Brookline Bancorp, Inc. (NASDAQ: BRKL) (the “Company”) today announced net income of $10.0 million, or $0.14 per basic and diluted share, for the second quarter of 2014, compared to $10.4 million, or $0.15 per basic and diluted share, for the first quarter of 2014.

Paul Perrault, President and Chief Executive Officer of Brookline Bancorp, Inc., stated: "Brookline delivered another solid quarter for our shareholders despite a challenging environment and an extremely competitive marketplace. We are pleased with our continued strong loan growth due to the perseverance of our dedicated bankers. Our traditionally strong asset quality continues to improve and remains at levels that are very favorable amongst our peers.”

BALANCE SHEET

Total assets of $5.6 billion at June 30, 2014 increased $168.7 million from March 31, 2014, and increased $262.4 million from December 31, 2013. The growth in total assets was driven by loans. At June 30, 2014, total loan and leases were $4.6 billion, representing an increase of $141.9 million from March 31, 2014, and an increase of $241.4 million from December 31, 2013. During the second quarter of 2014, total loan and leases grew 12.7 percent on an annualized basis. At June 30, 2014, the commercial real estate and commercial loan and lease portfolios totaled $3.4 billion, or 73.7 percent of total loans and leases, as compared to $3.3 billion, or 73.6 percent at March 31, 2014, and $3.2 billion, or 72.6 percent at December 31, 2013. Strong loan growth continued in our total commercial real estate and commercial loan and lease portfolios, which increased $105.6 million during the second quarter of 2014, or 12.9 percent on an annualized basis.

Cash, cash equivalents, and investment securities increased $8.3 million quarter over quarter to $608.8 million, or 10.9 percent of total assets at June 30, 2014, as compared to $600.5 million, or 11.1 percent of total assets at March 31, 2014, and $585.4 million, or 11.0 percent of total assets at December 31, 2013.

Total deposits of $3.9 billion at June 30, 2014 increased $13.5 million from March 31, 2014, and increased $26.1 million from December 31, 2013. Core deposits, which consist of demand checking, NOW, savings, and money market accounts, increased at a 4.2 percent annualized rate in the second quarter of 2014, raising the core deposit ratio to 76.7 percent at June 30, 2014 from 76.1 percent at March 31, 2014. Demand checking accounts increased $34.5 million, or 20.2 percent on an annualized basis, to $716.9 million, compared to March 31, 2014, and increased $9.9 million, or 2.8 percent on an annualized basis, compared to December 31, 2013. Total borrowings at June 30, 2014 were $1.0 billion, an increase of $149.0 million as compared to March 31, 2014, and an increase of $228.4 million as compared to December 31, 2013.

The ratio of stockholders’ equity to total assets was 11.23 percent at June 30, 2014, as compared to 11.46 percent at March 31, 2014 and 11.53 percent at December 31, 2013. The ratio of tangible stockholders’ equity to tangible assets was 8.73 percent at June 30, 2014, as compared to 8.87 percent at March 31, 2014 and 8.88 percent at December 31, 2013.

NET INTEREST INCOME

Net interest income decreased $1.3 million to $46.4 million during the second quarter of 2014 from the linked quarter, largely as a result of a $2.8 million decrease in accretion on the acquired loan and lease portfolio, offset by a $1.5 million increase in interest income from loans and leases due to volume. Net interest margin decreased 21 basis points to 3.61 percent for the three months ended June 30, 2014, primarily due to the decrease in accretion on the acquired loan and lease portfolio.

PROVISION FOR LOAN LOSSES

The Company recorded a provision for loan and lease losses of $2.2 million for the quarter ended June 30, 2014, compared to $2.4 million during the first quarter of 2014. The decrease of $0.2 million quarter over quarter is due to improved credit quality in the originated and acquired loan and lease portfolios.

Net charge-offs remained constant at $0.7 million for the second and first quarter of 2014. The ratio of net charge-offs to average loans on an annualized basis also remained constant at 0.06 percent for the second and first quarter of 2014.

The allowance for loan losses represented 1.12 percent of total loans and leases at June 30, 2014, compared to 1.13 percent at March 31, 2014. The allowance for loan losses related to originated loans and leases as a percentage of originated loans and leases was 1.31 percent at June 30, 2014, compared to 1.33 percent at March 31, 2014.

NON-INTEREST INCOME

Non-interest income for the quarter ended June 30, 2014 decreased $1.8 million to $3.3 million from the linked quarter. The decrease was largely driven by a decrease in the net gain on sale/disposals of premises and equipment of $1.5 million and a $0.5 million decrease in the gain on sales of loans and leases held-for sale.

NON-INTEREST EXPENSE

Non-interest expense for the quarter ended June 30, 2014 decreased $2.4 million to $31.2 million from the linked quarter. This decrease was largely a result of a $1.3 million decrease in occupancy expense, a $0.7 million decrease in compensation and employee benefits expense and a $0.2 million decrease in professional services expense.

RETURNS ON AVERAGE ASSETS AND AVERAGE EQUITY

The return on average assets decreased during the second quarter of 2014 to 0.73 percent at June 30, 2014 from 0.78 percent for the first quarter of 2014. The return on average tangible assets decreased to 0.75 percent for the second quarter of 2014 from 0.80 percent for the first quarter of 2014.

The return on average stockholders' equity decreased during the second quarter of 2014 to 6.37 percent from 6.70 percent for the first quarter of 2014. The return on average tangible stockholders’ equity decreased to 8.44 percent for the second quarter of 2014 from 8.92 percent for the first quarter of 2014.

ASSET QUALITY

Nonperforming loans and leases decreased $1.0 million during the second quarter of 2014 to $17.2 million at June 30, 2014 from the linked quarter. The ratio of nonperforming loans and leases to total loans and leases decreased 4 basis points to 0.37 percent at June 30, 2014 from the linked quarter. Nonperforming assets also decreased $1.0 million during the second quarter of 2014 to $18.4 million, or 0.33 percent of total assets, at June 30, 2014 from the linked quarter.

DIVIDEND DECLARED

The Company’s Board of Directors approved, for the 49th consecutive quarter, a dividend of $0.085 per share. The dividend will be paid on August 29, 2014 to shareholders of record on August 15, 2014.

CONFERENCE CALL

The Company will conduct a conference call/webcast at 1:30 PM Eastern Standard Time on Thursday, July 31, 2014 to discuss the results for the quarter, business highlights and outlook. The call can be accessed by dialing 877-504-4120 (United States) or 412-902-6650 (internationally). A recorded playback of the call will be available for one week following the call at 877-344-7529 (United States) or 412-317-0088 (internationally). The passcode for the playback is 10049054. The call will be available live and in a recorded version on the Company’s website under “Investor Relations” at www.brooklinebancorp.com.

ABOUT BROOKLINE BANCORP, INC.

Brookline Bancorp, Inc., a bank holding company with approximately $5.6 billion in assets and branch locations throughout Massachusetts and Rhode Island, is headquartered in Boston, Massachusetts and operates as the holding company for Brookline Bank, Bank Rhode Island, and First Ipswich Bank. The Company provides commercial and retail banking services and cash management and investment services to customers throughout Central New England. More information about Brookline Bancorp, Inc. and its banks can be found at the following websites: www.brooklinebank.com, www.bankri.com, and www.firstipswich.com.

FORWARD-LOOKING STATEMENTS

Certain statements contained in this press release that are not historical facts may constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and are intended to be covered by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve risks and uncertainties. The Company’s actual results could differ materially from those projected in the forward-looking statements as a result of, among others, the risks outlined in the Company’s Annual Report on Form 10-K, as updated by its Quarterly Reports on Form 10-Q and other filings submitted to the Securities and Exchange Commission ("SEC"). The Company does not undertake any obligation to update any forward-looking statement to reflect circumstances or events that occur after the date the forward-looking statements are made.

BASIS OF PRESENTATION

The Company's consolidated financial statements have been prepared in conformity with generally accepted accounting principles (“GAAP”) as set forth by the Financial Accounting Standards Board in its Accounting Standards Codification and through the rules and interpretive releases of the SEC under the authority of federal securities laws. Certain amounts previously reported have been reclassified to conform to the current period's presentation.

NON-GAAP FINANCIAL MEASURES

The Company uses certain non-GAAP financial measures, such as the allowance for loan and lease losses related to originated loans and leases as a percentage of originated loans and leases, tangible book value per common share and tangible stockholders’ equity to tangible assets, return on average tangible assets and return on average tangible stockholders' equity. These non-GAAP financial measures provide information for investors to effectively analyze financial trends of ongoing business activities, and to enhance comparability with peers across the financial services sector. A detailed reconciliation table of the Company's GAAP to the non-GAAP measures is attached.

 
 
BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Selected Financial Highlights (Unaudited)
                     
At and for the Three Months Ended
June 30, 2014 March 31, 2014 December 31, 2013 September 30, 2013 June 30, 2013
(Dollars In Thousands Except Share Data)
Earnings Data:
Net interest income $ 46,434 $ 47,734 $ 43,774 $ 43,412 $ 45,363
Provision for credit losses 2,276 2,443 3,887 2,748 2,439
Non-interest income 3,290 5,124 3,907 3,453 3,139
Non-interest expense 31,222 33,576 31,320 29,553 30,816
Income before provision for income taxes 16,226 16,839 12,474 14,564 15,247
Net income attributable to Brookline Bancorp, Inc. 9,976 10,422 7,654 9,429 9,490
 
Performance Ratios:
Net interest margin (1) 3.61 % 3.82 % 3.54 % 3.56 % 3.78 %
Interest-rate spread (1) 3.47 % 3.67 % 3.38 % 3.40 % 3.62 %
Return on average assets 0.73 % 0.78 % 0.58 % 0.73 % 0.74 %
Return on average tangible assets (non-GAAP) 0.75 % 0.80 % 0.60 % 0.75 % 0.76 %
Return on average stockholders' equity 6.37 % 6.70 % 4.95 % 6.15 % 6.16 %
Return on average tangible stockholders' equity (non-GAAP) 8.44 % 8.92 % 6.61 % 8.27 % 8.28 %
Efficiency ratio 62.79 % 63.52 % 65.69 % 63.06 % 63.53 %
 
Per Common Share Data:
Net income — Basic $ 0.14 $ 0.15 $ 0.11 $ 0.14 $ 0.14
Net income — Diluted 0.14 0.15 0.11 0.13 0.14
Cash dividends declared 0.085 0.085 0.085 0.085 0.085
Book value per share (end of period) 8.98 8.88 8.79 8.80 8.76
Tangible book value per share (end of period) (non-GAAP) 6.79 6.68 6.57 6.57 6.51
Stock price (end of period) 9.37 9.42 9.55 9.40 8.68
 
Balance Sheet:
Total assets $ 5,587,486 $ 5,418,785 $ 5,325,106 $ 5,236,229 $ 5,150,480
Total loans and leases 4,603,913 4,461,997 4,362,465 4,299,477 4,205,015
Total deposits 3,861,147 3,847,650 3,835,006 3,737,978 3,656,981
Brookline Bancorp, Inc. stockholders’ equity 627,663 620,799 613,867 614,811 611,284
 
Asset Quality:
Nonperforming assets $ 18,407 $ 19,430 $ 18,079 $ 16,738 $ 18,986
Nonperforming assets as a percentage of total assets 0.33 % 0.36 % 0.34 % 0.32 % 0.37 %
Allowance for loan and lease losses $ 51,686 $ 50,224 $ 48,473 $ 46,390 $ 44,281
Allowance for loan and lease losses as a percentage of total loans and leases 1.12 % 1.13 % 1.11 % 1.08 % 1.05 %
Net loan and lease charge-offs $ 720 $ 666 $ 1,676 $ 621 $ 639
Net loan and lease charge-offs as a percentage of average loans and leases 0.06 % 0.06 % 0.16 % 0.06 % 0.06 %
 
Capital Ratios:
Stockholders’ equity to total assets 11.23 % 11.46 % 11.53 % 11.74 % 11.87 %
Tangible stockholders’ equity to tangible assets (non-GAAP) 8.73 % 8.87 % 8.88 % 9.03 % 9.10 %
 
(1) Calculated on a fully tax-equivalent basis.
 
 

BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Consolidated Balance Sheets (Unaudited)
      June 30, 2014     March 31, 2014     December 31, 2013     September 30, 2013     June 30, 2013
ASSETS (In Thousands Except Share Data)
Cash and due from banks $ 58,962 $ 50,000 $ 37,148 $ 37,220 $ 33,008
Short-term investments   20,771     22,936     55,357     58,195     66,787  
Total cash and cash equivalents   79,733     72,936     92,505     95,415     99,795  
Investment securities available-for-sale 528,586 527,073 492,428 480,402 479,177
Investment securities held-to-maturity   500     500     500     500     500  
Total investment securities   529,086     527,573     492,928     480,902     479,677  
Loans and leases held-for-sale 13,890 177 13,372 200 4,221
Loans and leases:
Commercial real estate loans:
Commercial real estate mortgage 1,545,483 1,505,674 1,461,985 1,400,769 1,349,051
Multi-family mortgage 631,371 632,122 627,933 599,601 594,939
Construction   137,731     136,679     113,705     118,090     112,684  
Total commercial real estate loans   2,314,585     2,274,475     2,203,623     2,118,460     2,056,674  
Commercial loans and leases:
Commercial 478,856 437,957 407,792 409,376 376,507
Equipment financing 552,489 529,670 513,024 513,345 476,724
Condominium association   45,608     43,810     44,794     43,205     41,859  
Total commercial loans and leases   1,076,953     1,011,437     965,610     965,926     895,090  
Indirect automobile loans   376,314     373,965     400,531     440,949     479,782  
Consumer loans:
Residential mortgage 550,814 530,347 528,185 511,835 507,099
Home equity 270,203 261,836 257,461 254,888 257,839
Other consumer   15,044     9,937     7,055     7,419     8,531  
Total consumer loans   836,061     802,120     792,701     774,142     773,469  
Total loans and leases 4,603,913 4,461,997 4,362,465 4,299,477 4,205,015
Allowance for loan and lease losses   (51,686 )   (50,224 )   (48,473 )   (46,390 )   (44,281 )
Net loans and leases   4,552,227     4,411,773     4,313,992     4,253,087     4,160,734  
Restricted equity securities 71,446 66,559 66,559 66,627 66,627
Premises and equipment, net of accumulated depreciation 82,166 81,396 80,505 79,504 76,867
Deferred tax asset 27,799 29,319 31,710 34,322 32,739
Goodwill 137,890 137,890 137,890 137,890 137,890
Identified intangible assets, net of accumulated amortization 15,199 16,026 16,887 18,015 19,168
Other real estate owned and repossessed assets 1,246 1,290 1,578 1,319 1,493
Other assets   76,804     73,846     77,180     68,948     71,269  
Total assets $ 5,587,486   $ 5,418,785   $ 5,325,106   $ 5,236,229   $ 5,150,480  
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Non-interest-bearing deposits:
Demand checking accounts $ 716,883 $ 682,383 $ 707,023 $ 667,181 $ 644,507
Interest-bearing deposits:
NOW accounts 209,682 212,877 210,602 204,164 196,778
Savings accounts 518,343 517,327 494,734 512,393 503,170
Money market accounts 1,516,023 1,517,290 1,487,979 1,403,881 1,340,024
Certificate of deposit accounts   900,216     917,773     934,668     950,359     972,502  
Total interest-bearing deposits   3,144,264     3,165,267     3,127,983     3,070,797     3,012,474  
Total deposits   3,861,147     3,847,650     3,835,006     3,737,978     3,656,981  
Borrowed funds:
Advances from the FHLBB 1,005,644 855,915 768,773 784,740 785,565
Other borrowed funds   35,360     36,101     43,782     44,062     44,501  
Total borrowed funds   1,041,004     892,016     812,555     828,802     830,066  
Mortgagors’ escrow accounts 8,359 8,696 7,889 8,008 7,465
Accrued expenses and other liabilities   45,411     45,703     51,485     42,820     41,097  
Total liabilities   4,955,921     4,794,065     4,706,935     4,617,608     4,535,609  
Stockholders' equity:
Brookline Bancorp, Inc. stockholders’ equity:
Common stock, $0.01 par value; 200,000,000 shares authorized; 75,744,445 shares issued 757 757 757 757 757
Additional paid-in capital 617,709 617,978 617,538 616,968 619,033
Retained earnings, partially restricted 73,373 69,361 64,903 63,210 59,747
Accumulated other comprehensive (loss) income (3,209 ) (5,936 ) (7,915 ) (4,900 ) (4,441 )
Treasury stock, at cost;
5,144,807 shares, 5,171,985 shares, 5,171,985 shares, 5,154,327 shares, and 5,373,733 shares, respectively (59,487 ) (59,826 ) (59,826 ) (59,576 ) (62,107 )
Unallocated common stock held by ESOP;

271,524 shares, 281,595 shares, 291,666 shares, 302,229 shares, and 312,792 shares, respectively

  (1,480 )   (1,535 )   (1,590 )   (1,648 )   (1,705 )
Total Brookline Bancorp, Inc. stockholders’ equity   627,663     620,799     613,867     614,811     611,284  
Noncontrolling interest in subsidiary   3,902     3,921     4,304     3,810     3,587  
Total stockholders' equity   631,565     624,720     618,171     618,621     614,871  
Total liabilities and stockholders' equity $ 5,587,486   $ 5,418,785   $ 5,325,106   $ 5,236,229   $ 5,150,480  
 
 

BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Consolidated Statements of Income (Unaudited)
                     
Three Months Ended
June 30, 2014 March 31, 2014 December 31, 2013 September 30, 2013 June 30, 2013
(In Thousands Except Share Data)
Interest and dividend income:
Loans and leases $ 50,433 $ 51,942 $ 48,573 $ 48,462 $ 50,644
Debt securities 2,360 2,259 2,136 2,041 1,934
Marketable and restricted equity securities 539 449 301 298 303
Short-term investments   14     44     39     22     19  
Total interest and dividend income   53,346     54,694     51,049     50,823     52,900  
Interest expense:
Deposits 4,201 4,291 4,559 4,637 4,743
Borrowed funds   2,711     2,669     2,716     2,774     2,794  
Total interest expense   6,912     6,960     7,275     7,411     7,537  
Net interest income 46,434 47,734 43,774 43,412 45,363
Provision for credit losses   2,276     2,443     3,887     2,748     2,439  
Net interest income after provision for credit losses   44,158     45,291     39,887     40,664     42,924  
Non-interest income:
Deposit fees 2,204 1,959 2,188 1,989 1,929
Loan fees 124 436 474 296 386
Loss from investments in affordable housing projects (539 ) (504 ) (318 ) (558 ) (624 )
(Loss)/gain on sales of securities, net (13 ) — 397 — —
Gain on sales of loans and leases held-for-sale 54 602 11 115 183
(Loss)/gain on sale/disposals of premises and equipment, net (6 ) 1,510 — 21 (21 )
Other   1,466     1,121     1,155     1,590     1,286  
Total non-interest income   3,290     5,124     3,907     3,453     3,139  
Non-interest expense:
Compensation and employee benefits 17,295 18,032 16,675 15,591 16,697
Occupancy 3,154 4,405 3,356 3,312 2,865
Equipment and data processing 4,348 4,377 4,476 4,061 4,262
Professional services 1,487 1,727 1,352 1,329 1,513
FDIC insurance 847 860 724 508 936
Advertising and marketing 776 665 807 758 768
Amortization of identified intangible assets 827 861 1,127 1,154 1,177
Other   2,488     2,649     2,803     2,840     2,598  
Total non-interest expense   31,222     33,576     31,320     29,553     30,816  
Income before provision for income taxes 16,226 16,839 12,474 14,564 15,247
Provision for income taxes   5,774     5,995     4,325     4,645     5,382  
Net income before noncontrolling interest in subsidiary 10,452 10,844 8,149 9,919 9,865
Less net income attributable to noncontrolling interest in subsidiary   476     422     495     490     375  
Net income attributable to Brookline Bancorp, Inc. $ 9,976   $ 10,422   $ 7,654   $ 9,429   $ 9,490  
Earnings per common share:
Basic $ 0.14 $ 0.15 $ 0.11 $ 0.14 $ 0.14
Diluted $ 0.14 $ 0.15 $ 0.11 $ 0.13 $ 0.14
Weighted average common shares outstanding during the period:
Basic 69,886,576 69,875,473 69,862,175 69,830,953 69,774,703
Diluted 70,012,377 69,983,999 69,951,683 69,913,765 69,833,541
Dividends declared per common share $ 0.085 $ 0.085 $ 0.085 $ 0.085 $ 0.085
 
 

BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Consolidated Statements of Income (Unaudited)
         
Six Months Ended June 30,
2014 2013
(In Thousands Except Share Data)
Interest and dividend income:
Loans and leases $ 102,375 $ 100,063
Debt securities 4,619 3,786
Marketable and restricted equity securities 988 612
Short-term investments   58     50  
Total interest and dividend income   108,040     104,511  
Interest expense:
Deposits 8,492 9,578
Borrowed funds   5,380     5,903  
Total interest expense   13,872     15,481  
Net interest income 94,168 89,030
Provision for credit losses   4,719     4,294  
Net interest income after provision for credit losses   89,449     84,736  
Non-interest income:
Deposit Fees 4,163 3,995
Loan Fees 560 807
Loss from investments in affordable housing projects (1,043 ) (936 )
Loss on sales of securities, net (13 ) —
Gain on sales of loans and leases held-for-sale 656 481
Gain/(loss) on sale/disposals of premises and equipment, net 1,504 (21 )
Other   2,587     2,140  
Total non-interest income   8,414     6,466  
Non-interest expense:
Compensation and employee benefits 35,327 32,994
Occupancy 7,559 5,948
Equipment and data processing 8,725 8,362
Professional services 3,214 3,014
FDIC insurance 1,707 1,870
Advertising and marketing 1,441 1,438
Amortization of identified intangible assets 1,688 2,342
Other   5,137     5,617  
Total non-interest expense   64,798     61,585  
Income before provision for income taxes 33,065 29,617
Provision for income taxes   11,769     10,511  
Net income before noncontrolling interest in subsidiary 21,296 19,106
Less net income attributable to noncontrolling interest in subsidiary   898     802  
Net income attributable to Brookline Bancorp, Inc. $ 20,398   $ 18,304  
Earnings per common share:
Basic $ 0.29 $ 0.26
Diluted $ 0.29 $ 0.26
Weighted average common shares outstanding during the period:
Basic 69,881,055 69,768,777
Diluted 69,998,219 69,823,615
Dividends declared per common share $ 0.170 $ 0.170
 
 

BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Asset Quality Analysis (Unaudited)
                     
At and for the Three Months Ended
June 30, 2014 March 31, 2014 December 31, 2013 September 30, 2013 June 30, 2013
(Dollars in Thousands)
NONPERFORMING ASSETS:
Loans and leases accounted for on a nonaccrual basis:
Commercial real estate mortgage $ 3,011 $ 1,814 $ 1,098 $ 1,137 $ 2,682
Multi-family mortgage — — — 664 1,593
Construction   —     —     —     —     —  
Total commercial real estate loans 3,011 1,814 1,098 1,801 4,275
 
Commercial 6,383 6,350 6,148 4,747 4,680
Equipment financing 3,251 4,633 4,115 4,116 4,014
Condominium association   —     —     1     3     4  
Total commercial loans and leases 9,634 10,983 10,264 8,866 8,698
 
Indirect automobile loans 325 378 259 195 156
 
Residential mortgage 2,384 3,138 2,875 2,738 2,786
Home equity 1,771 1,799 1,987 1,801 1,557
Other consumer   36     28     18     18     21  
Total consumer loans 4,191 4,965 4,880 4,557 4,364
 
Total nonaccrual loans and leases 17,161 18,140 16,501 15,419 17,493
 
Other real estate owned 675 855 577 726 1,002
Other repossessed assets   571     435     1,001     593     491  
Total nonperforming assets $ 18,407   $ 19,430   $ 18,079   $ 16,738   $ 18,986  
 
Loans and leases past due greater than 90 days and still accruing $ 6,653   $ 7,774   $ 10,913   $ 13,548   $ 9,640  
 
Troubled debt restructurings on accrual 12,396 11,532 12,759 12,158 9,631
Troubled debt restructurings on nonaccrual   5,992     6,764     5,589     5,905     6,919  
Total troubled debt restructurings $ 18,388   $ 18,296   $ 18,348   $ 18,063   $ 16,550  
 
Nonperforming loans and leases as a percentage of total loans and leases 0.37 % 0.41 % 0.38 % 0.36 % 0.42 %
Nonperforming assets as a percentage of total assets 0.33 % 0.36 % 0.34 % 0.32 % 0.37 %
 
PROVISION AND ALLOWANCE FOR LOAN AND LEASE LOSSES:
Allowance for loan and lease losses at beginning of period $ 50,224 $ 48,473 $ 46,390 $ 44,281 $ 42,532
Charge-offs (1,196 ) (1,050 ) (2,193 ) (903 ) (1,028 )
Recoveries   476     384     517     282     389  
Net charge-offs (720 ) (666 ) (1,676 ) (621 ) (639 )
Provision for loan and lease losses   2,182     2,417     3,759     2,730     2,388  
Allowance for loan and lease losses at end of period $ 51,686   $ 50,224   $ 48,473   $ 46,390   $ 44,281  
 
Allowance for loan and lease losses as a percentage of total loans and leases 1.12 % 1.13 % 1.11 % 1.08 % 1.05 %
Allowance for loan and lease losses related to originated loans and leases as a percentage of originated loans and leases 1.31 % 1.33 % 1.32 % 1.31 % 1.34 %
 
NET CHARGE-OFFS:
Commercial real estate loans $ — $ — $ (9 ) $ 7 $ 81
Commercial loans and leases 578 300 803 157 295
Indirect automobile loans 55 185 419 396 170
Consumer loans   87     181     463     61     93  
Total net charge-offs $ 720   $ 666   $ 1,676   $ 621   $ 639  
 
Net loan and lease charge-offs as a percentage of average loans and leases (annualized) 0.06 % 0.06 % 0.16 % 0.06 % 0.06 %
 
 

BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Average Yields / Costs (Unaudited)
                                         
Three Months Ended
June 30, 2014 March 31, 2014 June 30, 2013
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) $ 527,411 $ 2,360 1.79 % $ 502,598 $ 2,263 1.80 % $ 487,271 $ 1,940 1.59 %
Marketable and restricted equity securities (2) 68,543 602 3.52 % 66,954 497 2.99 % 66,988 350 2.10 %
Short-term investments 36,850 14 0.16 % 45,834 44 0.39 % 52,541 19 0.14 %
Total investments 632,804 2,976 1.88 % 615,386 2,804 1.83 % 606,800 2,309 1.52 %
Loans and Leases:
Commercial real estate loans (3) 2,288,018 25,395 4.42 % 2,228,495 25,702 4.61 % 2,034,920 23,863 4.67 %
Commercial loans (3) 504,572 5,246 4.12 % 476,455 4,693 3.94 % 420,194 6,531 6.16 %
Equipment financing (3) 541,029 9,155 6.77 % 522,288 11,037 8.50 % 467,156 8,279 7.10 %
Indirect automobile loans (3) 374,489 3,032 3.25 % 384,833 3,264 3.44 % 494,571 4,523 3.67 %
Residential mortgage loans (3) 532,310 4,918 3.70 % 532,593 4,809 3.65 % 512,975 5,101 3.98 %
Other consumer loans (3) 277,802 2,833 4.09 % 267,204 2,579 3.91 % 264,183 2,508 3.81 %
Total loans and leases 4,518,220 50,579 4.46 % 4,411,868 52,084 4.74 % 4,193,999 50,805 4.83 %
Total interest-earning assets 5,151,024 53,555 4.15 % 5,027,254 54,888 4.38 % 4,800,799 53,114 4.41 %
Allowance for loan and lease losses (50,809) (49,087) (42,954)
Non-interest-earning assets 373,235 383,550 380,299
Total assets $ 5,473,450 $ 5,361,717 $ 5,138,144
 
Liabilities and Stockholders' Equity:
Interest-bearing liabilities:
Deposits:
NOW accounts $ 208,859 $ 42 0.08 % $ 206,226 $ 41 0.08 % $ 195,269 $ 41 0.09 %
Savings accounts 523,773 303 0.23 % 508,555 303 0.24 % 508,451 316 0.25 %
Money market accounts 1,528,959 1,936 0.51 % 1,505,992 1,959 0.53 % 1,335,300 2,036 0.61 %
Certificates of deposit 901,272 1,920 0.85 % 927,199 1,988 0.87 % 982,257 2,350 0.96 %
Total interest-bearing deposits 3,162,863 4,201 0.53 % 3,147,972 4,291 0.55 % 3,021,277 4,743 0.63 %
Borrowings
Advances from the FHLBB 892,770 2,602 1.17 % 803,729 2,531 1.28 % 760,237 2,682 1.41 %
Other borrowed funds 35,127 109 1.25 % 38,438 138 1.45 % 48,655 112 0.93 %
Total borrowings 927,897 2,711 1.17 % 842,167 2,669 1.29 % 808,892 2,794 1.39 %
Total interest-bearing liabilities 4,090,760 6,912 0.68 % 3,990,139 6,960 0.71 % 3,830,169 7,537 0.79 %
Non-interest-bearing liabilities:
Demand checking accounts 712,961 698,462 640,725
Other non-interest-bearing liabilities 39,219 47,103 47,589
Total liabilities 4,842,940 4,735,704 4,518,483
Brookline Bancorp, Inc. stockholders’ equity 626,371 621,764 616,327
Noncontrolling interest in subsidiary 4,139 4,249 3,334
Total liabilities and equity $ 5,473,450 $ 5,361,717 $ 5,138,144
Net interest income (tax-equivalent basis) /Interest-rate spread (4) 46,643 3.47 % 47,928 3.67 % 45,577 3.62 %
Less adjustment of tax-exempt income 209 194 214
Net interest income $ 46,434 $ 47,734 $ 45,363
Net interest margin (5) 3.61 % 3.82 % 3.78 %
 

(1) Tax-exempt income on debt securities, equity securities and revenue bonds included in commercial real estate loans is included on a tax-equivalent basis.
(2) Average balances include unrealized gains (losses) on investment securities. Dividend payments may not be consistent and average yield on equity securities may vary from month to month.
(3) Loans on nonaccrual status are included in the average balances.
(4) Interest rate spread represents the difference between the yield on interest-earning assets and the cost of interest-bearing liabilities.
(5) Net interest margin represents net interest income (tax-equivalent basis) divided by average interest-earning assets.

                           
 
BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Average Yields / Costs (Unaudited)
 
Six Months Ended
June 30, 2014 June 30, 2013
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) $ 515,073 $ 4,623 1.80 % $ 479,433 $ 3,799 1.58 %
Marketable and restricted equity securities (2) 67,753 1,099 3.26 % 67,764 705 2.09 %
Short-term investments   41,317     58 0.28 %   53,586     50 0.19 %
Total investments   624,143     5,780 1.85 %   600,783     4,554 1.52 %
Loans and Leases:
Commercial real estate loans (3) 2,258,422 51,097 4.51 % 2,018,117 48,159 4.76 %
Commercial loans (3) 489,732 9,939 4.04 % 415,633 11,242 5.39 %
Equipment financing (3) 532,570 20,192 7.60 % 453,642 16,138 7.15 %
Indirect automobile loans (3) 379,633 6,296 3.34 % 510,657 9,439 3.73 %
Residential mortgage loans (3) 532,451 9,727 3.68 % 510,801 10,266 4.04 %
Other consumer loans (3)   272,532     5,412 4.00 %   264,433     5,124 3.91 %
Total loans and leases   4,465,340     102,663 4.60 %   4,173,283     100,368 4.81 %
Total interest-earning assets   5,089,483     108,443 4.26 %   4,774,066     104,922 4.40 %
Allowance for loan and lease losses (49,953 ) (42,225 )
Non-interest-earning assets   378,363     371,475  
Total assets $ 5,417,893   $ 5,103,316  
 
Liabilities and Stockholders' Equity:
Interest-bearing liabilities:
Deposits:
NOW accounts $ 207,550 $ 83 0.08 % $ 192,808 $ 86 0.09 %
Savings accounts 516,206 606 0.24 % 511,401 660 0.26 %
Money market accounts 1,517,537 3,895 0.52 % 1,315,056 4,097 0.63 %
Certificates of deposit   914,166     3,908 0.86 %   992,380     4,735 0.96 %
Total interest-bearing deposits   3,155,459     8,492 0.54 %   3,011,645     9,578 0.64 %
Borrowings
Advances from the FHLBB 848,495 5,133 1.22 % 756,773 5,637 1.50 %
Other borrowed funds   36,773     247 1.36 %   54,303     266 0.99 %
Total borrowings   885,268     5,380 1.23 %   811,076     5,903 1.47 %
Total interest-bearing liabilities   4,040,727     13,872 0.69 %   3,822,721     15,481 0.82 %
Non-interest-bearing liabilities:
Demand checking accounts 705,752 624,386
Other non-interest-bearing liabilities   43,141     35,750  
Total liabilities 4,789,620 4,482,857
Brookline Bancorp, Inc. stockholders’ equity 624,080 616,868
Noncontrolling interest in subsidiary   4,193     3,591  
Total liabilities and equity $ 5,417,893   $ 5,103,316  
Net interest income (tax-equivalent basis) /Interest-rate spread (4) 94,571 3.57 % 89,441 3.58 %
Less adjustment of tax-exempt income   403   411
Net interest income $ 94,168 $ 89,030
Net interest margin (5) 3.71 % 3.74 %
 

(1) Tax-exempt income on debt securities, equity securities and revenue bonds included in commercial real estate loans is included on a tax-equivalent basis.
(2) Average balances include unrealized gains (losses) on investment securities. Dividend payments may not be consistent and average yield on equity securities may vary from month to month.
(3) Loans on nonaccrual status are included in the average balances.
(4) Interest rate spread represents the difference between the yield on interest-earning assets and the cost of interest-bearing liabilities.
(5) Net interest margin represents net interest income (tax-equivalent basis) divided by average interest-earning assets.

 
 
BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Non-GAAP Financial Information (Unaudited)
                     

June 30,
2014

March 31,
2014

December 31, 2013

September 30, 2013

June 30,
2013

(Dollars in Thousands)

 
Net income, as reported $ 9,976   $ 10,422   $ 7,654   $ 9,429   $ 9,490  
 
Average total assets $ 5,473,450 $ 5,361,717 $ 5,287,482 $ 5,199,583 $ 5,138,144
Less: Average goodwill and average identified intangible assets, net   153,577     154,447       155,439       156,607       157,799  
Average tangible assets $ 5,319,873   $ 5,207,270     $ 5,132,043     $ 5,042,976     $ 4,980,345  
 
Return on average tangible assets (annualized) 0.75 % 0.80 % 0.60 % 0.75 % 0.76 %
 
Average total stockholders’ equity $ 626,371 $ 621,764 $ 618,385 $ 612,866 $ 616,327
Less: Average goodwill and average identified intangible assets, net   153,577       154,447       155,439       156,607       157,799  
Average tangible stockholders’ equity $ 472,794     $ 467,317     $ 462,946     $ 456,259     $ 458,528  
 
Return on average tangible stockholders’ equity (annualized) 8.44 % 8.92 % 6.61 % 8.27 % 8.28 %
 
Brookline Bancorp, Inc. stockholders’ equity $ 627,663 $ 620,799 $ 613,867 $ 614,811 $ 611,284
Less:
Goodwill 137,890 137,890 137,890 137,890 137,890

Identified intangible assets, net

  15,199     16,026     16,887     18,015     19,168  
Tangible stockholders' equity $ 474,574   $ 466,883   $ 459,090   $ 458,906   $ 454,226  
 
Total assets $ 5,587,486 $ 5,418,785 $ 5,325,106 $ 5,236,229 $ 5,150,480
Less:
Goodwill 137,890 137,890 137,890 137,890 137,890

Identified intangible assets, net

  15,199     16,026     16,887     18,015     19,168  
Tangible assets $ 5,434,397   $ 5,264,869   $ 5,170,329   $ 5,080,324   $ 4,993,422  
 
Tangible stockholders’ equity to tangible assets 8.73 % 8.87 % 8.88 % 9.03 % 9.10 %
 
Tangible stockholders' equity $ 474,574   $ 466,883   $ 459,090   $ 458,906   $ 454,226  
 
Number of common shares issued 75,744,445 75,744,445 75,744,445 75,744,445 75,744,445
Less:
Treasury shares 5,144,807 5,171,985 5,171,985 5,154,327 5,373,733
Unallocated ESOP shares 271,524 281,595 291,666 302,229 312,792
Unvested restricted shares   434,459     408,651     409,068     429,818     276,011  
Number of common shares outstanding   69,893,655     69,882,214     69,871,726     69,858,071     69,781,909  
 
Tangible book value per common share $ 6.79 $ 6.68 $ 6.57 $ 6.57 $ 6.51
 
Allowance for loan and lease losses $ 51,686 $ 50,224 $ 48,473

 

$ 46,390 $ 44,281
Less:
Allowance for acquired loans and leases losses   1,246     1,404     1,632     1,278     620  
Allowance for originated loan and lease losses $ 50,440   $ 48,820   $ 46,841   $ 45,112   $ 43,661  
 
Total loans and leases $ 4,603,913 $ 4,461,997 $ 4,362,465 $ 4,299,477 $ 4,205,015
Less:
Total acquired loans and leases   747,108     779,747     815,412     865,708     938,815  
Total originated loans and leases $ 3,856,805   $ 3,682,250   $ 3,547,053   $ 3,433,769   $ 3,266,200  
 
Allowance for loan and lease losses related to originated loans and leases as a percentage of originated loans and leases 1.31 % 1.33 % 1.32 % 1.31 % 1.34 %