EXHIBIT 99.1
| | Contact: | | Claire M. Chadwick |
| | | | SVP and Chief Financial Officer |
| | | | 630 Godwin Avenue |
| | | | Midland Park, NJ 07432 |
| | | | 201- 444-7100 |
PRESS RELEASE
Stewardship Financial Corporation Reports
Earnings for the Third Quarter 2009
Midland Park, NJ – November 3, 2009 – Stewardship Financial Corporation (NASDAQ:SSFN), the holding company for Atlantic Stewardship Bank, reported net income for the three months ended September 30, 2009 of $893,000, or $0.13 per diluted common share, as compared to net income of $838,000, or $0.14 per diluted common share, for the three months ended September 30, 2008.
For the nine months ended September 30, 2009, Stewardship Financial Corporation reported net income of $2.9 million, or $0.43 per diluted common share, compared to net income of $3.1 million, or $0.52 per diluted common share for the corresponding nine month period in 2008. Per share calculations have been adjusted for a 5% stock dividend paid in November 2008 and a 5% stock dividend payable in November 2009.
In light of the difficulties faced by the banking industry, the operating results of the Corporation have been adversely affected by increases in the loan loss provision. For the nine months ended September 30, 2009, results were also impacted by the FDIC’s industry-wide special assessment.
The Corporation reported net interest income for the three and nine months ended September 30, 2009 of $6.0 million and $17.4 million, respectively, representing increases of 2.9%
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Press Release - Midland Park NJ
Stewardship Financial Corporation continued November 3, 2009
and 5.2%, respectively, over the comparable prior year period amounts. The reported net interest spread and margin for the three months ended September 30, 2009 of 3.47% and 3.92%, respectively, compare to the net interest spread and margin of 3.53% and 4.04%, respectively, for the three months ended September 30, 2008. For the nine months ended September 30, 2009, net interest rate spread and margin were 3.44% and 3.89% compared to 3.40% and 3.98%, respectively, for the same 2008 period.
The provision for loan losses was $1.2 million and $2.4 million for the three and nine months ended September 30, 2009, respectively, compared to $1.2 million and $1.5 million, respectively, for the same prior year periods. The provision is reflective of the unsettled economic environment resulting in deterioration in certain borrowers’ performance as well as declining real estate collateral values. Non-performing loans amounted to 3.92% of total assets at September 30, 2009 compared to 1.46% at December 31, 2008. At September 30, 2009, the total allowance for loan losses amounted to approximately $7.2 million, or an increase to 1.61% of total loans as compared to 1.18% at December 31, 2008.
“Asset quality continues to be a top priority for Stewardship Financial Corporation and we continue to evaluate our allowance for loan losses and increase our reserves as appropriate,” stated Paul Van Ostenbridge, Stewardship Financial Corporation’s President and Chief Executive Officer. “The current troubled economic climate impacts all banks and borrowers. Accordingly, we are closely monitoring and aggressively managing our entire loan portfolio.” Van Ostenbridge continued saying, “As the increase in nonperforming assets indicates, real challenges remain. We continue to work closely with our borrowers, recognizing that each situation is different, requiring approaches appropriate for each borrower and each individual situation.”
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Press Release - Midland Park NJ
Stewardship Financial Corporation continued November 3, 2009
At the end of 2008, the Corporation sold its merchant servicing portfolio and, as a result, a decline in both the related noninterest income line and the related noninterest expense line is reflected for the three and nine months ended September 30, 2009.
As previously reported, FDIC insurance premiums increased due, in part, to the $300,000 special assessment imposed by the FDIC for the nine months ended September 30, 2009.
At September 30, 2009 assets totaled $649.6 million, reflecting growth of $37.8 million, or 6.2%, when compared to December 31, 2008. The securities available for sale and held to maturity portfolios together increased $26.8 million, primarily reflecting the investment and leveraging of the $10 million of preferred stock issued under the Capital Purchase Program. Gross loans receivable grew $11.6 million to $451.2 million at September 30, 2009 compared to $439.7 million at December 31, 2008. The increase reflects the Bank’s origination levels after adjusting for the sale of approximately $5.9 million of participations in certain loans to other financial institutions.
Deposits totaled $514.6 million at September 30, 2009, compared to $506.5 million at December 31, 2008. After the payoff of the $30.7 million of brokered CDs that existed at December 31, 2008, growth in core customer deposits totaled $38.8 million. The mid-February introduction of our new Power Rate checking product was a primary driving force in the growth in deposits. This new account pays a premium rate of interest and refunds ATM fees charged by other financial institutions. In return, the customer has simple monthly qualification factors such as enrolling in online banking with electronic statements and minimum levels of debit card usage.
Total stockholders’ equity at September 30, 2009 of $54.1 million includes the increase from the $10 million received on January 30, 2009 under the Capital Purchase Program (CPP). As a result of the increase in capital, the Corporation remains committed to the core banking
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Press Release - Midland Park NJ
Stewardship Financial Corporation continued November 3, 2009
activities of generating deposits and granting credit-worthy loans to consumers and businesses in our communities.
Stewardship Financial Corporation’s subsidiary, the Atlantic Stewardship Bank, has 13 banking offices in Midland Park, Hawthorne (2), Montville, North Haledon, Pequannock, Ridgewood, Waldwick, Wayne (3), Westwood and Wyckoff, New Jersey. The bank is known for tithing 10% of its pre-tax profits to Christian and local charities. The Bank’s Tithe amounts to $6.3 million in total donations since the program began.
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.
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| Stewardship Financial Corporation |
| Selected Consolidated Financial Information |
| (dollars in thousands, except per share amounts) |
| (unaudited) |
| | | | | | | | |
| | September 30, | | June 30, | | December 31, | | September 30, |
| | 2009 | | 2009 | | 2008 | | 2008 |
| | | | | | | | |
| Selected Financial Condition Data: | | | | | | | |
| Cash and cash equivalents | $ 13,646 | | $ 11,401 | | $ 12,814 | | $ 13,489 |
| Securities available for sale | 90,460 | | 87,728 | | 90,023 | | 96,547 |
| Securities held to maturity | 75,232 | | 74,756 | | 48,856 | | 35,646 |
| FHLB Stock | 3,195 | | 2,538 | | 2,420 | | 2,856 |
| Loans receivable: | | | | | | | |
| Loans receivable, gross | 451,229 | | 440,434 | | 439,656 | | 443,311 |
| Allowance for loan losses | (7,249) | | (6,342) | | (5,166) | | (5,930) |
| Other, net | (428) | | (425) | | (387) | | (418) |
| Loans receivable, net | 443,552 | | 433,667 | | 434,103 | | 436,963 |
| | | | | | | | |
| Loans held for sale | 1,018 | | 6,379 | | 394 | | 895 |
| Other assets | 22,518 | | 22,858 | | 23,206 | | 23,741 |
| Total assets | $ 649,621 | | $ 639,327 | | $ 611,816 | | $ 610,137 |
| | | | | | | | |
| | | | | | | | |
| Total deposits | $ 514,612 | | $ 518,500 | | $ 506,531 | | $ 492,110 |
| Other borrowings | 53,900 | | 39,300 | | 36,900 | | 46,575 |
| Subordinated debentures | 7,217 | | 7,217 | | 7,217 | | 7,217 |
| Securities sold under agreements to repurchase | 16,019 | | 15,163 | | 15,160 | | 16,297 |
| Other liabilities | 3,801 | | 5,943 | | 3,212 | | 6,179 |
| Stockholders' equity | 54,072 | | 53,204 | | 42,796 | | 41,759 |
| Total liabilities and stockholders' equity | $ 649,621 | | $ 639,327 | | $ 611,816 | | $ 610,137 |
| | | | | | | | |
| Book value per common share | $ 7.60 | | $ 7.46 | | $ 7.31 | | $ 7.13 |
| | | | | | | | |
| Equity to assets | 8.32% | | 8.32% | | 6.99% | | 6.84% |
| | | | | | | | |
| Asset Quality Data: | | | | | | | |
| Nonaccrual loans | $ 14,536 | | $ 11,533 | | $ 4,230 | | $ 6,884 |
| Loans past due 90 days or more and accruing | 728 | | - | | 353 | | 268 |
| Restructured loans | 2,417 | | 2,460 | | 1,855 | | - |
| Total nonperforming loans | $ 17,681 | | $ 13,993 | | $ 6,438 | | $ 7,152 |
| | | | | | | | |
| Non-performing loans to total loans | 3.92% | | 3.18% | | 1.46% | | 1.61% |
| Non-performing loans to total assets | 2.72% | | 2.19% | | 1.05% | | 1.17% |
| Allowance for loan losses to nonperforming loans | 41.00% | | 45.32% | | 80.24% | | 82.91% |
| Allowance for loan losses to total gross loans | 1.61% | | 1.44% | | 1.18% | | 1.34% |
| | | | | | | | |
| All share data has been restated to include the effects of a 5% stock dividend paid in November 2008 and a stock dividend |
| payable in November 2009. | | | | | | | |
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| Stewardship Financial Corporation |
| Selected Consolidated Financial Information |
| (dollars in thousands, except per share amounts) |
| (unaudited) |
| | | | | | | | | | | | | | | |
| | | | | For the three months ended | | For the nine months ended |
| | | | | September 30, | | September 30, |
| | | | | 2009 | | 2008 | | 2009 | | 2008 |
| Selected Operating Data: | | | | | | | | | | | | |
| | Interest income | | $ | 8,610 | | $ | 8,910 | | $ | 25,625 | | $ | 26,277 |
| | Interest expense | | | 2,634 | | | 3,100 | | | 8,231 | | | 9,749 |
| | | Net interest and dividend income | | | 5,976 | | | 5,810 | | | 17,394 | | | 16,528 |
| | Provision for loan losses | | | 1,200 | | | 1,175 | | | 2,375 | | | 1,535 |
| | Net interest and dividend income | | | | | | | | | | | | |
| | | after provision for loan losses | | | 4,776 | | | 4,635 | | | 15,019 | | | 14,993 |
| | Non-interest income: | | | | | | | | | | | | |
| | | Fees and service charges | | | 492 | | | 370 | | | 1,362 | | | 1,067 |
| | | Bank owned life insurance | | | 79 | | | 85 | | | 238 | | | 244 |
| | | Gain on sales of mortgage loans | | | 188 | | | 47 | | | 272 | | | 156 |
| | | Gain on calls and sales of securities | | | 2 | | | 4 | | | 255 | | | 61 |
| | | Merchant processing | | | - | | | 340 | | | 118 | | | 1,070 |
| | | Other | | | 60 | | | 48 | | | 232 | | | 289 |
| | | Total non-interest income | | | 821 | | | 894 | | | 2,477 | | | 2,887 |
| | Non-interest expenses: | | | | | | | | | | | | |
| | | Salaries and employee benefits | | | 2,128 | | | 1,968 | | | 6,264 | | | 6,078 |
| | | Occupancy, net | | | 453 | | | 477 | | | 1,398 | | | 1,354 |
| | | Equipment | | | 277 | | | 276 | | | 795 | | | 842 |
| | | Data processing | | | 300 | | | 300 | | | 882 | | | 897 |
| | | FDIC insurance premium | | | 197 | | | 77 | | | 886 | | | 223 |
| | | Charitable contributions | | | 120 | | | 126 | | | 411 | | | 474 |
| | | Merchant processing | | | - | | | 299 | | | 108 | | | 944 |
| | | Other | | | 871 | | | 839 | | | 2,694 | | | 2,591 |
| | | Total non-interest expenses | | | 4,346 | | | 4,362 | | | 13,438 | | | 13,403 |
| Income before income tax expense | | | 1,251 | | | 1,167 | | | 4,058 | | | 4,477 |
| Income tax expense | | | 358 | | | 329 | | | 1,198 | | | 1,399 |
| Net income | | | 893 | | | 838 | | | 2,860 | | | 3,078 |
| Dividends on preferred stock and accretion | | | 138 | | | - | | | 367 | | | - |
| Net income available to common stockholders | $ | 755 | | $ | 838 | | $ | 2,493 | | $ | 3,078 |
| | | | | | | | | | | | | | | |
| Weighted avg. no. of diluted common shares | | | 5,837,797 | | | 5,863,105 | | | 5,836,225 | | | 5,869,088 |
| Diluted earnings per common share | | $ | 0.13 | | $ | 0.14 | | $ | 0.43 | | $ | 0.52 |
| | | | | | | | | | | | | | | |
| Return on average common equity | | | 5.65% | | | 7.92% | | | 6.37% | | | 9.82% |
| | | | | | | | | | | | | | | |
| Return on average assets | | | 0.56% | | | 0.54% | | | 0.60% | | | 0.69% |
| | | | | | | | | | | | | | | |
| Yield on average interest-earning assets | | | 5.61% | | | 6.15% | | | 5.69% | | | 6.27% |
| Cost of average interest-bearing liabilities | | | 2.14% | | | 2.62% | | | 2.25% | | | 2.87% |
| Net interest rate spread | | | 3.47% | | | 3.53% | | | 3.44% | | | 3.40% |
| | | | | | | | | | | | | | | |
| Net interest margin | | | 3.92% | | | 4.04% | | | 3.89% | | | 3.98% |
| | | | | | | | | | | | | | | |
| All share data has been restated to include the effects of a 5% stock dividend paid in November 2008 and a stock |
| dividend payable in November 2009. | | | | | | | | | | | | |
