Paul Perrault promised Brookline Bancorp Inc.'s investors that he would make an acquisition after refusing to sell last year. Now, if he could only get his latest deal closed.

Brookline had expected to buy Bancorp Rhode Island Inc. this quarter. But with six weeks left in the quarter, the deal that outsiders praised as a healthy bank combination remains in regulatory purgatory.

Brookline certainly hasn't helped soothe nerves. It has extended the seller's shareholder election deadline four times, and Brookline's new chief financial officer caused investors further anxiety when she delayed the release of third-quarter earnings by several weeks.

"It definitely set off bells and whistles," said Richard Lashley, a principal at PL Capital, which has invested in both institutions. Now that Brookline's earnings are out — with no surprises — Lashley says he is more confident the deal will eventually close.

Still, the odd series of events shows that keeping a deal in limbo for an extended period can make investors uncomfortable. It can also expose a deal to more uncertainty and increase the risk that something could go awry.

"There's no question that investors are very jittery for mergers and they do not like their money tied up," said Kip Weissman, a partner at Luse Gorman Pomerenk & Schick. "We typically tell people the total process is five to six months."

Seven of the 15 deals announced in April, including Brookline's deal, remain pending seven months later, data compiled by Sandler O'Neill & Partners shows. One of those deals has been terminated. Weissman said deals have slowed down since April, when optimism and the markets were at their highest for the year.

"It really is a different world since August. Investors want their money and investors want to know what's going on," Weissman said. Often, M&A delays "can be nothing more than that the buyer's stock is moving around."

In light of market shifts, Perrault, Brookline's president and CEO, said the Massachusetts company wanted to keep the election deadline close to the deal's closing date. He said that would allow the seller's shareholders to better determine how much cash or stock they want, based on the most current valuations.

Since the April 20 announcement of the deal, Brookline's stock is down more than 30%, frustrating some shareholders. "You are getting stock, but if it goes down in value, it doesn't really accomplish anything," Lashley said.

Lashley also owns a stake in another pending deal unveiled in April. Regulators have approved the sale of State Bancorp in Jericho, N.Y., to Valley National Bancorp in Wayne, N.J., but the completion date was pushed back to early 2012.

Weissman said he has seen other banks try to align election deadlines with closing dates but that he has never seen so many extensions like those in Brookline's acquisition.

Several industry observers blamed the extensions on Julie Gerschick, Brookline's new CFO and treasurer. Gerschick, who took over as CFO in August, refused to sign off on Brookline's third-quarter financial statements until she was able to verify that their loan systems matched the general ledger.

Perrault said the delayed earnings had nothing to do with extending the election deadline. "We're still here waiting on the application process with the Fed … and we don't know when that finishes," he said.

Weissman said regulators are taking longer to approve deals, especially those that involve an institution once regulated by the Office of Thrift Supervision — such as Brookline — that the new regulator may not know as well.

Federal Reserve Chairman Ben Bernanke acknowledged these delays in a Nov. 8 letter to Cass Sunstein, administrator of the White House Office of Information and Regulatory Affairs. Bernanke said the Fed is conducting an internal review of its M&A application processes "to help us find ways to reduce the inefficiencies and delays."

On Nov. 9 Brookline reported a third-quarter profit of more than $6.2 million, though professional fees for acquisitions cut into results. Still, analysts said the profit should bring comfort to investors and regulators. Lashley, who unsuccessfully fought for two years to gain a seat on Bancorp Rhode Island's board to force its sale, said he's pleased the deal is on. "I always thought [Bancorp Rhode Island] had tremendous value."

Both companies have faced pressure to sell in the past. Brookline's former chairman, Richard Chapman Jr., resigned last year after Perrault and the board refused a takeover bid from an undisclosed suitor that Chapman highly favored.

Soon after, Perrault orchestrated two acquisitions: First Ipswich Bancorp, which closed in February, and Bancorp Rhode Island. Brookline will have 43 branches and assets of $4.7 billion if it buys Bancorp Rhode Island.

The decision to become a buyer has led them to good but costly deals, some observers say. Brookline agreed to buy Bancorp Rhode Island at roughly $234 million, or 1.9 times tangible book value.

Perrault said the acquisition will be "very accretive to earnings," which will increase tangible book value.

Lashley said Brookline will face more pressure to grow next year, especially after refusing to sell. "That's why we're buying stock," he said. If Brookline struggles to exceed its value, "we'll definitely show up at the door."

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