Brookline Bancorp Announces Second Quarter Results

Net Income of $16.4 million, EPS of $0.18

Operating Earnings of $17.0 million, Operating EPS of $0.19

Quarterly Dividend of $0.135

BOSTON, July 24, 2024 (GLOBE NEWSWIRE) -- Brookline Bancorp, Inc. ( BRKL) (the “Company”) today announced net income of $16.4 million, or $0.18 per basic and diluted share, and operating earnings after tax (non-GAAP) of $17.0 million, or $0.19 per basic and diluted share, for the second quarter of 2024, compared to net income and operating earnings after tax (non-GAAP) of $14.7 million, or $0.16 per basic and diluted share, for the first quarter of 2024, and net income of $21.9 million, or $0.25 per basic and diluted share, and operating earnings after tax (non-GAAP) of $23.2 million, or $0.26 per basic and diluted share, for the second quarter of 2023.

Paul Perrault, Chairman and Chief Executive Officer commented, “I am pleased to report our second quarter earnings. We experienced solid loan and deposit growth across our three banks in the quarter. I would like to recognize our bankers for their diligence in providing extraordinary service to our clients.” Mr. Perrault continued, “While the margin pressure we and the rest of the banking industry experienced in the first quarter persisted in the second quarter, this pressure decreased in intensity slightly from the prior quarter. As we enter the second half of 2024, we remain optimistic about the overall economic outlook in our markets.”

BALANCE SHEET

Total assets at June 30, 2024 were $11.6 billion, representing an increase of $92.6 million from $11.5 billion at March 31, 2024, and an increase of $429.2 million from June 30, 2023. At June 30, 2024, total loans and leases were $9.7 billion, representing an increase of $66.1 million from March 31, 2024, and an increase of $380.3 million from June 30, 2023.

Total investment securities at June 30, 2024 decreased $9.4 million to $856.4 million from $865.8 million at March 31, 2024, and decreased $53.8 million from $910.2 million at June 30, 2023. Total cash and cash equivalents at June 30, 2024 increased $41.2 million to $343.1 million from $301.9 million at March 31, 2024, and increased $118.7 million from $224.4 million at June 30, 2023. As of June 30, 2024, total investment securities and total cash and cash equivalents represented 10.3 percent of total assets, compared to 10.1 percent as of March 31, 2024 and June 30, 2023, respectively.

Total deposits at June 30, 2024 increased $18.4 million to $8.7 billion from March 31, 2024, consisting of a $65.8 million increase in customer deposits partially offset by a $47.4 million decrease in brokered deposits, and increased $220.0 million from $8.5 billion at June 30, 2023, driven by growth in customer deposits.

Total borrowed funds at June 30, 2024 increased $67.6 million to $1.4 billion from March 31, 2024, and increased $203.2 million from $1.2 billion at June 30, 2023.

The ratio of stockholders’ equity to total assets was 10.30 percent at June 30, 2024, compared to 10.35 percent at March 31, 2024, and 10.37 percent at June 30, 2023. The ratio of tangible stockholders’ equity to tangible assets (non-GAAP) was 8.23 percent at June 30, 2024, as compared to 8.25 percent at March 31, 2024, and 8.16 percent at June 30, 2023. Tangible book value per common share (non-GAAP) increased $0.06 from $10.47 at March 31, 2024 to $10.53 at June 30, 2024, and increased $0.46 from $10.07 at June 30, 2023.

NET INTEREST INCOME

Net interest income decreased $1.6 million to $80.0 million during the second quarter of 2024 from $81.6 million for the quarter ended March 31, 2024. The net interest margin decreased 6 basis points to 3.00 percent for the three months ended June 30, 2024 from 3.06 percent for the three months ended March 31, 2024, primarily driven by the reversal of interest relating to new nonaccrual loans and higher funding costs.

NON-INTEREST INCOME

Total non-interest income for the quarter ended June 30, 2024 increased $0.1 million to $6.4 million from $6.3 million for the quarter ended March 31, 2024.

PROVISION FOR CREDIT LOSSES

The Company recorded a provision for credit losses of $5.6 million for the quarter ended June 30, 2024, compared to $7.4 million for the quarter ended March 31, 2024. The decrease in provision was largely driven by the stabilization of credit conditions.

Total net charge-offs for the second quarter of 2024 were $8.4 million, compared to $8.8 million in the first quarter of 2024. The $8.4 million in net charge-offs were largely driven by $3.9 million in commercial real estate loans and $4.3 million in equipment financing. The majority of net charge-offs were previously reserved for. The ratio of net loan and lease charge-offs to average loans and leases on an annualized basis decreased to 35 basis points for the second quarter of 2024 from 36 basis points for the first quarter of 2024.

The allowance for loan and lease losses represented 1.25 percent of total loans and leases at June 30, 2024, compared to 1.24 percent at March 31, 2024, and 1.35 percent at June 30, 2023.

ASSET QUALITY

The ratio of nonperforming loans and leases to total loans and leases was 0.62 percent at June 30, 2024, an increase from 0.42 percent at March 31, 2024. Total nonaccrual loans and leases increased $20.0 million to $60.7 million at June 30, 2024 from $40.7 million at March 31, 2024. The ratio of nonperforming assets to total assets was 0.54 percent at June 30, 2024, an increase from 0.37 percent at March 31, 2024. Total nonperforming assets increased $20.2 million to $62.7 million at June 30, 2024 from $42.5 million at March 31, 2024.

NON-INTEREST EXPENSE

Non-interest expense for the quarter ended June 30, 2024 decreased $1.8 million to $59.2 million from $61.0 million for the quarter ended March 31, 2024. The decrease was primarily driven by decreases of $1.9 million in compensation and employee benefits expense and $0.3 million in equipment and data processing expense, partially offset by a $0.8 million non-recurring restructuring charge due to the exit of the specialty vehicle business at Eastern Funding LLC.

PROVISION FOR INCOME TAXES

The effective tax rate was 24.4 percent and 24.5 percent for the three and six months ended June 30, 2024 compared to 24.7 percent for the three months ended March 31, 2024 and 21.4 percent and 19.4 percent for the three and six months ended June 30, 2023.

RETURNS ON AVERAGE ASSETS AND AVERAGE EQUITY

The annualized return on average assets increased to 0.57 percent during the second quarter 2024 from 0.51 percent for the first quarter of 2024.

The annualized return on average stockholders' equity increased to 5.49 percent during the second quarter of 2024 from 4.88 percent for the first quarter of 2024. The annualized return on average tangible stockholders’ equity increased to 7.04 percent for the second quarter of 2024 from 6.26 percent for the first quarter of 2024.

DIVIDEND DECLARED

The Company’s Board of Directors approved a dividend of $0.135 per share for the quarter ended June 30, 2024. The dividend will be paid on August 30, 2024 to stockholders of record on August 16, 2024.

CONFERENCE CALL

The Company will conduct a conference call/webcast at 1:30 PM Eastern Time on Thursday, July 25, 2024 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/629150850. 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 611840). A recorded playback of the call will be available for one week following the call on the Company’s website under “Investor Relations” or by dialing 866-813-9403 (United States) or 929-458-6194 (internationally) and entering the passcode: 134147.

ABOUT BROOKLINE BANCORP, INC.

Brookline Bancorp, Inc., a bank holding company with $11.6 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, changes in interest rates; general economic conditions (including inflation and concerns about liquidity) on a national basis or in the local markets in which the Company operates; turbulence in the capital and debt markets; competitive pressures from other financial institutions; 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 after tax, 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:

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