CSBK Clifton Bancorp Inc. (MM)

Clifton Bancorp Inc. (Nasdaq: CSBK) (the “Company”), the holding company for Clifton Savings Bank, today announced results for the third quarter ended December 31, 2015. Net income for the third quarter was $1.33 million ($0.06 per share, basic, $0.05 per share, diluted) as compared to net income of $1.94 million ($0.08 per share, basic and diluted) for the quarter ended December 31, 2014. Net income for the nine months ended December 31, 2015 was $4.52 million ($0.18 per share, basic and diluted) as compared to $5.04 million ($0.20 per share, basic and diluted) for the same period in 2014.

The Board of Directors also announced today that the Company will pay a cash dividend of $0.06 per common share for the quarter ended December 31, 2015. The dividend will be paid on March 4, 2016 to stockholders of record on February 19, 2016.

Notable Items

• Net loan portfolio growth of 9.2% since March 31, 2015, and 3.4% since September 30, 2015;
• Nonperforming loans to total gross loans decreased to 0.63% at December 31, 2015 from 0.88% at March 31, 2015; and
• 350,900 shares of common stock were repurchased during the third quarter of 2015 at a weighted average share price of $14.40.

Paul M. Aguggia, Chairman, President, and Chief Executive Officer, stated, “We again maintained consistent earnings while investing in our core business through hiring, training and product development. We did so with the headwinds of margin pressure and in the face of intense competition. Of particular note was the increase in our commercial and multi-family loan portfolio, which grew from $75.8 million to $90.4 million, or 19.2%. The quarter also allowed us to repurchase our shares at attractive prices. Through January 29, 2016, the Company has repurchased 3,175,724 shares at a weighted average price of $13.89 per share. We plan to continue these initiatives throughout 2016.”

Balance Sheet and Credit Quality Review

Total assets decreased $19.2 million, or 1.6%, to $1.17 billion at December 31, 2015, from $1.19 billion at March 31, 2015. The decrease in total assets was primarily due to a decrease in cash, a significant amount of which was used to repurchase shares of Company common stock.

Net loans increased $59.2 million, or 9.2%, to $700.3 million at December 31, 2015 from $641.1 million at March 31, 2015, primarily due to growth in the residential real estate loan portfolio of $42.4 million, or 7.6%, and multi-family and commercial loans of $16.2 million, or 21.8%. Securities decreased $61.9 million, or 14.8%, to $357.0 million at December 31, 2015 from $418.9 million at March 31, 2015, mainly as a result of calls, maturities and repayments on securities. Securities totaling $1.9 million were sold during the nine months ended December 31, 2015, resulting in a gain of $72,000. Cash and cash equivalents decreased $18.8 million, or 38.2%, to $30.5 million at December 31, 2015 from $49.3 million at March 31, 2015.

Deposits decreased $25.5 million, or 3.6%, to $674.0 million at December 31, 2015 from $699.5 million at March 31, 2015 as we emphasized the generation of non-time deposits while not matching our competition’s rates on maturing CDs. Borrowed funds increased $39.5 million, or 36.7%, to $147.0 million at December 31, 2015 from $107.5 million at March 31, 2015, as borrowings were utilized to fund loan growth. The Company’s outstanding borrowings as of December 31, 2015 have an average rate of 1.97% and an average term of 21 months. All outstanding borrowings are with the Federal Home Loan Bank of New York.

Total stockholders’ equity decreased $34.0 million, or 9.3%, to $334.0 million at December 31, 2015 from $368.0 million at March 31, 2015, primarily as a result of $36.4 million in repurchases of common stock, and the payment of $5.9 million in cash dividends, partially offset by net income of $4.5 million.

Non-accrual loans decreased $1.3 million, or 22.3%, to $4.4 million at December 31, 2015 from $5.6 million at March 31, 2015. Included in non-accrual loans at December 31, 2015 were eight loans totaling $1.2 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, 2015 from 0.88% at March 31, 2015. The allowance for loan losses to nonperforming loans increased to 85.48% at December 31, 2015 from 61.53% at March 31, 2015.

Income Statement Review

Net interest income decreased by $308,000, or 4.6%, to $6.44 million for the three months ended December 31, 2015 as compared to $6.74 million for the three months ended December 31, 2014. The decrease in net interest income was primarily the result of a decrease of $9.4 million in average net interest-earning assets, primarily mortgage-backed and investment securities, coupled with a decrease of 4 basis points in net interest margin.

Net interest income decreased $174,000, or 0.9%, to $19.55 million for the nine months ended December 31, 2015 as compared to $19.73 million for the nine months ended December 31, 2014, despite an increase of $29.2 million in average net interest-earning assets and an increase of 3 basis points in net interest margin.

The provision for loan losses increased $11,000, or 6.2%, to $189,000 for the three months ended December 31, 2015, as compared to $178,000 for the three months ended December 31, 2014, and decreased $255,000, or 41.3%, to $362,000 for the nine months ended December 31, 2015, as compared to $617,000 for the nine months ended December 31, 2014. The decrease in the provision for the nine months ended December 31, 2015 was mainly the result of overall favorable trends in qualitative factors related to delinquencies considered in the periodic review of the general valuation allowance as well as the decrease in charge-offs.

Non-interest income increased $63,000, or 15.9%, to $460,000 for the three months ended December 31, 2015 from $397,000 for the three months ended December 31, 2014, due to an increase in income from bank owned life insurance. Non-interest income increased $207,000, or 17.0%, to $1.43 million for the nine months ended December 31, 2015 from $1.22 million for the nine months ended December 31, 2014. The increase was mainly attributable to an increase in income from bank owned life insurance, net of a decrease in gains on sales of securities. Securities available for sale totaling $1.9 million were sold during the nine months ended December 31, 2015, resulting in a gain of $72,000, while securities available for sale totaling $1.0 million were sold during the nine months ended December 31, 2014, resulting in a gain of $102,000.

Non-interest expenses increased $758,000, or 18.6%, to $4.83 million for the three months ended December 31, 2015, as compared to $4.08 million for the three months ended December 31, 2014. Non-interest expenses increased $1.18 million, or 9.3%, to $13.93 million for the nine months ended December 31, 2015, as compared to $12.74 million for the nine months ended December 31, 2014. The increase for the three-month period was driven by an increase in salaries and employee benefits of $578,000, or 24.9%, and directors’ compensation of $138,000, or 66.7%. The increase in salaries and employee benefits includes typical annual increases in compensation and benefits expenses and costs related to the hiring of additional personnel, as well as an increase in employee stock ownership plan expense due an increase in the price of the Company’s common stock, and the expense related to the granting of equity awards under the Company’s 2015 Equity Incentive Plan. The increase in directors’ compensation was primarily due to expenses related to the granting of equity awards under the 2015 Equity Incentive Plan. The three-month and nine-month periods ended December 31, 2015 include expenses totaling $436,000 ($289,000 for salaries and employee benefits, and $147,000 in directors’ compensation) and $585,000 (389,000 for salaries and employee benefits, and $196,000 in directors’ compensation) related to the granting of equity awards granted in September 2015 under the 2015 Equity Incentive Plan. The increase in non-interest expenses for the nine month period consisted primarily of an increase in salaries and employee benefits of $1.15 million, or 16.1%, and was attributable to the same items as noted above, along with an increase in professional services of $84,000, or 15.0%, mainly for legal fees related to the development and implementation of products and services and the Bank’s branding and marketing efforts.

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 5, 2015. 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, 2015   2015 (In thousands) Financial Condition Data: Total assets $ 1,167,739 $ 1,186,924 Loans receivable, net 700,283 641,084 Cash and cash equivalents 30,493 49,308 Securities 356,977 418,875 Deposits 674,002 699,476 FHLB advances 147,000 107,500 Total stockholders' equity 333,956 368,001     Selected Consolidated Operating Data Three Months Ended Nine Months Ended December 31, December 31, 2015   2014 2015   2014 (In thousands, except share and per share data)   Operating Data: Interest income $ 8,736 $ 8,993 $ 26,187 $ 26,604 Interest expense   2,300   2,249   6,634   6,877 Net interest income 6,436 6,744 19,553 19,727 Provision for loan losses   189   178   362   617

Net interest income after provision for loan losses

6,247 6,566 19,191 19,110 Non-interest income 460 397 1,426 1,219 Non-interest expenses   4,833   4,075   13,928   12,744 Income before income taxes 1,874 2,888 6,689 7,585 Income taxes   549   948   2,166   2,544 Net income $ 1,325 $ 1,940 $ 4,523 $ 5,041 Basic earnings per share $ 0.06 $ 0.08 $ 0.18 $ 0.20 Diluted earnings per share $ 0.05 $ 0.08 $ 0.18 $ 0.20   Average shares outstanding - basic 24,045 25,594 24,674 25,391 Average shares outstanding - diluted 24,091 25,728 24,732 25,565                   Average Balance Table Three Months Ended December 31, 2015   2014 Interest Interest Average and Yield/ Average and Yield/

Balance

Dividends

Cost

Balance

Dividends

Cost

Assets: (Dollars in thousands) Interest-earning assets: Loans receivable $ 690,633 $ 6,320 3.66 % $ 624,831 $ 5,919 3.79 % Mortgage-backed securities 272,904 1,861 2.73 % 302,989 2,281 3.01 % Investment securities 90,323 481 2.13 % 150,325 704 1.87 % Other interest-earning assets   27,418   74 1.08 %   37,554   89 0.95 % Total interest-earning assets 1,081,278   8,736 3.23 % 1,115,699   8,993 3.22 % Non-interest-earning assets   76,825   85,720 Total assets $ 1,158,103 $ 1,201,419   Liabilities and stockholders' equity: Interest-bearing liabilities: Demand accounts $ 54,474 15 0.11 % $ 55,006 18 0.13 % Savings and Club accounts 139,017 62 0.18 % 138,601 59 0.17 % Certificates of deposit   466,011   1,531 1.31 %   514,687   1,594 1.24 % Total interest-bearing deposits 659,502 1,608 0.98 % 708,294 1,671 0.94 % FHLB Advances   136,250   692 2.03 %   112,500   578 2.06 % Total interest-bearing liabilities 795,752   2,300 1.16 % 820,794   2,249 1.10 %   Non-interest-bearing liabilities: Non-interest-bearing deposits 14,683 10,662 Other non-interest-bearing liabilities   11,248   9,744 Total non-interest-bearing liabilities   25,931   20,406   Total liabilities 821,683 841,200 Stockholders' equity   336,420   360,219 Total liabilities and stockholders' equity $ 1,158,103 $ 1,201,419   Net interest income $ 6,436 $ 6,744 Interest rate spread 2.07 % 2.12 % Net interest margin 2.38 % 2.42 %

Average interest-earning assets to average interest-bearing liabilities

1.36 x 1.36 x   Nine Months Ended December 31, 2015   2014 Interest Interest Average and Yield/ Average and Yield/

Balance

Dividends

Cost

Balance

Dividends

Cost

Assets: (Dollars in thousands) Interest-earning assets: Loans receivable $ 668,202 $ 18,394 3.67 % $ 611,422 $ 17,394 3.79 % Mortgage-backed securities 275,500 5,702 2.76 % 304,587 6,985 3.06 % Investment securities 111,186 1,868 2.24 % 147,308 1,960 1.77 % Other interest-earning assets   29,109   223 1.02 %   46,572   265 0.76 % Total interest-earning assets 1,083,997   26,187 3.22 % 1,109,889   26,604 3.20 % Non-interest-earning assets   78,163   115,236 Total assets $ 1,162,160 $ 1,225,125   Liabilities and stockholders' equity: Interest-bearing liabilities: Demand accounts $ 53,854 45 0.11 % $ 55,862 55 0.13 % Savings and Club accounts 140,951 178 0.17 % 140,499 183 0.17 % Certificates of deposit   473,823   4,545 1.28 %   525,402   4,875 1.24 % Total interest-bearing deposits 668,628 4,768 0.95 % 721,763 5,113 0.94 % FHLB Advances   121,000   1,866 2.06 %   123,000   1,764 1.91 % Total interest-bearing liabilities 789,628   6,634 1.12 % 844,763   6,877 1.09 %   Non-interest-bearing liabilities: Non-interest-bearing deposits 14,070 11,458 Other non-interest-bearing liabilities   11,648   11,527 Total non-interest-bearing liabilities   25,718   22,985   Total liabilities 815,346 867,748 Stockholders' equity   346,814   357,377 Total liabilities and stockholders' equity $ 1,162,160 $ 1,225,125   Net interest income $ 19,553 $ 19,727 Interest rate spread 2.10 % 2.11 % Net interest margin 2.40 % 2.37 %

Average interest-earning assets to average interest-bearing liabilities

1.37 x 1.31 x       Asset Quality Data Nine Months Year Ended Ended December 31, March 31, 2015 2015 (Dollars in thousands) Allowance for loan losses: Allowance at beginning of period $ 3,475 $ 3,071

Provision for loan losses

362 717   Charge-offs (90 ) (313 ) Recoveries   3     -   Net charge-offs (87 ) (313 )     Allowance at end of period $ 3,750   $ 3,475     Allowance for loan losses to total gross loans 0.53 % 0.54 % Allowance for loan losses to nonperforming loans 85.48 % 61.53 %     At December 31, At March 31, 2015 2015 (Dollars in thousands) Nonperforming Assets:

Nonaccrual loans:

One- to four-family real estate $ 3,572 $ 4,555 Multi-family real estate 563 581 Commercial real estate 189 439 Consumer real estate   63     73   Total nonaccrual loans 4,387 5,648 Real estate owned   -     -   Total nonperforming assets $ 4,387   $ 5,648     Total nonperforming loans to total gross loans 0.63 % 0.88 % Total nonperforming assets to total assets 0.38 % 0.48 %               Selected Consolidated Financial Ratios Three Months Ended Nine Months Ended December 31, December 31,

Selected Performance Ratios (1):

2015 2014 2015 2014 Return on average assets 0.46% 0.65% 0.52% 0.55% Return on average equity 1.58% 2.15% 1.74% 1.88% Interest rate spread 2.07% 2.12% 2.10% 2.11% Net interest margin 2.38% 2.42% 2.40% 2.37% Non-interest expenses to average assets 1.67% 1.36% 1.60% 1.39% Efficiency ratio (2) 70.08% 57.06% 66.39% 60.84%

Average interest-earning assets to average interest-bearing liabilities

1.36x 1.36x 1.37x 1.31x Average equity to average assets 29.05% 29.98% 29.84% 29.17% Dividend payout ratio 110.57% 78.87% 130.78% 120.49% Net charge-offs to average ourtstanding loans during the periods 0.04% 0.03% 0.02% 0.07%      

(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.

 

 

      Quarterly Data Quarter Ended December 31, September 30, June 30, March 31, December 31,

2015

2015

2015

2015

2014

(In thousands except shares and per share data)

Operating Data

Interest income $ 8,736 $ 8,739 $ 8,712 $ 8,558 $ 8,993 Interest expense   2,300     2,199     2,135     2,157     2,249   Net interest income 6,436 6,540 6,577 6,401 6,744 Provision for loan losses   189     100     73     100     178  

Net interest income after provision for loan losses

6,247 6,440 6,504 6,301 6,566 Non-interest income 460 452 514 3,094 397 Non-interest expenses   4,833     4,580     4,515     4,362     4,075   Income before income taxes 1,874 2,312 2,503 5,033 2,888 Income taxes   549     772     845     1,520     948   Net income $ 1,325   $ 1,540   $ 1,658   $ 3,513   $ 1,940    

Share Data

Basic earnings per share $ 0.06 $ 0.06 $ 0.07 $ 0.14 $ 0.08 Diluted earnings per share $ 0.05 $ 0.06 $ 0.07 $ 0.13 $ 0.08 Dividends per share $ 0.06 $ 0.06 $ 0.12 $ 0.06 $ 0.06 Average shares outstanding - basic 24,045 24,554 25,421 25,979 25,594 Average shares outstanding - diluted 24,091 24,608 25,494 26,073 25,728 Shares outstanding at period end 25,394 25,745 25,960 27,326 27,145  

Financial Condition Data

Total assets $ 1,167,739 $ 1,153,895 $ 1,152,707 $ 1,186,924 $ 1,198,171 Loans receivable, net 700,283 677,286 654,802 641,084 628,872 Cash and cash equivalents 30,493 17,869 23,498 49,308 45,668 Securities 356,977 379,582 395,386 418,875 446,511 Deposits 674,002 678,624 685,248 699,476 711,486 FHLB advances 147,000 124,000 107,500 107,500 112,500 Total stockholders' equity 333,956 338,267 347,764 368,001 363,765  

Assets Quality:

Total nonperforming assets $ 4,387 $ 4,330 $ 5,340 $ 5,648 $ 3,994 Total nonperforming loans to total gross loans 0.63 % 0.64 % 0.81 % 0.88 % 0.63 % Total nonperforming assets to total assets 0.38 % 0.38 % 0.46 % 0.48 % 0.33 % Allowance for loan losses $ 3,750 $ 3,625 $ 3,525 $ 3,475 $ 3,375 Allowance for loan losses to total gross loans 0.53 % 0.53 % 0.54 % 0.54 % 0.54 % Allowance for loan losses to nonperforming loans 85.48 % 83.72 % 66.01 % 61.53 % 84.50 %  

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Clifton Bancorp Inc.Bart D’Ambra, 973-473-2200