MIDLAND PARK, NJ--(Marketwire - February 8, 2010) - Stewardship Financial Corporation (
NASDAQ:
SSFN), the holding company for Atlantic Stewardship Bank, reported net
income for the year ended December 31, 2009 of $3.6 million, or $0.54 per
diluted common share, compared to net income of $3.5 million, or $0.60 per
diluted common share, for the year ended December 31, 2008. For the three
months ended December 31, 2009 net income was $774,000, or $0.11 per
diluted common share, compared to net income of $423,000, or $0.07 per
diluted common share, for the same prior year period. All per share
calculations have been adjusted for 5% stock dividends paid in November
2009 and 2008.
"We are pleased to report that Stewardship Financial Corporation had
another profitable year despite facing economic and unprecedented
challenges in 2009," said Paul Van Ostenbridge, President and Chief
Executive Officer. Positives for 2009 included effective cost control
efforts, a relatively stable net interest margin, strong levels of
noninterest income, robust core deposit growth and a solid investment
portfolio. The effects of increases in net interest income and noninterest
income, including gains from the sale of mortgages, were largely offset by
increased costs associated with Federal Deposit Insurance Corporation
(FDIC) deposit insurance premiums.
The Corporation reported net interest income for the year ended December
31, 2009 of $23.3 million, representing an increase of 4.7% over the
comparable prior year amount. Net interest income and margin remained
strong during 2009 as a result of proactively managing funding costs in an
effort to mitigate the lower asset yields attributable to historically low
market rates. The reported net interest spread and margin for the year
ended December 31, 2009 of 3.45% and 3.89%, respectively, were comparable
to the net interest spread and margin of 3.43% and 4.00%, respectively, for
the prior year.
For both the years ended December 31, 2009 and 2008 the Corporation
recorded a provision for loan losses amounting to $3.6 million. While the
provision for loan losses in 2008 was a direct result of problems related
to a few commercial credit facilities, the current year provision for loan
losses is reflective of current economic conditions that have contributed
to an increase in loan delinquencies and the softness in the real estate
market. At December 31, 2009, the total allowance for loan losses amounted
to $6.9 million, or 1.50% of total loans, as compared to $5.2 million, or
1.18% of total loans, at December 31, 2008.
Van Ostenbridge commented, "Asset quality issues, caused by the economic
downturn which began in 2008, were a major area of concern for all of
2009." Non-performing loans amounted to 4.98% of total loans at December
31, 2009 compared to 1.46% at December 31, 2008. Van Ostenbridge went on
to state, "To address credit issues and help maintain profitability going
forward, management has been diligent in efforts to identify and resolve
nonperforming loans."
At the end of 2008, the Corporation sold its merchant servicing portfolio
and, as a result, a decline in both noninterest income and noninterest
expense is reflected for the year ended December 31, 2009.
As a result of increased attention to controlling operating costs,
noninterest expense declined in 2009 when compared to 2008. However,
offsetting decreases in certain expense line items was a significant
increase in FDIC insurance premiums for all insured financial institutions.
In addition to an industry-wide increase in regular assessment rates, FDIC
insurance premiums include a $300,000 special FDIC assessment imposed
during 2009.
At December 31, 2009 total assets were $663.8 million, compared to $611.8
million at December 31, 2008. The securities available for sale and held
to maturity portfolios together increased $31.9 million, primarily
reflecting the leverage strategy undertaken to invest the $10 million in
funds raised through the issuance of preferred stock under the Capital
Purchase Program (the "CPP"). Despite a difficult economic environment,
gross loans receivable grew $20.8 million, or 4.7%, to $460.5 million at
December 31, 2009. Included in assets at December 31, 2009 was
approximately $3.2 million for the FDIC mandated prepayment of insurance
premiums representing estimated FDIC assessments through December 31, 2012,
which will be reduced over the next three years as actual FDIC assessments
are incurred.
Deposits totaled $529.9 million at December 31, 2009. Deposits at December
31, 2008 of $506.5 million included $30.7 million of brokered CDs. After
the payoff of these brokered CDs, growth in core customer deposits totaled
$54.1 million, or over 11%. The early 2009 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 December 31, 2009 of $53.5 million includes
the increase from the $10 million received on January 30, 2009 under the
CPP. Van Ostenbridge summarized, "While we remain guardedly optimistic
about improvement in the economy and stabilization of real estate values,
the Corporation's strong capital position provides us with the ability to
withstand further challenges. In addition to our standard objectives of
growing core deposits and lending those funds in our communities, and the
resolution of credit issues, the Corporation has been investing in new
products and services to meet the increasingly sophisticated needs of our
commercial and retail customers."
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 $7.0
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.
Selected Consolidated Financial Information
(dollars in thousands, except per share amounts)
(unaudited)
December 31, September 30, December 31,
2009 2009 2008
------------- ------------- -------------
Selected Financial Condition
Data:
Cash and cash equivalents $ 8,871 $ 13,646 $ 12,814
Securities available for sale 103,026 90,460 90,023
Securities held to maturity 67,717 75,232 48,856
FHLB Stock 3,227 3,195 2,420
Loans receivable:
Loans receivable, gross 460,476 451,242 439,656
Allowance for loan losses (6,920) (7,249) (5,166)
Other, net (437) (441) (387)
------------- ------------- -------------
Loans receivable, net 453,119 443,552 434,103
Loans held for sale 660 1,018 394
Other assets 27,224 22,518 23,206
------------- ------------- -------------
Total assets $ 663,844 $ 649,621 $ 611,816
============= ============= =============
Total deposits $ 529,930 $ 514,612 $ 506,531
Other borrowings 54,600 53,900 36,900
Subordinated debentures 7,217 7,217 7,217
Securities sold under
agreements to repurchase 15,396 16,019 15,160
Other liabilities 3,190 3,801 3,212
Stockholders' equity 53,511 54,072 42,796
------------- ------------- -------------
Total liabilities and
stockholders' equity $ 663,844 $ 649,621 $ 611,816
============= ============= =============
Book value per common share $ 7.50 $ 7.60 $ 7.31
Equity to assets 8.06% 8.32% 6.99%
Asset Quality Data:
Nonaccrual loans $ 19,656 $ 14,536 $ 4,230
Loans past due 90 days or more
and accruing 415 728 353
Restructured loans 2,846 2,417 1,855
------------- ------------- -------------
Total nonperforming loans $ 22,917 $ 17,681 $ 6,438
============= ============= =============
Non-performing loans to total
loans 4.98% 3.92% 1.46%
Non-performing loans to total
assets 3.45% 2.72% 1.05%
Allowance for loan losses to
nonperforming loans 30.20% 41.00% 80.24%
Allowance for loan losses to
total gross loans 1.50% 1.61% 1.18%
All share data has been restated to include the effects of a 5% stock
dividend paid 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 year ended
December 31, December 31,
-------------------------- --------------------------
2009 2008 2009 2008
------------ ------------ ------------ ------------
Selected Operating
Data:
Interest income $ 8,531 $ 8,797 $ 34,156 $ 35,074
Interest expense 2,580 3,022 10,811 12,771
------------ ------------ ------------ ------------
Net interest
and dividend
income 5,951 5,775 23,345 22,303
Provision for
loan losses 1,200 2,050 3,575 3,585
------------ ------------ ------------ ------------
Net interest and
dividend income
after provision
for loan
losses 4,751 3,725 19,770 18,718
Noninterest
income:
Fees and service
charges 485 266 1,847 1,333
Bank owned life
insurance 84 82 322 326
Gain on sales
of mortgage
loans 22 37 294 193
Gain on calls
and sales of
securities 3 42 258 103
Merchant
processing - 347 118 1,417
Gain on sale of
merchant
portfolio - 509 - 509
Other 62 47 294 336
------------ ------------ ------------ ------------
Total
noninterest
income 656 1,330 3,133 4,217
Noninterest
expenses:
Salaries and
employee
benefits 2,000 2,051 8,264 8,129
Occupancy, net 460 448 1,858 1,802
Equipment 292 285 1,087 1,127
Data processing 336 312 1,218 1,209
FDIC insurance
premium 238 94 1,124 317
Charitable
contributions 208 153 619 627
Merchant
processing - 314 108 1,258
Other 818 926 3,512 3,517
------------ ------------ ------------ ------------
Total
noninterest
expenses 4,352 4,583 17,790 17,986
------------ ------------ ------------ ------------
Income before
income tax expense 1,055 472 5,113 4,949
Income tax expense 281 49 1,479 1,448
------------ ------------ ------------ ------------
Net income 774 423 3,634 3,501
Dividends on
preferred stock
and accretion 137 - 504 -
------------ ------------ ------------ ------------
Net income
available to
common
stockholders $ 637 $ 423 $ 3,130 $ 3,501
============ ============ ============ ============
Weighted avg. no.
of diluted common
shares 5,838,262 5,854,713 5,838,262 5,865,126
Diluted earnings
per common share $ 0.11 $ 0.07 $ 0.54 $ 0.60
Return on average
common equity 4.64% 3.99% 5.92% 8.34%
Return on average
assets 0.47% 0.28% 0.57% 0.58%
Yield on average
interest-earning
assets 5.52% 6.06% 5.65% 6.23%
Cost of average
interest-bearing
liabilities 2.06% 2.57% 2.20% 2.80%
------------ ------------ ------------ ------------
Net interest rate
spread 3.46% 3.49% 3.45% 3.43%
============ ============ ============ ============
Net interest margin 3.88% 3.99% 3.89% 4.00%
All share data has been restated to include the effects of a 5% stock
dividend paid in November 2009.
Contact Information: Contact:
Claire M. Chadwick
SVP and Chief Financial Officer
630 Godwin Avenue
Midland Park, NJ 07432
201-444-7100