New Jersey Community Bank Reports Third Quarter 2014 Results

FREEHOLD, NJ / ACCESSWIRE / October 29, 2014 / New Jersey Community Bank NJCB (the "Bank"), reported net income of $12 thousand, or $0.01 per common share for the three months ended September 30, 2014, compared to the third quarter 2013 earnings of $122 thousand, or $0.06 per common share. For the nine months ended September 30, 2014, the Bank reported net income of $54 thousand, or $0.03 per common share compared with a net income of $326 thousand, or $0.17 per common share for the same period in the prior year.

Robert D. O'Donnell, Chairman and CEO commented that, "Comparatively our earnings have declined for the third quarter and for the year 2014, as our focus has been to improve the level of the asset quality. Our non-performing loans decreased during the quarter as we resolve these credits with the borrowers. Total loans declined as a result of loan pay-offs and reduction in non-performing loans which impacted our interest income on loans. As I have been reporting over the last few quarters, we continue to monitor the asset quality, strengthen the loan underwriting procedures and gain operating efficiencies, all in an effort to return the Bank to profitability and improve shareholder value."

Balance Sheet Summary

At September 30, 2014, total assets were $128.2 million, a decline of $16.3 million from December 31, 2013. Total cash and cash equivalents declined $5.9 million compared to year end 2013, which was offset by a decline in total deposits. Due from banks – time deposits declined $1.8 million and majority of the proceeds were used to fund a pending litigation which was reserved for at year-end 2013. Total investment securities decreased $0.7 million while loans receivable decreased $7.9 million compared to year end 2013. The decrease in loans receivables reflects pay-offs and principal payments exceeding new loan originations, as the Bank works through its asset quality issues. 

Total deposits decreased $14.7 million compared to the levels at year end 2013. The majority of the decrease resulted from the maturing time deposits, which were not renewed, particularly the public fund deposits. Non-interest bearing deposits decreased $0.4 million while Savings, NOW and money market deposits combined increased $3.4 million compared to the levels reported at year-end 2013. Total time deposits decreased $17.8 million.

Shareholders' equity totaled $14.6 million at September 30, 2014, increasing moderately from year-end 2013 primarily due to improvement in accumulated other comprehensive loss. The Bank's capital ratios remain strong and exceed the regulatory requirements to be deemed a well-capitalized financial institution.

Results of Operations

For the quarter ended September 30, 2014, net interest income totaled $1.1 million, decreasing $123 thousand over the same period in the prior year. The decrease in net interest income was a direct result of declining loans receivables and the related yield.  Net interest margin decreased 37 basis points to 3.54% for the quarter ended September 30, 2014, over the comparable quarter in 2013. Average yield on earning assets was 4.33%, decreasing 29 basis points over the prior year and average rate on paying liabilities was 0.92%, increasing 8 basis points over the comparable quarter in the prior year.

The provision for loan loss was $30 thousand for the third quarter 2014, a decrease of $75 thousand compared to the year-ago same quarter. The allowance for loan loss at period-end was $1.4 million, or 1.59% of total loans. The asset quality continued to be unstable, however, management is proactive in analyzing the allowance for loan losses and maintaining at a level that is commensurate with the complexity of the loan portfolio.

Non-interest income decline $36 thousand to $92 thousand for the quarter ended September 30, 2014, largely due to decline in both service charges on deposits and loan fee income compared with the same quarter in the prior year.

Non-interest expense totaled $1.1 million for the quarter ended September 30, 2014, an increase of $100 thousand from year-ago same quarter. The increase in non-interest expense was directly related increases in various components. Salaries and employee benefits increased $18 thousand due to annual salary increases and increased health benefit costs. Data processing costs increased $21 thousand quarter over quarter as a result of onetime expenses associated with the installation of a new core processing system. Professional and other fees increased $23 thousand in part due to increase in audit fees, consulting and legal services utilized by the Bank in connection with complying with the consent order among the Bank, the FDIC and the NJ Department of Banking and Insurance. Also, as a result of the consent order, the federal insurance assessment increased $ 44 thousand for the three months ended September 30, 2014 compared with the same period in the prior 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.

CONTACT:

New Jersey Community Bank:
Robert D. O'Donnell
Chairman and CEO
rodonnell@njcbk.com

Naqi A. Naqvi
Executive Vice President & CFO
nnaqvi@njcbk.com

SOURCE: New Jersey Community Bank