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MSB Financial Corp. Releases Third Quarter Earnings

MILLINGTON, N.J., Nov. 13, 2015 (GLOBE NEWSWIRE) -- 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, 2015. The results of operations reflect the results of operations of MSB Financial Corp., a federal corporation (“Old MSB”) which was merged with and into the Company on July 16, 2015 upon completion of the second-step conversion transaction.

The Company reported net income of $258,000 for the three months ended September 30, 2015, compared to net income of $227,000 for the three months ended September 30, 2014. Net income for the nine months ended September 30, 2015 was $441,000 compared to net income of $716,000 for the nine months ended September 30, 2014.

Net income per diluted common share was $0.04 for the three months ended September 30, 2015 compared to net income per diluted common share of $0.04 for the three months ended September 30, 2014. Net income per diluted common share was $0.08 for the nine months ended September 30, 2015 compared to $0.13 for the nine months ended September 30, 2014.

Total assets were $370.8 million at September 30, 2015, compared to $340.3 million at December 31, 2014, an increase of $30.5 million or 9.0%. On July 16, 2015, the Company sold 3,766,592 shares of its common stock (including 150,663 shares sold to the Bank’s employee stock ownership plan) at $10.00 per share, for gross proceeds of approximately $37.7 million. In addition, 2,187,242 shares were issued to former holders of the common stock of Old MSB (other than the MHC) in exchange for such shares at a per share exchange ratio of 1.1397 with cash paid in lieu of fractional shares. During the nine-month period ending September 30, 2015 the Company experienced growth of $20.8 million or 9.0%, in loans receivable, net, and $1.6 million, or 2.0% within the investment portfolio. In addition, other real estate owned (OREO) declined by $738,000 or 57.5% to $545,000 as of September 30, 2015 compared to $1.3 million at December 31, 2014.

Total deposits at September 30, 2015 were $258.1 million compared with $266.1 million as of December 31, 2014. Overall, deposits decreased by $8.0 million with non-interest-bearing balances increasing by $4.4 million while interest-bearing deposits declined $12.3 million since December 31, 2014 as the Company focused on deposit pricing and the development of deeper customer relationships. Within non-interest-bearing accounts, growth was experienced in business checking accounts. Savings and club account growth combined to offset some of the decrease in certificates of deposit during the quarter.

“The organization remains focused on the future, and to that end, we have evaluated and recently selected a new core data services platform that will enable us to execute on our strategy, enhance delivery channels and provide efficient and effective solutions”, stated Michael A. Shriner, President and Chief Executive Officer. “In addition we have also contracted with a managed IT provider that brings the strength and expertise of an industry leader which will enable the Company to operate in a secure and effective fashion and manage the ever-present cybersecurity threats. The core data processing conversion will occur in May 2016 and we anticipate recording the costs associated with the conversion from our existing provider during the fourth quarter of 2015 which we currently estimate to be between $400,000 and $450,000.”

Mr. Shriner added, “During the first nine months of 2015, we reduced our OREO properties from three properties totaling $1.3 million to two properties carried at $545,000 and during the month of October 2015 both remaining properties were sold with no additional loss. In addition, non-performing loans continue to improve year-over-year. Non-performing loans to total loans were 2.60% at September 30, 2015 compared to 2.93% at September 30, 2014.

“The Company has also embarked on a rebranding effort and its subsidiary is now known as Millington Bank. We fully expect to execute on our promise of Vision, Integrity and Passion and deliver a V.I.P. experience to our customers, new and existing alike.” Mr. Shriner concluded.


MSB FINANCIAL CORP
(Dollars in Thousands, except for per share amount)(Unaudited)
Statement of Financial Condition Data:9/30/201512/31/2014
Total assets$370,799 $340,252
Cash and cash equivalents 16,290 7,519
Loans receivable, net 252,242 231,449
Securities held to maturity 80,118 78,518
Deposits 258,112 266,068
Federal Home Loan Bank advances 32,675 30,000
Total stockholders' equity 76,349 41,025


Summary of Operations: (Dollars in Thousands, except for per share amounts)(Unaudited)
For the three months ended September 30,
(Unaudited)
For the nine months ended September 30,
2015 2014 2015 2014
Total interest income$3,116 $2,987 $9,083 $9,009
Total interest expense 532 591 1,634 1,764
Net interest income 2,584 2,396 7,449 7,245
Provision for loan losses 40 100 23 400
Net interest income after provision for loan losses 2,544 2,296 7,426 6,845
Non-interest income 172 162 504 523
Non-interest expense 2,325 2,116 7,300 6,250
Income before taxes 391 342 630 1118
Income tax expense 133 115 189 402
Net income$258 $227 $441 $716
Net income per common share - basic 0.05 0.04 0.08 0.13
Net income per common share - diluted 0.04 0.04 0.08 0.13
Weighted average number of shares - basic 5,721 5,622 5,667 5,620
Weighted average number of shares - diluted 5,765 5,622 5,693 5,620
Book Value per Share$13.31 $8.32 $13.31 $8.32
Closing Stock Price$11.60 $7.35 $11.60 $7.35
Performance Ratios:
Efficiency Ratio 84.36% 82.72% 91.79% 80.46%
Return on average assets annualized 0.27% 0.26% 0.16% 0.28%
Return on average common equity annualized 1.59% 2.22% 1.19% 2.35%
Operating expenses / average assets annualized 2.46% 2.45% 2.71% 2.41%



For the nine months ended
09/30/159/30/14
Average Balance Sheet
Average
Balance
Interest
Income/
Expense


Yield

Average
Balance
Interest
Income/
Expense


Yield
Interest-earning assets:
Loans Receivable$243,584 $7,716 4.22%$234,568 $7,558 4.30%
Securities held to maturity 80,123 1,288 2.14% 84,547 1,384 2.18%
Other interest-earning assets 13,349 79 0.79% 3,554 67 2.51%
Total interest-earning assets 337,056 9,083 3.59% 322,669 9,009 3.72%
Allowance for Loan Loss (3,580) (3,686)
Non-interest-earning assets 25,102 26,546
Non-interest-earning assets 21,522 22,860
Total Assets$ 358,578 $345,529
Interest-bearing liabilities:
NOW & Money Market$ 47,067 $56 0.16%$ 40,830 $ 41 0.13%
Savings and club deposits 100,753 165 0.22% 104,493 168 0.21%
Certificates of deposit 88,366 823 1.24% 98,198 973 1.32%
Total interest-bearing deposits 236,186 1,044 0.59% 243,521 1,182 0.65%
Federal Home Loan Bank advances 34,563 590 2.28% 34,875 582 2.23%
Total interest-bearing liabilities 270,749 1,634 0.80% 278,396 1,764 0.84%
Non-interest-bearing deposit 35,524 23,446
Other non-interest-bearing liabilities 3,011 2,992
Total Liabilities 309,284 304,834
Equity 49,294 40,695
Total Liabilities and Equity$358,578 $345,529
Net Interest Spread $ 7,449 2.79% $ 7,245 2.88%
Net Interest Margin 2.95% 2.99%
Ratio of Interest Earning Assets to Interest Bearing Liabilities 124.49% 115.90%


Michael A. Shriner, President & CEO (908) 647-4000 mshriner@millingtonbank.com

Source:MSB Financial Corp.