Brookline Bancorp Announces Second Quarter Net Income Of $7.5 Million

Brookline Bancorp, Inc. (NASDAQ: BRKL) today reported net income of $7.5 million, or $0.11 fully diluted earnings per share (EPS), for the quarter ended June 30, 2012. Net income for the first half of 2012 was $13.9 million, or $0.20 fully diluted EPS, compared to $14.3 million, or $0.24 fully diluted EPS, for the first half of 2011.

Second quarter 2012 results included a $6.7 million provision for credit losses that reduced net income by approximately $0.06 per fully diluted share. $4.2 million of the provision was booked in connection with two short-term commercial loans made immediately after acquisition by the Company’s subsidiary, Bank Rhode Island. These loans were based, in part, on the issuance of tax credits which, due to the unexpected and abrupt bankruptcy filing of an entity in Rhode Island related to the borrowers, were not issued. The Company has moved aggressively to resolve the problem credits and is evaluating all potential sources of recovery; however, further recovery attempts will be complicated and subject to additional discussions with the relevant parties, including the State of Rhode Island.

Paul Perrault, President and Chief Executive Officer of Brookline Bancorp, Inc. stated: “The Company’s core strategy, the expertise of our banking officers and the strength of our customer service remain unchanged. As a result, we continue to report strong growth in loans and deposits despite the challenging economic environment in which we operate. We view the magnitude of this quarter’s unexpected development as an unusual event which we are working assertively to resolve. Business fundamentals remain strong. We continue to compete effectively against the many banks in our core markets, the first phase of our core systems conversion was a success, overall credit quality remains very strong, and the Company remains well-capitalized even after the provision recorded this quarter.”

BALANCE SHEET

Total assets at June 30, 2012 grew to $5.0 billion, an increase of 7.8 percent from the prior quarter and 59.6 percent from June 30, 2011.

The loan and lease portfolio grew to $4.0 billion as of June 30, 2012, up 7.9 percent from the prior quarter and 9.9 percent from December 31, 2011, after adjustment for the $1.2 billion in loans and leases acquired from Bancorp Rhode Island. The Company continued to benefit from strong growth in its commercial loan and lease portfolios, which reached $2.7 billion, or 66.6 percent of total loans, at June 30, 2012. The commercial portfolios increased 11.7 percent during the second quarter 2012 and 13.9 percent for the first six months of 2012, after adjustment for the $0.8 million in commercial loans and leases acquired from Bancorp Rhode Island.

Deposits of $3.5 billion at June 30, 2012, were up 7.2 percent from March 31, 2012 and 63.1 percent from June 30, 2011. Growth from June 30, 2011 includes the addition of $1.2 billion in deposits from the Bancorp Rhode Island acquisition. Core deposits increased 12.3 percent in the second quarter 2012 and now comprise 70.2 percent of total deposits at June 30, 2012. As a percentage of deposits, core deposits are up from 64.2 percent at December 31, 2011 and 61.9 percent at June 30, 2011, largely as a result of the deposits acquired in the Bancorp Rhode Island acquisition. The loans-to-deposit ratio decreased from 120.8 percent at December 31, 2011 to 114.0 percent at June 30, 2012.

Total cash and investment securities represented 13.3 percent of total assets at June 30, 2012. Securities available for sale of $384.5 million declined 16.7 percent from March 31, 2012 quarter-to-quarter, largely as a result of paydowns on mortgage-related investments.

Stockholders’ equity to total assets was 12.04 percent at June 30, 2012. The tangible common equity ratio was 9.07 percent at June 30, 2012, compared with 9.18 percent at March 31, 2012 and 14.66 percent at June 30, 2011.

NET INTEREST INCOME

Net interest income for the second quarter 2012 increased to $42.8 million from $27.8 million in the second quarter 2011 and decreased slightly as compared to $43.6 million in the first quarter 2012. Net interest income for the first half of 2012 increased to $86.4 million from $53.7 million in the first half of 2011.

Net interest margin for the second quarter 2012 was 3.81 percent and 3.85 percent for the six months ended June 30, 2012. The decrease of 6 basis points from the first quarter 2012 reflects management’s ongoing efforts to offset the impact of ongoing price competition with declines in the cost of funds.

NON-INTEREST INCOME

Non-interest income was $4.7 million for the second quarter 2012, up $1.1 million from the first quarter 2012. Fee income increased from $3.7 million in the first quarter 2012 to $4.2 million, or 11.6 percent, in the second quarter 2012. Non-interest income also includes $0.8 million of gains on sales of investment securities in the second quarter 2012 resulting from a partial restructuring of the investment portfolios. Non-interest income was $8.3 million for the first half of 2012, up $5.7 million from the first half of 2011. The growth in the first half of 2012 was primarily driven by $5.6 million of non-interest income attributable to Bancorp Rhode Island.

NON-INTEREST EXPENSE

Non-interest expense of $28.7 million in the second quarter 2012 decreased $3.9 million from the first quarter 2012 and increased $12.8 million from the second quarter 2011. The increase from second quarter 2011 to second quarter 2012 reflects the Company’s acquisition of Bancorp Rhode Island. Compensation expense decreased $0.5 million, or 12.3 percent from first quarter 2012. The $3.9 million decrease in professional services, from $6.5 million in the first quarter 2012 to $2.6 million in the second quarter 2012, reflects the decrease in $5.4 million of merger-related expenses included in the quarter ended March 31, 2012, offset by $1.5 million in professional services associated with infrastructure improvements and charter conversions.

ASSET QUALITY

Non-performing loans and leases totaled $21.1 million, or 0.52 percent of total loans and leases, at June 30, 2012, up from $12.0 million, or 0.30 percent of total loans and leases, at March 31, 2012. Non-performing assets at June 30, 2012 totaled $23.8 million or 0.48 percent of total assets, up from $14.6 million, or 0.30 percent of total assets, at March 31, 2012. These increases in non-performing loans included the two commercial loans discussed previously.

The provision for credit losses was $6.7 million for the second quarter 2012, which included $4.2 million related to the aforementioned problem credit, compared to $3.2 million in the first quarter 2012, and $1.2 million in the second quarter 2011. Net charge-offs for the second quarter 2012 were $3.7 million, or 0.37 percent of average loans and leases on an annualized basis, compared to $0.5 million, or 0.05 percent of average loans and leases, in the first quarter 2012, and $0.4 million, or 0.06 percent of average loans and leases for the second quarter 2011.

The allowance for loan and lease losses was $37.4 million at June 30, 2012, compared to $34.4 million at March 31, 2012 and $30.8 million at June 30, 2011. The allowance for loan and lease losses as a percent of total loans and leases was 0.93 percent at June 30, 2012, compared to 0.87 percent at March 31, 2012 and 1.19 percent at June 30, 2011.

DIVIDEND DECLARED

The Company’s Board of Directors approved a dividend of $0.085 per share. The dividend will be paid on August 24, 2012, to shareholders of record on August 10, 2012.

CHARTER CONVERSIONS

On June 29, 2012, two of the Company’s subsidiaries, Brookline Bank and First Ipswich Bank (formerly The First National Bank of Ipswich), converted to state-chartered financial institutions and became members of the Federal Reserve System. As a result, Brookline Bank is now a Massachusetts savings bank and First Ipswich Bank is now a Massachusetts trust company, both of which are now regulated by the Massachusetts Division of Banks and the Board of Governors of the Federal Reserve System.

CONFERENCE CALL

The Company will conduct a conference call/webcast at 11:00 a.m. eastern time on Thursday, July 26, 2012 to discuss the results for the quarter, business highlights and outlook. The call can be accessed by dialing 877-317-6789 (United States) or 412-317-6789 (internationally). A recorded playback of the call will be available for one week following the call at 877-344-7529 (United States) or 412-317-0088 (internationally). The passcode for playback is 10016211. The call will also be available live or in a recorded version on the Company’s website www.brooklinebank.com under “Investor Relations.”

ABOUT BROOKLINE BANCORP, INC.

Brookline Bancorp, Inc., a bank holding company with approximately $5.0 billion in assets and 44 branches throughout Massachusetts and Rhode Island, is headquartered in Brookline, Massachusetts and operates as the holding company for Brookline Bank, Bank Rhode Island, and First Ipswich Bank (formerly The First National Bank of Ipswich). The Company provides commercial and retail banking services, and cash management and investment services to customers throughout Central New England. More information about Brookline Bancorp, Inc. and its banks can be found at the following websites: www.brooklinebank.com, www.bankri.com, and www.fnbi.com.

FORWARD-LOOKING STATEMENTS

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

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)
                     

At or for the Three Months Ended June 30,

At or for the Six Months Ended June 30,
2012 2011 2012 2011
(In Thousands Except Per Share Data)
 
Financial Data:
Net interest income $ 42,759 $ 27,798 $ 86,392 $ 53,738
Provision for credit losses 6,678 839 9,925 1,898
Non-interest income 4,721 1,518 8,315 2,643
Non-interest expense 28,699 15,877 61,290 29,326
Income before income taxes 12,103 12,600 23,492 25,157
Net income attributable to Brookline Bancorp, Inc. 7,529 7,001 13,878 14,267
 
Selected Statistical Data:
Net interest margin (1) 3.81 % 3.74 % 3.85 % 3.75 %
Interest rate spread (1) 3.63 % 3.47 % 3.67 % 3.47 %
Return on average assets 0.61 % 0.91 % 0.57 % 0.96 %
Return on average stockholders' equity 5.04 % 5.62 % 4.64 % 5.73 %
 
Common Share Data:
Basic earnings per share $ 0.11 $ 0.12 $ 0.20 $ 0.24
Diluted earnings per share 0.11 0.12 0.20 0.24
Dividends paid per share 0.085 0.085 0.17 0.17
Book value per common share 8.55 8.48 8.55 8.48
Tangible book value per common share 6.23 7.60 6.23 7.60
Market value per common share at end of period 8.85 9.27 8.85 9.27
 
(1) Calculated on a fully-taxable equivalent basis.

 
 
At or for the Three Months Ended
Jun 30, 2012 Mar 31, 2012 Dec 31, 2011 Sep 30, 2011 Jun 30, 2011
(Dollars in Thousands)
Balance Sheet:
Total assets $ 4,972,381 $ 4,877,124 $ 3,299,013 $ 3,157,498 $ 3,114,582
Loans and leases, gross 4,013,129

 
3,935,518 2,720,821

 
2,662,076 2,588,923
Deposits 3,521,206 3,459,333 2,252,331 2,179,605 2,159,133
Brookline Bancorp, Inc. stockholders’ equity 598,865 597,531 503,602 501,890 501,077
 
Asset Quality:
Non-performing assets $ 23,831 $ 14,648 $ 8,796 $ 10,486 $ 11,774
Non-performing assets / total assets 0.48 % 0.30 % 0.27 % 0.33 % 0.38 %
Allowance for loan and lease losses $ 37,431 $ 34,428 $ 31,703 $ 31,128 $ 30,847
Allowance for loan and lease losses / total loans and leases 0.93 % 0.87 % 1.17 % 1.17 % 1.19 %
Net loan and lease charge-offs $ 3,675 $ 522 $ 267 $ 610 $ 371
Net loan and lease charge-offs to average loans and leases (annualized) 0.37 % 0.05 % 0.04 % 0.09 % 0.06 %
 
Capital Ratios:
Stockholders’ equity to total assets 12.04 % 12.25 % 15.27 % 15.90 % 16.09 %
Tangible stockholders’ equity to tangible assets 9.07 % 9.18 % 13.93 % 14.49 % 14.66 %
 
 

BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Consolidated Balance Sheets (Unaudited)
                 
June 30, March 31, December 31, June 30,
2012 2012 2011 2011
(In Thousands Except Share Data)
ASSETS
Cash and due from banks $ 118,411 $ 88,884 $ 56,513 $ 23,412
Short-term investments   98,677     44,382     49,783     93,861  
Total cash and cash equivalents   217,088     133,266     106,296     117,273  
Investment securities available for sale 384,533 461,498 217,431 274,960
Restricted equity securities 61,291 53,554 39,283 39,283
Other securities   500     500     -     -  
Total securities   446,324     515,552     256,714     314,243  
Loans and leases
Commercial real estate:
Commercial real estate mortgage 1,194,158 1,172,049 748,736 682,220
Multi-family mortgage 612,213 596,285 481,459 454,581
Construction   88,759     77,487     40,798     34,254  
Total commercial real estate   1,895,130     1,845,821     1,270,993     1,171,055  
Commercial loans and leases:
Commercial 365,283 360,095 150,895 144,546
Equipment financing 368,721 344,812 246,118 215,426
Condominium association   43,596     45,872     46,953     39,711  
Total commercial loans   777,600     750,779     443,966     399,683  
Indirect automobile   581,063     578,622     573,350     590,974  
Consumer loans:
Residential mortgage 493,074 490,812 350,213 348,771
Home equity 260,623 262,591 76,527 73,129
Other consumer   5,639     6,893     5,772     5,311  
Total consumer loans   759,336     760,296     432,512     427,211  
Allowance for loan and lease losses   (37,431 )   (34,428 )   (31,703 )   (30,847 )
Net loans and leases   3,975,698     3,901,090     2,689,118     2,558,076  
Premises and equipment, net 56,248

 
48,908 38,495 34,727
Building held for sale 6,046 6,046 - -
Deferred tax asset 25,656 24,647 12,681 12,541
Goodwill 137,890

 
138,914 45,799 45,966
Identified intangible assets 24,578 25,849 5,214 6,033
Other real estate owned and repossessed assets, net 2,765 2,647 1,266 3,869
Monies in escrow – Bancorp Rhode Island, Inc. acquisition - - 112,983 -
Other assets   80,088     80,205     30,447     21,854  
Total assets $ 4,972,381   $ 4,877,124   $ 3,299,013   $ 3,114,582  
 
LIABILITIES AND EQUITY
Deposits
Demand checking accounts $ 546,036 $ 529,945 $ 225,284 $ 184,480
NOW accounts 185,234 181,299 110,220 139,382
Savings accounts 503,507 511,736 164,744 164,884
Money market savings accounts 1,236,967 1,174,805 946,411 848,467
Certificate of deposit accounts   1,049,462     1,061,548     805,672     821,920  
Total deposits   3,521,206     3,459,333     2,252,331     2,159,133  
Overnight and short-term borrowings 733,394 698,671 498,570 421,355
Other borrowed funds 60,707 59,865 8,349 4,789
Mortgagors’ escrow accounts 6,942 7,156 6,513 6,847
Accrued expenses and other liabilities   47,328     50,883     26,248     18,742  
Total liabilities   4,369,577     4,275,908     2,792,011     2,610,866  
 
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;  75,414,713 shares, 75,585,504 shares, 64,597,180 shares and  64,447,889 shares issued, respectively
754 754 644 644
Additional paid-in capital 618,184 618,031 525,171 524,841
Retained earnings, partially restricted 42,006 40,398 39,993 36,633
Accumulated other comprehensive income 1,969 2,457 1,963 3,254
Treasury stock, at cost, 5,373,733 shares (62,107 ) (62,107 ) (62,107 ) (62,107 )

Unallocated common stock held by ESOP – 356,064 shares,   367,137 shares, 378,215 shares and 401,316 shares,   respectively
(1,941 ) (2,002 ) (2,062 ) (2,188 )
Total Brookline Bancorp, Inc. stockholders’ equity   598,865     597,531     503,602     501,077  
Noncontrolling interest in subsidiary   3,939     3,685     3,400     2,639  
Total equity   602,804     601,216     507,002     503,716  
Total liabilities and equity $ 4,972,381   $ 4,877,124   $ 3,299,013   $ 3,114,582  
 
 

BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Consolidated Statements of Income (Unaudited)
                 
Three Months Ended June 30, Six Months Ended June 30,
2012 2011 2012 2011
(In Thousands Except Share Data)
Interest income:
Loans and leases $ 50,135 $ 33,786 $ 99,778 $ 65,411
Debt securities 1,541 1,754 4,770 3,511
Short-term investments 68 26 95 50
Marketable and restricted equity securities   95     55   187     92
Total interest income   51,839     35,621   104,830     69,064
 
Interest expense:
Deposits (excluding brokered deposits) 5,463 5,138 10,980 10,033
Borrowed funds and subordinated debt   3,617     2,685   7,458     5,293
Total interest expense   9,080     7,823   18,438     15,326
 
Net interest income 42,759 27,798 86,392 53,738
Provision for credit losses   6,678     839   9,925     1,898
Net interest income after provision for credit losses   36,081     26,959   76,467     51,840
 
Non-interest income:
Fees, charges and other income 4,168 1,518 7,901 2,563
Loss from investments in affordable housing projects (244 ) - (383 ) -
Gain on sales of securities   797     -   797     80
Total non-interest income   4,721     1,518   8,315     2,643
 
Non-interest expense:
Compensation and employee benefits 14,238 7,795 28,926 14,606
Occupancy 2,503 1,499 5,179 2,873
Equipment and data processing 3,632 2,290 7,275 4,365
Professional services 2,554 1,458 9,008 2,247
FDIC insurance 671 324 1,301 757
Advertising and marketing 774 517 1,476 910
Amortization of identified intangible assets 1,271 455 2,554 750
Other   3,056     1,539   5,571     2,818
Total non-interest expense   28,699     15,877   61,290     29,326
 
Income before income taxes 12,103 12,600 23,492 25,157
Provision for income taxes   4,320     5,273   9,075     10,281
Net income 7,783 7,327 14,417 14,876
 
Less net income attributable to noncontrolling interest in subsidiary   254     326   539     609
Net income attributable to Brookline Bancorp, Inc. $ 7,529   $ 7,001 $ 13,878   $ 14,267
 
Earnings per common share:
Basic $ 0.11 $ 0.12 $ 0.20 $ 0.24
Diluted 0.11 0.12 0.20 0.24
 
Weighted average common shares outstanding during the period:
Basic 69,677,656 58,629,265 69,671,130 58,620,467
Diluted 69,715,890 58,630,908 69,706,694 58,624,699
 
Dividends declared per common share $ 0.085 $ 0.085 $ 0.17 $ 0.17
 
 

BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Asset Quality Analysis (Unaudited)
                     
Three Months Ended
Jun 30, 2012 Mar 31, 2012 Dec 31, 2011

 
Sep 30, 2011 Jun 30, 2011
(Dollars in Thousands)
NON-PERFORMING ASSETS:
 
Non-accrual loans:
Commercial real estate mortgage $ 2,120 $ - $ - $ - $ -
Multi-family mortgage 3,129 2,635 1,380 1,373 1,376
Construction   -     -     -     -     -  
Total commercial real estate 5,249 2,635 1,380 1,373 1,376
 
Commercial 6,896 2,146 - - -
Equipment financing 2,375 1,226 1,925 1,892 1,757
Condominium association   11     13     15     17     -  

Total commercial loans
9,282 3,385 1,940 1,909 1,757
 
Indirect automobile 91 26 111 59 117
 
Home equity 784 299 98 98 98
Residential mortgage 3,088 2,999 1,327 1,330 1,381
Other consumer   5     10     10     11     9  
Total consumer loans 3,877 3,308 1,435 1,439 1,488
 
Acquired loans   2,567     2,647     2,664     2,757     3,167  
Total non-accrual loans 21,066 12,001 7,530 7,537 7,905
 
Repossessed vehicles 487 403 389 558 461
Repossessed equipment 196 37 32 129 192
Other real estate owned 2,082 2,207 845 2,262 3,216
         
Total non-performing assets $ 23,831   $ 14,648   $ 8,796   $ 10,486   $ 11,774  
 
Restructured loans on accrual $ 6,443   $ 6,692   $ 5,205   $ 3,456   $ 4,905  
 
 
 
Non-performing loans and leases as a percentage of total loans and leases 0.52 % 0.30 % 0.28 % 0.28 % 0.31 %
Non-performing assets as a percentage of total assets 0.48 % 0.30 % 0.27 % 0.33 % 0.38 %
 
 
PROVISION AND ALLOWANCE FOR LOAN AND LEASE LOSSES:
 
Balance at beginning of period $ 34,428 $ 31,703 $ 31,128 $ 30,847 $ 30,048
Provision for credit losses 6,678 3,247 842 891 1,170
Charge-offs (3,970 ) (788 ) (533 ) (792 ) (606 )
Recoveries   295     266     266     182     235  
Net charge-offs   (3,675 )   (522 )   (267 )   (610 )   (371 )
Balance at end of period $ 37,431   $ 34,428   $ 31,703   $ 31,128   $ 30,847  
 
 
Allowance for loan and lease losses as a percent of total loans and leases 0.93 % 0.87 % 1.17 % 1.17 % 1.19 %
 
 
NET CHARGE-OFFS:
 
Commercial real estate $ (40 ) $ (40 ) $ - $ 30 $ -
Commercial 3,293 263 (18 ) 132 79
Auto 225 292 278 448 292
Consumer   197     7     7     -     -  
Total net charge-offs $ 3,675   $ 522   $ 267   $ 610   $ 371  
 
 
Net charge-offs to average loans and leases (annualized) 0.37 % 0.05 % 0.04 % 0.09 % 0.06 %
 
 

BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Average Yields / Costs
                                     
Three Months Ended
June 30, 2012 March 31, 2012 June 30, 2011

Average Balance

Interest (1)

Average Yield/Cost

Average Balance

Interest (1)

Average Yield/Cost

Average Balance

Interest (1)

Average Yield/Cost
 

Assets
Interest-earning assets:
Short-term investments $ 71,675 $ 68 0.38 % $ 50,810 $ 27 0.21 % $ 71,395 $ 26 0.15 %
Debt securities (2) 430,206 1,548 1.44 % 517,843 3,237 2.50 % 313,687 1,762 2.25 %
Equity securities (2) 54,583 110 0.81 % 55,943 108 0.78 % 40,015 64 0.64 %
Commercial real estate loans (3) 1,859,292 23,607 5.10 % 1,829,833 23,468 5.17 % 1,159,065 15,337 5.31 %
Commercial loans (3) 412,476 4,713 4.58 % 393,861 4,588 4.67 % 181,555 2,174 4.80 %
Equipment financing (3) 348,426 7,428 8.53 % 341,736 6,756 7.91 % 214,529 4,414 8.23 %
Indirect automobile loans (3) 580,678 6,033 4.18 % 574,926 6,247 4.37 % 587,351 7,277 4.97 %
Residential mortgage loans (3) 489,688 5,445 4.45 % 491,012 5,544 4.52 % 343,088 3,852 4.49 %
Other consumer loans (3)   266,572     3,003 4.53 %   273,561     3,040 4.47 %   78,759     789 4.02 %
Total interest-earning assets 4,513,596   51,955 4.62 % 4,529,525   53,015 4.70 % 2,989,444   35,695 4.79 %
Allowance for loan losses (35,962 ) (32,999 ) (30,074 )
Non-interest earning assets   427,299     364,369     134,125  
Total assets $ 4,904,933   $ 4,860,895   $ 3,093,495  
 

Liabilities and Stockholders' Equity

Interest-bearing liabilities:
Deposits:
NOW accounts 189,118 57 0.12 % 179,086 $ 53 0.12 % 137,732 60 0.18 %
Savings accounts 505,601 443 0.35 % 511,147 498 0.39 % 165,214 266 0.65 %
Money market savings accounts 1,204,754 2,260 0.75 % 1,143,545 2,152 0.76 % 822,691 1,972 0.96 %
Certificates of deposit   1,056,021     2,702 1.03 %   1,078,276     2,813 1.05 %   830,260     2,840 1.37 %
Total deposits (4) 2,955,494 5,462 0.74 % 2,912,054 5,516 0.76 % 1,955,897 5,138 1.05 %
Federal Home Loan Bank advances 694,746 3,424 1.98 % 723,831 3,671 2.04 % 421,908 2,623 2.49 %
Other borrowings   60,550     193 1.28 %   58,766     170 1.16 %   10,243     62 2.44 %
Total interest-bearing liabilities 3,710,790   9,079 0.98 % 3,694,651   9,357 1.02 % 2,388,048   7,823 1.31 %
Non-interest-bearing demandchecking accounts (4) 542,100 509,522 175,994
Other liabilities   50,327     55,182     27,371  
Total liabilities 4,303,217 4,259,355 2,591,413
Brookline Bancorp, Inc. stockholders’ equity 597,908 597,978 498,276
Noncontrolling interest in subsidiary   3,808     3,562     3,806  
Total liabilities and equity $ 4,904,933   $ 4,860,895   $ 3,093,495  
Net interest income (tax equivalent basis) /interest rate spread (5) 42,876 3.63 % 43,658 3.68 % 27,872 3.47 %
Less adjustment of tax exempt income   117   24   74
Net interest income   42,759 $ 43,634   27,798
Net interest margin (6) 3.81 % 3.87 % 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.
 

(2)

Average balances include unrealized gains (losses) on securities available for sale. Equity securities include marketable equity securities and restricted equity securities. Dividend payments may not be consistent and average yield on equity securities may vary from month to month.
 

(3)

Loans on non-accrual status are included in the average balances.
 

(4)

Including non-interest-bearing checking accounts, the average interest rate on total deposits was 0.63%, 0.89% and 0.97% in the three months ended June 30, 2012, March 31, 2012, and June 30, 2011, respectively.
 

(5)

Interest rate spread represents the difference between the yield on interest-earning assets and the cost of interest-bearing liabilities.
 

(6)

Net interest margin represents net interest income (tax equivalent basis) divided by average interest-earning assets.
 
 

BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Average Yields / Costs
                         
Six Months Ended
June 30, 2012 June 30, 2011

Average Balance
Interest (1)

Average Yield/Cost

Average Balance
Interest (1)

Average Yield/Cost
 

Assets
Interest-earning assets:
Short-term investments $ 64,780 $ 95 0.29 % $ 64,693 $ 50 0.16 %
Debt securities (2) 460,483 4,785 2.08 % 310,249 3,525 2.26 %
Equity securities (2) 55,263 219 0.79 % 38,968 105 0.48 %
Commercial real estate loans (3) 1,844,566 46,845 5.10 % 1,108,233 29,351 5.29 %
Commercial loans (3) 405,639 9,326 4.61 % 166,567 3,979 4.80 %
Equipment financing (3) 342,558 14,465 8.45 % 212,073 8,788 8.29 %
Indirect automobile loans (3) 577,802 12,280 4.27 % 573,799 14,595 5.13 %
Residential mortgage loans (3) 490,467 10,989 4.48 % 325,302 7,389 4.54 %
Other consumer loans (3)   270,065     6,043 4.50 %   73,370     1,427 3.92 %
Total interest-earning assets 4,511,623   105,047 4.67 % 2,873,254   69,209 4.82 %
Allowance for loan losses (34,515 ) (29,927 )
Non-interest earning assets   406,052     124,749  
Total assets $ 4,883,160   $ 2,968,076  
 

Liabilities and Stockholders' Equity
Interest-bearing liabilities:
Deposits:
NOW accounts 184,102 110 0.12 % $ 130,405 $ 107 0.17 %
Savings accounts 508,374 942 0.37 % 149,365 484 0.65 %
Money market savings accounts 1,174,149 4,412 0.76 % 772,528 3,696 0.96 %
Certificates of deposit   1,067,148     5,515 1.04 %   817,300     5,746 1.42 %
Total deposits (4) 2,933,773 10,979 0.75 % 1,869,598 10,033 1.08 %
Federal Home Loan Bank advances 709,373 7,095 2.01 % 405,695 5,193 2.58 %
Other borrowings   59,574     362 1.22 %   9,460     101 2.15 %
Total interest-bearing liabilities 3,702,720   18,436 1.00 % 2,284,753   15,327 1.35 %
Non-interest-bearing demandchecking accounts (4) 525,811 155,814
Other liabilities   52,754     26,631  
Total liabilities 4,281,285 2,467,198
Brookline Bancorp, Inc. stockholders’ equity 598,277 498,283
Noncontrolling interest in subsidiary   3,598     2,595  
Total liabilities and equity $ 4,883,160   $ 2,968,076  
Net interest income (tax equivalent basis) /interest rate spread (5) 86,611 3.67 % 53,882 3.47 %
Less adjustment of tax exempt income   219   144
Net interest income $ 86,392 $ 53,738
Net interest margin (6) 3.85 % 3.75 %

(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 securities available for sale. Equity securities include marketable equity securities and restricted equity securities. Dividend payments may not be consistent and average yield on equity securities may vary from month to month.
 

(3)

Loans on non-accrual status are included in the average balances.
 

(4)

Including non-interest-bearing checking accounts, the average interest rate on total deposits was 0.64% and 1.00% in the six months ended June 30, 2012 and 2011, respectively.
 

(5)

Interest rate spread represents the difference between the yield on interest-earning assets and the cost of interest-bearing liabilities.
 

(6)

Net interest margin represents net interest income (tax equivalent basis) divided by average interest-earning assets.
 
 

BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Non-GAAP Financial Information
                     
Three Months Ended June 30, Six Months Ended June 30,
2012 2011 2012 2011
Reconciliation Table - Non-GAAP Financial Information (In Thousands Except Per Share Data)
 
Net income attributable to Brookline Bancorp, Inc. $ 7,529 $ 7,001 $ 13,878 $ 14,267

Add:
Merger related expenses (after-tax)   -     774     3,972     924  
Net earnings from operations $ 7,529   $ 7,775   $ 17,850   $ 15,191  
 
Earnings per common share:
Basic $ 0.11 $ 0.13 $ 0.26 $ 0.26
Diluted 0.11 0.13 0.26 0.26
 
Weighted average common shares outstanding during the period:
Basic 69,677,656 58,629,265 69,671,130 58,620,467
Diluted 69,715,890 58,630,908 69,706,694 58,624,699
 
 
 
 
Jun 30, 2012 Mar 31, 2012 Dec 31, 2011 Sep 30, 2011 Jun 30, 2011
(Dollars in Thousands)
 
Brookline Bancorp, Inc. stockholders’ equity $ 598,865 $ 597,531 $ 503,602 501,890 $ 501,077
Less:
Goodwill 137,890 138,914 45,799 46,203

45,966

Identified intangible assets
  24,578     25,849     5,214     5,591    

6,033
 
Tangible stockholders' equity $ 436,397   $ 432,768   $ 452,589   $ 450,096   $

449,078
 
 
Total assets 4,972,381 4,877,124 3,299,013 3,157,498 3,114,582
Less:
Goodwill 137,890

 
138,914 45,799 46,203 45,966

Identified intangible assets
  24,578     25,849     5,214  

 
  5,591    

6,033
 
Tangible assets $ 4,809,913   $ 4,712,361   $ 3,248,000   $ 3,105,704   $

3,062,583
 

 

 
Tangible stockholders’ equity to tangible assets 9.07 % 9.18 % 13.93 % 14.49 % 14.66 %
 
 
 
Jun 30, 2012 Mar 31, 2012 Dec 31, 2011 Sep 30, 2011 Jun 30, 2011
(Dollars in Thousands Except Per Share Data)
 
Tangible stockholders' equity $ 436,397   $ 432,768   $ 452,589   $ 450,096   $

449,078
 
 
Common shares issued 75,414,713 75,585,504 64,597,180 64,580,180 64,447,889
Less:
Treasury shares   5,373,733     5,373,733     5,373,733     5,373,733     5,373,733  
Number of common shares outstanding   70,040,980     70,211,771     59,223,447     59,206,447     59,074,156  
 
Tangible book value per common share $ 6.23 $ 6.16 $ 7.64 $ 7.60 $ 7.60
 

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