EXHIBIT 99.1
CMS Bancorp, Inc. Announces Results for the Quarter Ended June 30, 2007
WHITE PLAINS, N.Y., Aug. 6, 2007 (PRIME NEWSWIRE) -- CMS Bancorp, Inc. (Nasdaq:CMSB), parent of Community Mutual Savings Bank, reported a net loss of $733,000 ($.39 per share) for the three months ended June 30, 2007 compared to net income of $17,000 for the three months ended June 30, 2006. The net loss was primarily the result of a $774,000 contribution to The Community Mutual Charitable Foundation (the "Foundation"), which is not currently deductible for tax purposes, made in conjunction with the initial public offering of CMS Bancorp common stock completed on April 4, 2007.
Results for the quarter ended June 30, 2007 reflect higher interest income of $514,000 net of higher interest expense of $256,000 and a provision for loan losses of $30,000 as compared to the same period in 2006. Net interest income after the provision for loan losses increased by $228,000 compared to the three month period ended June 30, 2006. Non-interest expenses increased by $955,000, primarily due to the $774,000 contribution to the Foundation. The balance of the increase in non-interest expenses of $181,000, includes higher salaries and occupancy costs, reflecting investments in personnel, infrastructure, processes and services for customers. The increase in net interest income after provision for loan losses reflects the investment of the proceeds of the initial public offering and the growth and diversification of the loan portfolio which grew from $103.1 million as of March 31, 2007 to $120.2 million as of June 30, 2007, an increase of $17.1 million in the three month quarter ended June 30, 2007.
For the nine months ended June 30, 2007, CMS Bancorp recorded a net loss of $813,000 compared to net income of $19,000 in the nine months ended June 30, 2006. The net loss includes a $774,000 contribution to the Foundation which is not currently deductible for tax purposes. The nine month period ended June 30, 2007 includes higher interest income of $1,036,000, net of an increase in interest expense of $838,000 and a provision for loan losses of $30,000, resulting in an increase in net interest income after the provision of $168,000. For the nine months ended June 30, 2007 as compared to the same period in 2006, non-interest expense increased by $1,006,000 primarily due to the $774,000 contribution to the Foundation. The balance of the increase in non-interest expenses of $232,000, includes higher salaries and occupancy costs, reflecting investments in personnel, infrastructure, processes and services for customers. The increase in net interest income after provision for loan losses reflects the investment o f the proceeds of the initial public offering and the growth and diversification of the loan portfolio which grew from $96.7 million as of September 30, 2006 to $120.2 million as of June 30, 2007. Deposit balances grew by $6.8 million during the same period.
Total assets increased by $19,080,000, or 15.6%, to $141,608,000 at June 30, 2007 from $122,528,000 at September 30, 2006 principally as a result of funds received from the sale of CMS Bancorp common stock. During the nine month period ended June 30, 2007, loans grew by $23,422,000, or 24.2%, as the Bank continued to expand and diversify its loan portfolio in order to enhance net interest income. The growth in the loan portfolio has been funded from the proceeds of the initial public offering, higher deposit balances and maturities of securities. During the nine month period ended June 30, 2007, $662,000 was invested in premises and equipment, principally for the renovation and modernization of the Mount Vernon branch and upgrades to the technology platform.
On April 4, 2007, Community Mutual Savings Bank completed its conversion from a New York State-chartered mutual savings bank to a federally-chartered stock savings bank. In the conversion and offering, CMS Bancorp sold 1,983,750 shares of its common stock, raised $19,837,500 in gross proceeds and contributed $9 million of equity to the Bank. After the conversion and offering, all of the Community Mutual Savings Bank's stock is owned by CMS Bancorp, and all of CMS Bancorp's stock is, in turn, owned by the public, including the Foundation.
Commenting on the conversion and stock offering, President and CEO John Ritacco said, "The successful completion of the stock offering was a critical factor in positioning Community Mutual Savings Bank for growth and future profitability. We continue to focus on our three year growth plan for the Bank. Over the past two years, we have invested in new management and staff, implemented new products and services for our customers, and incorporated a new technology platform to help deliver higher quality customer service. Going forward, we believe that our investment in technology and people will help our institution to maintain its community banking focus and meet its strategic growth objectives.
The improvement in net interest income in the quarter ended June 30, 2007 reflects not only the impact of the proceeds from the sale of stock, but our continuing efforts to improve profitability by expanding and diversifying our loan portfolio while maintaining our conservative underwriting standards, and to prudently add to our deposit balances at appropriate market interest rates.
All financial institutions are facing a challenging interest rate market. Over the past two years, short term deposit rates have risen significantly, while longer term interest rates on loans have remained within a very narrow range, thereby mitigating increases in our interest income from loan growth. While the yield curve has recently returned to a positive slope, the recent flat and at times inverted curve has negatively impacted our earnings. We remain focused on loan growth and the diversification of the loan portfolio, along with carefully monitoring our deposit interest and other non-interest costs."
Forward-Looking Statement
This press release may include certain forward-looking statements based on current management expectations. The Company wishes to caution readers not to place undue reliance on any such forward-looking statements contained in this press release, which speak only as of the date made. Factors of particular importance to the Company include, but are not limited to: (i) changes in general economic conditions, including interest rates; (ii) competition among providers of financial services; (iii) changes in the quality or composition of loan and investment portfolios of the Bank; (iv) changes in accounting and regulatory guidance applicable to banks; and (v) price levels and conditions in the public securities markets generally. The Company wishes to advise readers that the factors listed above could affect the Company's financial performance and could cause the Company's actual results for future periods to differ materially from any opinions or statements expressed with respect to future periods in any current statements. The Company and the Bank do not undertake and specifically decline any obligation to publicly release the result of any revisions that may be made to any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.
STATEMENTS OF FINANCIAL CONDITION
(Unaudited)
June 30, Sept 30,
2007 2006
--------- ---------
ASSETS (In thousands)
Cash and amounts due from depository
institutions $ 1,485 $ 2,709
Interest-bearing deposits 329 352
Federal funds sold 9,160 --
--------- ---------
Total cash and cash equivalents 10,974 3,061
Securities available for sale 4,109 4,087
Securities held to maturity, estimated
fair value of $3,679 and $15,073,
respectively 3,686 15,211
--------- ---------
Loans receivable, net of allowance for
loan losses of $245 and $215,
respectively 120,154 96,732
Premises and equipment 1,252 686
Federal Home Loan Bank of New York
stock 200 351
Interest receivable 665 638
Other assets 568 1,762
--------- ---------
Total assets $ 141,608 $ 122,528
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Deposits $ 115,546 $ 108,784
Advances from Federal Home Loan Bank
of New York -- 4,204
Advance payments by borrowers for
taxes and insurance 585 245
Other liabilities 1,047 988
--------- ---------
Total liabilities 117,178 114,221
--------- ---------
Stockholders' equity
Preferred stock, $.01 par value,
1,000,000 shares authorized, none
outstanding
Common stock, $.01 par value,
14,000,000 shares authorized
2,055,165 issued and outstanding at
June 30, 2007 21 --
Additional paid in capital 18,535 --
Retained earnings 7,631 8,444
Unearned Employee Stock Ownership
(ESOP)Shares (1,630) --
Accumulated other comprehensive
income (loss) (127) (137)
--------- ---------
Total stockholders' equity 24,430 8,307
--------- ---------
Total liabilities and
stockholders' equity $ 141,608 $ 122,528
========= =========
STATEMENTS OF OPERATIONS
------------------------
(Unaudited)
Three Months Ended Nine Months Ended
June 30, June 30,
------- ------- ------- ------
2007 2006 2007 2006
------- ------- ------- ------
(In thousands)
Interest income
Loans $ 1,603 $ 1,219 $ 4,491 $3,456
Securities 96 189 394 567
Federal
funds sold 220 23 265 63
Other
interest-
earning
assets 41 15 92 120
------- ------- ------- ------
Total
interest
income 1,960 1,446 5,242 4,206
------- ------- ------- ------
Interest
expense
Deposits 712 456 1,930 1,192
Mortgage
escrow
funds 3 3 8 8
Borrowings -- -- 100 --
------- ------- ------- ------
Total
interest
expense 715 459 2,038 1,200
------- ------- ------- ------
Net interest
income 1,245 987 3,204 3,006
Provision
for loan
losses 30 -- 30 --
------- ------- ------- ------
Net interest
income
after
provision
for loan
losses 1,215 987 3,174 3,006
------- ------- ------- ------
Non-interest
income
Fees and
service
charges 63 72 204 221
Other 1 1 8 7
------- ------- ------- ------
Total
non-
interest
income 64 73 212 228
------- ------- ------- ------
Non-interest
expense
Salaries
and
employee
benefits 696 538 1,969 1,734
Net
occupancy 156 103 457 391
Equipment 109 110 332 277
Professional
fees 75 76 201 233
Advertising 27 54 58 76
Federal
insurance
premium 3 11 10 33
Directors'
fees 30 47 91 140
Other
insurance 16 21 60 52
Bank
charges 16 12 48 74
Contributions 777 6 794 10
Other 80 52 187 181
------- ------- ------- ------
Total
non-
interest
expense 1,985 1,030 4,207 3,201
Income
(loss)
before
income
taxes (706) 30 (821) 33
Income tax
expense
(benefit) 27 13 (8) 14
------- ------- ------- ------
Net income
(loss) $ (733) $ 17 $ (813) $ 19
======= ======= ======= ======
Net (loss)
per common
share
Basic
and
diluted $ (0.39) N/A(a) $ (0.43) N/A(a)
Weighted
average
number of
common
shares
outstanding
Basic
and
diluted 1,891,437 N/A(a) 1,891,026 N/A(a)
(a) Converted to stock form on April 4, 2007
CONTACT: Community Mutual Savings Bank
Stephen E. Dowd, SVP & CFO
914-422-2700
