FREEHOLD, NJ — (Marketwired) — 10/18/13 — New Jersey Community Bank (OTCQB: NJCB) (the “Bank”) reported net income of $122 thousand, or $0.06 per common share for the three months ended September 30, 2013, compared to the third quarter 2012 earnings of $1 thousand. For the nine months ended September 30, 2013, the Bank reported net income of $326 thousand, or $0.17 per common share compared to net income of $221 thousand, or $0.12 per common share for the same period in the prior year. The earnings for the third quarter and nine months ended September 30, 2012 were negatively impacted by non-interest expense recorded in connection with a settlement with a former executive in the amount of $130 thousand, net of tax effect. Excluding this item, the Bank would have reported earnings of $131 thousand, or $0.07 per common share and $351 thousand, or $0.18 per common share for the third quarter and the nine months ended September 30, 2012, respectively.
Robert D. O-Donnell, Chairman and CEO commented that, “We continue to operate in a difficult and challenging environment for us as well as our peer community banks. We continue to combat intense competition for new loans while maintaining conservative credit discipline. Despite the ultra-competitive environment, we expect to close the fourth quarter and the year 2013 on a positive note. Our -approved but unfunded- loan pipeline remains healthy and our asset quality continues to be strong.”
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, 2013.
At September 30, 2013, total assets were $135.5 million, a decline of $3.1 million from December 31, 2012. Total cash and cash equivalents declined $9.8 million compared to year end 2012, majority of which was offset by increases in investment securities of $4.2 million, loans receivable of $0.8 million, and bank-owned life insurance of $2.0 million, compared to year end 2012.
Total deposits decreased $3.4 million compared to the levels at year end 2012. 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 nine months of 2013. Total time deposits decreased $7.8 million, partially offset by increases in Savings, NOW and money market deposits of $4.0 million and non-interest bearing deposits of $0.4 million, compared to the levels reported at year-end 2012.
Shareholders- equity totaled $15.8 million at September 30, 2013, increasing moderately from year-end 2012. The Bank-s capital ratios remain strong and exceed the regulatory requirements to be deemed a well capitalized financial institution.
For the quarter ended September 30, 2013, net interest income totaled $1.2 million, increasing of $52 thousand over the same period in the prior year. The increase in net interest income was primarily due to declining interest rates on interest-bearing deposits. Net interest margin increased 20 basis points to 3.91% for the quarter ended September 30, 2013, over the comparable quarter in 2012. Average yield on earning assets was 4.62%, increasing 8 basis points over the prior year and average rate on paying liabilities was 0.83%, dropping 34 basis points over the comparable quarter in the prior year.
The provision for loan loss was $105 thousand for the third quarter 2013, an increase of $85 thousand compared to the year-ago quarter. The allowance for loan loss at period-end was $1.4 million, or 1.48% of total loans. Mr. O-Donnell noted, “We funded the allowance this quarter as forecasted while being cautious about the uncertainty surrounding the real estate market. 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 increased $53 thousand to $128 thousand for the quarter ended September 30, 2013 compared with $75 thousand for the same quarter in the prior year. Majority of the increase in non-interest income resulted from increase in cash surrender value of bank-owned life insurance and fees and service charges on deposit accounts.
Non-interest expense totaled $1.0 million for the quarter ended September 30, 2013, a decrease of $182 thousand from year-ago quarter. Salaries and employee benefits decreased $190 thousand, primarily as a result of compensation expense recorded in the prior year in connection with a settlement with a former executive. Occupancy and equipment expense decreased $13 thousand and all other expenses combined increased a net of $21 thousand.
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 and CEO
Terry H. Thompson
President and COO
Naqi A. Naqvi
Executive Vice President & CFO