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 June30, 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 December31, 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 June30, 2014, deposits totaled $891.9million, an increase of $127.1million or 16.6% from $764.8 million at December31, 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 $8.6million and 0.87%, respectively, as compared to $8.0million and 0.95%, respectively, as of December31, 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 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, 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.
