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.
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)
|Symbol||CMTB||52 week range||$11.25-$25.00|
|Financial Data - Year to date|
|At June 30,||At December 31,|
Balance Sheet Highlights
|Allowance for loan losses||$2,870||$3,130|
|Total shareholders' equity||$30,122||$28,689|
Financial data - Year to date
For the six months
For the six months
|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%|
|At June 30,||At December 31,|
|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|
|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|
|Troubled debt restructured loans ("TDRs")||$2,276||$2,610|
|Non-performing loans/total loans||2.33%||2.05%|
|Allowance for loan loss/total loans||1.23%||1.37%|
|Allowance for loan loss/non-accrual loans||53%||67%|
|* Calculated by dividing the market price of a share of the Bank's common stock for the period of the year in question by the Bank's annualized earning per share for that period.|
|COMMUNITY BANK OF BERGEN COUNTY, NJ AND SUBSIDIARY|
|CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION|
|June 30, 2017||December 31, 2016|
Dollars in Thousands
Dollars in Thousands
|Cash and balances due from depository institutions:|
|Non-interest-bearing balances and currency and coin||$||3,249||$||2,908|
|Loans and lease financing receivables:|
|Loans and leases, net of unearned income||$||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|
|Common Stock*: par value $5.00; 5,000,000 authorized;|
|1,918,144 shares issued and outstanding, respectively||9,591||9,591|
|Accumulated other comprehensive income||8||(682||)|
|Total Equity Capital||30,122||28,689|
|Total Liabilities, and Equity Capital||$||348,286||$||342,222|
|Capital to Asset ratio||8.65||%||8.38||%|
|Tier 1 leverage ratio||8.30||%||8.45||%|
|Common equity tier 1 capital ratio||14.69||%||14.43||%|
|Tier 1 risk-based capital ratio||14.69||%||14.43||%|
|Total risk-based capital ratio||15.95||%||15.69||%|
COMMUNITY BANK OF BERGEN COUNTY, NJ AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
|Quarters Ended||Six Months Ended|
|June 30,||June 30,|
|Income Statement||Dollars in Thousands||Dollars in Thousands|
|Interest and fee income:|
|Interest and fee income on loans||$||2,757||$||2,933||$||5,495||$||5,892|
|Interest income on balances due from depository institution||34||19||70||32|
|Interest and dividend income on securities||378||255||746||501|
|Other interest income||17||17||32||31|
|Total Interest and fee income||3,186||3,224||6,343||6,456|
|Interest on deposits||522||469||1,025||940|
|Interest on borrowed funds||12||16||24||34|
|Total Interest expense||534||485||1,049||974|
|Net Interest Income||2,652||2,739||5,294||5,482|
|Provision for Loan Losses||0||0||0||100|
|Service charges on deposit accounts||58||49||116||101|
|Net loss on sale of real estate owned||0||0||(63||)||(49||)|
|Other non-interest income||219||73||284||117|
|Total non-interest income||325||171||433||267|
|Realized gains on securities||0||1||0||1|
|Salaries and employee benefits||1,188||1,151||2,312||2,315|
|Expenses on premises and fixed assets||212||209||427||417|
|Other non-interest expenses||1,062||866||1,864||1,690|
|Total non-interest expenses||2,462||2,226||4,603||4,422|
|Income before Income taxes:||515||685||1,124||1,228|
|Earnings per share *||$||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