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EXHIBIT 99.0
FRIDAY January 19, 4:11 PM EASTER TIME
PRESS RELEASE
SOURCE: BOSTONFED BANCORP, INC.
BOSTONFED BANCORP, INC. ANNOUNCES RECORD 4TH QUARTER RESULTS AND PAYMENT OF $.13
PER SHARE DIVIDEND.
BURLINGTON, Mass., Jan. 19/PRNewswire/ -- BostonFed Bancorp, Inc. (AMEX: BFD -
news; the "Company"), the parent of Boston Federal Savings Bank ("BFS"), a
federally-chartered stock savings bank, and Broadway National Bank ("BNB"), a
national chartered commercial bank, announced record fourth quarter net income
of $2,319,000, or $.51 basic and $.48 diluted earnings per share, compared to
net income of $2,275,000, or $.47 basic and $.46 diluted earnings per share for
the fourth quarter of 1999. The current quarter's net income includes the
results of Diversified Ventures, Inc., d/b/a Forward Financial Company and the
results of Ellsmere Insurance Agency, Inc., (collectively "Forward Financial"),
which the Company acquired on December 7, 1999, using the purchase method of
accounting. For the year ended December 31, 2000, earnings amounted to a record
$9.7 million, or $2.07 basic and $2.01 diluted earnings per share, compared to
$8.6 million, or $1.78 basic and $1.71 diluted earnings per share for the year
ended December 31, 1999. Diluted earnings per share improved 17.5%, compared to
1999's diluted earnings per share. The Company's return on average stockholders'
equity was 10.7% for the year ended December 31, 2000, compared to 10.0% for the
year ended December 31, 1999. Please see "Cash Earnings Summary" for a
discussion of cash earnings during the above referenced periods.
Also, the Company announces the declaration of the payment of a quarterly cash
dividend amounting to $.13 per share. The dividend is payable on or about
February 14, 2001, to shareholders of record at the close of business on January
31, 2001.
During the fourth quarter of 2000, the Company completed a portion of its
seventh 5% stock repurchase program, acquiring 107,200 shares at an average
price of $19.26 per share. The Company had 33,399 shares remaining to be
repurchased under this program and had 4,648,481 shares outstanding as of
December 31, 2000. To date, the Company has repurchased a total of 29.6% of its
outstanding shares.
Net interest income during the fourth quarter of 2000 was $10.2 million,
compared to $8.6 million for the fourth quarter of 1999. For the year ended
December 31, 2000, net interest income was $37.3 million compared to $33.5
million for the same period last year. The improvement in net interest income in
both periods was the result of further balance sheet growth and improved
interest rate spreads and margins resulting from the growth in higher yielding
loans, including equity lines of credit, business loans, commercial real estate
and construction loan portfolios. The net interest margin, at 3.37% for the
three months ended December 31, 2000 was 31 basis points higher than last
quarter and 40 basis points higher than last year's comparable period. A portion
of the margin improvement was due to the issuance of $32.0 million of trust
preferred securities during the second quarter of 2000 as the income from the
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reinvested proceeds is included in the margin calculation, but the trust
preferred expense is included in other operating expenses, which are not
included in the margin calculation. The net interest spread, which is only
minimally impacted by the trust preferred securities, improved by 21 basis
points in the current quarter, compared to the quarter ended September 30, 2000,
and 29 basis points compared to the quarter ended December 31, 1999.
The provision for loan losses was $250,000 and $1.0 million, respectively for
the quarter and year ended December 31, 2000, compared to $376,000 and $1.6
million for the comparable periods last year. The decrease in the provision was
due to the continued low level of non-performing loans and improved coverage
ratio of allowance for loan losses as a percent of loans. The allowance for loan
losses was $11.4 million at December 31, 2000, compared to $10.7 million at
December 31, 1999. These amounts represent 1,190% of non-performing loans and
1.07% as a percent of loans at December 31, 2000, compared to 1,428% and 1.01%,
respectively, at December 31, 1999. The Company's non-performing assets totaled
$1.1 million, or .08% of assets at December 31, 2000, compared to $1.1 million,
or .09% of assets at December 31, 1999.
Total non-interest income increased to $2.8 million and $14.4 million,
respectively for the three and twelve months ended December 31, 2000, compared
to $2.0 million and $6.9 million, respectively for the three and twelve months
ended December 31, 1999. Gain on sale of loans was the primary contributor to
the increases. The current quarter's gain on sale of loans amounted to $1.4
million compared to $780,000 for the comparable quarter last year. The gain on
sale of loans was higher due to the inclusion of $1.1 million of gain on sale of
loans by Forward Financial during the current quarter, compared to $572,000 for
the fourth quarter of 1999 as Forward Financial was acquired on December 7,
1999. For the year ended December 31, 2000, gain on sale of loans amounted to
$9.0 million, compared to $3.0 million for the year ended December 31, 1999. The
vast majority of the increase is due to the inclusion of $7.8 million of Forward
Financial's gain on sale of loans. Income from bank owned life insurance
("BOLI") was $315,000 and $1.3 million for the three and twelve months ended
December 31, 2000, respectively. The BOLI was purchased in July 1999 and
provided income of $313,000 and $556,000 for the three and twelve months ended
December 31, 1999, respectively. Other non-interest income increased to $395,000
for the quarter ended December 31, 2000 from $287,000 for the prior year
comparable quarter due to increases in debit card fees, business loan fees and
the inclusion of Forward Financial's other non-interest income for a full
quarter. Increases in deposit service fees also contributed to the improvement
in non-interest income for the current quarter and on a year to date basis.
Total non-interest expenses increased to $9.2 million for the quarter ended
December 31, 2000 from $6.7 million for the quarter ended December 31, 1999
primarily due to the inclusion of a full quarter of Forward Financial's expenses
in the current year's quarter. Compensation and benefits expense increased from
$3.9 million for the fourth quarter of 1999 to $4.7 million for the current
quarter primarily due to the inclusion of a full quarter of Forward Financial's
compensation and benefits expenses and normal salary increases. For these same
reasons, compensation and benefits increased to $20.1 million for the year ended
December 31, 2000 from $15.0 million for last year's comparable period.
Occupancy and equipment expenses increased from $852,000 for the quarter ended
December 31, 1999 to $1.1 million for the current quarter. Advertising expense
increased from $207,000 for the quarter ended December 31, 1999 to $281,000 for
the current quarter and the year-to-date totals were similarly impacted. Real
estate operations provided income of $257,000 in the year ended December 31,
2000 compared to income of $71,000 for the year ended December 31, 1999. The
current year's income is larger due to income recognized in the dissolution of a
real estate subsidiary of BFS. Other non-interest expenses were $1.5 million for
the quarter ended December 31, 2000, compared to $1.1 million for the quarter
ended December 31, 1999. The increase was primarily due to the inclusion of a
full quarter of Forward Financial's non-interest expenses during the current
quarter.
Income tax expense for the quarters ended December 31, 2000 and 1999 was $1.3
million and $1.1 million, respectively. The effective income tax rate was 36.4%
during the current quarter, compared to 33.3% for the quarter ended December 31,
1999. Income tax expense was $5.3 million and $4.9 million for the years ended
December 31, 2000 and 1999, respectively. The effective tax rates were 35.5% and
36.6%, respectively. The effective tax rate was lower during the current year
due primarily to the effects of the investment in BOLI, which provides income
that is not taxed at the state or federal level.
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Total assets at December 31, 2000 were $1.328 billion, compared to $1.254
billion at December 31, 1999, an increase of $74.0 million, or 5.9%. Asset
growth was primarily attributable to a $41.3 million increase in mortgage-backed
securities held to maturity and a $16.0 million increase in cash and cash
equivalents. Mortgage-backed securities held to maturity increased due to the
securitization of $51.0 million of loans into Federal Home Loan Mortgage
Corporation ("FHLMC") securities. Cash and cash equivalents increased due
primarily to a stronger savings deposit inflow at this year-end compared to late
December of 1999 and higher balances in overnight deposits. Investment
securities available for sale increased by $10.2 million to $63.4 million at
December 31, 2000 from a balance of $53.2 million at December 31, 1999.
Deposit accounts increased by $79.6 million, or 10.3%, from a balance of $770.0
million at December 31, 1999 to a balance of $849.6 million at December 31,
2000. The increase includes $20.8 million of deposits from the Company's new
Woburn Office. Also, there was a net reduction of $17.8 million of wholesale
brokered certificates of deposit. Deposit growth was believed to be enhanced by
the run-off from other institutions caused by the disruptive effects of
consolidation in the Company's primary market area. Federal Home Loan Bank
advances and other borrowings decreased by $43.2 million, to a balance of $344.3
million at December 31, 2000 from a balance of $387.6 million at December 31,
1999.
The Company's issuance of corporation-obligated mandatorily redeemable capital
securities ("trust preferred securities") totaled $32.0 million at December 31,
2000 as a result of the $10.0 million issuance of trust preferred securities on
July 26, 2000 and $22.0 million issuance of trust preferred securities on
September 22, 2000. All but a small percentage of the trust preferreds are
includable in regulatory capital calculations.
Total stockholders' equity was $89.9 million at December 31, 2000, compared to
$85.7 million at December 31, 1999 and on a per share basis, the book value was
$19.82 and $17.88, respectively. The stockholders' equity to total assets ratio
of the Company was 6.8% at December 31, 2000 and 1999.
This earnings report may contain certain forward-looking statements, which are
based on management's current expectations regarding economic, legislative, and
regulatory issues that may impact the Company's earnings in future periods.
Factors that could cause future results to vary materially from current
management expectations include, but are not limited to, general economic
conditions, changes in interest rates, deposit flows, real estate values, and
competition; changes in accounting principles, policies, or guidelines; changes
in legislation or regulation; and other economic, competitive, governmental,
regulatory and technological factors affecting the Company's operations,
pricing, products and services. The Company does not undertake, and specifically
disclaims any obligation, to publicly release the result of any revisions which
may be made to any forward-looking statements to reflect events or circumstances
after the date of such statements or to reflect the occurrence of anticipated or
unanticipated events.
BOSTONFED BANCORP, INC.
Cash Earnings Summary
Cash earnings represent the amount by which tangible stockholder's equity
changes each period due to operating results, which include reported earnings
plus the non-cash charges, net of taxes, for the amortization and appreciation
of allocated shares in the Company's Employee Stock Ownership Plan ("ESOP"),
stock-based incentive plans ("SIP"), and amortization of goodwill. A
reconciliation of reported earnings and cash earnings for the three and twelve
months ended December 31, 2000 and 1999 is as follows:
Three Months Ended Twelve Months Ended
12-31-00 12-31-99 12-31-00 12-31-99
(Dollars In Thousands Except Per Share Amounts)
Reported Income $ 2,319 $ 2,275 $ 9,710 $ 8,568
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Add:
ESOP Expense 127 292 950 1,296
SIP Expense 38 71 236 358
Goodwill 354 125 1,406 284
Deduct:
Tax on ESOP (15) (77) (240) (302)
Tax on SIP (15) (28) (95) (143)
Tax on Goodwill (120) (27) (475) (27)
Cash Earnings $ 2,688 $ 2,631 $ 11,492 $ 10,034
Resultant Cash Earnings Data:
Basic Earnings Per Share $ 0.59 $ 0.55 $ 2.45 $ 2.08
Diluted Earnings Per Share $ 0.56 $ 0.53 $ 2.38 $ 2.01
Return on Assets (annualized) 0.82% 0.86% 0.89% 0.84%
Return on Equity (annualized) 11.58% 12.03% 12.69% 11.71%
Cash earnings indicate the addition to tangible capital, which measures the
Company's capacity for growth, ability to execute share repurchases or pay
dividends. As indicated above, cash earnings for the quarter ended December 31,
2000 amounted to $2.7 million, or $369,000 more than reported earnings. For the
year ended December 31, 2000, cash earnings amounted to $11.5 million, or $1.8
million more than reported earnings.
BOSTONFED BANCORP, INC.
Consolidated Balance Sheets December 31, December 31,
2000 1999
(Dollars In Thousands Except Per Share Amounts)
(Unaudited)
Assets
Cash and cash equivalents $ 50,675 $ 34,696
Investment securities available for sale 63,421 53,203
Investment securities held to maturity 2,304 2,304
Mortgage-backed securities available for sale 15,372 15,540
Mortgage-backed securities held to maturity 55,283 13,941
Mortgage loans held for sale 12,816 16,174
Loans, net of allowance for loan losses 1,036,435 1,032,594
Accrued interest receivable 7,375 6,267
Stock in FHLB of Boston & Federal Reserve Bank 20,649 20,311
Premises and equipment 10,647 8,212
Real estate owned 145 376
Goodwill 19,195 19,519
Other assets 33,465 30,516
Total assets $ 1,327,782 $ 1,253,653
Liabilities and Stockholders' Equity
Liabilities:
Deposit accounts $ 849,647 $ 770,049
Federal Home Loan Bank Advances & Other Borrowed Money 344,334 387,555
Advance payments by borrowers for
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taxes and insurance 2,864 3,298
Other liabilities 9,024 7,047
Total liabilities 1,205,869 1,167,949
Corporation-obligated mandatorily redeemable capital securities 32,000 0
Stockholders' equity;
Common stock and additional paid-in-capital 67,604 67,264
Retained earnings 57,696 50,481
Accumulated Other Comprehensive Income(Loss) 88 (1,485)
Less unallocated ESOP shares (1,058) (1,663)
Less unearned 1996 Stock-Based Incentive Plan (136) (361)
Less Treasury Stock (34,281) (28,532)
Total stockholders' equity 89,913 85,704
Total liabilities and stockholders' equity $ 1,327,782 $ 1,253,653
Selected Financial Highlights --
(At End of Period)
Total stockholders' equity to total assets 6.8% 6.8%
Market value per share $ 20.88 $ 15.88
Book value per common share $ 19.82 $ 17.88
Number of shares outstanding 4,648,481 4,973,081
Non-performing loans $ 956 $ 746
Real estate owned $ 145 $ 376
Total non-performing assets $ 1,101 $ 1,122
Total non-performing assets as a percent of
total assets 0.08% 0.09%
Allowance for loan losses $ 11,381 $ 10,654
Allowance for loan losses as a percent of
non-performing loans 1190.48% 1428.15%
Allowance for loan losses as a percent of
non-performing assets 1033.70% 949.55%
Allowance for loan losses as a percent of loans 1.07% 1.01%
Total loans serviced for others $ 886,629 $ 784,897
Consolidated Statements of Income
Three Months Ended Twelve Months Ended
December 31, December 31,
2000 1999 2000 1999
(In Thousands)
(Unaudited)
Interest income:
Loans $ 21,198 $ 18,944 $ 80,960 $ 73,096
Mortgage-backed securities 1,185 472 4,393 2,154
Investment securities 1,712 1,522 6,481 5,486
Total interest income and dividend income 24,095 20,938 91,834 80,736
Interest expense:
Deposit accounts 8,422 6,826 31,725 25,872
Borrowed funds 5,429 5,560 22,764 21,336
Total interest expense 13,851 12,386 54,489 47,208
Net interest income 10,244 8,552 37,345 33,528
Provision for loan losses 250 376 1,000 1,626
Net interest income after provision 9,994 8,176 36,345 31,902
Non-interest income:
Deposit service fees 529 449 1,961 1,742
Loan processing and servicing
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fees 173 146 661 583
Gain on sale of loans 1,428 780 9,009 3,017
Income from bank owned life insurance 315 313 1,267 556
Other 395 287 1,456 1,046
Total non-interest income 2,840 1,975 14,354 6,944
Non-interest expense:
Compensation and benefits 4,662 3,895 20,073 14,955
Occupancy and equipment 1,096 852 4,256 3,284
Data processing 398 448 1,513 1,589
Advertising expense 281 207 1,051 691
Federal deposit insurance premiums 43 91 164 368
Real estate operations 7 (4) (257) (71)
Amortization of Goodwill 354 125 1,406 284
Capital Securities 881 0 1,138 0
Other 1,466 1,124 6,301 4,233
Total non-interest expense 9,188 6,738 35,645 25,333
Income before income taxes 3,646 3,413 15,054 13,513
Income tax expense 1,327 1,138 5,344 4,945
Net income $ 2,319 $ 2,275 $ 9,710 $ 8,568
Selected Financial Highlights--
(For the periods ending)
Basic earnings per share $ 0.51 $ 0.47 $ 2.07 $ 1.78
Diluted earnings per share $ 0.48 $ 0.46 $ 2.01 $ 1.71
Return on average assets(annualized) 0.72% 0.74% 0.75% 0.72%
Return on average stockholders'
equity(annualized) 10.00% 10.40% 10.72% 10.00%
Net interest rate spread(annualized) 2.95% 2.66% 2.80% 2.59%
Net interest margin(annualized) 3.37% 2.97% 3.11% 2.97%
Mortgage loan originations
(Dollars in Thousands) $ 118,019 $ 104,365 $ 451,872 $ 568,793
SOURCE: BOSTONFED BANCORP, INC.
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