Net Income of $6.8 million, EPS of $0.09

Excluding the Impact of the Tax Cuts and Jobs Act (the "Tax Reform Act"),
Net Income would have been $15.8 million, EPS of $0.21

BOSTON, Jan. 31, 2018 (GLOBE NEWSWIRE) -- Brookline Bancorp, Inc. (NASDAQ:BRKL) (the “Company”) today announced net income of $6.8 million, or $0.09 per basic and diluted share, for the fourth quarter of 2017, which included an estimated one time, non-cash charge of $9.0 million related to the enactment of the Tax Reform Act.

Excluding the impact of the Tax Reform Act, net income would have been $15.8 million, with an EPS of $0.21 per basic and diluted share, for the fourth quarter ended December 31, 2017. This compared to $15.4 million, or $0.20 per basic and diluted share, for the third quarter of 2017, and $13.3 million, or $0.19 per basic and diluted share, for the fourth quarter of 2016.

For the year ended December 31, 2017, the Company reported net income of $50.5 million, or $0.68 per basic and diluted share. Excluding the impact of the Tax Reform Act, net income would have been $59.5 million, with an EPS of $0.80 per basic and diluted share, for the year ended December 31, 2017. This compared to $52.4 million, or $0.74 per basic and diluted share, for the year ended December 31, 2016.

“We closed 2017 on a solid basis with record pretax income and, excluding the impact of the tax changes, we reported record net income and earnings per share," said Paul Perrault, President and Chief Executive Officer of the Company. "Our bankers continue to succeed in meeting the needs of our clients and helping our clients grow their businesses. We experienced significant growth in loans and deposits throughout the year. During 2017, we were also pleased to announce the pending acquisition of First Commons Bank. We look forward to welcoming customers of First Commons Bank to the Brookline family in 2018. The acquisition of First Commons Bank is expected to close in March of 2018."

BALANCE SHEET

Total assets at December 31, 2017 increased $94.0 million to $6.78 billion from $6.69 billion at September 30, 2017, and increased $342.1 million from $6.44 billion at December 31, 2016. At December 31, 2017, total loans and leases were $5.73 billion, representing an increase of $91.2 million from September 30, 2017, and an increase of $331.8 million from December 31, 2016.

Investment securities at December 31, 2017 increased $19.2 million to $649.9 million, comprising 9.6 percent of total assets, as compared to $630.6 million, or 9.4 percent of total assets, at September 30, 2017; and increased approximately $39.1 million from $610.8 million, or 9.5 percent of total assets, at December 31, 2016.

Total deposits at December 31, 2017 increased $65.7 million to $4.87 billion from $4.81 billion at September 30, 2017 and increased $260.3 million from $4.61 billion at December 31, 2016. Core deposits, which consists of demand checking, NOW, savings, and money market accounts, increased $25.5 million from September 30, 2017 and increased $93.8 million from December 31, 2016.

Total borrowings at December 31, 2017 increased $34.9 million to $1.02 billion from $985.9 million at September 30, 2017 and decreased $23.3 million from $1.04 billion at December 31, 2016.

The ratio of stockholders’ equity to total assets was 11.86 percent at December 31, 2017, as compared to 12.04 percent at September 30, 2017, and 10.80 percent at December 31, 2016, respectively. The ratio of tangible stockholders’ equity to tangible assets was 9.94 percent at December 31, 2017, as compared to 10.09 percent at September 30, 2017, and 8.73 percent at December 31, 2016. Tangible book value per share decreased $0.02 from $8.63 at September 30, 2017 to $8.61 at December 31, 2017.

NET INTEREST INCOME

Net interest income increased $0.8 million to $57.7 million during the fourth quarter of 2017 from the quarter ended September 30, 2017, primarily driven by loan volume during the fourth quarter. The net interest margin increased 2 basis points to 359 basis points for the three months ended December 31, 2017.      

NON-INTEREST INCOME

Non-interest income for the quarter ended December 31, 2017 decreased $0.2 million to $5.8 million from $6.0 million for the quarter ended September 30, 2017. The decrease was primarily driven by a decrease of $0.1 million in loan level derivative income and a decrease of $0.1 million in gain on sales of loans and leases held-for-sale.

PROVISION FOR CREDIT LOSSES

The Company recorded a provision for credit losses of $1.8 million for the quarter ended December 31, 2017, compared to $2.9 million for the quarter ended September 30, 2017. The decrease in the provision for the quarter was driven by a reduction in the specific reserve related to a favorable workout during the fourth quarter of 2017.

Net charge-offs for the fourth quarter of 2017 were $8.5 million compared to $2.0 million in the third quarter of 2017. The ratio of net charge-offs to average loans on an annualized basis increased to 60 basis points for the fourth quarter of 2017 from 14 basis points for the third quarter of 2017. Net charge-offs in the fourth quarter of 2017 consisted of $7.2 million of taxi medallion loans as compared to $1.3 million of taxi medallion loans in the third quarter of 2017. Net charge-offs as a percent of average total loans was 25 basis points in 2017, consistent with 2016.

The allowance for loan and lease losses represented 1.02 percent of total loans and leases at December 31, 2017, compared to 1.16 percent at September 30, 2017, and 0.99 percent at December 31, 2016. The allowance for loan and lease losses related to originated loans and leases represented 1.05 percent of originated loans and leases at December 31, 2017, compared to 1.20 percent at September 30, 2017, and 1.03 percent at December 31, 2016.

NON-INTEREST EXPENSE

Non-interest expense for the quarter ended December 31, 2017 decreased $0.2 million to $35.2 million from $35.4 million for the quarter ended September 30, 2017. The decrease was primarily driven by a decrease of $0.4 million in compensation and employee benefits and a decrease of $0.2 million in FDIC insurance, offset by an increase of $0.2 million in equipment and data processing expense and an increase of $0.2 million in professional services. The efficiency ratio for the fourth quarter of 2017 was 55.38 percent compared to 56.37 percent for the third quarter of 2017 and 56.92 percent for the fourth quarter of 2016.

PROVISION FOR INCOME TAXES

The effective tax rate was 70.6 percent and 44.9 percent for the three and twelve months ended December 31, 2017, respectively. As a result of changes introduced by the Tax Reform Act, the provision for income taxes included a total write-down associated with the revaluation of net deferred tax assets of $9.0 million. The changes to the future federal statutory tax rate and other provisions set forth in the Tax Reform Act resulted in the re-measurement of the carrying value of our net deferred tax asset and investments in low income housing tax credits. This revaluation of our net deferred tax assets is subject to further guidance and interpretation of the Tax Reform Act.

RETURNS ON AVERAGE ASSETS AND AVERAGE EQUITY

Excluding the impact of the Tax Reform Act and merger related costs, the annualized return on average assets was 0.95 percent during the fourth quarter of 2017 compared to 0.92 percent for the third quarter of 2017; and was 0.90 percent for the year ended December 31, 2017, compared to 0.83 percent for the year ended December 31, 2016.

Excluding the impact of the Tax Reform Act and merger related costs the annualized return on average tangible stockholders' equity was 9.55 percent during the fourth quarter of 2017 compared to 9.31 percent for the third quarter of 2017; and was 9.51 percent for the year ended December 31, 2017 compared to 9.66 percent for the year ended December 31, 2016

ASSET QUALITY

The ratio of nonperforming loans and leases to total loans and leases was 0.48 percent at December 31, 2017 as compared to 0.71 percent at September 30, 2017. Nonperforming loans and leases decreased $12.7 million to $27.3 million at December 31, 2017 from $40.0 million at September 30, 2017. The ratio of nonperforming assets to total assets was 0.47 percent at December 31, 2017 as compared to 0.66 percent at September 30, 2017. Nonperforming assets decreased $12.7 million to $31.7 million at December 31, 2017 from $44.4 million at September 30, 2017. The decrease was primarily driven by charge-offs of $8.5 million in the fourth quarter.

DIVIDEND DECLARED

The Company’s Board of Directors approved a dividend of $0.09 per share for the quarter ended December 31, 2017. The dividend will be paid on March 2, 2018 to stockholders of record on February 16, 2018.

CONFERENCE CALL

The Company will conduct a conference call/webcast at 1:30 PM Eastern Daylight Time on Thursday, February 1, 2018 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 10115372. 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 $6.8 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 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 and return on average tangible stockholders' equity. 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. Carlson

                        Brookline Bancorp, Inc.

                        Chief Financial Officer

                        (617) 425-5331

                        ccarlson@brkl.com

BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Selected Financial Highlights (Unaudited)
	At and for the Three Months Ended																				At and For the Twelve Months Ended
	December 31, 2017				September 30, 2017				June 30,  2017				March 31, 2017				December 31, 2016				December 31, 2017				December 31, 2016
	(Dollars In Thousands Except per Share Data)
Earnings Data:
Net interest income	$	57,657			$	56,843			$	55,583			$	53,098			$	51,854			$	223,181			$	203,664
Provision for credit losses		1,802				2,911				873				13,402				3,215				18,988				10,353
Non-interest income		5,815				5,973				4,477				15,908				5,430				32,173				22,667
Non-interest expense		35,152				35,408				34,795				33,756				32,607				139,111				130,362
Income before provision for income taxes		26,518				24,497				24,392				21,848				21,462				97,255				85,616
Net income attributable to Brookline Bancorp, Inc.		6,827				15,366				14,880				13,445				13,279				50,518				52,362
Performance Ratios:
Net interest margin (1)		3.59	%			3.57	%			3.59	%			3.53	%			3.40	%			3.57	%			3.44	%
Interest-rate spread (1)		3.42	%			3.41	%			3.39	%			3.29	%			3.24	%			3.38	%			3.27	%
Return on average assets		0.41	%			0.92	%			0.91	%			0.83	%			0.83	%			0.76	%			0.83	%
Return on average tangible assets (non-GAAP)		0.41	%			0.94	%			0.93	%			0.85	%			0.85	%			0.78	%			0.85	%
Return on average stockholders' equity		3.37	%			7.64	%			7.76	%			7.58	%			7.59	%			6.53	%			7.59	%
Return on average tangible stockholders' equity (non-GAAP)		4.09	%			9.31	%			9.58	%			9.55	%			9.60	%			8.04	%			9.66	%
Efficiency ratio (2)		55.38	%			56.37	%			57.93	%			48.92	%			56.92	%			54.48	%			57.60	%
Per Common Share Data:
Net income — Basic	$	0.09			$	0.20			$	0.20			$	0.19			$	0.19			$	0.68			$	0.74
Net income — Diluted		0.09				0.20				0.20				0.19				0.19				0.68				0.74
Cash dividends declared		0.09				0.09				0.09				0.09				0.09				0.36				0.36
Book value per share (end of period)		10.49				10.52				10.42				10.00				9.88				10.49				9.88
Tangible book value per share (end of period) (non-GAAP)		8.61				8.63				8.52				7.93				7.81				8.61				7.81
Stock price (end of period)		15.70				15.50				14.60				15.65				16.40				15.70				16.40
Balance Sheet:
Total assets	$	6,780,249			$	6,686,284			$	6,658,067			$	6,497,721			$	6,438,129			$	6,780,249			$	6,438,129
Total loans and leases		5,730,679				5,639,440				5,537,406				5,461,779				5,398,864				5,730,679				5,398,864
Total deposits		4,871,343				4,805,683				4,709,419				4,651,903				4,611,076				4,871,343				4,611,076
Brookline Bancorp, Inc. stockholders’ equity		803,830				804,762				795,618				703,873				695,544				803,830				695,544
Asset Quality:
Nonperforming assets	$	31,691			$	44,371			$	47,140			$	47,349			$	41,476			$	31,691			$	41,476
Nonperforming assets as a percentage of total assets		0.47	%			0.66	%			0.71	%			0.73	%			0.64	%			0.47	%			0.64	%
Allowance for loan and lease losses	$	58,592			$	65,413			$	64,521			$	66,133			$	53,666			$	58,592			$	53,666
Allowance for loan and lease losses as a percentage of total loans and leases		1.02	%			1.16	%			1.17	%			1.21	%			0.99	%			1.02	%			0.99	%
Net loan and lease charge-offs	$	8,507			$	1,954			$	2,402			$	995			$	8,337			$	13,858			$	13,275
Net loan and lease charge-offs as a percentage of average loans and leases (annualized)		0.60	%			0.14	%			0.17	%			0.07	%			0.62	%			0.25	%			0.25	%
Capital Ratios:
Stockholders’ equity to total assets		11.86	%			12.04	%			11.95	%			10.83	%			10.80	%			11.86	%			10.80	%
Tangible stockholders’ equity to tangible assets (non-GAAP)		9.94	%			10.09	%			9.99	%			8.79	%			8.73	%			9.94	%			8.73	%
(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)
	December 31, 2017				September 30, 2017				June 30, 2017				March 31, 2017				December 31, 2016
ASSETS	(In Thousands Except Share Data)
Cash and due from banks	$	25,622			$	35,392			$	40,599			$	33,565			$	36,055
Short-term investments		35,383				27,971				72,996				29,178				31,602
Total cash and cash equivalents		61,005				63,363				113,595				62,743				67,657
Investment securities available-for-sale		540,124				522,910				540,976				528,433				523,634
Investment securities held-to-maturity		109,730				107,738				108,963				100,691				87,120
Total investment securities		649,854				630,648				649,939				629,124				610,754
Loans and leases held-for-sale		2,628				2,973				593				1,152				13,078
Loans and leases:
Commercial real estate loans:
Commercial real estate mortgage		2,174,969				2,119,440				2,062,646				2,066,599				2,050,382
Multi-family mortgage		760,670				743,912				720,484				733,822				731,186
Construction		140,138				165,657				153,057				150,734				136,999
Total commercial real estate loans		3,075,777				3,029,009				2,936,187				2,951,155				2,918,567
Commercial loans and leases:
Commercial		705,004				689,010				691,070				644,240				635,426
Equipment financing		866,488				842,516				839,932				815,753				799,860
Condominium association		52,619				53,770				58,130				60,396				60,122
Total commercial loans and leases		1,624,111				1,585,296				1,589,132				1,520,389				1,495,408
Consumer loans:
Residential mortgage		660,065				652,415				646,679				631,863				624,349
Home equity		355,954				356,982				351,124				343,386				342,241
Other consumer		14,772				15,738				14,284				14,986				18,299
Total consumer loans		1,030,791				1,025,135				1,012,087				990,235				984,889
Total loans and leases		5,730,679				5,639,440				5,537,406				5,461,779				5,398,864
Allowance for loan and lease losses		(58,592	)			(65,413	)			(64,521	)			(66,133	)			(53,666	)
Net loans and leases		5,672,087				5,574,027				5,472,885				5,395,646				5,345,198
Restricted equity securities		59,369				62,135				66,988				68,065				64,511
Premises and equipment, net of accumulated depreciation		80,283				81,159				81,052				76,973				76,176
Deferred tax asset ("DTA")		15,061				28,093				26,982				29,859				25,247
Goodwill		137,890				137,890				137,890				137,890				137,890
Identified intangible assets, net of accumulated amortization		6,044				6,563				7,082				7,601				8,133
Other real estate owned and repossessed assets		4,419				4,398				4,873				2,286				1,399
Other assets		91,609				95,035				96,188				86,382				88,086
Total assets	$	6,780,249			$	6,686,284			$	6,658,067			$	6,497,721			$	6,438,129
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Non-interest-bearing deposits:
Demand checking accounts	$	942,583			$	905,472			$	920,035			$	898,161			$	900,474
Interest-bearing deposits:
NOW accounts		350,568				318,284				321,982				321,392				323,160
Savings accounts		646,359				665,558				584,408				575,808				613,061
Money market accounts		1,724,363				1,749,040				1,763,443				1,765,895				1,733,359
Certificate of deposit accounts		1,207,470				1,167,329				1,119,551				1,090,647				1,041,022
Total interest-bearing deposits		3,928,760				3,900,211				3,789,384				3,753,742				3,710,602
Total deposits		4,871,343				4,805,683				4,709,419				4,651,903				4,611,076
Borrowed funds:
Advances from the FHLBB		889,909				872,579				930,028				930,001				910,774
Subordinated debentures and notes		83,271				83,229				83,188				83,147				83,105
Other borrowed funds		47,639				30,087				53,427				43,637				50,207
Total borrowed funds		1,020,819				985,895				1,066,643				1,056,785				1,044,086
Mortgagors’ escrow accounts		7,686				8,151				7,714				8,032				7,645
Accrued expenses and other liabilities		67,818				74,019				71,232				69,752				72,573
Total liabilities		5,967,666				5,873,748				5,855,008				5,786,472				5,735,380
Stockholders' equity:
Brookline Bancorp, Inc. stockholders’ equity		803,830				804,762				795,618				703,873				695,544
Noncontrolling interest in subsidiary		8,753				7,774				7,441				7,376				7,205
Total stockholders' equity		812,583				812,536				803,059				711,249				702,749
Total liabilities and stockholders' equity	$	6,780,249			$	6,686,284			$	6,658,067			$	6,497,721			$	6,438,129

 

BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Consolidated Statements of Income (Unaudited)
	Three Months Ended
	December 31, 2017			September 30, 2017			June 30, 2017			March 31, 2017			December 31, 2016
	(In Thousands Except Share Data)
Interest and dividend income:
Loans and leases	$	64,272		$	63,054		$	61,138		$	58,558		$	57,247
Debt securities		3,214			3,154			3,156			3,000			2,881
Marketable and restricted equity securities		751			788			797			726			762
Short-term investments		100			180			95			67			93
Total interest and dividend income		68,337			67,176			65,186			62,351			60,983
Interest expense:
Deposits		6,681			5,984			5,543			5,080			5,195
Borrowed funds		3,999			4,349			4,060			4,173			3,934
Total interest expense		10,680			10,333			9,603			9,253			9,129
Net interest income		57,657			56,843			55,583			53,098			51,854
Provision for credit losses		1,802			2,911			873			13,402			3,215
Net interest income after provision for credit losses		55,855			53,932			54,710			39,696			48,639
Non-interest income:
Deposit fees		2,542			2,547			2,552			2,409			2,395
Loan fees		338			282			229			261			322
Loan level derivative income, net		755			844			186			402			265
Gain on sales of investment securities, net		—			—			—			11,393			—
Gain on sales of loans and leases held-for-sale		935			1,049			307			353			1,270
Other		1,245			1,251			1,203			1,090			1,178
Total non-interest income		5,815			5,973			4,477			15,908			5,430
Non-interest expense:
Compensation and employee benefits		20,652			21,067			20,910			19,784			19,657
Occupancy		3,594			3,650			3,657			3,645			3,520
Equipment and data processing		4,417			4,210			4,164			4,063			4,028
Professional services		1,200			973			1,036			1,106			927
FDIC insurance		678			842			951			855			655
Advertising and marketing		856			839			857			817			823
Amortization of identified intangible assets		519			519			519			532			621
Merger and acquisition expense		206			205			—			—			—
Other		3,030			3,103			2,701			2,954			2,376
Total non-interest expense		35,152			35,408			34,795			33,756			32,607
Income before provision for income taxes		26,518			24,497			24,392			21,848			21,462
Provision for income taxes - operating		9,747			8,330			8,759			7,835			7,524
Impact of revaluation of DTA		8,965			—			—			—			—
Total provision for income taxes		18,712			8,330			8,759			7,835			7,524
Net income before noncontrolling interest in subsidiary		7,806			16,167			15,633			14,013			13,938
Less net income attributable to noncontrolling interest in subsidiary		979			801			753			568			659
Net income attributable to Brookline Bancorp, Inc.	$	6,827		$	15,366		$	14,880		$	13,445		$	13,279
Earnings per common share:
Basic	$	0.09		$	0.20		$	0.20		$	0.19		$	0.19
Diluted	$	0.09		$	0.20		$	0.20		$	0.19		$	0.19
Weighted average common shares outstanding during the period:
Basic		76,583,712			76,452,539			74,325,013			70,386,766			70,362,702
Diluted		76,868,307			76,961,948			74,810,088			70,844,096			70,592,204
Dividends declared per common share	$	0.09		$	0.09		$	0.09		$	0.09		$	0.09

 

BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Consolidated Statements of Income (Unaudited)
	Twelve Months Ended December 31,
	2017			2016
	(In Thousands Except Share Data)
Interest and dividend income:
Loans and leases	$	247,022		$	224,721
Debt securities		12,524			11,710
Marketable and restricted equity securities		3,062			2,975
Short-term investments		442			242
Total interest and dividend income		263,050			239,648
Interest expense:
Deposits		23,288			20,070
Borrowed funds		16,581			15,914
Total interest expense		39,869			35,984
Net interest income		223,181			203,664
Provision for credit losses		18,988			10,353
Net interest income after provision for credit losses		204,193			193,311
Non-interest income:
Deposit Fees		10,050			9,467
Loan Fees		1,110			1,299
Loan level derivative income, net		2,187			3,962
Gain on sales of investment securities, net		11,393			—
Gain on sales of loans and leases held-for-sale		2,644			3,256
Other		4,789			4,683
Total non-interest income		32,173			22,667
Non-interest expense:
Compensation and employee benefits		82,413			77,836
Occupancy		14,546			13,882
Equipment and data processing		16,854			15,496
Professional services		4,315			3,852
FDIC insurance		3,326			3,332
Advertising and marketing		3,369			3,381
Amortization of identified intangible assets		2,089			2,500
Merger and acquisition expense		411			—
Other		11,788			10,083
Total non-interest expense		139,111			130,362
Income before provision for income taxes		97,255			85,616
Provision for income taxes - operating		34,671			30,392
Impact of revaluation of DTA		8,965			—
Total provision for income taxes		43,636			30,392
Net income before noncontrolling interest in subsidiary		53,619			55,224
Less net income attributable to noncontrolling interest in subsidiary		3,101			2,862
Net income attributable to Brookline Bancorp, Inc.	$	50,518		$	52,362
Earnings per common share:
Basic	$	0.68		$	0.74
Diluted	$	0.68		$	0.74
Weighted average common shares outstanding during the period:
Basic		74,459,508			70,261,954
Diluted		74,811,408			70,444,083
Dividends declared per common share	$	0.36		$	0.36

 

BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Asset Quality Analysis (Unaudited)
	At and for the Three Months Ended
	December 31, 2017				September 30, 2017				June 30,  2017				March 31, 2017				December 31, 2016
	(Dollars in Thousands)
NONPERFORMING ASSETS:
Loans and leases accounted for on a nonaccrual basis:
Commercial real estate mortgage	$	3,313			$	3,051			$	2,766			$	5,671			$	5,340
Multi-family mortgage		608				792				1,075				1,095				1,404
Construction		860				860				—				—				—
Total commercial real estate loans		4,781				4,703				3,841				6,766				6,744
Commercial		11,619				22,367				23,886				27,442				22,974
Equipment financing		8,106				9,858				9,702				6,445				6,758
Total commercial loans and leases		19,725				32,225				33,588				33,887				29,732
Residential mortgage		1,979				1,969				3,429				3,001				2,501
Home equity		744				1,047				1,366				1,333				951
Other consumer		43				29				43				76				149
Total consumer loans		2,766				3,045				4,838				4,410				3,601
Total nonaccrual loans and leases		27,272				39,973				42,267				45,063				40,077
Other real estate owned		3,235				3,235				3,384				618				618
Other repossessed assets		1,184				1,163				1,489				1,668				781
Total nonperforming assets	$	31,691			$	44,371			$	47,140			$	47,349			$	41,476
Loans and leases past due greater than 90 days and still accruing	$	3,020			$	2,523			$	2,706			$	6,515			$	7,077
Troubled debt restructurings on accrual		16,241				14,024				14,732				13,662				13,883
Troubled debt restructurings on nonaccrual		9,770				15,290				16,146				11,756				11,919
Total troubled debt restructurings	$	26,011			$	29,314			$	30,878			$	25,418			$	25,802
Nonperforming loans and leases as a percentage of total loans and leases		0.48	%			0.71	%			0.76	%			0.83	%			0.74	%
Nonperforming assets as a percentage of total assets		0.47	%			0.66	%			0.71	%			0.73	%			0.64	%
PROVISION AND ALLOWANCE FOR LOAN AND LEASE LOSSES:
Allowance for loan and lease losses at beginning of period	$	65,413			$	64,521			$	66,133			$	53,666			$	58,892
Charge-offs		(8,921	)			(2,143	)			(3,365	)			(1,382	)			(8,629	)
Recoveries		414				189				963				387				292
Net charge-offs		(8,507	)			(1,954	)			(2,402	)			(995	)			(8,337	)
Provision for loan and lease losses		1,686				2,846				790				13,462				3,111
Allowance for loan and lease losses at end of period	$	58,592			$	65,413			$	64,521			$	66,133			$	53,666
Allowance for loan and lease losses as a percentage of total loans and leases		1.02	%			1.16	%			1.17	%			1.21	%			0.99	%
Allowance for loan and lease losses related to originated loans and leases as a percentage of originated loans and leases (non-GAAP)		1.05	%			1.20	%			1.20	%			1.25	%			1.03	%
NET CHARGE-OFFS:
Commercial real estate loans	$	200			$	65			$	(131	)		$	(116	)		$	635
Commercial loans and leases		8,290				1,856				2,546				1,065				7,119
Consumer loans		17				33				(13	)			46				583
Total net charge-offs	$	8,507			$	1,954			$	2,402			$	995			$	8,337
Net loan and lease charge-offs as a percentage of average loans and leases (annualized)		0.60	%			0.14	%			0.17	%			0.07	%			0.62	%

 

BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Average Yields / Costs (Unaudited)
	Three Months Ended
	December 31, 2017										September 30, 2017										December 31, 2016
	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)	$	644,958			$	3,323		2.06	%		$	642,018			$	3,264		2.03	%		$	606,569			$	2,977		1.96	%
Marketable and restricted equity securities (2)		59,720				759		5.08	%			66,212				789		4.76	%			66,660				770		4.62	%
Short-term investments		34,689				100		1.15	%			52,674				180		1.36	%			78,053				93		0.48	%
Total investments		739,367				4,182		2.26	%			760,904				4,233		2.23	%			751,282				3,840		2.04	%
Loans and Leases:
Commercial real estate loans (3)		3,026,124				31,866		4.12	%			2,974,185				31,299		4.12	%			2,888,967				28,896		3.91	%
Commercial loans (3)		762,493				8,132		4.18	%			760,115				7,959		4.10	%			702,273				7,079		3.95	%
Equipment financing (3)		846,734				14,292		6.75	%			846,027				13,983		6.61	%			777,324				12,527		6.45	%
Residential mortgage loans (3)		659,226				6,082		3.69	%			649,831				6,043		3.72	%			627,650				5,512		3.51	%
Other consumer loans (3)		373,559				4,141		4.40	%			369,925				4,015		4.30	%			364,117				3,475		3.78	%
Total loans and leases		5,668,136				64,513		4.55	%			5,600,083				63,299		4.52	%			5,360,331				57,489		4.29	%
Total interest-earning assets		6,407,503				68,695		4.29	%			6,360,987				67,532		4.25	%			6,111,613				61,329		4.01	%
Allowance for loan and lease losses		(65,434	)									(65,140	)									(58,337	)
Non-interest-earning assets		383,661										385,195										372,707
Total assets	$	6,725,730									$	6,681,042									$	6,425,983
Liabilities and Stockholders' Equity:
Interest-bearing liabilities:
Deposits:
NOW accounts	$	331,724				61		0.07	%		$	321,731				55		0.07	%		$	307,450				53		0.07	%
Savings accounts		671,035				381		0.23	%			605,303				306		0.20	%			628,096				324		0.21	%
Money market accounts		1,766,045				2,456		0.55	%			1,765,610				2,267		0.51	%			1,717,989				2,002		0.46	%
Certificates of deposit		1,202,656				3,783		1.25	%			1,139,699				3,356		1.17	%			1,085,763				2,816		1.03	%
Total interest-bearing deposits		3,971,460				6,681		0.67	%			3,832,343				5,984		0.62	%			3,739,298				5,195		0.55	%
Borrowings
Advances from the FHLBB		798,572				2,690		1.32	%			913,206				3,028		1.30	%			853,572				2,635		1.21	%
Subordinated debentures and notes		83,248				1,276		6.13	%			83,204				1,274		6.13	%			83,079				1,265		6.09	%
Other borrowed funds		34,499				33		0.37	%			41,368				47		0.45	%			46,991				34		0.28	%
Total borrowings		916,319				3,999		1.71	%			1,037,778				4,349		1.64	%			983,642				3,934		1.56	%
Total interest-bearing liabilities		4,887,779				10,680		0.87	%			4,870,121				10,333		0.84	%			4,722,940				9,129		0.77	%
Non-interest-bearing liabilities:
Demand checking accounts		933,690										918,054										910,835
Other non-interest-bearing liabilities		85,018										80,616										85,670
Total liabilities		5,906,487										5,868,791										5,719,445
Brookline Bancorp, Inc. stockholders’ equity		811,219										804,666										699,749
Noncontrolling interest in subsidiary		8,024										7,585										6,789
Total liabilities and equity	$	6,725,730									$	6,681,042									$	6,425,983
Net interest income (tax-equivalent basis) /Interest-rate spread (4)						58,015		3.42	%							57,199		3.41	%							52,200		3.24	%
Less adjustment of tax-exempt income						358										356										346
Net interest income					$	57,657									$	56,843									$	51,854
Net interest margin (5)								3.59	%									3.57	%									3.40	%
(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.

 

BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Average Yields / Costs (Unaudited)
	Twelve Months Ended
	December 31, 2017										December 31, 2016
	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)	$	634,930			$	12,964		2.04	%		$	605,097			$	12,055		1.99	%
Marketable and restricted equity securities (2)		65,992				3,065		4.64	%			66,738				3,017		4.52	%
Short-term investments		40,847				442		1.08	%			54,205				242		0.45	%
Total investments		741,769				16,471		2.22	%			726,040				15,314		2.11	%
Loans and Leases:
Commercial real estate loans (3)		2,968,673				123,000		4.09	%			2,811,487				113,910		3.99	%
Commercial loans (3)		739,369				30,904		4.13	%			695,057				27,509		3.90	%
Equipment financing (3)		830,755				55,164		6.64	%			748,626				48,217		6.44	%
Residential mortgage loans (3)		645,925				23,593		3.65	%			624,994				22,217		3.55	%
Other consumer loans (3)		366,713				15,328		4.18	%			353,600				13,864		3.91	%
Total loans and leases		5,551,435				247,989		4.47	%			5,233,764				225,717		4.31	%
Total interest-earning assets		6,293,204				264,460		4.20	%			5,959,804				241,031		4.04	%
Allowance for loan and lease losses		(62,972	)									(58,071	)
Non-interest-earning assets		377,002										377,989
Total assets	$	6,607,234									$	6,279,722
Liabilities and Stockholders' Equity:
Interest-bearing liabilities:
Deposits:
NOW accounts	$	322,681				225		0.07	%		$	294,318				209		0.07	%
Savings accounts		620,757				1,297		0.21	%			578,855				1,322		0.23	%
Money market accounts		1,761,112				8,863		0.50	%			1,670,609				7,549		0.45	%
Certificates of deposit		1,116,909				12,903		1.16	%			1,102,110				10,990		1.00	%
Total interest-bearing deposits		3,821,459				23,288		0.61	%			3,645,892				20,070		0.55	%
Borrowings
Advances from the FHLBB		884,266				11,330		1.26	%			879,650				10,760		1.20	%
Subordinated debentures and notes		83,186				5,081		6.11	%			83,017				5,038		6.07	%
Other borrowed funds		45,908				170		0.37	%			43,533				116		0.27	%
Total borrowings		1,013,360				16,581		1.61	%			1,006,200				15,914		1.56	%
Total interest-bearing liabilities		4,834,819				39,869		0.82	%			4,652,092				35,984		0.77	%
Non-interest-bearing liabilities:
Demand checking accounts		912,743										849,672
Other non-interest-bearing liabilities		78,965										82,073
Total liabilities		5,826,527										5,583,837
Brookline Bancorp, Inc. stockholders’ equity		773,244										689,556
Noncontrolling interest in subsidiary		7,463										6,329
Total liabilities and equity	$	6,607,234									$	6,279,722
Net interest income (tax-equivalent basis) /Interest-rate spread (4)						224,591		3.38	%							205,047		3.27	%
Less adjustment of tax-exempt income						1,410										1,383
Net interest income					$	223,181									$	203,664
Net interest margin (5)								3.57	%									3.44	%
(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.

 

BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Non-GAAP Financial Information (Unaudited)
													At and for the Three Months Ended December 31,								At and for the Twelve Months Ended December 31,
													2017				2016				2017				2016
Reconciliation Table - Non-GAAP Financial Information													(Dollars in Thousands Except Share Data)
Net income attributable to Brookline Bancorp, Inc.													$	6,827			$	13,279			$	50,518			$	52,362
Add:
Impact of Tax Reform Act														8,965				—				8,965				—
Subtotal														15,792				13,279				59,483				52,362
Add:
Merger and acquisition-related expenses (after-tax)														130				—				264				—
Net earnings from operations													$	15,922			$	13,279			$	59,747			$	52,362
Operating earnings per common share:
Basic													$	0.21			$	0.19			$	0.80			$	0.74
Diluted														0.21				0.19				0.80				0.74
Weighted average common shares outstanding during the period:
Basic														76,583,712				70,362,702				74,459,508				70,261,954
Diluted														76,868,307				70,592,204				74,811,408				70,444,083
Return on average assets *														0.41	%			0.83	%			0.76	%			0.83	%
Add:
Impact of Tax Reform Act *														0.53	%			—	%			0.14	%			—	%
Merger and acquisition-related expenses (after-tax) *														0.01	%			—	%			—	%			—	%
Operating return on average assets *														0.95	%			0.83	%			0.90	%			0.83	%
Return on average tangible assets *														0.41	%			0.85	%			0.78	%			0.85	%
Add:
Impact of Tax Reform Act *														0.55	%			—	%			0.14	%			—	%
Merger and acquisition-related expenses (after-tax) *														0.01	%			—	%			—	%			—	%
Operating return on average tangible assets *														0.97	%			0.85	%			0.92	%			0.85	%
Return on average stockholders' equity *														3.37	%			7.59	%			6.53	%			7.59	%
Add:
Impact of Tax Reform Act *														4.42	%			—	%			1.17	%			—	%
Merger and acquisition-related expenses (after-tax) *														0.06	%			—	%			0.03	%			—	%
Operating return on average stockholders' equity *														7.85	%			7.59	%			7.73	%			7.59	%
Return on average tangible stockholders' equity *														4.09	%			9.60	%			8.04	%			9.66	%
Add:
Impact of Tax Reform Act *														5.38	%			—	%			1.43	%			—	%
Merger and acquisition-related expenses (after-tax) *														0.08	%			—	%			0.04	%			—	%
Operating return on average tangible stockholders' equity *														9.55	%			9.60	%			9.51	%			9.66	%
* Ratios at and for the three months ended are annualized.
	At and for the Three Months Ended																				At and For the Twelve Months Ended
	December 31, 2017				September 30, 2017				June 30, 2017				March 31, 2017				December 31, 2016				December 31, 2017				December 31, 2016
	(Dollars in Thousands)
Net income, as reported	$	6,827			$	15,366			$	14,880			$	13,445			$	13,279			$	50,518			$	52,362
Average total assets	$	6,725,730			$	6,681,042			$	6,556,665			$	6,461,183			$	6,425,983			$	6,607,234			$	6,279,722
Less: Average goodwill and average identified intangible assets, net		144,226				144,747				145,269				145,778				146,382				145,000				147,308
Average tangible assets	$	6,581,504			$	6,536,295			$	6,411,396			$	6,315,405			$	6,279,601			$	6,462,234			$	6,132,414
Return on average tangible assets (annualized)		0.41	%			0.94	%			0.93	%			0.85	%			0.85	%			0.78	%			0.85	%
Average total stockholders’ equity	$	811,219			$	804,666			$	766,529			$	709,095			$	699,749			$	773,244			$	689,556
Less: Average goodwill and average identified intangible assets, net		144,226				144,747				145,269				145,778				146,382				145,000				147,308
Average tangible stockholders’ equity	$	666,993			$	659,919			$	621,260			$	563,317			$	553,367			$	628,244			$	542,248
Return on average tangible stockholders’ equity (annualized)		4.09	%			9.31	%			9.58	%			9.55	%			9.60	%			8.04	%			9.66	%
Brookline Bancorp, Inc. stockholders’ equity	$	803,830			$	804,762			$	795,618			$	703,873			$	695,544			$	803,830			$	695,544
Less:
Goodwill		137,890				137,890				137,890				137,890				137,890				137,890				137,890
Identified intangible assets, net		6,044				6,563				7,082				7,601				8,133				6,044				8,133
Tangible stockholders' equity	$	659,896			$	660,309			$	650,646			$	558,382			$	549,521			$	659,896			$	549,521
Total assets	$	6,780,249			$	6,686,284			$	6,658,067			$	6,497,721			$	6,438,129			$	6,780,249			$	6,438,129
Less:
Goodwill		137,890				137,890				137,890				137,890				137,890				137,890				137,890
Identified intangible assets, net		6,044				6,563				7,082				7,601				8,133				6,044				8,133
Tangible assets	$	6,636,315			$	6,541,831			$	6,513,095			$	6,352,230			$	6,292,106			$	6,636,315			$	6,292,106
Tangible stockholders’ equity to tangible assets		9.94	%			10.09	%			9.99	%			8.79	%			8.73	%			9.94	%			8.73	%
Tangible stockholders' equity	$	659,896			$	660,309			$	650,646			$	558,382			$	549,521			$	659,896			$	549,521
Number of common shares issued		81,695,695				81,695,695				81,695,695				75,744,445				75,744,445				81,695,695				75,744,445
Less:
Treasury shares		4,440,665				4,572,954				4,717,775				4,707,096				4,707,096				4,440,665				4,707,096
Unallocated ESOP shares		142,332				150,921				159,510				168,099				176,688				142,332				176,688
Unvested restricted shares		455,283				471,702				457,966				476,854				476,854				455,283				476,854
Number of common shares outstanding		76,657,415				76,500,118				76,360,444				70,392,396				70,383,807				76,657,415				70,383,807
Tangible book value per common share	$	8.61			$	8.63			$	8.52			$	7.93			$	7.81			$	8.61			$	7.81
Allowance for loan and lease losses	$	58,592			$	65,413			$	64,521			$	66,133			$	53,666			$	58,592			$	53,666
Less:
Allowance for acquired loans and leases losses		1,040				1,003				1,188				1,304				1,253				1,040				1,253
Allowance for originated loan and lease losses	$	57,552			$	64,410			$	63,333			$	64,829			$	52,413			$	57,552			$	52,413
Total loans and leases	$	5,730,679			$	5,639,440			$	5,537,406			$	5,461,779			$	5,398,864			$	5,730,679			$	5,398,864
Less:
Total acquired loans and leases		240,057				260,196				271,157				295,055				315,304				240,057				315,304
Total originated loans and leases	$	5,490,622			$	5,379,244			$	5,266,249			$	5,166,724			$	5,083,560			$	5,490,622			$	5,083,560
Allowance for loan and lease losses related to originated loans and leases as a percentage of originated loans and leases		1.05	%			1.20	%			1.20	%			1.25	%			1.03	%			1.05	%			1.03	%

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