BSB Bancorp, Inc. Reports Second Quarter Results - Year to Date Earnings Growth of 73%

Jul 23, 2015, 17:00 ET from BSB Bancorp, Inc.

BELMONT, Mass., July 23, 2015 /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 $1.6 million, or $0.18 per diluted share, for the quarter ended June 30, 2015, compared to net income of $1.0 million, or $0.12 per diluted share, for the quarter ended June 30, 2014, or an increase of 54.0%. For the six months ended June 30, 2015, the Company reported net income of $3.0 million, or $0.34 per diluted share, as compared to net income of $1.7 million, or $0.20 per diluted share, for the six months ended June 30, 2014, or an increase of 73.0%.  

Robert M. Mahoney, President and Chief Executive Officer, said, "We are pleased to announce a continuation of our organic growth and improving profitability."

NET INTEREST AND DIVIDEND INCOME

Net interest and dividend income before provision for loan losses for the quarter ended June 30, 2015 was $9.0 million as compared to $7.6 million for the quarter ended June 30, 2014, or an 18.6% increase. The provision for loan losses for the quarter ended June 30, 2015 was $365,000 as compared to a provision for loan losses of $307,000 for the quarter ended June 30, 2014, or an 18.9% increase. This resulted in a $1.4 million, or 18.6%, increase in net interest and dividend income after provision for loan losses for the quarter ended June 30, 2015 as compared to the quarter ended June 30, 2014. Net interest and dividend income before provision for loan losses for the six months ended June 30, 2015 was $17.8 million as compared to $14.9 million for the six months ended June 30, 2014, or a 19.1% increase. The provision for loan losses for the six months ended June 30, 2015 was $704,000, as compared to $696,000 for the six months ended June 30, 2014, or a 1.1% increase. This resulted in a $2.8 million, or 20.0%, increase in net interest and dividend income after provision for loan losses for the six months ended June 30, 2015 as compared to the six months ended June 30, 2014.

NONINTEREST INCOME

Noninterest income for the quarter ended June 30, 2015 was $948,000 as compared to $859,000 for the quarter ended June 30, 2014, or an increase of 10.4%. This increase was primarily driven by an increase in net gains on sales of loans and income from bank owned life insurance. Net gains on sales of loans increased $130,000 due to an increase in volume of loan sales. Income from bank owned life insurance increased $101,000 due to $15 million of additional policies purchased subsequent to June 30, 2014. This increase was partially offset by a decrease in loan servicing fee income of $60,000. Loan servicing fees decreased primarily due to a decrease in the volume of auto loans serviced for others. Noninterest income for the six months ended June 30, 2015 was $1.7 million as compared to $1.6 million for the six months ended June 30, 2014, or an increase of 7.8%. This increase was also driven by an increase in income from bank owned life insurance and net gains on sales of loans, partially offset by a decrease in loan servicing fee income.

NONINTEREST EXPENSE

Noninterest expense for the quarter ended June 30, 2015 was $7.0 million as compared to $6.5 million for the quarter ended June 30, 2014, or an increase of 7.4%. This increase was primarily driven by an increase in salaries and employee benefits costs. Our efficiency ratio improved to 70.1% during the quarter ended June 30, 2015 from 76.8% during the quarter ended June 30, 2014 as we continue to grow the balance sheet and manage costs. Noninterest expense for the six months ended June 30, 2015 was $13.9 million as compared to $13.2 million for the six months ended June 30, 2014, or an increase of 5.7%. This increase was primarily driven by an increase in salaries and employee benefits costs. Our efficiency ratio also improved to 71.4% during the six months ended June 30, 2015, from 79.8% during the six months ended June 30, 2014.

BALANCE SHEET

At June 30, 2015, total assets were $1.55 billion, an increase of $126.5 million or 8.9% from $1.43 billion at December 31, 2014. The Company experienced net loan growth of $112.9 million, or 9.6%, from December 31, 2014. Residential one-to-four family loans, commercial real estate loans, construction loans and home equity lines of credit increased by $71.6 million, $28.8 million, $12.3 million and $11.2 million, respectively. Partially offsetting this increase were decreases in commercial loans and indirect auto loans of $8.0 million and $2.4 million, respectively. The asset growth was funded by growth in deposits. We expect the balance of our indirect auto loan portfolio to decline as we have temporarily suspended new originations due to current market conditions.

At June 30, 2015, deposits totaled $1.15 billion, an increase of $165.2 million or 16.8% from $984.6 million at December 31, 2014. Core deposits, which we consider to include all deposits other than CD's and brokered CD's, increased by $130.8 million from December 31, 2014. Hal R. Tovin, Executive Vice President and Chief Operating Officer, said, "Second quarter deposit growth was driven by our expanding municipal banking program as well as the continued success of our targeted strategy for the legal profession. Existing relationships as well as new business penetration in both categories have created strong increases in municipal and IOLTA deposits."

Total stockholders' equity increased by $4.1 million from $137.0 million as of December 31, 2014 to $141.2 million as of June 30, 2015. This increase is primarily the result of earnings of $3.0 million and a $1.1 million 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, 2015 was $9.5 million and 0.74%, respectively, as compared to $8.9 million and 0.75%, respectively, as of December 31, 2014.  For the six months ended June 30, 2015, the Company recorded net charge offs of $48,000, as compared to $40,000 for the six months ending June 30, 2014. Total non-performing assets were $2.8 million, or 0.18% of total assets, as of June 30, 2015, as compared to $2.8 million, or 0.20% of total assets as of December 31, 2014.

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, municipalities 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, except per share data)







June 30, 2015


December 31, 2014






(unaudited)



ASSETS





Cash and due from banks


$              1,739


$              2,275

Interest-bearing deposits in other banks


45,765


49,492




Cash and cash equivalents


47,504


51,767

Interest-bearing time deposits with other banks


131


131

Investments in available-for-sale securities


22,025


22,079

Investments in held-to-maturity securities (fair value of $129,324 as of 







June 30, 2015 and $119,447 as of December 31, 2014)


128,801


118,528

Federal Home Loan Bank stock, at cost


15,082


13,712

Loans, net of allowance for loan losses of $9,537 as of 







June 30, 2015 and $8,881 as of December 31, 2014


1,292,273


1,179,399

Premises and equipment, net


2,888


3,066

Accrued interest receivable


3,243


2,977

Deferred tax asset, net


5,860


5,642

Income taxes receivable


791


321

Bank-owned life insurance


29,282


23,888

Other assets


4,172


4,040




Total assets


$       1,552,052


$       1,425,550









LIABILITIES AND STOCKHOLDERS' EQUITY





Deposits:







Noninterest-bearing


$          168,919


$          179,205



Interest-bearing


980,838


805,357




Total deposits


1,149,757


984,562

Federal Home Loan Bank advances


241,100


285,100

Securities sold under agreements to repurchase


2,460


1,392

Other borrowed funds


1,044


1,067

Accrued interest payable


991


961

Deferred compensation liability


6,192


5,751

Other liabilities


9,355


9,707




Total liabilities


1,410,899


1,288,540

Stockholders' Equity:






Common stock; $0.01 par value, 100,000,000 shares authorized; 9,084,081 and 9,067,792







shares issued and outstanding at June 30, 2015 and December 31, 2014, respectively


91


91


Additional paid-in capital


88,527


87,428


Retained earnings


56,580


53,603


Accumulated other comprehensive loss


(32)


(22)


Unearned compensation - ESOP


(4,013)


(4,090)




Total stockholders' equity


141,153


137,010




Total liabilities and stockholders' equity


$       1,552,052


$       1,425,550

















Asset Quality Data:





Total non-performing assets


$              2,821


$              2,818

Total non-performing loans


$              2,773


$              2,770

Non-performing loans to total loans


0.21%


0.23%

Non-performing assets to total assets


0.18%


0.20%

Allowance for loan losses to non-performing loans


343.87%


320.59%

Allowance for loan losses to total loans


0.74%


0.75%









Share Data:





Outstanding common shares


9,084,081


9,067,792

Book value per share


$              15.54


$              15.11

 

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,










2015


2014


2015


2014










(unaudited)


(unaudited)

Interest and dividend income:













Interest and fees on loans





$      10,679


$       8,402


$      20,911


$     16,295


Interest on taxable debt securities





738


804


1,479


1,610


Dividends





64


33


122


62


Other interest income





22


29


44


50




Total interest and dividend income





11,503


9,268


22,556


18,017

Interest expense:













Interest on deposits





1,941


1,388


3,696


2,556


Interest on Federal Home Loan Bank advances





527


263


1,058


514


Interest on securities sold under agreements to repurchase





1


1


1


2


Interest on other borrowed funds





7


7


14


15




Total interest expense





2,476


1,659


4,769


3,087




Net interest and dividend income





9,027


7,609


17,787


14,930

Provision for loan losses





365


307


704


696




Net interest and dividend income after provision
















 for loan losses





8,662


7,302


17,083


14,234

Noninterest income:













Customer service fees





204


225


415


443


Income from bank-owned life insurance





202


101


389


199


Net gain on sales of loans





293


163


332


225


Loan servicing fee income





143


203


304


419


Other income





106


167


264


295




Total noninterest income 





948


859


1,704


1,581

Noninterest expense:













Salaries and employee benefits





4,377


4,026


8,721


8,149


Director compensation





215


229


492


533


Occupancy expense





264


267


557


545


Equipment expense





140


157


284


311


Deposit insurance





232


180


450


364


Data processing





772


727


1,527


1,478


Professional fees





177


169


389


400


Marketing





266


256


519


515


Other expense





545


495


985


881




Total noninterest expense





6,988


6,506


13,924


13,176




Income before income tax expense





2,622


1,655


4,863


2,639

Income tax expense





1,019


614


1,886


918





Net income





$        1,603


$       1,041


$        2,977


$       1,721


Earnings per share
















Basic





$          0.19


$         0.12


$          0.34


$         0.20





Diluted





$          0.18


$         0.12


$          0.34


$         0.20

















Return on average assets





0.43%


0.35%


0.41%


0.30%

Return on average equity





4.57%


3.14%


4.30%


2.62%

Interest rate spread





2.31%


2.46%


2.34%


2.53%

Net interest margin





2.47%


2.64%


2.50%


2.70%

Efficiency ratio





70.06%


76.83%


71.44%


79.80%

 

 

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