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United States
Securities and Exchange Commission
Washington, D.C. 20549

Form 10-K

Securities registered pursuant to Section 12(b) of the Act:   Not applicable

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months and (2) has been subject to such filing requirements for the past 90 days.

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference to Part III of this Form 10-K or any amendment to this Form 10-K.   o

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act).

The aggregate market value of the common equity held by non-affiliates of the Registrant as of June 28, 2002 was approximately $237.5 million. Number of shares of common stock outstanding as of March 6, 2003 - 9,195,914

DOCUMENTS INCORPORATED BY REFERENCE

     List hereunder the following documents incorporated by reference and the Part of the Form 10-K into which the document is incorporated:

     (1)  Portions of the Registrant’s Annual Report to Shareholders for the year ended December 31, 2002 are incorporated by reference into Part II, Items 5 - 8 of this Form 10-K.

     (2)  Portions of the Definitive Proxy Statement are incorporated by reference into Part III, Items 10 - 13 of this Form 10-K.

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FORM 10-K ANNUAL REPORT
FOR THE YEAR ENDED
DECEMBER 31, 2002
BSB BANCORP, INC.

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PART I

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, which is the Company’s sole segment. All references to the Company include the activities of the Bank, unless the context indicates otherwise. 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”), as well as the New York State Banking Department.

BSB Bank & Trust Company

          The Bank is headquartered in Binghamton, New York and at December 31, 2002 conducted business in Broome, Chenango, Onondaga and Tioga Counties and adjacent areas of New York State. During the first quarter of 2002, the Company sold its $10.7 million credit card portfolio to American Express and recognized a net gain before taxes of approximately $1.8 million on the sale. The increasing costs associated with maintaining the technology to provide a high level of service to our customers and the higher levels of charge-offs associated with credit card debt made this a less profitable line of business for the Company. During the fourth quarter of 2002, the Company sold its two Elmira branches located in the Chemung County area. The sale allowed the Company to concentrate efforts on the further development of its retail branch operations in the Greater Binghamton area and the Central New York region. The sale included deposits of approximately $44.2 million, net loans of approximately $2.8 million and certain other assets and resulted in a net gain before taxes of approximately $3.1 million. BSB Bank & Trust serves its customers from 20 full-service banking offices. Additional banking services are provided by a network of branch-based and off-premise automatic teller machines, as well as 12 proprietary banking service locations (“Storeteller”) within a large area supermarket chain.

          The primary market areas of the Bank are the Southern Tier of New York, centered around the city of Binghamton, and Central New York, centered around Syracuse. These metropolitan areas have a combined population of nearly one million people. Over the past decade, BSB Bank & Trust has grown from a traditional thrift institution to a diversified financial services organization providing a full range of deposit and loan products to area businesses and consumers, mortgage banking, trust, investment and insurance services. The Bank is a major provider of banking services to consumers and the business community, as well as banking services for school districts and cooperative education centers, cities, towns, villages and numerous municipal agencies. It is also active in indirect automobile financing.

          The Bank is subject to regulation, examination and supervision by the New York State Banking Department (“NYSBD”) and the Federal Deposit Insurance Corporation (“FDIC”). Deposits in the Bank are insured by the FDIC to the extent provided by law. The Bank is also a member of the Federal Home Loan Bank of New York (“FHLB”).

LENDING ACTIVITIES

          The Company offers commercial and residential permanent and construction mortgage loans, commercial and industrial loans (“C&I”), various direct and indirect consumer loans including home equity lines of credit and home equity loans and other types of small business and consumer loans. As a community bank, all loans are approved locally, either by individual loan officers, the management loan committee or the directors’ loan committee, depending on the size and type of loan. Interest rates charged by the Company 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, including local competition, monetary policies of the Federal government, including the Federal Reserve Board, legislative tax policies and governmental budgetary matters.

          One of the Company’s objectives during 2002 was to continue the process initiated in 2001 of restructuring its asset mix and, as part of the process of achieving this objective, reduce the size of the commercial and industrial

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portfolio. Another part of the restructuring process was to increase the size of the real estate loan portfolio, increasing both residential and commercial mortgage loans. This was consistent with the goal of improving asset quality and creating more sustainable and stable earnings over time.

          The Company’s portfolio of loans totaled $1.3 billion at December 31, 2002, representing 66.2% of the Company’s total assets at that date, compared to $1.5 billion, and 72.0% of the Company’s total assets at December 31, 2001. The Company continued to lower the balance of C&I loans within its portfolio of assets. The balance of C&I loans decreased to $492.2 million or 36.5% of all loans at December 31, 2002 compared to $750.6 million or 50.6% of all loans at December 31, 2001. These loans are generally tied to the Company’s Prime Rate. Real estate loans, another strategic focus during 2002, increased to $477.3 million or 35.4% of all loans at December 31, 2002 compared to $355.8 million or 24.0% at December 31, 2001.

          The balance of consumer loans remained stable at $378 million at both December 31, 2002 and 2001. Indirect new auto loans increased from $39.5 million at December 31, 2001 to $60.1 million at December 31, 2002. This shift of loans was done with competitive pricing to obtain higher quality new auto loans which historically have lower incidences of charge-offs. Net charge-offs for these loans represent 10 basis points in 2002 compared to 28 basis points in 2001 of the average loan balances for indirect new auto loans.

          As rates continued to decline during the year, the Company considered it prudent to sell its longest duration residential mortgage loan originations while retaining its shorter term fixed- and variable-rate loans and all bi-weekly mortgage loans. In this strategy, real estate loans increased to 35.4% of the loan portfolio at December 31, 2002 from 24.0% at December 31, 2001. This increase in the percent of real estate loans to total loans is consistent with the Company’s overall strategy to improve asset quality by dedicating itself to implementing a strong credit culture, translating into a stronger credit risk profile for the future.

Loan Portfolio Composition

          The following table sets forth the composition of the Company’s loan portfolio by loan type as of the dates indicated.