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BSB Bancorp, Inc Reports Second Quarter Earnings in 2014

Posted on July 24th, 2014 at 4:51 PM

BELMONT, MA, July 24, 2014 (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 $1.0 million, or $0.12 per basic and diluted share, for the quarter ended June 30, 2014, compared to net income of $361,000, or $0.04 per basic and diluted share, in the second quarter of 2013. For the six months ended June 30, 2014, the Company reported net income of $1.7 million, or $0.20 per basic and diluted share, as compared to net income of $777,000, or $0.09 per basic and diluted share, for the six months ended June 30, 2013.

Robert M. Mahoney, President and Chief Executive Officer, said, "The bank is benefiting from positive operating leverage as revenue growth outstrips expense growth. 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, 2014 was $7.6 million as compared to $5.9 million for the quarter ended June 30, 2013, or a 28.8% increase. The provision for loan losses for the quarter ended June 30, 2014 was $307,000 as compared to a provision for loan losses of $100,000 for the quarter ended June 30, 2013, or a 207.0% increase. This resulted in a $1.5 million or 26.0% increase in net interest and dividend income after provision for loan losses for the quarter ended June 30, 2014 as compared to the quarter ended June 30, 2013. Net interest and dividend income before provision for loan losses for the six months ended June 30, 2014 was $14.9 million as compared to $11.7 million for the six months ended June 30, 2013, or a 28.0% increase. The provision for loan losses for the six months ended June 30, 2014 was $696,000, as compared to $427,000 for the six months ended June 30, 2013, or a 63.0% increase. This resulted in a $3.0 million or 26.6% increase in net interest and dividend income after provision for loan losses for the six months ended June 30, 2014 as compared to the six months ended June 30, 2013.

NONINTEREST INCOME

Noninterest income for the quarter ended June 30, 2014 was $857,000 as compared to $908,000 for the quarter ended June 30, 2013, a decrease of $51,000, or 5.6%. This decrease was driven by a decrease in net gain on sales of loans of $286,000 as we benefited less during the second quarter of 2014 from the interest rate environment as compared to the second quarter of 2013. The decrease in net gain on sales of loans was partially offset by an increase in other income of $164,000 and an increase in loan servicing fee income of $75,000. The increase in other income was driven by vendor loss experience refunds. Noninterest income for the six months ended June 30, 2014 was $1.6 million as compared to $1.9 million for the six months ended June 30, 2013, a decrease of $335,000, or 17.5%. This decrease was driven by a decrease in net gain on sales of loans of $575,000 as we benefited less during the six months ended June 30, 2014 from the interest rate environment as compared to the six months ended June 30, 2013. The decrease in net gain on sales of loans was partially offset by an increase in other income of $168,000 and an increase in loan servicing fee income of $121,000. The increase in other income was driven by vendor loss experience refunds.

NONINTEREST EXPENSE

Noninterest expense for the quarter ended June 30, 2014 was $6.5 million as compared to $6.1 million for the quarter ended June 30, 2013. This increase of $361,000, or 5.9%, was primarily driven by an increase in salaries and employee benefits of $306,000. Noninterest expense for the six months ended June 30, 2014 was $13.2 million as compared to $11.9 million for the six months ended June 30, 2013. This increase of $1.2 million, or 10.4%, was primarily driven by an increase in salaries and employee benefits of $899,000, which included the impact of adding personnel for two additional branches.

BALANCE SHEET

At June 30, 2014, total assets were $1.2 billion, an increase of $167.2 million or 15.9% from $1.1 billion at December 31, 2013. The Company experienced net loan growth of $148.3 million, or 17.7%, from December 31, 2013. Commercial real estate loans, residential mortgage loans, home equity loans, and indirect auto loans increased by $38.7 million, $61.2 million, $18.4 million and $16.4 million, respectively. The asset growth was funded by customer deposits and borrowings from the Federal Home Loan Bank.

At June 30, 2014, deposits totaled $891.9 million, an increase of $127.1 million or 16.6% from $764.8 million at December 31, 2013. Core deposits, which we consider to include all deposits other than CD’s and brokered CD’s, increased by $92.1 million from December 31, 2013. Hal R. Tovin, Executive Vice President and Chief Operating Officer, said, “Q2 was another good quarter for deposit growth. The maturing of our three InStore branches and the ongoing growth of our municipal banking program drove both checking and savings deposits. In addition, new and expanding small business banking and commercial real estate customer relationships continue to be important contributors to this strong performance.”

Total stockholders’ equity increased by $3.0 million from $130.4 million as of December 31, 2013 to $133.4 million as of June 30, 2014. This increase is primarily the result of earnings of $1.7 million and a $980,000 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, 2014 was $8.6 million and 0.87%, respectively, as compared to $8.0 million and 0.95%, respectively, as of December 31, 2013. For the three and six months ended June 30, 2014 the Company recorded net charge offs of $35,000 and $39,000, respectively, as compared to $22,000 and $11,000 for the three and six months ending June 30, 2013. Total non-performing assets were $2.3 million, or 0.18% of total assets, as of June 30, 2014, as compared to $4.1 million, or 0.39% of total assets, as of December 31, 2013.

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, 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 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.

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