MIDDLEBORO, Mass., Nov. 24 /PRNewswire-FirstCall/ -- Mayflower Bancorp, Inc. (Nasdaq: MFLR) today reported net income of $302,000 or $0.15 per share for its second quarter ended October 31, 2009 as compared to a net loss of $907,000 or $0.44 per share for the same quarter last year. The diluted earnings per share for the second quarter were $0.15 compared to a diluted loss per share of $0.44 for the second quarter of last year.
For the six-months ended October 31, 2009, net income was $534,000 or $0.26 per share, compared to a net loss of $657,000 or $0.32 per share for the same period last year. On a diluted per share basis, earnings for the six months were $0.26 per share compared to a diluted loss per share of $0.32 for the same period last year.
Included in the prior-year operating results for the second quarter was a gross, other than temporary impairment charge of $1.9 million related to the Company's ownership of The Federal National Mortgage Association's ("Fannie Mae") and The Federal Home Loan Mortgage Corporation's ("Freddie Mac") preferred and auction rate preferred stock. The net after-tax reduction in earnings as a result of that charge was $1.2 million.
Net interest income for the quarter ending October 31, 2009 increased by $19,000 or 1.0% to $1.9 million. This increase was due in part to matured certificates of deposit repricing into lower rates, offset by a reduction in the average balance of loans outstanding. During the quarter ended October 31, 2009, the Company's net interest margin increased, from 3.32% for the quarter ended October 31, 2008 to 3.35% for the quarter ended October 31, 2009. Total average interest earning assets for the quarter increased from $224.1 million for the quarter ended October 31, 2008 to $224.7 million for the quarter ended October 31, 2009 and average interest bearing liabilities grew from $220.4 million for the quarter ended October 31, 2008 to $225.2 million for the quarter ended October 31, 2009.
Non-interest income for the quarter increased by $2.1 million, primarily due to a change in gains/losses on sales and writedowns on investments, from a loss of $1.9 million for the prior year quarter to a gain of $128,000. The prior year loss was a result of the previously mentioned $1.9 million Fannie Mae and Freddie Mac other-than-temporary impairment charge recognized during the quarter ended October 31, 2008. Additionally, gains on sales of loans increased by $36,000 due to increased residential one-to-four family mortgage originations and sales, and other income increased by $15,000. These increases were offset by a decrease of $22,000 in loan origination fees as a function of adjusted amortization of the mortgage servicing asset and by a decrease of $14,000 in customer service fees.
As compared to the same period last year, total operating expenses increased by $133,000 or 7.2% for the quarter ended October 31, 2009. This increase was comprised of an increase of $77,000 in FDIC assessment expense due to higher FDIC deposit insurance premiums. Additionally, salary and benefit expense increased by $85,000 due to employees hired to staff the new branch in Plymouth, MA, the hiring of a new commercial loan officer, and increases in employee benefit costs. Also, occupancy and equipment expenses increased by $16,000 due to the opening of the Company's new Plymouth, MA branch, while other expenses increased by $59,000 due to increased marketing costs associated with that new office. These increases were offset by a decrease of $104,000 in losses and expenses of foreclosed real estate due to prior-year recognition of a foreclosed property loss.
For the six-months ended October 31, 2009, net interest income was $3.7 million, an increase of $64,000 or 1.8% compared to the prior year six-month period. Additionally, the Company's net interest margin increased from 3.26% for the six-months ended October 31, 2008 to 3.30% for six-months ended October 31, 2009. Average interest earning assets for the six-months ended October 31, 2009 were $225.2 million as compared to $224.6 million for the six-months ended October 31, 2008 and average interest bearing liabilities were $225.3 million compared to $220.4 million for the same six-month period one year ago.
For the six-months ended October 31, 2009, non-interest income improved in total by $2.3 million, primarily impacted by the prior year $1.9 million gross Fannie Mae and Freddie Mac investment writedowns, as compared to investment gains of $131,000 realized during the current year period. Additionally, gains on sales of mortgages increased by $206,000. These additional gains were a function of decreases in prevailing mortgage interest rates during the period, which resulted in increased volumes of fixed-rate residential mortgage closings, which the Company was able to profitably sell. Finally, other income increased by $24,000. These increases were offset by a decrease of $30,000 in loan origination fees and by a decrease of $14,000 in customer service fees.
Total operating expenses increased by $380,000 to $3.9 million for the six-months ended October 31, 2009, an increase of 10.7%. This increase was attributable to an increase of $159,000 in salary and benefit expense, an increase of $154,000 in FDIC assessment expense, an increase of $121,000 in other expenses, and an increase of $26,000 in occupancy and equipment expense. These increases were offset by a decrease of $80,000 in losses and expenses related to foreclosed property.
Since the end of the April 30, 2009 fiscal year, total assets of the Company have decreased by $539,000, ending at $249.0 million as of October 31, 2009. During the six-month period, cash and cash equivalents increased by $3.3 million and total investments increased by $5.5 million. These increases were offset by a decrease of $9.2 million in net loans receivable. This decline in loan balances is a result of a decrease of $6.2 million in residential mortgages, a decrease of $2.7 million in net construction loans outstanding, a decrease of $881,000 in home equity loans and lines of credit, and a decrease of $140,000 in personal loans. These reductions were partially offset by an increase of $536,000 in commercial loans and mortgages. During the six-months ended October 31, 2009, total deposits increased by $2.6 million. This increase was due to growth of $4.0 million in money market deposit accounts and growth of $5.2 million in checking and savings accounts, offset by a decrease of $6.7 million in certificates of deposit. Finally, borrowed funds outstanding decreased by $3.0 million.
As of October 31, 2009, non-performing assets totaled $2.5 million, compared to $935,000 at April 30, 2009. The increase is due primarily to the addition of a $1.4 million commercial mortgage to the non-performing category. The property securing this mortgage is located in the Company's primary market area and was appraised for $2.2 million in March 2009.
Total stockholders' equity was $20.1 million at October 31, 2009, compared to $19.3 million at April 30, 2009. Tier 1 capital to average assets was 7.75% at October 31, 2009, compared to 7.56% at April 30, 2009. The increase in total equity is due to net income for the six-months of $534,000 and an increase of $625,000 in the net unrealized gain on securities classified as available-for-sale. Those increases in total equity were partially offset during the six-month period by dividends of $.16 per share and totaling $334,000 as paid to shareholders, and by Company stock repurchases totaling $20,000.
In conjunction with these announcements, Edward M. Pratt, President and Chief Executive Officer of the Company also reported that the Company's Board of Directors has declared a quarterly cash dividend of $0.06 per share to be payable on December 11, 2009, to shareholders of record as of December 4, 2009.
Commenting further, Mr. Pratt added, "We continue to operate in an extremely difficult environment, and although optimistic about an economic recovery, as yet, we see precious little evidence of one in our market. Although our asset quality has continued to be comparatively good, even our conservatively underwritten loan portfolio may be subject to ongoing pressure in the periods to come. We have been successful in controlling our funding costs and improving our net interest margin, and we expect that trend to continue through the remainder of our current fiscal year, as high cost certificates of deposit are replaced on our balance sheet by lower cost, core deposits."
Mayflower Bancorp, Inc. is the holding company for Mayflower Co-operative Bank which specializes in residential and commercial lending and traditional banking and deposit services. The Company currently serves southeastern Massachusetts from its Main Office in Middleboro and maintains additional full-service offices in Bridgewater, Lakeville, Plymouth, Rochester, Wareham, and West Wareham, Massachusetts. All of the Company's deposits are insured by the Federal Deposit Insurance Corporation (FDIC) to applicable limits. All amounts above those limits are insured in full by the Share Insurance Fund (SIF) of Massachusetts. For further information on Mayflower Bancorp, Inc. please visit www.mayflowerbank.com.
(See accompanying Selected Consolidated Financial Information)
This earnings report may contain certain forward-looking statements, which are based on management's current expectations regarding economic, legislative and regulatory issues that may impact the Company's earnings in future periods. Factors that could cause future results to vary materially from current management expectations include, but are not limited to, general economic conditions, changes in interest rates, deposit flows, real estate values and competition; changes in accounting principles, policies or guidelines; changes in legislation or regulation; and other economic, competitive, governmental, regulatory and technological factors affecting the Company's operations, pricing, products and services.
Mayflower Bancorp, Inc. and Subsidiary Selected Consolidated Financial Information (Dollars in thousands, except per share information)
October 31, April 30, 2009 2009 ----------- --------- Total assets $249,006 $249,545 Loans receivable, net 121,892 131,111 Federal funds sold and interest bearing deposits 9,418 6,184 Investment securities: Held to maturity 46,252 45,239 Available for sale, net 49,502 45,022 Deposits 216,523 213,957 Borrowed funds 10,877 13,888 Stockholders' equity 20,143 19,338 Tier 1 Capital to average assets 7.75% 7.56% Tier 1 Capital to risk-weighted assets 14.32% 13.39% Book value per share $9.67 $9.27
Three months ended Six months ended October 31, October 31, 2009 2008 2009 2008 ---- ---- ---- ---- Statement of operations Interest and dividend income $2,854 $3,157 $5,781 $6,341 Interest expense 973 1,295 2,062 2,686 --- ----- ----- ----- Net interest income 1,881 1,862 3,719 3,655 Provision for loan losses - - - - Gain on sales of loans 81 45 270 64 Gain (loss) on sales and writedowns of investments 128 (1,930) 131 (1,944) Other non interest income 287 308 553 573 Operating expenses (1,979) (1,846) (3,941) (3,561) ------ ------ ------ ------ Income (loss) before income taxes 398 (1,561) 732 (1,213) Income taxes 96 (654) 198 (556) --- ---- --- ---- Net income (loss) $302 $(907) $534 $(657) ==== ===== ==== ===== Earnings (loss) per share -basic $0.15 $(0.44) $0.26 $(0.32) Earnings (loss) per share - diluted $0.15 $(0.44) $0.26 $(0.32) Dividends per share $0.06 $0.10 $0.16 $0.20 Weighted average shares outstanding 2,084,399 2,090,691 2,085,004 2,091,327 Annualized return on average assets 0.49% -1.51% 0.43% -0.55% Annualized return on average equity 6.08% -19.54% 5.44% -6.90% Net interest spread 3.35% 3.29% 3.31% 3.21% Net interest margin 3.35% 3.32% 3.30% 3.26%
Mayflower Bancorp, Inc. and Subsidiary Analysis of Loans Past Due (Dollars in thousands)
October 31, April 30, October 31, 2009 2009 2008 ----------- --------- ----------- Loans past due over 90 days: Residential mortgages $354 $345 $- Commercial and construction mortgages - - - Commercial time and demand loans - - - Consumer and other loans - - - $354 $345 $- ==== ==== === Loans past due over 90 days as a percentage of: Net loans receivable 0.29% 0.26% - Total assets 0.14% 0.14% - Non-performing assets **Non-accrual loans $1,777 $345 $- Real estate acquired by foreclosure 723 590 317 $2,500 $935 $317 ====== ==== ==== Non-performing assets as a percentage of: Net loans receivable 2.05% 0.71% 0.25% Total assets 1.00% 0.37% 0.13% Allowance for loan losses $1,235 $1,305 $1,378 Allowance for loan losses as a percentage of Non- performing loans 69.50% 378.26% N/A Allowance for loan losses as a percentage of net loans 1.01% 1.00% 1.08%
** includes loans which are contractually past due 90 days or more and/or loans less than 90 days past due on which the Bank has ceased accruing interest
SOURCE Mayflower Bancorp, Inc.