American Bancorp of New Jersey, Inc. Announces Fiscal 2008 Earnings

BLOOMFIELD, N.J.--(Business Wire)--
American Bancorp of New Jersey, Inc. (NASDAQ: ABNJ) ("American" or
the "Company"), the holding company for American Bank of New Jersey
(the "Bank"), announced today that it had net income of $1.2 million
for the year ended September 30, 2008. By comparison, net income for
the year ended September 30, 2007 was $557,000. Basic and diluted
earnings per share for the year ended September 30, 2008 were $0.12
and $0.12, respectively. By comparison, for the year ended September
30, 2007, basic and diluted earnings per share were $0.05 and $0.05,
respectively.

For the three months ended September 30, 2008, the Company
reported net income of $716,000 compared to a net loss of $72,000 for
the three months ended September 30, 2007. Basic and diluted earnings
per share for the three months ended September 30, 2008 were $0.07 and
$0.07, respectively, compared to $(0.01) and $(0.01), respectively,
for the three months ended September 30, 2007. Additional information
concerning the Company's comparative financial performance for the
three months ended September 30, 2008 and September 30, 2007 is
provided in the tabular presentation at the end of this document.

For the year ended September 30, 2008, loans receivable, net
increased $40.7 million or 9.3% to $478.6 million from $437.9 million
at September 30, 2007. The growth was comprised of net increases in
commercial loans, including multi-family, commercial real estate,
construction and business loans, totaling $39.9 million. The increase
in loans receivable, net also included an increase in the balance of
1-4 family first mortgage loans of $297,000, net increases in home
equity loans and home equity lines of credit totaling $486,000 and net
increases in consumer loans of $504,000. Offsetting the growth in
these categories was a net increase to the allowance for loan losses
totaling $467,000.

For that same period, the balance of the Company's investment
securities increased by $23.8 million. This net growth in securities
was largely attributable to a wholesale growth transaction in March
2008 through which the Company purchased approximately $50.0 million
of mortgage-related investment securities funded by an equivalent
amount of borrowings from the FHLB and through reverse repurchase
agreements. The net interest income resulting from this transaction
continues to augment the Company's earnings as it incurs the near term
costs associated with executing its business plan. The growth in
securities associated with this transaction was partially offset by
the continued reinvestment of a significant portion of the funds
received from maturing debentures and other mortgage-related security
repayments into the loan portfolio. The Company's balance of cash and
cash equivalents decreased by $17.0 million which also provided a
portion of the funding for the Company's reported net loan growth and
continued share repurchases during fiscal 2008.

The balance of deposits increased $19.1 million for the year ended
September 30, 2008. This net growth reflected increases in
certificates of deposit and noninterest bearing checking accounts of
$62.3 million and $953,000, respectively. This growth was offset by
reductions in interest bearing checking and savings accounts of $36.5
million and $7.7 million, respectively. For the same period,
borrowings increased $37.9 million reflecting the additions to FHLB
advances and reverse repurchase agreements associated with the $50.0
million wholesale growth transaction noted above offset by the net
repayment of $12.1 million of maturing FHLB term advances.
Additionally, the Company reported a net increase of $11.4 million in
treasury stock attributable primarily to the Company's share
repurchase programs. For the year ended September 30, 2008, the
Company repurchased a total of 1,090,664 shares at an average price of
$10.43 per share.

The Company's yield on earning assets decreased 5 basis points to
5.59% for the year ended September 30, 2008 from 5.64% for the year
ended September 30, 2007. This decrease reflected the impact of
overall reductions in market interest rates on the yields of repricing
assets which more than offset the beneficial impact on earning asset
yields resulting from the Company's growth in higher yielding
commercial loans.

The decrease in the yield on earning assets between the
comparative years was outpaced by a reduction in the Company's
interest costs for those same periods. The Company's cost of
interest-bearing liabilities decreased 48 basis points to 3.73% for
the year ended September 30, 2008 from 4.21% for the year ended
September 30, 2007. This decrease in interest cost was primarily
attributable to two related factors. First, the Company reduced the
interest rates paid on deposits generated through the three full
service branches opened during fiscal 2007 on which promotional
interest rates had originally been paid. Second, reductions in market
interest rates enabled the Company to reduce rates paid on many
interest-bearing deposit types across all branches. In total, the
Company's net interest spread widened 43 basis points to 1.87% from
1.44% for those same comparative periods.

The factors resulting in the widening of the Company's net
interest spread also positively impacted the Company's net interest
margin for the year ended September 30, 2008. However, the impact of
the Company's share repurchase plans on net interest margin partially
offset the benefits of the widening net interest spread. For the
comparative years ended September 30, 2008 and 2007, the average
balance of treasury stock increased $17.8 million reflecting the
Company's share repurchase activity. The foregone interest income on
the earning assets used to fund those share repurchases during fiscal
2008 significantly impacted the Company's net interest margin reported
for that year. As a result of these offsetting factors, the Company
reported a $1.7 million increase in net interest income to $14.0
million for fiscal 2008 from $12.3 million for fiscal 2007 reflecting
an 11 basis point increase in net interest margin to 2.50% from 2.39%
for those same comparative periods.

The increase in net interest income was partially offset by a
comparatively greater provision to the allowance for loan losses. For
those same comparative periods, the Company's loan loss provision
increased $56,000 to $501,000 from $445,000. The expense for fiscal
2008 included a provision of $34,000 attributable to one impaired
construction loan, that portion of which was deemed uncollectible by
management during its asset quality review conducted at March 31, 2008
and therefore charged off. The remaining balance of the impaired loan
at September 30, 2008, net of that earlier charge off, was
approximately $146,000. By contrast, the expense for fiscal 2007
reflected a reversal of an $86,000 impairment reserve that was no
longer required. Excluding these adjustments, the provision for loan
losses for both comparative periods primarily resulted from the
application of historical and environmental loss factors against the
net growth in loans in accordance with the Bank's loan loss
methodology.

For the year ended September 30, 2008, noninterest income
increased $369,000 to $1.8 million from $1.4 million for fiscal 2007.
The growth in noninterest income was largely attributable to increases
in deposit service fees and charges which increased $233,000 in fiscal
2008 compared to fiscal 2007. A portion of that increase was
attributable to deposit service fees and charges at the Bank's de novo
branches opened during fiscal 2007. However, the reported increase was
also due to growth in deposit-related fees and charges within the
Bank's other branches. The Company also reported an increase of
$78,000 in income from the cash surrender value of life insurance
attributable to a combination of higher average balances and improved
yields on those assets. Additionally, the Company reported an increase
of $85,000 in other noninterest income attributable primarily to
growth in loan-related fees and charges including, but not limited to,
increases in prepayment penalties and late charges. Offsetting a
portion of these increases in noninterest income was a $34,000
reduction in loan sale gains during fiscal 2008 compared with fiscal
2007. The reduction reflects the Company's discontinuation of selling
a portion of one-to four-family loans originated into the secondary
market - as had been the Company's strategy during fiscal 2007 - in
favor of adding all loans originated in fiscal 2008 to the portfolio.

For the year ended September 30, 2008, noninterest expense
increased $998,000 to $13.5 million from $12.5 million for fiscal
2007. This growth in noninterest expense was primarily attributable to
comparative increases in salaries and employee benefits of $206,000,
increases in occupancy and equipment expense of $791,000 and increases
in data processing, legal and other noninterest expenses totaling
$34,000, $48,000 and $103,000, respectively. These increases in
noninterest expense were partially offset by a $177,000 reduction in
advertising and marketing expenses.

The reported increase in salaries and employee benefits for fiscal
2008 included a charge resulting from the death of a director emeritus
of the Company during the second fiscal quarter ended March 31, 2008.
Under the terms of the Company's restricted stock and stock option
plans, the vesting of the remaining unearned benefits accruing to the
former director through these plans was automatically accelerated. As
such, the Company incurred an acceleration of the remaining pre-tax
expenses associated with these benefits totaling approximately
$254,000 during that quarter. Other increases in compensation expense,
including those attributable to the three de novo branches opened
during fiscal 2007, were more than offset by the Company's
compensation expense control efforts which resulted in a nearly 10%
reduction in the number of full time equivalent employees during
fiscal 2008.

The reported decrease in advertising and marketing expense during
fiscal 2008 was largely attributable to the absence of grand opening
expenses during fiscal 2008 associated with the three de novo branches
opened during fiscal 2007. The full year's operating costs of those
branches contributed significantly to the reported increase in
occupancy and equipment and data processing expenses for fiscal 2008.
However, such increases also reflected the ongoing operating costs
associated with the Bank's relocated Bloomfield branch which opened in
April, 2008. Additionally, the reported increase in occupancy and
equipment expense also reflected the costs associated with outsourcing
a significant portion of the Company's information technology
infrastructure support services that had been provided by in-house
resources during the earlier comparative period.

The reported increase in legal expense was primarily attributable
to revisions to benefit plan agreements as required by
newly-implemented Internal Revenue Service regulations as well as
other human resource-related legal expenses.

Finally, the reported increase in other noninterest expense
resulted primarily from increases in FDIC insurance expense. This
increase was attributable, in part, to overall growth in the balance
of FDIC-insured deposits. However, the increase also reflected the
expiration of FDIC insurance credits during fiscal 2008 which had
previously reduced the Bank's net cost of FDIC deposit insurance
throughout fiscal 2007.

The following tables present selected balance sheet data as of
September 30, 2008 and September 30, 2007 and selected operating data
for fiscal year and three months ended September 30, 2008 and
September 30, 2007.

-0-
*T
FINANCIAL HIGHLIGHTS
(unaudited)
At September 30, At September 30,
2008 2007
------------------- -------------------
% Total % Total
Balance Assets Balance Assets
--------- --------- --------- ---------
SELECTED FINANCIAL DATA (in
thousands):
Assets
Cash and cash equivalents $ 20,375 3.28% $ 37,421 6.52%
Securities available-for-sale 81,163 13.06 58,093 10.13
Securities held-to-maturity 7,509 1.21 6,730 1.17
Loans held for sale - - 1,243 0.22
Loans receivable, net 478,574 76.99 437,883 76.32
Premises and equipment 11,894 1.91 10,856 1.89
Federal Home Loan Bank stock 2,743 0.44 2,553 0.45
Cash surrender value of life
insurance 13,761 2.21 13,214 2.30
Accrued interest receivable 2,391 0.38 2,212 0.39
Other assets 3,223 0.52 3,533 0.61
--------- --------- --------- ---------
Total assets $621,633 100.00% $573,738 100.00%
========= ========= ========= =========
Liabilities and equity
Deposits $447,687 72.02% $428,600 74.70%
Advances for taxes and
insurance 2,811 0.45 2,702 0.47
Borrowings 75,547 12.15 37,612 6.56
Other liabilities 4,740 0.77 4,231 0.74
Equity 90,848 14.61 100,593 17.53
--------- --------- --------- ---------
Total liabilities and equity $621,633 100.00% $573,738 100.00%
========= ========= ========= =========

% Total % Total
Loan Data Balance Loans Balance Loans
--------- --------- --------- ---------
1-4 family mortgage loans $263,744 55.11% $263,448 60.16%
Home equity loans 14,053 2.94 14,625 3.34
Home equity lines of credit 20,887 4.36 19,829 4.53
Multifamily mortgage loans 36,855 7.70 30,552 6.98
Nonresidential mortgage loans 90,644 18.94 68,431 15.63
Land and property acquisition
loans 6,665 1.39 3,340 0.76
Construction loans 40,051 8.37 32,542 7.43
Business loans 7,551 1.58 7,029 1.61
Consumer loans 1,159 0.24 655 0.15
Allowance for loans losses (3,035) (0.63) (2,568) (0.59)
--------- --------- --------- ---------
Loans receivable, net $478,574 100.00% $437,883 100.00%
========= ========= ========= =========

% Total % Total
Deposit Data Balance Deposits Balance Deposits
--------- --------- --------- ---------
Noninterest-bearing deposits 31,447 7.02% 30,494 7.11%
Interest-bearing checking 75,307 16.82 111,795 26.08
Savings 85,092 19.01 92,778 21.65
Certificates of deposit 255,841 57.15 193,533 45.16
--------- --------- --------- ---------
Deposits $447,687 100.00% $428,600 100.00%
========= ========= ========= =========
*T

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*T
FINANCIAL HIGHLIGHTS (continued)
(unaudited)
At September 30, At September 30,
2008 2007
----------------- -----------------
Capital Ratios
Equity to total assets (%) 14.61 17.53
Outstanding shares (#) 10,859,692 11,946,190
Asset Quality Ratios:
Non-performing loans to total
loans (%) 0.24 0.28
Non-performing assets to total
assets (%) 0.18 0.22
Allowance for loan losses to non-
performing loans (%) 266.97 205.56
Allowance for loan losses to total
loans (%) 0.63 0.58

For the year For the three
ended months ended
September 30, September 30,
2008 2007 2008 2007
-------- -------- ------- ---------
SELECTED OPERATING DATA
(in thousands):
Total interest income $31,437 $29,029 $8,050 $ 7,654
Total interest expense 17,397 16,731 4,030 4,646
-------- -------- ------- ---------
Net interest income 14,040 12,298 4,020 3,008
Provision for loan losses 501 445 71 125
-------- -------- ------- ---------
Net interest income after
provision for loan losses 13,539 11,853 3,949 2,883
Noninterest income 1,791 1,422 477 371
Noninterest expense 13,542 12,544 3,279 3,427
-------- -------- ------- ---------
Income (loss) before income taxes 1,788 731 1,147 (173)
Provision (benefit) for income
taxes 560 174 431 (101)
-------- -------- ------- ---------
Net income (loss) $ 1,228 $ 557 $ 716 $ (72)
======== ======== ======= =========
Performance Ratios:
Return on average assets 0.21% 0.10% 0.46% (0.05)%
Return on average equity 1.31 0.51 3.19 (0.28)
Net interest rate spread 1.87 1.44 2.21 1.39
Net interest margin 2.50 2.39 2.75 2.26
Noninterest income to average
total assets 0.30 0.26 0.31 0.26
Noninterest expense to average
total assets 2.27 2.31 2.11 2.43
Efficiency Ratio 85.54 91.43 72.91 101.43
PER SHARE DATA:
Earnings per share
Basic 0.12 0.05 0.07 (0.01)
Diluted 0.12 0.05 0.07 (0.01)
*T

The foregoing material contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995
concerning our financial condition, results of operations and
business. We caution that such statements are subject to a number of
uncertainties and actual results could differ materially, and,
therefore, readers should not place undue reliance on any
forward-looking statements. We do not undertake, and specifically
disclaim, any obligation to publicly release the results of any
revisions that may be made to any forward-looking statements to
reflect the occurrence of anticipated or unanticipated events or
circumstances after the date of such statements.

American Bancorp of New Jersey, Inc.
Fred G. Kowal, 973-748-3600
President and Chief Operating Officer

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