Brookline Bancorp’s transition to a commercial bank was marked by uneven results in the fourth quarter, as net income declined, while its commercial portfolio grew.
During the fourth quarter last year, the company recorded net income of $7.7 million, down about 35 percent from $11.9 million in the comparable period last year. Net income for the full year totaled $35.4 million, compared with $37.1 million in 2012.
Total assets increased $88.9 million to $5.3 billion at year’s end from $5.1 billion the previous year. Loans and leases primarily drove that growth, increasing $63 million, or 5.9 percent annualized, to $4.4 billion at Dec. 31. The bank’s commercial real estate and commercial loan and lease portfolios totaled $3.2 billion, or 72.7 percent of all loans and leases, compared with $2.9 billion and 68.3 percent the previous year. Deposits increased $218.7 million year-over-year to $3.8 billion at Dec. 31.
Fourth quarter growth of $84.8 million, or 11 percent annualized, in the commercial loan and lease portfolio offset a $40 million decline in the bank’s indirect auto loan portfolio during the same period.
Non-interest income at year’s end declined $4.8 million to $13.8 million from $18.6 million for the year-ago date. The bank cited several contributing factors, including a $1.2 million decrease in loan-related gains on sale and other fee income, a $1.1 million increase in losses from investments in affordable housing projects, a $500,000 decrease in gains related to the sale of securities and the inclusion in 2012 of a $1.9 million net gain on the sale of loans and leases.
Nonperforming loans and leases increased $1.1 million to $16.5 million, or 0.31 percent of total assets, at December 31, 2013 from $15.4 million, or 0.29 percent of total assets, at September 30, 2013. The ratio of nonperforming loans and leases to total loans and leases increased to 0.38 percent at December 31, 2013 from 0.36 percent at September 30, 2013. Nonperforming assets also increased $1.4 million to $18.1 million or 0.34 percent of total assets at December 31, 2013, from $16.7 million, or 0.32 percent of total assets, at September 30, 2013.
The provision for loan and lease losses increased to $3.8 million for the fourth quarter of 2013, from $2.7 million for the third quarter of 2013. The fourth quarter provision consisted mainly of a $1.7 million provision due to overall portfolio growth, a $0.9 million provision for charged off loans, and $1.1 million for deterioration and charge offs in the acquired loan portfolios. The provision for loan and lease losses decreased to $10.9 million for the year ended December 31, 2013 from $15.9 million for the year ended December 31, 2012, primarily due to lower charge offs.
The allowance for loan and lease losses was $48.5 million at Dec. 31, 2013, compared with $41.2 million in 2012. The allowance for loan and lease losses as a percent of total loans and leases was 1.11 percent, compared with 0.99 percent the previous year. The allowance for loan and lease losses related to originated loans and leases as a percent of originated loans and leases increased slightly to 1.32 percent the end of the fourth quarter, from 1.31 percent the previous quarter.
The board of directors approved a dividend of 8.5 cents per share to be paid Feb. 28 to shareholders of record on Feb. 14.
Responding to a question about the company’s ongoing search for a new chief financial officer during the fourth quarter conference call, President and CEO Paul Perrault replied, "It’s going well." Asked for an approximate timeline, he said, "I don’t want to jinx myself and speculate on that."
