Press Release

Brookline Bancorp Announces Third Quarter Results

Company Release - 10/27/2021

Net Income of $28.8 million, EPS of $0.37

Quarterly Dividend Increase of 4.2%

BOSTON, Oct. 27, 2021 (GLOBE NEWSWIRE) -- Brookline Bancorp, Inc. (NASDAQ: BRKL) (the “Company”) today announced net income of $28.8 million, or $0.37 per basic and diluted share, for the third quarter of 2021, compared to net income of $31.6 million, or $0.40 per basic and diluted share, for the second quarter of 2021, and net income of $18.7 million, or $0.24 per basic and diluted share, for the third quarter of 2020.

Paul Perrault, Chairman and Chief Executive Officer of the Company commented on the third quarter earnings, “I am pleased to report solid earnings for the third quarter of $28.8 million or $0.37 per share as the economy in our markets continues to improve.” Perrault continued, “Our employees have remained focused on providing exceptional customer service to our customers and communities throughout 2021 which has positioned us well as we look forward to the end of the year.”

BALANCE SHEET

Total assets at September 30, 2021 decreased $149.3 million to $8.3 billion from $8.5 billion at June 30, 2021, and decreased $687.5 million from $9.0 billion at September 30, 2020. At September 30, 2021, total loans and leases were $6.9 billion, representing a decrease of $88.6 million from June 30, 2021, and a decrease of $464.7 million from September 30, 2020.

The Company funded a total of 4,700 of SBA Paycheck Protection Program ("PPP") loans in the aggregate amount of $872.1 million. As of September 30, 2021, $160.6 million in PPP loans remain outstanding, net of deferred fees and costs of $5.4 million. Excluding PPP loan activity, the core loan portfolio grew $99.2 million in the third quarter compared to growth of $9.1 million in the second quarter.

Total investment securities at September 30, 2021 increased $37.9 million to $732.0 million from $694.2 million at June 30, 2021, and decreased $52.4 million from $784.4 million at September 30, 2020. Total cash and cash equivalents at September 30, 2021 decreased $81.3 million to $239.1 million from $320.4 million at June 30, 2021, and decreased $78.2 million from $317.3 million at September 30, 2020. As of September 30, 2021, total investment securities and total cash and cash equivalents represented 11.7 percent of total assets as compared to 12.0 percent and 12.2 percent as of June 30, 2021 and September 30, 2020, respectively.

Total deposits at September 30, 2021 decreased $21.7 million to $6.87 billion from $6.89 billion at June 30, 2021, and increased $80.5 million from $6.8 billion at September 30, 2020.

Total borrowed funds at September 30, 2021 decreased $95.5 million to $267.5 million from $363.0 million at June 30, 2021, and decreased $737.5 million from $1.0 billion at September 30, 2020.

The ratio of stockholders’ equity to total assets was 11.77 percent at September 30, 2021, as compared to 11.49 percent at June 30, 2021, and 10.39 percent at September 30, 2020. The ratio of tangible stockholders’ equity to tangible assets (non-GAAP) was 10.01 percent at September 30, 2021, as compared to 9.75 percent at June 30, 2021, and 8.73 percent at September 30, 2020. Tangible book value per share (non-GAAP) increased $0.16 from $10.35 at June 30, 2021 to $10.51 at September 30, 2021, compared to $9.77 at September 30, 2020.

NET INTEREST INCOME

Net interest income decreased $0.4 million to $70.7 million for the third quarter of 2021 from $71.1 million at the quarter ended June 30, 2021. The net interest margin increased 1 basis point to 3.53 percent for the three months ended September 30, 2021 from 3.52 percent for the three months ended June 30, 2021.

NON-INTEREST INCOME

Total non-interest income for the quarter ended September 30, 2021 decreased $0.3 million to $5.6 million from $5.9 million for the quarter ended June 30, 2021. The decrease was primarily driven by a decrease of $0.4 million in deposit fees and a decrease of $0.1 million in loan fees, partially offset by an increase of $0.2 million in loan level derivative income, net.

PROVISION FOR CREDIT LOSSES

The Company recorded a negative provision for credit losses of $3.1 million for the quarter ended September 30, 2021, compared to a negative provision for credit losses of $3.3 million for the quarter ended June 30, 2021. Total net charge-offs for the third quarter of 2021 were $1.3 million compared to $0.6 million in the second quarter of 2021. The increase was primarily driven by an increase in charge-offs on equipment financing and commercial loans for $0.2 million and $0.2 million, respectively, along with a decrease in recoveries on equipment financing and home equity loans for $0.2 million and $0.1 million, respectively. The ratio of net loan and lease charge-offs to average loans and leases on an annualized basis increased to 7 basis points for the third quarter of 2021 from 3 basis points for the second quarter of 2021.

The allowance for loan and lease losses represented 1.48 percent of total loans and leases at September 30, 2021, compared to 1.52 percent at June 30, 2021, and 1.62 percent at September 30, 2020. Excluding PPP loans, the allowance for loan and lease losses represented 1.51 percent of total loans and leases at September 30, 2021 compared to 1.60 percent at June 30, 2021, and 1.76 percent at September 30, 2020.

ASSET QUALITY

The ratio of nonperforming loans and leases to total loans and leases was 0.52 percent at September 30, 2021, an increase from 0.49 percent at June 30, 2021. Total nonaccrual loans and leases increased $1.7 million to $35.9 million at September 30, 2021 from $34.2 million at June 30, 2021. The ratio of nonperforming assets to total assets was 0.44 percent at September 30, 2021, an increase from 0.41 percent at June 30, 2021. Total nonperforming assets increased $1.9 million to $36.5 million at September 30, 2021 from $34.6 million at June 30, 2021.

From March 1, 2020 through the earlier of January 1, 2022 or 60 days after the termination date of the national emergency declared by the President on March 13, 2020 concerning the COVID-19 outbreak, 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, 2021, approximately 94 percent of loans granted an initial loan payment deferral have returned to payment status and 77 credits totaling $55.7 million, or 0.8 percent of total loans outstanding, are operating under modified terms.

NON-INTEREST EXPENSE

Non-interest expense for the quarter ended September 30, 2021 increased $2.9 million to $40.9 million from $38.0 million for the quarter ended June 30, 2021. The increase was primarily driven by an increase of $2.0 million in compensation and employee benefits expense due to a bonus compensation adjustment and higher retirement plan expense in the third quarter, and an increase of $1.5 million in other non-interest expense due to a $2.1 million gain on sale of other real estate owned in the second quarter, partially offset by a decrease of $0.3 million in occupancy expense, a decrease of $0.1 million in equipment and data processing expense, and a decrease of $0.2 million in professional services expense.

PROVISION FOR INCOME TAXES

The effective tax rate was 25.0 percent and 25.1 percent for the three and nine months ended September 30, 2021 compared to 25.4 percent for the three months ended June 30, 2021 and 26.2 percent and 23.9 percent for the three and nine months ended September 30, 2020.

RETURNS ON AVERAGE ASSETS AND AVERAGE EQUITY

The annualized return on average assets decreased to 1.38 percent during the third quarter 2021 from 1.48 percent for the second quarter of 2021.

The annualized return on average stockholders' equity decreased to 11.79 percent during the third quarter of 2021 from 13.21 percent for the second quarter of 2021. The annualized return on average tangible stockholders’ equity decreased to 14.15 percent for the third quarter of 2021 from 15.92 percent for the second quarter of 2021.

DIVIDEND DECLARED

The Company’s Board of Directors approved a dividend of $0.125 per share for the quarter ended September 30, 2021, representing an increase of 4.2 percent from the prior quarter. The dividend will be paid on November 26, 2021 to stockholders of record on November 12, 2021.

STOCK REPURCHASE

As previously disclosed, on January 27, 2021, the Company's Board of Directors approved a stock repurchase program authorizing management to repurchase up to $10.0 million of the Company’s common stock commencing on February 1, 2021 and ending on December 31, 2021. As of September 30, 2021, the Company completed the program.

CONFERENCE CALL

The Company will conduct a conference call/webcast at 1:30 PM Eastern Daylight Time on Thursday, October 28, 2021 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/brkl211028.html. To listen to the call without access to the slides, interested parties may dial 844-200-6205 (United States) or 929-526-1599 (internationally) and ask for the Brookline Bancorp, Inc. conference call (Access Code 996258). A recorded playback of the call will be available for one week following the call on the Company’s website under “Investor Relations” or by dialing 866-813-9403 (United States) or 1-929-458-6194 (internationally) and entering the passcode: 495902.

ABOUT BROOKLINE BANCORP, INC.

Brookline Bancorp, Inc., a bank holding company with $8.3 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. We may also make forward-looking statements in other documents we file with the Securities and Exchange Commission ("SEC"), in our annual reports to shareholders, in press releases and other written materials, and in oral statements made by our officers, directors or employees. You can identify forward looking statements by the use of the words “believe,” “expect,” “anticipate,” “intend,” “estimate,” “assume,” “outlook,” “will,” “should,” and other expressions that predict or indicate future events and trends and which do not relate to historical matters, including statements regard the potential effects of the COVID-19 pandemic 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 the COVID-19 pandemic 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, 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 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 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 as a percentage of total loans and leases less PPP loans, 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:

Contact: Carl M. Carlson
  Brookline Bancorp, Inc.
  Co-President and 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
  September 30,
2021
June 30,
2021

March 31,
2021

December  31,
2020

September 30,
2020
  (Dollars In Thousands Except per Share Data)
Earnings Data:          
Net interest income $ 70,697   $ 71,106   $ 69,109   $ 68,225   $ 65,938  
(Credit) provision for credit losses   (3,110 )   (3,331 )   (2,147 )   (2,103 )   4,528  
Non-interest income   5,586     5,910     4,794     4,219     4,862  
Non-interest expense   40,922     37,966     40,811     40,038     40,947  
Income before provision for income taxes   38,471     42,381     35,239     34,509     25,325  
Net income   28,839     31,602     26,454     26,663     18,679  
           
Performance Ratios:          
Net interest margin (1)   3.53 %   3.52 %   3.39 %   3.23 %   3.08 %
Interest-rate spread (1)   3.39 %   3.34 %   3.15 %   3.03 %   2.85 %
Return on average assets (annualized)   1.38 %   1.48 %   1.21 %   1.20 %   0.83 %
Return on average tangible assets (annualized) (non-GAAP)   1.41 %   1.51 %   1.24 %   1.22 %   0.84 %
Return on average stockholders' equity (annualized)   11.79 %   13.21 %   11.18 %   11.38 %   7.99 %
Return on average tangible stockholders' equity (annualized) (non-GAAP)   14.15 %   15.92 %   13.51 %   13.79 %   9.70 %
Efficiency ratio (2)   53.64 %   49.30 %   55.22 %   55.27 %   57.83 %
           
Per Common Share Data:          
Net income — Basic $ 0.37   $ 0.40   $ 0.34   $ 0.34   $ 0.24  
Net income — Diluted   0.37     0.40     0.34     0.34     0.24  
Cash dividends declared   0.125     0.120     0.120     0.115     0.115  
Book value per share (end of period)   12.61     12.44     12.10     12.05     11.84  
Tangible book value per share (end of period) (non-GAAP)   10.51     10.35     10.01     9.96     9.77  
Stock price (end of period)   15.26     14.95     15.00     12.04     8.65  
           
Balance Sheet:          
Total assets $ 8,312,649   $ 8,461,964   $ 8,559,810   $ 8,942,424   $ 9,000,192  
Total loans and leases   6,931,694     7,020,275     7,267,552     7,269,553     7,396,358  
Total deposits   6,873,010     6,894,701     6,866,786     6,910,696     6,792,523  
Total stockholders’ equity   978,452     972,252     945,399     941,778     935,558  
           
Asset Quality:          
Nonperforming assets $ 36,461   $ 34,588   $ 37,403   $ 44,963   $ 39,365  
Nonperforming assets as a percentage of total assets   0.44 %   0.41 %   0.44 %   0.50 %   0.44 %
Allowance for loan and lease losses $ 102,515   $ 106,474   $ 109,837   $ 114,379   $ 119,971  
Allowance for loan and lease losses as a percentage of total loans and leases   1.48 %   1.52 %   1.51 %   1.57 %   1.62 %
Net loan and lease charge-offs $ 1,255   $ 595   $ 1,760   $ 4,381   $ 4,963  
Net loan and lease charge-offs as a percentage of average loans and leases (annualized)   0.07 %   0.03 %   0.10 %   0.24 %   0.27 %
           
Capital Ratios:          
Stockholders’ equity to total assets   11.77 %   11.49 %   11.04 %   10.53 %   10.39 %
Tangible stockholders’ equity to tangible assets (non-GAAP)   10.01 %   9.75 %   9.31 %   8.86 %   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)  
  September 30,
2021
June 30,
2021

March 31,
2021

December 30,
2020

September 30,
2020
 
ASSETS (In Thousands Except Share Data)  
Cash and due from banks $ 28,865   $ 36,079   $ 41,284   $ 36,069   $ 33,818    
Short-term investments   210,279     284,370     89,643     398,848     283,515    
Total cash and cash equivalents   239,144     320,449     130,927     434,917     317,333    
Investment securities available-for-sale   732,020     694,151     729,901     745,822     783,867    
Equity securities held-for-trading   -     -     518     526     525    
Total investment securities   732,020     694,151     730,419     746,348     784,392    
Loans and leases:            
Commercial real estate loans   3,909,011     3,815,581     3,790,341     3,823,826     3,835,372    
Commercial loans and leases   1,869,686     2,038,851     2,324,202     2,274,899     2,354,613    
Consumer loans   1,152,997     1,165,843     1,153,009     1,170,828     1,206,373    
Total loans and leases   6,931,694     7,020,275     7,267,552     7,269,553     7,396,358    
Allowance for loan and lease losses   (102,515 )   (106,474 )   (109,837 )   (114,379 )   (119,971 )  
Net loans and leases   6,829,179     6,913,801     7,157,715     7,155,174     7,276,387    
Restricted equity securities   28,098     31,627     40,400     49,786     61,715    
Premises and equipment, net of accumulated depreciation   70,811     71,240     72,524     71,568     72,441    
Right-of-use asset operating leases   21,879     22,682     23,180     24,143     23,492    
Deferred tax asset   39,643     41,324     42,857     40,129     42,269    
Goodwill   160,427     160,427     160,427     160,427     160,427    
Identified intangible assets, net of accumulated amortization   2,484     2,692     2,920     3,152     3,464    
Other real estate owned and repossessed assets   601     372     6,383     6,515     1,413    
Other assets   188,363     203,199     192,058     250,265     256,859    
Total assets $ 8,312,649   $ 8,461,964   $ 8,559,810   $ 8,942,424   $ 9,000,192    
LIABILITIES AND STOCKHOLDERS' EQUITY            
Deposits:            
Demand checking accounts $ 1,816,116   $ 1,926,713   $ 1,724,170   $ 1,592,205   $ 1,550,267    
NOW accounts   513,032     495,598     481,988     513,948     459,902    
Savings accounts   823,095     782,482     724,504     701,659     716,630    
Money market accounts   2,393,362     2,250,651     2,192,468     2,018,977     1,878,258    
Certificate of deposit accounts   1,141,861     1,178,131     1,273,105     1,389,998     1,492,913    
Brokered deposit accounts   185,544     261,126     470,551     693,909     694,553    
Total deposits   6,873,010     6,894,701     6,866,786     6,910,696     6,792,523    
Borrowed funds:            
Advances from the FHLBB   113,977     204,154     378,646     648,849     841,169    
Subordinated debentures and notes   83,859     83,821     83,783     83,746     83,707    
Other borrowed funds   69,703     75,039     83,574     87,652     80,169    
Total borrowed funds   267,539     363,014     546,003     820,247     1,005,045    
Operating lease liabilities   21,879     22,682     23,180     24,143     23,492    
Mortgagors’ escrow accounts   6,455     6,231     6,483     5,901     6,429    
Reserve for unfunded credits   12,736     13,142     13,705     13,071     13,964    
Accrued expenses and other liabilities   152,578     189,942     158,254     226,588     223,181    
Total liabilities   7,334,197     7,489,712     7,614,411     8,000,646     8,064,634    
Stockholders' equity:            
Common stock, $0.01 par value; 200,000,000 shares authorized; 85,177,172 shares issued, 85,177,172 shares issued, 85,177,172 shares issued, 85,177,172 shares issued, and 85,177,172 shares issued, respectively   852     852     852     852     852    
Additional paid-in capital   735,990     738,557     737,882     737,178     736,294    
Retained earnings, partially restricted   323,862     304,466     282,301     264,892     247,336    
Accumulated other comprehensive income   2,615     6,089     2,082     16,490     18,782    
Treasury stock, at cost;            
7,034,754, 6,536,478, 6,534,602, 6,525,783, and 5,629,854 shares, respectively   (84,684 )   (77,493 )   (77,463 )   (77,343 )   (67,376 )  
Unallocated common stock held by the Employee Stock Ownership Plan;            
31,278, 37,890, 44,502, 51,114, and 58,227 shares, respectively   (183 )   (219 )   (255 )   (291 )   (330 )  
Total stockholders' equity   978,452     972,252     945,399     941,778     935,558    
   Total liabilities and stockholders' equity $ 8,312,649   $ 8,461,964   $ 8,559,810   $ 8,942,424   $ 9,000,192    

 

BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Consolidated Statements of Income (Unaudited)
  Three Months Ended
  September 30,
2021

June 30,
2021

March 31,
2021
December 30,
2020

September 30,
2020
  (In Thousands Except Share Data)
Interest and dividend income:          
Loans and leases $ 74,332   $ 75,026   $ 75,009   $ 76,583   $ 76,240
Debt securities   2,967     3,121     3,118     3,335     3,746
Marketable and restricted equity securities   313     233     301     490     672
Short-term investments   83     42     39     59     46
Total interest and dividend income   77,695     78,422     78,467     80,467     80,704
Interest expense:          
Deposits   4,571     5,380     6,707     8,825     10,583
Borrowed funds   2,427     1,936     2,651     3,417     4,183
Total interest expense   6,998     7,316     9,358     12,242     14,766
Net interest income   70,697     71,106     69,109     68,225     65,938
(Credit) provision for credit losses   (3,110 )   (3,331 )   (2,147 )   (2,103 )   4,528
Net interest income after provision for credit losses   73,807     74,437     71,256     70,328     61,410
Non-interest income:          
Deposit fees   2,629     3,015     2,281     2,358     2,305
Loan fees   487     607     599     588     397
Loan level derivative income, net   218     7     474     145     527
Gain (loss) on investment securities, net   -     1     (7 )   -     54
Gain on sales of loans and leases held-for-sale   557     538     709     67     632
Other   1,695     1,742     738     1,061     947
Total non-interest income   5,586     5,910     4,794     4,219     4,862
Non-interest expense:          
Compensation and employee benefits   27,206     25,161     25,821     25,054     26,092
Occupancy   3,567     3,832     4,004     3,806     3,802
Equipment and data processing   4,556     4,697     4,493     4,193     4,293
Professional services   1,072     1,245     1,226     1,338     1,112
FDIC insurance   662     657     1,044     1,630     1,363
Advertising and marketing   1,077     1,110     1,100     1,010     1,024
Amortization of identified intangible assets   208     228     232     312     312
Other   2,574     1,036     2,891     2,695     2,949
Total non-interest expense   40,922     37,966     40,811     40,038     40,947
Income before provision for income taxes   38,471     42,381     35,239     34,509     25,325
Provision for income taxes   9,632     10,779     8,785     7,846     6,646
Net income $ 28,839   $ 31,602   $ 26,454   $ 26,663   $ 18,679
Earnings per common share:          
Basic $ 0.37   $ 0.40   $ 0.34   $ 0.34   $ 0.24
Diluted $ 0.37   $ 0.40   $ 0.34   $ 0.34   $ 0.24
Weighted average common shares outstanding during the period:        
Basic   78,000,261     78,150,364     78,143,752     78,533,351     78,948,139
Diluted   78,240,633     78,470,451     78,404,063     78,680,873     79,055,901
Dividends paid per common share $ 0.120   $ 0.120   $ 0.115   $ 0.115   $ 0.115
           

 

BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Consolidated Statements of Income (Unaudited)
   
  Nine Months Ended September 30,
  2021 2020
  (In Thousands Except Share Data)
Interest and dividend income:    
Loans and leases $ 224,367   $ 233,215
Debt securities   9,206     10,423
Marketable and restricted equity securities   847     2,358
Short-term investments   164     354
Total interest and dividend income   234,584     246,350
Interest expense:    
Deposits   16,658     39,601
Borrowed funds   7,014     14,811
Total interest expense   23,672     54,412
Net interest income   210,912     191,938
(Credit) provision for credit losses   (8,588 )   63,989
Net interest income after provision for credit losses   219,500     127,949
Non-interest income:    
Deposit Fees   7,925     6,692
Loan Fees   1,647     1,460
Loan level derivative income, net   699     4,123
(Loss) gain on investment securities, net   (6 )   1,970
Gain on sales of loans and leases held-for-sale   1,804     1,051
Other   4,221     5,129
Total non-interest income   16,290     20,425
Non-interest expense:    
Compensation and employee benefits   78,188     75,931
Occupancy   11,403     11,580
Equipment and data processing   13,746     13,152
Professional services   3,543     3,819
FDIC insurance   2,363     2,599
Advertising and marketing   3,287     3,116
Amortization of identified intangible assets   668     959
Other   6,501     9,650
Total non-interest expense   119,699     120,806
Income before provision for income taxes   116,091     27,568
Provision for income taxes   29,196     6,596
Net income $ 86,895   $ 20,972
Earnings per common share:    
Basic $ 1.11   $ 0.27
Diluted $ 1.11   $ 0.27
Weighted average common shares outstanding during the period:  
Basic   78,097,600     79,092,424
Diluted   78,371,190     79,245,113
Dividends paid per common share $ 0.355   $ 0.345
     

 

BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Asset Quality Analysis (Unaudited)
  At and for the Three Months Ended
  September 30,
2021

June 30,
2021

March 31,
2021
December 31,
2020

September 30,
2020
  (Dollars in Thousands)
NONPERFORMING ASSETS:          
Loans and leases accounted for on a nonaccrual basis:          
Commercial real estate mortgage $ 10,963   $ 11,657   $ 3,611   $ 3,300   $ 10,841  
Multi-family mortgage   -     -     -     -     -  
Construction   -     -     3,853     3,853     -  
Total commercial real estate loans   10,963     11,657     7,464     7,153     10,841  
           
Commercial   2,539     3,207     3,161     7,702     7,751  
Equipment financing   17,655     14,872     15,772     16,757     13,372  
Condominium association   91     97     106     112     117  
Total commercial loans and leases   20,285     18,176     19,039     24,571     21,240  
           
Residential mortgage   4,150     3,638     3,722     5,587     4,634  
Home equity   461     744     793     1,136     1,235  
Other consumer   1     1     2     1     2  
Total consumer loans   4,612     4,383     4,517     6,724     5,871  
           
Total nonaccrual loans and leases   35,860     34,216     31,020     38,448     37,952  
           
Other real estate owned   -     -     5,328     5,415     -  
Other repossessed assets   601     372     1,055     1,100     1,413  
Total nonperforming assets $ 36,461   $ 34,588   $ 37,403   $ 44,963   $ 39,365  
           
Loans and leases past due greater than 90 days and still accruing $ 838   $ 3,154   $ 1,179   $ 11,975   $ 1,180  
           
Troubled debt restructurings on accrual   13,526     14,387     16,770     11,483     11,309  
Troubled debt restructurings on nonaccrual   6,655     6,410     6,293     7,476     5,742  
Total troubled debt restructurings $ 20,181   $ 20,797   $ 23,063   $ 18,959   $ 17,051  
           
Nonperforming loans and leases as a percentage of total loans and leases   0.52 %   0.49 %   0.43 %   0.53 %   0.51 %
Nonperforming assets as a percentage of total assets   0.44 %   0.41 %   0.44 %   0.50 %   0.44 %
           
PROVISION AND ALLOWANCE FOR LOAN AND LEASE LOSSES:      
Allowance for loan and lease losses at beginning of period $ 106,474   $ 109,837   $ 114,379   $ 119,971   $ 119,553  
CECL adjustment to retained earnings   -     -     -     -     -  
Charge-offs   (1,600 )   (1,221 )   (2,143 )   (4,810 )   (5,511 )
Recoveries   345     626     383     429     548  
Net charge-offs   (1,255 )   (595 )   (1,760 )   (4,381 )   (4,963 )
(Credit) provision for loan and lease losses excluding unfunded commitments *   (2,704 )   (2,768 )   (2,782 )   (1,211 )   5,381  
Allowance for loan and lease losses at end of period $ 102,515   $ 106,474   $ 109,837   $ 114,379   $ 119,971  
           
Allowance for loan and lease losses as a percentage of total loans and leases   1.48 %   1.52 %   1.51 %   1.57 %   1.62 %
           
NET CHARGE-OFFS:          
Commercial real estate loans $ (1 ) $ 17   $ -   $ 3,444   $ 70  
Commercial loans and leases   1,276     695     1,809     1,011     4,917  
Consumer loans   (20 )   (117 )   (49 )   (74 )   (24 )
Total net charge-offs $ 1,255   $ 595   $ 1,760   $ 4,381   $ 4,963  
           
Net loan and lease charge-offs as a percentage of average loans and leases (annualized)   0.07 %   0.03 %   0.10 %   0.24 %   0.27 %
           
*Provision for loan and lease losses does not include (credit) provision of $(0.4) million, $(0.6) million, $0.6 million, $(0.9) million and $(0.9) million for credit losses on unfunded commitments during the three months ended September 30, 2021, June 30, 2021, March 31, 2021, December 31, 2020 and September 30, 2020, respectively.          
 
           

 

BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Average Yields / Costs (Unaudited)
  Three Months Ended
  September 30, 2021 June 30, 2021 September 30, 2020
  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) $ 713,593 $ 2,967 1.66 % $ 721,029 $ 3,121 1.73 % $ 851,608 $ 3,746 1.76 %
Marketable and restricted equity securities (2)   28,877   313 4.33 %   34,989   233 2.67 %   66,154   670 4.06 %
Short-term investments   220,110   83 0.15 %   234,317   42 0.07 %   192,446   46 0.10 %
Total investments   962,580   3,363 1.40 %   990,335   3,396 1.37 %   1,110,208   4,462 1.61 %
Loans and Leases:                  
Commercial real estate loans (3)   3,851,677   35,124 3.57 %   3,780,920   34,320 3.59 %   3,831,826   35,615 3.64 %
Commercial loans (3)   901,862   11,715 5.09 %   1,115,910   13,040 4.62 %   1,281,202   10,677 3.27 %
Equipment financing (3)   1,079,059   17,725 6.57 %   1,074,469   17,963 6.69 %   1,089,058   19,018 6.99 %
Residential mortgage loans (3)   788,874   6,989 3.54 %   788,296   6,927 3.51 %   814,559   7,860 3.86 %
Other consumer loans (3)   364,914   2,830 3.07 %   368,845   2,833 3.08 %   395,990   3,127 3.13 %
Total loans and leases   6,986,386   74,383 4.26 %   7,128,440   75,083 4.21 %   7,412,635   76,297 4.12 %
Total interest-earning assets   7,948,966   77,746 3.91 %   8,118,775   78,479 3.87 %   8,522,843   80,759 3.79 %
Non-interest-earning assets   411,669       421,453       495,829    
Total assets $ 8,360,635     $ 8,540,228     $ 9,018,672    
                   
Liabilities and Stockholders' Equity:                  
Interest-bearing liabilities:                  
Deposits:                  
NOW accounts $ 502,093   116 0.09 % $ 499,883   146 0.12 % $ 427,009   128 0.12 %
Savings accounts   785,657   248 0.12 %   774,406   248 0.13 %   688,223   258 0.15 %
Money market accounts   2,387,080   1,616 0.27 %   2,247,997   1,497 0.27 %   1,855,803   1,658 0.36 %
Certificates of deposit   1,160,113   2,430 0.83 %   1,226,668   3,102 1.01 %   1,536,969   7,022 1.82 %
Brokered deposit accounts   216,112   161 0.30 %   418,166   387 0.37 %   562,112   1,517 1.07 %
Total interest-bearing deposits   5,051,055   4,571 0.36 %   5,167,120   5,380 0.42 %   5,070,116   10,583 0.83 %
Borrowings                  
Advances from the FHLBB   119,043   1,152 3.79 %   250,102   663 1.05 %   944,865   2,876 1.19 %
Subordinated debentures and notes   83,840   1,242 5.92 %   83,802   1,242 5.93 %   83,687   1,246 5.96 %
Other borrowed funds   76,380   33 0.17 %   74,285   31 0.17 %   118,969   61 0.21 %
Total borrowings   279,263   2,427 3.40 %   408,189   1,936 1.88 %   1,147,521   4,183 1.43 %
Total interest-bearing liabilities   5,330,318   6,998 0.52 %   5,575,309   7,316 0.53 %   6,217,637   14,766 0.94 %
Non-interest-bearing liabilities:                  
Demand checking accounts   1,827,501       1,785,023       1,569,411    
Other non-interest-bearing liabilities   224,445       222,689       296,992    
Total liabilities   7,382,264       7,583,021       8,084,040    
Stockholders’ equity   978,371       957,207       934,632    
Total liabilities and equity $ 8,360,635     $ 8,540,228     $ 9,018,672    
Net interest income (tax-equivalent basis) /Interest-rate spread (4)     70,748 3.39 %     71,163 3.34 %     65,993 2.85 %
Less adjustment of tax-exempt income     51       57       55  
Net interest income   $ 70,697     $ 71,106     $ 65,938  
Net interest margin (5)     3.53 %     3.52 %     3.08 %
                   
(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)
  Nine Months Ended
  September 30, 2021 September 30, 2020
  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) $ 729,623 $ 9,206 1.68 % $ 744,065 $ 10,489 1.88 %
Marketable and restricted equity securities (2)   36,451   847 3.10 %   65,367   2,371 4.84 %
Short-term investments   215,496   164 0.10 %   174,177   354 0.27 %
Total investments   981,570   10,217 1.39 %   983,609   13,214 1.79 %
Loans and Leases:            
Commercial real estate loans (3)   3,806,405   103,689 3.59 %   3,763,750   112,912 3.94 %
Commercial loans (3)   1,087,924   37,501 4.55 %   1,100,346   29,455 3.52 %
Equipment financing (3)   1,077,522   53,731 6.65 %   1,070,433   56,937 7.09 %
Residential mortgage loans (3)   786,015   21,148 3.59 %   813,196   23,862 3.91 %
Other consumer loans (3)   369,744   8,458 3.05 %   408,332   10,235 3.33 %
Total loans and leases   7,127,610   224,527 4.20 %   7,156,057   233,401 4.35 %
Total interest-earning assets   8,109,180   234,744 3.86 %   8,139,666   246,615 4.04 %
Non-interest-earning assets   427,880       479,809    
Total assets $ 8,537,060     $ 8,619,475    
             
Liabilities and Stockholders' Equity:            
Interest-bearing liabilities:            
Deposits:            
NOW accounts $ 493,378   392 0.11 % $ 394,057   358 0.12 %
Savings accounts   757,864   731 0.13 %   659,754   1,258 0.25 %
Money market accounts   2,240,968   4,599 0.27 %   1,773,234   7,973 0.60 %
Certificates of deposit   1,237,682   9,686 1.05 %   1,618,818   24,637 2.03 %
Brokered deposit accounts   413,588   1,250 0.40 %   434,409   5,375 1.65 %
Total interest-bearing deposits   5,143,480   16,658 0.43 %   4,880,272   39,601 1.08 %
Borrowings            
Advances from the FHLBB   284,540   3,185 1.48 %   939,821   10,724 1.50 %
Subordinated debentures and notes   83,802   3,726 5.93 %   83,648   3,793 6.05 %
Other borrowed funds   80,960   103 0.17 %   93,698   294 0.42 %
Total borrowings   449,302   7,014 2.06 %   1,117,167   14,811 1.74 %
Total interest-bearing liabilities   5,592,782   23,672 0.57 %   5,997,439   54,412 1.21 %
Non-interest-bearing liabilities:            
Demand checking accounts   1,752,640       1,405,871    
Other non-interest-bearing liabilities   230,834       280,499    
Total liabilities   7,576,256       7,683,809    
Stockholders’ equity   960,804       935,666    
Total liabilities and equity $ 8,537,060     $ 8,619,475    
Net interest income (tax-equivalent basis) /Interest-rate spread (4)     211,072 3.29 %     192,203 2.83 %
Less adjustment of tax-exempt income     160       265  
Net interest income   $ 210,912     $ 191,938  
Net interest margin (5)     3.48 %     3.15 %
             
(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 September 30,
At and for the Nine Months
Ended September 30,
    2021 2020 2021 2020
Reconciliation Table - Non-GAAP Financial Information (Dollars in Thousands Except Share Data)
         
Net income $ 28,839   $ 18,679   $ 86,895   $ 20,972  
Less:          
Security gains (losses) (after-tax)   -     40     (4 )   1,499  
Operating earnings   $ 28,839   $ 18,639   $ 86,899   $ 19,473  
           
Operating earnings per common share:          
Basic   $ 0.37   $ 0.24   $ 1.11   $ 0.25  
Diluted     0.37     0.24     1.11     0.25  
           
Weighted average common shares outstanding during the period:        
Basic     78,000,261     78,948,139     78,097,600     79,092,424  
Diluted     78,240,633     79,055,901     78,371,190     79,245,113  
           
           
Return on average assets *   1.38 %   0.83 %   1.36 %   0.32 %
Less:          
Security gains (losses) (after-tax) *   - %   - %   - %   0.02 %
Operating return on average assets *   1.38 %   0.83 %   1.36 %   0.30 %
           
           
Return on average tangible assets *   1.41 %   0.84 %   1.38 %   0.33 %
Less:          
Security gains (losses) (after-tax) *   - %   - %   - %   0.02 %
Operating return on average tangible assets *   1.41 %   0.84 %   1.38 %   0.31 %
           
           
Return on average stockholders' equity *   11.79 %   7.99 %   12.06 %   2.99 %
Less:          
Security gains (losses) (after-tax) *   - %   0.01 %   - %   0.22 %
Operating return on average stockholders' equity *   11.79 %   7.98 %   12.06 %   2.77 %
           
           
Return on average tangible stockholders' equity *   14.15 %   9.70 %   14.53 %   3.63 %
Less:          
Security gains (losses) (after-tax) *   - %   0.02 %   - %   0.26 %
Operating return on average tangible stockholders' equity *   14.15 %   9.68 %   14.53 %   3.37 %
           
* Ratios at and for the three and nine months ended are annualized.        
           
           
  At and for the Three Months Ended
  September 30,
2021

June 30,
2021

March 31,
2021

December 30,
2020

September 30,
2020
  (Dollars in Thousands)
           
Net income, as reported $ 28,839   $ 31,602   $ 26,454   $ 26,663   $ 18,679  
           
Average total assets $ 8,360,635   $ 8,540,228   $ 8,714,158   $ 8,874,467   $ 9,018,672  
Less: Average goodwill and average identified intangible assets, net   163,011     163,224     163,457     163,758     164,072  
Average tangible assets $ 8,197,624   $ 8,377,004   $ 8,550,701   $ 8,710,709   $ 8,854,600  
           
Return on average tangible assets (annualized)   1.41 %   1.51 %   1.24 %   1.22 %   0.84 %
           
Average total stockholders’ equity $ 978,371   $ 957,207   $ 946,482   $ 937,294   $ 934,632  
Less: Average goodwill and average identified intangible assets, net   163,011     163,224     163,457     163,758     164,072  
Average tangible stockholders’ equity $ 815,360   $ 793,983   $ 783,025   $ 773,536   $ 770,560  
           
Return on average tangible stockholders’ equity (annualized)   14.15 %   15.92 %   13.51 %   13.79 %   9.70 %
           
Total stockholders’ equity $ 978,452   $ 972,252   $ 945,399   $ 941,778   $ 935,558  
Less:          
Goodwill   160,427     160,427     160,427     160,427     160,427  
Identified intangible assets, net   2,484     2,692     2,920     3,152     3,464  
Tangible stockholders' equity $ 815,541   $ 809,133   $ 782,052   $ 778,199   $ 771,667  
           
Total assets $ 8,312,649   $ 8,461,964   $ 8,559,810   $ 8,942,424   $ 9,000,192  
Less:          
Goodwill   160,427     160,427     160,427     160,427     160,427  
Identified intangible assets, net   2,484     2,692     2,920     3,152     3,464  
Tangible assets $ 8,149,738   $ 8,298,845   $ 8,396,463   $ 8,778,845   $ 8,836,301  
           
Tangible stockholders’ equity to tangible assets   10.01 %   9.75 %   9.31 %   8.86 %   8.73 %
           
Tangible stockholders' equity $ 815,541   $ 809,133   $ 782,052   $ 778,199   $ 771,667  
           
Number of common shares issued   85,177,172     85,177,172     85,177,172     85,177,172     85,177,172  
Less:          
Treasury shares   7,034,754     6,536,478     6,534,602     6,525,783     5,629,854  
Unallocated ESOP shares   31,278     37,890     44,502     51,114     58,227  
Unvested restricted shares   502,808     448,105     449,981     458,800     487,318  
Number of common shares outstanding   77,608,332     78,154,699     78,148,087     78,141,475     79,001,773  
           
Tangible book value per common share $ 10.51   $ 10.35   $ 10.01   $ 9.96   $ 9.77  
           
Allowance for loan and lease losses $ 102,515   $ 106,474   $ 109,837   $ 114,379   $ 119,971  
           
Total loans and leases $ 6,931,694   $ 7,020,275   $ 7,267,552   $ 7,269,553   $ 7,396,358  
Less:          
Total PPP loans   160,586     348,411     604,790     489,216     568,383  
Total loans and leases excluding PPP loans $ 6,771,108   $ 6,671,864   $ 6,662,762   $ 6,780,337   $ 6,827,975  
           
Allowance for loan and lease losses as a percentage of total loans and leases less PPP loans   1.51 %   1.60 %   1.65 %   1.69 %   1.76 %
           

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Source: Brookline Bancorp, Inc.