<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 March 31, 1997 Commission file number 0-14403
BRUNSWICK BANCORP
-----------------
(Exact Name of Registrant as Specified in its Charter)
--------------
NEW JERSEY 22-2610694
---------- ----------
(State of 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 March 31, 1997
--------------
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
----------------------------------
<TABLE>
<CAPTION>
I N D E X
---------
P A G E
-------
PART I - FINANCIAL INFORMATION
- ------------------------------
<S> <C>
Item 1. Financial Statements (Unaudited):
Consolidated Balance Sheets
March 31, 1997 and December 31, 1996 1
Consolidated Statements of Income
Three Months Ended March 31, 1997, 1996 and 1995 2
Consolidated Statements of Stockholders' Equity
Three Months Ended March 31, 1997, 1996 and 1995 3
Consolidated Statements of Cash Flows
Three Months Ended March 31, 1997, 1996 and 1995 4
Notes to Consolidated Financial Statements 5-6
Item 2. Management's Discussion and Analysis of Financial
Conditions and Results of Operations 7-8
PART II - OTHER INFORMATION
- ---------------------------
Item 6. Exhibits and Reports on Form 8-K 9
Signatures 10
</TABLE>
<PAGE> 3
BRUNSWICK BANCORP AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
UNAUDITED
<TABLE>
<CAPTION>
MAR 31 DEC 31
1997 1996
---- ----
<S> <C> <C>
ASSETS:
Cash and due from banks $ 5,984,131 $ 9,190,838
Federal funds sold 10,100,000 20,100,000
Securities held to maturity 17,875,894 13,889,332
Loans receivable, net 53,212,746 52,853,869
Premises and equipment 1,032,481 924,433
Foreclosed real estate 3,549,544 3,577,329
Other assets 1,071,454 801,155
----------- ------------
NET ASSETS $92,826,250 $101,336,956
=========== ============
LIABILITIES AND STOCKHOLDERS' EQUITY:
Liabilities:
Deposits:
Demand deposits $23,792,290 $ 25,622,228
NOW accounts 14,954,261 21,664,491
Savings deposits 13,363,665 13,757,450
Time deposits 20,594,154 20,753,960
----------- ------------
Total deposits 72,704,370 81,798,129
Borrowed funds 485,485 301,941
Accrued expenses and other liabilities 802,363 583,956
----------- ------------
Total liabilities 73,992,218 82,684,026
----------- ------------
Stockholders' equity:
Common stock, par value $2.00:
Authorized 3,000,000 shares;
issued 721,920 shares 1,443,840 1,443,840
Additional paid-in capital 4,284,804 4,284,804
Retained earnings 13,105,388 12,924,286
----------- ------------
Total stockholders' equity 18,834,032 18,652,930
----------- ------------
TOTAL LIABILITIES AND STOCKHOLDERS
EQUITY $92,826,250 $101,336,956
=========== ============
</TABLE>
1
<PAGE> 4
BRUNSWICK BANCORP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
THREE MONTHS ENDED MARCH 31, 1997, 1996 AND 1995
UNAUDITED
<TABLE>
<CAPTION>
1997 1996 1995
---------- ---------- ----------
<S> <C> <C> <C>
INTEREST INCOME:
Interest and fees on loans $1,345,664 $1,129,913 $1,254,617
Interest on investment securities:
Taxable 222,560 232,397 343,633
Exempt from Federal income tax 2,100 3,031 3,892
Interest on Federal funds sold 229,144 295,025 249,756
---------- ---------- ----------
Total interest income 1,799,468 1,660,366 1,851,898
---------- ---------- ----------
INTEREST EXPENSE:
Interest on deposits 483,181 482,625 372,853
Interest on borrowed funds 3,432 4,200 5,342
---------- ---------- ----------
Total interest expense 486,613 486,825 378,195
---------- ---------- ----------
Net interest income 1,312,855 1,173,541 1,473,703
Provision for credit losses 170,000 75,000 175,000
---------- ---------- ----------
Net interest income after
provision for credit losses 1,142,855 1,098,541 1,298,703
---------- ---------- ----------
NON-INTEREST INCOME:
Service fees 188,952 168,033 165,620
Other non-interest income -- 24,035 --
---------- ---------- ----------
Total non-interest income 188,952 192,068 165,620
---------- ---------- ----------
NON-INTEREST EXPENSES:
Salaries and wages 399,579 442,654 353,792
Employee benefits 109,540 110,283 79,044
Occupancy 154,437 165,029 156,928
Furniture and equipment 40,489 35,771 33,263
Other non-interest expenses 290,180 281,354 423,458
---------- ---------- ----------
Total non-interest expenses 994,225 1,035,091 1,046,485
---------- ---------- ----------
Income before income taxes 337,582 255,518 417,838
Income tax expense 156,480 113,887 194,973
---------- ---------- ----------
NET INCOME $ 181,102 $ 141,631 $ 222,865
========== ========== ==========
NET INCOME PER SHARE $ .25 $ .20 $ .31
========== ========== ==========
</TABLE>
2
<PAGE> 5
BRUNSWICK BANCORP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
THREE MONTHS ENDED MARCH 31, 1997, 1996 AND 1995
UNAUDITED
<TABLE>
<CAPTION>
COMMON RETAINED
STOCK SURPLUS EARNINGS TOTAL
----- ------- -------- -----
Balance
<S> <C> <C> <C> <C>
Dec. 31, 1994 $1,203,540 $2,722,854 $12,812,629 $16,739,023
Net income -- -- 222,865 222,865
---------- ---------- ----------- -----------
Balance
March 31, 1995 $1,203,540 $2,722,854 $13,035,494 $16,961,888
========== ========== =========== ===========
Balance
Dec. 31, 1995 $1,443,840 $4,284,804 $12,161,436 $17,890,080
Net income -- -- 141,631 141,631
---------- ---------- ----------- -----------
Balance
March 31, 1996 $1,443,840 $4,284,804 $12,303,067 $18,031,711
========== ========== =========== ===========
Balance
Dec. 31, 1996 $1,443,840 $4,284,804 $12,924,286 $18,652,930
Net income -- -- 181,102 181,102
---------- ---------- ----------- -----------
Balance
March 31, 1997 $1,443,840 $4,284,804 $13,105,388 $18,834,032
========== ========== =========== ===========
</TABLE>
3
<PAGE> 6
BRUNSWICK BANCORP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED MARCH 31, 1997, 1996 AND 1995
UNAUDITED
<TABLE>
<CAPTION>
1997 1996 1995
---- ---- ----
<S> <C> <C> <C>
OPERATING ACTIVITIES:
Net income $ 181,102 $ 141,631 $ 222,865
Adjustments to reconcile net
income to cash provided by
operating activities:
Provision for credit losses 170,000 75,000 175,000
Depreciation and amortization 31,090 24,972 23,902
Net accretion of securities
discounts (14,528) (13,808) (175,965)
(Increase) decrease in other
assets (270,299) 169,404 99,069
Increase in accrued expenses
and other liabilities 218,407 141,176 165,301
------------ ---------- ----------
CASH FLOWS FROM
OPERATING ACTIVITIES 315,772 538,375 510,172
------------ ---------- ----------
INVESTING ACTIVITIES:
Net (increase) decrease in
Federal funds sold 10,000,000 (4,000,000) 10,200,000
Maturities of investment
securities 7,000,000 7,000,000 --
Principal repayments on invest-
ment securities 40,266 66,468 40,742
Purchase of investment
securities (11,012,300) (6,965,000) --
Net (increase) decrease in loans
receivable (501,092) (2,214,685) 107,274
Acquisitions of premises and
equipment (139,138) (83,977) --
------------ ---------- ----------
CASH FLOWS FROM
INVESTING ACTIVITIES 5,387,736 (6,197,194) 10,348,016
------------ ---------- ----------
FINANCING ACTIVITIES:
Net increase (decrease) in
demand deposits (1,829,938) 1,935,293 2,159,002
Net increase (decrease) in
NOW accounts (6,710,230) 4,394,240 (5,466,582)
Net increase (decrease) in
savings deposits (393,785) 59,783 87,108
Net increase (decrease) in
time deposits (159,806) (1,649,172) (7,919,570)
Net increase (decrease) in
borrowed funds 183,544 9,995 (438,750)
------------ ---------- ----------
CASH FLOWS FROM
FINANCING ACTIVITIES (8,910,215) 4,750,139 (11,578,792)
------------ ---------- ----------
Decrease in cash and cash
equivalents (3,206,707) (908,680) (720,604)
Cash and cash equivalents at
January 1 9,190,838 6,348,014 4,072,796
------------ ---------- ----------
Cash and cash equivalents at
March 31 $ 5,984,131 $5,439,334 $3,352,192
============ ========== ==========
</TABLE>
4
<PAGE> 7
BRUNSWICK BANCORP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1997
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>
MARCH 31, 1997
BOOK VALUE MARKET VALUE
---------- ------------
<S> <C> <C>
U.S. Treasury $ 5,010,683 $ 5,010,800
U.S. Government Agencies 11,377,167 11,540,291
States and political subdivisions 92,756 92,756
Other securities 1,395,288 1,424,545
----------- -----------
$17,875,894 $18,068,392
=========== ===========
</TABLE>
<TABLE>
<CAPTION>
DECEMBER 31, 1996
BOOK VALUE MARKET VALUE
---------- ------------
<S> <C> <C>
U.S. Treasury $12,007,366 $12,009,420
U.S. Government Agencies 382,363 723,637
States and political subdivisions 104,988 104,988
Other securities 1,394,615 1,432,255
----------- -----------
$13,889,332 $14,270,300
=========== ===========
</TABLE>
5
<PAGE> 8
BRUNSWICK BANCORP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1997
UNAUDITED
NOTE 3
NET LOANS
The composition of net loans is as follows:
<TABLE>
<CAPTION>
MARCH 31 DECEMBER 31
1997 1996
-------- -----------
<S> <C> <C>
Commercial loans $27,362,236 $27,511,401
Real estate loans 25,865,266 25,190,905
Consumer loans 1,165,743 1,111,539
----------- -----------
54,393,245 53,813,845
Less:
Allowance for credit losses 1,026,827 842,103
Unearned income 153,672 117,873
----------- -----------
$53,212,746 $52,853,869
=========== ===========
</TABLE>
NOTE 4
PREMISES AND EQUIPMENT
The major components of premises and equipment are as follows:
<TABLE>
<CAPTION>
MARCH 31 DECEMBER 31
1997 1996
-------- ----------
<S> <C> <C>
Land $ 300,705 $ 300,705
Buildings 562,049 562,049
Leasehold improvements 70,137 70,137
Equipment 993,532 854,394
---------- ----------
1,926,423 1,787,285
Less accumulated depreciation
and amortization 893,942 862,852
---------- ----------
$1,032,481 $ 924,433
========== ==========
</TABLE>
6
<PAGE> 9
BRUNSWICK BANCORP AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS
MARCH 31, 1997
The most significant change in the Corporation's Balance Sheet since December
31, 1996 is the decrease in deposits of approximately $9,000,000. Most of this
decrease occurred in Public Funds NOW accounts.
As a result of this decrease in deposits, Federal funds sold decreased by
$10,000,000.
Also noteworthy is an increase of approximately $185,000 in the allowance for
credit losses which resulted mainly from $170,000 in credit loss provisions. At
March 31, 1997, the allowance for credit losses represented 1.9% of total loans
and 25.4% of past due and nonaccrual loans.
The results of operations for the first quarter of 1997, compared to the same
period of 1996, show an increase in income before taxes of approximately
$82,000. The main reasons for this increase are a $139,000 increase in net
interest income offset by a increase in the provision for credit losses of
$95,000, and a decrease in non-interest expenses of approximately $41,000. The
decrease in net interest income is analyzed in detail on page 8.
The $24,000 of other non-interest income reported for the first quarter of 1996
represents rental income on properties acquired through foreclosure net of
applicable expenses. During the first quarter of 1997, expenses exceeded rental
income and the resulting net expenses is included in other non-interest expenses
for that period.
Salaries and wages decreased by $43,000 mostly because of reductions to staff.
All other non-interest expenses were comparable to 1996 amounts.
The Corporation's capital position continues to be one of its strong points. At
March 31, 1997 our total risk-based capital ratios was 28.9% which is 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.
7
<PAGE> 10
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>
Three Months Ended March 31, 1997
Versus
Three Months Ended March 31, 1996
Interest income on:
Loans $ 203 $ 12 $ 215
Investment securities ( 8) ( 2) ( 10)
Federal funds sold ( 60) ( 6) ( 66)
------ ------ -------
Total interest income 135 4 139
------ ------ -------
Interest expense on:
Deposits 13 ( 13) 0
Borrowed funds 0 0 0
------ ------ -------
Total interest expense 13 ( 13) 0
------ ------ -------
Net interest income $ 122 $ 17 $ 139
====== ====== =======
</TABLE>
8
<PAGE> 11
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 three month period ended March 31,
1997.
9
<PAGE> 12
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
04-24-97 Carmen J. Gumina
- ---------------- --------------------------------------
Date Carmen J. Gumina
President
04-24-97 Thomas Fornale
- --------------- --------------------------------------
Date Thomas Fornale
Treasurer
10
<TABLE> <S> <C>
<ARTICLE> 9
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 5,984,131
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 10,100,000
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 0
<INVESTMENTS-CARRYING> 17,875,894
<INVESTMENTS-MARKET> 18,068,392
<LOANS> 54,239,573
<ALLOWANCE> 1,026,827
<TOTAL-ASSETS> 92,826,250
<DEPOSITS> 72,704,370
<SHORT-TERM> 485,485
<LIABILITIES-OTHER> 802,363
<LONG-TERM> 0
0
0
<COMMON> 1,443,840
<OTHER-SE> 17,390,192
<TOTAL-LIABILITIES-AND-EQUITY> 92,826,250
<INTEREST-LOAN> 1,345,664
<INTEREST-INVEST> 224,660
<INTEREST-OTHER> 229,144
<INTEREST-TOTAL> 1,799,468
<INTEREST-DEPOSIT> 483,181
<INTEREST-EXPENSE> 486,613
<INTEREST-INCOME-NET> 1,312,855
<LOAN-LOSSES> 170,000
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 994,225
<INCOME-PRETAX> 337,582
<INCOME-PRE-EXTRAORDINARY> 181,102
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 181,102
<EPS-PRIMARY> .25
<EPS-DILUTED> .25
<YIELD-ACTUAL> 0
<LOANS-NON> 1,901
<LOANS-PAST> 111
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 842,103
<CHARGE-OFFS> 6,857
<RECOVERIES> 21,581
<ALLOWANCE-CLOSE> 1,026,827
<ALLOWANCE-DOMESTIC> 1,026,827
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
