Blue Hills Bancorp, Inc. (BHBK) 10-Q Quarterly Report May 2017

NORWOOD, Mass., April 25, 2017--(GLOBE NEWSWIRE)- 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

$7.5 million, or $0.31 per diluted share, for the first quarter of 2017, compared to net income of $4.0 million, or $0.17 per diluted share, for the fourth quarter of 2016 and net income of $1.7 million, or $0.07 per diluted share, for the first quarter of 2016.

The first quarter of 2017 included a pre-tax gain of $5.9 million ($3.8 million after-tax, or $0.16 per diluted share) from the Company's investment in Northeast Retirement Services, Inc., which was acquired by Community Bank System, Inc., a pre-tax loss of $1.1 million ($676,000 after-tax, or $0.03 per diluted share) from the sale of the Company's investments in mutual funds, and the reversal of a valuation allowance for state taxes of $1.7 million, or $0.07 per diluted share. Excluding these three items, net income was $2.7 million, or $0.11 per diluted share, for first quarter of 2017.

Commenting on the Company's results, William Parent, President and Chief Executive Officer of Blue Hills Bancorp, said, "We got off to a good start in 2017 with loan and deposit growth continuing at a solid pace. Compared to a year ago, loans are up 25% and deposits, excluding brokered deposits, are up 21% with deposit growth seen across all customer segments. Deposits at our newest branch in the Seaport District of Boston, which opened in October of last year, have grown to $51 million at the end of March. In-house mortgage originations in the first quarter increased compared to a year ago and this comes after in-house originations doubled in 2016 from 2015. During the first quarter, we also made a strategic decision to sell our portfolio of mutual fund investments, which allowed us to reduce wholesale funding and will help to alleviate some of the volatility we had experienced in our quarterly earnings with regard to mutual fund dividends. Finally, improving our operating leverage, returns and efficiency ratio continues to be a top priority for us. Progress this quarter is reflected in the improvement in our core net interest margin, which has benefited from Federal Reserve interest rate increases, and a linked-quarter decline in noninterest expense."

BALANCE SHEET

Compared to December 31, 2016, total assets grew $27 million, or 1%, to $2.5 billion at March 31, 2017. The increase was driven by loan growth as total loans increased $56 million, or 3%, to $2.0 billion at March 31, 2017. By category, the increase was mainly driven by residential mortgage loans, which were up $42 million, or 5%, and commercial real estate loans, which were up $15 million, or 2%. The increase in loans was partially offset by a $31 million, or 15%, decline in securities available for sale, primarily due to the aforementioned sale of the mutual fund portfolio.

Compared to March 31, 2016, total assets increased $334 million, or 15%. Total loans also drove the growth in total assets in this comparison, increasing $400 million, or 25%. By category, the increase from March 31, 2016 was due to residential mortgage loans, which were up $275 million, or 44%, commercial real estate loans, which were up $115 million, or 20%, and commercial business loans, which were up $41 million, or 24%. Residential mortgage loan originations were $91 million in the first quarter of 2017 compared to $65 million in the first quarter of 2016 as the expanded origination team continued to grow the business and gain market share. In the first quarter of 2017, commercial loans (real estate and non-real estate combined) totaling $55 million were added to the balance sheet compared to $74 million in the first quarter of 2016. The growth in loans was partially offset by a $64 million, or 27%, decline in securities available for sale, due to the previously discussed sale of the mutual fund portfolio and lower levels of fixed income securities.

Compared to December 31, 2016, deposits grew $48 million, or 3%, to $1.9 billion at March 31, 2017 reflective of growth in all customer segments (consumer, small business, commercial and municipal). The new Seaport branch contributed $21 million to the increase. By category, the increase was primarily driven by a $50 million increase in money market accounts and smaller increases in NOW and demand, regular savings and certificates of deposit. These increases were partially offset by a $19 million decline in brokered certificates of deposit, which along with a $28 million, or 19%, decrease in short-term borrowings to $118 million at March 31, 2017 contributed to a reduced reliance on wholesale funding.

Compared to March 31, 2016, deposits grew $372 million, or 25%, and included growth in all customer segments. By category, the most significant increases were seen in money market deposits, which were up $214 million, brokered certificates of deposit, which were up $97 million, and NOW and demand deposits, which were up $57 million. A $52 million decline in short-term borrowings was partially offset by a $20 million increase in long-term borrowings.

Stockholders’ equity was $397 million at March 31, 2017 compared to $387 million at December 31, 2016 and $394 million at March 31, 2016. The increase in stockholders' equity from the end of 2016 was mainly due to first quarter 2017 net income of $7.5 million coupled with a $1.9 million decline in the accumulated other comprehensive loss. The major factors impacting the change in stockholders' equity from

The following information was filed by Blue Hills Bancorp, Inc. (BHBK) on Tuesday, April 25, 2017 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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Blue Hills Bancorp, Inc. provided additional information to their SEC Filing as exhibits

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Exhibit 32.0: Section 1350 Certification

Ticker: BHBK
CIK: 1601545
Form Type: 10-Q Quarterly Report
Accession Number: 0001601545-17-000022
Submitted to the SEC: Fri May 05 2017 9:20:39 AM EST
Accepted by the SEC: Fri May 05 2017
Period: Friday, March 31, 2017
Industry: State Commercial Banks

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