Brookline Bancorp Announces Third Quarter Results

Brookline Bancorp Announces Third Quarter Results

Net Income of $22.6 million, EPS of $0.28

Quarterly Dividend Increase of 4.5%

BOSTON, Oct. 23, 2019 (GLOBE NEWSWIRE) -- Brookline Bancorp, Inc. (NASDAQ: BRKL) (the “Company”) today announced net income of $22.6 million, or $0.28 per basic and diluted share, for the third quarter of 2019, compared to $20.5 million, or $0.26 per basic and diluted share, for the second quarter of 2019, and $22.5 million, or $0.28 per basic and diluted share, for the third quarter of 2018.

Paul Perrault, President and Chief Executive Officer of the Company commented on the third quarter earnings, "We continued to produce strong results in the third quarter, including favorable loan and deposit growth. With this growth we have maintained our commitment to achieving solid returns for our stockholders. Our Board has again voted to increase our dividend, from $0.110 to $0.115. We look forward to a productive fourth quarter.”

FIRST IPSWICH BANK CHARTER CONSOLIDATION

On October 23, 2019, Brookline Bank and First Ipswich Bank, both wholly-owned subsidiaries of the Company, entered into a merger agreement pursuant to which First Ipswich Bank will merge with and into Brookline Bank with Brookline Bank as the surviving institution. We anticipate closing the transaction in the first quarter of 2020. There are no branch closings as part of this charter consolidation.

BALANCE SHEET

Total assets at September 30, 2019 increased $241.5 million to $7.9 billion from $7.6 billion at June 30, 2019, and increased $557.8 million from $7.3 billion at September 30, 2018, primarily driven by growth in the loan portfolio. At September 30, 2019, total loans and leases were $6.6 billion, representing an increase of $141.5 million from June 30, 2019, and an increase of $419.1 million from September 30, 2018, primarily driven by growth in the commercial real estate portfolio.

Investment securities at September 30, 2019 decreased $23.7 million to $567.1 million, as compared to $590.8 million at June 30, 2019, and decreased approximately $87.6 million from $654.6 million at September 30, 2018. As of September 30, 2019, securities, cash and cash equivalents represented 9.5 percent of total assets as compared to 9.0 percent and 9.7 percent as of June 30, 2019 and September 30, 2018, respectively.

Total deposits at September 30, 2019 increased $106.8 million from $5.6 billion at June 30, 2019 to $5.7 billion and increased $495.7 million from $5.2 billion at September 30, 2018 driven primarily by growth in demand deposits.

Total borrowed funds at September 30, 2019 increased $55.6 million to $986.4 million from $930.8 million at June 30, 2019 and decreased $96.5 million from $1.1 billion at September 30, 2018.

The ratio of stockholders’ equity to total assets was 11.83 percent at September 30, 2019, as compared to 12.03 percent at June 30, 2019, and 12.16 percent at September 30, 2018. The ratio of tangible stockholders’ equity to tangible assets was 9.94 percent at September 30, 2019, as compared to 10.08 percent at June 30, 2019, and 10.11 percent at September 30, 2018. Tangible book value per share increased $0.18 from $9.45 at June 30, 2019 to $9.63 at September 30, 2019, compared to $9.00 at September 30, 2018.

NET INTEREST INCOME

Net interest income increased $0.1 million to $63.2 million during the third quarter of 2019 from $63.1 million at the quarter ended June 30, 2019. The net interest margin decreased 10 basis points to 3.45 percent for the three months ended September 30, 2019.

NON-INTEREST INCOME

Non-interest income for the quarter ended September 30, 2019 increased $0.4 million to $7.9 million from $7.5 million for the quarter ended June 30, 2019. The increase was primarily driven by increases of $0.3 million in loan fees, $0.5 million in loan level derivative income and $0.1 million in other non-interest income, partially offset by a decrease of $0.5 million in gain on securities.

PROVISION FOR CREDIT LOSSES

The Company recorded a provision for credit losses of $0.9 million for the quarter ended September 30, 2019, compared to $3.8 million for the quarter ended June 30, 2019. The improved, lower provision in the third quarter results from a reduction in classified assets, recoveries and lower charge-offs.

Total net charge-offs for the third quarter of 2019 were $0.4 million compared to $3.1 million in the second quarter of 2019. The ratio of net loan and lease charge-offs to average loans and leases on an annualized basis decreased to 2 basis points for the third quarter of 2019 from 19 basis points for the second quarter of 2019.

The allowance for loan and lease losses represented 0.89 percent of total loans and leases at September 30, 2019, compared to 0.90 percent at June 30, 2019, and 0.96 percent at September 30, 2018. The allowance for loan and lease losses related to originated loans and leases represented 0.90 percent of originated loans and leases at September 30, 2019, compared to 0.92 percent at June 30, 2019, and 1.00 percent at September 30, 2018.

NON-INTEREST EXPENSE

Non-interest expense for the quarter ended September 30, 2019 increased $0.6 million to $40.2 million from $39.6 million for the quarter ended June 30, 2019. The increase was primarily driven by increases of $0.9 million in compensation and employee benefits expense, $0.1 million in occupancy, $0.1 million in equipment and data processing, and $1.1 million in merger and restructuring expense related to the First Ipswich Bank Charter consolidation referenced above, partially offset by decreases of $0.7 million in FDIC insurance and $0.9 million in other non-interest expense.

PROVISION FOR INCOME TAXES

The effective tax rate was 24.9 percent and 24.4 percent for the three and nine months ended September 30, 2019, respectively, compared to 20.9 percent and 22.9 for the three and nine months ended September 30, 2018, respectively.

RETURNS ON AVERAGE ASSETS AND AVERAGE EQUITY

The annualized return on average assets increased to 1.17 percent during the third quarter of 2019 from 1.08 percent for the second quarter of 2019. The annualized return on average tangible assets increased to 1.19 percent for the third quarter of 2019 from 1.11 percent for the second quarter of 2019.

The annualized return on average stockholders' equity increased to 9.74 percent during the third quarter of 2019 from 8.98 percent for the second quarter of 2019. The annualized return on average tangible stockholders’ equity increased to 11.85 percent for the third quarter of 2019 from 10.98 percent for the second quarter of 2019.

ASSET QUALITY

The ratio of nonperforming loans and leases to total loans and leases was 0.33 percent at September 30, 2019, unchanged from 0.33 percent at June 30, 2019. Nonperforming loans and leases increased $0.3 million to $21.6 million at September 30, 2019 from $21.3 million at June 30, 2019. The ratio of nonperforming assets to total assets was 0.30 percent at September 30, 2019, unchanged from 0.30 percent at June 30, 2019. Nonperforming assets increased $0.5 million to $23.8 million at September 30, 2019 from $23.3 million at June 30, 2019.

DIVIDEND DECLARED

The Company’s Board of Directors approved a dividend of $0.115 per share for the quarter ended September 30, 2019, an increase of half a cent from the prior period. The dividend will be paid on November 22, 2019 to stockholders of record on November 8, 2019, representing an increase of 4.5 percent from the prior quarter and a 9.5 percent increase from the prior year.

CONFERENCE CALL

The Company will conduct a conference call/webcast at 1:30 PM Eastern Daylight Time on Thursday, October 24, 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 10134880. 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 (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
 September 30,
2019
 June 30,
2019
 March 31,
2019
 December 31,
2018
 September 30,
2018
  
 (Dollars In Thousands Except per Share Data)
Earnings Data:         
Net interest income$63,236  $63,134  $62,999  $63,159  $62,332 
Provision for credit losses 871   3,757   1,353   123   2,717 
Non-interest income 7,929   7,478   6,630   6,461   7,069 
Non-interest expense 40,191   39,604   38,871   40,282   37,310 
Income before provision for income taxes 30,103   27,251   29,405   29,215   29,374 
Net income attributable to Brookline Bancorp, Inc. 22,596   20,471   22,467   21,138   22,460 
          
Performance Ratios:         
Net interest margin (1) 3.45%  3.55%  3.64%  3.58%  3.57%
Interest-rate spread (1) 3.06%  3.13%  3.18%  3.25%  3.27%
Return on average assets (annualized) 1.17%  1.08%  1.21%  1.15%  1.23%
Return on average tangible assets (annualized) (non-GAAP) 1.19%  1.11%  1.24%  1.17%  1.26%
Return on average stockholders' equity (annualized) 9.74%  8.98%  10.14%  9.40%  10.10%
Return on average tangible stockholders' equity (annualized) (non-GAAP) 11.85%  10.98%  12.48%  11.54%  12.44%
Efficiency ratio (2) 56.48%  56.09%  55.83%  57.86%  53.76%
          
Per Common Share Data:         
Net income — Basic$0.28  $0.26  $0.28  $0.26  $0.28 
Net income — Diluted 0.28   0.26   0.28   0.26   0.28 
Cash dividends declared 0.115   0.110   0.110   0.105   0.105 
Book value per share (end of period) 11.70   11.53   11.30   11.30   11.08 
Tangible book value per share (end of period) (non-GAAP) 9.63   9.45   9.22   9.21   9.00 
Stock price (end of period) 14.73   15.38   14.40   13.82   16.70 
          
Balance Sheet:         
Total assets$7,878,436  $7,636,980  $7,519,130  $7,392,805  $7,320,596 
Total loans and leases 6,646,821   6,505,329   6,388,197   6,303,516   6,227,707 
Total deposits 5,729,339   5,622,493   5,620,633   5,454,044   5,233,611 
Brookline Bancorp, Inc. stockholders’ equity 932,311   918,468   900,572   900,140   890,368 
          
Asset Quality:         
Nonperforming assets$23,760  $23,267  $26,721  $28,116  $29,718 
Nonperforming assets as a percentage of total assets 0.30%  0.30%  0.36%  0.38%  0.41%
Allowance for loan and lease losses$59,135  $58,635  $58,041  $58,692  $59,997 
Allowance for loan and lease losses as a percentage of total loans and leases 0.89%  0.90%  0.91%  0.93%  0.96%
Net loan and lease charge-offs$366  $3,082  $2,101  $1,252  $564 
Net loan and lease charge-offs as a percentage of average loans and leases (annualized) 0.02%  0.19%  0.13%  0.08%  0.04%
          
Capital Ratios:         
Stockholders’ equity to total assets 11.83%  12.03%  11.98%  12.18%  12.16%
Tangible stockholders’ equity to tangible assets (non-GAAP) 9.94%  10.08%  9.99%  10.15%  10.11%
          
(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)
 September 30, 2019 June 30, 2019 March 31, 2019 December 31, 2018 September 30,
2018
  
ASSETS(In Thousands Except Share Data)
Cash and due from banks$93,841  $46,532  $51,276  $47,542  $30,762 
Short-term investments 84,689   46,264   61,063   42,042   23,114 
Total cash and cash equivalents 178,530   92,796   112,339   89,584   53,876 
Investment securities available-for-sale 467,339   482,497   489,020   502,793   534,788 
Investment securities held-to-maturity 95,163   103,572   113,694   114,776   115,684 
Equity securities held-for-trading 4,581   4,698   4,341   4,207   4,169 
Total investment securities 567,083   590,767   607,055   621,776   654,641 
Loans and leases held-for-sale    1,575   869   3,247   937 
Loans and leases:         
Commercial real estate loans:         
Commercial real estate mortgage 2,441,091   2,421,104   2,355,507   2,330,725   2,287,979 
Multi-family mortgage 919,234   877,330   855,703   847,711   828,849 
Construction 229,126   195,120   199,258   173,300   164,217 
Total commercial real estate loans 3,589,451   3,493,554   3,410,468   3,351,736   3,281,045 
Commercial loans and leases:         
Commercial 766,883   763,145   741,577   736,418   771,200 
Equipment financing 1,029,280   1,015,205   995,863   982,089   954,579 
Condominium association 54,225   47,986   49,142   50,451   52,205 
Total commercial loans and leases 1,850,388   1,826,336   1,786,582   1,768,958   1,777,984 
Consumer loans:         
Residential mortgage 792,733   769,983   775,578   782,968   759,167 
Home equity 375,257   374,746   376,126   376,484   380,303 
Other consumer 38,992   40,710   39,443   23,370   29,208 
Total consumer loans 1,206,982   1,185,439   1,191,147   1,182,822   1,168,678 
Total loans and leases` 6,646,821   6,505,329   6,388,197   6,303,516   6,227,707 
Allowance for loan and lease losses (59,135)  (58,635)  (58,041)  (58,692)  (59,997)
Net loans and leases 6,587,686   6,446,694   6,330,156   6,244,824   6,167,710 
Restricted equity securities 57,896   55,270   54,192   61,751   63,963 
Premises and equipment, net of accumulated depreciation 75,229   75,373   75,520   76,382   77,886 
Right-of-use asset operating leases 26,216   25,928   26,205       
Deferred tax asset 25,204   25,629   27,084   21,495   22,249 
Goodwill 160,427   160,427   160,427   160,427   160,427 
Identified intangible assets, net of accumulated amortization 4,843   5,264   5,684   6,086   6,623 
Other real estate owned and repossessed assets 2,132   1,966   3,912   4,019   3,934 
Other assets 193,190   155,291   115,687   103,214   108,350 
Total assets$7,878,436  $7,636,980  $7,519,130  $7,392,805  $7,320,596 
LIABILITIES AND STOCKHOLDERS' EQUITY         
Deposits:         
Non-interest-bearing deposits:         
Demand checking accounts$1,106,684  $1,042,854  $1,011,031  $1,033,551  $1,017,234 
Interest-bearing deposits:         
NOW accounts 340,321   340,082   369,896   336,317   322,587 
Savings accounts 604,481   585,322   625,770   619,961   612,210 
Money market accounts 1,666,231   1,669,782   1,706,708   1,675,050   1,623,220 
Certificate of deposit accounts 2,011,622   1,984,453   1,907,228   1,789,165   1,658,360 
Total interest-bearing deposits 4,622,655   4,579,639   4,609,602   4,420,493   4,216,377 
Total deposits 5,729,339   5,622,493   5,620,633   5,454,044   5,233,611 
Borrowed funds:         
Advances from the FHLBB 854,481   791,559   730,018   784,375   959,446 
Subordinated debentures and notes 83,551   83,512   83,472   83,433   83,392 
Other borrowed funds 48,373   55,693   52,515   52,734   40,048 
Total borrowed funds 986,405   930,764   866,005   920,542   1,082,886 
Operating lease liabilities 26,216   25,928   26,205       
Mortgagors’ escrow accounts 7,072   6,823   7,517   7,426   8,227 
Accrued expenses and other liabilities 197,093   132,504   98,198   100,174   96,047 
Total liabilities 6,946,125   6,718,512   6,618,558   6,482,186   6,420,771 
Stockholders' equity:         
Brookline Bancorp, Inc. stockholders’ equity:         
Common stock, $0.01 par value; 200,000,000 shares authorized; 85,177,172 shares issued, 85,177,172 shares issued, 85,177,172 shares issued, 85,177,172 shares issued, and 85,177,172 shares issued, respectively 852   852   852   852   852 
Additional paid-in capital 735,928   737,584   736,872   755,629   753,941 
Retained earnings, partially restricted 252,435   238,625   226,929   212,838   200,151 
Accumulated other comprehensive loss 2,775   1,141   (4,393)  (9,460)  (15,599)
Treasury stock, at cost;         
5,003,127 shares, 5,025,764 shares, 5,020,025 shares, 5,020,025 shares, and 4,291,317 shares, respectively (59,176)  (59,199)  (59,121)  (59,120)  (48,334)
Unallocated common stock held by the Employee Stock Ownership Plan;         
92,337 shares, 98,208 shares, 104,079 shares,109,950 shares, and 118,050 shares, respectively (503)  (535)  (567)  (599)  (643)
Total Brookline Bancorp, Inc. stockholders’ equity 932,311   918,468   900,572   900,140   890,368 
Noncontrolling interest in subsidiary          10,479   9,457 
Total stockholders' equity 932,311   918,468   900,572   910,619   899,825 
Total liabilities and stockholders' equity$7,878,436  $7,636,980  $7,519,130  $7,392,805  $7,320,596 
          


BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Consolidated Statements of Income (Unaudited)
 Three Months Ended
 September 30, 2019 June 30, 2019 March 31, 2019 December 31, 2018 September 30, 2018
  
 (In Thousands Except Share Data)
Interest and dividend income:         
Loans and leases$83,566  $82,798 $80,672 $78,791  $75,877 
Debt securities 2,977   3,158  3,236  3,489   3,585 
Marketable and restricted equity securities 876   877  911  1,008   1,029 
Short-term investments 487   351  267  256   145 
Total interest and dividend income 87,906   87,184  85,086  83,544   80,636 
Interest expense:         
Deposits 18,300   17,712  15,948  13,744   11,916 
Borrowed funds 6,370   6,338  6,139  6,641   6,388 
Total interest expense 24,670   24,050  22,087  20,385   18,304 
Net interest income 63,236   63,134  62,999  63,159   62,332 
Provision for credit losses 871   3,757  1,353  123   2,717 
Net interest income after provision for credit losses 62,365   59,377  61,646  63,036   59,615 
Non-interest income:         
Deposit fees 2,710   2,680  2,523  2,669   2,648 
Loan fees 719   398  413  390   417 
Loan level derivative income, net 2,251   1,772  1,745  1,811   2,192 
Gain (loss) on investment securities, net (116)  357  134  (692)  (243)
Gain on sales of loans and leases held-for-sale 550   561  289  327   535 
Other 1,815   1,710  1,526  1,956   1,520 
Total non-interest income 7,929   7,478  6,630  6,461   7,069 
Non-interest expense:         
Compensation and employee benefits 24,871   23,953  23,743  24,413   22,338 
Occupancy 3,895   3,752  3,947  3,240   3,913 
Equipment and data processing 4,749   4,641  4,661  4,626   4,601 
Professional services 1,083   1,087  1,076  1,130   1,075 
FDIC insurance 54   745  593  727   846 
Advertising and marketing 1,035   1,112  1,069  773   1,068 
Amortization of identified intangible assets 421   420  402  537   537 
Merger and restructuring expense 1,125       526   22 
Other 2,958   3,894  3,380  4,310   2,910 
Total non-interest expense 40,191   39,604  38,871  40,282   37,310 
Income before provision for income taxes 30,103   27,251  29,405  29,215   29,374 
Provision for income taxes 7,507   6,780  6,895  7,055   6,140 
Net income before noncontrolling interest in subsidiary 22,596   20,471  22,510  22,160   23,234 
Less net income attributable to noncontrolling interest in subsidiary      43  1,022   774 
Net income attributable to Brookline Bancorp, Inc.$22,596  $20,471 $22,467 $21,138  $22,460 
Earnings per common share:         
Basic$0.28  $0.26 $0.28 $0.26  $0.28 
Diluted$0.28  $0.26 $0.28 $0.26  $0.28 
Weighted average common shares outstanding during the period:        
Basic 79,700,403   79,669,922  79,658,583  80,258,456   80,315,050 
Diluted 79,883,510   79,886,292  79,843,578  80,407,525   80,515,467 
Dividends paid per common share$0.110  $0.110 $0.105 $0.105  $0.100 
          


BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Consolidated Statements of Income (Unaudited)
  
 Nine Months Ended September 30,
  2019  2018
  
 (In Thousands Except Share Data)
Interest and dividend income:   
Loans and leases$247,036 $216,478
Debt securities 9,371  10,471
Marketable and restricted equity securities 2,664  2,956
Short-term investments 1,105  444
Total interest and dividend income 260,176  230,349
Interest expense:   
Deposits 51,960  28,234
Borrowed funds 18,847  17,575
Total interest expense 70,807  45,809
Net interest income 189,369  184,540
Provision for credit losses 5,981  4,828
Net interest income after provision for credit losses 183,388  179,712
Non-interest income:   
Deposit Fees 7,913  7,731
Loan Fees 1,530  1,037
Loan level derivative income, net 5,768  3,629
Gain on investment securities, net 375  1,162
Gain on sales of loans and leases held-for-sale 1,400  1,556
Other 5,051  3,648
Total non-interest income 22,037  18,763
Non-interest expense:   
Compensation and employee benefits 72,567  67,217
Occupancy 11,594  11,751
Equipment and data processing 14,051  13,587
Professional services 3,246  3,274
FDIC insurance 1,392  1,995
Advertising and marketing 3,216  3,243
Amortization of identified intangible assets 1,243  1,543
Merger and restructuring expense 1,125  3,261
Other 10,232  9,079
Total non-interest expense 118,666  114,950
Income before provision for income taxes 86,759  83,525
Provision for income taxes 21,182  19,134
Net income before noncontrolling interest in subsidiary 65,577  64,391
Less net income attributable to noncontrolling interest in subsidiary 43  2,467
Net income attributable to Brookline Bancorp, Inc.$65,534 $61,924
Earnings per common share:   
Basic$0.82 $0.78
Diluted$0.82 $0.78
Weighted average common shares outstanding during the period:  
Basic 79,676,456  79,471,238
Diluted 79,867,683  79,740,992
Dividends paid per common share$0.325 $0.290
    


BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Asset Quality Analysis (Unaudited)
 At and for the Three Months Ended
 September 30, 2019 June 30, 2019 March 31,
2019
 December 31, 2018 September 30, 2018
  
 (Dollars in Thousands)
NONPERFORMING ASSETS:         
Loans and leases accounted for on a nonaccrual basis:         
Commercial real estate mortgage$2,910  $2,273  $2,889  $3,928  $3,369 
Multi-family mortgage 87   94   101   330   357 
Construction       396   396   640 
Total commercial real estate loans 2,997   2,367   3,386   4,654   4,366 
          
Commercial 3,139   6,349   5,728   6,621   7,862 
Equipment financing 12,817   9,931   10,253   9,500   9,659 
Condominium association 163   170   224   265   295 
Total commercial loans and leases 16,119   16,450   16,205   16,386   17,816 
          
Residential mortgage 1,605   1,642   2,188   2,132   2,538 
Home equity 904   835   1,022   908   1,053 
Other consumer 3   7   8   17   11 
Total consumer loans 2,512   2,484   3,218   3,057   3,602 
          
Total nonaccrual loans and leases 21,628   21,301   22,809   24,097   25,784 
          
Other real estate owned 201   957   3,054   3,054   3,136 
Other repossessed assets 1,931   1,009   858   965   798 
Total nonperforming assets$23,760  $23,267  $26,721  $28,116  $29,718 
          
Loans and leases past due greater than 90 days and still accruing$11,885  $11,612  $16,800  $13,482  $14,954 
          
Troubled debt restructurings on accrual 22,233   27,761   28,543   12,257   12,657 
Troubled debt restructurings on nonaccrual 5,763   8,431   7,597   8,684   8,779 
Total troubled debt restructurings$27,996  $36,192  $36,140  $20,941  $21,436 
          
Nonperforming loans and leases as a percentage of total loans and leases 0.33%  0.33%  0.36%  0.38%  0.41%
Nonperforming assets as a percentage of total assets 0.30%  0.30%  0.36%  0.38%  0.41%
          
PROVISION AND ALLOWANCE FOR LOAN AND LEASE LOSSES:      
Allowance for loan and lease losses at beginning of period$58,635  $58,041  $58,692  $59,997  $57,981 
Charge-offs (1,190)  (3,412)  (2,542)  (1,604)  (1,227)
Recoveries 824   330   441   352   663 
Net charge-offs (366)  (3,082)  (2,101)  (1,252)  (564)
Provision for loan and lease losses 866   3,676   1,450   (53)  2,580 
Allowance for loan and lease losses at end of period$59,135  $58,635  $58,041  $58,692  $59,997 
          
Allowance for loan and lease losses as a percentage of total loans and leases 0.89%  0.90%  0.91%  0.93%  0.96%
Allowance for loan and lease losses related to originated loans and leases as a percentage of originated loans and leases (non-GAAP) 0.90%  0.92%  0.93%  0.96%  1.00%
          
NET CHARGE-OFFS:         
Commercial real estate loans$  $  $  $  $ 
Commercial loans and leases 403   3,107   2,124   883   579 
Consumer loans (37)  (25)  (23)  369   (15)
Total net charge-offs$366  $3,082  $2,101  $1,252  $564 
          
Net loan and lease charge-offs as a percentage of average loans and leases (annualized) 0.02%  0.19%  0.13%  0.08%  0.04%
          


BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Average Yields / Costs (Unaudited)
 Three Months Ended
 September 30, 2019 June 30, 2019 September 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)$573,389  $3,027 2.11% $593,404  $3,210 2.16% $663,125  $3,638 2.20%
Marketable and restricted equity securities (2) 59,638   885 5.94%  59,224   888 5.99%  67,607   1,029 6.09%
Short-term investments 70,707   487 2.76%  44,634   351 3.14%  31,061   145 1.87%
Total investments 703,734   4,399 2.50%  697,262   4,449 2.55%  761,793   4,812 2.53%
Loans and Leases:                 
Commercial real estate loans (3) 3,539,485   41,724 4.61%  3,447,136   41,363 4.75%  3,260,634   37,332 4.48%
Commercial loans (3) 838,092   10,291 4.81%  811,890   9,879 4.82%  819,383   9,862 4.72%
Equipment financing (3) 1,019,179   18,519 7.27%  1,005,376   18,291 7.28%  933,007   16,220 6.95%
Residential mortgage loans (3) 776,482   8,215 4.23%  774,533   8,186 4.23%  756,421   7,648 4.04%
Other consumer loans (3) 415,082   4,917 4.69%  417,600   5,187 4.97%  412,248   4,928 4.73%
Total loans and leases 6,588,320   83,666 5.08%  6,456,535   82,906 5.14%  6,181,693   75,990 4.92%
   Total interest-earning assets 7,292,054   88,065 4.83%  7,153,797   87,355 4.88%  6,943,486   80,802 4.65%
Allowance for loan and lease losses (59,386)      (58,137)      (58,576)    
Non-interest-earning assets 513,824       475,736       417,503     
Total assets$7,746,492      $7,571,396      $7,302,413     
                  
Liabilities and Stockholders' Equity:                 
Interest-bearing liabilities:                 
Deposits:                 
NOW accounts$335,091   129 0.15% $343,745   50 0.06% $344,760   72 0.08%
Savings accounts 600,609   820 0.54%  602,333   737 0.49%  599,514   472 0.31%
Money market accounts 1,683,548   5,413 1.28%  1,683,735   5,571 1.33%  1,668,402   4,367 1.04%
Certificates of deposit 2,000,941   11,938 2.37%  1,950,704   11,354 2.33%  1,612,551   7,005 1.72%
Total interest-bearing deposits 4,620,189   18,300 1.57%  4,580,517   17,712 1.55%  4,225,227   11,916 1.12%
Borrowings                 
Advances from the FHLBB 759,738   4,859 2.50%  761,651   4,825 2.51%  907,306   4,979 2.15%
Subordinated debentures and notes 83,530   1,300 6.22%  83,490   1,305 6.25%  83,370   1,301 6.24%
Other borrowed funds 79,620   211 1.05%  84,600   208 0.99%  56,918   108 0.75%
Total borrowings 922,888   6,370 2.70%  929,741   6,338 2.70%  1,047,594   6,388 2.39%
   Total interest-bearing liabilities 5,543,077   24,670 1.77%  5,510,258   24,050 1.75%  5,272,821   18,304 1.38%
Non-interest-bearing liabilities:                 
Demand checking accounts 1,096,788       1,015,524       1,023,610     
Other non-interest-bearing liabilities 178,564       133,790       107,449     
Total liabilities 6,818,429       6,659,572       6,403,880     
Brookline Bancorp, Inc. stockholders’ equity 928,063       911,824       889,259     
Noncontrolling interest in subsidiary               9,274     
Total liabilities and equity$7,746,492      $7,571,396      $7,302,413     
Net interest income (tax-equivalent basis) /Interest-rate spread (4)   63,395 3.06%    63,305 3.13%    62,498 3.27%
Less adjustment of tax-exempt income   159      171      166  
Net interest income  $63,236     $63,134     $62,332  
Net interest margin (5)    3.45%     3.55%     3.57%
                  
(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)
 Nine Months Ended
 September 30, 2019 September 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)$591,535  $9,526 2.15% $658,993  $10,632 2.15%
Marketable and restricted equity securities (2) 59,747   2,693 6.01%  67,056   2,956 5.88%
Short-term investments 49,833   1,105 2.96%  34,295   444 1.73%
Total investments 701,115   13,324 2.53%  760,344   14,032 2.46%
Loans and Leases:           
Commercial real estate loans (3) 3,454,996   123,106 4.70%  3,209,798   107,133 4.40%
Commercial loans (3) 814,392   29,773 4.82%  809,849   27,609 4.50%
Equipment financing (3) 1,004,363   54,795 7.27%  905,345   46,823 6.90%
Residential mortgage loans (3) 776,440   24,524 4.21%  740,507   21,933 3.95%
Other consumer loans (3) 413,645   15,155 4.89%  400,304   13,333 4.45%
Total loans and leases 6,463,836   247,353 5.10%  6,065,803   216,831 4.77%
   Total interest-earning assets 7,164,951   260,677 4.85%  6,826,147   230,863 4.51%
Allowance for loan and lease losses (58,759)      (58,935)    
Non-interest-earning assets 479,046       401,999     
Total assets$7,585,238      $7,169,211     
            
Liabilities and Stockholders' Equity:           
Interest-bearing liabilities:           
Deposits:           
NOW accounts$337,671   321 0.13% $342,418   195 0.08%
Savings accounts 609,284   2,154 0.47%  619,317   1,278 0.28%
Money market accounts 1,681,594   16,259 1.29%  1,735,710   10,455 0.81%
Certificates of deposit 1,932,625   33,226 2.30%  1,428,799   16,306 1.53%
Total interest-bearing deposits 4,561,174   51,960 1.52%  4,126,244   28,234 0.91%
Borrowings           
Advances from the FHLBB 758,992   14,294 2.48%  960,399   13,423 1.84%
Subordinated debentures and notes 83,491   3,913 6.25%  83,330   3,879 6.21%
Other borrowed funds 84,477   640 1.01%  46,643   273 0.78%
Total borrowings 926,960   18,847 2.68%  1,090,372   17,575 2.13%
   Total interest-bearing liabilities 5,488,134   70,807 1.72%  5,216,616   45,809 1.17%
Non-interest-bearing liabilities:           
Demand checking accounts 1,046,683       986,763     
Other non-interest-bearing liabilities 141,305       92,280     
Total liabilities 6,676,122       6,295,659     
Brookline Bancorp, Inc. stockholders’ equity 908,994       864,675     
Noncontrolling interest in subsidiary 122       8,877     
Total liabilities and equity$7,585,238      $7,169,211     
Net interest income (tax-equivalent basis) /Interest-rate spread (4)   189,870 3.13%    185,054 3.34%
Less adjustment of tax-exempt income   501      514  
Net interest income  $189,369     $184,540  
Net interest margin (5)    3.54%     3.62%
            
(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 
 September 30,
 At and for the Nine Months Ended 
 September 30,
    2019   2018   2019   2018 
   
Reconciliation Table - Non-GAAP Financial Information (Dollars in Thousands Except Share Data)
         
Net income attributable to Brookline Bancorp, Inc. $22,596  $22,460  $65,534  $61,924 
Less:         
Security gains (after-tax)  (87)     284   883 
Add:         
Merger and restructuring-related expenses (after-tax)  845   17   851   2,478 
Operating earnings  $23,528  $22,477  $66,101  $63,519 
          
Operating earnings per common share:         
Basic  $0.30  $0.28  $0.83  $0.80 
Diluted   0.29   0.28   0.83   0.80 
          
Weighted average common shares outstanding during the period:        
Basic   79,700,403   80,315,050   79,676,456   79,471,238 
Diluted   79,883,510   80,515,467   79,867,683   79,740,992 
          
          
Return on average assets *  1.17%  1.23%  1.15%  1.15%
Less:         
Security gains (after-tax) *  %  %  %  0.02%
Add:         
Merger and restructuring-related expenses (after-tax) *  0.04%  %  0.01%  0.05%
Operating return on average assets *  1.21%  1.23%  1.16%  1.18%
          
          
Return on average tangible assets *  1.19%  1.26%  1.18%  1.18%
Less:         
Security gains (after-tax) *  %  %  0.01%  0.02%
Add:         
Merger and restructuring-related expenses (after-tax) *  0.05%  %  0.02%  0.05%
Operating return on average tangible assets *  1.24%  1.26%  1.19%  1.21%
          
          
Return on average stockholders' equity *  9.74%  10.10%  9.61%  9.55%
Less:         
Security gains (after-tax) *  (0.04)%  %  0.04%  0.14%
Add:         
Merger and restructuring-related expenses (after-tax) *  0.36%  0.01%  0.13%  0.38%
Operating return on average stockholders' equity *  10.14%  10.11%  9.70%  9.79%
          
          
Return on average tangible stockholders' equity *  11.85%  12.44%  11.76%  11.76%
Less:         
Security gains (after-tax) *  (0.05)%  %  0.05%  0.17%
Add:         
Merger and restructuring-related expenses (after-tax) *  0.44%  0.01%  0.15%  0.47%
Operating return on average tangible stockholders' equity *  12.34%  12.45%  11.86%  12.06%
          
* Ratios at and for the three and nine months ended are annualized.        
          
          
 At and for the Three Months Ended
 September 30,
2019
 June 30,
2019
 March 31,
2019
 December 31,
2018
 September 30,
2018
  
 (Dollars in Thousands)
          
Net income, as reported$22,596  $20,471  $22,467  $21,138  $22,460 
          
Average total assets$7,746,492  $7,571,396  $7,434,038  $7,382,931  $7,302,413 
Less: Average goodwill and average identified intangible assets, net 165,493   165,914   166,327   166,777   167,313 
Average tangible assets$7,580,999  $7,405,482  $7,267,711  $7,216,154  $7,135,100 
          
Return on average tangible assets (annualized) 1.19 %  1.11 %  1.24 %  1.17 %  1.26 %
          
Average total stockholders’ equity$928,063  $911,824  $886,639  $899,244  $889,259 
Less: Average goodwill and average identified intangible assets, net 165,493   165,914   166,327   166,777   167,313 
Average tangible stockholders’ equity$762,570  $745,910  $720,312  $732,467  $721,946 
          
Return on average tangible stockholders’ equity (annualized) 11.85 %  10.98 %  12.48 %  11.54 %  12.44 %
          
Brookline Bancorp, Inc. stockholders’ equity$932,311  $918,468  $900,572  $900,140  $890,368 
Less:         
Goodwill 160,427   160,427   160,427   160,427   160,427 
Identified intangible assets, net 4,843   5,264   5,684   6,086   6,623 
Tangible stockholders' equity$767,041  $752,777  $734,461  $733,627  $723,318 
          
Total assets$7,878,436  $7,636,980  $7,519,130  $7,392,805  $7,320,596 
Less:         
Goodwill 160,427   160,427   160,427   160,427   160,427 
Identified intangible assets, net 4,843   5,264   5,684   6,086   6,623 
Tangible assets$7,713,166  $7,471,289  $7,353,019  $7,226,292  $7,153,546 
          
Tangible stockholders’ equity to tangible assets 9.94 %  10.08 %  9.99 %  10.15 %  10.11 %
          
Tangible stockholders' equity$767,041  $752,777  $734,461  $733,627  $723,318 
          
Number of common shares issued 85,177,172   85,177,172   85,177,172   85,177,172   85,177,172 
Less:         
Treasury shares 5,003,127   5,025,764   5,020,025   5,020,025   4,291,317 
Unallocated ESOP shares 92,337   98,208   104,079   109,950   118,050 
Unvested restricted shares 407,784   377,122   390,636   393,636   398,094 
Number of common shares outstanding 79,673,924   79,676,078   79,662,432   79,653,561   80,369,711 
          
Tangible book value per common share$9.63  $9.45  $9.22  $9.21  $9.00 
          
Allowance for loan and lease losses$59,135  $58,635  $58,041  $58,692  $59,997 
Less:         
Allowance for acquired loans and leases losses 1,955   1,857   1,795   1,814   1,817 
Allowance for originated loan and lease losses$57,180  $56,778  $56,246  $56,878  $58,180 
          
Total loans and leases$6,646,821  $6,505,329  $6,388,197  $6,303,516  $6,227,707 
Less:         
Total acquired loans and leases 310,745   337,420   370,177   394,407   426,865 
Total originated loans and leases$6,336,076  $6,167,909  $6,018,020  $5,909,109  $5,800,842 
          
Allowance for loan and lease losses related to originated loans and leases as a percentage of originated loans and leases 0.90 %  0.92 %  0.93 %  0.96 %  1.00 %