MAYWOOD, N.J.--(BUSINESS WIRE)--Community Bank of Bergen County, NJ (OTCBB:CMTB) reported net income for the first quarter of 2014 of $218,000, or $0.13 per diluted share, up $199,000 from a net income of $19,000, or $0.01 per diluted share, for the first quarter of 2013.
The increase in net income for the first quarter of this year was due largely to a $450,000 decrease in the loan loss provision over last year ($225,000 for the quarter ended March 31, 2014 as compared to $675,000 for the quarter ended March 31, 2013), and a $248,000 net gain from the sale of investment securities as compared to no gain or loss from investment securities in 2013. These were partially offset by a $216,000 decrease in other non-interest income, a $135,000 increase in income taxes, a $99,000 increase in total non-interest expense and a $49,000 decrease in net interest income for the first quarter of 2014 as compared to the same period in 2013.
In the first quarter of this year, CBBC had interest income that was $161,000 lower than the first quarter of 2013 – a result of decreased outstanding loan balances from last year ($201,099,000 at March 31, 2014 versus $210,018,000 at March 31, 2013) and overall reduced market rates. This was partially offset by a corresponding savings in interest expense, ($112,000 less in the first quarter of 2014 compared to the first quarter of 2013), attributed to lower interest bearing deposits ($206,131,000 in 2014 versus $223,013,000 in 2013) and reduced rates paid on those deposits. CBBC also realized non-interest income of $47,000 in the first quarter of 2014, in comparison to $263,000 reported during the first quarter of 2013. This is largely the result of a $57,000 insurance settlement claim from Hurricane Sandy that was recorded in the first quarter of 2013, and a loss of $144,000 during the first quarter 2014 on the sale of one property of other real estate (OREO).
Regulatory capital ratios for 2014 and 2013 are lower than those reported in the past mainly a result of the large net operating losses sustained in 2013. This loss generated a significant increase in the Bank’s deferred tax asset, most of which is disallowed for the purpose of calculating the Bank’s regulatory capital ratios. In order to generate taxable earnings in the future to mitigate the large deferred tax asset, the Bank has sold approximately $9,900,000 of its non-taxable municipal bond portfolio along with approximately $4,900,000 in taxable US treasury notes in the first quarter of 2014 with a resulting net gain of $248,000. The Bank has replaced approximately $5,600,000 of the sale of the non-taxable portfolio with taxable and higher yielding mortgage backed securities (MBS). The Bank will continue the sale of the tax free portfolio and the substitution with higher yielding MBS as opportunities arise.
During the first quarter of 2014, the Bank’s reduction in certain non-interest expenses, including a cost savings of $63,000 in salaries and benefits, the result of staff reduction, and $15,000 in net savings achieved through lower costs in other non-interest expenses, was offset by a one-time charge of $179,000 for the write-down to fair value of one of the Bank’s remaining OREO properties.
As the result of the Bank’s concerted efforts, total assets were reduced by $6,869,000 from December 31, 2013 and by $15,308,000 from March 31, 2013. The Bank continues to proceed in working out of its non-accrual asset portfolio (down $262,000 from December 31, 2013 and down $3,711,000 from March 31, 2013).
“This quarter we experienced financial improvement in all areas of the bank,” said Peter A. Michelotti, President and CEO of CBBC. “We began to strategically transition our investment portfolio to higher yielding taxable investments and increased our operating earnings. All of our asset quality metrics have improved, which has set us on track to operate even more efficiently down the line. Most noticeably, the local economy is improving. Our outlook is positive and we expect steady and sustained growth in 2014.”
As of March 31, 2014, non-accruing loans stood at $6,491,000. The Bank’s capital closed this quarter at $25,283,000, with book value per share at $14.50 in comparison to $14.29 at December 31, 2013.
About Community Bank of Bergen County
Established in 1928, Community Bank of Bergen County, NJ (CBBC) serves the northern New Jersey community with three locations in Rochelle Park, Maywood and Fair Lawn. Dedicated to superior service, the bank offers a range of customized personal and business banking products and the convenience of 24-hour ATMs and online banking.
With lending decisions made locally, and a responsive management team, Community Bank of Bergen County is committed to providing an exceptional banking experience.
For more information, visit the Bank’s web site at www.cbbcnj.com, and to view CBBC’s 2013 Audited Financial Statements, visit: http://www.cfpproxy.com/5398/resources/Annual%20Report.pdf.
This press release and other statements made from time to time by Community Bank of Bergen County's management contain express and implied statements relating to our future financial condition, results of operations, credit quality, corporate objectives, capital, liquidity and other financial and business matters, which are considered forward-looking statements. These forward-looking statements are necessarily speculative and speak only as of the date made, and are subject to numerous assumptions, risks and uncertainties, all of which may change over time. Actual results could differ materially from those expected or implied by such forward-looking statements. Risks and uncertainties which could cause our actual results to differ materially and adversely from such forward-looking statements include the current economy of the country in general and how it is affecting the financial industry specifically; volatility in interest rates and the shape of the yield curve; increased credit risks and risks associated with the real estate market; the potential for increased non-performing loans; operating, legal, and regulatory risk; economic, political, and competitive forces affecting the Bank's lines of business; the extent and timing of actions of the Federal Reserve Board; customer acceptance of our products and services; and other risks and uncertainties. Any statements made that are not historical facts should be considered to be forward-looking statements. You should not place undue reliance on any forward-looking statements. We undertake no obligation to update forward-looking statements or to make any public announcement when we consider forward-looking statements to no longer be accurate, whether as a result of new information or the occurrence of future events, except as may be required by applicable law or regulation.
COMMUNITY BANK OF BERGEN COUNTY, NJ AND SUBSIDIARY
March 31, 2014
December 31, 2013
Cash and balances due from depository institutions:
|Non-interest-bearing balances and currency and coin||$||4,517||$||3,901|
|Loans and lease financing receivables:|
|Loans and leases, net of unearned income||$||201,099||$||201,262|
|LESS: Allowance for loan and lease losses||3,839||3,824|
|Loans and leases, net of allowance||197,260||197,438|
|Premises and fixed assets (including capitalized leases)||6,278||6,330|
|Other Real Estate Owned||5,697||5,959|
|Common Stock: par value $5.00; 1,800,000 shares authorized: 1,743,618|
|shares issued and outstanding at March 31, 2014 and December 31, 2013||8,718||8,718|
|Accumulated other comprehensive income||385||234|
|Total Equity Capital||25,283||24,914|
|Total Liabilities, and Equity Capital||$||287,983||$||294,852|
|Capital to Asset ratio||8.78||%||8.45||%|
|Tier 1 leverage ratio||7.75||%||7.49||%|
|Tier 1 risk-based capital ratio||11.59||%||11.10||%|
|Total risk-based capital ratio||12.85||%||12.36||%|
COMMUNITY BANK OF BERGEN COUNTY, NJ AND SUBSIDIARY
Twelve Months Ended
|Income Statement||Dollars in Thousands||Dollars in Thousands|
|Interest and fee income:|
|Interest and fee income on loans||$||2,743||$||2,908||$||11,412||$||12,465|
|Interest income on balances due from depository institution||2||4||28||17|
|Interest and dividend income on securities||193||187||751||923|
|Other interest income||11||11||44||42|
|Total Interest and fee income||2,949||3,110||12,235||13,447|
|Interest on deposits||511||623||2,385||2,903|
|Total Interest expense||511||623||2,385||2,903|
|Net Interest Income||2,438||2,487||9,850||10,544|
|Provision for Loan Losses||225||675||3,935||2,681|
|Service charges on deposit accounts||88||88||378||430|
|Net loss on sale of real estate owned||(144||)||0||(229||)||(29||)|
|Income on bank owned life insurance||52||53||214||164|
|Other non-interest income||51||122||331||371|
|Total non-interest income||47||263||694||936|
|Realized gains (losses) on securities||248||0||9||20|
|Salaries and employee benefits||963||1,026||4,118||4,226|
|Expenses on premises and fixed assets||297||299||1,096||1,132|
|Other non-interest expenses||1,005||841||3,696||3,269|
|Total non-interest expenses||2,265||2,166||8,910||8,627|
|Income before Income taxes:||243||(91||)||(2,292||)||192|
|Income taxes (benefit)||25||(110||)||(1,180||)||(229||)|
|Earnings per Share||$||0.13||$||0.01||$||(0.64||)||$||0.25|