Attached files
| file | filename |
|---|---|
| EX-32.1 - EXHIBIT 32.1 - STEWARDSHIP FINANCIAL CORP | ssfn20161231_10kex32-1.htm |
| EX-31.2 - EXHIBIT 31.2 - STEWARDSHIP FINANCIAL CORP | ssfn20161231_10kex31-2.htm |
| EX-31.1 - EXHIBIT 31.1 - STEWARDSHIP FINANCIAL CORP | ssfn20161231_10kex31-1.htm |
| EX-23.0 - EXHIBIT 23.0 - STEWARDSHIP FINANCIAL CORP | ssfn20161231_10kex23-0.htm |
| EX-21 - EXHIBIT 21 - STEWARDSHIP FINANCIAL CORP | ssfn20161231_10kex21.htm |
| EX-10.12 - EXHIBIT 10.12 - STEWARDSHIP FINANCIAL CORP | ssfn20161231_10kex1012.htm |
| EX-10.11 - EXHIBIT 10.11 - STEWARDSHIP FINANCIAL CORP | ssfn20161231_10kex1011.htm |
| EX-10.10 - EXHIBIT 10.10 - STEWARDSHIP FINANCIAL CORP | ssfn20161231_10kex1010.htm |
| EX-10.9 - EXHIBIT 10.9 - STEWARDSHIP FINANCIAL CORP | ssfn20161231_10kex109.htm |
| 10-K - 10-K - STEWARDSHIP FINANCIAL CORP | ssfn_20161231x10k.htm |
growth and stability
2016 ANNUAL REPORT
growth and stability
“ Be an example to
the believers in
word, in conduct,
in love, in spirit,
in faith, in purity.”
– 1 Timothy 4:12
MESSAGE TO SHAREHOLDERS
Atlantic Stewardship Bank has been maintaining
responsible growth and stability in a dynamic business
environment for over 30 years. ASB, founded in 1985, is a
unique full-service commercial bank with solid progression
that offers personalized financial solutions to the northern
New Jersey market and surrounding areas. Further, we
are privileged to be the only U.S. bank that tithes, and this
remains core to our corporate mission.
We believe in our efforts to build relationships and
continue our focus on being a community-oriented and
customer-focused financial institution. Living up to our
promise of being “faithful to our customers,” we have
decided that the best way to let people know that they can
rely on us is to always be personally faithful to their needs.
As such, we were named a
finalist for the Great Oak
Awards, which honors New
Jersey companies for their
outstanding philanthropy. In
addition, our Bank was selected
as a “Champion of Good
Works” by the Commerce and
Industry Association of New
Jersey (CIANJ).
FINANCIAL RESULTS
We are pleased to continue to report positive upward
momentum with our financial results. Improvement
in earnings continues to reflect the impact of our solid
loan growth funded by a steady increase in deposits.
In addition, due to superior asset quality, results were
positively impacted by the Corporation recording a
negative provision for loan losses. Finally, a focus on
noninterest income and maintaining expense control
contributed to the improved results. The solid earnings
resulted in net income available to common shareholders
for the year ended December 31, 2016, of $4.7 million,
or $0.78 per diluted common share, representing an
approximately 26% increase over the $3.7 million, or
$0.62 per diluted common share, earned for the year ended
December 31, 2015.
For 2016, net interest income was $22.6 million compared
with $21.8 million for the prior year. The net interest
margin for 2016 was 3.18% compared with 3.30% for
2015. In general, the net interest margin reflects an overall
decline in interest rates on loans and investments – a
result of the historically low market rates in the current
environment. In addition, the current year results include
the impact of the $16.6 million of Subordinated Notes
issued in August 2015 and the subsequent redemption of
preferred stock. When compared with the prior year, the
cost of the Subordinated Notes added a total of $781,000
of interest expense to the current year. However, such
increase, on an after-tax basis, is 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%.
As noted previously, the Corporation recorded a negative
provision for loan losses – $1.4 million for both 2016
and 2015. The recording of a negative provision for loan
losses and the decline in the allowance coverage ratio are
directly attributable to improved credit quality metrics of
the portfolio and the reduction in the estimated level of
allowance for loan losses required.
Total assets reached $795.5 million at December 31,
2016 – reflecting an increase of $77.6 million, or 10.8%,
compared with $717.9 million of assets at the end of
2015. The asset growth was the direct result of new
loan originations. We are encouraged by the momentum
resulting from robust loan production in 2016 but remain
vigilant to ensure that loans meet our prudent underwriting
standards.
Deposit balances totaled $658.9 million at December
31, 2016, compared with $604.8 million a year earlier,
reflecting $54.2 million, or 9.0%, of growth. In addition,
in order to fund loan growth and manage interest rate risk,
other borrowings increased $19.2 million to $59.2 million
at December 31, 2016. The combination of the increase
in deposits as well as the appropriate use of low-cost
borrowings is important in our ability to cost-effectively
fund the growth we experienced in our loan portfolio.
Regulatory capital levels at December 31, 2016, continue
to remain strong, with a Tier 1 leverage ratio of 7.65% and
total risk-based capital ratio of 13.10%, far exceeding the
regulatory requirements of 4% and 8%, respectively, to be
considered a “well-capitalized” institution.
Additionally, for seven consecutive quarters we have
received a 5-Star rating for financial strength by
BauerFinancial Inc., the nation’s premier bank rating firm,
which has been analyzing and reporting on the nation’s
banks since 1983. Earning a 5-Star rating, BauerFinancial’s
highest, indicates that our Bank is one of the strongest in
the nation. Some of the areas in which we excel are: Capital
– more than twice the capital than is required by regulators;
Loan Quality – delinquent loan levels are manageable; and
Profitability. While we remain conservative with respect to
managing risk, we are progressive in adapting to the needs
of an ever-evolving customer base.
growth and stability
L to R: William S. Clement, Executive Vice President and Chief Lending Officer; Paul Van
Ostenbridge, President and CEO; and James H. Shields, Senior Vice President and Chief
Credit Officer
OPERATING HIGHLIGHTS
While the Bank is always moving on all fronts, we focused particularly on our
small-business customers in 2016, as we know one size does not fit all. Whether
it is our Express Loan Approval process, lines of credit or term loans, we listen
to our customers’ needs before recommending a solution. We are committed to
cultivating our commercial lending portfolio and positioning ourselves to deliver
on every promise.
Our goals were clear,
to provide personalized
lending solutions that fit the
needs of our commercial
customers, to provide
localized decision-making
and to make sure the loan is
“right” for each and every
customer instead of simply
selling them products. With
our enhanced lending team
in place, we continue to bring invaluable expertise and experience to customers
with regard to market knowledge, loan portfolio management and credit
quality assessment. We specialize in a personalized, hands-on approach and are
confident that our business solutions provide peace of mind.
We offer highly competitive rates and terms with our mortgage loans, whether
customers are looking to purchase or refinance, along with a variety of mortgage
loan solutions. We are continually improving and streamlining our lending and
credit processes to provide expedited turnaround.
“Financed by” Atlantic Stewardship Bank
Bergen County welcomes Atlantic Stewardship Bank to its American Dream First-Time Home Buyer Program, where ASB
will both educate and financially assist eligible first-time home buyers.
“The entire loan experience
could not have been
handled more professionally.
Expediency was something
that was very important to
me, and to have the process
finalized in just three days
was a pleasant surprise.
I’ve been a bank customer
for over 15 years, and ASB
has always been a valued
relationship.”
President –
Sports and Entertainment Company
“My business is about
to celebrate its 25th
anniversary, and in all that
time, I’ve not had a better
and more efficient experience
than the one I had with a
recent express business loan
with Atlantic Stewardship
Bank. Rich Powers and Justin
Herman were extremely
responsive and proficient.
The time from my first inquiry
to the funding of the loan
was a matter of weeks,
not months, including an
approval on the day it was
placed on the desk of the
loan officer. I would without
hesitation recommend ASB
for your commercial lending
needs.”
President –
Healthcare Company
growth and stability
TECHNOLOGY
COMMUNITY COMMITMENT
Several years ago, we began to hear from our customers
that they need high-tech financial services, and our response
ever since has been to provide the latest in banking
technology. Both businesses and consumers can access and
transact on their accounts 24/7, anytime, anywhere.
As consumers become more comfortable conducting
business through their mobile devices, they are increasingly
migrating toward Apple products, including Apple Pay,
which our Bank now offers. Further, millennials want to
be associated with banks that both are committed to their
community and offer the products and services that fit
their lifestyles. We continue to invest in technology so that
we can best service our customers’ individual needs and
banking preferences. Whether you are using your iPhone,
iPad or Apple Watch, we provide a secure touch-and-go
experience while protecting your personal information with
the latest chip technology as an added layer of security.
Through our unique Tithing Program, we remain faithful
to giving back 10% of our taxable income annually and
serving a greater purpose. Since the program’s inception
over $9 million has been given to Christian and other
local nonprofit organizations in our community. In 2016,
we distributed over $325,000 in charitable contributions
to more than 230 recipients. We hand-delivered 90% of
the checks to Christian missions, schools and healthcare
facilities as well as local nonprofit organizations such as
food pantries, libraries, police and fire departments and
other deserving local recipients in the communities served
by the Bank’s 11 branch offices.
Additionally, the Center of United Methodist Aid to the
Community (CUMAC), at its 19th Annual HELP Dinner
& Silent Auction, honored ASB with its President’s Award
for our support of CUMAC’s mission. Since 1999, ASB
has been extremely fortunate to have partnered with
CUMAC and to have provided contributions of food,
financial assistance exceeding $108,000 and volunteer
hours. “Atlantic Stewardship Bank was instrumental in the
purchase of our building at 223 Ellison Street, Paterson,
New Jersey, and has also provided funds for emergency
needs and disaster relief, when the occasions have arisen,”
said Donald G. Matthews, Esq., President of CUMAC’s
Board. “ASB is truly faithful to its customers and the
community.”
ASB presents a tithe donation to CUMAC, one of many recipients in 2016.
growth and stability
CLOSING SENTIMENTS
The banking industry is ever-changing, and we are constantly making strategic
shifts to remain at the forefront of financial trends and deliver the ultimate
customer experience. Our Tithing Program is only one of the reasons we are
confident that when you walk through our doors, you will experience a unique
kind of banking. We welcome the opportunity to be of service to you today and
in the future – for as the bank grows, so does our ability to help others.
We are blessed to have the support of our Board of Directors and appreciate the
dedication and commitment of our Associates. We remain always faithful to our
shareholders and customers, and we thank everyone for their loyalty and trust
in our Bank. With this in mind, we thank our Lord for allowing the Corporation
and Bank to continue to thrive.
Richard W. Culp
Chairman of the Board of Directors
Paul Van Ostenbridge
President and Chief Executive Officer
“ But grow in
grace, and in the
knowledge of our
Lord and Savior
Jesus Christ. To
him be glory both
now and forever.
Amen.”
– 2 Peter 3:18
BOARD OF DIREC TORS
Stewardship Financial Corporation and
Atlantic Stewardship Bank
Richard W. Culp, Chairman
Educational Management
Consultant
Wayne Aoki
Retired
William C. Hanse, Esq.
Of Counsel
Hanse Anderson LLP
Margo Lane
Director of Marketing and Sales
Collagen Matrix, Inc.
John C. Scoccola
Senior Manager of Global Engineering
Verizon Enterprise Solutions
John L. Steen
President, Steen Sales, Inc.
Robert J. Turner, Secretary
Retired
Paul Van Ostenbridge
President and Chief Executive Officer
Stewardship Financial Corporation and
Atlantic Stewardship Bank
William J. Vander Eems
President, William Vander Eems, Inc.
Michael A. Westra
President and General Manager
Wayne Tile Company
Howard R. Yeaton, Vice Chairman
Managing Principal
Financial Consulting Strategies LLC
growth and stability
STEWARDSHIP FINANCIAL
CORPORATION
CORPORATE ATTORNEYS
Stewardship Financial Corporation
McCarter & English, LLP
Attorneys at Law
100 Mulberry Street
4 Gateway Center
Newark, NJ 07102
973-622-4444
Atlantic Stewardship Bank
Hanse Anderson, LLP
2035 Hamburg Turnpike, Suite E
Wayne, NJ 07470-6245
973-831-8700
STOCK LISTING
Stewardship Financial Corporation
common stock is traded on the Nasdaq
Capital Market under the symbol SSFN.
Participation in our Dividend
Reinvestment Plan (DRP) is a convenient
and easy way to purchase shares of
SSFN at a discount to market and with
no commissions. To sign up for our DRP,
call the Investor Relations Department
of Computershare at 800-368-5948 or
visit www.computershare.com
STOCK REGISTRAR AND TRANSFER AGENT
To report a change of name or address,
or a lost stock certificate or dividend
check, contact:
Computershare Shareholder Services
P.O. Box 30170
College Station, TX 77842-3170
800-368-5948
www.computershare.com/investor
Shareholder Relations
Stewardship Financial Corporation
Corporate Division
201-444-7100
www.ASBnow.com
BUSINESS DEVELOPMENT
BOARDS
BERGEN
William F. Gilsenan, Jr.
Chairman
Steven Barlotta, CPA
J.T. Bolger
Richard Brady, Esq.
Linda A. Brock
William Cook
Frederic Farcy
William Haggerty, CPA
Christopher Heck
Bartel Leegwater
Edward Nieuwenhuis, Jr., DPM
Celine November, Esq.
Donald W. Reeder, Esq.
Kevin Sincavage
William Soodsma
John C. Stanley
Jeffrey R. Van Inwegen, M.D.
MORRIS
William A. Monaghan III, Esq.,
Chairman of Morris & Passaic Boards
Benjamin Burton
Joseph Daughtry
David Kahl
Joseph Lobozzo, Sr.
Mark P. Van Grouw, CPA
Deborah Van Vugt
Abe Van Wingerden
Anita Van Wingerden
Kenneth Vander May
Michael Wolansky, CPA
PASSAIC
William A. Monaghan III, Esq.,
Chairman of Morris & Passaic Boards
Patrick Anderson, CPA, Esq.
Heidi L. Borst
Beatrice Davis
Ben Della Cerra
Robert Fylstra, CPA
Paul D. Heerema
Douglas Hoogerhyde, CPA
Donald G. Matthews, Esq.
Thomas Mizzone Jr., CPA
Mary Postma
George Schaaf
Ralph Wiegers
growth and stability
630 Godwin Avenue, Midland Park, NJ 07432
201-444-7100 | 877-844-BANK | www.ASBnow.com
BRANCH LOCATIONS
Headquarters–Midland Park
630 Godwin Avenue
Hawthorne
386 Lafayette Avenue
Montville
2 Changebridge Road
North Haledon
33 Sicomac Road
Pequannock
249 Newark-Pompton Turnpike
Ridgewood
190 Franklin Avenue
Waldwick
64 Franklin Turnpike
Wayne Hills
87 Berdan Avenue
Wayne Valley
311 Valley Road
Westwood
200 Kinderkamack Road
Wyckoff
378 Franklin Avenue