Community Bank of Bergen County, NJ Reports Third Quarter 2012 Net Income of $0.05 Per Share

MAYWOOD, N.J.--(BUSINESS WIRE)--Community Bank of Bergen County, NJ (OTCBB: CMTB) reported earnings today for the third quarter of 2012. Net income this quarter was $91,000, or $0.05 per diluted share, which is down $245,000 as compared to a net income of $336,000, or $0.20 per diluted share, for the third quarter of 2011.

The decrease in net income this quarter, as compared to the same quarter last year, was due largely to a $676,000 increase in the loan loss provision from that of 2011 ($901,000 for the quarter ended September 30, 2012 as compared to $225,000 for the quarter ended September 30, 2011), offset by a 204,000 decrease in non-interest expenses in all categories, a $185,000 increase in our tax benefits, and a $65,000 increase in total non-interest income. Net interest income only decreased slightly, as a $201,000 reduction in interest income – a result of lower outstanding loan balances in comparison to the third quarter of 2011($215,163,000 versus $219,352,000 respectively) and continued lower overall market interest rates, was offset by the corresponding savings of $178,000 in interest paid on the reduced outstanding interest bearing deposits as compared to 2011 ($274,493,000 versus $285,395,000 in total deposits). The reduced interest expense was also caused by reduced rates paid on those deposits. The increase in total non-interest income in the third quarter of this year resulted from $41,000 in rents generated from Other Real Estate Owned (OREO) properties as compared to $18,000 for the same period in 2011 and $53,000 generated from the Bank’s investment in Bank Owned Life Insurance (BOLI) as compared to $19,000 for the third quarter 2011. The $204,000 cost savings for non-interest expenses in all categories, as compared to the same period in 2011, represent continued efforts by the Bank to increase efficiency in staff and overhead utilization.

For the nine months ended September 30, 2012, the Bank reported net income of $431,000, down $607,000 from its net income of $943,000 for the nine months ended September 30, 2011. The decrease in net income for the nine months ended September 30, 2012 is largely attributed to (i) a $767,000 decrease in interest income due to lower outstanding loan balances at reduced market yields, as referenced above, and (ii) an increased provision for loan losses, up $926,000 as compared to the nine months ended September 30, 2011. These amounts were offset by (i) savings in interest expense of $485,000 due to lower outstanding interest paying deposit balances at lower interest cost, (ii) income generated from the BOLI investment of $111,000 for the nine months of 2012 as compared to $19,000 for the same period in 2011, (iii) income generated from rents on OREO properties ($110,000 for the nine months ending September 2012 as compared to $32,000 for the nine months ending September 2011), (iv) a $292,000 increase in our tax benefit and (v) a $254,000 decrease in non-interest expense during the period, as compared to the same period for 2011. The decrease in non-interest expense was mainly the result of a $131,000 reduction in salary and benefit expense mainly a result of savings in salaries due to reduced staffing and recoupment of over-accruals of expenses related to the Bank’s medical retirement plan, $158,000 lower expenses related to occupancy costs, a result of the re-negotiated lease of one of the Bank’s branches, lower depreciation expense on Bank buildings sold in prior years and lower over-all maintenance costs on the remaining properties, and $37,000 lower expenses in other non-interest expenses category, offset by increased costs of $72,000 specifically related to OREO properties for the nine months of 2012 as compared to the same period last year.

Total Assets were reduced from $309,871,000 at December 31, 2011, to $302,573,000 at September 30, 2012, particularly due to the low volume of new loans through September 30, 2012 and the corresponding reduction of interest paying deposits.

The Bank continues to proceed in working out of its non-accruing asset portfolio ($10,587,000 at September 30, 2012 as compared to $12,614,000 at December 31, 2011). The Bank’s capital closed at $25,959,000 at September 30, 2012, with book value per share at $15.63 in comparison to $15.51 at December 31, 2011.

About Community Bank of Bergen County

Established in 1928, Community Bank of Bergen County, NJ (CBBC) serves the northern New Jersey community with four locations in Rochelle Park, Maywood, Fair Lawn and Garfield. Dedicated to superior service, the bank offers a range of customized personal and business banking products and the convenience of 24-hour ATMs and online banking.

With lending decisions made locally, and a responsive management team, Community Bank of Bergen County is committed to providing an exceptional banking experience.

For more information visit the Bank’s web site at www.cbbcnj.com.

COMMUNITY BANK OF BERGEN COUNTY, NJ AND SUBSIDIARY CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION AS OF:
Assets	September 30, 2012 (Unaudited) Dollars in Thousands		December 31, 2011 (Unaudited) Dollars in Thousands
Cash and balances due from depository institutions:
Non-interest-bearing balances and currency and coin	$	3,661	$	4,972
Interest-bearing balances		10,503		7,488
Securities
Held-to-maturity securities		32,804		36,381
Available-for-sale securities		17,055		21,139
Loans and lease financing receivables:
Loans and leases, net of unearned income	$	215,163	$	219,872
LESS: Allowance for loan and lease losses		3,360		2,941
Loans and leases, net of allowance		211,803		216,931
Premises and fixed assets (including capitalized leases)		6,677		6,772
Other Real Estate Owned		7,117		6,373
Other assets		12,953		9,815
Total Assets	$	302,573	$	309,871
Liabilities
Deposits:
Interest-bearing	$	226,020	$	235,904
Non-interest-bearing		48,473		45,806
Total deposits	$	274,493	$	281,710
Other liabilities		2,121		2,367
Total Liabilities		276,614		284,077
Equity Capital
Common Stock $5 par value; 1,800,000 shares authorized; 1,728,000
shares issued; 1,660,474 and 1,662,874 shares outstanding, respectively		8,640		8,640
Surplus		3,968		3,968
Treasury Stock		(1,531)		(1,510)
Stock Options		175		154
Retained earnings		14,609		14,410
Accumulated other comprehensive income		98		132
Total Equity Capital		25,959		25,794
Total Liabilities and Equity Capital	$	302,573	$	309,871
Capital Ratios:
Tier 1 leverage ratio		8.48%		8.21%
Tier 1 risk-based capital ratio		11.95%		11.73%
Total risk-based capital ratio		13.21%		12.98%

COMMUNITY BANK OF BERGEN COUNTY, NJ AND SUBSIDIARY CONSOLIDATED STATEMENTS OF INCOME
	Quarter Ended September 30,					Nine Months Ended September 30,
	2012			2011		2012		2011
	(Unaudited)					(Unaudited)
Income Statement		Dollars in Thousands				Dollars in Thousands
Interest and fee income:
Interest and fee income on loans		$	3,161	$	3,289	$	9,469	$	10,073
Interest income on balances due from depository institution		3		9			12		28
Interest and dividend income on securities			209		277		726		872
Interest on federal funds sold		0		0		0		1
Other interest income			11		10		32		32
Total Interest and fee income			3,384		3,585		10,239		11,006
Interest Expense:
Interest on deposits			708		886		2,234		2,719
Total Interest expense			708		886		2,234		2,719
Net Interest Income			2,676		2,699		8,005		8,287
Provision for Loan Losses			901		225		1,951		1,025
Non-Interest Income:
Service charges on deposit accounts			122		104		335		305
Net servicing fees			56		62		167		197
Net gains (losses) on sale of OREO		0		0		0			39
Other non-interest income			96		43		224		54
Total non-interest income			274		209		726		595
Realized gains (losses) on securities		0		0			19	0
Non-interest expenses
Salaries and employee benefits			1,007		1,106		3,225		3,356
Expenses on premises and fixed assets			271		325		850		1,008
Other non-interest expenses			759		810		2,439		2,404
Total non-interest expenses			2,037		2,241		6,514		6,768
Income before Income taxes:			12		442		285		1,089
Income taxes (benefit)			(79)		106		(146)		146
Net Income		$	91	$	336	$	431	$	943
Earnings per Share		$	0.05	$	0.20	$	0.26	$	0.57

Forward-Looking Statements

This press release and other statements made from time to time by Community Bank of Bergen County's management contain express and implied statements relating to our future financial condition, results of operations, credit quality, corporate objectives, capital, liquidity 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 include the current economy of the country in general and how it is affecting the financial industry specifically; volatility in interest rates and the shape of the yield curve; increased credit risks and risks associated with the real estate market; the potential for increased non-performing loans; operating, legal, and regulatory risk; economic, political, and competitive forces affecting the company's lines of business; the extent and timing of actions of the Federal Reserve Board and the New Jersey Department of Banking and Insurance ; customer acceptance of our products and services; and other risks and uncertainties. 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 or the occurrence of future events, except as may be required by applicable law or regulation.