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| 8-K - FORM8K BSB Q4 EARNINGS 020917 - BSB Bancorp, Inc. | form8k_bsb-q4earnings020917.htm |
Exhibit 99.1
For Immediate Release
Date: February 9, 2017
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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 Fourth Quarter Results – Year Over Year Earnings Growth of 73%
BELMONT, MA, February 9, 2017 (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 $3.31 million or $0.37 per diluted share for the quarter ended December 31, 2016 compared to net income of $2.07 million or $0.23 per diluted share for the quarter ended December 31, 2015 or an increase in net income of 60.0%. This is the Bank’s 14th consecutive quarter of earnings growth. For the twelve months ended December 31, 2016, the Company reported net income of $11.98 million or $1.33 per diluted share as compared to net income of $6.91 million or $0.78 per diluted share for the twelve months ended December 31, 2015 or an increase in net income of 73.3%.
Robert M. Mahoney, President and Chief Executive Officer, said, "We had a strong finish in 2016. Revenue growth was fueled by increased loan demand funded by impressive core deposit gains. Solid expense control and excellent credit quality also contributed to our 14th consecutive quarter of net income growth.”
NET INTEREST AND DIVIDEND INCOME
Net interest and dividend income before provision for loan losses for the quarter ended December 31, 2016 was $12.37 million as compared to $10.63 million for the quarter ended December 31, 2015 or a 16.4% increase. The provision for loan losses for the quarter ended December 31, 2016 was $601,000 as compared to $886,000 for the quarter ended December 31, 2015 or a 32.2% decrease. This resulted in an increase of $2.03 million or 20.8% in net interest and dividend income after provision for loan losses for the quarter ended December 31, 2016 as compared to the quarter ended December 31, 2015. Net interest and dividend income before provision for loan losses for the twelve months ended December 31, 2016 was $47.39 million as compared to $38.21 million for the twelve months ended December 31, 2015 or a 24.0% increase. The provision for loan losses for the twelve months ended December 31, 2016 was $2.39 million as compared to $2.32 million for the twelve months ended December 31, 2015 or a 2.9% increase. This resulted in an increase of $9.11 million or 25.4% in net interest and dividend income after provision for loan losses for the twelve months ended December 31, 2016 as compared to the twelve months ended December 31, 2015.
NONINTEREST INCOME
Noninterest income for the quarter ended December 31, 2016 was $703,000 as compared to $768,000 for the quarter ended December 31, 2015 or a decrease of 8.5%. Noninterest income for the twelve months ended December 31, 2016 was $2.75 million as compared to $3.17 million for the twelve months ended December 31, 2015 or a decrease of 13.1%. This decrease was primarily driven by a decrease in auto loan servicing fees and other auto loan related income driven by the suspension of new originations due to current market conditions.
NONINTEREST EXPENSE
Noninterest expense for the quarter ended December 31, 2016 was $7.05 million as compared to $7.17 million for the quarter ended December 31, 2015 or a decrease of 1.8%. Our efficiency ratio improved to 53.9% for the quarter ended December 31, 2016 from 62.9% for the quarter ended December 31, 2015 as we continue to grow the balance sheet and manage costs. Noninterest expense for the twelve months ended December 31, 2016 was $28.35 million as compared to $27.82 million for the twelve months ended December 31, 2015 or an increase of 1.9%. Our efficiency ratio improved to 56.5% for the twelve months ended December 31, 2016 from 67.3% for the twelve months ended December 31, 2015. Effectively managing headcount has contributed to improvement in our efficiency ratio. Since going public in the fourth quarter of 2011, we’ve grown total assets from $669 million to $2.16 billion, or an increase of 223%, while only increasing full time equivalent employee headcount by 26 from 96 to 122 or 27.1%.
BALANCE SHEET
At December 31, 2016, total assets were $2.16 billion, an increase of $345.79 million or 19.1% from $1.81 billion at December 31, 2015. The Company experienced net loan growth of $331.08 million or 21.6% from December 31, 2015 to December 31, 2016. Residential 1-4 family real estate loans, commercial real estate loans, construction loans, commercial loans and home equity lines of credit increased by $287.91 million, $42.45 million, $28.28 million, $10.21 million and $7.42 million, respectively. Partially offsetting these increases was a decrease in indirect auto loans of $43.73 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 December 31, 2016, deposits totaled $1.47 billion or an increase of $199.90 million or 15.7% 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 $122.74 million from $1.01 billion at December 31, 2015 to $1.13 billion at December 31, 2016. Hal R. Tovin, Executive Vice President and Chief Operating Officer, said “2016 has been a year of consistent deposit growth from multiple sources. Our targeted business banking segment strategy (municipalities, lawyers, property managers, non-profits) was enhanced with an additional focus on colleges and universities. In addition, our retail and commercial real estate relationships contributed to this deposit performance with strong growth in Q4.”
Total stockholders’ equity increased by $14.72 million from $146.20 million as of December 31, 2015 to $160.92 million as of December 31, 2016. This increase is primarily the result of earnings of $11.98 million and a $2.37 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 December 31, 2016 was $13.59 million and 0.73%, respectively, as compared to $11.24 million and 0.73%, respectively, as of December 31, 2015. For the twelve months ended December 31, 2016, the Company recorded net charge offs of $40,000, as compared to net recoveries of $42,000 for the twelve months ended December 31, 2015. Total non-performing assets were $1.82 million or 0.08% of total assets as of December 31, 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
(Dollars in thousands, except share and per share data)
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December 31, 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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$ | 2,211 | $ | 1,871 | ||||
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Interest-bearing deposits in other banks
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56,665 | 49,390 | ||||||
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Cash and cash equivalents
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58,876 | 51,261 | ||||||
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Interest-bearing time deposits with other banks
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234 | 131 | ||||||
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Investments in available-for-sale securities
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22,048 | 21,876 | ||||||
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Investments in held-to-maturity securities (fair value of $129,465 as of
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December 31, 2016 and $136,728 as of December 31, 2015)
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130,197 | 137,119 | ||||||
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Federal Home Loan Bank stock, at cost
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25,071 | 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 $13,585 as of
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December 31, 2016 and $11,240 as of December 31, 2015
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1,866,035 | 1,534,957 | ||||||
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Premises and equipment, net
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2,355 | 2,657 | ||||||
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Accrued interest receivable
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4,635 | 3,781 | ||||||
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Deferred tax asset, net
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8,321 | 6,726 | ||||||
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Income taxes receivable
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423 | - | ||||||
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Bank-owned life insurance
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35,842 | 29,787 | ||||||
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Other assets
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4,667 | 5,067 | ||||||
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Total assets
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$ | 2,158,704 | $ | 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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$ | 208,082 | $ | 192,476 | ||||
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Interest-bearing
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1,261,340 | 1,077,043 | ||||||
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Total deposits
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1,469,422 | 1,269,519 | ||||||
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Federal Home Loan Bank advances
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508,850 | 374,000 | ||||||
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Securities sold under agreements to repurchase
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1,985 | 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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1,023 | 993 | ||||||
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Deferred compensation liability
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7,043 | 6,434 | ||||||
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Income taxes payable
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- | 184 | ||||||
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Other liabilities
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9,460 | 10,868 | ||||||
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Total liabilities
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1,997,783 | 1,666,713 | ||||||
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Stockholders' Equity:
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Common stock; $0.01 par value per share, 100,000,000 shares authorized; 9,110,077 and 9,086,639
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shares issued and outstanding at December 31, 2016 and December 31, 2015, respectively
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91 | 91 | ||||||
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Additional paid-in capital
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92,013 | 89,648 | ||||||
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Retained earnings
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72,498 | 60,517 | ||||||
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Accumulated other comprehensive income (loss)
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103 | (116 | ) | |||||
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Unearned compensation - ESOP
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(3,784 | ) | (3,937 | ) | ||||
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Total stockholders' equity
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160,921 | 146,203 | ||||||
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Total liabilities and stockholders' equity
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$ | 2,158,704 | $ | 1,812,916 | ||||
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Asset Quality Data:
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Total non-performing assets
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$ | 1,822 | $ | 3,639 | ||||
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Total non-performing loans
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$ | 1,819 | $ | 3,631 | ||||
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Non-performing loans to total loans
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0.10 | % | 0.24 | % | ||||
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Non-performing assets to total assets
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0.08 | % | 0.20 | % | ||||
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Allowance for loan losses to non-performing loans
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746.84 | % | 309.56 | % | ||||
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Allowance for loan losses to total loans
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0.73 | % | 0.73 | % | ||||
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Share Data:
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Outstanding common shares
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9,110,077 | 9,086,639 | ||||||
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Book value per share
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$ | 17.66 | $ | 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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10.80 | % | 11.34 | % | ||||
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Tier 1 Risk-Based Capital Ratio
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10.80 | % | 11.34 | % | ||||
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Total Risk-Based Capital Ratio
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11.71 | % | 12.22 | % | ||||
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Leverage Ratio
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7.64 | % | 8.37 | % | ||||
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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Twelve months ended
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December 31,
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December 31,
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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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$ | 15,268 | $ | 12,522 | $ | 57,513 | $ | 44,890 | ||||||||
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Interest on taxable debt securities
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749 | 821 | 3,163 | 3,064 | ||||||||||||
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Dividends
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225 | 128 | 760 | 373 | ||||||||||||
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Other interest income
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49 | 21 | 185 | 79 | ||||||||||||
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Total interest and dividend income
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16,291 | 13,492 | 61,621 | 48,406 | ||||||||||||
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Interest expense:
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Interest on deposits
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2,535 | 2,083 | 9,434 | 7,768 | ||||||||||||
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Interest on Federal Home Loan Bank advances
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1,382 | 770 | 4,788 | 2,394 | ||||||||||||
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Interest on securities sold under agreements to repurchase
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1 | 1 | 4 | 4 | ||||||||||||
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Interest on other borrowed funds
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- | 7 | 5 | 28 | ||||||||||||
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Total interest expense
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3,918 | 2,861 | 14,231 | 10,194 | ||||||||||||
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Net interest and dividend income
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12,373 | 10,631 | 47,390 | 38,212 | ||||||||||||
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Provision for loan losses
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601 | 886 | 2,385 | 2,317 | ||||||||||||
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Net interest and dividend income after provision
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for loan losses
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11,772 | 9,745 | 45,005 | 35,895 | ||||||||||||
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Noninterest income:
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Customer service fees
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211 | 226 | 903 | 894 | ||||||||||||
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Income from bank-owned life insurance
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288 | 257 | 1,050 | 893 | ||||||||||||
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Net gain on sales of loans
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80 | 16 | 271 | 395 | ||||||||||||
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Loan servicing fee income
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97 | 151 | 350 | 614 | ||||||||||||
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Other income
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27 | 118 | 369 | |||||||||||||
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Total noninterest income
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703 | 768 | 2,750 | 3,165 | ||||||||||||
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Noninterest expense:
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Salaries and employee benefits
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4,415 | 4,532 | 17,819 | 17,610 | ||||||||||||
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Director compensation
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185 | 269 | 971 | 912 | ||||||||||||
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Occupancy expense
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249 | 255 | 991 | 1,074 | ||||||||||||
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Equipment expense
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126 | 111 | 452 | 533 | ||||||||||||
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Deposit insurance
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396 | 283 | 1,285 | 969 | ||||||||||||
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Data processing
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680 | 792 | 3,120 | 3,108 | ||||||||||||
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Professional fees
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283 | 205 | 964 | 749 | ||||||||||||
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Marketing
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224 | 217 | 872 | 926 | ||||||||||||
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Other expense
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487 | 510 | 1,875 | 1,943 | ||||||||||||
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Total noninterest expense
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7,045 | 7,174 | 28,349 | 27,824 | ||||||||||||
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Income before income tax expense
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5,430 | 3,339 | 19,406 | 11,236 | ||||||||||||
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Income tax expense
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2,120 | 1,270 | 7,425 | 4,322 | ||||||||||||
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Net income
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$ | 3,310 | $ | 2,069 | $ | 11,981 | $ | 6,914 | ||||||||
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Earnings per share
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Basic
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$ | 0.38 | $ | 0.24 | $ | 1.38 | $ | 0.80 | ||||||||
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Diluted
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$ | 0.37 | $ | 0.23 | $ | 1.33 | $ | 0.78 | ||||||||
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Return on average assets
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0.63 | % | 0.47 | % | 0.61 | % | 0.44 | % | ||||||||
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Return on average equity
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8.28 | % | 5.64 | % | 7.79 | % | 4.87 | % | ||||||||
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Interest rate spread
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2.24 | % | 2.33 | % | 2.31 | % | 2.33 | % | ||||||||
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Net interest margin
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2.37 | % | 2.46 | % | 2.45 | % | 2.48 | % | ||||||||
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Efficiency ratio
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53.88 | % | 62.94 | % | 56.54 | % | 67.25 | % | ||||||||