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Brookline Bancorp Announces Second Quarter Results

BOSTON, July 19, 2017 (GLOBE NEWSWIRE) -- Brookline Bancorp, Inc. (NASDAQ:BRKL) (the “Company”) today announced net income of $14.9 million, or $0.20 per basic and diluted share, for the second quarter of 2017, compared to $13.4 million, or $0.19 per basic and diluted share, for the first quarter of 2017, and $12.7 million, or $0.18 per basic and diluted share, for the second quarter of 2016.

“We are pleased to report record quarterly earnings of $14.9 million or $0.20 per share for the second quarter of 2017,” said Paul Perrault, President and Chief Executive Officer of the Company. “During the quarter, we generated steady growth in loans and deposits with a stable net interest margin. We look forward to continued success in the second half of 2017.”

BALANCE SHEET

Total assets at June 30, 2017 increased $160.3 million to $6.66 billion from $6.50 billion at March 31, 2017, and increased $361.6 million from $6.30 billion at June 30, 2016. At June 30, 2017, total loans and leases were $5.54 billion, representing an increase of $75.6 million from March 31, 2017, and an increase of $278.4 million from June 30, 2016. During the second quarter of 2017, total loans and leases increased 5.5 percent on an annualized basis.

Investment securities at June 30, 2017 increased $20.8 million to $649.9 million, comprising 9.8 percent of total assets, as compared to $629.1 million, or 9.7 percent of total assets, at March 31, 2017, and increased approximately $47.4 million from $602.6 million, or 9.6 percent of total assets, at June 30, 2016.

Total deposits at June 30, 2017 increased $57.5 million to $4.71 billion from $4.65 billion at March 31, 2017 and increased $224.3 million from $4.49 billion at June 30, 2016. Core deposits, which consists of demand checking, NOW, savings, and money market accounts, increased $28.6 million from March 31, 2017 and increased $255.7 million from June 30, 2016.

Total borrowings at June 30, 2017 increased $9.9 million to $1.07 billion from $1.06 billion at March 31, 2017 and increased $38.2 million from $1.03 billion at June 30, 2016.

On May 2, 2017 we issued 5,951,250 shares of common stock with net proceeds to the Company of approximately $82 million.

The ratio of stockholders’ equity to total assets was 11.95 percent at June 30, 2017, as compared to 10.83 percent at March 31, 2017, and 10.95 percent at June 30, 2016, respectively. The ratio of tangible stockholders’ equity to tangible assets was 9.99 percent at June 30, 2017, as compared to 8.79 percent at March 31, 2017, and 8.82 percent at June 30, 2016. Tangible book value per share increased $0.59 from $7.93 at March 31, 2017 to $8.52 at June 30, 2017.

NET INTEREST INCOME

Net interest income increased $2.5 million to $55.6 million during the second quarter of 2017 from the quarter ended March 31, 2017. The net interest margin increased 6 basis points to 3.59 percent for the three months ended June 30, 2017.

NON-INTEREST INCOME

Non-interest income for the quarter ended June 30, 2017 decreased $11.4 million to $4.5 million from $15.9 million for the quarter ended March 31, 2017, primarily due to the recognition of the gain of $11.4 million on the NRS investment in the prior quarter.

PROVISION FOR CREDIT LOSSES

The Company recorded a provision for credit losses of $0.9 million for the quarter ended June 30, 2017, compared to $13.4 million for the quarter ended March 31, 2017. The decrease in the provision for the quarter was primarily driven by a decrease of $12.3 million in specific and taxi medallion related reserves.

Net charge-offs for the second quarter of 2017 were $2.4 million compared to $1.0 million in the first quarter of 2017. The ratio of net charge-offs to average loans and leases on an annualized basis increased to 17 basis points for the second quarter of 2017 from 7 basis points for the first quarter of 2017. The increase in net charge offs was due primarily to two commercial relationships.

The allowance for loan and lease losses represented 1.17 percent of total loans and leases at June 30, 2017, compared to 1.21 percent at March 31, 2017, and 1.09 percent at June 30, 2016. The allowance for loan and lease losses related to originated loans and leases represented 1.20 percent of originated loans and leases at June 30, 2017, compared to 1.25 percent at March 31, 2017, and 1.13 percent at June 30, 2016. The decrease to the allowance for loan and lease losses coverage ratio was primarily driven by the charge off of the specific reserve on two commercial relationships during the second quarter of 2017.

NON-INTEREST EXPENSE

Non-interest expense for the quarter ended June 30, 2017 increased $1.0 million to $34.8 million from $33.8 million for the quarter ended March 31, 2017. The increase was primarily driven by an increase of $1.1 million in compensation and employee benefits, an increase of $0.1 million in equipment and data processing, offset by a decrease of $0.3 million in other non-interest expense. The efficiency ratio for the second quarter was 57.93% compared to 48.92% for the first quarter of 2017 and 57.97% for the second quarter of 2016. The efficiency ratio for the first quarter of 2017 was lower due to the gain on the NRS investment in that quarter.

PROVISION FOR INCOME TAXES

The effective tax rate was 35.9 percent for the three months and six months ended June 30, 2017.

RETURNS ON AVERAGE ASSETS AND AVERAGE EQUITY

The return on average assets of 0.91 percent increased during the second quarter of 2017 from 0.83 percent at March 31, 2017. The return on average tangible assets increased to 0.93 percent for the second quarter of 2017 from 0.85 percent for the first quarter of 2017.

The return on average stockholders' equity increased during the second quarter of 2017 to 7.76 percent from 7.58 percent for the first quarter of 2017. The return on average tangible stockholders’ equity increased to 9.58 percent for the second quarter of 2017 from 9.55 percent for the first quarter of 2017.

ASSET QUALITY

The ratio of nonperforming loans and leases to total loans and leases was 0.76 percent at June 30, 2017 as compared to 0.83 percent at March 31, 2017. Nonperforming loans and leases decreased $2.8 million to $42.3 million at June 30, 2017 from $45.1 million at March 31, 2017. Nonperforming assets at June 30, 2017 decreased $0.2 million to $47.1 million, or 0.71 percent of total assets, from $47.3 million, or 0.73 percent of total assets, at March 31, 2017.

DIVIDEND DECLARED

The Company’s Board of Directors approved a dividend of $0.09 per share for the quarter ended June 30, 2017. The dividend will be paid on August 25, 2017 to stockholders of record on August 11, 2017.

CONFERENCE CALL

The Company will conduct a conference call/webcast at 1:30 PM Eastern Daylight Time on Thursday, July 20, 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 10110050. 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 $6.7 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 "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
June 30,
2017
March 31,
2017
December 31,
2016
September 30,
2016
June 30,
2016
(Dollars In Thousands Except per Share Data)
Earnings Data:
Net interest income$55,583 $53,098 $51,854 $52,350 $50,257
Provision for credit losses 873 13,402 3,215 2,215 2,545
Non-interest income 4,477 15,908 5,430 5,329 5,375
Non-interest expense 34,795 33,756 32,607 33,388 32,250
Income before provision for income taxes 24,392 21,848 21,462 22,076 20,837
Net income attributable to Brookline Bancorp, Inc. 14,880 13,445 13,279 13,617 12,654
Performance Ratios:
Net interest margin (1) 3.59% 3.53% 3.40% 3.48% 3.44%
Interest-rate spread (1) 3.39% 3.29% 3.24% 3.32% 3.25%
Return on average assets (annualized) 0.91% 0.83% 0.83% 0.86% 0.81%
Return on average tangible assets (annualized) (non-GAAP) 0.93% 0.85% 0.85% 0.88% 0.83%
Return on average stockholders' equity (annualized) 7.76% 7.58% 7.59% 7.83% 7.38%
Return on average tangible stockholders' equity (annualized) (non-GAAP) 9.58% 9.55% 9.60% 9.94% 9.40%
Efficiency ratio (2) 57.93% 48.92% 56.92% 57.89% 57.97%
Per Common Share Data:
Net income — Basic$0.20 $0.19 $0.19 $0.19 $0.18
Net income — Diluted 0.20 0.19 0.19 0.19 0.18
Cash dividends declared 0.09 0.09 0.09 0.09 0.09
Book value per share (end of period) 10.42 10.00 9.88 9.90 9.82
Tangible book value per share (end of period) (non-GAAP) 8.52 7.93 7.81 7.81 7.73
Stock price (end of period) 14.60 15.65 16.40 12.19 11.03
Balance Sheet:
Total assets$6,658,067 $6,497,721 $6,438,129 $6,380,312 $6,296,502
Total loans and leases 5,537,406 5,461,779 5,398,864 5,332,300 5,259,038
Total deposits 4,709,419 4,651,903 4,611,076 4,564,906 4,485,154
Brookline Bancorp, Inc. stockholders’ equity 795,618 703,873 695,544 696,371 689,656
Asset Quality:
Nonperforming assets$47,140 $47,349 $41,476 $38,704 $33,809
Nonperforming assets as a percentage of total assets 0.71% 0.73% 0.64% 0.61% 0.54%
Allowance for loan and lease losses$64,521 $66,133 $53,666 $58,892 $57,258
Allowance for loan and lease losses as a percentage of total loans and leases 1.17% 1.21% 0.99% 1.10% 1.09%
Net loan and lease charge-offs$2,402 $995 $8,337 $520 $4,018
Net loan and lease charge-offs as a percentage of average loans and leases (annualized) 0.17% 0.07% 0.62% 0.04% 0.31%
Capital Ratios:
Stockholders’ equity to total assets 11.95% 10.83% 10.80% 10.91% 10.95%
Tangible stockholders’ equity to tangible assets (non-GAAP) 9.99% 8.79% 8.73% 8.82% 8.82%
(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)
June 30, 2017 March 31, 2017 December 31, 2016 September 30, 2016 June 30, 2016
ASSETS(In Thousands Except Share Data)
Cash and due from banks$40,599 $33,565 $36,055 $32,196 $22,677
Short-term investments 72,996 29,178 31,602 32,351 47,265
Total cash and cash equivalents 113,595 62,743 67,657 64,547 69,942
Investment securities available-for-sale 540,976 528,433 523,634 524,295 532,967
Investment securities held-to-maturity 108,963 100,691 87,120 77,094 69,590
Total investment securities 649,939 629,124 610,754 601,389 602,557
Loans and leases held-for-sale 593 1,152 13,078 21,109 1,585
Loans and leases:
Commercial real estate loans:
Commercial real estate mortgage 2,062,646 2,066,599 2,050,382 2,038,477 1,974,289
Multi-family mortgage 720,484 733,822 731,186 703,743 721,771
Construction 153,057 150,734 136,999 141,208 144,463
Total commercial real estate loans 2,936,187 2,951,155 2,918,567 2,883,428 2,840,523
Commercial loans and leases:
Commercial 691,070 644,240 635,426 652,316 628,281
Equipment financing 839,932 815,753 799,860 764,647 750,503
Condominium association 58,130 60,396 60,122 53,903 61,962
Total commercial loans and leases 1,589,132 1,520,389 1,495,408 1,470,866 1,440,746
Consumer loans:
Residential mortgage 646,679 631,863 624,349 617,065 624,423
Home equity 351,124 343,386 342,241 340,954 333,527
Other consumer 14,284 14,986 18,299 19,987 19,819
Total consumer loans 1,012,087 990,235 984,889 978,006 977,769
Total loans and leases 5,537,406 5,461,779 5,398,864 5,332,300 5,259,038
Allowance for loan and lease losses (64,521) (66,133) (53,666) (58,892) (57,258)
Net loans and leases 5,472,885 5,395,646 5,345,198 5,273,408 5,201,780
Restricted equity securities 66,988 68,065 64,511 65,683 64,677
Premises and equipment, net of accumulated depreciation 81,052 76,973 76,176 75,462 76,131
Deferred tax asset 26,982 29,859 25,247 22,894 22,301
Goodwill 137,890 137,890 137,890 137,890 137,890
Identified intangible assets, net of accumulated amortization 7,082 7,601 8,133 8,754 9,377
Other real estate owned and repossessed assets 4,873 2,286 1,399 1,152 751
Other assets 96,188 86,382 88,086 108,024 109,511
Total assets$6,658,067 $6,497,721 $6,438,129 $6,380,312 $6,296,502
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Non-interest-bearing deposits:
Demand checking accounts$920,035 $898,161 $900,474 $889,278 $852,869
Interest-bearing deposits:
NOW accounts 321,982 321,392 323,160 298,629 295,126
Savings accounts 584,408 575,808 613,061 591,156 557,607
Money market accounts 1,763,443 1,765,895 1,733,359 1,679,797 1,628,550
Certificate of deposit accounts 1,119,551 1,090,647 1,041,022 1,106,046 1,151,002
Total interest-bearing deposits 3,789,384 3,753,742 3,710,602 3,675,628 3,632,285
Total deposits 4,709,419 4,651,903 4,611,076 4,564,906 4,485,154
Borrowed funds:
Advances from the FHLBB 930,028 930,001 910,774 900,971 904,685
Subordinated debentures and notes 83,188 83,147 83,105 83,043 83,021
Other borrowed funds 53,427 43,637 50,207 38,639 40,733
Total borrowed funds 1,066,643 1,056,785 1,044,086 1,022,653 1,028,439
Mortgagors’ escrow accounts 7,714 8,032 7,645 8,166 7,419
Accrued expenses and other liabilities 71,232 69,752 72,573 81,670 79,541
Total liabilities 5,855,008 5,786,472 5,735,380 5,677,395 5,600,553
Stockholders' equity:
Brookline Bancorp, Inc. stockholders’ equity:
Common stock, $0.01 par value; 200,000,000 shares authorized; 81,695,695 shares issued 817 757 757 757 757
Additional paid-in capital 699,923 617,364 616,734 616,142 617,738
Retained earnings, partially restricted 151,759 143,766 136,671 129,740 122,469
Accumulated other comprehensive (loss) income (2,175) (3,261) (3,818) 4,896 5,969
Treasury stock, at cost;
4,717,775 shares, 4,707,096 shares, 4,707,096 shares, 4,734,512 shares, and 4,862,193 shares, respectively (53,837) (53,837) (53,837) (54,151) (56,215)
Unallocated common stock held by the Employee Stock Ownership Plan;
159,510 shares, 168,099 shares, 176,688 shares, 185,787 shares, and 194,880 shares, respectively (869) (916) (963) (1,013) (1,062)
Total Brookline Bancorp, Inc. stockholders’ equity 795,618 703,873 695,544 696,371 689,656
Noncontrolling interest in subsidiary 7,441 7,376 7,205 6,546 6,293
Total stockholders' equity 803,059 711,249 702,749 702,917 695,949
Total liabilities and stockholders' equity$6,658,067 $6,497,721 $6,438,129 $6,380,312 $6,296,502

BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Consolidated Statements of Income (Unaudited)
Three Months Ended
June 30, 2017 March 31, 2017 December 31, 2016 September 30, 2016 June 30, 2016
(In Thousands Except Share Data)
Interest and dividend income:
Loans and leases$61,138 $58,558 $57,247 $57,858 $55,369
Debt securities 3,156 3,000 2,881 2,822 3,075
Marketable and restricted equity securities 797 726 762 804 729
Short-term investments 95 67 93 47 63
Total interest and dividend income 65,186 62,351 60,983 61,531 59,236
Interest expense:
Deposits 5,543 5,080 5,195 5,112 5,018
Borrowed funds 4,060 4,173 3,934 4,069 3,961
Total interest expense 9,603 9,253 9,129 9,181 8,979
Net interest income 55,583 53,098 51,854 52,350 50,257
Provision for credit losses 873 13,402 3,215 2,215 2,545
Net interest income after provision for credit losses 54,710 39,696 48,639 50,135 47,712
Non-interest income:
Deposit fees 2,552 2,252 2,263 2,289 2,216
Loan fees 229 261 322 330 287
Loan level derivative income, net 186 402 265 858 1,210
Gain on sales of investment securities, net 11,393
Gain on sales of loans and leases held-for-sale 307 353 1,270 588 345
Loss on sale/disposals of premises and equipment, net (18) (26)
Other 1,221 1,273 1,310 1,264 1,317
Total non-interest income 4,477 15,908 5,430 5,329 5,375
Non-interest expense:
Compensation and employee benefits 20,910 19,784 19,657 20,369 19,083
Occupancy 3,657 3,645 3,520 3,411 3,391
Equipment and data processing 4,164 4,063 4,028 3,826 3,898
Professional services 1,036 1,106 927 997 962
FDIC insurance 951 855 655 956 843
Advertising and marketing 857 817 823 844 853
Amortization of identified intangible assets 519 532 621 623 621
Other 2,701 2,954 2,376 2,362 2,599
Total non-interest expense 34,795 33,756 32,607 33,388 32,250
Income before provision for income taxes 24,392 21,848 21,462 22,076 20,837
Provision for income taxes 8,759 7,835 7,524 7,804 7,465
Net income before noncontrolling interest in subsidiary 15,633 14,013 13,938 14,272 13,372
Less net income attributable to noncontrolling interest in subsidiary 753 568 659 655 718
Net income attributable to Brookline Bancorp, Inc.$14,880 $13,445 $13,279 $13,617 $12,654
Earnings per common share:
Basic$0.20 $0.19 $0.19 $0.19 $0.18
Diluted$0.20 $0.19 $0.19 $0.19 $0.18
Weighted average common shares outstanding during the period:
Basic 74,325,013 70,386,766 70,362,702 70,299,722 70,196,950
Diluted 74,810,088 70,844,096 70,592,204 70,450,760 70,388,438
Dividends declared per common share$0.09 $0.09 $0.09 $0.09 $0.09

BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Consolidated Statements of Income (Unaudited)
Six Months Ended June 30,
2017 2016
(In Thousands Except Share Data)
Interest and dividend income:
Loans and leases$119,696 $109,616
Debt securities 6,156 6,007
Marketable and restricted equity securities 1,523 1,409
Short-term investments 162 102
Total interest and dividend income 127,537 117,134
Interest expense:
Deposits 10,623 9,763
Borrowed funds 8,233 7,911
Total interest expense 18,856 17,674
Net interest income 108,681 99,460
Provision for credit losses 14,275 4,923
Net interest income after provision for credit losses 94,406 94,537
Non-interest income:
Deposit Fees 4,961 4,361
Loan Fees 490 593
Loan level derivative income, net 588 2,839
Gain on sales of investment securities, net 11,393
Gain on sales of loans and leases held-for-sale 660 1,250
Loss on sale/disposals of premises and equipment, net (44)
Other 2,337 2,777
Total non-interest income 20,385 11,820
Non-interest expense:
Compensation and employee benefits 40,694 37,810
Occupancy 7,302 6,917
Equipment and data processing 8,227 7,588
Professional services 2,142 1,928
FDIC insurance 1,806 1,721
Advertising and marketing 1,674 1,714
Amortization of identified intangible assets 1,051 1,256
Other 5,655 5,345
Total non-interest expense 68,551 64,279
Income before provision for income taxes 46,240 42,078
Provision for income taxes 16,594 15,064
Net income before noncontrolling interest in subsidiary 29,646 27,014
Less net income attributable to noncontrolling interest in subsidiary 1,321 1,548
Net income attributable to Brookline Bancorp, Inc.$28,325 $25,466
Earnings per common share:
Basic$0.39 $0.36
Diluted$0.39 $0.36
Weighted average common shares outstanding during the period:
Basic 72,366,769 70,191,935
Diluted 72,837,971 70,365,923
Dividends declared per common share$0.18 $0.18


BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Asset Quality Analysis (Unaudited)
At and for the Three Months Ended
June 30, 2017 March 31, 2017 December 31, 2016 September 30, 2016 June 30, 2016
(Dollars in Thousands)
NONPERFORMING ASSETS:
Loans and leases accounted for on a nonaccrual basis:
Commercial real estate mortgage$2,766 $5,671 $5,340 $1,688 $2,408
Multi-family mortgage 1,075 1,095 1,404 1,418 1,446
Total commercial real estate loans 3,841 6,766 6,744 3,106 3,854
Commercial 23,886 27,442 22,974 24,051 17,944
Equipment financing 9,702 6,445 6,758 6,652 6,947
Total commercial loans and leases 33,588 33,887 29,732 30,703 24,891
Residential mortgage 3,429 3,001 2,501 1,749 2,048
Home equity 1,366 1,333 951 1,780 1,976
Other consumer 43 76 149 214 289
Total consumer loans 4,838 4,410 3,601 3,743 4,313
Total nonaccrual loans and leases 42,267 45,063 40,077 37,552 33,058
Other real estate owned 3,384 618 618 367 407
Other repossessed assets 1,489 1,668 781 785 344
Total nonperforming assets$47,140 $47,349 $41,476 $38,704 $33,809
Loans and leases past due greater than 90 days and still accruing$2,706 $6,515 $7,077 $8,275 $4,151
Troubled debt restructurings on accrual 14,732 13,662 13,883 16,303 15,693
Troubled debt restructurings on nonaccrual 16,146 11,756 11,919 15,715 15,621
Total troubled debt restructurings$30,878 $25,418 $25,802 $32,018 $31,314
Nonperforming loans and leases as a percentage of total loans and leases 0.76% 0.83% 0.74% 0.70% 0.63%
Nonperforming assets as a percentage of total assets 0.71% 0.73% 0.64% 0.61% 0.54%
PROVISION AND ALLOWANCE FOR LOAN AND LEASE LOSSES:
Allowance for loan and lease losses at beginning of period$66,133 $53,666 $58,892 $57,258 $58,606
Charge-offs (3,365) (1,382) (8,629) (839) (4,324)
Recoveries 963 387 292 319 306
Net charge-offs (2,402) (995) (8,337) (520) (4,018)
Provision for loan and lease losses 790 13,462 3,111 2,154 2,670
Allowance for loan and lease losses at end of period$64,521 $66,133 $53,666 $58,892 $57,258
Allowance for loan and lease losses as a percentage of total loans and leases 1.17% 1.21% 0.99% 1.10% 1.09%
Allowance for loan and lease losses related to originated loans and leases as a percentage of originated loans and leases (non-GAAP) 1.20% 1.25% 1.03% 1.15% 1.13%
NET CHARGE-OFFS:
Commercial real estate loans$(131) $(116) $635 $50 $1,153
Commercial loans and leases 2,546 1,065 7,119 375 2,316
Consumer loans (13) 46 583 95 549
Total net charge-offs$2,402 $995 $8,337 $520 $4,018
Net loan and lease charge-offs as a percentage of average loans and leases (annualized) 0.17% 0.07% 0.62% 0.04% 0.31%


BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Average Yields / Costs (Unaudited)
Three Months Ended
June 30, 2017 March 31, 2017 June 30, 2016
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)$638,798 $3,267 2.05% $613,520 $3,110 2.03% $605,383 $3,157 2.09%
Marketable and restricted equity securities (2) 68,629 799 4.66% 69,508 718 4.13% 66,422 732 4.41%
Short-term investments 43,739 95 0.87% 32,127 67 0.84% 60,570 63 0.42%
Total investments 751,166 4,161 2.22% 715,155 3,895 2.18% 732,375 3,952 2.16%
Loans and Leases:
Commercial real estate loans (3) 2,942,927 30,368 4.08% 2,930,345 29,467 4.02% 2,784,627 28,278 4.06%
Commercial loans (3) 728,014 7,665 4.17% 699,687 7,113 4.07% 689,696 6,649 3.82%
Equipment financing (3) 826,877 13,810 6.68% 806,139 13,114 6.51% 730,193 11,751 6.44%
Residential mortgage loans (3) 639,449 5,859 3.67% 634,885 5,609 3.53% 626,249 5,633 3.60%
Other consumer loans (3) 362,404 3,677 4.07% 360,791 3,495 3.93% 351,051 3,309 3.78%
Total loans and leases 5,499,671 61,379 4.46% 5,431,847 58,798 4.33% 5,181,816 55,620 4.29%
Total interest-earning assets 6,250,837 65,540 4.19% 6,147,002 62,693 4.08% 5,914,191 59,572 4.03%
Allowance for loan and lease losses (66,853) (54,314) (58,789)
Non-interest-earning assets 372,681 368,495 382,061
Total assets$6,556,665 $6,461,183 $6,237,463
Liabilities and Stockholders' Equity:
Interest-bearing liabilities:
Deposits:
NOW accounts$316,486 54 0.07% $320,671 55 0.07% $294,484 53 0.07%
Savings accounts 592,150 300 0.20% 614,085 310 0.20% 554,474 336 0.24%
Money market accounts 1,767,973 2,131 0.48% 1,744,534 2,009 0.47% 1,655,843 1,867 0.45%
Certificates of deposit 1,101,094 3,058 1.11% 1,021,949 2,706 1.07% 1,132,272 2,762 0.98%
Total interest-bearing deposits 3,777,703 5,543 0.59% 3,701,239 5,080 0.56% 3,637,073 5,018 0.55%
Borrowings
Advances from the FHLBB 896,565 2,755 1.22% 929,822 2,857 1.23% 879,499 2,678 1.20%
Subordinated debentures and notes 83,165 1,271 6.11% 83,124 1,260 6.07% 82,997 1,258 6.06%
Other borrowed funds 47,466 34 0.29% 60,634 56 0.38% 41,305 25 0.24%
Total borrowings 1,027,196 4,060 1.56% 1,073,580 4,173 1.55% 1,003,801 3,961 1.56%
Total interest-bearing liabilities 4,804,899 9,603 0.80% 4,774,819 9,253 0.79% 4,640,874 8,979 0.78%
Non-interest-bearing liabilities:
Demand checking accounts 900,302 898,481 825,880
Other non-interest-bearing liabilities 77,682 71,812 78,497
Total liabilities 5,782,883 5,745,112 5,545,251
Brookline Bancorp, Inc. stockholders’ equity 766,529 709,095 685,996
Noncontrolling interest in subsidiary 7,253 6,976 6,216
Total liabilities and equity$6,556,665 $6,461,183 $6,237,463
Net interest income (tax-equivalent basis) /Interest-rate spread (4) 55,937 3.39% 53,440 3.29% 50,593 3.25%
Less adjustment of tax-exempt income 354 342 336
Net interest income $55,583 $53,098 $50,257
Net interest margin (5) 3.59% 3.53% 3.44%
(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 on an actual/actual basis.


BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Average Yields / Costs (Unaudited)
Six Months Ended
June 30, 2017 June 30, 2016
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)$626,229 $6,377 2.04% $604,709 $6,168 2.04%
Marketable and restricted equity securities (2) 69,066 1,517 4.39% 66,654 1,411 4.24%
Short-term investments 37,965 162 0.86% 51,214 102 0.40%
Total investments 733,260 8,056 2.20% 722,577 7,681 2.13%
Loans and Leases:
Commercial real estate loans (3) 2,936,671 59,835 4.05% 2,741,363 55,544 4.05%
Commercial loans (3) 715,377 14,778 4.11% 680,183 13,300 3.87%
Equipment financing (3) 816,565 26,924 6.59% 728,560 23,501 6.45%
Residential mortgage loans (3) 637,179 11,468 3.60% 625,800 11,192 3.58%
Other consumer loans (3) 361,602 7,172 4.00% 346,810 6,579 3.80%
Total loans and leases 5,467,394 120,177 4.40% 5,122,716 110,116 4.30%
Total interest-earning assets 6,200,654 128,233 4.14% 5,845,293 117,797 4.03%
Allowance for loan and lease losses (60,618) (57,957)
Non-interest-earning assets 369,152 377,822
Total assets$6,509,188 $6,165,158
Liabilities and Stockholders' Equity:
Interest-bearing liabilities:
Deposits:
NOW accounts$318,567 109 0.07% $286,949 104 0.07%
Savings accounts 603,057 610 0.20% 559,577 680 0.24%
Money market accounts 1,756,318 4,140 0.48% 1,642,448 3,642 0.45%
Certificates of deposit 1,061,740 5,764 1.09% 1,104,956 5,337 0.97%
Total interest-bearing deposits 3,739,682 10,623 0.57% 3,593,930 9,763 0.55%
Borrowings
Advances from the FHLBB 913,102 5,612 1.22% 871,729 5,347 1.21%
Subordinated debentures and notes 83,145 2,531 6.09% 82,976 2,514 6.06%
Other borrowed funds 54,014 90 0.34% 40,464 50 0.25%
Total borrowings 1,050,261 8,233 1.56% 995,169 7,911 1.57%
Total interest-bearing liabilities 4,789,943 18,856 0.79% 4,589,099 17,674 0.77%
Non-interest-bearing liabilities:
Demand checking accounts 899,396 812,374
Other non-interest-bearing liabilities 74,763 76,099
Total liabilities 5,764,102 5,477,572
Brookline Bancorp, Inc. stockholders’ equity 737,971 681,548
Noncontrolling interest in subsidiary 7,115 6,038
Total liabilities and equity$6,509,188 $6,165,158
Net interest income (tax-equivalent basis) /Interest-rate spread (4) 109,377 3.35% 100,123 3.26%
Less adjustment of tax-exempt income 696 663
Net interest income $108,681 $99,460
Net interest margin (5) 3.56% 3.44%
(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 on an actual/actual basis.


BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Non-GAAP Financial Information (Unaudited)
At and for the Three Months Ended
June 30, 2017 March 31, 2017 December 31, 2016 September 30, 2016 June 30, 2016
(Dollars in Thousands)
Net income, as reported$14,880 $13,445 $13,279 $13,617 $12,654
Average total assets$6,556,665 $6,461,183 $6,425,983 $6,360,097 $6,237,463
Less: Average goodwill and average identified intangible assets, net 145,269 145,778 146,382 146,997 147,619
Average tangible assets$6,411,396 $6,315,405 $6,279,601 $6,213,100 $6,089,844
Return on average tangible assets (annualized) 0.93 % 0.85 % 0.85 % 0.88 % 0.83 %
Average total stockholders’ equity$766,529 $709,095 $699,749 $695,205 $685,996
Less: Average goodwill and average identified intangible assets, net 145,269 145,778 146,382 146,997 147,619
Average tangible stockholders’ equity$621,260 $563,317 $553,367 $548,208 $538,377
Return on average tangible stockholders’ equity (annualized) 9.58 % 9.55 % 9.60 % 9.94 % 9.40 %
Brookline Bancorp, Inc. stockholders’ equity$795,618 $703,873 $695,544 $696,371 $689,656
Less:
Goodwill 137,890 137,890 137,890 137,890 137,890
Identified intangible assets, net 7,082 7,601 8,133 8,754 9,377
Tangible stockholders' equity$650,646 $558,382 $549,521 $549,727 $542,389
Total assets$6,658,067 $6,497,721 $6,438,129 $6,380,312 $6,296,502
Less:
Goodwill 137,890 137,890 137,890 137,890 137,890
Identified intangible assets, net 7,082 7,601 8,133 8,754 9,377
Tangible assets$6,513,095 $6,352,230 $6,292,106 $6,233,668 $6,149,235
Tangible stockholders’ equity to tangible assets 9.99 % 8.79 % 8.73 % 8.82 % 8.82 %
Tangible stockholders' equity$650,646 $558,382 $549,521 $549,727 $542,389
Number of common shares issued 81,695,695 75,744,445 75,744,445 75,744,445 75,744,445
Less:
Treasury shares 4,717,775 4,707,096 4,707,096 4,734,512 4,862,193
Unallocated ESOP shares 159,510 168,099 176,688 185,787 194,880
Unvested restricted shares 457,966 476,854 476,854 476,938 484,066
Number of common shares outstanding 76,360,444 70,392,396 70,383,807 70,347,208 70,203,306
Tangible book value per common share$ 8.52 $ 7.93 $ 7.81 $ 7.81 $ 7.73
Allowance for loan and lease losses$64,521 $66,133 $53,666 $58,892 $57,258
Less:
Allowance for acquired loans and leases losses 1,188 1,304 1,253 1,640 2,178
Allowance for originated loan and lease losses$63,333 $64,829 $52,413 $57,252 $55,080
Total loans and leases$5,537,406 $5,461,779 $5,398,864 $5,332,300 $5,259,038
Less:
Total acquired loans and leases 271,157 295,055 315,304 346,377 371,986
Total originated loans and leases$5,266,249 $5,166,724 $5,083,560 $4,985,923 $4,887,052
Allowance for loan and lease losses related to originated loans and leases as a percentage of originated loans and leases 1.20 % 1.25 % 1.03 % 1.15 % 1.13 %

Source:Brookline Bancorp, Inc.