(Mark One) | ||||||||||||
X | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES | |||||||||||
EXCHANGE ACT OF 1934 | ||||||||||||
For the quarterly period ended | March 31, 2020 | |||||||||||
OR | ||||||||||||
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES | ||||||||||||
EXCHANGE ACT OF 1934 | ||||||||||||
For the transition period from | to | |||||||||||
Commission File Number 001-37506 | ||||||||||||
MSB FINANCIAL CORP. | ||||||||||||
(Exact name of registrant as specified in its charter) | ||||||||||||
MARYLAND | 34-1981437 | |||||||||||
(State or other jurisdiction of incorporation or organization) | (I.R.S. 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 | |||||||||||
Securities registered pursuant to Section 12(b) of the Act: | ||||||||||||
Title of Each Class | Trading Symbol(s) | Name of each exchange which registered | ||||||||||
Common Stock, Par Value $0.01 per Share | MSBF | The Nasdaq Stock Market, LLC | ||||||||||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ] | ||||||||||||
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes [X] No [ ] | ||||||||||||
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act. | ||||||||||||
Large accelerated filer [ ] | Accelerated filer [X] | |||||||||||
Non-accelerated filer [ ] | Smaller reporting company [X] | |||||||||||
Emerging growth company [ ] | ||||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ] | ||||||||||||
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [X] | ||||||||||||
The number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date: | May 8, 2020 | |||||||||||
$0.01 par value common stock 5,184,914 shares outstanding |
Page Number | ||
PART I - FINANCIAL INFORMATION | ||
Item 1: | Consolidated Financial Statements (Unaudited) | |
Consolidated Statements of Financial Condition | ||
at March 31, 2020 and December 31, 2019 | ||
Consolidated Statements of Income for the Three | ||
Months Ended March 31, 2020 and 2019 | ||
Consolidated Statement of Changes in Stockholders’ Equity for the Three | ||
Months Ended March 31, 2020 and 2019 | ||
Consolidated Statements of Cash Flows for the Three Months | ||
Ended March 31, 2020 and 2019 | ||
Notes to Consolidated Financial Statements (Unaudited) | ||
Item 2: | Management's Discussion and Analysis of | |
Financial Condition and Results of Operations | ||
Item 3: | Quantitative and Qualitative Disclosures About Market Risk | |
Item 4: | Controls and Procedures | |
PART II - OTHER INFORMATION | ||
Item 1: | Legal Proceedings | |
Item 1A: | Risk Factors | |
Item 2: | Unregistered Sales of Equity Securities and Use of Proceeds | |
Item 3: | Defaults Upon Senior Securities | |
Item 4: | Mine Safety Disclosures | |
Item 5: | Other Information | |
Item 6: | Exhibits | |
SIGNATURES | ||
CERTIFICATIONS |
March 31, 2020 | December 31, 2019 | ||||||
(Dollars in thousands, except per share amounts) | |||||||
Cash and due from banks | $ | 1,242 | $ | 1,296 | |||
Interest-earning demand deposits with banks | 9,834 | 17,157 | |||||
Cash and Cash Equivalents | 11,076 | 18,453 | |||||
Securities held to maturity (fair value of $34,818 and $35,696, respectively) | 35,092 | 35,827 | |||||
Loans receivable, net of allowance for loan losses of $5,965 and $5,722, respectively | 522,941 | 508,022 | |||||
Premises and equipment, net | 7,876 | 8,020 | |||||
Federal Home Loan Bank of New York stock, at cost | 4,301 | 2,848 | |||||
Bank owned life insurance | 14,571 | 14,480 | |||||
Accrued interest receivable | 1,741 | 1,650 | |||||
Other assets | 2,837 | 3,786 | |||||
Total Assets | $ | 600,435 | $ | 593,086 | |||
Liabilities and Stockholders' Equity | |||||||
Liabilities | |||||||
Deposits: | |||||||
Non-interest bearing | $ | 45,856 | $ | 47,935 | |||
Interest bearing | 401,520 | 424,817 | |||||
Total Deposits | 447,376 | 472,752 | |||||
Advances from Federal Home Loan Bank of New York | 83,875 | 51,575 | |||||
Advance payments by borrowers for taxes and insurance | 776 | 722 | |||||
Other liabilities | 2,375 | 2,662 | |||||
Total Liabilities | 534,402 | 527,711 | |||||
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; 5,184,914 issued and outstanding at March 31, 2020 and December 31, 2019 | 52 | 52 | |||||
Paid-in capital | 41,955 | 41,857 | |||||
Retained earnings | 25,522 | 24,989 | |||||
Unearned common stock held by ESOP (165,844 and 168,538 shares, respectively) | (1,496 | ) | (1,523 | ) | |||
Total Stockholders' Equity | 66,033 | 65,375 | |||||
Total Liabilities and Stockholders' Equity | $ | 600,435 | $ | 593,086 |
Three months ended March 31, | ||||||||
(Dollars in thousands, except per share amounts) | 2020 | 2019 | ||||||
Interest Income: | ||||||||
Loans receivable, including fees | $ | 5,929 | $ | 5,691 | ||||
Securities | 228 | 285 | ||||||
Other | 71 | 132 | ||||||
Total Interest Income | 6,228 | 6,108 | ||||||
Interest Expense | ||||||||
Deposits | 1,385 | 1,126 | ||||||
Borrowings | 297 | 559 | ||||||
Total Interest Expense | 1,682 | 1,685 | ||||||
Net Interest Income | 4,546 | 4,423 | ||||||
Provision for Loan Losses | 250 | — | ||||||
Net Interest Income after Provision for Loan Losses | 4,296 | 4,423 | ||||||
Non-Interest Income | ||||||||
Fees and service charges | 122 | 72 | ||||||
Income from bank owned life insurance | 95 | 94 | ||||||
Other | 19 | 24 | ||||||
Total Non-Interest Income | 236 | 190 | ||||||
Non-Interest Expenses | ||||||||
Salaries and employee benefits | 1,731 | 1,728 | ||||||
Directors compensation | 132 | 129 | ||||||
Occupancy and equipment | 384 | 375 | ||||||
Service bureau fees | 200 | 95 | ||||||
Advertising | 1 | 7 | ||||||
FDIC assessment | 45 | 46 | ||||||
Professional services | 414 | 1,278 | ||||||
Merger expenses | 525 | — | ||||||
Other | 221 | 209 | ||||||
Total Non-Interest Expenses | 3,653 | 3,867 | ||||||
Income before Income Taxes | 879 | 746 | ||||||
Income Tax Expense | 346 | 232 | ||||||
Net Income | $ | 533 | $ | 514 | ||||
Earnings per share: | ||||||||
Basic | $ | 0.11 | $ | 0.10 | ||||
Diluted | $ | 0.11 | $ | 0.10 |
Common Stock | Paid-In Capital | Retained Earnings | Unallocated Common Stock Held by ESOP | Total Stockholders' Equity | ||||||||||||||||
(Dollars in Thousands) | ||||||||||||||||||||
Balance - January 1, 2019 | $ | 54 | $ | 44,726 | $ | 23,498 | $ | (1,632 | ) | $ | 66,646 | |||||||||
Net income | — | — | 514 | — | 514 | |||||||||||||||
Allocation of ESOP stock | — | 22 | — | 27 | 49 | |||||||||||||||
Repurchased Stock (22,000 shares) | — | (398 | ) | — | — | (398 | ) | |||||||||||||
Stock-based compensation | — | 81 | — | — | 81 | |||||||||||||||
Balance - March 31, 2019 | $ | 54 | $ | 44,431 | $ | 24,012 | $ | (1,605 | ) | $ | 66,892 | |||||||||
Balance - January 1, 2020 | $ | 52 | $ | 41,857 | $ | 24,989 | $ | (1,523 | ) | $ | 65,375 | |||||||||
Net income | — | — | 533 | — | 533 | |||||||||||||||
Allocation of ESOP stock | — | 16 | — | 27 | 43 | |||||||||||||||
Stock-based compensation | — | 82 | — | — | 82 | |||||||||||||||
Balance - March 31, 2020 | $ | 52 | $ | 41,955 | $ | 25,522 | $ | (1,496 | ) | $ | 66,033 | |||||||||
See notes to unaudited consolidated financial statements. |
(Dollars in thousands) | Three Months Ended March 31, | ||||||
Cash Flows from Operating Activities: | 2020 | 2019 | |||||
Net Income | $ | 533 | $ | 514 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Net accretion of securities premiums and discounts and deferred loan fees and costs | (70 | ) | (37 | ) | |||
Depreciation and amortization of premises and equipment | 144 | 140 | |||||
Stock-based compensation and allocation of ESOP stock | 125 | 130 | |||||
Amortization of right-of-use assets | 77 | 87 | |||||
Provision for loan losses | 250 | — | |||||
Income from bank owned life insurance | (91 | ) | (94 | ) | |||
Proceeds received from settlement of life insurance receivable | 663 | — | |||||
Increase in accrued interest receivable | (91 | ) | (157 | ) | |||
Decrease in other assets | 208 | 13 | |||||
Decrease in other liabilities | (285 | ) | (19 | ) | |||
Net Cash Provided By Operating Activities | 1,463 | 577 | |||||
Cash Flows from Investing Activities: | |||||||
Activity in held to maturity securities: | |||||||
Maturities, calls and principal repayments | 711 | 2,491 | |||||
Net (increase) decrease in loans receivable | (15,076 | ) | 12,382 | ||||
Proceeds from sales of loans | — | 512 | |||||
Purchase of bank premises and equipment | — | (48 | ) | ||||
Purchase of Federal Home Loan Bank of New York stock | (4,981 | ) | (2,705 | ) | |||
Redemption of Federal Home Loan Bank of New York stock | 3,528 | 4,055 | |||||
Net Cash (Used in) Provided by Investing Activities | (15,818 | ) | 16,687 | ||||
Cash Flows from Financing Activities: | |||||||
Net (decrease) increase in deposits | (25,376 | ) | 12,175 | ||||
Advances from Federal Home Loan Bank of New York | 32,300 | — | |||||
Repayment of advances from Federal Home Loan Bank of New York | — | (30,000 | ) | ||||
Increase (decrease) in advance payments by borrowers for taxes and insurance | 54 | (30 | ) | ||||
Repurchase of common stock | — | (398 | ) | ||||
Net Cash Provided by (Used in) Financing Activities | 6,978 | (18,253 | ) | ||||
Net Increase (Decrease) in Cash and Cash Equivalents | (7,377 | ) | (989 | ) | |||
Cash and Cash Equivalents – Beginning | 18,453 | 11,800 | |||||
Cash and Cash Equivalents – Ending | $ | 11,076 | $ | 10,811 | |||
Supplementary Cash Flows Information | |||||||
Interest paid | $ | 1,653 | $ | 1,679 | |||
Income taxes paid | — | — | |||||
Supplemental noncash disclosures | |||||||
Lease liabilities arising from obtaining right-of-use assets | $ | — | $ | 1,211 |
Three Months Ended March 31, | ||||||||
(In Thousands, Except Per Share Data) | 2020 | 2019 | ||||||
Numerator: | ||||||||
Net income | $ | 533 | $ | 514 | ||||
Denominator: | ||||||||
Weighted average common shares | 5,018 | 5,198 | ||||||
Dilutive potential common shares | 23 | 39 | ||||||
Weighted average fully diluted shares | 5,041 | 5,237 | ||||||
Earnings per share: | ||||||||
Basic | $ | 0.11 | $ | 0.10 | ||||
Dilutive | $ | 0.11 | $ | 0.10 |
(In Thousands) | Amortized Cost | Gross Unrecognized Gains | Gross Unrecognized Losses | Fair Value | |||||||||||
March 31, 2020 | |||||||||||||||
U.S. Government agencies: | |||||||||||||||
Due within one year | $ | — | $ | — | $ | — | $ | — | |||||||
Due after one year through five years | — | — | — | — | |||||||||||
Due after five through ten years | 3,000 | 14 | — | 3,014 | |||||||||||
Due after ten years | 3,000 | 9 | — | 3,009 | |||||||||||
Total U.S. Government agencies | 6,000 | 23 | — | 6,023 | |||||||||||
Mortgage-backed securities | 21,716 | 813 | 1 | 22,528 | |||||||||||
Corporate bonds: | |||||||||||||||
Due within one year | 1,500 | — | 2 | 1,498 | |||||||||||
Due after one year through five years | — | — | — | — | |||||||||||
Due after five through ten years | 1,000 | — | 75 | 925 | |||||||||||
Due after ten years | 4,000 | — | 1,045 | 2,955 | |||||||||||
Total Corporate bonds | 6,500 | — | 1,122 | 5,378 | |||||||||||
State and political subdivisions: | |||||||||||||||
Due within one year | 171 | — | — | 171 | |||||||||||
Due after one through five years | 705 | 13 | — | 718 | |||||||||||
Due after five through ten years | — | — | — | — | |||||||||||
Total State and political subdivisions | 876 | 13 | — | 889 | |||||||||||
Total Securities held to maturity | $ | 35,092 | $ | 849 | $ | 1,123 | $ | 34,818 |
(In Thousands) | Amortized Cost | Gross Unrecognized Gains | Gross Unrecognized Losses | Fair Value | |||||||||||
December 31, 2019 | |||||||||||||||
U.S. Government agencies: | |||||||||||||||
Due within one year | $ | — | $ | — | $ | — | $ | — | |||||||
Due after one year through five years | — | — | — | — | |||||||||||
Due after five through ten years | 3,000 | 11 | — | 3,011 | |||||||||||
Due thereafter | 3,000 | 2 | — | 3,002 | |||||||||||
Total U.S. Government Agencies | 6,000 | 13 | — | 6,013 | |||||||||||
Mortgage-backed securities | 22,451 | 300 | 37 | 22,714 | |||||||||||
Corporate bonds: | |||||||||||||||
Due within one year | 1,500 | 2 | — | 1,502 | |||||||||||
Due after one year through five years | — | — | — | — | |||||||||||
Due after five years through ten years | 1,000 | — | 44 | 956 | |||||||||||
Due thereafter | 4,000 | — | 381 | 3,619 | |||||||||||
Total Corporate bonds | 6,500 | 2 | 425 | 6,077 | |||||||||||
State and political subdivisions: | |||||||||||||||
Due within one year | 171 | — | — | 171 | |||||||||||
Due after one through five years | 705 | 16 | — | 721 | |||||||||||
Due after five through ten years | — | — | — | — | |||||||||||
Total State and political subdivisions | 876 | 16 | — | 892 | |||||||||||
Total Securities held to maturity | $ | 35,827 | $ | 331 | $ | 462 | $ | 35,696 |
Less than 12 Months | More than 12 Months | Total | |||||||||||||||||||||
Fair Value | Gross Unrecognized Losses | Fair Value | Gross Unrecognized Losses | Fair Value | Gross Unrecognized Losses | ||||||||||||||||||
(In Thousands) | |||||||||||||||||||||||
March 31, 2020 | |||||||||||||||||||||||
Mortgage-backed securities | $ | 883 | $ | 1 | $ | — | $ | — | $ | 883 | $ | 1 | |||||||||||
Corporate bonds | 1,498 | 2 | 3,880 | 1,120 | 5,378 | 1,122 | |||||||||||||||||
Total securities with gross unrecognized losses | $ | 2,381 | $ | 3 | $ | 3,880 | $ | 1,120 | $ | 6,261 | $ | 1,123 |
Less than 12 Months | More than 12 Months | Total | |||||||||||||||||||||
Fair Value | Gross Unrecognized Losses | Fair Value | Gross Unrecognized Losses | Fair Value | Gross Unrecognized Losses | ||||||||||||||||||
(In Thousands) | |||||||||||||||||||||||
December 31, 2019 | |||||||||||||||||||||||
Mortgage-backed securities | $ | 1,716 | $ | 8 | $ | 3,140 | $ | 29 | $ | 4,856 | $ | 37 | |||||||||||
Corporate bonds | — | — | 4,574 | 425 | 4,574 | 425 | |||||||||||||||||
Total securities with gross unrecognized losses | $ | 1,716 | $ | 8 | $ | 7,714 | $ | 454 | $ | 9,430 | $ | 462 |
(In Thousands) | March 31, 2020 | December 31, 2019 | |||||
Residential mortgage: | |||||||
One-to-four family | $ | 126,750 | $ | 130,966 | |||
Home equity | 22,616 | 22,853 | |||||
Total residential mortgages | 149,366 | 153,819 | |||||
Commercial loans: | |||||||
Commercial and multi-family real estate | 218,987 | 227,441 | |||||
Construction | 54,171 | 47,635 | |||||
Commercial and industrial - Secured | 66,045 | 63,462 | |||||
Commercial and industrial - Unsecured | 54,955 | 37,600 | |||||
Total commercial loans | 394,158 | 376,138 | |||||
Consumer: | 364 | 432 | |||||
Total loans receivable | 543,888 | 530,389 | |||||
Less: | |||||||
Loans in process | 14,479 | 16,109 | |||||
Deferred loan fees | 503 | 536 | |||||
Allowance for loan losses | 5,965 | 5,722 | |||||
Total adjustments | 20,947 | 22,367 | |||||
Loans receivable, net | $ | 522,941 | $ | 508,022 |
(In Thousands) | Residential Mortgage | Commercial and Multi-Family Real Estate | Construction | Commercial and Industrial | Consumer | Unallocated | Total | ||||||||||||||||||||
Three Months Ended March 31, 2020 | |||||||||||||||||||||||||||
Allowance for loan losses: | |||||||||||||||||||||||||||
Balance, beginning | $ | 1,746 | $ | 2,612 | $ | 433 | $ | 929 | $ | 2 | $ | — | $ | 5,722 | |||||||||||||
Provisions (credits) | (148 | ) | (107 | ) | 231 | 268 | 6 | — | 250 | ||||||||||||||||||
Loans charged-off | — | — | — | (9 | ) | (5 | ) | — | (14 | ) | |||||||||||||||||
Recoveries | 1 | — | — | 6 | — | — | 7 | ||||||||||||||||||||
Balance, ending | $ | 1,599 | $ | 2,505 | $ | 664 | $ | 1,194 | $ | 3 | $ | — | $ | 5,965 | |||||||||||||
March 31, 2020 allowance allocated to: | |||||||||||||||||||||||||||
Loans individually evaluated for impairment | $ | 122 | $ | 71 | $ | — | $ | — | $ | — | $ | — | $ | 193 | |||||||||||||
Loans collectively evaluated for impairment | 1,477 | 2,434 | 664 | 1,194 | 3 | — | 5,772 | ||||||||||||||||||||
Ending Balance | $ | 1,599 | $ | 2,505 | $ | 664 | $ | 1,194 | $ | 3 | $ | — | $ | 5,965 | |||||||||||||
March 31, 2020 loan balances evaluated for: | |||||||||||||||||||||||||||
Loans individually evaluated for impairment | $ | 10,220 | $ | 2,314 | $ | — | $ | 23 | $ | — | $ | — | $ | 12,557 | |||||||||||||
Loans collectively evaluated for impairment | 139,112 | 216,345 | 39,626 | 120,911 | 355 | — | 516,349 | ||||||||||||||||||||
Ending Balance | $ | 149,332 | $ | 218,659 | $ | 39,626 | $ | 120,934 | $ | 355 | $ | — | $ | 528,906 |
(In Thousands) | Residential Mortgage | Commercial and Multi-Family Real Estate | Construction | Commercial and Industrial | Consumer | Unallocated | Total | ||||||||||||||||||||
Three Months Ended March 31, 2019 | |||||||||||||||||||||||||||
Allowance for loan losses: | |||||||||||||||||||||||||||
Balance, beginning | $ | 2,115 | $ | 2,187 | $ | 222 | $ | 1,128 | $ | 3 | $ | — | $ | 5,655 | |||||||||||||
Provisions (credits) | (50 | ) | 137 | (2 | ) | (85 | ) | — | — | — | |||||||||||||||||
Loans charged-off | — | — | — | — | (1 | ) | — | (1 | ) | ||||||||||||||||||
Recoveries | 3 | — | — | — | 1 | — | 4 | ||||||||||||||||||||
Balance, ending | $ | 2,068 | $ | 2,324 | $ | 220 | $ | 1,043 | $ | 3 | $ | — | $ | 5,658 | |||||||||||||
March 31, 2019 allowance allocated to: | |||||||||||||||||||||||||||
Loans individually evaluated for impairment | $ | 250 | $ | 80 | $ | — | $ | 20 | $ | — | $ | — | $ | 350 | |||||||||||||
Loans collectively evaluated for impairment | 1,818 | 2,244 | 220 | 1,023 | 3 | — | 5,308 | ||||||||||||||||||||
Ending Balance | $ | 2,068 | $ | 2,324 | $ | 220 | $ | 1,043 | $ | 3 | $ | — | $ | 5,658 | |||||||||||||
March 31, 2019 loan balances evaluated for: | |||||||||||||||||||||||||||
Loans individually evaluated for impairment | $ | 11,634 | $ | 2,389 | $ | — | $ | 226 | $ | — | $ | — | $ | 14,249 | |||||||||||||
Loans collectively evaluated for impairment | 153,521 | 203,940 | 19,807 | 103,130 | 456 | — | 480,854 | ||||||||||||||||||||
Ending Balance | $ | 165,155 | $ | 206,329 | $ | 19,807 | $ | 103,356 | $ | 456 | $ | — | $ | 495,103 |
(In Thousands) | Residential Mortgage | Commercial and Multi-Family Real Estate | Construction | Commercial and Industrial | Consumer | Unallocated | Total | ||||||||||||||||||||
At December 31, 2019 | |||||||||||||||||||||||||||
Period-end allowance balances: | |||||||||||||||||||||||||||
Loans individually evaluated for impairment | $ | 234 | $ | 74 | $ | — | $ | — | $ | — | $ | — | $ | 308 | |||||||||||||
Loans collectively evaluated for impairment | 1,512 | 2,538 | 433 | 929 | 2 | — | 5,414 | ||||||||||||||||||||
Ending Balance | $ | 1,746 | $ | 2,612 | $ | 433 | $ | 929 | $ | 2 | $ | — | $ | 5,722 | |||||||||||||
Period-end loan balances evaluated for: | |||||||||||||||||||||||||||
Loans individually evaluated for impairment | $ | 10,199 | $ | 2,337 | $ | — | $ | 24 | $ | — | $ | — | $ | 12,560 | |||||||||||||
Loans collectively evaluated for impairment | 143,570 | 224,760 | 31,465 | 100,957 | 432 | — | 501,184 | ||||||||||||||||||||
Ending Balance | $ | 153,769 | $ | 227,097 | $ | 31,465 | $ | 100,981 | $ | 432 | $ | — | $ | 513,744 |
(In Thousands) | |||||||||||||||||||||||||||
As of March 31, 2020 | 30-59 Days Past Due and Still Accruing | 60-89 Days Past Due and Still Accruing | Greater than 90 Days and Still Accruing | Total Past Due and Still Accruing | Accruing Current Balances | Nonaccrual Loans | Total Loans Receivables | ||||||||||||||||||||
Residential Mortgage | |||||||||||||||||||||||||||
One-to-four family | $ | 3,423 | $ | 626 | $ | — | $ | 4,049 | $ | 121,172 | $ | 1,502 | $ | 126,723 | |||||||||||||
Home equity | 67 | 525 | — | 592 | 21,101 | 916 | 22,609 | ||||||||||||||||||||
Commercial and multi-family real estate | 365 | — | — | 365 | 217,312 | 982 | 218,659 | ||||||||||||||||||||
Construction | — | — | — | — | 39,626 | — | 39,626 | ||||||||||||||||||||
Commercial and industrial | 23 | — | — | 23 | 120,911 | — | 120,934 | ||||||||||||||||||||
Consumer | 4 | 2 | — | 6 | 349 | — | 355 | ||||||||||||||||||||
Total | $ | 3,882 | $ | 1,153 | $ | — | $ | 5,035 | $ | 520,471 | $ | 3,400 | $ | 528,906 |
(In Thousands) | |||||||||||||||||||||||||||
As of December 31, 2019 | 30-59 Days Past Due and Still Accruing | 60-89 Days Past Due and Still Accruing | Greater than 90 Days and Still Accruing | Total Past Due and Still Accruing | Accruing Current Balances | Nonaccrual Loans | Total Loans Receivables | ||||||||||||||||||||
Residential Mortgage | |||||||||||||||||||||||||||
One-to-four family | $ | 1,719 | $ | 287 | $ | — | $ | 2,006 | $ | 127,747 | $ | 1,169 | $ | 130,922 | |||||||||||||
Home equity | 160 | — | — | 160 | 21,744 | 943 | 22,847 | ||||||||||||||||||||
Commercial and multi-family real estate | 260 | — | — | 260 | 225,841 | 996 | 227,097 | ||||||||||||||||||||
Construction | — | — | — | — | 31,465 | — | 31,465 | ||||||||||||||||||||
Commercial and industrial | — | — | — | — | 100,981 | — | 100,981 | ||||||||||||||||||||
Consumer | 3 | — | — | 3 | 429 | — | 432 | ||||||||||||||||||||
Total | $ | 2,142 | $ | 287 | $ | — | $ | 2,429 | $ | 508,207 | $ | 3,108 | $ | 513,744 |
(In Thousands) | |||||||||||||||||||||||
March 31, 2020 | Recorded Investment | Loans with No Related Reserve | Loans with Related Reserve | Related Reserve | Contractual Principal Balance | Average Recorded Investment | |||||||||||||||||
Residential mortgage | |||||||||||||||||||||||
One-to-four family | $ | 8,608 | $ | 1,502 | $ | 7,106 | $ | 114 | $ | 9,272 | $ | 8,584 | |||||||||||
Home equity | 1,612 | 1,257 | 355 | 8 | 1,735 | 1,626 | |||||||||||||||||
Commercial and multi-family real estate | 2,314 | 1,346 | 968 | 71 | 3,067 | 2,326 | |||||||||||||||||
Construction | — | — | — | — | — | — | |||||||||||||||||
Commercial and industrial | 23 | 23 | — | — | 24 | 23 | |||||||||||||||||
Consumer | — | — | — | — | — | — | |||||||||||||||||
Total | $ | 12,557 | $ | 4,128 | $ | 8,429 | $ | 193 | $ | 14,098 | $ | 12,559 |
(In Thousands) | |||||||||||||||||||||||
December 31, 2019 | Recorded Investment | Loans with No Related Reserve | Loans with Related Reserve | Related Reserve | Contractual Principal Balance | Average Recorded Investment | |||||||||||||||||
Residential mortgage | |||||||||||||||||||||||
One-to-four family | $ | 8,560 | $ | 1,169 | $ | 7,391 | $ | 200 | $ | 9,215 | $ | 9,469 | |||||||||||
Home equity | 1,639 | 1,267 | 372 | 34 | 1,740 | 1,750 | |||||||||||||||||
Commercial and multi-family real estate | 2,337 | 1,362 | 975 | 74 | 3,080 | 2,357 | |||||||||||||||||
Construction | — | — | — | — | — | — | |||||||||||||||||
Commercial and industrial | 24 | 24 | — | — | 25 | 153 | |||||||||||||||||
Consumer | — | — | — | — | — | — | |||||||||||||||||
Total | $ | 12,560 | $ | 3,822 | $ | 8,738 | $ | 308 | $ | 14,060 | $ | 13,729 |
(In Thousands) | |||||||||||||||||||||||
As of March 31, 2020 | Pass | Special Mention | Substandard | Doubtful | Loss | Total | |||||||||||||||||
Commercial and multi-family real estate | $ | 215,825 | $ | 1,477 | $ | 1,357 | $ | — | $ | — | $ | 218,659 | |||||||||||
Construction | 39,626 | — | — | — | — | 39,626 | |||||||||||||||||
Commercial and industrial | 120,855 | 56 | 23 | — | — | 120,934 | |||||||||||||||||
Total | $ | 376,306 | $ | 1,533 | $ | 1,380 | $ | — | $ | — | $ | 379,219 |
(In Thousands) | |||||||||||||||||||||||
As of December 31, 2019 | Pass | Special Mention | Substandard | Doubtful | Loss | Total | |||||||||||||||||
Commercial and multi-family real estate | $ | 223,975 | $ | 1,490 | $ | 1,632 | $ | — | $ | — | $ | 227,097 | |||||||||||
Construction | 31,465 | — | — | — | — | 31,465 | |||||||||||||||||
Commercial and industrial | 100,838 | 58 | 85 | — | — | 100,981 | |||||||||||||||||
Total | $ | 356,278 | $ | 1,548 | $ | 1,717 | $ | — | $ | — | $ | 359,543 |
(In Thousands) | Residential mortgage | Consumer | Total Residential and Consumer | ||||||||||||||||||||
Mar 31, 2020 | Dec 31, 2019 | Mar 31, 2020 | Dec 31, 2019 | Mar 31, 2020 | Dec 31, 2019 | ||||||||||||||||||
Nonperforming | $ | 2,418 | $ | 2,112 | $ | — | $ | — | $ | 2,418 | $ | 2,112 | |||||||||||
Performing | 146,914 | 151,657 | 355 | 432 | 147,269 | 152,089 | |||||||||||||||||
Total | $ | 149,332 | $ | 153,769 | $ | 355 | $ | 432 | $ | 149,687 | $ | 154,201 |
• | Level 1 Inputs – Unadjusted quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. |
• | Level 2 Inputs – Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These might include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (such as interest rates, volatilities, prepayment speeds, credit risks, etc.) or inputs that are derived principally from or corroborated by market data by correlation or other means. |
• | Level 3 Inputs – Unobservable inputs for determining the fair values of assets or liabilities that reflect an entity's own assumptions about the assumptions that market participants would use in pricing the assets or liabilities. |
As of March 31, 2020 | |||||||||||||||
Level 1 Inputs | Level 2 Inputs | Level 3 Inputs | Total Fair Value | ||||||||||||
(In thousands) | |||||||||||||||
Impaired loans | $ | — | $ | — | $ | 347 | $ | 347 |
As of December 31, 2019 | |||||||||||||||
Level 1 Inputs | Level 2 Inputs | Level 3 Inputs | Total Fair Value | ||||||||||||
(In thousands) | |||||||||||||||
Impaired loans | $ | — | $ | — | $ | 338 | $ | 338 |
As of March 31, 2020 | |||||||||
Fair Value | Valuation Techniques | Unobservable Input | Range (Weighted Average) | ||||||
(Dollars in thousands) | |||||||||
Impaired loans | $ | 347 | Appraisal of collateral | Appraisal adjustments | 0% (0%) | ||||
Liquidation expense | 20.56% (20.56%) |
As of December 31, 2019 | |||||||||
Fair Value | Valuation Techniques | Unobservable Input | Range (Weighted Average) | ||||||
(Dollars in thousands) | |||||||||
Impaired loans | $ | 338 | Appraisal of collateral | Appraisal adjustments | 0% (0%) | ||||
Liquidation expense | 20.56% (20.56%) |
Carrying | Fair | Level 1 | Level 2 | Level 3 | |||||||||||||||
As of March 31, 2020 | Amount | Value | Inputs | Inputs | Inputs | ||||||||||||||
(In thousands) | |||||||||||||||||||
Financial assets: | |||||||||||||||||||
Cash and due from banks | $ | 11,076 | $ | 11,076 | $ | 11,076 | $ | — | $ | — | |||||||||
Securities held to maturity | 35,092 | 34,818 | — | 34,818 | — | ||||||||||||||
Loans receivable (1) | 522,941 | 524,431 | — | — | 524,431 | ||||||||||||||
Accrued interest receivable | 1,741 | 1,741 | — | 140 | 1,601 | ||||||||||||||
Financial liabilities: | |||||||||||||||||||
Deposits | 447,376 | 449,318 | — | 449,318 | — | ||||||||||||||
Advances from Federal Home Loan Bank of New York | 83,875 | 84,257 | — | 84,257 | — | ||||||||||||||
Advance payments by borrowers for taxes and insurance | 776 | 776 | — | 776 | — | ||||||||||||||
Accrued interest payable | 114 | 114 | — | 114 | — | ||||||||||||||
As of December 31, 2019 | |||||||||||||||||||
Financial assets: | |||||||||||||||||||
Cash and due from banks | $ | 18,453 | $ | 18,453 | $ | 18,453 | $ | — | $ | — | |||||||||
Securities held to maturity | 35,827 | 35,696 | — | 35,696 | — | ||||||||||||||
Loans receivable (1) | 508,022 | 506,634 | — | — | 506,634 | ||||||||||||||
Accrued interest receivable | 1,650 | 1,650 | — | 90 | 1,560 | ||||||||||||||
Financial liabilities: | |||||||||||||||||||
Deposits | 472,752 | 474,233 | — | 474,233 | — | ||||||||||||||
Advances from Federal Home Loan Bank of New York | 51,575 | 51,674 | — | 51,674 | — | ||||||||||||||
Advance payments by borrowers for taxes and insurance | 722 | 722 | — | 722 | — | ||||||||||||||
Accrued interest payable | 85 | 85 | — | 85 | — | ||||||||||||||
(1) Includes impaired loans measured at fair value on a non-recurring basis as discussed above. |
• | Statements of our goals, intentions and expectations; |
• | Statements regarding our business plans, prospects, growth and operating strategies; |
• | Statements regarding the quality of our loan and investment portfolios; and |
• | Estimates of our risks and future costs and benefits. |
• | General economic conditions, either nationally or in our market area, that are worse than expected; |
• | The volatility of the financial and securities markets, including changes with respect to the market value of our financial assets; |
• | Changes in government regulation affecting financial institutions and the potential expenses associated therewith; |
• | Changes in the interest rate environment that reduce our interest margins or reduce the fair value of financial instruments; |
• | Our ability to enter into new markets and/or expand product offerings successfully and take advantage of growth opportunities; |
• | Increased competitive pressures among financial services companies; |
• | Changes in consumer spending, borrowing and savings habits; |
• | Legislative or regulatory changes that adversely affect our business; |
• | Adverse changes in the securities markets; |
• | Our continued ability to manage cybersecurity risks; |
• | Our continued ability to successfully remediate our identified internal control weaknesses; |
• | Our ability to successfully manage our growth; and |
• | Changes in accounting policies and practices, as may be adopted by the bank regulatory agencies, the Financial Accounting Standards Board or the Public Company Accounting Oversight Board. |
For the three months ended | |||||||||||||||||||||
3/31/2020 | 3/31/2019 | ||||||||||||||||||||
Average Balance Sheet (In Thousands) | Average Balance | Interest Income/ Expense | Yield | Average Balance | Interest Income/ Expense | Yield | |||||||||||||||
Interest-earning assets: | |||||||||||||||||||||
Loans receivable | $ | 525,506 | $ | 5,929 | 4.51 | % | $ | 502,149 | $ | 5,691 | 4.53 | % | |||||||||
Securities held to maturity | 35,476 | 228 | 2.57 | % | 37,899 | 285 | 3.01 | % | |||||||||||||
Other interest-earning assets | 14,491 | 71 | 1.96 | % | 15,157 | 132 | 3.48 | % | |||||||||||||
Total interest-earning assets | 575,473 | 6,228 | 4.33 | % | 555,205 | 6,108 | 4.40 | % | |||||||||||||
Allowance for loan loss | (5,724 | ) | (5,656 | ) | |||||||||||||||||
Non-interest-earning assets | 28,670 | 27,621 | |||||||||||||||||||
Total non-interest-earning assets | 22,946 | 21,965 | |||||||||||||||||||
Total Assets | $ | 598,419 | $ | 577,170 | |||||||||||||||||
Interest-bearing liabilities: | |||||||||||||||||||||
Demand & money market | $ | 161,003 | $ | 455 | 1.13 | % | $ | 135,018 | $ | 367 | 1.09 | % | |||||||||
Savings and club deposits | 99,599 | 176 | 0.71 | % | 102,209 | 172 | 0.67 | % | |||||||||||||
Certificates of deposit | 153,227 | 754 | 1.97 | % | 130,207 | 587 | 1.80 | % | |||||||||||||
Total interest-bearing deposits | 413,829 | 1,385 | 1.34 | % | 367,434 | 1,126 | 1.23 | % | |||||||||||||
Federal Home Loan Bank advances | 70,049 | 297 | 1.70 | % | 92,780 | 559 | 2.41 | % | |||||||||||||
Total interest-bearing liabilities | 483,878 | 1,682 | 1.39 | % | 460,214 | 1,685 | 1.46 | % | |||||||||||||
Non-interest-bearing deposit | 44,950 | 46,962 | |||||||||||||||||||
Other non-interest-bearing liabilities | 3,306 | 2,623 | |||||||||||||||||||
Total Liabilities | 532,134 | 509,799 | |||||||||||||||||||
Equity | 66,285 | 67,371 | |||||||||||||||||||
Total Liabilities and Equity | 598,419 | 577,170 | |||||||||||||||||||
Net Interest Income | 4,546 | 2.94 | % | 4,423 | 2.94 | % | |||||||||||||||
Net Interest Margin | 3.16 | % | 3.19 | % | |||||||||||||||||
Ratio of Interest Earning Assets to Interest Bearing Liabilities | 118.93 | % | 120.64 | % |
Amended and Restated Bylaws of MSB Financial Corp. | |
Certification of CEO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
Certification of CFO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |
101.INS | XBRL Instance Document |
101.SCH | XBRL Schema Document |
101.CAL | XBRL Calculation Linkbase Document |
101.LAB | XBRL Labels Linkbase Document |
101.PRE | XBRL Presentation Linkbase Document |
101.DEF | XBRL Definition Linkbase Document |
MSB FINANCIAL CORP. | ||
(Registrant) | ||
Date May 8, 2020 | /s/ Michael A. Shriner | |
Michael A. Shriner | ||
President and Chief Executive Officer | ||
Date May 8, 2020 | /s/ John S. Kaufman | |
John S. Kaufman | ||
First Vice President and Chief Financial Officer |
May 8, 2020 | /s/ Michael A. Shriner | |
Date | Michael A. Shriner President and Chief Executive Officer |
May 8, 2020 | /s/ John S. Kaufman | |
Date | John S. Kaufman First Vice President and Chief Financial Officer |
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Corporation. |
/s/ Michael A. Shriner | /s/ John S. Kaufman | |
Michael A. Shriner | John S. Kaufman | |
President and CEO | First Vice President and CFO | |
May 8, 2020 | May 8, 2020 |
Earnings Per Share - Computation of Basic and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2020 |
Mar. 31, 2019 |
|
Numerator: | ||
Net income | $ 533 | $ 514 |
Denominator: | ||
Weighted average common shares (in shares) | 5,018,000 | 5,198,000 |
Dilutive potential common shares (in shares) | 23,000 | 39,000 |
Weighted average fully diluted shares (in shares) | 5,041,000 | 5,237,000 |
Earnings per share: | ||
Basic (in dollars per share) | $ 0.11 | $ 0.10 |
Dilutive (in dollars per share) | $ 0.11 | $ 0.10 |
Anti-dilutive securities (in shares) | 0 | 0 |
Securities Held to Maturity |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Securities Held to Maturity | Securities Held to Maturity All mortgage-backed securities at March 31, 2020 and December 31, 2019 have been issued by FNMA, FHLMC or GNMA and are secured by one-to-four family residential real estate. The amortized cost and fair value of securities held to maturity at March 31, 2020 and December 31, 2019, as shown below, are reported in total. Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. The amortized cost of securities held to maturity and their fair values as of March 31, 2020 and December 31, 2019 are summarized as follows:
There were no sales of securities held to maturity during the three month periods ended March 31, 2020 or 2019. At March 31, 2020 and December 31, 2019, securities held to maturity with an amortized cost and fair value of approximately $3.0 million, respectively, were pledged to secure public funds on deposit. The following tables set forth the gross unrecognized losses and fair value of securities in an unrecognized loss position as of March 31, 2020 and December 31, 2019, and the length of time that such securities have been in an unrecognized loss position.
At March 31, 2020, management concluded that the unrecognized losses summarized above (which related to two mortgage-backed securities and five corporate bonds, compared to ten mortgage-backed securities and three corporate bonds as of December 31, 2019) are temporary in nature since they are not related to the underlying credit quality of the issuer. As of March 31, 2020, the Company did not intend to sell these securities and it is not more-likely-than-not that the Company would be required to sell these securities prior to the anticipated recovery of the remaining amortized cost. Management believes that the losses above are primarily related to the change in market interest rates. Accordingly, the Company has not recognized any other-than-temporary impairment loss on these securities. |
Earnings Per Share (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Earnings Per Share, Basic and Diluted | The following table shows the computation of basic and diluted earnings per share:
|
Consolidated Statement of Changes in Stockholders' Equity - USD ($) $ in Thousands |
Total |
Common Stock |
Paid-In Capital |
Retained Earnings |
Unallocated Common Stock Held by ESOP |
---|---|---|---|---|---|
Beginning balance at Dec. 31, 2018 | $ 66,646 | $ 54 | $ 44,726 | $ 23,498 | $ (1,632) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net Income | 514 | 514 | |||
Allocation of ESOP stock | 49 | 22 | 27 | ||
Repurchased stock | (398) | (398) | |||
Stock-based compensation | 81 | 81 | |||
Ending balance at Mar. 31, 2019 | 66,892 | 54 | 44,431 | 24,012 | (1,605) |
Beginning balance at Dec. 31, 2019 | 65,375 | 52 | 41,857 | 24,989 | (1,523) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net Income | 533 | 0 | 533 | ||
Allocation of ESOP stock | 43 | 16 | 27 | ||
Stock-based compensation | 82 | 82 | |||
Ending balance at Mar. 31, 2020 | $ 66,033 | $ 52 | $ 41,955 | $ 25,522 | $ (1,496) |
Document And Entity Information - shares |
3 Months Ended | |
---|---|---|
Mar. 31, 2020 |
May 08, 2020 |
|
Document Entity Information [Abstract] | ||
Entity Registrant Name | MSB FINANCIAL CORP | |
Entity Central Index Key | 0001635261 | |
Current Fiscal Year End Date | --12-31 | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Filer Category | Accelerated Filer | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 5,184,914 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2020 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q1 | |
Entity Current Reporting Status | Yes | |
Amendment Flag | false |
Basis of Consolidated Financial Statement Presentation |
3 Months Ended |
---|---|
Mar. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Consolidated Financial Statement Presentation | Basis of Consolidated Financial Statement Presentation The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, the Bank, and the Bank's wholly owned subsidiary the Service Corp. All significant intercompany accounts and transactions have been eliminated in consolidation. These consolidated financial statements were prepared in accordance with instructions for Form 10-Q and Regulation S-X, and therefore, do not include all information or notes necessary for a complete presentation of financial condition, results of operations, and cash flows in conformity with accounting principles generally accepted in the United States of America ("GAAP"). In the opinion of management, all adjustments, consisting of only normal recurring adjustments or accruals, which are necessary for a fair presentation of the consolidated financial statements have been made at March 31, 2020 and for the three months ended March 31, 2020 and 2019. The results of operations for the three months ended March 31, 2020 are not necessarily indicative of the results which may be expected for an entire fiscal year or other interim periods. In preparing the consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the dates of the consolidated statements of financial condition and revenues and expenses for the periods then ended. Actual results could differ significantly from those estimates. Recent Accounting Pronouncements In June 2016, the FASB issued ASU No. 2016-13, "Measurement of Credit Losses on Financial Instruments." This ASU requires credit losses on most financial assets measured at amortized cost and certain other instruments to be measured using an expected credit loss model. Under this model, entities will estimate credit losses over the entire contractual term of the instrument. The standard is effective for public companies in annual and interim periods in fiscal years beginning after December 15, 2019. Early adoption is permitted, including adoption in an interim or annual period provided that the entire standard is adopted. We are currently evaluating the impact of ASU 2016-13 on our consolidated financial statements. We have taken steps to begin preparations for implementation, such as evaluating changes to our current loss recognition model and have selected an outside professional company's model to begin loading our data into and determining next steps. On October 16, 2019, the FASB voted to a delay the effective date of ASU 2016-13 for SEC filers who are smaller reporting companies (like the Company) and public entities that are not SEC filers and nonpublic entities. For these entities, the effective date for implementation of ASU 2016-13 has been deferred to fiscal years beginning after December 15, 2022, and interim periods within those fiscal years. We are still evaluating the impact of this ASU. |
Securities Held to Maturity - Held-to-maturity Securities in Unrealized Loss Positions (Details) - USD ($) $ in Thousands |
Mar. 31, 2020 |
Dec. 31, 2019 |
---|---|---|
Fair Value | ||
Less than 12 Months | $ 2,381 | $ 1,716 |
More than 12 Months | 3,880 | 7,714 |
Total | 6,261 | 9,430 |
Gross Unrecognized Losses | ||
Less than 12 Months | 3 | 8 |
More than 12 Months | 1,120 | 454 |
Total | 1,123 | 462 |
Mortgage-backed Securities | ||
Fair Value | ||
Less than 12 Months | 883 | 1,716 |
More than 12 Months | 0 | 3,140 |
Total | 883 | 4,856 |
Gross Unrecognized Losses | ||
Less than 12 Months | 1 | 8 |
More than 12 Months | 0 | 29 |
Total | 1 | 37 |
Corporate Bonds | ||
Fair Value | ||
Less than 12 Months | 1,498 | 0 |
More than 12 Months | 3,880 | 4,574 |
Total | 5,378 | 4,574 |
Gross Unrecognized Losses | ||
Less than 12 Months | 2 | 0 |
More than 12 Months | 1,120 | 425 |
Total | $ 1,122 | $ 425 |
Organization and Business |
3 Months Ended |
---|---|
Mar. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Business | Organization and Business MSB Financial Corp. (the "Company") is a Maryland-chartered corporation organized in 2014 to be the successor to MSB Financial Corp., a federal corporation ("Old MSB") upon completion of the second-step conversion of Millington Bank (the "Bank") from the two-tier mutual holding company structure to the stock holding company structure. MSB Financial, MHC (the "MHC") was the former mutual holding company for Old MSB prior to completion of the second-step conversion. In conjunction with the second-step conversion, each of the MHC and Old MSB ceased to exist. The Company's principal business is the ownership and operation of the Bank. The Bank is a New Jersey-chartered stock savings bank and its deposits are insured by the Federal Deposit Insurance Corporation. The primary business of the Bank is attracting retail deposits from the general public and using those deposits together with funds generated from operations, principal repayments on securities and loans and borrowed funds, for its lending and investing activities. The Bank's loan portfolio primarily consists of one-to-four family and home equity residential loans, commercial and multi-family real estate loans, commercial and industrial loans, and construction loans. It also invests in U.S. government obligations, corporate bonds, state and political subdivisions, certificates of deposit and mortgage-backed securities. The Bank is regulated by the New Jersey Department of Banking and Insurance and the Federal Deposit Insurance Corporation. The Board of Governors of the Federal Reserve System (the "Federal Reserve") regulates the Company as a bank holding company. The primary business of Millington Savings Service Corp (the "Service Corp"), the Bank's wholly-owned subsidiary, was the ownership and operation of a single commercial rental property. This property was sold during the year ended June 30, 2007. Currently the Service Corp is inactive. Risks and Uncertainties The outbreak of COVID-19 has caused significant disruptions in the U.S. economy and has created disruption within the markets where the Company primarily operates. While there has been no material impact to the Company’s operations, COVID-19 could potentially create a business continuity issue for the Company. The Company was able to quickly and effectively deploy low cost resources to its employees so that all employees, excluding branch personnel, could operate remotely. Branch hours and operations were modified to best accommodate its staff and customers and remain compliant with State Executive Orders. If the global response to contain COVID-19 escalates further or is unsuccessful, the Company could experience a material adverse effect on its business, financial condition, results of operations and cash flows, specifically with regards to the allowance for losses and related provision. Congress, the President, and the Federal Reserve have taken actions to help with the economic fallout. The Coronavirus Aid, Relief and Economic Security (“CARES”) Act was signed into law at the end of March 2020 as a $2 trillion legislative package. The goal of the CARES Act is to prevent a severe economic downturn through various measures, including direct financial aid to American families and economic stimulus to significantly impacted industry sectors. In addition, Governor Murphy announced on March 28, 2020, that financial institutions will provide mortgage forbearance and financial protections for the people of New Jersey facing economic hardship as a result of COVID-19 which could have a material impact on the Company's operations. |
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