Brunswick Bancorp 2019 Year End Financial Results

NEW BRUNSWICK, N.J.--()--At December 31, 2019, the Company had total assets of $239.9 million, an increase of $35.9 million or 17.61% over the December 31, 2018 total of $203.9 million. The growth was mainly driven by strong loan demand due to increased marketing and business development efforts. Our loan portfolio grew to $194.6 million at December 31, 2019 an increase of $29.9 million or 18.15% over the prior year, primarily in the commercial real estate sector. Premises and equipment increased $3.9 million as the company purchased its main office in the 4th quarter for $3 million, which will help reduce its operating expense going forward, increase earnings and improve our efficiency ratio. Other assets primarily increased due to a $3 million Bank Owned Life Insurance policy purchased in 2019 designed to mitigate the cost of certain management retention programs and enhance our tax-free income.

On the liability side of the balance sheet, the deposits base grew to $194.1 million, an increase of $30.7 million or 18.79% from December 31, 2018. Non-interest bearing deposits were $45.2 million, an increase of 12.44%, while interest-bearing deposits grew to $148.9 million, an increase of $25.7 million or 20.86%. The increase was primarily in Money Market and Certificate of Deposit accounts due to our increased marketing efforts. The Company also reduced its use of Listing Services and Brokered accounts in connection with the increase of new core deposits resulting in a stronger deposit portfolio. Stockholders’ equity increased by $1.2 million to $39.8 million due to earnings retention net of the change in unrealized losses. Brunswick Bank and Trust meets all criteria to be considered ”Well Capitalized”.

The Bank’s Net Interest Margin decreased by 11 basis points, as the deposit landscape in our communities remains highly competitive. Our cost of deposits increased to 1.87% in 2019, compared to 1.39% in 2018 as higher market rates from the Federal Reserve rate increases in 2018 carried into 2019. Our yield on interest earning assets increased to 5.25% at December 31, 2019, an increase of 27 basis points from the December 31, 2018 yield of 4.98%.

Net interest income was $8.0 million at December 31, 2019, an increase of $725 thousand or 9.95% over December 31, 2018. Loan income grew to $10.1 million, an increase of $1.7 million or 20.83%. Total operating expenses grew to $7.5 million, an increase of $600 thousand over December 2018. This was primarily the result of a one-time credit before tax item in 2018 of $545 thousand discussed below which was not repeated in 2019.

Net income for the year ended December 31, 2019 was $1.267 million, virtually unchanged from 2018. However, in 2018 a one-time after tax reversal of $322 thousand of previously recognized expense on forfeited unvested shares of restricted stock was recorded in December 2018. Without this one-time adjustment, our net income for 2018 would have been $924 thousand compared to $1.267 million for 2019 an increase of $343 thousand or 37.12%.

The Company, led by its current management team is focused on increasing its revenue while reducing its operating expenses. During 2019, the Company closed its branch office in Englishtown, as the branch was unprofitable and purchased it main office on Livingston Avenue, both of which were leased from affiliated parties. These changes will help reduce our occupancy expenses going forward. The company also contracted with a Professional Employee Organization (PEO) for its medical and payroll services, further reducing expenses. Finally, in 2020, the Company hired a seasoned mortgage lender to begin a residential mortgage lending program, and we intend to begin offering Title Insurance through our Brunswick Title Agency, LLC in the second quarter. We believe these efforts will build on the momentum we created in 2019.

Forward-Looking Statements

In addition to historical information, this news release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 which are based on certain assumptions and describe future plans, strategies and expectations of the Company. These forward-looking statements are generally identified by use of the words “believe,” “expect,” “intend,” “anticipate,” “estimate,” “project,” “will,” “should,” “may,” “view,” “opportunity,” “potential,” or similar expressions or expressions of confidence. The Company’s ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors which could have a material adverse effect on the operations of the Company and its subsidiaries include, but are not limited to: changes in interest rates, general economic conditions, levels of unemployment in the Bank’s lending area, real estate market values in the Bank’s lending area, future natural disasters and increases to flood insurance premiums, the level of prepayments on loans and mortgage-backed securities, legislative/regulatory changes, monetary and fiscal policies of the U.S. Government including policies of the U.S. Treasury and the Board of Governors of the Federal Reserve System, the quality or composition of the loan or investment portfolios, demand for loan products, deposit flows, competition, demand for financial services in the Company’s market area, accounting principles and guidelines The Company does not undertake, and specifically disclaims any obligation, to publicly release the result of any revisions which may be made to any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.

BRUNSWICK BANCORP REPORTS DECEMBER 31, 2019 RESULTS
 
BRUNSWICK BANCORP AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
DECEMBER 31, 2019 and 2018 (UNAUDITED)

December 31,

2019

2018

ASSETS
Cash and due from banks

$

 

18,232,092

 

$

 

18,426,787

 

Securities held to maturity, at amortized cost

 

4,947,028

 

 

6,148,945

 

Securities available for sale, at fair market value

 

6,091,955

 

 

6,388,530

 

Restricted bank stock, at cost

 

313,800

 

 

204,700

 

Loans receivable, net

 

194,590,692

 

 

164,670,367

 

Premises and equipment, net

 

4,899,205

 

 

971,838

 

Accrued interest receivable

 

678,059

 

 

491,781

 

Other real estate

 

5,373,664

 

 

5,358,031

 

Other assets

 

4,657,101

 

 

1,223,188

 

TOTAL ASSETS

$

 

239,783,596

 

$

 

203,884,167

 

LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits
Non-interest bearing

$

 

45,155,982

 

$

 

40,172,171

 

Interest bearing

 

148,944,198

 

 

123,215,298

 

Total deposits

 

194,100,180

 

 

163,387,469

 

Borrowed funds

 

3,200,000

 

 

-

 

Accrued interest payable

 

493,421

 

 

473,864

 

Advances from borrowers for taxes and insurance

 

1,300,744

 

 

1,168,002

 

Other liabilities

 

1,317,985

 

 

654,379

 

TOTAL LIABILITIES

 

200,412,329

 

 

165,683,715

 

STOCKHOLDERS' EQUITY
Preferred stock-no stated value
10,000,000 shares authorized and no shares
issued and outstanding at December 31, 2019.
Common stock - no par value
10,000,000 shares authorized;
3,036,603 and 3,039,003 shares issued at
at December 31, 2019 and 2018.
Additional paid-in capital

 

7,699,758

 

 

7,627,433

 

Other Comprehensive Loss

 

(18,335

)

 

(142,939

)

Retained earnings

 

33,310,055

 

 

32,042,853

 

Treasury stock at cost, 225,057 and 195,597 shares,

 

-

 

at December 31, 2019 and 2018.

 

(1,620,210

)

 

(1,326,894

)

TOTAL STOCKHOLDERS' EQUITY

 

39,371,267

 

 

38,200,452

 

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$

 

239,783,596

 

$

 

203,884,167

 

BRUNSWICK BANCORP AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
YEAR ENDED DECEMBER 31, 2019 and 2018 (UNAUDITED)

December 31,

2019

 

2018

INTEREST INCOME
Interest and fees on loans

$

 

10,083,312

 

$

 

8,345,182

 

Interest on investments

 

217,000

 

 

248,397

 

Interest on balances with banks

 

152,605

 

 

205,876

 

TOTAL INTEREST INCOME

 

10,452,917

 

 

8,799,455

 

 
INTEREST EXPENSE
Interest on deposits

 

2,302,745

 

 

1,508,763

 

Interest on borrowed funds

 

139,511

 

 

3,129

 

Total interest expense

 

2,442,255

 

 

1,511,892

 

 
NET INTEREST INCOME

 

8,010,662

 

 

7,287,563

 

Provision for loan losses

 

-

 

 
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES

 

8,010,662

 

 

7,287,563

 

 
OTHER INCOME
Service fees

 

818,939

 

 

943,889

 

Gain on sale of loans

 

-

 

 

236,006

 

Gain on sale of OREO

 

-

 

 

(15,841

)

Gain on sale of assets

 

111,823

 

 

-

 

Other income

 

368,607

 

 

243,736

 

TOTAL OTHER INCOME

 

1,299,369

 

 

1,407,790

 

 
OTHER EXPENSES
Salaries and employee benefits

 

4,158,499

 

 

3,525,622

 

Occupancy expenses

 

1,123,254

 

 

1,342,028

 

Equipment expenses

 

186,715

 

 

190,285

 

Other expenses

 

2,072,544

 

 

1,871,920

 

TOTAL OTHER EXPENSES

 

7,541,012

 

 

6,929,856

 

 
INCOME BEFORE INCOME TAX EXPENSE

 

1,769,018

 

 

1,765,498

 

Income tax expense

 

501,817

 

 

519,430

 

NET INCOME

$

 

1,267,201

 

$

 

1,246,068

 

 
RATIOS
*** Efficiency Ratio

 

81.00

%

 

86.00

%

*** Return on Average Assets (ROAA)

 

0.59

%

 

0.51

%

Net Interest Margin

 

3.98

%

 

4.09

%

Book Value

$

 

14.00

 

$

 

13.69

 

 

***

Excludes one-time items previously discussed
 
BRUNSWICK BANCORP AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
QUARTER ENDED DECEMBER 31, 2019 and 2018 (UNAUDITED)

December 31,

2019

 

2018

INTEREST INCOME
Interest and fees on loans

$

 

2,639,155

$

 

2,321,751

 

Interest on investments

 

49,935

 

59,887

 

Interest on balances with banks

 

17,486

 

67,544

 

TOTAL INTEREST INCOME

 

2,706,576

 

2,449,183

 

 
INTEREST EXPENSE
Interest on deposits

 

638,688

 

466,145

 

Interest on borrowed funds

 

45,538

 

7

 

Total interest expense

 

684,226

 

466,152

 

 
NET INTEREST INCOME

 

2,022,349

 

1,983,031

 

Provision for loan losses

 

-

 

-

 

 
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES

 

2,022,349

 

1,983,031

 

 
OTHER INCOME
Service fees

 

187,457

 

242,424

 

Gain on sale of loans

 

-

 

-

 

Gain on sale of OREO

 

-

 

-

 

Gain on sale of assets

 

-

 

(11,000

)

Other income

 

125,220

 

81,383

 

TOTAL OTHER INCOME

 

312,677

 

312,807

 

 
OTHER EXPENSES
Salaries and employee benefits

 

1,023,803

 

523,756

 

Occupancy expenses

 

142,363

 

264,129

 

Equipment expenses

 

58,590

 

64,981

 

Other expenses

 

523,480

 

494,114

 

TOTAL OTHER EXPENSES

 

1,748,236

 

1,346,980

 

 
INCOME BEFORE INCOME TAX EXPENSE

 

586,790

 

948,859

 

Income tax expense

 

175,302

 

318,146

 

NET INCOME

$

 

411,488

$

 

630,713

 

 

Contacts

Brunswick Bancorp
Nicholas A. Frungillo, Jr. - President / COO
David Gazerwitz - VP / Treasurer
732-247-5800

Contacts

Brunswick Bancorp
Nicholas A. Frungillo, Jr. - President / COO
David Gazerwitz - VP / Treasurer
732-247-5800