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BSB Bancorp, Inc. Reports Fourth Quarter Results

BELMONT, Mass., Feb. 13, 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 $645,000, or $0.07 per basic and diluted share, for the quarter ended December 31, 2013, compared to net income of $485,000, or $0.05 per basic and diluted share in the fourth quarter of 2012.  For the year ended December 31, 2013, the Company reported net income of $2.0 million, or $0.22 per basic and diluted share, as compared to net income of $1.4 million, or $0.16 per basic and diluted share for the same period in 2012.

Robert M. Mahoney, President and Chief Executive Officer, said, "The bank had a good year. By every measure - revenues, profits, loans and deposits, we enjoyed solid growth. Importantly, credit quality was particularly strong. The environment for customer- focused community banks is very good. We are pleased to have crossed the $1 billion mark during the year - well ahead of our long term plan."

NET INTEREST AND DIVIDEND INCOME

Net interest and dividend income before provision for loan losses for the quarter ended December 31, 2013 was $7.6 million as compared to $5.9 million for the quarter ended December 31, 2012, a 29.2% increase. The provision for loan losses for the quarter ended December 31, 2013 was $632,000 as compared to a provision for loan losses of $696,000 for the quarter ended December 31, 2012, a 9.2% decrease. This resulted in a $1.8 million or 34.4% increase in net interest and dividend income after provision for loan losses for the quarter ended December 31, 2013 as compared to the quarter ended December 31, 2012.  Net interest and dividend income before provision for loan losses for the year ended December 31, 2013 was $26.0 million as compared to $21.7 million for the year ended December 31, 2012, a 19.8% increase. The provision for loan losses for the year ended December 31, 2013 was $1.5 million, as compared to $2.7 million for the year ended December 31, 2012, a 45.3% decrease. This resulted in a $5.5 million or 29.2% increase in net interest and dividend income after provision for loan losses period over period.

NONINTEREST INCOME

Noninterest income for the quarter ended December 31, 2013 was $802,000 as compared to $1.6 million for the quarter ended December 31, 2012, a decrease of $772,000, or 49.1%. This decrease was primarily driven by a decrease in gains on sales of loans of $957,000, partially offset by an increase in loan servicing fee income and other income of $123,000 and $111,000, respectively. For the twelve months ended December 31, 2013, noninterest income was $3.6 million as compared to $4.7 million for the twelve months ended December 31, 2012. This decrease of $1.1 million, or 23.4%, was primarily driven by a decrease in gains on sales of loans of $1.5 million, partially offset by an increase in loan servicing fee income of $283,000 and an increase in customer service fees of $108,000.

NONINTEREST EXPENSE

Noninterest expense for the quarter ended December 31, 2013 was $6.8 million as compared to $5.9 million for the quarter ended December 31, 2012.  This increase of $857,000, or 14.4%, was largely driven by an increase in salaries and employee benefits of $376,000 which included a full quarter's impact of expense related to the Equity Incentive Plan adopted at the end of 2012. Marketing and data processing expenses also increased by $152,000 and $114,000, respectively, quarter over quarter. Noninterest expense for the year ended December 31, 2013 was $25.1 million as compared to $21.5 million for the year ended December 31, 2012. This increase of $3.5 million, or 16.5% was primarily driven by increases in salaries and employee benefits and director compensation of $1.9 million and $360,000, 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 $664,000, driven largely by increases in core, online banking and loan servicing costs related to increased loan and deposit volume.

BALANCE SHEET

At December 31, 2013, total assets were $1.1 billion, an increase of $216.5 million or 25.8% from December 31, 2012. Investments in held-to-maturity securities have increased by $55.8 million or 87.2% from December 31, 2012. The Company also experienced net loan growth, excluding loans held for sale, of $184.7 million, or 28.2%, from December 31, 2012. Commercial real estate loans, residential mortgage loans, home equity loans, and indirect auto loans increased by $54.1 million, $85.8 million, $25.5 million and $19.5 million, respectively. The asset growth was funded by deposits and borrowings from the Federal Home Loan Bank.

At December 31, 2013, deposits totaled $764.8 million, an increase of $156.9 million or 25.8% from December 31, 2012. Core deposits, which we consider to include all deposits other than CD's and brokered CD's, increased by $132.0 million from December 31, 2012. Hal R. Tovin, Executive Vice President and Chief Operating Officer, said, "This strong growth was due to the impact of our business banking programs focused on deposit driven businesses as well as the effective cross selling of deposit relationships of new and existing borrowers by our commercial real estate lenders. In addition, this performance reflects the expanding customer base of our two new branches in Newton and Cambridge."

Total stockholders' equity decreased by $2.9 million from $133.3 million as of December 31, 2012 to $130.4 million as of December 31, 2013. This decrease is primarily the result of the Stock Repurchase Program that was adopted on December 12, 2012. During the twelve months ended December 31, 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 $2.0 million and a $1.6 million positive effect on 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, 2013 equaled $8.0 million and 0.95%, respectively, as compared to $6.4 million and 0.98%, respectively, as of December 31, 2012.  For the year ended December 31, 2013 the Company recorded net recoveries of $20,000 compared to $1.1 million in net charge offs for the year ended December 31, 2012. Total non-performing assets were $4.1 million, or 0.39% of total assets, as of December 31, 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 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, 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)
















December 31, 2013


December 31, 2012







(unaudited)



ASSETS







Cash and due from banks



$                2,196


$                1,433

Interest-bearing deposits in other banks

35,839


51,279




Cash and cash equivalents

38,035


52,712

Interest-bearing time deposits with other banks

119


119

Investments in available-for-sale securities

21,921


22,621

Investments in held-to-maturity securities, at cost

119,776


63,984

Federal Home Loan Bank stock, at cost

7,712


7,627

Loans held-for-sale

-


11,205

Loans, net of allowance for loan losses of $7,958 as of 






12/31/2013 (unaudited) and $6,440 as of 12/31/2012

839,013


654,295

Premises and equipment, net



3,327


2,902

Accrued interest receivable



2,241


2,217

Deferred tax asset, net



5,146


4,025

Income taxes receivable



-


806

Bank-owned life insurance



13,325


12,884

Other real estate owned



-


661

Other assets



4,004


2,024




Total assets



$         1,054,619


$            838,082










LIABILITIES AND STOCKHOLDERS' EQUITY




Deposits:








Noninterest-bearing



$            139,733


$            126,760



Interest-bearing



625,020


481,105




Total deposits



764,753


607,865

Federal Home Loan Bank advances



142,100


83,100

Securities sold under agreements to repurchase

2,127


3,404

Other borrowed funds



1,113


1,156

Accrued interest payable



683


455

Deferred compensation liability



5,137


4,685

Income taxes payable



178


-

Other liabilities



8,107


4,109




Total liabilities



924,198


704,774










Stockholders' Equity:







Common stock



91


95


Additional paid-in capital



85,449


90,188


Retained earnings



49,312


47,352


Accumulated other comprehensive (loss) income

(188)


68


Unearned compensation - ESOP



(4,243)


(4,395)




Total stockholders' equity



130,421


133,308




Total liabilities and stockholders' equity

$         1,054,619


$            838,082










Asset Quality Data:






Total non-performing assets



4,115


4,325

Total non-performing loans



4,115


3,621

Non-performing loans to total loans



0.49%


0.55%

Non-performing assets to total assets



0.39%


0.52%

Allowance for loan losses to non-performing loans

193.39%


177.86%

Allowance for loan losses to total loans



0.95%


0.98%










 

BSB BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(Dollars in thousands, except per share data)










Three months ended


Twelve months ended




December 31,


December 31,




2013


2012


2013


2012




(unaudited)


(unaudited)



Interest and dividend income:









Interest and fees on loans

$  7,982


$ 6,537


$ 28,407


$ 24,568


Interest on taxable debt securities

865


584


2,455


2,124


Dividends

7


9


28


47


Other interest income

21


13


82


85



Total interest and dividend income

8,875


7,143


30,972


26,824

Interest expense:









Interest on deposits

1,103


1,076


4,215


4,125


Interest on Federal Home Loan Bank advances

204


204


735


958


Interest on securities sold under agreements to repurchase

1


1


4


8


Interest on other borrowed funds

8


10


33


42



Total interest expense

1,316


1,291


4,987


5,133



Net interest and dividend income

7,559


5,852


25,985


21,691

Provision for loan losses

632


696


1,498


2,736



Net interest and dividend income after provision for loan losses










6,927


5,156


24,487


18,955

Noninterest income:









Customer service fees

228


217


938


830


Income from bank-owned life insurance

122


123


435


439


Net gain on sales of loans

56


1,013


1,024


2,520


Net gain on sales and calls of securities

-


59


34


59


Loan servicing fee income

260


137


750


467


Other income

136


25


425


390



Total noninterest income 

802


1,574


3,606


4,705

Noninterest expense:









Salaries and employee benefits

4,086


3,710


15,207


13,305


Director compensation

195


174


889


529


Occupancy expense

266


215


951


801


Equipment expense

196


131


650


450


Deposit insurance

145


134


575


500


Data processing

738


624


2,777


2,113


Professional fees

307


305


929


1,036


Marketing

337


185


999


928


Other expense

527


462


2,114


1,884



Total noninterest expense

6,797


5,940


25,091


21,546



Income before income tax expense

932


790


3,002


2,114

Income tax expense

287


305


1,042


713




Net income

$     645


$    485


$   1,960


$   1,401


Earnings per share











Basic

$    0.07


$   0.05


$     0.22


$     0.16




Diluted

$    0.07


$   0.05


$     0.22


$     0.16

Return on average assets

0.25%


0.23%


0.21%


0.19%

Return on average equity

2.00%


1.46%


1.51%


1.06%

Interest rate spread

2.81%


2.62%


2.69%


2.68%

Net interest margin

2.98%


2.90%


2.90%


2.96%

Efficiency ratio

81.28%


79.99%


84.79%


81.62%













 

SOURCE BSB Bancorp, Inc.

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