Hilltop Community Bancorp, Inc. Reports Improved Earnings

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Oct 19, 2012, 03:03 ET

SUMMIT, N.J., Oct. 19, 2012 /PRNewswire/ -- Hilltop Community Bancorp, Inc. (the Corporation) (OTCQB: HTBC), the holding company for Hilltop Community Bank (the Bank or Hilltop), today reported net income of $277,000 ($.10 per common share, basic and diluted) for the quarter ended September 30, 2012. This compares with net income of $270,000 ($.09 per common share, basic and diluted) for the third quarter of 2011.

For the first nine months of 2012, the Corporation earned $731,000 ($.26 per common share, basic and diluted), a 21.4% increase over net income of $602,000 ($.21 per common share, basic and diluted) for the first nine months of 2011.

Net income for the third quarter and the first nine months of 2012 benefited from a gain of $165,000 on the sale of a security in the Bank's available for sale portfolio. A number of community banks have taken advantage of opportunities to realize gains in their securities portfolios over the past year. On a year to date basis, Hilltop's provision for loan losses totaled $165,000 compared to $225,000 for the first nine months of the prior year. The Bank's allowance for loan losses was 1.64% of total loans at September 30, 2012, which compares favorably with Hilltop's peer group of community banks.

Total assets amounted to $170.5 million at September 30, 2012, an increase of $5.2 million over the level of assets at December 31, 2011. Gross loans increased by $651,000 at September 30, 2012 over the level of loans at the end of 2011.

In a joint statement, Chairman of the Board Richard D. Wellbrock and President & CEO Mortimer J. O'Shea commented: "Several positives are evident in our third quarter results. Gross loans increased compared to the third quarter of 2011 as well as with the year-end numbers. Although loan growth was minimal, we are seeing a reversal of the decline in loans which was induced by the reluctance of individuals and businesses to increase borrowings during uncertain economic periods. We currently have a solid pipeline of commercial loans that will close in the coming weeks and months. Hilltop's loan quality metrics have been historically strong in comparison to our peers and we are working our way through the resolution of the few problem loans that we have in our portfolio. This is evidenced by a reduction in nonaccrual loans and by the modest amount of charge-offs taken. Bank margins, generally, are being squeezed in the current low interest rate environment, but Hilltop's net interest margin remained at a level above 4% for the third quarter, higher than most of our peers. Deposits are up, despite one of the lowest cost of funds in the State. And, our tangible book value per common share was $6.83 at September 30, 2012, up from $6.57 at the end of the prior year's third quarter."

Hilltop Community Bancorp, Inc. is the parent holding company for Hilltop Community Bank. Hilltop Community Bank is a New Jersey state-chartered commercial bank which commenced operations in February 2000. The Bank operates as a locally headquartered, community bank engaged in a general commercial banking business. The Bank has offices in Summit, Berkeley Heights and Madison, and administrative offices in New Providence. The service area includes surrounding communities in Union, Essex, Morris and Somerset Counties.

The foregoing contains forward-looking statements within the meaning of the private Securities Litigation Reform Act of 1995. Such statements are not historical facts and include expressions about new and existing programs and products, relationships, opportunities, technology and market conditions. Such forward-looking statements involve certain risks and uncertainties. These include, but are not limited to, the direction of movement in interest rates, the possibility of disruption in credit markets, successful implementation and integration of acquisitions, the effects of economic conditions and the impact of legal barriers and structures. Actual results may differ from such forward-looking statements. The Bank assumes no obligation for updating any such forward-looking statements at any time.

HILLTOP COMMUNITY BANCORP, INC.
Financial Information
September 30, 2012

Consolidated Balance Sheet
	09/30/12	09/30/11	12/31/11
Assets
Cash and due from banks	$ 3,219,700	$ 2,471,900	$ 2,798,400
Interest-bearing deposits in banks	9,343,400	2,831,900	11,571,400
Federal funds sold	995,000	993,100	995,000
Cash and cash equivalents	13,558,100	6,296,900	15,364,800
Investment securities	44,386,100	37,455,800	38,056,500
Loans receivable	109,642,400	109,208,600	108,991,200
Allowance for loan losses	(1,793,100)	(2,185,400)	(2,269,400)
Loans receivable, net	107,849,300	107,023,200	106,721,800
Bank premises and equipment, net	2,573,600	2,714,800	2,673,700
Intangible assets	372,900	372,900	372,900
Other assets	1,783,600	2,195,400	2,141,300
Total assets	$170,523,600	$156,059,000	$165,331,000
Liabilities and Shareholders' Equity
Liabilities
Deposits:
Noninterest-bearing demand	$ 26,532,400	$ 25,358,200	$ 29,929,700
Interest-bearing demand	7,210,200	6,921,700	8,266,000
Money market and savings	74,576,900	58,355,800	63,153,300
Time deposits	35,305,500	36,882,400	35,652,200
Total deposits	143,625,000	127,518,100	137,001,200
Securities sold under agreements to repurchase	4,477,300	3,221,400	3,085,500
Short-term borrowings	-	4,000,000	4,000,000
Other liabilities	1,460,200	1,421,300	1,115,400
Total liabilities	149,562,500	136,160,800	145,202,100
Shareholders' Equity
Common stock	19,051,100	19,051,100	19,051,100
Retained earnings	1,342,600	596,000	611,400
Treasury stock	(505,000)	(505,000)	(505,000)
Accumulated other comprehensive income	1,072,400	756,100	971,400
Total shareholders' equity	20,961,100	19,898,200	20,128,900
Total liabilities and shareholders' equity	$170,523,600	$156,059,000	$165,331,000

Consolidated Income Statement
	QTD		YTD
	09/30/12	09/30/11	09/30/12	09/30/11
Interest Income
Loans, including fees	$ 1,491,200	$ 1,541,900	$ 4,497,600	$ 4,544,300
Securities- taxable	195,800	259,900	634,400	789,900
Securities- tax-exempt	143,800	116,800	397,300	333,400
Other	13,900	5,600	42,100	25,500
Total interest income	1,844,700	1,924,200	5,571,400	5,693,100
Interest Expense
Deposits	181,100	228,600	594,700	783,000
Capital lease obligations and other borrowings	14,800	16,000	44,800	74,200
Total interest expense	195,900	244,600	639,500	857,200

Net interest income	1,648,800	1,679,600	4,931,900	4,835,900

Provision for Loan Losses	130,000	75,000	165,000	225,000
Net interest income after provision for
loan losses	1,518,800	1,604,600	4,766,900	4,610,900

Noninterest Income
OTTI charges, net	(22,200)	(35,800)	(87,600)	(76,800)
Service charges and fees	28,800	29,400	83,500	96,300
Gain on sale of security	165,200	-	165,200	-
Other	40,700	68,800	156,800	219,500
Total noninterest income	212,500	62,400	317,900	239,000
Noninterest Expense
Salaries and employee benefits	772,200	770,700	2,347,400	2,300,300
Occupancy and equipment	155,500	155,400	474,900	479,400
Data processing related operations	147,200	156,900	470,600	425,800
Advertising	26,100	22,700	84,400	71,700
Professional fees	44,300	40,700	136,200	125,500
FDIC insurance and assessments	24,800	2,900	68,100	100,200
Other operating	176,500	130,700	500,000	521,900
Total noninterest expense	1,346,600	1,280,000	4,081,600	4,024,800

Income before income tax expense	384,700	387,000	1,003,200	825,100
Income Tax Expense	107,600	117,400	272,100	222,700
Net income	$ 277,100	$ 269,600	$ 731,100	$ 602,400

Net Interest Margin (tax-equivalent basis)	4.11%	4.63%	4.22%	4.44%

Per Common Share Data:
Net income per share- basic	$ 0.10	$ 0.09	$ 0.26	$ 0.21
Net income per share- diluted	$ 0.10	$ 0.09	$ 0.26	$ 0.21
Tangible book value- period end			$ 6.83	$ 6.57

Return on Average Assets	0.63%	0.69%	0.58%	0.51%
Return on Average Equity	5.24%	5.48%	4.69%	4.22%

Asset Quality Data:
Accruing loans past due 30 to 89 days			$ 860,200	$ 12,300
Accruing loans past due 90 days or more			$ -	$ -
Nonaccrual loans			$ 803,900	$ 2,007,100
Other real estate owned			$ -	$ -
Net charge-offs	$ 279,100	$ -	$ 641,300	$ 50,400

Miscellaneous:
Average assets	$173,805,200	$155,733,100	$169,639,000	$157,043,900
Average earning assets	$166,897,000	$148,961,000	$162,680,700	$150,835,200
Average deposits	$148,017,500	$130,916,500	$143,917,900	$133,986,600
Average shareholders' equity	$ 21,045,000	$ 19,518,600	$ 20,819,400	$ 19,086,800
Common shares outstanding- period end			2,856,399	2,856,399