| BSB Bancorp posted a 51.2 percent year-over-year increase in net income in the fourth quarter and a 61 percent increase for net income for the entire year.
The holding company for Belmont Savings Bank recorded $2.07 million in net income for the quarter and $4.29 million for the year ended Dec. 31.
“It really reflects a strong local economy, both in terms of business growth and commercial real estate activity. We’re in probably the best economic environment in the country right now,” said President and CEO Robert M. Mahoney. “We’re seeing all kinds of construction – residential, office, retail. When you have growth in population the way we do and strong employment, people have to live someplace, shop someplace and work someplace, so that all equals real estate.”
Net interest and dividend income totaled $10.6 million before provision for loan losses, representing a 24.6 percent increase over the prior year’s quarter. The company beefed up its provision for loan losses 56.8 percent year-over-year to $886,000 to keep up with loan growth.
Total assets increased $387.4 million, or 27 percent, to $1.8 billion at year-end 2015. Net loans increased $355.6 million, or 30.1 percent, year-over-year. Residential one- to four-family real estate loans, commercial real estate loans, construction loans, home equity lines of credit and commercial loans increased by $258.85 million, $54.21 million, $29.33 million, $28.41 million and $14.03 million, respectively. A $28 million decline in indirect auto loans partially offset those increases.
That asset growth was funded largely by growth in deposits, which increased nearly $285 million, or 29 percent, to $1.27 billion at Dec. 31. Mahoney attributed much of that growth to the bank’s strong sales culture and the strong local economy. In a statement accompanying the company’s earnings statement, COO Hal R. Tovin also noted that much of the deposit growth came from the bank’s business, municipal and commercial real estate business lines.
BSB Bancorp’s allowance for loan losses totaled $11.24 million and represented 0.73 percent of total loans, compared with $8.88 million and 0.75 percent in the year ago period. For the year ended Dec. 31, the company recorded net recoveries of $42,000, compared with net charge offs of $629,000 in 2014. Non-performing assets totaled $3.64 million, or 0.20 percent of total assets, at Dec. 31, compared with $2.82 million or 0.20 percent in 2014.
Commenting on the Greater Boston area’s commercial real estate scene, Mahoney told Banker & Tradesman, “There’s no question that it’s warm and that it has been warming for several years. We really didn’t feel much of the ’08 recession the way the rest of the country did. You could almost say that New England has been in recovery mode for 15 years. When that happens, when you have a long steady improvement in valuations, sometimes lenders get a little aggressive.”
But he added, “I don’t think there’s anything very significant going on right now. I think people are still playing by the rules, but you can’t help but see some unwise optimism right now because the corn doesn’t grow to the sky.”
