MILLINGTON, N.J., Nov. 1, 2010 (GLOBE NEWSWIRE) -- MSB Financial Corp. (Nasdaq:MSBF) (the "Company"), the holding company for Millington Savings Bank (the "Bank"), reported net income of $215,000 for the three months ended September 30, 2010. This compares to net income of $194,000 for the quarter ended September 30, 2009. The increase was due to increases in net interest income and non-interest income offset by increases in non-interest expense, income tax provision and the provision for loan losses.
Net interest income for the quarter ended September 30, 2010 was $2.7 million, as compared to $2.5 million for the quarter ended September 30, 2009, with the increase primarily due to a reduction in interest expense attributed to a reduction in average cost of funds. The interest rate spread for the September 30, 2010 quarter was 3.28%, compared to 2.82% for the quarter ended September 2009. The average yield on interest earning assets for the September 2010 quarter was 4.84% compared to 5.14% for the quarter ended September 2009. The average cost of interest bearing liabilities for the September 30, 2010 quarter was 1.56% compared to 2.32% for the quarter ended September 2009.
The provision for loan losses was $475,000 during the quarter ended September 30, 2010, an increase over the $345,000 provided during the quarter ended September 30, 2009. The Bank's management reviews the level of the allowance for loan losses on a quarterly basis and establishes the provision for loan losses based upon the volume and types of lending, delinquency levels, loss experience, the amount of impaired and classified loans, economic conditions and other factors related to the collectability of the loan portfolio. The significant increase in the provision during the current period was primarily due to higher delinquency levels and economic conditions. The Bank had $15.7 million in nonperforming loans as of September 30, 2010 compared to $11.8 million as of September 30, 2009.