Blue Hills Bancorp posted increases in its loan portfolio during the second quarter this year, even as costs associated with its mutual-to-stock conversion and its acquisition of Nantucket Bank dinged its bottom line.
The parent company of Blue Hills Bank posted net income of $429,000 for the quarter ended June 30, compared with a net loss of $399,000 for the first quarter this year and net income of $1.1 million for the second quarter of 2013.
In a statement, President and CEO William Parent highlighted investments in the company’s management team and strategic initiatives, like the establishment of residential, commercial business and commercial real estate lending platforms, and improved online banking capabilities.
"Our top priorities going forward will be to prudently use the additional capital received from the stock offering in a way that is beneficial to all our stakeholders and continue to leverage the investment spending we have made over the past few years to grow revenue," he said.
Total assets at June 30 stood at $1.8 billion compared with $1.5 billion in the first quarter. The subscription offering that closed in June related to the company’s mutual-to-stock conversion was oversubscribed with the bank receiving orders in excess of the adjusted maximum of the offering range ($277.7 million). A portion of this money was held in escrow and accounts for the bulk of the increase in total assets from the end of the first quarter.
Excluding the funds held in escrow related to the conversion, total assets increased approximately $300 million from the year-ago period. Loans grew $427 million, or 74 percent, and the January 2014 Nantucket Bank acquisition added approximately $100 million of mainly commercial and home equity loans. A $93 million decline in available-for-sale securities partially offset that loan growth.
Noninterest expense totaled $10.7 million in the second quarter, compared with $10.3 million in the first quarter. The second quarter included $330,000 related to costs associated with the company’s mutual-to-stock conversion and $173,000 related to one-time costs associated with the Nantucket Bank acquisition, compared with $488,000 and $775,000, respectively, in the first quarter. Excluding these items, noninterest expense increased $1.2 million from the first quarter, which the company attributed to higher levels of advertising and professional fees, as well as a full quarter’s impact of Nantucket’s operating expenses in the second quarter following the January 2014 acquisition.
Compared with the year-ago period, deposits increased $284 million, or 33 percent, primarily due to $275 million in deposits assumed in the Nantucket acquisition.
In the statement, released late on Friday, the company said it expects the conversion to be completed today and for the stock to begin trading on Tuesday.
