Press Release

Brookline Bancorp Announces Third Quarter Results

Company Release - 10/26/2022

Net Income of $30.1 million , EPS of $0.39

Increases Quarterly Dividend 4%

BOSTON, Oct. 26, 2022 (GLOBE NEWSWIRE) -- Brookline Bancorp, Inc. (NASDAQ: BRKL) (the “Company”) today announced net income of $30.1 million, or $0.39 per basic and diluted share, for the third quarter of 2022, compared to net income of $25.2 million, or $0.33 per basic and diluted share, for the second quarter of 2022, and net income of $28.8 million, or $0.37 per basic and diluted share, for the third quarter of 2021.

Paul Perrault, Chairman and Chief Executive Officer of the Company, commented on third quarter performance, “We experienced another near record quarter of earnings in the third quarter led by our experienced team of bankers who continue to generate solid loan growth while maintaining asset quality."

BALANCE SHEET

Total assets at September 30, 2022 increased $181.5 million to $8.7 billion from $8.5 billion at June 30, 2022, and increased $383.1 million from $8.3 billion at September 30, 2021. At September 30, 2022, total loans and leases were $7.4 billion, representing an increase of $129.4 million from June 30, 2022, and an increase of $489.6 million from September 30, 2021. The loan portfolio grew $129.4 million in the third quarter compared to growth of $68.8 million in the second quarter.

Total investment securities at September 30, 2022 decreased $42.1 million to $675.7 million from $717.8 million at June 30, 2022, and decreased $56.3 million from $732.0 million at September 30, 2021. Total cash and cash equivalents at September 30, 2022 increased $22.2 million to $112.5 million from $90.3 million at June 30, 2022, and decreased $126.6 million from $239.1 million at September 30, 2021. As of September 30, 2022, total investment securities and total cash and cash equivalents represented 9.1 percent of total assets as compared to 9.5 percent and 11.7 percent as of June 30, 2022 and September 30, 2021, respectively.

Total deposits at September 30, 2022 decreased $158.9 million to $6.74 billion from $6.89 billion at June 30, 2022, and decreased $137.4 million from $6.87 billion at September 30, 2021.

Total borrowed funds at September 30, 2022 increased $280.6 million to $758.8 million from $478.2 million at June 30, 2022, and increased $491.3 million from $267.5 million at September 30, 2021.

The ratio of stockholders’ equity to total assets was 11.08 percent at September 30, 2022, as compared to 11.38 percent at June 30, 2022, and 11.77 percent at September 30, 2021. The ratio of tangible stockholders’ equity to tangible assets (non-GAAP) was 9.39 percent at September 30, 2022, as compared to 9.65 percent at June 30, 2022, and 10.01 percent at September 30, 2021. Tangible book value per share (non-GAAP) decreased $0.08 from $10.51 at June 30, 2022 to $10.43 at September 30, 2022, compared to $10.51 at September 30, 2021.

NET INTEREST INCOME

Net interest income increased $6.1 million to $78.0 million for the third quarter of 2022 from $71.9 million for the quarter ended June 30, 2022. The net interest margin increased 24 basis points to 3.80 percent for the three months ended September 30, 2022 from 3.56 percent for the three months ended June 30, 2022.

NON-INTEREST INCOME

Total non-interest income for the quarter ended September 30, 2022 decreased $0.1 million to $6.8 million from $6.9 million for the quarter ended June 30, 2022. The decrease was primarily driven by a decrease of $0.3 million in loan level derivative income, net, a decrease of $0.3 million in loan fees, and a decrease of $0.1 million in other non-interest income, partially offset by an increase of $0.6 million in gain on sales of loans and leases.

PROVISION FOR CREDIT LOSSES

The Company recorded a provision for credit losses of $2.8 million for the quarter ended September 30, 2022, compared to $0.2 million for the quarter ended June 30, 2022. Total net recoveries for the third quarter of 2022 were $0.2 million compared to total net charge-offs of $1.2 million in the second quarter of 2022. The decrease of $1.4 million was primarily driven by a decrease in net charge-offs on equipment financing loans of $1.2 million, along with a decrease of $0.2 million on commercial loans. The ratio of net loan and lease charge-offs to average loans and leases on an annualized basis decreased to a negative 1 basis point for the third quarter of 2022 from 7 basis points for the second quarter of 2022.

The allowance for loan and lease losses represented 1.27 percent of total loans and leases at September 30, 2022, compared to 1.28 percent at June 30, 2022, and 1.48 percent at September 30, 2021.

ASSET QUALITY

The ratio of nonperforming loans and leases to total loans and leases was 0.24 percent at September 30, 2022, a decrease from 0.28 percent at June 30, 2022. Total nonaccrual loans and leases decreased $3.1 million to $17.7 million at September 30, 2022 from $20.8 million at June 30, 2022. The ratio of nonperforming assets to total assets was 0.21 percent at September 30, 2022, a decrease from 0.25 percent at June 30, 2022. Total nonperforming assets decreased $3.0 million to $18.3 million at September 30, 2022 from $21.3 million at June 30, 2022.

NON-INTEREST EXPENSE

Non-interest expense for the quarter ended September 30, 2022 increased $0.1 million to $45.0 million from $44.9 million for the quarter ended June 30, 2022. The increase was primarily driven by an increase of $0.5 million in merger and acquisition expense, an increase of $0.1 million in equipment and data processing expense, and an increase of $0.1 million in occupancy expense, partially offset by a decrease of $0.5 million in compensation and employee benefits expense and a decrease of $0.1 million in professional services expense.

PROVISION FOR INCOME TAXES

The effective tax rate was 18.7 percent and 22.9 percent for the three and nine months ended September 30, 2022 compared to 25.2 percent for the three months ended June 30, 2022 and 25.0 percent and 25.1 percent for the three and nine months ended September 30, 2021. The effective tax rate for the three and nine months ended September 30, 2022 is reflective of the recognition of energy tax credits related to financing commercial investments in renewable energy platforms.

RETURNS ON AVERAGE ASSETS AND AVERAGE EQUITY

The annualized return on average assets increased to 1.40 percent during the third quarter 2022 from 1.18 percent for the second quarter of 2022.

The annualized return on average stockholders' equity increased to 12.29 percent during the third quarter of 2022 from 10.32 percent for the second quarter of 2022. The annualized return on average tangible stockholders’ equity increased to 14.72 percent for the third quarter of 2022 from 12.39 percent for the second quarter of 2022.

DIVIDEND DECLARED

The Company’s Board of Directors approved a dividend of $0.135 per share for the quarter ended September 30, 2022, an increase of half a cent from the prior period. The dividend will be paid on November 25, 2022 to stockholders of record on November 11, 2022.

PCSB ACQUISITION

On May 23, 2022, the Company and PCSB Financial Corporation (“PCSB”), the holding company of PCSB Bank, entered into an Agreement and Plan of Merger (the “Merger Agreement”). Pursuant to the Merger Agreement, PCSB will merge with and into the Company, with the Company as the surviving corporation (the “Merger”). Following the Merger, PCSB Bank will operate as a separate bank subsidiary of the Company. Pursuant to the terms of the Merger Agreement, at the effective time of the Merger, each stockholder of PCSB will receive, for each share of PCSB common stock, at the holder’s election, either $22.00 in cash consideration or 1.3284 shares of Company common stock for each share of PCSB common stock, subject to allocation procedures to ensure that 60% of the outstanding shares of PCSB common stock will be converted into Company common stock. The consummation of the Merger is subject to customary closing conditions, including the receipt of regulatory approvals. The Merger is currently expected to be completed in the fourth quarter of 2022.

CONFERENCE CALL

The Company will conduct a conference call/webcast at 1:30 PM Eastern Time on Thursday, October 27, 2022 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://events.q4inc.com/attendee/723147970. 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 454700). 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 929-458-6194 (internationally) and entering the passcode: 941200.

ABOUT BROOKLINE BANCORP, INC.

Brookline Bancorp, Inc., a bank holding company with $8.7 billion in assets and branch locations in Massachusetts and Rhode Island, is headquartered in Boston, Massachusetts and operates as the holding company for Brookline Bank 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 regarding the Company’s business, credit quality, financial condition, liquidity and results of operations. Forward-looking statements 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; the Company and PCSB’s ability to achieve the synergies and value creation contemplated by the proposed acquisition; the Company and PCSB’s ability to successfully integrate operations in the proposed acquisition; the effect of the announcement of the proposed acquisition on the ability of PCSB to maintain relationships with its key partners, customers and employees, and on its operating business generally, changes in consumer behavior due to changing political business and economic conditions (including inflation); changes in information technology, cybersecurity incidents, fraud, natural disasters, war, terrorism, civil unrest, the ongoing COVID-19 pandemic, and future pandemics; the possibility that future credit losses are higher than currently expected due to changes in economic assumptions or adverse economic developments; interest rate changes or volatility, as well as changes in the balance and mix of loans and deposits; changes in loan demand and collectability; and ongoing 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 earnings per common share, operating return on average assets, operating return on average tangible assets, operating return on average stockholders' equity, operating return on average tangible stockholders' equity, 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,
2022
June 30,
2022
March 31,
2022
December 31,
2021
September 30,
2021
  (Dollars In Thousands Except per Share Data)
Earnings Data:          
Net interest income $ 78,026   $ 71,867   $ 69,848   $ 71,461   $ 70,697  
Provision (credit) for credit losses   2,835     227     (160 )   751     (3,110 )
Non-interest income   6,834     6,928     5,529     10,699     5,586  
Non-interest expense   44,959     44,871     42,487     42,909     40,922  
Income before provision for income taxes   37,066     33,697     33,050     38,500     38,471  
Net income   30,149     25,195     24,705     28,545     28,839  
           
Performance Ratios:          
Net interest margin (1)   3.80 %   3.56 %   3.49 %   3.52 %   3.53 %
Interest-rate spread (1)   3.58 %   3.41 %   3.31 %   3.42 %   3.39 %
Return on average assets (annualized)   1.40 %   1.18 %   1.16 %   1.35 %   1.38 %
Return on average tangible assets (annualized) (non-GAAP)   1.43 %   1.21 %   1.18 %   1.38 %   1.41 %
Return on average stockholders' equity (annualized)   12.29 %   10.32 %   9.91 %   11.56 %   11.79 %
Return on average tangible stockholders' equity (annualized) (non-GAAP)   14.72 %   12.39 %   11.84 %   13.84 %   14.15 %
Efficiency ratio (2)   52.98 %   56.95 %   56.37 %   52.23 %   53.64 %
           
Per Common Share Data:          
Net income — Basic $ 0.39   $ 0.33   $ 0.32   $ 0.37   $ 0.37  
Net income — Diluted   0.39     0.33     0.32     0.37     0.37  
Cash dividends declared   0.135     0.130     0.130     0.125     0.125  
Book value per share (end of period)   12.54     12.63     12.65     12.82     12.61  
Tangible book value per share (end of period) (non-GAAP)   10.43     10.51     10.56     10.73     10.51  
Stock price (end of period)   11.65     13.31     15.82     16.19     15.26  
           
Balance Sheet:          
Total assets $ 8,695,708   $ 8,514,230   $ 8,633,736   $ 8,602,622   $ 8,312,649  
Total loans and leases   7,421,304     7,291,912     7,223,130     7,154,457     6,931,694  
Total deposits   6,735,605     6,894,457     7,094,378     7,049,906     6,873,010  
Total stockholders’ equity   963,618     968,496     981,935     995,342     978,452  
           
Asset Quality:          
Nonperforming assets $ 18,312   $ 21,259   $ 26,506   $ 33,177   $ 36,461  
Nonperforming assets as a percentage of total assets   0.21 %   0.25 %   0.31 %   0.39 %   0.44 %
Allowance for loan and lease losses $ 94,169   $ 93,188   $ 95,463   $ 99,084   $ 102,515  
Allowance for loan and lease losses as a percentage of total loans and leases   1.27 %   1.28 %   1.32 %   1.38 %   1.48 %
Net loan and lease (recoveries) charge-offs $ (179 ) $ 1,242   $ 1,947   $ 2,124   $ 1,255  
Net loan and lease charge-offs as a percentage of average loans and leases (annualized)   (0.01 )%   0.07 %   0.11 %   0.12 %   0.07 %
           
Capital Ratios:          
Stockholders’ equity to total assets   11.08 %   11.38 %   11.37 %   11.57 %   11.77 %
Tangible stockholders’ equity to tangible assets (non-GAAP)   9.39 %   9.65 %   9.67 %   9.87 %   10.01 %
           
(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,
2022
June 30,
2022
March 31,
2022
December 31,
2021
September 30,
2021
ASSETS (In Thousands Except Share Data)
Cash and due from banks $ 65,638   $ 50,429   $ 89,032   $ 66,265   $ 28,865  
Short-term investments   46,873     39,900     204,239     261,472     210,279  
Total cash and cash equivalents   112,511     90,329     293,271     327,737     239,144  
Investment securities available-for-sale   675,692     717,818     730,562     720,866     732,020  
Total investment securities   675,692     717,818     730,562     720,866     732,020  
Loans and leases:          
Commercial real estate loans   4,269,512     4,225,754     4,235,325     4,103,040     3,909,011  
Commercial loans and leases   1,933,645     1,860,182     1,800,383     1,887,136     1,869,686  
Consumer loans   1,218,147     1,205,976     1,187,422     1,164,281     1,152,997  
Total loans and leases   7,421,304     7,291,912     7,223,130     7,154,457     6,931,694  
Allowance for loan and lease losses   (94,169 )   (93,188 )   (95,463 )   (99,084 )   (102,515 )
Net loans and leases   7,327,135     7,198,724     7,127,667     7,055,373     6,829,179  
Restricted equity securities   44,760     35,406     29,066     28,981     28,098  
Premises and equipment, net of accumulated depreciation   69,912     69,557     69,365     70,359     70,811  
Right-of-use asset operating leases   18,614     18,226     19,571     20,508     21,879  
Deferred tax asset   56,894     50,736     46,886     38,987     39,643  
Goodwill   160,427     160,427     160,427     160,427     160,427  
Identified intangible assets, net of accumulated amortization   1,902     2,022     2,142     2,276     2,484  
Other real estate owned and repossessed assets   591     507     990     718     601  
Other assets   227,270     170,478     153,789     176,390     188,363  
Total assets $ 8,695,708   $ 8,514,230   $ 8,633,736   $ 8,602,622   $ 8,312,649  
LIABILITIES AND STOCKHOLDERS' EQUITY          
Deposits:          
Demand checking accounts $ 1,848,562   $ 1,845,365   $ 1,903,331   $ 1,888,462   $ 1,816,116  
NOW accounts   597,870     628,791     627,904     604,097     513,032  
Savings accounts   824,789     894,926     967,183     915,804     823,095  
Money market accounts   2,405,680     2,402,992     2,432,377     2,358,306     2,393,362  
Certificate of deposit accounts   924,771     1,006,786     1,048,036     1,117,695     1,141,861  
Brokered deposit accounts   133,933     115,597     115,547     165,542     185,544  
Total deposits   6,735,605     6,894,457     7,094,378     7,049,906     6,873,010  
Borrowed funds:          
Advances from the FHLBB   557,895     307,967     201,236     147,907     113,977  
Subordinated debentures and notes   84,008     83,970     83,934     83,897     83,859  
Other borrowed funds   116,865     86,263     107,727     125,517     69,703  
Total borrowed funds   758,768     478,200     392,897     357,321     267,539  
Operating lease liabilities   18,614     18,226     19,571     20,508     21,879  
Mortgagors’ escrow accounts   5,785     5,771     5,780     6,296     6,455  
Reserve for unfunded credits   19,555     17,511     16,305     14,794     12,736  
Accrued expenses and other liabilities   193,763     131,569     122,870     158,455     152,578  
Total liabilities   7,732,090     7,545,734     7,651,801     7,607,280     7,334,197  
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   735,119     738,544     737,658     736,826     735,990  
Retained earnings, partially restricted   392,779     372,677     357,576     342,639     323,862  
Accumulated other comprehensive income   (70,227 )   (44,977 )   (29,322 )   (110 )   2,615  
Treasury stock, at cost;          
7,730,945, 7,995,888, 7,037,464, 7,037,464, and 7,034,754 shares, respectively   (94,866 )   (98,525 )   (84,718 )   (84,718 )   (84,684 )
Unallocated common stock held by the Employee Stock Ownership Plan;          
4,833, 11,442, 18,051, 24,660, and 31,278 shares, respectively   (39 )   (75 )   (111 )   (147 )   (183 )
Total stockholders' equity   963,618     968,496     981,935     995,342     978,452  
   Total liabilities and stockholders' equity $ 8,695,708   $ 8,514,230   $ 8,633,736   $ 8,602,622   $ 8,312,649  
                               

 

BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Consolidated Statements of Income (Unaudited)
  Three Months Ended
  September 30,
2022
June 30,
2022
March 31,
2022
December 31,
2021
September 30,
2021
  (In Thousands Except Share Data)
Interest and dividend income:          
Loans and leases $ 84,375   $ 74,287   $ 71,721   $ 73,560   $ 74,332  
Debt securities   3,337     3,249     2,996     2,972     2,967  
Marketable and restricted equity securities   467     337     328     325     313  
Short-term investments   464     156     66     88     83  
Total interest and dividend income   88,643     78,029     75,111     76,945     77,695  
Interest expense:          
Deposits   7,354     4,282     3,771     4,055     4,571  
Borrowed funds   3,263     1,880     1,492     1,429     2,427  
Total interest expense   10,617     6,162     5,263     5,484     6,998  
Net interest income   78,026     71,867     69,848     71,461     70,697  
Provision (credit) for credit losses   2,835     227     (160 )   751     (3,110 )
Net interest income after provision for credit losses   75,191     71,640     70,008     70,710     73,807  
Non-interest income:          
Deposit fees   2,759     2,744     2,500     2,653     2,629  
Loan fees   349     666     747     448     487  
Loan level derivative income, net   1,275     1,615     686     3,981     218  
Loss on investment securities, net               (32 )    
Gain on sales of loans and leases held-for-sale   889     291     344     1,933     557  
Other   1,562     1,612     1,252     1,716     1,695  
Total non-interest income   6,834     6,928     5,529     10,699     5,586  
Non-interest expense:          
Compensation and employee benefits   28,306     28,772     26,884     28,598     27,206  
Occupancy   3,906     3,807     4,284     3,558     3,567  
Equipment and data processing   5,066     4,931     5,078     4,576     4,556  
Professional services   1,069     1,219     1,226     1,151     1,072  
FDIC insurance   709     739     728     617     662  
Advertising and marketing   1,337     1,319     1,272     880     1,077  
Amortization of identified intangible assets   120     120     134     208     208  
Merger and acquisition expense   1,073     535              
Other   3,373     3,429     2,881     3,321     2,574  
Total non-interest expense   44,959     44,871     42,487     42,909     40,922  
Income before provision for income taxes   37,066     33,697     33,050     38,500     38,471  
Provision for income taxes   6,917     8,502     8,345     9,955     9,632  
Net income $ 30,149   $ 25,195   $ 24,705   $ 28,545   $ 28,839  
Earnings per common share:          
Basic $ 0.39   $ 0.33   $ 0.32   $ 0.37   $ 0.37  
Diluted $ 0.39   $ 0.33   $ 0.32   $ 0.37   $ 0.37  
Weighted average common shares outstanding during the period:        
Basic   76,779,038     77,091,013     77,617,227     77,610,608     78,000,261  
Diluted   77,007,971     77,419,288     77,926,822     77,864,097     78,240,633  
Dividends paid per common share $ 0.130   $ 0.130   $ 0.125   $ 0.125   $ 0.120  
           

 

BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Consolidated Statements of Income (Unaudited)
   
  Nine Months Ended September 30,
    2022     2021  
  (In Thousands Except Share Data)
Interest and dividend income:    
Loans and leases $ 230,383   $ 224,367  
Debt securities   9,582     9,206  
Marketable and restricted equity securities   1,132     847  
Short-term investments   686     164  
Total interest and dividend income   241,783     234,584  
Interest expense:    
Deposits   15,407     16,658  
Borrowed funds   6,635     7,014  
Total interest expense   22,042     23,672  
Net interest income   219,741     210,912  
Provision (credit) for credit losses   2,902     (8,588 )
Net interest income after provision for credit losses   216,839     219,500  
Non-interest income:    
Deposit Fees   8,003     7,925  
Loan Fees   1,762     1,647  
Loan level derivative income, net   3,576     699  
Loss on investment securities, net       (6 )
Gain on sales of loans and leases held-for-sale   1,524     1,804  
Other   4,426     4,221  
Total non-interest income   19,291     16,290  
Non-interest expense:    
Compensation and employee benefits   83,962     78,188  
Occupancy   11,997     11,403  
Equipment and data processing   15,075     13,746  
Professional services   3,514     3,543  
FDIC insurance   2,176     2,363  
Advertising and marketing   3,928     3,287  
Amortization of identified intangible assets   374     668  
Merger and acquisition expense   1,608      
Other   9,683     6,501  
Total non-interest expense   132,317     119,699  
Income before provision for income taxes   103,813     116,091  
Provision for income taxes   23,764     29,196  
Net income $ 80,049   $ 86,895  
Earnings per common share:    
Basic $ 1.04   $ 1.11  
Diluted $ 1.04   $ 1.11  
Weighted average common shares outstanding during the period:  
Basic   77,159,356     78,097,600  
Diluted   77,448,290     78,371,190  
Dividends paid per common share $ 0.385   $ 0.355  
     

 

BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Asset Quality Analysis (Unaudited)
  At and for the Three Months Ended
  September 30,
2022
June 30,
2022
March 31,
2022
December 31,
2021
September 30,
2021
  (Dollars in Thousands)
NONPERFORMING ASSETS:          
Loans and leases accounted for on a nonaccrual basis:          
Commercial real estate mortgage $ 3,136   $ 6,470   $ 8,313   $ 10,848   $ 10,963  
Total commercial real estate loans   3,136     6,470     8,313     10,848     10,963  
           
Commercial   618     892     1,366     2,318     2,539  
Equipment financing   10,544     10,183     11,685     15,014     17,655  
Condominium association   64     71     77     84     91  
Total commercial loans and leases   11,226     11,146     13,128     17,416     20,285  
           
Residential mortgage   2,741     2,412     3,394     3,909     4,150  
Home equity   616     721     680     285     461  
Other consumer   2     3     1     1     1  
Total consumer loans   3,359     3,136     4,075     4,195     4,612  
           
Total nonaccrual loans and leases   17,721     20,752     25,516     32,459     35,860  
           
Other repossessed assets   591     507     990     718     601  
Total nonperforming assets $ 18,312   $ 21,259   $ 26,506   $ 33,177   $ 36,461  
           
Loans and leases past due greater than 90 days and still accruing $ 9,583   $ 266   $ 4   $ 1   $ 838  
           
Troubled debt restructurings on accrual   9,728     11,524     10,858     12,580     13,526  
Troubled debt restructurings on nonaccrual   4,449     5,097     5,189     6,709     6,655  
Total troubled debt restructurings $ 14,177   $ 16,621   $ 16,047   $ 19,289   $ 20,181  
           
Nonperforming loans and leases as a percentage of total loans and leases   0.24 %   0.28 %   0.35 %   0.45 %   0.52 %
Nonperforming assets as a percentage of total assets   0.21 %   0.25 %   0.31 %   0.39 %   0.44 %
           
PROVISION AND ALLOWANCE FOR LOAN AND LEASE LOSSES:      
Allowance for loan and lease losses at beginning of period $ 93,188   $ 95,463   $ 99,084   $ 102,515   $ 106,474  
Charge-offs   (598 )   (1,533 )   (2,344 )   (2,562 )   (1,600 )
Recoveries   777     291     397     438     345  
Net recoveries (charge-offs)   179     (1,242 )   (1,947 )   (2,124 )   (1,255 )
Provision (credit) for loan and lease losses excluding unfunded commitments *   802     (1,033 )   (1,674 )   (1,307 )   (2,704 )
Allowance for loan and lease losses at end of period $ 94,169   $ 93,188   $ 95,463   $ 99,084   $ 102,515  
           
Allowance for loan and lease losses as a percentage of total loans and leases   1.27 %   1.28 %   1.32 %   1.38 %   1.48 %
           
NET (RECOVERIES) CHARGE-OFFS:          
Commercial real estate loans $ (6 ) $ (6 ) $ 31   $   $ (1 )
Commercial loans and leases   (179 )   1,254     1,948     2,143     1,276  
Consumer loans   6     (6 )   (32 )   (19 )   (20 )
Total net (recoveries) charge-offs $ (179 ) $ 1,242   $ 1,947   $ 2,124   $ 1,255  
           
Net loan and lease charge-offs as a percentage of average loans and leases (annualized)   (0.01 )%   0.07 %   0.11 %   0.12 %   0.07 %
           
*Provision for loan and lease losses does not include provision (credit) of $2.0 million, $1.2 million, $1.5 million, $2.1 million and $(0.4) million for credit losses on unfunded commitments during the three months ended September 30, 2022, June 30, 2022, March 31, 2022, December 31, 2021 and September 30, 2021, respectively.          
           

 

BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Average Yields / Costs (Unaudited)
  Three Months Ended
  September 30, 2022 June 30, 2022 September 30, 2021
  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) $ 714,226   $ 3,337   1.87 % $ 726,374   $ 3,249   1.79 % $ 713,593   $ 2,967   1.66 %
Marketable and restricted equity securities (2)   36,525     467   5.12 %   30,461     337   4.42 %   28,877     313   4.33 %
Short-term investments   66,257     464   2.80 %   99,905     156   0.62 %   220,110     83   0.15 %
Total investments   817,008     4,268   2.09 %   856,740     3,742   1.75 %   962,580     3,363   1.40 %
Loans and Leases:                  
Commercial real estate loans (3)   4,239,155     44,729   4.13 %   4,220,257     38,967   3.65 %   3,851,677     35,124   3.57 %
Commercial loans (3)   731,095     8,492   4.55 %   695,365     7,074   4.03 %   901,862     11,715   5.09 %
Equipment financing (3)   1,157,829     19,042   6.58 %   1,129,606     17,897   6.34 %   1,079,059     17,725   6.57 %
Residential mortgage loans (3)   826,969     7,560   3.66 %   818,826     7,123   3.48 %   788,874     6,989   3.54 %
Other consumer loans (3)   379,999     4,605   4.80 %   376,225     3,274   3.48 %   364,914     2,830   3.07 %
Total loans and leases   7,335,047     84,428   4.60 %   7,240,279     74,335   4.11 %   6,986,386     74,383   4.26 %
Total interest-earning assets   8,152,055     88,696   4.35 %   8,097,019     78,077   3.86 %   7,948,966     77,746   3.91 %
Non-interest-earning assets   434,365         418,311         411,669      
Total assets $ 8,586,420       $ 8,515,330       $ 8,360,635      
                   
Liabilities and Stockholders' Equity:                  
Interest-bearing liabilities:                  
Deposits:                  
NOW accounts $ 607,210     579   0.38 % $ 612,439     216   0.14 % $ 502,093     116   0.09 %
Savings accounts   881,988     664   0.30 %   930,957     211   0.09 %   785,657     248   0.12 %
Money market accounts   2,423,920     4,038   0.66 %   2,429,043     2,073   0.34 %   2,387,080     1,616   0.27 %
Certificates of deposit   964,112     1,803   0.74 %   1,018,471     1,694   0.67 %   1,160,113     2,430   0.83 %
Brokered deposit accounts   117,058     270   0.92 %   115,535     88   0.30 %   216,112     161   0.30 %
Total interest-bearing deposits   4,994,288     7,354   0.58 %   5,106,445     4,282   0.34 %   5,051,055     4,571   0.36 %
Borrowings                  
Advances from the FHLBB   331,840     1,700   2.00 %   183,047     489   1.06 %   119,043     1,152   3.79 %
Subordinated debentures and notes   83,989     1,295   6.17 %   83,952     1,262   6.02 %   83,840     1,242   5.92 %
Other borrowed funds   89,019     268   1.20 %   106,363     129   0.48 %   76,380     33   0.17 %
Total borrowings   504,848     3,263   2.53 %   373,362     1,880   1.99 %   279,263     2,427   3.40 %
Total interest-bearing liabilities   5,499,136     10,617   0.77 %   5,479,807     6,162   0.45 %   5,330,318     6,998   0.52 %
Non-interest-bearing liabilities:                  
Demand checking accounts   1,908,459         1,886,284         1,827,501      
Other non-interest-bearing liabilities   197,446         173,072         224,445      
Total liabilities   7,605,041         7,539,163         7,382,264      
Stockholders’ equity   981,379         976,167         978,371      
Total liabilities and equity $ 8,586,420       $ 8,515,330       $ 8,360,635      
Net interest income (tax-equivalent basis) /Interest-rate spread (4)     78,079   3.58 %     71,915   3.41 %     70,748   3.39 %
Less adjustment of tax-exempt income     53         48         51    
Net interest income   $ 78,026       $ 71,867       $ 70,697    
Net interest margin (5)     3.80 %     3.56 %     3.53 %
                   
(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, 2022 September 30, 2021
  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) $ 720,266   $ 9,582   1.77 % $ 729,623   $ 9,206   1.68 %
Marketable and restricted equity securities (2)   31,663     1,132   4.77 %   36,451     847   3.10 %
Short-term investments   119,083     686   0.77 %   215,496     164   0.10 %
Total investments   871,012     11,400   1.75 %   981,570     10,217   1.39 %
Loans and Leases:            
Commercial real estate loans (3)   4,204,260     119,723   3.76 %   3,806,405     103,689   3.59 %
Commercial loans (3)   727,333     23,564   4.28 %   1,087,924     37,501   4.55 %
Equipment financing (3)   1,131,069     54,951   6.48 %   1,077,522     53,731   6.65 %
Residential mortgage loans (3)   816,992     21,675   3.54 %   786,015     21,148   3.59 %
Other consumer loans (3)   374,302     10,629   3.79 %   369,744     8,458   3.05 %
Total loans and leases   7,253,956     230,542   4.24 %   7,127,610     224,527   4.20 %
Total interest-earning assets   8,124,968     241,942   3.97 %   8,109,180     234,744   3.86 %
Non-interest-earning assets   419,501         427,880      
Total assets $ 8,544,469       $ 8,537,060      
             
Liabilities and Stockholders' Equity:            
Interest-bearing liabilities:            
Deposits:            
NOW accounts $ 603,243     898   0.20 % $ 493,378     392   0.11 %
Savings accounts   915,185     1,073   0.16 %   757,864     731   0.13 %
Money market accounts   2,423,207     7,681   0.42 %   2,240,968     4,599   0.27 %
Certificates of deposit   1,024,303     5,345   0.70 %   1,237,682     9,686   1.05 %
Brokered deposit accounts   121,724     410   0.45 %   413,588     1,250   0.40 %
Total interest-bearing deposits   5,087,662     15,407   0.40 %   5,143,480     16,658   0.43 %
Borrowings            
Advances from the FHLBB   207,090     2,376   1.51 %   284,540     3,185   1.48 %
Subordinated debentures and notes   83,952     3,801   6.04 %   83,802     3,726   5.93 %
Other borrowed funds   108,337     458   0.57 %   80,960     103   0.17 %
Total borrowings   399,379     6,635   2.19 %   449,302     7,014   2.06 %
Total interest-bearing liabilities   5,487,041     22,042   0.54 %   5,592,782     23,672   0.57 %
Non-interest-bearing liabilities:            
Demand checking accounts   1,891,698         1,752,640      
Other non-interest-bearing liabilities   180,842         230,834      
Total liabilities   7,559,581         7,576,256      
Stockholders’ equity   984,888         960,804      
Total liabilities and equity $ 8,544,469       $ 8,537,060      
Net interest income (tax-equivalent basis) /Interest-rate spread (4)     219,900   3.43 %     211,072   3.29 %
Less adjustment of tax-exempt income     159         160    
Net interest income   $ 219,741       $ 210,912    
Net interest margin (5)     3.62 %     3.48 %
             
(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,
      2022     2021     2022     2021  
Reconciliation Table - Non-GAAP Financial Information     (Dollars in Thousands Except Share Data)
         
Net income $ 30,149   $ 28,839   $ 80,049   $ 86,895  
Less:          
Security gains (losses) (after-tax)               (4 )
Add:          
Merger and acquisition expenses (after-tax)   872         1,240      
Operating earnings   $ 31,021   $ 28,839   $ 81,289   $ 86,899  
           
Operating earnings per common share:          
Basic   $ 0.40   $ 0.37   $ 1.05   $ 1.11  
Diluted     0.40     0.37     1.05     1.11  
           
Weighted average common shares outstanding during the period:        
Basic     76,779,038     78,000,261     77,159,356     78,097,600  
Diluted     77,007,971     78,240,633     77,448,290     78,371,190  
           
           
Return on average assets *   1.40 %   1.38 %   1.25 %   1.36 %
Add:          
Merger and acquisition expenses (after-tax) *   0.04 %   %   0.02 %   %
Operating return on average assets *   1.44 %   1.38 %   1.27 %   1.36 %
           
           
Return on average tangible assets *   1.43 %   1.41 %   1.27 %   1.38 %
Add:          
Merger and acquisition expenses (after-tax) *   0.04 %   %   0.02 %   %
Operating return on average tangible assets *   1.47 %   1.41 %   1.29 %   1.38 %
           
           
Return on average stockholders' equity *   12.29 %   11.79 %   10.84 %   12.06 %
Add:          
Merger and acquisition expenses (after-tax) *   0.36 %   %   0.17 %   %
Operating return on average stockholders' equity *   12.65 %   11.79 %   11.01 %   12.06 %
           
           
Return on average tangible stockholders' equity *   14.72 %   14.15 %   12.98 %   14.53 %
Add:          
Merger and acquisition expenses (after-tax) *   0.43 %   %   0.20 %   %
Operating return on average tangible stockholders' equity *   15.15 %   14.15 %   13.18 %   14.53 %
           
* Ratios at and for the three and nine months ended are annualized.        
           
           
  At and for the Three Months Ended
  September 30,
2022
June 30,
2022
March 31,
2022
December 31,
2021
September 30,
2021
  (Dollars in Thousands)
           
Net income, as reported $ 30,149   $ 25,195   $ 24,705   $ 28,545   $ 28,839  
           
Average total assets $ 8,586,420   $ 8,515,330   $ 8,531,043   $ 8,462,231   $ 8,360,635  
Less: Average goodwill and average identified intangible assets, net   162,387     162,507     162,632     162,804     163,011  
Average tangible assets $ 8,424,033   $ 8,352,823   $ 8,368,411   $ 8,299,427   $ 8,197,624  
           
Return on average tangible assets (annualized)   1.43 %   1.21 %   1.18 %   1.38 %   1.41 %
           
Average total stockholders’ equity $ 981,379   $ 976,167   $ 997,293   $ 987,522   $ 978,371  
Less: Average goodwill and average identified intangible assets, net   162,387     162,507     162,632     162,804     163,011  
Average tangible stockholders’ equity $ 818,992   $ 813,660   $ 834,661   $ 824,718   $ 815,360  
           
Return on average tangible stockholders’ equity (annualized)   14.72 %   12.39 %   11.84 %   13.84 %   14.15 %
           
Total stockholders’ equity $ 963,618   $ 968,496   $ 981,935   $ 995,342   $ 978,452  
Less:          
Goodwill   160,427     160,427     160,427     160,427     160,427  
Identified intangible assets, net   1,902     2,022     2,142     2,276     2,484  
Tangible stockholders' equity $ 801,289   $ 806,047   $ 819,366   $ 832,639   $ 815,541  
           
Total assets $ 8,695,708   $ 8,514,230   $ 8,633,736   $ 8,602,622   $ 8,312,649  
Less:          
Goodwill   160,427     160,427     160,427     160,427     160,427  
Identified intangible assets, net   1,902     2,022     2,142     2,276     2,484  
Tangible assets $ 8,533,379   $ 8,351,781   $ 8,471,167   $ 8,439,919   $ 8,149,738  
           
Tangible stockholders’ equity to tangible assets   9.39 %   9.65 %   9.67 %   9.87 %   10.01 %
           
Tangible stockholders' equity $ 801,289   $ 806,047   $ 819,366   $ 832,639   $ 815,541  
           
Number of common shares issued   85,177,172     85,177,172     85,177,172     85,177,172     85,177,172  
Less:          
Treasury shares   7,730,945     7,995,888     7,037,464     7,037,464     7,034,754  
Unallocated ESOP shares   4,833     11,442     18,051     24,660     31,278  
Unvested restricted shares   601,995     497,297     500,098     500,098     502,808  
Number of common shares outstanding   76,839,399     76,672,545     77,621,559     77,614,950     77,608,332  
           
Tangible book value per common share $ 10.43   $ 10.51   $ 10.56   $ 10.73   $ 10.51  
           

 


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Source: Brookline Bancorp, Inc.