October 18, 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: October 18, 2018 | Michael A. Shriner President and Chief Executive Officer |
• | Return on average assets was 0.92% for the three months ended September 30, 2018 compared to 0.90% for the three months ended September 30, 2017 and return on average equity was 7.56% for the three months ended September 30, 2018 compared to 6.31% for the three months ended September 30, 2017. |
• | Net interest margin increased 7 basis points to 3.44% for the quarter ended September 30, 2018 from 3.37% for the quarter ended September 30, 2017 due to the recognition of $280,000 in commercial prepayment penalties resulting from four large loan payoffs. |
• | The efficiency ratio, which is calculated by dividing non-interest expense by the sum of net interest income and non-interest income, improved to 61.96% for the quarter ended September 30, 2018 from 64.21% for the quarter ended September 30, 2017 driven by an increase in net interest income year over year. |
• | Non-performing assets represented 0.48% of total assets at September 30, 2018 compared with 0.73% at December 31, 2017. The allowance for loan losses as a percentage of total non-performing loans was 198.67% at September 30, 2018 compared to 130.99% at December 31, 2017. |
• | The Company’s balance sheet reflected total asset growth of $27.4 million at September 30, 2018, compared to December 31, 2017, improved asset quality, and capital levels that exceeded regulatory standards for a well-capitalized institution. |
• | The effective tax rate increased to 27.8% for the quarter ended September 30, 2018 compared to (7.9)% for the quarter ended September 30, 2017 primarily due to a permanent tax deduction for the 2017 period due to non-qualified stock options that were exercised during the prior year quarter. |
Selected Financial Ratios | ||||||||||||||||||||
(unaudited; annualized where applicable) | ||||||||||||||||||||
As of or for the quarter ended: | 9/30/2018 | 6/30/2018 | 3/31/2018 | 12/31/2017 | 9/30/2017 | |||||||||||||||
Return on average assets | 0.92 | % | 0.87 | % | 0.74 | % | 0.20 | % | 0.90 | % | ||||||||||
Return on average equity | 7.56 | % | 7.17 | % | 5.65 | % | 1.48 | % | 6.31 | % | ||||||||||
Net interest margin | 3.44 | % | 3.24 | % | 3.24 | % | 3.30 | % | 3.37 | % | ||||||||||
Net loans / deposit ratio | 113.08 | % | 113.64 | % | 110.85 | % | 105.46 | % | 116.04 | % | ||||||||||
Shareholders' equity / total assets | 11.86 | % | 11.39 | % | 12.37 | % | 12.97 | % | 13.39 | % | ||||||||||
Efficiency ratio | 61.96 | % | 62.49 | % | 66.29 | % | 62.26 | % | 64.21 | % | ||||||||||
Book value per common share | $ | 12.70 | $ | 12.43 | $ | 12.63 | $ | 12.66 | $ | 12.57 |
Condensed Consolidated Statements of Income (unaudited) | ||||||||||||||||||||
(dollars in thousands, except for per share data) | ||||||||||||||||||||
For the quarter ended: | 9/30/2018 | 6/30/2018 | 3/31/2018 | 12/31/2017 | 9/30/2017 | |||||||||||||||
Net interest income | $ | 4,755 | $ | 4,431 | $ | 4,302 | $ | 4,325 | $ | 4,190 | ||||||||||
Provision for loan losses | 60 | 90 | 90 | 200 | 490 | |||||||||||||||
Net interest income after provision for loan losses | 4,695 | 4,341 | 4,212 | 4,125 | 3,700 | |||||||||||||||
Other income | 190 | 208 | 204 | 211 | 205 | |||||||||||||||
Other expense | 3,064 | 2,899 | 2,987 | 2,824 | 2,822 | |||||||||||||||
Income before income taxes | 1,821 | 1,650 | 1,429 | 1,512 | 1,083 | |||||||||||||||
Income taxes (benefit) | 506 | 407 | 407 | 1,240 | (86 | ) | ||||||||||||||
Net income | $ | 1,315 | $ | 1,243 | $ | 1,022 | $ | 272 | $ | 1,169 | ||||||||||
Earnings per common share: | ||||||||||||||||||||
Basic | $ | 0.25 | $ | 0.23 | $ | 0.19 | $ | 0.05 | $ | 0.21 | ||||||||||
Diluted | $ | 0.24 | $ | 0.23 | $ | 0.19 | $ | 0.05 | $ | 0.21 | ||||||||||
Weighted average common shares outstanding: | ||||||||||||||||||||
Basic | 5,330,029 | 5,331,090 | 5,470,349 | 5,577,314 | 5,563,938 | |||||||||||||||
Diluted | 5,388,577 | 5,375,090 | 5,507,443 | 5,588,598 | 5,574,535 |
• | Balance sheet growth, with total assets amounting to $590.4 million at September 30, 2018, an increase of $27.4 million, or 4.86%, compared to December 31, 2017. |
• | The Company’s total gross loans receivable were $500.5 million at September 30, 2018, an increase of $21.7 million, or 4.5%, from December 31, 2017. |
• | Securities held to maturity were $43.0 million at September 30, 2018, an increase of $4.5 million, or 11.8%, compared to December 31, 2017. |
• | Deposits decreased $11.3 million totaling $437.6 million at September 30, 2018 compared to $448.9 million at December 31, 2017. |
• | Borrowings totaled $80.1 million at September 30, 2018, an increase of $42.4 million, or 112.5%, compared to $37.7 million at December 31, 2017. |
Condensed Consolidated Statements of Condition (unaudited) | ||||||||||||||||||||
(in thousands) | ||||||||||||||||||||
At: | 9/30/2018 | 6/30/2018 | 3/31/2018 | 12/31/2017 | 9/30/2017 | |||||||||||||||
Cash and due from banks | $ | 1,254 | $ | 1,654 | $ | 1,871 | $ | 2,030 | $ | 1,800 | ||||||||||
Interest-earning demand deposits with banks | 20,817 | 14,660 | 15,484 | 20,279 | 6,971 | |||||||||||||||
Securities held to maturity | 43,009 | 44,770 | 36,375 | 38,482 | 40,752 | |||||||||||||||
Loans receivable, net of allowance | 494,848 | 509,689 | 480,916 | 473,405 | 461,285 | |||||||||||||||
Premises and equipment | 8,323 | 8,461 | 8,580 | 8,698 | 8,804 | |||||||||||||||
Federal home Loan Bank of New York stock, at cost | 4,117 | 4,212 | 3,049 | 2,131 | 3,512 | |||||||||||||||
Bank owned life insurance | 14,489 | 14,392 | 14,294 | 14,197 | 14,097 | |||||||||||||||
Accrued interest receivable | 1,734 | 1,754 | 1,642 | 1,607 | 1,548 | |||||||||||||||
Other assets | 1,803 | 1,657 | 1,816 | 2,211 | 2,988 | |||||||||||||||
Total assets | $ | 590,394 | $ | 601,249 | $ | 564,027 | $ | 563,040 | $ | 541,757 | ||||||||||
Deposits | $ | 437,597 | $ | 448,512 | $ | 433,843 | $ | 448,913 | $ | 397,510 | ||||||||||
Borrowings | 80,075 | 82,175 | 58,075 | 37,675 | 68,375 | |||||||||||||||
Other liabilities | 2,714 | 2,056 | 2,350 | 3,427 | 3,332 | |||||||||||||||
Shareholders' equity | 70,008 | 68,506 | 69,759 | 73,025 | 72,540 | |||||||||||||||
Total liabilities and shareholders' equity | $ | 590,394 | $ | 601,249 | $ | 564,027 | $ | 563,040 | $ | 541,757 |
Loans (unaudited) | ||||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||
At quarter ended: | 9/30/2018 | 6/30/2018 | 3/31/2018 | 12/31/2017 | 9/30/2017 | |||||||||||||||
Residential mortgage: | ||||||||||||||||||||
One-to-four family | $ | 147,127 | $ | 151,372 | $ | 154,576 | $ | 157,876 | $ | 161,679 | ||||||||||
Home equity | 25,494 | 26,174 | 27,051 | 26,803 | 27,409 | |||||||||||||||
Total residential mortgage | 172,621 | 177,546 | 181,627 | 184,679 | 189,088 | |||||||||||||||
Commercial and multi-family real estate | 209,283 | 214,653 | 195,951 | 196,681 | 184,791 | |||||||||||||||
Construction | 28,788 | 48,423 | 49,397 | 43,718 | 36,002 | |||||||||||||||
Commercial and industrial | 101,849 | 94,140 | 82,712 | 73,465 | 73,409 | |||||||||||||||
Total commercial loans | 339,920 | 357,216 | 328,060 | 313,864 | 294,202 | |||||||||||||||
Consumer loans | 580 | 608 | 595 | 618 | 659 | |||||||||||||||
Total loans receivable | 513,121 | 535,370 | 510,282 | 499,161 | 483,949 | |||||||||||||||
Less: | ||||||||||||||||||||
Loans in process | 12,142 | 19,594 | 23,398 | 19,868 | 16,864 | |||||||||||||||
Deferred loan fees | 475 | 491 | 462 | 474 | 525 | |||||||||||||||
Allowance | 5,656 | 5,596 | 5,506 | 5,414 | 5,275 | |||||||||||||||
Total loans receivable, net | $ | 494,848 | $ | 509,689 | $ | 480,916 | $ | 473,405 | $ | 461,285 |
(dollars in thousands, unaudited) | ||||||||||||||||||||
As of or for the quarter ended: | 9/30/2018 | 6/30/2018 | 3/31/2018 | 12/31/2017 | 9/30/2017 | |||||||||||||||
Non-accrual loans | $ | 2,746 | $ | 3,430 | $ | 3,548 | $ | 3,975 | $ | 4,071 | ||||||||||
Loans 90 days or more past due and still accruing | 101 | 699 | 1,266 | 158 | 374 | |||||||||||||||
Total non-performing loans | $ | 2,847 | $ | 4,129 | $ | 4,814 | $ | 4,133 | $ | 4,445 | ||||||||||
Non-performing assets / total assets | 0.48 | % | 0.69 | % | 0.85 | % | 0.73 | % | 0.82 | % | ||||||||||
Non-performing loans / total loans | 0.57 | % | 0.80 | % | 0.99 | % | 0.86 | % | 0.95 | % | ||||||||||
Net charge-offs (recoveries) | $ | — | $ | — | $ | (2 | ) | $ | 61 | $ | 140 | |||||||||
Net charge-offs (recoveries) / average loans (annualized) | — | % | — | % | — | % | 0.05 | % | 0.13 | % | ||||||||||
Allowance for loan loss / total loans | 1.13 | % | 1.09 | % | 1.13 | % | 1.13 | % | 1.13 | % | ||||||||||
Allowance for loan losses / non-performing loans | 198.67 | % | 135.53 | % | 114.37 | % | 130.99 | % | 118.67 | % | ||||||||||
Total assets | $ | 590,394 | $ | 601,249 | $ | 564,027 | $ | 563,040 | $ | 541,757 | ||||||||||
Gross loans, excluding ALLL | $ | 500,504 | $ | 515,285 | $ | 486,422 | $ | 478,819 | $ | 466,560 | ||||||||||
Average loans | $ | 499,082 | $ | 500,959 | $ | 483,255 | $ | 472,388 | $ | 446,383 | ||||||||||
Allowance for loan losses | $ | 5,656 | $ | 5,596 | $ | 5,506 | $ | 5,414 | $ | 5,275 |
Deposits (unaudited) | ||||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||
At quarter ended: | 9/30/2018 | 6/30/2018 | 3/31/2018 | 12/31/2017 | 9/30/2017 | |||||||||||||||
Demand: | ||||||||||||||||||||
Non-interest bearing | $ | 45,501 | $ | 42,687 | $ | 36,751 | $ | 36,919 | $ | 40,504 | ||||||||||
Interest-bearing | 150,248 | 153,968 | 148,888 | 155,199 | 107,419 | |||||||||||||||
Savings | 102,434 | 109,254 | 109,215 | 105,106 | 108,249 | |||||||||||||||
Money market | 12,822 | 14,381 | 20,251 | 27,350 | 16,517 | |||||||||||||||
Time | 126,592 | 128,222 | 118,738 | 124,339 | 124,821 | |||||||||||||||
Total deposits | $ | 437,597 | $ | 448,512 | $ | 433,843 | $ | 448,913 | $ | 397,510 |
Condensed Consolidated Average Statements of Condition (unaudited) | ||||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||
For the quarter ended: | 9/30/2018 | 6/30/2018 | 3/31/2018 | 12/31/2017 | 9/30/2017 | |||||||||||||||
Loans | $ | 499,082 | $ | 500,959 | $ | 483,255 | $ | 472,388 | $ | 446,383 | ||||||||||
Securities held to maturity | 43,871 | 36,494 | 37,661 | 39,899 | 41,423 | |||||||||||||||
Allowance for loan losses | (5,624 | ) | (5,538 | ) | (5,461 | ) | (5,376 | ) | (4,922 | ) | ||||||||||
All other assets | 37,466 | 38,053 | 38,851 | 41,886 | 38,545 | |||||||||||||||
Total assets | $ | 574,795 | $ | 569,968 | $ | 554,306 | $ | 548,797 | $ | 521,429 | ||||||||||
Non-interest bearing deposits | $ | 43,495 | $ | 38,903 | $ | 36,211 | $ | 43,336 | $ | 44,970 | ||||||||||
Interest-bearing deposits | 386,364 | 385,047 | 390,522 | 375,098 | 350,589 | |||||||||||||||
Borrowings | 73,077 | 74,192 | 53,191 | 53,844 | 47,788 | |||||||||||||||
Other liabilities | 2,320 | 2,495 | 1,972 | 3,104 | 3,964 | |||||||||||||||
Stockholders' Equity | 69,539 | 69,331 | 72,410 | 73,415 | 74,118 | |||||||||||||||
Total liabilities and shareholders' equity | $ | 574,795 | $ | 569,968 | $ | 554,306 | $ | 548,797 | $ | 521,429 | ||||||||||
Contact: | Michael A. Shriner, President & CEO |
(908) 647-4000 | |
mshriner@millingtonbank.com |
MSB Financial Corp. and Subsidiaries | ||||||
Consolidated Statements of Financial Condition | ||||||
At September 30, 2018 | At December 31, 2017 | |||||
(Dollars in thousands, except per share amounts) | ||||||
Cash and due from banks | $ | 1,254 | $ | 2,030 | ||
Interest-earning demand deposits with banks | 20,817 | 20,279 | ||||
Cash and Cash Equivalents | 22,071 | 22,309 | ||||
Securities held to maturity (fair value of $41,765 and $38,255, respectively) | 43,009 | 38,482 | ||||
Loans receivable, net of allowance for loan losses of $5,656 and $5,414, respectively | 494,848 | 473,405 | ||||
Premises and equipment | 8,323 | 8,698 | ||||
Federal Home Loan Bank of New York stock, at cost | 4,117 | 2,131 | ||||
Bank owned life insurance | 14,489 | 14,197 | ||||
Accrued interest receivable | 1,734 | 1,607 | ||||
Other assets | 1,803 | 2,211 | ||||
Total Assets | $ | 590,394 | $ | 563,040 | ||
Liabilities and Stockholders' Equity | ||||||
Liabilities | ||||||
Deposits: | ||||||
Non-interest bearing | $ | 45,501 | $ | 36,919 | ||
Interest bearing | 392,096 | 411,994 | ||||
Total Deposits | 437,597 | 448,913 | ||||
Advances from Federal Home Loan Bank of New York | 80,075 | 37,675 | ||||
Advance payments by borrowers for taxes and insurance | 704 | 686 | ||||
Other liabilities | 2,010 | 2,741 | ||||
Total Liabilities | 520,386 | 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 September 30, 2018 and December 31, 2017, respectively | 55 | 58 | ||||
Paid-in capital | 46,848 | 51,068 | ||||
Retained earnings | 24,765 | 23,641 | ||||
Unearned common stock held by ESOP (182,218 and 190,390 shares, respectively) | (1,660 | ) | (1,742 | ) | ||
Total Stockholders' Equity | 70,008 | 73,025 | ||||
Total Liabilities and Stockholders' Equity | $ | 590,394 | $ | 563,040 | ||
MSB Financial Corp. and Subsidiaries | ||||||||||||||||
Consolidated Statements of Income | ||||||||||||||||
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
(in thousands except per share amounts) | ||||||||||||||||
Interest Income | ||||||||||||||||
Loans receivable, including fees | $ | 5,788 | $ | 4,769 | $ | 16,360 | $ | 13,213 | ||||||||
Securities held to maturity | 304 | 264 | 763 | 762 | ||||||||||||
Other | 83 | 50 | 219 | 128 | ||||||||||||
Total Interest Income | 6,175 | 5,083 | 17,342 | 14,103 | ||||||||||||
Interest Expense | ||||||||||||||||
Deposits | 1,014 | 622 | 2,795 | 1,703 | ||||||||||||
Borrowings | 406 | 271 | 1,059 | 691 | ||||||||||||
Total Interest Expense | 1,420 | 893 | 3,854 | 2,394 | ||||||||||||
Net Interest Income | 4,755 | 4,190 | 13,488 | 11,709 | ||||||||||||
Provision for Loan Losses | 60 | 490 | 240 | 985 | ||||||||||||
Net Interest Income after Provision for Loan Losses | 4,695 | 3,700 | 13,248 | 10,724 | ||||||||||||
Non-Interest Income | ||||||||||||||||
Fees and service charges | 78 | 87 | 252 | 256 | ||||||||||||
Income from bank owned life insurance | 97 | 101 | 292 | 313 | ||||||||||||
Other | 15 | 17 | 58 | 42 | ||||||||||||
Total Non-Interest Income | 190 | 205 | 602 | 611 | ||||||||||||
Non-Interest Expenses | ||||||||||||||||
Salaries and employee benefits | 1,625 | 1,577 | 5,107 | 4,661 | ||||||||||||
Directors compensation | 121 | 188 | 365 | 551 | ||||||||||||
Occupancy and equipment | 390 | 394 | 1,172 | 1,217 | ||||||||||||
Service bureau fees | 107 | 67 | 251 | 164 | ||||||||||||
Advertising | 18 | 4 | 31 | 12 | ||||||||||||
FDIC assessment | 71 | 61 | 194 | 131 | ||||||||||||
Professional services | 528 | 342 | 1,217 | 1,050 | ||||||||||||
Other | 204 | 189 | 613 | 571 | ||||||||||||
Total Non-Interest Expenses | 3,064 | 2,822 | 8,950 | 8,357 | ||||||||||||
Income before Income Taxes | 1,821 | 1,083 | 4,900 | 2,978 | ||||||||||||
Income Tax Expense | 506 | (86 | ) | 1,320 | 528 | |||||||||||
Net Income | $ | 1,315 | $ | 1,169 | $ | 3,580 | $ | 2,450 | ||||||||
Earnings per share: | ||||||||||||||||
Basic | $ | 0.25 | $ | 0.21 | $ | 0.67 | $ | 0.44 | ||||||||
Diluted | $ | 0.24 | $ | 0.21 | $ | 0.66 | $ | 0.44 | ||||||||
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) | 9/30/2018 | 6/30/2018 | 9/30/2017 | ||||||||
(unaudited) | |||||||||||
Statements of Operations Data | |||||||||||
Interest income | $ | 6,175 | $ | 5,738 | $ | 5,083 | |||||
Interest expense | 1,420 | 1,307 | 893 | ||||||||
Net interest income | 4,755 | 4,431 | 4,190 | ||||||||
Provision for loan losses | 60 | 90 | 490 | ||||||||
Net interest income after provision for loan losses | 4,695 | 4,341 | 3,700 | ||||||||
Other income | 190 | 208 | 205 | ||||||||
Other expense | 3,064 | 2,899 | 2,822 | ||||||||
Income before income taxes | 1,821 | 1,650 | 1,083 | ||||||||
Income tax expense (benefit) | 506 | 407 | (86 | ) | |||||||
Net Income | $ | 1,315 | $ | 1,243 | $ | 1,169 | |||||
Earnings (per Common Share) | |||||||||||
Basic | $ | 0.25 | $ | 0.23 | $ | 0.21 | |||||
Diluted | $ | 0.24 | $ | 0.23 | $ | 0.21 | |||||
Statements of Condition Data (Period-End) | |||||||||||
Investment securities held to maturity (fair value of $41,765, $43,749, and $40,794) | $ | 43,009 | $ | 44,770 | $ | 40,752 | |||||
Loans receivable, net of allowance for loan losses | 494,848 | 509,689 | 461,285 | ||||||||
Total assets | 590,394 | 601,249 | 541,757 | ||||||||
Deposits | 437,597 | 448,512 | 397,510 | ||||||||
Borrowings | 80,075 | 82,175 | 68,375 | ||||||||
Stockholders' equity | 70,008 | 68,506 | 72,540 | ||||||||
Common Shares Dividend Data | |||||||||||
Cash dividends | $ | — | $ | 2,456 | $ | — | |||||
Weighted Average Common Shares Outstanding | |||||||||||
Basic | 5,330,029 | 5,331,090 | 5,563,938 | ||||||||
Diluted | 5,388,577 | 5,375,090 | 5,574,535 | ||||||||
Operating Ratios | |||||||||||
Return on average assets | 0.92 | % | 0.87 | % | 0.90 | % | |||||
Return on average equity | 7.56 | % | 7.17 | % | 6.31 | % | |||||
Average equity / average assets | 12.10 | % | 12.16 | % | 14.21 | % | |||||
Book value per common share (period-end) | $ | 12.70 | $ | 12.43 | $ | 12.57 |