SOURCE: New Jersey Community Bank

New Jersey Community Bank

January 27, 2014 16:00 ET

New Jersey Community Bank Reports Fourth Quarter and Full Year Results for 2013

FREEHOLD, NJ--(Marketwired - Jan 27, 2014) - New Jersey Community Bank (OTCQB: NJCB) (the "Bank") reported net loss of $212 thousand, or $(0.11) per common share for the three months ended December 31, 2013, compared to the fourth quarter 2012 earnings of $139 thousand, or $0.07 per common share. For the year 2012, the Bank reported net income of $114 thousand, or $0.06 per common share compared with net income of $361 thousand, or $0.19 per common share for the year 2012. The earnings for the year 2013 were negatively impacted by an increase in non-performing loans which in turn affected the interest income on loans, and an increase in the provision of loan and lease losses.

Robert D. O'Donnell, Chairman and CEO, commented that, "During the fourth quarter 2013, our earnings were negatively impacted by an increase in our non-performing loans which reduced our interest income on loans. In addition, the increase also resulted in an increase in our provision for loan losses. Our loan officers are working diligently with our borrowers to remedy these credits so that they can return to performing status. Despite the decline in our asset quality, I am pleased to report positive earnings for the year 2013."

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, 2013.

Balance Sheet Summary

At December 31, 2013, total assets were $143.7 million, an increase of $5.0 million compared to year end 2012. Total cash and cash equivalents were $16.6 million, a decrease of $2.7 million from year end 2012. Total investment securities increased $3.8 million to $17.8 million at December 31, 2013 compared with year end 2012 and total loans receivable increased $2.8 million from December 31, 2012. The cash flow resulting from the increase in total deposits was largely used to fund the growth in investment securities and loans.

Deposits totaled $127.9 million at December 31, 2013, an increase of $5.4 million from year end 2012. Of the total increase, non-interest bearing increased $3.2 million and savings, NOW and money market deposits increased $2.8 million, offset by a $0.6 million net decrease in time deposits. Shareholders' equity totaled $15.6 million at December 31, 2013. The Bank's capital ratios remain strong, with a leverage ratio of 10.74%, a tier 1 risk based capital ratio of 13.69% and a total risk based capital ratio of 14.94%. These ratios exceed those needed to be deemed a well capitalized financial institution.

Results of Operations

Fourth Quarter 2013
For the quarter ended December 31, 2013, net interest income totaled $943 thousand, a decrease of $255 thousand over the same period in the prior year. The decrease in net interest income was primarily due to a $313 thousand decrease in total interest income offset by $58 thousand reduction in total interest expense. The decrease in total interest income was a result of a decline in interest income on loans due to an increase in non-performing loans. The reduction in interest expense on deposits was a result of declining interest rates on deposits. As a result of decline in loan interest income, the net interest margin for the quarter dropped 93 basis points to 2.82% from 3.75% reported during the fourth quarter of 2012.

The provision for loan loss was $385 thousand for the fourth quarter 2013, an increase of $358 thousand compared to the year-ago quarter. The allowance for loan loss at period-end was $1.7 million, or 1.8% 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 increased $21 thousand to $117 thousand for the quarter ended December 31, 2013 compared with $96 thousand for the same quarter in the prior year. The majority of the increase is directly related to increases in fees and service charges on deposit accounts and income from bank owned life insurance.

Non-interest expense totaled $1.1 million for the quarter ended December 31, 2013, an increase of $31 thousand from year-ago quarter, primarily due to increased personnel and employee benefit costs and other operating expenses.

Full Year 2013
For the full year ended December 31, 2013, net interest income totaled $4.5 million, decreasing $103 thousand over the full prior year. The decrease in net interest income was primarily due to a decline in total income resulting from an increase in non-performing loans offset by a reduction in interest paid on deposits resulting primarily from declining interest rates on deposits. For the year, average interest earning assets and average interest bearing liabilities were almost unchanged, while the yield on interest earning assets declined 33 basis points to 4.30% and the cost of interest bearing liabilities declined 31 basis points to 0.88%. Net interest margin for the year declined 9 basis points to 3.53% over the full year 2012.

The provision for loan loss was $580 thousand for the year, an increase of $463 thousand compared to prior year, primarily due to an increase in the level of non-performing loans during the year.

Non-interest income totaled $448 thousand for the year 2013 reflecting an increase of $99 thousand over the full year 2012, primarily resulting from increases in fees on deposit accounts and income from bank owned life insurance.

Non-interest expense totaled $4.2 million for the full year 2013, almost unchanged over prior full year. Salaries and employee benefits, the largest component of non-interest expense, decreased $88 thousand despite the addition of personnel and increased health benefit costs. The results for 2012 reflect the impact of a settlement expense recorded in connection with a former executive. All other operating expenses increased $56 thousand primarily due to the overall growth of the bank while data processing costs and advertising expense both increased moderately year over year.

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)   12/31/2013     9/30/2013     6/30/2013     3/31/2013     12/31/2012  
                                         
Summary of Operations:                                        
  Interest income   $ 1,187     $ 1,456     $ 1,436     $ 1,409     $ 1,500  
  Interest expense     244       223       228       267       302  
      Net interest income     943       1,233       1,208       1,142       1,198  
Provision for loan and lease loss     385       105       55       35       28  
      Net interest income after provision for loan loss     558       1,128       1,153       1,107       1,170  
Non-interest income     117       128       118       86       96  
Non-interest expense     1,057       1,041       1,071       1,031       1,026  
      Income before income tax expense     (382 )     215       200       162       240  
Income tax expense     (170 )     93       87       71       101  
    Net income   $ (212 )   $ 122     $ 113     $ 91     $ 139  
                                         
Per Common Share(1):                                        
  Basic   $ (0.11 )   $ 0.06     $ 0.06     $ 0.05     $ 0.07  
  Diluted     (0.11 )     0.06       0.06       0.05       0.07  
Book value per share     8.15       8.29       8.29       8.31       8.23  
  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     -0.60 %     0.37 %     0.35 %     0.26 %     0.42 %
  Return on average common equity     -5.34 %     3.09 %     2.82 %     2.27 %     3.56 %
  Average equity to average assets     11.29 %     11.93 %     12.33 %     11.65 %     11.90 %
  Risk-based capital:                                        
    Total risk-based capital ratio     14.94 %     15.67 %     16.10 %     16.20 %     15.71 %
    Tier 1 risk-based capital ratio     13.69 %     14.42 %     14.87 %     15.00 %     14.58 %
    Tier 1 leverage capital ratio     10.74 %     11.86 %     12.06 %     11.38 %     11.61 %
                                         
Financial Condition:                                        
  Total assets   $ 143,723     $ 135,546     $ 130,877     $ 130,946     $ 138,678  
  Loans, net of unearned income     94,934       92,978       91,515       90,736       92,157  
  Deposits     127,940       119,125       114,675       114,614       122,536  
  Shareholder's equity     15,554       15,813       15,810       15,848       15,712  
 
(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)            
    At Year End December 31,  
    2013     2012  
Assets   (unaudited)        
  Cash and due from banks - non-interest bearing   $ 1,927     $ 1,138  
  Federal funds sold and interest-bearing deposits with banks     14,710       18,180  
        Total Cash and Cash Equivalents     16,637       19,318  
  Due from banks - time deposits     7,867       7,768  
  Investment Securities:                
    Available-for-sale     14,644       11,092  
    Held-to-maturity     3,166       2,905  
        Total Investment Securities     17,810       13,997  
  Loans Receivable, net of unearned income     94,934       92,157  
      Less: Allowance for loan losses     (1,707 )     (1,207 )
        Net Loans     93,227       90,950  
  Premises and equipment, net     2,254       2,420  
  Accrued interest receivable     338       351  
  Bank-owned life insurance     3,579       1,507  
  Deferred tax assets     989       686  
  Other assets     1,022       1,681  
         Total Assets   $ 143,723     $ 138,678  
                 
Liabilities and Shareholders' Equity                
  Liabilities                
    Deposits:                
      Non-interest bearing   $ 13,270     $ 10,073  
      Savings, NOW and money market     43,140       40,357  
      Time deposits $100M and over     53,601       53,025  
      Time deposits, other     17,929       19,081  
        Total Deposits     127,940       122,536  
                 
    Accrued interest payable     5       8  
    Other liabilities     224       422  
        Total Liabilities     128,169       122,966  
                 
Shareholders' Equity                
  Common stock, $2 par value; authorized 10,000,000 shares; issued and outstanding 1,908,445 and 1,648,783 shares, respectively     3,817       3,635  
  Surplus     13,772       13,854  
  Accumulated Deficit     (1,672 )     (1,786 )
  Accumulated other comprehensive income (loss)     (363 )     9  
        Total Shareholders' Equity     15,554       15,712  
        Total Liabilities and Shareholders' Equity   $ 143,723     $ 138,678  
                 
                 
                   
                   
New Jersey Community Bank                  
Statements of Income                  
(dollars in thousands, except per share data)                  
    Three Months Ended   Years Ended
    December 31,   December 31,
    2013     2012   2013   2012
Interest Income   (unaudited)         (unaudited)    
  Loans receivable, including fees   $ 1,072     $ 1,409   $ 5,089   $ 5,494
  Investment securities     97       73     324     359
  Federal funds sold and interest-bearing deposits with banks     6       6     23     27
  Due from banks - interest bearing     12       12     52     41
    Total Interest Income     1,187       1,500     5,488     5,921
Interest Expense                          
  Deposits     244       302     961     1,291
    Net Interest Income before Provision for Loan Loss     943       1,198     4,527     4,630
Provision for Loan Loss     385       28     580     117
    Net Interest Income after Provision for Loan Loss     558       1,170     3,947     4,513
Non-Interest Income                          
  Fees and service charges on deposit accounts     69       55     273     253
  Loan fee income     9       3     31     27
  Gain on sale of securities available for sale     -       19     16     19
  All other income     38       19     128     50
    Total Non-Interest Income     117       96     448     349
Non-Interest Expense                          
  Salaries and employee benefits     627       578     2,454     2,542
  Occupancy and equipment     205       189     760     765
  Data processing services     42       38     168     154
  Professional and other fees     46       102     295     294
  Advertising and promotion     6       3     27     15
  Federal insurance assessment     20       28     105     113
  Other operating expenses     111       88     391     334
    Total Non-Interest Expenses     1,057       1,026     4,200     4,217
    Income Before Income Tax Expense     (382 )     240     195     645
  Income tax expense     (170 )     101     81     284
Net Income   $ (212 )   $ 139   $ 114   $ 361
Income per share:                          
  Basic and diluted   $ (0.11 )   $ 0.07   $ 0.06   $ 0.19
Weighted average number of common shares outstanding                          
  Basic and diluted     1,908       1,908     1,908     1,908
                           
                           
                                 
                                 
New Jersey Community Bank                
Analysis of Average Balance Sheet and Net Interest Income              
                                 
    For the Three Months Ended  
    December 31, 2013    December 31, 2012 
    Average        Average    Average        Average 
    Balance    Interest   Rate    Balance    Interest   Rate 
Interest Earning Assets:   (unaudited)   (unaudited)   (unaudited)                
  Loans   $ 95,375     $ 1,072   4.46 %   $ 93,063     $ 1,409   6.02 %
  Investment securities     18,083       97   2.14 %     14,762       73   1.99 %
  Federal funds sold and interest-bearing deposits with banks     10,923       6   0.22 %     11,574       6   0.22 %
  Due from banks - time deposits     8,117       12   0.59 %     7,846       12   0.58 %
    Total interest-earning assets     132,498       1,187   3.56 %     127,244       1,500   4.69 %
Allowance for loan loss     (1,378 )                 (1,187 )            
Cash and due from banks - non-interest bearing     1,506                   1,272              
All other assets     7,776                   4,534              
    Total assets   $ 140,402                 $ 131,864              
                                         
Interest Bearing Liabilities:                                        
  Deposits:                                        
    Savings, NOW and money market   $ 44,437       51   0.46 %   $ 39,032       67   0.68 %
    Time deposits $100M and over     51,392       138   1.06 %     48,833       155   1.26 %
    Time deposits, other     17,010       56   1.29 %     20,069       80   1.59 %
      Total interest-bearing deposits     112,839       244   0.86 %     107,933       302   1.11 %
  Demand     11,251                   7,855              
  Other liabilities     465                   384              
      Total liabilities     124,555                   116,172              
                                         
  Stockholders' equity     15,852                   15,692              
      Total liabilities & stockholders' equity   $ 140,407                 $ 131,864              
Net interest income           $ 943                 $ 1,198      
                                         
Average interest rate spread                 2.70 %                 3.58 %
                                         
Net interest margin                 2.82 %                 3.75 %
                                         
                                         
                                 
                                 
New Jersey Community Bank                
Analysis of Average Balance Sheet and Net Interest Income                
                                 
    For the Year Ended 
    December 31, 2013    December 31, 2012 
    Average        Average    Average        Average 
    Balance    Interest   Rate    Balance    Interest   Rate 
    (unaudited)    (unaudited)   (unaudited)             
Interest Earning Assets:                                        
  Loans   $ 92,208     $ 5,089   5.52 %   $ 90,299     $ 5,494   6.08 %
  Investment securities     16,270       324   1.99 %     17,869       359   2.01 %
  Federal funds sold and interest bearing deposits with banks     10,605       23   0.22 %     12,988       27   0.21 %
  Due from banks - interest bearing     8,666       52   0.60 %     6,696       41   0.62 %
      Total interest-earning assets     127,749       5,488   4.30 %     127,852       5,921   4.63 %
Allowance for loan loss     (1,292 )                 (1,156 )            
Cash and due from banks - non-interest bearing     1,469                   1,274              
All other assets     6,323                   4,049              
      Total assets   $ 134,250                 $ 132,019              
                                         
Interest Bearing Liabilities:                                        
  Deposits:                                        
    Savings, NOW and money market   $ 43,402       207   0.48 %   $ 39,633       293   0.74 %
    Time deposits under $100M     17,493       239   1.37 %     21,439       345   1.61 %
    Time deposits $100M and over     47,801       515   1.08 %     47,760       653   1.37 %
      Total deposits     108,696       961   0.88 %     108,832       1,291   1.19 %
                                         
Demand     9,254                   7,228              
Other liabilities     473                   412              
      Total liabilities     118,423                   116,472              
                                         
Stockholders' equity     15,827                   15,547              
      Total liabilities & stockholders' equity   $ 134,250                 $ 132,019              
Net interest income           $ 4,527                 $ 4,630      
Average interest rate spread                 3.42 %                 3.45 %
Net interest margin                 3.53 %                 3.62 %
                                         
                                         

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