Archive for November, 2009

All Commercial Real Estate (CRE) is not the same…

Monday, November 23rd, 2009

There certainly is a glaring difference between the Commercial Real Estate(CRE) loan underwritten for Peter Cooper Village/Stuyvesant Town in New York City, where forward looking pro formas based on non-existent future cash flow took place, and the underwriting of a 20 unit apartment building in our local market, based on a rent stabilized, and rent controlled environment with predictable cash flows, or the commercial office real estate owned by a local doctor group that houses their offices, where they tend to their patients in the community …  Yet the media, along with most of the bank regulators place all of these loans in the same bucket.

The public perception is that all CRE is risky, and that banks engaging in CRE lending are therefore risky, is a perception that is more damaging to sustained growth in our economy than the sub-prime mess that started it all.

The FDIC has created “guidance” that was adopted in 2006 and revised in 2008 that is now being looked at as a “bright line in the sand” by most examiners and regulators. No such line has been created for Residential Mortgages, or any sub-type of those loans.  Our regulators should take a more reasoned approach at creating additional buckets based on risk, and not cut off the only remaining source of funding left for the small business owner on Main Street.  And what happens to the borrower with perfect credit, terrific cash flow, substantial collateral that are approaching the end of their term, and need to refinance? Who will be able to finance their loan? What will that mean to our economy?

The Treasury Secretary talks about how banks should be encouraged to increase lending to help restore growth in our business community. How will local businesses be able to finance their growth, or more importantly how will start up businesses be able to obtain financing to purchase the real estate needed for a restaurant, office, manufacturing facility, etc in this environment.

 Prudent underwriting should always prevail, and the banks that get it right should not have to labor under “guidance turned into policy” designed for all banks which range in every size, and in every state, and in every part of the country regardless of their track record…

NJCB continues strong, stable growth in 3rd Quarter

Monday, November 16th, 2009

The third quarter of 2009 continued to show great growth for our bank.  In the quarter, we continued to demonstrate the strength and stability of our bank with profits of $612 thousand, as compared to $480 thousand in the same period of 2008. Also impressive is the growth of our year to date profit of $1.486 million in 2009 from $805 thousand in 2008.  This was clearly the most profitable quarter in our existence, and comes in conjunction with growing our assets from $473 million to $491 million, our loans $343 million to $371 million, and our deposits $398 million to $415 million, quarter over quarter. Equally as important, this growth in profitability and size was accomplished while increasing our loan loss allowance.  While, expecting not to have to tap into loan loss reserves in any meaningful way, the Bank’s management and Board of Directors thought it was important and prudent to build our reserves in anticipation of a further worsening of the credit market. Additionally, and perhaps most importantly, we are very proud of recently achieving and exceeding the $500 Million in Assets milestone.

The continuing freeze up at the national bank level continues to present great opportunities for us.  We have been quite successful in winning business from our local community bank competitors that have “buried their head in the sand” in the hope of waiting out this economic crises. We understand that this is the new normal, and are searching out quality, profitable banking relationships.

Our Residential Mortgage Division is very busy and provides a new source of business development that has positively affected the bank. If you are in the market for a new mortgage or interested in refinancing your existing mortgage, please give us a call.

Our new Headquarter facility is nearing completion, and provides us with the ability to continue to expand, as well as the addition of new services such as a drive-thru and drive-up ATM. We will keep you updated on the progress and timing of this exciting move.

In keeping up with our motto of being “A Better Place To Be” we are working hard to help those who are less fortunate by sponsoring a food drive for the Center for Food Action. Please stop by one our branches for information or call us to see how you might be able to participate. It is times like this that we can truly see the quality of our employees as they volunteer to help in this time of need.

In closing, we are working hard to produce all of these extraordinary results, and we appreciate all the help that our shareholders have provided.