New Jersey Community Bank Reports Fourth Quarter and Full Year Results for 2010

FREEHOLD, N.J., Jan. 19, 2011 (GLOBE NEWSWIRE) -- New Jersey Community Bank (OTCBB:NJCB) (the "Bank") reported net income of $147 thousand, or $0.09 per common share for the three months and year ended December 31, 2010, compared with a net loss of $(417) thousand, or $(0.25) per common share and $(1.4) million, or $(0.85) per common share, respectively, for the same periods in the prior year.

Robert D. O'Donnell, Chairman and CEO commented that, "Despite the unsettled economic environment, our fourth quarter and full year results were positive. However, with the unemployment at a record high, the New Jersey economy remains under duress. With the signs of modest recovery in the future, we remain cautiously optimistic as we step into year 2011."

James A. Kinghorn, President and COO added that, "During the fourth quarter, we continued to combat a slow-growth and low-rate environment that has impacted new loan demand. In the light of these challenges, we were able to report improved operating results for the fourth quarter 2010 and expand our net interest margin year over year. Our credit quality remained stable compared to many of our peers. 'Approved but unfunded' loan pipeline remains healthy and is expected to fund in excess of $5.0 million over the next 90 days."

Balance Sheet Summary

At December 31, 2010, total assets were $111.4 million, an increase of $23.1 million, or 26.2%, over $88.2 million reported at December 31, 2009, primarily as a result of increases in interest-bearing due from banks, investment securities and loans receivable, partially offset by a decrease in cash and cash equivalents. Cash and cash equivalents decreased $10.7 million, or 60.0%, to $7.3 million at December 31, 2010, from $17.9 million at December 31, 2009. The reduction in cash and cash equivalents was used to fund the increases in interest-bearing due from banks and investment securities.

Investment securities increased $4.9 million, or 62.6%, to $12.6 million at December 31, 2010, from $7.8 million reported at December 31, 2009. Total loans receivable increased $26.3 million, or 45.0%, to $84.7 million at December 31, 2010, from $58.4 million reported at December 31, 2009. The increases in both the investment securities and the loans receivable were funded utilizing the liquidity arising from the growth in deposits.

Total deposits grew by $22.9 million, or 30.5%, to $97.9 million during the year 2010. Of the total increase, core deposits, consisting of savings, NOW, money market and demand deposit accounts increased $19.3 million or 84.4%. Time deposits increased $3.6 million or 15.6%. Shareholders' equity totaled $13.4 million as of December 31, 2010. The Bank's capital ratios exceed the regulatory requirements of a well capitalized financial institution.

Results of Operations

Fourth Quarter 2010

For the quarter ended December 31, 2010, net interest income totaled $1.0 million, increasing $413 thousand over the same period in the prior year. The increase in net interest income was primarily due to a combination of both a $25.9 million increase in average earning assets coupled with 51 basis points increase in average yield on earning assets. In addition, during the same period, average paying liabilities increased $25.5 million; while the yield on the paying liabilities declined 44 basis points. Total interest income for the quarter ended December 31, 2010 totaled $1.4 million while the interest expense totaled $355 thousand. Net interest margin improved to 3.88% for the quarter ended December 31, 2010, an increase of 81 basis points over the comparable quarter in 2009.

The provision for loan loss was $141 thousand for the fourth quarter 2010, a decrease of $241 thousand compared to a year-ago quarter. Mr. O'Donnell and Mr. Kinghorn noted, "There were no non-performing loans at December 31, 2010, however, we continue to maintain adequate allowance for loan loss. During the fourth quarter 2010, we charged-off one non-performing loan in the amount of $79 thousand." The allowance for loan loss at period-end was $975 thousand, or 1.15% of total loans.

Non-interest income increased $72 thousand, to $125 thousand for the quarter ended December 31, 2010 compared with $53 thousand for the same quarter in the prior year. Majority of such increase is directly related to the increase in fees and service charges on deposit accounts.

Non-interest expense totaled $864 thousand for the quarter ended December 31, 2010, an increase of $162 thousand from year-ago quarter, primarily due to the growth of the bank. Of the total increase, occupancy and equipment expense increased $68 thousand due to recording of an accounting adjustment. Salaries and employee benefits increased $59 thousand due to addition of personnel.

Full Year 2010

For the full year ended December 31, 2010, net interest income totaled $3.4 million, increasing $1.8 million over the full prior year. The increase in net interest income was primarily due to a combination of both a $39.0 million increase in average earning assets coupled with 41 basis points increase in average yield on earning assets. During the year, average paying liabilities increased $38.6 million; while the yield on the paying liabilities declined 56 basis points. Total interest income for the year 2010 was $4.9 million while the interest expense totaled $1.5 million. Net interest margin improved to 3.45% for the year 2010, an increase of 69 basis points over the full year 2009.

The provision for loan loss was $472 thousand for the year, a decrease of $247 thousand compared to prior year, primarily related to a $300 thousand loan charge-off in 2009. During the year 2010, the Bank charged-off two non-performing loans totaling $162 thousand.

Non-interest income increased $251 thousand, to $412 thousand for the full year 2010 compared with $161 thousand in the prior year. Majority of such increase is directly related to the increase in fees and service charges on deposit accounts.

Non-interest expense totaled $3.2 million for the full year 2010, an increase of $719 thousand over prior full year. Of the total increase, salaries and employee benefits increased $417 thousand and occupancy and equipment expense increased $151 thousand. Increase in total non-interest expense is primarily due to addition of personnel, increased health benefits cost and the overall growth of the bank including an entire year of operations of the Neptune City branch office.

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 county 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.

The New Jersey Community Bank logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=7748

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.