Brookline Bank has purchased the remaining shares in Eastern Funding, one of its subsidiaries specializing in lending to small and medium sized businesses, and now owns the company outright.
The bank announced in its recent earnings release that it has acquired the remaining 15.93 percent interest in the company for a total cash consideration of $35.9 million.
Brookline Bank officially bought the company by increasing its ownership interest in Eastern Funding from approximately 29 to 86 percent through a cash payment of approximately $16.2 million in February 2006.
Despite the recent purchase, Paul Perrault, president and CEO of the parent company of Brookline Bank, said he did not expect to see too much change with the positioning of Eastern.
“We’ve seen good growth every year. It may inch up proportionally; it’s about 16 percent of our loan portfolio today,” he said on a recent earnings call. “I am very comfortable to go to at least 20 percent and if we got that high, then we would revisit and see what the right move is.”
In the first quarter of 2019, Brookline announced net income of $22.5 million, or $0.28 per basic and diluted share, compared to $18.6 million, or $0.24 per basic and diluted share, for the first quarter of 2018.
Net interest income in the quarter was roughly $63 million, up more than $3.5 million from the first quarter of 2018. The margin lost two basis points year-over-year, settling at 3.64 percent at the end of the quarter.
Total assets at the parent company of Brookline Bank, which includes Bank Rhode Island and First Ipswich Bank, reached more than $7.5 billion at the end of the first quarter, up more than $270 million, year-over-year.
The bank also saw good deposit growth in the quarter. Total deposits in the first three months of 2019 increased $166.6 million to $5.6 billion, and were up $429.1 million from the first quarter of 2018, driven primarily by growth in certificates of deposit.
“It’s a lot more funds these days,” CFO Carl Carlson said. “You’re not just talking about money markets but can actually position yourself in the CD market and compete for deposits.”
Total loans at the company reached $6.38 billion, up more than $270 million year-over-year, driven by gains in commercial real estate and equipment financing.
Total net charge-offs for the first quarter of 2019 were $2.1 million, largely related to taxi medallion loans against previously established specific reserves. The provision for credit losses in the quarter was $1.4 million, up from $640,000 in the first quarter of 2018.
Non-performing assets as a percentage of total assets were .36 percent, down six basis points from one year ago
