Clifton Bancorp Inc. (Nasdaq:CSBK) (the “Company”), the holding
company for Clifton Savings Bank (“CSBK”), today announced results
for the second quarter ended September 30, 2017. Net income for the
second quarter was $2.31 million ($0.11 per share, basic and
diluted) as compared to net income of $1.24 million ($0.06 per
share, basic and diluted) for the second quarter ended September
30, 2016. Net income for the six months ended September 30, 2017
was $3.71 million ($0.17 per share, basic and diluted) as compared
to $2.26 million ($0.10 per share, basic and diluted) for the same
period in 2016.
The Board of Directors also announced today a cash dividend of
$0.06 per common share for the quarter ended September 30, 2017.
The dividend will be paid on December 1, 2017 to stockholders of
record on November 17, 2017.
Notable Items
- Net income increased by 85.7%, or $1.1
million, to $2.31 million for the quarter ended September 30, 2017
compared to $1.24 million for the quarter ended September 30,
2016;
- Net income for the quarter ended
September 30, 2017 included gains on the sale of securities
totaling $593,000 versus no gains for the 2016 quarter;
- Total assets increased 8.6%, or $122.7
million, from $1.43 billion at March 31, 2017 to $1.55 billion at
September 30, 2017;
- Loans receivable, net grew 13.2%, or
$132.6 million, from $1.01 billion at March 31, 2017 to $1.14
billion at September 30, 2017:
- One-to-four family real estate loans
increased 3.0%, or $21.0 million, from $702.4 million at March 31,
2017 to $723.4 million at September 30, 2017;
- Multi-family and commercial real estate
loans increased 38.2%, or $112.4 million, from $294.4 million at
March 31, 2017 to $406.8 million at September 30, 2017;
- Loan mix between one-to-four family
real estate loans, and multi-family and commercial real estate
loans, to total loans shifted from 69.5% and 29.1%, respectively,
at March 31, 2017, to 63.2% and 35.6%, respectively, at September
30, 2017;
- Deposits increased 8.3%, or $69.7
million, from $844.8 at March 31, 2017 to $914.6 at September 30,
2017 with savings and checking deposits to total deposits
increasing from 33.9% at March 31, 2017 to 36.7% at September 30,
2017;
- Stockholders’ equity declined as a
percentage of total assets from 23.1% at September 30, 2016, and
20.7% at March 31, 2017, to 18.4% at September 30, 2017; and
- The Company repurchased 299,100 shares
at a weighted average price of $15.76 during the quarter ended
September 30, 2017. Since the Company commenced its first post
second-step conversion repurchase program on April 1, 2015, it has
repurchased 5,960,753 shares at a weighted average price of $14.50
per share.
Paul M. Aguggia, Chairman and Chief Executive Officer, stated,
“We are pleased with our second quarter results as we increased net
income in the face of continuing margin pressure. The primary
driver of our increased earnings continues to be our overall loan
growth. We approach the second half of our fiscal year with
continued confidence in our ability to generate relatively higher
yielding assets. Lowering our cost of funds remains a priority, but
is a significant challenge in our hyper competitive
deposit-gathering environment. ”
Balance Sheet and Credit Quality
Review
Total assets increased $122.7 million, or 8.6%, from $1.43
billion at March 31, 2017, to $1.55 billion at September 30, 2017.
The increase in total assets was primarily due to an increase in
loans.
Net loans increased $132.6 million, or 13.2%, from $1.01 billion
at March 31, 2017, to $1.14 billion at September 30, 2017.
One-to-four family real estate loans increased $21.0 million, or
3.0%, while multi-family and commercial real estate loans increased
$112.4 million, or 38.2%, during the six months ended September 30,
2017. Securities, including both available for sale and held to
maturity issues, decreased $15.7 million, or 5.0%, from $315.3
million at March 31, 2017, to $299.6 million at September 30, 2017,
mainly due to sales, maturities and repayments. Securities held to
maturity totaling $10.2 million were sold during the six-month
period ended September 30, 2017, resulting in a gain of $593,000.
One security totaling $3.7 million was sold during the six-month
period ended September 30, 2016, resulting in a gain of $84,000.
Cash and cash equivalents increased $1.4 million, or 9.5%, from
$14.7 million at March 31, 2017, to $16.0 million at September 30,
2017, as a small portion of cash flows from deposits and borrowed
funds were not yet redeployed into higher yielding assets.
Deposits increased $69.7 million, or 8.3%, from $844.8 million
at March 31, 2017, to $914.6 million at September 30, 2017. CSBK
launched a high-yielding checking account in May 2017 that was
responsible for a significant percentage of the period’s deposit
growth. Borrowed funds increased $64.9 million, or 23.5%, from
$275.8 million at March 31, 2017, to $340.7 million at September
30, 2017. The Company’s outstanding borrowings at September 30,
2017 had a weighted average rate of 1.81% and a weighted average
term of 19 months. All outstanding borrowings are with the Federal
Home Loan Bank of New York.
Total stockholders’ equity decreased $10.7 million, or 3.6%,
from $296.6 million at March 31, 2017, to $285.9 million at
September 30, 2017 primarily as a result of $8.7 million in
repurchases of common stock, and the payment of $7.9 million in
cash dividends, including the $0.25 special dividend paid in July
totaling $5.3 million, partially offset by net income of $3.7
million.
Nonaccrual loans increased $656,000, or 17.8%, to $4.3 million
at September 30, 2017 as compared to $3.7 million at March 31,
2017. Included in nonaccrual loans at September 30, 2017 were seven
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 nonaccrual status pending a sustained period of repayment
performance (generally six months). The percentage of nonperforming
loans to total gross loans was 0.41% at both September 30, 2017 and
March 31, 2017. The allowance for loan losses to nonperforming
loans increased to 154.12% at September 30, 2017 from 146.11% at
March 31, 2017, as nonperforming one-to-four family loans increased
slightly and provisions were added (mainly due to significant
increases in loans outstanding).
Income Statement Review
Net interest income increased by $1.1 million, or 16.0%, to $8.2
million for the three months ended September 30, 2017, as compared
to $7.1 million for the three months ended September 30, 2016. Net
interest income increased despite a decrease of 7 basis points in
net interest margin and a decrease of $9.6 million in average net
interest-earning assets. The increase was primarily due to other
categories of interest-earning assets being redeployed into CSBK’s
highest yielding asset category (multi-family and commercial
loans).
Net interest income increased by $2.1 million, or 14.9%, to
$16.1 million for the six months ended September 30, 2017, as
compared to $14.0 million for the six months ended September 30,
2016. Net interest income increased despite a decrease of 8 basis
points in net interest margin and a decrease of $9.2 million in
average net interest-earning assets. Net interest income increased
for the reason noted above.
The provision for loan losses increased $105,000, or 20.8%, to
$610,000 for the three months ended September 30, 2017, as compared
to $505,000 for the three months ended September 30, 2016, and
increased $169,000, or 16.4%, to $1.20 million for the six months
ended September 30, 2017, as compared to $1.03 million for the six
months ended September 30, 2016. The increases in the provisions
for both periods were due in large part to the significant growth
in the balance of outstanding loans, mainly commercial and
multi-family real estate loans, which based on their risk profile
require more reserves than residential loans.
Non-interest income for the three months ended September 30,
2017 increased $610,000, or 121.8%, to $1.11 million, as compared
to $501,000 for the three months ended September 30, 2016, as the
2017 period included a $593,000 gain on the sale of securities and
a $75,000 gain on the sale of real estate owned, compared to no
gains noted in the 2016 period.
Non-interest income for the six months ended September 30, 2017
increased $530,000, or 51.6%, to $1.6 million, as compared to $1.0
million for the six months ended September 30, 2016, mostly due to
the gains noted above in the 2017 period. The 2016 period included
an $84,000 gain on the sale of securities.
Non-interest expenses for the three months ended September 30,
2017 increased $79,000, or 1.5%, to $5.4 million, as compared to
$5.3 million for the three months ended September 30, 2016. The
increase consisted primarily of increases in advertising and
marketing expenses of $68,000, or 68.7%, and occupancy expenses of
$59,000, or 13.6%, partially offset by a decrease in federal
deposit insurance premium of $44,000, or 29.0%. The increase in
advertising and marketing expenses was related to the costs to
promote CSBK’s recently opened Hoboken and Montclair banking
centers, as well as the new checking account product referenced
above. The increase in occupancy expenses was mainly related to
operational costs of the Montclair banking center. The decrease in
federal deposit insurance premium in the 2017 period was due to the
revision of the FDIC assessment system, which began on July 1,
2016, and is only partially reflected in the 2016 period expense.
Revisions for “small institutions” (under $10 billion in assets)
resulted in, among other things, a change in the financial ratios
method used to determine assessment rates.
Non-interest expenses for the six months ended September 30,
2017 increased $212,000, or 2.0%, to $11.0 million, as compared to
$10.8 million for the six months ended September 30, 2016. The
increase consisted primarily of increases in advertising and
marketing expenses of $149,000, or 59.1%, and occupancy expenses of
$102,000, or 12.0%, partially offset by a decrease in federal
deposit insurance premium of $87,000, or 30.0%. The increases
relate to the same items noted above.
Income taxes for the three months ended September 30, 2017
increased $496,000, or 96.7%, to $1.0 million, as compared to
$513,000 for the three ended September 30, 2016, and increased
$781,000, or 81.3%, to $1.74 million for the six months ended
September 30, 2017, as compared to $961,000 for the six months
ended September 30, 2016. The increases resulted from higher
pre-tax income, coupled with a slight increase in the effective
income tax rate. The overall effective income tax rates were 30.4%
and 32.0%, respectively for the 2017 periods compared with 29.3%
and 29.9%, respectively for the 2016 periods.
About Clifton Bancorp
Inc.
Clifton Bancorp Inc. is the holding company for CSBK (Clifton
Savings Bank), a federally chartered savings bank headquartered in
Clifton, New Jersey. CSBK is a metropolitan, community-focused bank
serving residents and 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 8, 2017. 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 September 30, At March 31,
2017 2017 (In thousands)
Financial Condition Data: Total assets $ 1,554,521 $
1,431,803 Loans receivable, net 1,140,419 1,007,844 Cash and cash
equivalents 16,044 14,653 Securities 299,640 315,348 Deposits
914,573 844,825 FHLB advances 340,700 275,800 Total stockholders'
equity 285,943 296,619
Selected Consolidated Operating Data
Three Months Ended Six Months Ended
September 30, September 30, 2017
2016 2017 2016 (In thousands,
except per share data)
Operating Data: Interest income $
12,229 $ 9,916 $ 23,715 $ 19,507 Interest expense 4,026
2,847 7,623 5,496 Net interest income 8,203
7,069 16,092 14,011 Provision for loan losses 610 505
1,200 1,031 Net interest income after provision for
loan losses 7,593 6,564 14,892 12,980 Non-interest income 1,111 501
1,558 1,028 Non-interest expenses 5,390 5,311
11,002 10,790 Income before income taxes 3,314 1,754 5,448
3,218 Income taxes 1,009 513 1,742 961
Net income $ 2,305 $ 1,241 $ 3,706 $ 2,257 Basic earnings per share
$ 0.11 $ 0.06 $ 0.17 $ 0.10 Diluted earnings per share $ 0.11 $
0.06 $ 0.17 $ 0.10 Average shares outstanding - basic 21,274
22,216 21,322 22,495 Average shares outstanding - diluted 21,411
22,276 21,474 22,555
Average Balance Table
Three Months Ended September 30, 2017
2016 Interest
Interest Average
and Yield/ Average and Yield/
Balance
Dividends
Cost
Balance
Dividends
Cost
Assets: (Dollars in thousands) Interest-earning assets:
Loans receivable $ 1,107,262 $ 10,112 3.65 % $ 855,838 $ 7,748 3.62
% Mortgage-backed securities 248,079 1,579 2.55 % 267,646 1,734
2.59 % Investment securities 55,914 270 1.93 % 59,099 283 1.92 %
Other interest-earning assets 39,524 268 2.71 %
28,402 151 2.13 % Total interest-earning assets
1,450,779 12,229 3.37 % 1,210,985 9,916 3.27 %
Non-interest-earning assets 85,339 85,425
Total
assets $ 1,536,118 $ 1,296,410
Liabilities and stockholders' equity:
Interest-bearing liabilities: Demand accounts $ 97,727 160 0.65 % $
53,270 14 0.11 % Savings and Club accounts 205,035 234 0.46 %
183,426 178 0.39 % Certificates of deposit 571,976
2,101 1.47 % 492,921 1,731 1.40 % Total
interest-bearing deposits 874,738 2,495 1.14 % 729,617 1,923 1.05 %
FHLB Advances 330,475 1,531 1.85 % 226,250
924 1.63 % Total interest-bearing liabilities 1,205,213
4,026 1.34 % 955,867 2,847 1.19 %
Non-interest-bearing liabilities: Non-interest-bearing deposits
27,950 23,512 Other non-interest-bearing liabilities 15,469
11,652 Total non-interest-bearing liabilities 43,419
35,164 Total liabilities 1,248,632 991,031
Stockholders' equity 287,486 305,379
Total
liabilities and stockholders' equity $ 1,536,118
$ 1,296,410 Net interest income $ 8,203 $
7,069 Interest rate spread 2.03 % 2.08 % Net interest margin 2.26 %
2.33 % Average interest-earning assets to average interest-bearing
liabilities 1.20 x 1.27 x
Six
Months Ended September 30, 2017
2016 Interest
Interest Average and
Yield/ Average and Yield/
Balance Dividends
Cost Balance
Dividends Cost
Assets: (Dollars in thousands) Interest-earning assets:
Loans receivable $ 1,072,038 $ 19,501 3.64 % $ 828,462 $ 14,966
3.61 % Mortgage-backed securities 250,519 3,196 2.55 % 270,566
3,577 2.64 % Investment securities 56,351 541 1.92 % 65,440 691
2.11 % Other interest-earning assets 36,795 477 2.59
% 29,388 273 1.86 % Total interest-earning assets
1,415,703 23,715 3.35 % 1,193,856 19,507 3.27 %
Non-interest-earning assets 86,113 85,722
Total assets $ 1,501,816 $
1,279,578 Liabilities and stockholders'
equity: Interest-bearing liabilities: Demand accounts $ 80,421
208 0.52 % $ 53,390 29 0.11 % Savings and Club accounts 206,504 467
0.45 % 173,567 304 0.35 % Certificates of deposit 567,035
4,118 1.45 % 484,690 3,351 1.38 % Total
interest-bearing deposits 853,960 4,793 1.12 % 711,647 3,684 1.04 %
FHLB Advances 315,057 2,830 1.80 % 226,357
1,812 1.60 % Total interest-bearing liabilities 1,169,017
7,623 1.30 % 938,004 5,496 1.17 %
Non-interest-bearing liabilities: Non-interest-bearing deposits
28,072 21,463 Other non-interest-bearing liabilities 14,254
10,834 Total non-interest-bearing liabilities 42,326
32,297 Total liabilities 1,211,343 970,301
Stockholders' equity 290,473 309,277
Total
liabilities and stockholders' equity $ 1,501,816
$ 1,279,578 Net interest income $ 16,092 $
14,011 Interest rate spread 2.05 % 2.10 % Net interest margin 2.27
% 2.35 % Average interest-earning assets to average
interest-bearing liabilities 1.21 x 1.27 x
Asset Quality Data
Six Six Months Year Months
Ended Ended Ended September 30,
March 31, September 30, 2017
2017 2016 (Dollars in
thousands) Allowance for loan losses: Allowance at beginning of
period $ 6,100 $ 4,360 $ 4,360 Provision for loan losses 1,200
1,985 1,031 Charge-offs (1 ) (247 ) (193 ) Recoveries
11 2 2 Net recoveries
(charge-offs) 10 (245 ) (191 ) Allowance at
end of period $ 7,310 $ 6,100 $ 5,200
Allowance for loan losses to total gross loans 0.64 % 0.60 % 0.59 %
Allowance for loan losses to nonperforming loans 154.12 % 146.11 %
185.52 %
At September 30, At March 31,
At September 30, 2017
2017 2016 (Dollars in thousands)
Nonperforming Assets: Nonaccrual loans: One- to four-family real
estate $ 4,164 $ 3,508 $ 2,619 Commercial real estate 184
184 184 Total nonaccrual loans
4,348 3,692 2,803 Accruing loans past due 90 days or more
395 483 - 4,743 4,175 2,803 Real
estate owned 167 698 943
Total nonperforming assets $ 4,910 $ 4,873 $ 3,746
Total nonperforming loans to total gross loans 0.41 %
0.41 % 0.32 % Total nonperforming assets to total assets 0.32 %
0.34 % 0.29 %
Selected Consolidated Financial Ratios
Three Months Ended Six Months Ended
September 30, September 30,
Selected
Performance Ratios (1):
2017 2016 2017
2016 Return on average assets 0.60 % 0.38 % 0.49 %
0.35 % Return on average equity 3.21 % 1.63 % 2.55 % 1.46 %
Interest rate spread 2.03 % 2.08 % 2.05 % 2.10 % Net interest
margin 2.26 % 2.33 % 2.27 % 2.35 % Non-interest expenses to average
assets 1.40 % 1.64 % 1.47 % 1.69 % Efficiency ratio (2) 57.87 %
70.16 % 62.33 % 71.75 % Average interest-earning assets to average
interest-bearing liabilities 1.20x 1.27x 1.21x 1.27x Average equity
to average assets 18.72 % 23.56 % 19.34 % 24.17 % Dividend payout
ratio 55.40 % 107.28 % 212.55 % 119.36 % Net charge-offs to average
outstanding loans during the periods 0.00 % 0.04 % 0.00 % 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
September 30, June 30,
March 31, December 31,
September 30, 2017
2017
2017 2016
2016 (In thousands except
per share data)
Operating
Data
Interest income $ 12,229 $ 11,486 $ 10,774 $ 10,193 $ 9,916
Interest expense 4,026 3,597
3,246 3,071 2,847 Net interest
income 8,203 7,889 7,528 7,122 7,069 Provision for loan losses
610 590 541 413
505 Net interest income after provision for
loan losses 7,593 7,299 6,987 6,709 6,564 Non-interest income 1,111
447 426 460 501 Non-interest expenses 5,390
5,612 5,558 5,354 5,311
Income before income taxes 3,314 2,134 1,855 1,815 1,754
Income taxes 1,009 733 609
596 513 Net income $ 2,305
$ 1,401 $ 1,246 $ 1,219 $ 1,241
Share
Data
Basic earnings per share $ 0.11 $ 0.07 $ 0.06 $ 0.06 $ 0.06 Diluted
earnings per share $ 0.11 $ 0.07 $ 0.06 $ 0.06 $ 0.06 Dividends per
share $ 0.06 $ 0.31 $ 0.06 $ 0.06 $ 0.06 Average shares outstanding
- basic 21,274 21,369 21,887 22,020 22,216 Average shares
outstanding - diluted 21,411 21,525 22,025 22,150 22,276 Shares
outstanding at period end 22,065 22,299 22,549 23,046 23,086
Financial
Condition Data
Total assets $ 1,554,521 $ 1,525,028 $ 1,431,803 $ 1,371,265 $
1,312,190 Loans receivable, net 1,140,419 1,074,748 1,007,844
936,894 881,593 Cash and cash equivalents 16,044 48,280 14,653
22,277 22,758 Securities 299,640 304,060 315,348 319,163 317,147
Deposits 914,573 892,414 844,825 803,364 772,306 FHLB advances
340,700 324,800 275,800 252,500 224,500 Total stockholders' equity
285,943 288,152 296,619 303,098 302,890
Assets
Quality:
Total nonperforming assets $ 4,910 $ 5,149 $ 4,873 $ 4,171 $ 3,746
Total nonperforming loans to total gross loans 0.41 % 0.40 % 0.41 %
0.37 % 0.32 % Total nonperforming assets to total assets 0.32 %
0.34 % 0.34 % 0.30 % 0.29 % Allowance for loan losses $ 7,310 $
6,700 $ 6,100 $ 5,575 $ 5,200 Allowance for loan losses to total
gross loans 0.64 % 0.62 % 0.60 % 0.59 % 0.59 % Allowance for loan
losses to nonperforming loans 154.12 % 155.38 % 146.11 % 162.02 %
185.52 %
View source
version on businesswire.com: http://www.businesswire.com/news/home/20171101006614/en/
Clifton Bancorp Inc.Michael Lesler, 973-473-2200
Clifton Bancorp Inc. (MM) (NASDAQ:CSBK)
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