New Jersey Community Bank Reports Third Quarter 2012 Results

Marketwired

FREEHOLD, NJ--(Marketwire - Oct 18, 2012) -  New Jersey Community Bank (OTCBB: NJCB) (the "Bank") reported net income of $1 thousand for the three months ended September 30, 2012, compared to the third quarter 2011 earnings of $113 thousand, or $0.06 per common share. For the first nine months of 2012, the Bank reported net income of $221 thousand, or $0.12 per common share compared with a net income of $414 thousand, or $0.23 per common share for the same period in the prior year. The earnings for the third quarter and nine months ended September 30, 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 $131 thousand, or $0.08 per common share and $351 thousand, or $0.20 per common share for the third quarter and the nine months ended September 30, 2012, respectively.

Robert D. O'Donnell, Chairman and CEO, commented that, "We continue to operate in a difficult environment for community banks. We continue to combat the low level of interest rates and intense competition for new loans. However, we expect to close the fourth quarter and the year 2012 on a positive note. Our "approved but unfunded" loan pipeline remains healthy and our asset quality continues to be strong."

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, 2012.

Balance Sheet Summary

At September 30, 2012, total assets were $132.3 million, a moderate increase compared to year end 2011. Total cash and cash equivalents and due from banks time deposits totaled $20.4 million, a decrease of $0.7 million from year end 2011. Total investment securities decreased $4.3 million to $15.9 million at September 30, 2012 compared with year end 2011 while loans receivable increased $5.5 million from December 31, 2011. The cash flow resulting from the decrease in both cash and cash equivalents and investment securities was used to fund the loan growth.

Deposits totaled $116.3 million at September 30, 2012, a moderate decrease from year end 2011 as our deposit portfolio was restructured away from time deposits and into core accounts, resulting in a reduced cost of funds. Of the total decrease of $0.1 million in deposits, time deposits decreased $4.3 million, offset by an increase of $1.9 million in demand deposits and $2.3 million in savings, NOW and money market deposits. Shareholders' equity totaled $15.6 million at September 30, 2012. The Bank's capital ratios remain strong and exceed the regulatory requirements of a well capitalized financial institution.

Results of Operations

For the quarter ended September 30, 2012, net interest income totaled $1.2 million, an increase of $54 thousand over the same period in the 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 despite an increase in average interest-bearing deposits. Net interest margin improved by 9 basis points to 3.71% for the quarter ended September 30, 2012, over the comparable quarter in 2011. Average yield on earning assets was 4.70%, dropping 10 basis points over the prior year and average rate on interest paying liabilities was 1.17%, dropping 25 basis points over the comparable quarter in the prior year.

The provision for loan loss was $20 thousand for the third quarter 2012, a decrease of $10 thousand compared to the year-ago quarter. The allowance for loan loss at period-end was $1.2 million, or 1.26% 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 losses to be adequate."

Non-interest income decreased $24 thousand to $75 thousand for the quarter ended September 30, 2012 compared with $99 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 $1.2 million for the quarter ended September 30, 2012, an increase of $233 thousand from year-ago quarter, primarily due to a compensation expense recorded in connection with a settlement with a former executive. Of the total increase, salaries and employee benefits increased net $213 thousand (including the $272 thousand cost of settlement), occupancy and equipment expense increased $13 thousand and all other expenses combined increased a net of $7 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)   9/30/2012     6/30/2012     3/31/2012     12/31/2011     9/30/2011  
                                         
Summary of Operations:                                        
  Interest income   $ 1,496     $ 1,465     $ 1,459     $ 1,464     $ 1,509  
  Interest expense     315       323       351       380       382  
      Net interest income     1,181       1,142       1,108       1,084       1,127  
  Provision for loan and lease loss     20       25       45       35       30  
      Net interest income after provision for loan loss     1,161       1,117       1,063       1,049       1,097  
  Non-interest income     75       77       102       127       99  
  Non-interest expense     1,223       994       974       964       989  
      Income before income tax expense     13       200       191       212       207  
  Income tax expense     12       88       83       74       94  
      Net income   $ 1     $ 112     $ 108     $ 138     $ 113  
                                         
Per Common Share(1):                                        
    Basic   $ 0.00     $ 0.06     $ 0.06     $ 0.08     $ 0.06  
    Diluted     0.00       0.06       0.06       0.08       0.06  
  Book value per share     8.59       8.57       8.47       8.41       8.38  
  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     0.00 %     0.34 %     0.32 %     0.43 %     0.35 %
  Return on average common equity     0.03 %     2.90 %     2.81 %     3.62 %     3.00 %
  Average equity to average assets     11.94 %     11.80 %     11.47 %     11.73 %     11.70 %
  Risk-based capital:                                        
    Total risk-based capital ratio     15.81 %     16.15 %     16.67 %     16.39 %     16.35 %
    Tier 1 risk-based capital ratio     14.66 %     14.99 %     15.49 %     15.25 %     15.16 %
    Tier 1 leverage capital ratio     11.60 %     11.50 %     11.16 %     11.41 %     11.17 %
                                         
Financial Condition:                                        
  Total assets   $ 132,251     $ 131,336     $ 132,176     $ 132,050     $ 129,402  
  Loans, net of unearned income     93,322       90,440       87,794       87,857       86,938  
  Deposits     116,257       115,345       116,385       116,394       113,821  
  Shareholder's equity     15,621       15,587       15,406       15,293       15,231  
                                         
(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)  
             
    September 30,     December 31,  
    2012     2011  
Assets   (unaudited)        
    Cash and due from banks - non-interest bearing   $ 1,438     $ 1,519  
    Federal funds sold and interest-bearing deposits with banks     12,125       12,877  
          Total Cash and Cash Equivalents     13,563       14,396  
    Due from banks - time deposits     6,817       6,671  
    Investment Securities:                
      Available-for-sale     12,957       18,719  
      Held-to-maturity     2,937       1,469  
          Total Investment Securities     15,894       20,188  
    Loans Receivable, net of unearned income     93,322       87,857  
        Less: Allowance for loan losses     (1,180 )     (1,101 )
          Net Loans     92,142       86,756  
    Premises and equipment, net     2,481       2,610  
    Accrued interest receivable     418       363  
    Deferred tax assets     605       753  
    Other assets     331       281  
        Total Assets   $ 132,251     $ 132,018  
                 
Liabilities and Shareholders' Equity                
                 
  Liabilities                
    Deposits:                
      Non-interest bearing   $ 7,938     $ 6,057  
      Savings, NOW and money market     38,840       36,508  
      Time deposits $100M and over     48,769       50,483  
      Time deposits, other     20,710       23,346  
        Total Deposits     116,257       116,394  
                 
    Accrued interest payable     13       15  
    Other liabilities     360       316  
        Total Liabilities     116,630       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     13,829       13,930  
  Accumulated Deficit     (1,927 )     (2,147 )
  Accumulated other comprehensive income (loss)     84       48  
        Total Shareholders' Equity     15,621       15,293  
        Total Liabilities and Shareholders' Equity   $ 132,251     $ 132,018  
                 
                 
                 
New Jersey Community Bank
Statements of Income
(unaudited)
(dollars in thousands, except per share data)
    Three Months Ended   Nine Months Ended
    September 30,   September 30,
    2012     2011   2012   2011
Interest Income                          
  Loans receivable, including fees   $ 1,400     $ 1,399   $ 4,084   $ 4,159
  Investment securities     80       92     285     261
  Federal funds sold and interest-bearing deposits with banks     6       8     21     16
  Due from banks - interest bearing     10       10     30     28
    Total Interest Income     1,496       1,509     4,420     4,464
Interest Expense                          
  Deposits     315       382     989     1,079
    Net Interest Income before Provision for Loan Loss     1,181       1,127     3,431     3,385
Provision for Loan Loss     20       30     90     208
    Net Interest Income after Provision for Loan Loss     1,161       1,097     3,341     3,177
Non-Interest Income                          
  Fees and service charges on deposit accounts     54       80     198     247
  Loan fee income     8       9     24     20
  All other income     13       10     32     25
    Total Non-Interest Income     75       99     254     292
Non-Interest Expense                          
  Salaries and employee benefits     814       600     1,964     1,618
  Occupancy and equipment     197       184     576     498
  Data processing services     38       38     116     104
  Professional and other fees     58       57     192     163
  Advertising and promotion     (5 )     3     12     21
  Federal insurance assessment     28       27     85     99
  Other operating expenses     93       80     247     219
    Total Non-Interest Expenses     1,223       989     3,192     2,722
    Income Before Income Tax Expense     13       207     403     747
  Income tax expense     12       94     182     333
Net Income   $ 1     $ 113   $ 221   $ 414
Income per share:                          
  Basic and diluted   $ 0.00     $ 0.06   $ 0.12   $ 0.23
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  
(unaudited)  
  For the Three Months Ended  
  September 30, 2012     September 30, 2011  
  Average         Average     Average       Average  
  Balance     Interest   Rate     Balance   Interest   Rate  
                                     
Interest Earning Assets:                                    
  Loans $ 91,986     $ 1,400   6.05 %   $ 88,334   $ 1,397   6.28 %
  Investment securities   16,269       80   1.97 %     14,772     92   2.50 %
  Federal funds sold and interest-bearing deposits with banks   11,880       6   0.22 %     17,181     8   0.20 %
  Due from banks - time deposits   6,544       10   0.60 %     4,529     10   0.88 %
      Total interest-earning assets   126,679       1,496   4.70 %     124,816     1,508   4.80 %
Allowance for loan loss   (1,171 )                 (1,140 )          
Cash and due from banks - non-interest bearing   1,226                   1,353            
All other assets   3,831                   4,206            
      Total assets $ 130,565                 $ 129,235            
                                     
Interest Bearing Liabilities:                                    
  Deposits:                                    
    Savings, NOW and money market $ 39,664       70   0.71 %   $ 32,868     90   1.09 %
    Time deposits $100M and over   46,428       158   1.35 %     50,648     192   1.51 %
    Time deposits, other   21,316       86   1.61 %     23,258     100   1.70 %
      Total interest-bearing deposits   107,408       315   1.17 %     106,773     382   1.42 %
                                     
Demand   7,140                   7,029            
Other liabilities   424                   316            
      Total liabilities   114,973                   114,118            
                                     
Stockholders' equity   15,592                   15,117            
      Total liabilities & stockholders' equity $ 130,565                 $ 129,235            
Net interest income         $ 1,181               $ 1,126      
                                     
Average interest rate spread               3.53 %               3.37 %
                                     
Net interest margin               3.71 %               3.62 %
                                     
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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