BostonFed Bancorp, Inc. Announces First Quarter Results And Payment of $.15 per Share Dividend.

Apr 19, 2001, 01:00 ET from BostonFed Bancorp, Inc.

    BURLINGTON, Mass., April 19 /PRNewswire/ --
 BostonFed Bancorp, Inc. (Amex:   BFD) (the "Company"), the parent of Boston
 Federal Savings Bank ("BFS"), a federally-chartered stock savings bank, and
 Broadway National Bank ("BNB"), a national chartered commercial bank,
 announced first quarter net income of $2,010,000, or $.45 basic and
 $.42 diluted earnings per share, compared to net income of  $2,282,000, or
 $.48 basic and diluted earnings per share for the first quarter of 2000.
 One-half of the diluted earnings per share decline was due to the Company's
 higher average stock price during the current quarter, compared to the average
 stock price for the first quarter in 2000.  The remaining earnings per share
 decline was due primarily to lower gain on sales of loans at BFS's subsidiary
 Forward Financial Company and the net cost of the corporation-obligated
 mandatorily redeemable capital securities ("trust preferreds") that has not
 yet been fully leveraged.  The Company's return on average stockholders'
 equity was 8.7% for the quarter ended March 31, 2001, compared to 10.4% for
 the quarter ended March 31, 2000.  Please see "Cash Earnings Summary" for a
 discussion of cash earnings during the above referenced periods.
     Also, the Company announces the declaration of a quarterly cash dividend
 amounting to $.15 per share.  This represents a 15% increase in the quarterly
 dividend and the fifth consecutive annual increase since the Company's
 founding.  The dividend is payable on May 16, 2001, to shareholders of record
 at the close of business on May 2, 2001.
     As was previously announced, the Company completed its seventh 5% stock
 repurchase program and commenced its eighth repurchase program.  As of
 March 31, 2001, the Company has acquired 62,101 shares in its current
 repurchase program, at an average price of $23.80 per share.  The Company has
 168,653 shares remaining to be repurchased under this program.  Outstanding
 shares as of March 31, 2001 were 4,555,481.  To date, the Company has
 repurchased a total of 31% of its previously outstanding shares.
     Net interest income during the first quarter of 2001 was $9.3 million,
 compared to $8.9 million for the first quarter of 2000.  The improvement in
 net interest income was primarily the result of margins earned on balance
 sheet growth as well as improved yields.  The expense for the trust preferreds
 is now included in interest expense; therefore, these regulatory capital
 instruments effectively reduce the net interest margin and spreads.  Although
 the trust preferred expense is included in interest expense in the current
 quarter, the net interest margin remained at 3.04% for the three months ended
 March 31, 2001; the same as the quarter ended March 31, 2000.
     The provision for loan losses was $212,000 for the quarter ended
 March 31, 2001, compared to $251,000 for the comparable period last year.  The
 decrease in the provision was due to the continued low level of non-performing
 loans and improved coverage ratio of allowance for loan losses as a percent of
 loans.  The allowance for loan losses was $11.5 million at March 31, 2001,
 compared to $11.4 million at December 31, 2000.  These amounts represent
 1,267% of non-performing loans and 1.07% as a percent of loans at
 March 31, 2001, compared to 1,190% and 1.07%, respectively, at
 December 31, 2000.  The Company's non-performing assets totaled $1.1 million,
 or .08% of assets at March 31, 2001 and December 31, 2000.
     Total non-interest income was $3.2 million for the quarters ended
 March 31, 2001 and 2000.  Deposit service fees increased from $460,000 in the
 quarter ended March 31, 2000, to $574,000 in the current quarter.  This
 increase was primarily due to higher levels of deposit accounts.  Gain on sale
 of loans was $1.6 million for the quarter ended March 31, 2001, compared to
 $1.9 million for last year's comparable quarter.  The decline in gain on sale
 of loans was due to the negative effects of the severe winter and market
 conditions on Forward Financial's loan sales, which amounted to $1.1 million
 in the quarter ended March 31, 2001, compared to $1.6 million in the quarter
 ended March 31, 2000.  Somewhat offsetting was an increase in the gain on sale
 of loans recognized by BFS totaling $508,000 during the quarter ended
 March 31, 2001, compared to $291,000 for the quarter ended March 31, 2000.
 Gain on sale of investments totaled $215,000 in the current quarter as the
 Company sold a portion of its equity securities portfolio.
     Total non-interest expenses increased to $9.2 million for the quarter
 ended March 31, 2001 from $8.2 million for the quarter ended March 31, 2000.
 The current quarter's non-interest expenses are higher primarily due to
 increased compensation and benefits, which reflect normal annual increases
 whereas the prior year's non-interest expenses for the quarter were lowered by
 the inclusion of real estate operations income recognized in the dissolution
 of a real estate subsidiary of BFS.
     Income tax expense for the quarters ended March 31, 2001 and 2000 was
 $1.1 million and $1.3 million, respectively.  The effective income tax rate
 was 35.4% during the current quarter, compared to 35.5% for the quarter ended
 March 31, 2000.
     Total assets at March 31, 2001 were $1.369 billion, compared to
 $1.328 billion at December 31, 2000, an increase of $40.9 million, or 3.1%.
 Asset growth was primarily attributable to a $24.1 million increase in
 mortgage-backed securities available for sale, a $6.3 million increase in
 loans held for sale and a $5.5 million increase in loans, net.
     Deposit accounts increased by $8.7 million, from a balance of
 $849.6 million at December 31, 2000 to a balance of $858.3 million at
 March 31, 2001.  Also, there was a net reduction of $13.8 million of wholesale
 brokered certificates of deposit, thus retail deposit growth was $22.5 million
 during the quarter, continuing the growth trend from last year.  Federal Home
 Loan Bank ("FHLB") advances and other borrowings increased by $32.2 million,
 to a balance of $376.5 million at March 31, 2001 from a balance of
 $344.3 million at December 31, 2000.  The Company utilized FHLB advances to
 support a portion of this quarter's asset growth.
     Total stockholders' equity was $89.4 million at March 31, 2001, compared
 to $89.9 million at December 31, 2000 and on a per share basis, the book value
 was $20.05 and $19.82, respectively.  The stockholders' equity to total assets
 ratio of the Company was 6.5% at March 31, 2001 and 6.8% at December 31, 2000.
 
      This earnings report may contain certain forward-looking statements,
 which are based on management's current expectations regarding economic,
 legislative, and regulatory issues that may impact the Company's earnings in
 future periods.  Factors that could cause future results to vary materially
 from current management expectations include, but are not limited to, general
 economic conditions, changes in interest rates, deposit flows, real estate
 values, and competition; changes in accounting principles, policies, or
 guidelines; changes in legislation or regulation; and other economic,
 competitive, governmental, regulatory and technological factors affecting the
 Company's operations, pricing, products and services.  The Company does not
 undertake, and specifically disclaims any obligation, to publicly release the
 result of any revisions which may be made to any forward-looking statements to
 reflect events or circumstances after the date of such statements or to
 reflect the occurrence of anticipated or unanticipated events.
 
                            BOSTONFED BANCORP, INC.
                             Cash Earnings Summary
 
     Cash earnings represent the amount by which tangible stockholder's equity
 changes each period due to operating results, which include reported earnings
 plus the non-cash charges, net of taxes, for the amortization and appreciation
 of allocated shares in the Company's Employee Stock Ownership Plan ("ESOP"),
 stock-based incentive plans ("SIP"), and amortization of goodwill.  A
 reconciliation of reported earnings and cash earnings for the three months
 ended March 31, 2001 and 2000 is as follows:
 
                                                   Three Months Ended
                                              3-31-01          3-31-00
                                (Dollars In Thousands Except Per Share Amounts)
 
     Reported Income                           $2,010           $2,282
 
     Add:
         ESOP Expense                             303              263
         SIP Expense                               38               71
         Goodwill                                 354              343
 
     Deduct:
         Tax on ESOP                              (53)             (77)
         Tax on SIP                               (15)             (28)
         Tax on Goodwill                         (120)            (115)
     Cash Earnings                             $2,517           $2,739
 
     Resultant Cash Earnings Data:
 
      Basic Earnings Per Share                  $0.56            $0.58
      Diluted Earnings Per Share                $0.52            $0.58
      Return on Assets (annualized)              0.76%            0.87%
      Return on Equity (annualized)             10.90%           12.49%
 
     Cash earnings indicate the addition to tangible capital, which measures
 the Company's capacity for growth, ability to execute share repurchases or pay
 dividends.  As indicated above, cash earnings for the quarter ended
 March 31, 2001 amounted to $2.5 million, or $508,000 more than reported
 earnings.
 
     Consolidated Balance Sheets           March 31,               December 31,
                                               2001                       2000
                                (Dollars In Thousands Except Per Share Amounts)
                                                      (Unaudited)
     Assets
     Cash and cash equivalents              $54,809                    $50,675
     Investment securities available for
      sale                                   67,613                     63,421
     Investment securities held to
      maturity                                1,304                      2,304
     Mortgage-backed securities
      available for sale                     39,483                     15,372
     Mortgage-backed securities held to
      maturity                               52,825                     55,283
     Loans held for sale                     19,110                     12,816
     Loans, net of allowance for loan
      losses                              1,041,927                  1,036,435
     Accrued interest receivable              7,404                      7,375
     Stock in FHLB of Boston & Federal
      Reserve Bank                           20,674                     20,649
     Premises and equipment                  10,244                     10,647
     Real estate owned                          147                        145
     Goodwill                                18,840                     19,195
     Other assets                            34,282                     33,465
            Total assets                 $1,368,662                 $1,327,782
 
     Liabilities and Stockholders'
      Equity
     Liabilities:
       Deposit accounts                    $858,310                   $849,647
       Federal Home Loan Bank Advances &
        Other Borrowed Money                376,500                    344,334
       Corporation-obligated mandatorily
        redeemable capital securities        32,000                     32,000
       Advance payments by borrowers for
        taxes and insurance                   3,091                      2,864
       Other liabilities                      9,360                      9,024
            Total liabilities             1,279,261                  1,237,869
     Stockholders' equity;
       Common stock and additional paid-
        in- capital                          67,772                     67,604
       Retained earnings                     59,102                     57,696
       Accumulated Other Comprehensive
        Income                                  132                         88
       Less unallocated ESOP shares          (1,058)                    (1,058)
       Less unearned 1996 Stock-Based
        Incentive Plan                          (99)                      (136)
       Less Treasury Stock                  (36,448)                   (34,281)
              Total stockholders' equity     89,401                     89,913
                Total liabilities and
                 stockholders' equity    $1,368,662                 $1,327,782
 
     Selected Financial Highlights -- (At End of Period)
       Total stockholders' equity to
        total assets                            6.5%                       6.8%
       Market value per share                $23.20                     $20.88
       Book value per common share           $20.05                     $19.82
       Number of shares outstanding       4,555,481                  4,648,481
       Non-performing loans                    $908                       $956
       Real estate owned                       $147                       $145
       Total non-performing assets           $1,055                     $1,101
       Total non-performing assets as a
        percent of
           total assets                        0.08%                      0.08%
       Allowance for loan losses            $11,504                    $11,381
       Allowance for loan losses as a
        percent of non-performing loans     1266.96%                   1190.48%
       Allowance for loan losses as a
        percent of non-performing assets    1090.43%                   1033.70%
       Allowance for loan losses as a
        percent of loans                       1.07%                      1.07%
       Total loans serviced for others     $884,270                   $886,629
 
 
     Consolidated Statements of Income
                                                      Three Months Ended
                                                           March 31,
                                              2001                        2000
                                                       (In Thousands)
                                                         (Unaudited)
     Interest income:
       Loans                               $20,890                     $19,661
       Mortgage-backed securities            1,286                         698
       Investment securities                 1,690                       1,387
         Total interest income and
          dividend income                   23,866                      21,746
     Interest expense:
       Deposit accounts                      8,224                       7,180
       Borrowed funds                        5,414                       5,716
       Corporation obligated mandatorily
        redeemable
         capital securities distributions      880                           0
         Total interest expense             14,518                      12,896
     Net interest income                     9,348                       8,850
     Provision for loan losses                 212                         251
       Net interest income after
        provision                            9,136                       8,599
     Non-interest income:
       Deposit service fees                    574                         460
       Loan processing and servicing fees      130                         175
       Gain on sale of loans                 1,619                       1,908
       Income from bank owned life
        insurance                              306                         315
       Gain on sale of investments             215                           0
       Other                                   356                         308
         Total non-interest income           3,200                       3,166
     Non-interest expense:
       Compensation and benefits             5,452                       5,134
       Occupancy and equipment               1,092                       1,004
       Data processing                         439                         355
       Advertising expense                     220                         244
       Federal deposit insurance premiums       44                          39
       Real estate operations                    3                        (287)
       Amortization of Goodwill                354                         343
       Other                                 1,622                       1,395
         Total non-interest expense          9,226                       8,227
     Income before income taxes              3,110                       3,538
     Income tax expense                      1,100                       1,256
     Net income                             $2,010                      $2,282
 
     Selected Financial Highlights --
            (For the periods ending)
       Basic earnings per share              $0.45                       $0.48
       Diluted earnings per share            $0.42                       $0.48
       Return on average
        assets(annualized)                    0.61%                       0.73%
       Return on average stockholders'
             equity(annualized)               8.70%                      10.41%
       Net interest rate
        spread(annualized)                    2.73%                       2.79%
       Net interest margin(annualized)        3.04%                       3.04%
       Mortgage loan originations
           (Dollars in Thousands)         $147,683                     $91,868
 
 
 

SOURCE BostonFed Bancorp, Inc.
    BURLINGTON, Mass., April 19 /PRNewswire/ --
 BostonFed Bancorp, Inc. (Amex:   BFD) (the "Company"), the parent of Boston
 Federal Savings Bank ("BFS"), a federally-chartered stock savings bank, and
 Broadway National Bank ("BNB"), a national chartered commercial bank,
 announced first quarter net income of $2,010,000, or $.45 basic and
 $.42 diluted earnings per share, compared to net income of  $2,282,000, or
 $.48 basic and diluted earnings per share for the first quarter of 2000.
 One-half of the diluted earnings per share decline was due to the Company's
 higher average stock price during the current quarter, compared to the average
 stock price for the first quarter in 2000.  The remaining earnings per share
 decline was due primarily to lower gain on sales of loans at BFS's subsidiary
 Forward Financial Company and the net cost of the corporation-obligated
 mandatorily redeemable capital securities ("trust preferreds") that has not
 yet been fully leveraged.  The Company's return on average stockholders'
 equity was 8.7% for the quarter ended March 31, 2001, compared to 10.4% for
 the quarter ended March 31, 2000.  Please see "Cash Earnings Summary" for a
 discussion of cash earnings during the above referenced periods.
     Also, the Company announces the declaration of a quarterly cash dividend
 amounting to $.15 per share.  This represents a 15% increase in the quarterly
 dividend and the fifth consecutive annual increase since the Company's
 founding.  The dividend is payable on May 16, 2001, to shareholders of record
 at the close of business on May 2, 2001.
     As was previously announced, the Company completed its seventh 5% stock
 repurchase program and commenced its eighth repurchase program.  As of
 March 31, 2001, the Company has acquired 62,101 shares in its current
 repurchase program, at an average price of $23.80 per share.  The Company has
 168,653 shares remaining to be repurchased under this program.  Outstanding
 shares as of March 31, 2001 were 4,555,481.  To date, the Company has
 repurchased a total of 31% of its previously outstanding shares.
     Net interest income during the first quarter of 2001 was $9.3 million,
 compared to $8.9 million for the first quarter of 2000.  The improvement in
 net interest income was primarily the result of margins earned on balance
 sheet growth as well as improved yields.  The expense for the trust preferreds
 is now included in interest expense; therefore, these regulatory capital
 instruments effectively reduce the net interest margin and spreads.  Although
 the trust preferred expense is included in interest expense in the current
 quarter, the net interest margin remained at 3.04% for the three months ended
 March 31, 2001; the same as the quarter ended March 31, 2000.
     The provision for loan losses was $212,000 for the quarter ended
 March 31, 2001, compared to $251,000 for the comparable period last year.  The
 decrease in the provision was due to the continued low level of non-performing
 loans and improved coverage ratio of allowance for loan losses as a percent of
 loans.  The allowance for loan losses was $11.5 million at March 31, 2001,
 compared to $11.4 million at December 31, 2000.  These amounts represent
 1,267% of non-performing loans and 1.07% as a percent of loans at
 March 31, 2001, compared to 1,190% and 1.07%, respectively, at
 December 31, 2000.  The Company's non-performing assets totaled $1.1 million,
 or .08% of assets at March 31, 2001 and December 31, 2000.
     Total non-interest income was $3.2 million for the quarters ended
 March 31, 2001 and 2000.  Deposit service fees increased from $460,000 in the
 quarter ended March 31, 2000, to $574,000 in the current quarter.  This
 increase was primarily due to higher levels of deposit accounts.  Gain on sale
 of loans was $1.6 million for the quarter ended March 31, 2001, compared to
 $1.9 million for last year's comparable quarter.  The decline in gain on sale
 of loans was due to the negative effects of the severe winter and market
 conditions on Forward Financial's loan sales, which amounted to $1.1 million
 in the quarter ended March 31, 2001, compared to $1.6 million in the quarter
 ended March 31, 2000.  Somewhat offsetting was an increase in the gain on sale
 of loans recognized by BFS totaling $508,000 during the quarter ended
 March 31, 2001, compared to $291,000 for the quarter ended March 31, 2000.
 Gain on sale of investments totaled $215,000 in the current quarter as the
 Company sold a portion of its equity securities portfolio.
     Total non-interest expenses increased to $9.2 million for the quarter
 ended March 31, 2001 from $8.2 million for the quarter ended March 31, 2000.
 The current quarter's non-interest expenses are higher primarily due to
 increased compensation and benefits, which reflect normal annual increases
 whereas the prior year's non-interest expenses for the quarter were lowered by
 the inclusion of real estate operations income recognized in the dissolution
 of a real estate subsidiary of BFS.
     Income tax expense for the quarters ended March 31, 2001 and 2000 was
 $1.1 million and $1.3 million, respectively.  The effective income tax rate
 was 35.4% during the current quarter, compared to 35.5% for the quarter ended
 March 31, 2000.
     Total assets at March 31, 2001 were $1.369 billion, compared to
 $1.328 billion at December 31, 2000, an increase of $40.9 million, or 3.1%.
 Asset growth was primarily attributable to a $24.1 million increase in
 mortgage-backed securities available for sale, a $6.3 million increase in
 loans held for sale and a $5.5 million increase in loans, net.
     Deposit accounts increased by $8.7 million, from a balance of
 $849.6 million at December 31, 2000 to a balance of $858.3 million at
 March 31, 2001.  Also, there was a net reduction of $13.8 million of wholesale
 brokered certificates of deposit, thus retail deposit growth was $22.5 million
 during the quarter, continuing the growth trend from last year.  Federal Home
 Loan Bank ("FHLB") advances and other borrowings increased by $32.2 million,
 to a balance of $376.5 million at March 31, 2001 from a balance of
 $344.3 million at December 31, 2000.  The Company utilized FHLB advances to
 support a portion of this quarter's asset growth.
     Total stockholders' equity was $89.4 million at March 31, 2001, compared
 to $89.9 million at December 31, 2000 and on a per share basis, the book value
 was $20.05 and $19.82, respectively.  The stockholders' equity to total assets
 ratio of the Company was 6.5% at March 31, 2001 and 6.8% at December 31, 2000.
 
      This earnings report may contain certain forward-looking statements,
 which are based on management's current expectations regarding economic,
 legislative, and regulatory issues that may impact the Company's earnings in
 future periods.  Factors that could cause future results to vary materially
 from current management expectations include, but are not limited to, general
 economic conditions, changes in interest rates, deposit flows, real estate
 values, and competition; changes in accounting principles, policies, or
 guidelines; changes in legislation or regulation; and other economic,
 competitive, governmental, regulatory and technological factors affecting the
 Company's operations, pricing, products and services.  The Company does not
 undertake, and specifically disclaims any obligation, to publicly release the
 result of any revisions which may be made to any forward-looking statements to
 reflect events or circumstances after the date of such statements or to
 reflect the occurrence of anticipated or unanticipated events.
 
                            BOSTONFED BANCORP, INC.
                             Cash Earnings Summary
 
     Cash earnings represent the amount by which tangible stockholder's equity
 changes each period due to operating results, which include reported earnings
 plus the non-cash charges, net of taxes, for the amortization and appreciation
 of allocated shares in the Company's Employee Stock Ownership Plan ("ESOP"),
 stock-based incentive plans ("SIP"), and amortization of goodwill.  A
 reconciliation of reported earnings and cash earnings for the three months
 ended March 31, 2001 and 2000 is as follows:
 
                                                   Three Months Ended
                                              3-31-01          3-31-00
                                (Dollars In Thousands Except Per Share Amounts)
 
     Reported Income                           $2,010           $2,282
 
     Add:
         ESOP Expense                             303              263
         SIP Expense                               38               71
         Goodwill                                 354              343
 
     Deduct:
         Tax on ESOP                              (53)             (77)
         Tax on SIP                               (15)             (28)
         Tax on Goodwill                         (120)            (115)
     Cash Earnings                             $2,517           $2,739
 
     Resultant Cash Earnings Data:
 
      Basic Earnings Per Share                  $0.56            $0.58
      Diluted Earnings Per Share                $0.52            $0.58
      Return on Assets (annualized)              0.76%            0.87%
      Return on Equity (annualized)             10.90%           12.49%
 
     Cash earnings indicate the addition to tangible capital, which measures
 the Company's capacity for growth, ability to execute share repurchases or pay
 dividends.  As indicated above, cash earnings for the quarter ended
 March 31, 2001 amounted to $2.5 million, or $508,000 more than reported
 earnings.
 
     Consolidated Balance Sheets           March 31,               December 31,
                                               2001                       2000
                                (Dollars In Thousands Except Per Share Amounts)
                                                      (Unaudited)
     Assets
     Cash and cash equivalents              $54,809                    $50,675
     Investment securities available for
      sale                                   67,613                     63,421
     Investment securities held to
      maturity                                1,304                      2,304
     Mortgage-backed securities
      available for sale                     39,483                     15,372
     Mortgage-backed securities held to
      maturity                               52,825                     55,283
     Loans held for sale                     19,110                     12,816
     Loans, net of allowance for loan
      losses                              1,041,927                  1,036,435
     Accrued interest receivable              7,404                      7,375
     Stock in FHLB of Boston & Federal
      Reserve Bank                           20,674                     20,649
     Premises and equipment                  10,244                     10,647
     Real estate owned                          147                        145
     Goodwill                                18,840                     19,195
     Other assets                            34,282                     33,465
            Total assets                 $1,368,662                 $1,327,782
 
     Liabilities and Stockholders'
      Equity
     Liabilities:
       Deposit accounts                    $858,310                   $849,647
       Federal Home Loan Bank Advances &
        Other Borrowed Money                376,500                    344,334
       Corporation-obligated mandatorily
        redeemable capital securities        32,000                     32,000
       Advance payments by borrowers for
        taxes and insurance                   3,091                      2,864
       Other liabilities                      9,360                      9,024
            Total liabilities             1,279,261                  1,237,869
     Stockholders' equity;
       Common stock and additional paid-
        in- capital                          67,772                     67,604
       Retained earnings                     59,102                     57,696
       Accumulated Other Comprehensive
        Income                                  132                         88
       Less unallocated ESOP shares          (1,058)                    (1,058)
       Less unearned 1996 Stock-Based
        Incentive Plan                          (99)                      (136)
       Less Treasury Stock                  (36,448)                   (34,281)
              Total stockholders' equity     89,401                     89,913
                Total liabilities and
                 stockholders' equity    $1,368,662                 $1,327,782
 
     Selected Financial Highlights -- (At End of Period)
       Total stockholders' equity to
        total assets                            6.5%                       6.8%
       Market value per share                $23.20                     $20.88
       Book value per common share           $20.05                     $19.82
       Number of shares outstanding       4,555,481                  4,648,481
       Non-performing loans                    $908                       $956
       Real estate owned                       $147                       $145
       Total non-performing assets           $1,055                     $1,101
       Total non-performing assets as a
        percent of
           total assets                        0.08%                      0.08%
       Allowance for loan losses            $11,504                    $11,381
       Allowance for loan losses as a
        percent of non-performing loans     1266.96%                   1190.48%
       Allowance for loan losses as a
        percent of non-performing assets    1090.43%                   1033.70%
       Allowance for loan losses as a
        percent of loans                       1.07%                      1.07%
       Total loans serviced for others     $884,270                   $886,629
 
 
     Consolidated Statements of Income
                                                      Three Months Ended
                                                           March 31,
                                              2001                        2000
                                                       (In Thousands)
                                                         (Unaudited)
     Interest income:
       Loans                               $20,890                     $19,661
       Mortgage-backed securities            1,286                         698
       Investment securities                 1,690                       1,387
         Total interest income and
          dividend income                   23,866                      21,746
     Interest expense:
       Deposit accounts                      8,224                       7,180
       Borrowed funds                        5,414                       5,716
       Corporation obligated mandatorily
        redeemable
         capital securities distributions      880                           0
         Total interest expense             14,518                      12,896
     Net interest income                     9,348                       8,850
     Provision for loan losses                 212                         251
       Net interest income after
        provision                            9,136                       8,599
     Non-interest income:
       Deposit service fees                    574                         460
       Loan processing and servicing fees      130                         175
       Gain on sale of loans                 1,619                       1,908
       Income from bank owned life
        insurance                              306                         315
       Gain on sale of investments             215                           0
       Other                                   356                         308
         Total non-interest income           3,200                       3,166
     Non-interest expense:
       Compensation and benefits             5,452                       5,134
       Occupancy and equipment               1,092                       1,004
       Data processing                         439                         355
       Advertising expense                     220                         244
       Federal deposit insurance premiums       44                          39
       Real estate operations                    3                        (287)
       Amortization of Goodwill                354                         343
       Other                                 1,622                       1,395
         Total non-interest expense          9,226                       8,227
     Income before income taxes              3,110                       3,538
     Income tax expense                      1,100                       1,256
     Net income                             $2,010                      $2,282
 
     Selected Financial Highlights --
            (For the periods ending)
       Basic earnings per share              $0.45                       $0.48
       Diluted earnings per share            $0.42                       $0.48
       Return on average
        assets(annualized)                    0.61%                       0.73%
       Return on average stockholders'
             equity(annualized)               8.70%                      10.41%
       Net interest rate
        spread(annualized)                    2.73%                       2.79%
       Net interest margin(annualized)        3.04%                       3.04%
       Mortgage loan originations
           (Dollars in Thousands)         $147,683                     $91,868
 
 
 SOURCE  BostonFed Bancorp, Inc.