Brookline Bancorp Announces Third Quarter Net Income Of $9.4 Million, EPS Of $0.14

Brookline Bancorp, Inc. (NASDAQ: BRKL) (the “Company”) today announced net income of $9.4 million, or $0.14 per basic share and $0.13 per diluted share, for the third quarter of 2013, compared to $9.5 million, or $0.14 per basic and diluted share, for the second quarter of 2013, and $11.4 million, or $0.16 per basic and diluted share, for the third quarter of 2012.

Paul Perrault, President and Chief Executive Officer of Brookline Bancorp, Inc., stated: “Brookline delivered another solid quarter for our shareholders in what continues to be a challenging environment. We are pleased to report growth in commercial real estate loans, commercial loans and deposits—growth that reflects the hard work of our dedicated bankers in a very competitive marketplace as well as the strength of our commercial banking niche. We are also pleased to report continuing declines in nonperforming assets to 0.32 percent of total assets, a level that is one of the lowest amongst our peers.”

BALANCE SHEET

Total assets increased $85.7 million during the third quarter of 2013 to $5.2 billion at September 30, 2013, and increased $174.8 million from $5.1 billion at September 30, 2012. The growth in total assets during the third quarter of 2013 is primarily driven by loans and leases, which increased $94.5 million to $4.3 billion at September 30, 2013, representing 9 percent growth on an annualized basis. At September 30, 2013, the commercial real estate and commercial loan and lease portfolios totaled $3.1 billion, or 71.7 percent of total loans and leases, as compared to $3.0 billion, or 70.2 percent at June 30, 2013, and $2.8 billion, or 67.4 percent at September 30, 2012. Strong loan growth continued in our commercial real estate portfolio, which increased $61.8 million during the third quarter of 2013, or 12 percent on an annualized basis. This growth offsets the decrease of $38.8 million in the indirect automobile portfolio during the same period.

Cash, cash equivalents, and investment securities were flat quarter-to-quarter and up $32.7 million year-to-year to $576.3 million, or 11.0 percent of total assets at September 30, 2013, as compared to $579.5 million, or 11.3 percent of total assets at June 30, 2013, and $543.6 million, or 10.7 percent of total assets at September 30, 2012.

Deposits of $3.7 billion at September 30, 2013 were up $81.0 million from June 30, 2013 and up $170.0 million from September 30, 2012. This represents an annualized increase of 9 percent from June 30, 2013. Core deposits, which consist of demand checking, NOW, savings, and money market accounts, increased at a 15 percent annualized rate in the third quarter of 2013, raising the core deposit ratio from 73.4 percent at June 30, 2013 to 74.6 percent at September 30, 2013. Total borrowings at September 30, 2013 remained flat as compared to June 30, 2013 and September 30, 2012.

The ratio of stockholders’ equity to total assets was 11.74 percent at September 30, 2013, as compared to 11.87 percent at June 30, 2013. The ratio of tangible stockholders’ equity to tangible assets was 9.03 percent at September 30, 2013, as compared to 9.10% at June 30, 2013.

NET INTEREST INCOME

Net interest income for the third quarter of 2013 decreased $2.0 million to $43.4 million from $45.4 million for the second quarter of 2013, largely as a result of the inclusion of a $1.0 million prepayment penalty received on a commercial loan payoff in the second quarter of 2013. Lending rate pressures account for the remaining decline. Net interest margin decreased from 3.78 percent for the three months ending June 30, 2013 to 3.56 percent for the three months ended September 30, 2013.

NON-INTEREST INCOME

Non-interest income for the third quarter of 2013 increased $0.4 million to $3.5 million as compared to $3.1 million for the second quarter of 2013. The quarter-to-quarter increase is largely a result of a $0.2 million recovery on an investment and a decrease of $0.1 million in losses on investments in affordable housing projects.

Non-interest income for the first nine months of 2013 decreased $2.2 million to $9.9 million from $12.1 million in 2012. Several factors contributed to the year-to-year decrease, including an increase of $1.0 million in losses from investments in affordable housing projects, a reduction of $0.5 million in loan-related gains on sale and fee income, an increase of $0.5 million in deposit-related income from a larger deposit base, and the inclusion of a net gain of $0.8 million on sales of securities in 2012.

NON-INTEREST EXPENSE

Non-interest expense for the third quarter of 2013 decreased $1.3 million to $29.6 million from $30.8 million for the second quarter of 2013. Quarter-to-quarter changes in the components of non-interest expense included the following:
  • Compensation and employee benefit expense decreased $1.1 million, or 7 percent, in part as a result of a $0.6 million reduction in Supplemental Executive Retirement Plan expense and a $0.8 million reduction of certain compensation-related expenses.
  • Occupancy expense increased $0.4 million, or 16 percent, due in part to an increase in real estate taxes due and the retirement of certain Premises and Equipment.

Non-interest expense for the first nine months of 2013 decreased $0.4 million to $91.1 million from $91.5 million in 2012. Year-to-year changes in the components of non-interest expense included the following:
  • Compensation and employee benefit expense increased $5.0 million, or 11 percent, compared to the first nine months of 2012. This year-to-year increase is largely a result of additions to staff to support systems conversions and to further the Company’s infrastructure build which is nearing completion.
  • Occupancy expense increased $1.4 million, or 18 percent, primarily due to increased real estate taxes on the Corporate Headquarters and the retirement of certain Premises and Equipment.
  • Equipment and data processing expense increased $0.9 million, or 8 percent, primarily due to upgrades in data processing, purchases of equipment, and conversion-related expenses in conjunction with Bank Rhode Island’s core system conversion.
  • Professional services expense decreased $6.6 million year-over-year largely as a result of the inclusion of $5.4 million of acquisition-related expense in 2012; and a reduction in the costs for integration expenses, bank charter conversions costs, and infrastructure-related expenses in 2013.

RETURNS ON AVERAGE ASSETS AND AVERAGE EQUITY

The return on average assets remained flat during the third quarter of 2013 as compared to the second quarter 2013 and decreased to 0.73 percent for the three months ended September 30, 2013 from 0.90 percent for the same period in 2012. Similarly, the return on average tangible stockholders’ equity remained flat during the third quarter of 2013 as compared to the second quarter 2013, and decreased to 8.27 percent for the three months ended September 30, 2013 from 10.27 percent as compared to the same period in 2012.

ASSET QUALITY

Nonperforming loans and leases decreased $2.1 million from $17.5 million, or 0.34 percent of total assets, at June 30, 2013 to $15.4 million, or 0.29 percent of total assets, at September 30, 2013. The ratio of nonperforming loans and leases to total loans and leases decreased from 0.42 percent at June 30, 2013 to 0.36 percent at September 30, 2013. Nonperforming assets also decreased approximately $2.2 million from $19.0 million, or 0.37 percent of total assets, at June 30, 2013 to $16.7 million, or 0.32 percent of total assets at September 30, 2013.

The provision for loan and lease losses increased from $2.4 million for the second quarter of 2013 to $2.7 million for the third quarter of 2013, primarily attributable to an increase of $0.6 million for growth in the commercial real estate and commercial loans and leases portfolios, a reduction of $1.2 million in general allowances due to improving asset quality and economic metrics, and an additional allowance of $0.7 million recorded for subsequent deterioration in the acquired loan portfolios.

The allowance for loan and lease losses was $46.4 million at September 30, 2013, compared to $44.3 million at June 30, 2013, and $38.9 million at September 30, 2012. The allowance for loan and lease losses as a percent of total loans and leases was 1.08 percent at September 30, 2013, compared to 1.05 percent at June, 30, 2013, and 0.94 percent at September 30, 2012. The allowance for loan and lease losses related to originated loans and leases as a percent of originated loans and leases decreased slightly from 1.34 percent at June 30, 2013 to 1.31 percent at September 30, 2013.

DIVIDEND DECLARED

The Company’s Board of Directors approved, for the 46 th consecutive quarter, a dividend of $0.085 per share. The dividend will be paid on November 22, 2013, to shareholders of record on November 8, 2013.

CONFERENCE CALL

The Company will conduct a conference call/webcast at 1:30 PM eastern time on Thursday, October 24, 2013 to discuss the results for the quarter, business highlights and outlook. The call can be accessed by dialing 888-317-6016 (United States) or 412-317-6016 (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 10035423. The call will be available live or 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 approximately $5.2 billion in assets and 47 branches throughout Massachusetts and Rhode Island, is headquartered in Boston, Massachusetts and operates as the holding company for Brookline Bank, Bank Rhode Island, and First Ipswich Bank. The 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.firstipswich.com.

FORWARD-LOOKING STATEMENTS

Certain statements contained in this press release that are not historical facts may constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and are intended to be covered by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve risks and uncertainties. The Company’s actual results could differ materially from those projected in the forward-looking statements as a result of, among others, the risks outlined in the Company’s Annual Report on Form 10-K, as updated by its Quarterly Reports on Form 10-Q and other filings submitted to the Securities and Exchange Commission. 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 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, 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 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 services 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 and for the Three MonthsEnded September 30,

At and for the Nine MonthsEnded September 30,
  2013     2012     2013     2012  
 
 
Earnings Data:
Net interest income $ 43,412 $ 46,411 $ 132,444 $ 132,805
Provision for credit losses 2,748 2,862 7,042 12,787
Non-interest income 3,453 3,785 9,918 12,101
Non-interest expense 29,553 30,436 91,140 91,507
Income before income taxes 14,564 16,898 44,180 40,612
Net income attributable to Brookline Bancorp, Inc. 9,429 11,401 27,732 25,279
 
Performance Ratios:
Net interest margin (1) 3.56 % 4.00 % 3.68 % 3.88 %
Interest-rate spread (1) 3.40 % 3.83 % 3.52 % 3.70 %
Return on average assets 0.73 % 0.90 % 0.72 % 0.68 %
Return on average stockholders' equity 6.15 % 7.53 % 6.01 % 5.63 %
Return on average tangible stockholders' equity 8.27 % 10.27 % 8.08 % 7.79 %
Efficiency ratio (non-GAAP) 63.06 % 60.63 % 64.02 % 63.15 %
 
Per Common Share Data:
Net income — Basic $ 0.14 $ 0.16 $ 0.40 $ 0.36
Net income — Diluted 0.13 0.16 0.40 0.36
Cash dividends declared 0.085 0.085 0.255 0.255
Book value per share (end of period) 8.80 8.69 8.80 8.69
Tangible book value per share (end of period) (non-GAAP) 6.57 6.38 6.57 6.38
Stock price (end of period) 9.40 8.82 9.40 8.82
 
(1) Calculated on a fully tax-equivalent basis.
 
 
At and for the Three Months Ended
Sep 30, 2013 Jun 30, 2013 Mar 31, 2013 Dec 31, 2012 Sep 30, 2012
(Dollars in Thousands)
Balance Sheet:
Total assets $ 5,236,229 $ 5,150,480 $ 5,110,378 $ 5,147,534 $ 5,061,444
Total loans and leases 4,299,477 4,205,015 4,173,985 4,175,712 4,144,012
Total deposits 3,737,978 3,656,981 3,626,033 3,616,259 3,568,016
Brookline Bancorp, Inc. stockholders’ equity 614,811 611,284 614,039 612,097 605,962
 
Asset Quality:
Nonperforming assets $ 16,738 $ 18,986 $ 22,941 $ 23,737 $ 23,675
Nonperforming assets as a percentage of total assets 0.32 % 0.37 % 0.45 % 0.46 % 0.47 %
Allowance for loan and lease losses $ 46,390 $ 44,281 $ 42,532 $ 41,152 $ 38,913

Allowance for loan and lease losses as a percentage of total loans and leases
1.08 % 1.05 % 1.02 % 0.98 % 0.94 %
Net loan and lease charge-offs $ 621 $ 639 $ 419 $ 826 $ 1,539

Net loan and lease charge-offs as a percentage of average loans and leases (annualized)
0.06 % 0.06 % 0.04 % 0.08 % 0.15 %
 
Capital Ratios:
Stockholders’ equity to total assets 11.74 % 11.87 % 12.02 % 11.89 % 11.97 %

Tangible stockholders’ equity to tangible assets (non-GAAP)
9.03 % 9.10 % 9.20 % 9.08 % 9.08 %
 

 
BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Consolidated Balance Sheets (Unaudited)
         
September 30, June 30, March 31, December 31, September 30,
  2013     2013     2013     2012     2012  
(In Thousands Except Share Data)
ASSETS
Cash and due from banks $ 37,220 $ 33,008 $ 39,330 $ 78,441 $ 41,617
Short-term investments   58,195     66,787     52,766     38,656     34,655  
Total cash and cash equivalents   95,415     99,795     92,096     117,097     76,272  
Investment securities available-for-sale 480,402 479,177 486,625 481,323 466,822
Investment securities held-to-maturity   500     500     500     500     500  
Total investment securities   480,902     479,677     487,125     481,823     467,322  
Loans held-for-sale 200 4,221 839 3,233 2,303
Loans and leases:
Commercial real estate loans:
Commercial real estate mortgage 1,400,769 1,349,051 1,299,496 1,301,233 1,262,411
Multi-family mortgage 599,601 594,939 585,669 606,533 628,162
Construction   118,090     112,684     115,896     98,197     86,345  
Total commercial real estate loans   2,118,460     2,056,674     2,001,061     2,005,963     1,976,918  
Commercial loans and leases:
Commercial 409,376 376,507 399,781 382,277 346,744
Equipment financing 513,345 476,724 448,701 420,991 426,597
Condominium association   43,205     41,859     43,043     44,187     43,732  
Total commercial loans and leases   965,926     895,090     891,525     847,455     817,073  
Indirect automobile loans   440,949     479,782     510,954     542,344     574,279  
Consumer loans:
Residential mortgage 511,835 507,099 509,155 511,109 505,553
Home equity 254,888 257,839 254,048 261,562 263,194
Other consumer   7,419     8,531     7,242     7,279     6,995  
Total consumer loans   774,142     773,469     770,445     779,950     775,742  
Total loans and leases 4,299,477 4,205,015 4,173,985 4,175,712 4,144,012
Allowance for loan and lease losses   (46,390 )   (44,281 )   (42,532 )   (41,152 )   (38,913 )
Net loans and leases   4,253,087     4,160,734     4,131,453     4,134,560     4,105,099  
Restricted equity securities 66,627 66,627 66,553 68,661 68,661
Premises and equipment, net 79,504 76,867 74,223

 
70,791

 
66,814
Building held-for-sale - - - - 6,046
Deferred tax asset 34,322 32,739 29,123 27,197 27,354
Goodwill, net 137,890 137,890 137,890

 
137,890

 
137,890
Identified intangible assets, net of accumulated amortization 18,015 19,168 20,345 21,510 23,307
Other real estate owned and repossessed assets, net 1,319 1,493 1,248 1,491 2,386
Other assets   68,948     71,269     69,483     83,281     77,990  
Total assets $ 5,236,229   $ 5,150,480   $ 5,110,378   $ 5,147,534   $ 5,061,444  
 
LIABILITIES AND EQUITY
Deposits:
Non-interest-bearing deposits:
Demand checking accounts $ 667,181 $ 644,507 $ 623,315 $ 623,274 $ 590,189
Interest-bearing deposits:
NOW accounts 204,164 196,778 194,313 212,858 183,478
Savings accounts 512,393 503,170 509,967 515,367 520,614
Money market accounts 1,403,881 1,340,024 1,303,231 1,253,819 1,231,206
Certificate of deposit accounts   950,359     972,502     995,207     1,010,941     1,042,529  
Total interest-bearing deposits   3,070,797     3,012,474     3,002,718     2,992,985     2,977,827  
Total deposits   3,737,978     3,656,981     3,626,033     3,616,259     3,568,016  
Borrowed funds:
Advances from the FHLBB 784,740 785,565 759,675 790,865 771,110
Other borrowed funds   44,062     44,501     60,772     63,104     57,146  
Total borrowed funds   828,802     830,066     820,447     853,969     828,256  
Mortgagors’ escrow accounts 8,008 7,465 7,823 6,946 7,066
Accrued expenses and other liabilities   42,820     41,097     38,825     54,551     47,889  
Total liabilities   4,617,608     4,535,609     4,493,128     4,531,725     4,451,227  
 
Equity:
Brookline Bancorp, Inc. stockholders’ equity:
Common stock, $0.01 par value; 200,000,000 shares authorized;
75,744,445 shares, 75,744,445 shares, 75,744,445 shares,
75,749,825 shares, and 75,749,819 shares issued, respectively 754 754 754 754 754
Additional paid-in capital 616,971 619,036 618,711 618,429 618,176
Retained earnings, partially restricted 63,210 59,747 56,211 53,358 47,451
Accumulated other comprehensive (loss) income (4,900 ) (4,441 ) 2,233 3,483 3,569
Treasury stock, at cost;
5,154,327 shares, 5,373,733 shares, 5,373,733 shares,
5,373,733 shares, and 5,373,733 shares, respectively (59,576 ) (62,107 ) (62,107 ) (62,107 ) (62,107 )
Unallocated common stock held by ESOP;
302,229 shares, 312,792 shares, 323,355 shares,
333,918 shares, and 344,991 shares, respectively   (1,648 )   (1,705 )   (1,763 )   (1,820 )   (1,881 )
Total Brookline Bancorp, Inc. stockholders’ equity   614,811     611,284     614,039     612,097     605,962  
Noncontrolling interest in subsidiary   3,810     3,587     3,211     3,712     4,255  
Total equity   618,621     614,871     617,250     615,809     610,217  
Total liabilities and equity $ 5,236,229   $ 5,150,480   $ 5,110,378   $ 5,147,534   $ 5,061,444  
 

 
BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Consolidated Statements of Income (Unaudited)
       
Three Months Ended September 30, Nine Months Ended September 30,
  2013     2012     2013     2012  
(In Thousands Except Share Data)
Interest and dividend income:
Loans and leases $ 48,462 $ 53,271 $ 148,525 $ 153,049
Debt securities 2,041 1,949 5,827 6,719
Short-term investments 22 71 72 166
Marketable and restricted equity securities   298     103     911     291  
Total interest and dividend income   50,823     55,394     155,335     160,225  
 
Interest expense:
Deposits 4,637 5,375 14,214 16,355
Borrowed funds and subordinated debt   2,774     3,608     8,677     11,065  
Total interest expense   7,411     8,983     22,891     27,420  
 
Net interest income 43,412 46,411 132,444 132,805
Provision for credit losses   2,748     2,862     7,042     12,787  
Net interest income after provision for credit losses   40,664     43,549     125,402     120,018  
 
Non-interest income:
Fees, charges and other income 4,011 3,858 11,412 11,759
Loss from investments in affordable housing projects (558 ) (73 ) (1,494 ) (455 )
Gain on sales of securities, net   -     -     -     797  
Total non-interest income   3,453     3,785     9,918     12,101  
 
Non-interest expense:
Compensation and employee benefits 15,591 14,664 48,586 43,590
Occupancy 3,312 2,673 9,260 7,852
Equipment and data processing 4,061 4,136 12,423 11,548
Professional services 1,329 1,932 4,343 10,939
FDIC insurance 508 973 2,378 3,123
Advertising and marketing 758 689 2,196 2,166
Amortization of identified intangible assets 1,154 1,271 3,496 3,825
Other   2,840     4,098     8,458     8,464  
Total non-interest expense   29,553     30,436     91,140     91,507  
 
Income before income taxes 14,564 16,898 44,180 40,612
Provision for income taxes   4,645     5,176     15,156     14,473  
Net income before noncontrolling interest in subsidiary 9,919 11,722 29,024 26,139

Less net income attributable to noncontrolling interest in subsidiary
  490     321     1,292     860  
Net income attributable to Brookline Bancorp, Inc. $ 9,429   $ 11,401   $ 27,732   $ 25,279  
 
Earnings per common share:
Basic $ 0.14 $ 0.16 $ 0.40 $ 0.36
Diluted $ 0.13 0.16 0.40 0.36
 
Weighted average common shares outstanding during the period:
Basic 69,830,953 69,716,283 69,789,737 69,682,741
Diluted 69,913,765 69,754,473 69,860,722 69,718,072
 
Dividends declared per common share $ 0.085 $ 0.085 $ 0.255 $ 0.255
 
 
* Certain amounts previously reported have been reclassified to conform to the current period's presentation.
 

 
BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Asset Quality Analysis (Unaudited)
         
At and for the Three Months Ended
Sep 30, 2013 Jun 30, 2013 Mar 31, 2013 Dec 31, 2012 Sep 30, 2012

(Dollars in Thousands)
NONPERFORMING ASSETS:
 
Loans and leases accounted for on a nonaccrual basis:
Commercial real estate mortgage $ 1,137 $ 2,682 $ 3,970 $ 4,014 $ 3,610
Multi-family mortgage 664 1,593 4,132 4,233 5,157
Construction   -     -     -     -     -  
Total commercial real estate loans 1,801 4,275 8,102 8,247 8,767
 
Commercial 4,747 4,680 5,035 5,454 5,432
Equipment financing 4,116 4,014 3,595 3,873 3,040
Condominium association   3     4     6     8     9  
Total commercial loans and leases 8,866 8,698 8,636 9,335 8,481
 
Indirect automobile loans 195 156 62 99 80
 
Residential mortgage 2,738 2,786 3,724 3,804 2,924
Home equity 1,801 1,557 1,150 716 988
Other consumer   18     21     19     45     49  
Total consumer loans 4,557 4,364 4,893 4,565 3,961
 
Total nonaccrual loans and leases 15,419 17,493 21,693 22,246 21,289
 
Other real estate owned 726 1,002 943 903 1,690
Other repossessed assets   593     491     305     588     696  
 
Total nonperforming assets $ 16,738   $ 18,986   $ 22,941   $ 23,737   $ 23,675  
 
 
Troubled debt restructurings on accrual 12,158 9,631 9,816 10,414 9,232
Troubled debt restructurings on nonaccrual   5,905     6,919     7,514     6,786     3,821  
Total troubled debt restructurings $ 18,063   $ 16,550   $ 17,330   $ 17,200   $ 13,053  
 
 
Nonperforming loans and leases as a percentage of total loans and leases 0.36 % 0.42 % 0.52 % 0.53 % 0.51 %
Nonperforming assets as a percentage of total assets 0.32 % 0.37 % 0.45 % 0.46 % 0.47 %
 
 
PROVISION AND ALLOWANCE FOR LOAN AND LEASE LOSSES:
 
Allowance for loan and lease losses at beginning of period $ 44,281 $ 42,532 $ 41,152 $ 38,913 $ 37,431
Charge-offs (903 ) (1,028 ) (661 ) (1,527 ) (1,807 )
Recoveries   282     389     242     701     268  
Net charge-offs (621 ) (639 ) (419 ) (826 ) (1,539 )
Provision for loan and lease losses   2,730     2,388     1,799     3,065     3,021  
Allowance for loan and lease losses at end of period $ 46,390   $ 44,281   $ 42,532   $ 41,152   $ 38,913  
 

Allowance for loan and lease losses as a percentage of total loans and leases
1.08 % 1.05 % 1.02 % 0.98 % 0.94 %

Allowance for loan and lease losses related to originated loans and leases as a percentage of originated loans and leases
1.31 % 1.34 % 1.34 % 1.33 % 1.31 %
 
NET CHARGE-OFFS:
 
Commercial real estate loans $ 7 $ 81 $ (4 ) $ - $ (38 )
Commercial loans and leases 157 295 166 196 1,179
Indirect automobile loans 396 170 231 366 301
Consumer loans   61     93     26     264     97  
Total net charge-offs $ 621   $ 639   $ 419   $ 826   $ 1,539  
 

Net loan and lease charge-offs as a percentage of average loans and leases (annualized)
0.06 % 0.06 % 0.04 % 0.08 % 0.15 %
 

 
BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Average Yields / Costs (Unaudited)
                 
 
Three Months Ended
September 30, 2013 June 30, 2013 September 30, 2012

AverageBalance
Interest (1)

AverageYield/Cost

AverageBalance
Interest (1)

AverageYield/Cost

AverageBalance
Interest (1)

AverageYield/Cost
(Dollars in Thousands)
Assets:
Interest-earning assets:
Short-term investments $ 69,272 $ 22 0.13 % $ 52,541 $ 19 0.14 % $ 103,614 $ 71 0.27 %
Debt securities (2) 475,506 2,047 1.72 % 487,271 1,940 1.59 % 412,439 1,955 1.90 %
Marketable and restricted equity securities (2)   66,995     346 2.06 %   66,988     350 2.10 %   62,121     110 0.72 %
Total investments   611,773     2,415 1.58 %   606,800     2,309 1.52 %   578,174     2,136 1.48 %
Commercial real estate loans (3) 2,088,450 24,021 4.56 % 2,034,920 23,863 4.67 % 1,944,222 23,648 4.89 %
Commercial loans (3) 442,052 4,493 3.99 % 420,194 6,531 6.16 % 378,822 6,869 7.23 %
Equipment financing (3) 489,127 8,343 6.79 % 467,156 8,279 7.10 % 406,423 7,816 7.69 %
Indirect automobile loans (3) 460,927 4,172 3.59 % 494,571 4,523 3.67 % 577,119 5,852 4.03 %
Residential mortgage loans (3) 507,616 4,866 3.81 % 512,975 5,101 3.98 % 506,701 5,686 4.49 %
Other consumer loans (3)   262,442     2,762 4.17 %   264,183     2,508 3.81 %   269,915     3,544 5.22 %
Total loans and leases   4,250,614     48,657 4.54 %   4,193,999     50,805 4.83 %   4,083,202     53,415 5.24 %
Total interest-earning assets   4,862,387     51,072 4.16 %   4,800,799     53,114 4.41 %   4,661,376     55,551 4.77 %
Allowance for loan and lease losses (44,959 ) (42,954 ) (40,510 )
Non-interest-earning assets   382,155     380,299     424,892  
Total assets $ 5,199,583   $ 5,138,144   $ 5,045,758  
 
Liabilities and Stockholders' Equity:
Interest-bearing liabilities:
Interest-bearing deposits:
NOW accounts $ 198,643 $ 42 0.08 % $ 195,269 $ 41 0.09 % $ 181,891 $ 51 0.11 %
Savings accounts 512,205 315 0.24 % 508,451 316 0.25 % 517,068 410 0.32 %
Money market accounts 1,377,495 2,040 0.59 % 1,335,300 2,036 0.61 % 1,239,230 2,246 0.72 %
Certificates of deposit   957,494     2,240 0.93 %   982,257     2,350 0.96 %   1,049,390     2,668 1.01 %
Total interest-bearing deposits   3,045,837     4,637 0.60 %   3,021,277     4,743 0.63 %   2,987,579     5,375 0.72 %
Advances from the FHLBB 772,067 2,666 1.37 % 760,237 2,682 1.41 % 757,017 3,408 1.79 %
Other borrowed funds   44,326     108 0.96 %   48,655     112 0.93 %   57,753     200 1.38 %
Total interest-bearing liabilities   3,862,230     7,411 0.76 %   3,830,169     7,537 0.79 %   3,802,349     8,983 0.94 %
Non-interest-bearing liabilities:
Demand checking accounts 675,907 640,725 572,305
Other non-interest-bearing liabilities   44,832     47,589     59,429  
Total liabilities 4,582,969 4,518,483 4,434,083
Brookline Bancorp, Inc. stockholders’ equity 612,866 616,327 605,988
Noncontrolling interest in subsidiary   3,748     3,334     5,687  
Total liabilities and equity $ 5,199,583   $ 5,138,144   $ 5,045,758  
Net interest income (tax-equivalent basis) /
Interest-rate spread (4) 43,661 3.40 % 45,577 3.62 % 46,568 3.83 %
Less adjustment of tax-exempt income   249   214   157
Net interest income $ 43,412 $ 45,363 $ 46,411
Net interest margin (5) 3.56 % 3.78 % 4.00 %
 
 

 

(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. 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.
 
BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Average Yields / Costs (Unaudited)
           
Nine Months Ended
September 30, 2013 September 30, 2012

AverageBalance
Interest (1)

AverageYield/Cost

AverageBalance
Interest (1)

Average Yield/Cost
(Dollars in Thousands)
Assets:
Interest-earning assets:
Short-term investments $ 58,872 $ 72 0.16 % $ 98,781 $ 166 0.23 %
Debt securities (2) 478,110 5,841 1.63 % 445,012 6,741 2.02 %
Marketable and restricted equity securities (2)   67,506     1,056 2.09 %   57,225     329 0.77 %
Total investments   604,488     6,969 1.54 %   601,018     7,236 1.61 %
Commercial real estate loans (3) 2,041,834 72,190 4.69 % 1,889,996 70,723 5.01 %
Commercial loans (3) 424,904 15,796 4.91 % 360,453 16,170 5.99 %
Equipment financing (3) 465,217 24,418 7.01 % 384,453 22,000 7.63 %
Indirect automobile loans (3) 493,898 13,611 3.68 % 577,857 18,132 4.19 %
Residential mortgage loans (3) 509,728 15,132 3.97 % 498,929 16,675 4.46 %
Other consumer loans (3)   263,762     7,886 4.00 %   269,473     9,587 4.75 %
Total loans and leases   4,199,343     149,033 4.72 %   3,981,161     153,287 5.15 %
Total interest-earning assets   4,803,831     156,002 4.32 %   4,582,179     160,523 4.68 %
Allowance for loan and lease losses (43,146 ) (34,914 )
Non-interest-earning assets   375,074     405,524  
Total assets $ 5,135,759   $ 4,952,789  
 
Liabilities and Stockholders' Equity:
Interest-bearing liabilities:
Interest-bearing deposits:
NOW accounts $ 194,775 $ 128 0.09 % $ 182,441 $ 162 0.12 %
Savings accounts 511,672 975 0.25 % 517,168 1,351 0.35 %
Money market accounts 1,336,093 6,136 0.61 % 1,188,551 6,658 0.75 %
Certificates of deposit   980,628     6,975 0.95 %   1,064,431     8,184 1.03 %
Total interest-bearing deposits   3,023,168     14,214 0.63 %   2,952,591     16,355 0.74 %
Advances from the FHLBB 761,927 8,303 1.46 % 723,934 10,502 1.94 %
Other borrowed funds   50,941     374 0.98 %   59,344     563 1.27 %
Total interest-bearing liabilities   3,836,036     22,891 0.80 %   3,735,869     27,420 0.98 %
Non-interest-bearing liabilities:
Demand checking accounts 641,749 545,109
Other non-interest-bearing liabilities   38,811     67,793  
Total liabilities 4,516,596 4,348,771
Brookline Bancorp, Inc. stockholders’ equity 615,519 598,292
Noncontrolling interest in subsidiary   3,644     5,726  
Total liabilities and equity $ 5,135,759   $ 4,952,789  
Net interest income (tax-equivalent basis) /
Interest-rate spread (4) 133,111 3.52 % 133,103 3.70 %
Less adjustment of tax-exempt income   667   298
Net interest income $ 132,444 $ 132,805
Net interest margin (5) 3.68 % 3.88 %
 
 

 

 

 

 
 

(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. 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.
 
BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Non-GAAP Financial Information (Unaudited)
         
Three Months Ended September 30, Nine Months Ended September 30,
  2013     2012     2013     2012  
Reconciliation Table - Non-GAAP Financial Information (Dollars in Thousands Except Share Data)
 
Net income attributable to Brookline Bancorp, Inc. $ 9,429 $ 11,401 $ 27,732 $ 25,279
Add:
Acquisition-related expenses (after-tax)   -     -     -     3,972  
Net earnings from operations $ 9,429   $ 11,401   $ 27,732   $ 29,251  
 
Operating earnings per common share:
Basic $ 0.14 $ 0.16 $ 0.40 $ 0.42
Diluted 0.13 0.16 0.40 0.42
 
Weighted average common shares outstanding during the period:
Basic 69,830,953 69,716,283 69,789,737 69,682,741
Diluted 69,913,765 69,754,473 69,860,722 69,718,072
 
 
Sep 30, 2013 Jun 30, 2013 Mar 31, 2013 Dec 31, 2012 Sep 30, 2012
(Dollars in Thousands)
 
Brookline Bancorp, Inc. stockholders’ equity $ 614,811 $ 611,284 $ 614,039 $ 612,097 $ 605,962
Less:
Goodwill 137,890 137,890 137,890 137,890 137,890
Identified intangible assets   18,015     19,168     20,345     21,510     23,307  
Tangible stockholders' equity $ 458,906   $ 454,226   $ 455,804   $ 452,697   $ 444,765  
 
Total assets $ 5,236,229 $ 5,150,480 $ 5,110,378 $ 5,147,534 $ 5,061,444
Less:
Goodwill 137,890 137,890 137,890 137,890 137,890
Identified intangible assets   18,015     19,168     20,345     21,510     23,307  
Tangible assets $ 5,080,324   $ 4,993,422   $ 4,952,143   $ 4,988,134   $ 4,900,247  
 
Tangible stockholders’ equity to tangible assets 9.03 % 9.10 % 9.20 % 9.08 % 9.08 %
 
 
Sep 30, 2013 Jun 30, 2013 Mar 31, 2013 Dec 31, 2012 Sep 30, 2012
(Dollars in Thousands)
 
Tangible stockholders' equity $ 458,906   $ 454,226   $ 455,804   $ 452,697   $ 444,765  
 
Number of common shares issued 75,744,445 75,744,445 75,744,445 75,749,825 75,749,819
Less:
Treasury shares 5,154,327 5,373,733 5,373,733 5,373,733 5,373,733
Unallocated ESOP shares 302,229 312,792 323,355 333,918 344,991
Unvested restricted stocks   429,818     276,011     277,510     295,055     295,055  
Number of common shares outstanding   69,858,071     69,781,909     69,769,847     69,747,119     69,736,040  
 
Tangible book value per common share $ 6.57 $ 6.51 $ 6.53 $ 6.49 $ 6.38
 
 
Sep 30, 2013 Jun 30, 2013 Mar 31, 2013 Dec 31, 2012 Sep 30, 2012
(Dollars in Thousands)
 
Allowance for loan and lease losses $ 46,390 $ 44,281 $ 42,532 $ 41,152 $ 38,913
Less:
Allowance for acquired loans and leases losses   1,278     620     -     -     -  
Allowance for originated loan and lease losses $ 45,112   $ 43,661   $ 42,532   $ 41,152   $ 38,913  
 
Total loans and leases $ 4,299,477 $ 4,205,015 $ 4,173,985 $ 4,175,712 $ 4,144,012
Less:
Total acquired loans and leases   865,708     938,815     997,988     1,059,610     1,149,585  
Total originated loans and leases $ 3,433,769   $ 3,266,200   $ 3,175,997   $ 3,116,102   $ 2,994,427  
 
Allowance for loan and lease losses related to
originated loans and leases as a percentage
of originated loans and leases 1.31 % 1.34 % 1.34 % 1.33 % 1.31 %

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