10-Q 1 y67909e10vq.txt BRUNSWICK BANCORP SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 ____________________ Quarter ended September 30, 2004 Commission file number 0-14403 BRUNSWICK BANCORP ------------------------------------------------------------------------ (Exact Name of Registrant as Specified in its Charter) ____________________ NEW JERSEY 22-2610694 ------------------------------- ---------------------- (State or Other Jurisdiction of (I.R.S. Employer Incorporation or Organization) Identification Number) NEW BRUNSWICK, NEW JERSEY 08901 -------------------------------------- ---------- (Address of Principal Executive Office) (Zip Code) (732) 247-5800 ------------------------------------------------------------------------ (Registrant's Telephone Number Including Area Code) NOT APPLICABLE --------------------------------------------------------------------------- (Former Name, Former Address and Former Fiscal Year If Changed Since Last Report) COMMON STOCK, NO PAR VALUE 2,169,047 SHARES -------------------------- ---------------------------------- (Class of Stock) (Outstanding at Setember 30, 2004) ____________________ Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter periods that the registrant was required to file such report), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ] BRUNSWICK BANCORP AND SUBSIDIARIES INDEX

PAGE ---- PART I - FINANCIAL INFORMATION Item 1. Financial Statements (Unaudited) Consolidated Balance Sheets September 30, ~~2003~~2004 and December 31, ~~2002~~2003 1 Consolidated Statements of Income Nine Months Ended September 30, ~~2003~~2004, ~~2002~~2003 and ~~2001~~2002 2 Consolidated Statements of Income Quarters Ended September 30, ~~2003~~2004, ~~2002~~2003 and ~~2001~~2002 3 Consolidated Statements of Stockholders' Equity Nine Months Ended September 30, ~~2003~~2004, ~~2002~~2003 and ~~2001~~2002 4 Consolidated Statements of Cash Flows Nine Months Ended September 30, ~~2003~~2004, ~~2002~~2003 and ~~2001~~2002 5 Notes to Consolidated Financial Statements 6-7 Item 2. Management's Discussion and Analysis of Financial Conditions and Results of Operation 8-9 PART II - OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K 10 Signatures 11 302 ~~Certification~~CERTIFICATION : CEO 12 302 ~~Certification~~CERTIFICATION : CFO 13 906 ~~Certification~~CERTIFICATION : CEO 14 906 ~~Certification~~CERTIFICATION : CFO 15

Page 1 BRUNSWICK BANCORP AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS UNAUDITED

September 30 December 31 2004 2003 ~~2002~~ ------------- ------------- ASSETS: Cash and due from banks $ 2813,~~472~~916,~~767~~945 $ 816,~~629~~842,~~080~~265 Federal funds sold 910,000,000 259,000,000 ------------- ------------- Total cash and cash equivalents 3723,~~472~~916,~~767~~945 3325,~~629~~842,~~080~~265 Securities held to maturity 2438,~~621~~255,~~784~~000 2731,~~919~~131,~~222~~046 Loans receivable, net 6261,~~403~~870,~~747~~684 5861,~~519~~468,~~930~~161 Premises and equipment ~~798~~996,~~991~~515 1799,~~204,755~~922 Accrued interest receivable ~~598~~527,~~388~~020 ~~809~~536,~~817~~161 Other assets ~~566~~1,~~720~~099,685 ~~624~~991,~~030~~245 ------------- ------------- TOTAL ASSETS $ 126,~~462~~665,~~397~~849 $~~122~~ 120,~~706~~768,~~834~~800 ------------- ------------- LIABILITIES AND STOCKHOLDERS' EQUITY: Liabilities: Deposits: Non-interest bearing $ 3534,~~036~~747,~~255~~728 $ 3231,~~931~~890,~~180~~613 Interest bearing 6159,~~444~~213,~~893~~007 6057,~~389~~523,~~845~~877 ------------- ------------- Total deposits 9693,~~481~~960,~~148~~735 9389,~~321~~414,~~025~~490 Borrowed funds 85193,~~255~~758 ~~610~~606,~~615~~582 Accrued Interest payable ~~136~~115,~~329~~011 ~~112~~76,~~904~~953 Other liabilities ~~370~~372,~~620~~078 ~~373~~187,~~580~~593 ------------- ------------- Total liabilities 9794,~~073~~641,~~352~~582 9490,~~418~~285,~~124~~618 ------------- ------------- Stockholders' equity Common stock, no par value Authorized 10,000,000 shares Issued and outstanding 2,~~094~~169,~~875~~047 shares at September 30, ~~2003~~2004 and 2,111,722 shares at December 31, ~~2002~~2003 4,~~189~~338,~~750~~094 4,~~189~~223,~~750~~444 Additional paid-in capital 23,~~592~~118,~~694~~573 2,~~592~~712,~~694~~139 Retained earnings 2325,~~356~~195,~~269~~925 2224,~~415~~254,~~485~~899 Deferred stock compensation (~~733~~628,~~625~~325) (~~812~~707,~~600~~300) ~~Treasury stock at cost, 1,753 and 10,553 shares (16,043) (96,619)~~ ------------- ------------- Total stockholders' equity 2932,~~389~~024,~~045~~267 2830,~~288~~483,~~710~~182 ------------- ------------- TOTAL LIABILITIES AND STOCKHODER' EQUITY $ 126,~~462~~665,~~397~~849 $~~122~~ 120,~~706~~768,~~834~~800 ------------- -------------

Page 2 BRUNSWICK BANCORP AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME NINE MONTHS ENDED SEPTEMBER 30, 2004, 2003 AND 2002 UNAUDITED

2004 2003 2002 ~~2001~~ ----------- ----------- ----------- INTEREST INCOME: Interest and fees on loans receivable $3,609,612 $3,939,511 $ 4,088,429 ~~$ 4,154,751~~ Interest on investments 1,048,512 813,721 1,489,319 ~~1,466,711~~ Interest on Federal funds sold 141,407 138,446 198,960 ~~698,003~~ Interest on deposits with banks 3,952 89,852 ---- ---- ------~~-----~~ ----------- ----------- Total interest income 4,803,483 4,981,530 5,776,708 ~~6,319,465~~ ----------- ----------- ----------- INTEREST EXPENSE: Interest on deposits 233,601 409,512 549,081 ~~1,194,503~~ Interest on borrowed funds 1,232 1,350 3,160 ~~7,572~~ ----------- ----------- ----------- Total interest expense 234,833 410,862 552,241 ~~1,202,075~~ ----------- ----------- ----------- Net interest income 4,568,650 4,570,668 5,224,467 ~~5,117,390~~ Provision for credit losses ~~225~~135,000 ~~175~~225,000 28175,000 ----------- ----------- ----------- Net interest income after provision for credit losses 4,433,650 4,345,668 5,049,467 ~~5,089,390~~ ----------- ----------- ----------- NON-INTEREST INCOME: Service fees 686,938 691,984 694,881 ~~674,863~~ Other non-interest income 20,440 50,217 23,049 ~~44,074~~ ----------- ----------- ----------- Total non-interest income 707,378 742,201 717,930 ~~718,937~~ ----------- ----------- ----------- NON-INTEREST EXPENSES Salaries and wages 1,385,238 1,386,491 1,379,107 ~~1,453,278~~ Employee benefits 582,983 554,103 538,971 ~~533,402~~ Occupancy 607,224 550,818 540,859 ~~542,794~~ Furniture and equipment 133,364 134,402 147,134 ~~166,474~~ Other non-interest expenses 801,564 765,934 890,892 ~~934,874~~ ----------- ----------- ----------- Total non-interest expenses 3,510,373 3,391,748 3,496,963 ~~3,630,822~~ ----------- ----------- ----------- Income before income tax expense 1,630,655 1,696,121 2,270,434 ~~2,177,505~~ Income tax expense 689,629 755,337 1,000,750 ~~895,450~~ ----------- ----------- ----------- NET INCOME $ 941,026 $ 940,784 $ 1,269,684 ~~$ 1,282,055~~ ----------- ----------- ----------- NET INCOME PER SHARE: Basic earnings per share $ 0.4544 $ 0.6144 $ 0.6759 ---------- ---------- ---------- Diluted earnings per share $ 0.37 $ 0.37 $ 0.52 ---------- ---------- ---------- Average shares outstanding-basic 2,156,013 2,156,013 2,156,013 ---------- ---------- ---------- Average shares outstanding-diluted 2,240,574 2,240,574 2,240,574 ---------- ---------- ----------

Page 3 BRUNSWICK BANCORP AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME QUARTERS ENDED SEPTEMBER 30, 2004, 2003 AND 2002 UNAUDITED

2004 2003 2002 ~~2001~~ ------------ ------------ ------------ INTEREST INCOME: Interest and fees on loans receivable $1,238,851 $1,319,812 $ 1,324,241 ~~$ 1,356,676~~ Interest on investments 368,227 218,822 458,189 ~~457,425~~ Interest on Federal funds sold 59,478 28,184 91,149 ~~200,511~~ Interest on deposits with banks ~~63,550~~ ---- 63,550 ---- ------------ ------------ ------------ Total interest income 1,666,556 1,630,368 1,873,579 ~~2,014,612~~ ------------ ------------ ------------ INTEREST EXPENSE: Interest on deposits 78,550 110,773 175,942 ~~327,087~~ Interest on borrowed funds 374 561 1,240 ~~1,740~~ ------------ ------------ ------------ Total interest expense 78,924 111,334 177,182 ~~328,827~~ ------------ ------------ ------------ Net interest income 1,587,632 1,519,034 1,696,397 ~~1,685,785~~ Provision for credit losses 7545,000 ~~100~~75,000 21100,000 ------------ ------------ ------------ Net interest income after provision for credit losses 1,542,632 1,444,034 1,596,397 ~~1,664,785~~ ------------ ------------ ------------ NON-INTEREST INCOME: Service fees 211,140 233,185 253,130 ~~212,253~~ Other non-interest income 6,150 35,297 5,095 ~~20,940~~ ------------ ------------ ------------ Total non-interest income 217,290 268,482 258,225 ~~233,193~~ ------------ ------------ ------------ NON-INTEREST EXPENSES Salaries and wages 475,797 470,263 443,338 ~~495,199~~ Employee benefits 178,783 184,630 171,745 ~~181,180~~ Occupancy 224,332 176,067 188,361 ~~184,824~~ Furniture and equipment 40,167 43,480 51,567 ~~46,659~~ Other non-interest expenses 271,582 230,247 281,061 ~~274,304~~ ------------ ------------ ------------ Total non-interest expenses 1,190,661 1,104,687 1,136,072 ~~1,182,166~~ ------------ ------------ ------------ Income before income tax expense 569,261 607,829 718,550 ~~715,812~~ Income tax expense 280,630 257,047 333,410 ~~314,800~~ ------------ ------------ ------------ NET INCOME $ 288,631 $ 350,782 $ 385,140 ~~$ 401,012~~ ---------- ---------- ---------- NET INCOME PER SHARE: Basic earnings per share $ 0.13 $ 0.16 $ 0.18 ---------- ---------- ---------- ~~NET~~Diluted ~~INCOME~~earnings ~~PER~~per ~~SHARE~~share $ 0.1711 $ 0.1814 $ 0.1916 ---------- ---------- ---------- Average shares outstanding-basic 2,156,013 2,156,013 2,156,013 ---------- ---------- ---------- Average shares outstanding-diluted 2,240,574 2,240,574 2,240,574 ---------- ---------- ----------

Page 4 BRUNSWICK BANCORP AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY NINE MONTHS ENDED SEPTEMBER 30, 2004, 2003 AND 2002 UNAUDITED

DEFERRED STOCK COMMON RETAINED COMPEN- TREASURY STOCK SURPLUS EARNINGS SATION STOCK TOTAL ----------~~------~~ -----------~~---~~ -------------- ---------~~---~~ --------~~------~~ ------------ Balance, December 31, ~~2000~~2001 $ 3,~~729~~809,064 $ 2,~~621~~973,380 $ 1820,~~647~~473,~~756~~038 $ (~~580~~917,~~400~~900) $ (91,774) $ 2426,~~326~~245,~~026~~808 Net income ---- ---- 1,~~282~~269,~~055~~684 ---- ---- 1,~~282~~269,~~055~~684 ~~Deferred~~Stock ~~stock~~dividend ~~compensation 80~~380,~~000~~686 ~~352~~(380,~~000~~686) ~~----~~ (~~432~~1,~~000~~543) ---- ---- (1,543) Amortization of deferred stock compensation ---- ---- ---- 7178,~~575~~975 ---- 7178,~~575~~975 Purchase of treasury stock ---- ---- ---- ---- (4,845) (4,845) ----------~~----~~ ----------- --- --------- --- ------ -------- ------------ Balance, September 30, ~~2001~~2002 $ 34,~~809~~189,~~064~~750 $ 2,~~973~~592,~~380~~694 $ 1921,~~929~~741,~~811~~179 $ (~~940~~838,~~825~~925) $ (9196,~~774~~619) $ 2527,~~679~~588,~~656~~079 ----------~~------~~ -----------~~---~~ -------------- ---------~~---~~ --------~~------~~ ------------ Balance, December 31, ~~2001~~2002 $ 34,~~809~~189,~~064~~750 $ 2,~~973~~592,~~380~~694 $ 2022,~~473~~415,~~038~~485 $ (~~917~~812,~~900~~600) $ (9196,~~774~~619) $ 2628,~~245~~288,~~808~~710 Net income ---- ---- 1940,~~269,684~~784 ---- ---- 1940,~~269,684~~784 ~~Stock dividend 380,686 (380,686) (1,543) ---- ---- (1,543)~~ Amortization of deferred stock compensation ---- ---- ---- 78,975 ---- 78,975 ~~Purchase~~Proceeds offrom ~~treasury~~issuance of stock-stock option plan ---- ---- ---- ---- (480,~~845)~~576 (480,~~845)~~576 ----------~~------~~ -----------~~---~~ -------------- ---------~~---~~ --------~~------~~ ------------ Balance, September 30, ~~2002~~2003 $ 4,189,750 $ 2,592,694 $ 2123,~~741~~356,~~179~~269 $ (~~838~~733,~~925~~625) $ (9616,~~619~~043) $ 2729,~~588~~389,~~079~~045 ----------~~------~~ -----------~~---~~ -------------- ---------~~---~~ --------~~------~~ ------------ Balance, December 31, ~~2002~~2003 $ 4,~~189~~223,~~750~~444 $ 2,~~592~~712,~~694~~139 $ 2224,~~415~~254,~~485~~899 $ (~~812~~707,~~600~~300) $ ~~(96,619)~~---- $ 2830,~~288~~483,~~710~~182 Net income ---- ---- ~~940~~941,~~784~~026 ---- ---- ~~940~~941,~~784~~026 Amortization of deferred stock compensation ---- ---- ---- 78,975 ---- 78,975 ~~Stock~~Proceeds ~~options~~from ~~excercised~~issuance of stock-~~---~~stock option plan 114,650 406,434 ---- ---- ---- 80521,~~576~~084 ~~80,576~~ ----------~~------~~ -----------~~---~~ -------------- ---------~~---~~ --------~~------~~ ------------ Balance, September 30, ~~2003~~2004 $ 4,~~189~~338,~~750~~094 $ 23,~~592~~118,~~694~~573 $ 2325,~~356~~195,~~269~~925 $ (~~733~~628,~~625~~325) $ ~~(16,043)~~---- $ 2932,~~389~~024,~~045~~267 ----------~~------~~ -----------~~---~~ -------------- ---------~~---~~ --------~~------~~ ------------

Page 5 BRUNSWICK BANCORP AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS NINE MONTHS ENDED SEPTEMBER 30, 2004, 2003 AND 2002 UNAUDITED

2004 2003 2002 ~~2001~~ ------------~~---~~ ------------~~----~~ ------------~~---~~ OPERATING ACTIVITIES: Net income $ 941,026 $ 940,784 $ 1,269,684 ~~$ 1,282,055~~ Adjustments to reconcile net income to cash provided by operating activities: Provision for credit losses ~~225~~135,000 ~~175~~225,000 28175,000 Depreciation and amortization 96,794 91,868 99,037 ~~142,305~~ Net accretion of securities discounts (10,048) (70,326) (83,282) ~~(63,365)~~ Amortization of deferred stock compensation 78,975 78,975 7178,~~575~~975 ~~(Increase)~~Net ~~decrease~~change in: ~~other~~Accrued ~~assets~~interest ~~268~~receivable 9,~~739~~141 ~~298~~211,~~964~~429 ~~351~~336,~~298~~961 ~~Increase~~Accrued interest payable 38,058 23,425 (~~decrease~~29,513) inOther ~~other~~assets (108,440) 57,310 (37,997) Other liabilities 20184,~~465~~485 ~~166~~(2,~~287~~960) ~~284~~195,~~106~~800 ------------~~---~~ ------------~~----~~ ------------~~---~~ Net cash provided ~~(used)~~ by operating activities 1,364,991 1,555,505 2,004,665 ~~2,095,974~~ ------------~~---~~ ------------~~----~~ ------------~~---~~ INVESTING ACTIVITIES: Maturities of investment securities 1842,~~150~~410,000 1618,~~000~~150,000 916,000,000 Principal repayments on investment securities 91,094 42,764 67,304 ~~49,739~~ Purchases of investment securities (49,615,000) (14,825,000) (10,984,326) ~~(11,000,000)~~ Net ~~(increase)~~change ~~decrease~~ in loans receivable (537,523) (4,108,817) (2,587,428) ~~(719,927)~~ Acquisitions of premises and equipment (293,387) (40,584) (59,419) ~~(160,225)~~ Proceeds from sales of premises and equipment ---- 354,480 10,363 ~~890,845~~ ------------~~---~~ ------------~~----~~ ------------~~---~~ Net cash provided by (used in) by investing activities (7,944,816) (427,157) 2,446,494 ~~(1,939,568)~~ ------------~~---~~ ------------~~----~~ ------------~~---~~ FINANCING ACTIVITIES: Cash paid in lieu of fractional shares ---- ---- (1,543) ~~----~~ Purchase of treasury stock ---- ---- (4,845) Proceeds from issuance of stock-~~---~~stock ~~Stock~~option ~~options~~plan ~~excercised~~521,084 80,576 ---- ~~----~~ Net increase (decrease) in non-interest bearing deposits 2,857,115 2,105,075 1,689,720 ~~557,087~~ Net increase (decrease) in interest bearing deposits 1,689,130 1,055,048 13,282,863 ~~(3,252,651)~~ Net increase (decrease) in borrowed funds (412,824) (525,360) (163,712) ~~115,578~~ ------------~~---~~ ------------~~----~~ ------------~~---~~ Net cash provided by (used in) by financing activities 4,654,505 2,715,339 14,802,483 ~~(2,579,986)~~ ------------~~---~~ ------------~~----~~ ------------~~---~~ Increase (decrease) in cash and cash equivalents (1,925,320) 3,843,687 19,253,642 ~~(2,423,580)~~ Cash and cash equivalents at January 1 25,842,265 33,629,080 15,064,753 ~~39,271,870~~ ------------~~---~~ ------------~~----~~ ------------~~---~~ Cash and cash equivalents at September 30 $ 23,916,945 $ 37,472,767 $ 34,318,395 ~~$ 36,848,290~~ ------------~~---~~ ------------~~----~~ ------------~~---~~

Page 6 BRUNSWICK BANCORP AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 1 BASIS OF PRESENTATION The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information, and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. They do not include all the information and footnotes required by generally accepted accounting principles for complete financial statements. The information presented includes all normal and recurring adjustments concidered necessary for a fair presentation of the interim period results. NOTE 2 SECURITIES HELD TO MATURITY The following is a comparative summary of the book values and estimated market values of securities held to maturity:

SEPTEMBER 30, ~~2003~~2004 BOOK MARKET VALUE VALUE -----------~~----------~~ -----------~~--------~~ U.S. Government and agency securities $ 2232,~~571~~605,~~784~~000 $ 2232,~~841~~348,~~829~~538 Other securities 25,~~050~~650,000 25,~~050~~643,~~000~~750 -----------~~----------~~ -----------~~--------~~ $ 2438,~~621~~255,~~784~~000 $ 2437,~~891~~992,~~829~~288 -----------~~----------~~ -----------~~--------~~

DECEMBER 31, ~~2002~~2003 BOOK MARKET VALUE VALUE -----------~~----------~~ -----------~~--------~~ U.S. Government and agency securities $ 2529,~~969~~081,~~222~~046 $ 2629,~~536~~124,~~242~~083 Other securities 12,~~950~~050,000 12,~~950~~050,000 -----------~~----------~~ -----------~~--------~~ $ 2731,~~919~~131,~~222~~046 $ 2831,~~486~~174,~~242~~083 -----------~~----------~~ -----------~~--------~~

Page 7 BRUNSWICK BANCORP AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 3 NET LOANS RECEIVABLE The composition of net loans receivabe is as follows:

SEPTEMBER 30 DECEMBER 31 2004 2003 ~~2002~~ ------------~~--------~~ -----------~~--------~~ Commercial loans $ 3641,~~724~~175,~~635~~792 $ 3140,~~362~~013,~~179~~237 Real estate loans 2621,~~009~~021,~~324~~411 2721,~~397~~554,~~939~~333 Cosumer loans ~~816~~908,~~405~~595 ~~681~~806,~~175~~893 -----------~~---------~~ -----------~~--------~~ 63,~~550~~105,~~364~~798 5962,~~441~~374,~~293~~463 Less: Allowance for credit losses 1,~~046~~080,~~164~~131 800,000 Unearned income ~~100~~154,~~453~~983 ~~121~~106,~~363~~302 -----------~~---------~~ -----------~~--------~~ $ 6261,~~403~~870,~~747~~684 $ 5861,~~519~~468,~~930~~161 -----------~~---------~~ -----------~~--------~~

NOTE 4 PREMISES AND EQUIPMENT The major components of premises and equipment are as follows:

SEPTEMBER 30 DECEMBER 31 2004 2003 ~~2002~~ ------------~~-------~~ -----------~~------~~ Land $ 240,705 $ ~~516~~300,~~927~~705 Bank premises 706,826 ~~744~~646,~~499~~826 Leasehold improvements ~~183~~232,~~023~~594 183,023 Furniture and equipment 1,~~189~~465,~~920~~264 1,~~189~~221,~~920~~449 ----------~~---------~~ ----------~~-------~~ 2,~~320~~645,~~474~~389 2,~~634~~352,~~369~~003 Less accumulated depreciation and amortization 1,~~521~~648,~~483~~874 1,~~429~~552,~~614~~081 ----------~~---------~~ ----------~~-------~~ $ ~~798~~996,~~991~~515 $ 1799,~~204,755~~922 ----------~~---------~~ ----------~~-------~~

Page 8 BRUNSWICK BANCORP AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS SEPTEMBER 30, 2004 The most noticeably changes in the Corporation's Balance Sheet since December 31, 2003 are increases in investment securities and deposits of $7,100,000 and $4,500,000, respectively. The $7,100,000 increase in securities was mostly the result of investments in securities issued by US Government Agencies and with the increase in deposits, the Corporation's interest earning assets increased by approximately $8,500,000. The allowance for credit losses increased by $280,000, which was due to credit loss provisions totaling $135,000 and recoveries totaling $145,000. At September 30, 2004 the allowance for credit losses totaled $1,080,131 which represented 35% of all loans that were past due or in nonaccrual. Stockholders' equity increased by approximately $1,541,000 mainly because of the addition of current earnings totaling $941,000 and additional capital of $521,000 that resulted from stock options exercised by directors and employees. The Corporation continues to be classified as "Well Capitalized". At September 30, 2004 our risk-based capital ratio was 44.4% which is over five times the regulatory requirement. The results of operations for the first three quarters of 2004, compared to the same period of 2003, show a slight decrease in income before taxes of approximately $65,000. Although interest earning assets increased in volume, lower interest rates brought about decreases in interest income and expense of $178,000 and $176,000, respectively. The resulting $2,000 decrease in net interest income, although insignificant, is analyzed in detail on page 9. Credit loss provisions totaled $135,000 during the current period compared to $225,000 during the first three quarters of 2003. Finally non-interest income decreased by $35,000 and non-interest expenses increased by $119,000. In Management's opinion, the Corporation's liquidity position is strong, based on its high level of core deposits, the stability of its other funding sources and the support provided by its capital base. Page 9 BRUNSWICK BANCORP AND SUBSIDIARIES ANALYSIS OF CHANGES IN NET INTEREST INCOME

Increase (Decrease) Due to Changes in ------------------------------------- Volume Rates Total ------ ----- ------ Nine Months Ended September 30, ~~2003~~2004 Versus Nine Months Ended September 30, ~~2002~~2003 Interest income on: Loans receivable $ ~~198~~(12) $(~~346~~318) $(~~148~~330) Securities held to maturity ~~(576)~~367 (99132) ~~(675)~~235 Short term investments 48(75) (198) 29(83) ----- ----- ----- Total interest income ~~(330)~~280 (~~464~~458) (~~794~~178) ----- ----- ----- Interest expense on: Deposits 9(8) (~~148~~167) (~~139~~175) Borrowed funds ~~(1)~~ --- (1) (1) ----- ----- ----- Total interest expense (8) (~~148~~168) (~~140~~176) ----- ----- ----- Net interest income $~~(338)~~ 288 $(~~316~~290) $ (~~654~~2) ----- ----- ----- Quarter Ended September 30, ~~2003~~2004 Versus Quarter Ended September 30, ~~2002~~2003 ~~-----~~ Interest income on: Loans receivable $ 8221 $ (87102) $ (581) Securities held to maturity ~~(215)~~255 (24106) ~~(239)~~149 Short term investments (4951) 18 (4833) 1 ----- ----- ----- Total interest income ~~(84)~~225 (~~159~~190) ~~(243)~~35 ----- ----- ----- Interest expense on: Deposits 2(4) (6728) (6532) Borrowed funds --- ~~---~~(1) ~~---~~(1) ----- ----- ----- Total interest expense 2(4) (6729) (6533) ----- ----- ----- Net interest income $ ~~(86)~~229 $ (92161) $~~(178)~~ 68 ----- ----- -----

Page 10 BRUNSWICK BANCORP AND SUBSIDIARIES PART II - OTHER INFORMATION ITEM 6 EXHIBITS AND REPORTS ON FORM 8-K The Corporation filed no Form 8-K during the three months ended September 30, 2004. Page 11 BRUNSWICK BANCORP AND SUBSIDIARIES SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned duly authorized. BRUNSWICK BANCORP AND SUBSIDIARIS 10/21/04 Carmen J. Gumina -------------- --------------------------------- Date Carmen J. Gumina, President & CEO 10/21/04 Thomas Fornale -------------- ---------------------------------- Date Thomas Fornale, Treasurer

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