By a News Reporter-Staff News Editor at Real Estate Weekly News -- Brookline Bancorp, Inc. (NASDAQ: BRKL) (the "Company") announced net income of $10.4 million, or $0.15 per basic share and diluted share, for the first quarter of 2014, compared to $8.8 million, or $0.13 per basic and diluted share, for the first quarter of 2013, and $7.7 million, or $0.11 per basic and diluted share, for the fourth quarter of 2013.
The Company's 2014 first quarter results included $2.1 million in additional accretion related to a reforecast of certain acquired loans, the sale of a building resulting in a gain of $1.6 million, offset by charges of $1.3 million related to the consolidation of an operations center, discontinuance of two branch locations and CFO recruitment. Excluding these items, net income would have been $0.13 per basic and diluted share.
Paul Perrault, President and Chief Executive Officer of Brookline Bancorp, Inc., stated: "We continue to experience the rewards of the strong foundation that we built in order to be the preferred financial institution in our market area. Our commercial bankers produced strong loan growth in the quarter and prospects remain encouraging for the quarters ahead. Recently, Carl M. Carlson joined Brookline Bancorp, Inc. as its Chief Financial Officer and Treasurer. Carl is an accomplished banker and is settling in well with the management team." BALANCE SHEET Total assets increased $93.7 million during the first quarter of 2014 to $5.4 billion at March 31, 2014, and increased $308.4 million from $5.1 billion at March 31, 2013. The growth in total assets during the first quarter of 2014 was primarily driven by loans and leases, which increased $99.5 million to $4.5 billion at March 31, 2014, representing 9.1 percent growth on an annualized basis. At March 31, 2014, the commercial real estate and commercial loan and lease portfolios totaled $3.3 billion, or 73.6 percent of total loans and leases, as compared to $3.2 billion, or 72.6 percent at December 31, 2013, and $2.9 billion, or 69.3 percent at March 31, 2013. Strong loan growth continued in our total commercial loan and lease portfolio, which increased $45.8 million during the first quarter of 2014, or 19.0 percent on an annualized basis. This growth offsets the decrease of $26.6 million in the indirect automobile loan portfolio during the same period.
Cash, cash equivalents, and investment securities increased $15.1 million quarter-to-quarter and $21.3 million year-to-year to $600.5 million, or 11.1 percent of total assets at March 31, 2014, as compared to $585.4 million, or 11.0 percent of total assets at December 31, 2013, and $579.2 million, or 11.3 percent of total assets at March 31, 2013. Deposits of $3.8 billion at March 31, 2014 were up $12.6 million from December 31, 2013 and up $221.6 million from March 31, 2013. Core deposits, which consist of demand checking, NOW, savings, and money market accounts, increased at a 4.1 percent annualized rate in the first quarter of 2014, raising the core deposit ratio to 76.1 percent at March 31, 2014 from 75.6 percent at December 31, 2013. Total borrowings at March 31, 2014 were $892.0 million, an increase of $79.5 million as compared to December 31, 2013, and $71.6 million as compared to March 31, 2013.
The ratio of stockholders' equity to total assets was 11.46 percent at March 31, 2014, as compared to 11.53 percent at December 31, 2013. The ratio of tangible stockholders' equity to tangible assets was 8.87 percent at March 31, 2014, as compared to 8.88 percent at December 31, 2013. NET INTEREST INCOME Net interest income for the first quarter of 2014 increased $4.0 million to $47.7 million from $43.7 million for the first quarter of 2013, largely as a result of a $0.6 million increase in interest income from investments, a $1.4 million increase in interest income from commercial real estate loans, a $2.8 million increase in accretion related to acquired loans, deposits and borrowed funds, a $1.7 million decrease in interest income due to the runoff in indirect auto loans and a $1.0 million decrease in interest expense on deposits and borrowings.
Net interest margin increased to 3.82 percent for the three months ended March 31, 2014 from 3.70 percent for the three months ended March 31, 2013. PROVISION FOR LOAN LOSSES The Company recorded a provision for loan losses of $2.4 million for the quarter ended March 31, 2014 as total loans grew, compared to $1.8 million a year earlier.
Net charge-offs were $0.7 million in the first quarter of 2014 compared to $0.4 million in the same period a year ago. The ratio of net charge-offs to average loans on an annualized basis was 0.06 percent compared to 0.04 percent a year ago.
The allowance for loan losses represented 1.13 percent of total loans at March 31, 2014 compared to 1.02 percent a year ago. The allowance for loan losses related to originated loans and leases as a percentage of originated loans and leases was 1.33 percent compared to 1.34 percent a year ago. NON-INTEREST INCOME Non-interest income for the quarter ended March 31, 2014 increased $1.8 million to $5.1 million from $3.3 million for the quarter ended March 31, 2013. Several factors contributed to the year-to-year increase, including a net $1.5 million gain on the sale of a building and a $0.3 million increase in gain on sales of loans held-for-sale, offset by a $0.2 million increase on the losses from investment in affordable housing projects, and a $0.1 million decrease in deposit fees. NON-INTEREST EXPENSE Non-interest expense for the quarter ended March 31, 2014 increased $2.8 million to $33.6 million from $30.8 million for the quarter ended March 31, 2013. The year-over-year increase in non-interest expense included an increase of $1.7 million in compensation and employee benefit expense driven primarily by additional staffing for certain initiatives including the opening of the Waltham, MA branch of Brookline Bank and to support the growth in Equipment Finance. Additionally, occupancy expense increased $1.3 million due, in part, to the recognition of future lease obligations associated with the consolidation of our operations center and two discontinued branch properties. These increases were offset by a decrease of $0.4 million in other expenses. RETURNS ON AVERAGE ASSETS AND AVERAGE EQUITY The return on average assets increased during the first quarter of 2014 to 0.78 percent at March 31, 2014 from 0.70 percent for the first quarter of 2013.
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