OREANDA-NEWS. January 29, 2016. Brookline Bancorp, Inc. (NASDAQ: BRKL) (the "Company") today announced net income of \\$13.3 million, or \\$0.19 per basic and diluted share, for the fourth quarter of 2015, compared to \\$12.9 million, or \\$0.18 per basic and diluted share, for the third quarter of 2015.

For the year ended December 31, 2015, the Company reported net income of \\$49.8 million, or \\$0.71 per basic and diluted share, compared to \\$43.3 million, or \\$0.62 per basic and diluted share, for the year ended December 31, 2014.

Paul Perrault, President and Chief Executive Officer of the Company, stated: "We are pleased to finish 2015 with over 15 percent growth in earnings. During the year we exited the indirect auto business to focus our resources and capital on serving our commercial real estate, commercial and consumer relationships. Excluding the indirect auto business, we grew our loan balances over 10 percent and our demand deposits grew over 7 percent. Our asset quality remains strong and our Company continues to be well-capitalized. I am grateful to all our employees who have demonstrated dedication and commitment to accomplishing these outstanding results. Our Company is solidly positioned to achieve continued success in 2016."

BALANCE SHEET

Total assets at December 31, 2015 increased \\$202.8 million to \\$6.0 billion from \\$5.8 billion at September 30, 2015, and increased \\$241.4 million from \\$5.8 billion at December 31, 2014. The increase in total assets of 13.9 percent on an annualized basis during the fourth quarter of 2015 was primarily driven by increases in loans and leases. At December 31, 2015, total loans and leases were \\$5.0 billion, representing an increase of \\$166.4 million from September 30, 2015, and an increase of \\$172.9 million from December 31, 2014. During the fourth quarter of 2015, total loans and leases grew 13.8 percent on an annualized basis. Strong loan growth continued in the total commercial real estate and commercial loan and lease portfolios, which increased \\$152.7 million during the fourth quarter of 2015, or 15.7 percent on an annualized basis.

Cash, cash equivalents, and investment securities at December 31, 2015 increased \\$45.5 million to \\$682.4 million, or 11.3 percent of total assets, as compared to \\$636.9 million, or 10.9 percent of total assets, at September 30, 2015, and increased approximately \\$68.4 million from \\$614.0 million, or 10.6 percent of total assets, at December 31, 2014.

Total deposits at December 31, 2015 increased \\$161.4 million to \\$4.3 billion from \\$4.1 billion at September 30, 2015 and increased \\$347.9 million from \\$4.0 billion at December 31, 2014. During the fourth quarter of 2015, balances increased in all deposit account types. Core deposits, which consist of demand checking, NOW, savings, and money market accounts, increased  \\$138.0 million from September 30, 2015 and increased \\$206.7 million from December 31, 2014. Core deposits as a percentage of total deposits also increased slightly to 74.7 percent at December 31, 2015 from 74.3 percent at September 30, 2015, but decreased from 76.1 percent at December 31, 2014. The average cost of deposits increased slightly to 0.52 percent for the three months ended December 31, 2015 from 0.51 percent for the three months ended September 30, 2015.

Total borrowings at December 31, 2015 increased \\$22.8 million to \\$983.0 million from \\$960.2 million at September 30, 2015 and decreased \\$143.4 million from \\$1.1 billion at December 31, 2014 as proceeds from the sale of indirect automobile loans in the first quarter were used to pay down short term borrowings.

The ratio of stockholders' equity to total assets was 11.05 percent at December 31, 2015, as compared to 11.36 percent at September 30, 2015 and 11.06 percent at December 31, 2014. The ratio of tangible stockholders' equity to tangible assets was 8.81 percent at December 31, 2015, as compared to 9.04 percent at September 30, 2015 and 8.68 percent at December 31, 2014.

NET INTEREST INCOME

Net interest income increased \\$1.5 million to \\$50.1 million during the fourth quarter of 2015 from the previous quarter. The net interest margin remained constant at 3.54 percent during the fourth quarter of 2015. The increase in net interest income included the accelerated recognition of \\$1.0 million related to several acquired loans which paid off during the quarter with the remaining increase of \\$0.5 million primarily driven by increased interest income from higher loan balances, partially offset by increased interest expense from higher deposit balances.

PROVISION FOR LOAN AND LEASE LOSSES

The Company recorded a provision for loan and lease losses of \\$1.7 million for the quarter ended December 31, 2015, consistent with the previous quarter.

Net charge-offs decreased \\$0.2 million to \\$1.4 million for the fourth quarter of 2015 from \\$1.6 million for the third quarter of 2015. The ratio of net charge-offs to average loans on an annualized basis decreased to 11 basis points for the fourth quarter of 2015 from 13 basis points for the third quarter of 2015.

The allowance for loan and lease losses represented 1.14 percent of total loans and leases at December 31, 2015, compared to 1.17 percent at September 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 1.20 percent at December 31, 2015, compared to 1.25 percent at September 30, 2015 and 1.20 percent at December 31, 2014.

NON-INTEREST INCOME

Non-interest income  for the quarter ended December 31, 2015 increased \\$1.3 million to \\$6.1 million from \\$4.8 million for the previous quarter. The increase was primarily driven by an increase of \\$0.7 million in loan level derivative income, an increase of \\$0.3 million in loan level derivative mark to market adjustments recorded in other income and an increase of \\$0.2 million in gain on sales of loans and leases held-for-sale.

NON-INTEREST EXPENSE

Non-interest expense for the quarter ended December 31, 2015 increased \\$1.1 million to \\$32.3 million from \\$31.3 million for the previous quarter. The increase was primarily driven by an increase of \\$0.9 million in compensation and employee benefits, largely associated with performance based incentives.

PROVISION FOR INCOME TAXES

The effective tax rate was 37.0 percent and 35.9 percent for the three months and twelve months ended December 31, 2015, respectively.

RETURNS ON AVERAGE ASSETS AND AVERAGE EQUITY

The return on average assets remained unchanged at 0.89 percent during the fourth quarter of 2015. The return on average tangible assets increased to 0.92 percent for the fourth quarter of 2015 from 0.91 percent for the third quarter of 2015. 

The return on average stockholders' equity increased during the fourth quarter of 2015 to 7.99 percent from 7.81 percent for the third quarter of 2015. The return on average tangible stockholders' equity increased to 10.28 percent for the fourth quarter of 2015 from 10.11 percent for the third quarter of 2015.

ASSET QUALITY

Nonperforming loans and leases decreased \\$0.4 million during the fourth quarter of 2015 to \\$19.3 million at December 31, 2015 from the previous quarter. The ratio of nonperforming loans and leases to total loans and leases decreased to 0.39 percent at December 31, 2015 from the previous quarter. Nonperforming assets also decreased \\$0.3 million to \\$20.7 million, or 0.34 percent of total assets, at December 31, 2015.

DIVIDEND DECLARED

The Company's Board of Directors approved a dividend of \\$0.09 per share for the quarter ended December 31, 2015. The dividend will be paid on February 26, 2016 to stockholders of record on February 12, 2016.

CONFERENCE CALL

The Company will conduct a conference call/webcast at 1:30 PM Eastern Standard Time on Thursday, January 28, 2016 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 \\$6.0 billion in assets and branch locations in Massachusetts and Rhode Island, is headquartered in Boston, Massachusetts and operates as the holding company for Brookline Bank, Bank Rhode Island, and First Ipswich Bank (the "banks"). The Company provides commercial and retail banking services, cash management and investment services to customers throughout Central New England. More information about Brookline Bancorp, Inc. and its banks can be found at the following websites: www.brooklinebank.com, www.bankri.com, and www.firstipswich.com.

FORWARD-LOOKING STATEMENTS

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

BASIS OF PRESENTATION

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

NON-GAAP FINANCIAL MEASURES

The Company uses certain non-GAAP financial measures, such as 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.

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, 2015

September 30, 2015

June 30, 2015

March 31, 2015

December 31, 2014

December 31, 2015

December 31, 2014

(Dollars In Thousands Except Per Share Data)

Earnings Data:












Net interest income

\\$              50,078

\\$              48,587

\\$              47,172

\\$              48,528

\\$              47,576

\\$             194,365

\\$             189,068

Provision for credit losses

1,520

1,755

1,913

2,263

1,724

7,451

8,477

Non-interest income*

6,063

4,784

4,867

4,470

4,541

20,184

20,180

Non-interest expense

32,329

31,270

30,452

31,326

32,455

125,377

129,160

Income before provision for income taxes*

22,292

20,346

19,674

19,409

17,938

81,721

71,611

Net income attributable to Brookline Bancorp, Inc.*

13,327

12,888

11,865

11,703

10,875

49,782

43,288












Performance Ratios:












Net interest margin (1)

3.54 %

3.54 %

3.49 %

3.57 %

3.49 %

3.54 %

3.61 %

Interest-rate spread (1)

3.42 %

3.41 %

3.32 %

3.36 %

3.37 %

3.37 %

3.48 %

Return on average assets*

0.89 %

0.89 %

0.82 %

0.80 %

0.76 %

0.85 %

0.78 %

Return on average tangible assets (non-GAAP)*

0.92 %

0.91 %

0.85 %

0.82 %

0.78 %

0.87 %

0.80 %

Return on average stockholders' equity*

7.99 %

7.81 %

7.24 %

7.22 %

6.79 %

7.57 %

6.86 %

Return on average tangible stockholders' equity (non-GAAP)*

10.28 %

10.11 %

9.40 %

9.41 %

8.90 %

9.80 %

9.06 %

Efficiency ratio*

57.59 %

58.59 %

58.52 %

59.11 %

62.27 %

58.44 %

61.73 %












Per Common Share Data:












Net income — Basic*

\\$                  0.19

\\$                  0.18

\\$                  0.17

\\$                  0.17

\\$                  0.16

\\$                   0.71

\\$                   0.62

Net income — Diluted*

0.19

0.18

0.17

0.17

0.16

0.71

0.62

Cash dividends declared

0.090

0.090

0.090

0.085

0.085

0.355

0.340

Book value per share (end of period)*

9.51

9.45

9.33

9.30

9.16

9.51

9.16

Tangible book value per share (end of period) (non-GAAP)*

7.39

7.33

7.19

7.15

7.00

7.39

7.00

Stock price (end of period)

11.50

10.14

11.29

10.05

10.03

11.50

10.03












Balance Sheet:












Total assets*

\\$         6,042,338

\\$         5,839,529

\\$         5,782,934

\\$         5,755,146

\\$         5,800,948

\\$          6,042,338

\\$          5,800,948

Total loans and leases

4,995,540

4,829,152

4,729,581

4,634,594

4,822,607

4,995,540

4,822,607

Total deposits

4,306,018

4,144,577

4,129,408

4,114,795

3,958,106

4,306,018

3,958,106

Brookline Bancorp, Inc. stockholders' equity*

667,485

663,468

653,516

651,319

641,818

667,485

641,818












Asset Quality:












Nonperforming assets

\\$              20,676

\\$              21,025

\\$              25,874

\\$              24,757

\\$              15,170

\\$               20,676

\\$               15,170

Nonperforming assets as a percentage of total assets*

0.34 %

0.36 %

0.45 %

0.43 %

0.26 %

0.34 %

0.26 %

Allowance for loan and lease losses

\\$              56,739

\\$              56,472

\\$              56,398

\\$              55,106

\\$              53,659

\\$               56,739

\\$               53,659

Allowance for loan and lease losses as a percentage of total loans and leases

1.14 %

1.17 %

1.19 %

1.19 %

1.11 %

1.14 %

1.11 %

Net loan and lease charge-offs

\\$                1,389

\\$                1,599

\\$                   501

\\$                   854

\\$                   874

\\$                 4,343

\\$                 3,053

Net loan and lease charge-offs as a percentage of average loans and leases (annualized)

0.11 %

0.13 %

0.04 %

0.07 %

0.07 %

0.09 %

0.07 %












Capital Ratios:












Stockholders' equity to total assets*

11.05 %

11.36 %

11.30 %

11.32 %

11.06 %

11.05 %

11.06 %

Tangible stockholders' equity to tangible assets (non-GAAP)*

8.81 %

9.04 %

8.94 %

8.93 %

8.68 %

8.81 %

8.68 %












(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)

December 31, 2015

September 30, 2015

June 30, 2015

March 31, 2015

December 31, 2014

ASSETS

(In Thousands Except Share Data)

Cash and due from banks

\\$                         28,753

\\$                         27,299

\\$                         43,363

\\$                           35,118

\\$                         36,893

Short-term investments

46,736

19,745

48,513

162,003

25,830

Total cash and cash equivalents

75,489

47,044

91,876

197,121

62,723

Investment securities available-for-sale

513,201

526,764

530,476

565,115

550,761

Investment securities held-to-maturity

93,757

63,097

60,511

500

500

Total investment securities

606,958

589,861

590,987

565,615

551,261

Loans and leases held-for-sale

13,383

10,992

12,482

787

1,537

Loans and leases:








Commercial real estate loans:








Commercial real estate mortgage

1,875,592

1,810,550

1,758,281

1,714,140

1,680,082

Multi-family mortgage

658,480

614,560

627,571

652,500

639,706

Construction

130,322

138,261

127,506

134,247

148,013

Total commercial real estate loans

2,664,394

2,563,371

2,513,358

2,500,887

2,467,801

Commercial loans and leases:








Commercial

592,531

580,711

578,548

560,344

514,077

Equipment financing

721,890

684,331

648,447

614,301

601,424

Condominium association

59,875

57,562

55,185

52,707

51,593

Total commercial loans and leases

1,374,296

1,322,604

1,282,180

1,227,352

1,167,094

Indirect automobile loans

13,678

16,294

19,377

23,335

316,987

Consumer loans:








Residential mortgage

616,449

606,063

603,073

578,994

571,920

Home equity

314,553

308,371

299,396

292,198

287,058

Other consumer

12,170

12,449

12,197

11,828

11,747

Total consumer loans

943,172

926,883

914,666

883,020

870,725

Total loans and leases

4,995,540

4,829,152

4,729,581

4,634,594

4,822,607

Allowance for loan and lease losses

(56,739)

(56,472)

(56,398)

(55,106)

(53,659)

Net loans and leases

4,938,801

4,772,680

4,673,183

4,579,488

4,768,948

Restricted equity securities

66,117

75,553

75,553

74,804

74,804

Premises and equipment, net of accumulated depreciation

78,156

77,472

77,892

79,252

80,619

Deferred tax asset

26,817

25,730

28,466

25,834

27,687

Goodwill

137,890

137,890

137,890

137,890

137,890

Identified intangible assets, net of accumulated amortization

10,633

11,357

12,082

12,806

13,544

Other real estate owned and repossessed assets

1,343

1,301

2,412

2,023

1,456

Other assets*

86,751

89,649

80,111

79,526

80,479

Total assets*

\\$                   6,042,338

\\$                   5,839,529

\\$                   5,782,934

\\$                    5,755,146

\\$                   5,800,948

LIABILITIES AND STOCKHOLDERS' EQUITY








Deposits:








Non-interest-bearing deposits:








Demand checking accounts

\\$                         799,117

\\$                        785,210

\\$                        783,331

\\$                       729,932

\\$                         726,118

Interest-bearing deposits:








NOW accounts

283,972

254,767

247,172

237,200

235,063

Savings accounts

540,788

500,104

532,184

571,030

531,727

Money market accounts

1,594,269

1,540,104

1,523,798

1,525,053

1,518,490

Certificate of deposit accounts

1,087,872

1,064,392

1,042,923

1,051,580

946,708

Total interest-bearing deposits

3,506,901

3,359,367

3,346,077

3,384,863

3,231,988

Total deposits

4,306,018

4,144,577

4,129,408

4,114,795

3,958,106

Borrowed funds:








Advances from the FHLBB

861,866

848,913

823,452

806,491

1,004,026

Subordinated debentures and notes

82,936

82,873

82,850

82,806

82,763

Other borrowed funds

38,227

28,434

31,346

35,628

39,615

Total borrowed funds

983,029

960,220

937,648

924,925

1,126,404

Mortgagors' escrow accounts

7,516

7,996

7,494

8,414

8,501

Accrued expenses and other liabilities

72,289

57,996

49,792

51,046

61,332

Total liabilities

5,368,852

5,170,789

5,124,342

5,099,180

5,154,343

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

616,899

616,252

618,044

617,845

617,475

Retained earnings, partially restricted*

109,675

102,684

96,128

90,589

84,860

Accumulated other comprehensive income (loss)

(2,476)

1,191

(1,775)

1,747

(1,622)

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

(56,208)

(56,202)

(58,372)

(58,301)

(58,282)

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

(1,162)

(1,214)

(1,266)

(1,318)

(1,370)

Total Brookline Bancorp, Inc. stockholders' equity*

667,485

663,468

653,516

651,319

641,818

Noncontrolling interest in subsidiary

6,001

5,272

5,076

4,647

4,787

Total stockholders' equity*

673,486

668,740

658,592

655,966

646,605

Total liabilities and stockholders' equity*

\\$                   6,042,338

\\$                   5,839,529

\\$                   5,782,934

\\$                    5,755,146

\\$                   5,800,948








(*) 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

December 31, 2015

September 30, 2015

June 30, 2015

March 31, 2015

December 31, 2014

(In Thousands Except Share Data)

Interest and dividend income:








Loans and leases

\\$              54,814

\\$              52,725

\\$              51,684

\\$              53,381

\\$              52,637

Debt securities

2,936

2,866

2,931

2,683

2,596

Marketable and restricted equity securities

668

1,079

491

524

564

Short-term investments

30

17

60

21

29

Total interest and dividend income

58,448

56,687

55,166

56,609

55,826

Interest expense:








Deposits

4,554

4,326

4,296

4,304

4,320

Borrowed funds

3,816

3,774

3,698

3,777

3,930

Total interest expense

8,370

8,100

7,994

8,081

8,250

Net interest income

50,078

48,587

47,172

48,528

47,576

Provision for credit losses

1,520

1,755

1,913

2,263

1,724

Net interest income after provision for credit losses

48,558

46,832

45,259

46,265

45,852

Non-interest income:








Deposit fees

2,208

2,261

2,195

2,066

2,177

Loan fees

364

205

271

342

286

Loan level derivative income, net

1,556

900

941

—

562

Gain/(loss) on sales of securities, net

—

—

—

—

78

Gain on sales of loans and leases held-for-sale

614

446

279

869

368

(Loss)/gain on sale/disposals of premises and equipment, net

—

—

—

—

—

Litigation settlement

—

—

—

—

—

Other

1,321

972

1,181

1,193

1,070

Total non-interest income*

6,063

4,784

4,867

4,470

4,541

Non-interest expense:








Compensation and employee benefits

18,788

17,875

17,085

17,524

18,216

Occupancy

3,482

3,535

3,437

3,472

3,401

Equipment and data processing

3,537

3,600

3,680

4,020

4,102

Professional services

951

984

1,163

1,094

1,159

FDIC insurance

883

929

831

867

782

Advertising and marketing

903

878

823

748

872

Amortization of identified intangible assets

724

725

724

738

827

Other

3,061

2,744

2,709

2,863

3,096

Total non-interest expense

32,329

31,270

30,452

31,326

32,455

Income before provision for income taxes*

22,292

20,346

19,674

19,409

17,938

Provision for income taxes*

8,237

6,897

7,115

7,104

6,586

Net income before noncontrolling interest in subsidiary*

14,055

13,449

12,559

12,305

11,352

Less net income attributable to noncontrolling interest in subsidiary

728

561

694

602

477

Net income attributable to Brookline Bancorp, Inc.*

\\$              13,327

\\$              12,888

\\$              11,865

\\$              11,703

\\$              10,875

Earnings per common share:*








Basic

\\$                  0.19

\\$                  0.18

\\$                  0.17

\\$                  0.17

\\$                  0.16

Diluted

\\$                  0.19

\\$                  0.18

\\$                  0.17

\\$                  0.17

\\$                  0.16

Weighted average common shares outstanding during the period:








Basic

70,177,382

70,129,056

70,049,829

70,036,090

70,024,495

Diluted

70,318,657

70,240,020

70,215,850

70,164,105

70,130,243

Dividends declared per common share

\\$                0.090

\\$                0.090

\\$                0.090

\\$                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)

Twelve Months Ended December 31,

2015

2014

(In Thousands Except Share Data)

Interest and dividend income:


Loans and leases

\\$            212,604

\\$            206,781

Debt securities

11,416

9,527

Marketable and restricted equity securities

2,762

2,072

Short-term investments

128

102

Total interest and dividend income

226,910

218,482

Interest expense:


Deposits

17,480

17,060

Borrowed funds

15,065

12,354

Total interest expense

32,545

29,414

Net interest income

194,365

189,068

Provision for credit losses

7,451

8,477

Net interest income after provision for credit losses

186,914

180,591

Non-interest income:


Deposit Fees

8,730

8,692

Loan Fees

1,186

1,010

Loan level derivative income, net

3,397

946

Loss on sales of investment securities, net

—

65

Gain on sales of loans and leases held-for-sale

2,208

1,651

Gain on sale/disposals of premises and equipment, net

—

1,502

Other

4,663

6,314

Total non-interest income*

20,184

20,180

Non-interest expense:


Compensation and employee benefits

71,272

71,801

Occupancy

13,926

14,294

Equipment and data processing

14,837

17,020

Professional services

4,192

5,357

FDIC insurance

3,510

3,362

Advertising and marketing

3,352

3,058

Amortization of identified intangible assets

2,911

3,343

Other

11,377

10,925

Total non-interest expense

125,377

129,160

Income before provision for income taxes*

81,721

71,611

Provision for income taxes*

29,353

26,286

Net income before noncontrolling interest in subsidiary*

52,368

45,325

Less net income attributable to noncontrolling interest in subsidiary

2,586

2,037

Net income attributable to Brookline Bancorp, Inc.*

\\$              49,782

\\$              43,288

Earnings per common share:


Basic

\\$                  0.71

\\$                  0.62

Diluted

\\$                  0.71

\\$                  0.62

Weighted average common shares outstanding during the period:

Basic

70,098,561

69,945,028

Diluted

70,235,868

70,054,815

Dividends declared per common share

\\$                0.355

\\$                0.340

(*) 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

December 31,
2015

September 30,
2015

June 30,
2015

March 31,
2015

December 31,
2014

(Dollars in Thousands)

NONPERFORMING ASSETS:








Loans and leases accounted for on a nonaccrual basis:








Commercial real estate mortgage

\\$          5,482

\\$          3,155

\\$          3,174

\\$          3,250

\\$          1,009

Multi-family mortgage

291

309

309

—

—

Total commercial real estate loans

5,773

3,464

3,483

3,250

1,009








Commercial

6,264

8,326

12,316

12,039

5,196

Equipment financing

2,610

2,896

2,639

2,321

3,223

Total commercial loans and leases

8,874

11,222

14,955

14,360

8,419








Indirect automobile loans

675

629

417

468

645








Residential mortgage

2,225

2,539

2,421

2,632

1,682

Home equity

1,757

1,818

2,144

1,979

1,918

Other consumer

29

52

42

45

41

Total consumer loans

4,011

4,409

4,607

4,656

3,641








Total nonaccrual loans and leases

19,333

19,724

23,462

22,734

13,714








Other real estate owned

729

1,149

1,676

1,043

953

Other repossessed assets

614

152

736

980

503

Total nonperforming assets

\\$        20,676

\\$        21,025

\\$        25,874

\\$        24,757

\\$        15,170








Loans and leases past due greater than 90 days and still accruing

\\$          8,690

\\$          8,792

\\$        10,220

\\$          8,061

\\$          6,008








Troubled debt restructurings on accrual

17,953

17,746

14,205

14,184

14,815

Troubled debt restructurings on nonaccrual

4,965

5,960

5,981

6,126

5,625

Total troubled debt restructurings

\\$        22,918

\\$        23,706

\\$        20,186

\\$        20,310

\\$        20,440








Nonperforming loans and leases as a percentage of total loans and leases

0.39 %

0.41 %

0.50 %

0.49 %

0.28 %

Nonperforming assets as a percentage of total assets*

0.34 %

0.36 %

0.45 %

0.43 %

0.26 %








PROVISION AND ALLOWANCE FOR LOAN AND LEASE LOSSES:








Allowance for loan and lease losses at beginning of period

\\$        56,472

\\$        56,398

\\$        55,106

\\$        53,659

\\$        52,822

Charge-offs

(1,929)

(1,931)

(1,029)

(1,665)

(1,068)

Recoveries

540

332

528

811

194

Net charge-offs

(1,389)

(1,599)

(501)

(854)

(874)

Provision for loan and lease losses

1,656

1,673

1,793

2,301

1,711

Allowance for loan and lease losses at end of period

\\$        56,739

\\$        56,472

\\$        56,398

\\$        55,106

\\$        53,659








Allowance for loan and lease losses as a percentage of total loans and leases

1.14 %

1.17 %

1.19 %

1.19 %

1.11 %

Allowance for loan and lease losses related to originated loans and leases as a percentage of originated loans and leases (non-GAAP)

1.20 %

1.25 %

1.27 %

1.28 %

1.20 %








NET CHARGE-OFFS:








Commercial real estate loans

\\$                —

\\$                —

\\$             162

\\$             388

\\$               62

Commercial loans and leases

1,302

1,276

151

238

480

Indirect automobile loans

3

117

(13)

239

281

Consumer loans

84

206

201

(11)

51

Total net charge-offs

\\$          1,389

\\$          1,599

\\$             501

\\$             854

\\$             874








Net loan and lease charge-offs as a percentage of average loans and leases (annualized)

0.11 %

0.13 %

0.04 %

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

December 31, 2015

September 30, 2015

December 31, 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)

\\$      601,590

\\$      2,992

1.99 %

\\$      587,804

\\$      2,904

1.98 %

\\$      524,341

\\$      2,596

1.98 %

Marketable and restricted equity securities (2)

66,659

667

4.01 %

76,530

1,111

5.81 %

76,133

596

3.13 %

Short-term investments

54,514

30

0.22 %

36,163

17

0.19 %

57,047

29

0.20 %

Total investments

722,763

3,689

2.04 %

700,497

4,032

2.30 %

657,521

3,221

1.96 %

Loans and Leases:
















Commercial real estate loans (3)

2,603,238

27,072

4.16 %

2,531,729

26,739

4.22 %

2,422,804

26,243

4.33 %

Commercial loans (3)

656,760

7,119

4.25 %

636,756

6,570

4.05 %

562,180

5,944

4.14 %

Equipment financing (3)

698,049

11,831

6.78 %

664,010

11,300

6.81 %

588,886

9,951

6.76 %

Indirect automobile loans (3)

14,991

144

3.81 %

17,872

182

4.05 %

334,919

2,587

3.06 %

Residential mortgage loans (3)

619,959

5,450

3.52 %

613,678

5,437

3.54 %

569,896

5,143

3.61 %

Other consumer loans (3)

323,659

3,419

4.19 %

315,402

2,707

3.40 %

293,117

2,959

4.01 %

Total loans and leases

4,916,656

55,035

4.48 %

4,779,447

52,935

4.43 %

4,771,802

52,827

4.43 %

Total interest-earning assets

5,639,419

58,724

4.17 %

5,479,944

56,967

4.16 %

5,429,323

56,048

4.13 %

Allowance for loan and lease losses

(57,182)




(56,833)




(53,542)



Non-interest-earning assets*

374,954




367,358




381,934



Total assets*

\\$   5,957,191




\\$   5,790,469




\\$   5,757,715





















Liabilities and Stockholders' Equity:
















Interest-bearing liabilities:
















Deposits:
















NOW accounts

\\$      263,893

47

0.07 %

\\$      246,163

44

0.07 %

\\$      229,897

45

0.08 %

Savings accounts

517,333

301

0.23 %

516,877

257

0.20 %

528,557

292

0.22 %

Money market accounts

1,608,959

1,762

0.43 %

1,550,477

1,664

0.43 %

1,537,740

1,994

0.51 %

Certificates of deposit

1,054,872

2,444

0.92 %

1,043,418

2,361

0.88 %

915,294

1,989

0.86 %

Total interest-bearing deposits

3,445,057

4,554

0.52 %

3,356,935

4,326

0.51 %

3,211,488

4,320

0.53 %

Borrowings
















Advances from the FHLBB

836,939

2,536

1.19 %

801,379

2,495

1.22 %

1,005,585

2,662

1.04 %

Subordinated debentures and notes

82,906

1,252

6.04 %

82,866

1,251

6.04 %

82,743

1,250

6.04 %

Other borrowed funds

33,459

28

0.33 %

32,134

28

0.34 %

33,667

18

0.21 %

Total borrowings

953,304

3,816

1.57 %

916,379

3,774

1.61 %

1,121,995

3,930

1.37 %

Total interest-bearing liabilities

4,398,361

8,370

0.75 %

4,273,314

8,100

0.75 %

4,333,483

8,250

0.76 %

Non-interest-bearing liabilities:
















Demand checking accounts

806,348




793,785




720,231



Other non-interest-bearing liabilities

79,492




58,414




58,831



Total liabilities

5,284,201




5,125,513




5,112,545



Brookline Bancorp, Inc. stockholders' equity*

667,471




659,761




640,706



Noncontrolling interest in subsidiary

5,519




5,195




4,464



Total liabilities and equity*

\\$   5,957,191




\\$   5,790,469




\\$   5,757,715



Net interest income (tax-equivalent basis) /Interest-rate spread (4)

50,354

3.42 %


48,867

3.41 %


47,798

3.37 %

Less adjustment of tax-exempt income

276




280




222

Net interest income

\\$    50,078




\\$    48,587




\\$    47,576

Net interest margin (5)



3.54 %




3.54 %




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.

(*) 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)

Twelve Months Ended

December 31, 2015

December 31, 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)

\\$      583,921

\\$        11,521

1.97 %

\\$      518,920

\\$          9,531

1.84 %

Marketable and restricted equity securities (2)

73,808

2,793

3.78 %

72,151

2,112

2.93 %

Short-term investments

56,520

128

0.23 %

45,560

102

0.22 %

Total investments

714,249

14,442

2.02 %

636,631

11,745

1.84 %

Loans and Leases:










Commercial real estate loans (3)

2,529,566

106,447

4.21 %

2,324,934

103,324

4.42 %

Commercial loans (3)

636,084

26,590

4.13 %

522,208

21,341

4.04 %

Equipment financing (3)

650,376

44,468

6.84 %

554,240

39,807

7.18 %

Indirect automobile loans (3)

83,218

2,686

3.23 %

366,217

11,812

3.23 %

Residential mortgage loans (3)

600,072

21,455

3.58 %

551,481

19,957

3.62 %

Other consumer loans (3)

311,855

11,792

3.78 %

280,663

11,189

3.98 %

Total loans and leases

4,811,171

213,438

4.44 %

4,599,743

207,430

4.51 %

Total interest-earning assets

5,525,420

227,880

4.12 %

5,236,374

219,175

4.19 %

Allowance for loan and lease losses

(55,950)




(51,480)



Non-interest-earning assets*

371,279




371,330



Total assets*

\\$   5,840,749




\\$   5,556,224















Liabilities and Stockholders' Equity:










Interest-bearing liabilities:










Deposits:










NOW accounts

\\$      249,204

179

0.07 %

\\$      220,377

171

0.08 %

Savings accounts

532,496

1,094

0.21 %

518,741

1,197

0.23 %

Money market accounts

1,560,437

6,935

0.44 %

1,526,915

7,846

0.51 %

Certificates of deposit

1,045,328

9,272

0.89 %

911,072

7,846

0.86 %

Total interest-bearing deposits

3,387,465

17,480

0.52 %

3,177,105

17,060

0.54 %

Borrowings










Advances from the FHLBB

840,123

9,950

1.17 %

935,400

10,535

1.11 %

Subordinated debentures and notes

82,846

5,001

6.04 %

30,766

1,740

5.66 %

Other borrowed funds

34,468

114

0.33 %

28,568

79

0.28 %

Total borrowings

957,437

15,065

1.55 %

994,734

12,354

1.22 %

Total interest-bearing liabilities

4,344,902

32,545

0.75 %

4,171,839

29,414

0.71 %

Non-interest-bearing liabilities:










Demand checking accounts

770,045




700,815



Other non-interest-bearing liabilities

62,914




48,378



Total liabilities

5,177,861




4,921,032



Brookline Bancorp, Inc. stockholders' equity*

657,841




630,966



Noncontrolling interest in subsidiary

5,047




4,226



Total liabilities and equity*

\\$   5,840,749




\\$   5,556,224



Net interest income (tax-equivalent basis) /Interest-rate spread (4)

195,335

3.37 %


189,761

3.48 %

Less adjustment of tax-exempt income

970




693

Net interest income

\\$      194,365




\\$      189,068

Net interest margin (5)



3.54 %




3.61 %










(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

At and for the Twelve Months Ended

December 31, 2015

September 30, 2015

June 30, 2015

March 31, 2015

December 31, 2014

December 31, 2015

December 31, 2014

(Dollars in Thousands)

















Net income, as reported*

\\$                   13,327

\\$                    12,888

\\$                    11,865

\\$                    11,703

\\$                    10,875

\\$                    49,782

\\$                    43,288












Average total assets*

\\$               5,957,191

\\$               5,790,469

\\$               5,762,620

\\$               5,852,114

\\$               5,757,715

\\$               5,840,749

\\$               5,556,224

Less: Average goodwill and average identified intangible assets, net

148,930

149,669

150,385

151,125

151,932

150,020

153,170

Average tangible assets*

\\$               5,808,261

\\$               5,640,800

\\$               5,612,235

\\$               5,700,989

\\$               5,605,783

\\$               5,690,729

\\$               5,403,054












Return on average tangible assets
(annualized)*

0.92 %

0.91 %

0.85 %

0.82 %

0.78 %

0.87 %

0.80 %












Average total stockholders' equity*

\\$                  667,471

\\$                  659,761

\\$                  655,223

\\$                  648,683

\\$                  640,706

\\$                  657,841

\\$                  630,966

Less: Average goodwill and average identified intangible assets, net

148,930

149,669

150,385

151,125

151,932

150,020

153,170

Average tangible stockholders' equity*

\\$                  518,541

\\$                  510,092

\\$                  504,838

\\$                  497,558

\\$                  488,774

\\$                  507,821

\\$                  477,796












Return on average tangible stockholders' equity (annualized)*

10.28 %

10.11 %

9.40 %

9.41 %

8.90 %

9.80 %

9.06 %












Brookline Bancorp, Inc. stockholders' equity*

\\$                  667,485

\\$                  663,468

\\$                  653,516

\\$                  651,319

\\$                  641,818

\\$                  667,485

\\$                  641,818

Less:












Goodwill

137,890

137,890

137,890

137,890

137,890

137,890

137,890

Identified intangible assets, net

10,633

11,357

12,082

12,806

13,544

10,633

13,544

Tangible stockholders' equity*

\\$                  518,962

\\$                  514,221

\\$                  503,544

\\$                  500,623

\\$                  490,384

\\$                  518,962

\\$                  490,384












Total assets*

\\$               6,042,338

\\$               5,839,529

\\$               5,782,934

\\$               5,755,146

\\$               5,800,948

\\$               6,042,338

\\$               5,800,948

Less:












Goodwill

137,890

137,890

137,890

137,890

137,890

137,890

137,890

Identified intangible assets, net

10,633

11,357

12,082

12,806

13,544

10,633

13,544

Tangible assets*

\\$               5,893,815

\\$               5,690,282

\\$               5,632,962

\\$               5,604,450

\\$               5,649,514

\\$               5,893,815

\\$               5,649,514












Tangible stockholders' equity to tangible assets*

8.81 %

9.04 %

8.94 %

8.93 %

8.68 %

8.81 %

8.68 %












Tangible stockholders' equity*

\\$                  518,962

\\$                  514,221

\\$                  503,544

\\$                  500,623

\\$                  490,384

\\$                  518,962

\\$                  490,384












Number of common shares issued

75,744,445

75,744,445

75,744,445

75,744,445

75,744,445

75,744,445

75,744,445

Less:












Treasury shares

4,861,554

4,861,085

5,048,525

5,042,238

5,040,571

4,861,554

5,040,571

Unallocated ESOP shares

213,066

222,645

232,224

241,803

251,382

213,066

251,382

Unvested restricted shares

486,035

486,999

406,566

418,035

419,702

486,035

419,702

Number of common shares outstanding

70,183,790

70,173,716

70,057,130

70,042,369

70,032,790

70,183,790

70,032,790












Tangible book value per common share*

\\$                        7.39

\\$                        7.33

\\$                        7.19

\\$                        7.15

\\$                        7.00

\\$                        7.39

\\$                        7.00












Allowance for loan and lease losses

\\$                    56,739

\\$                    56,472

\\$                    56,398

\\$                    55,106

\\$                    53,659

\\$                    56,739

\\$                    53,659

Less:












Allowance for acquired loans and leases losses

1,752

2,048

2,655

2,911

2,848

1,752

2,848

Allowance for originated loan and lease losses

\\$                    54,987

\\$                    54,424

\\$                    53,743

\\$                    52,195

\\$                    50,811

\\$                    54,987

\\$                    50,811












Total loans and leases

\\$               4,995,540

\\$               4,829,152

\\$               4,729,581

\\$               4,634,594

\\$               4,822,607

\\$               4,995,540

\\$               4,822,607

Less:












Total acquired loans and leases

422,652

457,922

509,028

561,103

590,654

422,652

590,654

Total originated loans and leases

\\$               4,572,888

\\$               4,371,230

\\$               4,220,553

\\$               4,073,491

\\$               4,231,953

\\$               4,572,888

\\$               4,231,953












Allowance for loan and lease losses related to originated loans and leases as a percentageof originated loans and leases

1.20 %

1.25 %

1.27 %

1.28 %

1.20 %

1.20 %

1.20 %

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