- Net income to common shareholders increases
71.1% for the year over year quarter
- Net interest margin for the quarter remains
strong at 4.09%
- Loans increase $24.9 million, or 4.7%, from
year-end 2011
- Core checking deposits increase $17.5 million,
or 11.8%, from year-end 2011
Community Partners Bancorp (Nasdaq:CPBC), (the "Company"), the
parent company of Two River Community Bank ("Two River"), today
announced consolidated earnings for the quarter and nine months
ended September 30, 2012.
For the quarter ended September 30, 2012, the Company reported
net income available to common shareholders of $1.2 million, or
$0.15 per diluted share, compared to $703,000, or $0.09 per diluted
share, for the same period in 2011, an increase of $500,000, or
71.1%. On a linked quarter basis, third quarter 2012 net income to
common shareholders increased $167,000, or 16.1%, from second
quarter 2012 results. All share and per share data for all
referenced reporting periods have been adjusted for the 3% stock
dividend paid on December 30, 2011 to shareholders of record as of
December 13, 2011.
For the nine months ended September 30, 2012, the Company
reported net income available to common shareholders of $3.3
million, or $0.40 per diluted share, an increase of $839,000, or
34.7%, over the $2.4 million, or $0.30 per diluted share, reported
for the same period in 2011.
Net income to common shareholders for the third quarter of 2012
were positively impacted by a $69,000 refund from the U.S. Treasury
for an overpayment of dividends paid on our preferred stock issued
in connection with the Small Business Lending Fund ("SBLF")
established under the Small Business Jobs Act of 2010. These
refunds relate to prior period dividend rate revisions. For the
same period in 2011, net income to common shareholders were
adversely impacted by the $301,000 remaining discount accretion
resulting from the redemption of the preferred stock issued under
the U.S. Treasury's TARP Capital Purchase Plan. Excluding the
effects of these items, net income to common shareholders for the
three and nine months ended September 30, 2012 increased $130,000,
or 12.9%, and $469,000, or 17.2%, respectively, over the same
periods in 2011.
William D. Moss, President and Chief Executive Officer, stated,
"The results for the third quarter announced today marks our
twelfth consecutive quarter in which we had a year over year
increase in net income. Our overall financial performance continues
to improve despite a challenging operating environment plagued by
high unemployment, weak real estate valuations and prolonged low
interest rates, which has pressured net interest margins. We
continue to execute on our strategic plan and the result is a
strong balance sheet and improved credit and capital positions.
This has allowed us the ability to expand and grow our business
while providing the premier service one would expect from a local
community bank. Our net interest margin continues to rank amongst
the highest, compared to an independently determined peer group of
New Jersey based banks and thrifts, and is fueled by strong growth
in both loans and core checking deposits. Asset quality continues
to remain our primary focus, as we remain diligent in our workout
process of either liquidating other real estate properties or
working with our troubled borrowers to find resolution. In early
October, we relocated and consolidated our executive offices and
all bank related departments into a new state of the art corporate
headquarters located in Tinton Falls. This new facility will allow
for better utilization of space for our future growth plans as well
as allowing us to gain greater efficiencies in how we serve our
valued customers."
The Company maintained capital ratios in the third quarter of
2012 that were in excess of regulatory standards for
well-capitalized institutions. At September 30, 2012, the Company's
Tier 1 capital to average assets ratio was 10.59%, Tier 1 capital
to risk-weighted assets ratio was 12.03% and total capital to
risk-weighted assets ratio was 13.28%. Mr. Moss further noted, "Our
Company continues to strengthen its capital position and remains
mindful of the potential impact that the new proposed Basel III
regulations will have on our Company. At quarter-end, our common
equity Tier 1 capital ratio, as proposed under Basel III, was a
strong 8.83%, while our tangible book value per common share
increased to $7.58 as compared to $7.04 for the same period in
2011."
Results for the quarter ended September 30, 2012 also
include:
- a loan loss provision of $330,000, recorded during the third
quarter 2012, which was a $60,000 increase from the second quarter
2012 provision and $400,000 less than the third quarter 2011
provision. During the quarter ended September 30, 2012, $129,000 in
charge-offs were taken against the allowance for loan losses in
connection with two credits, which had been previously fully
reserved; and
- a $314,000 net decrease in other real estate owned ("OREO")
expenses, OREO impairments and sales and loan workout expenses
compared to related expenses incurred during the second quarter of
2012, primarily due to second quarter events involving the
write-down taken on one property and net loss on the sale of
OREOs.
Net Interest Income and Net Interest Margin
Net interest income for the quarter ended September 30, 2012
totaled $6.6 million, an increase of $96,000, or 1.5%, from the
same period in 2011. Average interest-earning assets for the third
quarter 2012 were $642.9 million, an increase of $21.7 million, or
3.5%, primarily due to increases in both the loan and investment
portfolios. Our quarterly yield on interest-earning assets declined
by 20 basis points from the same period in 2011, as the current
prolonged low interest rate environment has continued to exert
pressure on asset yields. Our quarterly cost of interest-bearing
liabilities declined by 15 basis points from the same period last
year due to a combination of lower deposit costs and higher average
balances in core checking deposits, which increased $11.1 million,
or 7.3%. On a linked quarter basis, net interest income increased
by $161,000, or 2.5%, from the second quarter of 2012, also due
principally to an increase in our average interest-earning assets.
Net interest income for the nine months ended September 30, 2012
totaled $19.6 million, an increase of $226,000, or 1.2%, over the
same period in 2011 due primarily to the same year over year items
discussed above.
The Company reported a net interest margin of 4.09% for the
quarter ended September 30, 2012, representing an increase of 1
basis point when compared to the 4.08% net interest margin for the
quarter ended June 30, 2012 and decreased 7 basis points when
compared to the 4.16% net interest margin for the comparable three
months ended 2011. The decline from last year was primarily due to
the low interest rate environment as well as the timing of a
portion of loan growth, which occurred in the later part of the
quarter. In addition, $31,000 of interest and late fee reversals
was recorded on loans, which were transferred into non-accrual
status.
Non-Interest Income
Non-interest income for the quarter ended September 30, 2012
totaled $597,000, a decrease of $221,000, or 27.0%, compared to the
same period in 2011. On a linked quarter basis, non-interest income
decreased by $163,000, or 21.4%, from the second quarter of 2012.
The decrease in the quarter ended September 30, 2012 compared to
the same period in 2011 was primarily due to $324,000 of gains on
the sale of securities in 2011 compared to no sales in 2012.
Additionally, a $32,000 credit loss on a pooled trust preferred
security was recorded during the third quarter 2012. These
decreases were partially offset by an increase in fees generated by
our residential mortgage department, higher bank-owned life
insurance income resulting from increased purchases of such
investments in the fourth quarter of 2011 and an increase in
service fees on deposit accounts. The decrease on a linked quarter
basis resulted primarily from an $187,000 gain on SBA loan sales
during the second quarter 2012. For the nine months ended September
30, 2012, non-interest income increased $103,000, or 5.7%, from the
same period in 2011. The increase was due primarily to an increase
in fees generated by our residential mortgage department, increases
in service fees on deposit accounts, higher bank-owned life
insurance income resulting from increased purchases of such
investments in the fourth quarter of 2011, as well as higher gains
on the sale of SBA loans. These increases were partially offset by
a decrease in the gains on the sale of securities available for
sale as well as an $80,000 credit loss on a pooled trust preferred
security recorded during the nine-month period ended September 30,
2012.
Non-Interest Expense
Non-interest expense for the quarter ended September 30, 2012
totaled $4.9 million, an increase of $80,000, or 1.7%, compared to
the same period in 2011. This increase was primarily due to a
$140,000 increase in salaries and benefits resulting from higher
residential mortgage commissions along with the hiring of
additional key personnel as the Company continues to expand its
lending division. These increases were partially offset by lower
professional fees and occupancy and equipment expense. On a linked
quarter basis, non-interest expense decreased $144,000, or 2.8%,
from the $5.1 million reported for the second quarter of 2012. This
decrease from last quarter was primarily due to lower OREO
expenses, OREO impairments and sales partially offset by increases
in loan workout expenses, occupancy and equipment expenses and data
processing expenses. Non-interest expense for the nine months ended
September 30, 2012 totaled $14.9 million, an increase of $507,000,
or 3.5%, over the same period in 2011, due primarily to the same
year over year items discussed above.
Balance Sheet Activity
Total assets as of September 30, 2012 reached a record $705.1
million, an increase of 4.5%, compared to $674.6 million as of
December 31, 2011. Total loans as of September 30, 2012 were $555.0
million, an increase of 4.7%, compared to $530.1 million reported
at December 31, 2011. Total deposits as of September 30, 2012 were
$577.7 million, an increase of 4.3%, compared with $553.9 million
as of December 31, 2011. Core checking deposits at September 30,
2012 increased $17.5 million, or 11.8%, when compared to year-end
2011, while savings accounts, inclusive of money market deposits,
increased 5.5%. Conversely, higher cost time deposits decreased
8.6% over this same period.
Asset Quality
The Company's non-performing assets at September 30, 2012
increased to $12.0 million as compared to $8.9 million at June 30,
2012 and decreased from the $13.0 million reported at December 31,
2011. Non-accrual loans were $4.7 million at September 30, 2012
compared to $5.2 million at both June 30, 2012 and December 31,
2011. OREO properties remained unchanged at $3.6 million at both
September 30, 2012 and June 30, 2012 as compared to $7.8 million at
December 31, 2011. Loans past due 90 days or more and still
accruing at quarter end 2012 increased to $3.7 million as compared
to $49,000 at June 30, 2012 and none at December 31, 2011. This
increase was the direct result of several loans that reported 90
days or more past due at September 30, 2012. All such loans are
well secured and in the process of collection and the Company
anticipates that these loans will be paid off in full and/or
reinstated in full in the near term.
The Company's non-performing assets at September 30, 2012, as a
percentage of total assets, were 1.71%, up from the 1.27% at June
30, 2012 and down from the 1.93% reported at December 31, 2011.
This increase from the prior quarter is a direct result of the
above-mentioned loans reporting past due 90 days or more. Troubled
Debt Restructured loan balances increased to $9.9 million at
September 30, 2012 from $9.7 million at June 30, 2012 and $7.6
million reported at December 31, 2011. The increase from June 30,
2012 is primarily due to an addition of one residential mortgage,
which is currently paying under the agreed terms.
The Company's allowance for loan losses was $7.5 million at
September 30, 2012 compared to $7.3 million at December 31, 2011.
Loss allowance as a percentage of total loans at September 30, 2012
was 1.35% compared to 1.32% at June 30, 2012 and 1.38% at December
31, 2011. During the quarter ended September 30, 2012, $129,000 of
charge-offs were taken in connection with two credits for which the
full amount of the charge-offs had previously been reserved.
About the Company
Community Partners Bancorp is the holding company for Two River
Community Bank, which is headquartered in Tinton Falls, New Jersey.
Two River Community Bank currently operates 15 branches throughout
Monmouth and Union Counties and also operates two regional lending
offices in New Brunswick and Summit, New Jersey. More information
about Two River Community Bank is available at
www.tworiverbank.com. More information about Community Partners is
available at www.communitypartnersbancorp.com.
Forward Looking Statements
The foregoing contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995.
Such statements are not historical facts and include expressions
about management's confidence and strategies and management's
current views and expectations about new and existing programs and
products, relationships, opportunities, taxation, technology and
market conditions. These statements may be identified by such
forward-looking terminology as "expect," "look," "believe,"
"anticipate," "may," "will," "should," "projects" or similar
statements or variations of such terms. Actual results may differ
materially from such forward-looking statements, and no undue
reliance should be placed on any forward-looking statement. Factors
that may cause results to differ materially from such
forward-looking statements include, but are not limited to,
unanticipated changes in the financial markets and the direction of
interest rates; volatility in earnings due to certain financial
assets and liabilities held at fair value; stronger competition
from banks, other financial institutions and other companies;
changes in loan, investment and mortgage prepayment assumptions;
insufficient allowance for credit losses; a higher level of net
loan charge-offs and delinquencies than anticipated; material
adverse changes in Community Partners' operations or earnings; a
decline in the economy in Community Partners' primary market areas;
changes in relationships with major customers; changes in effective
income tax rates; higher or lower cash flow levels than
anticipated; inability to hire or retain qualified employees; a
decline in the levels of deposits or loss of alternate funding
sources; a decrease in loan origination volume; changes in laws and
regulations, including issues related to compliance with anti-money
laundering and the bank secrecy act laws; adoption, interpretation
and implementation of new or pre-existing accounting
pronouncements; operational risks, including the risk of fraud by
employees or outsiders; and the inability to successfully implement
new lines of business or new products and services. For a list of
other factors which would affect Community Partners' results, see
Community Partners' filings with the Securities and Exchange
Commission, including those risk factors identified in the "Risk
Factor" section and elsewhere in our Annual Report on Form 10-K for
the year ended December 31, 2011. The statements in this press
release are made as of the date of this press release, even if
subsequently made available by Community Partners on its website or
otherwise. Community Partners assumes no obligation for updating
any such forward-looking statements at any time, except as required
by law.
|
|
|
|
COMMUNITY PARTNERS
BANCORP |
Selected Consolidated
Financial Data (Unaudited) |
|
|
|
|
(Dollars in thousands except per share
data) |
|
|
|
|
September 30, |
December
31, |
September 30, |
Selected Period End
Balances: |
2012 |
2011 |
2011 |
Total Assets |
$ 705,130 |
$ 674,554 |
$ 665,373 |
Investment Securities and Restricted
Stock |
66,788 |
62,797 |
58,090 |
Total Loans |
555,038 |
530,130 |
516,763 |
Allowance for Loan Losses |
(7,486) |
(7,310) |
(6,993) |
Goodwill and Other Intangible Assets |
18,415 |
18,540 |
18,588 |
Total Deposits |
577,671 |
553,912 |
544,097 |
Repurchase Agreements |
18,866 |
16,218 |
17,551 |
Long-term Debt |
13,500 |
13,500 |
13,500 |
Shareholders' Equity |
90,931 |
87,134 |
86,398 |
|
|
|
|
|
|
|
September 30, |
June 30, |
March 31, |
December 31, |
September 30, |
Asset Quality
Data: |
2012 |
2012 |
2012 |
2011 |
2011 |
Nonaccrual loans |
$ 4,689 |
$ 5,216 |
$ 4,517 |
$ 5,240 |
$ 6,295 |
Loans past due over 90 days and still
accruing |
3,744 |
49 |
482 |
-- |
51 |
OREO property |
3,593 |
3,593 |
7,281 |
7,765 |
6,592 |
Total Non-Performing Assets |
12,026 |
8,858 |
12,280 |
13,005 |
12,938 |
|
|
|
|
|
|
Troubled Debt Restructured Loans |
9,852 |
9,737 |
9,781 |
7,579 |
7,618 |
|
|
|
|
|
|
Non-Performing Loans to Total Loans |
1.52% |
0.96% |
0.93% |
0.99% |
1.23% |
Allowance as a % of Loans |
1.35% |
1.32% |
1.31% |
1.38% |
1.35% |
Non-Performing Assets to Total Assets |
1.71% |
1.27% |
1.79% |
1.93% |
1.94% |
|
|
|
|
|
|
|
September 30, 2012 |
December 31, 2011 |
|
Tier 1 Capital to |
Tier 1 Capital to |
Total Capital to |
Tier 1 Capital to |
Tier 1 Capital to |
Total Capital to |
|
Average Assets |
Risk Weighted |
Risk Weighted |
Average Assets |
Risk Weighted |
Risk Weighted |
Capital Ratios: |
Ratio |
Assets Ratio |
Assets Ratio |
Ratio |
Assets Ratio |
Assets Ratio |
Community Partners Bancorp |
10.59% |
12.03% |
13.28% |
10.39% |
12.01% |
13.26% |
Two River Community Bank |
10.57% |
12.01% |
13.26% |
10.38% |
12.00% |
13.25% |
"Well capitalized" institution (under
Federal regulations) |
5.00% |
6.00% |
10.00% |
5.00% |
6.00% |
10.00% |
|
|
|
|
|
|
|
|
Three
Months Ended |
Nine Months
Ended |
|
September 30, |
June 30, |
September 30, |
September 30, |
September 30, |
Selected Consolidated Earnings
Data: |
2012 |
2012 |
2011 |
2012 |
2011 |
Total Interest Income |
$ 7,739 |
$ 7,609 |
$ 7,819 |
$ 23,076 |
$ 23,307 |
Total Interest Expense |
1,126 |
1,157 |
1,302 |
3,505 |
3,962 |
Net Interest Income |
6,613 |
6,452 |
6,517 |
19,571 |
19,345 |
Provision for Loan Losses |
330 |
270 |
730 |
950 |
1,855 |
Net Interest Income after Provision for Loan
Losses |
6,283 |
6,182 |
5,787 |
18,621 |
17,490 |
|
|
|
|
|
|
Net other-than-temporary impairment charges
to earnings |
(32) |
(48) |
-- |
(80) |
-- |
Other Non-Interest Income |
629 |
808 |
818 |
2,005 |
1,822 |
Total Non-Interest Income |
597 |
760 |
818 |
1,925 |
1,822 |
|
|
|
|
|
|
FDIC Insurance Expense |
139 |
131 |
143 |
411 |
533 |
Other Non-Interest Expenses |
4,780 |
4,932 |
4,696 |
14,473 |
13,844 |
Total Non-Interest Expenses |
4,919 |
5,063 |
4,839 |
14,884 |
14,377 |
|
|
|
|
|
|
Income before Income Taxes |
1,961 |
1,879 |
1,766 |
5,662 |
4,935 |
Income Tax Expense |
727 |
693 |
661 |
2,087 |
1,829 |
Net Income |
1,234 |
1,186 |
1,105 |
3,575 |
3,106 |
|
|
|
|
|
|
Preferred Stock Dividend & Discount
Accretion. |
31 |
150 |
402 |
318 |
688 |
|
|
|
|
|
|
Net Income available to common
shareholders |
$ 1,203 |
$ 1,036 |
$ 703 |
$ 3,257 |
$ 2,418 |
|
|
|
|
|
|
Per Common Share
Data: |
|
|
|
|
|
Basic Earnings |
$ 0.15 |
$ 0.13 |
$ 0.09 |
$ 0.41 |
$ 0.31 |
Diluted Earnings |
$ 0.15 |
$ 0.13 |
$ 0.09 |
$ 0.40 |
$ 0.30 |
Book Value |
$ 9.89 |
$ 9.73 |
$ 9.39 |
$ 9.89 |
$ 9.39 |
Tangible Book Value (1) |
$ 7.58 |
$ 7.41 |
$ 7.04 |
$ 7.58 |
$ 7.04 |
Average Common Shares Outstanding (in
thousands): |
|
|
|
|
|
Basic |
7,952 |
7,960 |
7,924 |
7,939 |
7,877 |
Diluted |
8,138 |
8,143 |
8,080 |
8,122 |
8,033 |
|
|
|
|
|
|
Other Selected
Ratios: |
|
|
|
|
|
Return on Average Assets |
0.71% |
0.69% |
0.65% |
0.69% |
0.62% |
Return on Average Tangible Assets (1) |
0.73% |
0.70% |
0.67% |
0.71% |
0.64% |
Return on Average Equity |
5.47% |
5.33% |
5.23% |
5.35% |
5.03% |
Return on Average Tangible Equity (1) |
6.87% |
6.72% |
6.72% |
6.75% |
6.50% |
Net Interest Margin |
4.09% |
4.08% |
4.16% |
4.12% |
4.24% |
|
|
|
|
|
|
(1) Non-GAAP Financial
Information. See the "Reconciliation of Non-GAAP Financial
Measures" below. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Non-GAAP Financial
Measures |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The press release contains
certain financial information determined by methods other than in
accordance with generally accepted accounting policies in the
United States (GAAP). These non-GAAP financial measures are "net
income available to common shareholders excluding U.S. Treasury
preferred stock refund and accelerated discount accretion,"
"diluted earnings per common share excluding U.S. Treasury
preferred stock dividend refund and accelerated discount
accretion," "tangible book value per share," "return on average
tangible assets," and "return on average tangible equity." This
non-GAAP disclosure has limitations as an analytical tool and
should not be considered in isolation or as a substitute for
analysis of the Company's results as reported under GAAP, nor is it
necessarily comparable to non-GAAP performance measures that may be
presented by other companies. Our management uses these non-GAAP
measures in its analysis of our performance because it believes
these measures are material and will be used as a measure of our
performance by investors. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of and
for the Three Months Ended |
As of and for the
Nine Months Ended |
|
September 30, |
June 30, |
September 30, |
September 30, |
September 30, |
|
2012 |
2012 |
2011 |
2012 |
2011 |
|
|
|
|
|
|
Net Income available to common
shareholders |
$ 1,203 |
$ 1,036 |
$ 703 |
$ 3,257 |
$ 2,418 |
Effect of U.S. Treasury preferred stock
refund |
(69) |
-- |
-- |
(69) |
-- |
Effect of accelerated portion of discount
accretion |
-- |
-- |
301 |
-- |
301 |
Net Income available to common
shareholders excluding U.S. Treasury preferred stock refund and
accelerated discount accretion |
$ 1,134 |
$ 1,036 |
$ 1,004 |
$ 3,188 |
$ 2,719 |
|
|
|
|
|
|
Diluted Earnings per common share |
$ 0.15 |
$ 0.13 |
$ 0.09 |
$ 0.40 |
$ 0.30 |
Effect of U.S. Treasury preferred stock
refund |
(0.01) |
-- |
-- |
(0.01) |
-- |
Effect of accelerated portion of discount
accretion |
-- |
-- |
0.04 |
-- |
0.04 |
Diluted Earnings per common share
excluding U.S. Treasury preferred stock refund and accelerated
discount accretion |
$ 0.14 |
$ 0.13 |
$ 0.13 |
$ 0.39 |
$ 0.34 |
|
|
|
|
|
|
Book value per common share |
$ 9.89 |
$ 9.73 |
$ 9.39 |
$ 9.89 |
$ 9.39 |
Effect of intangible assets |
(2.31) |
(2.32) |
(2.35) |
(2.31) |
(2.35) |
Tangible book value per common
share |
$ 7.58 |
$ 7.41 |
$ 7.04 |
$ 7.58 |
$ 7.04 |
|
|
|
|
|
|
Return on average assets |
0.71% |
0.69% |
0.65% |
0.69% |
0.62% |
Effect of intangible assets |
0.02% |
0.01% |
0.02% |
0.02% |
0.02% |
Return on average tangible
assets |
0.73% |
0.70% |
0.67% |
0.71% |
0.64% |
|
|
|
|
|
|
Return on average equity |
5.47% |
5.33% |
5.23% |
5.35% |
5.03% |
Effect of average intangible assets |
1.40% |
1.39% |
1.49% |
1.40% |
1.47% |
Return on average tangible
equity |
6.87% |
6.72% |
6.72% |
6.75% |
6.50% |
|
|
|
|
|
|
CONTACT: William D. Moss, President & CEO
Community Partners Bancorp
732-389-8722 wmoss@tworiverbank.com
A. Richard Abrahamian, Executive Vice President & CFO
Community Partners Bancorp
732-216-0167 rabrahamian@tworiverbank.com
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