New Millennium Bank Reports Second Quarter Loss

NEW BRUNSWICK, N.J., Aug. 19 /PRNewswire-FirstCall/ -- New Millennium Bank (OTC Bulletin Board: NMNB) today announced a second quarter loss of $1.06 million and a $1.97 million loss for the first six months of 2010, largely attributable to the continued impact on earnings of non-performing loans within the commercial sector and to costs associated with those loans, according to Michael Ross, Chairman of the Board, and Chris Van Der Stad, President and CEO.  

In addition, with the local business community continuing to struggle with a lingering slow economy, New Millennium Bank does not expect its financial performance to significantly improve for the remainder of the year, according to Van Der Stad.

"While economists tell us a recovery has begun, we have yet to see significant improvement in the economic conditions on the Main Streets of the communities we serve," Van Der Stad said.  "That has a real impact on a community bank such as New Millennium that serves and lends to the local business community."  

New Millennium Bank lost $1.06 million in the second quarter of 2010, compared to a loss of $161,000 in the second quarter 2009.  At June 30, 2010, New Millennium Bank's total assets increased 4.06 percent to $250.0 million; net loans increased 1.85 percent to $178.5 million; and deposits increased 6.80 percent to $205.5 million, when compared to June 30, 2009.  On June 30, 2010, the Total Risk Based Capital Ratio, Tier 1 Risk Based Capital Ratio and Tier 1 Leverage Ratio for the Bank were 12.17 percent, 10.90 percent and 8.04 percent, respectively.  A bank is considered well capitalized if these ratios are equal to or greater than 10.0 percent, 6.0 percent and 5.0 percent, respectively, according to Van Der Stad.

"Non-performing loans continue to be the most significant challenge we are facing on earnings," Van Der Stad said.  "In addition to earning less interest than projected when the loans were made, non-performing loans also impact earnings through provisions the Bank makes for these loans as well as collection expenses."

New Millennium Bank previously constricted its lending parameters in the commercial sector in response to continued weakness in commercial credit quality, according to Van Der Stad.  While the Bank practiced prudent and sound lending decisions prior to the economic downturn, the recession's impact on the local commercial sector demanded additional safeguards to protect the Bank and its customers, such as strengthened oversight in the lending area and an increase in staffing in the collections area, he added.

However, New Millennium Bank has not abandoned the business community, Van Der Stad stressed.  The Bank recognizes the vital role community banks play in supporting local communities and will play in allowing the business community to lead the local recovery, he added.  New Millennium Bank is a Small Business Administration preferred lender.

"We cannot and will not abandon our role in supporting the local communities we serve," Van Der Stad said.  "A healthy local and state economy is good for not only the communities we serve but also for our business.  When the community thrives, so does the Bank."

Also contributing to the second quarter loss was the continued hold on growth in the Bank's credit card program, Van Der Stad reported.  Due to certain regulatory concerns, the Bank temporarily stopped accepting or processing applications or issuing new cards through third-party marketing vendors during the second quarter.  The Bank is seeking to satisfy these regulatory concerns but the continued loss of credit card application fee income will continue to adversely impact earnings.

"The Bank's performance in the last six quarters has been disappointing, and we certainly should be prepared for more disappointing results while we wait for the economic recovery to solidify and then positively impact local communities and local businesses in a meaningful way," said Van Der Stad.  "In the meantime, we remain committed to a prudent strategy of management and growth we believe will see the Bank through this challenging period and result in a stronger bank going forward."

About New Millennium Bank

New Millennium Bank currently has three offices to serve its customers at 57 Livingston Avenue, New Brunswick, NJ; 695 Hamilton Street, Somerset, NJ; and 464B Elizabeth Avenue, Franklin Township, NJ.   The Bank offers a full range of Internet banking services to support its retail and commercial customers.  In addition to its commercial lending department, New Millennium Bank is a Nationwide Preferred Small Business Administration (SBA) Lender, lending primarily in New Jersey, New York and Pennsylvania.  New Millennium Bank also offers secured credit cards throughout the United States to help individuals re-establish their credit. The Bank is an equal housing lender and a member of the FDIC. Visit us at www.nmbonline.com.

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 management's confidence and strategies and management's expectations about new and existing programs and products, relationships, opportunities, taxation, technology and market conditions.  These statements may be identified by such forward-looking terminology as "expect," "believe," "view," "opportunity," "allow," "continues," "reflects," "typically," "usually," "anticipate," or similar statements or variations of such terms. Such forward-looking statements involve certain risks and uncertainties. Actual results may differ materially from such forward-looking statements. New Millennium Bank assumes no obligation for updating any such forward-looking statement at any time.

SOURCE New Millennium Bank