FORT LEE, N.J., March 14, 2018 (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 fourth quarter and full year ended December 31, 2017. Net loss for the fourth quarter of 2017 was $126,000, compared to net income of $998,000 for the fourth quarter of 2016. Net income for the twelve months ended December 31, 2017 was $3.6 million or $0.54 per diluted share, compared to $4.0 million or $0.64 per diluted share, for the twelve months ended December 31, 2016. Fourth quarter and full year performance were affected by the revaluation of our deferred tax assets as a result of the Tax Cuts and Jobs Act (the “Tax Act”), which resulted in a $1.4 million, or $0.20 per diluted share, charge to income tax expense for the fourth quarter of 2017. Net income for the fourth quarter, adjusted for the impact of the one-time non-cash charge to income tax expense, was $1.27 million, or $0.18 per diluted share, a 26.9% increase from $998,000, or $0.16 per diluted share, in the prior year period. For the full year, net income, adjusted for the aforementioned tax-related item increased by $966,000 over the prior year, to $4.97 million. The Company expects that future periods will benefit from the new, lower tax rate.
Annual 2017 Highlights
- Total assets of the Company increased by 7.90% to $887.4 million at December 31, 2017, from $822.4 million at December 31, 2016.
- Total loans were $721.2 million at December 31, 2017, up $60.6 million, or 9.18% from the December 31, 2016 balance of $660.6 million.
- Total deposits were $788.3 million at December 31, 2017, up $70.3 million, or 9.79% from the December 31, 2016 balance of $718.0 million.
Nancy E. Graves, Bancorp of New Jersey’s President and Chief Executive Officer, stated, “Our year-over-year financial results reflect the experience and dedication of our leadership team executing a clear strategic plan to grow while leveraging our investments in risk management and system enhancements. We are pleased with our growth in net loans, which exceeded 9% for the full year, and our growth in earnings, as adjusted for the deferred tax asset revaluation. Our commitment to a community based strategy has resulted in an increase of $82 million in commercial loans made to our local borrowers and $70 million in deposit growth. The attractive Northern New Jersey and metro-New York markets and the experience of our management team in terms of cultivating relationships has enabled us to continue to grow our commercial loans and deposits. Looking ahead, the disciplined execution of our strategy positions us well for continued growth and increased shareholder value in 2018 and beyond.”
The following tables show information regarding the growth in our loan and deposit portfolios:
| Period Ended | |||||||
| December 31, 2017 |
December 31, 2016 |
||||||
| Loan Composition | |||||||
| Commercial Real Estate | $ | 573,941 | $ | 492,296 | |||
| Residential Mortgages | 66,497 | 78,961 | |||||
| Commercial and Industrial | 27,237 | 30,259 | |||||
| Home Equity | 53,199 | 58,399 | |||||
| Consumer | 317 | 656 | |||||
| Total Loans | 721,191 | 660,571 | |||||
| Deferred Loan Fees and Costs, net | (798 | ) | (586 | ) | |||
| Allowance for Loan Losses | (8,317 | ) | (8,287 | ) | |||
| Net Loans | $ | 712,076 | $ | 651,698 | |||
| Deposit Composition | |||||||
| Noninterest-Bearing Demand Deposits | $ | 133,661 | $ | 137,564 | |||
| Savings and Interest-Bearing Transaction Accounts | 307,583 | 287,682 | |||||
| Time Deposits $250 and under | 231,224 | 156,477 | |||||
| Time Deposits over $250 | 115,825 | 136,265 | |||||
| Total Deposits | $ | 788,293 | $ | 717,988 | |||
Fourth Quarter and Full Year Ended December 31, 2017 Financial Review
Net Income
Net loss for the fourth quarter of 2017 was $126,000 compared to net income of $998,000 for the fourth quarter of 2016. Net income for the twelve months ended December 31, 2017 was $3.6 million or $0.54 per diluted share, compared to $4.0 million or $0.64 per diluted share, for the twelve months ended December 31, 2016. Fourth quarter and full year performance were affected by the revaluation of our deferred tax assets as a result of the Tax Act, which resulted in a $1.4 million, or $0.20 per diluted share, charge to income tax expense for the fourth quarter of 2017. Excluding the impact of the aforementioned charge to income tax expense, net income per diluted share for the three and twelve months ended December 31, 2017 was $1.27 and $4.97, an increase of 26.9% and 24.1% over the prior year, respectively. The increase in adjusted net income for the three and twelve month periods ended December 31, 2017 compared to the same periods in 2016 was primarily due to an increase in net interest income due to loan growth and increased cash balances, and to the provision for loan losses recognized by the Company in 2017 compared to 2016.
Net Interest Income
For the three month period ended December 31, 2017, net interest income increased by $523,000 or 8.7% versus the same period last year. Interest income increased by $824,000 for the three months ended December 31, 2017 as compared to the corresponding period last year. This increase in interest income was primarily due to loan growth and increased cash balances.
Total interest expense increased by $301,000 in the fourth quarter of 2017 to $2.0 million compared to $1.7 million in the prior year. The increase in interest expense was due to higher average deposit balances coupled with higher interest rates, as market rates began to increase in our market area. Interest on borrowed funds decreased by $41,000 due to declining balances of borrowed funds.
For the twelve months ended December 31, 2017, net interest income increased to $25.0 million from $24.4 million in the twelve months ended December 31, 2016. Total interest income increased by $1.2 million, while interest expense increased by $637,000 for the twelve months ended December 31, 2017 from the twelve months ended December 31, 2016.
Provision for Loan Losses
The Company recognized a $400,000 provision for loan losses over both the three and twelve months ended December 31, 2017 compared to no provision in the three months ended December 31, 2016 and $1.6 million in the twelve months ended December 31, 2016, respectively. The provisions in 2016 were mainly due to a provision recognized in the third quarter of 2016 related to a single credit. The allowance for loan losses to total loans was 1.15% as of the end of the fourth quarter of 2017.
Non-Interest Expense
Non-interest expense was $4.8 million during the fourth quarter of 2017, up from $4.6 million in the fourth quarter of 2016. During the twelve months ended December 31, 2017, non-interest expense was $17.8 million, $609,000 greater than the same period last year. The increase in non-interest expense primarily reflects an increase in salaries and employee benefits costs associated with health insurance premium increases and a new 401(k) plan with a safe harbor match. The change in non-interest expense also reflects non-recurring charges of $220,000 in the twelve months ended December 31, 2016.
Financial Condition
At December 31, 2017, 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 9.59%, each of their common equity Tier 1 capital and Tier 1 capital to risk weighted assets were 10.84% and their total capital to risk weighted assets ratio was 11.95%.
Total consolidated assets increased by $65.0 million, or 7.90%, from $822.4 million at December 31, 2016 to $887.4 million at December 31, 2017.
Total cash and cash equivalents increased from $77.0 million at December 31, 2016 to $92.6 million at December 31, 2017, an increase of $15.6 million. The change in cash is mainly due to the increase in deposit account balances, pending redeployment into interest earning assets.
Loans receivable, or “total loans,” increased from $660.6 million at December 31, 2016 to $721.2 million at December 31, 2017, an increase of approximately $60.6 million, or 9.18%.
Total deposits grew by $70.3 million to $788.3 million at December 31, 2017, from $718.0 million at December 31, 2016, attributable to successful deposit promotion campaigns.
Loan Quality
At December 31, 2017 the Bank had non-accrual loans of $18.4 million. Included in this total are $10.8 million in Troubled Debt Restructured Loans (“TDRs”). At year-end 2016, non-accrual loans totaled $18.8 million. Accruing loans delinquent greater than 30 days were $6.3 million as of December 31, 2017, compared to $4.3 million at December 31, 2016.
About the Company
Founded in 2006, Bancorp of New Jersey 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 currently has 9 branch offices located in Fort Lee, Hackensack, Haworth, Harrington Park, 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 [email protected].
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.
Non-GAAP Financial Measures This press release may contain references to measures which are not defined in generally accepted accounting principles (“GAAP”). Information concerning these non-GAAP financial measures can be found in the opening paragraphs of the release.
On December 22, 2017, the Tax Act was signed into law. The fourth quarter of 2017 and full year 2017 results reflect the estimated impact of the enactment of the Tax Act, which resulted in a $1.4 million decrease in net income. Net income and earnings per share excluding these related expenses are non-GAAP financial measures. Management believes these measures are meaningful because it reflects adjustments commonly made by management, investors, regulators, and analysts to evaluate the adequacy of earnings per common share and provides a greater understanding of ongoing operations and enhances comparability of results with prior periods.
| Investor Relations: The Equity Group Inc. Fred Buonocore, CFA 212-836-9607 Kevin Towle 212-836-9620 |
BANCORP OF NEW JERSEY, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except for per share data)
| For the Three Months Ended December 31, | |||||||
| 2017 | 2016 | ||||||
| INTEREST INCOME | |||||||
| Loans, including fees | $ | 8,024 | $ | 7,402 | |||
| Securities | 239 | 169 | |||||
| Federal funds sold and other | 239 | 107 | |||||
| TOTAL INTEREST INCOME | 8,502 | 7,678 | |||||
| INTEREST EXPENSE | |||||||
| Savings and money markets | 436 | 414 | |||||
| Time deposits | 1,487 | 1,166 | |||||
| Borrowed funds | 56 | 97 | |||||
| TOTAL INTEREST EXPENSE | 1,979 | 1,677 | |||||
| NET INTEREST INCOME | 6,523 | 6,001 | |||||
| Provision for loan losses | 400 | — | |||||
| NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES | 6,123 | 6,001 | |||||
| NON-INTEREST INCOME | |||||||
| Fees and service charges on deposit accounts | 107 | 100 | |||||
| TOTAL NON-INTEREST INCOME | 107 | 100 | |||||
| NON-INTEREST EXPENSE | |||||||
| Salaries and employee benefits | 2,186 | 2,070 | |||||
| Occupancy and equipment expense | 806 | 759 | |||||
| FDIC premiums and related expenses | 134 | 51 | |||||
| Legal fees | 113 | 38 | |||||
| Other real estate owned expenses | 51 | 14 | |||||
| Professional fees | 266 | 721 | |||||
| Data processing | 500 | 317 | |||||
| Other expenses | 738 | 600 | |||||
| TOTAL NON-INTEREST EXPENSE | 4,794 | 4,570 | |||||
| Income before provision for income taxes | 1,436 | 1,531 | |||||
| Income tax expense | 1,562 | 533 | |||||
| Net income | $ | (126 | ) | $ | 998 | ||
| PER SHARE OF COMMON STOCK | |||||||
| Basic | $ | (0.01 | ) | $ | 0.16 | ||
| Diluted | $ | (0.02 | ) | $ | 0.16 | ||
BANCORP OF NEW JERSEY, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except for per share data)
| For the Twelve Months Ended December 31, | |||||||
| 2017 | 2016 | ||||||
| INTEREST INCOME | |||||||
| Loans, including fees | $ | 30,707 | $ | 30,242 | |||
| Securities | 862 | 751 | |||||
| Federal funds sold and other | 1,072 | 417 | |||||
| TOTAL INTEREST INCOME | 32,641 | 31,410 | |||||
| INTEREST EXPENSE | |||||||
| Savings and money markets | 1,756 | 1,523 | |||||
| Time deposits | 5,577 | 5,026 | |||||
| Borrowed funds | 278 | 425 | |||||
| TOTAL INTEREST EXPENSE | 7,611 | 6,974 | |||||
| NET INTEREST INCOME | 25,030 | 24,436 | |||||
| Provision for loan losses | 400 | 1,570 | |||||
| NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES | 24,630 | 22,866 | |||||
| NON-INTEREST INCOME | |||||||
| Fees and service charges on deposit accounts | 448 | 491 | |||||
| TOTAL NON-INTEREST INCOME | 448 | 491 | |||||
| NON-INTEREST EXPENSE | |||||||
| Salaries and employee benefits | 9,012 | 8,338 | |||||
| Occupancy and equipment expense | 2,966 | 2,755 | |||||
| FDIC premiums and related expenses | 729 | 868 | |||||
| Legal fees | 398 | 260 | |||||
| Other real estate owned expenses | 70 | 95 | |||||
| Professional fees | 1,248 | 1,543 | |||||
| Data processing | 1,433 | 1,201 | |||||
| Other operating expenses | 1,975 | 2,162 | |||||
| TOTAL NON-INTEREST EXPENSE | 17,831 | 17,222 | |||||
| Income before income taxes | 7,247 | 6,135 | |||||
| Income tax expense | 3,673 | 2,134 | |||||
| Net income | $ | 3,574 | $ | 4,001 | |||
| Earnings per share: | |||||||
| Basic | $ | 0.55 | $ | 0. 64 | |||
| Diluted | $ | 0.54 | $ | 0. 64 | |||
BANCORP OF NEW JERSEY, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(in thousands, except for per share data)
| December 31, 2017 | December 31, 2016 | ||||||||
| Assets | |||||||||
| Cash and due from banks | $ | 1,627 | $ | 2,628 | |||||
| Interest bearing deposits | 90,540 | 73,896 | |||||||
| Federal funds sold | 452 | 452 | |||||||
| Total cash and cash equivalents | 92,619 | 76,976 | |||||||
| Interest bearing time deposits | 1,000 | 1,000 | |||||||
| Securities available for sale | 53,234 | 61,589 | |||||||
| Securities held to maturity (fair value $6,058 and $7,343 at December 31, 2017 and December 31, 2016, respectively) | 6,058 | 7,343 | |||||||
| Restricted investment in bank stock, at cost | 1,380 | 1,983 | |||||||
| Loans receivable | 721,191 | 660,571 | |||||||
| Deferred loan fees and costs, net | (798 | ) | (586 | ) | |||||
| Allowance for loan losses | (8,317 | ) | (8,287 | ) | |||||
| Net loans | 712,076 | 651,698 | |||||||
| Premises and equipment, net | 13,725 | 13,497 | |||||||
| Accrued interest receivable | 2,695 | 2,366 | |||||||
| Other real estate owned | 415 | 614 | |||||||
| Other assets | 4,205 | 5,374 | |||||||
| Total assets | $ | 887,407 | $ | 822,440 | |||||
| Liabilities and Stockholders’ Equity | |||||||||
| LIABILITIES: | |||||||||
| Deposits: | |||||||||
| Noninterest-bearing demand deposits | $ | 133,661 | $ | 137,564 | |||||
| Savings and interest bearing transaction accounts | 307,583 | 287,682 | |||||||
| Time deposits $250 and under | 231,224 | 156,477 | |||||||
| Time deposits over $250 | 115,825 | 136,265 | |||||||
| Total deposits | 788,293 | 717,988 | |||||||
| Borrowed funds | 13,385 | 25,008 | |||||||
| Accrued expenses and other liabilities | 2,420 | 2,300 | |||||||
| Total liabilities | 804,098 | 745,296 | |||||||
| Stockholders’ equity: | |||||||||
| Common stock, no par value, authorized 20,000,000 shares; issued and outstanding 6,932,690 at December 31, 2017 and 6,316,291 at December 31, 2016 | 70,182 | 61,524 | |||||||
| Retained earnings | 13,482 | 15,813 | |||||||
| Accumulated other comprehensive loss | (355 | ) | (193 | ) | |||||
| Total stockholders’ equity | 83,309 | 77,144 | |||||||
| Total liabilities and stockholders’ equity | $ | 887,407 | $ | 822,440 | |||||