MIDLAND PARK, NJ, May 3, 2010 (Marketwire) --
MIDLAND PARK, NJ -- (Marketwire) -- 05/03/10 -- Stewardship Financial Corporation (NASDAQ: SSFN), parent of Atlantic Stewardship Bank, announced today its financial results for the first quarter ended March 31, 2010. Net income for the three months ended March 31, 2010 was $871,000, or $0.13 per diluted common share, as compared to net income of $1.2 million, or $0.19 per diluted common share, for the three months ended March 31, 2009. Results for the current year period include an increased provision for loan losses. All per share calculations have been adjusted for a 5% stock dividend paid in November 2009.
"While our earnings were again impacted by the provision for loan losses," said Paul Van Ostenbridge, Stewardship Financial Corporation's President and Chief Executive Officer, "positives for the quarter included an increase in net interest income as well as an increase in fees and service charges, and effective management of noninterest expenses."
Net interest income grew $581,000, or 10.4%, in the first quarter of 2010 compared to last year. For the three months ended March, 31, 2010, the net interest spread and margin grew to 3.74% and 4.08%, respectively, from 3.42% and 3.87%, respectively, for the three months ended March 31, 2009. The current period yield on earning assets of 5.58%, compared to an earning asset yield of 5.81% for the three months ended March 31, 2009, reflects the effect of a prolonged low interest rate environment. More than offsetting the decline in the asset yield, the cost of interest-bearing liabilities declined to 1.84% for the three months ended March 31, 2010 as compared to 2.39% reported for the same prior year period, principally reflecting the repricing of deposits at lower rates, consistent with the lower interest rate environment.
The Corporation recorded a $1.55 million provision for loan losses for the three months ended March 31, 2010 compared to a provision for loan losses of $150,000 for the March 2009 period. The total allowance for loan losses increased to 1.77% of total loans from a comparable ratio of 1.50% at December 31, 2009 and 1.22% at March 31, 2009, reflecting the continuing uncertain economic environment.
Commenting on the Corporation's loan loss provision, Van Ostenbridge stated, "While the results of our reserve analysis process required us to increase the provision for loan losses, our team continues to work diligently to assertively address problem and potential problem loans. We are making progress in working through these problem assets and the current difficult economic cycle." Van Ostenbridge continued, "While additional problem loans emerged, we were encouraged by our ability during the current quarter to resolve several of the problem loans existing at December 31, 2009." Non-performing loans declined slightly to $22.3 million, or 4.83% of total loans at March 31, 2010, compared to $22.9 million, or 4.98% at December 31, 2009.
During the first quarter of 2010, the Corporation realized a $328,000 gain on sale of securities. The security sale addressed the anticipated impact of rising interest rates and provided the Corporation with additional liquidity. In addition, noninterest income included increased fees and service charges when compared to the same period last year. This increase is partially the result of higher debit card related income due to increased customer usage.
Effective expense management was demonstrated by only a slight increase in total noninterest expenses in comparison to the first quarter of 2009.
Total assets at March 31, 2010 were $662.2 million, relatively unchanged from assets of $663.8 million at December 31, 2009. A $9.1 million decrease in the securities available for sale is primarily attributable to the sale of securities as discussed previously. Loans receivable, gross increased $1.4 million from December 31, 2009, reflecting a sufficient level of demand offset by payoffs and normal principal amortization. The Corporation adheres to appropriate underwriting standards to ensure the origination of quality loans.
Total deposits were $542.9 million at March 31, 2010, representing solid growth of $13.0 million when compared to deposits of $529.9 million at December 31, 2009. The growth in deposits consisted of both interest-bearing and non-interest bearing accounts, demonstrating appropriate product offerings. As a result of the deposit growth, other borrowings were reduced $18.6 million since December 31, 2009.
Van Ostenbridge concluded, "During this challenging time for the banking industry, our philosophy has been, and continues to be, to manage the net interest margin without compromising asset quality or future earnings potential. For the near term, the size and extent of our loan loss provisioning will remain the most important single factor in our earnings. However, we believe that with stabilization in our credit quality and a rebound in overall economic activity, we are well positioned for future growth."
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 over $7.0 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.
Stewardship Financial Corporation
Selected Consolidated Financial Information
(dollars in thousands, except per share amounts)
(unaudited)
March 31, December 31, March 31,
2010 2009 2009
------------- ------------- -------------
Selected Financial Condition
Data:
Cash and cash equivalents $ 12,196 $ 8,871 $ 11,820
Securities available for
sale 93,926 103,026 106,577
Securities held to
maturity 70,758 67,717 70,842
FHLB Stock 2,390 3,227 3,032
Loans receivable:
Loans receivable,
gross 461,877 460,476 437,196
Allowance for loan
losses (8,174) (6,920) (5,324)
Other, net (422) (437) (405)
------------- ------------- -------------
Loans receivable, net 453,281 453,119 431,467
Loans held for sale 2,724 660 1,968
Other assets 26,951 27,224 23,310
------------- ------------- -------------
Total assets $ 662,226 $ 663,844 $ 649,016
============= ============= =============
Total deposits $ 542,930 $ 529,930 $ 515,470
Other borrowings 36,000 54,600 50,500
Subordinated debentures 7,217 7,217 7,217
Securities sold under
agreements to repurchase 15,399 15,396 15,162
Other liabilities 6,677 3,190 7,087
Stockholders' equity 54,003 53,511 53,580
------------- ------------- -------------
Total liabilities and
stockholders' equity $ 662,226 $ 663,844 $ 649,016
============= ============= =============
Book value per common
share $ 7.57 $ 7.50 $ 7.53
Equity to assets 8.15% 8.06% 8.26%
Asset Quality Data:
Nonaccrual loans $ 19,525 $ 19,656 $ 6,592
Loans past due 90 days or
more and accruing - 415 414
Restructured loans 2,775 2,846 2,375
------------- ------------- -------------
Total nonperforming loans $ 22,300 $ 22,917 $ 9,381
============= ============= =============
Non-performing loans to
total loans 4.83% 4.98% 2.15%
Non-performing loans to
total assets 3.37% 3.45% 1.45%
Allowance for loan losses
to nonperforming loans 36.65% 30.20% 56.75%
Allowance for loan losses
to total gross loans 1.77% 1.50% 1.22%
All share data has been restated to include the effects of a 5% stock
dividend paid in November 2009.
Stewardship Financial Corporation
Selected Consolidated Financial Information
(dollars in thousands, except per share amounts)
(unaudited)
For the three months ended
March 31,
------------------------------
2010 2009
-------------- --------------
Selected Operating Data:
Interest income $ 8,495 $ 8,473
Interest expense 2,316 2,875
-------------- --------------
Net interest and dividend income 6,179 5,598
Provision for loan losses 1,550 150
-------------- --------------
Net interest and dividend income
after provision for loan losses 4,629 5,448
Non-interest income:
Fees and service charges 469 396
Bank owned life insurance 86 83
Gain on sales of mortgage loans 55 11
Gain on calls and sales of securities 328 39
Merchant processing - 118
Other 73 60
-------------- --------------
Total noninterest income 1,011 707
Non-interest expenses:
Salaries and employee benefits 2,126 2,059
Occupancy, net 489 472
Equipment 309 265
Data processing 325 305
FDIC insurance premium 224 170
Charitable contributions 165 171
Merchant processing - 108
Other 786 858
-------------- --------------
Total noninterest expenses 4,424 4,408
-------------- --------------
Income before income taxes 1,216 1,747
Income tax expense 345 560
-------------- --------------
Net income 871 1,187
Dividends on preferred stock 137 84
-------------- --------------
Net income available to common
stockholders $ 734 $ 1,103
============== ==============
Weighted avg. no. of diluted common
shares 5,841,633 5,834,953
Diluted earnings per common share $ 0.13 $ 0.19
Return on average common equity 5.48% 9.04%
Return on average assets 0.54% 0.76%
Yield on average interest-earning assets 5.58% 5.81%
Cost of average interest-bearing
liabilities 1.84% 2.39%
-------------- --------------
Net interest rate spread 3.74% 3.42%
============== ==============
Net interest margin 4.08% 3.87%
All share data has been restated to include the effects of a 5% stock
dividend paid in November 2009.
Contact:
Claire M. Chadwick
SVP and Chief Financial Officer
630 Godwin Avenue
Midland Park, NJ 07432
201-444-7100
