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 March 31, 2023.

Financial Highlights for the First Quarter of 2023:

• Total assets increased 7.38% to $419.5 million from December 31, 2022;
• Loan portfolio increased 8.09% to $339.2 million from December 31, 2022;
• Deposits increased $6.7 million to $283.5 million from December 31, 2022;
• Net income per share was $0.16 per diluted share for the three months ended March 31, 2023, down 38.46% compared to $0.26 per diluted share in the prior year period, due to merger related expenses; excluding merger related expenses net income per diluted share was $0.29;
• Net income decreased 38.61% to $471 thousand for the three months ending March 31, 2023 compared to the same period a year ago, due to merger related expenses; excluding merger related expenses net income increased by 9.71%

“Brunswick Bancorp’s first quarter performance, during a time of great volatility in the banking industry, shows the importance of our community banking model. Because we are close to our local clients, and because we proactively communicated with our client base, we actual saw an increase in deposits during the quarter while other banks saw significant withdrawals. Despite the rising rate environment, our earnings were strong, with increases in net income and earnings per diluted share, exclusive of the impact of expenses related to our merger with Mid Penn Bancorp. The merger is on track to close during the second quarter,” said Nicholas A. Frungillo, Jr., President and Chief Executive Officer of the Company and the Bank.

Balance Sheet Summary for Comparable Quarter

At March 31, 2023, the Company had total assets of $419.5 million, an increase of $46.7 million or 12.54% over the March 31, 2022 balance of $372.8 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 $21.2 million at March 31, 2023, a decrease of $12.8 million from $34.6 million for the same period last year. The loan portfolio grew to $339.2 million at March 31, 2023 compared to March 31, 2022, an increase of $61.4 million or 22.08%. New loan originations were $108.1 million for the twelve months ending March 31, 2023, while loan payoffs/amortizations totaled $46.8 million. Securities were essentially unchanged at $41.6 million, from the balance at March 31, 2022 of $41.4 million.

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

Deposits were $283.5 million at March 31, 2023, an increase of $6.7 million or 2.43% from the March 31, 2022 balance of $276.8 million. FHLB borrowings increased to $86.2 million at March 31, 2023 from the March 31, 2022 balance of $46.7 million.

Stockholders’ equity increased by $1.3 million to $45.6 million at March 31, 2023 as a result of earnings retention net of the change of unrealized losses. The Bank meets all criteria to be considered “Well Capitalized”.

Balance Sheet Summary Compared to Year End

At March 31, 2023, the Company had total assets of $419.5 million, an increase of $28.8 million or 7.38% from December 31, 2022. Cash and due from banks was $21.2 million at March 31, 2023, an increase of $2.4 million over year-end balances. The loan portfolio grew to $339.2 million at March 31, 2023, an increase of $25.4 million since December 31, 2022. New loan originations were $33.5 million for the three months ending March 31, 2023, while loan payoffs/amortizations totaled $8.1 million. Securities were essentially unchanged at $41.6 million, from the balance at December 31, 2022 of $41.5 million.

Deposits were $283.5 million at March 31, 2023, an increase of $1.2 million from December 31, 2022. FHLB borrowings increased to $86.2 million at March 31, 2023 from the December 31, 2022 balance of $60.7 million.

Stockholders’ equity increased by $1.3 million to $45.6 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 3.19% for the three months ended March 31, 2023 compared to 3.70% for the quarter ended March 31, 2022. The Bank’s cost of deposits increased to 2.24% at March 31, 2023 up from 0.48% for the comparative period in 2022. The Bank’s yield on interest earning assets increased to 4.98% for the quarter ended March 31, 2023 from 4.14% for the same period last year. The increases in the cost of deposits and the yield on earning assets both reflect the rising interest rate environment.

Income Statement Comparison for the quarter ended March 31, 2023 compared to the quarter ended March 31, 2022

Net interest income was $3.001 million for the three months ended March 31, 2023, a decrease of $38 thousand, or 1.26%, from $3.039 million for the comparable period of 2022. Loan income grew to $4.367 million for the first quarter of 2023, an increase of $1.139 million, or 35.28%, from $3.228 million for the same period a year ago due to higher outstanding loans. Interest expense was $1.659 million for the quarter ended March 31, 2023, an increase of $1.302 million, or 364.05%, when compared to $358 thousand for the quarter ended March 31, 2022, as the steady rise in interest rates has impacted all deposit products. Total other income was $291 thousand for the quarter ended March 31, 2023 essentially unchanged compared to the same period a year ago. Total non-interest expenses were $2.444 million, an increase of $179 thousand for the quarter ended March 31, 2023, when compared to $2.265 million for the same period last year. Salaries decreased by $192 thousand for the quarter ended March 31, 2023 compared to the same period last year. Occupancy expenses were $153 thousand, essentially unchanged from the quarter ended March 31, 2022. Other expenses increased by $373 thousand to $1.105 million for the quarter ended March 31, 2023 when compared to $733 thousand for the quarter ended March 31, 2022, as the Bank has recorded $482 thousand in merger related expenses.

There were $240 thousand in provisions for loan losses during the first quarter of 2023 and no provisions in the same period a year ago. Management believes the allowance is adequate based on the inherent risk associated within the loan portfolio, will continue to actively monitor the Bank’s loan portfolio in light of the continued uncertainty and may increase provisions in the future.

Net income was $471 thousand for the three months ended March 31, 2023 a decrease of $296 thousand or 38.61% compared to $767 thousand for the comparable period of 2022 as the Bank had merger related expenses of $371 thousand in Q1 2023.

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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