Greater Community Bancorp (NASDAQ:GFLS)
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Greater Community Bancorp (the “Company”)
(Nasdaq: GFLS) announced net income for the first quarter of 2008 of
$1.3 million, decreasing $0.4 million from the $1.7 million reported for
the first quarter of 2007. Diluted earnings per share were $0.15,
compared with $0.20 per share reported for the prior-year first quarter.
For the quarter, net interest income was $8.2 million, increasing $0.5
million or 6.4% compared with the 2007 first quarter. The net interest
margin increased from 3.58% to 3.60% between periods, due in part to
recent decreases in market interest rates. Non-interest income totaled
$1.4 million in the first quarter of 2008, decreasing $0.2 million from
the same prior-year period, and included a decrease of $0.1 million in
non-recurring gains on sale of investment securities. The provision for
loan and lease losses was $0.3 million for each of the quarters ended
March 31, 2008 and 2007. Non-interest expense of $7.3 million increased
$0.8 million from the same period a year ago and included a $0.7 million
charge in connection with the previously announced termination of the
Company’s merger agreement with Oritani
Financial Corp, as well as other merger-related costs.
Greater Community Bancorp’s Chairman,
President and CEO, Anthony M. Bruno, Jr., commented, “While
first quarter net income was impacted by the merger agreement
termination fee and other merger-related costs, excluding these costs
operating earnings improved over the year-ago first quarter. After
adjusting for costs incidental to the prior merger agreement, net income
was $1.9 million, up 12.0%, and diluted earnings per share were $0.22
for the three months ended March 31, 2008. We are pleased to see that
net interest income continues to improve from reduced market interest
rates and continued earning asset growth. Indeed, the Company’s
net interest income is at the highest level we have seen in the last
eight quarters. However, this comes at a time when we are starting to
see an increase in nonperforming loans as a result of economic
conditions affecting the real estate market. While GCB has no sub-prime
mortgage loans, we are not immune to the credit challenges and current
market conditions facing the financial services industry, and we remain
ever-committed to prudent credit risk management. Management believes
that the Company’s allowance for loan and
lease losses adequately covers its credit risk exposure at March 31,
2008.”
Mr. Bruno also noted, “We are excited about
the opening of our newest branch in Englewood, New Jersey this past
quarter. In less than two months, our Englewood office has generated
more than $5.6 million in deposits. Greater Community is delighted to
serve our new and existing customers at this promising new location.”
At March 31, 2008, the Company’s total assets
were $998.1 million, up $22.1 million since December 31, 2007,
representing annualized growth of 9.1%. Loans and leases increased $6.8
million in the first quarter, totaling $809.7 million as of March 31,
2008. Total deposits at March 31, 2008 were $750.5 million and
shareholders' equity totaled $72.9 million.
Nonperforming assets were 0.49% of total assets at March 31, 2008,
compared to 0.21% at March 31, 2007. Net loan and lease charge-offs for
the first quarter of 2008 were 0.02% of average loans and leases,
compared to 0.01% for the same period a year ago. As of March 31, 2008,
the Company’s allowance for loan and lease
losses was $11.3 million, or 1.40% of total loans and leases compared
with 1.37% a year ago.
In March 2008, the Board of Directors declared a $0.145 per share
quarterly cash dividend, representing an annualized cash dividend of
$0.58 per share.
About the Company
Greater Community Bancorp is a financial holding company headquartered
in Totowa, New Jersey. The Company operates sixteen full-service
branches in the northern New Jersey counties of Bergen, Passaic and
Morris through its state-chartered commercial bank subsidiary Greater
Community Bank. Greater Community Bank provides traditional commercial
and retail banking services to businesses and consumers in New Jersey
and, through its subsidiary Highland Capital Corp., provides equipment
leasing and financing. The Company also offers traditional insurance
products through its Greater Community Insurance Services, LLC
subsidiary and offers title insurance and settlement services through
its Greater Community Title LLC subsidiary. In addition, Greater
Community Financial, a division of Greater Community Bank, provides a
wide range of investment products and services exclusively through
Raymond James Financial Services, Inc., member FINRA/SIPC. (Securities
are not FDIC insured or bank guaranteed, and are subject to risk and may
lose value). Insurance policies are not insured by the FDIC or any
federal government agency, may lose value, and are not a deposit of or
guaranteed by Greater Community Bank or any bank affiliate. For
additional information about Greater Community Bancorp and its
subsidiaries visit www.greatercommunity.com
or call (973) 942-1111.
On March 19, 2008, the Company announced that it had entered into an
Agreement and Plan of Merger with Valley National Bancorp (“Valley”),
pursuant to which the Company will merge with and into Valley, with
Valley being the surviving corporation, pending shareholder and
regulatory approvals and other customary closing conditions.
Additional Information and Where to Find it
In connection with the proposed merger, Valley intends to file a proxy
statement-prospectus with the Securities and Exchange Commission.
INVESTORS AND SECURITY HOLDERS ARE ADVISED TO READ THE PROXY
STATEMENT-PROSPECTUS WHEN IT BECOMES AVAILABLE, BECAUSE IT WILL CONTAIN
IMPORTANT INFORMATION. Investors and security holders may obtain a free
copy of the registration statement (when available) and other documents
filed by Valley and Greater Community with the Commission at the
Commission’s web site at www.sec.gov.
Valley’s documents may be accessed and
downloaded for free at Valley’s web site at http://www.valleynationalbank.com/filings.html
or by directing a request to Dianne M. Grenz, First Senior Vice
President, Valley National Bancorp, at 1455 Valley Road, Wayne, New
Jersey 07470, telephone (973) 305-3380, and Greater Community’s
documents may be accessed and downloaded for free at http://www.greatercommunity.com/framecorp2.html
or by directing a request to Anthony M. Bruno, Jr., Chairman, President
and CEO, Greater Community Bancorp, at 55 Union Boulevard, Totowa, New
Jersey 07512, telephone (973) 942-1111.
Participants in the Solicitation
This communication is not a solicitation of a proxy from any security
holder of Greater Community Bancorp. However, Valley, Greater Community,
their respective directors and executive officers and other persons may
be deemed to be participants in the solicitation of proxies from Greater
Community’s shareholders in respect of the
proposed transaction. Information regarding the directors and executive
officers of Valley may be found in its definitive proxy statement
relating to its 2008 Annual Meeting of Shareholders, which was filed
with the Commission on March 6, 2008 and can be obtained free of charge
from Valley’s website. Information regarding
the directors and executive officers of Greater Community may be found
in its 2007 Annual Report on Form 10-K, which was filed with the
Commission on March 12, 2008 and can be obtained free of charge from
Greater Community’s website. Other
information regarding the participants in the proxy solicitation and a
description of their direct and indirect interests, by security holdings
or otherwise, will be contained in the proxy statement/prospectus and
other relevant materials to be filed with the SEC when they become
available.
Forward-Looking Statements
The foregoing contains forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995. Such statements
are not historical facts and include expressions about management’s
confidence and strategies and management’s
expectations about new and existing programs and products,
relationships, opportunities, taxation, technology and market
conditions. These statements may be identified by such forward-looking
terminology as “expect,”
“believe,” “view,”
“opportunity,” “allow,”
“continues,” “reflects,”
“typically,” “usually,”
“anticipate,” or
similar statements or variations of such terms. Such forward-looking
statements involve certain risks and uncertainties. Actual results may
differ materially from such forward-looking statements. Factors that may
cause actual results to differ from those contemplated by such
forward-looking statements include, but are not limited to, the
following: failure to obtain shareholder or regulatory approval for the
merger of Greater Community with Valley or to satisfy other conditions
to the merger on the proposed terms and within the proposed timeframe;
the inability to realize expected cost savings and synergies from the
merger of Greater Community with Valley in the amounts or in the
timeframe anticipated; changes in the estimate of non-recurring charges;
costs or difficulties relating to integration matters might be greater
than expected; material adverse changes in Valley’s
or Greater Community’s operations or
earnings; the inability to retain Greater Community’s
customers and employees; or a decline in the economy in Valley’s
primary market areas, mainly in New Jersey and New York.
Valley and Greater Community assume no obligation for updating any such
forward-looking statement at any time.
Greater Community Bancorp
Consolidated Balance Sheets
(dollars in thousands, except per share data)
March 31,
December 31,
2008
2007
(unaudited)
ASSETS
CASH AND DUE FROM BANKS - Non interest-bearing
$
21,750
$
16,801
FEDERAL FUNDS SOLD
24,090
7,640
Total cash and cash equivalents
45,840
24,441
DUE FROM BANKS - Interest-bearing
4,751
4,868
INVESTMENT SECURITIES - Available-for-sale
76,702
82,283
INVESTMENT SECURITIES - Held-to-maturity (aggregate fair values of
$10,690 and $12,213 at March 31 , 2008 and December 31, 2007,
respectively)
11,638
12,878
Total investment securities
88,340
95,161
LOANS AND LEASES, net of unearned income
809,677
802,865
Less: Allowance for loan and lease losses
(11,326)
(11,188)
Net loans and leases
798,351
791,677
PREMISES AND EQUIPMENT, net
12,464
12,505
ACCRUED INTEREST RECEIVABLE
4,303
4,318
INVESTMENT IN REAL ESTATE JOINT VENTURE
870
870
BANK-OWNED LIFE INSURANCE
16,130
15,955
GOODWILL
11,574
11,574
OTHER ASSETS
15,455
14,621
TOTAL ASSETS
$
998,078
$
975,990
LIABILITIES AND SHAREHOLDERS' EQUITY
DEPOSITS:
Non interest-bearing
$
164,315
$
166,550
Interest-bearing checking
79,702
99,319
Money market
200,282
193,884
Savings
66,725
67,433
Time deposits less than $100
155,200
150,523
Time deposits $100 and over
84,287
71,763
Total deposits
750,511
749,472
SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE
6,374
4,729
FHLB ADVANCES
132,500
112,500
SUBORDINATED DEBENTURES
24,743
24,743
ACCRUED INTEREST PAYABLE
4,913
4,942
OTHER LIABILITIES
6,098
7,215
Total liabilities
925,139
903,601
SHAREHOLDERS' EQUITY:
Common stock, par value $0.50 per share: 20,000,000 shares
authorized, 8,721,646 and
8,709,940 shares outstanding at March 31, 2008 and December 31,
2007, respectively
4,361
4,355
Additional paid-in capital
63,296
63,139
Retained earnings
4,819
4,787
Accumulated other comprehensive income
463
108
Total shareholders' equity
72,939
72,389
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
$
998,078
$
975,990
Greater Community Bancorp
Consolidated Statements of Income
(in thousands, except per share data, unaudited)
Three Months Ended
March 31,
2008
2007
INTEREST INCOME:
Loans and leases
$
13,585
$
12,614
Investment securities
1,280
1,394
Federal funds sold and deposits with banks
163
606
Total interest income
15,028
14,614
INTEREST EXPENSE:
Deposits
4,862
5,050
Short-term borrowings
1,560
1,366
Long-term borrowings
422
507
Total interest expense
6,844
6,923
NET INTEREST INCOME
8,184
7,691
PROVISION FOR LOAN AND LEASE LOSSES
328
313
Net interest income after provision for loan and lease losses
7,856
7,378
NON-INTEREST INCOME:
Service charges on deposit accounts
598
681
Commissions and fees
334
318
Loan fee income
264
238
Gain on sale of investment securities
-
141
Loss on impaired investment securities
(13)
-
Bank-owned life insurance
175
136
All other income
85
107
Total non-interest income
1,443
1,621
NON-INTEREST EXPENSE:
Salaries and employee benefits
3,879
3,746
Occupancy and equipment
985
976
Regulatory, professional and other fees
749
542
Computer services
230
253
Office expenses
262
248
Interest on income taxes
6
120
Merger agreement termination fee
700
-
Other operating expenses
504
598
Total non-interest expense
7,315
6,483
INCOME BEFORE PROVISION FOR INCOME TAXES
1,984
2,516
PROVISION FOR INCOME TAXES
685
788
NET INCOME
$
1,299
$
1,728
Weighted average shares outstanding - Basic
8,717
8,623
Weighted average shares outstanding - Diluted
8,731
8,642
Earnings per share - Basic
$
0.15
$
0.20
Earnings per share - Diluted
$
0.15
$
0.20
Greater Community Bancorp
Three Months Ended
March 31,
SELECTED FINANCIAL DATA
2008
2007
(dollars in thousands, except per share data, unaudited)
Earnings
Net interest income
$
8,184
$
7,691
Provision for loan and lease losses
328
313
Non-interest income
1,443
1,621
Non-interest expense
7,315
6,483
Net income
1,299
1,728
Per Share Data1
Earnings per share - basic
$
0.15
$
0.20
Earnings per share - diluted
0.15
0.20
Book value per share
8.36
7.93
Cash dividends declared
0.145
0.137
Performance Ratios
Return on average assets
0.53%
0.74%
Return on average equity
7.18%
10.37%
Net interest margin (tax equivalent basis)
3.60%
3.58%
Efficiency ratio
75.98%
69.38%
March 31,
December 31,
SELECTED BALANCE SHEET DATA & RATIOS
2008
2007
(dollars in thousands)
(unaudited)
Period-end Balances
Total assets
$
998,078
$
975,990
Total loans and leases, net of unearned income
809,677
802,865
Total deposits
750,511
749,472
Total shareholders' equity
72,939
72,389
Capital & Liquidity
Shareholders' equity/ total assets
7.31%
7.42%
Loans and leases/ deposits
107.88%
107.12%
Asset Quality
Net loan and lease charge-offs/ average loans and leases
0.02%
0.01%
Nonperforming assets/ total assets
0.49%
0.21%
Allowance for loan and lease losses/ total loans and leases
1.40%
1.39%
1 Adjusted retroactively for stock
dividends.