Vincent O'Rourke

MAYWOOD, N.J., Oct 27, 2011 (BUSINESS WIRE) -- Community Bank of Bergen County, NJ CMTB +7.69% reported earnings today for the third quarter of 2011. Net income was $336,000, or $0.20 per diluted share, for this quarter, an increase from $261,000, or $0.16 per diluted share, reported a year ago.

The Bank showed a $48,000 decrease in net interest income this quarter over the third quarter of last year, with a $130,000 decrease in interest income contributing to the reduction, as offset by a decrease in interest expense of $82,000. The decrease in interest income this quarter is attributed to flat growth in all loan categories with new loans at the current lower rates contributing to reduce yield income. The decrease in interest expense is related to lower interest rates being paid on interest bearing deposits. However, the increase in earnings for the quarter is the result of a number of offsetting factors, most notably, a $236,000 loss taken in the third quarter of 2010 on the sale of assets, compared to no such loss during the current quarter.

For the nine months ended September 30, 2011, the Bank reported net income of $943,000, down 42 percent from its net income of $1,639,000 for the nine months ended September 30, 2010. The decrease in net income for the nine months ended September 30, 2011 is largely the result of (i) an increased provision for loan losses, up $450,000 from the provision for the nine months ended September 30, 2010, and (ii) a significant tax adjustment during the first quarter of 2010 that resulted in a $408,000 tax benefit for the nine months ended September 30, 2010 as compared to a $146,000 tax expense for the current year's period. These amounts were offset by (i) a decrease in interest expense of $142,000 due to the current lower cost of interest paying deposits, resulting in a $141,000 increase in net interest income for the nine months ended September 30, 2011, and (ii) a $194,000 decrease in non-interest expense during the period as compared to the nine months ending September 30, 2010. This reduced non-interest expense is mainly attributed to a $123,000 reduction in occupancy expenses due to the sale of unused Bank properties during the nine months of 2010 and increased rental income during the nine months of 2011 as compared to the same period in 2010, and other lower expenses including a $98,000 reduction of FDIC insurance premiums year-to-year due to the new formula used to determine premiums. A portion of the $408,000 tax benefit mentioned above for the nine months ended September 30, 2010 was reversed in the fourth quarter of 2010 after the Bank's 2010 annual financial audit was completed. Had the correct tax expense been taken during the nine months ended September 30, 2010, the Bank's net income for the nine months ended September 30, 2011 would have been $114,000 or 11 percent less than the Bank's net income for the nine months ended September 30, 2010.

Asset growth continues with a 1.4 percent increase from $310,033,000 at December 31, 2010 as restated, to $314,449,000 at September 30, 2011. Loan balances, however, show a continued reduction ($4,252,000) from December 2010, mainly a result of the net transfer of $5,836,000 in loans to the Bank's other real estate owned portfolio offset by $1,584,000 increases in the Bank's outstanding loan portfolio. Total deposits increased as compared to December 31, 2010 by $3,975,000, but the most significant increases ($3,028,000) were in the non-interest bearing category in furtherance of management's business plan.

The Bank's Tier 1 leverage ratio and risk based capital ratios remain at "well capitalized" levels of 8.16 percent and 13.01 percent, respectively. The Bank's capital closed at $26,259,000 at September 30, 2011, with book value per share at $15.78 as compared to $15.46 at December 31, 2010 as revised.

About Community Bank of Bergen County, NJ

Established in 1928, Community Bank of Bergen County, NJ (CBBC) serves the northern New Jersey community with four locations in Rochelle Park, Maywood, Fair Lawn and Garfield. Dedicated to superior service, the bank offers a range of customized personal and business banking products as well as the convenience of online banking services. Through its partnership with the StarSF/Allpoint network CBBC also offers its customers access to more than 36,000 surcharge-free ATMs nationwide.

With lending decisions made locally, and a responsive management team, Community Bank of Bergen County is committed to providing an exceptional banking experience.

*Median Home Price

*Percentage Change Year Over Year

Hilliard Lyons

We believe many investors view real estate investment trusts (REITs) as attractive investments, given their yields compared to U.S. treasuries and bonds. In 2010 the MSCI Global Equity Indices U.S. REIT Index was up 23.5% while the S&P 500 was up 12.8%.

Many of our covered companies have raised their dividends this year. At this point, based on valuation, we believe most REITs under our coverage are fairly valued.

We believe the environment is improving for our retail REITs. During our recent mall visits we have noticed a decent crowd during the week and a strong crowd on the weekends. We have not seen a lot of vacant stores during our visits. We believe consumers are still shopping, but may just be watching for sales more than they used to.

Several of our REITs have raised capital this year, either through the sale of bonds, common stock, preferred stock, or mortgage financings. Now that REITs have improved their balance sheets, we believe they will continue to focus on improving occupancy and rents. We believe many REITs are looking for additional attractive acquisition opportunities. A few of our covered names have bought all or part of their joint ventures partners' interest in properties.

Overall we believe we will walk away from this upcoming earnings season feeling a little more confident about the consumer and REITs' abilities to secure financing. We expect to see earnings results that are less messy than we have in the recent past, with hopefully fewer impairment and one-time charges. We do not expect to see a significant change in our or managements' outlook until the employment picture improves.

Companies:

Our third-quarter funds from operation (FFO) estimate for Simon Property Group (ticker: SPG) is $1.67 per share, a penny above the consensus. We believe Simon will report an increase in occupancy and an increase in rental rate in the quarter.

We expect Tanger Factory Outlet Centers (SKT) to report third-quarter FFO of 37 cents per share, in-line with the consensus. We expect to see Tanger gain occupancy in the quarter and continue to have positive leasing spreads. During the third quarter, Tanger made three acquisitions.

We expect DDR Corp. (DDR) to report third-quarter FFO per share of 25 cents, a penny above the consensus estimate. We expect to see continued progress on re-leasing vacant spaces during the quarter. DDR acquired three prime shopping centers and sold 10 assets and seven land parcels in the quarter.

We expect Gilmcher Realty Trust (GRT) to report third-quarter FFO per share of 15 cents, a penny below the consensus. We expect the company to see occupancy continue to improve.

Our third-quarter FFO estimate of 45 cents per share for Weingarten Realty Investors (WRI) is a penny below the consensus. We are eager to hear how the mom and pop retailers are doing in this environment.

We expect CBL & Associates Properties (CBL) to report third-quarter FFO per share of 47 cents, a penny above the consensus estimate. We look for another quarter of improving occupancy and rental rates for the company. During the quarter, CBL announced the acquisition of a mall in Chattanooga, Tennessee. Subsequent to the end of third quarter, CBL closed on its joint venture with TIAA-CREF.

For Kite Realty Group Trust (KRG) our third-quarter FFO per share estimate of 11 cents is equal to the consensus. We are interested to hear an update on Kite's development and redevelopment projects.

We look for American Campus communities (ACC) to report third-quarter funds from operations – modified (FFOM) of 33 cents per share, a penny above the consensus. As of September 14, the company's wholly owned portfolio was 98.4% leased, up from 98.1% last year. The projected rate increase was 3.0%.

We look for Education Realty Trust (EDR) to report third-quarter core FFO of two cents per share, a penny below the consensus. The company has reported buying one property in the third quarter. The company previously reported that opening occupancy at its same community owned portfolio was 94.9%, up 112 basis points from last year. The same community rental rate increased 4.6% from last year.

Our third-quarter core FFO per share estimate is 26 cents for First Potomac Realty Trust (FPO), a penny below the consensus estimate. We hope to see progress from the company on the lease up of its recently acquired space.

For Mid American Apartment Communities (MAA) we expect third-quarter FFO per share of $1.00, two cents below the consensus estimate. The company purchased two communities in the quarter. We expect continued strong occupancy and an increase in the rental rate during the quarter.

We expect Whitestone REIT (WSR) to report third-quarter core FFO of 22 cents per share. During the third quarter, Whitestone acquired two properties in Arizona and sold one property in Texas.

We expect MHI Hospitality Corp. (MDH) to report third-quarter FFO of 11 cents per share, excluding any gains or losses from hedging activity. (We are currently the only estimate on Baseline.) We expect to see an increase in occupancy and average daily rates in the quarter.

by Carol L. Kemple

If you're looking to make a long-term bet on the housing market, than the place to start is with one of America's largest cities: Houston.

Houston currently ranks as the country's fourth-largest city behind New York, Los Angeles and Chicago, with a population of just over 2 million. However, just being a major city doesn't count for much these days. New York and Los Angeles are growing very slowly, and Chicago is losing population.

The Houston metro-area population in 2010 numbered just under 6 million, but the most important statistic in this regard is that during the past decade Houston has added more people than any other of the nation's 366 metro areas, reported Rice University's Kinder Institute for Urban Research.

According to the Rice University report, Houston grew by 1.2 million people from 2000 to 2010, nudging out Dallas-Fort Worth as the fast-growing U.S. metro. Don't expect that growth to slow down in the near future.

"Houston will double in population between now and 2035," said Ted C. Jones, senior vice president and chief economist with Stewart Title Guaranty Co. in Houston. "Houston will see the same net in-, net out-migration that the city experienced between 2000 and 2007."

Why are people coming to Houston? The short answer is jobs.

Between June 2010 and June 2011, the United States as a whole added just over 1 million jobs; Texas accounted for 29.2 percent of those jobs, yet the state has only 8.1 percent of all jobs in the country, Jones said.

Over the 12-month period from August 2010 to August 2011, Houston added 54,300 net new jobs, Jones said.

Houston has recouped all the jobs lost during the recession, said Carlos Bujosa, vice president of general brokerage services for Transwestern in Houston and chairman of the board of the Houston Association of Realtors.

"We are starting to see out-of-state license plates again," said Bujosa. "Houston is not really a tourist destination, so people coming from out of town are moving here. When word got out that Houston's employment is better than elsewhere, people began moving here looking for jobs."

As I often mention, I live in the Phoenix-Mesa-Scottsdale metroplex, which added 941,011 new folks from 2000 to 2010 (No. 5 ranking) and from reports in the local papers, the population continues to grow. This hasn't prevented the area from being one of the great housing disasters of the current recession. This didn't happen in Houston, which has weathered the recession very nicely.

"One of the good things about the Houston market is that we avoided the housing bubble," Bujosa said. "We never had a big run-up in prices as happened in other parts of the country. Our home prices were increasing, but never at an unreasonable rate, mostly in the single digits annually."

It wasn't that the Houston real estate community was smarter than its brethren elsewhere in the country; the moderation was the result of experience with bubbles. Houston and the rest of Texas went through a calamitous period in the early 1980s when the oil and gas industry fractured. Local banks and thrifts collapsed and the housing market tanked.

Lesson learned. The city did not overbuild during the housing boom years, which was fortunate because average home sales peaked in 2007 at more than 6,500 per month (for the prior 12 months) and has since fallen to just over 4,500 per month, as reported by HAR and Stewart.

Despite the population increase, the metro is still not overbuilding.

"This year we will build about 16,000 new homes in the Houston area, that's down from 20,000 homes last year," said Bujosa. "At peak, we were adding about 50,000 homes; 25,000 to 30,000 homes are good numbers for Houston."

The average home price dipped below $200,000 during the heart of the current recession, but in July 2011 the average price of a single-family home hit $224,110, up from $222,534 in July 2010, reported Margie Dorrance of Keller Williams Realty Metropolitan and former chairperson of the HAR.

Dorrance, who works the high-end neighborhoods in the core of Houston, said the biggest problem she has is that the professionals moving into Houston can't sell their homes in their old neighborhoods somewhere else around the country. For the first time, she is now doing leases.

"When they move here, they really would love to buy a house, but until they sell a property in another part of the country they really need to lease," she said. "Leasing in Houston was always at a small level, but it has dramatically increased this past year."

Then when clients can buy, it's not as easy as expected.

Dorrance gives this example: A client and his family moved from California a year ago to one of the nicer neighborhoods near Houston's famed medical complexes, but they couldn't sell the old house so they leased.

Eventually, the old house did sell and the client sought to buy in the same neighborhood. The client was outbid on three homes before getting a fourth home in the $800,000 range.

Jones, the economist, breaks out the problem this way: You need 1.25 to 1.5 new jobs for every new dwelling unit; we have almost 2.5 new jobs for a new dwelling unit.

Or you can look at the Houston paradox this way: In July, a home for sale in Houston sat on the market an average of 7.6 months, down 2 percent from the year before.

About her experience with the client who was outbid on three homes, Dorrance said, "We couldn't believe we were having so much difficulty getting a house within their price range."

Six Month Price Range for 2-4 Family Homes in Bergen County (04/01/2011 - 10/21/2011)