Clifton Savings
Bancorp, Inc.
Announces 4th
Quarter and Year End
Results
CLIFTON,
N.J.--(BUSINESS
WIRE)--Clifton
Savings Bancorp,
Inc. (Nasdaq Global
Market: CSBK) (the
"Company"), the
holding company of
Clifton Savings Bank
(the "Bank"), today
announced the
results of its
operations for the
three months and
year ended March 31,
2008. Net income was
$623,000 for the
three months ended
March 31, 2008, an
increase of
$167,000, or 36.6%,
as compared to
$456,000 for the
three months ended
March 31, 2007. Net
income increased for
the period primarily
as a result of
stabilizing the net
interest rate spread
and due to a
reduction of
non-interest
expense. Net income
was $2.37 million
for the year ended
March 31, 2008, a
decrease of
$100,000, or 4.0%,
as compared to $2.47
million for the year
ended March 31,
2007. Net income
decreased for the
period primarily due
to the continued
increase in interest
expense. The
unfavorable yield
curve experienced
throughout much of
the period, coupled
with the competitive
pricing environment
for deposits, has
continued to cause a
decrease in the
Company's net
interest margin and
spread. Both basic
and diluted earnings
per common share
were $0.02 for the
three months ended
March 31, 2008 and
2007, and $0.09
during both the
years ended March
31, 2008 and 2007.
Cash dividends paid
per common share
were $0.05 for both
the three months
ended March 31, 2008
and 2007, and $0.20
for both the years
ended March 31, 2008
and 2007.
Net interest
income decreased
$120,000, or 3.2%,
for the three months
ended March 31,
2008, to $3.60
million as compared
to $3.72 million for
three months ended
March 31, 2007,
reflecting a 13
basis point decrease
in the net interest
margin coupled with
a decrease of $29.1
million in average
net interest-earning
assets. Average
interest-earning
assets increased
$32.5 million, or
4.2%, which
consisted of
increases of $1.2
million in loans,
$82.2 million in
mortgage-backed
securities and $5.3
million in other
interest-earning
assets partially
offset by a decrease
of $56.2 million in
investment
securities. Loans
and mortgage-backed
securities increased
primarily due to the
redeployment of
maturities and calls
of investment
securities into
higher yielding
assets. In addition,
mortgage-backed
securities increased
due to the
implementation of a
leverage strategy
initiated in
November 2007, under
which we borrow
funds from the
Federal Home Loan
Bank of New York and
simultaneously
invest those funds
in higher yielding
mortgage-backed
securities. Other
interest-earning
assets increased due
to the call of a
security near the
end of the 2008
period that had not
yet been redeployed
into higher yielding
assets. Average
interest-bearing
liabilities
increased $61.6
million, or 10.1%
during the three
months ended March
31, 2008, which
consisted of
increases of $2.7
million in
interest-bearing
deposits and $58.9
million in
borrowings. Net
interest margin
decreased to 1.78%
for the quarter
ended March 31,
2008, from 1.91% for
the quarter ended
March 31, 2007. The
net interest rate
spread remained the
same at 1.11% for
both periods, as the
15 basis point
increase to 4.99% in
the average yield
earned on
interest-earning
assets was offset by
the 15 basis point
increase to 3.88% in
the average rate
paid on
interest-bearing
liabilities.
Net interest
income decreased
$1.8 million, or
11.3%, for the year
ended March 31,
2008, to $14.1
million as compared
to $15.9 million for
year ended March 31,
2007, reflecting a
decrease of $32.9
million in average
net interest-earning
assets coupled with
a 19 basis point
decrease in the net
interest margin.
Average
interest-earning
assets decreased
$21.4 million, or
2.7% during fiscal
2008, which
consisted of a
decrease of $54.1
million in
investment
securities,
partially offset by
increases of $2.6
million in loans,
$20.1 million in
mortgage-backed
securities and $10.0
million in other
interest-earning
assets. Loans and
mortgage-backed
securities increased
primarily due to the
redeployment of
maturities in 2008
and calls of
investment
securities into
higher yielding
assets. Other
interest-earning
assets increased
mainly due to the
call of a security
near the end of
fiscal 2008 that had
not yet been
redeployed into
higher yielding
assets. Average
interest-bearing
liabilities
increased $11.5
million, or 1.9%,
which consisted of
an increase of $12.1
million in borrowed
funds, partially
offset by a decrease
of $600,000 in
interest-bearing
deposits. Net
interest margin
decreased to 1.82%
for the year ended
March 31, 2008, from
2.01% for the year
ended March 31,
2007. The net
interest rate spread
decreased 14 basis
points to 1.09%, as
the 26 basis point
increase to 4.99% in
the average yield
earned on
interest-earning
assets was not
sufficient to offset
the 40 basis point
increase to 3.90% in
the average rate
paid on
interest-bearing
liabilities. The
increase in the
average cost of
interest-bearing
liabilities is
primarily the result
of the continuing
competitive
environment for
deposits and
customer shift
within deposits from
transaction accounts
to higher costing
term deposits. This
increase continued
at a faster pace
than the repricing
of our existing
interest-earning
assets (the
origination of new
loans and purchase
of new securities.)
There was no
provision for loan
losses recorded
during the three
months ended March
31, 2008. The
provision recorded
during the three
months ended March
31, 2007 was
$10,000. The
provision recorded
during both the
years ended March
31, 2008 and 2007
was $90,000. The
consistency in the
provisions is the
result of stability
in the Bank's loan
portfolio balances
and non-performing
loans. The gross
loan portfolio
increased $2.4
million, or 0.6 %,
from $419.1 million
at March 31, 2007 to
$421.5 million at
March 31, 2008. The
previous year's
increase in the
gross loan portfolio
was slightly higher
at $13.7 million, or
3.4%. Non-performing
loans increased
slightly from
$258,000 at March
31, 2007 to $265,000
at March 31, 2008.
At the end of March
31, 2008,
non-performing loans
consisted of three
one- to four-family
residential real
estate loans. The
percentage of
non-performing loans
to total loans has
been consistently
low, remaining at
0.06% to total gross
loans at both period
ends.
Non-interest
income increased
$108,000, or 58.1%,
to $294,000 for the
three months ended
March 31, 2008 as
compared to $186,000
for the three months
ended March 31,
2007. The increase
during the 2008
period was due to
management's
initiatives to
create non-interest
income, in
particular the
addition of bank
owned life insurance
in February 2007,
which increased
non-interest income
by $98,000 from the
same period in 2007.
Non-interest
income increased
$767,000, or 205.6%,
to $1.14 million for
the year ended March
31, 2008 as compared
to $373,000 for the
year ended March 31,
2007. The increase
during fiscal 2008
was due to an
increase of $776,000
in non-interest
income from bank
owned life insurance
that was purchased
in February 2007.
Non-interest
expense decreased
$160,000, or 4.9%,
to $3.11 million for
the three months
ended March 31, 2008
as compared to $3.27
million for the
three months ended
March 31, 2007.
Non-interest expense
decreased over the
2008 period
primarily as a
result of a
$100,000, or 5.5%,
decrease in salaries
and employee
benefits and a
$229,000, or 49.4%,
decrease in
directors'
compensation that
were partially
offset by increases
of $40,000, or 87.0%
in advertising
expense, $81,000, or
155.8% in legal
expense and $46,000,
or 12.5%, in
miscellaneous
expenses. The
decrease in salaries
and employee
benefits was due to
a decrease in stock
option, ESOP and
health insurance
expenses. Directors'
compensation
decreased mostly due
to the immediate
vesting and
recognition in
fiscal 2007 of
expense of
previously granted
restricted stock
awards to a Company
director, following
his resignation due
to health problems.
The increase in
advertising expense
was due to increased
advertising efforts.
Legal fees increased
as a result of an
increase in
litigation costs,
and the increase in
miscellaneous
expenses was mainly
attributable to an
increase in printing
and loan expenses.
Non-interest
expense decreased
$250,000, or 2.0%,
to $12.13 million
for the year ended
March 31, 2008 as
compared to $12.38
million for the year
ended March 31,
2007. Non-interest
expense decreased
over the 2008 period
primarily as a
result of a
$175,000, or 2.5%,
decrease in salaries
and employee
benefits and a
$351,000, or 26.0%,
decrease in
directors'
compensation, that
were partially
offset by increases
of $64,000, or 26.2%
in legal expense and
$176,000, or 12.7%,
in miscellaneous
expenses. The
decrease in salaries
and employee
benefits was due to
a decrease in stock
option, ESOP and
health insurance
expenses. Directors'
compensation
decreased mostly due
to the immediate
vesting and
recognition in
fiscal 2007 of
expense of
previously granted
restricted stock
awards to a Company
director, following
his resignation due
to health problems.
Legal fees increased
as a result of an
increase in
litigation costs,
and the increase in
miscellaneous
expenses was mainly
attributable to the
2007 period
including a refund
of previously
expensed costs
relating to a
potential branch
site.
Income taxes
decreased $2,000, or
1.2%, to $163,000
from $165,000 for
the three months
ended March 31, 2008
and 2007,
respectively, and
decreased $714,000,
or 52.9%, to
$636,000 from $1.35
million for the
years ended March
31, 2008 and 2007,
respectively. While
pre-tax income was
higher for the 2008
three month period,
there was an
increase in
tax-exempt income
from bank owned life
insurance which
reduced the overall
tax expense. For the
year ended March 31,
2008, an increase in
tax-exempt income
from bank owned life
insurance was
coupled with a lower
pre-tax income which
caused an overall
reduction in
expense. The overall
effective income tax
rates for the three
months and year
ended March 31, 2008
were 20.7% and
21.1%, respectively,
as compared with
26.6% and 35.3%,
respectively, for
the same periods in
2007.
The Company's
total assets
increased $94.1
million, or 11.7%,
to $899.1 million at
March 31, 2008, from
$805.0 million at
March 31, 2007. Net
loans increased $2.0
million, or 0.5%, to
$420.6 million at
March 31, 2008 from
$418.6 million at
March 31, 2007, as
internal origination
volume more than
offset repayment
levels. Securities,
including both
available for sale
and held to maturity
issues, increased
$75.0 million, or
24.5%, to $380.9
million at March 31,
2008, from $305.9
million at March 31,
2007, as funds
received from
maturities and calls
of investment
securities were
redeployed into
higher yielding
mortgage-backed
securities. In
addition, as part of
an income
enhancement
strategy, management
implemented a
leverage strategy in
November 2007, under
which we borrow
funds from the
Federal Home Loan
Bank of New York and
simultaneously
invest those funds
in higher yielding
mortgage-backed
securities. Cash and
cash equivalents
increased by $11.1
million, or 27.0%,
to $52.2 million at
March 31, 2008, as
compared to $41.1
million at March 31,
2007, as calls of
securities close to
the period end were
remaining in
interest-bearing
deposits.
Total liabilities
increased $106.3
million, or 17.1%,
to $726.7 million at
March 31, 2008 from
$620.4 million at
March 31, 2007.
Deposits increased
$9.2 million, or
1.6%, to $576.7
million at March 31,
2008 from $567.5
million at March 31,
2007, coupled with
an increase of $97.0
million, or 214.1%
in borrowed funds,
which had a balance
of $142.3 million at
March 31, 2008 as
compared to $45.3
million at March 31,
2007. In November
2007, we began a
leverage strategy of
borrowing funds from
the Federal Home
Loan Bank of New
York and
simultaneously
investing those
funds in higher
yielding
mortgage-backed
securities. During
the year ended March
31, 2008, $116.2
million in long-term
borrowings with an
average rate of
3.87% were
originated, while
$19.2 million of
long-term borrowings
were repaid in
accordance with
their original
terms.
Total
stockholders' equity
decreased $12.2
million, or 6.6%, to
$172.4 million at
March 31, 2008 from
$184.6 million at
March 31, 2007. The
decrease resulted
primarily from the
repurchase of
approximately 1.5
million shares of
Company common stock
for $16.5 million,
and cash dividends
paid of $2.1
million, partially
offset by net income
of $2.4 million, a
net decrease in
unrealized losses of
$1.4 million on the
available for sale
securities
portfolios, ESOP
shares committed to
be released of
$793,000, and $1.6
million for stock
options and awards
earned under the
Company's 2005
Equity Incentive
Plan and related tax
benefits.
John A.
Celentano, Jr., the
Company's Chairman
and Chief Executive
Officer, stated, "In
the past year some
of our competitors,
the country's
largest banks,
attracted funds in a
rate frenzy and
invested in subprime
mortgages to support
their habit. We
refused to conduct
our business in such
a risky fashion and,
due primarily to the
flat yield curve we
recorded a decrease
in our net income.
On the positive
side, however, as
the folly of the
competitors'
thinking became
apparent in the
fourth quarter,
Clifton Savings
witnessed a return
to a more normal
yield curve. We paid
fair, competitive
rates for deposits
and we charged fair,
competitive rates
for loans and, as a
result, our deposits
rose from $567.5
million to $576.7
million, our loans
actually increased
from $418.6 million
to $420.6 million,
and our total assets
increased from
$805.0 million to
$899.1 million. In
addition, we paid
our sixteenth
consecutive dividend
and of great
importance to
Clifton Savings, the
quality of our loans
remains pristine.
Only one of 2,250
loans is in
foreclosure."
The Company is
the holding company
of the Bank, a
federally chartered
savings bank
headquartered in
Clifton, New Jersey.
The Bank operates a
total of 10
full-service banking
offices in northeast
New Jersey. The
Company's majority
stockholder is
Clifton MHC, a
federally chartered
mutual holding
company.
This release
contains
"forward-looking
statements" which
may describe future
plans and
strategies,
including our
expectations of
future financial
results.
Management's ability
to predict results
or the effect of
future plans or
strategies is
inherently
uncertain. Factors
that could affect
our actual results
include market
interest rate
trends, the general
regional and
national economic
climate, our ability
to control costs and
expenses, actions by
our competitors and
federal and state
regulation. As we
have no control over
these factors, they
should be considered
in evaluating any
forward-looking
statements and undue
reliance should not
be placed on such
statements.
Selected Consolidated Financial and Other Data
At March 31,
-----------------------------------
2008 2007 % Change
------------- ------------ --------
(Dollars in thousands)
Financial Condition Data:
Total assets $899,056 $805,042 11.68%
Loans receivable, net 420,619 418,616 0.48%
Cash and cash equivalents 52,231 41,105 27.07%
Securities 380,878 305,860 24.53%
Deposits 576,722 567,459 1.63%
Borrowings 142,306 45,346 213.82%
Total equity 172,355 184,598 -6.63%
Year Ended March 31,
-----------------------------------
2008 2007 % Change
------------- ------------ --------
(Dollars in thousands)
Operating Data:
Interest income $38,570 $37,520 2.80%
Interest expense 24,484 21,600 13.35%
------------- ------------
Net interest income 14,086 15,920 -11.52%
Provision for loan losses 90 90 0.00%
------------- ------------
Net interest income after
provision for loan losses 13,996 15,830 -11.59%
Noninterest income 1,137 373 204.83%
Noninterest expense 12,125 12,380 -2.06%
------------- ------------
Earnings before income taxes 3,008 3,823 -21.32%
Total income taxes 636 1,351 -52.92%
------------- ------------
Net earnings $2,372 $2,472 -4.05%
============= ============
Three Months
Ended March 31,
-----------------------------------
2008 2007 % Change
------------- ------------ --------
(Dollars in thousands)
Operating Data:
Interest income $10,117 $9,414 7.47%
Interest expense 6,514 5,696 14.36%
------------- ------------
Net interest income 3,603 3,718 -3.09%
Provision for loan losses 0 10 -100.00%
------------- ------------
Net interest income after
provision for loan losses 3,603 3,708 -2.83%
Noninterest income 294 186 58.06%
Noninterest expense 3,111 3,273 -4.95%
------------- ------------
Earnings before income taxes 786 621 26.57%
Total income taxes 163 165 -1.21%
------------- ------------
Net earnings $623 $456 36.62%
============= ============
At or For the Three
At or For the Year Ended Months Ended
March 31, March 31,
------------------------ -------------------
2008 2007 2008 2007
------------ ----------- --------- ---------
Performance Ratios (1):
Return on average assets 0.29% 0.30% 0.29% 0.23%
Return on average equity 1.34% 1.29% 1.45% 0.97%
Interest rate spread (2) 1.09% 1.23% 1.11% 1.11%
Net interest margin (3) 1.82% 2.01% 1.78% 1.91%
Noninterest expense to
average assets 1.49% 1.51% 1.46% 1.62%
Efficiency ratio (4) 79.65% 75.98% 79.83% 83.84%
Average interest-earning
assets to average
interest-bearing
liabilities 1.23x 1.29x 1.21x 1.27x
Average equity to average
assets 21.65% 23.49% 20.07% 23.23%
Basic and diluted
earnings per share $0.09 $0.09 $0.02 $0.02
Cash dividends paid per
common share $0.20 $0.20 $0.05 $0.05
Dividend payout ratio 86.97% 96.48% 78.01% 125.22%
Capital Ratios (5):
Tangible capital 16.71% 18.27% 16.71% 18.27%
Core capital 16.71% 18.27% 16.71% 18.27%
Risk-based capital 45.02% 46.70% 45.02% 46.70%
Asset Quality Ratios:
Allowance for loan losses
as a percent of total
gross loans 0.34% 0.32% 0.34% 0.32%
Allowance for loan losses
as a percent of
nonperforming loans 543.40% 523.26% 543.40% 523.26%
Net charge-offs to
average outstanding
loans during the period 0.00% 0.00% 0.00% 0.00%
Nonperforming loans as a
percent of total loans 0.06% 0.06% 0.06% 0.06%
Nonperforming assets as a
percent of total assets 0.03% 0.03% 0.03% 0.03%
Other Data:
Number of:
Real estate loans
outstanding 2,250 2,284 2,250 2,284
Deposit accounts 32,633 34,410 32,633 34,410
Full service customer
service facilities 10 10 10 10
(1) Performance ratios for the three month periods presented are
annualized.
(2) Represents the difference between the weighted average yield on
average interest-earning assets and the weighted average cost of
interest-bearing liabilities.
(3) Represents net interest income as a percent of average interest-
earning assets.
(4) Represents noninterest expense divided by the sum of net interest
income and noninterest income, excluding gains or losses on the sale
of securities.
(5) Bank only.
Source: Clifton
Savings Bancorp,
Inc. |
