|
(X)
|
QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
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Stewardship
Financial Corporation
|
||
(Exact
name of registrant as specified in its charter)
|
||
New
Jersey
|
22-3351447
|
|
(State
or other jurisdiction of
|
(I.R.S.
Employer Identification No.)
|
|
incorporation
or organization)
|
||
630
Godwin Avenue, Midland Park, NJ
|
07432
|
|
(Address
of principal executive offices)
|
(Zip
Code)
|
|
(201) 444-7100
|
||
(Registrant’s
telephone number, including area
code)
|
Large
accelerated filer ¨
|
Accelerated
filer ¨
|
Non-accelerated
filer ¨ (Do
not check if a smaller reporting company)
|
Smaller
reporting company x
|
PAGE
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NUMBER
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1
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2
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3
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4
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5 -
6
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7 -
17
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18
- 24
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25
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25
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26
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27
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28
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Stewardship Financial Corporation and Subsidiary
Consolidated Statements of Financial Condition
(Unaudited)
|
||||
March
31,
|
December
31,
|
|||||||
2010
|
2009
|
|||||||
Assets
|
||||||||
Cash
and due from banks
|
$ | 11,918,000 | $ | 8,840,000 | ||||
Other
interest-earning assets
|
278,000 | 31,000 | ||||||
Cash
and cash equivalents
|
12,196,000 | 8,871,000 | ||||||
Securities
available for sale
|
93,926,000 | 103,026,000 | ||||||
Securities
held to maturity; estimated fair value of $72,611,000 (2010)
and
|
||||||||
$68,765,000
(2009)
|
70,758,000 | 67,717,000 | ||||||
FHLB-NY
stock, at cost
|
2,390,000 | 3,227,000 | ||||||
Loans,
net of allowance for loan losses of $8,174,000 (2010) and $6,920,000
(2009)
|
453,281,000 | 453,119,000 | ||||||
Mortgage
loans held for sale
|
2,724,000 | 660,000 | ||||||
Premises
and equipment, net
|
6,824,000 | 6,861,000 | ||||||
Accrued
interest receivable
|
3,045,000 | 3,167,000 | ||||||
Bank
owned life insurance
|
9,575,000 | 9,488,000 | ||||||
Other
assets
|
7,507,000 | 7,708,000 | ||||||
Total
assets
|
$ | 662,226,000 | $ | 663,844,000 | ||||
Liabilities
and stockholders' equity
|
||||||||
Liabilities
|
||||||||
Deposits:
|
||||||||
Noninterest-bearing
|
$ | 94,651,000 | $ | 88,427,000 | ||||
Interest-bearing
|
448,279,000 | 441,503,000 | ||||||
Total
deposits
|
542,930,000 | 529,930,000 | ||||||
Federal
Home Loan Bank of New York Advances
|
36,000,000 | 54,600,000 | ||||||
Subordinated
debentures
|
7,217,000 | 7,217,000 | ||||||
Securities
sold under agreements to repurchase
|
15,399,000 | 15,396,000 | ||||||
Accrued
interest payable
|
1,000,000 | 1,193,000 | ||||||
Accrued
expenses and other liabilities
|
5,677,000 | 1,997,000 | ||||||
Total
liabilities
|
608,223,000 | 610,333,000 | ||||||
Commitments
and contingencies
|
- | - | ||||||
Stockholders'
equity
|
||||||||
Preferred
stock, no par value; 2,500,000 shares authorized; 10,000
shares
|
||||||||
issued
and outstanding at March 31, 2010 and December 31, 2009.
|
||||||||
Liquidation
preference of $10,000,000
|
9,750,000 | 9,736,000 | ||||||
Common
stock, no par value; 10,000,000 shares authorized;
|
||||||||
5,846,928
and 5,834,515 shares issued: 5,842,366 and 5,834,515
shares
|
||||||||
outstanding
at March 31, 2010 and December 31, 2009, respectively
|
40,498,000 | 40,415,000 | ||||||
Treasury
stock, 4,561 shares outstanding at March 31, 2010
|
(43,000 | ) | - | |||||
Retained
earnings
|
3,128,000 | 2,922,000 | ||||||
Accumulated
other comprehensive income, net
|
670,000 | 438,000 | ||||||
Total
stockholders' equity
|
54,003,000 | 53,511,000 | ||||||
Total
liabilities and stockholders' equity
|
$ | 662,226,000 | $ | 663,844,000 | ||||
See
notes to unaudited consolidated financial statements.
|
Stewardship Financial Corporation and Subsidiary
|
Consolidated
Statements of Income
|
(Unaudited)
|
Three
Months Ended
|
||||||||
March
31,
|
||||||||
2010
|
2009
|
|||||||
Interest
income:
|
||||||||
Loans
|
$ | 6,874,000 | $ | 6,608,000 | ||||
Securities
held to maturity
|
||||||||
Taxable
|
422,000 | 441,000 | ||||||
Non-taxable
|
231,000 | 213,000 | ||||||
Securities
available for sale
|
||||||||
Taxable
|
880,000 | 1,137,000 | ||||||
Non-taxable
|
49,000 | 52,000 | ||||||
FHLB
dividends
|
37,000 | 19,000 | ||||||
Other
interest-earning assets
|
2,000 | 3,000 | ||||||
Total
interest income
|
8,495,000 | 8,473,000 | ||||||
Interest
expense:
|
||||||||
Deposits
|
1,820,000 | 2,372,000 | ||||||
Borrowed
money
|
496,000 | 503,000 | ||||||
Total
interest expense
|
2,316,000 | 2,875,000 | ||||||
Net
interest income before provision for loan losses
|
6,179,000 | 5,598,000 | ||||||
Provision
for loan losses
|
1,550,000 | 150,000 | ||||||
Net
interest income after provision for loan losses
|
4,629,000 | 5,448,000 | ||||||
Noninterest
income:
|
||||||||
Fees
and service charges
|
469,000 | 396,000 | ||||||
Bank
owned life insurance
|
86,000 | 83,000 | ||||||
Gain
on sales of mortgage loans
|
55,000 | 11,000 | ||||||
Gain
on calls and sales of securities
|
328,000 | 39,000 | ||||||
Merchant
processing
|
- | 118,000 | ||||||
Other
|
73,000 | 60,000 | ||||||
Total
noninterest income
|
1,011,000 | 707,000 | ||||||
Noninterest
expenses:
|
||||||||
Salaries
and employee benefits
|
2,126,000 | 2,059,000 | ||||||
Occupancy,
net
|
489,000 | 472,000 | ||||||
Equipment
|
309,000 | 265,000 | ||||||
Data
processing
|
325,000 | 305,000 | ||||||
FDIC
insurance premium
|
224,000 | 170,000 | ||||||
Charitable
contributions
|
165,000 | 171,000 | ||||||
Merchant
processing
|
- | 108,000 | ||||||
Other
|
786,000 | 858,000 | ||||||
Total
noninterest expenses
|
4,424,000 | 4,408,000 | ||||||
Income
before income tax expense
|
1,216,000 | 1,747,000 | ||||||
Income
tax expense
|
345,000 | 560,000 | ||||||
Net
income
|
871,000 | 1,187,000 | ||||||
Dividends
on preferred stock and accretion
|
137,000 | 92,000 | ||||||
Net
income available to common stockholders
|
$ | 734,000 | $ | 1,095,000 | ||||
Basic
earnings per common share
|
$ | 0.13 | $ | 0.19 | ||||
Diluted
earnings per common share
|
$ | 0.13 | $ | 0.19 | ||||
Weighted
average number of common shares outstanding
|
5,839,974 | 5,829,321 | ||||||
Weighted
average number of diluted common
|
||||||||
shares
outstanding
|
5,841,633 | 5,834,953 | ||||||
Share
data has been restated to reflect a 5% stock dividend paid November 16,
2009.
|
||||||||
See
notes to unaudited consolidated financial statements.
|
Stewardship
Financial Corporation and Subsidiary
|
|||||||
Consolidated
Statement of Changes in Stockholders'
Equity
|
|||||||
(Unaudited)
|
|||||||
Three
Months Ended March 31, 2010
|
||||||||||||||||||||||||||||
Accumulated
|
||||||||||||||||||||||||||||
Other
|
||||||||||||||||||||||||||||
Comprehensive
|
||||||||||||||||||||||||||||
Preferred
|
Common
Stock
|
Treasury
|
Retained
|
Gain
(Loss),
|
||||||||||||||||||||||||
Stock
|
Shares
|
Amount
|
Stock
|
Earnings
|
Net
|
Total
|
||||||||||||||||||||||
Balance
-- December 31, 2009
|
$ | 9,736,000 | 5,834,515 | $ | 40,415,000 | $ | - | $ | 2,922,000 | $ | 438,000 | $ | 53,511,000 | |||||||||||||||
Cash
dividends paid on common stock
|
- | - | - | - | (526,000 | ) | - | (526,000 | ) | |||||||||||||||||||
Payment
of discount on dividend
|
||||||||||||||||||||||||||||
reinvestment
plan
|
- | - | (9,000 | ) | - | - | - | (9,000 | ) | |||||||||||||||||||
Cash
dividends accrued on preferred stock
|
- | - | - | - | (125,000 | ) | - | (125,000 | ) | |||||||||||||||||||
Common
stock issued under stock plans
|
- | 3,037 | 24,000 | - | - | - | 24,000 | |||||||||||||||||||||
Stock
option compensation expense
|
- | - | 13,000 | - | - | - | 13,000 | |||||||||||||||||||||
Stock
options exercised
|
- | 9,376 | 55,000 | (43,000 | ) | - | - | 12,000 | ||||||||||||||||||||
Accretion
of discount on preferred stock
|
12,000 | - | - | - | (12,000 | ) | - | |||||||||||||||||||||
Amortization
of issuance costs
|
2,000 | - | - | - | (2,000 | ) | - | |||||||||||||||||||||
Comprehensive
income:
|
||||||||||||||||||||||||||||
Net
income
|
- | - | - | - | 871,000 | - | 871,000 | |||||||||||||||||||||
Change
in unrealized holding gains on
|
||||||||||||||||||||||||||||
securities
available for sale arising during
|
||||||||||||||||||||||||||||
the
period (net tax expense of $131,000)
|
- | - | - | - | - | 196,000 | 196,000 | |||||||||||||||||||||
Reclassification
adjustment for gains in
|
||||||||||||||||||||||||||||
net
income (net of taxes of $76,000)
|
- | - | - | - | - | 141,000 | 141,000 | |||||||||||||||||||||
Change
in fair value of interest rate
|
||||||||||||||||||||||||||||
swap
(net of tax benefit of $70,000)
|
- | - | - | - | - | (105,000 | ) | (105,000 | ) | |||||||||||||||||||
Total
comprehensive income
|
1,103,000 | |||||||||||||||||||||||||||
Balance
-- March 31, 2010
|
$ | 9,750,000 | 5,846,928 | $ | 40,498,000 | $ | (43,000 | ) | $ | 3,128,000 | $ | 670,000 | $ | 54,003,000 | ||||||||||||||
Three
Months Ended March 31, 2009
|
||||||||||||||||||||||||||||
Accumulated
|
||||||||||||||||||||||||||||
Other
|
||||||||||||||||||||||||||||
Comprehensive
|
||||||||||||||||||||||||||||
Preferred
|
Common
Stock
|
Treasury
|
Retained
|
Gain
(Loss),
|
||||||||||||||||||||||||
Stock
|
Shares
|
Amount
|
Stock
|
Earnings
|
Net
|
Total
|
||||||||||||||||||||||
Balance
-- December 31, 2008
|
$ | - | 5,575,095 | $ | 37,962,000 | $ | (272,000 | ) | $ | 4,383,000 | $ | 723,000 | $ | 42,796,000 | ||||||||||||||
Proceeds
from issuance of preferred
|
||||||||||||||||||||||||||||
stock
and a warrant
|
9,731,000 | 269,000 | 10,000,000 | |||||||||||||||||||||||||
Preferred
stock issuance costs
|
(49,000 | ) | (49,000 | ) | ||||||||||||||||||||||||
Cash
dividends paid on common stock
|
- | - | - | - | (527,000 | ) | - | (527,000 | ) | |||||||||||||||||||
Payment
of discount on dividend
|
||||||||||||||||||||||||||||
reinvestment
plan
|
- | - | (11,000 | ) | - | - | - | (11,000 | ) | |||||||||||||||||||
Cash
dividends accrued on preferred stock
|
- | - | - | - | (84,000 | ) | - | (84,000 | ) | |||||||||||||||||||
Common
stock issued under stock plans
|
- | 2,288 | 22,000 | - | - | - | 22,000 | |||||||||||||||||||||
Stock
option compensation expense
|
- | - | 12,000 | - | - | - | 12,000 | |||||||||||||||||||||
Stock
options exercised
|
- | 7,330 | 40,000 | (32,000 | ) | - | - | 8,000 | ||||||||||||||||||||
Repurchase
of common stock
|
- | - | - | (75,000 | ) | - | - | (75,000 | ) | |||||||||||||||||||
Accretion
of discount on preferred stock
|
8,000 | - | - | - | (8,000 | ) | - | |||||||||||||||||||||
Amortization
of issuance costs
|
2,000 | - | - | - | - | 2,000 | ||||||||||||||||||||||
Comprehensive
income:
|
||||||||||||||||||||||||||||
Net
income
|
- | - | - | - | 1,187,000 | - | 1,187,000 | |||||||||||||||||||||
Change
in unrealized holding gains on
|
||||||||||||||||||||||||||||
securities
available for sale arising during
|
||||||||||||||||||||||||||||
the
period (net tax expense of $177,000)
|
- | - | - | - | - | 275,000 | 275,000 | |||||||||||||||||||||
Reclassification
adjustment for gains in
|
||||||||||||||||||||||||||||
net
income (net of taxes of $15,000)
|
- | - | - | - | - | 24,000 | 24,000 | |||||||||||||||||||||
Total
comprehensive income
|
1,486,000 | |||||||||||||||||||||||||||
Balance
-- March 31, 2009
|
$ | 9,692,000 | 5,584,713 | $ | 38,294,000 | $ | (379,000 | ) | $ | 4,951,000 | $ | 1,022,000 | $ | 53,580,000 | ||||||||||||||
See
notes to unaudited consolidated financial statements.
|
Stewardship
Financial Corporation and Subsidiary
|
|||||||
Consolidated
Statements of Comprehensive Income
|
|||||||
(Unaudited)
|
|||||||
Three
Months Ended March 31,
|
||||||||
2010
|
2009 | |||||||
Change
in unrealized holding gains on securities
|
||||||||
available
for sale arising during the period)
|
$ | 872,000 | $ | 530,000 | ||||
Reclassification
adjustment for gains in net income
|
328,000 | 39,000 | ||||||
Net
unrealized gains
|
544,000 | 491,000 | ||||||
Tax
effect
|
207,000 | 192,000 | ||||||
Net
unrealized gains, net of tax amount
|
337,000 | 299,000 | ||||||
Change
in fair value of interest rate swap
|
(175,000 | ) | - | |||||
Tax
effect
|
(70,000 | ) | - | |||||
Change
in fair value of interest rate swap, net of tax amount
|
(105,000 | ) | - | |||||
Total
other comprehensive income
|
$ | 232,000 | $ | 299,000 | ||||
The
following is a summary of the accumulated other comprehensive income
balances, net of tax.
|
||||||||
March
31, 2010
|
December
31, 2009
|
|||||||
Unrealized
gain on securities available for sale
|
$ | 930,000 | $ | 593,000 | ||||
Unrealized
loss on fair value of interest rate swap
|
(260,000 | ) | (155,000 | ) | ||||
Accumulated
other comprehensive income, net
|
$ | 670,000 | $ | 438,000 | ||||
See
notes to unaudited consolidated financial statements.
|
Stewardship
Financial Corporation and Subsidiary
|
||||||||
Consolidated
Statements of Cash Flows
|
||||||||
(Unaudited)
|
||||||||
Three
Months Ended
|
|||||||
March
31,
|
|||||||
2010
|
2009
|
||||||
Cash
flows from operating activities:
|
|||||||
Net
income
|
$ | 871,000 | $ | 1,187,000 | |||
Adjustments
to reconcile net income to
|
|||||||
net
cash provided by operating activities:
|
|||||||
Depreciation
and amortization of premises and equipment
|
214,000 | 210,000 | |||||
Amortization
of premiums and accretion of discounts, net
|
161,000 | 123,000 | |||||
Accretion
of deferred loan fees
|
(14,000 | ) | (56,000 | ) | |||
Provision
for loan losses
|
1,550,000 | 150,000 | |||||
Originations
of mortgage loans held for sale
|
(7,928,000 | ) | (2,948,000 | ) | |||
Proceeds
from sale of mortgage loans
|
5,919,000 | 1,385,000 | |||||
Gain
on sales of mortgage loans
|
(55,000 | ) | (11,000 | ) | |||
Gain
on sales and calls of securities
|
(328,000 | ) | (39,000 | ) | |||
Deferred
income tax benefit
|
(544,000 | ) | (69,000 | ) | |||
Amortization
of intangible assets
|
5,000 | 8,000 | |||||
Nonqualified
stock option expense
|
13,000 | 12,000 | |||||
Amortization
of stock issuance costs
|
- | 2,000 | |||||
Increase
in bank owned life insurance
|
(86,000 | ) | (83,000 | ) | |||
Decrease
in accrued interest receivable
|
122,000 | 37,000 | |||||
(Decrease)
increase in accrued interest payable
|
(193,000 | ) | 165,000 | ||||
Decrease
(increase) in other assets
|
532,000 | (328,000 | ) | ||||
Increase
in other liabilities
|
52,000 | 615,000 | |||||
Net
cash provided by operating activities
|
291,000 | 360,000 | |||||
Cash
flows from investing activities:
|
|||||||
Purchase
of securities available for sale
|
(3,085,000 | ) | (30,248,000 | ) | |||
Proceeds
from maturities and principal repayments on securities available for
sale
|
3,944,000 | 2,730,000 | |||||
Proceeds
from sales and calls on securities available for sale
|
12,557,000 | 11,417,000 | |||||
Purchase
of securities held to maturity
|
(5,566,000 | ) | (24,289,000 | ) | |||
Proceeds
from maturities and principal repayments on securities held to
maturity
|
1,443,000 | 1,018,000 | |||||
Proceeds
from calls on securities held to maturity
|
1,000,000 | 4,250,000 | |||||
Sale
(purchase) of FHLB-NY stock
|
837,000 | (612,000 | ) | ||||
Net
(increase) decrease in loans
|
(1,698,000 | ) | 2,542,000 | ||||
Additions
to premises and equipment
|
(177,000 | ) | (71,000 | ) | |||
Net
cash provided by (used in) investing activities
|
9,255,000 | (33,263,000 | ) | ||||
Cash
flows from financing activities:
|
|||||||
Net
increase (decrease) in noninterest-bearing deposits
|
6,224,000 | (11,723,000 | ) | ||||
Net
increase in interest-bearing deposits
|
6,776,000 | 20,662,000 | |||||
Net
increase in securities sold under agreements to repurchase
|
3,000 | 2,000 | |||||
Net
(decrease) increase in short term borrowings
|
(18,600,000 | ) | 7,600,000 | ||||
Proceeds
from long term borrowings
|
- | 6,000,000 | |||||
Proceeds
from issuance of preferred stock and warrants
|
- | 9,951,000 | |||||
Cash
dividends paid on common stock
|
(526,000 | ) | (527,000 | ) | |||
Cash
dividends paid on preferred stock
|
(125,000 | ) | - | ||||
Payment
of discount on dividend reinvestment plan
|
(9,000 | ) | (11,000 | ) | |||
Purchase
of treasury stock
|
- | (75,000 | ) | ||||
Exercise
of stock options
|
12,000 | 8,000 | |||||
Issuance
of common stock
|
24,000 | 22,000 | |||||
Net
cash (used in) provided by financing activities
|
(6,221,000 | ) | 31,909,000 | ||||
Net
increase (decrease) in cash and cash equivalents
|
3,325,000 | (994,000 | ) | ||||
Cash
and cash equivalents - beginning
|
8,871,000 | 12,814,000 | |||||
Cash
and cash equivalents - ending
|
$ | 12,196,000 | $ | 11,820,000 |
Stewardship
Financial Corporation and Subsidiary
|
||||||||
Consolidated
Statements of Cash Flows (continued)
|
||||||||
(Unaudited)
|
||||||||
Three
Months Ended
|
||||||||
March
31,
|
||||||||
2010
|
2009
|
|||||||
Supplemental
disclosures of cash flow information:
|
||||||||
Cash
paid during the period for interest
|
$ | 2,509,000 | $ | 2,710,000 | ||||
Cash
paid during the period for income taxes
|
$ | - | $ | - | ||||
Noncash
investing activities - security purchases due brokers
|
$ | 3,523,000 | $ | 3,010,000 | ||||
See
notes to unaudited consolidated financial statements.
|
March
31, 2010
|
||||||||||||||||
Amortized
|
Gross
Unrealized
|
Fair
|
||||||||||||||
Cost
|
Gains
|
Losses
|
Value
|
|||||||||||||
U.S.
government-sponsored agencies
|
$ | 31,438,000 | $ | 182,000 | $ | 58,000 | $ | 31,562,000 | ||||||||
Obligations
of state and political
|
||||||||||||||||
subdivisions
|
5,282,000 | 153,000 | 8,000 | 5,427,000 | ||||||||||||
Mortgage-backed
securities - residential
|
52,584,000 | 1,296,000 | 98,000 | 53,782,000 | ||||||||||||
Other
equity investments
|
3,096,000 | 72,000 | 13,000 | 3,155,000 | ||||||||||||
$ | 92,400,000 | $ | 1,703,000 | $ | 177,000 | $ | 93,926,000 | |||||||||
December
31, 2009
|
||||||||||||||||
Amortized
|
Gross
Unrealized
|
Fair
|
||||||||||||||
Cost
|
Gains
|
Losses
|
Value
|
|||||||||||||
U.S.
government-sponsored agencies
|
$ | 32,642,000 | $ | 92,000 | $ | 448,000 | $ | 32,286,000 | ||||||||
Obligations
of state and political
|
||||||||||||||||
subdivisions
|
5,284,000 | 122,000 | 9,000 | 5,397,000 | ||||||||||||
Mortgage-backed
securities - residential
|
61,060,000 | 1,423,000 | 255,000 | 62,228,000 | ||||||||||||
Other
equity investments
|
3,058,000 | 66,000 | 9,000 | 3,115,000 | ||||||||||||
$ | 102,044,000 | $ | 1,703,000 | $ | 721,000 | $ | 103,026,000 |
March
31, 2010
|
||||||||||||||||
Amortized
|
Gross
Unrecognized
|
Fair
|
||||||||||||||
Cost
|
Gains
|
Losses
|
Value
|
|||||||||||||
U.S.
government-sponsored agencies
|
$ | 24,085,000 | $ | 149,000 | $ | 70,000 | $ | 24,164,000 | ||||||||
Obligations
of state and political
|
||||||||||||||||
subdivisions
|
27,299,000 | 1,090,000 | 45,000 | 28,344,000 | ||||||||||||
Mortgage-backed
securities - residential
|
19,374,000 | 733,000 | $ | 4,000 | 20,103,000 | |||||||||||
$ | 70,758,000 | $ | 1,972,000 | $ | 119,000 | $ | 72,611,000 | |||||||||
December
31, 2009
|
||||||||||||||||
Amortized
|
Gross
Unrecognized
|
Fair
|
||||||||||||||
Cost
|
Gains
|
Losses
|
Value
|
|||||||||||||
U.S.
government-sponsored agencies
|
$ | 19,921,000 | $ | 90,000 | $ | 351,000 | $ | 19,660,000 | ||||||||
Obligations
of state and political
|
||||||||||||||||
subdivisions
|
27,038,000 | 871,000 | 84,000 | 27,825,000 | ||||||||||||
Mortgage-backed
securities - residential
|
20,758,000 | 547,000 | 25,000 | 21,280,000 | ||||||||||||
$ | 67,717,000 | $ | 1,508,000 | $ | 460,000 | $ | 68,765,000 |
March
31, 2010
|
||||||||
Amortized
|
Fair
|
|||||||
Cost
|
Value
|
|||||||
Maturity
|
||||||||
Available
for sale
|
||||||||
After
one year, but within five years
|
$ | 6,608,000 | $ | 6,630,000 | ||||
After
five years, but within ten years
|
16,631,000 | 16,782,000 | ||||||
After
ten years
|
13,481,000 | 13,577,000 | ||||||
Mortgage-backed
securities - residential
|
52,584,000 | 53,782,000 | ||||||
Total
|
$ | 89,304,000 | $ | 90,771,000 | ||||
Held
to maturity
|
||||||||
Within
one year
|
$ | 1,352,000 | $ | 1,380,000 | ||||
After
one year, but within five years
|
18,955,000 | 19,378,000 | ||||||
After
five years, but within ten years
|
20,839,000 | 21,312,000 | ||||||
After
ten years
|
10,238,000 | 10,438,000 | ||||||
Mortgage-backed
securities - residential
|
19,374,000 | 20,103,000 | ||||||
Total
|
$ | 70,758,000 | $ | 72,611,000 |
Available
for Sale
|
||||||||||||||||||||||||
March
31, 2010
|
Less
than 12 Months
|
12
Months or Longer
|
Total
|
|||||||||||||||||||||
Fair
|
Unrealized
|
Fair
|
Unrealized
|
Fair
|
Unrealized
|
|||||||||||||||||||
Value
|
Losses
|
Value
|
Losses
|
Value
|
Losses
|
|||||||||||||||||||
U.S.
government-
|
||||||||||||||||||||||||
sponsored
agencies
|
$ | 9,397,000 | $ | (58,000 | ) | $ | - | $ | - | $ | 9,397,000 | $ | (58,000 | ) | ||||||||||
Obligations
of state and
|
||||||||||||||||||||||||
political
subdivisions
|
195,000 | - | 443,000 | (8,000 | ) | 638,000 | (8,000 | ) | ||||||||||||||||
Mortgage-backed
|
||||||||||||||||||||||||
securities
- residential
|
13,145,000 | (98,000 | ) | - | - | 13,145,000 | (98,000 | ) | ||||||||||||||||
Other
equity investments
|
- | - | 62,000 | (13,000 | ) | 62,000 | (13,000 | ) | ||||||||||||||||
Total
temporarily
|
||||||||||||||||||||||||
impaired
securities
|
$ | 22,737,000 | $ | (156,000 | ) | $ | 505,000 | $ | (21,000 | ) | $ | 23,242,000 | $ | (177,000 | ) | |||||||||
December
31, 2009
|
Less
than 12 Months
|
12
Months or Longer
|
Total
|
|||||||||||||||||||||
Fair
|
Unrealized
|
Fair
|
Unrealized
|
Fair
|
Unrealized
|
|||||||||||||||||||
Value
|
Losses
|
Value
|
Losses
|
Value
|
Losses
|
|||||||||||||||||||
U.S.
government-
|
||||||||||||||||||||||||
sponsored
agencies
|
$ | 23,282,000 | $ | (361,000 | ) | $ | 2,913,000 | $ | (87,000 | ) | $ | 26,195,000 | $ | (448,000 | ) | |||||||||
Obligations
of state and
|
||||||||||||||||||||||||
political
subdivisions
|
373,000 | (2,000 | ) | 443,000 | (7,000 | ) | 816,000 | (9,000 | ) | |||||||||||||||
Mortgage-backed
|
||||||||||||||||||||||||
securities
- residential
|
15,156,000 | (255,000 | ) | - | - | 15,156,000 | (255,000 | ) | ||||||||||||||||
Other
equity investments
|
- | - | 33,000 | (9,000 | ) | 33,000 | (9,000 | ) | ||||||||||||||||
Total
temporarily
|
||||||||||||||||||||||||
impaired
securities
|
$ | 38,811,000 | $ | (618,000 | ) | $ | 3,389,000 | $ | (103,000 | ) | $ | 42,200,000 | $ | (721,000 | ) | |||||||||
Held
to Maturity
|
March
31, 2010
|
Less
than 12 Months
|
12
Months or Longer
|
Total
|
|||||||||||||||||||||
Fair
|
Unrecognized
|
Fair
|
Unrecognized
|
Fair
|
Unrecognized
|
|||||||||||||||||||
Value
|
Losses
|
Value
|
Losses
|
Value
|
Losses
|
|||||||||||||||||||
U.S.
government-
|
||||||||||||||||||||||||
sponsored
agencies
|
$ | 6,308,000 | $ | (27,000 | ) | $ | 6,957,000 | $ | (43,000 | ) | $ | 13,265,000 | $ | (70,000 | ) | |||||||||
Obligations
of state and
|
||||||||||||||||||||||||
political
subdivisions
|
1,108,000 | (4,000 | ) | 1,384,000 | (41,000 | ) | 2,492,000 | (45,000 | ) | |||||||||||||||
Mortgage-backed
|
||||||||||||||||||||||||
securities
- residential
|
1,935,000 | (4,000 | ) | - | - | 1,935,000 | (4,000 | ) | ||||||||||||||||
Total
temporarily
|
||||||||||||||||||||||||
impaired
securities
|
$ | 9,351,000 | $ | (35,000 | ) | $ | 8,341,000 | $ | (84,000 | ) | $ | 17,692,000 | $ | (119,000 | ) | |||||||||
December
31, 2009
|
Less
than 12 Months
|
12
Months or Longer
|
Total
|
|||||||||||||||||||||
Fair
|
Unrecognized
|
Fair
|
Unrecognized
|
Fair
|
Unrecognized
|
|||||||||||||||||||
Value
|
Losses
|
Value
|
Losses
|
Value
|
Losses
|
|||||||||||||||||||
U.S.
government-
|
||||||||||||||||||||||||
sponsored
agencies
|
$ | 12,529,000 | $ | (351,000 | ) | $ | - | $ | - | $ | 12,529,000 | $ | (351,000 | ) | ||||||||||
Obligations
of state and
|
||||||||||||||||||||||||
political
subdivisions
|
4,504,000 | (69,000 | ) | 401,000 | (15,000 | ) | 4,905,000 | (84,000 | ) | |||||||||||||||
Mortgage-backed
|
||||||||||||||||||||||||
securities
- residential
|
1,949,000 | (25,000 | ) | - | - | 1,949,000 | (25,000 | ) | ||||||||||||||||
Total
temporarily
|
||||||||||||||||||||||||
impaired
securities
|
$ | 18,982,000 | $ | (445,000 | ) | $ | 401,000 | $ | (15,000 | ) | $ | 19,383,000 | $ | (460,000 | ) | |||||||||
March
31,
|
December
31,
|
||||||||
2010
|
2009
|
||||||||
Mortgage
|
|
||||||||
Residential
|
$ | 34,904,000 | $ | 36,246,000 | |||||
Commercial
|
250,819,000 | 246,212,000 | |||||||
Commercial
|
115,646,000 | 114,893,000 | |||||||
Home
Equity
|
21,300,000 | 21,779,000 | |||||||
Installment
|
38,897,000 | 41,006,000 | |||||||
Other
|
311,000 | 340,000 | |||||||
Total
loans
|
461,877,000 | 460,476,000 | |||||||
Less: Deferred loan fees | 422,000 | 437,000 | |||||||
Allowance
for loan losses
|
8,174,000 | 6,920,000 | |||||||
8,596,000 | 7,357,000 | ||||||||
Loans,
net
|
$ | 453,281,000 | $ | 453,119,000 |
Three
Months Ended March 31,
|
||||||||
2010
|
2009
|
|||||||
Balance,
beginning of period
|
$ | 6,920,000 | $ | 5,166,000 | ||||
Provision
charged to operations
|
1,550,000 | 150,000 | ||||||
Recoveries
of loans charged off
|
73,000 | 87,000 | ||||||
Loans
charged off
|
(369,000 | ) | (79,000 | ) | ||||
Balance,
end of period
|
$ | 8,174,000 | $ | 5,324,000 |
March
31,
|
December
31,
|
|||||||
2010
|
2009
|
|||||||
Nonaccrual
loans
|
$ | 19,525,000 | $ | 19,656,000 | ||||
Loans
past due 90 days or more and accruing
|
- | 415,000 | ||||||
Restructured
loans
|
2,775,000 | 2,846,000 | ||||||
Total
nonperfoming loans
|
$ | 22,300,000 | $ | 22,917,000 |
March
31,
|
December
31,
|
|||||||
2010
|
2009
|
|||||||
Impaired
loans
|
||||||||
With
related allowance for loan losses
|
$ | 15,453,000 | $ | 8,668,000 | ||||
Without
related allowance for loan losses
|
6,847,000 | 13,834,000 | ||||||
Total
impaired loans
|
$ | 22,300,000 | $ | 22,502,000 | ||||
Related
allowance for loan losses
|
$ | 2,876,000 | $ | 1,903,000 |
Notional
amount
|
$
7,000,000
|
|
Pay
rate
|
7.00%
|
|
Receive
rate
|
3
month LIBOR plus 2.95%
|
|
Maturity
|
March
17, 2016
|
|
Unrealized
loss
|
$432,000
|
|
Amount
of Loss, Net of Taxes,
|
||||||||
Recognized
in OCI on Derivative
|
||||||||
Cash Flow Hedging
Relationship
|
(Effective
Portion)
|
|||||||
For
the three months ended March 31,
|
||||||||
2010
|
2009
|
|||||||
Cash
flow hedge
|
$ | 105,000 | $ | - | ||||
Fair
Value Measurements Using:
|
||||||||||||||||
Quoted
Prices in
|
Significant
|
|||||||||||||||
Active
Markets
|
Other
|
Significant
|
||||||||||||||
for
Identical
|
Observable
|
Unobservable
|
||||||||||||||
Carrying
|
Assets
|
Inputs
|
Inputs
|
|||||||||||||
Value
|
(Level
1)
|
(Level
2)
|
(Level
3)
|
|||||||||||||
At
March 31, 2010
|
||||||||||||||||
Assets:
|
||||||||||||||||
Available
for sale securities
|
||||||||||||||||
U.S.
government -
|
||||||||||||||||
sponsered
agencies
|
$ | 31,562,000 | $ | - | $ | 31,562,000 | $ | - | ||||||||
Obligations
of state and
|
||||||||||||||||
political
subdivisions
|
5,427,000 | - | 5,427,000 | - | ||||||||||||
Mortgage-backed
|
||||||||||||||||
securities
- residential
|
53,782,000 | - | 53,782,000 | - | ||||||||||||
Other
equity investments
|
3,155,000 | - | 3,155,000 | - | ||||||||||||
Total
available for
|
||||||||||||||||
sale
securities
|
$ | 93,926,000 | $ | - | $ | 93,926,000 | $ | - | ||||||||
Liabilities:
|
||||||||||||||||
Interest
rate swap
|
$ | 432,000 | $ | - | $ | 432,000 | $ | - | ||||||||
At
December 31, 2009
|
||||||||||||||||
Assets:
|
||||||||||||||||
Available
for sale securities
|
||||||||||||||||
U.S.
government -
|
||||||||||||||||
sponsered
agencies
|
$ | 32,286,000 | $ | - | $ | 32,286,000 | $ | - | ||||||||
Obligations
of state and
|
||||||||||||||||
political
subdivisions
|
5,397,000 | - | 5,397,000 | - | ||||||||||||
Mortgage-backed
|
||||||||||||||||
securities
- residential
|
62,228,000 | - | 62,228,000 | - | ||||||||||||
Other
equity investments
|
3,115,000 | - | 3,115,000 | - | ||||||||||||
Total
available for
|
||||||||||||||||
sale
securities
|
$ | 103,026,000 | $ | - | $ | 103,026,000 | $ | - | ||||||||
Liabilities:
|
||||||||||||||||
Interest
rate swap
|
$ | 258,000 | $ | - | $ | 258,000 | $ | - |
Fair
Vaule Measurements Using:
|
||||||||||||||||
Quoted
Prices
|
Significant
|
|||||||||||||||
in
Active
|
Other
|
Significant
|
||||||||||||||
Markets
for
|
Observabel
|
Unobservable
|
||||||||||||||
Carrying
|
Identical
Assets
|
Inputs
|
Inputs
|
|||||||||||||
Value
|
(Level
1)
|
(Level
2)
|
(Level
3)
|
|||||||||||||
At
March 31, 2010
|
||||||||||||||||
Assets:
|
||||||||||||||||
Impaired
loans
|
$ | 12,577,000 | $ | - | $ | - | $ | 12,577,000 | ||||||||
At
December 31, 2009
|
||||||||||||||||
Assets:
|
||||||||||||||||
Impaired
loans
|
$ | 6,765,000 | $ | - | $ | - | $ | 6,765,000 |
March
31, 2010
|
December
31, 2009
|
|||||||||||||||
Carrying
|
Estimated
|
Carrying
|
Estimated
|
|||||||||||||
Amount
|
Fair
Value
|
Amount
|
Fair
Value
|
|||||||||||||
(Dollars
in thousands)
|
||||||||||||||||
Financial
assets:
|
||||||||||||||||
Cash
and cash equivalents
|
$ | 12,196,000 | $ | 12,196,000 | $ | 8,871,000 | $ | 8,871,000 | ||||||||
Securities
available for sales
|
93,926,000 | 93,926,000 | 103,026,000 | 103,026,000 | ||||||||||||
Securities
held to maturity
|
70,758,000 | 72,611,000 | 67,717,000 | 68,765,000 | ||||||||||||
FHLB-NY
stock
|
2,390,000 | N/A | 3,227,000 | N/A | ||||||||||||
Net
loans
|
453,281,000 | 454,147,000 | 453,119,000 | 453,813,000 | ||||||||||||
Accrued
interest receivable
|
3,045,000 | 3,045,000 | 3,167,000 | 3,167,000 | ||||||||||||
Financial
liabilities:
|
||||||||||||||||
Deposits
|
542,930,000 | 543,796,000 | 529,930,000 | 531,230,000 | ||||||||||||
FHLB-NY
Advances
|
36,000,000 | 33,799,000 | 54,600,000 | 51,949,000 | ||||||||||||
Securities
sold under agreements
|
||||||||||||||||
to
repurchase
|
15,399,000 | 15,399,000 | 15,396,000 | 15,396,000 | ||||||||||||
Subordinated
debenture
|
7,217,000 | 6,529,000 | 7,217,000 | 5,943,000 | ||||||||||||
Accrued
interest payable
|
1,000,000 | 1,000,000 | 1,193,000 | 1,193,000 |
Three
Months Ended
|
||||||||
March
31,
|
||||||||
2010
|
2009
|
|||||||
(in
thousands, except per share data)
|
||||||||
Net
income
|
$ | 871 | $ | 1,187 | ||||
Dividends
on preferred stock and accretion
|
137 | 92 | ||||||
Net
income available to common stockholders
|
$ | 734 | $ | 1,095 | ||||
Weighted
average shares
|
5,840 | 5,829 | ||||||
Effect
of dilutive stock options
|
2 | 6 | ||||||
Total
weighted average dilutive shares
|
5,842 | 5,835 | ||||||
Basic
earnings per common share
|
$ | 0.13 | $ | 0.19 | ||||
Diluted
earnings per common share
|
$ | 0.13 | $ | 0.19 |
Analysis
of Net Interest Income (Unaudited)
|
||||||||||||||||||||||||
For
the Three Months Ended March 31,
|
||||||||||||||||||||||||
2010
|
2009
|
|||||||||||||||||||||||
Average
|
Average
|
|||||||||||||||||||||||
Interest
|
Rates
|
Interest
|
Rates
|
|||||||||||||||||||||
Average
|
Income/
|
Earned/
|
Average
|
Income/
|
Earned/
|
|||||||||||||||||||
Balance
|
Expense
|
Paid
|
Balance
|
Expense
|
Paid
|
|||||||||||||||||||
(Dollars
in thousands)
|
||||||||||||||||||||||||
Assets
|
||||||||||||||||||||||||
Interest-earning
assets:
|
||||||||||||||||||||||||
Loans
(1) (2)
|
$ | 462,022 | $ | 6,886 | 6.04 | % | $ | 436,926 | $ | 6,619 | 6.14 | % | ||||||||||||
Taxable
investment securities (1)
|
133,319 | 1,339 | 4.07 | 134,749 | 1,597 | 4.81 | ||||||||||||||||||
Tax-exempt
investment securities (1) (2)
|
32,307 | 412 | 5.17 | 28,938 | 390 | 5.47 | ||||||||||||||||||
Other
interest-earning assets
|
120 | 2 | 6.76 | 84 | 3 | 9.66 | ||||||||||||||||||
Total
interest-earning assets
|
627,768 | 8,639 | 5.58 | 600,697 | 8,609 | 5.81 | ||||||||||||||||||
Non-interest-earning
assets:
|
||||||||||||||||||||||||
Allowance
for loan losses
|
(7,310 | ) | (5,214 | ) | ||||||||||||||||||||
Other
assets
|
37,608 | 35,413 | ||||||||||||||||||||||
Total
assets
|
$ | 658,066 | $ | 630,896 | ||||||||||||||||||||
Liabilities
and Stockholders' Equity
|
||||||||||||||||||||||||
Interest-bearing
liabilities:
|
||||||||||||||||||||||||
Interest-bearing
demand deposits
|
$ | 222,691 | $ | 769 | 1.40 | % | $ | 167,280 | $ | 517 | 1.25 | % | ||||||||||||
Savings
deposits
|
47,299 | 50 | 0.42 | 40,377 | 58 | 0.58 | ||||||||||||||||||
Time
deposits
|
171,333 | 1,001 | 2.37 | 211,891 | 1,797 | 3.44 | ||||||||||||||||||
Repurchase
agreements
|
15,398 | 182 | 4.79 | 15,162 | 189 | 5.06 | ||||||||||||||||||
FHLB
borrowing
|
45,817 | 246 | 2.18 | 46,139 | 230 | 2.02 | ||||||||||||||||||
Subordinated
debenture
|
7,217 | 68 | 3.82 | 7,217 | 84 | 4.72 | ||||||||||||||||||
Total
interest-bearing liabilities
|
509,755 | 2,316 | 1.84 | 488,066 | 2,875 | 2.39 | ||||||||||||||||||
Non-interest-bearing
liabilities:
|
||||||||||||||||||||||||
Demand
deposits
|
89,993 | 88,792 | ||||||||||||||||||||||
Other
liabilities
|
3,993 | 4,562 | ||||||||||||||||||||||
Stockholders'
equity
|
54,325 | 49,476 | ||||||||||||||||||||||
Total
liabilities and stockholders' equity
|
$ | 658,066 | $ | 630,896 | ||||||||||||||||||||
Net
interest income (taxable equivalent basis)
|
6,323 | 5,734 | ||||||||||||||||||||||
Tax
Equivalent adjustment
|
(144 | ) | (136 | ) | ||||||||||||||||||||
Net
interest income
|
$ | 6,179 | $ | 5,598 | ||||||||||||||||||||
Net
interest spread (taxable equivalent basis)
|
3.74 | % | 3.42 | % | ||||||||||||||||||||
Net
yield on interest-earning
|
||||||||||||||||||||||||
assets
(taxable equivalent basis) (3)
|
4.08 | % | 3.87 | % | ||||||||||||||||||||
(1) For
purpose of these calculations, nonaccruing loans are included in the
average balance. Loans and
|
|||||||||||||||||
total
interest-earning assets are net of unearned income. Securities
are included at amortized cost.
|
|||||||||||||||||
(2) The
tax equivalent adjustments are based on a marginal tax rate of
34%.
|
|||||||||||||||||
(3) Net
interest income (taxable equivalent basis) divided by average
interest-earning assets.
|
March
31,
|
December
31,
|
September
30,
|
June
30,
|
|||||||||||||
2010
|
2009
|
2009
|
2009
|
|||||||||||||
Nonaccrual
loans (1)
|
$ | 19,525 | $ | 19,656 | $ | 14,536 | $ | 11,533 | ||||||||
Loans
past due 90 days or more and accruing (2)
|
- | 415 | 728 | - | ||||||||||||
Total
nonperforming loans
|
19,525 | 20,071 | 15,264 | 11,533 | ||||||||||||
Restructured
loans
|
2,775 | 2,846 | 2,417 | 2,460 | ||||||||||||
Total
nonperforming loans
|
$ | 22,300 | $ | 22,917 | $ | 17,681 | $ | 13,993 | ||||||||
Allowance
for loan losses
|
$ | 8,174 | $ | 6,920 | $ | 7,249 | $ | 6,342 | ||||||||
Nonperforming
loans to total gross loans
|
4.83 | % | 4.98 | % | 3.92 | % | 3.18 | % | ||||||||
Nonperforming
loans to total assets
|
3.37 | % | 3.45 | % | 2.72 | % | 2.19 | % | ||||||||
Allowance
for loan losses to total gross loans
|
1.77 | % | 1.50 | % | 1.61 | % | 1.44 | % | ||||||||
Allowance
for loan losses to
|
||||||||||||||||
nonperforming
loans
|
36.65 | % | 30.20 | % | 41.00 | % | 45.32 | % |
Required
|
Actual
|
Excess
|
||||||||||
Leverage
Ratio
|
4.00 | % | 9.17 | % | 5.17 | % | ||||||
Risk-based
Capital
|
||||||||||||
Tier
1
|
4.00 | % | 12.03 | % | 8.03 | % | ||||||
Total
|
8.00 | % | 13.28 | % | 5.28 | % |
|
(a)
|
Evaluation
of internal controls and procedures
|
|
(b)
|
Management’s
Report on Internal Control over Financial
Reporting
|
|
(c)
|
Changes
in Internal Controls over Financial
Reporting
|
Stewardship
Financial Corporation
|
||
Date: May
14, 2010
|
By:
|
/s/
Paul Van Ostenbridge
|
Paul
Van Ostenbridge
|
||
President
and Chief Executive Officer
|
||
(Principal
Executive Officer)
|
||
Date: May
14, 2010
|
By:
|
/s/
Claire M. Chadwick
|
Claire
M. Chadwick
|
||
Senior
Vice President and Chief Financial Officer
|
||
(Principal
Financial and Accounting Officer)
|
Exhibit
Number
|
Description
of Exhibits
|
|
31.1
|
Certification
of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002
|
|
31.2
|
Certification
of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002
|
|
32.1
|
Certification
of Chief Executive Officer and Chief Financial Officer pursuant to Section
906 of the Sarbanes-Oxley Act of
2002
|