Clifton Bancorp Inc. (NasdaqGS:CSBK), the holding company for
Clifton Savings Bank (the “Bank”), today announced results for the
third quarter ended December 31, 2014. Net income for the third
quarter was $1.94 million ($0.08 per diluted share). This compares
to net income of $1.76 million ($0.07 per diluted share) for the
quarter ended December 31, 2013. Net income for the nine months
ended December 31, 2014 was $5.04 million ($0.20 per diluted share)
as compared to $4.91 million ($0.19 per diluted share) for the same
period in 2013.
Notable Items
- Quarterly income of $1.94 million, up
10.5% versus same 2013 period, represents the best quarterly result
since December 2011
- Continued investment of financial and
human resources in core business; in particular, completion of core
system conversion
- Net loans increased 1.9% and 7.6%
during the three and nine month periods ended December 31, 2014,
respectively
- Multi-family and commercial real estate
loans grew by $22.0 million, or 47.0%, from March 31, 2014
- Nonperforming loans to total gross
loans of 0.63% at December 31, 2014, the lowest level since
September 30, 2010
Paul M. Aguggia, Chairman, President, and Chief Executive
Officer, stated, “We strategically invested time and resources in
the third quarter implementing our core system, enabling us to
compete more effectively by offering additional products and
services. We are pleased to deliver increased earnings while we
implement strategies to grow our banking business. We will continue
to develop products, services and talent while leveraging our
capital prudently and striving to maintain pristine asset quality
and expense discipline.”
Balance Sheet and Credit Quality
Review
Total assets decreased $67.8 million, or 5.4%, to $1.20 billion
at December 31, 2014, from $1.27 billion at March 31, 2014. The
decrease in total assets was primarily due to paying down
borrowings and managing the cost of funds by allowing controlled
deposit runoff. In addition, the stock subscription deposits
received in connection with the Bank’s second-step conversion are
reflected in total assets at March 31, 2014. The conversion was
completed on April 1, 2014.
Net loans increased $44.4 million, or 7.6%, to $628.9 million at
December 31, 2014 from $584.5 million at March 31, 2014. One- to
four-family real estate loans increased $23.6 million, or 4.5%,
while multi-family and commercial real estate loans increased $22.0
million, or 47.0%, for the period. Securities, including both
available for sale and held to maturity issues, increased $24.2
million, or 5.7%, to $446.5 million at December 31, 2014 from
$422.3 million at March 31, 2014, primarily as a result of the
deployment of second- step conversion cash proceeds. Cash and cash
equivalents decreased $146.9 million, or 76.3%, to $45.7 million at
December 31, 2014 from $192.6 million at March 31, 2014. Stock
subscription deposits of $154.3 million are included at March 31,
2014. Cash and cash equivalents were redeployed into
higher-yielding assets following the completion of the second-step
conversion.
Deposits decreased $52.4 million, or 6.9%, to $711.5 million at
December 31, 2014 from $763.9 million at March 31, 2014, mainly due
to the downsizing of higher priced, rate-sensitive deposit
accounts. In addition, $5.9 million in deposits outstanding on
March 31, 2014 were used to purchase stock in the second-step
conversion. Borrowed funds decreased $30.0 million, or 21.1%, to
$112.5 million at December 31, 2014 from $142.5 million at March
31, 2014, as two borrowings were repaid in accordance with their
original terms during the period. The average rate of outstanding
borrowings as of December 31, 2014 is 2.01% and has an average term
of 21 months. All outstanding borrowings are with the Federal Home
Loan Bank of New York.
Total stockholders’ equity increased $169.7 million, or 87.4%,
to $363.8 million at December 31, 2014 from $194.1 million at March
31, 2014. The increase resulted primarily from net proceeds from
the second-step conversion of $163.2 million and net income of $5.0
million, partially offset by cash dividends paid of $6.1
million.
Non-accrual loans decreased $1.1 million, or 22.2%, to $4.0
million at December 31, 2014 from $5.1 million at March 31, 2014.
Included in non-accrual loans at December 31, 2014 were twelve
loans totaling $2.1 million that were current or less than 90 days
delinquent, but which were previously 90 days or more delinquent
and on a non-accrual status pending a sustained period of repayment
performance (generally six months). The percentage of nonperforming
loans to total gross loans decreased to 0.63% at December 31, 2014,
from 0.88% at March 31, 2014. This percentage is the lowest since
September 30, 2010. The percentage of allowance for loan losses to
nonperforming loans increased to 84.5% at December 31, 2014 from
59.84% at March 31, 2014.
During the nine months ended December 31, 2014, net charge-offs
totaled $313,000 as compared to $114,000 during the nine months
ended December 31, 2013. For the nine months ended December 31,
2014, the charge-offs related to five one- to four-family
residential real estate loans. For the 2013 period, the charge-offs
related to two one- to four-family residential real estate loans
and one multi-family loan restructuring, net of a partial recovery
from a private mortgage insurance claim on a loan charged-off in a
previous quarter.
Income Statement Review
Net interest income increased $652,000, or 10.7%, for the three
months ended December 31, 2014, to $6.74 million, as compared to
$6.09 million for three months ended December 31, 2013, reflecting
an increase of $141.1 million in average net interest-earning
assets coupled with an increase of 7 basis points in net interest
margin. Average interest-earning assets increased $80.9 million, or
7.8%, during the three months ended December 31, 2014, as compared
to the three months ended December 31, 2013, which consisted of
increases of $55.4 million in loans, $10.4 million in investment
securities, and $26.4 million in other interest-earning assets,
partially offset by a decrease of $11.3 million in mortgage-backed
securities. The average balance of loans increased as the Bank
continues to emphasize the growth of its loan portfolio; repayment
levels remained stable during the quarter. Investment securities
increased with the deployment of cash and cash equivalents into
higher-yielding agency securities. Other interest-earning assets
increased as funds received from calls and principal repayments of
investment and mortgage-backed securities were kept in cash and
cash equivalents. Mortgage-backed securities decreased due to
principal repayments of securities exceeding purchases as funds
were redeployed into loans and other investment securities. Average
interest-bearing liabilities decreased $60.2 million, or 6.8%,
during the three months ended December 31, 2014, primarily as a
result of decreases of $57.7 million in deposits and $2.5 million
in borrowings.
Net interest income increased $2.17 million, or 12.3%, for the
nine months ended December 31, 2014, to $19.73 million, as compared
to $17.56 million for nine months ended December 31, 2013,
reflecting an increase of $118.5 million in average net
interest-earning assets coupled with an increase of 2 basis points
in net interest margin. Average interest-earning assets increased
$113.3 million, or 11.4%, during the nine months ended December 31,
2014, as compared to the nine months ended December 31, 2013, and
consisted of increases of $90.8 million in loans, $12.9 million in
investment securities, and $30.4 million in other interest-earning
assets, partially offset by a decrease of $20.8 million in
mortgage-backed securities. The average balance of loans increased
while repayment levels remained stable. Investment securities
increased with the deployment of second-step conversion proceeds
into higher-yielding agency and municipal securities. Other
interest-earning assets increased as funds received from calls and
principal repayments of investment and mortgage-backed securities
remained in cash and cash equivalents. Mortgage-backed securities
decreased due to principal repayments of securities exceeding
purchases as funds were redeployed into loans and other investment
securities. Average interest-bearing liabilities decreased $5.3
million, or 0.6%, during the nine months ended December 31, 2014,
primarily as a result of a decrease of $45.8 million in deposits,
partially offset by an increase of $40.5 million in borrowings,
mostly originated in late 2013, which were used primarily to fund
loan growth.
The provision for loan losses increased $50,000, or 39.1%, to
$178,000 for the three months ended December 31, 2014 as compared
to $128,000 for the three months ended December 31, 2013, but
decreased $47,000, or 7.1%, to $617,000 for the nine months ended
December 31, 2014 as compared to $664,000 for the nine months ended
December 31, 2013. The decrease in the provision for loan losses
for the nine-month period ended December 31, 2014 was mainly the
result of more overall favorable trends in qualitative factors
related to delinquency and charge-off trends considered in the
periodic review of the general valuation allowance, even though the
actual provision for the 2014 three-month period was higher. During
the periods ended December 31, 2014 and 2013, there also were
typical recurring adjustments made to the historical loss and other
qualitative factor components of the Bank’s general valuation
allowance.
Non-interest income increased $86,000, or 27.7%, to $397,000 for
the three months ended December 31, 2014, as compared to $311,000
for the three months ended December 31, 2013. The increase was
mainly due to a $97,000 increase in income from bank owned life
insurance. The Bank purchased additional insurance during the 2014
period. Non-interest income decreased $296,000, or 19.5%, to $1.22
million for the nine months ended December 31, 2014, as compared to
$1.52 million for the nine months ended December 31, 2013. This
decrease was mainly due to the inclusion of $464,000 of additional
gains on sale of securities in the 2013 period, net of the increase
of $174,000 in income from bank owned life insurance in the 2014
period.
Non-interest expenses increased $462,000, or 12.8%, to $4.08
million for the three months ended December 31, 2014, as compared
to $3.61 million for the three months ended December 31, 2013, and
$1.83 million, or 16.8%, to $12.74 million for the nine months
ended December 31, 2014 as compared to $10.91 million for the same
2013 period. The increases for the three- and nine-month periods
were primarily the result of increases of $258,000, or 12.5%, and
$1.02 million, or 16.6%, respectively, in salaries and employee
benefits, $61,000, or 19.7%, and $207,000, or 22.5%, respectively,
in equipment expense, $88,000, or 195.6%, and $74,000, or 37.8%,
respectively, in advertising and marketing expenses, and $130,000,
or 33.6%, and $410,000, or 31.6%, respectively, in other
miscellaneous expenses. There was also a $141,000, or 21.7%,
increase in directors compensation for the nine months ended
December 31, 2014. The increases in salaries and employee benefits
in the 2014 periods were mainly due to an increase in costs
associated with the transition and expansion of our management
team, along with annual salary and benefit expense increases,
including an increase of $171,000 and $500,000, respectively, in
employee stock ownership plan expenses for the three- and
nine-month periods ended December 31, 2014. The increases in
equipment expense for the three and nine-month periods ended
December 31, 2014 were related to $97,000 and $263,000,
respectively, in expenditures associated with the core processor
change. Advertising and marketing expenses increased for the
periods as management has intensified efforts to offer new products
and expand the Bank’s current customer base. Miscellaneous expenses
include typical annual increases in operational expenses, as well
as expenses associated with consultants and new investments in the
Bank’s core business and in expenses related to the core processor
change during the nine-month period ended December 31, 2014. The
increase in directors’ compensation for the nine-month period
related to a charge recorded as a result of a one-time payment from
the directors’ retirement plan.
About Clifton Bancorp
Inc.
Clifton Bancorp Inc. is the holding company of Clifton Savings
Bank, a federally chartered savings bank headquartered in Clifton,
New Jersey. Clifton Savings Bank is an organization with dedicated
people serving communities, residents and businesses. Clifton
Savings operates 12 full-service banking offices located in the
diverse and vibrant Northeastern counties of 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 loan or
investment portfolios; changes in competitive pressures among
financial institutions or from non-financial institutions; the
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 the “Risk Factors” section of its Annual
Report on Form 10-K, which was filed on June 6, 2014. 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 Condition Data
At December 31,
At March 31, 2014 2014 (In
thousands)
Financial Condition Data: Total assets $1,198,171
$1,265,990 Loans receivable, net 628,872 584,507 Cash and cash
equivalents 45,668 192,581 Securities 446,511 422,295 Deposits
711,486 763,912 FHLB advances 112,500 142,500 Stock subscription
deposits - 154,345 Total stockholders' equity 363,765 194,137
Selected Consolidated Operating Data Three
Months Ended Nine Months Ended December 31,
December 31, 2014 2013 2014 2013
(In thousands, except share and per share data)
Operating
Data: Interest income $ 8,993 $ 8,583 $ 26,604 $ 25,080
Interest expense 2,249 2,491 6,877
7,519 Net interest income 6,744 6,092 19,727 17,561 Provision for
loan losses 178 128 617 664 Net
interest income after provision for loan losses 6,566 5,964 19,110
16,897 Non-interest income 397 311 1,219 1,515 Non-interest
expenses 4,075 3,613 12,744 10,910
Income before income taxes 2,888 2,662 7,585 7,502 Income taxes
948 907 2,544 2,594 Net income $ 1,940
$ 1,755 $ 5,041 $ 4,908 Basic and diluted earnings per share $ 0.08
$ 0.07 $ 0.20 $ 0.19 Average shares outstanding - basic
25,594 25,387 25,391 25,325 Average shares outstanding - diluted
25,728 25,643 25,565 25,570
Average Balance
Table Three Months Ended December 31, 2014
2013 Interest Interest Average
and Yield/ Average and Yield/
Balance Dividends Cost Balance
Dividends Cost Assets: (Dollars in thousands)
Interest-earning assets: Loans receivable $624,831 $5,919 3.79%
$569,387 $5,471 3.84% Mortgage-backed securities 302,989 2,281
3.01% 314,301 2,492 3.17% Investment securities 150,325 704 1.87%
139,956 569 1.63% Other interest-earning assets 37,554 89 0.95%
11,142 51 1.83% Total interest-earning assets 1,115,699 8,993 3.22%
1,034,786 8,583 3.32% Non-interest-earning assets 85,720
61,952
Total assets $1,201,419 $1,096,738
Liabilities and stockholders' equity:
Interest-bearing liabilities: Demand accounts $55,006 18 0.13%
$57,625 19 0.13% Savings and Club accounts 138,601 59 0.17% 160,750
135 0.34% Certificates of deposit 514,687 1,594 1.24% 547,575 1,755
1.28% Total interest-bearing deposits 708,294 1,671 0.94% 765,950
1,909 1.00% FHLB Advances 112,500 578 2.06% 115,000 582 2.02% Total
interest-bearing liabilities 820,794 2,249 1.10% 880,950 2,491
1.13% Non-interest-bearing liabilities: Non-interest-bearing
deposits 10,662 16,527 Other non-interest-bearing liabilities 9,744
9,904 Total non-interest-bearing liabilities 20,406 26,431
Total liabilities 841,200 907,381 Stockholders' equity 360,219
189,357
Total liabilities and stockholders' equity
$1,201,419 $1,096,738 Net interest income
$6,744 $6,092 Interest rate spread 2.12% 2.19% Net interest margin
2.42% 2.35% Average interest-earning assets to average
interest-bearing liabilities 1.36 x 1.17 x
Nine Months Ended December 31, 2014
2013 Interest
Interest Average and
Yield/ Average and Yield/
Balance Dividends Cost Balance
Dividends Cost Assets: (Dollars in thousands)
Interest-earning assets: Loans receivable $611,422 $17,394 3.79%
$520,633 $15,433 3.95% Mortgage-backed securities 304,587 6,985
3.06% 325,402 7,822 3.20% Investment securities 147,308 1,960 1.77%
134,441 1,692 1.68% Other interest-earning assets 46,572 265 0.76%
16,159 133 1.10% Total interest-earning assets 1,109,889 26,604
3.20% 996,635 25,080 3.36% Non-interest-earning assets
115,236 68,720
Total assets $1,225,125
$1,065,355 Liabilities and stockholders'
equity: Interest-bearing liabilities: Demand accounts $55,862
55 0.13% $57,798 61 0.14% Savings and Club accounts 140,499 183
0.17% 151,375 339 0.30% Certificates of deposit 525,402 4,875 1.24%
558,358 5,551 1.33% Total interest-bearing deposits 721,763 5,113
0.94% 767,531 5,951 1.03% FHLB Advances 123,000 1,764 1.91% 82,500
1,568 2.53% Total interest-bearing liabilities 844,763 6,877 1.09%
850,031 7,519 1.18% Non-interest-bearing liabilities:
Non-interest-bearing deposits 11,458 15,094 Other
non-interest-bearing liabilities 11,527 11,812 Total
non-interest-bearing liabilities 22,985 26,906 Total
liabilities 867,748 876,937 Stockholders' equity 357,377 188,418
Total liabilities and stockholders' equity $1,225,125
$1,065,355 Net interest income $19,727 $17,561
Interest rate spread 2.11% 2.18% Net interest margin 2.37% 2.35%
Average interest-earning assets to average interest-bearing
liabilities 1.31 x 1.17 x
Asset Quality
Data Nine Months Year
Ended Ended December 31,
March
31,
2014 2014 (Dollars in thousands) Allowance for loan
losses: Allowance at beginning of period $ 3,071 $ 2,500 Provision
for loan losses 617 777 Charge-offs (313 ) (222 ) Recoveries
- 16 Net charge-offs (313 ) (206 )
Allowance at end of period $ 3,375 $ 3,071
Allowance for loan losses to total gross loans 0.54 %
0.52 % Allowance for loan losses to nonperforming loans 84.50 %
59.84 %
At December 31, At March 31,
2014 2014 (Dollars in thousands) Nonperforming
Assets: Nonaccrual loans: One- to four-family real estate $ 3,481 $
4,848 Commercial real estate 440 247 Consumer real estate 73
37
Total nonaccrual loans
3,994 5,132 Real estate owned - -
Total nonperforming assets
$ 3,994 $ 5,132 Total nonperforming loans to
total gross loans 0.63 % 0.88 % Total nonperforming assets to total
assets 0.33 % 0.41 %
Selected Consolidated Financial Ratios
Three Months Ended Nine Months Ended
December 31, December 31,
Selected
Performance Ratios (1):
2014 2013 2014 2013 Return on average
assets 0.65% 0.64% 0.55% 0.61% Return on average equity 2.15% 3.71%
1.88% 3.47% Interest rate spread 2.12% 2.19% 2.11% 2.18% Net
interest margin 2.42% 2.35% 2.37% 2.35% Non-interest expenses to
average assets 1.36% 1.32% 1.39% 1.37% Efficiency ratio (2) 57.06%
56.43% 60.84% 57.19% Average interest-earning assets to average
interest-bearing liabilities 1.36x 1.17x 1.31x 1.17x Average equity
to average assets 29.98% 17.27% 29.17% 17.69% Dividend payout ratio
78.87% 88.26% 120.49% 94.68% Net charge-offs to average outstanding
loans during the period 0.03% 0.02% 0.07% 0.03%
Capital Ratios
(3):
Core (tier 1) capital 21.09% 15.27% 21.09% 15.27% Tier 1 risk-based
capital 46.72% 15.15% 46.72% 35.15% Total risk-based capital 47.37%
35.79% 47.37% 35.79% (1) Performance ratios are
annualized.
(2) Represents non-interest expense
divided by the sum of net interest income and non-interest
income including gains and losses on the
sale of assets.
(3) Ratios are for Clifton Savings Bank and subsidiary only.
Quarterly Data Quarter
Ended December 31, September
30, June 30, March 31, December 31,
2014 2014 2014 2014 2013 (In
thousands except shares and per share data)
Operating
Data
Interest income $ 8,993 $ 8,899 $ 8,712 $ 8,657 $ 8,583 Interest
expense 2,249 2,317 2,311
2,343 2,491 Net interest income 6,744
6,582 6,401 6,314 6,092 Provision for loan losses 178
301 138 113 128
Net interest income after provision for loan losses 6,566
6,281 6,263 6,201 5,964 Non-interest income 397 474 348 352 311
Non-interest expenses 4,075 4,532
4,137 4,171 3,613 Income
before income taxes 2,888 2,223 2,474 2,382 2,662 Income taxes
948 744 852 825
907 Net income $ 1,940 $ 1,479 $
1,622 $ 1,557 $ 1,755
Share
Data
Basic and diluted earnings per share $ 0.08 $ 0.06 $ 0.06 $ 0.06 $
0.07 Dividends per share $ 0.06 $ 0.06 $ 0.12 $ - $ 0.06 Average
shares outstanding - basic 25,594 25,333 25,244 25,590 25,387
Average shares outstanding - diluted 25,728 25,521 25,413 25,817
25,643 Shares outstanding at period end 27,145 26,676 26,596 26,529
26,470
Financial
Condition Data
Total assets $ 1,198,171 $ 1,211,527 $ 1,231,730 $ 1,265,990 $
1,099,073 Loans receivable, net 628,872 617,024 610,950 584,507
577,388 Cash and cash equivalents 45,668 74,979 85,042 192,581
11,901 Securities 446,511 454,595 470,605 422,295 450,203 Deposits
711,486 731,070 736,557 763,912 774,529 FHLB advances 112,500
112,500 127,500 142,500 122,500 Stock subscription deposits - - -
154,345 - Total stockholders' equity 363,765 357,693 356,491
194,137 191,460
Assets
Quality:
Total nonperforming assets $ 3,994 $ 4,509 $ 5,595 $ 5,132 $ 4,561
Total nonperforming loans to total gross loans 0.63 % 0.73 % 0.89 %
0.88 % 0.79 % Total nonperforming assets to total assets 0.33 %
0.37 % 0.45 % 0.41 % 0.41 % Allowance for loan losses $ 3,375 $
3,250 $ 3,125 $ 3,071 $ 3,050 Allowance for loan losses to total
gross loans 0.54 % 0.53 % 0.51 % 0.52 % 0.53 % Allowance for loan
losses to nonperforming loans 84.50 % 72.08 % 57.12 % 59.84 % 66.87
% As a result of the completion of the second-step
conversion on April 1, 2014, share and per share data, as
appropriate, was adjusted to reflect the 0.9791 exchange ratio for
preceding periods.
Clifton Bancorp Inc.Bart D’Ambra, 973-473-2200
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