Brookline Bancorp Announces Second Quarter Results

Net Income of $19.6 million, EPS of $0.25

Announces $0.115 Dividend per Share

BOSTON, July 22, 2020 (GLOBE NEWSWIRE) -- Brookline Bancorp, Inc. (NASDAQ: BRKL) (the “Company”) today announced net income of $19.6 million, or $0.25 per basic and diluted share, for the second quarter of 2020, compared to net loss of $(17.3) million, or $(0.22) per basic and diluted share, for the first quarter of 2020, and net income of $20.5 million, or $0.26 per basic and diluted share, for the second quarter of 2019.

Paul Perrault, President and Chief Executive Officer of the Company noted, “The continued strength of our Company’s core operations is reflected in this quarter’s earnings.  While we remain vigilant as we look to the future, the business lines that are fundamental to our success continue to operate effectively in these challenging times.”

BALANCE SHEET

Total assets at June 30, 2020 increased $608.1 million to $9.1 billion from $8.5 billion at March 31, 2020, and increased $1.4 billion from $7.6 billion at June 30, 2019. At June 30, 2020, total loans and leases were $7.4 billion, representing an increase of $585.2 million from March 31, 2020, and an increase of $902.4 million from June 30, 2019, primarily driven by loans originated under the Small Business Administration's Paycheck Protection Program ("PPP"). The Company funded $565.8 million of PPP loans in the second quarter of 2020.

Total investment securities at June 30, 2020 increased $92.4 million to $856.5 million, as compared to $764.1 million at March 31, 2020, and increased approximately $265.7 million from $590.8 million at June 30, 2019. Total cash and cash equivalents at June 30, 2020 decreased $85.9 million to $254.9 million, as compared to $340.8 million at March 31, 2020, and increased $162.1 million from $92.8 million at June 30, 2019. As of June 30, 2020, total investment securities and total cash and cash equivalents represented 12.3 percent of total assets as compared to 13.1 percent and 9.0 percent as of March 31, 2020 and June 30, 2019, respectively.

Total deposits at June 30, 2020 increased $550.3 million to $6.4 billion from $5.9 billion at March 31, 2020 and increased $817.7 million from $5.6 billion at June 30, 2019.

Total borrowed funds at June 30, 2020 increased $114.9 million to $1.4 billion from $1.3 billion at March 31, 2020 and increased $475.9 million from $930.8 million at June 30, 2019.

The ratio of stockholders’ equity to total assets was 10.21 percent at June 30, 2020, as compared to 10.78 percent at March 31, 2020, and 12.03 percent at June 30, 2019. The ratio of tangible stockholders’ equity to tangible assets was 8.56 percent at June 30, 2020, as compared to 9.02 percent at March 31, 2020, and 10.08 percent at June 30, 2019. Tangible book value per share increased $0.18 from $9.49 at March 31, 2020 to $9.67 at June 30, 2020, compared to $9.45 at June 30, 2019.

NET INTEREST INCOME

Net interest income increased $2.6 million to $64.3 million during the second quarter of 2020 from $61.7 million at the quarter ended March 31, 2020. The net interest margin decreased 22 basis points to 3.09 percent for the three months ended June 30, 2020.

NON-INTEREST INCOME

Total non-interest income for the quarter ended June 30, 2020 decreased $3.1 million to $6.2 million from $9.3 million for the quarter ended March 31, 2020. The decrease was primarily driven by decreases of $0.5 million in deposit fees, $0.7 million in loan level derivative income, net, $0.7 million in gain on investment securities, net and $1.2 million in other non-interest income.

PROVISION FOR CREDIT LOSSES

On January 1, 2020, the Company adopted ASU 2016-13 "Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments", commonly referred to as CECL. 

The Company recorded a provision for credit losses of  $5.3 million for the quarter ended June 30, 2020, compared to $54.1 million for the quarter ended March 31, 2020. Asset quality was consistent during the second quarter and the increase in provision was primarily driven by the forecasted economic effect of the COVID-19 pandemic.

Total net charge-offs for the second quarter of 2020 were $1.4 million compared to $2.2 million in the first quarter of 2020. The ratio of net loan and lease charge-offs to average loans and leases on an annualized basis decreased to 8 basis points for the second quarter of 2020 from 13 basis points for the first quarter of 2020.

The allowance for loan and lease losses represented 1.61 percent of total loans and leases at June 30, 2020, compared to 1.66 percent at March 31, 2020, and 0.90 percent at June 30, 2019. Excluding PPP loans, the allowance for loan losses and lease losses represents 1.75 percent coverage at June 30, 2020 compared to 1.66 percent at March 31, 2020.

NON-INTEREST EXPENSE

Non-interest expense for the quarter ended June 30, 2020 decreased $1.6 million to $39.1 million from $40.7 million for the quarter ended March 31, 2020. The decrease was primarily driven by decreases of $0.6 million in compensation and employee benefits expense, $0.5 million in equipment and data processing expense, and $0.5 million in professional services expense.

PROVISION FOR INCOME TAXES

The effective tax rate was 24.9 percent and a negative 2.2 percent for the three and six months ended June 30, 2020 compared to 27.5 percent for the three months ended March 31, 2020 and 24.9 percent and 24.1 percent for the three and six months ended June 30, 2019.

RETURNS ON AVERAGE ASSETS AND AVERAGE EQUITY

The annualized return on average assets increased to 0.88 percent during the second quarter 2020 from a negative 0.87 percent for the first quarter of 2020.

The annualized return on average stockholders' equity increased to 8.45 percent during the second quarter of 2020 from a negative 7.30 percent for the first quarter of 2020. The annualized return on average tangible stockholders’ equity increased to 10.28 percent for the second quarter of 2020 from a negative 8.84 percent for the first quarter of 2020.

ASSET QUALITY

The ratio of nonperforming loans and leases to total loans and leases was 0.56 percent at June 30, 2020, a decrease from 0.57 percent at March 31, 2020. Nonperforming loans and leases increased $2.2 million to $41.3 million at June 30, 2020 from $39.1 million at March 31, 2020. The ratio of nonperforming assets to total assets was 0.47 percent at June 30, 2020, a decrease from 0.49 percent at March 31, 2020. Nonperforming assets increased $1.6 million to $42.8 million at June 30, 2020 from $41.1 million at March 31, 2020.

From March 1, 2020 through the earlier of December 31, 2020 or 60 days after the termination date of the national emergency declared by the President on March 13, 2020 concerning the COVID-19 outbreak (the “national emergency”), a financial institution may elect to suspend the requirements under accounting principles generally accepted in the U.S. for loan modifications related to the COVID-19 pandemic that would otherwise be categorized as a troubled debt restructured, including impairment accounting. This troubled debt restructuring relief applies for the term of the loan modification that occurs during the applicable period for a loan that was not more than 30 days past due as of December 31, 2019. Financial institutions are required to maintain records of the volume of loans involved in modifications to which troubled debt restructuring relief is applicable. As of June 30, 2020, the banks have granted 5,366 short-term deferments on loan balances of $1.2 billion, which represented 16 percent of total loan balances.

DIVIDEND DECLARED

The Company’s Board of Directors approved a dividend of $0.115 per share for the quarter ended June 30, 2020. The dividend will be paid on August 21, 2020 to stockholders of record on August 7, 2020.

CONFERENCE CALL

The Company will conduct a conference call/webcast at 1:30 PM Eastern Daylight Time on Thursday, July 23, 2020 to discuss the results for the quarter, business highlights and outlook. The call can be accessed by dialing 877-504-4120 (United States) or 412-902-6650 (internationally) or by visiting https://services.choruscall.com/links/brkl200723.html.  A recorded playback of the call will be available for one week following the call at 877-344-7529 (United States) or 412-317-0088 (internationally). The passcode for the playback is 10145885. The call will be available live and in a recorded version on the Company’s website under “Investor Relations” at www.brooklinebancorp.com.

ABOUT BROOKLINE BANCORP, INC.

Brookline Bancorp, Inc., a bank holding company with $9.1 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. Statements contained in this press release that do not describe historical or current facts are forward-looking statements, including statements regard the potential effects of COVID-19 on the Company’s business, credit quality, financial condition, liquidity and results of operations. Forward-looking statements made with regard to the potential effects of COVID-19 on the Company’s business, financial condition, credit quality, liquidity and results of operation 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, the length and extent of the economic contraction as a result of the COVID-19 pandemic; continued deterioration in employment levels, general business and economic conditions on a national basis and in the local markets in which the Company operates; the possibility that future credit losses may be higher than currently expected; changes in consumer behavior due to changing political business and economic conditions or legislative or regulatory initiatives; the possibility that future credit losses may be higher than currently expected; reputational risk relating to the Company’s participation in the Paycheck Protection Program and other pandemic-related legislative and regulatory initiatives and programs; and 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 Securities and Exchange Commission ("SEC"). The Company does not undertake any obligation to update any forward-looking statement to reflect circumstances or events that occur after the date the forward-looking statements are made.

BASIS OF PRESENTATION

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

NON-GAAP FINANCIAL MEASURES

The Company uses certain non-GAAP financial measures, such as operating earnings, operating return on average assets, operating return on average tangible assets, operating return on average stockholders' equity, operating return on average tangible stockholders' equity, the allowance for loan and lease losses related to originated loans and leases as a percentage of originated loans and leases, tangible book value per common share, tangible stockholders’ equity to tangible assets, return on average tangible assets (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. Chief Financial Officer [phone] [e-mail]

BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Selected Financial Highlights (Unaudited)
	At and for the Three Months Ended
	June 30, 2020				March 31, 2020				December 31, 2019				September 30, 2019				June 30, 2019
	(Dollars In Thousands Except per Share Data)
Earnings Data:
Net interest income	$	64,288			$	61,712			$	63,931			$	63,236			$	63,134
Provision for credit losses		5,347				54,114				3,602				871				3,757
Non-interest income		6,235				9,328				7,756				7,929				7,478
Non-interest expense		39,109				40,748				38,815				40,191				39,604
Income (loss) before provision for income taxes		26,067				(23,822	)			29,270				30,103				27,251
Net income (loss) attributable to Brookline Bancorp, Inc.		19,571				(17,276	)			22,183				22,596				20,471
Performance Ratios:
Net interest margin (1)		3.09	%			3.31	%			3.43	%			3.45	%			3.55	%
Interest-rate spread (1)		2.75	%			2.91	%			3.05	%			3.06	%			3.13	%
Return on average assets (annualized)		0.88	%			(0.87	)%			1.13	%			1.17	%			1.08	%
Return on average tangible assets (annualized) (non-GAAP)		0.90	%			(0.89	)%			1.15	%			1.19	%			1.11	%
Return on average stockholders' equity (annualized)		8.45	%			(7.30	)%			9.42	%			9.74	%			8.98	%
Return on average tangible stockholders' equity (annualized) (non-GAAP)		10.28	%			(8.84	)%			11.42	%			11.85	%			10.98	%
Efficiency ratio (2)		55.46	%			57.36	%			54.15	%			56.48	%			56.09	%
Per Common Share Data:
Net income (loss) — Basic	$	0.25			$	(0.22	)		$	0.28			$	0.28			$	0.26
Net income (loss) — Diluted		0.25				(0.22	)			0.28				0.28				0.26
Cash dividends declared		0.115				0.115				0.115				0.115				0.110
Book value per share (end of period)		11.75				11.57				11.87				11.70				11.53
Tangible book value per share (end of period) (non-GAAP)		9.67				9.49				9.80				9.63				9.45
Stock price (end of period)		10.08				11.28				16.46				14.73				15.38
Balance Sheet:
Total assets	$	9,069,667			$	8,461,591			$	7,856,853			$	7,878,436			$	7,636,980
Total loans and leases		7,407,697				6,822,527				6,737,816				6,646,821				6,505,329
Total deposits		6,440,233				5,889,938				5,830,072				5,729,339				5,622,493
Brookline Bancorp, Inc. stockholders’ equity		926,413				912,568				945,606				932,311				918,468
Asset Quality:
Nonperforming assets	$	42,754			$	41,122			$	22,092			$	23,760			$	23,267
Nonperforming assets as a percentage of total assets		0.47	%			0.49	%			0.28	%			0.30	%			0.30	%
Allowance for loan and lease losses	$	119,553			$	113,181			$	61,082			$	59,135			$	58,635
Allowance for loan and lease losses as a percentage of total loans and leases		1.61	%			1.66	%			0.91	%			0.89	%			0.90	%
Net loan and lease charge-offs	$	1,383			$	2,234			$	1,622			$	366			$	3,082
Net loan and lease charge-offs as a percentage of average loans and leases (annualized)		0.08	%			0.13	%			0.10	%			0.02	%			0.19	%
Capital Ratios:
Stockholders’ equity to total assets		10.21	%			10.78	%			12.04	%			11.83	%			12.03	%
Tangible stockholders’ equity to tangible assets (non-GAAP)		8.56	%			9.02	%			10.15	%			9.94	%			10.08	%

(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)
	June 30, 2020				March 31, 2020				December 31, 2019				September 30, 2019				June 30, 2019
ASSETS	(In Thousands Except Share Data)
Cash and due from banks	$	38,522			$	86,996			$	33,589			$	93,841			$	46,532
Short-term investments		216,394				253,772				44,201				84,689				46,264
Total cash and cash equivalents		254,916				340,768				77,790				178,530				92,796
Investment securities available-for-sale		854,505				761,539				498,995				467,339				482,497
Investment securities held-to-maturity		—				—				86,780				95,163				103,572
Equity securities held-for-trading		1,992				2,558				3,581				4,581				4,698
Total investment securities		856,497				764,097				589,356				567,083				590,767
Loans and leases held-for-sale		—				—				—				—				1,575
Loans and leases:
Commercial real estate loans		3,837,703				3,762,158				3,669,222				3,589,451				3,493,554
Commercial loans and leases		2,361,463				1,826,866				1,838,748				1,850,388				1,826,336
Consumer loans		1,208,531				1,233,503				1,229,846				1,206,982				1,185,439
Total loans and leases		7,407,697				6,822,527				6,737,816				6,646,821				6,505,329
Allowance for loan and lease losses		(119,553	)			(113,181	)			(61,082	)			(59,135	)			(58,635	)
Net loans and leases		7,288,144				6,709,346				6,676,734				6,587,686				6,446,694
Restricted equity securities		71,638				68,472				53,818				57,896				55,270
Premises and equipment, net of accumulated depreciation		73,127				73,786				74,350				75,229				75,373
Right-of-use asset operating leases		24,343				24,789				24,876				26,216				25,928
Deferred tax asset		42,683				38,141				25,017				25,204				25,629
Goodwill		160,427				160,427				160,427				160,427				160,427
Identified intangible assets, net of accumulated amortization		3,775				4,087				4,423				4,843				5,264
Other real estate owned and repossessed assets		1,454				2,038				2,631				2,132				1,966
Other assets		292,663				275,640				167,431				193,190				155,291
Total assets	$	9,069,667			$	8,461,591			$	7,856,853			$	7,878,436			$	7,636,980
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Demand checking accounts	$	1,603,037			$	1,175,329			$	1,141,578			$	1,106,684			$	1,042,854
NOW accounts		417,622				361,854				371,380				340,321				340,082
Savings accounts		657,758				653,026				613,467				604,481				585,322
Money market accounts		1,809,868				1,676,092				1,682,005				1,666,231				1,669,782
Certificate of deposit accounts		1,951,948				2,023,637				2,021,642				2,011,622				1,984,453
Total deposits		6,440,233				5,889,938				5,830,072				5,729,339				5,622,493
Borrowed funds:
Advances from the FHLBB		1,267,570				1,137,431				758,469				854,481				791,559
Subordinated debentures and notes		83,668				83,630				83,591				83,551				83,512
Other borrowed funds		55,431				70,743				60,689				48,373				55,693
Total borrowed funds		1,406,669				1,291,804				902,749				986,405				930,764
Operating lease liabilities		24,343				24,789				24,876				26,216				25,928
Mortgagors’ escrow accounts		6,467				7,441				7,232				7,072				6,823
Reserve for unfunded credits		14,816				17,222				1,880				1,847				1,841
Accrued expenses and other liabilities		250,726				317,829				144,438				195,246				130,663
Total liabilities		8,143,254				7,549,023				6,911,247				6,946,125				6,718,512
Stockholders' equity:
Brookline Bancorp, Inc. 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		738,155				737,422				736,601				735,928				737,584
Retained earnings, partially restricted		237,808				227,359				265,376				252,435				238,625
Accumulated other comprehensive income (loss)		19,538				16,947				2,283				2,775				1,141
Treasury stock, at cost;
5,859,708, 5,862,811, 5,003,127, 5,003,127, and 5,025,764 shares, respectively		(69,572	)			(69,617	)			(59,073	)			(59,176	)			(59,199	)
Unallocated common stock held by the Employee Stock Ownership Plan;
65,334, 72,441 79,548, 92,337, and 98,208 shares, respectively		(368	)			(395	)			(433	)			(503	)			(535	)
Total stockholders' equity		926,413				912,568				945,606				932,311				918,468
Total liabilities and stockholders' equity	$	9,069,667			$	8,461,591			$	7,856,853			$	7,878,436			$	7,636,980

BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Consolidated Statements of Income (Unaudited)
	Three Months Ended
	June 30, 2020			March 31, 2020				December 31, 2019			September 30, 2019				June 30, 2019
	(In Thousands Except Share Data)
Interest and dividend income:
Loans and leases	$	77,416		$	79,559			$	83,309		$	83,566			$	82,798
Debt securities		3,701			2,976				2,910			2,977				3,158
Marketable and restricted equity securities		908			778				813			876				877
Short-term investments		99			209				418			487				351
Total interest and dividend income		82,124			83,522				87,450			87,906				87,184
Interest expense:
Deposits		12,778			16,240				17,655			18,300				17,712
Borrowed funds		5,058			5,570				5,864			6,370				6,338
Total interest expense		17,836			21,810				23,519			24,670				24,050
Net interest income		64,288			61,712				63,931			63,236				63,134
Provision for credit losses		5,347			54,114				3,602			871				3,757
Net interest income after provision for credit losses		58,941			7,598				60,329			62,365				59,377
Non-interest income:
Deposit fees		1,929			2,458				2,710			2,710				2,680
Loan fees		513			550				567			719				398
Loan level derivative income, net		1,440			2,156				2,494			2,251				1,772
Gain (loss) on investment securities, net		586			1,330				133			(116	)			357
Gain on sales of loans and leases held-for-sale		299			120				309			550				561
Other		1,468			2,714				1,543			1,815				1,710
Total non-interest income		6,235			9,328				7,756			7,929				7,478
Non-interest expense:
Compensation and employee benefits		24,619			25,219				23,987			24,871				23,953
Occupancy		3,825			3,953				4,102			3,895				3,752
Equipment and data processing		4,155			4,703				4,601			4,749				4,641
Professional services		1,056			1,651				1,120			1,083				1,087
FDIC insurance		858			378				53			54				745
Advertising and marketing		1,017			1,075				828			1,035				1,112
Amortization of identified intangible assets		311			336				420			421				420
Merger and restructuring expense		—			—				—			1,125				—
Other		3,268			3,433				3,704			2,958				3,894
Total non-interest expense		39,109			40,748				38,815			40,191				39,604
Income (loss) before provision for income taxes		26,067			(23,822	)			29,270			30,103				27,251
Provision (benefit) for income taxes		6,496			(6,546	)			7,087			7,507				6,780
Net income (loss) attributable to Brookline Bancorp, Inc.	$	19,571		$	(17,276	)		$	22,183		$	22,596			$	20,471
Earnings per common share:
Basic	$	0.25		$	(0.22	)		$	0.28		$	0.28			$	0.26
Diluted	$	0.25		$	(0.22	)		$	0.28		$	0.28			$	0.26
Weighted average common shares outstanding during the period:
Basic		78,849,282			79,481,462				79,682,724			79,700,403				79,669,922
Diluted		79,015,274			79,665,774				79,845,447			79,883,510				79,886,292
Dividends paid per common share	$	0.115		$	0.115			$	0.115		$	0.110			$	0.110

BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Consolidated Statements of Income (Unaudited)
	Six Months Ended June 30,
	2020				2019
	(In Thousands Except Share Data)
Interest and dividend income:
Loans and leases	$	156,975			$	163,470
Debt securities		6,677				6,394
Marketable and restricted equity securities		1,686				1,788
Short-term investments		308				618
Total interest and dividend income		165,646				172,270
Interest expense:
Deposits		29,018				33,660
Borrowed funds		10,628				12,477
Total interest expense		39,646				46,137
Net interest income		126,000				126,133
Provision for credit losses		59,461				5,110
Net interest income after provision for credit losses		66,539				121,023
Non-interest income:
Deposit Fees		4,387				5,203
Loan Fees		1,063				811
Loan level derivative income, net		3,596				3,517
Gain on investment securities, net		1,916				491
Gain on sales of loans and leases held-for-sale		419				850
Other		4,182				3,236
Total non-interest income		15,563				14,108
Non-interest expense:
Compensation and employee benefits		49,838				47,696
Occupancy		7,778				7,699
Equipment and data processing		8,858				9,302
Professional services		2,707				2,163
FDIC insurance		1,236				1,338
Advertising and marketing		2,092				2,181
Amortization of identified intangible assets		647				822
Other		6,701				7,274
Total non-interest expense		79,857				78,475
Income before provision for income taxes		2,245				56,656
(Benefit) provision for income taxes		(50	)			13,675
Net income before noncontrolling interest in subsidiary		2,295				42,981
Less net income attributable to noncontrolling interest in subsidiary		—				43
Net income attributable to Brookline Bancorp, Inc.	$	2,295			$	42,938
Earnings per common share:
Basic	$	0.03			$	0.54
Diluted	$	0.03			$	0.54
Weighted average common shares outstanding during the period:
Basic		79,165,372				79,664,284
Diluted		79,340,524				79,859,572
Dividends paid per common share	$	0.230			$	0.215

BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Asset Quality Analysis (Unaudited)
	At and for the Three Months Ended
	June 30, 2020				March 31, 2020				December 31, 2019				September 30, 2019				June 30, 2019
	(Dollars in Thousands)
NONPERFORMING ASSETS:
Loans and leases accounted for on a nonaccrual basis:
Commercial real estate mortgage	$	10,139			$	10,937			$	2,845			$	2,910			$	2,273
Multi-family mortgage		—				85				84				87				94
Total commercial real estate loans		10,139				11,022				2,929				2,997				2,367
Commercial		12,427				12,991				4,909				3,139				6,349
Equipment financing		13,100				10,356				9,822				12,817				9,931
Condominium association		190				203				151				163				170
Total commercial loans and leases		25,717				23,550				14,882				16,119				16,450
Residential mortgage		4,157				3,446				753				1,605				1,642
Home equity		1,278				1,059				896				904				835
Other consumer		9				7				1				3				7
Total consumer loans		5,444				4,512				1,650				2,512				2,484
Total nonaccrual loans and leases		41,300				39,084				19,461				21,628				21,301
Other real estate owned		—				—				—				201				957
Other repossessed assets		1,454				2,038				2,631				1,931				1,009
Total nonperforming assets	$	42,754			$	41,122			$	22,092			$	23,760			$	23,267
Loans and leases past due greater than 90 days and still accruing	$	1,974			$	1,045			$	10,109			$	11,885			$	11,612
Troubled debt restructurings on accrual		10,172				16,480				17,076				22,233				27,761
Troubled debt restructurings on nonaccrual		5,972				5,819				6,104				5,763				8,431
Total troubled debt restructurings	$	16,144			$	22,299			$	23,180			$	27,996			$	36,192
Nonperforming loans and leases as a percentage of total loans and leases		0.56	%			0.57	%			0.29	%			0.33	%			0.33	%
Nonperforming assets as a percentage of total assets		0.47	%			0.49	%			0.28	%			0.30	%			0.30	%
PROVISION AND ALLOWANCE FOR LOAN AND LEASE LOSSES:
Allowance for loan and lease losses at beginning of period	$	113,181			$	61,082			$	59,135			$	58,635			$	58,041
CECL adjustment to retained earnings		—				6,632				—				—				—
Charge-offs		(1,803	)			(2,539	)			(1,894	)			(1,190	)			(3,412	)
Recoveries		420				305				272				824				330
Net charge-offs		(1,383	)			(2,234	)			(1,622	)			(366	)			(3,082	)
Provision for loan and lease losses excluding unfunded commitments *		7,755				47,701				3,569				866				3,676
Allowance for loan and lease losses at end of period	$	119,553			$	113,181			$	61,082			$	59,135			$	58,635
Allowance for loan and lease losses as a percentage of total loans and leases		1.61	%			1.66	%			0.91	%			0.89	%			0.90	%
NET CHARGE-OFFS:
Commercial real estate loans	$	(94	)		$	—			$	—			$	—			$	—
Commercial loans and leases		1,498				2,280				1,589				403				3,107
Consumer loans		(21	)			(46	)			33				(37	)			(25	)
Total net charge-offs	$	1,383			$	2,234			$	1,622			$	366			$	3,082
Net loan and lease charge-offs as a percentage of average loans and leases (annualized)		0.08	%			0.13	%			0.10	%			0.02	%			0.19	%

*provision for loan and lease losses does not include provision of $2.4 million and $6.4 million for credit losses on unfunded commitments during the three months ended June 30, 2020 and March 31, 2020, respectively.

BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Average Yields / Costs (Unaudited)
	Three Months Ended
	June 30, 2020									March 31, 2020									June 30, 2019
	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)	$	773,523		$	3,719		1.92	%		$	605,885		$	3,024		2.00	%		$	593,404		$	3,210		2.16	%
Marketable and restricted equity securities (2)		71,058			915		5.15	%			58,881			786		5.33	%			59,224			888		5.99	%
Short-term investments		245,577			99		0.16	%			84,309			209		0.99	%			44,634			351		3.14	%
Total investments		1,090,158			4,733		1.74	%			749,075			4,019		2.15	%			697,262			4,449		2.55	%
Loans and Leases:
Commercial real estate loans (3)		3,761,667			36,829		3.87	%			3,697,011			40,468		4.33	%			3,447,136			41,363		4.75	%
Commercial loans (3)		1,234,537			10,450		3.35	%			783,309			8,328		4.21	%			811,890			9,879		4.82	%
Equipment financing (3)		1,069,192			18,973		7.10	%			1,052,846			18,946		7.20	%			1,005,376			18,291		7.28	%
Residential mortgage loans (3)		814,431			8,068		3.96	%			810,583			7,934		3.92	%			774,533			8,186		4.23	%
Other consumer loans (3)		411,326			3,153		3.07	%			417,815			3,955		3.79	%			417,600			5,187		4.97	%
Total loans and leases		7,291,153			77,473		4.25	%			6,761,564			79,631		4.71	%			6,456,535			82,906		5.14	%
Total interest-earning assets		8,381,311			82,206		3.92	%			7,510,639			83,650		4.46	%			7,153,797			87,355		4.88	%
Non-interest-earning assets		488,229									455,187									417,599
Total assets	$	8,869,540								$	7,965,826								$	7,571,396
Liabilities and Stockholders' Equity:
Interest-bearing liabilities:
Deposits:
NOW accounts	$	395,158			114		0.12	%		$	359,641			116		0.13	%		$	343,745			50		0.06	%
Savings accounts		663,782			357		0.22	%			626,945			643		0.41	%			602,333			737		0.49	%
Money market accounts		1,784,343			2,074		0.47	%			1,678,649			4,241		1.02	%			1,683,735			5,571		1.33	%
Certificates of deposit		2,019,195			10,233		2.04	%			2,040,903			11,240		2.22	%			1,950,704			11,354		2.33	%
Total interest-bearing deposits		4,862,478			12,778		1.06	%			4,706,138			16,240		1.39	%			4,580,517			17,712		1.55	%
Borrowings
Advances from the FHLBB		1,102,079			3,751		1.35	%			772,462			4,097		2.10	%			761,651			4,825		2.51	%
Subordinated debentures and notes		83,647			1,263		6.04	%			83,609			1,284		6.14	%			83,490			1,305		6.25	%
Other borrowed funds		70,795			44		0.25	%			91,052			189		0.84	%			84,600			208		0.99	%
Total borrowings		1,256,521			5,058		1.59	%			947,123			5,570		2.33	%			929,741			6,338		2.70	%
Total interest-bearing liabilities		6,118,999			17,836		1.17	%			5,653,261			21,810		1.55	%			5,510,258			24,050		1.75	%
Non-interest-bearing liabilities:
Demand checking accounts		1,512,089									1,134,314									1,015,524
Other non-interest-bearing liabilities		312,213									232,113									133,790
Total liabilities		7,943,301									7,019,688									6,659,572
Stockholders’ equity		926,239									946,138									911,824
Noncontrolling interest in subsidiary		—									—									—
Total liabilities and equity	$	8,869,540								$	7,965,826								$	7,571,396
Net interest income (tax-equivalent basis) /Interest-rate spread (4)					64,370		2.75	%						61,840		2.91	%						63,305		3.13	%
Less adjustment of tax-exempt income					82									128									171
Net interest income				$	64,288								$	61,712								$	63,134
Net interest margin (5)							3.09	%								3.31	%								3.55	%
(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)
	Six Months Ended
	June 30, 2020									June 30, 2019
	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)	$	689,704		$	6,743		1.96	%		$	600,758		$	6,499		2.16	%
Marketable and restricted equity securities (2)		64,968			1,701		5.24	%			59,803			1,808		6.05	%
Short-term investments		164,943			308		0.37	%			38,866			618		3.18	%
Total investments		919,615			8,752		1.90	%			699,427			8,925		2.55	%
Loans and Leases:
Commercial real estate loans (3)		3,729,339			77,297		4.10	%			3,412,051			81,382		4.74	%
Commercial loans (3)		1,008,923			18,778		3.68	%			802,346			19,482		4.83	%
Equipment financing (3)		1,061,019			37,919		7.15	%			996,832			36,276		7.28	%
Residential mortgage loans (3)		812,507			16,002		3.94	%			776,419			16,309		4.20	%
Other consumer loans (3)		414,570			7,108		3.43	%			412,914			10,238		4.99	%
Total loans and leases		7,026,358			157,104		4.47	%			6,400,562			163,687		5.11	%
Total interest-earning assets		7,945,973			165,856		4.17	%			7,099,989			172,612		4.86	%
Non-interest-earning assets		471,710									403,107
Total assets	$	8,417,683								$	7,503,096
Liabilities and Stockholders' Equity:
Interest-bearing liabilities:
Deposits:
NOW accounts	$	377,399			230		0.12	%		$	338,983			192		0.11	%
Savings accounts		645,363			1,000		0.31	%			614,307			1,334		0.44	%
Money market accounts		1,731,496			6,315		0.73	%			1,679,988			10,846		1.30	%
Certificates of deposit		2,030,049			21,473		2.13	%			1,897,901			21,288		2.26	%
Total interest-bearing deposits		4,784,307			29,018		1.22	%			4,531,179			33,660		1.50	%
Borrowings
Advances from the FHLBB		937,271			7,848		1.66	%			758,613			9,435		2.47	%
Subordinated debentures and notes		83,628			2,547		6.09	%			83,471			2,613		6.26	%
Other borrowed funds		80,924			233		0.58	%			86,589			429		1.00	%
Total borrowings		1,101,823			10,628		1.91	%			928,673			12,477		2.67	%
Total interest-bearing liabilities		5,886,130			39,646		1.35	%			5,459,852			46,137		1.70	%
Non-interest-bearing liabilities:
Demand checking accounts		1,323,202									1,021,215
Other non-interest-bearing liabilities		272,162									122,544
Total liabilities		7,481,494									6,603,611
Brookline Bancorp, Inc. stockholders’ equity		936,189									899,301
Noncontrolling interest in subsidiary		—									184
Total liabilities and equity	$	8,417,683								$	7,503,096
Net interest income (tax-equivalent basis) /Interest-rate spread (4)					126,210		2.82	%						126,475		3.16	%
Less adjustment of tax-exempt income					210									342
Net interest income				$	126,000								$	126,133
Net interest margin (5)							3.19	%								3.59	%
(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 June 30,								At and for the Six Months Ended June 30,
						2020				2019				2020				2019
Reconciliation Table - Non-GAAP Financial Information					(Dollars in Thousands Except Share Data)
Net income attributable to Brookline Bancorp, Inc.					$	19,571			$	20,471			$	2,295			$	42,938
Less:
Security gains (after-tax)						440				268				1,958				373
Operating earnings					$	19,131			$	20,203			$	337			$	42,565
Operating earnings per common share:
Basic					$	0.24			$	0.25			$	—			$	0.53
Diluted						0.24				0.25				—				0.53
Weighted average common shares outstanding during the period:
Basic						78,849,282				79,669,922				79,165,372				79,664,284
Diluted						79,015,274				79,886,292				79,340,524				79,859,572
Return on average assets *						0.88	%			1.08	%			0.05	%			1.14	%
Less:
Security gains (after-tax) *						0.02	%			0.01	%			0.04	%			0.01	%
Operating return on average assets *						0.86	%			1.07	%			0.01	%			1.13	%
Return on average tangible assets *						0.90	%			1.11	%			0.06	%			1.17	%
Less:
Security gains (after-tax) *						0.02	%			0.02	%			0.05	%			0.01	%
Operating return on average tangible assets *						0.88	%			1.09	%			0.01	%			1.16	%
Return on average stockholders' equity *						8.45	%			8.98	%			0.49	%			9.55	%
Less:
Security gains (after-tax) *						0.19	%			0.12	%			0.42	%			0.08	%
Operating return on average stockholders' equity *						8.26	%			8.86	%			0.07	%			9.47	%
Return on average tangible stockholders' equity *						10.28	%			10.98	%			0.59	%			11.71	%
Less:
Security gains (after-tax) *						0.24	%			0.15	%			0.50	%			0.10	%
Operating return on average tangible stockholders' equity *						10.04	%			10.83	%			0.09	%			11.61	%
* Ratios at and for the three and six months ended are annualized.
	At and for the Three Months Ended
	June 30, 2020				March 31, 2020				December 31, 2019				September 30, 2019				June 30, 2019
	(Dollars in Thousands)
Net income (loss), as reported	$	19,571			$	(17,276	)		$	22,183			$	22,596			$	20,471
Average total assets	$	8,869,540			$	7,965,826			$	7,860,593			$	7,746,492			$	7,571,396
Less: Average goodwill and average identified intangible assets, net		164,385				164,701				165,071				165,493				165,914
Average tangible assets	$	8,705,155			$	7,801,125			$	7,695,522			$	7,580,999			$	7,405,482
Return on average tangible assets (annualized)		0.90	%			(0.89	)%			1.15	%			1.19	%			1.11	%
Average total stockholders’ equity	$	926,239			$	946,138			$	941,891			$	928,063			$	911,824
Less: Average goodwill and average identified intangible assets, net		164,385				164,701				165,071				165,493				165,914
Average tangible stockholders’ equity	$	761,854			$	781,437			$	776,820			$	762,570			$	745,910
Return on average tangible stockholders’ equity (annualized)		10.28	%			(8.84	)%			11.42	%			11.85	%			10.98	%
Brookline Bancorp, Inc. stockholders’ equity	$	926,413			$	912,568			$	945,606			$	932,311			$	918,468
Less:
Goodwill		160,427				160,427				160,427				160,427				160,427
Identified intangible assets, net		3,775				4,087				4,423				4,843				5,264
Tangible stockholders' equity	$	762,211			$	748,054			$	780,756			$	767,041			$	752,777
Total assets	$	9,069,667			$	8,461,591			$	7,856,853			$	7,878,436			$	7,636,980
Less:
Goodwill		160,427				160,427				160,427				160,427				160,427
Identified intangible assets, net		3,775				4,087				4,423				4,843				5,264
Tangible assets	$	8,905,465			$	8,297,077			$	7,692,003			$	7,713,166			$	7,471,289
Tangible stockholders’ equity to tangible assets		8.56	%			9.02	%			10.15	%			9.94	%			10.08	%
Tangible stockholders' equity	$	762,211			$	748,054			$	780,756			$	767,041			$	752,777
Number of common shares issued		85,177,172				85,177,172				85,177,172				85,177,172				85,177,172
Less:
Treasury shares		5,859,708				5,862,811				5,003,127				5,003,127				5,025,764
Unallocated ESOP shares		65,334				72,441				79,548				92,337				98,208
Unvested restricted shares		398,188				395,085				406,450				407,784				377,122
Number of common shares outstanding		78,853,942				78,846,835				79,688,047				79,673,924				79,676,078
Tangible book value per common share	$	9.67			$	9.49			$	9.80			$	9.63			$	9.45
Allowance for loan and lease losses	$	119,553			$	113,181			$	61,082			$	59,135			$	58,635
Total loans and leases	$	7,407,697			$	6,822,527			$	6,737,816			$	6,646,821			$	6,505,329
Less:
Total PPP loans		565,768				—				—				—				—
Total loans and leases excluding PPP loans	$	6,841,929			$	6,822,527			$	6,737,816			$	6,646,821			$	6,505,329
Allowance for loan and lease losses as a percentage of total loans and leases less PPP loans		1.75	%			1.66	%			0.91	%			0.89	%			0.90	%