Brookline Bancorp Announces Third Quarter Results

Brookline Bancorp, Inc. (NASDAQ: BRKL) (the "Company") today announced net income of $11.6 million, or $0.17 per basic and diluted share, for the third quarter of 2014, compared to $10.0 million, or $0.14 per basic and diluted share, for the second quarter of 2014.

During the third quarter of 2014, the Company recorded $1.4 million in other income due to a settlement payment from an insurance carrier in relation to a 2012 litigation. Excluding this item, net income would have been $0.15 per basic and diluted share.

Paul Perrault, President and Chief Executive Officer of Brookline Bancorp, Inc., stated: "Thanks to our driven colleagues and our customer focused culture, I am pleased to announce that Brookline Bancorp delivered another excellent quarter with solid loan and deposit growth, as well as strong earnings and returns to our shareholders. The Company will continue to encounter fierce competition, but I am confident that the Company is poised to finish the year strong."

BALANCE SHEET

Total assets of $5.7 billion at September 30, 2014 increased $130.5 million from June 30, 2014, and increased $392.9 million from December 31, 2013. The growth in total assets was driven by growth in the loan portfolio. At September 30, 2014, total loans and leases were $4.7 billion, representing an increase of $132.1 million from June 30, 2014, and an increase of $373.6 million from December 31, 2013. During the third quarter of 2014, total loans and leases grew 11.5 percent on an annualized basis. At September 30, 2014, the commercial real estate and commercial loan and lease portfolios totaled $3.5 billion, or 74.4 percent of total loans and leases, as compared to $3.4 billion, or 73.7 percent at June 30, 2014, and $3.2 billion, or 72.6 percent at December 31, 2013. Strong loan growth continued in our total commercial real estate and commercial loan and lease portfolios, which increased $133.0 million during the third quarter of 2014, or 15.7 percent on an annualized basis.

Cash, cash equivalents, and investment securities increased $7.4 million to $616.2 million, or 10.8 percent of total assets at September 30, 2014, as compared to $608.8 million, or 10.9 percent of total assets at June 30, 2014, and increased $30.8 million from $585.4 million, or 11.0 percent of total assets at December 31, 2013.

Total deposits of $3.9 billion at September 30, 2014 increased $28.1 million from June 30, 2014, and increased $54.2 million from December 31, 2013. Core deposits, which consist of demand checking, NOW, savings, and money market accounts, increased at a 2.8 percent annualized rate in the third quarter of 2014. The core deposit ratio remained constant at 76.7 percent at September 30, 2014 and June 30, 2014.

Total borrowings at September 30, 2014 were $1.1 billion, an increase of $91.9 million as compared to June 30, 2014, and an increase of $320.3 million as compared to December 31, 2013. During the three months ended September 30, 2014, the Company issued $75.0 million of 6.0% fixed-to-floating subordinated notes due September 15, 2029.

The ratio of stockholders' equity to total assets was 11.06 percent at September 30, 2014, as compared to 11.23 percent at June 30, 2014 and 11.53 percent at December 31, 2013. The ratio of tangible stockholders' equity to tangible assets was 8.63 percent at September 30, 2014, as compared to 8.73 percent at June 30, 2014 and 8.88 percent at December 31, 2013.

NET INTEREST INCOME

Net interest income increased $0.9 million to $47.3 million during the third quarter of 2014 from the linked quarter. The increase of $1.3 million in interest income from loans and leases was driven by an increase of $2.1 million due to volume offset by a decrease of $0.8 million due to lower interest rates. The increase in interest income from loans and leases was offset by a $0.3 million increase in interest expense from borrowed funds, primarily due to additional interest expense on the newly issued subordinated notes. The net interest margin decreased 7 basis points to 3.54 percent for the three months ended September 30, 2014.

PROVISION FOR LOAN LOSSES

The Company recorded a provision for loan and lease losses of $1.9 million for the quarter ended September 30, 2014, compared to $2.2 million during the second quarter of 2014. The decrease of $0.3 million quarter over quarter is due to an improvement in the credit characteristics of the equipment financing portfolio, partially offset by additional reserves required for the deterioration in the acquired portfolio and loan growth during the quarter.

Net charge-offs increased slightly to $0.8 million for the third quarter of 2014 compared to $0.7 million for the second quarter of 2014. The ratio of net charge-offs to average loans on an annualized basis remained constant at 0.07 percent for the third and second quarter of 2014.

The allowance for loan losses represented 1.12 percent of total loans and leases at September 30, 2014 and June 30, 2014. The allowance for loan losses related to originated loans and leases as a percentage of originated loans and leases was 1.26 percent at September 30, 2014, compared to 1.31 percent at June 30, 2014 due to improved credit quality slightly offset by loan volume.

NON-INTEREST INCOME

Non-interest income for the quarter ended September 30, 2014 increased $2.4 million to $5.7 million from the linked quarter. The increase was largely driven by a litigation settlement of $1.4 million, an increase in the loan fees of $0.5 million from back-to-back interest-rate swaps and an increase of $0.5 million in the gain on sales of loans and leases held-for sale.

NON-INTEREST EXPENSE

Non-interest expense for the quarter ended September 30, 2014 increased $0.7 million to $31.9 million from the linked quarter, principally driven by a $0.6 million increase in Supplemental Employee Retirement Plan expense due to a decrease in the discount rate.

RETURNS ON AVERAGE ASSETS AND AVERAGE EQUITY

The return on average assets increased during the third quarter of 2014 to 0.82 percent at September 30, 2014 from 0.73 percent for the second quarter of 2014. The return on average tangible assets increased to 0.84 percent for the third quarter of 2014 from 0.75 percent for the second quarter of 2014.

The return on average stockholders' equity increased during the third quarter of 2014 to 7.32 percent from 6.37 percent for the second quarter of 2014. The return on average tangible stockholders' equity increased to 9.66 percent for the third quarter of 2014 from 8.44 percent for the second quarter of 2014.

ASSET QUALITY

Nonperforming loans and leases increased $0.2 million during the third quarter of 2014 to $17.3 million at September 30, 2014 from the linked quarter. The ratio of nonperforming loans and leases to total loans and leases remained unchanged at 0.37 percent at September 30, 2014 from the linked quarter. Nonperforming assets also increased $1.4 million during the third quarter of 2014 to $19.8 million, or 0.35 percent of total assets, at September 30, 2014 from the linked quarter.

DIVIDEND DECLARED

The Company's Board of Directors approved a dividend of $0.085 per share. The dividend will be paid on November 28, 2014 to shareholders of record on November 14, 2014.

STOCK REPURCHASE

On October 29, 2014, the Board of Directors of the Company approved a stock repurchase program of up to $10.0 million of total outstanding shares of the Company's common stock over a period of fourteen months ending on December 31, 2015. The shares may be repurchased from time to time in open market or negotiated transactions at prevailing market prices in accordance with federal securities laws.

CONFERENCE CALL

The Company will conduct a conference call/webcast at 1:30 PM Eastern Standard Time on Thursday, October 30, 2014 to discuss the results for the quarter, business highlights and outlook. The call can be accessed by dialing 877-504-4120 (United States) or 412-902-6650 (internationally). A recorded playback of the call will be available for one week following the call at 877-344-7529 (United States) or 412-317-0088 (internationally). The passcode for the playback is 10053487. The call will be available live and in a recorded version on the Company's website under "Investor Relations" at www.brooklinebancorp.com.

ABOUT BROOKLINE BANCORP, INC.

Brookline Bancorp, Inc., a bank holding company with approximately $5.7 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, 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 ("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 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, return on average tangible assets and return on average tangible stockholders' equity. 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 Months Ended
September 30, 2014 June 30, 2014 March 31, 2014 December 31, 2013 September 30, 2013
(Dollars In Thousands Except Share Data)
Earnings Data:
Net interest income $ 47,324 $ 46,434 $ 47,734 $ 43,774 $ 43,412
Provision for credit losses 2,034 2,276 2,443 3,887 2,748
Non-interest income 5,656 3,290 5,124 3,907 3,456
Non-interest expense 31,924 31,222 33,576 31,320 29,556
Income before provision for income taxes 19,022 16,226 16,839 12,474 14,564
Net income attributable to Brookline Bancorp, Inc. 11,581 9,976 10,422 7,654 9,429
 
Performance Ratios:
Net interest margin (1) 3.54 % 3.61 % 3.82 % 3.54 % 3.56 %
Interest-rate spread (1) 3.40 % 3.47 % 3.67 % 3.38 % 3.40 %
Return on average assets 0.82 % 0.73 % 0.78 % 0.58 % 0.73 %
Return on average tangible assets (non-GAAP)

0.84
% 0.75 % 0.80 % 0.60 % 0.75 %
Return on average stockholders' equity 7.32 % 6.37 % 6.70 % 4.95 % 6.15 %
Return on average tangible stockholders' equity (non-GAAP) 9.66 % 8.44 % 8.92 % 6.61 % 8.27 %
Efficiency ratio 60.26 % 62.79 % 63.52 % 65.69 % 63.06 %
 
Per Common Share Data:
Net income — Basic $ 0.17 $ 0.14 $ 0.15 $ 0.11 $ 0.14
Net income — Diluted 0.17 0.14 0.15 0.11 0.13
Cash dividends declared 0.085 0.085 0.085 0.085 0.085
Book value per share (end of period) 9.03 8.98 8.88 8.79 8.80
Tangible book value per share (end of period) (non-GAAP) 6.86 6.79 6.68 6.57 6.57
Stock price (end of period) 8.55 9.37 9.42 9.55 9.40
 
Balance Sheet:
Total assets $ 5,717,965 $ 5,587,486 $ 5,418,785 $ 5,325,106 $ 5,236,229
Total loans and leases 4,736,028 4,603,913 4,461,997 4,362,465 4,299,477
Total deposits 3,889,204 3,861,147 3,847,650 3,835,006 3,737,978
Brookline Bancorp, Inc. stockholders' equity 632,400 627,663 620,799 613,867 614,811
 
Asset Quality:
Nonperforming assets $ 19,785 $ 18,407 $ 19,430 $ 18,079 $ 16,738
Nonperforming assets as a percentage of total assets 0.35 % 0.33 % 0.36 % 0.34 % 0.32 %
Allowance for loan and lease losses $ 52,822 $ 51,686 $ 50,224 $ 48,473 $ 46,390
Allowance for loan and lease losses as a percentage of total loans and leases 1.12 % 1.12 % 1.13 % 1.11 % 1.08 %
Net loan and lease charge-offs $ 793 $ 720 $ 666 $ 1,676 $ 621
Net loan and lease charge-offs as a percentage of average loans and leases (annualized) 0.07 % 0.06 % 0.06 % 0.16 % 0.06 %
 
Capital Ratios:
Stockholders' equity to total assets 11.06 % 11.23 % 11.46 % 11.53 % 11.74 %
Tangible stockholders' equity to tangible assets (non-GAAP) 8.63 % 8.73 % 8.87 % 8.88 % 9.03 %
 
(1) Calculated on a fully tax-equivalent basis.
 

BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Consolidated Balance Sheets (Unaudited)
         
September 30, 2014   June 30, 2014   March 31, 2014   December 31, 2013   September 30, 2013
ASSETS (In Thousands Except Share Data)
Cash and due from banks $ 37,237 $ 58,962 $ 50,000 $ 37,148 $ 37,220
Short-term investments   50,901     20,771     22,936     55,357     58,195  
Total cash and cash equivalents   88,138     79,733     72,936     92,505     95,415  
Investment securities available-for-sale 527,516 528,586 527,073 492,428 480,402
Investment securities held-to-maturity   500     500     500     500     500  
Total investment securities   528,016     529,086     527,573     492,928     480,902  
Loans and leases held-for-sale 464 13,890 177 13,372 200
Loans and leases:
Commercial real estate loans:
Commercial real estate mortgage 1,610,592 1,545,483 1,505,674 1,461,985 1,400,769
Multi-family mortgage 630,852 631,371 632,122 627,933 599,601
Construction   161,279     137,731     136,679     113,705     118,090  
Total commercial real estate loans   2,402,723     2,314,585     2,274,475     2,203,623     2,118,460  
Commercial loans and leases:
Commercial 495,712 478,856 437,957 407,792 409,376
Equipment financing 576,541 552,489 529,670 513,024 513,345
Condominium association   49,600     45,608     43,810     44,794     43,205  
Total commercial loans and leases   1,121,853     1,076,953     1,011,437     965,610     965,926  
Indirect automobile loans   353,263     376,314     373,965     400,531     440,949  
Consumer loans:
Residential mortgage 570,128 550,814 530,347 528,185 511,835
Home equity 274,762 270,203 261,836 257,461 254,888
Other consumer   13,299     15,044     9,937     7,055     7,419  
Total consumer loans   858,189     836,061     802,120     792,701     774,142  
Total loans and leases 4,736,028 4,603,913 4,461,997 4,362,465 4,299,477
Allowance for loan and lease losses   (52,822 )   (51,686 )   (50,224 )   (48,473 )   (46,390 )
Net loans and leases   4,683,206     4,552,227     4,411,773     4,313,992     4,253,087  
Restricted equity securities 74,804 71,446 66,559 66,559 66,627
Premises and equipment, net of accumulated depreciation 81,479 82,166 81,396 80,505 79,504
Deferred tax asset 29,168 27,799 29,319 31,710 34,322
Goodwill 137,890 137,890 137,890 137,890 137,890
Identified intangible assets, net of accumulated amortization 14,371 15,199 16,026 16,887 18,015
Other real estate owned and repossessed assets 2,463 1,246 1,290 1,578 1,319
Other assets   77,966     76,804     73,846     77,180     68,948  
Total assets $ 5,717,965   $ 5,587,486   $ 5,418,785   $ 5,325,106   $ 5,236,229  
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Non-interest-bearing deposits:
Demand checking accounts $ 705,604 $ 716,883 $ 682,383 $ 707,023 $ 667,181
Interest-bearing deposits:
NOW accounts 220,766 209,682 212,877 210,602 204,164
Savings accounts 532,790 518,343 517,327 494,734 512,393
Money market accounts 1,522,612 1,516,023 1,517,290 1,487,979 1,403,881
Certificate of deposit accounts   907,432     900,216     917,773     934,668     950,359  
Total interest-bearing deposits   3,183,600     3,144,264     3,165,267     3,127,983     3,070,797  
Total deposits   3,889,204     3,861,147     3,847,650     3,835,006     3,737,978  
Borrowed funds:
Advances from the FHLBB 1,027,211 1,005,644 855,915 768,773 784,740
Subordinated debentures and notes 82,763 9,201 9,182 9,163 9,143
Other borrowed funds   22,891     26,159     26,919     34,619     34,919  
Total borrowed funds   1,132,865     1,041,004     892,016     812,555     828,802  
Mortgagors' escrow accounts 8,757 8,359 8,696 7,889 8,008
Accrued expenses and other liabilities   50,430     45,411     45,703     51,485     42,820  
Total liabilities   5,081,256     4,955,921     4,794,065     4,706,935     4,617,608  
Stockholders' equity:
Brookline Bancorp, Inc. stockholders' equity:
Common stock, $0.01 par value; 200,000,000 shares authorized; 75,744,445 shares issued 757 757 757 757 757
Additional paid-in capital 616,997 617,709 617,978 617,538 616,968
Retained earnings, partially restricted 78,980 73,373 69,361 64,903 63,210
Accumulated other comprehensive (loss) income (4,681 ) (3,209 ) (5,936 ) (7,915 ) (4,900 )
Treasury stock, at cost;
5,035,956 shares, 5,144,807 shares, 5,171,985 shares, 5,171,985 shares, and 5,154,327 shares, respectively (58,228 ) (59,487 ) (59,826 ) (59,826 ) (59,576 )
Unallocated common stock held by ESOP;
261,453 shares, 271,524 shares, 281,595 shares, 291,666 shares, and 302,229 shares, respectively   (1,425 )   (1,480 )   (1,535 )   (1,590 )   (1,648 )
Total Brookline Bancorp, Inc. stockholders' equity   632,400     627,663     620,799     613,867     614,811  
Noncontrolling interest in subsidiary   4,309     3,902     3,921     4,304     3,810  
Total stockholders' equity   636,709     631,565     624,720     618,171     618,621  
Total liabilities and stockholders' equity $ 5,717,965   $ 5,587,486   $ 5,418,785   $ 5,325,106   $ 5,236,229  
 

BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Consolidated Statements of Income (Unaudited)
 
  Three Months Ended
September 30, 2014   June 30, 2014   March 31, 2014   December 31, 2013   September 30, 2013
(In Thousands Except Share Data)
Interest and dividend income:
Loans and leases $ 51,769 $ 50,433 $ 51,942 $ 48,573 $ 48,462
Debt securities 2,312 2,360 2,259 2,136 2,041
Marketable and restricted equity securities 520 539 449 301 298
Short-term investments   15     14     44     39     22  
Total interest and dividend income   54,616     53,346     54,694     51,049     50,823  
Interest expense:
Deposits 4,248 4,201 4,291 4,559 4,637
Borrowed funds   3,044     2,711     2,669     2,716     2,774  
Total interest expense   7,292     6,912     6,960     7,275     7,411  
Net interest income 47,324 46,434 47,734 43,774 43,412
Provision for credit losses   2,034     2,276     2,443     3,887     2,748  
Net interest income after provision for credit losses   45,290     44,158     45,291     39,887     40,664  
Non-interest income:
Deposit fees 2,352 2,204 1,959 2,188 1,989
Loan fees 601 124 436 474 296
Loss from investments in affordable housing projects (543 ) (539 ) (504 ) (318 ) (558 )
Gain on sales of loans and leases held-for-sale 538 54 602 11 116
Other 1,298 1,466 1,121 1,155 1,592
(Loss)/gain on sales of securities, net (13 ) 397
(Loss)/gain on sale/disposals of premises and equipment, net (2 ) (6 ) 1,510 21
Litigation settlement   1,412                  
Total non-interest income   5,656     3,290     5,124     3,907     3,456  
Non-interest expense:
Compensation and employee benefits 18,258 17,295 18,032 16,675 15,589
Occupancy 3,334 3,154 4,405 3,356 3,312
Equipment and data processing 4,193 4,348 4,377 4,476 4,061
Professional services 1,001 1,487 1,727 1,352 1,329
FDIC insurance 873 847 860 724 508
Advertising and marketing 745 776 665 807 758
Amortization of identified intangible assets 828 827 861 1,127 1,154
Other   2,692     2,488     2,649     2,803     2,845  
Total non-interest expense   31,924     31,222     33,576     31,320     29,556  
Income before provision for income taxes 19,022 16,226 16,839 12,474 14,564
Provision for income taxes   6,779     5,774     5,995     4,325     4,645  
Net income before noncontrolling interest in subsidiary 12,243 10,452 10,844 8,149 9,919
Less net income attributable to noncontrolling interest in subsidiary   662     476     422     495     490  
Net income attributable to Brookline Bancorp, Inc. $ 11,581   $ 9,976   $ 10,422   $ 7,654   $ 9,429  
Earnings per common share:
Basic $ 0.17 $ 0.14 $ 0.15 $ 0.11 $ 0.14
Diluted $ 0.17 $ 0.14 $ 0.15 $ 0.11 $ 0.13
Weighted average common shares outstanding during the period:
Basic 69,989,909 69,886,576 69,875,473 69,862,175 69,830,953
Diluted 70,088,987 70,012,377 69,983,999 69,951,683 69,913,765
Dividends declared per common share $ 0.085 $ 0.085 $ 0.085 $ 0.085 $ 0.085
 

BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Consolidated Statements of Income (Unaudited)
   
Nine Months Ended September 30,
2014 2013
(In Thousands Except Share Data)
Interest and dividend income:
Loans and leases $ 154,144 $ 148,525
Debt securities 6,931 5,827
Marketable and restricted equity securities 1,508 911
Short-term investments   73     72  
Total interest and dividend income   162,656     155,335  
Interest expense:
Deposits 12,740 14,214
Borrowed funds   8,424     8,677  
Total interest expense   21,164     22,891  
Net interest income 141,492 132,444
Provision for credit losses   6,753     7,042  
Net interest income after provision for credit losses   134,739     125,402  
Non-interest income:
Deposit Fees 6,515 5,984
Loan Fees 1,229 1,127
Loss from investments in affordable housing projects (1,586 ) (1,494 )
Gain on sales of loans and leases held-for-sale 1,194 597
Other 3,817 3,708
Loss on sales of securities, net (13 )
Gain on sale/disposals of premises and equipment, net 1,502
Litigation settlement   1,412      
Total non-interest income   14,070     9,922  
Non-interest expense:
Compensation and employee benefits 53,585 48,586
Occupancy 10,893 9,260
Equipment and data processing 12,918 12,423
Professional services 4,215 4,343
FDIC insurance 2,580 2,378
Advertising and marketing 2,186 2,196
Amortization of identified intangible assets 2,516 3,496
Other   7,829     8,462  
Total non-interest expense   96,722     91,144  
Income before provision for income taxes 52,087 44,180
Provision for income taxes   18,548     15,156  
Net income before noncontrolling interest in subsidiary 33,539 29,024
Less net income attributable to noncontrolling interest in subsidiary   1,560     1,292  
Net income attributable to Brookline Bancorp, Inc. $ 31,979   $ 27,732  
Earnings per common share:
Basic $ 0.46 $ 0.40
Diluted $ 0.46 $ 0.40
Weighted average common shares outstanding during the period:
Basic 69,918,248 69,789,737
Diluted 70,029,383 69,860,722
Dividends declared per common share $ 0.255 $ 0.255
 

BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Asset Quality Analysis (Unaudited)
         
At and for the Three Months Ended

September 30,2014
 

June 30,2014
 

March 31,2014
 

December 31,2013
 

September 30,2013
(Dollars in Thousands)
NONPERFORMING ASSETS:
Loans and leases accounted for on a nonaccrual basis:
Commercial real estate mortgage $ 3,174 $ 3,011 $ 1,814 $ 1,098 $ 1,137
Multi-family mortgage 299 664
Construction                    
Total commercial real estate loans 3,473 3,011 1,814 1,098 1,801
 
Commercial 6,071 6,383 6,350 6,148 4,747
Equipment financing 2,756 3,251 4,633 4,115 4,116
Condominium association               1     3  
Total commercial loans and leases 8,827 9,634 10,983 10,264 8,866
 
Indirect automobile loans 474 325 378 259 195
 
Residential mortgage 2,636 2,384 3,138 2,875 2,738
Home equity 1,865 1,771 1,799 1,987 1,801
Other consumer   47     36     28     18     18  
Total consumer loans 4,548 4,191 4,965 4,880 4,557
         
Total nonaccrual loans and leases 17,322 17,161 18,140 16,501 15,419
 
Other real estate owned 1,536 675 855 577 726
Other repossessed assets   927     571     435     1,001     593  
Total nonperforming assets $ 19,785   $ 18,407   $ 19,430   $ 18,079   $ 16,738  
 
Loans and leases past due greater than 90 days and still accruing $ 3,919   $ 6,653   $ 7,774   $ 10,913   $ 13,548  
 
Troubled debt restructurings on accrual 15,174 12,396 11,532 12,759 12,158
Troubled debt restructurings on nonaccrual   5,609     5,992     6,764     5,589     5,905  
Total troubled debt restructurings $ 20,783   $ 18,388   $ 18,296   $ 18,348   $ 18,063  
 
Nonperforming loans and leases as a percentage of total loans and leases 0.37 % 0.37 % 0.41 % 0.38 % 0.36 %
Nonperforming assets as a percentage of total assets 0.35 % 0.33 % 0.36 % 0.34 % 0.32 %
 
PROVISION AND ALLOWANCE FOR LOAN AND LEASE LOSSES:
Allowance for loan and lease losses at beginning of period $ 51,686 $ 50,224 $ 48,473 $ 46,390 $ 44,281
Charge-offs (1,136 ) (1,196 ) (1,050 ) (2,193 ) (903 )
Recoveries   343     476     384     517     282  
Net charge-offs (793 ) (720 ) (666 ) (1,676 ) (621 )
Provision for loan and lease losses   1,929     2,182     2,417     3,759     2,730  
Allowance for loan and lease losses at end of period $ 52,822   $ 51,686   $ 50,224   $ 48,473   $ 46,390  
 
Allowance for loan and lease losses as a percentage of total loans and leases 1.12 % 1.12 % 1.13 % 1.11 % 1.08 %
Allowance for loan and lease losses related to originated loans and leases as a percentage of originated loans and leases 1.26 % 1.31 % 1.33 % 1.32 % 1.31 %
 
NET CHARGE-OFFS:
Commercial real estate loans $ 64 $ $ $ (9 ) $ 7
Commercial loans and leases 348 578 300 803 157
Indirect automobile loans 208 55 185 419 396
Consumer loans   173     87     181     463     61  
Total net charge-offs $ 793   $ 720   $ 666   $ 1,676   $ 621  
 
Net loan and lease charge-offs as a percentage of average loans and leases (annualized) 0.07 % 0.06 % 0.06 % 0.16 % 0.06 %
 

BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Average Yields / Costs (Unaudited)
                 
Three Months Ended
September 30, 2014 June 30, 2014 September 30, 2013
Average Balance Interest (1)

AverageYield/ Cost
Average Balance Interest (1)

AverageYield/ Cost
Average Balance Interest (1)

AverageYield/ Cost
(Dollars in Thousands)
Assets:
Interest-earning assets:
Investments:
Debt securities (2) $ 523,853 $ 2,312 1.77 % $ 527,411 $ 2,360 1.79 % $ 475,506 $ 2,047 1.72 %
Marketable and restricted equity securities (2) 74,035 567 3.05 % 68,543 602 3.52 % 66,995 346 2.06 %
Short-term investments   42,421     15 0.14 %   36,850     14 0.16 %   69,272     22 0.13 %
Total investments   640,309     2,894 1.81 %   632,804     2,976 1.88 %   611,773     2,415 1.58 %
Loans and Leases:
Commercial real estate loans (3) 2,357,921 25,984 4.37 % 2,288,018 25,395 4.42 % 2,088,450 24,021 4.56 %
Commercial loans (3) 544,440 5,458 3.94 % 504,572 5,246 4.12 % 442,052 4,493 3.99 %
Equipment financing (3) 563,918 9,664 6.84 % 541,029 9,155 6.77 % 489,127 8,343 6.79 %
Indirect automobile loans (3) 371,123 2,929 3.13 % 374,489 3,032 3.25 % 460,927 4,172 3.59 %
Residential mortgage loans (3) 570,505 5,087 3.54 % 532,310 4,918 3.70 % 507,616 4,866 3.81 %
Other consumer loans (3)   284,206     2,818 3.93 %   277,802     2,833 4.09 %   262,442     2,762 4.17 %
Total loans and leases   4,692,113     51,940 4.39 %   4,518,220     50,579 4.46 %   4,250,614     48,657 4.54 %
Total interest-earning assets   5,332,422     54,834 4.08 %   5,151,024     53,555 4.15 %   4,862,387     51,072 4.16 %
Allowance for loan and lease losses (52,423 ) (50,809 ) (44,959 )
Non-interest-earning assets   373,893     373,235     382,155  
Total assets $ 5,653,892   $ 5,473,450   $ 5,199,583  
 
Liabilities and Stockholders' Equity:
Interest-bearing liabilities:
Deposits:
NOW accounts $ 211,940 $ 43 0.08 % $ 208,859 $ 42 0.08 % $ 198,643 $ 42 0.08 %
Savings accounts 513,912 299 0.23 % 523,773 303 0.23 % 512,205 315 0.24 %
Money market accounts 1,534,552 1,957 0.51 % 1,528,959 1,936 0.51 % 1,377,495 2,040 0.59 %
Certificates of deposit   900,751     1,949 0.86 %   901,272     1,920 0.85 %   957,494     2,240 0.93 %
Total interest-bearing deposits   3,161,155     4,248 0.53 %   3,162,863     4,201 0.53 %   3,045,837     4,637 0.60 %
Borrowings
Advances from the FHLBB 1,036,190 2,740 1.05 % 892,770 2,602 1.17 % 772,067 2,666 1.37 %
Subordinated debentures and notes 21,257 292 5.45 % 9,189 99 4.32 % 9,130 82 3.60 %
Other borrowed funds   25,385     12 0.18 %   25,938     10 0.16 %   35,196     26 0.28 %
Total borrowings   1,082,832     3,044 1.12 %   927,897     2,711 1.17 %   816,393     2,774 1.35 %
Total interest-bearing liabilities   4,243,987     7,292 0.68 %   4,090,760     6,912 0.68 %   3,862,230     7,411 0.76 %
Non-interest-bearing liabilities:
Demand checking accounts 725,110 712,961 675,907
Other non-interest-bearing liabilities   48,236     39,219     44,832  
Total liabilities 5,017,333 4,842,940 4,582,969
Brookline Bancorp, Inc. stockholders' equity 632,506 626,371 612,866
Noncontrolling interest in subsidiary   4,053     4,139     3,748  
Total liabilities and equity $ 5,653,892   $ 5,473,450   $ 5,199,583  
Net interest income (tax-equivalent basis) /Interest-rate spread (4) 47,542 3.40 % 46,643 3.47 % 43,661 3.40 %
Less adjustment of tax-exempt income   218   209   249
Net interest income $ 47,324 $ 46,434 $ 43,412
Net interest margin (5) 3.54 % 3.61 % 3.56 %
(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.
 

BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Average Yields / Costs (Unaudited)
           
Nine Months Ended
September 30, 2014 September 30, 2013
Average Balance Interest (1)

AverageYield/ Cost
Average Balance Interest (1)

AverageYield/ Cost
(Dollars in Thousands)
Assets:
Interest-earning assets:
Investments:
Debt securities (2) $ 518,031 $ 6,935 1.79 % $ 478,110 $ 5,841 1.63 %
Marketable and restricted equity securities (2) 69,869 1,666 3.18 % 67,506 1,056 2.09 %
Short-term investments   41,689     73 0.24 %   58,872     72 0.16 %
Total investments   629,589     8,674 1.84 %   604,488     6,969 1.54 %
Loans and Leases:
Commercial real estate loans (3) 2,291,952 77,081 4.46 % 2,041,834 72,190 4.69 %
Commercial loans (3) 507,612 15,397 4.01 % 424,904 15,796 4.91 %
Equipment financing (3) 543,691 29,856 7.33 % 465,217 24,418 7.01 %
Indirect automobile loans (3) 376,765 9,225 3.27 % 493,898 13,611 3.68 %
Residential mortgage loans (3) 545,275 14,814 3.63 % 509,728 15,132 3.97 %
Other consumer loans (3)   276,466     8,230 3.98 %   263,762     7,886 4.00 %
Total loans and leases   4,541,761     154,603 4.53 %   4,199,343     149,033 4.72 %
Total interest-earning assets   5,171,350     163,277 4.20 %   4,803,831     156,002 4.32 %
Allowance for loan and lease losses (50,785 ) (43,146 )
Non-interest-earning assets   366,994     375,074  
Total assets $ 5,487,559   $ 5,135,759  
 
Liabilities and Stockholders' Equity:
Interest-bearing liabilities:
Deposits:
NOW accounts $ 209,029 $ 126 0.08 % $ 194,775 $ 128 0.09 %
Savings accounts 515,433 905 0.23 % 511,672 975 0.25 %
Money market accounts 1,523,269 5,852 0.51 % 1,336,093 6,136 0.61 %
Certificates of deposit   909,647     5,857 0.86 %   980,628     6,975 0.95 %
Total interest-bearing deposits   3,157,378     12,740 0.54 %   3,023,168     14,214 0.63 %
Borrowings
Advances from the FHLBB 911,748 7,873 1.15 % 761,927 8,303 1.46 %
Subordinated debentures and notes 13,249 490 4.94 % 9,682 337 4.64 %
Other borrowed funds   26,849     61 0.30 %   41,259     37 0.12 %
Total borrowings   951,846     8,424 1.18 %   812,868     8,677 1.43 %
Total interest-bearing liabilities   4,109,224     21,164 0.69 %   3,836,036     22,891 0.80 %
Non-interest-bearing liabilities:
Demand checking accounts 702,411 641,749
Other non-interest-bearing liabilities   44,858     38,811  
Total liabilities 4,856,493 4,516,596
Brookline Bancorp, Inc. stockholders' equity 626,920 615,519
Noncontrolling interest in subsidiary   4,146     3,644  
Total liabilities and equity $ 5,487,559   $ 5,135,759  
Net interest income (tax-equivalent basis) /Interest-rate spread (4) 142,113 3.51 % 133,111 3.52 %
Less adjustment of tax-exempt income   621   667
Net interest income $ 141,492 $ 132,444
Net interest margin (5) 3.65 % 3.68 %
(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.
 

BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Non-GAAP Financial Information (Unaudited)
       
  At and for the Three Months Ended

September 30,2014
 

June 30,2014
 

March 31,2014
 

December 31,2013
 

September 30,2013
(Dollars in Thousands)
 
Net income, as reported $ 11,581   $ 9,976   $ 10,422   $ 7,654   $ 9,429  
 
Average total assets $ 5,653,892 $ 5,473,450 $ 5,361,717 $ 5,287,482 $ 5,199,583
Less: Average goodwill and average identified intangible assets, net   152,755     153,577       154,447       155,439       156,607  
Average tangible assets $ 5,501,137   $ 5,319,873     $ 5,207,270     $ 5,132,043     $ 5,042,976  
 
Return on average tangible assets (annualized) 0.84 % 0.75 % 0.80 % 0.60 % 0.75 %
 
Average total stockholders' equity $ 632,506 $ 626,371 $ 621,764 $ 618,385 $ 612,866
Less: Average goodwill and average identified intangible assets, net   152,755       153,577       154,447       155,439       156,607  
Average tangible stockholders' equity $ 479,751     $ 472,794     $ 467,317     $ 462,946     $ 456,259  
 
Return on average tangible stockholders' equity (annualized) 9.66 % 8.44 % 8.92 % 6.61 % 8.27 %
 
Brookline Bancorp, Inc. stockholders' equity $ 632,400 $ 627,663 $ 620,799 $ 613,867 $ 614,811
Less:
Goodwill 137,890 137,890 137,890 137,890 137,890
Identified intangible assets, net   14,371     15,199     16,026     16,887     18,015  
Tangible stockholders' equity $ 480,139   $ 474,574   $ 466,883   $ 459,090   $ 458,906  
 
Total assets $ 5,717,965 $ 5,587,486 $ 5,418,785 $ 5,325,106 $ 5,236,229
Less:
Goodwill 137,890 137,890 137,890 137,890 137,890
Identified intangible assets, net   14,371     15,199     16,026     16,887     18,015  
Tangible assets $ 5,565,704   $ 5,434,397   $ 5,264,869   $ 5,170,329   $ 5,080,324  
 
Tangible stockholders' equity to tangible assets 8.63 % 8.73 % 8.87 % 8.88 % 9.03 %
 
Tangible stockholders' equity $ 480,139   $ 474,574   $ 466,883   $ 459,090   $ 458,906  
 
Number of common shares issued 75,744,445 75,744,445 75,744,445 75,744,445 75,744,445
Less:
Treasury shares 5,035,956 5,144,807 5,171,985 5,171,985 5,154,327
Unallocated ESOP shares 261,453 271,524 281,595 291,666 302,229
Unvested restricted shares   427,952     434,459     408,651     409,068     429,818  
Number of common shares outstanding   70,019,084     69,893,655     69,882,214     69,871,726     69,858,071  
 
Tangible book value per common share $ 6.86 $ 6.79 $ 6.68 $ 6.57 $ 6.57
 
Allowance for loan and lease losses $ 52,822 $ 51,686 $ 50,224 $ 48,473 $ 46,390
Less:
Allowance for acquired loans and leases losses   1,933     1,247     1,403     1,629     1,278  
Allowance for originated loan and lease losses $ 50,889   $ 50,439   $ 48,821   $ 46,844   $ 45,112  
 
Total loans and leases $ 4,736,028 $ 4,603,913 $ 4,461,997 $ 4,362,465 $ 4,299,477
Less:
Total acquired loans and leases   709,404     747,106     779,747     815,412     865,708  
Total originated loans and leases $ 4,026,624   $ 3,856,807   $ 3,682,250   $ 3,547,053   $ 3,433,769  
 
Allowance for loan and lease losses related to originated loans and leases as a percentage of originated loans and leases 1.26 % 1.31 % 1.33 % 1.32 % 1.31 %

Copyright Business Wire 2010

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