PROVIDENCE – After seeing its earnings cut nearly in half in 2020, Brookline Bancorp Inc. made a full recovery and then some in 2021, more than doubling profits.
The Boston-based parent company for Bank Rhode Island on Wednesday reported $115.4 million in earnings for 2021.
The increase was driven by an about-face in its approach to loan-loss reserves. Like financial institutions nationwide, the company took an aggressive approach to building its credit-loss provisions in 2020, adding $61.9 million in anticipation of bad loans caused by the pandemic. Those defaults largely never materialized and with economic recovery underway, the company released $7.8 million from its reserves in 2021.
Earnings per diluted share also rose from 60 cents to $1.48.
The company grew noninterest income 9.5% to $27 million, fueled by gains in sales of loans and leases held-for-sale and deposit fees.
Low interest rates cut into interest income, however, which declined 4.7% to $311.5 million. Interest-related expenses also fell by more than half to $29.2 million, creating growth in net interest income.
Net interest margin – the difference between interest income generated and the amount paid out to – increased 32 basis points to 3.49%.
Noninterest expenses ticked up 1.1% to $162.6 million, including a nearly $6 million increase in employee salaries and benefits.
Total assets stood at $8.6 billion, down 3.8% year over year with losses in total loans and short-term investments. The $7.2 billion in total loans marks a 1.6% decrease over a year ago, with losses to commercial loans due in part to the end of the Paycheck Protection Program, partially offset by an increase in commercial real estate loans.
As of Dec. 31, the company had $67.7 million in outstanding PPP loans after deferred fees and costs.
Year-end deposits reached $7.1 billion, up 2% over a year ago, with the biggest gains in demand deposits and money market accounts.
The company also reported fourth-quarter earnings of $28.5 million, a 7.1% increase over the fourth quarter of 2020.
This was driven by noninterest income, which more than doubled compared to a year prior to $10.7 million with significant gains in net loan-level derivative income.
Quarterly earnings also included $751,000 in credit loss provisions, due to strong quarterly loan growth, the company stated.
Quarterly interest income fell 4.4% to $76.9 million, again reflecting low interest rates. Interest expenses, however, were cut by more than half to $5.5 million with the biggest drops in deposit costs.
“I am pleased with our strong financial performance and earnings growth in 2021,” Paul Perrault, chairman and CEO, said in a statement. “We finished the year with exceptional loan growth and we are well-positioned as we look forward to the coming year.”
Brookline’s earnings report did not break out the performance of Providence-based Bank Rhode Island. Brookline Bancorp is also the parent company for Brookline Bank and First Ipswich Bank in Massachusetts.
Nancy Lavin is a staff writer for the PBN. Contact her at Lavin@PBN.com.
