Brookline Bancorp posted a 9.7 percent increase in its bottom line, boosted by growth in its commercial loan portfolio.
Net income for the quarter ended Sept. 30 totaled $12.9 million, compared with $11.7 million in the same period last year.
Higher loan balances and increases in dividend income pushed up net interest income to $48.6 million, compared with $47.3 million in the year-ago period. Total loans and leases stood at $4.8 billion on Sept. 30, compared with $4.7 billion a year ago. Commercial real estate loans increased 6.7 percent year-over-year to $2.6 billion, and total commercial loans and leases increased 17.9 percent to $1.3 billion.
Like many of its peers, Brookline Bancorp has sought to distinguish itself as a serious commercial lender in the Greater Boston area. The pace of commercial lending, more broadly, and murmurs about town of loosening covenants were probably on an investor’s mind when he asked Paul Perrault, the company’s president and CEO, to comment during the company’s earnings call on the present commercial lending landscape in Boston.
“It’s a little bit irrational, but not rampant. From time to time we do see some deals that make us scratch our heads,” he said, before adding, “I’ve seen it much worse than this.”
Later in the call, another investor queried the bank’s leadership about its activity in taxi medallion lending – a hot topic now that ride-sharing apps have disrupted that industry.
Chief Financial Officer Carl M. Carlson said the company has about 100 relationships in that category, totaling around $34 million in loans. To date, Brookline Bancorp has seen two of those relationships go to nonaccrual status.
“That’s something we feel we’re adequately reserved on and we’re really monitoring the situation closely,” he said.
The company recorded a provision for loan and lease losses of $1.7 million in the third quarter, compared with $1.8 million in the prior quarter and $2 million in the year-ago quarter.
Net charge-offs increased to $1.6 million in the third quarter, compared with $500,000 in the second and $793,000 in the year-ago period. As a percentage of average loans and leases, net charge-offs increased to 13 basis points in the third quarter, from 4 basis points in the second quarter and 7 basis points in the year-ago quarter. The company attributed the increase in this line item to charge-offs on two relationships, both of which had specific reserves recorded in a prior period.
The allowance for loan and lease losses totaled $56.5 million at the end of the third quarter, compared with $56.4 million in the second and $52.8 million in the year-ago period. As a percentage of total loans and leases, allowance for loan losses stood at 1.17 percent on Sept. 30, compared with 1.19 percent on June 30 and 1.11 percent at year-end 2014.
Total deposits increased to $4.1 billion from $3.9 billion a year ago. Year-over-year, total assets increased 2 percent to $5.8 billion.
The company’s board of directors approved a dividend of 9 cents per share, to be paid on Nov. 20.
