SOURCE: New Jersey Community Bank

New Jersey Community Bank

May 05, 2017 11:26 ET

New Jersey Community Bank Reports First Quarter 2017 Results

FREEHOLD, NJ--(Marketwired - May 5, 2017) -  New Jersey Community Bank (OTCQB: NJCB) (the "Bank") reported a net loss of $234 thousand, or ($0.12) per share for the three months ended March 31, 2017, compared with a net loss of $283 thousand, or ($0.15) 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 declining interest yield despite an increase in average loans outstanding year over year. In addition, the interest expense on paying deposits increased year over year as a result of increased cost of time deposits. Net interest margin decreased 31 basis points year over year primarily due to the reasons noted above. The decline in net interest income was more than offset by decline in total operating expenses.

Balance Sheet Summary

At March 31, 2017, total assets were $106.7 million, an increase of $1.6 million from December 31, 2016 primarily as a result of an increase in overnight funds sold. Total cash and cash equivalents increased $5.2 million while due from banks-time deposits decreased $2.5 million. Total loans decreased $1.1 million compared to year end 2016 resulting from loan pay-offs.

Total deposits increased $1.8 million compared to the levels at year end 2016. Non-interest bearing deposits decreased $2.7 million; Savings, NOW and money market accounts decreased $1.4 million; these were offset by a $5.9 million increase in total time deposits. Time deposits increased as a result of deposit promotion on longer term time deposits.

Shareholders' equity totaled $9.9 million at March 31, 2017, decreasing primarily due to net losses reported during the first quarter of 2017 when compared to year-end 2016. The Bank's capital ratios continue to remain strong, with a leverage ratio of 9.67%, common equity tier 1 risk based capital ratio of 12.68% and a total risk based capital ratio of 13.94%. These ratios exceed those needed to be deemed a well-capitalized financial institution.

Results of Operations

For the quarter ended March 31, 2017, net interest income totaled $724 thousand, decreasing $103 thousand over the same period in the prior year. At March 31, 2017, the net interest margin was 3.03%, decreasing 31 basis points compared to the same period a year ago. The yield on average earning assets decreased 14 basis points to 3.88% while the cost of interest-bearing deposits increased 15 basis points to 0.99%, compared to the same period in the prior year, primarily due to competitive market conditions.

The Bank did not record any provision for loan losses during the first quarter 2017 and 2016. The allowance for loan losses at period-end was $1.6 million, or 2.13% of total loans. The asset quality continued to be monitored and management will take actions 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 $8 thousand to $55 thousand for the quarter ended March 31, 2017, compared with $63 thousand for the same quarter in the prior year. The majority of such decrease is directly related to decrease in fee income on loans.

Non-interest expense totaled $1.0 million for the quarter ended March 31, 2017, decreasing $160 thousands from a year-ago quarter. Of the total decrease in non-interest expense, salaries and employee benefits decreased $71 thousand as a result of a reduction in head count while management is attempting to fill certain open positions. Occupancy and equipment expense declined $30 thousand as a direct result of the closure of one of the branch facilities. FDIC insurance assessment declined $41 thousand as a result of lifting of the Consent Orders. All other components of total non-interest expenses showed moderate variances.

The Bank announced the appointment of Mr. James M. Burns to the Board of the Bank. Mr. Burns is a co-founder and partner in the law firm of Genova Burns LLC. He has served on the Boards of several organizations including New Jersey Institute of Technology, Covenant House International and Community Health Charities. He is currently serving on the boards of Integrity House and the Hudson County Chamber of Commerce.

Separately, the Bank announced that director William E. Sansone chose not to stand for the re-election to the Board 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 two full-service banking offices in the central New Jersey counties of Monmouth. 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 and Subsidiary  
Selected Consolidated Financial Highlights  
(unaudited)                              
                               
    As of or for the Quarters Ended  
(in thousands, except per share and percentage data)   3/31/2017     12/31/2016     9/30/2016     6/30/2016     3/31/2016  
                                         
Summary of Operations:                                        
    Interest income   $ 928     $ 939     $ 935     $ 932     $ 995  
    Interest expense     204       187       186       170       168  
        Net interest income     724       752       749       762       827  
Non-interest income     55       59       60       107       63  
Non-interest expense     1,013       1,170       1,207       1,449       1,173  
        Loss before income tax expense (benefit)     (234 )     (359 )     (398 )     (580 )     (283 )
Income tax expense (benefit)     -       2       -       -       -  
      Net loss   $ (234 )   $ (361 )   $ (398 )   $ (580 )   $ (283 )
                                           
Per Common Share:                                        
    Basic   $ (0.12 )   $ (0.19 )   $ (0.21 )   $ (0.30 )   $ (0.15 )
    Diluted     (0.12 )     (0.19 )     (0.21 )     (0.30 )     (0.15 )
Book value per share     5.18       5.30       5.54       5.75       6.05  
    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     -0.91 %     -1.44 %     -1.53 %     -2.25 %     -1.07 %
    Return on average common equity     -9.34 %     -13.85 %     -14.78 %     -20.49 %     -9.66 %
    Average equity to average assets     9.75 %     10.40 %     10.37 %     10.99 %     11.05 %
    Risk-based capital:                                        
      Total risk-based capital ratio     13.94 %     14.08 %     14.96 %     15.23 %     15.91 %
      Common equity tier 1 risk-based capital ratio     12.68 %     12.83 %     13.70 %     13.98 %     14.65 %
      Tier 1 risk-based capital ratio     12.68 %     12.83 %     13.70 %     13.98 %     14.65 %
      Tier 1 leverage capital ratio     9.67 %     10.16 %     10.15 %     10.67 %     10.84 %
                                         
Financial Condition:                                        
  Total assets   $ 106,718     $ 105,163     $ 101,890     $ 103,279     $ 102,844  
  Loans, net of unearned income     75,665       76,796       71,514       71,343       68,759  
  Deposits     96,355       94,538       90,900       91,795       90,892  
  Shareholder's equity     9,885       10,115       10,571       10,967       11,535  
                                         
                                         
                                         
New Jersey Community Bank and Subsidiary  
Consolidated Statements of Financial Condition  
(dollars in thousands, except share data)  
   
    March 31,     December 31,  
    2017     2016  
Assets   (unaudited)        
    Cash and due from banks - non-interest bearing   $ 1,143     $ 1,531  
    Federal funds sold and interest-bearing deposits with banks     10,961       5,415  
          Total Cash and Cash Equivalents     12,104       6,946  
    Due from banks - time deposits     1,685       4,175  
    Investment Securities:                
      Available-for-sale     6,488       6,152  
      Held-to-maturity     5,998       6,255  
          Total Investment Securities     12,486       12,407  
    Loans Receivable, net of unearned fees     75,665       76,796  
        Less: Allowance for loan losses     (1,610 )     (1,608 )
          Net Loans     74,055       75,188  
    Premises and equipment, net     1,918       1,941  
    Accrued interest receivable     237       260  
    Bank-owned life insurance     3,889       3,868  
    Other assets     344       378  
          Total Assets   $ 106,718     $ 105,163  
                 
Liabilities and Shareholders' Equity                
  Liabilities                
    Deposits:                
      Non-interest bearing   $ 10,236     $ 12,917  
      Savings, NOW and money market     27,210       28,570  
      Time deposits $250M and over     7,288       7,731  
      Time deposits, other     51,621       45,320  
          Total Deposits     96,355       94,538  
                 
    Accrued interest payable     12       10  
    Other liabilities     466       500  
          Total Liabilities     96,833       95,048  
                 
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     13,869       13,866  
    Accumulated Deficit     (7,739 )     (7,505 )
    Accumulated other comprehensive income loss     (62 )     (63 )
          Total Shareholders' Equity     9,885       10,115  
          Total Liabilities and Shareholders' Equity   $ 106,718     $ 105,163  
                 
                 
                 
New Jersey Community Bank and Subsidiary  
Consolidated Statements of Operations  
(dollars in thousands, except per share data)(unaudited)  
       
    Three Months Ended  
    March 31,  
    2017     2016  
Interest Income                
  Loans receivable, including fees   $ 841     $ 894  
  Investment securities     67       74  
  Federal funds sold and interest-bearing deposits with banks     11       13  
  Due from banks - interest bearing     9       14  
    Total Interest Income     928       995  
Interest Expense                
  Deposits     204       168  
    Net Interest Income     724       827  
Non-Interest Income                
  Fees and service charges on deposit accounts     21       22  
  Loan fee income     2       7  
  Income from bank owned life insurance     22       23  
  All other income     10       11  
    Total Non-Interest Income     55       63  
Non-Interest Expense                
  Salaries and employee benefits     535       606  
  Occupancy and equipment     158       188  
  Data processing services     62       60  
  Professional and other fees     154       161  
  Advertising and promotion     4       4  
  Federal insurance assessment     15       56  
  Other operating expenses     85       98  
    Total Non-Interest Expenses     1,013       1,173  
Net Loss   $ (234 )   $ (283 )
Loss per share:                
  Basic and diluted   $ (0.12 )   $ (0.15 )
Weighted average number of common shares outstanding                
  Basic and diluted     1,908       1,908  
                 
                 
                 
New Jersey Community Bank and Subsidiary  
Analysis of Consolidated Average Balance Sheet and Net Interest Income  
(unaudited)  
       
    For the Three Months Ended  
    March 31, 2017     March 31, 2016  
    Average         Average     Average         Average  
    Balance     Interest   Rate     Balance     Interest   Rate  
Interest Earning Assets:                                        
  Loans   $ 76,296     $ 841   4.47 %   $ 69,482     $ 894   5.18 %
  Investment securities     12,531       67   2.15 %     13,488       74   2.18 %
  Federal funds sold and interest-bearing deposits with banks     5,421       11   0.80 %     10,878       13   0.48 %
  Due from banks - time deposits     2,606       9   1.33 %     5,693       14   0.96 %
      Total interest-earning assets     96,855       928   3.88 %     99,541       995   4.02 %
  Allowance for loan loss     (1,609 )                 (1,569 )            
  Cash and due from banks - non-interest bearing     1,116                   1,534              
  All other assets     6,403                   6,544              
      Total assets   $ 102,764                 $ 106,050              
                                         
Interest Bearing Liabilities:                                        
  Deposits:                                        
    Savings, NOW and money market   $ 27,934       27   0.39 %   $ 35,989       28   0.31 %
    Time deposits     55,199       177   1.30 %     45,205       140   1.25 %
      Total interest-bearing deposits     83,134       204   0.99 %     81,194       168   0.83 %
Demand     9,094                   12,842              
Other liabilities     520                   293              
      Total liabilities     92,747                   94,329              
                                         
  Stockholders' equity     10,017                   11,721              
      Total liabilities & stockholders' equity   $ 102,764                 $ 106,050              
Net interest income           $ 724                 $ 827      
                                         
Average interest rate spread                 2.89 %                 3.19 %
                                         
Net interest margin                 3.03 %                 3.34 %
                                         

Contact Information

  • Contacts at New Jersey Community Bank:

    William H. Placke
    Chairman, President and CEO
    bplacke@njcbk.com

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