Ottawa Bancorp, Inc. Announces Second Quarter 2017 Results

Loading...
Loading...

OTTAWA, Ill., Aug. 02, 2017 (GLOBE NEWSWIRE) -- Ottawa Bancorp, Inc. (the "Company") OTTW, the holding company for Ottawa Savings Bank, FSB (the "Bank"), announced net income of $0.5 million, or $0.14 per basic and diluted common share for the three months ended June 30, 2017, compared to net income of $0.4 million, or $0.13 per basic and diluted common share, for the three months ended June 30, 2016. The strong second quarter results were positively impacted by increased loan demand. Additionally, non-performing loans continued to decrease during the three months ended June 30, 2017. Our collection of approximately $0.3 million in pay-offs on two non-performing loans and a principal reduction of $150,000 on another non-performing loan contributed to the further reduction in non-performing loans from $2.8 million at March 31, 2017 to $2.3 million at June 30, 2017, which in addition to loan growth, improved the ratio of non-performing loans to gross loans from 3.00% at December 31, 2016 to 1.63% at March 31, 2017 and 1.24% at June 30, 2017. 

Comparison of Results of Operations for the Three Months Ended June 30, 2017 and June 30, 2016

Net income for the three months ended June 30, 2017 increased $0.1 million, or 24.7%, to $0.5 million compared to net income of $0.4 million for the three months ended June 30, 2016. The increase was primarily attributed to an increase in net interest income after provision for loan losses of $0.2 million and a $0.2 million increase in total other income, partially offset by an increase of $0.3 million in other expenses. 
   
Net interest income increased by $0.2 million or 11.1% to $2.1 million for the three months ended June 30, 2017, from $1.9 million for the three months ended June 30, 2016.  Interest and dividend income increased $0.2 million or 11.0%, primarily due to an increase in the average balances of interest-earning assets of $22.7 million, partially off-set by a 0.5% decrease in the yield on interest-earning assets to 4.30%. The increase in net interest income was partially off-set by a slight increase in interest expense as the average cost of funds increased five basis points to 0.54%, for the three months ended June 30, 2017. The increase in cost of funds was slightly off-set by a decrease in the average balance of interest-bearing liabilities of $0.4 million during the three months ended June 30, 2017. The net interest margin decreased 0.3% during the three months ended June 30, 2017 to 3.89%.

We recorded a provision for loan losses of $0.2 million for both the three months ended June 30, 2017 and 2016. General reserves were slightly higher at June 30, 2017 when compared to June 30, 2016, as the balances in all loan categories increased during the twelve months ended June 30, 2017. These increases were off-set by improvements in historical loss levels and changes in qualitative factors during the twelve months ended June 30, 2017, as compared to the same period in 2016, and slightly lower specific reserves.  Net charge-offs during the second quarter of 2017 were $103,000 compared to $61,000 during the second quarter of 2016.  The allowance for loan losses was $2.2 million, or 1.21% of total loans at June 30, 2017 compared to $2.3 million, or 1.50%, at June 30, 2016.

Non-interest income increased $0.2 million, to $0.6 million for the three months ended June 30, 2017, as compared to the same period for 2016. The increase was primarily due to higher revenues related to mortgage loan activity.

Non-interest expense increased $0.3 million, or 19.0%, to $2.0 million for the three months ended June 30, 2017, as compared to the three months ended June 30, 2016.  The increase was primarily due to higher salaries and employee benefits as additional mortgage loan originators and staff were added to support loan growth.  Loan expense increased due to the increase in loan originations.

We recorded income tax expense of $0.2 million for both the three months ended June 30, 2017 and 2016.  

Comparison of Results of Operations for the Six Months Ended June 30, 2017 and June 30, 2016

Net income for the six months ended June 30, 2017 increased $0.2 million, or 30.2%, to $0.8 million compared to net income of $0.6 million for the six months ended June 30, 2016. The increase was primarily attributed to an increase in net interest income after provision for loan losses of $0.5 million and a $0.3 million increase in total other income, partially offset by an increase of $0.5 million in other expenses and an increase of $52,000 in income tax expense. 
   
Net interest income increased by $0.4 million or 11.7% to $4.2 million for the six months ended June 30, 2017, from $3.8 million for the six months ended June 30, 2016.  Interest and dividend income increased $0.5 million or 11.2%, primarily due to an increase in the average balances of interest-earning assets of $20.3 million and a 0.7% increase in the yield on interest-earning assets to 4.26%. The increase in net interest income was partially off-set by a slight increase in interest expense as the average cost of funds increased four basis points to 0.53%, for the six months ended June 30, 2017. The increase in cost of funds was slightly off-set by a decrease in the average balance of interest-bearing liabilities of $1.9 million during the six months ended June 30, 2017. The net interest margin increased 1.3% during the six months ended June 30, 2017 to 3.85%.

We recorded a provision for loan losses of $0.3 million for both the six months ended June 30, 2017 and 2016. General reserves were slightly higher at June 30, 2017 when compared to June 30, 2016, as the balances in all loan categories increased during the twelve months ended June 30, 2017. These increases were off-set by improvements in historical loss levels and changes in qualitative factors during the twelve months ended June 30, 2017, as compared to the same period in 2016, and slightly lower specific reserves.   Net charge-offs during the first six months of 2017 were $257,000 compared to $213,000 during the first six months of 2016.  The allowance for loan losses was $2.2 million or 1.21% of total loans at June 30, 2017 compared to $2.3 million, or 1.50%, at June 30, 2016.

Non-interest income increased $0.3 million, to $1.0 million for the six months ended June 30, 2017, as compared to the same period for 2016. The increase was primarily due to higher revenues related to mortgage loan activity.

Non-interest expense increased $0.5 million, or 15.6%, to $3.8 million for the six months ended June 30, 2017, as compared to the six months ended June 30, 2016.  The increase was primarily due to higher salaries and employee benefits as additional mortgage loan originators and staff were added to support loan growth.  Loan expense increased due to the increase in loan originations.

We recorded income tax expense of $0.3 million for both the six months ended June 30, 2017 and 2016, respectively. 

Comparison of Financial Condition at June 30, 2017 and December 31, 2016:

Total consolidated assets as of June 30, 2017 were $239.0 million, an increase of $8.8 million, or 3.8%, from $230.2 million at December 31, 2016.  The increase was primarily due to net increases in the loan portfolio of $18.4 million, off-set by decreases in securities available for sale of $6.4 million and decreases in cash and cash equivalents of $2.6 million.

Cash and cash equivalents decreased $2.6 million, or 44.0%, to $3.3 million at June 30, 2017 from $5.9 million at December 31, 2016.  The decrease in cash and cash equivalents was primarily a result of cash used in investing activities of $10.5 million exceeding cash provided by financing activities of $7.3 million and cash provided by operating activities of $0.6 million.

Securities available-for-sale decreased $6.4 million, or 14.4%, to $38.2 million at June 30, 2017 from $44.6 million at December 31, 2016, as paydowns, sales, calls, and maturities exceeded new securities purchases.

Net loans increased by $18.4 million to $179.0 million at June 30, 2017 compared to $160.6 million at December 31, 2016 primarily as a result of a $13.1 million increase in one-to-four family loans. The Company also experienced growth in most other loan categories during the six months ended June 30, 2017.

Loading...
Loading...

Total deposits increased $7.1 million, or 4.1%, to $179.6 million at June 30, 2017 from $172.5 million at December 31, 2016.  At June 30, 2017 checking/money market accounts increased by $4.0 million, savings accounts increased by $2.7 million and certificates of deposit increased by $0.3 million as compared to December 31, 2016.

Total stockholders' equity increased $0.7 million or 1.4% to $52.6 million at June 30, 2017 from $51.9 million at December 31, 2016.  The increase is primarily a result of net income of $0.8 million for the six months ended June 30, 2017, and an increase in other comprehensive income of $0.2 million related to an increase in market values of securities available for sale, partially off-set by dividends of $0.3 million paid to shareholders. 

About Ottawa Bancorp, Inc.

Ottawa Bancorp, Inc. is the holding company for Ottawa Savings Bank, FSB which provides various financial services to individual and corporate customers in the United States. The Bank offers various deposit accounts, including checking, money market, regular savings, club savings, certificates of deposit, and various retirement accounts. Its loan portfolio includes one-to-four family residential mortgage, multi-family and non-residential real estate, commercial, and construction loans as well as auto loans and home equity lines of credit. Ottawa Savings Bank, FSB was founded in 1871 and is headquartered in Ottawa, Illinois. For more information about the Company and the Bank, please visit www.ottawasavings.com.

Safe-Harbor

This news release contains forward-looking statements within the meaning of the federal securities laws. Statements in this release that are not strictly historical are forward-looking and are based upon current expectations that may differ materially from actual results. These forward-looking statements, identified by words such as "will," "expected," "believe," and "prospects," involve risks and uncertainties that could cause actual results to differ materially from those anticipated by the statements made herein. These risks and uncertainties involve general economic trends and changes in interest rates, increased competition, changes in consumer demand for financial services, the possibility of unforeseen events affecting the industry generally, the uncertainties associated with newly developed or acquired operations, and market disruptions. Ottawa Bancorp, Inc. undertakes no obligation to release revisions to these forward-looking statements publicly to reflect events or circumstances after the date hereof or to reflect the occurrence of unforeseen events, except as required to be reported under the rules and regulations of the Securities and Exchange Commission. 

Ottawa Bancorp, Inc. & Subsidiary
Consolidated Balance Sheets
June 30, 2017 and December 31, 2016
(Unaudited)
 June 30, December 31,
  2017   2016 
Assets   
Cash and due from banks$ 2,823,601  $ 3,916,559 
Interest bearing deposits  507,496    2,030,090 
Total cash and cash equivalents  3,331,097    5,946,649 
Time deposits  250,000    250,000 
Federal funds sold  -    1,690,000 
Securities available for sale  38,158,992    44,560,680 
Non-marketable equity securities  752,221    753,321 
Loans, net of allowance for loan losses of $2,240,586 and $2,247,449   
at June 30, 2017 and December 31, 2016, respectively  178,959,773    160,586,129 
Loans held for sale  1,426,800    305,072 
Premises and equipment, net  6,778,433    6,843,906 
Accrued interest receivable  857,931    785,484 
Foreclosed real estate  -    33,000 
Deferred tax assets  2,320,296    2,593,786 
Cash value of life insurance  2,269,760    2,245,578 
Goodwill  649,869    649,869 
Core deposit intangible  321,636    359,000 
Other assets  2,954,876    2,558,910 
Total assets$ 239,031,684  $ 230,161,384 
Liabilities and Stockholders' Equity   
Liabilities   
Deposits:   
Non-interest bearing$ 11,714,780  $ 9,974,536 
Interest bearing  167,909,584    162,572,485 
Total deposits  179,624,364    172,547,021 
Accrued interest payable  1,704    224 
FHLB advances  1,113,262    1,121,153 
Federal funds purchased  438,000    - 
Other liabilities  4,177,857    3,748,953 
Total liabilities  185,355,187    177,417,351 
Commitments and contingencies   
Redeemable common stock held by ESOP plan  1,016,956    807,629 
Stockholders' Equity   
Common stock, $.01 par value, 12,000,000 shares authorized; 3,467,402   
shares issued at June 30, 2017 and December 31, 2016, respectively  34,674    34,674 
Additional paid-in-capital  37,153,871    37,117,311 
Retained earnings  18,016,621    17,455,472 
Unallocated ESOP shares  (1,843,640)   (1,932,648)
Accumulated other comprehensive income  314,971    69,224 
   53,676,497    52,744,033 
Less:   
Maximum cash obligation related to ESOP shares  (1,016,956)   (807,629)
Total stockholders' equity  52,659,541    51,936,404 
Total liabilities and stockholders' equity$ 239,031,684  $ 230,161,384 
    


Ottawa Bancorp, Inc. & Subsidiary
Consolidated Statements of Operations
Three and Six Months Ended June 30, 2017 and 2016
(Unaudited)
 Three Months Ended Six Months Ended
 June 30, June 30,
  2017  2016  2017  2016
Interest and dividend income:       
Interest and fees on loans$ 2,114,434 $ 1,851,755 $ 4,087,184 $ 3,575,053
Securities:       
Residential mortgage-backed and related securities  126,148   148,467   262,016   300,544
State and municipal securities  126,939   135,724   257,568   270,704
Dividends on non-marketable equity securities  1,548   1,970   3,342   4,160
Interest-bearing deposits  6,725   3,054   16,046   10,398
Total interest and dividend income  2,375,794   2,140,970   4,626,156   4,160,859
Interest expense:       
Deposits  223,208   203,220   428,477   405,690
Borrowings  8,064   7,120   15,060   11,740
Total interest expense  231,272   210,340   443,537   417,430
Net interest income  2,144,522   1,930,630   4,182,619   3,743,429
Provision for loan losses  160,000   157,500   250,000   277,500
Net interest income after provision for loan losses    1,984,522   1,773,130   3,932,619   3,465,929
Other income:       
Gain on sale of securities  21,160   8,322   21,202   8,418
Gain on sale of loans  209,892   148,740   316,985   187,670
Gain on sale of foreclosed real estate  -   46,251   24,060   111,448
Gain on sale of repossessed assets  11,252   1,048   14,296   1,680
Loan origination and servicing income  202,718   77,912   303,709   136,534
Origination of mortgage servicing rights, net of amortization  18,701   25,424   34,112   27,554
Customer service fees  121,212   101,656   237,071   199,927
Income on bank owned life insurance  12,158   12,554   24,183   24,726
Other  32,139   23,798   60,104   48,617
Total other income  629,232   445,705   1,035,722   746,574
Other expenses:       
Salaries and employee benefits  1,083,157   837,233   2,077,523   1,664,918
Directors fees  40,800   40,800   81,600   81,600
Occupancy  162,241   154,112   325,780   306,190
Deposit insurance premium  12,697   45,769   26,211   89,992
Legal and professional services  93,964   87,817   190,122   174,945
Data processing  152,614   120,711   291,107   255,733
Loss on sale of securities  7,566   3,261   7,566   3,261
Loan expense  132,120   101,279   250,443   159,821
Valuation adjustments and expenses on foreclosed real estate  2,060   32,423   7,522   68,936
Loss on sale of repossessed assets  -   -   274   -
Other  293,094   240,317   538,179   478,073
Total other expenses  1,980,313   1,663,722   3,796,327   3,283,469
Income before income tax expense   633,441   555,113   1,172,014   929,034
Income tax expense  167,896   181,797   349,169   296,812
Net income $ 465,545 $ 373,316 $ 822,845 $ 632,222
Basic earnings per share$ 0.14 $ 0.13 $ 0.25 $ 0.22
Diluted earnings per share$ 0.14 $ 0.13 $ 0.25 $ 0.22
Dividends per share$ 0.04 $  -  $ 0.08 $  - 


Ottawa Bancorp, Inc. & Subsidiary 
Selected Financial Data and Ratios 
(Unaudited) 
    At June 30, At December 31,   
     2017   2016     
    (In thousands, except per share data)  
Financial Condition Data:            
Total Assets   $ 239,032  $ 230,161     
Loans, net (1)     178,960    160,586     
Securities available for sale     38,159    44,561     
Deposits     179,624    172,547     
Stockholders' Equity     52,660    51,936     
Book Value per common share   $ 15.19  $ 14.98     
Tangible Book Value per common share   $ 14.91  $ 14.69     
(1) Net of loans in process, deferred loan (cost) fees and allowance for loan losses.     
             
 Three Months Ended June 30, Six Months Ended June 30, 
  2017  2016  2017  2016 
 (In thousands, except per share data) 
Operations Data:            
Total interest and dividend income$ 2,376  $ 2,141  $ 4,626  $ 4,161  
Total interest expense  231    210    443    418  
Net interest income  2,145    1,931    4,183    3,743  
Provision for loan losses  160    158    250    278  
Other income  629    446    1,035    747  
Other expense  1,980    1,664    3,796    3,283  
Income tax expense  168    182    349    297  
Net income$ 466  $ 373  $ 823  $ 632  
Basic earnings per share$ 0.14  $ 0.13  $ 0.25  $ 0.22  
Diluted earnings per share$ 0.14  $ 0.13  $ 0.25  $ 0.22  
Dividends per share$ 0.04  $  -   $ 0.08  $  -   
             
 At or for the Three Months Ended At or for the Six Months Ended 
 June 30, June 30, 
  2017  2016  2017  2016 
Performance Ratios:            
Return on average assets  0.78%  0.69%  0.70%   0.59% 
Return on average stockholders' equity  3.54    4.75    3.14    4.05  
Average stockholders' equity to average assets  21.96    14.52    22.20    14.51  
Stockholders' equity to total assets at end of period  22.03    14.56    22.03    14.56  
Net interest rate spread (1)  3.76    3.83    3.73    3.74  
Net interest margin (2)  3.89    3.90    3.85    3.80  
Average interest-earning assets to average interest-bearing liabilities  129.67    116.09    129.19    115.85  
Other expense to average assets  0.83    0.77    1.61    1.53  
Efficiency ratio (3)  71.38    70.00    72.73    73.12  
Dividend payout ratio  28.57    -     32.00    -   
             
             
   At June 30, At December 31, 
      2017  2016 
       (unaudited) 
Regulatory Capital Ratios (4):            
Total risk-based capital (to risk-weighted assets)       25.29%   26.76% 
Tier 1 core capital (to risk-weighted assets)        24.04    25.51  
Common equity Tier 1 (to risk-weighted assets)       24.04    25.51  
Tier 1 leverage (to adjusted total assets)        17.14    16.84  
Asset Quality Ratios:            
Net charge-offs to average gross loans outstanding        0.29    0.27  
Allowance for loan losses to gross loans outstanding       1.21    1.35  
Non-performing loans to gross loans (5)        1.24    3.00  
Non-performing assets to total assets (5)        0.98    2.18  
Other Data:            
Number of full-service offices        3    3  
             
(1) Represents the difference between the weighted average yield on average interest-earning assets and the weighted average cost of funds on average interest-bearing liabilities. 
(2) Represents net interest income as a percent of average interest-earning assets.     
(3) Represents other noninterest expenses divided by the sum of net interest income and noninterest income. 
(4) Ratios are for Ottawa Savings Bank.            
(5) Nonperforming loans and assets include accruing loans past due 90 days or more.     

Please contact Jon Kranov, President and Chief Executive Officer at 815-433-2525 with questions.

Loading...
Loading...
Date
ticker
name
Actual EPS
EPS Surprise
Actual Rev
Rev Surprise
Posted In: EarningsPress Releases
Benzinga simplifies the market for smarter investing

Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.

Join Now: Free!

Loading...