Attached files
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| 8-K - FORM 8-K - MSB FINANCIAL CORP. - MSB FINANCIAL CORP | f8k_073117-5468.htm |
MSB FINANCIAL CORP. RELEASES SECOND QUARTER EARNINGS
Millington, New Jersey, July 31, 2017 – MSB Financial Corp. (NASDAQ: MSBF) (the "Company"), parent company of Millington Bank, reported today the results of its operations for the three and six months ended June 30, 2017.
The Company reported net income of $732,000, or $0.13 per diluted common share, for the three months ended June 30, 2017, compared to net income of $223,000, or $0.04 per diluted common share, for the three months ended June 30, 2016. Net income for the six months ended June 30, 2017 was $1.3 million, or $0.23 per diluted common share, compared to net income of $382,000, or $0.07 per diluted common share, for the six months ended June 30, 2016.
Growth in net interest income and margin reflect growth in commercial loans
Net interest income for the three months ended June 30, 2017 increased $993,000, or 33.9%, to $3.9 million compared to $2.9 million for the second quarter of 2016. For the six months ended June 30, 2017, net interest income grew $1.8 million, or 31.5%, to $7.5 million compared to $5.7 million for the six months ended June 30, 2016. Net interest margin for the three months ended June 30, 2017 was 3.35% compared to 3.17% for the same period in 2016 while for the six months ended June 30, 2017, net interest margin was 3.32%, an improvement of 17 basis points, compared to 3.15% for the six months ended June 30, 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 year to date
At June 30, 2017, the Company's net loan portfolio totaled $426.4 million, an increase of $58.4 million or 15.9%, compared to $368.0 million at December 31, 2016. Commercial real estate loans increased $29.3 million or 23.5% while commercial and industrial loans increased $22.4 million or 49.6% from December 31, 2016 as the Company continues to focus on the origination of commercial relationships. Additionally, construction loans increased $13.1 million or 78.9% from December 31, 2016.
The following table summarizes loan balances and composition at June 30, 2017 and December 31, 2016:
|
At
|
At
|
||||||||||||||
|
June 30,
|
December 31,
|
||||||||||||||
|
(In thousands)
|
2017
|
2016
|
|||||||||||||
|
Residential mortgage:
|
|||||||||||||||
|
One-to-four family
|
$
|
164,448
|
37.0
|
%
|
$
|
160,534
|
42.3
|
%
|
|||||||
|
Home equity
|
29,021
|
6.5
|
32,262
|
8.5
|
|||||||||||
|
Total residential mortgage
|
193,469
|
43.5
|
192,796
|
50.8
|
|||||||||||
|
Commercial and multi-family real estate
|
153,984
|
34.6
|
124,656
|
32.8
|
|||||||||||
|
Construction
|
29,623
|
6.6
|
16,554
|
4.4
|
|||||||||||
|
Commercial and industrial
|
67,686
|
15.2
|
45,246
|
11.9
|
|||||||||||
|
Total commercial loans
|
251,293
|
56.4
|
186,456
|
49.1
|
|||||||||||
|
.
|
|||||||||||||||
|
Consumer loans
|
434
|
0.1
|
446
|
0.1
|
|||||||||||
|
Total loans receivable
|
445,196
|
100.0
|
%
|
379,698
|
100.0
|
%
|
|||||||||
|
Less:
|
|||||||||||||||
|
Loans in process
|
13,315
|
6,557
|
|||||||||||||
|
Deferred loan fees
|
586
|
658
|
|||||||||||||
|
Allowance
|
4,925
|
4,476
|
|||||||||||||
|
Total loans receivable, net
|
$
|
426,370
|
$
|
368,007
|
|||||||||||
Credit quality
Overall credit quality remained stable during first half of 2017. Total delinquent loans (including nonperforming delinquent loans) were $8.8 million at June 30, 2017, a reduction of $1.3 million from March 31, 2017 and $2.1 million from December 31, 2016. Total nonperforming loans were $6.9 million at June 30, 2017 compared to $7.4 million at March 31, 2017 and $7.0 million at December 31, 2016. Included in total delinquency and nonperforming loans is one large residential mortgage of $1.9 million that has been paid off, as a result of a short sale in July. The allowance for loan losses as a percentage of total loans was 1.14%, 1.15% and 1.20% at June 30, 2017, March 31, 2017 and December 31, 2016, respectively, while the allowance for loan losses as a percentage of non-performing loans increased to 71.21% at June 30, 2017 from 62.47% at March 31, 2017 and 64.13% at December 31, 2016. Non-performing loans to total loans declined to 1.60% at June 30, 2017 from 1.84% at March 31, 2017 and 1.87% at December 31, 2016.
Consumer deposit growth during the year
Total deposits at June 30, 2017 were $390.1 million compared with $362.3 million at December 31, 2016. Overall, deposits increased by $27.8 million, or 7.6% with growth occurring across most product types. Most of the growth occurred in the certificates of deposit as the Company utilized a deposit listing service to bring in $19.6 million in institutional funds. In addition, a promotional campaign was implemented to bring in more consumer deposits.
The following table summarizes deposit balances and composition at June 30, 2017 and December 31, 2016:
|
At
|
At
|
|||||||||||||||
|
(Dollars in thousands)
|
June 30, 2017
|
December 31, 2016
|
||||||||||||||
|
Noninterest demand
|
$
|
44,584
|
11.43
|
%
|
$
|
44,365
|
12.25
|
%
|
||||||||
|
Interest demand
|
95,196
|
24.41
|
99,879
|
27.57
|
||||||||||||
|
Savings
|
105,560
|
27.06
|
103,163
|
28.47
|
||||||||||||
|
Money Market
|
15,842
|
4.06
|
11,265
|
3.11
|
||||||||||||
|
Total demand deposits
|
261,182
|
66.96
|
258,672
|
71.40
|
||||||||||||
|
Certificates of Deposit
|
128,881
|
33.04
|
103,627
|
28.60
|
||||||||||||
|
Total Deposits
|
$
|
390,063
|
100.00
|
%
|
$
|
362,299
|
100.00
|
%
|
||||||||
CEO outlook:
"Reaching $500 million in assets during the quarter was a significant milestone for our Company," stated Michael A. Shriner, President and Chief Executive Officer. Mr. Shriner added, "As an organization, we are very proud of this accomplishment and the timeframe in which it was achieved. Continued growth in commercial loans has also had a significant, positive impact on our earnings."
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.
|
Contact:
|
Michael A. Shriner, President & CEO
|
|
(908) 647-4000
|
|
|
mshriner@millingtonbank.com
|
|
MSB FINANCIAL CORP
|
||||||||
|
(In Thousands, except for per share amount)
|
(Unaudited)
|
|||||||
|
Statement of Financial Condition Data:
|
06/30/2017
|
12/31/2016
|
||||||
|
Total assets
|
$
|
507,098
|
$
|
461,646
|
||||
|
|
||||||||
|
Cash and cash equivalents
|
9,034
|
21,382
|
||||||
|
|
||||||||
|
Loans receivable, net
|
426,370
|
368,007
|
||||||
|
|
||||||||
|
Securities held to maturity
|
42,441
|
44,104
|
||||||
|
|
||||||||
|
Deposits
|
390,063
|
362,299
|
||||||
|
|
||||||||
|
Federal Home Loan Bank advances
|
38,675
|
22,675
|
||||||
|
|
||||||||
|
Total stockholders' equity
|
74,989
|
73,185
|
||||||
|
Stock Information:
|
||||||||
|
Number of shares of common stock outstanding
|
5,737
|
5,714
|
||||||
|
Book value per share of common stock
|
$
|
13.07
|
$
|
12.81
|
||||
|
Closing market price
|
$
|
17.45
|
$
|
14.70
|
||||
|
(Unaudited)
For the three months
ended June 30, |
(Unaudited)
For the six months
ended June 30, |
|||||||||||||||
|
Summary of Operations:
(In Thousands, except for per share amounts)
|
2017
|
2016
|
2017
|
2016
|
||||||||||||
|
Total interest income
|
$
|
4,727
|
$
|
3,453
|
$
|
9,020
|
6,751
|
|||||||||
|
|
||||||||||||||||
|
Total interest expense
|
803
|
522
|
1,501
|
1,032
|
||||||||||||
|
|
||||||||||||||||
|
Net interest income
|
3,924
|
2,931
|
7,519
|
5,719
|
||||||||||||
|
|
||||||||||||||||
|
Provision for loan losses
|
300
|
190
|
495
|
320
|
||||||||||||
|
|
||||||||||||||||
|
Net interest income after provision for loan losses
|
3,624
|
2,741
|
7,024
|
5,399
|
||||||||||||
|
|
||||||||||||||||
|
Non-interest income
|
219
|
512
|
406
|
653
|
||||||||||||
|
|
||||||||||||||||
|
Non-interest expense
|
2,818
|
2,909
|
5,535
|
5,473
|
||||||||||||
|
|
||||||||||||||||
|
Income before taxes
|
1,025
|
344
|
1,895
|
579
|
||||||||||||
|
|
||||||||||||||||
|
Income tax expense
|
293
|
121
|
614
|
197
|
||||||||||||
|
|
||||||||||||||||
|
Net income
|
$
|
732
|
$
|
223
|
$
|
1,281
|
$
|
382
|
||||||||
|
|
||||||||||||||||
|
Net income per common share - basic
|
$
|
0.13
|
$
|
0.04
|
$
|
0.23
|
$
|
0.07
|
||||||||
|
Net income per common share - diluted
|
$
|
0.13
|
$
|
0.04
|
$
|
0.23
|
$
|
0.07
|
||||||||
|
|
||||||||||||||||
|
Weighted average number of shares - basic
|
5,540
|
5,743
|
5,530
|
5,744
|
||||||||||||
|
Weighted average number of shares - diluted
|
5,679
|
5,821
|
5,661
|
5,818
|
||||||||||||
|
Performance Ratios:
|
||||||||||||||||
|
Return on average assets annualized
|
0.59
|
%
|
0.23
|
%
|
0.54
|
%
|
0.20
|
%
|
||||||||
|
Return on average common equity annualized
|
3.91
|
%
|
1.15
|
%
|
3.44
|
%
|
0.99
|
%
|
||||||||
|
Net interest margin
|
3.35
|
%
|
3.17
|
%
|
3.32
|
%
|
3.15
|
%
|
||||||||
|
Efficiency ratio
|
68.02
|
%
|
84.49
|
%
|
69.83
|
%
|
85.89
|
%
|
||||||||
|
Operating expenses / average assets annualized
|
2.29
|
%
|
3.00
|
%
|
2.32
|
%
|
2.87
|
%
|
||||||||
|
For the three months ended
|
||||||||||||||||||||||||
|
06/30/2017
|
06/30/2016
|
|||||||||||||||||||||||
|
Average Balance Sheet
(In Thousands)
|
Average Balance
|
Interest
Income/ Expense |
Yield
|
Average
Balance |
Interest
Income/ Expense |
Yield
|
||||||||||||||||||
|
Interest-earning assets:
|
||||||||||||||||||||||||
|
Loans receivable
|
$
|
417,065
|
$
|
4,444
|
4.26
|
%
|
$
|
285,649
|
$
|
3,082
|
4.32
|
%
|
||||||||||||
|
Securities held to maturity
|
41,885
|
247
|
2.36
|
62,585
|
331
|
2.12
|
||||||||||||||||||
|
Other interest-earning assets
|
9,625
|
36
|
1.50
|
21,430
|
40
|
0.75
|
||||||||||||||||||
|
Total interest-earning assets
|
468,575
|
4,727
|
4.04
|
369,664
|
3,453
|
3.74
|
||||||||||||||||||
|
Allowance for loan loss
|
(4,695
|
)
|
(3,718
|
)
|
||||||||||||||||||||
|
Non-interest-earning assets
|
28,978
|
21,833
|
||||||||||||||||||||||
|
Total non-interest-earning assets
|
24,283
|
18,115
|
||||||||||||||||||||||
|
Total Assets
|
$
|
492,858
|
$
|
387,779
|
||||||||||||||||||||
|
Interest-bearing liabilities:
|
||||||||||||||||||||||||
|
Demand & money market
|
$
|
106,094
|
$
|
102
|
0.38
|
%
|
$
|
60,006
|
$
|
37
|
0.25
|
%
|
||||||||||||
|
Savings and club deposits
|
104,953
|
62
|
0.24
|
104,283
|
58
|
0.22
|
||||||||||||||||||
|
Certificates of deposit
|
122,855
|
415
|
1.35
|
85,702
|
244
|
1.14
|
||||||||||||||||||
|
Total interest-bearing deposits
|
333,902
|
579
|
0.69
|
249,991
|
339
|
0.54
|
||||||||||||||||||
|
Federal Home Loan Bank advances
|
37,715
|
224
|
2.38
|
22,675
|
183
|
3.23
|
||||||||||||||||||
|
Total interest-bearing liabilities
|
371,617
|
803
|
0.86
|
272,666
|
522
|
0.77
|
||||||||||||||||||
|
Non-interest-bearing deposit
|
43,030
|
33,964
|
||||||||||||||||||||||
|
Other non-interest-bearing liabilities
|
3,363
|
3,745
|
||||||||||||||||||||||
|
Total Liabilities
|
418,010
|
310,375
|
||||||||||||||||||||||
|
Equity
|
74,848
|
77,404
|
||||||||||||||||||||||
|
Total Liabilities and Equity
|
$
|
492,858
|
$
|
387,779
|
||||||||||||||||||||
|
Net Interest Spread
|
3,924
|
3.18
|
%
|
2,931
|
2.97
|
%
|
||||||||||||||||||
|
Net Interest Margin
|
3.35
|
%
|
3.17
|
%
|
||||||||||||||||||||
|
Ratio of Interest Earning Assets to
Interest Bearing Liabilities |
126.09
|
%
|
135.57
|
%
|
||||||||||||||||||||
|
For the six months ended
|
||||||||||||||||||||||||
|
06/30/2017
|
06/30/2016
|
|||||||||||||||||||||||
|
Average Balance Sheet
(In Thousands)
|
Average Balance
|
Interest
Income/
Expense
|
Yield
|
Average
Balance |
Interest
Income/
Expense
|
Yield
|
||||||||||||||||||
|
Interest-earning assets:
|
||||||||||||||||||||||||
|
Loans receivable
|
$
|
399,822
|
$
|
8,444
|
4.22
|
%
|
$
|
278,732
|
$
|
5,920
|
4.25
|
%
|
||||||||||||
|
Securities held to maturity
|
42,581
|
498
|
2.34
|
69,758
|
762
|
2.18
|
||||||||||||||||||
|
Other interest-earning assets
|
10,475
|
78
|
1.49
|
14,930
|
69
|
0.92
|
||||||||||||||||||
|
Total interest-earning assets
|
452,878
|
9,020
|
3.98
|
363,420
|
6,751
|
3.72
|
||||||||||||||||||
|
Allowance for loan loss
|
(4,610
|
)
|
(3,670
|
)
|
||||||||||||||||||||
|
Non-interest-earning assets
|
28,674
|
21,740
|
||||||||||||||||||||||
|
Total non-interest-earning assets
|
24,064
|
18,070
|
||||||||||||||||||||||
|
Total Assets
|
$
|
476,942
|
$
|
381,490
|
||||||||||||||||||||
|
Interest-bearing liabilities:
|
||||||||||||||||||||||||
|
Demand & money market
|
$
|
106,066
|
$
|
197
|
0.37
|
%
|
$
|
54,228
|
$
|
58
|
0.21
|
%
|
||||||||||||
|
Savings and club deposits
|
104,367
|
120
|
0.23
|
103,364
|
114
|
0.22
|
||||||||||||||||||
|
Certificates of deposit
|
114,729
|
764
|
1.33
|
85,070
|
481
|
1.13
|
||||||||||||||||||
|
Total interest-bearing deposits
|
325,162
|
1,081
|
0.66
|
242,662
|
653
|
0.54
|
||||||||||||||||||
|
Federal Home Loan Bank advances
|
33,874
|
420
|
2.48
|
26,214
|
379
|
2.89
|
||||||||||||||||||
|
Total interest-bearing liabilities
|
359,036
|
1,501
|
0.84
|
268,876
|
1,032
|
0.77
|
||||||||||||||||||
|
Non-interest-bearing deposit
|
40,440
|
31,793
|
||||||||||||||||||||||
|
Other non-interest-bearing liabilities
|
3,078
|
3,783
|
||||||||||||||||||||||
|
Total Liabilities
|
402,554
|
304,452
|
||||||||||||||||||||||
|
Equity
|
74,388
|
77,038
|
||||||||||||||||||||||
|
Total Liabilities and Equity
|
$
|
476,942
|
$
|
381,490
|
||||||||||||||||||||
|
Net Interest Spread
|
7,519
|
3.14
|
%
|
5,719
|
2.95
|
%
|
||||||||||||||||||
|
Net Interest Margin
|
3.32
|
%
|
3.15
|
%
|
||||||||||||||||||||
|
Ratio of Interest Earning Assets to
Interest Bearing Liabilities |
126.14
|
%
|
135.16
|
%
|
||||||||||||||||||||