Brookline Bancorp, Inc. (NASDAQ: BRKL) (the "Company") today announced net income of $7.7 million, or $0.11 per basic share and diluted share, for the fourth quarter of 2013, compared to $9.4 million, or $0.14 per basic and $0.13 per diluted share, for the third quarter of 2013, and $11.9 million, or $0.17 per basic and diluted share, for the fourth quarter of 2012.

For the year ended December 31, 2013, net income totaled $35.4 million, or $0.51 per basic and diluted share, compared to $37.1 million, or $0.53 per basic and diluted share, for 2012. Net earnings from operations were $36.0 million, or $0.52 per basic and $0.51 per diluted share, for the year ended December 31, 2013, compared to $41.1 million, or $0.59 per basic and diluted share, for 2012. The Company's 2013 fourth quarter results include a charge of $0.9 million, or $0.01 per basic and diluted share, due to compensation-related expenses incurred upon the departure of the Company's Chief Financial Officer.

Paul Perrault, President and Chief Executive Officer of Brookline Bancorp, Inc., stated: "We are pleased with the solid commercial loan and core deposit growth in 2013. We have experienced uneven results as we conclude our transition to a commercial bank and remain challenged by the historically low interest rate environment. With much of the transition work behind us, our strong balance sheet, expanding branch network, and new business initiatives position us well for 2014."

BALANCE SHEET

Total assets increased $88.9 million during the fourth quarter of 2013 to $5.3 billion at December 31, 2013, and increased $177.6 million from $5.1 billion at December 31, 2012. The growth in total assets during the fourth quarter of 2013 is primarily driven by loans and leases, which increased $63.0 million to $4.4 billion at December 31, 2013, representing 5.9 percent growth on an annualized basis. At December 31, 2013, the commercial real estate and commercial loan and lease portfolios totaled $3.2 billion, or 72.7 percent of total loans and leases, as compared to $3.1 billion, or 71.7 percent at September 30, 2013, and $2.9 billion, or 68.3 percent at December 31, 2012. Strong loan growth continued in our total commercial loan and lease portfolio, which increased $84.8 million during the fourth quarter of 2013, or 11 percent on an annualized basis. This growth offsets the decrease of $40.4 million in the indirect automobile loan portfolio during the same period.

Cash, cash equivalents, and investment securities increased $9.1 million quarter-to-quarter and were down $13.5 million year-to-year to $585.4 million, or 11.0 percent of total assets at December 31, 2013, as compared to $576.3 million, or 11.0 percent of total assets at September 30, 2013, and $598.9 million, or 11.6 percent of total assets at December 31, 2012.

Deposits of $3.8 billion at December 31, 2013 were up $97.0 million from September 30, 2013 and up $218.7 million from December 31, 2012. The growth from September 30, 2013 represents an annualized increase of 10.4 percent. Core deposits, which consist of demand checking, NOW, savings, and money market accounts, increased at a 16.2 percent annualized rate in the fourth quarter of 2013, raising the core deposit ratio from 74.6 percent at September 30, 2013 to 75.6 percent at December 31, 2013. Total borrowings at December 31, 2013 decreased by $16.3 million as compared to September 30, 2013, and decreased by $41.4 million as compared to December 31, 2012.

The ratio of stockholders' equity to total assets was 11.53 percent at December 31, 2013, as compared to 11.74 percent at September 30, 2013. The ratio of tangible stockholders' equity to tangible assets was 8.88 percent at December 31, 2013, as compared to 9.03 percent at September 30, 2013.

NET INTEREST INCOME

Net interest income for the fourth quarter of 2013 increased $0.4 million to $43.8 million from $43.4 million for the third quarter of 2013, largely as a result of a $0.2 million increase in income from loan and leases and debt securities. The net interest income for the year ended December 31, 2013 decreased $1.2 million to $176.2 million from $177.4 million for the year ended December 31, 2012.

Net interest margin decreased slightly from 3.56 percent for the three months ended September 30, 2013 to 3.54 percent for the three months ended December 31, 2013. Similarly, net interest margin decreased to 3.64 percent for the year ended December 31, 2013 from 3.85 percent for the year ended December 31, 2012.

NON-INTEREST INCOME

Non-interest income for the fourth quarter of 2013 increased $0.4 million to $3.9 million from $3.5 million for the third quarter of 2013. The quarter-to-quarter increase is largely a result of a $0.2 million reduction in loan related gains on sale and other fee income, a $0.4 million gain on sales of securities, and a $0.2 million decrease in losses on investments in affordable housing projects.

Non-interest income for the year ended December 31, 2013 decreased $4.8 million to $13.8 million from $18.6 million for the year ended December 31, 2012. Several factors contributed to the year-to-year decrease, including a decrease of $1.2 million in loan-related gains on sale and other fee income, an increase of $1.1 million in losses from investments in affordable housing projects, a decrease of $0.5 million in gains related to the sale of securities, and the inclusion in 2012 of a net gain of $1.9 million on the sale of loans and leases.

NON-INTEREST EXPENSE

Non-interest expense for the fourth quarter of 2013 increased $1.8 million to $31.3 million from $29.6 million for the third quarter of 2013. The quarter-to-quarter increase in non-interest expense includes an increase of $1.1 million in compensation and employee benefit expense, mostly due to certain compensation related expenses incurred as a result of the departure of the Company's Chief Financial Officer. Additionally, equipment and data processing expense increased $0.4 million due, in part, to system conversion related expenses.

Non-interest expense for the year ended December 31, 2013 increased $2.1 million to $122.5 million from $120.4 million for the year ended December 31, 2012. The year-over-year increase in non-interest expense includes an increase of $6.4 million in compensation and employee benefit expense due, in part, to additional staffing. Additionally, occupancy, equipment and data processing expense increased $4.1 million due, in part, to branch expansion and relocation expenses, system conversion related expenses and increased volume. These increases were offset by a decrease of $6.8 million in professional services expense.

RETURNS ON AVERAGE ASSETS AND AVERAGE EQUITY

The return on average assets decreased during the fourth quarter of 2013 from 0.73 percent at September 30, 2013 to 0.58 percent at December 31, 2013. For the year ended December 31, 2013, the return on average assets decreased to 0.68 percent from 0.74 percent for the year ended December 31, 2012.

The return on average tangible stockholders' equity decreased to 6.61 percent for the fourth quarter of 2013 from 8.27 percent for the third quarter of 2013. The return on average tangible stockholders' equity decreased to 7.71 percent for the year ended December 31, 2013 from 8.40 percent for the year ended December 31, 2012.

ASSET QUALITY

Nonperforming loans and leases increased $1.1 million to $16.5 million, or 0.31 percent of total assets, at December 31, 2013 from $15.4 million, or 0.29 percent of total assets, at September 30, 2013. The ratio of nonperforming loans and leases to total loans and leases increased to 0.38 percent at December 31, 2013 from 0.36 percent at September 30, 2013. Nonperforming assets also increased $1.4 million to $18.1 million or 0.34 percent of total assets at December 31, 2013, from $16.7 million, or 0.32 percent of total assets, at September 30, 2013.

The provision for loan and lease losses increased to $3.8 million for the fourth quarter of 2013, from $2.7 million for the third quarter of 2013. The fourth quarter provision consisted mainly of a $1.7 million provision due to overall portfolio growth, a $0.9 million provision for charged off loans, and $1.1 million for deterioration and charge offs in the acquired loan portfolios. The provision for loan and lease losses decreased to $10.9 million for the year ended December 31, 2013 from $15.9 million for the year ended December 31, 2012, primarily due to lower charge offs.

The allowance for loan and lease losses was $48.5 million at December 31, 2013, compared to $46.4 million at September 30, 2013, and $41.2 million at December 31, 2012. The allowance for loan and lease losses as a percent of total loans and leases was 1.11 percent at December 31, 2013, compared to 1.08 percent at September, 30, 2013, and 0.99 percent at December 31, 2012. The allowance for loan and lease losses related to originated loans and leases as a percent of originated loans and leases increased slightly to 1.32 percent at December 31, 2013, from 1.31 percent at September 30, 2013.

DIVIDEND DECLARED

The Company's Board of Directors approved, for the 47th consecutive quarter, a dividend of $0.085 per share. The dividend will be paid on February 28, 2014 to shareholders of record on February 14, 2014.

CONFERENCE CALL

The Company will conduct a conference call/webcast at 1:30 PM Eastern Standard Time on Thursday, January 30, 2014 to discuss the results for the quarter, business highlights and outlook. The call can be accessed by dialing 888-317-6016 (United States) or 412-317-6016 (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 10039039. The call will be available live or 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 $5.3 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. 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 FASB 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 net earnings from operations, 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. 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 or for the Three Months

Ended December 31,

   At or for the Year

Ended December 31,

2013   2012 2013   2012  
(Dollars In Thousands Except Share Data)
Earnings Data:
Net interest income $ 43,774 $ 44,564 $ 176,218 $ 177,368
Provision for credit losses 3,887 3,101 10,929 15,888
Non-interest income 3,907 6,504 13,825 18,605
Non-interest expense 31,320 28,869 122,460 120,375
Income before income taxes 12,474 19,098 56,654 59,710
Net income attributable to Brookline Bancorp, Inc. 7,654 11,863 35,386 37,142
 
Performance Ratios:
Net interest margin (1) 3.54 % 3.79 % 3.64 % 3.85 %
Interest-rate spread (1) 3.38 % 3.62 % 3.49 % 3.67 %
Return on average assets 0.58 % 0.93 % 0.68 % 0.74 %
Return on average stockholders' equity 4.95 % 7.76 % 5.74 % 6.12 %
Return on average tangible stockholders' equity 6.61 % 10.53 % 7.71 % 8.40 %
Efficiency ratio (non-GAAP) 65.69 % 56.53 % 64.44 % 61.42 %
 
Per Common Share Data:
Net income -- Basic $ 0.11 $ 0.17 $ 0.51 $ 0.53
Net income -- Diluted 0.11 0.17 0.51 0.53
Cash dividends declared 0.085 0.085 0.340 0.340
Book value per share (end of period) 8.79 8.78 8.79 8.78
Tangible book value per share (end of period) (non-GAAP) 6.57 6.49 6.57 6.49
Stock price (end of period) 9.55 8.50 9.55 8.50
 
(1) Calculated on a fully tax-equivalent basis.
 
 

At or for the Three Months Ended

Dec 31, 2013 Sep 30, 2013 Jun 30, 2013 Mar 31, 2013 Dec 31, 2012
(Dollars in Thousands)
Balance Sheet:
Total assets $ 5,325,106 $ 5,236,229 $ 5,150,480 $ 5,110,378 $ 5,147,534
Total loans and leases 4,362,465 4,299,477 4,205,015 4,173,985 4,175,712
Total deposits 3,835,006 3,737,978 3,656,981 3,626,033 3,616,259
Brookline Bancorp, Inc. stockholders' equity 613,867 614,811 611,284 614,039 612,097
 
Asset Quality:
Nonperforming assets $ 18,108 $ 16,738 $ 18,986 $ 22,941 $ 23,737
Nonperforming assets as a percentage of total assets 0.34 % 0.32 % 0.37 % 0.45 % 0.46 %
Allowance for loan and lease losses $ 48,473 $ 46,390 $ 44,281 $ 42,532 $ 41,152

Allowance for loan and lease losses as a percentage of total loans and leases

1.11 % 1.08 % 1.05 % 1.02 % 0.99 %
Net loan and lease charge-offs $ 1,676 $ 621 $ 639 $ 419 $ 826

Net loan and lease charge-offs as a percentage of average loans and leases (annualized)

0.16 % 0.06 % 0.06 % 0.04 % 0.08 %
 
Capital Ratios:
Stockholders' equity to total assets 11.53 % 11.74 % 11.87 % 12.02 % 11.89 %

Tangible stockholders' equity to tangible assets (non-GAAP)

8.88 % 9.03 % 9.10 % 9.20 % 9.08 %

BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Consolidated Balance Sheets (Unaudited)
               

December 31,
2013

September 30,
2013		 June 30,
2013		 March 31,
2013		 December 31,
2012
(In Thousands Except Share Data)
ASSETS
Cash and due from banks $ 37,148 $ 37,220 $ 33,008 $   39,330 $ 78,441
Short-term investments   55,357     58,195     66,787       52,766     38,656  
Total cash and cash equivalents   92,505     95,415     99,795       92,096     117,097  
Investment securities available-for-sale 492,428 480,402 479,177 486,625 481,323
Investment securities held-to-maturity   500     500     500       500     500  
Total investment securities   492,928     480,902     479,677       487,125     481,823  
Loans held-for-sale 13,372 200 4,221 839 3,233
Loans and leases:
Commercial real estate loans:
Commercial real estate mortgage 1,461,985 1,400,769 1,349,051 1,299,496 1,301,233
Multi-family mortgage 627,933 599,601 594,939 585,669 606,533
Construction   113,705     118,090     112,684       115,896     98,197  
Total commercial real estate loans   2,203,623     2,118,460     2,056,674       2,001,061     2,005,963  
Commercial loans and leases:
Commercial 407,792 409,376 376,507 399,781 382,277
Equipment financing 513,024 513,345 476,724 448,701 420,991
Condominium association   44,794     43,205     41,859       43,043     44,187  
Total commercial loans and leases   965,610     965,926     895,090       891,525     847,455  
Indirect automobile loans   400,531     440,949     479,782       510,954     542,344  
Consumer loans:
Residential mortgage 528,185 511,835 507,099 509,155 511,109
Home equity 257,461 254,888 257,839 254,048 261,562
Other consumer   7,055     7,419     8,531       7,242     7,279  
Total consumer loans   792,701     774,142     773,469       770,445     779,950  
Total loans and leases 4,362,465 4,299,477 4,205,015 4,173,985 4,175,712
Allowance for loan and lease losses   (48,473 )   (46,390 )   (44,281 )     (42,532 )   (41,152 )
Net loans and leases   4,313,992     4,253,087     4,160,734       4,131,453     4,134,560  
Restricted equity securities 66,559 66,627 66,627 66,553 68,661
Premises and equipment, net 80,505 79,504 76,867

 

74,223

 

70,791
Deferred tax asset 31,710 34,322 32,739 29,123 27,197
Goodwill, net 137,890 137,890 137,890

 

137,890

 

137,890
Identified intangible assets, net of accumulated amortization 16,887 18,015 19,168 20,345 21,510
Other real estate owned and repossessed assets, net 1,578 1,319 1,493 1,248 1,491
Other assets   77,180     68,948     71,269       69,483     83,281  
Total assets $ 5,325,106   $ 5,236,229   $ 5,150,480   $   5,110,378   $ 5,147,534  
 
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Non-interest-bearing deposits:
Demand checking accounts $ 707,023 $ 667,181 $ 644,507 $ 623,315 $ 623,274
Interest-bearing deposits:
NOW accounts 210,602 204,164 196,778 194,313 212,858
Savings accounts 494,734 512,393 503,170 509,967 515,367
Money market accounts 1,487,979 1,403,881 1,340,024 1,303,231 1,253,819
Certificate of deposit accounts   934,668     950,359     972,502       995,207     1,010,941  

Total interest-bearing deposits

  3,127,983     3,070,797     3,012,474       3,002,718     2,992,985  
Total deposits   3,835,006     3,737,978     3,656,981       3,626,033     3,616,259  
Borrowed funds:
Advances from the FHLBB 768,773 784,740 785,565 759,675 790,865
Other borrowed funds   43,782     44,062     44,501       60,772     63,104  
Total borrowed funds   812,555     828,802     830,066       820,447     853,969  
Mortgagors' escrow accounts 7,889 8,008 7,465 7,823 6,946
Accrued expenses and other liabilities   51,485     42,820     41,097       38,825     54,551  
Total liabilities   4,706,935     4,617,608     4,535,609       4,493,128     4,531,725  
 
Stockholders' equity:
Brookline Bancorp, Inc. stockholders' equity:
Common stock, $0.01 par value; 200,000,000 shares authorized;
75,744,445 shares, 75,744,445 shares, 75,744,445 shares, 75,744,445 shares, and 75,749,825 shares issued, respectively

757

757

757

757

757

Additional paid-in capital

617,539

616,968

619,033

618,708

618,426

Retained earnings, partially restricted 64,903 63,210 59,747 56,211 53,358
Accumulated other comprehensive (loss) income (7,916 ) (4,900 ) (4,441 ) 2,233 3,483
Treasury stock, at cost;
5,171,985 shares, 5,154,327 shares, 5,373,733 shares, 5,373,733 shares, and 5,373,733 shares, respectively
(59,826 ) (59,576 ) (62,107 ) (62,107 ) (62,107 )
Unallocated common stock held by ESOP;
291,666 shares, 302,229 shares, 312,792 shares, 323,355 shares, and 333,918 shares, respectively
  (1,590 )   (1,648 )   (1,705 )     (1,763 )   (1,820 )
Total Brookline Bancorp, Inc. stockholders' equity   613,867     614,811     611,284       614,039     612,097  
Noncontrolling interest in subsidiary   4,304     3,810     3,587       3,211     3,712  
Total stockholders' equity   618,171     618,621     614,871       617,250     615,809  
Total liabilities and stockholders' equity $ 5,325,106   $ 5,236,229   $ 5,150,480   $   5,110,378   $ 5,147,534  

BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Consolidated Statements of Income (Unaudited)
       
Three Months Ended December 31, Year Ended December 31,
2013 2012 2013 2012
(In Thousands Except Share Data)
Interest and dividend income:
Loans and leases $ 48,573 $ 50,662 $ 197,098 $ 203,711
Debt securities 2,136 1,832 7,963 8,551
Short-term investments 39 42 111 208
Marketable and restricted equity securities   301     440     1,212     730  
Total interest and dividend income   51,049     52,976     206,384     213,200  
 
Interest expense:
Deposits 4,559 5,077 18,773 21,432
Borrowed funds   2,716     3,335     11,393     14,400  
Total interest expense   7,275     8,412     30,166     35,832  
 
Net interest income 43,774 44,564 176,218 177,368
Provision for credit losses   3,887     3,101     10,929     15,888  
Net interest income after provision for credit losses   39,887     41,463     165,289     161,480  
 
Non-interest income:
Fees, charges and other income 3,828 4,716 15,240 16,475
Loss from investments in affordable housing projects (318 ) (239 ) (1,812 ) (694 )
Gain (loss) on sales of securities, net 397 129 397 926
Gain on sales of loans and leases   -     1,898     -     1,898  
Total non-interest income   3,907     6,504     13,825     18,605  
 
Non-interest expense:
Compensation and employee benefits 16,675 15,705 65,261 58,830
Occupancy 3,356 2,759 12,616 10,611
Equipment and data processing 4,476 3,283 16,899 14,830
Professional services 1,352 1,536 5,695 12,475
FDIC insurance 724 1,089 3,102 4,212
Advertising and marketing 807 818 3,003 2,984
Amortization of identified intangible assets 1,127 1,797 4,623 5,622
Other   2,803     1,882     11,261     10,811  
Total non-interest expense   31,320     28,869     122,460     120,375  
 
Income before income taxes 12,474 19,098 56,654 59,710
Provision for income taxes   4,325     6,868     19,481     21,341  
Net income before noncontrolling interest in subsidiary 8,149 12,230 37,173 38,369

Less net income attributable to noncontrolling interest in subsidiary

  495     367     1,787     1,227  
Net income attributable to Brookline Bancorp, Inc. $ 7,654   $ 11,863   $ 35,386   $ 37,142  
 
Earnings per common share:
Basic $ 0.11 $ 0.17 $ 0.51 $ 0.53
Diluted $ 0.11 $ 0.17 0.51 0.53
 
Weighted average common shares outstanding during the period:
Basic 69,862,175 69,742,225 69,808,164 69,702,417
Diluted 69,951,683 69,799,324 69,883,924 69,746,256
 
Dividends declared per common share $ 0.085 $ 0.085 $ 0.340 $ 0.340

BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Asset Quality Analysis (Unaudited)
 
At or for the Three Months Ended
Dec 31, 2013 Sep 30, 2013 Jun 30, 2013 Mar 31, 2013 Dec 31, 2012
(Dollars in Thousands)
NONPERFORMING ASSETS:
 
Loans and leases accounted for on a nonaccrual basis:
Commercial real estate mortgage $ 1,098 $ 1,137 $ 2,682 $ 3,970 $ 4,014
Multi-family mortgage - 664 1,593 4,132 4,233
Construction   -     -     -     -     -  
Total commercial real estate loans 1,098 1,801 4,275 8,102 8,247
 
Commercial 6,147 4,747 4,680 5,035 5,454
Equipment financing 4,145 4,116 4,014 3,595 3,873
Condominium association   1     3     4     6     8  
Total commercial loans and leases 10,293 8,866 8,698 8,636 9,335
 
Indirect automobile loans 259 195 156 62 99
 
Residential mortgage 2,875 2,738 2,786 3,724 3,804
Home equity 1,987 1,801 1,557 1,150 716
Other consumer   18     18     21     19     45  
Total consumer loans 4,880 4,557 4,364 4,893 4,565
 
Total nonaccrual loans and leases - 16,530 - 15,419 - 17,493 - 21,693 - 22,246
 
Other real estate owned 578 726 1,002 943 903
Other repossessed assets   1,000     593     491     305     588  
 
Total nonperforming assets $ 18,108   $ 16,738   $ 18,986   $ 22,941   $ 23,737  
 
 
Troubled debt restructurings on accrual 12,759 12,158 9,631 9,816 10,414
Troubled debt restructurings on nonaccrual   5,589     5,905     6,919     7,514     6,786  
Total troubled debt restructurings $ 18,348   $ 18,063   $ 16,550   $ 17,330   $ 17,200  
 
 
Nonperforming loans and leases as a percentage of total loans and leases 0.38 % 0.36 % 0.42 % 0.52 % 0.53 %
Nonperforming assets as a percentage of total assets 0.34 % 0.32 % 0.37 % 0.45 % 0.46 %
 
 
PROVISION AND ALLOWANCE FOR LOAN AND LEASE LOSSES:
 
Allowance for loan and lease losses at beginning of period $ 46,390 $ 44,281 $ 42,532 $ 41,152 $ 38,913
Charge-offs (2,193 ) (903 ) (1,028 ) (661 ) (1,527 )
Recoveries   517     282     389     242     701  
Net charge-offs (1,676 ) (621 ) (639 ) (419 ) (826 )
Provision for loan and lease losses   3,759     2,730     2,388     1,799     3,065  
Allowance for loan and lease losses at end of period $ 48,473   $ 46,390   $ 44,281   $ 42,532   $ 41,152  
 
Allowance for loan and lease losses as a percentage of total loans and leases
1.11 % 1.08 % 1.05 % 1.02 % 0.99 %
Allowance for loan and lease losses related to originated loans and leases as a percentage of originated loans and leases
1.32 % 1.31 % 1.34 % 1.34 % 1.32 %
 
NET CHARGE-OFFS:
 
Commercial real estate loans $ (9 ) $ 7 $ 81 $ (4 ) $ -
Commercial loans and leases 803 157 295 166 196
Indirect automobile loans 419 396 170 231 366
Consumer loans   463     61     93     26     264  
Total net charge-offs $ 1,676   $ 621   $ 639   $ 419   $ 826  
 
Net loan and lease charge-offs as a percentage of average loans and leases (annualized)
0.16 % 0.06 % 0.06 % 0.04 % 0.08 %

BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Average Yields / Costs (Unaudited)
 
  At or for the Three Months Ended
December 31, 2013     September 30, 2013     December 31, 2012
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:
Short-term investments $ 72,304 $ 39 0.21 % $ 69,272 $ 22 0.13 % $ 70,040 $ 42 0.24 %
Debt securities (2) 474,968 2,141 1.80 % 475,506 2,047 1.72 % 456,690 1,854 1.62 %
Marketable and restricted equity securities (2)   66,990     350 2.08 %   66,995     346 2.06 %   68,660     508 2.95 %
Total investments   614,262     2,530 1.65 %   611,773     2,415 1.58 %   595,390     2,404 1.61 %
Commercial real estate loans (3) 2,165,330 24,816 4.54 % 2,088,450 24,021 4.56 % 1,967,921 23,798 4.86 %
Commercial loans (3) 461,656 4,783 4.07 % 442,052 4,493 3.99 % 395,991 5,042 5.08 %
Equipment financing (3) 494,173 7,897 6.36 % 489,127 8,343 6.79 % 428,867 8,285 7.73 %
Indirect automobile loans (3) 420,456 3,743 3.53 % 460,927 4,172 3.59 % 560,118 5,510 3.91 %
Residential mortgage loans (3) 516,155 4,794 3.70 % 507,616 4,866 3.81 % 507,955 5,323 4.19 %
Other consumer loans (3)   264,528     2,738 4.10 %   262,442     2,762 4.17 %   269,019     2,713 4.01 %
Total loans and leases   4,322,298     48,771 4.47 %   4,250,614     48,657 4.54 %   4,129,871     50,671 4.91 %
Total interest-earning assets   4,936,560     51,301 4.12 %   4,862,387     51,072 4.16 %   4,725,261     53,075 4.50 %
Allowance for loan and lease losses (46,566 ) (44,959 ) (39,435 )
Non-interest-earning assets   397,488     382,155     398,980  
Total assets $ 5,287,482   $ 5,199,583   $ 5,084,806  
 
Liabilities and Stockholders' Equity:
Interest-bearing liabilities:
Interest-bearing deposits:
NOW accounts $ 207,768 $ 45 0.09 % $ 198,643 $ 42 0.08 % $ 184,849 $ 48 0.10 %
Savings accounts 502,802 312 0.25 % 512,205 315 0.24 % 518,452 374 0.29 %
Money market accounts 1,471,402 2,086 0.56 % 1,377,495 2,040 0.59 % 1,246,514 2,115 0.68 %
Certificates of deposit   942,595     2,116 0.89 %   957,494     2,240 0.93 %   1,028,884     2,540 0.98 %
Total interest-bearing deposits   3,124,567     4,559 0.58 %   3,045,837     4,637 0.60 %   2,978,699     5,077 0.68 %
Advances from the FHLBB 752,854 2,583 1.36 % 772,067 2,666 1.37 % 757,842 3,207 1.68 %
Other borrowed funds   40,729     133 1.29 %   44,326     108 0.96 %   62,299     128 0.82 %
Total interest-bearing liabilities   3,918,150     7,275 0.74 %   3,862,230     7,411 0.76 %   3,798,840     8,412 0.88 %
Non-interest-bearing liabilities:
Demand checking accounts 701,163 675,907 612,267
Other non-interest-bearing liabilities   45,804     44,832     58,496  
Total liabilities 4,665,117 4,582,969 4,469,603
Brookline Bancorp, Inc. stockholders' equity 618,385 612,866 611,181
Noncontrolling interest in subsidiary   3,980     3,748     4,022  
Total liabilities and equity $ 5,287,482   $ 5,199,583   $ 5,084,806  
Net interest income (tax-equivalent basis) /
Interest-rate spread (4) 44,026 3.38 % 43,661 3.40 % 44,663 3.62 %
Less adjustment of tax-exempt income   252   249   99
Net interest income $ 43,774 $ 43,412 $ 44,564
Net interest margin (5) 3.54 % 3.56 % 3.79 %
 
 
(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 securities available-for-sale. 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)
 
At or for the Year Ended
December 31, 2013     December 31, 2012

Average Balance

     Interest (1)     Average Yield/ Cost Average Balance     Interest (1)     Average Yield/ Cost
(Dollars in Thousands)
Assets:
Interest-earning assets:
Short-term investments $ 62,258 $ 111 0.18 % $ 95,173 $ 209 0.22 %
Debt securities (2) 477,318 7,983 1.67 % 449,694 8,606 1.91 %
Marketable and restricted equity securities (2)   67,375     1,405 2.09 %   58,354     824 1.41 %
Total investments   606,951     9,499 1.57 %   603,221     9,639 1.61 %
Commercial real estate loans (3) 2,091,860 98,245 4.67 % 1,910,320 94,521 4.97 %
Commercial loans (3) 435,184 20,580 4.68 % 370,366 19,471 5.26 %
Equipment financing (3) 452,601 31,076 6.87 % 394,845 32,027 8.11 %
Indirect automobile loans (3) 475,387 17,355 3.65 % 573,398 23,641 4.12 %
Residential mortgage loans (3) 511,348 19,926 3.90 % 501,660 21,998 4.39 %
Other consumer loans (3)   263,955     10,624 4.02 %   269,725     12,299 4.56 %
Total loans and leases   4,230,335     197,806 4.66 %   4,020,314     203,957 5.08 %
Total interest-earning assets   4,837,286     207,305 4.27 %   4,623,535     213,596 4.63 %
Allowance for loan and lease losses (44,008 ) (38,073 )
Non-interest-earning assets   380,724     407,330  
Total assets $ 5,174,002   $ 4,992,792  
 
Liabilities and Stockholders' Equity:
Interest-bearing liabilities:
Interest-bearing deposits:
NOW accounts $ 198,050 $ 173 0.09 % $ 183,046 $ 209 0.11 %
Savings accounts 509,436 1,288 0.25 % 517,485 1,726 0.33 %
Money market accounts 1,370,195 8,220 0.60 % 1,203,113 8,773 0.73 %
Certificates of deposit   971,044     9,092 0.94 %   1,055,510     10,724 1.02 %
Total interest-bearing deposits   3,048,725     18,773 0.62 %   2,959,154     21,432 0.72 %
Advances from the FHLBB 759,640 10,886 1.43 % 732,457 13,710 1.87 %
Other borrowed funds   48,367     507 1.05 %   60,497     690 1.14 %
Total interest-bearing liabilities   3,856,732     30,166 0.78 %   3,752,108     35,832 0.95 %
Non-interest-bearing liabilities:
Demand checking accounts 656,724 562,238
Other non-interest-bearing liabilities   40,574     68,055  
Total liabilities 4,554,030 4,382,401
Brookline Bancorp, Inc. stockholders' equity 616,243 606,661
Noncontrolling interest in subsidiary   3,729     3,730  
Total liabilities and equity $ 5,174,002   $ 4,992,792  
Net interest income (tax-equivalent basis) /
Interest-rate spread (4) 177,139 3.49 % 177,764 3.67 %
Less adjustment of tax-exempt income   921   396
Net interest income $ 176,218 $ 177,368
Net interest margin (5) 3.64 % 3.85 %
 
 
(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 securities available-for-sale. 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)
         
At or for the Three Months Ended

December 31,

At or for the Year Ended

December 31,

2013 2012 2013 2012
Reconciliation Table - Non-GAAP Financial Information (Dollars in Thousands Except Share Data)
 
Net income attributable to Brookline Bancorp, Inc. $ 7,654 $ 11,863 $ 35,386 $ 37,142
Add:
Compensation-related expenses (after-tax) 595 - 595 -
Acquisition-related expenses (after-tax)   -     -     -     3,972  
Net earnings from operations $ 8,249   $ 11,863   $ 35,981   $ 41,114  
 
Operating earnings per common share:
Basic $ 0.12 $ 0.17 $ 0.52 $ 0.59
Diluted 0.12 0.17 0.51 0.59
 
Weighted average common shares outstanding during the period:
Basic 69,862,175 69,742,225 69,808,164 69,702,417
Diluted 69,951,683 69,799,324 69,883,924 69,746,256
 
 
Dec 31, 2013 Sep 30, 2013 Jun 30, 2013 Mar 31, 2013 Dec 31, 2012
(Dollars in Thousands)
 
Brookline Bancorp, Inc. stockholders' equity $ 613,867 $ 614,811 $ 611,284 $ 614,039 $ 612,097
Less:
Goodwill 137,890 137,890 137,890 137,890 137,890
Identified intangible assets   16,887     18,015     19,168     20,345     21,510  
Tangible stockholders' equity $ 459,090   $ 458,906   $ 454,226   $ 455,804   $ 452,697  
 
Total assets $ 5,325,106 $ 5,236,229 $ 5,150,480 $ 5,110,378 $ 5,147,534
Less:
Goodwill 137,890 137,890 137,890 137,890 137,890
Identified intangible assets   16,887     18,015     19,168     20,345     21,510  
Tangible assets $ 5,170,329   $ 5,080,324   $ 4,993,422   $ 4,952,143   $ 4,988,134  
 

Tangible stockholders' equity to tangible assets

8.88 % 9.03 % 9.10 % 9.20 % 9.08 %
 
 
Dec 31, 2013 Sep 30, 2013 Jun 30, 2013 Mar 31, 2013 Dec 31, 2012
(Dollars in Thousands)
 
Tangible stockholders' equity $ 459,090   $ 458,906   $ 454,226   $ 455,804   $ 452,697  
 
Number of common shares issued 75,744,445 75,744,445 75,744,445 75,744,445 75,749,825
Less:
Treasury shares 5,171,985 5,154,327 5,373,733 5,373,733 5,373,733
Unallocated ESOP shares 291,666 302,229 312,792 323,355 333,918
Unvested restricted stocks   431,068     429,818     276,011     277,510     295,055  
Number of common shares outstanding   69,849,726     69,858,071     69,781,909     69,769,847     69,747,119  
 
Tangible book value per common share $ 6.57 $ 6.57 $ 6.51 $ 6.53 $ 6.49
 
Dec 31, 2013 Sep 30, 2013 Jun 30, 2013 Mar 31, 2013 Dec 31, 2012
(Dollars in Thousands)
 
Allowance for loan and lease losses $ 48,473 $ 46,390 $ 44,281 $ 42,532 $ 41,152
Less:
Allowance for acquired loans and leases losses   1,632     1,278     620     -    
Allowance for originated loan and lease losses $ 46,841   $ 45,112   $ 43,661   $ 42,532   $ 41,152  
 
Total loans and leases $ 4,362,465 $ 4,299,477 $ 4,205,015 $ 4,173,985 $ 4,175,712
Less:
Total acquired loans and leases   815,412     865,708     938,815     997,988     1,059,610  
Total originated loans and leases $ 3,547,053   $ 3,433,769   $ 3,266,200   $ 3,175,997   $ 3,116,102  
 
Allowance for loan and lease losses related to
originated loans and leases as a percentage of originated loans and leases
1.32 % 1.31 % 1.34 % 1.34 % 1.32 %

Brookline Bancorp, Inc.
Thomas J. Meshako, 617-927-4889
Principal Financial Officer
tmeshako@brkl.com