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<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 September 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 September 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
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
PART I- FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Consolidated Balance Sheets
September 30, 2000 and December 31, 1999 1
Consolidated Statements of Income
Nine Months Ended September 30, 2000, 1999 and 1998 2
Consolidated Statements of Income
Quarters Ended September 30, 2000, 1999 and 1998 3
Consolidated Statements of Stockholders' Equity
Nine Months Ended September 30, 2000, 1999 and 1998 4
Consolidated Statements of Cash Flows
Nine Months Ended September 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
</TABLE>
<PAGE> 3
BRUNSWICK BANCORP AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
UNAUDITED
<TABLE>
<CAPTION>
SEPTEMBER 30 DECEMBER 31
2000 1999
---- ----
<S> <C> <C>
ASSETS
Cash and due from banks $ 6,287,393 $ 5,905,416
Federal funds sold 13,000,000 34,600,000
------------- -------------
Total cash and cash equivalents 19,287,393 40,505,416
Securities held to maturity 32,890,959 22,663,091
Loans receivable, net 51,368,752 43,102,803
Premises and equipment 2,138,296 1,870,994
Other assets 1,442,468 730,574
------------- -------------
TOTAL ASSETS $ 107,127,868 $ 108,872,878
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits:
Non-interest bearing $ 27,656,047 $ 25,353,409
Interest bearing 54,845,564 59,945,120
------------- -------------
Total deposits 82,501,611 85,298,529
Borrowed funds 328,098 631,258
Accrued expenses and other liabilities 593,647 285,395
------------- -------------
Total liabilities 83,423,356 86,215,182
------------- -------------
Stockholders' equity:
Common stock, no par value
Authorized 3,000,000 shares:
issued 1,864,532 shares, September 30, 2000 3,729,064 1,804,532
and 902,266 shares, December 31, 1999;
Additional paid-in capital 1,999,580 3,924,112
Retained earnings 18,067,642 17,020,826
Treasury stock at cost, 9,300 (91,774) (91,774)
------------- -------------
Total Stockholders' equity 23,704,512 22,657,696
------------- -------------
TOTAL LIABILITIES AND $ 107,127,868 $ 108,872,878
STOCKHOLDERS' EQUITY ============= =============
</TABLE>
1
<PAGE> 4
BRUNSWICK BANCORP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
NINE MONTHS ENDED SEPTEMBER 30, 2000, 1999 AND 1998
UNAUDITED
<TABLE>
<CAPTION>
INTEREST INCOME 2000 1999 1998
---- ---- ----
<S> <C> <C> <C>
Interest and fees on loans $3,712,871 $3,159,541 $4,085,065
Interest on securities held to maturity 1,133,076 1,067,689 536,665
Interest on Federal funds sold 1,317,319 1,280,281 1,358,738
---------- ---------- ----------
Total interest income 6,163,266 5,507,511 5,980,468
---------- ---------- ----------
INTEREST EXPENSE:
Interest on deposits 1,466,604 1,388,890 1,489,110
Interest on borrowed funds 13,477 6,995 9,593
---------- ---------- ----------
Total interest expense 1,480,081 1,395,885 1,498,703
---------- ---------- ----------
Net interest income 4,683,185 4,111,626 4,481,765
Provision for credit losses 225,000 150,000 225,000
---------- ---------- ----------
Net interest income after provision
for credit losses 4,458,185 3,961,626 4,256,765
---------- ---------- ----------
NON-INTEREST INCOME:
Service fees 788,050 717,337 611,140
Other non-interest income 69,281 17,735 15,474
---------- ---------- ----------
Total non-interest income 857,331 735,072 626,614
---------- ---------- ----------
NON-INTEREST EXPENSES:
Salaries and wages 1,386,729 1,365,289 1,272,494
Employee benefits 421,198 363,171 359,011
Occupancy 475,837 461,494 433,336
Furniture and equipment 160,329 162,039 169,086
Other non-interest expenses 913,747 944,521 886,023
---------- ---------- ----------
Total non-interest expenses 3,357,840 3,296,514 3,119,950
---------- ---------- ----------
Income before income taxes 1,957,676 1,400,184 1,763,429
Income tax expense 910,860 604,904 746,084
---------- ---------- ----------
NET INCOME $1,046,816 $ 795,280 $1,017,345
========== ========== ==========
NET INCOME PER SHARE $ 0.56 $ 0.43 $ 0.55
========== ========== ==========
</TABLE>
2
<PAGE> 5
BRUNSWICK BANCORP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
QUARTERS ENDED SEPTEMBER 30, 2000, 1999 AND 1998
UNAUDITED
<TABLE>
<CAPTION>
INTEREST INCOME 2000 1999 1998
---- ---- ----
<S> <C> <C> <C>
Interest and fees on loans $1,321,997 $1,039,760 $1,362,553
Interest on securities held to maturity 490,088 340,612 164,231
Interest on Federal funds sold 338,460 460,087 531,499
---------- ---------- ----------
Total interest income 2,150,545 1,840,459 2,058,283
---------- ---------- ----------
INTEREST EXPENSE:
Interest on deposits 489,083 456,741 509,310
Interest on borrowed funds 4,312 2,891 3,059
---------- ---------- ----------
Total interest expense 493,395 459,632 512,369
---------- ---------- ----------
Net interest income 1,657,150 1,380,827 1,545,914
Provision for credit losses 75,000 75,000 75,000
---------- ---------- ----------
Net interest income after provision
for credit losses 1,582,150 1,305,827 1,470,914
---------- ---------- ----------
NON-INTEREST INCOME:
Service fees 245,201 227,136 196,318
Other non-interest income 4,081 4,080 4,080
---------- ---------- ----------
Total non-interest income 249,282 231,216 200,398
---------- ---------- ----------
NON-INTEREST EXPENSES:
Salaries and wages 448,463 476,744 441,146
Employee benefits 138,081 121,445 109,667
Occupancy 161,424 146,859 145,323
Furniture and equipment 56,355 55,098 58,699
Other non-interest expenses 248,133 295,596 280,394
---------- ---------- ----------
Total non-interest expenses 1,052,456 1,095,742 1,035,229
---------- ---------- ----------
Income before income taxes 778,976 441,301 636,083
Income tax expense 440,892 214,569 288,500
---------- ---------- ----------
NET INCOME $ 338,084 $ 226,732 $ 347,583
========== ========== ==========
NET INCOME PER SHARE $ 0.18 $ 0.12 $ 0.19
========== ========== ==========
</TABLE>
3
<PAGE> 6
BRUNSWICK BANCORP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
NINE MONTHS ENDED SEPTEMBER 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 -- -- 1,017,345 -- $ 1,017,345
Purchase of treasury stock -- -- -- (21,257) $ (21,257)
------------ ------------ ------------ ------------ ------------
Balance, September 30, 1998 $ 1,443,840 $ 4,284,804 $ 15,186,173 $ (93,154) $ 20,821,663
============ ============ ============ ============ ============
Balance, December 31, 1998 $ 1,443,840 $ 4,284,804 $ 15,704,680 $ (91,774) $ 21,341,550
Net income -- -- 795,280 -- 795,280
Stock Split 360,692 (360,692) (4,556) -- (4,556)
------------ ------------ ------------ ------------ ------------
Balance, September 30, 1999 $ 1,804,532 $ 3,924,112 $ 16,495,404 $ (91,774) $ 22,132,274
============ ============ ============ ============ ============
Balance, December 31, 1999 $ 1,804,532 $ 3,924,112 $ 17,020,826 $ (91,774) $ 22,657,696
Net income -- -- 1,046,816 -- $ 1,046,816
Stock split 1,804,532 (1,804,532) -- -- --
Restricted stock awards 120,000 (120,000) -- -- $ --
------------ ------------ ------------ ------------ ------------
Balance, September 30, 2000 $ 3,729,064 $ 1,999,580 $ 18,067,642 $ (91,774) $ 23,704,512
============ ============ ============ ============ ============
</TABLE>
4
<PAGE> 7
BRUNSWICK BANCORP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
NINE MONTHS ENDED SEPTEMBER 30, 2000, 1999 AND 1998
UNAUDITED
<TABLE>
<CAPTION>
OPERATING ACTIVITIES: 2000 1999 1998
---- ---- ----
<S> <C> <C> <C>
Net income $ 1,046,816 $ 795,280 $ 1,017,345
Adjustments to reconcile net income to
cash provided by operating activities:
Provision for credit losses 225,000 150,000 225,000
Depreciation and amortization 124,433 107,762 102,278
Net accretion of securities discounts (43,174) (137,154) (195,090)
and premiums
(Increase) decrease in other assets (711,894) (265,005) (91,214)
Increase (decrease) in accrued expenses 308,252 393,416 173,386
and other liabilities
------------ ------------ ------------
NET CASH PROVIDED BY OPERATING ACTIVITIES 949,433 1,044,299 1,231,705
------------ ------------ ------------
INVESTING ACTIVITIES:
Maturities of investment securities 4,100,000 500,000 13,009,840
Principal repayments on investment securities 39,806 138,980 252,153
Purchase of investment securities (14,324,500) -- (7,079,870)
Net (increase) decrease in loans receivable (8,490,949) 2,672,105 2,867,735
Proceeds from sale of foreclosed real estate -- 132,615 --
Acquisitions of premises and equipment (391,735) (229,825) (343,984)
------------ ------------ ------------
NET CASH PROVIDED BY INVESTING (19,067,378) 3,213,875 8,705,874
ACTIVITIES ------------- ------------ ------------
FINANCING ACTIVITIES:
Cash paid in lieu of fractional shares -- (4,556) --
Net increase (decrease) in non-interest 2,302,638 1,283,325 (356,946)
bearing deposits
Net increase (decrease) in interest (5,099,556) (4,212,170) 3,800,004
bearing deposits
Net increase (decrease) in borrowed funds (303,160) 136,242 (88,522)
Purchase of treasury stock -- -- (21,257)
------------ ------------ ------------
NET CASH USED BY FINANCING ACTIVITIES (3,100,078) (2,797,159) 3,333,279
------------ ------------ ------------
Increase (decrease) in cash and cash equivalents (21,218,023) 1,461,015 13,270,858
Cash and cash equivalents at January 1 40,505,416 40,448,304 31,533,343
------------ ------------ ------------
Cash and cash equivalents at September 30 $ 19,287,393 $ 41,909,319 $ 44,804,201
============ ============ ============
</TABLE>
5
<PAGE> 8
BRUNSWICK BANCORP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 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>
September 30, 2000
------------------
BOOK MARKET
VALUE VALUE
----- -----
<S> <C> <C>
U.S. Government and agencies $30,940,959 $31,155,977
Other securities 1,950,000 1,950,000
----------- -----------
$32,890,959 $33,105,977
=========== ===========
</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
September 30, 2000
UNAUDITED
NOTE 3
NET LOANS
The composition of net loans is as follows:
<TABLE>
<CAPTION>
SEPTEMBER 30 DECEMBER 31
2000 1999
---- ----
<S> <C> <C>
Commercial loans $17,175,850 $10,634,153
Real estate loans 34,187,172 32,117,006
Consumer loans 1,152,048 1,258,879
----------- -----------
52,515,070 44,010,038
Less:
Allowance for credit losses 1,024,554 800,000
Unearned income 121,764 107,235
----------- -----------
$51,368,752 $43,102,803
=========== ===========
</TABLE>
NOTE 4
PREMISES AND EQUIPMENT
The major components of premises and equipment are as follows:
<TABLE>
<CAPTION>
SEPTEMBER 30 DECEMBER 31,
2000 1999
---- ----
<S> <C> <C>
Land $ 828,372 $ 828,372
Buildings 1,273,998 983,001
Leasehold improvements 70,137 70,137
Equipment 1,217,820 1,127,121
---------- ----------
3,390,327 3,008,631
Less:
Accumulated depreciation and
amortization 1,252,031 1,137,637
---------- ----------
$2,138,296 $1,870,994
========== ==========
</TABLE>
7
<PAGE> 10
BRUNSWICK BANCORP AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS
SEPTEMBER 30, 2000
The most significant changes in the Corporation's Balance Sheet since December
31, 1999 are increases in loans and investment securities of $8,300,000 and
$10,200,000 respectively offset by a decrease in cash and cash equivalents of
$21,200,000.
Total assets decreased by approximately $1,700,000 mostly because of a decrease
in deposits of approximately $2,800,000.
Also noteworthy is an increase of $225,000 in the allowance for credit losses,
which resulted from $225,000 in credit loss provisions. At September 30, 2000
the allowance for credit losses totaled $1,025,000, which represented 1.9% of
total loans and 29% of past due and non-accrual loans.
The results of operation for the first three quarters of 2000, compared to the
same period of 1999, show an increase in income before taxes of approximately
$557,000. The main component of this increase is a $571,000 increase in net
interest income, which is analyzed in detail on page 9.
In addition, service fees and other non-interest income increased by $71,000 and
$55,000, respectively. The increase in service fees was mainly the result of a
$57,000 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 $61,000, which was
mainly due to a $79,000 increase in salaries, wages and employee benefits.
The Corporation continues to be "Well Capitalized" which is the highest
classification a bank can receive. At September 30, 2000 our total risk-based
capital ration was 28.9%, 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
------ ----- -----
<S> <C> <C> <C>
Nine Months Ended September 30, 2000
Versus
Nine Months Ended September 30, 1999
Interest Income on:
Loans $ 380 $ 173 $ 553
Investment securities 99 (34) 65
Federal funds sold (165) 202 37
----- ----- -----
Total interest income 314 341 655
----- ----- -----
Interest expense on:
Deposits (5) 83 78
Borrowed funds 2 4 6
----- ----- -----
Total interest expense (3) 87 84
----- ----- -----
Net interest income $ 317 $ 254 $ 571
===== ===== =====
Quarter Ended September 30, 2000
Versus
Quarter Ended September 30, 1999
Interest Income on:
Loans $ 233 $ 49 $ 282
Investment securities 132 17 149
Federal funds sold (207) 85 (122)
----- ----- -----
Total interest income 158 151 309
----- ----- -----
Interest expense on:
Deposits 14 18 32
Borrowed funds -- 1 1
----- ----- -----
Total interest expense 14 19 33
----- ----- -----
Net interest income $ 144 $ 132 $ 276
===== ===== =====
</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, 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
November 1, 2000 /s/ Roman T. Gumina
---------------- --------------------------
Date Roman T. Gumina
President
November 1, 2000 /s/ Thomas A. Fornale
---------------- --------------------------
Date Thomas A. Fornale
Treasurer
11
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