Community Bank of Bergen County, NJ Reports Second Quarter 2017 Net Income of $0.18 Per Share

MAYWOOD, N.J.--(BUSINESS WIRE)--Community Bank of Bergen County, NJ (OTCPink: CMTB) reported net income for the second quarter of 2017 of $342,000, or $0.18 per diluted share, down from $474,000, or $0.25 per diluted share, recorded during the second quarter of 2016. The decrease was due to lower net interest income and higher non-interest expense, partially offset by higher non-interest income.

Net interest income for the second quarter of 2017 decreased by $87,000 over the second quarter of 2016, as did total interest income, down $38,000, over the second quarter of 2016. The drop in interest income is largely the result of lower yields on outstanding loans, partially offset by slightly higher average outstanding balances ($236,867,000 for the second quarter of 2017 vs. $233,968,000 for the second quarter of 2016). Interest expense on deposits increased by $53,000 due to significantly higher average interest bearing deposits ($254,344,000 for the second quarter of 2017 vs. $235,022,000 for the second quarter of 2016). Interest and fee income from loans decreased by $176,000 from the second quarter of 2016, but was partially offset by an additional $123,000 in interest and dividends for securities, related to significant growth in average investments year-on-year ($84,039,000 for the second quarter 2017 vs. $65,825,000 for the second quarter of 2016). Additionally, average non-interest bearing deposits grew from $57,682,000 for the June quarter of 2016 to an average of $61,748,000 in 2017.

Non-interest income was $146,000 higher in the second quarter of 2017 over the same period last year, which was the result of a legal settlement of $140,000 which had been in litigation over several years. Other non-interest expense for the 2017 second quarter were up by $196,000 which is the direct result of expenses related to CBBC’s pending merger with Sussex Bank.

The Bank’s net income for the six months ended June 30, 2017 was $742,000, a $133,000 decrease from net income of $875,000 reported for the six months ended June 30, 2016. A decrease in net interest income and an increase in non-interest expense were only partially offset by an increase in non-interest income and a decrease in the provision for loan losses.

Net interest income was down $188,000 from the prior six-month period, as total interest income for the six months ended June 30, 2017 was down by $113,000, largely a result of lower yields on outstanding loans and despite slightly higher average outstanding balances during the comparative periods ($235,361,000 for the year-to-date 2017 vs. $233,756,000 for the 2016 comparable period). Interest expense also rose by $75,000 due to higher average interest bearing deposits ($254,428,000 for the year through June 30, 2017 vs. $233,658,000 for the same period in 2016). A $397,000 decrease in interest and fee income from loans was partially offset by an increase of $245,000 in interest and dividends from securities related to significant growth in average investments year-on-year ($82,629,000 for the period ending June 30, 2017 vs. $65,697,000 for the same period in 2016). Additionally, average non-interest bearing deposits grew from $56,548,000 for the first six months of 2016 to an average of $61,272,000 during the same period this year.

Non-interest income was notably higher ($167,000) through June 30, 2017 versus the same period in 2016 due to revenues generated from the legal settlement noted above. In the first six months of 2016, the Bank disposed of two OREO properties (generating losses of $49,000), but it acquired three new OREO properties valued at $1,083,000. In 2017, for the same period, the Bank disposed of two OREO properties (generating losses of $63,000) and it acquired one new OREO property valued at $155,000. While the Bank’s outstanding OREO balance currently shows a reduction from year end, management feels the value of these properties are sufficient to minimize future losses upon their sale. In addition, the Bank continues to mitigate its high level of problem loans with a diligent work out process. During the first half of 2017, total delinquent loans dropped from $7.4 million at year end 2016 to $6.5 million at June 30, 2017.

Other non-interest expense for the six-month period ended June 30, 2017 was also up significantly ($174,000) and the result of the pending merger with Sussex Bank.

The Bank’s total assets at June 30, 2017 rose by $6.1 million from December 31, 2016, due to increases in investments of $2.4 million and $4.8 million in net new loans which were funded by $4.6 million in additional deposits.

“Merger related costs drove net income down compared to the same quarter last year; however, core operating earnings remain stable,” said Peter A. Michelotti, the Bank’s President & CEO.

The Bank’s capital closed this quarter at $30,122,000, up from the $28,689,000, reported at December 31, 2016, with book value per share at $15.70 as compared to $14.96 at December 31, 2016. The Bank remains “well capitalized” as defined under all regulatory guidance.

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. On April 11, 2017, the Bank entered into a definitive agreement with Sussex Bancorp and Sussex Bank pursuant to which Sussex Bancorp will acquire the Bank in an all-stock transaction. The transaction is expected to be completed during the third quarter of 2017, subject to approval by each company's shareholders, as well as regulatory approvals and other customary closing conditions.

CBBC is a member of the Federal Deposit Insurance Corporation (FDIC) and an Equal Housing Lender. CBBC makes loans without regard to race, color, religion, national origin, sex, handicap, or familial status.

For more information, visit the Bank’s web site at www.cbbcnj.com, and to view CBBC’s 2016 Audited Financial Statements, visit: http://www.cbbcnj.com/home/about-us/investor

Forward-Looking Statements

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. The words “may”, “could”, “should”, “would”, “will”, “project”, “continue”, “believe”, “anticipate”, “expect”, “intend”, “plan”, and similar expressions are intended to identify forward-looking statements. All such statements are made in good faith by the Bank pursuant to the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. Risks and uncertainties which could cause our actual results to differ materially and adversely from such forward-looking statements include the current economy, both nationally and locally, 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; the inability to resolve our problem loans as expected; 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 SUBSIDARIES
SUMMARY FINANCIAL HIGHLIGHTS
(in Thousands, Except Percentages and Per Share Data)
Financial Highlights:
Symbol	CMTB	52 week range	$11.25-$25.00
Financial Data - Year to date
		Unaudited		Unaudited
		At June 30,		At December 31,
		2017		2016
Balance Sheet Highlights
Total securities		$81,539		$79,108
Total loans		$234,063		$229,267
Allowance for loan losses		$2,870		$3,130
Total assets		$348,286		$342,222
Total deposits		$312,471		$307,905
Total liabilities		$318,164		$313,533
Total shareholders' equity		$30,122		$28,689
		Unaudited		Unaudited
Financial data - Year to date		For the six months ended June 30, 2017		For the six months ended June 30, 2016
Net Interest income		$5,294		$5,482
Provision for loan losses		$0		$100
Loss on sale of OREO		($63)		($49)
Total other income		$496		$316
Total other expenses		$4,603		$4,422
Income before provision for income taxes		$1,124		$1,228
Provision for income taxes		$382		$353
Net income after tax		$742		$875
Other Earnings Information
Earnings per share		$0.39		$0.46
Return on Assets		0.43%		0.51%
Share Information
		At June 30,		At December 31,
		2017		2016
Market price per share		$22.60		$13.50
Book Value per common share		$15.70		$14.96
Outstanding Shares -period ending		1,918,144		1,918,144
Price to Earnings ratio*		29.21		14.80
Capital ratios
Total equity to total assets		8.65%		8.38%
Tier 1 leverage ratio		8.30%		8.45%
Common equity tier 1 capital ratio		14.69%		14.43%
Tier 1 capital ratio		14.69%		14.43%
Total capital ratio		15.95%		15.69%
Asset Quality and Ratios
Other Real Estate Owned (OREO)		$565		$1,521
Non-acccrual loans		$5,455		$4,694
Troubled debt restructured loans ("TDRs")		$2,276		$2,610
Non-performing loans/total loans		2.33%		2.05%
Allowance for loan loss/total loans		1.23%		1.37%
Allowance for loan loss/non-accrual loans		53%		67%

* Calculated by dividing the market price of a share of the Bank's common stock for the period of the year in question by the Bank's annualized earning per share for that period.

COMMUNITY BANK OF BERGEN COUNTY, NJ AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
AS OF:
	June 30, 2017					December 31, 2016
	(Unaudited)					(Unaudited)
Assets	Dollars in Thousands					Dollars in Thousands
Cash and balances due from depository institutions:
Non-interest-bearing balances and currency and coin			$	3,249				$	2,908
Interest-bearing balances				12,012					13,422
Securities
Available-for-sale securities				81,539					79,108
Loans and lease financing receivables:
Loans and leases, net of unearned income	$	234,063				$	229,267
LESS: Allowance for loan and lease losses		2,870					3,130
Loans and leases, net of allowance				231,193					226,137
Premises and fixed assets (including capitalized leases)				6,690					5,759
Other Real Estate Owned				565					1,521
Other assets				13,038					13,367
Total Assets			$	348,286				$	342,222
Liabilities
Deposits:
Interest-bearing	$	247,271				$	243,805
Non-interest-bearing		65,200					64,100
Total deposits				312,471					307,905
Borrowed funds				4,000					4,000
Other liabilities				1,693					1,628
Total Liabilities				318,164					313,533
Equity Capital
Common Stock*: par value $5.00; 5,000,000 authorized;
1,918,144 shares issued and outstanding, respectively				9,591					9,591
Surplus				5,239					5,239
Retained earnings				15,284					14,541
Accumulated other comprehensive income				8					(682	)
Total Equity Capital				30,122					28,689
Total Liabilities, and Equity Capital			$	348,286				$	342,222
Capital Ratios:
Capital to Asset ratio				8.65	%				8.38	%
Tier 1 leverage ratio				8.30	%				8.45	%
Common equity tier 1 capital ratio				14.69	%				14.43	%
Tier 1 risk-based capital ratio				14.69	%				14.43	%
Total risk-based capital ratio				15.95	%				15.69	%

COMMUNITY BANK OF BERGEN COUNTY, NJ AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
	Quarters Ended				Six Months Ended
	June 30,				June 30,
	2017		2016		2017			2016
	(Unaudited)				(Unaudited)
Income Statement	Dollars in Thousands				Dollars in Thousands
Interest and fee income:
Interest and fee income on loans	$	2,757	$	2,933	$	5,495		$	5,892
Interest income on balances due from depository institution		34		19		70			32
Interest and dividend income on securities		378		255		746			501
Other interest income		17		17		32			31
Total Interest and fee income		3,186		3,224		6,343			6,456
Interest Expense:
Interest on deposits		522		469		1,025			940
Interest on borrowed funds		12		16		24			34
Total Interest expense		534		485		1,049			974
Net Interest Income		2,652		2,739		5,294			5,482
Provision for Loan Losses		0		0		0			100
Non-Interest Income:
Service charges on deposit accounts		58		49		116			101
Net loss on sale of real estate owned		0		0		(63	)		(49	)
Other non-interest income		219		73		284			117
Total non-interest income		325		171		433			267
Realized gains on securities		0		1		0			1
Non-interest expenses
Salaries and employee benefits		1,188		1,151		2,312			2,315
Expenses on premises and fixed assets		212		209		427			417
Other non-interest expenses		1,062		866		1,864			1,690
Total non-interest expenses		2,462		2,226		4,603			4,422
Income before Income taxes:		515		685		1,124			1,228
Income taxes		173		211		382			353
Net Income	$	342	$	474	$	742		$	875
Earnings per share *	$	0.18	$	0.25	$	0.39		$	0.46
Earnings per share *	$	0.18	$	0.25	$	0.39		$	0.46

*Earnings per share has been restated to reflect the 10% stock dividend granted in April of 2016