================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
----------
FORM 10-QSB
(Mark One)
(X) Quarterly report pursuant to section 13 or 15(d)
of the Securities Exchange Act of 1934
for the quarterly period ended September 30, 1997.
( ) Transaction report pursuant to section 13 or 15(d)
of the Securities Exchange Act of 1934
for the transition period from ___________ to ____________.
Commission file number: 1-12165
BRIDGE VIEW BANCORP
------------------------------------------------------
(Exact name of registrant as specified in its charter)
NEW JERSEY 22-3461336
------------------------------- ----------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification)
457 SYLVAN AVENUE, ENGLEWOOD CLIFFS, NJ 07632
- - ---------------------------------------- ----------
(Address of principal executive offices) (zip code)
201-871-7800
----------------------------------------------------
(Registrant's telephone number, including area code)
NOT APPLICABLE
----------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days.
X YES NO
--- ---
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of the Registrant's classes of common
stock, as of the last practicable date.
1,260,836 SHARES OF COMMON STOCK AS OF OCTOBER 15, 1997.
================================================================================
<PAGE>
BRIDGE VIEW BANCORP AND SUBSIDIARY
PART I -- FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Statements of Financial Condition
September 30, 1997 and December 31, 1996 (unaudited)
Consolidated Statements of Income
Three months ended September 30, 1997 and 1996 (unaudited) and Nine
months ended September 30, 1997 and 1996 (unaudited)
Consolidated Statements of Cash Flows Nine months ended September 30,
1997 and 1996 (unaudited)
Notes to Unaudited Consolidated Financial Statements
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
2
<PAGE>
BRIDGE VIEW BANCORP AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (Unaudited)
September 30, December 31,
1997 1996
------------ ------------
(Unaudited)
(000's omitted)
ASSETS
Cash and cash equivalents:
Cash and due from banks .......................... $ 13,028 $ 9,058
Federal funds sold ............................... 2,500 14,500
-------- --------
TOTAL CASH AND CASH EQUIVALENTS .................... 15,528 23,558
-------- --------
Securities:
FHLBNY Stock, at cost ............................ 476 476
Available for sale ............................... 14,592 8,644
Held to maturity ................................. 26,573 27,517
-------- --------
TOTAL SECURITIES ................................... 41,641 36,637
-------- --------
Loans, net of allowance for loan losses
of $1,009 at September 30, 1997 and $861 at
December 31, 1996 ................................ 82,435 75,752
Premises and equipment, net ........................ 1,688 1,752
Other real estate owned ............................ 0 139
Accrued interest receivable and other assets ....... 1,295 1,222
-------- --------
TOTAL ASSETS ....................................... $142,587 $139,060
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Non-interest bearing demand deposits ............. $ 34,182 $ 29,352
Interest bearing deposits:
Savings, demand, and time deposits ............. 73,790 72,577
Certificates of deposit $100,000+ .............. 19,343 24,404
-------- --------
TOTAL DEPOSITS ..................................... 127,315 126,333
-------- --------
Accrued Interest Payable & Other Liabilities ....... 609 509
-------- --------
TOTAL LIABILITIES .................................. 127,924 126,842
-------- --------
Commitments and contingencies
Stockholders' equity:
Common stock, no par value, authorized
5,000,000 shares issued and outstanding
1,260,836 in 1997 and 1,048,320 in 1996 ........ 13,342 10,647
Undivided profits ................................ 1,304 1,573
Net unrealized holding gains (losses) on
securities available for sale .................. 17 (2)
-------- --------
TOTAL STOCKHOLDERS' EQUITY ......................... 14,663 12,218
-------- --------
Total Liabilities and Stockholders' Equity ......... $142,587 $139,060
======== ========
See notes to unaudited consolidated financial statements.
3
<PAGE>
<TABLE>
BRIDGE VIEW BANCORP AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
<CAPTION>
Three Months Ended Nine Months Ended
September 30 September 30
------------------ ------------------
1997 1996 1997 1996
------ ------ ------ ------
(000's omitted except per share data)
<S> <C> <C> <C> <C>
Interest Income:
Loans, including fees ........................... $1,884 $1,544 $5,361 $4,318
Federal funds sold .............................. 38 71 253 196
Investment Securities:
Taxable ....................................... 521 318 1,612 943
Tax-exempt .................................... 62 76 177 176
------ ------ ------ ------
TOTAL INTEREST INCOME ............................. 2,505 2,009 7,403 5,633
------ ------ ------ ------
Interest expense:
Savings deposits ............................... 212 183 591 528
Other time deposits ............................ 272 207 1,024 553
Certificates of deposit $100,000+ .............. 216 201 780 487
Borrowed funds ................................. 6 9 7 14
------ ------ ------ ------
TOTAL INTEREST EXPENSE ............................ 706 600 2,402 1,582
------ ------ ------ ------
Net Interest Income ......................... 1,799 1,409 5,001 4,051
Provision for loan losses ......................... 40 50 160 163
------ ------ ------ ------
Net interest income after provision
for loan losses .............................. 1,759 1,359 4,841 3,888
------ ------ ------ ------
Non-interest income:
Service charge income ........................... 271 188 798 551
------ ------ ------ ------
TOTAL NON-INTEREST INCOME ......................... 271 188 798 551
------ ------ ------ ------
Non-interest expense:
Salaries and related expenses ................... 493 390 1,491 1,155
Premises and fixed assets ....................... 238 190 706 550
Other ........................................... 349 331 1,049 908
------ ------ ------ ------
TOTAL NON-INTEREST EXPENSE ........................ 1,080 911 3,246 2,613
------ ------ ------ ------
Income before income taxes ...................... 950 636 2,393 1,826
Income tax expense ................................ 376 248 940 712
------ ------ ------ ------
NET INCOME ........................................ $ 574 $ 388 $1,453 $1,114
------ ------ ------ ------
Per Common Share:
Net Income (Primary) ............................ $ 0.46 $ 0.32 $ 1.18 $ 0.91
Net Income (Fully Diluted) ..................... $ 0.46 $ 0.32 $ 1.18 $ 0.91
See notes to unaudited consolidated financial statements.
</TABLE>
4
<PAGE>
BRIDGE VIEW BANCORP AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
Nine Months Ended
September 30
--------------------
1997 1996
-------- --------
(000's omitted)
Cash flows from operating activities:
Net income ........................................... $ 1,453 $ 1,114
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization .................... 122 112
Provision for loan losses ........................ 160 163
Increase in accrued interest receivable
and other assets ............................... (73) (174)
Increase in accrued interest
Payable and other liabilities .................. 100 (147)
Other ............................................ 0 8
-------- --------
Net Cash Provided by Operating Activities .............. 1,762 1,076
-------- --------
Cash flows from investing activities:
Proceeds from maturities of
investment securities .............................. 16,065 8,828
Purchase of investment securities .................... (21,102) (15,248)
Net increase in loans ................................ (6,683) (14,470)
Addition to premises and equipment ................... (58) (147)
-------- --------
Net Cash Used in Investing Activities .................. (11,778) (21,037)
-------- --------
Cash flows from financing activities:
Net increase in deposits ............................. 982 21,154
Proceeds from issuance of common stock ............... 1,342 15
Cash paid for dividends .............................. (338) (278)
-------- --------
Net Cash Provided by Financing Activities .............. 1,986 20,891
-------- --------
Net change in cash and cash equivalents ................ (8,030) 930
Cash and cash equivalents as of beginning of period .... 23,558 14,531
-------- --------
Cash and Cash Equivalents as of End of Period .......... $ 15,528 $ 15,461
======== ========
Cash paid during the period for:
Interest ............................................. $ 2,456 $ 1,582
Income Taxes ......................................... $ 873 $ 712
See notes to unaudited consolidated financial statements.
5
<PAGE>
BRIDGE VIEW BANCORP AND SUBSIDIARY
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
A. BASIS OF PRESENTATION
Bridge View Bancorp ("the Company"), a bank holding company, was incorporated in
May 1996 with authorized capital of 5,000,000 shares of no par value common
stock. On December 6, 1996 the Company acquired 100 percent of the shares of
Bridge View Bank ("the Bank") in an exchange of two shares of Company common
stock for each share of Bank common stock (the "Exchange Rate.") The
consolidated condensed financial statements presented for the period ended
September 30, 1996 reflect information for the Bank prior to its acquisition by
the Company and have been restated to reflect the Exchange Rate.
The consolidated condensed financial statements included herein have been
prepared without audit pursuant to the rules and regulations of the Securities
and Exchange Commission. Certain information and footnote disclosures normally
included in financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to such rules and
regulations. The accompanying consolidated financial statements reflect all
adjustments which are, in the opinion of management, necessary to a fair
statement of the results for the interim periods presented. Such adjustments are
of a normal recurring nature. These consolidated unaudited financial statements
should be read in conjunction with the audited financial statements and the
notes thereto as of and for the year ended December 31, 1996. The results for
the three and nine months ended September 30, 1997 are not necessarily
indicative of the results that may be expected for the year ended December 31,
1997.
The unaudited consolidated financial statements include the accounts of the
Company and the Bank, its wholly owned subsidiary. All significant inter-company
accounts and transactions have been eliminated.
B. INVESTMENT SECURITIES
The Company classifies debt and equity securities into one of two categories at
the time of purchase:
6
<PAGE>
BRIDGE VIEW BANCORP AND SUBSIDIARY
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Securities are classified as securities held to maturity based on management's
intent and the Company's ability to hold them to maturity. Such securities are
stated at cost, adjusted for unamortized purchase premiums and discounts.
Securities not classified as securities held to maturity are classified as
securities available for sale, and are stated at fair value. Unrealized gains
and losses on securities available for sale are excluded from results of
operations, and are reported as a separate component of stockholders' equity,
net of taxes. Securities classified as available for sale include securities
that may be sold in response to changes in interest rates, changes in prepayment
risks, the need to increase regulatory capital or similar requirements. At
September 30, 1997 $26,573,000 of investment securities were classified as held
to maturity and the remainder were available for sale.
The following table sets forth the carrying value of the Company's security
portfolio as of the dates indicated:
A comparative summary of investment securities available for sale as of the
dates indicated:
Gross Gross
Amortized Unrealized Unrealized Market
Cost Gains Losses Value
--------- ---------- ---------- -------
(in thousands, Unaudited)
September 30, 1997:
U.S. Government and
Agency Obligations ....... $14,563 $29 $ -- $14,592
======= === ==== =======
December 31, 1996
U.S. Government and
Agency Obligations ....... $ 8,647 $15 $(18) $ 8,644
======= === ==== =======
A comparative summary of investment securities held to maturity as of the dates
indicated:
Gross Gross
Amortized Unrealized Unrealized Market
Cost Gains Losses Value
--------- ---------- ---------- -------
(in thousands, Unaudited)
September 30, 1997:
U.S. Government and
Agency Obligations ........ $18,913 $20 $ -- $18,933
State and Municipal
Obligations ............... 7,660 25 -- 7,685
------- --- ---- -------
$26,573 $45 $ -- $26,618
======= === ==== =======
December 31, 1996:
U.S. Government
and Agency Obligations .... $21,183 $48 $(37) $21,194
State and Municipal
Obligations ............... 6,334 18 -- 6,352
------- --- ---- -------
$27,517 $66 $(37) $27,546
======= === ==== =======
7
<PAGE>
BRIDGE VIEW BANCORP AND SUBSIDIARY
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
C. LOANS AND ALLOWANCE FOR LOAN LOSSES
The following table summarizes the components of the loan portfolio as of
September 30, 1997 and as of December 31, 1996.
LOAN PORTFOLIO BY TYPE OF LOAN
(Unaudited)
September 30, 1997 December 31, 1996
------------------ -----------------
Amount % Amount %
------- ------- ------- -------
(Dollars in thousands)
Commercial and Industrial .......... $14,428 17.3% $12,455 16.3%
Non-residential Properties ......... 25,473 30.5 22,998 30.0
Residential Properties ............. 39,809 47.7 37,703 49.2
Construction ....................... 1,960 2.4 1,752 2.3
Consumer ........................... 1,774 2.1 1,705 2.2
------- ----- ------- -----
$83,444 100.0% $76,613 100.0%
======= ===== ======= =====
The following table represents activity in the allowance for loan losses for the
three month periods ended September 30, 1997 and as of September 30, 1996:
ALLOWANCE FOR LOAN LOSSES
(Unaudited)
Three Months Ended
September 30
------------------
1997 1996
-------- ------
(Dollars in thousands)
Balance -- beginning of period .......................... $ 981 $819
Recoveries .............................................. 0 1
Charge-offs ............................................. (12) (15)
------ ----
Net (charge-offs) recoveries ............................ (12) (14)
Provision for loan losses ............................... 40 50
------ ----
Balance -- end of period ................................ $1,009 $855
====== ====
D. EARNINGS PER SHARE
Earnings per share is based upon the weighted average number of shares
outstanding, including common stock equivalents, utilizing the modified treasury
stock method. All per share data has been restated to reflect the Exchange Rate
and the 5% stock dividend in April 1997. Also, due to exercise and expiration,
no warrants are outstanding as of September 30, 1997. Average shares outstanding
for purposes of calculating primary and fully diluted earnings per share are as
follows:
Three Months Ended Nine Months Ended
---------------------- ----------------------
9/30/97 9/30/96 9/30/97 9/30/96
---------- ---------- ---------- ----------
Primary Earnings
per Share ................... 1,257,566 1,241,887 1,225,814 1,212,596
Fully Diluted Earnings
per Share ................... 1,258,669 1,241,887 1,228,626 1,212,596
8
<PAGE>
BRIDGE VIEW BANCORP AND SUBSIDIARY
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS: THREE MONTHS ENDED AND NINE MONTHS ENDED
SEPTEMBER 30, 1997 AND 1996 (Unaudited)
NET INCOME
For the three months ended September 30, 1997, net income increased by $186,000
or 47.9% to $574,000 from $388,000 for the three months ended September 30,
1996. For the nine months ended September 30, 1997, net income reached
$1,453,000, an increase of $339,000 or 30.4%, when compared to net income of
$1,114,000 for the nine months ended September 30, 1996. The increase in net
income is attributable to an increase in net-interest income of $390,000 or
27.7% and an increase of $950,000 or 23.5% for the three month period and nine
month period ended September 30, 1997, respectively, when compared to their same
periods in 1996. This increase in interest income and net-interest income was
primarily attributable to an increase of 8.8% in net loans and a 13.7% increase
in investment securities since December 31, 1996. In addition to the increase in
net interest income, non-interest income, consisting primarily of service
charges on deposit accounts, increased by $83,000 or 44.2% and $247,000 or 44.8%
for the three month and nine month periods, respectively, ended September 30,
1997.
Interest expense rose $106,000 or 17.7% for the three month period ending
September 30, 1997 compared to the three months ending September 30, 1996.
Interest expense also rose $820,000 or 51.8% to $2,402,000 for the nine months
ended September 30, 1997 compared to $1,582,000 for the nine month period ended
September 30, 1996. This increase reflects the effect of time deposit promotions
in each of the Company's new branch offices and an increase in interest bearing
deposits of $10,719,000 or 13.01% for the period ended September 30, 1997 as
compared to the same period in 1996.
Non-interest expense increased by $169,000 or 18.6% and $633,000 or 24.2% for
the three month period and the nine month period ended September 30, 1997,
respectively, compared to the same periods in 1996. These increases reflect the
Company's continued growth coupled with the effect of ongoing expenses
associated with two de novo branches opened in the second half of 1996.
On a per share basis, primary and fully-diluted earnings per share were $0.46
for the three months ended September 30, 1997 as compared to $0.32 per share for
the three months ended September 30, 1996. For the nine month period ended
September 30, 1997, primary and fully diluted earnings per share represented
$1.18 as compared to $0.91 for the same period in 1996.
9
<PAGE>
The following table sets forth certain information concerning certain of the
Company's financial ratios at the periods presented for the three month and the
nine month periods and not annualized:
Three Month Nine Month
Period Ended Period Ended
------------------ -------------------
9/30/97 9/30/96 9/30/97 9/30/96
------- ------- ------- -------
(Unaudited)
Return on Average Assets ....... 0.41% 0.34% 1.04% 1.08%
Return on Average Equity ....... 4.08% 3.30% 11.04% 9.77%
Equity to Average Assets ....... 10.57% 10.41% 10.48% 11.30%
PROVISIONS FOR LOAN LOSSES
For the three month period ended September 30, 1997, the Company's provision for
loan losses aggregated $40,000. The provision for the nine months ended
September 30, 1997 totaled $160,000, a decrease of $3,000 or 1.8% from the
$163,000 provision for the nine months ended September 30, 1996. The stability
of the provisions reflects management's view of the economy of its service area
coupled with consistent loan growth.
NON-INTEREST EXPENSE
Non-interest expenses for the three month and nine month periods ended September
30, 1997 amounted to $1,080,000 and $3,246,000, respectively; an increase of
$169,000 and $633,000 over the $911,000 and $2,613,000 for the respective
periods in 1996. This increase is related primarily to staff additions and
occupancy attributable to the Company's two new branches, customary merit
increases in salary and employee benefits, and data processing fees commensurate
with the Bank's continued growth.
INCOME TAX EXPENSE
The income tax provision, which includes both Federal and state taxes for the
quarter ended September 30, 1997 and 1996 was $376,000 and $248,000
respectively. For the first nine months of 1997 and 1996, the income tax
provision aggregated $940,000 and $712,000, respectively. The increase in income
taxes was attributable to the increase in pre-tax income for both periods
reported.
FINANCIAL CONDITION: SEPTEMBER 30, 1997 AND DECEMBER 31, 1996
At September 30, 1997 the Company's total assets were $142,587,000 compared to
$139,060,000 at December 31, 1996. Net loans increased to $82,435,000 at
September 30, 1997 from $75,752,000 at December 31, 1996. Total deposits at
September 30, 1997 were $127,315,000; an increase of $982,000 from $126,333,000
at December 31, 1996.
10
<PAGE>
LOAN PORTFOLIO
At September 30, 1997 the Company's net loans were $82,435,000, an increase of
$6,683,000 or 8.8% over net loans at December 31, 1996. The increase in the loan
portfolio represents increased penetration of the Company's local small business
market. Management believes that the Company's success in penetrating this
market is due to the Company's trade area now being served by large out-of-state
institutions which resulted from mergers and acquisitions in the industry.
Management believes that it is not cost-efficient for these larger institutions
to provide the level of personal service to small business borrowers that the
Company provides.
The Company's loans are primarily to businesses and individuals located in
Bergen County, New Jersey. The Company has not made loans to borrowers outside
of the United States. Commercial lending activities are focused primarily on
lending to small business borrowers. The Company believes that its strategy of
customer service, competitive rate structure and selective marketing have
enabled the Company to gain market entry to local loans.
The following table sets forth the classification of the Company's loans by
major category as of September 30, 1997 and December 31, 1996 respectively:
September 30, 1997 December 31, 1996
------------------ ------------------
Amount % Amount %
------- ----- ------- -----
(Dollars in thousands)
(Unaudited)
Commercial and Industrial ....... $14,428 17.3% $12,455 16.3%
Non-Residential Properties ...... 25,473 30.5 22,998 30.0
Residential Properties .......... 39,809 47.7 37,703 49.2
Construction .................... 1,960 2.4 1,752 2.3
Consumer ........................ 1,774 2.1 1,705 2.2
------- ----- ------- -----
TOTAL LOANS ..................... $83,444 100.0% $76,613 100.0%
======= ===== ======= =====
The following table sets forth fixed and adjustable rate loans as of September
30, 1997 in terms of interest rate sensitivity:
Within 1 to 5 After
One Year Years 5 Years Total
-------- ------ ------- ------
(Unaudited)
(In thousands)
Loans with Fixed Rate .............. 3,395 42,545 4,043 49,983
Loans with Adjustable Rate ......... 26,184 4,981 2,296 33,461
11
<PAGE>
ASSET QUALITY
The Company's principal assets are its loans. Inherent in the lending function
is the risk of the borrower's inability to repay a loan under its existing
terms. Risk exposure could result in non-accrual loans, past due and
restructured loans, potential problem loans, loan concentrations and other real
estate owned.
Non-performing assets include loans that are not accruing interest (non-accrual
loans) as a result of principal or interest being in default for a period of 90
days or more. When a loan is classified as non-accrual, interest accruals
discontinue and all past due interest, including interest applicable to prior
years, is reversed and charged against current income. Any payments received
from the borrower are applied to outstanding principal until such time as
management determines that the financial condition of the borrower and other
factors merit recognition of such payments as interest.
The Bank attempts to minimize overall credit risk through loan diversification
and its loan approval procedures. Due diligence begins at the time the borrower
and the Company begin discussion of a loan request. Documentation, including a
borrower's credit history, materials establishing the value and liquidity of
potential collateral, the purpose of the loan, source and timing of repayment
and other factors are analyzed before a loan is submitted for approval.
The following table sets forth information concerning the Company's
non-performing assets as of the dates indicated:
Non-Performing Loans
-------------------------------------
September 30, 1997 December 31, 1996
------------------ -----------------
(in thousands, Unaudited)
Non-Accrual Loans ......................... $439 $0
Non-Accrual Loans to Total Loans .......... 0.53% N/A
Non-Performing Assets to Total Assets ..... 0.53% 0.10%
Allowance for Possible Loan Losses as a
Percentage of Non-Performing Loans ...... 229.84% 619.42%
Other than as disclosed above, there were no loans where information about
possible credit problems of borrowers caused management to have serious doubts
as to the ultimate collectibility of such loans.
As of the dates indicated in the above table, there were no concentrations of
loans exceeding 10% of the Company's total loans and the Company had no foreign
loans.
12
<PAGE>
ALLOWANCE FOR LOAN LOSSES
The Company attempts to maintain an allowance for loan losses at a sufficient
level to provide for potential losses in the loan portfolio. Loan losses are
charged directly to the allowance when they occur and any recovery is credited
to the allowance. Risks within the loan portfolio are analyzed on a continual
basis by the Company's officers, by external independent loan review auditors
and by the Company's audit committee. A risk system, consisting of multiple
grading categories, is utilized as an analytical tool to assess risk and
appropriate reserves. Along with the risk system, management further evaluates
risk characteristics of the loan portfolio under current and anticipated
economic conditions and considers such factors as the financial condition of the
borrower, past and expected loss experience, and other factors which management
feels deserve recognition in establishing an appropriate reserve. These
estimates are reviewed at least quarterly, and, as adjustments become necessary,
they are realized in the periods in which they become known. Additions to the
allowance are made by provisions charged to expense and the allowance is reduced
by net charge-offs (i.e. - loans judged to be uncollectible and charged against
the reserve, less any recoveries on such loans.) Although management attempts to
maintain the allowance at a level deemed adequate, future additions to the
allowance may be necessary based upon changes in market conditions. In addition,
various regulatory agencies periodically review the allowance for loan losses.
These agencies may require additional provisions based on their judgments about
information available to them at the time of their examination.
The Company's allowance for loan losses totaled $1,009,000 and $861,000 at
September 30, 1997 and December 31, 1996, respectively. This increase in
allowance is due to continued increase in the loan portfolio. The following is a
summary of the reconciliation of the allowance for loan losses for the nine
months ended September 30, 1997 and the year ended December 31, 1996.
September 30, December 31,
1997 1996
------------- ------------
(Unaudited)
(In thousands)
Balance at beginning of period ................... $ 861 $ 692
Net charge-offs .................................. (12) (24)
Provision charged to expense ..................... 160 193
------ -----
Balance at end of period ......................... $1,009 $ 861
====== =====
Balance of allowance at end of period as
a percent of loans at end of period ............ 1.21% 1.12%
13
<PAGE>
The following table sets forth, for each of the Company's major lending areas,
the amount and percentage of the Company's allowance for loan losses
attributable to such category and the percentage of total loans represented by
such category, as of the periods indicated:
ALLOCATION OF THE ALLOWANCE FOR LOAN LOSSES BY CATEGORY
(Dollars in thousands)
(Unaudited)
September 30, 1997 December 31, 1996
------------------- ------------------
Amount % of ALL Amount % of ALL
------ -------- ------ --------
Balance applicable to:
Commercial & Industrial ........ $ 231 22.90% $235 27.29%
Real Estate:
Non-Residential Property ....... 278 27.55 238 27.64
Residential Property ........... 245 24.28 234 27.18
Construction ................... 20 1.98 18 2.10
Consumer ....................... 20 1.98 21 2.43
------ ------ ----- ------
Sub Total ........................ 794 78.69 746 86.64
Unallocated Reserves ............. 215 21.31 115 13.36
------ ------ ---- ------
TOTAL ............................ $1,009 100% $861 100%
====== ====== ==== ======
INVESTMENT SECURITIES
The Company maintains an investment portfolio to fund increased loan demand or
deposit withdrawals and other liquidity needs and to provide an additional
source of interest income. The portfolio is composed of U.S. Treasury
Securities, obligations of U.S. Government Agencies and selected municipal and
state obligations.
At September 30, 1997 total investment securities excluding FHLBNY stock, were
$41,165,000, an increase of $5,004,000 or 13.8% from total investment
securities, excluding FHLBNY stock, of $36,161,000 at December 31, 1996. This
increase in investment securities reflects increases in total deposits in excess
of funds needed for new loan originations.
The following table sets forth, as of September 30, 1997 the maturity
distribution of the Company's investment portfolio:
MATURITY SCHEDULE OF INVESTMENT SECURITIES
September 30, 1997 (Unaudited)
Investment Securities Securities for Sale
----------------------------- ----------------------------
Weighted Weighted
Amortized Market Average Amortized Market Average
Cost Value Yield Cost Value Yield
--------- ------ ------- --------- ------ -------
Within 1 Year ..... 18,175 18,181 5.84% 5,002 5,014 5.78%
1 to 5 Years ...... 8,007 8,025 5.98% 9,560 9,578 5.97%
5 to 10 Years ..... 391 411 6.07% -- -- -- %
------ ------ ------ ------
26,573 26,617 14,562 14,592
====== ====== ====== ======
14
<PAGE>
The Company sold no securities during 1996 or during the first nine months of
1997.
DEPOSITS
Deposits are the Company's primary source of funds. The Company experienced an
increase in deposit balances of $982,000 or 0.8% to $127,315,000 for the period
ended September 30, 1997 from $126,333,000 at December 31, 1996. This overall
increase occurred, primarily, due to continued emphasis upon customer service.
The Company also experienced increases in non-interest bearing deposits as well
as in savings deposits through the Company's emphasis on customer service,
extended hours of operation, competitive rate structure and selective marketing.
Savings and interest bearing demand deposits grew $8,645,000 or 20.1% to
$51,711,000 at September 30, 1997 as compared to $43,066,000 at December 31,
1996, while non-interest bearing demand deposits grew 16.5% or $4,830,000 during
the first nine months of 1997 as compared to year end 1996. These gains were
off-set by a decrease in time deposits due to runoff of certificates of deposit
offered in connection with the two new branch openings in late 1996. The
aggregate amount of non-interest bearing deposits totaled 26.9% of the Company's
total deposits for the period ended September 30, 1997 as compared to 23.3% at
December 31, 1996. The Company has no foreign deposits, nor are there any
material concentrations of deposits.
The following table sets forth the amount of various types of deposits for each
of the periods indicated:
September 30, 1997 December 31, 1996
------------------ ------------------
Amount % Amount %
-------- ------ -------- ------
(Unaudited)
(In thousands)
Non-Interest Bearing Demand ........ $ 34,182 26.9% $ 29,352 23.3%
Interest Bearing Demand ............ 34,480 27.1 29,906 23.7
Savings ............................ 17,231 13.5 13,160 10.4
Time Deposits ...................... 41,422 32.5 53,915 42.6
-------- ----- -------- -----
TOTAL .............................. $127,315 100% $126,333 100%
======== ===== ======== =====
The Company does not actively solicit short-term deposits of $100,000 or more
because of the liquidity risks posed by such deposits. The following table
summarizes the maturity distribution of certificates of deposit of denominations
of $100,000 or more as of September 30, 1997:
(Unaudited)
(Dollars in Thousands)
Time Deposits ($100,000 and over)
Three months or less .............................................. $17,090
Over three months through twelve months ........................... 2,098
Over twelve months ................................................ 155
-------
TOTAL ............................................................... $19,343
=======
15
<PAGE>
Liquidity
The Company's liquidity is a measure of its ability to fund loans, withdrawals
or maturities of deposits and other cash outflows in a cost-effective manner.
The Company's principal sources of funds are deposits, scheduled amortization
and prepayments of loan principal, maturities of investment securities and funds
provided by operations. While scheduled loan payments and maturing investments
are relatively predictable sources of funds, deposit flows and loan prepayments
are greatly influenced by general interest rates, economic conditions and
competition.
The Company's total deposits equaled $127,315,000 at September 30, 1997 as
compared to $126,333,000 at December 31, 1996. The deposit levels have been more
than sufficient to provide for the Company's loan demand and excess funds have
been invested in investment securities and federal funds sold.
Through the Company's investment portfolio the Company has generally sought to
obtain a safe, yet slightly higher yield than would have been available to the
Company as a net seller of overnight federal funds while still maintaining
liquidity. Through its investment portfolio, the Company also attempts to manage
its maturity gap by seeking maturities of investments which coincide as closely
as possible with maturities of deposits. The Company's investment portfolio also
includes securities held for sale to provide liquidity for anticipated loan
demand and other liquidity needs.
Although the Company has traditionally been a net "seller" of federal funds, the
Company does maintain lines of credit with the Federal Home Loan Bank of New
York, Summit Bank and Bank of New York for "purchase" of federal funds in the
event that temporary liquidity needs arise.
Management believes that the Company's current sources of funds provide adequate
liquidity for the current cash flow needs of the Company.
Interest Rate Sensitivity Analysis
The principal objective of the Company's asset and liability management function
is to evaluate the interest-rate risk included in certain balance sheet
accounts; determine the level of risk appropriate given the Company's business
focus, operating environment, capital and liquidity requirements; establish
prudent asset concentration guidelines; and manage the risk consistent with
Board approved guidelines. The Company seeks to reduce the vulnerability of its
operations to changes in interest rates and to manage the ratio of interest-rate
sensitive assets to interest-rate sensitive liabilities within specified
maturities or repricing dates. The Company's actions in this regard are taken
under the guidance of the Asset/Liability Committee (ALCO) of the Board of
Directors. The ALCO generally reviews the Company's liquidity, cash flow needs,
maturities of investments, deposits and borrowings and current market conditions
and interest rates.
16
<PAGE>
One of the monitoring tools used by the ALCO is an analysis of the extent to
which assets and liabilities are interest rate sensitive and measures the
Company's interest rate sensitivity "gap." An asset or liability is said to be
interest rate sensitive within a specific time period if it will mature or
reprice within that time period. A gap is considered positive when the amount of
interest rate sensitive assets exceeds the amount of interest rate sensitive
liabilities. A gap is considered negative when the amount of interest rate
sensitive liabilities exceeds interest rate sensitive assets. Accordingly,
during a period of rising rates, a negative gap may result in the yield on the
institution's assets increasing at a slower rate than the increase in its cost
of interest-bearing liabilities. Conversely, during a period of falling interest
rates, an institution with a negative gap would experience a repricing of its
assets at a slower rate than its interest-bearing liabilities which,
consequently, may result in its net interest income growing.
The following table sets forth the amounts of interest-earning assets and
interest-bearing liabilities outstanding at the periods indicated which are
anticipated by the Company, based upon certain assumptions, to reprice or mature
in each of the future time periods presented. Except as noted, the amount of
assets and liabilities which reprice or mature during a particular period were
determined in accordance with the earlier of the term to repricing or the
contractual terms of the asset or liability. Because the Company has no
interest-bearing liabilities with a maturity greater than five years, management
believes that a static gap for the over five year time period reflects a more
accurate assessment of interest rate risk. The Company's loan repayment
assumptions are based upon actual historic repayment rates.
17
<PAGE>
<TABLE>
CUMULATIVE RATE SENSITIVE BALANCE SHEET AS OF SEPTEMBER 30, 1997
(UNAUDITED) (IN THOUSANDS)
<CAPTION>
0 - 3 0 - 6 0 to 1 0 to 5 5+ All
Months Months Year Years Years Others Total
------ ------ ------ ------ ----- ------ -----
<S> <C> <C> <C> <C> <C> <C> <C>
Fixed Rate Investments ........... 8,351 13,351 23,188 40,775 390 0 41,165
-------
41,165
Loans:
Commercial ....................... 18,251 19,420 20,534 46,527 963 0 47,490
Participations ................... 0 0 135 1,920 180 0 2,100
Mortgages ........................ 0 0 183 13,352 2,074 0 15,426
Consumer ......................... 14,785 16,272 16,336 17,985 443 0 18,428
-------
83,444
Fed Funds Sold ................... 2,500 2,500 2,500 2,500 0 0 2,500
Other Assets ..................... 0 0 0 0 0 15,478 15,478
-------
TOTAL ASSETS ..................... 43,887 51,543 62,876 123,059 4,050 15,478 142,587
====== ====== ====== ======= ===== ====== =======
0 - 3 0 - 6 0 to 1 0 to 5 5+ All
Months Months Year Years Years Others Total
------ ------ ------ ------ ----- ------ -----
<S> <C> <C> <C> <C> <C> <C> <C>
Transaction/NOW Accounts .......... 23,563 23,563 23,563 23,563 0 0 23,563
Money Market ...................... 10,917 10,917 10,917 10,917 0 0 10,917
Other Savings ..................... 17,231 17,231 17,231 17,231 0 0 17,231
CD's (less than) $100,000 ......... 11,076 17,061 19,529 22,079 0 0 22,079
CD's (greater than) $100,000 ..... 17,467 18,728 18,774 19,343 0 0 19,343
Other Liabilities ................. 0 0 0 0 0 34,791 34,791
Equity ............................ 0 0 0 0 0 14,663 14,663
------ ------ ------ ------- ------ ------ -------
TOTAL LIABILITIES
AND EQUITY ........................ 80,254 87,500 90,014 93,133 0 49,454 142,587
====== ====== ====== ======= ===== ====== =======
Dollar Gap ........................ (36,367) (35,957) (27,138) 29,926 0 (33,976)
Gap/Total Assets .................. -25.51% -25.22% -19.03% 20.99% 0 -23.83%
Target Gap Range .................. +-35.00% +-30.00% +-25.00% +-25.00% 0 +-25.00%
RSA/RSL * ......................... 54.69% 58.91% 69.85% 132.13% 0 -31.29%
</TABLE>
* RSA/RSL is the percentage of repricing rate sensitive assets to rate
sensitive liabilities
18
<PAGE>
Capital
A significant measure of the strength of a financial institution is its capital
base. The Company's federal regulators have classified and defined Company
capital into the following components: (1) Tier I Capital, which includes
tangible shareholders' equity for common stock and qualifying preferred stock,
and (2) Tier II Capital, which includes a portion of the allowance for possible
loan losses, certain qualifying long-term debt and preferred stock which does
not qualify for Tier I Capital. Minimum capital levels are regulated by
risk-based capital adequacy guidelines which require certain capital as a
percent of the Company's assets and certain off-balance sheet items adjusted for
predefined credit risk factors (risk-adjusted assets.)
A bank holding company is required to maintain, at a minimum, Tier I Capital as
a percentage of risk-adjusted assets of 4.0% and combined Tier I and Tier II
Capital as a percentage of risk-adjusted assets of 8.0%.
In addition to the risk-based guidelines, the Company's regulators require that
an institution which meets the regulator's highest performance and operation
standards maintain a minimum leverage ratio (Tier I Capital as a percentage of
tangible assets) of 3%. For those institutions with higher levels of risk or
that are experiencing or anticipating significant growth, the minimum leverage
ratio will be evaluated through the on-going regulatory examination process. The
Bank is subject to substantially similar regulations by its federal regulations.
The following table summarizes the risk-based and leverage capital ratios for
the Bank at September 30, 1997 as well as the required minimum regulatory
capital ratios:
Capital Adequacy
(unaudited)
Minimum
September 30, Regulatory
1997 Requirements
------------- ------------
Risk Based Capital:
Tier I Capital Ratio ................... 15.68% 4.0%
Total Capital Ratio .................... 16.76% 8.0%
Leverage Ratio ........................... 10.51% 3.0%
19
<PAGE>
RECENT ACCOUNTING PRONOUNCEMENTS
SFAS NO. 128
FASB Statement No. 128, Earnings Per Share (Statement 128) supersedes APB
Opinion No. 15, Earnings Per Share, and specifies the computation, presentation,
and disclosure requirements for earnings per share (EPS) for entities with
publicly held common stock or potential common stock. Statement 128 was issued
to simplify the computation of EPS and to make the U.S. standard more compatible
with the EPS standards of other countries and that of the International
Accounting Standards Committee: (IASC.) it replaces Primary EPS and Fully
Diluted EPS with Basic EPS and Diluted EPS, respectively. It also requires dual
presentation of Basic EPS and Diluted EPS on the face of the income statement
for all entities with complex capital structures and requires a reconciliation
of the numerator and denominator of the Basic EPS computation to the numerator
and denominator of the Diluted EPS computation.
Basic EPS, unlike Primary EPS, excludes all dilution while Diluted EPS, like
Fully Diluted EPS, reflects the potential dilution that could occur if
securities or other contracts to issue common stock were exercised or converted
into common stock or resulted in the issuance of common stock that then shared
in the earnings of the entity. For many entities Basic EPS will be higher than
Primary EPS and Diluted EPS will be approximately the same as Fully Diluted EPS.
Statement 128 is applicable to all entities that have issued common stock or
potential common stock (e.g., options, warrants, convertible securities,
contingent stock agreements, etc.) if those securities trade in a public market
either on a stock exchange (domestic or foreign) or in the over-the-counter
market, including securities quoted only locally or regionally. This Statement
also applies to an entity that has made a filing or is in the process of filing
with a regulatory agency in preparation for the sale of those securities in a
public market. However, Statement 128 does not require presentation of EPS for
investment companies or in statements of wholly-owned subsidiaries.
Statement 128 is effective for financial statements for both interim and annual
periods ending after December 15, 1997. Earlier application is not permitted
(although pro forma EPS disclosure in the footnotes for periods prior to
required adoption is permitted.) After adoption, all prior period EPS data
presented shall be restated (including interim financial statements, summaries
of earnings and selected financial data) to conform with Statement 128. The
Company does not believe the adoption of Statement 128 will have a material
effect on any Company's reported income or financial condition.
20
<PAGE>
SFAS NO. 130
FASB Statement No. 130, "Reporting Comprehensive Income", (SFAS 130) established
standards for reporting and display of comprehensive income and its components
(revenues, expenses, gains, and losses) in a full set of general-purpose
financial statements. SFAS 130 requires all items that are required to be
recognized under accounting standards as components of comprehensive income be
reported in a financial statement that is displayed with the same prominence as
other financial statements. SFAS 130 does not require a specific format for that
financial statement but requires that an enterprise display an amount
representing total comprehensive income for the period in that financial
statement. SFAS 130 requires that an enterprise (a) classify items of other
comprehensive income by their nature in a financial statement and (b) display
the accumulated balance of other comprehensive income separately from retained
earnings and additional paid-in capital in the equity section of a statement of
financial position.
SFAS 130 is effective for fiscal years beginning after December 15, 1997.
Reclassification of financial statements for earlier periods provided for
comparative purposes is required.
21
<PAGE>
PART II OTHER INFORMATION
- - ------- ------------------
Item 1. Legal Proceedings -- NONE
Item 2. Changes in Securities -- NONE
Item 3. Defaults Upon Senior Securities -- NONE
Item 4. Submission of Matters to a Vote of Securities Holders -- NONE
Item 5.
BRIDGE VIEW BANCORP ANNOUNCES STOCK SPLIT
ENGLEWOOD CLIFFS, NJ -- OCTOBER 24, 1997 -- The Board of Directors of
Bridge View Bancorp (AMEX : BVB) today announced a 2 for 1 stock split. The
stock split is payable December 1, 1997 to shareholders of record November 14,
1997. No action is required on the part of Bridge View shareholders whose
certificates will be mailed on the payment date. Following the 2 for 1 stock
split, Bridge View will have approximately 2.5 million shares outstanding.
President and Chief Executive Officer Albert F. Buzzetti said that "the
stock split is a result of the Board's confidence in the Company's continued
success and should make the stock more attractive to individual investors,
allowing for the expansion of our ownership base."
Bridge View Bancorp is the holding company for Bridge View Bank with $142
million in assets. The Bank operates a commercial banking business from its main
office in Englewood Cliffs and three branch offices: two in Fort Lee and one in
Edgewater, all in Bergen County, NJ. It has also received all necessary
approvals for a fifth location in Hackensack, NJ.
Contact Michele Albino, Corporate Secretary, for questions or additional
information at 201-871-8700.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits -- See INDEX TO EXHIBITS
(b) Reports on Form 8-K -- NONE
22
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
By: /s/ Albert F. Buzzetti
----------------------------------
(Registrant - Bridge View Bancorp)
Albert F. Buzzetti
President and CEO
Date: November 03, 1997
23
<PAGE>
BRIDGE VIEW BANCORP
INDEX TO EXHIBITS
Exhibit
Number Description of Exhibits
- - ------- ------------------------
27 Financial Data Schedule
24
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
REGISTRANT'S UNAUDITED SEPTEMBER 30, 1997 FINANCIAL STATEMENTS AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1997
<CASH> 13,028,000
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 2,500
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 14,592,000
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 26,573,000
<LOANS> 83,444,000
<ALLOWANCE> 1,009,000
<TOTAL-ASSETS> 142,587,000
<DEPOSITS> 127,315,000
<SHORT-TERM> 0
<LIABILITIES-OTHER> 609,000
<LONG-TERM> 0
0
0
<COMMON> 13,342,000
<OTHER-SE> 1,321,000
<TOTAL-LIABILITIES-AND-EQUITY> 142,587,000
<INTEREST-LOAN> 5,361,000
<INTEREST-INVEST> 1,789,000
<INTEREST-OTHER> 253,000
<INTEREST-TOTAL> 7,403,000
<INTEREST-DEPOSIT> 2,395,000
<INTEREST-EXPENSE> 2,402,000
<INTEREST-INCOME-NET> 5,001,000
<LOAN-LOSSES> 160,000
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 3,246,000
<INCOME-PRETAX> 2,393,000
<INCOME-PRE-EXTRAORDINARY> 2,393,000
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,453,000
<EPS-PRIMARY> 1.18
<EPS-DILUTED> 1.18
<YIELD-ACTUAL> 5.28
<LOANS-NON> 439,000
<LOANS-PAST> 446,000
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 861,000
<CHARGE-OFFS> 12,000
<RECOVERIES> 160,000
<ALLOWANCE-CLOSE> 1,009,000
<ALLOWANCE-DOMESTIC> 1,009,000
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 215,000
</TABLE>
