FREEHOLD, NJ--(Marketwired - Mar 4, 2016) - New Jersey Community Bank (OTCQB: NJCB) (the "Bank") reported a net loss of $2.2 million, or $(1.16) per common share for the three months ended December 31, 2015, compared to a net loss of $123 thousand, or $(0.06) per common share for the three months ended December 31, 2014. For the year 2015, the Bank reported a net loss of $2.8 million, or $(1.46) per common share compared with net loss of $68 thousand, or $(0.04) per common share for the year ended December 31, 2014.

The earnings for the year 2015 were negatively impacted by a valuation allowance recorded against the deferred tax assets. The earnings were further impacted by increases in professional fees as the Bank satisfies the requirements of the regulatory Consent Orders. The Provision for Loan Losses continues to burden the Bank's earnings as management attempts to address its asset quality and problem credits.

Annual Meeting Date

The Board of Directors voted that the Annual Meeting of Shareholders shall be held on April 21, 2016 at the American Hotel in Freehold, New Jersey at 9:30am. The record date of March 8, 2016 was established for the determination of the shareholders entitled to notice of, and to vote at, the annual meeting.

Balance Sheet Summary

At December 31, 2015, total assets were $111.1 million, a decrease of $10.9 million compared to year end 2014, primarily due to the decline in total loans. Total cash and cash equivalents were $11.4 million, an increase of $5.5 million from year end 2014. Total investment securities decreased $1.1 million to $15.6 million at December 31, 2015 compared with year end 2014.

Gross loans receivable decreased $13.4 million from December 31, 2014, primarily due to pay-offs of certain loans. The cash flow resulting from the decrease in total loans was largely used to fund the run-off of deposits and supported the increase in cash and cash equivalents.

Deposits totaled $98.8 million at December 31, 2015, a decrease of $8.3 million from year end 2014, primarily as a result of run-off of the core deposits and management's decision to utilize the excess liquidity to fund the matured time deposits. Of the total decrease, savings, NOW and money market deposits decreased $6.2 million and time deposits decreased $6.5 million, offset by an increase of $4.5 million in non-interest bearing demand deposits. Shareholders' equity totaled $11.8 million at December 31, 2015. The Bank's capital ratios continue to remain strong, with a tier 1 leverage ratio of 9.84%, a common equity tier 1 risk based capital ratio of 13.95% and a total risk based capital ratio of 15.21%. These ratios exceed those needed to be deemed a well-capitalized financial institution.

Results of Operations

Fourth Quarter 2015
For the quarter ended December 31, 2015, net interest income totaled $0.9 million, a decrease of $136 thousand over the same period in the prior year. Total interest income declined $158 thousand compared to the prior year fourth quarter largely due to a reduction in loan volume which impacted the decline in loan interest income. The reduction in interest expense on deposits was a result of a decrease in interest-bearing deposits.

The Bank did not record any provision for loan loss in the fourth quarter of 2015, compared with $263 thousand recorded in the same quarter a year-ago. The allowance for loan loss at period-end was $1.6 million, or 2.16% of gross loans compared with $1.6 million, or 1.83% of gross loans for the same period in the prior year. Management continually monitors the adequacy of the allowance for loan loss and considers the current level of the allowance for loan losses to be adequate.

Non-interest income increased moderately to $84 thousand for the quarter ended December 31, 2015 compared with $78 thousand for the same quarter in the prior year. The majority of the increase is directly related to a gain recorded on the sale of a bank owned automobile.

Non-interest expense totaled $1.3 million for the quarter ended December 31, 2015, an increase of $202 thousand from the year-ago quarter, primarily related to an increase in professional and other fees compared to the same quarter last year.

Income tax expense in the fourth quarter 2015 increased $2.0 million when compared to the same period in the prior year as a result of the valuation allowance recorded against the deferred tax assets ("DTA"). The DTA at year-end 2014 was $1.5 million. The pretax loss for the year 2015 created an additional $447 thousand in DTA as a result of the fact that net operating loss carrybacks claims have been exhausted. A full valuation allowance against the DTA was recorded resulting in an income tax expense of $1.9 million for the fourth quarter 2015.

US GAAP requires that all net deferred tax assets be evaluated on at least an annual basis to ensure that the asset is recorded at its net realizable value. If evidence exists which questions the realizability of this net deferred tax asset prior to its expiration, the Bank must record a valuation allowance.

Based on strong negative evidence that existed at year end December 31, 2015, management concluded that it needed to record a full valuation allowance against the Bank's deferred tax assets was necessary.

Full Year 2015
For the full year ended December 31, 2015, net interest income totaled $3.8 million, decreasing $558 thousand over the full prior year. The decrease in net interest income was primarily due to a decline in gross interest income resulting from a decrease in gross loans offset by a reduction in interest paid on deposits resulting primarily from declining balances in money market and time deposits. For the year, average interest earning assets and average interest bearing liabilities declined $8.3 million and $8.7 million, respectively, while the yield on interest earning assets and interest bearing deposits both declined 2 basis points. Net interest margin for the year declined 24 basis points to 3.25% over prior year.

The provision for loan losses was $710 thousand for the year, an increase of $82 thousand compared to prior year. The provision for loan loss continue to be impacted by classified loans during the year as management continues to resolve these problem credits.

Non-interest income totaled $339 thousand for the year 2015, reflecting a decrease of $82 thousand over the full year 2014, primarily resulting from decreases in fees on deposit accounts and loan fee income offset by gain on sale of fixed assets.

Non-interest expense totaled $4.7 million for the full year 2015, an increase of $415 thousand over prior full year, the majority of which was related to the litigation cost reversal recorded in the year 2014. Excluding the litigation cost reversal of $500 thousand, non-interest expense would have decreased $85 thousand year over year. Salaries and employee benefits, the largest component of non-interest expense, decreased $190 thousand as a result of reduction in staff. Professional fees increased $137 thousand primarily due to the consulting services utilized in connection with the compliance of the regulatory Consent Orders. Occupancy and equipment expense and data processing expenses decreased $36 thousand and $29 thousand, respectively, while other operating expenses increased $41 thousand.

Although the Bank reported a pretax loss for the year 2015, it had to record an income tax expense of $1.5 million for the year, primarily due to management's decision to provide for the valuation allowance against its deferred tax assets. Please refer to the discussion about the fourth quarter 2015 results for details on the valuation allowance.

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 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
Selected Financial Highlights
(unaudited)
					As of or for the Quarters Ended
(in thousands, except per share and percentage data)					12/31/2015				9/30/2015				6/30/2015				3/31/2015				12/31/2014
Summary of Operations:
	Interest income				$	1,060			$	1,118			$	1,238			$	1,219			$	1,218
	Interest expense					185				217				216				211				207
			Net interest income			875				901				1,022				1,008				1,011
	Provision for loan and lease loss					-				695				-				15				263
			Net interest income after provision for loan loss			875				206				1,022				993				748
	Non-interest income					84				88				86				81				78
	Non-interest expense					1,254				1,097				1,175				1,149				1,052
			Loss before income tax expense (benefit)			(295	)			(803	)			(67	)			(76	)			(226	)
	Income tax expense (benefit)					1,919				(322	)			(26	)			(29	)			(103	)
			Net loss		$	(2,214	)		$	(481	)		$	(41	)		$	(46	)		$	(123	)
Per Common Share:
		Basic			$	(1.16	)		$	(0.25	)		$	(0.02	)		$	(0.02	)		$	(0.06	)
		Diluted				(1.16	)			(0.25	)			(0.02	)			(0.02	)			(0.06	)
	Book value per share					6.17				7.35				7.56				7.62				7.60
	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					-7.39	%			-1.50	%			-0.13	%			-0.15	%			-0.39	%
	Return on average common equity					-63.56	%			-13.35	%			-1.13	%			-1.26	%			-3.35	%
	Average equity to average assets					11.62	%			11.21	%			11.21	%			11.53	%			11.72	%
	Risk-based capital:
		Total risk-based capital ratio				15.21	%			15.20	%			14.62	%			14.51	%			14.45	%
		Common equity tier 1 risk-based capital ratio				13.95	%			13.92	%			13.26	%			13.26	%			13.19	%
		Tier 1 leverage capital ratio				9.84	%			9.83	%			10.20	%			10.48	%			10.54	%
Financial Condition:
	Total assets				$	111,078			$	126,250			$	132,065			$	129,317			$	122,018
	Loans, net of unearned income					72,674				77,092				81,914				83,058				86,111
	Deposits					98,819				111,779				117,205				114,293				107,088
	Shareholders' equity					11,770				14,021				14,420				14,543				14,495

New Jersey Community Bank
Statements of Financial Condition
(dollars in thousands, except share data)
					December 31,				December 31,
					2015				2014
Assets					(unaudited)
	Cash and due from banks - non-interest bearing				$	1,615			$	1,107
	Federal funds sold and interest-bearing deposits with banks					9,736				4,728
				Total Cash and Cash Equivalents		11,351				5,835
	Due from banks - time deposits					6,027				5,577
	Investment Securities:
		Available-for-sale				9,069				13,680
		Held-to-maturity				6,537				3,043
				Total Investment Securities		15,606				16,723
	Loans Receivable, net of unearned fees					72,674				86,111
			Less: Allowance for loan losses			(1,569	)			(1,576	)
				Net Loans		71,105				84,535
	Premises and equipment, net					2,128				2,361
	Accrued interest receivable					276				277
	Bank-owned life insurance					3,774				3,678
	Deferred tax assets					17				1,589
	Other assets					794				1,443
				Total Assets	$	111,078			$	122,018
Liabilities and Shareholders' Equity
	Liabilities
		Deposits:
			Non-interest bearing		$	15,155			$	10,670
			Savings, NOW and money market			38,808				45,028
			Time deposits $100M and over			33,251				38,750
			Time deposits, other			11,605				12,640
				Total Deposits		98,819				107,088
		Accrued interest payable				9				10
		Other liabilities				480				425
				Total Liabilities		99,308				107,523
	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				13,861				13,854
		Accumulated Deficit				(5,883	)			(3,101	)
		Accumulated other comprehensive loss				(25	)			(75	)
				Total Shareholders' Equity		11,770				14,495
				Total Liabilities and Shareholders' Equity	$	111,078			$	122,018

New Jersey Community Bank
Statements of Operations
(dollars in thousands, except per share data)(unaudited)
				Three Months Ended								For the Year Ended
				December 31,								December 31,
				2015				2014				2015				2014
Interest Income
	Loans receivable, including fees			$	954			$	1,117			$	4,188			$	4,862
	Investment securities				84				88				366				372
	Federal funds sold and interest-bearing deposits with banks				9				3				26				21
	Due from banks - interest bearing				13				10				55				41
		Total Interest Income			1,060				1,218				4,635				5,296
Interest Expense
	Deposits				185				207				829				932
		Net Interest Income before Provision for Loan Loss			875				1,011				3,806				4,364
Provision for Loan Loss					-				263				710				628
	Net Interest Income after Provision for Loan Loss				875				748				3,096				3,736
Non-Interest Income
	Fees and service charges on deposit accounts				30				38				162				242
	Loan fee income				2				4				12				29
	Income from bank owned life insurance				24				25				96				99
	All other income				28				11				69				51
		Total Non-Interest Income			84				78				339				421
Non-Interest Expense
	Salaries and employee benefits				572				571				2,311				2,501
	Occupancy and equipment				178				201				761				797
	Data processing services				62				39				211				240
	Professional and other fees				282				92				678				541
	Advertising and promotion				3				1				8				11
	Federal insurance assessment				62				62				266				270
	Litigation cost				-				-				-				(500	)
	Other operating expenses				95				86				440				400
		Total Non-Interest Expenses			1,254				1,052				4,675				4,260
		Loss Before Income Tax Expense (Benefit)			(295	)			(226	)			(1,240	)			(103	)
	Income tax expense (benefit)				1,919				(103	)			1,542				(35	)
Net Loss				$	(2,214	)		$	(123	)		$	(2,782	)		$	(68	)
Loss per share:
	Basic and diluted			$	(1.16	)		$	(0.06	)		$	(1.46	)		$	(0.04	)
Weighted average number of common shares outstanding
	Basic and diluted				1,908				1,908				1,908				1,908

New Jersey Community Bank
Analysis of Average Balance Sheet and Net Interest Income
(unaudited)
					For the Three Months Ended
					December 31, 2015									December 31, 2014
					Average							Average		Average							Average
					Balance				Interest			Rate		Balance				Interest			Rate
Interest Earning Assets:
	Loans				$	74,788			$	954		5.06%		$	86,698			$	1,117		5.11%
	Investment securities					16,132				84		2.08%			17,105				88		2.06%
	Federal funds sold and interest-bearing deposits with banks					13,821				9		0.26%			6,038				3		0.20%
	Due from banks - time deposits					6,336				13		0.83%			5,970				10		0.66%
			Total interest-earning assets			111,077				1,060		3.79%			115,811				1,218		4.18%
Allowance for loan loss						(1,921	)								(1,368	)
Cash and due from banks - non-interest bearing						1,798									1,470
All other assets						8,946									9,261
			Total assets		$	119,900								$	125,174
Interest Bearing Liabilities:
	Deposits:
		Savings, NOW and money market			$	42,761				35		0.32%		$	46,563				58		0.49%
		Time deposits $100M and over				12,091				116		3.81%			39,387				118		1.19%
		Time deposits, other				36,780				34		0.37%			12,718				31		0.97%
		Total interest-bearing deposits				91,632				185		0.80%			98,668				207		0.83%
Demand						13,862									11,318
Other liabilities						474									518
			Total liabilities			105,968									110,504
	Stockholders' equity					13,932									14,670
			Total liabilities & stockholders' equity		$	119,900								$	125,174
Net interest income									$	876								$	1,011
Average interest rate spread												2.99%									3.35%
Net interest margin												3.13%									3.46%

New Jersey Community Bank
Analysis of Average Balance Sheet and Net Interest Income
(unaudited)
					For the Year Ended
					December 31, 2015									December 31, 2014
					Average							Average		Average							Average
					Balance				Interest			Rate		Balance				Interest			Rate
Interest Earning Assets:
	Loans				$	80,649			$	4,188		5.19%		$	91,725			$	4,862		5.30%
	Investment securities					18,044				366		2.03%			17,604				372		2.11%
	Federal funds sold and interest bearing deposits with banks					11,183				26		0.23%			9,621				21		0.22%
	Due from banks - interest bearing					7,059				55		0.78%			6,268				41		0.65%
		Total interest-earning assets				116,935				4,635		3.96%			125,218				5,296		4.23%
Allowance for loan loss						(1,671	)								(1,603	)
Cash and due from banks - non-interest bearing						1,680									1,771
All other assets						9,045									9,276
		Total assets			$	125,989								$	134,662
Interest Bearing Liabilities:
	Deposits:
		Savings, NOW and money market			$	47,699				225		0.47%		$	45,165				215		0.48%
		Time deposits under $100M				12,221				135		1.10%			14,967				170		1.14%
		Time deposits $100M and over				38,282				469		1.23%			46,761				547		1.17%
			Total deposits			98,201				829		0.84%			106,893				932		0.87%
Demand						12,963									11,972
Other liabilities						476									1,312
			Total liabilities			111,640									120,177
Stockholders' equity						14,349									14,485
			Total liabilities & stockholders' equity		$	125,989								$	134,662
Net interest income									$	3,806								$	4,364
Average interest rate spread												3.12%									3.36%
Net interest margin												3.25%									3.49%