EXHIBIT 99.1
VSB Bancorp, Inc.
First Quarter 2006 Results of Operations
Contact Name:
Ralph M. Branca
Executive Vice President
(718) 979-1100
Staten Island, N. Y. --April 13, 2006. VSB Bancorp, Inc. (NASDAQ OTCBB: VSBN)
reported net income of $589,911 for the first quarter of 2006, an 8.2% decrease
from the first quarter of 2005. The following unaudited figures were released
today. Pre-tax income was $1,104,583 in the first quarter of 2006, as compared
to $1,203,595 for the first quarter of 2005, a decrease of $99,012, or 8.2%. Net
income for the quarter was $589,911, or basic income of $0.41 per common share,
as compared to a net income of $642,792, or $0.45 basic income per common share,
for the quarter ended March 31, 2005.
The $52,881 decrease in net income was attributable to an increase in
non-interest expense of $217,463 and an increase in the provision for loan loss
of $55,000, partially offset by an increase in net interest income of $149,337,
an increase in non-interest income of $24,114, and a decrease in income tax
expense of $46,131. Total assets increased to $218.3 million at March 31, 2006,
an increase of $2.6 million, or 1.2%, from December 31, 2005. Total deposits
increased to $195.7 million, an increase of $2.5 million, or 1.3%, during the
first quarter of 2006. The Bancorp's Tier 1 regulatory capital ratio was 10.25%,
and includes, as Tier 1 capital, the proceeds of a $5 million trust preferred
securities issuance in August 2003.
Average interest-earning assets and average investment securities decreased by
$3.2 million and $16.5 million, respectively, from the first quarter of 2005 to
the first quarter of 2006. Average demand deposits, an interest free source of
funds for the Bancorp to invest, were approximately 36% of average total
deposits for the first quarter of 2006, compared to 43% for the first quarter of
2005. Average time deposits grew by $15.5 million from the first quarter of 2005
to the first quarter of 2006. The Company's interest rate spread and interest
rate margin were 4.13% and 4.90%, respectively, for the quarter ending March 31,
2006 as compared to 4.03% and 4.58%, respectively, for the quarter ended March
31, 2005. Non-interest income increased $24,114 to $483,549 in the first quarter
of 2006. Non-interest expense totaled $1.8 million, an increase of $217,463 from
the first quarter of 2005. The growth in non-interest expense is directly
attributable to increases in salaries and benefits expense due to new hires and
an increase in health insurance costs, higher legal expense, and an increase in
other expenses primarily attributed to the preparation for the opening of our
fifth branch.
Merton Corn, President and CEO of VSB Bancorp, Inc., stated, "We have increased
our net interest income, net interest rate spread and margin in the first
quarter of 2006 but we have also incurred additional expenses in establishing
our fifth branch, which should open shortly. The construction on our sixth
branch in Great Kills has begun and we expect to open that branch in early
2007." Mr. Joseph J. LiBassi, VSB Bancorp, Inc.'s Chairman stated "Our earnings
per share were $0.41 for the first quarter of 2006, our Return on Assets was
1.06% and our Return on Equity was 15.06% for this quarter. We have continued to
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deliver strong returns for our stockholders. The opening of our fifth branch in
Rosebank will provide us another outlet to deliver the personal service that
distinguishes us 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 $14.9 million since the Bank was formed. 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. We will be opening our fifth branch at 1065
Bay Street this month, in the Rosebank section of Staten Island, and we have
received regulatory approval for our sixth branch location in the Great Kills
section of Staten Island.
FORWARD LOOKING STATEMENTS
This release contains forward-looking statements that are subject to
risks and uncertainties. Such risks and uncertainties may include but are not
necessarily limited to adverse changes in local, regional or national economic
conditions, fluctuations in market interest rates, changes in laws or government
regulations, changes in customer preferences, and changes in competition within
our market area. When used in this release or in any other written or oral
statements by the Company or its directors, officers or employees, words or
phrases such as "will result in," "management expects that," "will continue,"
"is anticipated," "estimate," "projected," or similar expressions, and other
terms used to describe future events, are intended to identify "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995 ("PSLRA"). Readers should not place undue reliance on the
forward-looking statements, which reflect management's view only as of the date
of the statement. The Company undertakes no obligation to publicly revise these
forward-looking statements to reflect subsequent events or circumstances. This
statement is included for the express purpose of protecting the Company under
the PSLRA's safe harbor provisions.
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VSB Bancorp, Inc.
Consolidated Statements of Financial Condition
March 31, 2006
(unaudited)
March 31, December 31,
2006 2005
------------- -------------
Assets:
Cash and cash equivalents $ 30,926,808 $ 31,324,147
Investment securities, available for sale 111,187,745 106,023,293
Loans receivable 70,877,036 73,944,105
Allowance for loan loss (1,181,859) (1,153,298)
------------- -------------
Loans receivable, net 69,695,177 72,790,807
Bank premises and equipment, net 1,360,996 1,441,087
Accrued interest receivable 751,858 728,627
Deferred taxes 2,762,337 2,298,195
Other assets 1,661,689 1,169,556
------------- -------------
Total assets $ 218,346,610 $ 215,775,712
============= =============
Liabilities and stockholders' equity:
Liabilities:
Deposits:
Demand and checking $ 71,959,437 $ 66,692,436
NOW 23,701,324 23,574,056
Money market 22,317,394 20,177,240
Savings 13,672,742 14,809,010
Time 63,152,428 67,731,273
------------- -------------
Total Deposits 194,803,325 192,984,015
Escrow deposits 908,931 267,144
Subordinated debt 5,155,000 5,155,000
Accounts payable and accrued expenses 2,558,856 2,553,208
------------- -------------
Total liabilities 203,426,112 200,959,367
Employee Stock Ownership Plan Repurchase Obligation 274,385 284,938
Stockholders' equity:
Common stock, ($.0001 par value, 3,000,000
shares authorized, 1,509,822 issued and
outstanding at March 31, 2006 and 1,509,822 issued
and outstanding at December 31, 2005) 151 151
Additional paid in capital 8,751,205 8,742,673
Retained earnings 9,211,604 8,621,693
Unallocated ESOP shares (1,366,714) (1,408,983)
Accumulated other comprehensive loss, net
of taxes of $1,701,118 and $1,242,278,
respectively (1,950,133) (1,424,127)
------------- -------------
Total stockholders' equity 14,646,113 14,531,407
------------- -------------
Total liabilities and stockholders'
equity $ 218,346,610 $ 215,775,712
============= =============
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VSB Bancorp, Inc.
Consolidated Statements of Operations
March 31, 2006
(unaudited)
Three months Three months
ended ended
March 31, 2006 March 31, 2005
--------------- ---------------
Interest and dividend income:
Loans receivable $ 1,748,773 $ 1,300,636
Investment securities 1,205,762 1,319,485
Other interest earning assets 179,448 66,305
--------------- ---------------
Total interest income 3,133,983 2,686,426
Interest expense:
NOW 23,203 22,025
Money market 84,216 54,047
Savings 18,334 18,227
Subordinated debt 89,040 89,040
Time 453,883 187,117
--------------- ---------------
Total interest expense 668,676 370,456
Net interest income 2,465,307 2,315,970
Provision (benefit) for loan loss 25,000 (30,000)
--------------- ---------------
Net interest income
after provision for loan loss 2,440,307 2,345,970
Non-interest income:
Loan fees 22,767 23,459
Service charges on deposits 389,756 404,017
Net rental income 3,375 11,063
Other income 67,651 20,896
--------------- ---------------
Total non-interest income 483,549 459,435
Non-interest expenses:
Salaries and benefits 1,032,077 938,496
Occupancy expenses 259,460 246,760
Legal expense 58,874 9,924
Professional fees 48,000 75,000
Computer expense 60,528 54,812
Director fees 55,900 43,175
Other expenses 304,434 233,643
--------------- ---------------
Total non-interest expenses 1,819,273 1,601,810
Income before income taxes 1,104,583 1,203,595
--------------- ---------------
Provision (benefit) for income taxes:
Current 519,974 558,302
Deferred (5,302) 2,501
--------------- ---------------
Total provision for income taxes 514,672 560,803
Net income $ 589,911 $ 642,792
=============== ===============
Basic income per common share $ 0.41 $ 0.45
=============== ===============
Diluted net income per share $ 0.40 $ 0.43
=============== ===============
Book value per common share $ 9.88 $ 8.38
=============== ===============
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