Clifton Savings Bancorp Inc. Reports Operating Results (10-Q)

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Aug 07, 2009
Clifton Savings Bancorp Inc. (CSBK, Financial) filed Quarterly Report for the period ended 2009-06-30.

Clifton Savings Bancorp Inc. is the holding company for Clifton Savings Bank S.L.A. The Bank provides community banking services through its ten offices in northeastern New Jersey. Clifton Savings Bancorp Inc. has a market cap of $277.5 million; its shares were traded at around $10.38 with a P/E ratio of 57.7 and P/S ratio of 6. The dividend yield of Clifton Savings Bancorp Inc. stocks is 2%.

Highlight of Business Operations:

Total liabilities increased $41.3 million, or 5.3% to $827.9 million at June 30,

2009 from $786.6 million at March 31, 2009. Deposits at June 30, 2009 increased

$43.0 million, or 6.8% to $676.6 million when compared with $633.6 million at

March 31, 2009, as the Bank continued to offer very competitive rates on their

deposit products. Borrowings decreased $2.1 million, or 1.4% to $142.2 million

at June 30, 2009, as compared with $144.3 million at March 31, 2009. During the

period ended June 30, 2009, $2.1 million of long-term borrowings were repaid in

accordance with their original terms. At June 30, 2009, the remaining borrowings

of $142.2 million had an average interest rate of 3.85%.



Interest income on loans increased by $500,000, or 8.9% to $6.1 million during

the three months ended June 30, 2009, when compared with $5.6 million for the

same 2008 period. The increase during the 2009 period mainly resulted from an

increase in average loan balance of $40.3 million, or 9.4% when compared to the

same period in 2008, coupled with a decrease in the yield earned on the loan

portfolio of 4 basis points to 5.20% from 5.24%. Interest on mortgage-backed

securities increased $400,000, or 11.1% to $4.0 million during the three months

ended June 30, 2009, when compared with $3.6 million for the same 2008 period.

The increase during the 2009 period resulted from an increase of 7 basis points

in the yield earned on mortgage-backed securities to 5.20% from 5.13%, coupled

with an increase of $25.9 million, or 9.2% in the average balance of

mortgage-backed securities outstanding. Interest earned on investment securities

decreased by $527,000, or 42.8% to $703,000 during the three months ended June

30, 2009, when compared to $1.23 million during the same 2008 period, due to a

decrease in the average balance of $12.4 million, or 12.4%, coupled with a 171

basis point decrease in yield to 3.21% from 4.92%. Interest earned on other

interest-earning assets decreased by $194,000, or 63.4% to $112,000 during the

three months ended June 30, 2009, when compared to $306,000 during the same 2008

period primarily due to a decrease of 98 basis points in yield to 1.67% from

2.65%, coupled with a decrease of $19.4 million, or 41.8%, in the average

balance. Investment securities decreased primarily due to the redeployment of

funds resulting from maturities and calls of investment securities into higher

yielding loans and mortgage-backed securities. Other interest-earning assets

decreased due to cash and cash equivalents being redeployed into higher yielding

assets.



Interest expense on deposits decreased $190,000, or 3.7% to $4.95 million during

the three months ended June 30, 2009, when compared to $5.14 million during the

same 2008 period. Such decrease was primarily attributable to a decrease of 52

basis points in the cost of interest-bearing deposits to 3.07% from 3.59%,

partially offset by an increase of $72.5 million, or 12.7% in the average

balance of interest-bearing deposits. Interest expense on borrowed money

decreased approximately $50,000, or 3.5% to $1.38 million during the three

months ended June 30, 2009 when compared with $1.43 million during the same 2008

period. Such decrease was primarily attributable to a decrease of $2.8 million,

or 2.0% in the average balance of borrowings, coupled with a decrease of 5 basis

points in the cost of borrowings to 3.86% from 3.91%.



During the three months ended June 30, 2009 and 2008, the Bank recorded $100,000

and $-0-, respectively, for the provision for loan losses. The provision for the

2009 period was the result of both increases in non-performing loans and the

loan portfolio balances. Non-performing loans increased from $270,000 at June

30, 2008 to $1.4 million, or 418.5% at June 30, 2009, while gross loans

increased from $440.5 million at June 30, 2008 to $470.1 million, or 6.7% at

June 30, 2009. The allowance for loan losses is based on management\'s evaluation

of the risk inherent in the Bank\'s loan portfolio and gives due consideration to

the changes in general market conditions and in the nature and volume of the

Bank\'s loan activity. The Bank intends to continue to evaluate the need for a

provision for loan losses based on its periodic review of the loan portfolio and

general market conditions. At June 30, 2009 and June 30, 2008, the Bank\'s

non-performing loans, which were delinquent ninety days or more, and all of

which were in a non-accrual status, totaled $1.4 million and $270,000

respectively, and represented 0.30%, and 0.06%, respectively, of total gross

loans, and 0.14% and 0.03%, respectively, of total assets. During the three

months ended June 30, 2009 and 2008, the Bank did not charge off any loans. The

allowance for loan losses amounted to $1.8 million at June 30, 2009 and $1.7

million at March 31, 2009, representing 0.38% of total gross loans at June 30,

2009 and 0.36% of total gross loans at March 31, 2009.



The Bank anticipates that it will have sufficient fund available to meet its

current commitments. At June 30, 2009, the Bank had outstanding commitments to

originate loans totaling approximately $16.9 million, which included $11.4

million for fixed-rate mortgage loans with interest rates ranging from 4.25% to

5.625%, $5.3 million for adjustable rate mortgage loans with initial rate

ranging from 4.625% to 6.50%, and $150,000 for an adjustable rate home equity

line of credit with an initial interest rate of 4.50%.





Net Portfolio Value as % of

Net Portfolio Value Present Value of Assets

Basis Points ("bp") - -

Change in Rates $ Amount $ Change % Change NPV Ratio Change

- - - - - -

(Dollars in Thousands)



300 bp $ 119,256 $ (41,672) (26)% 12.97 % (338)bp

- - - - -

200 138,976 (21,952) (14) 14.68 (166)

- - - - -

100 153,808 (7,121) (4) 15.87 (47)

- - - - -

50 158,113 (2,816) (2) 16.18 (17)

- - - - -

0 160,929 - - 16.35 -

- - - - -

(50) 162,171 1,243 1 16.37 3

- - - - -

(100) 161,167 239 - 16.23 (12)

- - - - -




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