American Bancorp of New Jersey, Inc. (NASDAQ: ABNJ) ("American")
announced today earnings of $688,000 for the quarter ended March
31, 2006. By comparison, net income for the quarters ended December
31, 2005 and March 31, 2005 were $663,000 and $584,000,
respectively. Basic and diluted earnings per share for the quarter
ended March 31, 2006 were $0.05 and $0.05, respectively. By
comparison, for the quarter ended December 31, 2005 both basic and
diluted earnings per share were $0.05. For the quarter ended March
31, 2005, both basic and diluted earnings per share 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
March 31, 2005 reported by American are those of ASB Holding
Company. The Company's net interest spread and margin for the
quarter ended March 31, 2006 improved from the prior quarter ended
December 31, 2005. For those comparative periods, the Company's net
interest spread improved by 4 basis points from 1.87% to 1.91%
while its net interest margin improved 9 basis points from 2.71% to
2.80%. In large part, this improvement in net interest spread and
margin was attributable to the Company's continued reinvestment of
incoming cash flows from the investment securities portfolio into
higher yielding loans. For the quarter ended March 31, 2006, loans
receivable, net increased $17.8 million or 5.0% to $372.0 million
from $354.2 million at December 31, 2005. The growth was comprised
of net increases in multi-family, commercial real estate and
construction loans totaling $9.3 million, coupled with net
increases in commercial and business loans totaling $2.8 million.
Together, net growth in these loan balances totaled $12.1 million
comprising approximately two-thirds of the Company's net increase
in loans receivable for the quarter. The remaining net growth in
loans included increases in 1-4 family mortgages, including equity
loans and home equity lines of credit, totaling $5.9 million. For
that same period, the balance of the Company's investment
securities decreased $8.4 million while its interest bearing cash
equivalents also decreased $10.6 million. The combined decrease in
these categories of approximately $19.0 million provided the
funding for the net growth in loans reported for the quarter ended
March 31, 2006. Deposits increased by $2.2 million or 0.7% to
$329.2 million at March 31, 2006 from $327.0 million at December
31, 2005. This increase was primarily attributable to net growth of
approximately $2.0 million of interest bearing savings and
certificates of deposit. Offsetting this growth in deposits was a
decrease of $1.3 million in borrowings due largely to the repayment
of a maturing Federal Home Loan Bank advance. Notwithstanding these
comparisons of the past two consecutive quarters, the Company's net
interest spread of 1.91% for the current quarter was still below
its net interest spread of 2.41% for the same comparative period in
2005 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 comparatively higher average balance of
investment securities and short term, liquid assets during the
quarter. These balances resulted from the receipt of capital
proceeds from the Company's second step conversion which were
deployed into such assets throughout the prior quarter ended
December 31, 2005. 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 82 basis points from 2.02% for the quarter ended March
31, 2005 to 2.84% for the quarter ended March 31, 2006. For the
same comparative periods, yield on loans increased 2 basis points
from 5.36% to 5.38%. 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 have been
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 9 basis points from 2.71% for the quarter
ended March 31, 2005 to 2.80% for the quarter ended March 31, 2006.
Overall balance sheet growth and improvements in net interest
margin contributed significantly to a $620,000 or 21.8% improvement
in net interest income from $2.8 million for the quarter ended
March 31, 2005 to $3.5 million for the quarter ended March 31,
2006. This improvement was offset, in part, by comparatively higher
provisions for loan losses. For those same comparative periods, the
loan loss provision increased $89,000 from $70,000 to $159,000 due
primarily to comparatively higher net growth in commercial loans.
Noninterest income increased $82,000 from $290,000 for the quarter
ended March 31, 2005 to $372,000 for the quarter ended March 31,
2006. This improvement was due largely to increases in deposit
service fees and charges coupled with comparatively higher loan
prepayment fees. These comparative improvements in net interest and
noninterest income were partially offset by increases to
noninterest expense. Noninterest expense increased $410,000 from
$2.2 million for the quarter ended March 31, 2005 to $2.6 million
for the quarter ended March 31, 2006. This increase was primarily
attributable to growth in salary and employee benefits costs which
increased $354,000 for those same comparative periods. Such
increases resulted from executive and lending staffing additions
coupled with overall annual increases in employee compensation and
benefits. Additionally, professional and consulting fees increased
$38,000 to $137,000 for the quarter ended March 31, 2006 from
$99,000 for the same quarter in 2005. In large part, these
increases were attributable to audit and 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 following table presents selected comparative
financial data for the periods ended March 31, 2006, December 31,
2005 and September 30, 2005 and selected comparative operating data
for the quarters ended March 31, 2006, December 31, 2005 and March
31, 2005: -0- *T FINANCIAL HIGHLIGHTS (unaudited) At March 31,
December 31, September 30, 2006 2005 2005 ---------- ------------
------------- (In thousands) SELECTED FINANCIAL DATA: Total Assets
$ 516,278 $ 516,924 $ 555,860 Cash and cash equivalents 18,905
30,017 125,773 Securities available-for-sale 92,873 100,752 62,337
Securities held-to-maturity 11,887 12,373 7,824 Loans receivable,
net 371,979 354,207 341,006 Loans held for sale 419 - 280 Federal
Home Loan Bank stock 3,121 3,180 3,119 Deposits 329,190 327,036
340,925 Total borrowings 52,405 53,719 53,734 Total equity 128,630
129,755 39,506 3 months ended March 31, December 31, March 31, 2006
2005 2005 ---------- ------------ ------------- (In thousands)
SELECTED OPERATING DATA: Total interest income $ 6,239 $ 6,091 $
5,089 Total interest expense 2,773 2,712 2,243 ----------
------------ ------------- Net interest income 3,466 3,379 2,846
Provision for loan losses 159 86 70 ---------- ------------
------------- Net interest income after provision for loan losses
3,307 3,293 2,776 Non interest income 372 26 290 Non interest
expense 2,564 2,245 2,154 ---------- ------------ -------------
Income before income taxes 1,115 1,074 912 Income tax provision 427
411 328 ---------- ------------ ------------- Net income $ 688 $
663 $ 584 ========== ============ ============= PER SHARE DATA:
Earnings per share Basic $ 0.05 $ 0.05 $ 0.04 Diluted $ 0.05 $ 0.05
$ 0.04 *T 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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