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Pamrapo Bancorp, Inc. Reports Third Quarter Results

BAYONNE, NJ -- (Marketwire) -- 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
                                    ========  ========= ========  =========


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