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

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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.

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

663

1,275

Net charge-offs

(3,082

)

(2,101

)

(1,252

)

(564

)

(2,330

)

Provision for loan and lease losses

3,676

1,450

(53

)

2,580

1,597

Allowance for loan and lease losses at end of period

$

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

%

Allowance for loan and lease losses related to originated loans and leases as a percentage of originated loans and leases (non-GAAP)

0.92

%

0.93

%

0.96

%

1.00

%

0.98

%

NET CHARGE-OFFS:

Commercial real estate loans

$

$

$

$

$

100

Commercial loans and leases

3,107

2,124

883

579

2,304

Consumer loans

(25

)

(23

)

369

(15

)

(74

)

Total net 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

%

BROOKLINE BANCORP, INC. AND SUBSIDIARIES

Average Yields / Costs (Unaudited)

Three Months Ended

June 30, 2019

March 31, 2019

June 30, 2018

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)

$

593,404

$

3,210

2.16

%

$

608,194

$

3,289

2.16

%

$

666,182

$

3,617

2.17

%

Marketable and restricted equity securities (2)

59,224

888

5.99

%

60,389

920

6.10

%

69,395

1,004

5.78

%

Short-term investments

44,634

351

3.14

%

33,034

267

3.23

%

41,155

179

1.74

%

Total investments

697,262

4,449

2.55

%

701,617

4,476

2.55

%

776,732

4,800

2.47

%

Loans and Leases:

Commercial real estate loans (3)

3,447,136

41,363

4.75

%

3,376,576

40,019

4.74

%

3,250,488

36,372

4.43

%

Commercial loans (3)

811,890

9,879

4.82

%

792,695

9,603

4.85

%

823,860

9,323

4.48

%

Equipment financing (3)

1,005,376

18,291

7.28

%

988,193

17,985

7.28

%

907,089

15,739

6.94

%

Residential mortgage loans (3)

774,533

8,186

4.23

%

778,325

8,123

4.17

%

759,866

7,552

3.98

%

Other consumer loans (3)

417,600

5,187

4.97

%

408,177

5,051

5.01

%

406,144

4,464

4.40

%

Total loans and leases

6,456,535

82,906

5.14

%

6,343,966

80,781

5.09

%

6,147,447

73,450

4.78

%

Total interest-earning assets

7,153,797

87,355

4.88

%

7,045,583

85,257

4.84

%

6,924,179

78,250

4.52

%

Allowance for loan and lease losses

(58,137

)

(58,749

)

(59,247

)

Non-interest-earning assets

475,736

447,204

408,861

Total assets

$

7,571,396

$

7,434,038

$

7,273,793

Liabilities and Stockholders' Equity:

Interest-bearing liabilities:

Deposits:

NOW accounts

$

343,745

50

0.06

%

$

334,167

142

0.17

%

$

346,410

65

0.07

%

Savings accounts

602,333

737

0.49

%

626,414

597

0.39

%

609,758

405

0.27

%

Money market accounts

1,683,735

5,571

1.33

%

1,676,199

5,275

1.28

%

1,767,509

3,530

0.80

%

Certificates of deposit

1,950,704

11,354

2.33

%

1,844,511

9,934

2.18

%

1,422,782

5,219

1.47

%

Total interest-bearing deposits

4,580,517

17,712

1.55

%

4,481,291

15,948

1.44

%

4,146,459

9,219

0.89

%

Borrowings

Advances from the FHLBB

761,651

4,825

2.51

%

755,542

4,610

2.44

%

1,018,130

4,696

1.82

%

Subordinated debentures and notes

83,490

1,305

6.25

%

83,451

1,308

6.27

%

83,330

1,296

6.22

%

Other borrowed funds

84,600

208

0.99

%

88,600

221

1.01

%

46,635

146

1.26

%

Total borrowings

929,741

6,338

2.70

%

927,593

6,139

2.65

%

1,148,095

6,138

2.11

%

Total interest-bearing liabilities

5,510,258

24,050

1.75

%

5,408,884

22,087

1.66

%

5,294,554

15,357

1.16

%

Non-interest-bearing liabilities:

Demand checking accounts

1,015,524

1,026,970

1,003,985

Other non-interest-bearing liabilities

133,790

111,174

91,889

Total liabilities

6,659,572

6,547,028

6,390,428

Brookline Bancorp, Inc.
stockholders’ equity

911,824

886,639

874,513

Noncontrolling interest in
subsidiary

371

8,852

Total liabilities and equity

$

7,571,396

$

7,434,038

$

7,273,793

Net interest income (tax-equivalent basis) /Interest-rate spread (4)

63,305

3.13

%

63,170

3.18

%

62,893

3.36

%

Less adjustment of tax-exempt income

171

171

176

Net interest income

$

63,134

$

62,999

$

62,717

Net interest margin (5)

3.55

%

3.64

%

3.64

%

(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)

Six Months Ended

June 30, 2019

June 30, 2018

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)

$

600,758

$

6,499

2.16

%

$

656,893

$

6,994

2.13

%

Marketable and restricted equity securities (2)

59,803

1,808

6.05

%

66,774

1,927

5.77

%

Short-term investments

38,866

618

3.18

%

35,938

299

1.67

%

Total investments

699,427

8,925

2.55

%

759,605

9,220

2.43

%

Loans and Leases:

Commercial real estate loans (3)

3,412,051

81,382

4.74

%

3,183,959

69,801

4.36

%

Commercial loans (3)

802,346

19,482

4.83

%

805,002

17,747

4.39

%

Equipment financing (3)

996,832

36,276

7.28

%

891,284

30,603

6.87

%

Residential mortgage loans (3)

776,419

16,309

4.20

%

732,418

14,285

3.90

%

Other consumer loans (3)

412,914

10,238

4.99

%

394,235

8,405

4.29

%

Total loans and leases

6,400,562

163,687

5.11

%

6,006,898

140,841

4.69

%

Total interest-earning assets

7,099,989

172,612

4.86

%

6,766,503

150,061

4.44

%

Allowance for loan and lease losses

(58,441

)

(59,117

)

Non-interest-earning assets

461,548

394,124

Total assets

$

7,503,096

$

7,101,510

Liabilities and Stockholders' Equity:

Interest-bearing liabilities:

Deposits:

NOW accounts

$

338,983

192

0.11

%

$

341,228

123

0.07

%

Savings accounts

614,307

1,334

0.44

%

629,382

806

0.26

%

Money market accounts

1,679,988

10,846

1.30

%

1,769,923

6,088

0.69

%

Certificates of deposit

1,897,901

21,288

2.26

%

1,335,401

9,301

1.40

%

Total interest-bearing deposits

4,531,179

33,660

1.50

%

4,075,934

16,318

0.81

%

Borrowings

Advances from the FHLBB

758,613

9,435

2.47

%

987,385

8,444

1.70

%

Subordinated debentures and notes

83,471

2,613

6.26

%

83,310

2,578

6.19

%

Other borrowed funds

86,589

429

1.00

%

41,420

165

0.80

%

Total borrowings

928,673

12,477

2.67

%

1,112,115

11,187

2.00

%

Total interest-bearing liabilities

5,459,852

46,137

1.70

%

5,188,049

27,505

1.07

%

Non-interest-bearing liabilities:

Demand checking accounts

1,021,215

968,035

Other non-interest-bearing liabilities

122,544

84,570

Total liabilities

6,603,611

6,240,654

Brookline Bancorp, Inc. stockholders’ equity

899,301

852,180

Noncontrolling interest in subsidiary

184

8,676

Total liabilities and equity

$

7,503,096

$

7,101,510

Net interest income (tax-equivalent basis) /Interest-rate spread (4)

126,475

3.16

%

122,556

3.37

%

Less adjustment of tax-exempt income

342

348

Net interest income

$

126,133

$

122,208

Net interest margin (5)

3.59

%

3.65

%

(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
June 30,

At and for the Six Months Ended
June 30,

2019

2018

2019

2018

Reconciliation Table - Non-GAAP Financial Information

(Dollars in Thousands Except Share Data)

Net income attributable to Brookline Bancorp, Inc.

$

20,471

$

20,831

$

42,938

$

39,464

Less:

Security gains (after-tax)

268

373

883

Add:

Merger and acquisition-related expenses (after-tax)

254

2,462

Operating earnings

$

20,203

$

21,085

$

42,565

$

41,043

Operating earnings per common share:

Basic

$

0.25

$

0.26

$

0.53

$

0.52

Diluted

0.25

0.26

0.53

0.52

Weighted average common shares outstanding during the period:

Basic

79,669,922

80,184,977

79,664,284

79,038,041

Diluted

79,886,292

80,505,614

79,859,572

79,342,463

Return on average assets *

1.08

%

1.15

%

1.14

%

1.11

%

Less:

Security gains (after-tax) *

0.01

%

%

0.01

%

0.02

%

Add:

Merger and acquisition-related expenses (after-tax) *

%

0.01

%

%

0.07

%

Operating return on average assets *

1.07

%

1.16

%

1.13

%

1.16

%

Return on average tangible assets *

1.11

%

1.17

%

1.17

%

1.14

%

Less:

Security gains (after-tax) *

0.02

%

%

0.01

%

0.03

%

Add:

Merger and acquisition-related expenses (after-tax) *

%

0.02

%

%

0.07

%

Operating return on average tangible assets *

1.09

%

1.19

%

1.16

%

1.18

%

Return on average stockholders' equity *

8.98

%

9.53

%

9.55

%

9.26

%

Less:

Security gains (after-tax) *

0.12

%

%

0.08

%

0.21

%

Add:

Merger and acquisition-related expenses (after-tax) *

%

0.11

%

%

0.58

%

Operating return on average stockholders' equity *

8.86

%

9.64

%

9.47

%

9.63

%

Return on average tangible stockholders' equity *

10.98

%

11.80

%

11.71

%

11.41

%

Less:

Security gains (after-tax) *

0.15

%

%

0.10

%

0.26

%

Add:

Merger and acquisition-related expenses (after-tax) *

%

0.14

%

%

0.71

%

Operating return on average tangible stockholders' equity *

10.83

%

11.94

%

11.61

%

11.86

%

* Ratios at and for the three and six months ended are annualized.

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)

Net income, as reported

$

20,471

$

22,467

$

21,138

$

22,460

$

20,831

Average total assets

$

7,571,396

$

7,434,038

$

7,382,931

$

7,302,413

$

7,273,793

Less: Average goodwill and average identified intangible assets, net

165,914

166,327

166,777

167,313

168,185

Average tangible assets

$

7,405,482

$

7,267,711

$

7,216,154

$

7,135,100

$

7,105,608

Return on average tangible assets (annualized)

1.11

%

1.24

%

1.17

%

1.26

%

1.17

%

Average total stockholders’ equity

$

911,824

$

886,639

$

899,244

$

889,259

$

874,513

Less: Average goodwill and average identified intangible assets, net

165,914

166,327

166,777

167,313

168,185

Average tangible stockholders’ equity

$

745,910

$

720,312

$

732,467

$

721,946

$

706,328

Return on average tangible stockholders’ equity (annualized)

10.98

%

12.48

%

11.54

%

12.44

%

11.80

%

Brookline Bancorp, Inc. stockholders’ equity

$

918,468

$

900,572

$

900,140

$

890,368

$

877,283

Less:

Goodwill

160,427

160,427

160,427

160,427

160,427

Identified intangible assets, net

5,264

5,684

6,086

6,623

7,160

Tangible stockholders' equity

$

752,777

$

734,461

$

733,627

$

723,318

$

709,696

Total assets

$

7,636,980

$

7,519,130

$

7,392,805

$

7,320,596

$

7,285,710

Less:

Goodwill

160,427

160,427

160,427

160,427

160,427

Identified intangible assets, net

5,264

5,684

6,086

6,623

7,160

Tangible assets

$

7,471,289

$

7,353,019

$

7,226,292

$

7,153,546

$

7,118,123

Tangible stockholders’ equity to tangible assets

10.08

%

9.99

%

10.15

%

10.11

%

9.97

%

Tangible stockholders' equity

$

752,777

$

734,461

$

733,627

$

723,318

$

709,696

Number of common shares issued

85,177,172

85,177,172

85,177,172

85,177,172

85,177,172

Less:

Treasury shares

5,025,764

5,020,025

5,020,025

4,291,317

4,409,501

Unallocated ESOP shares

98,208

104,079

109,950

118,050

126,144

Unvested restricted shares

377,122

390,636

393,636

398,094

455,283

Number of common shares outstanding

79,676,078

79,662,432

79,653,561

80,369,711

80,186,244

Tangible book value per common share

$

9.45

$

9.22

$

9.21

$

9.00

$

8.85

Allowance for loan and lease losses

$

58,635

$

58,041

$

58,692

$

59,997

$

57,981

Less:

Allowance for acquired loans and leases losses

1,857

1,795

1,814

1,817

1,961

Allowance for originated loan and lease losses

$

56,778

$

56,246

$

56,878

$

58,180

$

56,020

Total loans and leases

$

6,505,329

$

6,388,197

$

6,303,516

$

6,227,707

$

6,171,274

Less:

Total acquired loans and leases

337,420

370,177

394,407

426,865

460,142

Total originated loans and leases

$

6,167,909

$

6,018,020

$

5,909,109

$

5,800,842

$

5,711,132

Allowance for loan and lease losses related to originated loans and leases as a percentage of originated loans and leases

0.92

%

0.93

%

0.96

%

1.00

%

0.98

%