ITEM 1. BUSINESS
GENERAL
BSB Bancorp, Inc.
BSB Bancorp, Inc. (the "Company") is the Delaware-chartered bank holding company for BSB Bank & Trust Company ("BSB Bank & Trust" or the "Bank"). The Company owns 100% of the issued and outstanding common stock, $1.00 par value, of the Bank, which is the primary asset of the Company. The business of the Company is the business of the Bank. The Company's and the Bank's principal executive offices are located at 58-68 Exchange Street, Binghamton, New York 13901, telephone (607) 779-2406.
The Company, as a bank holding company, is subject to regulation, examination, and supervision by the Board of Governors of the Federal Reserve System (the "Federal Reserve Board"). The Bank is subject to regulation, examination, and supervision by the Federal Deposit Insurance Corporation ("FDIC") and the State of New York Banking Department ("Banking Department"). Unless the context otherwise requires, all references to the Company herein are intended to include the activities of the Bank.
In July 1999, the Company acquired Skaneateles Bancorp, Inc. Pursuant to the terms of the merger, each share of Skaneateles Bancorp common stock was exchanged for .97 share of the Company's common stock.
BSB Bank & Trust Company
The Bank is headquartered in Binghamton, New York and at December 31, 2000 conducted business in Broome, Chemung, Chenango, Onondaga, Oswego, and Tioga Counties, and adjacent areas of New York State. In January 2001, the Bank agreed to sell its Oswego supermarket branch office with approximately $4.5 million of deposits and $1.5 million of loans. At year-end 2000, BSB Bank & Trust served its customers from 22 full-service banking offices with 25 branch-based automatic teller machines (MachineTeller(R)), and 27 off-premise automatic teller machines. The Bank also served its customers at 12 proprietary banking service locations (StoreTeller(R)) situated in a large area supermarket chain.
The primary market area of the Bank is Broome, Chemung, Chenango, Onondaga, Oswego, and Tioga Counties, with a combined population of 1,002,218 according to the 1990 United States Census. The Bank is the leader in total deposits in Broome County. Over the past decade, BSB Bank & Trust has grown from a traditional thrift institution to a diversified financial service organization providing a broad range of deposit and loan products to area businesses and consumers. The Bank is a major provider of banking services to consumers and the business community, as well as offering banking services to school districts and cooperative education centers, cities, towns, villages, and numerous municipal agencies. It is also active in indirect automobile financing.
LENDING ACTIVITIES
Loan Portfolio Composition
BSB Bank & Trust's portfolio of loans totaled $1.8 billion at December 31, 2000, representing 78.7% of the Bank's total assets at that date, compared to $1.7 billion, and 76.9% of the Bank's total assets at December 31, 1999. Commercial loans continued to comprise a significant portion of the loan portfolio, increasing to $997.1 million, or 54.8% of all loans at December 31, 2000 from $904.6 million, or 52.5% of all loans at December 31, 1999. These loans, being generally tied to the Company's Prime Rate, tend to increase the interest rate sensitivity of the loan portfolio. The consumer loan share of the portfolio decreased from 27.2% of all loans at December 31, 1999 to 24.0% or $436.9 million at December 31, 2000. Originations of all consumer loans were $183.2 million for 2000, compared to $262.3 million for 1999. Strong competition from captive finance companies has tempered originations, with total originations for indirect used autos reduced to $57.8 million for 2000 compared to $102.8 million for 1999. Indirect
new auto loan originations decreased from 1999 originations of $33.3 million to $18.2 million in 2000. The combined portfolio of originating consumer loans has decreased the balance of the indirect new and used auto loan portfolios to $210.6 million at December 31, 2000 from $242.2 million at December 31, 1999. The direct consumer loan portfolio has decreased from $82.6 million at December 31, 1999 to $77.8 million at December 31, 2000. The balance of mobile home loans increased to $72.6 million at December 31, 2000 from $66.8 million at December 31, 1999.
The Company's policy of selling or securitizing fixed-rate residential mortgages to improve the liquidity of the portfolio, reduce interest rate risk, and to build servicing portfolio income resulted in sales of $111.7 million in 1999. In 2000, as liquidity pressures abated somewhat, $9.9 million of fixed- rate residential mortgages were sold. The Company had originations of fixed-rate residential mortgages of $49.4 million for 2000 compared to $113.6 million in 1999.
The following table sets forth the composition of the Bank's loan portfolio by loan type as of the dates indicated.
The following table sets forth scheduled contractual amortization of loans in the Bank's portfolio at December 31, 2000. Demand loans, loans having no stated schedule of repayments and no stated maturity, and overdraft loans are reported as due in one year or less. The following table also sets forth the dollar amount of loans which are scheduled to mature after one year which have fixed and adjustable interest rates.
Contractual maturities of loans do not necessarily reflect the actual life of loans in the Bank's portfolio. The average life of mortgage loans is substantially less than their contractual terms because of loan prepayments and enforcement of due-on-sale clauses. These clauses give the Bank the right to declare a loan immediately due and payable in the event, among other things, that the borrower sells the real property subject to the mortgage and the loan is not repaid. The average life of mortgage loans tends to increase, however, when current mortgage rates substantially exceed rates on existing mortgages.
Interest rates charged by the Bank on loans are affected principally by the demand for such loans and the supply of funds available for lending purposes. These factors are in turn affected by general economic conditions, monetary policies of the federal government, including the Federal Reserve Board, legislative tax policies, and governmental budgetary matters.
Origination, Securitization, and Sale of Loans
The following table shows the loans originated, securitized, sold, and repaid during the periods indicated.
Commercial Lending
The commercial loan portfolio is a significant part of the Bank's asset base. As of December 31, 2000, commercial loans amounted to $997.1 million, or 54.8% of the Bank's total loans as compared with $904.6 million, or 52.5% as of December 31, 1999. Under New York law, the Bank generally may not lend to any one entity more than 15% of the bank's capital stock, surplus, and undivided profits. However, the Bank is permitted to extend a loan up to 25% of the Bank's capital stock, surplus, and undivided profits, provided that the loan is collateralized to the extent that such loan is between 15% and 25% of the Bank's capital stock, surplus, and undivided profits. The Bank's policy, however, restricts loans to any borrower and related entities to 15% of shareholders' equity. Loan relationships approaching 15% of the Bank's shareholders' equity generally require diversification in both repayment source and collateral. At December 31, 2000, 10 loan relationships had outstanding loans and commitments exceeding 10% of shareholders' equity compared to 14 at December 31, 1999. There were no loan relationships with outstanding loans and commitments exceeding 15% of shareholders' equity at December 31, 2000 or 1999. The Bank offers a variety of commercial loan services, including term loans and revolving lines of credit, as well as letters of credit. Commercial lending involves somewhat greater credit risks to the Bank than most other types of lending. See "Loan Underwriting Policies".
At December 31, 2000, there were $321.5 million in commitments outstanding and the portfolio consisted of loans with an average outstanding balance of $181,627. Management continues to review commercial loan applications from companies with a strong financial base and strong credit history. Commercial loan originations amounted to $286.0 million, or 40.1% of total loans originated in 1999 compared to $262.9 million, or 48.4% of total loans originated in 2000. Total loan commitments to the 10 largest lending relationships ranged from $22.3 million to $16.3 million at December 31, 2000. Outstanding loan balances for these 10 relationships, ranging from $19.8 million to $6.0 million, are made up of 83 individual loans. Each of these loans has varied sources of repayment and collateral. The Bank continually reviews all larger group credits.
The commercial loan portfolio is diversified by industry, type, and size, and the loans have been made primarily to small- and medium-sized businesses in the regional market. Approximately 62% of the Bank's commercial loans bear floating interest rates tied to the Bank's prime rate ("Prime Rate"). The average yield on the commercial loan portfolio was 9.89% in 2000 and 9.03% in 1999. The Bank's average Prime Rate was 9.24% in 2000 and 8.02% in 1999. Commercial loans are made on both a collateralized and uncollateralized basis, and include collateralized lines of credit. Although most have shorter terms, the maximum term of a non-real estate collateralized commercial loan is ten years. The largest single extension of credit at December 31, 2000 was in the amount of $17.0 million and, as of that date, the largest single loan outstanding was $14.7 million on that credit. As of December 31, 2000, the Bank had 25 other relationships with outstanding loans and relationships exceeding $10.8 million. The Bank monitors commercial loan and commercial real estate industry stratifications at least twice a year and continues to require diversity throughout its commercial loan and commercial real estate portfolios. At December 31, 2000, the manufacturing industry made up 21.7% of the portfolio. At that same date, the service industry was 20.4% of the portfolio, finance/insurance/real estate was 19.0% of the portfolio, loans to retail businesses stood at 15.8%, and loans to wholesale trade businesses at 10.9% rounded the top five. The order of these industrial classifications has not changed from December 31, 1999 and the percentages remained constant, except that loans to wholesale trades companies increased from 14.6% to 15.7% representing the largest change. Geographic concentrations are also reviewed at the same time as industry concentrations. Approximately 66.2% of commercial loans are located in the Bank's primary market area of Broome, Chemung, Chenango, Onondaga, Oswego, and Tioga Counties. Of the remaining 33.8%, 27.8% are spread through other counties of New York State, and 6.0% in other states.
In addition to the various types of lending services, the Bank also offers to commercial customers a range of depository and related services, including commercial demand deposit accounts, cash management, payroll, and direct deposit to employees' accounts.
Consumer Lending
The Bank engages in a variety of consumer lending activities. As of December 31, 2000, a total of $436.9 million of consumer loans was outstanding as compared to $468.0 million and $410.8 million at December 31, 1999 and 1998, respectively. As seen in the table on page 2, the majority of the consumer loans is comprised of $385.3 million in personal loans (which includes indirect loans and savings account loans), $32.9 million in home equity loans, and $14.4 million in credit and debit card loans. Consumer loans generally involve more risk of collectibility than mortgage loans because of the type and nature of the collateral, and, in certain cases, the absence of collateral. As a result, consumer lending collections are dependent on the borrowers' continuing financial stability, and thus are more likely to be adversely affected by job loss, divorce, personal bankruptcy, and by adverse economic conditions.
Of the $385.3 million in personal loans outstanding at December 31, 2000, $77.8 million or 20.2% represented the Bank's portfolio of direct consumer loans originated by the Bank's lending staff; the $307.4 million or 79.8% represented the indirect consumer loan portfolio originated through relationships with mobile home service companies, automobile, and other retail dealers. Indirect originations in 2000 totaled $94.8 million or 51.8% of all consumer loan originations. Of these indirect originations, used auto loans was the largest source at $57.8 million. Mobile home loans are originated through service companies and are supported by recourse agreements against significant reserve account balances. All personal loans originated for the Bank are advanced at fixed interest rates, with a high percentage of the loans offering repayment terms up to 60 months.
The Bank continues to originate indirect consumer loans, though at a slower pace than in prior years. These loans tend to earn some of the highest yields of Bank assets, but also tend to have a higher risk associated with them. Going forward, the Bank will originate these loans with the emphasis on controlling charge-offs and maintaining the profitability of this product line. In 2000, the Bank originated $94.8 million of indirect consumer loan contracts compared with $173.9 million of such consumer loans in 1999.
Home equity lines of credit are primarily an adjustable-rate consumer loan product with a term of 20 or 30 years, and are generally collateralized by the borrower's primary residence, when the loan to value ratio, taking into account the first mortgage loan, does not exceed 75%. As of December 31, 2000, the outstanding balance of total home equity lines of credit was $32.9 million. Interest rates on home equity lines of credit are adjusted monthly to reflect changes in the Prime Rate.
The Bank has an adjustable-rate MasterCard program to complement its fixed- rate Visa credit card program. As of December 31, 2000, there were total credit card lines available of $46.5 million with an outstanding balance of $11.4 million as compared to $42.8 million and $10.6 million, respectively, at December 31, 1999.
Consumer lending, with its short-term characteristics, contributes to the improvement of the Bank's overall interest rate sensitivity because of its more rapid amortization compared to residential and commercial real estate loans.
Residential Real Estate Lending
The Bank historically has been, and continues to be, a leading originator of residential real estate loans in its market area. At December 31, 2000, $219.0 million, or 12.0% of the Bank's total loan portfolio consisted of residential mortgage loans. In 2000 and 1999, residential mortgage loan originations amounted to $75.9 million and $118.4 million, respectively, which represented approximately 14.0% and 16.6%, respectively, of the Bank's total loan originations.
In years prior to 2000, the Bank sold large portions of the residential mortgage loans originated and retained the servicing of these loans. In 2000, only $9.9 million of the $75.9 million originated were sold. This compares to sales of $111.7 million in 1999 to originations of $118.4 million. The Bank has the ability, and currently intends, to retain more of its residential mortgage loan originations, as it reduces the balance of its commercial loan portfolio to provide a better mix of assets. Because of the decision to retain more residential mortgage loans in the Bank's portfolio, the serviced mortgage loan portfolio, a source of non-interest income, decreased from $559.9 million at December 31, 1999 to $516.7 million at December 31, 2000.
Commercial Real Estate Lending
The Bank originated $20.7 million in commercial real estate loans in 2000 compared to $46.6 million in 1999 and $56.0 million in 1998. At December 31, 2000, the Bank had $167.3 million of commercial real estate loans outstanding, representing approximately 9.2% of the Bank's total loan portfolio. Adjustable- rate commercial real estate loans, with rates adjusting every one, three, or five years, represent 8.6% of the total loan portfolio at December 31, 2000.
The commercial real estate loans offered by the Bank are being underwritten with terms of up to 25 years. In setting interest rates and origination fees on new loans and extensions, management considers both current market conditions and its analysis of the risk associated with the particular project. The weighted average yield on commercial real estate adjustable-rate loans for 2000 was 8.66% and 8.80% in 1999. The largest single commercial real estate loan advanced during 2000 was $3.0 million.
Non-performing Loans and Other Real Estate Owned ("ORE")
The following table sets forth information regarding non-accrual (non- performing) loans, accruing loans which are 90 days or more overdue, and other real estate owned held by the Bank at December 31:
During 2000, 1999, 1998, 1997, and 1996, approximately $1.8 million, $806,000, $783,000, $768,000 and $882,000 of additional interest income would have been recorded on loans accounted for on a non-accrual basis as of the end of each period if such loans had been current. These amounts were not included in the Bank's interest and dividend income for the respective periods.
During 2000, 1999, 1998, 1997, and 1996, $1.3 million, $119,000, $567,000, $682,000, and $442,000 respectively, of interest income on non-accrual loans were recognized during the periods.
Total non-performing loans and other real estate owned increased to $32.5 million, or 1.40% of total assets at December 31, 2000, compared to $12.5 million, or 0.56% of total assets at December 31, 1999. Certain steps have been taken to address the increase in the non-performing loans in the Bank's portfolio. During the fourth quarter of
2000, the Bank concluded a comprehensive evaluation of its existing credit and loan reserves. In order to accomplish this within a short time frame, the Bank retained Ernst&Young LLP to assist in a credit risk management assessment, which included a review of certain specific loans and segments of the portfolio as well as credit administration issues. Late in the fourth quarter, the Bank also hired an experienced banking executive with very strong credentials in bank examination and credit quality issues, to take a lead role in evaluating the Bank's risk management process. The Bank believes its work has resulted in an appropriate assessment of the loan portfolios at year-end 2000.
For many years the loan growth rate at BSB, particularly in commercial and industrial ("C&I") loans was significantly higher than the growth rate of economic activity in its core markets in Central New York. The Bank's present strategy is to change the mix of loans in its portfolio. These changes will include aggressive reduction of C&I loans as well as the more volatile and high- cost deposits that have funded them. The second step involves the implementation of a new risk management process. The Bank has hired a Senior Vice President- Risk Management and, in the first quarter of 2001, established an independent, commercial credit administration department. This group, staffed by senior loan officers, is charged with managing the Bank's non-performing loans and certain other loans. Various strategies are being pursued to maximize the value of these credits, including the possible sale of loans at acceptable price levels. The Bank's objective is to manage the disposition of the loans through diligent collection efforts. The new credit administration department is separate and distinct from the Bank's ongoing lending operation, both administratively and physically. The segregation of the non-performing loans will allow the Bank to monitor and report better on the performance of its core lending operations. Similarly, senior management will work with other departments to identify potential risks in the lines of business they are handling and to develop procedures geared toward limiting those risks.
At December 31, 2000, the recorded investment in loans for which impairment has been recognized in accordance with SFAS No. 114, "Accounting by Creditors for Impairment of a Loan," totaled $31.6 million with a valuation allowance aggregating $13.6 million. For the twelve months ended December 31, 2000, the average recorded investment in impaired loans was approximately $16.4 million. The Company recognized, on a cash basis, no interest on impaired loans during the portion of the year they were impaired. The Bank will work with borrowers to restructure or modify terms of their loans if difficulties arise in repayment. If necessary, at the time of modification, the loan will be written down to the estimated amount of future cash receipts. A non-performing loan that has been modified will remain a non-performing loan until an adequate history of recovered or collected principal and interest has been established, the loan is repaid, or related foreclosed or repossessed property is sold to satisfy the debt. Also the repayment of all future contractual principal and interest must be deemed collectible and the borrower must demonstrate the ability to sustain performance. At December 31, 2000, the Bank had $10.7 million of restructured commercial loans included in non-accrual status. At December 31, 1999, the Bank had $6.6 million of restructured commercial loans in non-accrual status.
At December 31, 2000, non-performing residential real estate loans totaled $2.1 million. At December 31, 1999, non-performing residential real estate loans totaled $2.2 million. Loan loss reserves have been established that are deemed adequate by management.
At December 31, 1999, non-performing commercial real estate loans totaled $53,000. At December 31, 2000, non-performing commercial real estate loans increased to $1.5 million. This increase resulted primarily from one relationship for $1.4 million with a customer in the Southern Tier New York region.
Non-performing commercial loans at December 31, 2000 totaled $17.1 million, and included 55 individual loans ranging in size from $3,000 to $4.5 million. Within this group of loans, neither one industry nor one geographical area stands out; nor does any other one factor or influence form any consistent pattern in the loans that are shown as part of non-performing assets. At December 31, 1999, non-performing commercial loans were at $1.9 million. These loans and all other non-performing loans have been internally risk-rated.
Loans that are still accruing but are 30 to 89 days past due increased $18.5 million at December 31, 1999 to $66.5 million at December 31, 2000. All loans in this category are risk-weighted to determine the adequacy of the allowance for possible credit losses. See further discussion in "Allowance for Possible Credit Losses".
At December 31, 2000, ORE, which is defined to include property acquired by foreclosure or by deed in lieu of foreclosure, totaled $323,000 and consisted of five single-family residential properties with a book value totaling $133,000 and two commercial real estate properties with a book value totaling $190,000. At December 31, 1999, ORE totaled $910,000, which consisted of ten single-family residential properties with a book value totaling $526,000 and four local commercial real estate properties with a book value totaling $384,000.
During 2000, 15 single-family residential properties with a book value totaling $660,000 were sold, and 15 single-family residential properties with a book value of $607,000 were added to the ORE portfolio from 1999. In 2000, 16 residential real estate ORE properties were written down by $232,000.
During 2000, three commercial real estate properties with a book value totaling $230,000 were sold, two commercial real estate properties with a book value totaling $526,000 were charged off, and four commercial real estate properties valued at $3.5 million were partially charged off. In addition, one commercial real estate property with a book value totaling $154,000 was added to the portfolio, and three commercial real estate ORE properties were written down by $22,000 in 2000. All real estate carried in the Company's ORE portfolio is supported by recent independent appraisals.
Allowance for Possible Credit Losses
Management reviews the adequacy of the allowance for possible credit losses at least quarterly. The adequacy of the allowance is assessed by applying projected loss ratios to the risk-ratings (i.e. "classification") of loans both individually and by category. The projected loss ratios incorporate such factors as recent loss experience, current economic conditions and trends, trends in past due and non-accrual amounts, the risk characteristics of various "classifications" and concentrations of loans, transfer risks, and other pertinent factors.
The Bank added significantly to the allowance for possible credit losses in the third and fourth quarters of 2000 bringing the ratio of the allowance to total loans outstanding at December 31, 2000 to 3.26% from 1.69% at December 31, 1999. The additional allowance for possible credit losses was considered necessary due to an increase in non-performing loans and net charge offs during the third and fourth quarters of 2000. In the fourth quarter of 2000, the Bank completed a preliminary analysis of lending operations and policies, including policies for reviewing existing credits and establishing reserves. The process included the retention of Ernst & Young LLP to assist in the review, and a thorough evaluation by the Bank's new President and Chief Executive Officer and his senior management team. Based on that review, the allowance for possible credit losses was increased to $59.3 million at December 31, 2000.
A loan is considered impaired, based on current information and events, if it is probable that the Bank will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. The measurement of impaired loans is generally based upon the present value of expected future cash flows discounted at the historical effective interest rate, except that all collateral-dependent loans are measured for impairment based on the fair value of the collateral. Loans not deemed impaired continue to be classified to their risk-rating and general reserves are maintained accordingly. The following table summarizes activity in the Bank's allowance for possible credit losses during the periods indicated. Management considers the allowance for possible credit losses (reserves) of $59.3 million at December 31, 2000 adequate to cover potential credit losses.
The provision for credit losses was $53.7 million in 2000 and $19.1 million in 1999. The allowance for possible credit losses increased to $59.3 million, or 3.26% of total loans at December 31, 2000, from $29.1 million, or 1.69% at year- end 1999 to reflect the reserves necessary to cover potential losses in the loan portfolios based on current adverse conditions within the economy and the current risk-weighting of the individual loans in the commercial portfolio. Net charge-offs in 2000 amounted to $23.6 million, or 1.32% of average total loans outstanding, compared to $15.0 million, or 0.88% in 1999. Non-performing loans at December 31, 2000 were $32.1 million, or 1.77% of total loans outstanding as compared to $11.6 million, or 0.67% at December 31, 1999.
The following table indicates the allowance for possible credit losses by the following categories of loans for the following periods:
(1) Percent of loans in each category to total loans at the dates indicated.
INVESTMENT ACTIVITIES
As of December 31, 2000, the Bank's investment securities portfolio of $401.7 million constituted 17.4% of its total assets. Such securities consist of United States Treasury securities, United States Government Agency securities, mortgage-backed securities, collateralized mortgage obligations ("CMO"), obligations of state and local governments, and corporate debt and equity securities.
Collateralized mortgage obligations consist of pools of mortgages. Interest, principal amortization, and prepayments are directed in a predetermined order ("traunches"), as received, until each class is paid off. The vast majority of CMOs purchased by the Bank are issued by the Federal Home Loan Mortgage Corporation ("FHLMC") and the Federal National Mortgage Association ("FNMA"). The Bank owns and occasionally buys private issuer CMOs. The Bank purchases mostly senior traunches that have been rated in the top two categories by major rating services such as Moody's and Standard and Poor's. The Bank performs tests on CMOs at the time of purchase to determine that the issues being considered for purchase fall within the risk parameters established by the Bank's investment policy.
The Bank also purchases and sells mortgage participation certificates that consist primarily of certificates issued by FNMA and the FHLMC. The Bank's portfolio of mortgage-backed securities also includes securities guaranteed by the Government National Mortgage Association ("GNMA"). At December 31, 2000, the Bank's gross mortgage-backed securities portfolio of $170.9 million included $100.6 million of CMOs, $18.7 million in GNMA securities, and $51.6 million in participation certificates.
There is significant uncertainty as to the timing of repayments from mortgage- backed securities because borrowers whose mortgages are pooled into mortgage- backed securities have the option to prepay their loans at any time. This option can affect the returns the Bank anticipates earning by investing in these securities. When interest rates fall as they did during 1997 and 1998, borrowers tend to refinance their mortgages resulting in accelerated prepayments of the mortgages underlying mortgage-backed securities, thereby reducing the period of time the Bank will receive the anticipated higher rate of return.
Market values are also affected by the borrowers option to prepay. In falling rate environments, the possibility of prepayment increases as borrowers refinance the underlying loans in order to receive a lower rate of interest. This factor limits the degree to which mortgage-backed securities appreciate. When interest rates rise the probability of the underlying mortgages refinancing decreases; this extends the average time during which a lower rate will be received and decreases the value of the security.
The following table sets forth the carrying value of the Bank's gross mortgage-backed securities portfolio as of the dates indicated (also, see Note 2 of the Consolidated Financial Statements included in the 2000 Annual Report to Shareholders):
(1) The carrying value of mortgage-backed securities at December 31, 2000 includes approximately $151.8 million pledged under various agreements, principally lines of credit and Municipal Option Put Securities.
The U.S. Government Agency Obligations in the Bank's investment portfolio consist primarily of securities callable by the issuing agencies with calls ranging out to four years. The call features limit the appreciation potential of the securities as the probability of them being called on the call date rises as interest rates decline.
The following table shows the Bank's activity in mortgage-backed securities during the years indicated:
The following table presents the maturities of and the weighted average yield on the Bank's investment portfolio at December 31, 2000. At this date, the Bank had no securities which exceeded 10% of stockholders' equity. No tax equivalent adjustments have been made.
DEPOSITS
At December 31, 2000, the Bank had $1,881.2 million in total deposits (including escrow funds). Deposits are attracted principally from within the Bank's primary market area through the offering of a broad selection of deposit instruments, including commercial savings and demand deposits, negotiable order of withdrawal ("NOW") accounts, money market deposit accounts, passbook and statement savings accounts, certificates of deposit, and pension accounts for both individuals and small businesses. Of these deposit instruments, $1,048.3 million, or 55.8% of all deposits consisted of term accounts, $492.7 million, or 26.2% consisted of money market deposit accounts, $164.5 million, or 8.7% consisted of passbook, escrow, and statement savings accounts, $21.0 million, or 1.1% consisted of NOW accounts, and $154.7 million, or 8.2% consisted of commercial checking accounts.
At December 31, 2000, brokered deposits totaled $286.8 million with original maturities of one to five years. This compares to a balance of $231.9 million at December 31, 1999. The variety of deposit accounts offered by the Bank has allowed it to be competitive with other financial institutions; however, the threat of disintermediation (the flow of funds away from banking institutions into direct investment vehicles such as government and corporate securities) still exists.
The Bank maintains a "sweep program" allowing balances to be "swept" from NOW accounts into money market deposit accounts. At December 31, 2000, approximately $99.0 million of the money market accounts were NOW balances being swept into the account. The growth of commercial lending within the Bank also resulted in an increase of $7.0 million in commercial checking account balances to $108.9 million compared to $101.9 million at December 31, 2000 and 1999, respectively.
The Bank's electronic delivery systems include an ATM network (MachineTeller(R)) and point-of-sale network (StoreTeller(R)); they have processed over 22.3 million transactions for the Bank's depositors.
Deposit accounts in the Bank are insured to the maximum permissible amounts by the Bank Insurance Fund ("BIF"), as administered by the FDIC. Accordingly, the Bank is subject to rules, regulations, and examinations of the FDIC.
The following table shows the distribution of the deposit accounts in the Bank by type of deposits as of the dates indicated:
(1) Minimum balance required to earn interest, depending upon type of certificate, ranges from $500 to $100,000.
The Bank attempts to manage the flow of deposits by pricing its accounts to remain generally competitive with other financial institutions in its market area. The Bank has used its pricing policies to moderate deposit inflow to control its cost of funds in view, among other considerations, of its capital adequacy requirements. Management believes that this action does not have an adverse effect on its ability to acquire deposits.
The following table presents, by various interest rate categories, the amounts of certificate accounts at December 31, 1999 and December 31, 2000, which mature during the periods indicated:
The following table sets forth deposit activity for the periods indicated:
The following table sets forth the deposits and the changes in dollar amount of deposits in the various programs offered by the Bank for the periods indicated. The net increase (decrease) in deposits during the period is inclusive of the effects of interest credited.
The following table presents, by various interest rate categories, the amounts of certificate accounts of $100,000 or more at December 31, 2000, which mature during the periods indicated:
BORROWINGS
The Bank has available a number of sources for borrowing funds. The Bank's principal borrowings are securities sold under repurchase agreements, and advances from the Federal Home Loan Bank of New York ("FHLB"). See Note 8 of Notes to Consolidated Financial Statements included in the 2000 Annual Report to Shareholders.
The following table sets forth the borrowings and mandatorily redeemable preferred securities of the Bank as of the dates indicated:
Borrowings at December 31, 2000 have maturity dates as follows:
(1) Average amounts outstanding and average interest rates are computed using weighted monthly averages.
TRUST POWERS
The Bank provides full trust services to individuals, corporations, and non- profit organizations including executor of estates, trustee under wills, living trust agreements, custodian services, investment management services, and acts as trustee of qualified retirement plans. At December 31, 2000, the Bank managed $329.5 million in trust assets.
INVESTMENT IN SUBSIDIARIES
At December 31, 2000, BSB Bank & Trust Company, Inc. is the only banking subsidiary of the Company.
B-Save Corporation was incorporated in 1982 and performs treasury management services for the Bank.
BSB Credit Corporation was incorporated in 1983 to solicit mortgage loan applications for BSB Bank & Trust. During 1992, the name was changed to BSB Mortgage Corporation.
During 1996, the Bank formed a wholly owned subsidiary, BSB Financial Services, Inc. This Company became the focal point for marketing brokerage services. Additional financial services are being reviewed that may expand the Bank's product mix to better serve the non-traditional banking customer.
BSB NEWPRO, Inc. was incorporated in 1997 and acquires, holds, maintains, and disposes of property acquired through foreclosure for the Bank.
On July 21, 1998, the Company formed a subsidiary business trust, BSB Capital Trust I, L.L.C. (the "Trust"), for the purpose of issuing preferred securities which qualify as Tier I capital. Concurrent with its formation, the Trust issued $30.0 million at par value of 8.125% preferred securities in an exempt offering. The preferred securities are non-voting, mandatorily redeemable in 2028, and guaranteed by the Company. The entire net proceeds to the Trust from the offering were invested in junior subordinated obligations of the Company. The costs related to the issuance of these securities are capitalized and amortized over the life of the period to redemption on a straightline basis. The net proceeds were used to fund commercial and consumer loan growth.
As part of the acquisition of Skaneateles Bancorp, Inc., the Company acquired a wholly owned real estate investment trust subsidiary. This company, now named BSB Preferred Capital Corporation, was formed to provide a cost effective means of raising funds, including capital, on a consolidated basis. The Bank's strategy is to acquire, hold, and manage real estate mortgage assets, including, but not limited to residential mortgage loans, mortgage-backed securities, and commercial mortgage loans.
PERSONNEL
As of December 31, 2000, the Company, on a consolidated basis, had 438 full- time and 123 part-time employees. The employees are not represented by any collective bargaining unit, and the Bank considers its relationship with its employees to be good.
COMPETITION
BSB Bank & Trust faces significant competition in attracting deposits and loans. Its most direct competition for deposits has historically come from commercial banks, thrift institutions, and credit unions located in its market area. The Bank also faces additional significant competition for investors' funds from short-term money market mutual funds and issuers of corporate and government securities. BSB Bank & Trust competes for deposits principally by offering depositors a wide variety of deposit programs, convenient branch locations and banking hours, tax-deferred retirement programs, and other services. The Bank also utilizes newspaper, radio, television, and other media to advertise its deposit and loan services. BSB Bank & Trust does not rely upon any individual group or entity for a material portion of its deposits.
BSB Bank & Trust's competition for loans comes principally from thrift institutions, credit unions, mortgage banking companies, and commercial banks. BSB Bank & Trust competes for loan originations primarily through the interest rates and loan fees it charges, and the efficiency and quality of services it provides consumers and commercial borrowers, real estate brokers, automobile dealers, builders, and regional mortgage correspondent originators. The Bank also relies on the residential mortgage origination efforts of BSB Mortgage Corporation, a wholly owned subsidiary. Factors which affect competition include the general availability of lendable funds and credit, general and local economic conditions, current interest rate levels, and volatility in the lending markets.
REGULATION
General
The Company, as a bank holding company, is subject to regulation, supervision, and examination by the Federal Reserve Board. The Bank, as a New York-chartered bank and trust company, is subject to regulation, supervision, and examination by the FDIC as its primary federal regulator and by the Banking Department as its state regulator. The Bank also is subject to regulation, supervision, and examination as to certain matters by the Federal Reserve Board.
The Bank's deposits are insured to applicable limits by the Bank Insurance Fund, as administered by the FDIC.
As a bank holding company, the Company is subject to capital adequacy guidelines of the Federal Reserve Board. Under current capital adequacy guidelines, bank holding companies generally must maintain a ratio of Tier 1 capital to total assets of 4.0% to 5.0%. The minimum ratio is 3.0% for the most highly rated bank holding companies. The Federal Reserve Board's capital adequacy guidelines also require bank holding companies to maintain a minimum ratio of qualifying total capital to risk-weighted assets of 8.0%, including a minimum ratio of Tier 1 capital to risk-weighted assets of 4.0%. The Company's ratio of Tier 1 capital to total assets, Tier 1 capital to risk-weighted assets, and qualifying total capital to risk-weighted assets of 6.81%, 8.41%, and 11.29%, respectively, at December 31, 2000, were in compliance with such guidelines. Based on these ratios, the Company met the requirements of a "well- capitalized" institution. The Bank is subject to similar capital requirements imposed by the FDIC. Although there are some differences between the capital adequacy guidelines adopted by the Federal Reserve Board with respect to the Company and the FDIC with respect to the Bank, the primary elements of each are generally identical. Under the minimum leverage-based capital requirement adopted by the FDIC, insured state nonmember banks must maintain a ratio of Tier 1 capital to total assets of at least 3.0% to 5.0% depending on the Bank's CAMELS rating. Under such regulations, state nonmember banks must maintain a minimum ratio of qualifying total capital to risk-weighted assets of 8.0%, including a minimum ratio of Tier 1 capital to risk-weighted assets of 4.0%. At December 31, 2000, the Bank had a ratio of qualifying total capital to risk- weighted assets of 10.67%, a ratio of Tier 1 capital to risk-weighted assets of 9.40%, and a leverage ratio of 7.62%. As a result, the Bank met the requirements of a "well-capitalized" institution.
On November 12, 1999, President Clinton signed legislation to reform the U.S. banking laws, including the Bank Holding Company Act (the "BHCA"). The changes made to the BHCA by this legislation, referred to as the Gramm-Leach-Bliley Act, became effective on March 11, 2000, and expanded the permissible activities of bank holding companies like the Company. In order to engage in the expanded activities, the Company would have to file a notice to become a financial holding company. As a financial holding company, the Company would be permitted to own and control depository institutions and to engage in activities that are financial in nature or incidental to financial activities, or activities that are complementary to a financial activity and do not pose a substantial risk to the safety and soundness of depository institutions or the financial system generally. The legislation identifies certain activities that are deemed to be financial in nature, including nonbanking activities currently permissible for bank holding companies to engage in both within and outside the United States, as well as insurance and securities underwriting and merchant banking activities. The Federal Reserve Board is authorized under the legislation to identify additional activities that are permissible financial activities.
In order to become a financial holding company and take advantage of this new authority, the Company's depository institution subsidiaries, currently the Bank, must be well-capitalized and well-managed and have at least a satisfactory record of performance under the Community Reinvestment Act. No prior notice to the Federal Reserve Board would be required from a financial holding company to acquire a company engaging in non-banking activities or to commence these activities directly or indirectly through a subsidiary. The Company has no current intention to become a financial holding company.
Provisions of the Gramm-Leach-Bliley Act permit national banks to establish financial subsidiaries that may engage in the activities noted above that will be permissible for financial holding companies, other than insurance underwriting, merchant banking, and real estate development and investment activities. In order to exercise this authority, a bank and its depository institution affiliates must be well-capitalized, well-managed, and have CRA ratings of at least "satisfactory." For a state bank, such activities also must be permissible under relevant state law.
The Gramm-Leach-Bliley Act imposes certain obligations on financial institutions, including state-chartered banks like the Bank, to develop privacy policies, restrict the sharing of nonpublic customer data with nonaffiliated parties at the customer's request, and establish procedures and practices to protect and secure customer data. The privacy provisions will be implemented by regulations that become effective July 1, 2001.
TAXATION
Federal Taxation
General. The Company files a consolidated tax return which includes the income of all subsidiaries. The following discussion of federal taxation is a summary of certain pertinent federal income tax matters.
Bad Debts. The Bank is currently taxed as a "large" bank for federal income tax purposes, since its average total assets exceed $500 million. As a "large" bank, the Bank may only deduct specific wholly or partially worthless debts pursuant to Section 166 of the Internal Revenue Code.
Net Operating Loss Carryovers. Generally, a corporation may carry back net operating losses ("NOLs") to the preceding two taxable years and forward to the succeeding 20 taxable years. At December 31, 2000, the Company and the Bank had no net operating loss carryforward for federal income tax purposes.
Capital Gains and Corporate Dividends-Received Deduction. Corporate net capital gains are taxed at a maximum tax rate of 35%. The dividends-received deduction is 70% of the dividends received from less than 20% owned corporations. However, certain dividend payments between members of an "affiliated group" are eligible for a 100% deduction.
The Bank's federal income tax returns for its tax years beginning in 1997 are open under the statute of limitations and are subject to review by the IRS.
New York State Taxation
The Company and the Bank are subject to an annual New York State Franchise tax equal to the greater of a regular tax (the "State Regular Tax"), an alternative minimum tax (the "State Alternative Minimum Tax"), a tax based on the combined taxable assets of the Company and the Bank, or a fixed minimum tax of $250.
The State Regular Tax is computed at the rate of 9% for 2000, 8.5% for 2001, 8.00% for 2002, and 7.5% for 2003 on the Company's and the Bank's entire net income.
The State Alternative Minimum Tax is computed at the rate of 3% on the Company's and the Bank's alternative entire net income for the taxable year. The Company and the Bank's alternative entire net income consists of their entire net income, increased by certain deductions not allowed in computing alternative entire taxable income.
The tax based on combined taxable assets consists of the Company's and the Bank's combined average assets. The tax is computed at the rate of one-tenth of a million per dollar of taxable assets, but lower rates apply for banks with at least 33% of their assets in mortgages and that have a "net worth ratio" of less than 5%.
The New York State Franchise tax paid by the Company is deductible for Federal income tax purposes.
The Company's and the Bank's New York State income tax returns for the tax years beginning in 1997 are open and subject to review by New York State.
Delaware State Taxation
The Company is subject to an annual Delaware State Franchise Tax. The Franchise Tax provides that every corporation incorporated under the laws of the State of Delaware "shall pay an annual tax . . . by way of license" for its corporate franchise. See Del. Code. Ann. Tit. 8, (S) 501. Two methods are provided for calculating the Franchise Tax and the lesser amount calculated under either method is the tax payable. The first method, which is referred to as the "assumed par value capital method". The tax under this method is calculated by dividing the corporation's total gross assets by its total number of outstanding shares and multiplying the quotient by the total number of authorized shares. The product equals the capitalization for assessment of the franchise tax which is assessed at a rate of $200 per $1 million of capitalization.
Under the second method, which is called the "authorized shares method," the franchise tax is calculated based on the authorized number of shares of capital stock and is calculated according to the following formula: where the authorized capital stock does not exceed 3,000 shares, $30; where the authorized capital stock exceeds 3,000 shares but is not more than 5,000 shares, $50; where the authorized capital stock exceeds 5,000 shares but is not more than 10,000 shares, $90; and the further sum of $50 on each 10,000 shares or part thereof.
Under the first method, the Bank pays approximately $107,000 in annual Franchise Tax.
ITEM 2.
ITEM 2. PROPERTIES
The Company does not own or lease any property, other than that owned or leased by the Bank and its subsidiaries. BSB Bank & Trust conducts its business from its executive office and 22 full-service offices located in Broome, Chemung, Chenango, Onondaga, Chemung, Oswego, and Tioga Counties of upstate New York. The following table sets forth certain information relating to each of BSB Bank & Trust's offices as of December 31, 2000:
* Net book value of leasehold improvements are included.
BSB Bank & Trust also operates 52 ATMs (MachineTeller(R)), the most extensive system in its market area, which provide 24-hour banking services. The Bank operates 12 proprietary bank service locations (StoreTeller(R)) situated in a large area supermarket chain. BSB Bank & Trust issued approximately 67,000 plastic cards which allow depositors to use the ATMs and in-store facilities.
ITEM 3.
ITEM 3. LEGAL PROCEEDINGS
There are no material pending legal proceedings, other than ordinary routine litigation incidental to its business, to which the Company or any of its subsidiaries is a party or of which any of their property is the subject.
ITEM 4.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS Not Applicable.
PART II
ITEM 5.
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
The information required herein is incorporated by reference from under the sections captioned "Market Prices and Related Shareholder Matters" on page 25 of the Company's Annual Report to Shareholders for the year ended December 31, 2000 portions of which are included herein as Exhibit 13 ("Annual Report").
ITEM 6.
ITEM 6. SELECTED FINANCIAL DATA The information required herein is incorporated by reference from the table captioned "Selected Financial and Other Data" on page 6 of the Annual Report.
ITEM 7.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The information required herein is incorporated by reference from the section captioned "Management's Discussion and Analysis of Financial Condition and Results of Operations" on pages 7 to 25 of the Annual Report.
ITEM 7A.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK See "Management's Discussion and Analysis of Financial Condition and Results of Operations" on pages 7 to 25 of the Annual Report.
ITEM 8.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA The financial statements and supplementary data required are incorporated by reference from pages 26 to 52 of the Annual Report.
ITEM 9.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE Not applicable.
PART III
ITEM 10.
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT The information required herein is incorporated by reference from the Company's definitive Proxy Statement to be filed with the SEC within 120 days after the end of the fiscal year covered by this Report (the "Proxy Statement").
ITEM 11.
ITEM 11. EXECUTIVE COMPENSATION The information required herein is incorporated by reference from the Proxy Statement to be filed within 120 days after the end of the fiscal year covered by this Report.
ITEM 12.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT The information required herein is incorporated by reference from the Proxy Statement to be filed within 120 days after the end of the fiscal year covered by this Report.
ITEM 13.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS The information required herein is incorporated by reference from the Proxy Statement to be filed within 120 days after the end of the fiscal year covered by this Report.
PART IV
ITEM 14.
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K (a)(1) The following financial statements are incorporated by reference from Item 8 hereof: Consolidated Statements of Condition at December 31, 2000 and
Consolidated Statements of Income For Each of the Three Years in the Period Ended December 31, 2000
Consolidated Statements of Changes In Shareholders' Equity For Each of the Three Years in the Period Ended December 31, 2000
Consolidated Statements of Cash Flows For Each of the Three Years in the Period Ended December 31, 2000
Notes to Consolidated Financial Statements
Report of Independent Auditors
(a)(2) There are no financial statement schedules which are required to be filed as part of this form since they are not applicable.
(a)(3) See (c) below for all exhibits filed herewith and the Exhibit Index.
(b) Reports on Form 8-K. The Company filed the following Current Reports of Form 8-K during the fourth quarter of 2000:
Current Report on Form 8-K filed with the Securities and Exchange Commission (the "SEC") on October 6, 2000.
Current Report on Form 8-K filed with the SEC on November 14, 2000.
Current Report on Form 8-K filed with the SEC on December 29, 2000.
(c) Exhibits. The following exhibits are either filed as part of this annual report on Form 10-K, or are incorporated herein by reference:
Exhibit Table -------------
No. Exhibit - --- -------
3.1 Certificate of Incorporation, as amended by the Certificate of Amendment dated May 24, 1993 and the Certificate of Amendment dated April 22, 1996 (incorporated by reference from Exhibit 3.1 to the Quarterly Report on Form 10-Q of BSB Bancorp, Inc. (the "Company") for the Quarter Ended March 31, 1996).
3.2 Form of Amended Certificate of Designation, Preferences and Rights of Series A Junior Participating Preferred Stock and form of Certificate of Designation, Preferences and Rights of Series A Junior Participating Preferred Stock (incorporated by reference from Exhibit 99.2 to the Company's Current Report on Form 8-K, filed with the Securities and Exchange Commission (the "SEC") on May 26, 1999).
3.3 Bylaws, as amended (incorporated by reference from Exhibit 3 to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 1999).
4.1 Specimen common stock certificate (incorporated herein by reference from Exhibit 4 to the Company's Registration Statement on Form S-4, filed with the SEC on March 2, 1988).
4.2 Rights Agreement, dated as of May 24, 1999, between the Company and American Stock Transfer & Trust Company (incorporated herein by reference to Exhibit 99.1 to the Company's Current Report on Form 8-K, filed with the SEC on May 26, 1999).
10.1 Long-Term Incentive and Capital Accumulation Plan, as amended (incorporated herein by reference to Exhibit A to the Company's Proxy Statement for the 1990 Annual Meeting of Shareholders).
10.2 1996 Long-Term Incentive and Capital Accumulation Plan (incorporated by reference to Exhibit A to the Company's Proxy Statement for the 1996 Annual Meeting of Shareholders).
10.3 Amendment Number 1 to 1996 Long-Term Incentive and Capital Accumulation Plan (incorporated herein by reference to Exhibit 10 to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 1998).
10.4 Amendment Number 2 to 1996 Long-Term Incentive and Capital Accumulation Plan (incorporated by reference to Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q for the period ended March 31, 1999).
10.5 Directors' Stock Option Plan (incorporated herein by reference to Exhibit A to the Company's Proxy Statement for the 1994 Annual Meeting of Shareholders).
10.6 Change of Control Severance Agreement, entered into as of April 19, 2000, by and among the Company, the Bank, and Matthew W. Schaefer.
10.7 Employment Agreement, entered into as of December 28, 2000, by and among the Company, the Bank, and Arthur C. Smith.
10.8 Employment Contract, entered into as of November 2, 1990, by and among the Company, the Bank and Alex S. DePersis (incorporated herein by reference to Exhibit 10.4 to the Company's Annual Report on Form 10-K for the Year Ended December 31, 1992).
10.9 Amendment to Employment Contract, entered into as of December 29, 1995, by and among Alex S. DePersis, the Company and the Bank (incorporated herein by reference to Exhibit 10.4 to the Company's Annual Report on Form 10-K for the year ended December 31, 1995).
10.10 Amendment to Employment Contract, entered into as of December 30, 1996, by and among the Company, the Bank and Alex S. DePersis (incorporated herein by reference to Exhibit 10.6 to the Company's Annual Report on Form 10-K for the year ended December 31, 1996).
10.11 Amendment to Employment Contract, entered into as of December 29, 1997, by and among the Company, the Bank and Alex S. DePersis (incorporated herein by reference to Exhibit 10.8 to the Company's Annual Report on Form 10-K for the year ended December 31, 1997).
10.12 Amendment to Employment Contract, entered into as of June 28, 1999, by and among the Company, the Bank and Alex S. DePersis (incorporated herein by reference to Exhibit 10.12 to the Company's Annual Report on Form 10-K for the year ended December 31, 1999).
10.13 Employment Agreement, entered into as of January 25, 1999, by and among the Company, the Bank and John P. Driscoll incorporated herein by reference to Exhibit 10.13 to the Company's Annual Report on Form 10-K for the year ended December 31, 1999).
10.14 Amendment to Employment Agreement, entered into as of May 31, 2000, by and among the Company, the Bank and John P. Driscoll.
10.15 Employment Agreement, entered into as of November 1, 2000, by and among the Company, the Bank and John B. Wescott.
10.16 Employment Agreement, entered into as of November 10, 2000, by and among the Company, the Bank and Howard W. Sharp.
10.17 Change of Control Severance Agreement, entered into as of November 2, 1990, by and among the Company, the Bank and Douglas R. Johnson (incorporated herein by reference to Schedule 10.3 to Exhibit 10.3 to the Company's Annual Report on Form 10-K for the year ended December 31, 1990).
10.18 Amendment to Change of Control Severance Agreement, entered into as of December 29, 1995, by and among the Company, the Bank and Douglas R. Johnson (incorporated herein by reference to Exhibit 10.8 to the Company's Annual Report on Form 10-K for the year ended December 31, 1995).
10.19 Amendment to Change of Control Severance Agreement, entered into as of June 28, 1999, by and among the Company, the Bank and Douglas R. Johnson (incorporated herein by reference to Exhibit 10.19 to the Company's Annual Report on Form 10-K for the year ended December 31, 1999) .
10.20 Change of Control Severance Agreement, entered into as of February 22, 1999, by and among the Company, the Bank and Rexford C. Decker (incorporated herein by reference to Exhibit 10.20 to the Company's Annual Report on Form 10-K for the year ended December 31, 1999).
10.21 Amendment to Change of Control Severance Agreement, entered into as of June 28, 1999, by and among the Company, the Bank and Rexford C. Decker (incorporated herein by reference to Exhibit 10.21 to the Company's Annual Report on Form 10-K for the year ended December 31, 1999).
10.22 Change Employment Agreement, entered into as of December 6, 2000, by and among the Company, the Bank and William M. LeBeau.
10.23 Employment Agreement, entered into as of December 28, 2000, by and among the Company, the Bank and Larry G. Denniston.
10.24 Form of Junior Subordinated Indenture, dated as of July 24, 1998, between the company and Bankers Trust Company (incorporated herein by reference to Exhibit 4.1 to the Company's Registration Statement on Form S-4 filed with the SEC on September 25, 1998).
13 Annual Report to Shareholders for the Year Ended December 31, 2000
21 List of the Company's Subsidiaries
23 Consent of Independent Public Accountants
(d) There are no other financial statements and financial statement schedules which were excluded from the Annual Report which are required to be included herein.
SIGNATURES
Pursuant to the requirements of Section 13 of the Securities Exchange Act of 1934, BSB Bancorp, Inc. has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
BSB BANCORP, INC. - ----------------- (Registrant)
By:/s/ Howard W. Sharp Date: March 29, 2001 ------------------------ -------------- Howard W. Sharp Chief Executive Officer and President
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
By:/s/ Rexford C. Decker ------------------------ Rexford C. Decker Date: March 29, 2001 Senior Vice President and Chief Financial -------------- Officer (Principal Accounting Officer)
By:/s/ Ferris G. Akel ------------------------ Ferris G. Akel, Director Date: March 29, 2001 -------------- By:/s/ Robert W. Allen ------------------------ Robert W. Allen, Director Date: March 29, 2001 -------------- By:/s/ Diana J. Bendz ------------------------ Diana J. Bendz, Director Date: March 29, 2001 -------------- By:/s/ William C. Craine ------------------------ William C. Craine, Director Date: March 29, 2001 -------------- By:/s/ John P. Driscoll ------------------------ John P. Driscoll, Director Date: March 29, 2001 -------------- By:/s/ Thomas F. Kelly ------------------------ Thomas F. Kelly , Ph.D., Director Date: March 29, 2001 -------------- By:/s/ David A. Niermeyer ------------------------ David A. Niermeyer, Director Date: March 29, 2001 -------------- By:/s/ Mark T. O'Neil, Jr. ------------------------ Mark T. O'Neil, Jr., Director Date: March 29, 2001 -------------- By:/s/ William H. Rincker ------------------------ William H. Rincker, Director Date: March 29, 2001 -------------- By:/s/ Thomas L. Thorn ------------------------ Thomas L. Thorn, Director Date: March 29, 2001 --------------
Exhibit Index --------------
No. Exhibit - --- -------
3.1 Certificate of Incorporation, as amended by the Certificate of Amendment dated May 24, 1993 and the Certificate of Amendment dated April 22, 1996 (incorporated by reference from Exhibit 3.1 to the Quarterly Report on Form 10-Q of BSB Bancorp, Inc. (the "Company") for the Quarter Ended March 31, 1996).
3.2 Form of Amended Certificate of Designation, Preferences and Rights of Series A Junior Participating Preferred Stock and form of Certificate of Designation, Preferences and Rights of Series A Junior Participating Preferred Stock (incorporated by reference from Exhibit 99.2 to the Company's Current Report on Form 8-K, filed with the Securities and Exchange Commission (the "SEC") on May 26, 1999).
3.3 Bylaws, as amended (incorporated by reference from Exhibit 3 to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 1999).
4.1 Specimen common stock certificate (incorporated herein by reference from Exhibit 4 to the Company's Registration Statement on Form S-4, filed with the SEC on March 2, 1988).
4.2 Rights Agreement, dated as of May 24, 1999, between the Company and American Stock Transfer & Trust Company (incorporated herein by reference to Exhibit 99.1 to the Company's Current Report on Form 8-K, filed with the SEC on May 26, 1999).
10.1 Long-Term Incentive and Capital Accumulation Plan, as amended (incorporated herein by reference to Exhibit A to the Company's Proxy Statement for the 1990 Annual Meeting of Shareholders).
10.2 1996 Long-Term Incentive and Capital Accumulation Plan (incorporated by reference to Exhibit A to the Company's Proxy Statement for the 1996 Annual Meeting of Shareholders).
10.3 Amendment Number 1 to 1996 Long-Term Incentive and Capital Accumulation Plan (incorporated herein by reference to Exhibit 10 to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 1998).
10.4 Amendment Number 2 to 1996 Long-Term Incentive and Capital Accumulation Plan (incorporated by reference to Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q for the period ended March 31, 1999).
10.5 Directors' Stock Option Plan (incorporated herein by reference to Exhibit A to the Company's Proxy Statement for the 1994 Annual Meeting of Shareholders).
10.6 Change of Control Severance Agreement, entered into as of April 19, 2000, by and among the Company, the Bank, and Matthew W. Schaefer.
10.7 Employment Agreement, entered into as of December 28, 2000, by and among the Company, the Bank, and Arthur C. Smith.
10.8 Employment Contract, entered into as of November 2, 1990, by and among the Company, the Bank and Alex S. DePersis (incorporated herein by reference to Exhibit 10.4 to the Company's Annual Report on Form 10-K for the Year Ended December 31, 1992).
10.9 Amendment to Employment Contract, entered into as of December 29, 1995, by and among Alex S. DePersis, the Company and the Bank (incorporated herein by reference to Exhibit 10.4 to the Company's Annual Report on Form 10-K for the year ended December 31, 1995).
10.10 Amendment to Employment Contract, entered into as of December 30, 1996, by and among the Company, the Bank and Alex S. DePersis (incorporated herein by reference to Exhibit 10.6 to the Company's Annual Report on Form 10-K for the year ended December 31, 1996).
10.11 Amendment to Employment Contract, entered into as of December 29, 1997, by and among the Company, the Bank and Alex S. DePersis (incorporated herein by reference to Exhibit 10.8 to the Company's Annual Report on Form 10-K for the year ended December 31, 1997).
10.12 Amendment to Employment Contract, entered into as of June 28, 1999, by and among the Company, the Bank and Alex S. DePersis (incorporated herein by reference to Exhibit 10.12 to the Company's Annual Report on Form 10-K for the year ended December 31, 1999).
10.13 Employment Agreement, entered into as of January 25, 1999, by and among the Company, the Bank and John P. Driscoll incorporated herein by reference to Exhibit 10.13 to the Company's Annual Report on Form 10-K for the year ended December 31, 1999).
10.14 Amendment to Employment Agreement, entered into as of May 31, 2000, by and among the Company, the Bank and John P. Driscoll.
10.15 Employment Agreement, entered into as of November 1, 2000, by and among the Company, the Bank and John B. Wescott.
10.16 Employment Agreement, entered into as of November 10, 2000, by and among the Company, the Bank and Howard W. Sharp.
10.17 Change of Control Severance Agreement, entered into as of November 2, 1990, by and among the Company, the Bank and Douglas R. Johnson (incorporated herein by reference to Schedule 10.3 to Exhibit 10.3 to the Company's Annual Report on Form 10-K for the year ended December 31, 1990).
10.18 Amendment to Change of Control Severance Agreement, entered into as of December 29, 1995, by and among the Company, the Bank and Douglas R. Johnson (incorporated herein by reference to Exhibit 10.8 to the Company's Annual Report on Form 10-K for the year ended December 31, 1995).
10.19 Amendment to Change of Control Severance Agreement, entered into as of June 28, 1999, by and among the Company, the Bank and Douglas R. Johnson (incorporated herein by reference to Exhibit 10.19 to the Company's Annual Report on Form 10-K for the year ended December 31, 1999) .
10.20 Change of Control Severance Agreement, entered into as of February 22, 1999, by and among the Company, the Bank and Rexford C. Decker (incorporated herein by reference to Exhibit 10.20 to the Company's Annual Report on Form 10-K for the year ended December 31, 1999).
10.21 Amendment to Change of Control Severance Agreement, entered into as of June 28, 1999, by and among the Company, the Bank and Rexford C. Decker (incorporated herein by reference to Exhibit 10.21 to the Company's Annual Report on Form 10-K for the year ended December 31, 1999).
10.22 Change Employment Agreement, entered into as of December 6, 2000, by and among the Company, the Bank and William M. LeBeau.
10.23 Employment Agreement, entered into as of December 28, 2000, by and among the Company, the Bank and Larry G. Denniston.
10.24 Form of Junior Subordinated Indenture, dated as of July 24, 1998, between the company and Bankers Trust Company (incorporated herein by reference to Exhibit 4.1 to the Company's Registration Statement on Form S-4 filed with the SEC on September 25, 1998).
13 Annual Report to Shareholders for the Year Ended December 31,
21 List of the Company's Subsidiaries
23 Consent of Independent Public Accountants
(d) There are no other financial statements and financial statement schedules which were excluded from the Annual Report which are required to be included herein.