Benjamin Franklin Bancorp Reports Results for Fourth Quarter of 2005; Declares Quarterly Dividend.FRANKLIN Franklin, cities, United States Franklin. 1 City (1990 pop. 12,907), seat of Johnson co., S central Ind., inc. 1823. It is a farm trade center. Manufactures include auto parts, aluminum doors and windows, and copper panels. , Mass. -- Benjamin Franklin Bancorp, Inc. (the "Company" or "Benjamin Franklin") (Nasdaq: BFBC BFBC Bracknell Forest Borough Council BFBC Battlefield Bad Company (video game) BFBC Bicycle-Friendly Berkeley Coalition BFBC Best Florida Beer Championship BFBC Big Freakin' Brown Cloud ), the bank holding company for Benjamin Franklin Bank (the "Bank"), today reported net income of $1.3 million, or $.16 per share, for the quarter ended December December: see month. 31, 2005. The Company also today announced that its Board of Directors declared de·clare v. de·clared, de·clar·ing, de·clares v.tr. 1. To make known formally or officially. See Synonyms at announce. 2. To state emphatically or authoritatively; affirm. 3. a quarterly cash dividend of $.03 per common share, payable on February February: see month. 23, 2006 to stockholders of record as of February 9, 2006. For the year ended December 31, 2005, the Company reported net income of $431,000. These results included the effect of two non-recurring charges recorded in the second quarter of 2005 for the $4.0 million contribution made to the Benjamin Franklin Bank Charitable Foundation (charge of $2.6 million on an after-tax basis After-tax basis The comparison basis used to analyze the net after-tax returns on a corporate taxable bond and a municipal tax-free bond. ), and the sale/write-down of bank-owned land (loss of $1.0 million after tax). Excluding these non-recurring charges, the Company earned $4.1 million for the year ended December 31, 2005. Because shares had not been issued and outstanding during the entire period, earnings per share have not been reported for the year ended December 31, 2005. Thomas (language) Thomas - A language compatible with the language Dylan(TM). Thomas is NOT Dylan(TM). The first public release of a translator to Scheme by Matt Birkholz, Jim Miller, and Ron Weiss, written at Digital Equipment Corporation's Cambridge Research Laboratory runs R. Venables Venables is a village and commune of the Eure département in Haute-Normandie, France. The village dates back some 7,000 years. It is situated at the northern most point of the Madrie Plateau and is located at an altitude of 124 meters above sea level. , President and Chief Executive Officer, noted: "2005 was a tremendously successful and exciting year for Benjamin Franklin. With our mutual-to-stock conversion and the acquisition of Chart Bank, we now have a broader geographical ge·o·graph·ic also ge·o·graph·i·cal adj. 1. Of or relating to geography. 2. Concerning the topography of a specific region. ge base and greater resources with which to serve our customers. 2006 will bring a number of challenges, not the least of which are a very difficult interest rate environment and intense local competition for deposits. Nonetheless, we remain very excited about continuing to build upon all of the positive events of this past year. " Since December 31, 2004, the Company's balance sheet has increased by $349.7 million, or 67.6%, to $867.1 million. Of that increase, $290.4 million was the result of the acquisition of Chart Bank on April 4, 2005, and consisted of the following major asset and liability components: loans, $184.0 million; securities, $36.1 million; cash deployed by CSSI CSSI Critical Skills Shortage Initiative CSSI California Strategic Sourcing Initiative CSSI Computer Support Services, Inc. (Irving, TX, USA) CSSI Computer Security Subsystem Interpretation CSSI Computer Software & Services Industry , the Bank's ATM servicing subsidiary, $28.9 million; deposits, $217.4 million; and borrowed funds, $25.5 million. Also contributing to growth was the $53.7 million of net proceeds Net Proceeds The amount received after all costs are deducted from the sale of a piece of property or security. Notes: In the case of an investor selling a security, net proceeds represent the proceeds from the sale minus any trading costs (i.e. commissions). received as a result of the Company's issuance of 5,977,419 shares in connection with its mutual-to-stock conversion and related stock offering. The net loan portfolio increased by $221.8 million, or 57.8%, during 2005. While the Chart Bank acquisition accounted for $184.0 million of that growth, another $37.8 million of net loan growth was generated internally, attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to growth of $51.0 million in the Bank's commercial loan portfolio, net of a $13.2 million decrease in residential mortgage and consumer loans. With the addition of the Chart Bank loan portfolio and internal growth, commercial loans have grown to 47.3% of total loans, compared to 30.8% at December 31, 2004. The Company remains committed to the further expansion of its commercial lending business over the next several years. In the year ended December 31, 2005, the Company's deposits have increased by $215.2 million, or 54.3%, to $611.7 million, primarily the result of the Chart Bank acquisition. The Company's mix of deposits has shifted during 2005, with certificate accounts accounting for 43.0% of total deposits at December 31, 2005, compared with 34.6% at year end 2004. This resulted from the addition of Chart Bank's deposit accounts as well as from an increase in demand for certificate accounts generally, caused by the rise in interest rates over the past year. Asset quality remained strong at the close of the fourth quarter, with non-performing assets as a percentage of total assets at .05% as of December 31, 2005. The allowance for loan losses increased to .93% of total loans at year end 2005, compared to .82% of total loans at December 31, 2004. The Company's net interest margin ("NIM nim 1 tr. & intr.v. nimmed, nim·ming, nims Archaic To steal; pilfer. [Middle English nimen, to take, from Old English niman; see ") was 3.17% for the three months ended December 31, 2005, an increase of 24 basis points compared to the fourth quarter of 2004. The NIM had widened further, to 3.34% in the third quarter of 2005, due to the addition of Chart Bank's balance sheet, which was more heavily invested in commercial assets than that of Benjamin Franklin. However, in the fourth quarter the NIM narrowed, due to the effect of increased price competition for certificate accounts and the continued flattening
The flattening, ellipticity, or oblateness of an oblate spheroid is the "squashing" of the spheroid's pole, down towards its equator. of the Treasury yield curve, which had the effect of reducing the spread between the Company's 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 and its core deposit accounts. Management expects that the Company's NIM will contract further in 2006 as a result of the relatively flat yield curve Flat Yield Curve A chart that shows that the yields of bonds with short maturities are equal to the yields of bonds with longer maturities. and continued competitive pressure on both certificate and money market account interest rates. Interest rates on money market accounts in particular have tended to lag the rise in market interest rates over the past year, and management considers it likely that those rates may rise significantly in the coming months. Overall, the increase in the NIM for the fourth quarter of 2005 when compared to 2004, coupled with balance sheet growth, resulted in a $2.4 million increase in net interest income, which rose to $6.0 million in the fourth quarter of 2005, compared to $3.6 million for the fourth quarter of 2004. Non-interest income for the quarter totaled $1.4 million, an increase of $979,000 compared to the fourth quarter of 2004. This increase reflects the addition of deposit and loan fees associated with former Chart Bank accounts, as well as fee revenue generated by CSSI, the Bank's ATM servicing subsidiary. For the quarter, those CSSI fees amounted to $638,000, an increase of $145,000 or 29.4%, when compared to the third quarter of 2005. This was caused by growth in cash supplied by CSSI to its ATM customers , which increased by $9.7 million in the fourth quarter to $37.2 million at December 31, 2005. The Company's efficiency ratio for the quarter (excluding amortization of the core deposit intangible and gains/losses on sales of bank assets) improved to 67.2% from 78.8% in the year earlier period. Although operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. have increased in order to support the Company's lending growth and public company status, the leverage to the Company's existing expense structure provided by the Chart Bank acquisition and internally-generated growth more than offset these expense increases. As disclosed dis·close tr.v. dis·closed, dis·clos·ing, dis·clos·es 1. To expose to view, as by removing a cover; uncover. 2. To make known (something heretofore kept secret). in the prospectus A document, notice, circular, advertisement, letter, or communication in written form or by radio or television that offers any security for sale, or confirms the sale of any security. used in the Company's stock offering related to the mutual-to-stock conversion and in the Company's Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the year ended December 31, 2004, the Company expects to adopt a stock-based incentive plan in 2006, subject to shareholder approval. The granting of restricted stock and stock options under the stock-based incentive plan will increase the Company's compensation costs in the periods in which such awards and options vest. Certain statements herein constitute "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. " and 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 Subject to change; dependent upon or granted based on the occurrence of a future, uncertain event. A conditional payment is the payment of a debt or obligation contingent upon the performance of a certain specified act. 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, legislative and regulatory reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. changes that adversely affect the businesses in which Benjamin Franklin Bancorp is engaged and changes in the securities market. The Company disclaims any intent or obligation to update any forward-looking statements, whether in response to new information, future events or otherwise.
BENJAMIN FRANKLIN BANCORP, INC AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
December 31, December 31,
2005 2004
------------ ------------
ASSETS (Unaudited)
Cash and due from banks $16,499 $8,691
Cash supplied by CSSI to ATM customers 37,200 -
Short-term investments 12,051 5,513
------------ ------------
Total cash and cash equivalents 65,750 14,204
Securities available for sale, at fair value 122,379 86,070
Securities held to maturity, at amortized
cost 109 217
Restricted equity securities, at cost 10,012 6,975
------------ ------------
Total securities 132,500 93,262
Loans 610,802 386,545
Allowance for loan losses (5,670) (3,172)
------------ ------------
Loans, net 605,132 383,373
Premises and equipment, net 11,546 11,147
Accrued interest receivable 3,045 1,490
Goodwill 33,762 4,248
Core deposit intangible 4,133 45
Bank-owned life insurance 7,451 7,182
Other assets 3,738 2,442
------------ ------------
$867,057 $517,393
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Regular savings $97,960 $95,875
Money market accounts 94,347 53,167
Now accounts 32,147 22,460
Demand deposit accounts 124,396 87,776
Time deposit accounts 262,823 137,221
------------ ------------
Total deposits 611,673 396,499
Short-term borrowings - 4,250
Long-term debt 141,339 81,000
Other liabilities 6,933 4,316
------------ ------------
Total liabilities 759,945 486,065
------------ ------------
Common stock, no par value; authorized
75,000,000 shares; issued 8,488,898 shares
at December 31, 2005 - -
Additional paid-in capital 82,849 -
Retained earnings 32,942 32,997
Unallocated common stock held by ESOP (5,353) -
Accumulated other comprehensive loss (2,326) (1,669)
------------ ------------
Total stockholders' equity 108,112 31,328
------------ ------------
$868,057 $517,393
============ ============
BENJAMIN FRANKLIN BANCORP, INC AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except share and per share data)
Three Months Ended Year Ended
December 31, December 31,
------------------------------------
2005 2004 2005 2004
---------- ------- -------- --------
(Unaudited) (Unaudited)
Interest and dividend income:
Loans, including fees $8,753 $4,753 $30,409 $17,320
Debt securities 1,154 712 3,811 3,092
Equity securities 129 75 400 244
Short-term investments 171 32 515 139
---------- ------- -------- --------
Total interest and
dividend income 10,207 5,572 35,135 20,795
---------- ------- -------- --------
Interest expense:
Interest on Deposits 2,702 1,145 8,500 4,366
Interest on Borrowings 1,494 862 4,617 2,666
---------- ------- -------- --------
Total interest
expense 4,196 2,007 13,117 7,032
---------- ------- -------- --------
Net interest income 6,011 3,565 22,018 13,763
Provision for loan losses 38 150 686 620
---------- ------- -------- --------
Net interest income, after
provision for loan losses 5,973 3,415 21,332 13,143
---------- ------- -------- --------
Other income (charges):
Deposit service fees 376 198 1,233 882
Loan servicing fees 111 67 442 254
ATM servicing fees 637 - 1,639 -
Gain on sale of loans, net 44 17 116 123
Loss on sales of securities,
net - (32) - (24)
Loss on sale/write-down of
bank owned-land, net - - (1,020) -
Income from bank-owned life
insurance 65 63 269 208
Miscellaneous 203 144 808 681
---------- ------- -------- --------
Total other income 1,436 457 3,487 2,124
---------- ------- -------- --------
Operating expenses:
Salaries and employee
benefits 2,872 1,808 9,882 7,488
Occupancy and equipment 621 375 2,374 1,410
Data processing 395 306 1,734 1,353
Professional fees 397 182 1,021 374
Contribution to Benjamin Franklin
Bank Charitable Foundation - - 4,000 -
Amortization of core deposit
intangible 356 45 1,400 181
Other general and
administrative 691 514 2,865 1,880
---------- ------- -------- --------
Total operating
expenses 5,332 3,230 23,276 12,686
---------- ------- -------- --------
Income before income taxes 2,077 642 1,543 2,581
Provision for income taxes 764 266 1,112 892
---------- ------- -------- --------
Net income $1,313 $376 $431 $1,689
========== ======= ======== ========
Weighted-average shares
outstanding:
Basic 8,025,607 n/a n/a n/a
Diluted 8,025,607 n/a n/a n/a
Earnings per share
Basic $0.16 n/a n/a n/a
Diluted $0.16 n/a n/a n/a
BENJAMIN FRANKLIN BANCORP, INC. AND SUBSIDIARIES
SELECTED CONSOLIDATED FINANCIAL HIGHLIGHTS AND OTHER DATA
(Dollars in thousands except share and per share data)
At or For
the Three Months For the Year
Ended Dec. 31, Ended Dec. 31,
--------------------------------------
2005 2004 2005 2004
---------- --------- -------- --------
(Unaudited) (Unaudited)
Financial Highlights:
Net interest income $6,011 $3,565 $22,018 $13,763
Net income $1,313 $376 $431 $1,689
Shares outstanding - end of
period 8,026,644 n/a n/a n/a
Weighted average shares
outstanding :
Basic 8,025,607 n/a n/a n/a
Diluted 8,025,607 n/a n/a n/a
Earnings per share:
Basic $0.16 n/a n/a n/a
Diluted $0.16 n/a n/a n/a
Shareholders' equity - end of
period $108,112 $31,328
Book value per share - end of
period $13.47 n/a
Tangible book value per share -
end of period $8.75 n/a
Ratios and Other Information:
Return on average assets 0.60% 0.29% 0.06% 0.34%
Return on average equity 4.85% 4.83% 0.49% 5.59%
Net interest rate spread (1) 2.72% 2.56% 2.79% 2.63%
Net interest margin (2) 3.17% 2.93% 3.21% 3.00%
Efficiency ratio (3) 67.22% 78.84% 67.79% 79.19%
Operating expense to average
total assets 2.46% 2.49% 2.99% 2.58%
Average interest-earning assets
to average interest-bearing
liabilities 119.96% 122.47% 121.90% 123.91%
At period end:
Non-performing assets to total
assets 0.05% 0.07%
Non-performing loans to total
loans 0.08% 0.09%
Allowance for loan losses to
non-performing loans 1215.35% 941.25%
Allowance for loan losses to
total loans 0.93% 0.82%
Equity to total assets 12.47% 6.05%
Tier 1 leverage capital ratio 9.57% 7.34%
Total risk-based capital ratio 14.89% 12.48%
Number of full service offices 9 6
(1) The net interest rate spread represents the difference between the
weighted-average yield on interest-earning assets and the
weighted-average cost of interest-bearing liabilities for the
period.
(2) The net interest margin represents net interest income as a
percent of average interest-earning assets for the period.
(3) The efficiency ratio represents operating expense minus expenses
related to the amortization of intangible assets and the
contribution to the Benjamin Franklin Bank Charitable Foundation
divided by the sum of net interest income (before the loan loss
provision) plus other income (excluding net gains (losses) on sale
of bank assets).
BENJAMIN FRANKLIN BANCORP, INC AND SUBSIDIARIES
ANALYSIS OF NET INTEREST INCOME
(Dollars in thousands)
Three Months Ended December 31,
---------------------------- ----------------------------
2005 2004
---------------------------- ----------------------------
Average Average
Outstanding Yield/ Outstanding Yield/
Balance Interest Rate(1) Balance Interest Rate(1)
----------- -------- ------- ----------- -------- -------
Interest-
earning
assets:
Loans $604,934 $8,753 5.77% $377,673 $4,753 5.01%
Securities 130,977 1,283 3.89% 98,859 787 3.17%
Short-term
investments 17,115 171 3.97% 7,365 32 1.73%
----------- -------- ----------- --------
Total
interest-
earning
assets 753,026 10,207 5.40% 483,897 5,572 4.58%
Non-interest-
earning
assets 112,733 34,025
----------- -----------
Total
assets $865,759 $517,922
=========== ===========
Interest-
bearing
liabilities:
Savings
deposits $100,644 127 0.50% $97,504 122 0.50%
Money market 101,319 453 1.78% 57,616 203 1.40%
NOW accounts 32,218 11 0.14% 22,771 9 0.16%
Certificates
of deposits 255,194 2,111 3.28% 135,648 811 2.38%
----------- -------- ----------- --------
Total
deposits 489,375 2,702 2.19% 313,539 1,145 1.45%
Borrowings 138,331 1,494 4.42% 81,571 862 4.21%
----------- -------- ----------- --------
Total
interest-
bearing
liabilities 627,706 4,196 2.68% 395,110 2,007 2.02%
Non-interest
bearing
liabilities 130,595 91,833
----------- -----------
Total
liabilities 758,301 486,943
Equity 107,458 30,979
----------- -----------
Total
liabilities
and
equity $865,759 $517,922
=========== ===========
Net interest
income $6,011 $3,565
======== ========
Net interest
rate spread (2) 2.72% 2.56%
Net interest-
earning
assets (3) $125,320 $88,787
=========== ===========
Net interest
margin (4) 3.17% 2.93%
Average interest-
earning assets
to interest-
bearing
liabilities 119.96% 122.47%
(1) Yields and rates for the three months ended December 31, 2005 and
2004 are annualized.
(2) Net interest rate spread represents the difference between the
weighted-average yield on interest-earning assets and the
weighted-average cost of interest-bearing liabilities.
(3) Net interest-earning assets represents total interest-earning
assets less total interest-bearing liabilities.
(4) Net interest margin represents net interest income as a percent of
average interest-earning assets.
BENJAMIN FRANKLIN BANCORP, INC AND SUBSIDIARIES
ANALYSIS OF NET INTEREST INCOME
(Dollars in thousands)
Year Ended December 31,
---------------------------------------------------------
2005 2004
---------------------------- ----------------------------
Average Average
Outstanding Yield/ Outstanding Yield/
Balance Interest Rate(1) Balance Interest Rate(1)
------------ -------- ------- ----------- -------- -------
Interest-
earning
assets:
Loans $547,542 $30,409 5.56% $338,198 $17,320 5.12%
Securities 120,007 4,211 3.51% 107,122 3,336 3.11%
Short-term
investments 18,701 515 2.75% 13,367 139 1.04%
----------- -------- ----------- --------
Total
interest-
earning
assets 686,250 35,135 5.13% 458,687 20,795 4.53%
Non-interest-
earning
assets 91,508 33,838
----------- -----------
Total
assets $777,758 $492,525
=========== ===========
Interest-
bearing
liabilities:
Savings
deposits $102,781 518 0.50% $98,753 491 0.50%
Money market 95,638 1,553 1.62% 53,246 535 1.00%
NOW accounts 31,742 63 0.20% 23,657 36 0.15%
Certificates
of deposits 222,500 6,366 2.86% 134,034 3,304 2.47%
----------- -------- ----------- --------
Total
deposits 452,661 8,500 1.88% 309,690 4,366 1.41%
Borrowings 110,281 4,617 4.23% 60,497 2,666 4.41%
----------- -------- ----------- --------
Total
interest-
bearing
liabilities 562,942 13,117 2.34% 370,187 7,032 1.90%
Non-interest
bearing
liabilities 126,455 92,124
----------- -----------
Total
liabilities 689,397 462,311
Equity 88,361 30,214
----------- -----------
Total
liabilities
and
equity $777,758 $492,525
=========== ===========
Net interest
income $22,018 $13,763
======== ========
Net interest
rate spread (1) 2.79% 2.63%
Net interest-
earning
assets (2) $123,308 $88,500
=========== ===========
Net interest
margin (3) 3.21% 3.00%
Average interest-
earning
assets to
interest-
bearing
liabilities 121.90% 123.91%
(1) Net interest rate spread represents the difference between the
weighted-average yield on interest-earning assets and the
weighted-average cost of interest-bearing liabilities.
(2) Net interest-earning assets represents total interest-earning
assets less total interest-bearing liabilities.
(3) Net interest margin represents net interest income as a percent of
average interest-earning assets.
Reconciliation of Non-GAAP Financial Measures This press release contains financial information determined by methods other than in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with accounting principles generally accepted in the United States of America UNITED STATES OF AMERICA. The name of this country. The United States, now thirty-one in number, are Alabama, Arkansas, Connecticut, Delaware, Florida, Georgia, Illinois, Indiana, Iowa, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Mississippi, Missouri, New Hampshire, ("GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). "). The Company's management uses these non-GAAP measures in its analysis of the Company's performance. These measures typically adjust GAAP performance measures to exclude significant gains or losses that are expected to be non-recurring and to exclude the effects of amortization of intangible assets Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. (in the case of the efficiency ratio). Because these items and their impact on the Company's performance are difficult to predict, management believes that presentations of financial measures excluding the impact of these items provide useful supplemental information that is essential to a proper understanding of the operating results of the Company's core businesses. These disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies.
Three Three Twelve Twelve
months months months months
ended ended ended ended
Dec. 31, Dec. 31, Dec. 31, Dec. 31,
2005 2004 2005 2004
--------- --------- --------- ---------
Net Income (GAAP) $1,313 $376 $431 $1,689
Add contribution to the
Benjamin Franklin Bank
Charitable Foundation (after
tax) - - 2,640 -
Add loss on sale/write-down of
bank-owned land, net (after
tax) - - 1,020 -
--------- --------- --------- ---------
Net Income Excluding Non-
recurring Charges $1,313 $376 $4,091 $1,689
========= ========= ========= =========
Efficiency Ratio (GAAP) 71.6 % 80.2 % 91.3 % 79.8 %
Effects of amortization of
intangible assets (4.8)% (1.1)% (5.3)% (1.1)%
Effects of contribution to the
Benjamin Franklin Bank
Charitable Foundation - - (15.1)% -
Effects of net gain (loss) on
sale of bank assets .4 % (.3) % (3.1)% .5 %
--------- --------- --------- ---------
67.2 % 78.8 % 67.8 % 79.2 %
========= ========= ========= =========
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