FREEHOLD, N.J., Feb. 09, 2018 (GLOBE NEWSWIRE) -- New Jersey Community Bank (OTCQB:NJCB) (the “Bank”) reported a net loss of $320 thousand, or ($0.17) per share for the three months ended December 31, 2017, compared with a net loss of $361 thousand, or ($0.19) per share for the same period in the prior year. For 2017, the Bank reported a net loss of $1.2 million, or ($0.63) per common share compared with a net loss of $1.6 million, or ($0.85) per common share for the year 2016. The losses for the year were negatively impacted largely due to one-time expenses associated with the anticipated merger with 1st Constitution Bank, legal fees and certain other expenses. Without such one-time expenses, the Bank would have reported a net loss of $706 thousand for the year 2017.
The losses for the quarter and the year 2017 were, in part, further impacted by the increased cost of deposits as a result of increases in both average volume and interest rates when compared to the same periods in the prior year. Total interest income for the quarter increased primarily as a result of an increase in interest income on loans due to increased loans outstanding year over year complemented by additional yield related fee income on loans. Net interest margin for the quarter increased 37 basis points year over year primarily due to the improved net interest income during the quarter.
Balance Sheet Summary
At December 31, 2017, total assets were $103.1 million, a decrease of $2.0 million from December 31, 2016. Due from banks-time deposits decreased $3.2 million, and total investment securities decreased $1.0 million. These decreases were offset in part by an increase in loans. Loans totaled $79.0 million, increasing $2.2 million compared to year end 2016. The growth in loans was funded utilizing the available liquidity in due from banks-time deposits.
Total deposits decreased $842 thousand compared to the levels at year end 2016. Non-interest bearing deposits decreased $2.1 million; Savings, NOW and money market accounts decreased $3.5 million; these were substantially offset by a $4.8 million increase in total time deposits. Time deposits increased as a result of deposit promotions during the second half of 2017.
Shareholders' equity totaled $8.9 million at December 31, 2017, decreasing primarily due to the net losses reported during the year 2017. At December 31, 2017, the Bank reported a leverage ratio of 8.67%; both common equity tier 1 risk based capital and tier 1 risk-based capital ratio of 11.19%; and a total risk based capital ratio of 12.45%. These ratios exceed those needed to be deemed a well-capitalized financial institution.
Results of Operations
Fourth Quarter 2017
For the quarter ended December 31, 2017, net interest income totaled $872 thousand, increasing $121 thousand over the same period in the prior year, largely due to yield related fee income collected on loans. At December 31, 2017, the net interest margin was 3.55%, increasing 37 basis points compared to the same period a year ago. The yield on average earning assets increased 60 basis points to 4.57%. The cost of interest-bearing deposits increased 23 basis points to 1.17%, 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 fourth quarter 2017 nor for the similar period in 2016. The allowance for loan losses at period-end was $1.5 million, or 1.90% 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 December 31, 2017, compared with $59 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 December 31, 2017, a moderate increase from a year-ago quarter. Of the total non-interest expenses, salaries and employee benefits is the largest component, increasing $73 thousand from a year-ago quarter primarily due to filling certain open positions coupled with utilizing certain temporary assistance. Occupancy and equipment expense increased slightly as a result of change in accounting for deferred rent liability. Professional and other fees declined $115 thousand, while the FDIC insurance assessment increased $36 thousand as a result of changes in quarterly assessment rates. 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.
Full Year 2017
For the full year ended December 31, 2017, net interest income totaled $3.1 million, almost unchanged over the full prior year. While total interest income increased $206 thousand year over year, the category was offset by a similar increase in interest paid on deposits resulting from both the increase in average balances as well as interest yields. On a year over year basis, the yield on interest earning assets increased 18 basis points while the yield on interest bearing deposits increased 19 basis points. Net interest margin for the year declined 3 basis points to 3.16% over prior year.
The Bank did not record any provision for loan losses during the year 2017 nor 2016. Management considers the current level of the allowance for loan loss to be more than adequate.
Non-interest income totaled $238 thousand for the year 2017, reflecting a decrease of $51 thousand over the full year 2016, primarily as a direct result of a decrease in gain on sale of other real estate owned.
Non-interest expense totaled $4.5 million for the full year 2017, a decrease of $470 thousand over prior full year, the majority of which was related to the consulting costs associated with compliance under the regulatory Consent Order and, in part, related to legal expenses in the prior year. Salaries and benefits expense and occupancy and equipment expense declined $23 thousand and $86 thousand respectively, largely due to the closure of the Cranbury branch location in July, 2016. The FDIC insurance assessment declined $47 thousand year over year primarily due to a reduction in premium in early 2017. During late 2017, the Bank incurred certain one-time expenses related to the anticipated merger with 1st Constitution Bank and certain other expenses. Excluding the one-time expenses of approximately $500 thousand, total non-interest expense would have been $4.0 million, or $500 thousand below last year.
The Bank believes that the non-GAAP measurements disclosed within this document are useful for investors, regulators, management and others to evaluate our results of operations and financial condition relative to other financial institutions. These non-GAAP financial measures exclude from corresponding GAAP measures the impact of certain elements that we do not believe are representative of our financial results, which we believe enhance an overall understanding of our performance. The one-time expenses of $500 thousand includes $180 thousand in merger related expenses, $225 thousand in litigation expenses, and $95 thousand in other professional fees.
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.
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
Source: New Jersey Community Bank
| 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) | 12/31/2017 | 9/30/2017 | 6/30/2017 | 3/31/2017 | 12/31/2016 | ||||||||||||||
| Summary of Operations: | |||||||||||||||||||
| Interest income | $ | 1,121 | $ | 1,005 | $ | 953 | $ | 928 | $ | 939 | |||||||||
| Interest expense | 248 | 232 | 224 | 204 | 187 | ||||||||||||||
| Net interest income | 873 | 773 | 729 | 724 | 752 | ||||||||||||||
| Non-interest income | 57 | 56 | 69 | 55 | 59 | ||||||||||||||
| Non-interest expense | 1,235 | 1,204 | 1,076 | 1,013 | 1,170 | ||||||||||||||
| Loss before income tax expense | (305 | ) | (375 | ) | (278 | ) | (234 | ) | (359 | ) | |||||||||
| Income tax expense | 15 | - | - | - | 2 | ||||||||||||||
| Net loss | $ | (320 | ) | $ | (375 | ) | $ | (278 | ) | $ | (234 | ) | $ | (361 | ) | ||||
| Per Common Share: | |||||||||||||||||||
| Basic | $ | (0.17 | ) | $ | (0.20 | ) | $ | (0.15 | ) | $ | (0.12 | ) | $ | (0.19 | ) | ||||
| Diluted | (0.17 | ) | (0.20 | ) | (0.15 | ) | (0.12 | ) | (0.19 | ) | |||||||||
| Book value per share | 4.67 | 4.85 | 5.05 | 5.18 | 5.30 | ||||||||||||||
| 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 | -1.24 | % | -1.45 | % | -1.07 | % | -0.91 | % | -1.44 | % | |||||||||
| Return on average common equity | -13.36 | % | -15.40 | % | -11.25 | % | -9.34 | % | -13.85 | % | |||||||||
| Average equity to average assets | 9.25 | % | 9.39 | % | 9.51 | % | 9.75 | % | 10.40 | % | |||||||||
| Risk-based capital: | |||||||||||||||||||
| Total risk-based capital ratio | 12.45 | % | 12.11 | % | 12.87 | % | 13.94 | % | 14.08 | % | |||||||||
| Common equity tier 1 risk-based capital ratio | 11.19 | % | 10.85 | % | 11.62 | % | 12.68 | % | 12.83 | % | |||||||||
| Tier 1 risk-based capital ratio | 11.19 | % | 10.85 | % | 11.62 | % | 12.68 | % | 12.83 | % | |||||||||
| Tier 1 leverage capital ratio | 8.67 | % | 8.99 | % | 9.20 | % | 9.67 | % | 10.16 | % | |||||||||
| Financial Condition: | |||||||||||||||||||
| Total assets | $ | 103,120 | $ | 103,572 | $ | 103,554 | $ | 106,718 | $ | 105,163 | |||||||||
| Loans, net of unearned income | 78,992 | 83,380 | 80,512 | 75,665 | 76,796 | ||||||||||||||
| Deposits | 93,696 | 93,816 | 93,516 | 96,355 | 94,538 | ||||||||||||||
| Shareholder's equity | 8,920 | 9,263 | 9,638 | 9,885 | 10,115 | ||||||||||||||
| New Jersey Community Bank and Subsidiary | |||||||
| Consolidated Statements of Financial Condition | |||||||
| (dollars in thousands, except share data) | |||||||
| December 31, | December 31, | ||||||
| 2017 | 2016 | ||||||
| Assets | (unaudited) | ||||||
| Cash and due from banks - non-interest bearing | $ | 1,247 | $ | 1,531 | |||
| Federal funds sold and interest-bearing deposits with banks | 5,548 | 5,415 | |||||
| Total Cash and Cash Equivalents | 6,795 | 6,946 | |||||
| Due from banks - time deposits | 987 | 4,175 | |||||
| Investment Securities: | |||||||
| Available-for-sale | 5,949 | 6,152 | |||||
| Held-to-maturity | 5,478 | 6,255 | |||||
| Total Investment Securities | 11,427 | 12,407 | |||||
| Loans Receivable, net of unearned fees | 78,992 | 76,796 | |||||
| Less: Allowance for loan losses | (1,503 | ) | (1,608 | ) | |||
| Net Loans | 77,489 | 75,188 | |||||
| Premises and equipment, net | 1,855 | 1,941 | |||||
| Accrued interest receivable | 267 | 260 | |||||
| Bank-owned life insurance | 3,953 | 3,868 | |||||
| Other assets | 348 | 378 | |||||
| Total Assets | $ | 103,120 | $ | 105,163 | |||
| Liabilities and Shareholders’ Equity | |||||||
| Liabilities | |||||||
| Deposits: | |||||||
| Non-interest bearing | $ | 10,788 | $ | 12,917 | |||
| Savings, NOW and money market | 25,108 | 28,570 | |||||
| Time deposits $250M and over | 7,740 | 7,731 | |||||
| Time deposits, less than $250M | 50,060 | 45,320 | |||||
| Total Deposits | 93,696 | 94,538 | |||||
| Accrued interest payable | 14 | 10 | |||||
| Other liabilities | 491 | 500 | |||||
| Total Liabilities | 94,201 | 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 | 13,878 | 13,866 | |||||
| Accumulated Deficit | (8,712 | ) | (7,505 | ) | |||
| Accumulated other comprehensive loss | (63 | ) | (63 | ) | |||
| Total Shareholders’ Equity | 8,920 | 10,115 | |||||
| Total Liabilities and Shareholders’ Equity | $ | 103,120 | $ | 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 | ||||||||||||||
| December 31, | December 31, | ||||||||||||||
| 2017 | 2016 | 2017 | 2016 | ||||||||||||
| Interest Income | |||||||||||||||
| Loans receivable, including fees | $ | 1,043 | $ | 852 | $ | 3,677 | $ | 3,433 | |||||||
| Investment securities | 61 | 66 | 257 | 264 | |||||||||||
| Federal funds sold and interest-bearing deposits with banks | 13 | 6 | 48 | 44 | |||||||||||
| Due from banks - interest bearing | 4 | 15 | 25 | 60 | |||||||||||
| Total Interest Income | 1,121 | 939 | 4,007 | 3,801 | |||||||||||
| Interest Expense | |||||||||||||||
| Deposits | 248 | 187 | 909 | 711 | |||||||||||
| Net Interest Income before Provision for Loan Loss | 873 | 752 | 3,098 | 3,090 | |||||||||||
| Provision for Loan Loss | - | - | - | - | |||||||||||
| Net Interest Income | 873 | 752 | 3,098 | 3,090 | |||||||||||
| Non-Interest Income | |||||||||||||||
| Fees and service charges on deposit accounts | 21 | 21 | 86 | 90 | |||||||||||
| Loan fee income | 1 | 6 | 18 | 11 | |||||||||||
| Income from bank owned life insurance | 20 | 23 | 85 | 93 | |||||||||||
| Gain on sale of other real estate owned | - | - | - | 53 | |||||||||||
| All other income | 15 | 9 | 49 | 42 | |||||||||||
| Total Non-Interest Income | 57 | 59 | 238 | 289 | |||||||||||
| Non-Interest Expense | |||||||||||||||
| Salaries and employee benefits | 580 | 507 | 2,193 | 2,216 | |||||||||||
| Occupancy and equipment | 174 | 160 | 630 | 716 | |||||||||||
| Data processing services | 68 | 60 | 256 | 242 | |||||||||||
| Professional and other fees | 224 | 340 | 911 | 1,290 | |||||||||||
| Advertising and promotion | 3 | 6 | 22 | 18 | |||||||||||
| Federal insurance assessment | 33 | (4 | ) | 87 | 134 | ||||||||||
| Other operating expenses | 153 | 101 | 429 | 383 | |||||||||||
| Total Non-Interest Expenses | 1,235 | 1,170 | 4,528 | 4,999 | |||||||||||
| Loss Before Income Taxes | (305 | ) | (359 | ) | (1,192 | ) | (1,620 | ) | |||||||
| Income tax expense | 15 | 2 | 15 | 2 | |||||||||||
| Net Loss | $ | (320 | ) | $ | (361 | ) | $ | (1,207 | ) | $ | (1,622 | ) | |||
| Loss per share: | |||||||||||||||
| Basic and diluted | $ | (0.17 | ) | $ | (0.19 | ) | $ | (0.63 | ) | $ | (0.85 | ) | |||
| 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 | ||||||||||||||||||||
| December 31, 2017 | December 31, 2016 | |||||||||||||||||||
| Average | Average | Average | Average | |||||||||||||||||
| Balance | Interest | Rate | Balance | Interest | Rate | |||||||||||||||
| Interest Earning Assets: | ||||||||||||||||||||
| Loans | $ | 80,965 | $ | 1,043 | 5.11 | % | $ | 72,533 | $ | 852 | 4.67 | % | ||||||||
| Investment securities | 11,548 | 61 | 2.10 | % | 11,947 | 66 | 2.19 | % | ||||||||||||
| Federal funds sold and interest-bearing deposits with banks | 3,835 | 13 | 1.32 | % | 4,947 | 6 | 0.52 | % | ||||||||||||
| Due from banks - time deposits | 1,057 | 4 | 1.47 | % | 4,659 | 15 | 1.25 | % | ||||||||||||
| Total interest-earning assets | 97,405 | 1,120 | 4.57 | % | 94,086 | 939 | 3.97 | % | ||||||||||||
| Allowance for loan loss | (1,503 | ) | (1,608 | ) | ||||||||||||||||
| Cash and due from banks - non-interest bearing | 1,145 | 1,311 | ||||||||||||||||||
| All other assets | 6,422 | 6,379 | ||||||||||||||||||
| Total assets | $ | 103,469 | $ | 100,168 | ||||||||||||||||
| Interest Bearing Liabilities: | ||||||||||||||||||||
| Deposits: | ||||||||||||||||||||
| Savings, NOW and money market | $ | 25,619 | 38 | 0.59 | % | $ | 27,664 | 25 | 0.36 | % | ||||||||||
| Time deposits | 58,658 | 210 | 1.42 | % | 51,850 | 162 | 1.24 | % | ||||||||||||
| Total interest-bearing deposits | 84,277 | 248 | 1.17 | % | 79,514 | 187 | 0.93 | % | ||||||||||||
| Demand | 9,600 | 9,820 | ||||||||||||||||||
| Other liabilities | 477 | 415 | ||||||||||||||||||
| Total liabilities | 94,354 | 89,750 | ||||||||||||||||||
| Stockholders' equity | 9,115 | 10,418 | ||||||||||||||||||
| Total liabilities & stockholders' equity | $ | 103,469 | $ | 100,167 | ||||||||||||||||
| Net interest income | $ | 872 | $ | 752 | ||||||||||||||||
| Average interest rate spread | 3.40 | % | 3.04 | % | ||||||||||||||||
| Net interest margin | 3.55 | % | 3.18 | % | ||||||||||||||||
| New Jersey Community Bank and Subsidiary | |||||||||||||||||||
| Analysis of Consolidated Average Balance Sheet and Net Interest Income | |||||||||||||||||||
| (unaudited) | |||||||||||||||||||
| For the Year Ended | |||||||||||||||||||
| December 31, 2017 | December 31, 2016 | ||||||||||||||||||
| Average | Average | Average | Average | ||||||||||||||||
| Balance | Interest | Rate | Balance | Interest | Rate | ||||||||||||||
| Interest Earning Assets: | |||||||||||||||||||
| Loans | $ | 79,145 | $ | 3,677 | 4.65 | % | $ | 70,685 | $ | 3,433 | 4.86 | % | |||||||
| Investment securities | 12,101 | 257 | 2.13 | % | 11,797 | 264 | 2.24 | % | |||||||||||
| Federal funds sold and interest bearing deposits with banks | 4,606 | 48 | 1.04 | % | 9,111 | 44 | 0.49 | % | |||||||||||
| Due from banks - interest bearing | 1,784 | 25 | 1.39 | % | 5,322 | 60 | 1.13 | % | |||||||||||
| Total interest-earning assets | 97,637 | 4,007 | 4.10 | % | 96,915 | 3,801 | 3.92 | % | |||||||||||
| Allowance for loan loss | (1,539 | ) | (1,584 | ) | |||||||||||||||
| Cash and due from banks - non-interest bearing | 1,157 | 1,416 | |||||||||||||||||
| All other assets | 6,391 | 7,283 | |||||||||||||||||
| Total assets | $ | 103,646 | $ | 104,030 | |||||||||||||||
| Interest Bearing Liabilities: | |||||||||||||||||||
| Deposits: | |||||||||||||||||||
| Savings, NOW and money market | $ | 26,249 | 123 | 0.47 | % | $ | 31,047 | 105 | 0.34 | % | |||||||||
| Time deposits $100M and over | 57,496 | 786 | 1.37 | % | 48,642 | 607 | 1.25 | % | |||||||||||
| Total deposits | 83,745 | 909 | 1.09 | % | 79,689 | 712 | 0.89 | % | |||||||||||
| Demand | 9,845 | 12,132 | |||||||||||||||||
| Other liabilities | 473 | 1,155 | |||||||||||||||||
| Total liabilities | 94,063 | 92,976 | |||||||||||||||||
| Stockholders' equity | 9,583 | 11,055 | |||||||||||||||||
| Total liabilities & stockholders' equity | $ | 103,646 | $ | 104,031 | |||||||||||||||
| Net interest income | $ | 3,098 | $ | 3,089 | |||||||||||||||
| Average interest rate spread | 3.01 | % | 3.03 | % | |||||||||||||||
| Net interest margin | 3.16 | % | 3.19 | % | |||||||||||||||