BCSB Bancorp, Inc. Reports Results for the Year Ended September 30, 2011

BALTIMORE, Oct. 28, 2011 /PRNewswire/ -- BCSB Bancorp, Inc. (the "Company") (NASDAQ: BCSB), the holding company for Baltimore County Savings Bank, reported net income of $116,000 for the year ended September 30, 2011, as compared to net income of $1,207,000 for the year ended September 30, 2010. For comparison purposes, when consideration is given to dividends and discount accretion on preferred shares issued under the U.S. Treasury's TARP Capital Purchase Program (which the Company redeemed in January 2011), the Company reported a net loss available to common stockholders of $457,000 or ($0.15) per basic and diluted common share for the year ended September 30, 2011, compared to net income available to common stockholders of $582,000 or $0.20 per basic common share and $.19 per diluted common share for the year ended September 30, 2010. When the Company repaid TARP, it was required to accelerate accretion of the remaining discount on the preferred stock, thereby reducing net income available to common shareholders by approximately $310,000 during the year ended September 30, 2011.

Net loss for the three months ended September 30, 2011 was $461,000, as compared to net income of $569,000 for the three months ended September 30, 2010. When consideration is given to dividends and discount accretion on preferred shares issued under the U.S. Treasury's TARP Capital Purchase Program, net loss available to common stockholders was $461,000 or ($0.15) per basic and diluted common share for the three months ended September 30, 2011, compared to net income available to common stockholders of $412,000 or $0.14 per basic and diluted common share for the three months ended September 30, 2010.

Earnings during the three and twelve months ended September 30, 2011 declined in comparison to the same periods of the prior fiscal year primarily due to declines in net interest income of $85,000 and $683,000, increased provisions for loss on foreclosed real estate of $41,000 and $334,000 and higher "Other Than Temporarily Impaired" (OTTI) credit losses of $100,000 in both periods, respectively. Also contributing to the decline in earnings were increased costs associated with impaired loans and foreclosure activities. Provisions for losses on loans during the three months ended September 30, 2011 increased by $1,000,000 in comparison with the same period in 2010, but decreased by $1,000,000 during the fiscal year ended September 30, 2011 as compared with the prior fiscal year.

Higher loan loss provisions were necessary during the three months ended September 30, 2011 to address increases in troubled assets, particularly in relation to two commercial loan relationships, one of which represented by $2.7 million in land development and the other represented by $1.5 million in residential rental properties. Nonperforming loans were $17.6 million at September 30, 2011 versus $11.6 million at June 30, 2011.  

President and Chief Executive Officer Joseph J. Bouffard commented "Although we were able to report a slight profit for fiscal year 2011, operating results for the most recent quarter ended September 30, 2011 were disappointing. Challenging economic conditions continue to persist, resulting in a difficult environment for some of our borrowers. We continue to aggressively pursue solutions to problem asset issues and will be proactive in establishing what are believed to be appropriate reserve levels."  

As noted above, OTTI charges have been recorded on certain of the Company's CMO securities. As of September 30, 2011, the market value of these CMO securities totaled $9.1 million, which reflects $2.9 million in gross unrealized losses.  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.

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, 2010.  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)




September 30,


September 30,



2011


2010



(Dollars in thousands)

ASSETS







Cash equivalents and time deposits


$

60,108


$

108,999

Investment Securities, available for sale



6,819



18,390

Loans Receivable, net



364,843



388,933

Mortgage-backed Securities, available for sale



150,879



65,975

Foreclosed Real Estate



2,999



--

Premises and Equipment, net



9,932



7,826

Bank Owned Life Insurance



16,228



15,655

Other Assets



13,048



14,777

Total Assets


$

624,856


$

620,555















LIABILITIES







Deposits


$

550,014


$

534,366

Junior Subordinated Debentures



17,011



17,011

Other Liabilities



5,872



7,788

Total Liabilities



572,897



559,165

Total Stockholders' Equity



51,959



61,390

Total Liabilities & Stockholders' Equity


$

624,856


$

620,555




Consolidated Statements of Operations

(Unaudited)




Three Months ended

September 30,


Twelve Months ended

September 30,



2011


2010


2011


2010



(Dollars in thousands


(Dollars in thousands



except per share data)


except per share data)

Interest Income


$

6,608



$

7,113


$

26,935



$

28,862


Interest Expense



2,037




2,457



8,550




9,794


Net Interest Income



4,571




4,656



18,385




19,068


Provision for Loan Losses



1,300




300



2,100




3,100


Net Interest Income After Provision for Loan Losses



3,271




4,356



16,285




15,968


Total Non-Interest Income



282




639



2,002




2,406


Total Non-Interest Expenses



4,335




4,134



18,336




16,682


(Loss) Income Before Tax Expense



(782)




861



(49)




1,692


Income Tax (Benefit) Expense



(321)




292



(165)




485


Net (Loss) Income



(461)




569



116




1,207


Preferred Stock dividends and discount accretion



--




(157)



(573)




(625)


Net (Loss) Income available to common shareholders


$

(461)



$

412


$

(457)



$

582


















Basic (Loss) Earnings Per Common Share


$

(.15)



$

.14


$

(.15)



$

.20


Diluted (Loss) Earnings Per Common Share


$

(.15)



$

.14


$

(.15)



$

.19





Summary of Financial Highlights

(Unaudited)




Three Months ended

September 30,


Twelve Months ended

September 30,



2011


2010


2011


2010










Return (Loss) on Average Assets (Annualized)



(.29%)




.37%



.02%




.20%


Return (Loss) on Average Equity (Annualized)



(3.55%)




3.71%



.20%




1.99%


















Interest Rate Spread



3.09%




3.15%



3.10%




3.30%


Net Interest Margin



3.12%




3.22%



3.15%




3.39%


















Efficiency Ratio



89.32%




78.05%



89.94%




77.68%


Ratio of Average Interest Earning Assets/Interest Bearing Liabilities



102.69%




104.31%



103.44%




105.14%





















Allowance for Loan Losses

(Unaudited)




Three Months ended

September 30,


Twelve Months ended

September 30,



2011


2010


2011


2010



(Dollars in thousands)


(Dollars in thousands)






Allowance at Beginning of Period


$

3,876



$

6,287


$

6,634



$

3,927


Provision for Loan Loss



1,300




300



2,100




3,100


Recoveries



18




74



80




166


Charge-Offs



(426)




(27)



(4,046)




(559)


Allowance at End of Period


$

4,768



$

6,634


$

4,768



$

6,634


















Allowance for Loan Losses as a Percentage of Gross Loans



1.29%




1.68%



1.29%




1.68%


















Allowance for Loan Losses as a Percentage of Nonperforming Loans



27.04%




51.89%



27.04%




51.89%





Non-Performing Assets

(Unaudited)




At September 30,

2011


At June 30,

2011


At September 30,

2010



(Dollars in thousands)




Nonperforming Loans: (1)











Commercial  


$

11,193



$

5,623



$

10,442

Residential Real Estate (2)



6,417




5,955




2,320

Consumer



20




20




23

Total Nonperforming Loans



17,630




11,598




12,785

Foreclosed Real Estate



2,999




2,841




--


Total Nonperforming Assets


$

20,629



$

14,439



$

12,785













Nonperforming Loans to Loans Receivable



4.83%




3.18%




3.29%













Nonperforming Assets to Total Assets



3.30%




2.29%




2.06%


(1) Nonperforming status denotes loans on which, in the opinion of management, the collection of additional interest is questionable.  Also included in this category at September 30, 2011 are $8.7 million in Troubled Debt Restructurings, $8.6 million of which were not delinquent.  Reporting guidance requires disclosure of these loans as nonperforming even though they are current in terms of principal and interest payments.


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




SOURCE BCSB Bancorp, Inc.




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