UNION, N.J., April 24, 2009 (GLOBE NEWSWIRE) -- Center Bancorp, Inc. (Nasdaq:CNBC), parent company of Union Center National Bank (UCNB), today reported operating results for the first quarter ended March 31, 2009. Net income amounted to $799,000, or $0.05 per fully diluted common share, for the quarter ended March 31, 2009, as compared with earnings of $1.2 million, or $0.09 per fully diluted common share, for the quarter ended March 31, 2008.
President & CEO's Remarks
"I am pleased to report that the Company's core earnings performance continues to remain strong. During the first quarter, the Corporation recorded an increase in its loan loss provision of $1.3 million coupled with higher FDIC insurance assessments of $345,000 due primarily to changes in the premium rates. Taken together, these increases reduced first quarter earnings by approximately $0.08 per fully diluted common share," indicated Anthony C. Weagley, President & CEO.
He further noted that "Our focus on operating the Corporation from a superior balance sheet perspective is a principal goal for CNBC. While we continue to maintain a strong balance sheet, the economic climate continues to deteriorate. In order to continue to maintain this strong position and build value for the shareholders, we believe we must retain a larger percentage of retained earnings in capital. Therefore, the Board of Directors of Center Bancorp, Inc. today voted unanimously to reduce its current quarterly common stock dividend from $0.09 per share to $0.03 per share, beginning with the second quarter dividend declaration. Our Board Chairman Alexander A. Bol indicated "the Corporation is aware of the importance of the cash dividend to shareholders and remains committed to continuing the long history of making these payments; however, in today's economic environment, the Board considered it prudent to reduce the current rate of the payout."
Mr. Weagley further remarked, "I believe that it is important for our shareholders to recognize that our actions today in reducing the dividend and preserving capital are not taken from a position of weakness, but rather from a position of strength. At present, our Tier 1 ratio is 8.42%, with tangible common equity of $62.8 million, and we will continue to increase our loan loss reserves, as appropriate, as we discussed with shareholders in a press release earlier this month. With $6.8 million in allowance for credit losses at March 31, 2009, we believe our loan loss reserve, measured across all our businesses, confirms the strength of our balance sheet. The projected results for 2009 are net retention of capital of $2.3 million and, with the reduction in the dividend, an increase in tangible book value of $0.18 per share."
Key items for the quarter include:
* Net income of $799,000 for the first quarter of 2009 compared with net income of $1.7 million for the fourth quarter of 2008 and $1.2 million for the first quarter of 2008. * EPS of $0.05 per fully diluted common share compared with $0.13 per fully diluted share for the fourth quarter of 2008 and $0.09 per fully diluted common share for the comparable first quarter period of 2008. 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. * Higher loan loss provision of $1.3 million over the first quarter of 2008, which covers a $900,000 charge-off in connection with a $4.0 million commercial real estate construction project of industrial warehouses, in addition to an increase in the level of the allowance for loan losses. * Center Bancorp, Inc. issued $10 million in nonvoting senior preferred stock to the U.S. Department of Treasury under the Capital Purchase Program. As part of the transaction, the Corporation also issued warrants to the Treasury to purchase 173,410 shares of common stock of the Corporation at an exercise price of $8.65 per share. * Overall credit quality in the Bank's portfolio remains high, even though the economic weakness has impacted several potential problem loans. Non-performing assets amounted to 0.81% of total assets at March 31, 2009 compared to 0.46% at December 31, 2008 and 0.17% at March 31, 2008. * Strong Tier 1 capital ratio was 8.42% at March 31, 2009, 7.71% at December 31, 2008, and 8.17% at March 31, 2008. * An improvement in annualized net interest margin by 7 basis points for the first quarter of 2009 to 2.81%, compared to 2.74% for the comparable quarter of 2008. On a linked sequential quarter basis, net interest margin declined 20 basis points. * An increase in deposits to $768.4 million at March 31, 2009 from $659.5 million at December 31, 2008 and $622.9 million at March 31, 2008, reflecting inflows in core savings deposits and CDARS Reciprocal deposits, as customers seeking safety and liquidity became paramount in light of the financial crisis. * Book value per common share amounting to $6.15 at March 31, 2009 compared to $6.29 at December 31, 2008 and $6.51 at March 31, 2008. Tangible book value per common share was $4.83 at March 31, 2009 compared to $4.97 at December 31, 2008 and $5.20 at March 31, 2008. Selected financial ratios (annualized where applicable) As of or for the quarter ended: 3/31/09 12/31/08 9/30/08 6/30/08 3/31/08 12/31/07 ------------ ------- -------- ------- ------- ------- -------- Return on average assets 0.30% 0.66% 0.60% 0.57% 0.50% 0.22% Return on average equity 3.52% 8.38% 7.55% 6.69% 5.60% 2.44% Net interest margin (tax equivalent 2.81% 3.01% 3.09% 3.00% 2.74% 2.48% basis) Loan/Deposit ratio 88.24% 102.53% 97.64% 101.61% 90.71% 78.91% Stockholders' equity/total assets 7.98% 7.99% 7.73% 8.15% 8.58% 8.38% Efficiency ratio 72.5% 59.7% 55.4% 67.7% 70.9% 92.7% Book value per common share $6.15 $6.29 $6.21 $6.18 $6.51 $6.48 Return on average tangible stockholders' equity 4.33% 10.62% 9.60% 8.41% 6.98% 3.04% Tangible common stockholders' 5.69% 6.42% 6.19% 6.52% 6.98% 6.80% equity/ tangible assets Tangible book value per common share $4.83 $4.97 $4.89 $4.86 $5.20 $5.17
Capital and Liquidity
Center remained well capitalized with excellent liquidity in the first quarter of 2009. Total stockholders' equity amounted to $89.4 million, or 7.98% of total assets, at March 31, 2009. Tangible common stockholders' equity was $62.8 million, or 5.69% of tangible assets. Book value per common share was $6.15 at March 31, 2009, compared to $6.51 at March 31, 2008. Tangible book value per common share was $4.83 at March 31, 2009 compared to $5.20 at March 31, 2008.
On January 12, 2009, the Corporation issued $10 million in nonvoting senior preferred stock to the U.S. Department of Treasury under the Capital Purchase Program. As part of the transaction, the Corporation also issued warrants to the Treasury to purchase 173,410 shares of common stock of the Corporation at an exercise price of $8.65 per share. As previously announced, the Corporation's voluntary participation in the Capital Purchase Program amounted to approximately 50 percent of what the Corporation had qualified to issue under the Treasury program. The Corporation believes that its participation in this program will strengthen its current well-capitalized position. The funding is being used to support future loan growth.
During the three months ended March 31, 2009, the Corporation did not purchase any shares of its common stock. At March 31, 2009, there were 652,868 shares available for repurchase under the Corporation's stock buyback program.
At March 31, 2009, the Corporation's Tier 1 Capital Leverage ratio was 8.42%, the Corporation's total Tier 1 Risk Based Capital ratio was 10.78% and the Corporation's Total Risk Based Capital ratio was 11.61%. Total Tier 1 capital increased to approximately $87.7 million at March 31, 2009 from $78.2 million at December 31, 2008, reflecting the Corporation's participation in the TARP Capital Purchase Program. At March 31, 2009, the Corporation's capital ratios continued to exceed each of the minimum Federal requirements for a bank holding company, and Union Center National Bank's capital ratios continued to exceed each of the minimum levels required for classification as a "well capitalized institution" under the Federal Deposit Insurance Corporation Improvement Act.
Asset Quality
At March 31, 2009, non-performing assets totaled $9.1 million, or 0.81% of total assets, as compared with $4.7 million, or 0.46%, at December 31, 2008 and $1.7 million, or 0.17%, at March 31, 2008. The increase in non-accrual loans from December 31, 2008 was primarily attributable to the addition of a $4.0 million commercial real estate construction project of industrial warehouses.
"While overall credit quality in the Bank's portfolio remains high, continued economic weakness has impacted several problem loans in the portfolio which have been previously disclosed. With respect to the industrial warehouse project, we are currently working with the borrowers and the participating bank that is involved with the project, in an effort to sell or lease the remaining industrial warehouse units. Proceeds from the current units under contract, as well as the remaining units, will be used to make further principal reductions to our loan," remarked Mr. Weagley.
The increase in the OREO balance in the first quarter was related to the construction costs incurred in completing the residential condominium project that was taken into OREO during the fourth quarter of 2008. The Corporation is near completion of that project and has elected to begin renting the units.
At March 31, 2009, the total allowance for loan losses amounted to approximately $6.8 million, or 1.00% of total loans. The allowance for loan losses as a percent of total non-performing loans amounted to 145.4% at March 31, 2009 as compared to 809.1% at December 31, 2008 and 431.7% at March 31, 2008.
Selected credit quality ratios (unaudited)
(Dollars in thousands)
As of or for the quarter
ended: 3/31/09 12/31/08 9/30/08 6/30/08
------------------------ ------- -------- ------- -------
Non-accrual loans $4,566 $541 $541 $265
Troubled debt
restructuring 91 93 95 97
Past due loans 90 days or
more and still accruing
interest 0 139 18 0
----------------------------------------------------------------------
Total non performing
loans 4,657 773 654 362
Other real estate owned
("OREO") 4,426 3,949 0 0
Repossessed assets other
than real-estate 0 0 0 0
----------------------------------------------------------------------
Total non performing
assets $9,083 $4,722 $654 $362
----------------------------------------------------------------------
Non performing assets as
a percentage of total
assets 0.81% 0.46% 0.06% 0.04%
Non performing loans as
a percentage of total
loans 0.69% 0.11% 0.10% 0.06%
Net charge-offs $906 $251 $45 $106
Net charge-offs as a
percentage of average
loans for the period
(annualized) 0.53% 0.15% 0.03% 0.07%
Allowance for loan losses
as a percentage of
period end loans 1.00% 0.92% 0.92% 0.90%
Allowance for loan losses
as a percentage of
non-performing loans 145.4% 809.1% 929.7% 1,563.5%
----------------------------------------------------------------------
Total Assets $1,121,013 $1,023,293 $1,042,778 $986,436
Total Loans 678,017 676,203 661,157 631,221
Average loans for the
quarter 679,953 670,212 651,766 601,655
Allowance for loan
losses 6,769 6,254 6,080 5,660
----------------------------------------------------------------------
(Dollars in thousands)
As of or for the quarter ended: 3/31/08 12/31/07
------------------------------- ------- --------
Non-accrual loans $1,215 $3,907
Troubled debt restructuring 0 0
Past due loans 90 days or more and still
accruing interest 0 0
----------------------------------------------------------------------
Total non performing loans 1,215 3,907
Other real estate owned ("OREO") 478 501
Repossessed assets other than real-estate 0 0
----------------------------------------------------------------------
Total non performing assets $1,693 $4,408
----------------------------------------------------------------------
Non performing assets as a percentage of
total assets 0.17% 0.43%
Non performing loans as a percentage of
total loans 0.22% 0.71%
Net charge-offs $68 $8
Net charge-offs as a percentage of
average loans for the period (annualized) 0.05% 0.01%
Allowance for loan losses as a percentage
of period end loans 0.93% 0.94%
Allowance for loan losses as a percentage
of non-performing loans 431.7% 132.2%
----------------------------------------------------------------------
Total Assets $995,167 $1,017,645
Total Loans 565,025 551,669
Average loans for the quarter 565,654 552,521
Allowance for loan losses 5,245 5,163
----------------------------------------------------------------------
Net Interest Income and Margin
The Corporation recorded net interest income on a fully taxable equivalent basis of $6.6 million for the three months ended March 31, 2009 as compared to $6.1 million for the comparable quarter in 2008. Interest income declined by $671,000 while interest expense declined by $1.1 million from the same period last year. Compared to 2008, average interest earning assets increased by $41.3 million while the net interest spread and net interest margin improved by 27 basis points and 7 basis points, respectively, due primarily to reduced funding costs. On a linked quarter basis, the net interest spread and margin decreased by 13 basis points and 20 basis points, respectively.
Quarterly Condensed Consolidated Income Statements (unaudited) (Dollars in thousands, except per share data) For the quarter ended: 3/31/09 12/31/08 9/30/08 6/30/08 ---------------------- ------- -------- ------- ------- Net interest income $ 6,379 $ 6,823 $ 6,860 $ 6,429 Provision for loan losses 1,421 425 465 521 --------------------------------------------------------------------- Net interest income after provision for loan losses 4,958 6,398 6,395 5,908 Other income 1,384 615 47 1,116 Other expense (5,319) (4,754) (4,578) (5,188) Income (loss) before income tax 1,023 2,259 1,864 1,836 Income tax expense (benefit) 224 560 346 428 Net income 799 1,699 1,518 1,408 Net income available to common stockholders $ 670 $ 1,699 $ 1,518 $ 1,408 Earnings per common share: Basic $0.05 $0.13 $0.12 $0.11 Diluted $0.05 $0.13 $0.12 $0.11 Weighted average common shares outstanding: Basic 12,991,312 12,989,304 12,990,441 13,070,868 Diluted 12,993,185 12,995,134 13,003,954 13,083,558 (Dollars in thousands, except per share data) For the quarter ended: 3/31/08 12/31/07 ---------------------- ------- -------- Net interest income $ 5,687 $ 5,172 Provision for loan losses 150 150 --------------------------------------------------------------------- Net interest income after provision for loan losses 5,537 5,022 Other income 866 874 Other expense (4,953) (6,034) Income (loss) before income tax 1,450 (138) Income tax expense (benefit) 233 (670) Net income 1,217 532 Net income available to common stockholders $ 1,217 $ 532 Earnings per common share: Basic $0.09 $0.04 Diluted $0.09 $0.04 Weighted average common shares outstanding: Basic 13,144,747 13,441,082 Diluted 13,163,586 13,469,764
Other Income
Total other income increased $518,000 for the first quarter of 2009 compared with the comparable quarter of 2008, primarily as a result of net securities gains. During the first quarter of 2009, the Corporation recorded net securities gains of $600,000, which is net of a $140,000 impairment charge recognized on its Lehman bond holding. Excluding net securities gains, the Corporation recorded other income of $784,000 in the three months ended March 31, 2009 compared to $866,000 in the three months ended March 31, 2008, a decrease of $82,000 or 9.5%. This decrease was due primarily to lower levels of service charges offset in part by higher commissions from sales of mutual funds and annuities.
Quarterly Consolidated Non-Interest Income (unaudited) (Dollars in thousands) For the quarter ended: 3/31/09 12/31/08 9/30/08 6/30/08 3/31/08 12/31/07 -------- ------- -------- ------- ------- ------- -------- Service charges on deposit accounts $ 343 $ 376 $ 360 $ 383 $ 404 $ 399 Commissions from mortgage broker activities 2 7 6 17 12 16 Loan related fees (LOC) 30 53 46 37 41 31 Commissions from sale of mutual funds and annuities 40 22 35 38 17 44 Debit card and ATM fees 106 113 124 130 125 132 Bank owned life insurance 218 247 507 228 221 217 Net securities gains (losses) 600 (256) (1,075) 225 -- (43) Other service charges and fees 45 53 44 58 46 78 --------------------------------------------------------------------- Total other income $ 1,384 $ 615 $ 47 $ 1,116 $ 866 $ 874 ---------------------------------------------------------------------
Other Expense
Other expense for the first quarter of 2009 totaled $5.3 million, an increase of $366,000, or 7.4%, from the comparable period in 2008. Salary and benefit expense increased by $41,000, or 1.7%, to $2.4 million. This increase was due primarily to increased expense resulting from changes in the asset valuation and expected rate of return on the Corporation's defined pension plan, which was frozen in 2007. This increase was partially offset by reductions primarily attributable to reductions in staff and elimination of certain other benefit plans during the middle to later part of 2008. Full-time equivalent staffing levels were 160 at March 31, 2009 compared to 167 at March 31, 2008. On December 16, 2006, the FDIC adopted a final rule increasing risk-based assessment rates uniformly by 7 basis points, on an annual basis, for the first quarter of 2009. As a result of these changes coupled with one-time assessment credits recognized in 2008, FDIC insurance assessment amounted to $365,000 in the first quarter of 2009, an increase of $345,000 or 1,725%, over the comparable period in 2008.
The efficiency ratio for the first quarter of 2009 was 72.5% as compared to 70.9% in the first quarter of 2008. This increase was due primarily to the increase in FDIC insurance assessments.
Quarterly Consolidated Non-Interest Expense (unaudited) (Dollars in thousands) For the quarter ended: 3/31/09 12/31/08 9/30/08 6/30/08 3/31/08 12/31/07 -------- ------- -------- ------- ------- ------- -------- Employee salaries and wages $ 1,861 $ 1,777 $ 1,752 $ 2,013 $ 1,896 $ 1,932 Employee stock option expense 22 23 23 36 45 46 Health insurance and other employee benefits 309 (246) (32) 285 218 237 Payroll taxes 194 139 167 182 179 124 Other employee related expenses 7 17 9 8 14 14 --------------------------------------------------------------------- Total salaries and employee benefits $ 2,393 $ 1,710 $ 1,919 $ 2,524 $ 2,352 $ 2,353 Occupancy, net 797 983 803 734 759 799 Premises and equipment 321 362 352 356 366 437 Professional and consulting 212 152 189 190 172 690 Stationary and printing 70 97 87 118 95 104 FDIC Insurance 365 149 28 20 20 20 Marketing and advertising 130 144 145 188 160 179 Computer expense 214 229 238 226 141 150 Bank regulatory related expenses 60 55 54 55 58 58 Postage and delivery 46 69 67 65 78 57 ATM related expenses 61 59 61 62 60 59 Amortization of core deposit intangible 22 23 23 24 25 25 Other expenses 628 722 612 626 667 1,103 --------------------------------------------------------------------- Total other expense $ 5,319 $ 4,754 $ 4,578 $ 5,188 $ 4,953 $ 6,034 ---------------------------------------------------------------------
Key Balance Sheet Changes at March 31, 2009
* The Corporation had total loans of $678.0 million at March 31, 2009, a $1.8 million, or 0.3%, increase from December 31, 2008 and a $113.0 million, or 20.0%, increase from the same period last year. * Loan growth continued during the quarter in the Corporation's commercial related segment of the portfolio. Total gross loans booked for the quarter included $32.0 million of new loans and $15.2 million in advances principally offset , exclusive of scheduled payments, by payoffs and extraordinary unscheduled principal payments of $37.9 million * At March 31, 2009, the Corporation had $26.6 million in overall undispersed loan commitments, which are expected to fund over the next 90 days. * Loan originations and pipelines for the quarter increased in the commercial sector, primarily in the commercial real estate segment of the loan portfolio. Loan Mix: (unaudited) (Dollars in thousands) At quarter ended: 3/31/09 12/31/08 9/30/08 6/30/08 3/31/08 12/31/07 ---------- ------- -------- ------- ------- ------- -------- Real estate loans Residential $229,903 $240,316 $249,258 $255,817 $260,237 $265,597 Commercial 256,885 256,527 246,089 224,990 163,664 137,585 Construction 41,242 42,075 47,722 50,638 48,494 51,367 --------------------------------------------------------------------- Total real estate loans 528,030 538,918 543,069 531,445 472,395 454,549 Commercial loans 148,444 135,232 116,891 98,845 91,492 95,978 Consumer and other loans 928 1,481 672 339 592 563 --------------------------------------------------------------------- Total loans before unearned fees and costs 677,402 675,631 660,632 630,629 564,479 551,090 Unearned fees and costs, net 615 572 525 592 546 579 --------------------------------------------------------------------- Total loans $678,017 $676,203 $661,157 $631,221 $565,025 $551,669 ===================================================================== * Investment securities declined by $15.7 million at March 31, 2009 compared to March 31, 2008 but increased by $23.3 million when compared to December 31, 2008. * Deposits totaled $768.4 million at March 31, 2009, an increase of $108.8 million from December 31, 2008 and an increase of $145.5 million from March 31, 2008. * Total deposit funding sources, including overnight repurchase agreements (which agreements are part of the demand deposit base), amounted to $795.3 million at March 31, 2009, an increase of $105.7 million from December 31, 2008, which reflected inflows in core savings deposits and CDARS Reciprocal deposits, as customers seeking safety and more liquidity became paramount in light of the financial crisis. * Time certificates of deposit of $100,000 and over increased $62.9 million as compared to December 31, 2008 due primarily to an increase in CDARS Reciprocal deposits, which has become an attractive product for customers who are sensitive to obtaining full FDIC insurance for their time deposits. * The Corporation expects its deposit gathering efforts to remain strong, supported in part by the recent actions by the FDIC in temporarily raising the deposit insurance limits. The Corporation is a participant 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, 2009. * Borrowings totaled $255.4 million at March 31, 2009, reflecting a decrease of $18.2 million from December 31, 2008.
The following table reflects the Corporation's deposits for the periods specified.
Deposit Mix
(unaudited)
(Dollars in thousands)
At quarter
ended: 3/31/09 12/31/08 9/30/08 6/30/08 3/31/08 12/31/07
---------- ------- -------- ------- ------- ------- --------
Checking
accounts
Non interest
bearing $114,607 $113,319 $114,631 $110,891 $117,053 $111,422
Interest
bearing 132,682 139,349 129,070 124,469 125,152 155,406
Savings
deposits 137,197 66,359 61,623 63,918 68,028 86,341
Money market
accounts 114,363 111,308 140,533 147,202 170,742 196,601
Time Deposits 269,530 229,202 231,287 174,710 141,949 149,300
---------------------------------------------------------------------
Total Deposits $768,379 $659,537 $677,144 $621,190 $622,924 $699,070
=====================================================================
Additional Information for the First Quarter 2009
* Total assets of $1.1 billion at March 31, 2009, which positions the Corporation as one of the largest New Jersey headquartered financial institutions. * Substantial increase in FDIC insurance assessments of $216,000 on a linked sequential quarter basis and $345,000 over the first quarter of 2008 due primarily to changes in FDIC premium rates. * Efficiency ratio increased in the first quarter to 72.5% compared with 59.7% in the fourth quarter of 2008 and 70.9% in the first quarter in 2008, due primarily to the substantial increase in FDIC assessments. * Continued improvement in earning asset mix from the same quarter last year, as average loans increased by $114.3 million while average investment securities declined by $62.6 million * The Corporation intends to relocate its Summit Banking Center on May 29, 2009, to the new Promenade Building on Morris Avenue in Summit from its existing downtown facility. Quarterly Condensed Consolidated Balance Sheets (unaudited) (Dollars in thousands) At quarter ended: 3/31/09 12/31/08 9/30/08 6/30/08 ---------------- ------- -------- ------- ------- Cash and due from banks $ 90,634 $ 15,031 $ 15,952 $ 16,172 Fed funds and money market funds -- -- -- -- Investments 266,032 242,714 284,349 253,780 Loans 678,017 676,203 661,157 631,221 Allowance for loan losses (6,769) (6,254) (6,080) (5,660) Restricted investment in bank stocks, at cost 10,228 10,230 10,277 10,325 Premises and equipment, net 18,313 18,488 18,545 18,203 Goodwill 16,804 16,804 16,804 16,804 Core deposit intangible 283 306 328 350 Bank owned life insurance 23,156 22,938 22,690 22,710 Other real estate owned 4,426 3,949 -- -- Other assets 19,889 22,884 18,756 22,531 --------------------------------------------------------------------- TOTAL ASSETS $1,121,013 $1,023,293 $1,042,778 $986,436 --------------------------------------------------------------------- Deposits $ 768,379 $ 659,537 $ 677,144 $621,190 Borrowings 255,365 273,595 281,046 279,585 Other liabilities 7,840 8,448 3,964 5,268 Stockholders' equity 89,429 81,713 80,624 80,393 --------------------------------------------------------------------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $1,121,013 $1,023,293 $1,042,778 $986,436 --------------------------------------------------------------------- (Dollars in thousands) At quarter ended: 3/31/08 12/31/07 ----------------- ------- -------- Cash and due from banks $ 15,155 $ 20,541 Fed funds and money market funds 45,300 49,490 Investments 281,746 314,194 Loans 565,025 551,669 Allowance for loan losses (5,245) (5,163) Restricted investment in bank 10,036 8,467 stocks, at cost Premises and equipment, net 17,404 17,419 Goodwill 16,804 16,804 Core deposit intangible 375 400 Bank owned life insurance 22,483 22,261 Other real estate owned -- -- Other assets 26,084 21,563 --------------------------------------------------------------------- TOTAL ASSETS $995,167 $1,017,645 --------------------------------------------------------------------- Deposits $622,924 $ 699,070 Borrowings 279,024 223,264 Other liabilities 7,818 10,033 Stockholders' equity 85,401 85,278 --------------------------------------------------------------------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $995,167 $1,017,645 --------------------------------------------------------------------- Condensed Consolidated Average Balance Sheets (unaudited) (Dollars in thousands) For the quarter ended: 3/31/09 12/31/08 9/30/08 6/30/08 ---------------------- ------- -------- ------- ------- Investments, Fed funds, and other $ 253,445 $ 272,507 $ 273,337 $301,118 Loans 679,953 670,212 651,766 601,655 Allowance for loan losses (6,384) (6,235) (5,840) (5,404) All other assets 131,861 95,514 93,535 91,631 --------------------------------------------------------------------- TOTAL ASSETS $1,058,875 $1,031,998 $1,012,798 $989,000 --------------------------------------------------------------------- Deposits-interest bearing $ 588,599 $ 554,652 $ 521,459 $499,342 Deposits-non interest bearing 115,541 112,936 118,623 114,744 Borrowings 255,269 278,524 288,002 284,264 Other liabilities 8,567 4,798 4,321 6,508 Stockholders' equity 90,899 81,088 80,393 84,142 --------------------------------------------------------------------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $1,058,875 $1,031,998 $1,012,798 $989,000 --------------------------------------------------------------------- (Dollars in thousands) For the quarter ended: 3/31/08 12/31/07 ---------------------- ------- -------- Investments, Fed funds, and other $326,397 $351,302 Loans 565,654 552,521 Allowance for loan losses (5,237) (5,077) All other assets 93,088 91,016 --------------------------------------------------------------------- TOTAL ASSETS $979,902 $989,762 --------------------------------------------------------------------- Deposits-interest bearing $519,295 $564,334 Deposits-non interest bearing 112,695 115,859 Borrowings 251,222 216,761 Other liabilities 9,769 5,543 Stockholders' equity 86,921 87,265 --------------------------------------------------------------------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $979,902 $989,762 ---------------------------------------------------------------------
About Center Bancorp
Center Bancorp, Inc. is a financial services holding company and 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 Wealth Management Division which includes its wholly owned subsidiary, Center Financial Group LLC, and through a strategic partnership with American Economic Planning Group, provides financial services, including brokerage services, insurance and annuities, mutual funds, financial planning, estate and tax planning, trust, elder care and benefit plan administration. Center additionally offers title insurance services in connection with the closing of real estate transactions, through two subsidiaries, Union Title Company and Center Title Company.
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, 2009, the Bank had total assets of $1.1 billion, total deposit funding sources, which includes overnight repurchase agreements, of $795.3 million and stockholders' equity of $89.4 million. For further information regarding Center Bancorp, Inc., call 1-(800)-862-3683. For information regarding Union Center National Bank, visit our web site at http://www.centerbancorp.com
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. This measure may be important to investors that are interested in analyzing our return on equity exclusive of 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) ---------------------- For the quarter ended: 3/31/09 12/31/08 9/30/08 6/30/08 3/31/08 12/31/07 -------------- -------- -------- -------- -------- -------- -------- Net income $ 799 $ 1,699 $ 1,518 $ 1,408 $ 1,217 $ 532 -------------------------------------------------------------------- Average stockholders' equity $90,899 $81,088 $80,393 $84,142 $86,921 $87,265 Less: Average goodwill and other intangible assets 17,101 17,123 17,145 17,169 17,194 17,220 -------------------------------------------------------------------- Average tangible stockholders' equity $73,798 $63,965 $63,248 $66,973 $69,727 $70,045 -------------------------------------------------------------------- Return on average stockholders' equity 3.52% 8.38% 7.55% 6.69% 5.60% 2.44% Add: Average goodwill and other intangible assets 0.81 2.24 2.05 1.72 1.38 0.60 -------------------------------------------------------------------- Return on average tangible stockholders' equity 4.33% 10.62% 9.60% 8.41% 6.98% 3.04% --------------------------------------------------------------------
"Tangible book value per common share" is also 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) ---------------------- At quarter ended: 3/31/09 12/31/08 9/30/08 6/30/08 ----------------- ----------- ----------- ----------- ----------- Common shares outstanding 12,991,312 12,991,312 12,988,284 13,016,075 Stockholders' equity $ 89,429 $ 81,713 $ 80,624 $ 80,393 Less: Preferred stock 9,557 -- -- -- Less: Goodwill and other intangible assets 17,087 17,110 17,132 17,154 --------------------------------------------------------------------- Tangible common stockholders' equity $ 62,785 $ 64,603 $ 63,492 $ 63,239 --------------------------------------------------------------------- Book value per common share $ 6.15 $ 6.29 $ 6.21 $ 6.18 Less: Goodwill and other intangible assets 1.32 1.32 1.32 1.32 --------------------------------------------------------------------- Tangible book value per common share $ 4.83 $ 4.97 $ 4.89 $ 4.86 --------------------------------------------------------------------- (Dollars in thousands) ---------------------- At quarter ended: 3/31/08 12/31/07 ----------------- ----------- ----------- Common shares outstanding 13,113,760 13,155,784 Stockholders' equity $ 85,401 $ 85,278 Less: Preferred stock -- -- Less: Goodwill and other intangible assets 17,179 17,204 --------------------------------------------------------------------- Tangible common stockholders' equity $ 68,222 $ 68,074 --------------------------------------------------------------------- Book value per common share $ 6.51 $ 6.48 Less: Goodwill and other intangible assets 1.31 1.31 --------------------------------------------------------------------- Tangible book value per common share $ 5.20 $ 5.17 ---------------------------------------------------------------------
"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 for 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) ---------------------- At quarter ended: 3/31/09 12/31/08 9/30/08 6/30/08 ----------------- ----------- ----------- ----------- ----------- Total assets $1,121,013 $1,023,293 $1,042,778 $ 986,436 Less: Goodwill and other intangible assets 17,087 17,110 17,132 17,154 --------------------------------------------------------------------- Tangible assets $1,103,926 $1,006,183 $1,025,646 $ 969,282 --------------------------------------------------------------------- Total stockholders' equity/total assets 7.98% 7.99% 7.73% 8.15% Tangible common stockholders' equity/tangible assets 5.69% 6.42% 6.19% 6.52% (Dollars in thousands) ---------------------- At quarter ended: 3/31/08 12/31/07 ----------------- ----------- ----------- Total assets $ 995,167 $1,017,645 Less: Goodwill and other intangible assets 17,179 17,204 --------------------------------------------------------------------- Tangible assets $ 977,988 $1,000,441 --------------------------------------------------------------------- Total stockholders' equity/total assets 8.58% 8.38% Tangible common stockholders' equity/tangible assets 6.98% 6.80%
Total non-interest income is presented both 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 (or other) income with total non-interest (or other) income excluding the impact of securities transactions.
(Dollars in thousands) ---------------------- For the quarter ended: 3/31/09 12/31/08 9/30/08 6/30/08 3/31/08 12/31/07 -------------- -------- -------- -------- -------- -------- -------- Total non- interest income $ 1,384 $ 615 $ 47 $ 1,116 $ 866 $ 874 Net securities gains (losses) 600 (256) (1,075) 225 -- (43) -------------------------------------------------------------------- Total non- interest income, excluding net secur- ities gains (losses) $ 784 $ 871 $ 1,122 $ 891 $ 866 $ 917 --------------------------------------------------------------------
"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), as follows:
(Dollars in thousands)
----------------------
For the
quarter ended: 3/31/09 12/31/08 9/30/08 6/30/08 3/31/08 12/31/07
-------------- -------- -------- -------- -------- -------- --------
Other expense $ 5,319 $ 4,754 $ 4,578 $ 5,188 $ 4,953 $ 6,034
--------------------------------------------------------------------
Net interest
income (tax
equivalent
basis) $ 6,556 $ 7,086 $ 7,148 $ 6,776 $ 6,117 $ 5,594
Other income,
excluding net
securities
gains (losses) 784 871 1,122 891 866 917
--------------------------------------------------------------------
$ 7,340 $ 7,957 $ 8,270 $ 7,667 $ 6,983 $ 6,511
--------------------------------------------------------------------
Efficiency
ratio 72.5% 59.7% 55.4% 67.7% 70.9% 92.7%
--------------------------------------------------------------------
Forward-Looking Statements
All non-historical statements in this press release (including statements regarding future additions to the Corporation's allowance for loan losses, anticipated dividend payout ratios and dividend amounts, expectations for 2009 net income and tangible book value at December 31, 2009, anticipated improvements in the Corporation's net interest margin and net income, the future funding of undispersed loan commitments) 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 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.
CENTER BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CONDITION
(unaudited)
March 31, December 31,
(Dollars in Thousands) 2009 2008
---------------------------------------------------------------------
ASSETS
Cash and due from banks $ 90,634 $ 15,031
Federal funds sold and securities
purchased under agreement to resell -- --
---------------------------------------------------------------------
Total cash and cash equivalents 90,634 15,031
---------------------------------------------------------------------
Investment securities available-for sale 266,032 242,714
Loans, net of unearned income 678,017 676,203
Less -- Allowance for loan losses 6,769 6,254
---------------------------------------------------------------------
Net Loans 671,248 669,949
Restricted investment in bank stocks, at
cost 10,228 10,230
Premises and equipment, net 18,313 18,488
Accrued interest receivable 4,273 4,154
Bank owned life insurance 23,156 22,938
Other real estate owned 4,426 3,949
Goodwill and other intangible assets 17,087 17,110
Other assets 15,616 18,730
---------------------------------------------------------------------
Total assets $ 1,121,013 $ 1,023,293
=====================================================================
LIABILITIES
Deposits:
Non-interest bearing $ 114,607 $ 113,319
Interest-bearing
Time deposits $100 and over 163,392 100,493
Interest-bearing transactions, savings
and time deposits $100 and less 490,380 445,725
---------------------------------------------------------------------
Total deposits 768,379 659,537
Securities sold under agreement to
repurchase 26,951 30,143
Short-term borrowings -- 15,000
Long-term borrowings 223,259 223,297
Subordinated debentures 5,155 5,155
Accounts payable and accrued liabilities 7,840 8,448
---------------------------------------------------------------------
Total liabilities 1,031,584 941,580
---------------------------------------------------------------------
STOCKHOLDERS' EQUITY
Preferred stock, no par value:
Authorized 5,000,000 shares; issued
10,000 shares in 2009 and none in
2008 9,557 --
Common stock, $1,000 liquidation value:
Authorized 20,000,000 shares; issued
15,190,984 shares in 2009 and 2008;
outstanding 12,991,312 shares in 2009
and 2008 86,908 86,908
Additional paid in capital 5,630 5,204
Retained earnings 15,806 16,309
Treasury stock, at cost (2,199,672 shares
in 2009 and 2008) (17,796) (17,796)
Accumulated other comprehensive loss (10,676) (8,912)
---------------------------------------------------------------------
Total stockholders' equity 89,429 81,713
---------------------------------------------------------------------
Total liabilities and stockholders' equity $ 1,121,013 $ 1,023,293
=====================================================================
CENTER BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
Three Months Ended
March 31,
---------------------------------------------------------------------
(Dollars in Thousands, Except Per Share
Data) 2009 2008
---------------------------------------------------------------------
Interest income:
Interest and fees on loans $ 9,102 $ 8,471
Interest and dividends on investment
securities:
Taxable interest income 2,370 2,765
Non-taxable interest income 343 802
Dividends 117 243
Interest on Federal funds sold and
securities purchased under agreement
to resell 10 79
---------------------------------------------------------------------
Total interest income 11,942 12,360
---------------------------------------------------------------------
Interest expense:
Interest on certificates of deposit
$100 or more 349 675
Interest on other deposits 2,706 3,369
Interest on borrowings 2,508 2,629
---------------------------------------------------------------------
Total interest expense 5,563 6,673
---------------------------------------------------------------------
Net interest income 6,379 5,687
Provision for loan losses 1,421 150
---------------------------------------------------------------------
Net interest income after provision for
loan losses 4,958 5,537
---------------------------------------------------------------------
Other income:
Service charges, commissions and fees 449 529
Annuity and insurance 40 17
Bank owned life insurance 218 221
Net securities gains 600 --
Other 77 99
---------------------------------------------------------------------
Total other income 1,384 866
---------------------------------------------------------------------
Other expense:
Salaries and employee benefits 2,393 2,352
Occupancy, net 797 759
Premises and equipment 321 366
FDIC Insurance 365 20
Professional and consulting 212 172
Stationery and printing 70 95
Marketing and advertising 130 160
Computer expense 214 141
Other 817 888
---------------------------------------------------------------------
Total other expense 5,319 4,953
---------------------------------------------------------------------
Income before income tax expense 1,023 1,450
Income tax expense 224 233
---------------------------------------------------------------------
Net income 799 1,217
Dividends on preferred stock and
accretion 129 --
---------------------------------------------------------------------
Net income available to common
stockholders $ 670 $ 1,217
=====================================================================
Earnings per common share:
Basic $ 0.05 $ 0.09
Diluted $ 0.05 $ 0.09
---------------------------------------------------------------------
Weighted average common shares
outstanding:
Basic 12,991,312 13,144,747
Diluted 12,993,185 13,163,586
=====================================================================
SUMMARY SELECTED QUARTERLY STATISTICAL INFORMATION AND FINANCIAL DATA
(Dollars in Thousands, Except per Share Data)
Three Months Ended
------------------
3/31/2009 12/31/2008 3/31/2008
------------ ------------ ------------
Statements of Income Data:
Interest income $ 11,942 $ 12,615 $ 12,360
Interest expense 5,563 5,792 6,673
Net interest income 6,379 6,823 5,687
Provision for loan losses 1,421 425 150
Net interest income after
provision for loan losses 4,958 6,398 5,537
Other income 1,384 615 866
Other expense 5,319 4,754 4,953
Income before income tax
expense 1,023 2,259 1,450
Income tax expense 224 560 233
Net income 799 1,699 1,217
Net income available to
common stockholders $ 670 $ 1,699 $ 1,217
Earnings per common share:
Basic $ 0.05 $ 0.13 $ 0.09
Diluted $ 0.05 $ 0.13 $ 0.09
Statements of Condition Data
(Period End):
Investments $ 266,032 $ 242,714 $ 281,746
Total loans 678,017 676,203 565,025
Goodwill and other
intangibles 17,087 17,110 17,179
Total assets 1,121,013 1,023,293 995,167
Deposits 768,379 659,537 622,924
Borrowings 255,365 273,595 273,869
Stockholders' equity $ 89,429 $ 81,713 $ 85,401
Dividend Data on Common
Shares:
Cash dividends $ 1,169 $ 1,169 $ 1,168
Dividend payout ratio 174.48% 68.81% 95.97%
Cash dividends per share $ 0.09 $ 0.09 $ 0.09
Weighted Average Common
Shares Outstanding:
Basic 12,991,312 12,989,304 13,144,747
Diluted 12,993,185 12,995,134 13,163,586
Operating Ratios:
Return on average assets 0.30% 0.66% 0.50%
Average stockholders' equity
to average assets 8.58% 7.86% 8.87%
Return on average equity 3.52% 8.38% 5.60%
Return on average tangible
stockholders' equity 4.33% 10.62% 6.98%
Book value per common share $ 6.15 $ 6.29 $ 6.51
Tangible book value per
common share $ 4.83 $ 4.97 $ 5.20
Non-Financial Information
(Period End):
Common stockholders of
record 633 640 666
Staff-full time equivalent 160 160 167