MILLINGTON, N.J., Jan. 31, 2017 (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, 2016.

The Company reported net income of $478,000, or $0.09 per diluted common share for the three months ended December 31, 2016, compared to $2,000, or zero per diluted common share for the three months ended December 31, 2015. Net income for the full 2016 year was $1.2 million, or $0.20 per diluted common share compared to net income of $443,000, or $0.08 per diluted common share for the full year of 2015.

Highlights for the full year 2016:
  • Net interest margin improved 18 basis points to 3.13% from 2015
  • Loan growth was 40.3% year over year driven by commercial real estate and commercial lending
  • Deposit growth was $99.7 million or 38% during the year
  • Efficiency ratio improved from 93.13% to 79.90% driven by an increase in net interest income year over year

Growth in net interest income and margin reflect growth in commercial loansNet interest income grew $1.9 million or 19.0% to $12.0 million for the year ended December 31, 2016 compared to $10.1 million for the year ended December 31, 2015. Net interest margin for the year ended December 31, 2016 was 3.13%, an improvement of 18 basis points, compared to 2.95% for the year ended December 31, 2015. Net interest income and net interest margin both increased primarily due to the Company's loan growth in the commercial real estate and commercial loan portfolios.

Strong organic loan growth year over yearAt December 31, 2016, the Company's net loan portfolio totaled $368.0 million, an increase of $105.7 million, or 40.3%, compared to $262.3 million at December 31, 2015.  Included in this increase was $67.4 million in organic loan growth and $38.3 million in purchased and participation loans. These loans consisted of $34.7 million in commercial real estate loans and $3.6 million in one-to-four family residential mortgages. The commercial and multi-family real estate loan segment had significant growth during the year as the Company continues to focus on building commercial relationships and further diversifying its loan portfolio.

The following table summarizes loan balances and composition at December 31, 2016 and December 31, 2015:
           
  At     At  
December 31,   December 31,  
(In thousands) 2016     2015  
                       
Residential mortgage:                      
One-to-four family $ 160,534   42.3 %   $ 154,624   57.1 %
Home equity   32,262   8.5       35,002   12.9  
                       
Total residential mortgage   192,796   50.8       189,626   70.0  
                       
Commercial and multi-family real estate   124,656   32.8       59,642   22.0  
Construction   16,554   4.4       10,895   4.0  
Commercial and industrial   45,246   11.9       10,275   3.8  
                       
Total commercial loans   186,456   49.1       80,812   29.8  
.                      
Consumer loans   446   0.1       493   0.2  
                       
Total loans receivable   379,698   100.0 %     270,931   100.0 %
                       
Less:                      
Loans in process   6,557           4,600      
Deferred loan fees   658           417      
Allowance   4,476           3,602      
                       
Total loans receivable, net $ 368,007         $ 262,312      
                       

Deposit growth attributable to stronger business relationshipsTotal deposits at December 31, 2016 were $362.3 million compared with $262.6 million at December 31, 2015.  Overall, deposits increased by $99.7 million, or 38.0% with most of the growth occurring in interest demand deposits, which increased $58.0 million or 138.4%. Noninterest demand deposits also increased $16.2 million, or 57.5%. Most of the growth in these two categories continues to be attributable to developing stronger relationships with our commercial and small business customers.

The following table summarizes deposit balances and composition at December 31, 2016 and December 31, 2015:
             
    At     At  
(Dollars in thousands)   December 31, 2016     December 31, 2015  
                     
Noninterest demand   $ 44,365   12.25 %   $ 28,173   10.73 %
Interest demand     99,879   27.57       41,893   15.95  
Savings     103,163   28.47       102,196   38.92  
Money Market     11,265   3.11       4,928   1.88  
                     
Total demand deposits     258,672   71.40       177,190   67.48  
                     
Certificates of Deposit     103,627   28.60       85,408   32.52  
                     
Total Deposits   $ 362,299   100.00 %   $ 262,598   100.00 %
                         

CEO outlook:

"I am very proud of our entire staff and Board of Directors for the additional effort set forth to ensure that the Company executed on its 2016 strategic plan.  What we accomplished in the past 12 months would not have been possible without a total team effort," stated Michael A. Shriner, President and Chief Executive Officer.

Mr. Shriner added, "We are looking forward to continuing this momentum in 2017.   Relationship banking was the driving force behind our recent success, so we will strive to further develop those relationships, as well as fostering new ones."

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 and our continued ability to manage cybersecurity risks.
     
MSB FINANCIAL CORP    
(In Thousands, except for per share amount) (Unaudited)  
Statement of Financial Condition Data: 12/31/2016 12/31/2015
Total assets $ 461,646   $ 375,690    
     
Cash and cash equivalents   21,382     12,303    
     
Loans receivable, net   368,007     262,312    
     
Securities held to maturity   44,104     78,995    
     
Deposits   362,299     262,598    
     
Federal Home Loan Bank advances   22,675     32,675    
     
Total stockholders' equity   73,185     76,363    
     
Stock Information:    
Number of shares of common stock outstanding   5,714     5,954    
Book value per share of common stock $ 12.81   $ 12.83    
Closing market price $ 14.70   $ 12.50    
 
 

    (Unaudited)For the three months endedDecember 31, For the twelve months endedDecember 31,
Summary of Operations: (In Thousands, except for per share amounts)     2016     2015     2016     2015  
Total interest income   $ 3,949   $ 3,123   $ 14,210   $ 12,206  
           
Total interest expense     649     522     2,247     2,156  
           
Net interest income     3,300     2,601     11,963     10,050  
           
Provision for loan losses     300     90     800     113  
           
Net interest income after provision for loan losses     3,000     2,511     11,163     9,937  
           
Non-interest income     205     210     1,041     714  
           
Non-interest expense     2,417     2,724     10,390     10,024  
           
Income before taxes     788     (3 )   1,814     627  
           
Income tax expense     310     (5 )   653     184  
           
Net income   $ 478   $ 2   $ 1,161   $ 443  
           
Net income per common share - basic   $ 0.09   $ -   $ 0.21     0.08  
Net income per common share - diluted   $ 0.09   $ -   $ 0.20     0.08  
           
Weighted average number of shares - basic     5,510     5,737     5,646     5,685  
Weighted average number of shares - diluted     5,596     5,786     5,723     5,722  
           
Performance Ratios:          
Return on average assets annualized     0.44 %   0.00 %   0.29 %   0.12 %
Return on average common equity annualized     2.62 %   0.01 %   1.54 %   0.79 %
Net interest margin     3.19 %   2.96 %   3.13 %   2.95 %
Efficiency ratio     68.96 %   96.91 %   79.90 %   93.13 %
Operating expenses / average assets annualized     2.21 %   2.92 %   2.58 %   2.77 %
           
           

            For the three months ended    
          12/31/2016           12/31/2015    
Average Balance Sheet (In Thousands)   AverageBalance InterestIncome/Expense Yield AverageBalance InterestIncome/Expense Yield
Interest-earning assets:              
Loans Receivable   $ 343,684   $ 3,648     4.25 % $ 261,090   $ 2,660     4.08 %
Securities held to maturity     44,426     255     2.30     79,112     438     2.21  
Other interest-earning assets     25,900     46     0.71     11,490     25     0.87  
Total interest-earning assets     414,010     3,949     3.82     351,692     3,123     3.55  
               
Allowance for Loan Loss     (4,193 )       (3,631 )    
Non-interest-earning assets     28,015         24,961      
Total non-interest-earning assets     23,822         21,330      
Total Assets   $ 437,832       $ 373,022      
               
Interest-bearing liabilities:              
NOW & Money Market   $ 97,510   $ 82     0.34 % $ 44,789   $ 19     0.17 %
Savings and club deposits     104,383     59     0.23     102,156     58     0.23  
Certificates of deposit     98,833     324     1.31     82,741     241     1.17  
Total interest-bearing deposits     300,726     465     0.62     229,686     318     0.55  
               
Federal Home Loan Bank advances     22,675     184     3.25     32,675     204     2.50  
Total interest-bearing liabilities     323,401     649     0.80     262,361     522     0.80  
               
Non-interest-bearing deposit     38,014         30,462      
Other non-interest-bearing liabilities     3,374         3,504      
Total Liabilities     364,789         296,327      
               
Equity     73,043         76,695      
Total Liabilities and Equity   $ 437,832       $ 373,022      
               
Net Interest Spread       3,300     3.02 %     2,601     2.75 %
               
Net Interest Margin             3.19 %           2.96 %
               
Ratio of Interest Earning Assets to              
Interest Bearing Liabilities     128.02 %       134.05 %    
               

    For the year ended
          12/31/2016               12/31/2015        
Average Balance Sheet (In Thousands)   AverageBalance InterestIncome/Expense Yield AverageBalance InterestIncome/Expense Yield
Interest-earning assets:              
Loans Receivable   $ 301,764   $ 12,745     4.22 % $ 247,997   $ 10,376     4.18 %
Securities held to maturity     57,743     1,293     2.24     79,868     1,726     2.16  
Other interest-earning assets     22,334     172     0.77     12,880     104     0.81  
Total interest-earning assets     381,841     14,210     3.72     340,745     12,206     3.58  
               
Allowance for Loan Loss     (3,861 )       (3,593 )    
Non-interest-earning assets     24,421         25,066      
Total non-interest-earning assets     20,560         21,473      
                       
Total Assets   $ 402,401       $ 362,218      
               
Interest-bearing liabilities:              
NOW & Money Market   $ 71,843   $ 200     0.28 % $ 46,493   $ 75     0.16 %
Savings and club deposits     103,570     230     0.22     101,106     223     0.22  
Certificates of deposit     89,609     1,071     1.20     86,948     1,064     1.22  
Total interest-bearing deposits     265,022     1,501     0.57     234,547     1,362     0.58  
               
Federal Home Loan Bank advances     24,435     746     3.05     34,087     794     2.33  
Total interest-bearing liabilities     289,457     2,247     0.78     268,634     2,156     0.80  
               
Non-interest-bearing deposit     34,026         34,248      
Other non-interest-bearing liabilities     3,591         3,135      
Total Liabilities     327,074         306,017      
               
Equity     75,327         56,201      
Total Liabilities and Equity   $ 402,401       $ 362,218      
               
Net Interest Spread       11,963     2.94 %     10,050     2.78 %
               
Net Interest Margin           3.13 %         2.95 %
               
Ratio of Interest Earning Assets to              
Interest Bearing Liabilities     131.92 %       126.84 %    
Contact: Michael A. Shriner, President & CEO(908) 647-4000mshriner@millingtonbank.com

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