Blue Hills Bancorp, Inc. Reports First Quarter Earnings

NORWOOD, Mass.--()--Blue Hills Bancorp, Inc. (the “Company” or "Blue Hills Bancorp") (NASDAQ: BHBK), the parent of Blue Hills Bank (the "Bank"), today announced net income of $1,667,000, or $0.07 per diluted share, for the first quarter of 2016 compared to net income of $2,412,000, or $0.09 per diluted share, for the fourth quarter of 2015 and net income of $1,306,000, or $0.05 per diluted share for the first quarter of 2015.

Commenting on the Company's results, William Parent, President and Chief Executive Officer of Blue Hills Bancorp, said "We are off to a good start in 2016 with loans up another 3% in the quarter and up over 30% from a year ago. Over the past few years we have expanded our direct origination capabilities to the point that over 90% of the loan growth in residential and commercial loans for 2015 and the first quarter of 2016 were originated directly by Blue Hills Bank. In addition, our customer deposits are up 14% from a year ago and later this year we will open a new branch in the Seaport District of Boston that will further enhance our deposit taking capabilities. The transformation of the Company into a full service community bank has continued over the past few months as we brought in a team to launch an asset-based lending function, added an experienced banker focused on the municipal deposit business and experienced lenders to our residential lending team. Capital management remains a priority and we are now executing on our second stock buyback program after completing the first program in late February. We are greatly encouraged by the progress we continue to make during our transformation and look forward to the challenges and opportunities that lie ahead."

BALANCE SHEET
Compared to December 31, 2015, total assets grew $48 million, or 2%, to $2.2 billion at March 31, 2016. The increase was due to loan growth as total loans increased $47 million, or 3%, to $1.6 billion at March 31, 2016 driven by higher levels of commercial real estate and residential mortgage loans, partially offset by declines in commercial business loans and other consumer loans. The decline in commercial business loans was impacted by payoffs, however, the pipeline looks solid for the months ahead.

Compared to March 31, 2015, total assets increased $404 million, or 23%. Loans also drove the growth in total assets in this comparison, increasing $408 million, or 35%. By category, commercial real estate loans were up $180 million, or 45%; residential mortgages were up $158 million, or 34%; construction loans increased $33 million, or 55%; home equity loans increased $17 million, or 27%; commercial business loans were up $15 million, or 10%; and consumer loans were up $4 million, or 13%. During the first quarter of 2016, commercial loans (real estate and non-real estate combined) totaling $74 million were added to the balance sheet, of which 91% were originated by the Company. This compares to the first quarter of 2015 when $41 million of commercial loans were added, of which 92% were originated by the Company. In addition, $65 million of residential mortgages loans were added in the first quarter of 2016, of which 97% were originated by the Company. This compares to additions of $42 million in residential mortgage loans in the first quarter of 2015, of which 92% were originated by the Company.

The combined balance of available-for-sale and held-to-maturity securities at March 31, 2016 was $434 million compared to $432 million at December 31, 2015. Securities available for sale were $430 million at March 31, 2015. As previously disclosed, on July 31, 2015 the Company reclassified almost $200 million of securities available for sale to the held-to-maturity designation. Held-to-maturity investments are investments that management has the positive intent and ability to hold to maturity.

Compared to December 31, 2015, deposits grew $51 million, or 4%, to $1.5 billion at March 31, 2016. The increase from the fourth quarter of 2015 was driven by growth in money market deposits of $41 million and certificates of deposit of $17 million. All other deposit categories had minor changes. The growth in money market deposits was due, in part, to promotional rate programs. Deposit growth from the end of 2015 was helped by the Company's newest branch in Westwood, which opened in the fourth quarter of 2015. Deposits at this branch grew to $72 million at March 31, 2016 from $42 million at the end of 2015. Total borrowings (short and long-term combined) were little changed from the end of 2015.

Compared to March 31, 2015, deposits grew $263 million, or 22%. By category, the more significant increases were seen in money market deposits, which were up $139 million, brokered certificates of deposits, which were up $73 million, and NOW & demand deposits, which were up $29 million. Deposit growth from a year ago was helped by the new Westwood branch and further growth in deposits from the Milton branch that was opened in the fourth quarter of 2014. Together these branches contributed $93 million to the growth in deposits from a year ago. Short and long-term borrowings grew $100 million and $50 million, respectively, from the end of the first quarter of 2015, which helped support the growth in the loan portfolio.

Stockholders’ equity was $394 million at March 31, 2016 compared to $399 million at December 31, 2015 and $415 million at March 31, 2015. The decline in stockholders' equity from the end of 2015 mainly reflects share repurchases. The decline from a year ago also reflects share repurchases, as well as the payment of common stock dividends, and a lower level of other comprehensive income that was primarily due to a drop in the value of available-for-sale securities. These declines were partially offset by $7.4 million of earnings over the past four quarters.

In late February 2016, the Company announced the completion of its first stock repurchase program pursuant to which the Company bought back 1,423,340 shares of its common stock. At the same time, the Board of Directors authorized a second repurchase program for up to 1,119,000 shares of common stock. During the first quarter of 2016, the Company repurchased 730,040 shares of stock under both programs at an average price of $14.09 for a total cost of $10.3 million. This compares to repurchases of 612,800 shares at an average price of $13.99 for a total cost of $8.6 million in the fourth quarter of 2015 and 316,500 shares at an average price of $14.24 for a total cost of $4.5 million in the third quarter of 2015. The Company had 883,000 shares remaining to repurchase at March 31, 2016 under the second repurchase program.

NET INTEREST AND DIVIDEND INCOME
Net interest and dividend income on a fully taxable equivalent basis was $13.3 million in the first quarter of 2016, down $1.4 million, or 9%, from $14.7 million in the fourth quarter of 2015. Net interest margin on a fully taxable equivalent basis declined to 2.62% in the first quarter of 2016 from 3.04% in the fourth quarter of 2015. The decline in net interest income and margin reflects a $2.0 million drop in dividends from mutual fund investments and a $176,000 decline in purchase accounting accretion related to the January 2014 Nantucket Bank acquisition. Purchase accounting accretion was $127,000 in the first quarter of 2016 compared to $303,000 in the fourth quarter of 2015. Mutual fund dividends were over $2.0 million in the fourth quarter of 2015 and were just $21,000 in the first quarter of 2016 as historically the Company receives the vast majority of mutual fund dividends during the second half of the year. Excluding the impact of mutual fund dividends and purchase accounting accretion, net interest and dividend income on a fully taxable equivalent basis was $13.1 million in the first quarter of 2016, up $850,000, or 7%, from the fourth quarter of 2015. On this basis, net interest margin was 2.65% in the first quarter of 2016 compared to 2.61% in the fourth quarter of 2015. The improvement in net interest income was helped by a $120 million, or 8%, increase in average loans driven mainly by growth in commercial real estate, residential mortgage, and construction loans. In addition, net interest income and margin benefited from the decision by the Federal Reserve Bank to raise interest rates in December 2015 with the benefit reflecting the Company's asset sensitive rate risk position.

Compared to the first quarter of 2015, net interest and dividend income on a fully taxable equivalent basis increased $2.5 million, or 24%, while net interest margin declined 2 basis points. Excluding the impact of mutual fund dividends and purchase accounting accretion from both quarters, net interest income on a fully taxable equivalent basis increased $2.6 million, or 25%, to $13.1 million while net interest margin improved one basis point to 2.65%. The improvement in net interest income was primarily due to a $391 million, or 33%, increase in average loans driven mainly by higher levels of commercial real estate and residential mortgage loans. Net interest income and margin were negatively impacted by a 10 basis point drop in loan yield and a 4 basis point increase in the cost of interest-bearing liabilities. The yield on loans declined due to competitive pricing pressures and a $93,000 decline in purchase accounting accretion, partially offset by a benefit in 2016 from repricing floating rate loans following the Fed's December, 2015 rate increase.

NONINTEREST INCOME
Noninterest income was $1.4 million in the first quarter of 2016, down $947,000, or 41%, from the fourth quarter of 2015. The decline was mainly due to the following factors:

  • Miscellaneous income declined to an expense of $183,000 in the first quarter from income of $327,000 in the fourth quarter of 2015. As has been the case in most quarters, the biggest factor behind the change in miscellaneous income relates to the portfolio of commercial loan customer interest rate swap contracts where customers opt to convert their loans from floating to fixed rate via interest rate swaps. While fee income from these contracts is recorded to loan level derivative fee income, GAAP dictates that the Company must mark these contracts to fair value over the life of each swap and these valuation marks are reflected in miscellaneous income. During the first quarter of 2016, the Company recorded negative credit valuation marks as interest rates declined while in the fourth quarter of 2015 positive credit valuation marks on these contracts were recorded as interest rates increased. While these interest rate marks create quarterly volatility in operating results, barring unforeseen credit-related circumstances there is no net impact to earnings over the life of each contract. There were no other items of significance impacting the comparison of miscellaneous income with the fourth quarter of 2015.
  • The Company recorded securities losses of $244,000 in the first quarter of 2016 compared to gains of $145,000 in the fourth quarter of 2015.
  • Loan level derivative fee income was $639,000 in the first quarter, down $194,000 from the fourth quarter. Revenue in this category can be volatile since it is a function of the amount of commercial loans that customers opt to convert from floating to fixed rate via interest rate swaps in any given quarter.
  • Partially offsetting the declines, mortgage banking income improved to $244,000 in the first quarter from $46,000 in the fourth quarter mainly due to a higher volume of loan sales.

Compared to the first quarter of 2015, noninterest income declined $807,000, or 37%. The Company recorded securities gains of $1.3 million in the first quarter of 2015 compared to losses of $244,000 in the first quarter of 2016. This was partially offset by loan level derivative income, which increased $635,000, and mortgage banking income, which increased $143,000.

NONINTEREST EXPENSE

Noninterest expense was $12.1 million in the first quarter of 2016, up $120,000, or 1%, from the fourth quarter of 2015 as a $1.0 million increase in salaries and benefits expense was partially offset by declines in most other expense categories. The increase in salaries and benefits expense reflects the absence of a downward fourth quarter adjustment made to non-equity related incentive compensation expense. That adjustment was made after the Company conducted a review of its overall compensation program in light of the awards made under the Equity Incentive Plan as discussed in more detail below. Other factors impacting the increase in salaries and benefits expense included a seasonal increase in payroll taxes, merit increases, a full quarter of Equity Incentive Plan expense in the first quarter vs. a partial quarter in the fourth quarter, and an increase in headcount, which included staffing the new asset based lending and municipal deposit businesses.

Compared to the first quarter of 2015, noninterest expense increased $1.4 million, or 14%. The major factor driving this increase is the recording of $1.2 million of expense in the first quarter of 2016 related to the awards under the Equity Incentive Plan. As previously disclosed, at the Company’s 2015 Annual Shareholders Meeting held on September 3, 2015 shareholders approved the Company's 2015 Equity Incentive Plan and, on October 7, 2015, the Company granted 983,175 restricted stock awards and 2,434,000 stock options subject to vesting provisions. Approximately 80% of the expense related to the Equity Incentive Plan is included in salaries and benefits expense and the remainder in directors' fees. Beyond that item, the new Westwood branch, which opened in the fourth quarter of last year, contributed just under $300,000 to the growth in noninterest expense.

ASSET QUALITY
The provision for loan losses, which in all quarters reflects management’s assessment of risks inherent in the loan portfolio, was a credit of $27,000 in the first quarter of 2016 compared to a $1.9 million charge in the fourth quarter of 2015 and a $279,000 charge in the first quarter of 2015. The decline in the provision from the fourth quarter is due to the following factors:

  • The reversal of a significant portion of a specific reserve established in the fourth quarter against loans secured by one income property as the credit situation improved.
  • Changes to certain qualitative factors used in the calculation of the allowance for loans resulted in a lower allowance/loans ratio. The allowance for loan losses as a percentage of total loans declined to 1.07% at March 31, 2016 from 1.11% at December 31, 2015 and 1.12% at March 31, 2015. The impact on the first quarter provision for loan losses from this change was mainly related to the residential mortgage portfolio.
  • Loan growth impacts the level of provision needed each quarter and a decline in loan growth to 3% in the first quarter from 13% in the fourth quarter resulted in a smaller provision.

The Company had net loan charge-offs of $90,000 in the first quarter of 2016 compared to net recoveries of $71,000 in the fourth quarter of 2015 and net charge-offs of $14,000 in the first quarter of 2015. Nonperforming assets were $10.9 million at March 31, 2016 compared to $10.7 million at December 31, 2015 and $4.8 million at March 31, 2015. At March 31, 2016, 56% of the nonperforming assets were residential mortgage loans and 40% related to the aforementioned loans secured by one income property, which were first placed on nonaccrual in the fourth quarter of last year. Nonperforming assets as a percentage of total assets were 0.51% at both March 31, 2016 and December 31, 2015, compared to 0.27% at March 31, 2015.

ABOUT BLUE HILLS BANCORP

Blue Hills Bancorp, Inc., with corporate headquarters in Norwood MA, had assets of $2.2 billion at March 31, 2016 and operates 11 branch offices in Brookline, Dedham, Hyde Park, Milton, Nantucket, Norwood, West Roxbury, and Westwood, Massachusetts. Blue Hills Bank is a full service, community bank with its main office in Hyde Park, Massachusetts. The Bank's three branches in Nantucket, Massachusetts operate under the name, Nantucket Bank, a division of Blue Hills Bank. The Bank provides consumer and commercial deposit and loan products to Eastern Massachusetts through a growing branch network and eCommerce channels. The Bank offers commercial business and commercial real estate loans in addition to cash management services and commercial deposit accounts. The Bank also serves consumers through a full suite of consumer banking products including checking accounts, mortgage loans, equity lines of credit and traditional savings and certificate of deposit accounts. The Bank has invested substantially in online technology including online account opening and funding, online mortgage applications, online banking, mobile banking, bill pay and mobile deposits. Blue Hills Bank has been serving area residents for over 140 years. For more information about Blue Hills Bank, visit the Blue Hills web site at www.bluehillsbank.com.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This press release, as well as other written communications made from time to time by the Company and its subsidiaries and oral communications made from time to time by authorized officers of the Company, may contain statements relating to the future results of the Company (including certain projections and business trends) that are considered "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995 (the PSLRA). Such forward-looking statements may be identified by the use of such words as "believe," "expect," "anticipate," "should," "planned," "estimated," "intend" and "potential." For these statements, the Company claims the protection of the safe harbor for forward-looking statements contained in the PSLRA.

The Company cautions you that a number of important factors could cause actual results to differ materially from those currently anticipated in any forward-looking statement. Such factors include, but are not limited to: our ability to implement successfully our business strategy, which includes significant asset and liability growth; changes that could adversely affect the business in which the Company and the Bank are engaged; prevailing economic and geopolitical conditions; changes in interest rates, loan demand, real estate values and competition; changes in accounting principles, policies, and guidelines; changes in any applicable law, rule, regulation or practice with respect to tax or legal issues; and other economic, competitive, governmental, regulatory and technological factors affecting the Company's operations, pricing, products and services. For additional information on some of the risks and important factors that could affect the Company’s future results and financial condition, see “Risk Factors” in the Company’s Annual Report on Form 10-K as filed with the Securities and Exchange Commission. The forward-looking statements are made as of the date of this release, and, except as may be required by applicable law or regulation, the Company assumes no obligation to update the forward-looking statements or to update the reasons why actual results could differ from those projected in the forward-looking statements.

 

Blue Hills Bancorp, Inc.
Consolidated Balance Sheets

(Unaudited, dollars in thousands)             % Change  
March 31, 2016   December 31, 2015   March 31, 2015  

March 31, 2016 vs.
December 31, 2015

 

March 31, 2016 vs.
March 31, 2015

Assets        
Cash and due from banks $ 13,852 $ 10,932 $ 10,045 26.7 % 37.9 %
Short term investments   18,157       22,366       26,966   (18.8 )% (32.7 )%
Total cash and cash equivalents 32,009 33,298 37,011 (3.9 )% (13.5 )%
Securities available for sale, at fair value 237,669 231,690 429,551 2.6 % (44.7 )%
Securities held to maturity, at amortized cost 196,578 200,141 (1.8 )% NM
Federal Home Loan Bank stock, at cost 16,137 13,567 11,702 18.9 % 37.9 %
Loans held for sale 3,926 12,877 17,681 (69.5 )% (77.8 )%
Loans:
1-4 family residential 621,801 602,138 463,334 3.3 % 34.2 %
Home equity 80,571 77,633 63,276 3.8 % 27.3 %
Commercial real estate 586,151 559,609 405,670 4.7 % 44.5 %
Construction   92,481       79,386       59,513   16.5 % 55.4 %
Total real estate loans 1,381,004 1,318,766 991,793 4.7 % 39.2 %
Commercial business 168,976 182,536 154,367 (7.4 )% 9.5 %
Consumer   36,977       39,075       32,845   (5.4 )% 12.6 %
Total loans 1,586,957 1,540,377 1,179,005 3.0 % 34.6 %
Allowance for loan losses   (16,985 )     (17,102 )     (13,238 ) (0.7 )% 28.3 %
Loans, net 1,569,972 1,523,275 1,165,767 3.1 % 34.7 %
Premises and equipment, net 20,099 20,015 18,869 0.4 % 6.5 %
Accrued interest receivable 5,588 5,344 4,793 4.6 % 16.6 %
Goodwill and core deposit intangible 11,443 11,785 12,955 (2.9 )% (11.7 )%
Net deferred tax asset 8,774 10,665 5,172 (17.7 )% 69.6 %
Bank-owned life insurance 31,883 31,626 30,848 0.8 % 3.4 %
Other assets   28,150       20,060       23,535   40.3 % 19.6 %
Total assets $ 2,162,228     $ 2,114,343     $ 1,757,884   2.3 % 23.0 %
Liabilities and Stockholders' Equity
NOW and demand $ 285,391 $ 288,143 $ 256,746 (1.0 )% 11.2 %
Regular savings 283,586 287,344 301,932 (1.3 )% (6.1 )%
Money market 408,591 368,050 269,164 11.0 % 51.8 %
Certificates of deposit 329,012 311,978 310,672 5.5 % 5.9 %
Brokered money market 46,673 41,807 23,991 11.6 % 94.5 %
Brokered certificates of deposit   131,352       136,527       58,705   (3.8 )% 123.7 %
Total deposits 1,484,605 1,433,849 1,221,210 3.5 % 21.6 %
Short-term borrowings 170,000 205,000 70,000 (17.1 )% 142.9 %
Long-term debt 85,000 55,000 35,000 54.5 % 142.9 %
Other liabilities   29,067       21,665       16,730   34.2 % 73.7 %
Total liabilities   1,768,672       1,715,514       1,342,940   3.1 % 31.7 %
Common stock 269 276 285 (2.5 )% (5.6 )%
Additional paid-in capital 260,041 269,078 281,094 (3.4 )% (7.5 )%
Unearned compensation- ESOP (21,065 ) (21,255 ) (21,825 ) 0.9 % (3.5 )%
Retained earnings 157,090 155,918 151,029 0.8 % 4.0 %
Accumulated other comprehensive income (loss)   (2,779 )     (5,188 )     4,361   (46.4 )% (163.7 )%
Total stockholders' equity   393,556       398,829       414,944   (1.3 )% (5.2 )%
Total liabilities and stockholders' equity $ 2,162,228     $ 2,114,343     $ 1,757,884   2.3 % 23.0 %
 
 

Blue Hills Bancorp, Inc.
Consolidated Balance Sheet Trend

                     
(Unaudited, dollars in thousands) March 31, 2016   December 31, 2015   September 30, 2015   June 30, 2015   March 31, 2015
Assets        
Cash and due from banks $ 13,852 $ 10,932 $ 9,447 $ 10,162 $ 10,045
Short term investments   18,157       22,366       11,533       43,240       26,966  
Total cash and cash equivalents 32,009 33,298 20,980 53,402 37,011
Securities available for sale, at fair value 237,669 231,690 231,697 431,827 429,551
Securities held to maturity, at amortized cost 196,578 200,141 197,632
Federal Home Loan Bank stock, at cost 16,137 13,567 11,702 11,702 11,702
Loans held for sale 3,926 12,877 21,423 1,833 17,681
Loans:
1-4 family residential 621,801 602,138 541,382 510,406 463,334
Home equity 80,571 77,633 73,494 65,735 63,276
Commercial real estate 586,151 559,609 497,217 448,125 405,670
Construction   92,481       79,386       54,283       60,553       59,513  
Total real estate loans 1,381,004 1,318,766 1,166,376 1,084,819 991,793
Commercial business 168,976 182,536 163,971 151,012 154,367
Consumer   36,977       39,075       36,855       33,995       32,845  
Total loans 1,586,957 1,540,377 1,367,202 1,269,826 1,179,005
Allowance for loan losses   (16,985 )     (17,102 )     (15,082 )     (13,777 )     (13,238 )
Loans, net 1,569,972 1,523,275 1,352,120 1,256,049 1,165,767
Premises and equipment, net 20,099 20,015 19,485 18,969 18,869
Accrued interest receivable 5,588 5,344 5,174 4,878 4,793
Goodwill and core deposit intangible 11,443 11,785 12,151 12,541 12,955
Net deferred tax asset 8,774 10,665 8,368 7,015 5,172
Bank-owned life insurance 31,883 31,626 31,358 31,100 30,848
Other assets   28,150       20,060       22,348       15,251       23,535  
Total assets $ 2,162,228     $ 2,114,343     $ 1,934,438     $ 1,844,567     $ 1,757,884  
Liabilities and Stockholders' Equity
NOW and demand $ 285,391 $ 288,143 $ 284,720 $ 268,126 $ 256,746
Regular savings 283,586 287,344 288,597 291,628 301,932
Money market 408,591 368,050 341,588 296,539 269,164
Certificates of deposit 329,012 311,978 310,424 310,365 310,672
Brokered money market 46,673 41,807 33,924 23,759 23,991
Brokered certificates of deposit   131,352       136,527       85,705       83,705       58,705  
Total deposits 1,484,605 1,433,849 1,344,958 1,274,122 1,221,210
Short-term borrowings 170,000 205,000 115,000 95,000 70,000
Long-term debt 85,000 55,000 45,000 35,000 35,000
Other liabilities   29,067       21,665       21,868       26,704       16,730  
Total liabilities   1,768,672       1,715,514       1,526,826       1,430,826       1,342,940  
Common stock 269 276 282 285 285
Additional paid-in capital 260,041 269,078 276,730 281,164 281,094
Unearned compensation- ESOP (21,065 ) (21,255 ) (21,445 ) (21,635 ) (21,825 )
Retained earnings 157,090 155,918 153,969 152,728 151,029
Accumulated other comprehensive income (loss)   (2,779 )     (5,188 )     (1,924 )     1,199       4,361  
Total stockholders' equity   393,556       398,829       407,612       413,741       414,944  
Total liabilities and stockholders' equity $ 2,162,228     $ 2,114,343     $ 1,934,438     $ 1,844,567     $ 1,757,884  
 
 

Blue Hills Bancorp, Inc.
Consolidated Statement of Net Income-Quarters

         
(Unaudited, dollars in thousands, except share data) Quarters Ended   % Change  
March 31, 2016   December 31, 2015   March 31, 2015  

March 31, 2016 vs.
December 31, 2015

 

March 31, 2016 vs.
March 31, 2015

Interest and fees on loans $ 13,603   $ 12,647   $ 10,427   7.6 %   30.5 %
Interest on securities 2,295 2,228 2,136 3.0 % 7.4 %
Dividends 139 2,183 100 (93.6 )% 39.0 %
Other   26       13     19     100.0 %   36.8 %
Total interest and dividend income   16,063       17,071     12,682     (5.9 )%   26.7 %
Interest on deposits 2,292 2,093 1,763 9.5 % 30.0 %
Interest on borrowings   570       406     254     40.4 %   124.4 %
Total interest expense   2,862       2,499     2,017     14.5 %   41.9 %
Net interest and dividend income 13,201 14,572 10,665 (9.4 )% 23.8 %
Provision (credit) for loan losses   (27 )     1,949     279     (101.4 )%   (109.7 )%
Net interest and dividend income, after provision for loan losses   13,228       12,623     10,386     4.8 %   27.4 %
Deposit account fees 317 327 333 (3.1 )% (4.8 )%
Interchange and ATM fees 347 378 326 (8.2 )% 6.4 %
Mortgage banking 244 46 101 430.4 % 141.6 %
Loan level derivative fee income 639 833 4 (23.3 )% 15,875.0 %
Realized securities gains (losses), net (244 ) 145 1,318 (268.3 )% (118.5 )%
Bank-owned life insurance income 257 268 253 (4.1 )% 1.6 %
Miscellaneous   (183 )     327     (151 )   (156.0 )%   21.2 %
Total noninterest income   1,377       2,324     2,184     (40.7 )%   (37.0 )%
Salaries and employee benefits 6,885 5,849 5,489 17.7 % 25.4 %
Occupancy and equipment 1,619 1,688 1,498 (4.1 )% 8.1 %
Data processing 761 909 819 (16.3 )% (7.1 )%
Professional fees 481 780 632 (38.3 )% (23.9 )%
Advertising 532 776 500 (31.4 )% 6.4 %
FDIC deposit insurance 346 192 292 80.2 % 18.5 %
Directors' fees 338 315 124 7.3 % 172.6 %
Amortization of core deposit intangible 342 366 437 (6.6 )% (21.7 )%
Other general and administrative   764       1,073     835     (28.8 )%   (8.5 )%
Total noninterest expense   12,068       11,948     10,626     1.0 %   13.6 %
Income before income taxes 2,537 2,999 1,944 (15.4 )% 30.5 %
Provision for income taxes   870       587     638     48.2 %   36.4 %
Net income $ 1,667     $ 2,412   $ 1,306     (30.9 )%   27.6 %
 
Earnings per common share:
Basic $ 0.07 $ 0.09 $ 0.05
Diluted $ 0.07 $ 0.09 $ 0.05
Weighted average shares outstanding:
Basic 25,066,086 25,500,755 26,274,738
Diluted 25,132,441 25,554,961 26,274,738
 
 
Blue Hills Bancorp Inc.
Consolidated Statements of Net Income - Trend
    Quarters Ended
(Unaudited, dollars in thousands, except share data) March 31,
2016
  December 31,
2015
  September 30,
2015
  June 30,
2015
  March 31,
2015
Interest and fees on loans $ 13,603 $ 12,647 $ 11,509 $ 10,759 $ 10,427
Interest on securities 2,295 2,228 2,227 2,237 2,136
Dividends 139 2,183 1,673 112 100
Other   26       13     9       22     19  
Total interest and dividend income   16,063       17,071     15,418       13,130     12,682  
Interest on deposits 2,292 2,093 1,926 1,745 1,763
Interest on borrowings   570       406     287       270     254  
Total interest expense   2,862       2,499     2,213       2,015     2,017  
Net interest and dividend income 13,201 14,572 13,205 11,115 10,665
Provision (credit) for loan losses   (27 )     1,949     1,318       544     279  
Net interest and dividend income, after provision for loan losses   13,228       12,623     11,887       10,571     10,386  
Deposit account fees 317 327 319 335 333
Interchange and ATM fees 347 378 430 377 326
Mortgage banking 244 46 52 83 101
Loan level derivative fee income 639 833 513 770 4
Realized securities gains (losses), net (244 ) 145 238 267 1,318
Bank-owned life insurance income 257 268 258 252 253
Miscellaneous   (183 )     327     (116 )     393     (151 )
Total noninterest income   1,377       2,324     1,694       2,477     2,184  
Salaries and employee benefits 6,885 5,849 5,591 5,641 5,489
Occupancy and equipment 1,619 1,688 1,617 1,464 1,498
Data processing 761 909 939 843 819
Professional fees 481 780 610 667 632
Advertising 532 776 620 562 500
FDIC deposit insurance 346 192 262 253 292
Directors' fees 338 315 112 93 124
Amortization of core deposit intangible 342 366 390 414 437
Other general and administrative   764       1,073     707       723     835  
Total noninterest expense   12,068       11,948     10,848       10,660     10,626  
Income before income taxes 2,537 2,999 2,733 2,388 1,944
Provision for income taxes   870       587     923       689     638  
Net income $ 1,667     $ 2,412   $ 1,810     $ 1,699   $ 1,306  
 
Earnings per common share:
Basic $ 0.07 $ 0.09 $ 0.07 $ 0.06 $ 0.05
Diluted $ 0.07 $ 0.09 $ 0.07 $ 0.06 $ 0.05
Weighted average shares outstanding:
Basic 25,066,086 25,500,755 26,183,381 26,293,560 26,274,738
Diluted 25,132,441 25,554,961 26,183,381 26,293,560 26,274,738
 
 
Blue Hills Bancorp Inc.
Average Balances/Yields
(Unaudited, dollars in thousands)     Quarters Ended
March 31, 2016   December 31, 2015   March 31, 2015

Average
balance

  Interest  

Yield/
Cost

 

Average
balance

  Interest  

Yield/
Cost

 

Average
balance

  Interest  

Yield/
Cost

Interest-earning assets            
Total loans (1) $ 1,569,240 $ 13,656 3.50 % $ 1,449,494 $ 12,700 3.48 % $ 1,178,716 $ 10,470 3.60 %
Securities (1) 430,015 2,368 2.21 427,752 4,347 4.03 422,092 2,221 2.13
Other interest earning assets and FHLB stock   36,723     126     1.38     33,222     111     1.33     50,603     70     0.56  
Total interest-earning assets 2,035,978 16,150 3.19 % 1,910,468 17,158 3.56 % 1,651,411 12,761 3.13 %
Non-interest-earning assets   100,534   91,732   97,427
Total assets $ 2,136,512 $ 2,002,200 $ 1,748,838
 
Interest-bearing liabilities
NOW $ 135,367 $ 16 0.05 % $ 134,162 $ 19 0.06 % $ 122,226 $ 14 0.05 %
Regular savings 286,533 251 0.35 287,003 264 0.36 301,135 319 0.43
Money market 430,989 846 0.79 397,998 729 0.73 297,359 508 0.69
Certificates of deposit   435,574     1,179     1.09     396,552     1,081     1.08     353,480     922     1.06  
Total interest-bearing deposits 1,288,463 2,292 0.72 1,215,715 2,093 0.68 1,074,200 1,763 0.67
Borrowings   277,857     570     0.83     207,446     406     0.78     108,556     254     0.95  
Total interest-bearing liabilities 1,566,320   2,862   0.73 % 1,423,161   2,499   0.70 % 1,182,756   2,017   0.69 %
Non-interest-bearing deposits 147,961 154,872 125,915
Other non-interest-bearing liabilities   26,471   21,878   25,681
Total liabilities 1,740,752 1,599,911 1,334,352
Stockholders' equity   395,760   402,289   414,486
Total liabilities and stockholders' equity $ 2,136,512 $ 2,002,200 $ 1,748,838
 
Net interest and dividend income (FTE) 13,288 14,659 10,744
Less: FTE adjustment   (87 )   (87 )   (79 )
Net interest and dividend income (GAAP) $ 13,201   $ 14,572   $ 10,665  
 
Net interest rate spread (FTE) 2.46 % 2.86 % 2.44 %
Net interest margin (FTE) 2.62 % 3.04 % 2.64 %
Total deposit cost 0.64 % 0.61 % 0.60 %

(1) Interest income on tax-exempt securities and loans was adjusted to a fully taxable-equivalent (FTE) basis using a federal statutory tax rate of 34%.

 
Blue Hills Bancorp, Inc.
Average Balances - Trend
(Unaudited, dollars in thousands)     Quarters Ended
March 31,
2016
  December 31,
2015
  September 30,
2015
  June 30,
2015
  March 31,
2015
Interest-earning assets        
Total loans $ 1,569,240 $ 1,449,494 $ 1,316,514 $ 1,223,681 $ 1,178,716
Securities 430,015 427,752 429,667 429,348 422,092
Other interest earning assets and FHLB stock   36,723     33,222     34,061     42,832     50,603
Total interest-earning assets 2,035,978 1,910,468 1,780,242 1,695,861 1,651,411
Non-interest-earning assets   100,534     91,732     89,085     92,390     97,427
Total assets $ 2,136,512   $ 2,002,200   $ 1,869,327   $ 1,788,251   $ 1,748,838
 
Interest-bearing liabilities
NOW $ 135,367 $ 134,162 $ 128,298 $ 123,904 $ 122,226
Regular savings 286,533 287,003 289,236 298,850 301,135
Money market 430,989 397,998 348,658 297,903 297,359
Certificates of deposit   435,574     396,552     392,170     371,150     353,480
Total interest-bearing deposits 1,288,463 1,215,715 1,158,362 1,091,807 1,074,200
Borrowings   277,857     207,446     135,554     134,362     108,556
Total interest-bearing liabilities 1,566,320 1,423,161 1,293,916 1,226,169 1,182,756
Non-interest-bearing deposits 147,961 154,872 142,328 130,276 125,915
Other non-interest-bearing liabilities   26,471     21,878     20,368     16,091     25,681
Total liabilities 1,740,752 1,599,911 1,456,612 1,372,536 1,334,352
Stockholders' equity   395,760     402,289     412,715     415,715     414,486
Total liabilities and stockholders' equity $ 2,136,512   $ 2,002,200   $ 1,869,327   $ 1,788,251   $ 1,748,838
 
 
Blue Hills Bancorp, Inc.
Yield Trend
(Unaudited, dollars in thousands)     Quarters Ended
March 31,
2016
  December 31,
2015
  September 30,
2015
  June 30,
2015
  March 31,
2015
Interest-earning assets        
Total loans (1) 3.50 % 3.48 % 3.48 % 3.54 % 3.60 %
Securities (1) 2.21 % 4.03 % 3.54 % 2.18 % 2.13 %
Other interest earning assets and FHLB stock 1.38 %   1.33 %   1.23 %   0.68 %   0.56 %
Total interest-earning assets 3.19 %   3.56 %   3.46 %   3.13 %   3.13 %
 
Interest-bearing liabilities
NOW 0.05 % 0.06 % 0.05 % 0.05 % 0.05 %
Regular savings 0.35 % 0.36 % 0.37 % 0.39 % 0.43 %
Money market 0.79 % 0.73 % 0.69 % 0.63 % 0.69 %
Certificates of deposit 1.09 %   1.08 %   1.05 %   1.05 %   1.06 %
Total interest-bearing deposits 0.72 % 0.68 % 0.66 % 0.64 % 0.67 %
Borrowings 0.83 %   0.78 %   0.84 %   0.81 %   0.95 %
Total interest-bearing liabilities 0.73 %   0.70 %   0.68 %   0.66 %   0.69 %
 
Net interest rate spread (FTE) 2.46 % 2.86 % 2.78 % 2.47 % 2.44 %
Net interest margin (FTE) 2.62 % 3.04 % 2.96 % 2.65 % 2.64 %
Total deposit cost 0.64 % 0.61 % 0.59 % 0.57 % 0.60 %
 

(1) Interest income on tax-exempt securities and loans was adjusted to a fully taxable-equivalent (FTE) basis using a federal statutory tax rate of 34%.

 
Blue Hills Bancorp, Inc.
Selected Financial Highlights
(Unaudited, dollars in thousands, except share data)     Quarters Ended
March 31,
2016
  December 31,
2015
  September 30,
2015
  June 30,
2015
  March 31,
2015
Performance Ratios (annualized)        
Basic and diluted EPS $ 0.07 $ 0.09 $ 0.07 $ 0.06 $ 0.05
 
Return on average assets (ROAA) 0.31 % 0.48 % 0.38 % 0.38 % 0.30 %
 
Return on average equity (ROAE) 1.69 % 2.38 % 1.74 % 1.64 % 1.28 %
 
Return on average tangible common equity (ROATCE) 1.75 % 2.45 % 1.79 % 1.70 % 1.32 %
 
Efficiency Ratio 83 % 70 % 73 % 78 % 83 %
 
 
Blue Hills Bancorp, Inc.
Selected Financial Highlights
(Unaudited, dollars in thousands, except share data)     At or for the Quarters Ended
March 31,
2016
  December 31,
2015
  March 31,
2015
Asset Quality    
Nonperforming Assets $ 10,941 $ 10,744 $ 4,766
Nonperforming Assets/Total Assets 0.51 % 0.51 % 0.27 %
Allowance for Loan Losses/Total Loans 1.07 % 1.11 % 1.12 %
Net Charge-offs (Recoveries) $ 90 $ (71 ) $ 14
Annualized Net Charge-offs (Recoveries)/Average Loans 0.02 % (0.02 )% %
Allowance for Loan Losses/ Nonperforming Loans 155 % 159 % 278 %
 
Capital/Other
Common shares outstanding 27,786,642 28,492,732 28,466,813
Book value per share $ 14.16 $ 14.00 $ 14.58
Tangible book value per share $ 13.75 $ 13.58 $ 14.12
Tangible Common Equity/Tangible Assets 17.77 % 18.41 % 23.04 %
Full-time Equivalent Employees 219 209 204
 

Contacts

Blue Hills Bancorp Inc.

William Parent, 617-360-6520

Blue Hills Bancorp, Inc.