Brookline Bancorp (BRKL) will acquire PCSB (PCSB) and its wholly owned subsidiary for approximately $313 million in cash and stock

Brookline Bancorp, Inc. (NASDAQ: BRKL) (“Brookline”) and PCSB Financial Corporation (NASDAQ: PCSB) (“PCSB”) announced today they have entered into a definitive merger agreement whereby Brookline will acquire PCSB and its wholly owned subsidiary, PCSB Bank for approximately $313 million in cash and stock. Following the transaction, PCSB Bank will operate as a separate bank subsidiary of Brookline.

Paul Perrault, Chairman and Chief Executive Officer of Brookline commented on the transaction, “I am pleased to announce the combination of PCSB and Brookline. This transaction represents a unique opportunity for Brookline to expand its banking operations into one of the country’s largest deposit markets through the acquisition of a complimentary commercial banking organization.” Mr. Perrault continued, “PCSB has a high-quality loan portfolio, deposit base and talented employees, making it an excellent addition to our organization.”

“We are truly excited to be merging with Brookline. Paul and his team have built an impressive regional financial services company with a bedrock culture of performance, service and support of their customers, employees and shareholders,” said Joseph D. Roberto, Chairman, President and Chief Executive Officer of PCSB. “Partnering with Brookline will allow PCSB to deliver even more value to our communities and customers as we continue to expand in the lower Hudson Valley.”

Under the terms of the merger agreement, stockholders of PCSB will receive, for each share of PCSB, at the holder’s election, either $22.00 in cash consideration or 1.3284 shares of Brookline common stock for each share of PCSB common stock, subject to allocation procedures to ensure 60% of the outstanding shares of PCSB common stock will be converted to Brookline common stock. The receipt of Brookline common stock by stockholders of PCSB is expected to be tax-free.

KEY FINANCIAL IMPACT HIGHLIGHTS

• The transaction is presently valued at approximately $313 million in the aggregate, or approximately $20.72 per PCSB share, based on Brookline’s common stock price of $14.96 at close on May 23rd, 2022.
• Anticipated double-digit EPS accretion of approximately 13% to Brookline’s earnings per share (on a fully phased-in basis), excluding the impact of expected revenue enhancement opportunities.
• Expected IRR of approximately 15%, exceeding Brookline’s cost of capital.
• Pro forma capital ratios of 8.6% TCE/TA and 13.0% Total Risk-Based Capital Ratio, estimated at close.
• Combined company total assets of $10.6 billion, loans of $8.5 billion, and deposits of $8.7 billion (as of March 31, 2022).

The combined organization will further establish Brookline as a premier commercial banking franchise in the Northeast with over $10 billion in assets, and will represent one of the few regional banks operating in the Boston, Providence and New York metropolitan markets. Brookline and PCSB have complementary business models focused on relationship-based CRE and C&I lending, which include an extensive suite of financial products and services.

Upon completion of the merger, PCSB Bank will retain its New York bank charter and Board of Directors and its headquarters will remain in Yorktown Heights. Brookline will select one PCSB director to join its Board of Directors. In addition, following the closing, Michael P. Goldrick, currently PCSB Bank’s Executive Vice President and Chief Lending Officer, will become PCSB Bank’s President and Chief Executive Officer.

The transaction has been unanimously approved by the Board of Directors of both companies and is expected to be completed in the second half of 2022, subject to approval by PCSB stockholders, as well as regulatory approvals and other customary closing conditions.

Brookline was advised in this transaction by Performance Trust Capital Partners, LLC as financial advisor and Goodwin Procter LLP as legal counsel. PCSB was advised by Piper Sandler & Co. as financial advisor and Luse Gorman, PC as legal counsel.

INVESTOR CONFERENCE CALL INFORMATION

Brookline will conduct a conference call/webcast to discuss the transaction at 10:30 a.m. Eastern Time on Tuesday, May 24, 2022. A copy of the Investor Presentation is available on Brookline’s website, www.brooklinebancorp.com. To listen to the call and view the Company’s Investor Presentation, please join the call via https://event.choruscall.com/mediaframe/webcast.html?webcastid=71uBgb4X. To listen to the call without access to the slides, interested parties may dial 844-200-6205 (United States) or 929-526-1599 (internationally) and ask for the Brookline Bancorp, Inc. conference call (Access Code 546153). 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 929-458-6194 (internationally) and entering the passcode: 030217.

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