FREEHOLD, NJ — (Marketwire) — 07/20/12 — New Jersey Community Bank (OTCBB: NJCB) (the “Bank”) reported net income of $112 thousand, or $0.06 per common share for the three months ended June 30, 2012, compared to the second quarter 2011 earnings of $159 thousand, or $0.09 per common share. For the first six months of 2012, the Bank reported net income of $220 thousand, or $0.12 per common share compared with a net income of $300 thousand, or $0.16 per common share for the same period in the prior year.
Robert D. O-Donnell, Chairman, President and CEO commented that, “The outlook for the banking industry remains cloudy and complex, affecting both our customers and competitors, and the economic uncertainty will continue to pressure consumers. Our new loan demand has softened; however, we continue to explore ways to diversify our earnings sources. Though the lending opportunities are constrained by the uncertain economic environment, we will continue to focus on the financial needs in the communities we serve. Our earnings year over year reflect an increase in non-interest expense resulting directly from the addition of the new branch office, offset by a decrease in provision for loan loss in the same period.”
All common share data presented in this press release including earnings per common share data was adjusted to reflect a five percent stock dividend issued on May 31, 2012.
At June 30, 2012, total assets were $131.3 million, a moderate decrease compared to year end 2011. Total cash and cash equivalents and due from banks time deposits totaled $18.1 million, a decrease of $2.9 million from year end 2011. Total investment securities were almost unchanged from year end 2011 while loans receivable increased $2.5 million from December 31, 2011.
Deposits totaled $115.3 million at June 30, 2012, a decrease of $1.1 million from year end 2011. Of the total decrease in deposits, time deposits decreased $5.8 million, offset by an increase of $1.4 million in demand deposits and $3.3 million in savings, NOW and money market deposits. Shareholders- equity totaled $15.6 million at June 30, 2012. The Bank-s capital ratios remain strong and exceed the regulatory requirements of a well capitalized financial institution.
For the quarter ended June 30, 2012, net interest income totaled $1.1 million, a moderate decrease of $13 thousand over the same period in the prior year. The decrease in net interest income was primarily due to declining interest rates despite an increase in both average earning assets and interest-bearing deposits. Net interest margin declined 28 basis points to 3.60% for the quarter ended June 30, 2012, over the comparable quarter in 2011. Average yield on earning assets was 4.62%, dropping 48 basis points over the prior year and average rate on paying liabilities was 1.20%, dropping 22 basis points over the comparable quarter in the prior year.
The provision for loan loss was $25 thousand for the second quarter 2012, a decrease of $59 thousand compared to the year-ago quarter. The allowance for loan loss at period-end was $1.2 million, or 1.29% of total loans. Mr. O-Donnell noted, “We monitor the adequacy of the allowance for loan loss on an ongoing basis and consider the current level of the allowance for loan loss to be adequate.”
Non-interest income decreased $22 thousand to $77 thousand for the quarter ended June 30, 2012 compared with $99 thousand for the same quarter in the prior year. The majority of the decrease is directly related to a decrease in fees and service charges on deposit accounts.
Non-interest expense totaled $994 thousand for the quarter ended June 30, 2012, an increase of $109 thousand from year-ago quarter, primarily due to the addition of a new branch office. Of the total increase, salaries and employee benefits increased $57 thousand, occupancy and equipment expense increased $32 thousand and all other expenses combined increased a net of $20 thousand.
Subsequent to quarter end, the Bank settled a lawsuit brought by a former employee. As a result of the settlement, the Bank will recognize $163 thousand, net of tax effect, in additional non-interest expense in the third quarter of 2012.
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 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.
Contacts at New Jersey Community Bank:
Robert D. O-Donnell
Chairman, President and CEO
Naqi A. Naqvi
Executive Vice President & CFO