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 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20200131005444/en/
Brunswick Bancorp
Nicholas A. Frungillo, Jr. - President / COO
David Gazerwitz - VP / Treasurer
732-247-5800