MIDLAND PARK, NJ -- (MARKET WIRE) -- October 26, 2006 -- Stewardship Financial Corporation (
OTCBB:
SSFN) (the "Corporation"), parent of Atlantic Stewardship Bank, announced
today net income for the three (3) months ended September 30, 2006 of $1.23
million or $0.24 basic earnings per share, an increase of 5.7% and 4.3%
respectively, as compared to net income of $1.16 million, or $0.23 basic
earnings per share for the same three (3) month period in 2005. Fully
diluted earnings per share were $0.24 for the three (3) months ended
September 30, 2006 as compared to $0.23 for the three (3) months ended
September 30, 2005.
For the nine (9) months ended September 30, 2006, Stewardship Financial
Corporation reported net income of $3.50 million or $0.70 basic earnings
per share, an increase of 6.0% and 6.1% respectively, as compared to net
income of $3.30 million or $0.66 basic earnings per share for the same nine
(9) month period in 2005. Diluted earnings per share were $0.69 for the
nine (9) months ended September 30, 2006, an increase of 4.5% over the
diluted earnings per share of $0.66 for the nine (9) months ended September
30, 2005.
Per share calculations have been adjusted for a 5% stock dividend paid in
November 2005, a 4-for-3 stock split effective on July 1, 2005 and a 5%
stock dividend payable on November 15, 2006.
Stewardship Financial Corporation's President and Chief Executive Officer
Paul Van Ostenbridge stated, "We are pleased to report a record earnings
increase for the period ending September 30, 2006. Although the flat yield
curve and competitive deposit interest rate environment continue to
contribute to pressure on net interest margin, our earnings remain strong.
We are also proud to report that we have surpassed the milestone of $500
million in total assets."
Stewardship Financial Corporation's total assets reached $509.1 million at
September 30, 2006, compared to $473.6 million at September 30, 2005,
resulting in growth of 7.5%. Total loans increased 12.5% to $366.1 million
at September 30, 2006, compared to $325.6 million at September 30, 2005.
Total deposits were $426.7 million at September 30, 2006, compared to
$409.6 million a year ago, resulting in growth of 4.2%. Total
stockholders' equity increased 9.9% to $36.6 million at September 30, 2006,
compared to $33.3 million a year ago.
Stewardship Financial Corporation also announced that its wholly owned
subsidiary, Atlantic Stewardship Bank (the "Bank") has entered into an
agreement with Elan Financial Services ("Elan"), a national credit card
issuer. Under this agreement, Elan has agreed to purchase the Bank's
existing credit card portfolio, and subsequently will issue credit cards
for the Bank under the name of Atlantic Stewardship Bank. It is
anticipated that the settlement of the sale will occur in late October 2006
or early November 2006.
As of September 30, 2006, the Bank held approximately $3.5 million in
credit card receivables. Although the estimate is preliminary in nature
and may be subject to adjustment following the closing of the transaction,
the Corporation anticipates that it will recognize a gain for the fourth
quarter of 2006, net of income taxes, of approximately $400,000 to $500,000
as a result of the sale to Elan. In addition, the Bank will continue to
earn certain fees from ongoing portfolio activity.
In discussing the execution of the agreement with Elan, Mr. Van Ostenbridge
stated, "We are always looking for opportunities which will provide our
customers with the best in products and services. Elan is a leader in the
credit card payment and services industry and will be able to provide our
customers with a choice selection of credit card products, complimented by
superior customer service."
The Corporation also announced that it sold $17.3 million of available for
sale securities that were yielding less than 5 percent, resulting in an
after-tax charge of approximately $380,000. The proceeds were used to
purchase higher yielding securities and to fund loan growth. The
Corporation anticipates that the transaction will reduce exposure to future
interest rate risk and enhance long-term financial performance.
Stewardship Financial Corporation's subsidiary, the Atlantic Stewardship
Bank, has banking offices in Midland Park, Hawthorne (2 offices),
Montville, Pequannock, Ridgewood, Waldwick, and Wayne (3 offices), New
Jersey. The 11th branch is expected to open in Wyckoff, New Jersey during
the first quarter of 2007. The bank is known for tithing 10% of its
pre-tax profits to Christian and local charities. We invite you to visit
our website at
www.asbnow.com for additional information.
This 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 operation, gain on the sale of the Bank's credit card portfolio, the
results of the sale of other assets 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, the final determination, calculation and review of expected
results and the imposition of possible accounting adjustments thereto, 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
Financial Highlights
(unaudited)
(In thousands, except per share data)
Nine Months Ended Three Months Ended
September 30, September 30,
2006 2005 2006 2005
-------- -------- -------- --------
Selected Operating Data:
Total interest income $ 22,111 $ 18,176 $ 7,793 $ 6,461
Total interest expense 7,807 4,681 2,928 1,847
-------- -------- -------- --------
Net interest income before provision
for loan loss 14,304 13,495 4,865 4,614
Provision for loan loss 250 450 90 150
-------- -------- -------- --------
Net interest income after provision
for loan loss 14,054 13,045 4,775 4,464
(Losses) gains on sales of securities - - - -
Other noninterest income 2,885 2,399 983 854
-------- -------- -------- --------
2,885 2,399 983 854
Noninterest expense 11,509 10,318 3,868 3,552
-------- -------- -------- --------
Income before income tax expense 5,430 5,126 1,890 1,766
Income tax expense 1,929 1,824 665 607
-------- -------- -------- --------
Net income $ 3,501 $ 3,302 $ 1,225 $ 1,159
======== ======== ======== ========
Basic earnings per share $ 0.70 $ 0.66 $ 0.24 $ 0.23
Diluted earnings per share $ 0.69 $ 0.66 $ 0.24 $ 0.23
At September 30,
2006 2005
--------- ---------
Selected Financial Data:
Total assets $ 509,130 $ 473,593
Total loans, net of deferred loan fees 366,098 325,557
Allowance for loan losses 4,086 4,714
Total deposits 426,749 409,598
Stockholders' equity 36,600 33,312
At or for the nine
month period
ended September 30,
2006 2005
-------- --------
Selected Financial Ratios:
Annualized return on average assets (ROA) 0.96% 1.00%
Annualized return on average equity (ROE) 13.41% 13.83%
Tier 1 equity to total assets 8.56% 8.51%
Book value per share $ 7.29 $ 6.65
All share data has been restated to include the effect of a 5% stock
dividend paid in November, 2005, a 4 for 3 stock split issued July 1,
2005 and a 5% dividend payable November 15, 2006.
Contact Information: Contact:
Mary Beth Steiginga,
Assistant Secretary
630 Godwin Avenue
Midland Park, NJ 07432
201- 444-7100