MSB Financial Corp. Releases Fourth Quarter Earnings

MILLINGTON, N.J., Feb. 12, 2016 (GLOBE NEWSWIRE) -- MSB Financial Corp. (NASDAQ:MSBF) (the "Company") parent company of Millington Bank, reported today the results of its operations for the three and twelve months ended December 31, 2015. The results of operations reflect the results of operations of MSB Financial Corp., a federal corporation ("Old MSB") which was merged with and into the Company on July 16, 2015 upon completion of the second-step conversion transaction.

The Company reported net income of $2,000 for the three months ended December 31, 2015, compared to a net loss of $9,000 for the three months ended December 31, 2014. Net income for the twelve months ended December 31, 2015 was $443,000 compared to net income of $707,000 for the twelve months ended December 31, 2014. Net income for the quarter and the full year 2015 reflect the impact of $457,000 of charges related to the conversion from the Company's existing core data processor as previously disclosed. In addition, the Company recorded expense of approximately $60,000 related to the conversion from its current website provider.

Net income per diluted common share was zero for both the three months ended December 31, 2015 and December 31, 2014. Net income per diluted common share was $0.08 for the twelve months ended December 31, 2015 compared to $0.13 for the twelve months ended December 31, 2014.

Total assets were $375.7 million at December 31, 2015, compared to $340.3 million at December 31, 2014, an increase of $35.4 million or 10.4%. On July 16, 2015, the Company sold 3,766,592 shares of its common stock (including 150,663 shares sold to the Bank's employee stock ownership plan) at $10.00 per share, for gross proceeds of approximately $37.7 million. In addition, 2,187,242 shares were issued to former holders of the common stock of Old MSB (other than the MHC) in exchange for such shares at a per share exchange ratio of 1.1397 with cash paid in lieu of fractional shares. During 2015, the Company experienced growth of $30.9 million or 13.3%, in loans receivable, net. Commercial and multi-family real estate loans had the most growth during 2015 as the Company continues to diversify its loan portfolio.

The following table summarizes loan balances and composition at December 31, 2015 and 2014:

  At     At  
December 31,   December 31,  
(In thousands) 2015     2014  
                       
Residential mortgage:                      
One-to-four family $ 154,624     57.1 %   $ 144,966     61.2 %
Home equity   35,002     12.9       36,847     15.6  
                       
Total residential mortgage   189,626     70.0       181,813   76.7  
                       
Commercial and multi-family real estate   59,642     22.0       31,637     13.4  
Construction   10,895     4.0       12,651     5.3  
Commercial and industrial   10,275     3.8       9,663     4.1  
                       
Total commercial loans   80,812   29.8       53,951   22.8  
                       
Consumer loans   493     0.2       1,152     0.5  
                       
Total loans receivable   270,931    100.0 %     236,916    100.0 %
                       
Less:                      
Loans in process   4,600           1,499      
Deferred loan fees   417           334      
Allowance   3,602           3,634      
                       
Total loans receivable, net $ 262,312         $ 231,449      
                       

Other real estate owned (OREO) was reduced to zero as of December 31, 2015 compared to $1.3 million at December 31, 2014. 

Total deposits at December 31, 2015 were $262.6 million compared with $266.1 million at December 31, 2014. Overall, deposits decreased by $3.5 million; however, non-interest-bearing balances increased by $3.3 million while interest-bearing deposits declined $6.8 million year-over-year as the Company focused on deposit pricing and the development of deeper customer relationships. Within non-interest-bearing accounts, growth was experienced in business checking accounts. Savings and club account growth combined to offset some of the decrease in certificates of deposit during the quarter.

"The year 2015 was a transformative one for the organization. During the course of the year the Company undertook several significant transformations beginning with the adoption of a December fiscal year end, the expansion of an experienced management team and the successful completion of the Company's stock offering and transition to a fully publicly held institution", stated Michael A. Shriner, President and Chief Executive Officer. "Our staff is working diligently on a core system conversion that is expected to provide a more efficient and effective delivery system for our products and services to position us in the proper direction toward achieving our goal of becoming a high performing organization. Additionally, our transition to a managed IT function has provided for a stronger infrastructure and has assisted us greatly in managing the increasing risk of cybersecurity."

Mr. Shriner added, "During 2015, our efforts related to loan production were substantial as well as our management of nonperforming assets indicated by the lack of OREO properties at December 31, 2015. Non-performing loans to total loans were 2.29% at December 31, 2015 compared to 2.57% at December 31, 2014.

"We are pleased to welcome two new experienced directors to our boards this quarter. Together with the board, Millington Bank and its employees are driven to deliver on the Vision that has been defined with Integrity and Passion," Mr. Shriner concluded.

Forward Looking Statement Disclaimer

The foregoing release may contain forward-looking statements concerning the financial condition, results of operations and business of the Company. We caution that such statements are subject to a number of uncertainties and actual results could differ materially, and, therefore, readers should not place undue reliance on any forward-looking statements. Factors that may cause actual results to differ from those contemplated include our continued ability to grow the loan portfolio, the successful conversion of our core system and our continued ability to manage cybersecurity risks.
MSB FINANCIAL CORP    
(In Thousands, except for per share amount) (Unaudited)  
Statement of Financial Condition Data: 12/31/2015 12/31/2014
Total assets $ 375,690   $ 340,252  
     
Cash and cash equivalents   12,303     7,519  
     
Loans receivable, net   262,312     231,449  
     
Securities held to maturity   78,995     78,518  
     
Deposits   262,598     266,068  
     
Federal Home Loan Bank advances   32,675     30,000  
     
Total stockholders' equity   76,363     41,025  
     
Stock Information:    
Number of shares of common stock outstanding   5,954     5,010  
Book value per share of common stock* $ 12.83   $ 8.19  
Closing market price $ 12.50   $ 8.99  
     
*In in previous quarters, the unallocated shares of ESOP reduced the number of shares used for the calculation and to be consistent with industry releases we have adjusted our calculation to conform and make the date comparable to others within our industry.

Summary of Operations: (In Thousands, except for per share amounts) (Unaudited)For the three months ended December 31, (Unaudited)For the twelve months ended December 31,
  2015     2014     2015     2014  
Total interest income $ 3,123   $ 2,981   $ 12,206   $ 11,990  
         
Total interest expense   522     582     2,156     2,346  
         
Net interest income   2,601     2,399     10,050     9,644  
         
Provision for loan losses   90     -     113     400  
         
Net interest income after provision for loan losses   2,511     2,399     9,937     9,244  
         
Non-interest income   210     162     714     685  
         
Non-interest expense   2,724     2,628     10,024     8,878  
         
(Loss) income before taxes   (3 )   (67 )   627     1,051  
         
Income tax (benefit) expense   (5 )   (58 )   184     344  
         
Net income $ 2   $ (9 ) $ 443   $ 707  
         
Net income per common share - basic    -     -     0.08     0.13  
Net income per common share - diluted   -     -     0.08     0.13  
         
Weighted average number of shares - basic   5,737     5,632     5,685     5,625  
Weighted average number of shares - diluted   5,786     5,632     5,717     5,625  
         
Performance Ratios:        
Return on average assets annualized   0.00 %   (0.01 )%   0.12 %     0.21 %
Return on average common equity annualized   0.01 %   (0.09 )%   0.79 %     1.73 %
Net interest margin   2.96 %   3.02 %   2.95 %   3.00 %
Efficiency ratio   96.91 %   102.62 %   93.13 %   85.95 %
Operating expenses / average assets annualized   2.92 %     3.08 %    2.77 %    2.58 %
         

  For the three months ended
  12/31/15 12/31/14
Average Balance Sheet (In Thousands) Average Balance Interest Income/Expense Yield Average Balance Interest Income/Expense Yield
Interest-earning assets:            
Loans Receivable $ 261,090   $ 2,660     4.08 % $ 234,772   $ 2,537     4.32 %
Securities held to maturity   79,112     438       2.21     79,750     423      2.12  
Other interest-earning assets   11,490     25       0.87     3,056     21      2.75   
Total interest-earning assets   351,692     3,123       3.55     317,578     2,981       3.75  
Allowance for Loan Loss     (3,631 )         (3,523 )    
Non-interest-earning assets     24,961           27,719      
Total non-interest-earning assets     21,330          24,196      
Total Assets $  373,022       $ 341,774      
             
Interest-bearing liabilities:            
NOW & Money Market $   44,789   $ 19     0.17 % $   42,367   $   16     0.15 %
Savings and club deposits   102,156     58      0.23     99,938       55      0.22  
Certificates of deposit   82,741     241      1.17       95,985       318      1.33  
Total interest-bearing deposits   229,686     318      0.55     238,290       389      0.65  
             
Federal Home Loan Bank advances   32,675     204      2.50     30,870       193      2.50  
Total interest-bearing liabilities   262,361     522      0.80      269,160       582      0.86  
             
Non-interest-bearing deposit   30,462         28,413      
Other non-interest-bearing liabilities   3,504          2,858      
Total Liabilities   296,327         300,431      
             
Equity   76,695         41,343      
Total Liabilities and Equity $ 373,022       $ 341,774      
             
Net Interest Spread     2,601      2.75 %     2,399      2.89 %
             
Net Interest Margin       2.96 %       3.02 %
             
Ratio of Interest Earning Assets to Interest Bearing Liabilities   134.05 %       117.99 %    
             

  For the twelve months ended
  12/31/15 12/31/14
Average Balance Sheet (In Thousands) Average Balance Interest Income/Expense Yield Average Balance Interest Income/Expense Yield
Interest-earning assets:            
Loans Receivable $ 247,997   $ 10,376     4.18 % $ 234,619   $ 10,095     4.30 %
Securities held to maturity   79,868     1,726      2.16     83,338     1,807      2.17  
Other interest-earning assets   12,880     104      0.81     3,428     88      2.57   
Total interest-earning assets   340,745     12,206     3.58     321,385     11,990     3.73  
Allowance for Loan Loss     (3,593 )         (3,645 )    
Non-interest-earning assets     25,066           26,842      
Total non-interest-earning assets     21,473          23,197      
Total Assets $  362,218       $ 344,582      
             
Interest-bearing liabilities:            
NOW & Money Market $   46,493   $ 75     0.16 % $   41,217   $   57     0.14 %
Savings and club deposits   101,106     223      0.22     103,345       223      0.22  
Certificates of deposit   86,948     1,064      1.22       97,640       1.291      1.32  
Total interest-bearing deposits   234,547     1,362      0.58     242,202       1,571      0.65  
             
Federal Home Loan Bank advances   34,087     794      2.33     33,865       775      2.29  
Total interest-bearing liabilities   268,634     2,156      0.80      276,067       2,346      0.85  
             
Non-interest-bearing deposit   34,248         24,698      
Other non-interest-bearing liabilities   3,135          2,959      
Total Liabilities   306,017         303,724      
             
Equity   56,201         40,858      
Total Liabilities and Equity $ 362,218       $ 344,582      
             
Net Interest Spread     10,050      2.78 %     9,644      2.88 %
             
Net Interest Margin       2.95 %       3.00 %
             
Ratio of Interest Earning Assets to Interest Bearing Liabilities   126.84 %       116.42 %    
             

 
Contact:	Michael A. Shriner, President & CEO(908) 647-4000mshriner@millingtonbank.com

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