MIDLAND PARK, N.J., Nov. 07, 2017 (GLOBE NEWSWIRE) -- Stewardship Financial Corporation (NASDAQ:SSFN), parent company of Atlantic Stewardship Bank, announced improved results for the current year periods.  Net income for the three and nine months ended September 30, 2017 was reported at $1.6 million and $3.9 million, respectively, compared to net income of $1.0 million and $3.4 million for the three and nine months ended September 30, 2016.

Paul Van Ostenbridge, President and Chief Executive Officer of Stewardship Financial Corporation commented, "Following a successful capital raise in April 2017 and the opening of a new location in Morristown, NJ in June 2017, the Corporation is focused on growing the bank and generating solid core earnings.  Increased revenue will result from a growing loan portfolio and we intend to continue to work to maintain expense levels."

Operating ResultsFor the three and nine months ended September 30, 2017, the Corporation reported net interest income of $6.8 million and $19.5 million, respectively.  Current net interest income levels reflect improvement over the $5.5 million and $16.7 million reported in the comparable prior year periods, with the current year increases primarily driven by growth in the loan portfolio.  Average loan balances increased $146.5 million and $130.7 million for the three and nine months ended September 30, 2017 over the comparable prior year periods.  The net interest margins for the current three and nine month periods were 3.09% and 3.15%, respectively, compared to 3.07% and 3.18% for the three and nine months ended September 30, 2016.  The margins are generally reflective of an environment with a flattened yield curve.

With year-over-year growth in the loan portfolio, provisions for loan losses of $20,000 and $580,000 were recorded for the three and nine months ended September 30, 2017, respectively, compared to negative provisions for loan losses of $250,000 and $1.1 million for the three and nine months ended September 30, 2016, respectively.  As the Corporation continues to maintain stable credit quality, the allowance for loan losses to total gross loans was 1.24% at September 30, 2017 compared to 1.31% at December 31, 2016 and 1.48% a year earlier.

For the three and nine months ended September 30, 2017, noninterest income was $845,000 and $2.5 million, respectively, compared to $823,000 and $2.5 million in the equivalent prior year periods.  For the three and nine months ended September 30, 2017, noninterest income included $68,000 and $123,000 of gains on sales of mortgage loans, respectively, compared to $33,000 and $70,000 for the comparable prior year periods.  For the nine months ended September 30, 2017, noninterest income included $1,000 of gains on calls and sales of securities compared to $62,000 for the comparable prior year period.

Noninterest expenses for the three and nine months ended September 30, 2017 were $5.0 million and $15.2 million, respectively, compared to $5.0 million and $14.9 million in the comparable prior year periods.  "In growing our loan portfolio, we are realizing efficiencies and remain committed to managing our expenses and infrastructure, as appropriate," stated Van Ostenbridge.

Balance Sheet / Financial ConditionTotal assets of $910.7 million at September 30, 2017 reflected a $152.8 million increase, or 20%, from a year earlier.  The asset growth was driven by organic loan originations which resulted in a $139.8 million increase in the gross loan portfolio over the last twelve months.

Van Ostenbridge noted, "We have demonstrated our ability to fund the increase in loans with deposit growth coupled with, to a lesser extent, borrowings."  At September 30, 2017, deposits totaled $741.0 million, reflecting net growth over the past year of $94.9 million.  A mix of organic growth and the retention / expansion of existing relationships has resulted in solid increases in deposits.  Other borrowings were $68.8 million at September 30, 2017 compared to $35.0 million at September 30, 2016.  Approximately $20 million of the growth in other borrowings can be attributed to a leverage strategy undertaken in conjunction with the capital raise in April 2017.

All regulatory capital levels at September 30, 2017 remain above the levels considered to be "well capitalized" under the applicable regulations.  Tier 1 leverage ratio was 8.88% and 7.65% at September 30, 2017 and December 31, 2016, respectively.  Total risk based capital ratio was 14.62% at September 30, 2017 compared to 13.10% at December 31, 2016.

The Corporation recently announced the establishment of a Small Business Administration (SBA) Department - staffed with newly hired employees with significant experience in the SBA process.  Van Ostenbridge explained, "We view the SBA product offerings as value-added lending solutions for small businesses that do not meet traditional lending requirements."

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.

Contact: Claire M. Chadwick Executive Vice President and Chief Financial Officer 630 Godwin Avenue Midland Park, NJ 07432 P: 201.444.7100 

 
Stewardship Financial Corporation
Selected Consolidated Financial Information
(dollars in thousands, except per share amounts)
(unaudited)
                   
  September 30,   June 30,   March 31,   December 31,   September 30,
  2017   2017   2017   2016   2016
                   
Selected Financial Condition Data:                  
Cash and cash equivalents $ 17,213     $ 19,459     $ 12,793     $ 11,680     $ 21,025  
Securities available for sale 115,733     116,244     95,632     98,583     103,546  
Securities held to maturity 53,323     52,091     52,805     52,330     54,179  
FHLB stock 3,919     5,169     3,784     3,515     2,425  
Loans held for sale 688     446     188     773     300  
Loans receivable:                  
Loans receivable, gross 691,953     692,056     654,769     604,083     552,106  
Allowance for loan losses (8,614 )   (8,550 )   (8,246 )   (7,905 )   (8,150 )
Other, net (422 )   (344 )   (327 )   (226 )   (110 )
Loans receivable, net 682,917     683,162     646,196     595,952     543,846  
Other real estate owned, net         401     401     834  
Bank owned life insurance 20,943     20,802     16,673     16,558     16,439  
Other assets 15,958     15,934     15,927     15,743     15,333  
Total assets $ 910,694     $ 913,307     $ 844,399     $ 795,535     $ 757,927  
                   
                   
Noninterest-bearing deposits $ 171,609     $ 177,678     $ 170,566     $ 169,306     $ 172,072  
Interest-bearing deposits 569,352     543,215     530,138     489,624     474,012  
Total deposits 740,961     720,893     700,704     658,930     646,084  
Other borrowings 68,760     93,760     65,200     59,200     35,000  
Subordinated debentures and subordinated notes 23,301     23,284     23,268     23,252     23,235  
Other liabilities 3,564     2,859     2,810     2,766     2,040  
Total liabilities 836,586     840,796     791,982     744,148     706,359  
Shareholders' equity 74,108     72,511     52,417     51,387     51,568  
Total liabilities and shareholders' equity $ 910,694     $ 913,307     $ 844,399     $ 795,535     $ 757,927  
                   
Gross loans to deposits 93.39 %   96.00 %   93.44 %   91.68 %   85.45 %
                   
Equity to assets 8.14 %   7.94 %   6.21 %   6.46 %   6.80 %
                   
Book value per share $ 8.57     $ 8.39     $ 8.55     $ 8.39     $ 8.43  
                   
Asset Quality Data:                  
Nonaccrual loans $ 806     $ 826     $ 592     $ 606     $ 929  
Loans past due 90 days or more and accruing     320              
Total nonperforming loans 806     1,146     592     606     929  
Other real estate owned         401     401     834  
Total nonperforming assets $ 806     $ 1,146     $ 993     $ 1,007     $ 1,763  
                   
Nonperforming loans to total loans 0.12 %   0.17 %   0.09 %   0.10 %   0.17 %
Nonperforming assets to total assets 0.09 %   0.13 %   0.12 %   0.13 %   0.23 %
Allowance for loan losses to total gross loans 1.24 %   1.24 %   1.26 %   1.31 %   1.48 %
                             

 
Stewardship Financial Corporation
Selected Consolidated Financial Information
(dollars in thousands, except per share amounts)
(unaudited)
               
  For the three months ended   For the nine months ended
  September 30,   September 30,
  2017   2016   2017   2016
Selected Operating Data:              
Interest income $ 8,400     $ 6,657     $ 23,767     $ 20,085  
Interest expense 1,577     1,113     4,230     3,410  
Net interest income 6,823     5,544     19,537     16,675  
Provision for loan losses 20     (250 )   580     (1,050 )
Net interest income              
after provision for loan losses 6,803     5,794     18,957     17,725  
Noninterest income:              
Fees and service charges 524     536     1,578     1,595  
Bank owned life insurance 141     120     385     328  
Gain on calls and sales of securities 1     6     1     62  
Gain on sales of mortgage loans 68     33     123     70  
Gain on sales of other real estate owned         13     6  
Miscellaneous 111     128     357     413  
Total noninterest income 845     823     2,457     2,474  
Noninterest expenses:              
Salaries and employee benefits 2,843     2,788     8,567     8,245  
Occupancy, net 414     400     1,216     1,202  
Equipment 173     155     497     453  
Data processing 444     485     1,369     1,434  
Advertising 182     165     529     473  
FDIC insurance premium 50     100     236     296  
Charitable contributions 130     80     375     240  
Bank-card related services 137     150     421     431  
Other real estate owned, net     27     24     129  
Miscellaneous 663     649     1,999     1,997  
Total noninterest expenses 5,036     4,999     15,233     14,900  
Income before income tax expense 2,612     1,618     6,181     5,299  
Income tax expense 972     583     2,282     1,911  
Net income $ 1,640     $ 1,035     $ 3,899     $ 3,388  
               
Weighted avg. no. of diluted common shares 8,643,737     6,115,987     7,656,942     6,106,723  
Diluted earnings per common share $ 0.19     $ 0.17     $ 0.51     $ 0.55  
               
Return on average common equity 8.83 %   8.06 %   8.02 %   9.09 %
               
Return on average assets 0.71 %   0.54 %   0.60 %   0.61 %
               
Yield on average interest-earning assets 3.80 %   3.68 %   3.83 %   3.83 %
Cost of average interest-bearing liabilities 0.94 %   0.83 %   0.89 %   0.86 %
Net interest rate spread 2.86 %   2.85 %   2.94 %   2.97 %
               
Net interest margin 3.09 %   3.07 %   3.15 %   3.18 %
                       

 
Stewardship Financial Corporation
Selected Consolidated Financial Information
(dollars in thousands, except per share amounts)
(unaudited)
                     
    For the three months ended
    September 30,   June 30,   March 31,   December 31,   September 30,
    2017   2017   2017   2016   2016
Selected Operating Data:                    
Interest income   $ 8,400     $ 7,943     $ 7,424     $ 7,000     $ 6,657  
Interest expense   1,577     1,409     1,244     1,103     1,113  
Net interest income   6,823     6,534     6,180     5,897     5,544  
Provision for loan losses   20     260     300     (300 )   (250 )
Net interest and dividend income                    
after provision for loan losses   6,803     6,274     5,880     6,197     5,794  
Noninterest income:                    
Fees and service charges   524     519     535     564     536  
Bank owned life insurance   141     129     115     119     120  
Gain on calls and sales of securities   1             1     6  
Gain on sales of mortgage loans   68     38     17     94     33  
Gain on sales of other real estate owned       13         30      
Miscellaneous   111     114     132     129     128  
Total noninterest income   845     813     799     937     823  
Noninterest expenses:                    
Salaries and employee benefits   2,843     2,880     2,844     2,735     2,788  
Occupancy, net   414     393     409     396     400  
Equipment   173     162     162     156     155  
Data processing   444     456     469     481     485  
Advertising   182     211     136     196     165  
FDIC insurance premium   50     109     77     21     100  
Charitable contributions   130     120     125     135     80  
Bank-card related services   137     142     142     148     150  
Other real estate owned, net       9     15     14     27  
Miscellaneous   663     601     735     720     649  
Total noninterest expenses   5,036     5,083     5,114     5,002     4,999  
Income before income tax expense   2,612     2,004     1,565     2,132     1,618  
Income tax expense   972     736     574     784     583  
Net income   $ 1,640     $ 1,268     $ 991     $ 1,348     $ 1,035  
                     
Weighted avg. no. of diluted common shares   8,643,737     8,174,484     6,124,926     6,119,693     6,115,987  
Diluted earnings per common share   $ 0.19     $ 0.16     $ 0.16     $ 0.22     $ 0.17  
                     
Return on average common equity   8.83 %   7.37 %   7.71 %   10.40 %   8.06 %
                     
Return on average assets   0.71 %   0.58 %   0.49 %   0.69 %   0.54 %
                     
Yield on average interest-earning assets   3.80 %   3.81 %   3.88 %   3.77 %   3.68 %
Cost of average interest-bearing liabilities   0.94 %   0.90 %   0.84 %   0.80 %   0.83 %
Net interest rate spread   2.86 %   2.91 %   3.04 %   2.97 %   2.85 %
                     
Net interest margin   3.09 %   3.14 %   3.23 %   3.18 %   3.07 %