Business & Finance
Tue, November 10, 2009Mon, November 9, 2009Sun, November 8, 2009Sat, November 7, 2009Fri, November 6, 2009Thu, November 5, 2009Wed, November 4, 2009Tue, November 3, 2009Mon, November 2, 2009Sun, November 1, 2009Sat, October 31, 2009Fri, October 30, 2009Thu, October 29, 2009Stewardship Financial Corporation Reports Earnings for the Third Quarter 2009
Published in Business and Finance on Tuesday, November 3rd 2009 at 13:16 GMT by Market Wire
MIDLAND PARK, NJ--(Marketwire - November 3, 2009) - Stewardship Financial Corporation (
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% 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."
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 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.
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. 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.
