Brookline Bancorp Announces Third Quarter Operating Results and Dividend Declaration.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. -- Please replace the release dated October October: see month. 20,
2005 with the following corrected version due to multiple revisions ReVisions is a 2004 anthology of alternate history short-stories. It is edited by Julie E. Czerneda and Isaac Szpindel. ContentsTitle Author The Resonance of Light James Alan Gardner Out of China Julie E. . The corrected release reads: BROOKLINE BANCORP ANNOUNCES THIRD QUARTER OPERATING RESULTS AND DIVIDEND DECLARATION Brookline 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) announced today its earnings for the 2005 third quarter and approval by its Board of Directors of a regular quarterly dividend of $0.085 per share payable November November: see month. 15, 2005 to stockholders of record on October 31, 2005. The Company earned $5,521,000, or $0.09 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 quarter ended September September: see month. 30, 2005 compared to $4,497,000, or $0.08 per share on a basic and diluted basis, for the quarter ended September 30, 2004. The 23% increase in quarterly earnings was attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk primarily to inclusion of the operating results of Mystic Mystic, rivers, United States Mystic. 1 River, c.10 mi (16 km) long, rising in SE Conn. and flowing S past Old Mystic and Mystic villages to the Long Island Sound. Mystic Seaport, a maritime museum, is at its mouth. 2 River, c. Financial, Inc. and its subsidiaries ("Mystic") and improvement in the Company's interest rate spread and net interest margin. There were no securities gains in the 2005 quarter compared to 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. securities gains of $806,000 in the 2004 quarter. Net income for the nine months ended September 30, 2005 was $16,494,000, or $0.27 per share on a basic and diluted basis, compared to $13,771,000, or $0.24 per share on a basic and diluted basis, for the nine months ended September 30, 2004. The 20% increase in earnings was attributable primarily to the same reasons mentioned in the preceding paragraph. After-tax securities gains were $547,000 in the 2005 period compared to $1,134,000 in the 2004 period. As previously reported, the Company acquired Mystic on January January: see month. 7, 2005. Total assets acquired were $440 million, including loans of $343 million, and deposits assumed were $331 million. The balance of Mystic loans acquired declined to $255 million at September 30, 2005 as a result of loan payoffs and the sale of $30 million of long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. fixed rate residential mortgage loans done to reduce interest rate risk. In view of rising interest rates and signs of a weakening weak·en tr. & intr.v. weak·ened, weak·en·ing, weak·ens To make or become weak or weaker. weak  en·er n. real estate
market, the Company has chosen to be cautious in originating new
construction and real estate loans and in renewing re·new v. re·newed, re·new·ing, re·news v.tr. 1. To make new or as if new again; restore: renewed the antique chair. 2. lines of credit to small business commercial borrowers. The balance of Mystic related deposits increased to $349 million at September 30, 2005. The attractive deposit base of Mystic was one of the important reasons for making the acquisition. As part of the acquisition, Mystic was merged into the Company and in April 2005 its operating systems Operating systems can be categorized by technology, ownership, licensing, working state, usage, and by many other characteristics. In practice, many of these groupings may overlap. were merged into the Company's operating systems. Merger/conversion related expenses amounted to $894,000, substantially all of which were incurred in the first half of 2005. Of the total amount paid for the acquisition, $11.8 million was classified as a core deposit intangible that is being amortized on an accelerated basis over nine years. Amortization expense amounted to $593,000 in the 2005 third quarter and $1,778,000 in the nine month period ended September 30, 2005. Net interest income was $4,288,000, or 34% higher, in the 2005 quarter than in the 2004 quarter and $13,410,000, or 36% higher, in the 2005 nine month period than in the 2004 nine month period. The increases were due to growth in assets, notably from the Mystic acquisition and the indirect automobile automobile, self-propelled vehicle used for travel on land. The term is commonly applied to a four-wheeled vehicle designed to carry two to six passengers and a limited amount of cargo, as contrasted with a truck, which is designed primarily for the transportation of loan portfolio, and a higher interest rate environment. Interest rate spread improved from 2.28% in the 2004 quarter to 2.42% in the 2005 quarter and from 2.33% in the 2004 nine month period to 2.51% in the 2005 nine month period, but declined from 2.59% in the 2005 first quarter and 2.52% in the 2005 second quarter. The 2005 quarterly declines resulted from a more rapid increase in the average rates paid on deposits and borrowed funds (23 basis points in the 2005 third quarter and 19 basis points in the 2005 second quarter) than the increase in the average rates earned on assets (13 basis points in the 2005 third quarter and 12 basis points in the 2005 second quarter). The rise in the average rates paid for funds resulted from the rate setting actions of the Federal Reserve, increased competition for deposits and a shift in the mix of deposits. Customarily cus·tom·ar·y adj. 1. Commonly practiced, used, or encountered; usual. See Synonyms at usual. 2. Based on custom or tradition rather than written law or contract. , higher rates are paid on certificates of deposit than on transaction deposit accounts. Certificates of deposit comprised 52% of total deposits at September 30, 2005 compared to 48% at June June: see month. 30, 2005 and 41% at December December: see month. 31, 2004. Net interest margin improved from 3.14% in the 2004 quarter to 3.20% in the 2005 quarter and from 3.20% in the 2004 nine month period to 3.25% in the 2005 nine month period, but declined from 3.26% in the 2005 second quarter and 3.31% in the 2005 first quarter. The 2005 quarterly declines resulted primarily from the developments mentioned in the preceding paragraph and a reduction in the percent of total assets comprised of mortgage loans from 54% in the first quarter of 2005 to 52% in the second quarter of 2005 and 51% in the third quarter of 2005. Typically, the yield on mortgage loans is higher than the yields earned on the Company's other interest 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 . Because of the current rising interest rate environment and the high percent of the Company's assets funded by stockholders' equity Stockholders' Equity The portion of the balance sheet that includes capital received from investors in exchange for stock (paid-in capital), donated capital, and retained earnings. This is equal to total assets minus liabilities, preferred stock and intangible assets. , net interest income is expected to continue to improve in the next several months. Interest rate spread and net interest margin, however, could experience further declines if the upward repricing Repricing To change the price of an asset. In derivatives, it sometimes refers to the exchange of options of with different strike prices. repricing of deposits and borrowed funds occurs faster than increases in asset yields. Trends in interest rates depend on many factors and, accordingly, actual rates in the future could vary significantly with the Company's predictions. The provision for loan losses decreased from $635,000 in the 2004 third quarter to $32,000 in the 2005 third quarter and from $1,676,000 in the 2004 nine month period to $1,643,000 in the 2005 nine month period. The considerably lower provision in the 2005 third quarter was due to a $650,000 credit resulting from payoffs of loans acquired in the Mystic transaction, including certain higher risk loans. Of the totals provided for loan losses, the following amounts were attributable to the indirect automobile loan portfolio: $692,000 and $575,000 in the respective 2005 and 2004 quarters and $2,019,000 and $1,457,000 in the respective 2005 and 2004 nine month periods. The indirect automobile loan portfolio has grown from $211 million at December 31, 2003 to $369 million at December 31, 2004 and $447 million at September 30, 2005. Net charge-offs in the 2005 nine month period were $863,000, or 0.28% of the average balance of indirect automobile loans outstanding during that period. The substantial excess of provisions over net charge-offs is in light of the rapid growth of the portfolio and the short amount of time that has elapsed e·lapse intr.v. e·lapsed, e·laps·ing, e·laps·es To slip by; pass: Weeks elapsed before we could start renovating. n. since February February: see month. 2003 when the Company started originating such loans. Excluding merger/conversion expenses and amortization of the core deposit intangible, higher non-interest expenses in the 2005 quarterly and nine month periods in comparison to the 2004 quarterly and nine month periods were attributable primarily to the Mystic acquisition, the opening of a new branch in the fall of 2004, higher premiums for employee medical benefits and higher professional fees due mostly to meeting the added compliance requirements Compliance requirements are a series of directives established by United States Federal government agencies that summarize hundreds of Federal laws and regulations applicable to Federal assistance (also known as Federal aid or Federal funds). of the Sarbanes-Oxley Act See SOX. relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc internal control over financial reporting. The above text 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 that could cause such differences 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 and competition
BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(In thousands except share data)
September 30, December 31, September 30,
2005 2004 2004
------------- ------------ -------------
ASSETS
---------------------------
Cash and due from banks $ 16,004 $ 8,937 $ 8,262
Short-term investments 133,707 127,928 99,556
Securities available for sale 349,813 260,852 270,432
Securities held to maturity
(market value of $857, $914
and $1,228, respectively) 841 889 1,198
Restricted equity securities 23,081 17,444 16,554
Loans 1,620,090 1,269,637 1,239,926
Allowance for loan losses (21,900) (17,540) (17,161)
------------ ----------- ------------
Net loans 1,598,190 1,252,097 1,222,765
------------ ----------- ------------
Other investment 4,545 4,456 4,453
Accrued interest receivable 8,609 5,801 5,588
Bank premises and
equipment, net 11,198 3,900 3,110
Other real estate owned 1,150 - -
Deferred tax asset 9,486 9,980 9,725
Prepaid income taxes 1,813 270 59
Core deposit intangible 10,064 - -
Goodwill 35,615 - -
Other assets 2,972 1,945 1,572
------------ ----------- ------------
Total assets $ 2,207,088 $1,694,499 $ 1,643,274
============ =========== ============
LIABILITIES AND
STOCKHOLDERS' EQUITY
---------------------------
Deposits $ 1,153,854 $ 773,958 $ 735,306
Borrowed funds 421,896 320,171 305,490
Subordinated debt 12,249 - -
Mortgagors' escrow accounts 5,465 4,464 4,978
Accrued expenses and other
liabilities 12,118 10,893 12,457
------------ ----------- ------------
Total liabilities 1,605,582 1,109,486 1,058,231
------------ ----------- ------------
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; 62,989,384
shares, 60,477,939 shares
and 60,477,939 shares
issued, respectively 630 605 605
Additional paid-in capital 512,163 471,799 471,580
Retained earnings,
partially restricted 120,620 144,081 144,977
Accumulated other
comprehensive income
(loss) (A) (1,158) 560 717
Treasury stock, at cost -
1,404,693 shares, 1,335,299
shares and 1,335,299 shares
issued, respectively (18,144) (17,017) (17,017)
Unearned compensation -
recognition and
retention plans (8,779) (10,963) (11,685)
Unallocated common stock held
by ESOP - 701,623 shares,
743,221 shares and 758,257
shares, respectively (3,826) (4,052) (4,134)
------------ ----------- ------------
Total stockholders'
equity 601,506 585,013 585,043
------------ ----------- ------------
------------ ----------- ------------
Total liabilities and
stockholders' equity $ 2,207,088 $1,694,499 $ 1,643,274
============ =========== ============
(A) Represents net unrealized gains (losses) 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,
----------------------- -----------------------
2005 2004 2005 2004
----------- ----------- ----------- -----------
Interest income:
Loans $22,830 $16,081 $66,908 $46,646
Debt securities 2,876 1,427 7,787 4,874
Marketable equity
securities 78 65 228 213
Restricted equity
securities 241 139 699 280
Short-term
investments 1,259 401 3,115 1,004
----------- ----------- ----------- -----------
Total interest
income 27,284 18,113 78,737 53,017
----------- ----------- ----------- -----------
Interest expense:
Deposits 6,159 2,975 16,071 8,504
Borrowed funds 3,994 2,477 11,048 6,790
Subordinated debt 182 - 485 -
----------- ------- ----------- -----------
Total interest
expense 10,335 5,452 27,604 15,294
----------- ------- ----------- -----------
Net interest income 16,949 12,661 51,133 37,723
Provision for loan
losses 32 635 1,643 1,676
----------- ------- ----------- -----------
Net interest
income after
provision for
loan losses 16,917 12,026 49,490 36,047
----------- ------- ----------- -----------
Non-interest income:
Fees and charges 798 496 2,851 2,166
Gains on
securities, net - 806 853 1,767
Swap agreement
market valuation
credit - 50 49 178
Other income 130 142 371 493
----------- ----------- ----------- -----------
Total non-interest
income 928 1,494 4,124 4,604
----------- ----------- ----------- -----------
Non-interest expense:
Compensation and
employee benefits 3,332 2,477 9,889 7,549
Recognition and
retention plans 668 722 2,040 2,168
Occupancy 721 399 2,111 1,189
Equipment and data
processing 1,361 1,164 4,547 3,249
Advertising and
marketing 352 113 807 490
Dividend equivalent
rights 339 359 702 734
Merger/conversion 1 - 894 -
Amortization of
core deposit
intangible 593 - 1,778 -
Other 1,263 625 3,156 1,866
----------- ----------- ----------- -----------
Total non-interest
expense 8,630 5,859 25,924 17,245
----------- ----------- ----------- -----------
Income before income
taxes 9,215 7,661 27,690 23,406
Provision for income
taxes 3,694 3,164 11,196 9,635
----------- ----------- ----------- -----------
Net income $ 5,521 $ 4,497 $16,494 $13,771
=========== =========== =========== ===========
Earnings per common
share:
Basic $ 0.09 $ 0.08 $ 0.27 $ 0.24
Diluted 0.09 0.08 0.27 0.24
Weighted average common
shares outstanding
during the period:
Basic 60,108,273 57,373,970 60,026,293 57,229,259
Diluted 60,949,028 58,144,811 60,831,011 58,082,856
BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Average Yields / Costs
Three months ended September 30,
-------------------------------------------------------
2005 2004
---------------------------- --------------------------
Average Average
Average Interest yield/ Average Interest yield/
balance (1) cost balance (1) cost
----------- -------- ------- ------- ------- ---------
(Dollars in thousands)
Assets
--------------
Interest-earning
assets:
Short-term
investments $ 148,957 $ 1,259 3.35 % $ 114,288 $ 401 1.39 %
Debt
securities(2) 341,734 2,943 3.45 262,097 1,435 2.19
Equity
securities(2) 31,572 348 4.38 26,188 228 3.46
Mortgage
loans(3) 1,089,451 16,762 6.15 819,984 12,066 5.89
Money market
loan part-
icipations - - - 3,768 14 1.47
Commercial
loans(3) 73,321 1,120 6.11 49,358 563 4.56
Indirect
automobile
loans(3) 444,258 4,892 4.37 338,820 3,394 3.97
Other consumer
loans(3) 3,117 56 7.19 2,471 44 7.12
------- ----- ------- -----
Total interest-
earning
assets 2,132,410 27,380 5.12 % 1,616,974 18,145 4.47 %
------ ---- ------ ----
Allowance for
loan losses (22,253) (17,042)
Non-interest
earning
assets 99,631 30,503
------ ------
Total
assets $2,209,788 $1,630,435
========== ==========
Liabilities
and Stockholders'
Equity
--------------
Interest-bearing
liabilities:
Deposits:
NOW
accounts $ 96,616 45 0.18 % $ 62,775 21 0.13 %
Savings
accounts 143,306 507 1.40 81,173 374 1.83
Money market
savings
accounts 260,271 1,161 1.77 276,164 767 1.10
Certificate
of deposit
accounts 583,760 4,446 3.02 274,607 1,813 2.62
------- ----- ------- -----
Total
deposits 1,083,953 6,159 2.25 694,719 2,975 1.70
Borrowed
funds 424,401 3,994 3.68 294,749 2,477 3.29
Subordinated
debt 12,269 181 5.77 - - -
------ --- ------- -----
Total
interest
bearing
liabilities 1,520,623 10,334 2.70 % 989,468 5,452 2.19 %
------ ---- ----- ----
Non-interest-
bearing demand
checking
accounts 67,711 36,563
Other
liabilities 14,694 13,925
------ ------
Total
liabilities 1,603,028 1,039,956
Stockholders'
equity 606,760 590,479
------- -------
Total
liabilities
and
stockholders'
equity $2,209,788 $1,630,435
========== ==========
Net interest
income (tax
equivalent
basis)/
interest rate
spread(4) 17,046 2.42 % 12,693 2.28 %
==== ====
Less
adjustment
of tax exempt
income 96 32
-- --
Net interest
income $16,950 $12,661
======= =======
Net interest
margin(5) 3.20 % 3.14 %
==== ====
(1) Tax exempt income on debt and equity securities 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,
------------------ ------------------
2005 2004 2005 2004
--------- -------- --------- --------
Performance Ratios (annualized):
Return on average assets 1.00 % 1.10 % 1.01 % 1.16 %
Return on average stockholders=
equity 3.64 % 3.05 % 3.59 % 3.08 %
Interest rate spread 2.42 % 2.28 % 2.51 % 2.33 %
Net interest margin 3.20 % 3.14 % 3.25 % 3.20 %
Dividends paid per share during
period $ 0.285 $0.285 $ 0.655 $0.655
At At At
Sept. 30, Dec. 31, Sept. 30,
2005 2004 2004
---------- -------- -----------
(Dollars in thousands except
per share data)
Capital Ratio:
Stockholders' equity to total assets 27.25 % 34.52 % 35.60 %
Asset Quality:
Non-performing loans $ 300 $ 111 $ 91
Non-performing assets 1,869 439 336
Allowance for loan losses 21,900 17,540 17,161
Allowance for loan losses as a percent
of total loans 1.35 % 1.38 % 1.38 %
Non-performing assets as a percent of
total assets 0.08 % 0.03 % 0.02 %
Per Share Data:
Book value per share $ 9.77 $ 9.89 $ 9.89
Tangible book value per share $ 9.03 $ 9.89 $ 9.89
Market value per share $ 15.82 $ 16.32 $ 15.67
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