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 September 30, 2022.

Financial Highlights:

• Total assets increased 2.54% to $381.6 million from December 31, 2021;
• Loan portfolio increased 8.29% to $299.4 million from December 31, 2021;
• Deposits increased 0.80% to $279.8 million from December 31, 2021;
• Net income per share increased to $0.98 per diluted share for the nine months ended September 30, 2022, up 27.04% compared to $0.76 per diluted share in the prior year period;
• Quarterly income per share increased to $0.32 per diluted share compared to $0.31 for the same period a year ago;
• Net income increased 31.36% to $2.798 million for the nine months ended September 30, 2022 compared to the same period a year ago;
• Third quarter net income increased 9.07% to $950 thousand for the three months ended September 30, 2022 compared to the same period a year ago;

“Brunswick’s business performed well in the third quarter, fueled by increases in assets, loans and deposits and resulting in significant growth in net income despite economic uncertainty and market pressures,” said Nicholas A. Frungillo, Jr., President and Chief Executive Officer of the Company and the Bank. “We continue to execute our strategic plan to drive top- and bottom-line growth, which we believe will enable Brunswick to build on our strong foundation and drive long-term shareholder value creation.”

Balance Sheet Summary for Comparable Quarter

At September 30, 2022, the Company had total assets of $381.6 million, an increase of $20.4 million or 5.66% over the September 30, 2021 balance of $361.2 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 $23.3 million at September 30, 2022, a decrease of $6.2 million or 21.11% from $29.6 million at September 30 last year as funds were used to fund our loan portfolio. The loan portfolio grew to $299.4 million at September 30, 2022 compared to September 30, 2021, an increase of $31.5 million or 11.77%. New loan originations were $104.5 million for the twelve months ending September 30, 2022, while loan payoffs/amortizations totaled $64.6 million, including $10.0 in PPP loans forgiven or paid off. PPP loans outstanding at September 30, 2022 were $603 thousand compared to $10.6 million a year ago. Securities decreased to $42.5 million, down $3.0 million or 6.50% from the balance at September 30, 2021 of $45.5 million.

All loans that were previously granted payment deferrals during the pandemic have returned to regularly scheduled principal and interest payments.

As previously reported, the Bank’s OREO balance consisted of a single property that was under contract of sale scheduled to close by December 2023, subject to certain contingencies. On July 1, 2022, the buyer purchased the property at a reduced purchase price and all contingencies were waived. Management believed it prudent to dispose of the property despite the reduced value in order to remove all of the uncertainties, contingencies and potential impacts due to the contingent nature of the sale agreement. With the property closing 18 months early, the Bank will reinvest the sale proceeds into earning assets, such as loans. The Bank recorded a $252 thousand pretax loss in its fiscal third quarter related to the sale.

Deposits were $279.8 million at September 30, 2022, an increase of $6.8 million or 2.49% from the September 30, 2021 balance of $273.0 million, due to marketing and business development efforts. FHLB borrowings increased to $54.7 million at September 30, 2022 from the September 30, 2021 balance of $31.7 million.

The provision for loan losses was $160 thousand for the nine months ended September 30, 2022 as compared $310 thousand for the same period a year ago. Management is actively monitoring the Bank’s loan portfolio in light of the continued economic uncertainty related to the COVID-19 pandemic and the current economic environment and may increase provisions for loan losses in the future. Stockholders’ equity decreased by $460 thousand to $43.1 million at September 30, 2022 as a result of earnings retention net of the change of unrealized losses and the $341 special dividend paid in February 2022. The Bank meets all criteria to be considered “Well Capitalized”.

The Bank’s Net Interest Margin was 3.88% for the nine months ended September 30, 2022 compared to 3.51% for the same period a year ago. The Bank’s cost of deposits decreased to 0.54% at September 30, 2022 from 0.61% from the same period a year ago. The Bank’s yield on interest earning assets increased to 4.36% for the nine months ended September 30, 2022 from 3.99% for the same period a year ago. The changes in the Bank’s yield on interest earning assets reflect the prevailing interest rate environment, while the decline in the cost of deposits reflects management’s continued implementation of the Bank’s strategic plan and changes in the composition of the deposit portfolio as well as the lagging effect of a rising interest rate environment on community bank deposits.

Balance Sheet Summary Compared to Year End 2021

At September 30, 2022, the Company had total assets of $381.6 million, an increase of $9.4 million or 2.54% from December 31, 2021. Cash and due from banks was $23.3 million at September 30, 2022, a decrease of $11.8 million over year-end balances as cash was deployed in higher earning assets. The loan portfolio grew to $299.4 million at September 30, 2022, an increase of $22.9 million since December 31, 2021. New loan originations were $67.9 million for the nine months ending September 30, 2022, while loan payoffs/amortizations totaled $38.7 million, of which $5.4 million represented the forgiveness or repayment of PPP loans. Securities increased to $42.5 million, an increase of $400 thousand from the balance at December 31, 2021 of $42.1 million.

Deposits were $279.8 million at September 30, 2022, an increase of $2.2 million or 0.80% from December 31, 2021. FHLB borrowings were $54.7 million at September 30, 2022 an increase of $13.0 million from the December 31, 2021 balance. Short term FHLB borrowings were utilized to fund the loan growth.

Stockholders’ equity decreased by $1.5 million to $43.1 million due to the $341 thousand special dividend that was paid in February 2022 and 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 3.88% for the nine months ended September 30, 2022 compared to 3.62% for the year ended December 31, 2021. The Bank’s cost of deposits decreased to 0.54% at September 30, 2022, down from 0.58% from December 31, 2021. The Bank’s yield on interest earning assets increased to 4.36% for the nine months ended September 30, 2022 from 4.09% for the year ended December 31, 2021. The changes in the Bank’s yield on interest earning assets reflect the prevailing interest rate environment, while the decline in the cost of deposits reflects management’s continued implementation of the Bank’s strategic plan, changes in the composition of the deposit portfolio and the lagging effect of interest rate changes on community bank deposits.

Financial Summary for the Nine Months ending September 30, 2022

Net interest income was $9.881 million for the nine months ended September 30, 2022, an increase of $1.399 million, or 16.49%, from $8.482 million for the comparable period of 2021. Loan income grew to $10.398 million for the nine months ended September 30, 2022, an increase of $1.116 million, or 12.02%, from $9.282 million for the same period a year ago. The increase was partially due to one-time recoveries of $302 thousand in non-accrual income in 2022, while the prior year showed a one-time gain of $75 thousand from recovery of non-accrual income, along with higher outstanding loan balances. PPP fees were $162 thousand for the nine months ending September 30, 2022 compared to $395 thousand for the same period a year ago. Interest expense was $1.225 million for the nine months ended September 30, 2022, an increase of $58 thousand, or 4.97%, when compared to $1.166 million for the nine months ended September 30, 2021. Total other income was $726 thousand for the nine months ended September 30, 2022, a decrease of $244 thousand compared to the same period a year ago, as there was a one-time loss recorded of $252 thousand on the sale of OREO. Total non-interest expenses were $6.615 million, an increase of $413 thousand or 6.65%, for the nine months ended September 30, 2022, when compared to $6.202 million for the same period last year. Salaries increased by $445 thousand, or 12.73%, for the nine months ended September 30, 2022 compared to the same period last year due to increased salaries and employee benefits. Occupancy expenses declined to $429 thousand, a reduction of $42 thousand from the nine months ended September 30, 2021, due to previously implemented branch purchases reducing leasing expense. Other expenses increased by $11 thousand to $2.110 million for the nine months ended September 30, 2022 when compared to $2.099 million for the same period a year ago.

There was a $160 thousand provision for loan losses during the nine months ended September 30, 2022 and a $310 thousand provision for the nine months ended September 30, 2021. Management believes the allowance is adequate based on the inherent risk associated with the loan portfolio, will continue to actively monitor the Bank’s loan portfolio in light of the continued economic uncertainty and may increase provisions for loan losses in the future.

Net income was $2.798 million for the nine months ended September 30, 2022, an increase of $668 thousand, or 31.36%, compared to $2.130 million for the comparable period of 2021.

Financial Summary for the Three Months ended September 30, 2022

Net interest income was $3.529 million for the three months ended September 30, 2022, an increase of $565 thousand, or 19.07%, from $2.964 million for the same period a year ago. Loan income was $3.709 million for the three months ending September 30, 2022, an increase of $524 thousand, or 16.47%, from $3.184 million for the same period a year ago due a one-time recovery of $136 thousand of non-accrual income along with higher outstanding balances. Interest expense was $482 thousand for the three months ended September 30, 2022, an increase of $102 thousand, or 26.91%, when compared to $380 thousand for the same period a year ago, as higher interest rates on borrowings have prevailed.

Total other income was $56 thousand for the three months ended September 30, 2022, a decrease of $257 thousand, or 82.20%, when compared to $313 thousand for the same period a year ago. During the current period, the Company realized a $252 thousand loss on the sale of OREO as previously discussed. Service fees on deposit accounts increased to $199 thousand, a $31 thousand or 18.74% increase, for the three months ended September 30, 2022, compared to $168 thousand for the same period a year ago.

Total non-interest expenses were $2.130 million for the three months ended September 30, 2022, an increase of $100 thousand, or 4.92%, when compared to $2.030 million for the same period a year ago. Salaries and benefits increased by $50 thousand to $1.266 million for the three months ended September 30, 2022 compared to $1.216 million for the same period a year ago due to higher salary levels and benefit costs. Occupancy expenses remained unchanged at $138 thousand compared to the same period a year ago. Other expenses grew by $43 thousand to $678 thousand for the three months ended September 30, 2022 when compared to $635 thousand for the same period last year primarily due to normal business increases and inflation.

The provision for loan losses for the three months ended September 30, 2022 was $160 thousand compared to $54 thousand in the comparable period a year ago. Management believes the allowance is adequate based on the inherent risk associated with the loan portfolio, will continue to actively monitor the Bank’s loan portfolio in light of the continued economic uncertainty and may increase provisions for loan losses in the future.

Net income was $950 thousand for the three months ended September 30, 2022, compared to $871 thousand for the same period a year ago, an increase of $79 thousand or 9.07%. Income before income taxes and provision for loan losses was $1.455 million, an increase of $208 thousand, or 16.68%, over the same period a year ago. Excluding one-time items, net income was $1.035 million for the three months ended September 30, 2022 compared to $871 thousand for the same period a year ago, an increase of $164 thousand or 18.84%.

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 four additional branch offices.

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