EXHIBIT 99.1
| For Immediate Release | Contact: | |
| Claire M. Chadwick | ||
| EVP and Chief Financial Officer | ||
| 630 Godwin Avenue | ||
| Midland Park, NJ 07432 | ||
| P: (201) 444-7100 |
PRESS RELEASE
Stewardship Financial Corporation Reports
Earnings for Third Quarter of 2016
Midland Park, NJ – November 9, 2016 – Stewardship Financial Corporation (NASDAQ:SSFN), parent company of Atlantic Stewardship Bank, reported net income available to common shareholders for the three and nine months ended September 30, 2016 of $1.0 million and $3.4 million, respectively, as compared to net income available to common shareholders of $886,000 and $2.7 million for the three and nine months ended September 30, 2015, respectively.
“Solid loan growth funded by a steady increase in deposits continues to contribute to our strong earnings,” stated Paul Van Ostenbridge, Stewardship Financial Corporation’s President and Chief Executive Officer.
Balance Sheet / Financial Condition
Total assets reached $757.9 million as of September 30, 2016, reflecting a growing balance sheet when compared to assets of $717.9 million at December 31, 2015. New loan originations, partially offset by normal principal amortization and payoffs, resulted in net growth in the loan portfolio of $26.3 million. Van Ostenbridge commented, “We recognize the importance of constant and stable growth in our loan portfolio.”
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The strong loan growth continues to be supported by appropriate deposit growth. Total deposits grew to $646.1 million at September 30, 2016, an increase of $41.3 million when compared to deposits of $604.8 million at December 31, 2015.
Regulatory capital levels, at September 30, 2016, continue to significantly exceed the requirements for a “well capitalized” institution with a tier 1 leverage ratio of 7.69% (4% requirement) and total risk based capital ratio of 13.98% (8% requirement).
Operating Results
The Corporation reported net interest income of $5.5 million and $16.7 million for the three and nine months ended September 30, 2016, respectively, compared to $5.4 million and $16.3 million for the comparable prior year periods. Overall, the net interest rate spread and net interest margin for the current year periods reflects an overall decline in loan interest rates – a result of the historically low market rates in the current environment. The net interest margin for the current three and nine month periods was 3.07% and 3.18%, respectively, compared to 3.21% and 3.34% for the three and nine months ended September 30, 2015. The current year net interest income and margin includes the impact of the $16.6 million of Subordinated Notes issued in August 2015 and the subsequent redemption of preferred stock. When compared to the prior year periods, the cost of the Subordinated Notes added a total of $188,000 and $781,000 of interest expense to the current three and nine month periods, respectively. However, such increases, on an after tax basis, are less than the dividends that would have accrued on the preferred stock. The rate on the preferred stock would have been 4.56% until March 1, 2016, when the dividend rate on the preferred stock would have increased and become fixed at 9%.
Noninterest income for the three and nine months ended September 30, 2016 was $823,000 and $2.5 million, respectively, compared to $838,000 and $2.6 million for the equivalent prior year periods. The
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$164,000 decrease for the nine months ended September 30, 2016 reflects the fact that noninterest income included only $62,000 of gains on calls and sales of securities compared to $152,000 in the comparable prior year period. In addition, the nine months ended September 30, 2016 included only $6,000 of gains on sales of other real estate owned compared to $53,000 of gains during the nine months ended September 30, 2015.
For the three and nine months ended September 30, 2016, noninterest expenses were $5.0 million and $14.9 million, respectively, compared to $5.1 million and $15.3 million in the comparable prior year periods. “We continue to grow the balance sheet without adding to overhead – reflective of our diligent expense control,” Van Ostenbridge noted.
Asset Quality
Both the current year and the prior year periods results were positively impacted by the Corporation recording negative provisions for loan losses, reflective of the ongoing analysis that demonstrates constant improvement of credit quality. Results for the three and nine months ended September 30, 2016 included negative provisions of $250,000 and $1.1 million, respectively, compared to negative provisions for loan losses of $400,000 and $1.1 million for the comparable prior year periods. Nonperforming loans continue to decline and were just $929,000, or 0.17% of total loans at September 30, 2016 compared to $1.9 million, or 0.36%, at December 31, 2015. Total nonperforming assets of $1.8 million, which includes other real estate owned, also showed continued improvement and represented just 0.23% of total assets at September 30, 2016 compared to 0.38% at December 31, 2015.
About Stewardship Financial Corporation
Stewardship Financial Corporation’s subsidiary, the Atlantic Stewardship Bank, has 11 banking offices in
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Midland Park, Hawthorne, Montville, North Haledon, Pequannock, Ridgewood, Waldwick, Wayne (2), Westwood and Wyckoff, New Jersey. 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 $8.8 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.
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Stewardship Financial Corporation
Selected Consolidated Financial Information
(dollars in thousands, except per share amounts)
(unaudited)
| September 30, | June 30, | March 31, | December 31, | September 30, | ||||||||||||||||
| 2016 | 2016 | 2016 | 2015 | 2015 | ||||||||||||||||
| Selected Financial Condition Data: | ||||||||||||||||||||
| Cash and cash equivalents | $ | 21,025 | $ | 13,901 | $ | 13,319 | $ | 10,910 | $ | 16,025 | ||||||||||
| Securities available for sale | 103,546 | 98,533 | 97,637 | 93,354 | 86,994 | |||||||||||||||
| Securities held to maturity | 54,179 | 65,666 | 62,427 | 60,738 | 60,252 | |||||||||||||||
| FHLB Stock | 2,425 | 2,650 | 2,608 | 2,608 | 3,035 | |||||||||||||||
| Loans held for sale | 300 | 581 | 783 | 1,522 | 1,570 | |||||||||||||||
| Loans receivable: | ||||||||||||||||||||
| Loans receivable, gross | 552,106 | 537,638 | 528,011 | 526,477 | 518,168 | |||||||||||||||
| Allowance for loan losses | (8,150 | ) | (8,388 | ) | (8,540 | ) | (8,823 | ) | (8,805 | ) | ||||||||||
| Other, net | (110 | ) | (25 | ) | (64 | ) | (98 | ) | (93 | ) | ||||||||||
| Loans receivable, net | 543,846 | 529,225 | 519,407 | 517,556 | 509,270 | |||||||||||||||
| Other real estate owned, net | 834 | 834 | 1,013 | 880 | 587 | |||||||||||||||
| Bank owned life insurance | 16,439 | 16,320 | 14,212 | 14,111 | 14,008 | |||||||||||||||
| Other assets | 15,333 | 14,877 | 15,251 | 16,209 | 15,908 | |||||||||||||||
| Total assets | $ | 757,927 | $ | 742,587 | $ | 726,657 | $ | 717,888 | $ | 707,649 | ||||||||||
| Noninterest-bearing deposits | $ | 172,072 | $ | 160,461 | $ | 154,201 | $ | 147,828 | $ | 151,078 | ||||||||||
| Interest-bearing deposits | 474,012 | 466,008 | 458,225 | 456,925 | 434,790 | |||||||||||||||
| Total deposits | 646,084 | 626,469 | 612,426 | 604,753 | 585,868 | |||||||||||||||
| Other borrowings | 35,000 | 40,000 | 40,000 | 40,000 | 49,500 | |||||||||||||||
| Subordinated debentures and subordinated notes | 23,235 | 23,219 | 23,203 | 23,186 | 23,176 | |||||||||||||||
| Other liabilities | 2,040 | 2,213 | 1,836 | 2,376 | 2,087 | |||||||||||||||
| Total liabilities | 706,359 | 691,901 | 677,465 | 670,315 | 660,631 | |||||||||||||||
| Shareholders' equity | 51,568 | 50,686 | 49,192 | 47,573 | 47,018 | |||||||||||||||
| Total liabilities and shareholders' equity | $ | 757,927 | $ | 742,587 | $ | 726,657 | $ | 717,888 | $ | 707,649 | ||||||||||
| Gross loans to deposits | 85.45% | 85.82% | 86.22% | 87.06% | 88.44% | |||||||||||||||
| Equity to assets | 6.80% | 6.83% | 6.77% | 6.63% | 6.64% | |||||||||||||||
| Book value per share | $ | 8.43 | $ | 8.29 | $ | 8.05 | $ | 7.82 | $ | 7.72 | ||||||||||
| Asset Quality Data: | ||||||||||||||||||||
| Nonaccrual loans | $ | 929 | $ | 949 | $ | 2,304 | $ | 1,882 | $ | 2,574 | ||||||||||
| Loans past due 90 days or more and accruing | — | — | — | — | — | |||||||||||||||
| Total nonperforming loans | 929 | 949 | 2,304 | 1,882 | 2,574 | |||||||||||||||
| Other real estate owned | 834 | 834 | 1,013 | 880 | 587 | |||||||||||||||
| Total nonperforming assets | $ | 1,763 | $ | 1,783 | $ | 3,317 | $ | 2,762 | $ | 3,161 | ||||||||||
| Nonperforming loans to total loans | 0.17% | 0.18% | 0.44% | 0.36% | 0.50% | |||||||||||||||
| Nonperforming assets to total assets | 0.23% | 0.24% | 0.46% | 0.38% | 0.45% | |||||||||||||||
| Allowance for loan losses to total gross loans | 1.48% | 1.56% | 1.62% | 1.68% | 1.70% | |||||||||||||||
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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, | |||||||||||||||
| 2016 | 2015 | 2016 | 2015 | |||||||||||||
| Selected Operating Data: | ||||||||||||||||
| Interest income | $ | 6,657 | $ | 6,412 | $ | 20,085 | $ | 18,966 | ||||||||
| Interest expense | 1,113 | 993 | 3,410 | 2,628 | ||||||||||||
| Net interest and dividend income | 5,544 | 5,419 | 16,675 | 16,338 | ||||||||||||
| Provision for loan losses | (250 | ) | (400 | ) | (1,050 | ) | (1,100 | ) | ||||||||
| Net interest income | ||||||||||||||||
| after provision for loan losses | 5,794 | 5,819 | 17,725 | 17,438 | ||||||||||||
| Noninterest income: | ||||||||||||||||
| Fees and service charges | 536 | 541 | 1,595 | 1,577 | ||||||||||||
| Bank owned life insurance | 120 | 103 | 328 | 300 | ||||||||||||
| Gain on calls and sales of securities | 6 | — | 62 | 152 | ||||||||||||
| Gain on sales of mortgage loans | 33 | 52 | 70 | 117 | ||||||||||||
| Gain on sales of other real estate owned | — | — | 6 | 53 | ||||||||||||
| Other | 128 | 142 | 413 | 439 | ||||||||||||
| Total noninterest income | 823 | 838 | 2,474 | 2,638 | ||||||||||||
| Noninterest expenses: | ||||||||||||||||
| Salaries and employee benefits | 2,788 | 2,785 | 8,245 | 8,181 | ||||||||||||
| Occupancy, net | 400 | 427 | 1,202 | 1,317 | ||||||||||||
| Equipment | 155 | 175 | 453 | 496 | ||||||||||||
| Data processing | 485 | 468 | 1,434 | 1,380 | ||||||||||||
| FDIC insurance premium | 100 | 87 | 296 | 317 | ||||||||||||
| Other | 1,071 | 1,183 | 3,270 | 3,588 | ||||||||||||
| Total noninterest expenses | 4,999 | 5,125 | 14,900 | 15,279 | ||||||||||||
| Income before income tax expense | 1,618 | 1,532 | 5,299 | 4,797 | ||||||||||||
| Income tax expense | 583 | 532 | 1,911 | 1,658 | ||||||||||||
| Net income | 1,035 | 1,000 | 3,388 | 3,139 | ||||||||||||
| Dividends on preferred stock | — | 114 | — | 456 | ||||||||||||
| Net income available to common shareholders | $ | 1,035 | $ | 886 | $ | 3,388 | $ | 2,683 | ||||||||
| Weighted avg. no. of diluted common shares | 6,115,987 | 6,091,627 | 6,106,723 | 6,074,763 | ||||||||||||
| Diluted earnings per common share | $ | 0.17 | $ | 0.15 | $ | 0.55 | $ | 0.44 | ||||||||
| Return on average common equity | 8.06% | 7.58% | 9.09% | 7.88% | ||||||||||||
| Return on average assets | 0.54% | 0.56% | 0.61% | 0.60% | ||||||||||||
| Yield on average interest-earning assets | 3.68% | 3.80% | 3.83% | 3.87% | ||||||||||||
| Cost of average interest-bearing liabilities | 0.83% | 0.79% | 0.86% | 0.72% | ||||||||||||
| Net interest rate spread | 2.85% | 3.01% | 2.97% | 3.15% | ||||||||||||
| Net interest margin | 3.07% | 3.21% | 3.18% | 3.34% | ||||||||||||
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Stewardship Financial Corporation
Selected Consolidated Financial Information
(dollars in thousands, except per share amounts)
(unaudited)
| For the three months ended | ||||||||||||||||||||
| September 30, | June 30, | March 31, | December 31, | September 30, | ||||||||||||||||
| 2016 | 2016 | 2016 | 2015 | 2015 | ||||||||||||||||
| Selected Operating Data: | ||||||||||||||||||||
| Interest income | $ | 6,657 | $ | 6,979 | $ | 6,449 | $ | 6,643 | $ | 6,412 | ||||||||||
| Interest expense | 1,113 | 1,124 | 1,173 | 1,198 | 993 | |||||||||||||||
| Net interest and dividend income | 5,544 | 5,855 | 5,276 | 5,445 | 5,419 | |||||||||||||||
| Provision for loan losses | (250 | ) | (450 | ) | (350 | ) | (275 | ) | (400 | ) | ||||||||||
| Net interest and dividend income | ||||||||||||||||||||
| after provision for loan losses | 5,794 | 6,305 | 5,626 | 5,720 | 5,819 | |||||||||||||||
| Noninterest income: | ||||||||||||||||||||
| Fees and service charges | 536 | 530 | 529 | 558 | 541 | |||||||||||||||
| Bank owned life insurance | 120 | 107 | 101 | 103 | 103 | |||||||||||||||
| Gain on calls and sales of securities | 6 | 32 | 24 | 17 | — | |||||||||||||||
| Gain on sales of mortgage loans | 33 | 19 | 18 | 24 | 52 | |||||||||||||||
| Gain on sales of other real estate owned | — | 6 | — | 30 | — | |||||||||||||||
| Other | 128 | 138 | 147 | 123 | 142 | |||||||||||||||
| Total noninterest income | 823 | 832 | 819 | 855 | 838 | |||||||||||||||
| Noninterest expenses: | ||||||||||||||||||||
| Salaries and employee benefits | 2,788 | 2,742 | 2,715 | 2,719 | 2,785 | |||||||||||||||
| Occupancy, net | 400 | 404 | 398 | 422 | 427 | |||||||||||||||
| Equipment | 155 | 148 | 150 | 159 | 175 | |||||||||||||||
| Data processing | 485 | 477 | 472 | 467 | 468 | |||||||||||||||
| FDIC insurance premium | 100 | 90 | 106 | 106 | 87 | |||||||||||||||
| Other | 1,071 | 1,138 | 1,061 | 1,027 | 1,183 | |||||||||||||||
| Total noninterest expenses | 4,999 | 4,999 | 4,902 | 4,900 | 5,125 | |||||||||||||||
| Income before income tax expense | 1,618 | 2,138 | 1,543 | 1,675 | 1,532 | |||||||||||||||
| Income tax expense | 583 | 776 | 552 | 614 | 532 | |||||||||||||||
| Net income | 1,035 | 1,362 | 991 | 1,061 | 1,000 | |||||||||||||||
| Dividends on preferred stock | — | — | — | — | 114 | |||||||||||||||
| Net income available to common shareholders | $ | 1,035 | $ | 1,362 | $ | 991 | $ | 1,061 | $ | 886 | ||||||||||
| Weighted avg. no. of diluted common shares | 6,115,987 | 6,111,729 | 6,092,351 | 6,086,249 | 6,091,627 | |||||||||||||||
| Diluted earnings per common share | $ | 0.17 | $ | 0.22 | $ | 0.16 | $ | 0.17 | $ | 0.15 | ||||||||||
| Return on average common equity | 8.06% | 11.05% | 8.21% | 8.89% | 7.58% | |||||||||||||||
| Return on average assets | 0.54% | 0.74% | 0.55% | 0.58% | 0.56% | |||||||||||||||
| Yield on average interest-earning assets | 3.68% | 4.02% | 3.79% | 3.87% | 3.80% | |||||||||||||||
| Cost of average interest-bearing liabilities | 0.83% | 0.86% | 0.90% | 0.92% | 0.79% | |||||||||||||||
| Net interest rate spread | 2.85% | 3.16% | 2.89% | 2.95% | 3.01% | |||||||||||||||
| Net interest margin | 3.07% | 3.38% | 3.11% | 3.18% | 3.21% | |||||||||||||||
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