- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
(Mark One)
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1999
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________ to _________
COMMISSION FILE NUMBER 0-23695
BROOKLINE BANCORP, INC.
(Exact name of registrant as specified in its charter)
MASSACHUSETTS 04-3402944
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
160 WASHINGTON STREET, BROOKLINE, MA 02447-0469
(Address of principal executive offices) (Zip Code)
(617) 730-3500
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirement for the past 90 days.
YES X NO
---- ----
Indicate the number of shares outstanding of each of the issuer's
classes of stock, as of the latest practicable date.
Common Stock, $0.01 par value - 28,708,371 shares outstanding as of May
5, 1999.
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
BROOKLINE BANCORP, INC. AND SUBSIDIARIES
FORM 10-Q
INDEX
PAGE
-----
PART I FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets
as of March 31, 1999 and December 31, 1998 1
Consolidated Statements of Income for the three
months ended March 31, 1999 and 1998 2
Consolidated Statements of Comprehensive Income for
the three months ended March 31, 1999 and 1998 3
Consolidated Statements of Changes in Stockholders'
Equity for the three months ended March 31, 1999 and 1998 4
Consolidated Statements of Cash Flows for the three
months ended March 31, 1999 and 1998 5
Notes to Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 11
Item 3. Quantitative and Qualitative Disclosures about Market Risks. 18
PART II OTHER INFORMATION
Item 1. Legal Proceedings 18
Item 2. Changes in Securities 18
Item 3. Defaults upon Senior Securities 18
Item 4. Submission of Matters to a Vote of Security Holders 18
Item 5. Other Information 19
Item 6. Exhibits and Reports on Form 8-K 19
Signature Page 20
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
BROOKLINE BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS EXCEPT SHARE DATA)
MARCH 31, DECEMBER 31,
1999 1998
---------- ------------
(UNAUDITED)
ASSETS
Cash and due from banks................................................ $ 6,116 $ 6,657
Short-term investments................................................. 14,548 22,660
Securities available for sale.......................................... 135,698 133,529
Securities held to maturity (market value of $126,024
and $122,043, respectively).......................................... 125,822 121,390
Restricted equity securities........................................... 5,402 5,174
Loans, excluding money market loan participations...................... 575,913 548,558
Money market loan participations....................................... 30,400 44,300
Allowance for loan losses.............................................. (13,244) (13,094)
---------- -----------
Net loans......................................................... 593,069 579,764
---------- -----------
Accrued interest receivable............................................ 6,430 6,457
Bank premises and equipment, net....................................... 1,198 1,184
Other real estate owned, net........................................... 1,930 1,940
Other assets........................................................... 262 272
---------- -----------
Total assets...................................................... $ 890,475 $ 879,027
---------- -----------
---------- -----------
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits............................................................... $ 498,268 $ 489,370
Borrowed funds......................................................... 102,350 94,350
Mortgagors' escrow accounts............................................ 3,688 3,308
Income taxes payable................................................... 2,993 5,843
Deferred income tax liability, net..................................... 1,228 2,045
Accrued expenses and other liabilities................................. 5,518 5,889
---------- -----------
Total liabilities................................................. 614,045 600,805
---------- -----------
Stockholders' equity:
Preferred stock, $.01 par value; 5,000,000 shares authorized,
none issued........................................................ - -
Common stock, $.01 par value; 45,000,000 shares authorized,
29,095,000 shares issued.......................................... 291 291
Additional paid-in capital........................................... 134,485 134,490
Retained earnings.................................................... 139,036 135,282
Accumulated other comprehensive income............................... 13,398 14,416
Treasury stock, at cost - 517,200 shares and
113,500 shares, respectively....................................... (5,940) (1,316)
Unallocated common stock held by ESOP - 378,608 shares
and 386,457 shares, respectively................................... (4,840) (4,941)
---------- -----------
Total stockholders' equity........................................ 276,430 278,222
---------- -----------
Total liabilities and stockholders' equity........................ $ 890,475 $ 879,027
---------- -----------
---------- -----------
See accompanying notes to the unaudited consolidated financial statements.
1
BROOKLINE BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS EXCEPT SHARE DATA)
THREE MONTHS ENDED
MARCH 31,
-------------------------
1999 1998
---------- --------
(UNAUDITED)
Interest income:
Loans, excluding money market loan participations.................. $ 11,516 $ 10,531
Money market loan participations................................... 505 586
Debt securities.................................................... 3,287 2,540
Marketable equity securities....................................... 183 181
Restricted equity securities....................................... 79 56
Short-term investments............................................. 238 462
---------- ----------
Total interest income........................................... 15,808 14,356
---------- ----------
Interest expense:
Deposits........................................................... 5,139 5,638
Borrowed funds..................................................... 1,474 1,052
---------- ----------
Total interest expense ......................................... 6,613 6,690
---------- ----------
Net interest income.................................................. 9,195 7,666
Provision for loan losses............................................ 150 -
---------- ----------
Net interest income after provision for loan losses............. 9,045 7,666
---------- ----------
Non-interest income:
Fees and charges................................................... 177 242
Gains on sales of securities, net.................................. 1,190 8
Other real estate owned income, net................................ 53 50
Other income....................................................... 33 42
---------- ----------
Total non-interest income....................................... 1,453 342
---------- ----------
Non-interest expense:
Compensation and employee benefits................................. 1,507 1,294
Occupancy.......................................................... 177 193
Equipment and data processing...................................... 274 283
Advertising and marketing.......................................... 112 81
Other.............................................................. 326 274
---------- ----------
Total non-interest expense...................................... 2,396 2,125
---------- ----------
Income before income taxes........................................... 8,102 5,883
Provision for income taxes........................................... 2,919 2,113
---------- ----------
Net income...................................................... $ 5,183 $ 3,770
---------- ----------
---------- ----------
Weighted average common shares
outstanding during the period...................................... 28,477,913
----------
----------
Earnings per common share - basic and diluted........................ $ 0.18
See accompanying notes to the unaudited consolidated financial statements.
2
BROOKLINE BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(IN THOUSANDS)
THREE MONTHS ENDED
MARCH 31,
------------------------
1999 1998
---------- --------
(UNAUDITED)
Net income........................................................... $ 5,183 $ 3,770
---------- ---------
Other comprehensive income, net of taxes:
Unrealized holding gains (losses).................................. (638) 2,589
Income tax expense (benefit)....................................... (312) 951
----------- ---------
Net unrealized holding gains (losses)........................ (326) 1,638
---------- ---------
Less reclassification adjustment for gains included in net income:
Realized gains.................................................. (1,190) (8)
Income tax expense.............................................. 498 3
---------- ---------
Net reclassification adjustment.............................. (692) (5)
----------- ---------
Total other comprehensive income (loss)...................... (1,018) 1,633
----------- ---------
Comprehensive income................................................. $ 4,165 $ 5,403
----------- ---------
----------- ---------
See accompanying notes to the unaudited consolidated financial statements.
3
BROOKLINE BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (UNAUDITED)
THREE MONTHS ENDED MARCH 31, 1999 AND 1998
(DOLLARS IN THOUSANDS)
UNALLOCATED
ACCUMULATED COMMON
ADDITIONAL OTHER STOCK TOTAL
COMMON PAID-IN RETAINED COMPREHENSIVE TREASURY HELD BY STOCKHOLDERS'
STOCK CAPITAL EARNINGS INCOME STOCK ESOP EQUITY
-------- ---------- ---------- --------- --------- ----------- -----------
Balance at December 31, 1997....... $ - $ - $ 119,018 $ 13,739 $ - $ - $ 132,757
Net income......................... - - 3,770 - - - 3,770
Unrealized gain on securities
available for sale, net of
reclassification adjustment..... - - - 1,633 - - 1,633
Net proceeds of stock offering
and issuance of common
stock (29,095,000 shares) 291 134,406 - - - - 134,697
Common stock acquired by
ESOP (85,000 shares)............ - - - - - (1,394) (1,394)
-------- ---------- ---------- --------- --------- ----------- -----------
Balance at March 31, 1998.......... $ 291 $ 134,406 $ 122,788 $ 15,732 $ - $ (1,394) $ 271,463
-------- ---------- ---------- --------- --------- ----------- -----------
-------- ---------- ---------- --------- --------- ----------- -----------
Balance at December 31, 1998....... $ 291 $ 134,490 $ 135,282 $ 14,416 $ (1,316) $ (4,941) $ 278,222
Net income......................... - - 5,183 - - - 5,183
Unrealized loss on securities
available for sale, net of
reclassification adjustment... - - - (1,018) - - (1,018)
Common stock dividend
of $.05 per share............. - - (1,429) - - - (1,429)
Treasury stock purchases
(403,700 shares).............. - - - - (4,624) - (4,624)
Common stock held by ESOP
committed to be released
(7,849 shares)................ - (5) - - - 101 96
-------- ---------- ---------- --------- --------- ----------- -----------
Balance at March 31, 1999.......... $ 291 $ 134,485 $ 139,036 $ 13,398 $ (5,940) $ (4,840) $ 276,430
-------- ---------- ---------- --------- --------- ----------- -----------
-------- ---------- ---------- --------- --------- ----------- -----------
See accompanying notes to the consolidated financial statements.
4
BROOKLINE BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
THREE MONTHS ENDED
MARCH 31,
-------------------------
1999 1998
---------- --------
(UNAUDITED)
Cash flows from operating activities:
Net income........................................................... $ 5,183 $ 3,770
Adjustments to reconcile net income to net cash provided
by operating activities:
Provision for loan losses........................................ 150 -
Release of ESOP shares........................................... 96 -
Depreciation and amortization.................................... 125 113
Amortization, net of accretion, of securities premiums
and discounts.................................................. 404 179
Accretion of deferred loan origination fees
and unearned discounts......................................... (153) (91)
Net gains from sales of securities available for sale............ (1,190) (8)
Net gains from sales of other real estate owned.................. - (3)
Deferred income taxes............................................ (8) (24)
(Increase) decrease in:
Accrued interest receivable.................................... 27 (959)
Other assets................................................... 10 493
Decrease in:
Income taxes payable........................................... (2,850) (3,757)
Accrued expenses and other liabilities......................... (371) (567)
---------- ---------
Net cash provided by (used in) operating activities.......... 1,423 (854)
---------- ---------
Cash flows from investing activities:
Proceeds from sales and calls of securities available for sale....... 1,210 500
Proceeds from redemptions and maturities of securities
available for sale................................................. 10,000 11,735
Proceeds from redemptions and maturities of securities
held to maturity................................................... 10,697 3,586
Purchase of securities available for sale............................ (14,086) (37,293)
Purchase of securities held to maturity.............................. (15,463) (16,521)
Purchase of Federal Home Loan Bank of Boston stock................... (228) (34)
Net increase in loans................................................ (27,202) (8,492)
Purchase of bank premises and equipment.............................. (130) (43)
Capital expenditures on other real estate owned...................... (6) -
Proceeds from sales of other real estate owned....................... 7 35
---------- ---------
Net cash used for investing activities....................... (35,201) (46,527)
---------- ---------
(Continued)
5
BROOKLINE BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS - (CONTINUED)
(IN THOUSANDS)
THREE MONTHS ENDED
MARCH 31,
-------------------------
1999 1998
---------- --------
(UNAUDITED)
Cash flows from financing activities:
Increase (decrease) in demand deposits and NOW, savings and
money market savings accounts...................................... $ 10,370 $ (3,810)
Decrease in certificates of deposit.................................. (1,472) (8,641)
Proceeds from Federal Home Loan Bank of Boston advances.............. 10,000 750
Repayment of Federal Home Loan Bank of Boston advances............... (2,000) (8,000)
Increase in mortgagors' escrow deposits.............................. 380 469
Net proceedss from issuance of common stock.......................... - 134,697
Purchase of common stock for ESOP.................................... - (1,394)
Purchase of treasury stock........................................... (4,624) -
Payment of dividend on common stock.................................. (1,429) -
---------- ---------
Net cash provided by financing activities...................... 11,225 114,071
---------- ---------
Net increase (decrease) in cash and cash equivalents................... (22,553) 66,690
Cash and cash equivalents at beginning of period....................... 73,617 44,513
---------- ---------
Cash and cash equivalents at end of period............................. $ 51,064 $ 111,203
---------- ----------
---------- ----------
Supplemental disclosures of cash flow information:
Cash paid during the year for:
Interest on deposits and borrowed funds............................ $ 6,596 $ 6,722
Income taxes....................................................... 5,772 5,892
See accompanying notes to the unaudited consolidated financial statements.
6
BROOKLINE BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
THREE MONTHS ENDED MARCH 31, 1999 AND 1998
(UNAUDITED)
(1) BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements have
been prepared in accordance with generally accepted accounting
principles ("GAAP") for interim financial information and the
instructions for Form 10-Q and Article 10 of Regulation S-X.
Accordingly, they do not include all of the information and footnotes
required by GAAP for complete financial statements. In the opinion of
management, all adjustments (consisting only of normal recurring
accruals) necessary for a fair presentation have been included.
Results for the three months ended March 31, 1999 are not necessarily
indicative of the results that may be expected for the year ending
December 31, 1999.
(2) REORGANIZATION AND STOCK OFFERING (DOLLARS IN THOUSANDS)
Brookline Bancorp, Inc. (the "Company") is a Massachusetts
corporation that was organized in November 1997 at the direction of
the Board of Trustees of Brookline Savings Bank (the "Bank") for the
purpose of acquiring all of the capital stock of the Bank upon
completion of the Bank's reorganization from a mutual savings bank
into a mutual holding company structure. As part of the
reorganization, the Company offered for sale 47% of the shares of its
common stock in an offering fully subscribed for by eligible
depositors of the Bank (the "Offering"). The remaining 53% of the
Company's shares of common stock were issued to Brookline Bancorp,
MHC (the "MHC"), a state-chartered mutual holding company
incorporated in Massachusetts. The reorganization and Offering were
completed on March 24, 1998. Prior to that date, the Company had no
assets or liabilities. The reorganization has been accounted for as
an "as if" pooling with assets and liabilities recorded at historical
cost.
Completion of the Offering resulted in the issuance of 29,095,000
shares of common stock, 15,420,350 shares (53%) of which were issued
to the MHC and 13,674,650 shares (47%) of which were sold to eligible
depositors of the Bank at $10.00 per share. Costs related to the
Offering (primarily marketing fees paid to an underwriting firm,
professional fees, registration fees, and printing and mailing costs)
aggregated $1,957 and have been deducted to arrive at net proceeds of
$134,790 from the Offering. The Company contributed 50% of the net
proceeds of the Offering to the Bank for general corporate use. Net
Offering proceeds retained by the Company were used to fund a loan to
the Bank's employee stock ownership plan and acquire short-term
investments.
As part of the Offering and as required by regulation, the Bank
established a liquidation account equal to $58,924 for the benefit of
eligible account holders and supplemental eligible account holders
who maintain their deposit accounts at the Bank after the Offering.
In the unlikely event of a complete liquidation of the Bank (and only
in that event), eligible depositors who continue to maintain deposit
accounts at the Bank shall be entitled to receive a distribution from
the liquidation account. The liquidation account is reduced annually
to the extent that eligible account holders have reduced their
qualifying deposits as of each anniversary date. Subsequent increases
in deposit account balances do not restore an account holder's
interest in the liquidation account. The liquidation account
approximated $18,893 at December 31, 1998, the latest anniversary
date.
The Company and the Bank may not declare or pay dividends on and the
Company may not repurchase any of its shares of common stock if the
effect thereof would cause stockholders' equity to be reduced below
the required liquidation account balance or minimum regulatory
capital levels.
7
BROOKLINE BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
THREE MONTHS ENDED MARCH 31, 1999 AND 1998
(UNAUDITED)
(3) EMPLOYEE STOCK OWNERSHIP PLAN (DOLLARS IN THOUSANDS)
On March 24, 1998, the Board of Directors of the Bank approved an
employee stock ownership plan (the "ESOP"). All employees meeting age
and service requirements are eligible to participate in the ESOP. The
ESOP is authorized to purchase up to 4% of the common stock sold in
the Offering, or 546,986 shares, in the open market and to borrow up
to $7,500 from the Company to finance the purchase of such shares.
The loan is payable in quarterly installments over 30 years and bears
interest at 8.50% per annum. The loan can be prepaid without penalty.
Loan payments are principally funded by cash contributions from the
Bank and dividends on unallocated shares of Company stock held by the
ESOP, subject to IRS limitations.
Through March 31, 1999, the ESOP has purchased 407,600 shares of
common stock in the open market at an aggregate cost of $5,248. For
the three months ended March 31, 1999, $92 was charged to
compensation and employee benefits expense based on the commitment to
release 7,849 shares to eligible employees.
(4) EARNINGS PER SHARE
Earnings per share is based on the weighted average number of shares
outstanding during the periods presented. The Company's "basic" and
"diluted" earnings per share computations are identical in the
periods presented, as there is no dilution effect. Earnings per share
is not presented for periods ended prior to April 1, 1998 since the
Company completed its Offering on March 24, 1998 and, accordingly,
such data would not be meaningful.
The weighted average shares outstanding for the three month period
ended March 31, 1999 was calculated as follows:
Shares Fraction Weighted
Dates Outstanding Outstanding Of Period Average Shares
----------------- ----------- --------- --------------
January 1 through March 31, 1999 29,095,000 100% 29,095,000
Less unallocated ESOP shares:
At beginning of period (386,457) 100% (386,457)
Purchased during the period - -
ESOP shares committed to be
released during the period 7,849 50% 3,925
Less treasury stock:
At beginning of period (113,500) 100% (113,500)
Purchased during the period (403,700) 30% (121,055)
-----------
Weighted average shares 28,477,913
-----------
-----------
(5) ACCUMULATED OTHER COMPREHENSIVE INCOME (DOLLARS IN THOUSANDS)
Accumulated other comprehensive income is comprised entirely of
unrealized gains on securities available for sale, net of income
taxes. At March 31, 1999 and December 31, 1998, such taxes amounted
to $7,978 and $8,788, respectively.
8
BROOKLINE BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
THREE MONTHS ENDED MARCH 31, 1999 AND 1998
(UNAUDITED)
(6) COMMITMENTS AND SWAP AGREEMENT (DOLLARS IN THOUSANDS)
At March 31, 1999, the Company had outstanding commitments to
originate loans of $81,466, $62,714 of which were commercial real
estate and multi-family mortgage loans. Unused lines of credit
available to customers were $9,970, $8,639 of which were equity lines
of credit.
Effective April 14, 1998, the Bank entered into an interest-rate swap
agreement with a third-party that matures April 14, 2005. The
notional amount of the agreement is $5,000. Under this agreement,
each quarter the Bank pays interest on the notional amount at an
annual fixed rate of 5.9375% and receives from the third-party
interest on the notional amount at the floating three month U.S.
dollar LIBOR rate. The Bank entered into this transaction to match
more closely the repricing of its assets and liabilities and to
reduce its exposure to increases in interest rates. The net interest
expense paid was $10 for the three months ended March 31, 1999.
(7) DIVIDEND DECLARATION
On April 15, 1999, the Board of Directors of the Company approved and
declared a regular quarterly cash dividend of $.05 per share of
common stock to shareholders of record as of April 30, 1999 and
payable on May 14, 1999.
(8) 1999 STOCK OPTION PLAN AND 1999 RECOGNITION AND RETENTION PLAN
At the annual meeting of stockholders on April 15, 1999, the
stockholders approved the Company's 1999 Stock Option Plan (the
"Stock Option Plan") and the 1999 Recognition and Retention Plan (the
"RRP").
Under the Stock Option Plan, 1,367,465 shares of the Company's common
stock have been reserved for issuance to officers, employees and
non-employee directors of the Company. Shares issued upon the
exercise of a stock option may be either authorized but unissued
shares or reacquired shares held by the Company as treasury shares.
Any shares subject to an award which expires or is terminated
unexercised will again be available for issuance under the Stock
Option Plan. On April 19, 1999, 1,265,500 options were awarded to
officers and non-employee directors of the Company at an exercise
price of $10.8125 per share, the fair market value of the common
stock of the Company on that date. Of the total options awarded,
410,460 options are incentive stock options and 855,040 options are
non-qualified stock options. Options awarded vest over periods
ranging from less than six months through five years. If an
individual to whom a stock option was granted ceases to maintain
continuous service by reason of normal retirement, death or
disability, or following a change in control, all options and rights
granted and not fully exercisable become exercisable in full upon
the happening of such event and shall remain exercisable for a one
year period. The Company intends to account for the Stock Option Plan
by using the intrinsic value based method of accounting prescribed by
APB Opinion No. 25, "Accounting for Stock Issued to Employees." Pro
forma disclosures of net income and earnings per share will be made
as if the fair value based method of accounting defined in Statement
of Financial Accounting Standards No. 123, "Accounting for
Stock-Based Compensation," had been applied.
Under the RRP, 546,986 shares of the Company's common stock have been
reserved for issuance as restricted stock awards to officers,
employees and non-employee directors in recognition of prior service
and as an incentive for such individuals to remain with the Company.
Shares issued upon vesting may be either authorized but unissued
shares or reacquired shares held by the Company as treasury shares.
Any
9
BROOKLINE BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
THREE MONTHS ENDED MARCH 31, 1999 AND 1998
(UNAUDITED)
shares not issued because vesting requirements are not met will again
be available for issuance under the RRP. On April 19, 1999, 546,500
shares were awarded to officers and non-employee directors of the
Company. The shares vest over varying time periods ranging from six
months up to eight years. In the event a recipient ceases to maintain
continuous service with the Company by reason of normal retirement,
death or disability, or following a change in control, RRP shares
still subject to restrictions will vest and be free of such
restrictions. A significant number of shares vest in 1999 and 2000.
Expense is recognized for shares awarded over the vesting period at
the fair market value of the shares on the date they were awarded, or
$10.8125 per share. Assuming all shares vest according to the terms
of the awards, the Company's pre-tax operating expenses will be
charged by the following amounts in the periods indicated (in
thousands):
YEAR 1999
---------
Second quarter $ 1,273
Third quarter 1,638
Fourth quarter 683
---------
3,594
---------
YEAR 2000
---------
First quarter 397
Second quarter 376
Third quarter 366
Fourth quarter 115
---------
1,254
---------
Year 2001 173
Year 2002 172
Year 2003 172
Year 2004 166
Year 2005 164
Year 2006 164
Year 2007 50
---------
$ 5,909
---------
---------
10
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
GENERAL
Brookline Bancorp, Inc. (the "Company") was organized in November 1997
for the purpose of acquiring all of the capital stock of Brookline Savings
Bank (the "Bank") upon completion of the Bank's reorganization from a mutual
savings bank into a mutual holding company structure. As part of the
reorganization, the Company offered for sale 47% of the shares of its common
stock in an offering fully subscribed for by eligible depositors of the Bank
(the "Offering"). The remaining 53% of the Company's shares of common stock
were issued to Brookline Bancorp, MHC, a state-chartered mutual holding
company incorporated in Massachusetts. The reorganization and Offering were
completed on March 24, 1998. See note 2 to the unaudited consolidated
financial statements for further information about the reorganization and the
Offering.
Prior to March 24, 1998, the Company had no assets or liabilities. Its
principal activities since that date through March 31, 1999 have been to
complete the Offering, acquire all of the capital stock of the Bank,
contribute 50% of the net proceeds of the Offering to the Bank and use the
remaining 50% of the net proceeds to acquire investment securities and fund a
loan to the Bank's employee stock ownership plan.
The reorganization has been accounted for as an "as if" pooling with
assets and liabilities recorded at historical cost. The unaudited
consolidated financial statements include the accounts of the Company, the
Bank and subsidiaries of the Company and the Bank.
This quarterly report on Form 10-Q contains forward-looking statements.
For this purpose, any statements contained herein that are not statements of
historical fact may be deemed to be forward-looking statements. Without
limiting the foregoing, the words "believes", "anticipates", "plans",
"expects" and similar expressions are intended to identify forward-looking
statements. There are a number of important factors that could cause the
Company's actual results to differ materially from those contemplated by such
forward-looking statements. These important factors include, without
limitation, the Bank's continued ability to originate quality loans,
fluctuation of interest rates, real estate market conditions in the Bank's
lending areas, general and local economic conditions, the Bank's continued
ability to attract and retain deposits, the Company's ability to control
costs, new accounting pronouncements and changing regulatory requirements.
COMPARISON OF FINANCIAL CONDITION AT MARCH 31, 1999 AND DECEMBER 31, 1998
Total assets increased by $11.4 million, or 1.3%, from $879.0 million at
December 31, 1998 to $890.4 million at March 31, 1999. Excluding money market
loan participations, the loan portfolio increased by $27.4 million, or 5.0%,
from $548.5 million at December 31, 1998 to $575.9 million at March 31, 1999.
Growth took place in the multi-family mortgage loan sector of the portfolio
($22.5 million, or 8.6%) and the commercial real estate mortgage loan sector
($5.7 million, or 2.9%). Changes in other sectors of the loan portfolio were
modest. Offsetting part of the growth in the loan portfolio was a $13.9
million decline in money market loan participations to $30.4 million at March
31, 1999 and an $8.1 million decline in short-term investments to $14.5
million at that same date. Money market loan participations represent
purchases of a portion of loans to national companies and organizations
originated and serviced by money center banks. The participations generally
mature between one day and three months. The Company views such
participations as an alternative investment to slightly lower yielding
short-term investments.
Total deposits were $498.3 million at March 31, 1999 compared to $489.4
million at December 31, 1998, an increase of $8.9 million, or 1.8%. All of
the growth was attributable to a $10.2 million, or 5.9%, increase in money
market savings accounts. This growth was partially offset by a $1.5 million,
or 0.6%, decline in certificate of deposit accounts. The current low interest
rate environment is prompting depositors to maintain their funds in accounts
with shorter maturities or immediate availability.
11
The Company increased its borrowings from the Federal Home Loan Bank of
Boston ("FHLB") from $94.4 million at December 31, 1998 to $102.4 million at
March 31, 1999 as part of its efforts to manage interest rate risk. As loan
customers have sought to lock in fixed rates of interest for several years,
the Company has extended its use of borrowings with maturities in the five
year range.
Total stockholders' equity declined from $278.2 million at December 31,
1998 to $276.4 million at March 31, 1999 as a result of the purchase of
407,600 shares of the Company's common stock in the open market during the
first quarter of 1999 at an aggregate cost of $4.6 million, or $11.45 per
share. Such purchases were made in connection with a stock repurchase plan
that received regulatory approval on October 20, 1998. The plan allows the
Company to repurchase 1,454,750 shares, or 5.0%, of total common shares
outstanding. No time limit has been established for completion of the plan.
As of March 31, 1999, 517,200 shares of common stock have been purchased at
an aggregate cost of $5.9 million, or $11.48 per share. During the first
quarter of 1999, net income amounted to $5.2 million and a cash dividend of
$.05 per share ($1.4 million) was declared and paid.
Unrealized gains on securities available for sale are reported as
accumulated other comprehensive income. Such gains amounted to $21.4 million
($13.4 million on an after-tax basis) at March 31, 1999 and $23.2 million
($14.4 million on an after-tax basis) at December 31, 1998. The net decrease
is after realization of $1.2 million ($692,000 on an after-tax basis) of
gains from sales of marketable equity securities during the first quarter of
1999.
NON-PERFORMING ASSETS, RESTRUCTURED LOANS AND ALLOWANCE FOR LOAN LOSSES
The following table sets forth information regarding non-performing
assets, restructured loans and the allowance for loan losses:
MARCH 31, DECEMBER 31,
1999 1998
----------- ------------
(DOLLARS IN THOUSANDS)
Non-accrual loans:
Mortgage loans:
One-to-four family $ 87 $ -
Commercial 294 297
Home equity - 35
--------- ---------
Total non-accrual loans 381 332
Other real estate owned, net of allowance
for losses of $186 and $186, respectively 1,930 1,940
--------- ---------
Total non-performing assets $ 2,311 $ 2,272
--------- ---------
--------- ---------
Restructured loans $ - $ -
--------- ---------
--------- ---------
Allowance for loan losses $ 13,244 $ 13,094
--------- ---------
--------- ---------
Allowance for loan losses as a percent
of total loans 2.18% 2.21%
Allowance for loan losses as a percent
of total loans, excluding money market
participation loans 2.30 2.39
Non-accrual loans as a percent of total loans 0.06 0.06
Non-performing assets as a percent of
total assets 0.26 0.26
12
In addition to identifying non-performing loans, the Company identifies
loans that are characterized as "impaired" pursuant to generally accepted
accounting principles. The definition of "impaired loans" is not the same as
the definition of "non-accrual loans," although the two categories tend to
overlap. Impaired loans amounted to $1.4 million at March 31, 1999 and
December 31, 1998. None of the impaired loans at those dates required a
specific allowance for impairment due primarily to prior charge-offs and/or
the sufficiency of collateral values.
During the three months ended March 31, 1999, recoveries of loans
previously charged off amounted to $1,000 and loan charge-offs were less than
$1,000. Despite net loan recoveries and a continued low level of
non-performing loans, the Company increased its allowance for loan losses by
providing $150,000 as a charge to earnings in the first quarter of 1999.
Management deemed it prudent to increase the allowance in light of the $27.4
million increase in net loans outstanding (exclusive of money market loan
participations), all of which occurred in the higher risk categories of
multi-family and commercial real estate mortgage loans.
While management believes that, based on information currently available,
the allowance for loan losses is sufficient to cover losses inherent in the
Company's loan portfolio at this time, no assurance can be given that the
level of allowance will be sufficient to cover future loan losses or that
future adjustments to the allowance will not be necessary if economic and/or
other conditions differ substantially from the economic and other conditions
considered by management in evaluating the adequacy of the current level of
the allowance.
In March 1999, four federal banking agencies and the Securities and
Exchange Commission announced they have formed a working group to come up
with new guidelines for the documentation, disclosure and reporting of bank
loan loss reserves because of "continued uncertainty among financial
institutions as to the expectations of the banking and securities regulators"
on how banks should calculate and report loan loss reserves. Within one year,
the working group expects to issue guidance regarding (1) the procedures
necessary for a reasoned assessment of losses inherent in a loan portfolio,
(2) documentation that should exist to support the allowance and (3) enhanced
disclosure of credit loss allowances, including changes in risk factors and
asset quality that affect allowances for credit losses. It is not possible at
this time to anticipate what effect, if any, guidelines developed by the
working group will have on the financial condition or operating results of
the Company.
COMPARISON OF OPERATING RESULTS FOR THE THREE MONTHS ENDED MARCH 31, 1999 AND
1998
GENERAL
Operating results are primarily dependent on the Company's net interest
income, which is the difference between the interest earned on the Company's
loan and investment portfolios and the interest paid on deposits and
borrowings. Operating results are also affected by provisions for loan
losses, the level of income from non-interest sources such as service fees
and sales of investment securities and other assets, operating expenses and
income taxes. Operating results are also significantly affected by general
economic conditions, particularly changes in interest rates, as well as
government policies and actions of regulatory authorities.
Net income for the three months ended March 31, 1999 was $5.2 million
compared to $3.8 million for the three months ended March 31, 1998, an
increase of 37.5%. The 1999 period included $1.2 million of gains from sales
of marketable equity securities ($692,000 on an after-tax basis) compared to
$8,000 ($5,000 on an after-tax basis) in the 1998 period. Excluding these
amounts, the increase in net income for the 1999 first quarter compared to
the 1998 first quarter was $726,000, or 19.3%. The increase resulted
primarily from loan growth and the availability of the net proceeds from the
Offering.
Earnings per share of common stock was $0.18 for the three months ended
March 31, 1999. Securities gains on an after-tax basis amounted to $0.02 per
share in that same three month period. Per share data is not presented for
the three months ended March 31, 1998 because the Company became a publicly
owned stock institution on March 24, 1998 and, accordingly, did not have
shares outstanding throughout that three month period.
13
Interest rate spread (the difference between yields earned on assets and
rates paid on deposits and borrowings) declined from 3.11% in the first
quarter of 1998 to 2.58% in the first quarter of 1999. Contributing to the
decline were lower yields on existing loans, new loan originations,
short-term investments and newly acquired investment securities caused by a
falling interest rate environment. In addition, average deposit balances of
$44.0 million were held by the Company during the first quarter of 1998 in
connection with subscriptions for stock in the Offering. The rate paid on
such funds was 2.50% while the average rate earned from investing the funds
in short-term investments was 5.41%. The average rate paid on deposits,
borrowed funds and the stock subscription proceeds was 4.54% in the first
quarter of 1998 compared to an average rate of 4.62% paid on deposits and
borrowed funds in the first quarter of 1999. Excluding the funds from stock
subscriptions, the average rate paid on deposits and borrowed funds in the
first quarter of 1998 would have been 4.71%, or 14 basis points higher than
the actual rate paid.
INTEREST INCOME
Interest income on loans, excluding money market loan participations, was
$11.5 million in the first quarter of 1999 compared to $10.5 million in the
first quarter of 1998, an increase of $1.0 million, or 9.4%. The additional
income resulting from an increase in average loans outstanding of $86.4
million, or 18.2%, in the first quarter of 1999 compared to the first quarter
in 1998 was partially offset by a decline in the average rate earned on loans
from 8.84% in the 1998 quarter to 8.21% in the 1999 quarter. The reduction in
loan yield was attributable to a falling interest rate environment.
Historically, much of the Company's loan portfolio was priced at adjustable
rates tied to a published prime rate. Cuts in the prime rate during the
latter part of 1998 caused a decline in the yield on the Company's adjustable
rate loans. The falling rate environment prompted some multi-family and
commercial real estate borrowers to convert their loans to fixed-rate pricing
for several years. Additionally, a significant part of new loan production in
the second half of 1998 and the first quarter of 1999 was originated at
prevailing market rates for fixed periods averaging five to seven years. If
interest rates increase during the fixed rate phase of these new loans, net
interest income could be negatively affected. Management expects the overall
yield on the loan portfolio in the next few quarters to decline from the
8.21% average yield earned during the first quarter of 1999.
The average balance invested in money market loan participations during
the three months ended March 31, 1999 and 1998 were $39.9 million and $41.8
million, respectively, and the yields earned on those balances were 5.14% and
5.60%, respectively.
Interest income on debt securities increased 29.4% from $2.5 million in
the first quarter in 1998 to $3.3 million in the first quarter of 1999 as a
result of shifting part of the proceeds from the Offering from short-term
investments to debt securities maturing in the two year range. The average
balances invested in debt securities and short-term investments were $226.7
million and $19.7 million, respectively, in the first quarter of 1999
compared to $169.7 million and $34.1 million, respectively, in the first
quarter of 1998. Yields earned on those balances were 5.80% and 4.89%,
respectively, in the 1999 period and 5.99% and 5.41%, respectively, in the
1998 period. The reduced rates were attributable to the falling rate
environment.
INTEREST EXPENSE
Interest expense on deposits was $5.1 million for the three months ended
March 31, 1999, an 8.9% decrease from the $5.6 million expended for the three
months ended March 31, 1998. Part of the decrease was due to the $275,000 of
interest paid on the $44 million of average balances on deposit pertaining to
the Offering during the first quarter of 1998. Excluding such balances, the
average of other deposits increased modestly ($3.3 million, or 0.7%) in the
1999 quarter compared to the 1998 quarter. The average rates paid on such
deposits were 4.32% in the 1999 quarter and 4.48% in the 1998 quarter. The
low level of deposit growth was due in part to withdrawals by eligible
depositors for purchase of stock in the Offering. Also, the strength of the
stock market and the low interest rate environment prompted some depositors
to place funds in other financial instruments such as mutual funds and
annuities.
14
The Company increased its use of borrowings from the FHLB as part of its
management of interest rate risk. The average balances of advances
outstanding were $97.7 million in the first quarter of 1999 compared to $66.1
million in the first quarter of 1998 and the average rates paid on such
balances were 6.12% and 6.36%, respectively.
NON-INTEREST INCOME
Sales of marketable equity securities during the three months ended march
31, 1999 and 1998 resulted in gains of $1.2 million and $8,000, respectively.
Marketable equity securities are held by the Company primarily for capital
appreciation and not for trading purposes. The decrease in fees and charges
from $242,000 in the first quarter of 1998 to $177,000 in the first quarter
of 1999 resulted primarily from less mortgage loan prepayment fees.
NON-INTEREST EXPENSE
Total non-interest expense increased 12.8% from $2.1 million for the three
months ended March 31, 1998 to $2.4 million for the three months ended March
31, 1999. Most of the increase resulted from higher compensation and employee
benefits expense caused by additional personnel (including two commercial
loan officers, a residential mortgage loan originator and a loan
administrative assistant) and a $92,000 provision relating to the employee
stock ownership plan (the "ESOP"). The ESOP became effective upon the
Company's conversion to stock and, accordingly, there was no expense for the
ESOP in the first quarter of 1998.
Advertising and marketing expense increased from $81,000 in the first
quarter of 1998 to $112,000 in the first quarter of 1999 because of new
promotions and the accounting for the advertising budget on an accrual basis
commencing in 1999 rather than on the when paid basis used in 1998. The
increase in other expenses is attributable primarily to expenses associated
with being a public company such as costs for annual reports, proxies, stock
transfer agent fees and stock exchange fees. The level of increase in these
expenses is more pronounced in the first quarter of 1999 compared to the
prior year quarter since the Company only became a public stock institution
on March 24, 1998.
INCOME TAXES
The effective rate of income taxes was 36.0% in the first quarter of 1999
compared to 35.9% in the first quarter of 1998. The rate of state income
taxes was low in both quarters because of the existence of a real estate
investment trust subsidiary and utilization of investment security
subsidiaries.
ASSET/LIABILITY MANAGEMENT
The Bank's Asset/Liability Committee is responsible for managing
interest rate risk and reviewing with the Board of Directors on a quarterly
basis its activities and strategies, the effect of those strategies on the
Bank's operating results, the Bank's interest rate risk position and the
effect changes in interest rates would have on the Bank's net interest income.
Generally, it is the Bank's policy to reasonably match the rate
sensitivity of its assets and liabilities. The interest rate sensitivity gap
is defined as the difference between the amount of interest-earning assets
maturing or repricing within a specific time period and the amount of
interest-bearing liabilities maturing or repricing within the same time
period. Also taken into consideration are interest rate swap agreements
entered into by the Bank. At March 31, 1999, interest-earning assets maturing
or repricing within one year amounted to $365.7 million and interest-bearing
liabilities maturing or repricing within one year amounted to $444.7 million
resulting in a cumulative one-year negative gap position of $79.0 million, or
8.9% of total assets.
15
LIQUIDITY AND CAPITAL RESOURCES
The Company's primary sources of funds are deposits, principal and
interest payments on loans and debt securities and borrowings from the FHLB.
In March 1998, $134.8 million of net proceeds from the Offering added
significantly to the funds available to the Company for use in conducting its
business. While maturities and scheduled amortization of loans and
investments are predictable sources of funds, deposit flows and mortgage loan
prepayments are greatly influenced by interest rate trends, economic
conditions and competition.
During the past few years, the combination of generally low interest
rates on deposit products and the attraction of alternative investments such
as mutual funds and annuities has resulted in little growth or a net decline
in deposits in certain time periods. Based on its monitoring of historic
deposit trends and its current pricing strategy for deposits, management
believes the Company will retain a large portion of its existing deposit base.
From time to time, the Company utilizes advances from the FHLB primarily
in connection with its management of the interest rate sensitivity of its
assets and liabilities. During the three months ended March 31, 1999, the
Company repaid advances of $2.0 million and obtained new advances of $10.0
million. Total advances outstanding at March 31, 1999 amounted to $102.4
million.
The Company's most liquid assets are cash and due from banks, short-term
investments, debt securities and money market loan participations that
generally mature within 90 days. At March 31, 1999, such assets amounted to
$73.3 million, or 8.2% of total assets.
At March 31, 1999, the Company and the Bank exceeded all regulatory
capital requirements. The Bank's leverage capital was $202.7 million, or
25.1% of adjusted assets. The minimum required leverage capital ratio is
3.00% to 5.00% depending on a bank's supervisory rating.
YEAR 2000 ("Y2K") COMPLIANCE
Changing from the year 1999 to 2000 has the potential to cause problems
in data processing and other date-sensitive systems, a problem known as the
Year 2000 or Y2K dilemma. The Year 2000 date change can affect any system
that uses computer software programs or computer chips, including automated
equipment and machinery. For example, many software programs or computer
chips store calender dates as two-digit rather than four-digit numbers. These
software programs record the year 1998 as "98." This approach will work until
the Year 2000 when "00" may be read as 1900 instead of 2000.
Regarding the Company, computer systems are used to perform financial
calculations, track deposits and loan payments, transfer funds and make
direct deposits. The processing of the Company's loan and deposit
transactions is outsourced to a third-party data processing vendor. Computer
software and computer chips also are used to run security systems,
communications networks and other essential bank equipment. Because of its
reliance on these systems (including those used by its third-party data
processing vendor), the Company is following a comprehensive process to
assure that such systems are ready for the Year 2000 date change.
To become Y2K compliant, the Company is following a five-step process
suggested by federal bank regulatory agencies. A description of each of the
steps and the status of the Company's efforts in completing the steps is as
follows:
Step 1. AWARENESS AND UNDERSTANDING OF THE PROBLEM. The Company has
formed a Year 2000 team that has investigated the problem and its potential
impact on the Company's systems. An independent consulting firm was engaged
to assist the Company in development of its approach to becoming Y2K
compliant. This phase also includes education of the Company's employees and
customers about Y2K issues. The awareness and
16
understanding phase of this step has been completed. Training and
communication has taken place and will continue in 1999.
Step 2. IDENTIFICATION OF ALL POTENTIALLY AFFECTED SYSTEMS. This step
has included a review of all major information technology ("IT") and
non-information technology ("non-IT") systems to determine how they are
impacted by Y2K issues. An inventory has been prepared of all vendors who
render IT and non-IT services to the Company. This step is considered
complete. Any new hardware or software that may be purchased during 1999 will
be evaluated for Y2K compliance
Step 3. ASSESSMENT AND PLANNING. The Y2000 team has completed its
assessment of which systems and equipment are most prone to placing the
Company at risk if they are not Y2K compliant. The project team has developed
an inventory of its vendors, an inventory of actions to be taken,
identification of the team members responsible for completion of each action,
a completion timetable and a project tracking methodology. Significant
vendors have been requested to advise the Company in writing of their Y2K
readiness, including actions to become compliant if they are not already
compliant. A plan has been developed to repair or replace systems and
equipment not currently Y2K compliant. This step is considered complete.
Step 4. CORRECTION AND TESTING. The Company's third party data
processing servicer as well as vendors who provide significant
technology-related services have modified their systems to become Y2K
compliant. The Company has developed scripts involving typical transactions
to test the proper functioning of the modified systems. It has also arranged
for repair or replacement of equipment programs affected by Y2K issues. Most
of the testing and corrections has taken place. This step is expected to be
completed by the end of June 1999. The monitoring of certain non-IT vendors
will continue throughout 1999.
Step 5. IMPLEMENTATION. This step includes repair or replacement of
systems and computer equipment and the development of contingency plans. The
repair and replacement phase is substantially completed. Contingency plans
for how the Company would resume business if unanticipated problems arise
from non-performance by IT and non-IT vendors was completed in the first
quarter of 1999.
The Company's efforts to become Y2K compliant are being monitored by its
federal banking regulators. Failure to be Y2K compliant could subject the
Company to formal supervisory or enforcement actions.
The Company expensed $130,000 in 1998, $10,000 of which was in the first
quarter, and $3,000 in the first quarter of 1999. While the Company expects
to incur additional costs through 1999 to become Y2K compliant, it does not
expect such costs to be material to the operating expenses of the Company.
Some of the costs are not expected to be incremental to the Company, but
rather represent new equipment and software that would otherwise be purchased
in the normal course of the Company's business. The Company presently
believes the Y2K issue will not pose significant operating problems for the
Company. However, if implementation and testing plans are not completed in a
satisfactory and timely manner, in particular by third parties on which the
Company is dependent, or other unforeseen problems arise, the Y2K issue could
have a material adverse effect on the operations of the Company.
RECENT DEVELOPMENTS
1999 STOCK OPTION PLAN AND 1999 RECOGNITION AND RETENTION PLAN
At the annual meeting of stockholders on April 15, 1999, the
stockholders approved the Company's 1999 Stock Option Plan (the "Stock Option
Plan") and the 1999 Recognition and Retention Plan (the "RRP"). See note 8 to
the unaudited consolidated financial statements included herein (pages 9 and
10) for information about these plans.
17
Assuming all shares awarded under the RRP vest according to the terms of
the awards, the Company's pre-tax operating expenses will be charged by $5.9
million, $3.6 million of which will be in the last three quarters of 1999,
$1.3 million in the year 2000 and $1.0 million over the years 2001 through
2007. The RRP will and the Stock Option Plan could have a dilutive effect on
the interests of the Company's stockholders.
INTERNET HOME BANKING
The Company has entered into a three year contractual arrangement with
Digital Insight Corporation ("Digital Insight"), a provider of real-time,
Internet-based transaction services for financial institutions. Through
Digital Insight, the Company plans to commence offering to its existing
customers Internet home banking and bill payment services in the second half
of 1999. Digital Insight has entered into similar contractual relationships
with numerous other financial institutions throughout the United States.
Digital Insight has advised the Company in writing that the systems it
uses to provide the contemplated services are Year 2000 compliant. While this
new service offering is not expected to have a significant impact on the
Company's 1999 operating results, it is not possible to predict how much the
Company's customers will use the new services.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS
For a discussion of the Company's management of market risk exposure,
see "Asset/Liability Management" in Item 2 of Part 1 of this report and pages
12 through 14 of the Company's Annual Report incorporated by reference in
Part II item 7A of Form 10-K for the fiscal year ended December 31, 1998.
For quantitative information about market risk, see pages 12 through 14
of the Company's 1998 Annual Report.
There have been no material changes in the quantitative disclosures
about market risk as of March 31, 1999 from those presented in the Company's
1998 Annual Report.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Company and its subsidiaries are not involved in any litigation, nor
is the Company aware of any pending litigation, other than legal proceedings
incident to the business of the Company. Management believes the results of
any current pending litigation would be immaterial to the consolidated
financial condition or results of operations of the Company.
ITEM 2. CHANGES IN SECURITIES
Not applicable.
ITEM 3. DEFAULT UPON SENIOR SECURITIES
Not applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable.
18
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
All required exhibits are included in Part I under Financial Statements
(Unaudited) and Management's Discussion and Analysis of Operations, and are
incorporated by reference, herein.
Financial Data Schedule - Included herein on Page 21.
There were no reports filed on Form 8-K.
19
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed by the undersigned
thereunto duly authorized.
BROOKLINE BANCORP, INC.
DATE: MAY 13, 1999 BY: /s/ RICHARD P. CHAPMAN, JR.
------------------------------------------
RICHARD P. CHAPMAN, JR.
PRESIDENT AND CHIEF EXECUTIVE OFFICER
DATE: MAY 13, 1999 BY: /s/ PAUL R. BECHET
-------------------------------------------------
PAUL R. BECHET
SENIOR VICE PRESIDENT AND CHIEF FINANCIAL OFFICER
20