MIDLAND PARK, NJ--(Marketwire - February 14, 2011) - Stewardship Financial Corporation (NASDAQ: SSFN), parent of Atlantic Stewardship Bank, reported net income for the
year ended December 31, 2010 of $1.2 million, or $0.12 per diluted common
share, compared to net income of $3.6 million, or $0.54 per diluted common
share, for the year ended December 31, 2009. For the three months ended
December 31, 2010 net income was $1.1 million, or $0.16 per diluted common
share, compared to net income of $774,000, or $0.11 per diluted common
share, for the same prior year period. After dividends on preferred stock,
the net income to the common shareholders was $683,000 for 2010 compared to
net income of $3.1 million for 2009. The earnings in the current year
periods reflect stable net interest income, improved noninterest income and
controlled noninterest expense but a higher provision for loan losses.
Although the level of nonperforming loans posed a considerable challenge
with a substantial impact on the Corporation's results for 2010, "some
improvement was seen in the past quarter, with a 7.6% decline in
nonperforming loans," reported Paul Van Ostenbridge, Stewardship Financial
Corporation's President and Chief Executive Officer. Nonperforming loans
were $22.6 million at December 31, 2010, a decline of $1.9 million from
$24.5 million at September 30, 2010. Nonperforming loans represented 5.01%
of total loans at year end, an improvement from 5.43% just three months
earlier and 5.88% at June 30, 2010. Van Ostenbridge continued, "Our
efforts have resulted in a positive trending in nonperforming loans."
For the three months ended December 31, 2010 the Corporation recorded a
$1.8 million provision for loan losses, or $9.6 million on a year to date
basis. Total allowance for loan losses at December 31, 2010 represented
1.88% of total loans compared to a ratio of 1.50% a year earlier. In
addition, at December 31, 2010 the ratio of allowance for loans losses to
nonperforming loans of 37.52% reflected consistent allowance coverage when
compared to a level of 38.09% as of September 30, 2010 and an improvement
from the level of 30.20% at December 31, 2009.
The Corporation reported net interest income for the year ended December
31, 2010 of $24.2 million, representing an increase of 3.7% over the
comparable prior year amount. As a result of the effects of nonperforming
loans and a decline in investment portfolio yields, the total asset yield
declined. Nevertheless, both net interest income and the net interest
margin remained strong during 2010 as the Corporation was able to mitigate
the lower asset yields by management and reduction in liability costs
through proactive deposit pricing. The reported net interest spread and
margin for the year ended December 31, 2010 of 3.57% and 3.89%,
respectively, were relatively comparable to the net interest spread and
margin of 3.45% and 3.89%, respectively, for the prior year.
Noninterest income for the fourth quarter of 2010 includes a $279,000 gain
realized on sale of available for sale securities conducted to reduce
certain extension risk in the portfolio. In addition, noninterest income
included an increase in gains from the sale of mortgage loans. The
Corporation experienced an increase in mortgage loan refinance activity due
to the Corporation's promotion of a 'no cost closing' program and the lower
rate environment in the latter half of 2010. This activity allowed the
Corporation to sell a larger volume of mortgages into the secondary market.
Despite increased costs associated with reducing the level of our problem
assets, including legal fees, the Corporation's commitment to controlling
noninterest expense continues. Expenses incurred for the year ended
December 31, 2010 were slightly below the 2009 level.
Total assets of $688.1 million at December 31, 2010 showed a modest 3.7%
growth rate when compared to $663.8 million of assets at December 31, 2009.
Our commitment to our market remains unchanged, but we remain aware of the
challenges that exist, as our customers continue to be cautious in their
borrowing needs.
Deposit growth for 2010 was strong, with deposits increasing $45.7 million
and totaling $575.6 million at December 31, 2010. The increase in deposits
enabled the Corporation to reduce other borrowings by $18.6 million since
December 31, 2009.
Capital levels, as well, remained strong, with a tier 1 leverage ratio of
8.58% and total risk based capital ratio of 13.45%, far exceeding the
regulatory requirements for a "well capitalized" institution.
Van Ostenbridge summarized, "During 2010, we showed a reduction in our
level of nonperforming loans while maintaining strong regulatory capital
levels. We acknowledge that our results continue to be influenced by the
loan loss provision, but we remain committed to addressing the workout of
problematic loans in 2011."
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 is currently
celebrating its twenty-fifth year of operation. To date, the Bank's total
tithe donations exceed $7.3 million.
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.
Stewardship Financial Corporation
Selected Consolidated Financial Information
(dollars in thousands, except per share amounts)
(unaudited)
December 31, September 30, December 31,
2010 2010 2009
----------- ------------ -----------
Selected Financial Condition Data:
Cash and cash equivalents $ 19,983 $ 25,158 $ 8,871
Securities available for sale 138,628 127,348 103,026
Securities held to maturity 45,394 47,434 67,717
FHLB Stock 2,497 2,497 3,227
Loans receivable:
Loans receivable, gross 451,867 450,507 460,476
Allowance for loan losses (8,490) (9,327) (6,920)
Other, net (132) (290) (437)
----------- ------------ -----------
Loans receivable, net 443,245 440,890 453,119
Loans held for sale 9,818 9,326 660
Other assets 28,553 27,409 27,224
----------- ------------ -----------
Total assets $ 688,118 $ 680,062 $ 663,844
=========== ============ ===========
Deposits:
Total deposits $ 575,603 $ 565,845 $ 529,930
Other borrowings 36,000 36,000 54,600
Subordinated debentures 7,217 7,217 7,217
Securities sold under agreements
to repurchase 14,642 15,241 15,396
Other liabilities 2,524 2,910 3,190
Stockholders' equity 52,132 52,849 53,511
----------- ------------ -----------
Total liabilities and
stockholders' equity $ 688,118 $ 680,062 $ 663,844
=========== ============ ===========
Book value per common share $ 7.24 $ 7.37 $ 7.50
Equity to assets 7.58% 7.77% 8.06%
Asset Quality Data:
Nonaccrual loans $ 22,500 $ 24,334 $ 19,656
Loans past due 90 days or more
and accruing - 10 415
Restructured loans 130 140 2,846
----------- ------------ -----------
Total nonperforming loans 22,630 24,484 22,917
Other real estate owned 615 356 -
----------- ------------ -----------
Total nonperforming assets $ 23,245 $ 24,840 $ 22,917
=========== ============ ===========
Non-performing loans to total
loans 5.01% 5.43% 4.98%
Non-performing assets to total
assets 3.38% 3.65% 3.45%
Allowance for loan losses to
nonperforming loans 37.52% 38.09% 30.20%
Allowance for loan losses to
total gross loans 1.88% 2.07% 1.50%
Stewardship Financial Corporation
Selected Consolidated Financial Information
(dollars in thousands, except per share amounts)
For the three months For the year
ended ended
December 31, December 31,
-------------------- --------------------
2010 2009 2010 2009
--------- --------- --------- ---------
Selected Operating Data:
Interest income $ 8,193 $ 8,531 $ 32,984 $ 34,156
Interest expense 2,039 2,580 8,778 10,811
--------- --------- --------- ---------
Net interest income 6,154 5,951 24,206 23,345
Provision for loan losses 1,820 1,200 9,575 3,575
--------- --------- --------- ---------
Net interest income after
provision for loan losses 4,334 4,751 14,631 19,770
Noninterest income:
Fees and service charges 504 485 1,990 1,847
Bank owned life insurance 82 84 331 322
Gain on sales of mortgage
loans 456 22 671 294
Gain on calls and sales of
securities 279 3 1,081 258
Merchant processing - - - 118
Other 49 62 314 294
--------- --------- --------- ---------
Total noninterest income 1,370 656 4,387 3,133
Noninterest expenses:
Salaries and employee
benefits 2,180 2,000 8,331 8,264
Occupancy, net 483 460 1,954 1,858
Equipment 258 292 1,129 1,087
Data processing 336 336 1,322 1,218
FDIC insurance premium 264 238 976 1,124
Charitable contributions 60 208 360 619
Merchant processing - - - 108
Other 1,166 818 3,878 3,512
--------- --------- --------- ---------
Total noninterest expenses 4,747 4,352 17,950 17,790
--------- --------- --------- ---------
Income before income taxes 957 1,055 1,068 5,113
Income tax (benefit) expense (130) 281 (165) 1,479
--------- --------- --------- ---------
Net income 1,087 774 1,233 3,634
Dividends on preferred stock
and accretion 138 137 550 504
--------- --------- --------- ---------
Net income available to
common stockholders $ 949 $ 637 $ 683 $ 3,130
========= ========= ========= =========
Weighted avg. no. of diluted
common shares 5,845,952 5,838,262 5,843,756 5,836,739
Diluted earnings per common
share $ 0.16 $ 0.11 $ 0.12 $ 0.54
Return on average common
equity 7.07% 4.64% 1.27% 5.92%
Return on average assets 0.62% 0.47% 0.18% 0.57%
Yield on average
interest-earning assets 5.13% 5.52% 5.27% 5.65%
Cost of average
interest-bearing
liabilities 1.52% 2.06% 1.70% 2.20%
--------- --------- --------- ---------
Net interest rate spread 3.61% 3.46% 3.57% 3.45%
========= ========= ========= =========
Net interest margin 3.87% 3.88% 3.89% 3.89%
Contact Information: Contact:
Claire M. Chadwick
SVP and Chief Financial Officer
630 Godwin Avenue
Midland Park, NJ 07432
201-444-7100