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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
____________________
Quarter ended September 30, 2004 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 (I.R.S. 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 2,169,047 SHARES
- -------------------------- ----------------------------------
(Class of Stock) (Outstanding at Setember 30, 2004)
____________________
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
----
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Consolidated Balance Sheets
September 30, 2004 and December 31, 2003 1
Consolidated Statements of Income
Nine Months Ended September 30, 2004, 2003 and 2002 2
Consolidated Statements of Income
Quarters Ended September 30, 2004, 2003 and 2002 3
Consolidated Statements of Stockholders' Equity
Nine Months Ended September 30, 2004, 2003 and 2002 4
Consolidated Statements of Cash Flows
Nine Months Ended September 30, 2004, 2003 and 2002 5
Notes to Consolidated Financial Statements 6-7
Item 2. Management's Discussion and Analysis of Financial
Conditions and Results of Operation 8-9
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 10
Signatures 11
302 CERTIFICATION : CEO 12
302 CERTIFICATION : CFO 13
906 CERTIFICATION : CEO 14
906 CERTIFICATION : CFO 15
Page 1
BRUNSWICK BANCORP AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
UNAUDITED
September 30 December 31
2004 2003
------------- -------------
ASSETS:
Cash and due from banks $ 13,916,945 $ 16,842,265
Federal funds sold 10,000,000 9,000,000
------------- -------------
Total cash and cash equivalents 23,916,945 25,842,265
Securities held to maturity 38,255,000 31,131,046
Loans receivable, net 61,870,684 61,468,161
Premises and equipment 996,515 799,922
Accrued interest receivable 527,020 536,161
Other assets 1,099,685 991,245
------------- -------------
TOTAL ASSETS $ 126,665,849 $ 120,768,800
------------- -------------
LIABILITIES AND STOCKHOLDERS' EQUITY:
Liabilities:
Deposits:
Non-interest bearing $ 34,747,728 $ 31,890,613
Interest bearing 59,213,007 57,523,877
------------- -------------
Total deposits 93,960,735 89,414,490
Borrowed funds 193,758 606,582
Accrued Interest payable 115,011 76,953
Other liabilities 372,078 187,593
------------- -------------
Total liabilities 94,641,582 90,285,618
------------- -------------
Stockholders' equity
Common stock, no par value
Authorized 10,000,000 shares
Issued and outstanding 2,169,047 shares
at September 30, 2004 and 2,111,722 shares
at December 31, 2003 4,338,094 4,223,444
Additional paid-in capital 3,118,573 2,712,139
Retained earnings 25,195,925 24,254,899
Deferred stock compensation (628,325) (707,300)
------------- -------------
Total stockholders' equity 32,024,267 30,483,182
------------- -------------
TOTAL LIABILITIES AND
STOCKHODER' EQUITY $ 126,665,849 $ 120,768,800
------------- -------------
Page 2
BRUNSWICK BANCORP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
NINE MONTHS ENDED SEPTEMBER 30, 2004, 2003 AND 2002
UNAUDITED
2004 2003 2002
---------- ---------- ----------
INTEREST INCOME:
Interest and fees on loans receivable $3,609,612 $3,939,511 $4,088,429
Interest on investments 1,048,512 813,721 1,489,319
Interest on Federal funds sold 141,407 138,446 198,960
Interest on deposits with banks 3,952 89,852 ----
---------- ---------- ----------
Total interest income 4,803,483 4,981,530 5,776,708
---------- ---------- ----------
INTEREST EXPENSE:
Interest on deposits 233,601 409,512 549,081
Interest on borrowed funds 1,232 1,350 3,160
---------- ---------- ----------
Total interest expense 234,833 410,862 552,241
---------- ---------- ----------
Net interest income 4,568,650 4,570,668 5,224,467
Provision for credit losses 135,000 225,000 175,000
---------- ---------- ----------
Net interest income after provision
for credit losses 4,433,650 4,345,668 5,049,467
---------- ---------- ----------
NON-INTEREST INCOME:
Service fees 686,938 691,984 694,881
Other non-interest income 20,440 50,217 23,049
---------- ---------- ----------
Total non-interest income 707,378 742,201 717,930
---------- ---------- ----------
NON-INTEREST EXPENSES
Salaries and wages 1,385,238 1,386,491 1,379,107
Employee benefits 582,983 554,103 538,971
Occupancy 607,224 550,818 540,859
Furniture and equipment 133,364 134,402 147,134
Other non-interest expenses 801,564 765,934 890,892
---------- ---------- ----------
Total non-interest expenses 3,510,373 3,391,748 3,496,963
---------- ---------- ----------
Income before income tax expense 1,630,655 1,696,121 2,270,434
Income tax expense 689,629 755,337 1,000,750
---------- ---------- ----------
NET INCOME $ 941,026 $ 940,784 $1,269,684
---------- ---------- ----------
NET INCOME PER SHARE:
Basic earnings per share $ 0.44 $ 0.44 $ 0.59
---------- ---------- ----------
Diluted earnings per share $ 0.37 $ 0.37 $ 0.52
---------- ---------- ----------
Average shares outstanding-basic 2,156,013 2,156,013 2,156,013
---------- ---------- ----------
Average shares outstanding-diluted 2,240,574 2,240,574 2,240,574
---------- ---------- ----------
Page 3
BRUNSWICK BANCORP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
QUARTERS ENDED SEPTEMBER 30, 2004, 2003 AND 2002
UNAUDITED
2004 2003 2002
---------- ---------- ----------
INTEREST INCOME:
Interest and fees on loans receivable $1,238,851 $1,319,812 $1,324,241
Interest on investments 368,227 218,822 458,189
Interest on Federal funds sold 59,478 28,184 91,149
Interest on deposits with banks ---- 63,550 ----
---------- ---------- ----------
Total interest income 1,666,556 1,630,368 1,873,579
---------- ---------- ----------
INTEREST EXPENSE:
Interest on deposits 78,550 110,773 175,942
Interest on borrowed funds 374 561 1,240
---------- ---------- ----------
Total interest expense 78,924 111,334 177,182
---------- ---------- ----------
Net interest income 1,587,632 1,519,034 1,696,397
Provision for credit losses 45,000 75,000 100,000
---------- ---------- ----------
Net interest income after provision
for credit losses 1,542,632 1,444,034 1,596,397
---------- ---------- ----------
NON-INTEREST INCOME:
Service fees 211,140 233,185 253,130
Other non-interest income 6,150 35,297 5,095
---------- ---------- ----------
Total non-interest income 217,290 268,482 258,225
---------- ---------- ----------
NON-INTEREST EXPENSES
Salaries and wages 475,797 470,263 443,338
Employee benefits 178,783 184,630 171,745
Occupancy 224,332 176,067 188,361
Furniture and equipment 40,167 43,480 51,567
Other non-interest expenses 271,582 230,247 281,061
---------- ---------- ----------
Total non-interest expenses 1,190,661 1,104,687 1,136,072
---------- ---------- ----------
Income before income tax expense 569,261 607,829 718,550
Income tax expense 280,630 257,047 333,410
---------- ---------- ----------
NET INCOME $ 288,631 $ 350,782 $ 385,140
---------- ---------- ----------
NET INCOME PER SHARE:
Basic earnings per share $ 0.13 $ 0.16 $ 0.18
---------- ---------- ----------
Diluted earnings per share $ 0.11 $ 0.14 $ 0.16
---------- ---------- ----------
Average shares outstanding-basic 2,156,013 2,156,013 2,156,013
---------- ---------- ----------
Average shares outstanding-diluted 2,240,574 2,240,574 2,240,574
---------- ---------- ----------
Page 4
BRUNSWICK BANCORP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
NINE MONTHS ENDED SEPTEMBER 30, 2004, 2003 AND 2002
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 ---- ---- 1,269,684 ---- ---- 1,269,684
Stock dividend 380,686 (380,686) (1,543) ---- ---- (1,543)
Amortization of deferred
stock compensation ---- ---- ---- 78,975 ---- 78,975
Purchase of treasury stock ---- ---- ---- ---- (4,845) (4,845)
---------- ----------- ------------ --------- -------- ------------
Balance, September 30, 2002 $4,189,750 $ 2,592,694 $ 21,741,179 $(838,925) $(96,619) $ 27,588,079
---------- ----------- ------------ --------- -------- ------------
Balance, December 31, 2002 $4,189,750 $ 2,592,694 $ 22,415,485 $(812,600) $(96,619) $ 28,288,710
Net income ---- ---- 940,784 ---- ---- 940,784
Amortization of deferred
stock compensation ---- ---- ---- 78,975 ---- 78,975
Proceeds from issuance of
stock-stock option plan ---- ---- ---- ---- 80,576 80,576
---------- ----------- ------------ --------- -------- ------------
Balance, September 30, 2003 $4,189,750 $ 2,592,694 $ 23,356,269 $(733,625) $(16,043) $ 29,389,045
---------- ----------- ------------ --------- -------- ------------
Balance, December 31, 2003 $4,223,444 $ 2,712,139 $ 24,254,899 $(707,300) $ ---- $ 30,483,182
Net income ---- ---- 941,026 ---- ---- 941,026
Amortization of deferred
stock compensation ---- ---- ---- 78,975 ---- 78,975
Proceeds from issuance of
stock-stock option plan 114,650 406,434 ---- ---- ---- 521,084
---------- ----------- ------------ --------- -------- ------------
Balance, September 30, 2004 $4,338,094 $ 3,118,573 $ 25,195,925 $(628,325) $ ---- $ 32,024,267
---------- ----------- ------------ --------- -------- ------------
Page 5
BRUNSWICK BANCORP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
NINE MONTHS ENDED SEPTEMBER 30, 2004, 2003 AND 2002
UNAUDITED
2004 2003 2002
------------ ------------ ------------
OPERATING ACTIVITIES:
Net income $ 941,026 $ 940,784 $ 1,269,684
Adjustments to reconcile net income to cash
provided by operating activities:
Provision for credit losses 135,000 225,000 175,000
Depreciation and amortization 96,794 91,868 99,037
Net accretion of securities discounts (10,048) (70,326) (83,282)
Amortization of deferred stock compensation 78,975 78,975 78,975
Net change in:
Accrued interest receivable 9,141 211,429 336,961
Accrued interest payable 38,058 23,425 (29,513)
Other assets (108,440) 57,310 (37,997)
Other liabilities 184,485 (2,960) 195,800
------------ ------------ ------------
Net cash provided by operating activities 1,364,991 1,555,505 2,004,665
------------ ------------ ------------
INVESTING ACTIVITIES:
Maturities of investment securities 42,410,000 18,150,000 16,000,000
Principal repayments on investment securities 91,094 42,764 67,304
Purchases of investment securities (49,615,000) (14,825,000) (10,984,326)
Net change in loans receivable (537,523) (4,108,817) (2,587,428)
Acquisitions of premises and equipment (293,387) (40,584) (59,419)
Proceeds from sales of premises and equipment ---- 354,480 10,363
------------ ------------ ------------
Net cash provided by (used in) investing activities (7,944,816) (427,157) 2,446,494
------------ ------------ ------------
FINANCING ACTIVITIES:
Cash paid in lieu of fractional shares ---- ---- (1,543)
Purchase of treasury stock ---- ---- (4,845)
Proceeds from issuance of stock-stock option plan 521,084 80,576 ----
Net increase (decrease) in non-interest
bearing deposits 2,857,115 2,105,075 1,689,720
Net increase (decrease) in interest
bearing deposits 1,689,130 1,055,048 13,282,863
Net increase (decrease) in borrowed funds (412,824) (525,360) (163,712)
------------ ------------ ------------
Net cash provided by (used in) financing activities 4,654,505 2,715,339 14,802,483
------------ ------------ ------------
Increase (decrease) in cash and cash equivalents (1,925,320) 3,843,687 19,253,642
Cash and cash equivalents at January 1 25,842,265 33,629,080 15,064,753
------------ ------------ ------------
Cash and cash equivalents at September 30 $ 23,916,945 $ 37,472,767 $ 34,318,395
------------ ------------ ------------
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
concidered 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:
SEPTEMBER 30, 2004
BOOK MARKET
VALUE VALUE
----------- -----------
U.S. Government and agency securities $32,605,000 $32,348,538
Other securities 5,650,000 5,643,750
----------- -----------
$38,255,000 $37,992,288
----------- -----------
DECEMBER 31, 2003
BOOK MARKET
VALUE VALUE
----------- -----------
U.S. Government and agency securities $29,081,046 $29,124,083
Other securities 2,050,000 2,050,000
----------- -----------
$31,131,046 $31,174,083
----------- -----------
Page 7
BRUNSWICK BANCORP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 3
NET LOANS RECEIVABLE
The composition of net loans receivabe is as follows:
SEPTEMBER 30 DECEMBER 31
2004 2003
------------ -----------
Commercial loans $41,175,792 $40,013,237
Real estate loans 21,021,411 21,554,333
Cosumer loans 908,595 806,893
----------- -----------
63,105,798 62,374,463
Less:
Allowance for credit losses 1,080,131 800,000
Unearned income 154,983 106,302
----------- -----------
$61,870,684 $61,468,161
----------- -----------
NOTE 4
PREMISES AND EQUIPMENT
The major components of premises and equipment are as follows:
SEPTEMBER 30 DECEMBER 31
2004 2003
------------ -----------
Land $ 240,705 $ 300,705
Bank premises 706,826 646,826
Leasehold improvements 232,594 183,023
Furniture and equipment 1,465,264 1,221,449
---------- ----------
2,645,389 2,352,003
Less accumulated depreciation
and amortization 1,648,874 1,552,081
---------- ----------
$ 996,515 $ 799,922
---------- ----------
Page 8
BRUNSWICK BANCORP AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS
SEPTEMBER 30, 2004
The most noticeably changes in the Corporation's Balance Sheet since December
31, 2003 are increases in investment securities and deposits of $7,100,000 and
$4,500,000, respectively.
The $7,100,000 increase in securities was mostly the result of investments in
securities issued by US Government Agencies and with the increase in deposits,
the Corporation's interest earning assets increased by approximately $8,500,000.
The allowance for credit losses increased by $280,000, which was due to credit
loss provisions totaling $135,000 and recoveries totaling $145,000. At September
30, 2004 the allowance for credit losses totaled $1,080,131 which represented
35% of all loans that were past due or in nonaccrual.
Stockholders' equity increased by approximately $1,541,000 mainly because of the
addition of current earnings totaling $941,000 and additional capital of
$521,000 that resulted from stock options exercised by directors and employees.
The Corporation continues to be classified as "Well Capitalized". At September
30, 2004 our risk-based capital ratio was 44.4% which is over five times the
regulatory requirement.
The results of operations for the first three quarters of 2004, compared to the
same period of 2003, show a slight decrease in income before taxes of
approximately $65,000.
Although interest earning assets increased in volume, lower interest rates
brought about decreases in interest income and expense of $178,000 and $176,000,
respectively. The resulting $2,000 decrease in net interest income, although
insignificant, is analyzed in detail on page 9.
Credit loss provisions totaled $135,000 during the current period compared to
$225,000 during the first three quarters of 2003. Finally non-interest income
decreased by $35,000 and non-interest expenses increased by $119,000.
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
------ ----- -----
Nine Months Ended September 30, 2004
Versus
Nine Months Ended September 30, 2003
Interest income on:
Loans receivable $ (12) $(318) $(330)
Securities held to maturity 367 (132) 235
Short term investments (75) (8) (83)
----- ----- -----
Total interest income 280 (458) (178)
----- ----- -----
Interest expense on:
Deposits (8) (167) (175)
Borrowed funds --- (1) (1)
----- ----- -----
Total interest expense (8) (168) (176)
----- ----- -----
Net interest income $ 288 $(290) $ (2)
----- ----- -----
Quarter Ended September 30, 2004
Versus
Quarter Ended September 30, 2003
Interest income on:
Loans receivable $ 21 $(102) $ (81)
Securities held to maturity 255 (106) 149
Short term investments (51) 18 (33)
----- ----- -----
Total interest income 225 (190) 35
----- ----- -----
Interest expense on:
Deposits (4) (28) (32)
Borrowed funds --- (1) (1)
----- ----- -----
Total interest expense (4) (29) (33)
----- ----- -----
Net interest income $ 229 $(161) $ 68
----- ----- -----
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 September 30,
2004.
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 SUBSIDIARIS
10/21/04 Carmen J. Gumina
- -------------- ---------------------------------
Date Carmen J. Gumina, President & CEO
10/21/04 Thomas Fornale
- -------------- ----------------------------------
Date Thomas Fornale, Treasurer