Brookline Bancorp Announces First Quarter Results

Net Income of $22.5 million, EPS of $0.28

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 first quarter of 2019, compared to $21.1 million, or $0.26 per basic and diluted share, for the fourth quarter of 2018, and $18.6 million, or $0.24 per basic and diluted share, for the first quarter of 2018.

Paul Perrault, President and Chief Executive Officer of the Company, commented on the first quarter earnings, “Brookline Bancorp experienced a strong start to 2019, today we report earnings of $22.5 million for the first quarter of 2019 or $0.28 per share. We are looking forward to building on this growth during the rest of the year.”

EASTERN FUNDING, LLC ACQUISITION

On January 4, 2019, Brookline Bank, a subsidiary of the Company, completed the purchase of the remaining 15.93 percent interest in Eastern Funding, LLC for a total cash consideration of $35.9 million.

BALANCE SHEET

Total assets at March 31, 2019 increased $126.3 million to $7.5 billion from $7.4 billion at December 31, 2018, and increased $271.0 million from $7.2 billion at March 31, 2018 driven by growth in the loan portfolio. At March 31, 2019, total loans and leases were $6.4 billion, representing an increase of $84.7 million from December 31, 2018, and an increase of $273.7 million from March 31, 2018 driven by growth in all major loan categories.

The Company continued to redirect cash flows from the investment portfolio to fund loan demand. Investment securities at March 31, 2019 decreased $14.7 million to $607.1 million, comprising 8.07 percent of total assets, as compared to $621.8 million, or 8.41 percent of total assets, at December 31, 2018, and decreased approximately $68.7 million from $675.7 million, or 9.32 percent of total assets, at March 31, 2018.

Total deposits at March 31, 2019 increased $166.6 million to $5.6 billion from $5.5 billion at December 31, 2018 and increased $429.1 million from $5.2 billion at March 31, 2018 driven primarily by growth in certificates of deposit.

Total borrowings at March 31, 2019 decreased $54.5 million to $866.0 million from $920.5 million at December 31, 2018 and decreased $233.4 million from $1.1 billion at March 31, 2018 as deposit growth was used to pay down borrowings.

The ratio of stockholders’ equity to total assets was 11.98 percent at March 31, 2019, as compared to 12.18 percent at December 31, 2018, and 11.94 percent at March 31, 2018. The ratio of tangible stockholders’ equity to tangible assets was 9.99 percent at March 31, 2019, as compared to 10.15 percent at December 31, 2018, and 9.85 percent at March 31, 2018. Tangible book value per share increased $0.01 from $9.21 at December 31, 2018 to $9.22 at March 31, 2019, compared to $8.69 at March 31, 2018.

NET INTEREST INCOME

Net interest income decreased $0.2 million to $63.0 million during the first quarter of 2019 from the quarter ended December 31, 2018 due to the number of days in the quarter. The net interest margin increased 6 basis points to 3.64 percent for the three months ended March 31, 2019.

NON-INTEREST INCOME

Non-interest income for the quarter ended March 31, 2019 increased $0.1 million to $6.6 million from $6.5 million for the quarter ended December 31, 2018. The increase was primarily driven by a mark to market gain on investment securities compared to a loss in the prior quarter.

PROVISION FOR CREDIT LOSSES

The Company recorded a provision for credit losses of $1.4 million for the quarter ended March 31, 2019, compared to $0.1 million for the quarter ended December 31, 2018.

Total net charge-offs for the first quarter of 2019 were $2.1 million compared to $1.3 million in the fourth quarter of 2018. Charge-offs were largely related to taxi medallion loans against previously established specific reserves. The ratio of net charge-offs to average loans and leases on an annualized basis increased to 13 basis points for the first quarter of 2019 from 8 basis points for the fourth quarter of 2018.

The allowance for loan and lease losses represented 0.91 percent of total loans and leases at March 31, 2019, compared to 0.93 percent at December 31, 2018, and 0.96 percent at March 31, 2018. The allowance for loan and lease losses related to originated loans and leases represented 0.93 percent of originated loans and leases at March 31, 2019, compared to 0.96 percent at December 31, 2018, and 1.03 percent at March 31, 2018.

NON-INTEREST EXPENSE

Non-interest expense for the quarter ended March 31, 2019 decreased $1.4 million to $38.9 million from $40.3 million for the quarter ended December 31, 2018. The decrease was primarily driven by decreases of $0.7 million in compensation and employee benefits, $0.1 million in professional services, $0.1 million in FDIC insurance, $0.1 million in amortization of identified intangible assets, $0.5 million in merger and acquisition expense and $0.9 million in other non-interest expense, partially offset by increases of $0.7 million in occupancy expense and $0.3 million in advertising and marketing expense.

PROVISION FOR INCOME TAXES

The effective tax rate was 23.4 percent and 24.1 percent for the three months ended March 31, 2019 and December 31, 2018, respectively.

RETURNS ON AVERAGE ASSETS AND AVERAGE EQUITY

The annualized return on average assets increased to 1.21 percent during the first quarter of 2019 from 1.15 percent for the fourth quarter of 2018. The annualized return on average tangible assets increased to 1.24 percent for the first quarter of 2019 from 1.17 percent for the fourth quarter of 2018.

The annualized return on average stockholders' equity increased to 10.14 percent during the first quarter of 2019 from 9.40 percent for the fourth quarter of 2018. The annualized return on average tangible stockholders’ equity increased to 12.48 percent for the first quarter of 2019 from 11.54 percent for the fourth quarter of 2018.

ASSET QUALITY

The ratio of nonperforming loans and leases to total loans and leases was 0.36 percent at March 31, 2019 as compared to 0.38 percent at December 31, 2018. Nonperforming loans and leases decreased $1.3 million to $22.8 million at March 31, 2019 from $24.1 million at December 31, 2018. The ratio of nonperforming assets to total assets was 0.36 percent at March 31, 2019 as compared to 0.38 percent at December 31, 2018. Nonperforming assets decreased $1.4 million to $26.7 million at March 31, 2019 from $28.1 million at December 31, 2018.

DIVIDEND DECLARED

The Company’s Board of Directors approved a dividend of $0.11 per share for the quarter ended March 31, 2019, an increase of half a cent from the prior period. The dividend will be paid on May 24, 2019 to stockholders of record on May 10, 2019, representing an increase of 4.8 percent from the prior quarter and a 10 percent increase from the prior year.

CONFERENCE CALL

The Company will conduct a conference call/webcast at 1:30 PM Eastern Daylight Time on Thursday, April 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 10130049. 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 $7.5 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) [e-mail]

BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Selected Financial Highlights (Unaudited)
	At and for the Three Months Ended
	March 31, 2019				December 31, 2018				September 30, 2018				June 30, 2018				March 31, 2018
	(Dollars In Thousands Except per Share Data)
Earnings Data:
Net interest income	$	62,999			$	63,159			$	62,332			$	62,717			$	59,491
Provision for credit losses		1,353				123				2,717				1,470				641
Non-interest income		6,630				6,461				7,069				5,526				6,168
Non-interest expense		38,871				40,282				37,310				37,702				39,938
Income before provision for income taxes		29,405				29,215				29,374				29,071				25,080
Net income attributable to Brookline Bancorp, Inc.		22,467				21,138				22,460				20,831				18,633
Performance Ratios:
Net interest margin (1)		3.64	%			3.58	%			3.57	%			3.64	%			3.66	%
Interest-rate spread (1)		3.18	%			3.25	%			3.27	%			3.36	%			3.38	%
Return on average assets (annualized)		1.21	%			1.15	%			1.23	%			1.15	%			1.08	%
Return on average tangible assets (annualized) (non-GAAP)		1.24	%			1.17	%			1.26	%			1.17	%			1.10	%
Return on average stockholders' equity (annualized)		10.14	%			9.40	%			10.10	%			9.53	%			8.98	%
Return on average tangible stockholders' equity (annualized) (non-GAAP)		12.48	%			11.54	%			12.44	%			11.80	%			11.01	%
Efficiency ratio (2)		55.83	%			57.86	%			53.76	%			55.25	%			60.83	%
Per Common Share Data:
Net income — Basic	$	0.28			$	0.26			$	0.28			$	0.26			$	0.24
Net income — Diluted		0.28				0.26				0.28				0.26				0.24
Cash dividends declared		0.110				0.105				0.105				0.100				0.100
Book value per share (end of period)		11.30				11.30				11.08				10.94				10.80
Tangible book value per share (end of period) (non-GAAP)		9.22				9.21				9.00				8.85				8.69
Stock price (end of period)		14.40				13.82				16.70				18.60				16.20
Balance Sheet:
Total assets	$	7,519,130			$	7,392,805			$	7,320,596			$	7,285,710			$	7,248,114
Total loans and leases		6,388,197				6,303,516				6,227,707				6,171,274				6,114,461
Total deposits		5,620,633				5,454,044				5,233,611				5,198,280				5,191,520
Brookline Bancorp, Inc. stockholders’ equity		900,572				900,140				890,368				877,283				865,777
Asset Quality:
Nonperforming assets	$	26,721			$	28,116			$	29,718			$	30,145			$	30,242
Nonperforming assets as a percentage of total assets		0.36	%			0.38	%			0.41	%			0.41	%			0.42	%
Allowance for loan and lease losses	$	58,041			$	58,692			$	59,997			$	57,981			$	58,714
Allowance for loan and lease losses as a percentage of total loans and leases		0.91	%			0.93	%			0.96	%			0.94	%			0.96	%
Net loan and lease charge-offs	$	2,101			$	1,252			$	564			$	2,330			$	505
Net loan and lease charge-offs as a percentage of average loans and leases (annualized)		0.13	%			0.08	%			0.04	%			0.15	%			0.03	%
Capital Ratios:
Stockholders’ equity to total assets		11.98	%			12.18	%			12.16	%			12.04	%			11.94	%
Tangible stockholders’ equity to tangible assets (non-GAAP)		9.99	%			10.15	%			10.11	%			9.97	%			9.85	%
(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)
	March 31,2019				December 31,2018				September 30,2018				June 30, 2018				March 31,2018
ASSETS	(In Thousands Except Share Data)
Cash and due from banks	$	51,276			$	47,542			$	30,762			$	32,724			$	34,713
Short-term investments		61,063				42,042				23,114				22,754				49,743
Total cash and cash equivalents		112,339				89,584				53,876				55,478				84,456
Investment securities available-for-sale		489,020				502,793				534,788				558,602				558,357
Investment securities held-to-maturity		113,694				114,776				115,684				116,670				117,352
Equity securities held-for-trading		4,341				4,207				4,169				—				—
Total investment securities		607,055				621,776				654,641				675,272				675,709
Loans and leases held-for-sale		869				3,247				937				1,034				756
Loans and leases:
Commercial real estate loans:
Commercial real estate mortgage		2,355,507				2,330,725				2,287,979				2,269,520				2,284,488
Multi-family mortgage		855,703				847,711				828,849				816,311				793,006
Construction		199,258				173,300				164,217				178,335				169,440
Total commercial real estate loans		3,410,468				3,351,736				3,281,045				3,264,166				3,246,934
Commercial loans and leases:
Commercial		741,577				736,418				771,200				761,964				761,540
Equipment financing		995,863				982,089				954,579				920,643				892,341
Condominium association		49,142				50,451				52,205				53,537				52,739
Total commercial loans and leases		1,786,582				1,768,958				1,777,984				1,736,144				1,706,620
Consumer loans:
Residential mortgage		775,578				782,968				759,167				754,818				766,687
Home equity		376,126				376,484				380,303				382,597				364,928
Other consumer		39,443				23,370				29,208				33,549				29,292
Total consumer loans		1,191,147				1,182,822				1,168,678				1,170,964				1,160,907
Total loans and leases		6,388,197				6,303,516				6,227,707				6,171,274				6,114,461
Allowance for loan and lease losses		(58,041	)			(58,692	)			(59,997	)			(57,981	)			(58,714	)
Net loans and leases		6,330,156				6,244,824				6,167,710				6,113,293				6,055,747
Restricted equity securities		54,192				61,751				63,963				68,343				66,164
Premises and equipment, net of accumulated depreciation		75,520				76,382				77,886				79,194				80,268
Right-of-use asset operating leases		26,205				—				—				—				—
Deferred tax asset		27,084				21,495				22,249				20,826				19,198
Goodwill		160,427				160,427				160,427				160,427				160,896
Identified intangible assets, net of accumulated amortization		5,684				6,086				6,623				7,160				7,697
Other real estate owned and repossessed assets		3,912				4,019				3,934				4,352				3,963
Other assets		115,687				103,214				108,350				100,331				93,260
Total assets	$	7,519,130			$	7,392,805			$	7,320,596			$	7,285,710			$	7,248,114
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Non-interest-bearing deposits:
Demand checking accounts	$	1,011,031			$	1,033,551			$	1,017,234			$	1,002,954			$	987,153
Interest-bearing deposits:
NOW accounts		369,896				336,317				322,587				346,936				342,374
Savings accounts		625,770				619,961				612,210				603,079				637,920
Money market accounts		1,706,708				1,675,050				1,623,220				1,704,652				1,862,351
Certificate of deposit accounts		1,907,228				1,789,165				1,658,360				1,540,659				1,361,722
Total interest-bearing deposits		4,609,602				4,420,493				4,216,377				4,195,326				4,204,367
Total deposits		5,620,633				5,454,044				5,233,611				5,198,280				5,191,520
Borrowed funds:
Advances from the FHLBB		730,018				784,375				959,446				991,091				982,533
Subordinated debentures and notes		83,472				83,433				83,392				83,352				83,311
Other borrowed funds		52,515				52,734				40,048				36,480				33,585
Total borrowed funds		866,005				920,542				1,082,886				1,110,923				1,099,429
Operating lease liabilities		26,205				—				—				—				—
Mortgagors’ escrow accounts		7,517				7,426				8,227				8,122				8,395
Accrued expenses and other liabilities		98,198				100,174				96,047				82,017				74,024
Total liabilities		6,618,558				6,482,186				6,420,771				6,399,342				6,373,368
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		736,872				755,629				753,941				756,254				755,843
Retained earnings, partially restricted		226,929				212,838				200,151				185,734				172,934
Accumulated other comprehensive loss		(4,393	)			(9,460	)			(15,599	)			(13,415	)			(11,666	)
Treasury stock, at cost;
5,020,025 shares, 5,020,025 shares, 4,291,317 shares, 4,409,501 shares, and 4,401,333 shares, respectively		(59,121	)			(59,120	)			(48,334	)			(51,454	)			(51,454	)
Unallocated common stock held by the Employee Stock Ownership Plan;
104,079 shares, 109,950 shares, 118,050 shares,126,144 shares, and 134,238 shares, respectively		(567	)			(599	)			(643	)			(688	)			(732	)
Total Brookline Bancorp, Inc. stockholders’ equity		900,572				900,140				890,368				877,283				865,777
Noncontrolling interest in subsidiary		—				10,479				9,457				9,085				8,969
Total stockholders' equity		900,572				910,619				899,825				886,368				874,746
Total liabilities and stockholders' equity	$	7,519,130			$	7,392,805			$	7,320,596			$	7,285,710			$	7,248,114

 

BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Consolidated Statements of Income (Unaudited)
	Three Months Ended
	March 31,2019			December 31,2018				September 30,2018				June 30,2018			March 31,2018
	(In Thousands Except Share Data)
Interest and dividend income:
Loans and leases	$	80,672		$	78,791			$	75,877			$	73,329		$	67,272
Debt securities		3,236			3,489				3,585				3,563			3,323
Marketable and restricted equity securities		911			1,008				1,029				1,003			924
Short-term investments		267			256				145				179			120
Total interest and dividend income		85,086			83,544				80,636				78,074			71,639
Interest expense:
Deposits		15,948			13,744				11,916				9,219			7,099
Borrowed funds		6,139			6,641				6,388				6,138			5,049
Total interest expense		22,087			20,385				18,304				15,357			12,148
Net interest income		62,999			63,159				62,332				62,717			59,491
Provision for credit losses		1,353			123				2,717				1,470			641
Net interest income after provision for credit losses		61,646			63,036				59,615				61,247			58,850
Non-interest income:
Deposit fees		2,523			2,669				2,648				2,620			2,463
Loan fees		413			390				417				330			290
Loan level derivative income, net		1,745			1,811				2,192				571			866
Gain (loss) on investment securities, net		134			(692	)			(243	)			—			1,162
Gain on sales of loans and leases held-for-sale		289			327				535				722			299
Other		1,526			1,956				1,520				1,283			1,088
Total non-interest income		6,630			6,461				7,069				5,526			6,168
Non-interest expense:
Compensation and employee benefits		23,743			24,413				22,338				22,565			22,314
Occupancy		3,947			3,240				3,913				3,879			3,959
Equipment and data processing		4,661			4,626				4,601				4,368			4,618
Professional services		1,076			1,130				1,075				1,055			1,144
FDIC insurance		593			727				846				514			635
Advertising and marketing		1,069			773				1,068				1,118			1,057
Amortization of identified intangible assets		402			537				537				539			467
Merger and acquisition expense		—			526				22				334			2,905
Other		3,380			4,310				2,910				3,330			2,839
Total non-interest expense		38,871			40,282				37,310				37,702			39,938
Income before provision for income taxes		29,405			29,215				29,374				29,071			25,080
Provision for income taxes		6,895			7,055				6,140				7,342			5,652
Net income before noncontrolling interest in subsidiary		22,510			22,160				23,234				21,729			19,428
Less net income attributable to noncontrolling interest in subsidiary		43			1,022				774				898			795
Net income attributable to Brookline Bancorp, Inc.	$	22,467		$	21,138			$	22,460			$	20,831		$	18,633
Earnings per common share:
Basic	$	0.28		$	0.26			$	0.28			$	0.26		$	0.24
Diluted	$	0.28		$	0.26			$	0.28			$	0.26		$	0.24
Weighted average common shares outstanding during the period:
Basic		79,658,583			80,258,456				80,315,050				80,184,977			77,879,593
Diluted		79,843,578			80,407,525				80,515,467				80,505,614			78,167,800
Dividends paid per common share	$	0.105		$	0.105			$	0.100			$	0.100		$	0.090

 

BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Asset Quality Analysis (Unaudited)
	At and for the Three Months Ended
	March 31,2019				December 31,2018				September 30,2018				June 30,2018				March 31,2018
	(Dollars in Thousands)
NONPERFORMING ASSETS:
Loans and leases accounted for on a nonaccrual basis:
Commercial real estate mortgage	$	2,889			$	3,928			$	3,369			$	3,774			$	4,080
Multi-family mortgage		101				330				357				568				588
Construction		396				396				640				640				860
Total commercial real estate loans		3,386				4,654				4,366				4,982				5,528
Commercial		5,728				6,621				7,862				9,487				11,150
Equipment financing		10,253				9,500				9,659				8,825				6,661
Condominium association		224				265				295				—				—
Total commercial loans and leases		16,205				16,386				17,816				18,312				17,811
Residential mortgage		2,188				2,132				2,538				1,571				1,962
Home equity		1,022				908				1,053				923				925
Other consumer		8				17				11				5				53
Total consumer loans		3,218				3,057				3,602				2,499				2,940
Total nonaccrual loans and leases		22,809				24,097				25,784				25,793				26,279
Other real estate owned		3,054				3,054				3,136				3,436				3,235
Other repossessed assets		858				965				798				916				728
Total nonperforming assets	$	26,721			$	28,116			$	29,718			$	30,145			$	30,242
Loans and leases past due greater than 90 days and still accruing	$	16,800			$	13,482			$	14,954			$	12,340			$	5,240
Troubled debt restructurings on accrual		28,543				12,257				12,657				12,911				14,294
Troubled debt restructurings on nonaccrual		7,597				8,684				8,779				9,391				8,610
Total troubled debt restructurings	$	36,140			$	20,941			$	21,436			$	22,302			$	22,904
Nonperforming loans and leases as a percentage of total loans and leases		0.36	%			0.38	%			0.41	%			0.42	%			0.43	%
Nonperforming assets as a percentage of total assets		0.36	%			0.38	%			0.41	%			0.41	%			0.42	%
PROVISION AND ALLOWANCE FOR LOAN AND LEASE LOSSES:
Allowance for loan and lease losses at beginning of period	$	58,692			$	59,997			$	57,981			$	58,714			$	58,592
Charge-offs		(2,542	)			(1,604	)			(1,227	)			(3,605	)			(792	)
Recoveries		441				352				663				1,275				287
Net charge-offs		(2,101	)			(1,252	)			(564	)			(2,330	)			(505	)
Provision for loan and lease losses		1,450				(53	)			2,580				1,597				627
Allowance for loan and lease losses at end of period	$	58,041			$	58,692			$	59,997			$	57,981			$	58,714
Allowance for loan and lease losses as a percentage of total loans and leases		0.91	%			0.93	%			0.96	%			0.94	%			0.96	%
Allowance for loan and lease losses related to originated loans and leases as a percentage of originated loans and leases (non-GAAP)		0.93	%			0.96	%			1.00	%			0.98	%			1.03	%
NET CHARGE-OFFS:
Commercial real estate loans	$	—			$	—			$	—			$	100			$	3
Commercial loans and leases		2,124				883				579				2,304				532
Consumer loans		(23	)			369				(15	)			(74	)			(30	)
Total net charge-offs	$	2,101			$	1,252			$	564			$	2,330			$	505
Net loan and lease charge-offs as a percentage of average loans and leases (annualized)		0.13	%			0.08	%			0.04	%			0.15	%			0.03	%

 

BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Average Yields / Costs (Unaudited)
	Three Months Ended
	March 31, 2019										December 31, 2018										March 31, 2018
	Average Balance				Interest (1)			AverageYield/Cost			Average Balance				Interest (1)			AverageYield/Cost			Average Balance				Interest (1)			AverageYield/Cost
	(Dollars in Thousands)
Assets:
Interest-earning assets:
Investments:
Debt securities (2)	$	608,194			$	3,289		2.16	%		$	637,803			$	3,542		2.22	%		$	647,501			$	3,377		2.09	%
Marketable and restricted equity securities (2)		60,389				920		6.10	%			69,374				1,017		5.87	%			64,127				923		5.76	%
Short-term investments		33,034				267		3.23	%			50,728				256		2.02	%			30,664				120		1.57	%
Total investments		701,617				4,476		2.55	%			757,905				4,815		2.54	%			742,292				4,420		2.38	%
Loans and Leases:
Commercial real estate loans (3)		3,376,576				40,019		4.74	%			3,310,185				39,014		4.61	%			3,116,690				33,429		4.29	%
Commercial loans (3)		792,695				9,603		4.85	%			825,582				10,007		4.75	%			785,936				8,424		4.29	%
Equipment financing (3)		988,193				17,985		7.28	%			959,706				17,145		7.15	%			875,304				14,864		6.79	%
Residential mortgage loans (3)		778,325				8,123		4.17	%			763,775				7,840		4.11	%			704,666				6,733		3.82	%
Other consumer loans (3)		408,177				5,051		5.01	%			404,747				4,883		4.78	%			382,194				3,941		4.18	%
Total loans and leases		6,343,966				80,781		5.09	%			6,263,995				78,889		5.04	%			5,864,790				67,391		4.60	%
Total interest-earning assets		7,045,583				85,257		4.84	%			7,021,900				83,704		4.77	%			6,607,082				71,811		4.35	%
Allowance for loan and lease losses		(58,749	)									(59,806	)									(58,986	)
Non-interest-earning assets		447,204										420,837										379,213
Total assets	$	7,434,038									$	7,382,931									$	6,927,309
Liabilities and Stockholders' Equity:
Interest-bearing liabilities:
Deposits:
NOW accounts	$	334,167				142		0.17	%		$	333,592				88		0.10	%		$	335,990				58		0.07	%
Savings accounts		626,414				597		0.39	%			616,766				526		0.34	%			649,224				401		0.25	%
Money market accounts		1,676,199				5,275		1.28	%			1,647,346				4,914		1.18	%			1,772,362				2,558		0.59	%
Certificates of deposit		1,844,511				9,934		2.18	%			1,701,254				8,216		1.92	%			1,247,049				4,082		1.33	%
Total interest-bearing deposits		4,481,291				15,948		1.44	%			4,298,958				13,744		1.27	%			4,004,625				7,099		0.72	%
Borrowings
Advances from the FHLBB		755,542				4,610		2.44	%			903,342				5,227		2.26	%			956,298				3,748		1.57	%
Subordinated debentures and notes		83,451				1,308		6.27	%			83,410				1,302		6.24	%			83,289				1,282		6.16	%
Other borrowed funds		88,600				221		1.01	%			50,829				112		0.87	%			36,147				19		0.21	%
Total borrowings		927,593				6,139		2.65	%			1,037,581				6,641		2.50	%			1,075,734				5,049		1.88	%
Total interest-bearing liabilities		5,408,884				22,087		1.66	%			5,336,539				20,385		1.52	%			5,080,359				12,148		0.97	%
Non-interest-bearing liabilities:
Demand checking accounts		1,026,970										1,028,086										931,685
Other non-interest-bearing liabilities		111,174										109,261										77,169
Total liabilities		6,547,028										6,473,886										6,089,213
Brookline Bancorp, Inc. stockholders’ equity		886,639										899,244										829,598
Noncontrolling interest in subsidiary		371										9,801										8,498
Total liabilities and equity	$	7,434,038									$	7,382,931									$	6,927,309
Net interest income (tax-equivalent basis) /Interest-rate spread (4)						63,170		3.18	%							63,319		3.25	%							59,663		3.38	%
Less adjustment of tax-exempt income						171										160										172
Net interest income					$	62,999									$	63,159									$	59,491
Net interest margin (5)								3.64	%									3.58	%									3.66	%
(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 March 31,
														2019				2018
Reconciliation Table - Non-GAAP Financial Information													(Dollars in Thousands Except Share Data)
Net income attributable to Brookline Bancorp, Inc.													$	22,467			$	18,633
Less:
Security gains (after-tax)														103				883
Add:
Merger and acquisition-related expenses (after-tax)														—				2,208
Operating earnings													$	22,364			$	19,958
Operating earnings per common share:
Basic													$	0.28			$	0.26
Diluted														0.28				0.26
Weighted average common shares outstanding during the period:
Basic														79,658,583				77,879,593
Diluted														79,843,578				78,167,800
Return on average assets *														1.21	%			1.08	%
Less:
Security gains (after-tax) *														0.01	%			0.05	%
Add:
Merger and acquisition-related expenses (after-tax) *														—	%			0.12	%
Operating return on average assets *														1.20	%			1.15	%
Return on average tangible assets *														1.24	%			1.10	%
Less:
Security gains (after-tax) *														0.01	%			0.05	%
Add:
Merger and acquisition-related expenses (after-tax) *														—	%			0.13	%
Operating return on average tangible assets *														1.23	%			1.18	%
Return on average stockholders' equity *														10.14	%			8.98	%
Less:
Security gains (after-tax) *														0.05	%			0.43	%
Add:
Merger and acquisition-related expenses (after-tax) *														—	%			1.07	%
Operating return on average stockholders' equity *														10.09	%			9.62	%
Return on average tangible stockholders' equity *														12.48	%			11.01	%
Less:
Security gains (after-tax) *														0.06	%			0.52	%
Add:
Merger and acquisition-related expenses (after-tax) *														—	%			1.30	%
Operating return on average tangible stockholders' equity *														12.42	%			11.79	%
* Ratios at and for the three and nine months ended are annualized.
	At and for the Three Months Ended
	March 31, 2019				December 31, 2018				September 30, 2018				June 30, 2018				March 31, 2018
	(Dollars in Thousands)
Net income, as reported	$	22,467			$	21,138			$	22,460			$	20,831			$	18,633
Average total assets	$	7,434,038			$	7,382,931			$	7,302,413			$	7,273,793			$	6,927,309
Less: Average goodwill and average identified intangible assets, net		166,327				166,777				167,313				168,185				152,377
Average tangible assets	$	7,267,711			$	7,216,154			$	7,135,100			$	7,105,608			$	6,774,932
Return on average tangible assets (annualized)		1.24	%			1.17	%			1.26	%			1.17	%			1.10	%
Average total stockholders’ equity	$	886,639			$	899,244			$	889,259			$	874,513			$	829,598
Less: Average goodwill and average identified intangible assets, net		166,327				166,777				167,313				168,185				152,377
Average tangible stockholders’ equity	$	720,312			$	732,467			$	721,946			$	706,328			$	677,221
Return on average tangible stockholders’ equity (annualized)		12.48	%			11.54	%			12.44	%			11.80	%			11.01	%
Brookline Bancorp, Inc. stockholders’ equity	$	900,572			$	900,140			$	890,368			$	877,283			$	865,777
Less:
Goodwill		160,427				160,427				160,427				160,427				160,896
Identified intangible assets, net		5,684				6,086				6,623				7,160				7,697
Tangible stockholders' equity	$	734,461			$	733,627			$	723,318			$	709,696			$	697,184
Total assets	$	7,519,130			$	7,392,805			$	7,320,596			$	7,285,710			$	7,248,114
Less:
Goodwill		160,427				160,427				160,427				160,427				160,896
Identified intangible assets, net		5,684				6,086				6,623				7,160				7,697
Tangible assets	$	7,353,019			$	7,226,292			$	7,153,546			$	7,118,123			$	7,079,521
Tangible stockholders’ equity to tangible assets		9.99	%			10.15	%			10.11	%			9.97	%			9.85	%
Tangible stockholders' equity	$	734,461			$	733,627			$	723,318			$	709,696			$	697,184
Number of common shares issued		85,177,172				85,177,172				85,177,172				85,177,172				85,177,172
Less:
Treasury shares		5,020,025				5,020,025				4,291,317				4,409,501				4,401,333
Unallocated ESOP shares		104,079				109,950				118,050				126,144				134,238
Unvested restricted shares		390,636				393,636				398,094				455,283				455,283
Number of common shares outstanding		79,662,432				79,653,561				80,369,711				80,186,244				80,186,318
Tangible book value per common share	$	9.22			$	9.21			$	9.00			$	8.85			$	8.69
Allowance for loan and lease losses	$	58,041			$	58,692			$	59,997			$	57,981			$	58,714
Less:
Allowance for acquired loans and leases losses		1,795				1,814				1,817				1,961				910
Allowance for originated loan and lease losses	$	56,246			$	56,878			$	58,180			$	56,020			$	57,804
Total loans and leases	$	6,388,197			$	6,303,516			$	6,227,707			$	6,171,274			$	6,114,461
Less:
Total acquired loans and leases		370,177				394,407				426,865				460,142				482,237
Total originated loans and leases	$	6,018,020			$	5,909,109			$	5,800,842			$	5,711,132			$	5,632,224
Allowance for loan and lease losses related to originated loans and leases as a percentage of originated loans and leases		0.93	%			0.96	%			1.00	%			0.98	%			1.03	%