U.S. Markets closed

Brookline Bancorp Announces Second Quarter Results Net Income of $20.5 million, EPS of $0.26

BOSTON, July 24, 2019 (GLOBE NEWSWIRE) -- Brookline Bancorp, Inc. (BRKL) (the “Company”) today announced net income of $20.5 million, or $0.26 per basic and diluted share, for the second quarter of 2019, compared to $22.5 million, or $0.28 per basic and diluted share, for the first quarter of 2019, and $20.8 million, or $0.26 per basic and diluted share, for the second quarter of 2018.

Paul Perrault, President and Chief Executive Officer of the Company commented on the second quarter earnings, "We are pleased to report another strong quarter to our stockholders. The Company continues to have broad-based loan growth, solid returns, and strong asset quality. Brookline Bancorp and its employees continue to execute on our strategy of high performance for both our customers and our stockholders."

BALANCE SHEET

Total assets at June 30, 2019 increased $117.9 million to $7.6 billion from $7.5 billion at March 31, 2019, and increased $351.3 million from $7.3 billion at June 30, 2018, primarily driven by growth in the loan portfolio. At June 30, 2019, total loans and leases were $6.5 billion, representing an increase of $117.1 million from March 31, 2019, and an increase of $334.1 million from June 30, 2018, primarily driven by growth in the commercial real estate portfolio.

In the second quarter the Company continued to redirect cash flows from the investment portfolio to fund loan demand. Investment securities at June 30, 2019 decreased $16.3 million to $590.8 million, comprising 7.74 percent of total assets, as compared to $607.1 million, or 8.07 percent of total assets, at March 31, 2019, and decreased approximately $84.5 million from $675.3 million, or 9.27 percent of total assets, at June 30, 2018.

Total deposits at June 30, 2019 increased $1.9 million from March 31, 2019 to $5.6 billion and increased $424.2 million from $5.2 billion at June 30, 2018 driven primarily by growth in certificates of deposit.

Total borrowed funds at June 30, 2019 increased $64.8 million to $930.8 million from $866.0 million at March 31, 2019 and decreased $180.2 million from $1.1 billion at June 30, 2018.

The ratio of stockholders’ equity to total assets was 12.03 percent at June 30, 2019, as compared to 11.98 percent at March 31, 2019, and 12.04 percent at June 30, 2018. The ratio of tangible stockholders’ equity to tangible assets was 10.08 percent at June 30, 2019, as compared to 9.99 percent at March 31, 2019, and 9.97 percent at June 30, 2018. Tangible book value per share increased $0.23 from $9.22 at March 31, 2019 to $9.45 at June 30, 2019, compared to $8.85 at June 30, 2018.

NET INTEREST INCOME

Net interest income increased $0.1 million to $63.1 million during the second quarter of 2019 from $63.0 million at the quarter ended March 31, 2019. The net interest margin decreased 9 basis points to 3.55 percent for the three months ended June 30, 2019.

NON-INTEREST INCOME

Non-interest income for the quarter ended June 30, 2019 increased $0.9 million to $7.5 million from $6.6 million for the quarter ended March 31, 2019. The increase was primarily driven by increases of $0.2 million in deposit fees, $0.2 million in gain on securities, $0.3 million in gain on sales of loans and leases, and $0.2 million in other non-interest income.

PROVISION FOR CREDIT LOSSES

The Company recorded a provision for credit losses of $3.8 million for the quarter ended June 30, 2019, compared to $1.4 million for the quarter ended March 31, 2019. The higher provision for credit losses is a result of strong loan growth and net higher charge-offs during the quarter.

Total net charge-offs for the second quarter of 2019 were $3.1 million compared to $2.1 million in the first quarter of 2019. The $3.1 million in net charge-offs had previously established specific reserves of $1.0 million versus first quarter net charge-offs of $2.1 million which had previously established reserves of $1.0 million. The ratio of net loan and lease charge-offs to average loans and leases on an annualized basis increased to 19 basis points for the second quarter of 2019 from 13 basis points for the first quarter of 2019.

The allowance for loan and lease losses represented 0.90 percent of total loans and leases at June 30, 2019, compared to 0.91 percent at March 31, 2019, and 0.94 percent at June 30, 2018. The allowance for loan and lease losses related to originated loans and leases represented 0.92 percent of originated loans and leases at June 30, 2019, compared to 0.93 percent at March 31, 2019, and 0.98 percent at June 30, 2018.

NON-INTEREST EXPENSE

Non-interest expense for the quarter ended June 30, 2019 increased $0.7 million to $39.6 million from $38.9 million for the quarter ended March 31, 2019. The increase was primarily driven by increases of $0.2 million in compensation and employee benefits expense, $0.2 million in FDIC insurance, and $0.5 million in other non-interest expense, partially offset by a decrease of $0.2 million in occupancy expense.

PROVISION FOR INCOME TAXES

The effective tax rate was 24.9 percent and 24.1 percent for the three and six months ended June 30, 2019 compared to 23.4 percent for the three months ended March 31, 2019.

RETURNS ON AVERAGE ASSETS AND AVERAGE EQUITY

The annualized return on average assets decreased to 1.08 percent during the second quarter of 2019 from 1.21 percent for the first quarter of 2019. The annualized return on average tangible assets decreased to 1.11 percent for the second quarter of 2019 from 1.24 percent for the first quarter of 2019.

The annualized return on average stockholders' equity decreased to 8.98 percent during the second quarter of 2019 from 10.14 percent for the first quarter of 2019. The annualized return on average tangible stockholders’ equity decreased to 10.98 percent for the second quarter of 2019 from 12.48 percent for the first quarter of 2019.

ASSET QUALITY

The ratio of nonperforming loans and leases to total loans and leases was 0.33 percent at June 30, 2019 as compared to 0.36 percent at March 31, 2019. Nonperforming loans and leases decreased $1.5 million to $21.3 million at June 30, 2019 from $22.8 million at March 31, 2019. The ratio of nonperforming assets to total assets was 0.30 percent at June 30, 2019 as compared to 0.36 percent at March 31, 2019. Nonperforming assets decreased $3.4 million to $23.3 million at June 30, 2019 from $26.7 million at March 31, 2019.

DIVIDEND DECLARED

The Company’s Board of Directors approved a dividend of $0.11 per share for the quarter ended June 30, 2019. The dividend will be paid on August 23, 2019 to stockholders of record on August 9, 2019.

CONFERENCE CALL

The Company will conduct a conference call/webcast at 1:30 PM Eastern Daylight Time on Thursday, July 25, 2019 to discuss the results for the quarter, business highlights and outlook. The call can be accessed by dialing 877-504-4120 (United States) or 412-902-6650 (internationally).  A recorded playback of the call will be available for one week following the call at 877-344-7529 (United States) or 412-317-0088 (internationally). The passcode for the playback is 10132476. The call will be available live and in a recorded version on the Company’s website under “Investor Relations” at www.brooklinebancorp.com.

ABOUT BROOKLINE BANCORP, INC.

Brookline Bancorp, Inc., a bank holding company with $7.6 billion in assets and branch locations in Massachusetts and Rhode Island, is headquartered in Boston, Massachusetts and operates as the holding company for Brookline Bank, Bank Rhode Island, and First Ipswich Bank (the "banks"). The Company provides commercial and retail banking services, cash management and investment services to customers throughout Central New England. More information about Brookline Bancorp, Inc. and its banks can be found at the following websites: www.brooklinebank.com, www.bankri.com, and www.firstipswich.com.

FORWARD-LOOKING STATEMENTS

Certain statements contained in this press release that are not historical facts may constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and are intended to be covered by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve risks and uncertainties. The Company’s actual results could differ materially from those projected in the forward-looking statements as a result of, among others, the risks outlined in the Company’s Annual Report on Form 10-K, as updated by its Quarterly Reports on Form 10-Q and other filings submitted to the Securities and Exchange Commission ("SEC"). The Company does not undertake any obligation to update any forward-looking statement to reflect circumstances or events that occur after the date the forward-looking statements are made.

BASIS OF PRESENTATION

The Company's consolidated financial statements have been prepared in conformity with generally accepted accounting principles (“GAAP”) as set forth by the Financial Accounting Standards Board in its Accounting Standards Codification and through the rules and interpretive releases of the SEC under the authority of federal securities laws. Certain amounts previously reported have been reclassified to conform to the current period's presentation.

NON-GAAP FINANCIAL MEASURES

The Company uses certain non-GAAP financial measures, such as operating earnings, operating return on average assets, operating return on average tangible assets, operating return on average stockholders' equity, operating return on average tangible stockholders' equity, the allowance for loan and lease losses related to originated loans and leases as a percentage of originated loans and leases, tangible book value per common share, tangible stockholders’ equity to tangible assets, return on average tangible assets (annualized) and return on average tangible stockholders' equity (annualized). These non-GAAP financial measures provide information for investors to effectively analyze financial trends of ongoing business activities, and to enhance comparability with peers across the financial services sector. A detailed reconciliation table of the Company's GAAP to the non-GAAP measures is attached.

Contact: Carl M. 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
  June 30,
2019
  March 31,
2019
  December 31,
2018
  September 30,
2018
  June 30,
2018
  (Dollars In Thousands Except per Share Data)
Earnings Data:                  
Net interest income $   63,134      $   62,999      $   63,159      $   62,332      $   62,717   
Provision for credit losses    3,757         1,353         123         2,717         1,470   
Non-interest income    7,478         6,630         6,461         7,069         5,526   
Non-interest expense    39,604         38,871         40,282         37,310         37,702   
Income before provision for income taxes    27,251         29,405         29,215         29,374         29,071   
Net income attributable to Brookline Bancorp, Inc.    20,471         22,467         21,138         22,460         20,831   
                   
Performance Ratios:                  
Net interest margin (1)   3.55 %     3.64 %     3.58 %     3.57 %     3.64 %
Interest-rate spread (1)   3.13 %     3.18 %     3.25 %     3.27 %     3.36 %
Return on average assets (annualized)   1.08 %     1.21 %     1.15 %     1.23 %     1.15 %
Return on average tangible assets (annualized) (non-GAAP)   1.11 %     1.24 %     1.17 %     1.26 %     1.17 %
Return on average stockholders' equity (annualized)   8.98 %     10.14 %     9.40 %     10.10 %     9.53 %
Return on average tangible stockholders' equity (annualized) (non-GAAP)   10.98 %     12.48 %     11.54 %     12.44 %     11.80 %
Efficiency ratio (2)   56.09 %     55.83 %     57.86 %     53.76 %     55.25 %
                   
Per Common Share Data:                  
Net income — Basic $   0.26      $   0.28      $   0.26      $   0.28      $   0.26   
Net income — Diluted    0.26         0.28         0.26         0.28         0.26   
Cash dividends declared    0.110         0.110         0.105         0.105         0.100   
Book value per share (end of period)    11.53         11.30         11.30         11.08         10.94   
Tangible book value per share (end of period) (non-GAAP)    9.45         9.22         9.21         9.00         8.85   
Stock price (end of period)    15.38         14.40         13.82         16.70         18.60   
 
Balance Sheet:                  
Total assets $   7,636,980      $   7,519,130      $   7,392,805      $   7,320,596      $   7,285,710   
Total loans and leases    6,505,329         6,388,197         6,303,516         6,227,707         6,171,274   
Total deposits    5,622,493         5,620,633         5,454,044         5,233,611         5,198,280   
Brookline Bancorp, Inc. stockholders’ equity    918,468         900,572         900,140         890,368         877,283   
                   
Asset Quality:                  
Nonperforming assets $   23,267      $   26,721      $   28,116      $   29,718      $   30,145   
Nonperforming assets as a percentage of total assets   0.30 %     0.36 %     0.38 %     0.41 %     0.41 %
Allowance for loan and lease losses $   58,635      $   58,041      $   58,692      $   59,997      $   57,981   
Allowance for loan and lease losses as a percentage of total loans and leases   0.90 %     0.91 %     0.93 %     0.96 %     0.94 %
Net loan and lease charge-offs $   3,082      $   2,101      $   1,252      $   564      $   2,330   
Net loan and lease charge-offs as a percentage of average loans and leases (annualized)   0.19 %     0.13 %     0.08 %     0.04 %     0.15 %
                   
Capital Ratios:                  
Stockholders’ equity to total assets   12.03 %     11.98 %     12.18 %     12.16 %     12.04 %
Tangible stockholders’ equity to tangible assets (non-GAAP)   10.08 %     9.99 %     10.15 %     10.11 %     9.97 %
                   
(1) Calculated on a fully tax-equivalent basis.                  
(2) Calculated as non-interest expense as a percentage of net interest income plus non-interest income.                  
 

 

null
BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Consolidated Balance Sheets (Unaudited)
  June 30, 2019   March 31, 2019   December 31, 2018   September 30, 2018   June 30, 2018
ASSETS (In Thousands Except Share Data)
Cash and due from banks $   46,532      $   51,276      $   47,542      $   30,762      $   32,724   
Short-term investments    46,264         61,063         42,042         23,114         22,754   
Total cash and cash equivalents    92,796         112,339         89,584         53,876         55,478   
Investment securities available-for-sale    482,497         489,020         502,793         534,788         558,602   
Investment securities held-to-maturity    103,572         113,694         114,776         115,684         116,670   
Equity securities held-for-trading    4,698         4,341         4,207         4,169         —  
Total investment securities    590,767         607,055         621,776         654,641         675,272   
Loans and leases held-for-sale    1,575         869         3,247         937         1,034   
Loans and leases:                  
Commercial real estate loans:                  
Commercial real estate mortgage    2,421,104         2,355,507         2,330,725         2,287,979         2,269,520   
Multi-family mortgage    877,330         855,703         847,711         828,849         816,311   
Construction    195,120         199,258         173,300         164,217         178,335   
Total commercial real estate loans    3,493,554         3,410,468         3,351,736         3,281,045         3,264,166   
Commercial loans and leases:                  
Commercial    763,145         741,577         736,418         771,200         761,964   
Equipment financing    1,015,205         995,863         982,089         954,579         920,643   
Condominium association    47,986         49,142         50,451         52,205         53,537   
Total commercial loans and leases    1,826,336         1,786,582         1,768,958         1,777,984         1,736,144   
Consumer loans:                  
Residential mortgage    769,983         775,578         782,968         759,167         754,818   
Home equity    374,746         376,126         376,484         380,303         382,597   
Other consumer    40,710         39,443         23,370         29,208         33,549   
Total consumer loans    1,185,439         1,191,147         1,182,822         1,168,678         1,170,964   
Total loans and leases    6,505,329         6,388,197         6,303,516         6,227,707         6,171,274   
Allowance for loan and lease losses    (58,635 )      (58,041 )      (58,692 )      (59,997 )      (57,981 )
Net loans and leases    6,446,694         6,330,156         6,244,824         6,167,710         6,113,293   
Restricted equity securities    55,270         54,192         61,751         63,963         68,343   
Premises and equipment, net of accumulated depreciation    75,373         75,520         76,382         77,886         79,194   
Right-of-use asset operating leases    25,928         26,205         —        —        —  
Deferred tax asset    25,629         27,084         21,495         22,249         20,826   
Goodwill    160,427         160,427         160,427         160,427         160,427   
Identified intangible assets, net of accumulated amortization    5,264         5,684         6,086         6,623         7,160   
Other real estate owned and repossessed assets    1,966         3,912         4,019         3,934         4,352   
Other assets    155,291         115,687         103,214         108,350         100,331   
Total assets $   7,636,980      $   7,519,130      $   7,392,805      $   7,320,596      $   7,285,710   
LIABILITIES AND STOCKHOLDERS' EQUITY                  
Deposits:                  
Non-interest-bearing deposits:                  
Demand checking accounts $   1,042,854      $   1,011,031      $   1,033,551      $   1,017,234      $   1,002,954   
Interest-bearing deposits:                  
NOW accounts    340,082         369,896         336,317         322,587         346,936   
Savings accounts    585,322         625,770         619,961         612,210         603,079   
Money market accounts    1,669,782         1,706,708         1,675,050         1,623,220         1,704,652   
Certificate of deposit accounts    1,984,453         1,907,228         1,789,165         1,658,360         1,540,659   
Total interest-bearing deposits    4,579,639         4,609,602         4,420,493         4,216,377         4,195,326   
Total deposits    5,622,493         5,620,633         5,454,044         5,233,611         5,198,280   
Borrowed funds:                  
Advances from the FHLBB    791,559         730,018         784,375         959,446         991,091   
Subordinated debentures and notes    83,512         83,472         83,433         83,392         83,352   
Other borrowed funds    55,693         52,515         52,734         40,048         36,480   
Total borrowed funds    930,764         866,005         920,542         1,082,886         1,110,923   
Operating lease liabilities    25,928         26,205         —        —        —  
Mortgagors’ escrow accounts    6,823         7,517         7,426         8,227         8,122   
Accrued expenses and other liabilities    132,504         98,198         100,174