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CST: 20/05/2019 12:19:45   

Brookline Bancorp Announces Fourth Quarter Results

109 Days ago

Net Income of $21.1 million, EPS of $0.26

Record 2018 Net Income of $83.1 million, EPS of $1.04

BOSTON, Jan. 30, 2019 (GLOBE NEWSWIRE) -- Brookline Bancorp, Inc. (NASDAQ: BRKL) (the “Company”) today announced net income of $21.1 million, or $0.26 per basic and diluted share, for the fourth quarter of 2018, compared to $22.5 million, or $0.28 per basic and diluted share, for the third quarter of 2018, and $6.8 million, or $0.09 per basic and diluted share, for the fourth quarter of 2017.

For the year ended December 31, 2018, the Company reported net income of $83.1 million, or $1.04 per basic and diluted share. This compared to $50.5 million, or $0.68 per basic and diluted share, for the year ended December 31, 2017.

Operating Earnings (Non-GAAP)

Operating earnings were $22.1 million, or $0.27 per diluted share, for the fourth quarter of 2018, compared to $15.9 million, or $0.21 per diluted share, for the fourth quarter of 2017. For the year ended December 31, 2018, operating earnings were $85.8 million or $1.07 per diluted share, compared to $52.4 million or $0.70 per diluted share in 2017.

Operating earnings exclude the impact of securities gains or losses, merger and acquisition related expenses and the 2017 impact of the Tax Reform Act. Details are provided in the Reconciliation Table - Non-GAAP Financial Information.

Paul Perrault, President and Chief Executive Officer of the Company, commented on the fourth quarter earnings, “2018 was a successful year for Brookline Bancorp. We completed the acquisition of First Commons Bank in March, and finished the year with record earnings, strong asset quality and capital, and good momentum going into the new year. I want to thank all our employees for their hard work and dedication in providing our customers with superior service throughout the year. With all our accomplishments in 2018, we are positioned to achieve continued success and growth in 2019."

On December 5, 2018, the Board of Directors (the “Board”) of the Company approved a stock repurchase program authorizing management to repurchase up to $10.0 million of the Company’s common stock. As of December 31, 2018, the Company had completed the program and repurchased 725,583 shares at a weighted average price of $13.78.

On January 30, 2019, the Board approved a stock repurchase program authorizing management to repurchase up to $10.0 million of the Company's common stock over a period of eleven months ending December 31, 2019.

Eastern Funding, LLC Acquisition

As of December 31, 2018, Brookline Bank, a wholly-owned subsidiary of the Company, held an 84.07 percent ownership interest in its subsidiary, Eastern Funding, LLC (“Eastern Funding”). As previously announced, on January 4, 2019, Brookline Bank completed the purchase of the remaining 15.93 percent interest in Eastern Funding for a total cash consideration of $35.9 million.

BALANCE SHEET

Total assets at December 31, 2018 increased $72.2 million to $7.39 billion from $7.32 billion at September 30, 2018, and increased $612.6 million from $6.78 billion at December 31, 2017. At December 31, 2018, total loans and leases were $6.30 billion, representing an increase of $75.8 million from September 30, 2018, and an increase of $572.8 million from December 31, 2017.

Investment securities at December 31, 2018 decreased $32.9 million to $621.8 million, comprising 8.41 percent of total assets, as compared to $654.6 million, or 8.94 percent of total assets, at September 30, 2018, and decreased $28.1 million from $649.9 million, or 9.58 percent of total assets, at December 31, 2017.

Total deposits at December 31, 2018 increased $220.4 million to $5.45 billion from $5.23 billion at September 30, 2018 and increased $582.7 million from $4.87 billion at December 31, 2017.

Total borrowed funds at December 31, 2018 decreased $162.3 million to $920.5 million from $1.08 billion at September 30, 2018 and decreased $100.3 million from $1.02 billion at December 31, 2017.

The ratio of stockholders’ equity to total assets was 12.18 percent at December 31, 2018, as compared to 12.16 percent at September 30, 2018, and 11.86 percent at December 31, 2017. The ratio of tangible stockholders’ equity to tangible assets was 10.15 percent at December 31, 2018, as compared to 10.11 percent at September 30, 2018, and 9.94 percent at December 31, 2017. Tangible book value per share increased $0.21 from $9.00 at September 30, 2018 to $9.21 at December 31, 2018, compared to $8.61 at December 31, 2017.

NET INTEREST INCOME

Net interest income increased $0.9 million to $63.2 million during the fourth quarter of 2018 from $62.3 million for the quarter ended September 30, 2018, driven by loan growth during the fourth quarter. The net interest margin increased 1 basis point to 3.58 percent for the three months ended December 31, 2018 from 3.57 percent for the three months ended September 30, 2018.

NON-INTEREST INCOME

Non-interest income for the quarter ended December 31, 2018 decreased $0.6 million to $6.5 million from $7.1 million for the quarter ended September 30, 2018. The decrease was primarily driven by quarter over quarter declines of $0.4 million in loan level derivative income, $0.2 million in revenue on sales of loans and leases, and an increase in the loss on investment securities of $0.4 million; partially offset by an increase of $0.4 million in other non-interest income.

PROVISION FOR CREDIT LOSSES

The Company recorded a provision for credit losses of $0.1 million for the quarter ended December 31, 2018, compared to $2.7 million for the quarter ended September 30, 2018. The decrease in the provision for the quarter was primarily driven by a reduction in loss factors and risk rating migration, as well as charge-offs on relationships with specific reserves.

At the end of the quarter, the carrying value of taxi medallion loans was $13.7 million with reserves of $2.5 million. For collateral valuation purposes, individual taxi medallions are currently estimated at $35,000 for Boston and $20,000 for Cambridge. The Company has no taxi medallion exposure outside Massachusetts.

Total net loan and lease charge-offs for the fourth quarter of 2018 were $1.3 million compared to $0.6 million in the third quarter of 2018. The ratio of net loan and lease charge-offs to average loans and leases on an annualized basis increased to 8 basis points for the fourth quarter of 2018 from 4 basis points for the third quarter of 2018. Net loan and lease charge-offs in the fourth quarter of 2018 consisted of $0.3 million of taxi medallion loans as compared to $0.1 million of taxi medallion loans in the third quarter of 2018. Net loan and lease charge-offs as a percent of average total loans was 8 basis points in 2018, as compared to 25 basis points in 2017.

The allowance for loan and lease losses represented 0.93 percent of total loans and leases at December 31, 2018, compared to 0.96 percent at September 30, 2018, and 1.02 percent at December 31, 2017. The allowance for loan and lease losses related to originated loans and leases represented 0.96 percent of originated loans and leases at December 31, 2018, compared to 1.00 percent at September 30, 2018, and 1.05 percent at December 31, 2017.

NON-INTEREST EXPENSE

Non-interest expense for the quarter ended December 31, 2018 increased $3.0 million to $40.3 million from $37.3 million for the quarter ended September 30, 2018. The increase was primarily driven by increases of $2.1 million in compensation and employee benefits, $0.5 million in merger and acquisition expense, and $1.4 million in other non-interest expense, partially offset by decreases of $0.7 million in occupancy expense and $0.3 million in advertising and marketing expense.

PROVISION FOR INCOME TAXES

The effective tax rate was 24.1 percent and 23.2 percent for the three and twelve months ended December 31, 2018, respectively.

RETURNS ON AVERAGE ASSETS AND AVERAGE EQUITY

The annualized return on average assets decreased to 1.15 percent during the fourth quarter of 2018 compared to 1.23 percent for the third quarter of 2018; and was 1.15 percent for the year ended December 31, 2018, compared to 0.76 percent for the year ended December 31, 2017.

The annualized return on average tangible stockholders' equity decreased to 11.54 percent during the fourth quarter of 2018 compared to 12.44 percent for the third quarter of 2018; and was 11.70 percent for the year ended December 31, 2018 compared to 8.04 percent for the year ended December 31, 2017.

ASSET QUALITY

The ratio of total nonaccrual loans and leases to total loans and leases was 0.38 percent at December 31, 2018 as compared to 0.41 percent at September 30, 2018. Total nonaccrual loans and leases decreased $1.7 million to $24.1 million at December 31, 2018 from $25.8 million at September 30, 2018. The ratio of nonperforming assets to total assets was 0.38 percent at December 31, 2018 as compared to 0.41 percent at September 30, 2018. Nonperforming assets decreased $1.6 million to $28.1 million at December 31, 2018 from $29.7 million at September 30, 2018. The decrease was primarily driven by the pay offs of nonperforming loans and leases and the charge-offs of taxi medallion loans in the fourth quarter.

DIVIDEND DECLARED

The Company’s Board approved a dividend of $0.105 per share for the quarter ended December 31, 2018. The dividend will be paid on February 25, 2019 to stockholders of record on February 11, 2019.

CONFERENCE CALL

The Company will conduct a conference call/webcast at 1:30 PM Eastern Standard Time on Thursday, January 31, 2019 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 10127371. 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 $7.4 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 "banks"). The Company provides commercial and retail banking services, cash management and investment services to customers throughout Central New England. More information about Brookline Bancorp, Inc. and its banks can be found at the following websites: www.brooklinebank.com, 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 operating earnings, operating return on average assets, operating return on average tangible assets, operating return on average stockholders' equity, operating return on average tangible stockholders' equity, 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, 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.

Contact:
Carl M. Carlson
Brookline Bancorp, Inc.
Chief Financial Officer
(617) 425-5331
ccarlson@brkl.com

 
BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Selected Financial Highlights (Unaudited)
 
  At and for the Three Months Ended   At and for the Twelve
Months Ended
  December 31, 2018   September 30, 2018   June 30, 2018   March 31, 2018   December 31, 2017   December 31, 2018   December 31, 2017
   
  (Dollars In Thousands Except per Share Data)
Earnings Data:                          
Net interest income $ 63,159     $ 62,332     $ 62,717     $ 59,491     $ 57,657     $ 247,699     $ 223,181  
Provision for credit losses   123       2,717       1,470       641       1,802       4,951       18,988  
Non-interest income   6,461       7,069       5,526       6,168       5,815       25,224       32,173  
Non-interest expense   40,282       37,310       37,702       39,938       35,152       155,232       139,111  
                                                       
Income before provision for income taxes   29,215       29,374       29,071       25,080       26,518       112,740       97,255  
Net income attributable to Brookline Bancorp, Inc.   21,138       22,460       20,831       18,633       6,827       83,062       50,518  
                           
Performance Ratios:                          
Net interest margin (1)   3.58 %     3.57 %     3.64 %     3.66 %     3.59 %     3.61 %     3.57 %
Interest-rate spread (1)   3.25 %     3.27 %     3.36 %     3.38 %     3.42 %     3.32 %     3.38 %
                                                       
Return on average assets (annualized)   1.15 %     1.23 %     1.15 %     1.08 %     0.41 %     1.15 %     0.76 %
Return on average tangible assets (annualized) (non-GAAP)   1.17 %     1.26 %     1.17 %     1.10 %     0.41 %     1.18 %     0.78 %
Return on average stockholders' equity (annualized)   9.40 %     10.10 %     9.53 %     8.98 %     3.37 %     9.51 %     6.53 %
                                                       
Return on average tangible stockholders' equity (annualized) (non-GAAP)   11.54 %     12.44 %     11.80 %     11.01 %     4.09 %     11.70 %     8.04 %
Efficiency ratio (2)   57.86 %     53.76 %     55.25 %     60.83 %     55.38 %     56.88 %     54.48 %
                           
Per Common Share Data:                          
Net income — Basic $ 0.26     $ 0.28     $ 0.26     $ 0.24     $ 0.09     $ 1.04     $ 0.68  
Net income — Diluted   0.26       0.28       0.26       0.24       0.09       1.04       0.68  
Cash dividends declared   0.105       0.100       0.100       0.090       0.090       0.395       0.360  
                                                       
Book value per share (end of period)   11.30       11.08       10.94       10.80       10.49       11.30       10.49  
Tangible book value per share (end of period) (non-GAAP)   9.21       9.00       8.85       8.69       8.61       9.21       8.61  
Stock price (end of period)   13.82       16.70       18.60       16.20       15.70       13.82       15.70  
 
Balance Sheet:                          
Total assets $ 7,392,805     $ 7,320,596     $ 7,285,710     $ 7,248,114     $ 6,780,249     $ 7,392,805     $ 6,780,249  
Total loans and leases   6,303,516       6,227,707       6,171,274       6,114,461       5,730,679       6,303,516       5,730,679  
Total deposits   5,454,044       5,233,611       5,198,280       5,191,520       4,871,343       5,454,044       4,871,343  
Brookline Bancorp, Inc. stockholders’ equity   900,140       890,368       877,283       865,777       803,830       900,140       803,830  
                           
Asset Quality:                          
Nonperforming assets $ 28,116     $ 29,718     $ 30,145     $ 30,242     $ 31,691     $ 28,116     $ 31,691  
Nonperforming assets as a percentage of total assets   0.38 %     0.41 %     0.41 %     0.42 %     0.47 %     0.38 %     0.47 %
                                                       
Allowance for loan and lease losses $ 58,692     $ 59,997     $ 57,981     $ 58,714     $ 58,592     $ 58,692     $ 58,592  
                                                       
Allowance for loan and lease losses as a percentage of total loans and leases   0.93 %     0.96 %     0.94 %     0.96 %     1.02 %     0.93 %     1.02 %
Net loan and lease charge-offs $ 1,252     $ 564     $ 2,330     $ 505     $ 8,507     $ 4,651     $ 13,858  
Net loan and lease charge-offs as a percentage of average loans and leases (annualized)   0.08 %     0.04 %     0.15 %     0.03 %     0.60 %     0.08 %     0.25 %
                           
Capital Ratios:                          
Stockholders’ equity to total assets   12.18 %     12.16 %     12.04 %     11.94 %     11.86 %     12.18 %     11.86 %
Tangible stockholders’ equity to tangible assets (non-GAAP)   10.15 %     10.11 %     9.97 %     9.85 %     9.94 %     10.15 %     9.94 %
                           
(1) Calculated on a fully tax-equivalent basis.                          
(2) Calculated as non-interest expense as a percentage of net interest income plus non-interest income. 
 

 

BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Consolidated Balance Sheets (Unaudited)
  December 31,
2018
  September 30,
2018
  June 30, 2018   March 31, 2018   December 31,
2017
   
   
ASSETS (In Thousands Except Share Data)
Cash and due from banks $ 47,542     $ 30,762     $ 32,724     $ 34,713     $ 25,622  
Short-term investments   42,042       23,114       22,754       49,743       35,383  
Total cash and cash equivalents   89,584       53,876       55,478       84,456       61,005  
Investment securities available-for-sale   502,793       534,788       558,602       558,357       540,124  
Investment securities held-to-maturity   114,776       115,684       116,670       117,352       109,730  
Investment securities trading   4,207       4,169                    
Total investment securities   621,776       654,641       675,272       675,709       649,854  
Loans and leases held-for-sale   3,247       937       1,034       756       2,628  
Loans and leases:                  
Commercial real estate loans:                  
Commercial real estate mortgage   2,330,725       2,287,979       2,269,520       2,284,488       2,174,969  
Multi-family mortgage   847,711       828,849       816,311       793,006       760,670  
Construction   173,300       164,217       178,335       169,440       140,138  
Total commercial real estate loans   3,351,736       3,281,045       3,264,166       3,246,934       3,075,777  
Commercial loans and leases:                  
Commercial   736,418       771,200       761,964       761,540       705,004  
Equipment financing   982,089       954,579       920,643       892,341       866,488  
Condominium association   50,451       52,205       53,537       52,739       52,619  
Total commercial loans and leases   1,768,958       1,777,984       1,736,144       1,706,620       1,624,111  
Consumer loans:                  
Residential mortgage   782,968       759,167       754,818       766,687       660,065  
Home equity   376,484       380,303       382,597       364,928       355,954  
Other consumer   23,370       29,208       33,549       29,292       14,772  
Total consumer loans   1,182,822       1,168,678       1,170,964       1,160,907       1,030,791  
Total loans and leases   6,303,516       6,227,707       6,171,274       6,114,461       5,730,679  
Allowance for loan and lease losses   (58,692 )     (59,997 )     (57,981 )     (58,714 )     (58,592 )
Net loans and leases   6,244,824       6,167,710       6,113,293       6,055,747       5,672,087  
Restricted equity securities   61,751       63,963       68,343       66,164       59,369  
Premises and equipment, net of accumulated depreciation   76,382       77,886       79,194       80,268       80,283  
Deferred tax asset ("DTA")   21,495       22,249       20,826       19,198       15,061  
Goodwill   160,427       160,427       160,427       160,896       137,890  
Identified intangible assets, net of accumulated amortization   6,086       6,623       7,160       7,697       6,044  
Other real estate owned and repossessed assets   4,019       3,934       4,352       3,963       4,419  
Other assets   103,214       108,350       100,331       93,260       91,609  
Total assets $ 7,392,805     $ 7,320,596     $ 7,285,710     $ 7,248,114     $ 6,780,249  
LIABILITIES AND STOCKHOLDERS' EQUITY                  
Deposits:                  
Non-interest-bearing deposits:                  
Demand checking accounts $ 1,033,551     $ 1,017,234     $ 1,002,954     $ 987,153     $ 942,583  
Interest-bearing deposits:                  
NOW accounts   336,317       322,587       346,936       342,374       350,568  
Savings accounts   619,961       612,210       603,079       637,920       646,359  
Money market accounts   1,675,050       1,623,220       1,704,652       1,862,351       1,724,363  
Certificate of deposit accounts   1,789,165       1,658,360       1,540,659       1,361,722       1,207,470  
Total interest-bearing deposits   4,420,493       4,216,377       4,195,326       4,204,367       3,928,760  
Total deposits   5,454,044       5,233,611       5,198,280       5,191,520       4,871,343  
Borrowed funds:                  
Advances from the FHLBB   784,375       959,446       991,091       982,533       889,909  
Subordinated debentures and notes   83,433       83,392       83,352       83,311       83,271  
Other borrowed funds   52,734       40,048       36,480       33,585       47,639  
Total borrowed funds   920,542       1,082,886       1,110,923       1,099,429       1,020,819  
Mortgagors’ escrow accounts   7,426       8,227       8,122       8,395       7,686  
Accrued expenses and other liabilities   100,174       96,047       82,017       74,024       67,818  
Total liabilities   6,482,186       6,420,771       6,399,342       6,373,368       5,967,666  
Stockholders' equity:                  
Brookline Bancorp, Inc. stockholders’ equity                  
Common stock, $0.01 par value; 200,000,000 shares authorized; 85,177,172 shares issued, 85,177,172 shares issued, 85,177,172 shares issued, 85,177,172 shares issued, and 81,695,695 shares issued, respectively   852       852       852       852       817  
Additional paid-in capital   755,629       753,941       756,254       755,843       699,976  
Retained earnings, partially restricted   212,838       200,151       185,734       172,934       161,217  
Accumulated other comprehensive (loss) income   (9,460 )     (15,599 )     (13,415 )     (11,666 )     (5,950 )
Treasury stock, at cost;                  
  5,020,025 shares, 4,291,317 shares, 4,409,501 shares, 4,401,333 shares, and 4,440,665 shares, respectively   (59,120 )     (48,334 )     (51,454 )     (51,454 )     (51,454 )
Unallocated common stock held by the Employee Stock Ownership Plan;                  
  109,950 shares, 118,050 shares, 126,144 shares, 134,238 shares, and 142,332 shares, respectively   (599 )     (643 )     (688 )     (732 )     (776 )
Total Brookline Bancorp, Inc. stockholders’ equity   900,140       890,368       877,283       865,777       803,830  
Noncontrolling interest in subsidiary   10,479       9,457       9,085       8,969       8,753  
Total stockholders' equity   910,619       899,825       886,368       874,746       812,583  
Total liabilities and stockholders' equity $ 7,392,805     $ 7,320,596     $ 7,285,710     $ 7,248,114     $ 6,780,249  
                   

 

 
BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Consolidated Statements of Income (Unaudited)
  Three Months Ended
  December 31, 2018   September 30, 2018   June 30, 2018   March 31, 2018   December 31, 2017
   
  (In Thousands Except Share Data)
Interest and dividend income:                  
Loans and leases $ 78,791     $ 75,877     $ 73,329   $ 67,272   $ 64,272
Debt securities   3,489       3,585       3,563     3,323     3,214
Marketable and restricted equity securities   1,008       1,029       1,003     924     751
Short-term investments   256       145       179     120     100
Total interest and dividend income   83,544       80,636       78,074     71,639     68,337
Interest expense:                  
Deposits   13,744       11,916       9,219     7,099     6,681
Borrowed funds   6,641       6,388       6,138     5,049     3,999
Total interest expense   20,385       18,304       15,357     12,148     10,680
Net interest income   63,159       62,332       62,717     59,491     57,657
Provision for credit losses   123       2,717       1,470     641     1,802
Net interest income after provision for credit losses   63,036       59,615       61,247     58,850     55,855
Non-interest income:                  
Deposit fees   2,669       2,648       2,620     2,463     2,542
Loan fees   390       417       330     290     338
Loan level derivative income, net   1,811       2,192       571     866     755
(Loss) gain on investment securities, net   (692 )     (243 )         1,162    
Gain on sales of loans and leases held-for-sale   327       535       722     299     935
Other   1,956       1,520       1,283     1,088     1,245
Total non-interest income   6,461       7,069       5,526     6,168     5,815
Non-interest expense:                  
Compensation and employee benefits   24,413       22,338       22,565     22,314     20,652
Occupancy   3,240       3,913       3,879     3,959     3,594
Equipment and data processing   4,626       4,601       4,368     4,618     4,417
Professional services   1,130       1,075       1,055     1,144     1,200
FDIC insurance   727       846       514     635     678
Advertising and marketing   773       1,068       1,118     1,057     856
Amortization of identified intangible assets   537       537       539     467     519
Merger and acquisition expense   526       22       334     2,905     206
Other   4,310       2,910       3,330     2,839     3,030
Total non-interest expense   40,282       37,310       37,702     39,938     35,152
Income before provision for income taxes   29,215       29,374       29,071     25,080     26,518
Provision for income taxes - operating   7,055       6,140       7,342     5,652     9,747
Impact of revaluation of DTA                       8,965
Total provision for income taxes   7,055       6,140       7,342     5,652     18,712
Net income before noncontrolling interest in subsidiary   22,160       23,234       21,729     19,428     7,806
Less net income attributable to noncontrolling interest in subsidiary   1,022       774       898     795     979
Net income attributable to Brookline Bancorp, Inc. $ 21,138     $ 22,460     $ 20,831   $ 18,633   $ 6,827
Earnings per common share:                  
Basic $ 0.26     $ 0.28     $ 0.26   $ 0.24   $ 0.09
Diluted $ 0.26     $ 0.28     $ 0.26   $ 0.24   $ 0.09
Weighted average common shares outstanding during the period:                
Basic   80,258,456       80,315,050       80,184,977     77,879,593     76,583,712
Diluted   80,407,525       80,515,467       80,505,614     78,167,800     76,868,307
Dividends declared per common share $ 0.105     $ 0.100     $ 0.100   $ 0.090   $ 0.090
                   

 

 
BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Consolidated Statements of Income (Unaudited)
   
  Twelve Months Ended December 31,
    2018     2017
   
  (In Thousands Except Share Data)
Interest and dividend income:      
Loans and leases $ 295,269   $ 247,022
Debt securities   13,960     12,524
Marketable and restricted equity securities   3,964     3,062
Short-term investments   700     442
Total interest and dividend income   313,893     263,050
Interest expense:      
Deposits   41,978     23,288
Borrowed funds   24,216     16,581
Total interest expense   66,194     39,869
Net interest income   247,699     223,181
Provision for credit losses   4,951     18,988
Net interest income after provision for credit losses   242,748     204,193
Non-interest income:      
Deposit Fees   10,400     10,050
Loan Fees   1,427     1,110
Loan level derivative income, net   5,440     2,187
Gain on investment securities, net   227     11,393
Gain on sales of loans and leases held-for-sale   1,883     2,644
Other   5,847     4,789
Total non-interest income   25,224     32,173
Non-interest expense:      
Compensation and employee benefits   91,535     82,413
Occupancy   14,991     14,546
Equipment and data processing   18,213     16,854
Professional services   4,404     4,315
FDIC insurance   2,722     3,326
Advertising and marketing   4,016     3,369
Amortization of identified intangible assets   2,080     2,089
Merger and acquisition expense   3,787     411
Other   13,484     11,788
Total non-interest expense   155,232     139,111
Income before provision for income taxes   112,740     97,255
Provision for income taxes - operating   26,189     34,671
Impact of revaluation of DTA       8,965
Total provision for income taxes   26,189     43,636
Net income before noncontrolling interest in subsidiary   86,551     53,619
Less net income attributable to noncontrolling interest in subsidiary   3,489     3,101
Net income attributable to Brookline Bancorp, Inc. $ 83,062   $ 50,518
Earnings per common share:      
Basic $ 1.04   $ 0.68
Diluted $ 1.04   $ 0.68
Weighted average common shares outstanding during the period:    
Basic   79,669,660     74,459,508
Diluted   79,909,243     74,811,408
Dividends declared per common share $ 0.395   $ 0.360
       

 

 
BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Asset Quality Analysis (Unaudited)
  At and for the Three Months Ended
  December 31, 2018   September 30, 2018   June 30, 2018   March 31, 2018   December 31, 2017
   
   
  (Dollars in Thousands)
NONPERFORMING ASSETS:                  
Loans and leases accounted for on a nonaccrual basis:                  
Commercial real estate mortgage $ 3,928     $ 3,369     $ 3,774     $ 4,080     $ 3,313  
Multi-family mortgage   330       357       568       588       608  
Construction   396       640       640       860       860  
Total commercial real estate loans   4,654       4,366       4,982       5,528       4,781  
                   
Commercial   6,621       7,862       9,487       11,150       11,619  
Equipment financing   9,500       9,659       8,825       6,661       8,106  
Condominium association   265       295                    
Total commercial loans and leases   16,386       17,816       18,312       17,811       19,725  
                   
Residential mortgage   2,132       2,538       1,571       1,962       1,979  
Home equity   908       1,053       923       925       744  
Other consumer   17       11       5       53       43  
Total consumer loans   3,057       3,602       2,499       2,940       2,766  
                   
Total nonaccrual loans and leases   24,097       25,784       25,793       26,279       27,272  
                   
Other real estate owned   3,054       3,136       3,436       3,235       3,235  
Other repossessed assets   965       798       916       728       1,184  
Total nonperforming assets $ 28,116     $ 29,718     $ 30,145     $ 30,242     $ 31,691  
                   
Loans and leases past due greater than 90 days and still accruing $ 13,482     $ 14,954     $ 12,340     $ 5,240     $ 3,020  
                   
Troubled debt restructurings on accrual   12,257       12,657       12,911       14,294       16,241  
Troubled debt restructurings on nonaccrual   8,684       8,779       9,391       8,610       9,770  
Total troubled debt restructurings $ 20,941     $ 21,436     $ 22,302     $ 22,904     $ 26,011  
                   
Total nonaccrual loans and leases as a percentage of total loans and leases   0.38 %     0.41 %     0.42 %     0.43 %     0.48 %
Nonperforming assets as a percentage of total assets   0.38 %     0.41 %     0.41 %     0.42 %     0.47 %
                   
PROVISION AND ALLOWANCE FOR LOAN AND LEASE LOSSES:            
Allowance for loan and lease losses at beginning of period $ 59,997     $ 57,981     $ 58,714     $ 58,592     $ 65,413  
Charge-offs   (1,604 )     (1,227 )     (3,605 )     (792 )     (8,921 )
Recoveries   352       663       1,275       287       414  
Net charge-offs   (1,252 )     (564 )     (2,330 )     (505 )     (8,507 )
(Credit) provision for loan and lease losses   (53 )     2,580       1,597       627       1,686  
Allowance for loan and lease losses at end of period $ 58,692     $ 59,997     $ 57,981     $ 58,714     $ 58,592  
                   
Allowance for loan and lease losses as a percentage of total loans and leases   0.93 %     0.96 %     0.94 %     0.96 %     1.02 %
Allowance for loan and lease losses related to originated loans and leases as a percentage of originated loans and leases (non-GAAP)   0.96 %     1.00 %     0.98 %     1.03 %     1.05 %
                   
NET CHARGE-OFFS:                  
Commercial real estate loans $     $     $ 100     $ 3     $ 200  
Commercial loans and leases   883       579       2,304       532       8,290  
Consumer loans   369       (15 )     (74 )     (30 )     17  
Total net charge-offs $ 1,252     $ 564     $ 2,330     $ 505     $ 8,507  
                   
Net loan and lease charge-offs as a percentage of average loans and leases (annualized)   0.08 %     0.04 %     0.15 %     0.03 %     0.60 %
                   

 

 
BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Average Yields / Costs (Unaudited)
  Three Months Ended
  December 31, 2018   September 30, 2018   December 31, 2017
  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) $ 637,803     $ 3,542   2.22 %   $ 663,125     $ 3,638   2.20 %   $ 644,958     $ 3,323   2.06 %
Marketable and restricted equity securities (2)   69,374       1,017   5.87 %     67,607       1,029   6.09 %     59,720       759   5.08 %
Short-term investments   50,728       256   2.02 %     31,061       145   1.87 %     34,689       100   1.15 %
Total investments   757,905       4,815   2.54 %     761,793       4,812   2.53 %     739,367       4,182   2.26 %
Loans and Leases:                                  
Commercial real estate loans (3)   3,310,185       39,014   4.61 %     3,260,634       37,332   4.48 %     3,026,124       31,866   4.12 %
Commercial loans (3)   825,582       10,007   4.75 %     819,383       9,862   4.72 %     762,493       8,132   4.18 %
Equipment financing (3)   959,706       17,145   7.15 %     933,007       16,220   6.95 %     846,734       14,292   6.75 %
Residential mortgage loans (3)   763,775       7,840   4.11 %     756,421       7,648   4.04 %     659,226       6,082   3.69 %
Other consumer loans (3)   404,747       4,883   4.78 %     412,248       4,928   4.73 %     373,559       4,141   4.40 %
Total loans and leases   6,263,995       78,889   5.04 %     6,181,693       75,990   4.92 %     5,668,136       64,513   4.55 %
Total interest-earning assets   7,021,900       83,704   4.77 %     6,943,486       80,802   4.65 %     6,407,503       68,695   4.29 %
Allowance for loan and lease losses   (59,806 )             (58,576 )             (65,434 )        
Non-interest-earning assets   420,837               417,503               383,661          
Total assets $ 7,382,931             $ 7,302,413             $ 6,725,730          
                                   
Liabilities and Stockholders' Equity:                                  
Interest-bearing liabilities:                                  
Deposits:                                  
NOW accounts $ 333,592       88   0.10 %   $ 344,760       72   0.08 %   $ 331,724       61   0.07 %
Savings accounts   616,766       526   0.34 %     599,514       472   0.31 %     671,035       381   0.23 %
Money market accounts   1,647,346       4,914   1.18 %     1,668,402       4,367   1.04 %     1,766,045       2,456   0.55 %
Certificates of deposit   1,701,254       8,216   1.92 %     1,612,551       7,005   1.72 %     1,202,656       3,783   1.25 %
Total interest-bearing deposits   4,298,958       13,744   1.27 %     4,225,227       11,916   1.12 %     3,971,460       6,681   0.67 %
Borrowings                                  
Advances from the FHLBB   903,342       5,227   2.26 %     907,306       4,979   2.15 %     798,572       2,690   1.32 %
Subordinated debentures and notes   83,410       1,302   6.24 %     83,370       1,301   6.24 %     83,248       1,276   6.13 %
Other borrowed funds   50,829       112   0.87 %     56,918       108   0.75 %     34,499       33   0.37 %
Total borrowings   1,037,581       6,641   2.50 %     1,047,594       6,388   2.39 %     916,319       3,999   1.71 %
Total interest-bearing liabilities   5,336,539       20,385   1.52 %     5,272,821       18,304   1.38 %     4,887,779       10,680   0.87 %
Non-interest-bearing liabilities:                                  
Demand checking accounts   1,028,086               1,023,610               933,690          
Other non-interest-bearing liabilities   109,261               107,449               85,018          
Total liabilities   6,473,886               6,403,880               5,906,487          
Brookline Bancorp, Inc. stockholders’ equity   899,244               889,259               811,219          
Noncontrolling interest in subsidiary   9,801               9,274               8,024          
Total liabilities and equity $ 7,382,931             $ 7,302,413             $ 6,725,730          
Net interest income (tax-equivalent basis) /Interest-rate spread (4)       63,319   3.25 %         62,498   3.27 %         58,015   3.42 %
Less adjustment of tax-exempt income       160             166             358    
Net interest income     $ 63,159           $ 62,332           $ 57,657    
Net interest margin (5)         3.58 %           3.57 %           3.59 %
                                   
(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)
  Twelve Months Ended
  December 31, 2018   December 31, 2017
  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) $ 653,652     $ 14,174   2.17 %   $ 634,930     $ 12,964   2.04 %
Marketable and restricted equity securities (2)   67,640       3,973   5.88 %     65,992       3,065   4.64 %
Short-term investments   38,437       700   1.82 %     40,847       442   1.08 %
Total investments   759,729       18,847   2.48 %     741,769       16,471   2.22 %
Loans and Leases:                      
Commercial real estate loans (3)   3,235,101       146,147   4.46 %     2,968,673       123,000   4.09 %
Commercial loans (3)   813,815       37,616   4.56 %     739,369       30,904   4.13 %
Equipment financing (3)   919,047       63,968   6.96 %     830,755       55,164   6.64 %
Residential mortgage loans (3)   746,372       29,773   3.99 %     645,925       23,593   3.65 %
Other consumer loans (3)   401,425       18,216   4.53 %     366,713       15,328   4.18 %
Total loans and leases   6,115,760       295,720   4.84 %     5,551,435       247,989   4.47 %
Total interest-earning assets   6,875,489       314,567   4.58 %     6,293,204       264,460   4.20 %
Allowance for loan and lease losses   (59,154 )             (62,972 )        
Non-interest-earning assets   406,746               377,002          
Total assets $ 7,223,081             $ 6,607,234          
                       
Liabilities and Stockholders' Equity:                      
Interest-bearing liabilities:                      
Deposits:                      
NOW accounts $ 340,194       283   0.08 %   $ 322,681       225   0.07 %
Savings accounts   618,674       1,804   0.29 %     620,757       1,297   0.21 %
Money market accounts   1,715,057       15,369   0.90 %     1,761,112       8,863   0.50 %
Certificates of deposit   1,497,473       24,522   1.64 %     1,116,909       12,903   1.16 %
Total interest-bearing deposits   4,171,398       41,978   1.01 %     3,821,459       23,288   0.61 %
Borrowings                      
Advances from the FHLBB   946,017       18,650   1.94 %     884,266       11,330   1.26 %
Subordinated debentures and notes   83,350       5,181   6.22 %     83,186       5,081   6.11 %
Other borrowed funds   46,079       385   0.83 %     45,908       170   0.37 %
Total borrowings   1,075,446       24,216   2.22 %     1,013,360       16,581   1.61 %
Total interest-bearing liabilities   5,246,844       66,194   1.26 %     4,834,819       39,869   0.82 %
Non-interest-bearing liabilities:                      
Demand checking accounts   997,179               912,743          
Other non-interest-bearing liabilities   96,560               78,965          
Total liabilities   6,340,583               5,826,527          
Brookline Bancorp, Inc. stockholders’ equity   873,388               773,244          
Noncontrolling interest in subsidiary   9,110               7,463          
Total liabilities and equity $ 7,223,081             $ 6,607,234          
Net interest income (tax-equivalent basis) /Interest-rate spread (4)       248,373   3.32 %         224,591   3.38 %
Less adjustment of tax-exempt income       674             1,410    
Net interest income     $ 247,699           $ 223,181    
Net interest margin (5)         3.61 %           3.57 %
                       
(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 December 31,   At and for the Twelve Months Ended December 31,
                2018       2017       2018       2017  
     
     
     
Reconciliation Table - Non-GAAP Financial Information   (Dollars in Thousands Except Share Data)
                     
Net income attributable to Brookline Bancorp, Inc.           $ 21,138     $ 6,827     $ 83,062     $ 50,518  
Less:                          
Security (loss) gains (after-tax)     (525 )           174       7,303  
Add:                          
Impact of Tax Reform Act                     8,965             8,965  
Merger and acquisition-related expenses (after-tax)       399       130       2,908       264  
Operating earnings             $ 22,062     $ 15,922     $ 85,796     $ 52,444  
                           
Operating earnings per common share:                    
Basic             $ 0.27     $ 0.21     $ 1.08     $ 0.70  
Diluted       0.27       0.21       1.07       0.70  
                   
Weighted average common shares outstanding during the period:                    
Basic               80,258,456       76,583,712       79,669,660       74,459,508  
Diluted           80,407,525       76,868,307       79,909,243       74,811,408  
                 
                           
Return on average assets *             1.15 %     0.41 %     1.15 %     0.76 %
Less:                      
Security (loss) gains (after-tax) *         (0.03 )%     %     %     0.11 %
Add:                          
Impact of Tax Reform Act *               %     0.53 %     %     0.14 %
Merger and acquisition-related expenses (after-tax) *           0.02 %     0.01 %     0.04 %     %
Operating return on average assets *         1.20 %     0.95 %     1.19 %     0.79 %
                         
                           
Return on average tangible assets *         1.17 %     0.41 %     1.18 %     0.78 %
Less:                      
Security (loss) gains (after-tax) *             (0.03 )%     %     %     0.11 %
Add:                          
Impact of Tax Reform Act *               %     0.55 %     %     0.14 %
Merger and acquisition-related expenses (after-tax) *       0.02 %     0.01 %     0.04 %     %
Operating return on average tangible assets *             1.22 %     0.97 %     1.22 %     0.81 %
                       
                           
Return on average stockholders' equity *             9.40 %     3.37 %     9.51 %     6.53 %
Less:                        
Security (loss) gains (after-tax) *           (0.23 )%     %     0.02 %     0.94 %
Add:                        
Impact of Tax Reform Act *             %     4.42 %     %     1.17 %
Merger and acquisition-related expenses (after-tax) *         0.18 %     0.06 %     0.33 %     0.03 %
Operating return on average stockholders' equity *         9.81 %     7.85 %     9.82 %     6.79 %
         
                           
Return on average tangible stockholders' equity *         11.54 %     4.09 %     11.70 %     8.04 %
Less:                        
Security (loss) gains (after-tax) *           (0.29 )%     %     0.02 %     1.16 %
Add:                        
Impact of Tax Reform Act *               %     5.38 %     %     1.43 %
Merger and acquisition-related expenses (after-tax) *         0.22 %     0.08 %     0.41 %     0.04 %
Operating return on average tangible stockholders' equity *       12.05 %     9.55 %     12.09 %     8.35 %
                           
   
* Ratios at and for the three months ended are annualized.              
                          (Continued)
BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Non-GAAP Financial Information (Unaudited)
  At and for the Three Months Ended   At and for the Twelve
Months Ended
  December 31, 2018   September 30, 2018   June 30,
2018
  March 31,
2018
  December 31, 2017   December 31, 2018   December 31, 2017
   
  (Dollars in Thousands)
                           
Net income, as reported $ 21,138     $ 22,460     $ 20,831     $ 18,633     $ 6,827     $ 83,062     $ 50,518  
                           
Average total assets $ 7,382,931     $ 7,302,413     $ 7,273,793     $ 6,927,309     $ 6,725,730     $ 7,223,081     $ 6,607,234  
Less: Average goodwill and average identified intangible assets, net   166,777       167,313       168,185       152,377       144,226       163,712       145,000  
Average tangible assets $ 7,216,154     $ 7,135,100     $ 7,105,608     $ 6,774,932     $ 6,581,504     $ 7,059,369     $ 6,462,234  
                           
Return on average tangible assets (annualized)   1.17 %     1.26 %     1.17 %     1.10 %     0.41 %     1.18 %     0.78 %
                           
Average total stockholders’ equity $ 899,244     $ 889,259     $ 874,513     $ 829,598     $ 811,219     $ 873,388     $ 773,244  
Less: Average goodwill and average identified intangible assets, net   166,777       167,313       168,185       152,377       144,226       163,712       145,000  
Average tangible stockholders’ equity $ 732,467     $ 721,946     $ 706,328     $ 677,221     $ 666,993     $ 709,676     $ 628,244  
   
Return on average tangible stockholders’ equity (annualized)   11.54 %     12.44 %     11.80 %     11.01 %     4.09 %     11.70 %     8.04 %
                           
Brookline Bancorp, Inc. stockholders’ equity $ 900,140     $ 890,368     $ 877,283     $ 865,777     $ 803,830     $ 900,140     $ 803,830  
Less:                          
Goodwill   160,427       160,427       160,427       160,896       137,890       160,427       137,890  
Identified intangible assets, net   6,086       6,623       7,160       7,697       6,044       6,086       6,044  
Tangible stockholders' equity $ 733,627     $ 723,318     $ 709,696     $ 697,184     $ 659,896     $ 733,627     $ 659,896  
                           
Total assets $ 7,392,805     $ 7,320,596     $ 7,285,710     $ 7,248,114     $ 6,780,249     $ 7,392,805     $ 6,780,249  
Less:                          
Goodwill   160,427       160,427       160,427       160,896       137,890       160,427       137,890  
Identified intangible assets, net   6,086       6,623       7,160       7,697       6,044       6,086       6,044  
Tangible assets $ 7,226,292     $ 7,153,546     $ 7,118,123     $ 7,079,521     $ 6,636,315     $ 7,226,292     $ 6,636,315  
                           
Tangible stockholders’ equity to tangible assets   10.15 %     10.11 %     9.97 %     9.85 %     9.94 %     10.15 %     9.94 %
                           
Tangible stockholders' equity $ 733,627     $ 723,318     $ 709,696     $ 697,184     $ 659,896     $ 733,627     $ 659,896  
                           
Number of common shares issued   85,177,172       85,177,172       85,177,172       85,177,172       81,695,695       85,177,172       81,695,695  
Less:                          
Treasury shares   5,020,025       4,291,317       4,409,501       4,401,333       4,440,665       5,020,025       4,440,665  
Unallocated ESOP shares   109,950       118,050       126,144       134,238       142,332       109,950       142,332  
Unvested restricted shares