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Brookline Bancorp Announces 2011 Second Quarter Earnings And Dividend Declaration

Brookline Bancorp, Inc. (the “Company”) (NASDAQ:BRKL) announced today its earnings for the 2011 second quarter and approval by the Board of Directors of a regular quarterly dividend of $0.085 per share payable on August 17, 2011 to stockholders of record on August 1, 2011.

The Company earned $7,001,000, or $0.119 per share on a basic and diluted basis, for the quarter ended June 30, 2011 compared to $7,083,000, or $0.121 per share on a basic and diluted basis, for the quarter ended June 30, 2010. Net income for the 2011 second quarter was reduced by $774,000 ($0.013 per share) as a result of non-tax deductible professional fees incurred relating to acquisition transactions.

The acquisition of First Ipswich Bancorp and its subsidiaries (“Ipswich”) was completed effective February 28, 2011. On April 19, 2011, the Company and Bancorp Rhode Island, Inc. (“Bancorp Rhode Island”) entered into a Merger Agreement pursuant to which Bancorp Rhode Island will merge with and into the Company (the “Merger”). Subject to approval of the Merger by Bancorp Rhode Island shareholders, regulatory approvals and other customary closing conditions, completion of the Merger is expected to occur at the end of the 2011 third quarter or in the 2011 fourth quarter.

Net income for the first half of 2011 was $14,267,000, or $0.243 per share on a basic and diluted basis, compared to $13,436,000, or $0.229 per share on a basic and diluted basis. Net income for the 2011 first half was reduced by $924,000 ($0.016 per share) as a result of non-tax deductible professional fees incurred relating to acquisition transactions.

Operating highlights included:

  • Loan growth of $63.9 million, or 2.5%, in the 2011 second quarter (10.1% on an annualized basis). The growth by segment was as follows: commercial real estate - $33.0 million (11.6% annualized); commercial - $8.3 million (8.5% annualized); indirect auto (“auto”) - $14.9 million (10.3% annualized) and consumer - $7.7 million (7.4% annualized). Excluding Ipswich, loan growth in the 2011 first quarter was $68.4 million, an annualized growth rate of 12.1%; growth occurred in all of the segments.
  • Deposit growth of $40.9 million, or 1.9%, in the 2011 second quarter (7.7% on an annualized basis). Transaction deposit accounts increased $56.2 million, or 4.4% (17.6% annualized), while higher cost certificates of deposit decreased $15.3 million, or 1.8% (7.3% annualized). Excluding Ipswich, deposit growth in the 2011 first quarter was $90.4 million, an annualized growth rate of 20.0%.
  • Annualized return on average stockholders’ equity: second quarter – 5.61% in 2011 (6.23% excluding acquisition related expenses) compared to 5.76% in 2010; first half – 5.73% in 2011 (6.10% excluding acquisition related expenses) compared to 5.48% in 2010.
  • Annualized return on average assets: second quarter – 0.91% in 2011 (1.01% excluding acquisition related expenses) compared to 1.06% in 2010; first half – 0.96% in 2011 (1.02% excluding acquisition related expenses) compared to 1.02% in 2010.
  • Net interest margin – 3.70% in the 2011 second quarter compared to 3.74% in the 2011 first quarter; 3.72% in the first half of 2011 compared to 3.66% in the first half of 2010.
  • Provision for credit losses - $839,000 in the 2011 second quarter compared to $661,000 in the 2010 second quarter and $1,898,000 in the 2011 first half compared to $1,928,000 in the 2010 first half. The provisions reflect lower levels of net charge-offs offset by higher provisions attributable to loan growth and changes in loan risk ratings.
  • Net loan charge-offs were $371,000 (an annualized rate of 0.06% based on average loans outstanding) in the 2011 second quarter compared to $874,000 (0.16%) in the 2010 second quarter and $1,071,000 (0.09%) in the 2011 first half compared to $2,374,000 (0.22%) in the 2010 first half.
  • Non-accrual loans - $7.9 million (0.31% of total loans) at June 30, 2011 compared to $9.5 million (0.38%) at March 31, 2011; non-performing assets - $11.8 million (0.38% of total assets) at June 30, 2011 compared to $10.8 million (0.35%) at March 31, 2011; restructured loans on accrual - $4.9 million at June 30, 2011 compared to $5.1 million at March 31, 2011.
  • Allowance for loan losses - $30.8 million (1.19% of total loans) at June 30, 2011 compared to $30.0 million (1.19%) at March 31, 2011. A credit mark of $4.2 million, $4.1 million of which remains at June 30, 2011, was recognized as of February 28, 2011 in connection with the accounting for acquired Ipswich loans at fair value.

Net interest income increased $1.9 million, or 7.5%, in the 2011 second quarter compared to the 2011 first quarter due to a $234.9 million (8.5%) increase in the average total of interest-earning assets between the two periods. Of that growth, $159.6 million related to the Ipswich acquisition which was completed on February 28, 2011. Offsetting the revenue growth resulting from the increase in earning assets was the effect of the decline in net interest margin from 3.74% in the 2011 first quarter to 3.70% in the 2011 second quarter. The reduction was due in part to a decline in the ratio of the average total of stockholders’ equity to the average total of interest-earning assets from 18.1% to 16.7% in those respective periods. The decline in the average yield on earning assets from 4.85% in the 2011 first quarter to 4.75% in the 2011 second quarter was mostly offset by a decline in the average rate paid on interest-bearing liabilities from 1.40% to 1.31% in those respective periods.

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