FREEHOLD, NJ--(Marketwire - Jul 20, 2012) - New Jersey Community Bank (OTCBB: NJCB) (the "Bank") reported net income of $112 thousand, or $0.06 per common share for the three months ended June 30, 2012, compared to the second quarter 2011 earnings of $159 thousand, or $0.09 per common share. For the first six months of 2012, the Bank reported net income of $220 thousand, or $0.12 per common share compared with a net income of $300 thousand, or $0.16 per common share for the same period in the prior year.

Robert D. O'Donnell, Chairman, President and CEO commented that, "The outlook for the banking industry remains cloudy and complex, affecting both our customers and competitors, and the economic uncertainty will continue to pressure consumers. Our new loan demand has softened; however, we continue to explore ways to diversify our earnings sources. Though the lending opportunities are constrained by the uncertain economic environment, we will continue to focus on the financial needs in the communities we serve. Our earnings year over year reflect an increase in non-interest expense resulting directly from the addition of the new branch office, offset by a decrease in provision for loan loss in the same period."

All common share data presented in this press release including earnings per common share data was adjusted to reflect a five percent stock dividend issued on May 31, 2012.

Balance Sheet Summary

At June 30, 2012, total assets were $131.3 million, a moderate decrease compared to year end 2011. Total cash and cash equivalents and due from banks time deposits totaled $18.1 million, a decrease of $2.9 million from year end 2011. Total investment securities were almost unchanged from year end 2011 while loans receivable increased $2.5 million from December 31, 2011.

Deposits totaled $115.3 million at June 30, 2012, a decrease of $1.1 million from year end 2011. Of the total decrease in deposits, time deposits decreased $5.8 million, offset by an increase of $1.4 million in demand deposits and $3.3 million in savings, NOW and money market deposits. Shareholders' equity totaled $15.6 million at June 30, 2012. The Bank's capital ratios remain strong and exceed the regulatory requirements of a well capitalized financial institution.

Results of Operations

For the quarter ended June 30, 2012, net interest income totaled $1.1 million, a moderate decrease of $13 thousand over the same period in the prior year. The decrease in net interest income was primarily due to declining interest rates despite an increase in both average earning assets and interest-bearing deposits. Net interest margin declined 28 basis points to 3.60% for the quarter ended June 30, 2012, over the comparable quarter in 2011. Average yield on earning assets was 4.62%, dropping 48 basis points over the prior year and average rate on paying liabilities was 1.20%, dropping 22 basis points over the comparable quarter in the prior year.

The provision for loan loss was $25 thousand for the second quarter 2012, a decrease of $59 thousand compared to the year-ago quarter. The allowance for loan loss at period-end was $1.2 million, or 1.29% of total loans. Mr. O'Donnell noted, "We monitor the adequacy of the allowance for loan loss on an ongoing basis and consider the current level of the allowance for loan loss to be adequate."

Non-interest income decreased $22 thousand to $77 thousand for the quarter ended June 30, 2012 compared with $99 thousand for the same quarter in the prior year. The majority of the decrease is directly related to a decrease in fees and service charges on deposit accounts.

Non-interest expense totaled $994 thousand for the quarter ended June 30, 2012, an increase of $109 thousand from year-ago quarter, primarily due to the addition of a new branch office. Of the total increase, salaries and employee benefits increased $57 thousand, occupancy and equipment expense increased $32 thousand and all other expenses combined increased a net of $20 thousand.

Subsequent to quarter end, the Bank settled a lawsuit brought by a former employee. As a result of the settlement, the Bank will recognize $163 thousand, net of tax effect, in additional non-interest expense in the third quarter of 2012.

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)				6/30/2012				3/31/2012				12/31/2011				9/30/2011				6/30/2011
Summary of Operations:
	Interest income			$	1,465			$	1,459			$	1,464			$	1,509			$	1,516
	Interest expense				323				351				380				382				362
		Net interest income			1,142				1,108				1,084				1,127				1,154
	Provision for loan and lease loss				25				45				35				30				84
		Net interest income after provision for loan loss			1,117				1,063				1,049				1,097				1,070
	Non-interest income				77				102				127				99				99
	Non-interest expense				994				974				964				989				884
		Income before income tax expense			200				191				212				207				285
	Income tax expense				88				83				74				94				126
		Net income		$	112			$	108			$	138			$	113			$	159
Per Common Share(1):
		Basic		$	0.06			$	0.06			$	0.08			$	0.06			$	0.09
		Diluted			0.06				0.06				0.08				0.06				0.09
	Book value per share				8.57				8.47				8.41				8.38				8.26
		Average shares outstanding			1,818				1,818				1,818				1,818				1,818
		Average diluted shares outstanding			1,818				1,818				1,818				1,818				1,818
Selected Financial Ratios:
	Return on average assets				0.34	%			0.32	%			0.43	%			0.35	%			0.52	%
	Return on average common equity				2.90	%			2.81	%			3.62	%			3.00	%			4.29	%
	Average equity to average assets				11.80	%			11.47	%			11.73	%			11.70	%			12.03	%
	Risk-based capital:
		Total risk-based capital ratio			16.15	%			16.67	%			16.39	%			16.35	%			15.58	%
		Tier 1 risk-based capital ratio			14.99	%			15.49	%			15.25	%			15.16	%			14.43	%
		Tier 1 leverage capital ratio			11.50	%			11.16	%			11.41	%			11.17	%			11.50	%
Financial Condition:
	Total assets			$	131,336			$	132,176			$	132,050			$	129,402			$	125,826
	Loans, net of unearned income				90,440				87,794				87,857				86,938				89,678
	Deposits				115,345				116,385				116,394				113,821				110,518
	Shareholder's equity				15,587				15,406				15,293				15,231				15,024
(1) Data have been restated to give effect to the 5% stock dividend paid in 2012.

 

New Jersey Community Bank
Statements of Financial Condition
(dollars in thousands, except share data)
								June 30,				December 31,
								2012				2011
Assets									(unaudited)
		Cash and due from banks - non-interest bearing						$	944			$	1,519
		Federal funds sold and interest-bearing deposits with banks							11,510				12,877
					Total Cash and Cash Equivalents				12,454				14,396
		Due from banks - time deposits							5,671				6,671
		Investment Securities:
			Available-for-sale						17,132				18,719
			Held-to-maturity						2,943				1,469
					Total Investment Securities				20,075				20,188
		Loans Receivable, net of unearned income							90,440				87,857
				Less: Allowance for loan losses					(1,164	)			(1,101	)
					Net Loans				89,276				86,756
		Premises and equipment, net							2,529				2,610
		Accrued interest receivable							375				363
		Deferred tax assets							617				753
		Other assets							339				281
					Total Assets			$	131,336			$	132,018
Liabilities and Shareholders' Equity
	Liabilities
		Deposits:
			Non-interest bearing					$	7,446			$	6,057
			Savings, NOW and money market						39,835				36,508
			Time deposits $100M and over						46,510				50,483
			Time deposits, other						21,554				23,346
					Total Deposits				115,345				116,394
		Accrued interest payable							13				15
		Other liabilities							391				316
						Total Liabilities			115,749				116,725
	Shareholders' Equity
		Common stock, $2 par value; authorized 10,000,000 shares; issued and outstanding 1,817,662 and 1,648,783 shares, respectively							3,635				3,462
		Surplus							13,804				13,930
		Accumulated Deficit							(1,928	)			(2,147	)
		Accumulated other comprehensive income (loss)							76				48
						Total Shareholders' Equity			15,587				15,293
						Total Liabilities and Shareholders' Equity		$	131,336			$	132,018

 

New Jersey Community Bank
Statements of Income
(unaudited) (dollars in thousands, except per share data)
				Three Months Ended						Six Months Ended
				June 30,						June 30,
				2012			2011			2012			2011
Interest Income
	Loans receivable, including fees			$	1,345		$	1,411		$	2,684		$	2,761
	Investment securities				104			92			205			169
	Federal funds sold and interest-bearing deposits with banks				7			5			14			8
	Due from banks - interest bearing				9			9			20			18
		Total Interest Income			1,465			1,517			2,923			2,955
Interest Expense
	Deposits				323			362			674			697
		Net Interest Income before Provision for Loan Loss			1,142			1,155			2,249			2,258
Provision for Loan Loss					25			84			70			178
		Net Interest Income after Provision for Loan Loss			1,117			1,071			2,179			2,080
Non-Interest Income
	Fees and service charges on deposit accounts				53			87			144			168
	Loan fee income				13			6			16			11
	All other income				11			6			20			14
		Total Non-Interest Income			77			99			180			192
Non-Interest Expense
	Salaries and employee benefits				587			530			1,151			1,017
	Occupancy and equipment				189			157			379			313
	Data processing services				38			34			78			65
	Professional and other fees				69			48			135			106
	Advertising and promotion				5			9			17			18
	Federal insurance assessment				28			29			57			72
	Other operating expenses				78			78			152			142
		Total Non-Interest Expenses			994			885			1,969			1,734
		Income Before Income Tax Expense			200			285			390			539
	Income tax expense				88			126			170			239
Net Income				$	112		$	159		$	220		$	300
Income per share:
	Basic and diluted			$	0.06		$	0.09		$	0.12		$	0.16
Weighted average number of common shares outstanding
	Basic and diluted				1,818			1,818			1,818			1,818

 

New Jersey Community Bank
Analysis of Average Balance Sheet and Net Interest Income
					For the Three Months Ended
					June 30, 2012									June 30, 2011
					Average							Average		Average							Average
					Balance				Interest			Rate		Balance				Interest			Rate
Interest Earning Assets:
	Loans				$	88,249			$	1,345		6.13	%	$	90,195			$	1,411		6.28	%
	Investment securities					20,795				104		2.00	%		15,004				92		2.45	%
	Federal funds sold and interest-bearing deposits with banks					12,776				7		0.21	%		10,478				5		0.18	%
	Due from banks - time deposits					5,602				9		0.63	%		3,598				9		1.03	%
			Total interest-earning assets			127,422				1,465		4.62	%		119,275				1,517		5.10	%
Allowance for loan loss						(1,152	)								(1,095	)
Cash and due from banks - non-interest bearing						1,244									1,274
All other assets						3,900									4,294
			Total assets		$	131,414								$	123,748
Interest Bearing Liabilities:
	Deposits:
		Savings, NOW and money market			$	39,480				74		0.75	%	$	30,067				82		1.10	%
		Time deposits $100M and over				46,927				162		1.38	%		49,589				185		1.50	%
		Time deposits, other				21,653				87		1.62	%		22,346				95		1.70	%
			Total interest-bearing deposits			108,060				323		1.20	%		102,002				362		1.42	%
Demand						7,401									6,601
Other liabilities						446									261
			Total liabilities			115,907									108,864
	Stockholders' equity					15,507									14,884
			Total liabilities & stockholders' equity		$	131,414								$	123,748
Net interest income									$	1,142								$	1,155
Average interest rate spread												3.42	%								3.67	%
Net interest margin												3.60	%								3.88	%