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Brookline Bancorp Announces Third Quarter Net Income Of $11.4 Million, EPS Of $0.16

BASIS OF PRESENTATION

The Company's consolidated financial statements have been prepared in conformity with GAAP as set forth by the FASB 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 net earnings from operations, tangible book value per common share and tangible stockholders’ equity to tangible assets. 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 sector. A detailed reconciliation table of the Company's GAAP to the non-GAAP measures is attached.

                   
BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Selected Financial Highlights (Unaudited)
 

As of and for the Three Months Ended September 30,

 

As of and for the Nine Months Ended September 30,

2012 2011 2012 2011
(In Thousands Except Per Share Data)
 
Earnings Data:
Net interest income $ 46,411 $ 27,948 $ 132,805 $ 81,686
Provision for credit losses 2,862 891 12,787 2,789
Non-interest income 3,785 928 12,101 3,572
Non-interest expense 30,436 17,009 91,507 46,405
Income before income taxes 16,898 10,976 40,612 36,064
Net income attributable to Brookline Bancorp, Inc. 11,401 6,275 25,279 20,543
 
Performance Ratios:
Net interest margin (1) 4.00 % 3.74 % 3.88 % 3.75 %
Interest rate spread (1) 3.83 % 3.48 % 3.70 % 3.48 %
Return on average assets 0.90 % 0.80 % 0.68 % 0.91 %
Return on average stockholders' equity 7.53 % 5.00 % 5.63 % 5.48 %
 
Per Common Share Data:
Net income — Basic $ 0.16 $ 0.11 $ 0.36 $ 0.35
Net income — Diluted 0.16 0.11 0.36 0.35
Cash dividends declared 0.085 0.085 0.255 0.255
Book value per share (end of period) 8.61 8.48 8.61 8.48
Tangible book value per share (end of period) 6.32 7.60 6.32 7.60
Stock price (end of period) 8.82 7.71 8.82 7.71
 
(1) Calculated on a fully tax-equivalent basis.
 
 
At or for the Three Months Ended
Sep 30, 2012   Jun 30, 2012 Mar 31, 2012   Dec 31, 2011 Sep 30, 2011
(Dollars in Thousands)
Balance Sheet:
Total assets $ 5,061,444 $ 4,972,381 $ 4,877,124 $ 3,299,013 $ 3,157,498
Total loans and leases 4,146,315

 

4,013,129 3,935,518

 

2,720,821

 

2,662,076
Total deposits 3,568,016 3,521,206 3,459,333 2,252,331 2,179,605
Brookline Bancorp, Inc. stockholders’ equity 605,962 598,865 597,531 503,602 501,890
 
Asset Quality:
Nonperforming assets $ 23,675 $ 23,831 $ 14,648 $ 8,796 $ 10,486
Nonperforming assets as a percentage of total assets 0.47 % 0.48 % 0.30 % 0.27 % 0.33 %
Allowance for loan and lease losses $ 38,913 $ 37,431 $ 34,428 $ 31,703 $ 31,128
Allowance for loan and lease losses as a percentage
of total loans and leases 0.94 % 0.93 % 0.87 % 1.17 % 1.17 %
Net loan and lease charge-offs $ 1,539 $ 3,675 $ 522 $ 267 $ 610
Net loan and lease charge-offs as a percentage
of average loans and leases (annualized) 0.15 % 0.37 % 0.05 % 0.04 % 0.09 %
 
Capital Ratios:
Stockholders’ equity to total assets 11.97 % 12.04 % 12.25 % 15.27 % 15.90 %
Tangible stockholders’ equity to tangible assets 9.08 % 9.07 % 9.18 % 13.93 % 14.49 %

                   
BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Consolidated Balance Sheets (Unaudited)
 
September 30, June 30, March 31, December 31, September 30,
2012 2012 2012 2011 2011
(In Thousands Except Share Data)
ASSETS
Cash and due from banks $ 41,617 $ 118,411 $ 88,884 $ 56,513 $ 22,919
Short-term investments   34,655     98,677     44,382     49,783     82,962  
Total cash and cash equivalents   76,272     217,088     133,266     106,296     105,881  
Investment securities available-for-sale 466,822 384,533 461,498 217,431 253,510
Restricted equity securities 68,661 61,291 53,554 39,283 39,283
Other securities   500     500     500     -     -  
Total securities   535,983     446,324     515,552     256,714     292,793  
Loans and leases:
Commercial real estate loans:
Commercial real estate mortgage 1,262,411

1,221,202

1,200,412

748,736 716,338
Multi-family mortgage 628,162 612,213 596,285 481,459 481,066
Construction   86,345     88,759     77,487     40,798     34,158  
Total commercial real estate   1,976,918    

1,922,174

   

1,874,184

    1,270,993     1,231,562  
Commercial loans and leases:
Commercial 346,744

319,867

309,338

150,895 156,402
Equipment financing 426,597 387,093 367,206 246,118 232,483
Condominium association   43,732     43,596     45,872     46,953     43,862  
Total commercial loans and leases   817,073    

750,556

   

722,416

    443,966     432,747  
Indirect automobile   574,279     581,063     578,622     573,350     571,705  
Consumer loans:
Residential mortgage 507,856 493,074 490,812 350,213 346,983
Home equity 263,194 260,623 262,591 76,527 73,831
Other consumer   6,995     5,639     6,893     5,772     5,248  
Total consumer loans   778,045     759,336     760,296     432,512     426,062  
Total loans and leases 4,146,315 4,013,129 3,935,518 2,720,821 2,662,076
Allowance for loan and lease losses   (38,913 )   (37,431 )   (34,428 )   (31,703 )   (31,128 )
Net loans and leases   4,107,402     3,975,698     3,901,090     2,689,118     2,630,948  
Premises and equipment, net 66,814

 

56,248 48,908 38,495 35,859
Building held-for-sale 6,046 6,046 6,046 - -
Deferred tax asset 27,354 25,656 24,647 12,681 11,840
Goodwill, net 137,890

 

137,890 138,914 45,799 46,203
Identified intangible assets, net of accumulated amortization 23,307 24,578 25,849 5,214 5,591
Other real estate owned and repossessed assets, net 2,386 2,765 2,647 1,266 2,949
Monies in escrow – Bancorp Rhode Island, Inc. acquisition - - - 112,983 -
Other assets   77,990     80,088     80,205     30,447     25,434  
Total assets $ 5,061,444   $ 4,972,381   $ 4,877,124   $ 3,299,013   $ 3,157,498  
 
LIABILITIES AND EQUITY
Deposits:
Demand checking accounts $ 590,189 $ 546,036 $ 529,945 $ 225,284 $ 214,219
NOW accounts 183,478 185,234 181,299 110,220 116,206
Savings accounts 520,614 503,507 511,736 164,744 165,356
Money market accounts 1,231,206 1,236,967 1,174,805 946,411 875,877
Certificate of deposit accounts   1,042,529     1,049,462     1,061,548     805,672     807,947  
Total deposits   3,568,016     3,521,206     3,459,333     2,252,331     2,179,605  
Borrowed funds:
Advances from the FHLBB 771,110 733,394 698,671 498,570 437,974
Other borrowed funds   57,146     60,707     59,865     8,349     6,947  
Total borrowed funds   828,256     794,101     758,536     506,919     444,921  
Mortgagors’ escrow accounts 7,066 6,942 7,156 6,513 6,943
Accrued expenses and other liabilities   47,889     47,328     50,883     26,248     21,042  
Total liabilities   4,451,227     4,369,577     4,275,908     2,792,011     2,652,511  
 
Equity:
Brookline Bancorp, Inc. stockholders’ equity:
Preferred stock, $0.01 par value; 50,000,000 shares
authorized; none issued - - - - -
Common stock, $0.01 par value; 200,000,000 shares authorized;
75,749,819 shares, 75,414,713 shares, 75,585,504 shares,
64,597,180 shares and 64,580,180 shares issued, respectively 754 754 754 644 644
Additional paid-in capital 618,176 618,184 618,031 525,171 525,012
Retained earnings, partially restricted 47,451 42,006 40,398 39,993 37,926
Accumulated other comprehensive income 3,569 1,969 2,457 1,963 2,540
Treasury stock, at cost; 5,373,733 shares (62,107 ) (62,107 ) (62,107 ) (62,107 ) (62,107 )
Unallocated common stock held by ESOP; 344,991 shares,
356,064 shares, 367,137 shares, 378,215 shares
and 401,316 shares, respectively   (1,881 )   (1,941 )   (2,002 )   (2,062 )   (2,125 )
Total Brookline Bancorp, Inc. stockholders’ equity   605,962     598,865     597,531     503,602     501,890  
Noncontrolling interest in subsidiary   4,255     3,939     3,685     3,400     3,097  
Total equity   610,217     602,804     601,216     507,002     504,987  
Total liabilities and equity $ 5,061,444   $ 4,972,381   $ 4,877,124   $ 3,299,013   $ 3,157,498  

                   
BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Consolidated Statements of Income (Unaudited)
 
Three Months Ended Sept. 30, Nine Months Ended Sept. 30,
2012 2011 2012 2011
(In Thousands Except Share Data)
Interest and dividend income:
Loans and leases $ 53,271 $ 34,028 $ 153,049 $ 99,438
Debt securities 1,949 1,487 6,719 4,998
Short-term investments 71 27 166 77
Marketable and restricted equity securities   103     48     291     141  
Total interest and dividend income   55,394     35,590     160,225     104,654  
 
Interest expense:
Deposits 5,375 4,971 16,355 15,003
Borrowed funds and subordinated debt   3,608     2,671     11,065     7,965  
Total interest expense   8,983     7,642     27,420     22,968  
 
Net interest income 46,411 27,948 132,805 81,686
Provision for credit losses   2,862     891     12,787     2,789  
Net interest income after provision for credit losses   43,549     27,057     120,018     78,897  
 
Non-interest income:
Fees, charges and other income 3,858 1,428 11,759 3,992
Loss from investments in affordable housing projects (73 ) (500 ) (455 ) (500 )
Gain on sales of securities, net   -     -     797     80  
Total non-interest income   3,785     928     12,101     3,572  
 
Non-interest expense:
Compensation and employee benefits 14,664 8,091 43,125 22,295
Occupancy 2,673 1,637 7,852 4,510
Equipment and data processing 4,072 2,362 11,288 6,727
Professional services 1,932 1,406 10,939 4,055
FDIC insurance 973 478 3,123 1,236
Advertising and marketing 689 482 2,166 1,392
Amortization of identified intangible assets 1,271 443 3,886 1,193
Other   4,162     2,110     9,128    

4,786

 
Total non-interest expense   30,436     17,009     91,507    

46,194

 
 
Income before income taxes 16,898 10,976 40,612

36,275

Provision for income taxes   5,176     4,394     14,473    

14,816

 
Net income 11,722 6,582 26,139 21,459
Less net income attributable to noncontrolling
interest in subsidiary   321     307     860     916  
Net income attributable to Brookline Bancorp, Inc. $ 11,401   $ 6,275   $ 25,279   $ 20,543  
 
Earnings per common share:
Basic $ 0.16 $ 0.11 $ 0.36 $ 0.35
Diluted 0.16 0.11 0.36 0.35
 
Weighted average common shares outstanding during the period:
Basic 69,716,283 58,640,775 69,682,741 58,627,311
Diluted 69,754,473 58,640,973 69,718,072 58,630,124
 
Dividends declared per common share $ 0.085 $ 0.085 $ 0.255 $ 0.255

                   
BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Asset Quality Analysis (Unaudited)
 
At or for the Three Months Ended
Sep 30, 2012   Jun 30, 2012   Mar 31, 2012   Dec 31, 2011   Sep 30, 2011
(Dollars in Thousands)
NONPERFORMING ASSETS:
 
Nonaccrual loans and leases:
Commercial real estate mortgage $ 2,078 $ 2,120 $ - $ - $ -
Multi-family mortgage 2,758 3,129 2,634 1,380 1,373
Construction   -     -     -     -     -  
Total commercial real estate loans 4,836 5,249 2,634 1,380 1,373
 
Commercial 5,432 6,896 2,146 - -
Equipment financing 3,040 2,375 1,226 1,925 1,892
Condominium association   9     11     13     15     17  
Total commercial loans and leases 8,481 9,282 3,385 1,940 1,909
 
Indirect automobile loans 80 91 27 111 59
 
Residential mortgage 2,298 3,088 2,999 1,327 1,330
Home equity 988 784 299 98 98
Other consumer   49     5     10     10     11  
Total consumer loans 3,335 3,877 3,308 1,435 1,439
 
Acquired from First Ipswich Bank   4,557     2,567     2,647     2,664     2,757  
Total nonaccrual loans and leases 21,289 21,066 12,001 7,530 7,537
 
Other real estate owned 1,690 2,082 2,207 845 2,262
Other repossessed assets   696     683     440     421     687  
 
Total nonperforming assets $ 23,675   $ 23,831   $ 14,648   $ 8,796   $ 10,486  
 
Restructured loans and leases not included in nonperforming assets $ 6,588   $ 6,443   $ 6,692   $ 5,205   $ 3,456  
 
 
 
Nonperforming loans and leases as a percentage of total loans and leases 0.51 % 0.52 % 0.30 % 0.28 % 0.28 %
Nonperforming assets as a percentage of total assets 0.47 % 0.48 % 0.30 % 0.27 % 0.33 %
 
 
PROVISION AND ALLOWANCE FOR LOAN AND LEASE LOSSES:
 
Allowance for loan and lease losses at beginning of period $ 37,431 $ 34,428 $ 31,703 $ 31,128 $ 30,847
Charge-offs (1,807 ) (3,970 ) (788 ) (533 ) (792 )
Recoveries   268     295     266     266     182  
Net charge-offs (1,539 ) (3,675 ) (522 ) (267 ) (610 )
Provision for loan and lease losses   3,021     6,678     3,247     842     891  
Allowance for loan and lease losses at end of period $ 38,913   $ 37,431   $ 34,428   $ 31,703   $ 31,128  
 
 
Allowance for loan and lease losses as a percentage of total loans and leases 0.94 % 0.93 % 0.87 % 1.17 % 1.17 %
 
 
NET CHARGE-OFFS:
 
Commercial real estate loans $ (38 ) $ (40 ) $ (40 ) $ - $ 30
Commercial loans and leases 1,179

3,292

263 (18 ) 132
Indirect automobile loans 301 225 292 278 448
Consumer loans   97    

198

    7     7     -  
Total net charge-offs $ 1,539   $ 3,675   $ 522   $ 267   $ 610  
 
Net loan and lease charge-offs as a percentage of
average loans and leases (annualized) 0.15 % 0.37 % 0.05 % 0.04 % 0.09 %

                                   
BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Average Yields / Costs (Unaudited)
 
Three Months Ended
September 30, 2012 June 30, 2012 September 30, 2011

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:
Short-term investments $ 103,614 $ 71 0.27 % $ 71,675 $ 68 0.38 % $ 88,459 $ 27 0.12 %
Investment securities available-for-sale (2) 418,513 1,967 1.88 % 430,206 1,548 1.44 % 262,085 1,494 2.28 %
Restricted equity securities (2) 56,047 98 0.70 % 54,583 110 0.81 % 40,137 56 0.56 %
Commercial real estate loans (3) 1,944,222 23,648 4.89 %

1,915,314

24,391

4.95

% 1,192,771 15,570 5.24 %
Commercial loans (3) 378,822 6,869 7.23 %

337,330

3,687

5.60

% 191,256 2,330 4.85 %
Equipment financing (3) 406,423 7,816 7.69 % 367,550 7,670 8.08 % 223,089 4,578 8.21 %
Indirect automobile loans (3) 577,119 5,852 4.03 % 580,678 6,033 4.18 % 581,778 6,996 4.77 %
Residential mortgage loans (3) 506,701 5,686 4.49 % 489,688 5,445 4.45 % 346,564 3,815 4.40 %
Other consumer loans (3)   269,915     3,544 5.22 %   266,572     3,003 4.53 %   77,869     793 4.05 %
Total interest-earning assets 4,661,376   55,551 4.77 % 4,513,596  

51,955

4.62 % 3,004,008   35,659 4.75 %
Allowance for loan and lease losses (40,510 ) (35,962 ) (31,152 )
Non-interest-earning assets   424,892     427,299     149,467  
Total assets $ 5,045,758   $ 4,904,933   $ 3,122,323  
 
Liabilities and Stockholders' Equity:
Interest-bearing liabilities:
Deposits:
NOW accounts $ 181,891 $ 51 0.11 % $ 189,118 $ 57 0.12 % $ 135,303 $ 59 0.17 %
Savings accounts 517,068 410 0.32 % 505,601 443 0.35 % 165,697 250 0.60 %
Money market accounts 1,239,230 2,246 0.72 % 1,204,754 2,260 0.75 % 858,451 1,971 0.91 %
Certificates of deposit   1,049,390     2,668 1.01 %   1,056,021     2,703 1.03 %   813,246     2,691 1.31 %
Total interest-bearing deposits (4) 2,987,579 5,375 0.72 % 2,955,494 5,463 0.74 % 1,972,697 4,971 1.00 %
Advances from the FHLBB 757,017 3,408 1.79 % 694,746 3,424 1.98 % 425,177 2,661 2.48 %
Other borrowed funds   57,753     200 1.38 %   60,550     193 1.28 %   5,718     11 0.74 %
Total interest-bearing liabilities 3,802,349   8,983 0.94 % 3,710,790   9,080 0.98 % 2,403,592   7,643 1.26 %
Non-interest-bearing demand
checking accounts (4) 572,305 542,100 188,501
Other liabilities   59,429     50,327     25,164  
Total liabilities 4,434,083 4,303,217 2,617,257
Brookline Bancorp, Inc. stockholders’ equity 605,988 597,908 502,252
Noncontrolling interest in subsidiary   5,687     3,808     2,814  
Total liabilities and equity $ 5,045,758   $ 4,904,933   $ 3,122,323  
Net interest income (tax-equivalent basis) /
Interest rate spread (5) 46,568 3.83 % 42,875 3.63 % 28,016 3.48 %
Less adjustment of tax-exempt income   157   116   70
Net interest income $ 46,411 $ 42,759 $ 27,946
Net interest margin (6) 4.00 % 3.81 % 3.74 %
 
 

 

 

(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.

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