Press Release

Brookline Bancorp Announces First Quarter Results Reflecting One-Time Costs Associated with PCSB Financial Corporation Acquisition

Company Release - 4/26/2023

Net Income of $7.6 million , EPS of $0.09

Operating Earnings of $23.3 million, Operating EPS of $0.27

BOSTON, April 26, 2023 (GLOBE NEWSWIRE) -- Brookline Bancorp, Inc. (NASDAQ: BRKL) (the “Company”) today announced net income of $7.6 million, or $0.09 per basic and diluted share, for the first quarter of 2023, compared to net income of $29.7 million, or $0.39 per basic and diluted share, for the fourth quarter of 2022, and net income of $24.7 million, or $0.32 per basic and diluted share, for the first quarter of 2022.

Financial results for the first quarter of 2023 reflect pre-tax one-time costs of $21.5 million associated with the acquisition of PCSB Financial Corporation ("PCSB") and its subsidiary, PCSB Bank, which closed January 1, 2023. Excluding these one-time costs, operating earnings was $23.3 million, or $0.27 per diluted share, for the first quarter of 2023. These one-time costs consist of merger-related costs of $6.4 million associated with the acquisition and $16.7 million of provision for credit losses expense attributable to the closing of the acquisition, partially offset by $1.7 million in securities gains. Please refer to "Non-GAAP Financial Information" below for a reconciliation of net income to operating earnings.

"I am very pleased to report we successfully completed the acquisition and conversion of PCSB Financial and PCSB Bank," said Paul Perrault, Brookline Bancorp, Inc. Chairman and Chief Executive Officer. "Our acquisition assures that PCSB Bank will remain well positioned to continue its growth in the New York market. Like all financial institutions, we continue to monitor the recent developments in the banking sector and in our markets, to take advantage of opportunities as they present themselves.”

PCSB FINANCIAL CORPORATION

On January 1, 2023, the Company completed its previously announced acquisition (the “merger”) of PCSB. PCSB’s bank subsidiary, PCSB Bank, now operates as a separate subsidiary of the Company and has 15 banking offices throughout Westchester County and the lower Hudson Valley of New York state. The transaction included the acquisition of approximately $1.3 billion in loans, the assumption of $1.6 billion in deposits, and $52.9 million of borrowings, each at fair value. Total consideration of $297.8 million consisted of 11,820,904 shares of the Company's common stock issued and cash of $130.5 million.

The following table provides the purchase price allocation of net assets acquired for this transaction:

Assets:  
Cash $ 42,373  
Investments   366,763  
Loans   1,336,737  
Allowance for credit losses on PCD Loans   (2,344 )
Bank premises and equipment   14,631  
Goodwill   80,813  
CDI   30,265  
Other Assets   104,663  
Total Assets Acquired $ 1,973,901  
   
Liabilities:  
Deposits $ 1,570,563  
Borrowings   52,923  
Other Liabilities   52,624  
Total Liabilities $ 1,676,110  
Purchase Price $ 297,791  
       

BALANCE SHEET

Total assets at March 31, 2023 increased $2.3 billion to $11.5 billion from $9.2 billion at December 31, 2022, and increased $2.9 billion from $8.6 billion at March 31, 2022. At March 31, 2023, total loans and leases were $9.2 billion, representing an increase of $1.6 billion from December 31, 2022, and an increase of $2.0 billion from March 31, 2022. The loan portfolio grew $1.6 billion in the first quarter compared to growth of $223.1 million in the fourth quarter.

Total investment securities at March 31, 2023 increased $410.3 million to $1.1 billion from $656.8 million at December 31, 2022, and increased $336.5 million from $730.6 million at March 31, 2022. Total cash and cash equivalents at March 31, 2023 increased $103.3 million to $486.3 million from $383.0 million at December 31, 2022, and increased $193.0 million from $293.3 million at March 31, 2022. As of March 31, 2023, total investment securities and total cash and cash equivalents represented 13.5 percent of total assets as compared to 11.3 percent and 11.9 percent as of December 31, 2022 and March 31, 2022, respectively.

Total deposits at March 31, 2023 increased $1.9 billion to $8.5 billion from $6.5 billion at December 31, 2022, and increased $1.4 billion from $7.1 billion at March 31, 2022.

Total borrowed funds at March 31, 2023 increased $197.5 million to $1.6 billion from $1.4 billion at December 31, 2022, and increased $1.2 billion from $392.9 million at March 31, 2022.

The ratio of stockholders’ equity to total assets was 10.11 percent at March 31, 2023, as compared to 10.80 percent at December 31, 2022, and 11.37 percent at March 31, 2022. The ratio of tangible stockholders’ equity to tangible assets (non-GAAP) was 7.94 percent at March 31, 2023, as compared to 9.20 percent at December 31, 2022, and 9.67 percent at March 31, 2022. Tangible book value per share (non-GAAP) decreased $0.72 from $10.80 at December 31, 2022 to $10.08 at March 31, 2023, compared to $10.56 at March 31, 2022.

NET INTEREST INCOME

Net interest income increased $6.0 million to $86.0 million for the first quarter of 2023 from $80.0 million for the quarter ended December 31, 2022. The net interest margin decreased 45 basis points to 3.36 percent for the three months ended March 31, 2023 from 3.81 percent for the three months ended December 31, 2022.

NON-INTEREST INCOME

Total non-interest income for the quarter ended March 31, 2023 increased $3.9 million to $12.9 million from $9.1 million for the quarter ended December 31, 2022. The increase was primarily driven by increases of $2.1 million in other non-interest income which was primarily driven by the mark to market on interest rate swaps on participated loans and bank owned life insurance income, $1.7 million in loan level derivative income, net, and $1.4 million in gain on securities, net, partially offset by a decrease of $1.0 million in gain on sales of loans and leases and a decrease of $0.3 million in deposit fees.

PROVISION FOR CREDIT LOSSES

The Company recorded a provision for credit losses of $25.5 million for the quarter ended March 31, 2023, compared to $5.7 million for the quarter ended December 31, 2022. The increase in the provision for credit losses was primarily driven by the acquisition of PCSB Bank as well as loan growth.

Total net charge-offs for the first quarter of 2023 were $0.5 million compared to $0.3 million in the fourth quarter of 2022. The increase was primarily driven by an increase in net charge-offs on equipment financing loans of $0.2 million. The ratio of net loan and lease charge-offs to average loans and leases on an annualized basis was 2 basis points for the first quarter of 2023, unchanged from 2 basis points for the fourth quarter of 2022.

The allowance for loan and lease losses represented 1.31 percent of total loans and leases at March 31, 2023, compared to 1.29 percent at December 31, 2022, and 1.32 percent at March 31, 2022.

ASSET QUALITY

The ratio of nonperforming loans and leases to total loans and leases was 0.31 percent at March 31, 2023, an increase from 0.19 percent at December 31, 2022. Total nonaccrual loans and leases increased $13.6 million to $28.5 million at March 31, 2023 from $14.9 million at December 31, 2022. The ratio of nonperforming assets to total assets was 0.25 percent at March 31, 2023, an increase from 0.17 percent at December 31, 2022. Total nonperforming assets increased $13.7 million to $29.0 million at March 31, 2023 from $15.3 million at December 31, 2022. The increase in nonperforming assets was primarily driven by the acquisition of PCSB in addition to a single C&I loan relationship.

NON-INTEREST EXPENSE

Non-interest expense for the quarter ended March 31, 2023 increased $17.6 million to $64.8 million from $47.2 million for the quarter ended December 31, 2022. The increase was primarily driven by increases of $7.0 million in compensation and employee benefits expense, $5.8 million in merger and acquisition expense, $1.8 million in amortization of identified intangible assets expense, $1.2 million in occupancy, $0.7 million in equipment and data processing expense, $0.4 million in advertising and marketing expense, $0.5 million in other non-interest expense, and $0.2 million in FDIC insurance expense, partially offset by a decrease of $0.1 million in professional services expense.

PROVISION FOR INCOME TAXES

The effective tax rate was 12.8 percent for the three months ended March 31, 2023 compared to 17.8 percent for the three months ended December 31, 2022 and 25.2 percent for the three months ended March 31, 2022.

RETURNS ON AVERAGE ASSETS AND AVERAGE EQUITY

The annualized return on average assets decreased to 0.27 percent during the first quarter 2023 from 1.34 percent for the fourth quarter of 2022.

The annualized return on average stockholders' equity decreased to 2.61 percent during the first quarter of 2023 from 12.09 percent for the fourth quarter of 2022. The annualized return on average tangible stockholders’ equity decreased to 3.43 percent for the first quarter of 2023 from 14.48 percent for the fourth quarter of 2022.

DIVIDEND DECLARED

The Company’s Board of Directors approved a dividend of $0.135 per share for the quarter ended March 31, 2023. The dividend will be paid on May 26, 2023 to stockholders of record on May 12, 2023.

CONFERENCE CALL

The Company will conduct a conference call/webcast at 1:30 PM Eastern Time on Thursday, April 27, 2023 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/119704415. To listen to the call without access to the slides, interested parties may dial 833-470-1428 (United States) or 404-975-4839 (internationally) and ask for the Brookline Bancorp, Inc. conference call (Access Code 576006). 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 204-525-0658 (internationally) and entering the passcode: 989324.

ABOUT BROOKLINE BANCORP, INC.

Brookline Bancorp, Inc., a bank holding company with $11.5 billion in assets and branch locations in Massachusetts, Rhode Island, and the Lower Hudson Valley of New York State, is headquartered in Boston, Massachusetts and operates as the holding company for Brookline Bank, Bank Rhode Island, and PCSB Bank (the "banks"). The Company provides commercial and retail banking services, cash management and investment services to customers throughout Central New England and the Lower Hudson Valley of New York State. More information about Brookline Bancorp, Inc. and its banks can be found at the following websites: www.brooklinebank.com, www.bankri.com and www.pcsb.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 include, but are not limited to, the Company’s ability to achieve the synergies and value creation contemplated by the acquisition of PCSB; turbulence in the capital and debt markets; changes in interest rates; competitive pressures from other financial institutions; general economic conditions (including inflation and concerns about liquidity) on a national basis or 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; changes in the value of securities and other assets in the Company’s investment portfolio; increases in loan and lease default and charge-off rates; the adequacy of allowances for loan and lease losses; decreases in deposit levels that necessitate increases in borrowing to fund loans and investments; operational risks including, but not limited to, cybersecurity incidents, fraud, natural disasters, and future pandemics; changes in regulation; the possibility that future credit losses may be higher than currently expected due to changes in economic assumptions and adverse economic developments; the risk that goodwill and intangibles recorded in the Company’s financial statements will become impaired; and changes in assumptions used in making such forward-looking statements. 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
 
  March 31,
2023
  December 31,
2022
  September 30,
2022
  June 30,
2022
  March 31,
2022
  (Dollars In Thousands Except per Share Data)
Earnings Data:                            
Net interest income $ 86,049     $ 80,030     $ 78,026     $ 71,867     $ 69,848  
Provision (credit) for credit losses 25,542     5,725     2,835     227     (160 )
Non-interest income 12,937     9,056     6,834     6,928     5,529  
Non-interest expense 64,776     47,225     44,959     44,871     42,487  
Income before provision for income taxes 8,668     36,136     37,066     33,697     33,050  
Net income 7,560     29,695     30,149     25,195     24,705  
                             
Performance Ratios:                            
Net interest margin (1) 3.36 %   3.81 %   3.80 %   3.56 %   3.49 %
Interest-rate spread (1) 2.66 %   3.35 %   3.58 %   3.41 %   3.31 %
Return on average assets (annualized) 0.27 %   1.34 %   1.40 %   1.18 %   1.16 %
Return on average tangible assets (annualized) (non-GAAP) 0.28 %   1.37 %   1.43 %   1.21 %   1.18 %
Return on average stockholders' equity (annualized) 2.61 %   12.09 %   12.29 %   10.32 %   9.91 %
Return on average tangible stockholders' equity (annualized) (non-GAAP) 3.43 %   14.48 %   14.72 %   12.39 %   11.84 %
Efficiency ratio (2) 65.44 %   53.01 %   52.98 %   56.95 %   56.37 %
                             
Per Common Share Data:                            
Net income — Basic $ 0.09     $ 0.39     $ 0.39     $ 0.33     $ 0.32  
Net income — Diluted 0.09     0.39     0.39     0.33     0.32  
Cash dividends declared 0.135     0.135     0.135     0.130     0.130  
Book value per share (end of period) 13.14     12.91     12.54     12.63     12.65  
Tangible book value per share (end of period) (non-GAAP) 10.08     10.80     10.43     10.51     10.56  
Stock price (end of period) 10.50     14.15     11.65     13.31     15.82  
                             
Balance Sheet:                            
Total assets $ 11,522,485     $ 9,185,836     $ 8,695,708     $ 8,514,230     $ 8,633,736  
Total loans and leases 9,246,965     7,644,388     7,421,304     7,291,912     7,223,130  
Total deposits 8,456,462     6,522,146     6,735,605     6,894,457     7,094,378  
Total stockholders’ equity 1,165,066     992,125     963,618     968,496     981,935  
                             
Asset Quality:                            
Nonperforming assets $ 28,962     $ 15,302     $ 18,312     $ 21,259     $ 26,506  
Nonperforming assets as a percentage of total assets 0.25 %   0.17 %   0.21 %   0.25 %   0.31 %
Allowance for loan and lease losses $ 120,865     $ 98,482     $ 94,169     $ 93,188     $ 95,463  
Allowance for loan and lease losses as a percentage of total loans and leases 1.31 %   1.29 %   1.27 %   1.28 %   1.32 %
Net loan and lease charge-offs (recoveries) $ 451     $ 310     $ (179 )   $ 1,242     $ 1,947  
Net loan and lease charge-offs as a percentage of average loans and leases (annualized) 0.02 %   0.02 %   (0.01 )%   0.07 %   0.11 %
                             
Capital Ratios:                            
Stockholders’ equity to total assets 10.11 %   10.80 %   11.08 %   11.38 %   11.37 %
Tangible stockholders’ equity to tangible assets (non-GAAP) 7.94 %   9.20 %   9.39 %   9.65 %   9.67 %
                             
(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)
           
  March 31,
2023
December 31,
2022
September 30,
2022
June 30,
2022
March 31,
2022
ASSETS (In Thousands Except Share Data)
Cash and due from banks $ 30,782   $ 191,767   $ 65,638   $ 50,429   $ 89,032  
Short-term investments   455,538     191,192     46,873     39,900     204,239  
Total cash and cash equivalents   486,320     382,959     112,511     90,329     293,271  
Investment securities available-for-sale   1,067,032     656,766     675,692     717,818     730,562  
Total investment securities   1,067,032     656,766     675,692     717,818     730,562  
Loans and leases:          
Commercial real estate loans   5,610,414     4,404,148     4,269,512     4,225,754     4,235,325  
Commercial loans and leases   2,147,149     2,016,499     1,933,645     1,860,182     1,800,383  
Consumer loans   1,489,402     1,223,741     1,218,147     1,205,976     1,187,422  
Total loans and leases   9,246,965     7,644,388     7,421,304     7,291,912     7,223,130  
Allowance for loan and lease losses   (120,865 )   (98,482 )   (94,169 )   (93,188 )   (95,463 )
Net loans and leases   9,126,100     7,545,906     7,327,135     7,198,724     7,127,667  
Restricted equity securities   86,230     71,307     44,760     35,406     29,066  
Premises and equipment, net of accumulated depreciation   87,799     71,391     69,912     69,557     69,365  
Right-of-use asset operating leases   30,067     19,484     18,614     18,226     19,571  
Deferred tax asset   75,028     52,237     56,894     50,736     46,886  
Goodwill   241,222     160,427     160,427     160,427     160,427  
Identified intangible assets, net of accumulated amortization   30,080     1,781     1,902     2,022     2,142  
Other real estate owned and repossessed assets   508     408     591     507     990  
Other assets   292,099     223,170     227,270     170,478     153,789  
Total assets $ 11,522,485   $ 9,185,836   $ 8,695,708   $ 8,514,230   $ 8,633,736  
LIABILITIES AND STOCKHOLDERS' EQUITY          
Deposits:          
Demand checking accounts $ 1,899,370   $ 1,802,518   $ 1,848,562   $ 1,845,365   $ 1,903,331  
NOW accounts   757,411     544,118     597,870     628,791     627,904  
Savings accounts   1,268,375     762,271     824,789     894,926     967,183  
Money market accounts   2,185,971     2,174,952     2,405,680     2,402,992     2,432,377  
Certificate of deposit accounts   1,362,970     928,143     924,771     1,006,786     1,048,036  
Brokered deposit accounts   982,365     310,144     133,933     115,597     115,547  
Total deposits   8,456,462     6,522,146     6,735,605     6,894,457     7,094,378  
Borrowed funds:          
Advances from the FHLBB   1,458,457     1,237,823     557,895     307,967     201,236  
Subordinated debentures and notes   84,080     84,044     84,008     83,970     83,934  
Other borrowed funds   87,565     110,785     116,865     86,263     107,727  
Total borrowed funds   1,630,102     1,432,652     758,768     478,200     392,897  
Operating lease liabilities   31,373     19,484     18,614     18,226     19,571  
Mortgagors’ escrow accounts   17,080     5,607     5,785     5,771     5,780  
Reserve for unfunded credits   23,112     20,602     19,555     17,511     16,305  
Accrued expenses and other liabilities   199,290     193,220     193,763     131,569     122,870  
Total liabilities   10,357,419     8,193,711     7,732,090     7,545,734     7,651,801  
Stockholders' equity:          
Common stock, $0.01 par value; 200,000,000 shares authorized; 96,998,075 shares issued, 85,177,172 shares issued, 85,177,172 shares issued, 85,177,172 shares issued, and 85,177,172 shares issued, respectively   970     852     852     852     852  
Additional paid-in capital   904,174     736,074     735,119     738,544     737,658  
Retained earnings, partially restricted   407,528     412,019     392,779     372,677     357,576  
Accumulated other comprehensive income   (52,688 )   (61,947 )   (70,227 )   (44,977 )   (29,322 )
Treasury stock, at cost;          
7,734,891, 7,731,445, 7,730,945, 7,995,888, and 7,037,464 shares, respectively   (94,918 )   (94,873 )   (94,866 )   (98,525 )   (84,718 )
Unallocated common stock held by the Employee Stock Ownership Plan;          
0, 0, 4,833, 11,442, and 18,051 shares, respectively           (39 )   (75 )   (111 )
Total stockholders' equity   1,165,066     992,125     963,618     968,496     981,935  
Total liabilities and stockholders' equity $ 11,522,485   $ 9,185,836   $ 8,695,708   $ 8,514,230   $ 8,633,736  
           

 

 
BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Consolidated Statements of Income (Unaudited)
 
  Three Months Ended
  March 31,
2023
December 31,
2022
September 30,
2022
June 30,
2022
March 31,
2022
  (In Thousands Except Share Data)
Interest and dividend income:          
Loans and leases $ 121,931   $ 98,386   $ 84,375   $ 74,287   $ 71,721  
Debt securities   7,870     3,497     3,337     3,249     2,996  
Restricted equity securities   1,255     766     467     337     328  
Short-term investments   1,495     754     464     156     66  
Total interest and dividend income   132,551     103,403     88,643     78,029     75,111  
Interest expense:          
Deposits   29,368     14,185     7,354     4,282     3,771  
Borrowed funds   17,134     9,188     3,263     1,880     1,492  
Total interest expense   46,502     23,373     10,617     6,162     5,263  
Net interest income   86,049     80,030     78,026     71,867     69,848  
Provision (credit) for credit losses   25,542     5,725     2,835     227     (160 )
Net interest income after provision for credit losses   60,507     74,305     75,191     71,640     70,008  
Non-interest income:          
Deposit fees   2,657     2,916     2,759     2,744     2,500  
Loan fees   391     446     349     666     747  
Loan level derivative income, net   2,373     670     1,275     1,615     686  
Gain on investment securities, net   1,701     321              
Gain on sales of loans and leases held-for-sale   1,638     2,612     889     291     344  
Other   4,177     2,091     1,562     1,612     1,252  
Total non-interest income   12,937     9,056     6,834     6,928     5,529  
Non-interest expense:          
Compensation and employee benefits   36,565     29,525     28,306     28,772     26,884  
Occupancy   5,223     4,005     3,906     3,807     4,284  
Equipment and data processing   6,462     5,758     5,066     4,931     5,078  
Professional services   1,430     1,546     1,069     1,219     1,226  
FDIC insurance   1,244     1,001     709     739     728  
Advertising and marketing   1,410     1,052     1,337     1,319     1,272  
Amortization of identified intangible assets   1,966     120     120     120     134  
Merger and acquisition expense   6,409     641     1,073     535      
Other   4,067     3,577     3,373     3,429     2,881  
Total non-interest expense   64,776     47,225     44,959     44,871     42,487  
Income before provision for income taxes   8,668     36,136     37,066     33,697     33,050  
Provision for income taxes   1,108     6,441     6,917     8,502     8,345  
Net income $ 7,560   $ 29,695   $ 30,149   $ 25,195   $ 24,705  
Earnings per common share:          
Basic $ 0.09   $ 0.39   $ 0.39   $ 0.33   $ 0.32  
Diluted $ 0.09   $ 0.39   $ 0.39   $ 0.33   $ 0.32  
Weighted average common shares outstanding during the period:        
Basic   86,563,641     76,841,655     76,779,038     77,091,013     77,617,227  
Diluted   86,837,806     77,065,076     77,007,971     77,419,288     77,926,822  
Dividends paid per common share $ 0.135   $ 0.135   $ 0.130   $ 0.130   $ 0.125  

 

 
BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Asset Quality Analysis (Unaudited)
 
  At and for the Three Months Ended
  March 31,
2023
December 31,
2022
September 30,
2022
June 30,
2022
March 31,
2022
  (Dollars in Thousands)
NONPERFORMING ASSETS:                              
Loans and leases accounted for on a nonaccrual basis:                              
Commercial real estate mortgage $ 4,589   $ 607   $ 3,136   $ 6,470   $ 8,313  
Construction   3,883     707              
Total commercial real estate loans   8,472     1,314     3,136     6,470     8,313  
                               
Commercial   5,495     464     618     892     1,366  
Equipment financing   9,908     9,653     10,544     10,183     11,685  
Condominium association   51     58     64     71     77  
Total commercial loans and leases   15,454     10,175     11,226     11,146     13,128  
                               
Residential mortgage   3,449     2,680     2,741     2,412     3,394  
Home equity   1,079     723     616     721     680  
Other consumer       2     2     3     1  
Total consumer loans   4,528     3,405     3,359     3,136     4,075  
                               
Total nonaccrual loans and leases   28,454     14,894     17,721     20,752     25,516  
                               
Other repossessed assets   508     408     591     507     990  
Total nonperforming assets $ 28,962   $ 15,302   $ 18,312   $ 21,259   $ 26,506  
                               
Loans and leases past due greater than 90 days and still accruing $ 726   $ 33   $ 9,583   $ 266   $ 4  
                               
Nonperforming loans and leases as a percentage of total loans and leases   0.31 %   0.19 %   0.24 %   0.28 %   0.35 %
Nonperforming assets as a percentage of total assets   0.25 %   0.17 %   0.21 %   0.25 %   0.31 %
                               
PROVISION AND ALLOWANCE FOR LOAN AND LEASE LOSSES:                              
Allowance for loan and lease losses at beginning of period $ 98,482   $ 94,169   $ 93,188   $ 95,463   $ 99,084  
Charge-offs   (845 )   (658 )   (598 )   (1,533 )   (2,344 )
Recoveries   394     348     777     291     397  
Net (charge-offs) recoveries   (451 )   (310 )   179     (1,242 )   (1,947 )
Provision (credit) for loan and lease losses excluding unfunded commitments *   22,834     4,623     802     (1,033 )   (1,674 )
Allowance for loan and lease losses at end of period $ 120,865   $ 98,482   $ 94,169   $ 93,188   $ 95,463  
                               
Allowance for loan and lease losses as a percentage of total loans and leases   1.31 %   1.29 %   1.27 %   1.28 %   1.32 %
                               
NET CHARGE-OFFS (RECOVERIES):                              
Commercial real estate loans $ (6 ) $ (6 ) $ (6 ) $ (6 ) $ 31  
Commercial loans and leases   457     320     (179 )   1,254     1,948  
Consumer loans       (4 )   6     (6 )   (32 )
Total net charge-offs (recoveries) $ 451   $ 310   $ (179 ) $ 1,242   $ 1,947  
                               
Net loan and lease charge-offs as a percentage of average loans and leases (annualized)   0.02 %   0.02 %   (0.01 )%   0.07 %   0.11 %
           
*Provision for loan and lease losses does not include provision of $2.5 million, $1.0 million, $2.0 million, $1.2 million, and $1.5 million for credit losses on unfunded commitments during the three months ended March 31, 2023, December 31, 2022, September 30, 2022, June 30, 2022 and March 31, 2022, respectively.                                   

 

 
BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Average Yields / Costs (Unaudited)
 
  Three Months Ended
  March 31, 2023 December 31, 2022 March 31, 2022
  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) $ 1,029,068   $ 7,974 3.10 %   $ 665,969   $ 3,497 2.10 %   $ 720,263   $ 2,996 1.66 %
Marketable and restricted equity securities (2)   76,911     1,255 6.53 %     52,093     766 5.88 %     27,909     328 4.70 %
Short-term investments   147,654     1,495 4.05 %     60,385     754 5.00 %     192,475     66 0.14 %
Total investments   1,253,633     10,724 3.42 %     778,447     5,017 2.58 %     940,647     3,390 1.44 %
Loans and Leases:                                              
Commercial real estate loans (3)   5,579,977     67,667 4.85 %     4,341,929     53,088 4.78 %     4,152,414     36,027 3.47 %
Commercial loans (3)   892,522     14,017 6.28 %     797,312     10,541 5.18 %     755,809     7,998 4.23 %
Equipment financing (3)   1,226,717     21,213 6.92 %     1,200,911     20,816 6.93 %     1,105,194     18,012 6.52 %
Residential mortgage loans (3)   1,032,025     11,073 4.29 %     842,860     8,051 3.82 %     804,939     6,992 3.47 %
Other consumer loans (3)   420,047     7,997 7.71 %     382,196     5,940 6.15 %     366,534     2,750 3.04 %
Total loans and leases   9,151,288     121,967 5.33 %     7,565,208     98,436 5.20 %     7,184,890     71,779 4.00 %
Total interest-earning assets   10,404,921     132,691 5.10 %     8,343,655     103,453 4.96 %     8,125,537     75,169 3.70 %
Non-interest-earning assets   726,166               513,976               405,506          
Total assets $ 11,131,087             $ 8,857,631             $ 8,531,043          
                                               
Liabilities and Stockholders' Equity:                                              
Interest-bearing liabilities:                                              
Deposits:                                              
NOW accounts $ 810,333     901 0.45 %   $ 583,499     257 0.18 %   $ 589,891     103 0.07 %
Savings accounts   1,160,003     2,514 0.88 %     787,021     1,155 0.58 %     933,173     198 0.09 %
Money market accounts   2,366,235     12,140 2.08 %     2,282,217     7,711 1.34 %     2,416,577     1,570 0.26 %
Certificates of deposit   1,346,761     7,456 2.25 %     922,250     2,865 1.23 %     1,091,729     1,848 0.69 %
Brokered deposit accounts   534,527     6,357 4.82 %     218,188     2,197 3.99 %     132,751     52 0.16 %
Total interest-bearing deposits   6,217,859     29,368 1.92 %     4,793,175     14,185 1.17 %     5,164,121     3,771 0.30 %
Borrowings                                              
Advances from the FHLBB   1,264,523     14,531 4.60 %     736,652     6,979 3.71 %     103,878     187 0.72 %
Subordinated debentures and notes   84,062     1,354 6.44 %     84,025     1,332 6.34 %     83,915     1,244 5.93 %
Other borrowed funds   158,499     1,249 3.20 %     148,195     877 2.35 %     130,080     61 0.19 %
Total borrowings   1,507,084     17,134 4.55 %     968,872     9,188 3.71 %     317,873     1,492 1.88 %
Total interest-bearing liabilities   7,724,943     46,502 2.44 %     5,762,047     23,373 1.61 %     5,481,994     5,263 0.39 %
Non-interest-bearing liabilities:                                              
Demand checking accounts   1,930,162               1,843,780               1,880,039          
Other non-interest-bearing liabilities   316,347               269,498               171,717          
Total liabilities   9,971,452               7,875,325               7,533,750          
Stockholders’ equity   1,159,635               982,306               997,293          
Total liabilities and equity $ 11,131,087             $ 8,857,631             $ 8,531,043          
Net interest income (tax-equivalent basis) /Interest-rate spread (4)         86,189 2.66 %           80,080 3.35 %           69,906 3.31 %
Less adjustment of tax-exempt income         140               50               58    
Net interest income       $ 86,049             $ 80,030             $ 69,848    
Net interest margin (5)           3.36 %             3.81 %             3.49 %
                                               
(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 March 31,
        2023 2022
Reconciliation Table - Non-GAAP Financial Information     (Dollars in Thousands Except Share Data)
         
Reported Pretax Income     $ 8,668   $ 33,050  
Less:          
Security gains       1,701      
Add:          
Day 1 PCSB CECL provision       16,744      
Merger and acquisition expense       6,409      
Operating Pretax Income       $ 30,120   $ 33,050  
Estimated effective tax rate         22.7 %   25.2 %
Estimated taxes         6,837     8,345  
Operating earnings after tax       $ 23,283   $ 24,705  
           
Operating earnings per common share:          
Basic       $ 0.27   $ 0.32  
Diluted       $ 0.27   $ 0.32  
           
Weighted average common shares outstanding during the period:        
Basic         86,563,641     77,617,227  
Diluted         86,837,806     77,926,822  
           
           
Return on average assets *       0.27 %   1.16 %
Less:          
Security gains (after-tax) *       0.05 %   %
Add:          
Day 1 PCSB CECL provision *       0.47 %   %
Merger and acquisition expense (after-tax) *       0.18 %   %
Operating return on average assets *       0.87 %   1.16 %
           
           
Return on average tangible assets *       0.28 %   1.18 %
Less:          
Security gains (after-tax) *       0.05 %   %
Add:          
Day 1 PCSB CECL provision *       0.48 %   %
Merger and acquisition expense (after-tax) *       0.18 %   %
Operating return on average tangible assets *       0.89 %   1.18 %
           
           
Return on average stockholders' equity *       2.61 %   9.91 %
Less:          
Security gains (after-tax) *       0.45 %   %
Add:          
Day 1 PCSB CECL provision *       4.46 %   %
Merger and acquisition expense (after-tax) *       1.71 %   %
Operating return on average stockholders' equity *       8.33 %   9.91 %
           
           
Return on average tangible stockholders' equity *       3.43 %   11.84 %
Less:          
Security gains (after-tax) *       0.60 %   %
Add:          
Day 1 PCSB CECL provision *       5.87 %   %
Merger and acquisition expense (after-tax) *       2.25 %   %
Operating return on average tangible stockholders' equity *       10.95 %   11.84 %
           
* Ratios at and for the three months ended are annualized.        
           
  At and for the Three Months Ended
  March 31,
2023
December 31,
2022
September 30,
2022
June 30,
2022
March 31,
2022
  (Dollars in Thousands)
           
Net income, as reported $ 7,560   $ 29,695   $ 30,149   $ 25,195   $ 24,705  
           
Average total assets $ 11,131,087   $ 8,857,631   $ 8,586,420   $ 8,515,330   $ 8,531,043  
Less: Average goodwill and average identified intangible assets, net   278,135     162,266     162,387     162,507     162,632  
Average tangible assets $ 10,852,952   $ 8,695,365   $ 8,424,033   $ 8,352,823   $ 8,368,411  
           
Return on average tangible assets (annualized)   0.28 %   1.37 %   1.43 %   1.21 %   1.18 %
           
Average total stockholders’ equity $ 1,159,635   $ 982,306   $ 981,379   $ 976,167   $ 997,293  
Less: Average goodwill and average identified intangible assets, net   278,135     162,266     162,387     162,507     162,632  
Average tangible stockholders’ equity $ 881,500   $ 820,040   $ 818,992   $ 813,660   $ 834,661  
           
Return on average tangible stockholders’ equity (annualized)   3.43 %   14.48 %   14.72 %   12.39 %   11.84 %
           
Total stockholders’ equity $ 1,165,066   $ 992,125   $ 963,618   $ 968,496   $ 981,935  
Less:          
Goodwill   241,222     160,427     160,427     160,427     160,427  
Identified intangible assets, net   30,080     1,781     1,902     2,022     2,142  
Tangible stockholders' equity $ 893,764   $ 829,917   $ 801,289   $ 806,047   $ 819,366  
           
Total assets $ 11,522,485   $ 9,185,836   $ 8,695,708   $ 8,514,230   $ 8,633,736  
Less:          
Goodwill   241,222     160,427     160,427     160,427     160,427  
Identified intangible assets, net   30,080     1,781     1,902     2,022     2,142  
Tangible assets $ 11,251,183   $ 9,023,628   $ 8,533,379   $ 8,351,781   $ 8,471,167  
           
Tangible stockholders’ equity to tangible assets   7.94 %   9.20 %   9.39 %   9.65 %   9.67 %
           
Tangible stockholders' equity $ 893,764   $ 829,917   $ 801,289   $ 806,047   $ 819,366  
           
Number of common shares issued   96,998,075     85,177,172     85,177,172     85,177,172     85,177,172  
Less:          
Treasury shares   7,734,891     7,731,445     7,730,945     7,995,888     7,037,464  
Unallocated ESOP shares           4,833     11,442     18,051  
Unvested restricted shares   598,049     601,495     601,995     497,297     500,098  
Number of common shares outstanding   88,665,135     76,844,232     76,839,399     76,672,545     77,621,559  
           
Tangible book value per common share $ 10.08   $ 10.80   $ 10.43   $ 10.51   $ 10.56  

  

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Source: Brookline Bancorp, Inc.