Brookline Bancorp Announces 2000 Fourth Quarter and Annual Earnings.Business Editors/Banking and Financial Writers BROOKLINE Brookline (br  k`līn), town (1990 pop. 54,718), Norfolk co., E Mass., a suburb adjacent to Boston; settled 1630s, set off from Boston and inc. 1705. , Mass.--(BUSINESS WIRE)--Jan. 18, 2001Brookline Bancorp, Inc. (the "Company") (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :BRKL), the holding company for Brookline Savings Bank savings bank, financial institution that, until recently, performed only the following functions: receiving savings deposits of individuals, investing them, and providing a modest return to its depositors in the form of interest. and Lighthouse lighthouse, towerlike structure erected to give guidance and warning to ships and aircraft by either visible or radioelectrical means. Lighthouses were long built to conform in structure to their geographical location. Until the beginning of the 19th cent. Bank ("Lighthouse"), announced today that it earned $5,182,000 ($0.19 per share) for the quarter ended December December: see month. 31, 2000 compared to $5,166,000 ($0.19 per share) for the quarter ended December 31, 1999. The 2000 and 1999 quarters included securities gains, net of taxes, of $1,099,000 ($0.04 per share) and $1,187,000 ($0.04 per share), respectively, and after-tax af·ter-tax also af·ter·tax adj. Relating to or being that which remains after payment, especially of income taxes: after-tax profits. expense related to the recognition and retention plan ("RRP RRP n abbr (= recommended retail price) → PVP m ") approved by stockholders of $66,000 and $397,000, respectively. The 2000 and 1999 quarters also included on an after-tax basis After-tax basis The comparison basis used to analyze the net after-tax returns on a corporate taxable bond and a municipal tax-free bond. $885,000 ($0.03 per share) and $234,000 ($0.01 per share), respectively, of net loss related to Lighthouse, an internet-only bank that commenced doing business with the public near the end of the second quarter of 2000. Excluding securities gains, the expense of the RRP and Lighthouse's net losses, and adding back foregone fore·gone v. Past participle of forego1. adj. Having gone before; previous. Usage Note: The word foregone has recently developed a new meaning as a truncation of the phrase income on the Company's $25 million investment in Lighthouse, quarterly net operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. was $5,266,000 ($0.20 per share) in 2000 compared to $4,610,000 ($0.17 per share) in 1999, an improvement of 14% (18% on a per share basis). Net income for the year ended December 31, 2000 was $21,634,000 ($0.80 per share) compared to $20,791,000 ($0.74 per share) for the year ended December 31, 1999, an improvement of 4% (8% on a per share basis). The 2000 and 1999 years included securities gains, net of taxes, of $5,214,000 ($0.19 per share) and $4,547,000 ($0.16 per share), respectively, and after-tax expense for the RRP of $725,000 ($0.03 per share) and $2,090,000 ($0.08 per share), respectively. The 2000 and 1999 years also included on an after-tax basis $2,513,000 ($0.09 per share) and $392,000 ($0.01 per share), respectively, of net loss related to Lighthouse. Excluding securities gains, the expense of the RRP and Lighthouse's net losses, and adding back foregone income on the Company's investment in Lighthouse, net operating income was $20,325,000 ($0.76 per share) in 2000 compared to $18,726,000 ($0.67 per share) in 1999, an increase of 9% both in total amount and on a per share basis. Improved quarterly operating results were derived de·rive v. de·rived, de·riv·ing, de·rives v.tr. 1. To obtain or receive from a source. 2. primarily from an $82.3 million, or 9%, increase in average earning assets Earning Assets Any income-earning asset owned by a company. Notes: These assets are generally interest-bearing accounts, bonds, and securities available for sale. See also: Asset, Asset Valuation, Earnings, Net Interest Margin between the fourth quarter in 2000 and the comparable quarter in 1999 and an increase in interest rate spread from 2.80% in the 1999 quarter to 2.86% in the 2000 quarter. The 2000 fourth quarter interest rate spread declined from the 2000 third quarter interest rate spread of 3.05% primarily as a result of a $54.9 million increase in higher yielding certificates of deposit with maturities mostly in the range of four to six months. Excluding Lighthouse and RRP expenses, the Company's operating efficiency ratio remained constant at 26% for both of the quarters. Improved yearly operating results were derived primarily from an increase in interest rate spread from 2.69% in 1999 to 2.95% in 2000 and a $35.2 million, or 4%, increase in average earning assets. The higher interest rate spread was partly attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to the increase in the percent of average loans outstanding to total average earning assets from 66% in 1999 to 71% in 2000. Excluding Lighthouse and RRP expenses, the Company's operating efficiency ratio was 26% in both years. At December 31, 2000, Lighthouse had total assets of $75.0 million, total loans of $33.2 million and total deposits of $52.4 million; total assets were $40.2 million at September September: see month. 30, 2000. As has been previously communicated, Lighthouse was projected to operate on a loss basis for at least its first two years of operations. A review of Lighthouse's business plan is underway with the objective of significantly reducing future operating losses operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. from the level incurred in the first half year of its operations. Achievement of this objective will depend in part on factors outside the control of the Company and, accordingly, cannot be assured. For each of the past seven quarters, the Company has realized after-tax gains from sales of marketable Marketable are securities that can be easily converted into cash. Such securities will generally have highly liquid markets allowing the security to be sold at a reasonable price very quickly. equity securities in the range of $1.1 million to $1.5 million. These gains have effectively offset Lighthouse losses and RRP expense. Continuation continuation - continuation passing style of securities gains in the range realized during the past several quarters cannot be sustained indefinitely in·def·i·nite adj. Not definite, especially: a. Unclear; vague. b. Lacking precise limits: an indefinite leave of absence. c. . Actual gains in the future, if any, will be highly dependent on factors outside the control of the Company and, accordingly, cannot be assured. As also previously communicated, the Company's defined benefit pension plan is in the process of being terminated ter·mi·nate v. ter·mi·nat·ed, ter·mi·nat·ing, ter·mi·nates v.tr. 1. To bring to an end or halt: and will be replaced in 2001 with a defined contribution plan Defined contribution plan A pension plan whose sponsor is responsible only for making specified contributions into the plan on behalf of qualifying participants. Related: Defined benefit plan once IRS An abbreviation for the Internal Revenue Service, a federal agency charged with the responsibility of administering and enforcing internal revenue laws. approval is obtained. Termination The point where a line, channel or circuit ends. See SCSI termination and hybrid. of the plan, which is expected to take place in the second quarter of 2001, should result in an after-tax gain in the range of $1.7 million. The actual amount of the gain will be determined based on economic information as of future dates in time. The Company also announced that the Board of Directors approved an increase in the regular quarterly dividend from $0.06 to $0.07 per share of common stock. The new rate of quarterly dividend will be paid on February February: see month. 15, 2001 to stockholders of record as of January January: see month. 31, 2001. This press release contains statements about future events that constitute forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. Actual results could differ materially from those projected in the forward-looking statements. Factors that might cause such a difference include, but are not limited to, general economic conditions, changes in interest rates, regulatory reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. considerations, competition, technological developments, retention and recruitment recruitment /re·cruit·ment/ (re-krldbomact´ment) 1. the gradual increase to a maximum in a reflex when a stimulus of unaltered intensity is prolonged. 2. of qualified personnel, and market acceptance of the Company's pricing, products and services.
BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(In thousands expect share data)
Dec. 31, Dec. 31, Sept. 30,
2000 1999 2000
Assets
Cash and due from banks $ 13,505 $ 8,203 $ 11,731
Short-term investments 66,870 9,435 11,680
Securities available for sale 149,361 128,275 139,606
Securities held to maturity
(market value of $50,337,
$102,451 and $60,913,
respectively) 50,447 103,434 61,118
Restricted equity securities 7,145 6,279 6,895
Loans, excluding money market
loan participations 716,559 635,556 688,181
Money market loan
participations 28,250 15,400 46,000
Allowance for loan losses (14,315) (13,874) (14,261)
Net loans 730,494 637,082 719,920
Other investment 3,360 3,022 3,263
Accrued interest receivable 6,521 5,811 5,943
Bank premises and
equipment, net 3,768 1,535 3,435
Other real estate owned, net -- 707 530
Deferred tax asset 3,999 3,226 4,712
Other assets 680 325 939
Total assets $ 1,036,150 $ 907,334 $ 969,772
Liabilities and Stockholders' Equity
Deposits $ 608,621 $ 512,136 $ 546,670
Borrowed funds 133,400 108,800 130,400
Mortgagors' escrow accounts 3,762 3,624 4,187
Income taxes payable 169 898 1,236
Accrued expenses and
other liabilities 7,613 7,076 7,872
Total liabilities 753,565 632,534 690,365
Stockholders' equity:
Preferred stock, $.01 par value;
5,000,000 shares authorized,
none issued -- -- --
Common stock, $.01 par value;
45,000,000 shares authorized,
29,641,500 shares issued 296 296 296
Additional paid-in capital 140,327 140,355 140,329
Retained earnings 165,210 150,098 161,647
Accumulated other
comprehensive income (A) 6,244 7,759 6,354
Treasury stock, at cost -
2,185,928 shares,
1,491,700 shares and
2,140,428 shares,
respectively (22,987) (16,334) (22,498)
Unearned compensation-
recognition and retention plan (1,070) (2,316) (1,184)
Unallocated common stock
held by ESOP - 455,771 shares,
407,218 shares and
464,748 shares, respectively (5,435) (5,058) (5,537)
Total stockholders' equity 282,585 274,800 279,407
Total liabilities and
stockholders' equity $ 1,036,150 $ 907,334 $ 969,772
(A) Represents net unrealized gains on securities available for sale,
net of taxes.
BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Consolidated Statements of Income
(In thousands except share data)
Three months ended Year ended
December 31, December 31
2000 1999 2000 1999
Interest income:
Loans, excluding
money market loan
participations $ 14,688 $ 12,768 $ 55,802 $ 48,595
Money market loan
participations 731 187 2,054 1,539
Debt securities 2,802 3,048 11,081 12,795
Marketable equity
securities 209 238 903 877
Restricted equity
securities 137 101 485 369
Short-term investments 578 138 1,235 634
Total interest income 19,145 16,480 71,560 64,809
Interest expense:
Deposits 6,539 5,241 23,234 20,708
Borrowed funds 2,097 1,638 7,338 6,454
Total interest
expense 8,636 6,879 30,572 27,162
Net interest income 10,509 9,601 40,988 37,647
Provision for loan losses 58 150 427 450
Net interest income
after provision for
loan losses 10,451 9,451 40,561 37,197
Non-interest income:
Fees and charges 338 207 1,009 868
Gains on sales
of securities, net 1,794 1,850 8,253 7,437
Other real estate
owned income, net 89 (48) 172 711
Other income 129 86 460 98
Total non-interest
income 2,350 2,095 9,894 9,114
Non-interest expense:
Compensation and
employee benefits 2,124 1,564 7,631 6,153
Recognition and
retention plan 114 683 1,246 3,593
Occupancy 285 180 972 707
Equipment and
data processing 762 296 1,986 1,172
Advertising and
marketing 804 129 2,388 504
Internet bank
start-up expenses -- 403 746 675
Other 506 380 1,854 1,354
Total non-interest
expense 4,595 3,635 16,823 14,158
Income before
income taxes 8,206 7,911 33,632 32,153
Provision for
income taxes 3,024 2,745 11,998 11,362
Net income $ 5,182 $ 5,166 $ 21,634 $ 20,791
Weighted average
common shares
outstanding during
the period 26,858,966 27,589,737 26,881,433 28,016,150
Basic and diluted
earnings per
common share $ 0.19 $ 0.19 $ 0.80 $ 0.74
BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Selected Financial Ratios and Other Data
Three months ended Year ended
December 31, December 31,
2000 1999 2000 1999
Performance Ratios (annualized):
Return on average assets 2.08% 2.27% 2.29% 2.31%
Return on average
stockholders' equity 7.37% 7.46% 7.83% 7.47%
Return on average
stockholders' equity,
excluding effect of
unrealized gains on
securities available
for sale, net of taxes 7.51% 7.73% 7.99% 7.81%
Interest rate spread 2.86% 2.80% 2.95% 2.69%
Net interest margin 4.30% 4.30% 4.43% 4.21%
Efficiency ratio (A) 25.55% 25.89% 25.63% 25.15%
Dividend paid per share
during period $ .06 $ .06 $ .24 $ .21
(A) Represents the ratio of non-interest expenses (exclusive of
recognition and retention plan) divided by the sum of net interest
income and non-interest income (exclusive of gains on sales of
securities). Lighthouse Bank's income and expenses are excluded.
At At At
Dec. 31, Dec. 31, Sept. 30,
2000 1999 2000
(dollars in thousands except per share data)
Capital Ratio:
Stockholders' equity to
total assets 27.27% 30.29% 28.81%
Asset Quality:
Non-performing loans $ -- $ -- $ 142
Non-performing assets -- 707 672
Allowance for loan losses 14,315 13,874 14,261
Allowance for loan losses
as a percent of total loans,
excluding money market
loan participations 2.00% 2.18% 2.07%
Non-performing assets
as a percent
of total assets 0.00% 0.08% 0.07%
Per Share Data:
Book value per share
at end of period $ 10.29 $ 9.76 $ 10.16
Market value per share
at end of period 11.50 9.75 11.44
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