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New Jersey Community Bank Reports Third Quarter 2017 Results

/EINPresswire.com/ -- 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 %
                                         
                                         

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