Brookline Bancorp Announces First Quarter Results

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Net Income of $11.7 million, EPS of $0.17 5.9% Increase in Quarterly Dividend to $0.09 Per Share

April 22, 2015 5:08 PM EDT

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BOSTON, April 22, 2015 /PRNewswire/ -- Brookline Bancorp, Inc. (NASDAQ: BRKL) (the "Company") today announced net income of $11.7 million, or $0.17 per basic and diluted share, for the first quarter of 2015, compared to $10.9 million, or $0.16 per basic and diluted share, for the fourth quarter of 2014.

During the first quarter of 2015, the Company sold $255.2 million, or over 90% of its indirect automobile loan portfolio, which resulted in a nominal loss. The indirect automobile loan portfolio decreased from $317.0 million, or 6.6 percent of total loans and leases at December 31, 2014, to $23.3 million, or 0.5 percent of total loans and leases at March 31, 2015.

Additionally, in January 2015, the Company adopted Accounting Standards Update ("ASU") 2014-01, Accounting for Investments in Qualified Affordable Housing Projects, which requires the initial costs of investments in qualified affordable housing projects be amortized in proportion to tax credits and other tax benefits received, and be recognized as a component of the provision of income taxes. The adoption of ASU 2014-01 required retrospective application which impacted the Company's net income, certain earnings per share calculations, effective tax rates, total assets, total liabilities, retained earnings and all related ratios for all periods presented. The cumulative impact as of January 1, 2015, of adopting ASU 2014-01 was an increase in other assets and retained earnings of $1.1 million.

Paul Perrault, President and Chief Executive Officer of the Company, stated: "We are pleased to report a strong start to 2015 as we continue to remain focused on our strong asset quality. We sold over 90% of the indirect automobile loan portfolio for book value as we continue to focus on our commercial real estate and commercial loan and lease portfolios as well as increasing deposits and lowering our wholesale funding costs. We look forward to the rest of the year with confidence."

BALANCE SHEET

Total assets of $5.8 billion at March 31, 2015 decreased $45.8 million from December 31, 2014, and increased $335.7 million from March 31, 2014. The decrease in total assets of 3.2 percent on an annualized basis during the first quarter of 2015 was driven by the sale of indirect automobile loans in March. At March 31, 2015, total loans and leases excluding the indirect automobile portfolio were $4.6 billion, representing an increase of $105.6 million from December 31, 2014, and an increase of $523.2 million from March 31, 2014. During the first quarter of 2015, total loans and leases excluding the indirect automobile portfolio grew 9.4 percent on an annualized basis. Strong loan growth continued in our total commercial real estate and commercial loan and lease portfolios, which increased $93.3 million during the first quarter of 2015, or 10.3 percent on an annualized basis. At March 31, 2015, the commercial real estate and commercial loan and lease portfolios totaled $3.7 billion, or 80.4 percent of total loans and leases, as compared to $3.6 billion, or 75.4 percent at December 31, 2014, and $3.3 billion, or 73.6 percent at March 31, 2014.

Cash, cash equivalents, and investment securities increased $148.7 million to $762.7 million, or 13.3 percent of total assets at March 31, 2015, as compared to $614.0 million, or 10.6 percent of total assets at December 31, 2014, and increased $162.2 million from $600.5 million, or 11.1 percent of total assets at March 31, 2014. The increase during the first quarter of 2015 was primarily driven by the sale of the indirect automobile portfolio, offset by the pay down of Federal Home Loan Bank of Boston ("FHLBB") advances.

Total deposits of $4.1 billion at March 31, 2015 increased $156.7 million from December 31, 2014 and increased $267.1 million from March 31, 2014. The increase during the first quarter of 2015 was primarily driven by an increase of $110.8 million in brokered deposits from December 31, 2014. There were no brokered deposits at March 31, 2014. Core deposits, which consist of demand checking, NOW, savings, and money market accounts, increased at a 6.9 percent annualized rate in the first quarter of 2015. The core deposit ratio decreased slightly to 74.4 percent at March 31, 2015 from 76.1 percent at both December 31, 2014 and March 31, 2014. The average cost of deposits decreased to 0.52 percent at March 31, 2015, from 0.53 percent at December 31, 2014 and 0.55 percent at March 31, 2014.

Total borrowings at March 31, 2015 were $924.9 million, a decrease of $201.5 million as compared to December 31, 2014 due to maturities of advances from the FHLBB. Total borrowings increased $32.9 million as compared to March 31, 2014 due to the issuance of subordinated debentures in the third quarter of 2014, partially offset by maturities of advances from the FHLBB.

The ratio of stockholders' equity to total assets was 11.32 percent at March 31, 2015, as compared to 11.06 percent at December 31, 2014 and 11.47 percent at March 31, 2014. The ratio of tangible stockholders' equity to tangible assets was 8.93 percent at March 31, 2015, as compared to 8.68 percent at December 31, 2014 and 8.88 percent at March 31, 2014.

NET INTEREST INCOME

Net interest income increased $1.0 million to $48.5 million during the first quarter of 2015 from the previous quarter. The net interest margin increased 7 basis points to 3.57 percent for the three months ended March 31, 2015.

PROVISION FOR LOAN LOSSES

The Company recorded a provision for loan and lease losses of $2.3 million for the quarter ended March 31, 2015, compared to $1.7 million during the fourth quarter of 2014. The increase of $0.6 million quarter over quarter is due to additional reserves required for loan growth during the quarter as well as a $1.6 million specific reserve established for one commercial relationship which was downgraded during the quarter. This was partially offset by the $1.9 million release of reserves related to the sale of indirect automobile loans.

Net charge-offs remained constant at $0.9 million for the first quarter of 2015 and the fourth quarter of 2014. The ratio of net charge-offs to average loans on an annualized basis remained constant at 0.07 percent for the first quarter of 2015 and the fourth quarter of 2014.

The allowance for loan losses represented 1.19 percent of total loans and leases at March 31, 2015, compared to 1.11 percent at December 31, 2014. The allowance for loan losses related to originated loans and leases as a percentage of originated loans and leases was 1.28 percent at March 31, 2015, compared to 1.20 percent at December 31, 2014.

NON-INTEREST INCOME

Non-interest income for the quarter ended March 31, 2015 remained consistent at $4.5 million from the previous quarter. The Company recorded a $0.5 million gain on the sale of loans and leases during the quarter, undertaken to manage concentration risk, offset by the decrease of $0.5 million from loan level derivative income.

NON-INTEREST EXPENSE

Non-interest expense for the quarter ended March 31, 2015 decreased approximately $1.2 million to $31.3 million from $32.5 million for the previous quarter. Compensation and employee benefits decreased $0.7 million due to a severance expense incurred in the fourth quarter of 2014 related to the discontinuation of indirect automobile originations as well as a decrease in employee headcount in the first quarter of 2015. The Company also incurred $0.2 million of snow removal expenses during the quarter, which was included in occupancy expense. Other expenses decreased $0.2 million from the previous quarter, driven by a decrease in expenses associated with collections and other real estate owned properties.

RETURNS ON AVERAGE ASSETS AND AVERAGE EQUITY

The return on average assets increased during the first quarter of 2015 to 0.80 percent at March 31, 2015 from 0.76 percent for the fourth quarter of 2014. The return on average tangible assets increased to 0.82 percent for the first quarter of 2015 from 0.78 percent for the fourth quarter of 2014.

The return on average stockholders' equity increased during the first quarter of 2015 to 7.22 percent from 6.79 percent for the fourth quarter of 2014. The return on average tangible stockholders' equity increased to 9.41 percent for the first quarter of 2015 from 8.90 percent for the fourth quarter of 2014.

ASSET QUALITY

Nonperforming loans and leases increased $9.0 million during the first quarter of 2015 to $22.7 million at March 31, 2015 from the previous quarter. The increase was primarily driven by one relationship of $8.4 million which was downgraded during the first quarter of 2015. The ratio of nonperforming loans and leases to total loans and leases increased to 0.49 percent at March 31, 2015 from the previous quarter. Nonperforming assets also increased $9.6 million during the first quarter of 2015 to $24.8 million, or 0.43 percent of total assets, at March 31, 2015.

DIVIDEND DECLARED

The Company's Board of Directors approved a 5.9 percent increase in the quarterly dividend to $0.09 per share. The dividend will be paid on May 22, 2015 to shareholders of record on May 8, 2015.

CONFERENCE CALL

The Company will conduct a conference call/webcast at 1:30 PM Eastern Standard Time on Thursday, April 23, 2015 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). 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 10063263. 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 approximately $5.8 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, Bank Rhode Island, and First Ipswich Bank. The Company provides commercial and retail banking services and 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, www.bankri.com, and www.firstipswich.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. Forward-looking statements involve risks and uncertainties. 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 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 and tangible stockholders' equity to tangible assets, return on average tangible assets and return on average tangible stockholders' equity. 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.

Contact: Carl M. Carlson Brookline Bancorp, Inc. Chief Financial Officer and Treasurer (617) 425-5331 [email protected]

BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Selected Financial Highlights (Unaudited)

	At and for the Three Months Ended
	March 31, 2015			December 31,2014			September 30,2014			June 30, 2014			March 31, 2014
	(Dollars In Thousands Except Share Data)
Earnings Data:
Net interest income	$	48,528		$	47,576		$	47,324		$	46,434		$	47,734
Provision for credit losses	2,263			1,724			2,034			2,276			2,443
Non-interest income*	4,470			4,541			6,189			3,822			5,628
Non-interest expense	31,326			32,455			31,914			31,215			33,576
Income before provision for income taxes*	19,409			17,938			19,565			16,765			17,343
Net income attributable to Brookline Bancorp, Inc.*	11,703			10,875			11,740			10,131			10,542

Performance Ratios:
Net interest margin (1)	3.57		%	3.50		%	3.54		%	3.63		%	3.87		%
Interest-rate spread (1)	3.37		%	3.37		%	3.43		%	3.48		%	3.66		%
Return on average assets*	0.80		%	0.76		%	0.83		%	0.74		%	0.79		%
Return on average tangible assets (non-GAAP)*	0.82		%	0.78		%	0.85		%	0.76		%	0.81		%
Return on average stockholders' equity*	7.22		%	6.79		%	7.41		%	6.46		%	6.78		%
Return on average tangible stockholders' equity (non-GAAP)*	9.41		%	8.90		%	9.77		%	8.56		%	9.01		%
Efficiency ratio*	59.11		%	62.27		%	59.64		%	62.11		%	62.92		%

Per Common Share Data:
Net income — Basic*	$	0.17		$	0.16		$	0.17		$	0.15		$	0.15
Net income — Diluted*	0.17			0.16			0.17			0.14			0.15
Cash dividends declared	0.085			0.085			0.085			0.085			0.085
Book value per share (end of period)*	9.30			9.16			9.05			8.99			8.89
Tangible book value per share (end of period) (non-GAAP)*	7.15			7.00			6.87			6.80			6.69
Stock price (end of period)	10.05			10.03			8.55			9.37			9.42
Balance Sheet:
Total assets*	$	5,755,146		$	5,800,948		$	5,718,944		$	5,588,306		$	5,419,450
Total loans and leases	4,634,594			4,822,607			4,736,028			4,603,913			4,461,997
Total deposits	4,114,795			3,958,106			3,889,204			3,861,147			3,847,650
Brookline Bancorp, Inc. stockholders' equity*	651,319			641,818			633,379			628,483			621,464

Asset Quality:
Nonperforming assets	$	24,757		$	15,170		$	19,785		$	18,407		$	19,430
Nonperforming assets as a percentage of total assets*	0.43		%	0.26		%	0.35		%	0.33		%	0.36		%
Allowance for loan and lease losses	$	55,106		$	53,659		$	52,822		$	51,686		$	50,224
Allowance for loan and lease losses as a percentage of total loans and leases	1.19		%	1.11		%	1.12		%	1.12		%	1.13		%
Net loan and lease charge-offs	$	854		$	874		$	793		$	720		$	666
Net loan and lease charge-offs as a percentage of average loans and leases (annualized)	0.07		%	0.07		%	0.07		%	0.06		%	0.06		%

Capital Ratios:
Stockholders' equity to total assets*	11.32		%	11.06		%	11.08		%	11.25		%	11.47		%
Tangible stockholders' equity to tangible assets (non-GAAP)*	8.93		%	8.68		%	8.64		%	8.75		%	8.88		%

(1) Calculated on a fully tax-equivalent basis.
(*) Previously reported amounts have been restated to reflect a retrospective change in accounting principle for investments in qualified affordable housing projects, in accordance with ASU 2014-01.

BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Consolidated Balance Sheets (Unaudited)
	March 31, 2015		December 31, 2014		September 30, 2014		June 30, 2014		March 31, 2014
*ASSETS*	(In Thousands Except Share Data)
Cash and due from banks	$	35,118	$	36,893	$	37,237	$	58,962	$	50,000
Short-term investments	162,003		25,830		50,901		20,771		22,936
Total cash and cash equivalents	197,121		62,723		88,138		79,733		72,936
Investment securities available-for-sale	565,115		550,761		527,516		528,586		527,073
Investment securities held-to-maturity	500		500		500		500		500
Total investment securities	565,615		551,261		528,016		529,086		527,573
Loans and leases held-for-sale	787		1,537		464		13,890		177
Loans and leases:
Commercial real estate loans:
Commercial real estate mortgage	1,714,140		1,680,082		1,610,592		1,545,483		1,505,674
Multi-family mortgage	652,500		639,706		630,852		631,371		632,122
Construction	134,247		148,013		161,279		137,731		136,679
Total commercial real estate loans	2,500,887		2,467,801		2,402,723		2,314,585		2,274,475
Commercial loans and leases:
Commercial	560,344		514,077		495,712		478,856		437,957
Equipment financing	614,301		601,424		576,541		552,489		529,670
Condominium association	52,707		51,593		49,600		45,608		43,810
Total commercial loans and leases	1,227,352		1,167,094		1,121,853		1,076,953		1,011,437
Indirect automobile loans	23,335		316,987		353,263		376,314		373,965
Consumer loans:
Residential mortgage	578,994		571,920		570,128		550,814		530,347
Home equity	292,198		287,058		274,762		270,203		261,836
Other consumer	11,828		11,747		13,299		15,044		9,937
Total consumer loans	883,020		870,725		858,189		836,061		802,120
Total loans and leases	4,634,594		4,822,607		4,736,028		4,603,913		4,461,997
Allowance for loan and lease losses	(55,106)		(53,659)		(52,822)		(51,686)		(50,224)
Net loans and leases	4,579,488		4,768,948		4,683,206		4,552,227		4,411,773
Restricted equity securities	74,804		74,804		74,804		71,446		66,559
Premises and equipment, net of accumulated depreciation	79,252		80,619		81,479		82,166		81,396
Deferred tax asset	25,834		27,687		29,168		27,799		29,319
Goodwill	137,890		137,890		137,890		137,890		137,890
Identified intangible assets, net of accumulated amortization	12,806		13,544		14,371		15,199		16,026
Other real estate owned and repossessed assets	2,023		1,456		2,463		1,246		1,290
Other assets*	79,526		80,479		78,945		77,624		74,511
Total assets*	$	5,755,146	$	5,800,948	$	5,718,944	$	5,588,306	$	5,419,450
*LIABILITIES AND STOCKHOLDERS' EQUITY*
Deposits:
Non-interest-bearing deposits:
Demand checking accounts	$	729,932	$	726,118	$	705,604	$	716,883	$	682,383
Interest-bearing deposits:
NOW accounts	237,200		235,063		220,766		209,682		212,877
Savings accounts	571,030		531,727		532,790		518,343		517,327
Money market accounts	1,525,053		1,518,490		1,522,612		1,516,023		1,517,290
Certificate of deposit accounts	1,051,580		946,708		907,432		900,216		917,773
Total interest-bearing deposits	3,384,863		3,231,988		3,183,600		3,144,264		3,165,267
Total deposits	4,114,795		3,958,106		3,889,204		3,861,147		3,847,650
Borrowed funds:
Advances from the FHLBB	806,491		1,004,026		1,027,211		1,005,644		855,915
Subordinated debentures and notes	82,806		82,763		82,763		9,201		9,182
Other borrowed funds	35,628		39,615		22,891		26,159		26,919
Total borrowed funds	924,925		1,126,404		1,132,865		1,041,004		892,016
Mortgagors' escrow accounts	8,414		8,501		8,757		8,359		8,696
Accrued expenses and other liabilities	51,046		61,332		50,430		45,411		45,703
Total liabilities	5,099,180		5,154,343		5,081,256		4,955,921		4,794,065
Stockholders' equity:
Brookline Bancorp, Inc. stockholders' equity:
Common stock, $0.01 par value; 200,000,000 shares authorized; 75,744,445 shares issued	757		757		757		757		757
Additional paid-in capital	617,845		617,475		616,997		617,709		617,978
Retained earnings, partially restricted*	90,589		84,860		79,959		74,193		70,026
Accumulated other comprehensive income (loss)	1,747		(1,622)		(4,681)		(3,209)		(5,936)
Treasury stock, at cost;
5,042,238 shares, 5,040,571 shares, 5,035,956 shares, 5,144,807 shares, and 5,171,985 shares, respectively	(58,301)		(58,282)		(58,228)		(59,487)		(59,826)
Unallocated common stock held by the Employee Stock Ownership Plan;
241,803 shares, 251,382 shares, 261,453 shares, 271,524 shares, and 281,595 shares, respectively	(1,318)		(1,370)		(1,425)		(1,480)		(1,535)
Total Brookline Bancorp, Inc. stockholders' equity*	651,319		641,818		633,379		628,483		621,464
Noncontrolling interest in subsidiary	4,647		4,787		4,309		3,902		3,921
Total stockholders' equity*	655,966		646,605		637,688		632,385		625,385
Total liabilities and stockholders' equity*	$	5,755,146	$	5,800,948	$	5,718,944	$	5,588,306	$	5,419,450
(*) Previously reported amounts have been restated to reflect a retrospective change in accounting principle for investments in qualified affordable housing projects, in accordance with ASU 2014-01.

BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Consolidated Statements of Income (Unaudited)
	Three Months Ended
	March 31, 2015		December 31, 2014		September 30, 2014		June 30, 2014		March 31, 2014
	(In Thousands Except Share Data)
Interest and dividend income:
Loans and leases	$	53,381	$	52,637	$	51,769	$	50,433	$	51,942
Debt securities	2,683		2,596		2,312		2,360		2,259
Marketable and restricted equity securities	524		564		520		539		449
Short-term investments	21		29		15		14		44
Total interest and dividend income	56,609		55,826		54,616		53,346		54,694
Interest expense:
Deposits	4,304		4,320		4,248		4,201		4,291
Borrowed funds	3,777		3,930		3,044		2,711		2,669
Total interest expense	8,081		8,250		7,292		6,912		6,960
Net interest income	48,528		47,576		47,324		46,434		47,734
Provision for credit losses	2,263		1,724		2,034		2,276		2,443
Net interest income after provision for credit losses	46,265		45,852		45,290		44,158		45,291
Non-interest income:
Deposit fees	2,066		2,177		2,352		2,204		1,959
Loan fees	342		331		253		126		434
Loan level derivative income	—		562		322		62		—
Gain/(loss) on sales of securities, net	—		78		—		(13)		—
Gain on sales of loans and leases held-for-sale	869		323		538		54		602
(Loss)/gain on sale/disposals of premises and equipment, net	—		—		(2)		(6)		1,510
Litigation settlement	—		—		1,412		—		—
Other	1,193		1,070		1,314		1,395		1,123
Total non-interest income*	4,470		4,541		6,189		3,822		5,628
Non-interest expense:
Compensation and employee benefits	17,524		18,216		18,258		17,295		18,032
Occupancy	3,472		3,401		3,334		3,154		4,405
Equipment and data processing	4,020		4,102		4,193		4,348		4,377
Professional services	1,094		1,159		991		1,480		1,727
FDIC insurance	867		782		873		847		860
Advertising and marketing	748		872		745		776		665
Amortization of identified intangible assets	738		827		828		827		861
Other	2,863		3,096		2,692		2,488		2,649
Total non-interest expense	31,326		32,455		31,914		31,215		33,576
Income before provision for income taxes*	19,409		17,938		19,565		16,765		17,343
Provision for income taxes*	7,104		6,586		7,163		6,158		6,379
Net income before noncontrolling interest in subsidiary*	12,305		11,352		12,402		10,607		10,964
Less net income attributable to noncontrolling interest in subsidiary	602		477		662		476		422
Net income attributable to Brookline Bancorp, Inc.*	$	11,703	$	10,875	$	11,740	$	10,131	$	10,542
Earnings per common share:*
Basic	$	0.17	$	0.16	$	0.17	$	0.15	$	0.15
Diluted	$	0.17	$	0.16	$	0.17	$	0.14	$	0.15
Weighted average common shares outstanding during the period:
Basic	70,036,090		70,024,495		69,989,909		69,866,576		69,875,473
Diluted	70,164,105		70,130,243		70,088,987		70,012,377		69,983,999
Dividends declared per common share	$	0.085	$	0.085	$	0.085	$	0.085	$	0.085

(*) Previously reported amounts have been restated to reflect a retrospective change in accounting principle for investments in qualified affordable housing projects, in accordance with ASU 2014-01.

BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Asset Quality Analysis (Unaudited)
	At and for the Three Months Ended
	March 31, 2015			December 31, 2014			September 30, 2014			June 30, 2014			March 31, 2014
	(Dollars in Thousands)
NONPERFORMING ASSETS:
Loans and leases accounted for on a nonaccrual basis:
Commercial real estate mortgage	$	3,250		$	1,009		$	3,174		$	3,011		$	1,814
Multi-family mortgage	—			—			299			—			—
Total commercial real estate loans	3,250			1,009			3,473			3,011			1,814

Commercial	12,039			5,196			6,071			6,383			6,350
Equipment financing	2,321			3,223			2,756			3,251			4,633
Total commercial loans and leases	14,360			8,419			8,827			9,634			10,983

Indirect automobile loans	468			645			474			325			378

Residential mortgage	2,632			1,682			2,636			2,384			3,138
Home equity	1,979			1,918			1,865			1,771			1,799
Other consumer	45			41			47			36			28
Total consumer loans	4,656			3,641			4,548			4,191			4,965

Total nonaccrual loans and leases	22,734			13,714			17,322			17,161			18,140

Other real estate owned	1,043			953			1,536			675			855
Other repossessed assets	980			503			927			571			435
Total nonperforming assets	$	24,757		$	15,170		$	19,785		$	18,407		$	19,430

Loans and leases past due greater than 90 days and still accruing	$	8,061		$	6,008		$	3,919		$	6,653		$	7,774

Troubled debt restructurings on accrual	14,184			14,815			15,174			12,396			11,532
Troubled debt restructurings on nonaccrual	6,126			5,625			5,609			5,992			6,764
Total troubled debt restructurings	$	20,310		$	20,440		$	20,783		$	18,388		$	18,296

Nonperforming loans and leases as a percentage of total loans and leases	0.49		%	0.28		%	0.37		%	0.37		%	0.41		%
Nonperforming assets as a percentage of total assets*	0.43		%	0.26		%	0.35		%	0.33		%	0.36		%

PROVISION AND ALLOWANCE FOR LOAN AND LEASE LOSSES:
Allowance for loan and lease losses at beginning of period	$	53,659		$	52,822		$	51,686		$	50,224		$	48,473
Charge-offs	(1,665)			(1,068)			(1,136)			(1,196)			(1,050)
Recoveries	811			194			343			476			384
Net charge-offs	(854)			(874)			(793)			(720)			(666)
Provision for loan and lease losses	2,301			1,711			1,929			2,182			2,417
Allowance for loan and lease losses at end of period	$	55,106		$	53,659		$	52,822		$	51,686		$	50,224

Allowance for loan and lease losses as a percentage of total loans and leases	1.19		%	1.11		%	1.12		%	1.12		%	1.13		%
Allowance for loan and lease losses related to originated loans and leases as a percentage of originated loans and leases (non-GAAP)	1.28		%	1.20		%	1.26		%	1.31		%	1.33		%

NET CHARGE-OFFS:
Commercial real estate loans	$	388		$	62		$	64		$	—		$	—
Commercial loans and leases	238			480			348			578			300
Indirect automobile loans	239			281			208			55			185
Consumer loans	(11)			51			173			87			181
Total net charge-offs	$	854		$	874		$	793		$	720		$	666

Net loan and lease charge-offs as a percentage of average loans and leases (annualized)	0.07		%	0.07		%	0.07		%	0.06		%	0.06		%

(*) Previously reported amounts have been restated to reflect a retrospective change in accounting principle for investments in qualified affordable housing projects, in accordance with ASU 2014-01.

BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Average Yields / Costs (Unaudited)
	Three Months Ended
	March 31, 2015						December 31, 2014						March 31, 2014
	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)	$	555,558	$	2,683	1.93	%	$	525,286	$	2,596	1.98	%	$	502,598	$	2,263	1.80	%
Marketable and restricted equity securities (2)	74,836		566		3.03	%	75,188		641		3.41	%	66,954		497		2.97	%
Short-term investments	49,841		21		0.17	%	57,047		29		0.20	%	45,834		44		0.38	%
Total investments	680,235		3,270		1.92	%	657,521		3,266		1.99	%	615,386		2,804		1.82	%
Loans and Leases:
Commercial real estate loans (3)	2,475,950		26,245		4.24	%	2,422,804		26,243		4.33	%	2,228,495		25,702		4.61	%
Commercial loans (3)	610,695		6,506		4.26	%	562,180		5,944		4.14	%	476,455		4,693		3.94	%
Equipment financing (3)	611,309		10,544		6.90	%	588,886		9,951		6.76	%	522,288		11,037		8.45	%
Indirect automobile loans (3)	282,494		2,142		3.08	%	334,919		2,587		3.06	%	384,833		3,264		3.44	%
Residential mortgage loans (3)	576,858		5,307		3.68	%	569,896		5,143		3.61	%	532,593		4,809		3.61	%
Other consumer loans (3)	299,119		2,828		3.83	%	293,117		2,959		4.01	%	267,204		2,579		3.91	%
Total loans and leases	4,856,425		53,572		4.41	%	4,771,802		52,827		4.43	%	4,411,868		52,084		4.72	%
Total interest-earning assets	5,536,660		56,842		4.11	%	5,429,323		56,093		4.13	%	5,027,254		54,888		4.37	%
Allowance for loan and lease losses	(54,319)						(53,542)						(49,087)
Non-interest-earning assets*	369,773						381,934						384,155
Total assets*	$	5,852,114					$	5,757,715					$	5,362,322

Liabilities and Stockholders' Equity:
Interest-bearing liabilities:
Deposits:
NOW accounts	$	237,718	$	44	0.07	%	$	222,410	$	45	0.08	%	$	206,226	$	41	0.08	%
Savings accounts	541,595		273		0.20	%	528,557		292		0.22	%	508,555		303		0.24	%
Money market accounts	1,536,751		1,816		0.48	%	1,537,740		1,994		0.51	%	1,505,992		1,959		0.53	%
Certificates of deposit	1,033,511		2,171		0.85	%	915,294		1,989		0.86	%	927,199		1,988		0.87	%
Total interest-bearing deposits	3,349,575		4,304		0.52	%	3,204,001		4,320		0.53	%	3,147,972		4,291		0.55	%
Borrowings
Advances from the FHLBB	941,314		2,504		1.06	%	1,005,585		2,662		1.04	%	803,729		2,531		1.26	%
Subordinated debentures and notes	82,784		1,248		6.03	%	82,743		1,250		6.04	%	9,170		99		4.32	%
Other borrowed funds	37,806		25		0.26	%	33,667		18		0.21	%	29,268		39		0.54	%
Total borrowings	1,061,904		3,777		1.42	%	1,121,995		3,930		1.37	%	842,167		2,669		1.27	%
Total interest-bearing liabilities	4,411,479		8,081		0.74	%	4,325,996		8,250		0.76	%	3,990,139		6,960		0.71	%
Non-interest-bearing liabilities:
Demand checking accounts	728,099						727,718						698,462
Other non-interest-bearing liabilities	59,226						58,831						47,103
Total liabilities	5,198,804						5,112,545						4,735,704
Brookline Bancorp, Inc. stockholders' equity*	648,683						640,706						622,369
Noncontrolling interest in subsidiary	4,627						4,464						4,249
Total liabilities and equity*	$	5,852,114					$	5,757,715					$	5,362,322
Net interest income (tax-equivalent basis) /Interest-rate spread (4)			48,761		3.37	%			47,843		3.37	%			47,928		3.66	%
Less adjustment of tax-exempt income			233						267						194
Net interest income			$	48,528					$	47,576					$	47,734
Net interest margin (5)					3.57	%					3.50	%					3.87	%

(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.
(*) Previously reported amounts have been restated to reflect a retrospective change in accounting principle for investments in qualified affordable housing projects, in accordance with ASU 2014-01.

BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Non-GAAP Financial Information (Unaudited)

	At and for the Three Months Ended
	March 31, 2015			December 31, 2014			September 30, 2014			June 30, 2014			March 31, 2014
	(Dollars in Thousands)

Net income, as reported*	$	11,703		$	10,875		$	11,740		$	10,131		$	10,542

Average total assets*	$	5,852,114		$	5,757,715		$	5,654,792		$	5,474,193		$	5,362,322
Less: Average goodwill and average identified intangible assets, net	151,125			151,932			152,755			153,577			154,447
Average tangible assets*	$	5,700,989		$	5,605,783		$	5,502,037		$	5,320,616		$	5,207,875

Return on average tangible assets (annualized)*	0.82		%	0.78		%	0.85		%	0.76		%	0.81		%

Average total stockholders' equity*	$	648,683		$	640,706		$	633,406		$	627,114		$	622,369
Less: Average goodwill and average identified intangible assets, net	151,125			151,932			152,755			153,577			154,447
Average tangible stockholders' equity*	$	497,558		$	488,774		$	480,651		$	473,537		$	467,922

Return on average tangible stockholders' equity (annualized)*	9.41		%	8.90		%	9.77		%	8.56		%	9.01		%

Brookline Bancorp, Inc. stockholders' equity*	$	651,319		$	641,818		$	633,379		$	628,483		$	621,464
Less:
Goodwill	137,890			137,890			137,890			137,890			137,890
Identified intangible assets, net	12,806			13,544			14,371			15,199			16,026
Tangible stockholders' equity*	$	500,623		$	490,384		$	481,118		$	475,394		$	467,548

Total assets*	$	5,755,146		$	5,800,948		$	5,718,944		$	5,588,306		$	5,419,450
Less:
Goodwill	137,890			137,890			137,890			137,890			137,890
Identified intangible assets, net	12,806			13,544			14,371			15,199			16,026
Tangible assets*	$	5,604,450		$	5,649,514		$	5,566,683		$	5,435,217		$	5,265,534

Tangible stockholders' equity to tangible assets*	8.93		%	8.68		%	8.64		%	8.75		%	8.88		%

Tangible stockholders' equity*	$	500,623		$	490,384		$	481,118		$	475,394		$	467,548

Number of common shares issued	75,744,445			75,744,445			75,744,445			75,744,445			75,744,445
Less:
Treasury shares	5,042,238			5,040,571			5,035,956			5,144,807			5,171,985
Unallocated ESOP shares	241,803			251,382			261,453			271,524			281,595
Unvested restricted shares	418,035			419,702			427,952			434,459			408,651
Number of common shares outstanding	70,042,369			70,032,790			70,019,084			69,893,655			69,882,214

Tangible book value per common share*	$	7.15		$	7.00		$	6.87		$	6.80		$	6.69

Allowance for loan and lease losses	$	55,106		$	53,659		$	52,822		$	51,686		$	50,224
Less:
Allowance for acquired loans and leases losses	2,911			2,848			1,933			1,247			1,403
Allowance for originated loan and lease losses	$	52,195		$	50,811		$	50,889		$	50,439		$	48,821

Total loans and leases	$	4,634,594		$	4,822,607		$	4,736,028		$	4,603,913		$	4,461,997
Less:
Total acquired loans and leases	561,103			590,654			709,404			747,106			779,747
Total originated loans and leases	$	4,073,491		$	4,231,953		$	4,026,624		$	3,856,807		$	3,682,250

Allowance for loan and lease losses related to originated loans and leases as a percentage of originated loans and leases	1.28		%	1.20		%	1.26		%	1.31		%	1.33		%
(*) Previously reported amounts have been restated to reflect a retrospective change in accounting principle for investments in qualified affordable housing projects, in accordance with ASU 2014-01.