American Bancorp N J (MM) (NASDAQ:ABNJ)
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American Bancorp of New Jersey, Inc. (NASDAQ: ABNJ)
("American") announced today earnings of $663,000 for the quarter
ended December 31, 2005 as compared to $610,000 for the quarter ended
December 31, 2004. Basic and diluted earnings per share for the
quarter ended December 31, 2005 were $0.05 and $0.05, respectively. By
comparison, both basic and diluted earnings per share for the quarter
ended December 31, 2004 were $0.04 after adjusting for the exchange of
shares relating to the Company's recent second-step conversion.
On October 5, 2005, American Savings, MHC closed its second step
conversion. Through this transaction, the Company replaced ASB Holding
Company as the holding company of American Bank of New Jersey, a
federally chartered stock savings bank which conducts business from
its main office in Bloomfield, New Jersey and one branch office in
Cedar Grove, New Jersey. Upon closing the conversion, each share of
ASB Holding Company stock was exchanged for 2.55102 shares of American
Bancorp of New Jersey, Inc. The earnings for the quarter ended
December 31, 2004 reported by American are those of ASB Holding
Company.
The Company's net interest spread declined to 1.87% for the
current quarter in comparison to 2.32% for the same comparative period
in 2004 as increases in the Company's cost of interest bearing
liabilities continued to outpace the increase in the Company's yield
on earning assets. This decline was attributable, in part, to the
Company maintaining a high average balance of short term, liquid
assets during the quarter. These balances resulted from the initial
receipt of capital proceeds from the Company's second step conversion
which were deployed into higher yielding investment securities
throughout the quarter. Additionally, continued upward pressure on the
cost of retail deposits resulted in increases in interest expense
which outpaced the increase in interest income resulting from improved
yields on loans. The cost of interest bearing deposits increased 69
basis points from 1.98% for the quarter ended December 31, 2004 to
2.67% for the quarter ended December 31, 2005. For the same
comparative periods, yield on loans increased 8 basis points from
5.29% to 5.37%.
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 more than offset by the
impact of the additional capital raised in the Company's second-step
conversion. As a result, the Company's net interest margin increased 8
basis points from 2.63% for the quarter ended December 31, 2004 to
2.71% for the quarter ended December 31, 2005.
For the quarter ended December 31, 2005, loans receivable, net
increased $13.2 million or 3.9% to $354.2 million from $341.0 million
at September 30, 2005. The growth was comprised of net increases in
multi-family, commercial real estate and construction loans totaling
$5.5 million coupled with net increases in commercial and business
loans totaling $1.1 million. Together, net growth in these loan
balances totaled $6.6 million comprising approximately half of the
Company's net increase in loans receivable for the quarter. The
remaining net growth in loans included increases in one-to-four family
mortgages, including equity loans and home equity lines of credit,
totaling $6.7 million.
Deposits decreased by $13.9 million or 4.1% to $327.0 million at
December 31, 2005 from $340.9 million at September 30, 2005. This
decrease was primarily attributable to $9.8 million of deposit
balances withdrawn to purchase shares in the Company's stock offering.
The remaining $4.1 million of net deposit withdrawals were primarily
attributable to aggressive deposit competition in the markets served
by the Company.
Overall balance sheet growth and improvements in net interest
margin contributed significantly to a $655,000 or 24.0% improvement in
net interest income from $2.7 million for the quarter ended December
31, 2004 to $3.4 million for the quarter ended December 31, 2005.
However, improvements in net interest income were partially offset by
comparatively lower noninterest income and higher noninterest expense.
Noninterest income declined $221,000 from $247,000 for the quarter
ended December 31, 2004 to $26,000 for the quarter ended December 31,
2005. This reduction was primarily attributable to a $271,000 loss on
sale of an underperforming investment security during the most recent
quarter. Excluding that loss, comparative quarterly noninterest income
increased by $50,000 due largely to increases in loan related fee
income and improvement in income from cash surrender value of life
insurance.
Noninterest expense increased $288,000 from $2.0 million for the
quarter ended December 31, 2004 to $2.2 million for the quarter ended
December 31, 2005. The comparative increase in noninterest expense was
diminished by the reversal of previously accrued profit sharing
expenses totaling $131,000 in the quarter ended December 31, 2005.
Excluding this item, comparative quarterly noninterest expense
increased $419,000. This increase was attributable, in part, to
executive and lending staffing additions coupled with overall annual
increases in employee compensation and benefits. Additionally, the
Company recorded restricted stock plan and stock options benefit plan
expenses for the quarter ended December 31, 2005 of $148,000. Such
expenses were not recorded for the quarter ended December 31, 2004
which preceded each plan's approval by shareholders on January 20,
2005. Professional and consulting fees also increased $52,000 to
$119,000 for the quarter ended December 31, 2005 from $67,000 for the
same quarter in 2004. In large part, these increases were attributable
to consulting costs incurred by the Company relating to compliance
with the Sarbanes Oxley Act of 2002 and the outsourcing of other
internal audit-related services.
The foregoing material contains forward-looking statements
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.