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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.