Brookline Bancorp Announces Second Quarter Results Net Income of $20.5 million, EPS of $0.26

Date : 07/24/2019 @ 8:05PM
Source : GlobeNewswire Inc.
Stock : Brookline Bancorp Inc (BRKL)
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Brookline Bancorp Announces Second Quarter Results Net Income of $20.5 million, EPS of $0.26

Brookline Bancorp (NASDAQ:BRKL)
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Brookline Bancorp, Inc. (NASDAQ: BRKL) (the “Company”) today announced net income of $20.5 million, or $0.26 per basic and diluted share, for the second quarter of 2019, compared to $22.5 million, or $0.28 per basic and diluted share, for the first quarter of 2019, and $20.8 million, or $0.26 per basic and diluted share, for the second quarter of 2018.

Paul Perrault, President and Chief Executive Officer of the Company commented on the second quarter earnings, "We are pleased to report another strong quarter to our stockholders. The Company continues to have broad-based loan growth, solid returns, and strong asset quality. Brookline Bancorp and its employees continue to execute on our strategy of high performance for both our customers and our stockholders."

BALANCE SHEET

Total assets at June 30, 2019 increased $117.9 million to $7.6 billion from $7.5 billion at March 31, 2019, and increased $351.3 million from $7.3 billion at June 30, 2018, primarily driven by growth in the loan portfolio. At June 30, 2019, total loans and leases were $6.5 billion, representing an increase of $117.1 million from March 31, 2019, and an increase of $334.1 million from June 30, 2018, primarily driven by growth in the commercial real estate portfolio.

In the second quarter the Company continued to redirect cash flows from the investment portfolio to fund loan demand. Investment securities at June 30, 2019 decreased $16.3 million to $590.8 million, comprising 7.74 percent of total assets, as compared to $607.1 million, or 8.07 percent of total assets, at March 31, 2019, and decreased approximately $84.5 million from $675.3 million, or 9.27 percent of total assets, at June 30, 2018.

Total deposits at June 30, 2019 increased $1.9 million from March 31, 2019 to $5.6 billion and increased $424.2 million from $5.2 billion at June 30, 2018 driven primarily by growth in certificates of deposit.

Total borrowed funds at June 30, 2019 increased $64.8 million to $930.8 million from $866.0 million at March 31, 2019 and decreased $180.2 million from $1.1 billion at June 30, 2018.

The ratio of stockholders’ equity to total assets was 12.03 percent at June 30, 2019, as compared to 11.98 percent at March 31, 2019, and 12.04 percent at June 30, 2018. The ratio of tangible stockholders’ equity to tangible assets was 10.08 percent at June 30, 2019, as compared to 9.99 percent at March 31, 2019, and 9.97 percent at June 30, 2018. Tangible book value per share increased $0.23 from $9.22 at March 31, 2019 to $9.45 at June 30, 2019, compared to $8.85 at June 30, 2018.

NET INTEREST INCOME

Net interest income increased $0.1 million to $63.1 million during the second quarter of 2019 from $63.0 million at the quarter ended March 31, 2019. The net interest margin decreased 9 basis points to 3.55 percent for the three months ended June 30, 2019.

NON-INTEREST INCOME

Non-interest income for the quarter ended June 30, 2019 increased $0.9 million to $7.5 million from $6.6 million for the quarter ended March 31, 2019. The increase was primarily driven by increases of $0.2 million in deposit fees, $0.2 million in gain on securities, $0.3 million in gain on sales of loans and leases, and $0.2 million in other non-interest income.

PROVISION FOR CREDIT LOSSES

The Company recorded a provision for credit losses of $3.8 million for the quarter ended June 30, 2019, compared to $1.4 million for the quarter ended March 31, 2019. The higher provision for credit losses is a result of strong loan growth and net higher charge-offs during the quarter.

Total net charge-offs for the second quarter of 2019 were $3.1 million compared to $2.1 million in the first quarter of 2019. The $3.1 million in net charge-offs had previously established specific reserves of $1.0 million versus first quarter net charge-offs of $2.1 million which had previously established reserves of $1.0 million. The ratio of net loan and lease charge-offs to average loans and leases on an annualized basis increased to 19 basis points for the second quarter of 2019 from 13 basis points for the first quarter of 2019.

The allowance for loan and lease losses represented 0.90 percent of total loans and leases at June 30, 2019, compared to 0.91 percent at March 31, 2019, and 0.94 percent at June 30, 2018. The allowance for loan and lease losses related to originated loans and leases represented 0.92 percent of originated loans and leases at June 30, 2019, compared to 0.93 percent at March 31, 2019, and 0.98 percent at June 30, 2018.

NON-INTEREST EXPENSE

Non-interest expense for the quarter ended June 30, 2019 increased $0.7 million to $39.6 million from $38.9 million for the quarter ended March 31, 2019. The increase was primarily driven by increases of $0.2 million in compensation and employee benefits expense, $0.2 million in FDIC insurance, and $0.5 million in other non-interest expense, partially offset by a decrease of $0.2 million in occupancy expense.

PROVISION FOR INCOME TAXES

The effective tax rate was 24.9 percent and 24.1 percent for the three and six months ended June 30, 2019 compared to 23.4 percent for the three months ended March 31, 2019.

RETURNS ON AVERAGE ASSETS AND AVERAGE EQUITY

The annualized return on average assets decreased to 1.08 percent during the second quarter of 2019 from 1.21 percent for the first quarter of 2019. The annualized return on average tangible assets decreased to 1.11 percent for the second quarter of 2019 from 1.24 percent for the first quarter of 2019.

The annualized return on average stockholders' equity decreased to 8.98 percent during the second quarter of 2019 from 10.14 percent for the first quarter of 2019. The annualized return on average tangible stockholders’ equity decreased to 10.98 percent for the second quarter of 2019 from 12.48 percent for the first quarter of 2019.

ASSET QUALITY

The ratio of nonperforming loans and leases to total loans and leases was 0.33 percent at June 30, 2019 as compared to 0.36 percent at March 31, 2019. Nonperforming loans and leases decreased $1.5 million to $21.3 million at June 30, 2019 from $22.8 million at March 31, 2019. The ratio of nonperforming assets to total assets was 0.30 percent at June 30, 2019 as compared to 0.36 percent at March 31, 2019. Nonperforming assets decreased $3.4 million to $23.3 million at June 30, 2019 from $26.7 million at March 31, 2019.

DIVIDEND DECLARED

The Company’s Board of Directors approved a dividend of $0.11 per share for the quarter ended June 30, 2019. The dividend will be paid on August 23, 2019 to stockholders of record on August 9, 2019.

CONFERENCE CALL

The Company will conduct a conference call/webcast at 1:30 PM Eastern Daylight Time on Thursday, July 25, 2019 to discuss the results for the quarter, business highlights and outlook. The call can be accessed by dialing 877-504-4120 (United States) or 412-902-6650 (internationally).  A recorded playback of the call will be available for one week following the call at 877-344-7529 (United States) or 412-317-0088 (internationally). The passcode for the playback is 10132476. The call will be available live and in a recorded version on the Company’s website under “Investor Relations” at www.brooklinebancorp.com.

ABOUT BROOKLINE BANCORP, INC.

Brookline Bancorp, Inc., a bank holding company with $7.6 billion in assets and branch locations in Massachusetts and Rhode Island, is headquartered in Boston, Massachusetts and operates as the holding company for Brookline Bank, Bank Rhode Island, and First Ipswich Bank (the "banks"). The Company provides commercial and retail banking services, cash management and investment services to customers throughout Central New England. More information about Brookline Bancorp, Inc. and its banks can be found at the following websites: www.brooklinebank.com, www.bankri.com, and www.firstipswich.com.

FORWARD-LOOKING STATEMENTS

Certain statements contained in this press release that are not historical facts may constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and are intended to be covered by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve risks and uncertainties. The Company’s actual results could differ materially from those projected in the forward-looking statements as a result of, among others, the risks outlined in the Company’s Annual Report on Form 10-K, as updated by its Quarterly Reports on Form 10-Q and other filings submitted to the Securities and Exchange Commission ("SEC"). The Company does not undertake any obligation to update any forward-looking statement to reflect circumstances or events that occur after the date the forward-looking statements are made.

BASIS OF PRESENTATION

The Company's consolidated financial statements have been prepared in conformity with generally accepted accounting principles (“GAAP”) as set forth by the Financial Accounting Standards Board in its Accounting Standards Codification and through the rules and interpretive releases of the SEC under the authority of federal securities laws. Certain amounts previously reported have been reclassified to conform to the current period's presentation.

NON-GAAP FINANCIAL MEASURES

The Company uses certain non-GAAP financial measures, such as operating earnings, operating return on average assets, operating return on average tangible assets, operating return on average stockholders' equity, operating return on average tangible stockholders' equity, the allowance for loan and lease losses related to originated loans and leases as a percentage of originated loans and leases, tangible book value per common share, tangible stockholders’ equity to tangible assets, return on average tangible assets (annualized) and return on average tangible stockholders' equity (annualized). These non-GAAP financial measures provide information for investors to effectively analyze financial trends of ongoing business activities, and to enhance comparability with peers across the financial services sector. A detailed reconciliation table of the Company's GAAP to the non-GAAP measures is attached.

Contact: Carl M. CarlsonBrookline Bancorp, Inc.Chief Financial Officer(617) 425-5331ccarlson@brkl.com

BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Selected Financial Highlights (Unaudited)
 
 At and for the Three Months Ended
 June 30, 2019 March 31, 2019 December 31, 2018 September 30, 2018 June 30, 2018
 (Dollars In Thousands Except per Share Data)
Earnings Data:         
Net interest income$  63,134   $  62,999   $  63,159   $  62,332   $  62,717  
Provision for credit losses  3,757     1,353     123     2,717     1,470  
Non-interest income  7,478     6,630     6,461     7,069     5,526  
Non-interest expense  39,604     38,871     40,282     37,310     37,702  
Income before provision for income taxes  27,251     29,405     29,215     29,374     29,071  
Net income attributable to Brookline Bancorp, Inc.  20,471     22,467     21,138     22,460     20,831  
          
Performance Ratios:         
Net interest margin (1) 3.55%  3.64%  3.58%  3.57%  3.64%
Interest-rate spread (1) 3.13%  3.18%  3.25%  3.27%  3.36%
Return on average assets (annualized) 1.08%  1.21%  1.15%  1.23%  1.15%
Return on average tangible assets (annualized) (non-GAAP) 1.11%  1.24%  1.17%  1.26%  1.17%
Return on average stockholders' equity (annualized) 8.98%  10.14%  9.40%  10.10%  9.53%
Return on average tangible stockholders' equity (annualized) (non-GAAP) 10.98%  12.48%  11.54%  12.44%  11.80%
Efficiency ratio (2) 56.09%  55.83%  57.86%  53.76%  55.25%
          
Per Common Share Data:         
Net income — Basic$  0.26   $  0.28   $  0.26   $  0.28   $  0.26  
Net income — Diluted  0.26     0.28     0.26     0.28     0.26  
Cash dividends declared  0.110     0.110     0.105     0.105     0.100  
Book value per share (end of period)  11.53     11.30     11.30     11.08     10.94  
Tangible book value per share (end of period) (non-GAAP)  9.45     9.22     9.21     9.00     8.85  
Stock price (end of period)  15.38     14.40     13.82     16.70     18.60  
 
Balance Sheet:         
Total assets$  7,636,980   $  7,519,130   $  7,392,805   $  7,320,596   $  7,285,710  
Total loans and leases  6,505,329     6,388,197     6,303,516     6,227,707     6,171,274  
Total deposits  5,622,493     5,620,633     5,454,044     5,233,611     5,198,280  
Brookline Bancorp, Inc. stockholders’ equity  918,468     900,572     900,140     890,368     877,283  
          
Asset Quality:         
Nonperforming assets$  23,267   $  26,721   $  28,116   $  29,718   $  30,145  
Nonperforming assets as a percentage of total assets 0.30%  0.36%  0.38%  0.41%  0.41%
Allowance for loan and lease losses$  58,635   $  58,041   $  58,692   $  59,997   $  57,981  
Allowance for loan and lease losses as a percentage of total loans and leases 0.90%  0.91%  0.93%  0.96%  0.94%
Net loan and lease charge-offs$  3,082   $  2,101   $  1,252   $  564   $  2,330  
Net loan and lease charge-offs as a percentage of average loans and leases (annualized) 0.19%  0.13%  0.08%  0.04%  0.15%
          
Capital Ratios:         
Stockholders’ equity to total assets 12.03%  11.98%  12.18%  12.16%  12.04%
Tangible stockholders’ equity to tangible assets (non-GAAP) 10.08%  9.99%  10.15%  10.11%  9.97%
          
(1) Calculated on a fully tax-equivalent basis.         
(2) Calculated as non-interest expense as a percentage of net interest income plus non-interest income.         
 

 

BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Consolidated Balance Sheets (Unaudited)
 June 30, 2019 March 31, 2019 December 31, 2018 September 30, 2018 June 30, 2018
ASSETS(In Thousands Except Share Data)
Cash and due from banks$  46,532   $  51,276   $  47,542   $  30,762   $  32,724  
Short-term investments  46,264     61,063     42,042     23,114     22,754  
Total cash and cash equivalents  92,796     112,339     89,584     53,876     55,478  
Investment securities available-for-sale  482,497     489,020     502,793     534,788     558,602  
Investment securities held-to-maturity  103,572     113,694     114,776     115,684     116,670  
Equity securities held-for-trading  4,698     4,341     4,207     4,169     — 
Total investment securities  590,767     607,055     621,776     654,641     675,272  
Loans and leases held-for-sale  1,575     869     3,247     937     1,034  
Loans and leases:         
Commercial real estate loans:         
Commercial real estate mortgage  2,421,104     2,355,507     2,330,725     2,287,979     2,269,520  
Multi-family mortgage  877,330     855,703     847,711     828,849     816,311  
Construction  195,120     199,258     173,300     164,217     178,335  
Total commercial real estate loans  3,493,554     3,410,468     3,351,736     3,281,045     3,264,166  
Commercial loans and leases:         
Commercial  763,145     741,577     736,418     771,200     761,964  
Equipment financing  1,015,205     995,863     982,089     954,579     920,643  
Condominium association  47,986     49,142     50,451     52,205     53,537  
Total commercial loans and leases  1,826,336     1,786,582     1,768,958     1,777,984     1,736,144  
Consumer loans:         
Residential mortgage  769,983     775,578     782,968     759,167     754,818  
Home equity  374,746     376,126     376,484     380,303     382,597  
Other consumer  40,710     39,443     23,370     29,208     33,549  
Total consumer loans  1,185,439     1,191,147     1,182,822     1,168,678     1,170,964  
Total loans and leases  6,505,329     6,388,197     6,303,516     6,227,707     6,171,274  
Allowance for loan and lease losses  (58,635)   (58,041)   (58,692)   (59,997)   (57,981)
Net loans and leases  6,446,694     6,330,156     6,244,824     6,167,710     6,113,293  
Restricted equity securities  55,270     54,192     61,751     63,963     68,343  
Premises and equipment, net of accumulated depreciation  75,373     75,520     76,382     77,886     79,194  
Right-of-use asset operating leases  25,928     26,205     —    —    — 
Deferred tax asset  25,629     27,084     21,495     22,249     20,826  
Goodwill  160,427     160,427     160,427     160,427     160,427  
Identified intangible assets, net of accumulated amortization  5,264     5,684     6,086     6,623     7,160  
Other real estate owned and repossessed assets  1,966     3,912     4,019     3,934     4,352  
Other assets  155,291     115,687     103,214     108,350     100,331  
Total assets$  7,636,980   $  7,519,130   $  7,392,805   $  7,320,596   $  7,285,710  
LIABILITIES AND STOCKHOLDERS' EQUITY         
Deposits:         
Non-interest-bearing deposits:         
Demand checking accounts$  1,042,854   $  1,011,031   $  1,033,551   $  1,017,234   $  1,002,954  
Interest-bearing deposits:         
NOW accounts  340,082     369,896     336,317     322,587     346,936  
Savings accounts  585,322     625,770     619,961     612,210     603,079  
Money market accounts  1,669,782     1,706,708     1,675,050     1,623,220     1,704,652  
Certificate of deposit accounts  1,984,453     1,907,228     1,789,165     1,658,360     1,540,659  
Total interest-bearing deposits  4,579,639     4,609,602     4,420,493     4,216,377     4,195,326  
Total deposits  5,622,493     5,620,633     5,454,044     5,233,611     5,198,280  
Borrowed funds:         
Advances from the FHLBB  791,559     730,018     784,375     959,446     991,091  
Subordinated debentures and notes  83,512     83,472     83,433     83,392     83,352  
Other borrowed funds  55,693     52,515     52,734     40,048     36,480  
Total borrowed funds  930,764     866,005     920,542     1,082,886     1,110,923  
Operating lease liabilities  25,928     26,205     —    —    — 
Mortgagors’ escrow accounts  6,823     7,517     7,426     8,227     8,122  
Accrued expenses and other liabilities  132,504     98,198     100,174     96,047     82,017  
Total liabilities  6,718,512     6,618,558     6,482,186     6,420,771     6,399,342  
Stockholders' equity:         
Brookline Bancorp, Inc. stockholders’ equity:         
Common stock, $0.01 par value; 200,000,000 shares authorized; 85,177,172 shares issued, 85,177,172 shares issued, 85,177,172 shares issued, 85,177,172 shares issued, and 85,177,172 shares issued, respectively  852     852     852     852     852  
Additional paid-in capital  737,584     736,872     755,629     753,941     756,254  
Retained earnings, partially restricted  238,625     226,929     212,838     200,151     185,734  
Accumulated other comprehensive loss  1,141     (4,393)   (9,460)   (15,599)   (13,415)
Treasury stock, at cost;         
5,025,764 shares, 5,020,025 shares, 5,020,025 shares, 4,291,317 shares, and 4,409,501 shares, respectively  (59,199)   (59,121)   (59,120)   (48,334)   (51,454)
Unallocated common stock held by the Employee Stock Ownership Plan;         
98,208 shares, 104,079 shares, 109,950 shares,118,050 shares, and 126,144 shares, respectively  (535)   (567)   (599)   (643)   (688)
Total Brookline Bancorp, Inc. stockholders’ equity  918,468     900,572     900,140     890,368     877,283  
Noncontrolling interest in subsidiary  —    —    10,479     9,457     9,085  
Total stockholders' equity  918,468     900,572     910,619     899,825     886,368  
Total liabilities and stockholders' equity$  7,636,980   $  7,519,130   $  7,392,805   $  7,320,596   $  7,285,710  

 

BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Consolidated Statements of Income (Unaudited)
 Three Months Ended
 June 30, 2019 March 31, 2019 December 31, 2018 September 30, 2018 June 30, 2018
 (In Thousands Except Share Data)
Interest and dividend income:         
Loans and leases$  82,798  $  80,672  $  78,791   $  75,877   $  73,329 
Debt securities  3,158    3,236    3,489     3,585     3,563 
Marketable and restricted equity securities  877    911    1,008     1,029     1,003 
Short-term investments  351    267    256     145     179 
Total interest and dividend income  87,184    85,086    83,544     80,636     78,074 
Interest expense:         
Deposits  17,712    15,948    13,744     11,916     9,219 
Borrowed funds  6,338    6,139    6,641     6,388     6,138 
Total interest expense  24,050    22,087    20,385     18,304     15,357 
Net interest income  63,134    62,999    63,159     62,332     62,717 
Provision for credit losses  3,757    1,353    123     2,717     1,470 
Net interest income after provision for credit losses  59,377    61,646    63,036     59,615     61,247 
Non-interest income:         
Deposit fees  2,680    2,523    2,669     2,648     2,620 
Loan fees  398    413    390     417     330 
Loan level derivative income, net  1,772    1,745    1,811     2,192     571 
Gain (loss) on investment securities, net  357    134    (692)   (243)   —
Gain on sales of loans and leases held-for-sale  561    289    327     535     722 
Other  1,710    1,526    1,956     1,520     1,283 
Total non-interest income  7,478    6,630    6,461     7,069     5,526 
Non-interest expense:         
Compensation and employee benefits  23,953    23,743    24,413     22,338     22,565 
Occupancy  3,752    3,947    3,240     3,913     3,879 
Equipment and data processing  4,641    4,661    4,626     4,601     4,368 
Professional services  1,087    1,076    1,130     1,075     1,055 
FDIC insurance  745    593    727     846     514 
Advertising and marketing  1,112    1,069    773     1,068     1,118 
Amortization of identified intangible assets  420    402    537     537     539 
Merger and acquisition expense  —   —   526     22     334 
Other  3,894    3,380    4,310     2,910     3,330 
Total non-interest expense  39,604    38,871    40,282     37,310     37,702 
Income before provision for income taxes  27,251    29,405    29,215     29,374     29,071 
Provision for income taxes  6,780    6,895    7,055     6,140     7,342 
Net income before noncontrolling interest in subsidiary  20,471    22,510    22,160     23,234     21,729 
Less net income attributable to noncontrolling interest in subsidiary  —   43    1,022     774     898 
Net income attributable to Brookline Bancorp, Inc.$  20,471  $  22,467  $  21,138   $  22,460   $  20,831 
Earnings per common share:         
Basic$  0.26  $  0.28  $  0.26   $  0.28   $  0.26 
Diluted$  0.26  $  0.28  $  0.26   $  0.28   $  0.26 
Weighted average common shares outstanding during the period:        
Basic  79,669,922    79,658,583    80,258,456     80,315,050     80,184,977 
Diluted  79,886,292    79,843,578    80,407,525     80,515,467     80,505,614 
Dividends paid per common share$  0.110  $  0.105  $  0.105   $  0.100   $  0.100 
 

 

BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Consolidated Statements of Income (Unaudited)
  
 Six Months Ended June 30,
  2019  2018
 (In Thousands Except Share Data)
Interest and dividend income:   
Loans and leases$  163,470  $  140,601 
Debt securities  6,394    6,886 
Marketable and restricted equity securities  1,788    1,927 
Short-term investments  618    299 
Total interest and dividend income  172,270    149,713 
Interest expense:   
Deposits  33,660    16,318 
Borrowed funds  12,477    11,187 
Total interest expense  46,137    27,505 
Net interest income  126,133   122,208
Provision for credit losses  5,110   2,111
Net interest income after provision for credit losses  121,023   120,097
Non-interest income:   
Deposit Fees  5,203    5,083 
Loan Fees  811    620 
Loan level derivative income, net  3,517    1,437 
Gain on investment securities, net  491    1,162 
Gain on sales of loans and leases held-for-sale  850    1,021 
Other  3,236    2,371 
Total non-interest income  14,108    11,694 
Non-interest expense:   
Compensation and employee benefits  47,696    44,879 
Occupancy  7,699    7,838 
Equipment and data processing  9,302    8,986 
Professional services  2,163    2,199 
FDIC insurance  1,338    1,149 
Advertising and marketing  2,181    2,175 
Amortization of identified intangible assets  822    1,006 
Merger and acquisition expense  —   3,239 
Other  7,274    6,169 
Total non-interest expense  78,475    77,640 
Income before provision for income taxes  56,656    54,151 
Provision for income taxes  13,675    12,994 
Net income before noncontrolling interest in subsidiary  42,981    41,157 
Less net income attributable to noncontrolling interest in subsidiary  43    1,693 
Net income attributable to Brookline Bancorp, Inc.$  42,938  $  39,464 
Earnings per common share:   
Basic$  0.54  $  0.50 
Diluted$  0.54  $  0.50 
Weighted average common shares outstanding during the period:  
Basic  79,664,284    79,038,041 
Diluted  79,859,572    79,342,463 
Dividends paid per common share$  0.215  $  0.190 
 

 

BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Asset Quality Analysis (Unaudited)
 At and for the Three Months Ended
 June 30, 2019 March 31, 2019 December 31, 2018 September 30, 2018 June 30, 2018
 (Dollars in Thousands)
NONPERFORMING ASSETS:         
Loans and leases accounted for on a nonaccrual basis:         
Commercial real estate mortgage$  2,273   $  2,889   $  3,928   $  3,369   $  3,774  
Multi-family mortgage  94     101     330     357     568  
Construction  —    396     396     640     640  
Total commercial real estate loans  2,367     3,386     4,654     4,366     4,982  
          
Commercial  6,349     5,728     6,621     7,862     9,487  
Equipment financing  9,931     10,253     9,500     9,659     8,825  
Condominium association  170     224     265     295     — 
Total commercial loans and leases  16,450     16,205     16,386     17,816     18,312  
          
Residential mortgage  1,642     2,188     2,132     2,538     1,571  
Home equity  835     1,022     908     1,053     923  
Other consumer  7     8     17     11     5  
Total consumer loans  2,484     3,218     3,057     3,602     2,499  
          
Total nonaccrual loans and leases  21,301     22,809     24,097     25,784     25,793  
          
Other real estate owned  957     3,054     3,054     3,136     3,436  
Other repossessed assets  1,009     858     965     798     916  
Total nonperforming assets$  23,267   $  26,721   $  28,116   $  29,718   $  30,145  
          
Loans and leases past due greater than 90 days and still accruing$  11,612   $  16,800   $  13,482   $  14,954   $  12,340  
          
Troubled debt restructurings on accrual  27,761     28,543     12,257     12,657     12,911  
Troubled debt restructurings on nonaccrual  8,431     7,597     8,684     8,779     9,391  
Total troubled debt restructurings$  36,192   $  36,140   $  20,941   $  21,436   $  22,302  
          
Nonperforming loans and leases as a percentage of total loans and leases 0.33%  0.36%  0.38%  0.41%  0.42%
Nonperforming assets as a percentage of total assets 0.30%  0.36%  0.38%  0.41%  0.41%
          
PROVISION AND ALLOWANCE FOR LOAN AND LEASE LOSSES:      
Allowance for loan and lease losses at beginning of period$  58,041   $  58,692   $  59,997   $  57,981   $  58,714  
Charge-offs  (3,412)   (2,542)   (1,604)   (1,227)   (3,605)
Recoveries  330     441     352     663     1,275  
Net charge-offs  (3,082)   (2,101)   (1,252)   (564)   (2,330)
Provision for loan and lease losses  3,676     1,450     (53)   2,580     1,597  
Allowance for loan and lease losses at end of period$  58,635   $  58,041   $  58,692   $  59,997   $  57,981  
          
Allowance for loan and lease losses as a percentage of total loans and leases 0.90%  0.91%  0.93%  0.96%  0.94%
Allowance for loan and lease losses related to originated loans and leases as a percentage of originated loans and leases (non-GAAP) 0.92%  0.93%  0.96%  1.00%  0.98%
          
NET CHARGE-OFFS:         
Commercial real estate loans$  —  $  —  $  —  $  —  $  100  
Commercial loans and leases  3,107     2,124     883     579     2,304  
Consumer loans  (25)   (23)   369     (15)   (74)
Total net charge-offs$  3,082   $  2,101   $  1,252   $  564   $  2,330  
          
Net loan and lease charge-offs as a percentage of average loans and leases (annualized) 0.19%  0.13%  0.08%  0.04%  0.15%
          
 

 

BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Average Yields / Costs (Unaudited)
 Three Months Ended
 June 30, 2019 March 31, 2019 June 30, 2018
 Average Balance Interest (1) Average Yield/ Cost Average Balance Interest (1) Average Yield/ Cost Average Balance Interest (1) Average Yield/ Cost
 (Dollars in Thousands)
Assets:                 
Interest-earning assets:                 
Investments:                 
Debt securities (2)$  593,404   $  3,210  2.16% $  608,194   $  3,289  2.16% $  666,182   $  3,617  2.17%
Marketable and restricted equity securities (2)  59,224     888  5.99%   60,389     920  6.10%   69,395     1,004  5.78%
Short-term investments  44,634     351  3.14%   33,034     267  3.23%   41,155     179  1.74%
Total investments  697,262     4,449  2.55%   701,617     4,476  2.55%   776,732     4,800  2.47%
Loans and Leases:                 
Commercial real estate loans (3)  3,447,136     41,363  4.75%   3,376,576     40,019  4.74%   3,250,488     36,372  4.43%
Commercial loans (3)  811,890     9,879  4.82%   792,695     9,603  4.85%   823,860     9,323  4.48%
Equipment financing (3)  1,005,376     18,291  7.28%   988,193     17,985  7.28%   907,089     15,739  6.94%
Residential mortgage loans (3)  774,533     8,186  4.23%   778,325     8,123  4.17%   759,866     7,552  3.98%
Other consumer loans (3)  417,600     5,187  4.97%   408,177     5,051  5.01%   406,144     4,464  4.40%
Total loans and leases  6,456,535     82,906  5.14%   6,343,966     80,781  5.09%   6,147,447     73,450  4.78%
Total interest-earning assets  7,153,797     87,355  4.88%   7,045,583     85,257  4.84%   6,924,179     78,250  4.52%
Allowance for loan and lease losses  (58,137)       (58,749)       (59,247)    
Non-interest-earning assets  475,736         447,204         408,861      
Total assets$  7,571,396       $  7,434,038       $  7,273,793      
                  
Liabilities and Stockholders' Equity:                 
Interest-bearing liabilities:                 
Deposits:                 
NOW accounts$  343,745     50  0.06% $  334,167     142  0.17% $  346,410     65  0.07%
Savings accounts  602,333     737  0.49%   626,414     597  0.39%   609,758     405  0.27%
Money market accounts  1,683,735     5,571  1.33%   1,676,199     5,275  1.28%   1,767,509     3,530  0.80%
Certificates of deposit  1,950,704     11,354  2.33%   1,844,511     9,934  2.18%   1,422,782     5,219  1.47%
Total interest-bearing deposits  4,580,517     17,712  1.55%   4,481,291     15,948  1.44%   4,146,459     9,219  0.89%
Borrowings                 
Advances from the FHLBB  761,651     4,825  2.51%   755,542     4,610  2.44%   1,018,130     4,696  1.82%
Subordinated debentures and notes  83,490     1,305  6.25%   83,451     1,308  6.27%   83,330     1,296  6.22%
Other borrowed funds  84,600     208  0.99%   88,600     221  1.01%   46,635     146  1.26%
Total borrowings  929,741     6,338  2.70%   927,593     6,139  2.65%   1,148,095     6,138  2.11%
Total interest-bearing liabilities  5,510,258     24,050  1.75%   5,408,884     22,087  1.66%   5,294,554     15,357  1.16%
Non-interest-bearing liabilities:                 
Demand checking accounts  1,015,524         1,026,970         1,003,985      
Other non-interest-bearing liabilities  133,790         111,174         91,889      
Total liabilities  6,659,572         6,547,028         6,390,428      
Brookline Bancorp, Inc. stockholders’ equity  911,824         886,639         874,513      
Noncontrolling interest in subsidiary  —        371         8,852      
Total liabilities and equity$  7,571,396       $  7,434,038       $  7,273,793      
Net interest income (tax-equivalent basis) /Interest-rate spread (4)    63,305  3.13%     63,170  3.18%     62,893  3.36%
Less adjustment of tax-exempt income    171        171        176   
Net interest income  $  63,134      $  62,999      $  62,717   
Net interest margin (5)    3.55%     3.64%     3.64%
                  
(1) Tax-exempt income on debt securities, equity securities and revenue bonds included in commercial real estate loans is included on a tax-equivalent basis.
(2) Average balances include unrealized gains (losses) on investment securities. Dividend payments may not be consistent and average yield on equity securities may vary from month to month.
(3) Loans on nonaccrual status are included in the average balances.
(4) Interest rate spread represents the difference between the yield on interest-earning assets and the cost of interest-bearing liabilities.
(5) Net interest margin represents net interest income (tax-equivalent basis) divided by average interest-earning assets on an actual/actual basis.
 

 

BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Average Yields / Costs (Unaudited)
 Six Months Ended
 June 30, 2019 June 30, 2018
 Average Balance Interest (1) Average Yield/ Cost Average Balance Interest (1) Average Yield/ Cost
 (Dollars in Thousands)
Assets:           
Interest-earning assets:           
Investments:           
Debt securities (2)$  600,758   $  6,499  2.16% $  656,893   $  6,994  2.13%
Marketable and restricted equity securities (2)  59,803     1,808  6.05%   66,774     1,927  5.77%
Short-term investments  38,866     618  3.18%   35,938     299  1.67%
Total investments  699,427     8,925  2.55%   759,605     9,220  2.43%
Loans and Leases:           
Commercial real estate loans (3)  3,412,051     81,382  4.74%   3,183,959     69,801  4.36%
Commercial loans (3)  802,346     19,482  4.83%   805,002     17,747  4.39%
Equipment financing (3)  996,832     36,276  7.28%   891,284     30,603  6.87%
Residential mortgage loans (3)  776,419     16,309  4.20%   732,418     14,285  3.90%
Other consumer loans (3)  412,914     10,238  4.99%   394,235     8,405  4.29%
Total loans and leases  6,400,562     163,687  5.11%   6,006,898     140,841  4.69%
Total interest-earning assets  7,099,989     172,612  4.86%   6,766,503     150,061  4.44%
Allowance for loan and lease losses  (58,441)       (59,117)    
Non-interest-earning assets  461,548         394,124      
Total assets$  7,503,096       $  7,101,510      
            
Liabilities and Stockholders' Equity:           
Interest-bearing liabilities:           
Deposits:           
NOW accounts$  338,983     192  0.11% $  341,228     123  0.07%
Savings accounts  614,307     1,334  0.44%   629,382     806  0.26%
Money market accounts  1,679,988     10,846  1.30%   1,769,923     6,088  0.69%
Certificates of deposit  1,897,901     21,288  2.26%   1,335,401     9,301  1.40%
Total interest-bearing deposits  4,531,179     33,660  1.50%   4,075,934     16,318  0.81%
Borrowings           
Advances from the FHLBB  758,613     9,435  2.47%   987,385     8,444  1.70%
Subordinated debentures and notes  83,471     2,613  6.26%   83,310     2,578  6.19%
Other borrowed funds  86,589     429  1.00%   41,420     165  0.80%
Total borrowings  928,673     12,477  2.67%   1,112,115     11,187  2.00%
Total interest-bearing liabilities  5,459,852     46,137  1.70%   5,188,049     27,505  1.07%
Non-interest-bearing liabilities:           
Demand checking accounts  1,021,215         968,035      
Other non-interest-bearing liabilities  122,544         84,570      
Total liabilities  6,603,611         6,240,654      
Brookline Bancorp, Inc. stockholders’ equity  899,301         852,180      
Noncontrolling interest in subsidiary  184         8,676      
Total liabilities and equity$  7,503,096       $  7,101,510      
Net interest income (tax-equivalent basis) /Interest-rate spread (4)    126,475  3.16%     122,556  3.37%
Less adjustment of tax-exempt income    342        348   
Net interest income  $  126,133      $  122,208   
Net interest margin (5)    3.59%     3.65%
            
(1) Tax-exempt income on debt securities, equity securities and revenue bonds included in commercial real estate loans is included on a tax-equivalent basis.
(2) Average balances include unrealized gains (losses) on investment securities. Dividend payments may not be consistent and average yield on equity securities may vary from month to month.
(3) Loans on nonaccrual status are included in the average balances.
(4) Interest rate spread represents the difference between the yield on interest-earning assets and the cost of interest-bearing liabilities.
(5) Net interest margin represents net interest income (tax-equivalent basis) divided by average interest-earning assets on an actual/actual basis.
 

 

BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Non-GAAP Financial Information (Unaudited)
   At and for the Three Months Ended  June 30, At and for the Six Months Ended   June 30,
    2019   2018   2019   2018 
Reconciliation Table - Non-GAAP Financial Information (Dollars in Thousands Except Share Data)
       
Net income attributable to Brookline Bancorp, Inc. $  20,471   $  20,831   $  42,938   $  39,464  
Less:         
Security gains (after-tax)   268     —    373     883  
Add:         
Merger and acquisition-related expenses (after-tax)   —    254     —    2,462  
Operating earnings $  20,203   $  21,085   $  42,565   $  41,043  
        
Operating earnings per common share:       
Basic  $  0.25   $  0.26   $  0.53   $  0.52  
Diluted    0.25     0.26     0.53     0.52  
        
Weighted average common shares outstanding during the period:      
Basic    79,669,922     80,184,977     79,664,284     79,038,041  
Diluted    79,886,292     80,505,614     79,859,572     79,342,463  
          
          
Return on average assets *  1.08%  1.15%  1.14%  1.11%
Less:         
Security gains (after-tax) *  0.01%  %  0.01%  0.02%
Add:         
Merger and acquisition-related expenses (after-tax) *  %  0.01%  %  0.07%
Operating return on average assets *  1.07%  1.16%  1.13%  1.16%
          
          
Return on average tangible assets *  1.11%  1.17%  1.17%  1.14%
Less:         
Security gains (after-tax) *  0.02%  %  0.01%  0.03%
Add:         
Merger and acquisition-related expenses (after-tax) *  %  0.02%  %  0.07%
Operating return on average tangible assets *  1.09%  1.19%  1.16%  1.18%
          
          
Return on average stockholders' equity *  8.98%  9.53%  9.55%  9.26%
Less:         
Security gains (after-tax) *  0.12%  %  0.08%  0.21%
Add:         
Merger and acquisition-related expenses (after-tax) *  %  0.11%  %  0.58%
Operating return on average stockholders' equity *  8.86%  9.64%  9.47%  9.63%
          
          
Return on average tangible stockholders' equity *  10.98%  11.80%  11.71%  11.41%
Less:         
Security gains (after-tax) *  0.15%  %  0.10%  0.26%
Add:         
Merger and acquisition-related expenses (after-tax) *  %  0.14%  %  0.71%
Operating return on average tangible stockholders' equity *  10.83%  11.94%  11.61%  11.86%
         
* Ratios at and for the three and six months ended are annualized.       
          
          
          
 At and for the Three Months Ended
 June 30, 2019 March 31, 2019 December 31, 2018 September 30, 2018 June 30, 2018
 (Dollars in Thousands)
          
Net income, as reported$  20,471   $  22,467   $  21,138   $  22,460   $  20,831  
          
Average total assets$  7,571,396   $  7,434,038   $  7,382,931   $  7,302,413   $  7,273,793  
Less: Average goodwill and average identified intangible assets, net  165,914    166,327    166,777    167,313    168,185 
Average tangible assets$  7,405,482   $  7,267,711   $  7,216,154   $  7,135,100   $  7,105,608  
          
Return on average tangible assets (annualized) 1.11 %  1.24 %  1.17 %  1.26 %  1.17 %
          
Average total stockholders’ equity$  911,824   $  886,639   $  899,244   $  889,259   $  874,513  
Less: Average goodwill and average identified intangible assets, net  165,914    166,327    166,777    167,313    168,185 
Average tangible stockholders’ equity$  745,910   $  720,312   $  732,467   $  721,946   $  706,328  
          
Return on average tangible stockholders’ equity (annualized) 10.98 %  12.48 %  11.54 %  12.44 %  11.80 %
          
Brookline Bancorp, Inc. stockholders’ equity$  918,468   $  900,572   $  900,140   $  890,368   $  877,283  
Less:         
Goodwill  160,427     160,427     160,427     160,427     160,427  
Identified intangible assets, net  5,264     5,684     6,086     6,623     7,160  
Tangible stockholders' equity$  752,777   $  734,461   $  733,627   $  723,318   $  709,696  
          
Total assets$  7,636,980   $  7,519,130   $  7,392,805   $  7,320,596   $  7,285,710  
Less:         
Goodwill  160,427     160,427     160,427     160,427     160,427  
Identified intangible assets, net  5,264     5,684     6,086     6,623     7,160  
Tangible assets$  7,471,289   $  7,353,019   $  7,226,292   $  7,153,546   $  7,118,123  
          
Tangible stockholders’ equity to tangible assets 10.08 %  9.99 %  10.15 %  10.11 %  9.97 %
          
Tangible stockholders' equity$  752,777   $  734,461   $  733,627   $  723,318   $  709,696  
          
Number of common shares issued  85,177,172     85,177,172     85,177,172     85,177,172     85,177,172  
Less:         
Treasury shares  5,025,764     5,020,025     5,020,025     4,291,317     4,409,501  
Unallocated ESOP shares  98,208     104,079     109,950     118,050     126,144  
Unvested restricted shares  377,122     390,636     393,636     398,094     455,283  
Number of common shares outstanding  79,676,078     79,662,432     79,653,561     80,369,711     80,186,244  
          
Tangible book value per common share$   9.45    $   9.22    $   9.21    $   9.00    $   8.85   
          
Allowance for loan and lease losses$  58,635   $  58,041   $  58,692   $  59,997   $  57,981  
Less:         
Allowance for acquired loans and leases losses  1,857     1,795     1,814     1,817     1,961 
Allowance for originated loan and lease losses$  56,778   $  56,246   $  56,878   $  58,180   $  56,020  
          
Total loans and leases$  6,505,329   $  6,388,197   $  6,303,516   $  6,227,707   $  6,171,274  
Less:         
Total acquired loans and leases  337,420     370,177     394,407     426,865     460,142  
Total originated loans and leases$  6,167,909   $  6,018,020   $  5,909,109   $  5,800,842   $  5,711,132  
          
Allowance for loan and lease losses related to originated loans and leases as a percentage of originated loans and leases 0.92 %  0.93 %  0.96 %  1.00 %  0.98 %
          
          
          

 

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