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| 8-K - FORM 8-K 2016 Q2 EARNINGS RELEASE - BSB Bancorp, Inc. | form8k_72516.htm |
For Immediate Release
Date: July 21, 2016
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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 Second Quarter Results – Year Over Year Earnings Growth of 84%
BELMONT, MA, July 21, 2016 (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 $2.95 million or $0.33 per diluted share for the quarter ended June 30, 2016 compared to net income of $1.60 million or $0.18 per diluted share for the quarter ended June 30, 2015 or an increase in net income of 84.2%. This is the Bank’s 12th consecutive quarter of earnings growth. For the six months ended June 30, 2016, the Company reported net income of $5.49 million, or $0.61 per diluted share, as compared to net income of $2.98 million, or $0.34 per diluted share, for the six months ended June 30, 2015 or an increase in net income of 84.4%.
Robert M. Mahoney, President and Chief Executive Officer, said, "Asset growth and good expense control more than offset continued margin pressure. We have had 12 consecutive quarters of earnings growth and we are working hard to continue that trend. 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, 2016 was $11.71 million as compared to $9.03 million for the quarter ended June 30, 2015 or a 29.7% increase. The provision for loan losses for the quarter ended June 30, 2016 was $741,000 as compared to $365,000 for the quarter ended June 30, 2015 or a 103.0% increase. This resulted in an increase of $2.30 million or 26.6% in net interest and dividend income after provision for loan losses for the quarter ended June 30, 2016 as compared to the quarter ended June 30, 2015. Net interest and dividend income before provision for loan losses for the six months ended June 30, 2016 was $22.99 million as compared to $17.79 million for the six months ended June 30, 2015 or a 29.3% increase. The provision for loan losses for the six months ended June 30, 2016 was $1.34 million as compared to $704,000 for the six months ended June 30, 2015 or a 90.3% increase. This resulted in an increase of $4.57 million or 26.7% in net interest and dividend income after provision for loan losses for the six months ended June 30, 2016 as compared to the six months ended June 30, 2015.
NONINTEREST INCOME
Noninterest income for the quarter ended June 30, 2016 was $705,000 as compared to $948,000 for the quarter ended June 30, 2015 or a decrease of 25.6%. Noninterest income for the six months ended June 30, 2016 was $1.37 million as compared to $1.70 million for the six months ended June 30, 2015 or a decrease of 19.8%. These decreases were primarily driven by a decrease in net gains on sales of loans, a decline in auto loan servicing and other auto related fee income. Partially offsetting these decreases was an increase in income from bank owned life insurance due to $5.00 million of additional policies purchased at the end of the second quarter of 2015 as well as $5.00 million purchased during the second quarter of 2016.
NONINTEREST EXPENSE
Noninterest expense for the quarter ended June 30, 2016 was $6.98 million as compared to $6.99 million for the quarter ended June 30, 2015 or a decrease of 0.1%. Our efficiency ratio improved to 56.3% during the quarter ended June 30, 2016 from 70.1% during the quarter ended June 30, 2015 as we continue to grow the balance sheet and manage costs. Noninterest expense for the six months ended June 30, 2016 was $14.24 million as compared to $13.92 million for the six months ended June 30, 2015 or an increase of 2.3%. Our efficiency ratio improved to 58.5% during the six months ended June 30, 2016 from 71.4% during the six months ended June 30, 2015. Effectively managing headcount has contributed to our improvement to our efficiency ratio. Since going public in the fourth quarter of 2011, we’ve grown total assets from $669 million to $1.98 billion, or an increase of 196%, while only increasing full time equivalent employee headcount by 19 or 19.8% from 96 to 115.
BALANCE SHEET
At June 30, 2016, total assets were $1.98 billion, an increase of $166.18 million or 9.2% from $1.81 billion at December 31, 2015. The Company experienced net loan growth of $154.34 million or 10.1% from December 31, 2015. Residential 1-4 family real estate loans, commercial real estate loans, home equity lines of credit and commercial loans increased by $124.18 million, $34.94 million, $10.32 million and $7.06 million, respectively. Partially offsetting these increases was a decrease in indirect auto loans of $23.31 million, driven by the suspension of new originations due to current market conditions. The asset growth was primarily funded by growth in deposits and federal home loan bank advances.
At June 30, 2016, deposits totaled $1.38 billion, an increase of $115.11 million or 9.1% from $1.27 billion at December 31, 2015. Core deposits, which we consider to include all deposits other than CD’s and brokered CD’s, increased by $63.93 million from $1.01 billion at December 31, 2015 to $1.08 billion at June 30, 2016. Hal R. Tovin, Executive Vice President and Chief Operating Officer, said, “Deposit growth momentum continued in the second quarter. This strong performance was driven by the success of our ongoing targeted focus on key business segments such as municipalities and the legal profession. In addition, the effective cross selling of our expanding commercial real estate customer base continued to contribute to these results.”
Total stockholders’ equity increased by $6.84 million from $146.20 million as of December 31, 2015 to $153.04 million as of June 30, 2016. This increase is primarily the result of earnings of $5.49 million and a $1.10 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, 2016 was $12.54 million and 0.74%, respectively, as compared to $11.24 million and 0.73%, respectively, as of December 31, 2015. For the six months ended June 30, 2016, the Company recorded net charge offs of $37,000, as compared to net charge offs of $47,000 for the six months ending June 30, 2015. Total non-performing assets were $1.20 million, or 0.06% of total assets, as of June 30, 2016, as compared to $3.64 million or 0.20% of total assets as of December 31, 2015.
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 are 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 |
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June 30, 2016
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December 31, 2015
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(unaudited)
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ASSETS
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Cash and due from banks
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$ | 1,603 | $ | 1,871 | ||||
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Interest-bearing deposits in other banks
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52,240 | 49,390 | ||||||
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Cash and cash equivalents
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53,843 | 51,261 | ||||||
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Interest-bearing time deposits with other banks
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134 | 131 | ||||||
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Investments in available-for-sale securities
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22,122 | 21,876 | ||||||
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Investments in held-to-maturity securities (fair value of $139,496 as of
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June 30, 2016 and $136,728 as of December 31, 2015)
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137,341 | 137,119 | ||||||
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Federal Home Loan Bank stock, at cost
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21,824 | 18,309 | ||||||
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Loans held for sale
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- | 1,245 | ||||||
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Loans, net of allowance for loan losses of $12,543 as of
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June 30, 2016 and $11,240 as of December 31, 2015
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1,689,295 | 1,534,957 | ||||||
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Premises and equipment, net
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2,561 | 2,657 | ||||||
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Accrued interest receivable
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4,351 | 3,781 | ||||||
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Deferred tax asset, net
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7,336 | 6,726 | ||||||
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Income taxes receivable
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692 | - | ||||||
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Bank-owned life insurance
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35,261 | 29,787 | ||||||
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Other assets
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4,337 | 5,067 | ||||||
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Total assets
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$ | 1,979,097 | $ | 1,812,916 | ||||
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LIABILITIES AND STOCKHOLDERS' EQUITY
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Deposits:
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Noninterest-bearing
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$ | 185,149 | $ | 192,476 | ||||
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Interest-bearing
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1,199,476 | 1,077,043 | ||||||
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Total deposits
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1,384,625 | 1,269,519 | ||||||
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Federal Home Loan Bank advances
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423,250 | 374,000 | ||||||
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Securities sold under agreements to repurchase
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1,771 | 3,695 | ||||||
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Other borrowed funds
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- | 1,020 | ||||||
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Accrued interest payable
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1,016 | 993 | ||||||
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Deferred compensation liability
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6,901 | 6,434 | ||||||
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Income taxes payable
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- | 184 | ||||||
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Other liabilities
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8,496 | 10,868 | ||||||
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Total liabilities
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1,826,059 | 1,666,713 | ||||||
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Stockholders' Equity:
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Common stock; $0.01 par value, 100,000,000 shares authorized; 9,100,815 and 9,086,639
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shares issued and outstanding at June 30, 2016 and December 31, 2015, respectively
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91 | 91 | ||||||
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Additional paid-in capital
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90,745 | 89,648 | ||||||
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Retained earnings
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66,008 | 60,517 | ||||||
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Accumulated other comprehensive income (loss)
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54 | (116 | ) | |||||
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Unearned compensation - ESOP
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(3,860 | ) | (3,937 | ) | ||||
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Total stockholders' equity
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153,038 | 146,203 | ||||||
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Total liabilities and stockholders' equity
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$ | 1,979,097 | $ | 1,812,916 | ||||
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Asset Quality Data:
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Total non-performing assets
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$ | 1,196 | $ | 3,639 | ||||
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Total non-performing loans
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$ | 1,146 | $ | 3,631 | ||||
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Non-performing loans to total loans
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0.07 | % | 0.24 | % | ||||
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Non-performing assets to total assets
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0.06 | % | 0.20 | % | ||||
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Allowance for loan losses to non-performing loans
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1094.50 | % | 309.56 | % | ||||
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Allowance for loan losses to total loans
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0.74 | % | 0.73 | % | ||||
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Share Data:
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Outstanding common shares
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9,100,815 | 9,086,639 | ||||||
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Book value per share
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$ | 16.82 | $ | 16.09 | ||||
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Consolidated Capital Ratios:
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Common Equity Tier 1 Risk-Based Capital Ratio
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10.98 | % | 11.34 | % | ||||
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Tier 1 Risk-Based Capital Ratio
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10.98 | % | 11.34 | % | ||||
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Total Risk-Based Capital Ratio
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11.88 | % | 12.22 | % | ||||
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Leverage Ratio
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7.96 | % | 8.37 | % | ||||
| BSB BANCORP, INC. AND SUBSIDIARIES |
| CONSOLIDATED BALANCE SHEETS |
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Three months ended
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Six months ended
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June 30,
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June 30,
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2016
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2015
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2016
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2015
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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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$ | 14,138 | $ | 10,679 | $ | 27,550 | $ | 20,911 | ||||||||
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Interest on taxable debt securities
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801 | 738 | 1,629 | 1,479 | ||||||||||||
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Dividends
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186 | 64 | 341 | 122 | ||||||||||||
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Other interest income
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39 | 22 | 84 | 44 | ||||||||||||
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Total interest and dividend income
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15,164 | 11,503 | 29,604 | 22,556 | ||||||||||||
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Interest expense:
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Interest on deposits
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2,348 | 1,941 | 4,472 | 3,696 | ||||||||||||
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Interest on Federal Home Loan Bank advances
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1,108 | 527 | 2,135 | 1,058 | ||||||||||||
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Interest on securities sold under agreements to repurchase
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1 | 1 | 2 | 1 | ||||||||||||
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Interest on other borrowed funds
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- | 7 | 5 | 14 | ||||||||||||
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Total interest expense
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3,457 | 2,476 | 6,614 | 4,769 | ||||||||||||
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Net interest and dividend income
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11,707 | 9,027 | 22,990 | 17,787 | ||||||||||||
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Provision for loan losses
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741 | 365 | 1,340 | 704 | ||||||||||||
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Net interest and dividend income after provision
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for loan losses
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10,966 | 8,662 | 21,650 | 17,083 | ||||||||||||
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Noninterest income:
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Customer service fees
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224 | 204 | 450 | 415 | ||||||||||||
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Income from bank-owned life insurance
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237 | 202 | 470 | 389 | ||||||||||||
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Net gain on sales of loans
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106 | 293 | 167 | 332 | ||||||||||||
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Loan servicing fee income
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92 | 143 | 205 | 304 | ||||||||||||
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Other income
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46 | 106 | 75 | 264 | ||||||||||||
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Total noninterest income
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705 | 948 | 1,367 | 1,704 | ||||||||||||
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Noninterest expense:
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Salaries and employee benefits
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4,359 | 4,377 | 8,959 | 8,721 | ||||||||||||
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Director compensation
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247 | 215 | 481 | 492 | ||||||||||||
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Occupancy expense
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240 | 264 | 492 | 557 | ||||||||||||
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Equipment expense
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109 | 140 | 214 | 284 | ||||||||||||
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Deposit insurance
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287 | 232 | 567 | 450 | ||||||||||||
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Data processing
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879 | 772 | 1,761 | 1,527 | ||||||||||||
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Professional fees
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187 | 177 | 422 | 389 | ||||||||||||
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Marketing
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208 | 266 | 429 | 519 | ||||||||||||
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Other expense
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468 | 545 | 915 | 985 | ||||||||||||
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Total noninterest expense
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6,984 | 6,988 | 14,240 | 13,924 | ||||||||||||
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Income before income tax expense
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4,687 | 2,622 | 8,777 | 4,863 | ||||||||||||
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Income tax expense
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1,735 | 1,019 | 3,286 | 1,886 | ||||||||||||
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Net income
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$ | 2,952 | $ | 1,603 | $ | 5,491 | $ | 2,977 | ||||||||
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Earnings per share
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Basic
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$ | 0.34 | $ | 0.19 | $ | 0.63 | $ | 0.34 | ||||||||
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Diluted
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$ | 0.33 | $ | 0.18 | $ | 0.61 | $ | 0.34 | ||||||||
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Return on average assets
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0.62 | % | 0.43 | % | 0.59 | % | 0.41 | % | ||||||||
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Return on average equity
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7.81 | % | 4.57 | % | 7.35 | % | 4.30 | % | ||||||||
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Interest rate spread
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2.35 | % | 2.31 | % | 2.37 | % | 2.33 | % | ||||||||
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Net interest margin
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2.49 | % | 2.47 | % | 2.51 | % | 2.50 | % | ||||||||
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Efficiency ratio
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56.27 | % | 70.06 | % | 58.46 | % | 71.44 | % | ||||||||