First Central Savings Bank Reports Fourth Quarter 2023 Net Income of $1.3 million ($0.12 EPS), Full Year 2023 Net Income of $7.1 million ($0.67 EPS), Strong Asset Quality, and Special Cash Dividend of $0.10 per share
*Performance Highlights*· *Net Income and Cash Earnings:* Net income for the quarter ended December 31, 2023, was $1.3 million or $0.12 per share, compared to $2.1 million or $0.20 per share recorded in the prior year quarter ended December 31, 2022. Cash earnings for the quarter ended December 31, 2023, were $1.5 million, or $0.14 per share, a decrease of $898 thousand, or 36.9%, from $2.4 million, or $0.23 per share, for the prior year quarter. Net income of $7.1 million for the twelve months ended December 31, 2023, or $0.67 per share, compared to $9.2 million or $0.87 per share recorded in the prior year twelve months ended December 31, 2022, representing a 22.7% decrease in net income year-over-year.
· *Financial Performance Metrics:* Return on average assets and average stockholders’ equity were 0.52% and 6.07%, respectively, for the quarter ended December 31, 2023, compared to 0.97% and 11.21%, respectively, for the prior year quarter and 0.89% and 10.40% compared to the prior quarter.
· *Balance Sheet Growth:* Assets totaled $963.5 million at December 31, 2023, up $59.6 million, or 6.6%, from December 31, 2022, primarily due to loan growth.
· *Regulatory Capital: *The Bank’s Tier 1 capital ratio was 9.23% and the Total Risk based capital ratio was 14.44% at December 31, 2023, each above the regulatory minimum for a well-capitalized institution.
· *Loan Growth: *At December 31, 2023, total loans outstanding were $835.4 million representing 86.7% of total assets, up $88.3 million, or 11.8%, from December 31, 2022.
· *Net Interest Income: *The Bank recorded net interest income of $6.8 million for the quarter ended December 31, 2023, a decrease of $1.4 million, or 17.4%, from the quarter ended December 31, 2022.
· *Strong Asset Quality:* At December 31, 2023, the Bank’s asset quality was strong with 0.53% non-performing loans to total loans.
· *Net Interest Margin and Spread: *The Bank’s net interest margin and spread for the current quarter was 2.90% and 2.14%, respectively.
· *Special Cash Dividend: *The Bank declared a special cash dividend of $0.10 per share to the Bank’s shareholders.
GLEN COVE, N.Y., Jan. 31, 2024 (GLOBE NEWSWIRE) -- Joseph Pistilli, Chairman of the Board, of First Central Savings Bank (“FCSB”, “the Bank”) today reported significant performance achievements for the quarter and year ended December 31, 2023.
*Cash and GAAP Basis Earnings*
The Bank’s cash earnings were $1.5 million, or $0.14 per share, for the quarter ended December 31, 2023, which represents a decrease of $898 thousand, or 36.9% from the quarter ended December 31, 2022. On a GAAP basis, net income for the quarter ended December 31, 2023, was $1.3 million, or $0.12 per share, compared with net income of $2.1 million, or $0.20 per share, for the quarter ended December 31, 2022. Joseph Pistilli, Chairman of the Board noted, “In the fourth quarter of 2023, First Central continued to build shareholder value by generating positive earnings despite a rising interest rate environment. We continue to enhance shareholder value with an increase in our book value from $7.27 per share at December 31, 2022, to $7.88 at December 31, 2023, an increase of $0.61 or 8.4%.
“It is with great pleasure, on behalf of the Board of Directors, for me to announce the issuance of a special cash dividend of $0.10 per share. The dividend is payable January 19, 2024, to stockholders of record as of December 20, 2023. As we welcome 2024, First Central Savings Bank has much to be excited about and our future looks bright. Our achievements were accomplished by the dedication of our employees, our executives and our Board of Directors who believed that a strong and successful financial institution can only survive and thrive when there is a strong corporate mind set supported by consistent and sound banking strategies. I am extremely proud of the management team and Board of Directors that we have assembled and the expertise they bring in growing the franchise value for our shareholders.”
Paul Hagan, President and Chief Operating Officer, reflected on the Bank’s results, “Management continues to execute its growth strategy that enhances equity to support loan growth. During the quarter ended December 31, 2023, we continued to see an increase in interest rates that put pressure on our net interest margin and spread. Despite the pressure on net interest income, we have continued to maintain our loan sale income throughout the year to offset the decline in the net interest spread and margin. Despite this challenge, we have been able to achieve significant net income in a very challenging year. We expect calendar year 2024 to continue to be challenging but with the potential for no further Federal Reserve rate hikes, we believe our net interest margin and spread will improve once the rate hikes from the Federal Reserve abate and begin to decline. Management remains committed to managing non-interest expenses and non-interest income to maintain earnings during the current rising interest rate environment and a very competitive deposit rate market.”
*Balance Sheet *
On a year-over-year basis, total assets grew by $59.6 million, or 6.6%, driven by the Bank’s loan originations offset by non-conforming loan sales. Total assets for the quarter ended December 31, 2023, increased by $9.9 million to $963.5 million as the bank continued to originate commercial and non-conforming loans while continuing to sell a portion of the non-conforming loans to the secondary market. As of December 31, 2023, the Bank has been able to generate a non-conforming loan pipeline of $42.5 million and commercial loan pipeline of $22.6 million with weighted average interest rates of 8.30% and 7.97%, respectively.
On a year-over-year basis, total deposits grew by $22.1 million, or 2.8%, as the Bank continues to grow deposits through its retail branches. The Bank has also been successful in maintaining the non-interest-bearing deposits through non-conforming loan originations and the retail branches. As of December 31, 2023, total non-interest-bearing deposits were $105.2 million or 12.9% of total deposits. In addition to deposit growth, the Bank has used short-term borrowings from FHLB-NY and FRB to fund growth. Total borrowings for the quarter ended December 31, 2023, were $45.0 million.
The Bank’s overall average cost of funds was 3.28% for the quarter ended December 31, 2023, an increase of 28 basis points from 3.00% from the prior linked quarter. Despite the increase in the current quarter, the increase in the cost of funds slowed compared to the increase of 39 basis points in the third quarter of 2023. The current interest rate environment continues negatively impact the Bank’s cost of funds in the short term, however, management continues to be pro-active in securing certificates of deposit in the current interest rate environment to better position the interest-rate-risk profile of the Bank in anticipation of rate reductions in the months to come. Management believes this strategy will better protect and enhance future earnings when rates begin to decline, and our deposits reprice downward in the latter stages of 2024.
*Loan Portfolio and Asset Quality*
For the twelve-month period ended December 31, 2023, the Bank’s loan portfolio grew by $88.3 million, or 11.8%, with the growth concentrated primarily in non-conforming residential loans. Management continues to employ a strategy of concentrating its loan growth in these products, which provides the Bank with traditionally safe credit quality at acceptable credit spreads, greater liquidity and an enhanced interest-rate-risk profile. Over the past twelve months, originations of the non-conforming product amounted to $232.0 million. At December 31, 2023, the entire non-conforming loan portfolio amounted to $454.3 million, with an average loan balance of $585 thousand and a weighted average loan-to-value ratio of 62.5%.
As a result of the Bank’s robust non-conforming loan generation capabilities, the Bank had been able to generate additional income by strategically originating and selling its non-conforming loans to other financial institutions at premiums. The Bank expects that it will continue to originate, in the near term, for its own portfolio and, in the long term, for others, which will result in a continued increase in interest income while also realizing gains on sale of loans. For the twelve months ended December 31, 2023, the Bank earned $3.7 million in premiums on loans sold net of FASB 91 fees and costs.
The Bank’s asset quality ratios remained strong. At December 31, 2023, the loan portfolio had non-performing loans of $4.4 million or 0.53% of total loans and 0.46% of total assets. The total allowance for loan losses at December 31, 2023, was $8.3 million, or 1.01% of total loans.
*About First Central Savings Bank*
With assets of $963.5 million at December 31, 2023, First Central Savings Bank is a locally owned and operated community savings bank, focusing on highly personalized and efficient services and products responsive to local needs. Management and the Board of Directors are comprised of a select group of successful local businessmen who are committed to the success of the Bank by knowing and understanding the metro-New York area’s financial needs and opportunities. Backed by state-of-the-art technology, First Central offers a full range of modern financial services. First Central employs a complete suite of consumer and commercial banking products and services, including multi-family and commercial mortgages, ADC and bridge loans, residential loans, middle market business loans and lines of credit. First Central also offers customers 24-hour ATM service with no fees attached, free checking with interest, mobile banking, the most advanced technologies in internet banking for our consumer and business customers, safe deposit boxes and much more. The Bank continues to roll out mobile banking software products as well as our “Zelle” money transfer product to our customers. First Central Savings Bank maintains its corporate office in Glen Cove, New York with an additional six branches throughout Queens New York, one branch in Nassau County, New York, and one branch in Suffolk County, New York.
First Central Savings Bank is a member of the Federal Deposit Insurance Corporation and is an Equal Housing/Equal Opportunity Lender. For further information, call 516-399-6010 or visit the Bank’s state-of-the-art website at *www.myfcsb.com**. *
*Forward-Looking Statements *
This release may contain certain "forward looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, and may be identified by the use of such words as "may," "believe," "expect," "anticipate," "should," "plan," "estimate," "predict," "continue," and "potential" or the negative of these terms or other comparable terminology. Examples of forward-looking statements include, but are not limited to, estimates with respect to the financial condition, results of operations and business of First Central Savings Bank. Any or all of the forward-looking statements in this release and in any other public statements made by First Central Savings Bank may turn out to be incorrect. They can be affected by inaccurate assumptions First Central Savings Bank might make or by known or unknown risks and uncertainties. Consequently, no forward-looking statement can be guaranteed. First Central Savings Bank does not intend to update any of the forward-looking statements after the date of this release or to conform these statements to actual events.
*First Central Savings Bank *
*Statements of Condition - (unaudited)*
*(dollars in thousands)* *12/31/2023* *9/30/2023* *12/31/2022*
*Assets*
Cash and cash equivalents $ 50,955 $ 55,156 $ 73,851
Certificates of deposit 2,000 1,000 2,500
Investments Available for Sale 43,057 41,978 45,319
Investments Held to Maturity 1,000 2,008 2,008
Loans held for sale 8,126 9,648 3,052
Loans receivable 827,278 812,826 744,084
Less: allowance for loan losses (8,347 ) (8,193 ) (7,626 )
Loans, net 818,931 804,633 736,458
Other assets 39,466 39,194 40,808
* Total Assets* $ 963,535 $ 953,617 $ 903,996
*Liabilities and Shareholders Equity*
Total Deposits $ 816,285 $ 832,629 $ 794,180
FHLB Advances 45,000 20,000 15,000
Other Liabilities 18,318 19,262 17,415
* Total Liabilities* 879,603 871,891 826,595
Total Shareholders' Equity 83,932 81,726 77,401
* Total Liabilities and Shareholders' Equity* $ 963,535 $ 953,617 $ 903,996
*First Central Savings Bank *
*Statements of Income - (unaudited)*
*(dollars in thousands, except per share data)* *12 Months* *12 Months* *Quarter Ended* *Quarter Ended* *Ended* *Ended* *12/31/2023* *12/31/2022* *12/31/2023* *12/31/2022*
Total Interest income $ 13,767 $ 11,539 $ 53,465 $ 39,481
Total interest expense 6,991 3,334 23,466 7,383
* Net interest income* 6,776 8,205 29,999 32,098
Provision for credit losses 25 50 402 2,564
* Net interest income after provision for credit losses* 6,751 8,155 29,597 29,534
Net gain on loans sold 1,023 882 3,738 4,407
Net gain on sale of securities 109 - 109 -
Other non-interest income 270 225 1,253 1,042
* Total non-interest income* 1,402 1,107 5,100 5,449
Compensation and benefits 3,882 3,758 14,108 12,830
Occupancy and Equipment 894 1,053 3,811 3,687
Data processing 416 375 1,658 1,587
Federal insurance premium 139 150 672 470
Professional fees 301 342 1,711 1,423
Other 950 887 3,755 3,340
* Total non-interest expense* 6,582 6,565 25,715 23,337
* Income before income taxes* 1,571 2,697 8,982 11,646
Income tax expense 318 560 1,847 2,416
* Net income * $ 1,253 $ 2,137 $ 7,135 $ 9,230
Basic Earnings per Share-GAAP basis $ 0.12 $ 0.20 $ 0.67 $ 0.87
Diluted Earnings per Share-GAAP basis $ 0.12 $ 0.20 $ 0.67 $ 0.87
*Supplementary Information:*
Net Income $ 1,253 $ 2,137 $ 7,135 $ 9,230
*Add Back non-cash charges*
Provision for credit losses 25 50 402 2,564
Depreciation expense 258 247 1,027 786
Provision for federal income taxes - - - 974
* Cash Net income* $ 1,536 $ 2,434 $ 8,564 $ 13,554
Basic Earnings per Share-GAAP basis $ 0.14 $ 0.23 $ 0.80 $ 1.27
Diluted Earnings per Share-GAAP basis $ 0.14 $ 0.23 $ 0.80 $ 1.27
*First Central Savings Bank *
*Statements of Income - (unaudited)*
*(dollars in thousands, except per share data)* *Quarter Ended* *Quarter Ended* *Quarter Ended* *Quarter Ended* *12/31/2023* *9/30/2023* *6/30/2023* *3/31/2023*
Total Interest income $ 13,767 $ 13,789 $ 13,547 $ 12,362
Total interest expense 6,991 6,427 5,572 4,476
* Net interest income* 6,776 7,362 7,975 7,886
Provision (recovery) for credit losses 25 (173 ) 215 335
* Net interest income after provision (recovery) for credit losses* 6,751 7,535 7,760 7,551
Net gain on loans sold 1,023 1,372 883 460
Net gain on sale of securities 109 - - -
Other non-interest income 270 379 326 278
* Total non-interest income* 1,402 1,751 1,209 738
Compensation and benefits 3,882 3,659 3,323 3,244
Occupancy and Equipment 894 943 967 1,007
Data processing 416 401 458 383
Federal insurance premium 139 198 175 160
Professional fees 301 314 689 407
Other 950 1,080 892 833
* Total non-interest expense* 6,582 6,595 6,504 6,034
* Income before income taxes* 1,571 2,691 2,465 2,255
Income tax expense 318 556 509 464
* Net income* $ 1,253 $ 2,135 $ 1,956 $ 1,791
Basic Earnings per Share-GAAP basis $ 0.12 $ 0.20 $ 0.18 $ 0.17
Diluted Earnings per Share-GAAP basis $ 0.12 $ 0.20 $ 0.18 $ 0.17
*Supplementary Information:*
Net Income $ 1,253 $ 2,135 $ 1,956 $ 1,791
*Add Back non-cash charges*
Provision (recovery) for credit losses 25 (173 ) 215 335
Depreciation expense 258 258 254 257
Provision for federal income taxes - - - -
* Cash Net income* $ 1,536 $ 2,220 $ 2,425 $ 2,383
Basic Earnings per Share-GAAP basis $ 0.14 $ 0.21 $ 0.23 $ 0.22
Diluted Earnings per Share-GAAP basis $ 0.14 $ 0.21 $ 0.23 $ 0.22
*First Central Savings Bank *
*Selected Financial Data - (unaudited)*
*(dollars in thousands, except per share data)* *Quarter Ended* *Quarter Ended* *Quarter Ended* *Quarter Ended* *12/31/2023* *9/30/2023* *6/30/2023* *12/31/2022*
*Asset Quality:* Allowance for Loan Losses (1) $ 8,347 $ 8,193 $ 8,364 $ 7,626 Allowance for Loan Losses to Total Loans (1) 1.01 % 1.01 % 1.01 % 1.02 % Non-Performing Loans $ 4,385 $ 4,162 $ 3,764 $ 3,134 Non-Performing Loans/Total Loans 0.53 % 0.51 % 0.45 % 0.42 % Non-Performing Loans/Total Assets 0.46 % 0.44 % 0.39 % 0.35 % Allowance for Loan Losses/Non-Performing Loans 190.35 % 196.85 % 222.21 % 243.33 %
*Capital: (dollars in thousands)* Tier 1 Capital $ 88,236 $ 88,047 $ 85,913 $ 81,651 Tier 1 Leverage Ratio 9.23 % 9.20 % 8.94 % 9.24 % Common Equity Tier 1 Capital Ratio 13.19 % 13.14 % 12.49 % 12.96 % Tier 1 Risk Based Capital Ratio 13.19 % 13.14 % 12.49 % 12.96 % Total Risk Based Capital Ratio 14.44 % 14.39 % 13.73 % 14.20 %
*Equity Data* Common shares outstanding 10,648,345 10,648,345 10,648,345 10,648,345 Stockholders' equity $ 83,932 $ 81,726 $ 80,603 $ 77,401 Book value per common share 7.88 7.67 7.57 7.27 Tangible common equity 83,932 81,726 80,603 77,401 Tangible book value per common share 7.88 7.67 7.57 7.27
(1) Calculation excludes loans held for sale
*First Central Savings Bank *
*Selected Financial Data - (unaudited)*
*(dollars in thousands)* *Quarter Ended* *Quarter Ended* *Quarter Ended* *Quarter Ended* *12/31/2023* *9/30/2023* *6/30/2023* *12/31/2022*
*Other: (in thousands)* Average Interest-Earning Assets 928,162 927,745 932,224 853,239 Average Interest-Bearing Liabilities 740,574 735,245 726,680 672,168 Average Deposits and Borrowings 846,091 849,379 856,450 781,237
*Profitability:* Return on Average Assets 0.52 % 0.89 % 0.82 % 0.97 % Return on Average Equity 6.07 % 10.40 % 9.82 % 11.21 % Yield on Average Interest Earning Assets 5.88 % 5.90 % 5.83 % 5.37 % Cost of Average Interest Bearing Liabilities 3.75 % 3.47 % 3.08 % 1.97 % Cost of Funds 3.28 % 3.00 % 2.61 % 1.69 % Net Interest Rate Spread (1) 2.14 % 2.43 % 2.75 % 3.40 % Net Interest Margin (2) 2.90 % 3.15 % 3.43 % 3.82 % Non-Interest Expense to Average Assets 2.77 % 2.68 % 2.73 % 2.97 % Efficiency Ratio 82.02 % 70.48 % 70.82 % 70.50 %
(1) Net interest rate spread represents the difference between the average yield on average interest-earning assets and the average cost of average interest-bearing liabilities
(2) Net interest margin represents net interest income divided by average interest earning assets
CONTACT: Investor and Press Contact:
Joseph Pistilli Chairman of the Board
Ray Ciccone, E.V.P. & Chief Financial Officer
Paul Hagan, President & Chief Operating Officer
516-399-6071