MILLINGTON, N.J., Nov. 12, 2013 (GLOBE NEWSWIRE) -- MSB Financial Corp. (Nasdaq:MSBF) (the "Company"), the holding company for Millington Savings Bank (the "Bank"), reported net income of $248,000 for the three months ended September 30, 2013. This compares to a net loss of $92,000 for the quarter ended September 30, 2012. The increase was primarily due to a decrease in the provision for loan losses, offset by a corresponding increase in the income tax provision for the three months ended September 30, 2013 compared to the three months ended September 30, 2012.
Net interest income was $2.3 million for the quarter ended September 30, 2013 compared to $2.4 million for the quarter ended September 30, 2012. Total interest income decreased by $177,000 or 5.6% for the three months ended September 30, 2013 compared to the three months ended September 30, 2012 due to a 37 point decrease in the average rate on earning assets from 4.10% to 3.73%, offset by a $11.8 million increase in average balances thereon. Correspondingly, total interest expense decreased by $95,000 or 13.1% for the three months ended September 30, 2013 compared to the three months ended September 30, 2012, due to a 14 basis point reduction in the average cost of interest bearing liabilities from 1.02% to 0.88%, offset by a $2.8 million increase in average interest bearing balances. The interest rate spread for the September 30, 2013 quarter was 2.85%, compared to 3.08% for the quarter ended September 30, 2012.
The provision for loan losses was $150,000 during the quarter ended September 30, 2013, a decrease of $596,000 or 79.9% compared to the $746,000 provided during the quarter ended September 30, 2012. The Company's management reviews the level of the allowance for loan losses on a quarterly basis based on a variety of factors including, but not limited to, (1) the risk characteristics of the loan portfolio, (2) current economic conditions, (3) actual losses previously experienced, (4) the Company's level of loan growth and (5) the existing level of reserves for loan losses that are probable and estimable. The Company had $10.1 million in nonperforming loans as of September 30, 2013 compared to $16.2 million as of September 30, 2012. The significant reduction in nonperforming loan balances from the September 30, 2012 level was achieved primarily through active implementation of the Company's asset disposition strategy that was approved by the Company's Board of Directors in December of 2012. This strategy, which to date included activities such as short sales, cash for keys and deeds in lieu of foreclosure, was implemented in order to rapidly reduce the dollar amount of non-performing assets held by the Company. The Company's management team is actively engaged with borrowers and buyers to expedite this asset disposition strategy and will continue doing so until desired amount of non-performing assets has been removed from the Company's balance sheet. The allowance for loan losses to total loans ratio was 1.70% at September 30, 2013 compared to 1.17% at September 30, 2012, while the allowance for loan losses to non-performing loans ratio was 39.3% at September 30, 2013 compared to 17.7% at September 30, 2012. Non-performing loans to total loans and net charge-offs to average loans outstanding ratios were at 4.34% and 0.19%, respectively, at September 30, 2013 compared to 6.61% and 0.39% at September 30, 2012.
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