UNITED STATES
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 September 30, 2004
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: 000-32891
1ST CONSTITUTION BANCORP
(Exact Name of Registrant as Specified in Its Charter)
| New Jersey | 22-3665653 | |
| (State of Other Jurisdiction of Incorporation or Organization) |
(I.R.S. Employer Identification No.) | |
| 2650 Route 130, P.O. Box 634, Cranbury, NJ | 08512 | |
| (Address of Principal Executive Offices) | (Zip Code) | |
(609) 655-4500
(Issuer’s Telephone Number, Including Area Code)
(Former name, former address and former fiscal year, if changed since last report)
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter 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 ¨
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Securities Exchange Act of 1934). Yes ¨ No x
As of November 9, 2004, there were 1,575,328 shares of the registrant’s common stock, no par value, outstanding.
FORM 10-Q
INDEX
1st Constitution Bancorp and Subsidiaries
Consolidated Balance Sheets
| September 30, 2004 |
December 31, 2003 |
|||||||
| (unaudited) | ||||||||
| ASSETS |
||||||||
| CASH AND DUE FROM BANKS |
$ | 11,124,936 | $ | 6,987,850 | ||||
| FEDERAL FUNDS SOLD / SHORT-TERM INVESTMENTS |
722,527 | 7,715,036 | ||||||
| Total cash and cash equivalents |
11,847,463 | 14,702,886 | ||||||
| INVESTMENT SECURITIES: |
||||||||
| Available for sale, at fair value |
90,458,599 | 84,999,973 | ||||||
| Held to maturity (fair value of $9,010,114 and $6,516,652 in 2004 and 2003, respectively) |
8,791,459 | 6,191,197 | ||||||
| Total investment securities |
99,250,058 | 91,191,170 | ||||||
| LOANS HELD FOR SALE |
9,444,112 | 15,405,982 | ||||||
| LOANS |
199,886,500 | 163,950,306 | ||||||
| Less - Allowance for loan losses |
(1,945,109 | ) | (1,786,632 | ) | ||||
| Net loans |
197,941,391 | 162,163,674 | ||||||
| PREMISES AND EQUIPMENT, net |
2,187,916 | 1,361,517 | ||||||
| ACCRUED INTEREST RECEIVABLE |
1,487,668 | 1,169,015 | ||||||
| BANK OWNED LIFE INSURANCE |
6,529,361 | 6,331,006 | ||||||
| OTHER ASSETS |
1,200,430 | 1,157,924 | ||||||
| Total assets |
$ | 329,888,399 | $ | 293,483,174 | ||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY |
||||||||
| LIABILITIES: |
||||||||
| Deposits |
||||||||
| Non-interest bearing |
$ | 52,850,885 | $ | 42,661,432 | ||||
| Interest bearing |
225,062,839 | 202,692,292 | ||||||
| Total deposits |
277,913,724 | 245,353,724 | ||||||
| SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE |
1,941,042 | 1,921,015 | ||||||
| OTHER BORROWINGS |
16,500,000 | 15,500,000 | ||||||
| REDEEMABLE SUBORDINATED DEBENTURES |
5,155,000 | 5,155,000 | ||||||
| ACCRUED INTEREST PAYABLE |
898,267 | 906,576 | ||||||
| ACCRUED EXPENSES AND OTHER LIABILITIES |
1,456,554 | 1,061,603 | ||||||
| Total liabilities |
303,864,587 | 269,897,918 | ||||||
| SHAREHOLDERS’ EQUITY: |
||||||||
| Common stock, no par value; 15,000,000 shares authorized; 1,565,367 shares issued and 1,558,273 and 1,565,163 outstanding as of September 30, 2004 and December 31, 2003, respectively |
19,626,788 | 19,694,828 | ||||||
| Retained earnings |
6,508,387 | 3,745,784 | ||||||
| Treasury Stock, shares at cost (7,094 shares at September 30, 2004 and 204 shares at December 31, 2003, respectively) |
(228,896 | ) | (5,517 | ) | ||||
| Accumulated other comprehensive income |
117,533 | 150,161 | ||||||
| Total shareholders’ equity |
26,023,812 | 23,585,256 | ||||||
| Total liabilities and shareholders’ equity |
$ | 329,888,399 | $ | 293,483,174 | ||||
See accompanying notes to consolidated financial statements.
1
1st Constitution Bancorp and Subsidiaries
Consolidated Statements of Income
(Unaudited)
| Three months ended September 30, |
Nine months ended September 30, | |||||||||||
| 2004 |
2003 |
2004 |
2003 | |||||||||
| INTEREST INCOME |
||||||||||||
| Interest and fees on loans |
$ | 3,491,228 | $ | 2,897,516 | $ | 9,747,859 | $ | 8,499,453 | ||||
| Interest on securities |
||||||||||||
| Taxable |
821,323 | 622,215 | 2,422,332 | 1,933,340 | ||||||||
| Tax-exempt |
90,461 | 85,114 | 258,112 | 227,323 | ||||||||
| Interest on Federal funds sold and short-term investments |
634 | 1,396 | 7,491 | 6,969 | ||||||||
| Total interest income |
4,403,646 | 3,606,241 | 12,435,794 | 10,667,085 | ||||||||
| INTEREST EXPENSE |
||||||||||||
| Interest on deposits |
874,168 | 757,576 | 2,382,346 | 2,417,925 | ||||||||
| Interest on securities sold under agreement to repurchase and other borrowed funds |
272,382 | 261,413 | 741,578 | 725,548 | ||||||||
| Interest on redeemable subordinated debentures |
64,784 | 63,761 | 190,421 | 194,684 | ||||||||
| Total interest expense |
1,211,334 | 1,082,750 | 3,314,345 | 3,338,157 | ||||||||
| Net interest income |
3,192,312 | 2,523,491 | 9,121,449 | 7,328,928 | ||||||||
| Provision for loan losses |
60,000 | 60,000 | 180,000 | 180,000 | ||||||||
| Net interest income after provision for loan losses |
3,132,312 | 2,463,491 | 8,941,449 | 7,148,928 | ||||||||
| NON-INTEREST INCOME |
||||||||||||
| Service charges on deposit accounts |
142,355 | 124,799 | 390,501 | 428,774 | ||||||||
| Gain on sale of loans held for sale |
307,539 | 399,612 | 916,861 | 1,016,764 | ||||||||
| Gain on sale of securities available for sale |
27,545 | 0 | 27,545 | 0 | ||||||||
| Income on bank-owned life insurance |
79,855 | 62,688 | 198,355 | 202,051 | ||||||||
| Other income |
90,603 | 94,383 | 224,358 | 227,434 | ||||||||
| Total non-interest income |
647,897 | 681,482 | 1,757,620 | 1,875,023 | ||||||||
| NON-INTEREST EXPENSE |
||||||||||||
| Salaries and employee benefits |
1,283,588 | 1,022,114 | 3,696,763 | 2,966,496 | ||||||||
| Occupancy expense |
282,028 | 199,198 | 765,955 | 603,827 | ||||||||
| Other operating expenses |
789,961 | 601,106 | 2,152,272 | 1,809,044 | ||||||||
| Total non-interest expense |
2,355,577 | 1,822,418 | 6,614,990 | 5,379,367 | ||||||||
| Income before income taxes |
1,424,632 | 1,322,555 | 4,084,079 | 3,644,584 | ||||||||
| Income taxes |
468,537 | 469,722 | 1,321,476 | 1,288,867 | ||||||||
| Net income |
$ | 956,095 | $ | 852,833 | $ | 2,762,603 | $ | 2,355,717 | ||||
| NET INCOME PER SHARE |
||||||||||||
| Basic |
$ | 0.61 | $ | 0.54 | $ | 1.77 | $ | 1.51 | ||||
| Diluted |
$ | 0.58 | $ | 0.52 | $ | 1.68 | $ | 1.44 | ||||
See accompanying notes to consolidated financial statements
2
1st Constitution Bancorp and Subsidiaries
Consolidated Statements Of Cash Flows
(Unaudited)
| Nine months ended September 30, |
||||||||
| 2004 |
2003 |
|||||||
| OPERATING ACTIVITIES: |
||||||||
| Net income |
$ | 2,762,603 | $ | 2,355,717 | ||||
| Adjustments to reconcile net income to net cash provided by operating activities- |
||||||||
| Provision for loan losses |
180,000 | 180,000 | ||||||
| Depreciation and amortization |
267,203 | 249,803 | ||||||
| Net amortization of premiums on securities |
291,770 | 1,006,940 | ||||||
| Gain on sale of loans held for sale |
(916,861 | ) | (1,016,764 | ) | ||||
| Gain on sale of securities available for sale |
(27,545 | ) | 0 | |||||
| Originations of loans held for sale |
(56,690,533 | ) | (65,616,944 | ) | ||||
| Proceeds from sales of loans held for sale |
63,569,264 | 73,181,162 | ||||||
| (Increase) decrease in accrued interest receivable |
(318,653 | ) | (112,998 | ) | ||||
| Income on Bank-owned life insurance |
(198,355 | ) | (202,051 | ) | ||||
| (Increase) decrease in other assets |
(34,677 | ) | 167,219 | |||||
| Decrease in accrued interest payable |
(8,309 | ) | (329,029 | ) | ||||
| Increase (decrease) in accrued expenses and other liabilities |
394,951 | (215,497 | ) | |||||
| Net cash provided by operating activities |
9,270,858 | 9,647,558 | ||||||
| INVESTING ACTIVITIES: |
||||||||
| Purchases of securities - |
||||||||
| Available for sale |
(28,454,928 | ) | (42,820,888 | ) | ||||
| Held to maturity |
(3,302,038 | ) | (198,102 | ) | ||||
| Proceeds from maturities and prepayments of securities - |
||||||||
| Available for sale |
18,899,045 | 47,344,551 | ||||||
| Held to maturity |
693,051 | 902,400 | ||||||
| Proceeds from sales of securities available for sale |
3,801,300 | 0 | ||||||
| Net increase in loans |
(35,957,717 | ) | (4,962,436 | ) | ||||
| Capital expenditures |
(1,093,602 | ) | (263,997 | ) | ||||