MSB Financial Corp. Announces Quarterly Results

MSB Financial Corp. Announces Quarterly Results

MILLINGTON, N.J., May 13, 2014 (GLOBE NEWSWIRE) -- MSB Financial Corp.
(Nasdaq:MSBF) (the "Company"), the holding company for Millington Savings Bank
(the "Bank"), reported net income of $243,000 for the three months ended March
31, 2014 compared to net income of $89,000 for the quarter ended March 31,
2013. Correspondingly, the Company reported net income of $742,000 for the
nine months ended March 31, 2014 compared to a net loss of $1.6 million for
the nine months ended March 31, 2013. The increase in net income for the nine
months ended March 31, 2014 compared to the nine months ended March 31, 2013,
was primarily a result of a $3.4 million decrease in the provision for loan
losses and to a lesser extent, increases in net interest and non-interest
income and a decrease in non-increase expense.

Net interest income for the three and nine months ended March 31, 2014
increased to $2.5 million and $7.2 million, respectively, from $2.3 million
and $7.1 million for the three and nine month periods ended March 31, 2013,
respectively, with the increases attributable to declines in interest expense
primarily due to decreases in the average rate of interest-bearing liabilities
and, in the three-month period, a decrease in the average balance of
interest-bearing liabilities. For the three months ended March 31, 2014, the
average yield on interest earning assets was 3.76%, a decrease of 1 basis
point when compared to the same period in 2013. For the nine months ended
March 31, 2014, the yield on interest earning assets was 3.73%, a decrease of
18 basis points when compared to the same period in 2013. The decline in
yields on average earning assets, for both the three and nine month
comparative periods, is representative of the effects that the prolonged low
interest rate environment has had on the Company's earning assets portfolio.
During the three months ended March 31, 2014, average interest-earning assets
increased by $6.7 million when compared to the same period in 2013. For the
nine months ended March 31, 2014, average interest earning-assets increased by
$10.4 million when compared to the same period in the prior fiscal year.

The average rate paid on interest-bearing liabilities for the three months
ended March 31, 2014 was 0.83%, a decrease of 8 basis points when compared to
the same period in 2013. For the nine months ended March 31, 2014, the average
rate paid on interest-bearing liabilities was 0.86%, a decrease of 11 basis
points when compared to the same period in 2013. The net interest margin
increased to 3.04% for the three months ended March 31, 2014, compared to
2.95% for the three months ended March 31, 2013, an increase of 9 basis
points. The net interest margin decreased to 2.97% for the nine months ended
March 31, 2014, compared to 3.02% for the nine months ended March 31, 2013, a
decrease of 5 basis points.

Non-interest income for the quarter ended March 31, 2014 totaled $184,000, an
increase of $25,000 or 15.7% compared to the same period in 2013. For the nine
months ended March 31, 2014, non-interest income totaled $547,000, an increase
of $67,000, or 14.0%, when compared to the same period in 2013. The increase
in non-interest income for both the three and nine months ended March 31, 2014
compared to the three and nine months ended March 31, 2013, was primarily
attributable to an increase in fees and service charges for the respective
periods.

Total non-interest expense decreased by $71,000 or 3.2% to $2.1 million for
the three month period ended March 31, 2014 compared to $2.2 million for the
three month period ended March 31, 2013. For the nine months ended March 31,
2014, non-interest expense totaled $6.1 million, compared to $6.3 million for
the nine months ended March 31, 2013, a decrease of $173,000 or 2.7%. The
decrease in non-interest expense for both the three and nine months ended
March 31, 2014 compared to the three and nine month months ended March 31,
2013, was primarily the result of decreases in other non-interest expense,
salaries and employee benefits, occupancy and equipment, directors'
compensation, advertising and professional services, offset by an increase in
service bureau fees and FDIC assessment expense for the respective periods.

The loan loss provision for the three and nine months ended March 31, 2014 was
$150,000 and $450,000, respectively, compared to $175,000 and $3.9 million for
the same periods ended March 31, 2013. The provision for loan losses for the
nine months ended March 31, 2013 included an additional provision of $2.0
million deemed necessary to support the Company's planned asset disposition
strategy approved by the Company's Board of Directors during the quarter ended
December 31, 2012, the goal of which was to rapidly reduce (through strategies
such as short sales, cash for keys, deeds in lieu of foreclosure and/or bulk
sales) the dollar amount of non-performing loans in the Company's loan
portfolio and thereby reduce the costs associated with the foreclosure
process. The Company's management reviews the level of the allowance for loan
losses on a quarterly basis based on a variety of factors including, but not
limited to, (1) the risk characteristics of the loan portfolio, (2) current
economic conditions, (3) actual losses previously experienced, (4) the
Company's level of loan growth and (5) the existing level of reserves for loan
losses that are probable and estimable. The reduction in the level of
provision for loan loss primarily reflects lower levels of specific reserves
related to non-performing loans individually evaluated for impairment which
continued to decrease as a result of the various above mentioned disposition
activities. Also, there was a stabilization of the quantitative and
qualitative factors during the nine months ended March 31, 2014 compared to
upward-trending factors during the nine-month period ended March 31, 2013,
thus further reducing the need for additional provisions as of March 31, 2014.
The Company experienced $2,000 in net charge-offs (consisting of $2,000 in
charge-offs and no recoveries) for the three-month period ended March 2014
compared to $952,000 in net charge-offs (consisting of $952,000 in charge-offs
and no recoveries) for the three-month period ended March 31, 2013. In
addition, the Company experienced $993,000 in net charge-offs (consisting of
$1,013,000 in charge-offs and $20,000 in recoveries) for the nine months ended
March 31, 2014 compared to $2,416,000 in net charge-offs (consisting of
$2,465,000 in charge-offs and $49,000 in recoveries) for the nine months ended
March 31, 2013. The Company had $9.1 million in non-performing loans as of
March 31, 2014, compared to $14.1 million as of June 30, 2013. The allowance
for loan losses to total loans ratio was 1.57% at March 31, 2014, compared to
1.87% at June 30, 2013, while the allowance for loan losses to non-performing
loans ratio increased from 30.30% at June 30, 2013 to 40.82% at March 31,
2014, primarily due to decreases in total non-performing loans at March 31,
2014 compared to June 30, 2013. Non-performing loans to total loans and net
charge-offs to average loans outstanding ratios were at 3.84% and 0.43%,
respectively, at and for the nine month period ended March 31, 2014 compared
to 5.74% and 1.01% at and for the nine month period ended June 30, 2013.

Total assets decreased $7.2 million or 2.0%, from $352.6 million at June 30,
2013 to $345.4 million at March 31, 2014, primarily due to a decrease of $20.0
million in cash and cash equivalents, offset by a $7.8 million increase in
loans receivable, net and a $4.3 million increase in securities held to
maturity balances. Deposits were $271.8 million at March 31, 2014, down $8.6
million compared to $280.4 million at June 30, 2013. The decrease in deposit
balances was primarily due to the Company lowering its offering rates. Total
borrowings at March 31, 2014 and June 30, 2013 amounted to $30.0 million.
Stockholders' equity was $40.5 million at March 30, 2014 compared to $39.5 at
June 30, 2013, an increase of $972,000 or 2.5%. The increase in retained
earnings of $742,000, as well as the $126,000 decrease in unallocated common
stock held by ESOP and $107,000 increase in paid-in capital accounted for the
major changes in the Company's shareholder's equity as of March 31, 2014
compared to the period ended June 30, 2013.

Shares of the Company's common stock trade on the NASDAQ Global Market under
the symbol "MSBF." The Company is majority owned by its mutual holding company
parent, MSB Financial, MHC.

Forward-Looking Statements

The foregoing release may contain forward-looking statements concerning the
financial condition, results of operations and business of the Company. We
caution that such statements are subject to a number of uncertainties and
actual results could differ materially, and, therefore, readers should not
place undue reliance on any forward-looking statements.

                                                                 
                                                                 
MSB FINANCIAL CORP
(Dollars in Thousands, except for per share amount)
                                                                 
SELECTED FINANCIAL AND OTHER DATA
                                                                 
                                                                 
Statement of Financial Condition                                  
Data:
                                 (Unaudited)                       
                                 At March 31, At June 30,          
                                 2014         2013                 
                                                                 
Total assets                      $345,366     $352,592             
                                                                 
Cash and cash equivalents         4,731        24,755               
                                                                 
Loans receivable, net             231,063      223,256              
                                                                 
Securities held to maturity       85,247       80,912               
                                                                 
Deposits                          271,829      280,467              
                                                                 
Federal Home Loan Bank advances   30,000       30,000               
                                                                 
Total stockholders' equity        40,485       39,513               
                                                                 
                                                                 
Summary of Operations:                                            
                                 (Unaudited)              (Unaudited)
                                 For the Nine            For the Three
                                 Months Ended            Months Ended
                                 March 31,    March 31,   March 31, March 31,
                                 2014         2013        2014      2013
                                                                 
Total interest income             $9,008       $9,127      $3,038    $2,985
                                                                 
Total interest expense            1,834        2,064       585       648
                                                                 
Net interest income               7,174        7,063       2,453     2,337
                                                                 
Provision for loan losses         450          3,894       150       175
                                                                 
Net interest income after         6,724        3,169       2,303     2,162
provision for loan losses
                                                                 
Non-interest income               547          480         184       159
                                                                 
Non-interest expense              6,141        6,314       2,117     2,188
                                                                 
Income before taxes               1,130        (2,665)     370       133
                                                                 
Income tax (benefit) expense      388          (1,087)     127       44
                                                                 
Net (loss) income                 $742         ($1,578)    $243      $89
                                                                 
                                                                 
Net income per common share:                                      
                                                                 
basic and diluted                 $0.15        ($0.32)     $0.05     $0.02
                                                                 
Weighted average number of shares 4,924,020    4,939,010   4,928,236 4,916,418
of common stock outstanding
                                                                 
                                                                 
Performance Ratios:                                               
                                 (Unaudited)              (Unaudited)
                                 For the Nine            For the Three
                                 Months Ended            Months Ended
                                 March 31,    March 31,   March 31, March 31,
                                 2014         2013        2014      2013
                                                                 
Return on average assets (ratio
of net income to average total    0.29%        -0.61%      0.28%     0.10%
assets)
                                                                 
Return on average equity (ratio   2.47         (5.22)      2.41      0.91
of net income to average equity)
                                                                 
Net interest rate spread          2.87         2.94        2.93      2.86
                                                                 
Net interest margin on average    2.97         3.02        3.04      2.95
interest-earning assets
                                                                 
Average interest-earning assets
to average interest-bearing       113.49       109.70      115.18    110.75
liabilities
                                                                 
Operating expense ratio
(noninterest expenses to average  2.36         2.44        2.45      2.54
total assets)
                                                                 
Efficiency ratio (noninterest
expense divided by sum of net     79.54        83.71       80.28     87.66
interest income and noninterest
income)
                                                                 
                                                                 
                                 (Unaudited)                      
                                 At or For the                    
                                 Nine Months Ended,               
                                 March 31,    March 31,            
                                 2014         2013                 
Asset Quality Ratios:                                             
                                                                 
Non-performing loans to total     3.84%        5.74%                
loans
                                                                 
Non-performing assets to total    2.99         4.29                 
assets
                                                                 
Net charge-offs to average loans  0.43         1.01                 
outstanding
                                                                 
Allowance for loan losses to      40.82        33.49                
non-performing loans
                                                                 
Allowance for loan losses to      1.57         1.92                 
total loans
                                                                 
                                                                 
Capital Ratios:                                                   
                                                                 
Equity to total assets at end of  11.72%       11.08%               
period
                                                                 
Average equity to average assets  11.55        11.71                
                                                                 
Number of Offices                 5            5                    

CONTACT: MSB Financial Corp.
         Michael Shriner, President & CEO
         908-647-4000
         mshriner@millingtonsb.com
 
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