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 March 31, 2005 Commission file number 001-16293
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 2,549,051 SHARES
-------------------------- ------------------------------
(Class of Stock) (Outstanding at March 31,2005)
-----------------------------
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
March 31, 2005 and December 31, 2004 1
Consolidated Statements of Income
Three Months Ended March 31, 2005, 2004 and 2003 2
Consolidated Statements of Stockholders' Equity
Three Months Ended March 31, 2005, 2004 and 2003 3
Consolidated Statements of Cash Flows
Three Months Ended March 31, 2005, 2004 and 2003 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
2005 2004
------------- ---------------
ASSETS:
Cash and due from banks $ 7,818,584 $ 6,904,689
Federal funds sold 22,000,000 22,000,000
------------- ---------------
Total cash and cash equivalents 29,818,584 28,904,689
Securities held to maturity 31,005,000 34,505,000
Loans receivable, net 70,978,934 65,675,788
Premises and equipment, net 955,055 992,910
Accrued interest receivable 553,537 678,327
Other assets 1,003,075 992,740
------------- ---------------
TOTAL ASSETS $ 134,314,185 $ 131,749,454
------------- ---------------
LIABILITIES AND STOCKHOLDERS' EQUITY:
Liabilities:
Deposits:
Non-interest bearing $ 38,313,876 $ 32,618,470
Interest bearing 61,814,156 65,858,450
------------- ---------------
Total deposits 100,128,032 98,476,920
Borrowed funds 246,125 278,661
Accrued interest payable 105,185 65,620
Other liabilities 634,547 109,838
------------- ---------------
Total liabilities 101,113,889 98,931,039
------------- ---------------
Stockholders' equity
Common stock, no par value
Authorized 10,000,000 shares;
Issued and outstanding 2,549,051 shares at March 31, 2005
and 2,184,747 shares at December 31, 2004 5,098,102 4,369,494
Additional paid-in capital 2,720,735 3,437,550
Retained earnings 26,045,725 25,759,478
Deferred stock compensation -575,675 -602,000
Treasury stock at cost, 7,950 shares at March 31, 2005
and 11,239 shares at December 31, 2004 -88,591 -146,107
------------- ---------------
Total stockholders' equity 33,200,296 32,818,415
------------- ---------------
TOTAL LIABILITIES AND STOCKHOLDER' EQUITY $ 134,314,185 $ 131,749,454
------------- ---------------
Page 2
BRUNSWICK BANCORP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
THREE MONTHS ENDED MARCH 31, 2005, 2004 AND 2003
UNAUDITED
2005 2004 2003
------------- ------------- -------------
INTEREST INCOME:
Interest on loans $ 1,276,053 $ 1,197,407 $ 1,333,746
Interest on investments 304,611 329,967 336,919
Interest on Federal funds sold 103,352 29,205 53,034
Interest on deposits with banks -- 3,952 --
------------- ------------- -------------
Total interest income 1,684,016 1,560,531 1,723,699
------------- ------------- -------------
INTEREST EXPENSE:
Interest on deposits 83,505 76,652 143,416
Interest on borrowed funds 755 483 525
------------- ------------- -------------
Total interest expense 84,260 77,135 143,941
------------- ------------- -------------
Net interest income 1,599,756 1,483,396 1,579,758
Provision for credit losses 45,000 45,000 75,000
------------- ------------- -------------
Net interest income after provision for credit losses 1,554,756 1,438,396 1,504,758
------------- ------------- -------------
OTHER INCOME:
Service fees 230,749 234,163 217,732
Other income 10,460 7,150 6,630
------------- ------------- -------------
Total other income 241,209 241,313 224,362
------------- ------------- -------------
OTHER EXPENSES:
Salaries and wages 480,982 455,311 451,471
Employee benefits 206,032 219,734 194,353
Occupancy expenses 232,280 202,014 190,581
Equipment expenses 49,032 41,336 41,364
Other expenses 269,304 259,467 261,309
------------- ------------- -------------
Total other expenses 1,237,630 1,177,862 1,139,078
------------- ------------- -------------
Income before income tax expense 558,335 501,847 590,042
Income tax expense 272,088 235,000 273,300
------------- ------------- -------------
NET INCOME $ 286,247 $ 266,847 $ 316,742
------------- ------------- -------------
NET INCOME PER SHARE:
Basic earnings per share $ 0.11 $ 0.11 $ 0.13
------------- ------------- -------------
Diluted earnings per share $ 0.11 $ 0.10 $ 0.13
------------- ------------- -------------
Average shares outstanding-basic 2,542,916 2,499,540 2,444,021
------------- ------------- -------------
Average shares outstanding-diluted 2,637,048 2,608,223 2,502,809
------------- ------------- -------------
Page 3
BRUNSWICK BANCORP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
THREE MONTHS ENDED MARCH 31, 2005, 2004 AND 2003
UNAUDITED
DEFERRED
COMMON RETAINED STOCK TREASURY
STOCK SURPLUS EARNINGS COMPENSATION STOCK TOTAL
----------- ------------ ------------- ------------ ------------- --------------
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
----------- ------------ ------------- ------------ ------------- --------------
Balance, December 31, 2004 $ 4,369,494 $ 3,437,550 $ 25,759,478 $ -602,000 $ -146,107 $ 32,818,415
Net income -- -- 286,247 -- -- 286,247
Stock split 728,608 -728,608 -- -- -- --
Amortization of deferred
stock compensation -- -- -- 26,325 -- 26,325
Proceeds from issuance of
stock-stock option plan -- -- -- -- 57,516 57,516
Tax benefit from stock
option plan -- 11,793 -- -- -- 11,793
----------- ------------ ------------- ------------ ------------- --------------
Balance, March 31, 2005 $ 5,098,102 $ 2,720,735 $ 26,045,725 $ -575,675 $ -88,591 $ 33,200,296
----------- ------------ ------------- ------------ ------------- --------------
Page 4
BRUNSWICK BANCORP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED MARCH 31, 2005, 2004 AND 3003
UNAUDITED
2005 2004 2003
------------ ------------- -------------
OPERATING ACTIVITIES:
Net income $ 286,247 $ 266,847 $ 316,742
Adjustments to reconcile net income to cash
provided by operating activities:
Provision for credit losses 45,000 45,000 75,000
Depreciation and amortization 37,855 30,061 31,690
Net accretion of securities discounts -- -5,008 -32,259
Amortization of deferred stock compensation 26,325 26,325 26,325
Tax benefit from stock option plan 11,793 -- --
Net change in:
Accrued interest receivable 124,790 59,369 226,720
Accrued interest payable 39,565 3,539 -4,660
Other assets -10,335 -113,734 -47,434
Other liabilities 524,709 277,988 213,680
------------ ------------- -------------
Net cash provided by operating activities 1,085,949 590,387 805,804
------------ ------------- -------------
INVESTING ACTIVITIES:
Maturities of investment securities -- 23,000,000 13,000,000
Principal repayments on investment securities 3,500,000 91,094 14,713
Purchases of investment securities -- -23,300,000 -5,000,000
Net change in loans receivable -5,348,146 1,188,112 -4,887,588
Acquisitions of premises and equipment -- -37,684 -40,584
Proceeds from sales of premises and equipment -- -- --
------------ ------------- -------------
Net cash provided by (used in) investing activities -1,848,146 941,522 3,086,541
------------ ------------- -------------
FINANCING ACTIVITIES:
Proceed from issuance of stock-stock option plan 57,516 364,055 --
Net increase (decrease) in non-interest bearing deposits 5,695,406 -55,692 -2,237,180
Net increase (decrease) in interest bearing deposits -4,044,294 -6,154,164 -8,731,017
Net increase (decrease) in borrowed funds -32,536 -118,514 -496,810
------------ ------------- -------------
Net cash provided by (used in) financing activities 1,676,092 -5,964,315 -11,465,007
------------ ------------- -------------
Net increase (decrease) in cash and cash equivalents 913,895 -4,432,406 -7,572,662
Cash and cash equivalents at January 1 28,904,689 25,842,265 33,629,080
------------ ------------- -------------
Cash and cash equivalents at March 31 $ 29,818,584 $ 21,409,859 $ 26,056,418
------------ ------------- -------------
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, 2005
BOOK MARKET
VALUE VALUE
-------------- -----------------
U.S. Government and agency securities $ 29,105,000 $ 28,408,813
Other securities 1,900,000 1,900,000
-------------- -----------------
$ 31,005,000 $ 30,308,813
-------------- -----------------
DECEMBER 31, 2004
BOOK MARKET
VALUE VALUE
-------------- -----------------
U.S. Government and agency securities $ 29,105,000 $ 28,829,213
Other securities 5,400,000 5,368,750
-------------- -----------------
$ 34,505,000 $ 34,197,963
-------------- -----------------
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
2005 2004
---------------- ---------------
Commercial loans $ 48,548,002 $ 44,835,243
Real estate loans 22,579,799 20,925,029
Consumer loans 825,531 860,921
---------------- ---------------
71,953,332 66,621,193
Less:
Allowance for credit losses 844,832 800,000
Unearned income 129,566 145,405
---------------- ---------------
$ 70,978,934 $ 65,675,788
---------------- ---------------
NOTE 4
PREMISES AND EQUIPMENT
The major components of premises and equipment are as follows:
MARCH 31 DECEMBER 31
2005 2004
---------------- ---------------
Land $ 300,705 $ 300,705
Bank premises 646,826 646,826
Leasehold improvements 232,594 232,594
Furniture and equipment 1,364,200 1,364,200
---------------- ---------------
2,544,325 2,544,325
Less accumulated depreciation and amortization 1,589,270 1,551,415
---------------- ---------------
$ 955,055 $ 992,910
---------------- ---------------
Page 7
BRUNSWICK BANCORP AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS
MARCH 31, 2005
The most noticeably changes in the Corporation's Balance Sheet since December
31, 2004 are a decrease in investment securities of $3,500,000 and an increase
in loans of $5,300,000.
The main reason for these changes is the reclassification of corporate
securities totaling $3,500,000 as loans. Taking this into consideration, the net
acquisition of new loans amounted to approximately $1,800,000.
The allowance for credit losses increased by $45,000, which was due to credit
loss provisions. At March 31, 2005 the allowance for credit losses totaled
$844,832 which represented 19% of all loans that were past due or in nonaccrual.
Stockholders' equity increased by approximately $370,000 mainly because of the
addition of current earnings totaling $286,000. For additional information,
refer to the Consolidated Statements of Stockholders' Equity on page 3. The
Corporation continues to be classified as "Well Capitalized". At March 31, 2005
our risk-based capital ratio was 41.7% which is over five times the regulatory
requirement.
The results of operations for the first quarter of 2005, compared to the same
period of 2004, show a slight increase in income before taxes of approximately
$56,000.
Although interest rates on the average were lower during the current period,
increased volume brought about increases in interest income and expense of
$123,000 and $7,000, respectively. The resulting $116,000 increase in net
interest income is analyzed in detail on page 8.
Finally, there was no change non-interest income and non-interest expenses
increased by $60,000.
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 8
BRUNSWICK BANCORP AND SUBSIDIARIES
ANALYSIS OF CHANGES IN NET INTEREST INCOME
Increase (Decrease) Due to Changes in
-------------------------------------------
Volume Rates Total
-------- ------- ---------
Three Months Ended March 31, 2005
Versus
Three Months Ended March 31, 2004
Interest income on:
Loans receivable $ 179 $ -100 $ 79
Securities held to maturity 28 -54 -26
Federal funds sold 12 58 70
-------- ------- ---------
Total interest income 219 -96 123
-------- ------- ---------
Interest expense on:
Deposits 14 -7 7
Borrowed funds -1 1 ---
-------- ------- ---------
Total interest expense 13 -6 7
-------- ------- ---------
Net interest income $ 206 $ -90 $ 116
-------- ------- ---------
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, 2005.
Page 10
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
04/21/05 Carmen J. Gumina
-------- -------------------------
Date Carmen J. Gumina, CEO
04/21/05 Thomas Fornale
-------- -------------------------
Date Thomas Fornale, Treasurer