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Brookline Bancorp Announces Fourth Quarter Results

Net Income of $29.7 million, EPS of $0.39

/EIN News/ -- BOSTON, Jan. 25, 2023 (GLOBE NEWSWIRE) -- Brookline Bancorp, Inc. (NASDAQ: BRKL) (the “Company”) today announced net income of $29.7 million, or $0.39 per basic and diluted share, for the fourth quarter of 2022, compared to $30.1 million, or $0.39 per basic and diluted share, for the third quarter of 2022, and $28.5 million, or $0.37 per basic and diluted share, for the fourth quarter of 2021.

For the year ended December 31, 2022, the Company reported net income of $109.7 million, or $1.42 per basic and diluted share. This compared to $115.4 million, or $1.48 per basic and diluted share, for the year ended December 31, 2021.

Paul Perrault, Chairman and Chief Executive Officer, commented on the Company’s performance, “Brookline Bancorp had an excellent year in 2022. We again finished the year with exceptional loan growth and are well positioned as we look forward to 2023. We are pleased to welcome PCSB Bank to our family of banks and look forward to their contributions to our Company in the years to come. I would like to recognize the continued contributions of our colleagues to our Company in 2022."

BALANCE SHEET

Total assets at December 31, 2022 increased $526.8 million to $9.2 billion from $8.7 billion at September 30, 2022, and increased $619.9 million from $8.6 billion at December 31, 2021.

At December 31, 2022, total loans and leases were $7.6 billion, representing an increase of $223.1 million from September 30, 2022, and an increase of $489.9 million from December 31, 2021. The loan portfolio grew $223.1 million in the fourth quarter compared to growth of $129.4 million in the third quarter.

Total investment securities at December 31, 2022 decreased $18.9 million to $656.8 million from $675.7 million at September 30, 2022, and decreased $64.1 million from $720.9 million at December 31, 2021. Total cash and cash equivalents at December 31, 2022 increased $270.5 million to $383.0 million from $112.5 million at September 30, 2022, and increased $55.3 million from $327.7 million at December 31, 2021. As of December 31, 2022, total investment securities and total cash and cash equivalents represented 11.3 percent of total assets as compared to 9.1 percent and 12.2 percent as of September 30, 2022 and December 31, 2021, respectively.

Total deposits at December 31, 2022 decreased $213.5 million to $6.5 billion from $6.7 billion at September 30, 2022 and decreased $527.8 million from $7.0 billion at December 31, 2021.

Total borrowed funds at December 31, 2022 increased $673.9 million to $1.4 billion from $0.8 billion at September 30, 2022 and increased $1.0 billion from $0.4 billion at December 31, 2021.

The ratio of stockholders’ equity to total assets was 10.76 percent at December 31, 2022, as compared to 11.08 percent at September 30, 2022, and 11.57 percent at December 31, 2021. The ratio of tangible stockholders’ equity to tangible assets (non-GAAP) was 9.16 percent at December 31, 2022, as compared to 9.39 percent at September 30, 2022, and 9.87 percent at December 31, 2021. Tangible book value per common share (non-GAAP) increased $0.37 from $10.43 at September 30, 2022 to $10.80 at December 31, 2022, compared to $10.73 at December 31, 2021.

NET INTEREST INCOME

Net interest income increased $2.0 million to $80.0 million during the fourth quarter of 2022 from $78.0 million for the quarter ended September 30, 2022. The net interest margin increased 1 basis point to 3.81 percent for the three months ended December 31, 2022 from 3.80 percent for the three months ended September 30, 2022.

NON-INTEREST INCOME

Total non-interest income for the quarter ended December 31, 2022 increased $2.3 million to $9.1 million from $6.8 million for the quarter ended September 30, 2022. The increase was primarily driven by increases of $1.7 million in gain on sales of loans and leases, $0.5 million in other non-interest income, $0.3 million in gain on securities, net, $0.2 million in deposit fees, and $0.1 million in loan fees, partially offset by a decrease of $0.6 million in loan level derivative income, net.

PROVISION FOR CREDIT LOSSES

The Company recorded a provision for credit losses of $5.7 million for the quarter ended December 31, 2022, compared to $2.8 million for the quarter ended September 30, 2022. The $2.9 million increase in provision for credit losses, or 3 cents per share after tax, was due to strong growth in loans and commitments.

Total net charge-offs for the fourth quarter of 2022 were $0.3 million compared to total net recoveries of $0.2 million in the third quarter of 2022. The increase was primarily driven by an increase in net charge-offs on equipment financing loans of $0.5 million. The ratio of net loan and lease charge-offs to average loans and leases on an annualized basis increased to 2 basis points for the fourth quarter of 2022 from a negative 1 basis point for the third quarter of 2022.

The allowance for loan and lease losses represented 1.29 percent of total loans and leases at December 31, 2022, compared to 1.27 percent at September 30, 2022, and 1.38 percent at December 31, 2021.

ASSET QUALITY

The ratio of total nonperforming loans and leases to total loans and leases was 0.19 percent at December 31, 2022 as compared to 0.24 percent at September 30, 2022. Total nonaccrual loans and leases decreased $2.8 million to $14.9 million at December 31, 2022 from $17.7 million at September 30, 2022. The ratio of nonperforming assets to total assets was 0.17 percent at December 31, 2022 as compared to 0.21 percent at September 30, 2022. Total nonperforming assets decreased $3.0 million to $15.3 million at December 31, 2022 from $18.3 million at September 30, 2022.

NON-INTEREST EXPENSE

Non-interest expense for the quarter ended December 31, 2022 increased $2.2 million to $47.2 million from $45.0 million for the quarter ended September 30, 2022. The increase was primarily driven by increases of $1.2 million in compensation and employee benefits, $0.7 million in equipment and data processing expense, $0.5 million in professional services expense, $0.3 million in FDIC insurance expense, $0.2 million in other non-interest expense, and $0.1 million in occupancy expense, partially offset by a decrease of $0.4 million in merger and acquisition expense and a decrease of $0.3 million in advertising and marketing expense.

PROVISION FOR INCOME TAXES

The effective tax rate was 17.8 percent and 21.6 percent for the three and twelve months ended December 31, 2022 compared to 18.7 percent for the three months ended September 30, 2022 and 25.9 percent and 25.3 percent for the three and twelve months ended December 31, 2021.

RETURNS ON AVERAGE ASSETS AND AVERAGE EQUITY

The annualized return on average assets decreased to 1.34 percent during the fourth quarter of 2022 compared to 1.40 percent for the third quarter of 2022; and was 1.27 percent for the year ended December 31, 2022, compared to 1.36 percent for the year ended December 31, 2021.

The annualized return on average tangible stockholders' equity decreased to 14.48 percent during the fourth quarter of 2022 compared to 14.72 percent for the third quarter of 2022; and was 13.35 percent for the year ended December 31, 2022 compared to 14.35 percent for the year ended December 31, 2021.

DIVIDEND DECLARED

The Company’s Board approved a dividend of $0.135 per share for the quarter ended December 31, 2022. The dividend will be paid on February 24, 2023 to stockholders of record on February 10, 2023.

PCSB ACQUISITION

On January 1, 2023, the Company completed its previously announced acquisition (the “merger”) of PCSB Financial Corporation (“PCSB”). Pursuant to the merger agreement, each share of PCSB common stock outstanding at the effective time of the merger was converted into the right to receive, at the holder’s election, either $22.00 in cash consideration or 1.3284 shares of Company common stock for each share of PCSB common stock, subject to allocation procedures to ensure that 60% of the outstanding shares of PCSB common stock was converted to Company common stock. PCSB’s bank subsidiary, PCSB Bank, now operates as a separate subsidiary of the Company and has 15 banking offices throughout the Lower Hudson Valley of New York State.

CONFERENCE CALL

The Company will conduct a conference call/webcast at 1:30 PM Eastern Time on Thursday, January 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/914981409. To listen to the call without access to the slides, please dial 844-200-6205 (United States) or 929-526-1599 (internationally) and ask for the Brookline Bancorp, Inc. call (Access Code 718736). A recording 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 929-458-6194 (internationally) and entering the passcode: 959089.

ABOUT BROOKLINE BANCORP, INC.

Brookline Bancorp, Inc., a bank holding company with approximately $11 billion in assets and branch locations in eastern 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 Company provides commercial and retail banking services and 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) 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, the ongoing COVID-19 pandemic 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 At and for the Twelve Months Ended
  December 31, 2022 September 30, 2022 June 30,
2022
March 31, 2022 December 31, 2021 December 31, 2022 December 31, 2021
  (Dollars In Thousands Except per Share Data)
Earnings Data:              
Net interest income $ 80,030   $ 78,026   $ 71,867   $ 69,848   $ 71,461   $ 299,771   $ 282,373  
Provision (credit) for credit losses   5,725     2,835     227     (160 )   751     8,627     (7,837 )
Non-interest income   9,056     6,834     6,928     5,529     10,699     28,347     26,989  
Non-interest expense   47,225     44,959     44,871     42,487     42,909     179,542     162,608  
Income before provision for income taxes   36,136     37,066     33,697     33,050     38,500     139,949     154,591  
Net income   29,695     30,149     25,195     24,705     28,545     109,744     115,440  
               
Performance Ratios:              
Net interest margin (1)   3.81 %   3.80 %   3.56 %   3.49 %   3.52 %   3.67 %   3.49 %
Interest-rate spread (1)   3.35 %   3.58 %   3.41 %   3.31 %   3.42 %   3.40 %   3.32 %
Return on average assets (annualized)   1.34 %   1.40 %   1.18 %   1.16 %   1.35 %   1.27 %   1.36 %
Return on average tangible assets (annualized) (non-GAAP)   1.37 %   1.43 %   1.21 %   1.18 %   1.38 %   1.30 %   1.38 %
Return on average stockholders' equity (annualized)   12.09 %   12.29 %   10.32 %   9.91 %   11.56 %   11.15 %   11.93 %
Return on average tangible stockholders' equity (annualized) (non-GAAP)   14.48 %   14.72 %   12.39 %   11.84 %   13.84 %   13.35 %   14.35 %
Efficiency ratio (2)   53.01 %   52.98 %   56.95 %   56.37 %   52.23 %   54.72 %   52.56 %
               
Per Common Share Data:              
Net income — Basic $ 0.39   $ 0.39   $ 0.33   $ 0.32   $ 0.37   $ 1.42   $ 1.48  
Net income — Diluted   0.39     0.39     0.33     0.32     0.37     1.42     1.48  
Cash dividends declared   0.135     0.135     0.130     0.130     0.125     0.530     0.490  
Book value per share (end of period)   12.91     12.54     12.63     12.65     12.82     12.91     12.82  
Tangible book value per common share (end of period) (non-GAAP)   10.80     10.43     10.51     10.56     10.73     10.80     10.73  
Stock price (end of period)   14.15     11.65     13.31     15.82     16.19     14.15     16.19  
               
Balance Sheet:              
Total assets $ 9,222,553   $ 8,695,708   $ 8,514,230   $ 8,633,736   $ 8,602,622   $ 9,222,553   $ 8,602,622  
Total loans and leases   7,644,388     7,421,304     7,291,912     7,223,130     7,154,457     7,644,388     7,154,457  
Total deposits   6,522,146     6,735,605     6,894,457     7,094,378     7,049,906     6,522,146     7,049,906  
Total stockholders’ equity   992,125     963,618     968,496     981,935     995,342     992,125     995,342  
               
Asset Quality:              
Nonperforming assets $ 15,302   $ 18,312   $ 21,259   $ 26,506   $ 33,177   $ 15,302   $ 33,177  
Nonperforming assets as a percentage of total assets   0.17 %   0.21 %   0.25 %   0.31 %   0.39 %   0.17 %   0.39 %
Allowance for loan and lease losses $ 98,482   $ 94,169   $ 93,188   $ 95,463   $ 99,084   $ 98,482   $ 99,084  
Allowance for loan and lease losses as a percentage of total loans and leases   1.29 %   1.27 %   1.28 %   1.32 %   1.38 %   1.29 %   1.38 %
Net loan and lease charge-offs (recoveries) $ 310   $ (179 ) $ 1,242   $ 1,947   $ 2,124   $ 3,320   $ 5,734  
Net loan and lease charge-offs as a percentage of average loans and leases (annualized)   0.02 %   (0.01 )%   0.07 %   0.11 %   0.12 %   0.05 %   0.08 %
               
Capital Ratios:              
Stockholders’ equity to total assets   10.76 %   11.08 %   11.38 %   11.37 %   11.57 %   10.76 %   11.57 %
Tangible stockholders’ equity to tangible assets (non-GAAP)   9.16 %   9.39 %   9.65 %   9.67 %   9.87 %   9.16 %   9.87 %
               
(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, 2022 September 30, 2022 June 30, 2022 March 31, 2022 December 31, 2021
ASSETS (In Thousands Except Share Data)
Cash and due from banks $ 191,767 $ 65,638 $ 50,429 $ 89,032 $ 66,265
Short-term investments 191,192 46,873 39,900 204,239 261,472
Total cash and cash equivalents 382,959 112,511 90,329 293,271 327,737
Investment securities available-for-sale 656,766 675,692 717,818 730,562 720,866
Total investment securities 656,766 675,692 717,818 730,562 720,866
Loans and leases:          
Commercial real estate loans 4,404,148 4,269,512 4,225,754 4,235,325 4,103,040
Commercial loans and leases 2,016,499 1,933,645 1,860,182 1,800,383 1,887,136
Consumer loans 1,223,741 1,218,147 1,205,976 1,187,422 1,164,281
Total loans and leases 7,644,388 7,421,304 7,291,912 7,223,130 7,154,457
Allowance for loan and lease losses (98,482) (94,169) (93,188) (95,463) (99,084)
Net loans and leases 7,545,906 7,327,135 7,198,724 7,127,667 7,055,373
Restricted equity securities 71,307 44,760 35,406 29,066 28,981
Premises and equipment, net of accumulated depreciation 71,391 69,912 69,557 69,365 70,359
Right-of-use asset operating leases 19,484 18,614 18,226 19,571 20,508
Deferred tax asset 52,237 56,894 50,736 46,886 38,987
Goodwill 160,427 160,427 160,427 160,427 160,427
Identified intangible assets, net of accumulated amortization 1,781 1,902 2,022 2,142 2,276
Other real estate owned and repossessed assets 408 591 507 990 718
Other assets 259,887 227,270 170,478 153,789 176,390
Total assets $ 9,222,553 $ 8,695,708 $ 8,514,230 $ 8,633,736 $ 8,602,622
LIABILITIES AND STOCKHOLDERS' EQUITY          
Deposits:          
Demand checking accounts $ 1,802,518 $ 1,848,562 $ 1,845,365 $ 1,903,331 $ 1,888,462
NOW accounts 544,118 597,870 628,791 627,904 604,097
Savings accounts 762,271 824,789 894,926 967,183 915,804
Money market accounts 2,174,952 2,405,680 2,402,992 2,432,377 2,358,306
Certificate of deposit accounts 928,143 924,771 1,006,786 1,048,036 1,117,695
Brokered deposit accounts 310,144 133,933 115,597 115,547 165,542
Total deposits 6,522,146 6,735,605 6,894,457 7,094,378 7,049,906
Borrowed funds:          
Advances from the FHLBB 1,237,823 557,895 307,967 201,236 147,907
Subordinated debentures and notes 84,044 84,008 83,970 83,934 83,897
Other borrowed funds 110,785 116,865 86,263 107,727 125,517
Total borrowed funds 1,432,652 758,768 478,200 392,897 357,321
Operating lease liabilities 19,484 18,614 18,226 19,571 20,508
Mortgagors’ escrow accounts 5,607 5,785 5,771 5,780 6,296
Reserve for unfunded credits 20,602 19,555 17,511 16,305 14,794
Accrued expenses and other liabilities 229,937 193,763 131,569 122,870 158,455
Total liabilities 8,230,428 7,732,090 7,545,734 7,651,801 7,607,280
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 85,177,172 shares issued, respectively 852 852 852 852 852
Additional paid-in capital 736,074 735,119 738,544 737,658 736,826
Retained earnings, partially restricted 412,019 392,779 372,677 357,576 342,639
Accumulated other comprehensive income (61,947) (70,227) (44,977) (29,322) (110)
Treasury stock, at cost;          
7,731,445 shares, 7,730,945 shares, 7,995,888 shares, 7,037,464 shares, and 7,037,464 shares, respectively (94,873) (94,866) (98,525) (84,718) (84,718)
Unallocated common stock held by the Employee Stock Ownership Plan;          
0 shares, 4,833 shares, 11,442 shares, 18,051 shares, and 24,660 shares, respectively 0 (39) (75) (111) (147)
Total stockholders' equity 992,125 963,618 968,496 981,935 995,342
Total liabilities and stockholders' equity $ 9,222,553 $ 8,695,708 $ 8,514,230 $ 8,633,736 $ 8,602,622
           


BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Consolidated Statements of Income (Unaudited)
 
  Three Months Ended
  December 31, 2022 September 30, 2022   June 30, 2022 March 31, 2022 December 31, 2021
  (In Thousands Except Share Data)
Interest and dividend income:          
Loans and leases $ 98,386 $ 84,375 $ 74,287 $ 71,721   $ 73,560  
Debt securities   3,497   3,337   3,249   2,996     2,972  
Marketable and restricted equity securities   766   467   337   328     325  
Short-term investments   754   464   156   66     88  
Total interest and dividend income   103,403   88,643   78,029   75,111     76,945  
Interest expense:          
Deposits   14,185   7,354   4,282   3,771     4,055  
Borrowed funds   9,188   3,263   1,880   1,492     1,429  
Total interest expense   23,373   10,617   6,162   5,263     5,484  
Net interest income   80,030   78,026   71,867   69,848     71,461  
Provision (credit) for credit losses   5,725   2,835   227   (160 )   751  
Net interest income after provision for credit losses   74,305   75,191   71,640   70,008     70,710  
Non-interest income:          
Deposit fees   2,916   2,759   2,744   2,500     2,653  
Loan fees   446   349   666   747     448  
Loan level derivative income, net   670   1,275   1,615   686     3,981  
Gain (loss) on investment securities, net   321           (32 )
Gain on sales of loans and leases held-for-sale   2,612   889   291   344     1,933  
Other   2,091   1,562   1,612   1,252     1,716  
Total non-interest income   9,056   6,834   6,928   5,529     10,699  
Non-interest expense:          
Compensation and employee benefits   29,525   28,306   28,772   26,884     28,598  
Occupancy   4,005   3,906   3,807   4,284     3,558  
Equipment and data processing   5,758   5,066   4,931   5,078     4,576  
Professional services   1,546   1,069   1,219   1,226     1,151  
FDIC insurance   1,001   709   739   728     617  
Advertising and marketing   1,052   1,337   1,319   1,272     880  
Amortization of identified intangible assets   120   120   120   134     208  
Merger and acquisition expense   641   1,073   535        
Other   3,577   3,373   3,429   2,881     3,321  
Total non-interest expense   47,225   44,959   44,871   42,487     42,909  
Income before provision for income taxes   36,136   37,066   33,697   33,050     38,500  
Provision for income taxes   6,441   6,917   8,502   8,345     9,955  
Net income $ 29,695 $ 30,149 $ 25,195 $ 24,705   $ 28,545  
Earnings per common share:          
Basic $ 0.39 $ 0.39 $ 0.33 $ 0.32   $ 0.37  
Diluted $ 0.39 $ 0.39 $ 0.33 $ 0.32   $ 0.37  
Weighted average common shares outstanding during the period:        
Basic   76,841,655   76,779,038   77,091,013   77,617,227     77,610,608  
Diluted   77,065,076   77,007,971   77,419,288   77,926,822     77,864,097  
Dividends paid per common share $ 0.135 $ 0.130 $ 0.130 $ 0.125   $ 0.125  
           


BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Consolidated Statements of Income (Unaudited)
   
  Twelve Months Ended December 31,
    2022   2021  
  (In Thousands Except Share Data)
Interest and dividend income:    
Loans and leases $ 328,769 $ 297,927  
Debt securities   13,079   12,178  
Marketable and restricted equity securities   1,898   1,172  
Short-term investments   1,440   252  
Total interest and dividend income   345,186   311,529  
Interest expense:    
Deposits   29,592   20,713  
Borrowed funds   15,823   8,443  
Total interest expense   45,415   29,156  
Net interest income   299,771   282,373  
Provision (credit) for credit losses   8,627   (7,837 )
Net interest income after provision for credit losses   291,144   290,210  
Non-interest income:    
Deposit fees   10,919   10,578  
Loan fees   2,208   2,095  
Loan level derivative income, net   4,246   4,680  
Gain (loss) on investment securities, net   321   (38 )
Gain on sales of loans and leases held-for-sale   4,136   3,737  
Other   6,517   5,937  
Total non-interest income   28,347   26,989  
Non-interest expense:    
Compensation and employee benefits   113,487   106,786  
Occupancy   16,002   14,961  
Equipment and data processing   20,833   18,322  
Professional services   5,060   4,694  
FDIC insurance   3,177   2,980  
Advertising and marketing   4,980   4,167  
Amortization of identified intangible assets   494   876  
Merger and acquisition expense   2,249    
Other   13,260   9,822  
Total non-interest expense   179,542   162,608  
Income before provision for income taxes   139,949   154,591  
Provision for income taxes   30,205   39,151  
Net income $ 109,744 $ 115,440  
Earnings per common share:    
Basic $ 1.42 $ 1.48  
Diluted $ 1.42 $ 1.48  
Weighted average common shares outstanding during the period:  
Basic   77,079,278   77,974,851  
Diluted   77,351,834   78,243,416  
Dividends paid per common share $ 0.520 $ 0.480  
     


BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Asset Quality Analysis (Unaudited)
 
  At and for the Three Months Ended
  December 31, 2022 September 30, 2022   June 30, 2022   March 31, 2022 December 31, 2021
  (Dollars in Thousands)
NONPERFORMING ASSETS:          
Loans and leases accounted for on a nonaccrual basis:          
Commercial real estate mortgage $ 607   $ 3,136   $ 6,470   $ 8,313   $ 10,848  
Construction   707                  
Total commercial real estate loans   1,314     3,136     6,470     8,313     10,848  
           
Commercial   464     618     892     1,366     2,318  
Equipment financing   9,653     10,544     10,183     11,685     15,014  
Condominium association   58     64     71     77     84  
Total commercial loans and leases   10,175     11,226     11,146     13,128     17,416  
           
Residential mortgage   2,680     2,741     2,412     3,394     3,909  
Home equity   723     616     721     680     285  
Other consumer   2     2     3     1     1  
Total consumer loans   3,405     3,359     3,136     4,075     4,195  
           
Total nonaccrual loans and leases   14,894     17,721     20,752     25,516     32,459  
           
Other repossessed assets   408     591     507     990     718  
Total nonperforming assets $ 15,302   $ 18,312   $ 21,259   $ 26,506   $ 33,177  
           
Loans and leases past due greater than 90 days and still accruing $ 33   $ 9,583   $ 266   $ 4   $ 1  
           
Troubled debt restructurings on accrual   16,385     9,728     11,524     10,858     12,580  
Troubled debt restructurings on nonaccrual   3,527     4,449     5,097     5,189     6,709  
Total troubled debt restructurings $ 19,912   $ 14,177   $ 16,621   $ 16,047   $ 19,289  
           
Nonperforming loans and leases as a percentage of total loans and leases   0.19 %   0.24 %   0.28 %   0.35 %   0.45 %
Nonperforming assets as a percentage of total assets   0.17 %   0.21 %   0.25 %   0.31 %   0.39 %
           
PROVISION AND ALLOWANCE FOR LOAN AND LEASE LOSSES:      
Allowance for loan and lease losses at beginning of period $ 94,169   $ 93,188   $ 95,463   $ 99,084   $ 102,515  
Charge-offs   (658 )   (598 )   (1,533 )   (2,344 )   (2,562 )
Recoveries   348     777     291     397     438  
Net (charge-offs) recoveries   (310 )   179     (1,242 )   (1,947 )   (2,124 )
Provision (credit) for loan and lease losses excluding unfunded commitments *   4,623     802     (1,033 )   (1,674 )   (1,307 )
Allowance for loan and lease losses at end of period $ 98,482   $ 94,169   $ 93,188   $ 95,463   $ 99,084  
           
Allowance for loan and lease losses as a percentage of total loans and leases   1.29 %   1.27 %   1.28 %   1.32 %   1.38 %
           
NET CHARGE-OFFS (RECOVERIES):          
Commercial real estate loans $ (6 ) $ (6 ) $ (6 ) $ 31   $  
Commercial loans and leases   320     (179 )   1,254     1,948     2,143  
Consumer loans   (4 )   6     (6 )   (32 )   (19 )
Total net charge-offs (recoveries) $ 310   $ (179 ) $ 1,242   $ 1,947   $ 2,124  
           
Net loan and lease charge-offs as a percentage of average loans and leases (annualized)   0.02 %   (0.01 )%   0.07 %   0.11 %   0.12 %
           
*Provision for loan and lease losses does not include provision of $1.0 million, $2.0 million, $1.2 million, $1.5 million, and $2.1 million for credit losses on unfunded commitments during the three months ended December 31, 2022, September 30, 2022, June 30, 2022, March 31, 2022, and December 31, 2021 respectively.          
           



BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Average Yields / Costs (Unaudited)
 
  Three Months Ended
  December 31, 2022 September 30, 2022 December 31, 2021
  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) $ 665,969 $ 3,497 2.10 % $ 714,226 $ 3,337 1.87 % $ 727,734 $ 2,972 1.63 %
Marketable and restricted equity securities (2)   52,093   766 5.88 %   36,525   467 5.12 %   27,019   325 4.81 %
Short-term investments   60,385   754 5.00 %   66,257   464 2.80 %   224,573   88 0.16 %
Total investments   778,447   5,017 2.58 %   817,008   4,268 2.09 %   979,326   3,385 1.38 %
Loans and Leases:                  
Commercial real estate loans (3)   4,341,929   53,088 4.78 %   4,239,155   44,729 4.13 %   3,996,647   35,762 3.50 %
Commercial loans (3)   797,312   10,541 5.18 %   731,095   8,492 4.55 %   820,932   10,146 4.84 %
Equipment financing (3)   1,200,911   20,816 6.93 %   1,157,829   19,042 6.58 %   1,092,457   18,175 6.65 %
Residential mortgage loans (3)   842,860   8,051 3.82 %   826,969   7,560 3.66 %   796,326   6,785 3.41 %
Other consumer loans (3)   382,196   5,940 6.15 %   379,999   4,605 4.80 %   368,087   2,751 2.96 %
Total loans and leases   7,565,208   98,436 5.20 %   7,335,047   84,428 4.60 %   7,074,449   73,619 4.16 %
Total interest-earning assets   8,343,655   103,453 4.96 %   8,152,055   88,696 4.35 %   8,053,775   77,004 3.82 %
Non-interest-earning assets   513,976       434,365       408,456    
Total assets $ 8,857,631     $ 8,586,420     $ 8,462,231    
                   
Liabilities and Stockholders' Equity:                  
Interest-bearing liabilities:                  
Deposits:                  
NOW accounts $ 583,499   257 0.18 % $ 607,210   579 0.38 % $ 528,335   101 0.08 %
Savings accounts   787,021   1,155 0.58 %   881,988   664 0.30 %   897,821   219 0.10 %
Money market accounts   2,282,217   7,711 1.34 %   2,423,920   4,038 0.66 %   2,430,496   1,615 0.26 %
Certificates of deposit   922,250   2,865 1.23 %   964,112   1,803 0.74 %   1,129,645   2,072 0.73 %
Brokered deposit accounts   218,188   2,197 3.99 %   117,058   270 0.92 %   116,611   48 0.16 %
Total interest-bearing deposits   4,793,175   14,185 1.17 %   4,994,288   7,354 0.58 %   5,102,908   4,055 0.32 %
Borrowings:                  
Advances from the FHLBB   736,652   6,979 3.71 %   331,840   1,700 2.00 %   76,786   117 0.59 %
Subordinated debentures and notes   84,025   1,332 6.34 %   83,989   1,295 6.17 %   83,878   1,241 5.92 %
Other borrowed funds   148,195   877 2.35 %   89,019   268 1.20 %   112,137   71 0.25 %
Total borrowings   968,872   9,188 3.71 %   504,848   3,263 2.53 %   272,801   1,429 2.05 %
Total interest-bearing liabilities   5,762,047   23,373 1.61 %   5,499,136   10,617 0.77 %   5,375,709   5,484 0.40 %
Non-interest-bearing liabilities:                  
Demand checking accounts   1,843,780       1,908,459       1,892,763    
Other non-interest-bearing liabilities   269,498       197,446       206,237    
Total liabilities   7,875,325       7,605,041       7,474,709    
Stockholders’ equity   982,306       981,379       987,522    
Total liabilities and equity $ 8,857,631     $ 8,586,420     $ 8,462,231    
Net interest income (tax-equivalent basis) /Interest-rate spread (4)     80,080 3.35 %     78,079 3.58 %     71,520 3.42 %
Less adjustment of tax-exempt income     50       53       59  
Net interest income   $ 80,030     $ 78,026     $ 71,461  
Net interest margin (5)     3.81 %     3.80 %     3.52 %
                   
(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, 2022 December 31, 2021
  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) $ 706,580 $ 13,079 1.85 % $ 729,147 $ 12,178 1.67 %
Marketable and restricted equity securities (2)   36,813   1,898 5.15 %   34,074   1,172 3.44 %
Short-term investments   104,288   1,440 1.38 %   217,784   252 0.12 %
Total investments   847,681   16,417 1.94 %   981,005   13,602 1.39 %
Loans and Leases:            
Commercial real estate loans (3)   4,238,960   172,811 4.02 %   3,854,357   139,451 3.57 %
Commercial loans (3)   744,972   34,105 4.52 %   1,020,627   47,647 4.61 %
Equipment financing (3)   1,148,673   75,767 6.60 %   1,081,287   71,906 6.65 %
Residential mortgage loans (3)   823,512   29,726 3.61 %   788,614   27,933 3.54 %
Other consumer loans (3)   376,292   16,569 4.40 %   369,326   11,209 3.03 %
Total loans and leases   7,332,409   328,978 4.49 %   7,114,211   298,146 4.19 %
Total interest-earning assets   8,180,090   345,395 4.22 %   8,095,216   311,748 3.85 %
Non-interest-earning assets   443,313       422,984    
Total assets $ 8,623,403     $ 8,518,200    
             
Liabilities and Stockholders' Equity:            
Interest-bearing liabilities:            
Deposits:            
NOW accounts $ 598,267   853 0.14 % $ 502,189   493 0.10 %
Savings accounts   882,881   2,228 0.25 %   793,141   950 0.12 %
Money market accounts   2,387,670   15,392 0.64 %   2,288,740   6,214 0.27 %
Certificates of deposit   998,580   8,210 0.82 %   1,210,451   11,758 0.97 %
Brokered deposit accounts   146,038   2,909 1.99 %   338,734   1,298 0.38 %
Total interest-bearing deposits   5,013,436   29,592 0.59 %   5,133,255   20,713 0.40 %
Borrowings:            
Advances from the FHLBB   340,569   9,355 2.71 %   232,175   3,302 1.40 %
Subordinated debentures and notes   83,971   5,133 6.11 %   83,821   4,967 5.93 %
Other borrowed funds   118,383   1,335 1.13 %   88,818   174 0.20 %
Total borrowings   542,923   15,823 2.87 %   404,814   8,443 2.06 %
Total interest-bearing liabilities   5,556,359   45,415 0.82 %   5,538,069   29,156 0.53 %
Non-interest-bearing liabilities:            
Demand checking accounts   1,879,620       1,787,959    
Other non-interest-bearing liabilities   203,187       224,634    
Total liabilities   7,639,166       7,550,662    
Stockholders’ equity   984,237       967,538    
Total liabilities and equity $ 8,623,403     $ 8,518,200    
Net interest income (tax-equivalent basis) /Interest-rate spread (4)     299,980 3.40 %     282,592 3.32 %
Less adjustment of tax-exempt income     209       219  
Net interest income   $ 299,771     $ 282,373  
Net interest margin (5)     3.67 %     3.49 %
             
(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,
          2022     2021     2022     2021  
Reconciliation Table - Non-GAAP Financial Information   (Dollars in Thousands Except Share Data)
             
Net income     $ 29,695   $ 28,545   $ 109,744   $ 115,440  
Less:              
Security gains (losses) (after-tax)   264     (24 )   252     (28 )
Add:              
Merger and acquisition expenses (after-tax)     527         1,763      
Operating earnings       $ 29,958   $ 28,569   $ 111,255   $ 115,468  
               
Operating earnings per common share:            
Basic       $ 0.39   $ 0.37   $ 1.44   $ 1.48  
Diluted         0.39     0.37     1.44     1.48  
               
Weighted average common shares outstanding during the period:          
Basic         76,841,655     77,610,608     77,079,278     77,974,851  
Diluted         77,065,076     77,864,097     77,351,834     78,243,416  
               
               
Return on average assets *       1.34 %   1.35 %   1.27 %   1.36 %
Less:              
Security gains (after-tax) *       0.01 %   %   %   %
Add:              
Merger and acquisition expenses (after-tax) *     0.02 %   %   0.02 %   %
Operating return on average assets *       1.35 %   1.35 %   1.29 %   1.36 %
               
               
Return on average tangible assets *       1.37 %   1.38 %   1.30 %   1.38 %
Less:              
Security gains (after-tax) *       0.01 %   %   %   %
Add:              
Merger and acquisition expenses (after-tax) *     0.02 %   %   0.02 %   %
Operating return on average tangible assets *       1.38 %   1.38 %   1.32 %   1.38 %
               
               
Return on average stockholders' equity *       12.09 %   11.56 %   11.15 %   11.93 %
Less:              
Security gains (losses) (after-tax) *       0.11 %   (0.01 )%   0.03 %   %
Add:              
Merger and acquisition expenses (after-tax) *     0.21 %   %   0.18 %   %
Operating return on average stockholders' equity *     12.19 %   11.57 %   11.30 %   11.93 %
               
               
Return on average tangible stockholders' equity *     14.48 %   13.84 %   13.35 %   14.35 %
Less:              
Security gains (losses) (after-tax) *       0.13 %   (0.01 )%   0.03 %   %
Add:              
Merger and acquisition expenses (after-tax) *     0.26 %   %   0.21 %   %
Operating return on average tangible stockholders' equity *     14.61 %   13.85 %   13.53 %   14.35 %
               
               
* Ratios at and for the three months ended are annualized.          
               
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, 2022 September 30, 2022 June 30,
2022
March 31,
2022
December 31,
2021
December 31,
2022
December 31,
2021
  (Dollars in Thousands)
               
Net income, as reported $ 29,695   $ 30,149   $ 25,195   $ 24,705   $ 28,545   $ 109,744   $ 115,440  
               
Average total assets $ 8,857,631   $ 8,586,420   $ 8,515,330   $ 8,531,043   $ 8,462,231   $ 8,623,403   $ 8,518,200  
Less: Average goodwill and average identified intangible assets, net   162,266     162,387     162,507     162,632     162,804     162,447     163,122  
Average tangible assets $ 8,695,365   $ 8,424,033   $ 8,352,823   $ 8,368,411   $ 8,299,427   $ 8,460,956   $ 8,355,078  
               
Return on average tangible assets (annualized)   1.37 %   1.43 %   1.21 %   1.18 %   1.38 %   1.30 %   1.38 %
               
Average total stockholders’ equity $ 982,306   $ 981,379   $ 976,167   $ 997,293   $ 987,522   $ 984,237   $ 967,538  
Less: Average goodwill and average identified intangible assets, net   162,266     162,387     162,507     162,632     162,804     162,447     163,122  
Average tangible stockholders’ equity $ 820,040   $ 818,992   $ 813,660   $ 834,661   $ 824,718   $ 821,790   $ 804,416  
               
Return on average tangible stockholders’ equity (annualized)   14.48 %   14.72 %   12.39 %   11.84 %   13.84 %   13.35 %   14.35 %
               
Total stockholders’ equity $ 992,125   $ 963,618   $ 968,496   $ 981,935   $ 995,342   $ 992,125   $ 995,342  
Less:              
Goodwill   160,427     160,427     160,427     160,427     160,427     160,427     160,427  
Identified intangible assets, net   1,781     1,902     2,022     2,142     2,276     1,781     2,276  
Tangible stockholders' equity $ 829,917   $ 801,289   $ 806,047   $ 819,366   $ 832,639   $ 829,917   $ 832,639  
               
Total assets $ 9,222,553   $ 8,695,708   $ 8,514,230   $ 8,633,736   $ 8,602,622   $ 9,222,553   $ 8,602,622  
Less:              
Goodwill   160,427     160,427     160,427     160,427     160,427     160,427     160,427  
Identified intangible assets, net   1,781     1,902     2,022     2,142     2,276     1,781     2,276  
Tangible assets $ 9,060,345   $ 8,533,379   $ 8,351,781   $ 8,471,167   $ 8,439,919   $ 9,060,345   $ 8,439,919  
               
Tangible stockholders’ equity to tangible assets   9.16 %   9.39 %   9.65 %   9.67 %   9.87 %   9.16 %   9.87 %
               
Tangible stockholders' equity $ 829,917   $ 801,289   $ 806,047   $ 819,366   $ 832,639   $ 829,917   $ 832,639  
               
Number of common shares issued   85,177,172     85,177,172     85,177,172     85,177,172     85,177,172     85,177,172     85,177,172  
Less:              
Treasury shares   7,731,445     7,730,945     7,995,888     7,037,464     7,037,464     7,731,445     7,037,464  
Unallocated ESOP shares   0     4,833     11,442     18,051     24,660     0     24,660  
Unvested restricted shares   601,495     601,995     497,297     500,098     500,098     601,495     500,098  
Number of common shares outstanding   76,844,232     76,839,399     76,672,545     77,621,559     77,614,950     76,844,232     77,614,950  
               
Tangible book value per common share $ 10.80   $ 10.43   $ 10.51   $ 10.56   $ 10.73   $ 10.80   $ 10.73  
               

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