Brookline Bancorp Announces Third Quarter Results
Net Income of $20.1 million, EPS of $0.23
Quarterly Dividend of $0.135
BOSTON, Oct. 23, 2024 (GLOBE NEWSWIRE) -- Brookline Bancorp, Inc. (NASDAQ:BRKL) (the "Company") today announced net income and operating earnings after tax (non-GAAP) of $20.1 million, or $0.23 per basic and diluted share, for the third quarter of 2024, compared to 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, and net income and operating earnings after tax (non-GAAP) of $22.7 million, or $0.26 per basic and diluted share, for the third quarter of 2023.
"Our Company experienced improved performance in the third quarter," commented Paul Perrault, Chairman and CEO, who continued, "As we move into the final months of 2024, we are confident our experienced bankers' ability to continue to deliver exceptional service to our customers will be better reflected in our profitability as interest rates normalize."
BALANCE SHEET
Total assets at September 30, 2024 were $11.7 billion, representing an increase of $41.4 million from $11.6 billion at June 30, 2024, and an increase of $496.2 million from September 30, 2023. At September 30, 2024, total loans and leases were $9.8 billion, representing an increase of $34.1 million from June 30, 2024, and an increase of $374.5 million from September 30, 2023.
Total investment securities at September 30, 2024 decreased $1.0 million to $855.4 million from $856.4 million at June 30, 2024, and decreased $25.0 million from $880.4 million at September 30, 2023. Total cash and cash equivalents at September 30, 2024 increased $64.8 million to $407.9 million from $343.1 million at June 30, 2024, and increased $246.9 million from $161.0 million at September 30, 2023. As of September 30, 2024, total investment securities and total cash and cash equivalents represented 10.8 percent of total assets, compared to 10.3 percent and 9.3 percent as of June 30, 2024 and September 30, 2023, respectively.
Total deposits at September 30, 2024 decreased $4.8 million to $8.7 billion from June 30, 2024. Despite the decrease during the quarter, customer deposits increased $103.2 million, offset by a $107.9 million decrease in brokered deposits. Total deposits increased $166.3 million from $8.6 billion at September 30, 2023, primarily driven by growth in customer deposits. The increase in customer deposits quarter to date included a $43.5 million increase in demand checking accounts.
Total borrowed funds at September 30, 2024 increased $68.1 million to $1.5 billion from June 30, 2024, and increased $362.5 million from $1.1 billion at September 30, 2023.
The ratio of stockholders' equity to total assets was 10.54 percent at September 30, 2024, compared to 10.30 percent at June 30, 2024, and 10.36 percent at September 30, 2023. The ratio of tangible stockholders' equity to tangible assets (non-GAAP) was 8.50 percent at September 30, 2024, as compared to 8.23 percent at June 30, 2024, and 8.16 percent at September 30, 2023. Tangible book value per common share (non-GAAP) increased $0.36 from $10.53 at June 30, 2024 to $10.89 at September 30, 2024, and increased $0.87 from $10.02 at September 30, 2023.
NET INTEREST INCOME
Net interest income increased $3.0 million to $83.0 million during the third quarter of 2024 from $80.0 million for the quarter ended June 30, 2024. The net interest margin increased 7 basis points to 3.07 percent for the three months ended September 30, 2024 from 3.00 percent for the three months ended June 30, 2024, primarily driven by higher yields on loans and leases partially offset by higher funding costs.
NON-INTEREST INCOME
Total non-interest income for the quarter ended September 30, 2024 decreased $0.1 million to $6.3 million from $6.4 million for the quarter ended June 30, 2024.
PROVISION FOR CREDIT LOSSES
The Company recorded a provision for credit losses of $4.8 million for the quarter ended September 30, 2024, compared to $5.6 million for the quarter ended June 30, 2024. The decrease in provision was largely driven by improving economic forecasts partially offset by an increase in specific reserves on nonperforming credits.
Total net charge-offs for the third quarter of 2024 were $3.8 million, compared to $8.4 million in the second quarter of 2024. The $3.8 million in net charge-offs was driven by $2.6 million in equipment financing, largely within specialty vehicle. The ratio of net loan and lease charge-offs to average loans and leases on an annualized basis decreased to 16 basis points for the third quarter of 2024 from 35 basis points for the second quarter of 2024.
The allowance for loan and lease losses represented 1.31 percent of total loans and leases at September 30, 2024, compared to 1.25 percent at June 30, 2024, and 1.27 percent at September 30, 2023.
ASSET QUALITY
The ratio of nonperforming loans and leases to total loans and leases was 0.73 percent at September 30, 2024, an increase from 0.62 percent at June 30, 2024. Total nonaccrual loans and leases increased $10.5 million to $71.2 million at September 30, 2024 from $60.7 million at June 30, 2024. The increase was driven by one equipment financing relationship of $9.3 million which has been reserved at 55 percent. The ratio of nonperforming assets to total assets was 0.62 percent at September 30, 2024, an increase from 0.54 percent at June 30, 2024. Total nonperforming assets increased $10.1 million to $72.8 million at September 30, 2024 from $62.7 million at June 30, 2024.
NON-INTEREST EXPENSE
Non-interest expense for the quarter ended September 30, 2024 decreased $1.2 million to $57.9 million from $59.2 million for the quarter ended June 30, 2024. Excluding the one time restructuring charge taken in the second quarter of $0.8 million, non-interest expense decreased $0.4 million primarily due to a reduction in advertising and marketing expense.
PROVISION FOR INCOME TAXES
The effective tax rate was 24.7 percent and 24.6 percent for the three and nine months ended September 30, 2024 compared to 24.4 percent for the three months ended June 30, 2024 and 21.4 percent and 20.3 percent for the three and nine months ended September 30, 2023.
RETURNS ON AVERAGE ASSETS AND AVERAGE EQUITY
The annualized return on average assets increased to 0.70 percent during the third quarter 2024 from 0.57 percent for the second quarter of 2024.
The annualized return on average stockholders' equity increased to 6.63 percent during the third quarter of 2024 from 5.49 percent for the second quarter of 2024. The annualized return on average tangible stockholders' equity increased to 8.44 percent for the third quarter of 2024 from 7.04 percent for the second quarter of 2024.
DIVIDEND DECLARED
The Company's Board of Directors approved a dividend of $0.135 per share for the quarter ended September 30, 2024. The dividend will be paid on November 29, 2024 to stockholders of record on November 15, 2024.
CONFERENCE CALL
The Company will conduct a conference call/webcast at 1:30 PM Eastern Time on Thursday, October 24, 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/314623001. 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 414186). 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: 898921.
ABOUT BROOKLINE BANCORP, INC.
Brookline Bancorp, Inc., a bank holding company with $11.7 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:
Contact:
Carl M. Carlson
Brookline Bancorp, Inc.
Co-President and Chief Financial and Strategy Officer
(617) 425-5331
BROOKLINE BANCORP, INC. AND SUBSIDIARIESSelected Financial Highlights (Unaudited)
At and for the Three Months Ended
September 30, 2024
June 30, 2024
March 31, 2024
December 31, 2023
September 30, 2023
(Dollars In Thousands Except per Share Data)
Earnings Data:
Net interest income
$
83,008
$
80,001
$
81,588
$
83,555
$
84,070
Provision for credit losses on loans
4,832
5,607
7,423
3,851
2,947
Provision (credit) for credit losses on investments
(172)
(39)
(44)
(76)
84
Non-interest income
6,348
6,396
6,284
8,027
5,508
Non-interest expense
57,948
59,184
61,014
59,244
57,679
Income before provision for income taxes
26,748
21,645
19,479
28,563
28,868
Net income
20,142
16,372
14,665
22,888
22,701
Performance Ratios:
Net interest margin (1)
3.07
%
3.00
%
3.06
%
3.15
%
3.18
%
Interest-rate spread (1)
2.26
%
2.14
%
2.21
%
2.39
%
2.45
%
Return on average assets (annualized)
0.70
%
0.57
%
0.51
%
0.81
%
0.81
%
Return on average tangible assets (annualized) (non-GAAP)
0.72
%
0.59
%
0.53
%
0.83
%
0.83
%
Return on average stockholders' equity (annualized)
6.63
%
5.49
%
4.88
%
7.82
%
7.78
%
Return on average tangible stockholders' equity (annualized) (non-GAAP)
8.44
%
7.04
%
6.26
%
10.12
%
10.09
%
Efficiency ratio (2)
64.85
%
68.50
%
69.44
%
64.69
%
64.39
%
Per Common Share Data:
Net income, Basic
$
0.23
$
0.18
$
0.16
$
0.26
$
0.26
Net income, Diluted
0.23
0.18
0.16
0.26
0.26
Cash dividends declared
0.135
0.135
0.135
0.135
0.135
Book value per share (end of period)
13.81
13.48
13.43
13.48
13.03
Tangible book value per share (end of period) (non-GAAP)
10.89
10.53
10.47
10.50
10.02
Stock price (end of period)
10.09
8.35
9.96
10.91
9.11
Balance Sheet:
Total assets
$
11,676,721
$
11,635,292
$
11,542,731
$
11,382,256
$
11,180,555
Total loans and leases
9,755,236
9,721,137
9,655,086
9,641,589
9,380,782
Total deposits
8,732,271
8,737,036
8,718,653
8,548,125
8,566,013
Total stockholders' equity
1,230,362
1,198,480
1,194,231
1,198,644
1,157,871
Asset Quality:
Nonperforming assets
$
72,821
$
62,683
$
42,489
$
45,324
$
51,540
Nonperforming assets as a percentage of total assets
0.62
%
0.54
%
0.37
%
0.40
%
0.46
%
Allowance for loan and lease losses
$
127,316
$
121,750
$
120,124
$
117,522
$
119,081
Allowance for loan and lease losses as a percentage of total loans and leases
1.31
%
1.25
%
1.24
%
1.22
%
1.27
%
Net loan and lease charge-offs
$
3,808
$
8,387
$
8,781
$
7,141
$
10,974
Net loan and lease charge-offs as a percentage of average loans and leases (annualized)
0.16
%
0.35
%
0.36
%
0.30
%
0.47
%
Capital Ratios:
Stockholders' equity to total assets
10.54
%
10.30
%
10.35
%
10.53
%
10.36
%
Tangible stockholders' equity to tangible assets (non-GAAP)
8.50
%
8.23
%
8.25
%
8.39
%
8.16
%
(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 SUBSIDIARIESConsolidated Balance Sheets (Unaudited)
September 30,2024
June 30, 2024
March 31, 2024
December 31, 2023
September 30,2023
ASSETS
(In Thousands Except Share Data)
Cash and due from banks
$
82,168
$
60,067
$
45,708
$
34,514
$
33,506
Short-term investments
325,721
283,017
256,178
98,513
127,495
Total cash and cash equivalents
407,889
343,084
301,886
133,027
161,001
Investment securities available-for-sale
855,391
856,439
865,798
916,601
880,412
Total investment securities
855,391
856,439
865,798
916,601
880,412
Allowance for investment security losses
(186
)
(359
)
(398
)
(441
)
(517
)
Net investment securities
855,205
856,080
865,400
916,160
879,895
Loans and leases held-for-sale
—
—
6,717
—
—
Loans and leases:
Commercial real estate loans
5,779,290
5,782,111
5,755,239
5,764,529
5,669,768
Commercial loans and leases
2,453,038
2,443,530
2,416,904
2,399,668
2,241,375
Consumer loans
1,522,908
1,495,496
1,482,943
1,477,392
1,469,639
Total loans and leases
9,755,236
9,721,137
9,655,086
9,641,589
9,380,782
Allowance for loan and lease losses
(127,316
)
(121,750
)
(120,124
)
(117,522
)
(119,081
)
Net loans and leases
9,627,920
9,599,387
9,534,962
9,524,067
9,261,701
Restricted equity securities
82,675
78,963
74,709
77,595
65,460
Premises and equipment, net of accumulated depreciation
86,925
88,378
89,707
89,853
90,476
Right-of-use asset operating leases
41,934
35,691
33,133
30,863
31,619
Deferred tax asset
50,827
60,032
60,484
56,952
74,491
Goodwill
241,222
241,222
241,222
241,222
241,222
Identified intangible assets, net of accumulated amortization
19,162
20,830
22,499
24,207
26,172
Other real estate owned and repossessed assets
1,579
1,974
1,817
1,694
299
Other assets
261,383
309,651
310,195
286,616
348,219
Total assets
$
11,676,721
$
11,635,292
$
11,542,731
$
11,382,256
$
11,180,555
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Demand checking accounts
$
1,681,858
$
1,638,378
$
1,629,371
$
1,678,406
$
1,745,137
NOW accounts
637,374
647,370
654,748
661,863
647,476
Savings accounts
1,736,989
1,735,857
1,727,893
1,669,018
1,625,804
Money market accounts
2,041,185
2,073,557
2,065,569
2,082,810
2,161,359
Certificate of deposit accounts
1,819,353
1,718,414
1,670,147
1,574,855
1,491,844
Brokered deposit accounts
815,512
923,460
970,925
881,173
894,393
Total deposits
8,732,271
8,737,036
8,718,653
8,548,125
8,566,013
Borrowed funds:
Advances from the FHLB
1,345,003
1,265,079
1,150,153
1,223,226
899,304
Subordinated debentures and notes
84,293
84,258
84,223
84,188
84,152
Other borrowed funds
68,251
80,125
127,505
69,256
151,612
Total borrowed funds
1,497,547
1,429,462
1,361,881
1,376,670
1,135,068
Operating lease liabilities
43,266
37,102
34,235
31,998
32,807
Mortgagors' escrow accounts
14,456
17,117
16,245
17,239
12,578
Reserve for unfunded credits
6,859
11,400
15,807
19,767
21,497
Accrued expenses and other liabilities
151,960
204,695
201,679
189,813
254,721
Total liabilities
10,446,359
10,436,812
10,348,500
10,183,612
10,022,684
Stockholders' equity:
Common stock, $0.01 par value; 200,000,000 shares authorized; 96,998,075 shares issued, 96,998,075 shares issued, 96,998,075 shares issued, 96,998,075 shares issued, and 96,998,075 shares issued, respectively
970
970
970
970
970
Additional paid-in capital
901,562
904,775
903,726
902,659
901,376
Retained earnings
453,555
445,560
441,285
438,722
427,937
Accumulated other comprehensive income
(38,081
)
(61,693
)
(60,841
)
(52,798
)
(81,541
)
Treasury stock, at cost;
7,015,843, 7,373,009, 7,354,399, 7,354,399 and 7,350,981 shares, respectively
(87,644
)
(91,132
)
(90,909
)
(90,909
)
(90,871
)
Total stockholders' equity
1,230,362
1,198,480
1,194,231
1,198,644
1,157,871
Total liabilities and stockholders' equity
$
11,676,721
$
11,635,292
$
11,542,731
$
11,382,256
$
11,180,555
BROOKLINE BANCORP, INC. AND SUBSIDIARIESConsolidated Statements of Income (Unaudited)
Three Months Ended
September 30, 2024
June 30, 2024
March 31,2024
December 31, 2023
September 30, 2023
(In Thousands Except Share Data)
Interest and dividend income:
Loans and leases
$
149,643
$
145,585
$
145,265
$
142,948
$
136,561
Debt securities
6,473
6,480
6,878
6,945
6,799
Restricted equity securities
1,458
1,376
1,492
1,333
1,310
Short-term investments
1,986
1,914
1,824
1,093
2,390
Total interest and dividend income
159,560
155,355
