SUMMIT, N.J., Hilltop Community Bancorp, Inc. (the Corporation) (OTCQB: HTBC), the holding company for Hilltop Community Bank (the Bank or Hilltop), today reported net income of $243,000 for the second quarter of 2011. This was 56.8% higher than earnings of $155,000 for the second quarter of 2010. On a per share basis, the Corporation earned $0.09 (basic and diluted) in the second quarter. Return on average assets was 0.61% for the second quarter, compared to 0.36% for the second quarter of 2010.
Net income for the first six months of 2011 was $333,000 ($0.12 per common share, basic and diluted) compared to $328,000 ($0.03 per common share, basic and diluted) for the first six months of the prior year. The 2010 per share results were affected by $229,000 of preferred stock dividends and accretion related to the Capital Purchase Program (TARP) funds that were returned to the U.S. Treasury in the second quarter of 2010.
The Corporation's earnings for the second quarter and the first half of the year benefited from a reduction in the provision for loan losses and from the recovery of prior year's interest totaling $54,000 on a nonaccrual loan that was brought current and restored to accruing status. The provision for loan losses was $135,000 in the second quarter of 2010 and $45,000 in the second quarter of the current year. Noninterest expenses also declined slightly in this year's second quarter when compared to the previous year's second quarter. Hilltop's net interest margin on a tax equivalent basis was 4.31% in the second quarter of 2011, compared to 3.90% in the second quarter of 2010. The Corporation's tangible book value was $6.61 at June 30, 2011, an increase of $.29 over the tangible book value at June 30, 2010.
Total assets declined from $178.9 million at June 30, 2010 to $160.0 million at June 30, 2011. Gross loans also declined from mid-year to mid-year by approximately $3.8 million. Loans past due thirty days or more totaled $2.2 million at June 30, 2011, an improvement over December 31, 2010 when that category of loans totaled $2.7 million. The allowance for loan losses was $2,110,000 at June 30, 2011, 2.00% of total loans.
In a joint statement, Chairman of the Board Richard D. Wellbrock and President & CEO Mortimer J. O'Shea commented: "Hilltop's solid earnings performance in the second quarter reflects an improvement in our loan portfolio which allowed us to reduce our loan loss provision. Our earnings also reflect control of noninterest expenses and a net interest margin that continues to compare favorably with other community banks. We are particularly pleased that we're seeing a strengthening in commercial loan demand. That increased loan demand is not yet evident in our loan totals, but we have a record commercial loan pipeline at the present time and we expect to see some meaningful loan growth in future quarters. Our strong credit culture served us well as all banks struggled through tough economic times. Our calling officers never stopped knocking on doors as we worked our way through the recession and we look forward to strong performance in the third and fourth quarters."
Hilltop Community Bancorp, Inc. is the parent holding company for Hilltop Community Bank. Hilltop 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.