New Jersey Community Bank Reports Third Quarter 20

FREEHOLD, NJ--(Marketwired - Nov 1, 2017) - New Jersey Community Bank ( OTC PINK : NJCB ) (the "Bank") reported a net loss of $375 thousand, or ($0.20) per share for the three months ended September 30, 2017, compared with a net loss of $398 thousand, or ($0.21) per share for the same period in the prior year. For the first nine months of 2017, the Bank reported net loss of $887 thousand, or ($0.46) per common share compared with a net loss of $1.3 million, or ($0.66) per common share for the same period in the prior year. The losses for the first nine months and the third quarter 2017 improved when compared to the prior year largely due to a substantial decline in operating expenses.

The losses for the third quarter 2017 were, in part, further impacted 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 yields despite a marginal decline in average earning assets outstanding year over year. Net interest margin for the quarter increased 10 basis points year over year primarily due to the improved net interest income.

Balance Sheet Summary

At September 30, 2017, total assets were $103.6 million, a decrease of $1.6 million from December 31, 2016. Total cash and cash equivalents decreased $4.6 million while due from banks-time deposits decreased $2.9 million, and total investment securities decreased $755 thousand. Almost all of these decreases were offset by an increase in loans. Loans totaled $83.4 million, increasing $6.6 million compared to year end 2016. The growth in loans was funded utilizing the available liquidity in cash and cash equivalents and due from banks-time deposits.

Total deposits decreased $722 thousand compared to the levels at year end 2016. Non-interest bearing deposits decreased $4.0 million; Savings, NOW and money market accounts decreased $2.8 million; these were substantially offset by a $6.1 million increase in total time deposits. Time deposits increased as a result of deposit promotion on longer term time deposits.

Shareholders' equity totaled $9.3 million at September 30, 2017, decreasing primarily due to net losses reported during the nine months of 2017 when compared to year-end 2016. At September 30, 2017, the Bank reported a leverage ratio of 8.99%; both common equity tier 1 risk based capital and tier 1 risk-based capital ratio of 10.85%; and a total risk based capital ratio of 12.11%. These ratios exceed those needed to be deemed a well-capitalized financial institution.

Results of Operations

For the quarter ended September 30, 2017, net interest income totaled $773 thousand, increasing $24 thousand over the same period in the prior year. At September 30, 2017, the net interest margin was 3.15%, increasing 10 basis points compared to the same period a year ago. The yield on average earning assets increased 30 basis points to 4.10% while the cost of interest-bearing deposits increased 18 basis points to 1.11%, 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 third quarter 2017 and 2016. The allowance for loan losses at period-end was $1.5 million, or 1.80% of total loans. Management continues 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 totaled $56 thousand for the quarter ended September 30, 2017, compared with $60 thousand for the same quarter in the prior year, a moderate decrease compared to last year.

Non-interest expense totaled $1.2 million for the quarter ended September 30, 2017, almost unchanged from a year-ago quarter. Of the total non-interest expenses, salaries and employee benefits is the largest component, increasing $41 thousand from a year-ago quarter primarily due to filling certain open positions. Occupancy and equipment expense declined $25 thousand as a direct result of residual expenses associated with the closure of the Cranbury branch facilities last year. Professional and other fees declined $41 thousand while the FDIC insurance assessment declined $5 thousand as a result of lifting of the Consent Orders. The decline in professional and other fees resulted from reduced consulting and recruiting fees. 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)					9/30/2017				6/30/2017				3/31/2017				12/31/2016				9/30/2016
Summary of Operations:
	Interest income				$	1,005			$	953			$	928			$	939			$	935
	Interest expense					232				224				204				187				186
			Net interest income			773				729				724				752				749
	Non-interest income					56				69				55				59				60
	Non-interest expense					1,204				1,076				1,013				1,170				1,207
			Loss before income tax expense (benefit)			(375	)			(278	)			(234	)			(359	)			(398	)
	Income tax expense (benefit)					-				-				-				2				-
			Net loss		$	(375	)		$	(278	)		$	(234	)		$	(361	)		$	(398	)
Per Common Share:
		Basic			$	(0.20	)		$	(0.15	)		$	(0.12	)		$	(0.19	)		$	(0.21	)
		Diluted				(0.20	)			(0.15	)			(0.12	)			(0.19	)			(0.21	)
	Book value per share					4.85				5.05				5.18				5.30				5.54
	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					-1.45	%			-1.07	%			-0.91	%			-1.44	%			-1.53	%
	Return on average common equity					-15.40	%			-11.25	%			-9.34	%			-13.85	%			-14.78	%
	Average equity to average assets					9.39	%			9.51	%			9.75	%			10.40	%			10.37	%
	Risk-based capital:
		Total risk-based capital ratio				12.11	%			12.87	%			13.94	%			14.08	%			14.96	%
		Common equity tier 1 risk-based capital ratio				10.85	%			11.62	%			12.68	%			12.83	%			13.70	%
		Tier 1 risk-based capital ratio				10.85	%			11.62	%			12.68	%			12.83	%			13.70	%
		Tier 1 leverage capital ratio				8.99	%			9.20	%			9.67	%			10.16	%			10.15	%
Financial Condition:
	Total assets				$	103,572			$	103,554			$	106,718			$	105,163			$	101,890
	Loans, net of unearned income					83,380				80,512				75,665				76,796				71,514
	Deposits					93,816				93,516				96,355				94,538				90,900
	Shareholder's equity					9,263				9,638				9,885				10,115				10,571

New Jersey Community Bank and Subsidiary
Consolidated Statements of Financial Condition
(dollars in thousands, except share data)
							September 30,				December 31,
							2017				2016
Assets							(unaudited)
		Cash and due from banks - non-interest bearing					$	998			$	1,531
		Federal funds sold and interest-bearing deposits with banks						1,328				5,415
					Total Cash and Cash Equivalents			2,326				6,946
		Due from banks - time deposits						1,236				4,175
		Investment Securities:
			Available-for-sale					6,167				6,152
			Held-to-maturity					5,485				6,255
					Total Investment Securities			11,652				12,407
		Loans Receivable, net of unearned fees						83,380				76,796
				Less: Allowance for loan losses				(1,503	)			(1,608	)
					Net Loans			81,877				75,188
		Premises and equipment, net						1,876				1,941
		Accrued interest receivable						294				260
		Bank-owned life insurance						3,933				3,868
		Other assets						378				378
					Total Assets		$	103,572			$	105,163
Liabilities and Shareholders' Equity
	Liabilities
		Deposits:
			Non-interest bearing				$	8,888			$	12,917
			Savings, NOW and money market					25,784				28,570
			Time deposits $250M and over					7,829				7,731
			Time deposits, less than $250M					51,315				45,320
					Total Deposits			93,816				94,538
		Accrued interest payable						13				10
		Other liabilities						480				500
					Total Liabilities			94,309				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						13,875				13,866
		Accumulated Deficit						(8,392	)			(7,505	)
		Accumulated other comprehensive income loss						(37	)			(63	)
					Total Shareholders' Equity			9,263				10,115
					Total Liabilities and Shareholders' Equity		$	103,572			$	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
					September 30,								September 30,
					2017				2016				2017				2016
Interest Income
	Loans receivable, including fees				$	932			$	849			$	2,634			$	2,580
	Investment securities					62				58				197				194
	Federal funds sold and interest-bearing deposits with banks					5				12				35				39
	Due from banks - interest bearing					6				16				21				45
			Total Interest Income			1,005				935				2,887				2,858
Interest Expense
	Deposits					232				186				661				525
			Net Interest Income			773				749				2,226				2,333
Non-Interest Income
	Fees and service charges on deposit accounts					23				23				65				69
	Loan fee income					1				-				17				4
	Income from bank owned life insurance					21				24				65				71
	Gain on sale of other real estate owned					-				-				-				53
	All other income					11				13				34				37
			Total Non-Interest Income			56				60				181				234
Non-Interest Expense
	Salaries and employee benefits					574				533				1,613				1,709
	Occupancy and equipment					144				169				456				556
	Data processing services					63				60				189				182
	Professional and other fees					287				328				687				950
	Advertising and promotion					12				3				19				12
	Federal insurance assessment					23				28				55				138
	Other operating expenses					101				86				275				281
			Total Non-Interest Expenses			1,204				1,207				3,294				3,828
Net Loss					$	(375	)		$	(398	)		$	(887	)		$	(1,261	)
Loss per share:
	Basic and diluted				$	(0.20	)		$	(0.21	)		$	(0.46	)		$	(0.66	)
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
					September 30, 2017										September 30, 2016
					Average							Average			Average							Average
					Balance				Interest			Rate			Balance				Interest			Rate
Interest Earning Assets:
	Loans				$	81,916			$	932		4.51	%		$	71,635			$	849		4.71	%
	Investment securities					11,910				62		2.09	%			10,577				58		2.20	%
	Federal funds sold and interest-bearing deposits with banks					1,611				5		1.29	%			10,293				12		0.48	%
	Due from banks - time deposits					1,798				6		1.41	%			5,334				16		1.21	%
			Total interest-earning assets			97,235				1,005		4.10	%			97,839				935		3.80	%
Allowance for loan loss						(1,503	)									(1,590	)
Cash and due from banks - non-interest bearing						1,203										1,323
All other assets						6,399										6,315
			Total assets		$	103,334									$	103,887
Interest Bearing Liabilities:
	Deposits:
		Savings, NOW and money market			$	25,150				31		0.49	%		$	28,664				26		0.36	%
		Time deposits				57,774				201		1.38	%			51,516				160		1.24	%
			Total interest-bearing deposits			82,924				233		1.11	%			80,180				186		0.93	%
Demand						10,459										12,456
Other liabilities						492										480
			Total liabilities			93,875										93,116
	Stockholders' equity					9,459										10,771
			Total liabilities & stockholders' equity		$	103,334									$	103,887
Net interest income									$	773									$	749
Average interest rate spread												2.99	%									2.87	%
Net interest margin												3.15	%									3.05	%