Brookline Bancorp Announces Second Quarter Results

Net Income of $19.6 million, EPS of $0.25

Announces $0.115 Dividend per Share

BOSTON, July 22, 2020 (GLOBE NEWSWIRE) -- Brookline Bancorp, Inc. (NASDAQ: BRKL) (the “Company”) today announced net income of $19.6 million, or $0.25 per basic and diluted share, for the second quarter of 2020, compared to net loss of $(17.3) million, or $(0.22) per basic and diluted share, for the first quarter of 2020, and net income of $20.5 million, or $0.26 per basic and diluted share, for the second quarter of 2019.

Paul Perrault, President and Chief Executive Officer of the Company noted, “The continued strength of our Company’s core operations is reflected in this quarter’s earnings.  While we remain vigilant as we look to the future, the business lines that are fundamental to our success continue to operate effectively in these challenging times.”

BALANCE SHEET

Total assets at June 30, 2020 increased $608.1 million to $9.1 billion from $8.5 billion at March 31, 2020, and increased $1.4 billion from $7.6 billion at June 30, 2019. At June 30, 2020, total loans and leases were $7.4 billion, representing an increase of $585.2 million from March 31, 2020, and an increase of $902.4 million from June 30, 2019, primarily driven by loans originated under the Small Business Administration's Paycheck Protection Program ("PPP"). The Company funded $565.8 million of PPP loans in the second quarter of 2020.

Total investment securities at June 30, 2020 increased $92.4 million to $856.5 million, as compared to $764.1 million at March 31, 2020, and increased approximately $265.7 million from $590.8 million at June 30, 2019. Total cash and cash equivalents at June 30, 2020 decreased $85.9 million to $254.9 million, as compared to $340.8 million at March 31, 2020, and increased $162.1 million from $92.8 million at June 30, 2019. As of June 30, 2020, total investment securities and total cash and cash equivalents represented 12.3 percent of total assets as compared to 13.1 percent and 9.0 percent as of March 31, 2020 and June 30, 2019, respectively.

Total deposits at June 30, 2020 increased $550.3 million to $6.4 billion from $5.9 billion at March 31, 2020 and increased $817.7 million from $5.6 billion at June 30, 2019.

Total borrowed funds at June 30, 2020 increased $114.9 million to $1.4 billion from $1.3 billion at March 31, 2020 and increased $475.9 million from $930.8 million at June 30, 2019.

The ratio of stockholders’ equity to total assets was 10.21 percent at June 30, 2020, as compared to 10.78 percent at March 31, 2020, and 12.03 percent at June 30, 2019. The ratio of tangible stockholders’ equity to tangible assets was 8.56 percent at June 30, 2020, as compared to 9.02 percent at March 31, 2020, and 10.08 percent at June 30, 2019. Tangible book value per share increased $0.18 from $9.49 at March 31, 2020 to $9.67 at June 30, 2020, compared to $9.45 at June 30, 2019.

NET INTEREST INCOME

Net interest income increased $2.6 million to $64.3 million during the second quarter of 2020 from $61.7 million at the quarter ended March 31, 2020. The net interest margin decreased 22 basis points to 3.09 percent for the three months ended June 30, 2020.

NON-INTEREST INCOME

Total non-interest income for the quarter ended June 30, 2020 decreased $3.1 million to $6.2 million from $9.3 million for the quarter ended March 31, 2020. The decrease was primarily driven by decreases of $0.5 million in deposit fees, $0.7 million in loan level derivative income, net, $0.7 million in gain on investment securities, net and $1.2 million in other non-interest income.

PROVISION FOR CREDIT LOSSES

On January 1, 2020, the Company adopted ASU 2016-13 "Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments", commonly referred to as CECL. 

The Company recorded a provision for credit losses of  $5.3 million for the quarter ended June 30, 2020, compared to $54.1 million for the quarter ended March 31, 2020. Asset quality was consistent during the second quarter and the increase in provision was primarily driven by the forecasted economic effect of the COVID-19 pandemic.

Total net charge-offs for the second quarter of 2020 were $1.4 million compared to $2.2 million in the first quarter of 2020. The ratio of net loan and lease charge-offs to average loans and leases on an annualized basis decreased to 8 basis points for the second quarter of 2020 from 13 basis points for the first quarter of 2020.

The allowance for loan and lease losses represented 1.61 percent of total loans and leases at June 30, 2020, compared to 1.66 percent at March 31, 2020, and 0.90 percent at June 30, 2019. Excluding PPP loans, the allowance for loan losses and lease losses represents 1.75 percent coverage at June 30, 2020 compared to 1.66 percent at March 31, 2020.

NON-INTEREST EXPENSE

Non-interest expense for the quarter ended June 30, 2020 decreased $1.6 million to $39.1 million from $40.7 million for the quarter ended March 31, 2020. The decrease was primarily driven by decreases of $0.6 million in compensation and employee benefits expense, $0.5 million in equipment and data processing expense, and $0.5 million in professional services expense.

PROVISION FOR INCOME TAXES

The effective tax rate was 24.9 percent and a negative 2.2 percent for the three and six months ended June 30, 2020 compared to 27.5 percent for the three months ended March 31, 2020 and 24.9 percent and 24.1 percent for the three and six months ended June 30, 2019.

RETURNS ON AVERAGE ASSETS AND AVERAGE EQUITY

The annualized return on average assets increased to 0.88 percent during the second quarter 2020 from a negative 0.87 percent for the first quarter of 2020.

The annualized return on average stockholders' equity increased to 8.45 percent during the second quarter of 2020 from a negative 7.30 percent for the first quarter of 2020. The annualized return on average tangible stockholders’ equity increased to 10.28 percent for the second quarter of 2020 from a negative 8.84 percent for the first quarter of 2020.

ASSET QUALITY

The ratio of nonperforming loans and leases to total loans and leases was 0.56 percent at June 30, 2020, a decrease from 0.57 percent at March 31, 2020. Nonperforming loans and leases increased $2.2 million to $41.3 million at June 30, 2020 from $39.1 million at March 31, 2020. The ratio of nonperforming assets to total assets was 0.47 percent at June 30, 2020, a decrease from 0.49 percent at March 31, 2020. Nonperforming assets increased $1.6 million to $42.8 million at June 30, 2020 from $41.1 million at March 31, 2020.

From March 1, 2020 through the earlier of December 31, 2020 or 60 days after the termination date of the national emergency declared by the President on March 13, 2020 concerning the COVID-19 outbreak (the “national emergency”), a financial institution may elect to suspend the requirements under accounting principles generally accepted in the U.S. for loan modifications related to the COVID-19 pandemic that would otherwise be categorized as a troubled debt restructured, including impairment accounting. This troubled debt restructuring relief applies for the term of the loan modification that occurs during the applicable period for a loan that was not more than 30 days past due as of December 31, 2019. Financial institutions are required to maintain records of the volume of loans involved in modifications to which troubled debt restructuring relief is applicable. As of June 30, 2020, the banks have granted 5,366 short-term deferments on loan balances of $1.2 billion, which represented 16 percent of total loan balances.

DIVIDEND DECLARED

The Company’s Board of Directors approved a dividend of $0.115 per share for the quarter ended June 30, 2020. The dividend will be paid on August 21, 2020 to stockholders of record on August 7, 2020.

CONFERENCE CALL

The Company will conduct a conference call/webcast at 1:30 PM Eastern Daylight Time on Thursday, July 23, 2020 to discuss the results for the quarter, business highlights and outlook. The call can be accessed by dialing 877-504-4120 (United States) or 412-902-6650 (internationally) or by visiting https://services.choruscall.com/links/brkl200723.html.  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 10145885. 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 $9.1 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 and Bank Rhode Island (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 and www.bankri.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. Statements contained in this press release that do not describe historical or current facts are forward-looking statements, including statements regard the potential effects of COVID-19 on the Company’s business, credit quality, financial condition, liquidity and results of operations. Forward-looking statements made with regard to the potential effects of COVID-19 on the Company’s business, financial condition, credit quality, liquidity and results of operation may differ, possibly materially, from what is included in this press release due to factors and future developments that are uncertain and beyond the scope of the Company’s control. These included, but are not limited to, the length and extent of the economic contraction as a result of the COVID-19 pandemic; continued deterioration in employment levels, general business and economic conditions on a national basis and in the local markets in which the Company operates; the possibility that future credit losses may be higher than currently expected; changes in consumer behavior due to changing political business and economic conditions or legislative or regulatory initiatives; the possibility that future credit losses may be higher than currently expected; reputational risk relating to the Company’s participation in the Paycheck Protection Program and other pandemic-related legislative and regulatory initiatives and programs; and turbulence in capital and debt markets. Forward-looking statements involve risks and uncertainties which are difficult to predict. 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.

INVESTOR RELATIONS:

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, 2020 March 31, 2020 December 31, 2019 September 30, 2019 June 30, 2019
 (Dollars In Thousands Except per Share Data)
Earnings Data:         
Net interest income$64,288  $61,712  $63,931  $63,236  $63,134 
Provision for credit losses 5,347   54,114   3,602   871   3,757 
Non-interest income 6,235   9,328   7,756   7,929   7,478 
Non-interest expense 39,109   40,748   38,815   40,191   39,604 
Income (loss) before provision for income taxes 26,067   (23,822)  29,270   30,103   27,251 
Net income (loss) attributable to Brookline Bancorp, Inc. 19,571   (17,276)  22,183   22,596   20,471 
          
Performance Ratios:         
Net interest margin (1) 3.09%  3.31%  3.43%  3.45%  3.55%
Interest-rate spread (1) 2.75%  2.91%  3.05%  3.06%  3.13%
Return on average assets (annualized) 0.88%  (0.87)%  1.13%  1.17%  1.08%
Return on average tangible assets (annualized) (non-GAAP) 0.90%  (0.89)%  1.15%  1.19%  1.11%
Return on average stockholders' equity (annualized) 8.45%  (7.30)%  9.42%  9.74%  8.98%
Return on average tangible stockholders' equity (annualized) (non-GAAP) 10.28%  (8.84)%  11.42%  11.85%  10.98%
Efficiency ratio (2) 55.46%  57.36%  54.15%  56.48%  56.09%
          
Per Common Share Data:         
Net income (loss) — Basic$0.25  $(0.22) $0.28  $0.28  $0.26 
Net income (loss) — Diluted 0.25   (0.22)  0.28   0.28   0.26 
Cash dividends declared 0.115   0.115   0.115   0.115   0.110 
Book value per share (end of period) 11.75   11.57   11.87   11.70   11.53 
Tangible book value per share (end of period) (non-GAAP) 9.67   9.49   9.80   9.63   9.45 
Stock price (end of period) 10.08   11.28   16.46   14.73   15.38 
Balance Sheet:         
Total assets$9,069,667  $8,461,591  $7,856,853  $7,878,436  $7,636,980 
Total loans and leases 7,407,697   6,822,527   6,737,816   6,646,821   6,505,329 
Total deposits 6,440,233   5,889,938   5,830,072   5,729,339   5,622,493 
Brookline Bancorp, Inc. stockholders’ equity 926,413   912,568   945,606   932,311   918,468 
          
Asset Quality:         
Nonperforming assets$42,754  $41,122  $22,092  $23,760  $23,267 
Nonperforming assets as a percentage of total assets 0.47%  0.49%  0.28%  0.30%  0.30%
Allowance for loan and lease losses$119,553  $113,181  $61,082  $59,135  $58,635 
Allowance for loan and lease losses as a percentage of total loans and leases 1.61%  1.66%  0.91%  0.89%  0.90%
Net loan and lease charge-offs$1,383  $2,234  $1,622  $366  $3,082 
Net loan and lease charge-offs as a percentage of average loans and leases (annualized) 0.08%  0.13%  0.10%  0.02%  0.19%
          
Capital Ratios:         
Stockholders’ equity to total assets 10.21%  10.78%  12.04%  11.83%  12.03%
Tangible stockholders’ equity to tangible assets (non-GAAP) 8.56%  9.02%  10.15%  9.94%  10.08%
          

(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, 2020 March 31, 2020 December 31, 2019 September 30, 2019 June 30, 2019
ASSETS(In Thousands Except Share Data)
Cash and due from banks$38,522  $86,996  $33,589  $93,841  $46,532 
Short-term investments 216,394   253,772   44,201   84,689   46,264 
Total cash and cash equivalents 254,916   340,768   77,790   178,530   92,796 
Investment securities available-for-sale 854,505   761,539   498,995   467,339   482,497 
Investment securities held-to-maturity       86,780   95,163   103,572 
Equity securities held-for-trading 1,992   2,558   3,581   4,581   4,698 
Total investment securities 856,497   764,097   589,356   567,083   590,767 
Loans and leases held-for-sale             1,575 
Loans and leases:         
Commercial real estate loans 3,837,703   3,762,158   3,669,222   3,589,451   3,493,554 
Commercial loans and leases 2,361,463   1,826,866   1,838,748   1,850,388   1,826,336 
Consumer loans 1,208,531   1,233,503   1,229,846   1,206,982   1,185,439 
Total loans and leases 7,407,697   6,822,527   6,737,816   6,646,821   6,505,329 
Allowance for loan and lease losses (119,553)  (113,181)  (61,082)  (59,135)  (58,635)
Net loans and leases 7,288,144   6,709,346   6,676,734   6,587,686   6,446,694 
Restricted equity securities 71,638   68,472   53,818   57,896   55,270 
Premises and equipment, net of accumulated depreciation 73,127   73,786   74,350   75,229   75,373 
Right-of-use asset operating leases 24,343   24,789   24,876   26,216   25,928 
Deferred tax asset 42,683   38,141   25,017   25,204   25,629 
Goodwill 160,427   160,427   160,427   160,427   160,427 
Identified intangible assets, net of accumulated amortization 3,775   4,087   4,423   4,843   5,264 
Other real estate owned and repossessed assets 1,454   2,038   2,631   2,132   1,966 
Other assets 292,663   275,640   167,431   193,190   155,291 
Total assets$9,069,667  $8,461,591  $7,856,853  $7,878,436  $7,636,980 
LIABILITIES AND STOCKHOLDERS' EQUITY         
Deposits:         
Demand checking accounts$1,603,037  $1,175,329  $1,141,578  $1,106,684  $1,042,854 
NOW accounts 417,622   361,854   371,380   340,321   340,082 
Savings accounts 657,758   653,026   613,467   604,481   585,322 
Money market accounts 1,809,868   1,676,092   1,682,005   1,666,231   1,669,782 
Certificate of deposit accounts 1,951,948   2,023,637   2,021,642   2,011,622   1,984,453 
Total deposits 6,440,233   5,889,938   5,830,072   5,729,339   5,622,493 
Borrowed funds:         
Advances from the FHLBB 1,267,570   1,137,431   758,469   854,481   791,559 
Subordinated debentures and notes 83,668   83,630   83,591   83,551   83,512 
Other borrowed funds 55,431   70,743   60,689   48,373   55,693 
Total borrowed funds 1,406,669   1,291,804   902,749   986,405   930,764 
Operating lease liabilities 24,343   24,789   24,876   26,216   25,928 
Mortgagors’ escrow accounts 6,467   7,441   7,232   7,072   6,823 
Reserve for unfunded credits 14,816   17,222   1,880   1,847   1,841 
Accrued expenses and other liabilities 250,726   317,829   144,438   195,246   130,663 
Total liabilities 8,143,254   7,549,023   6,911,247   6,946,125   6,718,512 
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 738,155   737,422   736,601   735,928   737,584 
Retained earnings, partially restricted 237,808   227,359   265,376   252,435   238,625 
Accumulated other comprehensive income (loss) 19,538   16,947   2,283   2,775   1,141 
Treasury stock, at cost;         
5,859,708, 5,862,811, 5,003,127, 5,003,127, and 5,025,764 shares, respectively (69,572)  (69,617)  (59,073)  (59,176)  (59,199)
Unallocated common stock held by the Employee Stock Ownership Plan;         
65,334, 72,441 79,548, 92,337, and 98,208 shares, respectively (368)  (395)  (433)  (503)  (535)
Total stockholders' equity 926,413   912,568   945,606   932,311   918,468 
Total liabilities and stockholders' equity$9,069,667  $8,461,591  $7,856,853  $7,878,436  $7,636,980 
                    


BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Consolidated Statements of Income (Unaudited)
 Three Months Ended
 June 30, 2020 March 31, 2020 December 31, 2019 September 30, 2019 June 30, 2019
 (In Thousands Except Share Data)
Interest and dividend income:         
Loans and leases$77,416 $79,559  $83,309 $83,566  $82,798
Debt securities 3,701  2,976   2,910  2,977   3,158
Marketable and restricted equity securities 908  778   813  876   877
Short-term investments 99  209   418  487   351
Total interest and dividend income 82,124  83,522   87,450  87,906   87,184
Interest expense:         
Deposits 12,778  16,240   17,655  18,300   17,712
Borrowed funds 5,058  5,570   5,864  6,370   6,338
Total interest expense 17,836  21,810   23,519  24,670   24,050
Net interest income 64,288  61,712   63,931  63,236   63,134
Provision for credit losses 5,347  54,114   3,602  871   3,757
Net interest income after provision for credit losses 58,941  7,598   60,329  62,365   59,377
Non-interest income:         
Deposit fees 1,929  2,458   2,710  2,710   2,680
Loan fees 513  550   567  719   398
Loan level derivative income, net 1,440  2,156   2,494  2,251   1,772
Gain (loss) on investment securities, net 586  1,330   133  (116)  357
Gain on sales of loans and leases held-for-sale 299  120   309  550   561
Other 1,468  2,714   1,543  1,815   1,710
Total non-interest income 6,235  9,328   7,756  7,929   7,478
Non-interest expense:         
Compensation and employee benefits 24,619  25,219   23,987  24,871   23,953
Occupancy 3,825  3,953   4,102  3,895   3,752
Equipment and data processing 4,155  4,703   4,601  4,749   4,641
Professional services 1,056  1,651   1,120  1,083   1,087
FDIC insurance 858  378   53  54   745
Advertising and marketing 1,017  1,075   828  1,035   1,112
Amortization of identified intangible assets 311  336   420  421   420
Merger and restructuring expense        1,125   
Other 3,268  3,433   3,704  2,958   3,894
Total non-interest expense 39,109  40,748   38,815  40,191   39,604
Income (loss) before provision for income taxes 26,067  (23,822)  29,270  30,103   27,251
Provision (benefit) for income taxes 6,496  (6,546)  7,087  7,507   6,780
Net income (loss) attributable to Brookline Bancorp, Inc.$19,571 $(17,276) $22,183 $22,596  $20,471
Earnings per common share:         
Basic$0.25 $(0.22) $0.28 $0.28  $0.26
Diluted$0.25 $(0.22) $0.28 $0.28  $0.26
Weighted average common shares outstanding during the period:        
Basic 78,849,282  79,481,462   79,682,724  79,700,403   79,669,922
Diluted 79,015,274  79,665,774   79,845,447  79,883,510   79,886,292
Dividends paid per common share$0.115 $0.115  $0.115 $0.110  $0.110
          


BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Consolidated Statements of Income (Unaudited)
  
 Six Months Ended June 30,
 2020 2019
 (In Thousands Except Share Data)
Interest and dividend income:   
Loans and leases$156,975  $163,470
Debt securities 6,677   6,394
Marketable and restricted equity securities 1,686   1,788
Short-term investments 308   618
Total interest and dividend income 165,646   172,270
Interest expense:   
Deposits 29,018   33,660
Borrowed funds 10,628   12,477
Total interest expense 39,646   46,137
Net interest income 126,000   126,133
Provision for credit losses 59,461   5,110
Net interest income after provision for credit losses 66,539   121,023
Non-interest income:   
Deposit Fees 4,387   5,203
Loan Fees 1,063   811
Loan level derivative income, net 3,596   3,517
Gain on investment securities, net 1,916   491
Gain on sales of loans and leases held-for-sale 419   850
Other 4,182   3,236
Total non-interest income 15,563   14,108
Non-interest expense:   
Compensation and employee benefits 49,838   47,696
Occupancy 7,778   7,699
Equipment and data processing 8,858   9,302
Professional services 2,707   2,163
FDIC insurance 1,236   1,338
Advertising and marketing 2,092   2,181
Amortization of identified intangible assets 647   822
Other 6,701   7,274
Total non-interest expense 79,857   78,475
Income before provision for income taxes 2,245   56,656
(Benefit) provision for income taxes (50)  13,675
Net income before noncontrolling interest in subsidiary 2,295   42,981
Less net income attributable to noncontrolling interest in subsidiary    43
Net income attributable to Brookline Bancorp, Inc.$2,295  $42,938
Earnings per common share:   
Basic$0.03  $0.54
Diluted$0.03  $0.54
Weighted average common shares outstanding during the period:  
Basic 79,165,372   79,664,284
Diluted 79,340,524   79,859,572
Dividends paid per common share$0.230  $0.215
    


BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Asset Quality Analysis (Unaudited)
 At and for the Three Months Ended
 June 30, 2020 March 31, 2020 December 31, 2019 September 30, 2019 June 30, 2019
 (Dollars in Thousands)
NONPERFORMING ASSETS:         
Loans and leases accounted for on a nonaccrual basis:         
Commercial real estate mortgage$10,139  $10,937  $2,845  $2,910  $2,273 
Multi-family mortgage    85   84   87   94 
Total commercial real estate loans 10,139   11,022   2,929   2,997   2,367 
          
Commercial 12,427   12,991   4,909   3,139   6,349 
Equipment financing 13,100   10,356   9,822   12,817   9,931 
Condominium association 190   203   151   163   170 
Total commercial loans and leases 25,717   23,550   14,882   16,119   16,450 
          
Residential mortgage 4,157   3,446   753   1,605   1,642 
Home equity 1,278   1,059   896   904   835 
Other consumer 9   7   1   3   7 
Total consumer loans 5,444   4,512   1,650   2,512   2,484 
          
Total nonaccrual loans and leases 41,300   39,084   19,461   21,628   21,301 
          
Other real estate owned          201   957 
Other repossessed assets 1,454   2,038   2,631   1,931   1,009 
Total nonperforming assets$42,754  $41,122  $22,092  $23,760  $23,267 
          
Loans and leases past due greater than 90 days and still accruing$1,974  $1,045  $10,109  $11,885  $11,612 
          
Troubled debt restructurings on accrual 10,172   16,480   17,076   22,233   27,761 
Troubled debt restructurings on nonaccrual 5,972   5,819   6,104   5,763   8,431 
Total troubled debt restructurings$16,144  $22,299  $23,180  $27,996  $36,192 
          
Nonperforming loans and leases as a percentage of total loans and leases 0.56%  0.57%  0.29%  0.33%  0.33%
Nonperforming assets as a percentage of total assets 0.47%  0.49%  0.28%  0.30%  0.30%
          
PROVISION AND ALLOWANCE FOR LOAN AND LEASE LOSSES:      
Allowance for loan and lease losses at beginning of period$113,181  $61,082  $59,135  $58,635  $58,041 
CECL adjustment to retained earnings    6,632          
Charge-offs (1,803)  (2,539)  (1,894)  (1,190)  (3,412)
Recoveries 420   305   272   824   330 
Net charge-offs (1,383)  (2,234)  (1,622)  (366)  (3,082)
Provision for loan and lease losses excluding unfunded commitments * 7,755   47,701   3,569   866   3,676 
Allowance for loan and lease losses at end of period$119,553  $113,181  $61,082  $59,135  $58,635 
          
Allowance for loan and lease losses as a percentage of total loans and leases 1.61%  1.66%  0.91%  0.89%  0.90%
          
NET CHARGE-OFFS:         
Commercial real estate loans$(94) $  $  $  $ 
Commercial loans and leases 1,498   2,280   1,589   403   3,107 
Consumer loans (21)  (46)  33   (37)  (25)
Total net charge-offs$1,383  $2,234  $1,622  $366  $3,082 
          
Net loan and lease charge-offs as a percentage of average loans and leases (annualized) 0.08%  0.13%  0.10%  0.02%  0.19%
          

*provision for loan and lease losses does not include provision of $2.4 million and $6.4 million for credit losses on unfunded commitments during the three months ended June 30, 2020 and March 31, 2020, respectively.

BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Average Yields / Costs (Unaudited)
 Three Months Ended
 June 30, 2020 March 31, 2020 June 30, 2019
 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)$773,523 $3,719 1.92% $605,885 $3,024 2.00% $593,404 $3,210 2.16%
Marketable and restricted equity securities (2) 71,058  915 5.15%  58,881  786 5.33%  59,224  888 5.99%
Short-term investments 245,577  99 0.16%  84,309  209 0.99%  44,634  351 3.14%
Total investments 1,090,158  4,733 1.74%  749,075  4,019 2.15%  697,262  4,449 2.55%
Loans and Leases:                 
Commercial real estate loans (3) 3,761,667  36,829 3.87%  3,697,011  40,468 4.33%  3,447,136  41,363 4.75%
Commercial loans (3) 1,234,537  10,450 3.35%  783,309  8,328 4.21%  811,890  9,879 4.82%
Equipment financing (3) 1,069,192  18,973 7.10%  1,052,846  18,946 7.20%  1,005,376  18,291 7.28%
Residential mortgage loans (3) 814,431  8,068 3.96%  810,583  7,934 3.92%  774,533  8,186 4.23%
Other consumer loans (3) 411,326  3,153 3.07%  417,815  3,955 3.79%  417,600  5,187 4.97%
Total loans and leases 7,291,153  77,473 4.25%  6,761,564  79,631 4.71%  6,456,535  82,906 5.14%
Total interest-earning assets 8,381,311  82,206 3.92%  7,510,639  83,650 4.46%  7,153,797  87,355 4.88%
Non-interest-earning assets 488,229      455,187      417,599    
Total assets$8,869,540     $7,965,826     $7,571,396    
                  
Liabilities and Stockholders' Equity:                 
Interest-bearing liabilities:                 
Deposits:                 
NOW accounts$395,158  114 0.12% $359,641  116 0.13% $343,745  50 0.06%
Savings accounts 663,782  357 0.22%  626,945  643 0.41%  602,333  737 0.49%
Money market accounts 1,784,343  2,074 0.47%  1,678,649  4,241 1.02%  1,683,735  5,571 1.33%
Certificates of deposit 2,019,195  10,233 2.04%  2,040,903  11,240 2.22%  1,950,704  11,354 2.33%
Total interest-bearing deposits 4,862,478  12,778 1.06%  4,706,138  16,240 1.39%  4,580,517  17,712 1.55%
Borrowings                 
Advances from the FHLBB 1,102,079  3,751 1.35%  772,462  4,097 2.10%  761,651  4,825 2.51%
Subordinated debentures and notes 83,647  1,263 6.04%  83,609  1,284 6.14%  83,490  1,305 6.25%
Other borrowed funds 70,795  44 0.25%  91,052  189 0.84%  84,600  208 0.99%
Total borrowings 1,256,521  5,058 1.59%  947,123  5,570 2.33%  929,741  6,338 2.70%
Total interest-bearing liabilities 6,118,999  17,836 1.17%  5,653,261  21,810 1.55%  5,510,258  24,050 1.75%
Non-interest-bearing liabilities:                 
Demand checking accounts 1,512,089      1,134,314      1,015,524    
Other non-interest-bearing liabilities 312,213      232,113      133,790    
Total liabilities 7,943,301      7,019,688      6,659,572    
Stockholders’ equity 926,239      946,138      911,824    
Noncontrolling interest in subsidiary                 
Total liabilities and equity$8,869,540     $7,965,826     $7,571,396    
Net interest income (tax-equivalent basis) /Interest-rate spread (4)   64,370 2.75%    61,840 2.91%    63,305 3.13%
Less adjustment of tax-exempt income   82      128      171  
Net interest income  $64,288     $61,712     $63,134  
Net interest margin (5)    3.09%     3.31%     3.55%
                  
(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, 2020 June 30, 2019
 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)$689,704 $6,743 1.96% $600,758 $6,499 2.16%
Marketable and restricted equity securities (2) 64,968  1,701 5.24%  59,803  1,808 6.05%
Short-term investments 164,943  308 0.37%  38,866  618 3.18%
Total investments 919,615  8,752 1.90%  699,427  8,925 2.55%
Loans and Leases:           
Commercial real estate loans (3) 3,729,339  77,297 4.10%  3,412,051  81,382 4.74%
Commercial loans (3) 1,008,923  18,778 3.68%  802,346  19,482 4.83%
Equipment financing (3) 1,061,019  37,919 7.15%  996,832  36,276 7.28%
Residential mortgage loans (3) 812,507  16,002 3.94%  776,419  16,309 4.20%
Other consumer loans (3) 414,570  7,108 3.43%  412,914  10,238 4.99%
Total loans and leases 7,026,358  157,104 4.47%  6,400,562  163,687 5.11%
Total interest-earning assets 7,945,973  165,856 4.17%  7,099,989  172,612 4.86%
Non-interest-earning assets 471,710      403,107    
Total assets$8,417,683     $7,503,096    
            
Liabilities and Stockholders' Equity:           
Interest-bearing liabilities:           
Deposits:           
NOW accounts$377,399  230 0.12% $338,983  192 0.11%
Savings accounts 645,363  1,000 0.31%  614,307  1,334 0.44%
Money market accounts 1,731,496  6,315 0.73%  1,679,988  10,846 1.30%
Certificates of deposit 2,030,049  21,473 2.13%  1,897,901  21,288 2.26%
Total interest-bearing deposits 4,784,307  29,018 1.22%  4,531,179  33,660 1.50%
Borrowings           
Advances from the FHLBB 937,271  7,848 1.66%  758,613  9,435 2.47%
Subordinated debentures and notes 83,628  2,547 6.09%  83,471  2,613 6.26%
Other borrowed funds 80,924  233 0.58%  86,589  429 1.00%
Total borrowings 1,101,823  10,628 1.91%  928,673  12,477 2.67%
Total interest-bearing liabilities 5,886,130  39,646 1.35%  5,459,852  46,137 1.70%
Non-interest-bearing liabilities:           
Demand checking accounts 1,323,202      1,021,215    
Other non-interest-bearing liabilities 272,162      122,544    
Total liabilities 7,481,494      6,603,611    
Brookline Bancorp, Inc. stockholders’ equity 936,189      899,301    
Noncontrolling interest in subsidiary       184    
Total liabilities and equity$8,417,683     $7,503,096    
Net interest income (tax-equivalent basis) /Interest-rate spread (4)   126,210 2.82%    126,475 3.16%
Less adjustment of tax-exempt income   210      342  
Net interest income  $126,000     $126,133  
Net interest margin (5)    3.19%     3.59%
            
(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,
    2020   2019   2020   2019 
Reconciliation Table - Non-GAAP Financial Information (Dollars in Thousands Except Share Data)
         
Net income attributable to Brookline Bancorp, Inc. $19,571  $20,471  $2,295  $42,938 
Less:         
Security gains (after-tax)  440   268   1,958   373 
Operating earnings  $19,131  $20,203  $337  $42,565 
          
Operating earnings per common share:         
Basic  $0.24  $0.25  $  $0.53 
Diluted   0.24   0.25      0.53 
          
Weighted average common shares outstanding during the period:        
Basic   78,849,282   79,669,922   79,165,372   79,664,284 
Diluted   79,015,274   79,886,292   79,340,524   79,859,572 
          
          
Return on average assets *  0.88%  1.08%  0.05%  1.14%
Less:         
Security gains (after-tax) *  0.02%  0.01%  0.04%  0.01%
Operating return on average assets *  0.86%  1.07%  0.01%  1.13%
          
          
Return on average tangible assets *  0.90%  1.11%  0.06%  1.17%
Less:         
Security gains (after-tax) *  0.02%  0.02%  0.05%  0.01%
Operating return on average tangible assets *  0.88%  1.09%  0.01%  1.16%
          
          
Return on average stockholders' equity *  8.45%  8.98%  0.49%  9.55%
Less:         
Security gains (after-tax) *  0.19%  0.12%  0.42%  0.08%
Operating return on average stockholders' equity *  8.26%  8.86%  0.07%  9.47%
          
          
Return on average tangible stockholders' equity *  10.28%  10.98%  0.59%  11.71%
Less:         
Security gains (after-tax) *  0.24%  0.15%  0.50%  0.10%
Operating return on average tangible stockholders' equity *  10.04%  10.83%  0.09%  11.61%
          
* Ratios at and for the three and six months ended are annualized.        
          
 At and for the Three Months Ended
 June 30, 2020 March 31, 2020 December 31, 2019 September 30, 2019 June 30, 2019
 (Dollars in Thousands)
          
Net income (loss), as reported$19,571  $(17,276) $22,183  $22,596  $20,471 
          
Average total assets$8,869,540  $7,965,826  $7,860,593  $7,746,492  $7,571,396 
Less: Average goodwill and average identified intangible assets, net 164,385   164,701   165,071   165,493   165,914 
Average tangible assets$8,705,155  $7,801,125  $7,695,522  $7,580,999  $7,405,482 
          
Return on average tangible assets (annualized) 0.90 %  (0.89)%  1.15 %  1.19 %  1.11 %
          
Average total stockholders’ equity$926,239  $946,138  $941,891  $928,063  $911,824 
Less: Average goodwill and average identified intangible assets, net 164,385   164,701   165,071   165,493   165,914 
Average tangible stockholders’ equity$761,854  $781,437  $776,820  $762,570  $745,910 
          
Return on average tangible stockholders’ equity (annualized) 10.28 %  (8.84)%  11.42 %  11.85 %  10.98 %
          
Brookline Bancorp, Inc. stockholders’ equity$926,413  $912,568  $945,606  $932,311  $918,468 
Less:         
Goodwill 160,427   160,427   160,427   160,427   160,427 
Identified intangible assets, net 3,775   4,087   4,423   4,843   5,264 
Tangible stockholders' equity$762,211  $748,054  $780,756  $767,041  $752,777 
          
Total assets$9,069,667  $8,461,591  $7,856,853  $7,878,436  $7,636,980 
Less:         
Goodwill 160,427   160,427   160,427   160,427   160,427 
Identified intangible assets, net 3,775   4,087   4,423   4,843   5,264 
Tangible assets$8,905,465  $8,297,077  $7,692,003  $7,713,166  $7,471,289 
          
Tangible stockholders’ equity to tangible assets 8.56 %  9.02 %  10.15 %  9.94 %  10.08 %
          
Tangible stockholders' equity$762,211  $748,054  $780,756  $767,041  $752,777 
          
Number of common shares issued 85,177,172   85,177,172   85,177,172   85,177,172   85,177,172 
Less:         
Treasury shares 5,859,708   5,862,811   5,003,127   5,003,127   5,025,764 
Unallocated ESOP shares 65,334   72,441   79,548   92,337   98,208 
Unvested restricted shares 398,188   395,085   406,450   407,784   377,122 
Number of common shares outstanding 78,853,942   78,846,835   79,688,047   79,673,924   79,676,078 
          
Tangible book value per common share$ 9.67  $ 9.49  $ 9.80  $ 9.63  $ 9.45 
          
Allowance for loan and lease losses$119,553  $113,181  $61,082  $59,135  $58,635 
          
Total loans and leases$7,407,697  $6,822,527  $6,737,816  $6,646,821  $6,505,329 
Less:         
Total PPP loans 565,768             
Total loans and leases excluding PPP loans$6,841,929  $6,822,527  $6,737,816  $6,646,821  $6,505,329 
          
Allowance for loan and lease losses as a percentage of total loans and leases less PPP loans 1.75 %  1.66 %  0.91 %  0.89 %  0.90 %
          

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