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 $269,000 for the third quarter of 2011, 81.8% higher than net income of $148,000 for the third quarter of 2010. On a per share basis, the Corporation earned $0.09 (basic and diluted) in the third quarter, compared to $0.05 (basic and diluted) in the prior year's third quarter.
For the first nine months of 2011, the Corporation's net income was $602,000, or $0.21 per share, (basic and diluted) compared to net income of $476,000, or $0.09 per share, (basic and diluted) for the same three quarters in 2010. The 2010 per common 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 third quarter and for the first nine months of the year benefited from a reduced provision for loan losses, the recovery of a prior period non loan charge-off of $90,000, and a lower FDIC assessment. The provision for loan losses totaled $225,000 for the first nine months of 2011, compared to $375,000 for the first nine months of 2010. Noninterest expenses declined in the quarter ended September 30, 2011 as compared to the third quarter of 2010. The net interest margin, on a tax-equivalent basis, was 4.63% in the third quarter of 2011, an improvement of 74 basis points over the net interest margin for the third quarter of 2010. The Corporation's tangible book value was $6.84 at September 30, 2011, compared to tangible book value of $6.61 at the end of the previous quarter.
Total assets were $156.1 million at September 30, 2011 compared to $169.9 million at the end of the third quarter in 2010. Gross loans were $109.2 million at September 30, 2011. This was approximately $1 million below the level of loans at September 30, 2010 but an increase of $2.9 million when compared to December 31, 2010. Loans past due thirty days or more totaled $1.8 million at the end of the third quarter, an improvement of approximately $400,000 when compared to the end of the previous quarter. The allowance for loan losses was $2,185,000 at September 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: "We are pleased to report another strong earnings quarter. Loan volume, which had been in decline since the beginning of the recession, is starting to pick up again. Loan quality continues to improve and is reflected by a drop in delinquencies. It is likely that we will be able to further reduce our quarterly provision for loan losses as we close out the year. Hilltop's net interest margin is outstanding and our cost of funds is among the lowest of all the banks in New Jersey. The lower level of assets reflects Hilltop's deliberate, disciplined approach to increase margins and profits. We are controlling noninterest expenses and our calling officers continue to work hard to bring new customers into the Bank. Despite the challenges of the current economy, Hilltop is really doing well."
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.