MSB Financial Corp. (NASDAQ: MSBF) (the
“Company”), parent company of Millington Bank, reported today the
results of its operations for the three and nine months ended
September 30, 2018.
The Company reported net income of $1.3 million,
or $0.24 per diluted common share, for the three months ended
September 30, 2018, compared to net income of $1.2 million, or
$0.21 per diluted common share, for the three months ended
September 30, 2017. Net income for the nine months ended
September 30, 2018 was $3.6 million, or $0.66 per diluted
common share, compared to net income of $2.5 million, or 0.44 per
diluted common share, for the nine months ended September 30,
2017.
Highlights for the quarter:
- Return on average assets was 0.92% for the three months ended
September 30, 2018 compared to 0.90% for the three months
ended September 30, 2017 and return on average equity was
7.56% for the three months ended September 30, 2018 compared
to 6.31% for the three months ended September 30, 2017.
- Net interest margin increased 7 basis points to 3.44% for the
quarter ended September 30, 2018 from 3.37% for the quarter
ended September 30, 2017 due to the recognition of $280,000 in
commercial prepayment penalties resulting from four large loan
payoffs.
- The efficiency ratio, which is calculated by dividing
non-interest expense by the sum of net interest income and
non-interest income, improved to 61.96% for the quarter ended
September 30, 2018 from 64.21% for the quarter ended
September 30, 2017 driven by an increase in net interest
income year over year.
- Non-performing assets represented 0.48% of total assets at
September 30, 2018 compared with 0.73% at December 31,
2017. The allowance for loan losses as a percentage of total
non-performing loans was 198.67% at September 30, 2018
compared to 130.99% at December 31, 2017.
- The Company’s balance sheet reflected total asset growth of
$27.4 million at September 30, 2018, compared to
December 31, 2017, improved asset quality, and capital levels
that exceeded regulatory standards for a well-capitalized
institution.
- The effective tax rate increased to 27.8% for the quarter ended
September 30, 2018 compared to (7.9)% for the quarter ended
September 30, 2017 primarily due to a permanent tax deduction
for the 2017 period due to non-qualified stock options that were
exercised during the prior year quarter.
Selected Financial Ratios |
|
|
|
|
|
|
|
|
|
|
(unaudited; annualized where applicable) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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As of or for the quarter
ended: |
|
9/30/2018 |
|
|
6/30/2018 |
|
|
3/31/2018 |
|
|
12/31/2017 |
|
|
9/30/2017 |
|
Return on average assets |
|
0.92 |
% |
|
0.87 |
% |
|
0.74 |
% |
|
0.20 |
% |
|
0.90 |
% |
Return on average equity |
|
7.56 |
% |
|
7.17 |
% |
|
5.65 |
% |
|
1.48 |
% |
|
6.31 |
% |
Net interest margin |
|
3.44 |
% |
|
3.24 |
% |
|
3.24 |
% |
|
3.30 |
% |
|
3.37 |
% |
Net loans / deposit ratio |
|
113.08 |
% |
|
113.64 |
% |
|
110.85 |
% |
|
105.46 |
% |
|
116.04 |
% |
Shareholders' equity / total assets |
|
11.86 |
% |
|
11.39 |
% |
|
12.37 |
% |
|
12.97 |
% |
|
13.39 |
% |
Efficiency ratio |
|
61.96 |
% |
|
62.49 |
% |
|
66.29 |
% |
|
62.26 |
% |
|
64.21 |
% |
Book value per common share |
|
$ |
12.70 |
|
|
$ |
12.43 |
|
|
$ |
12.63 |
|
|
$ |
12.66 |
|
|
$ |
12.57 |
|
Net Interest Income
Total interest income for the three months ended
September 30, 2018 increased $1.1 million, or 21.5%, to $6.2
million compared to $5.1 million for the third quarter of 2017.
Interest income increased in the quarter ended September 30,
2018 compared to the comparable period in 2017, primarily due to a
$52.7 million increase in average loan balances. In addition,
$280,000 was recorded in interest income due to commercial
prepayment penalties on four large loan payoffs. Total interest
expense increased by $527,000, or 59.0%, to $1.4 million, for the
three months ended September 30, 2018 compared to the same
period in 2017 due to a combination of higher deposit rates and
average deposit balances and an increase in the average balance of
borrowings outstanding during the 2018 period.
Net interest income for the three months ended
September 30, 2018 increased $565,000, or 13.5%, to $4.8
million compared to $4.2 million for the same three-month period in
2017. The change for the three months ended September 30, 2018
was primarily a result of an increase in average earning assets of
$55.2 million. The annualized net interest spread was 3.23% and
3.19% for the three months ended September 30, 2018 and 2017,
respectively. For the quarter ended September 30, 2018, the
Company's annualized net interest margin increased to 3.44%
compared to 3.37% for the corresponding three-month period in
2017.
Total interest income for the nine months ended
September 30, 2018, increased $3.2 million, or 23.0%, to $17.3
million compared to $14.1 million for the nine months ended
September 30, 2017 as average earning assets increased $76.0
million year over year. Total interest expense increased by $1.5
million, or 61.0%, to $3.9 million for the nine months ended
September 30, 2018 compared to September 30, 2017 as
average interest-bearing liabilities increased $81.9 million year
over year and the average cost of such liabilities increased 27
basis points.
Net interest income grew $1.8 million, or 15.2%,
to $13.5 million for the nine months ended September 30, 2018
compared to $11.7 million for the nine months ended
September 30, 2017. Net interest spread and net interest
margin for the nine months ended September 30, 2018, declined
4 and 3 basis points respectively, to 3.12% and 3.31% compared to
3.16% and 3.34% for the nine months ended September 30, 2017.
Net interest income and net interest margin decreased as the
Company's deposit pricing has become more competitive year over
year.
Non-Interest Income and Non-Interest
Expense
Non-interest income for the three months ended
September 30, 2018 was $190,000, as compared to $205,000 for
the same period in 2017. Non-interest expense, which consists
of salaries and employee benefits, occupancy expense, professional
services and other non-interest expenses totaled $3.1 million for
the quarter ended September 30, 2018 as compared to $2.8
million for the same period in 2017. The increase in non-interest
expense was primarily related to professional service expense for
the costs associated with our Sarbanes-Oxley implementation which
requires additional reporting on internal control over the
financial reporting of the Company. Previously, the Company was not
subject to these requirements as its public float was below the
applicable threshold.
Non-interest income for the nine months ended
September 30, 2018 was $602,000, as compared to $611,000 for
the same period in 2017. Non-interest expense, totaled $9.0
million for the nine months ended September 30, 2018 as
compared to $8.4 million for the same period in 2017 with the
$593,000 increase primarily attributable to salaries and employee
benefits as a result of merit and infrastructure increases. In
addition, professional services expense increased as a result of
costs associated with our SOX implementation offset by a decrease
in director's compensation due to the termination of the director
retirement plan last year.
Taxes
For the three months ended September 30,
2018, the Company recorded a $506,000 tax provision compared to a
benefit of $86,000 for the three months ended September 30,
2017. The effective tax rate increased to 27.8% for the quarter
ended September 30, 2018 compared to (7.9)% for the quarter
ended September 30, 2017. As a result of the passage of the
Tax Cuts and Jobs Act on December 22, 2017, the federal tax rate
for corporations was reduced to 21% during 2018. The increase in
tax provision is attributable to an increase in pre-tax income
offset by a decrease in the applicable tax rate. The increase in
the effective tax rate is due to a permanent tax deduction that was
taken in the 2017 period due to non-qualified options that were
exercised during the 2017 period.
For the nine months ended September 30,
2018, the Company recorded a $1,320,000 tax provision compared to a
provision of $528,000 for the nine months ended September 30,
2017. The effective tax rate increased to 26.9% for the nine months
ended September 30, 2018 compared to 17.7% for the nine months
ended September 30, 2017. The increase in tax provision is
attributable to an increase in pre-tax income offset by a decrease
in the applicable tax rate. The increase in the effective tax rate
is due to a permanent tax deduction that was taken in the 2017
period due to non-qualified options that were exercised during the
2017 period.
Earnings Summary for Period Ended
September 30, 2018
The following table presents condensed
consolidated statements of income data for the periods
indicated.
Condensed Consolidated Statements of Income
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(dollars in thousands, except for per share
data) |
|
|
|
|
|
|
|
|
|
|
For the quarter
ended: |
|
9/30/2018 |
|
|
6/30/2018 |
|
|
3/31/2018 |
|
|
12/31/2017 |
|
|
9/30/2017 |
|
Net interest income |
|
$ |
4,755 |
|
|
$ |
4,431 |
|
|
$ |
4,302 |
|
|
$ |
4,325 |
|
|
$ |
4,190 |
|
Provision for loan losses |
|
60 |
|
|
90 |
|
|
90 |
|
|
200 |
|
|
490 |
|
Net interest income after provision for loan
losses |
|
4,695 |
|
|
4,341 |
|
|
4,212 |
|
|
4,125 |
|
|
3,700 |
|
Other income |
|
190 |
|
|
208 |
|
|
204 |
|
|
211 |
|
|
205 |
|
Other expense |
|
3,064 |
|
|
2,899 |
|
|
2,987 |
|
|
2,824 |
|
|
2,822 |
|
Income before income taxes |
|
1,821 |
|
|
1,650 |
|
|
1,429 |
|
|
1,512 |
|
|
1,083 |
|
Income taxes (benefit) |
|
506 |
|
|
407 |
|
|
407 |
|
|
1,240 |
|
|
(86 |
) |
Net income |
|
$ |
1,315 |
|
|
$ |
1,243 |
|
|
$ |
1,022 |
|
|
$ |
272 |
|
|
$ |
1,169 |
|
Earnings per common share: |
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.25 |
|
|
$ |
0.23 |
|
|
$ |
0.19 |
|
|
$ |
0.05 |
|
|
$ |
0.21 |
|
Diluted |
|
$ |
0.24 |
|
|
$ |
0.23 |
|
|
$ |
0.19 |
|
|
$ |
0.05 |
|
|
$ |
0.21 |
|
Weighted average common shares outstanding: |
|
|
|
|
|
|
|
|
|
|
Basic |
|
5,330,029 |
|
|
5,331,090 |
|
|
5,470,349 |
|
|
5,577,314 |
|
|
5,563,938 |
|
Diluted |
|
5,388,577 |
|
|
5,375,090 |
|
|
5,507,443 |
|
|
5,588,598 |
|
|
5,574,535 |
|
Statement of Condition Highlights at
September 30, 2018
- Balance sheet growth, with total assets amounting to $590.4
million at September 30, 2018, an increase of $27.4 million,
or 4.86%, compared to December 31, 2017.
- The Company’s total gross loans receivable were $500.5 million
at September 30, 2018, an increase of $21.7 million, or 4.5%,
from December 31, 2017.
- Securities held to maturity were $43.0 million at
September 30, 2018, an increase of $4.5 million, or 11.8%,
compared to December 31, 2017.
- Deposits decreased $11.3 million totaling $437.6 million at
September 30, 2018 compared to $448.9 million at
December 31, 2017.
- Borrowings totaled $80.1 million at September 30, 2018, an
increase of $42.4 million, or 112.5%, compared to $37.7 million at
December 31, 2017.
The following table presents condensed
consolidated statements of condition data as of the dates
indicated.
Condensed Consolidated Statements of
Condition (unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
At: |
|
9/30/2018 |
|
|
6/30/2018 |
|
|
3/31/2018 |
|
|
12/31/2017 |
|
|
9/30/2017 |
|
Cash and due from banks |
|
$ |
1,254 |
|
|
$ |
1,654 |
|
|
$ |
1,871 |
|
|
$ |
2,030 |
|
|
$ |
1,800 |
|
Interest-earning demand deposits with banks |
|
20,817 |
|
|
14,660 |
|
|
15,484 |
|
|
20,279 |
|
|
6,971 |
|
Securities held to maturity |
|
43,009 |
|
|
44,770 |
|
|
36,375 |
|
|
38,482 |
|
|
40,752 |
|
Loans receivable, net of allowance |
|
494,848 |
|
|
509,689 |
|
|
480,916 |
|
|
473,405 |
|
|
461,285 |
|
Premises and equipment |
|
8,323 |
|
|
8,461 |
|
|
8,580 |
|
|
8,698 |
|
|
8,804 |
|
Federal home Loan Bank of New York stock, at cost |
|
4,117 |
|
|
4,212 |
|
|
3,049 |
|
|
2,131 |
|
|
3,512 |
|
Bank owned life insurance |
|
14,489 |
|
|
14,392 |
|
|
14,294 |
|
|
14,197 |
|
|
14,097 |
|
Accrued interest receivable |
|
1,734 |
|
|
1,754 |
|
|
1,642 |
|
|
1,607 |
|
|
1,548 |
|
Other assets |
|
1,803 |
|
|
1,657 |
|
|
1,816 |
|
|
2,211 |
|
|
2,988 |
|
Total assets |
|
$ |
590,394 |
|
|
$ |
601,249 |
|
|
$ |
564,027 |
|
|
$ |
563,040 |
|
|
$ |
541,757 |
|
Deposits |
|
$ |
437,597 |
|
|
$ |
448,512 |
|
|
$ |
433,843 |
|
|
$ |
448,913 |
|
|
$ |
397,510 |
|
Borrowings |
|
80,075 |
|
|
82,175 |
|
|
58,075 |
|
|
37,675 |
|
|
68,375 |
|
Other liabilities |
|
2,714 |
|
|
2,056 |
|
|
2,350 |
|
|
3,427 |
|
|
3,332 |
|
Shareholders' equity |
|
70,008 |
|
|
68,506 |
|
|
69,759 |
|
|
73,025 |
|
|
72,540 |
|
Total liabilities and shareholders'
equity |
|
$ |
590,394 |
|
|
$ |
601,249 |
|
|
$ |
564,027 |
|
|
$ |
563,040 |
|
|
$ |
541,757 |
|
Loans
At September 30, 2018, the Company’s net
loan portfolio totaled $494.8 million, an increase of $21.4
million, or 4.5%, compared to $473.4 million at December 31,
2017. The allowance for loan losses amounted to $5.7 million and
$5.4 million at September 30, 2018 and December 31, 2017,
respectively.
At September 30, 2018, the loan portfolio
primarily consisted of commercial real estate loans (40.8%) and
residential mortgages (33.6%). Commercial and industrial loans
represented 19.8% of the portfolio while construction loans
accounted for 5.6% of the portfolio. Total loans receivable
increased $14.0 million to $513.1 million at September 30,
2018 compared to $499.2 million at December 31, 2017. The
increase primarily reflects a $28.4 million increase in commercial
and industrial loans and a $12.6 million increase in commercial
real estate loans. These increases were partially offset by a $12.1
million decrease in residential mortgages as the Company
continues to focus on commercial lending as well as a $14.9 million
decrease in construction due to the completion of projects.
The following table shows the composition of the
Company's loan portfolio as of the dates indicated.
Loans (unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(dollars in thousands) |
|
|
|
|
|
|
|
|
|
|
At quarter ended: |
|
9/30/2018 |
|
|
6/30/2018 |
|
|
3/31/2018 |
|
|
12/31/2017 |
|
|
9/30/2017 |
|
Residential mortgage: |
|
|
|
|
|
|
|
|
|
One-to-four family |
|
$ |
147,127 |
|
|
$ |
151,372 |
|
|
$ |
154,576 |
|
|
$ |
157,876 |
|
|
$ |
161,679 |
|
Home equity |
|
25,494 |
|
|
26,174 |
|
|
27,051 |
|
|
26,803 |
|
|
27,409 |
|
Total residential mortgage |
|
172,621 |
|
|
177,546 |
|
|
181,627 |
|
|
184,679 |
|
|
189,088 |
|
Commercial and multi-family real estate |
|
209,283 |
|
|
214,653 |
|
|
195,951 |
|
|
196,681 |
|
|
184,791 |
|
Construction |
|
28,788 |
|
|
48,423 |
|
|
49,397 |
|
|
43,718 |
|
|
36,002 |
|
Commercial and industrial |
|
101,849 |
|
|
94,140 |
|
|
82,712 |
|
|
73,465 |
|
|
73,409 |
|
Total commercial loans |
|
339,920 |
|
|
357,216 |
|
|
328,060 |
|
|
313,864 |
|
|
294,202 |
|
Consumer loans |
|
580 |
|
|
608 |
|
|
595 |
|
|
618 |
|
|
659 |
|
Total loans receivable |
|
513,121 |
|
|
535,370 |
|
|
510,282 |
|
|
499,161 |
|
|
483,949 |
|
Less: |
|
|
|
|
|
|
|
|
|
|
Loans in process |
|
12,142 |
|
|
19,594 |
|
|
23,398 |
|
|
19,868 |
|
|
16,864 |
|
Deferred loan fees |
|
475 |
|
|
491 |
|
|
462 |
|
|
474 |
|
|
525 |
|
Allowance |
|
5,656 |
|
|
5,596 |
|
|
5,506 |
|
|
5,414 |
|
|
5,275 |
|
Total loans receivable, net |
|
$ |
494,848 |
|
|
$ |
509,689 |
|
|
$ |
480,916 |
|
|
$ |
473,405 |
|
|
$ |
461,285 |
|
Asset Quality
At September 30, 2018, non-performing loans
totaled $2.8 million, or 0.48% of total assets, compared with $4.1
million, or 0.73% of total assets, at December 31, 2017. Of
the fifteen loans classified as non-performing, only two are
currently in the foreclosure process. All other loans are chronic
slow payers that continue to make payments, but are unable to
maintain a current status for six consecutive months. Total
delinquent loans (including nonperforming delinquent loans) were
$6.6 million at September 30, 2018, an increase of $1.2
million from December 31, 2017 due to an increase in loans
past due 30-59 days. The allowance for loan losses as a percentage
of total loans was 1.13% at September 30, 2018 and at
December 31, 2017, respectively, while the allowance for loan
losses as a percentage of non-performing loans increased to 198.67%
at September 30, 2018 from 130.99% at December 31, 2017.
Non-performing loans to total loans decreased to 0.57% at
September 30, 2018 from 0.86% at December 31, 2017
primarily due to loans previously on non-accrual moving to an
accrual status due to at least six consecutive months of
performance.
The following table presents the components of
non-performing assets and other asset quality data for the periods
indicated.
|
|
|
|
|
|
|
|
|
|
|
(dollars in thousands, unaudited) |
|
|
|
|
|
|
|
|
|
|
As of or for the quarter
ended: |
|
9/30/2018 |
|
|
6/30/2018 |
|
|
3/31/2018 |
|
|
12/31/2017 |
|
|
9/30/2017 |
|
Non-accrual loans |
|
$ |
2,746 |
|
|
$ |
3,430 |
|
|
$ |
3,548 |
|
|
$ |
3,975 |
|
|
$ |
4,071 |
|
Loans 90 days or more past due and still accruing |
|
101 |
|
|
699 |
|
|
1,266 |
|
|
158 |
|
|
374 |
|
Total non-performing loans |
|
$ |
2,847 |
|
|
$ |
4,129 |
|
|
$ |
4,814 |
|
|
$ |
4,133 |
|
|
$ |
4,445 |
|
|
|
|
|
|
|
|
|
|
|
|
Non-performing assets / total assets |
|
0.48 |
% |
|
0.69 |
% |
|
0.85 |
% |
|
0.73 |
% |
|
0.82 |
% |
Non-performing loans / total loans |
|
0.57 |
% |
|
0.80 |
% |
|
0.99 |
% |
|
0.86 |
% |
|
0.95 |
% |
Net charge-offs (recoveries) |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
(2 |
) |
|
$ |
61 |
|
|
$ |
140 |
|
Net charge-offs (recoveries) / average loans (annualized) |
|
— |
% |
|
— |
% |
|
— |
% |
|
0.05 |
% |
|
0.13 |
% |
Allowance for loan loss / total loans |
|
1.13 |
% |
|
1.09 |
% |
|
1.13 |
% |
|
1.13 |
% |
|
1.13 |
% |
Allowance for loan losses / non-performing loans |
|
198.67 |
% |
|
135.53 |
% |
|
114.37 |
% |
|
130.99 |
% |
|
118.67 |
% |
|
|
|
|
|
|
|
|
|
|
|
Total assets |
|
$ |
590,394 |
|
|
$ |
601,249 |
|
|
$ |
564,027 |
|
|
$ |
563,040 |
|
|
$ |
541,757 |
|
Gross loans, excluding ALLL |
|
$ |
500,504 |
|
|
$ |
515,285 |
|
|
$ |
486,422 |
|
|
$ |
478,819 |
|
|
$ |
466,560 |
|
Average loans |
|
$ |
499,082 |
|
|
$ |
500,959 |
|
|
$ |
483,255 |
|
|
$ |
472,388 |
|
|
$ |
446,383 |
|
Allowance for loan losses |
|
$ |
5,656 |
|
|
$ |
5,596 |
|
|
$ |
5,506 |
|
|
$ |
5,414 |
|
|
$ |
5,275 |
|
Deposits
Total deposits at September 30, 2018 were
$437.6 million compared with $448.9 million at December 31,
2017. Overall, deposits decreased $11.3 million. Money market
and interest demand balances declined $14.6 million and $5.0
million, respectively. Money market balances declined to $12.8
million compared to $27.4 million while interest demand balances
declined to $150.2 million compared to $155.2 million from the
prior year end. In addition, savings balances decreased $2.7
million to $102.4 million from $105.1 million from year end.
Offsetting the decreases were increases in non-interest demand and
certificates of deposit (including IRA) balances of $8.6 million
and $2.3 million, respectively. Non-interest demand balances
increased to $45.5 million from $36.9 million from year end while
certificates of deposit balances increased to $126.6 million
compared to $124.3 million from year end.
The following table shows the composition of the
Company's deposits as of the dates indicated.
Deposits (unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(dollars in thousands) |
|
|
|
|
|
|
|
|
|
|
At quarter ended: |
|
9/30/2018 |
|
|
6/30/2018 |
|
|
3/31/2018 |
|
|
12/31/2017 |
|
|
9/30/2017 |
|
Demand: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-interest bearing |
|
$ |
45,501 |
|
|
$ |
42,687 |
|
|
$ |
36,751 |
|
|
$ |
36,919 |
|
|
$ |
40,504 |
|
Interest-bearing |
|
150,248 |
|
|
153,968 |
|
|
148,888 |
|
|
155,199 |
|
|
107,419 |
|
Savings |
|
102,434 |
|
|
109,254 |
|
|
109,215 |
|
|
105,106 |
|
|
108,249 |
|
Money market |
|
12,822 |
|
|
14,381 |
|
|
20,251 |
|
|
27,350 |
|
|
16,517 |
|
Time |
|
126,592 |
|
|
128,222 |
|
|
118,738 |
|
|
124,339 |
|
|
124,821 |
|
Total deposits |
|
$ |
437,597 |
|
|
$ |
448,512 |
|
|
$ |
433,843 |
|
|
$ |
448,913 |
|
|
$ |
397,510 |
|
Capital
At September 30, 2018, the Company's total
stockholders' equity amounted to $70.0 million, or 11.86% of total
assets, compared to $73.0 million at December 31, 2017. The
Company’s book value per common share was $12.70 at
September 30, 2018, compared to $12.66 at December 31,
2017. The decline in shareholders' equity was primarily due to the
repurchase of 249,837 shares of common stock for a total of $4.5
million and the payment of a special dividend in the aggregate
amount of $2.5 million, partially offset by net income of $3.6
million.
At September 30, 2018, the Bank’s common
equity tier 1 ratio was 11.72%, tier 1 leverage ratio was 10.50%,
tier 1 capital ratio was 11.72% and the total capital ratio was
12.83%. At December 31, 2017, the Bank’s common equity tier 1
ratio was 11.98%, tier 1 leverage ratio was 10.72%, tier 1 capital
ratio was 11.98% and the total capital ratio was 13.10%. At
September 30, 2018, Company and the Bank were in compliance
with all applicable regulatory capital requirements.
The following table sets forth the Company's
consolidated average statements of condition for the periods
presented.
Condensed Consolidated Average Statements of
Condition (unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(dollars in thousands) |
|
|
|
|
|
|
|
|
|
|
For the quarter
ended: |
|
9/30/2018 |
|
|
6/30/2018 |
|
|
3/31/2018 |
|
|
12/31/2017 |
|
|
9/30/2017 |
|
Loans |
|
$ |
499,082 |
|
|
$ |
500,959 |
|
|
$ |
483,255 |
|
|
$ |
472,388 |
|
|
$ |
446,383 |
|
Securities held to maturity |
|
43,871 |
|
|
36,494 |
|
|
37,661 |
|
|
39,899 |
|
|
41,423 |
|
Allowance for loan losses |
|
(5,624 |
) |
|
(5,538 |
) |
|
(5,461 |
) |
|
(5,376 |
) |
|
(4,922 |
) |
All other assets |
|
37,466 |
|
|
38,053 |
|
|
38,851 |
|
|
41,886 |
|
|
38,545 |
|
Total assets |
|
$ |
574,795 |
|
|
$ |
569,968 |
|
|
$ |
554,306 |
|
|
$ |
548,797 |
|
|
$ |
521,429 |
|
Non-interest bearing deposits |
|
$ |
43,495 |
|
|
$ |
38,903 |
|
|
$ |
36,211 |
|
|
$ |
43,336 |
|
|
$ |
44,970 |
|
Interest-bearing deposits |
|
386,364 |
|
|
385,047 |
|
|
390,522 |
|
|
375,098 |
|
|
350,589 |
|
Borrowings |
|
73,077 |
|
|
74,192 |
|
|
53,191 |
|
|
53,844 |
|
|
47,788 |
|
Other liabilities |
|
2,320 |
|
|
2,495 |
|
|
1,972 |
|
|
3,104 |
|
|
3,964 |
|
Stockholders' Equity |
|
69,539 |
|
|
69,331 |
|
|
72,410 |
|
|
73,415 |
|
|
74,118 |
|
Total liabilities and shareholders'
equity |
|
$ |
574,795 |
|
|
$ |
569,968 |
|
|
$ |
554,306 |
|
|
$ |
548,797 |
|
|
$ |
521,429 |
|
|
|
|
|
|
|
|
|
|
|
|
CEO outlook:
“I’m very pleased with our third quarter
results. Our staff remains focused on improving asset quality
and strengthening our origination process. As a result, the
Company experienced a lower loan loss provision and increased
interest income from loan prepayment penalties associated with
several payoffs,” stated Michael Shriner, President and Chief
Executive Officer.
Mr. Shriner further commented, “The Company is
committed to originating safe and sound loans at competitive terms
and interest rates. The Company will not chase rates and
terms, or lower underwriting standards during this period of
intense competition for loans.”
Forward Looking Statement
Disclaimer
The foregoing release may contain
forward-looking statements concerning the financial condition,
results of operations and business of the Company. We caution that
such statements are subject to a number of uncertainties and actual
results could differ materially, and, therefore, readers should not
place undue reliance on any forward-looking statements. Factors
that may cause actual results to differ from those contemplated
include our continued ability to grow the loan portfolio, the
impact of the passage of the Tax Cuts and Jobs Act and our
continued ability to manage cybersecurity risks.
Contact: |
Michael A. Shriner,
President & CEO |
|
(908) 647-4000 |
|
|
mshriner@millingtonbank.com |
|
|
|
|
MSB Financial Corp. and
Subsidiaries |
|
Consolidated Statements of Financial
Condition |
|
At September
30,2018 |
At December
31,2017 |
(Dollars in thousands, except per share
amounts) |
Cash and due from banks |
$ |
1,254 |
|
$ |
2,030 |
|
Interest-earning demand deposits with
banks |
20,817 |
|
20,279 |
|
Cash and Cash Equivalents |
22,071 |
|
22,309 |
|
Securities held to maturity (fair value of
$41,765 and $38,255, respectively) |
43,009 |
|
38,482 |
|
Loans receivable, net of allowance for
loan losses of $5,656 and $5,414, respectively |
494,848 |
|
473,405 |
|
Premises and equipment |
8,323 |
|
8,698 |
|
Federal Home Loan Bank of New York stock,
at cost |
4,117 |
|
2,131 |
|
Bank owned life insurance |
14,489 |
|
14,197 |
|
Accrued interest receivable |
1,734 |
|
1,607 |
|
Other assets |
1,803 |
|
2,211 |
|
Total Assets |
$ |
590,394 |
|
$ |
563,040 |
|
Liabilities and
Stockholders' Equity |
|
|
Liabilities |
|
|
Deposits: |
|
|
Non-interest bearing |
$ |
45,501 |
|
$ |
36,919 |
|
Interest bearing |
392,096 |
|
411,994 |
|
Total Deposits |
437,597 |
|
448,913 |
|
Advances from Federal Home Loan Bank of
New York |
80,075 |
|
37,675 |
|
Advance payments by borrowers for taxes
and insurance |
704 |
|
686 |
|
Other liabilities |
2,010 |
|
2,741 |
|
Total Liabilities |
520,386 |
|
490,015 |
|
Stockholders' Equity |
|
|
Preferred stock, par value $0.01;
1,000,000 shares authorized; no shares issued or outstanding |
— |
|
— |
|
Common stock, par value $0.01; 49,000,000
shares authorized; 5,513,165 and 5,768,632 issued andoutstanding at
September 30, 2018 and December 31, 2017, respectively |
55 |
|
58 |
|
Paid-in capital |
46,848 |
|
51,068 |
|
Retained earnings |
24,765 |
|
23,641 |
|
Unearned common stock held by ESOP
(182,218 and 190,390 shares, respectively) |
(1,660 |
) |
(1,742 |
) |
Total Stockholders'
Equity |
70,008 |
|
73,025 |
|
Total Liabilities and
Stockholders' Equity |
$ |
590,394 |
|
$ |
563,040 |
|
|
|
|
|
|
|
|
|
|
|
|
|
MSB Financial Corp. and
Subsidiaries |
|
Consolidated Statements of
Income |
|
|
Three months endedSeptember
30, |
|
Nine months endedSeptember
30, |
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
(in thousands except per share
amounts) |
|
|
|
|
|
|
|
|
Interest Income |
|
|
|
|
|
|
|
|
Loans receivable, including fees |
|
$ |
5,788 |
|
|
$ |
4,769 |
|
|
$ |
16,360 |
|
|
$ |
13,213 |
|
Securities held to maturity |
|
304 |
|
|
264 |
|
|
763 |
|
|
762 |
|
Other |
|
83 |
|
|
50 |
|
|
219 |
|
|
128 |
|
Total Interest
Income |
|
6,175 |
|
|
5,083 |
|
|
17,342 |
|
|
14,103 |
|
Interest Expense |
|
|
|
|
|
|
|
|
Deposits |
|
1,014 |
|
|
622 |
|
|
2,795 |
|
|
1,703 |
|
Borrowings |
|
406 |
|
|
271 |
|
|
1,059 |
|
|
691 |
|
Total Interest
Expense |
|
1,420 |
|
|
893 |
|
|
3,854 |
|
|
2,394 |
|
Net Interest Income |
|
4,755 |
|
|
4,190 |
|
|
13,488 |
|
|
11,709 |
|
Provision for Loan Losses |
|
60 |
|
|
490 |
|
|
240 |
|
|
985 |
|
Net Interest Income after
Provision for Loan Losses |
|
4,695 |
|
|
3,700 |
|
|
13,248 |
|
|
10,724 |
|
Non-Interest Income |
|
|
|
|
|
|
|
|
Fees and service charges |
|
78 |
|
|
87 |
|
|
252 |
|
|
256 |
|
Income from bank owned life
insurance |
|
97 |
|
|
101 |
|
|
292 |
|
|
313 |
|
Other |
|
15 |
|
|
17 |
|
|
58 |
|
|
42 |
|
Total Non-Interest
Income |
|
190 |
|
|
205 |
|
|
602 |
|
|
611 |
|
Non-Interest Expenses |
|
|
|
|
|
|
|
|
Salaries and employee benefits |
|
1,625 |
|
|
1,577 |
|
|
5,107 |
|
|
4,661 |
|
Directors compensation |
|
121 |
|
|
188 |
|
|
365 |
|
|
551 |
|
Occupancy and equipment |
|
390 |
|
|
394 |
|
|
1,172 |
|
|
1,217 |
|
Service bureau fees |
|
107 |
|
|
67 |
|
|
251 |
|
|
164 |
|
Advertising |
|
18 |
|
|
4 |
|
|
31 |
|
|
12 |
|
FDIC assessment |
|
71 |
|
|
61 |
|
|
194 |
|
|
131 |
|
Professional services |
|
528 |
|
|
342 |
|
|
1,217 |
|
|
1,050 |
|
Other |
|
204 |
|
|
189 |
|
|
613 |
|
|
571 |
|
Total Non-Interest
Expenses |
|
3,064 |
|
|
2,822 |
|
|
8,950 |
|
|
8,357 |
|
Income before Income Taxes |
|
1,821 |
|
|
1,083 |
|
|
4,900 |
|
|
2,978 |
|
Income Tax Expense |
|
506 |
|
|
(86 |
) |
|
1,320 |
|
|
528 |
|
Net Income |
|
$ |
1,315 |
|
|
$ |
1,169 |
|
|
$ |
3,580 |
|
|
$ |
2,450 |
|
Earnings per share: |
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.25 |
|
|
$ |
0.21 |
|
|
$ |
0.67 |
|
|
$ |
0.44 |
|
Diluted |
|
$ |
0.24 |
|
|
$ |
0.21 |
|
|
$ |
0.66 |
|
|
$ |
0.44 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MSB Financial Corp. and
Subsidiaries |
|
|
|
|
|
|
|
|
Selected Quarterly Financial and Statistical
Data |
|
|
|
|
|
|
Three Months
Ended |
(in thousands, except for share and per
share data) (annualized where applicable) |
9/30/2018 |
|
6/30/2018 |
|
9/30/2017 |
(unaudited) |
|
|
|
|
|
Statements of Operations
Data |
|
|
|
|
|
|
|
|
|
|
|
Interest income |
$ |
6,175 |
|
|
$ |
5,738 |
|
|
$ |
5,083 |
|
Interest expense |
1,420 |
|
|
1,307 |
|
|
893 |
|
Net interest income |
4,755 |
|
|
4,431 |
|
|
4,190 |
|
Provision for loan losses |
60 |
|
|
90 |
|
|
490 |
|
Net interest income after provision
for loan losses |
4,695 |
|
|
4,341 |
|
|
3,700 |
|
Other income |
190 |
|
|
208 |
|
|
205 |
|
Other expense |
3,064 |
|
|
2,899 |
|
|
2,822 |
|
Income before income taxes |
1,821 |
|
|
1,650 |
|
|
1,083 |
|
Income tax expense (benefit) |
506 |
|
|
407 |
|
|
(86 |
) |
Net Income |
$ |
1,315 |
|
|
$ |
1,243 |
|
|
$ |
1,169 |
|
Earnings (per Common
Share) |
|
|
|
|
|
Basic |
$ |
0.25 |
|
|
$ |
0.23 |
|
|
$ |
0.21 |
|
Diluted |
$ |
0.24 |
|
|
$ |
0.23 |
|
|
$ |
0.21 |
|
Statements of Condition Data
(Period-End) |
|
|
|
|
|
Investment securities held to maturity
(fair value of $41,765, $43,749, and $40,794) |
$ |
43,009 |
|
|
$ |
44,770 |
|
|
$ |
40,752 |
|
Loans receivable, net of allowance for
loan losses |
494,848 |
|
|
509,689 |
|
|
461,285 |
|
Total assets |
590,394 |
|
|
601,249 |
|
|
541,757 |
|
Deposits |
437,597 |
|
|
448,512 |
|
|
397,510 |
|
Borrowings |
80,075 |
|
|
82,175 |
|
|
68,375 |
|
Stockholders' equity |
70,008 |
|
|
68,506 |
|
|
72,540 |
|
Common Shares Dividend
Data |
|
|
|
|
|
Cash dividends |
$ |
— |
|
|
$ |
2,456 |
|
|
$ |
— |
|
Weighted Average Common Shares
Outstanding |
|
|
|
|
|
Basic |
5,330,029 |
|
|
5,331,090 |
|
|
5,563,938 |
|
Diluted |
5,388,577 |
|
|
5,375,090 |
|
|
5,574,535 |
|
Operating Ratios |
|
|
|
|
|
Return on average assets |
0.92 |
% |
|
0.87 |
% |
|
0.90 |
% |
Return on average equity |
7.56 |
% |
|
7.17 |
% |
|
6.31 |
% |
Average equity / average assets |
12.10 |
% |
|
12.16 |
% |
|
14.21 |
% |
Book value per common share
(period-end) |
$ |
12.70 |
|
|
$ |
12.43 |
|
|
$ |
12.57 |
|
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