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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. Carlson
Brookline 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 %

Source:Brookline Bancorp, Inc.