Ottawa Bancorp, Inc. Announces First Quarter 2017 Results


OTTAWA, Ill., April 28, 2017 (GLOBE NEWSWIRE) -- Ottawa Bancorp, Inc. (the “Company”) (Nasdaq:OTTW), the holding company for Ottawa Savings Bank, FSB (the “Bank”), announced net income of $0.4 million, or $0.11 per basic and diluted common share for the three months ended March 31, 2017, compared to net income of $0.3 million, or $0.09 per basic and diluted common share, for the three months ended March 31, 2016. The strong first quarter results were positively impacted by increased loan demand.  Additionally, there was an improvement in non-performing loans.  Our collection of approximately $2.0 million in pay-offs on four non-performing loans contributed to the reduction in non-performing loans from $4.9 million at December 31, 2016 to $2.7 million at March 31, 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. 

Comparison of Results of Operations for the Three Months Ended March 31, 2017 and March 31, 2016

Net income for the three months ended March 31, 2017 increased $0.1 million, or 38.0%, to $0.4 million compared to net income of $0.3 million for the three months ended March 31, 2016. The increase was primarily attributed to an increase in net interest income after provision for loan losses of $0.3 million and a $0.1 million increase in total other income, partially offset by an increase of $0.2 million in other expenses and an increase of $0.1 million in income tax expense. 
   
Net interest income increased by $0.2 million or 12.4% to $2.0 million for the three months ended March 31, 2017, from $1.8 million for the three months ended March 31, 2016.  Interest and dividend income increased $0.2 million or 11.4%, primarily due to an increase in the average balances of interest-earning assets of $17.9 million and a 2.1% increase in the yield on interest-earning assets to 4.22%. The increase in net interest income was partially off-set by a slight increase in interest expense as the average cost of funds increased two basis points to 0.51%, for the three months ended March 31, 2017. The increase in cost of funds was slightly off-set by a decrease in the average balance of interest-bearing liabilities of $3.7 million during the three months ended March 31, 2017. The net interest margin increased 2.9% during the three months ended March 31, 2017 to 3.82%.

We recorded a provision for loan losses of $90,000 for the three months ended March 31, 2017 compared to a $120,000 provision for the three months ended March 31, 2016. The decrease was the result of lower general reserves at March 31, 2017 when compared to March 31, 2016, as historical loss levels and qualitative factors improved during 2017, as compared to 2016. These favorable variances were partially off-set by increases in the balances of most loan categories and higher specific reserves.  Net charge-offs during the first quarter of 2017 were $154,000 compared to $152,000 during the first quarter of 2016.  The allowance for loan losses was $2.2 million or 1.26% of total loans at March 31, 2017 compared to $2.2 million, or 1.49%, at March 31, 2016.

Non-interest income increased $0.1 million, to $0.4 million for the three months ended March 31, 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 $0.2 million, or 12.1%, to $1.8 million for the three months ended March 31, 2017, as compared to the three months ended March 31, 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 and $0.1 million for the three months ended March 31, 2017 and 2016, respectively.  

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

Total consolidated assets as of March 31, 2017 were $236.4 million, an increase of $6.2 million, or 2.7%, from $230.2 million at December 31, 2016.  The increase was primarily due to net increases in the loan portfolio of $6.5 million.

Cash and cash equivalents decreased $0.9 million, or 16.3%, to $5.0 million at March 31, 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 $7.1 million exceeding cash provided by financing activities of $5.4 million and cash provided by operating activities of $0.7 million.

Securities available-for-sale decreased $0.6 million, or 1.3%, to $44.0 million at March 31, 2017 from $44.6 million at December 31, 2016, as paydowns, sales and maturities exceeded new securities purchases.

Net loans increased by $6.5 million to $167.1 million at March 31, 2017 compared to $160.6 million at December 31, 2016 primarily as a result of a $5.0 million increase in one-to-four family loans. The Company also experienced growth in most other loan categories during the period.

Total deposits increased $5.5 million, or 3.2%, to $178.1 million at March 31, 2017 from $172.5 million at December 31, 2016.  Certificates of deposit decreased $1.0 million, or 1.3%, to $80.2 million at March 31, 2017 from $81.2 million at December 31, 2016.  In addition, savings accounts increased by $1.8 million and checking/money market accounts increased by $4.8 million during the same period. 

Total stockholders’ equity increased $0.3 million or 0.5% to $52.2 million at March 31, 2017 from $51.9 million at December 31, 2016.  The increase is primarily a result of net income of $0.4 million for the three months ended March 31, 2017, partially off-set by dividends of $0.1 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
March 31, 2017 and December 31, 2016
(Unaudited)
  March 31, December 31,
  2017 2016
Assets    
Cash and due from banks $3,328,141  $3,916,559 
Interest bearing deposits  1,650,426   2,030,090 
Total cash and cash equivalents  4,978,567   5,946,649 
Time deposits  250,000   250,000 
Federal funds sold  2,784,000   1,690,000 
Securities available for sale  43,992,718   44,560,680 
Non-marketable equity securities  753,321   753,321 
Loans, net of allowance for loan losses of $2,183,681 and $2,247,449    
at March 31, 2017 and December 31, 2016, respectively  167,099,818   160,586,129 
Loans held for sale  689,000   305,072 
Premises and equipment, net  6,797,793   6,843,906 
Accrued interest receivable  798,243   785,484 
Foreclosed real estate  -   33,000 
Deferred tax assets  2,395,646   2,593,786 
Cash value of life insurance  2,257,603   2,245,578 
Goodwill  649,869   649,869 
Core deposit intangible  339,455   359,000 
Other assets  2,662,932   2,558,910 
Total assets $236,448,965  $230,161,384 
Liabilities and Stockholders' Equity    
Liabilities    
Deposits:    
Non-interest bearing $11,418,742  $9,974,536 
Interest bearing  166,649,854   162,572,485 
Total deposits  178,068,596   172,547,021 
Accrued interest payable  1,671   224 
FHLB advances  1,122,890   1,121,153 
Other liabilities  4,129,804   3,748,953 
Total liabilities  183,322,961   177,417,351 
Commitments and contingencies    
Redeemable common stock held by ESOP plan  908,749   807,629 
Stockholders' Equity    
Common stock, $.01 par value, 12,000,000 shares authorized; 3,467,402    
shares issued at March 31, 2017 and December 31, 2016, respectively  34,674   34,674 
Additional paid-in-capital  37,134,699   37,117,311 
Retained earnings  17,681,924   17,455,472 
Unallocated ESOP shares  (1,888,144)  (1,932,648)
Accumulated other comprehensive income  162,851   69,224 
   53,126,004   52,744,033 
Less:    
Maximum cash obligation related to ESOP shares  (908,749)  (807,629)
Total stockholders' equity  52,217,255   51,936,404 
Total liabilities and stockholders' equity $236,448,965  $230,161,384 
         


Ottawa Bancorp, Inc. & Subsidiary
Consolidated Statements of Operations
Three Months Ended March 31, 2017 and 2016
(Unaudited)
  March 31,  March 31,
  2017 2016
Interest and dividend income:    
Interest and fees on loans $1,972,750 $1,723,298
Securities:    
Residential mortgage-backed and related securities  135,868  152,077
State and municipal securities  130,629  134,980
Dividends on non-marketable equity securities  1,794  2,190
Interest-bearing deposits  9,321  7,344
Total interest and dividend income  2,250,362  2,019,889
Interest expense:    
Deposits  205,269  202,470
Borrowings  6,996  4,620
Total interest expense  212,265  207,090
Net interest income  2,038,097  1,812,799
Provision for loan losses  90,000  120,000
Net interest income after provision for loan losses    1,948,097  1,692,799
Other income:    
Gain on sale of securities  42  96
Gain on sale of loans  107,093  38,930
Gain on sale of OREO  24,060  65,197
Gain on sale of repossessed assets  3,044  632
Loan origination and servicing income  100,991  58,622
Origination of mortgage servicing rights, net of amortization  15,411  2,130
Customer service fees  115,859  98,271
Income on bank owned life insurance  12,025  12,172
Other  27,965  24,819
Total other income  406,490  300,869
Other expenses:    
Salaries and employee benefits  994,366  827,685
Directors fees  40,800  40,800
Occupancy  163,539  152,078
Deposit insurance premium  13,514  44,223
Legal and professional services  96,158  87,128
Data processing  138,493  135,022
Loan expense  118,323  58,542
Valuation adjustments and expenses on foreclosed real estate  5,462  36,513
Loss on sale of repossessed assets  274  -
Other  245,085  237,756
Total other expenses  1,816,014  1,619,747
Income before income tax expense   538,573  373,921
Income tax expense  181,273  115,015
Net income  $357,300 $258,906
Basic earnings per share $0.11 $0.09
Diluted earnings per share $0.11 $0.09
       


Ottawa Bancorp, Inc. & Subsidiary
Selected Financial Data and Ratios
(Unaudited)
  At March 31,  At December 31,
  2017  2016
          
  (In Thousands, except per share data)
Financial Condition Data:       
Total Assets $236,449  $230,161  
Loans, net (1)  167,100   160,586  
Securities available for sale  43,993   44,561  
Deposits  178,069   172,547  
Stockholders' Equity  52,217   51,936  
Book Value per common share $15.06  $14.98  
(1) Net of loans in process, deferred loan (cost) fees and allowance for loan losses.       
        
  Three Months Ended March 31,
  2017 2016
          
  (In Thousands, except per share data) 
Operations Data:       
Total interest and dividend income $2,250  $2,020  
Total interest expense  212   207  
Net interest income  2,038   1,813  
Provision for loan losses  90   120  
Other income  406   301  
Other expense  1,816   1,620  
Income tax expense (benefit)  181   115  
Net income (loss) $357  $259  
Basic earnings (loss) per share $0.11  $0.09  
Diluted earnings (loss) per share $0.11  $0.09  
Dividends per share $0.04  $-  
        
  At or for the Three Months Ended
  March 31,
  2017 2016
Performance Ratios:       
Return on average assets  0.61% 0.48% 
Return on average stockholders' equity  2.74   3.34  
Average stockholders' equity to average assets  22.45   14.50  
Stockholders' equity to total assets at end of period  22.08   14.33  
Net interest rate spread (1)  3.71   3.64  
Net interest margin (2)  3.82   3.71  
Average interest-earning assets to average interest-bearing liabilities  129.02   115.61  
Other expense to average assets  0.78   0.76  
Efficiency ratio (3)  74.30   76.63  
Dividend payout ratio  36.36   -  
        
        
  At March 31, At December 31,
  2017 2016
          
  (unaudited) 
Regulatory Capital Ratios (4):       
Total risk-based capital (to risk-weighted assets)  26.28% 26.76% 
Tier 1 core capital (to risk-weighted assets)  25.03   25.51  
Common equity Tier 1 (to risk-weighted assets)  25.03   25.51  
Tier 1 leverage (to adjusted total assets)  17.41   16.84  
Asset Quality Ratios:       
Net charge-offs (recoveries) to average gross loans outstanding  0.36   0.27  
Allowance for loan losses to gross loans outstanding  1.26   1.35  
Non-performing loans to gross loans (5)  1.63   3.00  
Non-performing assets to total assets (5)  1.20   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.
 

            

Contact Data