SOURCE: New Jersey Community Bank

New Jersey Community Bank Reports First Quarter 2014 Results

New Jersey Community Bank (OTCQB: NJCB) (the "Bank") reported net loss of $8 thousand for the three months ended March 31, 2014, compared with a net income of $90 thousand, or $0.05 per common share, for the same period in the prior year. The earnings for the quarter were negatively impacted due to increased levels of non-accruing loans, which in turn affected the interest income on loans. Net interest margin decreased 16 basis points year over year largely due to a decline of 23 basis points in yield of interest-earning assets.

Robert D. O'Donnell, Chairman and CEO, commented that, "The Bank has experienced growing pains, it is no secret that the asset quality and the loan administration issues facing us over the last several months required a continued attention to address these issues. In response to this dilemma, the path chosen by management was not the "quick-fix" but a sustained strategy to identify and repair. I have witnessed our staff respond to these challenges by working harder and smarter at every level in our institution to responsibly produce the results that will ultimately allow us to make our way out of these issues."

Balance Sheet Summary

At March 31, 2014, total assets were $139.7 million, a decline of $4.8 million from December 31, 2013. Total cash and cash equivalents declined $4.5 million compared to year end 2013, offsetting a similar decline in total deposits. Due from banks -- time deposits decreased $1.7 million offset by increases in investment securities of $394 thousand and loans receivable of $786 thousand compared to year end 2013.

Total deposits decreased $4.8 million compared to the levels at year end 2013. Majority of the decrease resulted from the maturing time deposits which were paid off utilizing the excess levels of cash and cash equivalents during the first quarter of 2014. During the quarter, non-interest bearing deposits declined $1.4 million while savings, NOW and money market deposits declined $188 thousand compared to year end 2013.

Shareholders' equity totaled $14.3 million at March 31, 2014, increasing moderately from year-end 2013. 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 March 31, 2014, net interest income totaled $1.1 million, decreasing marginally over the same period in the prior year. At March 31, 2014, net interest margin was 3.40%, a decrease of 16 basis points compared to the same period a year ago resulting from continued low levels of interest rates. At March 31, 2014, yield on average earning assets declined 23 basis points to 4.16% while the cost of interest-bearing deposits declined 7 basis points to 0.90%, compared to the same period in the prior year primarily due to low interest rates.

The provision for loan loss was $60 thousand for the first quarter 2014, an increase of $25 thousand compared to a year-ago quarter. The allowance for loan loss at period-end was $1.7 million, or 1.76% of total loans. The asset quality deteriorated during the quarter that resulted in increasing the provision for loan loss for the quarter, the current level of the allowance for loan loss is considered to be adequate.

Non-interest income increased $45 thousand to $131 thousand for the quarter ended March 31, 2014, compared with $86 thousand for the same quarter in the prior year. Majority of such increase is directly related to the increase in loan fees as well as fees and service charges on deposit accounts and all other income.

Non-interest expense totaled $1.2 million for the quarter ended March 31, 2014, an increase of $159 thousand, from a year-ago quarter. Of the total increase in non-interest expense, salaries and employee benefits increased $59 thousand as a result of increases in staff compensation and health costs. The professional fees and federal insurance assessment each increased $31 thousand due to increase in cost of professional services utilized by the Bank and the changes in insurance assessment rates. Occupancy and equipment expense increased $27 thousand as a result of increases in lease rentals and routine building maintenance.

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)

 

3/31/2014

 

 

12/31/2013

 

 

9/30/2013

 

 

6/30/2013

 

 

3/31/2013

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Summary of Operations:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

$

1,367

 

 

$

1,187

 

 

$

1,456

 

 

$

1,436

 

 

$

1,409

 

 

 

Interest expense

 

 

251

 

 

 

244

 

 

 

223

 

 

 

228

 

 

 

267

 

 

 

 

 

Net interest income

 

 

1,116

 

 

 

943

 

 

 

1,233

 

 

 

1,208

 

 

 

1,142

 

 

Provision for loan and lease loss

 

 

60

 

 

 

660

 

 

 

105

 

 

 

55

 

 

 

35

 

 

 

 

 

Net interest income after provision for loan loss

 

 

1,056

 

 

 

283

 

 

 

1,128

 

 

 

1,153

 

 

 

1,107

 

 

Non-interest income

 

 

132

 

 

 

117

 

 

 

128

 

 

 

118

 

 

 

86

 

 

Non-interest expense

 

 

1,190

 

 

 

3,057

 

 

 

1,041

 

 

 

1,071

 

 

 

1,031

 

 

 

 

 

Income before income tax expense

 

 

(3

)

 

 

(2,657

)

 

 

215

 

 

 

200

 

 

 

162

 

 

Income tax expense

 

 

5

 

 

 

(1,085

)

 

 

93

 

 

 

87

 

 

 

72

 

 

 

 

 

Net income

 

$

(8

)

 

$

(1,573

)

 

$

122

 

 

$

113

 

 

$

90

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Per Common Share(1):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

(0.00

)

 

$

(0.82

)

 

$

0.06

 

 

$

0.06

 

 

$

0.05

 

 

 

 

Diluted

 

 

(0.00

)

 

 

(0.82

)

 

 

0.06

 

 

 

0.06

 

 

 

0.05

 

 

Book value per share

 

 

7.51

 

 

 

7.44

 

 

 

8.29

 

 

 

8.29

 

 

 

8.31

 

 

 

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

 

 

-0.02

%

 

 

-4.48

%

 

 

0.37

%

 

 

0.35

%

 

 

0.26

%

 

 

Return on average common equity

 

 

-0.22

%

 

 

-39.72

%

 

 

3.09

%

 

 

2.82

%

 

 

2.27

%

 

 

Average equity to average assets

 

 

10.15

%

 

 

11.28

%

 

 

11.93

%

 

 

12.33

%

 

 

11.65

%

 

 

Risk-based capital:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total risk-based capital ratio

 

 

13.17

%

 

 

13.62

%

 

 

15.67

%

 

 

16.10

%

 

 

16.20

%

 

 

 

Tier 1 risk-based capital ratio

 

 

11.92

%

 

 

12.36

%

 

 

14.42

%

 

 

14.87

%

 

 

15.00

%

 

 

 

Tier 1 leverage capital ratio

 

 

9.43

%

 

 

9.76

%

 

 

11.86

%

 

 

12.06

%

 

 

11.38

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Financial Condition:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total assets

 

$

139,670

 

 

$

144,503

 

 

$

135,546

 

 

$

130,877

 

 

$

130,946

 

 

Loans, net of unearned income

 

 

95,720

 

 

 

94,934

 

 

 

92,978

 

 

 

91,515

 

 

 

90,736

 

 

Deposits

 

 

123,123

 

 

 

127,940

 

 

 

119,125

 

 

 

114,675

 

 

 

114,614

 

 

Shareholder's equity

 

 

14,330

 

 

 

14,193

 

 

 

15,813

 

 

 

15,810

 

 

 

15,848

 

 

 

 

(1)

 

Data have been restated to give effect to the 5% stock dividend declared and paid in 2013.

 

 

 

 

 

 

 

 

 

New Jersey Community Bank

 

Statements of Financial Condition

 

(dollars in thousands, except share data)

 

 

 

 

 

March 31,

 

 

December 31,

 

 

 

2014

 

 

2013

 

Assets

 

(unaudited)

 

 

 

 

 

 

Cash and due from banks - non-interest bearing

 

$

2,037

 

 

$

1,927

 

 

 

Federal funds sold and interest-bearing deposits with banks

 

 

10,104

 

 

 

14,710

 

 

 

 

 

 

Total Cash and Cash Equivalents

 

 

12,141

 

 

 

16,637

 

 

 

Due from banks - time deposits

 

 

6,126

 

 

 

7,867

 

 

 

Investment Securities:

 

 

 

 

 

 

 

 

 

 

 

Available-for-sale

 

 

14,741

 

 

 

14,644

 

 

 

 

Held-to-maturity

 

 

3,463

 

 

 

3,166

 

 

 

 

 

 

Total Investment Securities

 

 

18,204

 

 

 

17,810

 

 

 

Loans Receivable, net of unearned fees

 

 

95,720

 

 

 

94,934

 

 

 

 

 

Less: Allowance for loan losses

 

 

(1,689

)

 

 

(1,982

)

 

 

 

 

 

Net Loans

 

 

94,031

 

 

 

92,952

 

 

 

Premises and equipment, net

 

 

2,263

 

 

 

2,254

 

 

 

Accrued interest receivable

 

 

331

 

 

 

338

 

 

 

Bank-owned life insurance

 

 

3,603

 

 

 

3,579

 

 

 

Deferred tax assets

 

 

2,007

 

 

 

2,251

 

 

 

Other assets

 

 

964

 

 

 

815

 

 

 

 

 

Total Assets

 

$

139,670

 

 

$

144,503

 

 

 

 

 

 

 

 

 

 

Liabilities and Shareholders' Equity

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

 

 

Non-interest bearing

 

$

11,896

 

 

$

13,270

 

 

 

 

Savings, NOW and money market

 

 

43,328

 

 

 

43,140

 

 

 

 

Time deposits $100M and over

 

 

50,984

 

 

 

53,601

 

 

 

 

Time deposits, other

 

 

16,915

 

 

 

17,929

 

 

 

 

 

Total Deposits

 

 

123,123

 

 

 

127,940

 

 

 

 

 

 

 

 

 

 

 

 

Accrued interest payable

 

 

5

 

 

 

5

 

 

 

Other liabilities

 

 

2,212

 

 

 

2,365

 

 

 

 

 

Total Liabilities

 

 

125,341

 

 

 

130,310

 

 

 

 

 

 

 

 

 

 

 

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

 

 

13,797

 

 

 

13,772

 

 

 

Accumulated Deficit

 

 

(3,041

)

 

 

(3,033

)

 

 

Accumulated other comprehensive income (loss)

 

 

(243

)

 

 

(363

)

 

 

 

 

Total Shareholders' Equity

 

 

14,330

 

 

 

14,193

 

 

 

 

 

Total Liabilities and Shareholders' Equity

 

$

139,670

 

 

$

144,503

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

New Jersey Community Bank

 

 

 

 

 

Statements of Operations

 

 

 

 

 

(dollars in thousands, except per share data)(unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Month Ended

 

 

March 31,

 

 

2014

 

 

2013

Interest Income

 

 

 

 

 

 

 

 

Loans receivable, including fees

 

$

1,254

 

 

$

1,324

 

Investment securities

 

 

96

 

 

 

64

 

Federal funds sold and interest-bearing deposits with banks

 

 

7

 

 

 

9

 

Due from banks - interest bearing

 

 

10

 

 

 

12

 

 

Total Interest Income

 

 

1,367

 

 

 

1,409

Interest Expense

 

 

 

 

 

 

 

 

Deposits

 

 

251

 

 

 

267

 

 

Net Interest Income before Provision for Loan Loss

 

 

1,116

 

 

 

1,142

Provision for Loan Loss

 

 

60

 

 

 

35

 

 

Net Interest Income after Provision for Loan Loss

 

 

1,056

 

 

 

1,107

Non-Interest Income

 

 

 

 

 

 

 

 

Fees and service charges on deposit accounts

 

 

75

 

 

 

59

 

Loan fee income

 

 

20

 

 

 

3

 

All other income

 

 

37

 

 

 

24

 

 

 

 

 

 

 

 

 

 

 

 

Total Non-Interest Income

 

 

131

 

 

 

86

Non-Interest Expense

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

 

652

 

 

 

593

 

Occupancy and equipment

 

 

212

 

 

 

185

 

Data processing services

 

 

47

 

 

 

43

 

Professional and other fees

 

 

117

 

 

 

86

 

Advertising and promotion

 

 

5

 

 

 

6

 

Federal insurance assessment

 

 

60

 

 

 

29

 

Other operating expenses

 

 

97

 

 

 

89

 

 

Total Non-Interest Expenses

 

 

1,190

 

 

 

1,031

 

 

Income Before Income Tax Expense

 

 

(3

)

 

 

162

 

Income tax expense

 

 

5

 

 

 

72

Net Income

 

$

(8

)

 

$

90

Income per share:

 

 

 

 

 

 

 

 

Basic and diluted

 

$

(0.00

)

 

$

0.05

Weighted average number of common shares outstanding

 

 

 

 

 

 

 

 

Basic and diluted

 

 

1,908

 

 

 

1,908

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

New Jersey Community Bank

 

Analysis of Average Balance Sheet and Net Interest Income

 

(unaudited)

 

 

 

 

 

For the Three Months Ended

 

 

 

March 31, 2014

 

 

March 31, 2013

 

 

 

Average

 

 

 

 

Average

 

 

Average

 

 

 

 

Average

 

 

 

Balance

 

 

Interest

 

Rate

 

 

Balance

 

 

Interest

 

Rate

 

Interest Earning Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans

 

$

95,630

 

 

$

1,253

 

5.32

%

 

$

91,315

 

 

$

1,324

 

5.88

%

 

Investment securities

 

 

17,795

 

 

 

96

 

2.16

%

 

 

13,991

 

 

 

64

 

1.83

%

 

Federal funds sold and interest-bearing deposits with banks

 

 

12,804

 

 

 

7

 

0.22

%

 

 

16,485

 

 

 

9

 

0.22

%

 

Due from banks - time deposits

 

 

6,879

 

 

 

10

 

0.61

%

 

 

8,155

 

 

 

12

 

0.60

%

 

 

 

Total interest-earning assets

 

 

133,108

 

 

 

1,367

 

4.16

%

 

 

129,946

 

 

 

1,408

 

4.39

%

Allowance for loan loss

 

 

(1,848

)

 

 

 

 

 

 

 

 

(1,214

)

 

 

 

 

 

 

Cash and due from banks - non-interest bearing

 

 

1,450

 

 

 

 

 

 

 

 

 

1,305

 

 

 

 

 

 

 

All other assets

 

 

8,128

 

 

 

 

 

 

 

 

 

5,485

 

 

 

 

 

 

 

 

 

 

Total assets

 

$

140,838

 

 

 

 

 

 

 

 

$

135,522

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest Bearing Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Savings, NOW and money market

 

$

43,235

 

 

 

49

 

0.46

%

 

$

42,201

 

 

 

54

 

0.52

%

 

 

Time deposits $100M and over

 

 

52,299

 

 

 

149

 

1.15

%

 

 

50,629

 

 

 

145

 

1.16

%

 

 

Time deposits, other

 

 

17,410

 

 

 

54

 

1.25

%

 

 

18,434

 

 

 

68

 

1.50

%

 

 

 

Total interest-bearing deposits

 

 

112,944

 

 

 

252

 

0.90

%

 

 

111,264

 

 

 

267

 

0.97

%

Demand

 

 

12,262

 

 

 

 

 

 

 

 

 

7,985

 

 

 

 

 

 

 

Other liabilities

 

 

1,337

 

 

 

 

 

 

 

 

 

482

 

 

 

 

 

 

 

 

 

 

Total liabilities

 

 

126,543

 

 

 

 

 

 

 

 

 

119,731

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders' equity

 

 

14,293

 

 

 

 

 

 

 

 

 

15,791

 

 

 

 

 

 

 

 

 

 

Total liabilities & stockholders' equity

 

$

140,836

 

 

 

 

 

 

 

 

$

135,522

 

 

 

 

 

 

 

Net interest income

 

 

 

 

 

$

1,115

 

 

 

 

 

 

 

 

$

1,142

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average interest rate spread

 

 

 

 

 

 

 

 

3.26

%

 

 

 

 

 

 

 

 

3.42

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest margin

 

 

 

 

 

 

 

 

3.40

%

 

 

 

 

 

 

 

 

3.56

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


Contacts at New Jersey Community Bank:

Robert D. O'Donnell 
Chairman and CEO 
rodonnell@njcbk.com 

Terry H. Thompson 
President and COO 
tthompson@njcbk.com 

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

 

 

SOURCE: New Jersey Community Bank