-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, GhEEjAhkS4S0fBG3LdysY9BnRzPdzg+oMs3JisouinqwOOya4SuV/q/kinwlE3Ru W8lzjlhRn5S7LeqoUveHTg== 0000909654-96-000057.txt : 19960701 0000909654-96-000057.hdr.sgml : 19960701 ACCESSION NUMBER: 0000909654-96-000057 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19960331 FILED AS OF DATE: 19960508 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: PAMRAPO BANCORP INC CENTRAL INDEX KEY: 0000854071 STANDARD INDUSTRIAL CLASSIFICATION: 6036 IRS NUMBER: 222984813 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-18014 FILM NUMBER: 96557845 BUSINESS ADDRESS: STREET 1: 611 AVE C CITY: BAYONNE STATE: NJ ZIP: 07002 BUSINESS PHONE: 2013394600 MAIL ADDRESS: STREET 2: 611 AVENUE C CITY: BAYONNE STATE: NY ZIP: 07002 10-Q 1 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ---------------------------- FORM 10-Q (Mark One) / X / QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 1996 ----------------------------------------- OR / / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to ---------------------- ---------------------- Commission File Number 0-18014 ------------- PAMRAPO BANCORP, INC. - - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) DELAWARE 22-2984813 - - -------------------------------------------------------------------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 611 Avenue C, Bayonne, New Jersey 07002 - - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code 201-339-4600 Indicate by check X 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 period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No --- --- The number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date April 30, 1996. -------------- $.01 par value common stock - 3,317,464 shares outstanding 2 PAMRAPO BANCORP, INC. AND SUBSIDIARIES INDEX Page Number ------ PART I - FINANCIAL INFORMATION Consolidated Financial Statements of Condition at March 31, 1996 and December 31, 1995 (Unaudited) 1 Consolidated Statements of Income for the Three Months Ended March 31, 1996 and 1995 (Unaudited) 2 Consolidated Statement of Cash Flows for the Three Months Ended March 31, 1996 and 1995 (Unaudited) 3 - 4 Notes to Consolidated Financial Statements 5 Management's Discussion and Analysis of Financial Condition and Results of Operations 6 - 11 PART II - OTHER INFORMATION 12 - 13 SIGNATURES 14 3
PAMRAPO BANCORP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION ---------------------------------------------- (Unaudited) March 31, December 31, Assets 1996 1995 ------ ------------ ------------ Cash and amounts due from depository institutions $ 8,625,293 $ 9,293,609 Interest-bearing deposits in other banks 7,700,000 4,500,000 Federal funds sold 100,000 100,000 ------------ ------------ Total cash and cash equivalents 16,425,293 13,893,609 Securities available for sale 29,557,272 28,427,064 Investment securities held to maturity, estimated fair value of $99,000 (1996) and (1995) 99,000 99,000 Mortgage-backed securities held to maturity, net; estimated fair value of $92,297,000 (1996) and $97,329,000 (1995) 93,272,230 96,564,583 Loans receivable, net 213,802,427 218,140,313 Foreclosed real estate, net 2,085,879 1,467,396 Investment in real estate, net 304,027 307,375 Premises and equipment, net 3,687,771 3,716,785 Federal Home Loan Bank of New York stock, at cost 3,072,600 3,072,600 Interest receivable, net 2,974,552 2,954,256 Excess of cost over assets acquired 515,525 545,850 Other assets 2,597,231 2,175,799 ------------ ------------ Total assets $368,393,807 $371,364,630 ============ ============ Liabilities and stockholders' equity ------------------------------------ Liabilities ----------- Deposits $302,075,232 $298,900,764 Advances from Federal Home Loan Bank of New York 3,583,100 7,583,100 Other borrowed money 405,901 459,855 Advance payments by borrowers for taxes and insurance 1,783,344 1,632,215 Other liabilities 3,462,197 3,413,267 ------------ ------------ Total liabilities 311,309,774 311,989,201 ------------ ------------ Stockholders' equity -------------------- Preferred stock; authorized 3,000,000 shares; issued and outstanding - none - - Common stock; par value $.01; authorized 7,000,000 shares; 3,450,000 shares issued; 3,317,464 shares (1996) and 3,393,034 shares (1995) outstanding 34,500 34,500 Paid-in capital in excess of par value 18,906,768 18,906,768 Retained earnings - substantially restricted 41,380,531 41,284,431 Unrealized (loss) on securities available for sale, net (90,676) (41,154) Debt of employee stock ownership plan (99,188) (148,781) Treasury stock, at cost; 132,536 shares (1996) and 56,966 shares (1995) (3,047,902) (660,335) ------------ ------------ Total stockholders' equity 57,084,033 59,375,429 ------------ ------------ Total liabilities and stockholders' equity $368,393,807 $371,364,630 ============ ============ See notes to consolidated financial statements.
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PAMRAPO BANCORP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME -------------------------------------- (Unaudited) Three Months Ended March 31, ------------------------ 1996 1995 ----------- ---------- Interest income: Loans $ 4,941,218 $ 5,123,341 Mortgage-backed securities 1,958,064 2,005,782 Investments and other interest-earning assets 276,163 292,615 ----------- ----------- Total interest income 7,175,445 7,421,738 ----------- ----------- Interest expense: Deposits 2,793,189 2,511,175 Advances and other borrowed money 109,545 268,888 ----------- ----------- Total interest expense 2,902,734 2,780,063 ----------- ----------- Net interest income 4,272,711 4,641,675 Provision for loan losses 150,000 100,000 ----------- ----------- Net interest income after provision for loan losses 4,122,711 4,541,675 ----------- ----------- Non-interest income: Fees and service charges 107,978 114,156 Miscellaneous 50,979 72,430 ----------- ----------- Total non-interest income 158,957 186,586 ----------- ----------- Non-interest expenses: Salaries and employee benefits 1,323,105 1,244,832 Net occupancy expense of premises 198,103 164,787 Equipment 195,719 182,285 Advertising 42,947 39,937 Loss on foreclosed real estate 64,625 48,267 Federal insurance premium 175,073 181,814 Amortization of intangibles 30,325 30,325 Miscellaneous 835,314 479,389 ----------- ----------- Total non-interest expenses 2,865,211 2,371,636 ----------- ----------- Income before income taxes 1,416,457 2,356,625 Income taxes 212,377 814,318 ----------- ----------- Net income $ 1,204,080 $ 1,542,307 =========== =========== Net income per common share and common stock equivalents $ .35 $ .46 =========== =========== Dividends per common share $ .225 $ .175 =========== =========== Weighted average number of common shares and common stock equivalents outstanding 3,441,860 3,350,791 =========== =========== See notes to consolidated financial statements.
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PAMRAPO BANCORP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF CASH FLOWS ------------------------------------ (Unaudited) Three Months Ended March 31, --------------------------- 1996 1995 ------------ ------------ Cash flows from operating activities: Net income $ 1,204,080 $ 1,542,307 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation of premises and equipment and investment in real estate 80,072 81,952 Amortization of deferred fees, premiums and discounts, net (38,871) (12,331) Loss on sale of foreclosed real estate 1,610 4,135 Provision for loan losses 150,000 100,000 Provision for losses on foreclosed real estate 30,000 30,000 Decrease (increase) in interest receivable, net (20,296) 84,532 (Increase) in other assets (392,332) (19,023) Increase in other liabilities 48,930 884,409 Amortization of intangibles 30,325 30,325 Amortization of cost of stock contributed to Management Recognition and Retention Plan and Trust - 4,149 Reduction in debt of Employee Stock Ownership Plan 49,593 49,593 ------------ ------------ Net cash provided by operating activities 1,143,111 2,780,048 ------------ ------------ Cash flows from investing activities: Proceeds from maturities of securities available for sale - 5,000,000 Purchases of securities available for sale (2,000,000) - Principal repayments on securities available for sale 777,427 176,638 Principal repayments on mortgage-backed securities held to maturity 3,271,459 3,187,557 Purchase of loans - (62,000) Sale of student loans 220,716 172,072 Net change in loans receivable 3,210,980 (477,966) Proceeds from sale of foreclosed real estate 179,605 89,365 Additions to premises and equipment (47,710) (102,048) (Purchase) of Federal Home Loan Bank of New York stock - (48,000) ------------ ------------ Net cash provided by investing activities 5,612,477 7,935,618 ------------ ------------ Cash flows from financing activities: Net (decrease) increase in deposits 3,174,468 (5,410,087) Repayment of borrowings (53,954) (51,215) Net (decrease) in advances from Federal Home Loan Bank of New York (4,000,000) (5,000,000) Increase in advance payments by borrowers for taxes and insurance 151,129 158,790 Purchase of treasury stock (3,047,500) - Proceeds from sale of treasury stock 327,973 721,382 Cash dividends paid (776,020) (593,781) ------------ ------------ Net cash (used in) financing activities (4,223,904) (10,174,911) ------------ ------------ Net increase in cash and cash equivalents 2,531,684 540,755 Cash and cash equivalents - beginning 13,893,609 12,134,632 ------------ ------------ Cash and cash equivalents - ending $ 16,425,293 $ 12,675,387 ============ ============ See notes to consolidated financial statements.
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PAMRAPO BANCORP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF CASH FLOWS ------------------------------------ (Unaudited) Three Months Ended March 31, --------------------------- 1996 1995 ------------ ------------ Supplemental information: Increase in unrealized (loss) on securities available for sale, net $ (49,522) $ (173,869) ============ ============ Transfer of loans receivable to foreclosed real estate $ 993,698 $ 120,892 ============ ============ Loans to facilitate sale of foreclosed real estate $ 164,000 $ 100,000 ============ ============ Debt incurred in connection with purchase of office building $ - $ 325,000 ============ ============ Cash paid during the period for: Income taxes $ - $ 285,161 ============ ============ Interest on deposits and borrowings $ 2,902,734 $ 2,795,287 ============ ============ See notes to consolidated financial statements.
- 4 - 7 PAMRAPO BANCORP, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS ------------------------------------------ 1. PRINCIPLES OF CONSOLIDATION - - ------------------------------- The consolidated financial statements include the accounts of Pamrapo Bancorp, Inc. (the "Corporation"), and its wholly owned subsidiaries, Pamrapo Savings Bank, SLA (the "Bank") and Pamrapo Service Corp, Inc. The Corporation's business is conducted principally through the Bank. All significant intercompany accounts and transactions have been eliminated in consolidation. 2. BASIS OF PRESENTATION - - ------------------------ The accompanying unaudited consolidated financial statements were prepared in accordance with instructions for Form 10-Q and regulation S-X and do not include information or footnotes necessary for a complete presentation of financial condition, results of operations, and cash flows in conformity with generally accepted accounting principles. However, in the opinion of management, all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation of the consolidated financial statements have been included. The results of operations for the three months ended March 31, 1996, are not necessarily indicative of the results which may be expected for the entire fiscal year. 3. NET INCOME PER COMMON SHARE - - ------------------------------- Net income per common share is based on the weighted average number of common shares actually outstanding plus the shares that would be outstanding assuming the exercise of dilutive stock options, all of which are considered to be common stock equivalents. The number of common shares that would be issued from the exercise of stock options has been reduced by the number of common shares that could have been purchased from the proceeds at the average market price of the Corporation's common stock. - 5 - 8 PAMRAPO BANCORP, INC. AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS --------------------------------------------- CHANGES IN FINANCIAL CONDITION - - ------------------------------ The Corporation's assets at March 31, 1996 totalled $368.4 million, which represents a decrease of $3.0 million or .81% as compared with $371.4 million at December 31, 1995. Securities available for sale at March 31, 1996 increased $1.2 million or 4.23% to $29.6 million when compared with $28.4 million at December 31, 1995. The increase during the three months ended March 31, 1996 resulted primarily from purchases of securities available for sale of $2.0 million which offset repayments on securities available for sale of $777,000. Investment securities remained unchanged at $99,000 at March 31, 1996 and December 31, 1995. Mortgage-backed securities decreased $3.3 million or 3.42% to $93.3 million at March 31, 1996 when compared to $96.6 million at December 31, 1995, as a result of principal repayments during the three months ended March 31, 1996. Net loans amounted to $213.8 million at March 31, 1996 as compared to $218.1 million at December 31, 1995, which represents a decrease of $4.3 million or 1.97%. The decrease, during the three months ended March 31, 1996, resulted primarily from the transfer of $1.0 million in loans to foreclosed real estate and loan principal repayments exceeding loan originations by $3.2 million. Foreclosed real estate increased from $1.5 million at December 31, 1995 to $2.1 million at March 31, 1996. At March 31, 1996, foreclosed real estate consisted of nineteen properties, five of which, with a combined book value of $622,000, are under contract for sale. Total deposits at March 31, 1996 increased $3.2 million or 1.07% to $302.1 million when compared with $298.9 million at December 31, 1995. Advances from the Federal Home Loan Bank of New York ("FHLB") amounted to $3.6 million and $7.6 million at March 31, 1996 and December 31, 1995, respectively. The decrease, during the three months ended March 31, 1996, resulted from a decrease in short-term advances from the FHLB of $4.0 million. Stockholders' equity totalled $57.1 million and $59.4 million at March 31, 1996 and December 31, 1995, respectively. During the three months ended March 31, 1996, the Corporation repurchased 132,500 shares of its common stock at $23.00 per share, totalling $3.0 million, under the stock repurchase program and issued 56,930 shares of its common stock out of treasury stock for $328,000 as a result of the excercise of stock options by the directors, officers and employees of the Corporation and the Bank. COMPARISON OF OPERATING RESULTS FOR THE - - --------------------------------------- THREE MONTHS ENDED MARCH 31, 1996 AND 1995 - - ------------------------------------------- Net income decreased $338,000, or 21.92% to $1.204 million for the three months ended March 31, 1996 compared with $1.542 million for the same 1995 period. The decrease in net income during the 1996 period resulted from decreases in total interest income and non-interest income, along with increases in total interest expense, non-interest expenses and provision for loan losses, which were partially offset by a decrease in income taxes. - 6 - 9 PAMRAPO BANCORP, INC. AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS --------------------------------------------- COMPARISON OF OPERATING RESULTS FOR THE - - --------------------------------------- THREE MONTHS ENDED MARCH 31, 1996 AND 1995 (Cont'd.) - - ------------------------------------------- Interest income on loans decreased $182,000 or 3.55% to $4.9 million during the three months ended March 31, 1996 when compared with $5.1 million during the same 1995 period. The decrease during the 1996 period resulted from a decrease in the yield earned on the loan portfolio along with a decrease in the average balance of loans outstanding. Interest on mortgage-backed securities decreased $48,000 or 2.38%, to $1.96 million during the three months ended March 31, 1996 when compared with $2.01 million for the same 1995 period. The decrease during the 1996 period resulted primarily from a decrease in the average balance of mortgage-backed securities outstanding. Interest earned on investments and other interest-earning assets decreased by $17,000 or 5.80% to $276,000 during the three months ended March 31, 1996, when compared to $293,000 during the same 1995 period primarily due to a decrease in the average balance of such assets outstanding. Interest expense on deposits increased $282,000 or 11.23% to $2.8 million during the three months ended March 31, 1996 when compared to $2.5 million during the same 1995 period. Such increase was primarily attributable to an increase in the cost of such deposits. Interest expense on advances and other borrowed money decreased by $159,000 or 59.11% to $110,000 during the three months ended March 31, 1996 when compared with $269,000 during the same 1995 period, primarily due to a decrease in the average balance of advances outstanding from the FHLB. At March 31, 1996 and 1995, and December 31, 1995 and 1994, total advances and other borrowed money totalled $4.0 million, $13.2 million, $8.0 million and $17.9 million, respectively. Net interest income decreased $369,000 or 7.95% during the three months ended March 31, 1996 when compared with the same 1995 period. Such decrease was due to a decrease in total interest income of $246,000 along with an increase in total interest expense of $123,000. During the three months ended March 31, 1996 and 1995, the Bank provided $150,000 and $100,000, respectively, as a provision for loan losses. The allowance for loan losses is based on management's evaluation of the risk inherent in its loan portfolio and gives due consideration to the changes in general market conditions and in the nature and volume of the Bank's loan activity. The Bank intends to continue to provide for loan losses based on its periodic review of the loan portfolio and general market conditions. At March 31, 1996 and December 31, 1995, the Bank's non-performing loans, which were delinquent ninety days or more, totalled $9.1 million or 2.47% of total assets and $10.9 million or 2.94% of total assets, respectively. At March 31, 1996, $2.8 million of non-performing loans were accruing interest and $6.3 million were on non-accrual status. During the three months ended March 31, 1996 and 1995, the Bank transferred $1.0 million and $121,000, respectively, of loans to foreclosed real estate. The non-performing loans primarily consist of one-to-four family mortgage loans. During the three months ended March 31, 1996 and 1995, the Bank charged off loans aggregating $174,000 and $115,000, respectively. The allowance for loan losses amounted to $2.731 million at March 31, 1996, representing 1.25% of total loans and 29.90% of loans delinquent ninety days or more, and $2.725 million at December 31, 1995, representing 1.22% of total loans and 25.09% of loans delinquent ninety days or more. - 7 - 10 PAMRAPO BANCORP, INC. AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS --------------------------------------------- COMPARISON OF OPERATING RESULTS FOR THE - - --------------------------------------- THREE MONTHS ENDED MARCH 31, 1996 AND 1995 (Cont'd.) - - ------------------------------------------- Non-interest income decreased $28,000 or 14.97% to $159,000 during the three months ended March 31, 1996 from $187,000 during the same 1995 period. The decrease resulted from decreases in fees and service charges and miscellaneous income of $6,000 and $22,000, respectively. Non-interest expenses increased $493,000 or 20.78% million during the three months ended March 31, 1996 when compared with the same 1995 period. Salaries and employee benefits, net occupancy expense, equipment, advertising, loss on foreclosed real estate and miscellaneous expenses increased $78,000, $33,000, $14,000, $3,000, $16,000 and $356,000, respectively, which was sufficient to offset a decrease in federal insurance premium of $7,000 during the 1996 period when compared to the same 1995 period. The increase in miscellaneous expenses resulted primarily from an increase in correspondent bank service charges and non-recurring expenses of approximately $250,000 related to the 1996 Annual Meeting of Stockholders. Income taxes totalled $212,000 and $814,000 during the three months ended March 31, 1996 and 1995, respectively. The decrease during the 1996 period resulted from a decrease in pre-tax income of $940,000 and a reduction in income tax expense of approximately $293,000 resulting from the excercise of non-statutory stock options. LIQUIDITY AND CAPITAL RESOURCES - - ------------------------------- The Bank is required to maintain minimum levels of liquid assets as defined by Office of Thrift Supervision (the "OTS") regulations. This requirement, which may vary from time to time, depending upon economic conditions and deposit flows, is based upon a percentage of deposits and short-term borrowings. The required ratio currently is 5%. The Bank's liquidity averaged 11.05% during the month of March 1996. The Bank adjusts its liquidity levels in order to meet funding needs for deposit outflows, payment of real estate taxes from escrow accounts on mortgage loans, repayment of borrowings, when applicable, and loan funding commitments. The Bank also adjusts its liquidity level as appropriate to meet its asset/liability objectives. The Bank's primary sources of funds are deposits, amortization and prepayment of loans and mortgage-backed securities principal, FHLB-NY advances, maturities of investment securities and funds provided from operations. While scheduled loan and mortgage-backed securities amortization and maturing investment securities are a relatively predictable source of funds, deposit flow and loan and mortgage-backed securities prepayments are greatly influenced by market interest rates, economic conditions and competition. The Bank invests its excess funds in federal funds and overnight deposits with the FHLB, which provides liquidity to meet lending requirements. Federal funds sold and interest-bearing deposits at March 31, 1996 amounted to $100,000 and $7.7 million, respectively. - 8 - 11 PAMRAPO BANCORP, INC. AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS --------------------------------------------- LIQUIDITY AND CAPITAL RESOURCES (Cont'd.) - - ------------------------------- The Bank's liquidity, represented by cash and cash equivalents, is a product of its operating, investing and financing activities. These activities are summarized below:
Three Months Ended March 31, ------------------- 1996 1995 -------- -------- (In Thousands) Cash and cash equivalents - beginning $ 13,894 $ 12,135 -------- -------- Operating activities: Net income 1,204 1,542 Adjustments to reconcile net income to net cash provided by operating activities (61) 1,238 -------- -------- Net cash provided by operating activities 1,143 2,780 Net cash provided by investing activities 5,612 7,935 Net cash (used in) financing activities (4,224) (10,175) -------- -------- Net increase in cash and cash equivalents 2,531 540 -------- -------- Cash and cash equivalents - ending $ 16,425 $ 12,675 ======== ========
Cash was generated by operating activities during the three months ended March 31, 1996. The primary source of cash was net income. Funds used in financing activities resulted primarily from a $4.0 million reduction in short-term FHLB advances and the utilization of $3.0 million to repurchase 132,500 shares of its common stock at a price of $23.00 per share, which more than offset a net increase in deposits of $3.2 million. Additionally, during the three months ended March 31, 1996, the Corporation issued 56,930 shares of its common stock out of treasury stock for $328,000 as a result of the excercise of stock options by the directors, officers and employees of the Corporation and the Bank. Cash dividends paid during the three months ended March 31, 1996 and 1995 amounted to $776,000 and $594,000, respectively. The primary sources of investing activity of the Bank are lending and the purchase of mortgage-backed securities. Net loans amounted to $213.8 million and $218.1 million at March 31, 1996 and December 31, 1995, respectively. Securities available for sale totalled $29.6 million and $28.4 million at March 31, 1996 and December 31, 1995, respectively. Mortgage-backed securities held to maturity totalled $93.3 million and $96.6 million at March 31, 1996 and December 31, 1995, respectively. In addition to funding new loan production and the purchase of mortgage-backed securities through operations and financing activities, such activities were funded by principal repayments on existing loans and mortgage-backed securities. - 9 - 12 PAMRAPO BANCORP, INC. AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS --------------------------------------------- LIQUIDITY AND CAPITAL RESOURCES (Cont'd.) - - ------------------------------- Liquidity management is both a daily and long-term function of business management. Excess liquidity is generally invested in short-term investments, such as federal funds sold and interest-bearing deposits. If the Bank requires funds beyond its ability to generate them internally, borrowing agreements exist with the FHLB-NY which provide an additional source of funds. At March 31, 1996, advances from the FHLB amounted to $3.6 million. The Bank anticipates that it will have sufficient funds available to meet its current loan commitments. At March 31, 1996, the Bank has outstanding commitments to originate mortgage loans of $12.0 million. Certificates of deposit scheduled to mature in one year or less at March 31, 1996, totalled $112.9 million. Management believes that, based upon its experience and the Bank's deposit flow history, a significant portion of such deposits will remain with the Bank. Under OTS regulations, three separate measurements of capital adequacy (the "Capital Rule") are required. The Capital Rule requires each savings institution to maintain tangible capital equal to at least 1.5% and core capital equal to 3.0% of its adjusted total assets. The core capital requirement has been effectively increased to 4.0% since under OTS regulations an institution with less than 4.0% core capital is deemed to be "undercapitalized". The Capital Rule further requires each savings institution to maintain total capital equal to at least 8.0% of its risk- weighted assets. The following table sets forth the Bank's capital position at March 31, 1996, as compared to the minimum regulatory capital requirements:
Percent of Adjusted Amount Assets -------- ---------- (Dollars in Millions) Tangible Capital: Requirement $ 5,546 1.50% Actual 46,380 12.54 -------- ------- Excess $ 40,834 11.04% ======== ======= Core Capital: Requirement $ 14,790 4.00 Actual 46,380 12.54 -------- ------- Excess $ 31,590 8.54% ======== ======= Risk-based Capital: Requirement $ 14,623 8.00% Actual 48,526 26.55 -------- ------- Excess $ 33,903 18.55% ======== =======
- 10 - 13 PAMRAPO BANCORP, INC. AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS --------------------------------------------- LIQUIDITY AND CAPITAL RESOURCES (Cont'd.) - - ------------------------------- The OTS issued final regulations which set forth the methodology for calculating an interest rate risk component that will be incorporated in the OTS regulatory capital rules. Under the new regulations, only savings associations with "above normal" interest rate risk exposure would be required to maintain additional capital. The dollar amount of capital would be an addition to a savings association's existing risk-based capital requirement. The OTS recently deferred implementation of this regulation. It is estimated under the new regulation, the Bank's risk-based capital requirement would increase by approximately $2.1 million at March 31, 1996, which would not affect the Bank's compliance with OTS capital regulations. The Bank is considered a "Well-Capitalized" institution under the OTS' prompt corrective action regulations. SUPERVISORY EXAMINATION - - ----------------------- The Bank's financial statements are periodically examined by the OTS, Federal Deposit Insurance Corporation and New Jersey Department of Banking, as part of their regulatory oversight of the thrift industry. As a result of these examinations, the regulators can direct that the Bank make adjustments to its financial statements based on their findings. RECAPITALIZATION OF SAIF - - ------------------------ Legislative initiatives regarding the recapitalization of the Savings Association Insurance Fund ("SAIF") of the Federal Deposit Insurance Corporation ("FDIC"), deposit insurance premiums, FICO bond interest payments, the merger of SAIF and Bank Insurance Fund ("BIF"), financial industry regulatory structure, bad debt recapture and revision of thrift and bank charters are still pending before Congress. Management cannot predict the ultimate impact any final legislation or regulatory actions may have on the operations of the Corporation. Without passage of legislation addressing the FDIC insurance premium disparity, the Bank, like other thrifts, will continue to pay deposit insurance premiums significantly higher than banks. As long as such premium differential continues, it may have adverse consequences on the Corporation's earnings and the Corporation may be placed at a substantial competitive disadvantage to commercial banking organizations insured by the BIF. - 11 - 14 PAMRAPO BANCORP, INC. PART II ITEM 1. Legal Proceedings ----------------- On February 15, 1994, Bank Pulska Kasa Opieki S.A. filed a complaint in the United States District Court, District of New Jersey against the Bank and Chemical Banking Corporation, Civil No. 94-663. See Form 10-K for the fiscal year ended December 31, 1995 for further discussion. Neither the Corporation nor the Bank are involved in any pending legal proceedings other than routine legal proceedings occurring in the ordinary course of business, which involve amounts which in the aggregate are believed by management to be immaterial to the financial condition of the Corporation and the Bank, except as discussed above. ITEM 2. Changes in Securities --------------------- Not applicable. ITEM 3. Defaults Upon Senior Securities ------------------------------- Not applicable. ITEM 4. Submission of Matters to a Vote of Security Holders --------------------------------------------------- The Annual Stockholders' Meeting was held on March 29, 1996. The following matters were submitted to the stockholders: 1. Election of three directors: A. Directors elected at the meeting for terms to expire in 1999: Number of Shares ------------------- For Withheld -------- -------- Mr. William J. Campbell 1,778,780* 118,271 Mr. Daniel J. Massarelli 1,778,780* 118,271 Mr. Francis J. O'Donnell 1,778,334* 118,717 The following directors' term of office as a director continued after the meeting: (i) Dr. Jaime Portela (ii) Mr. James Kennedy (iii) Mr. John A. Morecraft (iv) Mr. Girard P. Seymour, Jr. - 12 - 15 PAMRAPO BANCORP, INC. PART II (Cont'd.) Item 4.Submission of Matters to a Vote of Security Holders (Cont'd.) --------------------------------------------------- B. Other persons receiving votes as directors: Number of Shares ----------------- For Withheld ------- -------- Mr. Roger T. Conlan 1,026,677 31,918 Dr. Gerald R. Mattia 373,527 3,202 Mr. Montoro J. Sagrestano 1,026,463 32,132 Number of Shares ---------------------------------- For Against Abstained 2. The ratification of --------- --------- --------- Radics & Co., LLC, as independent auditors of the Corporation for the Fiscal year ending December 31, 1996. 2,914,361* 28,278 12,539 3. To request and recommend that the Board of Directors commence taking those steps necessary and appropriate to facilitate and promote a sale of Pamrapo Bancorp or its bank subsidiary, in a transaction subject to stockholders' approval. 1,385,185 1,545,095* 25,298 * Excludes 132,500 shares which were purchased during the three months ended March 31, 1996 and were ineligible to be voted. ITEM 5. Exhibits and Reports on Form 8-K -------------------------------- (a) The following Exhibits are filed as part of this report. 3.1 Certification of Incorporation of Pamrapo Bancorp, Inc.* 3.2 By-Laws of Pamrapo Bancorp, Inc.* 11.0 Computation of earnings per share (filed herewith). 27.0 Financial data schedule (filed herewith). *Incorporated herein by reference to Form S-1, Registration Statement, as amended, filed on August 11, 1989, Registration Number 33-30370. (b) Reports on Form 8-K None - 13 - 16 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 thereunto duly authorized. PAMRAPO BANCORP, INC. Date: May 7, 1996 By:/s/ William J. Campbell ------------------------- ---------------------------------- William J. Campbell President and Chief Executive Officer Date: May 7, 1996 By:/s/ Gary J. Thomas ------------------------- ----------------------------------- Gary J. Thomas Vice President, Chief Financial Officer - 14 - EX-11 2 1
Exhibit 11.0 PAMRAPO BANCORP, INC. AND SUBSIDIARIES STATEMENT RE COMPUTATION OF EARNINGS PER SHARE ---------------------------------------------- Three Months Ended March 31, 1996 ----------------- Net income $ 1,204,080 ============ Weighted average shares outstanding 3,437,596 Common stock equivalents due to dilutive effect on stock options 4,264 ------------ Total weighted average common shares and equivalent outstanding 3,441,860 ============ Primary earnings per share $ 0.35 ============ Total weighted average common shares and equivalents outstanding for fully diluted computation 3,441,860 =========== Fully diluted earnings per share $ 0.35 ============
- 15 - EX-27 3
9 This legend contains summary information extracted from the Form 10-Q and is qualified in its entirety by reference to such financial statements. 0000854071 PAMRAPO BANCORP, INC. 3-MOS DEC-31-1995 MAR-31-1996 8,625,293 7,700,000 100,000 0 29,557,272 93,371,230 92,396,000 216,533,661 2,731,234 368,393,807 302,075,232 3,989,001 5,245,541 0 0 0 34,500 57,049,533 368,393,807 4,941,218 2,234,227 0 7,175,445 2,793,189 2,902,734 4,272,711 150,000 0 2,865,211 1,416,457 1,416,457 0 0 1,204,080 0.35 0.35 0 6,348,000 2,787,000 0 0 0 173,889 0 2,731,234 0 0 0 Not contained in the Form 10-Q.
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