Brookline Bancorp Announces Fourth Quarter Results

Net Income of $6.8 million, EPS of $0.09

Excluding the Impact of the Tax Cuts and Jobs Act (the "Tax Reform Act"),
Net Income would have been $15.8 million, EPS of $0.21

BOSTON, Jan. 31, 2018 (GLOBE NEWSWIRE) -- Brookline Bancorp, Inc. (NASDAQ:BRKL) (the “Company”) today announced net income of $6.8 million, or $0.09 per basic and diluted share, for the fourth quarter of 2017, which included an estimated one time, non-cash charge of $9.0 million related to the enactment of the Tax Reform Act.

Excluding the impact of the Tax Reform Act, net income would have been $15.8 million, with an EPS of $0.21 per basic and diluted share, for the fourth quarter ended December 31, 2017. This compared to $15.4 million, or $0.20 per basic and diluted share, for the third quarter of 2017, and $13.3 million, or $0.19 per basic and diluted share, for the fourth quarter of 2016.

For the year ended December 31, 2017, the Company reported net income of $50.5 million, or $0.68 per basic and diluted share. Excluding the impact of the Tax Reform Act, net income would have been $59.5 million, with an EPS of $0.80 per basic and diluted share, for the year ended December 31, 2017. This compared to $52.4 million, or $0.74 per basic and diluted share, for the year ended December 31, 2016.

“We closed 2017 on a solid basis with record pretax income and, excluding the impact of the tax changes, we reported record net income and earnings per share," said Paul Perrault, President and Chief Executive Officer of the Company. "Our bankers continue to succeed in meeting the needs of our clients and helping our clients grow their businesses. We experienced significant growth in loans and deposits throughout the year. During 2017, we were also pleased to announce the pending acquisition of First Commons Bank. We look forward to welcoming customers of First Commons Bank to the Brookline family in 2018. The acquisition of First Commons Bank is expected to close in March of 2018."

BALANCE SHEET

Total assets at December 31, 2017 increased $94.0 million to $6.78 billion from $6.69 billion at September 30, 2017, and increased $342.1 million from $6.44 billion at December 31, 2016. At December 31, 2017, total loans and leases were $5.73 billion, representing an increase of $91.2 million from September 30, 2017, and an increase of $331.8 million from December 31, 2016.

Investment securities at December 31, 2017 increased $19.2 million to $649.9 million, comprising 9.6 percent of total assets, as compared to $630.6 million, or 9.4 percent of total assets, at September 30, 2017; and increased approximately $39.1 million from $610.8 million, or 9.5 percent of total assets, at December 31, 2016.

Total deposits at December 31, 2017 increased $65.7 million to $4.87 billion from $4.81 billion at September 30, 2017 and increased $260.3 million from $4.61 billion at December 31, 2016. Core deposits, which consists of demand checking, NOW, savings, and money market accounts, increased $25.5 million from September 30, 2017 and increased $93.8 million from December 31, 2016.

Total borrowings at December 31, 2017 increased $34.9 million to $1.02 billion from $985.9 million at September 30, 2017 and decreased $23.3 million from $1.04 billion at December 31, 2016.

The ratio of stockholders’ equity to total assets was 11.86 percent at December 31, 2017, as compared to 12.04 percent at September 30, 2017, and 10.80 percent at December 31, 2016, respectively. The ratio of tangible stockholders’ equity to tangible assets was 9.94 percent at December 31, 2017, as compared to 10.09 percent at September 30, 2017, and 8.73 percent at December 31, 2016. Tangible book value per share decreased $0.02 from $8.63 at September 30, 2017 to $8.61 at December 31, 2017.

NET INTEREST INCOME

Net interest income increased $0.8 million to $57.7 million during the fourth quarter of 2017 from the quarter ended September 30, 2017, primarily driven by loan volume during the fourth quarter. The net interest margin increased 2 basis points to 359 basis points for the three months ended December 31, 2017.

NON-INTEREST INCOME

Non-interest income for the quarter ended December 31, 2017 decreased $0.2 million to $5.8 million from $6.0 million for the quarter ended September 30, 2017. The decrease was primarily driven by a decrease of $0.1 million in loan level derivative income and a decrease of $0.1 million in gain on sales of loans and leases held-for-sale.

PROVISION FOR CREDIT LOSSES

The Company recorded a provision for credit losses of $1.8 million for the quarter ended December 31, 2017, compared to $2.9 million for the quarter ended September 30, 2017. The decrease in the provision for the quarter was driven by a reduction in the specific reserve related to a favorable workout during the fourth quarter of 2017.

Net charge-offs for the fourth quarter of 2017 were $8.5 million compared to $2.0 million in the third quarter of 2017. The ratio of net charge-offs to average loans on an annualized basis increased to 60 basis points for the fourth quarter of 2017 from 14 basis points for the third quarter of 2017. Net charge-offs in the fourth quarter of 2017 consisted of $7.2 million of taxi medallion loans as compared to $1.3 million of taxi medallion loans in the third quarter of 2017. Net charge-offs as a percent of average total loans was 25 basis points in 2017, consistent with 2016.

The allowance for loan and lease losses represented 1.02 percent of total loans and leases at December 31, 2017, compared to 1.16 percent at September 30, 2017, and 0.99 percent at December 31, 2016. The allowance for loan and lease losses related to originated loans and leases represented 1.05 percent of originated loans and leases at December 31, 2017, compared to 1.20 percent at September 30, 2017, and 1.03 percent at December 31, 2016.

NON-INTEREST EXPENSE

Non-interest expense for the quarter ended December 31, 2017 decreased $0.2 million to $35.2 million from $35.4 million for the quarter ended September 30, 2017. The decrease was primarily driven by a decrease of $0.4 million in compensation and employee benefits and a decrease of $0.2 million in FDIC insurance, offset by an increase of $0.2 million in equipment and data processing expense and an increase of $0.2 million in professional services. The efficiency ratio for the fourth quarter of 2017 was 55.38 percent compared to 56.37 percent for the third quarter of 2017 and 56.92 percent for the fourth quarter of 2016.

PROVISION FOR INCOME TAXES

The effective tax rate was 70.6 percent and 44.9 percent for the three and twelve months ended December 31, 2017, respectively. As a result of changes introduced by the Tax Reform Act, the provision for income taxes included a total write-down associated with the revaluation of net deferred tax assets of $9.0 million. The changes to the future federal statutory tax rate and other provisions set forth in the Tax Reform Act resulted in the re-measurement of the carrying value of our net deferred tax asset and investments in low income housing tax credits. This revaluation of our net deferred tax assets is subject to further guidance and interpretation of the Tax Reform Act.

RETURNS ON AVERAGE ASSETS AND AVERAGE EQUITY

Excluding the impact of the Tax Reform Act and merger related costs, the annualized return on average assets was 0.95 percent during the fourth quarter of 2017 compared to 0.92 percent for the third quarter of 2017; and was 0.90 percent for the year ended December 31, 2017, compared to 0.83 percent for the year ended December 31, 2016.

Excluding the impact of the Tax Reform Act and merger related costs the annualized return on average tangible stockholders' equity was 9.55 percent during the fourth quarter of 2017 compared to 9.31 percent for the third quarter of 2017; and was 9.51 percent for the year ended December 31, 2017 compared to 9.66 percent for the year ended December 31, 2016

ASSET QUALITY

The ratio of nonperforming loans and leases to total loans and leases was 0.48 percent at December 31, 2017 as compared to 0.71 percent at September 30, 2017. Nonperforming loans and leases decreased $12.7 million to $27.3 million at December 31, 2017 from $40.0 million at September 30, 2017. The ratio of nonperforming assets to total assets was 0.47 percent at December 31, 2017 as compared to 0.66 percent at September 30, 2017. Nonperforming assets decreased $12.7 million to $31.7 million at December 31, 2017 from $44.4 million at September 30, 2017. The decrease was primarily driven by charge-offs of $8.5 million in the fourth quarter.

DIVIDEND DECLARED

The Company’s Board of Directors approved a dividend of $0.09 per share for the quarter ended December 31, 2017. The dividend will be paid on March 2, 2018 to stockholders of record on February 16, 2018.

CONFERENCE CALL

The Company will conduct a conference call/webcast at 1:30 PM Eastern Daylight Time on Thursday, February 1, 2018 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 10115372. 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 $6.8 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,
2017
September 30, 2017 June 30,
2017
March 31,
2017
December 31,
2016
December 31,
2017
December 31,
2016
(Dollars In Thousands Except per Share Data)
Earnings Data:
Net interest income$57,657 $56,843 $55,583 $53,098 $51,854 $223,181 $203,664
Provision for credit losses 1,802 2,911 873 13,402 3,215 18,988 10,353
Non-interest income 5,815 5,973 4,477 15,908 5,430 32,173 22,667
Non-interest expense 35,152 35,408 34,795 33,756 32,607 139,111 130,362
Income before provision for income taxes 26,518 24,497 24,392 21,848 21,462 97,255 85,616
Net income attributable to Brookline Bancorp, Inc. 6,827 15,366 14,880 13,445 13,279 50,518 52,362
Performance Ratios:
Net interest margin (1) 3.59% 3.57% 3.59% 3.53% 3.40% 3.57% 3.44%
Interest-rate spread (1) 3.42% 3.41% 3.39% 3.29% 3.24% 3.38% 3.27%
Return on average assets 0.41% 0.92% 0.91% 0.83% 0.83% 0.76% 0.83%
Return on average tangible assets (non-GAAP) 0.41% 0.94% 0.93% 0.85% 0.85% 0.78% 0.85%
Return on average stockholders' equity 3.37% 7.64% 7.76% 7.58% 7.59% 6.53% 7.59%
Return on average tangible stockholders' equity (non-GAAP) 4.09% 9.31% 9.58% 9.55% 9.60% 8.04% 9.66%
Efficiency ratio (2) 55.38% 56.37% 57.93% 48.92% 56.92% 54.48% 57.60%
Per Common Share Data:
Net income — Basic$0.09 $0.20 $0.20 $0.19 $0.19 $0.68 $0.74
Net income — Diluted 0.09 0.20 0.20 0.19 0.19 0.68 0.74
Cash dividends declared 0.09 0.09 0.09 0.09 0.09 0.36 0.36
Book value per share (end of period) 10.49 10.52 10.42 10.00 9.88 10.49 9.88
Tangible book value per share (end of period) (non-GAAP) 8.61 8.63 8.52 7.93 7.81 8.61 7.81
Stock price (end of period) 15.70 15.50 14.60 15.65 16.40 15.70 16.40
Balance Sheet:
Total assets$6,780,249 $6,686,284 $6,658,067 $6,497,721 $6,438,129 $6,780,249 $6,438,129
Total loans and leases 5,730,679 5,639,440 5,537,406 5,461,779 5,398,864 5,730,679 5,398,864
Total deposits 4,871,343 4,805,683 4,709,419 4,651,903 4,611,076 4,871,343 4,611,076
Brookline Bancorp, Inc. stockholders’ equity 803,830 804,762 795,618 703,873 695,544 803,830 695,544
Asset Quality:
Nonperforming assets$31,691 $44,371 $47,140 $47,349 $41,476 $31,691 $41,476
Nonperforming assets as a percentage of total assets 0.47% 0.66% 0.71% 0.73% 0.64% 0.47% 0.64%
Allowance for loan and lease losses$58,592 $65,413 $64,521 $66,133 $53,666 $58,592 $53,666
Allowance for loan and lease losses as a percentage of total loans and leases 1.02% 1.16% 1.17% 1.21% 0.99% 1.02% 0.99%
Net loan and lease charge-offs$8,507 $1,954 $2,402 $995 $8,337 $13,858 $13,275
Net loan and lease charge-offs as a percentage of average loans and leases (annualized) 0.60% 0.14% 0.17% 0.07% 0.62% 0.25% 0.25%
Capital Ratios:
Stockholders’ equity to total assets 11.86% 12.04% 11.95% 10.83% 10.80% 11.86% 10.80%
Tangible stockholders’ equity to tangible assets (non-GAAP) 9.94% 10.09% 9.99% 8.79% 8.73% 9.94% 8.73%
(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,
2017
September 30,
2017
June 30,
2017
March 31,
2017
December 31,
2016
ASSETS(In Thousands Except Share Data)
Cash and due from banks$25,622 $35,392 $40,599 $33,565 $36,055
Short-term investments 35,383 27,971 72,996 29,178 31,602
Total cash and cash equivalents 61,005 63,363 113,595 62,743 67,657
Investment securities available-for-sale 540,124 522,910 540,976 528,433 523,634
Investment securities held-to-maturity 109,730 107,738 108,963 100,691 87,120
Total investment securities 649,854 630,648 649,939 629,124 610,754
Loans and leases held-for-sale 2,628 2,973 593 1,152 13,078
Loans and leases:
Commercial real estate loans:
Commercial real estate mortgage 2,174,969 2,119,440 2,062,646 2,066,599 2,050,382
Multi-family mortgage 760,670 743,912 720,484 733,822 731,186
Construction 140,138 165,657 153,057 150,734 136,999
Total commercial real estate loans 3,075,777 3,029,009 2,936,187 2,951,155 2,918,567
Commercial loans and leases:
Commercial 705,004 689,010 691,070 644,240 635,426
Equipment financing 866,488 842,516 839,932 815,753 799,860
Condominium association 52,619 53,770 58,130 60,396 60,122
Total commercial loans and leases 1,624,111 1,585,296 1,589,132 1,520,389 1,495,408
Consumer loans:
Residential mortgage 660,065 652,415 646,679 631,863 624,349
Home equity 355,954 356,982 351,124 343,386 342,241
Other consumer 14,772 15,738 14,284 14,986 18,299
Total consumer loans 1,030,791 1,025,135 1,012,087 990,235 984,889
Total loans and leases 5,730,679 5,639,440 5,537,406 5,461,779 5,398,864
Allowance for loan and lease losses (58,592) (65,413) (64,521) (66,133) (53,666)
Net loans and leases 5,672,087 5,574,027 5,472,885 5,395,646 5,345,198
Restricted equity securities 59,369 62,135 66,988 68,065 64,511
Premises and equipment, net of accumulated depreciation 80,283 81,159 81,052 76,973 76,176
Deferred tax asset ("DTA") 15,061 28,093 26,982 29,859 25,247
Goodwill 137,890 137,890 137,890 137,890 137,890
Identified intangible assets, net of accumulated amortization 6,044 6,563 7,082 7,601 8,133
Other real estate owned and repossessed assets 4,419 4,398 4,873 2,286 1,399
Other assets 91,609 95,035 96,188 86,382 88,086
Total assets$6,780,249 $6,686,284 $6,658,067 $6,497,721 $6,438,129
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Non-interest-bearing deposits:
Demand checking accounts$942,583 $905,472 $920,035 $898,161 $900,474
Interest-bearing deposits:
NOW accounts 350,568 318,284 321,982 321,392 323,160
Savings accounts 646,359 665,558 584,408 575,808 613,061
Money market accounts 1,724,363 1,749,040 1,763,443 1,765,895 1,733,359
Certificate of deposit accounts 1,207,470 1,167,329 1,119,551 1,090,647 1,041,022
Total interest-bearing deposits 3,928,760 3,900,211 3,789,384 3,753,742 3,710,602
Total deposits 4,871,343 4,805,683 4,709,419 4,651,903 4,611,076
Borrowed funds:
Advances from the FHLBB 889,909 872,579 930,028 930,001 910,774
Subordinated debentures and notes 83,271 83,229 83,188 83,147 83,105
Other borrowed funds 47,639 30,087 53,427 43,637 50,207
Total borrowed funds 1,020,819 985,895 1,066,643 1,056,785 1,044,086
Mortgagors’ escrow accounts 7,686 8,151 7,714 8,032 7,645
Accrued expenses and other liabilities 67,818 74,019 71,232 69,752 72,573
Total liabilities 5,967,666 5,873,748 5,855,008 5,786,472 5,735,380
Stockholders' equity:
Brookline Bancorp, Inc. stockholders’ equity 803,830 804,762 795,618 703,873 695,544
Noncontrolling interest in subsidiary 8,753 7,774 7,441 7,376 7,205
Total stockholders' equity 812,583 812,536 803,059 711,249 702,749
Total liabilities and stockholders' equity$6,780,249 $6,686,284 $6,658,067 $6,497,721 $6,438,129

BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Consolidated Statements of Income (Unaudited)
Three Months Ended
December 31,
2017
September 30,
2017
June 30,
2017
March 31, 2017 December 31,
2016
(In Thousands Except Share Data)
Interest and dividend income:
Loans and leases$64,272 $63,054 $61,138 $58,558 $57,247
Debt securities 3,214 3,154 3,156 3,000 2,881
Marketable and restricted equity securities 751 788 797 726 762
Short-term investments 100 180 95 67 93
Total interest and dividend income 68,337 67,176 65,186 62,351 60,983
Interest expense:
Deposits 6,681 5,984 5,543 5,080 5,195
Borrowed funds 3,999 4,349 4,060 4,173 3,934
Total interest expense 10,680 10,333 9,603 9,253 9,129
Net interest income 57,657 56,843 55,583 53,098 51,854
Provision for credit losses 1,802 2,911 873 13,402 3,215
Net interest income after provision for credit losses 55,855 53,932 54,710 39,696 48,639
Non-interest income:
Deposit fees 2,542 2,547 2,552 2,409 2,395
Loan fees 338 282 229 261 322
Loan level derivative income, net 755 844 186 402 265
Gain on sales of investment securities, net 11,393
Gain on sales of loans and leases held-for-sale 935 1,049 307 353 1,270
Other 1,245 1,251 1,203 1,090 1,178
Total non-interest income 5,815 5,973 4,477 15,908 5,430
Non-interest expense:
Compensation and employee benefits 20,652 21,067 20,910 19,784 19,657
Occupancy 3,594 3,650 3,657 3,645 3,520
Equipment and data processing 4,417 4,210 4,164 4,063 4,028
Professional services 1,200 973 1,036 1,106 927
FDIC insurance 678 842 951 855 655
Advertising and marketing 856 839 857 817 823
Amortization of identified intangible assets 519 519 519 532 621
Merger and acquisition expense 206 205
Other 3,030 3,103 2,701 2,954 2,376
Total non-interest expense 35,152 35,408 34,795 33,756 32,607
Income before provision for income taxes 26,518 24,497 24,392 21,848 21,462
Provision for income taxes - operating 9,747 8,330 8,759 7,835 7,524
Impact of revaluation of DTA 8,965
Total provision for income taxes 18,712 8,330 8,759 7,835 7,524
Net income before noncontrolling interest in subsidiary 7,806 16,167 15,633 14,013 13,938
Less net income attributable to noncontrolling interest in subsidiary 979 801 753 568 659
Net income attributable to Brookline Bancorp, Inc.$6,827 $15,366 $14,880 $13,445 $13,279
Earnings per common share:
Basic$0.09 $0.20 $0.20 $0.19 $0.19
Diluted$0.09 $0.20 $0.20 $0.19 $0.19
Weighted average common shares outstanding during the period:
Basic 76,583,712 76,452,539 74,325,013 70,386,766 70,362,702
Diluted 76,868,307 76,961,948 74,810,088 70,844,096 70,592,204
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)
Twelve Months Ended
December 31,
2017 2016
(In Thousands
Except Share Data)
Interest and dividend income:
Loans and leases$247,022 $224,721
Debt securities 12,524 11,710
Marketable and restricted equity securities 3,062 2,975
Short-term investments 442 242
Total interest and dividend income 263,050 239,648
Interest expense:
Deposits 23,288 20,070
Borrowed funds 16,581 15,914
Total interest expense 39,869 35,984
Net interest income 223,181 203,664
Provision for credit losses 18,988 10,353
Net interest income after provision for credit losses 204,193 193,311
Non-interest income:
Deposit Fees 10,050 9,467
Loan Fees 1,110 1,299
Loan level derivative income, net 2,187 3,962
Gain on sales of investment securities, net 11,393
Gain on sales of loans and leases held-for-sale 2,644 3,256
Other 4,789 4,683
Total non-interest income 32,173 22,667
Non-interest expense:
Compensation and employee benefits 82,413 77,836
Occupancy 14,546 13,882
Equipment and data processing 16,854 15,496
Professional services 4,315 3,852
FDIC insurance 3,326 3,332
Advertising and marketing 3,369 3,381
Amortization of identified intangible assets 2,089 2,500
Merger and acquisition expense 411
Other 11,788 10,083
Total non-interest expense 139,111 130,362
Income before provision for income taxes 97,255 85,616
Provision for income taxes - operating 34,671 30,392
Impact of revaluation of DTA 8,965
Total provision for income taxes 43,636 30,392
Net income before noncontrolling interest in subsidiary 53,619 55,224
Less net income attributable to noncontrolling interest in subsidiary 3,101 2,862
Net income attributable to Brookline Bancorp, Inc.$50,518 $52,362
Earnings per common share:
Basic$0.68 $0.74
Diluted$0.68 $0.74
Weighted average common shares outstanding during the period:
Basic 74,459,508 70,261,954
Diluted 74,811,408 70,444,083
Dividends declared per common share$0.36 $0.36

BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Asset Quality Analysis (Unaudited)
At and for the Three Months Ended
December 31,
2017
September 30,
2017
June 30,
2017
March 31,
2017
December 31,
2016
(Dollars in Thousands)
NONPERFORMING ASSETS:
Loans and leases accounted for on a nonaccrual basis:
Commercial real estate mortgage$3,313 $3,051 $2,766 $5,671 $5,340
Multi-family mortgage 608 792 1,075 1,095 1,404
Construction 860 860
Total commercial real estate loans 4,781 4,703 3,841 6,766 6,744
Commercial 11,619 22,367 23,886 27,442 22,974
Equipment financing 8,106 9,858 9,702 6,445 6,758
Total commercial loans and leases 19,725 32,225 33,588 33,887 29,732
Residential mortgage 1,979 1,969 3,429 3,001 2,501
Home equity 744 1,047 1,366 1,333 951
Other consumer 43 29 43 76 149
Total consumer loans 2,766 3,045 4,838 4,410 3,601
Total nonaccrual loans and leases 27,272 39,973 42,267 45,063 40,077
Other real estate owned 3,235 3,235 3,384 618 618
Other repossessed assets 1,184 1,163 1,489 1,668 781
Total nonperforming assets$31,691 $44,371 $47,140 $47,349 $41,476
Loans and leases past due greater than 90 days and still accruing$3,020 $2,523 $2,706 $6,515 $7,077
Troubled debt restructurings on accrual 16,241 14,024 14,732 13,662 13,883
Troubled debt restructurings on nonaccrual 9,770 15,290 16,146 11,756 11,919
Total troubled debt restructurings$26,011 $29,314 $30,878 $25,418 $25,802
Nonperforming loans and leases as a percentage of total loans and leases 0.48% 0.71% 0.76% 0.83% 0.74%
Nonperforming assets as a percentage of total assets 0.47% 0.66% 0.71% 0.73% 0.64%
PROVISION AND ALLOWANCE FOR LOAN AND LEASE LOSSES:
Allowance for loan and lease losses at beginning of period$65,413 $64,521 $66,133 $53,666 $58,892
Charge-offs (8,921) (2,143) (3,365) (1,382) (8,629)
Recoveries 414 189 963 387 292
Net charge-offs (8,507) (1,954) (2,402) (995) (8,337)
Provision for loan and lease losses 1,686 2,846 790 13,462 3,111
Allowance for loan and lease losses at end of period$58,592 $65,413 $64,521 $66,133 $53,666
Allowance for loan and lease losses as a percentage of total loans and leases 1.02% 1.16% 1.17% 1.21% 0.99%
Allowance for loan and lease losses related to originated loans and leases as a percentage of originated loans and leases (non-GAAP) 1.05% 1.20% 1.20% 1.25% 1.03%
NET CHARGE-OFFS:
Commercial real estate loans$200 $65 $(131) $(116) $635
Commercial loans and leases 8,290 1,856 2,546 1,065 7,119
Consumer loans 17 33 (13) 46 583
Total net charge-offs$8,507 $1,954 $2,402 $995 $8,337
Net loan and lease charge-offs as a percentage of average loans and leases (annualized) 0.60% 0.14% 0.17% 0.07% 0.62%

BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Average Yields / Costs (Unaudited)
Three Months Ended
December 31, 2017 September 30, 2017 December 31, 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)$644,958 $3,323 2.06% $642,018 $3,264 2.03% $606,569 $2,977 1.96%
Marketable and restricted equity securities (2) 59,720 759 5.08% 66,212 789 4.76% 66,660 770 4.62%
Short-term investments 34,689 100 1.15% 52,674 180 1.36% 78,053 93 0.48%
Total investments 739,367 4,182 2.26% 760,904 4,233 2.23% 751,282 3,840 2.04%
Loans and Leases:
Commercial real estate loans (3) 3,026,124 31,866 4.12% 2,974,185 31,299 4.12% 2,888,967 28,896 3.91%
Commercial loans (3) 762,493 8,132 4.18% 760,115 7,959 4.10% 702,273 7,079 3.95%
Equipment financing (3) 846,734 14,292 6.75% 846,027 13,983 6.61% 777,324 12,527 6.45%
Residential mortgage loans (3) 659,226 6,082 3.69% 649,831 6,043 3.72% 627,650 5,512 3.51%
Other consumer loans (3) 373,559 4,141 4.40% 369,925 4,015 4.30% 364,117 3,475 3.78%
Total loans and leases 5,668,136 64,513 4.55% 5,600,083 63,299 4.52% 5,360,331 57,489 4.29%
Total interest-earning assets 6,407,503 68,695 4.29% 6,360,987 67,532 4.25% 6,111,613 61,329 4.01%
Allowance for loan and lease losses (65,434) (65,140) (58,337)
Non-interest-earning assets 383,661 385,195 372,707
Total assets$6,725,730 $6,681,042 $6,425,983
Liabilities and Stockholders' Equity:
Interest-bearing liabilities:
Deposits:
NOW accounts$331,724 61 0.07% $321,731 55 0.07% $307,450 53 0.07%
Savings accounts 671,035 381 0.23% 605,303 306 0.20% 628,096 324 0.21%
Money market accounts 1,766,045 2,456 0.55% 1,765,610 2,267 0.51% 1,717,989 2,002 0.46%
Certificates of deposit 1,202,656 3,783 1.25% 1,139,699 3,356 1.17% 1,085,763 2,816 1.03%
Total interest-bearing deposits 3,971,460 6,681 0.67% 3,832,343 5,984 0.62% 3,739,298 5,195 0.55%
Borrowings
Advances from the FHLBB 798,572 2,690 1.32% 913,206 3,028 1.30% 853,572 2,635 1.21%
Subordinated debentures and notes 83,248 1,276 6.13% 83,204 1,274 6.13% 83,079 1,265 6.09%
Other borrowed funds 34,499 33 0.37% 41,368 47 0.45% 46,991 34 0.28%
Total borrowings 916,319 3,999 1.71% 1,037,778 4,349 1.64% 983,642 3,934 1.56%
Total interest-bearing liabilities 4,887,779 10,680 0.87% 4,870,121 10,333 0.84% 4,722,940 9,129 0.77%
Non-interest-bearing liabilities:
Demand checking accounts 933,690 918,054 910,835
Other non-interest-bearing liabilities 85,018 80,616 85,670
Total liabilities 5,906,487 5,868,791 5,719,445
Brookline Bancorp, Inc. stockholders’ equity 811,219 804,666 699,749
Noncontrolling interest in subsidiary 8,024 7,585 6,789
Total liabilities and equity$6,725,730 $6,681,042 $6,425,983
Net interest income (tax-equivalent basis) /Interest-rate spread (4) 58,015 3.42% 57,199 3.41% 52,200 3.24%
Less adjustment of tax-exempt income 358 356 346
Net interest income $57,657 $56,843 $51,854
Net interest margin (5) 3.59% 3.57% 3.40%
(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, 2017 December 31, 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)$634,930 $12,964 2.04% $605,097 $12,055 1.99%
Marketable and restricted equity securities (2) 65,992 3,065 4.64% 66,738 3,017 4.52%
Short-term investments 40,847 442 1.08% 54,205 242 0.45%
Total investments 741,769 16,471 2.22% 726,040 15,314 2.11%
Loans and Leases:
Commercial real estate loans (3) 2,968,673 123,000 4.09% 2,811,487 113,910 3.99%
Commercial loans (3) 739,369 30,904 4.13% 695,057 27,509 3.90%
Equipment financing (3) 830,755 55,164 6.64% 748,626 48,217 6.44%
Residential mortgage loans (3) 645,925 23,593 3.65% 624,994 22,217 3.55%
Other consumer loans (3) 366,713 15,328 4.18% 353,600 13,864 3.91%
Total loans and leases 5,551,435 247,989 4.47% 5,233,764 225,717 4.31%
Total interest-earning assets 6,293,204 264,460 4.20% 5,959,804 241,031 4.04%
Allowance for loan and lease losses (62,972) (58,071)
Non-interest-earning assets 377,002 377,989
Total assets$6,607,234 $6,279,722
Liabilities and Stockholders' Equity:
Interest-bearing liabilities:
Deposits:
NOW accounts$322,681 225 0.07% $294,318 209 0.07%
Savings accounts 620,757 1,297 0.21% 578,855 1,322 0.23%
Money market accounts 1,761,112 8,863 0.50% 1,670,609 7,549 0.45%
Certificates of deposit 1,116,909 12,903 1.16% 1,102,110 10,990 1.00%
Total interest-bearing deposits 3,821,459 23,288 0.61% 3,645,892 20,070 0.55%
Borrowings
Advances from the FHLBB 884,266 11,330 1.26% 879,650 10,760 1.20%
Subordinated debentures and notes 83,186 5,081 6.11% 83,017 5,038 6.07%
Other borrowed funds 45,908 170 0.37% 43,533 116 0.27%
Total borrowings 1,013,360 16,581 1.61% 1,006,200 15,914 1.56%
Total interest-bearing liabilities 4,834,819 39,869 0.82% 4,652,092 35,984 0.77%
Non-interest-bearing liabilities:
Demand checking accounts 912,743 849,672
Other non-interest-bearing liabilities 78,965 82,073
Total liabilities 5,826,527 5,583,837
Brookline Bancorp, Inc. stockholders’ equity 773,244 689,556
Noncontrolling interest in subsidiary 7,463 6,329
Total liabilities and equity$6,607,234 $6,279,722
Net interest income (tax-equivalent basis) /Interest-rate spread (4) 224,591 3.38% 205,047 3.27%
Less adjustment of tax-exempt income 1,410 1,383
Net interest income $223,181 $203,664
Net interest margin (5) 3.57% 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.

BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Non-GAAP Financial Information (Unaudited)
At and for the Three Months
Ended December 31,
At and for the Twelve Months
Ended December 31,
2017 2016 2017 2016
Reconciliation Table - Non-GAAP Financial Information (Dollars in Thousands Except Share Data)
Net income attributable to Brookline Bancorp, Inc. $6,827 $13,279 $50,518 $52,362
Add:
Impact of Tax Reform Act 8,965 8,965
Subtotal 15,792 13,279 59,483 52,362
Add:
Merger and acquisition-related expenses (after-tax) 130 264
Net earnings from operations $15,922 $13,279 $59,747 $52,362
Operating earnings per common share:
Basic $0.21 $0.19 $0.80 $0.74
Diluted 0.21 0.19 0.80 0.74
Weighted average common shares outstanding during the period:
Basic 76,583,712 70,362,702 74,459,508 70,261,954
Diluted 76,868,307 70,592,204 74,811,408 70,444,083
Return on average assets * 0.41% 0.83% 0.76% 0.83%
Add:
Impact of Tax Reform Act * 0.53% % 0.14% %
Merger and acquisition-related expenses (after-tax) * 0.01% % % %
Operating return on average assets * 0.95% 0.83% 0.90% 0.83%
Return on average tangible assets * 0.41% 0.85% 0.78% 0.85%
Add:
Impact of Tax Reform Act * 0.55% % 0.14% %
Merger and acquisition-related expenses (after-tax) * 0.01% % % %
Operating return on average tangible assets * 0.97% 0.85% 0.92% 0.85%
Return on average stockholders' equity * 3.37% 7.59% 6.53% 7.59%
Add:
Impact of Tax Reform Act * 4.42% % 1.17% %
Merger and acquisition-related expenses (after-tax) * 0.06% % 0.03% %
Operating return on average stockholders' equity * 7.85% 7.59% 7.73% 7.59%
Return on average tangible stockholders' equity * 4.09% 9.60% 8.04% 9.66%
Add:
Impact of Tax Reform Act * 5.38% % 1.43% %
Merger and acquisition-related expenses (after-tax) * 0.08% % 0.04% %
Operating return on average tangible stockholders' equity * 9.55% 9.60% 9.51% 9.66%
* Ratios at and for the three months ended are annualized.
At and for the Three Months Ended At and For the Twelve
Months Ended
December 31,
2017
September 30,
2017
June 30,
2017
March 31,
2017
December 31,
2016
December 31,
2017
December 31,
2016
(Dollars in Thousands)
Net income, as reported$6,827 $15,366 $14,880 $13,445 $13,279 $50,518 $52,362
Average total assets$6,725,730 $6,681,042 $6,556,665 $6,461,183 $6,425,983 $6,607,234 $6,279,722
Less: Average goodwill and average identified intangible assets, net 144,226 144,747 145,269 145,778 146,382 145,000 147,308
Average tangible assets$6,581,504 $6,536,295 $6,411,396 $6,315,405 $6,279,601 $6,462,234 $6,132,414
Return on average tangible assets (annualized) 0.41 % 0.94 % 0.93 % 0.85 % 0.85 % 0.78 % 0.85 %
Average total stockholders’ equity$811,219 $804,666 $766,529 $709,095 $699,749 $773,244 $689,556
Less: Average goodwill and average identified intangible assets, net 144,226 144,747 145,269 145,778 146,382 145,000 147,308
Average tangible stockholders’ equity$666,993 $659,919 $621,260 $563,317 $553,367 $628,244 $542,248
Return on average tangible stockholders’ equity (annualized) 4.09 % 9.31 % 9.58 % 9.55 % 9.60 % 8.04 % 9.66 %
Brookline Bancorp, Inc. stockholders’ equity$803,830 $804,762 $795,618 $703,873 $695,544 $803,830 $695,544
Less:
Goodwill 137,890 137,890 137,890 137,890 137,890 137,890 137,890
Identified intangible assets, net 6,044 6,563 7,082 7,601 8,133 6,044 8,133
Tangible stockholders' equity$659,896 $660,309 $650,646 $558,382 $549,521 $659,896 $549,521
Total assets$6,780,249 $6,686,284 $6,658,067 $6,497,721 $6,438,129 $6,780,249 $6,438,129
Less:
Goodwill 137,890 137,890 137,890 137,890 137,890 137,890 137,890
Identified intangible assets, net 6,044 6,563 7,082 7,601 8,133 6,044 8,133
Tangible assets$6,636,315 $6,541,831 $6,513,095 $6,352,230 $6,292,106 $6,636,315 $6,292,106
Tangible stockholders’ equity to tangible assets 9.94 % 10.09 % 9.99 % 8.79 % 8.73 % 9.94 % 8.73 %
Tangible stockholders' equity$659,896 $660,309 $650,646 $558,382 $549,521 $659,896 $549,521
Number of common shares issued 81,695,695 81,695,695 81,695,695 75,744,445 75,744,445 81,695,695 75,744,445
Less:
Treasury shares 4,440,665 4,572,954 4,717,775 4,707,096 4,707,096 4,440,665 4,707,096
Unallocated ESOP shares 142,332 150,921 159,510 168,099 176,688 142,332 176,688
Unvested restricted shares 455,283 471,702 457,966 476,854 476,854 455,283 476,854
Number of common shares outstanding 76,657,415 76,500,118 76,360,444 70,392,396 70,383,807 76,657,415 70,383,807
Tangible book value per common share$ 8.61 $ 8.63 $ 8.52 $ 7.93 $ 7.81 $ 8.61 $ 7.81
Allowance for loan and lease losses$58,592 $65,413 $64,521 $66,133 $53,666 $58,592 $53,666
Less:
Allowance for acquired loans and leases losses 1,040 1,003 1,188 1,304 1,253 1,040 1,253
Allowance for originated loan and lease losses$57,552 $64,410 $63,333 $64,829 $52,413 $57,552 $52,413
Total loans and leases$5,730,679 $5,639,440 $5,537,406 $5,461,779 $5,398,864 $5,730,679 $5,398,864
Less:
Total acquired loans and leases 240,057 260,196 271,157 295,055 315,304 240,057 315,304
Total originated loans and leases$5,490,622 $5,379,244 $5,266,249 $5,166,724 $5,083,560 $5,490,622 $5,083,560
Allowance for loan and lease losses related to originated loans and leases as a percentage of originated loans and leases 1.05 % 1.20 % 1.20 % 1.25 % 1.03 % 1.05 % 1.03 %

Source:Brookline Bancorp, Inc.