MW Bancorp, Inc. (OTC:MWBC), the parent company of Watch Hill Bank (the “Bank”), today reported net income of $73,000, or $0.09 per diluted share, for the three months ended September 30, 2016. Net income increased by $26,000, or 55.3%, compared to net income of $47,000, or $0.06 per share, for the three months ended September 30, 2015.
The increase in net income for the three months ended September 30, 2016, compared to the same quarter ended September 30, 2015, was due primarily to increases of $107,000 in net interest income and $79,000 in non-interest income, which were partially offset by a $136,000 increase in non-interest expense and a $29,000 increase in federal income taxes. Interest income increased $101,000, or 10.5%, for the three months ended September 30, 2016, compared to the three months ended September 30, 2015, primarily due to a $113,000 increase in interest on loans, as a result of an $11.2 million, or 12.0%, increase in the average balance of loans outstanding. Total interest expense decreased $6,000, or 2.1%, for the three months ended September 30, 2016, compared to the three months ended September 30, 2015, due primarily to a decrease in interest expense on deposits of $13,000, or 6.3%. Non-interest income increased $79,000, or 101.3%, for the three months ended September 30, 2016 over the three months ended September 30, 2015, solely due to a $79,000 increase in gain on sale of loans. Non-interest expense increased $136,000, or 19.4%, for the three months ended September 30, 2016 compared to the three months ended September 30, 2015. This increase was primarily due to increases of $64,000, or 16.7%, in salaries, employee benefits and directors fees expense, as the Company increased staffing levels and stock-based compensation, $28,000, or 73.7%, in occupancy and equipment expense, due primarily to costs associated with the Company’s new office location which opened in September 2015, and $28,000,or 84.9%, in data processing, along with additional costs related to the Company’s overall growth and public reporting requirements.
The Company reported total assets of $124.2 million at September 30, 2016, an increase of $5.2 million, or 4.4%, over June 30, 2016. Total loans, including loans held for sale, increased by 7.3% to $109.1 million; total deposits increased by 1.6% to $78.5 million; and stockholders’ equity decreased by 0.1% to $16.1 million at September 30, 2016 compared to June 30, 2016.
Total nonperforming loans were $1.2 million at both September 30, 2016 and June 30, 2016. Classified loans totaled $1.4 million at September 30, 2016, compared to $1.5 million at June 30, 2016, and total loans past due greater than 30 days were $676,000 and $601,000 at those respective dates. The Company had net charge-offs totaling $3,000 for the three months ended September 30, 2016, compared to net recoveries of $3,000 for the three months ended September 30, 2015. As a percentage of nonperforming loans, the allowance for loan losses was 137.9% at September 30, 2016, compared to 135.2% at June 30, 2016.
The Company was formed in 2014 to serve as the stock holding company for the Bank following its mutual-to-stock conversion, which was completed effective January 29, 2015. The Company issued 876,163 shares at an offering price of $10.00 per share. Proceeds of the offering, net of offering costs and shares acquired by the ESOP, totaled $6.7 million. In May 2016, the Company repurchased 20,000 shares of its common stock pursuant to its previously announced stock repurchase program.