BRKL Brookline Bancorp Inc

Brookline Bancorp, Inc. (NASDAQ: BRKL) (the “Company”) today announced net income of $21.9 million, or $0.25 per basic and diluted share, for the second quarter of 2023, compared to net income of $7.6 million, or $0.09 per basic and diluted share, for the first quarter of 2023, and net income of $25.2 million, or $0.33 per basic and diluted share, for the second quarter of 2022.

“I am pleased to report on our consistent performance in the second quarter,” Chairman and CEO Paul Perrault commented on the Company’s earnings. “Core deposits increased from the prior quarter and our bankers continue to demonstrate our culture by providing excellent customer service to our clients, which contributes to the continued growth of our Company.”

BALANCE SHEET

Total assets at June 30, 2023 decreased $0.3 billion to $11.2 billion from $11.5 billion at March 31, 2023, and increased $2.7 billion from $8.5 billion at June 30, 2022. At June 30, 2023, total loans and leases were $9.3 billion, representing an increase of $0.1 billion from March 31, 2023, and an increase of $2.0 billion from June 30, 2022. The loan portfolio grew $0.1 billion in the second quarter compared to growth of $1.6 billion in the first quarter, primarily driven by the completion of the acquisition of PCSB Financial Corporation ("PCSB").

Total investment securities at June 30, 2023 decreased $156.8 million to $910.2 million from $1.1 billion at March 31, 2023, and increased $192.4 million from $717.8 million at June 30, 2022. Total cash and cash equivalents at June 30, 2023 decreased $261.9 million to $224.4 million from $486.3 million at March 31, 2023, and increased $134.1 million from $90.3 million at June 30, 2022. As of June 30, 2023, total investment securities and total cash and cash equivalents represented 10.1 percent of total assets compared to 13.5 percent and 9.5 percent as of March 31, 2023 and June 30, 2022, respectively.

Total deposits at June 30, 2023 increased $60.6 million to $8.52 billion from $8.46 billion at March 31, 2023, consisting of a $110.1 million increase in core deposits (which include demand checking, NOW, money market and savings accounts) and certificate of deposit accounts, partially offset by a $49.5 million decrease in brokered deposits, and increased $1.6 billion from $6.9 billion at June 30, 2022, primarily driven by the completion of the PCSB acquisition.

Total borrowed funds at June 30, 2023 decreased $403.8 million to $1.2 billion from $1.6 billion at March 31, 2023, and increased $748.1 million from $478.2 million at June 30, 2022.

The ratio of stockholders’ equity to total assets was 10.37 percent at June 30, 2023, compared to 10.11 percent at March 31, 2023, and 11.38 percent at June 30, 2022. The ratio of tangible stockholders’ equity to tangible assets (non-GAAP) was 8.16 percent at June 30, 2023, compared to 7.94 percent at March 31, 2023, and 9.65 percent at June 30, 2022. Tangible book value per share (non-GAAP) decreased $0.01 from $10.08 at March 31, 2023 to $10.07 at June 30, 2023, compared to $10.51 at June 30, 2022.

NET INTEREST INCOME

Net interest income remained consistent quarter over quarter at $86.0 million. The net interest margin decreased 10 basis points to 3.26 percent for the three months ended June 30, 2023 from 3.36 percent for the three months ended March 31, 2023, primarily driven by higher funding costs.

NON-INTEREST INCOME

Total non-interest income for the quarter ended June 30, 2023 decreased $7.5 million to $5.5 million from $12.9 million for the quarter ended March 31, 2023. The decrease was primarily driven by a combined $3.0 million decline in gain on sales of loans and investment, $2.0 million decline in derivative income, and $2.0 million impact from the mark to market on interest rate swaps.

PROVISION FOR CREDIT LOSSES

The Company recorded a provision for credit losses of $5.7 million for the quarter ended June 30, 2023, compared to $25.3 million for the quarter ended March 31, 2023. The higher provision for credit losses in the first quarter of 2023 was primarily driven by the acquisition of PCSB as well as loan growth.

Total net charge-offs for the second quarter of 2023 were $1.1 million compared to $0.5 million in the first quarter of 2023. The increase was primarily driven by an increase in net charge-offs on equipment financing loans of $0.6 million. The ratio of net loan and lease charge-offs to average loans and leases on an annualized basis increased to 5 basis points for the second quarter of 2023 from 2 basis points for the first quarter of 2023.

The allowance for loan and lease losses represented 1.35 percent of total loans and leases at June 30, 2023, compared to 1.31 percent at March 31, 2023, and 1.28 percent at June 30, 2022.

ASSET QUALITY

The ratio of nonperforming loans and leases to total loans and leases was 0.50 percent at June 30, 2023, an increase from 0.31 percent at March 31, 2023. Total nonaccrual loans and leases increased $17.9 million to $46.3 million at June 30, 2023 from $28.5 million at March 31, 2023. The ratio of nonperforming assets to total assets was 0.42 percent at June 30, 2023, an increase from 0.25 percent at March 31, 2023. Total nonperforming assets increased $18.0 million to $46.9 million at June 30, 2023 from $29.0 million at March 31, 2023. The increase in nonperforming assets was primarily driven by a $9.3 million commercial relationship and a $2.8 million commercial real estate relationship.

NON-INTEREST EXPENSE

Non-interest expense for the quarter ended June 30, 2023 decreased $7.0 million to $57.8 million from $64.8 million for the quarter ended March 31, 2023. The decrease was primarily driven by decreases of $5.4 million in merger and acquisition expense, $3.1 million in compensation and employee benefits expense, and $0.4 million in occupancy expense, partially offset by an increase of $1.4 million in FDIC insurance expense and an increase of $0.6 million in professional services expense.

PROVISION FOR INCOME TAXES

The effective tax rate was 21.4 percent and 19.4 percent for the three and six months ended June 30, 2023 compared to 12.8 percent for the three months ended March 31, 2023 and 25.2 percent for both the three and six months ended June 30, 2022.

RETURNS ON AVERAGE ASSETS AND AVERAGE EQUITY

The annualized return on average assets increased to 0.78 percent during the second quarter 2023 from 0.27 percent for the first quarter of 2023.

The annualized return on average stockholders' equity increased to 7.44 percent during the second quarter of 2023 from 2.61 percent for the first quarter of 2023. The annualized return on average tangible stockholders’ equity increased to 9.67 percent for the second quarter of 2023 from 3.43 percent for the first quarter of 2023.

DIVIDEND DECLARED

The Company’s Board of Directors approved a dividend of $0.135 per share for the quarter ended June 30, 2023. The dividend will be paid on August 25, 2023 to stockholders of record on August 11, 2023.

CONFERENCE CALL

The Company will conduct a conference call/webcast at 1:30 PM Eastern Time on Thursday, July 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/769450735. 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 281178). 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: 932919.

ABOUT BROOKLINE BANCORP, INC.

Brookline Bancorp, Inc., a bank holding company with $11.2 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
	June 30,2023		March 31,2023		December 31,2022		September 30,2022		June 30,2022
	(Dollars In Thousands Except per Share Data)
Earnings Data:
Net interest income	$	86,037	$	86,049	$	80,030	$	78,026	$	71,867
Provision (credit) for credit losses	5,726		25,344		5,671		2,845		173
Provision (credit) for investment losses	133		198		54		(10)		54
Non-interest income	5,462		12,937		9,056		6,834		6,928
Non-interest expense	57,825		64,776		47,225		44,959		44,871
Income before provision for income taxes	27,815		8,668		36,136		37,066		33,697
Net income	21,850		7,560		29,695		30,149		25,195
Performance Ratios:
Net interest margin (1)	3.26 %		3.36 %		3.81 %		3.80 %		3.56 %
Interest-rate spread (1)	2.51 %		2.66 %		3.35 %		3.58 %		3.41 %
Return on average assets (annualized)	0.78 %		0.27 %		1.34 %		1.40 %		1.18 %
Return on average tangible assets (annualized) (non-GAAP)	0.79 %		0.28 %		1.37 %		1.43 %		1.21 %
Return on average stockholders' equity (annualized)	7.44 %		2.61 %		12.09 %		12.29 %		10.32 %
Return on average tangible stockholders' equity (annualized) (non-GAAP)	9.67 %		3.43 %		14.48 %		14.72 %		12.39 %
Efficiency ratio (2)	63.20 %		65.44 %		53.01 %		52.98 %		56.95 %
Per Common Share Data:
Net income — Basic	$	0.25	$	0.09	$	0.39	$	0.39	$	0.33
Net income — Diluted	0.25		0.09		0.39		0.39		0.33
Cash dividends declared	0.135		0.135		0.135		0.135		0.130
Book value per share (end of period)	13.11		13.14		12.91		12.54		12.63
Tangible book value per share (end of period) (non-GAAP)	10.07		10.08		10.80		10.43		10.51
Stock price (end of period)	8.74		10.50		14.15		11.65		13.31
Balance Sheet:
Total assets	$	11,206,078	$	11,522,485	$	9,185,836	$	8,695,708	$	8,514,230
Total loans and leases	9,340,799		9,246,965		7,644,388		7,421,304		7,291,912
Total deposits	8,517,013		8,456,462		6,522,146		6,735,605		6,894,457
Total stockholders’ equity	1,162,308		1,165,066		992,125		963,618		968,496
Asset Quality:
Nonperforming assets	$	46,925	$	28,962	$	15,302	$	18,312	$	21,259
Nonperforming assets as a percentage of total assets	0.42 %		0.25 %		0.17 %		0.21 %		0.25 %
Allowance for loan and lease losses	$	125,817	$	120,865	$	98,482	$	94,169	$	93,188
Allowance for loan and lease losses as a percentage of total loans and leases	1.35 %		1.31 %		1.29 %		1.27 %		1.28 %
Net loan and lease charge-offs (recoveries)	$	1,097	$	451	$	310	$	(179)	$	1,242
Net loan and lease charge-offs as a percentage of average loans and leases (annualized)	0.05 %		0.02 %		0.02 %		(0.01)%		0.07 %
Capital Ratios:
Stockholders’ equity to total assets	10.37 %		10.11 %		10.80 %		11.08 %		11.38 %
Tangible stockholders’ equity to tangible assets (non-GAAP)	8.16 %		7.94 %		9.20 %		9.39 %		9.65 %
(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 30,2023			March 31,2023			December 31,2022			September 30,2022			June 30,2022
ASSETS	(In Thousands Except Share Data)
Cash and due from banks	$	44,323		$	30,782		$	191,767		$	65,638		$	50,429
Short-term investments		180,109			455,538			191,192			46,873			39,900
Total cash and cash equivalents		224,432			486,320			382,959			112,511			90,329
Investment securities available-for-sale		910,210			1,067,032			656,766			675,692			717,818
Total investment securities		910,210			1,067,032			656,766			675,692			717,818
Loans and leases:
Commercial real estate loans		5,670,771			5,610,414			4,404,148			4,269,512			4,225,754
Commercial loans and leases		2,193,027			2,147,149			2,016,499			1,933,645			1,860,182
Consumer loans		1,477,001			1,489,402			1,223,741			1,218,147			1,205,976
Total loans and leases		9,340,799			9,246,965			7,644,388			7,421,304			7,291,912
Allowance for loan and lease losses		(125,817)			(120,865)			(98,482)			(94,169)			(93,188)
Net loans and leases		9,214,982			9,126,100			7,545,906			7,327,135			7,198,724
Restricted equity securities		71,421			86,230			71,307			44,760			35,406
Premises and equipment, net of accumulated depreciation		90,685			87,799			71,391			69,912			69,557
Right-of-use asset operating leases		31,774			30,067			19,484			18,614			18,226
Deferred tax asset		77,704			75,028			52,237			56,894			50,736
Goodwill		241,222			241,222			160,427			160,427			160,427
Identified intangible assets, net of accumulated amortization		28,126			30,080			1,781			1,902			2,022
Other real estate owned and repossessed assets		602			508			408			591			507
Other assets		314,920			292,099			223,170			227,270			170,478
Total assets	$	11,206,078		$	11,522,485		$	9,185,836		$	8,695,708		$	8,514,230
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Demand checking accounts	$	1,843,516		$	1,899,370		$	1,802,518		$	1,848,562		$	1,845,365
NOW accounts		699,119			757,411			544,118			597,870			628,791
Savings accounts		1,464,054			1,268,375			762,271			824,789			894,926
Money market accounts		2,166,570			2,185,971			2,174,952			2,405,680			2,402,992
Certificate of deposit accounts		1,410,905			1,362,970			928,143			924,771			1,006,786
Brokered deposit accounts		932,849			982,365			310,144			133,933			115,597
Total deposits		8,517,013			8,456,462			6,522,146			6,735,605			6,894,457
Borrowed funds:
Advances from the FHLBB		1,043,381			1,458,457			1,237,823			557,895			307,967
Subordinated debentures and notes		84,116			84,080			84,044			84,008			83,970
Other borrowed funds		98,773			87,565			110,785			116,865			86,263
Total borrowed funds		1,226,270			1,630,102			1,432,652			758,768			478,200
Operating lease liabilities		33,021			31,373			19,484			18,614			18,226
Mortgagors’ escrow accounts		17,207			17,080			5,607			5,785			5,771
Reserve for unfunded credits		22,789			23,112			20,602			19,555			17,511
Accrued expenses and other liabilities		227,470			199,290			193,220			193,763			131,569
Total liabilities		10,043,770			10,357,419			8,193,711			7,732,090			7,545,734
Stockholders' equity:
Common stock, $0.01 par value; 200,000,000 shares authorized; 96,998,075 shares issued, 96,998,075 shares issued, 85,177,172 shares issued, 85,177,172 shares issued, and 85,177,172 shares issued, respectively		970			970			852			852			852
Additional paid-in capital		905,084			904,174			736,074			735,119			738,544
Retained earnings, partially restricted		417,328			407,528			412,019			392,779			372,677
Accumulated other comprehensive income		(66,156)			(52,688)			(61,947)			(70,227)			(44,977)
Treasury stock, at cost;
7,734,891, 7,734,891, 7,731,445, 7,730,945, and 7,995,888 shares, respectively		(94,918)			(94,918)			(94,873)			(94,866)			(98,525)
Unallocated common stock held by the Employee Stock Ownership Plan;
0, 0, 0, 4,833, and 11,442 shares, respectively		—			—			—			(39)			(75)
Total stockholders' equity		1,162,308			1,165,066			992,125			963,618			968,496
Total liabilities and stockholders' equity	$	11,206,078		$	11,522,485		$	9,185,836		$	8,695,708		$	8,514,230

BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Consolidated Statements of Income (Unaudited)
	Three Months Ended
	June 30,2023		March 31,2023		December 31,2022		September 30,2022			June 30,2022
	(In Thousands Except Share Data)
Interest and dividend income:
Loans and leases	$	132,299	$	121,931	$	98,386	$	84,375		$	74,287
Debt securities		8,034		7,870		3,497		3,337			3,249
Restricted equity securities		1,673		1,255		766		467			337
Short-term investments		3,351		1,495		754		464			156
Total interest and dividend income		145,357		132,551		103,403		88,643			78,029
Interest expense:
Deposits		43,147		29,368		14,185		7,354			4,282
Borrowed funds		16,173		17,134		9,188		3,263			1,880
Total interest expense		59,320		46,502		23,373		10,617			6,162
Net interest income		86,037		86,049		80,030		78,026			71,867
Provision for credit losses		5,726		25,344		5,671		2,845			173
Provision (credit) for investment losses		133		198		54		(10)			54
Net interest income after provision for credit losses		80,178		60,507		74,305		75,191			71,640
Non-interest income:
Deposit fees		2,866		2,657		2,916		2,759			2,744
Loan fees		491		391		446		349			666
Loan level derivative income, net		363		2,373		670		1,275			1,615
Gain on investment securities, net		3		1,701		321		—			—
Gain on sales of loans and leases held-for-sale		308		1,638		2,612		889			291
Other		1,431		4,177		2,091		1,562			1,612
Total non-interest income		5,462		12,937		9,056		6,834			6,928
Non-interest expense:
Compensation and employee benefits		33,438		36,565		29,525		28,306			28,772
Occupancy		4,870		5,223		4,005		3,906			3,807
Equipment and data processing		6,531		6,462		5,758		5,066			4,931
Professional services		1,986		1,430		1,546		1,069			1,219
FDIC insurance		2,609		1,244		1,001		709			739
Advertising and marketing		1,382		1,410		1,052		1,337			1,319
Amortization of identified intangible assets		1,954		1,966		120		120			120
Merger and acquisition expense		1,002		6,409		641		1,073			535
Other		4,053		4,067		3,577		3,373			3,429
Total non-interest expense		57,825		64,776		47,225		44,959			44,871
Income before provision for income taxes		27,815		8,668		36,136		37,066			33,697
Provision for income taxes		5,965		1,108		6,441		6,917			8,502
Net income	$	21,850	$	7,560	$	29,695	$	30,149		$	25,195
Earnings per common share:
Basic	$	0.25	$	0.09	$	0.39	$	0.39		$	0.33
Diluted	$	0.25	$	0.09	$	0.39	$	0.39		$	0.33
Weighted average common shares outstanding during the period:
Basic		88,665,135		86,563,641		76,841,655		76,779,038			77,091,013
Diluted		88,926,543		86,837,806		77,065,076		77,007,971			77,419,288
Dividends paid per common share	$	0.135	$	0.135	$	0.135	$	0.130		$	0.130

BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Consolidated Statements of Income (Unaudited)
	Six Months Ended June 30,
	2023		2022
	(In Thousands Except Share Data)
Interest and dividend income:
Loans and leases	$	254,230	$	146,008
Debt securities		15,904		6,245
Marketable and restricted equity securities		2,928		665
Short-term investments		4,846		222
Total interest and dividend income		277,908		153,140
Interest expense:
Deposits		72,515		8,053
Borrowed funds		33,307		3,372
Total interest expense		105,822		11,425
Net interest income		172,086		141,715
Provision for credit losses		31,070		9
Provision for investment losses		331		58
Net interest income after provision for credit losses		140,685		141,648
Non-interest income:
Deposit Fees		5,523		5,244
Loan Fees		882		1,413
Loan level derivative income, net		2,736		2,301
Gain on investment securities, net		1,704		—
Gain on sales of loans and leases held-for-sale		1,946		635
Other		5,608		2,864
Total non-interest income		18,399		12,457
Non-interest expense:
Compensation and employee benefits		70,003		55,656
Occupancy		10,093		8,091
Equipment and data processing		12,993		10,009
Professional services		3,416		2,445
FDIC insurance		3,853		1,467
Advertising and marketing		2,792		2,591
Amortization of identified intangible assets		3,920		254
Merger and acquisition expense		7,411		535
Other		8,120		6,310
Total non-interest expense		122,601		87,358
Income before provision for income taxes		36,483		66,747
Provision for income taxes		7,073		16,847
Net income	$	29,410	$	49,900
Earnings per common share:
Basic	$	0.34	$	0.65
Diluted	$	0.34	$	0.65
Weighted average common shares outstanding during the period:
Basic		87,620,194		77,352,666
Diluted		87,887,980		77,671,601
Dividends paid per common share	$	0.270	$	0.255

BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Asset Quality Analysis (Unaudited)
	At and for the Three Months Ended
	June 30,2023			March 31,2023			December 31,2022			September 30,2022			June 30,2022
	(Dollars in Thousands)
NONPERFORMING ASSETS:
Loans and leases accounted for on a nonaccrual basis:
Commercial real estate mortgage	$	8,737		$	4,589		$	607		$	3,136		$	6,470
Construction		3,828			3,883			707			—			—
Total commercial real estate loans		12,565			8,472			1,314			3,136			6,470
Commercial		16,023			5,495			464			618			892
Equipment financing		12,809			9,908			9,653			10,544			10,183
Condominium association		—			51			58			64			71
Total commercial loans and leases		28,832			15,454			10,175			11,226			11,146
Residential mortgage		4,343			3,449			2,680			2,741			2,412
Home equity		583			1,079			723			616			721
Other consumer		—			—			2			2			3
Total consumer loans		4,926			4,528			3,405			3,359			3,136
Total nonaccrual loans and leases		46,323			28,454			14,894			17,721			20,752
Other repossessed assets		602			508			408			591			507
Total nonperforming assets	$	46,925		$	28,962		$	15,302		$	18,312		$	21,259
Loans and leases past due greater than 90 days and still accruing	$	490		$	726		$	33		$	9,583		$	266
Nonperforming loans and leases as a percentage of total loans and leases		0.50	%		0.31	%		0.19	%		0.24	%		0.28	%
Nonperforming assets as a percentage of total assets		0.42	%		0.25	%		0.17	%		0.21	%		0.25	%
PROVISION AND ALLOWANCE FOR LOAN AND LEASE LOSSES:
Allowance for loan and lease losses at beginning of period	$	120,865		$	98,482		$	94,169		$	93,188		$	95,463
Charge-offs		(1,690	)		(845	)		(658	)		(598	)		(1,533	)
Recoveries		593			394			348			777			291
Net (charge-offs) recoveries		(1,097	)		(451	)		(310	)		179			(1,242	)
Provision (credit) for loan and lease losses excluding unfunded commitments *		6,049			22,834			4,623			802			(1,033	)
Allowance for loan and lease losses at end of period	$	125,817		$	120,865		$	98,482		$	94,169		$	93,188
Allowance for loan and lease losses as a percentage of total loans and leases		1.35	%		1.31	%		1.29	%		1.27	%		1.28	%
NET CHARGE-OFFS (RECOVERIES):
Commercial real estate loans	$	(6	)	$	(6	)	$	(6	)	$	(6	)	$	(6	)
Commercial loans and leases		1,108			457			320			(179	)		1,254
Consumer loans		(5	)		—			(4	)		6			(6	)
Total net charge-offs (recoveries)	$	1,097		$	451		$	310		$	(179	)	$	1,242
Net loan and lease charge-offs as a percentage of average loans and leases (annualized)		0.05	%		0.02	%		0.02	%		(0.01	)%		0.07	%
*Provision for loan and lease losses does not include (credit) provision of $(0.3) million, $2.5 million, $1.0 million, $2.0 million, and $1.2 million for credit losses on unfunded commitments during the three months ended June 20, 2023, March 31, 2023, December 31, 2022, September 30, 2022 and June 30, 2022, respectively.

BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Average Yields / Costs (Unaudited)
	Three Months Ended
	June 30, 2023						March 31, 2023						June 30, 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)	$	1,000,440	$	8,091	3.23	%	$	1,029,068	$	7,974	3.10	%	$	726,374	$	3,249	1.79	%
Marketable and restricted equity securities (2)		77,364		1,673	8.65	%		76,911		1,255	6.53	%		30,461		337	4.42	%
Short-term investments		229,474		3,351	5.84	%		147,654		1,495	4.05	%		99,905		156	0.62	%
Total investments		1,307,278		13,115	4.01	%		1,253,633		10,724	3.42	%		856,740		3,742	1.75	%
Loans and Leases:
Commercial real estate loans (3)		5,640,491		79,582	5.58	%		5,579,977		67,667	4.85	%		4,220,257		38,967	3.65	%
Commercial loans (3)		913,732		13,502	5.85	%		892,522		14,017	6.28	%		695,365		7,074	4.03	%
Equipment financing (3)		1,253,199		22,357	7.14	%		1,226,717		21,213	6.92	%		1,129,606		17,897	6.34	%
Consumer loans (3)		1,482,799		16,903	4.56	%		1,452,072		19,070	5.28	%		1,195,051		10,397	3.48	%
Total loans and leases		9,290,221		132,344	5.70	%		9,151,288		121,967	5.33	%		7,240,279		74,335	4.11	%
Total interest-earning assets		10,597,499		145,459	5.49	%		10,404,921		132,691	5.10	%		8,097,019		78,077	3.86	%
Non-interest-earning assets		675,173						726,166						418,311
Total assets	$	11,272,672					$	11,131,087					$	8,515,330
Liabilities and Stockholders' Equity:
Interest-bearing liabilities:
Deposits:
NOW accounts	$	735,001		1,069	0.58	%	$	810,333		901	0.45	%	$	612,439		216	0.14	%
Savings accounts		1,374,337		5,917	1.73	%		1,160,003		2,514	0.88	%		930,957		211	0.09	%
Money market accounts		2,140,522		13,989	2.62	%		2,366,235		12,140	2.08	%		2,429,043		2,073	0.34	%
Certificates of deposit		1,390,913		10,021	2.89	%		1,346,761		7,456	2.25	%		1,018,471		1,694	0.67	%
Brokered deposit accounts		975,700		12,151	5.00	%		534,527		6,357	4.82	%		115,535		88	0.30	%
Total interest-bearing deposits		6,616,473		43,147	2.62	%		6,217,859		29,368	1.92	%		5,106,445		4,282	0.34	%
Borrowings
Advances from the FHLBB		1,191,424		14,287	4.74	%		1,264,523		14,531	4.60	%		183,047		489	1.06	%
Subordinated debentures and notes		84,098		1,363	6.49	%		84,062		1,354	6.44	%		83,952		1,262	6.02	%
Other borrowed funds		86,896		523	2.41	%		158,499		1,249	3.20	%		106,363		129	0.48	%
Total borrowings		1,362,418		16,173	4.70	%		1,507,084		17,134	4.55	%		373,362		1,880	1.99	%
Total interest-bearing liabilities		7,978,891		59,320	2.98	%		7,724,943		46,502	2.44	%		5,479,807		6,162	0.45	%
Non-interest-bearing liabilities:
Demand checking accounts		1,849,393						1,930,162						1,886,284
Other non-interest-bearing liabilities		270,221						316,347						173,072
Total liabilities		10,098,505						9,971,452						7,539,163
Stockholders’ equity		1,174,167						1,159,635						976,167
Total liabilities and equity	$	11,272,672					$	11,131,087					$	8,515,330
Net interest income (tax-equivalent basis) /Interest-rate spread (4)				86,139	2.51	%				86,189	2.66	%				71,915	3.41	%
Less adjustment of tax-exempt income				102						140						48
Net interest income			$	86,037					$	86,049					$	71,867
Net interest margin (5)					3.26	%					3.36	%					3.56	%
(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, 2023						June 30, 2022
	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)	$	1,014,675	$	16,065	3.17	%	$	723,336	$	6,245	1.73	%
Marketable and restricted equity securities (2)		77,139		2,928	7.59	%		29,192		665	4.55	%
Short-term investments		188,790		4,846	5.13	%		145,934		222	0.30	%
Total investments		1,280,604		23,839	3.72	%		898,462		7,132	1.59	%
Loans and Leases:
Commercial real estate loans (3)		5,610,401		147,249	5.22	%		4,186,523		74,994	3.56	%
Commercial loans (3)		903,185		27,519	6.06	%		725,422		15,072	4.13	%
Equipment financing (3)		1,240,031		43,570	7.03	%		1,117,467		35,909	6.43	%
Consumer loans (3)		1,467,521		35,973	4.91	%		1,183,328		20,139	3.41	%
Total loans and leases		9,221,138		254,311	5.52	%		7,212,740		146,114	4.05	%
Total interest-earning assets		10,501,742		278,150	5.30	%		8,111,202		153,246	3.78	%
Non-interest-earning assets		700,529						411,944
Total assets	$	11,202,271					$	8,523,146
Liabilities and Stockholders' Equity:
Interest-bearing liabilities:
Deposits:
NOW accounts	$	772,459		1,970	0.51	%	$	601,227		319	0.11	%
Savings accounts		1,267,762		8,431	1.34	%		932,059		409	0.09	%
Money market accounts		2,252,755		26,129	2.34	%		2,422,845		3,643	0.30	%
Certificates of deposit		1,368,959		17,477	2.57	%		1,054,897		3,542	0.68	%
Brokered deposit accounts		756,332		18,508	4.93	%		124,096		140	0.23	%
Total interest-bearing deposits		6,418,267		72,515	2.28	%		5,135,124		8,053	0.32	%
Borrowings
Advances from the FHLBB		1,227,772		28,818	4.67	%		143,681		676	0.94	%
Subordinated debentures and notes		84,080		2,717	6.46	%		83,934		2,506	5.97	%
Other borrowed funds		122,500		1,772	2.92	%		118,156		190	0.32	%
Total borrowings		1,434,352		33,307	4.62	%		345,771		3,372	1.94	%
Total interest-bearing liabilities		7,852,619		105,822	2.72	%		5,480,895		11,425	0.42	%
Non-interest-bearing liabilities:
Demand checking accounts		1,889,554						1,883,179
Other non-interest-bearing liabilities		293,157						172,400
Total liabilities		10,035,330						7,536,474
Stockholders’ equity		1,166,941						986,672
Total liabilities and equity	$	11,202,271					$	8,523,146
Net interest income (tax-equivalent basis) /Interest-rate spread (4)				172,328	2.58	%				141,821	3.36	%
Less adjustment of tax-exempt income				242						106
Net interest income			$	172,086					$	141,715
Net interest margin (5)					3.31	%					3.53	%
(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 EndedJune 30,						At and for the Six Months EndedJune 30,
				2023			2022			2023			2022
Reconciliation Table - Non-GAAP Financial Information				(Dollars in Thousands Except Share Data)						(Dollars in Thousands Except Share Data)
Reported Pretax Income				$	27,815		$	33,697		$	36,483		$	66,747
Less:
Security gains					3			—			1,704			—
Add:
Day 1 PCSB CECL provision					—			—			16,744			—
Merger and acquisition expense					1,002			535			7,411			535
Operating Pretax Income				$	28,814		$	34,232		$	58,934		$	67,282
Estimated effective tax rate					19.4	%		25.2	%		19.4	%		25.2	%
Estimated taxes					5,587			8,637			11,427			16,982
Operating earnings after tax				$	23,227		$	25,595		$	47,507		$	50,300
Operating earnings per common share:
Basic				$	0.26		$	0.33		$	0.54		$	0.65
Diluted				$	0.26		$	0.33		$	0.54		$	0.65
Weighted average common shares outstanding during the period:
Basic					88,665,135			77,091,013			87,620,194			77,352,666
Diluted					88,926,543			77,419,288			87,887,980			77,671,601
Return on average assets *					0.78	%		1.18	%		0.53	%		1.17	%
Less:
Security gains (after-tax) *					—	%		—	%		0.02	%		—	%
Add:
Day 1 PCSB CECL provision *					—	%		—	%		0.24	%		—	%
Merger and acquisition expense (after-tax) *					0.03	%		0.02	%		0.11	%		0.01	%
Operating return on average assets *					0.81	%		1.20	%		0.86	%		1.18	%
Return on average tangible assets *					0.79	%		1.21	%		0.54	%		1.19	%
Less:
Security gains (after-tax) *					—	%		—	%		0.03	%		—	%
Add:
Day 1 PCSB CECL provision *					—	%		—	%		0.25	%		—	%
Merger and acquisition expense (after-tax) *					0.03	%		0.02	%		0.11	%		0.01	%
Operating return on average tangible assets *					0.82	%		1.23	%		0.87	%		1.20	%
Return on average stockholders' equity *					7.44	%		10.32	%		5.04	%		10.11	%
Less:
Security gains (after-tax) *					—	%		—	%		0.24	%		—	%
Add:
Day 1 PCSB CECL provision *					—	%		—	%		2.31	%		—	%
Merger and acquisition expense (after-tax) *					0.28	%		0.16	%		1.02	%		0.08	%
Operating return on average stockholders' equity *					7.72	%		10.48	%		8.13	%		10.19	%
Return on average tangible stockholders' equity *					9.67	%		12.39	%		6.59	%		12.11	%
Less:
Security gains (after-tax) *					—	%		—	%		0.31	%		—	%
Add:
Day 1 PCSB CECL provision *					—	%		—	%		3.02	%		—	%
Merger and acquisition expense (after-tax) *					0.36	%		0.20	%		1.34	%		0.10	%
Operating return on average tangible stockholders' equity *					10.03	%		12.59	%		10.64	%		12.21	%
* Ratios at and for the three months ended are annualized.
	At and for the Three Months Ended
	June 30,2023			March 31,2023			December 31,2022			September 30,2022			June 30,2022
	(Dollars in Thousands)
Net income, as reported	$	21,850		$	7,560		$	29,695		$	30,149		$	25,195
Average total assets	$	11,272,672		$	11,131,087		$	8,857,631		$	8,586,420		$	8,515,330
Less: Average goodwill and average identified intangible assets, net		270,147			278,135			162,266			162,387			162,507
Average tangible assets	$	11,002,525		$	10,852,952		$	8,695,365		$	8,424,033		$	8,352,823
Return on average tangible assets (annualized)		0.79	%		0.28	%		1.37	%		1.43	%		1.21	%
Average total stockholders’ equity	$	1,174,167		$	1,159,635		$	982,306		$	981,379		$	976,167
Less: Average goodwill and average identified intangible assets, net		270,147			278,135			162,266			162,387			162,507
Average tangible stockholders’ equity	$	904,020		$	881,500		$	820,040		$	818,992		$	813,660
Return on average tangible stockholders’ equity (annualized)		9.67	%		3.43	%		14.48	%		14.72	%		12.39	%
Total stockholders’ equity	$	1,162,308		$	1,165,066		$	992,125		$	963,618		$	968,496
Less:
Goodwill		241,222			241,222			160,427			160,427			160,427
Identified intangible assets, net		28,126			30,080			1,781			1,902			2,022
Tangible stockholders' equity	$	892,960		$	893,764		$	829,917		$	801,289		$	806,047
Total assets	$	11,206,078		$	11,522,485		$	9,185,836		$	8,695,708		$	8,514,230
Less:
Goodwill		241,222			241,222			160,427			160,427			160,427
Identified intangible assets, net		28,126			30,080			1,781			1,902			2,022
Tangible assets	$	10,936,730		$	11,251,183		$	9,023,628		$	8,533,379		$	8,351,781
Tangible stockholders’ equity to tangible assets		8.16	%		7.94	%		9.20	%		9.39	%		9.65	%
Tangible stockholders' equity	$	892,960		$	893,764		$	829,917		$	801,289		$	806,047
Number of common shares issued		96,998,075			96,998,075			85,177,172			85,177,172			85,177,172
Less:
Treasury shares		7,734,891			7,734,891			7,731,445			7,730,945			7,995,888
Unallocated ESOP shares		—			—			—			4,833			11,442
Unvested restricted shares		598,049			598,049			601,495			601,995			497,297
Number of common shares outstanding		88,665,135			88,665,135			76,844,232			76,839,399			76,672,545
Tangible book value per common share	$	10.07		$	10.08		$	10.80		$	10.43		$	10.51

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