American Bancorp of New Jersey, Inc. (NASDAQ: ABNJ) ("American")
announced today earnings of $329,000 for the quarter ended December
31, 2006. By comparison, net income for the quarter ended December
31, 2005 was $663,000. Basic and diluted earnings per share for the
quarter ended December 31, 2006 were $0.03 and $0.03, respectively.
By comparison, for the quarter ended December 31, 2005, basic and
diluted earnings per share were $0.05 and $0.05, respectively. For
the quarter ended December 31, 2006, loans receivable, net
increased $10.9 million or 2.7% to $409.5 million from $398.6
million at September 30, 2006. The growth was comprised of net
increases in commercial loans totaling $14.8 million. Such loans
include multi-family, nonresidential real estate, construction and
business loans. The increase in loans receivable net also included
net increases in home equity loans and home equity lines of credit
totaling $1.1 million. Offsetting the growth in these categories
was a $5.0 million decrease in the balance of 1-4 family first
mortgages and net increases to the allowance for loan losses
totaling $50,000. For that same period, the balance of the
Company�s investment securities decreased $10.6 million as incoming
cash flows from that portfolio continued to be reinvested into
commercial loans. This decrease was offset by a net increase in
cash and cash equivalents of $4.5 million at the end the quarter.
Additionally, the Bank reported a $4.1 million increase in the cash
surrender value of life insurance which was acquired to offset the
additional cost of recently enacted additions to executive salary
continuation agreements. Total deposits increased by $26.4 million
for the quarter ended December 31, 2006 attributable primarily to
the opening of the Bank�s newest deposit branch located in Verona,
New Jersey. The Bank celebrated the Verona branch grand opening on
December 2, 2006 with balances at that branch totaling $26.9
million at the quarter ended December 31, 2006. Offsetting this
increase was a net decrease in borrowings totaling $4.0 million
primarily attributable to the repayment of maturing FHLB advances
totaling $2.0 million and the reduction of overnight borrowings in
the same amount. Additionally, the Company reported an increase of
$12.9 million in Treasury stock attributable primarily to the
Company�s current share repurchase program. The continued growth in
the Company�s commercial lending activities contributed
significantly to improved yields on earning assets, which increased
63 basis points to 5.48% for the quarter ended December 31, 2006
from 4.85% for quarter ended December 31, 2005. However, these
improved yields were more than offset by increases in the cost of
interest-bearing liabilities which grew by 94 basis points to 3.93%
from 2.99% for the same comparative periods. This increase in
interest costs was largely attributable to higher costs of
interest-bearing deposits, which grew 106 basis points to 3.72% for
the quarter ended December 31, 2006 from 2.66% for the quarter
ended December 31, 2005. Contributing to this increase in the cost
of interest-bearing liabilities was the impact of higher
promotional interest rates paid on new deposit accounts at the
Bank�s Verona branch. However, a significant portion of this
increase was attributable to continued upward pressure on deposit
interest rates in the highly competitive markets serviced by the
Bank. As a result, the Company�s net interest spread shrank 32
basis points from 1.86% to 1.54% for those same comparative
periods. 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 somewhat
diminished by the significant level of capital held by the Company.
As a result, the Company�s net interest margin decreased by 12
basis points from 2.71% to 2.59% during those same comparative
periods. The effects of net interest margin compression contributed
significantly to a $209,000 or 6.2% decrease in net interest income
to $3.2 million for the quarter ended December 31, 2006 from $3.4
million for the quarter ended December 31, 2005. This decrease was
offset, in part, by a comparatively lower net provision to the
allowance for loan losses. For those same comparative periods, the
Company�s net loan loss provision decreased $37,000 to $50,000 from
$87,000. The provision expense for the quarter ended December 31,
2006 reflected the reversal of an $86,000 loss reserve against a
previously impaired loan participation. Management�s review of the
loan conducted as of December 31, 2006 concluded that, based upon
the loan�s consistent payment history and the improved financial
performance of the underlying commercial property, the loan was no
longer impaired resulting in the reversal of the prior impairment
reserve. The loan�s classification was also upgraded from doubtful
to substandard. Excluding this adjustment, the Bank�s provision
expense totaled $136,000 for the quarter ended December 31, 2006.
Noninterest income increased $261,000 to $287,000 for the quarter
ended December 31, 2006 from $26,000 for the quarter ended December
31, 2005. This increase in noninterest income was primarily
attributable to a $271,000 loss on sale of an underperforming
investment security during the first quarter of fiscal 2006
compared with no such losses in the current quarter. The net
increase in noninterest income also reflected an $8,000 increase in
income from the cash surrender value of life insurance attributable
to a combination of higher average balances and improved yields on
those assets. Offsetting these increases were decreases in deposit
service fees and charges of $23,000 attributable to comparatively
lower receipts of uncollected and insufficient funds charges on
transaction accounts. Noninterest expense increased $645,000 to
$2.9 million for the quarter ended December 31, 2006 from $2.2
million for the quarter ended December 31, 2005. Significant
components of this growth in operating costs include comparative
increases to salaries and employee benefits of $567,000, increased
occupancy and equipment costs of $18,000, increases in advertising
and marketing costs of $68,000 and increases to other non interest
expenses of $50,000. Offsetting these increases were decreases of
$42,000 in legal costs and $18,000 in professional and consulting
fees. The $567,000 increase in salaries and employee benefits for
the comparative quarters includes increases of $140,000 to employee
salaries and payroll taxes. Such increases were primarily
attributable to growth in the Company�s commercial lending staff
and additions to retail deposit staff associated with the Company�s
branching strategy. Other noteworthy increases to salaries and
employee benefits resulted from the implementation of the Company�s
2006 Equity Incentive Plan approved by shareholders in May, 2006.
Costs relating to the Company�s restricted stock and stock option
plans increased a total of $269,000 from the quarter ended December
31, 2005 to the quarter ended December 31, 2006. Additionally, ESOP
costs increased $28,000 due to an increase in share value. Finally,
the variance also reflects the reversal of $131,000 of profit
sharing expense recorded in the earlier comparative quarter ended
December 31, 2005 resulting from the discontinuation of that
benefit plan. The remaining increases in noninterest expense,
including the reported increases in occupancy and equipment costs
of $18,000, advertising and marketing costs of $68,000 and other
noninterest expense of $50,000 were largely attributable to the
operation of the Bank�s newest branch in Verona, New Jersey. In
particular, for the quarter ended December 31, 2006, both
advertising and marketing and other noninterest expense included
branch start up costs associated with the promotion and operation
of that branch. Offsetting these increases in noninterest expense
were reductions in legal expense and professional and consulting
fees of $42,000 and $18,000, respectively. The higher legal costs
incurred in the quarter ended December 31, 2005 were largely
attributable to matters resulting from the completion of Company�s
second step conversion which closed October 5, 2005. Such matters
included significant modifications to the Company�s ESOP for which
no equivalent expense was incurred in the current period.
Comparative decreases in professional and consulting fees were the
result of lower internal and external audit costs associated with
the Sarbanes Oxley Act of 2002 (�the Act�) during the current
quarter. The expense incurred in the quarter ended December 31,
2005 included a portion of the first year costs associated with the
development, implementation and audit of controls over financial
statement reporting in accordance with Section 404 of the Act. The
lower costs in the quarter ended December 31, 2006 reflect the
reduced financial burden of maintaining and updating those controls
as required to ensure ongoing compliance with the Act. The
following tables present selected financial data as of December 31,
2006 and September 30, 2006 and selected operating data for the
quarters ended December 31, 2006 and December 31, 2005. FINANCIAL
HIGHLIGHTS (unaudited) � At December 31, At September 30, 2006�
2006� � Balance % TotalAssets Balance % TotalAssets SELECTED
FINANCIAL DATA: Assets Cash and cash equivalents $ 11,653� 2.22% $
7,165� 1.39% Securities available-for-sale 64,348� 12.27� 74,523�
14.49� Securities held-to-maturity 10,088� 1.92� 10,547� 2.05�
Loans held for sale 668� 0.13� -� -� Loans receivable, net 409,524�
78.11� 398,624� 77.51� Premises and equipment 7,268� 1.39� 6,523�
1.27� Federal Home Loan Bank stock 3,175� 0.61� 3,356� 0.65� Cash
surrender value of life insurance 12,830� 2.45� 8,747� 1.70�
Accrued interest receivable 1,983� 0.38� 1,979� 0.38� Other assets
� 2,783� 0.52� � 2,855� 0.56� Total Assets $ 524,320� 100.00� $
514,319� 100.00� Liabilities and equity Deposits $ 353,543� 67.43%
$ 327,147� 63.61% Advances for taxes and insurance 2,369� 0.45�
2,466� 0.48� Borrowings 52,059� 9.93� 56,075� 10.90� Other
liabilities 3,777� 0.72� 3,770� 0.73� Amount reclassified on ESOP
shares -� -� -� -� Equity � 112,572� 21.47� � 124,861� 24.28� Total
liabilities and equity $ 524,320� 100.00% $ 514,319� 100.00% � �
Loan Data � Balance % TotalLoans � Balance % TotalLoans 1-4 family
mortgage loans $ 267,358� 65.29% $ 272,318� 68.32% Home equity
loans 13,141� 3.21� 12,294� 3.08� Home equity lines of credit
19,446� 4.75� 19,194� 4.82� Multifamily mortgage loans 34,320�
8.38� 35,059� 8.80� Nonresidential mortgage loans 46,047� 11.24�
38,395� 9.63� Land and property acquisition loans 4,647� 1.13� 534�
0.13� Construction loans 18,333� 4.48� 16,155� 4.05� Commercial
loans 7,662� 1.87� 6,078� 1.52� Consumer loans 743� 0.18� 720�
0.18� Allowance for loans losses � (2,173) (0.53) � (2,123) (0.53)
Loans receivable, net $ 409,524� 100.00% $ 398,624� 100.00% � �
Deposit Data � Balance % TotalDeposits � Balance % TotalDeposits
Noninterest-bearing deposits 26,223� 7.42� 23,545� 7.20�
Interest-bearing checking 51,130� 14.46� 31,429� 9.61� Savings
105,601� 29.87� 107,008� 32.71� Certificates of deposit � 170,589�
48.25� � 165,165� 50.48� Deposits $ 353,543� 100.00� $ 327,147�
100.00� FINANCIAL HIGHLIGHTS (continued) (unaudited) � At December
31, At September 30, 2006� 2006� Capital Ratios Equity to total
assets 21.47% 24.28% � Asset Quality Ratios: Non-performing loans
to total loans 0.41% 0.52% Non-performing assets to total assets
0.32� 0.41� Net charge offs to average loans outstanding 0.00�
0.00� Allowance for loan losses to non-performing loans 129.26�
101.64� Allowance for loan losses to total loans 0.53� 0.53� � �
For the 3 months ended December 31, December 31, 2006� 2005�
SELECTED OPERATING DATA: Total interest income $ 6,708� $ 6,091�
Total interest expense � 3,538� � 2,712� Net interest income 3,170�
3,379� Provision for loan losses � 50� � 86� Net interest income
after provision for loan losses 3,120� 3,293� Noninterest income
287� 26� Noninterest expense � 2,890� � 2,245� Income before income
taxes 517� 1,074� Income tax provision � 188� � 411� Net income $
329� $ 663� � Performance Ratios: Return on average assets 0.26%
0.51% Return on average equity 1.10� 2.12� Net interest rate spread
1.54� 1.86� Net interest margin 2.59� 2.71� Noninterest income to
average total assets 0.22� 0.02� Noninterest expense to average
total assets 2.26� 1.74� Efficiency Ratio 83.60� 65.92� � PER SHARE
DATA: Earnings per share Basic $ 0.03� $ 0.05� Diluted $ 0.03� $
0.05� The foregoing material contains forward-looking statements
within the meaning of the Private Securities Litigation Reform Act
of 1995 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.
American Bancorp N J (MM) (NASDAQ:ABNJ)
Historical Stock Chart
From Jun 2024 to Jul 2024
American Bancorp N J (MM) (NASDAQ:ABNJ)
Historical Stock Chart
From Jul 2023 to Jul 2024