New Jersey Community Bank Reports First Quarter 2016 Results
/EINPresswire.com/ -- FREEHOLD, NJ -- (Marketwired) -- 05/09/16 -- New Jersey Community Bank (OTCQB: NJCB) (the "Bank") reported a net loss of $283 thousand, or ($0.15) per share for the three months ended March 31, 2016, compared with a net loss of $46 thousand, or ($0.02) per share for the same period in the prior year.
The earnings for the quarter were negatively impacted largely due to a decline in interest income on loans as a result of a decrease in total loans coupled with a decline in fee income on deposit accounts. The decline in interest income was partially offset by a decrease in interest expense on deposits. Net interest margin decreased 16 basis points year over year primarily due to a moderate decrease in the interest yield on loans.
Balance Sheet Summary
At March 31, 2016, total assets were $102.8 million, a decrease of $8.2 million from December 31, 2015 primarily as a result of decreases in total loans and investment securities. Total cash and cash equivalents increased $1.1 million while due from banks-time deposits decreased $0.7 million. Investment securities available-for-sale decreased $4.5 million as a result of calls on certain government agency securities. Total loans decreased $3.9 million compared to year end 2015 resulting from loan pay-offs.
Total deposits decreased $7.9 million compared to the levels at year end 2015. Savings, NOW and money market accounts decreased $6.1 million and non-interest bearing deposits decreased $2.4 million, slightly offset by $0.6 million increase in total time deposits.
Shareholders' equity totaled $11.5 million at March 31, 2016, decreasing moderately from year-end 2015. The Bank's capital ratios continue to remain strong, with a leverage ratio of 10.84%, common equity tier 1 risk based capital ratio of 14.65% and a total risk based capital ratio of 15.91%. These ratios exceed those needed to be deemed a well-capitalized financial institution.
Results of Operations
For the quarter ended March 31, 2016, net interest income totaled $0.8 million, decreasing $181 thousand over the same period in the prior year. At March 31, 2016, the net interest margin was 3.34%, decreasing 16 basis points compared to the same period a year ago. The yield on average earning assets decreased 20 basis points to 4.02% while the cost of interest-bearing deposits declined 2 basis points to 0.83%, compared to the same period in the prior year, primarily due to low interest rates.
The Bank did not record any provision for loan losses during the first quarter 2016. The allowance for loan losses at period-end was $1.6 million, or 2.28% of total loans. The asset quality continued to be monitored and management will take action 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 $17 thousand to $63 thousand for the quarter ended March 31, 2016, compared with $80 thousand for the same quarter in the prior year. The majority of such decrease is directly related to decreases in fees and service charges on deposit accounts.
Non-interest expense totaled $1.2 million for the quarter ended March 31, 2016, increasing slightly from a year-ago quarter. Of the total increase in non-interest expense, salaries and employee benefits increased $27 thousand as a result of increases in health cost and annual salary increases. Professional and other fees increased $50 thousand largely due to consulting services utilized by the Bank to comply with the Consent Orders among the Bank and the regulators. These increases were offset by decreases in occupancy and equipment expense and other operating expenses. 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 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) 3/31/2016 12/31/2015 9/30/2015 6/30/2015 3/31/2015
--------- ---------- --------- --------- ---------
Summary of
Operations:
Interest income $ 995 $ 1,060 $ 1,118 $ 1,238 $ 1,219
Interest expense 168 185 217 216 211
--------- ---------- --------- --------- ---------
Net interest
income 827 875 901 1,022 1,008
Provision for loan
loss - - 695 - 15
--------- ---------- --------- --------- ---------
Net interest
income after
provision for
loan loss 827 875 206 1,022 993
Non-interest income 63 84 88 86 80
Non-interest expense 1,173 1,254 1,097 1,175 1,149
--------- ---------- --------- --------- ---------
Loss before
income tax
expense
(benefit) (283) (295) (803) (67) (76)
Income tax expense
(benefit) - 1,919 (322) (26) (30)
--------- ---------- --------- --------- ---------
Net loss $ (283) $ (2,214) $ (481) $ (41) $ (46)
========= ========== ========= ========= =========
Per Common Share:
Basic $ (0.15) $ (1.16) $ (0.25) $ (0.02) $ (0.02)
Diluted (0.15) (1.16) (0.25) (0.02) (0.02)
Book value per share 6.05 6.17 7.35 7.56 7.62
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 -1.07% -7.39% -1.50% -0.13% -0.15%
Return on average
common equity -9.66% -63.58% -13.35% -1.13% -1.26%
Average equity to
average assets 11.05% 11.62% 11.21% 11.21% 11.53%
Risk-based capital:
Total risk-based
capital ratio 15.91% 15.21% 15.20% 14.62% 14.51%
Common equity tier
1 risk-based
capital ratio 14.65% 13.95% - - -
Tier 1 risk-based
capital ratio 14.65% 13.95% 13.92% 13.26% 13.26%
Tier 1 leverage
capital ratio 10.84% 9.84% 9.83% 10.20% 10.48%
Financial Condition:
Total assets $ 102,844 $ 111,078 $ 126,250 $ 132,065 $ 129,317
Loans, net of
unearned income 68,759 72,674 77,092 81,914 83,058
Deposits 90,892 98,819 111,779 117,205 114,293
Shareholder's equity 11,535 11,770 14,021 14,420 14,543
New Jersey Community Bank
Statements of Financial Condition
(dollars in thousands, except share data)
March 31, December 31,
2016 2015
------------- -------------
Assets (unaudited)
Cash and due from banks - non-interest
bearing $ 1,682 $ 1,615
Federal funds sold and interest-bearing
deposits with banks 10,814 9,736
------------- -------------
Total Cash and Cash Equivalents 12,496 11,351
Due from banks - time deposits 5,280 6,027
Investment Securities:
Available-for-sale 4,602 9,069
Held-to-maturity 6,277 6,537
------------- -------------
Total Investment Securities 10,879 15,606
Loans Receivable, net of unearned fees 68,760 72,674
Less: Allowance for loan losses (1,569) (1,569)
------------- -------------
Net Loans 67,191 71,105
Premises and equipment, net 2,078 2,128
Accrued interest receivable 227 276
Bank-owned life insurance 3,798 3,774
Deferred tax assets - 17
Other real estate owned 487 -
Other assets 407 794
------------- -------------
Total Assets $ 102,843 $ 111,078
============= =============
Liabilities and Shareholders' Equity
Liabilities
Deposits:
Non-interest bearing $ 12,715 $ 15,155
Savings, NOW and money market 32,744 38,808
Time deposits $250M and over 6,721 6,713
Time deposits, other 38,712 38,143
------------- -------------
Total Deposits 90,892 98,819
Accrued interest payable 9 9
Other liabilities 407 480
------------- -------------
Total Liabilities 91,308 99,308
------------- -------------
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 13,862 13,861
Accumulated Deficit (6,165) (5,883)
Accumulated other comprehensive loss 21 (25)
------------- -------------
Total Shareholders' Equity 11,535 11,770
------------- -------------
Total Liabilities and Shareholders'
Equity $ 102,843 $ 111,078
============= =============
New Jersey Community Bank
Statements of Operations
(dollars in thousands, except per share data)(unaudited)
Three Months Ended
March 31,
----------------------------
2016 2015
------------- -------------
Interest Income
Loans receivable, including fees $ 894 $ 1,114
Investment securities 74 88
Federal funds sold and interest-bearing
deposits with banks 13 4
Due from banks - interest bearing 14 13
------------- -------------
Total Interest Income 995 1,219
------------- -------------
Interest Expense
Deposits 168 211
------------- -------------
Net Interest Income before Provision for
Loan Loss 827 1,008
Provision for Loan Loss - 15
------------- -------------
Net Interest Income after Provision for
Loan Loss 827 993
------------- -------------
Non-Interest Income
Fees and service charges on deposit accounts 22 40
Loan fee income 7 6
Income from bank owned life insurance 23 24
All other income 11 10
------------- -------------
Total Non-Interest Income 63 80
------------- -------------
Non-Interest Expense
Salaries and employee benefits 606 579
Occupancy and equipment 188 206
Data processing services 60 54
Professional and other fees 161 111
Advertising and promotion 4 2
Federal insurance assessment 56 66
Other operating expenses 98 131
------------- -------------
Total Non-Interest Expenses 1,173 1,149
------------- -------------
Loss Before Income Taxes (283) (76)
Income tax expense (benefit) - (30)
------------- -------------
Net Loss $ (283) $ (46)
============= =============
Loss per share:
Basic and diluted $ (0.15) $ (0.02)
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, 2016 March 31, 2015
-------------------------- --------------------------
Average Average Average Average
Balance Interest Rate Balance Interest Rate
-------- -------- ------- -------- -------- -------
Interest Earning
Assets:
Loans $ 69,482 $ 894 5.18% $ 85,146 $ 1,114 5.31%
Investment
securities 13,488 74 2.18% 17,255 88 2.04%
Federal funds sold
and interest-
bearing deposits
with banks 10,878 13 0.48% 7,487 4 0.21%
Due from banks -
time deposits 5,693 14 0.96% 7,042 13 0.75%
-------- -------- ------- -------- -------- -------
Total interest-
earning assets 99,542 995 4.02% 116,930 1,219 4.22%
Allowance for loan
loss (1,569) (1,583)
Cash and due from
banks - non-interest
bearing 1,534 1,505
All other assets 6,544 9,333
-------- --------
Total assets $106,050 $126,185
======== ========
Interest Bearing
Liabilities:
Deposits:
Savings, NOW and
money market $ 35,989 28 0.31% $ 48,587 62 0.52%
Time deposits 45,206 140 1.25% 51,550 149 1.16%
-------- -------- ------- -------- -------- -------
Total interest-
bearing
deposits 81,195 168 0.83% 100,137 211 0.85%
Demand 12,842 10,999
Other liabilities 293 502
-------- --------
Total
liabilities 94,330 111,638
Stockholders' equity 11,721 14,547
-------- --------
Total
liabilities &
stockholders'
equity $106,050 $126,185
======== -------- ======== --------
Net interest income $ 827 $ 1,008
======== ========
Average interest rate
spread 3.19% 3.37%
======= =======
Net interest margin 3.34% 3.50%
======= =======
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
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