New Jersey Community Bank Reports First Quarter 2013 Results

Marketwired

FREEHOLD, NJ--(Marketwired - Apr 17, 2013) - New Jersey Community Bank (OTCQB: NJCB) (the "Bank") reported net income of $90 thousand, or $0.05 per common share for the three months ended March 31, 2013, compared with a net income of $108 thousand, or $0.06 per common share, for the same period in the prior year. Although the net interest income increased $34 thousand year over year but it was more than offset by an increase of $56 thousand in total non-interest expense. Net interest margin increased 14 basis points year over year largely due to a decline of 29 basis points in cost of interest-bearing liabilities.

Robert D. O'Donnell, Chairman and CEO, commented that, "We are pleased with the first quarter 2013 results during this continued market volatility and depressed interest rates. Recent months have brought some encouraging news on the employment and market fronts but the banking industry continues to reflect the impact of prolonged low interest rates. Our first quarter results reflect a decline in total assets which was driven primarily by our business decision to reduce the excess cash levels by paying off certain deposits that matured during the first quarter 2013. Though the new loan demand has softened, we continue to seek lending opportunities while focusing on safe and sound lending practices."

Balance Sheet Summary

At March 31, 2013, total assets were $130.9 million, a decline of $7.8 million from December 31, 2012. Total cash and cash equivalents declined $7.8 million compared to year end 2012, offsetting a similar decline in total deposits. Investment securities increased $1.4 million while loans receivable decreased $1.4 million compared to year end 2012. The decrease in loans receivables was a result of payoff of few loans and ongoing scheduled principal payments.

Total deposits decreased $7.9 million compared to the levels at year end 2012. Majority of the decrease resulted from the maturing time deposits which were paid off utilizing the excess levels of cash and cash equivalents during the first quarter of 2013. During the quarter, savings, NOW and money market deposits combined increased $1.5 million while non-interest bearing deposits declined by the same amount.

Shareholders' equity totaled $15.8 million at March 31, 2013, increasing moderately from year-end 2012. The Bank's capital ratios remain strong and exceed the regulatory requirements to be deemed a well capitalized financial institution.

Results of Operations

For the quarter ended March 31, 2013, net interest income totaled $1.1 million, increasing marginally over the same period in the prior year. At March 31, 2013, net interest margin was 3.56%, an improvement of 14 basis points compared to the same period a year ago resulting from a decrease in cost of interest-bearing deposits. At March 31, 2013, yield on average earning assets declined 12 basis points to 4.39% while the cost of interest-bearing deposits declined 29 basis points to 0.97%, compared to the same period in the prior year primarily due to low interest rates.

The provision for loan loss was $35 thousand for the first quarter 2013, a decrease of $10 thousand compared to a year-ago quarter. The allowance for loan loss at period-end was $1.2 million, or 1.36% of total loans. Asset quality remains resilient and the current level of the allowance for loan loss is considered to be adequate.

Non-interest income decreased $17 thousand to $86 thousand for the quarter ended March 31, 2013, compared with $103 thousand for the same quarter in the prior year. Majority of such decrease is directly related to the decrease in fees and service charges on deposit accounts offset by an increase of $14 thousand in all other income.

Non-interest expense totaled $1.0 million for the quarter ended March 31, 2013, an increase of $56 thousand, from a year-ago quarter. Of the total increase in non-interest expense, salaries and employee benefits increased $29 thousand as a result of increases in health costs and professional and other fees increased $21 thousand due to increase in cost of professional services utilized by the Bank.

About the Bank
New Jersey Community Bank is a state-chartered commercial bank headquartered in Freehold, New Jersey. The Bank opened for business in July 2008 and operates three full-service banking offices in the central New Jersey counties of Monmouth and Middlesex. The Bank provides traditional commercial and retail banking services to small businesses and consumers. For additional information about New Jersey Community Bank, please visit www.njcbk.com or call 732-431-2265.

Forward-Looking Statements
This release contains forward-looking statements relating to present or future trends or factors affecting the banking industry, and specifically the financial condition and results of operations, including without limitation, statements relating to the earnings outlook of the Bank, as well as its operations, markets and products. Actual results could differ materially from those indicated. Among the important factors that could cause results to differ materially are interest rate changes, change in economic climate, which could materially impact credit quality trends and the ability to generate loans, changes in the mix of the Bank's business, competitive pressures, changes in accounting, tax or regulatory practices or requirements, resolution of tax reviews, and those risk factors detailed in the Bank's periodic reports. The Bank undertakes no obligation to release revisions to these forward-looking statements or reflect events or circumstances after the date of this release.

                 
                 
New Jersey Community Bank           
Selected Financial Highlights            
(unaudited)              
           
  As of or for the Quarters Ended
(in thousands, except per share and percentage data) 3/31/2013   12/31/2012   9/30/2012   6/30/2012   3/31/2012
                             
Summary of Operations:                            
  Interest income $ 1,409   $ 1,501   $ 1,496   $ 1,465   $ 1,459
  Interest expense   267     302     315     323     351
    Net interest income   1,142     1,199     1,181     1,142     1,108
  Provision for loan and lease loss   35     27     20     25     45
    Net interest income after provision for loan loss   1,107     1,172     1,161     1,117     1,063
  Non-interest income   86     95     75     77     102
  Non-interest expense   1,031     1,026     1,223     994     974
    Income before income tax expense   161     241     13     200     191
  Income tax expense   72     101     12     88     83
    Net income $ 90   $ 140   $ 1   $ 112   $ 108
                             
Per Common Share(1):                            
    Basic $ 0.05   $ 0.08   $ 0.00   $ 0.06   $ 0.06
    Diluted   0.05     0.08     0.00     0.06     0.06
  Book value per share   8.72     8.64     8.59     8.57     8.47
  Average shares outstanding   1,818     1,818     1,818     1,818     1,818
  Average diluted shares outstanding   1,818     1,818     1,818     1,818     1,818
                             
Selected Financial Ratios:                            
  Return on average assets   0.26%     0.42%     0.00%     0.34%     0.32%
  Return on average common equity   2.27%     3.56%     0.03%     2.90%     2.81%
  Average equity to average assets   11.65%     11.90%     11.94%     11.80%     11.47%
  Risk-based capital:                            
    Total risk-based capital ratio   16.20%     15.71%     15.81%     16.15%     16.67%
    Tier 1 risk-based capital ratio   15.00%     14.58%     14.66%     14.99%     15.49%
    Tier 1 leverage capital ratio   11.38%     11.61%     11.60%     11.50%     11.16%
                             
Financial Condition:                            
  Total assets $ 130,946   $ 138,678   $ 132,251   $ 131,336   $ 132,176
  Loans, net of unearned income   90,736     92,157     93,322     90,440     87,794
  Deposits   114,614     122,536     116,257     115,345     116,385
  Shareholder's equity   15,848     15,712     15,621     15,587     15,406
                             
(1) Data have been restated to give effect to the 5% stock dividend declared and paid in 2012.      
             
             
             
New Jersey Community Bank          
Statements of Financial Condition          
(dollars in thousands, except share data)          
  March 31,     December 31,  
  2013     2012  
Assets   (unaudited)          
  Cash and due from banks - non-interest bearing $ 1,402     $ 1,138  
  Federal funds sold and interest-bearing deposits with banks   10,075       18,180  
        Total Cash and Cash Equivalents   11,477       19,318  
  Due from banks - time deposits   9,262       7,768  
  Investment Securities:              
    Available-for-sale   12,546       11,092  
    Held-to-maturity   2,899       2,905  
        Total Investment Securities   15,445       13,997  
  Loans Receivable, net of unearned income   90,736       92,157  
    Less: Allowance for loan losses   (1,235 )     (1,207 )
        Net Loans   89,501       90,950  
  Premises and equipment, net   2,379       2,420  
  Accrued interest receivable   328       351  
  Bank-owned life insurance   1,519       1,507  
  Deferred tax assets   692       686  
  Other assets   343       1,681  
        Total Assets $ 130,946     $ 138,678  
               
Liabilities and Shareholders' Equity              
  Liabilities              
    Deposits:              
      Non-interest bearing $ 8,557     $ 10,073  
      Savings, NOW and money market   41,836       40,357  
      Time deposits $100M and over   46,434       53,025  
      Time deposits, other   17,786       19,081  
        Total Deposits   114,614       122,536  
               
    Accrued interest payable   10       8  
    Other liabilities   474       422  
        Total Liabilities   115,098       122,966  
               
  Shareholders' Equity              
    Common stock, $2 par value; authorized 10,000,000 shares; issued and outstanding 1,817,662 and 1,817,662 shares, respectively   3,635      
 3,635
 
    Surplus   13,879       13,854  
    Accumulated Deficit   (1,696 )     (1,786 )
    Accumulated other comprehensive income (loss)   30       9  
        Total Shareholders' Equity   15,848       15,712  
        Total Liabilities and Shareholders' Equity $ 130,946     $ 138,678  
               
               
               
New Jersey Community Bank      
Statements of Income      
(dollars in thousands, except per share data)
(unaudited)
     
       
  Three Months Ended
  March 31,
  2013   2012
Interest Income          
  Loans receivable, including fees $ 1,324   $ 1,339
  Investment securities   64     101
  Federal funds sold and interest-bearing deposits with banks   9     8
  Due from banks - interest bearing   12     11
      Total Interest Income   1,409     1,459
Interest Expense          
  Deposits   267     351
      Net Interest Income before Provision for Loan Loss   1,142     1,108
Provision for Loan Loss   35     45
      Net Interest Income after Provision for Loan Loss   1,107     1,063
Non-Interest Income          
  Fees and service charges on deposit accounts   59     90
  Loan fee income   3     3
  All other income   24     10
      Total Non-Interest Income   86     103
Non-Interest Expense          
  Salaries and employee benefits   593     564
  Occupancy and equipment   185     190
  Data processing services   43     40
  Professional and other fees   86     65
  Advertising and promotion   6     12
  Federal insurance assessment   29     29
  Other operating expenses   89     75
      Total Non-Interest Expenses   1,031     975
      Income Before Income Tax Expense   162     191
  Income tax expense   72     83
Net Income $ 90   $ 108
Income per share:          
  Basic and diluted $ 0.05   $ 0.06
Weighted average number of common shares outstanding          
  Basic and diluted   1,818     1,818
             
             
             
New Jersey Community Bank            
Analysis of Average Balance Sheet and Net Interest Income            
                               
  For the Three Months Ended  
  March 31, 2013     March 31, 2012  
  Average         Average     Average         Average  
  Balance     Interest   Rate     Balance     Interest   Rate  
                                       
Interest Earning Assets:                                      
  Loans $ 91,315     $ 1,324   5.88 %   $ 87,851     $ 1,339   6.13 %
  Investment securities   13,991       64   1.83 %     19,703       101   2.05 %
  Federal funds sold and interest-bearing deposits with banks   16,485       9   0.22 %     15,747       8   0.20 %
  Due from banks - time deposits   8,155       12   0.60 %     6,783       11   0.65 %
      Total interest-earning assets   129,946       1,408   4.39 %     130,084       1,459   4.51 %
  Allowance for loan loss   (1,214 )                 (1,115 )            
  Cash and due from banks - non-interest bearing   1,305                   1,356              
  All other assets   5,485                   3,927              
      Total assets $ 135,522                 $ 134,252              
                                       
Interest Bearing Liabilities:                                      
  Deposits:                                      
    Savings, NOW and money market $ 42,201       54   0.52 %   $ 40,363       82   0.81 %
    Time deposits $100M and over   50,629       145   1.16 %     48,855       178   1.47 %
    Time deposits, other   18,434       68   1.50 %     22,734       91   1.61 %
      Total interest-bearing deposits   111,264       267   0.97 %     111,952       351   1.26 %
                                       
Demand   7,985                   6,511              
Other liabilities   482                   396              
      Total liabilities   119,731                   118,859              
                                       
Stockholders' equity   15,791                   15,393              
Total liabilities & stockholders' equity $ 135,522                 $ 134,252              
Net interest income         $ 1,142                 $ 1,108      
                                       
Average interest rate spread               3.42 %                 3.25 %
                                       
Net interest margin               3.56 %                 3.42 %
                                       
Contact:
Contacts at New Jersey Community Bank:

Robert D. O'Donnell
Chairman and CEO
rodonnell@njcbk.com

Terry H. Thompson
President and COO
tthompson@njcbk.com

Naqi A. Naqvi
Executive Vice President & CFO
nnaqvi@njcbk.com
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