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 June 30, 2022.

Financial Highlights for the First Half of 2022:

• Total assets increased 3.10% to $383.7 million from December 31, 2021;
• Loan portfolio increased 2.95% to $284.7 million from December 31, 2021;
• Deposits increased 6.10% to $294.5 million from December 31, 2021;
• Net income per share increased to $0.63 per diluted share for the six months ended June 30, 2022, up 41.05% compared to $0.45 per diluted share in the prior year period;
• Net income increased 46.78% to $1.848 million for the six months ended June 30, 2022 compared to the same period a year ago;

“Thanks to the successful execution of the Company’s strategic plan, Brunswick continued to improve top- and bottom-line performance in the second quarter,” said Nicholas A. Frungillo, Jr., President and Chief Executive Officer of the Company and the Bank. “Despite the changing market conditions, the Board and management team are confident that our strong foundation positions Brunswick to maintain positive momentum and continue creating sustainable value for shareholders.”

Balance Sheet Summary for Comparable Quarter

At June 30, 2022, the Company had total assets of $383.7 million, an increase of $20.2 million or 5.57% over the June 30, 2021 balance of $363.5 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 $33.3 million at June 30, 2022, an increase of $5.2 million or 18.36% from $28.2 million at June 30 last year as funds were held in overnight investments pending investment into higher yielding assets. The loan portfolio grew to $284.7 million at June 30, 2022 compared to June 30, 2021, an increase of $16.1 million or 5.99%. New loan originations were $93.6 million for the twelve months ending June 30, 2022, while loan payoffs/amortizations totaled $77.5 million, including $12.9 in PPP loans forgiven or paid off. PPP loans outstanding at June 30, 2022 were $820 thousand compared to $13.7 million a year ago. Securities decreased to $45.6 million, down $2.8 or 5.75% million from the balance at June 30, 2021 of $48.4 million.

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

Deposits were $294.5 million at June 30, 2022, an increase of $21.5 million or 7.89% from the June 30, 2021 balance of $273.0 million, due to marketing and business development efforts. FHLB borrowings increased to $41.7 million at June 30, 2022 from the June 30, 2021 balance of $31.7 million.

Stockholders’ equity increased by $700 thousand to $43.3 million at June 30, 2022 as a result of earnings retention net of the change of unrealized losses and the $341 special dividend paid in February 2002. The Bank meets all criteria to be considered “Well Capitalized”.

The Bank’s Net Interest Margin was 3.82% for the six months ended June 30, 2022 compared to 3.54% for the same period a year ago. The Bank’s cost of deposits decreased to 0.49% at June 30, 2022 from 0.64% from the same period a year ago. The Bank’s yield on interest earning assets increased to 4.27% for the six months ended June 30, 2022 from 4.05% 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.

Balance Sheet Summary Compared to Year End 2021

At June 30, 2022, the Company had total assets of $383.7 million, an increase of $11.5 million or 3.09% from December 31, 2021. Cash and due from banks was $33.3 million at June 30, 2022, a decrease of $1.7 million over year-end balances. The loan portfolio grew to $284.7 million at June 30, 2022, an increase of $8.2 million since December 31, 2021. New loan originations were $41.5 million for the six months ending June 30, 2022, while loan payoffs/amortizations totaled $33.3 million, or which $5.3 million represented the forgiveness or repayment of PPP loans. Securities increased to $45.8 million, an increase of $3.4 million from the balance at December 31, 2021 of $41.9 million as funds were reinvested into higher yielding securities.

Deposits were $294.5 million at June 30, 2022, an increase of $16.9 million or 6.10% from December 31, 2021 due to marketing and business development efforts. FHLB borrowings were $41.7 million at June 30, 2022 unchanged from the December 31, 2021 balance.

Stockholders’ equity decreased by $1.3 million to $43.3 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 3.82% for the six months ended June 30, 2022 compared to 3.62% for the year ended December 31, 2021. The Bank’s cost of deposits decreased to 0.49% at June 30, 2022, down from 0.58% from December 31, 2021. The Bank’s yield on interest earning assets increased to 4.27% for the six months ended June 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 and changes in the composition of the deposit portfolio.

Financial Summary for the First Half of 2022

Net interest income was $6.352 million for the six months ended June 30, 2022, an increase of $833 thousand, or 15.10%, from $5.518 million for the comparable period of 2021. Loan income grew to $6.689 million for the first half of 2022, an increase of $591 thousand, or 9.70%, from $6.098 million for the same period a year ago. The increase was partially due to a one-time recovery of $166 thousand of 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 $155 thousand for the six months ending June 30, 2022 compared to $309 thousand for the same period a year ago. Interest expense was $743 thousand for the six months ended June 30, 2022 a decrease of $44 thousand, or 5.56%, when compared to $786 thousand for the six months ended June 30, 2021, as the Bank was able to reprice its deposits at lower interest rates during the trailing period. Total other income was $671 thousand for the six months ended June 30, 2022, an increase of $13 thousand compared to the same period a year ago. Total non-interest expenses were $4.485 million, an increase of $313 thousand or 7.49% for the six months ended June 30, 2022, when compared to $4.172 million for the same period last year. Salaries increased by $396 thousand, or 17.34% for the six months ended June 30, 2022 compared to the same period last year due to increased salaries and employee benefits. Occupancy expenses declined to $290 thousand, a reduction of $42 thousand from the six months ended June 30, 2021 due to previously implemented branch purchases reducing leasing expense. Other expenses decreased by $32 thousand to $1.432 million for the six months ended June 30, 2022 when compared to $1.464 million for the same period a year ago,

There were no provisions for loan losses during the first half of 2022 and a $256 thousand provision for the six months ended June 30, 2021. Management believes the allowance is adequate based on the inherent risk associated with the loan portfolio, and 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 $1.847 million for the six months ended June 30, 2022, an increase of $589 thousand or 46.78% compared to $1.259 million for the comparable period of 2021.

Financial Summary for the Three Months ended June 30, 2022

Net interest income was $3.313 million for the three months ended June 30, 2022, an increase of $508 thousand, or 18.10%, from $2.805 million for the same period a year ago. Loan income was $3.462 million for the three months ending June 30, 2022, an increase of $390 thousand, or 12.69%, from $3.072 million for the same period a year ago due a one-time recovery of $166 thousand of non-accrual income along with higher outstanding balances. Interest expense was $385 thousand for the three months ended June 30, 2022, a decrease of $14 thousand, or 3.57%, when compared to $399 thousand for the same period a year ago.

Total other income was $385 thousand for the three months ended June 30, 2022, an increase of $66 thousand or 20.70% when compared to $319 thousand for the same period a year ago. During the current period, the Company realized $66 thousand in gains on sale of loans, while not recognizing any such income in the prior period. Service fees on deposit accounts increased to $197, a $34 thousand or 20.54% increase, for the three months ended June 30, 2022, when compared to $163 thousand for the same period a year ago.

Total non-interest expenses were $2.220 million for the three months ended June 30, 2022, an increase of $232 thousand, or 11.65% when compared to $1.989 million for the same period a year ago. Salaries and benefits increased by $184 thousand to $1.338 million for the three months ended June 30, 2022 compared to $1.155 million for the same period a year ago due to higher salary levels and benefit costs. Occupancy expenses decreased to $142 thousand, a reduction of $13 thousand from $155 thousand for the same period a year ago due to the Bank’s purchase of its North Brunswick branch in May 2021. Other expenses grew by $66 thousand to $699 thousand for the three months ended June 30, 2022 when compared to $634 thousand for the same period last year primarily due to normal business increases and inflation.

There were no provisions for loan losses for the three months ended June 30, 2022 compared to $147 thousand in the comparable year ago period. Management believes the allowance is adequate based on the inherent risk associated with the loan portfolio, and 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 $1.081 million for the three months ended June 30, 2022, compared to $707 thousand for the same period a year ago, an increase of $374 thousand or 52.90%. Income before income taxes and provision for loan losses was $1.477 million, an increase of $342 thousand, or 30.13%, over the same period a year ago.

Other Real Estate Owned (OREO)

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 will be recording a $300 thousand pretax loss in its fiscal third quarter.

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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