MIDLAND PARK, N.J., May 10, 2018 (GLOBE NEWSWIRE) -- Stewardship Financial Corporation (NASDAQ:SSFN), parent company of Atlantic Stewardship Bank, announced net income for the three months ended March 31, 2018 of $1.8 million, or $0.21 per share, compared to $991,000, or $0.16 per share for the three months ended March 31, 2017.

“We continue to strive to build on our past success and remain committed to creating stronger momentum as the year progresses,” stated Paul Van Ostenbridge, Stewardship Financial Corporation’s President and Chief Executive Officer.

Operating Results
Net interest income and net interest margin were $6.8 million and 3.15% for the first quarter of 2018 compared to $6.2 million and 3.23% for the comparable period a year earlier.  "Notwithstanding a tighter margin, our reported net interest income reflected the benefit from the increase in assets on a year-over-year basis," noted Van Ostenbridge.

Results for the three months ended March 31, 2018 benefited from the Corporation recording a negative provision for loan losses of $335,000 as compared to the positive $300,000 provision for loan losses for the three months ended March 31, 2017.  The March 2018 reversal of a portion of the allowance for loan losses is reflective of continued improvement in both the Corporation's loss experience and overall economic conditions, including the real estate climate in the Corporation's primary business markets.

The Corporation reported noninterest income of $725,000 for the three months ended March 31, 2018 compared to $799,000 for the comparable prior year three-month period.  The three months ended March 31, 2018 included a negative $74,000 mark to market adjustment of a CRA investment which is classified as an equity security.  Such security has been owned for years for CRA purposes, but under newly enacted accounting rules, equity securities now require a quarterly mark to market through the income statement.  When comparing the current year period to the prior year period, an increase in income from the purchase of additional bank-owned life insurance in the second quarter of 2017 was generally offset by a decline in fees and service charges.

Total noninterest expenses were $5.4 million for the three months ended March 31, 2018 compared to the $5.1 million incurred in the prior year period.  “The Corporation continues to appropriately control expenses as the balance sheet grows,” stated Van Ostenbridge.  The largest increase in expense was seen in salaries and employee benefits, which increased $265,000 in the current quarter when compared to the three months ended March 31, 2017.  In addition to normal salary increases, the increase includes the costs associated with the establishment of a Small Business Administration (SBA) Lending Department - fully staffed with experienced employees.  Costs associated with a harsh winter in 2018 are reflected as an increase in occupancy expenses.

The first quarter of 2018 results included the impact of a reduction in the Federal corporate income tax rate from 35% to 21% as a result of the enactment of the Tax Cuts and Jobs Act (“Tax Act”) in December 2017.  For the current year period the effective tax rate was 26.4% compared to an effective tax rate of 36.7% for the three months ended March 31, 2017.

Balance Sheet / Financial Condition
Total assets at March 31, 2018 were $922.4 million compared to $928.8 million of assets at December 31, 2017.  Growth in the loan portfolio from new originations was offset by several large loan payoffs during the current quarter.  According to Van Ostenbridge, “Certain of the payoffs during the quarter represented lower yielding loans and now provides an opportunity to redeploy the assets into higher yielding loans.”

Total deposits were $772.2 million at March 31, 2018, reflecting net growth of $8.1 million since December 31, 2017.  The Corporation continues to experience growth in both noninterest-bearing and interest-bearing deposits.

At March 31, 2018, the Corporation’s Tier 1 leverage ratio and total risk based capital ratio were 9.04% and 14.40%, respectively.  These ratios are both significantly above the respective 4.0% and 8% minimum levels required and result in categorizing the Corporation as a “well capitalized” institution under regulatory guidelines.

About Stewardship Financial Corporation
Stewardship Financial Corporation’s subsidiary, the Atlantic Stewardship Bank, has 12 banking offices in Midland Park, Hawthorne, Montville, Morristown, North Haledon, Pequannock, Ridgewood, Waldwick, Wayne (2), Westwood and Wyckoff, New Jersey.  The Bank is known for tithing 10% of its pre-tax profits to Christian and local charities.  To date, the Bank’s tithe donations total over $10.1 million.

We invite you to visit our website at www.asbnow.com for additional information.

The information disclosed in this document contains certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, and may be identified by the use of such words as “believe,” “expect,” “anticipate,” “should,” “plan,” “estimate,” and “potential.”  Examples of forward-looking statements include, but are not limited to, estimates with respect to the financial condition, results of operations and business of the Corporation that are subject to various factors which could cause actual results to differ materially from these estimates.  These factors include changes in general, economic and market conditions, legislative and regulatory conditions, or the development of an interest rate environment that adversely affects the Corporation’s interest rate spread or other income anticipated from operations and investments.

Contact:
Claire M. Chadwick
Executive Vice President and
Chief Financial Officer
630 Godwin Avenue
Midland Park, NJ 07432
P: 201.444.7100