SOURCE: Stewardship Financial Corporation

February 26, 2007 14:53 ET

Stewardship Financial Corporation Reports Record Earnings for Year Ending December 31, 2006

MIDLAND PARK, NJ -- (MARKET WIRE) -- February 26, 2007 -- Stewardship Financial Corporation (OTCBB: SSFN), parent company of Atlantic Stewardship Bank, announced today net income earned for the year ended December 31, 2006, of $4.75 million, or $0.95 basic net income per share, an increase of 6.1% and 5.6% in net income and basic net income per share, respectively, as compared to net income of $4.48 million, or $0.90 per share for the year ended December 31, 2005.

Diluted income per share was $0.94 for the year ended December 31, 2006, an increase of 5.6% over the diluted income per share of $0.89 for the year ended December 31, 2005.

Net income for the quarter ended December 31, 2006, increased by 6.3% to $1.25 million from $1.18 million for the same three-month period in 2005. Basic and diluted earnings per share for the quarter ended December 31, 2006, were $0.25 compared to $0.24 and $0.23, respectively, for the same period in 2005.

During the quarter ended December 31, 2006, Atlantic Stewardship Bank successfully completed the sale of its $3.4 million credit card portfolio to Elan Financial Services ("Elan"), a national credit card issuer. Under the purchase agreement, Elan will issue credit cards under the name of Atlantic Stewardship Bank and will provide customers with a choice selection of credit card products. As part of our overall strategy to improve income and overall efficiency of our lending area, the sale provides an opportunity to redirect resources to more profitable lending areas while continuing to provide our customers with strong credit card products through Elan. The Corporation also completed a sale of $17.3 million of available for sale securities that were yielding less than 5 percent. The proceeds of the sale were used to purchase higher yielding securities and to fund loan growth that should reduce exposure to future interest rate risk and enhance long-term financial performance. The gain from the sale of the credit card portfolio and the loss from the sale of the securities had a net impact of increasing basic and fully diluted earnings per share by $0.03 for the year ended December 31, 2006.

Net income per share data has been restated to reflect a 4 for 3 stock split issued in July 2005, and a 5% stock dividend paid in November 2006 and 2005.

Paul Van Ostenbridge, President and Chief Executive Officer of both Stewardship Financial Corporation and Atlantic Stewardship Bank, stated, "We are excited to report our strongest earnings ever for the year ending December 31, 2006. Considering the pressure on net interest margins and the competitive deposit and loan pricing environment, we are pleased with the success of our organization."

Stewardship Financial Corporation's total assets reached $519.7 million at December 31, 2006, compared to $482.7 million at December 31, 2005, for a growth of 7.7%. Total loans increased $23.7 million, or 6.9% from $345.8 million at December 31, 2005 to $369.5 million at December 31, 2006. Total deposits were $434.2 million at December 31, 2006, compared to $403.5 million a year ago, for an increase of 7.6%. Total stockholders' equity increased 11.7% to $37.3 million at December 31, 2006, compared to $33.4 million a year ago.

Stewardship Financial Corporation is the parent company for Atlantic Stewardship Bank, which has banking offices in Midland Park, two branches in Hawthorne, Montville, Pequannock, Ridgewood, Waldwick and three branches in Wayne, New Jersey. The Bank will open its eleventh branch in Wyckoff in March 2007 and is seeking approvals on its twelfth branch in Westwood. Atlantic Stewardship Bank, opened in 1985, is a community bank serving individuals and businesses, and is well known for tithing ten percent of its pre-tax profits to Christian and local charitable organizations.

Visit our website at www.asbnow.com or call 201-444-7100 for further information regarding our products and services.

This 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
                           Financial Highlights
                                (unaudited)
                  (In thousands, except per share data)



                                       Year Ended       Three Months Ended
                                       December 31,        December 31,

                                      2006      2005      2006      2005
                                    --------  --------- --------  ---------
Selected Operating Data:
Total interest income               $ 30,000  $  24,900 $  7,889  $   6,724
Total interest expense                10,916      6,689    3,109      2,008
                                    --------  --------- --------  ---------
Net interest income before
 provision for loan loss              19,084     18,211    4,780      4,716
Provision for loan loss                  264        600       14        150
                                    --------  --------- --------  ---------
Net interest income after provision
 for loan loss                        18,820     17,611    4,766      4,566

Gain on sale of credit card
 portfolio                               746          -      746          -
Loss on sales of securities             (435)         -     (435)         -
Other noninterest income               3,878      3,240      993        841
                                    --------  --------- --------  ---------
Noninterest income                     4,189      3,240    1,304        841

Noninterest expense                   15,629     13,867    4,120      3,549
                                    --------  --------- --------  ---------
Income before income tax expense       7,380      6,984    1,950      1,858
Income tax expense                     2,627      2,504      698        680
                                    --------  --------- --------  ---------
Net income                          $  4,753  $   4,480 $  1,252  $   1,178
                                    ========  ========= ========  =========

Basic earnings per share            $   0.95  $    0.90 $   0.25  $    0.24
Diluted earnings per share          $   0.94  $    0.89 $   0.25  $    0.23




                                                    At December 31,
                                                  2006           2005
                                              -------------  -------------
Selected Financial Data:
Total assets                                  $     519,749  $     482,727
Total loans, net of deferred loan fees              369,544        345,823
Allowance for loan losses                             4,101          3,847
Total deposits                                      434,223        403,466
Stockholders' equity                                 37,306         33,384


                                                At or for the year ended
                                                     December  31,
                                                  2006           2005
                                              -------------  -------------
Selected Financial Ratios:
Annualized return on average assets (ROA)              0.96%          1.00%
Annualized return on average equity (ROE)             13.41%         13.86%
Tier 1 capital to total assets                         8.53%          8.37%
Book value per share                          $        7.43  $        6.70



All share data has been restated to include the effect of a 4 for 3 stock
 split issued July 1, 2005 and a 5% stock dividend issued November 15, 2006
 and 2005.

Contact Information

  • Contact:
    Mary Beth Steiginga
    Assistant Secretary
    630 Godwin Avenue
    Midland Park, NJ 07432
    201-444-7100