Brookline Bancorp Announces First Quarter Results Reflecting One-Time Costs Associated with PCSB Financial Corporation Acquisition

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.com

BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Selected Financial Highlights (Unaudited)
	At and for the Three Months Ended
	March 31, 2023				December 31, 2022				September 30, 2022				June 30, 2022				March 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, 2023			December 31, 2022			September 30, 2022			June 30, 2022			March 31, 2022
ASSETS	(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, 2023		December 31, 2022			September 30, 2022			June 30, 2022			March 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, 2023			December 31, 2022			September 30, 2022			June 30, 2022			March 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 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)	$	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, 2023			December 31, 2022			September 30, 2022			June 30, 2022			March 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

  

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