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Brookline Bancorp Announces Third Quarter Results

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Brookline Bancorp, Inc. (NASDAQ:BRKL) (the “Company”) today announced net income of $11.6 million, or $0.17 per basic and diluted share, for the third quarter of 2014, compared to $10.0 million, or $0.14 per basic and diluted share, for the second quarter of 2014.

During the third quarter of 2014, the Company recorded $1.4 million in other income due to a settlement payment from an insurance carrier in relation to a 2012 litigation. Excluding this item, net income would have been $0.15 per basic and diluted share.

Paul Perrault, President and Chief Executive Officer of Brookline Bancorp, Inc., stated: “Thanks to our driven colleagues and our customer focused culture, I am pleased to announce that Brookline Bancorp delivered another excellent quarter with solid loan and deposit growth, as well as strong earnings and returns to our shareholders. The Company will continue to encounter fierce competition, but I am confident that the Company is poised to finish the year strong.”

BALANCE SHEET

Total assets of $5.7 billion at September 30, 2014 increased $130.5 million from June 30, 2014, and increased $392.9 million from December 31, 2013. The growth in total assets was driven by growth in the loan portfolio. At September 30, 2014, total loans and leases were $4.7 billion, representing an increase of $132.1 million from June 30, 2014, and an increase of $373.6 million from December 31, 2013. During the third quarter of 2014, total loans and leases grew 11.5 percent on an annualized basis. At September 30, 2014, the commercial real estate and commercial loan and lease portfolios totaled $3.5 billion, or 74.4 percent of total loans and leases, as compared to $3.4 billion, or 73.7 percent at June 30, 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 $133.0 million during the third quarter of 2014, or 15.7 percent on an annualized basis.

Cash, cash equivalents, and investment securities increased $7.4 million to $616.2 million, or 10.8 percent of total assets at September 30, 2014, as compared to $608.8 million, or 10.9 percent of total assets at June 30, 2014, and increased $30.8 million from $585.4 million, or 11.0 percent of total assets at December 31, 2013.

Total deposits of $3.9 billion at September 30, 2014 increased $28.1 million from June 30, 2014, and increased $54.2 million from December 31, 2013. Core deposits, which consist of demand checking, NOW, savings, and money market accounts, increased at a 2.8 percent annualized rate in the third quarter of 2014. The core deposit ratio remained constant at 76.7 percent at September 30, 2014 and June 30, 2014.

Total borrowings at September 30, 2014 were $1.1 billion, an increase of $91.9 million as compared to June 30, 2014, and an increase of $320.3 million as compared to December 31, 2013. During the three months ended September 30, 2014, the Company issued $75.0 million of 6.0% fixed-to-floating subordinated notes due September 15, 2029.

The ratio of stockholders’ equity to total assets was 11.06 percent at September 30, 2014, as compared to 11.23 percent at June 30, 2014 and 11.53 percent at December 31, 2013. The ratio of tangible stockholders’ equity to tangible assets was 8.63 percent at September 30, 2014, as compared to 8.73 percent at June 30, 2014 and 8.88 percent at December 31, 2013.

NET INTEREST INCOME

Net interest income increased $0.9 million to $47.3 million during the third quarter of 2014 from the linked quarter. The increase of $1.3 million in interest income from loans and leases was driven by an increase of $2.1 million due to volume offset by a decrease of $0.8 million due to lower interest rates. The increase in interest income from loans and leases was offset by a $0.3 million increase in interest expense from borrowed funds, primarily due to additional interest expense on the newly issued subordinated notes. The net interest margin decreased 7 basis points to 3.54 percent for the three months ended September 30, 2014.

PROVISION FOR LOAN LOSSES

The Company recorded a provision for loan and lease losses of $1.9 million for the quarter ended September 30, 2014, compared to $2.2 million during the second quarter of 2014. The decrease of $0.3 million quarter over quarter is due to an improvement in the credit characteristics of the equipment financing portfolio, partially offset by additional reserves required for the deterioration in the acquired portfolio and loan growth during the quarter.

Net charge-offs increased slightly to $0.8 million for the third quarter of 2014 compared to $0.7 million for the second quarter of 2014. The ratio of net charge-offs to average loans on an annualized basis remained constant at 0.07 percent for the third and second quarter of 2014.

The allowance for loan losses represented 1.12 percent of total loans and leases at September 30, 2014 and June 30, 2014. The allowance for loan losses related to originated loans and leases as a percentage of originated loans and leases was 1.26 percent at September 30, 2014, compared to 1.31 percent at June 30, 2014 due to improved credit quality slightly offset by loan volume.

NON-INTEREST INCOME

Non-interest income for the quarter ended September 30, 2014 increased $2.4 million to $5.7 million from the linked quarter. The increase was largely driven by a litigation settlement of $1.4 million, an increase in the loan fees of $0.5 million from back-to-back interest-rate swaps and an increase of $0.5 million in the gain on sales of loans and leases held-for sale.

NON-INTEREST EXPENSE

Non-interest expense for the quarter ended September 30, 2014 increased $0.7 million to $31.9 million from the linked quarter, principally driven by a $0.6 million increase in Supplemental Employee Retirement Plan expense due to a decrease in the discount rate.

RETURNS ON AVERAGE ASSETS AND AVERAGE EQUITY

The return on average assets increased during the third quarter of 2014 to 0.82 percent at September 30, 2014 from 0.73 percent for the second quarter of 2014. The return on average tangible assets increased to 0.84 percent for the third quarter of 2014 from 0.75 percent for the second quarter of 2014.

The return on average stockholders’ equity increased during the third quarter of 2014 to 7.32 percent from 6.37 percent for the second quarter of 2014. The return on average tangible stockholders’ equity increased to 9.66 percent for the third quarter of 2014 from 8.44 percent for the second quarter of 2014.

ASSET QUALITY

Nonperforming loans and leases increased $0.2 million during the third quarter of 2014 to $17.3 million at September 30, 2014 from the linked quarter. The ratio of nonperforming loans and leases to total loans and leases remained unchanged at 0.37 percent at September 30, 2014 from the linked quarter. Nonperforming assets also increased $1.4 million during the third quarter of 2014 to $19.8 million, or 0.35 percent of total assets, at September 30, 2014 from the linked quarter.

DIVIDEND DECLARED

The Company’s Board of Directors approved a dividend of $0.085 per share. The dividend will be paid on November 28, 2014 to shareholders of record on November 14, 2014.

STOCK REPURCHASE

On October 29, 2014, the Board of Directors of the Company approved a stock repurchase program of up to $10.0 million of total outstanding shares of the Company’s common stock over a period of fourteen months ending on December 31, 2015. The shares may be repurchased from time to time in open market or negotiated transactions at prevailing market prices in accordance with federal securities laws.

CONFERENCE CALL

The Company will conduct a conference call/webcast at 1:30 PM Eastern Standard Time on Thursday, October 30, 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 10053487. 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 $5.7 billion in assets and branch locations in Massachusetts and Rhode Island, is headquartered in Boston, Massachusetts and operates as the holding company for Brookline Bank, 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
September 30, 2014 June 30, 2014 March 31, 2014 December 31, 2013 September 30, 2013
(Dollars In Thousands Except Share Data)
Earnings Data:
Net interest income $ 47,324 $ 46,434 $ 47,734 $ 43,774 $ 43,412
Provision for credit losses 2,034 2,276 2,443 3,887 2,748
Non-interest income 5,656 3,290 5,124 3,907 3,456
Non-interest expense 31,924 31,222 33,576 31,320 29,556
Income before provision for income taxes 19,022 16,226 16,839 12,474 14,564
Net income attributable to Brookline Bancorp, Inc. 11,581 9,976 10,422 7,654 9,429
Performance Ratios:
Net interest margin (1) 3.54 % 3.61 % 3.82 % 3.54 % 3.56 %
Interest-rate spread (1) 3.40 % 3.47 % 3.67 % 3.38 % 3.40 %
Return on average assets 0.82 % 0.73 % 0.78 % 0.58 % 0.73 %
Return on average tangible assets (non-GAAP)

0.84

% 0.75 % 0.80 % 0.60 % 0.75 %
Return on average stockholders’ equity 7.32 % 6.37 % 6.70 % 4.95 % 6.15 %
Return on average tangible stockholders’ equity (non-GAAP) 9.66 % 8.44 % 8.92 % 6.61 % 8.27 %
Efficiency ratio 60.26 % 62.79 % 63.52 % 65.69 % 63.06 %
Per Common Share Data:
Net income – Basic $ 0.17 $ 0.14 $ 0.15 $ 0.11 $ 0.14
Net income – Diluted 0.17 0.14 0.15 0.11 0.13
Cash dividends declared 0.085 0.085 0.085 0.085 0.085
Book value per share (end of period) 9.03 8.98 8.88 8.79 8.80
Tangible book value per share (end of period) (non-GAAP) 6.86 6.79 6.68 6.57 6.57
Stock price (end of period) 8.55 9.37 9.42 9.55 9.40
Balance Sheet:
Total assets $ 5,717,965 $ 5,587,486 $ 5,418,785 $ 5,325,106 $ 5,236,229
Total loans and leases 4,736,028 4,603,913 4,461,997 4,362,465 4,299,477
Total deposits 3,889,204 3,861,147 3,847,650 3,835,006 3,737,978
Brookline Bancorp, Inc. stockholders’ equity 632,400 627,663 620,799 613,867 614,811
Asset Quality:
Nonperforming assets $ 19,785 $ 18,407 $ 19,430 $ 18,079 $ 16,738
Nonperforming assets as a percentage of total assets 0.35 % 0.33 % 0.36 % 0.34 % 0.32 %
Allowance for loan and lease losses $ 52,822 $ 51,686 $ 50,224 $ 48,473 $ 46,390
Allowance for loan and lease losses as a percentage of total loans and leases 1.12 % 1.12 % 1.13 % 1.11 % 1.08 %
Net loan and lease charge-offs $ 793 $ 720 $ 666 $ 1,676 $ 621
Net loan and lease charge-offs as a percentage of average loans and leases (annualized) 0.07 % 0.06 % 0.06 % 0.16 % 0.06 %
Capital Ratios:
Stockholders’ equity to total assets 11.06 % 11.23 % 11.46 % 11.53 % 11.74 %
Tangible stockholders’ equity to tangible assets (non-GAAP) 8.63 % 8.73 % 8.87 % 8.88 % 9.03 %
(1) Calculated on a fully tax-equivalent basis.
BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Consolidated Balance Sheets (Unaudited)
September 30, 2014 June 30, 2014 March 31, 2014 December 31, 2013 September 30, 2013
ASSETS (In Thousands Except Share Data)
Cash and due from banks $ 37,237 $ 58,962 $ 50,000 $ 37,148 $ 37,220
Short-term investments 50,901 20,771 22,936 55,357 58,195
Total cash and cash equivalents 88,138 79,733 72,936 92,505 95,415
Investment securities available-for-sale 527,516 528,586 527,073 492,428 480,402
Investment securities held-to-maturity 500 500 500 500 500
Total investment securities 528,016 529,086 527,573 492,928 480,902
Loans and leases held-for-sale 464 13,890 177 13,372 200
Loans and leases:
Commercial real estate loans:
Commercial real estate mortgage 1,610,592 1,545,483 1,505,674 1,461,985 1,400,769
Multi-family mortgage 630,852 631,371 632,122 627,933 599,601
Construction 161,279 137,731 136,679 113,705 118,090
Total commercial real estate loans 2,402,723 2,314,585 2,274,475 2,203,623 2,118,460
Commercial loans and leases:
Commercial 495,712 478,856 437,957 407,792 409,376
Equipment financing 576,541 552,489 529,670 513,024 513,345
Condominium association 49,600 45,608 43,810 44,794 43,205
Total commercial loans and leases 1,121,853 1,076,953 1,011,437 965,610 965,926
Indirect automobile loans 353,263 376,314 373,965 400,531 440,949
Consumer loans:
Residential mortgage 570,128 550,814 530,347 528,185 511,835
Home equity 274,762 270,203 261,836 257,461 254,888
Other consumer 13,299 15,044 9,937 7,055 7,419
Total consumer loans 858,189 836,061 802,120 792,701 774,142
Total loans and leases 4,736,028 4,603,913 4,461,997 4,362,465 4,299,477
Allowance for loan and lease losses (52,822 ) (51,686 ) (50,224 ) (48,473 ) (46,390 )
Net loans and leases 4,683,206 4,552,227 4,411,773 4,313,992 4,253,087
Restricted equity securities 74,804 71,446 66,559 66,559 66,627
Premises and equipment, net of accumulated depreciation 81,479 82,166 81,396 80,505 79,504
Deferred tax asset 29,168 27,799 29,319 31,710 34,322
Goodwill 137,890 137,890 137,890 137,890 137,890
Identified intangible assets, net of accumulated amortization 14,371 15,199 16,026 16,887 18,015
Other real estate owned and repossessed assets 2,463 1,246 1,290 1,578 1,319
Other assets 77,966 76,804 73,846 77,180 68,948
Total assets $ 5,717,965 $ 5,587,486 $ 5,418,785 $ 5,325,106 $ 5,236,229
LIABILITIES AND STOCKHOLDERS’ EQUITY
Deposits:
Non-interest-bearing deposits:
Demand checking accounts $ 705,604 $ 716,883 $ 682,383 $ 707,023 $ 667,181
Interest-bearing deposits:
NOW accounts 220,766 209,682 212,877 210,602 204,164
Savings accounts 532,790 518,343 517,327 494,734 512,393
Money market accounts 1,522,612 1,516,023 1,517,290 1,487,979 1,403,881
Certificate of deposit accounts 907,432 900,216 917,773 934,668 950,359
Total interest-bearing deposits 3,183,600 3,144,264 3,165,267 3,127,983 3,070,797
Total deposits 3,889,204 3,861,147 3,847,650 3,835,006 3,737,978
Borrowed funds:
Advances from the FHLBB 1,027,211 1,005,644 855,915 768,773 784,740
Subordinated debentures and notes 82,763 9,201 9,182 9,163 9,143
Other borrowed funds 22,891 26,159 26,919 34,619 34,919
Total borrowed funds 1,132,865 1,041,004 892,016 812,555 828,802
Mortgagors’ escrow accounts 8,757 8,359 8,696 7,889 8,008
Accrued expenses and other liabilities 50,430 45,411 45,703 51,485 42,820
Total liabilities 5,081,256 4,955,921 4,794,065 4,706,935 4,617,608
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 616,997 617,709 617,978 617,538 616,968
Retained earnings, partially restricted 78,980 73,373 69,361 64,903 63,210
Accumulated other comprehensive (loss) income (4,681 ) (3,209 ) (5,936 ) (7,915 ) (4,900 )
Treasury stock, at cost;
5,035,956 shares, 5,144,807 shares, 5,171,985 shares, 5,171,985 shares, and 5,154,327 shares, respectively (58,228 ) (59,487 ) (59,826 ) (59,826 ) (59,576 )
Unallocated common stock held by ESOP;
261,453 shares, 271,524 shares, 281,595 shares, 291,666 shares, and 302,229 shares, respectively (1,425 ) (1,480 ) (1,535 ) (1,590 ) (1,648 )
Total Brookline Bancorp, Inc. stockholders’ equity 632,400 627,663 620,799 613,867 614,811
Noncontrolling interest in subsidiary 4,309 3,902 3,921 4,304 3,810
Total stockholders’ equity 636,709 631,565 624,720 618,171 618,621
Total liabilities and stockholders’ equity $ 5,717,965 $ 5,587,486 $ 5,418,785 $ 5,325,106 $ 5,236,229
BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Consolidated Statements of Income (Unaudited)
Three Months Ended
September 30, 2014 June 30, 2014 March 31, 2014 December 31, 2013 September 30, 2013
(In Thousands Except Share Data)
Interest and dividend income:
Loans and leases $ 51,769 $ 50,433 $ 51,942 $ 48,573 $ 48,462
Debt securities 2,312 2,360 2,259 2,136 2,041
Marketable and restricted equity securities 520 539 449 301 298
Short-term investments 15 14 44 39 22
Total interest and dividend income 54,616 53,346 54,694 51,049 50,823
Interest expense:
Deposits 4,248 4,201 4,291 4,559 4,637
Borrowed funds 3,044 2,711 2,669 2,716 2,774
Total interest expense 7,292 6,912 6,960 7,275 7,411
Net interest income 47,324 46,434 47,734 43,774 43,412
Provision for credit losses 2,034 2,276 2,443 3,887 2,748
Net interest income after provision for credit losses 45,290 44,158 45,291 39,887 40,664
Non-interest income:
Deposit fees 2,352 2,204 1,959 2,188 1,989
Loan fees 601 124 436 474 296
Loss from investments in affordable housing projects (543 ) (539 ) (504 ) (318 ) (558 )
Gain on sales of loans and leases held-for-sale 538 54 602 11 116
Other 1,298 1,466 1,121 1,155 1,592
(Loss)/gain on sales of securities, net (13 ) 397
(Loss)/gain on sale/disposals of premises and equipment, net (2 ) (6 ) 1,510 21
Litigation settlement 1,412
Total non-interest income 5,656 3,290 5,124 3,907 3,456
Non-interest expense:
Compensation and employee benefits 18,258 17,295 18,032 16,675 15,589
Occupancy 3,334 3,154 4,405 3,356 3,312
Equipment and data processing 4,193 4,348 4,377 4,476 4,061
Professional services 1,001 1,487 1,727 1,352 1,329
FDIC insurance 873 847 860 724 508
Advertising and marketing 745 776 665 807 758
Amortization of identified intangible assets 828 827 861 1,127 1,154
Other 2,692 2,488 2,649 2,803 2,845
Total non-interest expense 31,924 31,222 33,576 31,320 29,556
Income before provision for income taxes 19,022 16,226 16,839 12,474 14,564
Provision for income taxes 6,779 5,774 5,995 4,325 4,645
Net income before noncontrolling interest in subsidiary 12,243 10,452 10,844 8,149 9,919
Less net income attributable to noncontrolling interest in subsidiary 662 476 422 495 490
Net income attributable to Brookline Bancorp, Inc. $ 11,581 $ 9,976 $ 10,422 $ 7,654 $ 9,429
Earnings per common share:
Basic $ 0.17 $ 0.14 $ 0.15 $ 0.11 $ 0.14
Diluted $ 0.17 $ 0.14 $ 0.15 $ 0.11 $ 0.13
Weighted average common shares outstanding during the period:
Basic 69,989,909 69,886,576 69,875,473 69,862,175 69,830,953
Diluted 70,088,987 70,012,377 69,983,999 69,951,683 69,913,765
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)
Nine Months Ended September 30,
2014 2013
(In Thousands Except Share Data)
Interest and dividend income:
Loans and leases $ 154,144 $ 148,525
Debt securities 6,931 5,827
Marketable and restricted equity securities 1,508 911
Short-term investments 73 72
Total interest and dividend income 162,656 155,335
Interest expense:
Deposits 12,740 14,214
Borrowed funds 8,424 8,677
Total interest expense 21,164 22,891
Net interest income 141,492 132,444
Provision for credit losses 6,753 7,042
Net interest income after provision for credit losses 134,739 125,402
Non-interest income:
Deposit Fees 6,515 5,984
Loan Fees 1,229 1,127
Loss from investments in affordable housing projects (1,586 ) (1,494 )
Gain on sales of loans and leases held-for-sale 1,194 597
Other 3,817 3,708
Loss on sales of securities, net (13 )
Gain on sale/disposals of premises and equipment, net 1,502
Litigation settlement 1,412
Total non-interest income 14,070 9,922
Non-interest expense:
Compensation and employee benefits 53,585 48,586
Occupancy 10,893 9,260
Equipment and data processing 12,918 12,423
Professional services 4,215 4,343
FDIC insurance 2,580 2,378
Advertising and marketing 2,186 2,196
Amortization of identified intangible assets 2,516 3,496
Other 7,829 8,462
Total non-interest expense 96,722 91,144
Income before provision for income taxes 52,087 44,180
Provision for income taxes 18,548 15,156
Net income before noncontrolling interest in subsidiary 33,539 29,024
Less net income attributable to noncontrolling interest in subsidiary 1,560 1,292
Net income attributable to Brookline Bancorp, Inc. $ 31,979 $ 27,732
Earnings per common share:
Basic $ 0.46 $ 0.40
Diluted $ 0.46 $ 0.40
Weighted average common shares outstanding during the period:
Basic 69,918,248 69,789,737
Diluted 70,029,383 69,860,722
Dividends declared per common share $ 0.255 $ 0.255
BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Asset Quality Analysis (Unaudited)
At and for the Three Months Ended

September 30,
2014

June 30,
2014

March 31,
2014

December 31,
2013

September 30,
2013

(Dollars in Thousands)
NONPERFORMING ASSETS:
Loans and leases accounted for on a nonaccrual basis:
Commercial real estate mortgage $ 3,174 $ 3,011 $ 1,814 $ 1,098 $ 1,137
Multi-family mortgage 299 664
Construction
Total commercial real estate loans 3,473 3,011 1,814 1,098 1,801
Commercial 6,071 6,383 6,350 6,148 4,747
Equipment financing 2,756 3,251 4,633 4,115 4,116
Condominium association 1 3
Total commercial loans and leases 8,827 9,634 10,983 10,264 8,866
Indirect automobile loans 474 325 378 259 195
Residential mortgage 2,636 2,384 3,138 2,875 2,738
Home equity 1,865 1,771 1,799 1,987 1,801
Other consumer 47 36 28 18 18
Total consumer loans 4,548 4,191 4,965 4,880 4,557
Total nonaccrual loans and leases 17,322 17,161 18,140 16,501 15,419
Other real estate owned 1,536 675 855 577 726
Other repossessed assets 927 571 435 1,001 593
Total nonperforming assets $ 19,785 $ 18,407 $ 19,430 $ 18,079 $ 16,738
Loans and leases past due greater than 90 days and still accruing $ 3,919 $ 6,653 $ 7,774 $ 10,913 $ 13,548
Troubled debt restructurings on accrual 15,174 12,396 11,532 12,759 12,158
Troubled debt restructurings on nonaccrual 5,609 5,992 6,764 5,589 5,905
Total troubled debt restructurings $ 20,783 $ 18,388 $ 18,296 $ 18,348 $ 18,063
Nonperforming loans and leases as a percentage of total loans and leases 0.37 % 0.37 % 0.41 % 0.38 % 0.36 %
Nonperforming assets as a percentage of total assets 0.35 % 0.33 % 0.36 % 0.34 % 0.32 %
PROVISION AND ALLOWANCE FOR LOAN AND LEASE LOSSES:
Allowance for loan and lease losses at beginning of period $ 51,686 $ 50,224 $ 48,473 $ 46,390 $ 44,281
Charge-offs (1,136 ) (1,196 ) (1,050 ) (2,193 ) (903 )
Recoveries 343 476 384 517 282
Net charge-offs (793 ) (720 ) (666 ) (1,676 ) (621 )
Provision for loan and lease losses 1,929 2,182 2,417 3,759 2,730
Allowance for loan and lease losses at end of period $ 52,822 $ 51,686 $ 50,224 $ 48,473 $ 46,390
Allowance for loan and lease losses as a percentage of total loans and leases 1.12 % 1.12 % 1.13 % 1.11 % 1.08 %
Allowance for loan and lease losses related to originated loans and leases as a percentage of originated loans and leases 1.26 % 1.31 % 1.33 % 1.32 % 1.31 %
NET CHARGE-OFFS:
Commercial real estate loans $ 64 $ $ $ (9 ) $ 7
Commercial loans and leases 348 578 300 803 157
Indirect automobile loans 208 55 185 419 396
Consumer loans 173 87 181 463 61
Total net charge-offs $ 793 $ 720 $ 666 $ 1,676 $ 621
Net loan and lease charge-offs as a percentage of average loans and leases (annualized) 0.07 % 0.06 % 0.06 % 0.16 % 0.06 %
BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Average Yields / Costs (Unaudited)
Three Months Ended
September 30, 2014 June 30, 2014 September 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) $ 523,853 $ 2,312 1.77 % $ 527,411 $ 2,360 1.79 % $ 475,506 $ 2,047 1.72 %
Marketable and restricted equity securities (2) 74,035 567 3.05 % 68,543 602 3.52 % 66,995 346 2.06 %
Short-term investments 42,421 15 0.14 % 36,850 14 0.16 % 69,272 22 0.13 %
Total investments 640,309 2,894 1.81 % 632,804 2,976 1.88 % 611,773 2,415 1.58 %
Loans and Leases:
Commercial real estate loans (3) 2,357,921 25,984 4.37 % 2,288,018 25,395 4.42 % 2,088,450 24,021 4.56 %
Commercial loans (3) 544,440 5,458 3.94 % 504,572 5,246 4.12 % 442,052 4,493 3.99 %
Equipment financing (3) 563,918 9,664 6.84 % 541,029 9,155 6.77 % 489,127 8,343 6.79 %
Indirect automobile loans (3) 371,123 2,929 3.13 % 374,489 3,032 3.25 % 460,927 4,172 3.59 %
Residential mortgage loans (3) 570,505 5,087 3.54 % 532,310 4,918 3.70 % 507,616 4,866 3.81 %
Other consumer loans (3) 284,206 2,818 3.93 % 277,802 2,833 4.09 % 262,442 2,762 4.17 %
Total loans and leases 4,692,113 51,940 4.39 % 4,518,220 50,579 4.46 % 4,250,614 48,657 4.54 %
Total interest-earning assets 5,332,422 54,834 4.08 % 5,151,024 53,555 4.15 % 4,862,387 51,072 4.16 %
Allowance for loan and lease losses (52,423 ) (50,809 ) (44,959 )
Non-interest-earning assets 373,893 373,235 382,155
Total assets $ 5,653,892 $ 5,473,450 $ 5,199,583
Liabilities and Stockholders’ Equity:
Interest-bearing liabilities:
Deposits:
NOW accounts $ 211,940 $ 43 0.08 % $ 208,859 $ 42 0.08 % $ 198,643 $ 42 0.08 %
Savings accounts 513,912 299 0.23 % 523,773 303 0.23 % 512,205 315 0.24 %
Money market accounts 1,534,552 1,957 0.51 % 1,528,959 1,936 0.51 % 1,377,495 2,040 0.59 %
Certificates of deposit 900,751 1,949 0.86 % 901,272 1,920 0.85 % 957,494 2,240 0.93 %
Total interest-bearing deposits 3,161,155 4,248 0.53 % 3,162,863 4,201 0.53 % 3,045,837 4,637 0.60 %
Borrowings
Advances from the FHLBB 1,036,190 2,740 1.05 % 892,770 2,602 1.17 % 772,067 2,666 1.37 %
Subordinated debentures and notes 21,257 292 5.45 % 9,189 99 4.32 % 9,130 82 3.60 %
Other borrowed funds 25,385 12 0.18 % 25,938 10 0.16 % 35,196 26 0.28 %
Total borrowings 1,082,832 3,044 1.12 % 927,897 2,711 1.17 % 816,393 2,774 1.35 %
Total interest-bearing liabilities 4,243,987 7,292 0.68 % 4,090,760 6,912 0.68 % 3,862,230 7,411 0.76 %
Non-interest-bearing liabilities:
Demand checking accounts 725,110 712,961 675,907
Other non-interest-bearing liabilities 48,236 39,219 44,832
Total liabilities 5,017,333 4,842,940 4,582,969
Brookline Bancorp, Inc. stockholders’ equity 632,506 626,371 612,866
Noncontrolling interest in subsidiary 4,053 4,139 3,748
Total liabilities and equity $ 5,653,892 $ 5,473,450 $ 5,199,583
Net interest income (tax-equivalent basis) /Interest-rate spread (4) 47,542 3.40 % 46,643 3.47 % 43,661 3.40 %
Less adjustment of tax-exempt income 218 209 249
Net interest income $ 47,324 $ 46,434 $ 43,412
Net interest margin (5) 3.54 % 3.61 % 3.56 %
(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)
Nine Months Ended
September 30, 2014 September 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) $ 518,031 $ 6,935 1.79 % $ 478,110 $ 5,841 1.63 %
Marketable and restricted equity securities (2) 69,869 1,666 3.18 % 67,506 1,056 2.09 %
Short-term investments 41,689 73 0.24 % 58,872 72 0.16 %
Total investments 629,589 8,674 1.84 % 604,488 6,969 1.54 %
Loans and Leases:
Commercial real estate loans (3) 2,291,952 77,081 4.46 % 2,041,834 72,190 4.69 %
Commercial loans (3) 507,612 15,397 4.01 % 424,904 15,796 4.91 %
Equipment financing (3) 543,691 29,856 7.33 % 465,217 24,418 7.01 %
Indirect automobile loans (3) 376,765 9,225 3.27 % 493,898 13,611 3.68 %
Residential mortgage loans (3) 545,275 14,814 3.63 % 509,728 15,132 3.97 %
Other consumer loans (3) 276,466 8,230 3.98 % 263,762 7,886 4.00 %
Total loans and leases 4,541,761 154,603 4.53 % 4,199,343 149,033 4.72 %
Total interest-earning assets 5,171,350 163,277 4.20 % 4,803,831 156,002 4.32 %
Allowance for loan and lease losses (50,785 ) (43,146 )
Non-interest-earning assets 366,994 375,074
Total assets $ 5,487,559 $ 5,135,759
Liabilities and Stockholders’ Equity:
Interest-bearing liabilities:
Deposits:
NOW accounts $ 209,029 $ 126 0.08 % $ 194,775 $ 128 0.09 %
Savings accounts 515,433 905 0.23 % 511,672 975 0.25 %
Money market accounts 1,523,269 5,852 0.51 % 1,336,093 6,136 0.61 %
Certificates of deposit 909,647 5,857 0.86 % 980,628 6,975 0.95 %
Total interest-bearing deposits 3,157,378 12,740 0.54 % 3,023,168 14,214 0.63 %
Borrowings
Advances from the FHLBB 911,748 7,873 1.15 % 761,927 8,303 1.46 %
Subordinated debentures and notes 13,249 490 4.94 % 9,682 337 4.64 %
Other borrowed funds 26,849 61 0.30 % 41,259 37 0.12 %
Total borrowings 951,846 8,424 1.18 % 812,868 8,677 1.43 %
Total interest-bearing liabilities 4,109,224 21,164 0.69 % 3,836,036 22,891 0.80 %
Non-interest-bearing liabilities:
Demand checking accounts 702,411 641,749
Other non-interest-bearing liabilities 44,858 38,811
Total liabilities 4,856,493 4,516,596
Brookline Bancorp, Inc. stockholders’ equity 626,920 615,519
Noncontrolling interest in subsidiary 4,146 3,644
Total liabilities and equity $ 5,487,559 $ 5,135,759
Net interest income (tax-equivalent basis) /Interest-rate spread (4) 142,113 3.51 % 133,111 3.52 %
Less adjustment of tax-exempt income 621 667
Net interest income $ 141,492 $ 132,444
Net interest margin (5) 3.65 % 3.68 %
(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)
At and for the Three Months Ended

September 30,
2014

June 30,
2014

March 31,
2014

December 31,
2013

September 30,
2013

(Dollars in Thousands)
Net income, as reported $ 11,581 $ 9,976 $ 10,422 $ 7,654 $ 9,429
Average total assets $ 5,653,892 $ 5,473,450 $ 5,361,717 $ 5,287,482 $ 5,199,583
Less: Average goodwill and average identified intangible assets, net 152,755 153,577 154,447 155,439 156,607
Average tangible assets $ 5,501,137 $ 5,319,873 $ 5,207,270 $ 5,132,043 $ 5,042,976
Return on average tangible assets (annualized) 0.84 % 0.75 % 0.80 % 0.60 % 0.75 %
Average total stockholders’ equity $ 632,506 $ 626,371 $ 621,764 $ 618,385 $ 612,866
Less: Average goodwill and average identified intangible assets, net 152,755 153,577 154,447 155,439 156,607
Average tangible stockholders’ equity $ 479,751 $ 472,794 $ 467,317 $ 462,946 $ 456,259
Return on average tangible stockholders’ equity (annualized) 9.66 % 8.44 % 8.92 % 6.61 % 8.27 %
Brookline Bancorp, Inc. stockholders’ equity $ 632,400 $ 627,663 $ 620,799 $ 613,867 $ 614,811
Less:
Goodwill 137,890 137,890 137,890 137,890 137,890
Identified intangible assets, net 14,371 15,199 16,026 16,887 18,015
Tangible stockholders’ equity $ 480,139 $ 474,574 $ 466,883 $ 459,090 $ 458,906
Total assets $ 5,717,965 $ 5,587,486 $ 5,418,785 $ 5,325,106 $ 5,236,229
Less:
Goodwill 137,890 137,890 137,890 137,890 137,890
Identified intangible assets, net 14,371 15,199 16,026 16,887 18,015
Tangible assets $ 5,565,704 $ 5,434,397 $ 5,264,869 $ 5,170,329 $ 5,080,324
Tangible stockholders’ equity to tangible assets 8.63 % 8.73 % 8.87 % 8.88 % 9.03 %
Tangible stockholders’ equity $ 480,139 $ 474,574 $ 466,883 $ 459,090 $ 458,906
Number of common shares issued 75,744,445 75,744,445 75,744,445 75,744,445 75,744,445
Less:
Treasury shares 5,035,956 5,144,807 5,171,985 5,171,985 5,154,327
Unallocated ESOP shares 261,453 271,524 281,595 291,666 302,229
Unvested restricted shares 427,952 434,459 408,651 409,068 429,818
Number of common shares outstanding 70,019,084 69,893,655 69,882,214 69,871,726 69,858,071
Tangible book value per common share $ 6.86 $ 6.79 $ 6.68 $ 6.57 $ 6.57
Allowance for loan and lease losses $ 52,822 $ 51,686 $ 50,224 $ 48,473 $ 46,390
Less:
Allowance for acquired loans and leases losses 1,933 1,247 1,403 1,629 1,278
Allowance for originated loan and lease losses $ 50,889 $ 50,439 $ 48,821 $ 46,844 $ 45,112
Total loans and leases $ 4,736,028 $ 4,603,913 $ 4,461,997 $ 4,362,465 $ 4,299,477
Less:
Total acquired loans and leases 709,404 747,106 779,747 815,412 865,708
Total originated loans and leases $ 4,026,624 $ 3,856,807 $ 3,682,250 $ 3,547,053 $ 3,433,769
Allowance for loan and lease losses related to originated loans and leases as a percentage of originated loans and leases 1.26 % 1.31 % 1.33 % 1.32 % 1.31 %

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