MILLINGTON, N.J., Jan. 31, 2017 (GLOBE NEWSWIRE) -- MSB Financial Corp. (NASDAQ:MSBF) (the “Company”), parent company of Millington Bank, reported today the results of its operations for the three and twelve months ended December 31, 2016.
The Company reported net income of $478,000, or $0.09 per diluted common share for the three months ended December 31, 2016, compared to $2,000, or zero per diluted common share for the three months ended December 31, 2015. Net income for the full 2016 year was $1.2 million, or $0.20 per diluted common share compared to net income of $443,000, or $0.08 per diluted common share for the full year of 2015.
Highlights for the full year 2016:
- Net interest margin improved 18 basis points to 3.13% from 2015
- Loan growth was 40.3% year over year driven by commercial real estate and commercial lending
- Deposit growth was $99.7 million or 38% during the year
- Efficiency ratio improved from 93.13% to 79.90% driven by an increase in net interest income year over year
Growth in net interest income and margin reflect growth in commercial loans
Net interest income grew $1.9 million or 19.0% to $12.0 million for the year ended December 31, 2016 compared to $10.1 million for the year ended December 31, 2015. Net interest margin for the year ended December 31, 2016 was 3.13%, an improvement of 18 basis points, compared to 2.95% for the year ended December 31, 2015. Net interest income and net interest margin both increased primarily due to the Company’s loan growth in the commercial real estate and commercial loan portfolios.
Strong organic loan growth year over year
At December 31, 2016, the Company’s net loan portfolio totaled $368.0 million, an increase of $105.7 million, or 40.3%, compared to $262.3 million at December 31, 2015. Included in this increase was $67.4 million in organic loan growth and $38.3 million in purchased and participation loans. These loans consisted of $34.7 million in commercial real estate loans and $3.6 million in one-to-four family residential mortgages. The commercial and multi-family real estate loan segment had significant growth during the year as the Company continues to focus on building commercial relationships and further diversifying its loan portfolio.
The following table summarizes loan balances and composition at December 31, 2016 and December 31, 2015:
At | At | ||||||||||
December 31, | December 31, | ||||||||||
(In thousands) | 2016 | 2015 | |||||||||
Residential mortgage: | |||||||||||
One-to-four family | $ | 160,534 | 42.3 | % | $ | 154,624 | 57.1 | % | |||
Home equity | 32,262 | 8.5 | 35,002 | 12.9 | |||||||
Total residential mortgage | 192,796 | 50.8 | 189,626 | 70.0 | |||||||
Commercial and multi-family real estate | 124,656 | 32.8 | 59,642 | 22.0 | |||||||
Construction | 16,554 | 4.4 | 10,895 | 4.0 | |||||||
Commercial and industrial | 45,246 | 11.9 | 10,275 | 3.8 | |||||||
Total commercial loans | 186,456 | 49.1 | 80,812 | 29.8 | |||||||
. | |||||||||||
Consumer loans | 446 | 0.1 | 493 | 0.2 | |||||||
Total loans receivable | 379,698 | 100.0 | % | 270,931 | 100.0 | % | |||||
Less: | |||||||||||
Loans in process | 6,557 | 4,600 | |||||||||
Deferred loan fees | 658 | 417 | |||||||||
Allowance | 4,476 | 3,602 | |||||||||
Total loans receivable, net | $ | 368,007 | $ | 262,312 | |||||||
Deposit growth attributable to stronger business relationships
Total deposits at December 31, 2016 were $362.3 million compared with $262.6 million at December 31, 2015. Overall, deposits increased by $99.7 million, or 38.0% with most of the growth occurring in interest demand deposits, which increased $58.0 million or 138.4%. Noninterest demand deposits also increased $16.2 million, or 57.5%. Most of the growth in these two categories continues to be attributable to developing stronger relationships with our commercial and small business customers.
The following table summarizes deposit balances and composition at December 31, 2016 and December 31, 2015:
At | At | |||||||||||
(Dollars in thousands) | December 31, 2016 | December 31, 2015 | ||||||||||
Noninterest demand | $ | 44,365 | 12.25 | % | $ | 28,173 | 10.73 | % | ||||
Interest demand | 99,879 | 27.57 | 41,893 | 15.95 | ||||||||
Savings | 103,163 | 28.47 | 102,196 | 38.92 | ||||||||
Money Market | 11,265 | 3.11 | 4,928 | 1.88 | ||||||||
Total demand deposits | 258,672 | 71.40 | 177,190 | 67.48 | ||||||||
Certificates of Deposit | 103,627 | 28.60 | 85,408 | 32.52 | ||||||||
Total Deposits | $ | 362,299 | 100.00 | % | $ | 262,598 | 100.00 | % | ||||
CEO outlook:
“I am very proud of our entire staff and Board of Directors for the additional effort set forth to ensure that the Company executed on its 2016 strategic plan. What we accomplished in the past 12 months would not have been possible without a total team effort,” stated Michael A. Shriner, President and Chief Executive Officer.
Mr. Shriner added, “We are looking forward to continuing this momentum in 2017. Relationship banking was the driving force behind our recent success, so we will strive to further develop those relationships, as well as fostering new ones.”
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.
MSB FINANCIAL CORP | |||||||
(In Thousands, except for per share amount) | (Unaudited) | ||||||
Statement of Financial Condition Data: | 12/31/2016 | 12/31/2015 | |||||
Total assets | $ | 461,646 | $ | 375,690 | |||
Cash and cash equivalents | 21,382 | 12,303 | |||||
Loans receivable, net | 368,007 | 262,312 | |||||
Securities held to maturity | 44,104 | 78,995 | |||||
Deposits | 362,299 | 262,598 | |||||
Federal Home Loan Bank advances | 22,675 | 32,675 | |||||
Total stockholders' equity | 73,185 | 76,363 | |||||
Stock Information: | |||||||
Number of shares of common stock outstanding | 5,714 | 5,954 | |||||
Book value per share of common stock | $ | 12.81 | $ | 12.83 | |||
Closing market price | $ | 14.70 | $ | 12.50 | |||
(Unaudited) For the three months ended December 31, | For the twelve months ended December 31, | ||||||||||||
Summary of Operations: (In Thousands, except for per share amounts) | 2016 | 2015 | 2016 | 2015 | |||||||||
Total interest income | $ | 3,949 | $ | 3,123 | $ | 14,210 | $ | 12,206 | |||||
Total interest expense | 649 | 522 | 2,247 | 2,156 | |||||||||
Net interest income | 3,300 | 2,601 | 11,963 | 10,050 | |||||||||
Provision for loan losses | 300 | 90 | 800 | 113 | |||||||||
Net interest income after provision for loan losses | 3,000 | 2,511 | 11,163 | 9,937 | |||||||||
Non-interest income | 205 | 210 | 1,041 | 714 | |||||||||
Non-interest expense | 2,417 | 2,724 | 10,390 | 10,024 | |||||||||
Income before taxes | 788 | (3 | ) | 1,814 | 627 | ||||||||
Income tax expense | 310 | (5 | ) | 653 | 184 | ||||||||
Net income | $ | 478 | $ | 2 | $ | 1,161 | $ | 443 | |||||
Net income per common share - basic | $ | 0.09 | $ | - | $ | 0.21 | 0.08 | ||||||
Net income per common share - diluted | $ | 0.09 | $ | - | $ | 0.20 | 0.08 | ||||||
Weighted average number of shares - basic | 5,510 | 5,737 | 5,646 | 5,685 | |||||||||
Weighted average number of shares - diluted | 5,596 | 5,786 | 5,723 | 5,722 | |||||||||
Performance Ratios: | |||||||||||||
Return on average assets annualized | 0.44 | % | 0.00 | % | 0.29 | % | 0.12 | % | |||||
Return on average common equity annualized | 2.62 | % | 0.01 | % | 1.54 | % | 0.79 | % | |||||
Net interest margin | 3.19 | % | 2.96 | % | 3.13 | % | 2.95 | % | |||||
Efficiency ratio | 68.96 | % | 96.91 | % | 79.90 | % | 93.13 | % | |||||
Operating expenses / average assets annualized | 2.21 | % | 2.92 | % | 2.58 | % | 2.77 | % | |||||
For the three months ended | |||||||||||||||||||
12/31/2016 | 12/31/2015 | ||||||||||||||||||
Average Balance Sheet (In Thousands) | Average Balance | Interest Income/ Expense | Yield | Average Balance | Interest Income/ Expense | Yield | |||||||||||||
Interest-earning assets: | |||||||||||||||||||
Loans Receivable | $ | 343,684 | $ | 3,648 | 4.25 | % | $ | 261,090 | $ | 2,660 | 4.08 | % | |||||||
Securities held to maturity | 44,426 | 255 | 2.30 | 79,112 | 438 | 2.21 | |||||||||||||
Other interest-earning assets | 25,900 | 46 | 0.71 | 11,490 | 25 | 0.87 | |||||||||||||
Total interest-earning assets | 414,010 | 3,949 | 3.82 | 351,692 | 3,123 | 3.55 | |||||||||||||
Allowance for Loan Loss | (4,193 | ) | (3,631 | ) | |||||||||||||||
Non-interest-earning assets | 28,015 | 24,961 | |||||||||||||||||
Total non-interest-earning assets | 23,822 | 21,330 | |||||||||||||||||
Total Assets | $ | 437,832 | $ | 373,022 | |||||||||||||||
Interest-bearing liabilities: | |||||||||||||||||||
NOW & Money Market | $ | 97,510 | $ | 82 | 0.34 | % | $ | 44,789 | $ | 19 | 0.17 | % | |||||||
Savings and club deposits | 104,383 | 59 | 0.23 | 102,156 | 58 | 0.23 | |||||||||||||
Certificates of deposit | 98,833 | 324 | 1.31 | 82,741 | 241 | 1.17 | |||||||||||||
Total interest-bearing deposits | 300,726 | 465 | 0.62 | 229,686 | 318 | 0.55 | |||||||||||||
Federal Home Loan Bank advances | 22,675 | 184 | 3.25 | 32,675 | 204 | 2.50 | |||||||||||||
Total interest-bearing liabilities | 323,401 | 649 | 0.80 | 262,361 | 522 | 0.80 | |||||||||||||
Non-interest-bearing deposit | 38,014 | 30,462 | |||||||||||||||||
Other non-interest-bearing liabilities | 3,374 | 3,504 | |||||||||||||||||
Total Liabilities | 364,789 | 296,327 | |||||||||||||||||
Equity | 73,043 | 76,695 | |||||||||||||||||
Total Liabilities and Equity | $ | 437,832 | $ | 373,022 | |||||||||||||||
Net Interest Spread | 3,300 | 3.02 | % | 2,601 | 2.75 | % | |||||||||||||
Net Interest Margin | 3.19 | % | 2.96 | % | |||||||||||||||
Ratio of Interest Earning Assets to | |||||||||||||||||||
Interest Bearing Liabilities | 128.02 | % | 134.05 | % | |||||||||||||||
For the year ended | |||||||||||||||||||
12/31/2016 | 12/31/2015 | ||||||||||||||||||
Average Balance Sheet (In Thousands) | Average Balance | Interest Income/ Expense | Yield | Average Balance | Interest Income/ Expense | Yield | |||||||||||||
Interest-earning assets: | |||||||||||||||||||
Loans Receivable | $ | 301,764 | $ | 12,745 | 4.22 | % | $ | 247,997 | $ | 10,376 | 4.18 | % | |||||||
Securities held to maturity | 57,743 | 1,293 | 2.24 | 79,868 | 1,726 | 2.16 | |||||||||||||
Other interest-earning assets | 22,334 | 172 | 0.77 | 12,880 | 104 | 0.81 | |||||||||||||
Total interest-earning assets | 381,841 | 14,210 | 3.72 | 340,745 | 12,206 | 3.58 | |||||||||||||
Allowance for Loan Loss | (3,861 | ) | (3,593 | ) | |||||||||||||||
Non-interest-earning assets | 24,421 | 25,066 | |||||||||||||||||
Total non-interest-earning assets | 20,560 | 21,473 | |||||||||||||||||
Total Assets | $ | 402,401 | $ | 362,218 | |||||||||||||||
Interest-bearing liabilities: | |||||||||||||||||||
NOW & Money Market | $ | 71,843 | $ | 200 | 0.28 | % | $ | 46,493 | $ | 75 | 0.16 | % | |||||||
Savings and club deposits | 103,570 | 230 | 0.22 | 101,106 | 223 | 0.22 | |||||||||||||
Certificates of deposit | 89,609 | 1,071 | 1.20 | 86,948 | 1,064 | 1.22 | |||||||||||||
Total interest-bearing deposits | 265,022 | 1,501 | 0.57 | 234,547 | 1,362 | 0.58 | |||||||||||||
Federal Home Loan Bank advances | 24,435 | 746 | 3.05 | 34,087 | 794 | 2.33 | |||||||||||||
Total interest-bearing liabilities | 289,457 | 2,247 | 0.78 | 268,634 | 2,156 | 0.80 | |||||||||||||
Non-interest-bearing deposit | 34,026 | 34,248 | |||||||||||||||||
Other non-interest-bearing liabilities | 3,591 | 3,135 | |||||||||||||||||
Total Liabilities | 327,074 | 306,017 | |||||||||||||||||
Equity | 75,327 | 56,201 | |||||||||||||||||
Total Liabilities and Equity | $ | 402,401 | $ | 362,218 | |||||||||||||||
Net Interest Spread | 11,963 | 2.94 | % | 10,050 | 2.78 | % | |||||||||||||
Net Interest Margin | 3.13 | % | 2.95 | % | |||||||||||||||
Ratio of Interest Earning Assets to | |||||||||||||||||||
Interest Bearing Liabilities | 131.92 | % | 126.84 | % |