Market Overview

Georgetown Bancorp, Inc. Reports Continued Profitability for the Three and Nine Months Ended September 30, 2012

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GEORGETOWN, Mass.--(BUSINESS WIRE)--

Georgetown Bancorp, Inc. (NASDAQ: GTWN) (the “Company”), holding company for Georgetown Bank (the “Bank”), reported net income for the three months ended September 30, 2012 of $244,000, or $.13 per basic and diluted share, compared to net income of $284,000, or $.15 per basic and diluted share, for the three months ended September 30, 2011. Net income for the nine months ended September 30, 2012 was $532,000, or $.28 per basic and diluted share, compared to net income of $596,000, or $.31 per basic and diluted share, for the nine months ended September 30, 2011.

Robert E. Balletto, President and Chief Executive Officer, said, “The weak economic environment and increased competition has hampered our commercial loan growth over the past several quarters. That, coupled with a declining interest rate environment, has put pressure on asset yields and ultimately our net interest income. The increase in non-performing loans from the June 30, 2012 balance was primarily due to one commercial real estate loan. Our non-interest income has increased 96% for the nine months ended September 30, 2012, from the same period in 2011, driven by the continued development of our mortgage banking operation.”

Georgetown Bancorp, Inc.
Selected Financial Data
       
 
 
At or for the At or for the
Period Ended Year Ended
September 30, 2012 December 31, 2011
(Dollars in thousands, except share data)
Selected Financial Condition Data:
Total assets $ 211,760 $ 199,375
Cash and cash equivalents 26,840 19,083
Loans receivable, net 163,592 161,120
Allowance for loan losses 1,751 1,824
Investment securities (1) 8,509 6,496
Deposits 152,890 151,085
Borrowings 24,600 25,694
 
Total stockholders' equity 30,105 20,329
Stockholders' equity to total assets at end of period 14.22 % 10.20 %
Total shares outstanding 1,940,302 2,680,455
 
Asset Quality Data:
Total non-performing loans $ 3,902 $ 3,133
Other real estate owned 208 30
Total non-performing assets 4,110 3,163
Non-performing loans to total loans 2.36 % 1.92 %
Non-performing assets to total assets 1.94 % 1.59 %
Allowance for loan losses to non-performing loans 44.87 % 58.22 %
Allowance for loan losses to total loans 1.06 % 1.12 %
Loans charged off $ 377 $ 788
Recoveries on loans previously charged off 142 12
 
Three Months Ended Nine Months Ended
September 30, September 30,
2012 2011 2012 2011
(Dollars in thousands, except per share data)
Selected Operating Data:
Interest and dividend income $ 2,180 $ 2,573 $ 6,757 $ 8,147
Interest expense   379     581     1,328     1,897  
Net interest income 1,801 1,992 5,429 6,250
Provision for loan losses   67     80     162     825  
Net interest income after
provision for loan losses 1,734 1,912 5,267 5,425
Non-interest income 616 203 1,228 627
Non-interest expense   1,958     1,664     5,668     5,130  
Income before income taxes 392 451 827 922
Income tax provision   148     167     295     326  
Net income $ 244   $ 284   $ 532   $ 596  
 
Net income per share: basic (2) $ 0.13 $ 0.15 $ 0.28 $ 0.31
Net income per share: diluted (2) $ 0.13 $ 0.15 $ 0.28 $ 0.31
 
Performance Ratios:
Return on average assets 0.47 % 0.58 % 0.35 % 0.40 %
Return on average equity 3.39 % 5.75 % 3.06 % 4.06 %
Interest rate spread 3.42 % 4.09 % 3.52 % 4.15 %
Net interest margin 3.59 % 4.32 % 3.71 % 4.37 %
Efficiency ratio (3) 81.02 % 75.83 % 85.14 % 74.60 %
Non-interest expense to average total assets 3.74 % 3.41 % 3.70 % 3.40 %
 
(1) Does not include Federal Home Loan Bank Stock of $2.9 million.
(2) 2011 adjusted to reflect 0.72014 exchange ratio in connection with second-step conversion completed July 11, 2012.
(3) The efficiency ratio represents non-interest expense divided by the sum of net interest income and non-interest income.
 

About Georgetown Bancorp, Inc.

Georgetown Bancorp, Inc. is the holding company for Georgetown Bank. Georgetown Bank, with branch offices in Georgetown, North Andover and Rowley, Massachusetts, is committed to making a positive difference in the communities we serve. We strive to deliver exceptional personal service at all times and to help each of our customers achieve their unique financial goals through a competitive array of commercial and consumer banking services. To learn more about Georgetown Bank, visit www.georgetownbank.com or call 978-352-8600.

Forward-looking statements

This news release may contain certain forward-looking statements, such as statements of the Company's or the Bank's plans, objectives, expectations, estimates and intentions. Forward-looking statements may be identified by the use of words such as “expects,” “subject,” “believe,” “will,” “intends,” “will be” or “would.” These statements are subject to change based on various important factors (some of which are beyond the Company's or the Bank's control) and actual results may differ materially. Accordingly, readers should not place undue reliance on any forward-looking statements (which reflect management's analysis of factors only as of the date of which they are given). These factors include general economic conditions, trends in interest rates, the ability of our borrowers to repay their loans, the ability of the Company or the Bank to effectively manage its growth, and results of regulatory examinations, among other factors. The foregoing list of important factors is not exclusive. Readers should carefully review the risk factors described in other documents the Company files from time to time with the Securities and Exchange Commission, including the final Prospectus filed in connection with our second-step conversion and Current Reports on Form 8-K.

Georgetown Bancorp, Inc.
Joseph W. Kennedy, 978-352-8600
Senior Vice President/CFO
joe.kennedy@georgetownbank.com

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