SOURCE: New Jersey Community Bank

New Jersey Community Bank

April 30, 2014 17:35 ET

New Jersey Community Bank Reports First Quarter 2014 Results

FREEHOLD, NJ--(Marketwired - Apr 30, 2014) - New Jersey Community Bank (OTCQB: NJCB) (the "Bank") reported net loss of $8 thousand for the three months ended March 31, 2014, compared with a net income of $90 thousand, or $0.05 per common share, for the same period in the prior year. The earnings for the quarter were negatively impacted due to increased levels of non-accruing loans, which in turn affected the interest income on loans. Net interest margin decreased 16 basis points year over year largely due to a decline of 23 basis points in yield of interest-earning assets.

Robert D. O'Donnell, Chairman and CEO, commented that, "The Bank has experienced growing pains, it is no secret that the asset quality and the loan administration issues facing us over the last several months required a continued attention to address these issues. In response to this dilemma, the path chosen by management was not the "quick-fix" but a sustained strategy to identify and repair. I have witnessed our staff respond to these challenges by working harder and smarter at every level in our institution to responsibly produce the results that will ultimately allow us to make our way out of these issues."

Balance Sheet Summary

At March 31, 2014, total assets were $139.7 million, a decline of $4.8 million from December 31, 2013. Total cash and cash equivalents declined $4.5 million compared to year end 2013, offsetting a similar decline in total deposits. Due from banks -- time deposits decreased $1.7 million offset by increases in investment securities of $394 thousand and loans receivable of $786 thousand compared to year end 2013.

Total deposits decreased $4.8 million compared to the levels at year end 2013. 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 quarter of 2014. During the quarter, non-interest bearing deposits declined $1.4 million while savings, NOW and money market deposits declined $188 thousand compared to year end 2013.

Shareholders' equity totaled $14.3 million at March 31, 2014, increasing moderately from year-end 2013. 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 March 31, 2014, net interest income totaled $1.1 million, decreasing marginally over the same period in the prior year. At March 31, 2014, net interest margin was 3.40%, a decrease of 16 basis points compared to the same period a year ago resulting from continued low levels of interest rates. At March 31, 2014, yield on average earning assets declined 23 basis points to 4.16% while the cost of interest-bearing deposits declined 7 basis points to 0.90%, compared to the same period in the prior year primarily due to low interest rates.

The provision for loan loss was $60 thousand for the first quarter 2014, an increase of $25 thousand compared to a year-ago quarter. The allowance for loan loss at period-end was $1.7 million, or 1.76% of total loans. The asset quality deteriorated during the quarter that resulted in increasing the provision for loan loss for the quarter, the current level of the allowance for loan loss is considered to be adequate.

Non-interest income increased $45 thousand to $131 thousand for the quarter ended March 31, 2014, compared with $86 thousand for the same quarter in the prior year. Majority of such increase is directly related to the increase in loan fees as well as fees and service charges on deposit accounts and all other income.

Non-interest expense totaled $1.2 million for the quarter ended March 31, 2014, an increase of $159 thousand, from a year-ago quarter. Of the total increase in non-interest expense, salaries and employee benefits increased $59 thousand as a result of increases in staff compensation and health costs. The professional fees and federal insurance assessment each increased $31 thousand due to increase in cost of professional services utilized by the Bank and the changes in insurance assessment rates. Occupancy and equipment expense increased $27 thousand as a result of increases in lease rentals and routine building maintenance.

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)   3/31/2014     12/31/2013     9/30/2013     6/30/2013     3/31/2013  
                                         
Summary of Operations:                                        
    Interest income   $ 1,367     $ 1,187     $ 1,456     $ 1,436     $ 1,409  
    Interest expense     251       244       223       228       267  
        Net interest income     1,116       943       1,233       1,208       1,142  
  Provision for loan and lease loss     60       660       105       55       35  
        Net interest income after provision for loan loss     1,056       283       1,128       1,153       1,107  
  Non-interest income     132       117       128       118       86  
  Non-interest expense     1,190       3,057       1,041       1,071       1,031  
        Income before income tax expense     (3 )     (2,657 )     215       200       162  
  Income tax expense     5       (1,085 )     93       87       72  
        Net income   $ (8 )   $ (1,573 )   $ 122     $ 113     $ 90  
                                         
Per Common Share(1):                                        
      Basic   $ (0.00 )   $ (0.82 )   $ 0.06     $ 0.06     $ 0.05  
      Diluted     (0.00 )     (0.82 )     0.06       0.06       0.05  
  Book value per share     7.51       7.44       8.29       8.29       8.31  
    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     -0.02 %     -4.48 %     0.37 %     0.35 %     0.26 %
    Return on average common equity     -0.22 %     -39.72 %     3.09 %     2.82 %     2.27 %
    Average equity to average assets     10.15 %     11.28 %     11.93 %     12.33 %     11.65 %
    Risk-based capital:                                        
      Total risk-based capital ratio     13.17 %     13.62 %     15.67 %     16.10 %     16.20 %
      Tier 1 risk-based capital ratio     11.92 %     12.36 %     14.42 %     14.87 %     15.00 %
      Tier 1 leverage capital ratio     9.43 %     9.76 %     11.86 %     12.06 %     11.38 %
                                         
Financial Condition:                                        
  Total assets   $ 139,670     $ 144,503     $ 135,546     $ 130,877     $ 130,946  
  Loans, net of unearned income     95,720       94,934       92,978       91,515       90,736  
  Deposits     123,123       127,940       119,125       114,675       114,614  
  Shareholder's equity     14,330       14,193       15,813       15,810       15,848  
     
(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)  
   
    March 31,     December 31,  
    2014     2013  
Assets   (unaudited)        
    Cash and due from banks - non-interest bearing   $ 2,037     $ 1,927  
    Federal funds sold and interest-bearing deposits with banks     10,104       14,710  
          Total Cash and Cash Equivalents     12,141       16,637  
    Due from banks - time deposits     6,126       7,867  
    Investment Securities:                
      Available-for-sale     14,741       14,644  
      Held-to-maturity     3,463       3,166  
          Total Investment Securities     18,204       17,810  
    Loans Receivable, net of unearned fees     95,720       94,934  
        Less: Allowance for loan losses     (1,689 )     (1,982 )
          Net Loans     94,031       92,952  
    Premises and equipment, net     2,263       2,254  
    Accrued interest receivable     331       338  
    Bank-owned life insurance     3,603       3,579  
    Deferred tax assets     2,007       2,251  
    Other assets     964       815  
        Total Assets   $ 139,670     $ 144,503  
                 
Liabilities and Shareholders' Equity                
  Liabilities                
    Deposits:                
      Non-interest bearing   $ 11,896     $ 13,270  
      Savings, NOW and money market     43,328       43,140  
      Time deposits $100M and over     50,984       53,601  
      Time deposits, other     16,915       17,929  
        Total Deposits     123,123       127,940  
                 
    Accrued interest payable     5       5  
    Other liabilities     2,212       2,365  
        Total Liabilities     125,341       130,310  
                 
  Shareholders' Equity                
    Common stock, $2 par value; authorized 10,000,000 shares; issued and outstanding 1,908,445 shares, respectively    
3,817
     
3,817
 
    Surplus     13,797       13,772  
    Accumulated Deficit     (3,041 )     (3,033 )
    Accumulated other comprehensive income (loss)     (243 )     (363 )
        Total Shareholders' Equity     14,330       14,193  
        Total Liabilities and Shareholders' Equity   $ 139,670     $ 144,503  
                 
                 
                 
New Jersey Community Bank          
Statements of Operations          
(dollars in thousands, except per share data)(unaudited)          
           
    Three Month Ended
    March 31,
    2014     2013
Interest Income              
  Loans receivable, including fees   $ 1,254     $ 1,324
  Investment securities     96       64
  Federal funds sold and interest-bearing deposits with banks     7       9
  Due from banks - interest bearing     10       12
    Total Interest Income     1,367       1,409
Interest Expense              
  Deposits     251       267
    Net Interest Income before Provision for Loan Loss     1,116       1,142
Provision for Loan Loss     60       35
    Net Interest Income after Provision for Loan Loss     1,056       1,107
Non-Interest Income              
  Fees and service charges on deposit accounts     75       59
  Loan fee income     20       3
  All other income     37       24
                   
    Total Non-Interest Income     131       86
Non-Interest Expense              
  Salaries and employee benefits     652       593
  Occupancy and equipment     212       185
  Data processing services     47       43
  Professional and other fees     117       86
  Advertising and promotion     5       6
  Federal insurance assessment     60       29
  Other operating expenses     97       89
    Total Non-Interest Expenses     1,190       1,031
    Income Before Income Tax Expense     (3 )     162
  Income tax expense     5       72
Net Income   $ (8 )   $ 90
Income per share:              
  Basic and diluted   $ (0.00 )   $ 0.05
Weighted average number of common shares outstanding              
  Basic and diluted     1,908       1,908
                 
                 
                 
New Jersey Community Bank  
Analysis of Average Balance Sheet and Net Interest Income  
(unaudited)  
   
    For the Three Months Ended  
    March 31, 2014     March 31, 2013  
    Average         Average     Average         Average  
    Balance     Interest   Rate     Balance     Interest   Rate  
Interest Earning Assets:                                        
  Loans   $ 95,630     $ 1,253   5.32 %   $ 91,315     $ 1,324   5.88 %
  Investment securities     17,795       96   2.16 %     13,991       64   1.83 %
  Federal funds sold and interest-bearing deposits with banks     12,804       7   0.22 %     16,485       9   0.22 %
  Due from banks - time deposits     6,879       10   0.61 %     8,155       12   0.60 %
      Total interest-earning assets     133,108       1,367   4.16 %     129,946       1,408   4.39 %
Allowance for loan loss     (1,848 )                 (1,214 )            
Cash and due from banks - non-interest bearing     1,450                   1,305              
All other assets     8,128                   5,485              
      Total assets   $ 140,838                 $ 135,522              
                                         
Interest Bearing Liabilities:                                        
  Deposits:                                        
    Savings, NOW and money market   $ 43,235       49   0.46 %   $ 42,201       54   0.52 %
    Time deposits $100M and over     52,299       149   1.15 %     50,629       145   1.16 %
    Time deposits, other     17,410       54   1.25 %     18,434       68   1.50 %
      Total interest-bearing deposits     112,944       252   0.90 %     111,264       267   0.97 %
Demand     12,262                   7,985              
Other liabilities     1,337                   482              
      Total liabilities     126,543                   119,731              
                                         
  Stockholders' equity     14,293                   15,791              
      Total liabilities & stockholders' equity   $ 140,836                 $ 135,522              
Net interest income           $ 1,115                 $ 1,142      
                                         
Average interest rate spread                 3.26 %                 3.42 %
                                         
Net interest margin                 3.40 %                 3.56 %
                                         

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