Midland Park, NJ--(Marketwire - May 2, 2011) - Stewardship Financial Corporation (NASDAQ: SSFN), parent of Atlantic Stewardship Bank, announced today results for the
first quarter ended March 31, 2011. Net income for the three months ended
March 31, 2011 was $483,000, or $0.06 per diluted common share, as compared
to net income of $871,000, or $0.13 per diluted common share, for the three
months ended March 31, 2010. After dividends on preferred stock and
accretion, the net income available to the common stockholders was $345,000
for 2011 compared to $734,000 for 2010.
"We are pleased to report the Corporation was profitable during the first
quarter of 2011 despite the effect of the extended economic downturn," said
Paul Van Ostenbridge, Stewardship Financial Corporation's President and
Chief Executive Officer.
Net interest income was $5.9 million in the first quarter of 2011 compared
to $6.2 million a year earlier. For the three months ended March 31, 2011,
the net interest spread and margin was 3.59% and 3.84%, respectively, which
represents a decline from the 3.74% and 4.08%, respectively, reported for
the three months ended March 31, 2010. The current period yield on earning
assets of 4.99%, compared to an earning asset yield of 5.58% for the three
months ended March 31, 2010, reflects the effect of a prolonged low
interest rate environment as well as the impact of nonaccrual loans. The
cost of interest-bearing liabilities declined to 1.40% for the three months
ended March 31, 2011 as compared to 1.84% reported for the same prior year
period.
The Corporation recorded a $1.675 million provision for loan losses for the
three months ended March 31, 2011 compared to a provision for loan losses
of $1.550 million for the March 2010 period. The total allowance for loan
losses increased to 2.15% of total loans from a comparable ratio of 1.88%
at December 31, 2010 and 1.77% at March 31, 2010.
Commenting on the Corporation's loan loss provision, Van Ostenbridge
stated, "Negative economic trends persist and while we are reporting a rise
in level of nonperforming loans in the first quarter of 2011, we are
aggressively addressing all the problem loans." Nonperforming loans
increased to $24.1 million, or 5.25% of total loans at March 31, 2011,
compared to $22.6 million, or 5.01% at December 31, 2010. Van Ostenbridge
continued, "As our problem loan portfolio migrates through the workout
process, we continue to implement loan workout strategies to improve asset
quality and maximize loan repayments. While our total nonperforming assets
remain at elevated levels, improvement in this area continues to be our top
priority as we believe these efforts will be key drivers in improving
Stewardship Financial Corporation's future profitability. We have engaged
outside workout consultants in addition to bringing on new experienced
associates to help us achieve this goal."
The Corporation reported noninterest income of $1.1 million for the three
months ended March 31, 2011 compared to $1.0 million for the equivalent
prior year period. Noninterest income for the current year period reflects
$404,000 of gains on sales of mortgage loans compared to $55,000 of such
gains for the three months ended March 31, 2010. While the Corporation did
not have investment sales in the 2011 period, during the first quarter of
2010, the Corporation realized a $328,000 gain on sale of securities. In
addition, 2011 noninterest income included increased fees and service
charges when compared to the same period last year.
Noninterest expenses for the three months ended March 31, 2011 were $4.7
million as compared to $4.4 million in the comparable prior year period.
The noninterest expenses include the costs, such as legal and other
collection related expenses, incurred in connection with the managing of
nonperforming assets.
Total assets at March 31, 2011 reached $700.9 million, representing a $12.8
million increase from assets of $688.1 million at December 31, 2010.
Increases in cash and cash equivalents as well as securities reflect
planned additional liquidity. Gross loans receivable increased $7.6
million from December 31, 2010, reflecting a positive trend of increasing
loan demand.
Total deposits were $591.5 million at March 31, 2011, reflecting $15.9
million of continued strong deposit growth when compared to deposits of
$575.6 million at December 31, 2010. The overall 2.8% growth in deposits
during the first quarter of 2011 consisted of $2.1 million of
interest-bearing and $13.8 million of non-interest-bearing accounts.
Capital levels continue to exceed the regulatory requirements for a "well
capitalized" institution with a tier 1 leverage ratio of 8.65% and total
risk based capital ratio of 13.47%.
Van Ostenbridge summarized, "We are devoting substantial attention to
reducing our nonperforming loans, utilizing both internal and external
resources to execute our workout strategies. Historically low interest
rates and general economic conditions within our markets continue to
pressure earnings. Nevertheless, we are operating from a position of
strength with strong liquidity and a solid capital base. We continue to
focus on new loan growth funded by our sound development of core deposits.
This deposit driven growth will form the foundation of our future growth
and profitability."
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 is currently
celebrating its twenty-fifth year of operation. To date, the Bank's total
tithe donations exceed $7.3 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)
March 31, December 31, March 31,
2011 2010 2010
------------ ------------ ------------
Selected Financial Condition Data:
Cash and cash equivalents $ 29,661 $ 19,983 $ 12,196
Securities available for sale 148,178 138,628 93,926
Securities held to maturity 42,460 45,394 70,758
FHLB Stock 2,361 2,497 2,390
Loans receivable:
Loans receivable, gross 459,508 451,867 461,877
Allowance for loan losses (9,874) (8,490) (8,174)
Other, net (86) (132) (422)
------------ ------------ ------------
Loans receivable, net 449,548 443,245 453,281
Loans held for sale 827 9,818 2,724
Other assets 27,900 28,553 26,951
------------ ------------ ------------
Total assets $ 700,935 $ 688,118 $ 662,226
============ ============ ============
Total deposits $ 591,509 $ 575,603 $ 542,930
Other borrowings 33,000 36,000 36,000
Subordinated debentures 7,217 7,217 7,217
Securities sold under
agreements to repurchase 14,643 14,642 15,399
Other liabilities 2,340 2,524 6,677
Stockholders' equity 52,226 52,132 54,003
------------ ------------ ------------
Total liabilities and
stockholders' equity $ 700,935 $ 688,118 $ 662,226
============ ============ ============
Book value per common share $ 7.25 $ 7.24 $ 7.57
Equity to assets 7.45% 7.58% 8.15%
Asset Quality Data:
Nonaccrual loans $ 24,010 $ 22,500 $ 19,525
Loans past due 90 days or
more and accruing - - -
Restructured loans 120 130 2,775
------------ ------------ ------------
Total nonperforming loans 24,130 22,630 22,300
Other real estate owned 313 615 -
------------ ------------ ------------
Total nonperforming assets $ 24,443 $ 23,245 $ 22,300
============ ============ ============
Non-performing loans to
total loans 5.25% 5.01% 4.83%
Non-performing assets to
total assets 3.49% 3.38% 3.37%
Allowance for loan losses to
nonperforming loans 40.92% 37.52% 36.65%
Allowance for loan losses to
total gross loans 2.15% 1.88% 1.77%
Stewardship Financial Corporation
Selected Consolidated Financial Information
(dollars in thousands, except per share amounts)
For the three months ended
March 31, March 31,
------------ ------------
2011 2010
------------ ------------
Selected Operating Data:
Interest income $ 7,775 $ 8,495
Interest expense 1,826 2,316
------------ ------------
Net interest and dividend income 5,949 6,179
Provision for loan losses 1,675 1,550
------------ ------------
Net interest and dividend income
after provision for loan losses 4,274 4,629
Non-interest income:
Fees and service charges 511 469
Bank owned life insurance 80 86
Gain on sales of mortgage loans 404 55
Gain on calls and sales of securities - 328
Other 89 73
------------ ------------
Total noninterest income 1,084 1,011
Non-interest expenses:
Salaries and employee benefits 2,236 2,126
Occupancy, net 545 489
Equipment 258 309
Data processing 337 325
FDIC insurance premium 254 224
Charitable contributions 100 165
Other 954 786
------------ ------------
Total noninterest expenses 4,684 4,424
------------ ------------
Income before income taxes 674 1,216
Income tax expense 191 345
------------ ------------
Net income 483 871
Dividends on preferred stock and accretion 138 137
------------ ------------
Net income available to common stockholders $ 345 $ 734
============ ============
Weighted avg. no. of diluted common shares 5,849,723 5,841,633
Diluted earnings per common share $ 0.06 $ 0.13
Return on average common equity 3.28% 6.68%
Return on average assets 0.29% 0.54%
Yield on average interest-earning assets 4.99% 5.58%
Cost of average interest-bearing liabilities 1.40% 1.84%
------------ ------------
Net interest rate spread 3.59% 3.74%
============ ============
Net interest margin 3.84% 4.08%