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New Jersey Community Bank Reports Third Quarter 2013 Results

FREEHOLD, NJ--(Marketwired - Oct 18, 2013) - New Jersey Community Bank ( OTCQB : NJCB ) (the "Bank") reported net income of $122 thousand, or $0.06 per common share for the three months ended September 30, 2013, compared to the third quarter 2012 earnings of $1 thousand. For the nine months ended September 30, 2013, the Bank reported net income of $326 thousand, or $0.17 per common share compared to net income of $221 thousand, or $0.12 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 $0.07 per common share and $351 thousand, or $0.18 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 and challenging environment for us as well as our peer community banks. We continue to combat intense competition for new loans while maintaining conservative credit discipline. Despite the ultra-competitive environment, we expect to close the fourth quarter and the year 2013 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, 2013.

Balance Sheet Summary

At September 30, 2013, total assets were $135.5 million, a decline of $3.1 million from December 31, 2012. Total cash and cash equivalents declined $9.8 million compared to year end 2012, majority of which was offset by increases in investment securities of $4.2 million, loans receivable of $0.8 million, and bank-owned life insurance of $2.0 million, compared to year end 2012.

Total deposits decreased $3.4 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 nine months of 2013. Total time deposits decreased $7.8 million, partially offset by increases in Savings, NOW and money market deposits of $4.0 million and non-interest bearing deposits of $0.4 million, compared to the levels reported at year-end 2012.

Shareholders' equity totaled $15.8 million at September 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 September 30, 2013, net interest income totaled $1.2 million, increasing of $52 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 20 basis points to 3.91% for the quarter ended September 30, 2013, over the comparable quarter in 2012. Average yield on earning assets was 4.62%, increasing 8 basis points over the prior year and average rate on paying liabilities was 0.83%, dropping 34 basis points over the comparable quarter in the prior year.

The provision for loan loss was $105 thousand for the third quarter 2013, an increase of $85 thousand compared to the year-ago quarter. The allowance for loan loss at period-end was $1.4 million, or 1.48% of total loans. Mr. O'Donnell noted, "We funded the allowance this quarter as forecasted while being cautious about the uncertainty surrounding the real estate market. 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 $53 thousand to $128 thousand for the quarter ended September 30, 2013 compared with $75 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 fees and service charges on deposit accounts.

Non-interest expense totaled $1.0 million for the quarter ended September 30, 2013, a decrease of $182 thousand from year-ago quarter. Salaries and employee benefits decreased $190 thousand, primarily as a result of compensation expense recorded in the prior year in connection with a settlement with a former executive. Occupancy and equipment expense decreased $13 thousand and all other expenses combined increased a net of $21 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)   9/30/2013     6/30/2013     3/31/2013     12/31/2012     9/30/2012  
                                         
Summary of Operations:                                        
  Interest income   $ 1,456     $ 1,436     $ 1,409     $ 1,501     $ 1,496  
  Interest expense     223       228       267       302       315  
      Net interest income     1,233       1,208       1,142       1,199       1,181  
  Provision for loan and lease loss     105       55       35       27       20  
      Net interest income after provision for loan loss     1,128       1,153       1,107       1,172       1,161  
  Non-interest income     128       118       86       95       75  
  Non-interest expense     1,041       1,071       1,031       1,026       1,223  
      Income before income tax expense     215       200       162       241       13  
  Income tax expense     93       87       71       101       12  
      Net income   $ 122     $ 113     $ 91     $ 140     $ 1  
                                         
Per Common Share(1):                                        
    Basic   $ 0.06     $ 0.06     $ 0.05     $ 0.07     $ 0.00  
    Diluted     0.06       0.06       0.05       0.07       0.00  
  Book value per share     8.29       8.29       8.31       8.23       8.19  
  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     0.37 %     0.35 %     0.26 %     0.42 %     0.00 %
  Return on average common equity     3.09 %     2.82 %     2.27 %     3.56 %     0.03 %
  Average equity to average assets     11.93 %     12.33 %     11.65 %     11.90 %     11.94 %
  Risk-based capital:                                        
    Total risk-based capital ratio     15.67 %     16.10 %     16.20 %     15.71 %     15.81 %
    Tier 1 risk-based capital ratio     14.42 %     14.87 %     15.00 %     14.58 %     14.66 %
    Tier 1 leverage capital ratio     11.86 %     12.06 %     11.38 %     11.61 %     11.60 %
                                         
Financial Condition:                                        
  Total assets   $ 135,546     $ 130,877     $ 130,946     $ 138,678     $ 132,251  
  Loans, net of unearned income     92,978       91,515       90,736       92,157       93,322  
  Deposits     119,125       114,675       114,614       122,536       116,257  
  Shareholder's equity     15,813       15,810       15,848       15,712       15,621  
                                         
(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)  
    September 30,     December 31,  
    2013     2012  
Assets   (unaudited)        
    Cash and due from banks - non-interest bearing   $ 1,479     $ 1,138  
    Federal funds sold and interest-bearing deposits with banks     8,019       18,180  
        Total Cash and Cash Equivalents     9,498       19,318  
    Due from banks - time deposits     8,366       7,768  
    Investment Securities:                
      Available-for-sale     14,877       11,092  
      Held-to-maturity     3,353       2,905  
        Total Investment Securities     18,230       13,997  
    Loans Receivable, net of unearned income     92,978       92,157  
      Less: Allowance for loan losses     (1,372 )     (1,207 )
        Net Loans     91,606       90,950  
    Premises and equipment, net     2,304       2,420  
    Accrued interest receivable     347       351  
    Bank-owned life insurance     3,553       1,507  
    Deferred tax assets     692       686  
    Other assets     950       1,681  
        Total Assets   $ 135,546     $ 138,678  
                 
Liabilities and Shareholders' Equity                
  Liabilities                
    Deposits:                
    Non-interest bearing   $ 10,482     $ 10,073  
    Savings, NOW and money market     44,334       40,357  
    Time deposits $100M and over     47,503       53,025  
    Time deposits, other     16,806       19,081  
        Total Deposits     119,125       122,536  
                   
    Accrued interest payable     5       8  
    Other liabilities     603       422  
        Total Liabilities     119,733       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, espectively     3,817       3,635  
    Surplus     13,747       13,854  
    Accumulated Deficit     (1,460 )     (1,786 )
    Accumulated other comprehensive income (loss)     (291 )     9  
        Total Shareholders' Equity     15,813       15,712  
        Total Liabilities and Shareholders' Equity   $ 135,546     $ 138,678  
                 
                   
New Jersey Community Bank
Statements of Income
(dollars in thousands, except per share data)
(unaudited)
    Three Months Ended     Nine Months Ended
    September 30,     September 30,
    2013   2012     2013   2012
Interest Income                          
  Loans receivable, including fees   $ 1,345   $ 1,400     $ 4,017   $ 4,084
  Investment securities     94     80       227     285
  Federal funds sold and interest-bearing deposits with banks     4     6       17     21
  Due from banks - interest bearing     13     10       39     30
    Total Interest Income     1,456     1,496       4,300     4,420
Interest Expense                          
  Deposits     223     315       717     989
    Net Interest Income before Provision for Loan Loss     1,233     1,181       3,583     3,431
Provision for Loan Loss     105     20       195     90
    Net Interest Income after Provision for Loan Loss     1,128     1,161       3,388     3,341
Non-Interest Income                          
  Fees and service charges on deposit accounts     72     54       204     198
  Loan fee income     15     8       22     24
  Gain on sale of secirities available for sale     -     -       16     -
  All other income     41     13       90     32
    Total Non-Interest Income     128     75       332     254
Non-Interest Expense                          
  Salaries and employee benefits     623     814       1,827     1,964
  Occupancy and equipment     184     197       555     576
  Data processing services     41     38       126     116
  Professional and other fees     55     58       249     192
  Advertising and promotion     9     (5 )     21     12
  Federal insurance assessment     29     28       85     85
  Other operating expenses     100     93       280     247
    Total Non-Interest Expenses     1,041     1,223       3,142     3,192
    Income Before Income Tax Expense     215     13       578     403
  Income tax expense     93     12       252     182
Net Income   $ 122   $ 1     $ 326   $ 221
Income per share:                          
  Basic and diluted   $ 0.06   $ 0.00     $ 0.17   $ 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)  
    For the Three Months Ended  
    September 30, 2013     September 30, 2012  
    Average         Average     Average         Average  
    Balance     Interest   Rate     Balance     Interest   Rate  
Interest Earning Assets:                                        
  Loans   $ 91,409     $ 1,345   5.84 %   $ 91,986     $ 1,400   6.05 %
  Investment securities     18,066       94   2.08 %     16,269       80   1.97 %
  Federal funds sold and interest-bearing deposits with banks    
6,553		      
4		  
0.22		 %    
11,880		      
6		  
0.22		 %
  Due from banks - time deposits     9,126       13   0.58 %     6,544       10   0.60 %
      Total interest-earning assets     125,154       1,456   4.62 %     126,679       1,496   4.70 %
Allowance for loan loss     (1,320 )                 (1,171 )            
Cash and due from banks - non-interest bearing     1,367                   1,226              
All other assets     6,758                   3,831              
      Total assets   $ 131,959                 $ 130,565              
                                         
Interest Bearing Liabilities:                                        
  Deposits:                                        
    Savings, NOW and money market   $ 44,299       52   0.47 %   $ 39,664       70   0.71 %
    Time deposits $100M and over     44,927       115   1.02 %     46,428       158   1.35 %
    Time deposits, other     17,066       56   1.29 %     21,316       86   1.61 %
      Total interest-bearing deposits     106,292       223   0.83 %     107,408       315   1.17 %
Demand     9,405                   7,140              
Other liabilities     514                   424              
      Total liabilities     116,211                   114,973              
                                         
  Stockholders' equity     15,748                   15,592              
      Total liabilities & stockholders' equity   $ 131,959                 $ 130,565              
Net interest income           $ 1,233                 $ 1,181      
                                         
Average interest rate spread                 3.79 %                 3.53 %
                                         
Net interest margin                 3.91 %                 3.71 %