Exhibit 99.1
VSB Bancorp, Inc.
First Quarter 2004 Results of Operations
VSB REPORTS 88% GROWTH IN QUARTERLY EARNINGS
Contact Name:
Ralph M. Branca
Executive Vice President
(718) 979-1100
Staten Island, N. Y. -- April 13, 2004. VSB Bancorp, Inc. (NASDAQ OTCBB: VSBN)
reported quarterly net income of $499,170 for the first quarter of 2004, an
87.6% increase from the first quarter of 2003. All per share data have been
adjusted for the 4 for 3 stock split, in the form of a 33 1/3 stock dividend
paid on March 8, 2004. The following unaudited figures were released today.
Pre-tax income was $934,608 in the first quarter of 2004, as compared to
$500,427 for the first quarter of 2003, an increase of $434,181, or 86.8%. Net
income was $499,170, or net income of $0.35 per common share, as compared to a
net income of $266,086, or a net income per common share of $0.19, for the
quarter ended March 31, 2003. All share data has been adjusted for the Bancorp's
four for three stock split. The increase in net income was attributable to the
increase in net interest income of $464,977 and an increase in non-interest
income of $89,456, which was partially offset by the increase in non-interest
expense of $110,252 and the increase in the provision for loan loss of $10,000.
Total assets increased to $187.2 million, an increase of $2.2 million from
December 31, 2003. Total deposits stood at $168.9 million, an increase of $1.2
million for the same period. The Bancorp's Tier 1 capital ratio of 8.72%
includes, as Tier 1 capital, $3.8 million (25% of its total capital base) from
the $5 million trust preferred securities that it issued in August 2003.
Average interest-earning assets and average loans grew $31.1 million and $3.7
million, respectively, from the first quarter of 2003. Average investment
securities and other interest earning assets increased $26.9 million from the
same period. Average demand deposits (an interest free source of funds for the
Bank to invest) remained approximately 42% of average total deposits. The Bank's
interest rate spread and interest rate margin were 4.30% and 4.76%,
respectively, for the quarter ending March 31, 2004 as compared to 4.10% and
4.54%, respectively, for the quarter ended March 31, 2003. Non-interest income
grew to $473,782 in the first quarter of 2004, an increase of $89,456 from the
first quarter of 2003. Non-interest expense totaled $1.4 million, an increase of
$110,252 from the first quarter of 2003. The growth in non-interest expense is
directly attributable to increased personnel expenses relating to new staff,
increases in health insurance costs and other benefits and increased occupancy
expenses.
Merton Corn, President and CEO of VSB Bancorp, Inc., stated "Compared to the
first quarter of 2003, we have posted strong numbers but these numbers are
weaker than the fourth quarter of 2003. Most of the growth in net income for the
first quarter of 2004 was due to the increase in interest-earning assets of the
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Bancorp from the first quarter of 2003. We are poised at the eventual rise in
the interest rate market which will have a dampening effect on future earnings."
Mr. Joseph J. LiBassi, VSB Bancorp, Inc.'s Chairman stated "Our basic earnings
per share for this quarter was $0.35, which is $.01 less than our record
December 2003 quarter. Our first quarter 2004 Return on Assets and Return on
Equity was 1.11% and 17.75%, respectively. The continued implementation of our
strategy to deliver the highest quality personal service drives Victory's
reputation as the Island's premier business bank."
VSB Bancorp, Inc. is the one-bank holding company for Victory State Bank.
Victory State Bank, a Staten Island based commercial bank, commenced operations
on November 17, 1997. The Bank's initial capitalization of $7.0 million was
primarily raised in the Staten Island community. The Bancorp's total equity has
increased to $11.4 million since its inception. The Bank operates four full
service locations in Staten Island, the main office in the Oakwood Heights
Shopping Center, the second on Forest Avenue, the third on Hyatt Street and the
fourth branch on Hylan Boulevard.
Statements contained in this press release, which are not historical facts, are
forward -looking statements, as defined in the Private Securities Litigation
Reform Act of 1995. Such forward-looking statements are subject to risks and
uncertainties, which could cause actual results to materially differ from those
currently, anticipated.
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VSB Bancorp, Inc.
Consolidated Statements of Financial Condition
March 31, 2004
March 31, December 31,
2004 2003
------------- -------------
(unaudited)
Assets:
Cash and due from banks $ 37,536,113 $ 30,187,741
Investment securities, available for sale 79,443,372 83,770,903
Loans receivable 67,541,410 67,981,461
Allowance for loan loss (1,224,893) (1,162,776)
------------- -------------
Loans receivable, net 66,316,517 66,818,685
Bank premises and equipment, net 2,014,634 2,132,154
Accrued interest receivable 560,170 588,232
Deferred taxes 765,150 934,710
Other assets 538,444 542,545
------------- -------------
Total assets $ 187,174,400 $ 184,974,970
============= =============
Liabilities and stockholders' equity:
Liabilities:
Deposits:
Demand and checking $ 78,953,873 $ 77,416,339
NOW 23,816,835 23,627,653
Money market 23,942,246 23,709,155
Savings 11,534,669 10,394,955
Time 30,204,372 32,287,215
------------- -------------
Total Deposits 168,451,995 167,435,317
Escrow deposits 456,610 267,484
Trust preferred securities 5,000,000 5,000,000
Accounts payable and accrued expenses 1,833,235 1,630,544
------------- -------------
Total liabilities 175,741,840 174,333,345
Stockholders' equity:
Common stock, ($.0001 par value, 3,000,000
shares authorized, 1,411,982 and 1,407,997
issued and outstanding, respectively) 141 106
Additional paid in capital 7,080,155 7,031,499
Retained earnings 4,278,856 3,779,686
Accumulated other comprehensive income (loss),
net of taxes of $64,034 and $(148,001),
respectively 73,408 (169,666)
------------- -------------
Total stockholders' equity 11,432,560 10,641,625
------------- -------------
Total liabilities and stockholders'
equity $ 187,174,400 $ 184,974,970
============= =============
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VSB Bancorp, Inc.
Consolidated Statements of Operations
March 31, 2004
(unaudited)
Three months Three months
ended ended
Mar. 31, 2004 Mar. 31, 2003
-------------- --------------
Interest and dividend income:
Loans receivable $ 1,313,740 $ 1,163,683
Investment securities 845,189 472,600
Other interest earning assets 25,218 51,712
-------------- --------------
Total interest income 2,184,147 1,687,995
Interest expense:
NOW 23,782 30,646
Money market 47,810 81,811
Savings 13,438 14,582
Trust preferred 86,363 --
Time 78,112 91,291
-------------- --------------
Total interest expense 249,505 218,330
Net interest income 1,934,642 1,469,665
Provision for loan loss 50,000 40,000
-------------- --------------
Net interest income
after provision for loan loss 1,884,642 1,429,665
Non-interest income:
Loan fees 15,523 40,828
Service charges on deposits 427,690 337,049
Net rental income/(loss) 8,032 (4,175)
Other income 22,537 10,624
-------------- --------------
Total non-interest income 473,782 384,326
Non-interest expenses:
Salaries and benefits 796,267 674,781
Occupancy expenses 231,327 250,320
Legal expense 30,875 28,650
Professional fees 46,250 34,500
Computer expense 64,694 73,365
Other expenses 254,403 251,948
-------------- --------------
Total non-interest expenses 1,423,816 1,313,564
Income before income taxes 934,608 500,427
-------------- --------------
Provision (benefit) for income taxes:
Current 477,913 249,401
Deferred (42,475) (15,060)
-------------- --------------
Total provision for income taxes 435,438 234,341
Net income $ 499,170 $ 266,086
============== ==============
Basic income per common share $ 0.35 $ 0.19
============== ==============
Fully diluted net income per share $ 0.34 $ 0.18
============== ==============
Book value per common share $ 8.10 $ 7.54
============== ==============
See notes to financial statements
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