-----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, P7nxY1Oxzx9HhDZVF5UrbfdTjHES6XdY71xr7r7OiVOmGV3GkOcPejmG4cyDjVTY COdg/Nns1ygj21xfJTVPXw== 0000950109-00-002176.txt : 20000515 0000950109-00-002176.hdr.sgml : 20000515 ACCESSION NUMBER: 0000950109-00-002176 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20000331 FILED AS OF DATE: 20000512 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PAMRAPO BANCORP INC CENTRAL INDEX KEY: 0000854071 STANDARD INDUSTRIAL CLASSIFICATION: SAVINGS INSTITUTIONS, NOT FEDERALLY CHARTERED [6036] IRS NUMBER: 222984813 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-18014 FILM NUMBER: 630335 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 FORM 10-Q 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, 2000 -------------------------------------------------- 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 Number) 611 Avenue C, Bayonne, New Jersey 07002 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, 201-339-4600 including area code ------------------------------------------------ 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, 2000. $.01 par value common stock - 2,637,924 shares outstanding PAMRAPO BANCORP, INC. AND SUBSIDIARIES INDEX Page PART I - FINANCIAL INFORMATION Number ----------- Item 1: Financial Statements Consolidated Statements of Financial Condition at March 31, 2000 and December 31, 1999 (Unaudited) 1 Consolidated Statements of Income for the Three Months Ended March 31, 2000 and 1999 (Unaudited) 2 Consolidated Statements of Comprehensive Income for the Three Months Ended March 31, 2000 and 1999 (Unaudited) 3 Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2000 and 1999 (Unaudited) 4 - 5 Notes to Consolidated Financial Statements 6 Item 2: Management's Discussion and Analysis of Financial Condition and Results of Operations 7 - 10 Item 3: Quantitative and Qualitative Disclosure About Market Risk 11 - 12 PART II - OTHER INFORMATION 13 - 14 SIGNATURES 15
PAMRAPO BANCORP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION ---------------------------------------------- (Unaudited) March 31, December 31, -------------- ------------- ASSETS 2000 1999 - ------ -------------- ------------- Cash and amounts due from depository institutions $ 12,902,355 $ 11,862,080 Interest-bearing deposits in other banks 10,131,064 19,200,000 ------------- ------------- Total cash and cash equivalents 23,033,419 31,062,080 Securities available for sale 6,048,243 6,428,631 Investment securities held to maturity; estimated fair value of $7,596,000 (2000) 7,996,030 7,995,941 and $7,586,000 (1999) Mortgage-backed securities held to maturity; estimated fair value of $118,769,000 (2000) and $118,324,000 (1999) 122,699,029 120,823,781 Loans receivable 271,689,883 268,280,380 Foreclosed real estate 456,196 456,196 Investment in real estate 252,076 255,769 Premises and equipment 4,417,078 4,471,586 Federal Home Loan Bank stock, at cost 3,496,200 3,243,200 Interest receivable 2,636,674 2,553,908 Excess of cost over assets acquired 30,324 60,649 Other assets 2,648,670 2,388,330 ------------- ------------- Total assets $ 445,403,822 $ 448,020,451 LIABILITIES AND STOCKHOLDERS' EQUITY - ------------------------------------ Liabilities: Deposits $ 365,614,105 $ 361,924,668 Advances from Federal Home Loan Bank of New York 25,583,100 30,583,100 Other borrowed money 223,696 229,696 Advance payments by borrowers for taxes and insurance 2,788,827 2,946,639 Other liabilities 4,509,664 4,082,384 ------------- ------------ Total liabilities 398,719,392 399,766,487 ------------- ------------ 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; shares outstanding 2,647,924 (2000) and 2,727,924 (1999) 34,500 34,500 Paid-in capital in excess of par value 18,906,768 18,906,768 Retained earnings - substantially restricted 45,646,321 45,474,883 Unrealized (loss) on securities available for sale (69,723) (46,874) Treasury stock, at cost; 802,076 shares and 722,076 shares (1999) (17,833,436) (16,115,313) -------------- ------------- Total stockholders' equity 46,684,430 48,253,964 ------------- ------------- Total liabilities and stockholders' equity $ 445,403,822 $ 448,020,451 ------------- -------------
See notes to consolidated financial statements. - 1 - PAMRAPO BANCORP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOM -------------------------------------- (Unaudited) Three Months Ended March 31, ------------------------ 2000 1999 ------------------------ Interest income: Loans $5,592,076 $5,088,960 Mortgage-backed securities 2,093,945 2,050,070 Investments and other interest-earning assets 421,728 328,939 ---------- ---------- Total interest income 8,107,749 7,467,969 Interest expense: ---------- ---------- Deposits 3,178,131 2,788,714 Advances and other borrowed money 448,043 419,206 ---------- ---------- Total interest expense 3,626,174 3,207,920 ---------- ---------- Net interest income 4,481,575 4,260,049 Provision for loan losses 60,000 75,000 ---------- ---------- Net interest income after provision for loan losses 4,421,575 4,185,049 ---------- ---------- Non-interest income: Fees and service charges 250,532 245,482 Miscellaneous 128,631 122,561 Total non-interest income 379,163 368,043 ---------- ---------- Non-interest expenses: Salaries and employee benefits 1,667,888 1,541,789 Net occupancy expense of premises 300,012 291,349 Equipment 282,631 269,099 Advertising 133,320 54,250 Loss on foreclosed real estate 7,194 4,875 Federal insurance premium 18,970 48,336 Amortization of intangibles 30,325 30,325 Miscellaneous 662,995 609,586 ---------- ---------- Total non-interest expenses 3,103,335 2,849,609 ---------- ---------- Income before income taxes 1,697,403 1,703,483 Income taxes 612,431 613,776 ---------- ---------- Net income $1,084,972 $1,089,707 ---------- ---------- Net income per common share: Basic/diluted $ 0.40 $ 0.38 ---------- ---------- Dividends declared per common share $ 0.345 $ 0.3125 ---------- ---------- Weighted average number of common shares and common stock equivalents outstanding: Basic/diluted 2,683,034 2,842,924 See notes to consolidated financial statements. - 2 - PAMRAPO BANCORP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME ----------------------------------------------- (Unaudited) Three Months Ended March 31, ----------------------------- 2000 1999 ----------------------------- Net income $ 1,084,972 $ 1,089,707 ----------- ----------- Other comprehensive (loss), net of income taxes: Gross unrealized holding loss on securities securities available for sale (35,649) (42,959) Deferred income tax benefit 12,800 15,500 ----------- ----------- Other comprehensive (loss) (22,849) (27,459) ----------- ----------- Comprehensive income $ 1,062,123 $ 1,062,248 =========== =========== See notes to consolidated financial statements. - 3 - PAMRAPO BANCORP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS ------------------------------------- (Unaudited)
Three Months Ended March 31, ----------------------------------- 2000 1999 ----------------------------------- Cash flows from operating activities: Net income $ 1,084,972 $ 1,089,707 Adjustments to reconcile net income to cash provided by operating activities: Depreciation of premises and equipment and investment in real estate 149,136 151,902 Accretion of deferred fees, premiums and discounts, net (11,696) 10,203 Provision for loan losses 60,000 75,000 Provision for losses on foreclosed real estate -- 25,000 (Gain) on sales of foreclosed real estate -- (25,512) (Increase) in interest receivable (82,766) (81,184) (Increase) in other assets (247,540) (182,323) Increase in other liabilities 427,280 504,496 Amortization of intangibles 30,325 30,325 ----------- ---------- Net cash provided by operating activities 1,409,711 1,597,614 ----------- ---------- Cash flow from investing activities: Principal repayments on securities available for sale 354,054 351,610 Purchases of securities available for sale (18,382) (15,474) Principal repayments on mortgage-backed securities held to maturity 4,281,890 9,899,421 Purchases of mortgage-backed securities held to maturity (6,207,705) (15,081,080) Proceeds from sales of student loans 33,633 41,809 Net change in loans receivable (3,431,895) (8,752,654) Proceeds from sales of foreclosed real estate -- 133,385 Additions to premises and equipment (90,935) (101,660) Purchase of Federal Home Loan Bank of New York stock (253,000) (146,000) ----------- ---------- Net cash (used in) investing activities (5,332,340) (13,670,643)
See notes to consolidated financial statements. - 4 - PAMRAPO BANCORP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS ------------------------------------- (Unaudited)
Three Months Ended March 31, ---------------------------- 2000 1999 ---------------------------- Cash flows from financing activities: Net increase in deposits $ 3,689,437 $ 11,629,793 Net (decrease) in advances from Federal Home Loan Bank of New York (5,000,000) -- Net (decrease) in other borrowed money (6,000) (5,541) Net (decrease) increase in payments by borrowers for taxes and insurance (157,812) 16,348 Cash dividends paid (913,534) (888,414) Purchase of treasury stock (1,718,123) -- ------------ ------------ Net cash (used in) provided by financing activities (4,106,032) 10,752,186 ------------ ------------ Net (decrease) in cash and cash equivalents (8,028,661) (1,320,843) Cash and cash equivalents - beginning 31,062,080 28,047,045 ------------ ------------ Cash and cash equivalents - ending $ 23,033,419 $ 26,726,202 ------------ ------------ Supplemental information: Loans to facilitate sales of foreclosed real estate $ -- $ 270,000 ------------ ------------ Cash paid during the period for: Interest on deposits and borrowings $ 3,626,174 $ 3,207,920 ------------ ------------ Income taxes $ -- $ -- ------------ ------------
See notes to consolidated financial statements. - 5 - 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 "Company") 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 regulations 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, 2000, are not necessarily indicative of the results which may be expected for the entire fiscal year. 3. NET INCOME PER COMMON SHARE - -------------------------------- Basic net income per common share is based on the weighted average number of common shares actually outstanding. Diluted net income per share is calculated by adjusting the weighted average number of shares of common stock outstanding to include the effect of contracts or securities exercisable or which could be converted into common stock, if dilutive, using the treasury stock method. There were no potentially dilutive contracts or securities outstanding at either March 31, 2000 or 1999 or during the three months then ended. - 6 - PAMRAPO BANCORP, INC. AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS --------------------------------------------- Changes in Financial Condition The Company's assets at March 31, 2000 totalled $445.4 million, which represents a decrease of $2.6 million or 0.58% as compared with $448.0 million at December 31, 1999. Securities available for sale at March 31, 2000 decreased $381,000 or 5.93% to $6.0 million when compared with $6.4 million at December 31, 1999. The decrease during the three months ended March 31, 2000, resulted primarily from repayments on securities available for sale of $354,000 along with an increase in net unrealized loss of $36,000. Investment securities held to maturity remained unchanged at $8.0 million at March 31, 2000 and December 31, 1999. Mortgage-backed securities held to maturity increased $1.9 million or 1.57% to $122.7 million at March 31, 2000 when compared to $120.8 million at December 31, 1999. The increase during the three months ended March 31, 2000, resulted from purchases of $6.2 million, which were sufficient to offset principal repayments of $4.3 million. Net loans amounted to $271.7 million at March 31, 2000, as compared to $268.3 million at December 31, 1999, which represents an increase of $3.4 million or 1.27%. The increase, during the three months ended March 31, 2000, resulted primarily from loan originations exceeding principal repayments. Foreclosed real estate remained unchanged at $456,000 at March 31, 2000 and December 31, 1999, respectively. At March 31, 2000, foreclosed real estate consisted of six properties of which two properties with a combined book value of $171,000 are under contract for sale. Total deposits at March 31, 2000 totalled $365.6 million as compared with $361.9 million at December 31, 1999, representing an increase of $3.7 million or 1.02%. Advances from the Federal Home Loan Bank ("FHLB") amounted to $25.6 million and $30.6 million at March 31, 2000 and December 31, 1999, respectively. The $5.0 million decline was the result of debt repayment of $10.0 million which more than offset new borrowings of $5.0 million. Stockholders' equity totalled $46.7 million and $48.3 million at March 31, 2000 and December 31, 1999, respectively. The decrease of $1.6 million was primarily the result of the Company's repurchase of 80,0000 shares of its common stock at an aggregate cost of $1.7 million. Comparison of Operating Results for the Three Months Ended March 31, 1999 and 1998 Net income decreased $5,000 or .46% to $1.085 million for the three months ended March 31, 2000 compared with $1.090 million for the same 1999 period. The decrease in net income during the 2000 period resulted from increases in total interest expense and non-interest expenses, which were partially offset by increases in total interest income and non-interest income and a decrease in income taxes. Interest income on loans increased by $503,000 or 9.88% to $5.6 million during the three months ended March 31, 2000 when compared with $5.1 million for the same 1999 period. The increase during the 2000 period resulted from an increase of $27.2 million in the average balance of loans outstanding sufficient to offset a ten basis point decrease in the yield earned on the loan portfolio. Interest on mortgage-backed securities increased $44,000 or 2.15% to $2.094 million during the three - 7 - PAMRAPO BANCORP, INC. AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS --------------------------------------------- months ended March 31, 2000 when compared with $2.050 million for the same 1999 period. The increase during the 2000 period resulted primarily from an increase of four basis points in the yield earned on the mortgage-backed securities and an increase of $1.8 million in the average balance of such portfolio outstanding. Interest earned on investments and other interest-earning assets increased by $93,000 or 28.27% to $422,000 during the three months ended March 31, 2000, when compared to $329,000 during the same 1999 period primarily due to an increase of $1.5 million in the average balance of such assets outstanding along with a 110 basis point increase in the yield earned on such portfolio. The increased yield on investments and other interest-earning assets is indicative of higher market interest rates available on short-term investments. Interest expense on deposits increased $389,000 or 13.95% to $3.2 million during the three months ended March 31, 2000 when compared to $2.8 million during the same 1999 period. Such increase was primarily attributable to increases of sixteen basis points in the cost of interest-bearing deposits and $26.5 million in the average balance of interest-bearing deposits. Interest expense on advances and other borrowed money increased by $29,000 or 6.92% to $448,000 during the three months ended March 31, 2000 when compared with $419,000 during the same 1999 period, primarily due to an increase of $1.9 million in the average balance of advances outstanding from the FHLB along with a two basis point increase in the cost of advances and other borrowed money. Net interest income increased $222,000 or 5.21% during the three months ended March 31, 2000 when compared with the same 1999 period. Such increase was due to an increase in total interest income of $640,000, sufficient to offset an increase in total interest expense of $418,000. The Bank's net interest rate spread decreased from 3.79% in 1999 to 3.69% in 2000. The decrease in the interest rate spread resulted from an increase of sixteen basis points in the cost of interest-bearing liabilities sufficient to offset a six basis point increase in the yield earned on interest-earning assets. Net interest income increased despite the decline in interest rate spread as the interest income provided by the $30.5 million increase in average interest-earning assets exceeded the interest expense related to the $28.4 million increase in average interest-bearing liabilities. During the three months ended March 31, 2000 and 1999, the Bank provided $60,000 and $75,000, 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, 2000, December 31, 1999 and March 31, 1999, the Bank's non-performing loans, which were delinquent ninety days or more, totalled $3.9 million or 0.88% of total assets, $4.2 million or 0.94% of total assets and $5.1 million or 1.19% of total assets, respectively. At March 31, 2000, $1.2 million of non-performing loans were accruing interest and $2.7 million were on nonaccrual status. The non- performing loans primarily consist of one-to-four family mortgage loans. During the three months ended March 31, 2000 and 1999, the Bank charged off loans aggregating $22,000 and $1,000, respectively. The allowance for loan losses amounted to $2.0 million at March 31, 2000, representing 0.73% of total loans and 51.3% of loans delinquent ninety days or more and $2.0 million at December 31, 1999, representing 0.73% of total loans and 47.62% of loans delinquent ninety days or more. Non-interest income increased $11,000 or 2.99% to $379,000 during the three months ended March 31, 2000 from $368,000 during the same 1999 period. The increase resulted from increases in fees and service charges of $5,000 and miscellaneous income of $6,000. - 8 - PAMRAPO BANCORP, INC. AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS --------------------------------------------- Non-interest expenses increased by $253,000 or 8.88% to $3.1 million during the three months ended March 31, 2000 when compared with $2.8 million during the same 1999 period. Salaries and employee benefits, net occupancy expense, equipment, advertising, loss on foreclosed real estate and miscellaneous expenses increased $126,000, $9,000, $13,000, $79,000, $2,000 and $53,000, respectively, which was sufficient to offset a decrease in federal insurance premium of $29,000 during the 2000 period when compared with the same 1999 period. Income taxes totalled $612,000 and $614,000 during the three months ended March 31, 2000 and 1999, respectively. The decrease during the 2000 period resulted from a decrease in pre-tax income. Liquidity and Capital Resources The Bank is required to maintain minimum levels of liquid assets as defined by the 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 4%. The Bank's liquidity averaged 8.16% during the month of March 2000. 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 prepayments of loans and mortgage-backed securities principal, FHLB 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. Interest-bearing deposits at March 31, 2000 amounted to $10.1 million. The Bank's liquidity, represented by cash and cash equivalents, is a product of its operating, investing and financing activities. Cash was generated by operating activities during the three months ended March 31, 2000. The primary source of cash was net income. Cash dividends paid during the three months ended March 31, 2000 and 1999 amounted to $914,000 and $888,000, respectively. The primary sources of investing activity are lending and the purchase of mortgage-backed securities. Net loans amounted to $271.7 million and $268.3 million at March 31, 2000 and December 31, 1999, respectively. Securities available for sale totalled $6.0 million and $6.4 million at March 31, 2000 and December 31, 1999, respectively. Mortgage-backed securities held to maturity totalled $122.7 million and $120.8 million at March 31, 2000 and December 31, 1999, respectively. The nominal increase was due in part to a slow down in prepayments on existing portfolio pools thereby reducing reinvested funds. In addition to funding new loan production and mortgage-backed securities purchases through operating and financing activities, such activities were funded by principal repayments on existing loans and mortgage-backed securities. - 9 - PAMRAPO BANCORP, INC. AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS --------------------------------------------- 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 and interest-bearing deposits. If the Bank requires funds beyond its ability to generate them internally, borrowing agreements exist with the FHLB which provide an additional source of funds. At March 31, 2000, advances from the FHLB amounted to $25.6 million. The Bank anticipates that it will have sufficient funds available to meet its current loan commitments. At March 31, 2000, the Bank has outstanding commitments to originate loans of $12.6 million. Certificates of deposit scheduled to mature in one year or less at March 31, 2000, totalled $147.7 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 4.0% of its adjusted total assets. 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, 2000, as compared to the minimum regulatory capital requirements:
To Be Well Capitalized Under Prompt Minimum Capital Corrective Actual Requirements Actions Provisions -------------------- ------------------- --------------------- Amount Ratio Amount Ratio Amount Ratio ---------- --------- ---------- --------- --------- ---------- Total Capital (to risk-weighted assets) $ 44,389 20.04% $17,716 8.00% $22,146 10.00% Tier 1 Capital (to risk-weighted assets) 42,757 19.31% -- -- 13,287 6.00% Core (Tier 1) Capital (to adjusted total assets) 42,757 9.63% 17,768 4.00% 22,210 5.00% Tangible Capital (to adjusted total assets) 42,757 9.63% 6,663 1.50% -- --
- 10 - PAMRAPO BANCORP, INC. AND SUBSIDIARIES QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK Management of Interest Rate Risk. The ability to maximize net interest income is largely dependent upon the achievement of a positive interest rate spread that can be sustained during fluctuations in prevailing interest rates. Interest rate sensitivity is a measure of the difference between amounts of interest-earning assets and interest-bearing liabilities which either reprice or mature within a given period of time. The difference, or the interest rate repricing "gap", provides an indication of the extent to which an institution's interest rate spread will be affected by changes in interest rates. A gap is considered positive when the amount of interest-rate sensitive assets exceeds the amount of interest-rate sensitive liabilities, and is considered negative when the amount of interest rate sensitive liabilities exceeds the amount of interest-rate sensitive assets. Generally, during a period of rising interest rates, a negative gap within shorter maturities would adversely affect net interest income, while a positive gap within shorter maturities would result in an increase in net interest income, and during a period of falling interest rates, a negative gap within shorter maturities would result in an increase in net interest income while a positive gap within shorter maturities would result in a decrease in net interest income. Because the Bank's interest-bearing liabilities which mature or reprice within short periods exceed its interest-earning assets with similar characteristics, material and prolonged increases in interest rates generally would adversely affect net interest income, while material and prolonged decreases in interest rates generally would have a positive effect on net interest income. The Bank's current investment strategy is to maintain an overall securities portfolio that provides a source of liquidity and that contributes to the Bank's overall profitability and asset mix within given quality and maturity considerations. The securities portfolio is concentrated in U.S. Treasury and federal government agency securities providing high asset quality to the overall balance sheet mix. Securities classified as available for sale provide management with the flexibility to make adjustments to the portfolio given changes in the economic or interest rate environment, to fulfill unanticipated liquidity needs, or to take advantage of alternative investment opportunities. Net Portfolio Value. The Bank's interest rate sensitivity is monitored by management through the use of the OTDS model which estimates the change in the Bank's net portfolio value ("NPV") over a range of interest rate scenarios. NPV is the present value of expected cash flows from assets, liabilities, and off- balance sheet contracts. The NPV ratio, under any interest rate scenario, is defined as the NPV in that scenario divided by the market value of assets in the same scenario. The OTS produces its analysis based upon data submitted on the Bank's quarterly Thrift Financial Reports. The following table sets forth the Bank's NPV as of December 31, 1999, the most recent date the Bank's NPV was calculated by the OTS. - 11 - PAMRAPO BANCORP, INC. AND SUBSIDIARIES QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK NPV as Percent of Portfolio Change in Net Portfolio Value Value of Assets Interest Rates ------------------------------------ -------------------------- In Basis Points Dollar Percent NPV Change In (Rate Shock) Amount Change Change Ratio Basis Points - ---------------- ----------- ------------ ------------ --------- -------------- (Dollars in Thousands) 300 $ 21,887 $(28,747) (57) 5.17% (598) 200 31,639 (18,995) (38) 7.29 (386) 100 41,471 (9,163) (18) 9.34 (181) Static 50,634 -- -- 11.15 -- -100 58,068 7,434 15 12.55 140 -200 64,913 14,279 28 13.80 265 -300 71,208 20,574 41 14.90 375 Certain shortcomings are inherent in the methodology used in the above interest rate risk measurements. Modeling changes in NPV require the making of certain assumptions which may or may not reflect the manner in which actual yields and costs respond to changes in market interest rates. In this regard, the NPV model presented assumes that the composition of the Bank's interest sensitive assets and liabilities existing at the beginning of a period remains constant over the period being measured and also assumes that a particular change in interest rates is reflected uniformly across the yield curve regardless of the duration to maturity or repricing of specific assets and liabilities. Accordingly, although the NPV measurements and net interest income models provide an indication of the Bank's interest rate risk exposure at a particular point in time, such measurements are not intended to and do not provide a precise forecast of the effect of changes in market interest rates on the Bank's net interest income and will differ from actual results. - 12 - PAMRAPO BANCORP, INC. PART II ITEM 1. Legal Proceedings ----------------- Neither the Company 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 in the aggregate believed by management to be immaterial to the financial condition of the Company and the Bank. 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 May 5, 2000. The following matters were submitted to the stockholders: 1. Election of two directors: A. Directors elected at the meeting for terms to expire in 2003. Number of Shares ------------------------- For Withheld ------------- ----------- Mr. William J. Campbell 2,482,422 69,552 Mr. John A. Morecraft 2,512,213 39,761 The following directors' terms of office as a director continued after the meeting: (i) Dr. Jamie Portela (ii) Mr. James Kennedy (iii) Mr. Daniel J. Masarelli (iv) Mr. Francis J. O'Donnell - 13 - PAMRAPO BANCORP, INC. PART II (Cont'd.) ITEM 4. Submission of Matters to a Vote of Security Holders (Cont'd.) ---------------------------------------------------
Number of Shares ----------------------------------------- Broker Non- For Against Abstained Votes ----------------------------------------- 2. To ratify and approve a proposal to 1,902,356 49,156 21,414 579,048 change the State of Incorporation of the Company from Delaware to New Jersey.
Number of Shares ----------------------------------- For Against Abstained ----------------------------------- 3. The ratification of Radics & Co., 2,521,489 26,725 3,760 LLC as independent auditors of the Corporation for the fiscal year ending December 31, 2000. ITEM 5. Exhibits and Reports on Form 8-K -------------------------------- (a) The following Exhibits are filed as part of this report. 3.1 Certificate 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 - 14 - 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 12, 2000 By /s/ William J. Campbell ----------------- --------------------------------------- William J. Campbell President and Chief Executive Officer Date: May 12, 2000 By: /s/ Gary J. Thomas ----------------- --------------------------------------- Gary J. Thomas Vice President, Chief Financial Officer - 15 - EX-11 2 COMPUTATION OF EARNINGS PER SHARE Exhibit 11.0 PAMRAPO BANCORP, INC. AND SUBSIDIARIES STATEMENT RE: COMPUTATION OF EARNINGS PER SHARE ----------------------------------------------- Three Months Ended March 31, 2000 -------------------- Net income $1,084,972 ========== Weighted average shares outstanding - basic and diluted 2,683,034 ========== Basic and diluted earnings per share $ 0.40 ========== EX-27 3 FINANCIAL DATA SCHEDULE
9 3-MOS DEC-31-2000 JAN-01-2000 MAR-31-2000 12,902,355 10,131,064 0 0 6,048,243 122,699,029 118,769,000 273,728,883 2,039,000 445,403,822 365,614,105 25,806,796 7,298,491 0 0 0 34,500 46,649,930 445,403,822 5,592,076 2,093,945 421,728 8,107,749 3,178,131 3,626,174 4,481,575 60,000 0 3,103,335 1,697,403 1,697,403 0 0 1,084,972 .40 .40 7.62 2,667,000 1,232,000 0 2,016,627 2,000,000 22,073 1,039 2,038,966 407,000 0 1,631,966
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