News Column

New Jersey Community Bank Reports Fourth Quarter and Full Year Results for 2012

Jan 23 2013 12:00AM

Marketwire

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FREEHOLD, NJ -- (Marketwire) -- 01/23/13 -- New Jersey Community Bank (OTCBB: NJCB) (the "Bank") reported net income of $140 thousand, or $0.08 per common share for the three months ended December 31, 2012, compared to the fourth quarter 2011 earnings of $138 thousand, or $0.08 per common share. For the year 2012, the Bank reported net income of $361 thousand, or $0.20 per common share compared with a net income of $552 thousand, or $0.30 per common share for the year 2011. The earnings for the year 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 $491 thousand, or $0.27 per common share.

Robert D. O'Donnell, Chairman and CEO commented that, "We are pleased with our fourth quarter and full year 2012 results of operation despite a difficult economic environment. The New Jersey economy, job market and real estate market remain weak according to the latest reports and survey data. We continue to combat the low level of interest rates, which squeezes our margin, and intense competition for new loans. Though our new loan demand has softened somewhat, we continue to remain cautiously optimistic during this uncertain economic environment."

All common share data presented in this press release, including earnings per common share data, were adjusted to reflect a five percent stock dividend issued on May 31, 2012.

Balance Sheet Summary

At December 31, 2012, total assets were $138.7 million, an increase $6.7 million compared to year end 2011. Total cash and cash equivalents totaled $19.3 million, an increase of $4.9 million from year end 2011. Due from banks time deposits increased $1.1 million to $7.8 million from a year ago. Total investment securities decreased $6.2 million to $14.0 million at December 31, 2012 compared with year end 2011 while total loans receivable increased $4.3 million from December 31, 2011. The cash flow resulting from the decrease in investment securities was largely offset by the increases in total loans and due from banks time deposits.

Deposits totaled $122.5 million at December 31, 2012, an increase of $6.1 million from year end 2011. Of the total increase, non-interest bearing, savings, NOW and money market and time deposits over $100M increased $4.0 million, $3.8 million and $2.5 million, respectively, offset by a $4.3 million decrease in all other time deposits. A majority of the increase in total deposits was used to fund the loan growth. Shareholders' equity totaled $15.7 million at December 31, 2012. The Bank's capital ratios remain strong and exceed the regulatory requirements to be deemed a well capitalized financial institution.

Results of Operations

Fourth Quarter 2012
For the quarter ended December 31, 2012, net interest income totaled $1.2 million, an increase of $115 thousand over the same period in the prior year. The increase in net interest income was primarily due to a $37 thousand increase in total interest income coupled with $78 thousand reduction in total interest expense resulting from declining interest rates on deposits despite an increase in average interest-bearing deposits. Net interest margin improved by 33 basis points to 3.75% for the quarter ended December 31, 2012, over the comparable quarter in 2011. Average yield on earning assets was 4.69%, increasing 7 basis points over the prior year and the average rate on interest paying liabilities was 1.11%, dropping 28 basis points over the comparable quarter in the prior year.

The provision for loan loss was $28 thousand for the fourth quarter 2012, a decrease of $7 thousand compared to the year-ago quarter. The allowance for loan loss at period-end was $1.2 million, or 1.31% of total loans. Management continually monitors the adequacy of the allowance for loan loss and considers the current level of the allowance for loan losses to be adequate.

Non-interest income decreased $32 thousand to $95 thousand for the quarter ended December 31, 2012 compared with $127 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 $1.0 million for the quarter ended December 31, 2012, an increase of $61 thousand from year-ago quarter, primarily due to increased personnel and employee benefit costs. Of the total increase, salaries and employee benefits increased $89 thousand while all other non-interest expenses combined declined $28 thousand.

Full Year 2012
For the full year ended December 31, 2012, net interest income totaled $4.6 million, increasing $162 thousand over the full 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. For the year, average interest earning assets increased $7.6 million coupled with an increase of $5.8 million in average interest bearing liabilities, while the yield on interest earning assets declined 30 basis points to 4.63% and the cost of interest bearing liabilities declined 23 basis points to 1.19%. Net interest margin for the year declined 11 basis points to 3.61% over the full year 2011.

The provision for loan loss was $117 thousand for the year, a decrease of $127 thousand compared to prior year, primarily due to stable level of non-performing loans during the year.

Non-interest income totaled $349 thousand for the year 2012 reflecting a decrease of $71 thousand over the full year 2010, primarily resulting from a decline in fees on deposit accounts.

Non-interest expense totaled $4.2 million for the full year 2012, an increase of $531 thousand over prior full year. Of the total increase, salaries and employee benefits, the largest component of non-interest expense, increased $435 thousand primarily due to compensation expense recorded in connection with a settlement with a former executive, addition of personnel and increased health benefit costs. Occupancy and equipment expense increased $82 thousand primarily due to addition of Cranbury branch office. All other operating expenses combined increased a net of $14 thousand primarily due to the overall growth of the bank.

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) 12/31/2012 9/30/2012 6/30/2012 3/31/2012 12/31/2011 ---------- ---------- ---------- ---------- ----------Summary of Operations: Interest income $ 1,501 $ 1,496 $ 1,465 $ 1,459 $ 1,464 Interest expense 302 315 323 351 380 ---------- ---------- ---------- ---------- ---------- Net interest income 1,199 1,181 1,142 1,108 1,084 Provision for loan and lease loss 27 20 25 45 35 ---------- ---------- ---------- ---------- ---------- Net interest income after provision for loan loss 1,172 1,161 1,117 1,063 1,049 Non-interest income 95 75 77 102 127 Non-interest expense 1,026 1,223 994 974 964 ---------- ---------- ---------- ---------- ---------- Income before income tax expense 241 13 200 191 212 Income tax expense 101 12 88 83 74 ---------- ---------- ---------- ---------- ---------- Net income $ 140 $ 1 $ 112 $ 108 $ 138 ========== ========== ========== ========== ==========Per Common Share(1): Basic $ 0.08 $ 0.00 $ 0.06 $ 0.06 $ 0.08 Diluted 0.08 0.00 0.06 0.06 0.08 Book value per share 8.64 8.59 8.57 8.47 8.41 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 0.42% 0.00% 0.34% 0.32% 0.43% Return on average common equity 3.56% 0.03% 2.90% 2.81% 3.62% Average equity to average assets 11.90% 11.94% 11.80% 11.47% 11.73% Risk-based capital: Total risk- based capital ratio 15.71% 15.81% 16.15% 16.67% 16.39% Tier 1 risk- based capital ratio 14.56% 14.66% 14.99% 15.49% 15.25% Tier 1 leverage capital ratio 11.61% 11.60% 11.50% 11.16% 11.41%Financial Condition: Total assets $ 138,678 $ 132,251 $ 131,336 $ 132,176 $ 132,018 Loans, net of unearned income 92,157 93,322 90,440 87,794 87,857 Deposits 122,536 116,257 115,345 116,385 116,394 Shareholder's equity 15,712 15,621 15,587 15,406 15,293(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) ------------ ------------ December 31, December 31, 2012 2011 ------------ ------------Assets Cash and due from banks - non-interest bearing $ 1,138 $ 1,519 Federal funds sold and interest-bearing deposits with banks 18,180 12,877 ------------ ------------ Total Cash and Cash Equivalents 19,318 14,396 Due from banks - time deposits 7,768 6,671 Investment Securities: Available-for-sale 11,092 18,719 Held-to-maturity 2,905 1,469 ------------ ------------ Total Investment Securities 13,997 20,188 Loans Receivable, net of unearned income 92,157 87,857 Less: Allowance for loan losses (1,207) (1,101) ------------ ------------ Net Loans 90,950 86,756 Premises and equipment, net 2,420 2,610 Accrued interest receivable 351 363 Bank-owned life insurance 1,507 - Deferred tax assets 686 753 Other assets 1,681 281 ------------ ------------ Total Assets $ 138,678 $ 132,018 ============ ============Liabilities and Shareholders' Equity Liabilities Deposits: Non-interest bearing $ 10,073 $ 6,057 Savings, NOW and money market 40,357 36,508 Time deposits $100M and over 53,025 50,483 Time deposits, other 19,081 23,346 ------------ ------------ Total Deposits 122,536 116,394 Accrued interest payable 8 15 Other liabilities 422 316 ------------ ------------ Total Liabilities 122,966 116,725 ------------ ------------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 13,854 13,930 Accumulated Deficit (1,786) (2,147) Accumulated other comprehensive income (loss) 9 48 ------------ ------------ Total Shareholders' Equity 15,712 15,293 ------------ ------------ Total Liabilities and Shareholders' Equity $ 138,678 $ 132,018 ============ ============New Jersey Community BankStatements of Income(dollars in thousands, except per share data) Three Months Ended Year Ended December 31, December 31, ------------------- ------------------- 2012 2011 2012 2011 --------- --------- --------- ---------Interest Income Loans receivable, including fees $ 1,410 $ 1,351 $ 5,494 $ 5,509 Investment securities 73 94 359 356 Federal funds sold and interest- bearing deposits with banks 6 8 27 24 Due from banks - interest bearing 12 11 41 38 --------- --------- --------- --------- Total Interest Income 1,501 1,464 5,921 5,927 --------- --------- --------- ---------Interest Expense Deposits 302 380 1,291 1,459 --------- --------- --------- --------- Net Interest Income before Provision for Loan Loss 1,199 1,084 4,630 4,468Provision for Loan Loss 27 35 117 244 --------- --------- --------- --------- Net Interest Income after Provision for Loan Loss 1,172 1,049 4,513 4,224 --------- --------- --------- ---------Non-Interest Income Fees and service charges on deposit accounts 55 95 253 343 Loan fee income 3 21 27 41 Gain on sale of securities 19 - 19 - All other income 18 11 50 36 --------- --------- --------- --------- Total Non-Interest Income 95 127 349 420 --------- --------- --------- ---------Non-Interest Expense Salaries and employee benefits 578 489 2,542 2,107 Occupancy and equipment 189 185 765 683 Data processing services 38 40 154 144 Professional and other fees 102 119 294 282 Advertising and promotion 3 9 15 30 Federal insurance assessment 28 27 113 125 Other operating expenses 88 95 334 315 --------- --------- --------- --------- Total Non-Interest Expenses 1,026 964 4,217 3,686 --------- --------- --------- --------- Income Before Income Tax Expense 241 212 645 958 Income tax expense 101 74 284 406 --------- --------- --------- ---------Net Income $ 140 $ 138 $ 361 $ 552 ========= ========= ========= =========Income per share: Basic and diluted $ 0.08 $ 0.08 $ 0.20 $ 0.30Weighted 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 For the Year Ended December 31, 2012 December 31, 2011 -------------------------- -------------------------- Average Average Average Average Balance Interest Rate Balance Interest Rate -------- -------- ------- -------- -------- -------Interest Earning Assets: Loans $ 90,299 $ 5,494 6.08% $ 87,926 $ 5,509 6.27% Investment securities 17,869 359 2.01% 14,996 356 2.37% Federal funds sold and interest bearing deposits with banks 12,988 27 0.21% 12,594 24 0.19% Due from banks - interest bearing 6,696 41 0.62% 4,710 38 0.82% -------- -------- ------- -------- -------- ------- Total interest- earning assets 127,852 5,921 4.63% 120,226 5,927 4.93%Allowance for loan loss (1,156) (1,093)Cash and due from banks - non- interest bearing 1,274 1,288All other assets 4,048 4,231 -------- -------- Total assets $132,018 $124,652 ======== ========Interest Bearing Liabilities: Deposits: Savings, NOW and money market $ 39,633 293 0.74% $ 31,972 343 1.07% Time deposits under $100M 21,439 345 1.61% 22,797 386 1.69% Time deposits $100M and over 47,760 653 1.37% 48,264 730 1.51% -------- -------- ------- -------- -------- ------- Total deposits 108,832 1,291 1.19% 103,033 1,459 1.42%Demand 7,228 6,334Other liabilities 411 293 -------- -------- Total liabilities 116,471 109,660Stockholders' equity 15,547 14,992 -------- -------- Total liabilities & stockholders' equity $132,018 $124,652 ======== -------- ======== --------Net interest income $ 4,630 $ 4,468 ======== ========Average interest rate spread 3.44% 3.51% ======= =======Net interest margin 3.61% 3.72% ======= =======





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





Source: Marketwire


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