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CST: 16/10/2019 05:39:00   

Bancorp of New Jersey Reports 2019 Second Quarter Financial Results

69 Days ago

FORT LEE, N.J., Aug. 07, 2019 (GLOBE NEWSWIRE) -- Bancorp of New Jersey, Inc. (NYSE American:  BKJ) (the “Company”), holding company for Bank of New Jersey (the “Bank”), today reported financial results for its second quarter and six months ended June 30, 2019. Net income for the second quarter of 2019 was $1.34 million, or $0.18 per diluted share, compared to net income of $1.19 million, or $0.16 per diluted share, for the second quarter of 2018. For the year to date period, net income increased by $372,000, or 14.7% over the prior year, to $2.91 million, or $0.40 per diluted share, compared to earnings of $2.53 million, or $0.35 per diluted share, for the first six months of 2018.

Total loans were $782.3 million at June 30, 2019, up $16.4 million from the December 31, 2018 balance of $765.9 million. Total deposits were $762.0 million at June 30, 2019, up $25.3 million from the December 31, 2018 balance of $736.7 million. Net interest margin was 2.92% at the end of the second quarter compared to 2.96% at the end of the first quarter of 2019.

Nancy E. Graves, Bancorp of New Jersey’s President and Chief Executive Officer, stated, “Our year to date results reflect our continued focus on organic growth. Commercial loan activity remains solid. Core deposits grew $44.7 million, primarily in CDs, with less reliance on lower cost municipal deposits, which declined $19.4 million since year-end 2018.  Cost of total deposits increased this quarter to 1.49% from 1.42% the previous quarter. Consistent with last quarter, deposit pressure remained a challenge in Bergen County, which was reflected in the increase in interest expense as we obtain and retain deposits.”

The following tables show information regarding the growth in our loan and deposit portfolios (in thousands):


At the Period Ended
  June 30, 2019   December 31, 2018
Loan Composition      
Commercial Real Estate $ 657,842     $ 640,627  
Residential Mortgages   55,210       58,281  
Commercial and Industrial   25,912       24,852  
Home Equity   43,084       41,833  
Consumer   296       326  
Total Loans   782,344       765,919  
Deferred Loan Fees and Costs, net   (850 )     (937 )
Allowance for Loan Losses   (8,530 )     (8,393 )
Net Loans $ 772,964     $ 756,589  
       
Deposit Composition      
Noninterest-Bearing Demand Deposits $ 113,279     $ 118,489  
Savings and Interest-Bearing Transaction Accounts   278,743       298,108  
Time Deposits $250 and under   249,215       213,855  
Time Deposits over $250   120,764       106,250  
Total Deposits $ 762,001     $ 736,702  
               

Three and Six Months Ended June 30, 2019 Financial Review

Net Interest Income
For the three months ended June 30, 2019, net interest income decreased by $88,000 or 1.4% versus the same period last year. For the six months ended June 30, 2019, net interest income decreased by $397,000 or 3.0% versus the same period last year. 

Total interest income increased by $1.0 million or 11.7% for the three months ended June 30, 2019 as compared to the corresponding period last year. During the six months ended June 30, 2019, interest income increased by $1.7 million or 9.8% versus the same period last year. This increase in interest income was primarily due to loan growth.

Total interest expense increased by $1.1 million in the second quarter of 2019 to $3.3 million compared to $2.2 million in the prior year period. During the six months ended June 30, 2019, interest expense increased by $2.1 million versus the same period last year. The increase in interest expense was due to an increase in deposit balances and higher interest rates on deposits and borrowed funds as obtaining and retaining deposits remain extremely competitive.

Provision for Loan Losses
The Company recognized a provision for loan losses of $140,000 for both the three and six months ended June 30, 2019 compared to a provision for loan losses of $325,000 and $650,000 for the three and six months ended June 30, 2018, respectively. The allowance for loan losses to total loans was 1.09% as of June 30, 2019.

Non-Interest Expense
Non-interest expense was $4.7 million during the second quarter of 2019 and 2018, while non-interest expense was $9.2 million for the six months ended June 30, 2019 compared to $9.4 million for the same period in 2018, a decrease of $171,000 or 1.8%. The decrease is a result of the Company’s continued focus on efficiencies.

Income Tax Expense
The income tax accrual for the three months ended June 30, 2019 was $329,000 compared to $361,000 for the same period in 2018. The income tax accrual for the six months ended June 30, 2019 was $760,000 compared to $796,000 for the same period in 2018. As the New Jersey Division of Taxation is still reviewing certain provisions of the recent changes in New Jersey tax laws, the Company is accruing for its 2019 New Jersey income tax expense at a rate similar to that applicable in 2018, until such time as the New Jersey Division of Taxation comes to a conclusion on these provisions.

Net Income
Net income for the second quarter of 2019 was $1.34 million compared to net income of $1.19 million for the second quarter of 2018, an increase of $155,000 or 13.0%.  Net income for the six months ended June 30, 2019 was $2.91 million compared to net income of $2.53 million for the same period in 2018, an increase of $372,000 or 14.7%.

Financial Condition
Total assets increased by $41.0 million, or 4.6%, from $883.7 million at December 31, 2018 to $924.7 million at June 30, 2019, reflecting an increase in cash and cash equivalents, loans receivable and other assets related to the recording of a right of use asset due to the adoption of Accounting Standards Update 2016-02 – Leases, as of January 1, 2019.

Total cash and cash equivalents increased from $64.5 million at December 31, 2018 to $86.2 million at June 30, 2019, an increase of $21.7 million. The change in cash is mainly due to an increase in deposit account balances and the maturity of certain securities.

Along with new deposits to the Bank, the Company has been experiencing customers transferring funds from noninterest bearing and lower interest-bearing accounts to higher interest-bearing accounts. The Bank has sought to increase its core deposits while reducing its reliance on potentially volatile municipal deposits and their effects of seasonal fluctuations related to real estate tax inflows and payments.

Borrowed funds decreased slightly to $51.2 million as of June 30, 2019 from $51.7 million at December 31, 2018.

At June 30, 2019, the Bank maintained capital ratios that were in excess of regulatory standards for well capitalized institutions. The Company’s and Bank’s Tier 1 capital to average assets ratio was 10.42%, each of their common equity Tier 1 capital and Tier 1 capital to risk weighted assets were 11.43% and their total capital to risk weighted assets ratio was 12.48%.

Loan Quality
At June 30, 2019 the Bank had non-accrual loans of $9.5 million. Included in this total are $3.9 million in Troubled Debt Restructured Loans (“TDRs”). At year-end 2018, non-accrual loans totaled $9.4 million, of which $4.5 million were TDRs. Accruing loans delinquent greater than 30 days were $6.5 million as of June 30, 2019, compared to $5.3 million at December 31, 2018. Of the $6.5 million in delinquent loans at June 30, 2019, two loans totaling $1.4 million reached maturity and were in the process of extension or renewal.

About the Company
Founded in 2006, Bancorp of New Jersey, Inc. is the holding company for Bank of New Jersey, which provides traditional commercial and consumer banking products and services. The Bank’s corporate office is in Englewood Cliffs and the Bank currently operates out of 9 branch offices located in Fort Lee, Hackensack, Haworth, Englewood Cliffs, Englewood, Cliffside Park, and Woodcliff Lake. For more information about Bank of New Jersey and its products and services, please visit http://www.bonj.net or call 201-720-3201. If you would like to receive future Bancorp of New Jersey announcements electronically, please email us at shareholder@bonj.net.

Forward-Looking Statements This press release and other statements made from time to time by Bancorp of New Jersey’s management contain express and implied statements relating to our future financial condition, results of operations, credit quality, corporate objectives, 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 are included in our Annual Report on Form 10-K under Item 1a – Risk Factors and in the description of our business under Item 1. 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 of future events, except as may be required by applicable law or regulation.

  Investor Relations Counsel:
The Equity Group Inc.
Fred Buonocore, CFA   212-836-9607

BANCORP OF NEW JERSEY, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except for per share data)

             
    For the Three Months Ended June 30, 
    2019   2018
INTEREST INCOME            
Loans, including fees   $ 9,089   $ 8,179
Securities     179     233
Federal funds sold and other     419     261
TOTAL INTEREST INCOME     9,687     8,673
             
INTEREST EXPENSE            
Savings and interest bearing transaction accounts     918     464
Time deposits     2,031     1,609
Borrowed funds     350     123
TOTAL INTEREST EXPENSE     3,299     2,196
             
NET INTEREST INCOME BEFORE PROVISION FOR LOAN LOSSES     6,388     6,477
Provision for loan losses     140     325
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES     6,248     6,152
NON-INTEREST INCOME            
Fees and service charges     143     110
TOTAL NON-INTEREST INCOME     143     110
             
NON-INTEREST EXPENSE            
Salaries and employee benefits     2,416     2,372
Occupancy and equipment expense     909     828
FDIC premiums and related expenses     105     148
Legal fees     275     219
Other real estate owned expenses     22     2
Professional fees     203     245
Data processing     281     205
Other expenses     507     692
TOTAL NON-INTEREST EXPENSE     4,718     4,711
Income before provision for income taxes     1,673     1,551
Income tax expense     329     361
Net income   $ 1,344   $ 1,190
             
PER SHARE OF COMMON STOCK            
Basic   $ 0.18   $ 0.16
Diluted   $ 0.18   $ 0.16
             

BANCORP OF NEW JERSEY, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except for per share data)

               
    For the Six Months Ended June 30,   
    2019   2018  
INTEREST INCOME              
Loans, including fees   $  17,845   $  16,327  
Securities      386      469  
Federal funds sold and other      832      568  
TOTAL INTEREST INCOME      19,063      17,364  
               
INTEREST EXPENSE              
Savings and interest bearing transaction accounts      1,798      881  
Time deposits      3,774      3,123  
Borrowed funds      700      172  
TOTAL INTEREST EXPENSE      6,272      4,176  
               
NET INTEREST INCOME BEFORE PROVISION FOR LOAN LOSSES      12,791      13,188  
Provision for loan losses     140     650  
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES      12,651      12,538  
NON-INTEREST INCOME              
Fees and service charges     257     205  
TOTAL NON-INTEREST INCOME      257      205  
               
NON-INTEREST EXPENSE              
Salaries and employee benefits     4,870     4,787  
Occupancy and equipment expense     1,818     1,695  
FDIC premiums and related expenses      233      306  
Legal fees      350      357  
Other real estate owned expenses      25      9  
Professional fees      437      493  
Data processing      568      538  
Other expenses      942      1,229  
TOTAL NON-INTEREST EXPENSE      9,243      9,414  
Income before provision for income taxes      3,665      3,329  
Income tax expense      760      796  
Net income   $ 2,905   $ 2,533  
               
PER SHARE OF COMMON STOCK              
Basic   $ 0.40   $ 0.35  
Diluted   $ 0.40   $ 0.35  
               

BANCORP OF NEW JERSEY, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(in thousands, except for per share data)

             
    June 30, 2019   December 31, 2018
Assets            
Cash and due from banks   $ 2,636     $ 3,541  
Interest bearing deposits     80,273       59,024  
Federal funds sold     3,315       1,977  
Total cash and cash equivalents     86,224       64,542  
Interest bearing time deposits     500       500  
Securities available for sale     27,572       32,293  
Securities held to maturity (fair value $0 and $5,852 at June 30, 2019 and December 31, 2018, respectively)     -       5,852  
Restricted investment in bank stock, at cost     3,155       3,239  
Loans receivable     782,344       765,919  
Deferred loan fees and costs, net     (850 )     (937 )
Allowance for loan losses     (8,530 )     (8,393 )
Net loans     772,964       756,589  
Premises and equipment, net     13,173       13,440  
Accrued interest receivable     2,921       2,841  
Other real estate owned     1,363       511  
Right of use asset     13,067       -  
Other assets     3,779       3,929  
Total assets   $ 924,718     $ 883,736  
Liabilities and Stockholders’ Equity            
LIABILITIES:            
Deposits:            
Noninterest-bearing demand deposits   $ 113,279     $ 118,489  
Savings and interest bearing transaction accounts     278,743       298,108  
Time deposits $250 and under     249,215       213,855  
Time deposits over $250     120,764       106,250  
Total deposits     762,001       736,702  
Borrowed funds     51,169       51,658  
Lease liability     13,490       -  
Accrued expenses and other liabilities     5,539       6,269  
Total liabilities     832,199       794,629  
Stockholders’ equity:            
Common stock, no par value, authorized 20,000,000 shares; issued and outstanding 7,293,697 at June 30, 2019 and 7,295,466 at December 31, 2018     76,848       76,713  
Retained earnings     15,719       12,814  
Accumulated other comprehensive loss     (48 )     (420 )
Total stockholders’ equity     92,519       89,107  
Total liabilities and stockholders’ equity   $ 924,718     $ 883,736  

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