BSB Bancorp : Reports Third Quarter Results - Year to Date Earnings Growth of 66%

BELMONT, Mass., Oct. 22, 2015 /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 $1.87 million, or $0.21 per diluted share, for the quarter ended September 30, 2015, compared to net income of $1.20 million, or $0.14 per diluted share, for the quarter ended September 30, 2014, or an increase of 55.4%. This is the 9^th consecutive quarter of earnings growth. For the nine months ended September 30, 2015, the Company reported net income of $4.85 million, or $0.55 per diluted share, as compared to net income of $2.92 million, or $0.34 per diluted share, for the nine months ended September 30, 2014, or an increase of 65.7%.

Robert M. Mahoney, President and Chief Executive Officer, said, 'Through strong organic growth and expense control, we continue to improve our profitability. Importantly, credit quality remains sound.'

NET INTEREST AND DIVIDEND INCOME

Net interest and dividend income before provision for loan losses for the quarter ended September 30, 2015 was $9.80 million as compared to $8.14 million for the quarter ended September 30, 2014, or a 20.4% increase. The provision for loan losses for the quarter ended September 30, 2015 was $727,000 as compared to a provision for loan losses of $292,000 for the quarter ended September 30, 2014, or a 149.0% increase, primarily due to loan growth. This resulted in an increase of $1.22 million, or 15.6%, in net interest and dividend income after provision for loan losses for the quarter ended September 30, 2015 as compared to the quarter ended September 30, 2014. Net interest and dividend income before provision for loan losses for the nine months ended September 30, 2015 was $27.58 million as compared to $23.07 million for the nine months ended September 30, 2014, or a 19.6% increase. The provision for loan losses for the nine months ended September 30, 2015 was $1.43 million, as compared to $988,000 for the nine months ended September 30, 2014, or a 44.7% increase. This resulted in an increase of $4.07 million, or 18.4%, in net interest and dividend income after provision for loan losses for the nine months ended September 30, 2015 as compared to the nine months ended September 30, 2014.

NONINTEREST INCOME

Noninterest income for the quarter ended September 30, 2015 was $693,000 as compared to $792,000 for the quarter ended September 30, 2014, or a decrease of 12.5%. This decrease was primarily driven by a decrease in loan servicing fee income and in net gains on sales of loans, partially offset by an increase in income from bank owned life insurance. The decrease in loan servicing fee income was driven by decreases in the balance of auto loans that we service for others. The decrease in net gains on sales of loans was driven by lower sales volumes of both auto loans and 1-4 family residential real estate loans. The increase in income from bank owned life insurance was driven by $10 million of additional policies purchased in the third quarter of 2014 and $5 million purchased in the second quarter of 2015. Noninterest income for the nine months ended September 30, 2015 was $2.40 million as compared to $2.37 million for the nine months ended September 30, 2014, or an increase of 0.9%. Income from bank owned life insurance increased by $284,000 due to the additional policy purchases mentioned above. Partially offsetting this was a decrease in loan servicing fee income driven by decreases in the balance of auto loans that we service for others.

NONINTEREST EXPENSE

Noninterest expense for the quarter ended September 30, 2015 was $6.73 million as compared to $6.66 million for the quarter ended September 30, 2014, or an increase of 1.1%. Our efficiency ratio improved to 64.2% during the quarter ended September 30, 2015 from 74.5% during the quarter ended September 30, 2014 as we continue to grow the balance sheet and manage costs. Noninterest expense for the nine months ended September 30, 2015 was $20.65 million as compared to $19.83 million for the nine months ended September 30, 2014, or an increase of 4.1%. This increase was primarily driven by an increase in salaries and employee benefits costs. Our efficiency ratio also improved to 68.9% during the nine months ended September 30, 2015, from 77.9% during the nine months ended September 30, 2014.

BALANCE SHEET

At September 30, 2015, total assets were $1.69 billion, an increase of $266.86 million or 18.7% from $1.43 billion at December 31, 2014. The Company experienced net loan growth of $248.26 million, or 21.0%, from December 31, 2014. Residential 1-4 family real estate loans, construction loans, commercial real estate loans and home equity lines of credit increased by $184.82 million, $31.74 million, $30.14 million and $19.54 million, respectively. Partially offsetting these increases was a decrease in indirect auto loans of $15.52 million driven by the suspension of new originations due to current market conditions. The asset growth was primarily funded by growth in deposits.

At September 30, 2015, deposits totaled $1.21 billion, an increase of $224.01 million or 22.8% from $984.56 million at December 31, 2014. Core deposits, which we consider to include all deposits other than CD's and brokered CD's, increased by $192.49 million from December 31, 2014. Hal R. Tovin, Executive Vice President and Chief Operating Officer, said, 'Q3 was another quarter of steady deposit growth. We are pleased with the ongoing success of our municipal and business banking strategies which were the primary drivers of this growth.'

Total stockholders' equity increased by $6.56 million from $137.01 million as of December 31, 2014 to $143.57 million as of September 30, 2015. This increase is primarily the result of earnings of $4.85 million and a $1.60 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 September 30, 2015 was $10.39 million and 0.73%, respectively, as compared to $8.88 million and 0.75%, respectively, as of December 31, 2014. For the nine months ended September 30, 2015, the Company recorded net recoveries of $79,000, as compared to net charge offs of $627,000 for the nine months ending September 30, 2014. Total non-performing assets were $2.76 million, or 0.16% of total assets, as of September 30, 2015, as compared to $2.82 million, or 0.20% of total assets as of December 31, 2014.

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 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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SOURCE BSB Bancorp, Inc.