Brookline Bancorp Announces First Quarter Earnings and Decision to Sell or Merge Lighthouse Bank.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)--April 19, 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. ("Brookline") 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 $5,631,000 ($0.21 per share) for the quarter ended March 31, 2001 compared to $5,624,000 ($0.21) for the quarter ended March 31, 2000. Basic and diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of were the same in each of the quarterly periods. The 2001 and 2000 quarters included securities gains, net of taxes, of $1,724,000 ($0.07 per share) and $1,502,000 ($0.06 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 ") of $24,000 ($0.00 per share) and $231,000 ($0.01 per share), respectively. The 2001 and 2000 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. $751,000 ($0.03 per share) and $369,000 ($0.01 per share), respectively, of net losses 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, 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 $4,885,000 ($0.18 per share) in the 2001 quarter compared to $4,722,000 ($0.17 per share) in the 2000 quarter. 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 were $130 million, or 14%, higher in the first quarter of 2001 compared to the first quarter of 2000. Of this increase, $50 million related to the activities of Lighthouse. The improved operating results derived de·rive v. de·rived, de·riv·ing, de·rives v.tr. 1. To obtain or receive from a source. 2. from this asset growth was offset in part by a decline in interest rate spread from 2.97% in the 2000 quarter to 2.68% in the 2001 quarter. The decline was primarily attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to higher rates paid on six month certificates of deposit obtained through promotions initiated in the fourth quarter of 2000 and three reductions in the federal funds rate Federal Funds Rate The interest rate at which a depository institution lends immediately available funds (balances at the Federal Reserve) to another depository institution overnight. by the Federal Reserve in the first quarter of 2001. As a result of a new accounting pronouncement that became effective in the first quarter of 2001, the Company was required to account for a swap agreement entered into over two years ago on a market value basis. Accordingly, the Company incurred a pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta charge of $142,000 against its earnings. The Company also incurred $125,000 of expense in connection with the decision to pursue the sale or merger of Lighthouse. That decision was reached after determining the amount of additional 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. Lighthouse would likely incur To become subject to and liable for; to have liabilities imposed by act or operation of law. Expenses are incurred, for example, when the legal obligation to pay them arises. An individual incurs a liability when a money judgment is rendered against him or her by a court. before achieving satisfactory profitability. It is expected that Lighthouse will be sold to a third party or merged into Brookline in the second or third quarter of 2001. In this regard, an after-tax restructuring charge restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. in the range of $3.0 million is expected to be taken in the second quarter of 2001. This estimate does not take into consideration any revenues that might result from the sale of Lighthouse or any savings from contract negotiations and state income tax benefits that might result from a merger. Lighthouse will continue to incur operating losses until it is sold or merged. The restructuring charge is expected to be partially offset by an after-tax gain in the range of $1.7 million from termination The point where a line, channel or circuit ends. See SCSI termination and hybrid. of the Company's defined benefit pension plan. Termination of the plan is subject to approval by the Internal Revenue Service and the actual amount of the gain will be determined based on economic conditions as of future dates in time. The defined benefit plan Defined benefit plan A pension plan obliging the sponsor to make specified dollar payments to qualifying employees at retirement. The pension obligations are effectively the debt obligation of the plan sponsor. Related: Defined contribution plan will be replaced 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 . For each of the past eight quarters, the Company has realized after-tax gains from the sale 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 $1.7 million. These gains have effectively offset Lighthouse losses and RRP expense. It is not expected that securities gains will be realized in the second quarter of 2001. Operating earnings Operating Earnings Profits after subtracting expenses such as marketing, cost of goods sold, administration and general operating costs from revenue. Notes: Tax and interest expenses are not subtracted - operating earnings are synonymous with EBIT (earnings before , exclusive of Lighthouse, should continue to be in the range experienced during the past several quarters. Achievement of all the projections mentioned herein will depend in part on factors outside the control of the Company and, accordingly, cannot be assured. The Company also announced that the Board of Directors approved a regular quarterly dividend of $0.07 per share of common stock to stockholders of record as of April 30, 2001 and payable May 15, 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, (1) higher or lower than expected net expenses relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the contemplated sale or merger of Lighthouse; (2) the extent or timing of realization (specification) realization - A UML semantic relationship between a classifier that specifies a contract and another classifier that guarantees to carry it out. [Handout by Mr. David Gillibrand]. of the estimated gain from the termination of the Company's pension plan; (3) difficulties encountered in completing the Company's charter conversion plans; (4) a significant increase in competitive pressures among depository institutions Depository institution A financial institution that obtains its funds mainly through deposits from the public. This includes commercial banks, savings and loan associations, savings banks and credit unions. ; (5) changes in the interest rate environment; (6) less favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. general economic conditions; and (7) adverse legislation or 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. changes affecting the Company's business. SEE ATTACHED FINANCIAL TABLES
BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(In thousands expect share data)
March 31, December 31, March 31,
2001 2000 2000
(unaudited) (unaudited)
Assets
Cash and due
from banks $ 12,498 $ 13,505 $ 7,717
Short-term
investments 55,884 66,870 20,684
Securities available
for sale 158,394 149,361 120,656
Securities held to
maturity (market value
of $37,849, $50,337
and $86,112,
respectively) 37,661 50,447 87,110
Restricted equity
securities 7,464 7,145 6,279
Loans, excluding money
market loan
participations 745,700 716,559 653,765
Money market loan
participations 41,000 28,250 15,300
Allowance for loan
losses (14,483) (14,315) (14,027)
Net loans 772,217 730,494 655,038
Other investment 3,450 3,360 3,077
Accrued interest
receivable 5,878 6,521 5,673
Bank premises and
equipment, net 3,770 3,768 2,281
Other real estate
owned, net - - 695
Deferred tax asset 4,458 3,999 4,774
Other assets 624 680 467
Total assets $ 1,062,298 $ 1,036,150 $ 914,451
Liabilities and Stockholders' Equity
Deposits $ 627,994 $ 608,621 $ 524,525
Borrowed funds 133,400 133,400 106,800
Mortgagors' escrow
accounts 4,448 3,762 4,042
Income taxes payable 2,801 169 520
Accrued expenses and
other liabilities 7,516 7,613 6,797
Total liabilities 776,159 753,565 642,684
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 140,339 140,327 140,341
Retained earnings 168,949 165,210 154,067
Accumulated other
comprehensive
income(A) 5,962 6,244 5,561
Treasury stock,
at cost -
2,190,928 shares,
2,185,928 shares
and 1,965,314 shares,
respectively (23,052) (22,987) (20,827)
Unearned compensation-
recognition and
retention plan (1,028) (1,070) (1,919)
Unallocated common
stock held by
ESOP - 446,750 shares,
455,711 shares and
482,652 shares,
respectively (5,327) (5,435) (5,752)
Total stockholders'
equity 286,139 282,585 271,767
Total liabilities
and stockholders'
equity $ 1,062,298 $ 1,036,150 $ 914,451
(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
March 31,
2001 2000
(unaudited)
Interest income:
Loans, excluding money market loan
participations $ 14,964 $ 13,189
Money market loan participations 539 250
Debt securities 2,674 2,859
Marketable equity securities 196 259
Restricted equity securities 129 110
Short-term investments 1,037 217
Total interest income 19,539 16,884
Interest expense:
Deposits 6,855 5,340
Borrowed funds 2,050 1,603
Total interest expense 8,905 6,943
Net interest income 10,634 9,941
Provision for loan losses 164 150
Net interest income after
provision for loan losses 10,470 9,791
Non-interest income:
Fees and charges 297 203
Gains on sales of securities, net 2,802 2,342
Swap agreement market valuation charge (142) -
Other real estate owned income, net - 18
Other income 131 71
Total non-interest income 3,088 2,634
Non-interest expense:
Compensation and employee benefits 2,273 1,586
Recognition and retention plan 42 397
Occupancy 312 187
Equipment and data processing 861 291
Advertising and marketing 513 180
Internet bank start-up - 567
Other 670 477
Total non-interest expense 4,671 3,685
Income before income taxes 8,887 8,740
Provision for income taxes 3,256 3,116
Net income $ 5,631 $ 5,624
Weighted average common shares
outstanding during the period 26,884,552 27,154,027
Basic and diluted earnings
per common share $ 0.21 $ 0.21
BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Selected Financial Ratios and Other Data
Three months ended
March 31,
2001 2000
Performance Ratios (annualized):
Return on average assets 2.15% 2.47%
Return on average stockholders'
equity 7.89% 8.23%
Return on average stockholders'
equity, excluding effect
of unrealized gains on
securities available for
sale, net of taxes. 8.08% 8.43%
Interest rate spread 2.68% 2.97%
Net interest margin 4.15% 4.43%
Efficiency ratio(A) 29.09% 26.59%
Dividend paid per share
during period $ 0.07 $ 0.06
(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. Lighthouse Bank's income and expenses
are excluded.
At At At
March 31, December 31, March 31,
2000 2000 2000
(dollars in thousands except per share data)
Capital Ratio:
Stockholders'
equity to
total assets 26.94% 27.27% 29.72%
Asset Quality:
Non-performing
loans $ - $ - $ -
Non-performing
assets - - 695
Allowance for loan
losses 14,483 14,315 14,027
Allowance for loan
losses as a percent
of total loans,
excluding money
market loan
participations 1.94% 2.00% 2.15%
Non-performing assets
as a percent of
total assets 0.00% 0.00% 0.08%
Per Share Data:
Book value per
share $ 10.42 $ 10.29 $ 9.82
Market value per
share 13.25 11.50 9.50
|
|
||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion