Brookline Bancorp Announces Third Quarter Earnings and Dividend Declaration
More News related to BRKL
- Brookline Bancorp (BRKL) Reports Q3 Earnings
- Brookline Bancorp Announces Third Quarter Earnings and Dividend Declaration
- FBR Capital Resumes Coverage on Northeastern Banks and Thrifts (SBNY, HCBK, AF, MTB, more...)
- Stifel Nicolaus Downgrades Brookline Bancorp (BRKL) to Hold Following Q1 Results
- Brookline Bancorp (BRKL) Appoints Paul A. Perrault as CEO
BROOKLINE, Mass.--(BUSINESS WIRE)-- Brookline Bancorp, Inc. (the "Company") (NASDAQ: BRKL) announced today its earnings for the 2009 third quarter and approval by the Board of Directors of a regular quarterly dividend of $0.085 per share payable November 13, 2009 to stockholders of record on October 30, 2009.
The Company earned $5,242,000, or $0.09 per share on a basic and diluted basis, for the quarter ended September 30, 2009 compared to $1,751,000, or $0.03 per share on a basic and diluted basis, for the quarter ended September 30, 2008. Net income for the nine months ended September 30, 2009 was $13,364,000, or $0.23 per share on a basic and diluted basis, compared to $8,120,000, or $0.14 per share on a basic and diluted basis, for the nine months ended September 30, 2008. Operating highlights included:
-- Improvement in net interest margin in both the 2009 third quarter and
nine month period
-- $200.8 million (15.1%) of deposit growth in 2009, $27.7 million of which
occurred in the third quarter
-- Reduced provisions for credit losses in both the 2009 third quarter and
nine month period due primarily to a decline in indirect automobile loan
net charge-offs
-- Receipt of $1,614,000 of income in the 2009 second quarter resulting
from full payment of a loan on which there was unaccreted discount
-- No dividend income on Federal Home Loan Bank of Boston ("FHLB") stock in
2009 compared to $992,000 in the 2008 nine month period
-- An increase in FDIC insurance expense in both the 2009 third quarter and
nine month period of $269,000 and $2,197,000, respectively. A special
assessment of $1,102,000 was charged to expense in the 2009 second
quarter.
-- Gains on sales of mortgage-backed securities of $594,000 in the 2009
third quarter and $940,000 in the 2009 nine month period. On an
after-tax basis, the gains offset penalties from prepayment of borrowed
funds which amounted to $533,000 in the 2009 third quarter and
$1,115,000 in the 2009 nine month period. The transactions were done to
improve net interest margin and reduce the Company's interest rate risk
exposure.
-- Recognition of impairment losses on securities, net of non-credit
losses, in the 2009 and 2008 nine month periods of $726,000 and
$2,635,000, respectively. Of the 2008 impairment loss, $1,600,000 was
recognized in the third quarter.
-- Foregone interest income of $472,000 in the 2009 nine month period due
to a $22.6 million reduction in the average balance of stockholders'
equity resulting from the payment of semi-annual extra dividends
Excluding the $1,614,000 of income referred to above, net interest income was higher in the third quarter and nine month periods in 2009 than in the comparable 2008 periods by 12.6% and 12.0%, respectively, due to loan and deposit growth and improvement in net interest margin. The average balance of interest-earning assets grew $126 million (5.2%) between the 2009 and 2008 third quarters and $166 million (6.9%) between the 2009 and 2008 nine month periods. All of the asset growth in those periods was in loans. Much of the deposit growth was used to pay off higher cost borrowed funds and brokered deposits. Net interest margin improved to 3.39% in the 2009 third quarter from 3.16% in the 2009 second quarter (excluding the $1,614,000 of income) and 3.18% in the 2008 third quarter. In those same periods, interest rate spread improved to 2.90% from 2.60% (excluding the $1,614,000 of income) and 2.46%, respectively. While net interest margin and interest rate spread are expected to continue to improve in the near term, an unexpected rapid rise in interest rates and changes in economic conditions could have a negative effect on those ratios in the future.
As a member of the FHLB, the Company is obliged to own stock in the FHLB based on its level of borrowings from the FHLB. At September 30, 2009, the Company owned $36.0 million of FHLB stock, $10.3 million of which was in excess of its required level of ownership. Due to reported losses, the FHLB has restricted redemption of excess levels of stock ownership and ceased the payment of dividends on its stock. The Company does not expect to receive any dividend income from the FHLB in 2009.
The provision for credit losses was $2,473,000 in the 2009 third quarter compared to $3,162,000 in the 2008 third quarter and $7,150,000 in the 2009 nine month period compared to $7,855,000 in the 2008 nine month period. The provision is comprised of amounts relating to the indirect automobile ("auto") portfolio, equipment finance and small business loans originated by a subsidiary ("Eastern"), the remainder of the Company's loan portfolio and unfunded credit commitments.
The auto loan portfolio amounted to $566.9 million at September 30, 2009 compared to $573.3 million at June 30, 2009 and $597.2 million at December 31, 2008. The decline resulted from lower loan originations as the auto industry experienced reduced levels of sales. Underwriting continued to be conservative as only 2.6% (2.0% in the 2009 third quarter) of the $166.3 million of loans originated in the first nine months of 2009 were to borrowers with credit scores below 660. The average credit score of the borrowers to whom those loan originations were made was 760. Auto loans delinquent over 30 days amounted to $10.5 million, or 1.84% of loans outstanding at September 30, 2009, compared to $13.1 million (2.20%) at December 31, 2008.
Auto loan net charge-offs declined to $1,348,000 (0.95% of average loans outstanding on an annualized basis) in the 2009 third quarter from $1,749,000 (1.16%) in the 2008 third quarter. Net charge-offs in the 2009 and 2008 nine month periods were $4,438,000 (1.02%) and $4,808,000 (1.08%), respectively.
The provision for auto loan losses was $1,500,000 in the 2009 third quarter compared to $2,600,000 in the 2008 third quarter and $4,950,000 in the 2009 nine month period compared to $6,346,000 in the 2008 nine month period. The allowance for auto loan losses increased from $7,937,000, or 1.33% of loans outstanding at December 31, 2008, to $8,449,000 (1.49%) at September 30, 2009.
The provision for Eastern loan losses was $173,000 in the 2009 third quarter compared to $242,000 in the 2008 third quarter and $820,000 in the 2009 nine month period compared to $639,000 in the 2008 nine month period. Additionally, write-downs of assets acquired through repossession amounted to $72,000, $9,000, $429,000 and $142,000 in those respective periods. The annualized rate of net charge-offs, combined with write-downs of assets acquired, equaled 0.96% in the first nine months of 2009 compared to 0.67% in the first nine months of 2008.
Eastern loans amounted to $154.1 million at September 30, 2009 and $147.4 million at December 31, 2008. Eastern loans delinquent over 30 days declined from $2,929,000 (1.99% of loans outstanding) at December 31, 2008 to $2,436,000 (1.58%) at September 30, 2009. The total of Eastern loans on watch, restructured loans and non-accrual loans decreased from $8,049,000 at December 31, 2008 to $7,951,000 at September 30, 2009. The allowance for Eastern loan losses was $2,737,000 (1.78%) of loans outstanding at September 30, 2009 and $2,577,000 (1.75%) at December 31, 2008.
The remainder of the Company's loan portfolio at September 30, 2009, which amounted to $1.553 billion (including unfunded credit commitments of $121 million), grew $88 million in the first nine months of 2009. An increase of $38 million in commercial mortgage loans, (which brought the total of that portfolio to $528 million), as well as increases of $47 million in multi-family mortgage loans ($398 million in total), $16 million in commercial loans ($195 million in total) and $9 million in home equity loans ($51 million in total), were partly offset by reductions of $19 million in one-to-four family mortgage loans ($344 million in total) and $4 million in construction loans ($33 million in total).
Loans on non-accrual in the portfolios mentioned in the preceding paragraph amounted to $4,869,000 at September 30, 2009 compared to $4,097,000 at June 30, 2009 and $2,950,000 at December 31, 2008; other loans on watch were $9.7 million, $12.2 million and $10.1 million at those respective dates. Additionally, $657,000 of one-to-four family mortgage loans were classified as restructured loans at September 30, 2009. The provision for loan losses relating to the loans mentioned in the preceding paragraph was $900,000 in the 2009 third quarter compared to $650,000 in the 2008 third quarter and $1,480,000 in the 2009 nine month period compared to $1,200,000 in the 2008 nine month period. The provisions were based primarily on loan growth in the respective periods as well as a $318,000 charge-off on one commercial real estate mortgage loan in the 2009 third quarter; no other loan charge-offs were experienced in the 2009 and 2008 periods other than inconsequential amounts of consumer loans.
The total allowance for loan losses was $30.1 million at September 30, 2009, or 1.39% of total loans outstanding at that date, compared to $28.3 million (1.34%) at December 31, 2008. Total non-performing assets were $9.3 million, or 0.35% of total assets at September 30, 2009, compared to $8.8 million (0.33%) at June 30, 2009 and $8.2 million (0.31%) at December 31, 2008.
The liability for unfunded credit commitments was reduced $100,000 in the 2009 third quarter and the 2009 nine month period by credits to the provision for credit losses. In the 2008 third quarter and nine month period, credits to the provision for credit losses were $330,000 and $304,000, respectively. The reductions in 2009 and 2008 were made to reflect management's judgments that the risks associated with unfunded credit commitments had declined in those periods.
The reductions in fees, charges and other income in the 2009 third quarter and nine month period compared to the 2008 third quarter and nine month period resulted primarily from lower deposit service fees and loan prepayment fees.
Total non-interest expenses in the 2009 third quarter were $13,000 less than the $11.2 million incurred in the 2008 third quarter; the $34.4 million incurred in the 2009 nine month period was $2.5 million (7.9%) higher than the total incurred in the 2008 nine month period. Of that increase, $2.2 million resulted from higher FDIC insurance expense and included a $1.1 million special assessment in the 2009 second quarter. Higher expenses for personnel, data processing services and professional fees associated with addressing compliance matters relating to a regulatory Order (which was subsequently lifted in the 2009 third quarter) were partially offset by reductions in expense for restricted stock awards and supplemental retirement benefits.
The above text contains statements about future events that constitute forward-looking statements. Projections about future events are subject to risks and uncertainties that could cause actual results to differ materially. Factors that could cause such differences include, but are not limited to, general economic conditions, changes in interest rates, regulatory considerations and competition.
BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(In thousands except share data)
September 30, June 30, December 31,
2009 2009 2008
ASSETS
Cash and due from banks $ 16,048 $ 18,363 $ 22,270
Short-term investments 93,842 98,364 99,082
Securities available for sale 272,933 286,744 292,339
Securities held to maturity
(market value of $146, $146 and 134 135 161
$171, respectively)
Restricted equity securities 36,335 36,335 36,335
Loans 2,169,427 2,146,311 2,105,551
Allowance for loan losses (30,126 ) (29,373 ) (28,296 )
Net loans 2,139,301 2,116,938 2,077,255
Accrued interest receivable 8,762 8,844 8,835
Bank premises and equipment, net 10,225 10,309 10,218
Deferred tax asset 10,249 10,686 13,328
Prepaid income taxes - 2,587 193
Goodwill 43,241 43,241 43,241
Identified intangible assets, net
of accumulated amortization of 3,467 3,839 4,583
$9,485, $9,113 and $8,369,
respectively
Other assets 4,377 4,728 5,165
Total assets $ 2,638,914 $ 2,641,113 $ 2,613,005
LIABILITIES AND EQUITY
Deposits (excluding brokered $ 1,528,630 $ 1,500,959 $ 1,327,844
deposits)
Brokered deposits - - 26,381
Borrowed funds 595,020 628,768 737,418
Mortgagors' escrow accounts 6,147 5,846 5,655
Income taxes payable 1,475 - -
Accrued expenses and other 18,208 18,165 20,040
liabilities
Total liabilities 2,149,480 2,153,738 2,117,338
Equity:
Brookline Bancorp, Inc.
stockholders' equity:
Preferred stock, $0.01 par value;
50,000,000 shares authorized; - - -
none issued
Common stock, $0.01 par value;
200,000,000 shares authorized;
64,404,419 shares, 64,404,419 644 644 637
shares and 63,746,942 shares
issued, respectively
Additional paid-in capital 523,298 523,140 518,712
Retained earnings, partially 24,519 24,299 38,092
restricted
Accumulated other comprehensive 3,802 2,378 1,385
income
Treasury stock, at cost - (62,107 ) (62,107 ) (62,107 )
5,373,733 shares
Unallocated common stock held by
ESOP - 485,141 shares, 497,681 (2,645 ) (2,713 ) (2,850 )
shares and 522,761 shares,
respectively
Total Brookline Bancorp, Inc. 487,511 485,641 493,869
stockholders' equity.
Noncontrolling interest in 1,923 1,734 1,798
subsidiary
Total equity 489,434 487,375 495,667
Total liabilities and equity $ 2,638,914 $ 2,641,113 $ 2,613,005
BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Consolidated Statements of Income
(In thousands except share data)
Three months ended Nine months ended
September 30, September 30,
2009 2008 2009 2008
Interest income:
Loans $ 31,722 $ 31,735 $ 96,583 $ 93,541
Debt securities 2,528 3,381 8,449 10,537
Marketable equity 22 50 65 173
securities
Restricted equity 2 266 6 998
securities
Short-term investments 48 559 296 1,971
Total interest income 34,322 35,991 105,399 107,220
Interest expense:
Deposits (excluding 7,300 8,997 24,060 30,673
brokered deposits)
Brokered deposits - 366 424 1,846
Borrowed funds 5,247 7,286 18,217 20,089
Subordinated debt - - - 65
Total interest expense 12,547 16,649 42,701 52,673
Net interest income 21,775 19,342 62,698 54,547
Provision for credit 2,473 3,162 7,150 7,855
losses
Net interest income
after provision for 19,302 16,180 55,548 46,692
credit losses
Non-interest income
(loss):
Fees, charges and other 934 958 2,838 3,075
income
Penalty from prepayment (533 ) - (1,115 ) -
of borrowed funds
Gain (loss) on sales of 594 - 940 (214 )
securities
Loss on impairment of - (1,600 ) (779 ) (2,635 )
securities
Less non-credit loss on - - 53 -
impairment of securities
Total non-interest 995 (642 ) 1,937 226
income (loss)
Non-interest expense:
Compensation and 5,195 5,221 15,455 15,779
employee benefits
Occupancy 1,015 922 3,153 2,761
Equipment and data 1,868 1,706 5,495 5,079
processing
Professional services 566 1,021 1,787 2,027
FDIC insurance 435 166 2,438 241
Advertising and 283 421 700 759
marketing
Amortization of
identified intangible 372 438 1,116 1,313
assets
Other 1,410 1,262 4,263 3,936
Total non-interest 11,144 11,157 34,407 31,895
expense
Income before income 9,153 4,381 23,078 15,023
taxes
Provision for income 3,723 2,567 9,362 6,731
taxes
Net income 5,430 1,814 13,716 8,292
Less net income
attributable to 188 63 352 172
noncontrolling interest
in subsidiary
Net income attributable
to Brookline Bancorp, $ 5,242 $ 1,751 $ 13,364 $ 8,120
Inc.
Earnings per common
share attributable to
Brookline Bancorp, Inc.:
Basic $ 0.09 $ 0.03 $ 0.23 $ 0.14
Diluted 0.09 0.03 0.23 0.14
Weighted average common
shares outstanding during
the period:
Basic 58,522,547 57,672,084 58,313,465 57,577,738
Diluted 58,529,929 57,894,141 58,361,623 57,826,811
BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Average Yields / Costs
Three months ended September 30,
2009 2008
Average Interest Average Average Interest Average
balance (1) yield/ balance (1) yield/
cost cost
(Dollars in thousands)
Assets
Interest-earning
assets:
Short-term $ 93,820 $ 48 0.02 % $ 94,610 $ 559 2.35 %
investments
Debt securities (2) 283,478 2,534 3.58 294,760 3,421 4.64
Equity securities 37,877 33 0.34 36,490 333 3.63
(2)
Mortgage loans (3) 1,238,069 16,846 5.44 1,105,895 16,336 5.91
Home equity loans 49,292 464 3.73 36,906 439 4.72
(3)
Commercial loans - 154,096 3,458 8.98 143,568 3,426 9.55
Eastern (3)
Other commercial 125,094 1,499 4.77 109,176 1,491 5.46
loans (3)
Indirect automobile 583,377 9,408 6.40 617,235 9,985 6.42
loans (3)
Other consumer loans 3,987 47 4.72 4,062 58 5.71
(3)
Total
interest-earning 2,569,090 34,337 5.33 % 2,442,702 36,048 5.89 %
assets
Allowance for loan (29,402 ) (25,730 )
losses
Non-interest earning 102,554 101,694
assets
Total assets $ 2,642,242 $ 2,518,666
Liabilities and
Equity
Interest-bearing
liabilities:
Deposits:
NOW accounts $ 92,880 44 0.19 % $ 85,104 52 0.24 %
Savings accounts 93,456 214 0.91 90,290 301 1.32
Money market savings 400,077 1,282 1.27 259,633 1,483 2.27
accounts
Certificates of 852,046 5,760 2.68 774,146 7,161 3.67
deposit
Total deposits 1,438,459 7,300 2.01 1,209,173 8,997 2.95
excluding brokered
Brokered
certificates of - - - 27,047 366 5.37
deposit
Total deposits 1,438,459 7,300 2.01 1,236,220 9,363 3.00
Borrowed funds 614,223 5,247 3.34 691,465 7,286 4.12
Total
interest-bearing 2,052,682 12,547 2.43 % 1,927,685 16,649 3.43 %
liabilities
Non-interest-bearing
demand 79,067 68,123
checking accounts
Other liabilities 21,889 25,632
Total liabilities 2,153,638 2,021,440
Brookline Bancorp,
Inc. stockholders' 486,771 495,559
equity
Noncontrolling
interest in 1,833 1,667
subsidiary
Total liabilities $ 2,642,242 $ 2,518,666
and equity
Net interest income
(tax equivalent 21,790 2.90 % 19,399 2.46 %
basis)/interest rate
spread (4)
Less adjustment of 15 57
tax exempt income
Net interest income $ 21,775 $ 19,342
Net interest margin 3.39 % 3.18 %
(5)
(1) Tax exempt income on equity securities and municipal obligations is included on a tax
equivalent basis.
(2) Average balances include unrealized gains (losses) on securities available for sale.
Equity securities include marketable equity securities (preferred and common stocks) and
restricted equity securities.
(3) Loans on non-accrual status are included in average balances.
(4) Interest rate spread represents the difference between the yield on interest-earning
assets and the cost of interest-bearing liabilities.
(5) Net interest margin represents net interest income (tax equivalent basis) divided by
average interest-earning assets
BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Selected Financial Ratios and Other Data
Three months ended Nine months ended
September 30, September 30,
2009 2008 2009 2008
Performance Ratios
(annualized):
Return on average 4.31 % 1.41 % 3.66 % 2.12 %
stockholders' equity
Return on average assets 0.79 % 0.28 % 0.68 % 0.44 %
Interest rate spread 2.90 % 2.46 % 2.72 % (A) 2.24 %
Net interest margin 3.39 % 3.18 % 3.27 % (A) 3.06 %
(A) Excluding interest income of $1,614,000 due to the payoff of a loan on
which there was unaccreted discount, interest rate spread and net interest
margin would have been 2.64% and 3.19%, respectively.
Dividends paid per share $ 0.085 $ 0.285 $ 0.455 $ 0.655
during period
At At At
September 30, June 30, December 31,
2009 2009 2008
(dollars in thousands except per share data)
Capital Ratio:
Stockholders' equity to total 18.47 % 18.39 % 18.90 %
assets
Tangible stockholders' equity 17.00 % 16.91 % 17.39 %
to total assets
Asset Quality:
Non-accrual loans $ 7,353 $ 6,954 $ 6,059
Non-performing assets 9,332 8,799 8,195
Restructured loans 4,166 3,506 3,358
Allowance for loan losses 30,126 29,373 28,296
Allowance for loan losses as 1.39 % 1.37 % 1.34 %
a percent of total loans
Non-performing assets as a 0.35 % 0.33 % 0.31 %
percent of total assets
Per Share Data:
Book value per share $ 8.26 $ 8.23 $ 8.46
Tangible book value per share 7.47 7.43 7.64
Market value per share 9.72 9.32 10.65
Source: Brookline Bancorp, Inc.
Related Categories
Press ReleasesStocks Mentioned
-0.05Related Entities
Sign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!
