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MSB Financial Corp. Releases Fourth Quarter and Full Year Earnings

MILLINGTON, N.J., Jan. 31, 2017 (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, 2016.

The Company reported net income of $478,000, or $0.09 per diluted common share for the three months ended December 31, 2016, compared to $2,000, or zero per diluted common share for the three months ended December 31, 2015. Net income for the full 2016 year was $1.2 million, or $0.20 per diluted common share compared to net income of $443,000, or $0.08 per diluted common share for the full year of 2015.

Highlights for the full year 2016:

  • Net interest margin improved 18 basis points to 3.13% from 2015
  • Loan growth was 40.3% year over year driven by commercial real estate and commercial lending
  • Deposit growth was $99.7 million or 38% during the year
  • Efficiency ratio improved from 93.13% to 79.90% driven by an increase in net interest income year over year

Growth in net interest income and margin reflect growth in commercial loans
Net interest income grew $1.9 million or 19.0% to $12.0 million for the year ended December 31, 2016 compared to $10.1 million for the year ended December 31, 2015. Net interest margin for the year ended December 31, 2016 was 3.13%, an improvement of 18 basis points, compared to 2.95% for the year ended December 31, 2015. Net interest income and net interest margin both increased primarily due to the Company’s loan growth in the commercial real estate and commercial loan portfolios.

Strong organic loan growth year over year
At December 31, 2016, the Company’s net loan portfolio totaled $368.0 million, an increase of $105.7 million, or 40.3%, compared to $262.3 million at December 31, 2015. Included in this increase was $67.4 million in organic loan growth and $38.3 million in purchased and participation loans. These loans consisted of $34.7 million in commercial real estate loans and $3.6 million in one-to-four family residential mortgages. The commercial and multi-family real estate loan segment had significant growth during the year as the Company continues to focus on building commercial relationships and further diversifying its loan portfolio.

The following table summarizes loan balances and composition at December 31, 2016 and December 31, 2015:

At At
December 31, December 31,
(In thousands)2016 2015
Residential mortgage:
One-to-four family$160,534 42.3% $154,624 57.1%
Home equity 32,262 8.5 35,002 12.9
Total residential mortgage 192,796 50.8 189,626 70.0
Commercial and multi-family real estate 124,656 32.8 59,642 22.0
Construction 16,554 4.4 10,895 4.0
Commercial and industrial 45,246 11.9 10,275 3.8
Total commercial loans 186,456 49.1 80,812 29.8
.
Consumer loans 446 0.1 493 0.2
Total loans receivable 379,698 100.0% 270,931 100.0%
Less:
Loans in process 6,557 4,600
Deferred loan fees 658 417
Allowance 4,476 3,602
Total loans receivable, net$368,007 $262,312

Deposit growth attributable to stronger business relationships
Total deposits at December 31, 2016 were $362.3 million compared with $262.6 million at December 31, 2015. Overall, deposits increased by $99.7 million, or 38.0% with most of the growth occurring in interest demand deposits, which increased $58.0 million or 138.4%. Noninterest demand deposits also increased $16.2 million, or 57.5%. Most of the growth in these two categories continues to be attributable to developing stronger relationships with our commercial and small business customers.

The following table summarizes deposit balances and composition at December 31, 2016 and December 31, 2015:

At At
(Dollars in thousands) December 31, 2016 December 31, 2015
Noninterest demand $44,365 12.25% $28,173 10.73%
Interest demand 99,879 27.57 41,893 15.95
Savings 103,163 28.47 102,196 38.92
Money Market 11,265 3.11 4,928 1.88
Total demand deposits 258,672 71.40 177,190 67.48
Certificates of Deposit 103,627 28.60 85,408 32.52
Total Deposits $362,299 100.00% $262,598 100.00%

CEO outlook:

“I am very proud of our entire staff and Board of Directors for the additional effort set forth to ensure that the Company executed on its 2016 strategic plan. What we accomplished in the past 12 months would not have been possible without a total team effort,” stated Michael A. Shriner, President and Chief Executive Officer.

Mr. Shriner added, “We are looking forward to continuing this momentum in 2017. Relationship banking was the driving force behind our recent success, so we will strive to further develop those relationships, as well as fostering new ones.”

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 and our continued ability to manage cybersecurity risks.

MSB FINANCIAL CORP
(In Thousands, except for per share amount)(Unaudited)
Statement of Financial Condition Data:12/31/201612/31/2015
Total assets$461,646 $375,690
Cash and cash equivalents 21,382 12,303
Loans receivable, net 368,007 262,312
Securities held to maturity 44,104 78,995
Deposits 362,299 262,598
Federal Home Loan Bank advances 22,675 32,675
Total stockholders' equity 73,185 76,363
Stock Information:
Number of shares of common stock outstanding 5,714 5,954
Book value per share of common stock$12.81 $12.83
Closing market price$14.70 $12.50


(Unaudited)
For the three months ended
December 31,
For the twelve months ended
December 31,
Summary of Operations:
(In Thousands, except for per share amounts)
2016 2015 2016 2015
Total interest income $3,949 $3,123 $14,210 $12,206
Total interest expense 649 522 2,247 2,156
Net interest income 3,300 2,601 11,963 10,050
Provision for loan losses 300 90 800 113
Net interest income after provision for loan losses 3,000 2,511 11,163 9,937
Non-interest income 205 210 1,041 714
Non-interest expense 2,417 2,724 10,390 10,024
Income before taxes 788 (3) 1,814 627
Income tax expense 310 (5) 653 184
Net income $478 $2 $1,161 $443
Net income per common share - basic $0.09 $- $0.21 0.08
Net income per common share - diluted $0.09 $- $0.20 0.08
Weighted average number of shares - basic 5,510 5,737 5,646 5,685
Weighted average number of shares - diluted 5,596 5,786 5,723 5,722
Performance Ratios:
Return on average assets annualized 0.44% 0.00% 0.29% 0.12%
Return on average common equity annualized 2.62% 0.01% 1.54% 0.79%
Net interest margin 3.19% 2.96% 3.13% 2.95%
Efficiency ratio 68.96% 96.91% 79.90% 93.13%
Operating expenses / average assets annualized 2.21% 2.92% 2.58% 2.77%


For the three months ended
12/31/2016 12/31/2015
Average Balance Sheet
(In Thousands)
Average
Balance
Interest
Income/
Expense
YieldAverage
Balance
Interest
Income/
Expense
Yield
Interest-earning assets:
Loans Receivable $343,684 $3,648 4.25%$261,090 $2,660 4.08%
Securities held to maturity 44,426 255 2.30 79,112 438 2.21
Other interest-earning assets 25,900 46 0.71 11,490 25 0.87
Total interest-earning assets 414,010 3,949 3.82 351,692 3,123 3.55
Allowance for Loan Loss (4,193) (3,631)
Non-interest-earning assets 28,015 24,961
Total non-interest-earning assets 23,822 21,330
Total Assets $437,832 $373,022
Interest-bearing liabilities:
NOW & Money Market $97,510 $82 0.34%$44,789 $19 0.17%
Savings and club deposits 104,383 59 0.23 102,156 58 0.23
Certificates of deposit 98,833 324 1.31 82,741 241 1.17
Total interest-bearing deposits 300,726 465 0.62 229,686 318 0.55
Federal Home Loan Bank advances 22,675 184 3.25 32,675 204 2.50
Total interest-bearing liabilities 323,401 649 0.80 262,361 522 0.80
Non-interest-bearing deposit 38,014 30,462
Other non-interest-bearing liabilities 3,374 3,504
Total Liabilities 364,789 296,327
Equity 73,043 76,695
Total Liabilities and Equity $437,832 $373,022
Net Interest Spread 3,300 3.02% 2,601 2.75%
Net Interest Margin 3.19% 2.96%
Ratio of Interest Earning Assets to
Interest Bearing Liabilities 128.02% 134.05%


For the year ended
12/31/2016 12/31/2015
Average Balance Sheet
(In Thousands)
Average
Balance
Interest
Income/
Expense
YieldAverage
Balance
Interest
Income/
Expense
Yield
Interest-earning assets:
Loans Receivable $301,764 $12,745 4.22%$247,997 $10,376 4.18%
Securities held to maturity 57,743 1,293 2.24 79,868 1,726 2.16
Other interest-earning assets 22,334 172 0.77 12,880 104 0.81
Total interest-earning assets 381,841 14,210 3.72 340,745 12,206 3.58
Allowance for Loan Loss (3,861) (3,593)
Non-interest-earning assets 24,421 25,066
Total non-interest-earning assets 20,560 21,473
Total Assets $402,401 $362,218
Interest-bearing liabilities:
NOW & Money Market $71,843 $200 0.28%$46,493 $75 0.16%
Savings and club deposits 103,570 230 0.22 101,106 223 0.22
Certificates of deposit 89,609 1,071 1.20 86,948 1,064 1.22
Total interest-bearing deposits 265,022 1,501 0.57 234,547 1,362 0.58
Federal Home Loan Bank advances 24,435 746 3.05 34,087 794 2.33
Total interest-bearing liabilities 289,457 2,247 0.78 268,634 2,156 0.80
Non-interest-bearing deposit 34,026 34,248
Other non-interest-bearing liabilities 3,591 3,135
Total Liabilities 327,074 306,017
Equity 75,327 56,201
Total Liabilities and Equity $402,401 $362,218
Net Interest Spread 11,963 2.94% 10,050 2.78%
Net Interest Margin 3.13% 2.95%
Ratio of Interest Earning Assets to
Interest Bearing Liabilities 131.92% 126.84%

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

Source:MSB Financial Corp.