BRBW - Brunswick Bancorp Reports 2020 First Quarter Financial Results

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 quarter ended March 31, 2020.

Financial Highlights for the First Quarter of 2020:

• Total assets increased 6.44% to $255.2 million from December 31, 2019;
• Loan portfolio increased 3.47% to $201.3 million from December 31, 2019; and
• Deposits increased 2.38% to $198.7 million from December 31, 2019.

“We are pleased with our performance during the quarter as our increased business development and marketing efforts enabled us to grow assets, loans and deposits,” said Nicholas A. Frungillo, Jr., President and Chief Operating Officer. “While the COVID-19 pandemic has impacted our business, the strategic initiatives implemented over the last year to improve top- and bottom-line performance and expand margins has Brunswick well positioned for near-term headwinds. Looking ahead, we are confident in Brunswick’s ability to succeed as the pandemic subsides.”

Mr. Frungillo continued, “I want to thank the employees of Brunswick Bank, who continue to work hard every day to support our local community during these uncertain and unprecedented times. We are committed to your safety and the safety of our customers.”

Financial Summary for the Quarter Ended March 31, 2020

At March 31, 2020, the Company had total assets of $255.2 million, an increase of $15.4 million or 6.44% over the December 31, 2019 total of $239.8 million. The growth was mainly driven by new loan demand as a result of management’s increased business development efforts. Cash and due from banks was $23.5 million at March 31, 2020, an increase of $5.2 million or 28.70% over year-end. The loan portfolio grew to $201.3 million at March 31, 2020, an increase of $6.8 million or 3.47% since December 31, 2019. Growth was primarily in loans secured by commercial real estate. Securities increased to $9.2 million, up $3.1 million, or 50.89%, from the balance at December 31, 2019 of $6.2 million, as the Bank used excess liquidity to purchase securities to increase its yield over the fed funds rate.

Deposits grew to $198.7 million at March 31, 2019, an increase of $4.6 million, or 2.38%, from December 31, 2019 as a result of management’s increased marketing efforts. Deposit growth during the quarter offset the repayment of $7.0 million of higher cost listing service deposits in March 2020, as management has focused on originating core deposits to strengthen the deposit portfolio and enhance franchise value. FHLB borrowing increased by $10.0 million to $13.2 million at March 31, 2020 as the Bank locked in long term borrowings at lower rates than retail deposits. Stockholders’ equity increased by $370 thousand to $39.8 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 3.70% for the three months ended March 31, 2020 compared to 3.95% at March 31, 2019. The Bank’s cost of deposits decreased to 1.68% at March 31, 2020 down from 1.77% for the comparative period in 2019. The Bank’s yield on interest earning assets decreased to 4.97% for the quarter ended March 31, 2020 from 5.10% for the same period last year.

Net interest income was $2.124 million for the three months ended March 31, 2020, an increase of $670 thousand, or 46.12%, from $1.454 million for the comparable period of 2019. Loan income grew to $2.717 million for the first quarter of 2020, an increase of $844 thousand, or 45.02%, from $1.873 million for the same period a year ago due to higher outstanding loans. Interest expense was $695 thousand for the quarter ended March 31, 2020, an increase of $169 thousand, or 32.14%, when compared to $526 thousand for the quarter ended March 31, 2019. Total non-interest expenses were $2.007 million, an increase of $137 thousand for the quarter ended March 31, 2020, an increase of $1.870 million for the same period a year ago. Salaries increased by $111 thousand for the quarter ended March 31, 2020 compared to the same period last year. Occupancy expenses declined to $235 thousand, a reduction of $102 thousand from the quarter ended March 31, 2019 as the Bank closed its Englishtown office on May 31, 2019 and purchased its Main office on Livingston Avenue in the fourth quarter of 2019. Other expenses grew by $118 thousand to $567 thousand for the quarter ended March 31, 2020 when compared to $337 thousand for the quarter ended March 31, 2019, as the Bank has experienced an increase in Legal and Professional fees.

Provisions for loan losses was $80 thousand for the quarter ended March 31, 2020 as compared to no provision during the same period a year ago. The Company believes the COVID-19 pandemic crises and its impact on its local economy and customers may result in larger provisions going forward. Management has increased its monitoring of the Bank’s loan portfolio in light of the uncertainty.

Net income was $231 thousand for the three months ended March 31, 2020 compared to $215 thousand for the quarter ended March 31, 2019. Income before income taxes and provision for loan losses was $380 thousand, an increase of $86 thousand, or 29.41%, over the same period a year ago.

Operations During COVID-19 Pandemic

Like virtually all companies, the COVID-19 pandemic crisis has impacted the Company and the Bank. To ensure the safety of our employees and customers, the Bank has temporarily closed its George Street facility on March 16, 2020. The George Street facility will be reopened under the CDC and the State of New Jersey guidelines. On April 16, 2020 Brunswick also temporarily closed its headquarters facility and main office located at 439 Livingston Avenue in New Brunswick. The Company anticipates reopening of the headquarters facility on or about May 1, 2020. The Bank continues to service its customers through drive-thru and ATM services at its other branches. Branch lobbies are open on an appointment basis only following the CDC and the State of New Jersey guidelines. In addition, to assist customers, the Bank is participating in the PPP loan program as a lender.

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.

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