<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON DC 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
-----------------------------------------
Quarter ended June 30, 2000 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 (IRS Employer
Incorporation or Organization) Identification Number)
NEW BRUNSWICK, NEW JERSEY 08901
(Address of Principal Executive Office) (Zip Code)
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)
COMMON STOCK, NO PAR VALUE 1,864,532 SHARES
-------------------------- ----------------
(Class of Stock) (Outstanding at June 30, 2000)
---------------------------------------------
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
INDEX
PAGE
PART I- FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Consolidated Balance Sheets
June 30, 2000 and December 31, 1999 1
Consolidated Statements of Income
Six Months Ended June 30, 2000, 1999 and 1998 2
Consolidated Statements of Income
Quarters Ended June 30, 2000, 1999 and 1998 3
Consolidated Statements of Stockholders' Equity
Six Months Ended June 30, 2000, 1999 and 1998 4
Consolidated Statements of Cash Flows
Six Months Ended June 30, 2000, 1999 and 1998 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>
JUNE 30 DECEMBER 31
2000 1999
------------- -------------
ASSETS
<S> <C> <C>
Cash and due from banks $ 8,179,154 $ 5,905,416
Federal funds sold 22,300,000 34,600,000
------------- -------------
Total cash and cash equivalents 30,479,154 40,505,416
Securities held to maturity 24,986,431 22,663,091
Loans receivable, net 47,874,821 43,102,803
Premises and equipment 2,082,522 1,870,994
Other assets 1,338,895 730,574
------------- -------------
TOTAL ASSETS $ 106,761,823 $ 108,872,878
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits:
Non-interest bearing $ 27,450,254 $ 25,353,409
Interest bearing 54,804,696 59,945,120
------------- -------------
Total deposits 82,254,950 85,298,529
Borrowed funds 621,922 631,258
Accrued expenses and other liabilities 518,523 285,395
------------- -------------
Total liabilities 83,395,395 86,215,182
------------- -------------
Stockholders' equity:
Common stock, no par value
Authorized 3,000,000 shares:
issued 1,864,532 shares, June 30, 2000
and 902,266 shares, December 31, 1999; 3,729,064 1,804,532
Additional paid-in capital 1,999,580 3,924,112
Retained earnings 17,729,558 17,020,826
Treasury stock at cost, 9,300 (91,774) (91,774)
------------- -------------
Total Stockholders' equity 23,366,428 22,657,696
------------- -------------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 106,761,823 $ 108,872,878
============= =============
</TABLE>
1
<PAGE> 4
BRUNSWICK BANCORP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
SIX MONTHS ENDED JUNE 30, 2000, 1999 AND 1998
UNAUDITED
<TABLE>
<CAPTION>
INTEREST INCOME 2000 1999 1998
---- ---- ----
<S> <C> <C> <C>
Interest and fees on loans $2,390,874 $2,119,781 $2,722,512
Interest on securities held to maturity 642,988 727,077 372,434
Interest on Federal funds sold 978,859 820,194 827,239
---------- ---------- ----------
Total interest income 4,012,721 3,667,052 3,922,185
---------- ---------- ----------
INTEREST EXPENSE:
Interest on deposits 977,521 932,149 979,800
Interest on borrowed funds 9,165 4,104 6,534
---------- ---------- ----------
Total interest expense 986,686 936,253 986,334
---------- ---------- ----------
Net interest income 3,026,035 2,730,799 2,935,851
Provision for credit losses 150,000 75,000 150,000
---------- ---------- ----------
Net interest income after provision
for credit losses 2,876,035 2,655,799 2,785,851
---------- ---------- ----------
NON-INTEREST INCOME:
Service fees 542,849 490,201 414,822
Other non-interest income 65,200 13,655 11,394
---------- ---------- ----------
Total non-interest income 608,049 503,856 426,216
---------- ---------- ----------
NON-INTEREST EXPENSES:
Salaries and wages 938,266 888,545 831,348
Employee benefits 283,117 241,726 249,344
Occupancy 314,413 314,635 288,013
Furniture and equipment 103,974 106,941 110,387
Other non-interest expenses 665,614 648,925 605,629
---------- ---------- ----------
Total non-interest expenses 2,305,384 2,200,772 2,084,721
---------- ---------- ----------
Income before income taxes 1,178,700 958,883 1,127,346
Income tax expense 469,968 390,335 457,584
---------- ---------- ----------
NET INCOME $ 708,732 $ 568,548 $ 669,762
========== ========== ==========
NET INCOME PER SHARE $ 0.38 $ 0.30 $ 0.36
========== ========== ==========
</TABLE>
2
<PAGE> 5
BRUNSWICK BANCORP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
QUARTERS ENDED JUNE 30, 2000, 1999 AND 1998
UNAUDITED
<TABLE>
<CAPTION>
INTEREST INCOME 2000 1999 1998
---- ---- ----
<S> <C> <C> <C>
Interest and fees on loans $1,266,445 $1,085,244 $1,330,461
Interest on securities held to maturity 322,234 353,557 177,876
Interest on Federal funds sold 503,240 415,919 462,781
---------- ---------- ----------
Total interest income 2,091,919 1,854,720 1,971,118
---------- ---------- ----------
INTEREST EXPENSE:
Interest on deposits 495,181 448,720 508,409
Interest on borrowed funds 5,018 2,265 2,732
---------- ---------- ----------
Total interest expense 500,199 450,985 511,141
---------- ---------- ----------
Net interest income 1,591,720 1,403,735 1,459,977
Provision for credit losses 115,000 50,000 75,000
---------- ---------- ----------
Net interest income after provision
for credit losses 1,476,720 1,353,735 1,384,977
---------- ---------- ----------
NON-INTEREST INCOME:
Service fees 312,177 268,577 213,873
Other non-interest income 61,120 4,080 7,314
---------- ---------- ----------
Total non-interest income 373,297 272,657 221,187
---------- ---------- ----------
NON-INTEREST EXPENSES:
Salaries and wages 470,301 459,822 416,993
Employee benefits 135,018 125,517 123,783
Occupancy 157,985 166,143 141,469
Furniture and equipment 55,675 47,945 69,942
Other non-interest expenses 359,098 356,840 290,975
---------- ---------- ----------
Total non-interest expenses 1,178,077 1,156,267 1,043,162
---------- ---------- ----------
Income before income taxes 671,940 470,125 563,002
Income tax expense 267,118 192,135 245,684
---------- ---------- ----------
NET INCOME $ 404,822 $ 277,990 $ 317,318
========== ========== ==========
NET INCOME PER SHARE $ 0.21 $ 0.15 $ 0.17
========== ========== ==========
</TABLE>
3
<PAGE> 6
BRUNSWICK BANCORP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
SIX MONTHS ENDED JUNE 30, 2000, 1999 AND 1998
UNAUDITED
<TABLE>
<CAPTION>
COMMON RETAINED TREASURY
STOCK SURPLUS EARNINGS STOCK TOTAL
<S> <C> <C> <C> <C> <C>
Balance, December 31,1997 $ 1,443,840 $ 4,284,804 $ 14,168,828 $ (71,897) $ 19,825,575
Net income -- -- 669,762 -- $ 669,762
Purchase of treasury stock -- -- -- (15,497) $ (15,497)
------------ ------------ ------------ ------------ ------------
Balance, June 30, 1998 $ 1,443,840 $ 4,284,804 $ 14,838,590 $ (87,394) $ 20,479,840
============ ============ ============ ============ ============
Balance, December 31, 1998 $ 1,443,840 $ 4,284,804 $ 15,704,680 $ (91,774) $ 21,341,550
Net income -- -- 568,548 -- 568,548
Stock Split 360,692 (360,692) (4,556) -- (4,556)
------------ ------------ ------------ ------------ ------------
Balance, June 30, 1999 $ 1,804,532 $ 3,924,112 $ 16,268,672 $ (91,774) $ 21,905,542
============ ============ ============ ============ ============
Balance, December 31, 1999 $ 1,804,532 $ 3,924,112 $ 17,020,826 $ (91,774) $ 22,657,696
Net income -- -- 708,732 -- $ 708,732
Stock split 1,804,532 (1,804,532) -- -- --
Restricted stock awards 120,000 (120,000) -- -- $ --
------------ ------------ ------------ ------------ ------------
Balance, June 30, 2000 $ 3,729,064 $ 1,999,580 $ 17,729,558 $ (91,774) $ 23,366,428
============ ============ ============ ============ ============
</TABLE>
4
<PAGE> 7
BRUNSWICK BANCORP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
SIX MONTHS ENDED JUNE 30, 2000, 1999 AND 1998
UNAUDITED
<TABLE>
<CAPTION>
OPERATING ACTIVITIES: 2000 1999 1998
---- ---- ----
<S> <C> <C> <C>
Net income $ 708,732 $ 568,548 $ 669,762
Adjustments to reconcile net income to
cash provided by operating activities:
Provision for credit losses 150,000 75,000 150,000
Depreciation and amortization 77,676 70,911 68,894
Net accretion of securities discounts
and premiums (32,196) (104,566) (172,497)
(Increase) decrease in other assets (608,321) (108,547) (1,986)
Increase (decrease) in accrued expenses
and other liabilities 233,128 213,425 75,373
------------ ------------ ------------
NET CASH PROVIDED BY OPERATING ACTIVITIES 529,019 714,771 789,546
------------ ------------ ------------
INVESTING ACTIVITIES:
Maturities of investment securities 4,000,000 -- 10,009,840
Principal repayments on investment securities 33,356 105,792 151,420
Purchase of investment securities (6,324,500) -- (7,079,870)
Net (increase) decrease in loans receivable (4,922,018) 2,023,934 2,597,531
Acquisitions of premises and equipment (289,204) (64,212) (343,894)
------------ ------------ ------------
NET CASH PROVIDED BY INVESTING
ACTIVITIES (7,502,366) 2,065,514 5,335,027
------------ ------------ ------------
FINANCING ACTIVITIES:
Cash paid in lieu of fractional shares -- (4,556) --
Net increase (decrease) in non-interest
bearing deposits 2,096,845 2,471,744 4,636,039
Net increase (decrease) in interest
bearing deposits (5,140,424) (5,276,519) (1,695,053)
Net increase (decrease) in savings deposits -- -- --
Net increase (decrease) in borrowed funds (9,336) (88,012) 15,102
Purchase of treasury stock -- (15,497)
------------ ------------ ------------
NET CASH USED BY FINANCING ACTIVITIES (3,052,915) (2,897,343) 2,940,591
------------ ------------ ------------
Increase (decrease) in cash and cash equivalents (10,026,262) (117,058) 9,065,164
Cash and cash equivalents at January 1 40,505,416 40,448,304 31,533,343
------------ ------------ ------------
Cash and cash equivalents at June 30 $ 30,479,154 $ 40,331,246 $ 40,598,507
============ ============ ============
</TABLE>
5
<PAGE> 8
BRUNSWICK BANCORP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2000
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 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, 2000
------------------------------------------
BOOK MARKET
VALUE VALUE
----------------- ------------------
<S> <C> <C>
U.S. Government and agencies $22,936,431 $22,983,065
Other securities 2,050,000 2,050,000
----------------- ------------------
$24,986,431 $25,033,065
================= ==================
</TABLE>
<TABLE>
<CAPTION>
DECEMBER 31, 1999
------------------------------------------
BOOK MARKET
VALUE VALUE
----------------- ------------------
<S> <C> <C>
U.S. Government and agencies $21,013,091 $21,000,531
Other securities 1,650,000 1,650,000
----------------- ------------------
$22,663,091 $22,650,531
================= ==================
</TABLE>
6
<PAGE> 9
BRUNSWICK BANCORP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2000
UNAUDITED
NOTE 3
NET LOANS
The composition of net loans is as follows:
<TABLE>
<CAPTION>
JUNE 30 DECEMBER 31
2000 1999
----------- -----------
<S> <C> <C>
Commercial loans $15,116,881 $10,634,153
Real estate loans 32,687,977 32,117,006
Consumer Loans 1,156,762 1,258,879
----------- -----------
48,961,620 44,010,038
Less:
Allowance for credit losses 950,000 800,000
Unearned income 136,799 107,235
----------- -----------
$47,874,821 $43,102,803
=========== ===========
</TABLE>
NOTE 4
PREMISES AND EQUIPMENT
The major components of premises and equipment are as follows:
<TABLE>
<CAPTION>
JUNE 30 DECEMBER 31,
2000 1999
---------- ----------
<S> <C> <C>
Land $ 828,372 $ 828,372
Buildings 1,242,271 983,001
Leasehold improvements 70,137 70,137
Equipment 1,147,015 1,127,121
---------- ----------
3,287,795 3,008,631
Less:
Accumulated depreciation and
amortization 1,205,273 1,137,637
---------- ----------
$2,082,522 $1,870,994
========== ==========
</TABLE>
7
<PAGE> 10
BRUNSWICK BANCORP AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS
JUNE 30, 2000
The most significant changes in the Corporation's Balance Sheet since December
31, 1999 are increases in loans and investment securities of $4,800,000 and
$2,300,000 respectively offset by a decrease in cash and cash equivalents of
$10,000,000.
Total assets decreased by approximately $2,100,000 mostly because of a decrease
in deposits of approximately $3,000,000.
Also noteworthy is an increase of $150,000 in the allowance for credit losses,
which resulted from $150,000 in credit loss provisions. At June 30, 2000 the
allowance for credit losses totaled $950,000, which represented 1.9% of total
loans and 33% of past due and non-accrual loans.
The results of operation for the first half of 2000, compared to the same period
of 1999, show an increase in income before taxes of approximately $220,000. The
main component of this increase is a $295,000 increase in net interest income.
This increase is analyzed in detail on page 9.
In addition, service fees and other non-interest income increased by $53,000 and
$52,000, respectively. The increase in service fees was the result of a $61,000
increase in charge card merchant income and the increase in other non-interest
income resulted from a $57,000 gain on the sale of real estate acquired through
foreclosure.
On the negative side, non-interest expenses increased by $105,000, which was
mainly due to a $91,000 increase in salaries, wages and employee benefits.
The Corporation continues to be "Well Capitalized" which is the highest
classification a bank can receive. At June 30, 2000 our total risk-based capital
ration was 31.7%, which is almost 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.
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
Six Months Ended June 30, 2000
Versus
Six Months Ended June 30,1999
Interest Income on:
<S> <C> <C> <C>
Loans $ 119 $ 152 $ 271
Investment securities (6) (78) (84)
Federal funds sold (52) 211 159
-------- -------- --------
Total interest income 61 285 346
-------- -------- --------
Interest expense on:
Deposits (26) 72 46
Borrowed funds 3 2 5
-------- -------- --------
Total interest expense (23) 74 51
-------- -------- --------
Net interest income $ 84 $ 211 $ 295
======== ======== ========
Quarter Ended June 30, 2000
Versus
Quarter Ended June 30,1999
Interest Income on:
Loans $ 106 $ 76 $ 182
Investment securities -- (32) (32)
Federal funds sold (41) 128 87
-------- -------- --------
Total interest income 65 172 237
-------- -------- --------
Interest expense on:
Deposits 1 45 46
Borrowed funds 2 1 3
-------- -------- --------
Total interest expense 3 46 49
-------- -------- --------
Net interest income $ 62 $ 126 $ 188
======== ======== ========
</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 six-month period ended June 30,
2000.
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
/s/ Roman T. Gumina
----------- --------------------------
Date Roman T. Gumina
President
/s/ Thomas A. Fornale
----------- --------------------------
Date Thomas A. Fornale
Treasurer
11
