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Pamrapo Bancorp, Inc. Reports First Quarter 2010 Results

BAYONNE, NJ -- (Marketwire) -- 05/11/10 -- Pamrapo Bancorp, Inc. (NASDAQ: PBCI) (the "Company") today announced a net loss for the quarter ended March 31, 2010.

The net loss for the first quarter of 2010 amounted to $190,000 or $0.04 per share, as compared to net income of $438,000 or $0.09 per share for the first quarter of 2009. The decrease in net income for the 2010 quarter was primarily due to a $621,000 decrease in total non-interest income, a $357,000 increase in non-interest expenses, partly offset by a $327,000 decrease in income taxes. The $621,000 decrease in total non-interest income primarily relates to a $492,000 gain on sale of the Fort Lee Branch in the first quarter of 2009. The $357,000 increase in non-interest expenses was primarily driven by a $410,000 increase in professional fees, a $303,000 increase in FDIC premiums, partly offset by a decrease of $452,000 in salaries and employee benefits.

The increase in professional fees during the current quarter, as compared to the same 2009 period, was predominately due to expenses incurred for legal, accounting and other professional services as a result of the federal grand jury investigation discussed below, fees paid to consultants that Pamrapo Savings Bank, S.L.A. (the "Bank"), the wholly owned subsidiary of the Company, engaged as a result of a cease and desist order issued by the Office of Thrift Supervision (the "OTS"), effective September 26, 2008, and a cease and desist order issued by the OTS, effective January 21, 2010. FDIC premiums expense increased as a result of an increase in premium rates, while salaries and benefits decreased due to lower pension, medical and salary expenses.

During the three months ended March 31, 2010 and 2009, the Bank provided $700,000 and $525,000, respectively, as a provision for loan losses. The increase in the provision for loan losses was primarily due to an increase in the Bank's non-performing loans, loans delinquent ninety days or more, which totaled $24.7 million or 5.8% of total assets at March 31, 2010, compared to $16.0 million or 3.70% of total assets at March 31, 2009. At March 31, 2010, $7.0 million of non-performing loans were accruing interest and $17.7 million were on non-accrual status.

The Bank continues to be well-capitalized as of March 31, 2010 with a tier one capital ratio of 9.06% as compared to the minimum regulatory requirement of 4.0%.

The Company's book value per share at March 31, 2010 was $9.74.

Recent Developments

On March 29, 2010, the Bank entered into a plea agreement with the United States Attorney's Office for the District of New Jersey and the U.S. Department of Justice (collectively, the "United States") to resolve a previously disclosed investigation into the Bank's Bank Secrecy Act/Anti-Money Laundering ("BSA/AML") compliance program. The plea agreement was approved by the Bank and the United States, and was accepted by the United States District Court for New Jersey.

Under the agreement, the Bank pleaded guilty to a criminal information charging it with a single count of conspiracy to fail to file Currency Transaction Reports and Suspicious Activity Reports and to fail to establish an adequate anti-money laundering program as required by the Bank Secrecy Act and its implementing regulations (the "Information"). The Bank forfeited $5 million to the United States.

According to the terms of the plea, the United States has agreed that it will not bring any additional criminal charges against the Bank in connection with the criminal conduct alleged in the Information. On March 29, 2010, the Bank agreed to a consent order and payment of a civil money penalty of $5 million assessed concurrently by the OTS relating to the Bank's BSA/AML compliance controls. The penalty does not require a separate payment to the OTS or United States from the amount forfeited pursuant to the agreement with the United States. The Bank has not yet entered into a consent order with the Financial Crimes Enforcement Network.

Reserves totaling $5 million for the forfeiture and the concurrent OTS civil money penalty were previously established by the Bank as reported in Forms 8-K filed with the Securities and Exchange Commission on June 23, 2009 and December 7, 2009.

About Pamrapo Bancorp

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 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, on going litigation, government investigations 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.

                              (In Thousands)

                                                   March 31,   December 31,
ASSETS                                                2010         2009
                                                  -----------  -----------
Cash and amounts due from depository institutions $     3,349  $     4,037
Interest-bearing deposits in other banks               16,687       17,736
                                                  -----------  -----------
  Cash and Cash Equivalents                            20,036       21,773

Securities available for sale                             714          712
Investment securities held to maturity                 11,334       11,337
Mortgage-backed securities held to maturity            80,968       87,751
Loans receivable                                      420,248      421,049
Foreclosed real estate                                    789          384
Premises and equipment                                  2,533        2,615
Federal Home Loan Bank of New York stock                3,621        3,396
Interest receivable                                     2,772        2,650
Deferred Tax Asset                                      5,204        4,896
Other assets                                            1,200        1,237
                                                  -----------  -----------
Total Assets                                      $   549,419  $   557,800
                                                  ===========  ===========


     Non-interest bearing                         $    36,714  $    35,252
     Interest bearing                                 398,585      409,240
Advances from Federal Home Loan Bank of New York       56,000       51,000
  Advance payments by borrowers for taxes and
   insurance                                            3,365        3,261
  Other liabilities                                     6,678       10,812
                                                  -----------  -----------
Total Liabilities                                     501,342      509,565
                                                  -----------  -----------
Stockholders' Equity:
  Preferred stock; 3,000,000 shares authorized;
   none issued and outstanding                              -            -
  Common Stock; $0.01 par value; 25,000,000 shares
   authorized; 6,900,000 shares issued; 4,935,542
   shares outstanding for 2010 and 2009                    69           69
  Paid-in capital                                      19,340       19,340
  Retained earnings                                    53,849       54,039
  Accumulated other comprehensive loss                 (1,641)      (1,673)
  Treasury stock, at cost; 1,964,458 shares for
   2010 and 2009                                      (23,540)     (23,540)
                                                  -----------  -----------
Total Stockholders' Equity                             48,077       48,235
                                                  -----------  -----------

Total Liabilities and Stockholders' Equity        $   549,419  $   557,800
                                                  ===========  ===========

                   (In Thousands, except per share data)

                                                     Three Months Ended
                                                         March 31,
                                                     2010         2009
                                                  -----------  -----------
Interest income:
  Loans                                           $     6,180  $     6,764
  Mortgage-backed securities                              966        1,305
  Investments                                             232          234
  Other interest-earning assets                            51           36
                                                  -----------  -----------
  Total Interest Income                                 7,429        8,339
                                                  -----------  -----------
Interest expense:
  Deposits                                              1,556        2,407
  Advances and other borrowed money                       634          891
                                                  -----------  -----------
  Total Interest Expense                                2,190        3,298
                                                  -----------  -----------

Net Interest Income                                     5,239        5,041
Provision for Loan Losses                                 700          525
                                                  -----------  -----------
Net Interest Income after Provision for
 Loan Losses                                            4,539        4,516
                                                  -----------  -----------

Non-Interest Income:
  Fees and service charges                                255          251
  Gain on sale of branch                                    -          492
  Commissions from sale of financial products               -           83
  Other                                                    39           89
                                                  -----------  -----------
  Total Non-Interest Income                               294          915
                                                  -----------  -----------

Non-Interest Expenses:
  Salaries and employee benefits                        1,608        2,060
  Net occupancy expense of premises                       313          330
  Equipment                                               294          311
  Advertising                                              41           50
  Professional fees                                     1,637        1,227
  Losses on foreclosed real estate                          6            8
  Federal Deposit Insurance premiums                      402           99
  Merger expenses                                         165            -
  Other                                                   622          646
                                                  -----------  -----------
  Total Non-Interest Expenses                           5,088        4,731
                                                  -----------  -----------

Income (loss) before Income Taxes                        (255)         700
Income Tax Expense (Benefit)                              (65)         262
                                                  -----------  -----------
Net Income (Loss)                                ($       190) $       438
                                                  ===========  ===========

Net Income (Loss) per Common Share
  Basic                                          ($      0.04) $      0.09
  Diluted                                        ($      0.04) $      0.09
                                                  ===========  ===========

Weighted Average Number of Common Shares
  Basic                                                 4,935        4,935
                                                  ===========  ===========
  Diluted                                               4,935        4,935
                                                  ===========  ===========

Dividends per Common Share                        $      0.00  $      0.15
                                                  ===========  ===========

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