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New Jersey Community Bank Reports Third Quarter 2012 Results

Oct 18 2012 12:00AM

Marketwire

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FREEHOLD, NJ -- (Marketwire) -- 10/18/12 -- 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 BankSelected 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 1,818Selected 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 BankStatements 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 BankStatements 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 3,385Provision 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 $ 0.23Weighted average number of common shares outstanding Basic and diluted 1,818 1,818 1,818 1,818New Jersey Community BankAnalysis 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 1,353All 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 7,029Other liabilities 424 316 -------- -------- Total liabilities 114,973 114,118Stockholders' 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% ======== ========





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





Source: Marketwire


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