MIDLAND PARK, N.J. , Aug. 08, 2017 (GLOBE NEWSWIRE) -- Stewardship Financial Corporation (NASDAQ:SSFN), parent company of Atlantic Stewardship Bank, announced net income for the three and six months ended June 30, 2017 of $1.3 million and $2.3 million, respectively, compared to net income of $1.4 million and $2.4 million for the three and six months ended June 30, 2016. Current year periods were relatively comparable to the same prior year periods, however, the three and six month periods of 2017 reflected provision for loan losses of $260,000 and $560,000 as a result of robust loan growth, while the three and six months ended June 30, 2016 included recoveries of the allowance for loan losses of $450,000 and $800,000, respectively.

Earlier in the quarter, the Corporation announced the successful completion of an 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 $20.7 million. The net proceeds to the Corporation, after deducting the underwriting discount and offering expenses, were $18.9 million. The Corporation expects to use the net proceeds of this offering to support organic growth and other general corporate purposes. In connection with the raise of capital, an approximate $20.0 million leverage transaction was completed.

Further, the Corporation celebrated the June 2017 opening of a new branch and loan production office in Morristown, New Jersey.  Paul Van Ostenbridge, Stewardship Financial Corporation's President and Chief Executive Officer remarked that, "Our Morristown location, which expands our presence in Morris County, will continue to meet the needs of our customers. This new location offers additional conveniences such as advanced technology with a new Interactive Teller Machine, which combines ATM functions with access to a live teller, as well as lending solutions tailored to meet customers' requests with a commercial lender on-site to provide localized decision-making."

With respect to the activity during 2017, Van Ostenbridge noted, "In addition to a number of positive accomplishments, the Corporation continued to demonstrate the ability to generate solid core earnings. We were able to maintain expense levels and provide for loan loss reserves for our increasing loan portfolio while continuing to grow assets and increase revenue."

Operating ResultsThe Corporation reported net interest income of $6.5 million and $12.7 million for the three and six months ended June 30, 2017, respectively, compared to $5.9 million and $11.1 million for the comparable prior year periods. Net interest income benefited from the recent growth in the average balance of the loan portfolio. The net interest margin for the current three and six month periods was 3.14% and 3.18%, respectively, compared to 3.38% and 3.24% for the three and six months ended June 30, 2016. The compression in margin in the 2017 periods when compared to prior periods is generally reflective of asset growth in an environment with a flattening of the yield curve and, to a lesser extent, the impact of the previously mentioned leverage strategy.

For the three and six months ended June 30, 2017, noninterest income was $813,000 and $1.6 million, respectively, compared to $832,000 and $1.7 million in the equivalent prior year periods. Excluding $32,000 and $56,000 of gains from securities transactions, noninterest income would have been $800,000 and $1.6 million for the three and six months ended June 30, 2016, which are comparable to the current year periods.

Noninterest expenses for the three and six months ended June 30, 2017 were $5.1 million and $10.2 million, respectively, compared to $5.0 million and $9.9 million in the comparable prior year periods. "Even with the substantial growth in assets, we have been able to effectively manage our infrastructure and expenses, resulting in an improvement in our efficiency," stated Van Ostenbridge.

Balance Sheet / Financial ConditionTotal assets at June 30, 2017 were $913.3 million, reflecting an increase of $117.8 million from the $795.5 million of assets at December 31, 2016. The strong organic loan origination levels accounted for $88.0 million of net growth in the gross loan portfolio during the six months ended June 30, 2017.

The continued funding of loan growth has been supported by deposits and, to a lesser extent, borrowings. Total deposits were $720.9 million at June 30, 2017, reflecting net growth of $62.0 million since December 31, 2016. Other borrowings increased to $93.8 million at June 30, 2017 compared to $59.2 million at December 31, 2016. Approximately $20 million of the growth in other borrowings can be attributed to the $20.0 million leverage strategy.

Regulatory capital levels at June 30, 2017 include the net proceeds of $18.9 million from the Corporation's public offering of common stock. The Corporation's Tier 1 leverage ratio and total risk based capital ratio were 9.15% and 14.36%, respectively, compared to 7.65% and 13.10% at December 31, 2016, respectively.

About Stewardship Financial CorporationStewardship Financial Corporation's subsidiary, the Atlantic Stewardship Bank, is a full-service community bank serving both individuals and businesses. ASB is known for tithing, or sharing, 10% of its taxable income with nonprofit, educational, charitable and/or evangelical religious organizations. To date, ASB's total tithing donations total over $ 9.3 million. ASB maintains 12 banking locations in NJ including; Hawthorne, Midland Park, Montville, Morristown, North Haledon, Pequannock, Ridgewood, Waldwick, Westwood, Wyckoff and two offices in Wayne. ASB invites you to visit their website at www.asbnow.com  for additional information and to learn more.

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)
                   
  June 30,   March 31,   December 31,   September 30,   June 30,
  2017   2017   2016   2016   2016
Selected Financial Condition Data:                  
Cash and cash equivalents $ 19,459     $ 12,793     $ 11,680     $ 21,025     $ 13,901  
Securities available for sale 116,244     95,632     98,583     103,546     98,533  
Securities held to maturity 52,091     52,805     52,330     54,179     65,666  
FHLB stock 5,169     3,784     3,515     2,425     2,650  
Loans held for sale 446     188     773     300     581  
Loans receivable:                  
Loans receivable, gross 692,056     654,769     604,083     552,106     537,638  
Allowance for loan losses (8,550 )   (8,246 )   (7,905 )   (8,150 )   (8,388 )
Other, net (344 )   (327 )   (226 )   (110 )   (25 )
Loans receivable, net 683,162     646,196     595,952     543,846     529,225  
Other real estate owned, net     401     401     834     834  
Bank owned life insurance 20,802     16,673     16,558     16,439     16,320  
Other assets 15,934     15,927     15,743     15,333     14,877  
Total assets $ 913,307     $ 844,399     $ 795,535     $ 757,927     $ 742,587  
                   
                   
Noninterest-bearing deposits $ 177,678     $ 170,566     $ 169,306     $ 172,072     $ 160,461  
Interest-bearing deposits 543,215     530,138     489,624     474,012     466,008  
Total deposits 720,893     700,704     658,930     646,084     626,469  
Other borrowings 93,760     65,200     59,200     35,000     40,000  
Subordinated debentures and subordinated notes 23,284     23,268     23,252     23,235     23,219  
Other liabilities 2,859     2,810     2,766     2,040     2,213  
Total liabilities 840,796     791,982     744,148     706,359     691,901  
Shareholders' equity 72,511     52,417     51,387     51,568     50,686  
Total liabilities and shareholders' equity $ 913,307     $ 844,399     $ 795,535     $ 757,927     $ 742,587  
                   
Gross loans to deposits 96.00 %   93.44 %   91.68 %   85.45 %   85.82 %
                   
Equity to assets 7.94 %   6.21 %   6.46 %   6.80 %   6.83 %
                   
Book value per share $ 8.39     $ 8.55     $ 8.39     $ 8.43     $ 8.29  
                   
Asset Quality Data:                  
Nonaccrual loans $ 826     $ 592     $ 606     $ 929     $ 949  
Loans past due 90 days or more and accruing 320                  
Total nonperforming loans 1,146     592     606     929     949  
Other real estate owned     401     401     834     834  
Total nonperforming assets $ 1,146     $ 993     $ 1,007     $ 1,763     $ 1,783  
                   
Nonperforming loans to total loans 0.17 %   0.09 %   0.10 %   0.17 %   0.18 %
Nonperforming assets to total assets 0.13 %   0.12 %   0.13 %   0.23 %   0.24 %
Allowance for loan losses to total gross loans 1.24 %   1.26 %   1.31 %   1.48 %   1.56 %

 
Stewardship Financial Corporation
Selected Consolidated Financial Information
(dollars in thousands, except per share amounts)
(unaudited)
               
  For the three months ended   For the six months ended
  June 30,   June 30,
  2017   2016   2017   2016
Selected Operating Data:                              
Interest income $ 7,943     $ 6,979     $ 15,367     $ 13,428  
Interest expense 1,409     1,124     2,653     2,297  
Net interest income 6,534     5,855     12,714     11,131  
Provision for loan losses 260     (450 )   560     (800 )
Net interest income after provision for loan losses 6,274     6,305     12,154     11,931  
Noninterest income:              
Fees and service charges 519     530     1,054     1,059  
Bank owned life insurance 129     107     244     208  
Gain on calls and sales of securities     32         56  
Gain on sales of mortgage loans 38     19     55     37  
Gain on sales of other real estate owned 13     6     13     6  
Miscellaneous 114     138     246     285  
Total noninterest income 813     832     1,612     1,651  
Noninterest expenses:              
Salaries and employee benefits 2,880     2,742     5,724     5,457  
Occupancy, net 393     404     802     802  
Equipment 162     148     324     298  
Data processing 456     477     925     949  
Advertising 211     157     347     308  
FDIC insurance premium 109     90     186     196  
Charitable contributions 120     90     245     160  
Bank-card related services 142     150     284     281  
Other real estate owned, net 9     28     24     102  
Miscellaneous 601     713     1,336     1,348  
Total noninterest expenses 5,083     4,999     10,197     9,901  
  Income before income tax expense 2,004     2,138     3,569     3,681  
  Income tax expense 736     776     1,310     1,328  
  Net income $ 1,268     $ 1,362     $ 2,259     $ 2,353  
               
  Weighted avg. no. of diluted common shares 8,174,484     6,111,729     7,155,367     6,102,040  
  Diluted earnings per common share $ 0.16     $ 0.22     $ 0.32     $ 0.39  
               
  Return on average common equity 7.37 %   11.05 %   7.52 %   9.64 %
               
  Return on average assets 0.58 %   0.74 %   0.54 %   0.65 %
               
  Yield on average interest-earning assets 3.81 %   4.02 %   3.84 %   3.91 %
  Cost of average interest-bearing liabilities 0.90 %   0.86 %   0.87 %   0.88 %
  Net interest rate spread 2.91 %   3.16 %   2.97 %   3.03 %
               
  Net interest margin 3.14 %   3.38 %   3.18 %   3.24 %

                                           
Stewardship Financial Corporation
Selected Consolidated Financial Information
(dollars in thousands, except per share amounts)
(unaudited)
 
      June 30,   March 31,   December 31,   September 30,   June 30,
      2017   2017   2016   2016   2016
Selected Operating Data:                                        
  Interest income   $ 7,943     $ 7,424     $ 7,000     $ 6,657     $ 6,979  
  Interest expense   1,409     1,244     1,103     1,113     1,124  
    Net interest income   6,534     6,180     5,897     5,544     5,855  
  Provision for loan losses   260     300     (300 )   (250 )   (450 )
  Net interest and dividend income                    
    after provision for loan losses   6,274     5,880     6,197     5,794     6,305  
  Noninterest income:                    
    Fees and service charges   519     535     564     536     530  
    Bank owned life insurance   129     115     119     120     107  
    Gain on calls and sales of securities           1     6     32  
    Gain on sales of mortgage loans   38     17     94     33     19  
    Gain on sales of other real estate owned   13         30         6  
    Miscellaneous   114     132     129     128     138  
    Total noninterest income   813     799     937     823     832  
  Noninterest expenses:                    
    Salaries and employee benefits   2,880     2,844     2,735     2,788     2,742  
    Occupancy, net   393     409     396     400     404  
    Equipment   162     162     156     155     148  
    Data processing   456     469     481     485     477  
    Advertising   211     136     196     165     157  
    FDIC insurance premium   109     77     21     100     90  
    Charitable contributions   120     125     135     80     90  
    Bank-card related services   142     142     148     150     150  
    Other real estate owned, net   9     15     14     27     28  
    Miscellaneous   601     735     720     649     713  
    Total noninterest expenses   5,083     5,114     5,002     4,999     4,999  
  Income before income tax expense   2,004     1,565     2,132     1,618     2,138  
  Income tax expense   736     574     784     583     776  
  Net income   $ 1,268     $ 991     $ 1,348     $ 1,035     $ 1,362  
                         
Weighted avg. no. of diluted common shares   8,174,484     6,124,926     6,119,693     6,115,987     6,111,729  
Diluted earnings per common share   $ 0.16     $ 0.16     $ 0.22     $ 0.17     $ 0.22  
                         
Return on average common equity   7.37 %   7.71 %   10.40 %   8.06 %   11.05 %
                         
Return on average assets   0.58 %   0.49 %   0.69 %   0.54 %   0.74 %
                         
Yield on average interest-earning assets   3.81 %   3.88 %   3.77 %   3.68 %   4.02 %
Cost of average interest-bearing liabilities   0.90 %   0.84 %   0.80 %   0.83 %   0.86 %
Net interest rate spread   2.91 %   3.04 %   2.97 %   2.85 %   3.16 %
                         
Net interest margin   3.14 %   3.23 %   3.18 %   3.07 %   3.38 %
Contact:Claire M. ChadwickExecutive Vice President and Chief Financial Officer630 Godwin AvenueMidland Park, NJ 07432P: 201.444.7100

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