Double-digit loan growth and its mutual-to-stock conversion last year boosted the bottom line at Blue Hills Bancorp in the second quarter.
The parent company of Blue Hills Bank posted net income of $1.7 million for the quarter ended June 30, compared with $1.3 million in the first quarter and $761,000 in the year-ago quarter. For the six months ended June 30, net income totaled a little over $3 million, compared with $31,000 during the same period last year.
“With loan and customer deposit growth of 27 percent and 9 percent, respectively, combined with solid asset quality and cost control, we are quite happy with the progress made during our first year as a public company,” President and CEO William Parent said in a statement. “Our core net interest margin has grown from a year ago, while our balance sheet has been properly positioned for the coming rising rate environment. We also continue to be highly focused on the issue of effective capital deployment and are pleased to announce today our first share repurchase program and quarterly cash dividend.”
Total assets increased $21 million, or 1 percent, on a year-over-year basis to $1.8 billion. In a statement, the company said that its balance sheet for the second quarter last year was impacted by the closing of the subscription offering related to its mutual-to-stock conversion. The offering was oversubscribed and the bank received orders in excess of the adjusted maximum of its offering range, and that money was held in escrow as of June 30, 2014. Excluding the impact of those funds held in escrow, total assets were up around $300 million, compared with last year’s second quarter.
The bank chalked up most of the increase in total assets to loan growth. Compared with the year-ago period, commercial real estate loans increased $113 million, or 34 percent; residential mortgages increased $102 million, or 25 percent; commercial business loans increased $31 million, or 26 percent and construction loans increased $15 million, or 34 percent.
Deposits increased $123 million, or 11 percent, from the year-ago period. The bank’s new Milton branch, opened in October of last year, contributed $35 million to that figure.
Net interest income increased $1.2 million, or 12 percent, to WHAT from last year, while the net interest margin declined four basis points to 2.65 percent.
Noninterest income increased year-over-year by $167,000, or 7 percent, to $2.5 million in the second quarter.
Noninterest expenses totaled $10.7 million in the second quarter, which remained flat compared with the year-ago quarter.
The provision for loan losses totaled $544,000 in the second quarter of 2015 compared with $279,000 in the first quarter and $959,000 in the year-ago quarter. The company recorded net loan charge-offs of $5,000 in the second quarter, compared with $14,000 in the first quarter and $13,000 in the year-ago quarter.
The allowance for loan losses as a percentage of total loans was 1.08 percent at June 30, compared with 1.12 percent at March 31 and 1.13 percent last year.
Nonperforming assets totaled $4.9 million at June 30, compared with $4.8 million at March 31 and $4.5 million last year. Nonperforming assets as a percentage of total assets were 0.27 percent at June 30 and March 31, compared with 0.25 percent last year.
The company also announced that its board of directors approved a stock repurchase program, to begin immediately, under which the company would buy back 1.4 million, or about 5 percent, of its shares. Its board of directors also declared a regular quarterly cash dividend of 2 cents per share, to be paid Aug. 20 to shareholders of record on Aug. 6.
