American Bancorp of New Jersey, Inc. Announces First Quarter 2006 Earnings
January 26 2006 - 3:35PM
Business Wire
American Bancorp of New Jersey, Inc. (NASDAQ: ABNJ) ("American")
announced today earnings of $663,000 for the quarter ended December
31, 2005 as compared to $610,000 for the quarter ended December 31,
2004. Basic and diluted earnings per share for the quarter ended
December 31, 2005 were $0.05 and $0.05, respectively. By
comparison, both basic and diluted earnings per share for the
quarter ended December 31, 2004 were $0.04 after adjusting for the
exchange of shares relating to the Company's recent second-step
conversion. On October 5, 2005, American Savings, MHC closed its
second step conversion. Through this transaction, the Company
replaced ASB Holding Company as the holding company of American
Bank of New Jersey, a federally chartered stock savings bank which
conducts business from its main office in Bloomfield, New Jersey
and one branch office in Cedar Grove, New Jersey. Upon closing the
conversion, each share of ASB Holding Company stock was exchanged
for 2.55102 shares of American Bancorp of New Jersey, Inc. The
earnings for the quarter ended December 31, 2004 reported by
American are those of ASB Holding Company. The Company's net
interest spread declined to 1.87% for the current quarter in
comparison to 2.32% for the same comparative period in 2004 as
increases in the Company's cost of interest bearing liabilities
continued to outpace the increase in the Company's yield on earning
assets. This decline was attributable, in part, to the Company
maintaining a high average balance of short term, liquid assets
during the quarter. These balances resulted from the initial
receipt of capital proceeds from the Company's second step
conversion which were deployed into higher yielding investment
securities throughout the quarter. Additionally, continued upward
pressure on the cost of retail deposits resulted in increases in
interest expense which outpaced the increase in interest income
resulting from improved yields on loans. The cost of interest
bearing deposits increased 69 basis points from 1.98% for the
quarter ended December 31, 2004 to 2.67% for the quarter ended
December 31, 2005. For the same comparative periods, yield on loans
increased 8 basis points from 5.29% to 5.37%. The factors resulting
in the compression of the Company's net interest spread also
impacted the Company's net interest margin. However, the effects of
that compression were more than offset by the impact of the
additional capital raised in the Company's second-step conversion.
As a result, the Company's net interest margin increased 8 basis
points from 2.63% for the quarter ended December 31, 2004 to 2.71%
for the quarter ended December 31, 2005. For the quarter ended
December 31, 2005, loans receivable, net increased $13.2 million or
3.9% to $354.2 million from $341.0 million at September 30, 2005.
The growth was comprised of net increases in multi-family,
commercial real estate and construction loans totaling $5.5 million
coupled with net increases in commercial and business loans
totaling $1.1 million. Together, net growth in these loan balances
totaled $6.6 million comprising approximately half of the Company's
net increase in loans receivable for the quarter. The remaining net
growth in loans included increases in one-to-four family mortgages,
including equity loans and home equity lines of credit, totaling
$6.7 million. Deposits decreased by $13.9 million or 4.1% to $327.0
million at December 31, 2005 from $340.9 million at September 30,
2005. This decrease was primarily attributable to $9.8 million of
deposit balances withdrawn to purchase shares in the Company's
stock offering. The remaining $4.1 million of net deposit
withdrawals were primarily attributable to aggressive deposit
competition in the markets served by the Company. Overall balance
sheet growth and improvements in net interest margin contributed
significantly to a $655,000 or 24.0% improvement in net interest
income from $2.7 million for the quarter ended December 31, 2004 to
$3.4 million for the quarter ended December 31, 2005. However,
improvements in net interest income were partially offset by
comparatively lower noninterest income and higher noninterest
expense. Noninterest income declined $221,000 from $247,000 for the
quarter ended December 31, 2004 to $26,000 for the quarter ended
December 31, 2005. This reduction was primarily attributable to a
$271,000 loss on sale of an underperforming investment security
during the most recent quarter. Excluding that loss, comparative
quarterly noninterest income increased by $50,000 due largely to
increases in loan related fee income and improvement in income from
cash surrender value of life insurance. Noninterest expense
increased $288,000 from $2.0 million for the quarter ended December
31, 2004 to $2.2 million for the quarter ended December 31, 2005.
The comparative increase in noninterest expense was diminished by
the reversal of previously accrued profit sharing expenses totaling
$131,000 in the quarter ended December 31, 2005. Excluding this
item, comparative quarterly noninterest expense increased $419,000.
This increase was attributable, in part, to executive and lending
staffing additions coupled with overall annual increases in
employee compensation and benefits. Additionally, the Company
recorded restricted stock plan and stock options benefit plan
expenses for the quarter ended December 31, 2005 of $148,000. Such
expenses were not recorded for the quarter ended December 31, 2004
which preceded each plan's approval by shareholders on January 20,
2005. Professional and consulting fees also increased $52,000 to
$119,000 for the quarter ended December 31, 2005 from $67,000 for
the same quarter in 2004. In large part, these increases were
attributable to consulting costs incurred by the Company relating
to compliance with the Sarbanes Oxley Act of 2002 and the
outsourcing of other internal audit-related services. The foregoing
material contains forward-looking statements concerning our
financial condition, results of operations and business. We caution
that such statements are subject to a number of uncertainties and
actual results could differ materially, and, therefore, readers
should not place undue reliance on any forward-looking statements.
We do not undertake, and specifically disclaim, any obligation to
publicly release the results of any revisions that may be made to
any forward-looking statements to reflect the occurrence of
anticipated or unanticipated events or circumstances after the date
of such statements.
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