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New Jersey Community Bank Reports First Quarter 2014 Results

FREEHOLD, NJ -- (Marketwired) -- 04/30/14 -- New Jersey Community Bank (OTCQB: NJCB) (the "Bank") reported net loss of $8 thousand for the three months ended March 31, 2014, compared with a net income of $90 thousand, or $0.05 per common share, for the same period in the prior year. The earnings for the quarter were negatively impacted due to increased levels of non-accruing loans, which in turn affected the interest income on loans. Net interest margin decreased 16 basis points year over year largely due to a decline of 23 basis points in yield of interest-earning assets.

Robert D. O'Donnell, Chairman and CEO, commented that, "The Bank has experienced growing pains, it is no secret that the asset quality and the loan administration issues facing us over the last several months required a continued attention to address these issues. In response to this dilemma, the path chosen by management was not the "quick-fix" but a sustained strategy to identify and repair. I have witnessed our staff respond to these challenges by working harder and smarter at every level in our institution to responsibly produce the results that will ultimately allow us to make our way out of these issues."

Balance Sheet Summary

At March 31, 2014, total assets were $139.7 million, a decline of $4.8 million from December 31, 2013. Total cash and cash equivalents declined $4.5 million compared to year end 2013, offsetting a similar decline in total deposits. Due from banks -- time deposits decreased $1.7 million offset by increases in investment securities of $394 thousand and loans receivable of $786 thousand compared to year end 2013.

Total deposits decreased $4.8 million compared to the levels at year end 2013. Majority of the decrease resulted from the maturing time deposits which were paid off utilizing the excess levels of cash and cash equivalents during the first quarter of 2014. During the quarter, non-interest bearing deposits declined $1.4 million while savings, NOW and money market deposits declined $188 thousand compared to year end 2013.

Shareholders' equity totaled $14.3 million at March 31, 2014, increasing moderately from year-end 2013. The Bank's capital ratios remain strong and exceed the regulatory requirements to be deemed a well capitalized financial institution.

Results of Operations

For the quarter ended March 31, 2014, net interest income totaled $1.1 million, decreasing marginally over the same period in the prior year. At March 31, 2014, net interest margin was 3.40%, a decrease of 16 basis points compared to the same period a year ago resulting from continued low levels of interest rates. At March 31, 2014, yield on average earning assets declined 23 basis points to 4.16% while the cost of interest-bearing deposits declined 7 basis points to 0.90%, compared to the same period in the prior year primarily due to low interest rates.

The provision for loan loss was $60 thousand for the first quarter 2014, an increase of $25 thousand compared to a year-ago quarter. The allowance for loan loss at period-end was $1.7 million, or 1.76% of total loans. The asset quality deteriorated during the quarter that resulted in increasing the provision for loan loss for the quarter, the current level of the allowance for loan loss is considered to be adequate.

Non-interest income increased $45 thousand to $131 thousand for the quarter ended March 31, 2014, compared with $86 thousand for the same quarter in the prior year. Majority of such increase is directly related to the increase in loan fees as well as fees and service charges on deposit accounts and all other income.

Non-interest expense totaled $1.2 million for the quarter ended March 31, 2014, an increase of $159 thousand, from a year-ago quarter. Of the total increase in non-interest expense, salaries and employee benefits increased $59 thousand as a result of increases in staff compensation and health costs. The professional fees and federal insurance assessment each increased $31 thousand due to increase in cost of professional services utilized by the Bank and the changes in insurance assessment rates. Occupancy and equipment expense increased $27 thousand as a result of increases in lease rentals and routine building maintenance.

About the Bank
New Jersey Community Bank is a state-chartered commercial bank headquartered in Freehold, New Jersey. The Bank opened for business in July 2008 and operates three full-service banking offices in the central New Jersey counties of Monmouth and Middlesex. The Bank provides traditional commercial and retail banking services to small businesses and consumers. For additional information about New Jersey Community Bank, please visit www.njcbk.com or call 732-431-2265.

Forward-Looking Statements
This release contains forward-looking statements relating to present or future trends or factors affecting the banking industry, and specifically the financial condition and results of operations, including without limitation, statements relating to the earnings outlook of the Bank, as well as its operations, markets and products. Actual results could differ materially from those indicated. Among the important factors that could cause results to differ materially are interest rate changes, change in economic climate, which could materially impact credit quality trends and the ability to generate loans, changes in the mix of the Bank's business, competitive pressures, changes in accounting, tax or regulatory practices or requirements, resolution of tax reviews, and those risk factors detailed in the Bank's periodic reports. The Bank undertakes no obligation to release revisions to these forward-looking statements or reflect events or circumstances after the date of this release.



New Jersey Community Bank
Selected Financial Highlights
(unaudited)

                                 As of or for the Quarters Ended
                     ------------------------------------------------------
(in thousands,
 except per share
 and percentage
 data)               3/31/2014  12/31/2013  9/30/2013  6/30/2013  3/31/2013
                     ---------  ----------  ---------  ---------  ---------

Summary of
 Operations:
    Interest income  $   1,367  $    1,187  $   1,456  $   1,436  $   1,409
    Interest expense       251         244        223        228        267
                     ---------  ----------  ---------  ---------  ---------
        Net interest
         income          1,116         943      1,233      1,208      1,142
  Provision for loan
   and lease loss           60         660        105         55         35
                     ---------  ----------  ---------  ---------  ---------
        Net interest
         income
         after
         provision
         for loan
         loss            1,056         283      1,128      1,153      1,107
  Non-interest
   income                  132         117        128        118         86
  Non-interest
   expense               1,190       3,057      1,041      1,071      1,031
                     ---------  ----------  ---------  ---------  ---------
        Income
         before
         income tax
         expense            (3)     (2,657)       215        200        162
  Income tax expense         5      (1,085)        93         87         72
                     ---------  ----------  ---------  ---------  ---------
        Net income   $      (8) $   (1,573) $     122  $     113  $      90
                     =========  ==========  =========  =========  =========

Per Common Share(1):
      Basic          $   (0.00) $    (0.82) $    0.06  $    0.06  $    0.05
      Diluted            (0.00)      (0.82)      0.06       0.06       0.05
  Book value per
   share                  7.51        7.44       8.29       8.29       8.31
    Average shares
     outstanding         1,908       1,908      1,908      1,908      1,908
    Average diluted
     shares
     outstanding         1,908       1,908      1,908      1,908      1,908

Selected Financial
 Ratios:
    Return on
     average assets      -0.02%      -4.48%      0.37%      0.35%      0.26%
    Return on
     average common
     equity              -0.22%     -39.72%      3.09%      2.82%      2.27%
    Average equity
     to average
     assets              10.15%      11.28%     11.93%     12.33%     11.65%
    Risk-based
     capital:
      Total risk-
       based capital
       ratio             13.17%      13.62%     15.67%     16.10%     16.20%
      Tier 1 risk-
       based capital
       ratio             11.92%      12.36%     14.42%     14.87%     15.00%
      Tier 1
       leverage
       capital ratio      9.43%       9.76%     11.86%     12.06%     11.38%

Financial Condition:
  Total assets       $ 139,670  $  144,503  $ 135,546  $ 130,877  $ 130,946
  Loans, net of
   unearned income      95,720      94,934     92,978     91,515     90,736
  Deposits             123,123     127,940    119,125    114,675    114,614
  Shareholder's
   equity               14,330      14,193     15,813     15,810     15,848

(1) Data have been restated to give effect to the 5% stock dividend declared
    and paid in 2013.



New Jersey Community Bank
Statements of Financial Condition
(dollars in thousands, except share data)

                                                   March 31,   December 31,
                                                     2014          2013
                                                 ------------  ------------
Assets                                            (unaudited)
    Cash and due from banks - non-interest
     bearing                                     $      2,037  $      1,927
    Federal funds sold and interest-bearing
     deposits with banks                               10,104        14,710
                                                 ------------  ------------
          Total Cash and Cash Equivalents              12,141        16,637
    Due from banks - time deposits                      6,126         7,867
    Investment Securities:
      Available-for-sale                               14,741        14,644
      Held-to-maturity                                  3,463         3,166
                                                 ------------  ------------
          Total Investment Securities                  18,204        17,810
    Loans Receivable, net of unearned fees             95,720        94,934
        Less: Allowance for loan losses                (1,689)       (1,982)
                                                 ------------  ------------
          Net Loans                                    94,031        92,952
    Premises and equipment, net                         2,263         2,254
    Accrued interest receivable                           331           338
    Bank-owned life insurance                           3,603         3,579
    Deferred tax assets                                 2,007         2,251
    Other assets                                          964           815
                                                 ------------  ------------
        Total Assets                             $    139,670  $    144,503
                                                 ============  ============

Liabilities and Shareholders' Equity
  Liabilities
    Deposits:
      Non-interest bearing                       $     11,896  $     13,270
      Savings, NOW and money market                    43,328        43,140
      Time deposits $100M and over                     50,984        53,601
      Time deposits, other                             16,915        17,929
                                                 ------------  ------------
        Total Deposits                                123,123       127,940

    Accrued interest payable                                5             5
    Other liabilities                                   2,212         2,365
                                                 ------------  ------------
        Total Liabilities                             125,341       130,310
                                                 ------------  ------------

  Shareholders' Equity
    Common stock, $2 par value; authorized
     10,000,000 shares; issued and outstanding
     1,908,445 shares, respectively                     3,817         3,817
    Surplus                                            13,797        13,772
    Accumulated Deficit                                (3,041)       (3,033)
    Accumulated other comprehensive income
     (loss)                                              (243)         (363)
                                                 ------------  ------------
        Total Shareholders' Equity                     14,330        14,193
                                                 ------------  ------------
        Total Liabilities and Shareholders'
         Equity                                  $    139,670  $    144,503
                                                 ============  ============



New Jersey Community Bank
Statements of Operations
(dollars in thousands, except per share
 data)(unaudited)

                                                       Three Month Ended
                                                           March 31,
                                                  --------------------------
                                                      2014          2013
                                                  ------------  ------------
Interest Income
  Loans receivable, including fees                $      1,254  $      1,324
  Investment securities                                     96            64
  Federal funds sold and interest-bearing
   deposits with banks                                       7             9
  Due from banks - interest bearing                         10            12
                                                  ------------  ------------
    Total Interest Income                                1,367         1,409
                                                  ------------  ------------
Interest Expense
  Deposits                                                 251           267
                                                  ------------  ------------
    Net Interest Income before Provision for Loan
     Loss                                                1,116         1,142
Provision for Loan Loss                                     60            35
                                                  ------------  ------------
    Net Interest Income after Provision for Loan
     Loss                                                1,056         1,107
                                                  ------------  ------------
Non-Interest Income
  Fees and service charges on deposit accounts              75            59
  Loan fee income                                           20             3
  All other income                                          37            24
                                                  ------------  ------------

    Total Non-Interest Income                              131            86
                                                  ------------  ------------
Non-Interest Expense
  Salaries and employee benefits                           652           593
  Occupancy and equipment                                  212           185
  Data processing services                                  47            43
  Professional and other fees                              117            86
  Advertising and promotion                                  5             6
  Federal insurance assessment                              60            29
  Other operating expenses                                  97            89
                                                  ------------  ------------
    Total Non-Interest Expenses                          1,190         1,031
                                                  ------------  ------------
    Income Before Income Tax Expense                        (3)          162
  Income tax expense                                         5            72
                                                  ------------  ------------
Net Income                                        $         (8) $         90
                                                  ============  ============
Income per share:
  Basic and diluted                               $      (0.00) $       0.05
Weighted average number of common shares
 outstanding
  Basic and diluted                                      1,908         1,908



New Jersey Community Bank
Analysis of Average Balance Sheet and Net Interest Income
(unaudited)

                                   For the Three Months Ended
                           March 31, 2014              March 31, 2013
                     --------------------------  --------------------------
                      Average           Average   Average           Average
                      Balance  Interest   Rate    Balance  Interest   Rate
                     --------  -------- -------  --------  -------- -------
Interest Earning
 Assets:
  Loans              $ 95,630  $  1,253    5.32% $ 91,315  $  1,324    5.88%
  Investment
   securities          17,795        96    2.16%   13,991        64    1.83%
  Federal funds sold
   and interest-
   bearing deposits
   with banks          12,804         7    0.22%   16,485         9    0.22%
  Due from banks -
   time deposits        6,879        10    0.61%    8,155        12    0.60%
                     --------  -------- -------  --------  -------- -------
      Total
       interest-
       earning
       assets         133,108     1,367    4.16%  129,946     1,408    4.39%
Allowance for loan
 loss                  (1,848)                     (1,214)
Cash and due from
 banks - non-
 interest bearing       1,450                       1,305
All other assets        8,128                       5,485
                     --------                    --------
      Total assets   $140,838                    $135,522
                     ========                    ========

Interest Bearing
 Liabilities:
  Deposits:
    Savings, NOW and
     money market    $ 43,235        49    0.46% $ 42,201        54    0.52%
    Time deposits
     $100M and over    52,299       149    1.15%   50,629       145    1.16%
    Time deposits,
     other             17,410        54    1.25%   18,434        68    1.50%
                     --------  -------- -------  --------  -------- -------
      Total
       interest-
       bearing
       deposits       112,944       252    0.90%  111,264       267    0.97%
Demand                 12,262                       7,985
Other liabilities       1,337                         482
                     --------                    --------
      Total
       liabilities    126,543                     119,731

  Stockholders'
   equity              14,293                      15,791
                     --------                    --------
      Total
       liabilities &
       stockholders'
       equity        $140,836                    $135,522
                     ========  --------          ========  --------
Net interest income            $  1,115                    $  1,142
                               ========                    ========

Average interest
 rate spread                               3.26%                       3.42%
                                        =======                     =======

Net interest margin                        3.40%                       3.56%
                                        =======                     =======

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