By a News Reporter-Staff News Editor at Investment Weekly News -- Clifton Bancorp Inc. (NasdaqGS: CSBK), the holding company for Clifton Savings Bank, announced results for the quarter ended June 30, 2014. Net income for the first quarter was $1.62 million ($0.06 per diluted share). This compares to net income of $1.75 million ($0.07 per diluted share) for the quarter ended June 30, 2013 and net income of $1.56 million ($0.06 per diluted share) for the quarter ended March 31, 2014. First Quarter Highlights Completed the conversion to a fully public company on April 1, 2014;
Capital strong at 28.9% of total assets at June 30, 2014;
Combined cash dividend of $0.12 per common share for the quarters ended December 31, 2013 and March 31, 2014 declared and paid;
Loan growth solid at 4.5% quarter over quarter.
Paul M. Aguggia, the Company's Chairman, Chief Executive Officer and President, stated, "In our first fiscal quarter since the completion of our conversion to a fully-public company, we have taken several steps to set the stage for future growth. We have instituted several marketing and customer outreach efforts to grow our franchise organically and we are in the process of a core processor change that will bolster our product and service offerings. These initiatives require material investment, but we expect meaningful returns. Our largest expenditures will relate to the system conversion and could reach or exceed $600,000 over the next two quarters. We also continue to emphasize commercial and residential lending as key drivers of revenue, and we are pleased with our solid 4.5% quarter over quarter loan growth. All of our plans are being pursued with keen focus on maintaining pristine asset quality, expense discipline, and building stockholder value." Review of Balance Sheet and Credit Quality The Company's total assets decreased $34.3 million, or 2.7%, to $1.23 billion at June 30, 2014, from $1.27 billion at March 31, 2014. The decrease in total assets was primarily due to the Company's decision to use excess liquidity to pay down a borrowing during the quarter ended June 30, 2014, as well as manage deposits by allowing certain promotional rates to expire. In addition, the stock subscription deposits received in connection with the Company's second-step conversion were reflected in the Company's total assets at March 31, 2014. Net loans increased $26.4 million, or 4.5%, to $611.0 million at June 30, 2014 from $584.5 million at March 31, 2014 mainly due to origination volume and purchases of one- to four-family loans being higher than repayment levels. One- to four-family loans increased 2.6% from last quarter. The increase in net loans for the period also includes an increase in multi-family and commercial real estate loans of $13.1 million, or 28.1%, quarter over quarter. Securities, including both available for sale and held to maturity issues, increased $48.3 million, or 11.4%, to $470.6 million at June 30, 2014 from $422.3 million at March 31, 2014, primarily as a result of deployment of cash received in the second step conversion. Cash and cash equivalents decreased $107.6 million, or 55.8%, to $85.0 million at June 30, 2014 from $192.6 million at March 31, 2014, because of the inclusion of stock subscription deposits of $154.3 million at March 31, 2014. After the completion of the second-step conversion, a large portion of cash and cash equivalents were redeployed into higher- yielding assets.
Deposits decreased $27.3 million, or 3.6%, to $736.6 million at June 30, 2014 from $763.9 million at March 31, 2014, mainly due to the withdrawal of monies previously received from a promotional rate passbook account. In addition, $5.9 million in deposits outstanding on March 31, 2014 were used to purchase stock in the subscription offering. Borrowed funds decreased $15.0 million, or 10.5%, to $127.5 million at June 30, 2014 from $142.5 million at March 31, 2014, as one borrowing was repaid in accordance with its original terms during the period. The average rate of outstanding borrowings as of June 30, 2014 was 1.83%. All outstanding borrowings are with the Federal Home Loan Bank of New York.
Total stockholders' equity increased $162.4 million, or 83.6%, to $356.5 million at June 30, 2014 from $194.1 million at March 31, 2014. The increase resulted primarily from net proceeds from the second-step conversion of $163.3 million, and net income of $1.6 million, partially offset by cash dividends paid of $3.0 million.
Non-accrual loans increased $339,000, or 6.6%, to $5.5 million at June 30, 2014 from $5.1 million at March 31, 2014. Included in non-accrual loans at June 30, 2014 were thirteen loans totaling $3.0 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 until there is a sustained period of repayment performance (generally six months). The percentage of non-performing loans to total loans increased to 0.89% at June 30, 2014, from 0.88% at March 31, 2014. The percentage of allowance for loan losses to nonperforming loans decreased to 57.12% at June 30, 2014 from 59.84% at March 31, 2014.
During the three months ended June 30, 2014, net charge-offs totaled $84,000 as compared to $92,000 during the three months ended March 31, 2014, and $40,000 during the three months ended June 30, 2013. For the three months ended June 30, 2014, there were charge-offs on two one- to four-family residential real estate loans. The charge-off for the three months ended March 31, 2014 related to one one- to four-family residential real estate loan, net of a partial recovery from a private mortgage insurance claim on a loan that was charged-off in late 2012. For the 2013 period, the charge-off related to a one- to four-family residential real estate loan, net of a partial recovery from a private mortgage insurance claim on the same loan noted above. Income Statement Review Net interest income increased $728,000, or 12.8%, for the three months ended June 30, 2014, to $6.40 million, as compared to $5.67 million for three months ended June 30, 2013, reflecting an increase of $91.1 million in average net interest-earning assets partially offset by a decrease of 3 basis points in net interest margin. Average interest-earning assets increased $138.0 million, or 14.4%, during the three months ended June 30, 2014, as compared to the three months ended June 30, 2013, which consisted of increases of $124.9 million in loans, $15.5 million in investment securities, and $30.5 million in other interest-earning assets, partially offset by a decrease of $32.9 million in mortgage-backed securities. The average balance of loans increased as the Bank continues to emphasize the growth of its loan portfolio (through loan originations, as supplemented by purchased loans) while repayment levels declined as fewer borrowers sought to refinance. Investment securities increased with the deployment of second step conversion proceeds into higher-yielding agency and municipal securities. Other interest-earning assets increased as some funds received from the subscription offering remained in cash and cash equivalents. Mortgage-backed securities decreased due to principal repayments of securities exceeding purchases as funds were redeployed into loans and other investment securities. Average interest-bearing liabilities increased $47.0 million, or 5.7%, during the three months ended June 30, 2014, primarily as a result of an increase of $78.8 million in borrowings, mostly originated in late 2013, which were used primarily to fund loan growth, partially offset by a decrease of $31.8 million in deposits.
The provision for loan losses decreased $42,000, or 23.3%, to $138,000 for the three months ended June 30, 2014 as compared to $180,000 for the three months ended June 30, 2013. The decrease in the provision for loan losses for the three months ended June 30, 2014 was mainly the result of more favorable trends in qualitative factors for delinquencies included in the periodic review of the general valuation allowance. During the three months ended June 30, 2014 and 2013, there also were normal recurring adjustments made to the historical loss and other qualitative factor components of the Bank's general valuation allowance.
Non-interest income decreased $535,000, or 60.6%, to $348,000 for the three months ended June 30, 2014, as compared to $883,000 for the three months ended June 30, 2013. The decrease was mainly due to a $566,000 gain on sale of securities being included in the 2013 period.
Keywords for this news article include: Real Estate, Clifton Bancorp Inc., Finance and Investment, Investment and Finance, Private Mortgage Insurance.
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