Stewardship Financial Corporation Announces Earnings For The First Quarter of 2018
10 Mayo 2018 - 3:05PM
Stewardship Financial Corporation (NASDAQ:SSFN), parent company of
Atlantic Stewardship Bank, announced net income for the three
months ended March 31, 2018 of $1.8 million, or $0.21 per share,
compared to $991,000, or $0.16 per share for the three months ended
March 31, 2017.
“We continue to strive to build on our past
success and remain committed to creating stronger momentum as the
year progresses,” stated Paul Van Ostenbridge, Stewardship
Financial Corporation’s President and Chief Executive Officer.
Operating ResultsNet interest
income and net interest margin were $6.8 million and 3.15% for the
first quarter of 2018 compared to $6.2 million and 3.23% for the
comparable period a year earlier. "Notwithstanding a tighter
margin, our reported net interest income reflected the benefit from
the increase in assets on a year-over-year basis," noted Van
Ostenbridge.
Results for the three months ended March 31,
2018 benefited from the Corporation recording a negative provision
for loan losses of $335,000 as compared to the positive $300,000
provision for loan losses for the three months ended March 31,
2017. The March 2018 reversal of a portion of the allowance
for loan losses is reflective of continued improvement in both the
Corporation's loss experience and overall economic conditions,
including the real estate climate in the Corporation's primary
business markets.
The Corporation reported noninterest income of
$725,000 for the three months ended March 31, 2018 compared to
$799,000 for the comparable prior year three-month period.
The three months ended March 31, 2018 included a negative $74,000
mark to market adjustment of a CRA investment which is classified
as an equity security. Such security has been owned for years
for CRA purposes, but under newly enacted accounting rules, equity
securities now require a quarterly mark to market through the
income statement. When comparing the current year period to
the prior year period, an increase in income from the purchase of
additional bank-owned life insurance in the second quarter of 2017
was generally offset by a decline in fees and service charges.
Total noninterest expenses were $5.4 million for
the three months ended March 31, 2018 compared to the $5.1 million
incurred in the prior year period. “The Corporation continues
to appropriately control expenses as the balance sheet grows,”
stated Van Ostenbridge. The largest increase in expense was
seen in salaries and employee benefits, which increased $265,000 in
the current quarter when compared to the three months ended March
31, 2017. In addition to normal salary increases, the
increase includes the costs associated with the establishment of a
Small Business Administration (SBA) Lending Department - fully
staffed with experienced employees. Costs associated with a
harsh winter in 2018 are reflected as an increase in occupancy
expenses.
The first quarter of 2018 results included the
impact of a reduction in the Federal corporate income tax rate from
35% to 21% as a result of the enactment of the Tax Cuts and Jobs
Act (“Tax Act”) in December 2017. For the current year period
the effective tax rate was 26.4% compared to an effective tax rate
of 36.7% for the three months ended March 31, 2017.
Balance Sheet / Financial
ConditionTotal assets at March 31, 2018 were $922.4
million compared to $928.8 million of assets at December 31,
2017. Growth in the loan portfolio from new originations was
offset by several large loan payoffs during the current
quarter. According to Van Ostenbridge, “Certain of the
payoffs during the quarter represented lower yielding loans and now
provides an opportunity to redeploy the assets into higher yielding
loans.”
Total deposits were $772.2 million at March 31,
2018, reflecting net growth of $8.1 million since December 31,
2017. The Corporation continues to experience growth in both
noninterest-bearing and interest-bearing deposits.
At March 31, 2018, the Corporation’s Tier 1
leverage ratio and total risk based capital ratio were 9.04% and
14.40%, respectively. These ratios are both significantly
above the respective 4.0% and 8% minimum levels required and result
in categorizing the Corporation as a “well capitalized” institution
under regulatory guidelines.
About Stewardship Financial
CorporationStewardship Financial Corporation’s subsidiary,
the Atlantic Stewardship Bank, has 12 banking offices in Midland
Park, Hawthorne, Montville, Morristown, 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 over $10.1 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, 2018 |
|
December 31, 2017 |
|
September 30, 2017 |
|
June 30, 2017 |
|
March 31, 2017 |
Selected
Financial Condition Data: |
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
$ |
22,178 |
|
|
$ |
21,270 |
|
|
$ |
17,213 |
|
|
$ |
19,459 |
|
|
$ |
12,793 |
|
Securities available for sale |
106,467 |
|
|
109,259 |
|
|
111,973 |
|
|
112,511 |
|
|
91,926 |
|
Securities held to maturity |
51,894 |
|
|
52,442 |
|
|
53,323 |
|
|
52,091 |
|
|
52,805 |
|
Other equity investments |
3,706 |
|
|
3,756 |
|
|
3,760 |
|
|
3,733 |
|
|
3,706 |
|
FHLB stock |
3,039 |
|
|
3,715 |
|
|
3,919 |
|
|
5,169 |
|
|
3,784 |
|
Loans held for sale |
— |
|
|
370 |
|
|
688 |
|
|
446 |
|
|
188 |
|
Loans receivable: |
|
|
|
|
|
|
|
|
|
Loans receivable, gross |
708,169 |
|
|
711,720 |
|
|
691,953 |
|
|
692,056 |
|
|
654,769 |
|
Allowance for loan losses |
(8,445 |
) |
|
(8,762 |
) |
|
(8,614 |
) |
|
(8,550 |
) |
|
(8,246 |
) |
Other, net |
(448 |
) |
|
(397 |
) |
|
(422 |
) |
|
(344 |
) |
|
(327 |
) |
Loans receivable, net |
699,276 |
|
|
702,561 |
|
|
682,917 |
|
|
683,162 |
|
|
646,196 |
|
Other real estate owned, net |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
401 |
|
Bank owned life insurance |
21,222 |
|
|
21,084 |
|
|
20,943 |
|
|
20,802 |
|
|
16,673 |
|
Other assets |
14,659 |
|
|
14,309 |
|
|
15,958 |
|
|
15,934 |
|
|
15,927 |
|
Total assets |
$ |
922,441 |
|
|
$ |
928,766 |
|
|
$ |
910,694 |
|
|
$ |
913,307 |
|
|
$ |
844,399 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest-bearing deposits |
$ |
178,572 |
|
|
$ |
172,861 |
|
|
$ |
171,609 |
|
|
$ |
177,678 |
|
|
$ |
170,566 |
|
Interest-bearing deposits |
593,644 |
|
|
591,238 |
|
|
569,352 |
|
|
543,215 |
|
|
530,138 |
|
Total deposits |
772,216 |
|
|
764,099 |
|
|
740,961 |
|
|
720,893 |
|
|
700,704 |
|
Other borrowings |
48,760 |
|
|
63,760 |
|
|
68,760 |
|
|
93,760 |
|
|
65,200 |
|
Subordinated debentures and |
|
|
|
|
|
|
|
|
|
subordinated notes |
23,333 |
|
|
23,317 |
|
|
23,301 |
|
|
23,284 |
|
|
23,268 |
|
Other liabilities |
3,760 |
|
|
3,925 |
|
|
3,564 |
|
|
2,859 |
|
|
2,810 |
|
Total liabilities |
848,069 |
|
|
855,101 |
|
|
836,586 |
|
|
840,796 |
|
|
791,982 |
|
Shareholders' equity |
74,372 |
|
|
73,665 |
|
|
74,108 |
|
|
72,511 |
|
|
52,417 |
|
Total liabilities and shareholders' equity |
$ |
922,441 |
|
|
$ |
928,766 |
|
|
$ |
910,694 |
|
|
$ |
913,307 |
|
|
$ |
844,399 |
|
|
|
|
|
|
|
|
|
|
|
Gross loans to deposits |
91.71 |
% |
|
93.14 |
% |
|
93.39 |
% |
|
96.00 |
% |
|
93.44 |
% |
|
|
|
|
|
|
|
|
|
|
Equity to assets |
8.06 |
% |
|
7.93 |
% |
|
8.14 |
% |
|
7.94 |
% |
|
6.21 |
% |
|
|
|
|
|
|
|
|
|
|
Book value per share |
$ |
8.57 |
|
|
$ |
8.51 |
|
|
$ |
8.57 |
|
|
$ |
8.39 |
|
|
$ |
8.55 |
|
|
|
|
|
|
|
|
|
|
|
Asset
Quality Data: |
|
|
|
|
|
|
|
|
|
Nonaccrual loans |
$ |
1,136 |
|
|
$ |
1,194 |
|
|
$ |
806 |
|
|
$ |
826 |
|
|
$ |
592 |
|
Loans past due 90 days or more and |
|
|
|
|
|
|
|
|
|
accruing |
— |
|
|
— |
|
|
— |
|
|
320 |
|
|
— |
|
Total nonperforming loans |
1,136 |
|
|
1,194 |
|
|
806 |
|
|
1,146 |
|
|
592 |
|
Other real estate owned |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
401 |
|
Total nonperforming assets |
$ |
1,136 |
|
|
$ |
1,194 |
|
|
$ |
806 |
|
|
$ |
1,146 |
|
|
$ |
993 |
|
|
|
|
|
|
|
|
|
|
|
Nonperforming loans to total loans |
0.16 |
% |
|
0.17 |
% |
|
0.12 |
% |
|
0.17 |
% |
|
0.09 |
% |
Nonperforming assets to total assets |
0.12 |
% |
|
0.13 |
% |
|
0.09 |
% |
|
0.13 |
% |
|
0.12 |
% |
Allowance for loan losses to total gross |
|
|
|
|
|
|
|
|
|
loans |
1.19 |
% |
|
1.23 |
% |
|
1.24 |
% |
|
1.24 |
% |
|
1.26 |
% |
Stewardship Financial Corporation |
Selected Consolidated Financial Information |
(dollars in thousands, except per share amounts) |
(unaudited) |
|
|
|
|
|
For the three months ended |
|
March 31, |
|
2018 |
|
2017 |
Selected
Operating Data: |
|
|
|
|
|
|
|
Interest income |
$ |
8,539 |
|
|
$ |
7,424 |
|
Interest expense |
1,716 |
|
|
1,244 |
|
Net interest income |
6,823 |
|
|
6,180 |
|
Provision for loan losses |
(335 |
) |
|
300 |
|
Net interest income after provision for loan losses |
7,158 |
|
|
5,880 |
|
Noninterest income: |
|
|
|
Fees and service charges |
507 |
|
|
535 |
|
Bank owned life insurance |
138 |
|
|
115 |
|
Gain on calls and sales of securities |
6 |
|
|
— |
|
Gain on sales of mortgage loans |
22 |
|
|
17 |
|
Miscellaneous |
52 |
|
|
132 |
|
Total noninterest income |
725 |
|
|
799 |
|
Noninterest expenses: |
|
|
|
Salaries and employee benefits |
3,109 |
|
|
2,844 |
|
Occupancy, net |
442 |
|
|
409 |
|
Equipment |
181 |
|
|
162 |
|
Data processing |
484 |
|
|
469 |
|
Advertising |
157 |
|
|
136 |
|
FDIC insurance premium |
64 |
|
|
77 |
|
Charitable contributions |
180 |
|
|
125 |
|
Bank-card related services |
127 |
|
|
142 |
|
Other real estate owned, net |
— |
|
|
15 |
|
Miscellaneous |
684 |
|
|
735 |
|
Total noninterest expenses |
5,428 |
|
|
5,114 |
|
Income
before income tax expense |
2,455 |
|
|
1,565 |
|
Income tax
expense |
647 |
|
|
574 |
|
Net
income |
$ |
1,808 |
|
|
$ |
991 |
|
|
|
|
|
Weighted
avg. no. of diluted common shares |
8,658,506 |
|
|
6,124,926 |
|
Diluted
earnings per common share |
$ |
0.21 |
|
|
$ |
0.16 |
|
|
|
|
|
Return on
average common equity |
9.92 |
% |
|
7.71 |
% |
|
|
|
|
Return on
average assets |
0.80 |
% |
|
0.49 |
% |
|
|
|
|
Yield on
average interest-earning assets |
3.94 |
% |
|
3.88 |
% |
Cost of
average interest-bearing liabilities |
1.04 |
% |
|
0.84 |
% |
Net
interest rate spread |
2.90 |
% |
|
3.04 |
% |
|
|
|
|
Net
interest margin |
3.15 |
% |
|
3.23 |
% |
Stewardship Financial Corporation |
Selected Consolidated Financial Information |
(dollars in thousands, except per share amounts) |
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
For the three months ended |
|
March 31, |
|
December 31, |
|
September 30, |
|
June 30, |
|
March 31, |
|
2018 |
|
2017 |
|
2017 |
|
2017 |
|
2017 |
Selected Operating
Data: |
|
|
|
|
|
|
|
|
|
Interest
income |
$ |
8,539 |
|
|
$ |
8,463 |
|
|
$ |
8,400 |
|
|
$ |
7,943 |
|
|
$ |
7,424 |
|
Interest
expense |
1,716 |
|
|
1,628 |
|
|
1,577 |
|
|
1,409 |
|
|
1,244 |
|
Net
interest income |
6,823 |
|
|
6,835 |
|
|
6,823 |
|
|
6,534 |
|
|
6,180 |
|
Provision
for loan losses |
(335 |
) |
|
75 |
|
|
20 |
|
|
260 |
|
|
300 |
|
Net
interest and dividend income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
after
provision for loan losses |
7,158 |
|
|
6,760 |
|
|
6,803 |
|
|
6,274 |
|
|
5,880 |
|
Noninterest income: |
|
|
|
|
|
|
|
|
|
Fees
and service charges |
507 |
|
|
533 |
|
|
524 |
|
|
519 |
|
|
535 |
|
Bank
owned life insurance |
138 |
|
|
141 |
|
|
141 |
|
|
129 |
|
|
115 |
|
Gain
on calls and sales of securities |
6 |
|
|
— |
|
|
1 |
|
|
— |
|
|
— |
|
Gain
on sales of mortgage loans |
22 |
|
|
55 |
|
|
68 |
|
|
38 |
|
|
17 |
|
Gain
on sales of other real estate owned |
— |
|
|
— |
|
|
— |
|
|
13 |
|
|
— |
|
Miscellaneous |
52 |
|
|
121 |
|
|
111 |
|
|
114 |
|
|
132 |
|
Total
noninterest income |
725 |
|
|
850 |
|
|
845 |
|
|
813 |
|
|
799 |
|
Noninterest expenses: |
|
|
|
|
|
|
|
|
|
Salaries and employee benefits |
3,109 |
|
|
2,888 |
|
|
2,843 |
|
|
2,880 |
|
|
2,844 |
|
Occupancy, net |
442 |
|
|
414 |
|
|
414 |
|
|
393 |
|
|
409 |
|
Equipment |
181 |
|
|
176 |
|
|
173 |
|
|
162 |
|
|
162 |
|
Data
processing |
484 |
|
|
442 |
|
|
444 |
|
|
456 |
|
|
469 |
|
Advertising |
157 |
|
|
171 |
|
|
182 |
|
|
211 |
|
|
136 |
|
FDIC
insurance premium |
64 |
|
|
86 |
|
|
50 |
|
|
109 |
|
|
77 |
|
Charitable contributions |
180 |
|
|
240 |
|
|
130 |
|
|
120 |
|
|
125 |
|
Bank-card related services |
127 |
|
|
130 |
|
|
137 |
|
|
142 |
|
|
142 |
|
Other
real estate owned, net |
— |
|
|
— |
|
|
— |
|
|
9 |
|
|
15 |
|
Miscellaneous |
684 |
|
|
521 |
|
|
663 |
|
|
601 |
|
|
735 |
|
Total
noninterest expenses |
5,428 |
|
|
5,068 |
|
|
5,036 |
|
|
5,083 |
|
|
5,114 |
|
Income before income
tax expense |
2,455 |
|
|
2,542 |
|
|
2,612 |
|
|
2,004 |
|
|
1,565 |
|
Income tax expense |
647 |
|
|
2,494 |
|
|
972 |
|
|
736 |
|
|
574 |
|
Net income |
$ |
1,808 |
|
|
$ |
48 |
|
|
$ |
1,640 |
|
|
$ |
1,268 |
|
|
$ |
991 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted avg. no. of
diluted common shares |
8,658,506 |
|
|
8,648,191 |
|
|
8,643,737 |
|
|
8,174,484 |
|
|
6,124,926 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
common share |
$ |
0.21 |
|
|
$ |
0.01 |
|
|
$ |
0.19 |
|
|
$ |
0.16 |
|
|
$ |
0.16 |
|
|
|
|
|
|
|
|
|
|
|
Return on average
common equity |
9.92 |
% |
|
0.26 |
% |
|
8.83 |
% |
|
7.37 |
% |
|
7.71 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on average
assets |
0.8 |
% |
|
0.02 |
% |
|
0.71 |
% |
|
0.58 |
% |
|
0.49 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Yield on average
interest-earning assets |
3.94 |
% |
|
3.82 |
% |
|
3.8 |
% |
|
3.81 |
% |
|
3.88 |
% |
Cost of average
interest-bearing liabilities |
1.04 |
% |
|
0.97 |
% |
|
0.94 |
% |
|
0.9 |
% |
|
0.84 |
% |
Net interest rate
spread |
2.9 |
% |
|
2.85 |
% |
|
2.86 |
% |
|
2.91 |
% |
|
3.04 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest
margin |
3.15 |
% |
|
3.09 |
% |
|
3.09 |
% |
|
3.14 |
% |
|
3.23 |
% |
Stewardship Financial Corporation |
Non-GAAP Reconciliation |
(dollars in thousands, except per share amounts) |
(unaudited) |
|
|
|
|
|
|
|
|
|
For the threemonths ended, |
|
|
December 31, 2017 |
|
|
|
Net
income |
|
$ |
48 |
|
|
Impact of
Tax Act |
|
1,420 |
|
Adjusted
net income |
|
$ |
1,468 |
|
|
|
|
|
|
Weighted
avg. no. of diluted common shares |
|
8,648,191 |
|
Adjusted
diluted earnings per common share |
|
$ |
0.17 |
|
|
|
|
|
|
Adjusted
return on average common equity |
|
7.82 |
% |
|
|
|
|
|
Adjusted
return on average assets |
|
0.63 |
% |
|
|
|
|
|
Contact:
Claire M. Chadwick
Executive Vice President and
Chief Financial Officer
630 Godwin Avenue
Midland Park, NJ 07432
P: 201.444.7100
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