BankRI parent sets aside $4.2M for losses tied to 38 Studios

BROOKLINE BANKCORP Inc., the parent company of Bank Rhode Island has set aside $4.2 million to cover possible losses loans issued to former Red Sox pitcher Curt Schilling's failed videogame company.
Posted 7/26/12

BROOKLINE, Mass. – Brookline Bancorp Inc., the parent company of Bank Rhode Island announced on Thursday it has set aside $4.2 million to cover possible losses from two business loans BankRI issued shortly after Brookline bought the bank in January.

Brookline reported a total $6.7 million provision for credit losses that reduced net income by about 6 cents a share. The bank said $4.2 million was tied to the Rhode Island loans.

The Boston Globe reported that the bank said the loans – originally totaling $9.6 million – were based partly on expected tax credits for a company in Rhode Island that unexpectedly and abruptly went bankrupt – a reference to 38 Studios, which filed for bankruptcy in June and was seeking millions of dollars in tax credits from the state.

The company in a release did not specifically identify 38 Studios as the company that received the loans.

Rhode Island ultimately refused to grant the tax credits to 38 Studios, citing the company’s default on a $75 million loan backed by the state.

Despite the expense, Brookline executives noted the company is profitable and considered well capitalized. Brookline reported a profit of $7.5 million for the second quarter, or 11 cents fully diluted earnings per share, for the quarter ended June 30.

Net income for the first half of 2012 was $13.9 million, or 20 cents fully diluted, compared to $14.3 million, or 24 cents fully diluted, for the first half of 2011.

Brookline did not break out quarterly results for BankRI.

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