,000 for the three months ended March 31, 2013, a decrease from $411,000 for the three months ended March 31, 2012, partially reflective of retaining a higher amount of mortgage loan originations for our portfolio.

Total noninterest expenses were $4.9 million for the three months ended March 31, 2013 -- comparable to the prior year period.

Total assets at March 31, 2013 were $693.9 million, representing a slight increase from assets of $688.4 million at December 31, 2012. Additional liquidity was provided by increases in cash and cash equivalents. Gross loans receivable increased $1.1 million from December 31, 2012, whereby new loans recorded were partially offset by payoffs and normal principal amortization.

Total deposits were $595.5 million at March 31, 2013, reflecting $5.3 million of deposit growth when compared to deposits of $590.3 million at December 31, 2012. The net growth in deposits during the first quarter of 2013 consisted of an $8.7 million increase in noninterest-bearing deposits and a $3.4 million decline in balances in interest-bearing accounts. At March 31, 2013 noninterest bearing deposits represented 22.3% of total deposits, up from 19.7% a year earlier.

Capital levels continue to significantly exceed the regulatory requirements for a "well capitalized" institution with a tier 1 leverage ratio of 9.27% and total risk based capital ratio of 15.08%.

Van Ostenbridge concluded, "While the substantial attention and resources devoted to addressing problem loans is showing results, we clearly recognize that there is more to accomplish. We are confident of our ability to implement appropriate loan work out strategies that improve asset quality and maximize loan repayments, supported by an appropriate level of loan loss reserves, coupled with a sound capital base."

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. To date, the Bank's tithe donations total $7.7 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, which forward looking statements 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,  
    2013     2012     2012  
                         
Selected Financial Condition Data:                        
  Cash and cash equivalents   $ 26,144     $ 21,016     $ 24,181  
  Securities available for sale     175,493       174,700       175,102  
  Securities held to maturity     28,548       29,718       36,353  
  FHLB Stock     2,213       2,213       2,266  
  Loans receivable:                        
   Loans receivable, gross     441,533       440,423       453,671  
   Allowance for loan losses     (11,512 )     (10,641 )     (13,097 )
   Other, net     62       50       62  
  Loans receivable, net     430,083       429,832       440,636  
                         
  Loans held for sale     2,101       784       1,395  
  Other assets     29,344       30,125       32,112  
  Total assets   $ 693,926     $ 688,388     $ 712,045  
                         
                         
  Noninterest-bearing deposits   $ 132,960     $ 124,286     $ 118,597  
  Interest-bearing deposits     462,578       465,968       483,486  
  Total deposits     595,538       590,254       602,083  
  Other borrowings     25,000       25,000       28,000  
  Securities sold under agreements to repurchase     7,344       7,343       14,342  
  Subordinated debentures     7,217       7,217       7,217  
  Other liabilities     2,152       2,228       2,348  
  Stockholders' equity     56,675       56,346       58,055  
  Total liabilities and stockholders' equity   $ 693,926     $ 688,388     $ 712,045  
                           
  Equity to assets     8.17 %     8.19 %     8.15 %
                         
Asset Quality Data:                        
  Nonaccrual loans   $ 17,479     $ 18,011     $ 26,823  
  Loans past due 90 days or more and accruing     50       237       -  
  Total nonperforming loans     17,529       18,248       26,823  
  Other real estate owned     876       1,058       3,840  
  Total nonperforming assets   $ 18,405     $ 19,306     $ 30,663  
                         
                         
  Nonperforming loans to total loans     3.97 %     4.14 %     5.91 %
  Nonperforming assets to total assets     2.65 %     2.80 %     4.31 %
  Allowance for loan losses to nonperforming loans     65.67 %     58.31 %     48.83 %
  Allowance for loan losses to total gross loans     2.61 %     2.42 %     2.89 %
                           
   
   
Stewardship Financial Corporation  
Selected Consolidated Financial Information  
(dollars in thousands, except per share amounts)  
(unaudited)  
   
    For the three months ended  
    March 31,  
    2013     2012  
Selected Operating Data:                
  Interest income   $ 6,870     $ 7,516  
  Interest expense     1,004       1,465  
    Net interest and dividend income     5,866       6,051  
  Provision for loan losses     1,600       1,765  
  Net interest and dividend income after provision for loan losses     4,266       4,286  
  Noninterest income:                
    Fees and service charges     456       515  
    Bank owned life insurance     76       80  
    Gain on calls and sales of securities     2       433  
    Gain on sales of mortgage loans     162       411  
    Gain on sales of other real estate owned     126       99  
    Gain on life insurance proceeds     537       -  
    Other     115       111  
    Total noninterest income     1,474       1,649  
  Noninterest expenses:                
    Salaries and employee benefits     2,696       2,386  
    Occupancy, net     517       487  
    Equipment     184       248  
    Data processing     328       334  
    FDIC insurance premium     150       148  
    Other     1,057       1,250  
    Total noninterest expenses     4,932       4,853  
  Income before income tax expense (benefit)     808       1,082  
  Income tax expense (benefit)     (14 )     306  
  Net income     822       776  
  Dividends on preferred stock     166       75  
  Net income available to common stockholders   $ 656     $ 701  
                 
  Weighted avg. no. of diluted common shares     5,930,981       5,892,366  
  Diluted earnings per common share   $ 0.11     $ 0.12  
                   
  Return on average common equity     6.39 %     6.47 %
                   
  Return on average assets     0.49 %     0.44 %
                   
  Yield on average interest-earning assets     4.39 %     4.59 %
  Cost of average interest-bearing liabilities     0.82 %     1.11 %
  Net interest rate spread     3.57 %     3.48 %
                   
  Net interest margin     3.76 %     3.71 %
                 

Contact Information

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