Exhibit 99.1
Press Release
For Immediate Release
Contact: Claire S. Bean, Executive Vice President and Chief Financial Officer
1-508-528-7000 x363
Benjamin Franklin Bancorp Reports Earnings for First Quarter of 2005
FRANKLIN, MASSACHUSETTS (April 20, 2005): Benjamin Franklin Bancorp, Inc. (the “Company” or “Benjamin Franklin”) (Nasdaq: BFBC), the bank holding company for Benjamin Franklin Bank, today reported net income of $331,000 for the quarter ended March 31, 2005. The quarter concluded prior to the completion of the Company’s stock offering and acquisition of Chart Bank, and does not reflect the effects of those transactions.
In the quarter ended March 31, 2005, total assets grew to $582.8 million, an increase of $111.3 million or 23.6% when compared to March 31, 2004. That growth was led by growth in the loan portfolio, which has increased by $91.8 million over the past year. Increases were achieved in nearly all loan categories including residential mortgage loans (up $61.6 million) and commercial real estate loans (up $23.7 million). The net balance of investment securities and short-term investments grew by $15.3 million year over year, consistent with the overall growth in the Company’s balance sheet. Funding the growth in loans and investments were increases in deposits, which rose by 5.9% year over year, and increases in borrowed funds and other liabilities, which have risen by 180.0% since March 31, 2004.
The decline in earnings to $331,000 from $454,000 in the year-earlier quarter was primarily the result of lower levels of fee income and higher operating expenses, offset in part by an increase in net interest income. Fee income declined by $201,000 to $493,000 for the quarter, the result of lower gains and fees earned on sales of fixed rate residential mortgage loans, and reduced service fee income earned on deposit accounts. Operating expenses rose by $337,000 to $3.5 million for the quarter. Nearly half of the increase was the result of increases in staffing levels over the past year, as the Company moved to convert to a stock institution, accomplish the acquisition of Chart Bank and make the staffing investments necessary to continue the growth of its loan portfolio.
Net interest income rose by $375,000 to $3.6 million for the first quarter of 2005 when compared to the year-earlier quarter. The increase in net interest income that resulted from the growth in interest earning assets and interest-bearing liabilities was offset in part by a narrowing of the Company’s net interest margin, which declined to 2.97% in the first quarter of 2005 from 3.06% in the year-earlier quarter. The compression in the margin was primarily the result of the rise in short and intermediate term market interest rates over the past year, coupled with the liability-sensitivity of the Company’s balance sheet for most of that period.
Benjamin Franklin completed its mutual-to-stock conversion and related stock offering with the issuance of 5,977,419 shares (including 400,000 shares issued to the Benjamin Franklin Bank Charitable Foundation) on April 4, 2005. An additional 2,511,479 shares were issued in connection with the acquisition of Chart Bank, which was consummated immediately following the stock conversion. The cash portion of the consideration paid to Chart Bank shareholders totaled $21,392,960 (net of amounts received by Chart Bank upon the exercise of stock options prior to the merger). The Company’s stock began trading on April 5, 2005, on the Nasdaq National Market, under the symbol “BFBC”. Total shares outstanding at present are 8,488,898.
Thomas R. Venables, President and Chief Executive Officer, commented that “We have built a dedicated and energetic team here at Benjamin Franklin, one poised to tackle the new opportunities and challenges that will come with being public and acquiring the operations of Chart Bank. We appreciate the support expressed by our depositors in the Company’s public offering, and we will work very hard to enhance shareholder value for them as we move forward.”
Certain statements herein constitute “forward-looking statements” 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 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 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, MHC AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars in Thousands)
ASSETS
March 31, | December 31, | March 31, | ||||||||||
2005 | 2004 | 2004 | ||||||||||
(Unaudited) | (Unaudited) | |||||||||||
Cash and due from banks | $ | 9,394 | $ | 8,691 | $ | 7,884 | ||||||
Short-term investments | 59,618 | 5,513 | 24,590 | |||||||||
Total cash and cash equivalents | 69,012 | 14,204 | 32,474 | |||||||||
Securities available for sale, at fair value | 84,679 | 86,070 | 104,980 | |||||||||
Securities held to maturity, at amortized cost | 187 | 217 | 353 | |||||||||
Restricted equity securities, at cost | 6,975 | 6,975 | 6,222 | |||||||||
Total securities | 91,841 | 93,262 | 111,555 | |||||||||
Loans: | ||||||||||||
Residential real estate mortgage loans | 240,511 | 241,090 | 178,896 | |||||||||
Commercial real estate | 98,649 | 85,911 | 74,912 | |||||||||
Construction | 27,109 | 28,651 | 25,402 | |||||||||
Commercial business | 4,649 | 4,375 | 5,277 | |||||||||
Consumer | 25,632 | 25,370 | 20,643 | |||||||||
Net deferred loan costs | 1,169 | 1,148 | 813 | |||||||||
Total Loans | 397,719 | 386,545 | 305,943 | |||||||||
Allowance for loan losses | (3,351 | ) | (3,172 | ) | (2,704 | ) | ||||||
Loans, net | 394,368 | 383,373 | 303,239 | |||||||||
Premises and equipment, net | 11,194 | 11,147 | 11,303 | |||||||||
Accrued interest receivable | 1,592 | 1,490 | 1,334 | |||||||||
Goodwill | 4,248 | 4,248 | 4,248 | |||||||||
Bank-owned life insurance | 7,244 | 7,182 | 5,591 | |||||||||
Other assets | 3,292 | 2,487 | 1,793 | |||||||||
$ | 582,791 | $ | 517,393 | $ | 471,537 | |||||||
LIABILITIES AND RETAINED EARNINGS | ||||||||||||
Deposits: | ||||||||||||
Regular savings | $ | 96,438 | $ | 95,875 | $ | 98,215 | ||||||
Money market accounts | 56,835 | 53,167 | 47,288 | |||||||||
Now accounts | 23,240 | 22,460 | 27,777 | |||||||||
Demand deposit accounts | 90,577 | 87,776 | 84,414 | |||||||||
Time deposit accounts | 147,643 | 137,221 | 134,088 | |||||||||
Total Deposits | 414,733 | 396,499 | 391,782 | |||||||||
Short-term borrowings | — | 4,250 | — | |||||||||
Long-term debt | 81,000 | 81,000 | 45,000 | |||||||||
Other liabilities | 56,258 | 4,316 | 4,018 | |||||||||
Total liabilities | 551,991 | 486,065 | 440,800 | |||||||||
Retained earnings | 33,327 | 32,997 | 31,762 | |||||||||
Accumulated other comprehensive loss | (2,527 | ) | (1,669 | ) | (1,025 | ) | ||||||
Total retained earnings | 30,800 | 31,328 | 30,737 | |||||||||
$ | 582,791 | $ | 517,393 | $ | 471,537 | |||||||
BENJAMIN FRANKLIN BANCORP, MHC AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in Thousands)
Quarter Ended March 31, | ||||||||
2005 | 2004 | |||||||
(Unaudited) | ||||||||
Interest and dividend income | $ | 5,714 | $ | 4,861 | ||||
Interest expense | 2,085 | 1,607 | ||||||
Net interest income | 3,629 | 3,254 | ||||||
Provision for loan losses | 168 | 170 | ||||||
Net interest income, after provision for loan losses | 3,461 | 3,084 | ||||||
Other income (charges): | ||||||||
Deposit service fees | 207 | 254 | ||||||
Loan servicing fees | 72 | 145 | ||||||
Gain on sale of loans, net | 15 | 66 | ||||||
Gain (loss) on sales of securities, net | 0 | 9 | ||||||
Income from bank-owned life insurance | 59 | 48 | ||||||
Miscellaneous | 140 | 172 | ||||||
Total other income | 493 | 694 | ||||||
Operating expenses: | ||||||||
Salaries and employee benefits | 2,014 | 1,851 | ||||||
Occupancy and equipment | 440 | 379 | ||||||
Data processing | 337 | 336 | ||||||
Professional fees | 129 | 65 | ||||||
Other general and administrative | 544 | 496 | ||||||
Total operating expenses | 3,464 | 3,127 | ||||||
Income before income taxes | 490 | 650 | ||||||
Provision for income taxes | 159 | 196 | ||||||
Net income | $ | 331 | $ | 454 | ||||
BENJAMIN FRANKLIN BANCORP, MHC. AND SUBSIDIARIES
Financial Ratios
For the Quarters | ||||||||
Ended March 31, | ||||||||
2005 | 2004 | |||||||
Selected Financial Ratios and Other Data: | ||||||||
Performance Ratios: | ||||||||
Return on assets (ratio of net income to average total assets) | 0.25 | % | 0.39 | % | ||||
Return on equity (ratio of net income to average equity) | 4.25 | % | 6.08 | % | ||||
Average interest rate spread(1) | 2.55 | % | 2.70 | % | ||||
Net interest margin(2) | 2.97 | % | 3.06 | % | ||||
Efficiency ratio(3) | 83.24 | % | 79.76 | % | ||||
Non-interest expense to average total assets | 2.64 | % | 2.72 | % | ||||
Average interest-earning assets to average interest-bearing liabilities | 124.68 | % | 124.01 | % | ||||
Asset Quality Ratios: | ||||||||
Non-performing assets to total assets | 0.06 | % | 0.09 | % | ||||
Non-performing loans to total loans | 0.09 | % | 0.14 | % | ||||
Allowance for loan losses to non-performing loans | 972.08 | % | 627.47 | % | ||||
Allowance for loan losses to total loans | 0.85 | % | 0.89 | % | ||||
Capital Ratios: | ||||||||
Equity to total assets at end of period | 5.28 | % | 6.52 | % | ||||
Average equity to average assets | 5.95 | % | 6.49 | % | ||||
Risk-based capital ratio (bank only) | 11.51 | % | 13.15 | % | ||||
Other Data: | ||||||||
Number of full service offices | 6 | 6 |
(1) | The average 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 on average interest-earning assets for the period. | |
(3) | The efficiency ratio represents non-interest expense minus expenses related to the amortization of intangible assets divided by the sum of net interest income (before the loan loss provision) plus non-interest income (excluding net gains (losses) on sale of bank assets). |
BENJAMIN FRANKLIN BANCORP, MHC AND SUBSIDIARIES
Analysis of Net Interest Income
Three Months Ended March 31, 2005 | ||||||||||||
Average | ||||||||||||
Outstanding | ||||||||||||
Balance | Interest | Yield/Rate(1) | ||||||||||
(Dollars in thousands) | ||||||||||||
Interest-earning assets: | ||||||||||||
Loans | $ | 388,346 | $ | 4,892 | 5.11 | % | ||||||
Investment securities | 91,636 | 729 | 3.23 | % | ||||||||
Short-term investments | 16,115 | 94 | 2.36 | % | ||||||||
Total interest-earning assets | 496,097 | 5,714 | 4.67 | % | ||||||||
Non-interest-earning assets | 35,717 | |||||||||||
Total assets | $ | 531,814 | ||||||||||
Interest-bearing liabilities: | ||||||||||||
Savings deposits | $ | 95,036 | 116 | 0.50 | % | |||||||
Money market | $ | 57,267 | 210 | 1.49 | % | |||||||
NOW accounts | 22,081 | 9 | 0.16 | % | ||||||||
Certificates of deposits | 142,409 | 897 | 2.55 | % | ||||||||
Total deposits | 316,793 | 1,232 | 1.58 | % | ||||||||
Short-term borrowings | 112 | 1 | 2.59 | % | ||||||||
Long-term debt | 81,000 | 853 | 4.27 | % | ||||||||
Total interest-bearing liabilities | 397,905 | 2,085 | 2.13 | % | ||||||||
Non-interest bearing liabilities | 102,270 | |||||||||||
Total liabilities | 500,175 | |||||||||||
Equity | 31,639 | |||||||||||
Total liabilities and equity | $ | 531,814 | ||||||||||
Net interest income | $ | 3,629 | ||||||||||
Net interest rate spread(2) | 2.55 | % | ||||||||||
Net interest-earning assets(3) | $ | 98,192 | ||||||||||
Net interest margin(4) | 2.97 | % | ||||||||||
Average interest-earning assets to interest-bearing liabilities | 124.68 | % |
BENJAMIN FRANKLIN BANCORP, MHC AND SUBSIDIARIES
Analysis of Net Interest Income
Three Months Ended March 31, 2004 | ||||||||||||
Average | ||||||||||||
Outstanding | ||||||||||||
Balance | Interest | Yield/Rate(1) | ||||||||||
(Dollars in thousands) | ||||||||||||
Interest-earning assets: | ||||||||||||
Loans | $ | 293,997 | $ | 3,916 | 5.36 | % | ||||||
Investment securities | 110,710 | 895 | 3.25 | % | ||||||||
Short-term investments | 22,486 | 50 | 0.89 | % | ||||||||
Total interest-earning assets | 427,192 | 4,861 | 4.58 | % | ||||||||
Non-interest-earning assets | 35,259 | |||||||||||
Total assets | $ | 462,451 | ||||||||||
Interest-bearing liabilities: | ||||||||||||
Savings deposits | $ | 96,698 | 119 | 0.50 | % | |||||||
Money market | $ | 51,227 | 103 | 0.81 | % | |||||||
NOW accounts | 23,327 | 9 | 0.15 | % | ||||||||
Certificates of deposits | 128,230 | 811 | 2.54 | % | ||||||||
Total deposits | 299,481 | 1,042 | 1.40 | % | ||||||||
Short-term borrowings | 0 | 0 | 0.00 | % | ||||||||
Long-term debt | 45,000 | 565 | 5.05 | % | ||||||||
Total interest-bearing liabilities | 344,481 | 1,607 | 1.88 | % | ||||||||
Non-interest bearing liabilities | 87,956 | |||||||||||
Total liabilities | 432,438 | |||||||||||
Equity | 30,014 | |||||||||||
Total liabilities and equity | $ | 462,451 | ||||||||||
Net interest income | $ | 3,254 | ||||||||||
Net interest rate spread(2) | 2.70 | % | ||||||||||
Net interest-earning assets(3) | $ | 82,711 | ||||||||||
Net interest margin(4) | 3.06 | % | ||||||||||
Average interest-earning assets to interest-bearing liabilities | 124.01 | % |
(1) | Yields and rates for the three months ended March 31, 2005 and 2004 are annualized. | |
(2) | Net interest rate spread represents the difference between the yield on average interest-earning assets and the cost of average 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 divided by average total interest-earning assets. |