EX-99.1 2 mlvf-ex991_9.htm EX-99.1 mlvf-ex991_9.htm

 

Exhibit 99.1

 

 

        NEWS RELEASE

 

 

42 E. Lancaster Avenue Paoli, Pennsylvania 19301 | 610-644-9400 | http://ir.malvernbancorp.com

 

Investor Contacts:

Joseph D. Gangemi

Corporate Investor Relations

610-695-3676

 

Investor Relations Contact:

Nathanial Jordan

610-695-3646

 

 

 

 

Malvern Bancorp, Inc. Reports Second Quarter Operating Results

 

PAOLI, PA., May 10, 2022 – Malvern Bancorp, Inc. (NASDAQ: MLVF) (the “Company”), the parent company of Malvern Bank, National Association (the “Bank”), today reported operating results for the second fiscal quarter ended March 31, 2022. Net income amounted to $522,000, or $0.07 per fully diluted common share, compared with $2.2 million, or $0.30 per fully diluted common share, for the quarter ended March 31, 2021.  Annualized return on average assets (“ROAA”) was 0.18 percent for the quarter ended March 31, 2022, compared to 0.73 percent for the quarter ended March 31, 2021, and annualized return on average equity (“ROAE”) was 1.43 percent for the quarter ended March 31, 2022, compared with 6.14 percent for the quarter ended March 31, 2021.

 

For the six months ended March 31, 2022, net income amounted to $2.5 million, or $0.34 per fully diluted common share, compared with net income of $4.5 million, or $0.60 per fully diluted common share, for the six months ended March 31, 2021. The annualized ROAA was 0.44 percent for the six months ended March 31, 2022, compared to 0.73 percent for the six months ended March 31, 2021, and the annualized ROAE was 3.50 percent for the six months ended March 31, 2022, compared with 6.26 percent for the six months ended March 31, 2021.

 

The decrease in net income and diluted earnings per share from the second quarter of 2021 were primarily due to the recording of a $1.7 million valuation allowance adjustment on a $13.6 million commercial real estate loan classified as impaired and held for sale.  The valuation allowance adjustment in the current quarter is the result of the ongoing monitoring and evaluation of the loan’s value in light of indications of interest received with respect to the note.  The valuation allowance adjustment consists of approximately $395,000 in reduced value and approximately $1.3 million in real estate tax payments.  The Bank paid real estate taxes in arrears to improve the marketability of the note. The loan’s carrying value at March 31, 2022 is $11.9 million.  

This non-accrual loan, secured by commercial real estate in New York City, was transferred to held for sale with an aggregate book balance of $13.6 million at September 30, 2021, reflecting the Bank’s intent to sell the loan.  There can be no assurances that a sale can be consummated, or that a sale can be consummated at the carrying value of the loan, as market and sales prices are subject to various factors.  Tax payments will continue in the approximate amount of $274,000 annually, unless and until the property is sold.  If this loan is sold at an amount less than the carrying value of the loan, such sale would result in a loss and impact the Company’s operating results.

 

 

-1-

 

 

“Management has prioritized and will continue to prioritize asset quality and balance sheet strength in taking what we believe are the necessary steps to improve credit quality and strengthen our balance sheet. We are making progress with our asset quality issues and near term these actions have elevated our expenses and overshadow net earnings.” commented Anthony C. Weagley, President and Chief Executive Officer.

 

Statement of Income Highlights at March 31, 2022

 

 

•

Net interest margin (“NIM”) increased 27 basis points to 2.81 percent for the quarter ended March 31, 2022, compared to 2.54 percent for the quarter ended March 31, 2021. The increase was driven by a reduction in interest expense, partially offset by a decrease in interest-earning assets.

 

 

•

Total interest expense decreased $1.4 million, or 50.7 percent, to $1.4 million for the quarter ended March 31, 2022, compared to $2.7 million for the quarter ended March 31, 2021, which resulted primarily from the reduction of costs on interest-bearing deposits.

 

 

•

The Company did not record a provision for loan losses during the quarter ended March 31, 2022, or the quarter ended March 31, 2021.  

 

 

Linked Quarter Financial Ratios

 

 

 

 

 

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

As of or for the quarter ended:

3/31/2022

12/31/2021

9/30/2021

6/30/2021

3/31/2021

Return on average assets (1)

0.18%

0.69%

(2.06%)

0.53%

0.73%

Return on average equity (1)

1.43%

5.61%

(16.59%)

4.35%

6.14%

Net interest margin (1)

2.81%

2.78%

2.61%

2.70%

2.54%

Loans / deposits ratio

94.57%

95.06%

97.41%

104.84%

108.14%

Shareholders' equity / total assets

13.11%

12.54%

11.76%

12.50%

12.09%

Efficiency ratio (2)

91.1%

66.3%

68.7%

73.6%

63.5%

Book value per common share

$18.95

18.97

$18.65

$19.44

$19.17

 

 

(1)

Annualized

 

(2)

3/31/2022 Quarter includes the impact of the valuation allowance adjustment related to the above mentioned HFS commercial real estate loan.

 

 

 

 


-2-

 

 

 

Linked Quarter Income Statement Data

 

 

 

 

 

(unaudited)

 

 

 

 

 

(in thousands, except share and per share data)

 

 

 

 

 

 

 

 

 

 

 

For the quarter ended:

3/31/2022

12/31/2021

9/30/2021

6/30/2021

3/31/2021

Net interest income

$    6,954

$       7,158

$   6,825

$   7,129

$   6,802

Provision for loan losses

             -  

               -  

    10,626

            -  

           -  

Net interest income (loss) after provision for loan losses

       6,954

          7,158

     (3,801)

      7,129

      6,802

Other income

          561

             727

         579

         793

      1,167

Other expense

       6,845

          5,228

      5,084

      5,832

      5,063

Income before income tax expense

          670

          2,657

     (8,306)

      2,090

      2,906

Income tax expense (benefit)

          148

             640

     (2,116)

         489

         682

Net income (loss)

$       522

$       2,017

$  (6,190)

$   1,601

$   2,224

Earnings (loss) per common share

 

 

 

 

 

Basic

         0.07

0.27

(0.82)

0.21

0.30

Diluted

         0.07

            0.27

       (0.82)

        0.21

        0.30

Weighted average common shares outstanding

 

 

 

 

 

Basic

7,554,955

   7,551,606

7,548,958

7,545,371

7,529,408

Diluted

7,556,194

   7,553,208

7,550,766

7,546,200

7,530,151

 

 

Net Interest Income

Net interest income was $7.0 million for the quarter ended March 31, 2022, an increase of $152,000, or 2.2 percent, from $6.8 million for the quarter ended March 31, 2021. The increase was driven by a decrease in interest paid on deposits and borrowings of $1.4 million, partially offset by decreased interest income of $1.2 million, primarily related to a decline in average loans. The average yield on interest-earning assets declined 21 basis points for the quarter ended March 31, 2022, to 3.35 percent, when compared to the same period in 2021 primarily due to the decrease in average loan balances and average yield on loans. The average rate on interest-bearing liabilities fell 49 basis points to 0.59 percent compared to the quarter ended March 31, 2021, due to decreases in market rates of interest. Net interest margin increased to 2.81 percent for the quarter ended March 31, 2022, from 2.54 percent for the same period in 2021. The margin improvement in the current period, in large part reflected the decline in interest-bearing liabilities partially offset by the decline in yield earned on interest-earning assets.

Net interest income was $14.1 million for the six months ended March 31, 2022, and a slight increase compared to the six months ended March 31, 2021. Consistent with the quarter, the slight increase was primarily driven by a reduction in interest expense as the cost of interest-bearing deposits decreased by 50 basis points compared to the six months ended March 31, 2021. The cost of interest-bearing liabilities decreased by 55 basis points compared to the six months ended March 31, 2021.

 

Other Income

 

Other income decreased $606,000, or 51.9 percent, during the quarter ended March 31, 2022, compared to the quarter ended March 31, 2021.  The decrease in other income was primarily due to a decrease in net gains on sale of investments and loans of $522000 to $11,000 for the quarter ended March 31, 2022, compared to $533,000 for the quarter ended March 31, 2021. This decrease was partially offset by an increase in earnings on bank-owned life insurance of $122,000 during quarter ended March 31, 2022.  

 

Similar to the quarter, other income for the six months ended March 31, 2022, decreased by $1.1 million mainly due to reductions in the net gains on sale of investments and loans of $1.2 million.

-3-

 

 

 

 

 

Other Expense

 

Other expense for the quarter ended March 31, 2022, increased $1.8 million to $6.8 million when compared to the quarter ended March 31, 2021. This increase was primarily due to a $1.7 million valuation allowance recorded on one loan held for sale, discussed above.  

 

For the six months ended March 31, 2022, other expenses amounted to $12.1 million, an increase of $2.0 million, compared to the six months ended March 31, 2021.  The primary components of the increase were the aforementioned valuation allowance and increased professional fees.  

 

Income Taxes

 

The Company recorded income tax expense of $148,000 during the quarter ended March 31, 2022, compared to $682,000 for the quarter ended March 31, 2021. The effective tax rate for the Company for the quarters ended March 31, 2022 and March 31, 2021 were 22.1 percent and 23.5 percent, respectively.  The reduction in the tax rate was due to the tax free income received from the additional bank-owned life insurance.

 

For the six months ended March 31, 2022, the Company recorded income tax expense of $788,000, compared to $1.4 million for the six months ended March 31, 2021.

 

 

Statement of Condition Highlights at March 31, 2022

 

 

•

Non-performing assets (“NPAs”) were 0.55 percent and 0.72 percent of total assets at March 31, 2022, and September 30, 2021 respectively.

 

•

Non-performing loans (“NPLs”) were 0.14 percent and 0.40 percent of total loans at March 31, 2022, and September 30, 2021, respectively.

 

•

Total assets were $1.1 billion at March 31, 2022, a decrease of $106.9 million, or 8.9 percent, compared to September 30, 2021.  The decrease was primarily due to a $103.7 million decline in loans receivable driven by payoffs and pay downs during the period and a $21.3 million decrease in loans held-for-sale, mainly loans that were sold during the period.

 

•

Total liabilities were $1.0 billion at March 31, 2022, a decrease of $109.2 million, or 10.2 percent, compared to September 30, 2021.  The decrease was primarily due to the repayment of a $30.0 million FHLB advance and a decrease of $83.7 million in total deposits.  

 

•

Book value per common share amounted to $18.95 at March 31, 2022, compared to $18.65 at September 30, 2021.

 

 

 

 

 

 


-4-

 

 

 

 

Linked Quarter Statement of Condition Data

 

 

 

 

 

(in thousands, unaudited)

 

 

 

 

 

At the quarter ended:

3/31/2022

12/31/2021

9/30/2021

6/30/2021

3/31/2021

Cash and due from depository institutions

$       49,674

        104,568

$       99,670

$       90,441

$       99,358

Interest bearing deposits in depository institutions

72,349

          30,336

$       36,920

14,513

9,556

Investment securities, available for sale, at fair value

54,183

          41,718

40,813

34,502

28,899

Equity Securities

1,445

            1,491

1,500

—

—

Investment securities held to maturity

48,512

          39,045

28,507

31,795

25,834

Restricted stock, at cost

6,462

            6,294

7,776

7,896

8,891

Loans Held-for-sale

11,933

          13,616

33,199

—

—

Loans receivable, net of allowance for loan losses

799,310

        858,203

902,981

940,735

974,596

Other real estate owned

4,961

            4,961

4,961

4,961

5,796

Accrued interest receivable

3,478

            3,394

3,512

3,370

3,598

Operating lease right-of-use-assets

1,523

            1,663

1,796

2,168

2,322

Property and equipment, net

5,486

            5,635

5,777

5,902

6,040

Deferred income taxes, net

3,632

            3,461

3,530

3,389

3,535

Bank-owned life insurance

25,896

          26,224

26,056

25,889

25,725

Other assets

13,441

          12,591

12,145

20,183

12,269

Total assets

$  1,102,285

$  1,153,200

$  1,209,143

$  1,185,744

$  1,206,419

Deposits

$     854,437

        912,688

$     938,159

$     907,704

$     912,213

FHLB advances

60,000

          60,000

90,000

90,000

110,000

Subordinated debt

25,000

          24,974

24,934

24,895

24,855

Operating lease liabilities

1,556

            1,691

1,830

2,204

2,357

Other liabilities

16,742

            9,290

12,052

12,749

11,143

Shareholders’ equity

144,550

        144,557

142,168

148,192

145,851

Total liabilities and shareholders’ equity

$  1,102,285

$  1,153,200

$  1,209,143

$  1,185,744

$  1,206,419

 

 

 

Condensed Consolidated

 

 

 

 

 

Average Statement of Condition

 

 

 

 

 

(in thousands, unaudited)

 

 

 

 

 

 

 

 

 

 

 

   For the quarter ended:

3/31/2022

12/31/2021

9/30/2021

6/30/2021

3/31/2021

Investment securities

$               97,697

$          82,126

$       75,004

$       71,811

$       58,559

Interest-bearing cash accounts

                  36,452

             32,775

          26,339

          16,914

          21,506

Loans, net of allowance for loan losses

                846,420

           899,430

        933,727

        955,012

        977,876

All other assets

                148,374

           163,117

        165,439

        164,288

        165,942

Total assets

$          1,128,943

$     1,177,448

$  1,200,509

$  1,208,025

$  1,223,883

Non-interest-bearing deposits

$               54,501

             54,092

          51,534

          52,799

          50,327

Interest-bearing deposits

                829,050

           876,269

        869,914

        868,099

        866,153

FHLB advances

                  60,000

             66,847

          90,000

          99,505

        116,889

Other short-term borrowings

                          -  

                  120

                  -  

                  -  

            3,111

Subordinated debt

                  24,990

             24,952

          24,917

          24,877

          24,835

Other liabilities

                  14,250

             11,408

          14,907

          15,399

          17,751

Shareholders’ equity

                146,152

           143,760

        149,237

        147,346

        144,817

Total liabilities and shareholders’ equity

$          1,128,943

$     1,177,448

$  1,200,509

$  1,208,025

$  1,223,883

 


-5-

 

 

Deposits

 

Total deposits decreased $83.7 million, or 8.9 percent, from $938.2 million at September 30, 2021 to $854.4 million at March 31, 2022. The decrease in deposits was primarily related to a reduction of $57.2 million in money market deposits and a reduction of $34.2 million in interest bearing demand deposits, partially offset by increases of $7.6 million in the Savings, Time, and non-interest bearing deposit categories collectively.  

The Company continues to focus on the maintenance, development, and expansion of its deposit base. Management believes that the emphasis on serving the needs of our communities will provide a long-term relationship base which in turn will allow the Company to efficiently compete for and retain deposits in its market.  

 

The following table reflects the composition of the Company’s deposits as of the dates indicated.

 

(in thousands, unaudited)

 

 

 

 

 

At quarter ended:

3/31/2022

12/31/2021

9/30/2021

6/30/2021

3/31/2021

Demand:

 

 

 

 

 

Non-interest-bearing

$         54,712

$       60,320

$       53,849

$       53,365

$       54,210

Interest-bearing

302,468

        335,411

336,645

329,372

313,865

Savings

54,074

          56,342

50,582

51,011

49,601

Money market

328,324

        346,023

385,480

359,040

338,100

Time

114,859

        114,592

111,603

114,916

156,437

Total deposits

$       854,437

$     912,688

$     938,159

$     907,704

$     912,213

 

 

Loans

Total net loans amounted to $799.3 million at March 31, 2022, compared to $903.0 million at September 30, 2021, resulting in a net decrease of $103.7 million, or 11.5 percent, for the period and was driven primarily by higher commercial loan payoffs and paydowns during the period. Loans held-for-sale amounted to $11.9 million at March 31, 2022, compared to $33.2 million at September 30, 2021. This decline was primarily related to the sale of three commercial loans.  Average gross loan balances for the quarter ended March 31, 2022, totaled $856.9 million as compared to $945.5 million for the quarter ended September 30, 2021, representing a decrease of $88.6 million, or 9.4 percent.

At March 31, 2022, gross loans, which excludes loans held-for-sale, remained weighted toward two primary components: the commercial and core residential portfolios, with commercial loans accounting for 71.9 percent and single-family residential real estate loans accounting for 22.0 percent of the gross loan portfolio at such date.  Construction and development loans amounted to 3.7 percent and consumer loans represented 2.4 percent of the gross loan portfolio at such date. The decrease in the gross loan portfolio at March 31, 2022, compared to September 30, 2021, primarily reflected decreases of $48.3 million in commercial loans, $21.0 million in residential mortgage loans, and 33.5 million in construction and development loans.


-6-

 

 

The following table reflects the Company’s loan portfolio composition, excluding loans held-for-sale.

 

(in thousands, unaudited)

 

 

 

 

 

At quarter ended:

03/31/2022

12/31/2021

9/30/2021

6/30/2021

3/31/2021

Residential mortgage

$     177,669

$     187,516

$     198,710

$     201,737

$     218,165

Construction and Development:

 

 

 

 

 

Residential and commercial

          25,558

          56,876

61,492

61,484

76,257

Land

            4,603

            2,138

2,204

2,253

3,596

Total construction and development

          30,161

     59,014

63,696

63,737

79,853

Commercial:

 

 

 

 

 

Commercial real estate

        400,974

        416,248

426,915

478,032

482,611

Farmland

          15,624

          15,582

10,297

10,335

7,344

Multi-family

          54,788

          54,448

66,332

66,725

67,122

Commercial and industrial

        101,354

        106,493

115,246

97,955

94,706

Other

            7,978

            7,433

10,954

10,896

9,927

Total commercial

        580,718

   600,204

629,744

663,943

661,710

Consumer:

 

 

 

 

 

Home equity lines of credit

          12,283

          13,174

13,491

12,822

15,936

Second mortgages

            4,969

            5,384

5,884

7,039

8,114

Other

            2,237

            2,282

2,299

2,372

2,650

Total consumer

          19,489

     20,840

21,674

22,233

26,700

Total loans

        808,037

   867,574

913,824

951,650

986,428

Deferred loan costs, net

               574

               667

629

685

769

Allowance for loan losses

           (9,301)

         (10,037)

         (11,472)

         (11,600)

         (12,601)

Loans Receivable, net

        799,310

$     858,204

$     902,981

$     940,735

$     974,596

 

 

At March 31, 2022, the Company had $142.3 million in overall undisbursed loan commitments, which consisted primarily of available usage from active construction facilities, unused commercial lines of credit, and home equity lines of credit.


-7-

 

 

Asset Quality

Non-accrual loans, excluding loans held-for-sale, totaled $1.1 million at March 31, 2022, and $3.7 million at September 30, 2021. The decrease in non-accrual loans was primarily due to partial charge downs totaling $2.2 million taken during the six month period ended March 31, 2022 related to one non-accrual commercial and industrial loan. Performing troubled debt restructured (“TDR”) loans were $5.8 million at March 31, 2022, and $17.6 million at September 30, 2021. The decrease is primarily related to two TDR commercial real estate loans totaling $11.4 million that were sold during the period, as part of the note sale consummated during the December 31, 2021 period end.

At March 31, 2022, NPAs totaled $6.1 million, or 0.55 percent of total assets, as compared with $8.7 million, or 0.72 percent of total assets, at September 30, 2021. The decrease in NPAs is due to the decrease in non-accrual loans as described above.  Other real estate owned or OREO, which is comprised of one commercial real estate property, totaled $5.0 million as of quarters ended March 31, 2022 and September 30, 2021.

  

Non-Performing Asset and Other Asset Quality Data:

 

(in thousands, unaudited)

 

 

 

 

 

As of or for the quarter ended:

3/31/2022

12/31/2021

9/30/2021

6/30/2021

3/31/2021

Non-accrual loans

$          1,101

$          1,790

$          3,697

$        23,547

$        22,281

Loans 90 days or more past due and still accruing

                    3

                   -  

                   -  

212

765

   Total non-performing loans

1,104

1,790

3,697

23,759

23,046

OREO

4,961

4,961

4,961

4,961

5,796

   Total NPAs

$          6,065

$          6,751

$          8,658

$        28,720

$        28,842

Performing TDR loans

$          5,787

$          6,310

$        17,601

$        23,352

$        22,697

 

 

 

 

 

 

NPAs / total assets

0.55%

0.59%

0.72%

2.42%

2.39%

Non-performing loans / total loans

0.14%

0.21%

0.40%

2.50%

2.34%

Net charge-offs

                736

             1,436

           10,754

             1,001

                434

Net charge-offs /average loans(1)

0.40%

0.63%

4.55%

0.41%

0.18%

Allowance for loan losses / total loans

1.15%

1.16%

1.26%

1.22%

1.28%

Allowance for loan losses / non-performing loans

842.5%

560.7%

310.3%

48.8%

54.7%

 

 

 

 

 

 

Total assets

1,102,285

1,153,200

1,209,143

1,185,744

1,206,419

Total gross loans

808,037

867,574

913,824

951,650

986,428

Average net loans

846,420

913,587

945,457

967,615

990,913

Allowance for loan losses

9,301

10,037

11,472

11,600

12,601

 

 

(1)

Annualized.

The allowance for loan losses at March 31, 2022 amounted to approximately $9.3 million, or 1.15 percent of total gross loans, compared to $11.5 million, or 1.26 percent of total gross loans, at September 30, 2021. The decline reflected the $2.2 million charge off described above and the overall decline in total loans at March 31, 2022 of $106.1 million compared to September 30, 2021. The Company did not record a provision for loan losses for the quarter ended March 31, 2022, compared to $550,000 provision for loan losses for the quarter ended March 31, 2021.  


-8-

 

 

Capital

At March 31, 2022, the Company’s total shareholders’ equity amounted to $144.6 million, or 13.1 percent of total assets, compared to $142.2 million, or 11.8 percent of total assets at September 30, 2021, which continues to exceed all regulatory capital guidelines. At March 31, 2022, the Bank’s common equity Tier 1 capital ratio was 18.27 percent, Tier 1 leverage ratio was 14.29 percent, Tier 1 risk-based capital ratio was 18.27 percent and the total risk-based capital ratio was 19.34 percent. At September 30, 2021, the Bank’s common equity Tier 1 capital ratio was 16.13 percent, Tier 1 leverage ratio was 13.14 percent, Tier 1 risk-based capital ratio was 16.13 percent, and the total risk-based capital ratio was 17.32 percent.

 

About Malvern Bancorp, Inc.

Malvern Bancorp, Inc. is the holding company for Malvern Bank, National Association (“Malvern Bank”), an institution that was originally organized in 1887 as a federally-chartered savings bank. Malvern Bank now serves as one of the oldest banks headquartered on the Philadelphia Main Line. For more than a century, Malvern Bank has been committed to helping people build prosperous communities as a trusted financial partner, forging lasting relationships through teamwork, respect, and integrity.

 

Malvern Bank conducts business from its headquarters in Paoli, Pennsylvania, a suburb of Philadelphia, and through its nine other banking locations in Chester and Delaware counties, Pennsylvania, Morristown, New Jersey, its New Jersey regional headquarters and Palm Beach Florida. The Bank also maintains representative offices in Allentown, Pennsylvania.  The Bank’s primary market niche is providing personalized service to its client base. 

 

Malvern Bank, through its Private Banking division, provides personalized investment advisory services to individuals, families, businesses, and non-profits. These services include banking, liquidity management, investment services, 401(k) accounts and planning, custody, tailored lending, wealth planning, trust and fiduciary services, family wealth advisory services and philanthropic advisory services.

 

The Bank offers insurance services though Malvern Insurance Associates, LLC, which provides clients a rich array of financial services, including commercial and personal insurance and commercial and personal lending.

For further information regarding Malvern Bancorp, Inc., please visit our web site at http://ir.malvernbancorp.com. For information regarding Malvern Bank, please visit our web site at http://www.mymalvernbank.com.

Forward-Looking Statements

The statements contained herein that are not historical facts are forward-looking statements based on management’s current expectations and beliefs concerning future developments and their potential effects on the Company, including, without limitation, plans, strategies and goals, and statements about the Company’s expectations regarding revenue and asset growth, financial performance and profitability, loan and deposit growth, yields and returns, loan diversification and credit management, and shareholder value creation.

Such statements involve inherent risks and uncertainties, many of which are difficult to predict and are generally beyond the control of the Company.  There can be no assurance that future developments affecting the Company will be the same as those anticipated by management.  The Company cautions readers that a number of important factors could cause actual results to differ materially from those expressed in, or implied or projected by, such forward-looking statements.  These risks and uncertainties include, but are not limited to, the following: the effects of, and changes in, trade, monetary and fiscal policies and laws, including changes in interest rate policies of the Board of Governors of the Federal Reserve System; inflation, interest rate, market and monetary fluctuations; the impact of competition and the acceptance of the Company’s products and services by new and existing customers; the impact of changes in financial services policies, laws and regulations; technological changes; any oversupply of inventory and deterioration in values of real estate in the markets in which the Company operates, both residential and commercial; the effect of changes in accounting policies and practices, as may be adopted from time-to-time by bank regulatory agencies, the Securities and Exchange Commission (“SEC”), the Public Company Accounting Oversight Board, the Financial Accounting Standards Board or other accounting standards setters; possible other-than-temporary impairment of securities held by the company; the effects of the Company’s lack of a widely-diversified loan portfolio, including the risks of geographic and industry concentrations; ability to attract deposits and other sources of liquidity; changes in the competitive environment among financial and bank holding companies and other financial service providers; unanticipated regulatory or judicial proceedings; and the Company’s ability to manage the risk involved in the foregoing.  Additional factors that could cause actual results to differ materially from those expressed in the forward-looking statements are discussed in the Company’s Annual Report Filed on Form 10-K and Quarterly Reports on Form 10-Q filed with the SEC and available at the SEC’s Internet site (http://www.sec.gov).

Further, given its ongoing and dynamic nature, it is difficult to predict the full impact of the COVID-19 pandemic, including the outbreak of its variants on our business. The extent of such impact will depend on future developments, which are highly uncertain, including when the coronavirus and its variants can be controlled, the effects on general economic conditions, and when and how the economy may be fully reopened, and when and how it will remain as such. As the result of the COVID-19 pandemic and the related adverse local and national economic consequences, we are subject to any of the following risks, any of which could continue to have a material, adverse effect on our business, financial condition, liquidity, and results of operations: the demand for our products and services may decline, making it difficult to grow assets and income; the economy , and particularly commercial real estate markets may be affected; there may

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be high levels of unemployment , loan delinquencies, problem assets, and foreclosures may increase, resulting in increased charges and reduced income; if the economy is unable to continue to substantially reopen and stay open, and there are high levels of unemployment for extended period of time, loan delinquencies, problem assets, and foreclosures may increase resulting in increased charges and reduced income; collateral for loans, especially commercial real estate, may continue to decline in value, which could cause loan losses to increase; our allowance for loan losses may increase if borrowers experience financial difficulties, which will adversely affect our net income; the net worth and liquidity of loan guarantors may decline, impairing their ability to honor commitments to us; due to fluctuation in interest rates, the yield on our assets may decline to a greater extent than the decline in our cost of interest-bearing liabilities, reducing our NIM and spread and reducing net income; our cyber security risks are increased as the result of an increase in the number of employees working remotely; and FDIC premiums may increase if the agency experiences additional resolution costs.

The Company undertakes no obligation to revise or publicly release any revision or update to these forward-looking statements to reflect events or circumstances that occur after the date on which such statements were made, unless required by law.  


-10-

 

 

MALVERN BANCORP, INC. AND SUBSIDIARIES

 

 

 

 

 

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

 

 

 

 

 

 

 

 

 

 

 

 

March 31, 2022

 

September 30, 2021

(in thousands, except for share and per share data)

(unaudited)

 

 

 

ASSETS

 

 

 

 

 

Cash and due from depository institutions

$

49,674

 

$

99,670

Interest bearing deposits in depository institutions

 

72,349

 

 

36,920

    Total cash and cash equivalents

 

122,023

 

 

136,590

Investment securities available for sale, at fair value (amortized cost of $56,863 and $40,756 at March 31, 2022 and September 30, 2021, respectively)

 

54,183

 

 

40,813

Equity Securities (amortized cost of $1,500 at March 2022 & September 2021)

 

1,445

 

 

1,500

Investment securities held to maturity (fair value of $45,716 and $28,913 at March 31, 2022 and September 30, 2021, respectively)

 

48,512

 

 

28,507

Restricted stock, at cost

 

6,462

 

 

                  7,776

Loans Held-for-sale

 

11,933

 

 

33,199

Loans receivable, net of allowance for loan losses

 

799,310

 

 

902,981

Other real estate owned

 

4,961

 

 

4,961

Accrued interest receivable

 

                     3,478

 

 

                  3,512

Operating lease right-of-use-assets

 

1,523

 

 

1,796

Property and equipment, net

 

5,486

 

 

5,777

Deferred income taxes, net

 

3,632

 

 

3,530

Bank-owned life insurance

 

25,896

 

 

26,056

Other assets

 

13,441

 

 

12,145

   Total assets

$

1,102,285

 

$

1,209,143

LIABILITIES

 

 

 

 

 

Deposits:

 

 

 

 

 

   Non-interest bearing

$

54,712

 

$

53,849

   Interest-bearing

 

799,725

 

 

884,310

Total deposits

 

854,437

 

 

938,159

FHLB advances

 

60,000

 

 

90,000

Subordinated debt

 

25,000

 

 

24,934

Advances from borrowers for taxes and insurance

 

1,841

 

 

1,022

Accrued interest payable

 

352

 

 

572

Operating lease liabilities

 

                     1,556

 

 

                  1,830

Other liabilities

 

14,549

 

 

10,458

   Total liabilities

 

957,735

 

 

1,066,975

SHAREHOLDERS’ EQUITY

 

 

 

 

 

Common stock, $0.01 par value, 50,000,000 shares authorized; 7,819,627 and 7,625,111 issued and outstanding, respectively, at March 31, 2022, and 7,816,832 and 7,622,316 issued and outstanding, respectively, at September 30, 2021

 

                          76

 

 

                       76

Additional paid in capital

 

                   85,678

 

 

                85,524

Retained earnings

 

62,835

 

 

                60,296

Unearned Employee Stock Ownership Plan (ESOP) shares

 

                      (829)

 

 

                   (901)

Accumulated other comprehensive (loss) income

 

                      (347)

 

 

                       36

Treasury stock, at cost: 194,516 shares at March 31, 2022 and September 30, 2021

 

                   (2,863)

 

 

                (2,863)

   Total shareholders’ equity

 

144,550

 

 

142,168

   Total liabilities and shareholders’ equity

$

1,102,285

 

$

1,209,143

 

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MALVERN BANCORP, INC. AND SUBSIDIARIES

 

 

 

 

 

CONSOLIDATED STATEMENTS OF INCOME

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended March 31,

 

Six Months Ended March 31,

(in thousands, except for share data)

 

 

2022

 

 

2021

 

 

2022

 

 

2021

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

Interest and Dividend Income

 

 

 

 

 

 

 

 

 

 

 

 

Loans, including fees

 

$

           7,628

 

$

           9,069

 

$

         15,856

 

$

         19,145

Investment securities, taxable

 

 

              521

 

 

              321

 

 

              976

 

 

              668

Investment securities, tax-exempt

 

 

                64

 

 

                23

 

 

              100

 

 

                47

Dividends, restricted stock

 

 

                75

 

 

              119

 

 

              166

 

 

              260

Interest-bearing cash accounts

 

 

                16

 

 

                  7

 

 

                29

 

 

                15

       Total Interest and Dividend Income

 

 

           8,304

 

 

           9,539

 

 

         17,127

 

 

         20,135

Interest Expense

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

              828

 

 

           1,805

 

 

           1,873

 

 

           4,062

Short-term borrowings

 

 

                 -  

 

 

                  3

 

 

                 -  

 

 

                48

Long-term borrowings

 

 

              183

 

 

              546

 

 

              420

 

 

           1,153

Subordinated debt

 

 

              339

 

 

              383

 

 

              722

 

 

              766

Total Interest Expense

 

 

           1,350

 

 

           2,737

 

 

           3,015

 

 

           6,029

Net interest income

 

 

           6,954

 

 

           6,802

 

 

         14,112

 

 

         14,106

Provision for Loan Losses

 

 

                 -  

 

 

                 -  

 

 

                 -  

 

 

              550

Net Interest Income after Provision for

 

 

           6,954

 

 

           6,802

 

 

         14,112

 

 

         13,556

  Loan Losses

Other Income

 

 

 

 

 

 

 

 

 

 

 

 

Service charges and other fees

 

 

              219

 

 

              419

 

 

              673

 

 

              666

Rental income

 

 

                48

 

 

                54

 

 

              100

 

 

              108

Net gains on sale and call of investments

 

 

                 -  

 

 

              259

 

 

                 -  

 

 

              614

Net gains on sale of loans

 

 

                11

 

 

              274

 

 

                63

 

 

              678

Earnings on bank-owned life insurance

 

 

              283

 

 

              161

 

 

              452

 

 

              325

Total Other Income

 

 

              561

 

 

           1,167

 

 

           1,288

 

 

           2,391

Other Expense

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

 

           2,347

 

 

           2,275

 

 

           4,642

 

 

           4,547

Occupancy expense

 

 

              546

 

 

              568

 

 

           1,061

 

 

           1,110

Federal deposit insurance premium

 

 

                71

 

 

                83

 

 

              147

 

 

              159

Advertising

 

 

                32

 

 

                32

 

 

                64

 

 

                64

Data processing

 

 

              359

 

 

              306

 

 

              679

 

 

              634

Professional fees

 

 

              868

 

 

              884

 

 

           1,923

 

 

           1,547

Net other real estate owned expense, net

 

 

                 -  

 

 

                  3

 

 

                  5

 

 

                31

Pennsylvania shares tax

 

 

              169

 

 

              169

 

 

              339

 

 

              339

Other operating expenses

 

 

           2,453

 

 

              743

 

 

           3,213

 

 

           1,604

Total Other Expense

 

 

           6,845

 

 

           5,063

 

 

         12,073

 

 

         10,035

Income before income tax expense

 

 

              670

 

 

           2,906

 

 

           3,327

 

 

           5,912

Income tax expense

 

 

              148

 

 

              682

 

 

              788

 

 

           1,415

Net Income

 

$

              522

 

$

           2,224

 

$

           2,539

 

$

           4,497

Earnings per common share

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

             0.07

 

$

             0.30

 

$

             0.34

 

$

             0.60

Diluted

 

$

             0.07

 

$

             0.30

 

$

             0.34

 

$

             0.60

Weighted Average Common Shares Outstanding

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

    7,554,955

 

 

    7,529,408

 

 

    7,553,262

 

 

    7,527,588

Diluted

 

 

    7,556,194

 

 

    7,530,151

 

 

    7,554,459

 

 

    7,528,189

-12-

 

 

 

 

 

MALVERN BANCORP, INC. AND SUBSIDIARIES

SELECTED QUARTERLY FINANCIAL AND STATISTICAL DATA

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Three Months Ended

 

Three Months Ended

(in thousands, except for share and per share data) (annualized where applicable)

 

3/31/2022

 

 

12/31/2021

 

 

3/31/2021

(unaudited)

 

 

 

 

 

 

 

 

Statements of Operations Data

 

 

 

 

 

 

 

 

   Interest income

$

            8,304

 

$

            8,823

 

$

           9,539

   Interest expense

 

            1,350

 

 

            1,665

 

 

           2,737

      Net interest income

 

            6,954

 

 

            7,158

 

 

           6,802

   Provision for loan losses

 

                 -  

 

 

                 -  

 

 

                 -  

      Net interest income after provision for loan losses

 

            6,954

 

 

            7,158

 

 

           6,802

   Other income

 

               561

 

 

               727

 

 

           1,167

   Other expense

 

            6,845

 

 

            5,228

 

 

           5,063

   Income before income tax expense

 

               670

 

 

            2,657

 

 

           2,906

      Income tax expense

 

               148

 

 

               640

 

 

              682

   Net income

$

               522

 

$

            2,017

 

$

           2,224

Earnings (per Common Share)

 

 

 

 

 

 

 

 

   Basic

$

              0.07

 

$

              0.27

 

$

             0.30

   Diluted

$

              0.07

 

$

              0.27

 

$

             0.30

Statements of Condition Data (Period-End)

 

 

 

 

 

 

 

 

   Equity Securities

$

            1,445

 

$

            1,491

 

$

           1,502

   Investment securities available for sale, at fair value

  

          54,183

 

  

          41,718

 

  

         27,397

   Investment securities held to maturity (fair value of $45,716, $39,316,  and $26,367, respectively)

 

          48,512

 

 

          39,045

 

 

         25,834

   Loans Held-for-sale

 

          11,933

 

 

          13,616

 

 

                 -  

   Loans, net of allowance for loan losses

 

        799,310

 

 

        858,203

 

 

       974,596

   Total assets

 

     1,102,285

 

 

     1,153,200

 

 

    1,206,419

   Deposits

 

        854,437

 

 

        912,688

 

 

       912,213

   FHLB advances

 

          60,000

 

 

          60,000

 

 

       110,000

   Subordinated debt

 

          25,000

 

 

          24,974

 

 

         24,855

   Shareholders' equity

 

        144,550

 

 

        144,557

 

 

       145,851

Common Shares Dividend Data

 

 

 

 

 

 

 

 

   Cash dividends

$

                 -  

 

$

                 -  

 

$

                 -  

Weighted Average Common Shares Outstanding

 

 

 

 

 

 

 

 

   Basic

 

     7,554,955

 

 

     7,551,606

 

 

    7,529,408

   Diluted

 

     7,556,194

 

 

     7,553,208

 

 

    7,530,151

Operating Ratios

 

 

 

 

 

 

 

 

   Return on average assets

 

0.18%

 

 

0.69%

 

 

0.73%

   Return on average equity

 

1.43%

 

 

5.61%

 

 

6.14%

   Average equity / average assets

 

12.95%

 

 

12.21%

 

 

11.83%

   Book value per common share (period-end)

 

$         18.95

 

 

$         18.97

 

 

$        19.17

Non-Financial Information (Period-End)

 

 

 

 

 

 

 

 

   Common shareholders of record

 

               373

 

 

               376

 

 

              381

   Full-time equivalent staff

 

                 79

 

 

                 79

 

 

                81

 

 

-13-