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8-K - FORM 8-K - BROOKLINE BANCORP INCv444512_8k.htm

Brookline Bancorp Announces Second Quarter Results



Net Income of $12.7 million, EPS of $0.18

BOSTON, July 20, 2016 /PRNewswire/ -- Brookline Bancorp, Inc. (NASDAQ: BRKL) (the "Company") today announced net income of $12.7 million, or $0.18 per basic and diluted share, for the second quarter of 2016, compared to $11.9 million, or $0.17 per basic and diluted share, for the second quarter of 2015.

Paul Perrault, President and Chief Executive Officer of the Company, stated: "We have delivered another solid quarter for our stockholders with strong loan and deposit growth. I am proud of our employees who work together to live the Brookline Bancorp culture of providing excellent customer service and contributing to the growth of our Company."

BALANCE SHEET

Total assets at June 30, 2016 increased $115.5 million to $6.3 billion from $6.2 billion at March 31, 2016, and increased $254.2 million from $6.0 billion at December 31, 2015. The increase in total assets of 7.5 percent on an annualized basis during the second quarter of 2016 was primarily driven by increases in loans and leases. At June 30, 2016, total loans and leases were $5.3 billion, representing an increase of $128.6 million from March 31, 2016, and an increase of $263.5 million from December 31, 2015. During the second quarter of 2016, total loans and leases grew 10.0 percent on an annualized basis. Strong loan growth continued in the commercial real estate and commercial loan and lease portfolios, which increased $116.2 million during the second quarter of 2016, or 11.2 percent on an annualized basis.

Investment securities at June 30, 2016 decreased $17.0 million to $602.6 million, representing 9.6 percent of total assets, as compared to $619.6 million, or 10.0 percent of total assets, at March 31, 2016, and decreased approximately $4.4 million from $607.0 million, or 10.0 percent of total assets, at December 31, 2015.

Total deposits at June 30, 2016 increased $91.7 million to $4.5 billion from $4.4 billion at March 31, 2016 and increased $179.1 million from $4.3 billion at December 31, 2015. Core deposits, which consist of demand checking, NOW, savings, and money market accounts, increased $48.8 million from March 31, 2016 and increased $116.0 million from December 31, 2015. The average cost of interest bearing deposits increased slightly to 0.55 percent for the three months ended June 30, 2016 from 0.54 percent for the three months ended March 31, 2016.

Total borrowings at June 30, 2016 remained consistent at $1.0 billion with March 31, 2016 and increased $45.4 million from $983.0 million at December 31, 2015.

The ratio of stockholders' equity to total assets was 10.95 percent at June 30, 2016, as compared to 11.01 percent at March 31, 2016, and 11.05 percent at December 31, 2015, respectively. The ratio of tangible stockholders' equity to tangible assets was 8.82 percent at June 30, 2016, as compared to 8.83 percent at March 31, 2016, and 8.81 percent at December 31, 2015.

NET INTEREST INCOME

Net interest income increased $1.1 million to $50.3 million during the second quarter of 2016 from the first quarter driven by the growth in interest earning assets as the net interest margin decreased 1 basis point to 3.44 percent.

PROVISION FOR LOAN AND LEASE LOSSES

The Company recorded a provision for loan and lease losses of $2.7 million for the quarter ended June 30, 2016, compared to $2.3 million for the quarter ended March 31, 2016.

Net charge-offs increased $3.6 million to $4.0 million for the second quarter of 2016 from $0.4 million for the first quarter of 2016 due to a $3.4 million charge off of a commercial relationship which had a specific reserve of $3.3 million recorded in a prior period. As a result, the ratio of net charge-offs to average loans on an annualized basis increased to 31 basis points for the second quarter of 2016 from 3 basis points for the first quarter of 2016.

The allowance for loan and lease losses represented 1.09 percent of total loans and leases at June 30, 2016, compared to 1.14 percent at March 31, 2016 and December 31, 2015. The allowance for loan and lease losses related to originated loans and leases as a percentage of originated loans and leases was 1.13 percent at June 30, 2016, compared to 1.20 percent at March 31, 2016 and December 31, 2015.

NON-INTEREST INCOME

Non-interest income for the quarter ended June 30, 2016 decreased $1.1 million to $5.4 million from $6.5 million for the first quarter. The decrease was primarily driven by a decrease of $0.6 million in gain on sales of loans and leases held-for-sale and a decrease of $0.4 million due to lower loan level derivative income.

NON-INTEREST EXPENSE

Non-interest expense for the quarter ended June 30, 2016 increased $0.2 million to $32.3 million from $32.1 million for the quarter ended March 31, 2016. The Company's efficiency ratio was 57.97 percent at June 30, 2016, compared with 57.57 percent at March 31, 2016.

PROVISION FOR INCOME TAXES

The effective tax rate was 35.8 percent for the three months and six months ended June 30, 2016.

RETURNS ON AVERAGE ASSETS AND AVERAGE EQUITY

The return on average assets decreased during the second quarter of 2016 to 0.81 percent at June 30, 2016 from 0.84 percent at March 31, 2016. The return on average tangible assets decreased to 0.83 percent for the second quarter of 2016 from 0.86 percent for the first quarter of 2016.

The return on average stockholders' equity decreased during the second quarter of 2016 to 7.38 percent from 7.57 percent for the first quarter of 2016. The return on average tangible stockholders' equity decreased to 9.40 percent for the second quarter of 2016 from 9.69 percent for the first quarter of 2016.

ASSET QUALITY

The ratio of nonperforming loans and leases to total loans and leases was 0.61 percent at June 30, 2016 as compared to 0.62 percent at March 31, 2016. Nonperforming loans and leases at June 30, 2016 remained consistent at $31.9 million with March 31, 2016. Nonperforming assets at June 30, 2016 increased $0.2 million to $32.7 million, or 0.52 percent of total assets, from $32.5 million, or 0.53 percent of total assets, at March 31, 2016.

DIVIDEND DECLARED

The Company's Board of Directors approved a dividend of $0.09 per share for the quarter ended June 30, 2016. The dividend will be paid on August 19, 2016 to stockholders of record on August 5, 2016.

CONFERENCE CALL

The Company will conduct a conference call/webcast at 1:30 PM Eastern Daylight Time on Thursday, July 21, 2016 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 10088672. 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 $6.3 billion in assets and branch locations in Massachusetts and Rhode Island, is headquartered in Boston, Massachusetts and operates as the holding company for Brookline Bank, Bank Rhode Island, and First Ipswich Bank (the "banks"). The Company provides commercial and retail banking services, cash management and investment services to customers throughout Central New England. More information about Brookline Bancorp, Inc. and its banks can be found at the following websites: www.brooklinebank.com, www.bankri.com, and www.firstipswich.com.

FORWARD-LOOKING STATEMENTS

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

BASIS OF PRESENTATION

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

NON-GAAP FINANCIAL MEASURES

The Company uses certain non-GAAP financial measures, such as 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


June 30,
2016


March 31,
2016


December 31,
2015


September 30,
2015


June 30,
2015


(Dollars In Thousands Except per Share Data)

Earnings Data:










Net interest income

$    50,257


$    49,203


$         50,078


$           48,587


$     47,172

Provision for credit losses

2,545


2,378


1,520


1,755


1,913

Non-interest income

5,375


6,469


6,063


4,784


4,867

Non-interest expense

32,250


32,053


32,329


31,270


30,452

Income before provision for income taxes

20,837


21,241


22,292


20,346


19,674

Net income attributable to Brookline Bancorp, Inc.

12,654


12,812


13,327


12,888


11,865











Performance Ratios:










Net interest margin (1)

3.44 %


3.45 %


3.54 %


3.54 %


3.49 %

Interest-rate spread (1)

3.25 %


3.26 %


3.42 %


3.41 %


3.32 %

Return on average assets

0.81 %


0.84 %


0.89 %


0.89 %


0.82 %

Return on average tangible assets (non-GAAP)

0.83 %


0.86 %


0.92 %


0.91 %


0.85 %

Return on average stockholders' equity

7.38 %


7.57 %


7.99 %


7.81 %


7.24 %

Return on average tangible stockholders' equity (non-GAAP)

9.40 %


9.69 %


10.28 %


10.11 %


9.40 %

Efficiency ratio (2)

57.97 %


57.57 %


57.59 %


58.59 %


58.52 %











Per Common Share Data:










Net income — Basic

$      0.18


$        0.18


$             0.19


$               0.18


$       0.17

Net income — Diluted

0.18


0.18


0.19


0.18


0.17

Cash dividends declared

0.090


0.090


0.090


0.090


0.090

Book value per share (end of period)

9.82


9.69


9.51


9.45


9.33

Tangible book value per share (end of period) (non-GAAP)

7.73


7.59


7.39


7.33


7.19

Stock price (end of period)

11.03


11.01


11.50


10.14


11.29











Balance Sheet:










Total assets

$   6,296,502


$   6,181,030


$      6,042,338


$      5,839,529


$   5,782,934

Total loans and leases

5,259,038


5,130,445


4,995,540


4,829,152


4,729,581

Total deposits

4,485,154


4,393,456


4,306,018


4,144,577


4,129,408

Brookline Bancorp, Inc. stockholders' equity

689,656


680,417


667,485


663,468


653,516











Asset Quality:










Nonperforming assets

$        32,654


$       32,470


$         20,676


$          21,025


$      25,874

Nonperforming assets as a percentage of total assets

0.52 %


0.53 %


0.34 %


0.36 %


0.45 %

Allowance for loan and lease losses

$        57,258


$       58,606


$         56,739


$          56,472


$      56,398

Allowance for loan and lease losses as a percentage of total loans and leases

1.09 %


1.14 %


1.14 %


1.17 %


1.19 %

Net loan and lease charge-offs

$          4,018


$            400


$           1,389


$          1,599


$          501

Net loan and lease charge-offs as a percentage of average loans and leases (annualized)

0.31 %


0.03 %


0.11 %


0.13 %


0.04 %











Capital Ratios:










Stockholders' equity to total assets

10.95 %


11.01 %


11.05 %


11.36 %


11.30 %

Tangible stockholders' equity to tangible assets (non-GAAP)

8.82 %


8.83 %


8.81 %


9.04 %


8.94 %

(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,
2016


March 31,
2016


December 31,
2015


September 30,
2015


June 30,
2015

ASSETS

(In Thousands Except Share Data)

Cash and due from banks

$        22,677


$             31,127


$         28,753


$         27,299


$    43,363

Short-term investments

47,265


42,795


46,736


19,745


48,513

Total cash and cash equivalents

69,942


73,922


75,489


47,044


91,876

Investment securities available-for-sale

532,967


536,182


513,201


526,764


530,476

Investment securities held-to-maturity

69,590


83,409


93,757


63,097


60,511

Total investment securities

602,557


619,591


606,958


589,861


590,987

Loans and leases held-for-sale

1,585


3,190


13,383


10,992


12,482

Loans and leases:










Commercial real estate loans:










Commercial real estate mortgage

1,974,289


1,958,057


1,875,592


1,810,550


1,758,281

Multi-family mortgage

721,771


682,317


658,480


614,560


627,571

Construction

144,463


126,024


130,322


138,261


127,506

Total commercial real estate loans

2,840,523


2,766,398


2,664,394


2,563,371


2,513,358

Commercial loans and leases:










Commercial

628,281


616,290


592,531


580,711


578,548

Equipment financing

750,503


721,621


721,890


684,331


648,447

Condominium association

61,962


60,728


59,875


57,562


55,185

Total commercial loans and leases

1,440,746


1,398,639


1,374,296


1,322,604


1,282,180

Indirect automobile loans

9,281


11,220


13,678


16,294


19,377

Consumer loans:










Residential mortgage

624,423


617,501


616,449


606,063


603,073

Home equity

333,527


318,859


314,553


308,371


299,396

Other consumer

10,538


17,828


12,170


12,449


12,197

Total consumer loans

968,488


954,188


943,172


926,883


914,666

Total loans and leases

5,259,038


5,130,445


4,995,540


4,829,152


4,729,581

Allowance for loan and lease losses

(57,258)


(58,606)


(56,739)


(56,472)


(56,398)

Net loans and leases

5,201,780


5,071,839


4,938,801


4,772,680


4,673,183

Restricted equity securities

64,677


65,438


66,117


75,553


75,553

Premises and equipment, net of accumulated depreciation

76,131


77,128


78,156


77,472


77,892

Deferred tax asset

22,301


24,181


26,817


25,730


28,466

Goodwill

137,890


137,890


137,890


137,890


137,890

Identified intangible assets, net of accumulated amortization

9,377


9,998


10,633


11,357


12,082

Other real estate owned and repossessed assets

751


565


1,343


1,301


2,412

Other assets

109,511


97,288


86,751


89,649


80,111

Total assets

$    6,296,502


$     6,181,030


$      6,042,338


$     5,839,529


$    5,782,934

LIABILITIES AND STOCKHOLDERS' EQUITY










Deposits:










Non-interest-bearing deposits:










Demand checking accounts

$       852,869


$        793,195


$        799,117


$      785,210


$       783,331

Interest-bearing deposits:










NOW accounts

295,126


286,920


283,972


254,767


247,172

Savings accounts

557,607


555,843


540,788


500,104


532,184

Money market accounts

1,628,550


1,649,348


1,594,269


1,540,104


1,523,798

Certificate of deposit accounts

1,151,002


1,108,150


1,087,872


1,064,392


1,042,923

Total interest-bearing deposits

3,632,285


3,600,261


3,506,901


3,359,367


3,346,077

Total deposits

4,485,154


4,393,456


4,306,018


4,144,577


4,129,408

Borrowed funds:










Advances from the FHLBB

904,685


905,953


861,866


848,913


823,452

Subordinated debentures and notes

83,021


82,978


82,936


82,873


82,850

Other borrowed funds

40,733


39,378


38,227


28,434


31,346

Total borrowed funds

1,028,439


1,028,309


983,029


960,220


937,648

Mortgagors' escrow accounts

7,419


7,905


7,516


7,996


7,494

Accrued expenses and other liabilities

79,541


64,566


72,289


57,996


49,792

Total liabilities

5,600,553


5,494,236


5,368,852


5,170,789


5,124,342

Stockholders' equity:










Brookline Bancorp, Inc. stockholders' equity:










Common stock, $0.01 par value; 200,000,000 shares authorized; 75,744,445 shares issued

757


757


757


757


757

Additional paid-in capital

617,738


617,477


616,899


616,252


618,044

Retained earnings, partially restricted

122,469


116,151


109,675


102,684


96,128

Accumulated other comprehensive (loss) income

5,969


3,352


(2,476)


1,191


(1,775)

Treasury stock, at cost;










4,862,193 shares, 4,861,554 shares, 4,861,554 shares, 4,861,085 shares, and 5,048,525 shares, respectively

(56,215)


(56,208)


(56,208)


(56,202)


(58,372)

Unallocated common stock held by the Employee Stock Ownership Plan;










194,880 shares, 203,973 shares, 213,066 shares, 222,645 shares, and 232,224 shares, respectively

(1,062)


(1,112)


(1,162)


(1,214)


(1,266)

Total Brookline Bancorp, Inc. stockholders' equity

689,656


680,417


667,485


663,468


653,516

Noncontrolling interest in subsidiary

6,293


6,377


6,001


5,272


5,076

Total stockholders' equity

695,949


686,794


673,486


668,740


658,592

Total liabilities and stockholders' equity

$    6,296,502


$   6,181,030


$    6,042,338


$     5,839,529


$   5,782,934

BROOKLINE BANCORP, INC. AND SUBSIDIARIES

Consolidated Statements of Income (Unaudited)












Three Months Ended


June 30,
2016


March 31,
2016


December 31,
2015


September 30,
2015


June 30,
2015


(In Thousands Except Share Data)

Interest and dividend income:










Loans and leases

$        55,369


$           54,247


$               54,814


$                   52,725


$        51,684

Debt securities

3,075


2,932


2,936


2,866


2,931

Marketable and restricted equity securities

729


680


668


1,079


491

Short-term investments

63


39


30


17


60

Total interest and dividend income

59,236


57,898


58,448


56,687


55,166

Interest expense:










Deposits

5,018


4,745


4,554


4,326


4,296

Borrowed funds

3,961


3,950


3,816


3,774


3,698

Total interest expense

8,979


8,695


8,370


8,100


7,994

Net interest income

50,257


49,203


50,078


48,587


47,172

Provision for credit losses

2,545


2,378


1,520


1,755


1,913

Net interest income after provision for credit losses

47,712


46,825


48,558


46,832


45,259

Non-interest income:










Deposit fees

2,216


2,145


2,208


2,261


2,195

Loan fees

287


330


364


205


271

Loan level derivative income, net

1,210


1,629


1,556


900


941

Gain on sales of loans and leases held-for-sale

345


905


614


446


279

Other

1,317


1,460


1,321


972


1,181

Total non-interest income

5,375


6,469


6,063


4,784


4,867

Non-interest expense:










Compensation and employee benefits

19,083


18,727


18,788


17,875


17,085

Occupancy

3,391


3,526


3,482


3,535


3,437

Equipment and data processing

3,898


3,714


3,537


3,600


3,680

Professional services

962


966


951


984


1,163

FDIC insurance

843


878


883


929


831

Advertising and marketing

853


861


903


878


823

Amortization of identified intangible assets

621


635


724


725


724

Other

2,599


2,746


3,061


2,744


2,709

Total non-interest expense

32,250


32,053


32,329


31,270


30,452

Income before provision for income taxes

20,837


21,241


22,292


20,346


19,674

Provision for income taxes

7,465


7,599


8,237


6,897


7,115

Net income before noncontrolling interest in subsidiary

13,372


13,642


14,055


13,449


12,559

Less net income attributable to noncontrolling interest in subsidiary

718


830


728


561


694

Net income attributable to Brookline Bancorp, Inc.

$        12,654


$           12,812


$               13,327


$                   12,888


$        11,865

Earnings per common share:










Basic

$            0.18


$               0.18


$                   0.19


$                       0.18


$            0.17

Diluted

$            0.18


$               0.18


$                   0.19


$                       0.18


$            0.17

Weighted average common shares outstanding during the period:










Basic

70,196,950


70,185,356


70,177,382


70,129,056


70,049,829

Diluted

70,388,438


70,341,843


70,318,657


70,240,020


70,215,850

Dividends declared per common share

$          0.090


$             0.090


$                 0.090


$                     0.090


$          0.090

BROOKLINE BANCORP, INC. AND SUBSIDIARIES

Consolidated Statements of Income (Unaudited)




Six Months Ended June 30,


2016


2015


(In Thousands Except Share Data)

Interest and dividend income:




Loans and leases

$       109,616


$       105,065

Debt securities

6,007


5,614

Marketable and restricted equity securities

1,409


1,015

Short-term investments

102


81

Total interest and dividend income

117,134


111,775

Interest expense:




Deposits

9,763


8,600

Borrowed funds

7,911


7,475

Total interest expense

17,674


16,075

Net interest income

99,460


95,700

Provision for credit losses

4,923


4,176

Net interest income after provision for credit losses

94,537


91,524

Non-interest income:




Deposit Fees

4,361


4,261

Loan Fees

593


613

Loan level derivative income, net

2,839


941

Gain on sales of loans and leases held-for-sale

1,250


1,148

Other

2,777


2,374

Total non-interest income

11,820


9,337

Non-interest expense:




Compensation and employee benefits

37,810


34,609

Occupancy

6,917


6,909

Equipment and data processing

7,588


7,700

Professional services

1,928


2,257

FDIC insurance

1,721


1,698

Advertising and marketing

1,714


1,571

Amortization of identified intangible assets

1,256


1,462

Other

5,345


5,572

Total non-interest expense

64,279


61,778

Income before provision for income taxes

42,078


39,083

Provision for income taxes

15,064


14,219

Net income before noncontrolling interest in subsidiary

27,014


24,864

Less net income attributable to noncontrolling interest in subsidiary

1,548


1,296

Net income attributable to Brookline Bancorp, Inc.

$         25,466


$         23,568

Earnings per common share:




Basic

$             0.36


$             0.34

Diluted

$             0.36


$             0.34

Weighted average common shares outstanding during the period:



Basic

70,191,935


70,042,997

Diluted

70,365,923


70,190,015

Dividends declared per common share

$           0.180


$           0.175

BROOKLINE BANCORP, INC. AND SUBSIDIARIES

Asset Quality Analysis (Unaudited)


At and for the Three Months Ended


June 30, 2016


March 31, 2016


December 31, 2015


September 30, 2015


June 30, 2015


(Dollars in Thousands)

NONPERFORMING ASSETS:










Loans and leases accounted for on a nonaccrual basis:










Commercial real estate mortgage

$     2,408


$        5,440


$              5,482


$                3,155


$          3,174

Multi-family mortgage

291


1,446


291


309


309

Total commercial real estate loans

2,699


6,886


5,773


3,464


3,483











Commercial

17,944


15,050


6,264


8,326


12,316

Equipment financing

6,947


5,391


2,610


2,896


2,639

Total commercial loans and leases

24,891


20,441


8,874


11,222


14,955











Indirect automobile loans

248


308


675


629


417











Residential mortgage

2,048


2,132


2,225


2,539


2,421

Home equity

1,976


2,104


1,757


1,818


2,144

Other consumer

41


34


29


52


42

Total consumer loans

4,065


4,270


4,011


4,409


4,607











Total nonaccrual loans and leases

31,903


31,905


19,333


19,724


23,462











Other real estate owned

407


408


729


1,149


1,676

Other repossessed assets

344


157


614


152


736

Total nonperforming assets

$   32,654


$      32,470


$       20,676


$              21,025


$        25,874











Loans and leases past due greater than 90 days and still accruing

$     4,151


$        3,512


$         8,690


$                8,792


$        10,220











Troubled debt restructurings on accrual

16,848


16,697


17,953


17,746


14,205

Troubled debt restructurings on nonaccrual

14,466


14,614


4,965


5,960


5,981

Total troubled debt restructurings

$   31,314


$      31,311


$       22,918


$              23,706


$        20,186











Nonperforming loans and leases as a percentage of total loans and leases

0.61 %


0.62 %


0.39 %


0.41 %


0.50 %

Nonperforming assets as a percentage of total assets

0.52 %


0.53 %


0.34 %


0.36 %


0.45 %











PROVISION AND ALLOWANCE FOR LOAN AND LEASE LOSSES:







Allowance for loan and lease losses at beginning of period

$    58,606


$      56,739


$       56,472


$              56,398


$        55,106

Charge-offs

(4,324)


(875)


(1,929)


(1,931)


(1,029)

Recoveries

306


475


540


332


528

Net charge-offs

(4,018)


(400)


(1,389)


(1,599)


(501)

Provision for loan and lease losses

2,670


2,267


1,656


1,673


1,793

Allowance for loan and lease losses at end of period

$    57,258


$     58,606


$       56,739


$              56,472


$        56,398











Allowance for loan and lease losses as a percentage of total loans and leases

1.09 %


1.14 %


1.14 %


1.17 %


1.19 %

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

1.13 %


1.20 %


1.20 %


1.25 %


1.27 %











NET CHARGE-OFFS:










Commercial real estate loans

$    1,153


$           331


$              —


$                      —


$             162

Commercial loans and leases

2,316


64


1,302


1,276


151

Indirect automobile loans

(15)


13


3


117


(13)

Consumer loans

564


(8)


84


206


201

Total net charge-offs

$    4,018


$           400


$        1,389


$                1,599


$             501











Net loan and lease charge-offs as a percentage of average
loans and leases (annualized)

0.31 %


0.03 %


0.11 %


0.13 %


0.04 %

BROOKLINE BANCORP, INC. AND SUBSIDIARIES

Average Yields / Costs (Unaudited)


Three Months Ended


June 30, 2016


March 31, 2016


June 30, 2015


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)

$      605,383


$     3,157


2.09 %


$      604,034


$     3,011


1.99 %


$      591,120


$     2,941


1.99 %

Marketable and restricted equity securities (2)

66,422


732


4.41 %


66,887


679


4.07 %


76,332


493


2.59 %

Short-term investments

60,570


63


0.42 %


41,861


39


0.38 %


85,737


60


0.28 %

Total investments

732,375


3,952


2.16 %


712,782


3,729


2.09 %


753,189


3,494


1.86 %

Loans and Leases:


















Commercial real estate loans (3)

2,784,627


28,278


4.06 %


2,698,098


27,266


4.04 %


2,505,925


26,391


4.21 %

Commercial loans (3)

689,696


6,649


3.82 %


670,671


6,651


3.93 %


639,609


6,394


3.96 %

Equipment financing (3)

730,193


11,751


6.44 %


726,928


11,750


6.47 %


627,032


10,793


6.89 %

Indirect automobile loans (3)

10,255


109


4.27 %


12,493


153


4.93 %


21,171


218


4.13 %

Residential mortgage loans (3)

626,249


5,633


3.60 %


625,351


5,559


3.56 %


589,171


5,260


3.57 %

Other consumer loans (3)

340,796


3,200


3.76 %


330,078


3,117


3.78 %


308,932


2,838


3.68 %

Total loans and leases

5,181,816


55,620


4.29 %


5,063,619


54,496


4.30 %


4,691,840


51,894


4.42 %

Total interest-earning assets

5,914,191


59,572


4.03 %


5,776,401


58,225


4.03 %


5,445,029


55,388


4.07 %

Allowance for loan and lease losses

(58,789)






(57,125)






(55,427)





Non-interest-earning assets

382,061






373,582






373,018





Total assets

$   6,237,463






$   6,092,858






$   5,762,620























Liabilities and Stockholders' Equity:


















Interest-bearing liabilities:


















Deposits:


















NOW accounts

$      294,484


53


0.07 %


$      279,414


51


0.07 %


$      248,786


45


0.07 %

Savings accounts

554,474


336


0.24 %


564,681


344


0.25 %


554,618


263


0.19 %

Money market accounts

1,655,843


1,867


0.45 %


1,629,054


1,775


0.44 %


1,544,877


1,693


0.44 %

Certificates of deposit

1,132,272


2,762


0.98 %


1,077,639


2,575


0.96 %


1,049,297


2,295


0.88 %

Total interest-bearing deposits

3,637,073


5,018


0.55 %


3,550,788


4,745


0.54 %


3,397,578


4,296


0.51 %

Borrowings


















Advances from the FHLBB

879,499


2,678


1.20 %


863,960


2,669


1.22 %


782,434


2,415


1.22 %

Subordinated debentures and notes

82,997


1,258


6.06 %


82,955


1,256


6.06 %


82,827


1,250


6.03 %

Other borrowed funds

41,305


25


0.24 %


39,624


25


0.26 %


34,546


33


0.39 %

Total borrowings

1,003,801


3,961


1.56 %


986,539


3,950


1.58 %


899,807


3,698


1.63 %

Total interest-bearing liabilities

4,640,874


8,979


0.78 %


4,537,327


8,695


0.77 %


4,297,385


7,994


0.75 %

Non-interest-bearing liabilities:


















Demand checking accounts

825,880






798,869






750,827





Other non-interest-bearing liabilities

78,497






73,700






54,352





Total liabilities

5,545,251






5,409,896






5,102,564





Brookline Bancorp, Inc. stockholders' equity

685,996






677,101






655,223





Noncontrolling interest in subsidiary

6,216






5,861






4,833





Total liabilities and equity

$   6,237,463






$   6,092,858






$   5,762,620





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



50,593


3.25 %




49,530


3.26 %




47,394


3.32 %

Less adjustment of tax-exempt income



336






327






222



Net interest income



$   50,257






$   49,203






$   47,172



Net interest margin (5)





3.44 %






3.45 %






3.49 %

(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.

BROOKLINE BANCORP, INC. AND SUBSIDIARIES

Average Yields / Costs (Unaudited)


Six Months Ended


June 30, 2016


June 30, 2015


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)

$      604,709


$     6,168


2.04 %


$      572,966


$     5,625


1.96 %

Marketable and restricted equity securities (2)

66,654


1,411


4.24 %


76,059


1,015


2.67 %

Short-term investments

51,214


102


0.40 %


67,888


81


0.24 %

Total investments

722,577


7,681


2.13 %


716,913


6,721


1.87 %

Loans and Leases:












Commercial real estate loans (3)

2,741,363


55,544


4.05 %


2,491,020


52,636


4.23 %

Commercial loans (3)

680,183


13,300


3.87 %


625,231


12,901


4.11 %

Equipment financing (3)

728,560


23,501


6.45 %


619,214


21,337


6.89 %

Indirect automobile loans (3)

11,374


262


4.63 %


151,110


2,360


3.15 %

Residential mortgage loans (3)

625,800


11,192


3.58 %


583,049


10,568


3.62 %

Other consumer loans (3)

335,436


6,317


3.77 %


304,052


5,666


3.76 %

Total loans and leases

5,122,716


110,116


4.30 %


4,773,676


105,468


4.42 %

Total interest-earning assets

5,845,293


117,797


4.03 %


5,490,589


112,189


4.09 %

Allowance for loan and lease losses

(57,957)






(54,876)





Non-interest-earning assets

377,822






371,408





Total assets

$   6,165,158






$   5,807,121

















Liabilities and Stockholders' Equity:












Interest-bearing liabilities:












Deposits:












NOW accounts

$      286,949


104


0.07 %


$      243,283


88


0.07 %

Savings accounts

559,577


680


0.24 %


548,143


536


0.20 %

Money market accounts

1,642,448


3,642


0.45 %


1,540,837


3,509


0.46 %

Certificates of deposit

1,104,956


5,337


0.97 %


1,041,447


4,467


0.86 %

Total interest-bearing deposits

3,593,930


9,763


0.55 %


3,373,710


8,600


0.51 %

Borrowings












Advances from the FHLBB

871,729


5,347


1.21 %


861,435


4,919


1.14 %

Subordinated debentures and notes

82,976


2,514


6.06 %


82,806


2,498


6.03 %

Other borrowed funds

40,464


50


0.25 %


36,167


58


0.32 %

Total borrowings

995,169


7,911


1.57 %


980,408


7,475


1.52 %

Total interest-bearing liabilities

4,589,099


17,674


0.77 %


4,354,118


16,075


0.74 %

Non-interest-bearing liabilities:












Demand checking accounts

812,374






739,526





Other non-interest-bearing liabilities

76,099






56,775





Total liabilities

5,477,572






5,150,419





Brookline Bancorp, Inc. stockholders' equity

681,548






651,971





Noncontrolling interest in subsidiary

6,038






4,731





Total liabilities and equity

$   6,165,158






$   5,807,121





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



100,123


3.26 %




96,114


3.35 %

Less adjustment of tax-exempt income



663






414



Net interest income



$   99,460






$   95,700



Net interest margin (5)





3.44 %






3.53 %

(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.

BROOKLINE BANCORP, INC. AND SUBSIDIARIES

Non-GAAP Financial Information (Unaudited)












At and for the Three Months Ended


June 30, 2016


March 31, 2016


December 31, 2015


September 30, 2015


June 30, 2015


(Dollars in Thousands)











Net income, as reported

$        12,654


$           12,812


$                 13,327


$                   12,888


$        11,865











Average total assets

$   6,237,463


$      6,092,858


$            5,957,191


$              5,790,469


$   5,762,620

Less: Average goodwill and average identified intangible assets, net

147,619


148,248


148,930


149,669


150,385

Average tangible assets

$   6,089,844


$      5,944,610


$            5,808,261


$              5,640,800


$   5,612,235











Return on average tangible assets (annualized)

0.83 %


0.86 %


0.92 %


0.91 %


0.85 %











Average total stockholders' equity

$      685,996


$         677,101


$               667,471


$                 659,761


$      655,223

Less: Average goodwill and average identified intangible assets, net

147,619


148,248


148,930


149,669


150,385

Average tangible stockholders' equity

$      538,377


$         528,853


$               518,541


$                 510,092


$      504,838











Return on average tangible stockholders' equity (annualized)

9.40 %


9.69 %


10.28 %


10.11 %


9.40 %











Brookline Bancorp, Inc. stockholders' equity

$      689,656


$         680,417


$               667,485


$                 663,468


$      653,516

Less:










Goodwill

137,890


137,890


137,890


137,890


137,890

Identified intangible assets, net

9,377


9,998


10,633


11,357


12,082

Tangible stockholders' equity

$      542,389


$         532,529


$               518,962


$                 514,221


$      503,544











Total assets

$   6,296,502


$      6,181,030


$            6,042,338


$              5,839,529


$   5,782,934

Less:










Goodwill

137,890


137,890


137,890


137,890


137,890

Identified intangible assets, net

9,377


9,998


10,633


11,357


12,082

Tangible assets

$   6,149,235


$      6,033,142


$            5,893,815


$              5,690,282


$   5,632,962











Tangible stockholders' equity to tangible assets

8.82 %


8.83 %


8.81 %


9.04 %


8.94 %











Tangible stockholders' equity

$      542,389


$         532,529


$               518,962


$                 514,221


$      503,544











Number of common shares issued

75,744,445


75,744,445


75,744,445


75,744,445


75,744,445

Less:










Treasury shares

4,862,193


4,861,554


4,861,554


4,861,085


5,048,525

Unallocated ESOP shares

194,880


203,973


213,066


222,645


232,224

Unvested restricted shares

484,066


486,035


486,035


486,999


406,566

Number of common shares outstanding

70,203,306


70,192,883


70,183,790


70,173,716


70,057,130











Tangible book value per common share

$            7.73


$               7.59


$                     7.39


$                       7.33


$            7.19











Allowance for loan and lease losses

$        57,258


$           58,606


$                 56,739


$                   56,472


$        56,398

Less:










Allowance for acquired loans and leases losses

2,178


1,938


1,752


2,048


2,655

Allowance for originated loan and lease losses

$        55,080


$           56,668


$                 54,987


$                   54,424


$        53,743











Total loans and leases

$   5,259,038


$      5,130,445


$            4,995,540


$              4,829,152


$   4,729,581

Less:










Total acquired loans and leases

371,986


395,782


422,652


457,922


509,028

Total originated loans and leases

$   4,887,052


$      4,734,663


$            4,572,888


$              4,371,230


$   4,220,553











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

1.13 %


1.20 %


1.20 %


1.25 %


1.27 %

Brookline Bancorp, Inc.

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