Brunswick Bancorp Reports 2020 Year to Date and Third Quarter Financial Results

NEW BRUNSWICK, N.J.--()--Brunswick Bancorp (“Brunswick” or “the Company") (OTC: “BRBW”), the holding company for Brunswick Bank and Trust (“the Bank”), today reported its financial results for the period ended September 30, 2020.

Financial Highlights:

  • Total assets increased 28.09% to $307.1 million from December 31, 2019;
  • Loan portfolio increased 15.78% to $225.3 million from December 31, 2019;
  • Deposits increased 20.93% to $234.7 million from December 31, 2019;
  • Year over year income decreased from $856 thousand for the nine months ended September 30,2019 to $846 thousand in the current period; and
  • Year over year income exclusive of non-core items increased to $980 thousand for the nine months ended September 30, 2020 compared to $616 in the year ago period.

“Brunswick delivered another solid performance in the third quarter by continuing to grow our assets, loans, deposits and net income excluding non-core items,” said Nicholas A. Frungillo, Jr., President and Chief Operating Officer. “We continue to benefit from our increased development and marketing efforts, participation in the Paycheck Protection Program, opportunistic deployment of excess liquidity and repositioning of our investment portfolio. These actions have allowed us to improve revenue and results, while taking prudent action to protect Brunswick Bank and its loan portfolio in the light of continued uncertainty due to COVID-19. We are confident Brunswick’s ability to continue to grow and succeed as the pandemic subsides.”

Mr. Frungillo continued, “We are proud of the work Brunswick Bank and our employees have done to support our local community during the COVID-19 pandemic. In addition to continuing to safely serve our customers, we assisted local businesses by executing 125 loans totaling approximately $11 million through the PPP loan program. We are committed to continuing to operate in a manner that protects them and our employees.”

Financial Summary for the Nine Months ending September 30, 2020

At September 30, 2020, the Company had total assets of $307.1 million, an increase of $67.4 million or 28.09% over the December 31, 2019 total of $239.8 million. The growth was mainly driven by management’s previously implemented business development initiatives. Cash and due from banks was $30.2 million at September 30, 2020, an increase of $12.0 million or 65.92% over year-end as excess cash was held pending deployment into higher earning investments and loans. The loan portfolio grew to $225.3 million at September 30, 2020, an increase of $30.7 million or 15.78% since December 31, 2019. Growth was primarily in loans secured by commercial real estate and the addition of $11.0 million in PPP loans. Securities increased to $33.7 million, up $22.6 million, or 204.87%, from the $11.0 million balance at December 31, 2019, as the Bank used excess liquidity to purchase securities to increase its yield over the fed funds rate.

Deposits grew to $234.7 million at September 30, 2020, an increase of $40.6 million, or 20.93%, from December 31, 2019 as a result of management’s increased marketing efforts coupled with $10 million in brokered certificates of deposits which had significantly lower rates than those available in the retail market for three to five year deposits. FHLB borrowing increased by $13.5 million to $16.7 million at September 30, 2020 as the Bank locked in longer-term borrowings at lower rates than retail deposits. The Bank also was able to enter the Federal Reserve Bank’s PPPLF program, which allows the Bank to fund its PPP loans at a cost of 35 basis points for up to 2 years, matching the maturity of the PPP loans.

Stockholders’ equity increased by $869 thousand to $40.2 million due to earnings retention net of the change in unrealized losses. The Bank meets all criteria to be considered “Well Capitalized”.

The Bank’s Net Interest Margin was 3.48% for the nine months ended September 30, 2020 compared to 4.06% at September 30, 2019. The Bank’s cost of deposits decreased to 1.42% for the nine months ended September 30, 2020 from 2.06% for the comparative period in 2019. The Bank’s yield on interest earning assets decreased to 4.54% for the nine months ended September 30, 2020 from 5.31% for the same period last year, reflecting lower market rates of interest.

Net interest income was $6.485 million for the nine months ended September 30, 2020, an increase of $497 thousand, or 8.30%, from $5.988 million for the comparable period of 2019. Loan interest income grew to $8.105 million for the nine months ending September 30, 2020, an increase of $661 thousand, or 8.87%, from $7.444 million for the same period a year ago due to higher outstanding balances. Interest expense was $1.919 million for the nine months ended September 30, 2020, an increase of $161 thousand, or 9.14%, when compared to $1.758 million for the same period a year ago due to a higher level of deposits.

Total other income was $877 thousand for the nine months ended September 30, 2020, a decrease of $110 thousand, or 11.11% over the same period a year ago. During the period, the Company realized $159 thousand in gains on securities as the Company repositioned its investment portfolio. The securities sold were replaced by similar securities with essentially the same effective duration and a nominally higher yield. Service fees on deposit accounts decreased by $120 thousand or 18.95% for the nine months ended September 30, 2020, when compared to the same period a year ago due to reduced activity from COVID-19. Net OREO write-downs of $60 thousand were recorded in the nine months ended September 30, 2020.

Total non-interest expenses were $5.931 million for the nine months ended September 30, 2020, an increase of $138 thousand, or 2.39% over the same period a year ago. Salaries increased by $263 thousand for the nine months ended September 30, 2020 compared to the same period last year due to additions in staff. Occupancy expenses declined to $623 thousand, a reduction of $358 thousand from the same period a year ago, as the Bank closed its Englishtown office on May 31, 2019 and purchased its Main office on Livingston Avenue in New Brunswick, New Jersey in the fourth quarter of 2019. Other expenses grew by $222 thousand to $1.771 million for the nine months ended September 30, 2020 compared to $1.549 million for the same period a year ago, as the Bank has experienced an increase in Legal and Professional fees.

Provisions for loan losses was $320 thousand for the nine months ended September 30, 2020 as compared to no provision during the same period a year ago. The Company believes this increase is prudent given the impact of the COVID-19 pandemic on the local economy and customers. Management is actively monitoring the Bank’s loan portfolio in light of the continued uncertainty and may increase provisions for loan losses in the future.

Net income was $846 thousand for the nine months ended September 30, 2020 compared to $856 thousand for the same period a year ago, a decrease of $10 thousand or 1.18%. Income excluding non-core items (both income and expense) was $980 thousand for the nine month period ended September 30, 2020, compared to $616 thousand in the year ago period, an increase of $364 thousand, or 59.12%. Management considers income excluding none-core items to be a useful metric, as it helps in understanding the strength of the Company’s ongoing business. The table below sets forth the non-core items for the nine months ended September 30, 2020 and 2019:

 

2020

2019

Income before income tax

1,111

1,182

Provision for loan losses

320

-

Security gains

(159)

-

OREO valuation

60

-

Gain on sale other assets

-

(112)

Non-Accrual Income - Recovered

-

(185)

Cash Surrender Value Life Ins.

-

(34)

Total

1,332

851

Tax effect

352

235

Operating income

980

616

Financial Summary for the Three Months ended September 30, 2020

Net interest income was $2.272 million for the three months ended September 30, 2020, an increase of $93 thousand, or 4.28%, from $2.178 million for the same period a year ago. Loan interest income was $2.737 million for the three months ending September 30, 2020, basically unchanged from $2.756 million for the same period a year ago due to a one-time benefit in the prior year of $185 thousand primarily due to the payoff of a nonaccrual loan, as all interest owed and previously not recorded was recovered. Interest expense was $579 thousand for the three months ended September 30, 2020, a decrease of $74 thousand, or 11.27% when compared to $652 thousand for the same period a year ago, primarily due to lower market rates.

Total other income was $229 thousand for the three months ended September 30, 2020, a decrease of $191 thousand or 45.55% when compared to $420 thousand for the same period a year ago. During the current period, the Company realized $26 thousand in gains on securities as the Company repositioned its investment portfolio, as discussed above, along with net write-downs of $61 thousand on our OREO, while the prior period included a $111 thousand gain on sale of other assets, which did not reoccur in 2020. Service fees on deposit accounts decreased by $39 thousand or 19.28% for the three months ended September 30, 2020, when compared to $200 thousand for the same period a year ago due to reduced activity from COVID-19.

Total non-interest expenses were $1.944 million for the three months ended September 30, 2020, a decrease of $45 thousand, or 2.27% when compared to $1.989 million for the same period a year ago. Salaries decreased by $9 thousand to $1.087 million for the three months ended September 30, 2020 when compared to $1.097 million for the same period a year ago. Occupancy expenses decreased to $188 thousand, a reduction of $115 thousand from $303 thousand for the same period a year ago due to the closing of our Englishtown branch and the purchase of our Livingston Avenue branch. Other expenses grew by $78 thousand to $623 thousand for the three months ended September 30, 2020 when compared to $545 thousand for the same period last year as the Bank has experienced an increase in Legal and Professional fees.

Provisions for loan losses were $150 thousand for the three months ended September 30, 2020 compared to no provisions in the comparable year ago period. The Company believes this increase is prudent given the impact of the COVID-19 pandemic on the local economy and customers. Management is actively monitoring the Bank’s loan portfolio in light of the continued uncertainty and may increase provisions for loan losses in the future.

Net income was $305 thousand for the three months ended September 30, 2020 compared to $444 thousand for the same period a year ago, a decrease of $139 thousand or 31.38%.

Operations During COVID-19 Pandemic

As previously disclosed, the Company reopened all of its branches on July 6, 2020, with the exception of our George Street, New Brunswick Branch that will remain temporarily closed until December 11, 2020, when it is expected to permanently close. Branch lobbies are open on a limited basis following the CDC and the State of New Jersey guidelines. In addition, to assist customers, the Bank participated in the PPP loan program as a lender. At the inception of the Covid-19 pandemic, in accordance with state and Federal guidance, the Bank provided payment deferrals to borrowers on 74 loans totaling $53.482 million in principal amount. At September 30, 2020, six of these loans with a principal balance of $5.0 million remain on deferral.

Use of Non-GAAP Financial Measures

In addition to the results presented in accordance with Generally Accepted Accounting Principles ("GAAP"), the Company routinely supplements its evaluation with an analysis of certain non-GAAP measures. The Company believes these non-GAAP financial measures, in addition to the related GAAP measures, provide meaningful information to investors in understanding our operating performance and trends. These non-GAAP measures have inherent limitations and are not required to be uniformly applied and are not audited. They should not be considered in isolation or as a substitute for an analysis of results reported under GAAP. These non-GAAP measures may not be comparable to similarly titled measures reported by other companies. Reconciliations of non-GAAP financial measures disclosed in this earnings release to the comparable GAAP measures are provided above.

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, and the impact of the Covid-19 pandemic on the Company, the Bank and its customers. 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.

About Brunswick Bancorp

Brunswick Bancorp is the holding company for Brunswick Bank & Trust, a New Jersey chartered commercial bank which serves central New Jersey through its New Brunswick main office and five additional branch offices.

 
BRUNSWICK BANCORP REPORTS SEPTEMBER 30, 2020 RESULTS
 
 
BRUNSWICK BANCORP AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
SEPTEMBER 30, 2020 and 2019  (UNAUDITED)

September 30,

 

December 31,

 

September 30,

 

2020

 

 

 

2019

 

 

 

2019

 

ASSETS
Cash and due from banks

 $

              30,249,794

 

 $

                 18,232,092

 

 $

       15,615,595

 

Securities held to maturity, at amortized cost

 

                   3,870,235

 

 

                      4,947,028

 

 

            5,274,084

 

Securities available for sale, at fair market value

 

                 29,784,380

 

 

                      6,091,955

 

 

            6,181,905

 

Restricted bank stock, at cost

 

                       952,900

 

 

                         313,800

 

 

                799,800

 

Loans receivable, net

 

               225,289,973

 

 

                  194,590,692

 

 

        189,872,807

 

Premises and equipment, net

 

                   4,693,502

 

 

                      4,899,205

 

 

            3,766,456

 

Accrued interest receivable

 

                       885,621

 

 

                         678,059

 

 

                699,836

 

Other real estate

 

                   5,496,201

 

 

                      5,373,664

 

 

            5,373,664

 

Other assets

 

                   5,923,194

 

 

                      4,657,101

 

 

            4,645,674

 

TOTAL ASSETS

 $

            307,145,800

 

 $

              239,783,596

 

 $

     232,229,820

 

LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits
Non-interest bearing

 $

              56,817,165

 

 $

                 45,155,982

 

 $

       48,012,279

 

Interest bearing

 

               177,903,559

 

 

                  148,944,198

 

 

        125,757,171

 

Total deposits

 

               234,720,724

 

 

                  194,100,180

 

 

        173,769,450

 

Borrowed funds

 

                 28,422,557

 

 

                      3,200,000

 

 

          14,000,000

 

Accrued interest payable

 

                       994,005

 

 

                         493,421

 

 

                367,664

 

Advances from borrowers for taxes and insurance

 

                       974,256

 

 

                      1,300,744

 

 

            1,361,250

 

Other liabilities

 

                   1,794,052

 

 

                      1,317,985

 

 

            3,798,985

 

TOTAL LIABILITIES

 

               266,905,594

 

 

                  200,412,329

 

 

        193,297,349

 

STOCKHOLDERS' EQUITY
Preferred stock-no stated value
10,000,000 shares authorized and no shares
issued and outstanding at September 30, 2020.
Common stock - no par value
10,000,000 shares authorized;
3,036,603 shares issued at September 30, 2020 and 2019
and December 31, 2019
Additional paid-in capital

 

                   7,772,850

 

 

                      7,699,758

 

 

            7,680,857

 

Other Comprehensive Loss

 

                       (72,890

)

 

                          (18,335

)

 

                (26,742

)

Retained earnings

 

                 34,155,707

 

 

                    33,310,055

 

 

          32,898,566

 

Treasury stock at cost, 224,557 and 225,057 shares,

 

                          -

 

at September 30, 2020 and 2019, and 225,057

 

                  (1,615,460

)

 

                    (1,620,210

)

 

           (1,620,210

)

shares at December 31, 2019.
TOTAL STOCKHOLDERS' EQUITY

 

                 40,240,206

 

 

                    39,371,267

 

 

          38,932,471

 

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

 $

            307,145,800

 

 $

              239,783,596

 

 $

     232,229,820

 

 
Book Value per share

 $

                        14.31

 

 $

                          14.00

 

 $

                 13.80

 

 
 
BRUNSWICK BANCORP AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
NINE MONTHS ENDED SEPTEMBER 30, 2020 and 2019 (UNAUDITED) September 30,

 

2020

 

 

2019

INTEREST INCOME
Interest and fees on loans

 $

                8,104,738

 

 $

                   7,444,158

Interest on investments

 

                       222,230

 

 

                         167,065

Interest on balances with banks

 

                         77,062

 

 

                         135,118

TOTAL INTEREST INCOME

 

                   8,404,031

 

 

                      7,746,341

 
INTEREST EXPENSE
Interest on deposits

 

                   1,777,678

 

 

                      1,664,056

Interest on borrowed funds

 

                       141,081

 

 

                           93,973

Total interest expense

 

                   1,918,759

 

 

                      1,758,029

 
NET INTEREST INCOME

 

                   6,485,272

 

 

                      5,988,312

Provision for loan losses

 

                       320,000

 

 

                                      -

 
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES

 

                   6,165,272

 

 

                      5,988,312

 
OTHER INCOME
Service fees

 

                       511,823

 

 

                         631,482

Gain on sale of OREO

 

                       (60,734

)

 

                                      -

Gain on sale securities AFS

 

                       159,183

 

Gain on sale of assets

 

                                   -

 

 

                         111,823

Other income

 

                       266,838

 

 

                         243,387

TOTAL OTHER INCOME

 

                       877,110

 

 

                         986,692

 
OTHER EXPENSES
Salaries and employee benefits

 

                   3,397,708

 

 

                      3,134,697

Occupancy expenses

 

                       623,274

 

 

                         980,891

Equipment expenses

 

                       139,186

 

 

                         128,125

Other expenses

 

                   1,771,000

 

 

                      1,549,064

TOTAL OTHER EXPENSES

 

                   5,931,167

 

 

                      5,792,776

 
INCOME BEFORE INCOME TAX EXPENSE

 

                   1,111,214

 

 

                      1,182,228

Income tax expense

 

                       265,562

 

 

                         326,515

NET INCOME

 $

                   845,652

 

 $

                      855,713

 
Earnings per share

 $

                          0.30

 

 $

                            0.30

Earnings per share (Diluted)

 $

                          0.30

 

 $

                            0.30

 
BRUNSWICK BANCORP AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
QUARTER ENDED SEPTEMBER 30, 2020 and 2019 (UNAUDITED) September 30,

 

2020

 

 

2019

INTEREST INCOME
Interest and fees on loans

 $

                2,737,361

 

 $

                   2,756,048

Interest on investments

 

                         95,554

 

 

                           51,810

Interest on balances with banks

 

                         17,768

 

 

                           23,153

TOTAL INTEREST INCOME

 

                   2,850,683

 

 

                      2,831,012

 
INTEREST EXPENSE
Interest on deposits

 

                       515,454

 

 

                         584,904

Interest on borrowed funds

 

                         63,579

 

 

                           67,686

Total interest expense

 

                       579,033

 

 

                         652,591

 
NET INTEREST INCOME

 

                   2,271,649

 

 

                      2,178,421

Provision for loan losses

 

                       150,000

 

 

                                      -

 
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES

 

                   2,121,649

 

 

                      2,178,421

 
OTHER INCOME
Service fees

 

                       161,408

 

 

                         199,948

Gain on sale of OREO

 

                       (60,734

)

 

                                      -

Gain on sale securities AFS

 

                         26,560

 

 

                                      -

Gain on sale of assets

 

                                   -

 

 

                         111,823

Other income

 

                       101,433

 

 

                         108,215

TOTAL OTHER INCOME

 

                       228,667

 

 

                         419,987

 
OTHER EXPENSES
Salaries and employee benefits

 

                   1,087,276

 

 

                      1,096,696

Occupancy expenses

 

                       188,050

 

 

                         302,568

Equipment expenses

 

                         45,947

 

 

                           44,708

Other expenses

 

                       622,534

 

 

                         544,953

TOTAL OTHER EXPENSES

 

                   1,943,807

 

 

                      1,988,925

 
INCOME BEFORE INCOME TAX EXPENSE

 

                       406,509

 

 

                         609,483

Income tax expense

 

                       101,505

 

 

                         165,016

NET INCOME

 $

                   305,004

 

 $

                      444,467

 
Earnings per share

 $

                          0.11

 

 $

                            0.16

Earnings per share (Diluted)

 $

                          0.11

 

 $

                            0.16

 

Contacts

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

Media
Paul Caminiti / Nicholas Leasure
Reevemark 212-433-4600

Contacts

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

Media
Paul Caminiti / Nicholas Leasure
Reevemark 212-433-4600