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MSB Financial Corp. Releases Fourth Quarter Earnings

MILLINGTON, N.J., Feb. 12, 2016 (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 twelve months ended December 31, 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 $2,000 for the three months ended December 31, 2015, compared to a net loss of $9,000 for the three months ended December 31, 2014. Net income for the twelve months ended December 31, 2015 was $443,000 compared to net income of $707,000 for the twelve months ended December 31, 2014. Net income for the quarter and the full year 2015 reflect the impact of $457,000 of charges related to the conversion from the Company’s existing core data processor as previously disclosed. In addition, the Company recorded expense of approximately $60,000 related to the conversion from its current website provider.

Net income per diluted common share was zero for both the three months ended December 31, 2015 and December 31, 2014. Net income per diluted common share was $0.08 for the twelve months ended December 31, 2015 compared to $0.13 for the twelve months ended December 31, 2014.

Total assets were $375.7 million at December 31, 2015, compared to $340.3 million at December 31, 2014, an increase of $35.4 million or 10.4%. 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 2015, the Company experienced growth of $30.9 million or 13.3%, in loans receivable, net. Commercial and multi-family real estate loans had the most growth during 2015 as the Company continues to diversify its loan portfolio.

The following table summarizes loan balances and composition at December 31, 2015 and 2014:

At At
December 31, December 31,
(In thousands)2015 2014
Residential mortgage:
One-to-four family$154,624 57.1% $144,966 61.2%
Home equity 35,002 12.9 36,847 15.6
Total residential mortgage 189,626 70.0 181,813 76.7
Commercial and multi-family real estate 59,642 22.0 31,637 13.4
Construction 10,895 4.0 12,651 5.3
Commercial and industrial 10,275 3.8 9,663 4.1
Total commercial loans 80,812 29.8 53,951 22.8
Consumer loans 493 0.2 1,152 0.5
Total loans receivable 270,931 100.0% 236,916 100.0%
Less:
Loans in process 4,600 1,499
Deferred loan fees 417 334
Allowance 3,602 3,634
Total loans receivable, net$262,312 $231,449

Other real estate owned (OREO) was reduced to zero as of December 31, 2015 compared to $1.3 million at December 31, 2014.

Total deposits at December 31, 2015 were $262.6 million compared with $266.1 million at December 31, 2014. Overall, deposits decreased by $3.5 million; however, non-interest-bearing balances increased by $3.3 million while interest-bearing deposits declined $6.8 million year-over-year 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 year 2015 was a transformative one for the organization. During the course of the year the Company undertook several significant transformations beginning with the adoption of a December fiscal year end, the expansion of an experienced management team and the successful completion of the Company’s stock offering and transition to a fully publicly held institution”, stated Michael A. Shriner, President and Chief Executive Officer. “Our staff is working diligently on a core system conversion that is expected to provide a more efficient and effective delivery system for our products and services to position us in the proper direction toward achieving our goal of becoming a high performing organization. Additionally, our transition to a managed IT function has provided for a stronger infrastructure and has assisted us greatly in managing the increasing risk of cybersecurity.”

Mr. Shriner added, “During 2015, our efforts related to loan production were substantial as well as our management of nonperforming assets indicated by the lack of OREO properties at December 31, 2015. Non-performing loans to total loans were 2.29% at December 31, 2015 compared to 2.57% at December 31, 2014.

“We are pleased to welcome two new experienced directors to our boards this quarter. Together with the board, Millington Bank and its employees are driven to deliver on the Vision that has been defined with Integrity and Passion,” Mr. Shriner concluded.

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 successful conversion of our core system and our continued ability to manage cybersecurity risks.

MSB FINANCIAL CORP
(In Thousands, except for per share amount)(Unaudited)
Statement of Financial Condition Data:12/31/201512/31/2014
Total assets$375,690 $340,252
Cash and cash equivalents 12,303 7,519
Loans receivable, net 262,312 231,449
Securities held to maturity 78,995 78,518
Deposits 262,598 266,068
Federal Home Loan Bank advances 32,675 30,000
Total stockholders' equity 76,363 41,025
Stock Information:
Number of shares of common stock outstanding 5,954 5,010
Book value per share of common stock*$12.83 $8.19
Closing market price$12.50 $8.99
*In in previous quarters, the unallocated shares of ESOP reduced the number of shares used for the calculation and to be consistent with industry releases we have adjusted our calculation to conform and make the date comparable to others within our industry.


Summary of Operations:
(In Thousands, except for per share amounts)
(Unaudited)
For the three months
ended December 31,
(Unaudited)
For the twelve months
ended December 31,
2015 2014 2015 2014
Total interest income$3,123 $2,981 $12,206 $11,990
Total interest expense 522 582 2,156 2,346
Net interest income 2,601 2,399 10,050 9,644
Provision for loan losses 90 - 113 400
Net interest income after provision for loan losses 2,511 2,399 9,937 9,244
Non-interest income 210 162 714 685
Non-interest expense 2,724 2,628 10,024 8,878
(Loss) income before taxes (3) (67) 627 1,051
Income tax (benefit) expense (5) (58) 184 344
Net income$2 $(9)$443 $707
Net income per common share - basic - - 0.08 0.13
Net income per common share - diluted - - 0.08 0.13
Weighted average number of shares - basic 5,737 5,632 5,685 5,625
Weighted average number of shares - diluted 5,786 5,632 5,717 5,625
Performance Ratios:
Return on average assets annualized 0.00% (0.01)% 0.12% 0.21%
Return on average common equity annualized 0.01% (0.09)% 0.79% 1.73%
Net interest margin 2.96% 3.02% 2.95% 3.00%
Efficiency ratio 96.91% 102.62% 93.13% 85.95%
Operating expenses / average assets annualized 2.92% 3.08% 2.77% 2.58%


For the three months ended
12/31/1512/31/14
Average Balance Sheet
(In Thousands)
Average BalanceInterest Income/ExpenseYieldAverage BalanceInterest Income/ExpenseYield
Interest-earning assets:
Loans Receivable$261,090 $2,660 4.08%$234,772 $2,537 4.32%
Securities held to maturity 79,112 438 2.21 79,750 423 2.12
Other interest-earning assets 11,490 25 0.87 3,056 21 2.75
Total interest-earning assets 351,692 3,123 3.55 317,578 2,981 3.75
Allowance for Loan Loss (3,631) (3,523)
Non-interest-earning assets 24,961 27,719
Total non-interest-earning assets 21,330 24,196
Total Assets$ 373,022 $341,774
Interest-bearing liabilities:
NOW & Money Market$ 44,789 $19 0.17%$ 42,367 $ 16 0.15%
Savings and club deposits 102,156 58 0.23 99,938 55 0.22
Certificates of deposit 82,741 241 1.17 95,985 318 1.33
Total interest-bearing deposits 229,686 318 0.55 238,290 389 0.65
Federal Home Loan Bank advances 32,675 204 2.50 30,870 193 2.50
Total interest-bearing liabilities 262,361 522 0.80 269,160 582 0.86
Non-interest-bearing deposit 30,462 28,413
Other non-interest-bearing liabilities 3,504 2,858
Total Liabilities 296,327 300,431
Equity 76,695 41,343
Total Liabilities and Equity$373,022 $341,774
Net Interest Spread 2,601 2.75% 2,399 2.89%
Net Interest Margin 2.96% 3.02%
Ratio of Interest Earning Assets to Interest Bearing Liabilities 134.05% 117.99%


For the twelve months ended
12/31/1512/31/14
Average Balance Sheet
(In Thousands)
Average BalanceInterest Income/ExpenseYieldAverage BalanceInterest Income/ExpenseYield
Interest-earning assets:
Loans Receivable$247,997 $10,376 4.18%$234,619 $10,095 4.30%
Securities held to maturity 79,868 1,726 2.16 83,338 1,807 2.17
Other interest-earning assets 12,880 104 0.81 3,428 88 2.57
Total interest-earning assets 340,745 12,206 3.58 321,385 11,990 3.73
Allowance for Loan Loss (3,593) (3,645)
Non-interest-earning assets 25,066 26,842
Total non-interest-earning assets 21,473 23,197
Total Assets$ 362,218 $344,582
Interest-bearing liabilities:
NOW & Money Market$ 46,493 $75 0.16%$ 41,217 $ 57 0.14%
Savings and club deposits 101,106 223 0.22 103,345 223 0.22
Certificates of deposit 86,948 1,064 1.22 97,640 1.291 1.32
Total interest-bearing deposits 234,547 1,362 0.58 242,202 1,571 0.65
Federal Home Loan Bank advances 34,087 794 2.33 33,865 775 2.29
Total interest-bearing liabilities 268,634 2,156 0.80 276,067 2,346 0.85
Non-interest-bearing deposit 34,248 24,698
Other non-interest-bearing liabilities 3,135 2,959
Total Liabilities 306,017 303,724
Equity 56,201 40,858
Total Liabilities and Equity$362,218 $344,582
Net Interest Spread 10,050 2.78% 9,644 2.88%
Net Interest Margin 2.95% 3.00%
Ratio of Interest Earning Assets to Interest Bearing Liabilities 126.84% 116.42%


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

Source:MSB Financial Corp.