New Jersey Community Bank Reports Third Quarter 2017 Results
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E-mailFREEHOLD, NJ -- (Marketwired) -- 11/01/17 -- 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 [email protected] Naqi A. Naqvi Executive Vice President & CFO [email protected]
Source: New Jersey Community Bank
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