BELMONT, Mass., Feb. 7, 2019 /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 $4.6 million or $0.49 per diluted share for the quarter ended
December 31, 2018 compared to net income of $2.1 million or $0.23 per diluted share for the quarter ended
December 31, 2017. That represents an increase of 118.4% in
net income, quarter-over-quarter. For the year ended December 31, 2018, the Company reported net
income of $22.9 million or
$2.44 per diluted share as compared
to net income of $14.4 million or
$1.55 per diluted share for the year
ended December 31, 2017. That
represents an increase in net income of 59.2%, year-over-year. The
quarter-over-quarter and year-over-year improvements were largely
driven by a one-time charge of $2.63
million recorded within income tax expense in the fourth
quarter of 2017 related to the re-measurement of the Bank's
deferred tax assets due to a lower future U.S corporate income tax
rate. Partially offsetting this was $1.70
million of merger-related expenses in the fourth quarter of
2018.
On November 27, 2018, BSB Bancorp,
Inc. announced it had entered into a definitive Agreement and Plan
of Merger with Peoples United Financial, Inc., pursuant to which
the Company will merge into Peoples United Financial, Inc.
Consummation of the transaction is subject to customary closing
conditions, including receipt of regulatory approvals and the
approval of the Company's shareholders. The transaction is expected
to close early in the second quarter of 2019.
Robert M. Mahoney, President and
Chief Executive Officer, reported that, "The quarter reflected a
continuation of deposit pricing pressure and margin compression,
partially offset by increases in fee income from commercial loan
interest rate swaps."
NET INTEREST AND DIVIDEND INCOME
Net interest and dividend income before provision for loan
losses for the quarter ended December 31,
2018 was $15.4 million as
compared to $14.7 million for the
quarter ended December 31, 2017 or a
5.1% increase. The provision for loan losses for the quarter ended
December 31, 2018 was $465,000 as compared to $691,000 for the quarter ended December 31, 2017 or a 32.7% decrease. The
combination of these items resulted in an increase of $970,000 or 6.9% in net interest and dividend
income after provision for loan losses for the quarter ended
December 31, 2018 as compared to the
quarter ended December 31, 2017.
Net interest and dividend income before provision for loan
losses for the year ended December 31,
2018 was $61.1 million as
compared to $56.1 million for the
year ended December 31, 2017 or an
8.9% increase. The provision for loan losses for the year ended
December 31, 2018 was $1.7 million as compared to $2.8 million for the year ended December 31, 2017 or a 40.0% decrease. The
reduction in the provision for loan losses was driven by lower loan
growth, improvements in the factors used to estimate the allowance
for loan losses as well as the elimination of the specific reserve
tied to an impaired loan that was sold. The combination of these
items resulted in an increase of $6.1
million or 11.5% in net interest and dividend income after
provision for loan losses for the year ended December 31, 2018 as compared to the year ended
December 31, 2017.
NONINTEREST INCOME
Noninterest income for the quarter ended December 31, 2018 was $1.3
million as compared to $1.1
million for the quarter ended December 31, 2017 or an increase of 14.5%.
- Income from bank-owned life insurance increased $388,000 driven by death benefits received of
$405,000, partially offset by lower
increases in the cash surrender value of the policies.
- Loan-level derivative income increased from zero to
$259,000 as the Company began
entering into customer-related interest rate swap agreements during
2018.
- Net gain on sales of loans decreased by $208,000 due to lower sales volume.
- Investments held in the Rabbi Trust had a loss of $128,000 during the three months ended
December 31, 2018 as compared to a
gain of $42,000 during the three
months ended December 31, 2017.
- Other income decreased by $103,000.
Noninterest income for the year ended December 31, 2018 was $5.0
million as compared to $3.6
million for the year ended December
31, 2017 or an increase of 38.4%.
- Loan-level derivative income increased from zero to
$1.4 million as the Company began
entering into customer related interest rate swap agreements during
2018.
- Income from bank-owned life insurance increased $358,000 driven by death benefits received of
$405,000, partially offset by lower
increases in the cash surrender value of the policies.
- Customer service fees increased $111,000 or 14.1% driven by increased interchange
fee income.
- Investments held in the Rabbi Trust had a loss of $65,000 during the year ended December 31, 2018 as compared to a gain of
$158,000 during the year ended
December 31, 2017.
- Net gain on sales of loans decreased by $180,000 due to lower sales volume.
NONINTEREST EXPENSE
Noninterest expense for the quarter ended December 31, 2018 was $9.7
million as compared to $7.6
million for the quarter ended December 31, 2017 or an increase of 27.2%.
- Merger expenses incurred during the quarter amounted to
$1.7 million related to the pending
merger with Peoples United Financial, Inc.
- Salaries and employee benefits increased $531,000 or 11.0% driven by higher incentive
compensation expense.
- Director compensation decreased $237,000 or 70.7% driven by reduced compensation
costs related to the decrease in value of the investments held in
the Rabbi Trust as well as reduced stock-based compensation
expense.
Noninterest expense for the year ended December 31, 2018 was $33.0 million as compared to $30.7 million for the year ended December 31, 2017 or an increase of 7.6%.
- Merger expenses amounted to $1.7
million related to the pending merger with Peoples United
Financial, Inc.
- Salaries and employee benefits increased $794,000 or 4.1%.
- Deposit insurance expense increased by $239,000 or 13.8% driven by asset growth.
- Director compensation decreased $580,000 or 42.8% driven by reduced compensation
costs related to the decrease in value of the investments held in
the Rabbi Trust as well as reduced stock-based compensation
expense.
The Company's efficiency ratio increased to 58.1% for the
quarter ended December 31, 2018 from
48.3% for the quarter ended December 31,
2017. The increase in the ratio was driven by increased
expenses associated with the pending merger. However, the Company's
efficiency ratio improved to 49.9% for the year ended December 31, 2018 from 51.4% for the
year ended December 31, 2017, despite
the merger-related costs as the Company continues to grow the
balance sheet and manage costs. A talented and committed colleague
team combined with continued operational enhancements have
contributed to the improvement in our efficiency ratio for the year
ended December 31, 2018 compared to
the year ended December 31, 2017.
INCOME TAXES
The Company recorded a provision for income taxes of
$1.9 million for the quarter
ended December 31, 2018, compared to a provision for income
taxes of $5.4 million for the
quarter ended December 31, 2017, reflecting effective tax
rates of 29.7% and 71.9%, respectively. As noted above, the fourth
quarter of 2017 included a one-time charge of $2.63 million recorded within income tax expense
related to the re-measurement of the Bank's deferred tax assets due
to a lower future U.S corporate income tax rate. The Company
recorded a provision for income taxes of $8.5 million for the year ended
December 31, 2018, compared to a provision for income taxes of
$11.9 million for the year ended
December 31, 2017, reflecting effective tax rates of 27.1% and
45.2%, respectively. The decrease in the effective tax rate was
driven by the one-time charge related to the re-measurement of the
deferred tax asset discussed above and the reduction in the federal
statutory income tax rate from 35% to 21% that became effective on
January 1, 2018.
BALANCE SHEET
At December 31, 2018, the
Company's total assets were $3.03
billion, an increase of $353.5
million or 13.2% from $2.68
billion at December 31, 2017.
The Company experienced net loan growth of $327.4 million or 14.3% from December 31,
2017 to December 31, 2018.
One-to-four family residential real estate loans, commercial real
estate loans and multi-family real estate loans increased by
$249.9 million, $68.6 million and $48.0
million, respectively. Partially offsetting these increases
were decreases in indirect auto loans, home equity lines of credit,
construction and commercial loans of $18.3
million, $15.4 million,
$2.6 million and $1.3 million, respectively. The asset growth was
primarily funded by growth in deposits and Federal Home Loan Bank
advances. At December 31, 2018, deposits were $1.96 billion, an increase of $209.7 million or 12.0% from $1.75 billion at December 31, 2017. At
December 31, 2018, Federal Home Loan Bank advances totaled
$838.3 million, an increase of
$115.1 million or 15.9% from
$723.2 million at December 31,
2017.
Total stockholders' equity increased by $23.8 million or 13.3% from $178.0 million as of December 31, 2017 to $201.8 million as of December 31, 2018. This increase is primarily the
result of earnings of $22.9 million
and a $2.0 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 December 31, 2018 was $17.9 million and 0.68%, respectively, as
compared to $16.3 million and
0.71%, respectively, as of December 31, 2017. For the
year ended December 31, 2018, the
Company recorded net charge offs of $30,000, as compared to net charge offs of
$35,000 for the year ended
December 31, 2017. Total
non-performing assets were $1.2
million or 0.04% of total assets as of December 31, 2018 compared to $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, nonprofit organizations,
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 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.
Important Additional Information and Where to Find It
This communication is being made in respect of the proposed
merger transaction involving the Company and People's United.
People's United has filed a registration statement on Form S-4 with
the SEC, which includes a proxy statement of the Company and a
prospectus of People's United. A definitive proxy
statement/prospectus has been sent to the Company's stockholders
seeking any required stockholder approval. This communication does
not constitute an offer to sell or the solicitation of an offer to
buy any securities or a solicitation of any vote or approval.
Before making any voting or investment decision, investors and
stockholders of the Company are urged to carefully read the entire
registration statement and proxy statement/prospectus and any other
relevant documents filed with the SEC, as well as any amendments or
supplements to these documents, because they contain important
information about the proposed transaction. The documents filed
by People's United and the Company with the SEC may be obtained
free of charge at the SEC's website at www.sec.gov. In addition,
the documents filed by People's United may be obtained free of
charge from People's United at www.peoples.com under the tab
"Investor Relations" and then under the heading "Financial
Information," and the documents filed by the Company may be
obtained free of charge from the Company at
www.belmontsavings.com under the heading "Investor Relations"
and then under the tab "SEC Filings." Alternatively, these
documents, when available, can be obtained free of charge from
People's United upon written request to People's United Financial,
Inc., 850 Main Street, Bridgeport,
Connecticut 06604, Attn: Investor Relations, by calling
(203) 338-4581, or by sending an email to
Andrew.Hersom@peoples.com or from the Company upon written
request to BSB Bancorp, 2 Leonard Street, Belmont, Massachusetts 02478 Attn: Investor
Relations, by calling (617) 484-0613 or by sending an email to
John.Citrano@belmontsavings.com.
People's United and the Company and certain of their respective
directors and executive officers may be deemed to be participants
in the solicitation of proxies from the stockholders of the Company
in favor of the approval of the merger. Information regarding
People's United's directors and executive officers is contained in
People's United's Annual Report on Form 10-K for the year ended
December 31, 2017 and its Proxy Statement on Schedule 14A,
dated March 7, 2018, which are filed with the SEC. Information
regarding the Company's directors and executive officers is
contained in the Company's Annual Report on Form 10-K for the year
ended December 31, 2017 and its Proxy Statement on Schedule
14A, dated April 12, 2018, which are filed with the SEC.
Additional information regarding the interests of those
participants and other persons who may be deemed participants in
the transaction may be obtained by reading the registration
statement and the proxy statement/prospectus. Free copies of these
documents may be obtained as described in the preceding
paragraph.
Contact:
|
|
Robert M.
Mahoney
|
|
|
President and
Chief Executive Officer
|
|
|
|
Phone:
|
|
617-484-6700
|
Email:
|
|
robert.mahoney@belmontsavings.com
|
BSB BANCORP, INC.
AND SUBSIDIARIES
|
CONSOLIDATED
BALANCE SHEETS
|
(Dollars in
thousands, except share and per share data)
|
|
|
|
|
|
|
December 31,
2018
|
|
December 31,
2017
|
|
|
|
|
|
(unaudited)
|
|
|
ASSETS
|
|
|
|
|
Cash and due from
banks
|
|
$
1,901
|
|
$
1,771
|
Interest-bearing
deposits in other banks
|
|
141,477
|
|
109,117
|
Cash
and cash equivalents
|
|
143,378
|
|
110,888
|
Interest-bearing time
deposits with other banks
|
|
4,229
|
|
2,440
|
Investments in
available-for-sale securities
|
|
4,040
|
|
16,921
|
Investments in
held-to-maturity securities (fair value of $145,369 as
of
|
|
|
|
|
December 31, 2018 and
$158,385 as of December 31, 2017)
|
|
148,025
|
|
160,090
|
Federal Home Loan
Bank stock, at cost
|
|
38,658
|
|
32,382
|
Loans held for
sale
|
|
2,902
|
|
-
|
Loans, net of
allowance for loan losses of $17,939 as of
|
|
|
|
|
December 31, 2018 and
$16,312 as of December 31, 2017
|
|
2,624,372
|
|
2,296,958
|
Premises and
equipment, net
|
|
2,177
|
|
2,254
|
Accrued interest
receivable
|
|
7,290
|
|
6,344
|
Deferred tax asset,
net
|
|
6,793
|
|
5,794
|
Income taxes
receivable
|
|
49
|
|
53
|
Bank-owned life
insurance
|
|
36,540
|
|
36,967
|
Other
assets
|
|
11,648
|
|
5,474
|
Total
assets
|
|
$
3,030,101
|
|
$
2,676,565
|
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
Deposits:
|
|
|
|
|
Noninterest-bearing
|
|
$
203,373
|
|
$
221,462
|
Interest-bearing
|
|
1,757,539
|
|
1,529,789
|
Total
deposits
|
|
1,960,912
|
|
1,751,251
|
Federal Home Loan
Bank advances
|
|
838,250
|
|
723,150
|
Securities sold under
agreements to repurchase
|
|
2,883
|
|
3,268
|
Accrued interest
payable
|
|
2,050
|
|
1,594
|
Deferred compensation
liability
|
|
8,384
|
|
7,919
|
Other
liabilities
|
|
15,828
|
|
11,354
|
Total
liabilities
|
|
2,828,307
|
|
2,498,536
|
Stockholders'
Equity:
|
|
|
|
|
Common stock; $0.01 par
value per share, 100,000,000 shares authorized; 9,776,429 and
9,707,665
|
|
|
|
|
shares
issued and outstanding at December 31, 2018 and December 31, 2017,
respectively
|
|
98
|
|
97
|
Additional paid-in
capital
|
|
96,590
|
|
94,590
|
Retained
earnings
|
|
109,774
|
|
86,884
|
Accumulated other
comprehensive (loss) income
|
|
(1,188)
|
|
89
|
Unearned compensation -
ESOP
|
|
(3,480)
|
|
(3,631)
|
Total
stockholders' equity
|
|
201,794
|
|
178,029
|
Total
liabilities and stockholders' equity
|
|
$
3,030,101
|
|
$
2,676,565
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asset Quality
Data:
|
|
|
|
|
Total non-performing
assets
|
|
$
1,170
|
|
$
1,376
|
Total non-performing
loans
|
|
$
1,170
|
|
$
1,376
|
Non-performing loans
to total loans
|
|
0.04%
|
|
0.06%
|
Non-performing assets
to total assets
|
|
0.04%
|
|
0.05%
|
Allowance for loan
losses to non-performing loans
|
|
1533.25%
|
|
1185.47%
|
Allowance for loan
losses to total loans
|
|
0.68%
|
|
0.71%
|
|
|
|
|
|
|
|
|
Share
Data:
|
|
|
|
|
Outstanding common
shares
|
|
9,776,429
|
|
9,707,665
|
Book value per
share
|
|
$
20.64
|
|
$
18.34
|
|
|
|
|
|
|
|
|
Consolidated Capital
Ratios:
|
|
|
|
|
Common Equity Tier 1
Risk-Based Capital Ratio
|
|
10.80%
|
|
10.35%
|
Tier 1 Risk-Based
Capital Ratio
|
|
10.80%
|
|
10.35%
|
Total Risk-Based
Capital Ratio
|
|
11.75%
|
|
11.30%
|
Leverage
Ratio
|
|
6.97%
|
|
6.97%
|
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,
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
(unaudited)
|
|
(unaudited)
|
Interest and dividend
income:
|
|
|
|
|
|
|
|
|
|
|
Interest and fees on
loans
|
|
|
$
24,540
|
|
$
19,682
|
|
$
91,337
|
|
$
72,011
|
|
Interest on taxable
debt securities
|
|
|
867
|
|
904
|
|
3,494
|
|
3,356
|
|
Dividends
|
|
|
563
|
|
328
|
|
1,923
|
|
1,193
|
|
Other interest
income
|
|
|
336
|
|
200
|
|
1,497
|
|
583
|
|
Total interest and
dividend income
|
|
|
26,306
|
|
21,114
|
|
98,251
|
|
77,143
|
Interest
expense:
|
|
|
|
|
|
|
|
|
|
|
Interest on
deposits
|
|
|
7,415
|
|
3,907
|
|
23,761
|
|
12,900
|
|
Interest on Federal
Home Loan Bank advances
|
|
|
3,446
|
|
2,506
|
|
13,391
|
|
8,150
|
|
Interest on
securities sold under agreements to repurchase
|
|
|
1
|
|
1
|
|
5
|
|
4
|
|
Total interest
expense
|
|
|
10,862
|
|
6,414
|
|
37,157
|
|
21,054
|
|
Net interest and
dividend income
|
|
|
15,444
|
|
14,700
|
|
61,094
|
|
56,089
|
Provision for loan
losses
|
|
|
465
|
|
691
|
|
1,657
|
|
2,762
|
|
Net interest and
dividend income after provision
|
|
|
|
|
|
|
|
|
|
|
for
loan losses
|
|
|
14,979
|
|
14,009
|
|
59,437
|
|
53,327
|
Noninterest
income:
|
|
|
|
|
|
|
|
|
|
|
Customer service
fees
|
|
|
269
|
|
198
|
|
896
|
|
785
|
|
Income from
bank-owned life insurance
|
|
|
675
|
|
287
|
|
1,478
|
|
1,120
|
|
Net gain on sales of
securities
|
|
|
-
|
|
38
|
|
-
|
|
38
|
|
Net gain on sales of
loans
|
|
|
114
|
|
322
|
|
756
|
|
936
|
|
Loan servicing fee
income
|
|
|
74
|
|
111
|
|
356
|
|
398
|
|
Loan level derivative
income
|
|
|
259
|
|
-
|
|
1,417
|
|
-
|
|
Net (loss) gain on
investments held in Rabbi trust
|
|
|
(128)
|
|
42
|
|
(65)
|
|
158
|
|
Other
income
|
|
|
16
|
|
119
|
|
182
|
|
192
|
|
Total noninterest
income
|
|
|
1,279
|
|
1,117
|
|
5,020
|
|
3,627
|
Noninterest
expense:
|
|
|
|
|
|
|
|
|
|
|
Salaries and employee
benefits
|
|
|
5,373
|
|
4,842
|
|
20,327
|
|
19,533
|
|
Director
compensation
|
|
|
98
|
|
335
|
|
775
|
|
1,355
|
|
Occupancy
expense
|
|
|
244
|
|
223
|
|
986
|
|
964
|
|
Equipment
expense
|
|
|
106
|
|
95
|
|
383
|
|
422
|
|
Deposit
insurance
|
|
|
460
|
|
483
|
|
1,972
|
|
1,733
|
|
Data
processing
|
|
|
632
|
|
731
|
|
2,782
|
|
2,793
|
|
Professional
fees
|
|
|
307
|
|
265
|
|
1,064
|
|
1,044
|
|
Marketing
|
|
|
241
|
|
173
|
|
982
|
|
912
|
|
Merger
expenses
|
|
|
1,700
|
|
-
|
|
1,700
|
|
-
|
|
Other
expense
|
|
|
551
|
|
489
|
|
2,045
|
|
1,930
|
|
Total noninterest
expense
|
|
|
9,712
|
|
7,636
|
|
33,016
|
|
30,686
|
|
Income before income
tax expense
|
|
|
6,546
|
|
7,490
|
|
31,441
|
|
26,268
|
Income tax
expense
|
|
|
1,943
|
|
5,382
|
|
8,532
|
|
11,882
|
|
Net
income
|
|
|
$
4,603
|
|
$
2,108
|
|
$
22,909
|
|
$
14,386
|
|
Earnings per
share
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
$
0.51
|
|
$
0.24
|
|
$
2.56
|
|
$
1.63
|
|
Diluted
|
|
|
$
0.49
|
|
$
0.23
|
|
$
2.44
|
|
$
1.55
|
|
|
|
|
|
|
|
|
|
Return on average
assets
|
|
|
0.63%
|
|
0.33%
|
|
0.81%
|
|
0.61%
|
Return on average
equity
|
|
|
9.03%
|
|
4.67%
|
|
11.92%
|
|
8.40%
|
Interest rate spread
(1)
|
|
|
1.86%
|
|
2.14%
|
|
1.96%
|
|
2.24%
|
Net interest margin
(1)
|
|
|
2.08%
|
|
2.30%
|
|
2.15%
|
|
2.38%
|
Efficiency
ratio
|
|
|
58.08%
|
|
48.28%
|
|
49.94%
|
|
51.39%
|
Net charge-offs
(recoveries)
|
|
|
$
7
|
|
$
(1)
|
|
$
30
|
|
$
35
|
|
(1) Does not
include dividends on FHLB stock of $563,000 and $1.9 million and
$328,000 and $1.2 million for the three and twelve
months ended December 31, 2018 and 2017 (unaudited),
respectively.
|
View original
content:http://www.prnewswire.com/news-releases/bsb-bancorp-inc-reports-fourth-quarter-results--year-over-year-fourth-quarter-earnings-growth-of-118-4-300792006.html
SOURCE BSB Bancorp, Inc.