American Bancorp of New Jersey, Inc. (NASDAQ: ABNJ) (�American�
or the �Company�), the holding company for American Bank of New
Jersey (the �Bank�), announced today that it had net income of
$555,000 for the quarter ended December 31, 2008. By comparison,
net income for the quarter ended December 31, 2007 was $93,000.
Basic and diluted earnings per share for the quarter ended December
31, 2008 were $0.06 and $0.06, respectively. By comparison, for the
quarter ended December 31, 2007, basic and diluted earnings per
share were $0.01 and $0.01, respectively.
On December 15, 2008, the Company announced the signing of a
definitive agreement under which Investors Bancorp, Inc. (NASDAQ:
ISBC) will acquire American Bancorp of New Jersey. Subject to
customary closing conditions including regulatory approvals and
approval by American Bancorp of New Jersey�s shareholders, the
transaction is anticipated to close during the third fiscal quarter
ending June 30, 2009.
For the quarter ended December 31, 2008, loans receivable, net
increased $12.8 million or 2.7% to $491.4 million from $478.6
million at September 30, 2008. The growth was comprised of net
increases in commercial loans, including multi-family, commercial
real estate, construction and business loans, totaling $3.2
million. The increase in loans receivable, net also included an
increase in the balance of 1-4 family first mortgage loans of $7.9
million, net increases in home equity loans and home equity lines
of credit totaling $1.2 million and net increases in consumer loans
of $522,000. Offsetting the growth in these categories was a net
increase to the allowance for loan losses totaling $62,000.
For that same period, the balance of the Company�s investment
securities decreased by $2.2 million as the Company continued its
reinvestment of a significant portion of the funds received from
investment maturities and repayments into the loan portfolio. The
Company�s balance of cash and cash equivalents decreased by $2.4
million which also provided a portion of the funding for the
Company�s net loan growth.
The balance of deposits increased $11.5 million for the quarter
ended December 31, 2008. This net growth reflected increases in
certificates of deposit of $23.1 million offset by reductions in
the balance of interest-bearing checking, including money market
checking, savings, and noninterest-bearing checking accounts of
$7.3 million, $1.9 million and $2.4 million, respectively. For the
same period, borrowings decreased $6.0 million reflecting the
repayment of maturing FHLB term advances.
The Company�s yield on earning assets decreased 41 basis points
to 5.43% for the quarter ended December 31, 2008 from 5.84% for the
quarter ended December 31, 2007. This decrease primarily reflected
the impact of overall reductions in market interest rates on the
yields of repricing assets including, but not limited to, cash and
cash equivalents and adjustable rate loans, as well as the overall
reinvestment of incoming cash flows from loan and investment
security maturities and repayments at comparatively lower
yields.
The decrease in the yield on earning assets between the
comparative quarters was outpaced by a reduction in the Company�s
interest costs for those same periods. The Company�s cost of
interest-bearing liabilities decreased 105 basis points to 3.28%
for the quarter ended December 31, 2008 from 4.33% for the quarter
ended December 31, 2007. The decrease in the cost of
interest-bearing deposits was primarily attributable to two related
factors. First, the Company has reduced the interest rates paid on
deposits generated through the three full service branches opened
during fiscal 2007 on which promotional interest rates had
continued to be paid during a portion of fiscal 2008. Deposits
acquired through those de novo branches no longer reflect the
effects of promotional pricing. Second, reductions in market
interest rates enabled the Company to reduce rates paid on many
interest-bearing deposit types across all branches. In total, the
Company�s net interest spread widened 65 basis points to 2.15% from
1.50% for those same comparative periods.
The factors resulting in the widening of the Company�s net
interest spread also positively impacted the Company�s net interest
margin for the year ended September 30, 2008. However, the impact
of the Company�s share repurchase plans on net interest margin
partially offset the benefits of the widening net interest spread.
For the comparative quarters ended December 31, 2008 and 2007, the
average balance of treasury stock increased $9.9 million reflecting
the Company�s share repurchase activity. The foregone interest
income on the earning assets used to fund those share repurchases
significantly impacted the Company�s net interest margin. As a
result of these offsetting factors, the Company reported an
$870,000 increase in net interest income to $4.0 million for the
quarter ended December 31, 2008 from $3.1 million for the quarter
ended December 31, 2007 reflecting a 37 basis point increase in net
interest margin to 2.68% from 2.31% for those same comparative
periods.
The increase in net interest income was partially offset by a
comparatively greater provision to the allowance for loan losses.
For those same comparative periods, the Company�s loan loss
provision increased $14,000 to $153,000 from $139,000. The expense
for the first quarter of fiscal 2009 included a provision of
$92,000 attributable to one impaired construction loan, that
portion of which was deemed uncollectible by management during its
asset quality review conducted at December 31, 2008 and therefore
charged off. The remaining balance of the impaired loan, net of
charge offs, was approximately $54,000. Excluding the additional
provision attributable to this charge off, the provision for loan
losses for both comparative periods primarily resulted from the
application of historical and environmental loss factors against
the net growth in loans in accordance with the Bank�s loan loss
methodology.
For the quarter ended December 31, 2008, noninterest income
increased $45,000 to $440,000 from $395,000 for the quarter ended
December 31, 2007. The growth in noninterest income was largely
attributable to an increase of $16,000 in income from the cash
surrender value of life insurance attributable to a combination of
higher average balances and improved yields on those assets.
Additionally, the Company reported an increase of $34,000 in other
noninterest income attributable, in part, to growth in loan-related
fees and charges including, but not limited to, increases in
prepayment penalties and loan withdrawal fees. Additionally, the
Company recognized an additional $17,000 in other noninterest
income attributable to a partial recovery of losses incurred
several years earlier relating to assets held by the Bank�s
retirement plan.
For those same comparative quarters, noninterest expense
increased $137,000 to $3.4 million from $3.3 million. This growth
in noninterest expense was primarily attributable to comparative
increases in occupancy and equipment, data processing, legal, and
other non interest expenses of $37,000, $34,000, $112,000 and
$117,000, respectively. These increases in noninterest expense were
partially offset by comparative reductions in compensation expenses
and advertising and marketing expenses of $120,000 and $48,000,
respectively.
The reported increase in occupancy and equipment expense was
largely attributable to additional depreciation costs arising from
the Bank�s Bloomfield branch which was relocated from the
administrative headquarters to a new facility in April 2008. Such
increases also reflect a comparative increase in recurring and
non-recurring costs associated with the maintenance, testing and
repair of the Bank�s internal IT infrastructure. Increases in data
processing expense generally reflect the additional core processing
and item processing costs resulting from the growth in accounts and
transaction volume coupled with the added data processing
infrastructure costs associated with the relocated Bloomfield
branch.
The increase in legal expense was largely attributable to costs
incurred associated with the Company�s pending merger with
Investors Bancorp announced on December 15, 2008. Through December
31, 2008, the Company has incurred approximately $135,000 in legal
expense associated with the merger. Excluding these merger-related
expenses, legal expense for the three months ended December 31,
2008 totaled $28,000 reflecting a reduction of $23,000 from the
same comparative period in fiscal 2008.
The reported increase in other noninterest expense resulted
primarily from increases in FDIC insurance expense. This increase
was attributable, in part, to overall growth in the balance of
FDIC-insured deposits. However, the increase also reflects the
expiration of FDIC insurance credits which had previously reduced
the Bank�s net cost of FDIC deposit insurance throughout a portion
of fiscal 2008.
Partially offsetting these increases in noninterest expense was
a comparative net reduction in employee and director compensation
expense which comprised several offsetting components. The most
significant of these was a reduction of $115,000 in employee wages
and salaries, including overtime compensation, which generally
reflects the expense reductions resulting from adjustments to
employee staffing levels.
Finally, the reported decrease in advertising and marketing
expense reflects the higher level of such expenditures during the
earlier comparative period attributable to the continued promotion
of the Bank�s Nutley and Clifton branches which opened in May 2007
and August 2007, respectively.
The following tables present selected balance sheet data as of
December 31, 2008 and September 30, 2008 and selected operating
data for the three months ended December 31, 2008 and December 31,
2007.
FINANCIAL HIGHLIGHTS
(unaudited)
� �
At December 31, At September 30,
2008
2008
�
Balance
�
% Total
Assets
Balance
�
% Total
Assets
SELECTED FINANCIAL DATA (in thousands): Assets Cash
and cash equivalents $ 17,933 2.85 % $ 20,375 3.28 % Securities
available-for-sale 79,316 12.61 81,163 13.06 Securities
held-to-maturity 7,178 1.14 7,509 1.21 Loans held for sale - - - -
Loans receivable, net 491,405 78.16 478,574 76.99 Premises and
equipment 11,763 1.87 11,894 1.91 Federal Home Loan Bank stock
2,473 0.39 2,743 0.44 Cash surrender value of life insurance 13,910
2.21 13,761 2.21 Accrued interest receivable 2,384 0.38 2,391 0.38
Other assets �
2,465 �
0.39 � �
3,223 �
0.52 � Total assets
$ 628,827 �
100.00 %
$ 621,633 �
100.00 %
Liabilities and equity Deposits $ 459,218 73.02 % $ 447,687
72.02 % Advances for taxes and insurance 2,657 0.42 2,811 0.45
Borrowings 69,530 11.06 75,547 12.15 Other liabilities 5,001 0.80
4,740 0.77 Equity �
92,421 �
14.70 � �
90,848 �
14.61 � Total liabilities and
equity
$ 628,827 �
100.00 %
$ 621,633 �
100.00 % �
Loan Data
Balance
% Total
Loans
Balance
% Total
Loans
1-4 family mortgage loans $ 271,692 55.30 % $ 263,744 55.11 % Home
equity loans 13,372 2.72 14,053 2.94 Home equity lines of credit
22,754 4.63 20,887 4.36 Multifamily mortgage loans 38,146 7.76
36,855 7.70 Nonresidential mortgage loans 94,617 19.25 90,644 18.94
Land and property acquisition loans 4,195 0.85 6,665 1.39
Construction loans 39,613 8.06 40,051 8.37 Business loans 8,432
1.72 7,551 1.58 Consumer loans 1,681 0.34 1,159 0.24 Allowance for
loans losses �
(3,097 )
(0.63 ) �
(3,035
) (0.63 ) Loans receivable,
net
$ 491,405 �
100.00 %
$ 478,574 �
100.00 % �
Deposit Data
Balance
%Total
Deposits
Balance
%Total Deposits
Noninterest-bearing deposits 29,077 6.33 % 31,447 7.02 %
Interest-bearing checking 68,010 14.81 75,307 16.82 Savings 83,192
18.12 85,092 19.01 Certificates of deposit �
278,939 �
60.74 � �
255,841 �
57.15 �
Deposits
$ 459,218 �
100.00
%
$ 447,687 �
100.00 %
FINANCIAL HIGHLIGHTS (continued)
(unaudited)
�
At December 31, �
At September 30,
2008
2008
Capital Ratios Equity to total assets (%) 14.70 14.61
Outstanding shares (#) 10,859,692 10,859,692 �
Asset Quality Ratios:
Non-performing loans to total loans (%) 0.39 0.24 Non-performing
assets to total assets (%) 0.30 0.18 Allowance for loan losses to
non-performing loans (%)
163.03
266.97
Allowance for loan losses to total loans (%) 0.63 0.63 � �
For
the three months ended
December 31,
� �
2008
�
2007
SELECTED OPERATING DATA
(in thousands):
Total interest income $ 8,042 $ 7,834 Total interest expense �
4,070 � �
4,732 � Net interest income
3,972 3,102 Provision for loan losses �
153 � �
139 � Net interest income after provision for loan
losses
3,819
2,963 Noninterest income 440 395 Noninterest expense �
3,413 � �
3,276 � Income (loss) before
income taxes 846 82 Provision (benefit) for income taxes �
291 � �
(11 ) Net income
(loss)
$ 555 �
$
93 � �
Performance Ratios:
Return on average assets 0.36 % 0.07 % Return on average equity
2.47 0.38 Net interest rate spread 2.15 1.50 Net interest margin
2.68 2.31 Noninterest income to average total assets 0.28 0.28
Noninterest expense to average total assets 2.18 2.30 Efficiency
Ratio 77.35 93.68 �
PER SHARE DATA:
Earnings per share Basic 0.06 0.01 Diluted 0.06 0.01
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.
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