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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
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Quarter ended June 30, 2002 Commission file number 0-14403
BRUNSWICK BANCORP
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(Exact Name of Registrant as Specified in its Charter)
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NEW JERSEY 22-2610694
- ------------------------------ ----------------------
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
NEW BRUNSWICK, NEW JERSEY 08901
- --------------------------------------- ----------
(Address of Principal Executive Office) (Zip Code)
(732) 247-5800
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(Registrant's Telephone Number Including Area Code)
NOT APPLICABLE
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(Former Name, Former Address and Former Fiscal Year
If Changed Since Last Report)
COMMON STOCK, NO PAR VALUE 2,094,875 SHARES
- -------------------------- ------------------------------
(Class of Stock) (Outstanding at June 30, 2001)
--------------------
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
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Page 1
BRUNSWICK BANCORP AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
UNAUDITED
June 30 December 31
2002 2001
------------- -------------
ASSETS:
Cash and due from banks $ 6,496,956 $ 9,064,753
Federal funds sold 13,000,000 6,000,000
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Total cash and cash equivalents 19,496,956 15,064,753
Securities held to maturity 34,908,570 34,913,592
Loans receivable, net 55,187,446 56,090,636
Premises and equipment 1,238,383 1,256,514
Accrued interest receivable 1,148,563 1,139,374
Other assets 562,278 538,815
------------- -------------
TOTAL ASSETS $ 112,542,196 $ 109,003,684
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LIABILITIES AND STOCKHOLDERS' EQUITY:
Liabilities:
Deposits:
Non-interest bearing $ 29,769,739 $ 29,118,166
Interest bearing 54,744,918 52,509,335
------------- -------------
Total deposits 84,514,657 81,627,501
Borrowed funds 290,313 704,482
Accrued interest payable 161,672 177,569
Other liabilities 397,500 248,324
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Total liabilities 85,364,142 82,757,876
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Stockholders' equity
Common stock, no par value
Authorized 10,000,000 shares
Issued 2,094,875 shares, June 30, 2002
and 1,904,532 shares, December 31, 2001 4,189,750 3,809,064
Additional paid-in capital 2,592,694 2,973,380
Retained earnings 21,356,039 20,473,038
Deferred stock compensation (865,250) (917,900)
Treasury stock at cost, 10,457 and 10,230 shares (95,179) (91,774)
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Total stockholders' equity 27,178,054 26,245,808
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TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 112,542,196 $ 109,003,684
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Page 2
BRUNSWICK BANCORP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
SIX MONTHS ENDED JUNE 30, 2002, 2001 AND 2000
UNAUDITED
2002 2001 2000
---------- ---------- ----------
INTEREST INCOME:
Interest and fees on loans receivable $2,764,188 $2,798,075 $2,390,874
Interest on investments 1,031,130 1,009,286 642,988
Interest on Federal funds sold 107,811 497,492 978,859
---------- ---------- ----------
Total interest income 3,903,129 4,304,853 4,012,721
---------- ---------- ----------
INTEREST EXPENSE:
Interest on deposits 373,139 867,416 977,521
Interest on borrowed funds 1,920 5,832 9,165
---------- ---------- ----------
Total interest expense 375,059 873,248 986,686
---------- ---------- ----------
Net interest income 3,528,070 3,431,605 3,026,035
Provision for credit losses 75,000 7,000 150,000
---------- ---------- ----------
Net interest income after provision
for credit losses 3,453,070 3,424,605 2,876,035
---------- ---------- ----------
NON-INTEREST INCOME:
Service fees 441,751 462,610 542,849
Other non-interest income 17,954 23,134 65,200
---------- ---------- ----------
Total non-interest income 459,705 485,744 608,049
---------- ---------- ----------
NON-INTEREST EXPENSES
Salaries and wages 935,769 958,079 938,266
Employee benefits 367,226 352,222 283,117
Occupancy 352,498 357,970 314,413
Furniture and equipment 95,567 119,815 103,974
Other non-interest expenses 609,831 660,570 665,614
---------- ---------- ----------
Total non-interest expenses 2,360,891 2,448,656 2,305,384
---------- ---------- ----------
Income before income tax expense 1,551,884 1,461,693 1,178,700
Income tax expense 667,340 580,650 469,968
---------- ---------- ----------
NET INCOME $ 884,544 $ 881,043 $ 708,732
---------- ---------- ----------
NET INCOME PER SHARE $ 0.42 $ 0.42 $ 0.34
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Page 3
BRUNSWICK BANCORP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
QUARTERS ENDED JUNE 30, 2002, 2001 AND 2000
UNAUDITED
2002 2001 2000
---------- ---------- ----------
INTEREST INCOME:
Interest and fees on loans receivable $1,363,779 $1,368,019 $1,266,445
Interest on investments 521,398 507,667 322,234
Interest on Federal funds sold 53,205 231,949 503,240
---------- ---------- ----------
Total interest income 1,938,382 2,107,635 2,091,919
---------- ---------- ----------
INTEREST EXPENSE:
Interest on deposits 175,637 407,732 495,181
Interest on borrowed funds 607 2,079 5,018
---------- ---------- ----------
Total interest expense 176,244 409,811 500,199
---------- ---------- ----------
Net interest income 1,762,138 1,697,824 1,591,720
Provision for credit losses 25,000 7,000 115,000
---------- ---------- ----------
Net interest income after provision
for credit losses 1,737,138 1,690,824 1,476,720
---------- ---------- ----------
NON-INTEREST INCOME:
Service fees 235,255 243,407 312,177
Other non-interest income 3,420 5,594 61,120
---------- ---------- ----------
Total non-interest income 238,675 249,001 373,297
---------- ---------- ----------
NON-INTEREST EXPENSES
Salaries and wages 468,757 491,839 470,301
Employee benefits 172,057 184,515 135,018
Occupancy 178,536 179,134 157,985
Furniture and equipment 50,154 66,576 55,675
Other non-interest expenses 274,670 313,291 359,098
---------- ---------- ----------
Total non-interest expenses 1,144,174 1,235,355 1,178,077
---------- ---------- ----------
Income before income tax expense 831,639 704,470 671,940
Income tax expense 350,340 278,550 267,118
---------- ---------- ----------
NET INCOME $ 481,299 $ 425,920 $ 404,822
---------- ---------- ----------
NET INCOME PER SHARE $ 0.23 $ 0.20 $ 0.19
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Page 4
BRUNSWICK BANCORP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
SIX MONTHS ENDED JUNE 30, 2002, 2001 AND 2000
UNAUDITED
DEFERRED
STOCK
COMMON RETAINED COMPEN- TREASURY
STOCK SURPLUS EARNINGS SATION STOCK TOTAL
---------- ----------- ------------ ----------- -------- ------------
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
---------- ----------- ------------ ----------- -------- ------------
Balance, December 31, 2000 $3,729,064 $ 2,621,380 $ 18,647,756 $ (580,400) $(91,774) $ 24,326,026
Net income -- -- 881,043 -- -- 881,043
Deferred stock compensation 80,000 420,000 -- (500,000) -- --
Amortization of deferred
stock compensation -- -- -- 43,550 -- 43,550
---------- ----------- ------------ ----------- -------- ------------
Balance, June 30, 2001 $3,809,064 $ 3,041,380 $ 19,528,799 $(1,036,850) $(91,774) $ 25,250,619
---------- ----------- ------------ ----------- -------- ------------
Balance, December 31, 2001 $3,809,064 $ 2,973,380 $ 20,473,038 $ (917,900) $(91,774) $ 26,245,808
Net income -- -- 884,544 -- -- 884,544
Stock dividend 380,686 (380,686) (1,543) -- -- (1,543)
Amortization of deferred
stock compensation -- -- -- 52,650 -- 52,650
Purchase of treasury stock -- -- -- -- (3,405) (3,405)
---------- ----------- ------------ ----------- -------- ------------
Balance, June 30, 2002 $4,189,750 $ 2,592,694 $ 21,356,039 $ (865,250) $(95,179) $ 27,178,054
---------- ----------- ------------ ----------- -------- ------------
Page 5
BRUNSWICK BANCORP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
SIX MONTHS ENDED JUNE 30, 2002, 2001 AND 2000
UNAUDITED
2002 2001 2000
------------ ------------ ------------
OPERATING ACTIVITIES:
Net income $ 884,544 $ 881,043 $ 708,732
Adjustments to reconcile net income to cash
provided by operating activities:
Provision for credit losses 75,000 7,000 150,000
Depreciation and amortization 67,187 101,970 77,676
Net accretion of securities discounts (59,713) (35,724) (32,196)
(Increase) decrease in other assets (32,652) (175,940) (608,321)
Increase (decrease) in other liabilities 133,279 213,849 233,128
------------ ------------ ------------
Net cash provided (used) by operating activities 1,067,645 992,198 529,019
------------ ------------ ------------
INVESTING ACTIVITIES:
Maturities of securities 11,000,000 6,000,000 4,000,000
Principal repayments on securities 49,061 26,640 33,356
Purchases of securities (10,984,326) (11,000,000) (6,324,500)
Net (increase) decrease in loans receivable 828,190 45,959 (4,922,018)
Acquisitions of premises and equipment (59,419) (160,225) (289,204)
Proceeds from sales of premises and equipment 10,363 878,223 --
------------ ------------ ------------
Net cash provided (used) by investing activities 843,869 (4,209,403) (7,502,366)
------------ ------------ ------------
FINANCING ACTIVITIES:
Cash paid in lieu of fractional shares (1,543) -- --
Amortization of deferred stock compensation 52,650 43,550 --
Purchase of treasury stock (3,405) -- --
Net increase (decrease) in non-interest
bearing deposits 651,573 2,473,561 2,096,845
Net increase (decrease) in interest
bearing deposits 2,235,583 (10,937,553) (5,140,424)
Net increase (decrease) in borrowed funds (414,169) 38,412 (9,336)
------------ ------------ ------------
Net cash provided (used) by financing activities 2,520,689 (8,382,030) (3,052,915)
------------ ------------ ------------
Increase (decrease) in cash and cash equivalents 4,432,203 (11,599,235) (10,026,262)
Cash and cash equivalents at January 1 15,064,753 39,271,870 40,505,416
------------ ------------ ------------
Cash and cash equivalents at June 30 $ 19,496,956 $ 27,672,635 $ 30,479,154
------------ ------------ ------------
Page 6
BRUNSWICK BANCORP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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. They do not include all the information and footnotes required
by generally accepted accounting principles for complete financial statements.
The information presented includes all normal and recurring adjustments
considered necessary for a fair presentation of the interim period results.
NOTE 2
SECURITIES HELD TO MATURITY
The following is a comparative summary of the book values and estimated market
values of securities held to maturity:
JUNE 30, 2002
BOOK MARKET
VALUE VALUE
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U.S. Government and agency securities $32,958,570 $33,431,702
Other securities 1,950,000 1,950,000
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$34,908,570 $35,381,702
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DECEMBER 31, 2001
BOOK MARKET
VALUE VALUE
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U.S. Government and agency securities $32,963,592 $33,239,087
Other securities 1,950,000 1,950,000
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$34,913,592 $35,189,087
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Page 7
BRUNSWICK BANCORP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 3
NET LOANS RECEIVABLE
The composition of net loans receivable is as follows:
JUNE 30 DECEMBER 31
2002 2001
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Commercial loans $26,969,604 $25,902,467
Real estate loans 28,807,845 30,221,330
Consumer loans 633,223 847,005
----------- -----------
56,410,672 56,970,802
Less:
Allowance for credit losses 1,120,548 800,000
Unearned income 102,678 80,166
----------- -----------
$55,187,446 $56,090,636
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NOTE 4
PREMISES AND EQUIPMENT
The major components of premises and equipment are as follows:
JUNE 30 DECEMBER 31
2002 2001
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Land $ 516,927 $ 516,927
Bank premises 764,260 745,958
Leasehold improvements 183,023 183,023
Furniture and equipment 1,136,978 1,178,536
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2,601,188 2,624,444
Less accumulated depreciation
and amortization 1,362,805 1,367,930
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$1,238,383 $1,256,514
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Page 8
BRUNSWICK BANCORP AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS
JUNE 30, 2002
There were no significant changes in the Corporation's Balance Sheet since
December 31, 2001.
Federal funds sold increased by $7,000,000. This increase, for the most part,
was the result of an increase of $2,887,000 in deposits and a $2,568,000
decrease in cash and due from banks.
The allowance for credit losses increased by approximately $321,000, which was
due to $75,000 in credit loss provisions and net recoveries totaling $246,000.
At June 30, 2002 the allowance for credit losses totaled $1,120,548 which
represented 42% of past due and nonaccrual loans.
The results of operations for the first half of 2002, compared to the same
period of 2001, show a increase in income before taxes of approximately $90,000.
Due to declining interest rates interest income and expenses decreased by
$402,000 and $498,000, respectively which resulted in a $96,000 increase in net
interest income. This increase is analyzed in detail on page 9.
The corporation continues to be "Well Capitalized" which is the highest
classification a bank can receive. At June 30, 2002 our total risk-based capital
ratio was 44.6% which is over five 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.
Page 9
BRUNSWICK BANCORP AND SUBSIDIARIES
ANALYSIS OF CHANGES IN NET INTEREST INCOME
Increase (Decrease) Due to Changes in
-------------------------------------
Volume Rates Total
------ ----- -----
Six Months Ended June 30, 2002
Versus
Six Months Ended June 30, 2001
Interest income on:
Loans receivable $ 193 $(227) $ (34)
Securities held to maturity 175 (153) 22
Federal funds sold (70) (320) (390)
----- ----- -----
Total interest income 298 (700) (402)
----- ----- -----
Interest expense on:
Deposits (3) (491) (494)
Borrowed funds -- (4) (4)
----- ----- -----
Total interest expense (3) (495) (498)
----- ----- -----
Net interest income $ 301 $(205) $ 96
----- ----- -----
Quarter Ended June 30, 2002
Versus
Quarter Ended June 30, 2001
Interest income on:
Loans receivable $ 101 $(105) $ (4)
Securities held to maturity 86 (72) 14
Federal funds sold (42) (137) (179)
----- ----- -----
Total interest income 145 (314) (169)
----- ----- -----
Interest expense on:
Deposits -- (232) (232)
Borrowed funds -- (1) (1)
----- ----- -----
Total interest expense -- (233) (233)
----- ----- -----
Net interest income $ 145 $ (81) $ 64
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Page 10
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 months ended June 30, 2002.
Page 11
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
07/30/02 Roman T. Gumina
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Date Roman T. Gumina, President
07/30/02 Thomas Fornale
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Date Thomas Fornale, Treasurer