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Brookline Bancorp Announces First Quarter Results Reflecting One-Time Costs Associated with PCSB Financial Corporation Acquisition
ソース: Nasdaq GlobeNewswire / 26 4 2023 17:25:01 America/New_York
Net Income of $7.6 million, EPS of $0.09
Operating Earnings of $23.3 million, Operating EPS of $0.27
BOSTON, April 26, 2023 (GLOBE NEWSWIRE) -- Brookline Bancorp, Inc. (NASDAQ: BRKL) (the “Company”) today announced net income of $7.6 million, or $0.09 per basic and diluted share, for the first quarter of 2023, compared to net income of $29.7 million, or $0.39 per basic and diluted share, for the fourth quarter of 2022, and net income of $24.7 million, or $0.32 per basic and diluted share, for the first quarter of 2022.
Financial results for the first quarter of 2023 reflect pre-tax one-time costs of $21.5 million associated with the acquisition of PCSB Financial Corporation ("PCSB") and its subsidiary, PCSB Bank, which closed January 1, 2023. Excluding these one-time costs, operating earnings was $23.3 million, or $0.27 per diluted share, for the first quarter of 2023. These one-time costs consist of merger-related costs of $6.4 million associated with the acquisition and $16.7 million of provision for credit losses expense attributable to the closing of the acquisition, partially offset by $1.7 million in securities gains. Please refer to "Non-GAAP Financial Information" below for a reconciliation of net income to operating earnings.
"I am very pleased to report we successfully completed the acquisition and conversion of PCSB Financial and PCSB Bank," said Paul Perrault, Brookline Bancorp, Inc. Chairman and Chief Executive Officer. "Our acquisition assures that PCSB Bank will remain well positioned to continue its growth in the New York market. Like all financial institutions, we continue to monitor the recent developments in the banking sector and in our markets, to take advantage of opportunities as they present themselves.”
PCSB FINANCIAL CORPORATION
On January 1, 2023, the Company completed its previously announced acquisition (the “merger”) of PCSB. PCSB’s bank subsidiary, PCSB Bank, now operates as a separate subsidiary of the Company and has 15 banking offices throughout Westchester County and the lower Hudson Valley of New York state. The transaction included the acquisition of approximately $1.3 billion in loans, the assumption of $1.6 billion in deposits, and $52.9 million of borrowings, each at fair value. Total consideration of $297.8 million consisted of 11,820,904 shares of the Company's common stock issued and cash of $130.5 million.
The following table provides the purchase price allocation of net assets acquired for this transaction:
Assets: Cash $ 42,373 Investments 366,763 Loans 1,336,737 Allowance for credit losses on PCD Loans (2,344 ) Bank premises and equipment 14,631 Goodwill 80,813 CDI 30,265 Other Assets 104,663 Total Assets Acquired $ 1,973,901 Liabilities: Deposits $ 1,570,563 Borrowings 52,923 Other Liabilities 52,624 Total Liabilities $ 1,676,110 Purchase Price $ 297,791 BALANCE SHEET
Total assets at March 31, 2023 increased $2.3 billion to $11.5 billion from $9.2 billion at December 31, 2022, and increased $2.9 billion from $8.6 billion at March 31, 2022. At March 31, 2023, total loans and leases were $9.2 billion, representing an increase of $1.6 billion from December 31, 2022, and an increase of $2.0 billion from March 31, 2022. The loan portfolio grew $1.6 billion in the first quarter compared to growth of $223.1 million in the fourth quarter.
Total investment securities at March 31, 2023 increased $410.3 million to $1.1 billion from $656.8 million at December 31, 2022, and increased $336.5 million from $730.6 million at March 31, 2022. Total cash and cash equivalents at March 31, 2023 increased $103.3 million to $486.3 million from $383.0 million at December 31, 2022, and increased $193.0 million from $293.3 million at March 31, 2022. As of March 31, 2023, total investment securities and total cash and cash equivalents represented 13.5 percent of total assets as compared to 11.3 percent and 11.9 percent as of December 31, 2022 and March 31, 2022, respectively.
Total deposits at March 31, 2023 increased $1.9 billion to $8.5 billion from $6.5 billion at December 31, 2022, and increased $1.4 billion from $7.1 billion at March 31, 2022.
Total borrowed funds at March 31, 2023 increased $197.5 million to $1.6 billion from $1.4 billion at December 31, 2022, and increased $1.2 billion from $392.9 million at March 31, 2022.
The ratio of stockholders’ equity to total assets was 10.11 percent at March 31, 2023, as compared to 10.80 percent at December 31, 2022, and 11.37 percent at March 31, 2022. The ratio of tangible stockholders’ equity to tangible assets (non-GAAP) was 7.94 percent at March 31, 2023, as compared to 9.20 percent at December 31, 2022, and 9.67 percent at March 31, 2022. Tangible book value per share (non-GAAP) decreased $0.72 from $10.80 at December 31, 2022 to $10.08 at March 31, 2023, compared to $10.56 at March 31, 2022.
NET INTEREST INCOME
Net interest income increased $6.0 million to $86.0 million for the first quarter of 2023 from $80.0 million for the quarter ended December 31, 2022. The net interest margin decreased 45 basis points to 3.36 percent for the three months ended March 31, 2023 from 3.81 percent for the three months ended December 31, 2022.
NON-INTEREST INCOME
Total non-interest income for the quarter ended March 31, 2023 increased $3.9 million to $12.9 million from $9.1 million for the quarter ended December 31, 2022. The increase was primarily driven by increases of $2.1 million in other non-interest income which was primarily driven by the mark to market on interest rate swaps on participated loans and bank owned life insurance income, $1.7 million in loan level derivative income, net, and $1.4 million in gain on securities, net, partially offset by a decrease of $1.0 million in gain on sales of loans and leases and a decrease of $0.3 million in deposit fees.
PROVISION FOR CREDIT LOSSES
The Company recorded a provision for credit losses of $25.5 million for the quarter ended March 31, 2023, compared to $5.7 million for the quarter ended December 31, 2022. The increase in the provision for credit losses was primarily driven by the acquisition of PCSB Bank as well as loan growth.
Total net charge-offs for the first quarter of 2023 were $0.5 million compared to $0.3 million in the fourth quarter of 2022. The increase was primarily driven by an increase in net charge-offs on equipment financing loans of $0.2 million. The ratio of net loan and lease charge-offs to average loans and leases on an annualized basis was 2 basis points for the first quarter of 2023, unchanged from 2 basis points for the fourth quarter of 2022.
The allowance for loan and lease losses represented 1.31 percent of total loans and leases at March 31, 2023, compared to 1.29 percent at December 31, 2022, and 1.32 percent at March 31, 2022.
ASSET QUALITY
The ratio of nonperforming loans and leases to total loans and leases was 0.31 percent at March 31, 2023, an increase from 0.19 percent at December 31, 2022. Total nonaccrual loans and leases increased $13.6 million to $28.5 million at March 31, 2023 from $14.9 million at December 31, 2022. The ratio of nonperforming assets to total assets was 0.25 percent at March 31, 2023, an increase from 0.17 percent at December 31, 2022. Total nonperforming assets increased $13.7 million to $29.0 million at March 31, 2023 from $15.3 million at December 31, 2022. The increase in nonperforming assets was primarily driven by the acquisition of PCSB in addition to a single C&I loan relationship.
NON-INTEREST EXPENSE
Non-interest expense for the quarter ended March 31, 2023 increased $17.6 million to $64.8 million from $47.2 million for the quarter ended December 31, 2022. The increase was primarily driven by increases of $7.0 million in compensation and employee benefits expense, $5.8 million in merger and acquisition expense, $1.8 million in amortization of identified intangible assets expense, $1.2 million in occupancy, $0.7 million in equipment and data processing expense, $0.4 million in advertising and marketing expense, $0.5 million in other non-interest expense, and $0.2 million in FDIC insurance expense, partially offset by a decrease of $0.1 million in professional services expense.
PROVISION FOR INCOME TAXES
The effective tax rate was 12.8 percent for the three months ended March 31, 2023 compared to 17.8 percent for the three months ended December 31, 2022 and 25.2 percent for the three months ended March 31, 2022.
RETURNS ON AVERAGE ASSETS AND AVERAGE EQUITY
The annualized return on average assets decreased to 0.27 percent during the first quarter 2023 from 1.34 percent for the fourth quarter of 2022.
The annualized return on average stockholders' equity decreased to 2.61 percent during the first quarter of 2023 from 12.09 percent for the fourth quarter of 2022. The annualized return on average tangible stockholders’ equity decreased to 3.43 percent for the first quarter of 2023 from 14.48 percent for the fourth quarter of 2022.
DIVIDEND DECLARED
The Company’s Board of Directors approved a dividend of $0.135 per share for the quarter ended March 31, 2023. The dividend will be paid on May 26, 2023 to stockholders of record on May 12, 2023.
CONFERENCE CALL
The Company will conduct a conference call/webcast at 1:30 PM Eastern Time on Thursday, April 27, 2023 to discuss the results for the quarter, business highlights and outlook. A copy of the Earnings Presentation is available on the Company’s website, www.brooklinebancorp.com. To listen to the call and view the Company’s Earnings Presentation, please join the call via https://events.q4inc.com/attendee/119704415. To listen to the call without access to the slides, interested parties may dial 833-470-1428 (United States) or 404-975-4839 (internationally) and ask for the Brookline Bancorp, Inc. conference call (Access Code 576006). 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 204-525-0658 (internationally) and entering the passcode: 989324.
ABOUT BROOKLINE BANCORP, INC.
Brookline Bancorp, Inc., a bank holding company with $11.5 billion in assets and branch locations in Massachusetts, Rhode Island, and the Lower Hudson Valley of New York State, is headquartered in Boston, Massachusetts and operates as the holding company for Brookline Bank, Bank Rhode Island, and PCSB Bank (the "banks"). The Company provides commercial and retail banking services, cash management and investment services to customers throughout Central New England and the Lower Hudson Valley of New York State. More information about Brookline Bancorp, Inc. and its banks can be found at the following websites: www.brooklinebank.com, www.bankri.com and www.pcsb.com.
FORWARD-LOOKING STATEMENTS
Certain statements contained in this press release that are not historical facts may constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and are intended to be covered by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. We may also make forward-looking statements in other documents we file with the Securities and Exchange Commission ("SEC"), in our annual reports to shareholders, in press releases and other written materials, and in oral statements made by our officers, directors or employees. You can identify forward looking statements by the use of the words “believe,” “expect,” “anticipate,” “intend,” “estimate,” “assume,” “outlook,” “will,” “should,” and other expressions that predict or indicate future events and trends and which do not relate to historical matters, including statements regarding the Company’s business, credit quality, financial condition, liquidity and results of operations. Forward-looking statements may differ, possibly materially, from what is included in this press release due to factors and future developments that are uncertain and beyond the scope of the Company’s control. These include, but are not limited to, the Company’s ability to achieve the synergies and value creation contemplated by the acquisition of PCSB; turbulence in the capital and debt markets; changes in interest rates; competitive pressures from other financial institutions; general economic conditions (including inflation and concerns about liquidity) on a national basis or in the local markets in which the Company operates; changes in consumer behavior due to changing political, business and economic conditions, or legislative or regulatory initiatives; changes in the value of securities and other assets in the Company’s investment portfolio; increases in loan and lease default and charge-off rates; the adequacy of allowances for loan and lease losses; decreases in deposit levels that necessitate increases in borrowing to fund loans and investments; operational risks including, but not limited to, cybersecurity incidents, fraud, natural disasters, and future pandemics; changes in regulation; the possibility that future credit losses may be higher than currently expected due to changes in economic assumptions and adverse economic developments; the risk that goodwill and intangibles recorded in the Company’s financial statements will become impaired; and changes in assumptions used in making such forward-looking statements. Forward-looking statements involve risks and uncertainties which are difficult to predict. The Company’s actual results could differ materially from those projected in the forward-looking statements as a result of, among others, the risks outlined in the Company’s Annual Report on Form 10-K, as updated by its Quarterly Reports on Form 10-Q and other filings submitted to the SEC. The Company does not undertake any obligation to update any forward-looking statement to reflect circumstances or events that occur after the date the forward-looking statements are made.
BASIS OF PRESENTATION
The Company's consolidated financial statements have been prepared in conformity with generally accepted accounting principles (“GAAP”) as set forth by the Financial Accounting Standards Board in its Accounting Standards Codification and through the rules and interpretive releases of the SEC under the authority of federal securities laws. Certain amounts previously reported have been reclassified to conform to the current period's presentation.
NON-GAAP FINANCIAL MEASURES
The Company uses certain non-GAAP financial measures, such as operating earnings, operating earnings per common share, operating return on average assets, operating return on average tangible assets, operating return on average stockholders' equity, operating return on average tangible stockholders' equity, tangible book value per common share, tangible stockholders’ equity to tangible assets, return on average tangible assets (annualized) and return on average tangible stockholders' equity (annualized). These non-GAAP financial measures provide information for investors to effectively analyze financial trends of ongoing business activities, and to enhance comparability with peers across the financial services sector. A detailed reconciliation table of the Company's GAAP to the non-GAAP measures is attached.
INVESTOR RELATIONS:
Contact: Carl M. Carlson
Brookline Bancorp, Inc.
Co-President and Chief Financial Officer
(617) 425-5331
ccarlson@brkl.comBROOKLINE BANCORP, INC. AND SUBSIDIARIES Selected Financial Highlights (Unaudited) At and for the Three Months Ended March 31,
2023December 31,
2022September 30,
2022June 30,
2022March 31,
2022(Dollars In Thousands Except per Share Data) Earnings Data: Net interest income $ 86,049 $ 80,030 $ 78,026 $ 71,867 $ 69,848 Provision (credit) for credit losses 25,542 5,725 2,835 227 (160 ) Non-interest income 12,937 9,056 6,834 6,928 5,529 Non-interest expense 64,776 47,225 44,959 44,871 42,487 Income before provision for income taxes 8,668 36,136 37,066 33,697 33,050 Net income 7,560 29,695 30,149 25,195 24,705 Performance Ratios: Net interest margin (1) 3.36 % 3.81 % 3.80 % 3.56 % 3.49 % Interest-rate spread (1) 2.66 % 3.35 % 3.58 % 3.41 % 3.31 % Return on average assets (annualized) 0.27 % 1.34 % 1.40 % 1.18 % 1.16 % Return on average tangible assets (annualized) (non-GAAP) 0.28 % 1.37 % 1.43 % 1.21 % 1.18 % Return on average stockholders' equity (annualized) 2.61 % 12.09 % 12.29 % 10.32 % 9.91 % Return on average tangible stockholders' equity (annualized) (non-GAAP) 3.43 % 14.48 % 14.72 % 12.39 % 11.84 % Efficiency ratio (2) 65.44 % 53.01 % 52.98 % 56.95 % 56.37 % Per Common Share Data: Net income — Basic $ 0.09 $ 0.39 $ 0.39 $ 0.33 $ 0.32 Net income — Diluted 0.09 0.39 0.39 0.33 0.32 Cash dividends declared 0.135 0.135 0.135 0.130 0.130 Book value per share (end of period) 13.14 12.91 12.54 12.63 12.65 Tangible book value per share (end of period) (non-GAAP) 10.08 10.80 10.43 10.51 10.56 Stock price (end of period) 10.50 14.15 11.65 13.31 15.82 Balance Sheet: Total assets $ 11,522,485 $ 9,185,836 $ 8,695,708 $ 8,514,230 $ 8,633,736 Total loans and leases 9,246,965 7,644,388 7,421,304 7,291,912 7,223,130 Total deposits 8,456,462 6,522,146 6,735,605 6,894,457 7,094,378 Total stockholders’ equity 1,165,066 992,125 963,618 968,496 981,935 Asset Quality: Nonperforming assets $ 28,962 $ 15,302 $ 18,312 $ 21,259 $ 26,506 Nonperforming assets as a percentage of total assets 0.25 % 0.17 % 0.21 % 0.25 % 0.31 % Allowance for loan and lease losses $ 120,865 $ 98,482 $ 94,169 $ 93,188 $ 95,463 Allowance for loan and lease losses as a percentage of total loans and leases 1.31 % 1.29 % 1.27 % 1.28 % 1.32 % Net loan and lease charge-offs (recoveries) $ 451 $ 310 $ (179 ) $ 1,242 $ 1,947 Net loan and lease charge-offs as a percentage of average loans and leases (annualized) 0.02 % 0.02 % (0.01 )% 0.07 % 0.11 % Capital Ratios: Stockholders’ equity to total assets 10.11 % 10.80 % 11.08 % 11.38 % 11.37 % Tangible stockholders’ equity to tangible assets (non-GAAP) 7.94 % 9.20 % 9.39 % 9.65 % 9.67 % (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) March 31,
2023December 31,
2022September 30,
2022June 30,
2022March 31,
2022ASSETS (In Thousands Except Share Data) Cash and due from banks $ 30,782 $ 191,767 $ 65,638 $ 50,429 $ 89,032 Short-term investments 455,538 191,192 46,873 39,900 204,239 Total cash and cash equivalents 486,320 382,959 112,511 90,329 293,271 Investment securities available-for-sale 1,067,032 656,766 675,692 717,818 730,562 Total investment securities 1,067,032 656,766 675,692 717,818 730,562 Loans and leases: Commercial real estate loans 5,610,414 4,404,148 4,269,512 4,225,754 4,235,325 Commercial loans and leases 2,147,149 2,016,499 1,933,645 1,860,182 1,800,383 Consumer loans 1,489,402 1,223,741 1,218,147 1,205,976 1,187,422 Total loans and leases 9,246,965 7,644,388 7,421,304 7,291,912 7,223,130 Allowance for loan and lease losses (120,865 ) (98,482 ) (94,169 ) (93,188 ) (95,463 ) Net loans and leases 9,126,100 7,545,906 7,327,135 7,198,724 7,127,667 Restricted equity securities 86,230 71,307 44,760 35,406 29,066 Premises and equipment, net of accumulated depreciation 87,799 71,391 69,912 69,557 69,365 Right-of-use asset operating leases 30,067 19,484 18,614 18,226 19,571 Deferred tax asset 75,028 52,237 56,894 50,736 46,886 Goodwill 241,222 160,427 160,427 160,427 160,427 Identified intangible assets, net of accumulated amortization 30,080 1,781 1,902 2,022 2,142 Other real estate owned and repossessed assets 508 408 591 507 990 Other assets 292,099 223,170 227,270 170,478 153,789 Total assets $ 11,522,485 $ 9,185,836 $ 8,695,708 $ 8,514,230 $ 8,633,736 LIABILITIES AND STOCKHOLDERS' EQUITY Deposits: Demand checking accounts $ 1,899,370 $ 1,802,518 $ 1,848,562 $ 1,845,365 $ 1,903,331 NOW accounts 757,411 544,118 597,870 628,791 627,904 Savings accounts 1,268,375 762,271 824,789 894,926 967,183 Money market accounts 2,185,971 2,174,952 2,405,680 2,402,992 2,432,377 Certificate of deposit accounts 1,362,970 928,143 924,771 1,006,786 1,048,036 Brokered deposit accounts 982,365 310,144 133,933 115,597 115,547 Total deposits 8,456,462 6,522,146 6,735,605 6,894,457 7,094,378 Borrowed funds: Advances from the FHLBB 1,458,457 1,237,823 557,895 307,967 201,236 Subordinated debentures and notes 84,080 84,044 84,008 83,970 83,934 Other borrowed funds 87,565 110,785 116,865 86,263 107,727 Total borrowed funds 1,630,102 1,432,652 758,768 478,200 392,897 Operating lease liabilities 31,373 19,484 18,614 18,226 19,571 Mortgagors’ escrow accounts 17,080 5,607 5,785 5,771 5,780 Reserve for unfunded credits 23,112 20,602 19,555 17,511 16,305 Accrued expenses and other liabilities 199,290 193,220 193,763 131,569 122,870 Total liabilities 10,357,419 8,193,711 7,732,090 7,545,734 7,651,801 Stockholders' equity: Common stock, $0.01 par value; 200,000,000 shares authorized; 96,998,075 shares issued, 85,177,172 shares issued, 85,177,172 shares issued, 85,177,172 shares issued, and 85,177,172 shares issued, respectively 970 852 852 852 852 Additional paid-in capital 904,174 736,074 735,119 738,544 737,658 Retained earnings, partially restricted 407,528 412,019 392,779 372,677 357,576 Accumulated other comprehensive income (52,688 ) (61,947 ) (70,227 ) (44,977 ) (29,322 ) Treasury stock, at cost; 7,734,891, 7,731,445, 7,730,945, 7,995,888, and 7,037,464 shares, respectively (94,918 ) (94,873 ) (94,866 ) (98,525 ) (84,718 ) Unallocated common stock held by the Employee Stock Ownership Plan; 0, 0, 4,833, 11,442, and 18,051 shares, respectively — — (39 ) (75 ) (111 ) Total stockholders' equity 1,165,066 992,125 963,618 968,496 981,935 Total liabilities and stockholders' equity $ 11,522,485 $ 9,185,836 $ 8,695,708 $ 8,514,230 $ 8,633,736 BROOKLINE BANCORP, INC. AND SUBSIDIARIES Consolidated Statements of Income (Unaudited) Three Months Ended March 31,
2023December 31,
2022September 30,
2022June 30,
2022March 31,
2022(In Thousands Except Share Data) Interest and dividend income: Loans and leases $ 121,931 $ 98,386 $ 84,375 $ 74,287 $ 71,721 Debt securities 7,870 3,497 3,337 3,249 2,996 Restricted equity securities 1,255 766 467 337 328 Short-term investments 1,495 754 464 156 66 Total interest and dividend income 132,551 103,403 88,643 78,029 75,111 Interest expense: Deposits 29,368 14,185 7,354 4,282 3,771 Borrowed funds 17,134 9,188 3,263 1,880 1,492 Total interest expense 46,502 23,373 10,617 6,162 5,263 Net interest income 86,049 80,030 78,026 71,867 69,848 Provision (credit) for credit losses 25,542 5,725 2,835 227 (160 ) Net interest income after provision for credit losses 60,507 74,305 75,191 71,640 70,008 Non-interest income: Deposit fees 2,657 2,916 2,759 2,744 2,500 Loan fees 391 446 349 666 747 Loan level derivative income, net 2,373 670 1,275 1,615 686 Gain on investment securities, net 1,701 321 — — — Gain on sales of loans and leases held-for-sale 1,638 2,612 889 291 344 Other 4,177 2,091 1,562 1,612 1,252 Total non-interest income 12,937 9,056 6,834 6,928 5,529 Non-interest expense: Compensation and employee benefits 36,565 29,525 28,306 28,772 26,884 Occupancy 5,223 4,005 3,906 3,807 4,284 Equipment and data processing 6,462 5,758 5,066 4,931 5,078 Professional services 1,430 1,546 1,069 1,219 1,226 FDIC insurance 1,244 1,001 709 739 728 Advertising and marketing 1,410 1,052 1,337 1,319 1,272 Amortization of identified intangible assets 1,966 120 120 120 134 Merger and acquisition expense 6,409 641 1,073 535 — Other 4,067 3,577 3,373 3,429 2,881 Total non-interest expense 64,776 47,225 44,959 44,871 42,487 Income before provision for income taxes 8,668 36,136 37,066 33,697 33,050 Provision for income taxes 1,108 6,441 6,917 8,502 8,345 Net income $ 7,560 $ 29,695 $ 30,149 $ 25,195 $ 24,705 Earnings per common share: Basic $ 0.09 $ 0.39 $ 0.39 $ 0.33 $ 0.32 Diluted $ 0.09 $ 0.39 $ 0.39 $ 0.33 $ 0.32 Weighted average common shares outstanding during the period: Basic 86,563,641 76,841,655 76,779,038 77,091,013 77,617,227 Diluted 86,837,806 77,065,076 77,007,971 77,419,288 77,926,822 Dividends paid per common share $ 0.135 $ 0.135 $ 0.130 $ 0.130 $ 0.125 BROOKLINE BANCORP, INC. AND SUBSIDIARIES Asset Quality Analysis (Unaudited) At and for the Three Months Ended March 31,
2023December 31,
2022September 30,
2022June 30,
2022March 31,
2022(Dollars in Thousands) NONPERFORMING ASSETS: Loans and leases accounted for on a nonaccrual basis: Commercial real estate mortgage $ 4,589 $ 607 $ 3,136 $ 6,470 $ 8,313 Construction 3,883 707 — — — Total commercial real estate loans 8,472 1,314 3,136 6,470 8,313 Commercial 5,495 464 618 892 1,366 Equipment financing 9,908 9,653 10,544 10,183 11,685 Condominium association 51 58 64 71 77 Total commercial loans and leases 15,454 10,175 11,226 11,146 13,128 Residential mortgage 3,449 2,680 2,741 2,412 3,394 Home equity 1,079 723 616 721 680 Other consumer — 2 2 3 1 Total consumer loans 4,528 3,405 3,359 3,136 4,075 Total nonaccrual loans and leases 28,454 14,894 17,721 20,752 25,516 Other repossessed assets 508 408 591 507 990 Total nonperforming assets $ 28,962 $ 15,302 $ 18,312 $ 21,259 $ 26,506 Loans and leases past due greater than 90 days and still accruing $ 726 $ 33 $ 9,583 $ 266 $ 4 Nonperforming loans and leases as a percentage of total loans and leases 0.31 % 0.19 % 0.24 % 0.28 % 0.35 % Nonperforming assets as a percentage of total assets 0.25 % 0.17 % 0.21 % 0.25 % 0.31 % PROVISION AND ALLOWANCE FOR LOAN AND LEASE LOSSES: Allowance for loan and lease losses at beginning of period $ 98,482 $ 94,169 $ 93,188 $ 95,463 $ 99,084 Charge-offs (845 ) (658 ) (598 ) (1,533 ) (2,344 ) Recoveries 394 348 777 291 397 Net (charge-offs) recoveries (451 ) (310 ) 179 (1,242 ) (1,947 ) Provision (credit) for loan and lease losses excluding unfunded commitments * 22,834 4,623 802 (1,033 ) (1,674 ) Allowance for loan and lease losses at end of period $ 120,865 $ 98,482 $ 94,169 $ 93,188 $ 95,463 Allowance for loan and lease losses as a percentage of total loans and leases 1.31 % 1.29 % 1.27 % 1.28 % 1.32 % NET CHARGE-OFFS (RECOVERIES): Commercial real estate loans $ (6 ) $ (6 ) $ (6 ) $ (6 ) $ 31 Commercial loans and leases 457 320 (179 ) 1,254 1,948 Consumer loans — (4 ) 6 (6 ) (32 ) Total net charge-offs (recoveries) $ 451 $ 310 $ (179 ) $ 1,242 $ 1,947 Net loan and lease charge-offs as a percentage of average loans and leases (annualized) 0.02 % 0.02 % (0.01 )% 0.07 % 0.11 % *Provision for loan and lease losses does not include provision of $2.5 million, $1.0 million, $2.0 million, $1.2 million, and $1.5 million for credit losses on unfunded commitments during the three months ended March 31, 2023, December 31, 2022, September 30, 2022, June 30, 2022 and March 31, 2022, respectively. BROOKLINE BANCORP, INC. AND SUBSIDIARIES Average Yields / Costs (Unaudited) Three Months Ended March 31, 2023 December 31, 2022 March 31, 2022 Average
BalanceInterest (1) Average
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Yield/CostAverage
BalanceInterest (1) Average
Yield/Cost(Dollars in Thousands) Assets: Interest-earning assets: Investments: Debt securities (2) $ 1,029,068 $ 7,974 3.10 % $ 665,969 $ 3,497 2.10 % $ 720,263 $ 2,996 1.66 % Marketable and restricted equity securities (2) 76,911 1,255 6.53 % 52,093 766 5.88 % 27,909 328 4.70 % Short-term investments 147,654 1,495 4.05 % 60,385 754 5.00 % 192,475 66 0.14 % Total investments 1,253,633 10,724 3.42 % 778,447 5,017 2.58 % 940,647 3,390 1.44 % Loans and Leases: Commercial real estate loans (3) 5,579,977 67,667 4.85 % 4,341,929 53,088 4.78 % 4,152,414 36,027 3.47 % Commercial loans (3) 892,522 14,017 6.28 % 797,312 10,541 5.18 % 755,809 7,998 4.23 % Equipment financing (3) 1,226,717 21,213 6.92 % 1,200,911 20,816 6.93 % 1,105,194 18,012 6.52 % Residential mortgage loans (3) 1,032,025 11,073 4.29 % 842,860 8,051 3.82 % 804,939 6,992 3.47 % Other consumer loans (3) 420,047 7,997 7.71 % 382,196 5,940 6.15 % 366,534 2,750 3.04 % Total loans and leases 9,151,288 121,967 5.33 % 7,565,208 98,436 5.20 % 7,184,890 71,779 4.00 % Total interest-earning assets 10,404,921 132,691 5.10 % 8,343,655 103,453 4.96 % 8,125,537 75,169 3.70 % Non-interest-earning assets 726,166 513,976 405,506 Total assets $ 11,131,087 $ 8,857,631 $ 8,531,043 Liabilities and Stockholders' Equity: Interest-bearing liabilities: Deposits: NOW accounts $ 810,333 901 0.45 % $ 583,499 257 0.18 % $ 589,891 103 0.07 % Savings accounts 1,160,003 2,514 0.88 % 787,021 1,155 0.58 % 933,173 198 0.09 % Money market accounts 2,366,235 12,140 2.08 % 2,282,217 7,711 1.34 % 2,416,577 1,570 0.26 % Certificates of deposit 1,346,761 7,456 2.25 % 922,250 2,865 1.23 % 1,091,729 1,848 0.69 % Brokered deposit accounts 534,527 6,357 4.82 % 218,188 2,197 3.99 % 132,751 52 0.16 % Total interest-bearing deposits 6,217,859 29,368 1.92 % 4,793,175 14,185 1.17 % 5,164,121 3,771 0.30 % Borrowings Advances from the FHLBB 1,264,523 14,531 4.60 % 736,652 6,979 3.71 % 103,878 187 0.72 % Subordinated debentures and notes 84,062 1,354 6.44 % 84,025 1,332 6.34 % 83,915 1,244 5.93 % Other borrowed funds 158,499 1,249 3.20 % 148,195 877 2.35 % 130,080 61 0.19 % Total borrowings 1,507,084 17,134 4.55 % 968,872 9,188 3.71 % 317,873 1,492 1.88 % Total interest-bearing liabilities 7,724,943 46,502 2.44 % 5,762,047 23,373 1.61 % 5,481,994 5,263 0.39 % Non-interest-bearing liabilities: Demand checking accounts 1,930,162 1,843,780 1,880,039 Other non-interest-bearing liabilities 316,347 269,498 171,717 Total liabilities 9,971,452 7,875,325 7,533,750 Stockholders’ equity 1,159,635 982,306 997,293 Total liabilities and equity $ 11,131,087 $ 8,857,631 $ 8,531,043 Net interest income (tax-equivalent basis) /Interest-rate spread (4) 86,189 2.66 % 80,080 3.35 % 69,906 3.31 % Less adjustment of tax-exempt income 140 50 58 Net interest income $ 86,049 $ 80,030 $ 69,848 Net interest margin (5) 3.36 % 3.81 % 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 on an actual/actual basis. BROOKLINE BANCORP, INC. AND SUBSIDIARIES Non-GAAP Financial Information (Unaudited) At and for the Three Months Ended March 31, 2023 2022 Reconciliation Table - Non-GAAP Financial Information (Dollars in Thousands Except Share Data) Reported Pretax Income $ 8,668 $ 33,050 Less: Security gains 1,701 — Add: Day 1 PCSB CECL provision 16,744 — Merger and acquisition expense 6,409 — Operating Pretax Income $ 30,120 $ 33,050 Estimated effective tax rate 22.7 % 25.2 % Estimated taxes 6,837 8,345 Operating earnings after tax $ 23,283 $ 24,705 Operating earnings per common share: Basic $ 0.27 $ 0.32 Diluted $ 0.27 $ 0.32 Weighted average common shares outstanding during the period: Basic 86,563,641 77,617,227 Diluted 86,837,806 77,926,822 Return on average assets * 0.27 % 1.16 % Less: Security gains (after-tax) * 0.05 % — % Add: Day 1 PCSB CECL provision * 0.47 % — % Merger and acquisition expense (after-tax) * 0.18 % — % Operating return on average assets * 0.87 % 1.16 % Return on average tangible assets * 0.28 % 1.18 % Less: Security gains (after-tax) * 0.05 % — % Add: Day 1 PCSB CECL provision * 0.48 % — % Merger and acquisition expense (after-tax) * 0.18 % — % Operating return on average tangible assets * 0.89 % 1.18 % Return on average stockholders' equity * 2.61 % 9.91 % Less: Security gains (after-tax) * 0.45 % — % Add: Day 1 PCSB CECL provision * 4.46 % — % Merger and acquisition expense (after-tax) * 1.71 % — % Operating return on average stockholders' equity * 8.33 % 9.91 % Return on average tangible stockholders' equity * 3.43 % 11.84 % Less: Security gains (after-tax) * 0.60 % — % Add: Day 1 PCSB CECL provision * 5.87 % — % Merger and acquisition expense (after-tax) * 2.25 % — % Operating return on average tangible stockholders' equity * 10.95 % 11.84 % * Ratios at and for the three months ended are annualized. At and for the Three Months Ended March 31,
2023December 31,
2022September 30,
2022June 30,
2022March 31,
2022(Dollars in Thousands) Net income, as reported $ 7,560 $ 29,695 $ 30,149 $ 25,195 $ 24,705 Average total assets $ 11,131,087 $ 8,857,631 $ 8,586,420 $ 8,515,330 $ 8,531,043 Less: Average goodwill and average identified intangible assets, net 278,135 162,266 162,387 162,507 162,632 Average tangible assets $ 10,852,952 $ 8,695,365 $ 8,424,033 $ 8,352,823 $ 8,368,411 Return on average tangible assets (annualized) 0.28 % 1.37 % 1.43 % 1.21 % 1.18 % Average total stockholders’ equity $ 1,159,635 $ 982,306 $ 981,379 $ 976,167 $ 997,293 Less: Average goodwill and average identified intangible assets, net 278,135 162,266 162,387 162,507 162,632 Average tangible stockholders’ equity $ 881,500 $ 820,040 $ 818,992 $ 813,660 $ 834,661 Return on average tangible stockholders’ equity (annualized) 3.43 % 14.48 % 14.72 % 12.39 % 11.84 % Total stockholders’ equity $ 1,165,066 $ 992,125 $ 963,618 $ 968,496 $ 981,935 Less: Goodwill 241,222 160,427 160,427 160,427 160,427 Identified intangible assets, net 30,080 1,781 1,902 2,022 2,142 Tangible stockholders' equity $ 893,764 $ 829,917 $ 801,289 $ 806,047 $ 819,366 Total assets $ 11,522,485 $ 9,185,836 $ 8,695,708 $ 8,514,230 $ 8,633,736 Less: Goodwill 241,222 160,427 160,427 160,427 160,427 Identified intangible assets, net 30,080 1,781 1,902 2,022 2,142 Tangible assets $ 11,251,183 $ 9,023,628 $ 8,533,379 $ 8,351,781 $ 8,471,167 Tangible stockholders’ equity to tangible assets 7.94 % 9.20 % 9.39 % 9.65 % 9.67 % Tangible stockholders' equity $ 893,764 $ 829,917 $ 801,289 $ 806,047 $ 819,366 Number of common shares issued 96,998,075 85,177,172 85,177,172 85,177,172 85,177,172 Less: Treasury shares 7,734,891 7,731,445 7,730,945 7,995,888 7,037,464 Unallocated ESOP shares — — 4,833 11,442 18,051 Unvested restricted shares 598,049 601,495 601,995 497,297 500,098 Number of common shares outstanding 88,665,135 76,844,232 76,839,399 76,672,545 77,621,559 Tangible book value per common share $ 10.08 $ 10.80 $ 10.43 $ 10.51 $ 10.56 PDF available: http://ml.globenewswire.com/Resource/Download/bbc06783-cc3a-44b0-adc8-09afc853bed9