BCSB Bancorp, Inc. Reports Results for Quarter Ending June 30, 2010

BALTIMORE, July 23 /PRNewswire-FirstCall/ -- BCSB Bancorp, Inc. (the "Company") (Nasdaq: BCSB), the holding company for Baltimore County Savings Bank, FSB, (the "Bank") reported net income of $607,000 for the three month period ended June 30, 2010, which represents the third quarter of its 2010 fiscal year, as compared to a net loss of $418,000 for the three months ended June 30, 2009. 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 net income available to common stockholders of $451,000 or $0.15 per basic common share and $0.14 per diluted common share for the three months ended June 30, 2010, compared to a net loss available to common stockholders of $575,000 or ($0.20) per basic and diluted common share for the three months ended June 30, 2009.

Net income for the nine months ended June 30, 2010 was $638,000, as compared to a net loss of $76,000 for the nine months ended June 30, 2009. When consideration is given to dividends and discount accretion on preferred shares issued under the U.S. Treasury's TARP Capital Purchase Program, net income available to common stockholders was $169,000 or $0.06 per basic and diluted share for the nine months ended June 30, 2010, compared to a net loss available to common stockholders of $398,000 or $(0.14) per basic and diluted common share for the nine months ended June 30, 2009.

During the three and nine months ended June 30, 2010, the Company benefited from increased net interest income and non-interest income as compared to the corresponding period during the prior fiscal year. These improvements to earnings were partially offset by significant increases in loan loss provisions during the nine months ended June 30, 2010. The Company also recognized $100,000 and $500,000 in credit losses during the nine months ended June 30, 2010 and 2009, respectively, for certain private label collateralized mortgage obligation (CMO) securities deemed by management to be "Other Than Temporarily Impaired" (OTTI).

Additional loan loss provisions were necessary during the nine months ended June 30, 2010 to address the continued decline in overall economic conditions and increases in troubled assets, particularly in relation to the commercial loan portfolio. Nonperforming assets were $13.9 million at June 30, 2010 versus $8.3 million at September 30, 2009, the Company's prior fiscal year end. Most of the nonperforming assets consisted of commercial loans, which increased to $13.1 million at June 30, 2010 from $6.3 million at September 30, 2009 partially due to the addition to nonperforming assets of one $3.5 million loan relationship. The loan is secured with commercial real estate that was utilized as an owner occupied manufacturing facility.

President and Chief Executive Officer Joseph J. Bouffard commented, "We are encouraged by operating results for the most recently completed quarter given the challenges within the banking industry. Although our troubled loans have risen, asset quality remains strong overall. Management continues to be proactive in establishing what are believed to be appropriate reserve levels. We remain very well capitalized and are favorably positioned to weather these difficult economic conditions."

As noted above, OTTI charges were recorded during both the current and previous fiscal years. These charges relate to the Company's $20.2 million CMO securities portfolio. At June 30, 2010, the Company had $4.4 million in gross unrealized losses related to these CMO 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.

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, 2009.  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 Bankcorp, Inc.