Exhibit 99.1
VSB Bancorp, Inc.
First Quarter 2008 Results of Operations
Contact Name:
Ralph M. Branca
President & CEO
(718) 979-1100
Staten Island, N. Y. -- April 8, 2008. VSB Bancorp, Inc. (NASDAQ CM: VSBN)
reported net income of $361,945 for the first quarter of 2008, a 31.7% decrease
from the first quarter of 2007. The following unaudited figures were released
today. Pre-tax income was $673,041 in the first quarter of 2008, as compared to
$991,842 for the first quarter of 2007, a decrease of $318,801, or 32.1%. Net
income for the quarter was $361,945, or basic income of $0.20 per common share,
as compared to a net income of $529,771, or $0.29 basic income per common share,
for the quarter ended March 31, 2007.
The $167,826 decrease in net income was attributable to a decrease in net
interest income of $301,346, due primarily to a decrease in interest income from
loans of $327,862, a decrease in interest income from other interest earning
assets of $144,772 and an increase provision for loan loss expense of $60,000.
The decrease in net income was partially offset by an increase in investment
income of $83,837, an increase in non-interest income of $24,539, and a decrease
in income tax expense of $150,975.
The reduction in interest income is attributable to a rapid decline of the fed
funds and the prime rates, which negatively affected the yield on our loans, and
other interest earning assets income. After remaining steady for approximately
15 months, the prime rate declined 3.00% from September 2007 to March 2008. The
$18,006 reduction in non-interest expense is directly attributable to a decrease
in salary and benefits of $106,922, partially offset by an increase in legal
fees of $39,560, an increase in occupancy expenses of $19,749 and an increase in
other expenses of $26,817. The reduction in salary and benefits was due, in part
to the retirement of the former president, reduced incentive and ESOP
compensation expense.
Total assets increased to $210.2 million at March 31, 2008, an increase of $6.4
million, or 3.1%, from December 31, 2007. Total deposits increased to $181.6
million, an increase of $5.3 million, or 3.0%, during the first quarter of 2008.
The Bancorp's Tier 1 capital ratio of 12.81% includes, the effect, as Tier 1
capital, of $5.0 million (25% of its Tier 1 capital) from the proceeds of a $5
million trust preferred securities issuance in August 2003.
Average interest-earning assets and average loans decreased by $823,506 and
$256,763, respectively, from the first quarter of 2007 to the first quarter of
2008. Average demand deposits, an interest free source of funds for the Bancorp
to invest, were approximately 35% of average total deposits for the first
quarter of 2008, compared to 37% for the first quarter of 2007. Average deposits
decreased by $6.4 million from the first quarter of 2007 to the first quarter of
2008. The Company's interest rate spread and interest rate margin were 3.13% and
4.07%, respectively, for the quarter ending March 31, 2008 as compared to 3.68%
and 4.72%, respectively, for the quarter ended March 31, 2007. Non-interest
income increased $24,539 to $565,902 in the first quarter of 2008 due in part to
the increase in the per item charge of insufficient fund fees in March 2008.
Non-interest expense totaled $1.8 million in the first quarter of 2008.
Raffaele (Ralph) M. Branca, VSB Bancorp, Inc.'s President and CEO, stated, "The
current economic environment and the recent drops in short term rates, including
the Prime Rate, have reduced our net interest income in the first quarter of
2008. This is because our loans and other interest earning assets re-price
downward at a faster pace and in greater magnitude than our interest bearing
liabilities. The current growth of the Bancorp's assets could not offset the
margin compression we experienced in this quarter." Joseph J. LiBassi, VSB
Bancorp, Inc.'s Chairman, stated "Our basic earnings per share were $0.20 for
the first quarter of 2008, and our book value per share rose to $11.68 at March
31, 2008, up $0.69 from the book value per share at the prior year-end. We paid
our second quarterly dividend of $0.06 per common share for stockholders of
record on March 21, 2008. Our ability to deliver the highest personal customer
service, and our motto of `making the Bank fit your business,' sets us apart 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, which 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 $22.2 million primarily through the retention of
earnings. The Bank operates five full service locations in Staten Island: the
main office in Great Kills, and branches on Forest Avenue (West Brighton), Hyatt
Street (St. George), Hylan Boulevard (Dongan Hills) and on Bay Street
(Rosebank).
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.
2
VSB Bancorp, Inc.
Consolidated Statements of Financial Condition
March 31, 2008
(unaudited)
March 31, December 31,
2008 2007
------------- -------------
Assets:
Cash and cash equivalents $ 22,162,554 $ 17,696,879
Investment securities, available for sale 121,880,050 117,814,117
Loans receivable 61,337,096 62,373,078
Allowance for loan loss (919,450) (927,161)
------------- -------------
Loans receivable, net 60,417,646 61,445,917
Bank premises and equipment, net 3,824,211 3,931,679
Accrued interest receivable 709,237 799,249
Deferred taxes 102,908 991,297
Other assets 1,112,731 1,114,431
------------- -------------
Total assets $ 210,209,337 $ 203,793,569
============= =============
Liabilities and stockholders' equity:
Liabilities:
Deposits:
Demand and checking $ 63,036,898 $ 62,525,053
NOW 18,745,240 16,931,113
Money market 23,457,102 20,534,721
Savings 11,057,143 11,349,111
Time 64,932,174 64,738,564
------------- -------------
Total Deposits 181,228,557 176,078,562
Escrow deposits 420,307 255,881
Subordinated debt 5,155,000 5,155,000
Accounts payable and accrued expenses 1,203,806 1,420,321
------------- -------------
Total liabilities 188,007,670 182,909,764
------------- -------------
Stockholders' equity:
Common stock, ($.0001 par value, 3,000,000
shares authorized, 1,900,509 issued
and outstanding at March 31, 2008 and
December 31, 2007) 190 190
Additional paid in capital 9,091,367 9,107,119
Retained earnings 13,474,309 13,226,395
Unallocated ESOP shares (1,028,558) (1,070,827)
Accumulated other comprehensive income (loss), net
of taxes of $579,526 and $(330,668), respectively 664,359 (379,072)
------------- -------------
Total stockholders' equity 22,201,667 20,883,805
------------- -------------
Total liabilities and stockholders'
equity $ 210,209,337 $ 203,793,569
============= =============
3
VSB Bancorp, Inc.
Consolidated Statements of Operations
March 31, 2008
(unaudited)
Three months Three months
ended ended
March 31, 2008 March 31, 2007
--------------- ---------------
Interest and dividend income:
Loans receivable $ 1,244,491 $ 1,572,353
Investment securities 1,384,297 1,300,460
Other interest earning assets 102,293 247,065
--------------- ---------------
Total interest income 2,731,081 3,119,878
Interest expense:
NOW 32,231 28,789
Money market 96,092 85,850
Savings 18,982 24,428
Subordinated debt 89,040 89,040
Time 519,447 615,136
--------------- ---------------
Total interest expense 755,792 843,243
Net interest income 1,975,289 2,276,635
Provision (benefit) for loan loss 30,000 (30,000)
--------------- ---------------
Net interest income
after provision for loan loss 1,945,289 2,306,635
Non-interest income:
Loan fees 22,223 27,468
Service charges on deposits 479,615 416,908
Net rental income (loss) (1,011) 14,813
Other income 65,075 82,174
--------------- ---------------
Total non-interest income 565,902 541,363
Non-interest expenses:
Salaries and benefits 910,408 1,017,330
Occupancy expenses 357,724 337,975
Legal expense 54,086 14,526
Professional fees 61,400 51,600
Computer expense 55,106 67,216
Directors fees 57,250 52,150
Other expenses 342,176 315,359
--------------- ---------------
Total non-interest expenses 1,838,150 1,856,156
Income before income taxes 673,041 991,842
--------------- ---------------
Provision (benefit) for income taxes:
Current 332,900 442,730
Deferred (21,804) 19,341
--------------- ---------------
Total provision for income taxes 311,096 462,071
Net income $ 361,945 $ 529,771
=============== ===============
Basic income per common share $ 0.20 $ 0.29
=============== ===============
Diluted net income per share $ 0.19 $ 0.28
=============== ===============
Book value per common share $ 11.68 $ 9.85
=============== ===============
4