BELMONT, Mass., Oct. 27, 2011 /PRNewswire/ -- BSB Bancorp, Inc. (NASDAQ: BLMT) (the "Company") today announced the results for the quarter ended September 30, 2011.
The Company was organized by BSB Bancorp, MHC to facilitate its conversion from mutual to stock form of organization, which was completed on October 4, 2011. The results for the third quarter are the results of BSB Bancorp, MHC, the former mutual holding company for Belmont Savings Bank (the "Bank"). In connection with the conversion, the Company issued 8,993,000 shares of common stock which raised approximately $84.3 million of new capital. The Company also contributed $200,000 in cash and 179,860 shares of its common stock to Belmont Savings Bank Foundation, a not-for-profit charitable foundation that the Bank established coincident with the stock offering.
For the quarter ended September 30, 2011, the Company reported net income of $295,000, as compared to $906,000 for the third quarter of 2010. Net income for the nine months ended September 30, 2011 and 2010 each totaled $1.6 million. These quarterly results correspond to a return on average assets and average equity of 0.21% and 2.48%, respectively, for the third quarter of 2011 and 0.72% and 8.00%, respectively, for the third quarter of 2010. The 2011 year-to-date results correspond to a return on average assets and average equity of 0.41% and 4.64%, respectively, as compared to 0.44% and 4.94% in 2010, respectively.
Robert M. Mahoney, President and Chief Executive Officer, said, "We are pleased with the results of the quarter. Our initiatives to prudently build new commercial and consumer deposit and loan businesses are working as planned. Solid growth was experienced in each of our new strategic business lines. We are equally proud of our community engagement which together with our focus on customer service resulted in the Bank being named Gatehouse Media's #1 choice for community banking in Belmont and winning the Watertown Belmont Chamber of Commerce Business Award."
Net interest and dividend income before provision for loan losses for the quarter ended September 30, 2011 increased $915,000 or 27.2% as compared to the quarter ended September 30, 2010. This increase in net interest and dividend income was partially offset by an increase in the provision for loan losses of $353,000, resulting in a $562,000 or 16.5% increase in net interest and dividend income after provision for loan losses. Net interest and dividend income before provision for loan losses for the nine months ended September 30, 2011 increased $1.4 million or 13.4% as compared to the nine months ended September 30, 2010. This increase in net interest and dividend income was partially offset by an increase in the provision for loan losses of $1.3 million.
The Company's net interest margin increased to 3.16% for the quarter ended September 30, 2011, from 2.87% for the quarter ended September 30, 2010, an improvement of 29 basis points or 10.10%. For the nine months ended September 30, 2011, the Company's net interest margin increased to 3.08% from 2.93% for the nine months ended September 30, 2010, an improvement of 15 basis points or 5.12%. The margin improvement was the result of shifting asset focus onto higher yielding loans, focusing deposit growth on lower cost core deposits and the replacement of maturing advances with lower cost advances.
Non-interest income for the quarter ended September 30, 2011 totaled $438,000 as compared to $1.4 million for the third quarter of 2010. The third quarter of 2010 included $1.0 million in net realized gains on investment securities, as compared to none in the same period of 2011. For the nine months ended September 30, 2011, non-interest income amounted to $4.0 million as compared to $1.4 million for the nine months ended September 30, 2010. This increase was a result of $2.8 million in net realized gains on investment securities as a result of the liquidation of the equity portfolio in the first quarter of 2011, as compared to $377,000 in net realized gains in the same period of 2010.
Non-interest expense for the quarter ended September 30, 2011 amounted to $4.0 million as compared to $3.5 million for the third quarter of 2010. Non-interest expense for the nine months ended September 30, 2011 amounted to $11.6 million, an increase of $2.6 million from the same period 2010. These increases were primarily the result of new staff added to execute the Company's commercial and consumer business strategies.
At September30, 2011, assets totaled $688.6million, an increase of $188.3million or 37.6% from December31, 2010. Throughout 2011, we increased our commercial real estate loans, home equity lines of credit, commercial business loans and indirect automobile loans, while attracting favorably priced deposits. As a result of the public offering the Company had $116.1 million in escrow within savings deposits as of September 30, 2011, which was predominately invested in short-term investments at the balance sheet date.
During the nine months ended September 30, 2011 the Company experienced loan growth of $104.4 million, or 31.0%, from December31, 2010 which was primarily the result of significant increases to the commercial real estate portfolio and the indirect auto portfolio, which have increased $36.9 million and $59.0 million, respectively. The Company does not anticipate continuing the rapid pace of growth with the indirect auto portfolio that took place in the first nine months of 2011, as we expect to sell more of the originations going forward. The substantial loan growth was funded through growth in deposits, as well as through investment maturities and the liquidation of the Bank's marketable equities portfolio.
At September30, 2011, deposits totaled $537.3million, an increase of $190.4million from December31, 2010, of which $116.1 million were escrow deposits related to the offering. This strong deposit growth was a result of our new customer-centric, relationship-based, product line coupled with increased marketing and sales efforts. These initiatives have resulted in an increase in customer relationships throughout our franchise. Business checking accounts grew by $9.8 million or 71.2% from December 31, 2010 to September 30, 2011. In addition, consumer checking accounts have increased by $9.4 million, or 22.0%. Savings and money market accounts have also increased $171.1 million since December 31, 2010 (including the $116.1 million in escrow mentioned above), and certificates of deposit increased $92,000 from December31, 2010. Total borrowed funds decreased by $2.8million or 2.8% from December31, 2010 and totaled $97.8 million at September30, 2011.
The allowance for loan losses in total and as a percentage of total loans as of September 30, 2011 equaled $4.0million and 0.91%, respectively, as compared to $2.9million and 0.85%, respectively, as of December31, 2010. The Company recorded a provision for loan losses of $1.5million in the first nine months of 2011 as compared to $247,000 in the first nine months of 2010. This increase reflected changes in loan volume and composition in each period as well as higher specific allocations established against certain loans in 2011. Additionally, as part of a continuous review and analysis of current market and economic conditions by management, the Company adjusted the reserve ratio applied to certain loan categories in 2011. Although non-performing loans have increased to $4.1 million at September 30, 2011 from $1.7 million at December 31, 2010, $1.8 million of the non-performing loans were paid current and $961,000 were less than 90 days past due as of September 30, 2011.
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 four full-service branch offices located in Belmont and Watertown 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 NASD 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 Section27A of the Securities Act of 1933 and Section21E 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, legislative and regulatory changes that adversely affect the businesses in which BSB Bancorp, Inc. is engaged and changes in the securities market. 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.
BSB BANCORP, MHC * CONSOLIDATED BALANCE SHEETS (Dollars in thousands) | ||||||||
September 30, 2011 | December 31, 2010 | |||||||
(unaudited) | ||||||||
ASSETS | ||||||||
Cash and due from banks | $ 1,416 | $ 3,149 | ||||||
Federal funds sold | - | 2,525 | ||||||
Money market mutual funds | 2,493 | 7,762 | ||||||
Interest-bearing deposits in other banks | 119,300 | 7,552 | ||||||
Cash and cash equivalents | 123,209 | 20,988 | ||||||
Interest-bearing time deposits with other banks | 119 | 119 | ||||||
Investments in available-for-sale securities | - | 14,274 | ||||||
Investments in held-to-maturity securities (fair value of $91,626 as of | ||||||||
September 30, 2011 (unaudited) and $95,761 as of December 31, 2010 | 89,851 | 93,899 | ||||||
Federal Home Loan Bank stock, at cost | 8,038 | 8,038 | ||||||
Loans held-for-sale | 2,663 | 3,775 | ||||||
Loans, net of allowance for loan losses of $4,043 as of | ||||||||
September 30, 2011 (unaudited) and $2,889 as of December 31, 2010 | 441,340 | 336,936 | ||||||
Premises and equipment, net | 1,974 | 1,939 | ||||||
Accrued interest receivable | 2,060 | 2,121 | ||||||
Deferred tax asset, net | 3,188 | 2,913 | ||||||
Income taxes receivable | 682 | 908 | ||||||
Bank-owned life insurance | 12,296 | 11,954 | ||||||
Other assets | 3,216 | 2,423 | ||||||
Total assets | $ 688,636 | $ 500,287 | ||||||
LIABILITIES AND EQUITY | ||||||||
Deposits: | ||||||||
Noninterest-bearing | $ 47,053 | $ 30,210 | ||||||
Interest-bearing | 490,208 | 316,689 | ||||||
Total deposits | 537,261 | 346,899 | ||||||
Federal Home Loan Bank advances | 93,000 | 92,800 | ||||||
Securities sold under agreements to repurchase | 3,256 | 2,654 | ||||||
Other borrowed funds | 1,565 | 5,199 | ||||||
Accrued interest payable | 146 | 223 | ||||||
Deferred compensation liability | 3,973 | 3,929 | ||||||
Other liabilities | 2,146 | 1,656 | ||||||
Total liabilities | 641,347 | 453,360 | ||||||
Equity: | ||||||||
Retained earnings | 47,288 | 45,652 | ||||||
Accumulated other comprehensive income | 1 | 1,275 | ||||||
Total equity | 47,289 | 46,927 | ||||||
Total liabilities and equity | $ 688,636 | $ 500,287 | ||||||
Asset Quality Data: | ||||||||
Total non-performing loans | 4,073 | 1,707 | ||||||
Non-performing loans to total loans | 0.92% | 0.50% | ||||||
Non-performing assets to total assets | 0.59% | 0.34% | ||||||
Allowance for loan losses to non-performing loans | 99.26% | 169.24% | ||||||
Allowance for loan losses to total loans | 0.91% | 0.85% | ||||||
BSB BANCORP, MHC * CONSOLIDATED STATEMENTS OF OPERATIONS (Dollars in thousands) | |||||||||||||
Three months ended | Nine months ended | ||||||||||||
September 30, | September 30, | ||||||||||||
2011 | 2010 | 2011 | 2010 | ||||||||||
(unaudited) | (unaudited) | ||||||||||||
Interest and dividend income: | |||||||||||||
Interest and fees on loans | $ 4,912 | $ 4,405 | $ 14,079 | $ 13,714 | |||||||||
Interest on debt securities: | |||||||||||||
Taxable | 701 | 716 | 1,862 | 2,267 | |||||||||
Dividends | 5 | 65 | 108 | 208 | |||||||||
Other interest income | 6 | 3 | 16 | 7 | |||||||||
Total interest and dividend income | 5,624 | 5,189 | 16,065 | 16,196 | |||||||||
Interest expense: | |||||||||||||
Interest on deposits | 906 | 951 | 2,762 | 2,942 | |||||||||
Interest on Federal Home Loan Bank advances | 422 | 802 | 1,562 | 2,768 | |||||||||
Interest on securities sold under agreements to repurchase | 3 | 10 | 12 | 27 | |||||||||
Interest on other borrowed funds | 12 | 60 | 69 | 178 | |||||||||
Total interest expense | 1,343 | 1,823 | 4,405 | 5,915 | |||||||||
Net interest and dividend income | 4,281 | 3,366 | 11,660 | 10,281 | |||||||||
Provision (benefit) for loan losses | 320 | (33) | 1,538 | 247 | |||||||||
Net interest and dividend income after provision | |||||||||||||
(benefit) for loan losses | 3,961 | 3,399 | 10,122 | 10,034 | |||||||||
Noninterest income: | |||||||||||||
Customer service fees | 187 | 110 | 437 | 349 | |||||||||
Income from bank-owned life insurance | 115 | 114 | 311 | 353 | |||||||||
Net gain on sales of loans | 91 | 115 | 308 | 203 | |||||||||
Net gain on sales and calls of securities | - | - | 2,788 | - | |||||||||
Net (loss) on trading securities | - | 1,020 | - | 377 | |||||||||
Other income | 45 | 77 | 112 | 140 | |||||||||
Total noninterest income | 438 | 1,436 | 3,956 | 1,422 | |||||||||
Noninterest expense: | |||||||||||||
Salaries and employee benefits | 2,549 | 2,376 | 7,374 | 5,629 | |||||||||
Trustee fees | 68 | 73 | 227 | 231 | |||||||||
Occupancy expense | 188 | 180 | 569 | 526 | |||||||||
Equipment expense | 87 | 57 | 248 | 162 | |||||||||
Deposit insurance | 106 | 140 | 331 | 409 | |||||||||
Data processing | 248 | 125 | 725 | 697 | |||||||||
Professional fees | 182 | 194 | 488 | 451 | |||||||||
Marketing | 215 | 99 | 697 | 274 | |||||||||
Other expense | 347 | 212 | 971 | 628 | |||||||||
Total noninterest expense | 3,990 | 3,456 | 11,630 | 9,007 | |||||||||
Income before income tax expense | 409 | 1,379 | 2,448 | 2,449 | |||||||||
Income tax expense | 114 | 473 | 812 | 800 | |||||||||
Net income | $ 295 | $ 906 | $ 1,636 | $ 1,649 | |||||||||
Performance Ratios: | |||||||||||||
Return on assets | 0.21% | 0.72% | 0.41% | 0.44% | |||||||||
Return on equity | 2.48% | 8.00% | 4.64% | 4.94% | |||||||||
Interest rate spread | 3.00% | 2.71% | 2.91% | 2.77% | |||||||||
Net interest margin | 3.16% | 2.87% | 3.08% | 2.93% | |||||||||
Efficiency ratio | 84.55% | 71.97% | 74.47% | 76.96% | |||||||||
* The financial data presented herein is financial data for BSB Bancorp, MHC. BSB Bancorp, Inc. became the holding company for BSB Bancorp, MHC on October 4, 2011.
SOURCE BSB Bancorp, Inc.
