New Jersey Community Bank Reports Second Quarter 2013 Results

Marketwired

FREEHOLD, NJ--(Marketwired - Jul 18, 2013) - New Jersey Community Bank (OTCQB: NJCB) (the "Bank") reported net income of $113 thousand, or $0.06 per common share for the three months ended June 30, 2013, almost unchanged compared to the second quarter 2012 earnings of $112 thousand, or $0.05 per common share. For the first six months of 2013, the Bank reported net income of $204 thousand, or $0.11 per common share compared with a net income of $220 thousand, or $0.12 per common share for the same period in the prior year.

Robert D. O'Donnell, Chairman and CEO, commented that, "Our second quarter earnings benefitted from margin expansion compared to the linked quarter as well as the same quarter a year ago, despite an ultra-competitive environment. We were challenged this quarter by the level of loan payoffs which dampened the new loan growth. We continue to maintain conservative credit discipline and concentrate on closing the approved loans in our pipeline. Expense management remains a key focus as we continue to seek out additional efficiencies within our operations."

All common share data presented in this press release including earnings per common share data was adjusted to reflect a five percent stock dividend issued on May 31, 2013.

Balance Sheet Summary

At June 30, 2013, total assets were $130.9 million, a decline of $7.8 million from December 31, 2012. Total cash and cash equivalents declined $10.5 million compared to year end 2012, majority of which was offset by a decline in total deposits. Investment securities increased $2.4 million while loans receivable decreased $0.6 million compared to year end 2012. The decrease in loans receivables was a result of 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 six months of 2013. Savings, NOW and money market deposits combined increased $4.1 million while non-interest bearing deposits declined $0.8 million compared to the levels reported at year-end 2013.

Shareholders' equity totaled $15.8 million at June 30, 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 June 30, 2013, net interest income totaled $1.2 million, an increase of $66 thousand over the same period in the prior year. The increase in net interest income was primarily due to declining interest rates on interest-bearing deposits. Net interest margin increased 55 basis points to 3.97% for the quarter ended June 30, 2013, over the comparable quarter in 2012. Average yield on earning assets was 4.72%, increasing 9 basis points over the prior year and average rate on paying liabilities was 0.88%, dropping 95 basis points over the comparable quarter in the prior year.

The provision for loan loss was $55 thousand for the second quarter 2013, an increase of $30 thousand compared to the year-ago quarter. The allowance for loan loss at period-end was $1.3 million, or 1.41% of total loans. Mr. O'Donnell noted, "We monitor the adequacy of the allowance for loan loss on an ongoing basis and consider the current level of the allowance for loan loss to be adequate."

Non-interest income increased $41 thousand to $118 thousand for the quarter ended June 30, 2013 compared with $77 thousand for the same quarter in the prior year. Majority of the increase in non-interest income resulted from increase in cash surrender value of bank-owned life insurance and gain on sale of investment securities available for sale.

Non-interest expense totaled $1.1 million for the quarter ended June 30, 2013, an increase of $77 thousand from year-ago quarter. Salaries and employee benefits increased $24 thousand due to annual salary increases and increased health benefit costs. Professional and other fees increased $38 thousand in part due to increase in audit fees as it relates to changing regulatory landscape and legal services utilized by the Bank. All other expenses combined increased a net of $15 thousand.

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)   6/30/2013   3/31/2013   12/31/2012   9/30/2012   6/30/2012  
                                 
Summary of Operations:                                
  Interest income   $ 1,436   $ 1,409   $ 1,501   $ 1,496   $ 1,465  
  Interest expense     228     267     302     315     323  
        Net interest income     1,208     1,142     1,199     1,181     1,142  
  Provision for loan and lease loss     55     35     27     20     25  
        Net interest income after provision for loan loss     1,153     1,107     1,172     1,161     1,117  
  Non-interest income     118     86     95     75     77  
  Non-interest expense     1,071     1,031     1,026     1,223     994  
        Income before income tax expense     200     161     241     13     200  
  Income tax expense     87     72     101     12     88  
        Net income   $ 112   $ 90   $ 140   $ 1   $ 112  
                                 
Per Common Share(1):                                
      Basic   $ 0.06   $ 0.05   $ 0.07   $ 0.00   $ 0.06  
      Diluted     0.06     0.05     0.07     0.00     0.06  
  Book value per share     8.29     8.31     8.23     8.19     8.17  
    Average shares outstanding     1,908     1,908     1,908     1,908     1,908  
    Average diluted shares outstanding     1,908     1,908     1,908     1,908     1,908  
                                 
Selected Financial Ratios:                                
  Return on average assets     0.35 %   0.26 %   0.42 %   0.00 %   0.34 %
  Return on average common equity     2.82 %   2.27 %   3.56 %   0.03 %   2.90 %
  Average equity to average assets     12.33 %   11.65 %   11.90 %   11.94 %   11.80 %
  Risk-based capital:                                
    Total risk-based capital ratio     16.10 %   16.20 %   15.71 %   15.81 %   16.15 %
    Tier 1 risk-based capital ratio     14.87 %   15.00 %   14.58 %   14.66 %   14.99 %
    Tier 1 leverage capital ratio     12.06 %   11.38 %   11.61 %   11.60 %   11.50 %
                                 
Financial Condition:                                
  Total assets   $ 130,877   $ 130,946   $ 138,678   $ 132,251   $ 131,336  
  Loans, net of unearned income     91,515     90,736     92,157     93,322     90,440  
  Deposits     114,675     114,614     122,536     116,257     115,345  
  Shareholder's equity     15,810     15,848     15,712     15,621     15,587  
                                 
(1) Data have been restated to give effect to the 5% stock dividend declared and paid in 2013.
 
 
 
New Jersey Community Bank  
Statements of Financial Condition  
(dollars in thousands, except share data)  
   
    June 30,     December 31,  
    2013     2012  
Assets   (unaudited)        
    Cash and due from banks - non-interest bearing   $ 1,934     $ 1,138  
    Federal funds sold and interest-bearing deposits with banks     6,863       18,180  
        Total Cash and Cash Equivalents     8,797       19,318  
    Due from banks - time deposits     10,009       7,768  
    Investment Securities:                
      Available-for-sale     13,295       11,092  
      Held-to-maturity     3,139       2,905  
        Total Investment Securities     16,434       13,997  
    Loans Receivable, net of unearned income     91,515       92,157  
      Less: Allowance for loan losses     (1,290 )     (1,207 )
        Net Loans     90,225       90,950  
    Premises and equipment, net     2,343       2,420  
    Accrued interest receivable     391       351  
    Bank-owned life insurance     1,532       1,507  
    Deferred tax assets     692       686  
    Other assets     454       1,681  
        Total Assets   $ 130,877     $ 138,678  
                 
Liabilities and Shareholders' Equity                
  Liabilities                
    Deposits:                
      Non-interest bearing   $ 9,225     $ 10,073  
      Savings, NOW and money market     44,464       40,357  
      Time deposits $100M and over     43,727       53,025  
      Time deposits, other     17,259       19,081  
        Total Deposits     114,675       122,536  
                     
    Accrued interest payable     9       8  
    Other liabilities     383       422  
        Total Liabilities     115,067       122,966  
                 
  Shareholders' Equity                
    Common stock, $2 par value; authorized 10,000,000 shares; issued and outstanding 1,908,445 and 1,648,783 shares, respectively     3,817       3,635  
    Surplus     13,722       13,854  
    Accumulated Deficit     1,583 )     (1,786 )
    Accumulated other comprehensive income (loss)     (146 )     9  
        Total Shareholders' Equity     15,810       15,712  
        Total Liabilities and Shareholders' Equity   $ 130,877     $ 138,678  
                 
                 
                 
New Jersey Community Bank
Statements of Income
(unaudited)
(dollars in thousands, except per share data)
                 
    Three Months Ended   Six Months Ended
    June 30,   June 30,
    2013   2012   2013   2012
Interest Income                        
  Loans receivable, including fees   $ 1,348   $ 1,345   $ 2,672   $ 2,684
  Investment securities     69     104     133     205
  Federal funds sold and interest-bearing deposits with banks     5     7     14     14
  Due from banks - interest bearing     14     9     26     20
      Total Interest Income     1,436     1,465     2,845     2,923
Interest Expense                        
  Deposits     228     323     494     674
      Net Interest Income before Provision for Loan Loss     1,208     1,142     2,351     2,249
Provision for Loan Loss     55     25     90     70
      Net Interest Income after Provision for Loan Loss     1,153     1,117     2,261     2,179
Non-Interest Income                        
  Fees and service charges on deposit accounts     74     53     132     144
  Loan fee income     3     13     6     16
  Gain on sale of secirities available for sale     16     -     16     -
  All other income     25     11     50     20
      Total Non-Interest Income     118     77     204     180
Non-Interest Expense                        
  Salaries and employee benefits     610     587     1,203     1,151
  Occupancy and equipment     185     189     371     379
  Data processing services     42     38     85     78
  Professional and other fees     107     69     194     135
  Advertising and promotion     6     5     12     17
  Federal insurance assessment     28     28     56     57
  Other operating expenses     93     78     181     152
      Total Non-Interest Expenses     1,071     994     2,102     1,969
      Income Before Income Tax Expense     200     200     363     390
  Income tax expense     87     88     159     170
Net Income   $ 113   $ 112   $ 204   $ 220
Income per share:                        
  Basic and diluted   $ 0.06   $ 0.06   $ 0.11   $ 0.12
Weighted average number of common shares outstanding                        
  Basic and diluted     1,908     1,908     1,908     1,908
                           
                           
                           
New Jersey Community Bank  
Analysis of Average Balance Sheet and Net Interest Income
(unaudited)
 
(dollars in thousands)  
   
    For the Three Months Ended  
    June 30, 2013     June 30, 2012  
    Average       Average     Average       Average  
    Balance   Interest   Rate     Balance   Interest   Rate  
                                     
Interest Earning Assets:                                    
  Loans   $ 90,699   $ 1,348   5.96 %   $ 88,249   $ 1,345   6.13 %
  Investment securities     14,875     69   1.87 %     20,795     104   2.05 %
  Federal funds sold and interest-bearing deposits with banks     8,563     5   0.22 %     12,776     7   0.20 %
  Due from banks - time deposits     9,262     14   0.61 %     5,602     9   0.65 %
      Total interest-earning assets     123,399     1,436   4.67 %     127,422     1,465   4.63 %
Allowance for loan loss     (1,253 )               (1,152 )          
Cash and due from banks - non-interest bearing     1,697                 1,244            
All other assets     5,246                 3,900            
      Total assets   $ 129,089               $ 131,414            
                                     
Interest Bearing Liabilities:                                    
  Deposits:                                    
    Savings, NOW and money market   $ 42,635     49   0.46 %   $ 39,480     74   0.81 %
    Time deposits $100M and over     44,282     118   1.07 %     46,927     162   1.47 %
    Time deposits, other     17,482     60   1.38 %     21,653     87   1.61 %
      Total interest-bearing deposits     104,399     228   0.88 %     108,060     323   1.26 %
                                     
Demand     8,344                 7,401            
Other liabilities     434                 446            
      Total liabilities     113,177                 115,907            
                                     
  Stockholders' equity     15,912                 15,507            
      Total liabilities & stockholders' equity   $ 129,089               $ 131,414            
Net interest income         $ 1,208               $ 1,142      
                                     
Average interest rate spread               3.79 %               3.37 %
                                     
Net interest margin               3.93 %               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

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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