Clifton Bancorp Inc. (Nasdaq: CSBK) (the “Company”), the holding company for Clifton Savings Bank, today announced results for the second quarter ended September 30, 2015. Net income for the second quarter was $1.54 million ($0.06 per diluted share) as compared to net income of $1.48 million ($0.06 per diluted share) for the quarter ended September 30, 2014. Net income for the six months ended September 30, 2015 was $3.20 million ($0.13 per diluted share) as compared to $3.10 million ($0.12 per diluted share) for the same period in 2014.

The Company also announced today that it has expanded its stock repurchase program to acquire an additional 2,569,000 shares of the Company’s outstanding common stock. Through October 27, 2015, the Company has repurchased approximately 2,322,000 shares at a weighted average share price of $13.81 per share. The expanded repurchase program authorizes the Company to repurchase approximately 10% of shares currently outstanding. Repurchases will be made through open market purchases or through privately negotiated transactions from time to time depending on market conditions and other factors.

Notable Items

  • Net loan portfolio growth of 5.6% since March 31, 2015, and 3.4% since June 30, 2015;
  • Nonperforming loans to total gross loans decreased to 0.64% at September 30, 2015;
  • The Compensation Committee of the Company’s Board of Directors approved restricted stock and stock option grants of approximately 512,000 and 1,109,000 shares, respectively, during the quarter ended September 30, 2015; and
  • 791,900 shares of common stock were repurchased during the second quarter of 2015 at a weighted average share price of $13.87.

Paul M. Aguggia, Chairman, President, and Chief Executive Officer, stated, “We continue to build our core business to compete more effectively in our markets. We are pleased to report consistent quarterly income and stellar asset quality while we invest in the Company operationally and through repurchases of our shares.”

Balance Sheet and Credit Quality Review

Total assets decreased $33.0 million, or 2.8%, to $1.15 billion at September 30, 2015, from $1.19 billion at March 31, 2015. The decrease in total assets was primarily due to a decrease in cash, a significant amount of which was used to repurchase stock.

Net loans increased $36.2 million, or 5.7%, to $677.3 million at September 30, 2015 from $641.1 million at March 31, 2015 primarily due to growth in the residential real estate loan portfolio. Securities decreased $39.3 million, or 9.4%, to $379.6 million at September 30, 2015 from $418.9 million at March 31, 2015, mainly as a result of calls, maturities and repayments on securities. Cash and cash equivalents were mostly redeployed into loans. Securities totaling $1.9 million were sold during the six months ended September 30, 2015, resulting in a gain of $72,000. Cash and cash equivalents decreased $31.4 million, or 63.8%, to $17.9 million at September 30, 2015 from $49.3 million at March 31, 2015.

Deposits decreased $20.9 million, or 3.0%, to $678.6 million at September 30, 2015 from $699.5 million at March 31, 2015, mainly due to our continued management of the cost of funds by allowing controlled, higher priced time deposit runoff. Borrowed funds increased $16.5 million, or 15.4%, to $124.0 million at September 30, 2015 from $107.5 million at March 31, 2015, as borrowings were utilized to fund loan growth. The outstanding borrowings as of September 30, 2015 have an average rate of 2.03% and such borrowings have an average term of 18 months. All outstanding borrowings are with the Federal Home Loan Bank of New York.

Total stockholders’ equity decreased $29.7 million, or 8.1%, to $338.3 million at September 30, 2015 from $368.0 million at March 31, 2015, primarily as a result of $31.4 million in repurchases of common stock, and $4.5 million in cash dividends, partially offset by net income of $3.2 million.

Non-accrual loans decreased $1.3 million, or 23.3%, to $4.3 million at September 30, 2015 from $5.6 million at March 31, 2015. Included in non-accrual loans at September 30, 2015 were seven loans totaling $1.2 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 0.64% at September 30, 2015 from 0.88% at March 31, 2015. The allowance for loan losses to nonperforming loans increased to 83.72% at September 30, 2015 from 61.53% at March 31, 2015.

Income Statement Review

Net interest income decreased by $42,000, or 0.6%, to $6.54 million for the three months ended September 30, 2015 as compared to $6.58 million for the three months ended September 30, 2014, despite an increase of $15.1 million in average net interest-earning assets, coupled with an increase of 9 basis points in net interest margin.

Net interest income increased $134,000, or 1.0%, to $13.12 million for the six months ended September 30, 2015 as compared to $12.98 million for the six months ended September 30, 2014, reflecting an increase of $48.7 million in average net interest-earning assets, coupled with an increase of 7 basis points in net interest margin.

The provision for loan losses decreased $201,000, or 66.8%, to $100,000 for the three months ended September 30, 2015, as compared to $301,000 for the three months ended September 30, 2014, and decreased $266,000, or 60.6%, to $173,000 for the six months ended September 30, 2015, as compared to $439,000 for the six months ended September 30, 2014. The decreases for the 2015 periods were mainly the result of overall favorable trends in qualitative factors related to delinquencies considered in the periodic review of the general valuation allowance, and the decrease in charge-offs.

Non-interest income decreased $22,000, or 4.6%, to $452,000 for the three months ended September 30, 2015 from $474,000 for the three months ended September 30, 2014, due to a decrease in fees and service charges on loans and deposits. Non-interest income increased $144,000, or 17.5%, to $966,000 for the six months ended September 30, 2015 from $822,000 for the six months ended September 30, 2014. The increase was mainly attributable to an increase in income from bank owned life insurance, net of a decrease in gains on sales of securities. Securities available for sale totaling $1.9 million were sold during the six months ended September 30, 2015, resulting in a gain of $72,000, while securities available for sale totaling $1.0 million were sold during the six months ended September 30, 2014, resulting in a gain of $102,000.

Non-interest expenses increased $48,000, or 1.1%, to $4.58 million for the three months ended September 30, 2015, as compared to $4.53 million for the three months ended September 30, 2014. Non-interest expenses increased $426,000, or 4.9%, to $9.10 million for the six months ended September 30, 2015, as compared to $8.67 million for the six months ended September 30, 2014. The increase for the six month period was driven by increases in salaries and employee benefits and professional services, partially offset by a decrease in directors’ compensation. 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 and expenses related to the granting of equity awards under the 2015 Equity Incentive Plan. 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 as well as an increase in consulting expense. The decrease in directors’ compensation in the current year related to the prior year including a charge recorded as a result of a lump sum payment from the directors’ retirement plan.

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 September 30,   At March 31,
2015   2015
(In thousands)
Financial Condition Data:
Total assets $ 1,153,895 $ 1,186,924
Loans receivable, net 677,286 641,084
Cash and cash equivalents 17,869 49,308
Securities 379,582 418,875
Deposits 678,624 699,476
FHLB advances 124,000 107,500
Total stockholders' equity 338,267 368,001
 
 
Selected Consolidated Operating Data  

Three Months Ended
September 30,

  

Six Months Ended
September 30,

2015   2014 2015   2014
(In thousands, except share and per share data)
   
Operating Data:
Interest income $ 8,739 $ 8,899 $ 17,451 $ 17,611
Interest expense   2,199   2,317   4,334   4,628
Net interest income 6,540 6,582 13,117 12,983
Provision for loan losses   100   301   173   439
Net interest income after provision for
loan losses 6,440 6,281 12,944 12,544
Non-interest income 452 474 966 822
Non-interest expenses   4,580   4,532   9,095   8,669
Income before income taxes 2,312 2,223 4,815 4,697
Income taxes   772   744   1,617   1,596
Net income $ 1,540 $ 1,479 $ 3,198 $ 3,101
Basic earnings per share $ 0.06 $ 0.06 $ 0.13 $ 0.12
Diluted earnings per share $ 0.06 $ 0.06 $ 0.13 $ 0.12
 
Average shares outstanding - basic 24,554 25,333 24,988 25,289
Average shares outstanding - diluted 24,608 25,521 25,052 25,467
 
 
Average Balance Table
Three Months Ended September 30,
2015   2014

Average
Balance

  

Interest
and
Dividends

  

Yield/
Cost

  

Average
Balance

  

Interest
and
Dividends

  

Yield/
Cost

Assets: (Dollars in thousands)
Interest-earning assets:
Loans receivable $ 666,434 $ 6,090 3.66% $ 613,604 $ 5,799 3.78%
Mortgage-backed securities 273,417 1,899 2.78% 303,938 2,339 3.08%
Investment securities 116,350 678 2.33% 155,274 666 1.72%
Other interest-earning assets   21,280   72 1.35%   52,979   95 0.72%
Total interest-earning assets 1,077,481   8,739 3.24% 1,125,795   8,899 3.16%
 
Non-interest-earning assets   77,426   101,666
Total assets $ 1,154,907 $ 1,227,461
 
Liabilities and stockholders' equity:
Interest-bearing liabilities:
Demand accounts $ 52,423 15 0.11% $ 55,643 19 0.14%
Savings and Club accounts 142,039 58 0.16% 139,394 61 0.18%
Certificates of deposit   473,311   1,514 1.28%   528,996   1,645 1.24%
Total interest-bearing deposits 667,773 1,587 0.95% 724,033 1,725 0.95%
FHLB Advances   116,625   612 2.10%   123,750   592 1.91%
Total interest-bearing liabilities 784,398   2,199 1.12% 847,783   2,317 1.09%
 
Non-interest-bearing liabilities:
Non-interest-bearing deposits 13,898 11,180
Other non-interest-bearing liabilities   12,971   11,412
Total non-interest-bearing liabilities   26,869   22,592
 
Total liabilities 811,267 870,375
Stockholders' equity   343,640   357,086
Total liabilities and stockholders' equity $ 1,154,907 $ 1,227,461
 
Net interest income $ 6,540 $ 6,582
Interest rate spread 2.12% 2.07%
Net interest margin 2.43% 2.34%
Average interest-earning assets
to average interest-bearing liabilities

1.37x

 

1.33x

 

 
 
Six Months Ended September 30,
2015   2014

Average
Balance

  

Interest
and
Dividends

  

Yield/
Cost

  

Average
Balance

  

Interest
and
Dividends

  

Yield/
Cost

Assets: (Dollars in thousands)
Interest-earning assets:
Loans receivable $ 656,681 $ 12,074 3.68% $ 604,559 $ 11,475 3.80%
Mortgage-backed securities 276,092 3,841 2.78% 304,918 4,704 3.09%
Investment securities 122,985 1,387 2.26% 146,552 1,256 1.71%
Other interest-earning assets   28,795   149 1.03%   50,454   176 0.70%
Total interest-earning assets 1,084,553   17,451 3.22% 1,106,483   17,611 3.18%
   
Non-interest-earning assets   78,857   130,394
Total assets $ 1,163,410 $ 1,236,877
 
Liabilities and stockholders' equity:
Interest-bearing liabilities:
Demand accounts $ 53,107 30 0.11% $ 56,243 37 0.13%
Savings and Club accounts 141,918 116 0.16% 141,447 124 0.18%
Certificates of deposit   478,253   3,014 1.26%   531,409   3,281 1.23%
Total interest-bearing deposits 673,278 3,160 0.94% 729,099 3,442 0.94%
FHLB Advances   112,714   1,174 2.08%   127,500   1,186 1.86%
Total interest-bearing liabilities 785,992   4,334 1.10% 856,599   4,628 1.08%
 
Non-interest-bearing liabilities:
Non-interest-bearing deposits 13,701 11,967
Other non-interest-bearing liabilities   12,184   12,513
Total non-interest-bearing liabilities   25,885   24,480
 
Total liabilities 811,877 881,079
Stockholders' equity   351,533   355,798
Total liabilities and stockholders' equity $ 1,163,410 $ 1,236,877
 
Net interest income $ 13,117 $ 12,983
Interest rate spread 2.12% 2.10%
Net interest margin 2.42% 2.35%
Average interest-earning assets
to average interest-bearing liabilities

1.38x

 

1.29x

 

 
   
Asset Quality Data

Six
Months
Ended
September 30,

Year
Ended
March 31,

2015 2015
(Dollars in thousands)
Allowance for loan losses:
Allowance at beginning of period $ 3,475 $ 3,071
Provision for loan losses 173 717
 
Charge-offs (26) (313)
Recoveries   3   -
Net charge-offs (23) (313)
   
Allowance at end of period $ 3,625 $ 3,475
 
Allowance for loan losses to total gross loans 0.53% 0.54%
Allowance for loan losses to nonperforming loans 83.72% 61.53%
 
 
At September 30, At March 31,
2015 2015
(Dollars in thousands)
Nonperforming Assets:
Nonaccrual loans:
One- to four-family real estate $ 3,452 $ 4,555
Multi-family real estate 568 581
Commercial real estate 192 439
Construction real estate 49 -
Consumer real estate   69   73
Total nonaccrual loans 4,330 5,648
Real estate owned   -   -
Total nonperforming assets $ 4,330 $ 5,648
 
Total nonperforming loans to total gross loans 0.64% 0.88%
Total nonperforming assets to total assets 0.38% 0.48%
 
 
Selected Consolidated Financial Ratios

Three Months Ended
September 30,

  

Six Months Ended
September 30,

Selected Performance Ratios (1):

2015   2014 2015   2014
Return on average assets 0.53% 0.48% 0.55% 0.50%
Return on average equity 1.79% 1.66% 1.82% 1.74%
Interest rate spread 2.12% 2.07% 2.12% 2.10%
Net interest margin 2.43% 2.34% 2.42% 2.35%
Non-interest expenses to average assets 1.59% 1.48% 1.56% 1.40%
Efficiency ratio (2) 65.50% 64.23% 64.58% 62.80%
Average interest-earning assets to average
interest-bearing liabilities 1.37x 1.33x 1.38x 1.29x
Average equity to average assets 29.75% 29.09% 30.22% 28.77%
Dividend payout ratio 95.06% 102.64% 139.15% 146.53%
Net charge-offs to average ourtstanding loans during the periods 0.00% 0.03% 0.00% 0.04%
 
 

(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

September 30,
2015

  

June 30,
2015

  

March 31,
2015

  

December 31,
2014

  

September 30,
2014

(In thousands except shares and per share data)

Operating Data

Interest income $ 8,739 $ 8,712 $ 8,558 $ 8,993 $ 8,899
Interest expense   2,199   2,135   2,157   2,249   2,317
Net interest income 6,540 6,577 6,401 6,744 6,582
Provision for loan losses   100   73   100   178   301
Net interest income after provision for
loan losses 6,440 6,504 6,301 6,566 6,281
Non-interest income 452 514 3,094 397 474
Non-interest expenses   4,580   4,515   4,362   4,075   4,532
Income before income taxes 2,312 2,503 5,033 2,888 2,223
Income taxes   772   845   1,520   948   744
Net income $ 1,540 $ 1,658 $ 3,513 $ 1,940 $ 1,479
 

Share Data

Basic earnings per share $ 0.06 $ 0.07 $ 0.14 $ 0.08 $ 0.06
Diluted earnings per share $ 0.06 $ 0.07 $ 0.13 $ 0.08 $ 0.06
Dividends per share $ 0.06 $ 0.12 $ 0.06 $ 0.06 $ 0.06
Average shares outstanding - basic 24,554 25,421 25,979 25,594 25,333
Average shares outstanding - diluted 24,608 25,494 26,073 25,728 25,521
Shares outstanding at period end 25,745 25,960 27,326 27,145 26,676
 

Financial Condition Data

Total assets $ 1,153,895 $ 1,152,707 $ 1,186,924 $ 1,198,171 $ 1,211,527
Loans receivable, net 677,286 654,802 641,084 628,872 617,024
Cash and cash equivalents 17,869 23,498 49,308 45,668 74,979
Securities 379,582 395,386 418,875 446,511 454,595
Deposits 678,624 685,248 699,476 711,486 731,070
FHLB advances 124,000 107,500 107,500 112,500 112,500
Total stockholders' equity 338,267 347,764 368,001 363,765 357,693
 

Assets Quality:

Total nonperforming assets $ 4,330 $ 5,340 $ 5,648 $ 3,994 $ 4,509
Total nonperforming loans to total gross loans 0.64% 0.81% 0.88% 0.63% 0.73%
Total nonperforming assets to total assets 0.38% 0.46% 0.48% 0.33% 0.37%
Allowance for loan losses $ 3,625 $ 3,525 $ 3,475 $ 3,375 $ 3,250
Allowance for loan losses to total gross loans 0.53% 0.54% 0.54% 0.54% 0.53%
Allowance for loan losses to nonperforming loans 83.72% 66.01% 61.53% 84.50% 72.08%