Brookline Bancorp Announces Third Quarter Results

Net Income of $18.7 million, EPS of $0.24

Announces $0.115 Dividend per Share

Resumes Stock Buyback Program

BOSTON, Oct. 28, 2020 (GLOBE NEWSWIRE) -- Brookline Bancorp, Inc. (NASDAQ: BRKL) (the “Company”) today announced net income of $18.7 million, or $0.24 per basic and diluted share, for the third quarter of 2020, compared to $19.6 million, or $0.25 per basic and diluted share, for the second quarter of 2020, and $22.6 million, or $0.28 per basic and diluted share, for the third quarter of 2019.

Paul Perrault, President and Chief Executive Officer of the Company noted, “As we look toward the close of 2020, we are thankful for the resilience of our employees in diligently meeting the needs of our customers throughout this unprecedented year. Today we are pleased to report another solid quarter of earnings and growth which are rooted in the strength of our core business areas. While we continue to monitor the situation with COVID-19, the business lines that are fundamental to our success continue to operate effectively during these challenging times."

BALANCE SHEET

Total assets at September 30, 2020 decreased $69.5 million to $9.0 billion from $9.1 billion at June 30, 2020, and increased $1.1 billion from $7.9 billion at September 30, 2019. At September 30, 2020, total loans and leases were $7.4 billion, representing a decrease of $11.3 million from June 30, 2020, and an increase of $749.5 million from September 30, 2019, primarily driven by loans originated under the Small Business Administration's Paycheck Protection Program ("PPP"). The Company has funded 2,922 PPP loans totaling $581.7 million as of August 8, 2020 when the program closed, of which $568.4 million remains outstanding, net of deferred fees and costs at September 30, 2020.

Total investment securities at September 30, 2020 decreased $72.1 million to $784.4 million, as compared to $856.5 million at June 30, 2020, and increased approximately $217.3 million from $567.1 million at September 30, 2019. Total cash and cash equivalents at September 30, 2020 increased $62.4 million to $317.3 million, as compared to $254.9 million at June 30, 2020, and increased $138.8 million from $178.5 million at September 30, 2019. As of September 30, 2020, total investment securities and total cash and cash equivalents represented 12.2 percent of total assets as compared to 12.3 percent and 9.5 percent as of June 30, 2020 and September 30, 2019, respectively.

Total deposits at September 30, 2020 increased $352.3 million to $6.8 billion from $6.4 billion at June 30, 2020 and increased $1.1 billion from $5.7 billion at September 30, 2019.

Total borrowed funds at September 30, 2020 decreased $401.6 million to $1.0 billion from $1.4 billion at June 30, 2020 and increased $18.6 million from $986.4 million at September 30, 2019.

The ratio of stockholders’ equity to total assets was 10.39 percent at September 30, 2020, as compared to 10.21 percent at June 30, 2020, and 11.83 percent at September 30, 2019. The ratio of tangible stockholders’ equity to tangible assets (non-GAAP) was 8.73 percent at September 30, 2020, as compared to 8.56 percent at June 30, 2020, and 9.94 percent at September 30, 2019. Tangible book value per share (non-GAAP) increased $0.10 from $9.67 at June 30, 2020 to $9.77 at September 30, 2020, compared to $9.63 at September 30, 2019.

On December 4, 2019, the Board of Directors approved a stock repurchase program authorizing management to repurchase up to $10.0 million of the Company’s common stock over a period of twelve months commencing on January 1, 2020 and ending on December 31, 2020. On March 9, 2020, the Board of Directors approved an increase in the repurchase amount of $10.0 million bringing the total authorized amount to $20.0 million. Subsequently, as previously disclosed, the Company suspended the stock repurchase program effective as of March 24, 2020. As of September 30, 2020, the Company has repurchased 848,319 shares at a weighted average price of $12.27. In 2019, 136,065 shares of the Company's common stock were repurchased by the Company.

NET INTEREST INCOME

Net interest income increased $1.6 million to $65.9 million during the third quarter of 2020 from $64.3 million at the quarter ended June 30, 2020. The net interest margin decreased 1 basis point to 3.08 percent for the three months ended September 30, 2020.

NON-INTEREST INCOME

Total non-interest income for the quarter ended September 30, 2020 decreased $1.3 million to $4.9 million from $6.2 million for the quarter ended June 30, 2020. The decrease was primarily driven by decreases of $0.9 million in loan level derivative income, net, $0.5 million in gain on investment securities, net and $0.5 million in other non-interest income, partially offset by increases of $0.3 million in deposit fees and $0.3 million in gain on sales of loans and leases.

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 $4.5 million for the quarter ended September 30, 2020, compared to $5.3 million for the quarter ended June 30, 2020.

Total net charge-offs for the third quarter of 2020 were $5.0 million compared to $1.4 million in the second quarter of 2020. The increase in net charge-offs in the quarter was driven by the charge-off of $4.3 million on a commercial taxi medallion relationship which had a $3.2 million specific reserve previously established. The ratio of net loan and lease charge-offs to average loans and leases on an annualized basis increased to 27 basis points for the third quarter of 2020 from 8 basis points for the second quarter of 2020.

While economic conditions and forecasts have generally improved from Q2, there remains significant uncertainty and volatility related to the COVID-19 pandemic and its impact on businesses and households as we enter the fall and winter seasons.

The allowance for loan and lease losses represented 1.62 percent of total loans and leases at September 30, 2020, compared to 1.61 percent at June 30, 2020, and 0.89 percent at September 30, 2019. Excluding PPP loans, the allowance for loan and lease losses represents 1.76 percent coverage at September 30, 2020 compared to 1.75 percent at June 30, 2020.

ASSET QUALITY

The ratio of nonperforming loans and leases to total loans and leases was 0.51 percent at September 30, 2020, a decrease from 0.56 percent at June 30, 2020. Total nonaccrual loans and leases decreased $3.3 million to $38.0 million at September 30, 2020 from $41.3 million at June 30, 2020. The ratio of nonperforming assets to total assets was 0.44 percent at September 30, 2020, a decrease from 0.47 percent at June 30, 2020. Total nonperforming assets decreased $3.4 million to $39.4 million at September 30, 2020 from $42.8 million at June 30, 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 September 30, 2020, approximately 77 percent of loans granted an initial loan payment deferral have returned to payment status and 910 credits totaling $280 million or 3.8 percent of total loans outstanding have been modified.

NON-INTEREST EXPENSE

Non-interest expense for the quarter ended September 30, 2020 increased $1.8 million to $40.9 million from $39.1 million for the quarter ended June 30, 2020. The increase was primarily driven by increases of $1.5 million in compensation and employee benefits expense due to lower deferred loan origination costs, $0.5 million in FDIC insurance expense and $0.1 million in equipment and data processing expense, partially offset by a decrease of $0.3 million in other expense.

PROVISION FOR INCOME TAXES

The effective tax rate was 26.2 percent and 23.9 percent for the three and nine months ended September 30, 2020 compared to 24.9 percent for the three months ended June 30, 2020 and 24.9 percent and 24.4 percent for the three and nine months ended September 30, 2019.

RETURNS ON AVERAGE ASSETS AND AVERAGE EQUITY

The annualized return on average assets decreased to 0.83 percent during the third quarter 2020 from 0.88 percent for the second quarter of 2020.

The annualized return on average stockholders' equity decreased to 7.99 percent during the third quarter of 2020 from 8.45 percent for the second quarter of 2020. The annualized return on average tangible stockholders’ equity decreased to 9.70 percent for the third quarter of 2020 from 10.28 percent for the second quarter of 2020.

DIVIDEND DECLARED

The Company’s Board of Directors approved a dividend of $0.115 per share for the quarter ended September 30, 2020. The dividend will be paid on November 27, 2020 to stockholders of record on November 13, 2020.

STOCK REPURCHASE

As previously disclosed, the Company suspended its stock repurchase program effective as of March 24, 2020 with $9.6 million remaining in the Board authorized program. On October 28, 2020, the Company’s Board of Directors approved resumption of the stock repurchase program to be completed by December 31, 2020.

CONFERENCE CALL

The Company will conduct a conference call/webcast at 1:30 PM Eastern Daylight Time on Thursday, October 29, 2020 to discuss the results for the quarter, business highlights and outlook. A copy of the Earnings Presentation is available on the Company’s website, www.brooklinebancorp.com. To listen to the call and view the Company’s Earnings Presentation, please join the call via https://services.choruscall.com/links/brkl201029.html. To listen to the call without access to the slides, please dial 877-504-4120 (United States) or 412-902-6650 (international) and ask for the Brookline Bancorp, Inc. call. A recording of the call will be available for one week following the call on the Company’s website under “Investor Relations” or by dialing 877-344-7529 (United States) or 412-317-0088 (internationally) and entering the passcode: 10148701.

ABOUT BROOKLINE BANCORP, INC.

Brookline Bancorp, Inc., a bank holding company with $9.0 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; 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
 September 30,
2020
June 30,
2020
 March 31,
2020
December 31,
2019
September 30,
2019
 (Dollars In Thousands Except per Share Data)
Earnings Data:      
Net interest income$65,938 $64,288  $61,712 $63,931 $63,236 
Provision for credit losses 4,528  5,347   54,114  3,602  871 
Non-interest income 4,862  6,235   9,328  7,756  7,929 
Non-interest expense 40,947  39,109   40,748  38,815  40,191 
Income (loss) before provision for income taxes 25,325  26,067   (23,822) 29,270  30,103 
Net income (loss) attributable to Brookline Bancorp, Inc. 18,679  19,571   (17,276) 22,183  22,596 
       
Performance Ratios:      
Net interest margin (1) 3.08% 3.09%  3.31% 3.43% 3.45%
Interest-rate spread (1) 2.85% 2.75%  2.91% 3.05% 3.06%
Return on average assets (annualized) 0.83% 0.88%  (0.87)% 1.13% 1.17%
Return on average tangible assets (annualized) (non-GAAP) 0.84% 0.90%  (0.89)% 1.15% 1.19%
Return on average stockholders' equity (annualized) 7.99% 8.45%  (7.30)% 9.42% 9.74%
Return on average tangible stockholders' equity (annualized) (non-GAAP) 9.70% 10.28%  (8.84)% 11.42% 11.85%
Efficiency ratio (2) 57.83% 55.46%  57.36% 54.15% 56.48%
       
Per Common Share Data:      
Net income (loss) — Basic$0.24 $0.25  $(0.22)$0.28 $0.28 
Net income (loss) — Diluted 0.24  0.25   (0.22) 0.28  0.28 
Cash dividends declared 0.115  0.115   0.115  0.115  0.115 
Book value per share (end of period) 11.84  11.75   11.57  11.87  11.70 
Tangible book value per share (end of period) (non-GAAP) 9.77  9.67   9.49  9.80  9.63 
Stock price (end of period) 8.65  10.08   11.28  16.46  14.73 
       
Balance Sheet:      
Total assets$9,000,192 $9,069,667  $8,461,591 $7,856,853 $7,878,436 
Total loans and leases 7,396,358  7,407,697   6,822,527  6,737,816  6,646,821 
Total deposits 6,792,523  6,440,233   5,889,938  5,830,072  5,729,339 
Brookline Bancorp, Inc. stockholders’ equity 935,558  926,413   912,568  945,606  932,311 
       
Asset Quality:      
Nonperforming assets$39,365 $42,754  $41,122 $22,092 $23,760 
Nonperforming assets as a percentage of total assets 0.44% 0.47%  0.49% 0.28% 0.30%
Allowance for loan and lease losses$119,971 $119,553  $113,181 $61,082 $59,135 
Allowance for loan and lease losses as a percentage of total loans and leases 1.62% 1.61%  1.66% 0.91% 0.89%
Net loan and lease charge-offs$4,963 $1,383  $2,234 $1,622 $366 
Net loan and lease charge-offs as a percentage of average loans and leases (annualized) 0.27% 0.08%  0.13% 0.10% 0.02%
       
Capital Ratios:      
Stockholders’ equity to total assets 10.39% 10.21%  10.78% 12.04% 11.83%
Tangible stockholders’ equity to tangible assets (non-GAAP) 8.73% 8.56%  9.02% 10.15% 9.94%
       
(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)
 September 30, 2020June 30, 2020 March 31, 2020 December 31, 2019September 30, 2019
ASSETS(In Thousands Except Share Data)
Cash and due from banks$33,818 $38,522  $86,996  $33,589 $93,841 
Short-term investments 283,515  216,394   253,772   44,201  84,689 
Total cash and cash equivalents 317,333  254,916   340,768   77,790  178,530 
Investment securities available-for-sale 783,867  854,505   761,539   498,995  467,339 
Investment securities held-to-maturity -  -   -   86,780  95,163 
Equity securities held-for-trading 525  1,992   2,558   3,581  4,581 
Total investment securities 784,392  856,497   764,097   589,356  567,083 
Loans and leases held-for-sale -  -   -   -  - 
Loans and leases:       
Commercial real estate loans 3,835,372  3,837,703   3,762,158   3,669,222  3,589,451 
Commercial loans and leases 2,354,613  2,361,463   1,826,866   1,838,748  1,850,388 
Consumer loans 1,206,373  1,208,531   1,233,503   1,229,846  1,206,982 
Total loans and leases 7,396,358  7,407,697   6,822,527   6,737,816  6,646,821 
Allowance for loan and lease losses (119,971) (119,553)  (113,181)  (61,082) (59,135)
Net loans and leases 7,276,387  7,288,144   6,709,346   6,676,734  6,587,686 
Restricted equity securities 61,715  71,638   68,472   53,818  57,896 
Premises and equipment, net of accumulated depreciation 72,441  73,127   73,786   74,350  75,229 
Right-of-use asset operating leases 23,492  24,343   24,789   24,876  26,216 
Deferred tax asset 42,269  42,683   38,141   25,017  25,204 
Goodwill 160,427  160,427   160,427   160,427  160,427 
Identified intangible assets, net of accumulated amortization 3,464  3,775   4,087   4,423  4,843 
Other real estate owned and repossessed assets 1,413  1,454   2,038   2,631  2,132 
Other assets 256,859  292,663   275,640   167,431  193,190 
Total assets$9,000,192 $9,069,667  $8,461,591  $7,856,853 $7,878,436 
LIABILITIES AND STOCKHOLDERS' EQUITY       
Deposits:       
Demand checking accounts$1,550,267 $1,603,037  $1,175,329  $1,141,578 $1,106,684 
NOW accounts 459,902  417,622   361,854   371,380  340,321 
Savings accounts 716,630  657,758   653,026   613,467  604,481 
Money market accounts 1,878,258  1,809,868   1,676,092   1,682,005  1,666,231 
Certificate of deposit accounts 1,492,913  1,601,768   1,669,509   1,671,738  1,673,382 
Brokered deposit accounts 694,553  350,180   354,128   349,904  338,240 
Total deposits 6,792,523  6,440,233   5,889,938   5,830,072  5,729,339 
Borrowed funds:       
Advances from the FHLBB 841,169  1,267,570   1,137,431   758,469  854,481 
Subordinated debentures and notes 83,707  83,668   83,630   83,591  83,551 
Other borrowed funds 80,169  55,431   70,743   60,689  48,373 
Total borrowed funds 1,005,045  1,406,669   1,291,804   902,749  986,405 
Operating lease liabilities 23,492  24,343   24,789   24,876  26,216 
Mortgagors’ escrow accounts 6,429  6,467   7,441   7,232  7,072 
Reserve for unfunded credits 13,964  14,816   17,222   1,880  1,847 
Accrued expenses and other liabilities 223,181  250,726   317,829   144,438  195,246 
Total liabilities 8,064,634  8,143,254   7,549,023   6,911,247  6,946,125 
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 736,294  738,155   737,422   736,601  735,928 
Retained earnings, partially restricted 247,336  237,808   227,359   265,376  252,435 
Accumulated other comprehensive income 18,782  19,538   16,947   2,283  2,775 
Treasury stock, at cost;       
5,629,854, 5,859,708, 5,862,811, 5,003,127, and 5,003,127 shares, respectively (67,376) (69,572)  (69,617)  (59,073) (59,176)
Unallocated common stock held by the Employee Stock Ownership Plan;       
58,227, 65,334, 72,441, 79,548, and 92,337 shares, respectively (330) (368)  (395)  (433) (503)
Total stockholders' equity 935,558  926,413   912,568   945,606  932,311 
Total liabilities and stockholders' equity$9,000,192 $9,069,667  $8,461,591  $7,856,853 $7,878,436 
                  



BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Consolidated Statements of Income (Unaudited)
 Three Months Ended
 September 30, 2020 June 30, 2020March 31, 2020December 31, 2019September 30, 2019
 (In Thousands Except Share Data)
Interest and dividend income:      
Loans and leases$76,240 $77,416$79,559 $83,309$83,566 
Debt securities 3,746  3,701 2,976  2,910 2,977 
Marketable and restricted equity securities 672  908 778  813 876 
Short-term investments 46  99 209  418 487 
Total interest and dividend income 80,704  82,124 83,522  87,450 87,906 
Interest expense:      
Deposits 10,583  12,778 16,240  17,655 18,300 
Borrowed funds 4,183  5,058 5,570  5,864 6,370 
Total interest expense 14,766  17,836 21,810  23,519 24,670 
Net interest income 65,938  64,288 61,712  63,931 63,236 
Provision for credit losses 4,528  5,347 54,114  3,602 871 
Net interest income after provision for credit losses 61,410  58,941 7,598  60,329 62,365 
Non-interest income:      
Deposit fees 2,305  1,929 2,458  2,710 2,710 
Loan fees 397  513 550  567 719 
Loan level derivative income, net 527  1,440 2,156  2,494 2,251 
Gain (loss) on investment securities, net 54  586 1,330  133 (116)
Gain on sales of loans and leases held-for-sale 632  299 120  309 550 
Other 947  1,468 2,714  1,543 1,815 
Total non-interest income 4,862  6,235 9,328  7,756 7,929 
Non-interest expense:      
Compensation and employee benefits 26,092  24,619 25,219  23,987 24,871 
Occupancy 3,802  3,825 3,953  4,102 3,895 
Equipment and data processing 4,293  4,155 4,703  4,601 4,749 
Professional services 1,112  1,056 1,651  1,120 1,083 
FDIC insurance 1,363  858 378  53 54 
Advertising and marketing 1,024  1,017 1,075  828 1,035 
Amortization of identified intangible assets 312  311 336  420 421 
Merger and restructuring expense -  - -  - 1,125 
Other 2,949  3,268 3,433  3,704 2,958 
Total non-interest expense 40,947  39,109 40,748  38,815 40,191 
Income (loss) before provision for income taxes 25,325  26,067 (23,822) 29,270 30,103 
Provision (benefit) for income taxes 6,646  6,496 (6,546) 7,087 7,507 
Net income (loss) attributable to Brookline Bancorp, Inc.$18,679 $19,571$(17,276)$22,183$22,596 
Earnings per common share:      
Basic$0.24 $0.25$(0.22)$0.28$0.28 
Diluted$0.24 $0.25$(0.22)$0.28$0.28 
Weighted average common shares outstanding during the period:     
Basic 78,948,139  78,849,282 79,481,462  79,682,724 79,700,403 
Diluted 79,055,901  79,015,274 79,665,774  79,845,447 79,883,510 
Dividends paid per common share$0.115 $0.115$0.115 $0.115$0.110 
       



BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Consolidated Statements of Income (Unaudited)
  
 Nine Months Ended September 30,
 20202019
 (In Thousands Except Share Data)
Interest and dividend income:  
Loans and leases$233,215$247,036
Debt securities 10,423 9,371
Marketable and restricted equity securities 2,358 2,664
Short-term investments 354 1,105
Total interest and dividend income 246,350 260,176
Interest expense:  
Deposits 39,601 51,960
Borrowed funds 14,811 18,847
Total interest expense 54,412 70,807
Net interest income 191,938 189,369
Provision for credit losses 63,989 5,981
Net interest income after provision for credit losses 127,949 183,388
Non-interest income:  
Deposit Fees 6,692 7,913
Loan Fees 1,460 1,530
Loan level derivative income, net 4,123 5,768
Gain on investment securities, net 1,970 375
Gain on sales of loans and leases held-for-sale 1,051 1,400
Other 5,129 5,051
Total non-interest income 20,425 22,037
Non-interest expense:  
Compensation and employee benefits 75,931 72,567
Occupancy 11,580 11,594
Equipment and data processing 13,152 14,051
Professional services 3,819 3,246
FDIC insurance 2,599 1,392
Advertising and marketing 3,116 3,216
Amortization of identified intangible assets 959 1,243
Merger and restructuring expense - 1,125
Other 9,650 10,232
Total non-interest expense 120,806 118,666
Income before provision for income taxes 27,568 86,759
Provision for income taxes 6,596 21,182
Net income before noncontrolling interest in subsidiary 20,972 65,577
Less net income attributable to noncontrolling interest in subsidiary - 43
Net income attributable to Brookline Bancorp, Inc.$20,972$65,534
Earnings per common share:  
Basic$0.27$0.82
Diluted$0.27$0.82
Weighted average common shares outstanding during the period: 
Basic 79,092,424 79,676,456
Diluted 79,245,113 79,867,683
Dividends paid per common share$0.345$0.325
   


BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Asset Quality Analysis (Unaudited)
 At and for the Three Months Ended
 September 30, 2020June 30, 2020March 31, 2020December 31, 2019September 30, 2019
 (Dollars in Thousands)
NONPERFORMING ASSETS:     
Loans and leases accounted for on a nonaccrual basis:     
Commercial real estate mortgage$10,841 $10,139 $10,937 $2,845 $2,910 
Multi-family mortgage -  -  85  84  87 
Total commercial real estate loans 10,841  10,139  11,022  2,929  2,997 
      
Commercial 7,751  12,427  12,991  4,909  3,139 
Equipment financing 13,372  13,100  10,356  9,822  12,817 
Condominium association 117  190  203  151  163 
Total commercial loans and leases 21,240  25,717  23,550  14,882  16,119 
      
Residential mortgage 4,634  4,157  3,446  753  1,605 
Home equity 1,235  1,278  1,059  896  904 
Other consumer 2  9  7  1  3 
Total consumer loans 5,871  5,444  4,512  1,650  2,512 
      
Total nonaccrual loans and leases 37,952  41,300  39,084  19,461  21,628 
      
Other real estate owned -  -  -  -  201 
Other repossessed assets 1,413  1,454  2,038  2,631  1,931 
Total nonperforming assets$39,365 $42,754 $41,122 $22,092 $23,760 
      
Loans and leases past due greater than 90 days and still accruing$1,180 $1,974 $1,045 $10,109 $11,885 
      
Troubled debt restructurings on accrual 11,309  10,172  16,480  17,076  22,233 
Troubled debt restructurings on nonaccrual 5,742  5,972  5,819  6,104  5,763 
Total troubled debt restructurings$17,051 $16,144 $22,299 $23,180 $27,996 
      
Nonperforming loans and leases as a percentage of total loans and leases 0.51% 0.56% 0.57% 0.29% 0.33%
Nonperforming assets as a percentage of total assets 0.44% 0.47% 0.49% 0.28% 0.30%
      
PROVISION AND ALLOWANCE FOR LOAN AND LEASE LOSSES:   
Allowance for loan and lease losses at beginning of period$119,553 $113,181 $61,082 $59,135 $58,635 
CECL adjustment to retained earnings -  -  6,632  -  - 
Charge-offs (5,511) (1,803) (2,539) (1,894) (1,190)
Recoveries 548  420  305  272  824 
Net charge-offs (4,963) (1,383) (2,234) (1,622) (366)
Provision for loan and lease losses excluding unfunded commitments * 5,381  7,755  47,701  3,569  866 
Allowance for loan and lease losses at end of period$119,971 $119,553 $113,181 $61,082 $59,135 
      
Allowance for loan and lease losses as a percentage of total loans and leases 1.62% 1.61% 1.66% 0.91% 0.89%
      
NET CHARGE-OFFS:     
Commercial real estate loans$70 $(94)$- $- $- 
Commercial loans and leases 4,917  1,498  2,280  1,589  403 
Consumer loans (24) (21) (46) 33  (37)
Total net charge-offs$4,963 $1,383 $2,234 $1,622 $366 
      
Net loan and lease charge-offs as a percentage of average loans and leases (annualized) 0.27% 0.08% 0.13% 0.10% 0.02%
      
*provision for loan and lease losses does not include (credit) provision of $(0.9) million, $2.4 million and $6.4 million for credit losses on unfunded commitments during the three months ended September 30, 2020, June 30, 2020 and March 31, 2020, respectively.
 


BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Average Yields / Costs (Unaudited)
 Three Months Ended
 September 30, 2020June 30, 2020September 30, 2019
 Average BalanceInterest (1)Average Yield/ CostAverage BalanceInterest (1)Average Yield/ CostAverage BalanceInterest (1)Average Yield/ Cost
 (Dollars in Thousands)
Assets:         
Interest-earning assets:         
Investments:         
Debt securities (2)$851,608$3,7461.76%$773,523$3,7191.92%$573,389$3,0272.11%
Marketable and restricted equity securities (2) 66,154 6704.06% 71,058 9155.15% 59,638 8855.94%
Short-term investments 192,446 460.10% 245,577 990.16% 70,707 4872.76%
Total investments 1,110,208 4,4621.61% 1,090,158 4,7331.74% 703,734 4,3992.50%
Loans and Leases:         
Commercial real estate loans (3) 3,831,826 35,6153.64% 3,761,667 36,8293.87% 3,539,485 41,7244.61%
Commercial loans (3) 1,281,202 10,6773.27% 1,234,537 10,4503.35% 838,092 10,2914.81%
Equipment financing (3) 1,089,058 19,0186.99% 1,069,192 18,9737.10% 1,019,179 18,5197.27%
Residential mortgage loans (3) 814,559 7,8603.86% 814,431 8,0683.96% 776,482 8,2154.23%
Other consumer loans (3) 395,990 3,1273.13% 411,326 3,1533.07% 415,082 4,9174.69%
Total loans and leases 7,412,635 76,2974.12% 7,291,153 77,4734.25% 6,588,320 83,6665.08%
Total interest-earning assets 8,522,843 80,7593.79% 8,381,311 82,2063.92% 7,292,054 88,0654.83%
Non-interest-earning assets 495,829   488,229   454,438  
Total assets$9,018,672  $8,869,540  $7,746,492  
          
Liabilities and Stockholders' Equity:         
Interest-bearing liabilities:         
Deposits:         
NOW accounts$427,009 1280.12%$395,158 1140.12%$335,091 1290.15%
Savings accounts 688,223 2580.15% 663,782 3570.22% 600,609 8200.54%
Money market accounts 1,855,803 1,6580.36% 1,784,343 2,0740.47% 1,683,548 5,4131.28%
Certificates of deposit 1,536,969 7,0221.82% 1,637,486 8,3642.05% 1,658,650 9,6912.32%
Brokered deposit accounts 562,112 1,5171.07% 381,709 1,8691.97% 342,291 2,2472.60%
Total interest-bearing deposits 5,070,116 10,5830.83% 4,862,478 12,7781.06% 4,620,189 18,3001.57%
Borrowings         
Advances from the FHLBB 944,865 2,8761.19% 1,102,079 3,7511.35% 759,738 4,8592.50%
Subordinated debentures and notes 83,687 1,2465.96% 83,647 1,2636.04% 83,530 1,3006.22%
Other borrowed funds 118,969 610.21% 70,795 440.25% 79,620 2111.05%
Total borrowings 1,147,521 4,1831.43% 1,256,521 5,0581.59% 922,888 6,3702.70%
Total interest-bearing liabilities 6,217,637 14,7660.94% 6,118,999 17,8361.17% 5,543,077 24,6701.77%
Non-interest-bearing liabilities:         
Demand checking accounts 1,569,411   1,512,089   1,096,788  
Other non-interest-bearing liabilities 296,992   312,213   178,564  
Total liabilities 8,084,040   7,943,301   6,818,429  
Stockholders’ equity 934,632   926,239   928,063  
Total liabilities and equity$9,018,672  $8,869,540  $7,746,492  
Net interest income (tax-equivalent basis) /Interest-rate spread (4)  65,9932.85%  64,3702.75%  63,3953.06%
Less adjustment of tax-exempt income  55   82   159 
Net interest income $65,938  $64,288  $63,236 
Net interest margin (5)  3.08%  3.09%  3.45%
          
(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, 2020September 30, 2019
 Average BalanceInterest (1)Average Yield/ CostAverage BalanceInterest (1)Average Yield/ Cost
 (Dollars in Thousands)
Assets:      
Interest-earning assets:      
Investments:      
Debt securities (2)$744,065$10,4891.88%$591,535$9,5262.15%
Marketable and restricted equity securities (2) 65,367 2,3714.84% 59,747 2,6936.01%
Short-term investments 174,177 3540.27% 49,833 1,1052.96%
Total investments 983,609 13,2141.79% 701,115 13,3242.53%
Loans and Leases:      
Commercial real estate loans (3) 3,763,750 112,9123.94% 3,454,996 123,1064.70%
Commercial loans (3) 1,100,346 29,4553.52% 814,392 29,7734.82%
Equipment financing (3) 1,070,433 56,9377.09% 1,004,363 54,7957.27%
Residential mortgage loans (3) 813,196 23,8623.91% 776,440 24,5244.21%
Other consumer loans (3) 408,332 10,2353.33% 413,645 15,1554.89%
Total loans and leases 7,156,057 233,4014.35% 6,463,836 247,3535.10%
Total interest-earning assets 8,139,666 246,6154.04% 7,164,951 260,6774.85%
Non-interest-earning assets 479,809   420,287  
Total assets$8,619,475  $7,585,238  
       
Liabilities and Stockholders' Equity:      
Interest-bearing liabilities:      
Deposits:      
NOW accounts$394,057 3580.12%$337,671 3210.13%
Savings accounts 659,754 1,2580.25% 609,284 2,1540.47%
Money market accounts 1,773,234 7,9730.60% 1,681,594 16,2591.29%
Certificates of deposit 1,618,818 24,6372.03% 1,587,646 26,6012.24%
Brokered deposit accounts 434,409 5,3751.65% 344,979 6,6252.57%
Total interest-bearing deposits 4,880,272 39,6011.08% 4,561,174 51,9601.52%
Borrowings      
Advances from the FHLBB 939,821 10,7241.50% 758,992 14,2942.48%
Subordinated debentures and notes 83,648 3,7936.05% 83,491 3,9136.25%
Other borrowed funds 93,698 2940.42% 84,477 6401.01%
Total borrowings 1,117,167 14,8111.74% 926,960 18,8472.68%
Total interest-bearing liabilities 5,997,439 54,4121.21% 5,488,134 70,8071.72%
Non-interest-bearing liabilities:      
Demand checking accounts 1,405,871   1,046,683  
Other non-interest-bearing liabilities 280,499   141,305  
Total liabilities 7,683,809   6,676,122  
Brookline Bancorp, Inc. stockholders’ equity 935,666   908,994  
Noncontrolling interest in subsidiary -   122  
Total liabilities and equity$8,619,475  $7,585,238  
Net interest income (tax-equivalent basis) /Interest-rate spread (4)  192,2032.83%  189,8703.13%
Less adjustment of tax-exempt income  265   501 
Net interest income $191,938  $189,369 
Net interest margin (5)  3.15%  3.54%
       
(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)
   Three Months Ended September 30,Nine Months Ended September 30,
   2020201920202019
Reconciliation Table - Non-GAAP Financial Information (Dollars in Thousands Except Share Data)
      
Net income attributable to Brookline Bancorp, Inc. $18,679 $22,596 $20,972 $65,534 
Less:      
Security gains (losses) (after-tax)  40  (87) 1,499  284 
Add:      
Merger and restructuring-related expenses (after-tax)  -  845  -  851 
Operating earnings  $18,639 $23,528 $19,473 $66,101 
       
Operating earnings per common share:      
Basic  $0.24 $0.30 $0.25 $0.83 
Diluted   0.24  0.29  0.25  0.83 
       
Weighted average common shares outstanding during the period:     
Basic   78,948,139  79,700,403  79,092,424  79,676,456 
Diluted   79,055,901  79,883,510  79,245,113  79,867,683 
       
       
Return on average assets *  0.83% 1.17% 0.32% 1.15%
Less:      
Security gains (losses) (after-tax) *  -% -% 0.02% -%
Add:      
Merger and restructuring-related expenses (after-tax) *  -% 0.04% -% 0.01%
Operating return on average assets *  0.83% 1.21% 0.30% 1.16%
       
       
Return on average tangible assets *  0.84% 1.19% 0.33% 1.18%
Less:      
Security gains (losses) (after-tax) *  -% -% 0.02% 0.01%
Add:      
Merger and restructuring-related expenses (after-tax) *  -% 0.05% -% 0.02%
Operating return on average tangible assets *  0.84% 1.24% 0.31% 1.19%
       
       
Return on average stockholders' equity *  7.99% 9.74% 2.99% 9.61%
Less:      
Security gains (losses) (after-tax) *  0.01% (0.04)% 0.22% 0.04%
Add:      
Merger and restructuring-related expenses (after-tax) *  -% 0.36% -% 0.13%
Operating return on average stockholders' equity *  7.98% 10.14% 2.77% 9.70%
       
       
Return on average tangible stockholders' equity *  9.70% 11.85% 3.63% 11.76%
Less:      
Security gains (losses) (after-tax) *  0.02% (0.05)% 0.26% 0.05%
Add:      
Merger and restructuring-related expenses (after-tax) *  -% 0.44% -% 0.15%
Operating return on average tangible stockholders' equity *  9.68% 12.34% 3.37% 11.86%
       
* Ratios at and for the three and nine months ended are annualized.     
       
       
 At and for the Three Months Ended
 September 30,
2020
 June 30,
2020
March 31,
2020
December 31,
2019
September 30,
2019
 (Dollars in Thousands)
       
Net income (loss), as reported$18,679  $19,571 $(17,276)$22,183 $22,596 
       
Average total assets$9,018,672  $8,869,540 $7,965,826 $7,860,593 $7,746,492 
Less: Average goodwill and average identified intangible assets, net 164,072   164,385  164,701  165,071  165,493 
Average tangible assets$8,854,600  $8,705,155 $7,801,125 $7,695,522 $7,580,999 
       
Return on average tangible assets (annualized) 0.84 %  0.90 % (0.89)% 1.15 % 1.19 %
       
Average total stockholders’ equity$934,632  $926,239 $946,138 $941,891 $928,063 
Less: Average goodwill and average identified intangible assets, net 164,072   164,385  164,701  165,071  165,493 
Average tangible stockholders’ equity$770,560  $761,854 $781,437 $776,820 $762,570 
       
Return on average tangible stockholders’ equity (annualized) 9.70 %  10.28 % (8.84)% 11.42 % 11.85 %
       
Brookline Bancorp, Inc. stockholders’ equity$935,558  $926,413 $912,568 $945,606 $932,311 
Less:      
Goodwill 160,427   160,427  160,427  160,427  160,427 
Identified intangible assets, net 3,464   3,775  4,087  4,423  4,843 
Tangible stockholders' equity$771,667  $762,211 $748,054 $780,756 $767,041 
       
Total assets$9,000,192  $9,069,667 $8,461,591 $7,856,853 $7,878,436 
Less:      
Goodwill 160,427   160,427  160,427  160,427  160,427 
Identified intangible assets, net 3,464   3,775  4,087  4,423  4,843 
Tangible assets$8,836,301  $8,905,465 $8,297,077 $7,692,003 $7,713,166 
       
Tangible stockholders’ equity to tangible assets 8.73 %  8.56 % 9.02 % 10.15 % 9.94 %
       
Tangible stockholders' equity$771,667  $762,211 $748,054 $780,756 $767,041 
       
Number of common shares issued 85,177,172   85,177,172  85,177,172  85,177,172  85,177,172 
Less:      
Treasury shares 5,629,854   5,859,708  5,862,811  5,003,127  5,003,127 
Unallocated ESOP shares 58,227   65,334  72,441  79,548  92,337 
Unvested restricted shares 487,318   398,188  395,085  406,450  407,784 
Number of common shares outstanding 79,001,773   78,853,942  78,846,835  79,688,047  79,673,924 
       
Tangible book value per common share$ 9.77  $ 9.67 $ 9.49 $ 9.80 $ 9.63 
       
Allowance for loan and lease losses$119,971  $119,553 $113,181 $61,082 $59,135 
       
Total loans and leases$7,396,358  $7,407,697 $6,822,527 $6,737,816 $6,646,821 
Less:      
Total PPP loans 568,383   565,768  -  -  - 
Total loans and leases excluding PPP loans$6,827,975  $6,841,929 $6,822,527 $6,737,816 $6,646,821 
       
Allowance for loan and lease losses as a percentage of total loans and leases less PPP loans 1.76 %  1.75 % 1.66 % 0.91 % 0.89 %
       

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