FREEHOLD, NJ--(Marketwired - May 5, 2017) - New Jersey Community Bank (
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 | % | |||||||||||||||||||
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
