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Center Bancorp Inc. Reports Operating Results (10-Q)

August 06, 2010 | About:
10qk

10qk

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Center Bancorp Inc. (CNBC) filed Quarterly Report for the period ended 2010-06-30.

Center Bancorp Inc. has a market cap of $106.5 million; its shares were traded at around $7.31 with a P/E ratio of 23.5 and P/S ratio of 2. The dividend yield of Center Bancorp Inc. stocks is 1.6%.CNBC is in the portfolios of Chuck Royce of Royce& Associates, Jim Simons of Renaissance Technologies LLC.

Highlight of Business Operations:

Net income for the three months ended June 30, 2010 amounted to $2,014,000 compared to net income of $1,201,000 for the comparable three-month period ended June 30, 2009. The Corporation recorded earnings per diluted common share of $0.13 for the three months ended June 30, 2010 as compared with earnings of $0.08 per diluted common share for the same three months in 2009. Dividends and accretion relating to the preferred stock issued to the U.S. Treasury reduced earnings by approximately $0.01 per fully diluted common share for both periods. The annualized return on average assets was 0.69 percent for the three months ended June 30, 2010, compared to 0.40 percent for three months ended June 30, 2009. The annualized return on average stockholders equity was 7.60 percent for the three-month period ended June 30, 2010, compared to 5.35 percent for the three months ended June 30, 2009.

Net income for the six months ended June 30, 2010 amounted to $2,295,000, compared to net income of $2,000,000 for the comparable six-month period ended June 30, 2009. Earnings per diluted common share of $0.14 for the six months ended June 30, 2010 compared with earnings of $0.13 per diluted common share for the six months ended June 30, 2009. Dividends and accretion relating to the preferred stock issued to the U.S. Treasury reduced earnings by approximately $0.02 per fully diluted common share for both periods. The annualized return on average assets was 0.39 percent for the six months ended June 30, 2010, compared to 0.35 percent for six months ended June 30, 2009. The annualized return on average stockholders equity was 4.36 percent for the six-month period ended June 30, 2010, compared to 4.43 percent for the six months ended June 30, 2009.

For the three-month period ended June 30, 2010, interest income on a tax-equivalent basis decreased by $315,000 or 2.5 percent compared to the same three-month period in 2009. This decrease in interest income was due primarily to volume increases in the investment securities and loan portfolios which was more than offset by a decline in yields due to the new volume being recorded at lower rates in a lower interest rate environment. Average investment volume, including short-term investments and restricted investment in bank stocks, increased during the current three-month period by $9.4 million, to $313.9 million, compared to the second quarter of 2009. The loan portfolio increased on average $31.4 million, to $718.1 million, from an average of $686.7 million in the same quarter in 2009, primarily driven by growth in commercial loans and commercial real estate business related sectors of the loan portfolio. The average loan portfolio represented approximately 69.6 percent of average interest-earning assets during the second quarter of 2010 compared to 69.3 percent in the same quarter in 2009.

For the six-month period ended June 30, 2010, interest income on a tax-equivalent basis increased by $298,000 or 1.2 percent from the comparable six-month period in 2009. This increase was due primarily to increases in the investment securities and loan portfolios offset in part by a decline in yields due to the new volume being recorded at lower rates in a lower interest rate environment. Average investment volume, including short-term investments and restricted investment in bank stocks, decreased during the current six-month period by $33.1 million, to $312.2 million, compared to the second quarter of 2009. The average loan portfolio increased $29.6 million, to $712.9 million, from $683.3 million for the same six months in 2009, primarily driven by growth in commercial loans and commercial real estate. The average loan portfolio represented approximately 69.5 percent of average interest-earning assets during the first six months of 2010 compared to 71.0 percent for the same six months in 2009.

For the three months ended June 30, 2010, interest expense declined $2.2 million, or 37.0 percent from the same period in 2009. The average rate of interest-bearing liabilities decreased 84 basis points to 1.67 percent for the three months ended June 30, 2010, from 2.51 percent for the three months ended June 30, 2009. At the same time, average interest-bearing liabilities decreased by $53.1 million. The decrease in average interest-bearing liabilities during the three months ended June 30, 2010 was primarily in time deposits of $108.7 million and was largely offset by an increase in savings deposits of $26.6, other interest-bearing deposits of $21.5 million, $4.0 million in money market accounts and $3.5 million in other borrowings. Since 2008 and into 2010, steps have been taken to improve the Corporation s net interest margin by allowing the runoff of certain high rate deposits and to position the Corporation for further high cost cash outflows. The result was an improvement in the Corporation s cost of funds. As a result of these factors, for the three months ended June 30, 2010, the Corporation s net interest spread on a tax-equivalent basis increased to 3.18 percent, from 2.67 percent for the three months ended June 30, 2009.

For the six months ended June 30, 2010, interest expense declined $3.6 million, or 31.3 percent from the same period in 2009. The average rate of interest-bearing liabilities decreased 84 basis points to 1.73 percent for the six months ended June 30, 2010, from 2.57 percent for the six months ended June 30, 2009. At the same time, average interest-bearing liabilities increased by $16.3 million. The increase in average interest-bearing liabilities during the six months ended June 30, 2010 reflected runoff in time deposits of $71.0 million that was more than offset primarily by increases in lower costing savings deposits of $50.7 million and other interest-bearing deposits of $24.0 million. The result of this was an improvement in the Corporation s cost of funds for the period. As a result of these factors, for the six months ended June 30, 2010, the Corporation s net interest spread on a tax-equivalent basis increased to 3.20 percent, from 2.61 percent for the six months ended June 30, 2009.

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10qk
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