SOURCE: New Jersey Community Bank

New Jersey Community Bank

April 19, 2012 09:55 ET

New Jersey Community Bank Reports First Quarter 2012 Results

FREEHOLD, NJ--(Marketwire - Apr 19, 2012) - New Jersey Community Bank (OTCBB: NJCB) (the "Bank") reported net income of $108 thousand, or $0.06 per common share for the three months ended March 31, 2012, compared with a net income of $142 thousand, or $0.08 per common share, for the same period in the prior year. The year over year decline in net income was in part due to reduction in net interest margin despite an increase of $19.3 million in average earning assets.

Robert D. O'Donnell, Chairman, President and CEO, commented that, "We are pleased with the first quarter 2012 results during this continued market volatility and depressed interest rates. Recent months have brought some encouraging news on the employment front but the banking industry continues to reflect the impact of prolonged low interest rates. Our first quarter earnings reflect a decline in net interest margin while our asset quality remains resilient. Though the new loan demand has somewhat softened but we continue to remain cautiously optimistic that we will remain profitable during this uncertain economic environment."

Balance Sheet Summary

At March 31, 2012, total assets were $132.2 million, almost unchanged from December 31, 2011. Investment securities, loans receivable and total deposits, all remained unchanged during the first quarter 2012 compared to year end 2011. Loans receivable remained unchanged primarily as a result of loan maturities which more than offset the new loans recorded during the quarter.

Shareholders' equity totaled $15.4 million at March 31, 2012. The Bank's capital ratios exceed the regulatory requirements of a well capitalized financial institution.

Comparing year over year this time, average total assets increased $19.0 million, or 16.5%. Average investment securities, federal funds sold, and due from banks-time deposits at March 31, 2012, increased $7.1 million, or 56.2%, $8.2 million, or 107.6%, and $2.8 million, or 1.4%, respectively, compared to the same period in the prior year. Average loans receivable increased $1.2 million, or 1.4% from a year ago March 31, 2012. Average total deposits at March 31, 2012, increased $17.5 million, or 18.6% compared to year ago. Majority of the growth in average total deposits was used to fund the increases in average investment securities and due from banks-time deposits.

Results of Operations

For the quarter ended March 31, 2012, net interest income totaled $1.1 million, increasing marginally over the same period in the prior year. At March 31, 2012, net interest margin was 3.42%, a decline of 62 basis points compared to the same period a year ago despite an increase in both the average earning assets and average interest bearing liabilities. At March 31, 2012, yield on average earning assets declined 75 basis points to 4.51% while the cost of interest-bearing deposits declined 17 basis points to 1.26%, compared to the same period in the prior year primarily due to low interest rates.

The provision for loan loss was $45 thousand for the first quarter 2012, a decrease of $50 thousand compared to a year-ago quarter. The allowance for loan loss at period-end was $1.1 million, or 1.30% 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 loss to be adequate."

Non-interest income increased moderately to $102 thousand for the quarter ended March 31, 2012, compared with $94 thousand for the same quarter in the prior year. Majority of such increase is directly related to the increase in fees and service charges on deposit accounts.

Non-interest expense totaled $974 thousand for the quarter ended March 31, 2012, an increase of $125 thousand, or 15% from year-ago quarter, primarily due to the growth of the bank. Of the total increase in non-interest expense, majority of the increase was in salaries and employee benefits which increased $77 thousand and occupancy and equipment expense which increased $33 thousand as a result of the addition of Cranbury branch office.

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 county 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) 3/31/2012 12/31/2011 9/30/2011 6/30/2011 3/31/2011
Summary of Operations:
Interest income $ 1,459 $ 1,464 $ 1,509 $ 1,516 $ 1,438
Interest expense 351 380 382 362 335
Net interest income 1,108 1,084 1,127 1,154 1,103
Provision for loan and lease loss 45 35 30 84 95
Net interest income after provision for loan loss 1,063 1,049 1,097 1,070 1,008
Non-interest income 102 127 99 99 95
Non-interest expense 974 964 989 884 849
Income before income tax expense 191 212 207 285 254
Income tax expense 83 74 94 126 112
Net income $ 108 $ 138 $ 113 $ 159 $ 142
Per Common Share(1):
Basic $ 0.06 $ 0.08 $ 0.07 $ 0.09 $ 0.08
Diluted 0.06 0.08 0.07 0.09 0.08
Book value per share 8.90 8.83 8.80 8.68 8.51
Average shares outstanding 1,731 1,731 1,731 1,731 1,731
Average diluted shares outstanding 1,731 1,731 1,731 1,731 1,731
Selected Financial Ratios:
Return on average assets 0.32 % 0.43 % 0.35 % 0.52 % 0.49 %
Return on average common equity 2.81 % 3.62 % 3.00 % 4.29 % 3.86 %
Average equity to average assets 11.47 % 11.73 % 11.70 % 12.03 % 12.74 %
Risk-based capital:
Total risk-based capital ratio 16.39 % 16.39 % 16.35 % 15.58 % 15.80 %
Tier 1 risk-based capital ratio 15.25 % 15.25 % 15.16 % 14.43 % 14.68 %
Tier 1 leverage capital ratio 11.41 % 11.41 % 11.17 % 11.50 % 12.19 %
Financial Condition:
Total assets $ 132,176 $ 132,050 $ 129,402 $ 125,826 $ 122,898
Loans, net of unearned income 87,794 87,857 86,938 89,678 87,713
Deposits 116,385 116,394 113,821 110,518 107,984
Shareholder's equity 15,406 15,293 15,231 15,024 14,738
(1) Data have been restated to give effect to the 5% stock dividend paid in 2011.
New Jersey Community Bank
Statements of Financial Condition
(dollars in thousands, except share data)
March 31, December 31,
2012 2011
Assets (unaudited)
Cash and due from banks - non-interest bearing $ 1,176 $ 1,519
Federal funds sold and interest-bearing deposits with banks 14,544 12,877
Total Cash and Cash Equivalents 15,720 14,396
Due from banks - time deposits 5,924 6,671
Investment Securities:
Available-for-sale 18,429 18,719
Held-to-maturity 1,469 1,469
Total Investment Securities 19,898 20,188
Loans Receivable, net of unearned income 87,794 87,857
Less: Allowance for loan losses (1,143 ) (1,101 )
Net Loans 86,651 86,756
Premises and equipment, net 2,589 2,610
Accrued interest receivable 355 363
Deferred tax assets 703 753
Other assets 336 281
Total Assets $ 132,176 $ 132,018
Liabilities and Shareholders' Equity
Liabilities
Deposits:
Non-interest bearing $ 6,746 $ 6,057
Savings, NOW and money market 40,367 36,508
Time deposits $100M and over 47,227 50,483
Time deposits, other 22,045 23,346
Total Deposits 116,385 116,394
Accrued interest payable 13 15
Other liabilities 372 316
Total Liabilities 116,770 116,725
Shareholders' Equity
Common stock, $2 par value; authorized 10,000,000 shares; issued and outstanding 1,731,204 and 1,648,783 shares, respectively 3,462 3,462
Surplus 13,954 13,930
Accumulated Deficit (2,040 ) (2,147 )
Accumulated other comprehensive income (loss) 30 48
Total Shareholders' Equity 15,406 15,293
Total Liabilities and Shareholders' Equity $ 132,176 $ 132,018
New Jersey Community Bank
Statements of Income
(unaudited)
(dollars in thousands, except per share data)
Three Months Ended
March 31,
2012 2011
Interest Income
Loans receivable, including fees $ 1,339 $ 1,350
Investment securities 101 77
Federal funds sold and interest-bearing deposits with banks 8 3
Due from banks - interest bearing 11 9
Total Interest Income 1,459 1,439
Interest Expense
Deposits 351 335
Net Interest Income before Provision for Loan Loss 1,108 1,104
Provision for Loan Loss 45 95
Net Interest Income after Provision for Loan Loss 1,063 1,009
Non-Interest Income
Fees and service charges on deposit accounts 90 81
Loan fee income 3 5
All other income 9 8
Total Non-Interest Income 102 94
Non-Interest Expense
Salaries and employee benefits 564 488
Occupancy and equipment 190 156
Data processing services 40 31
Professional and other fees 65 57
Advertising and promotion 12 9
Federal insurance assessment 29 43
Other operating expenses 74 65
Total Non-Interest Expenses 974 849
Income Before Income Tax Expense 191 254
Income tax expense 83 112
Net Income $ 108 $ 142
Income per share:
Basic and diluted $ 0.06 $ 0.08
Weighted average number of common shares outstanding
Basic and diluted 1,731 1,731
New Jersey Community Bank
Analysis of Average Balance Sheet and Net Interest Income
For the Three Months Ended
March 31, 2012 March 31, 2011
Average Average Average Average
Balance Interest Rate Balance Interest Rate
Interest Earning Assets:
Loans $ 87,851 $ 1,339 6.13% $ 86,626 $ 1,350 6.32%
Investment securities 19,703 101 2.05% 12,610 77 2.44%
Federal funds sold and interest-bearing deposits with banks 15,747 8 0.20% 7,585 3 0.15%
Due from banks - time deposits 6,783 11 0.65% 3,968 9 0.94%
Total interest-earning assets 130,084 1,459 4.51% 110,789 1,439 5.26%
Allowance for loan loss (1,115 ) (1,011 )
Cash and due from banks - non-interest bearing 1,356 1,144
All other assets 3,927 4,346
Total assets $ 134,252 $ 115,268
Interest Bearing Liabilities:
Deposits:
Savings, NOW and money market $ 40,363 82 0.81% $ 28,761 75 1.05%
Time deposits $100M and over 48,855 178 1.47% 43,993 169 1.54%
Time deposits, other 22,734 91 1.61% 21,678 91 1.68%
Total interest-bearing deposits 111,952 351 1.26% 94,432 335 1.43%
Demand 6,511 5,908
Other liabilities 396 238
Total liabilities 118,859 100,578
Stockholders' equity 15,393 14,690
Total liabilities & stockholders' equity $ 134,252 $ 115,268
Net interest income $ 1,108 $ 1,104
Average interest rate spread 3.25% 3.83%
Net interest margin 3.42% 4.04%

Contact Information

  • Contacts at New Jersey Community Bank:

    Robert D. O'Donnell
    Chairman, President and Chief Executive Officer
    rodonnell@njcbk.com

    Naqi A. Naqvi
    Executive Vice President & CFO
    nnaqvi@njcbk.com