SOURCE: New Jersey Community Bank

New Jersey Community Bank

August 21, 2017 17:05 ET

New Jersey Community Bank Reports Second Quarter 2017 Results

FREEHOLD, NJ--(Marketwired - Aug 21, 2017) - New Jersey Community Bank (OTCQB: NJCB) (the "Bank") reported a net loss of $278 thousand, or ($0.15) per share for the three months ended June 30, 2017, compared with a net loss of $580 thousand, or ($0.30) per share for the same period in the prior year. For the first six months of 2017, the Bank reported net loss of $512 thousand, or ($0.27) per common share compared with a net loss of $863 thousand, or ($0.45) per common share for the same period in the prior year. The losses for the first six months and the second quarter 2017 improved when compared to the prior year largely due to a substantial decline in operating expenses.

The losses for the second quarter 2017 were further impacted in part due to increased cost of deposits as a result of increases in both average volume and interest rates when compared to the same period in the prior year. Total interest income for the quarter increased primarily as a result of an increase in average loans outstanding despite a decline in interest yield year over year. Net interest margin for the quarter decreased 39 basis points year over year primarily due to the reasons noted above.

Balance Sheet Summary

At June 30, 2017, total assets were $103.6 million, a decrease of $1.6 million from December 31, 2016 primarily as a result of a slight decrease in deposits. Total cash and cash equivalents decreased $3.1 million while due from banks-time deposits decreased $2.2 million. Loans totaled $80.5 million at June 30, 2017, an increase of $3.7 million from the year-end 2016. The growth in loans was funded utilizing the available liquidity in cash and cash equivalents.

Total deposits decreased $1.0 million compared to the levels at year end 2016. Non-interest bearing deposits decreased $687 thousand; Savings, NOW and money market accounts decreased $3.5 million; these were substantially offset by a $3.2 million increase in total time deposits. Time deposits increased as a result of deposit promotion on longer term time deposits.

Shareholders' equity totaled $9.6 million at June 30, 2017, decreasing primarily due to net losses reported during the first six months of 2017 when compared to year-end 2016. The Bank's capital ratios continue to remain strong, with a leverage ratio of 9.20%; common equity tier 1 risk based capital ratio of 11.62%; and a total risk based capital ratio of 12.87%. These ratios exceed those needed to be deemed a well-capitalized financial institution.

Results of Operations

For the quarter ended June 30, 2017, net interest income totaled $729 thousand, decreasing $23 thousand over the same period in the prior year. At June 30, 2017, the net interest margin was 2.95%, decreasing 39 basis points compared to the same period a year ago. The yield on average earning assets decreased 16 basis points to 3.86% while the cost of interest-bearing deposits increased 23 basis points to 1.06%, 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 second quarter 2017 and 2016. The allowance for loan losses at period-end was $1.5 million, or 1.87% of total loans. Management continue to monitor the asset quality and will take actions necessary to affect the provision for loan losses; however, the current level of the allowance for loan loss is considered to be more than adequate.

Non-interest income decreased $47 thousand to $69 thousand for the quarter ended June 30, 2017, compared with $116 thousand for the same quarter in the prior year. The majority of such decrease is directly related to the gain on sale of other real estate owned recorded in the prior year.

Non-interest expense totaled $1.1 million for the quarter ended June 30, 2017, decreasing $372 thousands from a year-ago quarter. Of the total decrease in non-interest expense, salaries and employee benefits decreased $67 thousand as a result of a reduction in head count while management is attempting to fill certain open positions. Occupancy and equipment expense declined $45 thousand as a direct result of the closure of one of the branch facilities. Professional and other fees decline $215 thousand while the FDIC insurance assessment declined $37 thousand as a result of lifting of the Consent Orders. The decline in professional and other fees was directly related to the Bank complying with certain regulatory orders during the same period in the prior year. 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 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) 6/30/2017     3/31/2017     12/31/2016     9/30/2016     6/30/2016  
                                       
Summary of Operations:                                      
  Interest income $ 953     $ 928     $ 939     $ 935     $ 932  
  Interest expense   224       204       187       186       170  
  Net interest income   729       724       752       749       762  
          Non-interest income   69       55       59       60       107  
  Non-interest expense   1,076       1,013       1,170       1,207       1,449  
          Loss before income tax expense (benefit)   (278 )     (234 )     (359 )     (398 )     (580 )
  Income tax expense (benefit)   -       -       2       -       -  
        Net loss $ (278 )   $ (234 )   $ (361 )   $ (398 )   $ (580 )
                                       
Per Common Share:                                      
      Basic $ (0.15 )   $ (0.12 )   $ (0.19 )   $ (0.21 )   $ (0.30 )
      Diluted   (0.15 )     (0.12 )     (0.19 )     (0.21 )     (0.30 )
  Book value per share   5.05       5.18       5.30       5.54       5.75  
    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 %     -0.91 %     -1.44 %     -1.53 %     -2.25 %
  Return on average common equity   -11.25 %     -9.34 %     -13.85 %     -14.78 %     -20.49 %
  Average equity to average assets   9.51 %     9.75 %     10.40 %     10.37 %     10.99 %
  Risk-based capital:                                      
    Total risk-based capital ratio   12.87 %     13.94 %     14.08 %     14.96 %     15.23 %
    Common equity tier 1 risk-based capital ratio   11.62 %     12.68 %     12.83 %     13.70 %     13.98 %
    Tier 1 risk-based capital ratio   11.62 %     12.68 %     12.83 %     13.70 %     13.98 %
    Tier 1 leverage capital ratio   9.20 %     9.67 %     10.16 %     10.15 %     10.67 %
                                       
Financial Condition:                                      
  Total assets $ 103,554     $ 106,718     $ 105,163     $ 101,890     $ 103,279  
  Loans, net of unearned income   80,512       75,665       76,796       71,514       71,343  
  Deposits   93,516       96,355       94,538       90,900       91,795  
  Shareholder's equity   9,638       9,885       10,115       10,571       10,967  
                                         
                                         
                                         
New Jersey Community Bank and Subsidiary  
Consolidated Statements of Financial Condition  
(dollars in thousands, except share data)  
    June 30,     December 31,  
    2017     2016  
Assets   (unaudited)        
  Cash and due from banks - non-interest bearing   $ 972     $ 1,531  
  Federal funds sold and interest-bearing deposits with banks     2,869       5,415  
          Total Cash and Cash Equivalents     3,841       6,946  
  Due from banks - time deposits     1,934       4,175  
  Investment Securities:                
    Available-for-sale     6,356       6,152  
    Held-to-maturity     5,991       6,255  
          Total Investment Securities     12,347       12,407  
  Loans Receivable, net of unearned fees     80,512       76,796  
      Less: Allowance for loan losses     (1,503 )     (1,608 )
          Net Loans     79,009       75,188  
  Premises and equipment, net     1,895       1,941  
  Accrued interest receivable     271       260  
  Bank-owned life insurance     3,912       3,868  
  Other assets     345       378  
        Total Assets   $ 103,554     $ 105,163  
                 
Liabilities and Shareholders' Equity                
  Liabilities                
  Deposits:                
    Non-interest bearing   $ 12,230     $ 12,917  
    Savings, NOW and money market     25,071       28,570  
    Time deposits $250M and over     6,765       7,731  
    Time deposits, less than $250M     49,450       45,320  
        Total Deposits     93,516       94,538  
                 
  Accrued interest payable     11       10  
  Other liabilities     389       500  
        Total Liabilities     93,916       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     13,872       13,866  
  Accumulated Deficit     (8,017 )     (7,505 )
  Accumulated other comprehensive income loss     (34 )     (63 )
        Total Shareholders' Equity     9,638       10,115  
        Total Liabilities and Shareholders' Equity   $ 103,554     $ 105,163  
                         
                         
                         
New Jersey Community Bank and Subsidiary  
Consolidated Statements of Operations  
(dollars in thousands, except per share data)(unaudited)  
    Three Months Ended     Year Ended  
    June 30,     June 30,  
    2017     2016     2017     2016  
Interest Income                                
  Loans receivable, including fees   $ 861     $ 831     $ 1,702     $ 1,732  
  Investment securities     67       62       135       136  
  Federal funds sold and interest-bearing deposits with banks     19       12       30       25  
  Due from banks - interest bearing     6       16       15       29  
    Total Interest Income     953       921       1,882       1,922  
Interest Expense                                
  Deposits     224       169       428       337  
    Net Interest Income     729       752       1,454       1,585  
Non-Interest Income                                
  Fees and service charges on deposit accounts     21       23       42       46  
  Loan fee income     14       3       16       4  
  Income from bank owned life insurance     22       24       44       47  
  Gain on sale of other real estate owned     -       53       -       53  
  All other income     12       13       22       23  
    Total Non-Interest Income     69       116       124       173  
Non-Interest Expense                                
  Salaries and employee benefits     503       570       1,038       1,176  
  Occupancy and equipment     154       199       312       387  
  Data processing services     64       62       125       122  
  Professional and other fees     246       461       400       623  
  Advertising and promotion     4       6       8       9  
  Federal insurance assessment     17       54       32       110  
  Other operating expenses     88       96       175       194  
    Total Non-Interest Expenses     1,076       1,448       2,090       2,621  
Net Loss   $ (278 )   $ (580 )   $ (512 )   $ (863 )
Loss per share:                                
  Basic and diluted   $ (0.15 )   $ (0.30 )   $ (0.27 )   $ (0.45 )
Weighted average number of common shares outstanding                                
  Basic and diluted     1,908       1,908       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  
  June 30, 2017     June 30, 2016  
  Average         Average     Average         Average  
  Balance     Interest   Rate     Balance     Interest   Rate  
Interest Earning Assets:                                      
  Loans $ 77,395     $ 861   4.46 %   $ 69,482     $ 831   5.18 %
  Investment securities   12,428       67   2.16 %     13,488       62   2.18 %
  Federal funds sold and interest-bearing deposits with banks   7,607       19   1.02 %     10,878       12   0.48 %
  Due from banks - time deposits   1,693       6   1.42 %     5,693       16   0.96 %
                                             
      Total interest-earning assets   99,123       953   3.86 %     99,541       921   4.02 %
Allowance for loan loss   (1,542 )                 (1,569 )            
Cash and due from banks - non-interest bearing   1,165                   1,534              
All other assets   6,304                   6,544              
      Total assets $ 105,050                 $ 106,050              
                                       
Interest Bearing Liabilities:                                      
  Deposits:                                      
    Savings, NOW and money market $ 26,331       27   0.41 %   $ 35,989       28   0.31 %
    Time deposits   58,311       197   1.35 %     45,205       141   1.25 %
      Total interest-bearing deposits   84,642       224   1.06 %     81,194       169   0.83 %
Demand   10,214                   12,842              
Other liabilities   403                   293              
      Total liabilities   95,259                   94,329              
                                       
  Stockholders' equity   9,791                   11,721              
      Total liabilities & stockholders' equity $ 105,050                 $ 106,050              
Net interest income         $ 729                 $ 752      
                                       
Average interest rate spread               2.80 %                 3.19 %
                                       
Net interest margin               2.95 %                 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