MSB Financial Corp. (NASDAQ: MSBF) (the
“Company”), parent company of Millington Bank, reported today the
results of its operations for the three and twelve months ended
December 31, 2018.
The Company reported net income of $1.3 million,
or $0.24 per diluted common share, for the three months ended
December 31, 2018, compared to net income of $0.3 million, or
$0.05 per diluted common share, for the three months ended
December 31, 2017. Net income for the twelve months ended
December 31, 2018 was $4.8 million, or $0.90 per diluted
common share, compared to net income of $2.7 million, or $0.48 per
diluted common share, for the twelve months ended December 31,
2017. Both the quarter and year ended December 31, 2017
had been impacted by the revaluation of the Company's deferred tax
asset as a result of the enactment of the Tax Cuts and Jobs Act on
December 22, 2017.
Highlights for the quarter:
- Return on average assets was 0.87% for the three months ended
December 31, 2018 compared to 0.20% for the three months ended
December 31, 2017 and return on average equity was 7.20% for
the three months ended December 31, 2018 compared to 1.48% for
the three months ended December 31, 2017.
- Net interest margin decreased 8 basis points to 3.22% for the
quarter ended December 31, 2018 from 3.30% for the quarter
ended December 31, 2017.
- The efficiency ratio, which is calculated by dividing
non-interest expense by the sum of net interest income and
non-interest income, was 62.51% for the quarter ended
December 31, 2018 as compared to 62.26% for the quarter ended
December 31, 2017.
- Non-performing assets represented 0.71% of total assets at
December 31, 2018 compared with 0.73% at December 31,
2017. The allowance for loan losses as a percentage of total
non-performing loans was 136.83% at December 31, 2018 compared
to 130.99% at December 31, 2017.
- The Company’s balance sheet reflected total asset growth of
$21.5 million at December 31, 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 decreased to 28.1% for the quarter ended
December 31, 2018 compared to 82.0% for the quarter ended
December 31, 2017 primarily due to the revaluation of the
Company's deferred tax asset in the 2017 period as a result of the
passage of the Tax Cuts and Jobs Act on December 22, 2017.
|
Selected Financial Ratios |
|
(unaudited; annualized where
applicable) |
| |
|
|
|
|
|
|
|
|
|
|
|
As of or for the quarter ended: |
|
12/31/2018 |
|
9/30/2018 |
|
6/30/2018 |
|
3/31/2018 |
|
12/31/2017 |
| Return on average
assets |
|
0.87 |
% |
|
0.92 |
% |
|
0.87 |
% |
|
0.74 |
% |
|
0.20 |
% |
| Return on average
equity |
|
7.20 |
% |
|
7.56 |
% |
|
7.17 |
% |
|
5.65 |
% |
|
1.48 |
% |
| Net interest
margin |
|
3.22 |
% |
|
3.44 |
% |
|
3.24 |
% |
|
3.24 |
% |
|
3.30 |
% |
| Net loans / deposit
ratio |
|
119.43 |
% |
|
113.08 |
% |
|
113.64 |
% |
|
110.85 |
% |
|
105.46 |
% |
| Shareholders' equity /
total assets |
|
11.40 |
% |
|
11.86 |
% |
|
11.39 |
% |
|
12.37 |
% |
|
12.97 |
% |
| Efficiency ratio |
|
62.51 |
% |
|
61.96 |
% |
|
62.49 |
% |
|
66.29 |
% |
|
62.26 |
% |
| Book value per common
share |
|
$ |
12.37 |
|
|
$ |
12.70 |
|
|
$ |
12.43 |
|
|
$ |
12.63 |
|
|
$ |
12.66 |
|
Net Interest Income
Total interest income for the three months ended
December 31, 2018 increased $626,000, or 11.6%, to $6.0
million compared to $5.4 million for the fourth quarter of 2017.
Interest income increased in the quarter ended December 31,
2018 compared to the comparable period in 2017, primarily due to a
$27.0 million increase in average loan balances. Total interest
expense increased by $492,000, or 46.8%, to $1.5 million, for the
three months ended December 31, 2018 compared to the same
period in 2017 due to a combination of higher deposit rates and an
increase in the average balance of borrowings outstanding during
the 2018 period.
Net interest income for the three months ended
December 31, 2018 increased $134,000, or 3.1%, to $4.5 million
compared to $4.3 million for the same three-month period in 2017.
The change for the three months ended December 31, 2018 was
primarily a result of an increase in average earning assets of
$29.7 million partially offset by decreasing margin. The annualized
net interest spread was 2.98% and 3.12% for the three months ended
December 31, 2018 and 2017, respectively. For the quarter
ended December 31, 2018, the Company's annualized net interest
margin decreased to 3.22% compared to 3.30% for the corresponding
three-month period in 2017.
Total interest income for the twelve months
ended December 31, 2018, increased $3.8 million, or 19.8%, to
$23.3 million compared to $19.5 million for the twelve months ended
December 31, 2017 as average earning assets increased $64.3
million year over year. Total interest expense increased by $2.0
million, or 56.6%, to $5.4 million for the twelve months ended
December 31, 2018 compared to December 31, 2017 as
average interest-bearing liabilities increased $68.0 million year
over year and the average cost of such liabilities increased 30
basis points.
Net interest income grew $1.9 million, or 11.9%,
to $17.9 million for the twelve months ended December 31, 2018
compared to $16.0 million for the twelve months ended
December 31, 2017. Net interest spread and net interest margin
for the twelve months ended December 31, 2018, declined 7 and
5 basis points respectively, to 3.08% and 3.28% compared to 3.15%
and 3.33% for the twelve months ended December 31, 2017. Net
interest spread and net interest margin decreased as the Company's
average borrowings increased in addition to deposit pricing that
has continued to become more competitive year over year.
Provision for loan losses
The loan loss provision for the three months
ended December 31, 2018 was zero compared to $200,000 for the same
period in 2017. The loan loss provision for the year ended
December 31, 2018 was $240,000 compared to $1,185,000 for the
year ended December 31, 2017. The decrease in the level of
provision for loan loss primarily reflects lower loan growth in
addition to the improvement of other credit metrics year over
year.
Non-Interest Income and Non-Interest
Expense
Non-interest income for the three months ended
December 31, 2018 was $198,000, as compared to $211,000 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 $2.9 million for
the quarter ended December 31, 2018 as compared to $2.8
million for the same period in 2017. The increase in non-interest
expense was related to an increase professional service expense due
to the costs associated with our Sarbanes-Oxley implementation
which requires additional reporting on internal control over the
financial reporting of the Company, offset by decreases in various
expense categories. Previously, the Company was not subject to
these requirements as its public float was below the applicable
threshold.
Non-interest income for the twelve months ended
December 31, 2018 was $800,000, as compared to $822,000 for
the same period in 2017. Non-interest expense totaled $11.9
million for the twelve months ended December 31, 2018 as
compared to $11.2 million for 2017 with the $680,000 increase
primarily attributable to increased professional services expense
as a result of costs associated with our Sarbanes-Oxley
implementation. In addition, salaries and employee benefits
increased as a result of merit and infrastructure increases while
service bureau fees increased as a result of a reduction in the
Company's relationship credit that declines every year.
Taxes
For the three months ended December 31,
2018, the Company recorded a $491,000 tax provision compared to
$1,240,000 for the three months ended December 31, 2017. The
effective tax rate decreased to 28.1% for the quarter ended
December 31, 2018 compared to 82.0% for the quarter ended
December 31, 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 decrease in tax
provision and effective tax rate is primarily attributable to the
revaluation of the Company's deferred tax asset as a result of the
law change at December 31, 2017.
For the twelve months ended December 31,
2018 and December 31, 2017, the Company recorded a $1.8
million tax provision. The effective tax rate decreased to 27.2%
for the twelve months ended December 31, 2018 compared to
39.4% for the twelve months ended December 31, 2017. The
decrease in the effective tax rate is due to the revaluation of the
Company's deferred tax asset as a result of the law change at
December 31, 2017.
Earnings Summary for Period Ended
December 31, 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: |
|
12/31/2018 |
|
9/30/2018 |
|
6/30/2018 |
|
3/31/2018 |
|
12/31/2017 |
| Net interest
income |
|
$ |
4,459 |
|
|
$ |
4,755 |
|
|
$ |
4,431 |
|
|
$ |
4,302 |
|
|
$ |
4,325 |
|
| Provision for loan
losses |
|
— |
|
|
60 |
|
|
90 |
|
|
90 |
|
|
200 |
|
| Net interest income
after provision for loan losses |
|
4,459 |
|
|
4,695 |
|
|
4,341 |
|
|
4,212 |
|
|
4,125 |
|
| Other income |
|
198 |
|
|
190 |
|
|
208 |
|
|
204 |
|
|
211 |
|
| Other expense |
|
2,911 |
|
|
3,064 |
|
|
2,899 |
|
|
2,987 |
|
|
2,824 |
|
| Income before income
taxes |
|
1,746 |
|
|
1,821 |
|
|
1,650 |
|
|
1,429 |
|
|
1,512 |
|
| Income taxes
(benefit) |
|
491 |
|
|
506 |
|
|
407 |
|
|
407 |
|
|
1,240 |
|
| Net income |
|
$ |
1,255 |
|
|
$ |
1,315 |
|
|
$ |
1,243 |
|
|
$ |
1,022 |
|
|
$ |
272 |
|
| Earnings per common
share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.24 |
|
|
$ |
0.25 |
|
|
$ |
0.23 |
|
|
$ |
0.19 |
|
|
$ |
0.05 |
|
|
Diluted |
|
$ |
0.24 |
|
|
$ |
0.24 |
|
|
$ |
0.23 |
|
|
$ |
0.19 |
|
|
$ |
0.05 |
|
| Weighted average common
shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
5,276,116 |
|
|
5,330,029 |
|
|
5,331,090 |
|
|
5,470,349 |
|
|
5,577,314 |
|
|
Diluted |
|
5,317,305 |
|
|
5,388,577 |
|
|
5,375,090 |
|
|
5,507,443 |
|
|
5,588,598 |
|
Statement of Condition Highlights at
December 31, 2018
- Balance sheet growth, with total assets amounting to $584.5
million at December 31, 2018, an increase of $21.5 million, or
3.81%, compared to December 31, 2017.
- The Company’s total gross loans receivable were $508.0 million
at December 31, 2018, an increase of $29.1 million, or 6.1%,
from December 31, 2017.
- Securities held to maturity were $39.5 million at
December 31, 2018, an increase of $1.0 million, or 2.6%,
compared to December 31, 2017.
- Deposits decreased $28.3 million or 6.31%, totaling $420.6
million at December 31, 2018 compared to $448.9 million at
December 31, 2017.
- Borrowings totaled $94.3 million at December 31, 2018, an
increase of $56.6 million, or 150.2%, 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: |
|
12/31/2018 |
|
|
9/30/2018 |
|
|
6/30/2018 |
|
|
3/31/2018 |
|
|
12/31/2017 |
|
| Cash and due from banks |
|
$ |
1,558 |
|
|
$ |
1,254 |
|
|
$ |
1,654 |
|
|
$ |
1,871 |
|
|
$ |
2,030 |
|
| Interest-earning demand
deposits with banks |
|
10,242 |
|
|
20,817 |
|
|
14,660 |
|
|
15,484 |
|
|
20,279 |
|
| Securities held to
maturity |
|
39,476 |
|
|
43,009 |
|
|
44,770 |
|
|
36,375 |
|
|
38,482 |
|
| Loans receivable, net
of allowance |
|
502,299 |
|
|
494,848 |
|
|
509,689 |
|
|
480,916 |
|
|
473,405 |
|
| Premises and
equipment |
|
8,180 |
|
|
8,323 |
|
|
8,461 |
|
|
8,580 |
|
|
8,698 |
|
| Federal home Loan Bank
of New York stock, at cost |
|
4,756 |
|
|
4,117 |
|
|
4,212 |
|
|
3,049 |
|
|
2,131 |
|
| Bank owned life
insurance |
|
14,585 |
|
|
14,489 |
|
|
14,392 |
|
|
14,294 |
|
|
14,197 |
|
| Accrued interest
receivable |
|
1,615 |
|
|
1,734 |
|
|
1,754 |
|
|
1,642 |
|
|
1,607 |
|
| Other assets |
|
1,789 |
|
|
1,803 |
|
|
1,657 |
|
|
1,816 |
|
|
2,211 |
|
| Total
assets |
|
$ |
584,500 |
|
|
$ |
590,394 |
|
|
$ |
601,249 |
|
|
$ |
564,027 |
|
|
$ |
563,040 |
|
| Deposits |
|
$ |
420,579 |
|
|
$ |
437,597 |
|
|
$ |
448,512 |
|
|
$ |
433,843 |
|
|
$ |
448,913 |
|
| Borrowings |
|
94,275 |
|
|
80,075 |
|
|
82,175 |
|
|
58,075 |
|
|
37,675 |
|
| Other liabilities |
|
3,000 |
|
|
2,714 |
|
|
2,056 |
|
|
2,350 |
|
|
3,427 |
|
| Shareholders'
equity |
|
66,646 |
|
|
70,008 |
|
|
68,506 |
|
|
69,759 |
|
|
73,025 |
|
| Total
liabilities and shareholders' equity |
|
$ |
584,500 |
|
|
$ |
590,394 |
|
|
$ |
601,249 |
|
|
$ |
564,027 |
|
|
$ |
563,040 |
|
Loans
At December 31, 2018, the Company’s net
loan portfolio totaled $502.3 million, an increase of $28.9
million, or 6.1%, compared to $473.4 million at December 31,
2017. The allowance for loan losses amounted to $5.7 million
and $5.4 million at December 31, 2018 and December 31,
2017, respectively.
At December 31, 2018, the loan portfolio
primarily consisted of commercial real estate loans (41.0%) and
residential mortgages (32.3%). Commercial and industrial loans
represented 20.9% of the portfolio while construction loans
accounted for 5.7% of the portfolio. Total loans receivable
increased $20.0 million to $519.1 million at December 31, 2018
compared to $499.2 million at December 31, 2017. The increase
primarily reflects a $35.1 million increase in commercial and
industrial loans and a $15.9 million increase in commercial real
estate loans. These increases were partially offset by a $16.9
million decrease in residential mortgages as the Company continues
to focus on commercial lending as well as a $14.1 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: |
|
12/31/2018 |
|
|
9/30/2018 |
|
|
6/30/2018 |
|
|
3/31/2018 |
|
|
12/31/2017 |
|
|
Residential mortgage: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
One-to-four family |
|
$ |
143,391 |
|
|
$ |
147,127 |
|
|
$ |
151,372 |
|
|
$ |
154,576 |
|
|
$ |
157,876 |
|
| Home
equity |
|
24,365 |
|
|
25,494 |
|
|
26,174 |
|
|
27,051 |
|
|
26,803 |
|
|
Total residential mortgage |
|
167,756 |
|
|
172,621 |
|
|
177,546 |
|
|
181,627 |
|
|
184,679 |
|
|
Commercial and multi-family real estate |
|
212,606 |
|
|
209,283 |
|
|
214,653 |
|
|
195,951 |
|
|
196,681 |
|
|
Construction |
|
29,628 |
|
|
28,788 |
|
|
48,423 |
|
|
49,397 |
|
|
43,718 |
|
|
Commercial and industrial |
|
108,602 |
|
|
101,849 |
|
|
94,140 |
|
|
82,712 |
|
|
73,465 |
|
|
Total commercial loans |
|
350,836 |
|
|
339,920 |
|
|
357,216 |
|
|
328,060 |
|
|
313,864 |
|
|
Consumer loans |
|
540 |
|
|
580 |
|
|
608 |
|
|
595 |
|
|
618 |
|
|
Total loans receivable |
|
519,132 |
|
|
513,121 |
|
|
535,370 |
|
|
510,282 |
|
|
499,161 |
|
|
Less: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Loans in
process |
|
10,677 |
|
|
12,142 |
|
|
19,594 |
|
|
23,398 |
|
|
19,868 |
|
| Deferred
loan fees |
|
501 |
|
|
475 |
|
|
491 |
|
|
462 |
|
|
474 |
|
|
Allowance |
|
5,655 |
|
|
5,656 |
|
|
5,596 |
|
|
5,506 |
|
|
5,414 |
|
|
Total loans receivable, net |
|
$ |
502,299 |
|
|
$ |
494,848 |
|
|
$ |
509,689 |
|
|
$ |
480,916 |
|
|
$ |
473,405 |
|
Asset Quality
At December 31, 2018 and December 31,
2017, non-performing loans totaled $4.1 million, or 0.71% and 0.73%
of total assets, respectively. Nonperforming loans remained
relatively flat year over year as three new relationships were
added, offset by the resolution of eight relationships throughout
the year. Total delinquent loans (including nonperforming
delinquent loans) were $6.3 million at December 31, 2018, an
increase of $900,000 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 1.11% at December 31, 2018
and at December 31, 2017, respectively, while the allowance
for loan losses as a percentage of non-performing loans increased
to 136.83% at December 31, 2018 from 130.99% at
December 31, 2017. Non-performing loans to total loans
decreased to 0.81% at December 31, 2018 from 0.86% at
December 31, 2017 primarily due to an increase in loan
growth.
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: |
|
12/31/2018 |
|
9/30/2018 |
|
6/30/2018 |
|
3/31/2018 |
|
12/31/2017 |
| Non-accrual
loans |
|
$4,131 |
|
|
$2,746 |
|
|
$3,430 |
|
|
$3,548 |
|
|
$3,975 |
|
| Loans 90 days or more
past due and still accruing |
|
2 |
|
|
101 |
|
|
699 |
|
|
1,266 |
|
|
158 |
|
| Total
non-performing loans |
|
$ |
4,133 |
|
|
$ |
2,847 |
|
|
$ |
4,129 |
|
|
$ |
4,814 |
|
|
$ |
4,133 |
|
| |
|
|
|
|
|
|
|
|
|
|
| Non-performing assets /
total assets |
|
0.71 |
% |
|
0.48 |
% |
|
0.69 |
% |
|
0.85 |
% |
|
0.73 |
% |
| Non-performing loans /
total loans |
|
0.81 |
% |
|
0.57 |
% |
|
0.80 |
% |
|
0.99 |
% |
|
0.86 |
% |
| Net charge-offs
(recoveries) |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
(2 |
) |
|
$ |
61 |
|
| Net charge-offs
(recoveries) / average loans (annualized) |
|
— |
% |
|
— |
% |
|
— |
% |
|
— |
% |
|
0.05 |
% |
| Allowance for loan loss
/ total loans |
|
1.11 |
% |
|
1.13 |
% |
|
1.09 |
% |
|
1.13 |
% |
|
1.13 |
% |
| Allowance for loan
losses / non-performing loans |
|
136.83 |
% |
|
198.67 |
% |
|
135.53 |
% |
|
114.37 |
% |
|
130.99 |
% |
| |
|
|
|
|
|
|
|
|
|
|
| Total assets |
|
$ |
584,500 |
|
|
$ |
590,394 |
|
|
$ |
601,249 |
|
|
$ |
564,027 |
|
|
$ |
563,040 |
|
| Gross loans, excluding
ALLL |
|
$ |
507,954 |
|
|
$ |
500,504 |
|
|
$ |
515,285 |
|
|
$ |
486,422 |
|
|
$ |
478,819 |
|
| Average loans |
|
$ |
499,368 |
|
|
$ |
499,082 |
|
|
$ |
500,959 |
|
|
$ |
483,255 |
|
|
$ |
472,388 |
|
| Allowance for loan
losses |
|
$ |
5,655 |
|
|
$ |
5,656 |
|
|
$ |
5,596 |
|
|
$ |
5,506 |
|
|
$ |
5,414 |
|
Deposits
Total deposits at December 31, 2018
decreased to $420.6 million from $448.9 million compared to
year-end 2017. Interest demand and money market balances
declined $21.1 million and $11.2 million, respectively.
Interest demand deposit account balances declined to $134.1 million
compared to $155.2 million the year prior while money market
balances declined to $16.2 million compared to $27.4 million at the
prior year-end. In addition, certificates of deposit
(including IRAs) and savings balances decreased $3.4 million and
$2.4 million, respectively year over year. Certificates of
deposits declined to $120.9 million compared to $124.3 million
while savings balances declined to $102.7 million from $105.1
million from prior year end. Offsetting these decreases was
an increase in non-interest demand balances of $9.8 million to
$46.7 million at December 31, 2018 from $36.9 million from
year end at December 31, 2017.
The following table shows the composition of the
Company's deposits as of the dates indicated.
| Deposits
(unaudited) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(dollars in thousands) |
|
|
|
At quarter ended: |
|
12/31/2018 |
|
9/30/2018 |
|
6/30/2018 |
|
3/31/2018 |
|
12/31/2017 |
| Demand: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-interest bearing |
|
$ |
46,690 |
|
|
$ |
45,501 |
|
|
$ |
42,687 |
|
|
$ |
36,751 |
|
|
$ |
36,919 |
|
|
Interest-bearing |
|
134,123 |
|
|
150,248 |
|
|
153,968 |
|
|
148,888 |
|
|
155,199 |
|
| Savings |
|
102,740 |
|
|
102,434 |
|
|
109,254 |
|
|
109,215 |
|
|
105,106 |
|
| Money market |
|
16,171 |
|
|
12,822 |
|
|
14,381 |
|
|
20,251 |
|
|
27,350 |
|
| Time |
|
120,855 |
|
|
126,592 |
|
|
128,222 |
|
|
118,738 |
|
|
124,339 |
|
| Total
deposits |
|
$ |
420,579 |
|
|
$ |
437,597 |
|
|
$ |
448,512 |
|
|
$ |
433,843 |
|
|
$ |
448,913 |
|
Capital
At December 31, 2018, the Company's total
stockholders' equity amounted to $66.6 million, or 11.40% of total
assets, compared to $73.0 million at December 31, 2017.
The Company’s book value per common share was $12.37 at
December 31, 2018, compared to $12.66 at December 31,
2017. The decline in shareholders' equity was primarily due to the
repurchase of 373,948 shares of common stock at a total cost of
$6.7 million and the payment of two special dividends in the
aggregate amount of $5.0 million, partially offset by net income of
$4.8 million.
At December 31, 2018, the Bank’s common
equity tier 1 ratio was 11.90%, tier 1 leverage ratio was 10.71%,
tier 1 capital ratio was 11.90% and the total capital ratio was
13.00%. 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
December 31, 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: |
|
12/31/2018 |
|
9/30/2018 |
|
6/30/2018 |
|
3/31/2018 |
|
12/31/2017 |
| Loans |
|
$499,368 |
|
|
$499,082 |
|
|
$500,959 |
|
|
$483,255 |
|
|
$472,388 |
|
| Securities held to
maturity |
|
41,460 |
|
|
43,871 |
|
|
36,494 |
|
|
37,661 |
|
|
39,899 |
|
| Allowance for loan
losses |
|
(5,686 |
) |
|
(5,624 |
) |
|
(5,538 |
) |
|
(5,461 |
) |
|
(5,376 |
) |
| All other assets |
|
41,211 |
|
|
37,466 |
|
|
38,053 |
|
|
38,851 |
|
|
41,886 |
|
| Total
assets |
|
$ |
576,353 |
|
|
$ |
574,795 |
|
|
$ |
569,968 |
|
|
$ |
554,306 |
|
|
$ |
548,797 |
|
| Non-interest bearing
deposits |
|
$ |
48,172 |
|
|
$ |
43,495 |
|
|
$ |
38,903 |
|
|
$ |
36,211 |
|
|
$ |
43,336 |
|
| Interest-bearing
deposits |
|
372,474 |
|
|
386,364 |
|
|
385,047 |
|
|
390,522 |
|
|
375,098 |
|
| Borrowings |
|
83,440 |
|
|
73,077 |
|
|
74,192 |
|
|
53,191 |
|
|
53,844 |
|
| Other liabilities |
|
2,585 |
|
|
2,320 |
|
|
2,495 |
|
|
1,972 |
|
|
3,104 |
|
| Stockholders'
Equity |
|
69,682 |
|
|
69,539 |
|
|
69,331 |
|
|
72,410 |
|
|
73,415 |
|
| Total
liabilities and shareholders' equity |
|
$ |
576,353 |
|
|
$ |
574,795 |
|
|
$ |
569,968 |
|
|
$ |
554,306 |
|
|
$ |
548,797 |
|
CEO outlook:
"2018 was a challenging year for the Company due
to intense competition for both loans and deposits in a rising
interest rate environment," stated Michael Shriner, President and
Chief Executive Officer. Mr. Shriner added "However, I am
very proud of our team for remaining focused on the bigger picture
of growing the Company in a safe and sound manner, and still
creating value for our shareholder through the combination of stock
repurchases and the distribution of two special dividends."
Mr. Shriner further commented, “From the top
down, we are committed to the overall improvement of the Company in
2019. Our management team continues to seek ways to become
more efficient, improve the overall risk profile of the Company,
and to create even more value for our shareholders, customers,
employees and the community."
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.
| |
|
Michael A. Shriner,
President & CEO |
|
| |
Contact: |
(908) 647-4000 |
|
| |
|
mshriner@millingtonbank.com |
|
| |
|
|
|
|
|
|
| MSB Financial Corp. and
Subsidiaries |
| |
|
|
|
|
|
|
| Consolidated Statements of Financial
Condition |
| |
At December 31,2018 |
At December 31,2017 |
| (Dollars in thousands,
except per share amounts) |
|
|
|
|
|
|
| Cash and
due from banks |
$ |
1,558 |
|
$ |
2,030 |
|
|
Interest-earning demand deposits with banks |
10,242 |
|
20,279 |
|
| Cash and
Cash Equivalents |
11,800 |
|
22,309 |
|
|
Securities held to maturity (fair value of $38,569 and $38,255,
respectively) |
39,476 |
|
38,482 |
|
| Loans
receivable, net of allowance for loan losses of $5,655 and $5,414,
respectively |
502,299 |
|
473,405 |
|
| Premises
and equipment |
8,180 |
|
8,698 |
|
| Federal
Home Loan Bank of New York stock, at cost |
4,756 |
|
2,131 |
|
| Bank
owned life insurance |
14,585 |
|
14,197 |
|
| Accrued
interest receivable |
1,615 |
|
1,607 |
|
| Other
assets |
1,789 |
|
2,211 |
|
|
Total Assets |
$ |
584,500 |
|
$ |
563,040 |
|
|
Liabilities and Stockholders' Equity |
|
|
|
Liabilities |
|
|
|
Deposits: |
|
|
|
Non-interest bearing |
$ |
46,690 |
|
$ |
36,919 |
|
| Interest
bearing |
373,889 |
|
411,994 |
|
| Total
Deposits |
420,579 |
|
448,913 |
|
| Advances
from Federal Home Loan Bank of New York |
94,275 |
|
37,675 |
|
| Advance
payments by borrowers for taxes and insurance |
749 |
|
686 |
|
| Other
liabilities |
2,251 |
|
2,741 |
|
|
Total Liabilities |
517,854 |
|
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; 5,389,054 and
5,768,632 issued and outstanding at December 31, 2018 and December
31, 2017, respectively |
54 |
|
58 |
|
| Paid-in
capital |
44,726 |
|
51,068 |
|
| Retained
earnings |
23,498 |
|
23,641 |
|
| Unearned
common stock held by ESOP (179,464 and 190,390 shares,
respectively) |
(1,632 |
) |
(1,742 |
) |
|
Total Stockholders' Equity |
66,646 |
|
73,025 |
|
|
Total Liabilities and Stockholders' Equity |
$ |
584,500 |
|
$ |
563,040 |
|
|
|
|
|
| |
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| MSB Financial Corp. and
Subsidiaries |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated Statements of Income |
| |
|
Three months endedDecember 31, |
|
Twelve months endedDecember 31, |
| |
|
2018 |
|
2017 |
|
2018 |
|
2017 |
| (in thousands
except per share amounts) |
|
|
|
|
|
|
|
|
| Interest
Income |
|
|
|
|
|
|
|
|
| Loans
receivable, including fees |
|
$ |
5,600 |
|
|
$ |
5,065 |
|
|
$ |
21,960 |
|
|
$ |
18,278 |
|
|
Securities held to maturity |
|
302 |
|
|
249 |
|
|
1,065 |
|
|
1,011 |
|
|
Other |
|
101 |
|
|
63 |
|
|
320 |
|
|
191 |
|
|
Total Interest Income |
|
6,003 |
|
|
5,377 |
|
|
23,345 |
|
|
19,480 |
|
| Interest
Expense |
|
|
|
|
|
|
|
|
|
Deposits |
|
1,039 |
|
|
747 |
|
|
3,834 |
|
|
2,450 |
|
|
Borrowings |
|
505 |
|
|
305 |
|
|
1,564 |
|
|
996 |
|
|
Total Interest Expense |
|
1,544 |
|
|
1,052 |
|
|
5,398 |
|
|
3,446 |
|
|
Net Interest Income |
|
4,459 |
|
|
4,325 |
|
|
17,947 |
|
|
16,034 |
|
| Provision for
Loan Losses |
|
— |
|
|
200 |
|
|
240 |
|
|
1,185 |
|
|
Net Interest Income after Provision for Loan
Losses |
|
4,459 |
|
|
4,125 |
|
|
17,707 |
|
|
14,849 |
|
| Non-Interest
Income |
|
|
|
|
|
|
|
|
| Fees and
service charges |
|
82 |
|
|
86 |
|
|
334 |
|
|
342 |
|
| Income
from bank owned life insurance |
|
96 |
|
|
100 |
|
|
388 |
|
|
413 |
|
|
Other |
|
20 |
|
|
25 |
|
|
78 |
|
|
67 |
|
|
Total Non-Interest Income |
|
198 |
|
|
211 |
|
|
800 |
|
|
822 |
|
| Non-Interest
Expenses |
|
|
|
|
|
|
|
|
| Salaries
and employee benefits |
|
1,566 |
|
|
1,579 |
|
|
6,673 |
|
|
6,240 |
|
| Directors
compensation |
|
125 |
|
|
192 |
|
|
490 |
|
|
743 |
|
| Occupancy
and equipment |
|
392 |
|
|
403 |
|
|
1,564 |
|
|
1,620 |
|
| Service
bureau fees |
|
96 |
|
|
65 |
|
|
347 |
|
|
229 |
|
|
Advertising |
|
2 |
|
|
12 |
|
|
33 |
|
|
24 |
|
| FDIC
assessment |
|
17 |
|
|
53 |
|
|
211 |
|
|
184 |
|
|
Professional services |
|
513 |
|
|
297 |
|
|
1,730 |
|
|
1,347 |
|
|
Other |
|
200 |
|
|
223 |
|
|
813 |
|
|
794 |
|
|
Total Non-Interest Expenses |
|
2,911 |
|
|
2,824 |
|
|
11,861 |
|
|
11,181 |
|
| Income before
Income Taxes |
|
1,746 |
|
|
1,512 |
|
|
6,646 |
|
|
4,490 |
|
| Income
Tax Expense |
|
491 |
|
|
1,240 |
|
|
1,811 |
|
|
1,768 |
|
| Net
Income |
|
$ |
1,255 |
|
|
$ |
272 |
|
|
$ |
4,835 |
|
|
$ |
2,722 |
|
| Earnings per
share: |
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.24 |
|
|
$ |
0.05 |
|
|
$ |
0.90 |
|
|
$ |
0.49 |
|
|
Diluted |
|
$ |
0.24 |
|
|
$ |
0.05 |
|
|
$ |
0.90 |
|
|
$ |
0.48 |
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
| 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) |
12/31/2018 |
|
9/30/2018 |
|
12/31/2017 |
|
(unaudited) |
|
|
|
|
|
|
Statements of Operations Data |
|
|
|
|
|
|
|
|
|
|
|
|
| Interest
income |
$ |
6,003 |
|
|
$ |
6,175 |
|
|
$ |
5,377 |
|
| Interest
expense |
1,544 |
|
|
1,420 |
|
|
1,052 |
|
| Net
interest income |
4,459 |
|
|
4,755 |
|
|
4,325 |
|
| Provision
for loan losses |
— |
|
|
60 |
|
|
200 |
|
| Net
interest income after provision for loan losses |
4,459 |
|
|
4,695 |
|
|
4,125 |
|
| Other
income |
198 |
|
|
190 |
|
|
211 |
|
| Other
expense |
2,911 |
|
|
3,064 |
|
|
2,824 |
|
| Income
before income taxes |
1,746 |
|
|
1,821 |
|
|
1,512 |
|
| Income
tax expense (benefit) |
491 |
|
|
506 |
|
|
1,240 |
|
| Net
Income |
$ |
1,255 |
|
|
$ |
1,315 |
|
|
$ |
272 |
|
|
Earnings (per Common Share) |
|
|
|
|
|
|
Basic |
$ |
0.24 |
|
|
$ |
0.25 |
|
|
$ |
0.05 |
|
|
Diluted |
$ |
0.24 |
|
|
$ |
0.24 |
|
|
$ |
0.05 |
|
|
Statements of Condition Data (Period-End) |
|
|
|
|
|
|
Investment securities held to maturity (fair value of $38,569,
$41,765, and $38,255) |
$ |
39,476 |
|
|
$ |
43,009 |
|
|
$ |
38,482 |
|
| Loans
receivable, net of allowance for loan losses |
502,299 |
|
|
494,848 |
|
|
473,405 |
|
| Total
assets |
584,500 |
|
|
590,394 |
|
|
563,040 |
|
|
Deposits |
420,579 |
|
|
437,597 |
|
|
448,913 |
|
|
Borrowings |
94,275 |
|
|
80,075 |
|
|
37,675 |
|
|
Stockholders' equity |
66,646 |
|
|
70,008 |
|
|
73,025 |
|
|
Common Shares Dividend Data |
|
|
|
|
|
| Cash
dividends |
$ |
2,522 |
|
|
$— |
|
$— |
|
Weighted Average Common Shares
Outstanding |
|
|
|
|
|
|
|
|
|
Basic |
5,276,116 |
|
|
5,330,029 |
|
|
5,577,314 |
|
|
Diluted |
5,317,305 |
|
|
5,388,577 |
|
|
5,588,598 |
|
|
Operating Ratios |
|
|
|
|
|
| Return on
average assets |
0.87 |
% |
|
0.92 |
% |
|
0.20 |
% |
| Return on
average equity |
7.20 |
% |
|
7.56 |
% |
|
1.48 |
% |
| Average
equity / average assets |
12.09 |
% |
|
12.10 |
% |
|
13.38 |
% |
| Book
value per common share (period-end) |
$ |
12.37 |
|
|
$ |
12.70 |
|
|
$ |
12.66 |
|
MSB Financial (NASDAQ:MSBF)
Historical Stock Chart
From Mar 2024 to Apr 2024
MSB Financial (NASDAQ:MSBF)
Historical Stock Chart
From Apr 2023 to Apr 2024
