Stewardship Financial Corporation
Stewardship Financial — IPO Roadshow (April 2017)
21 slides from Stewardship Financial's IPO roadshow presentation, Apr 4, 2017
Slide 1: Common Stock Offering April 2017
NASDAQ: SSFN Common Stock Offering April 2017 Issuer Free Writing Prospectus Dated April 3, 2017 Filed Pursuant to Rule 433 Registration Statement No. 333-216878
Slide 2: Safe Harbor
2 Safe Harbor This presentation has been prepared by Stewardship Financial Corporation (“SSFN” or the “Corporation”) solely for informational purposes based on its own information, as well as information from public sources. This presentation has been prepared to assist interested parties in making
Slide 3: Terms of Proposed Offering
3 Terms of Proposed Offering 1) Market data as of April 3, 2017. Market capitalization based on 6,132,774 shares outstanding Market Data¹ Issuer Offering Size Purchase Option Lock-up Use of Proceeds Sole Book-Running Manager Exchange / Symbol Stewardship Financial Corporation Offering Structure Divi
Slide 4: Management biographies
4 Name Biography Paul Van Ostenbridge, 64 President & CEO Paul Van Ostenbridge has been a Director of Stewardship Financial Corporation since 1997 and has served as President and Chief Executive Officer of the Corporation since 1997. Mr. Van Ostenbridge has been a Director of Atlantic Stewardship Ba
Slide 5: Overview of Stewardship Financial Corporation
5 Overview of Stewardship Financial Corporation • New Jersey bank holding company with one bank, Atlantic Stewardship Bank (the “Bank”), with commercial lending expertise in Bergen, Morris and Passaic counties • Commitment to core principles exemplified by its unique Tithing Program, or charitable g
Slide 6: Unique Mission
6 Unique Mission • At the time of formation of the Bank in 1985, the Bank’s Board adopted, as a component of its mission statement, a tithing mission which was incorporated into the Bank’s By-Laws and later, at the time of the holding company restructuring, into the By-Laws of the Corporation • Tith
Slide 7: Recent Developments
7 Recent Developments • Since resolving credit issues arising from the financial crisis, SSFN has demonstrated strong growth in loan originations and is well-positioned to capitalize on its favorable market demographics • The recent adoption of scalable mobile and online banking service technologies
Slide 8: Well-Positioned in Growth Markets
8 Well-Positioned in Growth Markets 1) Projected changes from 2017 to 2022 Note: Deposit ranking data as of 6/30/2016 Source: SNL Financial, FDIC, Nielsen Passaic County Branches: 4 Median Household Income: $63,674 Projected HHI Growth¹: 7.28% Projected Population Growth¹: 1.88% Morris County Branch
Slide 9: Attractive New Jersey Markets
9 Attractive New Jersey Markets 1) U.S. Census Bureau, 2015 American Community Survey 1-Year Estimates 2) Bureau of Economic Analysis as of 2015 year-end, in current dollars 3) Bureau of Labor Statistics preliminary data as of January 2017, not seasonally adjusted 4) Bureau of Labor Statistics preli
Slide 10: Growth Profile
10 $207 $197 $184 $157 $154 30.0% 29.2% 26.5% 21.8% 19.4% 0% 5% 10% 15% 20% 25% 30% 35% 40% $0 $50 $100 $150 $200 $250 2012 2013 2014 2015 2016 $440 $434 $477 $526 $604 74.6% 75.2% 85.8% 87.0% 91.6% 50% 55% 60% 65% 70% 75% 80% 85% 90% 95% 10% $0 $100 $200 $300 $400 $500 $600 $700 2012 2013 2014 2015
Slide 11: Profitability
11 $13.5 $19.0 $21.8 $23.2 $23.9 2012 2013 2014 2015 2016 $0.03 $0.31 $0.40 $0.62 $0.78 2012 2013 2014 2015 2016 0.07% 0.36% 0.46% 0.60% 0.63% 2012 2013 2014 2015 2016 Profitability ROAA ROAE Net Interest Income After Provision Expense ($mm) EPS 0.89% 4.45% 5.45% 7.50% 9.43% 2012 2013 2014 2015 2016
Slide 12: Diligent Cost Management
12 Diligent Cost Management 80.2% 77.7% 79.1% 77.2% 78.7% 74.1% 77.5% 72.8% 2.92% 2.95% 2.89% 2.70% 2.71% 2.71% 2.63% 2.56% 2.30% 2.40% 2.50% 2.60% 2.70% 2.80% 2.90% 3.00% 70. 0% 72. 0% 74. 0% 76. 0% 78. 0% 80. 0% '15 Q1 '15 Q2 '15 Q3 '15 Q4 '16 Q1 '16 Q2 '16 Q3 '16 Q4 Efficiency Ratio Noninterest E
Slide 13: Loan Composition Trends
13 Loan Composition Trends 20.3% 17.0% 15.9% 12.3% 13.6% 55.1% 58.3% 59.9% 63.5% 63.3% 2.1% 0.8% 0.9% 0.9% 2.5% 15.3% 17.9% 16.3% 15.8% 14.0% 7.2% 6.0% 5.9% 5.7% 5.0% 1.0% 1.8% 1.6% 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% 90.0% 100.0% 2012 2013 2014 2015 2016 Commercial Commercial Real
Slide 14: Continue to Grow Commercial Loans
14 Continue to Grow Commercial Loans • Rigorous underwriting and approval processes • Appropriately staffed Credit Department and Loan Administration • Substantial pipeline of approved loans • Introduction of loan production office model • Attract and retain talent • Lending “sweet spot” = $3.0 mill
Slide 15: Asset Quality Trends
15 4.32% 2.46% 1.03% 0.52% 0.17% 2012 2013 2014 2015 2016 Asset Quality Trends 1) Nonperforming assets include nonaccrual loans, real estate owned and repossessed assets (excludes performing restructured loans and loans past due 90 days and accruing interest) 2) NPLs exclude performing TDRs NPAs¹ /
Slide 16: Commitment to Strong Credit Culture
16 Commitment to Strong Credit Culture • Significantly improved asset quality metrics – NPAs / Assets + OREO of 4.32% at year-end 2012 has been reduced to 0.17% at year-end 2016 – Just three non-accrual loans as of December 31, 2016 (two consumer loans, one commercial loan) • Strong credit standards
Slide 17: Securities portfolio
17 Available-for-Sale Amortized Fair (Dollars in thousands) Cost Gain Loss Value U.S. Gov't-Sponsored Agencies 17,789$ 61$ 405$ 17,445$ States and Pol i tica l Subdivis ions 3,238 - 142 3,096 Mortgage-Backed Securi ties 52,785 150 889 52,046 Asset-backed Securi ties ¹ 8,392 - 125 8,267 Corporate Deb
Slide 18: Stable, Low Cost Deposit Base
18 • SSFN’s local deposit relationships provide low cost, core deposits in its surrounding markets – #1 deposit market share rank in Midland Park, NJ • Relationship and customer experience driven - community bank vs. big bank • 9% year-over-year deposit growth in 2016 • Competitive electronic and mo
Slide 19: Capital Overview
19 Capital Overview Both the Corporation and the Bank have consistently maintained regulatory capital ratios significantly above the federal “well capitalized” standards Bank Consolidated Tier 1 Leverage Tier 1 RBC Total RBC 12/31/2014 9.20% 12.69% 13.95% 12/31/2015 9.47% 12.41% 13.67% 12/31/2016 9.
Slide 20: SSFN Total Return Comparison
20 SSFN Total Return Comparison Source: SNL Financial 53.3% 45.2% (10%) 0% 10% 20% 30% 40% 50% 60% 70% 80% 04/01/16 06/01/16 08/01/16 10/01/16 12/01/16 02/01/17 04/01/17 SSFN SNL U.S. Bank $500M-$1B 86.4% 69.0% (36%) (18%) 0% 18% 36% 54% 72 90 108 126 04/03/14 07/03/14 10/03/14 01/03/15 04/03/15 07/
Slide 21: Investment highlights
21 Management 1 Market 2 Asset Quality 3 Consistent Profitability 4 Stable Core Deposit Base 5 • Tenured management team has developed strong local relationships in the community. Management team has an average of 16 years of experience with the Corporation and 41 years of combined service between t