Brookline Bancorp grew its balance sheet in the third quarter, but the company’s management insisted during a recent conference call that the holding company for Brookline Bank, First Ipswich Bank and Bank Rhode Island is largely focused on organic growth.
"It’s not a priority by any means," President and CEO Paul Perrault said in response to an investor’s question about the company’s appetite for acquisitions. "The company is growing very nicely and is realizing a lot of the investments we’ve made in recent years, so we’re kind of enjoying the path to improved profitability, tighter management of expenses, realizing on the operating leverage."
"Besides that, around here, there really is not that much going on that’s interesting to me, frankly," he said. "Never say ‘never,’ but we think we can continue to do better as we run this company tighter."
Brookline Bancorp posted $11.6 million in net income for the third quarter this year, up about 23 percent from $9.4 million in the year-ago period. That figure included $1.4 million from a litigation settlement payment, and without it, the company’s earnings per share would have totaled 15 cents per share, as opposed to the 17 cents per share the company actually posted this quarter.
Management attributed the increase in earnings to loan growth, improved credit quality and increased loan and participation fees. Total assets increased about 9 percent year-over-year to $5.7 billion on Sept. 30. from $5.2 billion a year ago.
At the quarter’s end, total loans and leases stood at $4.7 billion, compared with $4.3 billion in the year-ago period. Loan and lease growth during the quarter represented an increase of 11.5 percent on an annualized basis. The commercial real estate and commercial loan and lease portfolios totaled $3.5 billion at the quarter’s end, compared with a little more than $3 billion a year ago. The recent figure represents 74.4 percent of the company’s total loans and leases.
Brookline Bancorp had $3.9 billion in total deposits on Sept. 30, compared with $3.7 billion last year. Total borrowings stood at $1.1 billion, an increase of $91.9 million from June 30 and an increase of $320.3 million from year-end 2013. During the third quarter, the company issued $75 million of 6 percent fixed-to-floating subordinated notes due Sept. 15, 2029.
The company recorded a provision for loan and lease losses of $1.9 million for the quarter ended Sept. 30, compared to $2.2 million during the second quarter of 2014. The decrease of $0.3 million quarter over quarter is due to an improvement in the credit characteristics of the equipment financing portfolio, partially offset by additional reserves required for the deterioration in the acquired portfolio and loan growth during the quarter.
Net charge-offs increased slightly to $800,000 for the third quarter of 2014 compared with $700,000 for the second quarter of 2014. The ratio of net charge-offs to average loans on an annualized basis remained constant at 0.07 percent for the third and second quarter of 2014.
The allowance for loan losses represented 1.12 percent of total loans and leases at Sept. 30 and June 30, 2014. The allowance for loan losses related to originated loans and leases as a percentage of originated loans and leases was 1.26 percent at the quarter’s end, compared with 1.31 percent at June 30, due to improved credit quality slightly offset by loan volume.
