Malvern Bancorp, Inc. Announces Results for the First Quarter of Fiscal 2013

Wed Feb 6, 2013 8:20am EST

* Reuters is not responsible for the content in this press release.

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PAOLI, Pa., Feb. 6, 2013 (GLOBE NEWSWIRE) -- Malvern Bancorp, Inc. (the "Company") (Nasdaq:MLVF),
the holding company for Malvern Federal Savings Bank (the "Bank"), today announced net income for
the three months ended December 31, 2012 of $671,000 compared to a net income of $1.3 million for
the three months ended December 31, 2011. On a per share basis, the Company is reporting net
income of $0.11 per share for the quarter ended December 31, 2012, compared to a net income of
$0.20 per share (as adjusted for our "second-step" conversion) for the quarter ended December 31,
2011.

The Company's net interest income for the three months ended December 31, 2012 was $4.0 million, a
decrease of $582,000 compared to the three month period ended December 31, 2011. The Company's net
interest rate spread of 2.23% and net interest margin of 2.44% for the three months ended December
31, 2012 decreased when compared to a net interest rate spread of 2.80% and a net interest margin
of 2.92% for the first quarter of fiscal 2012.

The Company's interest and dividend income decreased for the three months ended December 31, 2012
by $922,000 or 13.4% over the comparable fiscal 2012 period to $6.0 million. Interest income on
loans decreased in the three months ended December 31, 2012 over the prior comparable period in
fiscal 2012 by $894,000, or 13.9%. The decrease in interest earned on loans in the first quarter
of fiscal 2013 was due primarily to a $35.8 million, or 7.2%, decrease in the average balance of
our outstanding loans as well as a 38 basis point decrease in the average yield earned on our loan
portfolio in the first quarter of fiscal 2013 compared to the first quarter of fiscal 2012.
Interest income on investment securities decreased by $55,000, or 12.6%, in the first quarter of
fiscal 2013 compared to the comparable prior fiscal year period. The average yield on investment
securities decreased 30 basis points to 1.78% for the three months ended December 31, 2012 from
2.08% for the same period ended 2011.

The Company's interest expense for the three month period ended December 31, 2012 was $1.9
million, a decrease of $340,000 from the three month period ended December 31, 2011. The reason
for the decrease in interest expense in the first quarter of fiscal 2013 compared to the first
quarter of fiscal 2012 was a 22 basis point decrease in average rate paid on total deposits
together with a decrease in the average balance of our total deposits of $16.2 million, or 3.1%,
in the first quarter of fiscal 2013 compared to first quarter of fiscal 2012 due primarily to a
$18.2 million decrease in the average balance of money market accounts. The average rate paid on
total deposits decreased to 1.18% for fiscal 2013 from 1.40% for fiscal 2012. Our expense on
borrowings amounted to $430,000 in the first quarter of fiscal 2013 compared to $434,000 in the
first quarter of fiscal 2012. The average balance of our borrowings decreased by $958,000 in the
first quarter of fiscal 2013 compared to the first quarter of fiscal 2012, however, the average
cost of borrowed funds increased to 3.58% in the first quarter of fiscal 2013 compared to 3.54% in
the first quarter of fiscal 2012.

The provision for the loan losses was $400,000 for the quarter ended December 31, 2012 compared to
a $300,000 credit for the quarter ended December 31, 2011.  A $1.1 million recovery during the
three months ended December 31, 2011, contributed to the $700,000 difference in the provision for
loan losses for the December 31, 2012 and December 31, 2011 fiscal quarters. At December 31, 2012,
our total non-performing assets amounted to $15.0 million, an increase of $632,000 compared to
total non-performing assets at September 30, 2012. At December 31, 2012, the Company's total
non-performing assets and performing troubled debt restructurings totaled $21.7 million compared
to $22.5 million at September 30, 2012, an improvement of 3.5%. Our net charge-offs for the
quarter ended December 31, 2012 were $410,000, a $376,000, or 47.8%, improvement compared to
$786,000 of net charge-offs during the quarter ended December 31, 2011. Our ratio of net
charge-offs to the total allowance for loan losses was 21.7% for the quarter ended December 31,
2012 compared to 34.8% for the quarter ended December 31, 2011. As of December 31, 2012, the
balance of the allowance for loan losses was $7.6 million, or 1.68% of gross loans and 67.68% of
non-accruing loans, compared to an allowance for loan losses of $7.6 million or 1.64% of gross
loans and 77.76% of non-accruing loans at September 30, 2012.

At December 31, 2012, the Company's total non-accruing loans amounted to $11.2 million, or 2.48%
of total gross loans, compared to $9.7 million of non-accruing loans, or 2.11% of total gross
loans at September 30, 2012 and $10.4 million, or 2.15% of total gross loans at December 31, 2011.
Total non-accruing loans increased by $1.4 million on a linked quarter basis due primarily to a
$1.7 million increase in non-accruing commercial real estate loans.

The Company's other, or non-interest, income increased by $445,000, or 51.6%, to $1.3 million for
the three months ended December 31, 2012 compared to $862,000 for the three months ended December
31, 2011. The increase in other income during the first quarter of fiscal 2013 was due to a
$588,000 increase in earnings on bank owned life insurance as the result of a one-time tax-free
death benefit payment of $596,000. In addition, we recorded a net gain on the sale of loans in the
amount of $164,000 during the quarter ended December 31, 2012.

The Company's other, or non-interest, expenses increased by $357,000, or 9.1%, to $4.3 million in
the quarter ended December 31, 2012 compared to $3.9 million for the three months ended December
31, 2011. The increase in other operating expenses in the first quarter of fiscal 2013 compared to
the first quarter of fiscal 2012 was due primarily to a $259,000 increase in salaries and employee
benefits and a $240,000 increase in net other real estate owned expense in fiscal 2013 when
compared to the same period in fiscal 2012. These increases were partially offset by a $91,000
decrease in professional fees in the December 31, 2012 compared to the quarter ended December 31,
2011. The income tax benefit for the quarter ended December 31, 2012 was primarily due to a $1.2
million decrease in pre-tax income during the quarter ended December 31, 2012. Our effective
Federal tax rate was (8.8%) and 30.9% for the three months ended December 31, 2012 and 2011,
respectively.

The Company's total assets decreased $23.8 million or 3.3% to $688.0 million at December 31, 2012
compared to $711.8 million at September 30, 2012. The decrease was primary due to a $16.0 million
or 12.1% decrease in cash and cash equivalents and $10.7 million or 2.4% reduction in net loans
receivable. The decrease was partially offset by a $4.7 million or 5.8% increase in investment
securities.

The Company's total liabilities decreased $59.2 million or 9.1% to $590.0 million at December 31,
2012 compared to $649.2 million at September 30, 2012. The decrease was primarily due to $56.7
million decrease in stock subscription escrow, reflecting the closing of our "second-step"
conversion on October 11, 2012, and $5.9 million decrease in total deposits. Our total deposits
were $535.1 million at December 31, 2012 compared to $541.0 million at September 30, 2012. These
decreases were partially offset by a $3.7 million increase in advances from borrowers for taxes
and insurance.

Shareholders' equity increased by $35.4 million to $98.1 million at December 31, 2012 compared to
$62.6 million at September 30, 2012. The increase was primarily due to the "second-step"
conversion of the Bank from the mutual holding company structure to the stock holding company
structure on October 11, 2012. In connection with the conversion and reorganization, 3,636,875
shares of common stock, par value $0.01 per share, of the Malvern Bancorp, Inc., were sold in a
subscription offering to certain depositors of the Bank and other investors for $10 per share, or
$36.4 million in the aggregate, and 2,921,598 shares of common stock were issued in exchange for
the outstanding shares of common stock of the former Mid-Tier Holding Company for the Bank,
Malvern Federal Bancorp, Inc., held by the "public" shareholders of the Mid-Tier Holding Company
(all shareholders except the Mutual Holding Company). Treasury stock of the former Mid-Tier
Holding Company was cancelled. Retained earnings increased by $671,000 to $39.3 million at
December 31, 2012 primarily as a result of the $671,000 net income during the first quarter of
fiscal 2013. Our ratio of equity to assets was 14.25% at December 31, 2012. 

Malvern Bancorp, Inc. is the holding company for Malvern Federal Savings Bank. Malvern Federal
Savings Bank is a federally-chartered, FDIC-insured savings bank that was originally organized in
1887. The Bank conducts business from its headquarters in Paoli, Pennsylvania, a suburb of
Philadelphia, as well as eight other financial centers located throughout Chester and Delaware
County, Pennsylvania.

This press release contains certain forward looking statements. Forward-looking statements can be
identified by the fact that they do not relate strictly to historical or current facts. They often
include words like "believe," "expect," "anticipate," "estimate" and "intend" or future or
conditional verbs such as "will," "would," "should," "could" or "may." Certain factors that could
cause actual results to differ materially from expected results include changes in the interest
rate environment, changes in general economic conditions, legislative and regulatory changes that
adversely affect the business of Malvern Bancorp Inc., and changes in the securities markets.  
Except as required by law, the Company does not undertake any obligation to update any
forward-looking statements to reflect changes in beliefs, expectations or events.

 MALVERN BANCORP, INC.                                                                                                  
 SELECTED FINANCIAL AND OTHER DATA (unaudited)                                                                          
                                                                                                                      
                                                                    At December 31, 2012     At September 30, 2012    
                                                                    (Dollars in thousands)                             
 Selected Financial Condition Data:                                                                                   
 Total assets                                                       $688,030                 $711,812                 
 Loans receivable, net                                              446,271                  457,001                  
 Securities available for sale                                      85,208                   80,508                   
 FHLB borrowings                                                    48,000                   48,085                   
 Deposits                                                           535,076                  540,988                  
 Shareholders' equity                                               98,070                   62,636                   
 Total liabilities                                                  589,960                  649,176                  
 Allowance for loan losses                                          7,571                    7,581                    
 Non-accrual loans                                                  11,187                   9,749                    
 Non-performing assets                                              14,975                   14,343                   
 Performing troubled debt restructurings                            6,768                    8,187                    
 Non-performing assets and performing troubled debt restructurings  21,743                   22,530                   
                                                                                                                      
                                                                                                                      
                                                                    Three Months Ended December 31,                    
                                                                    2012                     2011                     
                                                                    (Dollars in thousands, except per share data)      
 Selected Operating Data:                                                                                             
 Total interest and dividend income                                 $5,950                   $6,872                   
 Total interest expense                                             1,947                    2,287                    
 Net interest income                                                4,003                    4,585                    
 Provision (credit) for loan losses                                 400                      (300)                    
 Net interest income after provision (credit) for loan losses       3,603                    4,885                    
 Total other income                                                 1,307                    862                      
 Total other expense                                                4,293                    3,936                    
 Income tax (benefit) expense                                       (54)                     560                      
 Net income                                                         $671                     $1,251                   
 Net earnings per share*                                            $0.11                    $0.20                    
 Dividends declared per share                                       $ --                     $ --                     
 __________________                                                                                                   
 *Net earnings per share for the prior period has been adjusted to reflect the impact of the second-step conversion and reorganization of the Company, which was completed on October 11, 2012. 


                                                                                                                                     
                                                                                                 Three Months Ended December 31,      
                                                                                                 2012              2011              
 Selected Financial Ratios and Other Data(1)                                                                                         
 Selected Operating Ratios:                                                                                                          
 Average yield on interest-earning assets                                                        3.62%             4.38%             
 Average rate on interest-bearing liabilities                                                    1.39              1.58              
 Net interest rate spread(2)                                                                     2.23              2.80              
 Net interest margin(3)                                                                          2.44              2.92              
 Total non-interest expense to average assets                                                    2.58              2.43              
 Efficiency ratio(4)                                                                             81.46             72.80             
 Return on average assets                                                                        0.39              0.75              
 Return on average equity                                                                        3.10              8.17              
                                                                                                                                     
 Asset Quality Ratios(5):                                                                                                            
 Non-accrual loans as a percent of total loans receivable                                        2.48%             2.15%             
 Non-performing assets as a percent of total assets                                              2.18              2.53              
 Non-performing assets and performing troubled debt restructurings as a percent of total assets  3.16              4.04              
 Allowance for loan losses as a percent of non-accrual loans                                     67.68             86.62             
                                                                                                                                     
 Capital Ratios(5):                                                                                                                  
 Total risk-based capital to risk weighted assets                                                21.20%            13.14%            
 Tier 1 risk based capital to risk weighted assets                                               19.94             11.88             
 Tangible capital to tangible assets                                                             11.96             8.09              
 Tier 1 leverage (core) capital to adjustable tangible assets                                    11.96             8.09              
 Shareholders' equity to total assets                                                            14.25             9.25              
 _______________________________________                                                                                             
 (1) Ratios have been annualized where appropriate.                                                                                    
 (2) Net interest rate spread represents the difference between the weighted average yield on interest earning assets and the weighted average cost of interest bearing liabilities. 
 (3) Net interest margin represents net interest income as a percentage of average interest-earning assets.                            
 (4) The efficiency ratio represents the ratio of non-interest expense divided by net interest income and total other income.          
 (5) Asset quality ratios are end of period ratios. Capital ratios are end of period ratios and are at Bank level except for shareholders' equity to total assets. 


(5) Asset quality ratios are end of period ratios. Capital ratios are end of period ratios and are
at Bank level except for shareholders' equity to total assets.

The table below sets forth the amounts and categories of loans delinquent more than 30 days but
less than 90 days at the dates indicated.

                                December 31, 2012  December 31, 2011  September 30, 2012  
                                (Dollars in thousands)                                      
 31-89 Days Delinquent:                                                                   
 Residential mortgage           $1,260             $1,408             $1,402              
 Construction and Development:                                                            
 Residential and commercial     8,433              --                 --                  
 Commercial:                                                                              
 Commercial real estate         --                 3,170              1,778               
 Other                          --                 --                 --                  
 Consumer:                                                                                
 Home equity lines of credit    300                20                 220                 
 Second mortgages               985                1,182              1,140               
 Other                          6                  7                  4                   
 Total                          $10,984            $5,787             $4,544              


The following table sets forth non-performing assets and performing troubled debt restructurings
which are neither non-accruing nor more than 90 days past due and still accruing in our portfolio
at the dates indicated. Loans are generally placed on non-accrual status when they are 90 days or
more past due as to principal or interest or when the collection of principal and/or interest
becomes doubtful. There were no loans past due 90 days or more and still accruing interest for the
periods shown. Troubled debt restructurings ("TDR") are loans which are modified in a manner
constituting a concession to the borrower, such as forgiving a portion of interest or principal
making loans at a rate materially less than that of market rates, when the borrower is
experiencing financial difficulty.

                                                                                                       December 31, 2012  December 31, 2011  September 30, 2012  
                                                                                                       (Dollars in thousands)                                      
 Non-accruing loans:                                                                                                                                             
 Residential mortgage                                                                                  $4,021             $2,562             $3,540              
 Construction and development:                                                                                                                                   
 Residential and commercial(1)                                                                         2,707              4,841              3,788               
 Commercial:                                                                                                                                                     
 Commercial real estate(2)                                                                             3,108              1,694              1,458               
 Other                                                                                                 201                209                201                 
 Consumer:                                                                                                                                                       
 Home equity lines of credit                                                                           22                 37                 23                  
 Second mortgages                                                                                      1,128              1,065              739                 
 Total non-accruing loans                                                                              11,187             10,408             9,749               
 Other real estate owned and other foreclosed assets:                                                                                                            
 Residential mortgage                                                                                  841                2,489              1,262               
 Commercial:                                                                                                                                                     
 Commercial real estate                                                                                2,126              3,908              2,405               
 Other                                                                                                 405                34                 486                 
 Consumer:                                                                                                                                                       
 Second mortgages                                                                                      --                 --                 441                 
 Total REO                                                                                             3,788              6,431              4,594               
 Total non-performing assets                                                                           14,975             16,839             14,343              
                                                                                                                                                                 
 Performing troubled debt restructurings:                                                                                                                        
 Residential mortgage                                                                                  857                882                864                 
 Construction and development:                                                                                                                                   
 Land loans                                                                                            1,145              1,157              1,148               
 Commercial:                                                                                                                                                     
 Commercial real estate                                                                                4,591              7,897              6,000               
 Other                                                                                                 175                175                175                 
 Total TDRs                                                                                            6,768              10,111             8,187               
 Total non-performing assets and performing troubled debt restructurings                               $21,743            $26,950            $22,530             
 Ratios:                                                                                                                                                         
 Total non-accrual loans as a percent of gross loans                                                   2.48%              2.15%              2.11%               
 Total non-performing assets as a percent of total assets                                              2.18%              2.53%              2.01%               
 Total non-performing assets and performing troubled debt restructurings as a percent of total assets  3.16%              4.04%              3.17%               
                                                                                                                                                                 
 ___________________________                                                                                                                                     
 (1) At December 31, 2012, includes two loans classified as TDRs in the aggregate amount of $1.3 million.                                                           
 (1) At September 30, 2012, includes two loans classified as TDRs in the amount of $1.4 million.                                                                    
 (2) At December 31, 2012, includes one loan classified as TDR in the amount of $1.4 million.                                                                       


CONTACT: For further information contact:
         Ronald Anderson, President and CEO
         (610) 644-9400

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