By Community Bank of Bergen County, NJ (OTCQB:CMTB) reported today its fourth quarter 2013 net income of $131,000, or $0.08 per diluted share, which is up $121,000 from $10,000, or $0.01 per diluted share, for the fourth quarter of 2012.
The increase in net income this quarter, over the same quarter last year, was due largely to the reduction of $380,000 in the provision for the allowance for loan losses in the fourth quarter of 2013 as compared to the same period of 2012. This reduction was due to the $13.5 million decrease in our outstanding loans and leases from December 31, 2012 to December 31, 2013 ($214,756, 000 versus $201,262,000, respectively), the Bank's improving non-performing asset portfolio, the improving economy and other factors. Offsetting that reduction was a $54,000 reduction in net interest income in the fourth quarter of 2013. This reduction resulted from a $153,000 decrease in interest income in the quarter, also a result of the lower outstanding loan balances as compared to the same period last year, as well as lower overall market rates, and partially offset by a $99,000 reduction in interest paid on lower outstanding interest bearing deposit balances as compared to 2012 ($215,887,000 versus $225,989,000 in quarterly deposits, respectively). Non-interest income for the quarter ended December 31, 2013 was up $32,000 when compared to the same period in 2012 due to a $65,000 increase in gains/losses in the sale of Other Real Estate Owned (OREO) properties during the quarter offset by a $33,000 reduction in other non-interest income. There was also a $252,000 increase in non-interest expenses realized during the current quarter over the same quarter last year. This increase is attributed to the closing of the Bank's Garfield office during the fourth quarter of 2013. The branch closing generated a $279,000 loss due to the write-off of undepreciated leasehold improvements at the Branch. This was offset by a $36,000 reduction in expenses in premises and fixed assets largely as a result of increased rental income generated at the Bank's operations center ($32,000 increase from last year).
For the year ended December 31, 2013, the Bank reported a net loss of $1,112,000, down from net income of $421,000 for the year ended December 31, 2012. The decrease in net income for the twelve months ended December 31, 2013 is largely attributed to (i) a $1,212,000 decrease in interest income due to lower outstanding loan balances at reduced market yields, noted above, (ii) a $1,254,000 increase in provision for loan losses due to the loan sale described below, as compared to the twelve months ended December 31, 2012, and (iii) losses of $229,000 incurred on the sale of OREO property that occurred during the year as compared to losses totaling $29,000 for the year ending December 31, 2012. These amounts were offset by (i) reduced interest expense of $518,000 as compared to the same period in 2012 due to lower outstanding interest bearing deposit balances at reduced interest cost, (ii) a $49,000 increase in income generated from the Bank-Owned Life Insurance (BOLI) investment for the twelve months of 2013 as compared to the same period in 2012, and (iii) a $951,000 increase in the Bank's income tax benefit for 2013 as compared to 2012. The BOLI investment stands at $7,168,000 at December 31, 2013, as compared to $6,459,000 at December 31, 2012. Further, there was a $108,000 reduction in salaries and benefit expenses as compared to the same period in 2012, offset by a $427,000 rise in non-operating expenses mainly the result of increased legal ($150, 000) and professional ($77,000) fees and the write-off of undepreciated leasehold improvements described above.
As previously reported, the continuing loss for the year was due largely to the sale of $3,199,000 in non-performing loans, which precipitated a provision for loan losses of $2,385,000 in the quarter ended June 30, 2013, in order to replenish the reduction in the Bank's allowance for loan losses caused by the loan sale. This represented a $1,785,000 increase to the provision for the quarter over the quarter ended June 30, 2012.
Asset levels at year end were reduced from the $305,842,000 reported at December 31, 2012 to $294,829,000 reported for December 31, 2013. This reduction is primarily due to the sale of the non-performing loan portfolio mentioned above, the successful effort to lower the level of our excess cash through reductions in interest bearing deposits and the low volume of new loans added to the total loan portfolio during the year. At December 31, 2013, the Bank remains "well capitalized" under all applicable bank regulations, with its Tier 1 leverage ratio at 7.50 percent, its Tier 1 risk-based capital ratio at 11.11 percent and its Total risk-based capital ratio at 12.37 percent.
As of December 31, 2013, non-accruing loans stood at $6,753,000, a $4,359,000 reduction when compared to December 31, 2012. The Bank's capital closed this quarter at $24,949,000, with a book value per share of $14.31, down from $15.07 at December 31, 2012, after adjusting for the five percent stock dividend that was distributed on June 28, 2013.
"2013 was a year of transition for CBBC," said Peter A. Michelotti, President and CEO of CBBC. "The Bank drastically reduced its problem assets, and implemented increased cost saving initiatives. Additionally, we greatly enhanced our product line for mortgages and started new and exciting projects that will enable us to grow our consumer product portfolio via online channels. Despite the unexpected and significant loss attributed to the closure of the Garfield branch, the Bank is on course to improving its financial position, as reflected by the improvement in our fourth quarter results announced today. Management is dedicated to further improving the Bank's position in 2014."
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.
| COMMUNITY BANK OF BERGEN COUNTY, NJ AND SUBSIDIARY | ||||||||||||||||||||
| CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION | ||||||||||||||||||||
| AS OF: | ||||||||||||||||||||
| December 31, 2013 | December 31, 2012 | |||||||||||||||||||
| (Unaudited) | (Unaudited) | |||||||||||||||||||
| Assets | Dollars in Thousands | Dollars in Thousands | ||||||||||||||||||
| Cash and balances due from depository institutions: | ||||||||||||||||||||
| Non-interest-bearing balances and currency and coin |
| $ | 3,901 | $ | 6,969 | |||||||||||||||
| Interest-bearing balances |
| 9,070 | 7,003 | |||||||||||||||||
| Securities |
| |||||||||||||||||||
| Held-to-maturity securities | 35,392 | 34,960 | ||||||||||||||||||
| Available-for-sale securities | 22,603 | 19,522 | ||||||||||||||||||
| Loans and lease financing receivables: | ||||||||||||||||||||
Loans and leases, net of unearned income | $ | 201,262 |
| $ | 214,756 |
|
| |||||||||||||
| LESS: Allowance for loan and lease losses | 3,824 |
| 3,220 |
| ||||||||||||||||
| Loans and leases, net of allowance | 197,438 | 211,536 | ||||||||||||||||||
| Premises and fixed assets (including capitalized leases) | 6,330 | 6,772 | ||||||||||||||||||
| Other Real Estate Owned | 5,959 | 6,427 | ||||||||||||||||||
| Other assets | 14,136 | 12,698 | ||||||||||||||||||
| Total Assets |
|
| $ | 294,829 | $ | 305,842 | ||||||||||||||
| Liabilities | ||||||||||||||||||||
| Deposits: | ||||||||||||||||||||
| Interest-bearing | $ | 215,887 |
|
| $ | 225,989 |
|
| ||||||||||||
| Non-interest-bearing | $ | 52,597 |
| $ | 52,049 |
| ||||||||||||||
| Total deposits |
| $ | 268,484 | $ | 278,038 | |||||||||||||||
| Other liabilities | 1,396 | 1,521 | ||||||||||||||||||
| Total Liabilities | 269,880 | 279,559 | ||||||||||||||||||
| Equity Capital | ||||||||||||||||||||
| Common Stock (1,800,000 shares authorized, $5 par value; 1,743,618 | ||||||||||||||||||||
shares issued and outstanding at December 31, 2013; 1,728,000 issued | ||||||||||||||||||||
| and 1,660,464 outstanding at December 31, 2012) | 8,718 | 8,640 | ||||||||||||||||||
| Surplus | 3,988 | 3,968 | ||||||||||||||||||
| Treasury Stock |
| 0 | (1,531 | ) | ||||||||||||||||
| Stock Options | 182 | 182 | ||||||||||||||||||
| Retained earnings | 11,792 | 14,566 | ||||||||||||||||||
| Accumulated other comprehensive income | 269 | 458 | ||||||||||||||||||
| Total Equity Capital | 24,949 | 26,283 | ||||||||||||||||||
| Total Liabilities and Equity Capital |
| $ | 294,829 | $ | 305,842 | |||||||||||||||
| Capital Ratios: | ||||||||||||||||||||
Capital to Asset ratio | 8.46% | 8.59% | ||||||||||||||||||
Tier 1 leverage ratio** | 7.50% | 8.44% | ||||||||||||||||||
Tier 1 risk-based capital ratio** | 11.11% |
| 12.01% | |||||||||||||||||
Total risk-based capital ratio** | 12.37% |
| 13.26% | |||||||||||||||||
** Note: Regulatory capital ratios for 2013 are lower than those reported for 2012 mainly as a result of the large net operating losses incurred this year. Although much of the loss generated a significant increase in the Bank's deferred tax asset, most of that asset is disallowed for the purpose of calculating the Bank's regulatory capital ratios. Management is confident that the Bank will generate sufficient net operating income in the coming years to be able to fully utilize its large deferred tax asset.
| COMMUNITY BANK OF BERGEN COUNTY, NJ AND SUBSIDIARY | ||||||||||||||||||||||
| CONSOLIDATED STATEMENTS OF INCOME | ||||||||||||||||||||||
Quarter Ended | Twelve Months Ended | |||||||||||||||||||||
| December 31, | December 31, | |||||||||||||||||||||
2013 2012 | 2013 2012 | |||||||||||||||||||||
| (Unaudited) | (Unaudited) | |||||||||||||||||||||
| Income Statement | Dollars in Thousands | Dollars in Thousands | ||||||||||||||||||||
| Interest and fee income: | ||||||||||||||||||||||
| Interest and fee income on loans | $ | 2,842 | $ | 2,996 | $ | 11,412 | $ | 12,465 | ||||||||||||||
| Interest income on balances due from depository institution | 6 | 5 | 28 | 17 | ||||||||||||||||||
| Interest and dividend income on securities | 193 | 197 | 751 | 923 | ||||||||||||||||||
| Interest on federal funds sold | 0 | 0 | 0 | 0 | ||||||||||||||||||
| Other interest income | 14 | 10 | 44 | 42 | ||||||||||||||||||
| Total Interest and fee income | 3,055 | 3,208 | 12,235 | 13,447 | ||||||||||||||||||
| Interest Expense: | ||||||||||||||||||||||
| Interest on deposits | 570 | 669 | 2,385 | 2,903 | ||||||||||||||||||
| Total Interest expense | 570 | 669 | 2,385 | 2,903 | ||||||||||||||||||
| Net Interest Income | 2,485 | 2,539 | 9,850 | 10,544 | ||||||||||||||||||
| Provision for Loan Losses | 350 | 730 | 3,935 | 2,681 | ||||||||||||||||||
| Non-Interest Income: | ||||||||||||||||||||||
| Service charges on deposit accounts | 95 | 95 | 378 | 430 | ||||||||||||||||||
| Net gains (losses) on sale of OREO | 36 | (29 | ) | (229 | ) | (29 | ) | |||||||||||||||
| Other non-interest income | 111 | 144 | 545 | 535 | ||||||||||||||||||
| Total non-interest income | 242 | 210 | 694 | 936 | ||||||||||||||||||
| Realized gains (losses) on securities | 0 | 1 | 9 | 20 | ||||||||||||||||||
| Non-interest expenses | ||||||||||||||||||||||
| Salaries and employee benefits | 1,006 | 1,001 | 4,118 | 4,226 | ||||||||||||||||||
| Expenses on premises and fixed assets | 246 | 282 | 1,096 | 1,132 | ||||||||||||||||||
| Other non-interest expenses | 1,082 | 830 | 3,696 | 3,269 | ||||||||||||||||||
| Total non-interest expenses | 2,334 | 2,113 | 8,910 | 8,627 | ||||||||||||||||||
| Income before Income taxes: | 43 | (93 | ) | (2,292 | ) | 192 | ||||||||||||||||
| Income taxes (benefit) | (88 | ) | (83 | ) | (1,180 | ) | (229 | ) | ||||||||||||||
| Net Income | $ | 131 | $ | 10 | $ | (1,112 | ) | $ | 421 | |||||||||||||
| Earnings per Share | $ | 0.08 | $ | 0.01 | $ | (0.64 | ) | $ | 0.25 | |||||||||||||
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. 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 of our market area specifically and how they are 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 inability to reduce our non-performing loans as planned and the potential for increased non-performing loans; operating, legal, and regulatory risk; economic, political, and competitive forces affecting the company's lines of business; the extent and timing of actions or inactions of the Federal Reserve Board and of our Federal government in general; 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.
Media:
Community Bank of Bergen County, NJ
Peter A.
Michelotti, 201-587-1333
President and CEO
investorrelations@cbbcnj.com
