BSB Bancorp, Inc. Announces First Quarter Net Income of $4.1 Million.Business Editors BINGHAMTON Binghamton (bĭng`əmtən), industrial city (1990 pop. 53,008), seat of Broome co., S central N.Y., at the confluence of the Chenango and the Susquehanna rivers; settled 1787, inc. as a city 1867. , N.Y.--(BUSINESS WIRE)--April 28, 2004 BSB BSB Backstreet Boys BSB Bayerische Staatsbibliothek BSB British Superbikes (motorcycle racing series) BSB Bachelor of Science in Business BSB Bandar Seri Begawan (capital of Brunei) Bancorp, Inc. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :BSBN BSBN Baltic Sea Business Network BSBN Bu Sa Bum Nim ), the bank holding company of BSB Bank & Trust Company ("BSB"), a diversified financial The diversified financial services segment includes a range of consumer and commercially-oriented companies offering a wide variety of products and services, including various lending products (such as home equity loans and credit cards), insurance, and securities and investment services organization serving the Southern Tier The Southern Tier is a geographical term that refers to the counties of New York State west of the Catskill Mountains along the northern border of Pennsylvania. The region is bordered to the south by the Northern Tier of Pennsylvania, and together these regions are known as and Central New York Central New York is a term used to broadly describe the central region of New York State, roughly including the following counties and cities: Cayuga County – Auburn Cortland County – Cortland Madison County – Oneida regions with total assets of approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $2.2 billion, today announced financial results for the first quarter of 2004. BSB's net income for the quarter ended March 31, 2004 was $4.1 million or $0.43 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, compared to net income of $4.9 million or $0.52 per diluted share for the fourth quarter of 2003 and $3.9 million or $0.41 per diluted share for the first quarter of 2003. On December December: see month. 24, 2003, BSB Bancorp, Inc. and Partners Trust Financial Group, Inc. announced a definitive merger agreement, pursuant to which Partners Trust will acquire all of the outstanding shares of BSB Bancorp, Inc. The balance of outstanding residential mortgages increased to $573.7 million, up from $558.8 million at December 31, 2003, an increase of $14.9 million. Bi-weekly residential mortgages continue to be popular, especially in 10- and 15-year maturities, and increased $13.9 million from $252.3 million to $266.2 million. Total commercial real estate loans decreased $6.6 million during the first quarter of 2004 to $192.8 million. During the fourth quarter of 2003, originations for commercial real estate loans were $47.1 million compared to $9.1 million for the first quarter of 2004. Commercial and industrial loans declined $17.3 million from December 31, 2003 to $306.4 million at March 31, 2004. Originations of commercial and industrial loans declined from $18.9 million for the fourth quarter of 2003 to $3.1 million for the first quarter of 2004. Similarly, consumer loans decreased by $15.9 million to $351.5 million at the end of the first quarter of 2004 with originations declining to $23.5 million for the first quarter of 2004 from $34.8 million for the fourth quarter of 2003. These changes resulted in total loans declining by $24.9 million to $1,424.4 million at March 31, 2004 as compared to December 31, 2003. Total investment securities increased $16.2 million to $659.6 million at March 31, 2004 as compared to December 31, 2003 as cash inflows were redeployed into those assets as well as into federal funds Federal Funds Funds deposited to regional Federal Reserve Banks by commercial banks, including funds in excess of reserve requirements. Notes: These non-interest bearing deposits are lent out at the Fed funds rate to other banks unable to meet overnight reserve sold. The balance of federal funds sold increased to $47.2 million at March 31, 2004 from $16.0 million at December 31, 2003. Net interest income was $17.2 million for the first quarter of 2004 compared to $17.9 million in the fourth quarter of 2003. The growth in average earning assets Earning Assets Any income-earning asset owned by a company. Notes: These assets are generally interest-bearing accounts, bonds, and securities available for sale. See also: Asset, Asset Valuation, Earnings, Net Interest Margin from $2,098.3 million in the fourth quarter of 2003 to $2,111.3 million in the first quarter of 2004 was primarily attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to the increased average balance of federal funds from $3.1 million in the fourth quarter of 2003 to $36.9 million for the first quarter of 2004. With a yield of just above 1%, the higher balances of federal funds had a detrimental det·ri·men·tal adj. Causing damage or harm; injurious. det  ri·men impact on net interest margin,
especially when combined with the decline in average loan balances as
mentioned above.Loan charge-offs were $3.4 million in the first quarter 2004. This compares to charge-offs of $19.1 million for the fourth quarter of 2003 and $2.3 million for the first quarter of 2003. The larger level of charge-offs in the fourth quarter of 2003 were associated with the sale of certain classified loans during that quarter. The fourth quarter also contained recoveries of $4.9 million compared to $2.4 million in the first quarter of 2004. Non-performing loans A non-performing loan is a loan that is in default or close to being in default. Many loans become non-performing after being in default for 3 months, but this can depend on the contract terms. totaled $16.7 million at March 31, 2004, an increase of $3.4 million from the December 31, 2003 non-performing loan total of $13.2 million. The provision for loan losses was $1.6 million in the first quarter of 2004 as compared to $260,000 in the fourth quarter of 2003. This increase reflects the lower level of recoveries during the quarter combined with the increase in non-performing loans during the quarter. The allowance for loan losses remained at acceptable levels of 288.72% of non-performing loans and 3.38% of period end loans outstanding. Total non-interest income increased $55 thousand from the fourth quarter of 2003. Service charges on deposit accounts declined $154 thousand, principally a $111 thousand decline in insufficient in·suf·fi·cient adj. 1. Not sufficient. 2. Incapable of proper functioning. funds fee income. Net gain on the sale of securities also declined $279 thousand from the fourth quarter. Offsetting these decreases was an increase in mortgage servicing Mortgage servicing The collection of monthly payments and penalties, record keeping, payment of insurance and taxes, and possible settlement of default , involved with a mortgage loan. fees of $83 thousand as the value of mortgage servicing rights rebounded from prior quarter's write-downs. Income from bank owned life insurance increased $198 thousand to $468 thousand for the first quarter, as an additional $20 million of insurance was purchased late in December 2003. Other income increased $208 thousand, mainly from a $266 thousand increase in income from net gains from residential loan sales. Operating expense Operating Expense The essential things that a company must purchase in order to maintain business. Notes: For example, the payment of employees wages are an operating expense. Also known as OPEX. decreased $438 thousand from the fourth quarter 2003 to the first quarter of 2004. Salaries, pensions and other employee benefits decreased $574 thousand during this period mainly due to the fourth quarter expense related to the incentive compensation plans which resulted from the asset quality target achievements during the fourth quarter. Advertising and promotion costs for the first quarter of 2004 exceeded the prior quarter by $281 thousand. This is a result of lower expenses in the fourth quarter as is normal for that time of year and extensive promotions during the first quarter for two different product lines. Merger related expenses, associated with the pending merger with Partners Trust Financial Group, Inc., decreased $153 thousand from the fourth quarter. These expenses, which are generally not tax deductible That which may be taken away or subtracted. In taxation, an item that may be subtracted from gross income or adjusted gross income in determining taxable income (e.g., interest expenses, charitable contributions, certain taxes). , will continue through the merger's consummation CONSUMMATION. The completion of a thing; as the consummation of marriage; (q.v.) the consummation of a contract, and the like. 2. A contract is said to be consummated, when everything to be done in relation to it, has been accomplished. . Forward-Looking Statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. This news release contains forward-looking statements, including those regarding the projected performance of BSB Bancorp, Inc. These statements constitute forward-looking for·ward-look·ing adj. Concerned with or making provision for the future: forward-looking educators; a forward-looking corporate plan. Adj. 1. information, within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995, which involve significant risks and uncertainties. Actual results may differ materially from any forward-looking information discussed in the news release. Factors that might cause such differences include, but are not limited to: fluctuations in interest rates, government regulations and economic conditions and competition in the geographic geographic /geo·graph·ic/ (je?o-graf´ik) in pathology, of or referring to a pattern that is well demarcated, resembling outlines on a map. geographic pertaining to geography. and business areas in which BSB conducts its operations, as well as unanticipated loan losses and other similar conditions affecting the Company's operations, pricing, products and services.
BSB BANCORP, INC. AND SUBSIDIARIES - Consolidated Financial Highlights
(unaudited)
March 31, 2004 (Dollars in Thousands, Except Share and Per Share Data)
----------------------------------------------------------------------
Quarters Ended
March 31, December 31, March 31,
OPERATIONS DATA 2004 2003 2003
----------------------------------------------------------------------
Total interest income $27,587 $ 28,284 $ 29,376
Total interest expense 10,357 10,425 10,896
Net interest income 17,230 17,859 18,480
Provision for loan losses 1,620 260 3,968
Non-interest income 3,228 3,173 3,358
Operating expense 12,690 13,128 12,063
Income tax expense 2,031 2,702 1,930
Net income 4,117 4,942 3,877
----------------------------------------------------------------------
SELECTED FINANCIAL DATA
----------------------------------------------------------------------
Yield on earning assets (1) 5.23% 5.39% 6.02%
Cost of funds (1) 2.19 2.25 2.54
Net interest spread 3.04 3.14 3.48
Net interest margin (1) 3.26 3.40 3.79
Return on average assets (1) 0.75 0.91 0.77
Return on average equity (1) 10.94 13.67 10.53
Equity to assets (2) 6.92 6.61 6.95
Operating expense to average
assets (1) 2.30 2.42 2.39
Efficiency ratio 62.0 62.42 55.24
----------------------------------------------------------------------
PER SHARE DATA
----------------------------------------------------------------------
Basic earnings $ 0.44 $ 0.54 $ 0.42
Diluted earnings $ 0.43 $ 0.52 $ 0.41
Book value $ 16.39 $ 15.82 $ 15.63
Dividends paid $ 0.25 $ 0.25 $ 0.25
Dividend payout ratio 56.69% 46.56% 58.93%
----------------------------------------------------------------------
FINANCIAL CONDITION DATA 2004 2003 2003
----------------------------------------------------------------------
Assets $2,221,475 $2,212,111 $2,056,251
Earning assets 2,125,703 2,107,618 1,985,291
Total loans 1,424,384 1,449,244 1,397,101
Allowance for loan losses (48,080) (47,421) (65,944)
Gross investment
securities 650,449 638,276 583,345
Unrealized appreciation
on AFS securities 9,133 5,097 13,555
Interest-bearing deposits 1,426,381 1,432,408 1,305,597
Non-interest-bearing
deposits 154,236 156,678 143,282
Borrowings 420,599 410,768 400,524
Junior subordinated
obligations 48,202 48,202 -
Trust preferred securities - - 48,000
Shareholders' equity 153,681 146,303 142,946
Non-performing loans 16,653 13,209 44,217
Performing loans, 30-89
days past due 5,090 6,936 4,020
Other real estate owned 731 1,129 2,027
Repossessed assets 102 102 1,641
Trust assets under
management 288,066 288,538 257,844
Serviced loans 255,965 264,973 333,576
----------------------------------------------------------------------
AVERAGE BALANCES
----------------------------------------------------------------------
Assets $2,204,946 $2,165,605 $2,020,061
Earning assets 2,111,320 2,098,300 1,952,094
Total loans 1,433,936 1,448,377 1,363,637
Allowance for loan losses (47,004) (53,734) (65,036)
Gross investment securities 635,956 638,122 563,025
Unrealized appreciation
on AFS securities 6,685 4,796 14,265
Interest-bearing deposits 1,423,405 1,372,225 1,288,222
Non-interest-bearing
deposits 149,162 154,332 142,588
Borrowings 416,543 430,534 376,997
Junior subordinated
obligations 48,202 - -
Trust preferred securities - 46,519 48,000
Shareholders' equity 150,592 144,592 147,279
Shares outstanding 9,329,022 9,197,428 9,309,002
Diluted shares outstanding 9,629,036 9,480,423 9,412,381
(1) Annualized (2) At period end
BSB BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CONDITION (unaudited)
----------------------------------------------------------------------
(In Thousands, Except Share March 31, December 31, March 31,
and Per Share Data) 2004 2003 2003
----------------------------------------------------------------------
ASSETS
Cash and due from banks $ 40,576 $ 45,670 $ 44,108
Federal funds sold 47,200 16,000 -
----------------------------------------------------------------------
Cash and cash equivalents 87,776 61,670 44,108
----------------------------------------------------------------------
Investment securities available
for sale, at fair value 639,541 623,832 578,607
Federal Home Loan Bank of
New York stock 20,041 19,541 18,293
Loans held for sale 678 1,144 2,783
Loans:
Commercial 306,376 323,634 478,833
Consumer 351,539 367,412 368,689
Residential real estate 573,677 558,781 392,579
Commercial real estate 192,792 199,417 157,000
----------------------------------------------------------------------
Total loans 1,424,384 1,449,244 1,397,101
Net deferred costs 2,992 2,953 2,062
Allowance for
loan losses (48,080) (47,421) (65,944)
----------------------------------------------------------------------
Net loans 1,379,296 1,404,776 1,333,219
----------------------------------------------------------------------
Bank premises and equipment,
net 14,892 15,223 15,097
Accrued interest receivable 8,540 7,981 9,363
Other real estate owned and
repossessed assets 832 1,231 3,668
Bank owned life insurance 41,522 41,054 20,279
Other assets 28,357 35,659 30,834
----------------------------------------------------------------------
Total assets $2,221,475 $2,212,111 $2,056,251
----------------------------------------------------------------------
LIABILITIES AND
SHAREHOLDERS' EQUITY
Deposits $1,580,617 $1,589,086 $1,448,879
Borrowings 420,599 410,768 400,524
Other liabilities 18,376 17,752 15,902
Junior subordinated
obligations issued to
unconsolidated
subsidiary trusts (Junior
subordinated obligations) 48,202 48,202 -
Mandatorily redeemable
preferred securities issued by
consolidated subsidiary trusts
(Trust preferred securities) - - 48,000
----------------------------------------------------------------------
Total liabilities 2,067,794 2,065,808 1,913,305
----------------------------------------------------------------------
Shareholders' Equity:
Preferred stock, par value
$0.01 per share; 2,500,000
shares authorized; none
issued - - -
Common stock, par value $0.01
per share; 30,000,000 shares
authorized; 11,918,894
11,788,182 and 11,683,399
shares issued 119 118 117
Additional paid-in capital 47,524 44,243 41,992
Retained earnings 144,526 142,743 136,496
Accumulated other
comprehensive income 5,463 3,049 8,107
Treasury stock, at cost:
2,544,251, 2,541,668
and 2,539,538 shares (43,951) (43,850) (43,766)
----------------------------------------------------------------------
Total shareholders'
equity 153,681 146,303 142,946
----------------------------------------------------------------------
Total liabilities and
shareholders'
equity $2,221,475 $2,212,111 $2,056,251
======================================================================
BSB BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (unaudited)
----------------------------------------------------------------------
Three Months Ended
(In Thousands, Except Per March 31, December 31, March 31,
Share Data) 2004 2003 2003
----------------------------------------------------------------------
Interest income:
Interest and fees on loans $20,412 $21,539 $22,195
Interest on federal
funds sold 93 8 66
Interest on investment
securities 7,060 6,656 7,089
Interest on loans held
for sale 22 81 26
----------------------------------------------------------------------
Total interest income 27,587 28,284 29,376
----------------------------------------------------------------------
Interest expense:
Interest on savings
deposits 273 281 416
Interest on time deposits 4,438 4,448 5,104
Interest on money market
deposit accounts 1,279 1,237 1,092
Interest on NOW accounts 71 56 82
Interest on borrowings 3,558 3,672 3,424
Interest on junior
subordinated obligations 738 - -
Interest on trust preferred
securities - 731 778
----------------------------------------------------------------------
Total interest expense 10,357 10,425 10,896
----------------------------------------------------------------------
Net interest income 17,230 17,859 18,480
Provision for loan losses 1,620 260 3,968
----------------------------------------------------------------------
Net interest income after
provision for loan losses 15,610 17,599 14,512
----------------------------------------------------------------------
Non-interest income:
Service charges on
deposit accounts 1,162 1,316 1,250
Checkcard interchange fees 330 315 359
Mortgage servicing fees 171 88 145
Fees and commissions -
brokerage services 183 221 222
Trust fees 326 304 278
Income from bank owned
life insurance 468 270 247
Gain on sale of securities,
net 34 313 329
Other income 554 346 528
----------------------------------------------------------------------
Total non-interest
income 3,228 3,173 3,358
----------------------------------------------------------------------
Operating expense:
Salaries, pensions and other
employee benefits 7,098 7,672 6,503
Building occupancy 1,223 1,293 1,107
Advertising and promotion 450 169 334
Professional fees 434 492 736
Data processing costs 1,090 1,118 1,244
Services 717 743 752
Merger related expenses 172 325 -
Other real estate owned and
repossessed asset expenses,
net 119 120 159
Other expenses 1,387 1,196 1,228
----------------------------------------------------------------------
Total operating expense 12,690 13,128 12,063
----------------------------------------------------------------------
Income before income taxes 6,148 7,644 5,807
Income tax expense 2,031 2,702 1,930
----------------------------------------------------------------------
Net income $ 4,117 $ 4,942 $ 3,877
======================================================================
Earnings per share:
Basic $0.44 $0.54 $0.42
Diluted $0.43 $0.52 $0.41
======================================================================
BSB BANCORP, INC. AND SUBSIDIARIES
NON-PERFORMING ASSETS (unaudited)
March December September June March
31, 31, 30, 30, 31,
(Dollars in Thousands) 2004 2003 2003 2003 2003
----------------------------------------------------------------------
Non-accrual loans:
Commercial loans $14,964 $11,186 $27,570 $30,267 $30,078
Residential real
estate loans 861 622 680 743 787
Commercial real
estate loans 446 32 67 674 821
Consumer loans 104 134 237 271 198
Troubled debt
restructured loans - 1,126 2,005 6,379 12,143
----------------------------------------------------------------------
Total non-accrual
loans 16,375 13,100 30,559 38,334 44,027
Accruing loans with
principal or interest
payments 90 days
or more overdue 278 109 141 111 190
----------------------------------------------------------------------
Total
non-performing
loans 16,653 13,209 30,700 38,445 44,217
----------------------------------------------------------------------
Other real estate owned
and repossessed assets 833 1,231 1,696 2,601 3,668
----------------------------------------------------------------------
Total
non-performing
assets $17,486 $14,440 $32,396 $41,046 $47,885
======================================================================
Total non-performing
loans to total loans 1.17% 0.91% 2.11% 2.70% 3.16%
======================================================================
Total non-performing
assets to total
assets 0.79% 0.65% 1.49% 1.90% 2.33%
======================================================================
In addition to the non-accruing troubled debt restructured loans
shown in the above schedule, the Company also had accruing loans
classified as troubled debt restructured loans totaling $17.2 million,
$13.8 million, $8.4 million, $8.1 million, and $3.6 million at March
31, 2004, December 31, 2003, September 30, 2003, June 30, 2003, and
March 31, 2003.
BSB BANCORP, INC. AND SUBSIDIARIES
ALLOWANCE AND NET CHARGE-OFFS
PER QUARTER (unaudited)
----------------------------------------------------------------------
Quarters Ended
March December September June March
(Dollars in 31, 31, 30, 30, 31,
Thousands) 2004 2003 2003 2003 2003
----------------------------------------------------------------------
Average gross
loans
outstanding $1,433,936 $1,448,377 $1,425,579 $1,399,913 $1,363,637
Allowance at
beginning of
period $47,421 $61,382 $62,607 $65,944 $63,250
Charge-offs:
Commercial
loans 2,181 17,868 7,065 6,490 1,102
Consumer loans 796 1,135 987 990 977
Residential real
estate loans 53 26 25 12 30
Commercial real
estate loans 339 106 496 82 208
----------------------------------------------------------------------
Total loan
charge-offs 3,369 19,135 8,573 7,574 2,317
Recoveries 2,408 4,914 4,468 1,257 1,043
----------------------------------------------------------------------
Net charge-offs 961 14,221 4,105 6,317 1,274
----------------------------------------------------------------------
Provision for
loan losses 1,620 260 2,880 2,980 3,968
----------------------------------------------------------------------
Allowance at end
of period $48,080 $47,421 $61,382 $62,607 $65,944
----------------------------------------------------------------------
Ratio of net
charge-offs to:
Average gross
loans
outstanding
(annualized) 0.27% 3.93% 1.15% 1.80% 0.37%
Ratio of allowance
to:
Non-performing
loans 288.72% 359.01% 199.94% 162.85% 149.14%
Period-end
loans
outstanding 3.38% 3.27% 4.23% 4.40% 4.72%
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