Clifton Bancorp Inc. Announces Financial Results for the First Quarter Ended June 30, 2015

CLIFTON, N.J.--()--Clifton Bancorp Inc. (Nasdaq:CSBK), the holding company for Clifton Savings Bank, today announced results for the first quarter ended June 30, 2015. Net income for the first quarter was $1.66 million ($0.07 per diluted share). This compares to net income of $1.62 million ($0.06 per diluted share) for the first quarter ended June 30, 2014.

Notable Items

  • Quarterly net income increased 2.2% to $1.66 million compared to the quarter ended June 30, 2014;
  • One- to four-family real estate loans increased $14.1 million or 2.5% for the three months ended June 30, 2015;
  • Nonperforming loans to total gross loans decreased to 0.81% at June 30, 2015;
  • Net interest margin increased 8 basis points compared to the first quarter ended June 30, 2014; and
  • 1,477,924 shares of common stock were repurchased during the first quarter of 2015.

Paul M. Aguggia, Chairman, President, and Chief Executive Officer, stated, “We are pleased that our net income increased, albeit slightly, despite important and on-going investments in personnel, products and services and an intensely competitive market for loans. We are continuing to build our business while paying close attention to prudent asset growth, loan quality and cost of funds. We also made a significant investment in our Company by repurchasing 1,477,924 shares of common stock during the first quarter of fiscal 2016 at a weighted average share price of $13.78.”

Balance Sheet and Credit Quality Review

Total assets decreased $34.2 million, or 2.9%, to $1.15 billion at June 30, 2015, from $1.19 billion at March 31, 2015. The decrease in total assets was primarily due to our continued management of the cost of funds by allowing controlled, higher priced time deposit runoff coupled with a decrease in cash, which was used primarily to repurchase common stock.

Net loans increased $13.7 million, or 2.1%, to $654.8 million at June 30, 2015 from $641.1 million at March 31, 2015 primarily due to growth in the residential real estate loan portfolio. The commercial and multi-family real estate loan portfolio held steady but originations slowed due to competition. Securities, including both available for sale and held to maturity issues, decreased $23.5 million, or 5.6%, to $395.4 million at June 30, 2015 from $418.9 million at March 31, 2015, mainly as the result of calls, maturities and repayments on securities. Securities totaling $1.9 million were sold during the quarter ended June 30, 2015, resulting in a gain of $72,000. Cash and cash equivalents decreased $25.8 million, or 52.3%, to $23.5 million at June 30, 2015 from $49.3 million at March 31, 2015.

Deposits decreased $14.2 million, or 2.0%, to $685.2 million at June 30, 2015 from $699.5 million at March 31, 2015, mainly due to the previously noted planned run-off of higher priced time deposits. Total stockholders’ equity decreased $20.2 million, or 5.5%, to $347.8 million at June 30, 2015 from $368.0 million at March 31, 2015, as a result of $20.4 million in repurchases of common stock, and $3.0 million in cash dividends.

Non-accrual loans decreased $308,000, or 5.5%, to $5.3 million at June 30, 2015 from $5.6 million at March 31, 2015. Included in non-accrual loans at June 30, 2015 were ten loans totaling $2.0 million that were current or less than 90 days delinquent, but which were previously 90 days or more delinquent and on a non-accrual status pending a sustained period of repayment performance (generally six months). The percentage of nonperforming loans to total gross loans decreased to 0.81% at June 30, 2015 from 0.88% at March 31, 2015. The allowance for loan losses to nonperforming loans increased to 66.01% at June 30, 2015 from 61.53% at March 31, 2015.

During the first quarter ended June 30, 2015, net charge-offs totaled approximately $23,000 as compared to no charge-offs recorded during the quarter ended March 31, 2015. Charge-offs for the June 30, 2015 quarter related to three residential real estate loans, net of a partial recovery from a private mortgage insurance claim on a loan charged-off in a previous quarter.

Income Statement Review

Net interest income increased $176,000, or 2.8%, to $6.58 million for the quarter ended June 30, 2015 as compared to $6.40 million for quarter ended June 30, 2014, reflecting an increase of $71.2 million in average net interest-earning assets, coupled with an increase of 8 basis points in net interest margin.

The provision for loan losses decreased $65,000, or 47.1%, for the first quarter ended June 30, 2015, as compared to the first quarter of 2014. The decrease in the provision for loan losses for the 2015 period was mainly the result of overall favorable trends in qualitative factors related to delinquencies considered in the periodic review of the general valuation allowance.

Non-interest income increased $166,000, or 47.7%, to $514,000 for the first quarter ended June 30, 2015 from $348,000 for the first quarter ended June 30, 2014. The increase was mainly attributable to an increase in income from bank owned life insurance and a gain of $72,000 on sales of securities. Securities totaling $1.9 million were sold during the quarter ended June 30, 2015, resulting in a gain of $72,000. No securities were sold in the first quarter of 2014. The sale related to mortgage-backed securities that had a small amount of principal remaining relative to the principal balance purchased.

Non-interest expenses increased $378,000, or 9.1%, to $4.52 million for the first quarter ended June 30, 2015, as compared to $4.14 million for the first quarter ended June 30, 2014. The increase was driven by increases in salaries and employee benefits, equipment expense and professional services. The increase in salaries and employee benefits includes typical annual increases in compensation and benefits expenses and costs related to the hiring of additional personnel, as well as a related increase in employee stock ownership plan expense. The increase in equipment expense for the quarter ended June 30, 2015 related to the increase in costs for the development and implementation of new products. Professional services included an increase in legal fees primarily related to the development and implementation of products and services and the Bank’s branding and marketing efforts.

About Clifton Bancorp Inc.

Clifton Bancorp Inc. is the holding company of Clifton Savings Bank, a federally chartered savings bank headquartered in Clifton, New Jersey. Clifton Savings Bank is an organization with dedicated people serving communities, residents and businesses. Clifton Savings operates 11 full-service banking offices located in the diverse and vibrant Northeastern counties of New Jersey.

Forward-Looking Statements

Clifton Bancorp makes forward-looking statements in this news release. These forward-looking statements may include: statements of goals, intentions, earnings expectations, and other expectations; estimates of risks and of future costs and benefits; assessments of probable loan and lease losses; assessments of market risk; and statements of the ability to achieve financial and other goals.

Forward-looking statements are typically identified by words such as “believe,” “expect,” “anticipate,” “intend,” “outlook,” “estimate,” “forecast,” “project” and other similar words and expressions. Forward-looking statements are subject to numerous assumptions, risks and uncertainties, which change over time. Forward-looking statements speak only as of the date they are made. Clifton Bancorp does not assume any duty and does not undertake to update its forward-looking statements. Because forward-looking statements are subject to assumptions and uncertainties, actual results or future events could differ, possibly materially, from those that Clifton Bancorp anticipated in its forward-looking statements and future results could differ materially from historical performance.

Clifton Bancorp’s forward-looking statements are subject to the following principal risks and uncertainties: general economic conditions and trends, either nationally or locally; conditions in the securities markets; changes in interest rates; changes in deposit flows, and in the demand for deposit, loan, and investment products and other financial services; changes in real estate values; changes in the quality or composition of the loan or investment portfolios; changes in competitive pressures among financial institutions or from non-financial institutions; the ability to retain key members of management; changes in legislation, regulations, and policies; and a variety of other matters which, by their nature, are subject to significant uncertainties. Clifton Bancorp provides greater detail regarding some of these factors in the “Risk Factors” section of its Annual Report on Form 10-K, which was filed on June 5, 2015. Clifton Bancorp’s forward-looking statements may also be subject to other risks and uncertainties, including those that it may discuss elsewhere in this news release or in its filings with the SEC, accessible on the SEC’s website at www.sec.gov.

Selected Consolidated Financial Condition Data
 
  At June 30,   At March 31,
2015   2015
(In thousands)
Financial Condition Data:

Total assets

$

1,152,707

 

$

1,186,924

 

Loans receivable, net 654,802 641,084
Cash and cash equivalents 23,498 49,308
Securities 395,386 418,875
Deposits 685,248 699,476
FHLB advances 107,500 107,500
Total stockholders' equity 347,764 368,001
 
 
Selected Consolidated Operating Data
Three Months
Ended June 30,
2015   2014
(In thousands, except
share and per share data)
Operating Data:
Interest income $ 8,712 $ 8,712
Interest expense   2,135     2,311  
Net interest income 6,577 6,401
Provision for loan losses   73     138  

Net interest income after provision for loan losses

6,504 6,263
Non-interest income 514 348
Non-interest expenses   4,515     4,137  
Income before income taxes 2,503 2,474
Income taxes   845     852  
Net income $ 1,658   $ 1,622  
Basic and diluted earnings per share $ 0.07   $ 0.06  
 
Average shares outstanding - basic 25,421 25,244
Average shares outstanding - diluted 25,494 25,413
 
Average Balance Table
    Three Months Ended June 30,
2015   2014
Interest     Interest  
Average and Yield/ Average and Yield/

Balance

Dividends

Cost

Balance

Dividends

Cost

Assets: (Dollars in thousands)
Interest-earning assets:
Loans receivable $

646,459

 

$

5,984

 

3.70 % $

597,112

 

$

5,676

 

3.80 %
Mortgage-backed securities 279,074 1,942 2.78 % 306,831 2,365 3.08 %
Investment securities 128,390 709 2.21 % 141,681 590 1.67 %
Other interest-earning assets   34,236     77   0.90 %   50,128     81   0.65 %
Total interest-earning assets 1,088,159   8,712   3.20 % 1,095,752   8,712   3.18 %
 
Non-interest-earning assets   81,378     149,253  
Total assets $ 1,169,537   $ 1,245,005  
 
Liabilities and stockholders' equity:
Interest-bearing liabilities:
Demand accounts $ 54,037 15 0.11 % $ 56,799 18 0.13 %
Savings and Club accounts 141,798 58 0.16 % 143,501 63 0.18 %
Certificates of deposit   482,464     1,500   1.24 %   533,040     1,636   1.23 %
Total interest-bearing deposits 678,299 1,573 0.93 % 733,340 1,717 0.94 %
FHLB Advances   107,500     562   2.09 %   131,250     594   1.81 %
Total interest-bearing liabilities 785,799   2,135   1.09 % 864,590   2,311   1.07 %
 
Non-interest-bearing liabilities:
Non-interest-bearing deposits 13,556 12,452
Other non-interest-bearing liabilities   11,699     13,281  
Total non-interest-bearing liabilities 25,255 25,733
 
Total liabilities 811,054 890,323
Stockholders' equity   358,483     354,682  
Total liabilities and stockholders' equity $ 1,169,537   $ 1,245,005  
 
Net interest income $ 6,577   $ 6,401  
Interest rate spread 2.11 % 2.11 %
Net interest margin 2.42 % 2.34 %

Average interest-earning assets to average interest-bearing liabilities

1.38 x 1.27 x
 
Asset Quality Data
  Three   Three   Three
Months Months Months
Ended Ended Ended
June 30, March 31, June 30,
2015 2015 2014
(Dollars in thousands)
Allowance for loan losses:
Allowance at beginning of period $ 3,475 $ 3,375 $ 3,071
Provision for loan losses 73 100 138
 
Charge-offs (26 ) - (84 )
Recoveries   3     -     -  
Net charge-offs (23 ) - (84 )
     
Allowance at end of period $ 3,525   $ 3,475   $ 3,125  
 
Allowance for loan losses to total gross loans 0.54 % 0.54 % 0.51 %
Allowance for loan losses to nonperforming loans 66.01 % 61.53 % 57.12 %
 
 
At June 30, At March 31, At June 30,
2015 2015 2014
(Dollars in thousands)
Nonperforming Assets:
Nonaccrual loans:
One- to four-family real estate $ 4,258 $ 4,555 $ 5,188
Multi-family real estate 574 581 -
Commercial real estate 436 439 246
Consumer real estate   72     73     37  
Total nonaccrual loans 5,340 5,648 5,471
Real estate owned   -     -     124  
Total nonperforming assets $ 5,340   $ 5,648   $ 5,595  
 
Total nonperforming loans to total gross loans 0.81 % 0.88 % 0.89 %
Total nonperforming assets to total assets 0.46 % 0.48 % 0.45 %
 
 
Selected Consolidated Financial Ratios
Three Months
Ended June 30,

Selected Performance Ratios (1):

2015 2014
Return on average assets 0.57 % 0.52 %
Return on average equity 1.85 % 1.83 %
Interest rate spread 2.11 % 2.11 %
Net interest margin 2.42 % 2.34 %
Non-interest expenses to average assets 1.54 % 1.33 %
Efficiency ratio (2) 63.67 % 61.30 %

Average interest-earning assets to average interest-bearing liabilities

1.38x 1.27x
Average equity to average assets 30.65 % 28.49 %
Dividend payout ratio 180.16 % 186.56 %
Net change-offs to average outstanding loans during the period 0.00 % 0.01 %
(1)   Performance ratio are annualized.
(2) Represents non-interest expense divided by the sum of net interest income and non-interest income including gains and losses on the sale of assets.
 
Quarterly Data   Quarter Ended
June 30,   March 31,   December 31,   September 30,   June 30,

2015

2015

2014

2014

2014

(In thousands except shares and per share data)

Operating Data

Interest income $ 8,712 $ 8,558 $ 8,993 $ 8,899 $ 8,712
Interest expense   2,135     2,157     2,249     2,317     2,311  
Net interest income 6,577 6,401 6,744 6,582 6,401
Provision for loan losses   73     100     178     301     138  

Net interest income after provision for loan losses

6,504 6,301 6,566 6,281 6,263
Non-interest income 514 3,094 397 474 348
Non-interest expenses   4,515     4,362     4,075     4,532     4,137  
Income before income taxes 2,503 5,033 2,888 2,223 2,474
Income taxes   845     1,520     948     744     852  
Net income $ 1,658   $ 3,513   $ 1,940   $ 1,479   $ 1,622  
 

Share Data

Basic earnings per share $ 0.07 $ 0.14 $ 0.08 $ 0.06 $ 0.06
Diluted earnings per share $ 0.07 $ 0.13 $ 0.08 $ 0.06 $ 0.06
Dividends per share $ 0.12 $ 0.06 $ 0.06 $ 0.06 $ 0.12
Average shares outstanding - basic 25,421 25,979 25,594 25,333 25,244
Average shares outstanding - diluted 25,494 26,073 25,728 25,521 25,413
Shares outstanding at period end 25,960 27,326 27,145 26,676 26,596
 

Financial Condition Data

Total assets $ 1,152,707 $ 1,186,924 $ 1,198,171 $ 1,211,527 $ 1,231,730
Loans receivable, net 654,802 641,084 628,872 617,024 610,950
Cash and cash equivalents 23,498 49,308 45,668 74,979 85,042
Securities 395,386 418,875 446,511 454,595 470,605
Deposits 685,248 699,476 711,486 731,070 736,557
FHLB advances 107,500 107,500 112,500 112,500 127,500
Total stockholders' equity 347,764 368,001 363,765 357,693 356,491
 

Assets Quality:

Total nonperforming assets $ 5,340 $ 5,648 $ 3,994 $ 4,509 $ 5,595
Total nonperforming loans to total gross loans 0.81 % 0.88 % 0.63 % 0.73 % 0.89 %
Total nonperforming assets to total assets 0.46 % 0.48 % 0.33 % 0.37 % 0.45 %
Allowance for loan losses $ 3,525 $ 3,475 $ 3,375 $ 3,250 $ 3,125
Allowance for loan losses to total gross loans 0.54 % 0.54 % 0.54 % 0.53 % 0.51 %
Allowance for loan losses to nonperforming loans 66.01 % 61.53 % 84.50 % 72.08 % 57.12 %

Contacts

Clifton Bancorp Inc.
Bart D’Ambra, 973-473-2200

Contacts

Clifton Bancorp Inc.
Bart D’Ambra, 973-473-2200