BCSB Bancorp, Inc. Reports Results for the Year Ended September 30, 2009

BALTIMORE, Oct. 26 /PRNewswire-FirstCall/ -- BCSB Bancorp, Inc. (the "Company") (Nasdaq: BCSB), the holding company for Baltimore County Savings Bank, FSB, reported a net loss of $1,955,000 for the year ended September 30, 2009, as compared to net income of $894,000 for the year ended September 30, 2008. When consideration is given to dividends and discount accretion on preferred shares issued under the U.S. Treasury's TARP Capital Purchase Program, the Company reported a net loss available to common stockholders of $2,432,000 or ($0.84) per basic and diluted share for the year ended September 30, 2009, compared to net income available to common stockholders of $894,000 or $0.30 per basic and diluted common share for the year ended September 30, 2008.

The net loss for the three months ended September 30, 2009 was $1,879,000, as compared to net income of $461,000 for the three months ended September 30, 2008. When consideration is given to dividends and discount accretion on preferred shares issued under the U.S. Treasury's TARP Capital Purchase Program, the net loss available to common stockholders was $2,035,000 or $(0.70) per basic and diluted share for the three months ended September 30, 2009, compared to net income available to common stockholders of $461,000 or $0.16 per basic and diluted share for the three months ended September 30, 2008.

During the three and twelve months ended September 30, 2009, the Company's earnings were negatively impacted by a $2.3 million impairment charge to write off all goodwill recorded in connection with its acquisition in 2002 of WHG Bancshares Corporation. The impairment charge was a non-cash adjustment which had no affect on liquidity, tangible capital or regulatory capital. The Company also recorded higher loan loss provisions in both periods. Additionally, operating results for the twelve months ended September 30, 2009 included $270,000 in FDIC special assessment premiums and $500,000 in recognized impairment losses for mortgage-backed investment securities deemed by management to be "other than temporarily impaired" (OTTI).

Additional loan loss provisions during the three months ended June 30, 2009 were necessary to address increases in classified assets and the continued decline in overall economic conditions. Nonperforming assets were $3.5 million at September 30, 2009 versus $2.4 million at June 30, 2009, representing a 46% increase. Loans classified special mention, substandard and loss, which include nonperforming loans, increased to $18.9 million at September 30, 2009 from $15.8 million at June 30, 2009. The Company also had $639,000 in foreclosed real estate as of September 30, 2009 and June 30, 2009 that was subsequently sold in October 2009 for more than its carrying amount.

President and Chief Executive Officer Joseph J. Bouffard commented, "The financial services industry has faced unprecedented challenges over the past year. Losses recognized by our Company have been, for the most part, attributable to non-cash accounting adjustments related to goodwill and OTTI. Despite these losses, we are encouraged by certain key elements of core operations, which continue to improve. Net interest income and net interest margin have steadily increased. When excluding the $500,000 OTTI charge, non-interest income has also increased. The Bank is very well capitalized and asset quality within our loan portfolio remains strong overall."

Stockholders' equity increased by $9.4 million during the twelve months ended September 30, 2009. This increase is primarily due to the $10.8 million sale of preferred stock and warrants in December 2008 under the U.S. Treasury's TARP Capital Purchase Program, partially offset by the Company's net loss for the year. Stockholders' equity also includes accumulated other comprehensive loss (net of taxes) which was ($1.8) million at September 30, 2009 compared to ($2.5) million as of September 30, 2008. Most of this loss relates to the $21.9 million collateralized mortgage obligation securities portfolio. The Company recorded $500,000 in losses during the quarter ended June 30, 2009 as a result of these securities. The Company does not intend to sell these securities prior to maturity and, to date, the securities have performed in accordance with their terms. If in the future it is determined that further declines in market values or credit losses with respect to these or any other securities are other than temporary, the Company would be required to recognize additional losses in its consolidated statements of operations.

                                 BCSB Bancorp, Inc.
                  Consolidated Statements of Financial Condition
                                   (Unaudited)

                                                   September 30, September 30,
                                                         2009        2008
                                                         ----        ----
                                                      (Dollars in thousands)
    ASSETS
    Cash equivalents and time deposits                 $40,352     $35,083
    Investment Securities, available for sale               --         994
    Loans Receivable, net                              401,011     400,469
    Mortgage-backed Securities, available for sale      90,478      89,956
    Foreclosed Real Estate                                 639       1,244
    Premises and Equipment, net                          9,024       9,762
    Bank Owned Life Insurance                           15,001      14,389
    Other Assets                                        12,933      15,185
                                                        ------      ------
    Total Assets                                      $569,438    $567,082
                                                      ========    ========

    LIABILITIES
    Deposits                                          $487,989    $484,791
    Borrowings                                              --      10,000
    Junior Subordinated Debentures                      17,011      17,011
    Other Liabilities                                    5,305       5,525
                                                         -----       -----
    Total Liabilities                                  510,305     517,327
    Total Stockholders' Equity                          59,133      49,755
                                                        ------      ------
    Total Liabilities & Stockholders' Equity          $569,438    $567,082
                                                      ========    ========



                      Consolidated Statements of Operations
                                    (Unaudited)

                                   Three Months ended      Twelve Months ended
                                      September 30,           September 30,
                                      2009     2008          2009      2008
                                      ----     ----          ----      ----
                                 (Dollars in thousands  (Dollars in thousands
                                 except per share data) except per share data)

    Interest Income                  $7,389   $8,019       $29,938   $34,137
    Interest Expense                  2,883    3,926        13,614    19,329
                                      -----    -----        ------    ------
    Net Interest Income               4,506    4,093        16,324    14,808
    Provision for Loan Losses           450      360         1,350       360
                                        ---      ---         -----       ---
    Net Interest Income After
     Provision for Loan Losses        4,056    3,733        14,974    14,448
    Total Non-Interest Income           683      613         1,876     2,047
    Total Non-Interest Expenses       6,441    3,633        18,794    15,266
                                      -----    -----        ------    ------
    (Loss) Income Before Tax
     (Benefit) Expense               (1,702)     713        (1,944)    1,229
    Income Tax (Benefit) Expense        177      252            11       335
                                        ---      ---           ---       ---
    Net (Loss) Income                (1,879)     461        (1,955)      894
    Preferred Stock dividends and
     discount accretion                (156)      --          (477)       --
                                       ----      ---          ----       ---
    Net (Loss) Income available to
     common shareholders            $(2,035)    $461       $(2,432)     $894
                                    =======     ====       =======      ====

    Basic and Diluted (Loss)
     Earnings Per Common Share(1)     $(.70)    $.16         $(.84)     $.30
                                      =====     ====         =====      ====

    (1) - Per share amounts have been adjusted by the exchange rate of .5264
    as a result of the second step conversion that occurred on April 10, 2008.



                         Summary of Financial Highlights
                                    (Unaudited)

                                    Three Months ended   Twelve Months ended
                                       September 30,        September 30,
                                       2009     2008        2009     2008
                                       ----     ----        ----     ----
    (Loss) Return on Average Assets
     (Annualized)                     (1.31%)   0.32%      (.34%)     .15%
    (Loss) Return on Average Equity
     (Annualized)                    (12.52%)   3.69%     (3.36%)    2.08%

    Interest Rate Spread               3.38%    3.02%       2.97%    2.60%
    Net Interest Margin                3.43%    3.08%       3.05%    2.61%

    Efficiency Ratio                 124.13%   77.20%     103.27%   90.56%
    Ratio of Average Interest
     Earning Assets/Interest
     Bearing Liabilities             102.18%  101.84%     103.06%  100.35%



                              Allowance for Loan Losses
                                     (Unaudited)

                                    Three Months ended    Twelve Months ended
                                       September 30,          September 30,
                                      2009      2008         2009      2008
                                      ----      ----         ----      ----
                                  (Dollars in thousands)(Dollars in thousands)
    Allowance at Beginning of
     Period                          $3,457    $2,675       $2,672    $2,650
    Provision for Loan Loss             450       360        1,350       360
    Recoveries                           31        50          206       265
    Charge-Offs                         (11)     (413)        (301)     (603)
                                        ---      ----         ----      ----
    Allowance at End of Period       $3,927    $2,672       $3,927    $2,672
                                     ======    ======       ======    ======
    Allowance for Loan Losses as a
     Percentage of Gross Loans         0.97%     0.65%        0.97%     0.65%

    Allowance for Loan Losses as a
     Percentage of Nonperforming
     Loans                           135.83%    320.0%      135.83%    320.0%



                               Non-Performing Assets
                                    (Unaudited)

                               At September 30,  At June 30,  At September 30,
                                     2009           2009            2008
                                     ----           ----            ----
                                           (Dollars in thousands)
    Nonperforming Loans:
      Commercial Real Estate        $2,795         $1,303           $671
      Residential Real Estate           96            467            162
      Consumer                           0              2              2
                                       ---            ---            ---
        Total Nonperforming Loans    2,891           1,772           835
    Foreclosed Real Estate             639             639         1,230
    Other Nonperforming Assets          --              --            14

        Total Nonperforming Assets  $3,530          $2,411        $2,079
                                    ======          ======        ======

    Nonperforming Loans to Loans
     Receivable                       0.72%           0.44%         0.21%

    Nonperforming Assets to Total
     Assets                           0.62%           0.41%         0.37%

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, 2008. 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.

SOURCE BCSB Bancorp, Inc.



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