July 31, 2018 |
Date of Report |
(Date of earliest event reported) |
MSB Financial Corp. |
(Exact name of Registrant as specified in its Charter) |
Maryland | 001-37506 | 34-1981437 | ||
(State or other jurisdiction of incorporation) | (SEC Commission File No.) | (IRS Employer Identification Number) |
1902 Long Hill Road, Millington, New Jersey | 07946-0417 |
(Address of principal executive offices) | (Zip Code) |
Registrant's telephone number, including area code: | (908) 647-4000 |
Not Applicable |
(Former name or former address, if changed since last Report) |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: |
☐ | Written communications pursuant to Rule 425 under the Securities Act |
☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act |
☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act |
☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act |
Item 2.02 | Results of Operations and Financial Condition |
Item 9.01 | Financial Statements and Exhibits |
Exhibit Number | Description | |
99 |
MSB FINANCIAL CORP. | |||
By: | /s/ Michael A. Shriner | ||
Date: July 31, 2018 | Michael A. Shriner President and Chief Executive Officer |
• | Return on average assets was 0.87% for the three months ended June 30, 2018 compared to 0.59% for the three months ended June 30, 2017 and return on average equity was 7.17% for the three months ended June 30, 2018 compared to 3.91% for the three months ended June 30, 2017. |
• | Net interest margin decreased 11 basis points to 3.24% for the quarter ended June 30, 2018 from 3.35% for the quarter ended June 30, 2017 due to a change in deposit pricing as competition for deposits has increased. |
• | The efficiency ratio, which is calculated by dividing non-interest expense by the sum of net interest income and non-interest income, improved to 62.49% for the quarter ended June 30, 2018 from 68.02% for the quarter ended June 30, 2017 driven by an increase in net interest income year over year. |
• | Non-performing assets represented 0.69% of total assets at June 30, 2018 compared with 0.73% at December 31, 2017. The allowance for loan losses as a percentage of total non-performing loans was 135.53% at June 30, 2018 compared to 130.99% at December 31, 2017. |
• | The Company’s balance sheet reflected total asset growth of $38.2 million at June 30, 2018, compared to December 31, 2017, improving asset quality, and capital levels that exceeded regulatory standards for a well-capitalized institution. |
• | The effective tax rate improved to 24.7% for the quarter ended June 30, 2018 compared to 28.6% for the quarter ended June 30, 2017 primarily due to the passage of the Tax Cuts and Jobs Act. |
Selected Financial Ratios | ||||||||||||||||||||
(unaudited; annualized where applicable) | ||||||||||||||||||||
As of or for the quarter ended: | 6/30/2018 | 3/31/2018 | 12/31/2017 | 9/30/2017 | 6/30/2017 | |||||||||||||||
Return on average assets | 0.87 | % | 0.74 | % | 0.20 | % | 0.90 | % | 0.59 | % | ||||||||||
Return on average equity | 7.17 | % | 5.65 | % | 1.48 | % | 6.31 | % | 3.91 | % | ||||||||||
Net interest margin | 3.24 | % | 3.24 | % | 3.30 | % | 3.37 | % | 3.35 | % | ||||||||||
Net loans / deposit ratio | 113.64 | % | 110.85 | % | 105.46 | % | 116.04 | % | 109.31 | % | ||||||||||
Shareholders' equity / total assets | 11.39 | % | 12.37 | % | 12.97 | % | 13.39 | % | 14.79 | % | ||||||||||
Efficiency ratio | 62.49 | % | 66.29 | % | 62.26 | % | 64.21 | % | 68.02 | % | ||||||||||
Book value per common share | $ | 12.43 | $ | 12.63 | $ | 12.66 | $ | 12.57 | $ | 13.07 |
Condensed Consolidated Statements of Income (unaudited) | ||||||||||||||||||||
(dollars in thousands, except for per share data) | ||||||||||||||||||||
For the quarter ended: | 6/30/2018 | 3/31/2018 | 12/31/2017 | 9/30/2017 | 6/30/2017 | |||||||||||||||
Net interest income | $ | 4,431 | $ | 4,302 | $ | 4,325 | $ | 4,190 | $ | 3,924 | ||||||||||
Provision for loan losses | 90 | 90 | 200 | 490 | 300 | |||||||||||||||
Net interest income after provision for loan losses | 4,341 | 4,212 | 4,125 | 3,700 | 3,624 | |||||||||||||||
Other income | 208 | 204 | 211 | 205 | 219 | |||||||||||||||
Other expense | 2,899 | 2,987 | 2,824 | 2,822 | 2,818 | |||||||||||||||
Income before income taxes | 1,650 | 1,429 | 1,512 | 1,083 | 1,025 | |||||||||||||||
Income taxes (benefit) | 407 | 407 | 1,240 | (86 | ) | 293 | ||||||||||||||
Net income | $ | 1,243 | $ | 1,022 | $ | 272 | $ | 1,169 | $ | 732 | ||||||||||
Earnings per common share: | ||||||||||||||||||||
Basic | $ | 0.23 | $ | 0.19 | $ | 0.05 | $ | 0.21 | $ | 0.13 | ||||||||||
Diluted | $ | 0.23 | $ | 0.19 | $ | 0.05 | $ | 0.21 | $ | 0.13 | ||||||||||
Weighted average common shares outstanding: | ||||||||||||||||||||
Basic | 5,331,090 | 5,470,349 | 5,577,314 | 5,563,938 | 5,539,796 | |||||||||||||||
Diluted | 5,375,090 | 5,507,443 | 5,588,598 | 5,574,535 | 5,679,012 |
• | Balance sheet growth, with total assets amounting to $601.2 million at June 30, 2018, an increase of $38.2 million, or 6.79%, compared to December 31, 2017. |
• | The Company’s total gross loans receivable were $515.3 million at June 30, 2018, an increase of $36.5 million, or 7.6%, from December 31, 2017. |
• | Securities held to maturity were $44.8 million at June 30, 2018, an increase of $6.3 million, or 16.3%, compared to December 31, 2017. |
• | Deposits were relatively flat totaling $448.5 million at June 30, 2018 compared to $448.9 million at December 31, 2017. |
• | Borrowings totaled $82.2 million at June 30, 2018, an increase of $44.5 million, or 118.1%, compared to $37.7 million at December 31, 2017. |
Condensed Consolidated Statements of Condition (unaudited) | ||||||||||||||||||||
(in thousands) | ||||||||||||||||||||
At: | 6/30/2018 | 3/31/2018 | 12/31/2017 | 9/30/2017 | 6/30/2017 | |||||||||||||||
Cash and due from banks | $ | 1,654 | $ | 1,871 | $ | 2,030 | $ | 1,800 | $ | 1,839 | ||||||||||
Interest-earning demand deposits with banks | 14,660 | 15,484 | 20,279 | 6,971 | 7,195 | |||||||||||||||
Securities held to maturity | 44,770 | 36,375 | 38,482 | 40,752 | 42,441 | |||||||||||||||
Loans receivable, net of allowance | 509,689 | 480,916 | 473,405 | 461,285 | 426,370 | |||||||||||||||
Premises and equipment | 8,461 | 8,580 | 8,698 | 8,804 | 8,902 | |||||||||||||||
Federal home Loan Bank of New York stock, at cost | 4,212 | 3,049 | 2,131 | 3,512 | 2,263 | |||||||||||||||
Bank owned life insurance | 14,392 | 14,294 | 14,197 | 14,097 | 13,996 | |||||||||||||||
Accrued interest receivable | 1,754 | 1,642 | 1,607 | 1,548 | 1,402 | |||||||||||||||
Other assets | 1,657 | 1,816 | 2,211 | 2,988 | 2,690 | |||||||||||||||
Total assets | $ | 601,249 | $ | 564,027 | $ | 563,040 | $ | 541,757 | $ | 507,098 | ||||||||||
Deposits | $ | 448,512 | $ | 433,843 | $ | 448,913 | $ | 397,510 | $ | 390,063 | ||||||||||
Borrowings | 82,175 | 58,075 | 37,675 | 68,375 | 38,675 | |||||||||||||||
Other liabilities | 2,056 | 2,350 | 3,427 | 3,332 | 3,371 | |||||||||||||||
Shareholders' equity | 68,506 | 69,759 | 73,025 | 72,540 | 74,989 | |||||||||||||||
Total liabilities and shareholders' equity | $ | 601,249 | $ | 564,027 | $ | 563,040 | $ | 541,757 | $ | 507,098 |
Loans (unaudited) | ||||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||
At quarter ended: | 6/30/2018 | 3/31/2018 | 12/31/2017 | 9/30/2017 | 6/30/2017 | |||||||||||||||
Residential mortgage: | ||||||||||||||||||||
One-to-four family | $ | 151,372 | $ | 154,576 | $ | 157,876 | $ | 161,679 | $ | 164,448 | ||||||||||
Home equity | 26,174 | 27,051 | 26,803 | 27,409 | 29,021 | |||||||||||||||
Total residential mortgage | 177,546 | 181,627 | 184,679 | 189,088 | 193,469 | |||||||||||||||
Commercial and multi-family real estate | 214,653 | 195,951 | 196,681 | 184,791 | 153,984 | |||||||||||||||
Construction | 48,423 | 49,397 | 43,718 | 36,002 | 29,623 | |||||||||||||||
Commercial and industrial | 94,140 | 82,712 | 73,465 | 73,409 | 67,686 | |||||||||||||||
Total commercial loans | 357,216 | 328,060 | 313,864 | 294,202 | 251,293 | |||||||||||||||
Consumer loans | 608 | 595 | 618 | 659 | 434 | |||||||||||||||
Total loans receivable | 535,370 | 510,282 | 499,161 | 483,949 | 445,196 | |||||||||||||||
Less: | ||||||||||||||||||||
Loans in process | 19,594 | 23,398 | 19,868 | 16,864 | 13,315 | |||||||||||||||
Deferred loan fees | 491 | 462 | 474 | 525 | 586 | |||||||||||||||
Allowance | 5,596 | 5,506 | 5,414 | 5,275 | 4,925 | |||||||||||||||
Total loans receivable, net | $ | 509,689 | $ | 480,916 | $ | 473,405 | $ | 461,285 | $ | 426,370 |
(dollars in thousands, unaudited) | ||||||||||||||||||||
As of or for the quarter ended: | 6/30/2018 | 3/31/2018 | 12/31/2017 | 9/30/2017 | 6/30/2017 | |||||||||||||||
Non-accrual loans | $ | 3,430 | $ | 3,548 | $ | 3,975 | $ | 4,071 | $ | 6,916 | ||||||||||
Loans 90 days or more past due and still accruing | 699 | 1,266 | 158 | 374 | — | |||||||||||||||
Total non-performing loans | $ | 4,129 | $ | 4,814 | $ | 4,133 | $ | 4,445 | $ | 6,916 | ||||||||||
Non-performing assets / total assets | 0.69 | % | 0.85 | % | 0.73 | % | 0.82 | % | 1.36 | % | ||||||||||
Non-performing loans / total loans | 0.80 | % | 0.99 | % | 0.86 | % | 0.95 | % | 1.60 | % | ||||||||||
Net charge-offs (recoveries) | $ | — | $ | (2 | ) | $ | 61 | $ | 140 | $ | 1 | |||||||||
Net charge-offs (recoveries) / average loans (annualized) | — | % | — | % | 0.05 | % | 0.13 | % | — | % | ||||||||||
Allowance for loan loss / total loans | 1.09 | % | 1.13 | % | 1.13 | % | 1.13 | % | 1.14 | % | ||||||||||
Allowance for loan losses / non-performing loans | 135.53 | % | 114.37 | % | 130.99 | % | 118.69 | % | 71.21 | % | ||||||||||
Total assets | $ | 601,249 | $ | 564,027 | $ | 563,040 | $ | 541,757 | $ | 507,098 | ||||||||||
Gross loans, including ALLL | $ | 515,285 | $ | 486,422 | $ | 478,819 | $ | 466,560 | $ | 431,295 | ||||||||||
Average loans | $ | 500,959 | $ | 483,255 | $ | 472,388 | $ | 446,383 | $ | 417,065 | ||||||||||
Allowance for loan losses | $ | 5,596 | $ | 5,506 | $ | 5,414 | $ | 5,275 | $ | 4,925 |
Deposits (unaudited) | ||||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||
At quarter ended: | 6/30/2018 | 3/31/2018 | 12/31/2017 | 9/30/2017 | 6/30/2017 | |||||||||||||||
Demand: | ||||||||||||||||||||
Non-interest bearing | $ | 42,687 | $ | 36,751 | $ | 36,919 | $ | 40,504 | $ | 44,584 | ||||||||||
Interest-bearing | 153,968 | 148,888 | 155,199 | 107,419 | 95,196 | |||||||||||||||
Savings | 109,254 | 109,215 | 105,106 | 108,249 | 105,560 | |||||||||||||||
Money market | 14,381 | 20,251 | 27,350 | 16,517 | 15,842 | |||||||||||||||
Time | 128,222 | 118,738 | 124,339 | 124,821 | 128,881 | |||||||||||||||
Total deposits | $ | 448,512 | $ | 433,843 | $ | 448,913 | $ | 397,510 | $ | 390,063 |
Condensed Consolidated Average Statements of Condition (unaudited) | ||||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||
For the quarter ended: | 6/30/2018 | 3/31/2018 | 12/31/2017 | 9/30/2017 | 6/30/2017 | |||||||||||||||
Loans | $ | 500,959 | $ | 483,255 | $ | 472,388 | $ | 446,383 | $ | 417,065 | ||||||||||
Securities held to maturity | 36,494 | 37,661 | 39,899 | 41,423 | 41,885 | |||||||||||||||
Allowance for loan losses | (5,538 | ) | (5,461 | ) | (5,376 | ) | (4,922 | ) | (4,695 | ) | ||||||||||
All other assets | 38,053 | 38,851 | 41,886 | 38,545 | 38,603 | |||||||||||||||
Total assets | $ | 569,968 | $ | 554,306 | $ | 548,797 | $ | 521,429 | $ | 492,858 | ||||||||||
Non-interest bearing deposits | $ | 38,903 | $ | 36,211 | $ | 43,336 | $ | 44,970 | $ | 43,030 | ||||||||||
Interest-bearing deposits | 385,047 | 390,522 | 375,098 | 350,589 | 333,902 | |||||||||||||||
Borrowings | 74,192 | 53,191 | 53,844 | 47,788 | 37,715 | |||||||||||||||
Other liabilities | 2,495 | 1,972 | 3,104 | 3,964 | 3,363 | |||||||||||||||
Stockholders' Equity | 69,331 | 72,410 | 73,415 | 74,118 | 74,848 | |||||||||||||||
Total liabilities and shareholders' equity | $ | 569,968 | $ | 554,306 | $ | 548,797 | $ | 521,429 | $ | 492,858 | ||||||||||
Contact: | Michael A. Shriner, President & CEO |
(908) 647-4000 | |
mshriner@millingtonbank.com |
MSB Financial Corp. and Subsidiaries | ||||||
Consolidated Statements of Financial Condition | ||||||
At June 30, 2018 | At December 31, 2017 | |||||
(Dollars in thousands, except per share amounts) | ||||||
Cash and due from banks | $ | 1,654 | $ | 2,030 | ||
Interest-earning demand deposits with banks | 14,660 | 20,279 | ||||
Cash and Cash Equivalents | 16,314 | 22,309 | ||||
Securities held to maturity (fair value of $43,749 and $38,255, respectively) | 44,770 | 38,482 | ||||
Loans receivable, net of allowance for loan losses of $5,596 and $5,414, respectively | 509,689 | 473,405 | ||||
Premises and equipment | 8,461 | 8,698 | ||||
Federal Home Loan Bank of New York stock, at cost | 4,212 | 2,131 | ||||
Bank owned life insurance | 14,392 | 14,197 | ||||
Accrued interest receivable | 1,754 | 1,607 | ||||
Other assets | 1,657 | 2,211 | ||||
Total Assets | $ | 601,249 | $ | 563,040 | ||
Liabilities and Stockholders' Equity | ||||||
Liabilities | ||||||
Deposits: | ||||||
Non-interest bearing | $ | 42,687 | $ | 36,919 | ||
Interest bearing | 405,825 | 411,994 | ||||
Total Deposits | 448,512 | 448,913 | ||||
Advances from Federal Home Loan Bank of New York | 82,175 | 37,675 | ||||
Advance payments by borrowers for taxes and insurance | 772 | 686 | ||||
Other liabilities | 1,284 | 2,741 | ||||
Total Liabilities | 532,743 | 490,015 | ||||
Stockholders' Equity | ||||||
Preferred stock, par value $0.01; 1,000,000 shares authorized; no shares issued or outstanding | — | — | ||||
Common stock, par value $0.01; 49,000,000 shares authorized; 5,513,165 and 5,768,632 issued and outstanding at June 30, 2018 and December 31, 2017, respectively | 55 | 58 | ||||
Paid-in capital | 46,688 | 51,068 | ||||
Retained earnings | 23,450 | 23,641 | ||||
Unearned common stock held by ESOP (184,942 and 190,390 shares, respectively) | (1,687 | ) | (1,742 | ) | ||
Total Stockholders' Equity | 68,506 | 73,025 | ||||
Total Liabilities and Stockholders' Equity | $ | 601,249 | $ | 563,040 | ||
MSB Financial Corp. and Subsidiaries | ||||||||||||||||
Consolidated Statements of Income | ||||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
(in thousands except per share amounts) | ||||||||||||||||
Interest Income | ||||||||||||||||
Loans receivable, including fees | $ | 5,436 | $ | 4,444 | $ | 10,572 | $ | 8,444 | ||||||||
Securities held to maturity | 240 | 247 | 459 | 498 | ||||||||||||
Other | 62 | 36 | 136 | 78 | ||||||||||||
Total Interest Income | 5,738 | 4,727 | 11,167 | 9,020 | ||||||||||||
Interest Expense | ||||||||||||||||
Deposits | 935 | 579 | 1,781 | 1,081 | ||||||||||||
Borrowings | 372 | 224 | 653 | 420 | ||||||||||||
Total Interest Expense | 1,307 | 803 | 2,434 | 1,501 | ||||||||||||
Net Interest Income | 4,431 | 3,924 | 8,733 | 7,519 | ||||||||||||
Provision for Loan Losses | 90 | 300 | 180 | 495 | ||||||||||||
Net Interest Income after Provision for Loan Losses | 4,341 | 3,624 | 8,553 | 7,024 | ||||||||||||
Non-Interest Income | ||||||||||||||||
Fees and service charges | 91 | 98 | 174 | 169 | ||||||||||||
Income from bank owned life insurance | 98 | 105 | 195 | 212 | ||||||||||||
Other | 19 | 16 | 43 | 25 | ||||||||||||
Total Non-Interest Income | 208 | 219 | 412 | 406 | ||||||||||||
Non-Interest Expenses | ||||||||||||||||
Salaries and employee benefits | 1,677 | 1,578 | 3,482 | 3,084 | ||||||||||||
Directors compensation | 122 | 187 | 244 | 363 | ||||||||||||
Occupancy and equipment | 397 | 429 | 782 | 823 | ||||||||||||
Service bureau fees | 77 | 49 | 144 | 97 | ||||||||||||
Advertising | 9 | 5 | 13 | 8 | ||||||||||||
FDIC assessment | 69 | 37 | 123 | 70 | ||||||||||||
Professional services | 336 | 349 | 689 | 708 | ||||||||||||
Other | 212 | 184 | 409 | 382 | ||||||||||||
Total Non-Interest Expenses | 2,899 | 2,818 | 5,886 | 5,535 | ||||||||||||
Income before Income Taxes | 1,650 | 1,025 | 3,079 | 1,895 | ||||||||||||
Income Tax Expense | 407 | 293 | 814 | 614 | ||||||||||||
Net Income | $ | 1,243 | $ | 732 | $ | 2,265 | $ | 1,281 | ||||||||
Earnings per share: | ||||||||||||||||
Basic | $ | 0.23 | $ | 0.13 | $ | 0.42 | $ | 0.23 | ||||||||
Diluted | $ | 0.23 | $ | 0.13 | $ | 0.42 | $ | 0.23 | ||||||||
MSB Financial Corp. and Subsidiaries | |||||||||||
Selected Quarterly Financial and Statistical Data | |||||||||||
Three Months Ended | |||||||||||
(in thousands, except for share and per share data) (annualized where applicable) | 6/30/2018 | 3/31/2018 | 6/30/2017 | ||||||||
(unaudited) | |||||||||||
Statements of Operations Data | |||||||||||
Interest income | $ | 5,738 | $ | 5,429 | $ | 4,727 | |||||
Interest expense | 1,307 | 1,127 | 803 | ||||||||
Net interest income | 4,431 | 4,302 | 3,924 | ||||||||
Provision for loan losses | 90 | 90 | 300 | ||||||||
Net interest income after provision for loan losses | 4,341 | 4,212 | 3,624 | ||||||||
Other income | 208 | 204 | 219 | ||||||||
Other expense | 2,899 | 2,987 | 2,818 | ||||||||
Income before income taxes | 1,650 | 1,429 | 1,025 | ||||||||
Income tax expense (benefit) | 407 | 407 | 293 | ||||||||
Net Income | $ | 1,243 | $ | 1,022 | $ | 732 | |||||
Earnings (per Common Share) | |||||||||||
Basic | $ | 0.23 | $ | 0.19 | $ | 0.13 | |||||
Diluted | $ | 0.23 | $ | 0.19 | $ | 0.13 | |||||
Statements of Condition Data (Period-End) | |||||||||||
Investment securities held to maturity (fair value of $43,749, $35,561, and $42,523) | $ | 44,770 | $ | 36,375 | $ | 42,441 | |||||
Loans receivable, net of allowance for loan losses | 509,689 | 480,916 | 426,370 | ||||||||
Total assets | 601,249 | 564,027 | 507,098 | ||||||||
Deposits | 448,512 | 433,843 | 390,063 | ||||||||
Borrowings | 82,175 | 58,075 | 38,675 | ||||||||
Stockholders' equity | 68,506 | 69,759 | 74,989 | ||||||||
Common Shares Dividend Data | |||||||||||
Cash dividends | $ | 2,456 | $ | — | $ | — | |||||
Weighted Average Common Shares Outstanding | |||||||||||
Basic | 5,331,090 | 5,470,349 | 5,539,796 | ||||||||
Diluted | 5,375,090 | 5,507,443 | 5,679,012 | ||||||||
Operating Ratios | |||||||||||
Return on average assets | 0.87 | % | 0.74 | % | 0.59 | % | |||||
Return on average equity | 7.17 | % | 5.65 | % | 3.91 | % | |||||
Average equity / average assets | 12.16 | % | 13.06 | % | 15.19 | % | |||||
Book value per common share (period-end) | $ | 12.43 | $ | 12.63 | $ | 13.07 |