BOSTON, Oct. 24, 2018 (GLOBE NEWSWIRE) -- Brookline Bancorp, Inc. (NASDAQ: BRKL) (the “Company”) today announced net income of $22.5 million, or $0.28 per basic and diluted share, for the third quarter of 2018, compared to $20.8 million, or $0.26 per basic and diluted share, for the second quarter of 2018, and $15.4 million, or $0.20 per basic and diluted share, for the third quarter of 2017.

Paul Perrault, President and Chief Executive Officer of the Company, commented on the third quarter earnings, “We are pleased to report earnings of $22.5 million for the third quarter of 2018 representing $0.28 per share. Thanks to our team of exceptional employees, the Company has continued to experience loan growth with solid returns and asset quality, all while maintaining our commitment to outstanding customer service.”

BALANCE SHEET

Total assets at September 30, 2018 increased $34.9 million to $7.32 billion from $7.29 billion at June 30, 2018, and increased $634.3 million from $6.69 billion at September 30, 2017. At September 30, 2018, total loans and leases were $6.23 billion, representing an increase of $56.4 million from June 30, 2018, and an increase of $588.3 million from September 30, 2017.

Investment securities at September 30, 2018 decreased $20.6 million to $654.6 million, comprising 8.94 percent of total assets, as compared to $675.3 million, or 9.27 percent of total assets, at June 30, 2018, and increased approximately $24.0 million from $630.6 million, or 9.43 percent of total assets, at September 30, 2017.

Total deposits at September 30, 2018 increased $35.3 million to $5.23 billion from $5.20 billion at June 30, 2018 and increased $427.9 million from $4.81 billion at September 30, 2017.

Total borrowings at September 30, 2018 decreased $28.0 million to $1.08 billion from $1.11 billion at June 30, 2018 and increased $97.0 million from $985.9 million at September 30, 2017.

The ratio of stockholders’ equity to total assets was 12.16 percent at September 30, 2018, as compared to 12.04 percent at June 30, 2018, and 12.04 percent at September 30, 2017. The ratio of tangible stockholders’ equity to tangible assets was 10.11 percent at September 30, 2018, as compared to 9.97 percent at June 30, 2018, and 10.09 percent at September 30, 2017. Tangible book value per share increased $0.15 from $8.85 at June 30, 2018 to $9.00 at September 30, 2018, compared to $8.63 at September 30, 2017.

NET INTEREST INCOME

Net interest income decreased $0.4 million to $62.3 million during the third quarter of 2018 from the quarter ended June 30, 2018. The net interest margin decreased 7 basis points to 3.57 percent for the three months ended September 30, 2018.

NON-INTEREST INCOME

Non-interest income for the quarter ended September 30, 2018 increased $1.6 million to $7.1 million from $5.5 million for the quarter ended June 30, 2018. The increase was primarily driven by an increase of $1.6 million in loan level derivative income.

PROVISION FOR CREDIT LOSSES

The Company recorded a provision for credit losses of $2.7 million for the quarter ended September 30, 2018, compared to $1.5 million for the quarter ended June 30, 2018. The increase in the provision for the quarter was driven by specific reserves primarily related to taxi medallion loans. 

At the end of the quarter, the carrying value of taxi medallion loans was $14.5 million with reserves of $2.9 million. For collateral valuation purposes, taxi medallions are currently estimated at $35,000 for Boston and $20,000 for Cambridge. The Company has no taxi medallion exposure outside Massachusetts.

Total net charge-offs for the third quarter of 2018 were $0.6 million compared to $2.3 million in the second quarter of 2018, which was primarily driven by charge-offs in the taxi medallion portfolio. The ratio of net charge-offs to average loans and leases on an annualized basis decreased to 4 basis points for the third quarter of 2018 from 15 basis points for the second quarter of 2018.

The allowance for loan and lease losses represented 0.96 percent of total loans and leases at September 30, 2018, compared to 0.94 percent at June 30, 2018, and 1.16 percent at September 30, 2017. The allowance for loan and lease losses related to originated loans and leases represented 1.00 percent of originated loans and leases at September 30, 2018, compared to 0.98 percent at June 30, 2018, and 1.20 percent at September 30, 2017.

NON-INTEREST EXPENSE

Non-interest expense for the quarter ended September 30, 2018 decreased $0.4 million to $37.3 million from $37.7 million for the quarter ended June 30, 2018. The decrease was primarily driven by decreases of $0.2 million in compensation and employee benefits, $0.3 million in merger and acquisition expense and $0.4 million in other non-interest expense, partially offset by increases of $0.2 million in equipment and data processing and $0.3 million in FDIC insurance.

PROVISION FOR INCOME TAXES

The effective tax rate was 20.9 percent and 22.9 percent for the three and nine months ended September 30, 2018, respectively. During the quarter, several discrete items were recognized, the most significant benefit related to a recent IRS ruling regarding section 162(m). The total of these favorable tax adjustments represents approximately $0.9 million or $0.01 per share. The Company expects the effective tax rate to be approximately 24 percent for the fourth quarter. 

RETURNS ON AVERAGE ASSETS AND AVERAGE EQUITY

The annualized return on average assets increased to 1.23 percent during the third quarter of 2018 from 1.15 percent for the second quarter of 2018. The annualized return on average tangible assets increased to 1.26 percent for the third quarter of 2018 from 1.17 percent for the second quarter of 2018.

The annualized return on average stockholders' equity increased to 10.10 percent during the third quarter of 2018 from 9.53 percent for the second quarter of 2018. The annualized return on average tangible stockholders’ equity increased to 12.44 percent for the third quarter of 2018 from 11.80 percent for the second quarter of 2018.

ASSET QUALITY

The ratio of nonperforming loans and leases to total loans and leases was 0.41 percent at September 30, 2018 as compared to 0.42 percent at June 30, 2018. Nonperforming loans and leases remained consistent at $25.8 million for September 30, 2018 and June 30, 2018, respectively. The ratio of nonperforming assets to total assets remained consistent at 0.41 percent for September 30, 2018 and June 30, 2018, respectively. Nonperforming assets decreased $0.4 million to $29.7 million at September 30, 2018 from $30.1 million at June 30, 2018.

DIVIDEND DECLARED

The Company’s Board of Directors approved a dividend of $0.105 per share for the quarter ended September 30, 2018, representing an increase of 5.0 percent. The dividend will be paid on November 23, 2018 to stockholders of record on November 9, 2018. This is the second increase in the quarterly common dividend this year and represents a year over year increase in the quarterly dividend of 16.7 percent.

CONFERENCE CALL

The Company will conduct a conference call/webcast at 1:30 PM Eastern Daylight Time on Thursday, October 25, 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 10124269. 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 $7.3 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 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
	September 30, 2018				June 30, 2018				March 31, 2018				December 31, 2017				September 30, 2017
	(Dollars In Thousands Except per Share Data)
Earnings Data:
Net interest income	$	62,332			$	62,717			$	59,491			$	57,657			$	56,843
Provision for credit losses		2,717				1,470				641				1,802				2,911
Non-interest income		7,069				5,526				6,168				5,815				5,973
Non-interest expense		37,310				37,702				39,938				35,152				35,408
Income before provision for income taxes		29,374				29,071				25,080				26,518				24,497
Net income attributable to Brookline Bancorp, Inc.		22,460				20,831				18,633				6,827				15,366
Performance Ratios:
Net interest margin (1)		3.57	%			3.64	%			3.66	%			3.59	%			3.57	%
Interest-rate spread (1)		3.27	%			3.36	%			3.38	%			3.42	%			3.41	%
Return on average assets (annualized)		1.23	%			1.15	%			1.08	%			0.41	%			0.92	%
Return on average tangible assets (annualized) (non-GAAP)		1.26	%			1.17	%			1.10	%			0.41	%			0.94	%
Return on average stockholders' equity (annualized)		10.10	%			9.53	%			8.98	%			3.37	%			7.64	%
Return on average tangible stockholders' equity (annualized) (non-GAAP)		12.44	%			11.80	%			11.01	%			4.09	%			9.31	%
Efficiency ratio (2)		53.76	%			55.25	%			60.83	%			55.38	%			56.37	%
Per Common Share Data:
Net income — Basic	$	0.28			$	0.26			$	0.24			$	0.09			$	0.20
Net income — Diluted		0.28				0.26				0.24				0.09				0.20
Cash dividends declared		0.10				0.10				0.09				0.09				0.09
Book value per share (end of period)		11.08				10.94				10.80				10.49				10.52
Tangible book value per share (end of period) (non-GAAP)		9.00				8.85				8.69				8.61				8.63
Stock price (end of period)		16.70				18.60				16.20				15.70				15.50
Balance Sheet:
Total assets	$	7,320,596			$	7,285,710			$	7,248,114			$	6,780,249			$	6,686,284
Total loans and leases		6,227,707				6,171,274				6,114,461				5,730,679				5,639,440
Total deposits		5,233,611				5,198,280				5,191,520				4,871,343				4,805,683
Brookline Bancorp, Inc. stockholders’ equity		890,368				877,283				865,777				803,830				804,762
Asset Quality:
Nonperforming assets	$	29,718			$	30,145			$	30,242			$	31,691			$	44,371
Nonperforming assets as a percentage of total assets		0.41	%			0.41	%			0.42	%			0.47	%			0.66	%
Allowance for loan and lease losses	$	59,997			$	57,981			$	58,714			$	58,592			$	65,413
Allowance for loan and lease losses as a percentage of total loans and leases		0.96	%			0.94	%			0.96	%			1.02	%			1.16	%
Net loan and lease charge-offs	$	564			$	2,330			$	505			$	8,507			$	1,954
Net loan and lease charge-offs as a percentage of average loans and leases (annualized)		0.04	%			0.15	%			0.03	%			0.60	%			0.14	%
Capital Ratios:
Stockholders’ equity to total assets		12.16	%			12.04	%			11.94	%			11.86	%			12.04	%
Tangible stockholders’ equity to tangible assets (non-GAAP)		10.11	%			9.97	%			9.85	%			9.94	%			10.09	%
(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)
	September 30, 2018				June 30, 2018				March 31, 2018				December 31, 2017				September 30, 2017
ASSETS	(In Thousands Except Share Data)
Cash and due from banks	$	30,762			$	32,724			$	34,713			$	25,622			$	35,392
Short-term investments		23,114				22,754				49,743				35,383				27,971
Total cash and cash equivalents		53,876				55,478				84,456				61,005				63,363
Investment securities available-for-sale		534,788				558,602				558,357				540,124				522,910
Investment securities held-to-maturity		115,684				116,670				117,352				109,730				107,738
Investment securities trading		4,169				—				—				—				—
Total investment securities		654,641				675,272				675,709				649,854				630,648
Loans and leases held-for-sale		937				1,034				756				2,628				2,973
Loans and leases:
Commercial real estate loans:
Commercial real estate mortgage		2,287,979				2,269,520				2,284,488				2,174,969				2,119,440
Multi-family mortgage		828,849				816,311				793,006				760,670				743,912
Construction		164,217				178,335				169,440				140,138				165,657
Total commercial real estate loans		3,281,045				3,264,166				3,246,934				3,075,777				3,029,009
Commercial loans and leases:
Commercial		771,200				761,964				761,540				705,004				689,010
Equipment financing		954,579				920,643				892,341				866,488				842,516
Condominium association		52,205				53,537				52,739				52,619				53,770
Total commercial loans and leases		1,777,984				1,736,144				1,706,620				1,624,111				1,585,296
Consumer loans:
Residential mortgage		759,167				754,818				766,687				660,065				652,415
Home equity		380,303				382,597				364,928				355,954				356,982
Other consumer		29,208				33,549				29,292				14,772				15,738
Total consumer loans		1,168,678				1,170,964				1,160,907				1,030,791				1,025,135
Total loans and leases		6,227,707				6,171,274				6,114,461				5,730,679				5,639,440
Allowance for loan and lease losses		(59,997	)			(57,981	)			(58,714	)			(58,592	)			(65,413	)
Net loans and leases		6,167,710				6,113,293				6,055,747				5,672,087				5,574,027
Restricted equity securities		63,963				68,343				66,164				59,369				62,135
Premises and equipment, net of accumulated depreciation		77,886				79,194				80,268				80,283				81,159
Deferred tax asset		22,249				20,826				19,198				15,061				28,093
Goodwill		160,427				160,427				160,896				137,890				137,890
Identified intangible assets, net of accumulated amortization		6,623				7,160				7,697				6,044				6,563
Other real estate owned and repossessed assets		3,934				4,352				3,963				4,419				4,398
Other assets		108,350				100,331				93,260				91,609				95,035
Total assets	$	7,320,596			$	7,285,710			$	7,248,114			$	6,780,249			$	6,686,284
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Non-interest-bearing deposits:
Demand checking accounts	$	1,017,234			$	1,002,954			$	987,153			$	942,583			$	905,472
Interest-bearing deposits:
NOW accounts		322,587				346,936				342,374				350,568				318,284
Savings accounts		612,210				603,079				637,920				646,359				665,558
Money market accounts		1,623,220				1,704,652				1,862,351				1,724,363				1,749,040
Certificate of deposit accounts		1,658,360				1,540,659				1,361,722				1,207,470				1,167,329
Total interest-bearing deposits		4,216,377				4,195,326				4,204,367				3,928,760				3,900,211
Total deposits		5,233,611				5,198,280				5,191,520				4,871,343				4,805,683
Borrowed funds:
Advances from the FHLBB		959,446				991,091				982,533				889,909				872,579
Subordinated debentures and notes		83,392				83,352				83,311				83,271				83,229
Other borrowed funds		40,048				36,480				33,585				47,639				30,087
Total borrowed funds		1,082,886				1,110,923				1,099,429				1,020,819				985,895
Mortgagors’ escrow accounts		8,227				8,122				8,395				7,686				8,151
Accrued expenses and other liabilities		96,047				82,017				74,024				67,818				74,019
Total liabilities		6,420,771				6,399,342				6,373,368				5,967,666				5,873,748
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, 81,695,695 shares issued, and 81,695,695 shares issued, respectively		852				852				852				817				817
Additional paid-in capital		757,061				756,254				755,843				699,976				700,624
Retained earnings, partially restricted		200,151				185,734				172,934				161,217				160,225
Accumulated other comprehensive (loss) income		(15,599	)			(13,415	)			(11,666	)			(5,950	)			(1,893	)
Treasury stock, at cost;
4,291,317 shares, 4,409,501 shares, 4,401,333 shares, 4,440,665 shares, and 4,572,954 shares, respectively		(51,454	)			(51,454	)			(51,454	)			(51,454	)			(54,188	)
Unallocated common stock held by the Employee Stock Ownership Plan;
118,050 shares, 126,144 shares, 134,238 shares, 142,332 shares, and 150,921 shares, respectively		(643	)			(688	)			(732	)			(776	)			(823	)
Total Brookline Bancorp, Inc. stockholders’ equity		890,368				877,283				865,777				803,830				804,762
Noncontrolling interest in subsidiary		9,457				9,085				8,969				8,753				7,774
Total stockholders' equity		899,825				886,368				874,746				812,583				812,536
Total liabilities and stockholders' equity	$	7,320,596			$	7,285,710			$	7,248,114			$	6,780,249			$	6,686,284

 

BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Consolidated Statements of Income (Unaudited)
	Three Months Ended
	September 30, 2018			June 30, 2018			March 31, 2018			December 31, 2017			September 30, 2017
	(In Thousands Except Share Data)
Interest and dividend income:
Loans and leases	$	75,877		$	73,329		$	67,272		$	64,272		$	63,054
Debt securities		3,585			3,563			3,323			3,214			3,154
Marketable and restricted equity securities		1,029			1,003			924			751			788
Short-term investments		145			179			120			100			180
Total interest and dividend income		80,636			78,074			71,639			68,337			67,176
Interest expense:
Deposits		11,916			9,219			7,099			6,681			5,984
Borrowed funds		6,388			6,138			5,049			3,999			4,349
Total interest expense		18,304			15,357			12,148			10,680			10,333
Net interest income		62,332			62,717			59,491			57,657			56,843
Provision for credit losses		2,717			1,470			641			1,802			2,911
Net interest income after provision for credit losses		59,615			61,247			58,850			55,855			53,932
Non-interest income:
Deposit fees		2,648			2,620			2,463			2,542			2,547
Loan fees		417			330			290			338			282
Loan level derivative income, net		2,192			571			866			755			844
(Loss)/gain on sales of investment securities, net		—			—			1,162			—			—
Gain on sales of loans and leases held-for-sale		535			722			299			935			1,049
Other		1,277			1,283			1,088			1,245			1,251
Total non-interest income		7,069			5,526			6,168			5,815			5,973
Non-interest expense:
Compensation and employee benefits		22,338			22,565			22,314			20,652			21,067
Occupancy		3,913			3,879			3,959			3,594			3,650
Equipment and data processing		4,601			4,368			4,618			4,417			4,210
Professional services		1,075			1,055			1,144			1,200			973
FDIC insurance		846			514			635			678			842
Advertising and marketing		1,068			1,118			1,057			856			839
Amortization of identified intangible assets		537			539			467			519			519
Merger and acquisition expense		22			334			2,905			206			205
Other		2,910			3,330			2,839			3,030			3,103
Total non-interest expense		37,310			37,702			39,938			35,152			35,408
Income before provision for income taxes		29,374			29,071			25,080			26,518			24,497
Provision for income taxes - operating		6,140			7,342			5,652			9,747			8,330
Impact of revaluation of DTA		—			—			—			8,965			—
Total provision for income taxes		6,140			7,342			5,652			18,712			8,330
Net income before noncontrolling interest in subsidiary		23,234			21,729			19,428			7,806			16,167
Less net income attributable to noncontrolling interest in subsidiary		774			898			795			979			801
Net income attributable to Brookline Bancorp, Inc.	$	22,460		$	20,831		$	18,633		$	6,827		$	15,366
Earnings per common share:
Basic	$	0.28		$	0.26		$	0.24		$	0.09		$	0.20
Diluted	$	0.28		$	0.26		$	0.24		$	0.09		$	0.20
Weighted average common shares outstanding during the period:
Basic		80,315,050			80,184,977			77,879,593			76,583,712			76,452,539
Diluted		80,515,467			80,505,614			78,167,800			76,868,307			76,961,948
Dividends declared per common share	$	0.10		$	0.10		$	0.09		$	0.09		$	0.09

 

BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Consolidated Statements of Income (Unaudited)
		Nine Months Ended September 30,
		2018			2017
		(In Thousands Except Share Data)
Interest and dividend income:
Loans and leases		$	216,478		$	182,750
Debt securities			10,471			9,310
Marketable and restricted equity securities			2,956			2,311
Short-term investments			444			342
Total interest and dividend income			230,349			194,713
Interest expense:
Deposits			28,234			16,607
Borrowed funds			17,575			12,582
Total interest expense			45,809			29,189
Net interest income			184,540			165,524
Provision for credit losses			4,828			17,186
Net interest income after provision for credit losses			179,712			148,338
Non-interest income:
Deposit Fees			7,731			7,508
Loan Fees			1,037			772
Loan level derivative income, net			3,629			1,432
Gain on sales of investment securities, net			1,162			11,393
Gain on sales of loans and leases held-for-sale			1,556			1,709
Other			3,648			3,544
Total non-interest income			18,763			26,358
Non-interest expense:
Compensation and employee benefits			67,217			61,761
Occupancy			11,751			10,952
Equipment and data processing			13,587			12,437
Professional services			3,274			3,115
FDIC insurance			1,995			2,648
Advertising and marketing			3,243			2,513
Amortization of identified intangible assets			1,543			1,570
Merger and acquisition expense			3,261			205
Other			9,079			8,758
Total non-interest expense			114,950			103,959
Income before provision for income taxes			83,525			70,737
Provision for income taxes			19,134			24,924
Net income before noncontrolling interest in subsidiary			64,391			45,813
Less net income attributable to noncontrolling interest in subsidiary			2,467			2,122
Net income attributable to Brookline Bancorp, Inc.		$	61,924		$	43,691
Earnings per common share:
Basic		$	0.78		$	0.59
Diluted		$	0.78		$	0.59
Weighted average common shares outstanding during the period:
Basic			79,471,238			73,743,658
Diluted			79,740,992			74,226,316
Dividends declared per common share		$	0.29		$	0.27

 

BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Asset Quality Analysis (Unaudited)
	At and for the Three Months Ended
	September 30, 2018				June 30, 2018				March 31, 2018				December 31, 2017				September 30, 2017
	(Dollars in Thousands)
NONPERFORMING ASSETS:
Loans and leases accounted for on a nonaccrual basis:
Commercial real estate mortgage	$	3,369			$	3,774			$	4,080			$	3,313			$	3,051
Multi-family mortgage		357				568				588				608				792
Construction		640				640				860				860				860
Total commercial real estate loans		4,366				4,982				5,528				4,781				4,703
Commercial		7,862				9,487				11,150				11,619				22,367
Equipment financing		9,659				8,825				6,661				8,106				9,858
Condominium association		295				—				—				—				—
Total commercial loans and leases		17,816				18,312				17,811				19,725				32,225
Residential mortgage		2,538				1,571				1,962				1,979				1,969
Home equity		1,053				923				925				744				1,047
Other consumer		11				5				53				43				29
Total consumer loans		3,602				2,499				2,940				2,766				3,045
Total nonaccrual loans and leases		25,784				25,793				26,279				27,272				39,973
Other real estate owned		3,136				3,436				3,235				3,235				3,235
Other repossessed assets		798				916				728				1,184				1,163
Total nonperforming assets	$	29,718			$	30,145			$	30,242			$	31,691			$	44,371
Loans and leases past due greater than 90 days and still accruing	$	14,954			$	12,340			$	5,240			$	3,020			$	2,523
Troubled debt restructurings on accrual		12,657				12,911				14,294				16,241				14,024
Troubled debt restructurings on nonaccrual		8,779				9,391				8,610				9,770				15,290
Total troubled debt restructurings	$	21,436			$	22,302			$	22,904			$	26,011			$	29,314
Nonperforming loans and leases as a percentage of total loans and leases		0.41	%			0.42	%			0.43	%			0.48	%			0.71	%
Nonperforming assets as a percentage of total assets		0.41	%			0.41	%			0.42	%			0.47	%			0.66	%
PROVISION AND ALLOWANCE FOR LOAN AND LEASE LOSSES:
Allowance for loan and lease losses at beginning of period	$	57,981			$	58,714			$	58,592			$	65,413			$	64,521
Charge-offs		(1,227	)			(3,605	)			(792	)			(8,921	)			(2,143	)
Recoveries		663				1,275				287				414				189
Net charge-offs		(564	)			(2,330	)			(505	)			(8,507	)			(1,954	)
Provision for loan and lease losses		2,580				1,597				627				1,686				2,846
Allowance for loan and lease losses at end of period	$	59,997			$	57,981			$	58,714			$	58,592			$	65,413
Allowance for loan and lease losses as a percentage of total loans and leases		0.96	%			0.94	%			0.96	%			1.02	%			1.16	%
Allowance for loan and lease losses related to originated loans and leases as a percentage of originated loans and leases (non-GAAP)		1.00	%			0.98	%			1.03	%			1.05	%			1.20	%
NET CHARGE-OFFS:
Commercial real estate loans	$	—			$	100			$	3			$	200			$	65
Commercial loans and leases		579				2,304				532				8,290				1,856
Consumer loans		(15	)			(74	)			(30	)			17				33
Total net charge-offs	$	564			$	2,330			$	505			$	8,507			$	1,954
Net loan and lease charge-offs as a percentage of average loans and leases (annualized)		0.04	%			0.15	%			0.03	%			0.60	%			0.14	%

 

BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Average Yields / Costs (Unaudited)
	Three Months Ended
	September 30, 2018										June 30, 2018										September 30, 2017
	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)	$	663,125			$	3,638		2.20	%		$	666,182			$	3,617		2.17	%		$	642,018			$	3,264		2.03	%
Marketable and restricted equity securities (2)		67,607				1,029		6.09	%			69,395				1,004		5.78	%			66,212				789		4.76	%
Short-term investments		31,061				145		1.87	%			41,155				179		1.74	%			52,674				180		1.36	%
Total investments		761,793				4,812		2.53	%			776,732				4,800		2.47	%			760,904				4,233		2.23	%
Loans and Leases:
Commercial real estate loans (3)		3,260,634				37,332		4.48	%			3,250,488				36,372		4.43	%			2,974,185				31,299		4.12	%
Commercial loans (3)		819,383				9,862		4.72	%			823,860				9,323		4.48	%			760,115				7,959		4.10	%
Equipment financing (3)		933,007				16,220		6.95	%			907,089				15,739		6.94	%			846,027				13,983		6.61	%
Residential mortgage loans (3)		756,421				7,648		4.04	%			759,866				7,552		3.98	%			649,831				6,043		3.72	%
Other consumer loans (3)		412,248				4,928		4.73	%			406,144				4,464		4.40	%			369,925				4,015		4.30	%
Total loans and leases		6,181,693				75,990		4.92	%			6,147,447				73,450		4.78	%			5,600,083				63,299		4.52	%
Total interest-earning assets		6,943,486				80,802		4.65	%			6,924,179				78,250		4.52	%			6,360,987				67,532		4.25	%
Allowance for loan and lease losses		(58,576	)									(59,247	)									(65,140	)
Non-interest-earning assets		417,503										408,861										385,195
Total assets	$	7,302,413									$	7,273,793									$	6,681,042
Liabilities and Stockholders' Equity:
Interest-bearing liabilities:
Deposits:
NOW accounts	$	344,760				72		0.08	%		$	346,410				65		0.07	%		$	321,731				55		0.07	%
Savings accounts		599,514				472		0.31	%			609,758				405		0.27	%			605,303				306		0.20	%
Money market accounts		1,668,402				4,367		1.04	%			1,767,509				3,530		0.80	%			1,765,610				2,267		0.51	%
Certificates of deposit		1,612,551				7,005		1.72	%			1,422,782				5,219		1.47	%			1,139,699				3,356		1.17	%
Total interest-bearing deposits		4,225,227				11,916		1.12	%			4,146,459				9,219		0.89	%			3,832,343				5,984		0.62	%
Borrowings
Advances from the FHLBB		907,306				4,979		2.15	%			1,018,130				4,696		1.82	%			913,206				3,028		1.30	%
Subordinated debentures and notes		83,370				1,301		6.24	%			83,330				1,296		6.22	%			83,204				1,274		6.13	%
Other borrowed funds		56,918				108		0.75	%			46,635				146		1.26	%			41,368				47		0.45	%
Total borrowings		1,047,594				6,388		2.39	%			1,148,095				6,138		2.11	%			1,037,778				4,349		1.64	%
Total interest-bearing liabilities		5,272,821				18,304		1.38	%			5,294,554				15,357		1.16	%			4,870,121				10,333		0.84	%
Non-interest-bearing liabilities:
Demand checking accounts		1,023,610										1,003,985										918,054
Other non-interest-bearing liabilities		107,449										91,889										80,616
Total liabilities		6,403,880										6,390,428										5,868,791
Brookline Bancorp, Inc. stockholders’ equity		889,259										874,513										804,666
Noncontrolling interest in subsidiary		9,274										8,852										7,585
Total liabilities and equity	$	7,302,413									$	7,273,793									$	6,681,042
Net interest income (tax-equivalent basis) /Interest-rate spread (4)						62,498		3.27	%							62,893		3.36	%							57,199		3.41	%
Less adjustment of tax-exempt income						166										176										356
Net interest income					$	62,332									$	62,717									$	56,843
Net interest margin (5)								3.57	%									3.64	%									3.57	%
(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)
	Nine Months Ended
	September 30, 2018										September 30, 2017
	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)	$	658,993			$	10,632		2.15	%		$	631,549			$	9,641		2.04	%
Marketable and restricted equity securities (2)		67,056				2,956		5.88	%			68,104				2,306		4.52	%
Short-term investments		34,295				444		1.73	%			42,922				342		1.06	%
Total investments		760,344				14,032		2.46	%			742,575				12,289		2.21	%
Loans and Leases:
Commercial real estate loans (3)		3,209,798				107,133		4.40	%			2,949,313				91,134		4.07	%
Commercial loans (3)		809,849				27,609		4.50	%			730,453				22,737		4.11	%
Equipment financing (3)		905,345				46,823		6.90	%			826,494				40,907		6.60	%
Residential mortgage loans (3)		740,507				21,933		3.95	%			641,443				17,511		3.64	%
Other consumer loans (3)		400,304				13,333		4.45	%			364,407				11,187		4.10	%
Total loans and leases		6,065,803				216,831		4.77	%			5,512,110				183,476		4.44	%
Total interest-earning assets		6,826,147				230,863		4.51	%			6,254,685				195,765		4.17	%
Allowance for loan and lease losses		(58,935	)									(62,142	)
Non-interest-earning assets		401,999										374,558
Total assets	$	7,169,211									$	6,567,101
Liabilities and Stockholders' Equity:
Interest-bearing liabilities:
Deposits:
NOW accounts	$	342,418				195		0.08	%		$	319,633				164		0.07	%
Savings accounts		619,317				1,278		0.28	%			603,814				916		0.20	%
Money market accounts		1,735,710				10,455		0.81	%			1,759,449				6,407		0.49	%
Certificates of deposit		1,428,799				16,306		1.53	%			1,088,011				9,120		1.12	%
Total interest-bearing deposits		4,126,244				28,234		0.91	%			3,770,907				16,607		0.59	%
Borrowings
Advances from the FHLBB		960,399				13,423		1.84	%			913,137				8,640		1.25	%
Subordinated debentures and notes		83,330				3,879		6.21	%			83,165				3,805		6.10	%
Other borrowed funds		46,643				273		0.78	%			49,752				137		0.37	%
Total borrowings		1,090,372				17,575		2.13	%			1,046,054				12,582		1.59	%
Total interest-bearing liabilities		5,216,616				45,809		1.17	%			4,816,961				29,189		0.81	%
Non-interest-bearing liabilities:
Demand checking accounts		986,763										905,684
Other non-interest-bearing liabilities		92,280										76,735
Total liabilities		6,295,659										5,799,380
Brookline Bancorp, Inc. stockholders’ equity		864,675										760,447
Noncontrolling interest in subsidiary		8,877										7,274
Total liabilities and equity	$	7,169,211									$	6,567,101
Net interest income (tax-equivalent basis) /Interest-rate spread (4)						185,054		3.34	%							166,576		3.36	%
Less adjustment of tax-exempt income						514										1,052
Net interest income					$	184,540									$	165,524
Net interest margin (5)								3.62	%									3.56	%
(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 September 30,								At and for the Nine Months Ended September 30,
						2018				2017				2018				2017
Reconciliation Table - Non-GAAP Financial Information					(Dollars in Thousands Except Share Data)
Net income attributable to Brookline Bancorp, Inc.					$	22,460			$	15,366			$	61,924			$	43,691
Less:
Security (loss)/gains (after-tax of 24.0% for 2018 and 35.9% for 2017) **						—				—				883				7,303
Add:
Merger and acquisition-related expenses (after-tax of 24.0% for 2018 and 35.9% for 2017) **						17				135				2,478				133
Operating earnings					$	22,477			$	15,501			$	63,519			$	36,521
Operating earnings per common share:
Basic					$	0.28			$	0.20			$	0.80			$	0.50
Diluted						0.28				0.20				0.80				0.49
Weighted average common shares outstanding during the period:
Basic						80,315,050				76,452,539				79,471,238				73,743,658
Diluted						80,515,467				76,961,948				79,740,992				74,226,316
Return on average assets *						1.23	%			0.92	%			1.15	%			0.89	%
Less:
Security (loss)/gains (after-tax) *						—	%			—	%			0.02	%			0.15	%
Add:
Merger and acquisition-related expenses (after-tax) *						—	%			0.01	%			0.05	%			—	%
Operating return on average assets *						1.23	%			0.93	%			1.18	%			0.74	%
Return on average tangible assets *						1.26	%			0.94	%			1.18	%			0.91	%
Less:
Security (loss)/gains (after-tax) *						—	%			—	%			0.02	%			0.15	%
Add:
Merger and acquisition-related expenses (after-tax) *						—	%			0.01	%			0.05	%			—	%
Operating return on average tangible assets *						1.26	%			0.95	%			1.21	%			0.76	%
Return on average stockholders' equity *						10.10	%			7.64	%			9.55	%			7.66	%
Less:
Security (loss)/gains (after-tax) *						—	%			—	%			0.14	%			1.28	%
Add:
Merger and acquisition-related expenses (after-tax) *						0.01	%			0.07	%			0.38	%			0.02	%
Operating return on average stockholders' equity *						10.11	%			7.71	%			9.79	%			6.40	%
Return on average tangible stockholders' equity *						12.44	%			9.31	%			11.76	%			9.47	%
Less:
Security (loss)/gains (after-tax) *						—	%			—	%			0.17	%			1.58	%
Add:
Merger and acquisition-related expenses (after-tax) *						0.01	%			0.09	%			0.47	%			0.03	%
Operating return on average tangible stockholders' equity *						12.45	%			9.40	%			12.06	%			7.92	%
* Ratios at and for the three and nine months ended are annualized.
** Based on current expected effective tax rate of 24% for the remainder of 2018.
	At and for the Three Months Ended
	September 30, 2018				June 30, 2018				March 31, 2018				December 31, 2017				September 30, 2017
	(Dollars in Thousands)
Net income, as reported	$	22,460			$	20,831			$	18,633			$	6,827			$	15,366
Average total assets	$	7,302,413			$	7,273,793			$	6,927,309			$	6,725,730			$	6,681,042
Less: Average goodwill and average identified intangible assets, net		167,313				168,185				152,377				144,226				144,747
Average tangible assets	$	7,135,100			$	7,105,608			$	6,774,932			$	6,581,504			$	6,536,295
Return on average tangible assets (annualized)		1.26	%			1.17	%			1.10	%			0.41	%			0.94	%
Average total stockholders’ equity	$	889,259			$	874,513			$	829,598			$	811,219			$	804,666
Less: Average goodwill and average identified intangible assets, net		167,313				168,185				152,377				144,226				144,747
Average tangible stockholders’ equity	$	721,946			$	706,328			$	677,221			$	666,993			$	659,919
Return on average tangible stockholders’ equity (annualized)		12.44	%			11.80	%			11.01	%			4.09	%			9.31	%
Brookline Bancorp, Inc. stockholders’ equity	$	890,368			$	877,283			$	865,777			$	803,830			$	804,762
Less:
Goodwill		160,427				160,427				160,896				137,890				137,890
Identified intangible assets, net		6,623				7,160				7,697				6,044				6,563
Tangible stockholders' equity	$	723,318			$	709,696			$	697,184			$	659,896			$	660,309
Total assets	$	7,320,596			$	7,285,710			$	7,248,114			$	6,780,249			$	6,686,284
Less:
Goodwill		160,427				160,427				160,896				137,890				137,890
Identified intangible assets, net		6,623				7,160				7,697				6,044				6,563
Tangible assets	$	7,153,546			$	7,118,123			$	7,079,521			$	6,636,315			$	6,541,831
Tangible stockholders’ equity to tangible assets		10.11	%			9.97	%			9.85	%			9.94	%			10.09	%
Tangible stockholders' equity	$	723,318			$	709,696			$	697,184			$	659,896			$	660,309
Number of common shares issued		85,177,172				85,177,172				85,177,172				81,695,695				81,695,695
Less:
Treasury shares		4,291,317				4,409,501				4,401,333				4,440,665				4,572,954
Unallocated ESOP shares		118,050				126,144				134,238				142,332				150,921
Unvested restricted shares		398,094				455,283				455,283				455,283				471,702
Number of common shares outstanding		80,369,711				80,186,244				80,186,318				76,657,415				76,500,118
Tangible book value per common share	$	9.00			$	8.85			$	8.69			$	8.61			$	8.63
Allowance for loan and lease losses	$	59,997			$	57,981			$	58,714			$	58,592			$	65,413
Less:
Allowance for acquired loans and leases losses		1,817				1,961				910				1,040				1,003
Allowance for originated loan and lease losses	$	58,180			$	56,020			$	57,804			$	57,552			$	64,410
Total loans and leases	$	6,227,707			$	6,171,274			$	6,114,461			$	5,730,679			$	5,639,440
Less:
Total acquired loans and leases		426,865				460,142				482,237				240,057				260,196
Total originated loans and leases	$	5,800,842			$	5,711,132			$	5,632,224			$	5,490,622			$	5,379,244
Allowance for loan and lease losses related to originated loans and leases as a percentage of originated loans and leases		1.00	%			0.98	%			1.03	%			1.05	%			1.20	%