BSB Bancorp, Inc. Reports Second Quarter Results

BELMONT, Mass., July 24, 2014 /PRNewswire/ -- BSB Bancorp, Inc. (NASDAQ- BLMT) (the "Company"), the holding company for Belmont Savings Bank (the "Bank"), a state-chartered savings bank headquartered in Belmont, Massachusetts, today reported net income of $1.0 million, or $0.12 per basic and diluted share, for the quarter ended June 30, 2014, compared to net income of $361,000, or $0.04 per basic and diluted share, in the second quarter of 2013. For the six months ended June 30, 2014, the Company reported net income of $1.7 million, or $0.20 per basic and diluted share, as compared to net income of $777,000, or $0.09 per basic and diluted share, for the six months ended June 30, 2013.

Robert M. Mahoney, President and Chief Executive Officer, said, "The bank is benefiting from positive operating leverage as revenue growth outstrips expense growth. Credit quality remains good."

NET INTEREST AND DIVIDEND INCOME

Net interest and dividend income before provision for loan losses for the quarter ended June 30, 2014 was $7.6 million as compared to $5.9 million for the quarter ended June 30, 2013, or a 28.8% increase. The provision for loan losses for the quarter ended June 30, 2014 was $307,000 as compared to a provision for loan losses of $100,000 for the quarter ended June 30, 2013, or a 207.0% increase. This resulted in a $1.5 million or 26.0% increase in net interest and dividend income after provision for loan losses for the quarter ended June 30, 2014 as compared to the quarter ended June 30, 2013. Net interest and dividend income before provision for loan losses for the six months ended June 30, 2014 was $14.9 million as compared to $11.7 million for the six months ended June 30, 2013, or a 28.0% increase. The provision for loan losses for the six months ended June 30, 2014 was $696,000, as compared to $427,000 for the six months ended June 30, 2013, or a 63.0% increase. This resulted in a $3.0 million or 26.6% increase in net interest and dividend income after provision for loan losses for the six months ended June 30, 2014 as compared to the six months ended June 30, 2013.

NONINTEREST INCOME

Noninterest income for the quarter ended June 30, 2014 was $857,000 as compared to $908,000 for the quarter ended June 30, 2013, a decrease of $51,000, or 5.6%. This decrease was driven by a decrease in net gain on sales of loans of $286,000 as we benefited less during the second quarter of 2014 from the interest rate environment as compared to the second quarter of 2013. The decrease in net gain on sales of loans was partially offset by an increase in other income of $164,000 and an increase in loan servicing fee income of $75,000. The increase in other income was driven by vendor loss experience refunds. Noninterest income for the six months ended June 30, 2014 was $1.6 million as compared to $1.9 million for the six months ended June 30, 2013, a decrease of $335,000, or 17.5%. This decrease was driven by a decrease in net gain on sales of loans of $575,000 as we benefited less during the six months ended June 30, 2014 from the interest rate environment as compared to the six months ended June 30, 2013. The decrease in net gain on sales of loans was partially offset by an increase in other income of $168,000 and an increase in loan servicing fee income of $121,000. The increase in other income was driven by vendor loss experience refunds.

NONINTEREST EXPENSE

Noninterest expense for the quarter ended June 30, 2014 was $6.5 million as compared to $6.1 million for the quarter ended June 30, 2013. This increase of $361,000, or 5.9%, was primarily driven by an increase in salaries and employee benefits of $306,000. Noninterest expense for the six months ended June 30, 2014 was $13.2 million as compared to $11.9 million for the six months ended June 30, 2013. This increase of $1.2 million, or 10.4%, was primarily driven by an increase in salaries and employee benefits of $899,000, which included the impact of adding personnel for two additional branches. 

BALANCE SHEET

At June 30, 2014, total assets were $1.2 billion, an increase of $167.2 million or 15.9% from $1.1 billion at December 31, 2013. The Company experienced net loan growth of $148.3 million, or 17.7%, from December 31, 2013. Commercial real estate loans, residential mortgage loans, home equity loans, and indirect auto loans increased by $38.7 million, $61.2 million, $18.4 million and $16.4 million, respectively. The asset growth was funded by customer deposits and borrowings from the Federal Home Loan Bank.

At June 30, 2014, deposits totaled $891.9 million, an increase of $127.1 million or 16.6% from $764.8 million at December 31, 2013. Core deposits, which we consider to include all deposits other than CD's and brokered CD's, increased by $92.1 million from December 31, 2013. Hal R. Tovin, Executive Vice President and Chief Operating Officer, said, "Q2 was another good quarter for deposit growth. The maturing of our three InStore branches and the ongoing growth of our municipal banking program drove both checking and savings deposits. In addition, new and expanding small business banking and commercial real estate customer relationships continue to be important contributors to this strong performance."

Total stockholders' equity increased by $3.0 million from $130.4 million as of December 31, 2013 to $133.4 million as of June 30, 2014. This increase is primarily the result of earnings of $1.7 million and a $980,000 increase in additional paid-in capital related to stock based compensation.

ASSET QUALITY

The allowance for loan losses in total and as a percentage of total loans as of June 30, 2014 was $8.6 million and 0.87%, respectively, as compared to $8.0 million and 0.95%, respectively, as of December 31, 2013.  For the three and six months ended June 30, 2014 the Company recorded net charge offs of $35,000 and $39,000, respectively, as compared to $22,000 and $11,000 for the three and six months ending June 30, 2013. Total non-performing assets were $2.3 million, or 0.18% of total assets, as of June 30, 2014, as compared to $4.1 million, or 0.39% of total assets, as of December 31, 2013.

Company Profile

BSB Bancorp, Inc. is headquartered in Belmont, Massachusetts and is the holding company for Belmont Savings Bank. The Bank provides financial services to individuals, families and businesses through its six full-service branch offices located in Belmont, Watertown, Cambridge, Newton and Waltham in Southeast Middlesex County, Massachusetts. The Bank's primary lending market includes Essex, Middlesex, Norfolk and Suffolk Counties, Massachusetts. The Company's common stock is traded on the NASDAQ Capital Market under the symbol "BLMT". For more information, visit the Company's website at www.belmontsavings.com.

Forward-looking statements

Certain statements herein constitute "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, as amended. These statements are based on the beliefs and expectations of management, as well as the assumptions made using information currently available to management. Since these statements reflect the views of management concerning future events, these statements involve risks, uncertainties and assumptions. As a result, actual results may differ from those contemplated by these statements. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. They often include words like "believe," "expect," "anticipate," "estimate," and "intend" or future or conditional verbs such as "will," "would," "should," "could" or "may." Certain factors that could cause actual results to differ materially from expected results include changes in the interest rate environment, changes in general economic conditions, our ability to continue to increase loans and deposit growth, legislative and regulatory changes that adversely affect the businesses in which the Company is engaged, changes in the securities market, and other factors that may be described in the Company's annual report on Form 10-K and quarterly reports on Form 10-Q as filed with the Securities and Exchange Commission. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this release. The Company disclaims any intent or obligation to update any forward-looking statements, whether in response to new information, future events or otherwise, except as may be required by law.

 

BSB BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Dollars in thousands)







June 30, 2014


December 31, 2013






(unaudited)



ASSETS







Cash and due from banks



$                1,966


$                2,196

Interest-bearing deposits in other banks



46,914


35,839



Cash and cash equivalents



48,880


38,035

Interest-bearing time deposits with other banks



131


119

Investments in available-for-sale securities



22,208


21,921

Investments in held-to-maturity securities, at cost



123,682


119,776

Federal Home Loan Bank stock, at cost



10,542


7,712

Loans, net of allowance for loan losses of $8,614 as of 







6/30/2014 (unaudited) and $7,958 as of 12/31/2013



987,280


839,013

Premises and equipment, net



3,245


3,327

Accrued interest receivable



2,569


2,241

Deferred tax asset, net



5,134


5,146

Income taxes receivable



683


-

Bank-owned life insurance



13,529


13,325

Other assets



3,942


4,004



Total assets



$         1,221,825


$         1,054,619









LIABILITIES AND STOCKHOLDERS' EQUITY






Deposits:







Noninterest-bearing



$            161,171


$            139,733


Interest-bearing



730,720


625,020



Total deposits



891,891


764,753

Federal Home Loan Bank advances



180,100


142,100

Securities sold under agreements to repurchase



1,872


2,127

Other borrowed funds



1,090


1,113

Accrued interest payable



760


683

Deferred compensation liability



5,388


5,137

Income taxes payable



-


178

Other liabilities



7,332


8,107



Total liabilities



1,088,433


924,198









Stockholders' Equity:







Common stock



91


91


Additional paid-in capital



86,429


85,449


Retained earnings



51,033


49,312


Accumulated other comprehensive income (loss)



6


(188)


Unearned compensation - ESOP



(4,167)


(4,243)



Total stockholders' equity



133,392


130,421



Total liabilities and stockholders' equity



$         1,221,825


$         1,054,619









Asset Quality Data:






Total non-performing assets



$                2,256


$                4,115

Total non-performing loans



$                2,241


$                4,115

Non-performing loans to total loans



0.23%


0.49%

Non-performing assets to total assets



0.18%


0.39%

Allowance for loan losses to non-performing loans



384.37%


193.39%

Allowance for loan losses to total loans



0.87%


0.95%

 

BSB BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(Dollars in thousands, except per share data)








Three months ended


Six months ended







June 30,


June 30,







2014


2013


2014


2013







(unaudited)


(unaudited)

Interest and dividend income:











Interest and fees on loans



$        8,402


$       6,664


$      16,298


$     13,157


Interest on taxable debt securities



804


424


1,610


906


Dividends



33


7


62


14


Other interest income



29


23


50


40



Total interest and dividend income



9,268


7,118


18,020


14,117

Interest expense:











Interest on deposits



1,388


1,040


2,556


2,072


Interest on Federal Home Loan Bank advances



263


173


514


357


Interest on securities sold under agreements to repurchase



1


1


2


2


Interest on other borrowed funds



7


8


15


17



Total interest expense



1,659


1,222


3,087


2,448



Net interest and dividend income



7,609


5,896


14,933


11,669

Provision for loan losses



307


100


696


427



Net interest and dividend income after provision













 for loan losses



7,302


5,796


14,237


11,242

Noninterest income:











Customer service fees



225


231


443


458


Income from bank-owned life insurance



101


95


199


199


Net gain on sales of loans



163


449


225


800


Net gain on sales and calls of securities



-


4


-


34


Loan servicing fee income



203


128


419


298


Other income



165


1


293


125



Total noninterest income 



857


908


1,579


1,914

Noninterest expense:











Salaries and employee benefits



4,026


3,720


8,149


7,250


Director compensation



229


196


533


437


Occupancy expense



267


218


545


447


Equipment expense



157


150


311


298


Deposit insurance



180


147


364


274


Data processing



727


662


1,478


1,322


Professional fees



169


195


400


406


Marketing



256


239


515


448


Recruitment fees



6


103


21


103


Other expense



487


513


861


952



Total noninterest expense



6,504


6,143


13,177


11,937



Income before income tax expense



1,655


561


2,639


1,219

Income tax expense



614


200


918


442




Net income



$        1,041


$          361


$        1,721


$          777


Earnings per share













Basic



$          0.12


$         0.04


$          0.20


$         0.09




Diluted



$          0.12


$         0.04


$          0.20


$         0.09














Return on average assets



0.35%


0.17%


0.30%


0.18%

Return on average equity



3.18%


1.12%


2.65%


1.20%

Interest rate spread



2.46%


2.56%


2.53%


2.60%

Net interest margin



2.64%


2.79%


2.71%


2.85%

Efficiency ratio



76.82%


90.27%


79.81%


87.88%

 

Contact:


Robert M. Mahoney





President and Chief Executive Officer








Phone:


617-484-6700



Email:


robert.mahoney@belmontsavings.com



SOURCE BSB Bancorp, Inc.



RELATED LINKS
http://www.belmontsavings.com

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