Center Bancorp, Inc. Reports First Quarter 2010 Earnings
and Restates Earnings for the Year ended December 31, 2009
Union, NJ -- (GLOBE NEWSWIRE) -- 04/30/2010 -- Center Bancorp, Inc. (NASDAQ: CNBC) (the “Corporation”), parent company of Union Center National Bank, today reported operating results for the first quarter ended March 31, 2010 and announced a restatement of its earnings for the year ended December 31, 2009. Net income amounted to $281,000, or $0.01 per fully diluted common share, for the quarter ended March 31, 2010, as compared with earnings of $799,000, or $0.05 per fully diluted common share, for the quarter ended March 31, 2009.
For the quarter ended March 31, 2010, impairment charges of $4.4 million in the investment securities portfolio and a higher than planned provision for loan losses of $460,000, coupled with an early termination charge of $594,000 incurred to unwind a structured repurchase agreement, offset in part by a recognized tax benefit of $852,000, reduced core earnings per fully diluted common share by $0.17 per share.
In speaking about the first quarter, President & CEO Anthony C. Weagley remarked, “The Corporation generated net income of $0.3 million and a return on average equity of 1.07% while maintaining a strong capital position and taking proactive steps to assist in putting credit related issues behind us. This speaks to the earnings power of our organization, the strength of our businesses and our ability to manage costs and capital effectively. The Corporation’s strong core earnings performance excluding the above items and strong capital levels allowed us to strengthen the balance sheet. We have continued to take strategic action on many fronts to strengthen our earnings capacity and to position for future performance.” During the quarter:
| | · | Impairment charges totaling $4.4 million were concentrated on four issues within the investment securities portfolio and resulted in substantially eliminating the remaining exposure related to these bonds. |
| | · | A total provision for loan losses of $940,000 resulted in an allowance for loan losses totaling $8.1 million. The allowance represents 1.14% of total loans and 71.7% of non-performing loans as of March 31, 2010. |
| | · | A one-time charge of $594,000 related to the termination of a structured reverse repurchase transaction will be more than offset in less than a year’s time since the Corporation replaced the funding with lower cost sources of funding. |
“These actions had a negative impact on short-term profitability, but significantly strengthen our balance sheet and position the Corporation for improved results in 2010 and beyond.” Mr. Weagley added, “The Corporation’s capital remains strong following the $11 million in common equity raised in late 2009. We are starting to see encouraging signs of improvement in market and economic conditions and we are taking advantage of opportunities to prudently leverage capital for profitable growth.”
In a separate action, the Corporation announced that it will restate its earnings for December 31, 2009. The Corporation has concluded that a restatement of its financial statements for the year ended December 31, 2009 is necessary to conform to regulatory reporting positions taken with respect to the previously reported loan receivable from Highlands State Bank (“Highlands”). As previously reported, this loan participation ended and Union Center National Bank (the “Bank”) made demand for payment from Highlands at year end. In its Annual Report as originally reported, the Corporation treated the amount due as a receivable from Highlands rather than as a loan, since the participation had ended. Bank regulators concluded that, solely for purposes of the Reports of Condition and Income (“Call Reports”) filed by the Bank with the Bank’s regulators, the item should be accounted for consistent with its classification prior to December 31, 2009, despite the termination of the participation. After reviewing this matter, the Bank has agreed to account for this item in its Call Reports in the manner proposed by the banking regulators and has determined to restate its year-end financial statements filed with the SEC to assure that the financial statements filed with the SEC are consistent with the financial statements filed as part of the Call Reports. The change resulted in, among other things, (i) an increase in loans outstanding of $4,153,000, (ii) a resultant increase in the allowance for loan losses of $436,000 and (iii) a resultant increase in the provision for loan losses of $1,336,000. The increase in the provision for loan losses in turn lowered year-end after-tax net income by $802,000 or $0.06 per fully diluted share. The Corporation and its counsel remain confident regarding its legal position with respect to its underlying litigation with Highlands and intend to continue to vigorously pursue its current course of legal action for repayment of the amount payable to the Bank. The Corporation intends to reflect the restated financial statements in Amendment No. 2 to its Annual Report on Form 10-K to be filed shortly with the SEC.
Results for the quarter include:
| | · | The Corporation was profitable in the first quarter, notwithstanding substantial impairment and special termination charges. Net income of $281,000 for the first quarter of 2010 compared with net income of $236,000 for the fourth quarter of 2009 and net income of $799,000 for the first quarter of 2009. |
| | · | Earnings per share of $0.01 per fully diluted common share compared with earnings of $0.01 per fully diluted common share for the fourth quarter of 2009 and $0.05 per fully diluted common share for the comparable first quarter period of 2009. Dividends and accretion relating to the preferred stock and warrants issued to the U.S. Treasury reduced earnings by approximately $0.01 per fully diluted common share in all quarters. |
| | · | Net interest margin on a fully taxable equivalent basis expanded by 30 basis points to 3.35% compared to 3.05% for the fourth quarter of 2009, and increased 54 basis points compared to the first quarter of 2009, primarily the result of lower rates on deposits and borrowings. |
| | · | Overall credit quality in the loan portfolio remained relatively stable. Non-performing assets, consisting of non- accrual loans, accruing loans past due 90 days or more and other real estate owned, amounted to 0.96% of total assets at March 31, 2010 compared to 0.80% at March 31, 2009 and 0.94% at December 31, 2009. |
| | · | Deposits decreased to $792.5 million at March 31, 2010 from $813.7 million at December 31, 2009 but increased $24.1 million from the balance reported at March 31, 2009. The decline from December 31, 2009 was primarily in time deposits. |
| | · | Tier 1 Capital Leverage ratio of 8.41% at March 31, 2010, compared to 8.42% at March 31, 2009, and 7.73% at December 31, 2009. |
| | · | Book value per common share was $6.52 at March 31, 2010, compared to $6.32 at December 31, 2009 and $6.15 at March 31, 2009. Tangible book value per common share was $5.35 at March 31, 2010, compared to $5.15 at December 31, 2009 and $4.83 at March 31, 2009. |
Selected Financial Ratios (unaudited; annualized where applicable) | |
| | | | | | (Restated) | | | | | | | | | | | | | |
| As of or for the quarter ended: | | 3/31/10 | | | 12/31/09 | | | 9/30/09 | | | 6/30/09 | | | 3/31/09 | | | 12/31/08 | |
| Return on average assets | | | 0.09 | % | | | 0.07 | % | | | 0.46 | % | | | 0.40 | % | | | 0.30 | % | | | 0.66 | % |
| Return on average equity | | | 1.07 | % | | | 0.91 | % | | | 6.77 | % | | | 5.35 | % | | | 3.52 | % | | | 8.38 | % |
| Net interest margin (tax equivalent basis) | | | 3.37 | % | | | 3.05 | % | | | 2.79 | % | | | 2.73 | % | | | 2.81 | % | | | 3.01 | % |
| Loans / deposits ratio | | | 90.08 | % | | | 88.44 | % | | | 74.50 | % | | | 72.68 | % | | | 88.24 | % | | | 102.53 | % |
| Stockholders’ equity / total assets | | | 8.81 | % | | | 8.51 | % | | | 6.83 | % | | | 6.67 | % | | | 7.98 | % | | | 7.99 | % |
| Efficiency ratio* | | | 67.5 | % | | | 57.6 | % | | | 62.0 | % | | | 96.3 | % | | | 72.5 | % | | | 59.7 | % |
| Book value per common share | | $ | 6.52 | | | $ | 6.32 | | | $ | 6.36 | | | $ | 6.14 | | | $ | 6.15 | | | $ | 6.29 | |
| Return on average tangible stockholders’ equity* | | | 1.28 | % | | | 1.09 | % | | | 8.33 | % | | | 6.61 | % | | | 4.33 | % | | | 10.62 | % |
| Tangible common stockholders’ equity / tangible assets* | | | 6.66 | % | | | 6.37 | % | | | 4.92 | % | | | 4.74 | % | | | 5.69 | % | | | 6.42 | % |
| Tangible book value per common share* | | $ | 5.35 | | | $ | 5.15 | | | $ | 5.04 | | | $ | 4.83 | | | $ | 4.83 | | | $ | 4.97 | |
* Information reconciling non-GAAP measures to GAAP measures is presented elsewhere in this press release.
Earnings Summary for the Quarter Ended March 31, 2010
For the three months ended March 31, 2010, total interest income on a fully taxable equivalent basis increased by $0.6 million or 5.0%, to $12.7 million, as compared to the three months ended March 31, 2009. For the three months ended March 31, 2010, total interest expense decreased by $1.4 million, or 25.2%, to $4.2 million, as compared to the same period last year.
The Corporation recorded net interest income on a fully taxable equivalent basis of $8.6 million for the three months ended March 31, 2010 and $6.6 million for the comparable period in 2009. The increase in net interest income for the three months ended March 31, 2010 related principally to a decrease in interest expense during the period.
The three month decrease in interest expense reflects the impact of the sustained low levels in short-term interest rates. The average balance of interest-bearing liabilities, including borrowings, declined by $86.4 million, or 10.2%, to $930.2 million in the current first quarter period compared to the first quarter of 2009. The positive effect of the reduction in this type of funding source was a decrease in the average cost of funds, which declined 85 basis points to 1.79% from 2.64% for the quarter ended March 31, 2009 and on a linked sequential quarter increased 11 basis points as compared to the fourth quarter of 2009.
For the three months ended March 31, 2010, the Corporation’s net interest spread increased 64 basis points to 3.19% as compared to 2.55% for the comparable three month period in 2009, and the Corporation’s net interest margin (net interest income as a percentage of interest-earning assets) widened by 54 basis points from 2.81% to 3.35%, in all cases on an annualized basis.
Statements of Income
The following presents condensed consolidated statement of income data for the periods indicated.
Condensed Consolidated Statements of Income (unaudited)
| (dollars in thousands, except per share data) | | | (Restated) | | | | | | | | | | | | | |
| For the quarter ended: | | 3/31/10 | | | 12/31/09 | | | 9/30/09 | | | 6/30/09 | | | 3/31/09 | | | 12/31/08 | |
| Net interest income | | $ | 8,509 | | | $ | 8,018 | | | $ | 7,441 | | | $ | 6,627 | | | $ | 6,379 | | | $ | 6,823 | |
| Provision for loan losses | | | 940 | | | | 2,740 | | | | 280 | | | | 156 | | | | 1,421 | | | | 425 | |
| Net interest income after provision for loan losses | | | 7,569 | | | | 5,278 | | | | 7,161 | | | | 6,471 | | | | 4,958 | | | | 6,398 | |
| Non-interest income (charges) | | | (2,449 | ) | | | (340 | ) | | | 311 | | | | 2,551 | | | | 1,384 | | | | 615 | |
| Non-interest expense | | | 6,392 | | | | 5,238 | | | | 5,186 | | | | 7,314 | | | | 5,319 | | | | 4,754 | |
| Income before income tax | | | (1,272 | ) | | | (300 | ) | | | 2,286 | | | | 1,708 | | | | 1,023 | | | | 2,259 | |
| Income tax expense (benefit) | | | (1,553 | ) | | | (536 | ) | | | 751 | | | | 507 | | | | 224 | | | | 560 | |
| Net income | | $ | 281 | | | $ | 236 | | | $ | 1,535 | | | $ | 1,201 | | | $ | 799 | | | | 1,699 | |
| Net income available to common stockholders | | $ | 136 | | | $ | 94 | | | $ | 1,387 | | | $ | 1,053 | | | $ | 670 | | | $ | 1,699 | |
| Earnings per common share: | | | | | | | | | | | | | | | | | | | | | | | | |
| Basic | | $ | 0.01 | | | $ | 0.01 | | | $ | 0.11 | | | $ | 0.08 | | | $ | 0.05 | | | $ | 0.13 | |
| Diluted | | | 0.01 | | | | 0.01 | | | | 0.11 | | | | 0.08 | | | | 0.05 | | | | 0.13 | |
| Weighted average common shares outstanding: | | | | | | | | | | | | | |
| Basic | | | 14,574,832 | | | | 14,531,387 | | | | 13,000,601 | | | | 12,994,429 | | | | 12,991,312 | | | | 12,989,304 | |
| Diluted | | | 14,579,871 | | | | 14,534,255 | | | | 13,005,101 | | | | 12,996,544 | | | | 12,993,185 | | | | 12,995,134 | |
Non-Interest Income
Non-interest income decreased $3.8 million for the first quarter of 2010 compared with the comparable quarter of 2009, primarily as a result of higher net investment securities losses. During the first quarter of 2010, the Corporation recorded net investment securities losses of $3.3 million compared to $600,000 in gains for the same period last year. Excluding net securities losses, the Corporation recorded non-interest income of $895,000 for the three months ended March 31, 2010 compared to non-interest income, excluding net securities losses, of $968,000 on a sequential linked quarter basis and non-interest income, excluding net securities gains, of $784,000 for the three months ended March 31, 2009.
Consolidated Non-Interest Income (unaudited)
| (in thousands) | | | | | | | | | | | | | | | | | | |
| For the quarter ended: | | 3/31/109 | | | 12/31/09 | | | 9/30/09 | | | 6/30/09 | | | 3/31/09 | | | 12/31/08 | |
| Service charges on deposit accounts | | $ | 325 | | | $ | 371 | | | $ | 350 | | | $ | 324 | | | $ | 343 | | | $ | 376 | |
| Commissions from mortgage broker activities | | | - | | | | 1 | | | | 4 | | | | - | | | | 2 | | | | 7 | |
| Loan related fees | | | 45 | | | | 25 | | | | 35 | | | | 45 | | | | 30 | | | | 53 | |
| Commissions from sale of mutual funds and annuities | | | 93 | | | | 24 | | | | 17 | | | | 45 | | | | 40 | | | | 22 | |
| Debit card and ATM fees | | | 105 | | | | 111 | | | | 114 | | | | 116 | | | | 106 | | | | 113 | |
| Bank-owned life insurance | | | 264 | | | | 408 | | | | 273 | | | | 257 | | | | 218 | | | | 247 | |
| Net investment securities gains (losses) | | | (3,344 | ) | | | (1,308 | ) | | | (511 | ) | | | 1,710 | | | | 600 | | | | (256 | ) |
| Other service charges and fees | | | 63 | | | | 28 | | | | 29 | | | | 54 | | | | 45 | | | | 53 | |
| Total non-interest income (charges) | | $ | (2,449 | ) | | $ | (340 | ) | | $ | 311 | | | $ | 2,551 | | | $ | 1,384 | | | $ | 615 | |
Non-Interest Expense
Non-interest expense for the first quarter of 2010 totaled $6.4 million, an increase of $1.1 million, or 20.2%, from the comparable period in 2009. The Corporation incurred a cost of $594,000 relative to termination of a structured repurchase agreement during the three-month period ended March 31, 2010. FDIC insurance expense increased $253,000 for the three months ended March 31, 2010 over the comparable period in 2009.
Consolidated Non-Interest Expense (unaudited)
| (in thousands) | | | | | | | | | | | | | | | | | | |
| For the quarter ended: | | 3/31/10 | | | 12/31/09 | | | 9/30/09 | | | 6/30/09 | | | 3/31/09 | | | 12/31/08 | |
| Salaries | | $ | 2,043 | | | $ | 1,934 | | | $ | 1,981 | | | $ | 1,946 | | | $ | 1,861 | | | $ | 1,777 | |
| Stock option expense | | | 16 | | | | 13 | | | | 17 | | | | 25 | | | | 22 | | | | 23 | |
| Health insurance and other employee benefits | | | 375 | | | | 379 | | | | 361 | | | | 362 | | | | 309 | | | | (246 | ) |
| Payroll taxes | | | 215 | | | | 152 | | | | 159 | | | | 166 | | | | 194 | | | | 139 | |
| Other employee-related expenses | | | 8 | | | | 8 | | | | 11 | | | | 8 | | | | 7 | | | | 17 | |
| Total salaries and employee benefits | | | 2,657 | | | | 2,486 | | | | 2,529 | | | | 2,507 | | | | 2,393 | | | | 1,710 | |
| Occupancy, net | | | 670 | | | | 617 | | | | 539 | | | | 583 | | | | 797 | | | | 983 | |
| Premises and equipment | | | 219 | | | | 300 | | | | 323 | | | | 319 | | | | 321 | | | | 362 | |
| Professional and consulting | | | 274 | | | | 173 | | | | 190 | | | | 236 | | | | 212 | | | | 152 | |
| Stationery and printing | | | 84 | | | | 86 | | | | 81 | | | | 102 | | | | 70 | | | | 97 | |
| FDIC Insurance | | | 618 | | | | 430 | | | | 320 | | | | 940 | | | | 365 | | | | 149 | |
| Marketing and advertising | | | 93 | | | | 20 | | | | 75 | | | | 141 | | | | 130 | | | | 144 | |
| Computer expense | | | 340 | | | | 302 | | | | 220 | | | | 228 | | | | 214 | | | | 229 | |
| Bank regulatory related expenses | | | 98 | | | | 68 | | | | 63 | | | | 60 | | | | 60 | | | | 55 | |
| Postage and delivery | | | 91 | | | | 76 | | | | 72 | | | | 64 | | | | 46 | | | | 69 | |
| ATM related expenses | | | 64 | | | | 63 | | | | 63 | | | | 61 | | | | 61 | | | | 59 | |
| Other real estate owned expense | | | - | | | | - | | | | 30 | | | | 1,375 | | | | 33 | | | | 11 | |
| Amortization of core deposit intangible | | | 19 | | | | 19 | | | | 19 | | | | 22 | | | | 22 | | | | 23 | |
| Repurchase agreement termination fee | | | 594 | | | | - | | | | - | | | | - | | | | - | | | | - | |
| Other expenses | | | 571 | | | | 598 | | | | 662 | | | | 676 | | | | 595 | | | | 711 | |
| Total non-interest expense | | $ | 6,392 | | | $ | 5,238 | | | $ | 5,186 | | | $ | 7,314 | | | $ | 5,319 | | | $ | 4,754 | |
Asset Quality
Selected Credit Quality Measures (unaudited)
| (dollars in thousands) | | | | | (Restated) | | | | | | | | | | | | | |
| As of or for the quarter ended: | | 3/31/10 | | | 12/31/09 | | | 9/30/09 | | | 6/30/09 | | | 3/31/09 | | | 12/31/08 | |
| Non-accrual loans | | $ | 9,770 | | | $ | 11,245 | | | $ | 11,448 | | | $ | 5,058 | | | $ | 4,566 | | | $ | 541 | |
| Loans 90 days or more past due and still accruing | | | 1,584 | | | | 39 | | | | 1,477 | | | | 1,260 | | | | - | | | | 139 | |
| Total non performing loans | | | 11,354 | | | | 11,284 | | | | 12,925 | | | | 6,318 | | | | 4,566 | | | | 680 | |
| Other real estate owned | | | - | | | | - | | | | - | | | | 3,500 | | | | 4,426 | | | | 3,949 | |
| Total non performing assets | | $ | 11,354 | | | $ | 11,284 | | | $ | 12,925 | | | $ | 9,818 | | | $ | 8,992 | | | $ | 4,629 | |
| Troubled debt restructured loans | | $ | 4,465 | | | $ | 966 | | | $ | 970 | | | $ | 975 | | | $ | 91 | | | $ | 93 | |
| Non performing assets / total assets | | | 0.96 | % | | | 0.94 | % | | | 0.96 | % | | | 0.73 | % | | | 0.80 | % | | | 0.45 | % |
| Non performing loans / total loans | | | 1.59 | % | | | 1.57 | % | | | 1.80 | % | | | 0.91 | % | | | 0.67 | % | | | 0.10 | % |
| Net charge-offs | | $ | 1,512 | | | $ | 1,171 | | | $ | 55 | | | $ | 8 | | | $ | 906 | | | $ | 251 | |
| Net charge-offs / average loans for the period (1) | | | 0.85 | % | | | 0.66 | % | | | 0.03 | % | | | 0.00 | % | | | 0.53 | % | | | 0.15 | % |
| Allowance for loan losses / period end loans | | | 1.14 | % | | | 1.21 | % | | | 1.00 | % | | | 1.00 | % | | | 1.00 | % | | | 0.92 | % |
| Allowance for loan losses / non-performing loans | | | 71.7 | % | | | 77.2 | % | | | 55.3 | % | | | 105.2 | % | | | 148.2 | % | | | 919.7 | % |
| Total assets | | $ | 1,187,655 | | | $ | 1,195,488 | | | $ | 1,349,516 | | | $ | 1,341,603 | | | $ | 1,121,013 | | | $ | 1,023,293 | |
| Total loans | | | 713,906 | | | | 719,606 | | | | 716,100 | | | | 694,214 | | | | 678,017 | | | | 676,203 | |
| Average loans for the quarter | | | 711,860 | | | | 709,612 | | | | 693,670 | | | | 686,675 | | | | 679,953 | | | | 670,212 | |
| Allowance for loan losses | | | 8,139 | | | | 8,711 | | | | 7,142 | | | | 6,917 | | | | 6,769 | | | | 6,254 | |
_______________________
At March 31, 2010, non-performing assets totaled $11.4 million, or 0.96% of total assets, as compared with $11.3 million, or 0.94%, at December 31, 2009 and $9.0 million, or 0.80%, at March 31, 2009.
Overall credit quality in the Bank’s loan portfolio remains relatively strong, although continued economic weakness has impacted several problem loans in the portfolio. Non-accrual loans decreased from $11.2 million at December 31, 2009 to $9.8 million at March 31, 2010. Troubled debt restructured loans increased from $966,000 from December 31, 2009 to $4.5 million at March 31, 2010, due to the addition of one participation loan totaling $3.6 million. Loans past due 90 days or more and still accruing increased from $39,000 at December 31, 2009 to $1,584,000 at March 31, 2010. The increase consisted primarily of three loans for a total of approximately $1.2 million.
At March 31, 2010, the allowance for loan losses amounted to approximately $8.1 million, or 1.14% of total loans. The allowance for loan losses as a percentage of total non-performing loans amounted to 71.7% at March 31, 2010 compared to 77.2% at December 31, 2009 and 148.2% at March 31, 2009.
A discussion of the significant components of non-accrual loans at March 31, 2010 is outlined below. This grouping of loans accounts for approximately 84 percent of our total non-accrual loans.
- A $3.0 million loan secured by a commercial property located in Essex County, New Jersey. This loan represents the aforementioned expired participation loan with Highlands State Bank, which the Corporation is in dispute over.
- A $2.0 million loan secured by a commercial property located in Monmouth County, New Jersey. At present, the borrower is in negotiations with several prospective tenants to either purchase the property or to lease the property.
- A $1.8 million residential loan on a luxury home in Morris County, New Jersey. The borrower has filed bankruptcy. The Bank has offered the bankruptcy trustee $50,000 for the purchase of the deed, which was accepted thus eliminating a lengthy and expensive foreclosure process and greatly accelerating the disposition of this property in 2010.
- A $1.0 million loan for a construction project secured by a commercial property in Union County, New Jersey. During the first quarter of this year, the borrower and guarantor indicated that they are negotiating a sale of the property and we expect a contract of sale in the second quarter of 2010.
While the recession continues to impact our region, we are encouraged by the fact that overall, we believe our credit quality continues to compare favorably with peers, which is a testament to our conservative underwriting standards. We also believe that the enhancements we are making in our approach to managing credit quality in a difficult environment will help us continue to weather ongoing economic challenges and participate in an eventual economic recovery.
The challenge for the Corporation will be to intensify our efforts to seek opportunities that are less affected by industries hit hardest by the recession and diversified to the overall markets in fiscal 2010.
Capital
Total stockholders' equity amounted to $104.6 million, or 8.81% of total assets, at March 31, 2010. Tangible common stockholders' equity was $78.0 million, or 6.66% of tangible assets. Book value per common share was $6.52 at March 31, 2010, compared to $6.15 at March 31, 2009. Tangible book value per common share was $5.35 at March 31, 2010 compared to $4.83 at March 31, 2009.
At March 31, 2010, the Corporation’s Tier 1 Leverage Capital ratio was 8.41%, the Tier 1 Risk-Based Capital ratio was 11.46% and the Total Risk-Based Capital ratio was 12.42%. Tier 1 Capital increased to approximately $97.5 million at March 31, 2010 from $87.7 million at March 31, 2009, largely reflecting the Corporation’s proceeds from the rights offering and private placement with its standby purchaser in October 2009.
Statement of Condition at March 31, 2010
| | · | Total assets amounted to $1.2 billion at March 31, 2010, which positions the Corporation as one of the largest New Jersey headquartered financial institutions. |
| | · | Total loans were $713.9 million at March 31, 2010, a $35.9 million, or 5.3%, increase from March 31, 2009. |
| | · | Loan originations continued during the quarter in the Corporation’s commercial-related segment of the portfolio, even though the portfolio at March 31, 2010 was down slightly from December 31, 2009. Total real estate loans declined $12.2 million, partially offset by an increase in commercial loans of $7.0 million, which reflects the Corporation’s strategic focus in that area. Total gross loans booked for the quarter included $25.2 million of new loans and $20.0 million in advances principally offset by payoffs and principal payments of $49.8 million. |
| | · | At March 31, 2010, the Corporation had $4.3 million in outstanding loan commitments, which are expected to fund over the next 90 days. |
| | · | Investment securities increased by $56.3 million at March 31, 2010 compared to March 31, 2009. |
| | · | Deposits totaled $792.5 million at March 31, 2010, an increase of $24.1 million from March 31, 2009. |
| | · | Total deposit funding sources, including overnight repurchase agreements (which agreements are part of the demand deposit base), amounted to $832.7 million at March 31, 2010, an increase of $37.4 million from March 31, 2009, reflecting inflows in core savings deposits. |
| | · | Time certificates of deposit of $100,000 and over decreased $43.8 million as compared to March 31, 2009 primarily due to a decline in CDARS Reciprocal deposits. The Corporation made a concerted effort to reduce non-relationship CDARS deposits during the period. |
| | · | The Corporation expects its core deposit gathering efforts to remain strong, supported in part by the FDIC’s actions in temporarily raising the deposit insurance limits. Also, the Corporation participates in the FDIC’s Transaction Account Guarantee Program. Under this program, all non-interest bearing deposit transaction accounts are fully guaranteed by the FDIC, regardless of dollar amount, through December 31, 2010, with increased fees assessed. |
| | · | Borrowings totaled $258.5 million at March 31, 2010, relatively unchanged from the March 31, 2009 level of $255.4 million. |
The following reflects the composition of the Corporation’s loans as of the dates indicated.
| (in thousands) | | | | | (Restated) | | | | | | | | | | | | | |
| At quarter ended: | | 3/31/10 | | | 12/31/09 | | | 9/30/09 | | | 6/30/09 | | | 3/31/09 | | | 12/31/08 | |
| Real estate loans: | | | | | | | | | | | | | | | | | | |
| Residential | | $ | 184,598 | | | $ | 190,138 | | | $ | 200,533 | | | $ | 218,340 | | | $ | 229,903 | | | $ | 240,316 | |
| Commercial | | | 297,167 | | | | 304,662 | | | | 291,133 | | | | 262,676 | | | | 256,885 | | | | 256,527 | |
| Construction | | | 51,910 | | | | 51,099 | | | | 57,898 | | | | 54,105 | | | | 41,242 | | | | 42,075 | |
| Total real estate loans | | | 533,675 | | | | 545,899 | | | | 549,564 | | | | 535,121 | | | | 528,030 | | | | 538,918 | |
| Commercial loans | | | 179,261 | | | | 172,226 | | | | 165,173 | | | | 157,621 | | | | 148,444 | | | | 135,232 | |
| Consumer and other loans | | | 505 | | | | 954 | | | | 952 | | | | 921 | | | | 928 | | | | 1,481 | |
| Total loans before deferred fees and costs | �� | | 713,441 | | | | 719,079 | | | | 715,689 | | | | 693,663 | | | | 677,402 | | | | 675,631 | |
| Deferred costs, net | | | 465 | | | | 527 | | | | 411 | | | | 551 | | | | 615 | | | | 572 | |
| Total loans | | $ | 713,906 | | | $ | 719,606 | | | $ | 716,100 | | | $ | 694,214 | | | $ | 678,017 | | | $ | 676,203 | |
The following reflects the composition of the Corporation’s deposits as of the dates indicated.
Deposits (unaudited) | | | | | | | | | | | | | | | |
| (in thousands) | | | | | | | | | | | | | | | | | | |
| At quarter ended: | | 3/31/10 | | | 12/31/09 | | | 9/30/09 | | | 6/30/09 | | | 3/31/09 | | | 12/31/08 | |
| Checking: | | | | | | | | | | | | | | | | | | |
| Non interest-bearing | | $ | 137,422 | | | $ | 130,518 | | | $ | 126,205 | | | $ | 130,115 | | | $ | 114,607 | | | $ | 113,319 | |
| Interest-bearing | | | 156,865 | | | | 156,738 | | | | 136,070 | | | | 137,578 | | | | 132,682 | | | | 139,349 | |
| Savings | | | 188,712 | | | | 192,996 | | | | 215,275 | | | | 185,074 | | | | 137,197 | | | | 66,359 | |
| Money market | | | 126,647 | | | | 116,450 | | | | 132,395 | | | | 129,756 | | | | 114,363 | | | | 111,308 | |
| Time | | | 182,864 | | | | 217,003 | | | | 351,212 | | | | 372,619 | | | | 269,530 | | | | 229,202 | |
| Total deposits | | $ | 792,510 | | | $ | 813,705 | | | $ | 961,157 | | | $ | 955,142 | | | $ | 768,379 | | | $ | 659,537 | |
Additional Statement of Condition Information
The following tables present condensed statements of condition at or for the periods indicated.
Condensed Consolidated Statements of Condition (unaudited)
| (in thousands) | | | | | (Restated) | | | | | | | | | | | | | |
| At quarter ended: | | 3/31/10 | | | 12/31/09 | | | 9/30/09 | | | 6/30/09 | | | 3/31/09 | | | 12/31/08 | |
| Cash and due from banks | | $ | 66,863 | | | $ | 89,168 | | | $ | 172,401 | | | $ | 176,784 | | | $ | 90,634 | | | $ | 15,031 | |
| Investments | | | 322,309 | | | | 298,124 | | | | 376,097 | | | | 378,895 | | | | 266,032 | | | | 242,714 | |
| Loans | | | 713,906 | | | | 719,606 | | | | 716,100 | | | | 694,214 | | | | 678,017 | | | | 676,203 | |
| Allowance for loan losses | | | (8,139 | ) | | | (8,711 | ) | | | (7,142 | ) | | | (6,917 | ) | | | (6,769 | ) | | | (6,254 | ) |
| Restricted investment in bank stocks, at cost | | | 10,551 | | | | 10,672 | | | | 10,673 | | | | 10,675 | | | | 10,228 | | | | 10,230 | |
| Premises and equipment, net | | | 17,635 | | | | 17,860 | | | | 18,155 | | | | 18,430 | | | | 18,313 | | | | 18,488 | |
| Goodwill | | | 16,804 | | | | 16,804 | | | | 16,804 | | | | 16,804 | | | | 16,804 | | | | 16,804 | |
| Core deposit intangible | | | 205 | | | | 224 | | | | 243 | | | | 262 | | | | 283 | | | | 306 | |
| Bank-owned life insurance | | | 26,568 | | | | 26,304 | | | | 26,162 | | | | 25,888 | | | | 23,156 | | | | 22,938 | |
| Other real estate owned | | | - | | | | - | | | | - | | | | 3,500 | | | | 4,426 | | | | 3,949 | |
| Other assets | | | 20,953 | | | | 25,437 | | | | 20,023 | | | | 23,068 | | | | 19,889 | | | | 22,884 | |
| Total Assets | | $ | 1,187,655 | | | $ | 1,195,488 | | | $ | 1,349,516 | | | $ | 1,341,603 | | | $ | 1,121,013 | | | $ | 1,023,293 | |
| Deposits | | $ | 792,510 | | | $ | 813,705 | | | $ | 961,157 | | | $ | 955,142 | | | $ | 768,379 | | | $ | 659,537 | |
| Borrowings | | | 258,477 | | | | 274,408 | | | | 280,509 | | | | 252,498 | | | | 255,365 | | | | 273,595 | |
| Other liabilities | | | 32,065 | | | | 5,626 | | | | 15,623 | | | | 44,505 | | | | 7,840 | | | | 8,448 | |
| Stockholders' equity | | | 104,603 | | | | 101,749 | | | | 92,227 | | | | 89,458 | | | | 89,429 | | | | 81,713 | |
| Total Liabilities and | | | | | | | | | | | | | | | | | | | | | | | | |
| Stockholders’ Equity | | $ | 1,187,655 | | | $ | 1,195,488 | | | $ | 1,349,516 | | | $ | 1,341,603 | | | $ | 1,121,013 | | | $ | 1,023,293 | |
Condensed Consolidated Average Statements of Condition (unaudited)
| (in thousands) | | | | | (Restated) | | | | | | | | | | | | | |
| For the quarter ended: | | 3/31/10 | | | 12/31/09 | | | 9/30/09 | | | 6/30/09 | | | 3/31/09 | | | 12/31/08 | |
| Investments, fed funds and other | | $ | 310,525 | | | $ | 357,471 | | | $ | 385,270 | | | $ | 304,482 | | | $ | 253,445 | | | $ | 272,507 | |
| Loans | | | 711,860 | | | | 709,612 | | | | 693,670 | | | | 686,675 | | | | 679,953 | | | | 670,212 | |
| Allowance for loan losses | | | (8,378 | ) | | | (7,401 | ) | | | (6,978 | ) | | | (6,891 | ) | | | (6,384 | ) | | | (6,235 | ) |
| All other assets | | | 164,708 | | | | 233,341 | | | | 274,103 | | | | 211,495 | | | | 131,861 | | | | 95,514 | |
| Total Assets | | $ | 1,178,715 | | | $ | 1,293,023 | | | $ | 1,346,065 | | | $ | 1,195,761 | | | $ | 1,058,875 | | | $ | 1,031,998 | |
| Interest-bearing deposits | | $ | 661,630 | | | $ | 764,469 | | | $ | 845,504 | | | $ | 716,243 | | | $ | 588,599 | | | $ | 554,652 | |
| Non interest-bearing deposits | | | 135,358 | | | | 134,325 | | | | 129,592 | | | | 121,482 | | | | 115,541 | | | | 112,936 | |
| Borrowings | | | 268,775 | | | | 279,344 | | | | 266,825 | | | | 253,310 | | | | 255,269 | | | | 278,524 | |
| Other liabilities | | | 8,316 | | | | 11,018 | | | | 13,411 | | | | 14,921 | | | | 8,567 | | | | 4,798 | |
| Stockholders’ equity | | | 104,636 | | | | 103,867 | | | | 90,733 | | | | 89,805 | | | | 90,899 | | | | 81,088 | |
| Total Liabilities and | | | | | | | | | | | | | | | | | | | | | | | | |
| Stockholders’ Equity | | $ | 1,178,715 | | | $ | 1,293,023 | | | $ | 1,346,065 | | | $ | 1,195,761 | | | $ | 1,058,875 | | | $ | 1,031,998 | |
Non-GAAP Financial Measures
“Return on average tangible stockholders’ equity” is a non-GAAP financial measure and is defined as net income as a percentage of tangible stockholders’ equity. Tangible stockholders’ equity is defined as common stockholders’ equity minus goodwill and other intangible assets. The return on average tangible stockholders’ equity measure may be important to investors that are interested in analyzing our return on equity excluding the effect of changes in intangible assets on equity. The following table presents a reconciliation of return on average stockholders’ equity and return on average tangible stockholders’ equity for the periods presented.
| (dollars in thousands) | | | | | (Restated) | | | | | | | | | | | | | |
| For the quarter ended: | | 3/31/10 | | | 12/31/09 | | | 9/30/09 | | | 6/30/09 | | | 3/31/09 | | | 12/31/08 | |
| Net income | | $ | 281 | | | $ | 236 | | | $ | 1,535 | | | $ | 1,201 | | | $ | 799 | | | $ | 1,699 | |
| Average stockholders’ equity | | $ | 104,636 | | | $ | 103,867 | | | $ | 90,733 | | | $ | 89,805 | | | $ | 90,899 | | | $ | 81,088 | |
| Less: Average goodwill and other intangible assets | | | 17,020 | | | | 17,039 | | | | 17,058 | | | | 17,078 | | | | 17,101 | | | | 17,123 | |
| Average tangible stockholders’ equity | | $ | 87,616 | | | $ | 86,828 | | | $ | 73,675 | | | $ | 72,727 | | | $ | 73,798 | | | $ | 63,965 | |
| Return on average stockholders’ equity | | | 1.07 | % | | | 0.91 | % | | | 6.77 | % | | | 5.35 | % | | | 3.52 | % | | | 8.38 | % |
| Add: Average goodwill and other intangible assets | | | 0.21 | % | | | 0.18 | % | | | 1.56 | % | | | 1.26 | % | | | 0.81 | % | | | 2.24 | % |
| Return on average tangible stockholders’ equity | | | 1.28 | % | | | 1.09 | % | | | 8.33 | % | | | 6.61 | % | | | 4.33 | % | | | 10.62 | % |
“Tangible book value per common share” is a non-GAAP financial measure and represents tangible stockholders’ equity (or tangible book value) calculated on a per common share basis. The Corporation believes that a disclosure of tangible book value per common share may be helpful for those investors who seek to evaluate the Corporation’s book value per common share without giving effect to goodwill and other intangible assets. The following table presents a reconciliation of total book value per common share to tangible book value per common share as of the dates presented:
| (dollars in thousands) | | | | | (Restated) | | | | | | | | | | | | | |
| At quarter ended: | | 3/31/10 | | | 12/31/09 | | | 9/30/09 | | | 6/30/09 | | | 3/31/09 | | | 12/31/08 | |
| Common shares outstanding | | | 14,574,832 | | | | 14,572,029 | | | | 13,000,601 | | | | 13,000,601 | | | | 12,991,312 | | | | 12,991,312 | |
| Stockholders’ equity | | $ | 104,603 | | | $ | 101,749 | | | $ | 92,227 | | | $ | 89,458 | | | $ | 89,429 | | | $ | 81,713 | |
| Less: Preferred stock | | | 9,639 | | | | 9,619 | | | | 9,599 | | | | 9,578 | | | | 9,557 | | | | - | |
| Less: Goodwill and other intangible assets | | | 17,009 | | | | 17,028 | | | | 17,047 | | | | 17,066 | | | | 17,087 | | | | 17,110 | |
| Tangible common stockholders’ equity | | $ | 77,955 | | | $ | 75,102 | | | $ | 65,581 | | | $ | 2,814 | | | $ | 62,785 | | | $ | 4,603 | |
| Book value per common share | | $ | 6.52 | | | $ | 6.32 | | | $ | 6.36 | | | $ | 6.14 | | | $ | 6.15 | | | $ | 6.29 | |
| Less: Goodwill and other intangible assets | | | 1.17 | | | | 1.17 | | | | 1.32 | | | | 1.31 | | | | 1.32 | | | | 1.32 | |
| Tangible book value per common share | | $ | 5.35 | | | $ | 5.15 | | | $ | 5.04 | | | $ | 4.83 | | | $ | 4.83 | | | $ | 4.97 | |
"Tangible common stockholders' equity/tangible assets" is a non-GAAP financial measure and is defined as tangible common stockholders' equity as a percentage of total assets minus goodwill and other intangible assets. This measure may be important to investors that are interested in analyzing the financial condition of the Corporation without consideration of intangible assets, inasmuch as tangible common stockholders' equity and tangible assets both back out goodwill and other intangible assets. The following table presents a reconciliation of total assets to tangible assets and then presents a reconciliation of total stockholders' equity/total assets to tangible common stockholders' equity/tangible assets as of the dates presented:
| (dollars in thousands) | | | | | (Restated) | | | | | | | | | | | | | |
| At quarter ended: | | 3/31/10 | | | 12/31/09 | | | 9/30/09 | | | 6/30/09 | | | 3/31/09 | | | 12/31/08 | |
| Total assets | | $ | 1,187,655 | | | $ | 1,195,488 | | | $ | 1,349,516 | | | $ | 1,341,603 | | | $ | 1,121,013 | | | $ | 1,023,293 | |
| Less: Goodwill and other intangible assets | | | 17,009 | | | | 17,028 | | | | 17,047 | | | | 17,066 | | | | 17,087 | | | | 17,110 | |
| Tangible assets | | $ | 1,170,646 | | | $ | 1,178,460 | | | $ | 1,332,469 | | | $ | 1,324,537 | | | $ | 1,103,926 | | | $ | 1,006,183 | |
| Total stockholders' equity / total assets | | | 8.81 | % | | | 8.51 | % | | | 6.83 | % | | | 6.67 | % | | | 7.98 | % | | | 7.99 | % |
| Tangible common stockholders' equity/tangible assets | | | 6.66 | % | | | 6.37 | % | | | 4.92 | % | | | 4.74 | % | | | 5.69 | % | | | 6.42 | % |
Total non-interest income is presented in the table below including and excluding net securities gains (losses). We believe that many investors desire to evaluate non-interest income without regard for securities transactions. The following table presents a reconciliation of total non-interest income with total non-interest income excluding the impact of securities sales transactions.
| (dollars in thousands) | | | | | (Restated) | | | | | | | | | | | | | |
| For the quarter ended: | | 3/31/10 | | | 12/31/09 | | | 9/30/09 | | | 6/30/09 | | | 3/31/09 | | | 12/31/08 | |
| Non-interest income | | $ | (2,449 | ) | | $ | (340 | ) | | $ | 311 | | | $ | 2,551 | | | $ | 1,384 | | | $ | 615 | |
| Net securities gains (losses) | | | (3,344 | ) | | | (1,308 | ) | | | (511 | ) | | | 1,710 | | | | 600 | | | | (256 | ) |
| Non-interest income, excluding net securities gains (losses) | | $ | 895 | | | $ | 968 | | | $ | 822 | | | $ | 841 | | | $ | 784 | | | $ | 871 | |
“Efficiency ratio” is a non-GAAP financial measure and is defined as non-interest expense as a percentage of net interest income on a tax equivalent basis plus non-interest income, excluding net securities gains (losses), calculated as follows:
| (dollars in thousands) | | | | | (Restated) | | | | | | | | | | | | | |
| For the quarter ended: | | 3/31/10 | | | 12/31/09 | | | 9/30/09 | | | 6/30/09 | | | 3/31/09 | | | 12/31/08 | |
| Non-interest expense | | $ | 6,392 | | | $ | 5,238 | | | $ | 5,186 | | | $ | 7,314 | | | $ | 5,319 | | | $ | 4,754 | |
| Net interest income (tax equivalent basis) | | $ | 8,569 | | | $ | 8,129 | | | $ | 7,536 | | | $ | 6,753 | | | $ | 6,556 | | | $ | 7,086 | |
| Non-interest income, excluding net securities gains (losses) | | | 895 | | | | 968 | | | | 822 | | | | 841 | | | | 784 | | | | 871 | |
| Total | | $ | 9,464 | | | $ | 9,097 | | | $ | 8,358 | | | $ | 7,594 | | | $ | ,340 | | | $ | 7,957 | |
| Efficiency ratio | | | 67.5 | % | | | 57.6 | % | | | 62.0 | % | | | 96.3 | % | | | 72.5 | % | | | 59.7 | % |
The efficiency ratio of 67.5% for the first quarter of 2010 was impacted by the repurchase agreement termination fee. Without this unusual item, the efficiency ratio for the first quarter of 2010 would have been 61.2%.
About Center Bancorp
Center Bancorp, Inc. is a bank holding company which operates Union Center National Bank, its main subsidiary. Chartered in 1923, Union Center National Bank is one of the oldest national banks headquartered in the state of New Jersey and currently the largest commercial bank headquartered in Union County. Its primary market niche is its commercial banking business. The Bank focuses its lending activities on commercial lending to small and medium sized businesses, real estate developers and high net worth individuals.
The Bank, through its Private Banking Division which includes its wholly owned subsidiary, Center Financial Group LLC, provides financial services including brokerage services, insurance and annuities, mutual funds, financial planning, estate and tax planning, trust, elder care and benefit plan administration.
The Bank currently operates 13 banking locations in Union and Morris counties in New Jersey. Banking centers are located in Union Township (6 locations), Berkeley Heights, Boonton/Mountain Lakes, Madison, Millburn/Vauxhall, Morristown, Springfield, and Summit, New Jersey. The Bank also operates remote ATM locations in the Chatham and Madison New Jersey Transit train stations, and the Boys and Girls Club of Union.
While the Bank’s primary market area is comprised of Morris and Union Counties, New Jersey, the Corporation has expanded to northern and central New Jersey. At March 31, 2010, the Corporation had total assets of $1.2 billion, total deposit funding sources, which includes overnight repurchase agreements, of $832.7 million and stockholders’ equity of $104.6 million. For further information regarding Center Bancorp, Inc., visit our web site at http://www.centerbancorp.com or call (800)-862-3683. For information regarding Union Center National Bank, visit our web site at http://www.ucnb.com.
Forward-Looking Statements
All non-historical statements in this press release (including statements regarding future performance, future results, future market and economic conditions, profitable growth, economic recovery and future core deposits) constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements may use such forward-looking terminology such as "expect," "look," "believe," "plan," "anticipate," "may," "will" or similar statements or variations of such terms or otherwise express views concerning trends and the future. Such forward-looking statements involve certain risks and uncertainties. These include, but are not limited to, the direction of interest rates, continued levels of loan quality and origination volume, continued relationships with major customers including sources for loans, as well as the effects of international, national, regional and local economic conditions and legal and regulatory barriers and structure, including those relating to the current global financial crisis and the deregulation of the financial services industry, and other risks cited in the Corporation’s most recent Annual Report on Form 10-K and other reports filed by the Corporation with the Securities and Exchange Commission. Actual results may differ materially from such forward-looking statements. Center Bancorp, Inc. assumes no obligation for updating any such forward-looking statement at any time.
Investor Inquiries:
Anthony C. Weagley
President & Chief Executive Officer
(908) 206-2886
Joseph Gangemi
Investor Relations
(908) 206-2863
CENTER BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CONDITION
(in thousands, except for share data) | | March 31, 2010 | | | December 31, 2009 | |
| | | (unaudited) | | | (restated) | |
| ASSETS | | | | | | |
| Cash and due from banks | | $ | 66,863 | | | $ | 89,168 | |
| Investment securities available-for-sale | | | 322,309 | | | | 298,124 | |
| Loans | | | 713,906 | | | | 719,606 | |
| Less: Allowance for loan losses | | | 8,139 | | | | 8,711 | |
| Net loans | | | 705,767 | | | | 710,895 | |
| Restricted investment in bank stocks, at cost | | | 10,551 | | | | 10,672 | |
| Premises and equipment, net | | | 17,635 | | | | 17,860 | |
| Accrued interest receivable | | | 4,068 | | | | 4,033 | |
| Bank-owned life insurance | | | 26,568 | | | | 26,304 | |
| Goodwill | | | 16,804 | | | | 16,804 | |
| Prepaid FDIC Assessments | | | 5,000 | | | | 5,374 | |
| Other assets | | | 12,090 | | | | 16,254 | |
| Total assets | | $ | 1,187,655 | | | $ | 1,195,488 | |
| LIABILITIES | | | | | | | | |
| Deposits: | | | | | | | | |
| Non-interest bearing | | $ | 137,422 | | | $ | 130,518 | |
| Interest-bearing: | | | | | | | | |
| Time deposits $100 and over | | | 119,638 | | | | 144,802 | |
| Interest-bearing transaction, savings and time deposits $100 and less | | | 535,450 | | | | 538,385 | |
| Total deposits | | | 792,510 | | | | 813,705 | |
| Short-term borrowings | | | 40,217 | | | | 46,109 | |
| Long-term borrowings | | | 213,105 | | | | 223,144 | |
| Subordinated debentures | | | 5,155 | | | | 5,155 | |
| Accounts payable and accrued liabilities | | | 4,441 | | | | 5,626 | |
| Due to brokers for investment securities | | | 27,624 | | | | — | |
| Total liabilities | | | 1,083,052 | | | | 1,093,739 | |
| STOCKHOLDERS’ EQUITY | | | | | | | | |
| Preferred stock, $1,000 liquidation value per share, authorized $5,000,000 shares; issued 10,000 shares at March 31, 2010 and December 31, 2009 | | | 9,639 | | | | 9,619 | |
| Common stock, no par value, authorized 20,000,000 shares; issued 16,762,412 shares at March 31, 2010 and December 31, 2009; outstanding 14,574,872 and 14,572,029 shares at March 31, 2010 and December 31, 2009, respectively | | | 97,908 | | | | 97,908 | |
| Additional paid in capital | | | 5,677 | | | | 5,650 | |
| Retained earnings | | | 16,766 | | | | 17,068 | |
| Treasury stock, at cost (2,187,540 and 2,190,383 common shares at March 31, 2010 and December 31, 2009, respectively) | | | (17,698 | ) | | | (17,720 | ) |
| Accumulated other comprehensive loss | | | (7,689 | ) | | | (10,776 | ) |
| Total stockholders’ equity | | | 104,603 | | | | 101,749 | |
| Total liabilities and stockholders’ equity | | $ | 1,187,655 | | | $ | 1,195,488 | |
CENTER BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
| | | Three Months Ended March 31, |
| (in thousands, except per share data) | | 2010 | | | 2009 |
| Interest income | | | |
| Interest and fees on loans | | $ | 9,368 | | | $ | 9,102 | |
| Interest and dividends on investment securities: | | | | | | | | |
| Taxable interest income | | | 3,009 | | | | 2,370 | |
| Non-taxable interest income | | | 117 | | | | 343 | |
| Dividends | | | 178 | | | | 117 | |
Interest on federal funds sold and securities purchased under agreement to resell | | | — | | | | 10 | |
| Total interest income | | | 12,672 | | | | 11,942 | |
| Interest expense | | | | | | | | |
| Interest on certificates of deposit $100 or more | | | 414 | | | | 778 | |
| Interest on other deposits | | | 1,264 | | | | 2,277 | |
| Interest on borrowings | | | 2,485 | | | | 2,508 | |
| Total interest expense | | | 4,163 | | | | 5,563 | |
| Net interest income | | | 8,509 | | | | 6,379 | |
| Provision for loan losses | | | 940 | | | | 1,421 | |
| Net interest income after provision for loan losses | | | 7,569 | | | | 4,958 | |
| Non-interest income | | | | | | | | |
| Service charges, commissions and fees | | | 430 | | | | 449 | |
| Annuity and insurance | | | 93 | | | | 40 | |
| Bank-owned life insurance | | | 264 | | | | 218 | |
| Other | | | 108 | | | | 77 | |
| Other-than-temporary impairment losses | | | (7,767 | ) | | | (140 | ) |
Less: portion of losses recognized in other comprehensive income (before taxes) | | | 3,377 | | | | — | |
| Net other-than-temporary impairment losses | | | (4,390 | ) | | | (140 | ) |
| Net gains on sale of investment securities | | | 1,046 | | | | 740 | |
| Net investment securities gains (losses) | | | (3,344 | ) | | | 600 | |
| Total non-interest income (charges) | | | (2,449 | ) | | | 1,384 | |
| Non-interest expense | | | | | | | | |
| Salaries and employee benefits | | | 2,657 | | | | 2,393 | |
| Occupancy, net | | | 670 | | | | 797 | |
| Premises and equipment | | | 219 | | | | 321 | |
| FDIC insurance | | | 618 | | | | 365 | |
| Professional and consulting | | | 274 | | | | 212 | |
| Stationery and printing | | | 84 | | | | 70 | |
| Marketing and advertising | | | 93 | | | | 130 | |
| Computer expense | | | 340 | | | | 214 | |
| OREO expense, net | | | — | | | | 33 | |
| Repurchase agreement termination fee | | | 594 | | | | — | |
| Other | | | 843 | | | | 784 | |
| Total non-interest expense | | | 6,392 | | | | 5,319 | |
| Income (loss) before income taxes | | | (1,272 | ) | | | 1,023 | |
| Income tax expense (benefit ) | | | (1,553 | ) | | | 224 | |
| Net income | | | 281 | | | | 799 | |
| Preferred stock dividends and accretion | | | 145 | | | | 129 | |
| Net income available to common stockholders | | $ | 136 | | | $ | 670 | |
Earnings per common share: | | | | | | | | |
| Basic | | $ | 0.01 | | | $ | 0.05 | |
| Diluted | | $ | 0.01 | | | $ | 0.05 | |
Weighted average common shares outstanding: | | | | | | | | |
| Basic | | | 14,574,832 | | | | 12,991,312 | |
| Diluted | | | 14,579,871 | | | | 12,993,185 | |
CENTER BANCORP, INC. AND SUBSIDIARIESSELECTED QUARTERLY FINANCIAL DATA AND STATISTICAL INFORMATION
(unaudited)
(in thousands, except for share data)
| | | Three Months Ended | |
| | | 3/31/2010 | | | 12/31/2009 | | | 3/31/2009 | |
| Statements of Income Data | | | | | (restated) | | | | |
| Interest income | | $ | 12,672 | | | $ | 12,971 | | | $ | 11,942 | |
| Interest expense | | | 4,163 | | | | 4,953 | | | | 5,563 | |
| Net interest income | | | 8,509 | | | | 8,018 | | | | 6,379 | |
| Provision for loan losses | | | 940 | | | | 2,740 | | | | 1,421 | |
| Net interest income after provision for loan losses | | | 7,569 | | | | 5,278 | | | | 4,958 | |
| Non-interest income (charges) | | | (2,449 | ) | | | (340 | ) | | | 1,384 | |
| Non-interest expense | | | 6,392 | | | | 5,238 | | | | 5,319 | |
| Income (loss) before income taxes | | | (1,272 | ) | | | (300 | ) | | | 1,023 | |
| Income tax expense (benefit) | | | (1,553 | ) | | | (536 | ) | | | 224 | |
| Net income | | $ | 281 | | | $ | 236 | | | $ | 799 | |
| Net income available to common stockholders | | $ | 136 | | | $ | 94 | | | $ | 670 | |
| Earnings per Common Share | | | | | | | | | | | | |
| Basic | | $ | 0.01 | | | $ | 0.01 | | | $ | 0.05 | |
| Diluted | | | 0.01 | | | | 0.01 | | | | 0.05 | |
| Statements of Condition Data (Period End) | | | | | | | | | | | | |
| Investments | | $ | 322,309 | | | $ | 298,124 | | | $ | 266,032 | |
| Total loans | | | 713,906 | | | | 719,606 | | | | 678,017 | |
| Total assets | | | 1,187,655 | | | | 1,195,488 | | | | 1,121,013 | |
| Deposits | | | 792,510 | | | | 813,705 | | | | 768,379 | |
| Borrowings | | | 258,477 | | | | 274,408 | | | | 255,365 | |
| Stockholders' equity | | | 104,603 | | | | 101,749 | | | | 89,429 | |
| Dividend Data on Common Shares | | | | | | | | | | | | |
| Cash dividends | | $ | 437 | | | $ | 437 | | | $ | 1,169 | |
| Dividend payout ratio | | | 321.32 | % | | | 464.89 | % | | | 174.48 | % |
| Cash dividends per share | | $ | 0.03 | | | $ | 0.03 | | | $ | 0.09 | |
| Weighted Average Common Shares Outstanding | | | | | | | | | | | | |
| Basic | | | 14,574,832 | | | | 14,531,387 | | | | 12,991,312 | |
| Diluted | | | 14,579,871 | | | | 14,534,255 | | | | 12,993,185 | |
| Operating Ratios | | | | | | | | | | | | |
| Return on average assets | | | 0.09 | % | | | 0.07 | % | | | 0.30 | % |
| Average equity to average assets | | | 8.88 | % | | | 8.03 | % | | | 8.58 | % |
| Return on average equity | | | 1.07 | % | | | 0.91 | % | | | 3.52 | % |
| Return on average tangible equity | | | 1.28 | % | | | 1.09 | % | | | 4.33 | % |
| Book value per common share (period end) | | $ | 6.52 | | | $ | 6.32 | | | $ | 6.15 | |
| Tangible book value per common share (period end) | | $ | 5.35 | | | $ | 5.15 | | | $ | 4.83 | |
| Non-Financial Information (Period End) | | | | | | | | | | | | |
| Common stockholders of record | | | 598 | | | | 605 | | | | 633 | |
| Full-time equivalent staff | | | 162 | | | | 160 | | | | 160 | |
