Brookline Bancorp Announces Fourth Quarter Results

BOSTON, Jan. 25, 2017 (GLOBE NEWSWIRE) -- Brookline Bancorp, Inc. (NASDAQ:BRKL) (the "Company") today announced net income of $13.3 million, or $0.19 per basic and diluted share, for the fourth quarter of 2016, compared to $13.3 million, or $0.19 per basic and diluted share, for the fourth quarter of 2015.

For the year ended December 31, 2016, the Company reported net income of $52.4 million, or $0.74 per basic and diluted share, compared to $49.8 million, or $0.71 per basic and diluted share, for the year ended December 31, 2015.

Paul Perrault, President and Chief Executive Officer of the Company, stated: "We are very pleased to finish 2016 with over 5 percent year-to-year growth in earnings. We grew our loan balances by more than 8 percent and our demand deposits grew by 13 percent. Our asset quality remains stable and we continue to be well-capitalized. Looking towards 2017, the Company is solidly positioned to continue to grow and deliver consistent returns to our stockholders. I am grateful to all our employees who have demonstrated dedication and commitment in accomplishing these outstanding results."

BALANCE SHEET

Total assets at December 31, 2016 increased $57.8 million to $6.44 billion from $6.38 billion at September 30, 2016, and increased $395.8 million from $6.04 billion at December 31, 2015. The increase in total assets of 3.6 percent on an annualized basis during the fourth quarter of 2016 was driven by growth in loans and leases. At December 31, 2016, total loans and leases were $5.40 billion, representing an increase of $66.6 million from September 30, 2016, and an increase of $403.3 million from December 31, 2015. During the fourth quarter of 2016, total loans and leases grew 5.0 percent on an annualized basis. Solid loan growth continued in the commercial real estate and commercial loan and lease portfolios, which increased $59.7 million during the fourth quarter of 2016, or 5.5 percent on an annualized basis.

Investment securities at December 31, 2016 increased $9.4 million to $610.8 million, comprising 9.5 percent of total assets, as compared to $601.4 million, or 9.4 percent of total assets, at September 30, 2016, and increased approximately $3.8 million from $607.0 million, or 10.0 percent of total assets, at December 31, 2015.

Total deposits at December 31, 2016 increased $46.2 million to $4.61 billion from $4.56 billion at September 30, 2016 and increased $305.1 million from $4.31 billion at December 31, 2015. Core deposits, which consists of demand checking, NOW, savings, and money market accounts, increased $111.2 million from September 30, 2016 and increased $351.9 million from December 31, 2015. The average cost of interest bearing deposits decreased slightly to 55 basis points for the three months ended December 31, 2016 from 56 basis points for the three months ended September 30, 2016.

Total borrowings at December 31, 2016 increased $21.4 million to $1.04 billion from $1.02 billion at September 30, 2016 and increased $61.1 million from $983.0 million at December 31, 2015.

The ratio of stockholders' equity to total assets was 10.80 percent at December 31, 2016, as compared to 10.91 percent at September 30, 2016, and 11.05 percent at December 31, 2015, respectively. The ratio of tangible stockholders' equity to tangible assets was 8.73 percent at December 31, 2016, as compared to 8.82 percent at September 30, 2016, and 8.81 percent at December 31, 2015.

NET INTEREST INCOME

Net interest income decreased $0.5 million to $51.9 million during the fourth quarter of 2016 from the quarter ended September 30, 2016, largely as a result of a $1.0 million decrease in accretion related to acquired loans and prepayment fees partially offset by asset growth. The net interest margin decreased 8 basis points to 340 basis points for the three months ended December 31, 2016.

PROVISION FOR CREDIT LOSSES

The Company recorded a provision for credit losses of $3.2 million for the quarter ended December 31, 2016, compared to $2.2 million for the quarter ended September 30, 2016.

Net charge-offs for the fourth quarter of 2016 were $8.3 million compared to $0.5 million in the third quarter. The Company charged off $6.1 million of loans with previously established specific reserves of which $4.5 million primarily related to taxi medallion loans. The Company still believes the taxi industry remains under pressure from application-based mobile ride services. The remaining $2.2 million in net charge-offs were related to originated and acquired loans that deteriorated in the fourth quarter. As a result, the ratio of net charge-offs to average loans on an annualized basis increased to 62 basis points for the fourth quarter of 2016 from 4 basis points for the third quarter of 2016. Net charge-offs as a percent of average total loans was 25 basis points in 2016 compared to 9 basis points in 2015.

The allowance for loan and lease losses represented 0.99 percent of total loans and leases at December 31, 2016, compared to 1.10 percent at September 30, 2016, and 1.14 percent at December 31, 2015. The allowance for loan and lease losses related to originated loans and leases represented 1.03 percent of originated loans and leases at December 31, 2016, compared to 1.15 percent at September 30, 2016, and 1.20 percent at December 31, 2015. The decrease in the ratios for the allowance for loan and lease losses to total loans and leases is due to the charge-off of loans which had a specific reserve as of September 30, 2016. 

NON-INTEREST INCOME

Non-interest income for the quarter ended December 31, 2016 increased $0.1 million to $5.4 million from $5.3 million for the quarter ended September 30, 2016, primarily driven by a decrease of $0.6 million in loan level derivative income offset by an increase of $0.7 million in gain on sales of loans and leases held-for-sale.

NON-INTEREST EXPENSE

Non-interest expense for the quarter ended December 31, 2016 decreased $0.8 million to $32.6 million from $33.4 million for the quarter ended September 30, 2016 primarily driven by a decrease of $0.7 million in compensation and employee benefits, a decrease of $0.3 million in FDIC insurance, and a decrease of $0.1 million in professional services offset by an increase of $0.2 million in equipment and data processing expense and an increase of $0.1 million in occupancy costs.

The Company's efficiency ratio was 56.9 percent at December 31, 2016, compared with 57.9 percent at September 30, 2016.

PROVISION FOR INCOME TAXES

The effective tax rate was 35.1 percent and 35.5 percent for the three months and twelve months ended December 31, 2016, respectively. Although there was no impact to the effective tax rate in the fourth quarter, the net charge-offs recorded in the fourth quarter monetize a portion of our deferred tax asset in 2016.

RETURNS ON AVERAGE ASSETS AND AVERAGE EQUITY

The return on average assets decreased during the fourth quarter of 2016 to 0.83 percent at December 31, 2016 from 0.86 percent at September 30, 2016. The return on average assets decreased to 0.83 percent for the year ended December 31, 2016, compared to 0.85 percent for the year ended December 31, 2015. The return on average tangible assets decreased to 0.85 percent for the fourth quarter of 2016 from 0.88 percent for the third quarter of 2016. The return on average tangible assets decreased to 0.85 percent for the year ended December 31, 2016, compared to 0.87 percent for the year ended December 31, 2015. 

The return on average stockholders' equity decreased during the fourth quarter of 2016 to 7.59 percent from 7.83 percent for the third quarter of 2016. The return on average tangible stockholders' equity decreased to 9.60 percent for the fourth quarter of 2016 from 9.94 percent for the third quarter of 2016. The return on average stockholders' equity increased to 7.59 percent for the year ended December 31, 2016, compared to 7.57 percent for the year ended December 31, 2015. The return on average tangible stockholders' equity decreased to 9.66 percent for the year ended December 31, 2016, compared to 9.80 percent for the year ended December 31, 2015.

ASSET QUALITY

The ratio of nonperforming loans and leases to total loans and leases was 0.74 percent at December 31, 2016 as compared to 0.70 percent at September 30, 2016. Nonperforming loans and leases increased $2.5 million to $40.1 million at December 31, 2016 from $37.6 million at September 30, 2016. Nonperforming assets at December 31, 2016 increased $2.8 million to $41.5 million, or 0.64 percent of total assets, from $38.7 million, or 0.61 percent of total assets, at September 30, 2016. The increases were primarily driven by commercial real estate nonperforming loans.

DIVIDEND DECLARED

The Company's Board of Directors approved a dividend of $0.09 per share for the quarter ended December 31, 2016. The dividend will be paid on February 24, 2017 to stockholders of record on February 10, 2017.

CONFERENCE CALL

The Company will conduct a conference call/webcast at 1:30 PM Eastern Daylight Time on Thursday, January 26, 2017 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 10099570. 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 $6.4 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 "banks"). The Company provides commercial and retail banking services, cash management and investment services to customers throughout Central New England. More information about Brookline Bancorp, Inc. and its banks can be found at the following websites: www.brooklinebank.com,  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, 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.

Contact:            Carl M. CarlsonBrookline Bancorp, Inc.Chief Financial Officer(617) 425-5331 ccarlson@brkl.com 
BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Selected Financial Highlights (Unaudited)
 
  At and for the Three Months Ended   At and For the Twelve Months Ended
  December 31, 2016   September 30, 2016   June 30, 2016   March 31, 2016   December 31, 2015   December 31, 2016   December 31, 2015
  (Dollars In Thousands Except per Share Data)
Earnings Data:                          
Net interest income $ 51,854     $ 52,350     $ 50,257     $ 49,203     $ 50,078     $ 203,664     $ 194,365  
Provision for credit losses   3,215       2,215       2,545       2,378       1,520       10,353       7,451  
Non-interest income   5,430       5,329       5,375       6,469       6,063       22,667       20,184  
Non-interest expense   32,607       33,388       32,250       32,053       32,329       130,362       125,377  
Income before provision for income taxes   21,462       22,076       20,837       21,241       22,292       85,616       81,721  
Net income attributable to Brookline Bancorp, Inc.   13,279       13,617       12,654       12,812       13,327       52,362       49,782  
                           
Performance Ratios:                          
Net interest margin (1)   3.40 %     3.48 %     3.44 %     3.45 %     3.54 %     3.44 %     3.54 %
Interest-rate spread (1)   3.24 %     3.32 %     3.25 %     3.26 %     3.42 %     3.27 %     3.37 %
Return on average assets   0.83 %     0.86 %     0.81 %     0.84 %     0.89 %     0.83 %     0.85 %
Return on average tangible assets (non-GAAP)   0.85 %     0.88 %     0.83 %     0.86 %     0.92 %     0.85 %     0.87 %
Return on average stockholders' equity   7.59 %     7.83 %     7.38 %     7.57 %     7.99 %     7.59 %     7.57 %
Return on average tangible stockholders' equity (non-GAAP)   9.60 %     9.94 %     9.40 %     9.69 %     10.28 %     9.66 %     9.80 %
Efficiency ratio (2)   56.92 %     57.89 %     57.97 %     57.57 %     57.59 %     57.60 %     58.44 %
                           
Per Common Share Data:                          
Net income — Basic $ 0.19     $ 0.19     $ 0.18     $ 0.18     $ 0.19     $ 0.74     $ 0.71  
Net income — Diluted   0.19       0.19       0.18       0.18       0.19       0.74       0.71  
Cash dividends declared   0.090       0.090       0.090       0.090       0.090       0.360       0.355  
Book value per share (end of period)   9.88       9.90       9.82       9.69       9.51       9.88       9.51  
Tangible book value per share (end of period) (non-GAAP)   7.81       7.81       7.73       7.59       7.39       7.81       7.39  
Stock price (end of period)   16.40       12.19       11.03       11.01       11.50       16.40       11.50  
 
Balance Sheet:                          
Total assets $ 6,438,129     $ 6,380,312     $ 6,296,502     $ 6,181,030     $ 6,042,338     $ 6,438,129     $ 6,042,338  
Total loans and leases   5,398,864       5,332,300       5,259,038       5,130,445       4,995,540       5,398,864       4,995,540  
Total deposits   4,611,076       4,564,906       4,485,154       4,393,456       4,306,018       4,611,076       4,306,018  
Brookline Bancorp, Inc. stockholders' equity   695,544       696,371       689,656       680,417       667,485       695,544       667,485  
                           
Asset Quality:                          
Nonperforming assets $ 41,476     $ 38,704     $ 33,809     $ 32,470     $ 20,676     $ 41,476     $ 20,676  
Nonperforming assets as a percentage of total assets   0.64 %     0.61 %     0.54 %     0.53 %     0.34 %     0.64 %     0.34 %
Allowance for loan and lease losses $ 53,666     $ 58,892     $ 57,258     $ 58,606     $ 56,739     $ 53,666     $ 56,739  
Allowance for loan and lease losses as a percentage of total loans and leases   0.99 %     1.10 %     1.09 %     1.14 %     1.14 %     0.99 %     1.14 %
Net loan and lease charge-offs $ 8,337     $ 520     $ 4,018     $ 400     $ 1,389     $ 13,275     $ 4,343  
Net loan and lease charge-offs as a percentage of average loans and leases (annualized)   0.62 %     0.04 %     0.31 %     0.03 %     0.11 %     0.25 %     0.09 %
                           
Capital Ratios:                          
Stockholders' equity to total assets   10.80 %     10.91 %     10.95 %     11.01 %     11.05 %     10.80 %     11.05 %
Tangible stockholders' equity to tangible assets (non-GAAP)   8.73 %     8.82 %     8.82 %     8.83 %     8.81 %     8.73 %     8.81 %
                           
(1) Calculated on a fully tax-equivalent basis.                          
(2) Calculated as non-interest expense as a percentage of net interest income plus non-interest income.                          
 

 
BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Consolidated Balance Sheets (Unaudited)
 
  December 31, 2016   September 30, 2016   June 30, 2016   March 31, 2016   December 31, 2015
ASSETS (In Thousands Except Share Data)
Cash and due from banks $ 36,055     $ 32,196     $ 22,677     $ 31,127     $ 28,753  
Short-term investments   31,602       32,351       47,265       42,795       46,736  
Total cash and cash equivalents   67,657       64,547       69,942       73,922       75,489  
Investment securities available-for-sale   523,634       524,295       532,967       536,182       513,201  
Investment securities held-to-maturity   87,120       77,094       69,590       83,409       93,757  
Total investment securities   610,754       601,389       602,557       619,591       606,958  
Loans and leases held-for-sale   13,078       21,109       1,585       3,190       13,383  
Loans and leases:                  
Commercial real estate loans:                  
Commercial real estate mortgage   2,050,382       2,038,477       1,974,289       1,958,057       1,875,592  
Multi-family mortgage   731,186       703,743       721,771       682,317       658,480  
Construction   136,999       141,208       144,463       126,024       130,322  
Total commercial real estate loans   2,918,567       2,883,428       2,840,523       2,766,398       2,664,394  
Commercial loans and leases:                  
Commercial   635,426       652,316       628,281       616,290       592,531  
Equipment financing   799,860       764,647       750,503       721,621       721,890  
Condominium association   60,122       53,903       61,962       60,728       59,875  
Total commercial loans and leases   1,495,408       1,470,866       1,440,746       1,398,639       1,374,296  
Indirect automobile loans   6,141       7,607       9,281       11,220       13,678  
Consumer loans:                  
Residential mortgage   624,349       617,065       624,423       617,501       616,449  
Home equity   342,241       340,954       333,527       318,859       314,553  
Other consumer   12,158       12,380       10,538       17,828       12,170  
Total consumer loans   978,748       970,399       968,488       954,188       943,172  
Total loans and leases   5,398,864       5,332,300       5,259,038       5,130,445       4,995,540  
Allowance for loan and lease losses   (53,666 )     (58,892 )     (57,258 )     (58,606 )     (56,739 )
Net loans and leases   5,345,198       5,273,408       5,201,780       5,071,839       4,938,801  
Restricted equity securities   64,511       65,683       64,677       65,438       66,117  
Premises and equipment, net of accumulated depreciation   76,176       75,462       76,131       77,128       78,156  
Deferred tax asset   25,247       22,894       22,301       24,181       26,817  
Goodwill   137,890       137,890       137,890       137,890       137,890  
Identified intangible assets, net of accumulated amortization   8,133       8,754       9,377       9,998       10,633  
Other real estate owned and repossessed assets   1,399       1,152       751       565       1,343  
Other assets   88,086       108,024       109,511       97,288       86,751  
Total assets $ 6,438,129     $ 6,380,312     $ 6,296,502     $ 6,181,030     $ 6,042,338  
LIABILITIES AND STOCKHOLDERS' EQUITY                  
Deposits:                  
Non-interest-bearing deposits:                  
Demand checking accounts $ 900,474     $ 889,278     $ 852,869     $ 793,195     $ 799,117  
Interest-bearing deposits:                  
NOW accounts   323,160       298,629       295,126       286,920       283,972  
Savings accounts   613,061       591,156       557,607       555,843       540,788  
Money market accounts   1,733,359       1,679,797       1,628,550       1,649,348       1,594,269  
Certificate of deposit accounts   1,041,022       1,106,046       1,151,002       1,108,150       1,087,872  
Total interest-bearing deposits   3,710,602       3,675,628       3,632,285       3,600,261       3,506,901  
Total deposits   4,611,076       4,564,906       4,485,154       4,393,456       4,306,018  
Borrowed funds:                  
Advances from the FHLBB   910,774       900,971       904,685       905,953       861,866  
Subordinated debentures and notes   83,105       83,043       83,021       82,978       82,936  
Other borrowed funds   50,207       38,639       40,733       39,378       38,227  
Total borrowed funds   1,044,086       1,022,653       1,028,439       1,028,309       983,029  
Mortgagors' escrow accounts   7,645       8,166       7,419       7,905       7,516  
Accrued expenses and other liabilities   72,573       81,670       79,541       64,566       72,289  
Total liabilities   5,735,380       5,677,395       5,600,553       5,494,236       5,368,852  
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   616,734       616,142       617,738       617,477       616,899  
Retained earnings, partially restricted   136,671       129,740       122,469       116,151       109,675  
Accumulated other comprehensive (loss) income   (3,818 )     4,896       5,969       3,352       (2,476 )
Treasury stock, at cost;                  
4,707,096 shares, 4,734,512 shares, 4,862,193 shares, 4,861,554 shares, and 4,861,554  shares, respectively   (53,837 )     (54,151 )     (56,215 )     (56,208 )     (56,208 )
Unallocated common stock held by the Employee Stock Ownership Plan;                  
176,688 shares, 185,787 shares, 194,880 shares, 203,973 shares, and 213,066 shares, respectively   (963 )     (1,013 )     (1,062 )     (1,112 )     (1,162 )
Total Brookline Bancorp, Inc. stockholders' equity   695,544       696,371       689,656       680,417       667,485  
Noncontrolling interest in subsidiary   7,205       6,546       6,293       6,377       6,001  
Total stockholders' equity   702,749       702,917       695,949       686,794       673,486  
Total liabilities and stockholders' equity $ 6,438,129     $ 6,380,312     $ 6,296,502     $ 6,181,030     $ 6,042,338  
                   

 
BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Consolidated Statements of Income (Unaudited)
 
  Three Months Ended
  December 31, 2016   September 30, 2016   June 30, 2016   March 31, 2016   December 31, 2015
  (In Thousands Except Share Data)
Interest and dividend income:                  
Loans and leases $ 57,247   $ 57,858   $ 55,369   $ 54,247   $ 54,814
Debt securities   2,881     2,822     3,075     2,932     2,936
Marketable and restricted equity securities   762     804     729     680     668
Short-term investments   93     47     63     39     30
Total interest and dividend income   60,983     61,531     59,236     57,898     58,448
Interest expense:                  
Deposits   5,195     5,112     5,018     4,745     4,554
Borrowed funds   3,934     4,069     3,961     3,950     3,816
Total interest expense   9,129     9,181     8,979     8,695     8,370
Net interest income   51,854     52,350     50,257     49,203     50,078
Provision for credit losses   3,215     2,215     2,545     2,378     1,520
Net interest income after provision for credit losses   48,639     50,135     47,712     46,825     48,558
Non-interest income:                  
Deposit fees   2,263     2,289     2,216     2,145     2,208
Loan fees   322     330     287     330     364
Loan level derivative income, net   265     858     1,210     1,629     1,556
Gain on sales of loans and leases held-for-sale   1,270     588     345     905     614
Other   1,310     1,264     1,317     1,460     1,321
Total non-interest income   5,430     5,329     5,375     6,469     6,063
Non-interest expense:                  
Compensation and employee benefits   19,657     20,369     19,083     18,727     18,788
Occupancy   3,520     3,411     3,391     3,526     3,482
Equipment and data processing   4,028     3,826     3,898     3,714     3,537
Professional services   927     997     962     966     951
FDIC insurance   655     956     843     878     883
Advertising and marketing   823     844     853     861     903
Amortization of identified intangible assets   621     623     621     635     724
Other   2,376     2,362     2,599     2,746     3,061
Total non-interest expense   32,607     33,388     32,250     32,053     32,329
Income before provision for income taxes   21,462     22,076     20,837     21,241     22,292
Provision for income taxes   7,524     7,804     7,465     7,599     8,237
Net income before noncontrolling interest in subsidiary   13,938     14,272     13,372     13,642     14,055
Less net income attributable to noncontrolling interest in subsidiary   659     655     718     830     728
Net income attributable to Brookline Bancorp, Inc. $ 13,279   $ 13,617   $ 12,654   $ 12,812   $ 13,327
Earnings per common share:                  
Basic $ 0.19   $ 0.19   $ 0.18   $ 0.18   $ 0.19
Diluted $ 0.19   $ 0.19   $ 0.18   $ 0.18   $ 0.19
Weighted average common shares outstanding during the period:                
Basic   70,362,702     70,299,722     70,196,950     70,186,921     70,177,382
Diluted   70,592,204     70,450,760     70,388,438     70,343,408     70,318,657
Dividends declared per common share $ 0.090   $ 0.090   $ 0.090   $ 0.090   $ 0.090
                   
 

 
BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Consolidated Statements of Income (Unaudited)
   
  Twelve Months Ended December 31,
    2016     2015
  (In Thousands Except Share Data)
Interest and dividend income:      
Loans and leases $ 224,721   $ 212,604
Debt securities   11,710     11,416
Marketable and restricted equity securities   2,975     2,762
Short-term investments   242     128
Total interest and dividend income   239,648     226,910
Interest expense:      
Deposits   20,070     17,480
Borrowed funds   15,914     15,065
Total interest expense   35,984     32,545
Net interest income   203,664     194,365
Provision for credit losses   10,353     7,451
Net interest income after provision for credit losses   193,311     186,914
Non-interest income:      
Deposit Fees   8,913     8,730
Loan Fees   1,299     1,186
Loan level derivative income, net   3,962     3,397
Gain on sales of loans and leases held-for-sale   3,256     2,208
Other   5,237     4,663
Total non-interest income   22,667     20,184
Non-interest expense:      
Compensation and employee benefits   77,836     71,272
Occupancy   13,882     13,926
Equipment and data processing   15,496     14,837
Professional services   3,852     4,192
FDIC insurance   3,332     3,510
Advertising and marketing   3,381     3,352
Amortization of identified intangible assets   2,500     2,911
Other   10,083     11,377
Total non-interest expense   130,362     125,377
Income before provision for income taxes   85,616     81,721
Provision for income taxes   30,392     29,353
Net income before noncontrolling interest in subsidiary   55,224     52,368
Less net income attributable to noncontrolling interest in subsidiary   2,862     2,586
Net income attributable to Brookline Bancorp, Inc. $ 52,362   $ 49,782
Earnings per common share:      
Basic $ 0.74   $ 0.71
Diluted $ 0.74   $ 0.71
Weighted average common shares outstanding during the period:    
Basic   70,261,954     70,098,561
Diluted   70,444,083     70,235,868
Dividends declared per common share $ 0.360   $ 0.355
 

 
BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Asset Quality Analysis (Unaudited)
  At and for the Three Months Ended
  December 31, 2016   September 30, 2016   June 30, 2016   March 31, 2016   December 31, 2015
  (Dollars in Thousands)
NONPERFORMING ASSETS:                  
Loans and leases accounted for on a nonaccrual basis:                  
Commercial real estate mortgage $ 5,340     $ 1,688     $ 2,408     $ 5,440     $ 5,482  
Multi-family mortgage   1,404       1,418       1,446       1,446       291  
Total commercial real estate loans   6,744       3,106       3,854       6,886       5,773  
                   
Commercial   22,974       24,051       17,944       15,050       6,264  
Equipment financing   6,758       6,652       6,947       5,391       2,610  
Total commercial loans and leases   29,732       30,703       24,891       20,441       8,874  
                   
Indirect automobile loans   137       179       248       308       675  
                   
Residential mortgage   2,501       1,749       2,048       2,132       2,225  
Home equity   951       1,780       1,976       2,104       1,757  
Other consumer   12       35       41       34       29  
Total consumer loans   3,464       3,564       4,065       4,270       4,011  
                   
Total nonaccrual loans and leases   40,077       37,552       33,058       31,905       19,333  
                   
Other real estate owned   618       367       407       408       729  
Other repossessed assets   781       785       344       157       614  
Total nonperforming assets $ 41,476     $ 38,704     $ 33,809     $ 32,470     $ 20,676  
                   
Loans and leases past due greater than 90 days and still accruing $ 7,077     $ 8,275     $ 4,151     $ 3,512     $ 8,690  
                   
Troubled debt restructurings on accrual   13,883       16,303       15,693       16,697       17,953  
Troubled debt restructurings on nonaccrual   11,919       15,715       15,621       14,614       4,965  
Total troubled debt restructurings $ 25,802     $ 32,018     $ 31,314     $ 31,311     $ 22,918  
                   
Nonperforming loans and leases as a percentage of total loans and leases   0.74 %     0.70 %     0.63 %     0.62 %     0.39 %
Nonperforming assets as a percentage of total assets   0.64 %     0.61 %     0.54 %     0.53 %     0.34 %
                   
PROVISION AND ALLOWANCE FOR LOAN AND LEASE LOSSES:            
Allowance for loan and lease losses at beginning of period $ 58,892     $ 57,258     $ 58,606     $ 56,739     $ 56,472  
Charge-offs   (8,629 )     (839 )     (4,324 )     (875 )     (1,929 )
Recoveries   292       319       306       475       540  
Net charge-offs   (8,337 )     (520 )     (4,018 )     (400 )     (1,389 )
Provision for loan and lease losses   3,111       2,154       2,670       2,267       1,656  
Allowance for loan and lease losses at end of period $ 53,666     $ 58,892     $ 57,258     $ 58,606     $ 56,739  
                   
Allowance for loan and lease losses as a percentage of total loans and leases   0.99 %     1.10 %     1.09 %     1.14 %     1.14 %
Allowance for loan and lease losses related to originated loans and leases as a percentage of originated loans and leases (non-GAAP)   1.03 %     1.15 %     1.13 %     1.20 %     1.20 %
                   
NET CHARGE-OFFS:                  
Commercial real estate loans $ 635     $ 50     $ 1,153     $ 331     $  
Commercial loans and leases   7,119       375       2,316       64       1,302  
Indirect automobile loans   (29 )     7       (15 )     13       3  
Consumer loans   612       88       564       (8 )     84  
Total net charge-offs $ 8,337     $ 520     $ 4,018     $ 400     $ 1,389  
                   
Net loan and lease charge-offs as a percentage of average loans and leases (annualized)   0.62 %     0.04 %     0.31 %     0.03 %     0.11 %
 

 
BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Average Yields / Costs (Unaudited)
 
  Three Months Ended
  December 31, 2016   September 30, 2016   December 31, 2015
  Average Balance   Interest (1)   Average Yield/ Cost   Average Balance   Interest (1)   Average Yield/ Cost   Average Balance   Interest (1)   Average Yield/ Cost
  (Dollars in Thousands)
Assets:                                  
Interest-earning assets:                                  
Investments:                                  
Debt securities (2) $ 606,569     $ 2,977   1.96 %   $ 604,394     $ 2,910   1.93 %   $ 601,590     $ 2,992   1.99 %
Marketable and restricted equity securities (2)   66,660       770   4.62 %     66,981       836   4.99 %     66,659       667   4.01 %
Short-term investments   78,053       93   0.48 %     36,273       47   0.51 %     54,514       30   0.22 %
Total investments   751,282       3,840   2.04 %     707,648       3,793   2.14 %     722,763       3,689   2.04 %
Loans and Leases:                                  
Commercial real estate loans (3)   2,888,967       28,896   3.91 %     2,872,733       29,470   4.10 %     2,603,238       27,072   4.16 %
Commercial loans (3)   702,273       7,079   3.95 %     717,265       7,130   3.90 %     656,760       7,119   4.25 %
Equipment financing (3)   777,324       12,527   6.45 %     759,622       12,189   6.42 %     698,049       11,831   6.78 %
Indirect automobile loans (3)   6,830       78   4.54 %     8,466       103   4.83 %     14,991       144   3.81 %
Residential mortgage loans (3)   627,650       5,512   3.51 %     620,741       5,513   3.55 %     619,959       5,450   3.52 %
Other consumer loans (3)   357,287       3,397   3.77 %     348,050       3,707   4.22 %     323,659       3,419   4.19 %
Total loans and leases   5,360,331       57,489   4.29 %     5,326,877       58,112   4.36 %     4,916,656       55,035   4.48 %
Total interest-earning assets   6,111,613       61,329   4.01 %     6,034,525       61,905   4.10 %     5,639,419       58,724   4.17 %
Allowance for loan and lease losses   (58,337 )             (58,032 )             (57,182 )        
Non-interest-earning assets   372,707               383,604               374,954          
Total assets $ 6,425,983             $ 6,360,097             $ 5,957,191          
                                   
Liabilities and Stockholders' Equity:                                  
Interest-bearing liabilities:                                  
Deposits:                                  
NOW accounts $ 307,450       53   0.07 %   $ 295,762       52   0.07 %   $ 263,893       47   0.07 %
Savings accounts   628,096       324   0.21 %     566,192       318   0.22 %     517,333       301   0.23 %
Money market accounts   1,717,989       2,002   0.46 %     1,678,937       1,905   0.45 %     1,608,959       1,762   0.43 %
Certificates of deposit   1,085,763       2,816   1.03 %     1,112,831       2,837   1.01 %     1,054,872       2,444   0.92 %
Total interest-bearing deposits   3,739,298       5,195   0.55 %     3,653,722       5,112   0.56 %     3,445,057       4,554   0.52 %
Borrowings                                  
Advances from the FHLBB   853,572       2,635   1.21 %     921,396       2,778   1.18 %     836,939       2,536   1.19 %
Subordinated debentures and notes   83,079       1,265   6.09 %     83,036       1,259   6.07 %     82,906       1,252   6.04 %
Other borrowed funds   46,991       34   0.28 %     46,417       32   0.27 %     33,459       28   0.33 %
Total borrowings   983,642       3,934   1.56 %     1,050,849       4,069   1.52 %     953,304       3,816   1.57 %
Total interest-bearing liabilities   4,722,940       9,129   0.77 %     4,704,571       9,181   0.78 %     4,398,361       8,370   0.75 %
Non-interest-bearing liabilities:                                  
Demand checking accounts   910,835               863,854               806,348          
Other non-interest-bearing liabilities   85,670               90,025               79,492          
Total liabilities   5,719,445               5,658,450               5,284,201          
Brookline Bancorp, Inc. stockholders' equity   699,749               695,205               667,471          
Noncontrolling interest in subsidiary   6,789               6,442               5,519          
Total liabilities and equity $ 6,425,983             $ 6,360,097             $ 5,957,191          
Net interest income (tax-equivalent basis) /Interest-rate spread (4)       52,200   3.24 %         52,724   3.32 %         50,354   3.42 %
Less adjustment of tax-exempt income       346             374             276    
Net interest income     $ 51,854           $ 52,350           $ 50,078    
Net interest margin (5)         3.40 %           3.48 %           3.54 %
                                   
(1) Tax-exempt income on debt securities, equity securities and revenue bonds included in commercial real estate loans is included on a tax-equivalent basis.
(2) Average balances include unrealized gains (losses) on investment securities. Dividend payments may not be consistent and average yield on equity securities may vary from month to month.
(3) Loans on nonaccrual status are included in the average balances.
(4) Interest rate spread represents the difference between the yield on interest-earning assets and the cost of interest-bearing liabilities.
(5) Net interest margin represents net interest income (tax-equivalent basis) divided by average interest-earning assets.
 

 
BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Average Yields / Costs (Unaudited)
  Twelve Months Ended
  December 31, 2016   December 31, 2015
  Average Balance   Interest (1)   Average Yield/ Cost   Average Balance   Interest (1)   Average Yield/ Cost
  (Dollars in Thousands)
Assets:                      
Interest-earning assets:                      
Investments:                      
Debt securities (2) $ 605,097     $ 12,055   1.99 %   $ 583,921     $ 11,521   1.97 %
Marketable and restricted equity securities (2)   66,738       3,017   4.52 %     73,808       2,793   3.78 %
Short-term investments   54,205       242   0.45 %     56,520       128   0.23 %
Total investments   726,040       15,314   2.11 %     714,249       14,442   2.02 %
Loans and Leases:                      
Commercial real estate loans (3)   2,811,487       113,910   3.99 %     2,529,566       106,447   4.21 %
Commercial loans (3)   695,057       27,509   3.90 %     636,084       26,590   4.13 %
Equipment financing (3)   748,626       48,217   6.44 %     650,376       44,468   6.84 %
Indirect automobile loans (3)   9,501       443   4.66 %     83,218       2,686   3.23 %
Residential mortgage loans (3)   624,994       22,217   3.55 %     600,072       21,455   3.58 %
Other consumer loans (3)   344,099       13,421   3.89 %     311,855       11,792   3.78 %
Total loans and leases   5,233,764       225,717   4.31 %     4,811,171       213,438   4.44 %
Total interest-earning assets   5,959,804       241,031   4.04 %     5,525,420       227,880   4.12 %
Allowance for loan and lease losses   (58,071 )             (55,950 )        
Non-interest-earning assets   377,989               371,279          
Total assets $ 6,279,722             $ 5,840,749          
                       
Liabilities and Stockholders' Equity:                      
Interest-bearing liabilities:                      
Deposits:                      
NOW accounts $ 294,318       209   0.07 %   $ 249,204       179   0.07 %
Savings accounts   578,855       1,322   0.23 %     532,496       1,094   0.21 %
Money market accounts   1,670,609       7,549   0.45 %     1,560,437       6,935   0.44 %
Certificates of deposit   1,102,110       10,990   1.00 %     1,045,328       9,272   0.89 %
Total interest-bearing deposits   3,645,892       20,070   0.55 %     3,387,465       17,480   0.52 %
Borrowings                      
Advances from the FHLBB   879,650       10,760   1.20 %     840,123       9,950   1.17 %
Subordinated debentures and notes   83,017       5,038   6.07 %     82,846       5,001   6.04 %
Other borrowed funds   43,533       116   0.27 %     34,468       114   0.33 %
Total borrowings   1,006,200       15,914   1.56 %     957,437       15,065   1.55 %
Total interest-bearing liabilities   4,652,092       35,984   0.77 %     4,344,902       32,545   0.75 %
Non-interest-bearing liabilities:                      
Demand checking accounts   849,672               770,045          
Other non-interest-bearing liabilities   82,073               62,914          
Total liabilities   5,583,837               5,177,861          
Brookline Bancorp, Inc. stockholders' equity   689,556               657,841          
Noncontrolling interest in subsidiary   6,329               5,047          
Total liabilities and equity $ 6,279,722             $ 5,840,749          
Net interest income (tax-equivalent basis) /Interest-rate spread (4)       205,047   3.27 %         195,335   3.37 %
Less adjustment of tax-exempt income       1,383             970    
Net interest income     $ 203,664           $ 194,365    
Net interest margin (5)         3.44 %           3.54 %
                       
(1) Tax-exempt income on debt securities, equity securities and revenue bonds included in commercial real estate loans is included on a tax-equivalent basis.
(2) Average balances include unrealized gains (losses) on investment securities. Dividend payments may not be consistent and average yield on equity securities may vary from month to month.
(3) Loans on nonaccrual status are included in the average balances.
(4) Interest rate spread represents the difference between the yield on interest-earning assets and the cost of interest-bearing liabilities.
(5) Net interest margin represents net interest income (tax-equivalent basis) divided by average interest-earning assets.
 

 
BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Non-GAAP Financial Information (Unaudited)
                           
  At and for the Three Months Ended   At and for the Twelve Months Ended
  December 31, 2016   September 30, 2016   June 30, 2016   March 31, 2016   December 31, 2015   December 31, 2016   December 31, 2015
  (Dollars in Thousands)
                           
Net income, as reported $ 13,279     $ 13,617     $ 12,654     $ 12,812     $ 13,327     $ 52,362     $ 49,782  
                           
Average total assets $ 6,425,983     $ 6,360,097     $ 6,237,463     $ 6,092,858     $ 5,957,191     $ 6,279,722     $ 5,840,749  
Less: Average goodwill and average identified intangible assets, net   146,382       146,997       147,619       148,248       148,930       147,308       150,020  
Average tangible assets $ 6,279,601     $ 6,213,100     $ 6,089,844     $ 5,944,610     $ 5,808,261     $ 6,132,414     $ 5,690,729  
                           
Return on average tangible assets (annualized)   0.85 %     0.88 %     0.83 %     0.86 %     0.92 %     0.85 %     0.87 %
                           
Average total stockholders' equity $ 699,749     $ 695,205     $ 685,996     $ 677,101     $ 667,471     $ 689,556     $ 657,841  
Less: Average goodwill and average identified intangible assets, net   146,382       146,997       147,619       148,248       148,930       147,308       150,020  
Average tangible stockholders' equity $ 553,367     $ 548,208     $ 538,377     $ 528,853     $ 518,541     $ 542,248     $ 507,821  
                           
Return on average tangible stockholders' equity (annualized)   9.60 %     9.94 %     9.40 %     9.69 %     10.28 %     9.66 %     9.80 %
                           
Brookline Bancorp, Inc. stockholders' equity $ 695,544     $ 696,371     $ 689,656     $ 680,417     $ 667,485     $ 695,544     $ 667,485  
Less:                          
Goodwill   137,890       137,890       137,890       137,890       137,890       137,890       137,890  
Identified intangible assets, net   8,133       8,754       9,377       9,998       10,633       8,133       10,633  
Tangible stockholders' equity $ 549,521     $ 549,727     $ 542,389     $ 532,529     $ 518,962     $ 549,521     $ 518,962  
                           
Total assets $ 6,438,129     $ 6,380,312     $ 6,296,502     $ 6,181,030     $ 6,042,338     $ 6,438,129     $ 6,042,338  
Less:                          
Goodwill   137,890       137,890       137,890       137,890       137,890       137,890       137,890  
Identified intangible assets, net   8,133       8,754       9,377       9,998       10,633       8,133       10,633  
Tangible assets $ 6,292,106     $ 6,233,668     $ 6,149,235     $ 6,033,142     $ 5,893,815     $ 6,292,106     $ 5,893,815  
                           
Tangible stockholders' equity to tangible assets   8.73 %     8.82 %     8.82 %     8.83 %     8.81 %     8.73 %     8.81 %
                           
Tangible stockholders' equity $ 549,521     $ 549,727     $ 542,389     $ 532,529     $ 518,962     $ 549,521     $ 518,962  
                           
Number of common shares issued   75,744,445       75,744,445       75,744,445       75,744,445       75,744,445       75,744,445       75,744,445  
Less:                          
Treasury shares   4,707,096       4,734,512       4,862,193       4,861,554       4,861,554       4,707,096       4,861,554  
Unallocated ESOP shares   176,688       185,787       194,880       203,973       213,066       176,688       213,066  
Unvested restricted shares   476,854       476,938       484,066       486,035       486,035       476,854       486,035  
Number of common shares outstanding   70,383,807       70,347,208       70,203,306       70,192,883       70,183,790       70,383,807       70,183,790  
                           
Tangible book value per common share $     7.81       $     7.81       $     7.73       $     7.59       $     7.39       $     7.81       $     7.39    
                           
Allowance for loan and lease losses $ 53,666     $ 58,892     $ 57,258     $ 58,606     $ 56,739     $ 53,666     $ 56,739  
Less:                          
Allowance for acquired loans and leases losses   1,253       1,640       2,178       1,938       1,752       1,253       1,752  
Allowance for originated loan and lease losses $ 52,413     $ 57,252     $ 55,080     $ 56,668     $ 54,987     $ 52,413     $ 54,987  
                           
Total loans and leases $ 5,398,864     $ 5,332,300     $ 5,259,038     $ 5,130,445     $ 4,995,540     $ 5,398,864     $ 4,995,540  
Less:                          
Total acquired loans and leases   315,304       346,377       371,986       395,782       422,652       315,304       422,652  
Total originated loans and leases $ 5,083,560     $ 4,985,923     $ 4,887,052     $ 4,734,663     $ 4,572,888     $ 5,083,560     $ 4,572,888  
                           
Allowance for loan and lease losses related to originated loans and leases as a percentage of originated loans and leases   1.03 %     1.15 %     1.13 %     1.20 %     1.20 %     1.03 %     1.20 %
   

 

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