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MSB Financial Corp. Releases First Quarter Earnings

MILLINGTON, N.J., May 01, 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 months ended March 31, 2017.

The Company reported net income of $549,000, or $0.10 per diluted common share for the three months ended March 31, 2017, compared to $159,000, or $0.03 per diluted common share for the three months ended March 31, 2016.

Growth in net interest income and margin reflect growth in commercial loans
Net interest income grew $807,000 or 29.0% to $3.6 million for the quarter ended March 31, 2017 compared to $2.8 million for the quarter ended March 31, 2016. Net interest margin for the quarter ended March 31, 2017 was 3.29%, an improvement of 17 basis points, compared to 3.12% for the quarter ended March 31, 2016. Net interest income and net interest margin continue to increase due primarily to the growth in the Company’s commercial real estate and commercial loan portfolios.

Commercial loan growth quarter over quarter
At March 31, 2017, the Company’s net loan portfolio totaled $398.4 million, an increase of $30.4 million or 8.3%, compared to $368.0 million at December 31, 2016. Commercial real estate loans increased $16.5 million or 13.3% while commercial and industrial loans increased $9.6 million from December 31, 2016 as the Company continues to focus on the origination of commercial relationships.

The following table summarizes loan balances and composition at March 31, 2017 and December 31, 2016:

At At
March 31, December 31,
(In thousands)2017 2016
Residential mortgage:
One-to-four family$160,153 38.2% $160,534 42.3%
Home equity 30,493 7.3 32,262 8.5
Total residential mortgage 190,646 45.5 192,796 50.8
Commercial and multi-family real estate 141,193 33.7 124,656 32.8
Construction 31,978 7.6 16,554 4.4
Commercial and industrial 54,887 13.1 45,246 11.9
Total commercial loans 228,058 51.4 186,456 49.1
.
Consumer loans 394 0.1 446 0.1
Total loans receivable 419,098 100.0% 379,698 100.0%
Less:
Loans in process 15,394 6,557
Deferred loan fees 631 658
Allowance 4,626 4,476
Total loans receivable, net$398,447 $368,007

Credit quality
Overall credit quality remained stable during the quarter. Total delinquent loans (including nonperforming delinquent loans) were $10.1 million at March 31, 2017, a reduction of $1.8 million from December 31, 2016. Total nonperforming loans were $7.4 million at March 31, 2017 compared to $7.0 million at December 31, 2016. Included in total delinquency and nonperforming loans is one large residential mortgage of $1.9 million which is being actively managed and expected to be resolved by the third quarter. The allowance for loan losses as a percentage of total loans was 1.15% and 1.18% at March 31, 2017 and December 31, 2016, respectively, while the allowance for loan losses as a percentage of non-performing loans decreased slightly to 62.47% at March 31, 2017 from 64.13% at December 31, 2016. Non-performing loans to total loans were 1.84% at March 31, 2017 and December 31, 2016.

Consumer deposit growth during first quarter
Total deposits at March 31, 2017 were $354.9 million compared with $362.3 million at December 31, 2016. Overall, deposits decreased by $7.4 million, or 2.0% with growth occurring in consumer deposits offset by a few large business relationships utilizing cash for their business needs. The Company experienced growth in the non-transactional categories with an increase of $4.3 million in certificates of deposit, $2.7 million in money market accounts, and $1.8 million in savings accounts while transactional accounts decreased $16.1 million.

The following table summarizes deposit balances and composition at March 31, 2017 and December 31, 2016:

At At
(Dollars in thousands)March 31, 2017 December 31, 2016
Noninterest demand$ 38,970 10.98% $ 44,365 12.25%
Interest demand 89,159 25.12 99,879 27.57
Savings 104,956 29.57 103,163 28.47
Money Market 13,950 3.93 11,265 3.11
Total demand deposits 247,035 69.60 258,672 71.40
Certificates of Deposit 107,896 30.40 103,627 28.60
Total Deposits$ 354,931 100.00% $ 362,299 100.00%

CEO outlook:

“I’m very pleased with the Company’s first quarter results. Our entire staff continues to focus on the execution of our long term strategic plan,” stated Michael A. Shriner, President and Chief Executive Officer.

Mr. Shriner added, “As our Company continues to evolve, the strength of our staff is essential to our success. During the last quarter, we were fortunate to add several key, strategic hires that we believe will facilitate our future growth objectives.”

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)(Unaudited)
Statement of Financial Condition Data:03/31/201703/31/2016
Total assets$481,908$380,134
Cash and cash equivalents 11,249 14,515
Loans receivable, net 398,447 270,713
Securities held to maturity 42,716 73,603
Deposits 354,931 276,841
Federal Home Loan Bank advances 49,175 22,675
Total stockholders' equity 74,067 76,560
Stock Information:
Number of shares of common stock outstanding 5,729 5,953
Book value per share of common stock$12.93$12.86
Closing market price$16.50$12.85


Summary of Operations:
(In Thousands, except for per share amounts)
(Unaudited)
For the three months ended March 31,
2017 2016
Total interest income$4,293 $3,298
Total interest expense 698 510
Net interest income 3,595 2,788
Provision for loan losses 195 130
Net interest income after provision for loan losses 3,400 2,658
Non-interest income 187 141
Non-interest expense 2,717 2,564
Income before taxes 870 235
Income tax expense 321 76
Net income$549 $159
Net income per common share - basic $0.10 $0.03
Net income per common share - diluted$0.10 $0.03
Weighted average number of shares - basic 5,520 5,743
Weighted average number of shares - diluted 5,614 5,812
Performance Ratios:
Return on average assets annualized 0.48% 0.17%
Return on average common equity annualized 2.97% 0.83%
Net interest margin 3.29% 3.12%
Efficiency ratio 71.83% 87.54%
Operating expenses / average assets annualized 2.36% 2.73%


For the three months ended
03/31/201703/31/2016
Average Balance Sheet
(In Thousands)
Average BalanceInterest Income/ExpenseYieldAverage BalanceInterest Income/ExpenseYield
Interest-earning assets:
Loans receivable$382,386 $4,0004.18%$271,815 $2,8384.18%
Securities held to maturity 43,285 251 2.32 76,932 431 2.24
Other interest-earning assets 11,335 42 1.48 8,430 29 1.38
Total interest-earning assets 437,006 4,293 3.93 357,177 3,298 3.69
Allowance for loan loss (4,524) (3,622)
Non-interest-earning assets 28,367 21,646
Total non-interest-earning assets 23,843 18,024
Total Assets$460,849 $ 375,201
Interest-bearing liabilities:
Demand & money market$ 106,037 $950.36%$ 48,453 $210.17%
Savings and club deposits 103,774 58 0.22 102,445 56 0.22
Certificates of deposit 106,513 349 1.31 84,437 237 1.12
Total interest-bearing deposits 316,324 502 0.63 235,335 314 0.53
Federal Home Loan Bank advances 29,992 196 2.61 29,754 196 2.63
Total interest-bearing liabilities 346,316 698 0.81 265,089 510 0.77
Non-interest-bearing deposit 37,821 29,621
Other non-interest-bearing liabilities 2,789 3,820
Total Liabilities 386,926 298,530
Equity 73,923 76,671
Total Liabilities and Equity$460,849 $375,201
Net Interest Spread 3,595 3.12% 2,788 2.92%
Net Interest Margin 3.29% 3.12%
Ratio of Interest Earning Assets to Interest Bearing Liabilities 126.19% 134.74%



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

Source:MSB Financial Corp.