<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
-----------------
Quarter ended September 30, 1996 Commission file number 0-14403
BRUNSWICK BANCORP
(Exact Name of Registrant as Specified in its Charter)
-----------------
NEW JERSEY 22-2610694
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
NEW BRUNSWICK, NEW JERSEY 08901
Address of principal executive offices) (Zip Code)
(908) 247-5800
(Registrant's Telephone Number Including Area Code)
NOT APPLICABLE
(Former Name, Former Address and Former Fiscal Year
if Changed Since Last Report)
COMMON STOCK, PAR VALUE $2.00 721,920 SHARES
(Class of Stock) (Outstanding at September 30, 1996)
-----------------
Indicate by check mark whether the registrant (1) has filed all reports
required 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 periods that the
registrant was required to file such report), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X NO
----- -----
<PAGE> 2
BRUNSWICK BANCORP AND SUBSIDIARIES
I N D E X
P A G E
-------
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited):
Consolidated Balance Sheets
September 30, 1996 and December 31, 1995 1
Consolidated Statements of Income
Nine Months Ended September 30, 1996, 1995 and 1994 2
Consolidated Statements of Income
Quarters Ended September 30, 1996, 1995 and 1994 3
Consolidated Statements of Stockholders' Equity
Nine Months Ended September 30, 1996, 1995 and 1994 4
Consolidated Statements of Cash Flows
Nine Months Ended September 30, 1996, 1995 and 1994 5
Notes to Consolidated Financial Statements 6-7
Item 2. Management's Discussion and Analysis of Financial
Conditions and Results of Operations 8-9
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 10
Signatures 11
<PAGE> 3
BRUNSWICK BANCORP AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
UNAUDITED
<TABLE>
<CAPTION>
SEP 30 DEC 31
1996 1995
---- ----
<S> <C> <C>
ASSETS:
Cash and due from banks $ 5,875,798 $ 6,348,014
Federal funds sold 18,100,000 21,000,000
Investment securities 13,934,832 14,129,902
Loans 50,751,392 46,408,294
Less allowance for credit losses 1,119,409 867,189
----------- -----------
Net loans 49,631,983 45,541,105
Premises and equipment 939,748 769,788
Other real estate owned 4,294,523 3,613,007
Accrued interest receivable and other assets 759,119 1,035,620
----------- -----------
TOTAL ASSETS $93,536,003 $92,437,436
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY:
Liabilities:
Deposits:
Demand deposits $24,486,005 $24,290,027
NOW accounts 14,934,481 13,663,887
Savings deposits 13,146,484 14,412,413
Time deposits 21,139,354 20,958,897
----------- -----------
Total deposits 73,706,324 73,325,224
Borrowed funds 523,620 368,247
Accrued expenses and other liabilities 893,287 853,885
----------- -----------
Total liabilities 75,123,231 74,547,356
----------- -----------
Stockholders' equity:
Common stock, par value $2.00:
Authorized 3,000,000 shares;
issued 721,920 shares 1,443,840 1,443,840
Surplus 4,284,804 4,284,804
Retained earnings 12,684,128 12,161,436
----------- -----------
Total stockholders' equity 18,412,772 17,890,080
----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS EQUITY $93,536,003 $92,437,436
=========== ===========
</TABLE>
1
<PAGE> 4
BRUNSWICK BANCORP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
NINE MONTHS ENDED SEPTEMBER 30, 1996, 1995 AND 1994
UNAUDITED
<TABLE>
<CAPTION>
1996 1995 1994
---- ---- ----
<S> <C> <C> <C>
INTEREST INCOME:
Interest and fees on loans $3,791,718 $3,653,721 $3,292,920
Interest on investment securities:
Taxable 638,166 1,016,257 590,445
Exempt from Federal income tax 8,441 11,045 13,478
Interest on Federal funds sold 866,174 788,141 680,101
Interest on deposits with banks -- -- 516
---------- ---------- ----------
Total interest income 5,304,499 5,469,164 4,577,460
---------- ---------- ----------
INTEREST EXPENSE:
Interest on deposits 1,478,535 1,298,966 991,880
Interest on borrowed funds 10,178 17,419 10,959
---------- ---------- ----------
Total interest expense 1,488,713 1,316,385 1,002,839
---------- ---------- ----------
Net interest income 3,815,786 4,152,779 3,574,621
Provision for credit losses 350,000 350,000 450,000
---------- ---------- ----------
Net interest income after
provision for credit losses 3,465,786 3,802,779 3,124,621
---------- ---------- ----------
NON-INTEREST INCOME:
Service fees 539,586 636,552 499,520
Other non-interest income 55,824 1,500 157,979
---------- ---------- ----------
Total non-interest income 595,410 638,052 657,499
---------- ---------- ----------
NON-INTEREST EXPENSES:
Salaries and wages 1,314,008 1,158,351 1,020,232
Employee benefits 322,282 228,671 216,439
Occupancy 503,422 450,521 442,933
Furniture and equipment 136,622 123,206 131,964
Other non-interest expenses 872,235 1,360,978 1,029,111
---------- ---------- ----------
Total non-interest expenses 3,148,569 3,321,727 2,840,679
---------- ---------- ----------
Income before income taxes 912,627 1,119,104 941,441
Income tax expense 389,935 592,510 357,325
---------- ---------- ----------
NET INCOME $ 522,692 $ 526,594 $ 584,116
========== ========== ==========
NET INCOME PER SHARE $ .72 $ .73 $ .81
========== ========== ==========
</TABLE>
2
<PAGE> 5
BRUNSWICK BANCORP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
QUARTERS ENDED SEPTEMBER 30, 1996, 1995 AND 1994
UNAUDITED
<TABLE>
<CAPTION>
1996 1995 1994
---- ---- ----
<S> <C> <C> <C>
INTEREST INCOME:
Interest and fees on loans $1,280,954 $1,218,292 $1,149,954
Interest on investment securities:
Taxable 201,845 329,763 180,283
Exempt from Federal income tax 2,604 3,470 4,297
Interest on Federal funds sold 302,853 256,726 246,592
Interest on deposits with banks -- -- --
---------- ---------- ----------
Total interest income 1,788,256 1,808,251 1,581,126
---------- ---------- ----------
INTEREST EXPENSE:
Interest on deposits 511,369 451,457 312,425
Interest on borrowed funds 3,585 6,598 4,022
---------- ---------- ----------
Total interest expense 514,954 458,055 316,447
---------- ---------- ----------
Net interest income 1,273,302 1,350,196 1,264,679
Provision for credit losses 140,000 50,000 135,000
---------- ---------- ----------
Net interest income after
provision for credit losses 1,133,302 1,300,196 1,129,679
---------- ---------- ----------
NON-INTEREST INCOME:
Service fees 189,874 196,288 159,948
Other non-interest income 21,173 -- --
---------- ---------- ----------
Total non-interest income 211,047 196,288 159,948
---------- ---------- ----------
NON-INTEREST EXPENSES:
Salaries and wages 422,299 409,958 344,471
Employee benefits 98,807 72,217 72,254
Occupancy 161,792 151,032 144,332
Furniture and equipment 57,801 44,788 43,847
Other non-interest expenses 279,998 461,537 323,862
---------- ---------- ----------
Total non-interest expenses 1,020,697 1,139,532 928,766
---------- ---------- ----------
Income before income taxes 323,652 356,952 360,861
Income tax expense 138,299 201,754 141,381
---------- ---------- ----------
NET INCOME $ 185,353 $ 155,198 $ 219,480
========== ========== ==========
NET INCOME PER SHARE $ .25 $ .22 $ .30
========== ========== ==========
</TABLE>
3
<PAGE> 6
BRUNSWICK BANCORP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
NINE MONTHS ENDED SEPTEMBER 30, 1996, 1995 AND 1994
UNAUDITED
<TABLE>
<CAPTION>
COMMON RETAINED
STOCK SURPLUS EARNINGS TOTAL
----- ------- -------- -----
<S> <C> <C> <C> <C>
Balance
Dec. 31, 1993 $ 1,003,252 $ 1,420,982 $13,342,147 $15,766,381
Net income -- -- 584,116 584,116
----------- ----------- ----------- -----------
Balance
Sept. 30, 1994 $ 1,003,252 $ 1,420,982 $13,926,263 $16,350,497
=========== =========== =========== ===========
Balance
Dec. 31, 1994 $ 1,203,540 $ 2,722,854 $12,812,629 $16,739,023
Net income -- -- 526,594 526,594
----------- ----------- ----------- -----------
Balance
Sept. 30, 1995 $ 1,203,540 $ 2,722,854 $13,339,223 $17,265,617
=========== =========== =========== ===========
Balance
Dec. 31, 1995 $ 1,443,840 $ 4,284,804 $12,161,436 $17,890,080
Net income -- -- 522,692 522,692
----------- ----------- ----------- -----------
Balance
Sept. 30, 1996 $ 1,443,840 $ 4,284,804 $12,684,128 $18,412,772
=========== =========== =========== ===========
</TABLE>
4
<PAGE> 7
BRUNSWICK BANCORP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
NINE MONTHS ENDED SEPTEMBER 30, 1996, 1995 AND 1994
UNAUDITED
<TABLE>
<CAPTION>
1996 1995 1994
---- ---- ----
<S> <C> <C> <C>
OPERATING ACTIVITIES:
Net income $ 522,692 $ 526,594 $ 584,116
Adjustments to reconcile net
income to cash provided by
operating activities:
Provision for credit losses 350,000 350,000 450,000
Depreciation and amortization 86,440 71,717 82,471
Net accretion of securities (58,820) (450,117) (170,594)
discounts
(Increase) decrease in interest
receivable and other assets 276,501 241,726 (233,863)
Increase in interest
payable and other liabilities 39,402 269,314 306,313
----------- ------------ -----------
NET CASH PROVIDED BY
OPERATING ACTIVITIES 1,216,215 1,009,234 1,018,443
----------- ------------ -----------
INVESTING ACTIVITIES:
Net decrease in
Federal funds sold 2,900,000 4,300,000 9,300,000
Proceeds from maturities of
investment securities 7,000,000 13,000,000 10,000,000
Return of capital on investment
securities 218,890 157,199 960,276
Purchase of investment
securities (6,965,000) (5,005,465) (7,762,500)
Net (increase) decrease in loans (5,122,394) 2,763,225 (4,010,930)
Capital acquisitions (256,400) -- (67,008)
----------- ------------ -----------
NET CASH PROVIDED BY
INVESTING ACTIVITIES (2,224,904) 15,214,959 8,419,838
----------- ------------ -----------
FINANCING ACTIVITIES:
Net decrease in demand deposits 195,978 2,104,588 468,919
Net decrease in NOW accounts 1,270,594 (8,593,931) (4,027,870)
Net increase (decrease) in
savings deposits (1,265,929) (1,321,883) 1,009,287
Net increase (decrease) in
time deposits 180,457 (5,886,573) (6,722,795)
Net increase (decrease) in
borrowed funds 155,373 (32,758) (56,408)
----------- ------------ -----------
NET CASH USED BY FINANCING
ACTIVITIES 536,473 (13,730,557) (9,328,867)
----------- ------------ -----------
Increase in cash and cash
equivalents (472,216) 2,493,636 109,414
Cash and Cash equivalents at
January 1 6,348,014 4,072,796 7,671,794
----------- ------------ -----------
Cash and Cash equivalents at
September 30 $ 5,875,798 $ 6,566,432 $ 7,781,208
=========== ============ ===========
</TABLE>
5
<PAGE> 8
BRUNSWICK BANCORP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1996
UNAUDITED
NOTE 1
BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information, and with the instructions to Form 10-Q and Rule 10-01 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, the information presented
includes all normal and recurring adjustments considered necessary for a fair
presentation of the interim period results.
NOTE 2
INVESTMENT SECURITIES
The following is a comparative summary of the book values and estimated market
values of investment securities:
<TABLE>
<CAPTION>
SEPT 30, 1996
BOOK VALUE MARKET VALUE
---------- ------------
<S> <C> <C>
U.S. Treasury $11,999,949 $11,988,410
U.S. Government Agencies 423,960 742,844
States and political subdivisions 116,980 116,980
Other securities 1,393,943 1,431,275
----------- -----------
$13,934,832 $14,279,509
=========== ===========
DECEMBER 31, 1995
BOOK VALUE MARKET VALUE
---------- ------------
U.S. Treasury $ 5,014,099 $ 5,041,250
U.S. Government Agencies 7,572,316 8,038,199
States and political subdivisions 151,564 151,564
Other securities 1,391,923 1,449,505
----------- -----------
$14,129,902 $14,680,518
=========== ===========
</TABLE>
6
<PAGE> 9
BRUNSWICK BANCORP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1996
UNAUDITED
NOTE 3
NET LOANS
The composition of net loans is as follows:
<TABLE>
<CAPTION>
SEPTEMBER 30 DECEMBER 31
1996 1995
----------- -----------
<S> <C> <C>
Commercial loans $25,729,289 $19,233,053
Real estate loans 23,959,074 26,109,107
Consumer loans 1,128,295 1,120,594
----------- -----------
50,816,658 46,462,754
Less:
Allowance for credit losses 1,119,409 867,189
Unearned income 65,266 54,460
----------- -----------
$49,631,983 $45,541,105
=========== ===========
</TABLE>
NOTE 4
PREMISES AND EQUIPMENT
The major components of premises and equipment are as follows:
<TABLE>
<CAPTION>
SEPTEMBER 30 DECEMBER 31
1996 1995
---------- ----------
<S> <C> <C>
Land $ 300,705 $ 300,705
Buildings 562,049 562,049
Leasehold improvements 89,071 284,456
Equipment 828,682 635,739
---------- ----------
1,780,507 1,782,949
Less accumulated depreciation
and amortization 840,759 1,013,161
---------- ----------
$ 939,748 $ 769,788
========== ==========
</TABLE>
7
<PAGE> 10
BRUNSWICK BANCORP AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS
SEPTEMBER 30, 1996
The most significant change in the Corporation's Balance Sheet since December
31, 1995 is the increase in loans of approximately $4,300,000. This increase in
loans was the result of intense commercial lending activity
Also noteworthy is an increase of approximately $252,000 in the allowance for
credit losses which resulted from $350,000 in credit loss provisions, offset by
$98,000 in charge offs net of recoveries. At September 30, 1996, the allowance
for credit losses represented 2.2% of total loans and 17.8% of past due and
nonaccrual loans.
The results of operations for the first three quarters of 1996, compared to the
same period of 1995, show a decrease in income before taxes of approximately
$206,000. The main components of this decrease are decreases in net interest
income and non-interest income of $337,000 and $42,000, respectively, offset by
$173,000 decrease in non-interest expenses. The decrease in net interest income
is analyzed on page 9.
Service fees decreased by $97,000 because of decreases in trust service fees and
credit card application fees of $48,000 and $52,000, respectively.
The $56,000 of other non-interest income reported for the first three quarters
of the current year represents rental income on properties acquired through
foreclosure net of applicable expenses. During the first three quarters of 1995
expenses exceeded rental income and the resulting net expenses is included in
other non-interest expenses for that period.
Salaries and wages increased by $156,000 because of increases in base salaries
and wages and additions to staff. Employee benefits increased by $94,000 mainly
because of $90,000 in contributions to a recently implemented deferred
compensation plan.
Other non-interest expenses decreased by $489,000. The main reason for this
decrease is that during the first three quarters of 1995, a $265,000 provision
was recorded for a civil penalty initiated by the United State Treasury
Department. The next two largest components of this decrease are a decrease in
advertising expense of $79,000 and a decrease in our FDIC assessment of $80,000.
Because of conservatism and the resulting asset quality, the Corporation's
capital position continues to be one of its strong points. At September 30, 1996
and December 31, 1995, the risk-based capital ratios were 33% and 35%, both of
which are well above the minimum regulatory guideline.
In Management's opinion, the Corporation's liquidity position is strong, based
on its high level of core deposits, the stability of its other funding sources
and the support provided by its capital base.
8
<PAGE> 11
BRUNSWICK BANCORP AND SUBSIDIARIES
ANALYSIS OF CHANGES IN NET INTEREST INCOME
(IN THOUSANDS)
<TABLE>
<CAPTION>
Increase (Decrease) Due to Changes in
Volume Rates Total
------ ----- -----
<S> <C> <C> <C>
Six Months Ended September 30, 1996
Versus
Six Months Ended September 30, 1995
Interest income on:
Loans $ 275 $(137) $ 138
Investment securities (340) (41) (381)
Federal funds sold 123 (45) 78
----- ----- -----
Total interest income 58 (223) (165)
----- ----- -----
Interest expense on:
Deposits 108 71 179
Borrowed funds -- (7) (7)
----- ----- -----
Total interest expense 108 64 172
----- ----- -----
Net interest income (50) $(287) $(337)
===== ===== =====
Quarter Ended September 30, 1996
Versus
Quarter Ended September 30, 1995 Interest income on:
Loans $ 196 $(133) $ 63
Investment securities (112) (17) (129)
Federal funds sold 75 (29) 46
----- ----- -----
Total interest income 159 (179) (20)
----- ----- -----
Interest expense on:
Deposits 47 13 60
Borrowed funds (3) -- (3)
----- ----- -----
Total interest expense 44 13 57
----- ----- -----
Net interest income $ 115 $(192) $ (77)
===== ===== =====
</TABLE>
9
<PAGE> 12
BRUNSWICK BANCORP AND SUBSIDIARIES
PART II - OTHER INFORMATION
Item 6 - Exhibits and Reports on Form 8-K
The Corporation filed no Form 8-K during the nine month period ended September
30, 1996.
10
<PAGE> 13
BRUNSWICK BANCORP AND SUBSIDIARIES
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned duly authorized.
BRUNSWICK BANCORP AND SUBSIDIARIES
10/25/96 /s/ Carmen J. Gumina
- -------- ----------------------
Date Carmen J. Gumina
President
10/25/96 /s/ Thomas Fornale
- -------- ----------------------
Date Thomas Fornale
Treasurer
11
<TABLE> <S> <C>
<ARTICLE> 9
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-30-1996
<CASH> 5,875,798
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 18,100,000
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 0
<INVESTMENTS-CARRYING> 13,934,832
<INVESTMENTS-MARKET> 14,279,509
<LOANS> 50,751,392
<ALLOWANCE> 1,119,409
<TOTAL-ASSETS> 93,536,003
<DEPOSITS> 73,706,324
<SHORT-TERM> 523,620
<LIABILITIES-OTHER> 893,287
<LONG-TERM> 0
0
0
<COMMON> 1,443,840
<OTHER-SE> 16,968,932
<TOTAL-LIABILITIES-AND-EQUITY> 93,536,003
<INTEREST-LOAN> 3,791,718
<INTEREST-INVEST> 646,607
<INTEREST-OTHER> 866,174
<INTEREST-TOTAL> 5,304,499
<INTEREST-DEPOSIT> 1,478,535
<INTEREST-EXPENSE> 1,488,713
<INTEREST-INCOME-NET> 3,815,786
<LOAN-LOSSES> 350,000
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 3,148,569
<INCOME-PRETAX> 912,627
<INCOME-PRE-EXTRAORDINARY> 522,692
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 522,692
<EPS-PRIMARY> .72
<EPS-DILUTED> .72
<YIELD-ACTUAL> 0
<LOANS-NON> 4,162,913
<LOANS-PAST> 510,849
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 867,189
<CHARGE-OFFS> 98,475
<RECOVERIES> 695
<ALLOWANCE-CLOSE> 1,119,409
<ALLOWANCE-DOMESTIC> 1,119,409
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
