Stewardship Financial Corporation Announces First Quarter of 2013 Earnings

Stewardship Financial Corporation Announces First Quarter of 2013 Earnings 
MIDLAND PARK, NJ -- (Marketwired) -- 05/09/13 --  Stewardship
Financial Corporation (NASDAQ: SSFN), parent of Atlantic Stewardship
Bank, announced net income for the three months ended March 31, 2013
of $822,000 as compared to net income of $776,000 for the three
months ended March 31, 2012. After dividends on preferred stock, the
net income available to the common stockholders was $656,000, or
$0.11 per diluted common share, for the current 2013 period compared
to $701,000, or $0.12 per diluted common share, for the comparable
period of 2012.  
Net interest income was $5.9 million in the first quarter of 2013
compared to $6.1 million a year earlier. "In this prolonged, low
interest rate environment, the Corporation continues to monitor and
manage all expenses in order to alleviate some of the pressure on our
asset yields," said Paul Van Ostenbridge, Stewardship Financial
Corporation's President and Chief Executive Officer.  
The Corporation recorded a $1.6 million provision for loan losses for
the three months ended March 31, 2013 compared to a provision for
loan losses of $1.8 million for the three months ended March 31,
2012. Van Ostenbridge commented, "The 2013 provision for loan losses,
while lower than the prior year, remains elevated as a result of the
continued challenging economic environment and its impact on our
borrowers."  
Non-performing loans decreased to $17.5 million, or 3.97% of total
loans at March 31, 2013, compared to $26.8 million, or 5.91% a year
earlier and $18.2 million, or 4.14% at December 31, 2012. The ratio
of allowance for loan losses to nonperforming loans increased to
65.67% at March 31, 2013, providing additional allowance coverage as
compared to 48.83% at March 31, 2012 and 58.31% at December 31, 2012. 
Addressing the Corporation's problem assets, Van Ostenbridge stated,
"Over the last year we have seen a significant decline in our level
of nonperforming loans. While problem loans continue to migrate
through the lengthy workout phase, including a very slow New Jersey
foreclosure process, we are encouraged by the recent progress."  
The Corporation reported noninterest income of $1.5 million for the
three months ended March 31, 2013 compared to $
1.6 million for the
equivalent prior year period. During the first quarter of 2013,
noninterest income included $537,000 as a result of a death benefit
insurance payment received. For the three months ended March 31, 2012
the Corporation realized a $433,000 gain from the sale of securities.
Gain on sales of mortgage loans totaled $162,000 for the three months
ended March 31, 2013, a decrease from $411,000 for the three months
ended March 31, 2012, partially reflective of retaining a higher
amount of mortgage loan originations for our portfolio.  
Total noninterest expenses were $4.9 million for the three months
ended March 31, 2013 -- comparable to the prior year period.  
Total assets at March 31, 2013 were $693.9 million, representing a
slight increase from assets of $688.4 million at December 31, 2012.
Additional liquidity was provided by increases in cash and cash
equivalents. Gross loans receivable increased $1.1 million from
December 31, 2012, whereby new loans recorded were partially offset
by payoffs and normal principal amortization.  
Total deposits were $595.5 million at March 31, 2013, reflecting $5.3
million of deposit growth when compared to deposits of $590.3 million
at December 31, 2012. The net growth in deposits during the first
quarter of 2013 consisted of an $8.7 million increase in
noninterest-bearing deposits and a $3.4 million decline in balances
in interest-bearing accounts. At March 31, 2013 noninterest bearing
deposits represented 22.3% of total deposits, up from 19.7% a year
earlier.  
Capital levels continue to significantly exceed the regulatory
requirements for a "well capitalized" institution with a tier 1
leverage ratio of 9.27% and total risk based capital ratio of 15.08%. 
Van Ostenbridge concluded, "While the substantial attention and
resources devoted to addressing problem loans is showing results, we
clearly recognize that there is more to accomplish. We are confident
of our ability to implement appropriate loan work out strategies that
improve asset quality and maximize loan repayments, supported by an
appropriate level of loan loss reserves, coupled with a sound capital
base."  
Stewardship Financial Corporation's subsidiary, the Atlantic
Stewardship Bank, has 13 banking offices in Midland Park, Hawthorne
(2), Montville, North Haledon, Pequannock, Ridgewood, Waldwick, Wayne
(3), 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 $7.7 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, which forward looking statements 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. 


 
                                                                            
                                                                            
                     Stewardship Financial Corporation                      
                Selected Consolidated Financial Information                 
              (dollars in thousands, except per share amounts)              
                                (unaudited)                                 
                                                                            
                                     March 31,   December 31,    March 31,  
                                       2013          2012          2012     
                                   ------------  ------------  ------------ 
                                                                            
Selected Financial Condition Data:                                          
  Cash and cash equivalents        $     26,144  $     21,016  $     24,181 
  Securities available for sale         175,493       174,700       175,102 
  Securities held to maturity            28,548        29,718        36,353 
  FHLB Stock                              2,213         2,213         2,266 
  Loans receivable:                                                         
   Loans receivable, gross              441,533       440,423       453,671 
   Allowance for loan losses            (11,512)      (10,641)      (13,097)
   Other, net                                62            50            62 
                                   ------------  ------------  ------------ 
  Loans receivable, net                 430,083       429,832       440,636 
                                                  
                          
  Loans held for sale                     2,101           784         1,395 
  Other assets                           29,344        30,125        32,112 
                                   ------------  ------------  ------------ 
  Total assets                     $    693,926  $    688,388  $    712,045 
                                   ============  ============  ============ 
                                                                            
                                                                            
  Noninterest-bearing deposits     $    132,960  $    124,286  $    118,597 
  Interest-bearing deposits             462,578       465,968       483,486 
                                   ------------  ------------  ------------ 
  Total deposits                        595,538       590,254       602,083 
  Other borrowings                       25,000        25,000        28,000 
  Securities sold under agreements                                          
   to repurchase                          7,344         7,343        14,342 
  Subordinated debentures                 7,217         7,217         7,217 
  Other liabilities                       2,152         2,228         2,348 
  Stockholders' equity                   56,675        56,346        58,055 
                                   ------------  ------------  ------------ 
  Total liabilities and                                                     
   stockholders' equity            $    693,926  $    688,388  $    712,045 
                                   ============  ============  ============ 
                                                                            
  Equity to assets                         8.17%         8.19%         8.15%
                                                                            
Asset Quality Data:                                                         
  Nonaccrual loans                 $     17,479  $     18,011  $     26,823 
  Loans past due 90 days or more                                            
   and accruing                              50           237             - 
                                   ------------  ------------  ------------ 
  Total nonperforming loans              17,529        18,248        26,823 
  Other real estate owned                   876         1,058         3,840 
                                   ------------  ------------  ------------ 
  Total nonperforming assets       $     18,405  $     19,306  $     30,663 
                                   ============  ============  ============ 
                                                                            
                                                                            
  Nonperforming loans to total                                              
   loans                                   3.97%         4.14%         5.91%
  Nonperforming assets to total                                             
   assets                                  2.65%         2.80%         4.31%
  Allowance for loan losses to                                              
   nonperforming loans                    65.67%        58.31%        48.83%
  Allowance for loan losses to                                              
   total gross loans                       2.61%         2.42%         2.89%
                                                                            
                                                                            
                                                                            
                     Stewardship Financial Corporation                      
                Selected Consolidated Financial Information                 
              (dollars in thousands, except per share amounts)              
                                (unaudited)                                 
                                                                            
                                                 For the three months ended 
                                                          March 31,         
                                                 -------------------------- 
                                                     2013          2012     
                                                 ------------  ------------ 
Selected Operating Data:                                                    
  Interest income                                $      6,870  $      7,516 
  Interest expense                                      1,004         1,465 
                                                 ------------  ------------ 
    Net interest and dividend income                    5,866         6,051 
  Provision for loan losses                             1,600         1,765 
                                                 ------------  ------------ 
  Net interest and dividend income after                                    
   provision for loan losses                            4,266         4,286 
  Noninterest income:                                                       
    Fees and service charges                              456           515 
    Bank owned life insurance                              76            80 
    Gain on calls and sales of securities                   2           433 
    Gain on sales of mortgage loans                       162           411 
    Gain on sales of other real estate owned              126            99 
    Gain on life insurance proceeds                       537             - 
    Other                                                 115           111 
                                                 ------------  ------------ 
    Total noninterest income                            1,474         1,649 
  Noninterest expenses:                                                     
    Salaries and employee benefits                      2,696         2,386 
    Occupancy, net                                        517           487 
    Equipment                                             184           248 
    Data processing                                       328           334 
    FDIC insurance premium                                150           148 
    Other                                               1,057         1,250 
                                                 ------------  ------------ 
    Total noninterest expenses                          4,932         4,853 
                                                 ------------  ------------ 
  Income before income tax expense (benefit)              808         1,082 
  Income tax expense (benefit)                            (14)          306 
                                                 ------------  ------------ 
  Net income                                              822           776 
  Dividends on preferred stock                            166            75 
                                                 ------------  ------------ 
  Net income available to common stockholders    $        656  $        701 
                                                 ============  ============ 
                                                                            
  Weighted avg. no. of diluted common shares        5,930,981     5,892,366 
  Diluted earnings per common share              $       0.11  $       0.12 
                                                                            
  Return on average common equity                        6.39%         6.47%
                                                                            
  Return on average assets                               0.49%         0.44%
                                                                            
  Yield on average interest-earning assets               4.39%         4.59%
  Cost of average interest-bearing liabilities           0.82%         1.11%
                                                 ------------  ------------ 
  Net interest rate spread                               3.57%         3.48%
                                                 ============  ============ 
                                                                            
  Net interest margin                                    3.76%         3.71%

  
Contact: 
Claire M. Chadwick 
SVP and Chief Financial Officer
630 Godwin Avenue
Midland Park, NJ 07432
201- 444-7100 
 
 
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