Pamrapo Bancorp, Inc. Reports Third Quarter Results
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BAYONNE, NJ -- (MARKET WIRE) -- 10/30/09 -- Pamrapo Bancorp, Inc. (NASDAQ: PBCI) announced a net loss of $10,000 for the quarter ended September 30, 2009 compared to net income of $611,000 for the quarter ended September 30, 2008. Basic and diluted loss per share was $0.00 for the three months ended September 30, 2009 as compared to basic and diluted net income per share of $0.12 for the three months ended September 30, 2008. The Company also reported a net loss of $3.2 million for the nine months ended September 30, 2009 as compared to net income of $2.6 million for the nine months ended September 30, 2008. Basic and diluted loss per share was $0.64 for the nine months ended September 30, 2009 as compared to basic and diluted net income per share of $0.52 for the nine months ended September 30, 2008.
The net loss for the three months ended September 30, 2009 totaled $10,000 as compared to net income of $611,000 for the three months ended September 30, 2008. The net loss during the three months ended September 30, 2009, as compared to the same 2008 period, resulted primarily from a $1.0 million decrease in total interest income, a $498,000 increase in the provision for loan losses, and a $273,000 decrease in non-interest income, which were partially offset by an $806,000 decrease in interest expense.
The net loss for the nine months ended September 30, 2009 totaled $3.2 million as compared to net income of $2.6 million for the nine months ended September 30, 2008. The net loss during the nine months ended September 30, 2009, as compared to the same 2008 period, resulted primarily from a $5.8 million increase in total non-interest expenses and a $1.6 million increase in the provision for loan losses. The $5.8 million increase in total non-interest expenses was primarily driven by a $3.0 million litigation loss reserve accrued during the second quarter of 2009 and a $2.3 million increase in professional fees from the nine months ended September 30, 2008 to the nine months ended September 30, 2009, as well as a $638,000 increase in FDIC premiums, including a special assessment of $270,000 during the 2009 period.
As previously reported, Pamrapo Savings Bank, S.L.A. (the "Bank"), the wholly-owned subsidiary of Pamrapo Bancorp, Inc. (the "Company"), received federal grand jury subpoenas from the U.S. Attorney's Office for the District of New Jersey ("U.S. Attorney's Office"). The subpoenas were issued to the Bank in connection with an ongoing investigation regarding the Bank's anti-money laundering and Bank Secrecy Act compliance. Certain individuals, including the Bank's senior officers and directors, have received grand jury testimony subpoenas in connection with this investigation. In addition, the Bank and its wholly-owned subsidiary, Pamrapo Service Corporation, have also received federal grand jury subpoenas from the U.S. Attorney's Office relating to certain commissions paid to the manager of Pamrapo Service Corporation. The Bank has, and continues to fully cooperate with these ongoing investigations.
No penalties, either criminal or civil, have been imposed on the Bank to date as a result of the investigation. However, pursuant to FASB ASC 450 "Contingencies," a company must accrue funds for a possible litigation loss if a loss is probable and the amount of the expected loss is reasonably estimable. It is probable that the Bank will incur monetary penalties in the form of fines and forfeitures as a result of these matters. As reported in a Form 8-K filed with the Securities and Exchange Commission on June 23, 2009, the Bank was able to reasonably estimate certain losses, based on information that had come to light at that time. As a result, the Bank accrued a $3.0 million litigation loss reserve to reflect a potential criminal forfeiture, and related costs and expenses in the quarter ended June 30, 2009.
The Bank is only able to reasonably estimate certain losses at this time. It is probable that the Bank will incur material losses in addition to the $3.0 million litigation loss reserve described above; however it is not able to reasonably estimate additional losses at this time. These additional losses relate to potential further criminal forfeitures and potential criminal fines that may be imposed separately by a court, and civil money penalties that may be imposed by the Office of Thrift Supervision ("OTS"), the Bank's primary federal regulator, and Financial Crimes Enforcement Network, a part of the United States Treasury Department (FinCEN). Depending on the end result of the investigation, the total amount of penalties and related costs and expenses incurred by the Bank may be significantly higher than $3.0 million, and could have a material impact on the Company's consolidated financial position, results of operations, and regulatory capital ratios.
The increase in professional fees during the three and nine months ended September 30, 2009, as compared to the same 2008 periods, was predominately due to expenses incurred for legal, accounting and other professional services as a result of the federal grand jury investigation by the U.S. Attorney's Office discussed above and fees paid to consultants that the Bank engaged as a result of a cease and desist order issued by the OTS, effective September 26, 2008.
FDIC premiums increased as a result of an increase in premium rates, the depletion of assessment credits previously in effect and a special assessment during the quarter ended June 30, 2009 of $270,000.
During the three and nine months ended September 30, 2009, as compared to the same 2008 periods, provision for loan losses increased by $498,000 and $1.6 million, respectively, primarily due to an increase in the Bank's non-performing loans, which were $21.6 million at September 30, 2009 compared to $8.8 million at September 30, 2008.
The Bank continues to be well-capitalized as of September 30, 2009 with a tier one capital ratio of 9.11% as compared to the minimum regulatory requirement of 4.0%.
Pamrapo's book value per share at September 30, 2009 was $10.23.
Pamrapo Bancorp, Inc. is a holding company whose principal subsidiary, Pamrapo Savings Bank, S.L.A., operates ten branch offices in Bayonne, Jersey City, Hoboken, and Monroe, New Jersey.
Forward-Looking Statements
This press release may include certain forward-looking statements based on current management expectations. The actual results of Pamrapo Bancorp, Inc. (the "Company") could differ materially from those management expectations. Factors that could cause future results to vary from current management expectations include, but are not limited to, general economic conditions, legislative and regulatory changes, monetary and fiscal policies of the federal government, changes in tax policies, rates and regulations of federal, state and local tax authorities, changes in interest rates, deposit flows, the cost of funds, demand for loan products, demand for financial services, competition, changes in the quality or composition of loan and investment portfolios of Pamrapo Savings Bank, S.L.A., the Company's wholly-owned subsidiary, changes in accounting principles, policies or guidelines, and other economic, competitive, governmental and technological factors affecting the Company's operations, markets, products, services and prices. The Company wishes to caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. The Company undertakes no obligation to publicly release the result of any revisions that 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.
PAMRAPO BANCORP, INC. AND SUBSIDIARIES
COMPARATIVE STATEMENTS OF FINANCIAL CONDITION
(In Thousands)
(Unaudited)
September 30, December 31,
ASSETS 2009 2008
------------- -------------
Cash and amounts due from depository
institutions $ 3,634 $ 4,117
Interest-bearing deposits in other banks 23,856 9,470
------------- -------------
Cash and Cash Equivalents 27,490 13,587
Securities available for sale 717 771
Investment securities held to maturity 11,340 11,350
Mortgage-backed securities held to maturity 93,745 117,428
Loans receivable 421,623 437,554
Foreclosed real estate 923 426
Premises and equipment 2,701 2,929
Federal Home Loan Bank of New York stock 3,756 5,160
Interest receivable 2,854 2,884
Deferred Tax Asset 5,352 4,381
Other assets 1,034 1,542
------------- -------------
Total Assets $ 571,535 $ 598,012
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits $ 447,613 $ 443,999
Advances from Federal Home Loan Bank of New
York 59,000 89,500
Advance payments by borrowers for taxes and
insurance 3,245 3,282
Other liabilities 11,211 6,553
------------- -------------
Total Liabilities 521,069 543,334
------------- -------------
Stockholders' Equity:
Preferred stock; 3,000,000 shares authorized;
issued and outstanding-none - -
Common Stock; $0.01 par value; 25,000,000
shares authorized; 6,900,000 shares issued;
4,935,542 shares outstanding 69 69
Paid-in capital 19,340 19,340
Retained earnings 57,481 61,928
Accumulated other comprehensive loss (2,884) (3,119)
Treasury stock, at cost; 1,964,458 shares
(2009) and (2008) (23,540) (23,540)
------------- -------------
Total Stockholders' Equity 50,466 54,678
------------- -------------
Total Liabilities and Stockholders' Equity $ 571,535 $ 598,012
============= =============
PAMRAPO BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In Thousands, except per share data)
(Unaudited) (Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2009 2008 2009 2008
-------- --------- -------- ---------
Interest income
Loans $ 6,253 $ 6,904 $ 19,458 $ 20,722
Mortgage-backed securities 1,104 1,430 3,619 4,270
Investments 236 226 703 623
Other interest-earning assets 59 101 163 931
-------- --------- -------- ---------
Total Interest Income 7,652 8,661 23,943 26,546
-------- --------- -------- ---------
Interest expense
Deposits 1,951 2,635 6,567 8,993
Advances and other borrowed money 757 879 2,493 2,974
-------- --------- -------- ---------
Total Interest Expense 2,708 3,514 9,060 11,967
-------- --------- -------- ---------
Net Interest Income 4,944 5,147 14,883 14,579
Provision for Loan Losses 850 352 2,225 580
-------- --------- -------- ---------
Net Interest Income after Provision
for Loan Losses 4,094 4,795 12,658 13,999
-------- --------- -------- ---------
Non-Interest Income
Fees and service charges 288 313 822 956
Gain on sale of branch - - 492 -
Commissions from sale of financial
products 1 222 87 512
Other 78 105 275 265
-------- --------- -------- ---------
Total Non-Interest Income 367 640 1,676 1,733
-------- --------- -------- ---------
Non-Interest Expenses
Salaries and employee benefits 1,965 2,137 5,904 5,938
Net occupancy expense of premises 301 328 933 989
Equipment 342 336 991 988
Advertising 42 49 142 192
Loss on foreclosed real estate 2 2 15 30
Professional fees 1,055 922 3,873 1,537
Federal Deposit Insurance Premium 194 22 688 50
Litigation loss reserve - - 3,000 -
Other 559 629 1,870 1,871
-------- --------- -------- ---------
Total Non-Interest Expenses 4,460 4,425 17,416 11,595
-------- --------- -------- ---------
Income (loss) before Income Taxes 1 1,010 (3,082) 4,137
Income Tax Expense 11 399 82 1,554
-------- --------- -------- ---------
Net Income (loss) ($ 10) $ 611 ($ 3,164) $ 2,583
======== ========= ======== =========
Net Income (loss) per Common Share
Basic $ 0.00 $ 0.12 ($ 0.64) $ 0.52
Diluted $ 0.00 $ 0.12 ($ 0.64) $ 0.52
======== ========= ======== =========
Weighted Average Number of Common
Shares outstanding
Basic 4,936 4,976 4,936 4,976
======== ========= ======== =========
Diluted 4,936 4,976 4,936 4,976
======== ========= ======== =========
======== ========= ======== =========
Dividends per Common Share $ 0.00 $ 0.23 $ 0.26 $ 0.69
======== ========= ======== =========
CONTACT Robert A. Hughes Investor Relations 201-339-4600
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