Mayflower Bancorp Reports 19% Increase Third Quarter Earnings And Payment Of Dividend

MIDDLEBORO, Mass., Jan. 22, 2013 /PRNewswire/ -- Mayflower Bancorp, Inc. (NASDAQ Global Market: MFLR), the holding company for Mayflower Bank, today reported net income of $407,000 or $0.20 per share for the quarter ended December 31, 2012, compared to earnings of $341,000 or $0.17 per share for the quarter ended January 31, 2012.  Diluted earnings per share were $0.20 and $0.17, respectively. 

For the nine months ended December 31, 2012, net income was $1,171,000 or $0.57 per share, compared to earnings of $993,000 or $0.48 per share for the nine months ended January 31, 2012.  On a diluted per share basis, earnings for the nine months were $0.57 and $0.48, respectively.

In February 2012, Mayflower Bancorp, Inc. changed its fiscal year-end from April 30 to March 31.  As such, financial information provided herein is for the three and nine month periods ended December 31, 2012, and is compared to the three and nine month periods ended January 31, 2012. 

Net interest income was $2,003,000 for the quarter ended December 31, 2012, compared to $2,078,000 for the quarter ended January 31, 2012.  The net interest margin decreased, from 3.62% for the quarter ended January 31, 2012 to 3.42% for the quarter ended December 31, 2012.  Average interest-earning assets increased from $229.5 million for the quarter ended January 31, 2012 to $234.3 million for the quarter ended December 31, 2012 and average interest-bearing liabilities grew from $225.6 million at January 31, 2012 to $228.4 million at December 31, 2012.    

Non-interest income increased by $46,000 for the quarter ended December 31, 2012 as compared to the quarter ended January 31, 2012.  This increase was primarily due to an increase of $86,000 in gain on sales of mortgage loans and an increase of $29,000 in gain on sales of investment securities.  Additionally, interchange income increased by $7,000.  These increases were offset by a decrease of $3,000 in loan origination and other loan fees and a decrease of $27,000 in customer service fees.  Finally, other non-interest income decreased by $46,000 due to the elimination of the special dividend from The Co-operative Central Bank received in the prior year period.

Total non-interest expense decreased by $72,000 or 3.6% for the quarter ended December 31, 2012.  This decrease was partially a result of a decrease of $70,000 in losses and expenses of other real estate owned, due to reduced levels of other real estate owned, a decrease of $6,000 in occupancy and equipment expense, and a decrease of $9,000 in FDIC assessment expense.  These decreases were partially offset by an increase of $13,000 in other expenses.

The provision for loan losses was $10,000 for the quarter ended December 31, 2012, as compared to $90,000 for the quarter ended January 31, 2012, a decrease of $80,000.  In determining the appropriate level for the allowance for loan losses, the Company considers past loss experience, evaluations of underlying collateral, prevailing economic conditions, the nature of the loan portfolio and levels of non-performing and other classified loans.  Management and the Company's Board of Directors evaluate the loan loss reserve on a regular basis, and consider the allowance as constituted to be adequate at this time.

For the nine months ended December 31, 2012, net interest income was $6.1 million, a decrease of $205,000 compared to the nine months ended January 31, 2012.  This can be attributed to a decrease in the Company's net interest margin, which declined from 3.62% for the nine months ended January 31, 2012 to 3.47% for nine months ended December 31, 2012.  Average interest earning assets for the nine months ended December 31, 2012 were $234.1 million as compared to $231.7 million for the nine months ended January 31, 2012 and average interest bearing liabilities were $228.5 million at December 31, 2012, compared to $228.7 million at January 31, 2012. 

For the nine months ended December 31, 2012, non-interest income increased by $277,000, as compared to the nine months ended January 31, 2012. This improvement was due to an increase of $329,000 in gain on sales of mortgage loans, coupled with an increase of $14,000 in gain on sales of investments.  Additionally, loan origination and other loan fees increased by $6,000 and interchange income on debit card transactions increased by $18,000.  Finally, customer service fees decreased by $59,000, while other income decreased by $31,000.   

Total non-interest expenses decreased by $78,000, or 1.3%, to $5.9 million for the nine months ended December 31, 2012.  This decrease was attributable to a decrease of $18,000 in occupancy and equipment expense, a decrease of $23,000 in FDIC assessment expense, and a decrease of $82,000 in losses and expenses of other real estate owned.  These decreases were partially offset by an increase of $25,000 in compensation and fringe benefit expense and an increase of $20,000 in other expenses.    

The provision for loan losses for the nine-month period ended December 31, 2012 was $40,000, compared to $197,000 for the nine months ended January 31, 2012.  The allowance for loan loss as a percentage for net loans was 0.85% at December 31, 2012, compared to 0.91% at March 31, 2012. 

Since March 31, 2012, total assets of the Company have increased by $3.5 million, ending at $255.1 million as of December 31, 2012.  During the period, loans receivable increased by $7.8 million and total investment securities decreased by $4.6 million.  The increase in loans receivable is primarily due to growth of $9.7 million in residential mortgages.  Offsetting this increase in residential mortgages was a decrease of $1.6 million in home equity loans and lines of credit, a decrease of $786,000 in commercial loans and mortgages, and a decrease of $168,000 in consumer loans.  Finally, net construction loans outstanding increased by $598,000.   

During the nine months ended December 31, 2012, total deposits increased by $2.9 million.  This increase is comprised of growth of $9.2 million in aggregate checking and savings account balances, as offset by a reduction of $6.3 million in certificate of deposit balances.  Advances and borrowings outstanding remained constant at $1.0 million.

As of December 31, 2012, non-performing assets totaled $622,000, compared to $506,000 at March 31, 2012.  The increase from March 31, 2012 is the result of an increase of $186,000 in real estate acquired by foreclosure, offset by a decrease of $70,000 in non-performing loans.  The allowance for loan losses as a percentage of non-performing loans was 498.4% at December 31, 2012, compared to 390.1% at March 31, 2012. 

Total stockholders' equity stood at $22.6 million at December 31, 2012, compared to $21.9 million at March 31, 2012.  Tier 1 capital to average assets stood at 8.7% at December 31, 2012, compared to 8.4% at March 31, 2012.  The increase in total equity is the result of net income for the nine months of $1,171,000 and stock-based compensation credits of $74,000.  These increases were partially offset by dividends paid of $0.18 per share totaling $371,000 and Company stock repurchases totaling $65,000.  Finally, total equity decreased by $93,000 due to a reduction in the net unrealized gain on securities classified as available for sale. 

In conjunction with these announcements, the Company also reported that its Board of Directors has declared a cash dividend of $0.06 per share to be payable on February 19, 2013, to shareholders of record as of February 5, 2013.

Mayflower Bancorp, Inc. is the holding company for Mayflower 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, and 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.  Additional factors that may affect our results are discussed under "Item 1A Risk Factors" in the Company's Quarterly Reports on Form 10-Q and in its Annual Report on Form 10-K, each filed with the Securities and Exchange Commission (the "SEC"), which are available at the SEC's website (www.sec.gov) and to which reference is hereby made.

SOURCE Mayflower Bancorp, Inc.

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