July 31, 2019 |
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 (see General Instruction A.2. below): | |
☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)). |
Title of Each Class | Trading Symbol(s) | Name of each exchange on which registered |
Common Stock, par value $0.01 per share | MSBF | The Nasdaq Stock Market, LLC |
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, 2019 | Michael A. Shriner President and Chief Executive Officer |
• | Return on average assets was 0.85% for the three months ended June 30, 2019 compared to 0.87% for the three months ended June 30, 2018 and return on average equity was 7.28% for the three months ended June 30, 2019 compared to 7.17% for the three months ended June 30, 2018. |
• | Net interest margin decreased three basis points to 3.21% for the quarter ended June 30, 2019 from 3.24% for the quarter ended June 30, 2018. |
• | The efficiency ratio, which is calculated by dividing non-interest expense by the sum of net interest income and non-interest income, was 62.97% for the quarter ended June 30, 2019 as compared to 62.49% for the quarter ended June 30, 2018. |
• | Non-performing assets represented 0.69% of total assets at June 30, 2019 compared with 0.71% at December 31, 2018. The allowance for loan losses as a percentage of total non-performing loans was 140.26% at June 30, 2019 compared to 136.83% at December 31, 2018. |
• | The Company’s balance sheet at June 30, 2019 reflected a decline in total assets of $3.0 million compared to December 31, 2018 due to a reduction in loans, offset by an increase in cash and cash equivalents, improved asset quality, and capital levels that exceeded regulatory standards for a well-capitalized institution. |
• | The effective tax rate increased to 28.5% for the quarter ended June 30, 2019 compared to 24.7% for the quarter ended June 30, 2018. |
Selected Financial Ratios | ||||||||||||||||||||
(unaudited; annualized where applicable) | ||||||||||||||||||||
As of or for the quarter ended: | 6/30/2019 | 3/31/2019 | 12/31/2018 | 9/30/2018 | 6/30/2018 | |||||||||||||||
Return on average assets | 0.85 | % | 0.36 | % | 0.87 | % | 0.92 | % | 0.87 | % | ||||||||||
Return on average equity | 7.28 | % | 3.05 | % | 7.20 | % | 7.56 | % | 7.17 | % | ||||||||||
Net interest margin | 3.21 | % | 3.19 | % | 3.22 | % | 3.44 | % | 3.24 | % | ||||||||||
Net loans / deposit ratio | 118.62 | % | 113.10 | % | 119.43 | % | 113.08 | % | 113.64 | % | ||||||||||
Shareholders' equity / total assets | 11.42 | % | 11.77 | % | 11.40 | % | 11.86 | % | 11.39 | % | ||||||||||
Efficiency ratio | 62.97 | % | 83.83 | % | 62.51 | % | 61.96 | % | 62.49 | % | ||||||||||
Book value per common share | $ | 12.64 | $ | 12.46 | $ | 12.37 | $ | 12.70 | $ | 12.43 |
Condensed Consolidated Statements of Income (unaudited) | ||||||||||||||||||||
(dollars in thousands, except for per share data) | ||||||||||||||||||||
For the quarter ended: | 6/30/2019 | 3/31/2019 | 12/31/2018 | 9/30/2018 | 6/30/2018 | |||||||||||||||
Net interest income | $ | 4,411 | $ | 4,423 | $ | 4,459 | $ | 4,755 | $ | 4,431 | ||||||||||
Provision for loan losses | — | — | — | 60 | 90 | |||||||||||||||
Net interest income after provision for loan losses | 4,411 | 4,423 | 4,459 | 4,695 | 4,341 | |||||||||||||||
Other income | 204 | 190 | 198 | 190 | 208 | |||||||||||||||
Other expense | 2,906 | 3,867 | 2,911 | 3,064 | 2,899 | |||||||||||||||
Income before income taxes | 1,709 | 746 | 1,746 | 1,821 | 1,650 | |||||||||||||||
Income taxes (benefit) | 487 | 232 | 491 | 506 | 407 | |||||||||||||||
Net income | $ | 1,222 | $ | 514 | $ | 1,255 | $ | 1,315 | $ | 1,243 | ||||||||||
Earnings per common share: | ||||||||||||||||||||
Basic | $ | 0.24 | $ | 0.10 | $ | 0.24 | $ | 0.25 | $ | 0.23 | ||||||||||
Diluted | $ | 0.24 | $ | 0.10 | $ | 0.24 | $ | 0.24 | $ | 0.23 | ||||||||||
Weighted average common shares outstanding: | ||||||||||||||||||||
Basic | 5,126,938 | 5,198,432 | 5,276,116 | 5,330,029 | 5,331,090 | |||||||||||||||
Diluted | 5,155,258 | 5,237,329 | 5,317,305 | 5,388,577 | 5,375,090 |
• | Total assets amounted to $581.5 million at June 30, 2019, a decrease of $3.0 million, or 0.52%, compared to December 31, 2018. |
• | The Company’s total loans receivable, excluding the ALLL, were $499.9 million at June 30, 2019, a decrease of $8.1 million, or 1.6%, from December 31, 2018. |
• | Securities held to maturity were $39.5 million at June 30, 2019, unchanged when compared to December 31, 2018. |
• | Deposits decreased $4.0 million, or 0.94%, to $416.6 million at June 30, 2019 compared to $420.6 million at December 31, 2018. |
• | Borrowings totaled $95.1 million at June 30, 2019, an increase of $800,000, or 0.85%, compared to $94.3 million at December 31, 2018. |
Condensed Consolidated Statements of Condition (unaudited) | ||||||||||||||||||||
(in thousands) | ||||||||||||||||||||
At: | 6/30/2019 | 3/31/2019 | 12/31/2018 | 9/30/2018 | 6/30/2018 | |||||||||||||||
Cash and due from banks | $ | 1,200 | $ | 1,040 | $ | 1,558 | $ | 1,254 | $ | 1,654 | ||||||||||
Interest-earning demand deposits with banks | 14,473 | 9,771 | 10,242 | 20,817 | 14,660 | |||||||||||||||
Securities held to maturity | 39,455 | 36,982 | 39,476 | 43,009 | 44,770 | |||||||||||||||
Loans receivable, net of allowance | 494,192 | 489,445 | 502,299 | 494,848 | 509,689 | |||||||||||||||
Premises and equipment | 8,006 | 9,221 | 8,180 | 8,323 | 8,461 | |||||||||||||||
Federal home Loan Bank of New York stock, at cost | 4,805 | 3,406 | 4,756 | 4,117 | 4,212 | |||||||||||||||
Bank owned life insurance | 14,775 | 14,679 | 14,585 | 14,489 | 14,392 | |||||||||||||||
Accrued interest receivable | 1,715 | 1,772 | 1,615 | 1,734 | 1,754 | |||||||||||||||
Other assets | 2,863 | 1,777 | 1,789 | 1,803 | 1,657 | |||||||||||||||
Total assets | $ | 581,484 | $ | 568,093 | $ | 584,500 | $ | 590,394 | $ | 601,249 | ||||||||||
Deposits | $ | 416,607 | $ | 432,754 | $ | 420,579 | $ | 437,597 | $ | 448,512 | ||||||||||
Borrowings | 95,075 | 64,275 | 94,275 | 80,075 | 82,175 | |||||||||||||||
Other liabilities | 3,423 | 4,172 | 3,000 | 2,714 | 2,056 | |||||||||||||||
Stockholders' equity | 66,379 | 66,892 | 66,646 | 70,008 | 68,506 | |||||||||||||||
Total liabilities and stockholders' equity | $ | 581,484 | $ | 568,093 | $ | 584,500 | $ | 590,394 | $ | 601,249 |
Loans (unaudited) | ||||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||
At quarter ended: | 6/30/2019 | 3/31/2019 | 12/31/2018 | 9/30/2018 | 6/30/2018 | |||||||||||||||
Residential mortgage: | ||||||||||||||||||||
One-to-four family | $ | 139,119 | $ | 140,043 | $ | 143,391 | $ | 147,127 | $ | 151,372 | ||||||||||
Home equity | 23,596 | 25,160 | 24,365 | 25,494 | 26,174 | |||||||||||||||
Total residential mortgage | 162,715 | 165,203 | 167,756 | 172,621 | 177,546 | |||||||||||||||
Commercial and multi-family real estate | 207,866 | 206,653 | 212,606 | 209,283 | 214,653 | |||||||||||||||
Construction | 42,356 | 37,319 | 29,628 | 28,788 | 48,423 | |||||||||||||||
Commercial and industrial - Secured | 50,802 | 49,640 | 60,426 | 56,331 | 52,879 | |||||||||||||||
Commercial and industrial - Unsecured | 56,672 | 53,791 | 48,176 | 45,518 | 41,261 | |||||||||||||||
Total commercial loans | 357,696 | 347,403 | 350,836 | 339,920 | 357,216 | |||||||||||||||
Consumer loans | 425 | 470 | 540 | 580 | 608 | |||||||||||||||
Total loans receivable | 520,836 | 513,076 | 519,132 | 513,121 | 535,370 | |||||||||||||||
Less: | ||||||||||||||||||||
Loans in process | 20,447 | 17,443 | 10,677 | 12,142 | 19,594 | |||||||||||||||
Deferred loan fees | 536 | 530 | 501 | 475 | 491 | |||||||||||||||
Allowance | 5,661 | 5,658 | 5,655 | 5,656 | 5,596 | |||||||||||||||
Total loans receivable, net | $ | 494,192 | $ | 489,445 | $ | 502,299 | $ | 494,848 | $ | 509,689 |
(dollars in thousands, unaudited) | ||||||||||||||||||||
As of or for the quarter ended: | 6/30/2019 | 3/31/2019 | 12/31/2018 | 9/30/2018 | 6/30/2018 | |||||||||||||||
Non-accrual loans | $ | 3,681 | $ | 3,839 | $ | 4,131 | $ | 2,746 | $ | 3,430 | ||||||||||
Loans 90 days or more past due and still accruing | 355 | 2 | 101 | 699 | ||||||||||||||||
Total non-performing loans | $ | 4,036 | $ | 3,839 | $ | 4,133 | $ | 2,847 | $ | 4,129 | ||||||||||
Non-performing assets / total assets | 0.69 | % | 0.68 | % | 0.71 | % | 0.48 | % | 0.69 | % | ||||||||||
Non-performing loans / total loans | 0.81 | % | 0.78 | % | 0.81 | % | 0.57 | % | 0.80 | % | ||||||||||
Net charge-offs (recoveries) | $ | (4 | ) | (3 | ) | — | — | — | ||||||||||||
Net charge-offs (recoveries) / average loans (annualized) | — | % | — | % | — | % | — | % | — | % | ||||||||||
Allowance for loan loss / total loans | 1.13 | % | 1.14 | % | 1.11 | % | 1.13 | % | 1.09 | % | ||||||||||
Allowance for loan losses / non-performing loans | 140.26 | % | 147.38 | % | 136.83 | % | 198.67 | % | 135.53 | % | ||||||||||
Total assets | $ | 581,484 | $ | 568,093 | $ | 584,500 | $ | 590,394 | $ | 601,249 | ||||||||||
Gross loans, excluding ALLL | $ | 499,853 | $ | 495,103 | $ | 507,954 | $ | 500,504 | $ | 515,285 | ||||||||||
Average loans | $ | 498,799 | $ | 502,149 | $ | 499,368 | $ | 499,082 | $ | 500,959 | ||||||||||
Allowance for loan losses | $ | 5,661 | $ | 5,658 | $ | 5,655 | $ | 5,656 | $ | 5,596 |
Deposits (unaudited) | ||||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||
At quarter ended: | 6/30/2019 | 3/31/2019 | 12/31/2018 | 9/30/2018 | 6/30/2018 | |||||||||||||||
Demand: | ||||||||||||||||||||
Non-interest bearing | $ | 49,799 | $ | 49,429 | $ | 46,690 | $ | 45,501 | $ | 42,687 | ||||||||||
Interest-bearing | 101,678 | 123,420 | 134,123 | 150,248 | 153,968 | |||||||||||||||
Savings | 97,898 | 103,109 | 102,740 | 102,434 | 109,254 | |||||||||||||||
Money market | 18,780 | 17,182 | 16,171 | 12,822 | 14,381 | |||||||||||||||
Time | 148,452 | 139,614 | 120,855 | 126,592 | 128,222 | |||||||||||||||
Total deposits | $ | 416,607 | $ | 432,754 | $ | 420,579 | $ | 437,597 | $ | 448,512 |
Condensed Consolidated Average Statements of Condition (unaudited) | ||||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||
For the quarter ended: | 6/30/2019 | 3/31/2019 | 12/31/2018 | 9/30/2018 | 6/30/2018 | |||||||||||||||
Loans | $ | 498,799 | $ | 502,149 | $ | 499,368 | $ | 499,082 | $ | 500,959 | ||||||||||
Securities held to maturity | 36,796 | 37,899 | 41,460 | 43,871 | 36,494 | |||||||||||||||
Allowance for loan losses | (5,659 | ) | (5,656 | ) | (5,686 | ) | (5,624 | ) | (5,538 | ) | ||||||||||
All other assets | 42,671 | 42,778 | 41,211 | 37,466 | 38,053 | |||||||||||||||
Total assets | $ | 572,607 | $ | 577,170 | $ | 576,353 | $ | 574,795 | $ | 569,968 | ||||||||||
Non-interest bearing deposits | $ | 49,861 | $ | 46,962 | $ | 48,172 | $ | 43,495 | $ | 38,903 | ||||||||||
Interest-bearing deposits | 368,679 | 367,434 | 372,474 | 386,364 | 385,047 | |||||||||||||||
Borrowings | 83,814 | 92,780 | 83,440 | 73,077 | 74,192 | |||||||||||||||
Other liabilities | 3,087 | 2,623 | 2,585 | 2,320 | 2,495 | |||||||||||||||
Stockholders' Equity | 67,166 | 67,371 | 69,682 | 69,539 | 69,331 | |||||||||||||||
Total liabilities and shareholders' equity | $ | 572,607 | $ | 577,170 | $ | 576,353 | $ | 574,795 | $ | 569,968 | ||||||||||
Six months ended June 30, | |||||||
2019 | 2018 | ||||||
(dollars in thousands) | |||||||
Net income | $ | 1,736 | $ | 2,265 | |||
Professional expenses associated with increased audit scope and identification of material weaknesses | 862 | — | |||||
Tax adjustment using an assumed tax rate of 31% | (267 | ) | — | ||||
Adjusted net income | $ | 2,331 | $ | 2,265 |
Six Months Ended June 30, | |||||||
(In Thousands, Except Per Share Data) | 2019 | 2018 | |||||
Numerator: | |||||||
Net income | $ | 2,331 | $ | 2,265 | |||
Denominator: | |||||||
Weighted average common shares | 5,179 | 5,400 | |||||
Dilutive potential common shares | 34 | 41 | |||||
Weighted average fully diluted shares | 5,213 | 5,441 | |||||
Earnings per share: | |||||||
Dilutive | $ | 0.45 | $ | 0.42 |
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, 2019 | At December 31, 2018 | |||||
(Dollars in thousands, except per share amounts) | ||||||
Cash and due from banks | $ | 1,200 | $ | 1,558 | ||
Interest-earning demand deposits with banks | 14,473 | 10,242 | ||||
Cash and Cash Equivalents | 15,673 | 11,800 | ||||
Securities held to maturity (fair value of $39,201 and $38,569, respectively) | 39,455 | 39,476 | ||||
Loans receivable, net of allowance for loan losses of $5,661 and $5,655, respectively | 494,192 | 502,299 | ||||
Premises and equipment | 8,006 | 8,180 | ||||
Federal Home Loan Bank of New York stock, at cost | 4,805 | 4,756 | ||||
Bank owned life insurance | 14,775 | 14,585 | ||||
Accrued interest receivable | 1,715 | 1,615 | ||||
Other assets | 2,863 | 1,789 | ||||
Total Assets | $ | 581,484 | $ | 584,500 | ||
Liabilities and Stockholders' Equity | ||||||
Liabilities | ||||||
Deposits: | ||||||
Non-interest bearing | $ | 49,799 | $ | 46,690 | ||
Interest bearing | 366,808 | 373,889 | ||||
Total Deposits | 416,607 | 420,579 | ||||
Advances from Federal Home Loan Bank of New York | 95,075 | 94,275 | ||||
Advance payments by borrowers for taxes and insurance | 703 | 749 | ||||
Other liabilities | 2,720 | 2,251 | ||||
Total Liabilities | 515,105 | 517,854 | ||||
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; 5,252,716 and 5,389,054 issued and outstanding at June 30, 2019 and December 31, 2018, respectively | 53 | 54 | ||||
Paid-in capital | 42,670 | 44,726 | ||||
Retained earnings | 25,234 | 23,498 | ||||
Unearned common stock held by ESOP (174,046 and 179,464 shares, respectively) | (1,578 | ) | (1,632 | ) | ||
Total Stockholders' Equity | 66,379 | 66,646 | ||||
Total Liabilities and Stockholders' Equity | $ | 581,484 | $ | 584,500 | ||
MSB Financial Corp. and Subsidiaries | ||||||||||||||||
Consolidated Statements of Income | ||||||||||||||||
Three months ended June 30, | Six months ended June 30, | |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
(in thousands except per share amounts) | ||||||||||||||||
Interest Income | ||||||||||||||||
Loans receivable, including fees | $ | 5,779 | $ | 5,436 | $ | 11,469 | $ | 10,572 | ||||||||
Securities held to maturity | 266 | 240 | 551 | 459 | ||||||||||||
Other | 122 | 62 | 254 | 136 | ||||||||||||
Total Interest Income | 6,167 | 5,738 | 12,274 | 11,167 | ||||||||||||
Interest Expense | ||||||||||||||||
Deposits | 1,264 | 935 | 2,390 | 1,781 | ||||||||||||
Borrowings | 492 | 372 | 1,050 | 653 | ||||||||||||
Total Interest Expense | 1,756 | 1,307 | 3,440 | 2,434 | ||||||||||||
Net Interest Income | 4,411 | 4,431 | 8,834 | 8,733 | ||||||||||||
Provision for Loan Losses | — | 90 | — | 180 | ||||||||||||
Net Interest Income after Provision for Loan Losses | 4,411 | 4,341 | 8,834 | 8,553 | ||||||||||||
Non-Interest Income | ||||||||||||||||
Fees and service charges | 93 | 91 | 165 | 174 | ||||||||||||
Income from bank owned life insurance | 96 | 98 | 190 | 195 | ||||||||||||
Other | 15 | 19 | 39 | 43 | ||||||||||||
Total Non-Interest Income | 204 | 208 | 394 | 412 | ||||||||||||
Non-Interest Expenses | ||||||||||||||||
Salaries and employee benefits | 1,679 | 1,677 | 3,407 | 3,482 | ||||||||||||
Directors compensation | 130 | 122 | 259 | 244 | ||||||||||||
Occupancy and equipment | 385 | 397 | 760 | 782 | ||||||||||||
Service bureau fees | 100 | 77 | 195 | 144 | ||||||||||||
Advertising | 6 | 9 | 13 | 13 | ||||||||||||
FDIC assessment | 42 | 69 | 89 | 123 | ||||||||||||
Professional services | 369 | 336 | 1,647 | 689 | ||||||||||||
Other | 195 | 212 | 403 | 409 | ||||||||||||
Total Non-Interest Expenses | 2,906 | 2,899 | 6,773 | 5,886 | ||||||||||||
Income before Income Taxes | 1,709 | 1,650 | 2,455 | 3,079 | ||||||||||||
Income Tax Expense | 487 | 407 | 719 | 814 | ||||||||||||
Net Income | $ | 1,222 | $ | 1,243 | $ | 1,736 | $ | 2,265 | ||||||||
Earnings per share: | ||||||||||||||||
Basic | $ | 0.24 | $ | 0.23 | $ | 0.34 | $ | 0.42 | ||||||||
Diluted | $ | 0.24 | $ | 0.23 | $ | 0.33 | $ | 0.41 | ||||||||
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) | 6/30/2019 | 3/31/2019 | 6/30/2018 | ||||||||
(unaudited) | |||||||||||
Statements of Operations Data | |||||||||||
Interest income | $ | 6,167 | $ | 6,108 | $ | 5,738 | |||||
Interest expense | 1,756 | 1,685 | 1,307 | ||||||||
Net interest income | 4,411 | 4,423 | 4,431 | ||||||||
Provision for loan losses | — | — | 90 | ||||||||
Net interest income after provision for loan losses | 4,411 | 4,423 | 4,341 | ||||||||
Other income | 204 | 190 | 208 | ||||||||
Other expense | 2,906 | 3,867 | 2,899 | ||||||||
Income before income taxes | 1,709 | 746 | 1,650 | ||||||||
Income tax expense (benefit) | 487 | 232 | 407 | ||||||||
Net Income | $ | 1,222 | $ | 514 | $ | 1,243 | |||||
Earnings (per Common Share) | |||||||||||
Basic | $ | 0.24 | $ | 0.10 | $ | 0.23 | |||||
Diluted | $ | 0.24 | $ | 0.10 | $ | 0.23 | |||||
Statements of Condition Data (Period-End) | |||||||||||
Investment securities held to maturity (fair value of $39,201, $36,444, and $43,749) | $ | 39,455 | $ | 36,982 | $ | 44,770 | |||||
Loans receivable, net of allowance for loan losses | 494,192 | 489,445 | 509,689 | ||||||||
Total assets | 581,484 | 568,093 | 601,249 | ||||||||
Deposits | 416,607 | 432,754 | 448,512 | ||||||||
Borrowings | 95,075 | 64,275 | 82,175 | ||||||||
Stockholders' equity | 66,379 | 66,892 | 68,506 | ||||||||
Common Shares Dividend Data | |||||||||||
Cash dividends | $— | $— | $ | 2,456 | |||||||
Weighted Average Common Shares Outstanding | |||||||||||
Basic | 5,126,938 | 5,198,432 | 5,331,090 | ||||||||
Diluted | 5,155,258 | 5,237,329 | 5,375,090 | ||||||||
Operating Ratios | |||||||||||
Return on average assets | 0.85 | % | 0.36 | % | 0.87 | % | |||||
Return on average equity | 7.28 | % | 3.05 | % | 7.17 | % | |||||
Average equity / average assets | 11.73 | % | 11.67 | % | 12.16 | % | |||||
Book value per common share (period-end) | $ | 12.64 | $ | 12.46 | $ | 12.43 |