Malvern Bancorp, Inc., holding company for Malvern Federal Savings Bank, one of Chester County’s largest and oldest banks, reported a mixed financial picture on May 9.

The bank, founded in 1887 and based in Paoli, announced a net loss of $426,000 or $0.07 per share for the quarter ending March 31, 2014 – compared to a net loss of $845,000 or $0.13 per share for the quarter ending March 31, 2013. However, the company reported a net loss of $362,000, or $0.06 per share, for the six months ending March 31, 2014 compared to a net loss of $174,000, or $0.03 per share, for the six months ending March 31, 2013.

The company’s net interest income for the three and six months ending March 31, 2014 was $3.8 million and $7.7 million, respectively, an increase of $193,000 and $25,000, respectively, compared to those periods last year.

The company’s interest and dividend income decreased for the three month period ending March 31, 2014 by $384,000 (7 percent) to $5.1 million over that period in fiscal 2013. The decrease was due primarily to a $556,000 (11.1) percent decrease in interest income earned on loans. This decrease was partially offset by an $180,000 (42.6) percent increase in interest income on investment securities.

The company’s interest and dividend income decreased for the six-month period ending March 31, 2014 by $1.2 million (10.2) percent, over the comparable fiscal 2013 period to $10.2 million. The decrease was due primarily to a $1.6 million (14.8) percent decrease in interest income earned on loans.

The company’s interest expense for the three month period ended March 31, 2014 was $1.3 million, a decrease of $577,000 from the three month period ending March 31, 2013. The reason for the decrease in interest expense in the second quarter of fiscal 2014 compared to the second quarter of fiscal 2013 was a 22-basis point decrease in average rate paid on total deposits together with a decrease in the average balance of total deposits of $65.1 million (12.8) percent, due primarily to a $59.9 million decrease in the average balance of certificates of deposit.

The bank saw an increase in professional fees primarily due to the search for a new president and chief executive officer. An increase in employees caused a hike in salaries and employee benefits. In January Ronald Anderson, president and chief executive officer, resigned. Members of the company’s senior executive team are handling his responsibilities in the management transition.

The Company’s total assets decreased $17.0 million (2.8 percent) to $584.6 million on March 31, 2014 compared to $601.6 million on Sept. 30, 2013. The decrease was due primarily to a $10.4 million decrease in loans held for sale, a decrease of $9.4 million in cash and cash equivalents, a $2.5 million decrease in investment securities and $1.6 million reduction in other real estate owned. These decreases were partially offset by a $7.2 million increase in net loans receivable.

The company’s total liabilities on March 31, 2014, were $509.3 million compared to $526.1 million on Sept. 30, 2013. The $16.9 million (3.2 percent) decrease in total liabilities was due primarily to a $25.9 million decrease in interest bearing deposits. Total deposits were $458.7 million on March 31, 2014 compared to $484.6 million on Sept. 30, 2013.

Shareholder equity decreased by $137,000 to $75.3 million at March 31, 2014 compared to $75.4 million on Sept. 30, 2013. The decrease was due primarily to a net loss of $362,000 during the first six months of fiscal 2014 which decreased retained earnings to $19.4 million on March 31, 2014. The decrease was partially offset by a $141,000 reduction in accumulated other comprehensive loss. The ratio of equity to assets was 12.88 percent on March 31, 2014.

Links: www.malvernfederal.com