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

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

Georgetown Bancorp, Inc. 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.