Brookline Bancorp Announces Third Quarter Earnings.Business Editors and Banking & 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)--Oct. 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. ("Brookline"), announced today that it earned $4,929,000, or $.18 per share (on a basic and diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. basis), for the three months ended September September: see month. 30, 2001 compared to $5,366,000, or $.20 per share (on a basic and diluted basis), for the three months ended September 30, 2000. The 2001and 2000 quarters 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. , securities gains of $557,000 ($.02 per share) and $1,471,000 ($.05 per share), respectively, and net operating losses Net operating losses Losses that a firm can take advantage of to reduce taxes. of approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $320,000 ($.01 per share) and $889,000 ($.03 per share), respectively, related to 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"), the Company's internet-only bank subsidiary that was merged into Brookline on July July: see month. 17, 2001. Certain operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. associated with servicing former Lighthouse customers A lighthouse customer is an early customer of a given company, product, or technology. Typically this will be a large, sophisticated customer that, in addition to using the vendor's product or technology, will also provide considerable and candid feedback to help the vendor continued throughout the third quarter of 2001. The transfer of Lighthouse accounts to Brookline's systems and records was completed by the end of September 2001. Net income for the nine months ended September 30, 2001 was $13,993,000, or $.52 per share (on a basic and diluted basis), compared to $16,452,000, or $.61 per share (on a basic and diluted basis), for the nine months ended September 30, 2000. The 2001 and 2000 periods included, on an after-tax basis, securities gains of $1,964,000 ($.07 per share) and $4,115,000 ($.15 per share), respectively, and net operating losses related to Lighthouse of approximately $1,559,000 ($.06 per share) and $1,623,000 ($.06 per share), respectively. The 2001 period also included an 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. gain of $1,890,000 ($.07 per share) from termination The point where a line, channel or circuit ends. See SCSI termination and hybrid. of Brookline's defined benefit pension plan and 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. of $2,276,000 ($.08 per share) related to the merger of Lighthouse into Brookline. Total assets were $1.097 billion at September 30, 2001, $18 million (2%) higher than at June June: see month. 30, 2001 and $127 million (13%) higher than a year ago. Total loans, which amounted to $843 million at September 30, 2001, increased $26 million (3%) since June 30, 2001 and $155 million (23%) since a year ago. Of the annual increase, over $80 million related to residential mortgage loans emanating from the activities of Lighthouse. The level of loan growth, especially in the residential mortgage sector, is expected to be lower in the next several quarters than that experienced over the past year. Loan growth was funded primarily through deposit growth and increased borrowings from the Federal Home Loan Bank. Deposits increased $68 million (13%) since a year ago, $63 million of which was in core transaction accounts and $5 million in certificates of deposit. While total deposits declined $4 million (1%) since June 30, 2001, core transaction accounts increased $5 million. The decline in certificates of deposit was partly attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to the non-renewal of maturing high cost certificates obtained through promotions in the fourth quarter of 2000. While net interest spread declined from 3.05% in the third quarter of 2000 to 2.87% in the third quarter of 2001, it increased from the spreads realized in the current year first and second quarters of 2.68% and 2.79%, respectively. The improved spreads resulted primarily from loan growth as the percent of average loans outstanding to the total of all 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 outstanding grew from 70% in the first quarter of 2001 to 78% in the third quarter of 2001. Generally, yields on loans exceed yields on the Company's short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. investments and investment securities. The provision for loan losses for the third quarter was $275,000 in 2001 and $69,000 in 2000; the amounts provided in the nine month periods were $934,000 in 2001 and $369,000 in 2000. The increases were attributable to loan growth as non-performing assets remained minimal ($146,000 at September 30, 2001). Expense related to shares awarded in connection with the Company's recognition and retention plan, which is determined on the basis of when the shares vest, amounted to $42,000 and $365,000 in the respective third quarters of 2001 and 2000 and $125,000 and $1,132,000 in the respective nine month periods of 2001 and 2000. The Company purchased 122,250 shares of its common stock during the third quarter of 2001 at a total cost of $1,783,000, or $14.59 per share. Under a new repurchase re·pur·chase tr.v. re·pur·chased, re·pur·chas·ing, re·pur·chas·es To buy (something) again. n. The act of buying something that one previously sold or owned. Noun 1. program approved by the Board of Directors on September 19, 2001, the Company can purchase an additional 1,322,525 shares as of September 30, 2001. The Company also announced that the Board of Directors approved a regular quarterly dividend of $.16 per share of common stock to stockholders of record as of October October: see month. 31, 2001 and payable November November: see month. 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. Projections about future events are subject to risks and uncertainties that could cause actual results to differ materially. Factors than might cause such differences include, but are not limited to, changes in general economic conditions, interest rates and assumptions used in projections, 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 and competition.
BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(In thousands expect share data)
Sept. 30, Dec. 31, Sept. 30,
2001 2000 2000
Assets
Cash and due from banks $12,919 $13,505 $11,731
Short-term investments 26,963 66,870 11,680
Securities available for sale 159,623 149,361 139,606
Securities held to maturity
(market value of $17,253,
$50,337 and $60,913,
respectively) 16,981 50,447 61,118
Restricted equity securities 9,187 7,145 6,895
Loans, excluding money market
loan participations 843,294 716,559 688,181
Money market loan
participations 26,000 28,250 46,000
Allowance for loan losses (15,261) (14,315) (14,261)
Net loans 854,033 730,494 719,920
Other investment 3,622 3,360 3,263
Accrued interest receivable 5,664 6,521 5,943
Bank premises and equipment, net 2,006 3,768 3,435
Other real estate owned, net 143 -- 530
Deferred tax asset 4,984 3,999 4,712
Other assets 566 680 939
Total assets $1,096,691 $1,036,150 $969,772
Liabilities and Stockholders' Equity
Deposits $614,739 $608,621 $546,670
Borrowed funds 176,241 133,400 130,400
Mortgagors' escrow accounts 4,617 3,762 4,187
Income taxes payable 4,086 169 1,236
Accrued expenses and other
liabilities 8,992 7,613 7,872
Total liabilities 808,675 753,565 690,365
Stockholders' equity:
Preferred stock, $.01 par
value; 5,000,000 shares
authorized, none issued -- -- --
Common stock, $.01 par
value; 45,000,000 shares
authorized, 29,692,995,
29,641,500 and 29,641,500
shares issued respectively 297 296 296
Additional paid-in capital 140,944 140,327 140,329
Retained earnings 173,549 165,210 161,647
Accumulated other
comprehensive income (A) 6,314 6,244 6,354
Treasury stock, at cost -
2,473,678 shares, 2,185,928
shares and 2,140,428 shares,
respectively (27,031) (22,987) (22,498)
Unearned compensation -
recognition and retention
plan (945) (1,070) (1,184)
Unallocated common stock held
by ESOP - 428,708 shares,
455,771 shares and 464,748
shares, respectively (5,112) (5,435) (5,537)
Total stockholders' equity 288,016 282,585 279,407
Total liabilities and
stockholders' equity $ 1,096,691 $1,036,150 $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 Nine months ended
September 30, September 30,
2001 2000 2001 2000
(unaudited)
Interest income:
Loans, excluding money
market loan participations $15,901 $14,231 $46,374 $41,114
Money market loan
participations 111 694 919 1,322
Debt securities 2,511 2,692 7,932 8,279
Marketable equity securities 153 210 530 694
Restricted equity securities 126 126 373 348
Short-term investments 257 198 1,678 657
Total interest income 19,059 18,151 57,806 52,414
Interest expense:
Deposits 5,694 5,825 18,843 16,695
Borrowed funds 2,503 1,908 6,707 5,241
Total interest expense 8,197 7,733 25,550 21,936
Net interest income 10,862 10,418 32,256 30,478
Provision for loan losses 275 69 934 369
Net interest income after
provision for loan losses 10,587 10,349 31,322 30,109
Non-interest income:
Fees and charges 508 248 1,149 671
Gains on securities, net 871 2,316 3,178 6,459
Other real estate owned
income, net -- 18 -- 83
Gain from termination of
pension plan -- -- 3,667 --
Swap contract market
valuation adjustment (230) -- (319) --
Other income 123 100 314 331
Total non-interest income 1,272 2,682 7,989 7,544
Non-interest expense:
Compensation and employee
benefits 2,200 2,056 6,802 5,507
Recognition and retention
plan 42 365 125 1,132
Occupancy 295 280 872 687
Equipment and data processing 898 568 2,645 1,224
Advertising and marketing 238 948 1,008 1,584
Internet bank start-up -- -- -- 746
Restructuring charge -- -- 3,912 --
Other 456 493 1,607 1,347
Total non-interest expense 4,129 4,710 16,971 12,227
Income before income taxes 7,730 8,321 22,340 25,426
Provision for income taxes 2,801 2,955 8,347 8,974
Net income $4,929 $5,366 $13,993 $16,452
Weighted average common shares
outstanding during the period:
Basic 26,778,953 26,733,313 26,837,300 26,888,976
Diluted 26,161,553 26,766,165 27,139,594 26,888,976
Earnings per common share:
Basic $0.18 $0.20 $0.52 $0.61
Diluted 0.18 0.20 0.52 0.61
BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Selected Financial Ratios and Other Data
Three months ended Nine months ended
September 30, September 30,
2001 2000 2001 2000
Performance Ratios (annualized):
Return on average assets 1.82% 2.27% 1.75% 2.37%
Return on average stockholders'
equity 6.82% 7.73% 6.50% 7.88%
Return on average stockholders'
equity, excluding effect of
unrealized gains on securities
available for sale, net of
taxes 6.99% 7.88% 6.65% 8.16%
Interest rate spread 2.87% 3.05% 2.79% 3.02%
Net interest margin 4.08% 4.51% 4.12% 4.44%
Efficiency ratio (A) 28.14% 25.38% 27.60% 25.73%
Dividend paid per share during
period $0.16 $0.06 $0.30 $0.18
(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
Sept. 30, Dec. 31, Sept. 30,
2001 2000 2000
(dollars in thousands
except per share data)
Capital Ratio:
Stockholders' equity to total assets 26.26% 27.27% 28.81%
Asset Quality:
Non-performing loans $ 3 -- $ 142
Non-performing assets 146 -- 672
Allowance for loan losses 15,261 14,315 14,261
Allowance for loan losses as a percent
of total loans, excluding money market
loan participations 1.81% 2.00% 2.07%
Non-performing assets as a percent
of total assets 0.01% 0.00% 0.07%
Per Share Data:
Book value per share at end of period $ 10.58 $ 10.29 $ 10.33
Market value per share at end of period 15.00 11.50 11.44
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