BELMONT, Mass., July 19, 2018 /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 $6.1 million or $0.65 per diluted share for the quarter ended
June 30, 2018 compared to net income of $4.0 million or $0.43 per diluted share for the quarter ended
June 30, 2017 or an increase of 51.2% in net income. Excluding
the one-time impact of the Tax Cuts and Jobs Act ("Tax Reform Act")
in the fourth quarter of 2017, the Bank has had 20 consecutive
quarters of earnings growth. For the six months ended June 30, 2018, the Company reported net income of
$12.1 million or $1.29 per diluted share as compared to net income
of $7.7 million or $0.83 per diluted share for the six months ended
June 30, 2017 or an increase in net
income of 57.3%.
Robert M. Mahoney, President and
Chief Executive Officer, said, "Strong loan growth, good expense
control and solid credit risk management continue to drive our
consistent earnings growth. Competition for deposits is keen and
has impacted our margin."
NET INTEREST AND DIVIDEND INCOME
Net interest and dividend income before provision for loan
losses for the quarter ended June 30,
2018 was $15.1 million as
compared to $13.9 million for the
quarter ended June 30, 2017 or an
8.3% increase. The provision for loan losses for the quarter ended
June 30, 2018 was $726,000 as compared to $707,000 for the quarter ended June 30, 2017 or a 2.7% increase. The combination
of these items resulted in an increase of $1.1 million or 8.6% in net interest and dividend
income after provision for loan losses for the quarter ended
June 30, 2018 as compared to the
quarter ended June 30, 2017.
Net interest and dividend income before provision for loan
losses for the six months ended June 30,
2018 was $30.2 million as
compared to $27.2 million for the six
months ended June 30, 2017 or an
11.1% increase. The provision for loan losses for the six months
ended June 30, 2018 was $1.0 million as compared to $1.5 million for the six months ended
June 30, 2017 or a 34.8% decrease.
The decrease in the provision for loan losses was driven by
improvements in the factors used to estimate the allowance for loan
losses as well as the elimination of the specific reserve on an
impaired loan that was sold. The combination of these items
resulted in an increase of $3.6
million or 13.9% in net interest and dividend income after
provision for loan losses for the six months ended June 30, 2018 as compared to the six months ended
June 30, 2017.
NONINTEREST INCOME
Noninterest income for the quarter ended June 30, 2018 was $1.7
million as compared to $995,000 for the quarter ended June 30, 2017 or an increase of 72.0%. This
increase was driven by $1.0 million
in fee income recognized on loan-level derivative agreements we
entered into during the quarter. Partially offsetting this increase
was a decrease in net gains on sales of loans of $314,000 due to a lower number of loans sold.
Noninterest income for the six months ended June 30, 2018 was $2.6
million as compared to $1.6
million for the six months June 30,
2017 or an increase of 60.2%. This increase was driven by
loan-level derivative income of $1.0
million.
NONINTEREST EXPENSE
Noninterest expense for the quarter ended June 30, 2018 was $7.8
million as compared to $7.6
million for the quarter ended June
30, 2017 or an increase of 2.0%.
- Salaries and employee benefits increased $233,000 or 4.9% driven by merit increases,
additional staffing and commissions related to higher loan
originations.
- Director compensation decreased $129,000 or 36.2% driven by reduced stock-based
compensation expense as the majority of stock awards granted under
the 2012 Equity Incentive Plan were fully expensed in the fourth
quarter of 2017.
- Deposit insurance expense increased by $79,000 or 19.0% driven by asset growth.
Noninterest expense for the six months ended June 30, 2018 was $15.5
million as compared to $15.1
million for the six months ended June
30, 2017 or an increase of 2.3%.
- Salaries and employee benefits increased $436,000 or 4.6% driven by merit increases,
additional staffing and commissions related to higher loan
originations.
- Director compensation decreased $237,000 or 36.0% driven by reduced stock-based
compensation expense as the majority of stock awards granted under
the 2012 Equity Incentive Plan were fully expensed in the fourth
quarter of 2017.
- Deposit insurance expense increased by $166,000 or 20.3% driven by asset growth.
Our efficiency ratio improved to 46.4% for the quarter ended
June 30, 2018 from 51.2% for the
quarter ended June 30, 2017 and to
47.1% for the six months ended June 30,
2018 from 52.4% for the six months ended June 30, 2017 as we continue to grow the balance
sheet and manage costs. A talented and committed colleague team
along with continued operational enhancements have contributed to
the improvement in our efficiency ratio.
INCOME TAXES
We recorded a provision for income taxes of $2.2 million for the quarter ended
June 30, 2018, compared to a provision for income taxes of
$2.6 million for the quarter
ended June 30, 2017, reflecting effective tax rates of 26.8%
and 39.1%, respectively. We recorded a provision for income taxes
of $4.3 million for the six
months ended June 30, 2018, compared to a provision for income
taxes of $4.5 million for the
six months ended June 30, 2017, reflecting effective tax rates
of 26.2% and 37.0%, respectively. The decrease in the effective tax
rate was driven by a reduction in the federal income tax rate from
35% to 21% that became effective on January
1, 2018.
BALANCE SHEET
At June 30, 2018, total assets
were $2.91 billion, an increase of
$232.5 million or 8.7% from
$2.68 billion at December 31, 2017. The Company experienced net
loan growth of $242.4 million or
10.6% from December 31, 2017 to June
30, 2018. One-to-four family residential real estate loans
and commercial real estate loans increased by $187.8 million and $87.3
million, respectively. Partially offsetting these increases
were decreases in construction loans of $14.6 million, indirect auto loans of
$10.4 million and home equity lines
of credit of $6.9 million. The asset
growth was primarily funded by growth in federal home loan bank
advances and deposits.
At June 30, 2018, deposits totaled $1.83 billion, an increase of $82.6 million or 4.7% from $1.75 billion at December 31, 2017. Core
deposits, which we consider to include all deposits other than CDs,
increased by $5.1 million or 0.4%
from $1.247 billion at December 31, 2017 to $1.252 billion at June 30,
2018. Hal R. Tovin, Executive
Vice President and Chief Operating Officer, said "Deposit growth
continued in the first half of the year with the introduction of
competitive retail products, as well as a strategic focus on not
for profit customer acquisition. In addition, the implementation of
cash management services continue to expand our municipal banking
relationships."
Total stockholders' equity increased by $13.2 million or 7.4% from $178.0 million as of December 31, 2017 to $191.2 million as of June
30, 2018. This increase is primarily the result of earnings
of $12.1 million and a $1.2 million increase in additional paid-in
capital related to stock-based compensation.
ASSET QUALITY
Asset quality remains strong. The allowance for loan losses in
total and as a percentage of total loans as of June 30, 2018 was $17.3 million and 0.68%, respectively, as
compared to $16.3 million and
0.71%, respectively, as of December 31, 2017. For the
six months ended June 30, 2018, the
Company recorded net charge offs of $17,000, as compared to net charge offs of
$32,000 for the six months ended
June 30, 2017. Total non-performing
assets were $773,000 or 0.03% of
total assets as of June 30, 2018 and
$1.4 million or 0.05% of total assets
as of December 31, 2017.
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,
the Company's 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)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30,
2018
|
|
December 31,
2017
|
|
|
|
|
|
(unaudited)
|
|
|
ASSETS
|
|
|
|
|
Cash and due from
banks
|
|
$
2,087
|
|
$
1,771
|
Interest-bearing
deposits in other banks
|
|
101,615
|
|
109,117
|
|
|
|
Cash and cash
equivalents
|
|
103,702
|
|
110,888
|
Interest-bearing time
deposits with other banks
|
|
2,415
|
|
2,440
|
Investments in
available-for-sale securities
|
|
4,042
|
|
16,921
|
Investments in
held-to-maturity securities (fair value of $149,932 as
of
|
|
|
|
|
|
|
June 30, 2018 and
$158,385 as of December 31, 2017)
|
|
153,654
|
|
160,090
|
Federal Home Loan
Bank stock, at cost
|
|
40,082
|
|
32,382
|
Loans held for
sale
|
|
4,104
|
|
-
|
Loans, net of
allowance for loan losses of $17,296 as of
|
|
|
|
|
|
|
June 30, 2018 and
$16,312 as of December 31, 2017
|
|
2,539,318
|
|
2,296,958
|
Premises and
equipment, net
|
|
2,335
|
|
2,254
|
Accrued interest
receivable
|
|
6,950
|
|
6,344
|
Deferred tax asset,
net
|
|
5,924
|
|
5,794
|
Income taxes
receivable
|
|
476
|
|
53
|
Bank-owned life
insurance
|
|
37,496
|
|
36,967
|
Other
assets
|
|
8,612
|
|
5,474
|
|
|
|
Total
assets
|
|
$
2,909,110
|
|
$
2,676,565
|
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
Deposits:
|
|
|
|
|
|
|
Noninterest-bearing
|
|
$
194,700
|
|
$
221,462
|
|
|
Interest-bearing
|
|
1,639,163
|
|
1,529,789
|
|
|
|
Total
deposits
|
|
1,833,863
|
|
1,751,251
|
Federal Home Loan
Bank advances
|
|
855,250
|
|
723,150
|
Securities sold under
agreements to repurchase
|
|
3,999
|
|
3,268
|
Accrued interest
payable
|
|
2,004
|
|
1,594
|
Deferred compensation
liability
|
|
8,232
|
|
7,919
|
Other
liabilities
|
|
14,554
|
|
11,354
|
|
|
|
Total
liabilities
|
|
2,717,902
|
|
2,498,536
|
Stockholders'
Equity:
|
|
|
|
|
|
Common stock; $0.01
par value per share, 100,000,000 shares authorized; 9,748,669 and
9,707,665
|
|
|
|
|
shares issued and
outstanding at June 30, 2018 and December 31, 2017,
respectively
|
|
97
|
|
97
|
|
Additional paid-in
capital
|
|
95,741
|
|
94,590
|
|
Retained
earnings
|
|
98,943
|
|
86,884
|
|
Accumulated other
comprehensive (loss) income
|
|
(17)
|
|
89
|
|
Unearned compensation
- ESOP
|
|
(3,556)
|
|
(3,631)
|
|
|
|
Total stockholders'
equity
|
|
191,208
|
|
178,029
|
|
|
|
Total liabilities and
stockholders' equity
|
|
$
2,909,110
|
|
$
2,676,565
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asset Quality
Data:
|
|
|
|
|
Total non-performing
assets
|
|
$
773
|
|
$
1,376
|
Total non-performing
loans
|
|
$
758
|
|
$
1,376
|
Non-performing loans
to total loans
|
|
0.03%
|
|
0.06%
|
Non-performing assets
to total assets
|
|
0.03%
|
|
0.05%
|
Allowance for loan
losses to non-performing loans
|
|
2281.79%
|
|
1185.47%
|
Allowance for loan
losses to total loans
|
|
0.68%
|
|
0.71%
|
|
|
|
|
|
|
|
|
Share
Data:
|
|
|
|
|
Outstanding common
shares
|
|
9,748,669
|
|
9,707,665
|
Book value per
share
|
|
$
19.61
|
|
$
18.34
|
|
|
|
|
|
|
|
|
Consolidated Capital
Ratios:
|
|
|
|
|
|
Common Equity Tier 1
Risk-Based Capital Ratio
|
|
10.51%
|
|
10.35%
|
|
Tier 1 Risk-Based
Capital Ratio
|
|
10.51%
|
|
10.35%
|
|
Total Risk-Based
Capital Ratio
|
|
11.46%
|
|
11.30%
|
|
Leverage
Ratio
|
|
6.82%
|
|
6.97%
|
BSB BANCORP, INC.
AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF
OPERATIONS (Dollars in thousands, except per share
data)
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
Six months
ended
|
|
|
|
|
|
|
|
|
|
June 30,
|
|
June 30,
|
|
|
|
|
|
|
|
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
|
|
|
|
|
|
|
|
(unaudited)
|
|
(unaudited)
|
Interest and dividend
income:
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest and fees on
loans
|
|
|
|
|
$
22,320
|
|
$
17,508
|
|
$
43,018
|
|
$
33,895
|
|
Interest on taxable
debt securities
|
|
|
|
|
823
|
|
849
|
|
1,771
|
|
1,624
|
|
Dividends
|
|
|
|
|
450
|
|
290
|
|
834
|
|
546
|
|
Other interest
income
|
|
|
|
|
289
|
|
117
|
|
678
|
|
205
|
|
|
|
Total interest and
dividend income
|
|
|
|
|
23,882
|
|
18,764
|
|
46,301
|
|
36,270
|
Interest
expense:
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest on
deposits
|
|
|
|
|
5,427
|
|
2,988
|
|
9,849
|
|
5,601
|
|
Interest on Federal
Home Loan Bank advances
|
|
|
|
|
3,350
|
|
1,827
|
|
6,209
|
|
3,458
|
|
Interest on
securities sold under agreements to repurchase
|
|
|
|
|
2
|
|
1
|
|
3
|
|
2
|
|
|
|
Total interest
expense
|
|
|
|
|
8,779
|
|
4,816
|
|
16,061
|
|
9,061
|
|
|
|
Net interest and
dividend income
|
|
|
|
|
15,103
|
|
13,948
|
|
30,240
|
|
27,209
|
Provision for loan
losses
|
|
|
|
|
726
|
|
707
|
|
1,001
|
|
1,536
|
|
|
|
Net interest and
dividend income after provision
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
for loan
losses
|
|
|
|
|
14,377
|
|
13,241
|
|
29,239
|
|
25,673
|
Noninterest
income:
|
|
|
|
|
|
|
|
|
|
|
|
|
Customer service
fees
|
|
|
|
|
205
|
|
199
|
|
406
|
|
382
|
|
Income from
bank-owned life insurance
|
|
|
|
|
261
|
|
294
|
|
529
|
|
546
|
|
Net gain on sales of
loans
|
|
|
|
|
24
|
|
338
|
|
336
|
|
347
|
|
Loan servicing fee
income
|
|
|
|
|
88
|
|
101
|
|
205
|
|
217
|
|
Loan level derivative
income
|
|
|
|
|
1,032
|
|
-
|
|
1,032
|
|
-
|
|
Other
income
|
|
|
|
|
101
|
|
63
|
|
96
|
|
133
|
|
|
|
Total noninterest
income
|
|
|
|
|
1,711
|
|
995
|
|
2,604
|
|
1,625
|
Noninterest
expense:
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries and employee
benefits
|
|
|
|
|
5,022
|
|
4,789
|
|
9,883
|
|
9,447
|
|
Director
compensation
|
|
|
|
|
227
|
|
356
|
|
422
|
|
659
|
|
Occupancy
expense
|
|
|
|
|
236
|
|
232
|
|
500
|
|
498
|
|
Equipment
expense
|
|
|
|
|
93
|
|
103
|
|
175
|
|
227
|
|
Deposit
insurance
|
|
|
|
|
495
|
|
416
|
|
984
|
|
818
|
|
Data
processing
|
|
|
|
|
729
|
|
694
|
|
1,463
|
|
1,388
|
|
Professional
fees
|
|
|
|
|
283
|
|
270
|
|
544
|
|
558
|
|
Marketing
|
|
|
|
|
248
|
|
283
|
|
514
|
|
561
|
|
Other
expense
|
|
|
|
|
463
|
|
502
|
|
991
|
|
965
|
|
|
|
Total noninterest
expense
|
|
|
|
|
7,796
|
|
7,645
|
|
15,476
|
|
15,121
|
|
|
|
Income before income
tax expense
|
|
|
|
|
8,292
|
|
6,591
|
|
16,367
|
|
12,177
|
Income tax
expense
|
|
|
|
|
2,224
|
|
2,579
|
|
4,289
|
|
4,499
|
|
|
|
Net income
|
|
|
|
|
$
6,068
|
|
$
4,012
|
|
$
12,078
|
|
$
7,678
|
|
Earnings per
share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
|
$
0.68
|
|
$
0.45
|
|
$
1.35
|
|
$
0.87
|
|
|
|
Diluted
|
|
|
|
|
$
0.65
|
|
$
0.43
|
|
$
1.29
|
|
$
0.83
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on average
assets
|
|
|
|
|
0.87%
|
|
0.69%
|
|
0.89%
|
|
0.68%
|
Return on average
equity
|
|
|
|
|
12.93%
|
|
9.56%
|
|
13.14%
|
|
9.32%
|
Interest rate
spread
|
|
|
|
|
1.97%
|
|
2.30%
|
|
2.04%
|
|
2.31%
|
Net interest
margin
|
|
|
|
|
2.16%
|
|
2.44%
|
|
2.22%
|
|
2.45%
|
Efficiency
ratio
|
|
|
|
|
46.37%
|
|
51.16%
|
|
47.12%
|
|
52.44%
|
Net
charge-offs
|
|
|
|
|
$
14
|
|
$
-
|
|
$
17
|
|
$
32
|
Contact:
|
Robert M.
Mahoney
President and Chief Executive Officer
|
Phone:
|
617-484-6700
|
Email:
|
robert.mahoney@belmontsavings.com
|
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SOURCE BSB Bancorp, Inc.