New Jersey Community Bank Reports First Quarter 2016 Results

FREEHOLD, NJ--(Marketwired - May 9, 2016) - New Jersey Community Bank (OTCQB: NJCB) (the "Bank") reported a net loss of $283 thousand, or ($0.15) per share for the three months ended March 31, 2016, compared with a net loss of $46 thousand, or ($0.02) per share for the same period in the prior year.

The earnings for the quarter were negatively impacted largely due to a decline in interest income on loans as a result of a decrease in total loans coupled with a decline in fee income on deposit accounts. The decline in interest income was partially offset by a decrease in interest expense on deposits. Net interest margin decreased 16 basis points year over year primarily due to a moderate decrease in the interest yield on loans.

Balance Sheet Summary

At March 31, 2016, total assets were $102.8 million, a decrease of $8.2 million from December 31, 2015 primarily as a result of decreases in total loans and investment securities. Total cash and cash equivalents increased $1.1 million while due from banks-time deposits decreased $0.7 million. Investment securities available-for-sale decreased $4.5 million as a result of calls on certain government agency securities. Total loans decreased $3.9 million compared to year end 2015 resulting from loan pay-offs.

Total deposits decreased $7.9 million compared to the levels at year end 2015. Savings, NOW and money market accounts decreased $6.1 million and non-interest bearing deposits decreased $2.4 million, slightly offset by $0.6 million increase in total time deposits.

Shareholders' equity totaled $11.5 million at March 31, 2016, decreasing moderately from year-end 2015. The Bank's capital ratios continue to remain strong, with a leverage ratio of 10.84%, common equity tier 1 risk based capital ratio of 14.65% and a total risk based capital ratio of 15.91%. These ratios exceed those needed to be deemed a well-capitalized financial institution.

Results of Operations

For the quarter ended March 31, 2016, net interest income totaled $0.8 million, decreasing $181 thousand over the same period in the prior year. At March 31, 2016, the net interest margin was 3.34%, decreasing 16 basis points compared to the same period a year ago. The yield on average earning assets decreased 20 basis points to 4.02% while the cost of interest-bearing deposits declined 2 basis points to 0.83%, compared to the same period in the prior year, primarily due to low interest rates.

The Bank did not record any provision for loan losses during the first quarter 2016. The allowance for loan losses at period-end was $1.6 million, or 2.28% of total loans. The asset quality continued to be monitored and management will take action as necessary to affect the provision for loan loss, however, the current level of the allowance for loan loss is considered to be adequate.

Non-interest income decreased $17 thousand to $63 thousand for the quarter ended March 31, 2016, compared with $80 thousand for the same quarter in the prior year. The majority of such decrease is directly related to decreases in fees and service charges on deposit accounts.

Non-interest expense totaled $1.2 million for the quarter ended March 31, 2016, increasing slightly from a year-ago quarter. Of the total increase in non-interest expense, salaries and employee benefits increased $27 thousand as a result of increases in health cost and annual salary increases. Professional and other fees increased $50 thousand largely due to consulting services utilized by the Bank to comply with the Consent Orders among the Bank and the regulators. These increases were offset by decreases in occupancy and equipment expense and other operating expenses. All other components of total non-interest expenses showed moderate variances.

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)					3/31/2016				12/31/2015				9/30/2015				6/30/2015				3/31/2015
Summary of Operations:
	Interest income				$	995			$	1,060			$	1,118			$	1,238			$	1,219
	Interest expense					168				185				217				216				211
				Net interest income		827				875				901				1,022				1,008
	Provision for loan loss					-				-				695				-				15
				Net interest income after provision for loan loss		827				875				206				1,022				993
	Non-interest income					63				84				88				86				80
	Non-interest expense					1,173				1,254				1,097				1,175				1,149
				Loss before income tax expense (benefit)		(283	)			(295	)			(803	)			(67	)			(76	)
	Income tax expense (benefit)					-				1,919				(322	)			(26	)			(30	)
				Net loss	$	(283	)		$	(2,214	)		$	(481	)		$	(41	)		$	(46	)
Per Common Share:
			Basic		$	(0.15	)		$	(1.16	)		$	(0.25	)		$	(0.02	)		$	(0.02	)
			Diluted			(0.15	)			(1.16	)			(0.25	)			(0.02	)			(0.02	)
	Book value per share					6.05				6.17				7.35				7.56				7.62
		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				-1.07	%			-7.39	%			-1.50	%			-0.13	%			-0.15	%
		Return on average common equity				-9.66	%			-63.58	%			-13.35	%			-1.13	%			-1.26	%
		Average equity to average assets				11.05	%			11.62	%			11.21	%			11.21	%			11.53	%
		Risk-based capital:
			Total risk-based capital ratio			15.91	%			15.21	%			15.20	%			14.62	%			14.51	%
			Common equity tier 1 risk-based capital ratio			14.65	%			13.95	%			-				-				-
			Tier 1 risk-based capital ratio			14.65	%			13.95	%			13.92	%			13.26	%			13.26	%
			Tier 1 leverage capital ratio			10.84	%			9.84	%			9.83	%			10.20	%			10.48	%
Financial Condition:
	Total assets				$	102,844			$	111,078			$	126,250			$	132,065			$	129,317
	Loans, net of unearned income					68,759				72,674				77,092				81,914				83,058
	Deposits					90,892				98,819				111,779				117,205				114,293
	Shareholder's equity					11,535				11,770				14,021				14,420				14,543

New Jersey Community Bank
Statements of Financial Condition
(dollars in thousands, except share data)
							March 31,				December 31,
							2016				2015
Assets							(unaudited)
		Cash and due from banks - non-interest bearing					$	1,682			$	1,615
		Federal funds sold and interest-bearing deposits with banks						10,814				9,736
					Total Cash and Cash Equivalents			12,496				11,351
		Due from banks - time deposits						5,280				6,027
		Investment Securities:
			Available-for-sale					4,602				9,069
			Held-to-maturity					6,277				6,537
					Total Investment Securities			10,879				15,606
		Loans Receivable, net of unearned fees						68,760				72,674
				Less: Allowance for loan losses				(1,569	)			(1,569	)
					Net Loans			67,191				71,105
		Premises and equipment, net						2,078				2,128
		Accrued interest receivable						227				276
		Bank-owned life insurance						3,798				3,774
		Deferred tax assets						-				17
		Other real estate owned						487				-
		Other assets						407				794
					Total Assets		$	102,843			$	111,078
Liabilities and Shareholders' Equity
	Liabilities
		Deposits:
			Non-interest bearing				$	12,715			$	15,155
			Savings, NOW and money market					32,744				38,808
			Time deposits $250M and over					6,721				6,713
			Time deposits, other					38,712				38,143
					Total Deposits			90,892				98,819
		Accrued interest payable						9				9
		Other liabilities						407				480
					Total Liabilities			91,308				99,308
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						13,862				13,861
		Accumulated Deficit						(6,165	)			(5,883	)
		Accumulated other comprehensive loss						21				(25	)
					Total Shareholders' Equity			11,535				11,770
					Total Liabilities and Shareholders' Equity		$	102,843			$	111,078

New Jersey Community Bank
Statements of Operations
(dollars in thousands, except per share data)(unaudited)
				Three Months Ended
				March 31,
				2016				2015
Interest Income
	Loans receivable, including fees			$	894			$	1,114
	Investment securities				74				88
	Federal funds sold and interest-bearing deposits with banks				13				4
	Due from banks - interest bearing				14				13
		Total Interest Income			995				1,219
Interest Expense
	Deposits				168				211
		Net Interest Income before Provision for Loan Loss			827				1,008
Provision for Loan Loss					-				15
		Net Interest Income after Provision for Loan Loss			827				993
Non-Interest Income
	Fees and service charges on deposit accounts				22				40
	Loan fee income				7				6
	Income from bank owned life insurance				23				24
	All other income				11				10
		Total Non-Interest Income			63				80
Non-Interest Expense
	Salaries and employee benefits				606				579
	Occupancy and equipment				188				206
	Data processing services				60				54
	Professional and other fees				161				111
	Advertising and promotion				4				2
	Federal insurance assessment				56				66
	Other operating expenses				98				131
		Total Non-Interest Expenses			1,173				1,149
		Loss Before Income Taxes			(283	)			(76	)
	Income tax expense (benefit)				-				(30	)
Net Loss				$	(283	)		$	(46	)
Loss per share:
	Basic and diluted			$	(0.15	)		$	(0.02	)
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, 2016										March 31, 2015
				Average							Average			Average							Average
				Balance				Interest			Rate			Balance				Interest			Rate
Interest Earning Assets:
	Loans			$	69,482			$	894		5.18	%		$	85,146			$	1,114		5.31	%
	Investment securities				13,488				74		2.18	%			17,255				88		2.04	%
	Federal funds sold and interest-bearing deposits with banks				10,878				13		0.48	%			7,487				4		0.21	%
	Due from banks - time deposits				5,693				14		0.96	%			7,042				13		0.75	%
			Total interest-earning assets		99,542				995		4.02	%			116,930				1,219		4.22	%
Allowance for loan loss					(1,569	)									(1,583	)
Cash and due from banks - non-interest bearing					1,534										1,505
All other assets					6,544										9,333
			Total assets	$	106,050									$	126,185
Interest Bearing Liabilities:
	Deposits:
		Savings, NOW and money market		$	35,989				28		0.31	%		$	48,587				62		0.52	%
		Time deposits			45,206				140		1.25	%			51,550				149		1.16	%
			Total interest-bearing deposits		81,195				168		0.83	%			100,137				211		0.85	%
Demand					12,842										10,999
Other liabilities					293										502
			Total liabilities		94,330										111,638
Stockholders' equity					11,721										14,547
			Total liabilities & stockholders' equity	$	106,050									$	126,185
Net interest income								$	827									$	1,008
Average interest rate spread											3.19	%									3.37	%
Net interest margin											3.34	%									3.50	%