Clifton Bancorp Inc. (NasdaqGS:CSBK), the holding company of
Clifton Savings Bank (collectively, the “Company”), today announced
the results of its operations for the three months and year ended
March 31, 2014. Clifton Bancorp is a Maryland corporation that was
incorporated in November 2013 to be the successor corporation to
Clifton Savings Bancorp, Inc., the former stock holding company for
Clifton Savings Bank, upon completion of the mutual-to-stock
conversion of Clifton MHC, the former mutual holding company of
Clifton Savings Bank.
The mutual-to-stock conversion was completed on April 1, 2014.
In connection with the conversion, Clifton Bancorp sold a total of
17,059,448 shares of common stock at $10.00 per share in a
subscription offering to depositors and Clifton Savings Bank’s
employee stock ownership plan. Concurrent with the completion of
the offering, shares of Clifton Savings Bancorp’s common stock
owned by public stockholders were exchanged for 0.9791 shares of
Clifton Bancorp common stock. In lieu of fractional shares, Clifton
Savings Bancorp shareholders were paid cash. As a result of the
transaction, all share and per share data for periods prior to
April 1, 2014 have been revised to reflect the 0.9791 exchange
rate.
Net Income
Net income was $1.56 million for the three months ended March
31, 2014, an increase of $29,000, or 1.9%, as compared to $1.53
million for the three months ended March 31, 2013. The increase
primarily was due to an increase of $588,000 in net interest
income, partially offset by an increase of $93,000 in provision for
loan losses and an increase of $489,000 in noninterest
expenses.
Net income was $6.47 million for the year ended March 31, 2014,
a decrease of $145,000, or 2.2%, as compared to $6.61 million for
the year ended March 31, 2013. The decrease was primarily due to an
increase of $1.2 million in noninterest expenses, partially offset
by an increase of $319,000 in net interest income and an increase
of $713,000 in noninterest income.
Earnings and Dividends Per Share
Basic and diluted earnings per common share were $0.06 for both
the three months ended March 31, 2014 and March 31, 2013. Basic and
diluted earnings per common share were $0.25 for the year ended
March 31, 2014, a decrease of $0.01, or 3.8% as compared to $0.26
for the year ended March 31, 2013.
The cash dividends declared per common share were zero for both
the three month periods as two dividends were paid during the
quarter ended December 31, 2012, one which represented the dividend
that normally would have been paid in the March 2013 quarter, and
during the quarter ended March 31, 2014, the regular quarterly cash
dividend was postponed to eliminate the need to pay a dividend to
Clifton MHC. Cash dividends declared per common share were $0.18
for the year ended March 31, 2014 as compared to $0.24 for the year
ended March 31, 2013.
Net Interest Income and Expense
Net interest income increased $588,000, or 10.3%, for the three
months ended March 31, 2014, to $6.31 million as compared to $5.73
million for three months ended March 31, 2013, reflecting an
increase of $13.9 million in average net interest-earning assets
coupled with an increase of 1 basis point in net interest margin.
Average interest-earning assets increased $93.0 million, or 9.8%,
during the three months ended March 31, 2014, as compared to the
three months ended March 31, 2013, which consisted of increases of
$127.9 million in loans, $6.0 million in investment securities, and
$7.0 million in other interest-earning assets, partially offset by
a decrease of $48.0 million in mortgage-backed securities. The
average balance of loans increased as Clifton Savings Bank
continues to emphasize the growth of its loan portfolio (through
loan originations, as supplemented by purchased loans) while
repayment levels declined as fewer borrowers sought to refinance.
Other interest-earning assets increased as funds received from
calls of securities were not yet redeployed into higher-yielding
assets. Mortgage-backed securities decreased due to principal
repayments of securities exceeding purchases as funds were
redeployed into loans and investment securities.
Average interest-bearing liabilities increased $79.0 million, or
9.8%, during the three months ended March 31, 2014, primarily as a
result of an increase of $83.6 million in borrowings, which were
used primarily to fund loan growth, partially offset by a decrease
of $4.6 million in deposits.
Net interest margin increased to 2.43% for the quarter ended
March 31, 2014 from 2.42% for the quarter ended March 31, 2013. The
net interest rate spread increased to 2.27% for the quarter ended
March 31, 2014 from 2.23% for the quarter ended March 31, 2013, due
to a 20 basis point decrease to 1.06% in the average rate paid on
interest-bearing liabilities, partially offset by a 16 basis point
decrease to 3.33% in the average yield earned on interest-earning
assets.
Net interest income increased $319,000, or 1.4%, for the year
ended March 31, 2014, to $23.88 million as compared to $23.56
million for year ended March 31, 2013, despite an overall decrease
of 2 basis points in net interest margin and a decrease of $788,000
in average net interest-earning assets, due to an improved mix of
assets. Average interest-earning assets increased $21.4 million, or
2.2%, during the year ended March 31, 2014, as compared to the year
ended March 31, 2013, which consisted of an increase of $85.3
million in loans, mostly offset by decreases of $36.4 million in
mortgage-backed securities, $17.3 million in investment securities,
and $10.2 million in other interest-earning assets. The average
balance of loans increased due to the Company’s loan growth
strategy implemented during calendar year 2013. The average balance
of investment securities decreased primarily due to calls of a
portion of the Company’s investment portfolio in excess of
purchases. Mortgage-backed securities decreased due to principal
repayments and sales of securities. Other interest-earning assets
decreased as funds were redeployed into higher yielding assets.
Average interest-bearing liabilities increased $22.2 million, or
2.7%, during the year ended March 31, 2014, as a result of
increases of $34.8 million in borrowings and $28.6 million in
demand, savings and club accounts, partially offset by a decrease
of $41.2 million in certificates of deposit. Net interest margin
decreased to 2.37% for the year ended March 31, 2014 from 2.39% for
the year ended March 31, 2013, while the net interest rate spread
increased 2 basis points to 2.20% for the year ended March 31,
2014. The increase in net interest rate spread resulted from a 26
basis point decrease to 1.15% in the average rate paid on
interest-bearing liabilities, which was partially offset by a 24
basis point decrease to 3.35% in the average yield earned on
interest-earning assets.
Provision for Loan Losses and Asset Quality
The provision for loan losses was $113,000 for the three months
ended March 31, 2014 as compared to $20,000 for the three months
ended March 31, 2013. The provision for loan losses increased
$15,000, or 2.0%, to $777,000 for the year ended March 31, 2014 as
compared to $762,000 for the year ended March 31, 2013. The
increase in the provision for loan losses for the three months
ended March 31, 2014 was mainly the result of the need for the
replenishment of the general valuation allowance after a partial
charge-off on a one- to four-family residential real estate loan.
During the three months and year ended March 31, 2014, net
charge-offs totaled $92,000 and $206,000, respectively, while net
charge-offs totaled $0 and $352,000, respectively, during the three
months and year ended March 31, 2013. For the three months ended
March 31, 2014, the entire charge-off was on one one- to
four-family residential real estate loan, while the year ended
March 31, 2014 included additional charge-offs on two one- to
four-family residential real estate loans and one multi-family
troubled debt restructuring, net of partial recoveries from a
private mortgage insurance claim on one of the loans that was
charged-off in late 2012. For the 2013 periods, the total amount of
charge-offs were related to two one- to four-family residential
real estate loans, net of partial recoveries from a private
mortgage insurance claim on one of those loans. During the three
months and years ended March 31, 2014 and 2013, there also were
normal recurring adjustments made to the historical loss and other
qualitative factor components of Clifton Savings Bank’s general
valuation allowance. Non-accrual loans decreased $763,000, or
12.9%, from $5.9 million at March 31, 2013 to $5.1 million at March
31, 2014. A large portion of non-accrual loans at both period ends
were not seriously delinquent loans. Clifton Savings Bank’s
non-accrual policy requires loans that were previously 90 days or
more delinquent to remain on a non-accrual status until there is a
sustained period of repayment performance (generally six months) by
the borrower in accordance with the contractual terms of the loan.
Included in non-accrual loans at March 31, 2014 were eleven loans
totaling $2.7 million that were current or less than 90 days
delinquent. At March 31, 2013, thirteen loans totaling $2.3 million
that were less than 90 days delinquent were included in non-accrual
loans. The percentage of non-performing loans to total loans
decreased to 0.88% at March 31, 2014, from 1.29% at March 31,
2013.
Non-Interest Income
Non-interest income increased $43,000, or 13.9%, to $352,000 for
the three months ended March 31, 2014, as compared to $309,000 for
the three months ended March 31, 2013. The increase was due to
slight increases in income from fees and services charges as well
as income from bank owned life insurance.
Non-interest income increased $713,000, or 61.8%, to $1.87
million for the year ended March 31, 2014, as compared to $1.15
million for the year ended March 31, 2013, mainly due to the 2013
period including a $527,000 loss on the extinguishment of debt and
a $99,000 write-down of land held for sale. No such transactions
occurred during the year ended March 31, 2014. Gains on sales of
securities totaled $566,000 and $647,000, respectively, for the
years ended March 31, 2014 and 2013. The gains on the sales of
securities in 2014 includes gains from permitted sales of certain
held to maturity mortgage-backed securities which had principal
balances remaining of less than 15% of the principal balance
purchased.
Non-Interest Expense
Non-interest expense increased $489,000, or 13.3%, to $4.17
million for the three months ended March 31, 2014, as compared to
$3.68 million for the three months ended March 31, 2013. The
increase was primarily the result of increases of $424,000, or
21.0%, in salaries and employee benefits, $29,000, or 7.0%, in
occupancy expense, and $25,000, or 13.2%, in directors’
compensation. The increase in salaries and employee benefits in the
2014 period was mainly due to an increase in costs associated with
the salary, bonus and benefits of our new Chief Executive Officer
hired in January 2014, along with normal annual salary and benefit
expense increases. The increase in directors’ compensation was
mainly the result of an increase in the directors’ retirement
pension expense.
Non-interest expense increased $1.17 million, or 8.4%, to $15.1
million for the year ended March 31, 2014, as compared to $13.91
million for the year ended March 31, 2013. The increase was
primarily the result of an increase of $1.19 million, or 16.1%, in
salaries and employee benefits. The increase in salaries and
employee benefits in the 2014 period was mainly due to an increase
in costs associated with the salary, bonus and benefits of our new
Chief Executive Officer hired in January 2014, and the hiring of
two commercial loan officers, one in fiscal 2013 and one in fiscal
2014, along with normal annual salary and benefit expense
increases.
Income Taxes
Income taxes increased $20,000, or 2.5%, to $825,000 for the
three months ended March 31, 2014, as compared to $805,000 for the
three months ended March 31, 2013. Income taxes decreased $8,000,
or 0.2%, to $3.419 million for the year ended March 31, 2014, as
compared to $3.427 million for the year ended March 31, 2013. The
increase in income taxes for the current quarter was the result of
slightly higher pre-tax income and effective income tax rate, while
the decrease in income taxes for year ended March 31, 2014 was
mainly the result of lower pre-tax income partially offset by a
slightly higher effective income tax rate. The effective income tax
rate was 34.6% for the three months ended March 31, 2014 compared
with 34.5% for the three months ended March 31, 2013, and 34.6% for
the year ended March 31, 2014 compared with 34.1% for the year
ended March 31, 2013.
Balance Sheet Summary
The Company’s total assets increased $249.9 million, or 24.6%,
to $1.27 billion at March 31, 2014, from $1.02 billion at March 31,
2013. Net loans increased $127.7 million, or 28.0%, to $584.5
million at March 31, 2014 from $456.8 million at March 31, 2013
mainly due to origination volume and purchases of one- to
four-family loans being significantly higher than repayment levels.
Also contributing to the increase in net loans was an increase in
multi-family and commercial real estate loans as a result of the
Bank’s establishment of a commercial loan department in late 2012.
Securities, including both available for sale and held to maturity
issues, decreased $55.8 million, or 11.7%, to $422.3 million at
March 31, 2014 from $478.1 million at March 31, 2013 primarily as a
result of investment securities calls, principal repayments and
sales of mortgage-backed securities. Cash and cash equivalents
increased $166.7 million to $192.6 million at March 31, 2014 from
$25.9 million at March 31, 2013, mainly because of the inclusion of
proceeds from stock subscriptions of $154.3 million at March 31,
2014.
Total liabilities increased $243.1 million, or 29.3%, to $1.07
billion at March 31, 2014 from $828.8 million at March 31, 2013. At
March 31, 2014, liabilities included $154.3 million in stock
subscription proceeds received in connection with the Company’s
second step conversion. In order to fund loan growth, borrowed
funds increased $90.0 million, or 171.4%, to $142.5 million at
March 31, 2014 from $52.5 million at March 31, 2013, as six
borrowings totaling $90.0 million at an average rate of 0.58% were
originated during the period. The average rate of outstanding
borrowings as of March 31, 2014 was 1.68%. All outstanding
borrowings are with the Federal Home Loan Bank of New York.
Total stockholders’ equity increased $6.8 million, or 3.6%, to
$194.1 million at March 31, 2014 from $187.3 million at March 31,
2013. The increase resulted primarily from net income of $6.47
million, $4.05 million from the exercise of stock options and
related tax benefits, and employee stock ownership plan shares
committed to be released of $912,000, partially offset by cash
dividends paid of $4.65 million.
Paul M. Aguggia, the Company’s Chairman, Chief Executive Officer
and President, stated, “Our solid performance during the fourth
quarter, and throughout the past fiscal year, along with the
closing of our conversion and stock offering on April 1, 2014, has
put Clifton Savings Bank on firm footing. We are pleased with our
results and the support of the investor community, but we are
keenly aware as we begin this new chapter in the Company’s history
that we must stay focused on providing superior products and
services to our key targets in order to generate long-term
shareholder value.”
About the Company
Clifton Bancorp, Inc., a Maryland corporation, is the holding
company of Clifton Savings Bank, a federally chartered savings bank
headquartered in Clifton, New Jersey, which currently operates a
total of 12 full-service banking offices in northeast New
Jersey.
Forward-Looking Statements
Clifton Bancorp makes forward-looking statements in this news
release. These forward-looking statements may include: statements
of goals, intentions, earnings expectations, and other
expectations; estimates of risks and of future costs and benefits;
assessments of probable loan and lease losses; assessments of
market risk; and statements of the ability to achieve financial and
other goals.
Forward-looking statements are typically identified by words
such as “believe,” “expect,” “anticipate,” “intend,” “outlook,”
“estimate,” “forecast,” “project” and other similar words and
expressions. Forward-looking statements are subject to numerous
assumptions, risks and uncertainties, which change over time.
Forward-looking statements speak only as of the date they are made.
Clifton Bancorp does not assume any duty and does not undertake to
update its forward-looking statements. Because forward-looking
statements are subject to assumptions and uncertainties, actual
results or future events could differ, possibly materially, from
those that Clifton Bancorp anticipated in its forward-looking
statements and future results could differ materially from
historical performance.
Clifton Bancorp’s forward-looking statements are subject to the
following principal risks and uncertainties: general economic
conditions and trends, either nationally or locally; conditions in
the securities markets; changes in interest rates; changes in
deposit flows, and in the demand for deposit, loan, and investment
products and other financial services; changes in real estate
values; changes in the quality or composition of the Company’s loan
or investment portfolios; changes in competitive pressures among
financial institutions or from non-financial institutions; the
Company’s ability to retain key members of management; changes in
legislation, regulations, and policies; and a variety of other
matters which, by their nature, are subject to significant
uncertainties. Clifton Bancorp provides greater detail regarding
some of these factors in its prospectus included in its
Registration on Form S-1, which was declared effective by the SEC
on February 6, 2014, including the Risk Factors section of that
prospectus, and in its other SEC reports. Clifton Bancorp’s
forward-looking statements may also be subject to other risks and
uncertainties, including those that it may discuss elsewhere in
this news release or in its filings with the SEC, accessible on the
SEC’s website at www.sec.gov.
Selected Consolidated Financial and Other Data
At March 31, 2014 2013 (Dollars in
thousands)
Financial Condition Data: Total assets $
1,265,990 $ 1,016,084 Loans receivable, net 584,507 456,812 Cash
and cash equivalents 192,581 25,896 Securities 422,295 478,127
Deposits 763,912 763,692 FHLB advances 142,500 52,500 Stock
subscription deposits 154,345 - Total stockholders' equity 194,137
187,328
Year Ended March 31, 2014
2013 (Dollars in thousands)
Operating Data: Interest
income $ 33,737 $ 35,393 Interest expense 9,862
11,837 Net interest income 23,875 23,556 Provision for loan losses
777 762 Net interest income after provision for loan
losses 23,098 22,794 Noninterest income 1,867 1,154 Noninterest
expense 15,081 13,911 Income before income taxes
9,884 10,037 Income taxes 3,419 3,427 Net income $
6,465 $ 6,610 Basic and diluted earnings per share $ 0.25 $ 0.26
Three Months Ended March 31,
2014 2013 (Dollars in thousands)
Operating
Data: Interest income $ 8,657 $ 8,263 Interest expense
2,343 2,537 Net interest income 6,314 5,726 Provision for
loan losses 113 20 Net interest income after
provision for loan losses 6,201 5,706 Noninterest income 352 309
Noninterest expense 4,171 3,682 Income before income
taxes 2,382 2,333 Income taxes 825 805 Net income $
1,557 $ 1,528 Basic and diluted earnings per share $ 0.06 $ 0.06
At or For the Three At or For the
Year Ended Months Ended March 31, March
31, 2014 2013
2014 2013
Performance Ratios (1): Return on average assets 0.59 % 0.63
% 0.54 % 0.60 % Return on average equity 3.41 % 3.54 % 3.23 % 3.28
% Interest rate spread (2) 2.20 % 2.18 % 2.27 % 2.23 % Net interest
margin (3) 2.37 % 2.39 % 2.43 % 2.42 % Noninterest expense to
average assets 1.39 % 1.33 % 1.46 % 1.45 % Efficiency ratio (4)
58.59 % 56.30 % 62.57 % 61.01 % Average interest-earning assets to
average interest-bearing liabilities 1.17 x 1.18 x 1.17 x 1.17 x
Average equity to average assets 17.42 % 17.81 % 16.81 % 18.34 %
Basic and diluted earnings per share $ 0.25 $ 0.26 $ 0.06 $ 0.06
Dividends per share (5) $ 0.18 $ 0.24 $ 0.00 $ 0.00 Dividend payout
ratio (5) 71.88 % 93.09 % 0.00 % 0.00 %
Capital Ratios
(6): Core (tier 1) capital 13.41 % 16.41 % 13.41 % 16.41 % Tier
1 risk-based capital 35.03 % 39.92 % 35.03 % 39.92 % Total
risk-based capital 35.67 % 40.52 % 35.67 % 40.52 %
Asset
Quality Ratios: Allowance for loan losses as a percent of total
gross loans 0.52 % 0.55 % 0.52 % 0.55 % Allowance for loan losses
as a percent of nonperforming loans 59.84 % 42.41 % 59.84 % 42.41 %
Net charge-offs to average outstanding loans during the period 0.04
% 0.08 % 0.02 % 0.00 % Nonperforming loans as a percent of total
gross loans 0.88 % 1.29 % 0.88 % 1.29 % Nonperforming assets as a
percent of total assets 0.41 % 0.60 % 0.41 % 0.60 %
Other
Data: Number of full service customer service facilities 12 12
12 12
_____________________________
(1)
Performance ratios for the three month
periods presented are annualized.
(2)
Represents the difference between the
weighted average yield on average interest-earning assets and the
weighted average cost of interest-bearing liabilities.
(3)
Represents net interest income as a
percent of average interest-earning assets.
(4)
Represents noninterest expense divided by
the sum of net interest income and noninterest income, including
gains and losses on the sale, disposal or write-down of assets and
extinguishment of debt.
(5)
Reflects shares of common stock held by
stockholders of Clifton Savings Bancorp, Inc. including Clifton
MHC.
(6)
Ratios are for Clifton Savings Bank and
subsidiary only.
Clifton Bancorp Inc.Bart D’Ambra, 973-473-2200
Clifton Bancorp Inc. (MM) (NASDAQ:CSBK)
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