BRKL Brookline Bancorp Inc

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	%