<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
(X) Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 for the quarterly period ended March 31, 2000
( ) Transition 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)
Securities registered pursuant to Section 12(b) of the Exchange Act:
Title of each class: Name of each exchange on which registered:
Common Stock, No Par Value American Stock Exchange
Securities registered pursuant to Section 12(g) of the Exchange Act: None
Indicate by check mark whether the Issuer: (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934, as
amended, 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. YES (X) NO___
APPLICABLE TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of the Registrant's classes of common
stock, as of the last practicable date.
2,921,253 shares of Common Stock as of April 30, 2000
<PAGE>
INDEX
BRIDGE VIEW BANCORP
Part I - Financial Information
Item 1. Financial Statement
Consolidated Statements of Financial Condition
as of March 31, 2000 (unaudited) and December 31, 1999
Consolidated Statements of Income
for the three months ended March 31, 2000 and 1999 (unaudited)
Consolidated Statements of Cash Flows
for the three months ended March 31, 2000 and 1999 (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
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(in thousands)
<TABLE>
<CAPTION>
March 31, December 31,
2000 1999
------------ ------------
ASSETS (unaudited)
<S> <C> <C>
Cash and cash equivalents:
Cash and due from banks ........................... $ 10,282 $ 11,270
Federal funds sold ................................ 3,000 0
--------- ---------
TOTAL CASH AND CASH EQUIVALENTS ........................ 13,282 11,270
--------- ---------
Securities:
Available for sale ................................ 23,330 22,207
Held to maturity .................................. 40,997 46,846
--------- ---------
TOTAL SECURITIES ....................................... 64,327 69,053
--------- ---------
Loans, net of allowance for losses of $1,335 and $1,310,
and deferred loan fees of $288 and $274, respectively .. 120,662 116,961
Premises and equipment, net ............................ 3,887 3,853
Accrued interest receivable and other assets ........... 2,481 2,135
--------- ---------
TOTAL ASSETS ........................................... $ 204,639 $ 203,272
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Non-interest bearing demand
deposits .......................................... $ 56,035 $ 51,996
Interest bearing deposits:
Savings and time deposits .................... 92,387 96,101
Certificates of deposit $100,000+ ............ 35,058 35,108
--------- ---------
TOTAL DEPOSITS ......................................... 183,480 183,205
Accrued interest payable and other liabilities 1,177 738
--------- ---------
TOTAL LIABILITIES ...................................... 184,657 183,943
Commitments and Contingencies
Stockholders' equity:
Common stock, no par value,
authorized 10,000,000 shares issued
and outstanding 2,921,253 in 2000
and 2,920,767 in 1999 ............................. 21,263 19,035
(Accumulated deficit)retained earnings(note 2) .... (859) 779
Accumulated other comprehensive loss .............. (422) (485)
--------- ---------
TOTAL STOCKHOLDERS' EQUITY ............................. 19,982 19,329
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 204,639 $ 203,272
========= =========
</TABLE>
See notes to unaudited consolidated financial statements.
3
<PAGE>
BRIDGE VIEW BANCORP
CONSOLIDATED STATEMENTS OF INCOME
(unaudited, in thousands)
<TABLE>
<CAPTION>
Three months ended March 31,
2000 1999
---- ----
<S> <C> <C>
Interest Income:
Loans, including fees ............................................. $2,554 $2,049
Federal funds sold ................................................ 22 256
Investment Securities
Taxable ........................................................ 865 365
Tax - exempt ................................................... 109 100
------ ------
TOTAL INTEREST INCOME ................................................ 3,550 2,770
Interest Expense:
Savings deposits .................................................. 198 184
Other time deposits ............................................... 341 274
Time deposits $100,000+ ........................................... 450 247
------ ------
TOTAL INTEREST EXPENSE ............................................... 989 705
Net Interest Income ................................... 2,561 2,065
Provision for loan losses ............................................ 50 40
Net interest income after provision for loan
losses ............................................................... 2,511 2,025
Non-interest income:
Service charge income ............................................. 326 322
------ ------
TOTAL NON-INTEREST INCOME ............................................ 326 322
Non-interest expense:
Salaries and employee benefits .................................... 761 657
Occupancy and equipment expense ................................... 310 341
Other ............................................................. 407 377
------ ------
TOTAL NON-INTEREST EXPENSE ........................................... 1,478 1,375
Income before income taxes ........................................... 1,359 972
Income tax expense ................................................... 493 355
------ ------
NET INCOME ........................................................... $ 866 $ 617
====== ======
Earnings per share:
Basic ........................................................... $ 0.30 $0.21
Diluted ......................................................... $ 0.29 $0.21
</TABLE>
See notes to unaudited consolidated financial statements.
4
<PAGE>
BRIDGE VIEW BANCORP
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited, in thousands)
<TABLE>
<CAPTION>
Three months ended March 31,
2000 1999
--------- --------
<S> <C> <C>
Cash flows from operating activities:
Net Income ........................................................ $ 866 $ 617
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization .................................. 96 68
Provision for loan losses ...................................... 50 40
Gains from sales of loans held for sale ........................ 4 17
(Increase)decrease in accrued interest receivable
and other assets ............................................... (346) 428
Increase(decrease) in accrued interest payable and
Other liabilities ............................................. 439 (104)
-------- --------
Net cash provided by operating activities .............................. 1,109 1,066
Cash flows from investing activities:
Proceeds from maturities of investment securities ................. 11,215 12,447
Purchases of investment securities ................................ (6,716) (14,587)
Net (increase)decrease in loans ................................... (3,701) 775
Additions to premises and equipment ............................... (34) (1,439)
-------- --------
Net cash provided by(used in) investing activities ..................... 764 (2,804)
Cash flows from financing activities:
Net increase in deposits .......................................... 275 6,960
Proceeds from issuance of common stock ............................ 3 0
Cash paid for dividends ........................................... (139) (132)
-------- --------
Net cash provided by financing activities .............................. 139 6,828
Net change in cash and cash equivalents ................................ 2,012 5,090
Cash and cash equivalents at beginning of period ....................... 11,270 34,134
-------- --------
Cash and cash equivalents at end of period ............................. $ 13,282 $ 39,224
Cash paid during the period for:
Interest .......................................................... 988 701
Income taxes ...................................................... 424 222
</TABLE>
See notes to unaudited consolidated financial statements.
5
<PAGE>
BRIDGE VIEW BANCORP AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements
(1) Summary of Significant Accounting Policies
The accompanying consolidated financial statements include the accounts
of Bridge View Bancorp (the Company) and its direct and indirect
wholly-owned subsidiaries, Bridge View Bank and Bridge View Investment
Company (the Bank). All significant inter-company accounts and
transactions have been eliminated in consolidation. Certain accounts in
prior periods have been restated to conform to the current presentation.
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 included in the annual report on Form
10-K for the year ended December 31, 1999. The results for the three
months ended March 31, 2000 are not necessarily indicative of the results
that may be expected for the year ended December 31, 2000.
Organization
The Bank is a commercial bank which provides a full range of banking
services to individuals and corporate customers in New Jersey. The Bank
is subject to competition from other financial institutions. The Bank is
regulated by state and federal agencies and is subject to periodic
examinations by those regulatory authorities.
Basis of Financial Presentation
The consolidated financial statements have been prepared in conformity
with generally accepted accounting principles. In preparing the
consolidated financial statements, management is required to make
estimates and assumptions that affect the reported amounts of assets and
liabilities as of the date of the consolidated statement of financial
condition and revenues and expenses for the year. Actual results could
differ significantly from those estimates. Certain prior period amounts
have been reclassified to conform to the financial statements
presentation of 2000. The reclassifications have no effect upon
stockholders' equity or net income as previously reported.
6
<PAGE>
Material estimates that are particularly susceptible to significant
change in the near term relate to the determination of the allowance for
loan losses. In connection with the determination of the allowance for
loan losses, management generally obtains independent appraisals for
significant properties.
Securities Available for Sale
Management determines the appropriate classification of securities at the
time of purchase. If management has the intent and the Bank has the
ability at the time of purchase to hold securities until maturity, they
are classified as investment securities. Securities to be held for
indefinite periods of time and not intended to be held to maturity are
classified as securities available for sale. Gains or losses on sales of
securities available for sale are based upon the specific identification
method. Securities available for sale are reported at fair value with
changes in the carrying value from period to period included as a
separate component of stockholders' equity.
Securities Held to Maturity
Investment securities are carried at the principal amount outstanding,
adjusted for amortization of premiums and accretion of discounts using a
method that approximates the level-yield method over the terms of the
securities. Investment securities are carried at the principal amount
outstanding because the Bank has the ability and it is management's
intention to hold these securities to maturity.
(2) Retained Earnings - Stock Dividend
The Company declared a 5% Stock Dividend (the "2000 Stock Dividend") on
March 30, 2000 and paid the dividend on April 15, 2000. Retained earnings
decreased by the market value of shares issued in connection with the
2000 Stock Dividend. Earnings per share for 1999 has been restated to
reflect the effect of the stock dividend.
7
<PAGE>
(3) Earnings Per Share Reconciliation
The reconciliation of the numerator and the denominator of Basic EPS with
that of Diluted EPS is presented for the three month periods ended March
31, 2000, and 1999.
Three Months Ended
March 31,
2000 1999
---- ----
(in thousands,
except per share data)
Basic earnings per share:
Net Income $ 866 617
====== ======
Average number of shares outstanding 2,921 2,921
====== ======
Basic earnings per share $ 0.30 0.21
====== ======
Diluted earnings per share:
Net Income $ 866 617
====== ======
Average number of shares of common
stock and equivalents outstanding:
Average common shares outstanding 2,921 2,921
Additional shares considered in
diluted computation assuming:
Exercise of options and warrants 82 86
------ ------
Average number of shares outstanding
on a diluted basis 3,003 3,007
====== ======
Diluted earnings per share $ 0.29 0.21
====== ======
8
<PAGE>
(4) Comprehensive Income
Total comprehensive income is presented for the three month periods
ended March 31, 2000 and 1999, respectively.
Three months ended March 31,
(in thousands) 2000 1999
---- ----
Comprehensive Income
Net income $ 866 $ 617
Other comprehensive income(loss),
net of taxes 63 (12)
----- -----
Total comprehensive income $ 929 $ 605
9
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATION
The following discussion and analysis of financial condition and results of
operations should be read in conjunction with the Company's consolidated
financial statements and the notes thereto included herein. When necessary,
reclassifications have been made to prior years' data throughout the following
discussion and analysis for purposes of comparability.
RESULTS OF OPERATIONS - Three Months Ended March 31, 2000 and 1999
The Company's results of operations depend primarily on its net interest income,
which is the difference between the interest earned on its interest-earning
assets and the interest paid on funds borrowed to support those assets,
primarily deposits. Net interest margin is the difference between the weighted
average rate received on interest-earning assets and the weighted average rate
paid on interest-bearing liabilities, as well as the average level of
interest-earning assets as compared with that of interest-bearing liabilities.
Net income is also affected by the amount of non-interest income and other
operating expenses.
NET INCOME
For the three months ended March 31, 2000, net income increased by $249,000 or
40.4% to $866,000 from $617,000 for the three months ended March 31, 1999. The
increase in net income is primarily the result of a 24.0%, increase in net
interest income to $2,561,000 in 2000 from $2,065,000 in the prior year combined
with effective control of operating expenses, which increased by only 7.5%
between first quarter 1999 and first quarter 2000.
Interest expense increased $284,000 or 40.3% for the three months ended March
31, 2000 to $989,000 as compared to $705,000 for the three months ended March
31, 1999. This increase reflects the increase in deposits since March, 1999
coupled with the effect of rising interest rates.
On a per share basis, basic earnings per share were $0.30 for the quarter ended
March 31, 2000 as compared to $0.21 for the quarter ended March 31, 1999.
Diluted earnings per share were $0.29 for the first quarter of 2000 as compared
to $0.21 for the first quarter of 1999. Per share data has been restated to
reflect the 2000 5% stock dividend.
PROVISION FOR LOAN LOSSES
For the quarter ended March 31, 2000, the Company's provision for loan losses
was $50,000, an increase of $10,000 from the provision of $40,000 for the
quarter ended March 31, 1999. The increased provision reflects the overall
growth of the loan portfolio.
NON-INTEREST INCOME
Non-interest income, which was primarily attributable to service fees received
from deposit accounts, amounted, for the three months ended March 31,2000, to
$326,000, an increase of $4,000 above the $322,000 from the three months ended
March 31, 1999. The increase in service fees is attributable to the higher level
of average deposits.
10
<PAGE>
NON-INTEREST EXPENSE
Non-interest expenses for the quarter ended March 31, 2000 amounted to
$1,478,000, an increase of $103,000 over the $1,375,000 for the quarter ended
March 31, 1999. This slight increase continues to be related primarily to staff
additions, occupancy expense, data processing fees, customary increases for
salary and employee benefits, as well as other administrative expenses resulting
from the bank's growth and its newest branch which was opened during the first
quarter of 2000.
INCOME TAX EXPENSE
The income tax provision, which includes both federal and state taxes, for the
quarters ended March 31, 2000 and 1999 was $493,000 and $355,000, respectively.
The increase in income taxes is a direct result of the increase in income before
taxes in 2000.
FINANCIAL CONDITION: March 31, 2000 and December 31, 1999
At March 31, 2000, the Company's total assets were $204,639,000 compared to
$203,272,000 at December 31, 1999. Total loans increased to $122,285,000 at
March 31, 2000 from $118,545,000 at December 31, 1999. Total deposits at March
31, 2000 were $183,480,000 compared to $183,205,000 at December 31, 1999.
LOAN PORTFOLIO
At March 31, 2000, the Company's total loans were $122,285,000, an increase of
$3,740,000 or 3.2% over total loans of $118,545,000 at December 31, 1999. The
increase in the loan portfolio continues to be attributable to the effect of
customer referrals, selective marketing, and growth within the local Bergen
County community. Management maintains that the Company will remain successful
in loan origination in this market due to the fact that, through mergers and
acquisitions, the Company's trade area is now primarily served by large
institutions, frequently headquartered out of state. Management believes that it
is not cost-efficient for these larger institutions to provide the level of
personal service the Company provides to small business borrowers.
The Company's loan portfolio consists of commercial loans, real estate loans,
and consumer loans. Commercial loans are made for the purpose of providing
working capital, financing the purchase of equipment or inventory, as well as
for other business purposes. Real estate loans consist of loans secured by
commercial or residential real property and loans for the construction of
commercial or residential property. Consumer loans are made for the purpose of
financing the purchase of consumer goods, home improvements, and other personal
needs, and are generally secured by the personal property being purchased.
The Company's loans are primarily to businesses and individuals located in
eastern 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 structures, and selective
marketing have enabled the Company to gain market share to local loans. Bank
mergers and lending restrictions at larger banks competing with the Company have
also contributed to the Company's success in attracting borrowers.
11
<PAGE>
The following table sets forth the classification of the Company's loans by
major category as of March 31, 2000 and December 31, 1999, respectively:
March 31, 2000 December 31, 1999
-------------- ------------------
(Dollars in thousands)
Amount Percent Amount Percent
------ ------- ------ -------
Commercial $ 85,151 69.6% $ 83,638 70.6%
Mortgage 19,749 16.2% 18,567 15.7%
Consumer 17,385 14.2% 16,340 13.7%
-------- ---- -------- ----
Total Loans $122,285 100% $118,545 100%
======== ==== ======== ====
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 elements include 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. Until the loan becomes
current, 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 of
interest.
The Company attempts to minimize overall credit risk through loan
diversification and its loan approval procedures. Due diligence begins at the
time a borrower and the Company begin to discuss the origination of a loan.
Documentation, including a borrower's credit history, materials establishing the
value and liquidity of potential collateral, the purpose of the loan, the source
and timing of the repayment of the loan, and other factors are analyzed before a
loan is submitted for approval. Loans made are also subject to periodic audit
and review.
12
<PAGE>
The following table sets forth information concerning the Company's
non-performing assets as of the dates indicated:
Non-Performing Assets
(dollars in thousands)
March 31, December 31,
2000 1999
--------- ------------
Non-performing loans $49 $25
Other real estate 0 0
--- ---
Total non-performing assets $49 $25
Non-performing loans to total gross loans 0.04% 0.02%
Non-performing assets to total assets 0.02% 0.01%
As of March 31, 2000, the Company had one non-accrual loan which represented a
commercial loan. At December 31, 1999, the Company had one non-accrual loan
which represented a line of credit.
Other than as disclosed above, there were no loans where information about
possible credit problems of borrowers causes management to have serious doubts
as to the ultimate collectibility of such loans.
As of March 31, 2000 and December 31, 1999, there were no concentrations of
loans exceeding 25% of the Company's total loans and the Company had no foreign
loans. The Company's loans are primarily to businesses and individuals located
in eastern Bergen County, New Jersey.
ALLOWANCE FOR LOAN LOSSES
The allowance for loan losses is a reserve established through charges to
earnings in the form of a provision for loan losses. The Company maintains an
allowance for loan losses at a sufficient level to provide for losses inherent
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 continuous 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. In addition to 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 the
expense and the allowance is reduced by net-chargeoffs (i.e. loans judged to be
uncollectible are charged against the reserve, less any recoveries on the
loans.) Although management attempts to maintain the allowance at an adequate
level, future addition to the allowance may be required based upon changes in
market conditions. Additionally, various regulatory agencies periodically review
the allowance for loan losses. These agencies may require additional provisions
based upon their judgment about information available to them at the time of
their examination.
13
<PAGE>
The Company's allowance for loan losses totaled $1,335,000 and $1,165,000 at
March 31, 2000 and 1999, respectively. This increase in the allowance is due to
the continued growth of the loan portfolio. The following is a summary of the
reconciliation of the allowance for loan losses for the three month periods
ended March 31, 2000 and 1999, respectively:
Three months ended
March 31,
2000 1999
---- ----
(dollars in thousands)
Balance, beginning of period $ 1,310 $ 1,127
Charge-offs (25) (2)
Recoveries 0 0
Provision charged to expense 50 40
------- -------
Balance, end of period $ 1,335 $ 1,165
======= =======
Ratio of net charge-offs to
average loans outstanding 0.02% 0.00%
Balance of allowance at end of period as
a percentage of loans at end of period 1.09% 1.20%
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 comprised of U.S. Treasury
Securities, obligation of U.S. Government Agencies, selected municipal and state
obligations, stock in the Federal Home Loan Bank ("FHLB"), and equity securities
of another financial institution.
Management determines the appropriate classification of securities at the time
of purchase. At March 31, 2000, $40,997,000 of the Company's investment
securities were classified as held to maturity and $23,330,000 were classified
as available for sale. At March 31, 2000, the Company held no securities which
it classified as trading securities.
14
<PAGE>
At March 31, 2000, total investment securities were $64,327,000, a decrease of
$4,726,000, from total investment securities of $69,053,000 at December 31,
1999. This decrease in investment securities from year end 1999 to first quarter
end 2000 reflects maturity of investment securities which were used to fund loan
growth.
The following table sets forth the carrying value of the Company's security
portfolio as of the dates indicated.
A comparative summary of securities available for sale at March 31, 2000 and
December 31, 1999 is as follows (in thousands):
<TABLE>
<CAPTION>
Gross Gross Fair
Amortized Unrealized Unrealized Market
Cost Gains Losses Value
----------- ------------ ------------ ----------
<S> <C> <C> <C> <C>
March 31, 2000
- --------------
U.S. Government and agency
Obligations $23,053 - (575) $22,478
FHLBNY stock 512 - - 512
Other equity securities 469 - (129) 340
----------- ------------ ------------ ----------
Total available for sale $24,034 - (704) $23,330
December 31, 1999
- -----------------
U.S. Government and agency
Obligations $22,035 - (668) $21,367
FHLBNY stock 512 - - 512
Other equity securities 469 - (141) 328
----------- ------------ ------------ ----------
Total available for sale $23,016 - (809) $22,207
</TABLE>
A comparative summary of securities held to maturity at March 31, 2000 and
December 31, 1999 is as follows (in thousands):
<TABLE>
<CAPTION>
Gross Gross Fair
Amortized Unrealized Unrealized Market
Cost Gains Losses Value
----------- ------------ ------------ ----------
<S> <C> <C> <C> <C>
March 31, 2000
- --------------
U.S. Government and agency
Obligations $31,584 3 (361) $31,226
Municipal and state obligations 9,413 2 - 9,415
----------- ------------ ------------ ----------
Total held to maturity $40,997 5 (361) $40,641
December 31, 1999
- -----------------
U.S. Government and agency
Obligations $34,596 - (273) $34,323
Municipal and state obligations 12,250 4 - 12,254
----------- ------------ ------------ ----------
Total held to maturity $46,846 4 (273) $46,577
</TABLE>
15
<PAGE>
The following table sets forth as of March 31, 2000, the maturity distribution
of the Company's debt investment portfolio:
Maturity of Debt Investment Securities
March 31, 2000
(in thousands)
<TABLE>
<CAPTION>
Securities Securities
Held to Maturity Available for Sale
---------------------------------------------- --------------------------------------------
Weighted Weighted
Amortized Market Average Amortized Market Average
Cost Value Yield Cost Value Yield
------------ ------------- ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Within 1 Year $17,131 $17,116 5.82% $2,981 $ 2,976 5.73%
1 to 5 Years 23,866 23,525 6.01% 20,072 19,502 6.31%
------- ------- ------- -------
$40,997 $40,641 $23,053 $22,478
======= ======= ======= =======
</TABLE>
The Company sold no securities from its portfolio during the first quarter of
2000 or 1999.
16
<PAGE>
DEPOSITS
Deposits are the Company's primary source of funds. The Company experienced a
growth in deposit balances of $275,000 or 0.2% to $183,480,000 at March 31, 2000
as compared to $183,205,000 at December 31, 1999. This growth was accomplished
as a result of continued market penetration as well as continued customer
referrals. Within the increase in total deposits, non-interest bearing deposits
grew $4,039,000 or 7.8% to $56,035,000 at March 31, 2000 from $51,996,000 at
December 31, 1999. 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 (in thousands):
<TABLE>
<CAPTION>
March 31, December 31,
2000 1999
---- ----
Amount % Amount %
------ - ------ -
<S> <C> <C> <C> <C>
Non-interest Bearing Demand $56,035 30.5% $51,996 28.4%
Interest Bearing Demand 43,193 23.5% 44,088 24.1%
Savings 21,827 11.9% 21,914 12.0%
Time Deposits 62,425 34.1% 65,207 35.5%
-------- ----- -------- -----
$183,480 100% $183,205 100%
======== ==== ======== ====
</TABLE>
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 March 31, 2000 (in thousands).
Three months or less $ 17,584
Over three months through twelve months 17,049
Over one year through three years 425
Over three years 0
-----------
TOTAL $ 35,058
===========
17
<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 flow and loan
prepayments are greatly influenced by general interest rates, economic
conditions, and competition.
The Company's total deposits equaled $183,480,000 at March 31, 2000 as compared
to $183,205,000 at December 31, 1999. The increase in funds provided by deposit
inflows and maturity of securities during this period has been more than
sufficient to provide 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 investments 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 Bank's investment portfolio
also includes securities available for sale to provide liquidity for anticipated
loan demand and other liquidity needs.
Although the Bank has traditionally been a net "seller" of federal funds,
the Bank 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.
18
<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 the amount of 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 resulting in a decrease in net
interest income. 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 Bank 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 historical repayment rates.
19
<PAGE>
Cumulative Rate Sensitive Balance Sheet
March 31, 2000
(in thousands)
<TABLE>
<CAPTION>
0 - 3 0 - 6 0 - 1 0 - 5 All
Months Months Year Year 5 + Years Others TOTAL
------ ------ ---- ---- --------- ------ -----
<S> <C> <C> <C> <C> <C> <C> <C>
Investment Securities $ 9,408 $ 10,658 $ 20,108 $ 62,476 $ 999 $ 852 $ 64,327
Loans:
Commercial 27,157 28,056 31,282 78,601 6,550 0 85,151
Mortgage 127 127 711 14,724 5,025 0 19,749
Consumer 14,485 14,500 14,555 17,167 218 0 17,385
Federal Funds Sold 3,000 3,000 3,000 3,000 0 0 3,000
Other Assets 0 0 0 0 0 15,027 15,027
------- -------- -------- -------- -------- -------- --------
TOTAL ASSETS $54,177 $ 56,341 $ 69,656 $175,968 $188,760 $204,639 $204,639
======= ======= ======= ======== ======== ======== ========
Transaction /
Demand $28,408 $ 28,408 $ 28,408 $ 28,408 $ 0 $ 0 $ 28,408
Money Market 14,786 14,786 14,786 14,786 0 0 14,786
Savings 21,827 21,827 21,827 21,827 0 0 21,827
CD's < $100,000 13,717 21,473 25,900 27,367 0 0 27,367
CD's > $100,000 17,584 30,194 34,633 35,058 0 0 35,058
Other Liabilities 0 0 0 0 0 57,211 57,211
Equity 0 0 0 0 0 19,982 19,982
------- -------- -------- -------- -------- -------- --------
TOTAL LIABILITIES AND EQUITY $96,322 $116,688 $125,554 $127,446 $127,446 $204,639 $204,639
======= ======== ======== ======== ======== ======== ========
Dollar Gap (42,145) (60,347) (55,898) 48,522 61,314
Gap / Total Assets -20.60% -29.49% -27.32% 23.71% 29.96%
Target Gap Range +/-35.0% +/- 30.0% +/- 25.0% +/-25.0%
RSA / RSL 56.25% 48.28% 55.48% 138.07% 148.11%
(Rate Sensitive Assets to
Rate Sensitive Liabilities)
</TABLE>
20
<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 perpetual
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 3.0%. 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 ongoing regulatory examination process. The
Company 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 March 31, 2000, as well as the required minimum regulatory capital
ratios:
Capital Adequacy
Minimum
March 31, Regulatory
2000 Requirements
--------- ------------
Risk-Based Capital:
Tier I Capital Ratio 15.95% 4.0%
Total Capital Ratio 16.71% 8.0%
Leverage Ratio 10.01% 3.0%
IMPACT OF INFLATION AND CHANGING PRICES
The consolidated financial statements of the Company and notes thereto,
presented elsewhere herein, have been prepared in accordance with generally
accepted accounting principles, which require the measurement of financial
position and operating results in terms of historical dollars without
considering the change in the relative purchasing power of money over time and
due to inflation. The impact of inflation is reflected in the increased cost of
the Company's operations. Unlike most industrial companies, nearly all of the
assets and liabilities of the Company are monetary. As a result, interest rates
have a greater impact on the Company's performance than do the effects of
general levels of inflation. Interest rates do not necessarily move in the same
direction or to the same extent as the prices of goods and services.
21
<PAGE>
CURRENT OPERATIONAL AND ACCOUNTING ISSUES
SFAS No. 133
In June, 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities". This statement establishes accounting and
reporting standards for derivative instruments and for hedging activities. SFAS
No. 133 supersedes the disclosure requirements in SFAS No. 80, 105, and 119.
This statement was to be effective for periods after June 15, 1999. SFAS 137
extended the adoption date of SFAS 133 to fiscal years beginning after June 15,
2000. The adoption of SFAS No. 133 is not expected to have a material impact on
the financial position or results of operations of the Company.
22
<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. Other information - NONE
Item 6. Exhibits and reports on Form 8-K - NONE
23
<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 Chief Executive Officer
Date: May 12, 2000
24
<PAGE>
INDEX TO EXHIBITS
Exhibit
Number Description of Exhibits
- ------- -----------------------
27 Financial Data Schedule
25
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
This schedule contains summary financial information extracted from the
registrant's unaudited March 31, 2000 financial statements and is qualified in
its entirety by reference to such financial statements.
</LEGEND>
<CIK> 0001022809
<NAME> BRIDGEVIEW BANCORP
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-END> MAR-31-2000
<CASH> 10,282,000
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 3,000,000
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 23,330,000
<INVESTMENTS-CARRYING> 40,997,000
<INVESTMENTS-MARKET> 40,641,000
<LOANS> 122,285,000
<ALLOWANCE> 1,335,000
<TOTAL-ASSETS> 204,639,000
<DEPOSITS> 183,480,000
<SHORT-TERM> 0
<LIABILITIES-OTHER> 1,177,000
<LONG-TERM> 0
0
0
<COMMON> 21,263,000
<OTHER-SE> (1,281,000)
<TOTAL-LIABILITIES-AND-EQUITY> 204,639,000
<INTEREST-LOAN> 2,554,000
<INTEREST-INVEST> 996,000
<INTEREST-OTHER> 0
<INTEREST-TOTAL> 3,550,000
<INTEREST-DEPOSIT> 989,000
<INTEREST-EXPENSE> 989,000
<INTEREST-INCOME-NET> 2,561,000
<LOAN-LOSSES> 50,000
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 1,152,000
<INCOME-PRETAX> 1,359,000
<INCOME-PRE-EXTRAORDINARY> 1,359,000
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 866,000
<EPS-BASIC> 0.30
<EPS-DILUTED> 0.29
<YIELD-ACTUAL> 0
<LOANS-NON> 49
<LOANS-PAST> 49
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 1,310,000
<CHARGE-OFFS> 25,000
<RECOVERIES> 0
<ALLOWANCE-CLOSE> 1,335,000
<ALLOWANCE-DOMESTIC> 1,335,000
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
