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Brookline Bancorp Announces Third Quarter Results
Source: Nasdaq GlobeNewswire / 25 Oct 2023 16:05:04 America/New_York
BOSTON, Oct. 25, 2023 (GLOBE NEWSWIRE) -- Brookline Bancorp, Inc. (NASDAQ: BRKL) (the “Company”) today announced net income of $22.7 million, or $0.26 per basic and diluted share, for the third quarter of 2023, compared to net income of $21.9 million, or $0.25 per basic and diluted share, for the second quarter of 2023, and net income of $30.1 million, or $0.39 per basic and diluted share, for the third quarter of 2022.
Paul Perrault, Chairman and CEO commented on the quarter, “I am pleased to report on our Company’s performance in the third quarter. We continue to make progress in all of our markets. Our colleagues are keeping us well positioned to continue taking advantage of opportunities as they present themselves.”
BALANCE SHEET
Total assets at September 30, 2023 decreased $25.5 million to $11.18 billion from $11.21 billion at June 30, 2023, and increased $2.5 billion from $8.7 billion at September 30, 2022. At September 30, 2023, total loans and leases were $9.4 billion, representing an increase of $40.0 million from June 30, 2023, and an increase of $2.0 billion from September 30, 2022, primarily driven by the acquisition of PCSB Financial Corporation ("PCSB").
Total investment securities at September 30, 2023 decreased $29.8 million to $880.4 million from $910.2 million at June 30, 2023, and increased $204.7 million from $675.7 million at September 30, 2022. Total cash and cash equivalents at September 30, 2023 decreased $63.4 million to $161.0 million from $224.4 million at June 30, 2023, and increased $48.5 million from $112.5 million at September 30, 2022. As of September 30, 2023, total investment securities and total cash and cash equivalents represented 9.3 percent of total assets compared to 10.1 percent and 9.1 percent as of June 30, 2023 and September 30, 2022, respectively.
Total deposits at September 30, 2023 increased $49.0 million to $8.57 billion from $8.52 billion at June 30, 2023, consisting of an $87.5 million increase in customer deposits, partially offset by a $38.5 million decrease in brokered deposits, and increased $1.8 billion from $6.74 billion at September 30, 2022, primarily driven by the completion of the PCSB acquisition.
Total borrowed funds at September 30, 2023 decreased $91.2 million to $1.1 billion from $1.2 billion at June 30, 2023, and increased $376.3 million from $758.8 million at September 30, 2022.
The ratio of stockholders’ equity to total assets was 10.36 percent at September 30, 2023, compared to 10.37 percent at June 30, 2023, and 11.08 percent at September 30, 2022. The ratio of tangible stockholders’ equity to tangible assets (non-GAAP) was 8.16 percent at both September 30, 2023 and June 30, 2023, and 9.39 percent at September 30, 2022. Tangible book value per common share (non-GAAP) decreased $0.05 from $10.07 at June 30, 2023 to $10.02 at September 30, 2023, compared to $10.43 at September 30, 2022.
NET INTEREST INCOME
Net interest income decreased $2.0 million to $84.1 million during the third quarter of 2023 from $86.0 million for the quarter ended June 30, 2023. The net interest margin decreased 8 basis points to 3.18 percent for the three months ended September 30, 2023 from 3.26 percent for the three months ended June 30, 2023, primarily driven by higher funding costs.
NON-INTEREST INCOME
Total non-interest income for the quarter ended September 30, 2023 was $5.5 million and flat compared to the quarter ended June 30, 2023.
PROVISION FOR CREDIT LOSSES
The Company recorded a provision for credit losses of $2.9 million for the quarter ended September 30, 2023, compared to $5.7 million for the quarter ended June 30, 2023.
Total net charge-offs for the third quarter of 2023 were $11.0 million compared to $1.1 million in the second quarter of 2023. The increase was primarily driven by $10.2 million in net charge-offs on two commercial loans, the majority of which was previously reserved for. The ratio of net loan and lease charge-offs to average loans and leases on an annualized basis increased to 47 basis points for the third quarter of 2023 from 5 basis points for the second quarter of 2023.
The allowance for loan and lease losses represented 1.27 percent of total loans and leases at September 30, 2023, compared to 1.35 percent at June 30, 2023, and 1.27 percent at September 30, 2022, driven by a decline in individually assessed reserves due to the aforementioned charge-offs.
ASSET QUALITY
The ratio of nonperforming loans and leases to total loans and leases was 0.55 percent at September 30, 2023, an increase from 0.50 percent at June 30, 2023. Total nonaccrual loans and leases increased $4.9 million to $51.2 million at September 30, 2023 from $46.3 million at June 30, 2023. The ratio of nonperforming assets to total assets was 0.46 percent at September 30, 2023, an increase from 0.42 percent at June 30, 2023. Total nonperforming assets increased $4.6 million to $51.5 million at September 30, 2023 from $46.9 million at June 30, 2023. The increase in nonperforming assets was primarily driven by a $14.8 million commercial real estate relationship becoming non-accrual during the quarter, partially offset by two commercial relationships of which $10.2 million was charged off during the quarter.
NON-INTEREST EXPENSE
Non-interest expense for the quarter ended September 30, 2023 decreased $0.1 million to $57.7 million from $57.8 million for the quarter ended June 30, 2023. The decrease was primarily driven by a decrease of $1.0 million in merger and acquisition expense and a decrease of $0.5 million in FDIC insurance expense, partially offset by an increase of $0.7 million in other non-interest expense and an increase of $0.4 million in professional services expense.
PROVISION FOR INCOME TAXES
The effective tax rate was 21.4 percent and 20.3 percent for the three and nine months ended September 30, 2023 compared to 21.4 percent for the three months ended June 30, 2023 and 18.7 percent and 22.9 percent for the three and nine months ended September 30, 2022.
RETURNS ON AVERAGE ASSETS AND AVERAGE EQUITY
The annualized return on average assets increased to 0.81 percent during the third quarter 2023 from 0.78 percent for the second quarter of 2023.
The annualized return on average stockholders' equity increased to 7.78 percent during the third quarter of 2023 from 7.44 percent for the second quarter of 2023. The annualized return on average tangible stockholders’ equity increased to 10.09 percent for the third quarter of 2023 from 9.67 percent for the second quarter of 2023.
DIVIDEND DECLARED
The Company’s Board of Directors approved a dividend of $0.135 per share for the quarter ended September 30, 2023. The dividend will be paid on November 24, 2023 to stockholders of record on November 10, 2023.
CONFERENCE CALL
The Company will conduct a conference call/webcast at 1:30 PM Eastern Time on Thursday, October 26, 2023 to discuss the results for the quarter, business highlights and outlook. A copy of the Earnings Presentation is available on the Company’s website, www.brooklinebancorp.com. To listen to the call and view the Company’s Earnings Presentation, please join the call via https://events.q4inc.com/attendee/328004214. To listen to the call without access to the slides, interested parties may dial 833-470-1428 (United States) or 404-975-4839 (internationally) and ask for the Brookline Bancorp, Inc. conference call (Access Code 454769). A recorded playback of the call will be available for one week following the call on the Company’s website under “Investor Relations” or by dialing 866-813-9403 (United States) or 204-525-0658 (internationally) and entering the passcode: 509267.
ABOUT BROOKLINE BANCORP, INC.
Brookline Bancorp, Inc., a bank holding company with $11.2 billion in assets and branch locations in Massachusetts, Rhode Island, and the Lower Hudson Valley of New York State, is headquartered in Boston, Massachusetts and operates as the holding company for Brookline Bank, Bank Rhode Island, and PCSB Bank (the "banks"). The Company provides commercial and retail banking services, cash management and investment services to customers throughout Central New England and the Lower Hudson Valley of New York State. More information about Brookline Bancorp, Inc. and its banks can be found at the following websites: www.brooklinebank.com, www.bankri.com and www.pcsb.com.
FORWARD-LOOKING STATEMENTS
Certain statements contained in this press release that are not historical facts may constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and are intended to be covered by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. We may also make forward-looking statements in other documents we file with the Securities and Exchange Commission ("SEC"), in our annual reports to shareholders, in press releases and other written materials, and in oral statements made by our officers, directors or employees. You can identify forward looking statements by the use of the words “believe,” “expect,” “anticipate,” “intend,” “estimate,” “assume,” “outlook,” “will,” “should,” and other expressions that predict or indicate future events and trends and which do not relate to historical matters, including statements regarding the Company’s business, credit quality, financial condition, liquidity and results of operations. Forward-looking statements may differ, possibly materially, from what is included in this press release due to factors and future developments that are uncertain and beyond the scope of the Company’s control. These include, but are not limited to, the Company’s ability to achieve the synergies and value creation contemplated by the acquisition of PCSB; turbulence in the capital and debt markets; changes in interest rates; competitive pressures from other financial institutions; general economic conditions (including inflation and concerns about liquidity) on a national basis or in the local markets in which the Company operates; changes in consumer behavior due to changing political, business and economic conditions, or legislative or regulatory initiatives; changes in the value of securities and other assets in the Company’s investment portfolio; increases in loan and lease default and charge-off rates; the adequacy of allowances for loan and lease losses; decreases in deposit levels that necessitate increases in borrowing to fund loans and investments; operational risks including, but not limited to, cybersecurity incidents, fraud, natural disasters, and future pandemics; changes in regulation; the possibility that future credit losses may be higher than currently expected due to changes in economic assumptions and adverse economic developments; the risk that goodwill and intangibles recorded in the Company’s financial statements will become impaired; and changes in assumptions used in making such forward-looking statements. Forward-looking statements involve risks and uncertainties which are difficult to predict. The Company’s actual results could differ materially from those projected in the forward-looking statements as a result of, among others, the risks outlined in the Company’s Annual Report on Form 10-K, as updated by its Quarterly Reports on Form 10-Q and other filings submitted to the SEC. The Company does not undertake any obligation to update any forward-looking statement to reflect circumstances or events that occur after the date the forward-looking statements are made.
BASIS OF PRESENTATION
The Company's consolidated financial statements have been prepared in conformity with generally accepted accounting principles (“GAAP”) as set forth by the Financial Accounting Standards Board in its Accounting Standards Codification and through the rules and interpretive releases of the SEC under the authority of federal securities laws. Certain amounts previously reported have been reclassified to conform to the current period's presentation.
NON-GAAP FINANCIAL MEASURES
The Company uses certain non-GAAP financial measures, such as operating earnings, operating earnings per common share, operating return on average assets, operating return on average tangible assets, operating return on average stockholders' equity, operating return on average tangible stockholders' equity, tangible book value per common share, tangible stockholders’ equity to tangible assets, return on average tangible assets (annualized) and return on average tangible stockholders' equity (annualized). These non-GAAP financial measures provide information for investors to effectively analyze financial trends of ongoing business activities, and to enhance comparability with peers across the financial services sector. A detailed reconciliation table of the Company's GAAP to the non-GAAP measures is attached.
INVESTOR RELATIONS: Contact: Carl M. Carlson Brookline Bancorp, Inc. Co-President and Chief Financial Officer (617) 425-5331 ccarlson@brkl.com BROOKLINE BANCORP, INC. AND SUBSIDIARIES Selected Financial Highlights (Unaudited) At and for the Three Months Ended September 30,
2023June 30,
2023March 31,
2023December 31,
2022September 30,
2022(Dollars In Thousands Except per Share Data) Earnings Data: Net interest income $ 84,070 $ 86,037 $ 86,049 $ 80,030 $ 78,026 Provision (credit) for credit losses 2,947 5,726 25,344 5,671 2,845 Provision (credit) for investment losses 84 133 198 54 (10 ) Non-interest income 5,508 5,462 12,937 9,056 6,834 Non-interest expense 57,679 57,825 64,776 47,225 44,959 Income before provision for income taxes 28,868 27,815 8,668 36,136 37,066 Net income 22,701 21,850 7,560 29,695 30,149 Performance Ratios: Net interest margin (1) 3.18 % 3.26 % 3.36 % 3.81 % 3.80 % Interest-rate spread (1) 2.45 % 2.51 % 2.66 % 3.35 % 3.58 % Return on average assets (annualized) 0.81 % 0.78 % 0.27 % 1.34 % 1.40 % Return on average tangible assets (annualized) (non-GAAP) 0.83 % 0.79 % 0.28 % 1.37 % 1.43 % Return on average stockholders' equity (annualized) 7.78 % 7.44 % 2.61 % 12.09 % 12.29 % Return on average tangible stockholders' equity (annualized) (non-GAAP) 10.09 % 9.67 % 3.43 % 14.48 % 14.72 % Efficiency ratio (2) 64.39 % 63.20 % 65.44 % 53.01 % 52.98 % Per Common Share Data: Net income — Basic $ 0.26 $ 0.25 $ 0.09 $ 0.39 $ 0.39 Net income — Diluted 0.26 0.25 0.09 0.39 0.39 Cash dividends declared 0.135 0.135 0.135 0.135 0.135 Book value per share (end of period) 13.03 13.11 13.14 12.91 12.54 Tangible book value per share (end of period) (non-GAAP) 10.02 10.07 10.08 10.80 10.43 Stock price (end of period) 9.11 8.74 10.50 14.15 11.65 Balance Sheet: Total assets $ 11,180,555 $ 11,206,078 $ 11,522,485 $ 9,185,836 $ 8,695,708 Total loans and leases 9,380,782 9,340,799 9,246,965 7,644,388 7,421,304 Total deposits 8,566,013 8,517,013 8,456,462 6,522,146 6,735,605 Total stockholders’ equity 1,157,871 1,162,308 1,165,066 992,125 963,618 Asset Quality: Nonperforming assets $ 51,540 $ 46,925 $ 28,962 $ 15,302 $ 18,312 Nonperforming assets as a percentage of total assets 0.46 % 0.42 % 0.25 % 0.17 % 0.21 % Allowance for loan and lease losses $ 119,081 $ 125,817 $ 120,865 $ 98,482 $ 94,169 Allowance for loan and lease losses as a percentage of total loans and leases 1.27 % 1.35 % 1.31 % 1.29 % 1.27 % Net loan and lease charge-offs (recoveries) $ 10,974 $ 1,097 $ 451 $ 310 $ (179 ) Net loan and lease charge-offs as a percentage of average loans and leases (annualized) 0.47 % 0.05 % 0.02 % 0.02 % (0.01 )% Capital Ratios: Stockholders’ equity to total assets 10.36 % 10.37 % 10.11 % 10.80 % 11.08 % Tangible stockholders’ equity to tangible assets (non-GAAP) 8.16 % 8.16 % 7.94 % 9.20 % 9.39 % (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) September 30,
2023June 30,
2023March 31,
2023December 31,
2022September 30,
2022ASSETS (In Thousands Except Share Data) Cash and due from banks $ 33,506 $ 44,323 $ 30,782 $ 191,767 $ 65,638 Short-term investments 127,495 180,109 455,538 191,192 46,873 Total cash and cash equivalents 161,001 224,432 486,320 382,959 112,511 Investment securities available-for-sale 880,412 910,210 1,067,032 656,766 675,692 Total investment securities 880,412 910,210 1,067,032 656,766 675,692 Allowance for investment security losses (517 ) (433 ) (301 ) (102 ) (48 ) Net investment securities 879,895 909,777 1,066,731 656,664 675,644 Loans and leases: Commercial real estate loans 5,669,768 5,670,771 5,610,414 4,404,148 4,269,512 Commercial loans and leases 2,241,375 2,193,027 2,147,149 2,016,499 1,933,645 Consumer loans 1,469,639 1,477,001 1,489,402 1,223,741 1,218,147 Total loans and leases 9,380,782 9,340,799 9,246,965 7,644,388 7,421,304 Allowance for loan and lease losses (119,081 ) (125,817 ) (120,865 ) (98,482 ) (94,169 ) Net loans and leases 9,261,701 9,214,982 9,126,100 7,545,906 7,327,135 Restricted equity securities 65,460 71,421 86,230 71,307 44,760 Premises and equipment, net of accumulated depreciation 90,476 90,685 87,799 71,391 69,912 Right-of-use asset operating leases 31,619 31,774 30,067 19,484 18,614 Deferred tax asset 74,491 77,704 75,028 52,237 56,894 Goodwill 241,222 241,222 241,222 160,427 160,427 Identified intangible assets, net of accumulated amortization 26,172 28,126 30,080 1,781 1,902 Other real estate owned and repossessed assets 299 602 508 408 591 Other assets 348,219 315,353 292,400 223,272 227,318 Total assets $ 11,180,555 $ 11,206,078 $ 11,522,485 $ 9,185,836 $ 8,695,708 LIABILITIES AND STOCKHOLDERS' EQUITY Deposits: Demand checking accounts $ 1,745,137 $ 1,843,516 $ 1,899,370 $ 1,802,518 $ 1,848,562 NOW accounts 647,476 699,119 757,411 544,118 597,870 Savings accounts 1,625,804 1,464,054 1,268,375 762,271 824,789 Money market accounts 2,161,359 2,166,570 2,185,971 2,174,952 2,405,680 Certificate of deposit accounts 1,491,844 1,410,905 1,362,970 928,143 924,771 Brokered deposit accounts 894,393 932,849 982,365 310,144 133,933 Total deposits 8,566,013 8,517,013 8,456,462 6,522,146 6,735,605 Borrowed funds: Advances from the FHLBB 899,304 1,043,381 1,458,457 1,237,823 557,895 Subordinated debentures and notes 84,152 84,116 84,080 84,044 84,008 Other borrowed funds 151,612 98,773 87,565 110,785 116,865 Total borrowed funds 1,135,068 1,226,270 1,630,102 1,432,652 758,768 Operating lease liabilities 32,807 33,021 31,373 19,484 18,614 Mortgagors’ escrow accounts 12,578 17,207 17,080 5,607 5,785 Reserve for unfunded credits 21,497 22,789 23,112 20,602 19,555 Accrued expenses and other liabilities 254,721 227,470 199,290 193,220 193,763 Total liabilities 10,022,684 10,043,770 10,357,419 8,193,711 7,732,090 Stockholders' equity: Common stock, $0.01 par value; 200,000,000 shares authorized; 96,998,075 shares issued, 96,998,075 shares issued, 96,998,075 shares issued, 85,177,172 shares issued, and 85,177,172 shares issued, respectively 970 970 970 852 852 Additional paid-in capital 901,376 905,084 904,174 736,074 735,119 Retained earnings, partially restricted 427,937 417,328 407,528 412,019 392,779 Accumulated other comprehensive income (81,541 ) (66,156 ) (52,688 ) (61,947 ) (70,227 ) Treasury stock, at cost; 7,350,981, 7,734,891, 7,734,891, 7,731,445, and 7,730,945 shares, respectively (90,871 ) (94,918 ) (94,918 ) (94,873 ) (94,866 ) Unallocated common stock held by the Employee Stock Ownership Plan; 0, 0, 0, 0, and 4,833 shares, respectively — — — — (39 ) Total stockholders' equity 1,157,871 1,162,308 1,165,066 992,125 963,618 Total liabilities and stockholders' equity $ 11,180,555 $ 11,206,078 $ 11,522,485 $ 9,185,836 $ 8,695,708 BROOKLINE BANCORP, INC. AND SUBSIDIARIES Consolidated Statements of Income (Unaudited) Three Months Ended September 30,
2023June 30,
2023March 31,
2023December 31,
2022September 30,
2022(In Thousands Except Share Data) Interest and dividend income: Loans and leases $ 136,561 $ 132,299 $ 121,931 $ 98,386 $ 84,375 Debt securities 6,799 8,034 7,870 3,497 3,337 Restricted equity securities 1,310 1,673 1,255 766 467 Short-term investments 2,390 3,351 1,495 754 464 Total interest and dividend income 147,060 145,357 132,551 103,403 88,643 Interest expense: Deposits 49,116 43,147 29,368 14,185 7,354 Borrowed funds 13,874 16,173 17,134 9,188 3,263 Total interest expense 62,990 59,320 46,502 23,373 10,617 Net interest income 84,070 86,037 86,049 80,030 78,026 Provision for credit losses 2,947 5,726 25,344 5,671 2,845 Provision (credit) for investment losses 84 133 198 54 (10 ) Net interest income after provision for credit losses 81,039 80,178 60,507 74,305 75,191 Non-interest income: Deposit fees 3,024 2,866 2,657 2,916 2,759 Loan fees 639 491 391 446 349 Loan level derivative income, net 376 363 2,373 670 1,275 Gain on investment securities, net — 3 1,701 321 — Gain on sales of loans and leases held-for-sale 225 308 1,638 2,612 889 Other 1,244 1,431 4,177 2,091 1,562 Total non-interest income 5,508 5,462 12,937 9,056 6,834 Non-interest expense: Compensation and employee benefits 33,491 33,438 36,565 29,525 28,306 Occupancy 4,983 4,870 5,223 4,005 3,906 Equipment and data processing 6,766 6,531 6,462 5,758 5,066 Professional services 2,368 1,986 1,430 1,546 1,069 FDIC insurance 2,152 2,609 1,244 1,001 709 Advertising and marketing 1,174 1,382 1,410 1,052 1,337 Amortization of identified intangible assets 1,955 1,954 1,966 120 120 Merger and acquisition expense — 1,002 6,409 641 1,073 Other 4,790 4,053 4,067 3,577 3,373 Total non-interest expense 57,679 57,825 64,776 47,225 44,959 Income before provision for income taxes 28,868 27,815 8,668 36,136 37,066 Provision for income taxes 6,167 5,965 1,108 6,441 6,917 Net income $ 22,701 $ 21,850 $ 7,560 $ 29,695 $ 30,149 Earnings per common share: Basic $ 0.26 $ 0.25 $ 0.09 $ 0.39 $ 0.39 Diluted $ 0.26 $ 0.25 $ 0.09 $ 0.39 $ 0.39 Weighted average common shares outstanding during the period: Basic 88,795,270 88,665,135 86,563,641 76,841,655 76,779,038 Diluted 88,971,210 88,926,543 86,837,806 77,065,076 77,007,971 Dividends paid per common share $ 0.135 $ 0.135 $ 0.135 $ 0.135 $ 0.130 BROOKLINE BANCORP, INC. AND SUBSIDIARIES Consolidated Statements of Income (Unaudited) Nine Months Ended September 30, 2023 2022 (In Thousands Except Share Data) Interest and dividend income: Loans and leases $ 390,791 $ 230,383 Debt securities 22,703 9,582 Restricted equity securities 4,238 1,132 Short-term investments 7,236 686 Total interest and dividend income 424,968 241,783 Interest expense: Deposits 121,631 15,407 Borrowed funds 47,181 6,635 Total interest expense 168,812 22,042 Net interest income 256,156 219,741 Provision for credit losses 34,017 2,854 Provision for investment losses 415 48 Net interest income after provision for credit losses 221,724 216,839 Non-interest income: Deposit Fees 8,547 8,003 Loan Fees 1,521 1,762 Loan level derivative income, net 3,112 3,576 Gain on investment securities, net 1,704 — Gain on sales of loans and leases held-for-sale 2,171 1,524 Other 6,852 4,426 Total non-interest income 23,907 19,291 Non-interest expense: Compensation and employee benefits 103,494 83,962 Occupancy 15,076 11,997 Equipment and data processing 19,759 15,075 Professional services 5,784 3,514 FDIC insurance 6,005 2,176 Advertising and marketing 3,966 3,928 Amortization of identified intangible assets 5,875 374 Merger and acquisition expense 7,411 1,608 Other 12,910 9,683 Total non-interest expense 180,280 132,317 Income before provision for income taxes 65,351 103,813 Provision for income taxes 13,240 23,764 Net income $ 52,111 $ 80,049 Earnings per common share: Basic $ 0.59 $ 1.04 Diluted $ 0.59 $ 1.04 Weighted average common shares outstanding during the period: Basic 88,016,190 77,159,356 Diluted 88,253,361 77,448,290 Dividends paid per common share $ 0.405 $ 0.385 BROOKLINE BANCORP, INC. AND SUBSIDIARIES Asset Quality Analysis (Unaudited) At and for the Three Months Ended September 30,
2023June 30,
2023March 31,
2023December 31,
2022September 30,
2022(Dollars in Thousands) NONPERFORMING ASSETS: Loans and leases accounted for on a nonaccrual basis: Commercial real estate mortgage $ 23,263 $ 8,737 $ 4,589 $ 607 $ 3,136 Multi-family mortgage 1,318 — — — — Construction 2,316 3,828 3,883 707 — Total commercial real estate loans 26,897 12,565 8,472 1,314 3,136 Commercial 5,406 16,023 5,495 464 618 Equipment financing 13,974 12,809 9,908 9,653 10,544 Condominium association — — 51 58 64 Total commercial loans and leases 19,380 28,832 15,454 10,175 11,226 Residential mortgage 4,249 4,343 3,449 2,680 2,741 Home equity 713 583 1,079 723 616 Other consumer 2 — — 2 2 Total consumer loans 4,964 4,926 4,528 3,405 3,359 Total nonaccrual loans and leases 51,241 46,323 28,454 14,894 17,721 Other repossessed assets 299 602 508 408 591 Total nonperforming assets $ 51,540 $ 46,925 $ 28,962 $ 15,302 $ 18,312 Loans and leases past due greater than 90 days and still accruing $ 1,175 $ 490 $ 726 $ 33 $ 9,583 Nonperforming loans and leases as a percentage of total loans and leases 0.55 % 0.50 % 0.31 % 0.19 % 0.24 % Nonperforming assets as a percentage of total assets 0.46 % 0.42 % 0.25 % 0.17 % 0.21 % PROVISION AND ALLOWANCE FOR LOAN AND LEASE LOSSES: Allowance for loan and lease losses at beginning of period $ 125,817 $ 120,865 $ 98,482 $ 94,169 $ 93,188 Charge-offs (10,978 ) (1,690 ) (845 ) (658 ) (598 ) Recoveries 4 593 394 348 777 Net (charge-offs) recoveries (10,974 ) (1,097 ) (451 ) (310 ) 179 Provision (credit) for loan and lease losses
excluding unfunded commitments *4,238 6,049 22,834 4,623 802 Allowance for loan and lease losses at end of period $ 119,081 $ 125,817 $ 120,865 $ 98,482 $ 94,169 Allowance for loan and lease losses as a percentage of total loans and leases 1.27 % 1.35 % 1.31 % 1.29 % 1.27 % NET CHARGE-OFFS (RECOVERIES): Commercial real estate loans $ (3 ) $ (6 ) $ (6 ) $ (6 ) $ (6 ) Commercial loans and leases 10,958 1,108 457 320 (179 ) Consumer loans 19 (5 ) — (4 ) 6 Total net charge-offs (recoveries) $ 10,974 $ 1,097 $ 451 $ 310 $ (179 ) Net loan and lease charge-offs as a percentage of average loans and leases (annualized) 0.47 % 0.05 % 0.02 % 0.02 % (0.01 )% *Provision for loan and lease losses does not include (credit) provision of $(1.3 million), $(0.3) million, $2.5 million, $1.0 million, and $2.0 million for credit losses on unfunded commitments during the three months ended September 30, 2023, June 30, 2023, March 31, 2023, December 31, 2022, and September 30, 2022, respectively. BROOKLINE BANCORP, INC. AND SUBSIDIARIES Average Yields / Costs (Unaudited) Three Months Ended September 30, 2023 June 30, 2023 September 30, 2022 Average
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Yield/ CostAverage
BalanceInterest (1) Average
Yield/ Cost(Dollars in Thousands) Assets: Interest-earning assets: Investments: Debt securities (2) $ 887,612 $ 6,840 3.08 % $ 1,000,440 $ 8,091 3.23 % $ 714,226 $ 3,337 1.87 % Marketable and restricted equity securities (2) 67,824 1,310 7.73 % 77,364 1,673 8.65 % 36,525 467 5.12 % Short-term investments 172,483 2,390 5.54 % 229,474 3,351 5.84 % 66,257 464 2.80 % Total investments 1,127,919 10,540 3.74 % 1,307,278 13,115 4.01 % 817,008 4,268 2.09 % Loans and Leases: Commercial real estate loans (3) 5,667,373 78,750 5.44 % 5,640,491 79,582 5.58 % 4,239,155 44,729 4.13 % Commercial loans (3) 939,492 15,295 6.38 % 913,732 13,502 5.85 % 731,095 8,492 4.55 % Equipment financing (3) 1,280,033 23,331 7.29 % 1,253,199 22,357 7.14 % 1,157,829 19,042 6.58 % Consumer loans (3) 1,471,985 19,237 5.21 % 1,482,799 16,903 4.56 % 1,206,968 12,165 4.02 % Total loans and leases 9,358,883 136,613 5.84 % 9,290,221 132,344 5.70 % 7,335,047 84,428 4.60 % Total interest-earning assets 10,486,802 147,153 5.61 % 10,597,499 145,459 5.49 % 8,152,055 88,696 4.35 % Non-interest-earning assets 693,833 675,173 434,365 Total assets $ 11,180,635 $ 11,272,672 $ 8,586,420 Liabilities and Stockholders' Equity: Interest-bearing liabilities: Deposits: NOW accounts $ 681,929 1,159 0.67 % $ 735,001 1,069 0.58 % $ 607,210 579 0.38 % Savings accounts 1,557,911 8,859 2.26 % 1,374,337 5,917 1.73 % 881,988 664 0.30 % Money market accounts 2,177,528 15,785 2.88 % 2,140,522 13,989 2.62 % 2,423,920 4,038 0.66 % Certificates of deposit 1,444,269 12,128 3.33 % 1,390,913 10,021 2.89 % 964,112 1,803 0.74 % Brokered deposit accounts 882,351 11,185 5.03 % 975,700 12,151 5.00 % 117,058 270 0.92 % Total interest-bearing deposits 6,743,988 49,116 2.89 % 6,616,473 43,147 2.62 % 4,994,288 7,354 0.58 % Borrowings Advances from the FHLBB 954,989 11,706 4.80 % 1,191,424 14,287 4.74 % 331,840 1,700 2.00 % Subordinated debentures and notes 84,134 1,378 6.55 % 84,098 1,363 6.49 % 83,989 1,295 6.17 % Other borrowed funds 117,531 790 2.67 % 86,896 523 2.41 % 89,019 268 1.20 % Total borrowings 1,156,654 13,874 4.69 % 1,362,418 16,173 4.70 % 504,848 3,263 2.53 % Total interest-bearing liabilities 7,900,642 62,990 3.16 % 7,978,891 59,320 2.98 % 5,499,136 10,617 0.77 % Non-interest-bearing liabilities: Demand checking accounts 1,794,225 1,849,393 1,908,459 Other non-interest-bearing liabilities 318,041 270,221 197,446 Total liabilities 10,012,908 10,098,505 7,605,041 Stockholders’ equity 1,167,727 1,174,167 981,379 Total liabilities and equity $ 11,180,635 $ 11,272,672 $ 8,586,420 Net interest income (tax-equivalent basis) /Interest-rate spread (4) 84,163 2.45 % 86,139 2.51 % 78,079 3.58 % Less adjustment of tax-exempt income 93 102 53 Net interest income $ 84,070 $ 86,037 $ 78,026 Net interest margin (5) 3.18 % 3.26 % 3.80 % (1) Tax-exempt income on debt securities, equity securities and revenue bonds included in commercial real estate loans is included on a tax-equivalent basis. (2) Average balances include unrealized gains (losses) on investment securities. Dividend payments may not be consistent and average yield on equity securities may vary from month to month. (3) Loans on nonaccrual status are included in the average balances. (4) Interest rate spread represents the difference between the yield on interest-earning assets and the cost of interest-bearing liabilities. (5) Net interest margin represents net interest income (tax-equivalent basis) divided by average interest-earning assets on an actual/actual basis. BROOKLINE BANCORP, INC. AND SUBSIDIARIES Average Yields / Costs (Unaudited) Nine Months Ended September 30, 2023 September 30, 2022 Average
BalanceInterest (1) Average
Yield/ CostAverage
BalanceInterest (1) Average
Yield/ Cost(Dollars in Thousands) Assets: Interest-earning assets: Investments: Debt securities (2) $ 971,855 $ 22,905 3.14 % $ 720,266 $ 9,582 1.77 % Marketable and restricted equity securities (2) 74,000 4,238 7.64 % 31,663 1,132 4.77 % Short-term investments 183,295 7,236 5.26 % 119,083 686 0.77 % Total investments 1,229,150 34,379 3.73 % 871,012 11,400 1.75 % Loans and Leases: Commercial real estate loans (3) 5,629,600 225,999 5.29 % 4,204,260 119,723 3.76 % Commercial loans (3) 915,420 42,814 6.17 % 727,333 23,564 4.28 % Equipment financing (3) 1,253,512 66,901 7.12 % 1,131,069 54,951 6.48 % Consumer loans (3) 1,469,025 55,210 5.01 % 1,191,294 32,304 3.62 % Total loans and leases 9,267,557 390,924 5.62 % 7,253,956 230,542 4.24 % Total interest-earning assets 10,496,707 425,303 5.40 % 8,124,968 241,942 3.97 % Non-interest-earning assets 698,273 419,501 Total assets $ 11,194,980 $ 8,544,469 Liabilities and Stockholders' Equity: Interest-bearing liabilities: Deposits: NOW accounts $ 741,951 3,129 0.56 % $ 603,243 898 0.20 % Savings accounts 1,365,541 17,290 1.69 % 915,185 1,073 0.16 % Money market accounts 2,227,404 41,914 2.52 % 2,423,207 7,681 0.42 % Certificates of deposit 1,394,338 29,605 2.84 % 1,024,303 5,345 0.70 % Brokered deposit accounts 798,800 29,693 4.97 % 121,724 410 0.45 % Total interest-bearing deposits 6,528,034 121,631 2.49 % 5,087,662 15,407 0.40 % Borrowings Advances from the FHLBB 1,135,845 40,524 4.70 % 207,090 2,376 1.51 % Subordinated debentures and notes 84,098 4,095 6.49 % 83,952 3,801 6.04 % Other borrowed funds 120,825 2,562 2.83 % 108,337 458 0.57 % Total borrowings 1,340,768 47,181 4.64 % 399,379 6,635 2.19 % Total interest-bearing liabilities 7,868,802 168,812 2.87 % 5,487,041 22,042 0.54 % Non-interest-bearing liabilities: Demand checking accounts 1,857,429 1,891,698 Other non-interest-bearing liabilities 301,543 180,842 Total liabilities 10,027,774 7,559,581 Stockholders’ equity 1,167,206 984,888 Total liabilities and equity $ 11,194,980 $ 8,544,469 Net interest income (tax-equivalent basis) /Interest-rate spread (4) 256,491 2.53 % 219,900 3.43 % Less adjustment of tax-exempt income 335 159 Net interest income $ 256,156 $ 219,741 Net interest margin (5) 3.27 % 3.62 % (1) Tax-exempt income on debt securities, equity securities and revenue bonds included in commercial real estate loans is included on a tax-equivalent basis. (2) Average balances include unrealized gains (losses) on investment securities. Dividend payments may not be consistent and average yield on equity securities may vary from month to month. (3) Loans on nonaccrual status are included in the average balances. (4) Interest rate spread represents the difference between the yield on interest-earning assets and the cost of interest-bearing liabilities. (5) Net interest margin represents net interest income (tax-equivalent basis) divided by average interest-earning assets on an actual/actual basis. BROOKLINE BANCORP, INC. AND SUBSIDIARIES Non-GAAP Financial Information (Unaudited) At and for the Three Months Ended
September 30,At and for the Nine Months Ended
September 30,2023 2022 2023 2022 Reconciliation Table - Non-GAAP Financial Information (Dollars in Thousands Except Share Data) (Dollars in Thousands Except Share Data) Reported Pretax Income $ 28,868 $ 37,066 $ 65,351 $ 103,813 Less: Security gains — — 1,704 — Add: Day 1 PCSB CECL provision — — 16,744 — Merger and acquisition expense — 1,073 7,411 1,608 Operating Pretax Income $ 28,868 $ 38,139 $ 87,802 $ 105,421 Effective tax rate 21.4 % 18.7 % 20.3 % 22.9 % Provision for income taxes 6,167 7,118 17,789 24,132 Operating earnings after tax $ 22,701 $ 31,021 $ 70,013 $ 81,289 Operating earnings per common share: Basic $ 0.26 $ 0.40 $ 0.80 $ 1.05 Diluted $ 0.26 $ 0.40 $ 0.79 $ 1.05 Weighted average common shares outstanding during the period: Basic 88,795,270 76,779,038 88,016,190 77,159,356 Diluted 88,971,210 77,007,971 88,253,361 77,448,290 Return on average assets * 0.81 % 1.40 % 0.62 % 1.25 % Less: Security gains (after-tax) * — % — % 0.02 % — % Add: Day 1 PCSB CECL provision * — % — % 0.16 % — % Merger and acquisition expense (after-tax) * — % 0.04 % 0.07 % 0.02 % Operating return on average assets * 0.81 % 1.44 % 0.83 % 1.27 % Return on average tangible assets * 0.83 % 1.43 % 0.64 % 1.27 % Less: Security gains (after-tax) * — % — % 0.02 % — % Add: Day 1 PCSB CECL provision * — % — % 0.16 % — % Merger and acquisition expense (after-tax) * — % 0.04 % 0.07 % 0.02 % Operating return on average tangible assets * 0.83 % 1.47 % 0.85 % 1.29 % Return on average stockholders' equity * 7.78 % 12.29 % 5.95 % 10.84 % Less: Security gains (after-tax) * — % — % 0.16 % — % Add: Day 1 PCSB CECL provision * — % — % 1.53 % — % Merger and acquisition expense (after-tax) * — % 0.36 % 0.68 % 0.17 % Operating return on average stockholders' equity * 7.78 % 12.65 % 8.00 % 11.01 % Return on average tangible stockholders' equity * 10.09 % 14.72 % 7.76 % 12.98 % Less: Security gains (after-tax) * — % — % 0.20 % — % Add: Day 1 PCSB CECL provision * — % — % 1.99 % — % Merger and acquisition expense (after-tax) * — % 0.43 % 0.88 % 0.20 % Operating return on average tangible stockholders' equity * 10.09 % 15.15 % 10.43 % 13.18 % * Ratios at and for the three and nine months ended are annualized. At and for the Three Months Ended September 30,
2023June 30,
2023March 31,
2023December 31,
2022September 30,
2022(Dollars in Thousands) Net income, as reported $ 22,701 $ 21,850 $ 7,560 $ 29,695 $ 30,149 Average total assets $ 11,180,635 $ 11,272,672 $ 11,131,087 $ 8,857,631 $ 8,586,420 Less: Average goodwill and average identified intangible assets, net 268,199 270,147 278,135 162,266 162,387 Average tangible assets $ 10,912,436 $ 11,002,525 $ 10,852,952 $ 8,695,365 $ 8,424,033 Return on average tangible assets (annualized) 0.83 % 0.79 % 0.28 % 1.37 % 1.43 % Average total stockholders’ equity $ 1,167,727 $ 1,174,167 $ 1,159,635 $ 982,306 $ 981,379 Less: Average goodwill and average identified intangible assets, net 268,199 270,147 278,135 162,266 162,387 Average tangible stockholders’ equity $ 899,528 $ 904,020 $ 881,500 $ 820,040 $ 818,992 Return on average tangible stockholders’ equity (annualized) 10.09 % 9.67 % 3.43 % 14.48 % 14.72 % Total stockholders’ equity $ 1,157,871 $ 1,162,308 $ 1,165,066 $ 992,125 $ 963,618 Less: Goodwill 241,222 241,222 241,222 160,427 160,427 Identified intangible assets, net 26,172 28,126 30,080 1,781 1,902 Tangible stockholders' equity $ 890,477 $ 892,960 $ 893,764 $ 829,917 $ 801,289 Total assets $ 11,180,555 $ 11,206,078 $ 11,522,485 $ 9,185,836 $ 8,695,708 Less: Goodwill 241,222 241,222 241,222 160,427 160,427 Identified intangible assets, net 26,172 28,126 30,080 1,781 1,902 Tangible assets $ 10,913,161 $ 10,936,730 $ 11,251,183 $ 9,023,628 $ 8,533,379 Tangible stockholders’ equity to tangible assets 8.16 % 8.16 % 7.94 % 9.20 % 9.39 % Tangible stockholders' equity $ 890,477 $ 892,960 $ 893,764 $ 829,917 $ 801,289 Number of common shares issued 96,998,075 96,998,075 96,998,075 85,177,172 85,177,172 Less: Treasury shares 7,350,981 7,734,891 7,734,891 7,731,445 7,730,945 Unallocated ESOP shares — — — — 4,833 Unvested restricted shares 780,859 598,049 598,049 601,495 601,995 Number of common shares outstanding 88,866,235 88,665,135 88,665,135 76,844,232 76,839,399 Tangible book value per common share $ 10.02 $ 10.07 $ 10.08 $ 10.80 $ 10.43 PDF Available: http://ml.globenewswire.com/Resource/Download/c6ac4fa8-5a96-44a5-8af8-720ca790c975