Don’t tell Belmont Savings Bank you can’t make money taking in deposits and selling loans

Bucking a downward trend affecting the US financial sector where many banks are struggling with sluggish loan growth, BSB Bancorp, the holding company of Belmont Savings Bank, announced record quarterly earnings yesterday, Thursday, Oct. 23, as the Belmont-based state chartered savings bank doubled its net income compared to the same three-month period last year.

The bank, headquartered on Leonard Street in Belmont Center, saw net income in the third quarter of 2014 – in July, August and September – reach $1.2 million with an emphasis on commercial real estate lending and municipal banking. In the first nine months of 2014, the bank reported net income of $2.9 million as compared with $1.3 million in the first three quarters of 2013. 

Since the beginning of the year, the bank’s assets have grown by $281 million to total $1.3 billion on Sept. 30, nearly doubling the size of the bank from $688 million in June 2011 when Belmont Savings went public.

“I am so proud of the work of each of our colleagues. Few teams could accomplish this level of growth while maintaining credit quality and expense control,” said Robert Mahoney, the bank’s CEO and president, in a press release.

Belmont Savings’ stock price (BMLT), $18.40 a share at Friday, Oct. 24 at 1 p.m., is just off its 52 week high of $18.71.

Deposits totaled $931 million, an increase of $168 million or 22 percent from $764.8 million at Dec. 31, 2013. The 33 percent annual growth in deposits in the second quarter of the year, is nearly triple the growth rate of the other 58 Massachusetts banks and double the 17 percent growth among its peers with assets between $925 million to $1.4 billion.

 “We are very pleased that core deposit growth has remained strong. Customer counts and relationship expansion continue to increase in our retail and small business franchises,” said Hal Tovin, the bank’s executive vice president and COO.

But it’s in lending where the bank continues to take big strides. Since the beginning of the year, net loan growth increased by $255 million, up 30 percent. Residential one-to-four family loans, commercial real estate loans, home equity lines of credit, and indirect auto loans increased by $120 million, $63 million, $32 million and $23 million, respectively.

While the bank continues to churn out commercial and business loans – one example being a $18 million loan for Fresh Pond Circle, a 40 unit modular apartment complex in Cambridge – its portfolio is ranked first in lending safety with less than a quarter of one percent (.23 percent) of loans are non-performing. Statewide, the rate is 1.01 percent.

The bank’s lending activity was honored by winning the Best Commercial Real Estate Lending category in Banker & Tradesman’s Best of 2014 issue.

The bank is also increasing its community outreach. Since its creation as a result of the IPO (when it was initially infused with $2 million), the Belmont Savings Bank Foundation has given more than $400,000 to approximately 40 non-profits and educational institutions in Belmont, Watertown, Waltham, Newton and Cambridge. Last month, the foundation  provided a $200,000 matching grant that helped secure the contraction of the new Underwood Pool in Belmont.

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