New Jersey Community Bank Reports First Quarter 2017 Results
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E-mailFREEHOLD, NJ -- (Marketwired) -- 05/05/17 -- New Jersey Community Bank (OTCQB: NJCB) (the "Bank") reported a net loss of $234 thousand, or ($0.12) per share for the three months ended March 31, 2017, compared with a net loss of $283 thousand, or ($0.15) 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 declining interest yield despite an increase in average loans outstanding year over year. In addition, the interest expense on paying deposits increased year over year as a result of increased cost of time deposits. Net interest margin decreased 31 basis points year over year primarily due to the reasons noted above. The decline in net interest income was more than offset by decline in total operating expenses.
Balance Sheet Summary
At March 31, 2017, total assets were $106.7 million, an increase of $1.6 million from December 31, 2016 primarily as a result of an increase in overnight funds sold. Total cash and cash equivalents increased $5.2 million while due from banks-time deposits decreased $2.5 million. Total loans decreased $1.1 million compared to year end 2016 resulting from loan pay-offs.
Total deposits increased $1.8 million compared to the levels at year end 2016. Non-interest bearing deposits decreased $2.7 million; Savings, NOW and money market accounts decreased $1.4 million; these were offset by a $5.9 million increase in total time deposits. Time deposits increased as a result of deposit promotion on longer term time deposits.
Shareholders' equity totaled $9.9 million at March 31, 2017, decreasing primarily due to net losses reported during the first quarter of 2017 when compared to year-end 2016. The Bank's capital ratios continue to remain strong, with a leverage ratio of 9.67%, common equity tier 1 risk based capital ratio of 12.68% and a total risk based capital ratio of 13.94%. These ratios exceed those needed to be deemed a well-capitalized financial institution.
Results of Operations
For the quarter ended March 31, 2017, net interest income totaled $724 thousand, decreasing $103 thousand over the same period in the prior year. At March 31, 2017, the net interest margin was 3.03%, decreasing 31 basis points compared to the same period a year ago. The yield on average earning assets decreased 14 basis points to 3.88% while the cost of interest-bearing deposits increased 15 basis points to 0.99%, 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 first quarter 2017 and 2016. The allowance for loan losses at period-end was $1.6 million, or 2.13% of total loans. The asset quality continued to be monitored and management will take actions 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 $8 thousand to $55 thousand for the quarter ended March 31, 2017, compared with $63 thousand for the same quarter in the prior year. The majority of such decrease is directly related to decrease in fee income on loans.
Non-interest expense totaled $1.0 million for the quarter ended March 31, 2017, decreasing $160 thousands from a year-ago quarter. Of the total decrease in non-interest expense, salaries and employee benefits decreased $71 thousand as a result of a reduction in head count while management is attempting to fill certain open positions. Occupancy and equipment expense declined $30 thousand as a direct result of the closure of one of the branch facilities. FDIC insurance assessment declined $41 thousand as a result of lifting of the Consent Orders. All other components of total non-interest expenses showed moderate variances.
The Bank announced the appointment of Mr. James M. Burns to the Board of the Bank. Mr. Burns is a co-founder and partner in the law firm of Genova Burns LLC. He has served on the Boards of several organizations including New Jersey Institute of Technology, Covenant House International and Community Health Charities. He is currently serving on the boards of Integrity House and the Hudson County Chamber of Commerce.
Separately, the Bank announced that director William E. Sansone chose not to stand for the re-election to the Board of the Bank.
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) 3/31/2017 12/31/2016 9/30/2016 6/30/2016 3/31/2016
--------- ---------- --------- --------- ---------
Summary of
Operations:
Interest income $ 928 $ 939 $ 935 $ 932 $ 995
Interest expense 204 187 186 170 168
--------- ---------- --------- --------- ---------
Net interest
income 724 752 749 762 827
Non-interest income 55 59 60 107 63
Non-interest expense 1,013 1,170 1,207 1,449 1,173
--------- ---------- --------- --------- ---------
Loss before
income tax
expense
(benefit) (234) (359) (398) (580) (283)
Income tax expense
(benefit) - 2 - - -
--------- ---------- --------- --------- ---------
Net loss $ (234) $ (361) $ (398) $ (580) $ (283)
========= ========== ========= ========= =========
Per Common Share:
Basic $ (0.12) $ (0.19) $ (0.21) $ (0.30) $ (0.15)
Diluted (0.12) (0.19) (0.21) (0.30) (0.15)
Book value per share 5.18 5.30 5.54 5.75 6.05
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 -0.91% -1.44% -1.53% -2.25% -1.07%
Return on average
common equity -9.34% -13.85% -14.78% -20.49% -9.66%
Average equity to
average assets 9.75% 10.40% 10.37% 10.99% 11.05%
Risk-based
capital:
Total risk-based
capital ratio 13.94% 14.08% 14.96% 15.23% 15.91%
Common equity
tier 1 risk-
based capital
ratio 12.68% 12.83% 13.70% 13.98% 14.65%
Tier 1 risk-
based capital
ratio 12.68% 12.83% 13.70% 13.98% 14.65%
Tier 1 leverage
capital ratio 9.67% 10.16% 10.15% 10.67% 10.84%
Financial Condition:
Total assets $ 106,718 $ 105,163 $ 101,890 $ 103,279 $ 102,844
Loans, net of
unearned income 75,665 76,796 71,514 71,343 68,759
Deposits 96,355 94,538 90,900 91,795 90,892
Shareholder's
equity 9,885 10,115 10,571 10,967 11,535
New Jersey Community Bank and Subsidiary
Consolidated Statements of Financial Condition
(dollars in thousands, except share data)
March 31, December 31,
2017 2016
------------ ------------
Assets (unaudited)
Cash and due from banks - non-interest
bearing $ 1,143 $ 1,531
Federal funds sold and interest-bearing
deposits with banks 10,961 5,415
------------ ------------
Total Cash and Cash Equivalents 12,104 6,946
Due from banks - time deposits 1,685 4,175
Investment Securities:
Available-for-sale 6,488 6,152
Held-to-maturity 5,998 6,255
------------ ------------
Total Investment Securities 12,486 12,407
Loans Receivable, net of unearned fees 75,665 76,796
Less: Allowance for loan losses (1,610) (1,608)
------------ ------------
Net Loans 74,055 75,188
Premises and equipment, net 1,918 1,941
Accrued interest receivable 237 260
Bank-owned life insurance 3,889 3,868
Other assets 344 378
------------ ------------
Total Assets $ 106,718 $ 105,163
============ ============
Liabilities and Shareholders' Equity
Liabilities
Deposits:
Non-interest bearing $ 10,236 $ 12,917
Savings, NOW and money market 27,210 28,570
Time deposits $250M and over 7,288 7,731
Time deposits, other 51,621 45,320
------------ ------------
Total Deposits 96,355 94,538
Accrued interest payable 12 10
Other liabilities 466 500
------------ ------------
Total Liabilities 96,833 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 13,869 13,866
Accumulated Deficit (7,739) (7,505)
Accumulated other comprehensive income loss (62) (63)
------------ ------------
Total Shareholders' Equity 9,885 10,115
------------ ------------
Total Liabilities and Shareholders'
Equity $ 106,718 $ 105,163
============ ============
New Jersey Community Bank and Subsidiary
Consolidated Statements of Operations
(dollars in thousands, except per share data)(unaudited)
--------------------------
Three Months Ended
March 31,
--------------------------
2017 2016
------------ ------------
Interest Income
Loans receivable, including fees $ 841 $ 894
Investment securities 67 74
Federal funds sold and interest-bearing
deposits with banks 11 13
Due from banks - interest bearing 9 14
------------ ------------
Total Interest Income 928 995
------------ ------------
Interest Expense
Deposits 204 168
------------ ------------
Net Interest Income 724 827
------------ ------------
Non-Interest Income
Fees and service charges on deposit accounts 21 22
Loan fee income 2 7
Income from bank owned life insurance 22 23
All other income 10 11
------------ ------------
Total Non-Interest Income 55 63
------------ ------------
Non-Interest Expense
Salaries and employee benefits 535 606
Occupancy and equipment 158 188
Data processing services 62 60
Professional and other fees 154 161
Advertising and promotion 4 4
Federal insurance assessment 15 56
Other operating expenses 85 98
------------ ------------
Total Non-Interest Expenses 1,013 1,173
------------ ------------
Net Loss $ (234) $ (283)
============ ============
Loss per share:
Basic and diluted $ (0.12) $ (0.15)
Weighted average number of common shares
outstanding
Basic and diluted 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
March 31, 2017 March 31, 2016
-------------------------- --------------------------
Average Average Average Average
Balance Interest Rate Balance Interest Rate
-------- -------- ------- -------- -------- -------
Interest Earning
Assets:
Loans $ 76,296 $ 841 4.47% $ 69,482 $ 894 5.18%
Investment
securities 12,531 67 2.15% 13,488 74 2.18%
Federal funds sold
and interest-
bearing deposits
with banks 5,421 11 0.80% 10,878 13 0.48%
Due from banks -
time deposits 2,606 9 1.33% 5,693 14 0.96%
-------- -------- ------- -------- -------- -------
Total
interest-
earning
assets 96,855 928 3.88% 99,541 995 4.02%
Allowance for loan
loss (1,609) (1,569)
Cash and due from
banks - non-
interest bearing 1,116 1,534
All other assets 6,403 6,544
-------- --------
Total assets $102,764 $106,050
======== ========
Interest Bearing
Liabilities:
Deposits:
Savings, NOW and
money market $ 27,934 27 0.39% $ 35,989 28 0.31%
Time deposits 55,199 177 1.30% 45,205 140 1.25%
-------- -------- ------- -------- -------- -------
Total
interest-
bearing
deposits 83,134 204 0.99% 81,194 168 0.83%
Demand 9,094 12,842
Other liabilities 520 293
-------- --------
Total
liabilities 92,747 94,329
Stockholders'
equity 10,017 11,721
-------- --------
Total
liabilities &
stockholders'
equity $102,764 $106,050
======== -------- ======== --------
Net interest income $ 724 $ 827
======== ========
Average interest
rate spread 2.89% 3.19%
======= =======
Net interest margin 3.03% 3.34%
======= =======
Contacts at New Jersey Community Bank: William H. Placke Chairman, President and CEO [email protected] Naqi A. Naqvi Executive Vice President & CFO [email protected]
Source: New Jersey Community Bank
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