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Previous: FIRST INVESTORS LIFE LEVEL PREMIUM VARIABLE LIF INS SEP AC B, 497, 1999-05-05 |
Next: MARKET STREET FUND INC, 497, 1999-05-05 |
<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
<TABLE>
<S> <C>
Quarter ended March 31, 1999 Commission file number 0-14403
</TABLE>
BRUNSWICK BANCORP
(Exact Name of Registrant as Specified in its Charter)
<TABLE>
<S> <C>
NEW JERSEY 22-2610694
(State or Other Jurisdiction of (IRS Employer
Incorporation or Organization) Identification Number)
NEW BRUNSWICK, NEW JERSEY 08901
(Address of Principal Executive Office) (Zip Code)
</TABLE>
732-247-5800
(Registrant's Telephone Number Including Area Code)
NOT APPLICABLE
(Former Name,, Former Address and Former Fiscal Year
if Changed Since Last Report)
<TABLE>
<S> <C>
COMMON STOCK, PAR VALUE $ 2.00 902,266 SHARES
- ------------------------------ --------------
(Class of Stock) Outstanding at March 31,1999
</TABLE>
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.
<TABLE>
<S> <C>
YES x NO
------ ------
</TABLE>
<PAGE> 2
BRUNSWICK BANCORP AND SUBSIDIARIES
INDEX
<TABLE>
<CAPTION>
PAGE
----
PART I- FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited):
<S> <C>
Consolidated Balance Sheets
March 31, 1999 and December 31, 1998 .................................................1
Consolidated Statements of Income
Three Months Ended March 31, 1999, 1998 and 1997......................................2
Consolidate Statements of Stockholders' Equity
Three Months Ended March 31, 1999, 1998 and 1997......................................3
Consolidated Statements of Cash Flows
Three Months Ended March 31, 1999, 1998 and 1997......................................4
Notes to Consolidated Financial Statements............................................5-6
Item 2. Management's Discussion and Analysis of Financial
Conditions and Results of Operations..................................................7-8
Year 2000 Disclosure..................................................................9-10
PART II- OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.......................................................11
Signatures............................................................................12
</TABLE>
<PAGE> 3
BRUNSWICK BANCORP AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
UNAUDITED
<TABLE>
<CAPTION>
MARCH 31 DECEMBER 31
1999 1998
---- ----
<S> <C> <C>
ASSETS:
Cash and due from banks 9,059,209 6,448,304
Federal funds sold 35,100,000 34,000,000
Securities held to maturity 23,064,888 23,065,507
Loans receivable, net 42,019,938 43,166,736
Premises and equipment 1,467,866 1,503,332
Foreclosed real estate 72,535 132,615
Other assets 1,169,427 824,794
------------ ------------
TOTAL ASSETS $111,953,863 $109,141,288
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY:
Liabilities:
Deposits:
Demand deposits 27,384,289 24,587,736
NOW accounts 33,781,471 30,604,280
Savings deposits 12,878,597 15,216,904
Time deposits 15,463,250 16,545,989
------------ ------------
Total deposits 89,507,607 86,954,909
Borrowed funds 137,475 511,512
Accrued expenses and other liabilities 681,229 333,317
------------ ------------
Total liabilities 90,326,311 87,799,738
------------ ------------
Stockholders' equity:
Common stock, par value $2.00:
Authorized 3,000,000 shares:
issued 902,266 shares, March 31, 1999
and 721,920 shares, December 31, 1998 1,804,532 1,443,840
Additional paid-in capital 3,924,112 4,284,804
Retained earnings 15,990,682 15,704,680
Treasury stock at cost (91,774) (91,774)
------------ ------------
Total Stockholders' equity 21,627,552 21,341,550
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $111,953,863 $109,141,288
============ ============
</TABLE>
1
<PAGE> 4
BRUNSWICK BANCORP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
THREE MONTHS ENDED MARCH 31, 1999, 1998 AND 1997
UNAUDITED
<TABLE>
<CAPTION>
INTEREST INCOME 1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
Interest and fees on loans $1,034,537 $1,392,051 $1,345,664
Interest on investment securities:
Taxable 373,520 193,467 222,560
Exempt from Federal income tax -- 1,091 2,100
Interest on Federal funds sold 404,275 364,458 229,144
---------- ---------- ----------
Total interest income 1,812,332 1,951,067 1,799,468
---------- ---------- ----------
INTEREST EXPENSE:
Interest on deposits 483,429 471,391 483,181
Interest on borrowed funds 1,839 3,802 3,432
---------- ---------- ----------
Total interest expense 485,268 475,193 486,613
---------- ---------- ----------
Net interest income 1,327,064 1,475,874 1,312,855
Provision for credit losses 25,000 75,000 170,000
---------- ---------- ----------
Net interest income after provision
for credit losses 1,302,064 1,400,874 1,142,855
NON-INTEREST INCOME:
Service fees 221,624 200,949 188,952
Other non-interest income 9,575 4,080 --
---------- ---------- ----------
Total non-interest income 231,199 205,029 188,952
---------- ---------- ----------
NON-INTEREST EXPENSES:
Salaries and wages 428,723 414,355 399,579
Employee benefits 116,209 125,561 109,540
Occupancy 148,492 146,544 154,437
Furniture and equipment 58,996 40,445 40,489
Other non-interest expenses 292,085 314,654 290,180
---------- ---------- ----------
Total non-interest expenses 1,044,505 1,041,559 994,225
---------- ---------- ----------
Income before income taxes 488,758 564,344 337,582
Income tax expense 198,200 211,900 156,480
---------- ---------- ----------
NET INCOME $ 290,558 $ 352,444 $ 181,102
========== ========== ==========
NET INCOME PER SHARE $ 0.32 $ 0.39 $ 0.20
========== ========== ==========
</TABLE>
2
<PAGE> 5
BRUNSWICK BANCORP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
THREE MONTHS ENDED MARCH 31, 1999, 1998 AND 1997
UNAUDITED
<TABLE>
<CAPTION>
COMMON RETAINED TREASURY
STOCK SURPLUS EARNINGS STOCK TOTAL
----- ------- -------- ----- -----
<S> <C> <C> <C> <C> <C>
Balance, December 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
============ ============ ============ ============ ============
Balance, December 31, 1997 $ 1,443,840 $ 4,284,804 $ 14,168,828 $ (71,897) $ 19,825,575
Net income -- -- 352,444 -- 352,444
Purchase of treasury stock -- -- -- (1,817) (1,817)
------------ ------------ ------------ ------------ ------------
Balance, March 31, 1998 $ 1,443,840 $ 4,284,804 $ 14,521,272 $ (73,714) $ 20,176,202
============ ============ ============ ============ ============
Balance, December 31, 1998 $ 1,443,840 $ 4,284,804 $ 15,704,680 $ (91,774) $ 21,341,550
Net income -- -- 290,558 -- 290,558
Stock split 360,692 (360,692) --
Dividends -- -- (4,556) -- (4,556)
------------ ------------ ------------ ------------ ------------
Balance, March 31, 1999 $ 1,804,532 $ 3,924,112 $ 15,990,682 $ (91,774) $ 21,627,552
============ ============ ============ ============ ============
</TABLE>
3
<PAGE> 6
BRUNSWICK BANCORP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED MARCH 31, 1999, 1998 AND 1997
UNAUDITED
<TABLE>
<CAPTION>
OPERATING ACTIVITIES: 1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
Net income $ 290,558 $ 352,444 $ 181,102
Adjustments to reconcile net income to
cash provided by operating activities:
Provision for credit losses 25,000 75,000 170,000
Depreciation and amortization 35,466 34,921 31,090
Net accretion of securities discounts
and premiums (63,214) (81,758) (14,528)
(Increase) decrease in other assets (344,633) (21,140) (270,299)
Increase (decrease) in accrued expenses
and other liabilities 347,912 292,232 218,407
----------- ----------- -----------
NET CASH PROVIDED BY OPERATING ACTIVITIES 291,089 651,699 315,772
----------- ----------- -----------
INVESTING ACTIVITIES:
(Increase) decrease in Federal funds sold (1,100,000) (2,500,000) 10,000,000
Maturities of investment securities -- 6,009,840 7,000,000
Principal repayments on investment securities 63,833 64,303 40,266
Purchase of investment securities -- (2,925,470) 11,012,300)
Net (increase) decrease in loans receivable 1,181,878 2,246,446 (501,092)
Acquisitions of premises and equipment -- (347,050) (139,138)
----------- ----------- -----------
NET CASH PROVIDED BY INVESTING
ACTIVITIES 145,711 2,548,069 5,387,736
----------- ----------- -----------
FINANCING ACTIVITIES:
Net increase (decrease) in demand deposits 2,796,553 2,742,541 (1,829,938)
Net increase (decrease) in NOW accounts 3,177,191 5,055,550 (6,710,230)
Net increase ( decrease) in savings deposits (2,338,307) (406,277) (393,785)
Net increase ( decrease) in time deposits (1,082,739) (6,096,692) (159,806)
Net increase (decrease) in borrowed funds (374,037) (196,749) 183,544
Purchase of treasury stock -- (1,817) --
Dividends paid (4,556) -- --
----------- ----------- -----------
NET CASH USED BY FINANCING ACTIVITIES 2,174,105 1,096,556 (8,910,215)
----------- ----------- -----------
Increase (decrease) in cash and cash equivalents 2,610,905 4,296,324 (3,206,707)
Cash and cash equivalents at January 1 6,448,304 4,933,343 9,190,838
----------- ----------- -----------
Cash and cash equivalents at March 31 $ 9,059,209 $ 9,229,667 $ 5,984,131
============ =========== ===========
</TABLE>
4
<PAGE> 7
BRUNSWICK BANCORP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31,1999
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 principals for complete
financial ststements. 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 31,1999
BOOK MARKET
VALUE VALUE
----- -----
<S> <C> <C>
U.S. Government and agencies $21,014,888 $21,299,767
Other securities 2,050,000 2,057,720
=========== ===========
$23,064,888 $23,357,487
=========== ===========
</TABLE>
<TABLE>
<CAPTION>
DECEMBER 31, 1998
BOOK MARKET
VALUE VALUE
----- ------
<S> <C> <C>
U.S. Government and agencies $21,015,507 $21,468,949
Other securities 2,050,000 2,062,735
----------- -----------
$23,065,507 $23,531,684
=========== ===========
</TABLE>
5
<PAGE> 8
BRUNSWICK BANCORP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31,1999
UNAUDITED
NOTE 3
NET LOANS
The composition of net loans is as follows:
<TABLE>
<CAPTION>
MARCH 31 DECEMBER 31
1999 1998
---- ----
<S> <C> <C>
Commercial loans $15,306,059 $16,306,888
Real estate loans 26,371,839 26,439,746
Consumer Loans 1,283,730 1,328,750
----------- -----------
42,961,628 44,075,384
Less:
Allowance for credit losses 825,441 801,059
Unearned income 116,249 107,589
----------- -----------
$42,019,938 $43,166,736
=========== ===========
</TABLE>
NOTE 4
PREMISES AND EQUIPMENT
The major components of premises and equipment are as follows:
<TABLE>
<CAPTION>
MARCH 31 DECEMBER 31,
1999 1998
---- ----
<S> <C> <C>
Land $ 850,372 $ 850,372
Buildings 562,049 562,049
Leasehold improvements 70,137 70,137
Equipment 1,089,121 1,089,121
---------- ----------
2,571,679 2,571,679
Less accumulated depreciation and amortization 1,103,813 1,068,347
---------- ----------
$1,467,866 $1,503,332
========== ==========
</TABLE>
6
<PAGE> 9
BRUNSWICK BANCORP AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS
MARCH 31, 1999
There were no significant changes in the Corporation's Balance Sheet since
December 31, 1998.
Loans decreased by approximately $1,100,000 which, for the most part, explains
the $1,100,000 increase in Federal funds sold.
On the liability side of the balance sheet, demand deposits and NOW accounts
increased by $2,800,000 and $3,200,000, respectively which more than offset
decreases in savings and time deposits and resulted in an increase in total
deposits of approximately $2,500,000.
Also noteworthy is an increase of approximately $35,000 in the allowance for
credit losses that resulted mainly from $25,000 in credit loss provisions. At
March 31, 1999 the allowance for credit losses totaled $825,441 which
represented 1.9% of total loans and 34% of loans past due 90 days or more and
nonaccrual loans.
The results of operations for the first quarter of 1999, compared to the same
period of 1998, show a decrease in income before taxes of approximately $75,000.
The two main components of this decrease are a $149,000 decrease in net interest
income and a decrease in the provision for credit losses of $50,000. The
decrease in net interest income is analyzed in detail on page 8.
Fluctuations in non-interest income and expenses were minor with nothing of an
extraordinary nature on which to comment.
The Corporation continues to be "Well Capitalized" which is the highest
classification a bank can receive. At March 31, 1999 our total risk-based
capital ration was 33.1% which is over four times the regulatory requirement.
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, 1999
Versus
Three Months Ended March 31,1998
Interest Income on:
Loans $(237) $(120) $(357)
Investment securities 147 31 178
Federal funds sold 98 (58) 40
----- ----- -----
Total interest income 8 (147) (139)
----- ----- -----
Interest expense on:
Deposits 73 (61) 12
Borrowed funds (1) (1) (2)
----- ----- -----
Total interest expense 72 (62) 10
----- ----- -----
Net interest income $ (64) $ (85) $(149)
===== ===== =====
</TABLE>
8
<PAGE> 11
BRUNSWICK BANCORP AND SUBSIDIARIES
YEAR 2000 DISCLOSURE
MARCH 31, 1999
Year 2000 issues involve potential problems to financial institutions and other
businesses that rely on computers to assist in normal daily operations of their
business. Many computer programs and applications, which use date fields, may
cease to function normally as a result of the way these fields have been
programmed. Date sensitive software may recognize a date using 00 as the Year
1900 rather than Year 2000. This could cause a system failure, loss of files,
miscalculations or hardware failure. In turn, these problems could cause
disruptions of operations and could result in a temporary inability to process
transactions or conduct business activity.
The Corporation has implemented a Year 2000 compliance plan. The objective of
this plan is to ensure the Corporation will be Year 2000 ready prior to December
31, 1999. Management has formed a Year 2000 committee with members from all
significant areas of operations to review its systems, vendors and customers
that could be affected by the Year 2000 issue. The committee has developed an
implementation plan to rectify any issues related to processing of transactions
in the Year 2000 and beyond. As recommended by the Federal Financial
Institutions Examination Council (FFIEC) guide, the Year 2000 compliance plan
includes the following phases: Awareness, Assessment, Renovation, Validation and
Implementation. The plan is designed to identify risks, develop an action plan
and perform adequate testing and complete certification so that the
Corporation's computer systems will be Year 2000 ready.
As of March 31, 1999, the Corporation has substantially completed all phases of
its Year 2000 compliance plan in connection with the Corporation's primary
operating system and software (the "primary system"). An external third party
supplier provides the primary system, and this vendor has represented to the
Corporation that its hardware and software are Year 2000 compliant. This
hardware and software have been installed. The Corporation has completed its own
Validation and Implementation phase on the primary system. In the course of the
testing, the Corporation did not become aware of any Year 2000 problems in the
("primary system"). The Corporation has also completed Validation and
Implementation on its other computer operations and has received Year 2000
compliance assurance from all non-governmental outside vendors.
9
<PAGE> 12
The Corporation recognizes that significant Year 2000 problems affecting third
parties could adversely affect the Corporation. The Corporation has communicated
with its significant borrowers and depositors, and with others whose core
business could be materially affected by Year 2000 failures and who have
substantial dealings with the Corporation. The Corporation has sought and
continues to seek assurances that those businesses are taking appropriate steps
to become Year 2000 compliant. In addition, the Corporation has sought
information from its non-information suppliers (i.e., utility systems and
security systems) regarding their Year 2000 readiness.
Currently, management believes that its cost to make internal data processing
operations Year 2000 compliant will not be material. The costs identified
directly with the Year 2000 compliance plan are not expected to exceed $50,000.
These costs will be funded through operating cash flows and expensed when
incurred. Costs will also be incurred for replacement of various personal
computers, software upgrades and upgraded server software. The Corporation had
planned to upgrade and replace these items, and accordingly did not accelerate
replacement due to Year 2000 compliance. These estimated costs are management's
best estimates based upon currently known information. There can be no guarantee
that actual costs incurred to become Year 2000 ready will not increase due to
additional issues which may arise internally in the future, and by failure of
third parties to become Year 2000 compliant.
The Corporation has completed a remediation contingency plan for Year 2000
compliance for its mission critical applications. The remediation contingency
plan outlines the actions to be taken if the current approach to remediating
mission critical applications does not appear to be able to deliver a Year 2000
compliant system when required. Predetermined target dates have been established
for all mission critical applications. If testing of the mission critical
applications is not completed by the target date then alternative actions would
be taken as outlined in the remediation contingency plan.
In addition, the Corporation has developed a business resumption contingency
plan to facilitate timely restoration of services in the event of business
disruption. The Corporation plans to review and update its remediation
contingency plan and business resumption plan as needed throughout 1999.
10
<PAGE> 13
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,
1999.
11
<PAGE> 14
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
04/22/99 /s/ Carmen J. Gumina
-------- --------------------
Date Carmen J. Gumina
President
04/22/99 /s/ Thomas Fornale
-------- --------------------
Date Thomas Fornale
Treasurer
12
<TABLE> <S> <C>
<ARTICLE> 9
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> MAR-31-1999
<CASH> 9,059,209
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 35,100,000
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 0
<INVESTMENTS-CARRYING> 23,064,888
<INVESTMENTS-MARKET> 23,357,487
<LOANS> 42,845,379
<ALLOWANCE> 825,441
<TOTAL-ASSETS> 111,953,863
<DEPOSITS> 89,507,607
<SHORT-TERM> 137,475
<LIABILITIES-OTHER> 681,229
<LONG-TERM> 0
1,804,532
0
<COMMON> 0
<OTHER-SE> 19,823,020
<TOTAL-LIABILITIES-AND-EQUITY> 111,953,863
<INTEREST-LOAN> 1,034,537
<INTEREST-INVEST> 373,520
<INTEREST-OTHER> 404,275
<INTEREST-TOTAL> 1,812,332
<INTEREST-DEPOSIT> 483,429
<INTEREST-EXPENSE> 485,268
<INTEREST-INCOME-NET> 1,327,064
<LOAN-LOSSES> 25,000
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 1,044,505
<INCOME-PRETAX> 488,758
<INCOME-PRE-EXTRAORDINARY> 290,558
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 290,558
<EPS-PRIMARY> .32
<EPS-DILUTED> .32
<YIELD-ACTUAL> 0
<LOANS-NON> 327,272
<LOANS-PAST> 2,144,728
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 801,059
<CHARGE-OFFS> 3,746
<RECOVERIES> 3,128
<ALLOWANCE-CLOSE> 825,441
<ALLOWANCE-DOMESTIC> 825,441
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
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