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| 8-K - FORM 8-K BSB BANCORP 10-24-13 - BSB Bancorp, Inc. | form8k-bsbbancorp_102413.htm |
For Immediate Release
Date: October 24, 2013
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Contact:
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Robert M. Mahoney
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President and Chief Executive Officer
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Phone:
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617-484-6700
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Email:
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robert.mahoney@belmontsavings.com
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BSB Bancorp, Inc. Reports Third Quarter Results – Crosses $1 Billion in Assets
BELMONT, MA, October 24, 2013 (PR Newswire) - 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 $538,000, or $0.06 per basic and diluted share, for the quarter ended September 30, 2013, compared to net income of $183,000, or $0.02 per basic and diluted share in the third quarter of 2012. For the nine months ended September 30, 2013, the Company reported net income of $1.3 million, or $0.15 per basic and diluted share, as compared to net income of $916,000, or $0.11 per basic and diluted share for the same period in 2012.
Robert M. Mahoney, President and Chief Executive Officer, said, "During the third quarter we experienced continued growth in loans, core deposits and earnings. The market is quite receptive to knowledgeable, customer centric community bankers. Credit quality is good, as our local economy continues to improve and we are very proud to have crossed the $1 billion asset mark."
NET INTEREST AND DIVIDEND INCOME
Net interest and dividend income before provision for loan losses for the quarter ended September 30, 2013 was $6.8 million as compared to $5.6 million for the quarter ended September 30, 2012, a 19.9% increase. The provision for loan losses for the quarter ended September 30, 2013 was $438,000 as compared to a provision for loan losses of $734,000 for the quarter ended September 30, 2012, a 40.3% decrease. This resulted in a $1.4 million or 28.9% increase in net interest and dividend income after provision for loan losses for the quarter ended September 30, 2013 as compared to the quarter ended September 30, 2012. Net interest and dividend income before provision for loan losses for the nine months ended September 30, 2013 was $18.5 million as compared to $15.8 million for the nine months ended September 30, 2012, a 16.6% increase. The provision for loan losses for the nine months ended September 30, 2013 was $865,000, as compared to $2.0 million for the nine months ended September 30, 2012, a 57.6% decrease. This resulted in a $3.8 million or 27.5% increase in net interest and dividend income after provision for loan losses period over period.
NONINTEREST INCOME
Noninterest income for the quarter ended September 30, 2013 was $890,000 as compared to $679,000 for the quarter ended September 30, 2012, an increase of $211,000, or 31.1%. This increase was primarily driven by an increase in loan servicing fee income of $55,000 and an increase in other income of $134,000. The increase in other income was primarily driven by an increase in vendor loss experience refunds of $75,000. For the nine months ended September 30, 2013, non-interest income was $2.8 million as compared to $3.1 million for the nine months ended September 30, 2012. This decrease of $327,000, or 10.4%, was primarily driven by a decrease in gains on sales of loans of $538,000, partially offset by an increase in loan servicing fee income of $159,000 and an increase in customer service fees of $97,000.
NONINTEREST EXPENSE
Noninterest expense for the quarter ended September 30, 2013 was $6.4 million as compared to $5.3 million for the quarter ended September 30, 2012. This increase of $1.0 million, or 19.2%, was largely driven by an increase in salaries and employee benefits of $592,000, which increased $309,000 as a result of the 2012 Equity Incentive Plan that was adopted in the fourth quarter of 2012. Data processing expenses increased by $186,000 quarter over quarter, driven largely by increases in core and online banking costs as our customer base and transaction volume continue to see growth. Director compensation increased $144,000 primarily driven by an increase of $123,000 related to the 2012 Equity Incentive Plan. Noninterest expense for the nine months ended September 30, 2013 was $18.3 million as compared to $15.6 million for the nine months ended September 30, 2012. This increase of $2.7 million, or 17.5% was primarily driven by increases in salaries and employee benefits and director compensation of $1.5 million and $337,000, respectively, both of which had increased primarily as a result of the 2012 Equity Incentive Plan that was adopted in the fourth quarter of 2012. Data processing expenses also increased by $550,000, driven largely by increases in core and online banking costs.
BALANCE SHEET
At September 30, 2013, total assets were $1.0 billion, an increase of $185.0 million or 22.1% from December 31, 2012. Investments in held-to-maturity securities have increased by $57.4 million or 89.8% from December 31, 2012. The Company also experienced net loan growth, excluding loans held for sale, of $141.2 million, or 21.6%, from December 31, 2012. Commercial real estate, residential mortgage, home equity, and indirect auto loans increased by $44.2 million, $70.5 million, $13.3 million and $12.0 million, respectively. The asset growth was funded by deposits and borrowings from the Federal Home Loan Bank.
At September 30, 2013, deposits totaled $727.0 million, an increase of $119.1 million or 19.6% from December 31, 2012. Core deposits, which we consider to include all deposits other than CD’s and brokered CD’s, increased by $113.3 million from December 31, 2012. Hal R. Tovin, Executive Vice President and Chief Operating Officer, said, “Deposit growth continued this quarter as our two new InStore branches in Cambridge and Newton were opened in June and August. In addition, the growing deposit relationships of new and existing commercial and small business customers, along with the momentum of our municipal banking program, contributed to this consistent, strong performance.”
Total stockholders’ equity decreased by $4.2 million from $133.3 million as of December 31, 2012 to $129.1 million as of September 30, 2013. This decrease is primarily the result of the Stock Repurchase Program that was adopted on December 12, 2012. During the nine months ended September 30, 2013, the Company purchased 476,622 shares of its common stock for $6.5 million and completed the Stock Repurchase Program. This was partially offset by earnings of $1.3 million.
ASSET QUALITY
The allowance for loan losses in total and as a percentage of total loans as of September 30, 2013 equaled $7.3 million and 0.92%, respectively, as compared to $6.4 million and 0.98%, respectively, as of December 31, 2012. Total non-performing assets were $2.6 million, or 0.25% of total assets, as of September 30, 2013, as compared to $4.3 million, or 0.52% of total assets, as of December 31, 2012.
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 seven 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, 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)
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September 30, 2013
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December 31, 2012
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(unaudited)
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ASSETS
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Cash and due from banks
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$ | 1,946 | $ | 1,433 | ||||
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Interest-bearing deposits in other banks
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46,870 | 51,279 | ||||||
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Cash and cash equivalents
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48,816 | 52,712 | ||||||
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Interest-bearing time deposits with other banks
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119 | 119 | ||||||
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Investments in available-for-sale securities
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21,804 | 22,621 | ||||||
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Investments in held-to-maturity securities, at cost
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121,426 | 63,984 | ||||||
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Federal Home Loan Bank stock, at cost
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7,650 | 7,627 | ||||||
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Loans held-for-sale
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- | 11,205 | ||||||
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Loans, net of allowance for loan losses of $7,325 as of
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9/30/2013 (unaudited) and $6,440 as of 12/31/2012
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795,467 | 654,295 | ||||||
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Premises and equipment, net
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3,301 | 2,902 | ||||||
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Accrued interest receivable
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2,176 | 2,217 | ||||||
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Deferred tax asset, net
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4,951 | 4,025 | ||||||
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Income taxes receivable
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- | 806 | ||||||
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Bank-owned life insurance
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13,203 | 12,884 | ||||||
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Other real estate owned
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- | 661 | ||||||
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Other assets
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4,118 | 2,024 | ||||||
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Total assets
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$ | 1,023,031 | $ | 838,082 | ||||
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LIABILITIES AND STOCKHOLDERS' EQUITY
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Deposits:
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Noninterest-bearing
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$ | 134,145 | $ | 126,760 | ||||
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Interest-bearing
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592,857 | 481,105 | ||||||
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Total deposits
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727,002 | 607,865 | ||||||
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Federal Home Loan Bank advances
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150,600 | 83,100 | ||||||
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Securities sold under agreements to repurchase
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2,552 | 3,404 | ||||||
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Other borrowed funds
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1,124 | 1,156 | ||||||
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Accrued interest payable
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625 | 455 | ||||||
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Deferred compensation liability
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5,096 | 4,685 | ||||||
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Income taxes payable
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261 | - | ||||||
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Other liabilities
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6,622 | 4,109 | ||||||
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Total liabilities
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893,882 | 704,774 | ||||||
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Stockholders' Equity:
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Common stock
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91 | 95 | ||||||
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Additional paid-in capital
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84,987 | 90,188 | ||||||
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Retained earnings
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48,667 | 47,352 | ||||||
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Accumulated other comprehensive (loss) income
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(314 | ) | 68 | |||||
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Unearned compensation - ESOP
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(4,282 | ) | (4,395 | ) | ||||
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Total stockholders' equity
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129,149 | 133,308 | ||||||
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Total liabilities and stockholders' equity
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$ | 1,023,031 | $ | 838,082 | ||||
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Asset Quality Data:
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Total non-performing assets
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2,590 | 4,325 | ||||||
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Total non-performing loans
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2,590 | 3,621 | ||||||
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Non-performing loans to total loans
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0.32 | % | 0.55 | % | ||||
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Non-performing assets to total assets
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0.25 | % | 0.52 | % | ||||
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Allowance for loan losses to non-performing loans
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282.81 | % | 177.86 | % | ||||
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Allowance for loan losses to total loans
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0.92 | % | 0.98 | % | ||||
BSB BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per share data)
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Three months ended
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Nine months ended
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September 30,
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September 30,
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2013
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2012
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2013
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2012
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(unaudited)
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(unaudited)
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Interest and dividend income:
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Interest and fees on loans
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$ | 7,283 | $ | 6,364 | $ | 20,465 | $ | 18,032 | ||||||||
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Interest on taxable debt securities
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684 | 559 | 1,589 | 1,540 | ||||||||||||
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Dividends
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7 | 10 | 21 | 38 | ||||||||||||
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Other interest income
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21 | 18 | 61 | 72 | ||||||||||||
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Total interest and dividend income
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7,995 | 6,951 | 22,136 | 19,682 | ||||||||||||
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Interest expense:
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Interest on deposits
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1,041 | 1,080 | 3,112 | 3,049 | ||||||||||||
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Interest on Federal Home Loan Bank advances
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173 | 211 | 531 | 753 | ||||||||||||
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Interest on securities sold under agreements to repurchase
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1 | 1 | 4 | 7 | ||||||||||||
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Interest on other borrowed funds
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8 | 11 | 25 | 32 | ||||||||||||
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Total interest expense
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1,223 | 1,303 | 3,672 | 3,841 | ||||||||||||
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Net interest and dividend income
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6,772 | 5,648 | 18,464 | 15,841 | ||||||||||||
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Provision for loan losses
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438 | 734 | 865 | 2,040 | ||||||||||||
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Net interest and dividend income after provision
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for loan losses
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6,334 | 4,914 | 17,599 | 13,801 | ||||||||||||
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Noninterest income:
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Customer service fees
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252 | 216 | 710 | 613 | ||||||||||||
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Income from bank-owned life insurance
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114 | 105 | 313 | 316 | ||||||||||||
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Net gain on sales of loans
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168 | 191 | 968 | 1,506 | ||||||||||||
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Net gain on sales and calls of securities
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- | - | 34 | - | ||||||||||||
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Loan servicing fee income
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192 | 137 | 489 | 330 | ||||||||||||
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Other income
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164 | 30 | 290 | 366 | ||||||||||||
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Total noninterest income
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890 | 679 | 2,804 | 3,131 | ||||||||||||
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Noninterest expense:
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Salaries and employee benefits
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3,871 | 3,279 | 11,122 | 9,595 | ||||||||||||
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Director compensation
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257 | 113 | 693 | 356 | ||||||||||||
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Occupancy expense
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238 | 207 | 685 | 586 | ||||||||||||
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Equipment expense
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156 | 110 | 454 | 319 | ||||||||||||
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Deposit insurance
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156 | 114 | 430 | 367 | ||||||||||||
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Data processing
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717 | 531 | 2,039 | 1,489 | ||||||||||||
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Professional fees
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216 | 200 | 622 | 731 | ||||||||||||
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Marketing
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214 | 265 | 662 | 743 | ||||||||||||
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Other expense
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548 | 528 | 1,626 | 1,421 | ||||||||||||
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Total noninterest expense
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6,373 | 5,347 | 18,333 | 15,607 | ||||||||||||
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Income before income tax expense
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851 | 246 | 2,070 | 1,325 | ||||||||||||
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Income tax expense
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313 | 63 | 755 | 409 | ||||||||||||
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Net income
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$ | 538 | $ | 183 | $ | 1,315 | $ | 916 | ||||||||
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Earnings per share
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Basic
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$ | 0.06 | $ | 0.02 | $ | 0.15 | $ | 0.11 | ||||||||
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Diluted
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$ | 0.06 | $ | 0.02 | $ | 0.15 | $ | 0.11 | ||||||||
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Return on average assets
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0.22 | % | 0.09 | % | 0.20 | % | 0.17 | % | ||||||||
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Return on average equity
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1.67 | % | 0.55 | % | 1.35 | % | 0.93 | % | ||||||||
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Interest rate spread
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2.70 | % | 2.72 | % | 2.64 | % | 2.70 | % | ||||||||
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Net interest margin
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2.89 | % | 3.00 | % | 2.87 | % | 2.98 | % | ||||||||
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Efficiency ratio
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83.18 | % | 84.51 | % | 86.20 | % | 82.26 | % | ||||||||