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| 8-K - FORM 8-K - MSB FINANCIAL CORP. - MSB FINANCIAL CORP | f8k_050117-5468.htm |
MSB FINANCIAL CORP. RELEASES FIRST QUARTER EARNINGS
Millington, New Jersey, May 1, 2017 – 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 $9.6 million from December 31, 2016 as the Company continues to focus on the origination of commercial relationships.
The following table summarizes loan balances and composition at March 31, 2017 and December 31, 2016:
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At
|
At
|
||||||||||
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March 31,
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December 31,
|
||||||||||
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(In thousands)
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2017
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2016
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|||||||||
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Residential mortgage:
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|||||||||||
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One-to-four family
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$
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160,153
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38.2
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%
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$
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160,534
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42.3
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%
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|||
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Home equity
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30,493
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7.3
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32,262
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8.5
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|||
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Total residential mortgage
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190,646
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45.5
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192,796
|
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50.8
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|||
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Commercial and multi-family real estate
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141,193
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33.7
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124,656
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32.8
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|||||||
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Construction
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31,978
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7.6
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16,554
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4.4
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|||||||
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Commercial and industrial
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54,887
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13.1
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45,246
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11.9
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|||
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Total commercial loans
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228,058
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51.4
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186,456
|
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49.1
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|||
|
.
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|||||||||||
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Consumer loans
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|
394
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|
0.1
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|
446
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0.1
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|||
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Total loans receivable
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419,098
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100.0
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%
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379,698
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100.0
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%
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|||||
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Less:
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|||||||||||
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Loans in process
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15,394
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6,557
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|||||||||
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Deferred loan fees
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631
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658
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|||||||||
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Allowance
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4,626
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4,476
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|||||||||
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Total loans receivable, net
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$
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398,447
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$
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368,007
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|||||||
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 $16.1 million.
The following table summarizes deposit balances and composition at March 31, 2017 and December 31, 2016:
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At
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At
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|||||||||||||||
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(Dollars in thousands)
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March 31, 2017
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December 31, 2016
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||||||||||||||
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Noninterest demand
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$
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38,970
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10.98
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%
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$
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44,365
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12.25
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%
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||||||||
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Interest demand
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89,159
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25.12
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99,879
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27.57
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||||||||||||
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Savings
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104,956
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29.57
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103,163
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28.47
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||||||||||||
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Money Market
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13,950
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3.93
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11,265
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3.11
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||||||||||||
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Total demand deposits
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247,035
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69.60
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258,672
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71.40
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||||||||||||
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Certificates of Deposit
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107,896
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30.40
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103,627
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28.60
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||||||||||||
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Total Deposits
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$
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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.
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Contact:
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Michael A. Shriner, President & CEO
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(908) 647-4000
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mshriner@millingtonbank.com
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MSB FINANCIAL CORP
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||||||||
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(In Thousands, except for per share amount)
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(Unaudited)
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(Unaudited)
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||||||
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Statement of Financial Condition Data:
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03/31/2017
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03/31/2016
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||||||
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Total assets
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$
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481,908
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$
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380,134
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||||
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||||||||
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Cash and cash equivalents
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11,249
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14,515
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||||||
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||||||||
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Loans receivable, net
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398,447
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270,713
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||||||
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|
||||||||
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Securities held to maturity
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42,716
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73,603
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||||||
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||||||||
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Deposits
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354,931
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276,841
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||||||
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||||||||
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Federal Home Loan Bank advances
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49,175
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22,675
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||||||
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||||||||
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Total stockholders' equity
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74,067
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76,560
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Stock Information:
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||||||||
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Number of shares of common stock outstanding
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5,729
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5,953
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||||||
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Book value per share of common stock
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$
|
12.93
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$
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12.86
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||||
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Closing market price
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$
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16.50
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$
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12.85
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||||
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(Unaudited)
For the three months
ended March 31, |
||||||||
|
Summary of Operations:
(In Thousands, except for per share amounts)
|
2017
|
2016
|
||||||
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Total interest income
|
$
|
4,293
|
$
|
3,298
|
||||
|
|
||||||||
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Total interest expense
|
698
|
510
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||||||
|
|
||||||||
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Net interest income
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3,595
|
2,788
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||||||
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|
||||||||
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Provision for loan losses
|
195
|
130
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||||||
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|
||||||||
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Net interest income after provision for loan losses
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3,400
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2,658
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||||||
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|
||||||||
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Non-interest income
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187
|
141
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||||||
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|
||||||||
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Non-interest expense
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2,717
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2,564
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||||||
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|
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Income before taxes
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870
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235
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||||||
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|
||||||||
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Income tax expense
|
321
|
76
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||||||
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|
||||||||
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Net income
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$
|
549
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$
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159
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||||
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|
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Net income per common share - basic
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$
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0.10
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$
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0.03
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||||
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Net income per common share - diluted
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$
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0.10
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$
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0.03
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||||
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||||||||
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Weighted average number of shares - basic
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5,520
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5,743
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||||||
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Weighted average number of shares - diluted
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5,614
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5,812
|
||||||
|
Performance Ratios:
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||||||||
|
Return on average assets annualized
|
0.48
|
%
|
0.17
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%
|
||||
|
Return on average common equity annualized
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2.97
|
%
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0.83
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%
|
||||
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Net interest margin
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3.29
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%
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3.12
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%
|
||||
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Efficiency ratio
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71.83
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%
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87.54
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%
|
||||
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Operating expenses / average assets annualized
|
2.36
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%
|
2.73
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%
|
||||
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For the three months ended
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||||||||||||||||||||||||
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03/31/2017
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03/31/2016
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|||||||||||||||||||||||
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Average Balance Sheet
(In Thousands)
|
Average
Balance |
Interest
Income/ Expense |
Yield
|
Average
Balance |
Interest Income/
Expense |
Yield
|
||||||||||||||||||
|
Interest-earning assets:
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||||||||||||||||||||||||
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Loans receivable
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$
|
382,386
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$
|
4,000
|
4.18
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%
|
$
|
271,815
|
$
|
2,838
|
4.18
|
%
|
||||||||||||
|
Securities held to maturity
|
43,285
|
251
|
2.32
|
76,932
|
431
|
2.24
|
||||||||||||||||||
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Other interest-earning assets
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11,335
|
42
|
1.48
|
8,430
|
29
|
1.38
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||||||||||||||||||
|
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
|
||||||||||||||||||||
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Interest-bearing liabilities:
|
||||||||||||||||||||||||
|
Demand & money market
|
$
|
106,037
|
$
|
95
|
0.36
|
%
|
$
|
48,453
|
$
|
21
|
0.17
|
%
|
||||||||||||
|
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
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||||||||||||||||||
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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
|
||||||||||||||||||
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Total interest-bearing liabilities
|
346,316
|
698
|
0.81
|
265,089
|
510
|
0.77
|
||||||||||||||||||
|
Non-interest-bearing deposit
|
37,821
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29,621
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||||||||||||||||||||||
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Other non-interest-bearing liabilities
|
2,789
|
3,820
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||||||||||||||||||||||
|
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
|
%
|
||||||||||||||||||||