FORT LEE, N.J., Aug. 07, 2019 (GLOBE NEWSWIRE) -- Bancorp of New Jersey, Inc. (NYSE American:  BKJ) (the “Company”), holding company for Bank of New Jersey (the “Bank”), today reported financial results for its second quarter and six months ended June 30, 2019. Net income for the second quarter of 2019 was $1.34 million, or $0.18 per diluted share, compared to net income of $1.19 million, or $0.16 per diluted share, for the second quarter of 2018. For the year to date period, net income increased by $372,000, or 14.7% over the prior year, to $2.91 million, or $0.40 per diluted share, compared to earnings of $2.53 million, or $0.35 per diluted share, for the first six months of 2018.

Total loans were $782.3 million at June 30, 2019, up $16.4 million from the December 31, 2018 balance of $765.9 million. Total deposits were $762.0 million at June 30, 2019, up $25.3 million from the December 31, 2018 balance of $736.7 million. Net interest margin was 2.92% at the end of the second quarter compared to 2.96% at the end of the first quarter of 2019.

Nancy E. Graves, Bancorp of New Jersey’s President and Chief Executive Officer, stated, “Our year to date results reflect our continued focus on organic growth. Commercial loan activity remains solid. Core deposits grew $44.7 million, primarily in CDs, with less reliance on lower cost municipal deposits, which declined $19.4 million since year-end 2018.  Cost of total deposits increased this quarter to 1.49% from 1.42% the previous quarter. Consistent with last quarter, deposit pressure remained a challenge in Bergen County, which was reflected in the increase in interest expense as we obtain and retain deposits.”

The following tables show information regarding the growth in our loan and deposit portfolios (in thousands):


At the Period Ended
 June 30, 2019 December 31, 2018
Loan Composition   
Commercial Real Estate$657,842  $640,627 
Residential Mortgages 55,210   58,281 
Commercial and Industrial 25,912   24,852 
Home Equity 43,084   41,833 
Consumer 296   326 
Total Loans 782,344   765,919 
Deferred Loan Fees and Costs, net (850)  (937)
Allowance for Loan Losses (8,530)  (8,393)
Net Loans$772,964  $756,589 
    
Deposit Composition   
Noninterest-Bearing Demand Deposits$113,279  $118,489 
Savings and Interest-Bearing Transaction Accounts 278,743   298,108 
Time Deposits $250 and under 249,215   213,855 
Time Deposits over $250 120,764   106,250 
Total Deposits$762,001  $736,702 
        

Three and Six Months Ended June 30, 2019 Financial Review

Net Interest Income
For the three months ended June 30, 2019, net interest income decreased by $88,000 or 1.4% versus the same period last year. For the six months ended June 30, 2019, net interest income decreased by $397,000 or 3.0% versus the same period last year. 

Total interest income increased by $1.0 million or 11.7% for the three months ended June 30, 2019 as compared to the corresponding period last year. During the six months ended June 30, 2019, interest income increased by $1.7 million or 9.8% versus the same period last year. This increase in interest income was primarily due to loan growth.

Total interest expense increased by $1.1 million in the second quarter of 2019 to $3.3 million compared to $2.2 million in the prior year period. During the six months ended June 30, 2019, interest expense increased by $2.1 million versus the same period last year. The increase in interest expense was due to an increase in deposit balances and higher interest rates on deposits and borrowed funds as obtaining and retaining deposits remain extremely competitive.

Provision for Loan Losses
The Company recognized a provision for loan losses of $140,000 for both the three and six months ended June 30, 2019 compared to a provision for loan losses of $325,000 and $650,000 for the three and six months ended June 30, 2018, respectively. The allowance for loan losses to total loans was 1.09% as of June 30, 2019.

Non-Interest Expense
Non-interest expense was $4.7 million during the second quarter of 2019 and 2018, while non-interest expense was $9.2 million for the six months ended June 30, 2019 compared to $9.4 million for the same period in 2018, a decrease of $171,000 or 1.8%. The decrease is a result of the Company’s continued focus on efficiencies.

Income Tax Expense
The income tax accrual for the three months ended June 30, 2019 was $329,000 compared to $361,000 for the same period in 2018. The income tax accrual for the six months ended June 30, 2019 was $760,000 compared to $796,000 for the same period in 2018. As the New Jersey Division of Taxation is still reviewing certain provisions of the recent changes in New Jersey tax laws, the Company is accruing for its 2019 New Jersey income tax expense at a rate similar to that applicable in 2018, until such time as the New Jersey Division of Taxation comes to a conclusion on these provisions.

Net Income
Net income for the second quarter of 2019 was $1.34 million compared to net income of $1.19 million for the second quarter of 2018, an increase of $155,000 or 13.0%.  Net income for the six months ended June 30, 2019 was $2.91 million compared to net income of $2.53 million for the same period in 2018, an increase of $372,000 or 14.7%.

Financial Condition
Total assets increased by $41.0 million, or 4.6%, from $883.7 million at December 31, 2018 to $924.7 million at June 30, 2019, reflecting an increase in cash and cash equivalents, loans receivable and other assets related to the recording of a right of use asset due to the adoption of Accounting Standards Update 2016-02 – Leases, as of January 1, 2019.

Total cash and cash equivalents increased from $64.5 million at December 31, 2018 to $86.2 million at June 30, 2019, an increase of $21.7 million. The change in cash is mainly due to an increase in deposit account balances and the maturity of certain securities.

Along with new deposits to the Bank, the Company has been experiencing customers transferring funds from noninterest bearing and lower interest-bearing accounts to higher interest-bearing accounts. The Bank has sought to increase its core deposits while reducing its reliance on potentially volatile municipal deposits and their effects of seasonal fluctuations related to real estate tax inflows and payments.

Borrowed funds decreased slightly to $51.2 million as of June 30, 2019 from $51.7 million at December 31, 2018.

At June 30, 2019, the Bank maintained capital ratios that were in excess of regulatory standards for well capitalized institutions. The Company’s and Bank’s Tier 1 capital to average assets ratio was 10.42%, each of their common equity Tier 1 capital and Tier 1 capital to risk weighted assets were 11.43% and their total capital to risk weighted assets ratio was 12.48%.

Loan Quality
At June 30, 2019 the Bank had non-accrual loans of $9.5 million. Included in this total are $3.9 million in Troubled Debt Restructured Loans (“TDRs”). At year-end 2018, non-accrual loans totaled $9.4 million, of which $4.5 million were TDRs. Accruing loans delinquent greater than 30 days were $6.5 million as of June 30, 2019, compared to $5.3 million at December 31, 2018. Of the $6.5 million in delinquent loans at June 30, 2019, two loans totaling $1.4 million reached maturity and were in the process of extension or renewal.

About the Company
Founded in 2006, Bancorp of New Jersey, Inc. is the holding company for Bank of New Jersey, which provides traditional commercial and consumer banking products and services. The Bank’s corporate office is in Englewood Cliffs and the Bank currently operates out of 9 branch offices located in Fort Lee, Hackensack, Haworth, Englewood Cliffs, Englewood, Cliffside Park, and Woodcliff Lake. For more information about Bank of New Jersey and its products and services, please visit http://www.bonj.net or call 201-720-3201. If you would like to receive future Bancorp of New Jersey announcements electronically, please email us at shareholder@bonj.net.

Forward-Looking Statements This press release and other statements made from time to time by Bancorp of New Jersey’s management contain express and implied statements relating to our future financial condition, results of operations, credit quality, corporate objectives, 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 are included in our Annual Report on Form 10-K under Item 1a – Risk Factors and in the description of our business under Item 1. 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 of future events, except as may be required by applicable law or regulation.

 Investor Relations Counsel:
The Equity Group Inc.
Fred Buonocore, CFA   212-836-9607

BANCORP OF NEW JERSEY, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except for per share data)

       
  For the Three Months Ended June 30, 
  2019 2018
INTEREST INCOME      
Loans, including fees $9,089 $8,179
Securities  179  233
Federal funds sold and other  419  261
TOTAL INTEREST INCOME  9,687  8,673
       
INTEREST EXPENSE      
Savings and interest bearing transaction accounts  918  464
Time deposits  2,031  1,609
Borrowed funds  350  123
TOTAL INTEREST EXPENSE  3,299  2,196
       
NET INTEREST INCOME BEFORE PROVISION FOR LOAN LOSSES  6,388  6,477
Provision for loan losses  140  325
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES  6,248  6,152
NON-INTEREST INCOME      
Fees and service charges  143  110
TOTAL NON-INTEREST INCOME  143  110
       
NON-INTEREST EXPENSE      
Salaries and employee benefits  2,416  2,372
Occupancy and equipment expense  909  828
FDIC premiums and related expenses  105  148
Legal fees  275  219
Other real estate owned expenses  22  2
Professional fees  203  245
Data processing  281  205
Other expenses  507  692
TOTAL NON-INTEREST EXPENSE  4,718  4,711
Income before provision for income taxes  1,673  1,551
Income tax expense  329  361
Net income $1,344 $1,190
       
PER SHARE OF COMMON STOCK      
Basic $0.18 $0.16
Diluted $0.18 $0.16
       

BANCORP OF NEW JERSEY, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except for per share data)

        
  For the Six Months Ended June 30,  
  2019 2018 
INTEREST INCOME       
Loans, including fees $ 17,845 $ 16,327 
Securities   386   469 
Federal funds sold and other   832   568 
TOTAL INTEREST INCOME   19,063   17,364 
        
INTEREST EXPENSE       
Savings and interest bearing transaction accounts   1,798   881 
Time deposits   3,774   3,123 
Borrowed funds   700   172 
TOTAL INTEREST EXPENSE   6,272   4,176 
        
NET INTEREST INCOME BEFORE PROVISION FOR LOAN LOSSES   12,791   13,188 
Provision for loan losses  140  650 
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES   12,651   12,538 
NON-INTEREST INCOME       
Fees and service charges  257  205 
TOTAL NON-INTEREST INCOME   257   205 
        
NON-INTEREST EXPENSE       
Salaries and employee benefits  4,870  4,787 
Occupancy and equipment expense  1,818  1,695 
FDIC premiums and related expenses   233   306 
Legal fees   350   357 
Other real estate owned expenses   25   9 
Professional fees   437   493 
Data processing   568   538 
Other expenses   942   1,229 
TOTAL NON-INTEREST EXPENSE   9,243   9,414 
Income before provision for income taxes   3,665   3,329 
Income tax expense   760   796 
Net income $2,905 $2,533 
        
PER SHARE OF COMMON STOCK       
Basic $0.40 $0.35 
Diluted $0.40 $0.35 
        

BANCORP OF NEW JERSEY, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(in thousands, except for per share data)

       
  June 30, 2019 December 31, 2018
Assets      
Cash and due from banks $2,636  $3,541 
Interest bearing deposits  80,273   59,024 
Federal funds sold  3,315   1,977 
Total cash and cash equivalents  86,224   64,542 
Interest bearing time deposits  500   500 
Securities available for sale  27,572   32,293 
Securities held to maturity (fair value $0 and $5,852 at June 30, 2019 and December 31, 2018, respectively)  -   5,852 
Restricted investment in bank stock, at cost  3,155   3,239 
Loans receivable  782,344   765,919 
Deferred loan fees and costs, net  (850)  (937)
Allowance for loan losses  (8,530)  (8,393)
Net loans  772,964   756,589 
Premises and equipment, net  13,173   13,440 
Accrued interest receivable  2,921   2,841 
Other real estate owned  1,363   511 
Right of use asset  13,067   - 
Other assets  3,779   3,929 
Total assets $924,718  $883,736 
Liabilities and Stockholders’ Equity      
LIABILITIES:      
Deposits:      
Noninterest-bearing demand deposits $113,279  $118,489 
Savings and interest bearing transaction accounts  278,743   298,108 
Time deposits $250 and under  249,215   213,855 
Time deposits over $250  120,764   106,250 
Total deposits  762,001   736,702 
Borrowed funds  51,169   51,658 
Lease liability  13,490   - 
Accrued expenses and other liabilities  5,539   6,269 
Total liabilities  832,199   794,629 
Stockholders’ equity:      
Common stock, no par value, authorized 20,000,000 shares; issued and outstanding 7,293,697 at June 30, 2019 and 7,295,466 at December 31, 2018  76,848   76,713 
Retained earnings  15,719   12,814 
Accumulated other comprehensive loss  (48)  (420)
Total stockholders’ equity  92,519   89,107 
Total liabilities and stockholders’ equity $924,718  $883,736