Stewardship Financial Corporation Announces Earnings For The First Quarter of 2017

MIDLAND PARK, N.J., May 10, 2017 (GLOBE NEWSWIRE) -- Stewardship Financial Corporation (NASDAQ:SSFN), parent company of Atlantic Stewardship Bank, announced net income for the three months ended March 31, 2017 of $991,000, or $0.16 per common share. While the current year period net results were comparable to the three months ended March 31, 2016, the first quarter of 2017 reflected a provision for loan losses of $300,000 as a result of substantial loan growth compared to a recovery of $350,000 of the allowance for loan losses for the three months ended March 31, 2016.

“The current period results demonstrate the Corporation’s ability to report core earnings achieved through growing our loan portfolio, even with a related need to provide for a loan loss reserve,” stated Paul Van Ostenbridge, Stewardship Financial Corporation’s President and Chief Executive Officer.

Operating Results
Net interest income and net interest margin was $6.2 million and 3.23% for the first quarter of 2017 compared to $5.3 million and 3.11% for the comparable period a year earlier. Net interest income benefited from the recent loan growth. The three months ended March 31, 2017 included approximately $105,000 of prepayment premiums on loan payoffs compared to $27,000 for the same prior year period.

The Corporation reported noninterest income of $799,000 for the three months ended March 31, 2017 compared to $819,000 for the equivalent prior year period. Excluding $24,000 of nonrecurring gains from securities transactions, noninterest income would have been $795,000 for the three months ended March 31, 2016, relatively comparable to the current year period.

Total noninterest expenses were $5.1 million for the three months ended March 31, 2017 compared to the $4.9 million incurred in the prior year period. “We remain committed to controlling expenses as we grow our balance sheet,” stated Van Ostenbridge.

Asset Quality
Results for the three months ended March 31, 2017 were affected by the Corporation recording a provision for loan losses of $300,000 as compared to the positive impact of a $350,000 negative provision for loan losses for the three months ended March 31, 2016. With the significant improvement in credit quality the recording of a provision for loan losses is directly linked to the robust growth in the loan portfolio.

Balance Sheet / Financial Condition
Total assets at March 31, 2017 were $844.4 million, reflecting an increase from the $795.5 million of assets at December 31, 2016. The growth in the balance sheet was the result of strong origination levels. New loan originations, partially offset by normal principal amortization and payoffs, resulted in net growth in the loan portfolio of $50.7 million. According to Van Ostenbridge, “The new loans originated represent a record level for the Corporation.”

Total deposits were $700.7 million at March 31, 2017, reflecting net growth of $41.8 million since December 31, 2016. The Corporation continues to experience growth in both noninterest-bearing and interest-bearing deposits.

At March 31, 2017, the Corporation’s Tier 1 leverage ratio and total risk based capital ratio were 7.38% and 12.38%, respectively. These ratios are both significantly above the respective 4.0% and 8% minimum levels required and result in categorizing the Corporation as a “well capitalized” institution under regulatory guidelines.

The Corporation previously announced on April 17, 2017 the closing of its underwritten public offering of 2,509,090 shares of the Corporation’s common stock, which included 327,272 shares issued pursuant to the full exercise of the underwriter’s over-allotment option, at a price to the public of $8.25 per share, for aggregate gross proceeds of approximately $20.7 million. The net proceeds to the Corporation, after deducting the underwriting discount and estimated offering expenses, were approximately $18.8 million. The Corporation expects to use the net proceeds of this offering to support organic growth and other general corporate purposes.

About Stewardship Financial Corporation
Stewardship Financial Corporation’s subsidiary, the Atlantic Stewardship Bank, has 11 banking offices in Midland Park, Hawthorne, Montville, North Haledon, Pequannock, Ridgewood, Waldwick, Wayne (2), Westwood and Wyckoff, New Jersey. Additionally, the Bank is scheduled to open its 12th branch location in Morristown, New Jersey in late spring. The Bank is known for tithing 10% of its pre-tax profits to Christian and local charities. To date, the Bank’s tithe donations total over $9.3 million.

We invite you to visit our website at www.asbnow.com for additional information.

The information disclosed in this document contains certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, and may be identified by the use of such words as “believe,” “expect,” “anticipate,” “should,” “plan,” “estimate,” and “potential.” Examples of forward-looking statements include, but are not limited to, estimates with respect to the financial condition, results of operations and business of the Corporation that are subject to various factors which could cause actual results to differ materially from these estimates. These factors include changes in general, economic and market conditions, legislative and regulatory conditions, or the development of an interest rate environment that adversely affects the Corporation’s interest rate spread or other income anticipated from operations and investments.


Stewardship Financial Corporation
Selected Consolidated Financial Information
(dollars in thousands, except per share amounts)
(unaudited)
March 31, December 31, September 30, June 30, March 31,
2017 2016 2016 2016 2016
Selected Financial Condition Data:
Cash and cash equivalents$12,793 $11,680 $21,025 $13,901 $13,319
Securities available for sale 95,632 98,583 103,546 98,533 97,637
Securities held to maturity 52,805 52,330 54,179 65,666 62,427
FHLB Stock 3,784 3,515 2,425 2,650 2,608
Loans held for sale 188 773 300 581 783
Loans receivable:
Loans receivable, gross 654,769 604,083 552,106 537,638 528,011
Allowance for loan losses (8,246) (7,905) (8,150) (8,388) (8,540)
Other, net (327) (226) (110) (25) (64)
Loans receivable, net 646,196 595,952 543,846 529,225 519,407
Other real estate owned, net 401 401 834 834 1,013
Bank owned life insurance 16,673 16,558 16,439 16,320 14,212
Other assets 15,927 15,743 15,333 14,877 15,251
Total assets$844,399 $795,535 $757,927 $742,587 $726,657
Noninterest-bearing deposits$170,566 $169,306 $172,072 $160,461 $154,201
Interest-bearing deposits 530,138 489,624 474,012 466,008 458,225
Total deposits 700,704 658,930 646,084 626,469 612,426
Other borrowings 65,200 59,200 35,000 40,000 40,000
Subordinated debentures and subordinated notes 23,268 23,252 23,235 23,219 23,203
Other liabilities 2,810 2,766 2,040 2,213 1,836
Total liabilities 791,982 744,148 706,359 691,901 677,465
Shareholders' equity 52,417 51,387 51,568 50,686 49,192
Total liabilities and shareholders' equity$844,399 $795,535 $757,927 $742,587 $726,657
Gross loans to deposits 93.44% 91.68% 85.45% 85.82% 86.22%
Equity to assets 6.21% 6.46% 6.80% 6.83% 6.77%
Book value per share$8.55 $8.39 $8.43 $8.29 $8.05
Asset Quality Data:
Nonaccrual loans$592 $606 $929 $949 $2,304
Loans past due 90 days or more and accruing - - - - -
Total nonperforming loans 592 606 929 949 2,304
Other real estate owned 401 401 834 834 1,013
Total nonperforming assets$993 $1,007 $1,763 $1,783 $3,317
Nonperforming loans to total loans 0.09% 0.10% 0.17% 0.18% 0.44%
Nonperforming assets to total assets 0.12% 0.13% 0.23% 0.24% 0.46%
Allowance for loan losses to total gross loans 1.26% 1.31% 1.48% 1.56% 1.62%



Stewardship Financial Corporation
Selected Consolidated Financial Information
(dollars in thousands, except per share amounts)
(unaudited)
For the three months ended
March 31,
2017
2016
Selected Operating Data:
Interest income $7,424 $6,449
Interest expense 1,244 1,173
Net interest and dividend income 6,180 5,276
Provision for loan losses 300 (350)
Net interest income
after provision for loan losses 5,880 5,626
Noninterest income:
Fees and service charges 535 529
Bank owned life insurance 115 101
Gain on calls and sales of securities - 24
Gain on sales of mortgage loans 17 18
Other 132 147
Total noninterest income 799 819
Noninterest expenses:
Salaries and employee benefits 2,844 2,715
Occupancy, net 409 398
Equipment 162 150
Data processing 469 472
Advertising 136 151
FDIC insurance premium 77 106
Charitable contributions 125 70
Bank-card related services 142 131
Other real estate owned, net 15 74
Miscellaneous 735 635
Total noninterest expenses 5,114 4,902
Income before income tax expense 1,565 1,543
Income tax expense 574 552
Net income $991 $991
Weighted avg. no. of diluted common shares 6,124,926 6,092,351
Diluted earnings per common share $0.16 $0.16
Return on average common equity 7.71% 8.21%
Return on average assets 0.49% 0.55%
Yield on average interest-earning assets 3.88% 3.79%
Cost of average interest-bearing liabilities 0.84% 0.90%
Net interest rate spread 3.04% 2.89%
Net interest margin 3.23% 3.11%



Stewardship Financial Corporation
Selected Consolidated Financial Information
(dollars in thousands, except per share amounts)
(unaudited)
For the three months ended
March 31, December 31, September 30, June 30, March 31,
2017 2016 2016 2016 2016
Selected Operating Data:
Interest income $7,424 $7,000 $6,657 $6,979 $6,449
Interest expense 1,244 1,103 1,113 1,124 1,173
Net interest and dividend income 6,180 5,897 5,544 5,855 5,276
Provision for loan losses 300 (300) (250) (450) (350)
Net interest and dividend income
after provision for loan losses 5,880 6,197 5,794 6,305 5,626
Noninterest income:
Fees and service charges 535 564 536 530 529
Bank owned life insurance 115 119 120 107 101
Gain on calls and sales of securities - 1 6 32 24
Gain on sales of mortgage loans 17 94 33 19 18
Gain on sales of other real estate owned - 30 - 6 -
Other 132 129 128 138 147
Total noninterest income 799 937 823 832 819
Noninterest expenses:
Salaries and employee benefits 2,844 2,735 2,788 2,742 2,715
Occupancy, net 409 396 400 404 398
Equipment 162 156 155 148 150
Data processing 469 481 485 477 472
Advertising 136 196 165 157 151
FDIC insurance premium 77 21 100 90 106
Charitable contributions 125 135 80 90 70
Bank-card related services 142 148 150 150 131
Other real estate owned, net 15 14 27 28 74
Other 735 720 649 713 635
Total noninterest expenses 5,114 5,002 4,999 4,999 4,902
Income before income tax expense 1,565 2,132 1,618 2,138 1,543
Income tax expense 574 784 583 776 552
Net income $991 $1,348 $1,035 $1,362 $991
Weighted avg. no. of diluted common shares 6,124,926 6,119,693 6,115,987 6,111,729 6,092,351
Diluted earnings per common share $0.16 $0.22 $0.17 $0.22 $0.16
Return on average common equity 7.71% 10.40% 8.06% 11.05% 8.21%
Return on average assets 0.49% 0.69% 0.54% 0.74% 0.55%
Yield on average interest-earning assets 3.88% 3.77% 3.68% 4.02% 3.79%
Cost of average interest-bearing liabilities 0.84% 0.80% 0.83% 0.86% 0.90%
Net interest rate spread 3.04% 2.97% 2.85% 3.16% 2.89%
Net interest margin 3.23% 3.18% 3.07% 3.38% 3.11%


Contact: Claire M. Chadwick EVP and Chief Financial Officer 630 Godwin Avenue Midland Park, NJ 07432 P: (201) 444-7100

Source:Stewardship Financial Corporation