2014

BCSB Bancorp, Inc. Reports Results For The Third Quarter Ended June 30, 2013

BALTIMORE, July 26, 2013 /PRNewswire/ -- BCSB Bancorp, Inc. (the "Company") (NASDAQ: BCSB), the holding company for Baltimore County Savings Bank, reported net income of $436,000, or $0.14 per basic and diluted share, for the three month period ended June 30, 2013, which represents the third quarter of its 2013 fiscal year, as compared to net income of $368,000, or $0.11 per basic and diluted share, for the three months ended June 30, 2012. On June 14, 2013, the Company also announced that it entered into an Agreement and Plan of Merger with F.N.B. Corporation ("F.N.B."), whereby the Company will merge with and into F.N.B.  Also, the Company's subsidiary bank, Baltimore County Savings Bank, will merge with and into F.N.B.'s subsidiary bank, First National Bank of Pennsylvania.  The mergers are expected to close during the first quarter of calendar year 2014.

Net income for the nine months ended June 30, 2013 was $1,378,000, or $0.44 per basic share and $0.43 per diluted share, as compared to net income of $1,404,000, or $0.45 per basic share and $0.44 per diluted share for the nine months ended June 30, 2012.

During the three and nine months ended June 30, 2013, earnings were favorably impacted by increases in non-interest income as compared to the same periods in the prior fiscal year primarily due to gain on sale of a branch building during 2013, combined with Other Than Temporary Impairment charges incurred during the same period in 2012.  Deposits from the closed branch were consolidated with another existing location. During the three months ended June 30, 2013, earnings also increased in part due to a decrease in the provision for loan losses and, during the nine months ended June 30, 2013, earnings were favorably impacted by an increase in net interest income. Earnings for the three and nine months ended June 30, 2013 were negatively impacted by increases in non-interest expenses, primarily due to merger-related costs totaling approximately $280,000.  During the three months ended June 30, 2013, earnings were reduced by a moderate decrease in net interest income.

President and Chief Executive Officer Joseph J. Bouffard commented, "During the past three months, we have improved profitability and executed several major transactions, all considered by our management and Board of Directors to be very positive for the Company and our shareholders.  As stated above, we entered into a business combination agreement with F.N.B.  We repurchased for $1,442,000 from the U.S. Treasury a TARP-related stock warrant to purchase 183,465 shares of the Company's common stock, which equals a purchase price of approximately $7.85 per share. As a result, we have now completely exited the TARP Capital Purchase Program without having to raise any additional capital, which would have been dilutive to our shareholders. We also sold a building previously operated as a branch office, resulting in a pretax gain of approximately $114,000. And we have entered into contracts to dispose of nearly $900,000 of foreclosed real estate, which will impact our NPAs in a favorable way. We are pleased to be able to report these very positive developments and appreciate your continued support."

ADDITIONAL INFORMATION ABOUT THE MERGER AND WHERE TO FIND IT

F.N.B. Corporation will file a registration statement on Form S-4 with the Securities and Exchange Commission (the "SEC").  The registration statement will include a proxy statement/prospectus and other relevant documents with the SEC in connection with the merger.

SHAREHOLDERS OF BCSB BANCORP, INC. ARE ADVISED TO READ THE PROXY STATEMENT/PROSPECTUS WHEN IT BECOMES AVAILABLE AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THOSE DOCUMENTS, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION.

The proxy statement/prospectus and other relevant materials (when they become available), and any other documents F.N.B. and BCSB Bancorp, Inc. have filed with the SEC, may be obtained free of charge at the SEC's website at www.sec.gov. In addition, investors and security holders may obtain free copies of the documents F.N.B. has filed with the SEC by contacting James Orie, Chief Legal Officer, F.N.B. Corporation, One F.N.B. Boulevard, Hermitage, PA 16148, telephone: (724) 983-3317 and free copies of the documents BCSB Bancorp, Inc. has filed with the SEC by contacting Joseph J. Bouffard, President and Chief Executive Officer, BCSB Bancorp, Inc., 4111 East Joppa Road, Baltimore, MD 21236, telephone: (410) 256-5000.

F.N.B. and BCSB Bancorp, Inc. and certain of their directors and executive officers may be deemed to be participants in the solicitation of proxies from BCSB Bancorp, Inc. shareholders in connection with the proposed merger. Information concerning such participants' ownership of BCSB Bancorp, Inc. common shares will be set forth in the proxy statement/prospectus relating to the merger when it becomes available. This communication does not constitute an offer of any securities for sale.

FORWARD-LOOKING STATEMENT

This press release contains statements that are forward-looking, as that term is defined by the Private Securities Litigation Reform Act of 1995 or the Securities and Exchange Commission in its rules, regulations and releases. The Company intends that such forward-looking statements be subject to the safe harbors created thereby.  All forward-looking statements are based on current expectations regarding important risk factors, including but not limited to real estate values, market conditions, the impact of interest rates on financing, local and national economic factors and the matters described in "Item 1A. Risk Factors" in the Company's Annual Report on Form 10-K for the year ended September 30, 2012.  Accordingly, actual results may differ from those expressed in the forward-looking statements, and the making of such statements should not be regarded as a representation by the Company or any other person that results expressed herein will be achieved.


 

BCSB Bancorp, Inc.

Consolidated Statements of Financial Condition

(Unaudited)




June 30,


September 30,



2013


2012



(in thousands)

ASSETS







Cash equivalents and time deposits


$

39,225


$

50,924

Investment Securities, available for sale



4,726



4,628

Loans Receivable, net



316,324



335,616

Mortgage-backed Securities, available for sale



234,130



213,563

Foreclosed Real Estate



3,768



1,674

Premises and Equipment, net



10,049



10,288

Bank Owned Life Insurance



17,352



16,869

Other Assets



12,348



11,537

Total Assets


$

637,922


$

645,099















LIABILITIES







Deposits


$

560,464


$

566,356

Junior Subordinated Debentures



17,011



17,011

Other Liabilities



8,821



6,593

Total Liabilities



586,296



589,960

Total Stockholders' Equity



51,626



55,139

Total Liabilities & Stockholders' Equity


$

637,922


$

645,099

 

Consolidated Statements of Operations

(Unaudited)




Three Months ended June 30,


Nine Months ended June 30,




2013




2012



2013




2012



(in thousands


(in thousands



except per share data)


except per share data)

















Interest Income

$

5,908



$

6,392


$

18,606



$

19,607


Interest Expense


1,266




1,667



4,091




5,351


Net Interest Income


4,642




4,725



14,515




14,256


Provision for Loan Losses


150




300



1,100




900


Net Interest Income After Provision for Loan Losses


4,492




4,425



13,415




13,356


Total Non-Interest Income


699




349



2,031




1,964


Total Non-Interest Expenses


4,519




4,192



13,324




13,170


Income Before Income Tax Expense


672




582



2,122




2,150


Income Tax Expense


236




214



744




746


Net Income

$

436



$

368


$

1,378



$

1,404




Basic Net Income Per Share

$

0.14



$

0.11


$

0.44



$

0.45



Diluted Net Income Per Share

$

0.14



$

0.11


$

0.43



$

0.44


 



Three Months ended

June 30,


Nine Months ended

June 30,


2013



2012


2013



2012











Return on Average Assets (Annualized)

0.27%



0.23%


0.29%



0.29%

Return on Average Equity (Annualized)

3.12%



2.76%


3.27%



3.55%











Interest Rate Spread

3.12%



3.16%


3.20%



3.20%

Net Interest Margin

3.14%



3.18%


3.23%



3.23%











Efficiency Ratio

84.61%



82.62%


80.53%



81.20%

Ratio of Average Interest Earning

   Assets/Interest Bearing Liabilities

102.13%



102.49%


103.33%



102.23%

 

Tangible Book Value

(Unaudited)





















At June 30,



At September 30,



At June 30,



2013



2012



2012













(Dollars in thousands except per share data)













Tangible book value per common share:












Total stockholders' equity


$

51,626



$

55,139



$

53,376

Less:  Intangible assets



(28)




(37)




(40)

Tangible common equity


$

51,598




55,102



$

53,336

Outstanding common shares



3,189,668




3,188,655




3,188,655













Tangible book value per common share (1)


$

16.18



$

17.28



$

16.73


(1)Tangible book value provides a measure of tangible equity on a per share basis. It is determined by methods other than in accordance with Accounting Principles Generally Accepted in the United States ("GAAP") and, as such, is considered to be a non-GAAP financial measure. Management believes the presentation of Tangible book value per share is meaningful supplemental information for shareholders. We calculate Tangible book value per common share by dividing tangible common equity by common shares outstanding, as of period end. The decline in equity and book value per common share during the 2013 fiscal year is primarily attributable to a decrease in market values of the Company's mortgage-backed securities portfolio due to recent interest rate increases. Unrealized gains and losses on such securities are reflected in Stockholders' Equity through Accumulated Other Comprehensive Income. To a lesser extent, the Company's repurchase of its TARP related stock warrant from the U.S. Treasury also contributed to the decrease.

 


Allowance for Loan Losses

(Unaudited)









Three Months ended

June 30,



Nine Months ended

June 30,



2013




2012



2013




2012



(Dollars in thousands)



(Dollars in thousands)

Allowance at Beginning of Period

$

5,543



$

5,378


$

5,470



$

4,768

Provision for Loan Losses


150




300



1,100




900

Recoveries


31




19



70




48

Charge-Offs


(55)




(448)



(971)




(467)

Allowance at End of Period

$

5,669



$

5,249


$

5,669



$

5,249















Allowance for Loan Losses as a Percentage

  of Gross Loans


1.76%




1.52%



1.79%




1.52%















Allowance for Loan Losses as a Percentage

   of  Nonperforming Loans


39.8%




25.3%



39.8%




25.3%

 

Non-Performing Assets

(Unaudited)




At June 30,

2013




At September 30,

2012




At June 30,

2012



(Dollars in thousands)












Nonaccrual Loans:











Commercial 

$

4,773



$

10,545



$

12,274

Residential Real Estate (1)


3,347




2,600




7,156

Consumer


--




--




--

                Total Nonaccrual Loans (2)


8,120




13,145




19,430

Accruing Troubled Debt Restructurings


6,131




6,647




1,316

                    Total Nonperforming Loans


14,251




19,792




20,746

Nonperforming Foreclosed Real Estate (3)


3,259




1,674




1,457

                Total Nonperforming Assets

$

17,510



$

21,466



$

22,203












Nonperforming Loans to Gross Loans Receivable


4.43%




5.90%




6.09%












Nonperforming Assets to Total Assets


2.74%




3.33%




3.46%












(1) Includes residential owner occupied properties and residential rental investor properties.

 

(2) Nonaccrual status denotes loans on which, in the opinion of management, the collection of additional interest is questionable. Also included in this category at June 30, 2013 is $108,000 in Troubled Debt Restructurings. Reporting guidance requires disclosure of these loans as nonaccrual until the loans have performed according to the modified terms for a sustained period. As of June 30, 2013, the Company had a total of $6.2 million in Troubled Debt Restructurings, $6.1 million of which were accounted for on an accrual basis for interest income.

 

(3) Regulatory guidance provides that residential rental foreclosed real estate with leases in place and demonstrated cash flow generating a reasonable rate of return generally is not considered to be a classified asset. As of June 30, 2013, the Company has identified $508,000 in foreclosed real estate meeting these criteria. Accordingly, this amount has been excluded from nonperforming assets.

 

SOURCE BCSB Bancorp, Inc.



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