MIDLAND PARK, N.J., May 10, 2017 (GLOBE NEWSWIRE) -- Stewardship Financial Corporation (NASDAQ:SSFN), parent company of Atlantic Stewardship Bank, announced net income for the three months ended March 31, 2017 of $991,000, or $0.16 per common share. While the current year period net results were comparable to the three months ended March 31, 2016, the first quarter of 2017 reflected a provision for loan losses of $300,000 as a result of substantial loan growth compared to a recovery of $350,000 of the allowance for loan losses for the three months ended March 31, 2016.

"The current period results demonstrate the Corporation's ability to report core earnings achieved through growing our loan portfolio, even with a related need to provide for a loan loss reserve," stated Paul Van Ostenbridge, Stewardship Financial Corporation's President and Chief Executive Officer.

Operating ResultsNet interest income and net interest margin was $6.2 million and 3.23% for the first quarter of 2017 compared to $5.3 million and 3.11% for the comparable period a year earlier. Net interest income benefited from the recent loan growth. The three months ended March 31, 2017 included approximately $105,000 of prepayment premiums on loan payoffs compared to $27,000 for the same prior year period.

The Corporation reported noninterest income of $799,000 for the three months ended March 31, 2017 compared to $819,000 for the equivalent prior year period. Excluding $24,000 of nonrecurring gains from securities transactions, noninterest income would have been $795,000 for the three months ended March 31, 2016, relatively comparable to the current year period.

Total noninterest expenses were $5.1 million for the three months ended March 31, 2017 compared to the $4.9 million incurred in the prior year period. "We remain committed to controlling expenses as we grow our balance sheet," stated Van Ostenbridge.

Asset QualityResults for the three months ended March 31, 2017 were affected by the Corporation recording a provision for loan losses of $300,000 as compared to the positive impact of a $350,000 negative provision for loan losses for the three months ended March 31, 2016. With the significant improvement in credit quality the recording of a provision for loan losses is directly linked to the robust growth in the loan portfolio.

Balance Sheet / Financial ConditionTotal assets at March 31, 2017 were $844.4 million, reflecting an increase from the $795.5 million of assets at December 31, 2016. The growth in the balance sheet was the result of strong origination levels. New loan originations, partially offset by normal principal amortization and payoffs, resulted in net growth in the loan portfolio of $50.7 million.  According to Van Ostenbridge, "The new loans originated represent a record level for the Corporation." 

Total deposits were $700.7 million at March 31, 2017, reflecting net growth of $41.8 million since December 31, 2016. The Corporation continues to experience growth in both noninterest-bearing and interest-bearing deposits.

At March 31, 2017, the Corporation's Tier 1 leverage ratio and total risk based capital ratio were 7.38% and 12.38%, respectively. These ratios are both significantly above the respective 4.0% and 8% minimum levels required and result in categorizing the Corporation as a "well capitalized" institution under regulatory guidelines.

The Corporation previously announced on April 17, 2017 the closing of its underwritten public offering of 2,509,090 shares of the Corporation's common stock, which included 327,272 shares issued pursuant to the full exercise of the underwriter's over-allotment option, at a price to the public of $8.25 per share, for aggregate gross proceeds of approximately $20.7 million. The net proceeds to the Corporation, after deducting the underwriting discount and estimated offering expenses, were approximately $18.8 million. The Corporation expects to use the net proceeds of this offering to support organic growth and other general corporate purposes.

About Stewardship Financial CorporationStewardship Financial Corporation's subsidiary, the Atlantic Stewardship Bank, has 11 banking offices in Midland Park, Hawthorne, Montville, North Haledon, Pequannock, Ridgewood, Waldwick, Wayne (2), Westwood and Wyckoff, New Jersey. Additionally, the Bank is scheduled to open its 12th branch location in Morristown, New Jersey in late spring. The Bank is known for tithing 10% of its pre-tax profits to Christian and local charities. To date, the Bank's tithe donations total over $9.3 million.

We invite you to visit our website at www.asbnow.com for additional information.

The information disclosed in this document contains certain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, and may be identified by the use of such words as "believe," "expect," "anticipate," "should," "plan," "estimate," and "potential." Examples of forward-looking statements include, but are not limited to, estimates with respect to the financial condition, results of operations and business of the Corporation that are subject to various factors which could cause actual results to differ materially from these estimates. These factors include changes in general, economic and market conditions, legislative and regulatory conditions, or the development of an interest rate environment that adversely affects the Corporation's interest rate spread or other income anticipated from operations and investments.

Stewardship Financial Corporation
Selected Consolidated Financial Information
(dollars in thousands, except per share amounts)
(unaudited)
                   
  March 31,   December 31,   September 30,   June 30,   March 31,
    2017       2016       2016       2016       2016  
                   
Selected Financial Condition Data:                  
Cash and cash equivalents $ 12,793     $ 11,680     $ 21,025     $ 13,901     $ 13,319  
Securities available for sale   95,632       98,583       103,546       98,533       97,637  
Securities held to maturity   52,805       52,330       54,179       65,666       62,427  
FHLB Stock   3,784       3,515       2,425       2,650       2,608  
Loans held for sale   188       773       300       581       783  
Loans receivable:                  
Loans receivable, gross   654,769       604,083       552,106       537,638       528,011  
Allowance for loan losses   (8,246 )     (7,905 )     (8,150 )     (8,388 )     (8,540 )
Other, net   (327 )     (226 )     (110 )     (25 )     (64 )
Loans receivable, net   646,196       595,952       543,846       529,225       519,407  
Other real estate owned, net   401       401       834       834       1,013  
Bank owned life insurance   16,673       16,558       16,439       16,320       14,212  
Other assets   15,927       15,743       15,333       14,877       15,251  
Total assets $ 844,399     $ 795,535     $ 757,927     $ 742,587     $ 726,657  
                   
                   
Noninterest-bearing deposits $ 170,566     $ 169,306     $ 172,072     $ 160,461     $ 154,201  
Interest-bearing deposits   530,138       489,624       474,012       466,008       458,225  
Total deposits   700,704       658,930       646,084       626,469       612,426  
Other borrowings   65,200       59,200       35,000       40,000       40,000  
Subordinated debentures and subordinated notes   23,268       23,252       23,235       23,219       23,203  
Other liabilities   2,810       2,766       2,040       2,213       1,836  
Total liabilities   791,982       744,148       706,359       691,901       677,465  
Shareholders' equity   52,417       51,387       51,568       50,686       49,192  
Total liabilities and shareholders' equity $ 844,399     $ 795,535     $ 757,927     $ 742,587     $ 726,657  
                   
Gross loans to deposits   93.44 %     91.68 %     85.45 %     85.82 %     86.22 %
                   
Equity to assets   6.21 %     6.46 %     6.80 %     6.83 %     6.77 %
                   
Book value per share $ 8.55     $ 8.39     $ 8.43     $ 8.29     $ 8.05  
                   
Asset Quality Data:                  
Nonaccrual loans $ 592     $ 606     $ 929     $ 949     $ 2,304  
Loans past due 90 days or more and accruing   -       -       -       -       -  
Total nonperforming loans   592       606       929       949       2,304  
Other real estate owned   401       401       834       834       1,013  
Total nonperforming assets $ 993     $ 1,007     $ 1,763     $ 1,783     $ 3,317  
                   
                   
Nonperforming loans to total loans   0.09 %     0.10 %     0.17 %     0.18 %     0.44 %
Nonperforming assets to total assets   0.12 %     0.13 %     0.23 %     0.24 %     0.46 %
Allowance for loan losses to total gross loans   1.26 %     1.31 %     1.48 %     1.56 %     1.62 %

 

Stewardship Financial Corporation
Selected Consolidated Financial Information
(dollars in thousands, except per share amounts)
(unaudited)
             
    For the three months ended
    March 31,
    2017   2016
Selected Operating Data:            
Interest income   $ 7,424     $ 6,449  
Interest expense     1,244       1,173  
Net interest and dividend income     6,180       5,276  
Provision for loan losses     300       (350 )
Net interest income            
after provision for loan losses     5,880       5,626  
Noninterest income:            
Fees and service charges     535       529  
Bank owned life insurance     115       101  
Gain on calls and sales of securities     -       24  
Gain on sales of mortgage loans     17       18  
Other     132       147  
Total noninterest income     799       819  
Noninterest expenses:            
Salaries and employee benefits     2,844       2,715  
Occupancy, net     409       398  
Equipment     162       150  
Data processing     469       472  
Advertising     136       151  
FDIC insurance premium     77       106  
Charitable contributions     125       70  
Bank-card related services     142       131  
Other real estate owned, net     15       74  
Miscellaneous     735       635  
Total noninterest expenses     5,114       4,902  
Income before income tax expense     1,565       1,543  
Income tax expense     574       552  
Net income   $ 991     $ 991  
             
Weighted avg. no. of diluted common shares     6,124,926       6,092,351  
Diluted earnings per common share   $ 0.16     $ 0.16  
             
Return on average common equity     7.71 %     8.21 %
             
Return on average assets     0.49 %     0.55 %
             
Yield on average interest-earning assets     3.88 %     3.79 %
Cost of average interest-bearing liabilities     0.84 %     0.90 %
Net interest rate spread     3.04 %     2.89 %
             
Net interest margin     3.23 %     3.11 %

 

Stewardship Financial Corporation
Selected Consolidated Financial Information
(dollars in thousands, except per share amounts)
(unaudited)
                               
    For the three months ended
    March 31,   December 31,   September 30,   June 30,   March 31,
    2017   2016   2016   2016   2016
Selected Operating Data:                              
Interest income   $ 7,424     $ 7,000     $ 6,657     $ 6,979     $ 6,449  
Interest expense     1,244       1,103       1,113       1,124       1,173  
Net interest and dividend income     6,180       5,897       5,544       5,855       5,276  
Provision for loan losses     300       (300 )     (250 )     (450 )     (350 )
Net interest and dividend income                              
after provision for loan losses     5,880       6,197       5,794       6,305       5,626  
Noninterest income:                              
Fees and service charges     535       564       536       530       529  
Bank owned life insurance     115       119       120       107       101  
Gain on calls and sales of securities     -       1       6       32       24  
Gain on sales of mortgage loans     17       94       33       19       18  
Gain on sales of other real estate owned   -       30       -       6       -  
Other     132       129       128       138       147  
Total noninterest income     799       937       823       832       819  
Noninterest expenses:                              
Salaries and employee benefits     2,844       2,735       2,788       2,742       2,715  
Occupancy, net     409       396       400       404       398  
Equipment     162       156       155       148       150  
Data processing     469       481       485       477       472  
Advertising     136       196       165       157       151  
FDIC insurance premium     77       21       100       90       106  
Charitable contributions     125       135       80       90       70  
Bank-card related services     142       148       150       150       131  
Other real estate owned, net     15       14       27       28       74  
Other     735       720       649       713       635  
Total noninterest expenses     5,114       5,002       4,999       4,999       4,902  
Income before income tax expense     1,565       2,132       1,618       2,138       1,543  
Income tax expense     574       784       583       776       552  
Net income   $ 991     $ 1,348     $ 1,035     $ 1,362     $ 991  
                               
Weighted avg. no. of diluted common shares     6,124,926       6,119,693       6,115,987       6,111,729       6,092,351  
Diluted earnings per common share   $ 0.16     $ 0.22     $ 0.17     $ 0.22     $ 0.16  
                               
Return on average common equity     7.71 %     10.40 %     8.06 %     11.05 %     8.21 %
                               
Return on average assets     0.49 %     0.69 %     0.54 %     0.74 %     0.55 %
                               
Yield on average interest-earning assets     3.88 %     3.77 %     3.68 %     4.02 %     3.79 %
Cost of average interest-bearing liabilities     0.84 %     0.80 %     0.83 %     0.86 %     0.90 %
Net interest rate spread     3.04 %     2.97 %     2.85 %     3.16 %     2.89 %
                               
Net interest margin     3.23 %     3.18 %     3.07 %     3.38 %     3.11 %

Contact:Claire M. Chadwick EVP and Chief Financial Officer630 Godwin AvenueMidland Park, NJ 07432P: (201) 444-7100

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