American Bancorp of New Jersey, Inc. Announces Second Quarter 2006 Earnings

American Bancorp of New Jersey, Inc. (NASDAQ: ABNJ)
("American") announced today earnings of $688,000 for the quarter
ended March 31, 2006. By comparison, net income for the quarters ended
December 31, 2005 and March 31, 2005 were $663,000 and $584,000,
respectively. Basic and diluted earnings per share for the quarter
ended March 31, 2006 were $0.05 and $0.05, respectively. By
comparison, for the quarter ended December 31, 2005 both basic and
diluted earnings per share were $0.05. For the quarter ended March 31,
2005, both basic and diluted earnings per share 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 March
31, 2005 reported by American are those of ASB Holding Company.
   The Company's net interest spread and margin for the quarter ended
March 31, 2006 improved from the prior quarter ended December 31,
2005. For those comparative periods, the Company's net interest spread
improved by 4 basis points from 1.87% to 1.91% while its net interest
margin improved 9 basis points from 2.71% to 2.80%. In large part,
this improvement in net interest spread and margin was attributable to
the Company's continued reinvestment of incoming cash flows from the
investment securities portfolio into higher yielding loans.
   For the quarter ended March 31, 2006, loans receivable, net
increased $17.8 million or 5.0% to $372.0 million from $354.2 million
at December 31, 2005. The growth was comprised of net increases in
multi-family, commercial real estate and construction loans totaling
$9.3 million, coupled with net increases in commercial and business
loans totaling $2.8 million. Together, net growth in these loan
balances totaled $12.1 million comprising approximately two-thirds of
the Company's net increase in loans receivable for the quarter. The
remaining net growth in loans included increases in 1-4 family
mortgages, including equity loans and home equity lines of credit,
totaling $5.9 million.
   For that same period, the balance of the Company's investment
securities decreased $8.4 million while its interest bearing cash
equivalents also decreased $10.6 million. The combined decrease in
these categories of approximately $19.0 million provided the funding
for the net growth in loans reported for the quarter ended March 31,
2006.
   Deposits increased by $2.2 million or 0.7% to $329.2 million at
March 31, 2006 from $327.0 million at December 31, 2005. This increase
was primarily attributable to net growth of approximately $2.0 million
of interest bearing savings and certificates of deposit. Offsetting
this growth in deposits was a decrease of $1.3 million in borrowings
due largely to the repayment of a maturing Federal Home Loan Bank
advance.
   Notwithstanding these comparisons of the past two consecutive
quarters, the Company's net interest spread of 1.91% for the current
quarter was still below its net interest spread of 2.41% for the same
comparative period in 2005 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 comparatively higher average
balance of investment securities and short term, liquid assets during
the quarter. These balances resulted from the receipt of capital
proceeds from the Company's second step conversion which were deployed
into such assets throughout the prior quarter ended December 31, 2005.
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 82 basis points from 2.02% for
the quarter ended March 31, 2005 to 2.84% for the quarter ended March
31, 2006. For the same comparative periods, yield on loans increased 2
basis points from 5.36% to 5.38%.
   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 have been 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 9
basis points from 2.71% for the quarter ended March 31, 2005 to 2.80%
for the quarter ended March 31, 2006.
   Overall balance sheet growth and improvements in net interest
margin contributed significantly to a $620,000 or 21.8% improvement in
net interest income from $2.8 million for the quarter ended March 31,
2005 to $3.5 million for the quarter ended March 31, 2006. This
improvement was offset, in part, by comparatively higher provisions
for loan losses. For those same comparative periods, the loan loss
provision increased $89,000 from $70,000 to $159,000 due primarily to
comparatively higher net growth in commercial loans.
   Noninterest income increased $82,000 from $290,000 for the quarter
ended March 31, 2005 to $372,000 for the quarter ended March 31, 2006.
This improvement was due largely to increases in deposit service fees
and charges coupled with comparatively higher loan prepayment fees.
   These comparative improvements in net interest and noninterest
income were partially offset by increases to noninterest expense.
Noninterest expense increased $410,000 from $2.2 million for the
quarter ended March 31, 2005 to $2.6 million for the quarter ended
March 31, 2006. This increase was primarily attributable to growth in
salary and employee benefits costs which increased $354,000 for those
same comparative periods. Such increases resulted from executive and
lending staffing additions coupled with overall annual increases in
employee compensation and benefits. Additionally, professional and
consulting fees increased $38,000 to $137,000 for the quarter ended
March 31, 2006 from $99,000 for the same quarter in 2005. In large
part, these increases were attributable to audit and 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 following table presents selected comparative financial data
for the periods ended March 31, 2006, December 31, 2005 and September
30, 2005 and selected comparative operating data for the quarters
ended March 31, 2006, December 31, 2005 and March 31, 2005:
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                         FINANCIAL HIGHLIGHTS
                             (unaudited)
                                                At
                                 March 31,  December 31, September 30,
                                   2006        2005          2005
                                 ---------- ------------ -------------
                                            (In thousands)

SELECTED FINANCIAL DATA:
Total Assets                    $  516,278 $    516,924 $     555,860
Cash and cash equivalents           18,905       30,017       125,773
Securities available-for-sale       92,873      100,752        62,337
Securities held-to-maturity         11,887       12,373         7,824
Loans receivable, net              371,979      354,207       341,006
Loans held for sale                    419            -           280
Federal Home Loan Bank stock         3,121        3,180         3,119
Deposits                           329,190      327,036       340,925
Total borrowings                    52,405       53,719        53,734
Total equity                       128,630      129,755        39,506


                                            3 months ended
                                 March 31,  December 31,   March 31,
                                   2006        2005          2005
                                 ---------- ------------ -------------
                                            (In thousands)
SELECTED OPERATING DATA:
Total interest income           $    6,239 $      6,091 $       5,089
Total interest expense               2,773        2,712         2,243
                                 ---------- ------------ -------------
   Net interest income               3,466        3,379         2,846
Provision for loan losses              159           86            70
                                 ---------- ------------ -------------
Net interest income after
 provision for loan losses           3,307        3,293         2,776
Non interest income                    372           26           290
Non interest expense                 2,564        2,245         2,154
                                 ---------- ------------ -------------
Income before income taxes           1,115        1,074           912
Income tax provision                   427          411           328
                                 ---------- ------------ -------------

   Net income                   $      688 $        663 $         584
                                 ========== ============ =============
   PER SHARE DATA:
   Earnings per share
      Basic                     $     0.05 $       0.05 $        0.04
      Diluted                   $     0.05 $       0.05 $        0.04

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   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.