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Form 8-K MSB FINANCIAL CORP For: Feb 12

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February 12, 2016 4:45 PM EST

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549


FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934



February 12, 2016
Date of Report
(Date of earliest event reported)


MSB Financial Corp.
(Exact name of Registrant as specified in its Charter)


Maryland
  
001-37506
  
34-1981437
(State or other jurisdiction
of incorporation)
  
(SEC Commission
File No.)
  
(IRS Employer
Identification Number)


1902 Long Hill Road, Millington, New Jersey
07946-0417
(Address of principal executive offices)
(Zip Code)

Registrant’s telephone number, including area code:
(908) 647-4000
  

Not Applicable
(Former name or former address, if changed since last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
   
[  ]
Written communications pursuant to Rule 425 under the Securities Act
[  ]
Soliciting material pursuant to Rule 14a-12 under the Exchange Act
[  ]
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act
[  ]
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act



 
 
 

INFORMATION TO BE INCLUDED IN REPORT



Item 2.02
  
Results of Operations and Financial Condition
  

On February 12, 2016, the Registrant issued a press release to report earnings for the quarter and year ended December 31, 2015.  A copy of the press release is furnished with this Form 8-K as Exhibit 99.

Item 9.01
  
Financial Statements and Exhibits
  


Exhibit
Number
  
 
Description
     
99
  
Press Release dated February 12, 2016











 
 
 

SIGNATURES


Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, hereunto duly authorized.


   
MSB FINANCIAL CORP.
   
 
 
By:
 
 
/s/ Michael A. Shriner
Date:  February 12, 2016
    
Michael A. Shriner
President and Chief Executive Officer


MSB FINANCIAL CORP. RELEASES FOURTH QUARTER EARNINGS
 
Millington, New Jersey, February 12, 2016 – MSB Financial Corp. (NASDAQ: MSBF) (the “Company”) parent company of Millington Bank, reported today the results of its operations for the three and twelve months ended December 31, 2015.  The results of operations reflect the results of operations of MSB Financial Corp., a federal corporation (“Old MSB”) which was merged with and into the Company on July 16, 2015 upon completion of the second-step conversion transaction.
 
The Company reported net income of $2,000 for the three months ended December 31, 2015, compared to a net loss of $9,000 for the three months ended December 31, 2014. Net income for the twelve months ended December 31, 2015 was $443,000 compared to net income of $707,000 for the twelve months ended December 31, 2014. Net income for the quarter and the full year 2015 reflect the impact of $457,000 of charges related to the conversion from the Company’s existing core data processor as previously disclosed. In addition, the Company recorded expense of approximately $60,000 related to the conversion from its current website provider.
 
Net income per diluted common share was zero for both the three months ended December 31, 2015 and December 31, 2014. Net income per diluted common share was $0.08 for the twelve months ended December 31, 2015 compared to $0.13 for the twelve months ended December 31, 2014.
 
Total assets were $375.7 million at December 31, 2015, compared to $340.3 million at December 31, 2014, an increase of $35.4 million or 10.4%. On July 16, 2015, the Company sold 3,766,592 shares of its common stock (including 150,663 shares sold to the Bank’s employee stock ownership plan) at $10.00 per share, for gross proceeds of approximately $37.7 million. In addition, 2,187,242 shares were issued to former holders of the common stock of Old MSB (other than the MHC) in exchange for such shares at a per share exchange ratio of 1.1397 with cash paid in lieu of fractional shares. During 2015, the Company experienced growth of $30.9 million or 13.3%, in loans receivable, net. Commercial and multi-family real estate loans had the most growth during 2015 as the Company continues to diversify its loan portfolio.

The following table summarizes loan balances and composition at December 31, 2015 and 2014:
   
At
    
At
  
   
December 31,
    
December 31,
  
(In thousands)
  
2015
    
2014
  
                         
Residential mortgage:
                        
   One-to-four family
   $ 154,624       57.1 %   $ 144,966       61.2 %
   Home equity
     35,002       12.9       36,847       15.6  
                                 
Total residential mortgage
     189,626       70.0       181,813       76.7  
                                 
 Commercial and multi-family real estate
     59,642       22.0       31,637       13.4  
 Construction
     10,895       4.0       12,651       5.3  
 Commercial and industrial
     10,275       3.8       9,663       4.1  
                                 
Total commercial loans
     80,812       29.8       53,951       22.8  
                                 
Consumer loans
     493       0.2       1,152       0.5  
                                 
Total loans receivable
     270,931       100.0 %     236,916       100.0 %
                                 
Less:
                                
   Loans in process
     4,600               1,499          
   Deferred loan fees
     417               334          
   Allowance
     3,602               3,634          
                                 
Total loans receivable, net
   $ 262,312             $ 231,449          
                                 
 
 
 
 
Other real estate owned (OREO) was reduced to zero as of December 31, 2015 compared to $1.3 million at December 31, 2014.

Total deposits at December 31, 2015 were $262.6 million compared with $266.1 million at December 31, 2014.  Overall, deposits decreased by $3.5 million; however, non-interest-bearing balances increased by $3.3 million while interest-bearing deposits declined $6.8 million year-over-year as the Company focused on deposit pricing and the development of deeper customer relationships. Within non-interest-bearing accounts, growth was experienced in business checking accounts.  Savings and club account growth combined to offset some of the decrease in certificates of deposit during the quarter.

“The year 2015 was a transformative one for the organization.  During the course of the year the Company undertook several significant transformations beginning with the adoption of a December fiscal year end, the expansion of an experienced management team and the successful completion of the Company’s stock offering and transition to a fully publicly held institution”, stated Michael A. Shriner, President and Chief Executive Officer.  “Our staff is working diligently on a core system conversion that is expected to provide a more efficient and effective delivery system for our products and services to position us in the proper direction toward achieving our goal of becoming a high performing organization.  Additionally, our transition to a managed IT function has provided for a stronger infrastructure and has assisted us greatly in managing the increasing risk of cybersecurity.”
 
Mr. Shriner added, “During 2015, our efforts related to loan production were substantial as well as our management of nonperforming assets indicated by the lack of OREO properties at December 31, 2015.  Non-performing loans to total loans were 2.29% at December 31, 2015 compared to 2.57% at December 31, 2014.
 
“We are pleased to welcome two new experienced directors to our boards this quarter. Together with the board, Millington Bank and its employees are driven to deliver on the Vision that has been defined with Integrity and Passion” Mr. Shriner concluded.


Forward Looking Statement Disclaimer
 
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. Factors that may cause actual results to differ from those contemplated include our continued ability to grow the loan portfolio, the successful conversion of our core system and our continued ability to manage cybersecurity risks.
 

Contact:
Michael A. Shriner, President & CEO
 
(908) 647-4000
 



 
 
 


 
 
MSB FINANCIAL CORP
            
(In Thousands, except for per share amount)
  
(Unaudited)
        
Statement of Financial Condition Data:
  
12/31/2015
    
12/31/2014
  
Total assets
   $ 375,690     $ 340,252  
                 
Cash and cash equivalents
     12,303       7,519  
                 
Loans receivable, net
     262,312       231,449  
                 
Securities held to maturity
     78,995       78,518  
                 
Deposits
     262,598       266,068  
                 
Federal Home Loan Bank advances
     32,675       30,000  
                 
Total stockholders' equity
     76,363       41,025  
                 
Stock Information:
                
Number of shares of common stock outstanding
     5,954       5,010  
Book value per share of common stock*
   $ 12.83     $ 8.19  
Closing market price
   $ 12.50     $ 8.99  
                 
*In in previous quarters, the unallocated shares of ESOP reduced the number of shares used for the calculation and to be consistent with industry releases we have adjusted our calculation to conform and make the date comparable to others within our industry.
  

 
     (Unaudited)    (Unaudited)  
    For the three months     For the twelve months ended  
Summary of Operations:  
ended December 31,
    December 31,  
 (In Thousands, except for per share amounts)    2015      2014      2015      2014  
                                 
Total interest income
   $ 3,123     $ 2,981     $ 12,206     $ 11,990  
                                 
Total interest expense
     522       582       2,156       2,346  
                                 
Net interest income
     2,601       2,399       10,050       9,644  
                                 
Provision for loan losses
     90       -       113       400  
                                 
Net interest income after provision for loan losses
     2,511       2,399       9,937       9,244  
                                 
Non-interest income
     210       162       714       685  
                                 
Non-interest expense
     2,724       2,628       10,024       8,878  
                                 
(Loss) income before taxes
     (3 )     (67 )     627       1,051  
                                 
Income tax (benefit) expense
     (5 )     (58 )     184       344  
                                 
Net income
   $ 2     $ (9 )   $ 443     $ 707  
                                 
Net income per common share - basic
     -       -       0.08       0.13  
Net income per common share - diluted
     -       -       0.08       0.13  
                                 
Weighted average number of shares - basic
     5,737       5,632       5,685       5,625  
Weighted average number of shares - diluted
     5,786       5,632       5,717       5,625  
                                 
Performance Ratios:
                                
Return on average assets annualized
     0.00 %     (0.01 )%     0.12 %     0.21 %
Return on average common equity annualized
     0.01 %     (0.09 )%     0.79 %     1.73 %
Net interest margin
     2.96 %     3.02 %     2.95 %     3.00 %
Efficiency ratio
     96.91 %     102.62 %     93.13 %     85.95 %
Operating expenses / average assets annualized
     2.92 %     3.08 %     2.77 %     2.58 %
                                 

 
 
 
 

 
    For the three months ended
           12/31/15                  12/31/14        
          Interest                  Interest         
Average Balance Sheet   Average      Income/            Average      Income/         
(In Thousands)   Balance      Expense      Yield      Balance      Expense      Yield  
Interest-earning assets:
                                    
Loans Receivable
   $ 261,090     $ 2,660       4.08 %   $ 234,772     $ 2,537       4.32 %
Securities held to maturity
     79,112       438       2.21       79,750       423       2.12  
Other interest-earning assets
     11,490       25       0.87       3,056       21       2.75  
Total interest-earning assets
     351,692       3,123       3.55       317,578       2,981       3.75  
Allowance for Loan Loss
     (3,631 )                     (3,523 )                
Non-interest-earning assets
     24,961                       27,719                  
Total non-interest-earning assets
     21,330                       24,196                  
Total Assets
   $ 373,022                     $ 341,774                  
                                                 
Interest-bearing liabilities:
                                                
NOW & Money Market
   $ 44,789     $ 19       0.17 %   $ 42,367     $ 16       0.15 %
Savings and club deposits
     102,156       58       0.23       99,938       55       0.22  
Certificates of deposit
     82,741       241       1.17       95,985       318       1.33  
Total interest-bearing deposits
     229,686       318       0.55       238,290       389       0.65  
                                                 
Federal Home Loan Bank advances
     32,675       204       2.50       30,870       193       2.50  
Total interest-bearing liabilities
     262,361       522       0.80       269,160       582       0.86  
                                                 
Non-interest-bearing deposit
     30,462                       28,413                  
Other non-interest-bearing liabilities
     3,504                       2,858                  
Total Liabilities
     296,327                       300,431                  
                                                 
Equity
     76,695                       41,343                  
Total Liabilities and Equity
   $ 373,022                     $ 341,774                  
                                                 
Net Interest Spread
             2,601       2.75 %             2,399       2.89 %
                                                 
Net Interest Margin
                     2.96 %                     3.02 %
                                                 
Ratio of Interest Earning Assets to Interest Bearing Liabilities
     134.05 %                     117.99 %                
                                                 


 
 
 


 
    For the twelve months ended
           12/31/15                  12/31/14        
          Interest                  Interest         
Average Balance Sheet   Average      Income/            Average      Income/         
(In Thousands)   Balance      Expense      Yield      Balance      Expense      Yield  
Interest-earning assets:
                                    
Loans Receivable
   $ 247,997     $ 10,376       4.18 %   $ 234,619     $ 10,095       4.30 %
Securities held to maturity
     79,868       1,726       2.16       83,338       1,807       2.17  
Other interest-earning assets
     12,880       104       0.81       3,428       88       2.57  
Total interest-earning assets
     340,745       12,206       3.58       321,385       11,990       3.73  
Allowance for Loan Loss
     (3,593 )                     (3,645 )                
Non-interest-earning assets
     25,066                       26,842                  
Total non-interest-earning assets
     21,473                       23,197                  
Total Assets
   $ 362,218                     $ 344,582                  
                                                 
Interest-bearing liabilities:
                                                
NOW & Money Market
   $ 46,493     $ 75       0.16 %   $ 41,217     $ 57       0.14 %
Savings and club deposits
     101,106       223       0.22       103,345       223       0.22  
Certificates of deposit
     86,948       1,064       1.22       97,640       1.291       1.32  
Total interest-bearing deposits
     234,547       1,362       0.58       242,202       1,571       0.65  
                                                 
Federal Home Loan Bank advances
     34,087       794       2.33       33,865       775       2.29  
Total interest-bearing liabilities
     268,634       2,156       0.80       276,067       2,346       0.85  
                                                 
Non-interest-bearing deposit
     34,248                       24,698                  
Other non-interest-bearing liabilities
     3,135                       2,959                  
Total Liabilities
     306,017                       303,724                  
                                                 
Equity
     56,201                       40,858                  
Total Liabilities and Equity
   $ 362,218                     $ 344,582                  
                                                 
Net Interest Spread
             10,050       2.78 %             9,644       2.88 %
                                                 
Net Interest Margin
                     2.95 %                     3.00 %
                                                 
Ratio of Interest Earning Assets to Interest Bearing Liabilities
     126.84 %                     116.42 %                
                                                 
 
 

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