MFLR Mayflower Bancorp, Inc. (MM)

MIDDLEBORO, Mass., Oct. 18, 2012 /PRNewswire/ -- Mayflower Bancorp, Inc. (NASDAQ Global Market: MFLR), the holding company for Mayflower Bank, today reported net income of $375,000 or $0.18 per share for the quarter ended September 30, 2012, compared to earnings of $293,000 or $0.14 per share for the quarter ended October 31, 2011.  Diluted earnings per share were $0.18 and $0.14, respectively. 

For the six months ended September 30, 2012, net income was $764,000 or $0.37 per share, compared to earnings of $652,000 or $0.31 per share for the six months ended October 31, 2011.  On a diluted per share basis, earnings for the six months were $0.37 and $0.31, 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 six month periods ended September 30, 2012, as compared to the three and six month periods ended October 31, 2011. 

Net interest income was $2,008,000 for the quarter ended September 30, 2012, compared to $2,095,000 for the quarter ended October 31, 2011.  The net interest margin decreased, from 3.66% for the quarter ended October 31, 2011 to 3.45% for the quarter ended September 30, 2012.  Average interest-earning assets increased from $229.0 million for the quarter ended October 31, 2011 to $232.6 million for the quarter ended September 30, 2012 and average interest-bearing liabilities grew from $225.8 million at October 31, 2011 to $226.6 million at September 30, 2012.    

Non-interest income increased by $170,000 for the quarter ended September 30, 2012 as compared to the quarter ended October 31, 2011.  This increase was primarily due to an increase of $159,000 in gain on sales of residential mortgage loans.  Additionally, loan origination and other loan fees increased by $14,000, interchange income increased by $7,000 and other income increased by $10,000.  These increases were offset by a decrease of $16,000 in customer service fees due to reduced overdraft charges, while gains realized upon the sale of investment securities decreased by $4,000.

Total non-interest expense decreased by $26,000 or 1.3% for the quarter ended September 30, 2012.  This decrease was primarily a result of a decrease of $10,000 in compensation and fringe benefit expense, a decrease of $20,000 in occupancy and equipment expense, and a decrease of $13,000 in losses and expenses in regard to other real estate owned.  These decreases were partially offset by an increase of $1,000 in FDIC assessment expense and an increase of $16,000 in other expenses.   

The provision for loan losses was $20,000 for the quarter ended September 30, 2012, as compared to $50,000 for the quarter ended October 31, 2011, a decrease of $30,000.  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 six months ended September 30, 2012, net interest income was $4.1 million, a decrease of $130,000 compared to the six months ended October 31, 2011.  This can be attributed to a decrease in the Company's net interest margin, which declined from 3.62% for the six months ended October 31, 2011 to 3.49% for six months ended September 30, 2012.  Average interest earning assets for the six months ended September 30, 2012 were $234.0 million as compared to $232.8 million for the six months ended October 31, 2011 and average interest bearing liabilities were $228.6 million at September 30, 2012, compared to $230.3 million at October 31, 2011. 

For the six months ended September 30, 2012, non interest income increased by $231,000, as compared to the six months ended October 31, 2011, primarily due to an increase of $243,000 in gains on sales of residential first mortgages, as offset by a decrease of $15,000 in gains on sales of investments.  Additionally, loan origination and other loan fees increased by $9,000, debit card interchange income increased by $11,000, and other income increased by $15,000.  These increases were partially offset by a decrease of $32,000 in customer service fees.    

Total operating expenses decreased by $6,000 to $3.9 million for the six months ended September 30, 2012.  This decrease was comprised of a decrease of $12,000 in occupancy and equipment expense, a decrease of $14,000 in FDIC assessment expense, and a decrease of $12,000 in losses and expenses of other real estate owned.  These decreases were partially offset by an increase of $25,000 in salary and benefit expense and an increase of $7,000 in other expenses. 

The provision for loan losses for the six-month period ended September 30, 2012 was $30,000, compared to $107,000 for the six months ended October 31, 2011.  The allowance for loan loss as a percentage for net loans was 0.89% at September 30, 2012, compared to 0.91% at March 31, 2012. 

Since March 31, 2012, total assets of the Company have decreased by $127,000, ending at $251.4 million as of September 30, 2012.  During the period, total investment securities decreased by $2.3 million while net loans receivable decreased by $706,000.  This reduction in loans receivable was primarily due to a reduction of $1.7 million in home equity loans and lines of credit, a decrease of $1.0 million in commercial loans and mortgages, and a decrease of $173,000 in consumer loans.  These decreases were offset by an increase of $1.8 million in residential mortgage balances and an increase of $324,000 in net construction loans outstanding.    

During the quarter ended September 30, 2012, total deposits decreased by $539,000.  This decrease is comprised of a reduction of $4.1 million in certificate of deposit balances, as offset by an increase of $3.5 million in aggregate checking and savings account balances.  Advances and borrowings outstanding remained constant at $1.0 million.

As of September 30, 2012, non-performing assets totaled $437,000, compared to $506,000 at March 31, 2012.  The decrease from March 31, 2012 is the result of a decrease of $189,000 in non-performing loans, offset by an increase of $120,000 in real estate acquired by foreclosure.  The allowance for loan losses as a percentage of non-performing loans was 970.7% at September 30, 2012, compared to 390.1% at March 31, 2012. 

Total stockholders' equity stood at $22.5 million at September 30, 2012, compared to $21.9 million at March 31, 2012.  Tier 1 capital to average assets stood at 8.6% at September 30, 2012, compared to 8.4% at March 31, 2012.  The increase in total equity is the result of net income for the period of $764,000, stock-based compensation credits of $74,000, and an increase of $110,000 in the net unrealized gain on securities available-for-sale.  A $0.12 dividend per share totaling $248,000 and Company stock repurchases totaling $65,000 partially offset these increases in total equity.

In conjunction with these announcements, the Company also reported that its Board of Directors has declared a quarterly cash dividend of $0.06 per share to be payable on November 8, 2012, to shareholders of record as of November 1, 2012.

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.