Press Release

Net Income of $18.7 million, EPS of $0.24

Announces $0.115 Dividend per Share

Resumes Stock Buyback Program

BOSTON, Oct. 28, 2020 (GLOBE NEWSWIRE) -- Brookline Bancorp, Inc. (NASDAQ: BRKL) (the “Company”) today announced net income of $18.7 million, or $0.24 per basic and diluted share, for the third quarter of 2020, compared to $19.6 million, or $0.25 per basic and diluted share, for the second quarter of 2020, and $22.6 million, or $0.28 per basic and diluted share, for the third quarter of 2019.

Paul Perrault, President and Chief Executive Officer of the Company noted, “As we look toward the close of 2020, we are thankful for the resilience of our employees in diligently meeting the needs of our customers throughout this unprecedented year. Today we are pleased to report another solid quarter of earnings and growth which are rooted in the strength of our core business areas. While we continue to monitor the situation with COVID-19, the business lines that are fundamental to our success continue to operate effectively during these challenging times."

BALANCE SHEET

Total assets at September 30, 2020 decreased $69.5 million to $9.0 billion from $9.1 billion at June 30, 2020, and increased $1.1 billion from $7.9 billion at September 30, 2019. At September 30, 2020, total loans and leases were $7.4 billion, representing a decrease of $11.3 million from June 30, 2020, and an increase of $749.5 million from September 30, 2019, primarily driven by loans originated under the Small Business Administration's Paycheck Protection Program ("PPP"). The Company has funded 2,922 PPP loans totaling $581.7 million as of August 8, 2020 when the program closed, of which $568.4 million remains outstanding, net of deferred fees and costs at September 30, 2020.

Total investment securities at September 30, 2020 decreased $72.1 million to $784.4 million, as compared to $856.5 million at June 30, 2020, and increased approximately $217.3 million from $567.1 million at September 30, 2019. Total cash and cash equivalents at September 30, 2020 increased $62.4 million to $317.3 million, as compared to $254.9 million at June 30, 2020, and increased $138.8 million from $178.5 million at September 30, 2019. As of September 30, 2020, total investment securities and total cash and cash equivalents represented 12.2 percent of total assets as compared to 12.3 percent and 9.5 percent as of June 30, 2020 and September 30, 2019, respectively.

Total deposits at September 30, 2020 increased $352.3 million to $6.8 billion from $6.4 billion at June 30, 2020 and increased $1.1 billion from $5.7 billion at September 30, 2019.

Total borrowed funds at September 30, 2020 decreased $401.6 million to $1.0 billion from $1.4 billion at June 30, 2020 and increased $18.6 million from $986.4 million at September 30, 2019.

The ratio of stockholders’ equity to total assets was 10.39 percent at September 30, 2020, as compared to 10.21 percent at June 30, 2020, and 11.83 percent at September 30, 2019. The ratio of tangible stockholders’ equity to tangible assets (non-GAAP) was 8.73 percent at September 30, 2020, as compared to 8.56 percent at June 30, 2020, and 9.94 percent at September 30, 2019. Tangible book value per share (non-GAAP) increased $0.10 from $9.67 at June 30, 2020 to $9.77 at September 30, 2020, compared to $9.63 at September 30, 2019.

On December 4, 2019, the Board of Directors approved a stock repurchase program authorizing management to repurchase up to $10.0 million of the Company’s common stock over a period of twelve months commencing on January 1, 2020 and ending on December 31, 2020. On March 9, 2020, the Board of Directors approved an increase in the repurchase amount of $10.0 million bringing the total authorized amount to $20.0 million. Subsequently, as previously disclosed, the Company suspended the stock repurchase program effective as of March 24, 2020. As of September 30, 2020, the Company has repurchased 848,319 shares at a weighted average price of $12.27. In 2019, 136,065 shares of the Company's common stock were repurchased by the Company.

NET INTEREST INCOME

Net interest income increased $1.6 million to $65.9 million during the third quarter of 2020 from $64.3 million at the quarter ended June 30, 2020. The net interest margin decreased 1 basis point to 3.08 percent for the three months ended September 30, 2020.

NON-INTEREST INCOME

Total non-interest income for the quarter ended September 30, 2020 decreased $1.3 million to $4.9 million from $6.2 million for the quarter ended June 30, 2020. The decrease was primarily driven by decreases of $0.9 million in loan level derivative income, net, $0.5 million in gain on investment securities, net and $0.5 million in other non-interest income, partially offset by increases of $0.3 million in deposit fees and $0.3 million in gain on sales of loans and leases.

PROVISION FOR CREDIT LOSSES

On January 1, 2020, the Company adopted ASU 2016-13 "Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments", commonly referred to as CECL. 

The Company recorded a provision for credit losses of $4.5 million for the quarter ended September 30, 2020, compared to $5.3 million for the quarter ended June 30, 2020.

Total net charge-offs for the third quarter of 2020 were $5.0 million compared to $1.4 million in the second quarter of 2020. The increase in net charge-offs in the quarter was driven by the charge-off of $4.3 million on a commercial taxi medallion relationship which had a $3.2 million specific reserve previously established. The ratio of net loan and lease charge-offs to average loans and leases on an annualized basis increased to 27 basis points for the third quarter of 2020 from 8 basis points for the second quarter of 2020.

While economic conditions and forecasts have generally improved from Q2, there remains significant uncertainty and volatility related to the COVID-19 pandemic and its impact on businesses and households as we enter the fall and winter seasons.

The allowance for loan and lease losses represented 1.62 percent of total loans and leases at September 30, 2020, compared to 1.61 percent at June 30, 2020, and 0.89 percent at September 30, 2019. Excluding PPP loans, the allowance for loan and lease losses represents 1.76 percent coverage at September 30, 2020 compared to 1.75 percent at June 30, 2020.

ASSET QUALITY

The ratio of nonperforming loans and leases to total loans and leases was 0.51 percent at September 30, 2020, a decrease from 0.56 percent at June 30, 2020. Total nonaccrual loans and leases decreased $3.3 million to $38.0 million at September 30, 2020 from $41.3 million at June 30, 2020. The ratio of nonperforming assets to total assets was 0.44 percent at September 30, 2020, a decrease from 0.47 percent at June 30, 2020. Total nonperforming assets decreased $3.4 million to $39.4 million at September 30, 2020 from $42.8 million at June 30, 2020.

From March 1, 2020 through the earlier of December 31, 2020 or 60 days after the termination date of the national emergency declared by the President on March 13, 2020 concerning the COVID-19 outbreak (the “national emergency”), a financial institution may elect to suspend the requirements under accounting principles generally accepted in the U.S. for loan modifications related to the COVID-19 pandemic that would otherwise be categorized as a troubled debt restructured, including impairment accounting. This troubled debt restructuring relief applies for the term of the loan modification that occurs during the applicable period for a loan that was not more than 30 days past due as of December 31, 2019. Financial institutions are required to maintain records of the volume of loans involved in modifications to which troubled debt restructuring relief is applicable. As of September 30, 2020, approximately 77 percent of loans granted an initial loan payment deferral have returned to payment status and 910 credits totaling $280 million or 3.8 percent of total loans outstanding have been modified.

NON-INTEREST EXPENSE

Non-interest expense for the quarter ended September 30, 2020 increased $1.8 million to $40.9 million from $39.1 million for the quarter ended June 30, 2020. The increase was primarily driven by increases of $1.5 million in compensation and employee benefits expense due to lower deferred loan origination costs, $0.5 million in FDIC insurance expense and $0.1 million in equipment and data processing expense, partially offset by a decrease of $0.3 million in other expense.

PROVISION FOR INCOME TAXES

The effective tax rate was 26.2 percent and 23.9 percent for the three and nine months ended September 30, 2020 compared to 24.9 percent for the three months ended June 30, 2020 and 24.9 percent and 24.4 percent for the three and nine months ended September 30, 2019.

RETURNS ON AVERAGE ASSETS AND AVERAGE EQUITY

The annualized return on average assets decreased to 0.83 percent during the third quarter 2020 from 0.88 percent for the second quarter of 2020.

The annualized return on average stockholders' equity decreased to 7.99 percent during the third quarter of 2020 from 8.45 percent for the second quarter of 2020. The annualized return on average tangible stockholders’ equity decreased to 9.70 percent for the third quarter of 2020 from 10.28 percent for the second quarter of 2020.

DIVIDEND DECLARED

The Company’s Board of Directors approved a dividend of $0.115 per share for the quarter ended September 30, 2020. The dividend will be paid on November 27, 2020 to stockholders of record on November 13, 2020.

STOCK REPURCHASE

As previously disclosed, the Company suspended its stock repurchase program effective as of March 24, 2020 with $9.6 million remaining in the Board authorized program. On October 28, 2020, the Company’s Board of Directors approved resumption of the stock repurchase program to be completed by December 31, 2020.

CONFERENCE CALL

The Company will conduct a conference call/webcast at 1:30 PM Eastern Daylight Time on Thursday, October 29, 2020 to discuss the results for the quarter, business highlights and outlook. A copy of the Earnings Presentation is available on the Company’s website, www.brooklinebancorp.com. To listen to the call and view the Company’s Earnings Presentation, please join the call via https://services.choruscall.com/links/brkl201029.html. To listen to the call without access to the slides, please dial 877-504-4120 (United States) or 412-902-6650 (international) and ask for the Brookline Bancorp, Inc. call. A recording of the call will be available for one week following the call on the Company’s website under “Investor Relations” or by dialing 877-344-7529 (United States) or 412-317-0088 (internationally) and entering the passcode: 10148701.

ABOUT BROOKLINE BANCORP, INC.

Brookline Bancorp, Inc., a bank holding company with $9.0 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 and Bank Rhode Island (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 and www.bankri.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. Statements contained in this press release that do not describe historical or current facts are forward-looking statements, including statements regard the potential effects of COVID-19 on the Company’s business, credit quality, financial condition, liquidity and results of operations. Forward-looking statements made with regard to the potential effects of COVID-19 on the Company’s business, financial condition, credit quality, liquidity and results of operation may differ, possibly materially, from what is included in this press release due to factors and future developments that are uncertain and beyond the scope of the Company’s control. These included, but are not limited to, the length and extent of the economic contraction as a result of the COVID-19 pandemic; continued deterioration in employment levels, general business and economic conditions on a national basis and in the local markets in which the Company operates; changes in consumer behavior due to changing political business and economic conditions or legislative or regulatory initiatives; the possibility that future credit losses may be higher than currently expected; reputational risk relating to the Company’s participation in the Paycheck Protection Program and other pandemic-related legislative and regulatory initiatives and programs; and turbulence in capital and debt markets. Forward-looking statements involve risks and uncertainties which are difficult to predict. 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-GAA P FINANCIAL MEASURES

The Company uses certain non-GAAP financial measures, such as operating earnings, operating return on average assets, operating return on average tangible assets, operating return on average stockholders' equity, operating return on average tangible stockholders' equity, 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 (annualized) and return on average tangible stockholders' equity (annualized). 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.

INVESTOR RELATIONS:

PDF available: http://ml.globenewswire.com/Resource/Download/cec3855d-edf6-4322-8fe8-04fde8fa0b4f

Source: Brookline Bancorp, Inc.