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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 March 31, 2004 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
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(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
NEW BRUNSWICK, NEW JERSEY 08901
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(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 2,151,772 SHARES
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(Class of Stock) (Outstanding at March 31, 2004)
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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 [ ]
BRUNSWICK BANCORP AND SUBSIDIARIES
INDEX
PAGE
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PART I - FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Consolidated Balance Sheets
March 31, 2004 and December 31, 2003 1
Consolidated Statements of Income
Three Months Ended March 31, 2004, 2003 and 2002 2
Consolidated Statements of Stockholders' Equity
Three Months Ended March 31, 2004, 2003 and 2002 3
Consolidated Statements of Cash Flows
Three Months Ended March 31, 2004, 2003 and 2002 4
Notes to Consolidated Financial Statements 5-6
Item 2. Management's Discussion and Analysis of Financial
Conditions and Results of Operation 7-8
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 9
Signatures 10
302 Certification: CEO 11
302 Certification: CFO 12
906 Certification: CEO 13
906 Certification: CFO 14
Page 1
BRUNSWICK BANCORP AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
UNAUDITED
March 31 December 31
2004 2003
------------------ ---------------
ASSETS:
Cash and due from banks $ 6,409,859 $ 16,842,265
Federal funds sold 15,000,000 9,000,000
------------------ ---------------
Total cash and cash equivalents 21,409,859 25,842,265
Securities held to maturity 31,344,960 31,131,046
Loans receivable, net 60,235,049 61,468,161
Premises and equipment 807,545 799,922
Accrued interest receivable 476,792 536,161
Other assets 1,104,979 991,245
------------------ ---------------
TOTAL ASSETS $ 115,379,184 $ 120,768,800
------------------ ---------------
LIABILITIES AND STOCKHOLDERS' EQUITY:
Liabilities:
Deposits:
Non-interest bearing $ 31,834,921 $ 31,890,613
Interest bearing 51,369,713 57,523,877
------------------ ---------------
Total deposits 83,204,634 89,414,490
Borrowed funds 488,068 606,582
Accrued interest payable 80,492 76,953
Other liabilities 465,581 187,593
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Total liabilities 84,238,775 90,285,618
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Stockholders' equity
Common stock, no par value
Authorized 10,000,000 shares;
Issued and outstanding 2,151,772 shares
at March 31, 2004 and 2,111,722 shares
at December 31, 2003 4,303,544 4,223,444
Additional paid-in capital 2,996,094 2,712,139
Retained earnings 24,521,746 24,254,899
Deferred stock compensation (680,975) (707,300)
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Total stockholders' equity 31,140,409 30,483,182
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TOTAL LIABILITIES AND
STOCKHOLDER' EQUITY $ 115,379,184 $ 120,768,800
------------------ ---------------
(1)
Page 2
BRUNSWICK BANCORP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
THREE MONTHS ENDED MARCH 31, 2004, 2003 AND 2002
UNAUDITED
2004 2003 2002
---------------- ------------- -------------
INTEREST INCOME:
Interest on loans $ 1,197,407 $ 1,333,746 $ 1,400,409
Interest on investments 329,967 336,919 509,732
Interest on Federal funds sold 29,205 53,034 54,606
Interest on deposits with banks 3,952 -- --
---------------- ------------- -------------
Total interest income 1,560,531 1,723,699 1,964,747
---------------- ------------- -------------
INTEREST EXPENSE:
Interest on deposits 76,652 143,416 197,502
Interest on borrowed funds 483 525 1,313
---------------- ------------- -------------
Total interest expense 77,135 143,941 198,815
---------------- ------------- -------------
Net interest income 1,483,396 1,579,758 1,765,932
Provision for credit losses 45,000 75,000 50,000
---------------- ------------- -------------
Net interest income after provision
for credit losses 1,438,396 1,504,758 1,715,932
---------------- ------------- -------------
NON-INTEREST INCOME:
Service fees 234,163 217,732 206,496
Other non-interest income 7,150 6,630 14,534
---------------- ------------- -------------
Total non-interest income 241,313 224,362 221,030
---------------- ------------- -------------
NON-INTEREST EXPENSES
Salaries and wages 455,311 451,471 467,012
Employee benefits 219,734 194,353 195,169
Occupancy 202,014 190,581 173,962
Furniture and equipment 41,336 41,364 45,413
Other non-interest expenses 259,467 261,309 335,161
---------------- ------------- -------------
Total non-interest expenses 1,177,862 1,139,078 1,216,717
---------------- ------------- -------------
Income before income tax expense 501,847 590,042 720,245
Income tax expense 235,000 273,300 317,000
---------------- ------------- -------------
NET INCOME $ 266,847 $ 316,742 $ 403,245
---------------- ------------- -------------
NET INCOME PER SHARE:
Basic earnings per share $ 0.12 $ 0.15 $ 0.21
---------------- ------------- -------------
Diluted earnings per share $ 0.12 $ 0.15 $ 0.21
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Average shares outstanding-basic 2,142,463 2,094,875 1,904,532
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Average shares outstanding-diluted 2,235,620 2,145,265 1,938,530
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Page 3
BRUNSWICK BANCORP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
THREE MONTHS ENDED MARCH 31, 2003, 2002 AND 2001
UNAUDITED
DEFERRED
STOCK
COMMON RETAINED COMPEN- TREASURY
STOCK SURPLUS EARNINGS SATION STOCK TOTAL
------------- ------------ ------------- ----------- ---------- -------------
Balance, December 31, 2001 $ 3,809,064 $ 2,973,380 $ 20,473,038 $ (917,900) $ (91,774) $ 26,245,808
Net income -- -- 403,245 -- -- 403,245
Amortization of deferred
stock compensation -- -- -- 26,325 -- 26,325
------------- ------------ ------------- ----------- ---------- -------------
Balance, March 31, 2002 $ 3,809,064 $ 2,973,380 $ 20,876,283 $ (891,575) $ (91,774) $ 26,675,378
------------- ------------ ------------- ----------- ---------- -------------
Balance, December 31, 2002 $ 4,189,750 $ 2,592,694 $ 22,415,485 $ (812,600) $ (96,619) $ 28,288,710
Net income -- -- 316,742 -- -- 316,742
Amortization of deferred
stock compensation -- -- -- 26,325 -- 26,325
------------- ------------ ------------- ----------- ---------- -------------
Balance, March 31, 2003 $ 4,189,750 $ 2,592,694 $ 22,732,227 $ (786,275) $ (96,619) $ 28,631,777
------------- ------------ ------------- ----------- ---------- -------------
Balance, December 31, 2003 $ 4,223,444 $ 2,712,139 $ 24,254,899 $ (707,300) $ -- $ 30,483,182
Net income -- -- 266,847 -- -- 266,847
Amortization of deferred
stock compensation -- -- -- 26,325 -- 26,325
Proceeds from issuance of
stock-stock option plan 80,100 283,955 -- -- -- 364,055
------------- ------------ ------------- ----------- ---------- -------------
Balance, March 31, 2004 $ 4,303,544 $ 2,996,094 $ 24,521,746 $ (680,975) $ -- $ 31,140,409
------------- ------------ ------------- ----------- ---------- -------------
Page 4
BRUNSWICK BANCORP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED MARCH 31, 2004, 2003 AND 2002
UNAUDITED
2004 2003 2002
------------ ------------ -------------
OPERATING ACTIVITIES:
Net income $ 266,847 $ 316,742 $ 403,245
Adjustments to reconcile net income to cash
provided by operating activities:
Provision for credit losses 45,000 75,000 50,000
Depreciation and amortization 30,061 31,690 33,376
Net accretion of securities discounts (5,008) (32,259) (27,679)
Amortization of deferred stock compensation 26,325 26,325 26,325
Net change in:
Accrued interest receivable 59,369 226,720 162,211
Accrued interest payable 3,539 (4,660) 1,229
Other assets (113,734) (47,434) (159,284)
Other liabilities 277,988 213,680 368,379
------------ ------------ -------------
Net cash provided by operating activities 590,387 805,804 857,802
------------ ------------ -------------
INVESTING ACTIVITIES:
Maturities of investment securities 23,000,000 13,000,000 11,000,000
Principal repayments on investment securities 91,094 14,713 22,353
Purchases of investment securities (23,300,000) (5,000,000) (10,984,326)
Net change in loans receivable 1,188,112 (4,887,588) (848,805)
Acquisitions of premises and equipment (37,684) (40,584) --
Proceeds from sales of premises and equipment -- -- 10,363
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Net cash provided by (used in) investing activities 941,522 3,086,541 (800,415)
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FINANCING ACTIVITIES:
Proceed from issuance of stock-stock option plan 364,055 -- --
Net increase (decrease) in non-interest
bearing deposits (55,692) (2,237,180) (515,609)
Net increase (decrease) in interest
bearing deposits (6,154,164) (8,731,017) 4,040,358
Net increase (decrease) in borrowed funds (118,514) (496,810) (144,827)
------------ ------------ -------------
Net cash provided by (used in) financing activities (5,964,315) (11,465,007) 3,379,922
------------ ------------ -------------
Net increase (decrease) in cash and cash equivalents (4,432,406) (7,572,662) 3,437,309
Cash and cash equivalents at January 1 25,842,265 33,629,080 15,064,753
------------ ------------ -------------
Cash and cash equivalents at March 31 $ 21,409,859 $ 26,056,418 $ 18,502,062
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Page 5
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:
MARCH 31, 2004
BOOK MARKET
VALUE VALUE
-------------- --------------
U.S. Government and agency securities $ 28,294,960 $ 28,245,000
Other securities 3,050,000 3,043,750
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$ 31,344,960 $ 31,288,750
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DECEMBER 31, 2003
BOOK MARKET
VALUE VALUE
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U.S. Government and agency securities $ 29,081,046 $ 29,124,083
Other securities 2,050,000 2,050,000
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$ 31,131,046 $ 31,174,083
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Page 6
BRUNSWICK BANCORP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 3
NET LOANS RECEIVABLE
The composition of net loans receivable is as follows:
MARCH 31 DECEMBER 31
2004 2003
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Commercial loans $ 38,395,186 $ 40,013,237
Real estate loans 21,979,899 21,554,333
Consumer loans 812,895 806,893
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61,187,980 62,374,463
Less:
Allowance for credit losses 845,062 800,000
Unearned income 107,869 106,302
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$ 60,235,049 $ 61,468,161
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NOTE 4
PREMISES AND EQUIPMENT
The major components of premises and equipment are as follows:
MARCH 31 DECEMBER 31
2004 2003
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Land $ 300,705 $ 300,705
Bank premises 646,826 646,826
Leasehold improvements 183,023 183,023
Furniture and equipment 1,259,133 1,221,449
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2,389,687 2,352,003
Less accumulated depreciation
and amortization 1,582,142 1,552,081
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$ 807,545 $ 799,922
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Page 7
BRUNSWICK BANCORP AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS
MARCH 31, 2004
The only noticeably changes in the Corporation's Balance Sheet since December
31, 2003 were a $10,400,000 decrease in cash and due from banks, an increase in
federal funds sold of $6,000,000 and a decrease in deposits of $6,200,000.
Cash and due from banks decreased by approximately $10,400,000 mainly because of
a $6,100,000 reduction in an interest bearing account with a corespondent bank.
This resulted in the aforementioned $6,000,000 increase in federal funds sold
The allowance for credit losses increased by $45,000, which was due to credit
loss provisions. At March 31, 2004 the allowance for credit losses totaled
$845,062 which represented 24% of all loans that were past due or in nonaccrual.
Stockholders' equity increased by approximately $657,000 mainly because of the
addition of current earnings totaling $268,000 and additional capital of
$267,000 that resulted from stock options exercised by employees. The
Corporation continues to be classified as "Well Capitalized". At March 31, 2004
our risk-based capital ratio was 46.1% which is over five times the regulatory
requirement.
The results of operations for the first quarter of 2004, compared to the same
period of 2003, show a decrease in income before taxes of approximately $88,000
which was mainly the result of a decrease in net interest income.
Declining interest rates brought about decreases in interest income and expense
of $163,000 and $67,000, respectively. The resulting $96,000 decrease in net
interest income is analyzed in detail on page 8.
Credit loss provisions totaled $45,000 during the current period compared to
$75,000 during the first quarter of 2003. Finally non-interest income and
non-interest expenses increased by $17,000 and $39,000, respectively.
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 8
BRUNSWICK BANCORP AND SUBSIDIARIES
ANALYSIS OF CHANGES IN NET INTEREST INCOME
Three Months Ended March 31, 2004 Increase (Decrease) Due to Changes in
Versus -------------------------------------
Three Months Ended March 31, 2003 Volume Rates Total
- --------------------------------- -------- ------- -------
Interest income on:
Loans receivable $ (22) $ (114) $ (136)
Securities held to maturity 62 (69) (7)
Federal funds sold (9) (11) (20)
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Total interest income 31 (194) (163)
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Interest expense on:
Deposits (5) (62) (67)
Borrowed funds -- -- --
-------- ------- -------
Total interest expense (5) (62) (67)
-------- ------- -------
Net interest income $ 36 $ (132) $ (96)
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Page 9
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 March 31, 2004.
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
04/20/04 Carmen J. Gumina
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Date Carmen J. Gumina, CEO
04/20/04 Thomas Fornale
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Date Thomas Fornale, Treasurer