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Brookline Bancorp Announces Fourth Quarter Results

Net Income of $22.2 million, EPS of $0.28

Record 2019 Net Income of $87.7 million, EPS of $1.10

BOSTON, Jan. 29, 2020 (GLOBE NEWSWIRE) -- Brookline Bancorp, Inc. (BRKL) (the “Company”) today announced net income of $22.2 million, or $0.28 per basic and diluted share, for the fourth quarter of 2019, compared to $22.6 million, or $0.28 per basic and diluted share, for the third quarter of 2019, and $21.1 million, or $0.26 per basic and diluted share, for the fourth quarter of 2018.

For the year ended December 31, 2019, the Company reported net income of $87.7 million, or $1.10 per basic and diluted share. This compared to $83.1 million, or $1.04 per basic and diluted share, for the year ended December 31, 2018.

President and Chief Executive Officer Paul Perrault commented on the Company’s performance in 2019. “We had another successful year of solid growth and returns for our stockholders in 2019. For the second straight year Brookline Bancorp has achieved record earnings per share and net income. I would like to thank all of our employees for their hard work and dedication, demonstrating the values of Brookline Bancorp, as we position ourselves for continued success and growth in the new decade.”

On December 4, 2019, the Board of Directors (the “Board”) of the Company approved a stock repurchase program authorizing management to repurchase up to $10.0 million of the Company’s common stock over a period of twelve months commencing on January 1, 2020 and ending on December 31, 2020.

BALANCE SHEET

Total assets at December 31, 2019 decreased $21.6 million to $7.86 billion from $7.88 billion at September 30, 2019, and increased $464.0 million from $7.39 billion at December 31, 2018. At December 31, 2019, total loans and leases were $6.74 billion, representing an increase of $91.0 million from September 30, 2019, and an increase of $434.3 million from December 31, 2018.

Investment securities at December 31, 2019 increased $22.3 million to $589.4 million, as compared to $567.1 million at September 30, 2019, and decreased $32.4 million from $621.8 million at December 31, 2018. As of December 31, 2019, securities and cash and cash equivalents represented 8.5 percent of total assets as compared to 9.5 percent and 9.6 percent as of September 30, 2019 and December 31, 2018, respectively.

Total deposits at December 31, 2019 increased $100.7 million to $5.83 billion from $5.73 billion at September 30, 2019 and increased $376.0 million from $5.45 billion at December 31, 2018.

Total borrowed funds at December 31, 2019 decreased $83.7 million to $902.7 million from $986.4 million at September 30, 2019 and decreased $17.8 million from $920.5 million at December 31, 2018.

The ratio of stockholders’ equity to total assets was 12.04 percent at December 31, 2019, as compared to 11.83 percent at September 30, 2019, and 12.18 percent at December 31, 2018. The ratio of tangible stockholders’ equity to tangible assets was 10.15 percent at December 31, 2019, as compared to 9.94 percent at September 30, 2019, and 10.15 percent at December 31, 2018. Tangible book value per share increased $0.17 from $9.63 at September 30, 2019 to $9.80 at December 31, 2019, compared to $9.21 at December 31, 2018.

NET INTEREST INCOME

Net interest income increased $0.7 million to $63.9 million during the fourth quarter of 2019 from $63.2 million for the quarter ended September 30, 2019. The net interest margin decreased 2 basis points to 3.43 percent for the three months ended December 31, 2019 from 3.45 percent for the three months ended September 30, 2019.

NON-INTEREST INCOME

Non-interest income for the quarter ended December 31, 2019 decreased $0.1 million to $7.8 million from $7.9 million for the quarter ended September 30, 2019. The decrease was primarily driven by decreases of $0.2 million in revenue on sales of loans and leases and $0.3 million in other non-interest income; partially offset by increases of $0.2 million in loan level derivative income and $0.2 million in gain on securities.

PROVISION FOR CREDIT LOSSES

The Company recorded a provision for credit losses of $3.6 million for the quarter ended December 31, 2019, compared to $0.9 million for the quarter ended September 30, 2019.

Total net charge-offs for the fourth quarter of 2019 were $1.6 million compared to $0.4 million in the third quarter of 2019. The ratio of net loan and lease charge-offs to average loans and leases on an annualized basis increased to 10 basis points for the fourth quarter of 2019 from 2 basis points for the third quarter of 2019.

The allowance for loan and lease losses represented 0.91 percent of total loans and leases at December 31, 2019, compared to 0.89 percent at September 30, 2019, and 0.93 percent at December 31, 2018. The allowance for loan and lease losses related to originated loans and leases represented 0.91 percent of originated loans and leases at December 31, 2019, compared to 0.90 percent at September 30, 2019, and 0.96 percent at December 31, 2018.

NON-INTEREST EXPENSE

Non-interest expense for the quarter ended December 31, 2019 decreased $1.4 million to $38.8 million from $40.2 million for the quarter ended September 30, 2019. The decrease was primarily driven by decreases of $0.9 million in compensation and employee benefits, $0.1 million in equipment and data processing and $1.1 million in merger and acquisition expense, partially offset by an increase of $0.7 million in other non-interest expense.

PROVISION FOR INCOME TAXES

The effective tax rate was 24.2 percent and 24.4 percent for the three and twelve months ended December 31, 2019, respectively.

RETURNS ON AVERAGE ASSETS AND AVERAGE EQUITY

The annualized return on average assets decreased to 1.13 percent during the fourth quarter of 2019 compared to 1.17 percent for the third quarter of 2019; and was 1.15 percent for the year ended December 31, 2019, compared to 1.15 percent for the year ended December 31, 2018.

The annualized return on average tangible stockholders' equity decreased to 11.42 percent during the fourth quarter of 2019 compared to 11.85 percent for the third quarter of 2019; and was 11.67 percent for the year ended December 31, 2019 compared to 11.70 percent for the year ended December 31, 2018.

ASSET QUALITY

The ratio of total nonperforming loans and leases to total loans and leases was 0.29 percent at December 31, 2019 as compared to 0.33 percent at September 30, 2019. Nonperforming loans and leases decreased $2.1 million to $19.5 million at December 31, 2019 from $21.6 million at September 30, 2019. The ratio of nonperforming assets to total assets was 0.28 percent at December 31, 2019 as compared to 0.30 percent at September 30, 2019. Nonperforming assets decreased $1.7 million to $22.1 million at December 31, 2019 from $23.8 million at September 30, 2019.

DIVIDEND DECLARED

The Company’s Board approved a dividend of $0.115 per share for the quarter ended December 31, 2019. The dividend will be paid on February 28, 2020 to stockholders of record on February 14, 2020.

CONFERENCE CALL

The Company will conduct a conference call/webcast at 1:30 PM Eastern Daylight Time on Thursday, January 30, 2020 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 10137889. 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 $7.9 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   At and for the Twelve Months Ended
  December 31, 2019   September 30, 2019   June 30, 2019   March 31, 2019   December 31, 2018   December 31, 2019   December 31, 2018
  (Dollars In Thousands Except per Share Data)
Earnings Data:                          
Net interest income $ 63,931     $ 63,236     $ 63,134     $ 62,999     $ 63,159     $ 253,300     $ 247,699  
Provision for credit losses   3,602       871       3,757       1,353       123       9,583       4,951  
Non-interest income   7,756       7,929       7,478       6,630       6,461       29,793       25,224  
Non-interest expense   38,815       40,191       39,604       38,871       40,282       157,481       155,232  
Income before provision for income taxes   29,270       30,103       27,251       29,405       29,215       116,029       112,740  
Net income attributable to Brookline Bancorp, Inc.   22,183       22,596       20,471       22,467       21,138       87,717       83,062  
                           
Performance Ratios:                          
Net interest margin (1)   3.43 %     3.45 %     3.55 %     3.64 %     3.58 %     3.51 %     3.61 %
Interest-rate spread (1)   3.05 %     3.06 %     3.13 %     3.18 %     3.25 %     3.10 %     3.32 %
Return on average assets (annualized)   1.13 %     1.17 %     1.08 %     1.21 %     1.15 %     1.15 %     1.15 %
Return on average tangible assets (annualized) (non-GAAP)   1.15 %     1.19 %     1.11 %     1.24 %     1.17 %     1.17 %     1.18 %
Return on average stockholders' equity (annualized)   9.42 %     9.74 %     8.98 %     10.14 %     9.40 %     9.56 %     9.51 %
Return on average tangible stockholders' equity (annualized) (non-GAAP)   11.42 %     11.85 %     10.98 %     12.48 %     11.54 %     11.67 %     11.70 %
Efficiency ratio (2)   54.15 %     56.48 %     56.09 %     55.83 %     57.86 %     55.63 %     56.88 %
                           
Per Common Share Data:                          
Net income — Basic $ 0.28     $ 0.28     $ 0.26     $ 0.28     $ 0.26     $ 1.10     $ 1.04  
Net income — Diluted   0.28       0.28       0.26       0.28       0.26       1.10       1.04  
Cash dividends declared   0.115       0.115       0.110       0.110       0.105       0.450       0.395  
Book value per share (end of period)   11.87       11.70       11.53       11.30       11.30       11.87       11.30  
Tangible book value per share (end of period) (non-GAAP)   9.80       9.63       9.45       9.22       9.21       9.80       9.21  
Stock price (end of period)   16.46       14.73       15.38       14.40       13.82       16.46       13.82  
                           
Balance Sheet:                          
Total assets $ 7,856,853     $ 7,878,436     $ 7,636,980     $ 7,519,130     $ 7,392,805     $ 7,856,853     $ 7,392,805  
Total loans and leases   6,737,816       6,646,821       6,505,329       6,388,197       6,303,516       6,737,816       6,303,516  
Total deposits   5,830,072       5,729,339       5,622,493       5,620,633       5,454,044       5,830,072       5,454,044  
Brookline Bancorp, Inc. stockholders’ equity   945,606       932,311       918,468       900,572       900,140       945,606       900,140  
                           
Asset Quality:                          
Nonperforming assets $ 22,092     $ 23,760     $ 23,267     $ 26,721     $ 28,116     $ 22,092     $ 28,116  
Nonperforming assets as a percentage of total assets   0.28 %     0.30 %     0.30 %     0.36 %     0.38 %     0.28 %     0.38 %
Allowance for loan and lease losses $ 61,082     $ 59,135     $ 58,635     $ 58,041     $ 58,692     $ 61,082     $ 58,692  
Allowance for loan and lease losses as a percentage of total loans and leases   0.91 %     0.89 %     0.90 %     0.91 %     0.93 %     0.91 %     0.93 %
Net loan and lease charge-offs $ 1,622     $ 366     $ 3,082     $ 2,101     $ 1,252     $ 7,171     $ 4,651  
Net loan and lease charge-offs as a percentage of average loans and leases (annualized)   0.10 %     0.02 %     0.19 %     0.13 %     0.08 %     0.11 %     0.08 %
                           
Capital Ratios:                          
Stockholders’ equity to total assets   12.04 %     11.83 %     12.03 %     11.98 %     12.18 %     12.04 %     12.18 %
Tangible stockholders’ equity to tangible assets (non-GAAP)   10.15 %     9.94 %     10.08 %     9.99 %     10.15 %     10.15 %     10.15 %
                           
(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.                          
                           



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BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Consolidated Balance Sheets (Unaudited)
  December 31, 2019   September 30, 2019   June 30, 2019   March 31, 2019   December 31, 2018
ASSETS (In Thousands Except Share Data)
Cash and due from banks $ 33,589     $ 93,841     $ 46,532     $ 51,276     $ 47,542  
Short-term investments   44,201       84,689       46,264       61,063       42,042  
Total cash and cash equivalents   77,790       178,530       92,796       112,339       89,584  
Investment securities available-for-sale   498,995       467,339       482,497       489,020       502,793  
Investment securities held-to-maturity   86,780       95,163       103,572       113,694       114,776  
Investment securities trading   3,581       4,581       4,698       4,341       4,207  
Total investment securities   589,356       567,083       590,767       607,055       621,776  
Loans and leases held-for-sale               1,575       869       3,247  
Loans and leases:                  
Commercial real estate loans:                  
Commercial real estate mortgage   2,491,011       2,441,091       2,421,104       2,355,507       2,330,725  
Multi-family mortgage   932,163       919,234       877,330       855,703       847,711  
Construction   246,048       229,126       195,120       199,258       173,300  
Total commercial real estate loans   3,669,222       3,589,451       3,493,554       3,410,468       3,351,736  
Commercial loans and leases:                  
Commercial   729,502       766,883       763,145       741,577       736,418  
Equipment financing   1,052,408       1,029,280       1,015,205       995,863       982,089  
Condominium association   56,838       54,225       47,986       49,142       50,451  
Total commercial loans and leases   1,838,748       1,850,388       1,826,336       1,786,582       1,768,958  
Consumer loans:                  
Residential mortgage   814,245       792,733       769,983       775,578       782,968  
Home equity   376,819       375,257       374,746       376,126       376,484  
Other consumer   38,782       38,992       40,710       39,443       23,370  
Total consumer loans   1,229,846       1,206,982       1,185,439       1,191,147       1,182,822  
Total loans and leases   6,737,816       6,646,821       6,505,329       6,388,197       6,303,516  
Allowance for loan and lease losses   (61,082 )     (59,135 )     (58,635 )     (58,041 )     (58,692 )
Net loans and leases   6,676,734       6,587,686       6,446,694       6,330,156       6,244,824  
Restricted equity securities   53,818       57,896       55,270       54,192       61,751  
Premises and equipment, net of accumulated depreciation   74,350       75,229       75,373       75,520       76,382  
Right-of-use asset operating leases   24,876       26,216       25,928       26,205        
Deferred tax asset ("DTA")   25,017       25,204       25,629       27,084       21,495  
Goodwill   160,427       160,427       160,427       160,427       160,427  
Identified intangible assets, net of accumulated amortization   4,423       4,843       5,264       5,684       6,086  
Other real estate owned and repossessed assets   2,631       2,132       1,966       3,912       4,019  
Other assets   167,431       193,190       155,291       115,687       103,214  
Total assets $ 7,856,853     $ 7,878,436     $ 7,636,980     $ 7,519,130     $ 7,392,805  
LIABILITIES AND STOCKHOLDERS' EQUITY                  
Deposits:                  
Non-interest-bearing deposits:                  
Demand checking accounts $ 1,141,578     $ 1,106,684     $ 1,042,854     $ 1,011,031     $ 1,033,551  
Interest-bearing deposits:                  
NOW accounts   371,380       340,321       340,082       369,896       336,317  
Savings accounts   613,467       604,481       585,322       625,770       619,961  
Money market accounts   1,682,005       1,666,231       1,669,782       1,706,708       1,675,050  
Certificate of deposit accounts   2,021,642       2,011,622       1,984,453       1,907,228       1,789,165  
Total interest-bearing deposits   4,688,494       4,622,655       4,579,639       4,609,602       4,420,493  
Total deposits   5,830,072       5,729,339       5,622,493       5,620,633       5,454,044  
Borrowed funds:                  
Advances from the FHLBB   758,469       854,481       791,559       730,018       784,375  
Subordinated debentures and notes   83,591       83,551       83,512       83,472       83,433  
Other borrowed funds   60,689       48,373       55,693       52,515