Brookline Bancorp Announces Third Quarter Results

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Net Income Up 8.6% to $12.9 million, EPS of $0.18

October 21, 2015 5:14 PM EDT

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BOSTON, Oct. 21, 2015 /PRNewswire/ -- Brookline Bancorp, Inc. (NASDAQ: BRKL) (the "Company") today announced net income of $12.9 million, or $0.18 per basic and diluted share, for the third quarter of 2015, compared to $11.9 million, or $0.17 per basic and diluted share, for the second quarter of 2015.

Paul Perrault, President and Chief Executive Officer of the Company, stated: "We are pleased to report another strong quarter to our stockholders. The Company continues to have broad-based loan growth, solid returns and strong asset quality. Brookline Bancorp continues to execute on its strategy of high performance for both customers and stockholders."

BALANCE SHEET

Total assets of $5.8 billion at September 30, 2015 increased $56.6 million from June 30, 2015, and increased $38.6 million from December 31, 2014. The increase in total assets of 3.9 percent on an annualized basis during the third quarter of 2015 was primarily driven by increases in loans and leases, partly offset by decreases in cash and cash equivalents. The Company completed its effort to deploy excess liquidity generated by the sale of indirect automobile loans in March 2015. At September 30, 2015, total loans and leases were $4.8 billion, representing an increase of $99.6 million from June 30, 2015, and an increase of $6.5 million from December 31, 2014. During the third quarter of 2015, total loans and leases grew 8.4 percent on an annualized basis. Strong loan growth continued in the total commercial real estate and commercial loan and lease portfolios, which increased $90.4 million during the third quarter of 2015, or 9.5 percent on an annualized basis.

Cash, cash equivalents, and investment securities at September 30, 2015 decreased $46.0 million to $636.9 million, or 10.9 percent of total assets, as compared to $682.9 million, or 11.8 percent of total assets at June 30, 2015, and increased $22.9 million from $614.0 million, or 10.6 percent of total assets at December 31, 2014. The decrease during the third quarter of 2015 was primarily driven by the funding of loans.

Total deposits of $4.1 billion at September 30, 2015 increased $15.2 million from June 30, 2015 and increased $186.5 million from December 31, 2014. The increase during the third quarter of 2015 was primarily driven by an increase of $21.5 million in certificate of deposit accounts. Core deposits, which consist of demand checking, NOW, savings, and money market accounts, decreased slightly in the third quarter of 2015. The core deposit ratio also decreased slightly to 74.3 percent at September 30, 2015 from 74.7 percent at June 30, 2015 and from 76.1 percent at December 31, 2014. The average cost of deposits remained constant at 0.51 percent at September 30, 2015 and June 30, 2015.

Total borrowings at September 30, 2015 were $960.2 million, an increase of $22.6 million as compared to June 30, 2015. Total borrowings decreased $166.2 million as compared to December 31, 2014 as proceeds from the sale of indirect automobile loans were used to pay down short term borrowings.

The ratio of stockholders' equity to total assets was 11.36 percent at September 30, 2015, as compared to 11.30 percent at June 30, 2015 and 11.06% percent at December 31, 2014. The ratio of tangible stockholders' equity to tangible assets was 9.04 percent at September 30, 2015, as compared to 8.94 percent at June 30, 2015 and 8.68% percent at December 31, 2014.

NET INTEREST INCOME

Net interest income increased $1.4 million to $48.6 million during the third quarter of 2015 from the previous quarter. The net interest margin increased 5 basis points to 3.54 percent for the three months ended September 30, 2015. The increase in net interest income is a result of increased interest income from higher loan balances and an increase in dividend income from restricted equity securities.

PROVISION FOR LOAN AND LEASE LOSSES

The Company recorded a provision for loan and lease losses of $1.7 million for the quarter ended September 30, 2015, compared to $1.8 million from the previous quarter.

Net charge-offs increased $1.1 million to $1.6 million for the third quarter of 2015 from $0.5 million for the second quarter of 2015. The ratio of net charge-offs to average loans on an annualized basis increased to 13 basis points for the third quarter of 2015 from 4 basis points for the second quarter of 2015. The charge-offs on two relationships, both of which had specific reserves recorded in a prior period, contributed to the increase in net charge-offs for the third quarter.

The allowance for loan and lease losses represented 1.17 percent of total loans and leases at September 30, 2015, compared to 1.19 percent at June 30, 2015, and 1.11 percent at December 31, 2014. The allowance for loan and lease losses related to originated loans and leases as a percentage of originated loans and leases was 1.25 percent at September 30, 2015, compared to 1.27 percent at June 30, 2015 and 1.20 percent at December 31, 2014.

NON-INTEREST INCOME

Non-interest income of $4.8 million for the quarter ended September 30, 2015 remained consistent with the previous quarter.

NON-INTEREST EXPENSE

Non-interest expense for the quarter ended September 30, 2015 increased $0.8 million to $31.3 million from $30.5 million for the previous quarter.

PROVISION FOR INCOME TAXES

The effective tax rate decreased by 2.3 percentage points, from 36.2 percent for the quarter ended June 30, 2015 to 33.9 percent for the quarter ended September 30, 2015. The effective tax rate was 35.5 percent for the nine months ended September 30, 2015.

RETURNS ON AVERAGE ASSETS AND AVERAGE EQUITY

The return on average assets increased during the third quarter of 2015 to 0.89 percent at September 30, 2015 from 0.82 percent for the second quarter of 2015. The return on average tangible assets increased to 0.91 percent for the third quarter of 2015 from 0.85 percent for the second quarter of 2015.

The return on average stockholders' equity increased during the third quarter of 2015 to 7.81 percent from 7.24 percent for the second quarter of 2015. The return on average tangible stockholders' equity increased to 10.11 percent for the third quarter of 2015 from 9.40 percent for the second quarter of 2015.

ASSET QUALITY

Nonperforming loans and leases decreased $3.7 million during the third quarter of 2015 to $19.7 million at September 30, 2015 from the previous quarter. The ratio of nonperforming loans and leases to total loans and leases decreased to 0.41 percent at September 30, 2015 from the previous quarter. Nonperforming assets also decreased $4.8 million during the third quarter of 2015 to $21.0 million, or 0.36 percent of total assets, at September 30, 2015.

DIVIDEND DECLARED

The Company's Board of Directors approved a dividend of $0.09 per share. The dividend will be paid on November 20, 2015 to stockholders of record on November 6, 2015.

CONFERENCE CALL

The Company will conduct a conference call/webcast at 1:30 PM Eastern Standard Time on Thursday, October 22, 2015 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 10073581. The call will be available live and in a recorded version on the Company's website under "Investor Relations" at www.brooklinebancorp.com.

ABOUT BROOKLINE BANCORP, INC.

Brookline Bancorp, Inc., a bank holding company with approximately $5.8 billion in assets and branch locations in Massachusetts and Rhode Island, is headquartered in Boston, Massachusetts and operates as the holding company for Brookline Bank, Bank Rhode Island, and First Ipswich Bank. The Company provides commercial and retail banking services and cash management and investment services to customers throughout Central New England. More information about Brookline Bancorp, Inc. and its banks can be found at the following websites: www.brooklinebank.com, www.bankri.com, and www.firstipswich.com.

FORWARD-LOOKING STATEMENTS

Certain statements contained in this press release that are not historical facts may constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and are intended to be covered by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve risks and uncertainties. The Company's actual results could differ materially from those projected in the forward-looking statements as a result of, among others, the risks outlined in the Company's Annual Report on Form 10-K, as updated by its Quarterly Reports on Form 10-Q and other filings submitted to the Securities and Exchange Commission ("SEC"). The Company does not undertake any obligation to update any forward-looking statement to reflect circumstances or events that occur after the date the forward-looking statements are made.

BASIS OF PRESENTATION

The Company's consolidated financial statements have been prepared in conformity with generally accepted accounting principles ("GAAP") as set forth by the Financial Accounting Standards Board in its Accounting Standards Codification and through the rules and interpretive releases of the SEC under the authority of federal securities laws. Certain amounts previously reported have been reclassified to conform to the current period's presentation.

NON-GAAP FINANCIAL MEASURES

The Company uses certain non-GAAP financial measures, such as the allowance for loan and lease losses related to originated loans and leases as a percentage of originated loans and leases, tangible book value per common share, 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 and Treasurer (617) 425-5331 [email protected]

BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Selected Financial Highlights (Unaudited)

	At and for the Three Months Ended
	September 30, 2015			June 30, 2015			March 31, 2015			December 31, 2014			September 30, 2014
	(Dollars In Thousands Except Share Data)
Earnings Data:
Net interest income	$	48,587		$	47,172		$	48,528		$	47,576		$	47,324
Provision for credit losses	1,755			1,913			2,263			1,724			2,034
Non-interest income*	4,784			4,867			4,470			4,541			6,189
Non-interest expense	31,270			30,452			31,326			32,455			31,914
Income before provision for income taxes*	20,346			19,674			19,409			17,938			19,565
Net income attributable to Brookline Bancorp, Inc.*	12,888			11,865			11,703			10,875			11,740

Performance Ratios:
Net interest margin (1)	3.54		%	3.49		%	3.57		%	3.49		%	3.53		%
Interest-rate spread (1)	3.41		%	3.32		%	3.36		%	3.37		%	3.43		%
Return on average assets*	0.89		%	0.82		%	0.80		%	0.76		%	0.83		%
Return on average tangible assets (non-GAAP)*	0.91		%	0.85		%	0.82		%	0.78		%	0.85		%
Return on average stockholders' equity*	7.81		%	7.24		%	7.22		%	6.79		%	7.41		%
Return on average tangible stockholders' equity (non-GAAP)*	10.11		%	9.40		%	9.41		%	8.90		%	9.77		%
Efficiency ratio*	58.59		%	58.52		%	59.11		%	62.27		%	59.64		%

Per Common Share Data:
Net income — Basic*	$	0.18		$	0.17		$	0.17		$	0.16		$	0.17
Net income — Diluted*	0.18			0.17			0.17			0.16			0.17
Cash dividends declared	0.090			0.090			0.085			0.085			0.085
Book value per share (end of period)*	9.45			9.33			9.30			9.16			9.05
Tangible book value per share (end of period) (non-GAAP)*	7.33			7.19			7.15			7.00			6.87
Stock price (end of period)	10.14			11.29			10.05			10.03			8.55

Balance Sheet:
Total assets*	$	5,839,529		$	5,782,934		$	5,755,146		$	5,800,948		$	5,718,944
Total loans and leases	4,829,152			4,729,581			4,634,594			4,822,607			4,736,028
Total deposits	4,144,577			4,129,408			4,114,795			3,958,106			3,889,204
Brookline Bancorp, Inc. stockholders' equity*	663,468			653,516			651,319			641,818			633,379

Asset Quality:
Nonperforming assets	$	21,025		$	25,874		$	24,757		$	15,170		$	19,785
Nonperforming assets as a percentage of total assets*	0.36		%	0.45		%	0.43		%	0.26		%	0.35		%
Allowance for loan and lease losses	$	56,472		$	56,398		$	55,106		$	53,659		$	52,822
Allowance for loan and lease losses as a percentage of total loans and leases	1.17		%	1.19		%	1.19		%	1.11		%	1.12		%
Net loan and lease charge-offs	$	1,599		$	501		$	854		$	874		$	793
Net loan and lease charge-offs as a percentage of average loans and leases (annualized)	0.13		%	0.04		%	0.07		%	0.07		%	0.07		%

Capital Ratios:
Stockholders' equity to total assets*	11.36		%	11.30		%	11.32		%	11.06		%	11.08		%
Tangible stockholders' equity to tangible assets (non-GAAP)*	9.04		%	8.94		%	8.93		%	8.68		%	8.64		%

(1) Calculated on a fully tax-equivalent basis.
(*) Previously reported amounts prior to January 1, 2015 have been restated to reflect a retrospective change in accounting principle for investments in qualified affordable housing projects, in accordance with ASU 2014-01.

BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Consolidated Balance Sheets (Unaudited)
	September 30, 2015		June 30, 2015		March 31, 2015		December 31, 2014		September 30, 2014
*ASSETS*	(In Thousands Except Share Data)
Cash and due from banks	$	27,299	$	43,363	$	35,118	$	36,893	$	37,237
Short-term investments	19,745		48,513		162,003		25,830		50,901
Total cash and cash equivalents	47,044		91,876		197,121		62,723		88,138
Investment securities available-for-sale	526,764		530,476		565,115		550,761		527,516
Investment securities held-to-maturity	63,097		60,511		500		500		500
Total investment securities	589,861		590,987		565,615		551,261		528,016
Loans and leases held-for-sale	10,992		12,482		787		1,537		464
Loans and leases:
Commercial real estate loans:
Commercial real estate mortgage	1,810,550		1,758,281		1,714,140		1,680,082		1,610,592
Multi-family mortgage	614,560		627,571		652,500		639,706		630,852
Construction	138,261		127,506		134,247		148,013		161,279
Total commercial real estate loans	2,563,371		2,513,358		2,500,887		2,467,801		2,402,723
Commercial loans and leases:
Commercial	580,711		578,548		560,344		514,077		495,712
Equipment financing	684,331		648,447		614,301		601,424		576,541
Condominium association	57,562		55,185		52,707		51,593		49,600
Total commercial loans and leases	1,322,604		1,282,180		1,227,352		1,167,094		1,121,853
Indirect automobile loans	16,294		19,377		23,335		316,987		353,263
Consumer loans:
Residential mortgage	606,063		603,073		578,994		571,920		570,128
Home equity	308,371		299,396		292,198		287,058		274,762
Other consumer	12,449		12,197		11,828		11,747		13,299
Total consumer loans	926,883		914,666		883,020		870,725		858,189
Total loans and leases	4,829,152		4,729,581		4,634,594		4,822,607		4,736,028
Allowance for loan and lease losses	(56,472)		(56,398)		(55,106)		(53,659)		(52,822)
Net loans and leases	4,772,680		4,673,183		4,579,488		4,768,948		4,683,206
Restricted equity securities	75,553		75,553		74,804		74,804		74,804
Premises and equipment, net of accumulated depreciation	77,472		77,892		79,252		80,619		81,479
Deferred tax asset	25,730		28,466		25,834		27,687		29,168
Goodwill	137,890		137,890		137,890		137,890		137,890
Identified intangible assets, net of accumulated amortization	11,357		12,082		12,806		13,544		14,371
Other real estate owned and repossessed assets	1,301		2,412		2,023		1,456		2,463
Other assets*	89,649		80,111		79,526		80,479		78,945
Total assets*	$	5,839,529	$	5,782,934	$	5,755,146	$	5,800,948	$	5,718,944
*LIABILITIES AND STOCKHOLDERS' EQUITY*
Deposits:
Non-interest-bearing deposits:
Demand checking accounts	$	785,210	$	783,331	$	729,932	$	726,118	$	705,604
Interest-bearing deposits:
NOW accounts	254,767		247,172		237,200		235,063		220,766
Savings accounts	500,104		532,184		571,030		531,727		532,790
Money market accounts	1,540,104		1,523,798		1,525,053		1,518,490		1,522,612
Certificate of deposit accounts	1,064,392		1,042,923		1,051,580		946,708		907,432
Total interest-bearing deposits	3,359,367		3,346,077		3,384,863		3,231,988		3,183,600
Total deposits	4,144,577		4,129,408		4,114,795		3,958,106		3,889,204
Borrowed funds:
Advances from the FHLBB	848,913		823,452		806,491		1,004,026		1,027,211
Subordinated debentures and notes	82,873		82,850		82,806		82,763		82,763
Other borrowed funds	28,434		31,346		35,628		39,615		22,891
Total borrowed funds	960,220		937,648		924,925		1,126,404		1,132,865
Mortgagors' escrow accounts	7,996		7,494		8,414		8,501		8,757
Accrued expenses and other liabilities	57,996		49,792		51,046		61,332		50,430
Total liabilities	5,170,789		5,124,342		5,099,180		5,154,343		5,081,256
Stockholders' equity:
Brookline Bancorp, Inc. stockholders' equity:
Common stock, $0.01 par value; 200,000,000 shares authorized; 75,744,445 shares issued	757		757		757		757		757
Additional paid-in capital	616,252		618,044		617,845		617,475		616,997
Retained earnings, partially restricted*	102,684		96,128		90,589		84,860		79,959
Accumulated other comprehensive income (loss)	1,191		(1,775)		1,747		(1,622)		(4,681)
Treasury stock, at cost;
4,861,085 shares, 5,048,525 shares, 5,042,238 shares, 5,040,571 shares, and 5,035,956 shares, respectively	(56,202)		(58,372)		(58,301)		(58,282)		(58,228)
Unallocated common stock held by the Employee Stock Ownership Plan;
222,645 shares, 232,224 shares, 241,803 shares, 251,382 shares, and 261,453 shares respectively	(1,214)		(1,266)		(1,318)		(1,370)		(1,425)
Total Brookline Bancorp, Inc. stockholders' equity*	663,468		653,516		651,319		641,818		633,379
Noncontrolling interest in subsidiary	5,272		5,076		4,647		4,787		4,309
Total stockholders' equity*	668,740		658,592		655,966		646,605		637,688
Total liabilities and stockholders' equity*	$	5,839,529	$	5,782,934	$	5,755,146	$	5,800,948	$	5,718,944

(*) Previously reported amounts prior to January 1, 2015 have been restated to reflect a retrospective change in accounting principle for investments in qualified affordable housing projects, in accordance with ASU 2014-01.

BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Consolidated Statements of Income (Unaudited)
	Three Months Ended
	September 30, 2015		June 30, 2015		March 31, 2015		December 31, 2014		September 30, 2014
	(In Thousands Except Share Data)
Interest and dividend income:
Loans and leases	$	52,725	$	51,684	$	53,381	$	52,637	$	51,769
Debt securities	2,866		2,931		2,683		2,596		2,312
Marketable and restricted equity securities	1,079		491		524		564		520
Short-term investments	17		60		21		29		15
Total interest and dividend income	56,687		55,166		56,609		55,826		54,616
Interest expense:
Deposits	4,326		4,296		4,304		4,320		4,248
Borrowed funds	3,774		3,698		3,777		3,930		3,044
Total interest expense	8,100		7,994		8,081		8,250		7,292
Net interest income	48,587		47,172		48,528		47,576		47,324
Provision for credit losses	1,755		1,913		2,263		1,724		2,034
Net interest income after provision for credit losses	46,832		45,259		46,265		45,852		45,290
Non-interest income:
Deposit fees	2,261		2,195		2,066		2,177		2,352
Loan fees	205		271		342		286		227
Loan level derivative income, net	900		941		—		562		322
Gain/(loss) on sales of securities, net	—		—		—		78		—
Gain on sales of loans and leases held-for-sale	446		279		869		368		564
(Loss)/gain on sale/disposals of premises and equipment, net	—		—		—		—		(2)
Litigation settlement	—		—		—		—		1,412
Other	972		1,181		1,193		1,070		1,314
Total non-interest income*	4,784		4,867		4,470		4,541		6,189
Non-interest expense:
Compensation and employee benefits	17,875		17,085		17,524		18,216		18,258
Occupancy	3,535		3,437		3,472		3,401		3,334
Equipment and data processing	3,600		3,680		4,020		4,102		4,193
Professional services	984		1,163		1,094		1,159		991
FDIC insurance	929		831		867		782		873
Advertising and marketing	878		823		748		872		745
Amortization of identified intangible assets	725		724		738		827		828
Other	2,744		2,709		2,863		3,096		2,692
Total non-interest expense	31,270		30,452		31,326		32,455		31,914
Income before provision for income taxes*	20,346		19,674		19,409		17,938		19,565
Provision for income taxes*	6,897		7,115		7,104		6,586		7,163
Net income before noncontrolling interest in subsidiary*	13,449		12,559		12,305		11,352		12,402
Less net income attributable to noncontrolling interest in subsidiary	561		694		602		477		662
Net income attributable to Brookline Bancorp, Inc.*	$	12,888	$	11,865	$	11,703	$	10,875	$	11,740
Earnings per common share:*
Basic	$	0.18	$	0.17	$	0.17	$	0.16	$	0.17
Diluted	$	0.18	$	0.17	$	0.17	$	0.16	$	0.17
Weighted average common shares outstanding during the period:
Basic	70,129,056		70,049,829		70,036,090		70,024,495		69,989,909
Diluted	70,240,020		70,215,850		70,164,105		70,130,243		70,088,987
Dividends declared per common share	$	0.090	$	0.090	$	0.085	$	0.085	$	0.085

(*) Previously reported amounts prior to January 1, 2015 have been restated to reflect a retrospective change in accounting principle for investments in qualified affordable housing projects, in accordance with ASU 2014-01.

BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Consolidated Statements of Income (Unaudited)

	Nine Months Ended September 30,
	2015		2014
	(In Thousands Except Share Data)
Interest and dividend income:
Loans and leases	$	157,790	$	154,144
Debt securities	8,480		6,931
Marketable and restricted equity securities	2,094		1,508
Short-term investments	98		73
Total interest and dividend income	168,462		162,656
Interest expense:
Deposits	12,926		12,740
Borrowed funds	11,249		8,424
Total interest expense	24,175		21,164
Net interest income	144,287		141,492
Provision for credit losses	5,931		6,753
Net interest income after provision for credit losses	138,356		134,739
Non-interest income:
Deposit Fees	6,522		6,515
Loan Fees	818		724
Loan level derivative income, net	1,841		384
Loss on sales of securities, net	—		(13)
Gain on sales of loans and leases held-for-sale	1,594		1,283
Gain on sale/disposals of premises and equipment, net	—		1,502
Other	3,346		5,244
Total non-interest income*	14,121		15,639
Non-interest expense:
Compensation and employee benefits	52,484		53,585
Occupancy	10,444		10,893
Equipment and data processing	11,300		12,918
Professional services	3,241		4,198
FDIC insurance	2,627		2,580
Advertising and marketing	2,449		2,186
Amortization of identified intangible assets	2,187		2,516
Other	8,316		7,829
Total non-interest expense	93,048		96,705
Income before provision for income taxes*	59,429		53,673
Provision for income taxes*	21,116		19,700
Net income before noncontrolling interest in subsidiary*	38,313		33,973
Less net income attributable to noncontrolling interest in subsidiary	1,857		1,560
Net income attributable to Brookline Bancorp, Inc.*	$	36,456	$	32,413
Earnings per common share:
Basic	$	0.52	$	0.46
Diluted	$	0.52	$	0.46
Weighted average common shares outstanding during the period:
Basic	70,071,999		69,918,248
Diluted	70,207,983		70,029,383
Dividends declared per common share	$	0.265	$	0.255
(*) Previously reported amounts prior to January 1, 2015 have been restated to reflect a retrospective change in accounting principle for investments in qualified affordable housing projects, in accordance with ASU 2014-01.

BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Asset Quality Analysis (Unaudited)
	At and for the Three Months Ended
	September 30, 2015			June 30, 2015			March 31, 2015			December 31, 2014			September 30, 2014
	(Dollars in Thousands)
NONPERFORMING ASSETS:
Loans and leases accounted for on a nonaccrual basis:
Commercial real estate mortgage	$	3,155		$	3,174		$	3,250		$	1,009		$	3,174
Multi-family mortgage	309			309			—			—			299
Total commercial real estate loans	3,464			3,483			3,250			1,009			3,473

Commercial	8,326			12,316			12,039			5,196			6,071
Equipment financing	2,896			2,639			2,321			3,223			2,756
Total commercial loans and leases	11,222			14,955			14,360			8,419			8,827

Indirect automobile loans	629			417			468			645			474

Residential mortgage	2,539			2,421			2,632			1,682			2,636
Home equity	1,818			2,144			1,979			1,918			1,865
Other consumer	52			42			45			41			47
Total consumer loans	4,409			4,607			4,656			3,641			4,548

Total nonaccrual loans and leases	19,724			23,462			22,734			13,714			17,322

Other real estate owned	1,149			1,676			1,043			953			1,536
Other repossessed assets	152			736			980			503			927
Total nonperforming assets	$	21,025		$	25,874		$	24,757		$	15,170		$	19,785

Loans and leases past due greater than 90 days and still accruing	$	8,792		$	10,220		$	8,061		$	6,008		$	3,919

Troubled debt restructurings on accrual	17,746			14,205			14,184			14,815			15,174
Troubled debt restructurings on nonaccrual	5,960			5,981			6,126			5,625			5,609
Total troubled debt restructurings	$	23,706		$	20,186		$	20,310		$	20,440		$	20,783

Nonperforming loans and leases as a percentage of total loans and leases	0.41		%	0.50		%	0.49		%	0.28		%	0.37		%
Nonperforming assets as a percentage of total assets*	0.36		%	0.45		%	0.43		%	0.26		%	0.35		%

PROVISION AND ALLOWANCE FOR LOAN AND LEASE LOSSES:
Allowance for loan and lease losses at beginning of period	$	56,398		$	55,106		$	53,659		$	52,822		$	51,686
Charge-offs	(1,931)			(1,029)			(1,665)			(1,068)			(1,136)
Recoveries	332			528			811			194			343
Net charge-offs	(1,599)			(501)			(854)			(874)			(793)
Provision for loan and lease losses	1,673			1,793			2,301			1,711			1,929
Allowance for loan and lease losses at end of period	$	56,472		$	56,398		$	55,106		$	53,659		$	52,822

Allowance for loan and lease losses as a percentage of total loans and leases	1.17		%	1.19		%	1.19		%	1.11		%	1.12		%
Allowance for loan and lease losses related to originated loans and leases as a percentage of originated loans and leases (non-GAAP)	1.25		%	1.27		%	1.28		%	1.20		%	1.26		%

NET CHARGE-OFFS:
Commercial real estate loans	$	—		$	162		$	388		$	62		$	64
Commercial loans and leases	1,276			151			238			480			348
Indirect automobile loans	117			(13)			239			281			208
Consumer loans	206			201			(11)			51			173
Total net charge-offs	$	1,599		$	501		$	854		$	874		$	793

Net loan and lease charge-offs as a percentage of average loans and leases (annualized)	0.13		%	0.04		%	0.07		%	0.07		%	0.07		%
(*) Previously reported amounts prior to January 1, 2015 have been restated to reflect a retrospective change in accounting principle for investments in qualified affordable housing projects, in accordance with ASU 2014-01.

BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Average Yields / Costs (Unaudited)
	Three Months Ended
	September 30, 2015						June 30, 2015						September 30, 2014
	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)	$	587,804	$	2,904	1.98	%	$	591,120	$	2,941	1.99	%	$	522,911	$	2,312	1.77	%
Marketable and restricted equity securities (2)	76,530		1,111		5.81	%	76,332		493		2.59	%	74,977		521		2.78	%
Short-term investments	36,163		17		0.19	%	85,737		60		0.28	%	42,421		15		0.14	%
Total investments	700,497		4,032		2.30	%	753,189		3,494		1.86	%	640,309		2,848		1.78	%
Loans and Leases:
Commercial real estate loans (3)	2,531,729		26,739		4.22	%	2,505,925		26,391		4.21	%	2,357,921		25,984		4.37	%
Commercial loans (3)	636,756		6,570		4.05	%	639,609		6,394		3.96	%	544,440		5,458		3.94	%
Equipment financing (3)	664,010		11,300		6.81	%	627,032		10,793		6.89	%	563,918		9,664		6.84	%
Indirect automobile loans (3)	17,872		182		4.05	%	21,171		218		4.13	%	371,123		2,929		3.13	%
Residential mortgage loans (3)	613,678		5,437		3.54	%	589,171		5,260		3.57	%	570,505		5,087		3.54	%
Other consumer loans (3)	315,402		2,707		3.40	%	308,932		2,838		3.68	%	284,206		2,818		3.93	%
Total loans and leases	4,779,447		52,935		4.43	%	4,691,840		51,894		4.42	%	4,692,113		51,940		4.43	%
Total interest-earning assets	5,479,944		56,967		4.16	%	5,445,029		55,388		4.07	%	5,332,422		54,788		4.11	%
Allowance for loan and lease losses	(56,833)						(55,427)						(52,423)
Non-interest-earning assets*	367,358						373,018						374,793
Total assets*	$	5,790,469					$	5,762,620					$	5,654,792

Liabilities and Stockholders' Equity:
Interest-bearing liabilities:
Deposits:
NOW accounts	$	246,163	44		0.07	%	$	248,786	45		0.07	%	$	219,811	43		0.08	%
Savings accounts	516,877		257		0.20	%	554,618		263		0.19	%	513,912		299		0.23	%
Money market accounts	1,550,477		1,664		0.43	%	1,544,877		1,693		0.44	%	1,534,552		1,957		0.51	%
Certificates of deposit	1,043,418		2,361		0.90	%	1,049,297		2,295		0.88	%	900,751		1,949		0.86	%
Total interest-bearing deposits	3,356,935		4,326		0.51	%	3,397,578		4,296		0.51	%	3,169,026		4,248		0.53	%
Borrowings
Advances from the FHLBB	801,379		2,495		1.22	%	782,434		2,415		1.22	%	1,036,190		2,740		1.03	%
Subordinated debentures and notes	82,866		1,251		6.04	%	82,827		1,250		6.03	%	21,257		292		5.49	%
Other borrowed funds	32,134		28		0.34	%	34,546		33		0.39	%	25,385		12		0.18	%
Total borrowings	916,379		3,774		1.61	%	899,807		3,698		1.63	%	1,082,832		3,044		1.10	%
Total interest-bearing liabilities	4,273,314		8,100		0.75	%	4,297,385		7,994		0.75	%	4,251,858		7,292		0.68	%
Non-interest-bearing liabilities:
Demand checking accounts	793,785						750,827						717,239
Other non-interest-bearing liabilities	58,414						54,352						48,236
Total liabilities	5,125,513						5,102,564						5,017,333
Brookline Bancorp, Inc. stockholders' equity*	659,761						655,223						633,406
Noncontrolling interest in subsidiary	5,195						4,833						4,053
Total liabilities and equity*	$	5,790,469					$	5,762,620					$	5,654,792
Net interest income (tax-equivalent basis) /Interest-rate spread (4)			48,867		3.41	%			47,394		3.32	%			47,496		3.43	%
Less adjustment of tax-exempt income			280						222						172
Net interest income			$	48,587					$	47,172					$	47,324
Net interest margin (5)					3.54	%					3.49	%					3.53	%

(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.
(*) Previously reported amounts prior to January 1, 2015 have been restated to reflect a retrospective change in accounting principle for investments in qualified affordable housing projects, in accordance with ASU 2014-01.

BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Average Yields / Costs (Unaudited)
	Nine Months Ended
	September 30, 2015						September 30, 2014
	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)	$	577,967	$	8,529	1.97	%	$	517,091	$	6,935	1.79	%
Marketable and restricted equity securities (2)	76,218		2,126		3.72	%	70,809		1,515		2.85	%
Short-term investments	57,197		98		0.23	%	41,689		73		0.23	%
Total investments	711,382		10,753		2.02	%	629,589		8,523		1.80	%
Loans and Leases:
Commercial real estate loans (3)	2,504,739		79,375		4.23	%	2,291,952		77,081		4.46	%
Commercial loans (3)	629,115		19,471		4.09	%	507,612		15,397		4.01	%
Equipment financing (3)	634,310		32,637		6.86	%	543,691		29,856		7.33	%
Indirect automobile loans (3)	106,210		2,542		3.20	%	376,765		9,225		3.27	%
Residential mortgage loans (3)	593,371		16,005		3.60	%	545,275		14,814		3.63	%
Other consumer loans (3)	307,878		8,373		3.63	%	276,466		8,230		3.98	%
Total loans and leases	4,775,623		158,403		4.42	%	4,541,761		154,603		4.54	%
Total interest-earning assets	5,487,005		169,156		4.11	%	5,171,350		163,126		4.21	%
Allowance for loan and lease losses	(55,536)						(50,785)
Non-interest-earning assets*	370,038						367,824
Total assets*	$	5,801,507					$	5,488,389

Liabilities and Stockholders' Equity:
Interest-bearing liabilities:
Deposits:
NOW accounts	$	244,253	132		0.07	%	$	217,168	126		0.08	%
Savings accounts	537,606		793		0.20	%	515,433		905		0.23	%
Money market accounts	1,544,085		5,173		0.45	%	1,523,269		5,852		0.51	%
Certificates of deposit	1,042,111		6,828		0.88	%	909,647		5,857		0.86	%
Total interest-bearing deposits	3,368,055		12,926		0.51	%	3,165,517		12,740		0.54	%
Borrowings
Advances from the FHLBB	841,196		7,414		1.16	%	911,748		7,873		1.14	%
Subordinated debentures and notes	82,826		3,749		6.03	%	13,249		490		4.93	%
Other borrowed funds	34,808		86		0.33	%	26,849		61		0.30	%
Total borrowings	958,830		11,249		1.55	%	951,846		8,424		1.17	%
Total interest-bearing liabilities	4,326,885		24,175		0.75	%	4,117,363		21,164		0.69	%
Non-interest-bearing liabilities:
Demand checking accounts	757,811						694,272
Other non-interest-bearing liabilities	57,328						44,858
Total liabilities	5,142,024						4,856,493
Brookline Bancorp, Inc. stockholders' equity*	654,596						627,750
Noncontrolling interest in subsidiary	4,887						4,146
Total liabilities and equity*	$	5,801,507					$	5,488,389
Net interest income (tax-equivalent basis) /Interest-rate spread (4)			144,981		3.36	%			141,962		3.52	%
Less adjustment of tax-exempt income			694						470
Net interest income			$	144,287					$	141,492
Net interest margin (5)					3.53	%					3.67	%

(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.
(*) Previously reported amounts prior to January 1, 2015 have been restated to reflect a retrospective change in accounting principle for investments in qualified affordable housing projects, in accordance with ASU 2014-01.

BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Non-GAAP Financial Information (Unaudited)

	At and for the Three Months Ended
	September 30, 2015			June 30, 2015			March 31, 2015			December 31, 2014			September 30, 2014
	(Dollars in Thousands)

Net income, as reported*	$	12,888		$	11,865		$	11,703		$	10,875		$	11,740

Average total assets*	$	5,790,469		$	5,762,620		$	5,852,114		$	5,757,715		$	5,654,792
Less: Average goodwill and average identified intangible assets, net	149,669			150,385			151,125			151,932			152,755
Average tangible assets*	$	5,640,800		$	5,612,235		$	5,700,989		$	5,605,783		$	5,502,037

Return on average tangible assets (annualized)*	0.91		%	0.85		%	0.82		%	0.78		%	0.85		%

Average total stockholders' equity*	$	659,761		$	655,223		$	648,683		$	640,706		$	633,406
Less: Average goodwill and average identified intangible assets, net	149,669			150,385			151,125			151,932			152,755
Average tangible stockholders' equity*	$	510,092		$	504,838		$	497,558		$	488,774		$	480,651

Return on average tangible stockholders' equity (annualized)*	10.11		%	9.40		%	9.41		%	8.90		%	9.77		%

Brookline Bancorp, Inc. stockholders' equity*	$	663,468		$	653,516		$	651,319		$	641,818		$	633,379
Less:
Goodwill	137,890			137,890			137,890			137,890			137,890
Identified intangible assets, net	11,357			12,082			12,806			13,544			14,371
Tangible stockholders' equity*	$	514,221		$	503,544		$	500,623		$	490,384		$	481,118

Total assets*	$	5,839,529		$	5,782,934		$	5,755,146		$	5,800,948		$	5,718,944
Less:
Goodwill	137,890			137,890			137,890			137,890			137,890
Identified intangible assets, net	11,357			12,082			12,806			13,544			14,371
Tangible assets*	$	5,690,282		$	5,632,962		$	5,604,450		$	5,649,514		$	5,566,683

Tangible stockholders' equity to tangible assets*	9.04		%	8.94		%	8.93		%	8.68		%	8.64		%

Tangible stockholders' equity*	$	514,221		$	503,544		$	500,623		$	490,384		$	481,118

Number of common shares issued	75,744,445			75,744,445			75,744,445			75,744,445			75,744,445
Less:
Treasury shares	4,861,085			5,048,525			5,042,238			5,040,571			5,035,956
Unallocated ESOP shares	222,645			232,224			241,803			251,382			261,453
Unvested restricted shares	486,999			406,566			418,035			419,702			427,952
Number of common shares outstanding	70,173,716			70,057,130			70,042,369			70,032,790			70,019,084

Tangible book value per common share*	$	7.33		$	7.19		$	7.15		$	7.00		$	6.87

Allowance for loan and lease losses	$	56,472		$	56,398		$	55,106		$	53,659		$	52,822
Less:
Allowance for acquired loans and leases losses	2,048			2,655			2,911			2,848			1,933
Allowance for originated loan and lease losses	$	54,424		$	53,743		$	52,195		$	50,811		$	50,889

Total loans and leases	$	4,829,152		$	4,729,581		$	4,634,594		$	4,822,607		$	4,736,028
Less:
Total acquired loans and leases	457,922			509,028			561,103			590,654			709,404
Total originated loans and leases	$	4,371,230		$	4,220,553		$	4,073,491		$	4,231,953		$	4,026,624

Allowance for loan and lease losses related to originated loans and leases as a percentage of originated loans and leases	1.25		%	1.27		%	1.28		%	1.20		%	1.26		%
(*) Previously reported amounts January 1, 2015 have been restated to reflect a retrospective change in accounting principle for investments in qualified affordable housing projects, in accordance with ASU 2014-01.