MILLINGTON, N.J., May 01, 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 months ended March 31, 2017. 

The Company reported net income of $549,000, or $0.10 per diluted common share for the three months ended March 31, 2017, compared to $159,000, or $0.03 per diluted common share for the three months ended March 31, 2016.

Growth in net interest income and margin reflect growth in commercial loansNet interest income grew $807,000 or 29.0% to $3.6 million for the quarter ended March 31, 2017 compared to $2.8 million for the quarter ended March 31, 2016. Net interest margin for the quarter ended March 31, 2017 was 3.29%, an improvement of 17 basis points, compared to 3.12% for the quarter ended March 31, 2016. Net interest income and net interest margin continue to increase due primarily to the growth in the Company's commercial real estate and commercial loan portfolios.

Commercial loan growth quarter over quarterAt March 31, 2017, the Company's net loan portfolio totaled $398.4 million, an increase of $30.4 million or 8.3%, compared to $368.0 million at December 31, 2016. Commercial real estate loans increased $16.5 million or 13.3% while commercial and industrial loans increased $9.6 million from December 31, 2016 as the Company continues to focus on the origination of commercial relationships.

The following table summarizes loan balances and composition at March 31, 2017 and December 31, 2016:
  At     At  
March 31,   December 31,  
(In thousands) 2017     2016  
                       
Residential mortgage:                      
  One-to-four family $ 160,153   38.2 %   $ 160,534   42.3 %
  Home equity   30,493     7.3       32,262     8.5  
                       
Total residential mortgage   190,646   45.5       192,796   50.8  
                       
 Commercial and multi-family real estate   141,193   33.7       124,656   32.8  
 Construction   31,978   7.6       16,554   4.4  
 Commercial and industrial   54,887     13.1       45,246     11.9  
                       
Total commercial loans   228,058   51.4       186,456   49.1  
.                      
Consumer loans   394     0.1       446     0.1  
                       
Total loans receivable   419,098    100.0 %     379,698    100.0 %
                       
Less:                      
  Loans in process   15,394           6,557      
  Deferred loan fees   631           658      
  Allowance   4,626           4,476      
                       
Total loans receivable, net $ 398,447         $ 368,007      
                       

Credit qualityOverall credit quality remained stable during the quarter. Total delinquent loans (including nonperforming delinquent loans) were $10.1 million at March 31, 2017, a reduction of $1.8 million from December 31, 2016. Total nonperforming loans were $7.4 million at March 31, 2017 compared to $7.0 million at December 31, 2016. Included in total delinquency and nonperforming loans is one large residential mortgage of $1.9 million which is being actively managed and expected to be resolved by the third quarter. The allowance for loan losses as a percentage of total loans was 1.15% and 1.18% at March 31, 2017 and December 31, 2016, respectively, while the allowance for loan losses as a percentage of non-performing loans decreased slightly to 62.47% at March 31, 2017 from 64.13% at December 31, 2016. Non-performing loans to total loans were 1.84% at March 31, 2017 and December 31, 2016. 

Consumer deposit growth during first quarter Total deposits at March 31, 2017 were $354.9 million compared with $362.3 million at December 31, 2016. Overall, deposits decreased by $7.4 million, or 2.0% with growth occurring in consumer deposits offset by a few large business relationships utilizing cash for their business needs. The Company experienced growth in the non-transactional categories with an increase of $4.3 million in certificates of deposit, $2.7 million in money market accounts, and $1.8 million in savings accounts while transactional accounts decreased $16.1 million.

The following table summarizes deposit balances and composition at March 31, 2017 and December 31, 2016:
  At     At  
(Dollars in thousands) March 31, 2017     December 31, 2016  
                   
Noninterest demand $   38,970   10.98 %   $   44,365   12.25 %
Interest demand   89,159   25.12       99,879   27.57  
Savings     104,956   29.57         103,163   28.47  
Money Market     13,950   3.93         11,265   3.11  
                   
  Total demand deposits     247,035   69.60         258,672   71.40  
                   
Certificates of Deposit     107,896   30.40         103,627   28.60  
                   
Total Deposits $   354,931   100.00 %   $   362,299   100.00 %
                       

CEO outlook:

"I'm very pleased with the Company's first quarter results. Our entire staff continues to focus on the execution of our long term strategic plan," stated Michael A. Shriner, President and Chief Executive Officer. 

Mr. Shriner added, "As our Company continues to evolve, the strength of our staff is essential to our success. During the last quarter, we were fortunate to add several key, strategic hires that we believe will facilitate our future growth objectives."

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) (Unaudited)
Statement of Financial Condition Data: 03/31/2017 03/31/2016
Total assets $ 481,908 $ 380,134
     
Cash and cash equivalents   11,249   14,515
     
Loans receivable, net   398,447   270,713
     
Securities held to maturity   42,716   73,603
     
Deposits   354,931   276,841
     
Federal Home Loan Bank advances   49,175   22,675
     
Total stockholders' equity   74,067   76,560
     
Stock Information:    
Number of shares of common stock outstanding   5,729   5,953
Book value per share of common stock $ 12.93 $ 12.86
Closing market price $ 16.50 $ 12.85
 

Summary of Operations: (In Thousands, except for per share amounts) (Unaudited)For the three months ended March 31,
  2017     2016  
Total interest income $ 4,293   $ 3,298  
     
Total interest expense   698     510  
     
Net interest income   3,595     2,788  
     
Provision for loan losses   195     130  
     
Net interest income after provision for loan losses   3,400     2,658  
     
Non-interest income   187     141  
     
Non-interest expense   2,717     2,564  
     
Income before taxes   870     235  
     
Income tax expense   321     76  
     
Net income $ 549   $ 159  
     
Net income per common share - basic  $ 0.10   $ 0.03  
Net income per common share - diluted $ 0.10   $ 0.03  
     
Weighted average number of shares - basic   5,520     5,743  
Weighted average number of shares - diluted   5,614     5,812  
     
Performance Ratios:    
Return on average assets annualized   0.48 %   0.17 %
Return on average common equity annualized   2.97 %   0.83 %
Net interest margin   3.29 %   3.12 %
Efficiency ratio   71.83 %   87.54 %
Operating expenses / average assets annualized   2.36 %   2.73 %
     

  For the three months ended
  03/31/2017 03/31/2016
Average Balance Sheet (In Thousands) Average Balance Interest Income/Expense Yield Average Balance Interest Income/Expense Yield
Interest-earning assets:            
Loans receivable $ 382,386   $ 4,000 4.18 % $ 271,815   $ 2,838 4.18 %
Securities held to maturity   43,285     251   2.32     76,932     431  2.24  
Other interest-earning assets   11,335     42   1.48     8,430     29   1.38  
Total interest-earning assets   437,006     4,293   3.93     357,177     3,298   3.69  
             
Allowance for loan loss     (4,524 )         (3,622 )    
Non-interest-earning assets     28,367           21,646      
Total non-interest-earning assets     23,843           18,024      
Total Assets $ 460,849       $  375,201      
             
Interest-bearing liabilities:            
Demand & money market $   106,037   $ 95 0.36 % $   48,453   $ 21 0.17 %
Savings and club deposits   103,774     58  0.22     102,445     56  0.22  
Certificates of deposit   106,513     349  1.31     84,437     237  1.12  
Total interest-bearing deposits   316,324     502  0.63     235,335     314  0.53  
             
Federal Home Loan Bank advances   29,992     196  2.61     29,754     196  2.63  
Total interest-bearing liabilities   346,316     698  0.81      265,089     510  0.77   
             
Non-interest-bearing deposit   37,821         29,621      
Other non-interest-bearing liabilities   2,789         3,820      
Total Liabilities   386,926         298,530      
             
Equity   73,923         76,671      
Total Liabilities and Equity $ 460,849       $ 375,201      
             
Net Interest Spread     3,595  3.12 %     2,788  2.92 %
             
Net Interest Margin     3.29 %     3.12 %
             
Ratio of Interest Earning Assets to Interest Bearing Liabilities   126.19 %       134.74 %    
             

 

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