| BSB Bancorp posted strong earnings driven by core deposits in the fourth quarter last year, representing the 14th consecutive quarter of growth for Belmont Savings Bank.
Net income at Belmont Savings Bank’s holding company totaled $3.31 million in the quarter ended Dec. 31 and $11.98 million for the year, representing year-over-year growth of 60 percent and 73.3 percent, respectively.
President and CEO Robert M. Mahoney said that the bank had focused on a few key targets for generating deposits, like municipalities and nonprofits, though demand was strong across all the bank’s lines of business.
“It’s a good time to be a small bank and people gravitate toward community banks right now,” he said today.
Before provision for loan losses, net interest and dividend income increased 16.4 percent year-over-year to $12.37 million in the fourth quarter. Provision for loan losses declined 32.2 percent to $601,000, resulting in a 20.8 percent increase in net interest and dividend income after provision for loan losses.
Noninterest income declined 8.5 percent to $703,000, largely the result of a decrease in auto loan servicing fees and other auto loan related income.
Total assets increased 19.1 percent year-over-year to $2.16 billion at Dec. 31. Net loans increased 21.6 percent, or $331.08 million, year-over-year. Residential 1-4 family real estate loans, commercial real estate loans, construction loans, commercial loans and home equity lines of credit increased by $287.91 million, $42.45 million, $28.28 million, $10.21 million and $7.42 million, respectively.
Deposits totaled $1.47 billion, representing growth of $199.90 million, or 15.7 percent, from 2015. Core deposits, which the bank considers to include all deposits other than CD’s and brokered CD’s, increased $122.74 million to $1.13 billion at year-end 2016.
Commenting on the market, Mahoney told Banker & Tradesman, “It’s healthy demand right now. I don’t think we’re building more than we can occupy. Vacancy rates are holding. Rents are holding. Purchase prices are firming. We don’t have a glut. And I think we’ve got to be cautious about that.”
Mahoney said he expected the refinance market to cool off as interest rates continue to rise and anticipated some adjustment in the market, though he hoped the Greater Boston area’s strong economy would insulate it from whatever surprises the future may hold.
“We’re going to be cautious this year,” he said. “We just don’t want to get too far ahead of ourselves. We do business with people we know and we’re going to continue that strategy.”
