Business Wire | Oct 23, 2020 10:58AM EDT

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

Oct. 23, 2020

NEW BRUNSWICK, N.J.--(BUSINESS WIRE)--Oct. 23, 2020--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 BRUNSWICKBANCORP ANDSUBSIDIARIESCONSOLIDATEDBALANCE SHEETSEPTEMBER 30, September 30, December 31, September 30,2020 and 2019 (UNAUDITED) 2020 2019 2019

ASSETSCash and due $ $ $ 15,615,595 from banks 30,249,794 18,232,092

Securities held 5,274,084 to maturity, at 3,870,235 4,947,028amortized costSecurities available for 29,784,380 6,091,955 6,181,905 sale, at fairmarket valueRestricted 799,800 bank stock, at 952,900 313,800costLoans 189,872,807 receivable, 225,289,973 194,590,692netPremises and 3,766,456 equipment, net 4,693,502 4,899,205

Accrued 699,836 interest 885,621 678,059receivableOther real 5,373,664 estate 5,496,201 5,373,664

4,645,674 Other assets 5,923,194 4,657,101

TOTAL ASSETS $ 307,145,800 $ 239,783,596 $ 232,229,820

LIABILITIESANDSTOCKHOLDERS'EQUITYDepositsNon-interest $ $ $ 48,012,279 bearing 56,817,165 45,155,982

Interest 125,757,171 bearing 177,903,559 148,944,198

Total 173,769,450 deposits 234,720,724 194,100,180

Borrowed 14,000,000 funds 28,422,557 3,200,000

Accrued 367,664 interest 994,005 493,421payableAdvances from borrowers for 974,256 1,300,744 1,361,250 taxes andinsuranceOther 3,798,985 liabilities 1,794,052 1,317,985

TOTAL 193,297,349 LIABILITIES 266,905,594 200,412,329

STOCKHOLDERS'EQUITYPreferredstock-nostated value10,000,000sharesauthorized andno sharesissued andoutstanding atSeptember 30,2020.Common stock -no par value10,000,000sharesauthorized;3,036,603shares issuedat September30, 2020 and2019and December31, 2019Additional 7,680,857 paid-in 7,772,850 7,699,758capitalOther ) ) (26,742 )Comprehensive (72,890 (18,335LossRetained 32,898,566 earnings 34,155,707 33,310,055

Treasury stock at cost, - 224,557 and225,057 shares,at September 30, 2020 and (1,615,460 ) (1,620,210 ) (1,620,210 )2019, and225,057shares atDecember 31,2019.TOTAL 38,932,471 STOCKHOLDERS' 40,240,206 39,371,267EQUITYTOTALLIABILITIES AND $ 307,145,800 $ 239,783,596 $ 232,229,820 STOCKHOLDERS'EQUITY Book Value $ $ $ 13.80 per share 14.31 14.00

BRUNSWICK BANCORP AND SUBSIDIARIESCONSOLIDATED STATEMENT OF INCOMENINE MONTHS ENDED SEPTEMBER 30, 2020 and 2019 (UNAUDITED)September 30,2020

2019

INTEREST INCOMEInterest and fees on loans$

8,104,738

$

7,444,158

Interest on investments222,230

167,065

Interest on balances with banks77,062

135,118

TOTAL INTEREST INCOME8,404,031

7,746,341

INTEREST EXPENSEInterest on deposits1,777,678

1,664,056

Interest on borrowed funds141,081

93,973

Total interest expense1,918,759

1,758,029

NET INTEREST INCOME6,485,272

5,988,312

Provision for loan losses320,000

-

NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES6,165,272

5,988,312

OTHER INCOMEService fees511,823

631,482

Gain on sale of OREO(60,734

)

-

Gain on sale securities AFS159,183

Gain on sale of assets-

111,823

Other income266,838

243,387

TOTAL OTHER INCOME877,110

986,692

OTHER EXPENSESSalaries and employee benefits3,397,708

3,134,697

Occupancy expenses623,274

980,891

Equipment expenses139,186

128,125

Other expenses1,771,000

1,549,064

TOTAL OTHER EXPENSES5,931,167

5,792,776

INCOME BEFORE INCOME TAX EXPENSE1,111,214

1,182,228

Income tax expense265,562

326,515

NET INCOME$

845,652

$

855,713

Earnings per share$

0.30

$

0.30

Earnings per share (Diluted)$

0.30

$

0.30

BRUNSWICKBANCORP ANDSUBSIDIARIESCONSOLIDATEDSTATEMENT OFINCOMENINE MONTHSENDEDSEPTEMBER 30, September 30,2020 and 2019(UNAUDITED) 2020 2019

INTERESTINCOMEInterest $ 8,104,738 $ 7,444,158and fees onloansInterest on 222,230 167,065investmentsInterest on 77,062 135,118balanceswith banksTOTAL 8,404,031 7,746,341INTERESTINCOME INTERESTEXPENSEInterest on 1,777,678 1,664,056depositsInterest on 141,081 93,973borrowedfundsTotal 1,918,759 1,758,029interestexpense NET 6,485,272 5,988,312INTERESTINCOMEProvision 320,000 for loan -losses NET INTERESTINCOME AFTER 6,165,272 5,988,312PROVISION FORLOAN LOSSES OTHERINCOMEService 511,823 631,482feesGain on (60,734 ) sale of -OREOGain onsale 159,183 securitiesAFSGain on 111,823sale of -assetsOther 266,838 243,387incomeTOTAL OTHER 877,110 986,692INCOME OTHEREXPENSESSalaries and 3,397,708 3,134,697employeebenefitsOccupancy 623,274 980,891expensesEquipment 139,186 128,125expensesOther 1,771,000 1,549,064expensesTOTAL OTHER 5,931,167 5,792,776EXPENSES INCOMEBEFORE 1,111,214 1,182,228INCOME TAXEXPENSEIncome tax 265,562 326,515expenseNET INCOME $ 845,652 $ 855,713

Earnings $ 0.30 $ 0.30per shareEarnings per $ 0.30 $ 0.30share(Diluted)BRUNSWICK BANCORP AND SUBSIDIARIESCONSOLIDATED STATEMENT OF INCOMEQUARTER ENDED SEPTEMBER 30, 2020 and 2019 (UNAUDITED)September 30,2020

2019

INTEREST INCOMEInterest and fees on loans$

2,737,361

$

2,756,048

Interest on investments95,554

51,810

Interest on balances with banks17,768

23,153

TOTAL INTEREST INCOME2,850,683

2,831,012

INTEREST EXPENSEInterest on deposits515,454

584,904

Interest on borrowed funds63,579

67,686

Total interest expense579,033

652,591

NET INTEREST INCOME2,271,649

2,178,421

Provision for loan losses150,000

-

NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES2,121,649

2,178,421

OTHER INCOMEService fees161,408

199,948

Gain on sale of OREO(60,734

)

-

Gain on sale securities AFS26,560

-

Gain on sale of assets-

111,823

Other income101,433

108,215

TOTAL OTHER INCOME228,667

419,987

OTHER EXPENSESSalaries and employee benefits1,087,276

1,096,696

Occupancy expenses188,050

302,568

Equipment expenses45,947

44,708

Other expenses622,534

544,953

TOTAL OTHER EXPENSES1,943,807

1,988,925

INCOME BEFORE INCOME TAX EXPENSE406,509

609,483

Income tax expense101,505

165,016

NET INCOME$

305,004

$

444,467

Earnings per share$

0.11

$

0.16

Earnings per share (Diluted)$

0.11

$

0.16

View source version on businesswire.com: https://www.businesswire.com/news/home/20201023005370/en/

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

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