<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------------
FORM 10-Q
(Mark One)
/ X / QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1996
-----------------------------------------
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
---------------------- ----------------------
Commission File Number 0-18014
-------------
PAMRAPO BANCORP, INC.
- - --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 22-2984813
- - --------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
611 Avenue C, Bayonne, New Jersey 07002
- - --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 201-339-4600
Indicate by check X 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 period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
--- ---
The number of shares outstanding of each of the issuer's classes of common
stock, as of the latest practicable date April 30, 1996.
--------------
$.01 par value common stock - 3,317,464 shares outstanding
<PAGE> 2
PAMRAPO BANCORP, INC.
AND SUBSIDIARIES
INDEX
Page
Number
------
PART I - FINANCIAL INFORMATION
Consolidated Financial Statements of Condition
at March 31, 1996 and December 31, 1995 (Unaudited) 1
Consolidated Statements of Income for the
Three Months Ended March 31, 1996 and 1995 (Unaudited) 2
Consolidated Statement of
Cash Flows for the Three Months Ended
March 31, 1996 and 1995 (Unaudited) 3 - 4
Notes to Consolidated Financial Statements 5
Management's Discussion and Analysis of
Financial Condition and Results of Operations 6 - 11
PART II - OTHER INFORMATION 12 - 13
SIGNATURES 14
<PAGE> 3
<TABLE>
<CAPTION>
PAMRAPO BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
----------------------------------------------
(Unaudited)
March 31, December 31,
Assets 1996 1995
------ ------------ ------------
<S> <C> <C>
Cash and amounts due from depository institutions $ 8,625,293 $ 9,293,609
Interest-bearing deposits in other banks 7,700,000 4,500,000
Federal funds sold 100,000 100,000
------------ ------------
Total cash and cash equivalents 16,425,293 13,893,609
Securities available for sale 29,557,272 28,427,064
Investment securities held to maturity, estimated
fair value of $99,000 (1996) and (1995) 99,000 99,000
Mortgage-backed securities held to maturity, net; estimated
fair value of $92,297,000 (1996) and $97,329,000 (1995) 93,272,230 96,564,583
Loans receivable, net 213,802,427 218,140,313
Foreclosed real estate, net 2,085,879 1,467,396
Investment in real estate, net 304,027 307,375
Premises and equipment, net 3,687,771 3,716,785
Federal Home Loan Bank of New York stock, at cost 3,072,600 3,072,600
Interest receivable, net 2,974,552 2,954,256
Excess of cost over assets acquired 515,525 545,850
Other assets 2,597,231 2,175,799
------------ ------------
Total assets $368,393,807 $371,364,630
============ ============
Liabilities and stockholders' equity
------------------------------------
Liabilities
-----------
Deposits $302,075,232 $298,900,764
Advances from Federal Home Loan Bank of New York 3,583,100 7,583,100
Other borrowed money 405,901 459,855
Advance payments by borrowers for taxes and insurance 1,783,344 1,632,215
Other liabilities 3,462,197 3,413,267
------------ ------------
Total liabilities 311,309,774 311,989,201
------------ ------------
Stockholders' equity
--------------------
Preferred stock;
authorized 3,000,000 shares; issued and outstanding - none - -
Common stock; par value $.01; authorized
7,000,000 shares; 3,450,000 shares issued;
3,317,464 shares (1996) and 3,393,034 shares (1995) outstanding 34,500 34,500
Paid-in capital in excess of par value 18,906,768 18,906,768
Retained earnings - substantially restricted 41,380,531 41,284,431
Unrealized (loss) on securities available for sale, net (90,676) (41,154)
Debt of employee stock ownership plan (99,188) (148,781)
Treasury stock, at cost; 132,536 shares (1996) and 56,966 shares (1995) (3,047,902) (660,335)
------------ ------------
Total stockholders' equity 57,084,033 59,375,429
------------ ------------
Total liabilities and stockholders' equity $368,393,807 $371,364,630
============ ============
See notes to consolidated financial statements.
</TABLE>
- 1 -
<PAGE> 4
<TABLE>
<CAPTION>
PAMRAPO BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
--------------------------------------
(Unaudited)
Three Months Ended
March 31,
------------------------
1996 1995
----------- ----------
<S> <C> <C>
Interest income:
Loans $ 4,941,218 $ 5,123,341
Mortgage-backed securities 1,958,064 2,005,782
Investments and other interest-earning assets 276,163 292,615
----------- -----------
Total interest income 7,175,445 7,421,738
----------- -----------
Interest expense:
Deposits 2,793,189 2,511,175
Advances and other borrowed money 109,545 268,888
----------- -----------
Total interest expense 2,902,734 2,780,063
----------- -----------
Net interest income 4,272,711 4,641,675
Provision for loan losses 150,000 100,000
----------- -----------
Net interest income
after provision for loan losses 4,122,711 4,541,675
----------- -----------
Non-interest income:
Fees and service charges 107,978 114,156
Miscellaneous 50,979 72,430
----------- -----------
Total non-interest income 158,957 186,586
----------- -----------
Non-interest expenses:
Salaries and employee benefits 1,323,105 1,244,832
Net occupancy expense of premises 198,103 164,787
Equipment 195,719 182,285
Advertising 42,947 39,937
Loss on foreclosed real estate 64,625 48,267
Federal insurance premium 175,073 181,814
Amortization of intangibles 30,325 30,325
Miscellaneous 835,314 479,389
----------- -----------
Total non-interest expenses 2,865,211 2,371,636
----------- -----------
Income before income taxes 1,416,457 2,356,625
Income taxes 212,377 814,318
----------- -----------
Net income $ 1,204,080 $ 1,542,307
=========== ===========
Net income per common share
and common stock equivalents $ .35 $ .46
=========== ===========
Dividends per common share $ .225 $ .175
=========== ===========
Weighted average number of common shares
and common stock equivalents outstanding 3,441,860 3,350,791
=========== ===========
See notes to consolidated financial statements.
</TABLE>
- 2 -
<PAGE> 5
<TABLE>
<CAPTION>
PAMRAPO BANCORP, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
------------------------------------
(Unaudited)
Three Months Ended
March 31,
---------------------------
1996 1995
------------ ------------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 1,204,080 $ 1,542,307
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation of premises and equipment and investment in real estate 80,072 81,952
Amortization of deferred fees, premiums and discounts, net (38,871) (12,331)
Loss on sale of foreclosed real estate 1,610 4,135
Provision for loan losses 150,000 100,000
Provision for losses on foreclosed real estate 30,000 30,000
Decrease (increase) in interest receivable, net (20,296) 84,532
(Increase) in other assets (392,332) (19,023)
Increase in other liabilities 48,930 884,409
Amortization of intangibles 30,325 30,325
Amortization of cost of stock contributed to
Management Recognition and Retention Plan and Trust - 4,149
Reduction in debt of Employee Stock Ownership Plan 49,593 49,593
------------ ------------
Net cash provided by operating activities 1,143,111 2,780,048
------------ ------------
Cash flows from investing activities:
Proceeds from maturities of securities available for sale - 5,000,000
Purchases of securities available for sale (2,000,000) -
Principal repayments on securities available for sale 777,427 176,638
Principal repayments on mortgage-backed securities held to maturity 3,271,459 3,187,557
Purchase of loans - (62,000)
Sale of student loans 220,716 172,072
Net change in loans receivable 3,210,980 (477,966)
Proceeds from sale of foreclosed real estate 179,605 89,365
Additions to premises and equipment (47,710) (102,048)
(Purchase) of Federal Home Loan Bank of New York stock - (48,000)
------------ ------------
Net cash provided by investing activities 5,612,477 7,935,618
------------ ------------
Cash flows from financing activities:
Net (decrease) increase in deposits 3,174,468 (5,410,087)
Repayment of borrowings (53,954) (51,215)
Net (decrease) in advances from Federal Home Loan Bank of New York (4,000,000) (5,000,000)
Increase in advance payments by borrowers for taxes and insurance 151,129 158,790
Purchase of treasury stock (3,047,500) -
Proceeds from sale of treasury stock 327,973 721,382
Cash dividends paid (776,020) (593,781)
------------ ------------
Net cash (used in) financing activities (4,223,904) (10,174,911)
------------ ------------
Net increase in cash and cash equivalents 2,531,684 540,755
Cash and cash equivalents - beginning 13,893,609 12,134,632
------------ ------------
Cash and cash equivalents - ending $ 16,425,293 $ 12,675,387
============ ============
See notes to consolidated financial statements.
</TABLE>
- 3 -
<PAGE> 6
<TABLE>
<CAPTION>
PAMRAPO BANCORP, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
------------------------------------
(Unaudited)
Three Months Ended
March 31,
---------------------------
1996 1995
------------ ------------
<S> <C> <C>
Supplemental information:
Increase in unrealized (loss) on securities available for sale, net $ (49,522) $ (173,869)
============ ============
Transfer of loans receivable to foreclosed real estate $ 993,698 $ 120,892
============ ============
Loans to facilitate sale of foreclosed real estate $ 164,000 $ 100,000
============ ============
Debt incurred in connection with purchase of office building $ - $ 325,000
============ ============
Cash paid during the period for:
Income taxes $ - $ 285,161
============ ============
Interest on deposits and borrowings $ 2,902,734 $ 2,795,287
============ ============
See notes to consolidated financial statements.
</TABLE>
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<PAGE> 7
PAMRAPO BANCORP, INC.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
1. PRINCIPLES OF CONSOLIDATION
- - -------------------------------
The consolidated financial statements include the accounts of
Pamrapo Bancorp, Inc. (the "Corporation"), and its wholly owned
subsidiaries, Pamrapo Savings Bank, SLA (the "Bank") and Pamrapo
Service Corp, Inc. The Corporation's business is conducted
principally through the Bank. All significant intercompany accounts
and transactions have been eliminated in consolidation.
2. BASIS OF PRESENTATION
- - ------------------------
The accompanying unaudited consolidated financial statements were prepared in
accordance with instructions for Form 10-Q and regulation S-X and do not include
information or footnotes necessary for a complete presentation of financial
condition, results of operations, and cash flows in conformity with generally
accepted accounting principles. However, in the opinion of management, all
adjustments (consisting of normal recurring adjustments) necessary for a fair
presentation of the consolidated financial statements have been included. The
results of operations for the three months ended March 31, 1996, are not
necessarily indicative of the results which may be expected for the entire
fiscal year.
3. NET INCOME PER COMMON SHARE
- - -------------------------------
Net income per common share is based on the weighted average number of common
shares actually outstanding plus the shares that would be outstanding assuming
the exercise of dilutive stock options, all of which are considered to be common
stock equivalents. The number of common shares that would be issued from the
exercise of stock options has been reduced by the number of common shares that
could have been purchased from the proceeds at the average market price of the
Corporation's common stock.
- 5 -
<PAGE> 8
PAMRAPO BANCORP, INC.
AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
---------------------------------------------
CHANGES IN FINANCIAL CONDITION
- - ------------------------------
The Corporation's assets at March 31, 1996 totalled $368.4 million, which
represents a decrease of $3.0 million or .81% as compared with $371.4 million at
December 31, 1995. Securities available for sale at March 31, 1996 increased
$1.2 million or 4.23% to $29.6 million when compared with $28.4 million at
December 31, 1995. The increase during the three months ended March 31, 1996
resulted primarily from purchases of securities available for sale of $2.0
million which offset repayments on securities available for sale of $777,000.
Investment securities remained unchanged at $99,000 at March 31, 1996 and
December 31, 1995. Mortgage-backed securities decreased $3.3 million or 3.42% to
$93.3 million at March 31, 1996 when compared to $96.6 million at December 31,
1995, as a result of principal repayments during the three months ended March
31, 1996. Net loans amounted to $213.8 million at March 31, 1996 as compared to
$218.1 million at December 31, 1995, which represents a decrease of $4.3 million
or 1.97%. The decrease, during the three months ended March 31, 1996, resulted
primarily from the transfer of $1.0 million in loans to foreclosed real estate
and loan principal repayments exceeding loan originations by $3.2 million.
Foreclosed real estate increased from $1.5 million at December 31, 1995 to $2.1
million at March 31, 1996. At March 31, 1996, foreclosed real estate consisted
of nineteen properties, five of which, with a combined book value of $622,000,
are under contract for sale. Total deposits at March 31, 1996 increased $3.2
million or 1.07% to $302.1 million when compared with $298.9 million at December
31, 1995. Advances from the Federal Home Loan Bank of New York ("FHLB") amounted
to $3.6 million and $7.6 million at March 31, 1996 and December 31, 1995,
respectively. The decrease, during the three months ended March 31, 1996,
resulted from a decrease in short-term advances from the FHLB of $4.0 million.
Stockholders' equity totalled $57.1 million and $59.4 million at March 31, 1996
and December 31, 1995, respectively. During the three months ended March 31,
1996, the Corporation repurchased 132,500 shares of its common stock at $23.00
per share, totalling $3.0 million, under the stock repurchase program and issued
56,930 shares of its common stock out of treasury stock for $328,000 as a result
of the excercise of stock options by the directors, officers and employees of
the Corporation and the Bank.
COMPARISON OF OPERATING RESULTS FOR THE
- - ---------------------------------------
THREE MONTHS ENDED MARCH 31, 1996 AND 1995
- - -------------------------------------------
Net income decreased $338,000, or 21.92% to $1.204 million for the three months
ended March 31, 1996 compared with $1.542 million for the same 1995 period. The
decrease in net income during the 1996 period resulted from decreases in total
interest income and non-interest income, along with increases in total interest
expense, non-interest expenses and provision for loan losses, which were
partially offset by a decrease in income taxes.
- 6 -
<PAGE> 9
PAMRAPO BANCORP, INC.
AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
---------------------------------------------
COMPARISON OF OPERATING RESULTS FOR THE
- - ---------------------------------------
THREE MONTHS ENDED MARCH 31, 1996 AND 1995 (Cont'd.)
- - -------------------------------------------
Interest income on loans decreased $182,000 or 3.55% to $4.9 million during the
three months ended March 31, 1996 when compared with $5.1 million during the
same 1995 period. The decrease during the 1996 period resulted from a decrease
in the yield earned on the loan portfolio along with a decrease in the average
balance of loans outstanding. Interest on mortgage-backed securities decreased
$48,000 or 2.38%, to $1.96 million during the three months ended March 31, 1996
when compared with $2.01 million for the same 1995 period. The decrease during
the 1996 period resulted primarily from a decrease in the average balance of
mortgage-backed securities outstanding. Interest earned on investments and other
interest-earning assets decreased by $17,000 or 5.80% to $276,000 during the
three months ended March 31, 1996, when compared to $293,000 during the same
1995 period primarily due to a decrease in the average balance of such assets
outstanding.
Interest expense on deposits increased $282,000 or 11.23% to $2.8 million during
the three months ended March 31, 1996 when compared to $2.5 million during the
same 1995 period. Such increase was primarily attributable to an increase in the
cost of such deposits. Interest expense on advances and other borrowed money
decreased by $159,000 or 59.11% to $110,000 during the three months ended March
31, 1996 when compared with $269,000 during the same 1995 period, primarily due
to a decrease in the average balance of advances outstanding from the FHLB. At
March 31, 1996 and 1995, and December 31, 1995 and 1994, total advances and
other borrowed money totalled $4.0 million, $13.2 million, $8.0 million and
$17.9 million, respectively.
Net interest income decreased $369,000 or 7.95% during the three months ended
March 31, 1996 when compared with the same 1995 period. Such decrease was due to
a decrease in total interest income of $246,000 along with an increase in total
interest expense of $123,000.
During the three months ended March 31, 1996 and 1995, the Bank provided
$150,000 and $100,000, respectively, as a provision for loan losses. The
allowance for loan losses is based on management's evaluation of the risk
inherent in its loan portfolio and gives due consideration to the changes in
general market conditions and in the nature and volume of the Bank's loan
activity. The Bank intends to continue to provide for loan losses based on its
periodic review of the loan portfolio and general market conditions. At March
31, 1996 and December 31, 1995, the Bank's non-performing loans, which were
delinquent ninety days or more, totalled $9.1 million or 2.47% of total assets
and $10.9 million or 2.94% of total assets, respectively. At March 31, 1996,
$2.8 million of non-performing loans were accruing interest and $6.3 million
were on non-accrual status. During the three months ended March 31, 1996 and
1995, the Bank transferred $1.0 million and $121,000, respectively, of loans to
foreclosed real estate. The non-performing loans primarily consist of
one-to-four family mortgage loans. During the three months ended March 31, 1996
and 1995, the Bank charged off loans aggregating $174,000 and $115,000,
respectively. The allowance for loan losses amounted to $2.731 million at March
31, 1996, representing 1.25% of total loans and 29.90% of loans delinquent
ninety days or more, and $2.725 million at December 31, 1995, representing 1.22%
of total loans and 25.09% of loans delinquent ninety days or more.
- 7 -
<PAGE> 10
PAMRAPO BANCORP, INC.
AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
---------------------------------------------
COMPARISON OF OPERATING RESULTS FOR THE
- - ---------------------------------------
THREE MONTHS ENDED MARCH 31, 1996 AND 1995 (Cont'd.)
- - -------------------------------------------
Non-interest income decreased $28,000 or 14.97% to $159,000 during the three
months ended March 31, 1996 from $187,000 during the same 1995 period. The
decrease resulted from decreases in fees and service charges and miscellaneous
income of $6,000 and $22,000, respectively.
Non-interest expenses increased $493,000 or 20.78% million during the three
months ended March 31, 1996 when compared with the same 1995 period. Salaries
and employee benefits, net occupancy expense, equipment, advertising, loss on
foreclosed real estate and miscellaneous expenses increased $78,000, $33,000,
$14,000, $3,000, $16,000 and $356,000, respectively, which was sufficient to
offset a decrease in federal insurance premium of $7,000 during the 1996 period
when compared to the same 1995 period. The increase in miscellaneous expenses
resulted primarily from an increase in correspondent bank service charges and
non-recurring expenses of approximately $250,000 related to the 1996 Annual
Meeting of Stockholders.
Income taxes totalled $212,000 and $814,000 during the three months ended March
31, 1996 and 1995, respectively. The decrease during the 1996 period resulted
from a decrease in pre-tax income of $940,000 and a reduction in income tax
expense of approximately $293,000 resulting from the excercise of non-statutory
stock options.
LIQUIDITY AND CAPITAL RESOURCES
- - -------------------------------
The Bank is required to maintain minimum levels of liquid assets as defined by
Office of Thrift Supervision (the "OTS") regulations. This requirement, which
may vary from time to time, depending upon economic conditions and deposit
flows, is based upon a percentage of deposits and short-term borrowings. The
required ratio currently is 5%. The Bank's liquidity averaged 11.05% during the
month of March 1996. The Bank adjusts its liquidity levels in order to meet
funding needs for deposit outflows, payment of real estate taxes from escrow
accounts on mortgage loans, repayment of borrowings, when applicable, and loan
funding commitments. The Bank also adjusts its liquidity level as appropriate to
meet its asset/liability objectives.
The Bank's primary sources of funds are deposits, amortization and prepayment of
loans and mortgage-backed securities principal, FHLB-NY advances, maturities of
investment securities and funds provided from operations. While scheduled loan
and mortgage-backed securities amortization and maturing investment securities
are a relatively predictable source of funds, deposit flow and loan and
mortgage-backed securities prepayments are greatly influenced by market interest
rates, economic conditions and competition. The Bank invests its excess funds in
federal funds and overnight deposits with the FHLB, which provides liquidity to
meet lending requirements. Federal funds sold and interest-bearing deposits at
March 31, 1996 amounted to $100,000 and $7.7 million, respectively.
- 8 -
<PAGE> 11
PAMRAPO BANCORP, INC.
AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
---------------------------------------------
LIQUIDITY AND CAPITAL RESOURCES (Cont'd.)
- - -------------------------------
The Bank's liquidity, represented by cash and cash equivalents, is a product of
its operating, investing and financing activities. These activities are
summarized below:
<TABLE>
<CAPTION>
Three Months Ended
March 31,
-------------------
1996 1995
-------- --------
(In Thousands)
<S> <C> <C>
Cash and cash equivalents - beginning $ 13,894 $ 12,135
-------- --------
Operating activities:
Net income 1,204 1,542
Adjustments to reconcile
net income to net cash
provided by operating activities (61) 1,238
-------- --------
Net cash provided by operating activities 1,143 2,780
Net cash provided by investing activities 5,612 7,935
Net cash (used in) financing activities (4,224) (10,175)
-------- --------
Net increase in cash and cash equivalents 2,531 540
-------- --------
Cash and cash equivalents - ending $ 16,425 $ 12,675
======== ========
</TABLE>
Cash was generated by operating activities during the three months ended March
31, 1996. The primary source of cash was net income. Funds used in financing
activities resulted primarily from a $4.0 million reduction in short-term FHLB
advances and the utilization of $3.0 million to repurchase 132,500 shares of its
common stock at a price of $23.00 per share, which more than offset a net
increase in deposits of $3.2 million. Additionally, during the three months
ended March 31, 1996, the Corporation issued 56,930 shares of its common stock
out of treasury stock for $328,000 as a result of the excercise of stock options
by the directors, officers and employees of the Corporation and the Bank. Cash
dividends paid during the three months ended March 31, 1996 and 1995 amounted to
$776,000 and $594,000, respectively.
The primary sources of investing activity of the Bank are lending and the
purchase of mortgage-backed securities. Net loans amounted to $213.8 million and
$218.1 million at March 31, 1996 and December 31, 1995, respectively. Securities
available for sale totalled $29.6 million and $28.4 million at March 31, 1996
and December 31, 1995, respectively. Mortgage-backed securities held to maturity
totalled $93.3 million and $96.6 million at March 31, 1996 and December 31,
1995, respectively. In addition to funding new loan production and the purchase
of mortgage-backed securities through operations and financing activities, such
activities were funded by principal repayments on existing loans and
mortgage-backed securities.
- 9 -
<PAGE> 12
PAMRAPO BANCORP, INC.
AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
---------------------------------------------
LIQUIDITY AND CAPITAL RESOURCES (Cont'd.)
- - -------------------------------
Liquidity management is both a daily and long-term function of business
management. Excess liquidity is generally invested in short-term investments,
such as federal funds sold and interest-bearing deposits. If the Bank requires
funds beyond its ability to generate them internally, borrowing agreements exist
with the FHLB-NY which provide an additional source of funds. At March 31, 1996,
advances from the FHLB amounted to $3.6 million.
The Bank anticipates that it will have sufficient funds available to meet its
current loan commitments. At March 31, 1996, the Bank has outstanding
commitments to originate mortgage loans of $12.0 million. Certificates of
deposit scheduled to mature in one year or less at March 31, 1996, totalled
$112.9 million. Management believes that, based upon its experience and the
Bank's deposit flow history, a significant portion of such deposits will remain
with the Bank.
Under OTS regulations, three separate measurements of capital adequacy (the
"Capital Rule") are required. The Capital Rule requires each savings institution
to maintain tangible capital equal to at least 1.5% and core capital equal to
3.0% of its adjusted total assets. The core capital requirement has been
effectively increased to 4.0% since under OTS regulations an institution with
less than 4.0% core capital is deemed to be "undercapitalized". The Capital Rule
further requires each savings institution to maintain total capital equal to at
least 8.0% of its risk- weighted assets.
The following table sets forth the Bank's capital position at March 31, 1996, as
compared to the minimum regulatory capital requirements:
<TABLE>
<CAPTION>
Percent of
Adjusted
Amount Assets
-------- ----------
(Dollars in Millions)
<S> <C> <C>
Tangible Capital:
Requirement $ 5,546 1.50%
Actual 46,380 12.54
-------- -------
Excess $ 40,834 11.04%
======== =======
Core Capital:
Requirement $ 14,790 4.00
Actual 46,380 12.54
-------- -------
Excess $ 31,590 8.54%
======== =======
Risk-based Capital:
Requirement $ 14,623 8.00%
Actual 48,526 26.55
-------- -------
Excess $ 33,903 18.55%
======== =======
</TABLE>
- 10 -
<PAGE> 13
PAMRAPO BANCORP, INC.
AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
---------------------------------------------
LIQUIDITY AND CAPITAL RESOURCES (Cont'd.)
- - -------------------------------
The OTS issued final regulations which set forth the methodology for calculating
an interest rate risk component that will be incorporated in the OTS regulatory
capital rules. Under the new regulations, only savings associations with "above
normal" interest rate risk exposure would be required to maintain additional
capital. The dollar amount of capital would be an addition to a savings
association's existing risk-based capital requirement. The OTS recently deferred
implementation of this regulation. It is estimated under the new regulation, the
Bank's risk-based capital requirement would increase by approximately $2.1
million at March 31, 1996, which would not affect the Bank's compliance with OTS
capital regulations. The Bank is considered a "Well-Capitalized" institution
under the OTS' prompt corrective action regulations.
SUPERVISORY EXAMINATION
- - -----------------------
The Bank's financial statements are periodically examined by the OTS, Federal
Deposit Insurance Corporation and New Jersey Department of Banking, as part of
their regulatory oversight of the thrift industry. As a result of these
examinations, the regulators can direct that the Bank make adjustments to its
financial statements based on their findings.
RECAPITALIZATION OF SAIF
- - ------------------------
Legislative initiatives regarding the recapitalization of the Savings
Association Insurance Fund ("SAIF") of the Federal Deposit Insurance Corporation
("FDIC"), deposit insurance premiums, FICO bond interest payments, the merger of
SAIF and Bank Insurance Fund ("BIF"), financial industry regulatory structure,
bad debt recapture and revision of thrift and bank charters are still pending
before Congress. Management cannot predict the ultimate impact any final
legislation or regulatory actions may have on the operations of the Corporation.
Without passage of legislation addressing the FDIC insurance premium disparity,
the Bank, like other thrifts, will continue to pay deposit insurance premiums
significantly higher than banks. As long as such premium differential continues,
it may have adverse consequences on the Corporation's earnings and the
Corporation may be placed at a substantial competitive disadvantage to
commercial banking organizations insured by the BIF.
- 11 -
<PAGE> 14
PAMRAPO BANCORP, INC.
PART II
ITEM 1. Legal Proceedings
-----------------
On February 15, 1994, Bank Pulska Kasa Opieki S.A. filed a complaint in the
United States District Court, District of New Jersey against the Bank and
Chemical Banking Corporation, Civil No. 94-663. See Form 10-K for the fiscal
year ended December 31, 1995 for further discussion.
Neither the Corporation nor the Bank are involved in any pending legal
proceedings other than routine legal proceedings occurring in the ordinary
course of business, which involve amounts which in the aggregate are believed by
management to be immaterial to the financial condition of the Corporation and
the Bank, except as discussed above.
ITEM 2. Changes in Securities
---------------------
Not applicable.
ITEM 3. Defaults Upon Senior Securities
-------------------------------
Not applicable.
ITEM 4. Submission of Matters to a Vote of Security Holders
---------------------------------------------------
The Annual Stockholders' Meeting was held on March 29, 1996.
The following matters were submitted to the stockholders:
1. Election of three directors:
A. Directors elected at the meeting for terms to expire in
1999:
Number of Shares
-------------------
For Withheld
-------- --------
Mr. William J. Campbell 1,778,780* 118,271
Mr. Daniel J. Massarelli 1,778,780* 118,271
Mr. Francis J. O'Donnell 1,778,334* 118,717
The following directors' term of office as a
director continued after the meeting:
(i) Dr. Jaime Portela
(ii) Mr. James Kennedy
(iii) Mr. John A. Morecraft
(iv) Mr. Girard P. Seymour, Jr.
- 12 -
<PAGE> 15
PAMRAPO BANCORP, INC.
PART II (Cont'd.)
Item 4.Submission of Matters to a Vote of Security Holders (Cont'd.)
---------------------------------------------------
B. Other persons receiving votes as directors:
Number of Shares
-----------------
For Withheld
------- --------
Mr. Roger T. Conlan 1,026,677 31,918
Dr. Gerald R. Mattia 373,527 3,202
Mr. Montoro J. Sagrestano 1,026,463 32,132
Number of Shares
----------------------------------
For Against Abstained
2. The ratification of --------- --------- ---------
Radics & Co., LLC, as
independent auditors
of the Corporation for
the Fiscal year ending
December 31, 1996. 2,914,361* 28,278 12,539
3. To request and recommend
that the Board of Directors
commence taking those
steps necessary and
appropriate to facilitate
and promote a sale of
Pamrapo Bancorp or its
bank subsidiary, in a
transaction subject to
stockholders' approval. 1,385,185 1,545,095* 25,298
* Excludes 132,500 shares which were purchased during
the three months ended March 31, 1996 and were ineligible
to be voted.
ITEM 5. Exhibits and Reports on Form 8-K
--------------------------------
(a) The following Exhibits are filed as part of this report.
3.1 Certification of Incorporation of Pamrapo Bancorp,
Inc.*
3.2 By-Laws of Pamrapo Bancorp, Inc.*
11.0 Computation of earnings per share (filed herewith).
27.0 Financial data schedule (filed herewith).
*Incorporated herein by reference to Form S-1,
Registration Statement, as amended, filed on
August 11, 1989, Registration Number 33-30370.
(b) Reports on Form 8-K
None
- 13 -
<PAGE> 16
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 thereunto duly authorized.
PAMRAPO BANCORP, INC.
Date: May 7, 1996 By:/s/ William J. Campbell
------------------------- ----------------------------------
William J. Campbell
President and Chief Executive Officer
Date: May 7, 1996 By:/s/ Gary J. Thomas
------------------------- -----------------------------------
Gary J. Thomas
Vice President, Chief Financial Officer
- 14 -
<PAGE> 1
<TABLE>
<CAPTION>
Exhibit 11.0
PAMRAPO BANCORP, INC.
AND SUBSIDIARIES
STATEMENT RE COMPUTATION OF EARNINGS PER SHARE
----------------------------------------------
Three Months Ended
March 31, 1996
-----------------
<S> <C>
Net income $ 1,204,080
============
Weighted average shares outstanding 3,437,596
Common stock equivalents
due to dilutive effect on stock options 4,264
------------
Total weighted average
common shares and equivalent outstanding 3,441,860
============
Primary earnings per share $ 0.35
============
Total weighted average common
shares and equivalents outstanding
for fully diluted computation 3,441,860
===========
Fully diluted earnings per share $ 0.35
============
</TABLE>
- 15 -
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
This legend contains summary information extracted from the Form 10-Q and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<CIK> 0000854071
<NAME> PAMRAPO BANCORP, INC.
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> MAR-31-1996
<CASH> 8,625,293
<INT-BEARING-DEPOSITS> 7,700,000
<FED-FUNDS-SOLD> 100,000
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 29,557,272
<INVESTMENTS-CARRYING> 93,371,230
<INVESTMENTS-MARKET> 92,396,000
<LOANS> 216,533,661
<ALLOWANCE> 2,731,234
<TOTAL-ASSETS> 368,393,807
<DEPOSITS> 302,075,232
<SHORT-TERM> 3,989,001
<LIABILITIES-OTHER> 5,245,541
<LONG-TERM> 0
0
0
<COMMON> 34,500
<OTHER-SE> 57,049,533
<TOTAL-LIABILITIES-AND-EQUITY> 368,393,807
<INTEREST-LOAN> 4,941,218
<INTEREST-INVEST> 2,234,227
<INTEREST-OTHER> 0
<INTEREST-TOTAL> 7,175,445
<INTEREST-DEPOSIT> 2,793,189
<INTEREST-EXPENSE> 2,902,734
<INTEREST-INCOME-NET> 4,272,711
<LOAN-LOSSES> 150,000
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 2,865,211
<INCOME-PRETAX> 1,416,457
<INCOME-PRE-EXTRAORDINARY> 1,416,457
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,204,080
<EPS-PRIMARY> 0.35
<EPS-DILUTED> 0.35
<YIELD-ACTUAL> 0<F1>
<LOANS-NON> 6,348,000
<LOANS-PAST> 2,787,000
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 0<F1>
<CHARGE-OFFS> 173,889
<RECOVERIES> 0<F1>
<ALLOWANCE-CLOSE> 2,731,234
<ALLOWANCE-DOMESTIC> 0<F1>
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0<F1>
<FN>
<F1> Not contained in the Form 10-Q.
</FN>
</TABLE>
