VSB Bancorp Inc. Concludes 2018 With Net Income Jump Exceeding 216 Percent

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VSB Bancorp Inc. Concludes 2018 With Net Income Jump Exceeding 216 Percent

The only community-based commercial bank in Staten Island, N.Y., experiences 27 percent increase in annual earnings

STATEN ISLAND, N.Y. (Nov. 22, 2019) – VSB Bancorp, Inc. (OTCQX: VSBN) had a net income of $1,017,813 for the fourth quarter of 2018, an increase of $696,277, or 216.6 percent, from the fourth quarter of 2017, according to recently released unaudited figures. VSB Bancorp, Inc. is the one-bank holding company for Victory State Bank, the only community-based business bank in Staten Island, N.Y.

Pre-tax income was $1,330,838 in the fourth quarter of 2018, compared to $1,208,644 for the fourth quarter of 2017.

VSB Bancorp, Inc.’s total stockholders’ equity increased by $2.4 million, to $35 million at Dec.31, 2018 from $32.6 million at the close of 2017, which, according to the bank, was principally due to $2.5 million in retained earnings, net of cash dividends, $238,863 in additional paid in capital, and $100,125 of amortization of the bank’s Employee Stock Ownership Plan (ESOP) loan. These were partially offset by an increase in accumulated other comprehensive loss of $432,502 due to the effect of increased market interest rate conditions on the fair value of VSBN’s investment securities portfolio, the bank explained.  

VSB Bancorp’s Tier 1 capital ratio was 9.43 percent at Dec. 31, 2018. Book value per common share increased from $17.82 at year-end 2017 to $19.13 at the conclusion of 2018.

“We were able to collect past due interest on two loans that were previously non-accrual status,” stated Raffaele (Ralph) M. Branca, president and CEO of VSB Bancorp, Inc. “This helped to boost our quarterly earnings. As construction loan payoffs continue to repay, we will seek additional avenues to replenish those loans that meet our underwriting criteria.”

NET INCOME

Net income for the bank’s fourth quarter of 2018 was $1,017,813, or basic income of 57 cents per common share, compared to net income of $321,536, or 18 cents basic net income per common share, for the same period a year earlier. Return on average assets increased from 0.28 percent in the fourth quarter of 2017 to 0.75 percent in the fourth quarter of 2018, while return on average equity increased from 3.03 percent to 8.32 percent.

“Our year-over-year net income increased by 27 percent,” stated Joseph J. LiBassi, chairman of  VSB Bancorp, Inc. “We paid our 45th consecutive cash dividend, raised our quarterly cash dividend by 2 cents per common share in 2018, and our book value per share now stands at $19.13. By delivering the best in personal service to our customers, we continue to find opportunities to increase earnings and shareholder value.”

VSB Bancorp, Inc.’s non-interest income increased by $16,195 to $675,824 in the fourth quarter of 2018, compared to $659,629 in the same quarter in 2017. The increase was mainly a result of a $60,303 in loan fees, as the bank earned a higher level of pre-payment fees in 2018, and a $12,531 increase in service charges on deposits. These increases were partially offset by a $61,811 decrease in net rental income as the financial institution repurposed one of its rental properties into a business service center for the bank’s own use.

TOTAL ASSETS

Total assets increased to $373.8 million at Dec. 31, 2018, an increase of $24 million, or 6.9 percent, from Dec. 31, 2017. The largest components of this increase were a $16.3 million increase in cash and other liquid assets and a $14.6 million increase in investment securities, partially offset by a $9.1 million decrease in loans, as the bank experienced large payoffs in its construction loan portfolio in 2018.

For the year ended 2018, pre-tax income decreased by $355,437 to $4.3 million when compared to 2017. Net income for the year ended Dec.31, 2018 increased by $698,441, or 27.3 percent, to $3.3 million, or basic net income of $1.83 per common share compared to $2.6 million, or basic net income of $1.44 per common share in the 2017 period.

The $698,441 increase in net income at the close of 2018 was attributable to a number of factors. On the positive side, the bank had a $1,053,878 decrease in income tax expense and $590,878 increase in net interest income (due to higher average investment securities balances in 2018). These items were partially offset by $780,724 increase in non-interest expenses and a $55,591 decrease in other income.

ABOUT VSB BANCORP, INC.

VSB Bancorp, Inc. (OTCQX: VSBN) is the one-bank holding company for Victory State Bank. As Staten Island, N.Y.’s only community-based commercial bank, Victory State Bank operates five full-service locations on the Island, including the main office in the community of Great Kills and branches in West Brighton, St. George, Dongan Hills and Rosebank. 

A planned sixth branch, to be situated in Meiers Corners, has received both regulatory and building department approvals.

Victory State Bank commenced operations on Nov. 17, 1997. The Bank’s initial capitalization of $7 million was primarily raised in the Staten Island community. The Bancorp’s total equity has increased to $35 million primarily through the retention of earnings.

For additional information, Victory State Bank may be reached at 718-979-1100, or visited online at www.VictoryStateBank.com.

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, weaknesses of other financial institutions, changes in customer preferences, and changes in competition within Victory State Bank’s 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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