Brookline Bancorp Announces Third Quarter Results

Net Income of $30.1 million, EPS of $0.39

Increases Quarterly Dividend 4%

BOSTON, Oct. 26, 2022 (GLOBE NEWSWIRE) -- Brookline Bancorp, Inc. (NASDAQ: BRKL) (the “Company”) today announced net income of $30.1 million, or $0.39 per basic and diluted share, for the third quarter of 2022, compared to net income of $25.2 million, or $0.33 per basic and diluted share, for the second quarter of 2022, and net income of $28.8 million, or $0.37 per basic and diluted share, for the third quarter of 2021.

Paul Perrault, Chairman and Chief Executive Officer of the Company, commented on third quarter performance, “We experienced another near record quarter of earnings in the third quarter led by our experienced team of bankers who continue to generate solid loan growth while maintaining asset quality."

BALANCE SHEET

Total assets at September 30, 2022 increased $181.5 million to $8.7 billion from $8.5 billion at June 30, 2022, and increased $383.1 million from $8.3 billion at September 30, 2021. At September 30, 2022, total loans and leases were $7.4 billion, representing an increase of $129.4 million from June 30, 2022, and an increase of $489.6 million from September 30, 2021. The loan portfolio grew $129.4 million in the third quarter compared to growth of $68.8 million in the second quarter.

Total investment securities at September 30, 2022 decreased $42.1 million to $675.7 million from $717.8 million at June 30, 2022, and decreased $56.3 million from $732.0 million at September 30, 2021. Total cash and cash equivalents at September 30, 2022 increased $22.2 million to $112.5 million from $90.3 million at June 30, 2022, and decreased $126.6 million from $239.1 million at September 30, 2021. As of September 30, 2022, total investment securities and total cash and cash equivalents represented 9.1 percent of total assets as compared to 9.5 percent and 11.7 percent as of June 30, 2022 and September 30, 2021, respectively.

Total deposits at September 30, 2022 decreased $158.9 million to $6.74 billion from $6.89 billion at June 30, 2022, and decreased $137.4 million from $6.87 billion at September 30, 2021.

Total borrowed funds at September 30, 2022 increased $280.6 million to $758.8 million from $478.2 million at June 30, 2022, and increased $491.3 million from $267.5 million at September 30, 2021.

The ratio of stockholders’ equity to total assets was 11.08 percent at September 30, 2022, as compared to 11.38 percent at June 30, 2022, and 11.77 percent at September 30, 2021. The ratio of tangible stockholders’ equity to tangible assets (non-GAAP) was 9.39 percent at September 30, 2022, as compared to 9.65 percent at June 30, 2022, and 10.01 percent at September 30, 2021. Tangible book value per share (non-GAAP) decreased $0.08 from $10.51 at June 30, 2022 to $10.43 at September 30, 2022, compared to $10.51 at September 30, 2021.

NET INTEREST INCOME

Net interest income increased $6.1 million to $78.0 million for the third quarter of 2022 from $71.9 million for the quarter ended June 30, 2022. The net interest margin increased 24 basis points to 3.80 percent for the three months ended September 30, 2022 from 3.56 percent for the three months ended June 30, 2022.

NON-INTEREST INCOME

Total non-interest income for the quarter ended September 30, 2022 decreased $0.1 million to $6.8 million from $6.9 million for the quarter ended June 30, 2022. The decrease was primarily driven by a decrease of $0.3 million in loan level derivative income, net, a decrease of $0.3 million in loan fees, and a decrease of $0.1 million in other non-interest income, partially offset by an increase of $0.6 million in gain on sales of loans and leases.

PROVISION FOR CREDIT LOSSES

The Company recorded a provision for credit losses of $2.8 million for the quarter ended September 30, 2022, compared to $0.2 million for the quarter ended June 30, 2022. Total net recoveries for the third quarter of 2022 were $0.2 million compared to total net charge-offs of $1.2 million in the second quarter of 2022. The decrease of $1.4 million was primarily driven by a decrease in net charge-offs on equipment financing loans of $1.2 million, along with a decrease of $0.2 million on commercial loans. The ratio of net loan and lease charge-offs to average loans and leases on an annualized basis decreased to a negative 1 basis point for the third quarter of 2022 from 7 basis points for the second quarter of 2022.

The allowance for loan and lease losses represented 1.27 percent of total loans and leases at September 30, 2022, compared to 1.28 percent at June 30, 2022, and 1.48 percent at September 30, 2021.

ASSET QUALITY

The ratio of nonperforming loans and leases to total loans and leases was 0.24 percent at September 30, 2022, a decrease from 0.28 percent at June 30, 2022. Total nonaccrual loans and leases decreased $3.1 million to $17.7 million at September 30, 2022 from $20.8 million at June 30, 2022. The ratio of nonperforming assets to total assets was 0.21 percent at September 30, 2022, a decrease from 0.25 percent at June 30, 2022. Total nonperforming assets decreased $3.0 million to $18.3 million at September 30, 2022 from $21.3 million at June 30, 2022.

NON-INTEREST EXPENSE

Non-interest expense for the quarter ended September 30, 2022 increased $0.1 million to $45.0 million from $44.9 million for the quarter ended June 30, 2022. The increase was primarily driven by an increase of $0.5 million in merger and acquisition expense, an increase of $0.1 million in equipment and data processing expense, and an increase of $0.1 million in occupancy expense, partially offset by a decrease of $0.5 million in compensation and employee benefits expense and a decrease of $0.1 million in professional services expense.

PROVISION FOR INCOME TAXES

The effective tax rate was 18.7 percent and 22.9 percent for the three and nine months ended September 30, 2022 compared to 25.2 percent for the three months ended June 30, 2022 and 25.0 percent and 25.1 percent for the three and nine months ended September 30, 2021. The effective tax rate for the three and nine months ended September 30, 2022 is reflective of the recognition of energy tax credits related to financing commercial investments in renewable energy platforms.

RETURNS ON AVERAGE ASSETS AND AVERAGE EQUITY

The annualized return on average assets increased to 1.40 percent during the third quarter 2022 from 1.18 percent for the second quarter of 2022.

The annualized return on average stockholders' equity increased to 12.29 percent during the third quarter of 2022 from 10.32 percent for the second quarter of 2022. The annualized return on average tangible stockholders’ equity increased to 14.72 percent for the third quarter of 2022 from 12.39 percent for the second quarter of 2022.

DIVIDEND DECLARED

The Company’s Board of Directors approved a dividend of $0.135 per share for the quarter ended September 30, 2022, an increase of half a cent from the prior period. The dividend will be paid on November 25, 2022 to stockholders of record on November 11, 2022.

PCSB ACQUISITION

On May 23, 2022, the Company and PCSB Financial Corporation (“PCSB”), the holding company of PCSB Bank, entered into an Agreement and Plan of Merger (the “Merger Agreement”). Pursuant to the Merger Agreement, PCSB will merge with and into the Company, with the Company as the surviving corporation (the “Merger”). Following the Merger, PCSB Bank will operate as a separate bank subsidiary of the Company. Pursuant to the terms of the Merger Agreement, at the effective time of the Merger, each stockholder of PCSB will receive, for each share of PCSB common stock, 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 will be converted into Company common stock. The consummation of the Merger is subject to customary closing conditions, including the receipt of regulatory approvals. The Merger is currently expected to be completed in the fourth quarter of 2022.

CONFERENCE CALL

The Company will conduct a conference call/webcast at 1:30 PM Eastern Time on Thursday, October 27, 2022 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/723147970. 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 454700). 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: 941200.

ABOUT BROOKLINE BANCORP, INC.

Brookline Bancorp, Inc., a bank holding company with $8.7 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 and Bank Rhode Island (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 and www.bankri.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 included, but are not limited to, general business and economic conditions on a national basis and in the local markets in which the Company operates; the Company and PCSB’s ability to achieve the synergies and value creation contemplated by the proposed acquisition; the Company and PCSB’s ability to successfully integrate operations in the proposed acquisition; the effect of the announcement of the proposed acquisition on the ability of PCSB to maintain relationships with its key partners, customers and employees, and on its operating business generally, changes in consumer behavior due to changing political business and economic conditions (including inflation); changes in information technology, cybersecurity incidents, fraud, natural disasters, war, terrorism, civil unrest, the ongoing COVID-19 pandemic, and future pandemics; the possibility that future credit losses are higher than currently expected due to changes in economic assumptions or adverse economic developments; interest rate changes or volatility, as well as changes in the balance and mix of loans and deposits; changes in loan demand and collectability; and ongoing turbulence in capital and debt markets. Forward-looking statements involve risks and uncertainties which are difficult to predict. The Company’s actual results could differ materially from those projected in the forward-looking statements as a result of, among others, the risks outlined in the Company’s Annual Report on Form 10-K, as updated by its Quarterly Reports on Form 10-Q and other filings submitted to the SEC. The Company does not undertake any obligation to update any forward-looking statement to reflect circumstances or events that occur after the date the forward-looking statements are made.

BASIS OF PRESENTATION

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

NON-GAAP FINANCIAL MEASURES

The Company uses certain non-GAAP financial measures, such as operating earnings, operating earnings per common share, operating return on average assets, operating return on average tangible assets, operating return on average stockholders' equity, operating return on average tangible stockholders' equity, tangible book value per common share, tangible stockholders’ equity to tangible assets, return on average tangible assets (annualized) and return on average tangible stockholders' equity (annualized). These non-GAAP financial measures provide information for investors to effectively analyze financial trends of ongoing business activities, and to enhance comparability with peers across the financial services sector. A detailed reconciliation table of the Company's GAAP to the non-GAAP measures is attached.

INVESTOR RELATIONS:

Contact:	Carl M. Carlson Brookline Bancorp, Inc. Co-President and Chief Financial Officer (617) 425-5331 ccarlson@brkl.com

BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Selected Financial Highlights (Unaudited)
	At and for the Three Months Ended
	September 30, 2022			June 30, 2022			March 31, 2022			December 31, 2021			September 30, 2021
	(Dollars In Thousands Except per Share Data)
Earnings Data:
Net interest income	$	78,026		$	71,867		$	69,848		$	71,461		$	70,697
Provision (credit) for credit losses		2,835			227			(160	)		751			(3,110	)
Non-interest income		6,834			6,928			5,529			10,699			5,586
Non-interest expense		44,959			44,871			42,487			42,909			40,922
Income before provision for income taxes		37,066			33,697			33,050			38,500			38,471
Net income		30,149			25,195			24,705			28,545			28,839
Performance Ratios:
Net interest margin (1)		3.80	%		3.56	%		3.49	%		3.52	%		3.53	%
Interest-rate spread (1)		3.58	%		3.41	%		3.31	%		3.42	%		3.39	%
Return on average assets (annualized)		1.40	%		1.18	%		1.16	%		1.35	%		1.38	%
Return on average tangible assets (annualized) (non-GAAP)		1.43	%		1.21	%		1.18	%		1.38	%		1.41	%
Return on average stockholders' equity (annualized)		12.29	%		10.32	%		9.91	%		11.56	%		11.79	%
Return on average tangible stockholders' equity (annualized) (non-GAAP)		14.72	%		12.39	%		11.84	%		13.84	%		14.15	%
Efficiency ratio (2)		52.98	%		56.95	%		56.37	%		52.23	%		53.64	%
Per Common Share Data:
Net income — Basic	$	0.39		$	0.33		$	0.32		$	0.37		$	0.37
Net income — Diluted		0.39			0.33			0.32			0.37			0.37
Cash dividends declared		0.135			0.130			0.130			0.125			0.125
Book value per share (end of period)		12.54			12.63			12.65			12.82			12.61
Tangible book value per share (end of period) (non-GAAP)		10.43			10.51			10.56			10.73			10.51
Stock price (end of period)		11.65			13.31			15.82			16.19			15.26
Balance Sheet:
Total assets	$	8,695,708		$	8,514,230		$	8,633,736		$	8,602,622		$	8,312,649
Total loans and leases		7,421,304			7,291,912			7,223,130			7,154,457			6,931,694
Total deposits		6,735,605			6,894,457			7,094,378			7,049,906			6,873,010
Total stockholders’ equity		963,618			968,496			981,935			995,342			978,452
Asset Quality:
Nonperforming assets	$	18,312		$	21,259		$	26,506		$	33,177		$	36,461
Nonperforming assets as a percentage of total assets		0.21	%		0.25	%		0.31	%		0.39	%		0.44	%
Allowance for loan and lease losses	$	94,169		$	93,188		$	95,463		$	99,084		$	102,515
Allowance for loan and lease losses as a percentage of total loans and leases		1.27	%		1.28	%		1.32	%		1.38	%		1.48	%
Net loan and lease (recoveries) charge-offs	$	(179	)	$	1,242		$	1,947		$	2,124		$	1,255
Net loan and lease charge-offs as a percentage of average loans and leases (annualized)		(0.01	)%		0.07	%		0.11	%		0.12	%		0.07	%
Capital Ratios:
Stockholders’ equity to total assets		11.08	%		11.38	%		11.37	%		11.57	%		11.77	%
Tangible stockholders’ equity to tangible assets (non-GAAP)		9.39	%		9.65	%		9.67	%		9.87	%		10.01	%
(1) Calculated on a fully tax-equivalent basis.
(2) Calculated as non-interest expense as a percentage of net interest income plus non-interest income.

BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Consolidated Balance Sheets (Unaudited)
	September 30, 2022			June 30, 2022			March 31, 2022			December 31, 2021			September 30, 2021
ASSETS	(In Thousands Except Share Data)
Cash and due from banks	$	65,638		$	50,429		$	89,032		$	66,265		$	28,865
Short-term investments		46,873			39,900			204,239			261,472			210,279
Total cash and cash equivalents		112,511			90,329			293,271			327,737			239,144
Investment securities available-for-sale		675,692			717,818			730,562			720,866			732,020
Total investment securities		675,692			717,818			730,562			720,866			732,020
Loans and leases:
Commercial real estate loans		4,269,512			4,225,754			4,235,325			4,103,040			3,909,011
Commercial loans and leases		1,933,645			1,860,182			1,800,383			1,887,136			1,869,686
Consumer loans		1,218,147			1,205,976			1,187,422			1,164,281			1,152,997
Total loans and leases		7,421,304			7,291,912			7,223,130			7,154,457			6,931,694
Allowance for loan and lease losses		(94,169	)		(93,188	)		(95,463	)		(99,084	)		(102,515	)
Net loans and leases		7,327,135			7,198,724			7,127,667			7,055,373			6,829,179
Restricted equity securities		44,760			35,406			29,066			28,981			28,098
Premises and equipment, net of accumulated depreciation		69,912			69,557			69,365			70,359			70,811
Right-of-use asset operating leases		18,614			18,226			19,571			20,508			21,879
Deferred tax asset		56,894			50,736			46,886			38,987			39,643
Goodwill		160,427			160,427			160,427			160,427			160,427
Identified intangible assets, net of accumulated amortization		1,902			2,022			2,142			2,276			2,484
Other real estate owned and repossessed assets		591			507			990			718			601
Other assets		227,270			170,478			153,789			176,390			188,363
Total assets	$	8,695,708		$	8,514,230		$	8,633,736		$	8,602,622		$	8,312,649
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Demand checking accounts	$	1,848,562		$	1,845,365		$	1,903,331		$	1,888,462		$	1,816,116
NOW accounts		597,870			628,791			627,904			604,097			513,032
Savings accounts		824,789			894,926			967,183			915,804			823,095
Money market accounts		2,405,680			2,402,992			2,432,377			2,358,306			2,393,362
Certificate of deposit accounts		924,771			1,006,786			1,048,036			1,117,695			1,141,861
Brokered deposit accounts		133,933			115,597			115,547			165,542			185,544
Total deposits		6,735,605			6,894,457			7,094,378			7,049,906			6,873,010
Borrowed funds:
Advances from the FHLBB		557,895			307,967			201,236			147,907			113,977
Subordinated debentures and notes		84,008			83,970			83,934			83,897			83,859
Other borrowed funds		116,865			86,263			107,727			125,517			69,703
Total borrowed funds		758,768			478,200			392,897			357,321			267,539
Operating lease liabilities		18,614			18,226			19,571			20,508			21,879
Mortgagors’ escrow accounts		5,785			5,771			5,780			6,296			6,455
Reserve for unfunded credits		19,555			17,511			16,305			14,794			12,736
Accrued expenses and other liabilities		193,763			131,569			122,870			158,455			152,578
Total liabilities		7,732,090			7,545,734			7,651,801			7,607,280			7,334,197
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		735,119			738,544			737,658			736,826			735,990
Retained earnings, partially restricted		392,779			372,677			357,576			342,639			323,862
Accumulated other comprehensive income		(70,227	)		(44,977	)		(29,322	)		(110	)		2,615
Treasury stock, at cost;
7,730,945, 7,995,888, 7,037,464, 7,037,464, and 7,034,754 shares, respectively		(94,866	)		(98,525	)		(84,718	)		(84,718	)		(84,684	)
Unallocated common stock held by the Employee Stock Ownership Plan;
4,833, 11,442, 18,051, 24,660, and 31,278 shares, respectively		(39	)		(75	)		(111	)		(147	)		(183	)
Total stockholders' equity		963,618			968,496			981,935			995,342			978,452
Total liabilities and stockholders' equity	$	8,695,708		$	8,514,230		$	8,633,736		$	8,602,622		$	8,312,649

BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Consolidated Statements of Income (Unaudited)
	Three Months Ended
	September 30, 2022			June 30, 2022			March 31, 2022			December 31, 2021			September 30, 2021
	(In Thousands Except Share Data)
Interest and dividend income:
Loans and leases	$	84,375		$	74,287		$	71,721		$	73,560		$	74,332
Debt securities		3,337			3,249			2,996			2,972			2,967
Marketable and restricted equity securities		467			337			328			325			313
Short-term investments		464			156			66			88			83
Total interest and dividend income		88,643			78,029			75,111			76,945			77,695
Interest expense:
Deposits		7,354			4,282			3,771			4,055			4,571
Borrowed funds		3,263			1,880			1,492			1,429			2,427
Total interest expense		10,617			6,162			5,263			5,484			6,998
Net interest income		78,026			71,867			69,848			71,461			70,697
Provision (credit) for credit losses		2,835			227			(160	)		751			(3,110	)
Net interest income after provision for credit losses		75,191			71,640			70,008			70,710			73,807
Non-interest income:
Deposit fees		2,759			2,744			2,500			2,653			2,629
Loan fees		349			666			747			448			487
Loan level derivative income, net		1,275			1,615			686			3,981			218
Loss on investment securities, net		—			—			—			(32	)		—
Gain on sales of loans and leases held-for-sale		889			291			344			1,933			557
Other		1,562			1,612			1,252			1,716			1,695
Total non-interest income		6,834			6,928			5,529			10,699			5,586
Non-interest expense:
Compensation and employee benefits		28,306			28,772			26,884			28,598			27,206
Occupancy		3,906			3,807			4,284			3,558			3,567
Equipment and data processing		5,066			4,931			5,078			4,576			4,556
Professional services		1,069			1,219			1,226			1,151			1,072
FDIC insurance		709			739			728			617			662
Advertising and marketing		1,337			1,319			1,272			880			1,077
Amortization of identified intangible assets		120			120			134			208			208
Merger and acquisition expense		1,073			535			—			—			—
Other		3,373			3,429			2,881			3,321			2,574
Total non-interest expense		44,959			44,871			42,487			42,909			40,922
Income before provision for income taxes		37,066			33,697			33,050			38,500			38,471
Provision for income taxes		6,917			8,502			8,345			9,955			9,632
Net income	$	30,149		$	25,195		$	24,705		$	28,545		$	28,839
Earnings per common share:
Basic	$	0.39		$	0.33		$	0.32		$	0.37		$	0.37
Diluted	$	0.39		$	0.33		$	0.32		$	0.37		$	0.37
Weighted average common shares outstanding during the period:
Basic		76,779,038			77,091,013			77,617,227			77,610,608			78,000,261
Diluted		77,007,971			77,419,288			77,926,822			77,864,097			78,240,633
Dividends paid per common share	$	0.130		$	0.130		$	0.125		$	0.125		$	0.120

BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Consolidated Statements of Income (Unaudited)
	Nine Months Ended September 30,
		2022			2021
	(In Thousands Except Share Data)
Interest and dividend income:
Loans and leases	$	230,383		$	224,367
Debt securities		9,582			9,206
Marketable and restricted equity securities		1,132			847
Short-term investments		686			164
Total interest and dividend income		241,783			234,584
Interest expense:
Deposits		15,407			16,658
Borrowed funds		6,635			7,014
Total interest expense		22,042			23,672
Net interest income		219,741			210,912
Provision (credit) for credit losses		2,902			(8,588	)
Net interest income after provision for credit losses		216,839			219,500
Non-interest income:
Deposit Fees		8,003			7,925
Loan Fees		1,762			1,647
Loan level derivative income, net		3,576			699
Loss on investment securities, net		—			(6	)
Gain on sales of loans and leases held-for-sale		1,524			1,804
Other		4,426			4,221
Total non-interest income		19,291			16,290
Non-interest expense:
Compensation and employee benefits		83,962			78,188
Occupancy		11,997			11,403
Equipment and data processing		15,075			13,746
Professional services		3,514			3,543
FDIC insurance		2,176			2,363
Advertising and marketing		3,928			3,287
Amortization of identified intangible assets		374			668
Merger and acquisition expense		1,608			—
Other		9,683			6,501
Total non-interest expense		132,317			119,699
Income before provision for income taxes		103,813			116,091
Provision for income taxes		23,764			29,196
Net income	$	80,049		$	86,895
Earnings per common share:
Basic	$	1.04		$	1.11
Diluted	$	1.04		$	1.11
Weighted average common shares outstanding during the period:
Basic		77,159,356			78,097,600
Diluted		77,448,290			78,371,190
Dividends paid per common share	$	0.385		$	0.355

BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Asset Quality Analysis (Unaudited)
	At and for the Three Months Ended
	September 30, 2022			June 30, 2022			March 31, 2022			December 31, 2021			September 30, 2021
	(Dollars in Thousands)
NONPERFORMING ASSETS:
Loans and leases accounted for on a nonaccrual basis:
Commercial real estate mortgage	$	3,136		$	6,470		$	8,313		$	10,848		$	10,963
Total commercial real estate loans		3,136			6,470			8,313			10,848			10,963
Commercial		618			892			1,366			2,318			2,539
Equipment financing		10,544			10,183			11,685			15,014			17,655
Condominium association		64			71			77			84			91
Total commercial loans and leases		11,226			11,146			13,128			17,416			20,285
Residential mortgage		2,741			2,412			3,394			3,909			4,150
Home equity		616			721			680			285			461
Other consumer		2			3			1			1			1
Total consumer loans		3,359			3,136			4,075			4,195			4,612
Total nonaccrual loans and leases		17,721			20,752			25,516			32,459			35,860
Other repossessed assets		591			507			990			718			601
Total nonperforming assets	$	18,312		$	21,259		$	26,506		$	33,177		$	36,461
Loans and leases past due greater than 90 days and still accruing	$	9,583		$	266		$	4		$	1		$	838
Troubled debt restructurings on accrual		9,728			11,524			10,858			12,580			13,526
Troubled debt restructurings on nonaccrual		4,449			5,097			5,189			6,709			6,655
Total troubled debt restructurings	$	14,177		$	16,621		$	16,047		$	19,289		$	20,181
Nonperforming loans and leases as a percentage of total loans and leases		0.24	%		0.28	%		0.35	%		0.45	%		0.52	%
Nonperforming assets as a percentage of total assets		0.21	%		0.25	%		0.31	%		0.39	%		0.44	%
PROVISION AND ALLOWANCE FOR LOAN AND LEASE LOSSES:
Allowance for loan and lease losses at beginning of period	$	93,188		$	95,463		$	99,084		$	102,515		$	106,474
Charge-offs		(598	)		(1,533	)		(2,344	)		(2,562	)		(1,600	)
Recoveries		777			291			397			438			345
Net recoveries (charge-offs)		179			(1,242	)		(1,947	)		(2,124	)		(1,255	)
Provision (credit) for loan and lease losses excluding unfunded commitments *		802			(1,033	)		(1,674	)		(1,307	)		(2,704	)
Allowance for loan and lease losses at end of period	$	94,169		$	93,188		$	95,463		$	99,084		$	102,515
Allowance for loan and lease losses as a percentage of total loans and leases		1.27	%		1.28	%		1.32	%		1.38	%		1.48	%
NET (RECOVERIES) CHARGE-OFFS:
Commercial real estate loans	$	(6	)	$	(6	)	$	31		$	—		$	(1	)
Commercial loans and leases		(179	)		1,254			1,948			2,143			1,276
Consumer loans		6			(6	)		(32	)		(19	)		(20	)
Total net (recoveries) charge-offs	$	(179	)	$	1,242		$	1,947		$	2,124		$	1,255
Net loan and lease charge-offs as a percentage of average loans and leases (annualized)		(0.01	)%		0.07	%		0.11	%		0.12	%		0.07	%
*Provision for loan and lease losses does not include provision (credit) of $2.0 million, $1.2 million, $1.5 million, $2.1 million and $(0.4) million for credit losses on unfunded commitments during the three months ended September 30, 2022, June 30, 2022, March 31, 2022, December 31, 2021 and September 30, 2021, respectively.

BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Average Yields / Costs (Unaudited)
	Three Months Ended
	September 30, 2022								June 30, 2022								September 30, 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)	$	714,226		$	3,337		1.87	%	$	726,374		$	3,249		1.79	%	$	713,593		$	2,967		1.66	%
Marketable and restricted equity securities (2)		36,525			467		5.12	%		30,461			337		4.42	%		28,877			313		4.33	%
Short-term investments		66,257			464		2.80	%		99,905			156		0.62	%		220,110			83		0.15	%
Total investments		817,008			4,268		2.09	%		856,740			3,742		1.75	%		962,580			3,363		1.40	%
Loans and Leases:
Commercial real estate loans (3)		4,239,155			44,729		4.13	%		4,220,257			38,967		3.65	%		3,851,677			35,124		3.57	%
Commercial loans (3)		731,095			8,492		4.55	%		695,365			7,074		4.03	%		901,862			11,715		5.09	%
Equipment financing (3)		1,157,829			19,042		6.58	%		1,129,606			17,897		6.34	%		1,079,059			17,725		6.57	%
Residential mortgage loans (3)		826,969			7,560		3.66	%		818,826			7,123		3.48	%		788,874			6,989		3.54	%
Other consumer loans (3)		379,999			4,605		4.80	%		376,225			3,274		3.48	%		364,914			2,830		3.07	%
Total loans and leases		7,335,047			84,428		4.60	%		7,240,279			74,335		4.11	%		6,986,386			74,383		4.26	%
Total interest-earning assets		8,152,055			88,696		4.35	%		8,097,019			78,077		3.86	%		7,948,966			77,746		3.91	%
Non-interest-earning assets		434,365								418,311								411,669
Total assets	$	8,586,420							$	8,515,330							$	8,360,635
Liabilities and Stockholders' Equity:
Interest-bearing liabilities:
Deposits:
NOW accounts	$	607,210			579		0.38	%	$	612,439			216		0.14	%	$	502,093			116		0.09	%
Savings accounts		881,988			664		0.30	%		930,957			211		0.09	%		785,657			248		0.12	%
Money market accounts		2,423,920			4,038		0.66	%		2,429,043			2,073		0.34	%		2,387,080			1,616		0.27	%
Certificates of deposit		964,112			1,803		0.74	%		1,018,471			1,694		0.67	%		1,160,113			2,430		0.83	%
Brokered deposit accounts		117,058			270		0.92	%		115,535			88		0.30	%		216,112			161		0.30	%
Total interest-bearing deposits		4,994,288			7,354		0.58	%		5,106,445			4,282		0.34	%		5,051,055			4,571		0.36	%
Borrowings
Advances from the FHLBB		331,840			1,700		2.00	%		183,047			489		1.06	%		119,043			1,152		3.79	%
Subordinated debentures and notes		83,989			1,295		6.17	%		83,952			1,262		6.02	%		83,840			1,242		5.92	%
Other borrowed funds		89,019			268		1.20	%		106,363			129		0.48	%		76,380			33		0.17	%
Total borrowings		504,848			3,263		2.53	%		373,362			1,880		1.99	%		279,263			2,427		3.40	%
Total interest-bearing liabilities		5,499,136			10,617		0.77	%		5,479,807			6,162		0.45	%		5,330,318			6,998		0.52	%
Non-interest-bearing liabilities:
Demand checking accounts		1,908,459								1,886,284								1,827,501
Other non-interest-bearing liabilities		197,446								173,072								224,445
Total liabilities		7,605,041								7,539,163								7,382,264
Stockholders’ equity		981,379								976,167								978,371
Total liabilities and equity	$	8,586,420							$	8,515,330							$	8,360,635
Net interest income (tax-equivalent basis) /Interest-rate spread (4)					78,079		3.58	%					71,915		3.41	%					70,748		3.39	%
Less adjustment of tax-exempt income					53								48								51
Net interest income				$	78,026							$	71,867							$	70,697
Net interest margin (5)							3.80	%							3.56	%							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 on an actual/actual basis.

BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Average Yields / Costs (Unaudited)
	Nine Months Ended
	September 30, 2022								September 30, 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)	$	720,266		$	9,582		1.77	%	$	729,623		$	9,206		1.68	%
Marketable and restricted equity securities (2)		31,663			1,132		4.77	%		36,451			847		3.10	%
Short-term investments		119,083			686		0.77	%		215,496			164		0.10	%
Total investments		871,012			11,400		1.75	%		981,570			10,217		1.39	%
Loans and Leases:
Commercial real estate loans (3)		4,204,260			119,723		3.76	%		3,806,405			103,689		3.59	%
Commercial loans (3)		727,333			23,564		4.28	%		1,087,924			37,501		4.55	%
Equipment financing (3)		1,131,069			54,951		6.48	%		1,077,522			53,731		6.65	%
Residential mortgage loans (3)		816,992			21,675		3.54	%		786,015			21,148		3.59	%
Other consumer loans (3)		374,302			10,629		3.79	%		369,744			8,458		3.05	%
Total loans and leases		7,253,956			230,542		4.24	%		7,127,610			224,527		4.20	%
Total interest-earning assets		8,124,968			241,942		3.97	%		8,109,180			234,744		3.86	%
Non-interest-earning assets		419,501								427,880
Total assets	$	8,544,469							$	8,537,060
Liabilities and Stockholders' Equity:
Interest-bearing liabilities:
Deposits:
NOW accounts	$	603,243			898		0.20	%	$	493,378			392		0.11	%
Savings accounts		915,185			1,073		0.16	%		757,864			731		0.13	%
Money market accounts		2,423,207			7,681		0.42	%		2,240,968			4,599		0.27	%
Certificates of deposit		1,024,303			5,345		0.70	%		1,237,682			9,686		1.05	%
Brokered deposit accounts		121,724			410		0.45	%		413,588			1,250		0.40	%
Total interest-bearing deposits		5,087,662			15,407		0.40	%		5,143,480			16,658		0.43	%
Borrowings
Advances from the FHLBB		207,090			2,376		1.51	%		284,540			3,185		1.48	%
Subordinated debentures and notes		83,952			3,801		6.04	%		83,802			3,726		5.93	%
Other borrowed funds		108,337			458		0.57	%		80,960			103		0.17	%
Total borrowings		399,379			6,635		2.19	%		449,302			7,014		2.06	%
Total interest-bearing liabilities		5,487,041			22,042		0.54	%		5,592,782			23,672		0.57	%
Non-interest-bearing liabilities:
Demand checking accounts		1,891,698								1,752,640
Other non-interest-bearing liabilities		180,842								230,834
Total liabilities		7,559,581								7,576,256
Stockholders’ equity		984,888								960,804
Total liabilities and equity	$	8,544,469							$	8,537,060
Net interest income (tax-equivalent basis) /Interest-rate spread (4)					219,900		3.43	%					211,072		3.29	%
Less adjustment of tax-exempt income					159								160
Net interest income				$	219,741							$	210,912
Net interest margin (5)							3.62	%							3.48	%
(1) Tax-exempt income on debt securities, equity securities and revenue bonds included in commercial real estate loans is included on a tax-equivalent basis.
(2) Average balances include unrealized gains (losses) on investment securities. Dividend payments may not be consistent and average yield on equity securities may vary from month to month.
(3) Loans on nonaccrual status are included in the average balances.
(4) Interest rate spread represents the difference between the yield on interest-earning assets and the cost of interest-bearing liabilities.
(5) Net interest margin represents net interest income (tax-equivalent basis) divided by average interest-earning assets on an actual/actual basis.

BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Non-GAAP Financial Information (Unaudited)
				At and for the Three Months Ended September 30,						At and for the Nine Months Ended September 30,
					2022			2021			2022			2021
Reconciliation Table - Non-GAAP Financial Information										(Dollars in Thousands Except Share Data)
Net income				$	30,149		$	28,839		$	80,049		$	86,895
Less:
Security gains (losses) (after-tax)					—			—			—			(4	)
Add:
Merger and acquisition expenses (after-tax)					872			—			1,240			—
Operating earnings				$	31,021		$	28,839		$	81,289		$	86,899
Operating earnings per common share:
Basic				$	0.40		$	0.37		$	1.05		$	1.11
Diluted					0.40			0.37			1.05			1.11
Weighted average common shares outstanding during the period:
Basic					76,779,038			78,000,261			77,159,356			78,097,600
Diluted					77,007,971			78,240,633			77,448,290			78,371,190
Return on average assets *					1.40	%		1.38	%		1.25	%		1.36	%
Add:
Merger and acquisition expenses (after-tax) *					0.04	%		—	%		0.02	%		—	%
Operating return on average assets *					1.44	%		1.38	%		1.27	%		1.36	%
Return on average tangible assets *					1.43	%		1.41	%		1.27	%		1.38	%
Add:
Merger and acquisition expenses (after-tax) *					0.04	%		—	%		0.02	%		—	%
Operating return on average tangible assets *					1.47	%		1.41	%		1.29	%		1.38	%
Return on average stockholders' equity *					12.29	%		11.79	%		10.84	%		12.06	%
Add:
Merger and acquisition expenses (after-tax) *					0.36	%		—	%		0.17	%		—	%
Operating return on average stockholders' equity *					12.65	%		11.79	%		11.01	%		12.06	%
Return on average tangible stockholders' equity *					14.72	%		14.15	%		12.98	%		14.53	%
Add:
Merger and acquisition expenses (after-tax) *					0.43	%		—	%		0.20	%		—	%
Operating return on average tangible stockholders' equity *					15.15	%		14.15	%		13.18	%		14.53	%
* Ratios at and for the three and nine months ended are annualized.
	At and for the Three Months Ended
	September 30, 2022			June 30, 2022			March 31, 2022			December 31, 2021			September 30, 2021
	(Dollars in Thousands)
Net income, as reported	$	30,149		$	25,195		$	24,705		$	28,545		$	28,839
Average total assets	$	8,586,420		$	8,515,330		$	8,531,043		$	8,462,231		$	8,360,635
Less: Average goodwill and average identified intangible assets, net		162,387			162,507			162,632			162,804			163,011
Average tangible assets	$	8,424,033		$	8,352,823		$	8,368,411		$	8,299,427		$	8,197,624
Return on average tangible assets (annualized)		1.43	%		1.21	%		1.18	%		1.38	%		1.41	%
Average total stockholders’ equity	$	981,379		$	976,167		$	997,293		$	987,522		$	978,371
Less: Average goodwill and average identified intangible assets, net		162,387			162,507			162,632			162,804			163,011
Average tangible stockholders’ equity	$	818,992		$	813,660		$	834,661		$	824,718		$	815,360
Return on average tangible stockholders’ equity (annualized)		14.72	%		12.39	%		11.84	%		13.84	%		14.15	%
Total stockholders’ equity	$	963,618		$	968,496		$	981,935		$	995,342		$	978,452
Less:
Goodwill		160,427			160,427			160,427			160,427			160,427
Identified intangible assets, net		1,902			2,022			2,142			2,276			2,484
Tangible stockholders' equity	$	801,289		$	806,047		$	819,366		$	832,639		$	815,541
Total assets	$	8,695,708		$	8,514,230		$	8,633,736		$	8,602,622		$	8,312,649
Less:
Goodwill		160,427			160,427			160,427			160,427			160,427
Identified intangible assets, net		1,902			2,022			2,142			2,276			2,484
Tangible assets	$	8,533,379		$	8,351,781		$	8,471,167		$	8,439,919		$	8,149,738
Tangible stockholders’ equity to tangible assets		9.39	%		9.65	%		9.67	%		9.87	%		10.01	%
Tangible stockholders' equity	$	801,289		$	806,047		$	819,366		$	832,639		$	815,541
Number of common shares issued		85,177,172			85,177,172			85,177,172			85,177,172			85,177,172
Less:
Treasury shares		7,730,945			7,995,888			7,037,464			7,037,464			7,034,754
Unallocated ESOP shares		4,833			11,442			18,051			24,660			31,278
Unvested restricted shares		601,995			497,297			500,098			500,098			502,808
Number of common shares outstanding		76,839,399			76,672,545			77,621,559			77,614,950			77,608,332
Tangible book value per common share	$	10.43		$	10.51		$	10.56		$	10.73		$	10.51

 

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