GFLS Greater Community Bancorp (MM)

Greater Community Bancorp (Nasdaq: GFLS) (the �Company�) announced net income for the first quarter of 2007 of $1.7 million, decreasing $0.8 million from the $2.5 million reported for the first quarter of 2006. Diluted earnings per share were $0.20, compared with $0.30 per share reported for the prior-year first quarter. Anthony M. Bruno, Jr., Chairman, President and CEO, commented, "The inverted interest rate yield curve continues to compress our net interest margin by driving interest costs higher in an intensely competitive market. For the first quarter of 2007, interest expense was 37.3% higher than a year ago, while interest income increased only 9.6%. Attracting deposits at higher cost and the repricing of existing deposits have more than offset the incremental income attributed to the growth in earning assets, primarily from average loan and lease growth of $65.1 million, or 9.8%, during the period. �While anticipating the margin compression and its effect on earnings, we remain committed to our business plan of strategically expanding our infrastructure in order to position us for significant growth. We have recently expanded our commercial lending function by recruiting a new, highly qualified team of professionals and we have introduced a new SBA lending function, which together will result in significant new volume and revenues. At the same time, we are also revitalizing our branch network, improving our technology and actively pursuing new branch locations. We expect that as a result of these initiatives we will operate effectively as a $1 billion bank that is uniquely positioned to acquire greater market share and return greater shareholder value�. For the quarter, net interest income was $7.7 million, decreasing $0.6 million compared to a year ago. Non-interest income was $1.6 million, up $0.3 million from the first quarter of 2006, and included an increase of $0.1 million in loan fee income. The provision for loan and lease losses was $0.3 million, compared with no provision recognized in the year-ago quarter. Non-interest expense of $6.5 million increased $0.5 million from a year ago, and included a $0.3 million increase in salaries and benefits. The increase also included $0.1 million recognized for interest on taxes relative to the tax liability the Company recorded at year-end 2006. Mr. Bruno also noted, "Despite today�s economic conditions, including the housing market, we continue to maintain a low level of non-performing assets. We are mindful how the economy can shift the ability of borrowers to repay and have instituted proactive measures to mitigate potential problems. At March 31, 2007, non-performing assets were 0.21% of total assets. Net charge-offs for the quarter were $63,000 or 0.01% of average loans and leases, and the allowance for loan and lease losses at period-end was 1.37% of total loans and leases. The level of our allowance relative to our non-performing assets continues to be superior to similar banks in our market and underscores our commitment to prudent credit risk management.� At March 31, 2007, total assets were $975.9 million, up $24.9 million since December 31, 2006 and $77.4 million from a year ago, representing annualized growth of 10.5% and 8.6%, respectively. Loans and leases increased $26.2 million in the first quarter, totaling $747.6 million as of March 31, 2007, reflecting annualized growth of 14.5%. Total deposits increased $32.3 million since December 31, 2006, totaling $759.6 million at March 31, 2007, growing at an annualized rate of 17.8%. Shareholders' equity totaled $68.4 million as of March 31, 2007. In March, the Board of Directors declared a $0.14 per share quarterly cash dividend, representing an annualized cash dividend of $0.56 per share. About the Company Greater Community Bancorp is a financial holding company headquartered in Totowa, New Jersey. The Company operates fifteen full-service branches in the northern New Jersey counties of Passaic, Bergen, and Morris through its state-chartered commercial bank subsidiary, Greater Community Bank. Greater Community Bank provides traditional commercial and retail banking services to small businesses and consumers, and operates an equipment leasing and financing subsidiary, Highland Capital Corp. Greater Community Financial, a division of Greater Community Bank, provides a wide range of investment products and services exclusively through Raymond James Financial Services, Inc., member NASD/SIPC. (Securities are not FDIC insured or bank-guaranteed, and are subject to risk and may lose value). The Company offers traditional insurance products through its Greater Community Insurance Services, LLC subsidiary, and also offers title insurance and settlement services through its Greater Community Title, LLC subsidiary and personal income tax return preparation services through its Greater Community Tax Services, LLC subsidiary. Insurance policies and tax services are not insured by the FDIC or any federal government agency, may lose value, and are not a deposit of or guaranteed by Greater Community Bank or any bank affiliate. For additional information about Greater Community Bancorp and its subsidiaries visit www.greatercommunity.com or call 973-942-1111. 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 Company, 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 Company's business, competitive pressures, changes in accounting, tax or regulatory practices or requirements, resolution of tax reviews, and those risk factors detailed in the Company's periodic reports and registration statements filed with the Securities and Exchange Commission. The Company undertakes no obligation to release revisions to these forward-looking statements or reflect events or circumstances after the date of this release. Greater Community Bancorp Consolidated Balance Sheets (dollars in thousands, except per share data) � March 31, December 31, 2007� 2006� (Unaudited) ASSETS CASH AND DUE FROM BANKS - Non interest-bearing $ 21,801� $ 22,269� FEDERAL FUNDS SOLD � 44,000� � 31,600� Total cash and cash equivalents 65,801� 53,869� DUE FROM BANKS - Interest-bearing 11,967� 26,359� INVESTMENT SECURITIES - Available-for-sale 70,789� 64,942� INVESTMENT SECURITIES - Held-to-maturity (aggregate fair values of $30,358 and $36,225 at March 31, 2007 and December 31, 2006, respectively) � 30,477� � 36,391� Total investment securities 101,266� 101,333� LOANS AND LEASES, net of unearned income 747,621� 721,430� Less: Allowance for loan and lease losses � (10,272) � (10,022) Net loans and leases 737,349� 711,408� PREMISES AND EQUIPMENT, net 11,064� 10,599� ACCRUED INTEREST RECEIVABLE 4,507� 4,091� OTHER REAL ESTATE OWNED, net 349� 349� BANK-OWNED LIFE INSURANCE 15,613� 15,477� GOODWILL 11,574� 11,574� OTHER ASSETS � 16,400� � 15,910� TOTAL ASSETS $ 975,890� $ 950,969� � LIABILITIES AND SHAREHOLDERS' EQUITY DEPOSITS: Non interest-bearing $ 169,741� $ 169,013� Interest-bearing checking 100,775� 103,853� Money market 220,204� 191,912� Savings 68,015� 68,659� Time deposits less than $100 120,778� 119,470� Time deposits $100 and over � 80,110� � 74,405� Total deposits 759,623� 727,312� FEDERAL FUNDS PURCHASED -� 10,000� SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE 9,611� 8,246� FHLB ADVANCES 96,000� 96,000� SUBORDINATED DEBENTURES 24,743� 24,743� ACCRUED INTEREST PAYABLE 4,182� 3,191� OTHER LIABILITIES � 13,316� � 13,902� Total liabilities � 907,475� � 883,394� SHAREHOLDERS' EQUITY: Common stock, par value $0.50 per share: 20,000,000 shares authorized, 8,445,208 and 8,402,842 shares outstanding at March 31, 2007 and December 31, 2006, respectively 4,211� 4,201� Additional paid-in capital 58,936� 58,633� Retained earnings 4,508� 3,963� Accumulated other comprehensive income � 760� � 778� Total shareholders' equity � 68,415� � 67,575� TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 975,890� $ 950,969� Greater Community Bancorp Consolidated Statements of Income (in thousands, except per share data) � Three Months Ended March 31, 2007� 2006� (Unaudited) INTEREST INCOME: Loans and leases $ 12,614� $ 11,609� Investment securities 1,394� 1,406� Federal funds sold and deposits with banks � 606� � 318� Total interest income � 14,614� � 13,333� � INTEREST EXPENSE: Deposits 5,050� 3,477� Short-term borrowings 1,366� 1,057� Long-term borrowings � 507� � 507� Total interest expense � 6,923� � 5,041� � NET INTEREST INCOME 7,691� 8,292� � PROVISION FOR LOAN AND LEASE LOSSES � 313� � -� Net interest income after provision for loan and lease losses � 7,378� � 8,292� � NON-INTEREST INCOME: Service charges on deposit accounts 681� 679� Commissions and fees 318� 278� Loan fee income 238� 116� Gain on sale of investment securities 141� 28� Bank-owned life insurance 136� 120� All other income � 107� � 107� Total non-interest income � 1,621� � 1,328� � NON-INTEREST EXPENSE: Salaries and employee benefits 3,746� 3,399� Occupancy and equipment 976� 913� Regulatory, professional and other fees 542� 562� Computer services 253� 242� Office expenses 248� 319� Interest on taxes 120� -� Other operating expenses � 598� � 524� Total non-interest expense � 6,483� � 5,959� � INCOME BEFORE PROVISION FOR INCOME TAXES 2,516� 3,661� PROVISION FOR INCOME TAXES � 788� � 1,200� � NET INCOME $ 1,728� $ 2,461� � Weighted average shares outstanding - Basic 8,427� 8,304� Weighted average shares outstanding - Diluted 8,445� 8,340� � Earnings per share - Basic $ 0.21� $ 0.30� Earnings per share - Diluted $ 0.20� $ 0.30� Greater Community Bancorp � Three Months Ended March 31, SELECTED FINANCIAL DATA 2007� 2006� (dollars in thousands, except per share data, unaudited) � Earnings Net interest income $ 7,691� $ 8,292� Provision for loan and lease losses 313� -� Non-interest income 1,621� 1,328� Non-interest expense 6,483� 5,959� Net income 1,728� 2,461� Per Share Data1 Earnings per share - basic $ 0.21� $ 0.30� Earnings per share - diluted 0.20� 0.30� Book value per share 8.10� 8.01� Cash dividend declared 0.14� 0.13� Performance Ratios Return on average assets 0.74% 1.11% Return on average equity 10.37% 15.14% Net interest margin (tax equivalent basis) 3.58% 4.09% Efficiency ratio 70.69% 62.12% � � � � � � March 31, December 31, SELECTED BALANCE SHEET DATA & RATIOS 2007� 2006� (dollars in thousands) (Unaudited) � Period-end Balances Total assets $ 975,890� $ 950,969� Total loans and leases, net of unearned income 747,621� 721,430� Total deposits 759,623� 727,312� Total shareholders' equity 68,415� 67,575� Capital & Liquidity Shareholders' equity/ total assets 7.01% 7.11% Loans and leases/ deposits 98.42% 99.19% Asset Quality Net loan and lease charge-offs/ average loans and leases 0.01% 0.03% Nonperforming assets/ total assets 0.21% 0.15% Allowance for loan and lease losses/ total loans and leases 1.37% 1.39% � 1Adjusted retroactively for stock dividends.