New Jersey Community Bank Reports Fourth Quarter and Full Year Results for 2012

Marketwired

FREEHOLD, NJ--(Marketwire - Jan 23, 2013) - New Jersey Community Bank (OTCBB: NJCB) (the "Bank") reported net income of $140 thousand, or $0.08 per common share for the three months ended December 31, 2012, compared to the fourth quarter 2011 earnings of $138 thousand, or $0.08 per common share. For the year 2012, the Bank reported net income of $361 thousand, or $0.20 per common share compared with a net income of $552 thousand, or $0.30 per common share for the year 2011. The earnings for the year 2012 were negatively impacted by non-interest expense recorded in connection with a settlement with a former executive in the amount of $130 thousand, net of tax effect. Excluding this item, the Bank would have reported earnings of $491 thousand, or $0.27 per common share.

Robert D. O'Donnell, Chairman and CEO commented that, "We are pleased with our fourth quarter and full year 2012 results of operation despite a difficult economic environment. The New Jersey economy, job market and real estate market remain weak according to the latest reports and survey data. We continue to combat the low level of interest rates, which squeezes our margin, and intense competition for new loans. Though our new loan demand has softened somewhat, we continue to remain cautiously optimistic during this uncertain economic environment."

All common share data presented in this press release, including earnings per common share data, were adjusted to reflect a five percent stock dividend issued on May 31, 2012.

Balance Sheet Summary

At December 31, 2012, total assets were $138.7 million, an increase $6.7 million compared to year end 2011. Total cash and cash equivalents totaled $19.3 million, an increase of $4.9 million from year end 2011. Due from banks time deposits increased $1.1 million to $7.8 million from a year ago. Total investment securities decreased $6.2 million to $14.0 million at December 31, 2012 compared with year end 2011 while total loans receivable increased $4.3 million from December 31, 2011. The cash flow resulting from the decrease in investment securities was largely offset by the increases in total loans and due from banks time deposits.

Deposits totaled $122.5 million at December 31, 2012, an increase of $6.1 million from year end 2011. Of the total increase, non-interest bearing, savings, NOW and money market and time deposits over $100M increased $4.0 million, $3.8 million and $2.5 million, respectively, offset by a $4.3 million decrease in all other time deposits. A majority of the increase in total deposits was used to fund the loan growth. Shareholders' equity totaled $15.7 million at December 31, 2012. The Bank's capital ratios remain strong and exceed the regulatory requirements to be deemed a well capitalized financial institution.

Results of Operations

Fourth Quarter 2012
For the quarter ended December 31, 2012, net interest income totaled $1.2 million, an increase of $115 thousand over the same period in the prior year. The increase in net interest income was primarily due to a $37 thousand increase in total interest income coupled with $78 thousand reduction in total interest expense resulting from declining interest rates on deposits despite an increase in average interest-bearing deposits. Net interest margin improved by 33 basis points to 3.75% for the quarter ended December 31, 2012, over the comparable quarter in 2011. Average yield on earning assets was 4.69%, increasing 7 basis points over the prior year and the average rate on interest paying liabilities was 1.11%, dropping 28 basis points over the comparable quarter in the prior year.

The provision for loan loss was $28 thousand for the fourth quarter 2012, a decrease of $7 thousand compared to the year-ago quarter. The allowance for loan loss at period-end was $1.2 million, or 1.31% of total loans. Management continually monitors the adequacy of the allowance for loan loss and considers the current level of the allowance for loan losses to be adequate.

Non-interest income decreased $32 thousand to $95 thousand for the quarter ended December 31, 2012 compared with $127 thousand for the same quarter in the prior year. The majority of the decrease is directly related to a decrease in fees and service charges on deposit accounts.

Non-interest expense totaled $1.0 million for the quarter ended December 31, 2012, an increase of $61 thousand from year-ago quarter, primarily due to increased personnel and employee benefit costs. Of the total increase, salaries and employee benefits increased $89 thousand while all other non-interest expenses combined declined $28 thousand.

Full Year 2012
For the full year ended December 31, 2012, net interest income totaled $4.6 million, increasing $162 thousand over the full prior year. The increase in net interest income was primarily due to declining interest rates on deposits resulting in a reduction in interest paid on deposits. For the year, average interest earning assets increased $7.6 million coupled with an increase of $5.8 million in average interest bearing liabilities, while the yield on interest earning assets declined 30 basis points to 4.63% and the cost of interest bearing liabilities declined 23 basis points to 1.19%. Net interest margin for the year declined 11 basis points to 3.61% over the full year 2011.

The provision for loan loss was $117 thousand for the year, a decrease of $127 thousand compared to prior year, primarily due to stable level of non-performing loans during the year.

Non-interest income totaled $349 thousand for the year 2012 reflecting a decrease of $71 thousand over the full year 2010, primarily resulting from a decline in fees on deposit accounts.

Non-interest expense totaled $4.2 million for the full year 2012, an increase of $531 thousand over prior full year. Of the total increase, salaries and employee benefits, the largest component of non-interest expense, increased $435 thousand primarily due to compensation expense recorded in connection with a settlement with a former executive, addition of personnel and increased health benefit costs. Occupancy and equipment expense increased $82 thousand primarily due to addition of Cranbury branch office. All other operating expenses combined increased a net of $14 thousand primarily due to the overall growth of 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)   12/31/2012     9/30/2012     6/30/2012     3/31/2012     12/31/2011  
                                         
Summary of Operations:                                        
  Interest income   $ 1,501     $ 1,496     $ 1,465     $ 1,459     $ 1,464  
  Interest expense     302       315       323       351       380  
    Net interest income     1,199       1,181       1,142       1,108       1,084  
  Provision for loan and lease loss     27       20       25       45       35  
    Net interest income after provision for loan loss     1,172       1,161       1,117       1,063       1,049  
  Non-interest income     95       75       77       102       127  
  Non-interest expense     1,026       1,223       994       974       964  
    Income before income tax expense     241       13       200       191       212  
  Income tax expense     101       12       88       83       74  
    Net income   $ 140     $ 1     $ 112     $ 108     $ 138  
                                         
Per Common Share(1):                                        
    Basic   $ 0.08     $ 0.00     $ 0.06     $ 0.06     $ 0.08  
    Diluted     0.08       0.00       0.06       0.06       0.08  
  Book value per share     8.64       8.59       8.57       8.47       8.41  
    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     0.42 %     0.00 %     0.34 %     0.32 %     0.43 %
  Return on average common equity     3.56 %     0.03 %     2.90 %     2.81 %     3.62 %
  Average equity to average assets     11.90 %     11.94 %     11.80 %     11.47 %     11.73 %
  Risk-based capital:                                        
    Total risk-based capital ratio     15.71 %     15.81 %     16.15 %     16.67 %     16.39 %
    Tier 1 risk-based capital ratio     14.56 %     14.66 %     14.99 %     15.49 %     15.25 %
    Tier 1 leverage capital ratio     11.61 %     11.60 %     11.50 %     11.16 %     11.41 %
                                         
Financial Condition:                                        
  Total assets   $ 138,678     $ 132,251     $ 131,336     $ 132,176     $ 132,018  
  Loans, net of unearned income     92,157       93,322       90,440       87,794       87,857  
  Deposits     122,536       116,257       115,345       116,385       116,394  
  Shareholder's equity     15,712       15,621       15,587       15,406       15,293  
                                         
(1) Data have been restated to give effect to the 5% stock dividend paid in 2012.             
 
             
New Jersey Community Bank            
Statements of Financial Condition            
(dollars in thousands, except share data)            
    December 31,     December 31,  
    2012     2011  
Assets                
    Cash and due from banks - non-interest bearing   $ 1,138     $ 1,519  
    Federal funds sold and interest-bearing deposits with banks     18,180       12,877  
        Total Cash and Cash Equivalents     19,318       14,396  
    Due from banks - time deposits     7,768       6,671  
    Investment Securities:                
      Available-for-sale     11,092       18,719  
      Held-to-maturity     2,905       1,469  
        Total Investment Securities     13,997       20,188  
    Loans Receivable, net of unearned income     92,157       87,857  
      Less: Allowance for loan losses     (1,207 )     (1,101 )
        Net Loans     90,950       86,756  
    Premises and equipment, net     2,420       2,610  
    Accrued interest receivable     351       363  
    Bank-owned life insurance     1,507       -  
    Deferred tax assets     686       753  
    Other assets     1,681       281  
        Total Assets   $ 138,678     $ 132,018  
                 
Liabilities and Shareholders' Equity                
  Liabilities                
    Deposits:                
      Non-interest bearing   $ 10,073     $ 6,057  
      Savings, NOW and money market     40,357       36,508  
      Time deposits $100M and over     53,025       50,483  
      Time deposits, other     19,081       23,346  
        Total Deposits     122,536       116,394  
                   
    Accrued interest payable     8       15  
    Other liabilities     422       316  
        Total Liabilities     122,966       116,725  
                 
Shareholders' Equity                
    Common stock, $2 par value; authorized 10,000,000 shares; issued and outstanding 1,817,662 and 1,648,783 shares, respectively    
3,635
     
3,462
 
    Surplus     13,854       13,930  
    Accumulated Deficit     (1,786 )     (2,147 )
    Accumulated other comprehensive income (loss)     9       48  
        Total Shareholders' Equity     15,712       15,293  
        Total Liabilities and Shareholders' Equity   $ 138,678     $ 132,018  
                 
                 
New Jersey Community Bank
Statements of Income
(dollars in thousands, except per share data)
                 
    Three Months Ended   Year Ended
    December 31,   December 31,
    2012   2011   2012   2011
Interest Income                        
  Loans receivable, including fees   $ 1,410   $ 1,351   $ 5,494   $ 5,509
  Investment securities     73     94     359     356
  Federal funds sold and interest-bearing deposits with banks     6     8     27     24
  Due from banks - interest bearing     12     11     41     38
    Total Interest Income     1,501     1,464     5,921     5,927
Interest Expense                        
  Deposits     302     380     1,291     1,459
    Net Interest Income before Provision for Loan Loss     1,199     1,084     4,630     4,468
Provision for Loan Loss     27     35     117     244
    Net Interest Income after Provision for Loan Loss     1,172     1,049     4,513     4,224
Non-Interest Income                        
  Fees and service charges on deposit accounts     55     95     253     343
  Loan fee income     3     21     27     41
  Gain on sale of securities     19     -     19     -
  All other income     18     11     50     36
    Total Non-Interest Income     95     127     349     420
Non-Interest Expense                        
  Salaries and employee benefits     578     489     2,542     2,107
  Occupancy and equipment     189     185     765     683
  Data processing services     38     40     154     144
  Professional and other fees     102     119     294     282
  Advertising and promotion     3     9     15     30
  Federal insurance assessment     28     27     113     125
  Other operating expenses     88     95     334     315
    Total Non-Interest Expenses     1,026     964     4,217     3,686
    Income Before Income Tax Expense     241     212     645     958
  Income tax expense     101     74     284     406
Net Income   $ 140   $ 138   $ 361   $ 552
Income per share:                        
  Basic and diluted   $ 0.08   $ 0.08   $ 0.20   $ 0.30
Weighted average number of common shares outstanding                        
  Basic and diluted     1,818     1,818     1,818     1,818
                         
   

New Jersey Community Bank
 
Analysis of Average Balance Sheet and Net Interest Income  
                                 
    For the Year Ended  
    December 31, 2012     December 31, 2011  
    Average         Average     Average         Average  
    Balance     Interest   Rate     Balance     Interest   Rate  
                                         
Interest Earning Assets:                                        
  Loans   $ 90,299     $ 5,494   6.08 %   $ 87,926     $ 5,509   6.27 %
  Investment securities     17,869       359   2.01 %     14,996       356   2.37 %
  Federal funds sold and interest bearing deposits with banks     12,988       27   0.21 %     12,594       24   0.19 %
  Due from banks - interest bearing     6,696       41   0.62 %     4,710       38   0.82 %
      Total interest-earning assets     127,852       5,921   4.63 %     120,226       5,927   4.93 %
                                               
Allowance for loan loss     (1,156 )                 (1,093 )            
Cash and due from banks - non-interest bearing     1,274                   1,288              
All other assets     4,048                   4,231              
      Total assets   $ 132,018                 $ 124,652              
                                         
Interest Bearing Liabilities:                                        
  Deposits:                                        
    Savings, NOW and money market   $ 39,633       293   0.74 %   $ 31,972       343   1.07 %
    Time deposits under $100M     21,439       345   1.61 %     22,797       386   1.69 %
    Time deposits $100M and over     47,760       653   1.37 %     48,264       730   1.51 %
      Total deposits     108,832       1,291   1.19 %     103,033       1,459   1.42 %
                                         
Demand     7,228                   6,334              
Other liabilities     411                   293              
      Total liabilities     116,471                   109,660              
                                         
Stockholders' equity     15,547                   14,992              
      Total liabilities & stockholders' equity   $ 132,018                 $ 124,652              
Net interest income           $ 4,630                 $ 4,468      
Average interest rate spread                 3.44 %                 3.51 %
Net interest margin                 3.61 %                 3.72 %
                                         
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

New Jersey Community Bank
3441 Route Nine North
Freehold, New Jersey 07728
(732) 431-2265 Fax (732) 303-1831
www.njcbk.com

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