BOSTON, July 24, 2019 (GLOBE NEWSWIRE) -- Brookline Bancorp, Inc. (BRKL) (the “Company”) today announced net income of $20.5 million, or $0.26 per basic and diluted share, for the second quarter of 2019, compared to $22.5 million, or $0.28 per basic and diluted share, for the first quarter of 2019, and $20.8 million, or $0.26 per basic and diluted share, for the second quarter of 2018.
Paul Perrault, President and Chief Executive Officer of the Company commented on the second quarter earnings, "We are pleased to report another strong quarter to our stockholders. The Company continues to have broad-based loan growth, solid returns, and strong asset quality. Brookline Bancorp and its employees continue to execute on our strategy of high performance for both our customers and our stockholders."
Total assets at June 30, 2019 increased $117.9 million to $7.6 billion from $7.5 billion at March 31, 2019, and increased $351.3 million from $7.3 billion at June 30, 2018, primarily driven by growth in the loan portfolio. At June 30, 2019, total loans and leases were $6.5 billion, representing an increase of $117.1 million from March 31, 2019, and an increase of $334.1 million from June 30, 2018, primarily driven by growth in the commercial real estate portfolio.
In the second quarter the Company continued to redirect cash flows from the investment portfolio to fund loan demand. Investment securities at June 30, 2019 decreased $16.3 million to $590.8 million, comprising 7.74 percent of total assets, as compared to $607.1 million, or 8.07 percent of total assets, at March 31, 2019, and decreased approximately $84.5 million from $675.3 million, or 9.27 percent of total assets, at June 30, 2018.
Total deposits at June 30, 2019 increased $1.9 million from March 31, 2019 to $5.6 billion and increased $424.2 million from $5.2 billion at June 30, 2018 driven primarily by growth in certificates of deposit.
Total borrowed funds at June 30, 2019 increased $64.8 million to $930.8 million from $866.0 million at March 31, 2019 and decreased $180.2 million from $1.1 billion at June 30, 2018.
The ratio of stockholders’ equity to total assets was 12.03 percent at June 30, 2019, as compared to 11.98 percent at March 31, 2019, and 12.04 percent at June 30, 2018. The ratio of tangible stockholders’ equity to tangible assets was 10.08 percent at June 30, 2019, as compared to 9.99 percent at March 31, 2019, and 9.97 percent at June 30, 2018. Tangible book value per share increased $0.23 from $9.22 at March 31, 2019 to $9.45 at June 30, 2019, compared to $8.85 at June 30, 2018.
NET INTEREST INCOME
Net interest income increased $0.1 million to $63.1 million during the second quarter of 2019 from $63.0 million at the quarter ended March 31, 2019. The net interest margin decreased 9 basis points to 3.55 percent for the three months ended June 30, 2019.
Non-interest income for the quarter ended June 30, 2019 increased $0.9 million to $7.5 million from $6.6 million for the quarter ended March 31, 2019. The increase was primarily driven by increases of $0.2 million in deposit fees, $0.2 million in gain on securities, $0.3 million in gain on sales of loans and leases, and $0.2 million in other non-interest income.
PROVISION FOR CREDIT LOSSES
The Company recorded a provision for credit losses of $3.8 million for the quarter ended June 30, 2019, compared to $1.4 million for the quarter ended March 31, 2019. The higher provision for credit losses is a result of strong loan growth and net higher charge-offs during the quarter.
Total net charge-offs for the second quarter of 2019 were $3.1 million compared to $2.1 million in the first quarter of 2019. The $3.1 million in net charge-offs had previously established specific reserves of $1.0 million versus first quarter net charge-offs of $2.1 million which had previously established reserves of $1.0 million. The ratio of net loan and lease charge-offs to average loans and leases on an annualized basis increased to 19 basis points for the second quarter of 2019 from 13 basis points for the first quarter of 2019.
The allowance for loan and lease losses represented 0.90 percent of total loans and leases at June 30, 2019, compared to 0.91 percent at March 31, 2019, and 0.94 percent at June 30, 2018. The allowance for loan and lease losses related to originated loans and leases represented 0.92 percent of originated loans and leases at June 30, 2019, compared to 0.93 percent at March 31, 2019, and 0.98 percent at June 30, 2018.
Non-interest expense for the quarter ended June 30, 2019 increased $0.7 million to $39.6 million from $38.9 million for the quarter ended March 31, 2019. The increase was primarily driven by increases of $0.2 million in compensation and employee benefits expense, $0.2 million in FDIC insurance, and $0.5 million in other non-interest expense, partially offset by a decrease of $0.2 million in occupancy expense.
PROVISION FOR INCOME TAXES
The effective tax rate was 24.9 percent and 24.1 percent for the three and six months ended June 30, 2019 compared to 23.4 percent for the three months ended March 31, 2019.
RETURNS ON AVERAGE ASSETS AND AVERAGE EQUITY
The annualized return on average assets decreased to 1.08 percent during the second quarter of 2019 from 1.21 percent for the first quarter of 2019. The annualized return on average tangible assets decreased to 1.11 percent for the second quarter of 2019 from 1.24 percent for the first quarter of 2019.
The annualized return on average stockholders' equity decreased to 8.98 percent during the second quarter of 2019 from 10.14 percent for the first quarter of 2019. The annualized return on average tangible stockholders’ equity decreased to 10.98 percent for the second quarter of 2019 from 12.48 percent for the first quarter of 2019.
The ratio of nonperforming loans and leases to total loans and leases was 0.33 percent at June 30, 2019 as compared to 0.36 percent at March 31, 2019. Nonperforming loans and leases decreased $1.5 million to $21.3 million at June 30, 2019 from $22.8 million at March 31, 2019. The ratio of nonperforming assets to total assets was 0.30 percent at June 30, 2019 as compared to 0.36 percent at March 31, 2019. Nonperforming assets decreased $3.4 million to $23.3 million at June 30, 2019 from $26.7 million at March 31, 2019.
The Company’s Board of Directors approved a dividend of $0.11 per share for the quarter ended June 30, 2019. The dividend will be paid on August 23, 2019 to stockholders of record on August 9, 2019.
The Company will conduct a conference call/webcast at 1:30 PM Eastern Daylight Time on Thursday, July 25, 2019 to discuss the results for the quarter, business highlights and outlook. The call can be accessed by dialing 877-504-4120 (United States) or 412-902-6650 (internationally). A recorded playback of the call will be available for one week following the call at 877-344-7529 (United States) or 412-317-0088 (internationally). The passcode for the playback is 10132476. The call will be available live and in a recorded version on the Company’s website under “Investor Relations” at www.brooklinebancorp.com.
ABOUT BROOKLINE BANCORP, INC.
Brookline Bancorp, Inc., a bank holding company with $7.6 billion in assets and branch locations in Massachusetts and Rhode Island, is headquartered in Boston, Massachusetts and operates as the holding company for Brookline Bank, Bank Rhode Island, and First Ipswich Bank (the "banks"). The Company provides commercial and retail banking services, cash management and investment services to customers throughout Central New England. More information about Brookline Bancorp, Inc. and its banks can be found at the following websites: www.brooklinebank.com, www.bankri.com, and www.firstipswich.com.
Certain statements contained in this press release that are not historical facts may constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and are intended to be covered by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve risks and uncertainties. The Company’s actual results could differ materially from those projected in the forward-looking statements as a result of, among others, the risks outlined in the Company’s Annual Report on Form 10-K, as updated by its Quarterly Reports on Form 10-Q and other filings submitted to the Securities and Exchange Commission ("SEC"). The Company does not undertake any obligation to update any forward-looking statement to reflect circumstances or events that occur after the date the forward-looking statements are made.
BASIS OF PRESENTATION
The Company's consolidated financial statements have been prepared in conformity with generally accepted accounting principles (“GAAP”) as set forth by the Financial Accounting Standards Board in its Accounting Standards Codification and through the rules and interpretive releases of the SEC under the authority of federal securities laws. Certain amounts previously reported have been reclassified to conform to the current period's presentation.
NON-GAAP FINANCIAL MEASURES
The Company uses certain non-GAAP financial measures, such as operating earnings, operating return on average assets, operating return on average tangible assets, operating return on average stockholders' equity, operating return on average tangible stockholders' equity, the allowance for loan and lease losses related to originated loans and leases as a percentage of originated loans and leases, tangible book value per common share, tangible stockholders’ equity to tangible assets, return on average tangible assets (annualized) and return on average tangible stockholders' equity (annualized). These non-GAAP financial measures provide information for investors to effectively analyze financial trends of ongoing business activities, and to enhance comparability with peers across the financial services sector. A detailed reconciliation table of the Company's GAAP to the non-GAAP measures is attached.
Contact: Carl M. Carlson
Brookline Bancorp, Inc.
Chief Financial Officer
|BROOKLINE BANCORP, INC. AND SUBSIDIARIES|
|Selected Financial Highlights (Unaudited)|
|At and for the Three Months Ended|
|June 30, |
|March 31, |
|December 31, |
|September 30, |
|June 30, |
|(Dollars In Thousands Except per Share Data)|
|Net interest income||$||63,134||$||62,999||$||63,159||$||62,332||$||62,717|
|Provision for credit losses||3,757||1,353||123||2,717||1,470|
|Income before provision for income taxes||27,251||29,405||29,215||29,374||29,071|
|Net income attributable to Brookline Bancorp, Inc.||20,471||22,467||21,138||22,460||20,831|
|Net interest margin (1)||3.55||%||3.64||%||3.58||%||3.57||%||3.64||%|
|Interest-rate spread (1)||3.13||%||3.18||%||3.25||%||3.27||%||3.36||%|
|Return on average assets (annualized)||1.08||%||1.21||%||1.15||%||1.23||%||1.15||%|
|Return on average tangible assets (annualized) (non-GAAP)||1.11||%||1.24||%||1.17||%||1.26||%||1.17||%|
|Return on average stockholders' equity (annualized)||8.98||%||10.14||%||9.40||%||10.10||%||9.53||%|
|Return on average tangible stockholders' equity (annualized) (non-GAAP)||10.98||%||12.48||%||11.54||%||12.44||%||11.80||%|
|Efficiency ratio (2)||56.09||%||55.83||%||57.86||%||53.76||%||55.25||%|
|Per Common Share Data:|
|Net income — Basic||$||0.26||$||0.28||$||0.26||$||0.28||$||0.26|
|Net income — Diluted||0.26||0.28||0.26||0.28||0.26|
|Cash dividends declared||0.110||0.110||0.105||0.105||0.100|
|Book value per share (end of period)||11.53||11.30||11.30||11.08||10.94|
|Tangible book value per share (end of period) (non-GAAP)||9.45||9.22||9.21||9.00||8.85|
|Stock price (end of period)||15.38||14.40||13.82||16.70||18.60|
|Total loans and leases||6,505,329||6,388,197||6,303,516||6,227,707||6,171,274|
|Brookline Bancorp, Inc. stockholders’ equity||918,468||900,572||900,140||890,368||877,283|
|Nonperforming assets as a percentage of total assets||0.30||%||0.36||%||0.38||%||0.41||%||0.41||%|
|Allowance for loan and lease losses||$||58,635||$||58,041||$||58,692||$||59,997||$||57,981|
|Allowance for loan and lease losses as a percentage of total loans and leases||0.90||%||0.91||%||0.93||%||0.96||%||0.94||%|
|Net loan and lease charge-offs||$||3,082||$||2,101||$||1,252||$||564||$||2,330|
|Net loan and lease charge-offs as a percentage of average loans and leases (annualized)||0.19||%||0.13||%||0.08||%||0.04||%||0.15||%|
|Stockholders’ equity to total assets||12.03||%||11.98||%||12.18||%||12.16||%||12.04||%|
|Tangible stockholders’ equity to tangible assets (non-GAAP)||10.08||%||9.99||%||10.15||%||10.11||%||9.97||%|
|(1) Calculated on a fully tax-equivalent basis.|
|(2) Calculated as non-interest expense as a percentage of net interest income plus non-interest income.|
|BROOKLINE BANCORP, INC. AND SUBSIDIARIES|
|Consolidated Balance Sheets (Unaudited)|
|June 30, 2019||March 31, 2019||December 31, 2018||September 30, 2018||June 30, 2018|
|ASSETS||(In Thousands Except Share Data)|
|Cash and due from banks||$||46,532||$||51,276||$||47,542||$||30,762||$||32,724|
|Total cash and cash equivalents||92,796||112,339||89,584||53,876||55,478|
|Investment securities available-for-sale||482,497||489,020||502,793||534,788||558,602|
|Investment securities held-to-maturity||103,572||113,694||114,776||115,684||116,670|
|Equity securities held-for-trading||4,698||4,341||4,207||4,169||—|
|Total investment securities||590,767||607,055||621,776||654,641||675,272|
|Loans and leases held-for-sale||1,575||869||3,247||937||1,034|
|Loans and leases:|
|Commercial real estate loans:|
|Commercial real estate mortgage||2,421,104||2,355,507||2,330,725||2,287,979||2,269,520|
|Total commercial real estate loans||3,493,554||3,410,468||3,351,736||3,281,045||3,264,166|
|Commercial loans and leases:|
|Total commercial loans and leases||1,826,336||1,786,582||1,768,958||1,777,984||1,736,144|
|Total consumer loans||1,185,439||1,191,147||1,182,822||1,168,678||1,170,964|
|Total loans and leases||6,505,329||6,388,197||6,303,516||6,227,707||6,171,274|
|Allowance for loan and lease losses||(58,635||)||(58,041||)||(58,692||)||(59,997||)||(57,981||)|
|Net loans and leases||6,446,694||6,330,156||6,244,824||6,167,710||6,113,293|
|Restricted equity securities||55,270||54,192||61,751||63,963||68,343|
|Premises and equipment, net of accumulated depreciation||75,373||75,520||76,382||77,886||79,194|
|Right-of-use asset operating leases||25,928||26,205||—||—||—|
|Deferred tax asset||25,629||27,084||21,495||22,249||20,826|
|Identified intangible assets, net of accumulated amortization||5,264||5,684||6,086||6,623||7,160|
|Other real estate owned and repossessed assets||1,966||3,912||4,019||3,934||4,352|
|LIABILITIES AND STOCKHOLDERS' EQUITY|
|Demand checking accounts||$||1,042,854||$||1,011,031||$||1,033,551||$||1,017,234||$||1,002,954|
|Money market accounts||1,669,782||1,706,708||1,675,050||1,623,220||1,704,652|
|Certificate of deposit accounts||1,984,453||1,907,228||1,789,165||1,658,360||1,540,659|
|Total interest-bearing deposits||4,579,639||4,609,602||4,420,493||4,216,377||4,195,326|
|Advances from the FHLBB||791,559||730,018||784,375||959,446||991,091|
|Subordinated debentures and notes||83,512||83,472||83,433||83,392||83,352|
|Other borrowed funds||55,693||52,515||52,734||40,048||36,480|
|Total borrowed funds||930,764||866,005||920,542||1,082,886||1,110,923|
|Operating lease liabilities||25,928||26,205||—||—||—|
|Mortgagors’ escrow accounts||6,823||7,517||7,426||8,227||8,122|
|Accrued expenses and other liabilities||132,504||98,198||100,174||null|