Clifton Bancorp Inc. (Nasdaq:CSBK) (the “Company”), the holding company for Clifton Savings Bank, today announced results for the quarter and year ended March 31, 2016. Net income for the quarter was $878,000 ($0.04 per share, basic and diluted) as compared to net income of $3.51 million ($0.14 per share, basic, $0.13 per share, diluted) for the quarter ended March 31, 2015. Net income for the year ended March 31, 2016 was $5.40 million ($0.22 per share, basic and diluted) as compared to $8.55 million ($0.33 per share, basic and diluted) for fiscal 2015.

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 March 31, 2016. The dividend will be paid on June 10, 2016 to stockholders of record on May 27, 2016.

The results of operations for the three months and year ended March 31, 2016 were most significantly affected by:

  • Gains on sale of securities, which decreased $1.9 million for both the three months and year ended March 31, 2016;
  • Increases in provision for loan losses of $603,000 and $348,000, for the three months and year ended March 31, 2016, respectively, mainly due to loan growth;
  • Increases in salaries and employee benefits and directors’ compensation expenses related to the 2015 Equity Incentive Plan, which, in total, amounted to $439,000 and $1.02 million, respectively, for the three months and year ended March 31, 2016;
  • Decreases in income from bank owned life insurance of $788,000 and $536,000, for the three months and year ended March 31, 2016, respectively, due to the prior year including proceeds from a death benefit.

Other Notable Items

  • Net loans increased 11.4% and 21.7%, or $79.9 million and $139.1 million, during the three months and year ended March 31, 2016, respectively;
  • One-to-four family real estate loans increased 3.0% and 10.8%, or $18.0 million and $60.4 million, during the three months and year ended March 31, 2016, respectively;
  • Multi-family and commercial real estate loans increased 69.9% and 106.9%, or $63.2 million and $79.4 million, during the three months and year ended March 31, 2016, respectively;
  • Loan mix between one-to-four family real estate, and multi-family and commercial real estate loans to total loans shifted from 86.7% and 11.6%, respectively, at March 31, 2015 to 79.0% and 19.7%, respectively, at March 31, 2016;
  • Nonperforming loans to total gross loans decreased to 0.47% at March 31, 2016 from 0.88% at March 31, 2015;
  • 1,387,029 and 4,007,753 shares of common stock were repurchased during the three months and year ended March 31, 2016, respectively, at a weighted average price of $14.28 and $14.02 per share.

Paul M. Aguggia, Chairman, President, and Chief Executive Officer, stated, “Our fiscal year 2016 results demonstrate that our strategic plan is being implemented effectively. We generated a significant increase in our multi-family and commercial real estate portfolios and continued to shift our deposit base to transactional accounts. Much of this was accomplished in our fourth quarter. In addition, our investment in talented professionals, initiatives to generate business, innovative products, and our new Hoboken location are taking root. We look forward to building upon the momentum created during the quarter and the year.”

Balance Sheet and Credit Quality Review

Total assets increased $66.2 million, or 5.6%, to $1.25 billion at March 31, 2016, from $1.19 billion at March 31, 2015. The increase in total assets was primarily due to an increase in loans.

Net loans increased $139.1 million, or 21.7%, to $780.2 million at March 31, 2016 from $641.1 million at March 31, 2015. One-to-four family real estate loans increased $60.4 million, or 10.8%, while multi-family and commercial real estate loans increased $79.4 million, or 106.9%, during fiscal 2016. The increase included $38.5 million in participations in commercial real estate loans purchased from in-market financial institutions. Securities, including both available for sale and held to maturity issues, decreased $61.4 million, or 14.7%, to $357.5 million at March 31, 2016 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 year ended March 31, 2016, resulting in a gain of $72,000. Cash and cash equivalents decreased $18.2 million, or 37.0%, to $31.1 million at March 31, 2016 from $49.3 million at March 31, 2015.

Deposits decreased $4.8 million, or 0.7%, to $694.7 million at March 31, 2016 from $699.5 million at March 31, 2015. The Company’s emphasis on transaction account generation resulted in a 3.1% increase in the final quarter of 2016. Borrowed funds increased $124.0 million, or 115.4%, to $231.5 million at March 31, 2016 from $107.5 million at March 31, 2015. The Company’s outstanding borrowings as of March 31, 2016 have a weighted average rate of 1.53% and a weighted average term of 16 months. All outstanding borrowings are with the Federal Home Loan Bank of New York.

Total stockholders’ equity decreased $52.7 million, or 14.3%, to $315.3 million at March 31, 2016 from $368.0 million at March 31, 2015, primarily as a result of $56.3 million in repurchases of common stock, and the payment of $7.3 million in cash dividends, partially offset by net income of $5.4 million.

Non-accrual loans decreased $1.9 million, or 35.2%, to $3.7 million at March 31, 2016 from $5.6 million at March 31, 2015. Included in non-accrual loans at March 31, 2016 were six loans totaling $606,000 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 0.47% at March 31, 2016 from 0.88% at March 31, 2015. The allowance for loan losses to nonperforming loans increased to 119.19% at March 31, 2016 from 61.53% at March 31, 2015, as nonperforming loans decreased, while the allowance balance increased mainly as a result of a significant increase in the loan balance.

Income Statement Review

Net interest income increased by $289,000, or 4.5%, to $6.69 million for the three months ended March 31, 2016 as compared to $6.40 million for the three months ended March 31, 2015. The increase in net interest income was primarily the result of an increase of 7 basis points in net interest margin partially offset by a decrease of $38.2 million in average net interest-earning assets.

Net interest income increased $115,000, or 0.4%, to $26.24 million for the year ended March 31, 2016 as compared to $26.13 million for the year ended March 31, 2015, driven by an increase of $12.5 million in average net interest-earning assets and an increase of 3 basis points in net interest margin.

The provision for loan losses increased $603,000, or 603.0%, to $703,000 for the three months ended March 31, 2016, as compared to $100,000 for the three months ended March 31, 2015, and $348,000, or 48.5%, to $1.07 million for the year ended March 31, 2016, as compared to $717,000 for the year ended March 31, 2015. The increase in the provision for the year ended March 31, 2016 was mainly the result of the significant increase in the balance of outstanding loans, partially offset by more favorable trends in qualitative factors related to delinquencies considered in the periodic review of the general valuation allowance.

Non-interest income decreased $2.65 million, or 85.8%, to $440,000 for the three months ended March 31, 2016 from $3.09 million for the three months ended March 31, 2015, and $2.44 million, or 56.7%, to $1.87 million for the year ended March 31, 2016 from $4.31 million for the year ended March 31, 2015. The decrease in both periods was mainly attributable to a decrease in income from bank owned life insurance and a significant decrease in gain on sales of securities. In 2015, income from bank owned life insurance for both periods included proceeds from a death benefit. Gains on sale of securities totaled $1.9 million and $2.0 million, respectively, during the three months and year ended March 31, 2015, as compared to no gains and $72,000 in gains recorded during the three months and year ended March 31, 2016, respectively.

Non-interest expenses for the three months ended March 31, 2016 increased $811,000, or 18.6%, to $5.17 million for the three months ended March 31, 2016, as compared to $4.36 million for the three months ended March 31, 2015. The increase consisted primarily of increases in salaries and employee benefits of $532,000, or 20.6%, directors’ compensation of $144,000, or 71.2%, and equipment expense of $95,000, or 27.2%. The increase in equipment expense was mainly related to the development and implementation of new customer products and services, as well as additional costs related to our new Hoboken location. Non-interest expenses for the year ended March 31, 2016 increased $2.0 million, or 11.7%, to $19.1 million as compared to $17.1 million for the year ended March 31, 2015. The increase consisted primarily of an increase in salaries and employee benefits of $1.68 million, or 17.3%, and directors’ compensation of $156,000, or 15.7%.

The increases in salaries and employee benefits during both periods includes the addition of business development, compliance and Hoboken location staff, typical annual increases in compensation and benefits expenses, 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.

About Clifton Bancorp Inc.

Clifton Bancorp Inc. is the holding company of Clifton Savings Bank (CSBK), a federally chartered savings bank headquartered in Clifton, New Jersey. CSBK is a metropolitan, community-focused bank serving residents and small businesses in its market area through 12 full-service banking centers. For additional investor relations information, including subscribing to email alerts, visit cliftonbancorp.com.

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 March 31, 2016       2015

(In thousands)

Financial Condition Data: Total assets $ 1,253,127 $   1,186,924 Loans receivable, net 780,229 641,084 Cash and cash equivalents 31,069 49,308 Securities 357,462 418,875 Deposits 694,662 699,476 FHLB advances 231,500 107,500 Total stockholders' equity 315,277 368,001           Selected Consolidated Operating Data       Three Months EndedMarch 31, Year Ended March 31, 2016 2015 2016 2015 (In thousands, except share and per share data) Operating Data: Interest income $ 9,158 $ 8,558 $ 35,345 $ 35,162 Interest expense   2,468   2,157   9,102   9,034 Net interest income 6,690 6,401 26,243 26,128 Provision for loan losses   703   100   1,065   717

Net interest income after provision for loan losses

5,987 6,301 25,178 25,411 Non-interest income 440 3,094 1,866 4,313 Non-interest expenses   5,173   4,362   19,101   17,106 Income before income taxes 1,254 5,033 7,943 12,618 Income taxes   376   1,520   2,542   4,064 Net income $ 878 $ 3,513 $ 5,401 $ 8,554 Basic earnings per share $ 0.04 $ 0.14 $ 0.22 $ 0.33 Diluted earnings per share $ 0.04 $ 0.13 $ 0.22 $ 0.33   Average shares outstanding - basic 23,434 25,979 24,477 25,538 Average shares outstanding - diluted 23,479 26,073 24,533 25,698     Average Balance Table     Three Months Ended March 31, 2016       2015

AverageBalance

InterestandDividends

     

Yield/Cost

     

AverageBalance

   

InterestandDividends

     

Yield/Cost

Assets: (Dollars in thousands) Interest-earning assets: Loans receivable $739,496 $6,713 3.63% $636,175 $5,756 3.62% Mortgage-backed securities 275,526 1,851 2.69% 283,461 2,013 2.84% Investment securities 81,566 495 2.43% 143,308 697 1.95% Other interest-earning assets 28,521 99 1.39% 45,633 92 0.81% Total interest-earning assets 1,125,109 9,158 3.25% 1,108,577 8,558 3.09%   Non-interest-earning assets 84,339 81,989 Total assets $1,209,448 $1,190,566   Liabilities and stockholders' equity: Interest-bearing liabilities: Demand accounts $55,477 15 0.11% $54,581 18 0.13% Savings and Club accounts 141,844 75 0.21% 138,978 53 0.15% Certificates of deposit 464,519 1,541 1.33% 500,158 1,523 1.22% Total interest-bearing deposits 661,840 1,631 0.99% 693,717 1,594 0.92% FHLB Advances 195,375 837 1.71% 108,750 563 2.07% Total interest-bearing liabilities 857,215 2,468 1.15% 802,467 2,157 1.08%     Non-interest-bearing liabilities: Non-interest-bearing deposits 17,124 12,295 Other non-interest-bearing liabilities 12,067 9,983 Total non-interest-bearing liabilities 29,191 22,278   Total liabilities 886,406 824,745 Stockholders' equity 323,042 365,821 Total liabilities and stockholders' equity $1,209,448 $1,190,566   Net interest income $6,690 $6,401 Interest rate spread 2.10% 2.01% Net interest margin 2.38% 2.31%

Average interest-earning assets to average interest-bearing liabilities

1.31

 

x

1.38

x

 

    Year Ended March 31, 2016       2015

AverageBalance

InterestandDividends

Yield/Cost

AverageBalance

InterestandDividends

Yield/Cost

Assets: (Dollars in thousands) Interest-earning assets: Loans receivable $687,670 $25,107 3.65% $617,696 $23,150 3.75% Mortgage-backed securities 275,419 7,553 2.74% 298,251 8,998 3.02% Investment securities 104,447 2,363 2.26% 146,327 2,657 1.82% Other interest-earning assets 28,985 322 1.11% 46,693 357 0.76% Total interest-earning assets 1,096,521 35,345 3.22% 1,108,967 35,162 3.17%   Non-interest-earning assets 79,759 107,642 Total assets $1,176,280 $1,216,609   Liabilities and stockholders' equity: Interest-bearing liabilities: Demand accounts $54,074 60 0.11% $55,544 72 0.13% Savings and Club accounts 141,174 254 0.18% 140,118 236 0.17% Certificates of deposit 472,152 6,085 1.29% 519,183 6,399 1.23% Total interest-bearing deposits 667,400 6,399 0.96% 714,845 6,707 0.94% FHLB Advances 141,885 2,703 1.91% 119,423 2,327 1.95% Total interest-bearing liabilities 809,285 9,102 1.12% 834,268 9,034 1.08%   Non-interest-bearing liabilities: Non-interest-bearing deposits 14,817 11,676 Other non-interest-bearing liabilities 11,689 11,182 Total non-interest-bearing liabilities 26,506 22,858   Total liabilities 835,791 857,126 Stockholders' equity 340,489 359,483

Total liabilities and stockholders' equity

$1,176,280 $1,216,609   Net interest income $26,243 $26,128 Interest rate spread 2.10% 2.09% Net interest margin 2.39% 2.36%

Average interest-earning assets to average interest-bearing liabilities

1.35

x

1.33

x

 

 

 

 

 

 

 

 

  Asset Quality Data       Year Ended March 31, 2016 2015 (Dollars in thousands) Allowance for loan losses: Allowance at beginning of period $ 3,475 $ 3,071 Provision for loan losses 1,065 717   Charge-offs (183 ) (313 ) Recoveries   3     -   Net charge-offs (180 ) (313 )     Allowance at end of period $ 4,360   $ 3,475     Allowance for loan losses to total gross loans 0.56 % 0.54 % Allowance for loan losses to nonperforming loans 119.19 % 61.53 %     At March 31, 2016 2015 (Dollars in thousands) Nonperforming Assets: Nonaccrual loans: One- to four-family real estate $ 3,412 $ 4,555 Multi-family real estate - 581 Commercial real estate 186 439 Consumer real estate   60     73   Total nonaccrual loans 3,658 5,648 Real estate owned   58     -   Total nonperforming assets $ 3,716   $ 5,648     Total nonperforming loans to total gross loans 0.47 % 0.88 % Total nonperforming assets to total assets 0.30 % 0.48 %     Selected Consolidated Financial Ratios      

Three Months EndedMarch 31,

      Year Ended March 31,

Selected Performance Ratios (1):

2016   2015 2016 2015 Return on average assets 0.29% 1.18% 0.46% 0.70% Return on average equity 1.09% 3.84% 1.59% 2.38% Interest rate spread 2.10% 2.01% 2.10% 2.09% Net interest margin 2.38% 2.31% 2.39% 2.36% Non-interest expenses to average assets 1.71% 1.47% 1.62% 1.41% Efficiency ratio (2) 72.55% 45.94% 67.95% 56.19%

Average interest-earning assets to average interest-bearing liabilities

1.31x 1.38x 1.35x 1.33x Average equity to average assets 26.71% 30.73% 28.95% 29.55% Dividend payout ratio 159.23% 44.35% 135.40% 89.22%

Net charge-offs to average outstanding loans during the period

0.05% 0.00% 0.03% 0.05%        

(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    

March 31,2016

December 31,2015

September 30,2015

June 30,2015

March 31,2015

(In thousands except shares and per share data)

Operating Data

Interest income $ 9,158 $ 8,736 $ 8,739 $ 8,712 $ 8,558 Interest expense   2,468     2,300     2,199     2,135     2,157   Net interest income 6,690 6,436 6,540 6,577 6,401 Provision for loan losses   703     189     100     73     100  

Net interest income after provision for loan losses

5,987 6,247 6,440 6,504 6,301 Non-interest income 440 460 452 514 3,094 Non-interest expenses   5,173     4,833     4,580     4,515     4,362   Income before income taxes 1,254 1,874 2,312 2,503 5,033 Income taxes   376     549     772     845     1,520   Net income $ 878   $ 1,325   $ 1,540   $ 1,658   $ 3,513    

Share Data

Basic earnings per share $ 0.04 $ 0.05 $ 0.06 $ 0.07 $ 0.14 Diluted earnings per share $ 0.04 $ 0.05 $ 0.06 $ 0.07 $ 0.13 Dividends per share $ 0.06 $ 0.06 $ 0.06 $ 0.12 $ 0.06 Average shares outstanding - basic 23,434 24,475 24,633 25,367 25,979 Average shares outstanding - diluted 23,479 24,521 24,687 25,440 26,073 Shares outstanding at period end 24,000 25,394 25,745 25,960 27,326  

Financial Condition Data

Total assets $ 1,253,127 $ 1,167,739 $ 1,153,895 $ 1,152,707 $ 1,186,924 Loans receivable, net 780,229 700,283 677,286 654,802 641,084 Cash and cash equivalents 31,069 30,493 17,869 23,498 49,308 Securities 357,462 356,977 379,582 395,386 418,875 Deposits 694,662 674,002 678,624 685,248 699,476 FHLB advances 231,500 147,000 124,000 107,500 107,500 Total stockholders' equity 315,277 333,956 338,267 347,764 368,001  

Assets Quality:

Total nonperforming assets $ 3,716 $ 4,387 $ 4,330 $ 5,340 $ 5,648 Total nonperforming loans to total gross loans 0.47 % 0.63 % 0.64 % 0.81 % 0.88 % Total nonperforming assets to total assets 0.30 % 0.38 % 0.38 % 0.46 % 0.48 % Allowance for loan losses $ 4,360 $ 3,750 $ 3,625 $ 3,525 $ 3,475 Allowance for loan losses to total gross loans 0.56 % 0.53 % 0.53 % 0.54 % 0.54 % Allowance for loan losses to nonperforming loans 119.19 % 85.48 % 83.72 % 66.01 % 61.53 %  

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

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