<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 June 30, 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 June 30, 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
I N D E X
<TABLE>
<CAPTION>
P A G E
-------
<S> <C>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited):
Consolidated Balance Sheets
June 30, 1997 and December 31, 1996 1
Consolidated Statements of Income
Six Months Ended June 30, 1997, 1996 and 1995 2
Consolidated Statements of Income
Quarters Ended June 30, 1997, 1996 and 1995 3
Consolidated Statements of Stockholders' Equity
Six Months Ended June 30, 1997, 1996 and 1995 4
Consolidated Statements of Cash Flows
Six Months Ended June 30, 1997, 1996 and 1995 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
</TABLE>
<PAGE> 3
BRUNSWICK BANCORP AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
UNAUDITED
<TABLE>
<CAPTION>
JUNE 30 DEC 31
1997 1996
---- ----
<S> <C> <C>
ASSETS:
Cash and due from banks $ 6,918,856 $ 9,190,838
Federal funds sold 25,200,000 20,100,000
Securities held to maturity 12,842,368 13,889,332
Loans receivable, net 54,201,597 52,853,869
Premises and equipment 992,183 924,433
Foreclosed real estate 3,434,048 3,577,329
Other assets 1,221,139 801,155
------------ ------------
TOTAL ASSETS $104,810,191 $101,336,956
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY:
Liabilities:
Deposits:
Demand deposits $ 25,603,477 $ 25,622,228
NOW accounts 22,788,022 21,664,491
Savings deposits 13,006,770 13,757,450
Time deposits 23,148,666 20,753,960
------------ ------------
Total deposits 84,546,935 81,798,129
Borrowed funds 505,426 301,941
Accrued expenses and other liabilities 647,027 583,956
------------ ------------
Total liabilities 85,699,388 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 13,382,159 12,924,286
------------ ------------
Total stockholders' equity 19,110,803 18,652,930
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS EQUITY $104,810,191 $101,336,956
============ ============
</TABLE>
1
<PAGE> 4
BRUNSWICK BANCORP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
SIX MONTHS ENDED JUNE 30, 1997, 1996 AND 1995
UNAUDITED
<TABLE>
<CAPTION>
1997 1996 1995
---- ---- ----
<S> <C> <C> <C>
INTEREST INCOME:
Interest and fees on loans $2,827,851 $2,510,764 $2,435,429
Interest on investment securities:
Taxable 519,398 436,321 686,494
Exempt from Federal income tax 3,955 5,837 7,575
Interest on Federal funds sold 451,353 563,321 531,415
---------- ---------- ----------
Total interest income 3,802,557 3,516,243 3,660,913
---------- ---------- ----------
INTEREST EXPENSE:
Interest on deposits 967,928 967,166 847,509
Interest on borrowed funds 7,018 6,593 10,821
---------- ---------- ----------
Total interest expense 974,946 973,759 858,330
---------- ---------- ----------
Net interest income 2,827,611 2,542,484 2,802,583
Provision for credit losses 360,000 210,000 300,000
---------- ---------- ----------
Net interest income after
provision for credit losses 2,467,611 2,332,484 2,502,583
---------- ---------- ----------
NON-INTEREST INCOME:
Service fees 425,561 349,712 440,264
Other non-interest income -- 34,651 1,500
---------- ---------- ----------
Total non-interest income 425,561 384,363 441,764
---------- ---------- ----------
NON-INTEREST EXPENSES:
Salaries and wages 823,641 891,709 748,393
Employee benefits 227,407 223,475 156,454
Occupancy 322,781 341,630 299,489
Furniture and equipment 94,306 78,821 78,418
Other non-interest expenses 609,745 592,237 899,441
---------- ---------- ----------
Total non-interest expenses 2,077,880 2,127,872 2,182,195
---------- ---------- ----------
Income before income taxes 815,292 588,975 762,152
Income tax expense 357,419 251,636 390,756
---------- ---------- ----------
NET INCOME $ 457,873 $ 337,339 $ 371,396
========== ========== ==========
NET INCOME PER SHARE $ .63 $ .47 $ .62
========== ========== ==========
</TABLE>
2
<PAGE> 5
BRUNSWICK BANCORP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
QUARTERS ENDED JUNE 30, 1997, 1996 AND 1995
UNAUDITED
<TABLE>
<CAPTION>
1997 1996 1995
---- ---- ----
<S> <C> <C> <C>
INTEREST INCOME:
Interest and fees on loans $1,482,187 $1,380,851 $1,180,812
Interest on investment securities:
Taxable 296,838 203,924 342,861
Exempt from Federal income tax 1,855 2,806 3,683
Interest on Federal funds sold 222,209 268,296 281,659
---------- ---------- ----------
Total interest income 2,003,089 1,855,877 1,809,015
---------- ---------- ----------
INTEREST EXPENSE:
Interest on deposits 484,747 484,541 474,656
Interest on borrowed funds 3,586 2,393 5,479
---------- ---------- ----------
Total interest expense 488,333 486,934 480,135
---------- ---------- ----------
Net interest income 1,514,756 1,368,943 1,328,880
Provision for credit losses 190,000 135,000 125,000
---------- ---------- ----------
Net interest income after
provision for credit losses 1,324,756 1,233,943 1,203,880
---------- ---------- ----------
NON-INTEREST INCOME:
Service fees 236,609 181,679 274,644
Other non-interest income -- 10,616 1,500
---------- ---------- ----------
Total non-interest income 236,609 192,295 276,144
---------- ---------- ----------
NON-INTEREST EXPENSES:
Salaries and wages 424,062 449,055 394,601
Employee benefits 117,867 113,192 77,410
Occupancy 168,344 176,601 142,561
Furniture and equipment 53,817 43,050 45,155
Other non-interest expenses 319,565 310,883 475,983
---------- ---------- ----------
Total non-interest expenses 1,083,655 1,092,781 1,135,710
---------- ---------- ----------
Income before income taxes 477,710 333,457 344,314
Income tax expense 200,939 137,749 195,783
---------- ---------- ----------
NET INCOME $ 276,771 $ 195,708 $ 148,531
========== ========== ==========
NET INCOME PER SHARE $ .38 $ .27 $ .21
========== ========== ==========
</TABLE>
3
<PAGE> 6
BRUNSWICK BANCORP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
SIX MONTHS ENDED JUNE 30, 1997, 1996 AND 1995
UNAUDITED
<TABLE>
<CAPTION>
COMMON RETAINED
STOCK SURPLUS EARNINGS TOTAL
----- ------- -------- -----
<S> <C> <C> <C> <C>
Balance
Dec. 31, 1994 $1,203,540 $2,722,854 $12,812,629 $16,739,023
Net income -- -- 371,396 371,396
---------- ---------- ----------- -----------
Balance
June 30, 1995 $1,203,540 $2,722,854 $13,184,025 $17,110,419
========== ========== =========== ===========
Balance
Dec. 31, 1995 $1,443,840 $4,284,804 $12,161,436 $17,890,080
Net income -- -- 337,339 337,339
---------- ---------- ----------- -----------
Balance
June 30, 1996 $1,443,840 $4,284,804 $12,498,775 $18,227,419
========== ========== =========== ===========
Balance
Dec. 31, 1996 $1,443,840 $4,284,804 $12,924,286 $18,652,930
Net income -- -- 457,873 457,873
---------- ---------- ----------- -----------
Balance
June 30, 1997 $1,443,840 $4,284,804 $13,382,159 $19,110,803
========== ========== =========== ===========
</TABLE>
4
<PAGE> 7
BRUNSWICK BANCORP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
SIX MONTHS ENDED JUNE 30, 1997, 1996 AND 1995
UNAUDITED
<TABLE>
<CAPTION>
1997 1996 1995
----- ----- ----
<S> <C> <C> <C>
OPERATING ACTIVITIES:
Net income $ 457,873 $ 337,339 $ 371,396
Adjustments to reconcile net
income to cash provided by
operating activities:
Provision for credit losses 360,000 210,000 300,000
Depreciation and amortization 71,388 53,775 47,809
Net accretion of securities
discounts (24,583) (37,106) (351,586)
(Increase) decrease in interest
receivable and other assets (419,984) 20,340 83,897
Increase (decrease) in interest
payable and other liabilities 63,071 (35,340) 191,892
------------ ----------- ------------
NET CASH PROVIDED BY
OPERATING ACTIVITIES 507,765 549,008 643,408
------------ ----------- ------------
INVESTING ACTIVITIES:
Net (increase) decrease in
Federal funds sold (5,100,000) (900,000) 14,600,000
Proceeds from maturities of
investment securities 12,000,000 7,000,000 --
Return of capital on invest-
ment securities 83,847 142,638 93,031
Purchase of investment securities (11,012,300) (6,965,000) --
Net (increase) decrease in loans (1,564,447) (6,002,429) 1,954,716
Capital acquisitions (139,138) (256,400) --
------------ ----------- ------------
NET CASH PROVIDED BY (USED
IN) INVESTING ACTIVITIES (5,732,038) (6,981,191) 16,647,747
------------ ----------- ------------
FINANCING ACTIVITIES:
Increase (decrease) in:
Demand deposits (18,751) 478,821 (393,483)
NOW accounts 1,123,531 3,670,309 (7,057,518)
Savings deposits (750,680) (408,924) (249,754)
Time deposits 2,394,706 854,319 (9,461,235)
Borrowed funds 203,485 165,739 (12,893)
------------ ----------- ------------
NET CASH PROVIDED BY (USED
IN) FINANCING ACTIVITIES 2,952,291 4,760,264 (17,174,883)
------------ ----------- ------------
Increase (decrease) in cash and cash
equivalents (2,271,982) (1,671,919) 116,272
Cash and Cash equivalents at
January 1 9,190,838 6,348,014 4,072,796
------------ ----------- ------------
Cash and Cash equivalents at
June 30 $ 6,918,856 $ 4,676,095 $ 4,189,068
============ =========== ============
</TABLE>
5
<PAGE> 8
BRUNSWICK BANCORP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 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>
JUNE 30, 1997
BOOK VALUE MARKET VALUE
---------- ------------
<S> <C> <C>
U.S. Treasury $ 10,000 $ 10,000
U.S. Government Agencies 11,356,128 11,617,218
States and political subdivisions 80,279 80,279
Other securities 1,395,961 1,426,330
----------- -----------
$12,842,368 $13,133,827
=========== ===========
</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>
6
<PAGE> 9
BRUNSWICK BANCORP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 1997
UNAUDITED
NOTE 3
NET LOANS
The composition of net loans is as follows:
<TABLE>
<CAPTION>
JUNE 30 DECEMBER 31
1997 1996
----------- -----------
<S> <C> <C>
Commercial loans $26,368,755 $27,511,401
Real estate loans 27,896,241 25,190,905
Consumer loans 1,278,104 1,111,539
----------- -----------
55,543,100 53,813,845
Less:
Allowance for credit losses 1,183,606 842,103
Unearned income 157,897 117,873
----------- -----------
$54,201,597 $52,853,869
=========== ===========
</TABLE>
NOTE 4
PREMISES AND EQUIPMENT
The major components of premises and equipment are as follows:
<TABLE>
<CAPTION>
JUNE 30 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 934,240 862,852
---------- ----------
$ 992,183 $ 924,433
========== ==========
</TABLE>
7
<PAGE> 10
BRUNSWICK BANCORP AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS
JUNE 30, 1997
One of the most significant changes in the Corporation's Balance Sheet since
December 31, 1996 are the increases in deposits of approximately $2,750,000.
Most of the increase occurred in Public Funds NOW accounts and time deposits.
On the asset side of the balance sheet, interest bearing assets increased by
approximately $5,400,000 while cash and cash equivalents decreased by
$2,272,000.
Also noteworthy is an increase of approximately $342,000 in the allowance for
credit losses which resulted mainly from $360,000 in credit loss provisions. At
June 30, 1997 the allowance for credit losses represented 2.1% of total loans
and 35.5% of past due and nonaccrual loans.
The results of operations for the first half of 1997, compared to the same
period of 1996, show an increase in income before taxes of approximately
$226,000. The components of this increase are increases in net interest income
and non-interest income of $285,000 and $41,000, a decrease in non-interest
expenses of $50,000 and offsetting $150,000 increase in the provision for credit
losses. The decrease in net interest income is analyzed in detail on page 9.
Service fee income increased by $76,000. Service fees on deposit accounts
increased by $28,000 while, because of an increase in charge card related fees,
other service fees increased by $48,000.
The $35,000 of other non-interest income reported for the first half of 1996
represents rental income on properties acquired through foreclosure net of
applicable expenses. During the first half of 1997 expenses exceeded rental
income, and the resulting net expenses are included in other non-interest
expenses for that period.
Salaries and wages decreased by $68,000 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
June 30, 1997 our total risk-based capital ratio was 28.1% 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.
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 June 30, 1997
Versus
Six Months Ended June 30, 1996
Interest income on:
Loans $ 276 $ 41 $ 317
Investment securities 51 30 81
Federal funds sold (113) 1 (112)
----- ----- -----
Total interest income 214 72 286
----- ----- -----
Interest expense on:
Deposits 34 (33) 1
Borrowed funds 1 (1) --
----- ----- -----
Total interest expense 35 (34) 1
----- ----- -----
Net interest income $ 179 $ 106 $ 285
===== ===== =====
Quarter Ended June 30, 1997
Versus
Quarter Ended June 30, 1996
Interest income on:
Loans $ 65 $ 36 $ 101
Investment securities 59 33 92
Federal funds sold (54) 8 (46)
----- ----- -----
Total interest income 70 77 147
----- ----- -----
Interest expense on:
Deposits 20 (20) --
Borrowed funds -- 1 1
----- ----- -----
Total interest expense 20 (19) 1
----- ----- -----
Net interest income $ 50 $ 96 $ 146
===== ===== =====
</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 three month period ended
June 30, 1997.
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
7/21/97 Carmen J. Gumina
------- ------------------------
Date Carmen J. Gumina
President
7/21/97 Thomas Fornale
------- ------------------------
Date Thomas Fornale
Treasurer
11
<TABLE> <S> <C>
<ARTICLE> 9
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<CASH> 6,918,856
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 25,200,000
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 0
<INVESTMENTS-CARRYING> 12,842,368
<INVESTMENTS-MARKET> 13,133,827
<LOANS> 55,385,203
<ALLOWANCE> 1,183,606
<TOTAL-ASSETS> 104,810,191
<DEPOSITS> 84,546,935
<SHORT-TERM> 505,426
<LIABILITIES-OTHER> 647,027
<LONG-TERM> 0
0
0
<COMMON> 1,443,840
<OTHER-SE> 17,666,963
<TOTAL-LIABILITIES-AND-EQUITY> 104,810,191
<INTEREST-LOAN> 2,827,851
<INTEREST-INVEST> 523,353
<INTEREST-OTHER> 451,353
<INTEREST-TOTAL> 3,802,557
<INTEREST-DEPOSIT> 967,928
<INTEREST-EXPENSE> 974,946
<INTEREST-INCOME-NET> 2,827,611
<LOAN-LOSSES> 360,000
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 2,077,880
<INCOME-PRETAX> 815,292
<INCOME-PRE-EXTRAORDINARY> 457,873
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 457,873
<EPS-PRIMARY> .63
<EPS-DILUTED> .63
<YIELD-ACTUAL> 0
<LOANS-NON> 784,833
<LOANS-PAST> 215,267
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 842,103
<CHARGE-OFFS> 40,254
<RECOVERIES> 21,757
<ALLOWANCE-CLOSE> 1,183,606
<ALLOWANCE-DOMESTIC> 1,183,606
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
