UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

~~QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)~~(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

~~OF THE SECURITIES EXCHANGE ACT OF 1934~~

For the quarterly period ended ~~September 30, 2017~~March 31, 2023


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from N/A to .

Commission file number 0-23695

~~Brookline Bancorp, Inc.~~BROOKLINE BANCORP INC.

(Exact name of registrant as specified in its charter)

Delaware

04-3402944

(State or other jurisdiction of
incorporation or organization)

(I.R.S. Employer Identification No.)

~~Delaware~~

~~04-3402944~~

~~(State or other jurisdiction of incorporation or organization)~~

~~(I.R.S. Employer Identification No.)~~

131 Clarendon Street

Boston MA

02116

(Address of principal executive offices)

(Zip Code)

(617) 425-4600

(Registrant’s telephone number, including area code)


Securities registered pursuant to Section 12(b) of the Act:
Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock	BRKL	Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. ~~YES~~ x NO oYes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically ~~and posted on its corporate Web site, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit ~~and post~~ such files). ~~YES~~ x NO oYes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12-b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

~~Large accelerated filer~~

~~Accelerated filer~~

Non-accelerated filer

o ☐(Do not check if a smaller reporting company)

Smaller Reporting Company

o☐

Emerging growth company

o☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ~~YES~~ o NO xYes ☐ No ☒

At ~~November 3, 2017,~~April 30, 2023, the number of shares of common stock, par value $0.01 per share, outstanding was ~~76,652,372.~~

88,665,135.

BROOKLINE BANCORP, INC. AND SUBSIDIARIES

FORM 10-Q

Table of Contents


				Page
Part I		Financial Information

			~~Page~~
~~Part I~~ Item 1.	~~Financial Information~~

~~Item 1.~~	Unaudited Consolidated Financial Statements

		Unaudited Consolidated Balance Sheets at ~~September 30, 2017~~March 31, 2023 and December 31, ~~2016~~2022		1

		Unaudited Consolidated Statements of Income for the Three Months Ended March 31, 2023 and ~~Nine Months Ended September 30, 2017 and 2016~~2022		2

		Unaudited Consolidated Statements of Comprehensive Income for the Three Months Ended March 31, 2023 and ~~Nine Months Ended September 30, 2017 and 2016~~2022		3

		Unaudited Consolidated Statements of Changes in Equity for the ~~Nine~~Three Months Ended ~~September 30, 2017~~March 31, 2023 and ~~2016~~2022		4

		Unaudited Consolidated Statements of Cash Flows for the ~~Nine~~Three Months Ended ~~September 30, 2017~~March 31, 2023 and ~~2016~~2022		65

		Notes to Unaudited Consolidated Financial Statements		86

Item 2.		Management’s Discussion and Analysis of Financial Condition and Results of Operations		5647

Item 3.		Quantitative and Qualitative Disclosures About Market Risk		9480

Item 4.		Controls and Procedures		9782

Part II		Other Information

Item 1.		Legal Proceedings		9883

Item 1A.		Risk Factors		9883

Item 2.		Unregistered Sales of Equity Securities and Use of Proceeds		9883

Item 3.		Defaults Upon Senior Securities		9883

Item 4.		Mine Safety Disclosures		9883

Item 5.		Other Information		9883

Item 6.		Exhibits		9984

		Signatures		~~100~~85

Table of Contents

PART I — FINANCIAL INFORMATION

Item 1. Unaudited Consolidated Financial Statements


BROOKLINE BANCORP, INC. AND SUBSIDIARIES Unaudited Consolidated Balance Sheets
	At March 31, 2023		At December 31, 2022
	(In Thousands Except Share Data)
ASSETS
Cash and due from banks	$	30,782	$	191,767
Short-term investments	455,538		191,192
Total cash and cash equivalents	486,320		382,959
Investment securities available-for-sale, net	1,067,032		656,766


Total investment securities	1,067,032		656,766



Loans and leases:
Commercial real estate loans	5,610,414		4,404,148
Commercial loans and leases	2,147,149		2,016,499
Consumer loans	1,489,402		1,223,741
Total loans and leases	9,246,965		7,644,388
Allowance for loan and lease losses	(120,865)		(98,482)
Net loans and leases	9,126,100		7,545,906
Restricted equity securities	86,230		71,307
Premises and equipment, net of accumulated depreciation of $100,192 and $92,219, respectively	87,799		71,391
Right-of-use asset operating leases	30,067		19,484
Deferred tax asset	75,028		52,237
Goodwill	241,222		160,427
Identified intangible assets, net of accumulated amortization of $42,089 and $40,123, respectively	30,080		1,781
Other real estate owned ("OREO") and repossessed assets, net	508		408
Other assets	292,099		223,170
Total assets	$	11,522,485	$	9,185,836
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Demand checking accounts	$	1,899,370	$	1,802,518





Interest-bearing deposits	6,557,092		4,719,628
Total deposits	8,456,462		6,522,146
Borrowed funds:
Advances from the Federal Home Loan Bank of Boston and New York ("FHLB")	1,458,457		1,237,823
Subordinated debentures and notes	84,080		84,044
Other borrowed funds	87,565		110,785
Total borrowed funds	1,630,102		1,432,652
Operating lease liabilities	31,373		19,484
Mortgagors' escrow accounts	17,080		5,607
Reserve for unfunded credits	23,112		20,602

Accrued expenses and other liabilities	199,290		193,220
Total liabilities	10,357,419		8,193,711

Commitments and contingencies (Note 12)
Stockholders' Equity:

Common stock, $0.01 par value; 200,000,000 shares authorized; 96,998,075 shares issued and 85,177,172 shares issued, respectively	970		852
Additional paid-in capital	904,174		736,074
Retained earnings	407,528		412,019
Accumulated other comprehensive (loss) income	(52,688)		(61,947)
Treasury stock, at cost; 7,734,891 shares and 7,731,445 shares, respectively	(94,918)		(94,873)



Total stockholders' equity	1,165,066		992,125
Total liabilities and stockholders' equity	$	11,522,485	$	9,185,836

See accompanying notes to unaudited consolidated financial statements.

BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Unaudited Consolidated Balance Sheets
At September 30, 2017 At December 31, 2016
(In Thousands Except Share Data)
ASSETS
Cash and due from banks $ 35,392
$ 36,055
Short-term investments 27,971
31,602
Total cash and cash equivalents 63,363
67,657
Investment securities available-for-sale 522,910
523,634
Investment securities held-to-maturity (fair value of $107,220 and $85,271, respectively) 107,738
87,120
Total investment securities 630,648
610,754
Loans held-for-sale 2,973
13,078
Loans and leases:
Commercial real estate loans 3,029,009
2,918,567
Commercial loans and leases 1,585,296
1,495,408
Consumer loans 1,025,135
984,889
Total loans and leases 5,639,440
5,398,864
Allowance for loan and lease losses (65,413 ) (53,666 )
Net loans and leases 5,574,027
5,345,198
Restricted equity securities 62,135
64,511
Premises and equipment, net of accumulated depreciation of $61,716 and $58,790, respectively 81,159
76,176
Deferred tax asset 28,093
25,247
Goodwill 137,890
137,890
Identified intangible assets, net of accumulated amortization of $33,219 and $31,649, respectively 6,563
8,133
Other real estate owned ("OREO") and repossessed assets, net 4,398
1,399
Other assets 95,035
88,086
Total assets $ 6,686,284
$ 6,438,129
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Demand checking accounts $ 905,472
$ 900,474
Interest-bearing deposits:
NOW accounts 318,284
323,160
Savings accounts 665,558
613,061
Money market accounts 1,749,040
1,733,359
Certificate of deposit accounts 1,167,329
1,041,022
Total interest-bearing deposits 3,900,211
3,710,602
Total deposits 4,805,683
4,611,076
Borrowed funds:
Advances from the Federal Home Loan Bank of Boston ("FHLBB") 872,579
910,774
Subordinated debentures and notes
83,229
83,105
Other borrowed funds 30,087
50,207
Total borrowed funds 985,895
1,044,086
Mortgagors' escrow accounts 8,151
7,645
Accrued expenses and other liabilities 74,019
72,573
Total liabilities 5,873,748
5,735,380

Commitments and contingencies (Note 12)

Stockholders' Equity:
Brookline Bancorp, Inc. stockholders' equity:
Common stock, $0.01 par value; 200,000,000 shares authorized; 81,695,695 shares issued and 75,744,445 shares issued, respectively 817
757
Additional paid-in capital 697,888
616,734
Retained earnings, partially restricted 160,225
136,671
Accumulated other comprehensive loss (1,893 ) (3,818 )
Treasury stock, at cost; 4,572,954 shares and 4,707,096 shares, respectively (51,452 ) (53,837 )
Unallocated common stock held by Employee Stock Ownership Plan ("ESOP"); 150,921 shares and 176,688 shares, respectively (823 ) (963 )
Total Brookline Bancorp, Inc. stockholders' equity 804,762
695,544
Noncontrolling interest in subsidiary 7,774
7,205
Total stockholders' equity 812,536
702,749
Total liabilities and stockholders' equity $ 6,686,284
$ 6,438,129

Table of Contents

BROOKLINE BANCORP, INC. AND SUBSIDIARIES

Unaudited Consolidated Statements of Income


	Three Months Ended March 31,
	2023		2022
	(In Thousands Except Share Data)
Interest and dividend income:
Loans and leases	$	121,931	$	71,721
Debt securities	7,870		2,996
Restricted equity securities	1,255		328
Short-term investments	1,495		66
Total interest and dividend income	132,551		75,111
Interest expense:
Deposits	29,368		3,771
Borrowed funds	17,134		1,492
Total interest expense	46,502		5,263
Net interest income	86,049		69,848
Provision (credit) for credit losses	25,542		(164)
Provision for investment losses	—		4
Net interest income after provision for credit losses	60,507		70,008
Non-interest income:
Deposit fees	2,657		2,500
Loan fees	391		747
Loan level derivative income, net	2,373		686
Gain on investment securities, net	1,701		—
Gain on sales of loans and leases held-for-sale	1,638		344

Other	4,177		1,252
Total non-interest income	12,937		5,529
Non-interest expense:
Compensation and employee benefits	36,565		26,884
Occupancy	5,223		4,284
Equipment and data processing	6,462		5,078
Professional services	1,430		1,226
FDIC insurance	1,244		728
Advertising and marketing	1,410		1,272
Amortization of identified intangible assets	1,966		134
Merger and acquisition expense	6,409		—
Other	4,067		2,881
Total non-interest expense	64,776		42,487
Income before provision for income taxes	8,668		33,050
Provision for income taxes	1,108		8,345


Net income	$	7,560	$	24,705
Earnings per common share:
Basic	$	0.09	$	0.32
Diluted	0.09		0.32
Weighted average common shares outstanding during the year:
Basic	86,563,641		77,617,227
Diluted	86,837,806		77,926,822
Dividends paid per common share	$	0.135	$	0.125

See accompanying notes to unaudited consolidated financial statements.

Three Months Ended September 30, Nine Months Ended September 30,
2017 2016 2017 2016
(In Thousands Except Share Data)
Interest and dividend income:
Loans and leases $ 63,054
$ 57,858
$ 182,750
$ 167,474
Debt securities 3,154
2,822
9,310
8,829
Marketable and restricted equity securities 788
804
2,311
2,213
Short-term investments 180
47
342
149
Total interest and dividend income 67,176
61,531
194,713
178,665
Interest expense:
Deposits 5,984
5,112
16,607
14,875
Borrowed funds 4,349
4,069
12,582
11,980
Total interest expense 10,333
9,181
29,189
26,855
Net interest income 56,843
52,350
165,524
151,810
Provision for credit losses 2,911
2,215
17,186
7,138
Net interest income after provision for credit losses 53,932
50,135
148,338
144,672
Non-interest income:
Deposit fees 2,547
2,289
7,508
6,650
Loan fees 282
330
772
977
Loan level derivative income, net 844
858
1,432
3,697
Gain on sales of investment securities, net —
—
11,393
—
Gain on sales of loans and leases held-for-sale 1,049
588
1,709
1,986
Other 1,251
1,264
3,544
3,893
Total non-interest income 5,973
5,329
26,358
17,203
Non-interest expense:
Compensation and employee benefits 21,067
20,369
61,761
58,179
Occupancy 3,650
3,411
10,952
10,328
Equipment and data processing 4,210
3,826
12,437
11,468
Professional services 973
997
3,115
2,925
FDIC insurance 842
956
2,648
2,677
Advertising and marketing 839
844
2,513
2,558
Amortization of identified intangible assets 519
623
1,570
1,879
Merger and acquisition expense 205
—
205
—
Other 3,103
2,362
8,758
7,707
Total non-interest expense 35,408
33,388
103,959
97,721
Income before provision for income taxes 24,497
22,076
70,737
64,154
Provision for income taxes 8,330
7,804
24,924
22,868
Net income before noncontrolling interest in subsidiary 16,167
14,272
45,813
41,286
Less net income attributable to noncontrolling interest in subsidiary 801
655
2,122
2,203
Net income attributable to Brookline Bancorp, Inc. $ 15,366
$ 13,617
$ 43,691
$ 39,083
Earnings per common share:
Basic $ 0.20
$ 0.19
$ 0.59
$ 0.56
Diluted 0.20
0.19
0.59
0.56
Weighted average common shares outstanding during the year:
Basic 76,452,539
70,299,722
73,743,658
70,228,127
Diluted 76,759,430
70,450,760
74,117,180
70,394,465
Dividends declared per common share $ 0.09
$ 0.09
$ 0.27
$ 0.27

Table of Contents

BROOKLINE BANCORP, INC. AND SUBSIDIARIES

Unaudited Consolidated Statements of Comprehensive Income


	Three Months Ended March 31,
	2023		2022
	(In Thousands)
Net income	$	7,560	$	24,705

Investment securities available-for-sale:
Unrealized securities holding gains (losses)	10,140		(37,542)
Non-credit gain on impairment of securities	—		—
Income tax (expense) benefit	(2,229)		8,275
Net unrealized securities holding gains (losses) before reclassification adjustments, net of taxes	7,911		(29,267)

Less reclassification adjustments for securities gains (losses) included in net income:
Gain (loss) on sales of securities, net	—		—
Income tax (expense) benefit	—		—
Net reclassification adjustments for securities gains (losses) included in net income	—		—
Net unrealized securities holding gains (losses)	7,911		(29,267)

Cash flow hedges:
Change in fair value of cash flow hedges	1,278		57
Income tax (expense) benefit	(332)		—

Net change in fair value of cash flow hedges, net of taxes	946		57

Less reclassification adjustment for change in fair value of cash flow hedges:
Gain (loss) on change in fair value of cash flow hedges	(543)		2
Income tax (expense) benefit	141		—
Net reclassification adjustment for change in fair value of cash flow hedges	(402)		2

Net change in fair value of cash flow hedges	1,348		55







Other comprehensive income (loss), net of taxes	9,259		(29,212)



Comprehensive income	$	16,819	$	(4,507)

See accompanying notes to unaudited consolidated financial statements.

Three Months Ended September 30, Nine Months Ended September 30,
2017 2016 2017 2016
(In Thousands)
Net income before noncontrolling interest in subsidiary $ 16,167
$ 14,272
$ 45,813
$ 41,286

Investment securities available-for-sale:
Unrealized securities holding gains (losses) 439
(1,672 ) 3,002
11,486
Income tax (benefit) expense (157 ) 599
(1,077 ) (4,114 )
Net unrealized securities holding gains (losses) before reclassification adjustments, net of taxes 282
(1,073 ) 1,925
7,372

Comprehensive income 16,449
13,199
47,738
48,658
Net income attributable to noncontrolling interest in subsidiary 801
655
2,122
2,203
Comprehensive income attributable to Brookline Bancorp, Inc. $ 15,648
$ 12,544
$ 45,616
$ 46,455

Table of Contents

BROOKLINE BANCORP, INC. AND SUBSIDIARIES

Unaudited Consolidated Statements of Changes in Stockholders' Equity

~~Nine~~Three Months Ended ~~September 30, 2017~~March 31, 2023 and ~~2016~~2022


	Common Stock		Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Treasury Stock		Unallocated Common Stock Held by ESOP		Total Stockholders' Equity
	(In Thousands)
Balance at December 31, 2022	$	852	$	736,074	$	412,019	$	(61,947)	$	(94,873)	—		$	992,125
Net income	—		—		7,560		—		—		—		7,560

PCSB acquisition	118		167,524		—		—		—				167,642
Other comprehensive income (loss)	—		—		—		9,259		—		—		9,259
Common stock dividends of $0.135 per share	—		—		(11,970)		—		—		—		(11,970)


Restricted stock awards issued, net of awards surrendered	—		(8)		—		—		(45)		—		(53)
Compensation under recognition and retention plans	—		584		(81)		—		—		—		503




Balance at March 31, 2023	$	970	$	904,174	$	407,528	$	(52,688)	$	(94,918)	$	—	$	1,165,066


	Common Stock		Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Treasury Stock		Unallocated Common Stock Held by ESOP		Total Stockholders' Equity
	(In Thousands)
Balance at December 31, 2021	$	852	$	736,826	$	342,639	$	(110)	$	(84,718)	$	(147)	$	995,342
Net income	—		—		24,705		—		—		—		24,705



Other comprehensive income (loss)	—		—		—		(29,212)		—		—		(29,212)
Common stock dividends of $0.125 per share	—		—		(9,705)		—		—		—		(9,705)



Compensation under recognition and retention plan	—		757		(63)		—		—		—		694

Common stock held by ESOP committed to be released (6,609 shares)	—		75		—		—		—		36		111

Balance at March 31, 2022	$	852	$	737,658	$	357,576	$	(29,322)	$	(84,718)	$	(111)	$	981,935

See accompanying notes to unaudited consolidated financial statements.

Common
Stock

Additional
Paid-in
Capital

Retained
Earnings

Accumulated
Other
Comprehensive
(Loss) Income

Treasury
Stock

Unallocated
Common Stock
Held by ESOP

Total Brookline
Bancorp, Inc.
Stockholders'
Equity

Noncontrolling
Interest in
Subsidiary

Total Stockholders'
Equity
(In Thousands)
Balance at December 31, 2016 $ 757
$ 616,734
$ 136,671
$ (3,818 ) $ (53,837 ) $ (963 ) $ 695,544
$ 7,205
$ 702,749
Net income attributable to Brookline Bancorp, Inc. —
—
43,691
—
—
—
43,691
—
43,691
Net income attributable to noncontrolling interest in subsidiary —
—
—
—
—
—
—
2,122
2,122
Issuance of common stock 60
81,943
—
—
—
—
82,003
—
82,003
Issuance of noncontrolling units —
—
—
—
—
—
—
118
118
Other comprehensive income —
—

1,925
—
—
1,925
—
1,925
Common stock dividends of $0.27 per share —
—
(20,137 ) —
—
—
(20,137 ) —
(20,137 )
Dividend distribution to owners of noncontrolling interest in subsidiary —
—
—
—
—
—
—
(1,671 ) (1,671 )
Compensation under recognition and retention plan —
(1,016 ) —
—
2,385
—
1,369
—
1,369
Common stock held by ESOP committed to be released (25,767 shares) —
227
—
—
—
140
367
—
367
Balance at September 30, 2017 $ 817
$ 697,888
$ 160,225
$ (1,893 ) $ (51,452 ) $ (823 ) $ 804,762
$ 7,774
$ 812,536

Table of Contents

BROOKLINE BANCORP, INC. AND SUBSIDIARIES

Unaudited Consolidated Statements of ~~Changes in Stockholders' Equity (Continued)~~Cash Flows

~~Nine Months Ended September 30, 2017 and 2016~~


	Three Months Ended March 31,
	2023		2022
	(In Thousands)
Cash flows from operating activities:
Net income	$	7,560	$	24,705
Adjustments to reconcile net income to net cash provided from operating activities:

Provision (credit) for credit losses	25,542		(164)


Deferred income tax (benefit) expense	(1,470)		376
Depreciation of premises and equipment	1,967		1,461
Amortization (accretion) of investment securities premiums and discounts, net	(2,473)		646
Amortization of deferred loan and lease origination costs, net	1,063		1,438
Amortization of identified intangible assets	1,966		134
Amortization of debt issuance costs	25		26
Amortization (accretion) of acquisition fair value adjustments, net	(3,176)		(3)
Gain on investment securities, net	(1,701)		—
Gain on sales of loans and leases held-for-sale	(1,638)		(344)



Write-down (recovery) of other repossessed assets	62		(8)
Compensation under recognition and retention plans	814		694
ESOP shares committed to be released	—		111
Net change in:
Cash surrender value of bank-owned life insurance	138		(252)

Other assets	6,787		22,908
Accrued expenses and other liabilities	(17,503)		(35,584)
Net cash provided from operating activities	17,963		16,144

Cash flows from investing activities:
Proceeds from sales of investment securities available-for-sale	224,832		—
Proceeds from maturities, calls, and principal repayments of investment securities available-for-sale	33,064		36,251
Purchases of investment securities available-for-sale	(274,440)		(84,135)


Proceeds from redemption/sales of restricted equity securities	16,198		3,860
Purchase of restricted equity securities	(27,119)		(3,945)
Proceeds from sales of loans and leases held-for-investment, net	128,942		28,093
Net increase in loans and leases	(430,373)		(100,454)
Acquisitions, net of cash and cash equivalents acquired	(80,209)		—


Purchase of premises and equipment, net	(3,774)		(497)
Proceeds from sales of other repossessed assets	89		427

Net cash used for investing activities	(412,790)		(120,400)






			(Continued)

See accompanying notes to unaudited consolidated financial statements.

Table of Contents

Common
Stock

Additional
Paid-in
Capital

Retained
Earnings

Accumulated
Other
Comprehensive
(Loss) Income

Treasury
Stock

Unallocated
Common Stock
Held by ESOP

Total Brookline
Bancorp, Inc.
Stockholders'
Equity

Noncontrolling
Interest in
Subsidiary

Total Stockholders'
Equity
(In Thousands)
Balance at December 31, 2015 $ 757
$ 616,899
$ 109,675
$ (2,476 ) $ (56,208 ) $ (1,162 ) $ 667,485
$ 6,001
$ 673,486
Net income attributable to Brookline Bancorp, Inc. —
—
39,083
—
—
—
39,083
—
39,083
Net income attributable to noncontrolling interest in subsidiary —
—
—
—
—
—
—
2,203
2,203
Issuance of noncontrolling interest —
—
—
—
—
—
—
76
76
Other comprehensive income —
—

7,372
—
—
7,372
—
7,372
Common stock dividends of $0.27 per share —
—
(19,018 ) —
—
—
(19,018 ) —
(19,018 )
Dividend distribution to owners of noncontrolling interest in subsidiary —
—
—
—
—
—
—
(1,734 ) (1,734 )
Compensation under recognition and retention plans —
(1,023 ) —
—
2,057
—
1,034
—
1,034
Common stock held by ESOP committed to be released (27,279 shares) —
266
—
—
—
149
415
—
415
Balance at September 30, 2016 $ 757
$ 616,142
$ 129,740
$ 4,896
$ (54,151 ) $ (1,013 ) $ 696,371
$ 6,546
$ 702,917


	Three Months Ended March 31,
	2023		2022
	(In Thousands)
Cash flows from financing activities:
(Decrease) increase in demand checking, NOW, savings and money market accounts	(383,919)		114,131
Increase (decrease) in certificates of deposit	750,542		(69,659)
Proceeds from FHLB advances	4,266,000		230,000
Repayment of FHLB advances	(4,098,408)		(176,671)



Decrease in other borrowed funds, net	(23,220)		(17,790)
Increase (decrease) in mortgagors' escrow accounts, net	(837)		(516)




Payment of dividends on common stock	(11,970)		(9,705)





Net cash provided from financing activities	498,188		69,790
Net increase (decrease) in cash and cash equivalents	103,361		(34,466)
Cash and cash equivalents at beginning of period	382,959		327,737
Cash and cash equivalents at end of period	$	486,320	$	293,271

Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest on deposits, borrowed funds and subordinated debt	$	43,785	$	6,331
Income taxes	2,511		2,221
Non-cash investing activities:

Transfer from loans to other repossessed assets	$	251	$	691
Acquisition of PCSB Financial Corporation:
Fair value of assets acquired, net of cash and cash equivalents acquired	$	1,931,528	$	—
Fair value of liabilities assumed	1,676,110		—
Common stock issued	118

See accompanying notes to unaudited consolidated financial statements.

BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Unaudited Consolidated Statements of Cash Flows
Nine Months Ended September 30,
2017 2016
(In Thousands)
Cash flows from operating activities:
Net income attributable to Brookline Bancorp, Inc. $ 43,691
$ 39,083
Adjustments to reconcile net income to net cash provided from operating activities:
Net income attributable to noncontrolling interest in subsidiary 2,122
2,203
Provision for credit losses 17,186
7,138
Origination of loans and leases held-for-sale (20,231 ) (35,568 )
Proceeds from sales of loans and leases held-for-sale, net 23,852
37,516
Deferred income tax benefit (3,923 ) (191 )
Depreciation of premises and equipment 5,446
5,320
Amortization of investment securities premiums and discounts, net 1,320
1,787
Amortization of deferred loan and lease origination costs, net 4,909
4,438
Amortization of identified intangible assets 1,570
1,879
Amortization of debt issuance costs 75
56
Accretion of acquisition fair value adjustments, net (1,467 ) (3,105 )
Gain on sales of investment securities, net (11,393 ) —
Gain on sales of loans and leases held-for-sale (1,709 ) (1,986 )
Gain on sales of OREO and other repossessed assets, net (79 ) (84 )
Write-down of OREO and other repossessed assets 430
51
Compensation under recognition and retention plans 1,720
1,250
ESOP shares committed to be released 367
415
Net change in:
Cash surrender value of bank-owned life insurance (780 ) (782 )
Other assets (6,117 ) (20,493 )
Accrued expenses and other liabilities 1,301
8,661
Net cash provided from operating activities 58,290
47,588

Cash flows from investing activities:
Proceeds from maturities, calls, and principal repayments of investment securities available-for-sale 54,966
76,207
Purchases of investment securities available-for-sale (52,448 ) (77,275 )
Proceeds from maturities, calls, and principal repayments of investment securities held to maturity 3,154
41,381
Purchases of investment securities held-to-maturity (23,884 ) (25,045 )
Proceeds from redemption/sales of restricted equity securities 18,111
2,817
Purchase of restricted equity securities (4,342 ) (2,383 )
Proceeds from sales of loans and leases held-for-investment, net 25,445
23,116
Net increase in loans and leases (273,700 ) (377,638 )
Purchase of premises and equipment, net (10,604 ) (2,747 )
Proceeds from sales of OREO and other repossessed assets 2,873
2,647
Net cash used for investing activities (260,429 ) (338,920 )

(Continued)

BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Unaudited Consolidated Statements of Cash Flows (Continued)
Nine Months Ended September 30,
2017 2016
(In Thousands)
Cash flows from financing activities:
Increase in demand checking, NOW, savings and money market accounts 68,300
240,714
Increase in certificates of deposit 126,307
18,247
Proceeds from FHLBB advances 3,158,111
5,137,549
Repayment of FHLBB advances (3,195,278 ) (5,096,506 )
(Decrease) increase in other borrowed funds, net (20,120 ) 412
Increase in mortgagors' escrow accounts, net 506
650
Proceeds from issuance of common stock 82,003
—
Payment of dividends on common stock (20,137 ) (19,018 )
Payment of income taxes for shares withheld in share based activity (294 ) —
Proceeds from issuance of noncontrolling units 118
76
Payment of dividends to owners of noncontrolling interest in subsidiary (1,671 ) (1,734 )
Net cash provided from financing activities 197,845
280,390
Net decrease in cash and cash equivalents (4,294 ) (10,942 )
Cash and cash equivalents at beginning of period 67,657
75,489
Cash and cash equivalents at end of period $ 63,363
$ 64,547

Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest on deposits, borrowed funds and subordinated debt $ 31,411
$ 30,005
Income taxes 26,141
22,949
Non-cash investing activities:
Transfer from loans and leases held-for-sale to loans and leases $ 7,500
$ 8,284
Transfer from loans to other real estate owned 6,223
2,423

Table of Contents

BROOKLINE BANCORP, INC. AND SUBSIDIARIES

Notes to Unaudited Consolidated Financial Statements

~~At and for the Nine Months Ended September 30, 2017 and 2016~~

(1) Basis of Presentation

Overview

Brookline Bancorp, Inc. (the "Company") is a bank holding company (within the meaning of the Bank Holding Company Act of 1956, as amended) and the parent of Brookline Bank, a Massachusetts-chartered ~~savings bank;~~trust company; Bank Rhode Island ("BankRI"), a Rhode Island-chartered financial institution; and ~~First Ipswich~~PCSB Bank, ~~("First Ipswich"),~~ a ~~Massachusetts-chartered trust company~~New York-chartered commercial bank (collectively referred to as the "Banks"). The Banks are ~~all~~ members of the Federal Reserve System. The Company is also the parent of Brookline Securities Corp. ("BSC") and Clarendon Private, LLC ("Clarendon Private"). The Company's primary business is to provide commercial, business and retail banking services to its corporate, municipal and retail customers through the Banks and its non-bank subsidiaries.

Brookline Bank, which includes its wholly-owned subsidiaries, ~~BBS Investment Corp.,~~ Longwood Securities Corp. ~~and its 84.2%-owned subsidiary,~~("LSC"), Eastern Funding LLC ("Eastern Funding"), and First Ipswich Insurance Agency, operates 2529 full-service banking offices in the greater Boston metropolitan ~~area.~~area with two additional lending offices. BankRI, which includes its wholly-owned subsidiaries, Acorn Insurance Agency, BRI Realty Corp.~~, Macrolease Corporation ("Macrolease")~~, BRI Investment Corp. and its wholly-owned subsidiary, BRI MSC Corp., operates 20 full-service banking offices in the greater Providence, Rhode Island area. ~~First Ipswich,~~Macrolease Corporation, previously a subsidiary of BankRI, was merged into Eastern Funding LLC in the second quarter of 2022. PCSB Bank, which includes its wholly-owned ~~subsidiaries, First Ipswich Insurance Agency and First Ipswich Securities II~~subsidiary, UpCounty Realty Corp., operates ~~six~~15 full-service banking offices onin the ~~north shore~~Lower Hudson Valley of ~~eastern Massachusetts.~~New York. Clarendon Private is a registered investment advisor with the Securities and Exchange Commission ("SEC"). Through Clarendon Private, the Company offers a wide range of wealth management services to individuals, families, endowments and foundations to help these clients meet their long-term financial goals.

The ~~Company's~~Banks' activities include acceptance of commercial, municipal and retail deposits, origination of mortgage loans on commercial and residential real estate located principally in ~~Massachusetts~~Central New England and ~~Rhode Island,~~the Lower Hudson Valley of New York State, origination of commercial loans and leases to small- and mid-sized businesses, investment in debt and equity securities, and the offering of cash management and investment advisory services. The Company also provides specialty equipment financing through ~~its subsidiaries~~it subsidiary Eastern Funding, which ~~is based~~operates in New York City, New York, and ~~Macrolease, which is based in~~ Plainview, New York.

The Company and the Banks are supervised, examined and regulated by the Board of Governors of the Federal Reserve System ~~("FRB"~~(the "FRB"). As a Massachusetts-chartered ~~savings bank and~~ trust ~~companies,~~company, Brookline Bank ~~and First Ipswich, respectively, are~~is also subject to regulation under the laws of the Commonwealth of Massachusetts and the jurisdiction of the Massachusetts Division of ~~Banks.~~Banks (the "MDOB"). As a Rhode Island-chartered financial institution, BankRI is subject to regulation under the laws of the State of Rhode Island and the jurisdiction of the Banking Division of the Rhode Island Department of Business ~~Regulation.~~Regulation (the "RIBD"). As a New York- chartered commercial bank, PCSB Bank is subject to regulation and supervision by the New York State Department of Financial Services ("NYDFS").

The Federal Deposit Insurance Corporation ("FDIC") offers insurance coverage on all deposits up to $250,000 per depositor at each of the Banks. As FDIC-insured depository institutions, the Banks are also ~~secondarily~~ subject to supervision, examination and regulation by the FDIC. ~~Additionally, as~~As previously disclosed, on July 31, 2019, Brookline Bank converted to a Massachusetts-chartered ~~savings bank, Brookline Bank is also insured by~~trust company and ended its membership in the Depositors Insurance Fund ~~("DIF"~~(the “DIF”), a private industry-sponsored fund which insures Massachusetts-chartered bank deposit balances in excess of federal deposit insurance ~~company. The~~coverage. Brookline Bank’s growth in deposit size necessitated its withdrawal from the DIF ~~insures savings bank~~and the concurrent charter conversion. Term deposits in excess of the FDIC insurance ~~limits. As such, Brookline Bank offers 100% insurance on all deposits~~coverage as ~~a result~~ of ~~a combination of insurance from~~July 31, 2019 will continue to be insured by the ~~FDIC and~~DIF until they reach maturity. Clarendon Private is also subject to regulation by the ~~DIF. Brookline Bank is required to file reports with the DIF.~~SEC.

Basis of Financial Statement Presentation

The unaudited consolidated financial statements of the Company presented herein have been prepared pursuant to the rules of the ~~Securities and Exchange Commission (“SEC”)~~SEC for quarterly reports on Form 10-Q and do not include all of the information and note disclosures required by U.S. generally accepted accounting principles (“GAAP”). In the opinion of ~~Management,~~management, all adjustments (consisting of normal recurring adjustments) and disclosures considered necessary for the fair presentation of the accompanying consolidated financial statements have been included. Interim results are not necessarily reflective of the results of the entire year. The accompanying unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Annual Report on Form 10-K for the fiscal year ended December 31, ~~2016.~~2022.

Table of Contents

BROOKLINE BANCORP, INC. AND SUBSIDIARIES

Notes to Unaudited Consolidated Financial Statements (Continued)

The unaudited consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany transactions and balances are eliminated in consolidation.

~~Table of Contents~~

~~BROOKLINE BANCORP, INC. AND SUBSIDIARIES~~

~~Notes to Unaudited Consolidated Financial Statements (Continued)~~

~~At and for the Nine Months Ended September 30, 2017 and 2016~~

In preparing these consolidated financial statements, ~~Management~~management is required to make significant estimates and assumptions that affect the reported amounts of assets, liabilities, income, expenses and disclosure of contingent assets and liabilities. Actual results could differ from those estimates based upon changing conditions, including economic conditions and future events. Material estimates that are particularly susceptible to significant ~~change~~changes in the near-term include the determination of the allowance for ~~loan and lease~~credit losses, the determination of fair market values of acquired assets and liabilities, including acquired loans, ~~and leases,~~ the review of goodwill and ~~intangibles~~intangible assets for impairment and the review of deferred tax assets for valuation allowances.

The judgments used by ~~Management~~management in applying these critical accounting policies may be affected by a further and prolonged deterioration in the economic environment, which may result in changes to future financial results. For example, subsequent evaluations of the loan and lease portfolio, in light of the factors then prevailing, may result in significant changes in the allowance for loan and lease losses in future periods, and the inability to collect outstanding principal may result in increased loan and lease losses.

Reclassification

Certain previously reported amounts have been reclassified to conform to the current year's presentation.

Recent Accounting Pronouncements

In ~~May 2017,~~March 2020, the FASB issued ASU ~~2017-09, Compensation-Stock Compensation~~2020-04, "Reference Rate Reform (Topic ~~718): Scope~~848)-Facilitation of ~~Modification Accounting.~~the Effects of Reference Rate Reform on Financial Reporting" ("ASU 2020-04") to provide optional expedients and exceptions for applying GAAP to certain contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments in this update apply only to contracts, hedging relationships, and other transactions that reference the London Interbank Offered Rate ("LIBOR") or another reference rate expected to be discontinued because of reference rate reform. The expedients and exceptions provided by the amendments do not apply to contract modifications made and hedging relationships existing as of December 31, 2022, for which an entity has elected certain optional expedients provided that those elections are retained through the end of the hedging relationship. The amendments in this update are effective for all entities as of March 12, 2020 through December 31, 2022 and do not apply to contract modifications made after December 31, 2022.

In January 2021, FASB issued ~~this Update~~ASU 2021-01, "Reference Rate Reform (Topic 848)" an update to address concerns around structural risk of interbank offered rates ("IBORs"), particularly, the ~~diversity~~risk of cessation of the LIBOR. The amendments in ~~practice as well as the cost~~this update clarify that certain optional expedients and ~~complexity when applying the guidance~~exceptions in Topic ~~718, Compensation - Stock Compensation,~~848 for contract modifications and hedge accounting apply to derivatives that are affected by the discounting transition. In December 2022, FASB issued ASU 2022-06, "Reference Rate Reform (Topic 848)" which deferred the sunset date of Topic 848 to December 31, 2024, to allow for a ~~change to~~transition period after the ~~terms or conditions~~sunset of a share-based payment award. For public entities, this ASU is effective for annual reporting periods beginning after December 15, 2017. Management has evaluated this ASU and has determined that ASU 2017-09 does apply. As of September 30, 2017, theLIBOR. The Company has adopted the amendments in these updates and established a LIBOR transition committee to guide the Company’s transition from LIBOR. The Company has completed much of the work to transition off the LIBOR index consistent with industry timelines. The working group has identified its products that utilize LIBOR and has implemented fallback language to facilitate the transition to alternative rates. The Company has also evaluated its infrastructure and identified fallback rates as well as started offering alternative indices and new products tied to these alternative indices. The Company does not anticipate the adoption of these standards to have a material impact to the consolidated financial statements.

In March 2022, the FASB issued ASU 2022-02, "Financial Instruments - Credit Losses (Topic 326), Troubled Debt Restructurings and Vintage Disclosures" which addresses concerns regarding the complex accounting for loans modified as troubled debt restructurings (“TDRs”) and also the disclosure of gross writeoff information included in required vintage disclosures. The Company adopted ASU 2022-02 as of January 1, 2023. The enhanced disclosure requirements provided for by ASU 2022-02 were adopted on a prospective basis. Reporting periods prior to the adoption of ASU 2022-02 are presented in accordance with the applicable GAAP. The adoption did not have a material impact on the Company’s consolidated financial statements.

In March 2017, the FASB issued Accounting Standards Update ASU 2017-07, Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost (Topic 715). This ASU was issued primarily to improve the presentation of net periodic pension cost and net periodic postretirement benefit cost. This ASU is effective for annual reporting periods beginning after December 15, 2017. Management believes that this ASU applies and has determined the impact to be immaterial as of September 30, 2017. Management will meet to discuss and will put together a project team to assess steps to adoption prior to implementation of the standard in 2018.

In February 2017, the FASB issued ASU 2017-05, Other Income Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20). This ASU was issued to clarify the scope of Subtopic 610-20, and to add guidance for partial sales of nonfinancial assets. For public entities, this ASU is effective for annual reporting periods beginning after December 15, 2017. Management believes that this ASU applies and has determined the impact to be immaterial as of September 30, 2017.

In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other (Topic 350). This ASU was issued to simplify the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test. For public entities, this ASU is effective for the fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted and application should be on a prospective basis. Management has evaluated this ASU and has determined that ASU 2017-04 does apply. As of September 30, 2017, the Company has adopted the ASU and determined the impact to be immaterial.

In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230). This ASU was issued to provide clarification and uniformity on the presentation and classification of certain cash receipts and cash payments in the statement of cash flows under Topic 230. The amendments presented in this ASU are effective for fiscal years beginning after December 15, 2017. As of September 30, 2017, management believes that ASU 2016-15 does apply, and after completing an internal analysis has determined the impact of adoption of this ASU in 2018 to the financial statement presentation to be immaterial.

In June 2016, the FASB issued ASU 2016-13, Financial instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The intent of this ASU is to replace the current GAAP method of calculating credit losses. Current GAAP uses a higher threshold at which likely losses Additional details can be ~~calculated and recorded. The new process will require institutions to account~~found in Note 5, "Allowance for ~~likely losses that originally would not have been part of the calculation. The calculation will~~

Credit Losses".

Table of Contents

BROOKLINE BANCORP, INC. AND SUBSIDIARIES

Notes to Unaudited Consolidated Financial Statements (Continued)

At(2) Acquisitions

PCSB Financial Corporation

On January 1, 2023, the Company completed its previously announced acquisition (the “merger”) of PCSB Financial Corporation (“PCSB”). Pursuant to the merger agreement, each share of PCSB common stock outstanding at the effective time of the merger was converted into the right to receive, at the holder’s election, either $22.00 in cash consideration or 1.3284 shares of Company common stock for each share of PCSB common stock, subject to allocation procedures to ensure that 60% of the outstanding shares of PCSB common stock was converted to Company common stock. PCSB’s bank subsidiary, PCSB Bank, operates as a separate subsidiary of the Company and has 15 banking offices throughout the Lower Hudson Valley of New York State.

The transaction was accounted for as a business combination. Accordingly, the ~~Nine Months Ended September 30, 2017~~purchase price was allocated to the assets acquired and ~~2016~~

incorporate future forecasting in addition to historical and current measures. For public entities that file with the SEC, this ASU is effective for the fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. This ASU must be applied prospectively to debt securities marked as other than temporarily impaired. A retrospective approach will be applied cumulatively to retained earnings. Early adoption is permittedliabilities assumed based on their fair values as of the ~~fiscal years beginning after December 15, 2018. Management has determined~~merger effective date. The determination of fair value required management to make estimates about discount rates, future expected cash flows, market conditions, and other future events that ~~ASU 2016-13 does apply, but has not determined~~are highly subjective in nature and are subject to change. Fair value estimates of the ~~impact,~~assets acquired and liabilities assumed may be adjusted for a period up to one year (the measurement period) from the closing date of the merger if ~~any,~~new information is obtained about facts and circumstances that existed as of ~~September 30, 2017. In preparation for~~ the ~~adoption in 2019~~merger effective date that, if known, would have affected the measurement of ~~this ASU, management formed a steering committee which has developed an approach for implementation~~the amounts recognized as of that date.

During the three months ended March 31, 2023, the Company incurred merger-related expenses totaling $6.4 million.

The following table summarizes the preliminary purchase price allocation to the estimated fair value of the assets acquired and ~~has selected a third party software service provider.~~liabilities assumed as of the date of the acquisition:


	Net Assets Acquired at Fair Value
	(In Thousands)
Purchase price consideration	$	297,791
ASSETS
Cash	42,373
Investments	366,790
Loans	1,336,737
Allowance for credit losses on PCD loans	(2,344)
Premises and equipment	14,631
Core deposit and other intangibles	30,265
Other assets	104,654
Total assets acquired	$	1,893,106
LIABILITIES
Deposits	$	1,570,563
Borrowings	52,923
Other liabilities	52,624
Total liabilities assumed	$	1,676,110
Net assets acquired	216,996
Goodwill	$	80,795

In ~~May 2016,~~connection with the ~~FASB issued ASU 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients. The intention~~merger, Brookline Bancorp, Inc. recorded $80.8 million of ~~this ASU is to provide additional clarification on specific issues brought forth by~~goodwill, which represents the FASB and the International Accounting Standards Board Joint Transition Resource Group for Revenue Recognition in relation to Topic 606 and revenue recognition. This ASU is to have the same effective date as ASU 2015-14 which deferred the effective date of ASU 2014-09 to December 15, 2017. Management has determined that ASU 2016-12 does apply as of September 30, 2017. Management assembled a project team to address the changes pursuant to Topic 606 and the majorityexcess of the ~~work was performed on the contracts and management believes there will be no material impact. The standard will be effective on January 1, 2018.~~

In March 2016, the FASB issued ASU 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. This ASU was issued as part of the FASB Simplification Initiative which intends to reduce the complexity of GAAP while improving usefulness to users. The ASU was effective for annual periods beginning after December 15, 2016, and interim periods within those annual reporting periods with early adoption available. The Company adopted ASU 2016-09 effective January 1, 2017 and the adoption did not have a material impact on the Company’s consolidated financial statements.

In March 2016, the FASB issued ASU 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net). This ASU was issued to clarify how to recognize revenue depending on an entities position, in relation to another entity involved, on contracts with customers. The entity can either be a principal party or an agent, and must record revenue accordingly. This ASU is not yet effective. Since this ASU affects ASU 2014-09, and that effective date was deferred, this ASU remains suspended too. Management has determined that this ASU does apply as of September 30, 2017. Management assembled a project team to address the changes pursuant to Topic 606 and the majority of the work was performed on the contracts. The project is substantially complete and Management believes that there is no material impact as a result of the adoption. The standard will be effective on January 1, 2018.

In February 2016, FASB issued ASU 2016-02, Leases. This ASU requires lessees to put most leases on their balance sheet but recognize expenses on their income statements in a manner similar to current accounting. This ASU also eliminates current real estate-specific provisions for all companies. For lessors, this ASU modifies the classification criteria and the accounting for sales-type and direct financing leases. This ASU is effective for fiscal years beginning after December 15, 2018, including interim periods therein. Early adoption is permitted. Management believes that this ASU applies and has not determined the impact, if any, as of September 30, 2017. Management has met to discuss the impact and will assemble a project team to assess steps required for adoption prior to implementation of the standard in 2019.

In January 2016, the FASB issued ASU 2016-01, Financial Instruments. This ASU significantly revises an entity’s accounting related to (1) the classification and measurement of investments in equity securities and (2) the presentation of certain fair value changes for financial liabilities measured at fair value. It also amends certain disclosure requirements associated withpurchase price over the fair value of financial instruments. This ASU is effective for fiscal years beginning after December 15, 2017, including interim periods therein. Management has determined that this ASU does apply and has not determined the impact, if any, as of September 30, 2017. Management has put together a steering committee which has made progress identifying the additional data requirements necessary to implement the ASU and has determined an approach for implementation which includes the selection of a third party software service provider. A project team will be formed to ensure the availabilitynet assets acquired.

Fair values of the ~~elements needed for exit price disclosure prior to implementation~~major categories of assets acquired and liabilities assumed were determined as follows:

Cash and Cash Equivalents

The fair values of cash and cash equivalents approximate the ~~standard in 2018.~~

~~In August 2015,~~respective carrying amounts because the FASB issued ASU 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date. This ASU was issued to defer the effective date of ASU 2014-09 for all entities by one year. In effect, public business entities, certain not-for-profit entities, and certain employee benefit plans should apply the guidance in ASU 2014-09 to annual reporting periods (including interim reporting periods within those period) beginning after December 15, 2017. Management has determined that this ASU does apply as of September 30, 2017. A significant amount of the Company's revenuesinstruments are ~~derived from interest income~~payable on ~~financial assets, which are excluded from the scope of the amended guidance.~~

demand or have short-term maturities.

Table of Contents

BROOKLINE BANCORP, INC. AND SUBSIDIARIES

Notes to Unaudited Consolidated Financial Statements (Continued)

~~At and~~Investments

The fair values for investment securities available-for-sale were based on quoted market prices, where available. If quoted market prices were not available, fair value estimates are based on observable inputs, including quoted market prices for similar instruments. Investment securities held-to-maturity were reclassified to investment securities available-for-sale based on the ~~Nine Months Ended September 30, 2017 and 2016~~

Company's intent at closing.

~~Management assembled a project team to address~~During the ~~changes pursuant to Topic 606 and the project team has completed the scope assessment and contract review for in-scope revenue streams. To date,~~quarter, the Company ~~has not identified any significant changes in~~restructured the timing of revenue recognition when considering the amended accounting guidance; however, the Company's implementation efforts are ongoing and such assessments may change prior to the implementation date of January 1, 2018.

~~(2) Acquisitions~~

~~First Commons Bank, N.A.~~

On September 20, 2017, the Company and First Commons Bank, N.A. (“First Commons Bank”) entered into a definitive agreement and plan of merger (the “Merger Agreement”) pursuant to which First Commons Bank will merge with and into Brookline Bank.investment portfolio acquired from PCSB. The Company ~~expects~~sold approximately 75% of the portfolio which equates to ~~consummate~~$223 million of book value predominantly longer dated Agency MBS, Agency CMOs, Corporate and Municipal securities. The average duration of these securities was 6.2 years with an average risk weighting of assets of 31%. The Company recognized a $1.7 million gain from selling these securities.

Proceeds from the ~~transaction during~~sale and additional cash on hand was used to purchase $274.4 million of short duration securities, the ~~first quarter~~majority of ~~2018, subject to approval by First Commons Bank shareholders,~~which are US Treasuries, Agency MBS, and a small position of short term Municipal Bond Anticipation Notes. Additional details can be found in Note 3, "Investment Securities".

The average duration of these securities is 2.2 years with an average risk weighting of assets of 4%.

Loans

The fair value of the ~~receipt of all required regulatory approvals,~~loan portfolio was calculated on an individual loan basis using discounted cash flow analysis, with results presented and assumptions applied on a summary basis. This analysis took into consideration the ~~satisfaction of customary closing conditions.~~

~~Under the~~contractual terms of the ~~Merger Agreement,~~loans and assumptions related to the ~~Company will pay $16.70 per share~~cost of debt, cost of equity, servicing cost and other liquidity/risk premium considerations to estimate the projected cash flows. The loss rates for the ~~outstanding shares~~loans were estimated using Probability of Default (cumulative) and ~~warrants and $2.9 million~~Loss Given Default assumptions. The assumptions used in ~~cash for~~determining the ~~outstanding options of First Commons Bank representing a total transaction~~fair value of ~~approximately $56.0 million. First Commons Bank stockholders will receive 1.171 shares of~~ the Company's common stock for each First Commons Bank share they own, subject to adjustment based on Company's ten-day, volume-weighted average stock price between $13.19 and $15.33. The Company has the option to pay up to 50% of the consideration for the outstanding shares in cash.

~~First Commons Bank is~~loan portfolio were considered reasonable from a national banking association which was organized in 2009 and is headquartered in Newton Centre, a village of Newton, Massachusetts. First Commons Bank operates its business from two banking offices located in Massachusetts. First Commons Bank is engaged principally in the business of attracting deposits from the general public and investing those deposits in residential and commercial real estate loans, and in consumer and small business loans.

At September 30, 2017, First Commons Bank had total consolidated assets of approximately $311.4 million, loans of approximately $259.7 million, deposits of approximately $267.5 million and stockholders’ equity of approximately $35.6 million.market-participant viewpoint.

The Company recorded ~~$205.0~~a $49.8 million discount from the results of the loan accounting valuation.

Deposits - Core Deposit Intangible ("CDI")

Accounts included in the CDI include demand deposits, NOW accounts, money market accounts and savings accounts. The fair value of the CDI was derived from using a financial institution-specific income approach. Factors examined in the valuation of the CDI intangible include customer attrition, deposit interest rates, service charge income, overhead expense, and costs of alternative funding.

The Company recorded a $30.3 million CDI from the results of the deposit valuation. There was $1.9 million of amortization recorded during the three months ended March 31, 2023. The CDI is being amortized at an accelerated rate over 7 years using the sum-of-the-years method.

Certificates of Deposits

The certificates of deposits were recorded at fair value. The determination of the fair value was calculated using discounted cash flow analysis, which involved present valuing the contractual payments over the remaining life of the certificate of deposit at market based-rates.

The Company recorded a $3.2 million discount from the results of the certificate of deposit valuation. There was $186 thousand of ~~merger and acquisition expense in connection with the proposed acquisition of First Commons Bank for~~accretion recorded during the three ~~and nine~~ months ended ~~September~~March 31, 2023.

Borrowings

The fair value of the FHLB advances were ascertained by using discounted cash flow analysis of the contractual payments over the remaining life of the advances at market-based interest rates. The FHLB advances were disaggregated on an individual advance basis and Management used FHLB of New York rates as of December 30, ~~2017.~~2022 as the market rate in the present value calculation.

The Company recorded a $0.3 million discount on the assumed FHLB advances.

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BROOKLINE BANCORP, INC. AND SUBSIDIARIES

Notes to Unaudited Consolidated Financial Statements (Continued)

AtPCD Loans and ~~for~~Leases

Purchased loans and leases that have experienced more-than-insignificant deterioration in credit quality since origination are considered PCD. For PCD loans and leases, the ~~Nine Months Ended September 30, 2017~~initial estimate of expected credit losses was established through an adjustment to the unpaid principal balance and ~~2016~~

~~(3) Investment Securities~~non-credit discount at acquisition.

The following ~~tables set forth investment securities available-for-sale and held-to-maturity at~~table reconciles the ~~dates indicated:~~

At September 30, 2017

Amortized
Cost

Gross
Unrealized
Gains

Gross
Unrealized
Losses

Estimated
Fair Value
(In Thousands)
Investment securities available-for-sale:
GSE debentures $ 139,443
$ 481
$ 580
$ 139,344
GSE CMOs 138,137
34
2,891
135,280
GSE MBSs 182,913
590
1,385
182,118
SBA commercial loan asset-backed securities 77
—
—
77
Corporate debt obligations 58,638
336
83
58,891
U.S. Treasury bonds 4,822
—
11
4,811
Trust preferred securities 1,471
—
68
1,403
Marketable equity securities 975
16
5
986
Total investment securities available-for-sale $ 526,476
$ 1,457
$ 5,023
$ 522,910
Investment securities held-to-maturity:
GSE debentures $ 38,622
$ 11
$ 561
$ 38,072
GSEs MBSs 14,788
—
145
14,643
Municipal obligations 53,828
370
185
54,013
Foreign government obligations 500
—
8
492
Total investment securities held-to-maturity $ 107,738

$ 381

$ 899

$ 107,220

December 31, 2016

Amortized
Cost

Gross
Unrealized
Gains

Gross
Unrealized
Losses

Estimated
Fair Value
(In Thousands)
Investment securities available-for-sale:
GSE debentures $ 98,122
$ 188
$ 1,290
$ 97,020
GSE CMOs 161,483
37
3,480
158,040
GSE MBSs 214,946
794
2,825
212,915
SBA commercial loan asset-backed securities 107
—
—
107
Corporate debt obligations 48,308
360
183
48,485
U.S. Treasury bonds 4,801
—
64
4,737
Trust preferred securities 1,469
—
111
1,358
Marketable equity securities 966
15
9
972
Total investment securities available-for-sale $ 530,202
$ 1,394
$ 7,962
$ 523,634
Investment securities held-to-maturity:
GSE debentures $ 14,735
$ —
$ 634
$ 14,101
GSEs MBSs 17,666
—
187
17,479
Municipal obligations 54,219
5
1,020
53,204
Foreign government obligations 500
—
13
487
Total investment securities held-to-maturity $ 87,120
$ 5
$ 1,854
$ 85,271

~~As of September 30, 2017,~~unpaid principal balance to the fair value of ~~all~~PCD loans and leases:


(In Thousands)
Total Unpaid principal balance	$	16,824
Allowance for credit losses at acquisition	(2,344)
Non-credit discount	(974)
Fair value	$	13,506

Supplemental Pro Forma Financial Information

The following table summarizes supplemental pro forma financial information giving effect to the merger as if it had been completed on January 1, 2022:


	Three Months Ended March 31,
	2023	2022
	(In Thousands)
Net interest income	86,049	82,240
Non-interest income	11,236	6,452
Net income	24,806	9,188

The supplemental pro forma financial information does not necessarily reflect the results of operations that would have occurred had Brookline Bancorp, Inc. merged with PCSB on January 1, 2022. The supplemental pro forma financial information includes the impact of (i) accreting and amortizing the discounts and premiums associated with the estimated fair value adjustments to acquired loans and leases, investment securities, ~~available-for-sale~~deposits, and borrowings, (ii) the amortization of recognized intangible assets, (iii) accreting and amortizing the discounts and premiums associated with acquired premises and leases, and (iv) the related estimated income tax effects. Costs savings and other business synergies related to the merger are not included in the supplemental pro forma financial information.

In addition, the supplemental pro forma financial information was ~~$522.9~~adjusted to include the $6.4 million ~~with~~of merger-related expenses recognized during three months ended March 31, 2023, as summarized in the following table:



(In Thousands)
Compensation and benefits (1)	$	1,221
Technology and equipment (2)	1,828
Professional and outside services (3)	3,199
Other expense (4)	162
Total merger-related expenses	$	6,410

______________________________________________________________________

(1) Comprised primarily of severance and employee retention costs.

(2) Comprised primarily of technology contract termination fees.

(3) Comprised primarily of advisory, legal, accounting, and other professional fees.

(4) Comprised primarily of costs of travel and other miscellaneous expenses.

Brookline Bancorp, Inc.’s operating results for the three months ended March 31, 2023 includes the operating results of acquired assets and assumed liabilities of PCSB subsequent to the merger on January 1, 2023. The amount of interest income, non-interest income and net ~~unrealized losses~~loss of ~~$3.6~~$15.1 million, ~~compared to a fair value of $523.6~~$2.8 million and ~~net unrealized losses~~($8.2) million, respectively, attributable to the acquisition of ~~$6.6 million as~~PCSB were included in Brookline Bancorp, Inc.’s Consolidated Statement of ~~December~~Income for the three months ended March 31, ~~2016. As of September 30, 2017, $377.4 million, or 72.2% of the portfolio, had gross unrealized losses of $5.0~~

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BROOKLINE BANCORP, INC. AND SUBSIDIARIES

Notes to Unaudited Consolidated Financial Statements (Continued)

At2023. PCSB’s interest income, non-interest income and ~~for~~net loss noted above reflect management’s best estimates, based on information available at the ~~Nine Months Ended September 30, 2017 and 2016~~

reporting date.

(3) Investment Securities

The following tables set forth investment securities available-for-sale at the dates indicated:


	At March 31, 2023
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
	(In Thousands)
Investment securities available-for-sale:
GSE debentures	$	198,454	$	292	$	21,524	$	177,222
GSE CMOs	69,766		119		2,201		67,684
GSE MBSs	206,416		84		17,707		188,793



Municipal obligations	23,282		145		115		23,312
Corporate debt obligations	37,661		93		458		37,296
U.S. Treasury bonds	598,023		1,175		26,948		572,250
Foreign government obligations	500		—		25		475


Total investment securities available-for-sale	$	1,134,102	$	1,908	$	68,978	$	1,067,032


	December 31, 2022
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
	(In Thousands)
Investment securities available-for-sale:
GSE debentures	$	176,751	$	—	$	24,329	$	152,422
GSE CMOs	19,977		—		1,757		18,220
GSE MBSs	159,824		1		19,249		140,576




Corporate debt obligations	14,076		—		312		13,764
U.S. Treasury bonds	362,850		280		31,823		331,307

Foreign government obligations	500		—		23		477

Total investment securities available-for-sale	$	733,978	$	281	$	77,493	$	656,766

As of March 31, 2023, the fair value of all investment securities available-for-sale was $1.1 billion, with net unrealized losses of $67.1 million, compared to ~~$389.0~~a fair value of $656.8 million and net unrealized losses of $77.2 million as of December 31, 2022. As of March 31, 2023, $763.4 million, or ~~74.3%~~72.6% of the portfolio, had gross unrealized losses of $69.0 million, compared to $630.5 million, or 96.0% of the portfolio, with gross unrealized losses of ~~$8.0~~$77.5 million as of December 31, ~~2016.~~2022.

As of ~~September 30, 2017,~~March 31, 2023, the ~~fair value of~~Company held no securities as held to maturity; all ~~investment~~ securities ~~held-to-maturity was $107.2 million, with net unrealized losses of $0.5 million, compared to a fair value of $85.3 million with net unrealized losses of $1.8 million~~were held as of December 31, 2016. As of September 30, 2017, $61.2 million, or 57.1% of the portfolio, had gross unrealized losses of $0.9 million. There were $82.0 million, or 96.1% of the portfolio, with net unrealized losses $1.9 million as of December 31, 2016.available-for-sale.

Investment Securities as Collateral

As of ~~September 30, 2017~~March 31, 2023 and December 31, ~~2016,~~2022, respectively, ~~$424.1~~$626.1 million and ~~$429.1~~$387.9 million of investment securities were pledged as collateral for repurchase agreements; municipal deposits; treasury, tax and loan deposits; swap agreements; FRB borrowings; and ~~FHLBB~~Federal Home Loan Bank of Boston and New York ("FHLB") borrowings. The Banks ~~did not have any~~had no outstanding FRB borrowings as of ~~September 30, 2017~~March 31, 2023 and December 31, ~~2016.~~

2022.

Table of Contents

BROOKLINE BANCORP, INC. AND SUBSIDIARIES

Notes to Unaudited Consolidated Financial Statements (Continued)

AtAllowance for Credit Losses-Available-for-Sale Securities

For available-for-sale securities in an unrealized loss position, management first assesses whether (i) the Company intends to sell the security, or (ii) it is more likely than not that the Company will be required to sell the security before recovery of its amortized cost basis. If either criterion is met, any previously recognized allowances are charged-off and the security's amortized cost is written down to fair value through income. If neither criterion is met, the security is evaluated to determine whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, management considers the extent to which fair value is less than amortized cost, any changes to the rating of the security by a rating agency and any adverse conditions specifically related to the security, among other factors.

If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the security is compared to the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis, an allowance for credit loss is recorded, limited by the amount that the fair value is less than the amortized cost basis. Any impairment that has not been recorded through the Allowance for Credit Losses ("ACL") is recognized in other comprehensive income. Adjustments to the allowance are reported as a component of credit loss expense. Available-for-sale securities are charged-off against the allowance or, in the absence of any allowance, written down through income when deemed uncollectible or when either of the aforementioned criteria regarding intent or requirement to sell is met. The Company has made the accounting policy election to exclude accrued interest receivable on available-for-sale securities from the estimate of credit losses. Accrued interest receivables associated with debt securities available-for-sale totaled $4.2 million as of March 31, 2023 compared $2.6 million to as of December 31, 2022.

A debt security is placed on nonaccrual status at the time any principal or interest payments become more than 90 days delinquent or if full collection of interest or principal becomes uncertain. Accrued interest for a debt security placed on nonaccrual is reversed against interest income. There were no debt securities on nonaccrual status and therefore there was no accrued interest related to debt securities reversed against interest income for the ~~Nine Months Ended September 30, 2017~~three months ended March 31, 2023 and ~~2016~~

2022.

Assessment for Available for Sale Securities for Impairment

~~Other-Than-Temporary Impairment ("OTTI")~~

Investment securities as of ~~September 30, 2017~~March 31, 2023 and December 31, ~~2016~~2022 that have been in a continuous unrealized loss position for less than twelve months or twelve months or longer are as follows:


	At September 30, 2017													At March 31, 2023
	Less than Twelve Months				Twelve Months or Longer				Total					Less than Twelve Months				Twelve Months or Longer				Total
	Estimated Fair Value		Unrealized Losses		Estimated Fair Value		Unrealized Losses		Estimated Fair Value		Unrealized Losses			Estimated Fair Value		Unrealized Losses		Estimated Fair Value		Unrealized Losses		Estimated Fair Value		Unrealized Losses
	(In Thousands)													(In Thousands)
Investment securities available-for-sale:													Investment securities available-for-sale:
GSE debentures	$	81,964	$	492	$	3,008	$	88	$	84,972	$	580	GSE debentures	$	12,467	$	234	$	124,811	$	21,290	$	137,278	$	21,524
GSE CMOs	85,854		1,338		48,779		1,553		134,633		2,891		GSE CMOs	37,917		691		17,515		1,510		55,432		2,201
GSE MBSs	132,593		1,129		5,656		256		138,249		1,385		GSE MBSs	30,663		441		131,347		17,266		162,010		17,707
SBA commercial loan asset-backed securities	36		—		34		—		70		—

Municipal obligations													Municipal obligations	3,886		115		—		—		3,886		115
Corporate debt obligations	10,304		22		2,446		61		12,750		83		Corporate debt obligations	27,710		429		2,471		29		30,181		458
U.S. Treasury bonds	4,811		11		—		—		4,811		11		U.S. Treasury bonds	161,633		762		212,468		26,186		374,101		26,948
Trust preferred securities	—		—		1,403		68		1,403		68
Marketable equity securities	506		5		—		—		506		5
Temporarily impaired investment securities available-for-sale	316,068		2,997		61,326		2,026		377,394		5,023
Investment securities held-to-maturity:
GSE debentures	26,166		561		—		—		26,166		561
GSEs MBSs	14,436		145		—		—		14,436		145
Municipal obligations	20,127		185		—		—		20,127		185
Foreign government obligations	492		8		—		—		492		8		Foreign government obligations	—		—		475		25		475		25
Temporarily impaired investment securities held-to-maturity	61,221		899		—		—		61,221		899

Total temporarily impaired investment securities	$	377,289	$	3,896	$	61,326	$	2,026	$	438,615	$	5,922	Total temporarily impaired investment securities	$	274,276	$	2,672	$	489,087	$	66,306	$	763,363	$	68,978

Table of Contents

BROOKLINE BANCORP, INC. AND SUBSIDIARIES

Notes to Unaudited Consolidated Financial Statements (Continued)

~~At and for the Nine Months Ended September 30, 2017 and 2016~~


	At December 31, 2022
	Less than Twelve Months				Twelve Months or Longer				Total
	Estimated Fair Value		Unrealized Losses		Estimated Fair Value		Unrealized Losses		Estimated Fair Value		Unrealized Losses
	(In Thousands)
Investment securities available-for-sale:
GSE debentures	$	56,719	$	1,255	$	95,703	$	23,076	$	152,422	$	24,331
GSE CMOs	16,411		1,563		1,809		192		18,220		1,755
GSE MBSs	97,858		9,823		42,500		9,426		140,358		19,249



Corporate debt obligations	13,764		312		—		—		13,764		312
U.S. Treasury bonds	139,103		3,723		166,150		28,100		305,253		31,823
Foreign government obligations	477		23		—		—		477		23


Temporarily impaired investment securities available-for-sale	324,332		16,699		306,162		60,794		630,494		77,493






Total temporarily impaired investment securities	$	324,332	$	16,699	$	306,162	$	60,794	$	630,494	$	77,493

December 31, 2016

Less than
Twelve Months

Twelve Months
or Longer
Total

Estimated
Fair Value

Unrealized
Losses

Estimated
Fair Value

Unrealized
Losses

Estimated
Fair Value

Unrealized
Losses
(In Thousands)
Investment securities available-for-sale:
GSE debentures $ 67,216
$ 1,290
$ —
$ —
$ 67,216
$ 1,290
GSE CMOs 118,450
2,162
38,852
1,318
157,302
3,480
GSE MBSs 149,687
2,822
198
3
149,885
2,825
SBA commercial loan asset-backed securities —
—
72
—
72
—
Corporate debt obligations 7,953
183
—
—
7,953
183
U.S. Treasury bonds 4,737
64
—
—
4,737
64
Trust preferred securities —
—
1,358
111
1,358
111
Marketable equity securities 503
9
—
—
503
9
Temporarily impaired investment securities available-for-sale 348,546
6,530
40,480
1,432
389,026
7,962
Investment securities held-to-maturity:
GSE debentures 14,101
634
—
—
14,101
634
GSEs MBSs 17,289
187
—
—
17,289
187
Municipal obligations 50,098
1,020
—
—
50,098
1,020
Foreign government obligations 487
13
—
—
487
13
Temporarily impaired investment securities held-to-maturity 81,975
1,854
—
—
81,975
1,854
Total temporarily impaired investment securities $ 430,521
$ 8,384
$ 40,480
$ 1,432
$ 471,001
$ 9,816

The Company performs regular ~~analysis on~~analyses of the investment securities available-for-sale portfolio to determine whether a decline in fair value indicates that an investment security is ~~OTTI.~~impaired. In making these ~~OTTI~~impairment determinations, management considers, among other factors, ~~the length of time and extent to which the fair value has been less than amortized cost;~~ projected future cash flows; credit subordination and the creditworthiness; capital adequacy and near-term prospects of the issuers.

Management also considers the Company's capital adequacy, interest-rate risk, liquidity and business plans in assessing whether it is more likely than not that the Company will sell or be required to sell the investment securities before recovery. If the Company determines that a ~~decline in fair value~~security investment is ~~OTTI~~impaired and that it is more likely than not that the Company will not sell or be required to sell the investment security before recovery of its amortized cost, the credit portion of the impairment loss is recognized in the Company's ~~unaudited~~ consolidated statement of income and the noncredit portion is recognized in accumulated other comprehensive income. The credit portion of the ~~OTTI~~ impairment represents the difference between the amortized cost and the present value of the expected future cash flows of the investment security. If the Company determines that a ~~decline in fair value~~security is ~~OTTI~~impaired and it is more likely than not that it will sell or be required to sell the investment security before recovery of its amortized cost, the entire difference between the amortized cost and the fair value of the security will be recognized in the Company's ~~unaudited~~ consolidated statement of income.

Investment Securities Available-For-Sale Impairment Analysis

The following discussion summarizes, by investment security type, the basis for evaluating if the applicable investment securities within the Company’s available-for-sale portfolio were ~~OTTI~~impaired as of ~~September 30, 2017. Based on the analysis below and the determination that,~~March 31, 2023. The Company has determined it is more likely than not that the Company will not sell or be required to sell the investment securities before recovery of its amortized cost. The Company's ability and intent to hold these investment securities until recovery is supported by the Company's strong capital and liquidity positions as well as its historically low portfolio turnover. As such, management has determined that the investment securities are not ~~OTTI~~impaired as of ~~September 30, 2017.~~March 31, 2023. If market

~~Table of Contents~~

~~BROOKLINE BANCORP, INC. AND SUBSIDIARIES~~

~~Notes to Unaudited Consolidated Financial Statements (Continued)~~

~~At and for the Nine Months Ended September 30, 2017 and 2016~~

conditions for investment securities worsen or the creditworthiness of the underlying issuers deteriorates, it is possible that the Company may recognize additional ~~OTTI~~impairment in future periods.

U.S. Government-Sponsored Enterprises

The Company invests in securities issued by U.S. Government-sponsored enterprises ("GSEs"), including GSE debentures, mortgage-backed securities ("MBSs"), and collateralized mortgage obligations ("CMOs"). GSE securities include obligations issued by the Federal National Mortgage Association ("FNMA"), the Federal Home Loan Mortgage Corporation ("FHLMC"), the Government National Mortgage Association ("GNMA"), the ~~Federal Home Loan Banks ("FHLB")~~FHLB and the Federal Farm Credit Bank. As of ~~September 30, 2017, only~~March 31, 2023, the Company held GNMA MBSs and CMOs, and Small Business Administration ("SBA") commercial loan asset-backed securities in ~~our~~its available-for-sale portfolio with an estimated fair value of ~~$24.9~~$35.5 million, all of which were backed explicitly by the full faith and credit of the U.S. Government, compared to ~~$26.2~~$2.7 million as of December 31, ~~2016.~~2022.

Table of Contents

BROOKLINE BANCORP, INC. AND SUBSIDIARIES

Notes to Unaudited Consolidated Financial Statements (Continued)

As of ~~September 30, 2017,~~March 31, 2023, the Company owned 4451 GSE debentures with a total fair value of ~~$139.3~~$177.2 million, and a net unrealized loss of ~~$0.1~~$21.2 million. The acquisition of PCSB accounted for $40.6 million of the total fair value at March 31, 2023. As of December 31, ~~2016,~~2022, the Company held 2932 GSE debentures with a total fair value of ~~$97.0~~$152.4 million, ~~and~~with a net unrealized loss of ~~$1.1~~$24.3 million. As of ~~September 30, 2017, 28~~March 31, 2023, 26 of the 4451 securities in this portfolio were in an unrealized loss position. As of December 31, ~~2016, 21~~2022, 31 of the 2932 securities in this portfolio were in an unrealized loss position. All securities are performing and backed by the implicit (FHLB/FNMA/FHLMC) or explicit (GNMA/SBA) guarantee of the U.S Government. During the ~~nine~~three months ended ~~September 30, 2017,~~March 31, 2023 and 2022, the Company ~~purchased a total of $42.1 million~~did not purchase GSE debentures. ~~This compares to $32.3 million purchased during the same period in 2016.~~

As of ~~September 30, 2017,~~March 31, 2023, the Company owned 6260 GSE CMOs with a total fair value of ~~$135.3~~$67.7 million and a net unrealized loss of ~~$2.9~~$2.1 million. The acquisition of PCSB accounted for $50.2 million of the total fair value at March 31, 2023. As of December 31, ~~2016,~~2022, the Company held 6232 GSE CMOs with a total fair value of ~~$158.0~~$18.2 million with a net unrealized loss of ~~$3.4~~$1.8 million. As of ~~September 30, 2017, 47~~March 31, 2023, 51 of the 6260 securities in this portfolio were in an unrealized loss position. As of December 31, ~~2016, 47~~2022, all of the 62 securities in this portfolio were in an unrealized loss position. All securities are performing and backed by the implicit (FHLB/FNMA/FHLMC) or explicit (GNMA) guarantee of the U.S Government. During the ~~nine~~three months ended ~~September 30, 2017,~~March 31, 2023 and 2022, the Company did not purchase any GSE ~~CMOs, as compared to the same period in 2016, when the Company purchased a total of $3.1 million of GSE~~ CMOs.

As of ~~September 30, 2017,~~March 31, 2023, the Company owned ~~191~~159 GSE MBSs with a total fair value of ~~$182.1~~$188.8 million and a net unrealized loss of ~~$0.8~~$17.6 million. The acquisition of PCSB accounted for $51.1 million of the total fair value at March 31, 2023. As of December 31, ~~2016,~~2022, the Company held ~~195~~134 GSE MBSs with a total fair value of ~~$212.9~~$140.6 million with a net unrealized loss of ~~$2.0~~$19.2 million. As of ~~September 30, 2017, 66~~March 31, 2023, 132 of the ~~191~~159 securities in this portfolio were in an unrealized loss position. As of December 31, ~~2016, 60~~2022, 128 of the ~~195~~134 securities in this portfolio were in an unrealized loss position. All securities are performing and backed by the implicit (FHLB/FNMA/FHLMC) or explicit (GNMA) guarantee of the U.S Government. During the ~~nine~~three months ended ~~September 30, 2017,~~March 31, 2023 the Company purchased $39.4 million of GSE MBSs compared to the same period in 2022 when the Company did not purchase any GSE ~~MBSs, as compared to the same period~~MBSs.

MunicipalObligations

The Company invests in ~~2016, when the Company purchased a total of $36.7 million of GSE MBSs.~~

~~SBA Commercial Loan Asset-Backed~~

certain state and municipal securities with high credit ratings for portfolio diversification and tax planning purposes. As of ~~September 30, 2017,~~March 31, 2023, the Company owned ~~five SBA~~54 municipal obligation securities with a total fair value of ~~$0.1~~$23.3 million which ~~approximated amortized~~approximates cost. The acquisition of PCSB accounted for all of the total fair value of March 31, 2023. As of December 31, ~~2016,~~2022, the Company ~~owned six SBA securities with a total fair value of $0.1 million, which approximated amortized cost.~~did not hold any municipal securities. As of ~~September 30, 2017, four~~March 31, 2023, 7 of the ~~five~~54 securities in this portfolio were in an unrealized loss position. ~~As of December 31, 2016, four of the six securities in this portfolio were in an unrealized loss position. All securities are performing and backed by the explicit guarantee of the U.S Government.~~ During the ~~nine~~three months ended ~~September 30, 2017 and 2016,~~March 31, 2023, the Company purchased $1.1 million of municipal securities compared to the same period in 2022 when the Company did not purchase any ~~SBA~~municipal securities.

Corporate Obligations

The Company may invest in high-quality corporate obligations to provide portfolio diversification and improve the overall yield on the portfolio. As of ~~September 30, 2017,~~March 31, 2023, the Company held 1814 corporate obligation securities with a total fair value of ~~$58.9~~$37.3 million and a net unrealized ~~gain~~loss of ~~$0.3~~$0.4 million. The acquisition of PCSB accounted for $23.5 million of the total fair value at March 31, 2023. As of December 31, ~~2016,~~2022, the Company held 164 corporate obligation securities with a total fair value of ~~$48.5~~$13.8 million and a net unrealized ~~gain~~loss of ~~$0.2~~$0.3 million. As of ~~September 30, 2017, three~~March 31, 2023, 12 of the ~~eighteen~~14 securities in this portfolio were in an unrealized loss position. As of December 31, ~~2016, three~~2022, all of the ~~sixteen~~ securities in this portfolio were in an unrealized loss position. Full collection of the obligations is expected because the financial condition of the issuers is sound, they have not defaulted on scheduled payments, the obligations are rated investment grade, and the Company has the ability and intent to hold the obligations for a period of time to recover the amortized cost.

~~Table of Contents~~

~~BROOKLINE BANCORP, INC. AND SUBSIDIARIES~~

~~Notes to Unaudited Consolidated Financial Statements (Continued)~~

~~At and for the Nine Months Ended September 30, 2017 and 2016~~

During the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2023 and ~~2016,~~2022, the Company ~~purchased a total of $10.3 million and $5.1 million of~~did not purchase any corporate ~~obligations, respectively.~~obligations.

U.S. Treasury Bonds

The Company invests in securities issued by the U.S. government. As of ~~September 30, 2017,~~March 31, 2023, the Company owned ~~one~~77 U.S. Treasury ~~bond~~bonds with a total fair value of $4.8 million and an unrealized loss of $11.0 thousand. This compares to one U.S. Treasury bond with a total fair value of $4.7 million and an unrealized loss of $0.1 million as of December 31, 2016. During the nine months ended September 30, 2017 and 2016, the Company did not purchase any U.S. Treasury bonds.

~~Trust Preferred Securities~~

Trust preferred securities represent subordinated debt issued by financial institutions. As of September 30, 2017, the Company owned two trust preferred securities with a total fair value of $1.4 million and an unrealized loss of $0.1 million. This compares to two trust preferred securities with a total fair value of $1.4 million and an unrealized loss of $0.1 million as of December 31, 2016. As of September 30, 2017 and December 31, 2016, both of the securities in this portfolio were in unrealized loss positions. Full collection of the obligations is expected because the financial condition of the issuers is sound, neither of the issuers has defaulted on scheduled payments, the obligations are rated investment grade, and the Company has the ability and intent to hold the obligations for a period of time to recover the amortized cost.

~~Marketable Equity Securities~~

From time to time, the Company will invest in mutual funds for community reinvestment purposes. As of September 30, 2017 and December 31, 2016, the Company owned marketable equity securities with a fair value of $1.0 million, which approximated amortized cost. As of September 30, 2017 and December 31, 2016, one of the two securities in this portfolio was in an unrealized loss position. During the nine months ended September 30, 2017 and 2016, the Company did not purchase any marketable equity securities.

~~Investment Securities Held-to-Maturity Impairment Analysis~~

The following discussion summarizes by investment security type, the basis for evaluating if the applicable investment securities within the Company's held-to-maturity portfolio were OTTI at September 30, 2017. Management has the ability and the intent to hold the securities until maturity.

~~U.S. Government-Sponsored Enterprises~~

~~As of September 30, 2017, the Company owned 13 GSE debentures with a total fair value of $38.1~~$572.3 million and a net unrealized loss of ~~$0.6~~$25.8 million. The acquisition of PCSB accounted for $235.0 million of the total fair value at March 31, 2023. As of December 31, ~~2016,~~2022, the Company ~~owned five GSE debentures~~held 41 U.S. Treasury bonds with a total fair value of ~~$14.1~~$331.3 million and ana net unrealized loss of ~~$0.6~~$31.5 million. As of ~~September 30, 2017, nine~~March 31, 2023, 49 of the ~~thirteen~~77 securities in this portfolio were in an unrealized loss position. At December 31, 2016, all five of the securities in this portfolio were in unrealized loss positions. All securities are performing and backed by the implicit (FHLB/FNMA/FHLMC) or explicit (GNMA) guarantee of the U.S Government. During the nine months ended September 30, 2017 and 2016, the Company purchased a total of $23.9 million and $17.7 million in GSE debentures, respectively.

~~As of September 30, 2017, the Company owned 11 GSE MBSs with a total fair value of $14.6 million and an unrealized loss of $0.1 million.~~ As of December 31, ~~2016, the Company owned 11 GSE MBSs with a total fair value of $17.5 million and an unrealized loss of $0.2 million. As of September 30, 2017 and December 31, 2016, eight~~2022, 38 of the ~~eleven~~41 securities in this portfolio were in an unrealized loss position. ~~All securities are performing and backed by the implicit (FHLB/FNMA/FHLMC) or explicit (GNMA) guarantee of the U.S Government.~~ During the ~~nine~~three months ended ~~September 30, 2017,~~March 31, 2023 the Company ~~did not purchase any GSE MBSs, as~~purchased $234.0 million of U.S. Treasury bonds, compared to the same period in ~~2016,~~2022 when the Company purchased ~~a total of $2.4~~$83.6 million ~~of GSE MBSs.~~

~~Municipal Obligations~~

The Company invests in certain state and municipal securities with high credit ratings for portfolio diversification and tax planning purposes. As of September 30, 2017, the Company owned 100 municipal obligation securities with a total fair value of $54.0 million and and a net unrealized gain of $0.2 million. As of December 31, 2016, the Company owned 100 municipal obligation securities with a total fair value of $53.2 million and an unrealized loss of $1.0 million. As of September 30, 2017, 37 of the 100 securities in this portfolio were in an unrealized loss position as compared to December 31, 2016, when 93 of the

U.S. Treasury bonds.

Table of Contents

BROOKLINE BANCORP, INC. AND SUBSIDIARIES

Notes to Unaudited Consolidated Financial Statements (Continued)

~~At and for the Nine Months Ended September 30, 2017 and 2016~~

100 securities were in an unrealized loss position. During the nine months ended September 30, 2017, the Company did not purchase any municipal obligations, as compared to the same period in 2016, when the Company purchased a total of $4.4 million of municipal obligations.

Foreign Government Obligations

~~The Company holds an investment in foreign government bonds.~~ As of ~~September 30, 2017~~March 31, 2023 and December 31, ~~2016,~~2022, the Company owned ~~one~~1 foreign government obligation security with a fair value of $0.5 million, which approximated cost. As of ~~September 30, 2017~~March 31, 2023 and December 31, ~~2016~~2022, respectively, the security was in an unrealized loss position. During the ~~nine~~three months ended ~~September 30, 2017,~~March 31, 2023, the Company did not purchase any foreign government obligations, as compared to the same period in ~~2016,~~2022 when the Company ~~repurchased~~purchased the foreign government ~~obligation~~obligations after a prior security ~~that~~ matured.

Portfolio Maturities

The final stated maturities of the debt securities are as follows for the periods indicated:


	At September 30, 2017					At December 31, 2016						At March 31, 2023						At December 31, 2022
	Amortized Cost		Estimated Fair Value		Weighted Average Rate	Amortized Cost		Estimated Fair Value		Weighted Average Rate		Amortized Cost		Estimated Fair Value		Weighted Average Rate		Amortized Cost		Estimated Fair Value		Weighted Average Rate
	(Dollars in Thousands)											(Dollars in Thousands)
Investment securities available-for-sale:											Investment securities available-for-sale:
Within 1 year	$	13,589	$	13,672	2.51%	$	13	$	13	0.17%	Within 1 year	$	244,307	$	243,949	3.96	%	$	119,912	$	119,075	3.10	%
After 1 year through 5 years	133,047		133,571		2.03%	81,524		81,833		2.14%	After 1 year through 5 years	314,708		308,369		3.23	%	163,941		156,120		2.40	%
After 5 years through 10 years	128,377		127,821		2.03%	128,956		127,952		2.03%	After 5 years through 10 years	323,324		283,588		1.72	%	291,284		244,847		1.30	%
Over 10 years	250,488		246,860		2.01%	318,743		312,864		2.03%	Over 10 years	251,763		231,126		3.40	%	158,841		136,724		2.10	%
	$	525,501	$	521,924	2.03%	$	529,236	$	522,662	2.04%		$	1,134,102	$	1,067,032	3.03	%	$	733,978	$	656,766	2.06	%
Investment securities held-to-maturity:								��
Within 1 year	$	798	$	798	1.00%	$	190	$	190	1.00%
After 1 year through 5 years	49,124		49,214		1.69%	23,012		22,750		1.30%
After 5 years through 10 years	43,236		42,772		1.82%	46,442		45,042		1.75%
Over 10 years	14,580		14,436		1.93%	17,476		17,289		2.11%
	$	107,738	$	107,220	1.77%	$	87,120	$	85,271	1.70%

Actual maturities of debt securities will differ from those presented above since certain obligations amortize and may also provide the issuer the right to call or prepay the obligation prior to scheduled maturity without penalty. MBSs and CMOs are included above based on their final stated maturities; the actual maturities, however, may occur earlier due to anticipated prepayments and stated amortization of cash flows.

As of ~~September 30, 2017,~~March 31, 2023, issuers of debt securities with an estimated fair value of ~~$21.5~~$103.3 million had the right to call or prepay the obligations. Of the ~~$21.5~~$103.3 million, approximately ~~$15.0~~$10.3 million matures in less then 1 ~~- 5 years, $6.5~~year, $37.4 million matures in ~~6 - 10~~1-5 years, $47.8 million matures in 6-10 years, and ~~none mature~~$7.8 million matures after ten years. As of December 31, ~~2016,~~2022, issuers of debt securities with an estimated fair value of approximately ~~$27.9~~$53.1 million had the right to call or prepay the obligations. Of the ~~$27.9~~$53.1 million, ~~$3.0~~approximately $2.5 million matures in less then 1 year, $6.3 million matures in 1-5 years, ~~$23.5~~$37.4 million matures in 6-10 years, and ~~$1.4~~$6.9 million matures after ten years.

~~Table of Contents~~

~~BROOKLINE BANCORP, INC. AND SUBSIDIARIES~~

~~Notes to Unaudited Consolidated Financial Statements (Continued)~~

~~At and for the Nine Months Ended September 30, 2017 and 2016~~

Security Sales

~~On February 3, 2017,~~The proceeds from the ~~Company, through its wholly owned subsidiary, Brookline Securities Corp. ("Brookline Securities"), received $319.04 in cash and 14.876 shares~~sale of ~~Community Bank Systems, Inc. (“CBU”) common stock in exchange for each of~~investment securities available-for-sale were $224.8 million during the 9,721 shares of Northeast Retirement Services, Inc. (“NRS”) stock held by Brookline Securities. The exchange was completed in accordance with the merger agreement entered into between NRS and CBU. As part of the merger agreement, the Company was restricted to selling 5,071 shares of CBU per day in the open market. During the quarterthree months ended March 31, ~~2017,~~2023, compared to the three month ended March 31, 2022 where the Company ~~completed the sale of all the CBU shares. When~~did not sell any investment securities ~~are sold, the adjusted cost of the specific security sold is used to compute the gain or loss on the sale. The table below summarizes the activity with respect to the sale of the CBU shares.~~

Nine Months Ended September 30, 2017
(In Thousands)
Sales of marketable and restricted equity securities $ 11,393

Gross gains from sales 11,612
Gross losses from sales (219 )
Gain on sales of securities, net $ 11,393

~~Brookline~~available-for-sale. Securities held one Class A Common Stock share and 2,070 Class B Common Stock shares of the Savings Bank Life Insurance Company of Massachusetts ("SBLI"). In July 2017, SBLI converted from a Massachusetts stock insurance company to a Massachusetts mutual insurance company and, as a result, Brookline Securities received $500 for one share of Class A Common Stock and $128 per share for its 2,070 shares of Class B Common Stock of SBLI, in exchange for $265.5 thousand in cash. Brookline Securities recognized a nominal gain on the exchange.

~~There were no security~~ sales executed during the three ~~month period~~months ended ~~September 30, 2016~~were related to the acquisition of PCSB Bank and the ~~nine month period ended September 30, 2016.~~restructuring of the acquired investment portfolio.


	Three Months Ended March 31
	2023		2022
	(In Thousands)
Investment Securities available-for-sale:
Proceeds from sales:	$	224,832	$	—
Gross gains from sales	2,702		—
Gross losses from sales	(1,001)		—
Gain (loss) on sales of securities, net	$	1,701	$	—

Table of Contents

BROOKLINE BANCORP, INC. AND SUBSIDIARIES

Notes to Unaudited Consolidated Financial Statements (Continued)

~~At and for the Nine Months Ended September 30, 2017 and 2016~~

(4) Loans and Leases

The following ~~tables present loan~~table presents the amortized cost of loans and ~~lease balances~~leases and weighted average coupon rates for the ~~originated and acquired~~ loan and lease portfolios at the dates indicated:


	At March 31, 2023				At December 31, 2022
	Balance		Weighted Average Coupon		Balance		Weighted Average Coupon
	(Dollars In Thousands)
Commercial real estate loans:
Commercial real estate	$	3,986,676	5.11	%	$	3,046,746	4.93	%
Multi-family mortgage	1,356,546		4.82	%	1,150,597		4.74	%
Construction	267,192		6.34	%	206,805		6.51	%
Total commercial real estate loans	5,610,414		5.10	%	4,404,148		4.95	%
Commercial loans and leases:
Commercial (1)	858,963		6.23	%	752,948		6.03	%
Equipment financing	1,245,742		7.24	%	1,216,585		7.04	%
Condominium association	42,444		4.76	%	46,966		4.80	%
Total commercial loans and leases	2,147,149		6.79	%	2,016,499		6.61	%
Consumer loans:
Residential mortgage	1,086,754		4.13	%	844,614		3.98	%
Home equity	345,673		7.54	%	322,622		7.00	%
Other consumer	56,975		7.07	%	56,505		6.65	%
Total consumer loans	1,489,402		5.03	%	1,223,741		4.90	%
Total loans and leases	$	9,246,965	5.47	%	$	7,644,388	5.38	%

(1) Including $503 and $257 of PPP loans as of March 31, 2023 and December 31, 2022, respectively. These loans are fully guaranteed by the SBA and therefore, have not been reserved for in the allowance for credit losses as of March 31, 2023 and December 31, 2022. The increase in PPP loans is due to the acquisition of PCSB Bank.

At September 30, 2017
Originated Acquired Total
Balance
Weighted
Average
Coupon
Balance
Weighted
Average
Coupon
Balance
Weighted
Average
Coupon
(Dollars In Thousands)
Commercial real estate loans:
Commercial real estate $ 2,002,369
4.11% $ 117,071
4.33% $ 2,119,440
4.12%
Multi-family mortgage 718,495
4.05% 25,417
4.48% 743,912
4.06%
Construction 165,657
4.33% —
—% 165,657
4.33%
Total commercial real estate loans 2,886,521
4.11% 142,488
4.36% 3,029,009
4.12%
Commercial loans and leases:
Commercial 679,984
4.24% 9,026
5.51% 689,010
4.26%
Equipment financing 837,702
7.24% 4,814
5.91% 842,516
7.23%
Condominium association 53,770
4.44% —
—% 53,770
4.44%
Total commercial loans and leases 1,571,456
5.85% 13,840
5.65% 1,585,296
5.85%
Consumer loans:
Residential mortgage 593,922
3.76% 58,493
4.22% 652,415
3.80%
Home equity 311,718
4.05% 45,264
4.49% 356,982
4.11%
Other consumer 15,627
5.36% 111
18.00% 15,738
5.45%
Total consumer loans 921,267
3.89% 103,868
4.35% 1,025,135
3.94%
Total loans and leases $ 5,379,244
4.58% $ 260,196
4.42% $ 5,639,440
4.57%

~~Table~~Accrued interest on loans and leases, which were excluded from the amortized cost of ~~Contents~~

~~BROOKLINE BANCORP, INC. AND SUBSIDIARIES~~

~~Notes to Unaudited Consolidated Financial Statements (Continued)~~

Atloans and ~~for~~leases totaled $32.2 million and $26.1 million at March 31, 2023 and December 31, 2022, respectively, and were included in other assets in the ~~Nine Months Ended September 30, 2017 and 2016~~

At December 31, 2016
Originated Acquired Total
Balance
Weighted
Average
Coupon
Balance
Weighted
Average
Coupon
Balance
Weighted
Average
Coupon
(Dollars In Thousands)
Commercial real estate loans:
Commercial real estate $ 1,907,254
3.95% $ 143,128
4.24 % $ 2,050,382
3.97%
Multi-family mortgage 701,450
3.79% 29,736
4.53 % 731,186
3.82%
Construction 136,785
3.79% 214
3.67 % 136,999
3.79%
Total commercial real estate loans 2,745,489
3.90% 173,078
4.29 % 2,918,567
3.92%
Commercial loans and leases:
Commercial 621,285
4.11% 14,141
5.44 % 635,426
4.14%
Equipment financing 793,702
7.06% 6,158
5.86 % 799,860
7.05%
Condominium association 60,122
4.39% —
— % 60,122
4.39%
Total commercial loans and leases 1,475,109
5.71% 20,299
5.57 % 1,495,408
5.71%
Consumer loans:
Residential mortgage 555,430
3.67% 68,919
3.98 % 624,349
3.70%
Home equity 289,361
3.50% 52,880
4.26 % 342,241
3.62%
Other consumer 18,171
5.48% 128
17.92 % 18,299
5.57%
Total consumer loans 862,962
3.65% 121,927
4.12 % 984,889
3.71%
Total loans and leases $ 5,083,560
4.38% $ 315,304
4.31 % $ 5,398,864
4.38%
accompanying consolidated balance sheets.

The net unamortized deferred loan origination ~~fees and~~ costs included in total loans and leases were ~~$15.3~~$10.5 million and ~~$14.2~~$11.3 million as of ~~September 30, 2017~~March 31, 2023 and December 31, ~~2016,~~2022, respectively.

The ~~Company's~~ Banks and their subsidiaries lend primarily in ~~eastern Massachusetts, southern~~all New ~~Hampshire~~England states and ~~Rhode Island,~~New York, with the exception of equipment financing, ~~28.1%~~27.1% of which is in the greater New York and New Jersey metropolitan area and ~~71.9%~~72.9% of which is in other areas in the United States of America as of ~~September 30, 2017.~~March 31, 2023.

~~Accretable Yield for the Acquired Loan Portfolio~~

~~The following table summarizes activity in the accretable yield for the acquired loan portfolio for the periods indicated:~~

Three Months Ended September 30, Nine Months Ended September 30,
2017
2016 2017 2016
(In Thousands)
Balance at beginning of period $ 13,702
$ 18,038
$ 14,353
$ 20,796
Accretion (2,872 ) (1,479 ) (6,604 ) (3,914 )
Reclassification from (to) nonaccretable difference as a result of changes in expected cash flows 871
(377 ) 3,952
(700 )
Balance at end of period $ 11,701
$ 16,182
$ 11,701
$ 16,182

On a quarterly basis, subsequent to acquisition, management reforecasts the expected cash flows for acquired ASC 310-30 loans, taking into account prepayment speeds, probability of default and loss given defaults. Management compares cash flow projections per the reforecast to the original cash flow projections and determines whether any reduction in cash flow expectations are due to deterioration, or if the change in cash flow expectation is related to noncredit events. This cash flow analysis is used to evaluate the need for a provision for loan and lease losses and/or prospective yield adjustments. During the three months ended September 30, 2017 and 2016, accretable yield adjustments totaling $0.9 million and $0.4 million, respectively, were made for certain loan pools. During the nine months ended September 30, 2017 and 2016, accretable yield

~~Table of Contents~~

~~BROOKLINE BANCORP, INC. AND SUBSIDIARIES~~

~~Notes to Unaudited Consolidated Financial Statements (Continued)~~

~~At and for the Nine Months Ended September 30, 2017 and 2016~~

adjustments totaling $4.0 million and $0.7 million, respectively, were made for certain loan pools. These accretable yield adjustments, which are subject to continued re-assessment, will be recognized over the remaining lives of those pools.

Loans and Leases Pledged as Collateral

As of ~~September 30, 2017~~March 31, 2023 and December 31, ~~2016,~~2022, there were ~~$2.0~~$3.2 billion and ~~$2.1~~$2.4 billion respectively of loans and leases pledged as collateral for repurchase agreements; municipal deposits; treasury, tax and loan deposits; swap agreements; FRB borrowings; and ~~FHLBB~~FHLB borrowings. The Banks did not have any outstanding FRB borrowings as of ~~September 30, 2017~~March 31, 2023 and December 31, ~~2016.~~2022.

Table of Contents

BROOKLINE BANCORP, INC. AND SUBSIDIARIES

Notes to Unaudited Consolidated Financial Statements (Continued)

(5) Allowance for ~~Loan and Lease~~Credit Losses

The following tables present the changes in the allowance for loan and lease losses ~~and the recorded investment~~ in loans and leases by portfolio segment for the periods indicated:


	Three Months Ended March 31, 2023
	Commercial Real Estate		Commercial		Consumer		Total
	(In Thousands)
Balance at December 31, 2022	$	68,154	$	26,604	$	3,724	$	98,482

Charge-offs	—		(840)		(11)		(851)
Recoveries	6		383		11		400
Provision (credit) for loan and lease losses excluding unfunded commitments	14,532		6,614		1,688		22,834

Balance at March 31, 2023	$	82,692	$	32,761	$	5,412	$	120,865

Three Months Ended September 30, 2017

Commercial
Real Estate
Commercial Consumer Total
(In Thousands)
Balance at June 30, 2017 $ 27,954
$ 31,099
$ 5,468
$ 64,521
Charge-offs (65 ) (1,965 ) (113 ) (2,143 )
Recoveries —
109
80
189
Provision for loan and lease losses 979
1,832
35
2,846
Balance at September 30, 2017 $ 28,868
$ 31,075
$ 5,470
$ 65,413
The table above excludes the establishment of the initial reserve for PCD loans and leases of $2.3 million, net of $2.3 million of day one charge-offs recognized at the date of the acquisition in accordance with GAAP.


	Three Months Ended March 31, 2022
	Commercial Real Estate		Commercial		Consumer		Total
	(In Thousands)
Balance at December 31, 2021	$	69,213	$	27,055	$	2,816	$	99,084

Charge-offs	(37)		(2,301)		(6)		(2,344)
Recoveries	6		353		38		397
Provision (credit) for loan and lease losses excluding unfunded commitments	(151)		(1,604)		81		(1,674)
Balance at March 31, 2022	$	69,031	$	23,503	$	2,929	$	95,463

The allowance for credit losses for unfunded credit commitments, which is included in other liabilities, was $23.1 million, and $20.6 million at March 31, 2023 and December 31, 2022, respectively.

Provision for Credit Losses

The provision (credit) for credit losses are set forth below for the periods indicated:


	Three Months Ended March 31,
	2023		2022
	(In Thousands)
Provision (credit) for loan and lease losses:
Commercial real estate	$	14,532	$	(151)
Commercial	6,614		(1,604)
Consumer	1,688		81

Total (credit) provision for loan and lease losses	22,834		(1,674)





Unfunded commitments	2,510		1,510
Investment securities available-for-sale	198		—
Total provision (credit) for credit losses	$	25,542	$	(164)

Three Months Ended September 30, 2016

Commercial
Real Estate
Commercial Consumer Total
(In Thousands)
Balance at June 30, 2016 $ 29,861
$ 22,916
$ 4,481
$ 57,258
Charge-offs (50 ) (545 ) (244 ) (839 )
Recoveries —
170
149
319
(Credit) provision for loan and lease losses (1,755 ) 3,923
(14 ) 2,154
Balance at September 30, 2016 $ 28,056
$ 26,464
$ 4,372
$ 58,892

Nine Months Ended September 30, 2017

Commercial
Real Estate
Commercial Consumer Total
(In Thousands)
Balance at December 31, 2016 $ 27,645
$ 20,906
$ 5,115
$ 53,666
Charge-offs (294 ) (6,267 ) (329 ) (6,890 )
Recoveries 476
800
263
1,539
Provision for loan and lease losses 1,041
15,636
421
17,098
Balance at September 30, 2017 $ 28,868
$ 31,075
$ 5,470
$ 65,413

Table of Contents

BROOKLINE BANCORP, INC. AND SUBSIDIARIES

Notes to Unaudited Consolidated Financial Statements (Continued)

~~At and for the Nine Months Ended September 30, 2017 and 2016~~

Nine Months Ended September 30, 2016

Commercial
Real Estate
Commercial Consumer Total
(In Thousands)
Balance at December 31, 2015 $ 30,151
$ 22,018
$ 4,570
$ 56,739
Charge-offs (1,534 ) (3,250 ) (1,254 ) (6,038 )
Recoveries —
495
605
1,100
(Credit) provision for loan and lease losses (561 ) 7,201
451
7,091
Balance at September 30, 2016 $ 28,056
$ 26,464
$ 4,372
$ 58,892

The liability for unfunded credit commitments, which is included in other liabilities, was $1.5 million at September 30, 2017 and December 31, 2016, respectively. The changes in the liability for unfunded credit commitments reflect changes in the estimate of loss exposure associated with certain unfunded credit commitments. No credit commitments were charged off against the liability account in the nine-month periods ended September 30, 2017 and 2016.

~~Provision for Credit Losses~~

~~The provisions for credit losses are set forth below for the periods indicated:~~

Three Months Ended September 30, Nine Months Ended September 30,
2017 2016 2017 2016
(In Thousands)
Provision (credit) for loan and lease losses:
Commercial real estate $ 979
$ (1,755 ) $ 1,041
$ (561 )
Commercial 1,832
3,923
15,636
7,201
Consumer 35
(14 ) 421
451
Total provision for loan and lease losses 2,846
2,154
17,098
7,091
Unfunded credit commitments 65
61
88
47
Total provision for credit losses $ 2,911
$ 2,215
$ 17,186
$ 7,138

Allowance for Loan and Lease Losses Methodology

Management has established a methodology to determine the adequacy of the allowance for ~~loan and lease~~credit losses that assesses the risks and losses ~~inherent in~~expected on the loan and lease ~~portfolio.~~portfolio and unfunded commitments. Additions to the allowance for ~~loan and lease~~credit losses are made by charges to the provision for credit losses. Losses on loans and leases are charged off against the allowance when all or a portion of a loan or lease is considered uncollectible. Subsequent recoveries on loans previously charged off, if any, are credited to the allowance when realized.

~~Management uses a consistent and systematic process and methodology to evaluate the adequacy of~~To calculate the allowance for loans collectively evaluated, management uses models developed by a third party. Commercial real estate ("CRE"), commercial and industrial ("C&I"), and retail lifetime loss rate models calculate the expected losses over the life of the loan based on exposure at default loan attributes and ~~lease losses~~reasonable, supportable economic forecasts. The exposure at default considers the current unpaid balance, prepayment assumptions and expected utilization assumptions. The expected loss estimates for two small commercial portfolios are based on ~~a quarterly basis. For purposes of determining the allowance for loan and lease losses, the Company has segmented certain loans and leases~~historical loss rates.

Key assumptions used in the models include portfolio segmentation, prepayments, and the expected utilization of unfunded commitments, among others. The portfolios are segmented by ~~product~~loan level attributes such as loan type, ~~into~~loan size, date of origination, and delinquency status to create homogenous loan pools. Pool level metrics are calculated and loss rates are subsequently applied to the ~~following segments: (1) commercial real estate~~pools as the loans ~~(2) commercial loans~~have like characteristics. Prepayment assumptions are embedded within the models and ~~leases, and (3) consumer loans. Portfolio segments~~ are ~~further disaggregated into classes~~ based on the ~~associated risks~~same data used for model development and incorporate adjustments for reasonable and supportable forecasts. Model development data and developmental time periods vary by model, but all use at least ten years of historical data and capture at least one recessionary period. Expected utilization is based on current utilization and a loan equivalency ("LEQ") factor. LEQ varies by current utilization and provides a reasonable estimate of expected draws and borrower behavior. Assumptions and model inputs are reviewed in accordance with model monitoring practices and as information becomes available.

The ACL estimate incorporates reasonable and supportable forecasts of various macro-economic variables over the remaining life of loans and leases. The development of the reasonable and supportable forecast assume each macro-economic variable will revert to long-term expectations, with reversion characteristics unique to specific economic indicators and forecasts. Reversion towards long-term expectations generally begins two to three years from the forecast start date and largely completes within the ~~segments. Commercial real estate loans are divided into three classes: commercial real estate loans, multi-family mortgage loans,~~first five years. Because the reasonable and construction loans. Commercial loans and leases are divided into three classes: commercial loans which include taxi medallion loans, equipment financing, and loans to condominium associations. Consumer loans are divided into three classes: residential mortgage loans, home equity loans, and other consumer loans. A formula-based credit evaluation approach is applied to each group, coupled with an analysis of certain loans for impairment. For each class of loan, management makes significant judgments in selecting the estimation method that fits the credit characteristics of its class and portfolio segment as set forth below.

The general allowance related to loans collectively evaluated for impairment is determined using a formula-based approach utilizing the risk ratings of individual credits and loss factors derived from historic portfolio loss rates, which include estimates of incurred losses over an estimated loss emergence period (“LEP”). The LEP was generated utilizing a charge-off

~~Table of Contents~~

~~BROOKLINE BANCORP, INC. AND SUBSIDIARIES~~

~~Notes to Unaudited Consolidated Financial Statements (Continued)~~

~~At and for the Nine Months Ended September 30, 2017 and 2016~~

~~look-back analysis which studied the time from the first indication of elevated risk of repayment (or other early event indicating a problem) to eventual charge-off to support the LEP considered~~supportable economic forecasts used in the ~~allowance calculation. This reserving methodology established~~models are mean reverting, the ~~approximate number~~models are therefore considered to be implicitly mean reverting.

Management elected to use multiple economic forecasts in determining the reserve to account for economic uncertainty. The forecasts include various projections of ~~months of LEP that represents incurred losses~~gross domestic product ("GDP"), interest rates, property price indices, and employment measures. Scenario weighting and model parameters are reviewed for each ~~portfolio. In addition~~calculation and updated to ~~quantitative measures, relevant qualitative factors include, but are not limited to: (1) levels~~reflect facts and ~~trends in past due~~circumstances as of the financial statement date. The forecasts utilized at March 31, 2023 reflect the immediate and impaired loans, (2) levels and trends in charge-offs, (3) changes in underwriting standards, policy exceptions, and credit policy, (4) experience of lending management and staff, (5) economic trends, (6) industry conditions, (7)longer-term effects of ~~changes in credit concentrations, (8)~~a rising interest rate environment and ~~(9) regulatory and other changes. The general allowance related~~inflationary conditions.

As of March 31, 2023, management applied qualitative adjustments to the ~~acquired~~CRE lifetime loss rate, C&I lifetime loss rate, and Retail lifetime loss rate models. These adjustments addressed model limitations, were based on historical loss patterns, and targeted specific risks within the certain portfolios. A general qualitative adjustment was applied to all models to account for general economic uncertainty by placing a greater probability on negative economic forecasts. Additional qualitative adjustments were applied to the commercial, multifamily, and commercial real estate (includes owner occupied, non-owner occupied, and construction) portfolios based on the Company’s historical loss experience and the loss experience of the Company’s peer group. High risk segments of the Eastern Funding portfolios also received additional qualitative adjustments based on recent loss history and expected liquidation values. These qualitative adjustments resulted in additions to reserves for all portfolios, as compared to the model output.

Specific reserves are established for loans ~~collectively~~individually evaluated for impairment when amortized cost basis is determined based upon the degree, if any, of deterioration in the pooled loans subsequent to acquisition. The qualitative factors used in the determination are the same as those used for originated loans.

~~Specific valuation allowances are established for impaired originated loans with book values~~ greater than the discounted present value of expected future cash flows or, in the case of collateral-dependent ~~impaired~~ loans, ~~for any~~when there is an excess of a loan's ~~book balance~~amortized cost basis over the fair value of its underlying collateral. ~~Specific valuation allowances~~When loans and leases do not share risk characteristics with other financial assets they are established for acquired loans with deterioration in the discounted present value of expected future cash flows since acquisitions or, in the case of collateral dependent impaired loans, for any increase in the excess of a loan's book balance greater than the fair value of its underlying collateral. A specific valuation allowance for losses on troubled debt restructured ("TDR") loans is determined by comparing the net carrying amount of the troubled debt restructured loan with the restructured loan's cash flows discounted at the original effective rate. Impairedevaluated individually. Individually evaluated loans are reviewed quarterly with adjustments made to the calculated reserve as necessary.

The general allowance for loan and lease losses was $110.6 million as of March 31, 2023, compared to $95.4 million as of December 31, 2022. The increase in the general allowance was primarily driven by the acquisition of PCSB Bank during the quarter, which contributed $13.6 million of the $15.2 million increase, and secondarily by loan growth during the quarter.

Table of Contents

BROOKLINE BANCORP, INC. AND SUBSIDIARIES

Notes to Unaudited Consolidated Financial Statements (Continued)

The specific allowance for loan and lease losses was $10.3 million as of March 31, 2023, compared to $3.1 million as of December 31, 2022. The specific allowance increased by $7.1 million during the three months ended March 31, 2023 primarily due to specific reserves on two C&I accounts totaling $6 million.

As of ~~September 30, 2017,~~March 31, 2023, management believes that the methodology for calculating the allowance is sound and that the allowance provides a reasonable basis for determining and reporting on ~~probable~~expected losses inover the lifetime of the Company’s loan portfolios.

As of September 30, 2017, the Company had a portfolio of approximately $27.1 million in loans secured by taxi medallions issued by the cities of Boston and Cambridge. As of December 31, 2016, this portfolio was approximately $31.1 million. Application-based mobile ride services, such as Uber and Lyft, have generated increased competition in the transportation sector, resulting in a reduction in taxi utilization and, as a result, a reduction in the collateral value and credit quality of taxi medallion loans. This has increased the likelihood that loans secured by taxi medallions may default, or that the borrowers may be unable to repay these loans at maturity, potentially resulting in an increase in past due loans, troubled debt restructurings, and charge-offs. The Company’s allowance calculation included a further segmentation of the commercial loans and leases to reflect the increased risk in the Company’s taxi medallion portfolio. This allowance calculation segmentation represents management’s estimations of the current risks associated with the portfolio.

As of September 30, 2017, the Company had an allowance for loan and lease losses associated with taxi medallion loans of $7.2 million of which $5.7 million were specific reserves and $1.5 million was a general reserve. As of December 31, 2016, the Company had an allowance for loan and lease losses associated with taxi medallion loans of $1.3 million of which $0.1 million were specific reserves and $1.2 million was a general reserve. The increase in the allowance for loan and leases associated with taxi medallion loans was primarily driven by the increase in specific reserves due to changes in the underlying collateral value of taxi medallions and the increase in general reserve due to the increase in the historical loss factor applied to the taxi medallion loans. The total troubled debt restructured loans and leases secured by taxi medallions increased by $0.6 million from $6.1 million at December 31, 2016 to $6.7 million at September 30, 2017 due to six taxi medallion relationships which were restructured during the first quarter of 2017. The total loans and leases secured by taxi medallions that were placed on nonaccrual increased to $15.1 million at September 30, 2017 from $13.4 million at December 31, 2016 due to the six restructured taxi medallion relationships mentioned above which were placed on nonaccrual status. In addition, further declines in demand for taxi services or further deterioration in the value of taxi medallions may result in higher delinquencies and losses beyond that provided for in the allowance for loan and lease losses.

The general allowance for loan and lease losses was $57.9 million as of September 30, 2017, compared to $53.5 million as of December 31, 2016. The general allowance for loan and lease losses increased by $4.4 million during the nine months ended September 30, 2017, as a result of the continued growth in the Company's loan portfolios and the increase in historical loss factors applied to taxi medallion and commercial real estate loan portfolios.

The specific allowance for loan and lease losses was $7.5 million as of September 30, 2017, compared to $0.2 million as of December 31, 2016. The specific allowance increased by $7.3 million during the nine months ended September 30, 2017,

~~Table of Contents~~

~~BROOKLINE BANCORP, INC. AND SUBSIDIARIES~~

~~Notes to Unaudited Consolidated Financial Statements (Continued)~~

~~At and for the Nine Months Ended September 30, 2017 and 2016~~

~~primarily due to the reduction in collateral values for taxi medallion loans and the increase in specific reserves for one commercial loan.~~

Credit Quality Assessment

At the time of loan origination, a rating is assigned based on the capacity to pay and general financial strength of the borrower, the value of assets pledged as collateral, and the evaluation of third party support such as a guarantor. The Company continually monitors the credit quality of the loan portfolio using all available information. The officer responsible for handling each loan is required to initiate changes to risk ratings when changes in facts and circumstances occur that warrant an upgrade or downgrade in a loan rating. Based on this information, loans demonstrating certain payment issues or other weaknesses may be categorized as delinquent, ~~impaired,~~adversely risk-rated, nonperforming and/or put on nonaccrual status. Additionally, in the course of resolving such loans, the Company may choose to restructure the contractual terms of certain loans to match the borrower's ability to repay the loan based on their current financial condition. If a restructured loan meets certain criteria, it may be categorized as a ~~troubled debt restructuring.~~modified loan.

The Company reviews numerous credit quality indicators when assessing the risk in its loan portfolio. For all loans, the Company utilizes an eight-grade loan rating system, which assigns a risk rating to each borrower based on a number of quantitative and qualitative factors associated with a loan transaction. Factors considered include industry and market conditions; position within the industry; earnings trends; operating cash flow; asset/liability values; debt capacity; guarantor strength; management and controls; financial reporting; collateral; and other considerations. In addition, the Company's independent loan review group evaluates the credit quality and related risk ratings in all loan portfolios. The results of these reviews are reported to the Risk Committee of the Board of Directors on a periodic basis and annually to the Board of Directors. For the consumer loans, the Company heavily relies on payment status for calibrating credit risk.

The ratings categories used for assessing credit risk in the commercial real estate, multi-family mortgage, construction, commercial, equipment financing, condominium association and other consumer loan and lease classes are defined as follows:

1 -4 Rating—Pass

Loan rating grades "1" through "4" are classified as "Pass," which indicates borrowers are performing in accordance with the terms of the loan and are less likely to result in loss due to the capacity of the borrower to pay and the adequacy of the value of assets pledged as collateral.

5 Rating—Other Assets Especially Mentioned ("OAEM")

Borrowers exhibit potential credit weaknesses or downward trends deserving management's attention. If not checked or corrected, these trends will weaken the Company's asset and position. While potentially weak, currently these borrowers are marginally acceptable; no loss of principal or interest is envisioned.

6 Rating—Substandard

Borrowers exhibit well defined weaknesses that jeopardize the orderly liquidation of debt. Substandard loans may be inadequately protected by the current net worth and paying capacity of the obligors or by the collateral pledged, if any. Normal repayment from the borrower is in jeopardy. Although no loss of principal is envisioned, there is a distinct possibility that a partial loss of interest and/or principal will occur if the deficiencies are not corrected. Collateral coverage may be inadequate to cover the principal obligation.

7 Rating—Doubtful

Borrowers exhibit well-defined weaknesses that jeopardize the orderly liquidation of debt with the added provision that the weaknesses make collection of the debt in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. Serious problems exist to the point where partial loss of principal is likely.

Table of Contents

BROOKLINE BANCORP, INC. AND SUBSIDIARIES

Notes to Unaudited Consolidated Financial Statements (Continued)

8 Rating—Definite Loss

Borrowers deemed incapable of repayment. Loans to such borrowers are considered uncollectible and of such little value that continuation as active assets of the Company is not warranted.

Assets rated as "OAEM," "substandard" or "doubtful" based on criteria established under banking regulations are collectively referred to as "criticized" assets.

Credit Quality Information

The following table presents the amortized cost basis of loans in each class by credit quality indicator and year of origination as of March 31, 2023.


	March 31, 2023
	2023		2022		2021		2020		2019		Prior		Revolving Loans		Revolving Loans Converted to Term Loans		Total
			(In Thousands)
Commercial Real Estate
Pass	$	193,343	$	645,464	$	785,001	$	400,924	$	478,600	$	1,329,857	$	70,395	$	9,684	$	3,913,268
OAEM	—		—		2,583		112		14,757		45,077		—		—		62,529
Substandard	—		—		—		—		—		10,879		—		—		10,879

Total	193,343		645,464		787,584		401,036		493,357		1,385,813		70,395		9,684		3,986,676
Multi-Family Mortgage
Pass	(2,261)		198,443		237,442		171,113		201,758		502,331		5,065		37,542		1,351,433
OAEM	—		—		—		—		1,340		1,513		—		—		2,853
Substandard	—		—		—		—		—		2,260		—		—		2,260

Total	(2,261)		198,443		237,442		171,113		203,098		506,104		5,065		37,542		1,356,546
Construction
Pass	9,140		150,953		67,113		14,436		16,810		3,818		(10,470)		—		251,800
OAEM	—		1,430		10,079		—		—		—		—		—		11,509
Substandard	—		—		—		—		1,543		2,340		—		—		3,883

Total	9,140		152,383		77,192		14,436		18,353		6,158		(10,470)		—		267,192

Table of Contents

BROOKLINE BANCORP, INC. AND SUBSIDIARIES

Notes to Unaudited Consolidated Financial Statements (Continued)

~~At and for the Nine Months Ended September 30, 2017 and 2016~~

~~Credit Quality Information~~

~~The following tables present the recorded investment in loans in each class as of September 30, 2017, by credit quality indicator.~~


																		March 31, 2023
	At September 30, 2017																	2023		2022		2021		2020		2019		Prior		Revolving Loans		Revolving Loans Converted to Term Loans		Total
	Commercial Real Estate		Multi- Family Mortgage		Construction		Commercial		Equipment Financing		Condominium Association		Other Consumer		Total					(In Thousands)
	(In Thousands)
Originated:
Loan rating:
Commercial																	Commercial
Pass	$	1,990,531	$	717,703	$	164,797	$	644,134	$	826,837	$	53,770	$	15,598	$	4,413,370	Pass	50,951		162,981		143,615		46,096		28,255		85,094		295,024		2,151		814,167
OAEM	5,177		—		—		8,638		748		—		—		14,563		OAEM	—		—		101		2,812		14,669		—		12,389		—		29,971
Substandard	6,460		792		860		24,128		5,729		—		29		37,998		Substandard	1,004		—		3,814		788		491		9		8,210		506		14,822
Doubtful	201		—		—		3,084		4,388		—		—		7,673		Doubtful	—		—		—		—		—		1		—		2		3
Total originated	2,002,369		718,495		165,657		679,984		837,702		53,770		15,627		4,473,604

Acquired:
Loan rating:
Total																	Total	51,955		162,981		147,530		49,696		43,415		85,104		315,623		2,659		858,963
Current-period gross writeoffs																	Current-period gross writeoffs	—		—		—		—		5		—		—		—		5
Equipment Financing																	Equipment Financing
Pass	105,302		25,120		—		7,037		4,800		—		110		142,369		Pass	107,408		431,735		260,488		168,898		126,556		117,050		14,588		1,384		1,228,107
OAEM	9,906		—		—		269		—		—		1		10,176		OAEM	—		3,501		2,842		973		371		9		—		—		7,696
Substandard	1,761		297		—		1,720		14		—		—		3,792		Substandard	—		877		1,957		1,358		2,580		3,153		—		—		9,925
Doubtful	102		—		—		—		—		—		—		102		Doubtful	—		—		—		—		—		14		—		—		14
Total acquired	117,071		25,417		—		9,026		4,814		—		111		156,439
Total																	Total	107,408		436,113		265,287		171,229		129,507		120,226		14,588		1,384		1,245,742
Current-period gross writeoffs																	Current-period gross writeoffs	—		120		188		—		96		431		—		—		835
Condominium Association																	Condominium Association
Pass																	Pass	28		5,353		7,668		8,262		5,463		12,489		2,913		216		42,392

Total loans	$	2,119,440	$	743,912	$	165,657	$	689,010	$	842,516	$	53,770	$	15,738	$	4,630,043
Substandard																	Substandard	—		—		—		—		—		52		—		—		52

Total																	Total	28		5,353		7,668		8,262		5,463		12,541		2,913		216		42,444
Other Consumer																	Other Consumer
Pass																	Pass	221		459		1,352		14		29		2,104		52,795		1		56,975

Total																	Total	221		459		1,352		14		29		2,104		52,795		1		56,975
Current-period gross writeoffs																	Current-period gross writeoffs	—		—		—		—		11		—		—		—		11
Total																	Total
Pass																	Pass	358,830		1,595,388		1,502,679		809,743		857,471		2,052,743		430,310		50,978		7,658,142
OAEM																	OAEM	—		4,931		15,605		3,897		31,137		46,599		12,389		—		114,558
Substandard																	Substandard	1,004		877		5,771		2,146		4,614		18,693		8,210		506		41,821
Doubtful																	Doubtful	—		—		—		—		—		15		—		2		17
Total																	Total	$	359,834	$	1,601,196	$	1,524,055	$	815,786	$	893,222	$	2,118,050	$	450,909	$	51,486	$	7,814,538

As of ~~September 30, 2017,~~March 31, 2023, there were no loans categorized as definite loss.

For residential mortgage and home equity loans, the borrowers' credit scores contribute as a reserve metric in the retail loss rate model.

Table of Contents

BROOKLINE BANCORP, INC. AND SUBSIDIARIES

Notes to Unaudited Consolidated Financial Statements (Continued)

~~At and for the Nine Months Ended September 30, 2017 and 2016~~

At September 30, 2017
Residential Mortgage Home Equity
(Dollars In Thousands)
Originated:
Loan-to-value ratio:

Less than 50% $ 151,791
23.3 % $ 149,477
41.9 %
50% - 69% 256,413
39.3 % 75,490
21.1 %
70% - 79% 160,117
24.5 % 61,081
17.1 %
80% and over 24,318
3.7 % 25,626
7.2 %
Data not available* 1,283
0.2 % 44
— %
Total originated 593,922
91.0 % 311,718
87.3 %

Acquired:

Loan-to-value ratio:

Less than 50% 17,102
2.6 % 27,383
7.8 %
50%—69% 19,734
3.0 % 14,852
4.1 %
70%—79% 12,020
1.8 % 1,372
0.4 %
80% and over 8,552
1.3 % 859
0.2 %
Data not available* 1,085
0.3 % 798
0.2 %
Total acquired 58,493
9.0 % 45,264
12.7 %

Total loans $ 652,415
100.0 % $ 356,982
100.0 %


	At March 31, 2023
	2023		2022		2021		2020		2019		Prior		Revolving Loans		Revolving Loans Converted to Term Loans		Total
			(In Thousands)
Residential
Credit Scores
Over 700	$	11,318	$	113,602	$	174,499	$	94,312	$	60,855	$	165,408	$	4,798	$	931	$	625,723
661 - 700	2,122		15,247		21,303		17,225		11,314		37,644		—		—		104,855
600 and below	682		6,111		3,734		5,226		2,817		16,574		—		—		35,144
Data not available*	6,438		75,482		31,422		27,984		27,494		152,212		—		—		321,032
Total	$	20,560	$	210,442	$	230,958	$	144,747	$	102,480	$	371,838	$	4,798	$	931	$	1,086,754
Home Equity
Credit Scores
Over 700	$	1,591	$	3,808	$	1,359	$	982	$	1,159	$	7,466	$	242,109	$	2,860	$	261,334
661 - 700	166		785		90		34		237		1,481		39,862		280		42,935
600 and below	155		88		86		47		91		342		8,062		740		9,611
Data not available*	—		60		288		—		—		1,059		25,110		5,276		31,793
Total	$	1,912	$	4,741	$	1,823	$	1,063	$	1,487	$	10,348	$	315,143	$	9,156	$	345,673

* Represents ~~in process general ledger accounts~~loans and leases for which data are not available.

~~Table of Contents~~

~~BROOKLINE BANCORP, INC. AND SUBSIDIARIES~~

~~Notes to Unaudited Consolidated Financial Statements (Continued)~~

~~At and for the Nine Months Ended September 30, 2017 and 2016~~

The following tables present the recorded investment in loans in each class as of December 31, ~~2016,~~2022, by credit quality indicator.

At December 31, 2016

Commercial
Real Estate

Multi-
Family
Mortgage
Construction Commercial
Equipment
Financing

Condominium
Association

Other
Consumer
Total
(In Thousands)
Originated:
Loan rating:
Pass $ 1,899,162
$ 700,046
$ 136,607
$ 583,940
$ 786,050
$ 60,122
$ 12,018
$ 4,177,945
OAEM 1,538
—
178
8,675
824
—
—
11,215
Substandard 6,288
1,404
—
28,595
4,848
—
12
41,147
Doubtful 266
—
—
75
1,980
—
—
2,321
Total originated 1,907,254
701,450
136,785
621,285
793,702
60,122
12,030
4,232,628

Acquired:
Loan rating:
Pass 131,850
29,153
214
10,312
6,158
—
128
177,815
OAEM 1,408
270
—
249
—
—
—
1,927
Substandard 9,768
313
—
3,017
—
—
—
13,098
Doubtful 102
—
—
563
—
—
—
665
Total acquired 143,128
29,736
214
14,141
6,158
—
128
193,505

Total loans $ 2,050,382
$ 731,186
$ 136,999
$ 635,426
$ 799,860
$ 60,122
$ 12,158
$ 4,426,133

~~As of December 31, 2016, there were no loans categorized as definite loss.~~


	December 31, 2022
	2022		2021		2020		2019		2018		Prior		Revolving Loans		Revolving Loans Converted to Term Loans		Total
	(In Thousands)
Commercial Real Estate
Pass	$	475,105	$	622,952	$	290,913	$	362,339	$	210,954	$	971,274	$	55,464	$	9,167	$	2,998,168
OAEM	—		2,600		112		14,805		2,841		25,875		—		—		46,233
Substandard	—		—		—		—		—		2,345		—		—		2,345

Total	475,105		625,552		291,025		377,144		213,795		999,494		55,464		9,167		3,046,746
Multi-Family Mortgage
Pass	162,139		226,502		132,893		114,109		142,271		324,415		4,823		36,662		1,143,814

Substandard	—		—		—		—		—		6,783		—		—		6,783

Total	162,139		226,502		132,893		114,109		142,271		331,198		4,823		36,662		1,150,597

Table of Contents

BROOKLINE BANCORP, INC. AND SUBSIDIARIES

Notes to Unaudited Consolidated Financial Statements (Continued)

~~At and for the Nine Months Ended September 30, 2017 and 2016~~


	December 31, 2022
	2022	2021	2020	2019	2018	Prior	Revolving Loans	Revolving Loans Converted to Term Loans	Total
	(In Thousands)
Construction
Pass	82,650	73,995	13,787	16,421	3,306	—	6,456	—	196,615
OAEM	842	8,641	—	—	—	—	—	—	9,483
Substandard	—	—	—	—	—	707	—	—	707

Total	83,492	82,636	13,787	16,421	3,306	707	6,456	—	206,805
Commercial
Pass	178,212	116,674	48,713	22,809	29,350	52,866	273,467	1,071	723,162
OAEM	—	109	—	14,821	—	—	2,187	—	17,117
Substandard	—	3,835	1,215	494	—	30	6,461	632	12,667
Doubtful	—	—	—	—	—	1	—	1	2
Total	178,212	120,618	49,928	38,124	29,350	52,897	282,115	1,704	752,948
Equipment Financing
Pass	443,323	282,398	185,007	140,931	76,595	60,980	13,236	1,301	1,203,771
OAEM	1,019	1,453	184	455	13	—	—	—	3,124
Substandard	608	784	1,514	2,597	2,503	1,669	—	—	9,675
Doubtful	—	—	—	—	2	13	—	—	15
Total	444,950	284,635	186,705	143,983	79,113	62,662	13,236	1,301	1,216,585
Condominium Association
Pass	5,821	7,743	8,810	5,858	1,603	12,227	4,823	23	46,908

Substandard	—	—	—	—	—	58	—	—	58

Total	5,821	7,743	8,810	5,858	1,603	12,285	4,823	23	46,966
Other Consumer
Pass	411	393	15	13	1,503	750	53,418	1	56,504

Substandard	—	—	—	—	—	—	1	—	1

Total	411	393	15	13	1,503	750	53,419	1	56,505
Total
Pass	1,347,661	1,330,657	680,138	662,480	465,582	1,422,512	411,687	48,225	6,368,942
OAEM	1,861	12,803	296	30,081	2,854	25,875	2,187	—	75,957
Substandard	608	4,619	2,729	3,091	2,503	11,592	6,462	632	32,236

At December 31, 2016
Residential Mortgage Home Equity
(Dollars In Thousands)
Originated:
Loan-to-value ratio:

Less than 50% $ 138,030
22.1 % $ 153,679
44.9 %
50%—69% 229,799
36.9 % 61,553
18.1 %
70%—79% 162,614
26.0 % 49,987
14.6 %
80% and over 21,859
3.5 % 23,317
6.8 %
Data not available* 3,128
0.5 % 825
0.2 %
Total originated 555,430
89.0 % 289,361
84.6 %

Acquired:

Loan-to-value ratio:

Less than 50% 17,809
2.9 % 32,334
9.4 %
50%—69% 24,027
3.8 % 15,059
4.4 %
70%—79% 14,030
2.2 % 3,069
0.9 %
80% and over 10,069
1.6 % 1,016
0.3 %
Data not available* 2,984
0.5 % 1,402
0.4 %
Total acquired 68,919
11.0 % 52,880
15.4 %

Total loans $ 624,349
100.0 % $ 342,241
100.0 %

* Represents in process general ledger accounts for which data are not available.

~~The following table presents information regarding foreclosed residential real estate property for the periods indicated:~~

At September 30, 2017 At December 31, 2016
(In Thousands)
Foreclosed residential real estate property held by the creditor $ —
$ 251
Recorded investment in mortgage loans collateralized by residential real estate property that are in the process of foreclosure 1,508
1,213

Table of Contents

BROOKLINE BANCORP, INC. AND SUBSIDIARIES

Notes to Unaudited Consolidated Financial Statements (Continued)

~~At and for the Nine Months Ended September 30, 2017 and 2016~~


	December 31, 2022
	2022		2021		2020		2019		2018		Prior		Revolving Loans		Revolving Loans Converted to Term Loans		Total
	(In Thousands)
Doubtful	—		—		—		—		2		14		—		1		17
Total	$	1,350,130	$	1,348,079	$	683,163	$	695,652	$	470,941	$	1,459,993	$	420,336	$	48,858	$	6,477,152

As of December 31, 2022, there were no loans categorized as definite loss.


	At December 31, 2022
	2022		2021		2020		2019		2018		Prior		Revolving Loans		Revolving Loans Converted to Term Loans		Total
	(In Thousands)
Residential
Credit Scores
Over 700	$	108,125	$	176,341	$	95,484	$	61,763	$	38,949	$	132,359	$	4,942	$	348	$	618,311
661 - 700	15,018		21,450		17,611		11,388		8,308		29,999		—		—		103,774
600 and below	6,133		3,754		5,275		2,833		2,264		14,688		—		—		34,947
Data not available*	28,097		6,661		712		3,316		—		48,796		—		—		87,582
Total	$	157,373	$	208,206	$	119,082	$	79,300	$	49,521	$	225,842	$	4,942	$	348	$	844,614
Home Equity
Credit Scores
Over 700	$	3,833	$	1,399	$	1,128	$	1,209	$	984	$	6,862	$	247,188	$	2,304	$	264,907
661 - 700	787		92		35		249		272		1,329		41,050		296		44,110
600 and below	89		87		48		93		—		360		8,744		595		10,016
Data not available*	6		6		—		—		—		1,029		2,279		269		3,589
Total	$	4,715	$	1,584	$	1,211	$	1,551	$	1,256	$	9,580	$	299,261	$	3,464	$	322,622

Age Analysis of Past Due Loans and Leases

The following ~~tables present~~table presents an age analysis of the ~~recorded investment~~amortized cost basis in ~~total~~ loans and leases as of ~~September 30, 2017 and December~~March 31, ~~2016.~~

At September 30, 2017
Past Due
Loans and
Leases Past
Due Greater
Than 90 Days
and Accruing

31-60
Days

61-90
Days

Greater
Than
90 Days
Total Current
Total Loans
and Leases

Nonaccrual
Loans and
Leases
(In Thousands)
Originated:
Commercial real estate loans:
Commercial real estate $ 726
$ 400
$ 1,006
$ 2,132
$ 2,000,237
$ 2,002,369
$ —
$ 2,915
Multi-family mortgage 4,019
919
—
4,938
713,557
718,495
—
792
Construction 3,021
—
860
3,881
161,776
165,657
—
860
Total commercial real estate loans 7,766
1,319
1,866
10,951
2,875,570
2,886,521
—
4,567
Commercial loans and leases:
Commercial 1,241
944
15,118
17,303
662,681
679,984
—
21,335
Equipment financing 1,625
900
3,611
6,136
831,566
837,702
46
9,858
Condominium association 317
38
—
355
53,415
53,770
—
—
Total commercial loans and leases 3,183
1,882
18,729
23,794
1,547,662
1,571,456
46
31,193
Consumer loans:
Residential mortgage 963
214
1,516
2,693
591,229
593,922
—
1,730
Home equity 1,046
1
126
1,173
310,545
311,718
1
402
Other consumer 226
26
15
267
15,360
15,627
—
29
Total consumer loans 2,235
241
1,657
4,133
917,134
921,267
1

2,161
Total originated loans and leases $ 13,184
$ 3,442
$ 22,252
$ 38,878
$ 5,340,366
$ 5,379,244
$ 47
$ 37,921
(Continued)

2023.

Table of Contents

BROOKLINE BANCORP, INC. AND SUBSIDIARIES

Notes to Unaudited Consolidated Financial Statements (Continued)

~~At and~~


	At March 31, 2023
	Past Due										Past Due Greater Than 90 Days and Accruing
	31-60 Days		61-90 Days		Greater Than 90 Days		Total		Current					Total Loans and Leases			Non-accrual		Non-accrual with No Related Allowance
	(In Thousands)
Commercial real estate loans:
Commercial real estate	$	2,477	$	1,062	$	994	$	4,533	$	3,982,143		$	3,986,676		$	661	$	4,589	$	—
Multi-family mortgage	—		—		—		—		1,356,546			1,356,546			—		—		—
Construction	—		—		2,217		2,217		264,975			267,192			—		3,883		3,883
Total commercial real estate loans	2,477		1,062		3,211		6,750		5,603,664			5,610,414			661		8,472		3,883
Commercial loans and leases:
Commercial	192		8		347		547		858,416			858,963			—		5,495		1,272
Equipment financing	4,611		2,393		4,963		11,967		1,233,775			1,245,742			56		9,908		102
Condominium association	—		—		—		—		42,444			42,444			—		51		—
Total commercial loans and leases	4,803		2,401		5,310		12,514		2,134,635			2,147,149			56		15,454		1,374
Consumer loans:
Residential mortgage	787		577		1,924		3,288		1,083,466			1,086,754			—		3,449		1,246
Home equity	201		150		451		802		344,871			345,673			4		1,079		296
Other consumer	—		—		5		5		56,970			56,975			5		—		—
Total consumer loans	988		727		2,380		4,095		1,485,307			1,489,402			9		4,528		1,542
Total loans and leases	$	8,268	$	4,190	$	10,901	$	23,359	$	9,223,606		$	9,246,965		$	726	$	28,454	$	6,799

The Company did not recognize any interest income on nonaccrual loans for the ~~Nine Months Ended September 30, 2017 and 2016~~

three months ended March 31, 2023.

At September 30, 2017
Past Due
Loans and
Leases Past
Due Greater
Than 90 Days
and Accruing

31-60
Days

61-90
Days

Greater
Than
90 Days
Total Current
Total Loans
and Leases

Nonaccrual
Loans and
Leases
(In Thousands)
Acquired:
Commercial real estate loans:
Commercial real estate $ 799
$ 147
$ 731
$ 1,677
$ 115,394
$ 117,071
$ 661
$ 136
Multi-family mortgage —
—
3
3
25,414
25,417
3
—
Total commercial real estate loans 799
147
734
1,680
140,808
142,488
664
136
Commercial loans and leases:
Commercial 5
21
1,198
1,224
7,802
9,026
167
1,032
Equipment financing —
—
14
14
4,800
4,814
14
—
Total commercial loans and leases 5
21
1,212
1,238
12,602
13,840
181
1,032
Consumer loans:
Residential mortgage 710
550
1,729
2,989
55,504
58,493
1,489
239
Home equity 557
74
269
900
44,364
45,264
142
645
Other consumer

—
—
—
111
111
—
—
Total consumer loans 1,267
624
1,998
3,889
99,979
103,868
1,631
884
Total acquired loans and leases $ 2,071
$ 792
$ 3,944
$ 6,807
$ 253,389
$ 260,196
$ 2,476
$ 2,052

Total loans and leases $ 15,255
$ 4,234
$ 26,196
$ 45,685
$ 5,593,755
$ 5,639,440
$ 2,523
$ 39,973

Table of Contents

BROOKLINE BANCORP, INC. AND SUBSIDIARIES

Notes to Unaudited Consolidated Financial Statements (Continued)

AtThe following tables present an age analysis of the recorded investment in originated and ~~for the Nine Months Ended September 30, 2017 and 2016~~

At December 31, 2016
Past Due
Loans and
Leases Past
Due Greater
Than 90 Days
and Accruing

31-60
Days

61-90
Days

Greater
Than
90 Days
Total Current
Total Loans
and Leases

Nonaccrual
Loans and
Leases
(In Thousands)
Originated:
Commercial real estate loans:
Commercial real estate $ 1,525
$ 2,075
$ 429
$ 4,029
$ 1,903,225
$ 1,907,254
$ 2
$ 5,035
Multi-family mortgage 2,296
—
291
2,587
698,863
701,450
—
1,404
Construction 547
—
—
547
136,238
136,785
—
—
Total commercial real estate loans 4,368
2,075
720
7,163
2,738,326
2,745,489
2
6,439
Commercial loans and leases:
Commercial 5,396
815
10,014
16,225
605,060
621,285
—
20,587
Equipment financing 2,983
1,444
5,341
9,768
783,934
793,702
—
6,758
Condominium association 266
—
—
266
59,856
60,122
—
—
Total commercial loans and leases 8,645
2,259
15,355
26,259
1,448,850
1,475,109
—
27,345
Consumer loans:
Residential mortgage 3,745
2,294
163
6,202
549,228
555,430
—
2,455
Home equity 25
219
5
249
289,112
289,361
3
128
Other consumer 549
87
16
652
17,519
18,171
—
149
Total consumer loans 4,319
2,600
184
7,103
855,859
862,962
3
2,732
Total originated loans and leases $ 17,332
$ 6,934
$ 16,259
$ 40,525
$ 5,043,035
$ 5,083,560
$ 5
$ 36,516
(Continued)

~~Table of Contents~~

~~BROOKLINE BANCORP, INC. AND SUBSIDIARIES~~

~~Notes to Unaudited Consolidated Financial Statements (Continued)~~

~~At and for the Nine Months Ended September 30, 2017 and 2016~~

At December 31, 2016
Past Due
Loans and
Leases Past
Due Greater
Than 90 Days
and Accruing

31-60
Days

61-90
Days

Greater
Than
90 Days
Total Current
Total Loans
and Leases

Nonaccrual
Loans and
Leases
(In Thousands)
Acquired:
Commercial real estate loans:
Commercial real estate $ 925
$ —
$ 4,011
$ 4,936
$ 138,192
$ 143,128
$ 3,786
$ 305
Multi-family mortgage —
—
—
—
29,736
29,736
—
—
Construction —
—
—
—
214
214
—
—
Total commercial real estate loans 925
—
4,011
4,936
168,142
173,078
3,786
305
Commercial loans and leases:
Commercial 306
—
2,651
2,957
11,184
14,141
264
2,387
Equipment financing —
—
—
—
6,158
6,158
—
—
Total commercial loans and leases 306
—
2,651
2,957
17,342
20,299
264
2,387
Consumer loans:
Residential mortgage —
318
2,865
3,183
65,736
68,919
2,820
46
Home equity 288
97
339
724
52,156
52,880
202
823
Other consumer —
1
—
1
127
128
—
—
Total consumer loans 288
416
3,204
3,908
118,019
121,927
3,022
869
Total acquired loans and leases $ 1,519
$ 416
$ 9,866
$ 11,801
$ 303,503
$ 315,304
$ 7,072
$ 3,561

Total loans and leases $ 18,851
$ 7,350
$ 26,125
$ 52,326
$ 5,346,538
$ 5,398,864
$ 7,077
$ 40,077

~~Table of Contents~~

~~BROOKLINE BANCORP, INC. AND SUBSIDIARIES~~

~~Notes to Unaudited Consolidated Financial Statements (Continued)~~

~~At and for the Nine Months Ended September 30, 2017 and 2016~~

~~Commercial Real Estate Loans—As of September 30, 2017, loans outstanding in the three classes within this segment expressed as a percentage of total~~acquired loans and leases ~~outstanding were~~ as ~~follows: commercial real estate loans -- 37.6%; multi-family mortgage loans -- 13.2%; and construction loans -- 2.9%.~~of December 31, 2022.

Loans in this portfolio that are on nonaccrual status and/or risk-rated "substandard" or worse are evaluated on an individual loan basis for impairment. For non-impaired commercial real estate loans, loss factors are applied to outstanding loans by risk rating for each of the three classes in the portfolio. The factors applied are based primarily on historic loan loss experience and an assessment of internal and external factors and other relevant information.


	At December 31, 2022
	Past Due										Loans and Leases Past Due Greater Than 90 Days and Accruing				Non-accrual with No Related Allowance
	31-60 Days		61-90 Days		Greater Than 90 Days		Total		Current					Total Loans and Leases					Non-accrual
	(In Thousands)

Commercial real estate loans:
Commercial real estate	$	2,495	$	199	$	408	$	3,102	$	3,043,644		$	3,046,746		$	—	$	607	$	262
Multi-family mortgage	—		180		—		180		1,150,417			1,150,597			—		—		—
Construction	707		—		—		707		206,098			206,805			—		707		707
Total commercial real estate loans	3,202		379		408		3,989		4,400,159			4,404,148			—		1,314		969
Commercial loans and leases:
Commercial	740		—		343		1,083		751,865			752,948			—		464		—
Equipment financing	5,103		1,764		6,205		13,072		1,203,513			1,216,585			28		9,653		399
Condominium association	2,072		—		—		2,072		44,894			46,966			—		58		—
Total commercial loans and leases	7,915		1,764		6,548		16,227		2,000,272			2,016,499			28		10,175		399
Consumer loans:
Residential mortgage	677		70		1,466		2,213		842,401			844,614			1		2,680		1,091
Home equity	443		—		155		598		322,024			322,622			4		723		—
Other consumer	1		5		2		8		56,497			56,505			—		2		—
Total consumer loans	1,121		75		1,623		2,819		1,220,922			1,223,741			5		3,405		1,091
Total loans and leases	$	12,238	$	2,218	$	8,579	$	23,035	$	7,621,353		$	7,644,388		$	33	$	14,894	$	2,459

~~Commercial Loans and Leases~~—As of September 30, 2017, loans and leases outstanding in the three classes within this segment expressed as a percent of total loans and leases outstanding were as follows: commercial loans and leases -- 12.2%; equipment financing loans -- 14.9%; and loans to condominium associations -- 1.0%.

Loans and leases in this portfolio that are on nonaccrual status and/or risk-rated "substandard" or worse are evaluated on an individual basis for impairment. For non-impaired commercial loans and leases, loss factors are applied to outstanding loans by risk rating for each of the three classes in the portfolio.

~~Consumer Loans~~—As of September 30, 2017, loans outstanding within the four classes within this segment expressed as a percent of total loans and leases outstanding were as follows: residential mortgage loans -- 11.6%, home equity loans -- 6.3%, and other consumer loans -- 0.3%.

Significant risk characteristics related to the residential mortgage and home equity loan portfolios are the geographic concentration of the properties financed within selected communities in the greater Boston and Providence metropolitan areas. The payment status and loan-to-value ratio are the primary credit quality indicator used for residential mortgage loans and home equity loans. Generally, loans are not made when the loan-to-value ratio exceeds 80% unless private mortgage insurance is obtained and/or there is a financially strong guarantor. Consumer loans that become 90 days or more past due, or are placed on nonaccrual.

Impaired Loans and Leases

A loan is considered to be impaired when, based on current information and events, it is probable that the Company will be unable to collect all amounts due (both interest and principal) according to the contractual terms of the loan agreement. The loans and leases risk-rated "substandard" or worse are considered impaired. The Company has also defined the population of impaired loans to include nonaccrual loans and ~~troubled debt restructured ("TDR")~~modified loans.

~~When~~ Impaired loans and leases which do not share similar risk characteristics with other loans are individually evaluated for credit losses. Specific reserves are established for loans and leases with deterioration in the ~~ultimate collectability~~present value of expected future cash flows or, in the ~~total principal~~case of ~~an impaired loan or lease is~~collateral-dependent loans and leases, any increase in doubt and the loan is on nonaccrual status, all payments are applied to principal, under the cost recovery method. When the ultimate collectability of the total principal of an impaired loan or lease is not in doubt and the loan or lease ~~is on nonaccrual status, contractual interest is credited to interest income when received, under~~amortized cost basis over the ~~cash basis method.~~

~~The following tables include~~fair value of the ~~recorded investment and unpaid principal balances of impaired~~underlying collateral discounted for estimated selling costs. In contrast, the loans and leases ~~with the related allowance amount, if applicable, for the originated~~which share similar risk characteristics and ~~acquired loan and lease portfolios at the dates indicated. Also presented~~ are ~~the average recorded investments~~not included in the ~~impaired loans and leases and the related amount of interest recognized during the period that the impaired loans were impaired.~~

individually evaluated population are collectively evaluated for credit losses.

Table of Contents

BROOKLINE BANCORP, INC. AND SUBSIDIARIES

Notes to Unaudited Consolidated Financial Statements (Continued)

AtThe following tables present information regarding individually evaluated and collectively evaluated allowance for loan and lease losses for credit losses on loans and leases at the ~~Nine Months Ended September 30, 2017 and 2016~~

dates indicated.


	At March 31, 2023
	Commercial Real Estate		Commercial		Consumer		Total
	(In Thousands)
Allowance for Loan and Lease Losses:

Individually evaluated	$	884	$	9,328	$	49	$	10,261
Collectively evaluated	81,808		23,433		5,363		110,604
Total	$	82,692	$	32,761	$	5,412	$	120,865









Loans and Leases:

Individually evaluated	$	18,241	$	16,736	$	4,302	$	39,279
Collectively evaluated	5,592,173		2,130,413		1,485,100		9,207,686
Total	$	5,610,414	$	2,147,149	$	1,489,402	$	9,246,965


	At December 31, 2022
	Commercial Real Estate		Commercial		Consumer		Total
	(In Thousands)
Allowance for Loan and Lease Losses:

Individually evaluated	$	62	$	2,982	$	68	$	3,112
Collectively evaluated	68,092		23,622		3,656		95,370
Total loans and leases	$	68,154	$	26,604	$	3,724	$	98,482










Loans and Leases:
Individually evaluated	$	11,039	$	14,346	$	3,863	$	29,248
Collectively evaluated	4,393,109		2,002,153		1,219,878		7,615,140








Total loans and leases	$	4,404,148	$	2,016,499	$	1,223,741	$	7,644,388

At September 30, 2017 At December 31, 2016

Recorded
Investment ₍₁₎
Unpaid
Principal
Balance Related
Allowance
Recorded
Investment ₍₂₎
Unpaid
Principal
Balance Related
Allowance
(In Thousands)
Originated:
With no related allowance recorded:
Commercial real estate $ 9,620
$ 9,612
$ —
$ 9,113
$ 9,104
$ —
Commercial 24,749
24,737
—
39,269
39,210
—
Consumer 3,545
3,536
—
4,823
4,815
—
Total originated with no related allowance recorded 37,914
37,885
—
53,205
53,129
—
With an allowance recorded:
Commercial real estate 3,061
3,061
1
3,984
3,984
28
Commercial 17,993
17,946
7,488
605
605
97
Total originated with an allowance recorded 21,054
21,007
7,489
4,589
4,589
125
Total originated impaired loans and leases 58,968
58,892
7,489
57,794
57,718
125

Acquired:
With no related allowance recorded:
Commercial real estate 2,112
2,112
—
10,400
10,400
—
Commercial 2,042
2,042
—
3,948
3,948
—
Consumer 4,807
4,807
—
6,384
6,399
—
Total acquired with no related allowance recorded 8,961
8,961
—
20,732
20,747
—
With an allowance recorded:
Consumer 171
171
21
253
253
27
Total acquired with an allowance recorded 171
171
21
253
253
27
Total acquired impaired loans and leases 9,132
9,132
21
20,985
21,000
27

Total impaired loans and leases $ 68,100
$ 68,024
$ 7,510
$ 78,779
$ 78,718
$ 152

~~(1) Includes originated and acquired nonaccrual loans of $37.5 million and $2.1 million, respectively as of September 30, 2017.~~

~~(2) Includes originated and acquired nonaccrual loans of $34.1 million and $3.6 million, respectively as of December 31, 2016.~~

Table of Contents

BROOKLINE BANCORP, INC. AND SUBSIDIARIES

Notes to Unaudited Consolidated Financial Statements (Continued)

AtLoan Modifications

In January 2023, the Company adopted ASU 2022-02, “Financial Instruments - Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures” (“ASU 2022-02”), which eliminated the accounting guidance for troubled debt restructurings (“TDRs”) while enhancing disclosure requirements for certain loan refinancing and restructurings by creditors when a borrower is experiencing financial difficulty. This guidance was applied on a prospective basis. Upon adoption of this guidance, the ~~Nine Months Ended September 30, 2017 and 2016~~

Three Months Ended
September 30, 2017 September 30, 2016
Average
Recorded
Investment Interest
Income
Recognized Average
Recorded
Investment Interest
Income
Recognized
(In Thousands)
Originated:
With no related allowance recorded:
Commercial real estate $ 9,841
$ 83
$ 6,636
$ 49
Commercial 26,329
173
21,474
147
Consumer 3,559
14
3,480
18
Total originated with no related allowance recorded 39,729
270
31,590
214
With an allowance recorded:
Commercial real estate 3,061
38
4,549
48
Commercial 18,210
—
14,390
3
Consumer —
—
248
—
Total originated with an allowance recorded 21,271
38
19,187
51
Total originated impaired loans and leases 61,000
308
50,777
265

Acquired:
With no related allowance recorded:
Commercial real estate 2,116
8
9,952
67
Commercial 2,218
8
4,127
29
Consumer 4,837
18
8,475
16
Total acquired with no related allowance recorded 9,171
34
22,554
112
With an allowance recorded:
Commercial real estate —
—
—
—
Commercial —
—
486
—
Consumer 171
1
423
2
Total acquired with an allowance recorded 171
1
909
2
Total acquired impaired loans and leases 9,342
35
23,463
114

Total impaired loans and leases $ 70,342
$ 343
$ 74,240
$ 379

~~Table of Contents~~

~~BROOKLINE BANCORP, INC. AND SUBSIDIARIES~~

~~Notes~~Company estimates the reserve for modifications to ~~Unaudited Consolidated Financial Statements (Continued)~~

~~At and~~borrowers experiencing financial difficulty in a manner similar to the process for ~~the Nine Months Ended September 30, 2017 and 2016~~

Nine Months Ended
September 30, 2017 September 30, 2016
Average
Recorded
Investment Interest
Income
Recognized Average
Recorded
Investment Interest
Income
Recognized
(In Thousands)
Originated:
With no related allowance recorded:
Commercial real estate $ 10,200
$ 205
$ 5,655
$ 119
Commercial 24,206
522
16,602
412
Consumer 4,712
44
3,865
55
Total originated with no related allowance recorded 39,118
771
26,122
586
With an allowance recorded:
Commercial real estate 3,377
124
4,957
146
Commercial 20,771
1
13,017
5
Consumer —
—
165
—
Total originated with an allowance recorded 24,148
125
18,139
151
Total originated impaired loans and leases 63,266
896
44,261
737

Acquired:
With no related allowance recorded:
Commercial real estate 5,009
54
8,341
126
Commercial 2,615
26
4,254
66
Consumer 5,551
52
7,795
51
Total acquired with no related allowance recorded 13,175
132
20,390
243
With an allowance recorded:
Commercial real estate —
—
1,458
—
Commercial —
—
486
—
Consumer 169
3
490
6
Total acquired with an allowance recorded 169
3
2,434
6
Total acquired impaired loans and leases 13,344
135
22,824
249

Total impaired loans and leases $ 76,610
$ 1,031
$ 67,085
$ 986

~~Table of Contents~~

~~BROOKLINE BANCORP, INC. AND SUBSIDIARIES~~

~~Notes to Unaudited Consolidated Financial Statements (Continued)~~

~~At and for the Nine Months Ended September 30, 2017 and 2016~~

non-modified loans.

The following ~~tables present information regarding impaired and non-impaired~~table presents the amortized cost basis of loan modifications made to borrowers experiencing financial difficulty during the quarter ended March 31, 2023.The loans ~~and leases at~~presented in the ~~dates indicated:~~following table relate to two customer relationships.


	March 31, 2023
	Number of Loans	Amortized Cost		% of Total Class of Loans and Leases		Financial Effect
	(In thousands)
Maturity Extension

C&I	17	$	6,123	0.41	%	All 17 loans were given 6-month maturity extensions and restructured payment plans to assist borrowers. The financial effect was deemed "de minimis."













Total	17	$	6,123	0.41	%

At September 30, 2017
Commercial Real Estate Commercial Consumer Total
(In Thousands)
Allowance for Loan and Lease Losses:
Originated:
Individually evaluated for impairment $ 1
$ 7,488
$ —
$ 7,489
Collectively evaluated for impairment 28,058
23,499
5,364
56,921
Total originated loans and leases 28,059
30,987
5,364
64,410

Acquired:
Individually evaluated for impairment —
—
21
21
Collectively evaluated for impairment 156
14
22
192
Acquired with deteriorated credit quality 653
74
63
790
Total acquired loans and leases 809
88
106
1,003

Total allowance for loan and lease losses $ 28,868
$ 31,075
$ 5,470
$ 65,413

Loans and Leases:
Originated:
Individually evaluated for impairment $ 12,677
$ 37,545
$ 3,320
$ 53,542
Collectively evaluated for impairment 2,873,844
1,533,911
917,947
5,325,702
Total originated loans and leases 2,886,521
1,571,456
921,267
5,379,244

Acquired:
Individually evaluated for impairment —
1,522
1,912
3,434
Collectively evaluated for impairment 36,283
6,641
60,472
103,396
Acquired with deteriorated credit quality ⁽¹⁾
106,205
5,677
41,484
153,366
Total acquired loans and leases 142,488
13,840
103,868
260,196

Total loans and leases $ 3,029,009
$ 1,585,296
$ 1,025,135
$ 5,639,440

~~(1) Includes impaired loans~~The following table presents the aging analysis of ~~$5.3 million as of September 30, 2017.~~loan modifications made to borrowers experiencing financial difficulty during the quarter ended March 31, 2023.


	March 31, 2023
	Current		30-60 Days Past Due	61-90 Days Past Due	90+ Days Past Due	Modified	Paid Off	Charged Off
	(In thousands)
Total Modifications	$	6,123	—	—	—	—	—	—

~~Table of Contents~~

~~BROOKLINE BANCORP, INC. AND SUBSIDIARIES~~

~~Notes to Unaudited Consolidated Financial Statements (Continued)~~

~~At and for the Nine Months Ended September 30, 2017 and 2016~~

At December 31, 2016
Commercial Real Estate Commercial Consumer Total
(In Thousands)
Allowance for Loan and Lease Losses:
Originated:
Individually evaluated for impairment $ 28
$ 97
$ —
$ 125
Collectively evaluated for impairment 26,830
20,682
4,776
52,288
Total originated loans and leases 26,858
20,779
4,776
52,413

Acquired:
Individually evaluated for impairment —
—
27
27
Collectively evaluated for impairment 221
13
34
268
Acquired with deteriorated credit quality 566
114
278
958
Total acquired loans and leases 787
127
339
1,253

Total allowance for loan and lease losses $ 27,645
$ 20,906
$ 5,115
$ 53,666

Loans and Leases:
Originated:
Individually evaluated for impairment $ 13,097
$ 37,637
$ 4,711
$ 55,445
Collectively evaluated for impairment 2,732,392
1,437,472
858,251
5,028,115
Total originated loans and leases 2,745,489
1,475,109
862,962
5,083,560

Acquired:
Individually evaluated for impairment 690
3,047
2,028
5,765
Collectively evaluated for impairment 47,599
10,863
70,115
128,577
Acquired with deteriorated credit quality ⁽¹⁾
124,789
6,389
49,784
180,962
Total acquired loans and leases 173,078
20,299
121,927
315,304

Total loans and leases $ 2,918,567
$ 1,495,408
$ 984,889
$ 5,398,864

~~(1) Includes impaired loans of $14.6 million as of December 31, 2016.~~

~~Table of Contents~~

~~BROOKLINE BANCORP, INC. AND SUBSIDIARIES~~

~~Notes to Unaudited Consolidated Financial Statements (Continued)~~

~~At and for the Nine Months Ended September 30, 2017 and 2016~~

~~Troubled Debt Restructured Loans and Leases~~

A specific valuation allowance for losses on troubled debt restructured loans is determined by comparing the net carrying amount of the troubled debt restructured loan with the restructured loan's cash flows discounted at the original effective rate.

The following table sets forth information regarding troubled debt restructured loans and leases at the dates indicated:


	At December 31, 2022
	(In Thousands)
Troubled debt restructurings:
On accrual	$	16,385
On nonaccrual	3,527
Total troubled debt restructurings	$	19,912

At September 30, 2017
At December 31, 2016
(In Thousands)
Troubled debt restructurings:
On accrual $ 14,024
$ 13,883
On nonaccrual 15,290
11,919
Total troubled debt restructurings $ 29,314
$ 25,802

Total troubled debt restructuring loans and leases ~~increased by $3.5 million to $29.3 million at September 30, 2017 from~~

~~$25.8 million~~ at December 31, ~~2016, primarily driven by the restructuring~~2022 were $19.9 million.

Table of ~~six commercial loans, offset by the repayment of other troubled debt restructured loans.~~Contents

BROOKLINE BANCORP, INC. AND SUBSIDIARIES

Notes to Unaudited Consolidated Financial Statements (Continued)

The ~~recorded investment~~amortized cost basis in ~~troubled debt restructurings~~TDR loans and the associated specific ~~allowances~~credit losses for ~~loan and lease losses, in~~ the ~~originated and acquired~~ loan and lease portfolios, that were modified during the periods indicated, are as follows.

At and for the Three Months Ended September 30, 2017
Recorded Investment
Specific
Allowance for
Loan and
Lease Losses

Defaulted ⁽¹⁾

Number of
Loans/
Leases

At
Modification

At End of
Period

Nonaccrual
Loans and
Leases

Additional
Commitment

Number of
Loans/
Leases

Recorded
Investment
(Dollars in Thousands)
Originated:
Commercial 1
$ 350
$ 350
$ 152
$ 350
$ —
—
$ —
Equipment financing 5
817
804
—
804
—
—
—
Total originated 6
$ 1,167
$ 1,154
$ 152
$ 1,154
$ —
—
$ —


	At and for the Three Months Ended March 31, 2022
		Amortized Cost				Specific Allowance for Credit Losses				Defaulted (1)
	Number of Loans/ Leases	At Modification		At End of Period				Nonaccrual Loans and Leases		Number of Loans/ Leases	Amortized Cost
	(Dollars in Thousands)





Equipment financing	12	$	601	$	601	$	—	$	407	2	$	78


Total loans and leases	12	$	601	$	601	$	—	$	407	2	$	78

(1) Includes loans and leases that have been modified within the past twelve months and subsequently had payment defaults during the period indicated.

~~There were no acquired loans and leases that met the definition of a troubled debt restructured during the three months ended September 30, 2017.~~

~~Table of Contents~~

~~BROOKLINE BANCORP, INC. AND SUBSIDIARIES~~

~~Notes to Unaudited Consolidated Financial Statements (Continued)~~

~~At and for the Nine Months Ended September 30, 2017 and 2016~~

At and for the Three Months Ended September 30, 2016
Recorded Investment
Specific
Allowance for
Loan and
Lease Losses

Defaulted ⁽¹⁾

Number of
Loans/
Leases

At
Modification

At End of
Period

Nonaccrual
Loans and
Leases

Additional
Commitment

Number of
Loans/
Leases

Recorded
Investment
(Dollars in Thousands)
Originated:
Commercial 2
$ 812
$ 812
$ 220
$ 473
$ —
1
$ 348
Equipment financing 1
433
433
—
433
—
2
353
Total originated 3
1,245
1,245
220
906
—
3
701

Acquired:
Home equity 4
323
323
20
146
—
—
—
Total acquired 4
323
323
20
146
—
—
—

Total loans and leases 7
$ 1,568
$ 1,568
$ 240
$ 1,052
$ —
3
$ 701

~~(1) Includes loans and leases that have been modified within the past twelve months and subsequently had payment defaults during the period indicated.~~

At and for the Nine Months Ended September 30, 2017
Recorded Investment
Specific
Allowance for
Loan and
Lease Losses

Defaulted ⁽¹⁾

Number of
Loans/
Leases

At
Modification

At End of
Period

Nonaccrual
Loans and
Leases

Additional
Commitment

Number of
Loans/
Leases

Recorded
Investment
(Dollars in Thousands)
Originated:
Commercial real estate 1
$ 190
$ 189
$ —
$ —
$ —
—
$ —
Commercial 10
7,861
6,793
2,520
5,111
—
2
3,431
Equipment financing 14
2,401
2,321
—
2,136
—
—
—
Total originated 25
$ 10,452
$ 9,303
$ 2,520
$ 7,247
$ —
2
$ 3,431

~~There were no acquired loans and leases that met the definition of a troubled debt restructured during the nine months ended September 30, 2017.~~

~~Table of Contents~~

~~BROOKLINE BANCORP, INC. AND SUBSIDIARIES~~

~~Notes to Unaudited Consolidated Financial Statements (Continued)~~

~~At and for the Nine Months Ended September 30, 2017 and 2016~~

At and for the Nine Months Ended September 30, 2016
Recorded Investment
Specific
Allowance for
Loan and
Lease Losses

Defaulted ⁽¹⁾

Number of
Loans/
Leases

At
Modification

At End of
Period

Nonaccrual
Loans and
Leases

Additional
Commitment

Number of
Loans/
Leases

Recorded
Investment
(Dollars in Thousands)
Originated:
Commercial real estate 2
$ 1,155
$ 1,127
$ —
$ 1,127
$ —
—
$ —
Commercial 22
9,701
9,504
3,478
9,136
—
2
376
Equipment financing 3
797
786
—
786
—
2
353
Total originated 27
11,653
11,417
3,478
11,049
—
4
729

Acquired:
Commercial —
—
—
—
—
—
2
696
Residential mortgage 5
374
372
20
146
—
—
—
Total acquired 5
374
372
20
146
—
2
696

Total loans and leases 32
$ 12,027
$ 11,789
$ 3,498
$ 11,195
$ —
6
$ 1,425

The following table sets forth the Company's end-of-period ~~balances~~amortized cost basis for troubled debt restructurings that were modified during the periods indicated, by type of modification.

Three Months Ended September 30, Nine Months Ended September 30,
2017 2016 2017 2016
(In Thousands)
Loans with one modification:
Extended maturity $ —
$ 528
$ 4,463
$ 604
Adjusted principal —
—
19
410
Interest only 350
—
350
2,346
Combination maturity, principal, interest rate 804
1,040
2,253
8,201
Total loans with one modification 1,154
1,568
7,085
11,561

Loans with more than one modification:
Extended maturity —
—
1,870
228
Combination maturity, principal, interest rate —
—
348
—
Total loans with more than one modification —
—
2,218
228

Total loans with modifications $ 1,154
$ 1,568
$ 9,303
$ 11,789


	Three Months Ended March 31,
	2022
	(In Thousands)
Loans with one modification:
Extended maturity	$	311



Combination maturity, principal, interest rate	290










Total loans with modifications	$	601

The ~~troubled debt restructuring~~TDR loans and leases that were modified for the nine months ended September 30, 2017 and 2016 were $9.3 million and $11.8 million, respectively. The decrease in troubled debt restructuring loans and leases that were modified for the nine months ended September 30, 2017 was primarily due to the decrease in the modification of loans and leases secured by taxi medallions.

~~There was $2.2 million in troubled debt restructuring loans and leases with more than one modification during the nine months ended September 30, 2017 and none during the~~ three months ended ~~September 30, 2017.~~

~~The net charge-offs of the performing and nonperforming troubled debt restructuring loans and leases for the three and nine months ended September 30, 2017~~March 31, 2022 were $0.6 ~~million and $2.6 million, respectively, driven by the charge-off of five~~million.

~~Table of Contents~~

~~BROOKLINE BANCORP, INC. AND SUBSIDIARIES~~

~~Notes to Unaudited Consolidated Financial Statements (Continued)~~

~~At and for the Nine Months Ended September 30, 2017 and 2016~~

~~commercial loans secured by taxi medallions.~~ The were no net charge-offs for performing and nonperforming troubled debt restructuring loans and leases for the three ~~and nine~~ months ended ~~September 30, 2016 were $28.0 thousand and $110.0 thousand, respectively.~~March 31, 2022.

~~As of September 30, 2017 and 2016, there were no~~The commitments to lend funds to debtors owing receivables whose terms had been modified in ~~troubled debt restructurings.~~TDRs as of March 31, 2022 were $1.0 million.

(6) Goodwill and Other Intangible Assets

The following table sets forth the carrying value of goodwill and other intangible assets at the dates indicated:


	At March 31, 2023		At December 31, 2022
	(In Thousands)
Goodwill	$	160,427	$	160,427
Additions	80,795		—

Balance at end of period	241,222		160,427
Other intangible assets:
Core deposits	28,991		692
Trade name	1,089		1,089

Total other intangible assets	30,080		1,781
Total goodwill and other intangible assets	$	271,302	$	162,208

Table of Contents

BROOKLINE BANCORP, INC. AND SUBSIDIARIES

Notes to Unaudited Consolidated Financial Statements (Continued)

At September 30, 2017 At December 31, 2016
(In Thousands)
Goodwill $ 137,890
$ 137,890
Other intangible assets:
Core deposits 5,474
7,044
Trade name 1,089
1,089
Total other intangible assets 6,563
8,133
Total goodwill and other intangible assets $ 144,453
$ 146,023
The addition of goodwill and the increase in core deposit intangibles, at March 31, 2023 are due to the excess of the purchase paid over the fair value of the net assets acquired from the PCSB acquisition.

At December 31, 2013, the Company concluded that the BankRI name would continue to be utilized in its marketing strategies; therefore, the trade name with carrying value of $1.1 million, has an indefinite life and ceased to amortize.

The weighted-average amortization period for the core deposit intangible is ~~8.1~~5.97 years.

The estimated aggregate future amortization expense (in thousands) for other intangible assets for each of the next five years and thereafter is as follows:


Remainder of 2023	$	5,863
Year ending:
2024	6,636
2025	5,507
2026	4,398
2027	3,329
2028	2,177
Thereafter	1,081
Total	$	28,991

Remainder of 2017 $ 519
Year ending:
2018 1,669
2019 1,295
2020 944
2021 601
2022 299
Thereafter 147
Total $ 5,474

(7) Accumulated Other Comprehensive Income (Loss)

For the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2023 and ~~2016,~~2022, the Company’s accumulated other comprehensive income (loss) includes the following ~~two~~three components: (i) unrealized holding gains (losses) on investment securities available-for-sale; (ii) change in the fair value of cash flow hedges; and ~~(ii)~~(iii) adjustment of accumulated obligation for postretirement benefits.

~~Table of Contents~~

~~BROOKLINE BANCORP, INC. AND SUBSIDIARIES~~

~~Notes to Unaudited Consolidated Financial Statements (Continued)~~

~~At and for the Nine Months Ended September 30, 2017 and 2016~~

Changes in accumulated other comprehensive income (loss) by component, net of tax, were as follows for the periods indicated:


	Three Months Ended March 31, 2023
	Investment Securities Available-for-Sale		Net Change in Fair Value of Cash Flow Hedges		Postretirement Benefits		Accumulated Other Comprehensive Income (Loss)
	(In Thousands)
Balance at December 31, 2022	$	(60,192)	$	(2,243)	$	488	$	(61,947)
Other comprehensive income (loss)	7,911		946		—		8,857

Reclassification adjustment for (income) expense recognized in earnings	—		402		—		402
Balance at March 31, 2023	$	(52,281)	$	(895)	$	488	$	(52,688)


	Three Months Ended March 31, 2022
	Investment Securities Available-for-Sale		Net Change in Fair Value of Cash Flow Hedges		Postretirement Benefits		Accumulated Other Comprehensive Income (Loss)
	(In Thousands)
Balance at December 31, 2021	$	(183)	$	37	$	36	$	(110)
Other comprehensive income (loss)	(29,267)		57		—		(29,210)
Reclassification adjustment for (income) expense recognized in earnings	—		(2)		—		(2)
Balance at March 31, 2022	$	(29,450)	$	92	$	36	$	(29,322)

Three Months Ended September 30, 2017

Investment
Securities
Available-for-Sale

Postretirement
Benefits

Accumulated Other
Comprehensive
Loss
(In Thousands)
Balance at June 30, 2017 $ (2,570 ) $ 395
$ (2,175 )
Other comprehensive income 282
—
282
Balance at September 30, 2017 $ (2,288 ) $ 395
$ (1,893 )

Table of Contents

BROOKLINE BANCORP, INC. AND SUBSIDIARIES

Notes to Unaudited Consolidated Financial Statements (Continued)

Three Months Ended September 30, 2016

Investment
Securities
Available-for-Sale

Postretirement
Benefits

Accumulated Other
Comprehensive
Loss
(In Thousands)
Balance at June 30, 2016 $ 5,618
$ 351
$ 5,969
Other comprehensive loss (1,073 ) —
(1,073 )
Balance at September 30, 2016 $ 4,545
$ 351
$ 4,896

Nine Months Ended September 30, 2017

Investment
Securities
Available-for-Sale

Postretirement
Benefits

Accumulated Other
Comprehensive
Loss
(In Thousands)
Balance at December 31, 2016 $ (4,213 ) $ 395
$ (3,818 )
Other comprehensive income 1,925
—
1,925
Balance at September 30, 2017 $ (2,288 ) $ 395
$ (1,893 )

Nine Months Ended September 30, 2016

Investment
Securities
Available-for-Sale

Postretirement
Benefits

Accumulated Other
Comprehensive
Loss
(In Thousands)
Balance at December 31, 2015 $ (2,827 ) $ 351
$ (2,476 )
Other comprehensive income

7,372
—
7,372
Balance at September 30, 2016 $ 4,545
$ 351
$ 4,896

~~The Company did not reclassify any amounts out of accumulated other comprehensive income (loss) for the three and nine months ended September 30, 2017 and 2016.~~

(8) Derivatives and Hedging Activities

The Company ~~utilizes~~executes loan level ~~derivatives which consist of interest-rate~~derivative products such as interest rate swap agreements with commercial banking customers to aid them in managing their interest rate risk. The interest rate swap contracts ~~(swaps, caps and floors), and~~allow the commercial banking customers to convert floating rate loan payments to fixed rate loan payments. The Company concurrently enters into offsetting swaps with a third party financial institution, effectively minimizing its net risk ~~participation~~exposure resulting from such transactions. The third party financial institution exchanges the customer's fixed rate loan payments for floating rate loan payments. As the interest rate swap agreements ~~as part of~~associated with this program do not meet hedge accounting requirements, changes in the ~~Company's interest-rate risk management strategy for certain assets and liabilities and not for speculative purposes.~~fair value are recognized directly in earnings. Based on the Company's intended use for the loan level derivatives at inception, the Company designates the derivative as either an economic hedge of an asset or liability, or a hedging instrument subject to the hedge accounting provisions of FASB ASC Topic 815, "Derivatives and Hedging".

~~Interest-rate swap, cap and floor agreements are entered into as hedges against future interest-rate fluctuations on specifically identified assets or liabilities.~~ The Company ~~did not have derivative fair value hedges or derivative~~believes using interest rate derivatives adds stability to interest income and expense and allows the Company to manage its exposure to interest rate movements. The Company enters into interest rate swaps as part of its interest rate risk management strategy. These interest rate swaps are designated as cash flow hedges asand involve the receipt of ~~September 30, 2017 or December 31, 2016.~~

~~Table of Contents~~

~~BROOKLINE BANCORP, INC. AND SUBSIDIARIES~~

~~Notes to Unaudited Consolidated Financial Statements (Continued)~~

~~At and~~variable rate amounts from a counterparty in exchange for the ~~Nine Months Ended September 30, 2017 and 2016~~

~~Derivatives not designated as hedges are not speculative but rather result from a service the~~ Company provides to certain customers for a fee. The Company executes loan level derivative products such as interest-rate swap agreements with commercial banking customers to aid them in managing their interest-rate risk. The interest-rate swap contracts allow the commercial banking customers to convert floating-rate loan payments to fixed-rate loanmaking fixed payments. The Company ~~concurrently~~ enters into ~~offsetting~~interest rate swaps ~~with a third party financial institution, effectively minimizing its net~~as hedging instruments against the interest rate risk ~~exposure resulting from such transactions. The third-party financial institution exchanges the customer's fixed-rate loan payments for floating-rate loan payments. As the interest-rate swap agreements~~ associated with ~~this program do not meet hedge accounting requirements, changes~~the Company's FHLB borrowings and loan portfolio. For derivative instruments that are designated and qualify as cash flow hedging instruments, the effective portion of the gains or losses is reported as a component of other comprehensive income ("OCI"), and is reclassified into earnings in the ~~fair value are recognized directly in~~period that the hedged forecasted transaction affects earnings.

The following table reflects the Company's derivative positions as of the date indicated below for interest rate derivatives which qualify as cash flow hedges for accounts purposes.


	At March 31, 2023
	Notional Amount		Average Maturity	Weighted Average Rate				Fair Value
				Current Rate Paid		Received Fixed Swap Rate
	(in thousands)		(in years)					(in thousands)
Interest rate swaps on loans	$	225,000	3.65	4.85	%	3.39	%	$	(1,430)


	At December 31, 2022
	Notional Amount		Average Maturity	Weighted Average Rate				Fair Value
				Current Rate Paid		Received Fixed Swap Rate
	(in thousands)		(in years)					(in thousands)
Interest rate swaps on loans	$	150,000	3.77	4.11	%	3.26	%	$	(3,030)

The Company utilizes risk participation agreements with other banks participating in commercial loan arrangements. Participating banks guarantee the performance on borrower-related interest rate swap contracts. Risk participation agreements are derivative financial instruments and are recorded at fair value. These derivatives are not designated as hedges and therefore, changes in fair value are recorded directly through earnings at each reporting period.

Under a risk participation-out agreement, a derivative asset, the Company participates out a portion of the credit risk associated with the interest rate swap position executed with the commercial borrower, for a fee paid to the participating bank. Under a risk participation-in agreement, a derivative liability, the Company assumes, or participates in, a portion of the credit risk associated with the interest rate swap position with the commercial borrower, for a fee received from the other bank.

The Company offers foreign exchange contracts to commercial borrowers to accommodate their business needs. These foreign exchange contracts do not qualify as hedges for accounting purposes. To mitigate the market and liquidity risk associated with these foreign exchange contracts, the Company enters into similar offsetting positions.

Table of Contents

BROOKLINE BANCORP, INC. AND SUBSIDIARIES

Notes to Unaudited Consolidated Financial Statements (Continued)

Asset derivatives and liability derivatives are included in other assets and accrued expenses and other liabilities on the unaudited consolidated balance sheets.

The following tables ~~presents~~present the Company's customer related derivative positions for the periods indicated below for those derivatives not designated as hedging.


	Notional Amount Maturing																Notional Amount Maturing
	Number of Positions	Less than 1 year		Less than 2 years		Less than 3 years		Less than 4 years		Thereafter		Total		Fair Value			Number of Positions	Less than 1 year		Less than 2 years		Less than 3 years		Less than 4 years		Thereafter		Total		Fair Value
	September 30, 2017																March 31, 2023
	(Dollars In Thousands)																(Dollars In Thousands)
Loan level derivatives																Loan level derivatives
Receive fixed, pay variable	61	$	—	$	5,996	$	—	$	28,378	$	431,096	$	465,470	$	9,975	Receive fixed, pay variable	152	$	68,930	$	32,353	$	133,823	$130,956		$	1,407,673	$	1,773,735	$	76,665
Pay fixed, receive variable	61	—		5,996		—		28,378		431,096		465,470		9,975		Pay fixed, receive variable	152	68,930		32,353		133,823		130,956		1,407,673		1,773,735		76,665
Risk participation-out agreements	5	—		—		—		8,732		20,126		28,858		49		Risk participation-out agreements	63	38,643		—		27,484		32,621		412,716		511,464		1,946
Risk participation-in agreements	1	—		—		—		—		3,825		3,825		14		Risk participation-in agreements	8	18,343		—		—		27,242		29,172		74,757		39

Foreign exchange contracts																Foreign exchange contracts
Buys foreign currency, sells U.S. currency	25	$	1,200	$	—	$	—	$	—	$	—	$	1,200	$	22	Buys foreign currency, sells U.S. currency	14	$	2,631	$	—	$	—	$	—	$	—	$	2,631	$	339
Sells foreign currency, buys U.S. currency	50	1,208		—		—		—		—		1,208		14		Sells foreign currency, buys U.S. currency	14	2,650		—		—		—		—		2,650		320


	Notional Amount Maturing
	Number of Positions	Less than 1 year		Less than 2 years		Less than 3 years		Less than 4 years		Thereafter		Total		Fair Value
	December 31, 2022
	(Dollars In Thousands)
Loan level derivatives
Receive fixed, pay variable	132	$	71,547	$	69,454	$	141,498	$	68,140	$	1,139,070	$	1,489,709	$	103,640
Pay fixed, receive variable	132	71,547		69,454		141,498		68,140		1,139,070		1,489,709		103,640
Risk participation-out agreements	54	38,931		22,979		27,508		6,222		297,984		393,624		347
Risk participation-in agreements	8	18,421		—		—		23,766		33,036		75,223		31

Foreign exchange contracts
Buys foreign currency, sells U.S. currency	12	$	2,383	$	—	$	—	$	—	$	—	$	2,383	$	130
Sells foreign currency, buys U.S. currency	12	2,400		—		—		—		—		2,400		112

Table of Contents

BROOKLINE BANCORP, INC. AND SUBSIDIARIES

Notes to Unaudited Consolidated Financial Statements (Continued)

~~At and for the Nine Months Ended September 30, 2017 and 2016~~

Notional Amount Maturing
Number of Positions Less than 1 year Less than 2 years Less than 3 years Less than 4 years Thereafter Total Fair Value
December 31, 2016
(Dollars In Thousands)
Loan level derivatives
Receive fixed, pay variable 54
$ —
$ 4,025
$ 2,141
$ 29,501
$ 348,113
$ 383,780
$ 9,738
Pay fixed, receive variable 54
—
4,025
2,141
29,501
348,113
383,780
9,738
Risk participation-out agreements 5
—
—
—
9,078
7,883
16,961
20

Foreign exchange contracts
Buys foreign currency, sells U.S. currency 3
$ 195
$ —
$ —
$ —
$ —
$ 195
$ —
Sells foreign currency, buys U.S. currency 3
195
—
—
—
—
195
—

As of December 31, 2016, the Company held no risk participation-in agreements. As of December 31, 2016, the fair value of the foreign exchange contracts was nominal. Refer also to Note 11, "Fair Value of Financial Instruments."

Certain derivative agreements contain provisions that require the Company to post collateral if the derivative exposure exceeds a threshold amount. The Company posted collateral to dealer counterparties of ~~$28.4~~$8.8 million and ~~$34.5~~$2.4 million in the normal course of business as of ~~September 30, 2017~~March 31, 2023 and December 31, ~~2016,~~2022, respectively.

The tables below present the offsetting of derivatives and amounts subject to master netting agreements not offset in the unaudited consolidated balance sheet at the dates indicated.


	At September 30, 2017																		At March 31, 2023
	Gross Amounts Recognized		Gross Amounts Offset in the Statement of Financial Position			Net Amounts Presented in the Statement of Financial Position			Gross Amounts Not Offset in the Statement of Financial Position						Net Amount				Gross Amounts Recognized					Gross Amounts Offset in the Statement of Financial Position				Net Amounts Presented in the Statement of Financial Position				Gross Amounts Not Offset in the Statement of Financial Position								Net Amount
					Financial Instruments Pledged				Cash Collateral Pledged													Financial Instruments Pledged								Cash Collateral Pledged
	(In Thousands)																				(In Thousands)
Asset derivatives																					Asset derivatives
Derivatives designated as hedging instruments:																	Derivatives designated as hedging instruments:
Interest rate derivatives																	Interest rate derivatives		$	854				$	—			$	854			$	—			$	—			$	854
Derivatives not designated as hedging instruments:																	Derivatives not designated as hedging instruments:
Loan level derivatives	$	9,975	$	—			$	9,975		$	—		$	—			$	9,975		Loan level derivatives		$	104,707			$	—			$	104,707			$	—			$	—			$	104,707
Risk participation-out agreements	49		—			49			—			—			49		Risk participation-out agreements		1,946					—				1,946				—				—				1,946
Foreign exchange contracts	22		—			22			—			—			22		Foreign exchange contracts		339					—				339				—				—				339
Total	$	10,046	$	—		$	10,046		$	—		$	—		$	10,046	Total		$	107,846				$	—			$	107,846			$	—			$	—			$	107,846

Liability derivatives																	Liability derivatives
Derivatives designated as hedging instruments:																	Derivatives designated as hedging instruments:
Interest rate derivatives																	Interest rate derivatives		$	2,285				$	—			$	2,285			$	—			$	—			$	2,285
Derivatives not designated as hedging instruments:																	Derivatives not designated as hedging instruments:
Loan level derivatives	$	9,975	$	—		$	9,975		$	28,371		$	—		$	—	Loan level derivatives		$	104,707				$	—			$	104,707			$	5,609			$	3,224			$	95,874
Risk participation-in agreements	14		—			14			—			—			—		Risk participation-in agreements		39					—				39				—				—				39
Foreign exchange contracts	14		—			14			—			—			—		Foreign exchange contracts		320					—				320				—				—				320
Total	$	10,003	$	—		$	10,003		$	28,371		$	—		$	—	Total		$	107,351				$	—			$	107,351			$	5,609			$	3,224			$	98,518

Table of Contents

BROOKLINE BANCORP, INC. AND SUBSIDIARIES

Notes to Unaudited Consolidated Financial Statements (Continued)

~~At and for the Nine Months Ended September 30, 2017 and 2016~~

At December 31, 2016
Gross
Amounts Recognized
Gross Amounts
Offset in the
Statement of Financial Position
Net Amounts Presented in the Statement of Financial Position
Gross Amounts Not Offset in the
Statement of Financial Position
Net Amount
Financial Instruments Pledged Cash Collateral Pledged
(In Thousands)
Asset derivatives
Loan level derivatives $ 9,738
$ —
$ 9,738
$ —
$ —
$ 9,738
Risk participation-out agreements 20
—
20
—
—
20
Total $ 9,758
$ —
$ 9,758
$ —
$ —
$ 9,758

Liability derivatives
Loan level derivatives $ 9,738
$ —
$ 9,738
$ 33,744
$ 720
$ —
Total $ 9,738
$ —
$ 9,738
$ 33,744
$ 720
$ —

~~As of December 31, 2016, the Company held no risk participation-in agreements. As of December 31, 2016, the fair value of the foreign exchange contracts was nominal.~~


	At December 31, 2022
	Gross Amounts Recognized		Gross Amounts Offset in the Statement of Financial Position		Net Amounts Presented in the Statement of Financial Position		Gross Amounts Not Offset in the Statement of Financial Position				Net Amount
							Financial Instruments Pledged		Cash Collateral Pledged
	(In Thousands)
Asset derivatives
Derivatives designated as hedging instruments:
Interest rate derivatives	$	34	$	—	$	34	$	—	$	—	$	34
Derivatives not designated as hedging instruments:
Loan level derivatives	$	108,963	$	—	$	108,963	$	—	$	—	$	108,963
Risk participation-out agreements	347		—		347		—		—		347
Foreign exchange contracts	130		—		130		—		—		130
Total	$	109,474	$	—	$	109,474	$	—	$	—	$	109,474

Liability derivatives
Derivatives designated as hedging instruments:
Interest rate derivatives	$	3,170	$	—	$	3,170	$	—	$	—	$	3,170
Derivatives not designated as hedging instruments:
Loan level derivatives	$	108,963	$	—	$	108,963	$	2,393	$	—	$	106,570
Risk participation-in agreements	31		—		31		—		—		31
Foreign exchange contracts	112		—		112		—		—		112
Total	$	112,276	$	—	$	112,276	$	2,393	$	—	$	109,883

The Company has agreements with certain of its derivative counterparties that contain credit-risk-related contingent provisions. These provisions provide the counterparty with the right to terminate its derivative positions and require the Company to settle its obligations under the agreements if the Company defaults on certain of its indebtedness or if the Company fails to maintain its status as a well-capitalized institution.


	Fair Value
	Three Months Ended March 31, 2023		Three Months Ended March 31, 2022
	(Dollars in Thousands)

Derivatives designated as hedges	$	(1,430)	$	116
(Loss) gain in OCI on derivatives (effective portion), net of tax	$	(895)	$	91
Gain (loss) reclassified from OCI into interest income or interest expense (effective portion)	$	(543)	$	2

The guidance in ASU 2017-12 requires that amounts in accumulated other comprehensive income that are included in the assessment of effectiveness should be reclassified into earnings in the same period in which the hedged forecasted transactions impact earnings. A portion of the balance reported in accumulated other comprehensive income related to derivatives will be

Table of Contents

BROOKLINE BANCORP, INC. AND SUBSIDIARIES

Notes to Unaudited Consolidated Financial Statements (Continued)

reclassified to interest expense as interest payments are made or received on the Company’s interest rate swaps. The Company monitors the risk of counterparty default on an ongoing basis.

(9) Stock Based Compensation

As of ~~September 30, 2017,~~March 31, 2023, the Company had ~~three~~one active ~~recognition~~equity plan: the Brookline Bancorp, Inc. 2021 Stock Option and ~~retention plans:~~Incentive Plan ("2021 Plan"). As a result of the ~~2003 Recognition and Retention~~2021 Plan ~~(the "2003 RRP") with 1,250,000 authorized shares,~~having been approved by the ~~2011 Restricted Stock Award Plan ("2011 RSA") with 500,000 authorized shares and~~Company's stockholders at the 2021 annual meeting of stockholders, the Company discontinued granting awards under the Brookline Bancorp, Inc. 2014 Equity Incentive Plan ("(the "2014 Plan"), and no further shares will be granted as awards under the 2014 Plan. The Brookline Bancorp, Inc. 2011 Restricted Stock Plan (the "2011 Plan") ~~with 1,750,000 authorized shares. The 2003 RRP,~~expired in July 2021, and the Company has not issued shares from the 2011 ~~RSA~~Plan since the adoption of the 2014 Plan. The 2021 Plan and the 2014 Plan are ~~collectively~~together referred to as the "Plans". The purpose of the Plans is to promote the long-term financial success of the Company and its subsidiaries by providing a means to attract, retain and reward individuals who contribute to such success and to further align their interests with those of the Company's stockholders."Plans."

Of the awarded shares under the Plans, generally 50% vest ratably over three years with one-third of such shares vesting at each of the first, second and third anniversary dates of the awards. These are referred to as "time-based shares". The remaining 50% of each award ~~has a cliff vesting schedule and~~ will vest three years after the award date based on the level of the Company's achievement of identified performance targets in comparison to the level of achievement of such identified performance targets by a defined peer ~~group comprised of 17 financial institutions.~~group. These are referred to as "performance-based shares". The specific performance measure targets relate to return on assets, return on tangible equity, asset quality and total stockholder return (share price appreciation from date of award plus dividends paid as a percent of the Company's common stock share price on the date of award). If a participant leaves the Company prior to the third anniversary date of an award, any unvested shares are usually forfeited. Dividends declared with respect to shares awarded will be held by the Company and paid to the participant only when the shares vest.

Under ~~all~~ the Plans, shares of the Company's common stock ~~were~~are reserved for issuance as restricted stock awards to officers, employees, and non-employee directors of the Company. Shares issued upon vesting may be either authorized but unissued shares or reacquired shares held by the Company as treasury shares. Any shares not issued because vesting requirements are not met will be retired back to treasury and be made available again for issuance under the Plans.

During the three ~~and nine~~ months ended ~~September 30, 2017, 151,083~~March 31, 2023 and ~~163,204~~March 31, 2022, no shares were issued, ~~upon satisfaction of required conditions of the Plans. During the three and nine months ended September 30, 2016, 134,809 and 136,139 shares were issued~~respectively, upon satisfaction of required conditions of the Plans.

Total expense for the Plans was ~~$0.7~~$0.9 million and ~~$0.6~~$0.8 million for the three months ended ~~September 30, 2017~~March 31, 2023 and ~~2016,~~2022, respectively. ~~Total expense for the Plans was $1.8 million~~

(10) Earnings per Share ("EPS")

The following table is a reconciliation of basic EPS and ~~$1.4 million for the nine months ended September 30, 2017 and~~diluted EPS:


	Three Months Ended
	March 31, 2023				March 31, 2022
	Basic		Fully Diluted		Basic		Fully Diluted
	(Dollars in Thousands, Except Per Share Amounts)
Numerator:
Net income	$	7,560	$	7,560	$	24,705	$	24,705

Denominator:
Weighted average shares outstanding	86,563,641		86,563,641		77,617,227		77,617,227
Effect of dilutive securities	—		274,165		—		309,595
Adjusted weighted average shares outstanding	86,563,641		86,837,806		77,617,227		77,926,822

EPS	$	0.09	$	0.09	$	0.32	$	0.32

Table of Contents

BROOKLINE BANCORP, INC. AND SUBSIDIARIES

Notes to Unaudited Consolidated Financial Statements (Continued)

~~At and for the Nine Months Ended September 30, 2017 and 2016~~

~~2016, respectively. The increase in the total expense for the Plans for the three and nine months ended September 30, 2017 is~~ d~~ue to the increase in the grant price of the shares which is driven by the Company’s stock price.~~

~~(10) Earnings per Share ("EPS")~~

~~The following table is a reconciliation of basic EPS and diluted EPS:~~

Three Months Ended
September 30, 2017 September 30, 2016
Basic
Fully
Diluted
Basic
Fully
Diluted
(Dollars in Thousands, Except Per Share Amounts)
Numerator:
Net income $ 15,366
$ 15,366
$ 13,617
$ 13,617

Denominator:
Weighted average shares outstanding 76,452,539
76,452,539
70,299,722
70,299,722
Effect of dilutive securities —
306,891
—
151,038
Adjusted weighted average shares outstanding 76,452,539
76,759,430
70,299,722
70,450,760

EPS $ 0.20
$ 0.20
$ 0.19
$ 0.19

Nine Months Ended
September 30, 2017 September 30, 2016
Basic
Fully
Diluted
Basic
Fully
Diluted
(Dollars in Thousands, Except Per Share Amounts)
Numerator:
Net income $ 43,691

$ 43,691
$ 39,083

$ 39,083

Denominator:
Weighted average shares outstanding 73,743,658
73,743,658
70,228,127
70,228,127
Effect of dilutive securities —
373,522
—
166,338
Adjusted weighted average shares outstanding 73,743,658
74,117,180
70,228,127
70,394,465

EPS $ 0.59
$ 0.59
$ 0.56
$ 0.56

(11) Fair Value of Financial Instruments

A description of the valuation methodologies used for assets and liabilities measured at fair value on a recurring and non-recurring basis, as well as the general classification of such instruments pursuant to the valuation hierarchy, is set forth below. There were no changes in the valuation techniques used during the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2023 and ~~2016.~~

~~Table of Contents~~

~~BROOKLINE BANCORP, INC. AND SUBSIDIARIES~~

~~Notes to Unaudited Consolidated Financial Statements (Continued)~~

~~At and for the Nine Months Ended September 30, 2017 and 2016~~

March 31, 2022.

Assets and Liabilities Recorded at Fair Value on a Recurring Basis

The following tables set forth the carrying value of assets and liabilities measured at fair value on a recurring basis at the dates indicated:


	Carrying Value as of September 30, 2017									Carrying Value as of March 31, 2023
	Level 1		Level 2		Level 3		Total			Level 1		Level 2		Level 3		Total
	(In Thousands)									(In Thousands)
Assets:									Assets:
Investment securities available-for-sale:									Investment securities available-for-sale:
GSE debentures	$	—	$	139,344	$	—	$	139,344	GSE debentures	$	—	$	177,222	$	—	$	177,222
GSE CMOs	—		135,280		—		135,280		GSE CMOs	—		67,684		—		67,684
GSE MBSs	—		182,118		—		182,118		GSE MBSs	—		188,793		—		188,793
SBA commercial loan asset-backed securities	—		77		—		77

Municipal obligations									Municipal obligations	—		3,356		19,956		23,312
Corporate debt obligations	—		58,891		—		58,891		Corporate debt obligations	—		25,238		12,058		37,296
U.S. Treasury bonds	—		4,811		—		4,811		U.S. Treasury bonds	—		572,250		—		572,250
Trust preferred securities	—		1,403		—		1,403
Marketable equity securities	986		—		—		986

Foreign government obligations									Foreign government obligations	—		475		—		475
Total investment securities available-for-sale	$	986	$	521,924	$	—	$	522,910	Total investment securities available-for-sale	$	—	$	1,035,018	$	32,014	$	1,067,032

Assets:									Assets:
Interest rate derivatives									Interest rate derivatives	—		854		—		854
Derivatives not designated as hedging instruments:									Derivatives not designated as hedging instruments:
Loan level derivatives	$	—	$	9,975	$	—	$	9,975	Loan level derivatives	—		104,707		—		104,707
Risk participation-out agreements	—		49		—		49		Risk participation-out agreements	—		1,946		—		1,946
Foreign exchange contracts	—		22		—		22		Foreign exchange contracts	—		339		—		339
Liabilities:									Liabilities:
Interest rate derivatives									Interest rate derivatives	$	—	$	2,285	$	—	$	2,285
Derivatives not designated as hedging instruments:									Derivatives not designated as hedging instruments:
Loan level derivatives	$	—	$	9,975	$	—	$	9,975	Loan level derivatives	—		104,707		—		104,707
Risk participation-in agreements	—		14		—		14		Risk participation-in agreements	—		39		—		39
Foreign exchange contracts	—		14		—		14		Foreign exchange contracts	—		320		—		320

Carrying Value as of December 31, 2016
Level 1 Level 2 Level 3 Total
(In Thousands)
Assets:
Investment securities available-for-sale:
GSE debentures $ —
$ 97,020
$ —
$ 97,020
GSE CMOs —
158,040
—
158,040
GSE MBSs —
212,915
—
212,915
SBA commercial loan asset-backed securities —
107
—
107
Corporate debt obligations —
48,485
—
48,485
U.S. Treasury bonds —
4,737
—
4,737
Trust preferred securities —
1,358
—
1,358
Marketable equity securities 972
—
—
972
Total investment securities available-for-sale $ 972
$ 522,662
$ —

$ 523,634
Loan level derivatives $ —
$ 9,738
$ —
$ 9,738
Risk participation-out agreements —
20
—
20
Liabilities:

Loan level derivatives $ —
$ 9,738
$ —
$ 9,738

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BROOKLINE BANCORP, INC. AND SUBSIDIARIES

Notes to Unaudited Consolidated Financial Statements (Continued)

~~At and for the Nine Months Ended September 30, 2017 and 2016~~


	Carrying Value as of December 31, 2022
	Level 1		Level 2		Level 3		Total
	(In Thousands)
Assets:
Investment securities available-for-sale:
GSE debentures	$	—	$	152,422	$	—	$	152,422
GSE CMOs	—		18,220		—		18,220
GSE MBSs	—		140,576		—		140,576




Corporate debt obligations	—		13,764		—		13,764
U.S. Treasury bonds	—		331,307		—		331,307
Foreign government obligations	—		477		—		477


Total investment securities available-for-sale	$	—	$	656,766	$	—	$	656,766

Interest rate derivatives	—		34		—		34
Loan level derivatives	—		108,963		—		108,963
Risk participation-out agreements	—		347		—		347
Foreign exchange contracts	—		130		—		130
Liabilities:
Interest rate derivatives	$	—	$	3,170	$	—	$	3,170
Loan level derivatives	—		108,963		—		108,963
Risk participation-in agreements	—		31		—		31
Foreign exchange contracts	—		112		—		112

~~As of December 31, 2016, the fair value of the foreign exchange contracts was nominal. As of December 31, 2016, the Company held no risk participation-in agreements.~~

Investment Securities Available-for-Sale

The fair value of investment securities is based principally on market prices and dealer quotes received from third-party and nationally-recognized pricing services for identical investment securities such as U.S. Treasury and agency securities. ~~The Company's marketable equity securities are priced this way and are included in Level 1.~~ These prices are validated by comparing the primary pricing source with an alternative pricing source when available. When quoted market prices for identical securities are unavailable, the Company uses market prices provided by independent pricing services based on recent trading activity and other observable information, including but not limited to market interest-rate curves, referenced credit spreads and estimated prepayment speeds, where applicable. These investments include GSE debentures, GSE mortgage-related securities, SBA commercial loan asset backed securities, corporate debt ~~securities,~~obligations, municipal obligations and trust preferred securities, all of which are included in Level 2. As of ~~September 30, 2017~~March 31, 2023 $32.0 million of investment securities available-for-sale are included in Level 3 within the investment portfolio. The composition of these assets are primarily comprised of subordinated debt of local banks and private placement municipal securities. Of these securities, approximately $16.5 million are private placement municipal Bond Anticipation Notes. As of December 31, ~~2016, no~~2022, none of the investment securities were valued using pricing models included in Level 3.

Additionally, management reviews changes in fair value from period to period and performs testing to ensure that prices received from the third parties are consistent with management's expectation of the market. Changes in the prices obtained from the pricing service are analyzed from month to month, taking into consideration changes in market conditions including changes in mortgage spreads, changes in U.S. Treasury security yields and changes in generic pricing of 15-year and 30-year securities. Additional analysis may include a review of prices provided by other independent parties, a yield analysis, a review of average life changes using Bloomberg analytics and a review of historical pricing for a particular security.

Derivatives and Hedging Instruments

The fair ~~values for the interest-rate swap assets and liabilities,~~value of interest rate derivatives designated as hedging instruments, loan level derivatives, risk participation agreements (RPA in/out), and foreign exchange ~~derivatives~~contracts represent a Level 2 valuation and are based on settlement values adjusted for credit risks associated with the counterparties and the Company and observable market interest rate curves and foreign exchange rates where applicable. Credit risk adjustments consider factors such as the likelihood of default by the Company and its counterparties, its net exposures and remaining contractual life. To date, the Company has not realized any

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BROOKLINE BANCORP, INC. AND SUBSIDIARIES

Notes to Unaudited Consolidated Financial Statements (Continued)

losses due to a counterparty's inability to pay any net uncollateralized position. Refer also to Note 8, "Derivatives and Hedging Activities."

There were no transfers between levels for assets and liabilities recorded at fair value on a recurring basis ~~during~~at March 31, 2023 and December 31, 2022, respectively.

The following tables summarize information about significant unobservable inputs related to the ~~three~~Company's categories of Level 3 financial assets and ~~nine months ended September 30, 2017~~liabilities measured on a recurring basis.

Quantitative Information About Level 3 Fair Value Measurements - Recurring Basis

Financial Instrument

Estimated Fair Value

Valuation Technique(s)

Significant Unobservable Inputs

Range of Inputs

Weighted Average

(In Thousands)

March 31, 2023

Assets

Municipal obligations

19,956

Discounted Cash Flow

Discount Rate from Bloomberg BVAL

0.0%-3.3%

1.02

Corporate debt obligations

9,727

Observable Bids

Bloomberg TRACE

Corporate debt obligations

2,331

Discounted Cash Flow

Discount Rate from Bloomberg/BVAL

5.14

The following table summarizes the changes in estimated fair value for all assets and ~~2016, respectively.~~liabilities measured at estimated fair value on a recurring basis using significant unobservable inputs (Level 3).


Changes in Estimated Fair Value of Level 3 Financial Assets and Liabilities - Recurring Basis
	Three Months Ended March 31, 2023
	(In Thousands)
	Municipal obligations		Corporate debt obligations
Beginning balance	$	—	$	—
Purchases	1,075		—
Included in earnings	—		—
Included in comprehensive income	—		—
Transfers in	18,881		12,058
Transfers out	—		—
Maturity and settlements	—		—
Ending balance	$	19,956	$	12,058

Table of Contents

BROOKLINE BANCORP, INC. AND SUBSIDIARIES

Notes to Unaudited Consolidated Financial Statements (Continued)

~~At and for the Nine Months Ended September 30, 2017 and 2016~~

Assets and Liabilities Recorded at Fair Value on a Non-Recurring Basis

Assets and liabilities measured at fair value on a non-recurring basis are summarized below at the dated indicated:


	Carrying Value as of September 30, 2017									Carrying Value as of March 31, 2023
	Level 1		Level 2		Level 3		Total			Level 1		Level 2		Level 3		Total
	(In Thousands)									(In Thousands)
Assets measured at fair value on a non-recurring basis:									Assets measured at fair value on a non-recurring basis:
Collateral-dependent impaired loans and leases	$	—	$	—	$	32,800	$	32,800	Collateral-dependent impaired loans and leases	$	—	$	—	$	6,104	$	6,104
OREO	—		—		3,235		3,235

Repossessed assets	—		1,163		—		1,163		Repossessed assets	—		508		—		508
Total assets measured at fair value on a non-recurring basis	$	—	$	1,163	$	36,035	$	37,198	Total assets measured at fair value on a non-recurring basis	$	—	$	508	$	6,104	$	6,612


	Carrying Value as of December 31, 2016									Carrying Value as of December 31, 2022
	Level 1		Level 2		Level 3		Total			Level 1		Level 2		Level 3		Total
	(In Thousands)									(In Thousands)
Assets measured at fair value on a non-recurring basis:									Assets measured at fair value on a non-recurring basis:
Collateral-dependent impaired loans and leases	$	—	$	—	$	27,282	$	27,282	Collateral-dependent impaired loans and leases	$	—	$	—	$	779	$	779
OREO	—		—		618		618

Repossessed assets	—		781		—		781		Repossessed assets	—		408		—		408
Total assets measured at fair value on a non-recurring basis	$	—	$	781	$	27,900	$	28,681	Total assets measured at fair value on a non-recurring basis	$	—	$	408	$	779	$	1,187

Collateral-Dependent Impaired Loans and Leases

For nonperforming loans and leases where the credit quality of the borrower has deteriorated significantly, fair values of the underlying collateral were estimated using purchase and sales agreements (Level 2), or comparable sales or recent appraisals (Level 3), adjusted for selling costs and other expenses.

Other Real Estate Owned ("OREO")

The Company records OREO at the lower of cost or fair value. In estimating fair value, the Company utilizes purchase and sales agreements (Level 2) or comparable sales, recent appraisals or cash flows discounted at an interest rate commensurate with the risk associated with these cash flows (Level 3), adjusted for selling costs and other expenses. As of March 31, 2023 and December 31, 2022, the Company did not record any OREO.

Repossessed Assets

Repossessed assets are carried at estimated fair value less costs to sell based on auction pricing (Level 2).

The table below presents quantitative information about significant unobservable inputs (Level 3) for assets measured at fair value on a ~~recurring~~non-recurring basis at the dates indicated.

Fair Value Valuation Technique
At September 30, 2017 At December 31, 2016
(Dollars in Thousands)
Collateral-dependent impaired loans and leases $ 32,800
$ 27,282

Appraisal of collateral ⁽¹⁾
Other real estate owned 3,235
618

Appraisal of collateral ⁽¹⁾

Fair Value

Valuation Technique

At March 31,
2023

At December 31, 2022

(Dollars in Thousands)

Collateral-dependent impaired loans and leases

6,104

779

Appraisal of collateral (1)

⁽¹⁾ Fair value is generally determined through independent appraisals of the underlying collateral. The Company may also use another available source of collateral assessment to determine a reasonable estimate of the fair value of the collateral. Appraisals may be adjusted by management for qualitative factors such as economic factors and estimated liquidation expenses. The range of the unobservable inputs used may vary but is generally 0% - 10% on the discount for costs to sell and 0% - 15% on appraisal adjustments.

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BROOKLINE BANCORP, INC. AND SUBSIDIARIES

Notes to Unaudited Consolidated Financial Statements (Continued)

~~At and for the Nine Months Ended September 30, 2017 and 2016~~

Summary of Estimated Fair Values of Financial Instruments

The following table presents the carrying amount, estimated fair value, and placement in the fair value hierarchy of the Company's financial instruments at the dates indicated. This table excludes financial instruments for which the carrying amount approximates fair value. Financial assets for which the fair value approximates carrying value include cash and cash equivalents, restricted equity securities, and accrued interest receivable. Financial liabilities for which the fair value approximates carrying value include non-maturity deposits, short-term borrowings, and accrued interest payable.


					Fair Value Measurements at March 31, 2023
	Carrying Value		Estimated Fair Value		Level 1 Inputs		Level 2 Inputs		Level 3 Inputs
	(In Thousands)
Financial assets:






Loans and leases, net	$	9,126,100	$	8,844,334	$	—	$	—	$	8,844,334



Financial liabilities:

Certificates of deposits	2,345,335		2,323,833		—		2,323,833		—
Borrowed funds	1,630,102		1,623,901		—		1,626,143		—

Fair Value Measurements
Carrying
Value Estimated
Fair Value Level 1
Inputs Level 2
Inputs Level 3
Inputs
(In Thousands)
At September 30, 2017
Financial assets:
Investment securities held-to-maturity:

GSE debentures $ 38,622
$ 38,072
$ —
$ 38,072
$ —
GSE MBSs 14,788
14,643
—
14,643
—
Municipal obligations 53,828
54,013
—
54,013
—
Foreign government obligations 500
492
—
—
492
Loans held-for-sale 2,973
2,973
—
2,973
—
Loans and leases, net 5,574,027
5,480,446
—
—
5,480,446
Restricted equity securities 62,135
62,135
—
—
62,135
Loan level derivatives 9,975
9,975
—
9,975
—
Risk participation-out agreements 49
49
—
49
—
Foreign exchange contracts 22
22
—
22
—
Financial liabilities:
Certificates of deposit 1,167,329
1,164,618
—
1,164,618
—
Borrowed funds 985,895
967,643
—
967,643
—
Loan level derivatives 9,975
9,975
—
9,975
—
Risk participation-in agreements 14
14
—
14
—
Foreign exchange contracts 14
14
—
14
—


			Fair Value Measurements at December 31, 2022
	Carrying Value	Estimated Fair Value	Level 1 Inputs	Level 2 Inputs	Level 3 Inputs
	(In Thousands)
Financial assets:






Loans and leases, net	7,545,906	7,450,654	—	—	7,450,654


Financial liabilities:

Certificates of deposit	1,238,287	1,217,024	—	1,217,024	—
Borrowed funds	1,432,652	1,431,716	—	1,431,716	—

~~Table of Contents~~

~~BROOKLINE BANCORP, INC. AND SUBSIDIARIES~~

~~Notes to Unaudited Consolidated Financial Statements (Continued)~~

~~At and for the Nine Months Ended September 30, 2017 and 2016~~

Fair Value Measurements
Carrying
Value Estimated
Fair Value Level 1
Inputs Level 2
Inputs Level 3
Inputs
(In Thousands)
At December 31, 2016
Financial assets:
Investment securities held-to-maturity:
GSE debentures $ 14,735
$ 14,101
$ —
$ 14,101
$ —
GSE MBSs 17,666
17,479
—
17,479
—
Municipal obligations 54,219
53,204
—
53,204
—
Foreign government obligations 500
487
—
—
487
Loans held-for-sale 13,078
13,078
—
13,078
—
Loans and leases, net 5,345,198
5,195,312
—
—
5,195,312
Restricted equity securities 64,511
75,589
—
—
75,589
Loan level derivatives 9,738
9,738
—
9,738
—
Risk participation-out agreements 20
20
—
20
—
Financial liabilities:
Certificates of deposit 1,041,022
1,042,653
—
1,042,653
—
Borrowed funds 1,044,086
1,030,753
—
1,030,753
—
Loan level derivatives 9,738
9,738
—
9,738
—

~~Investment Securities Held-to-Maturity~~

The fair values of certain investment securities held-to-maturity are estimated using market prices provided by independent pricing services based on recent trading activity and other observable information, including but not limited to market interest-rate curves, referenced credit spreads and estimated prepayment speeds where applicable. These investments include GSE debentures, GSE MBSs, and municipal obligations, all of which are included in Level 2. Additionally, fair values of foreign government obligations are estimated using pricing models and are considered to be Level 3.

~~Loans Held-for-Sale~~

Fair value is measured using quoted market prices when available. These assets are typically categorized as Level 1. If quoted market prices are not available, comparable market values may be utilized. These assets are typically categorized as Level 2.

Loans and Leases

The fair values of performing loans and leases was estimated by segregating the portfolio into its primary loan and lease categories—commercial real estate mortgage, multi-family mortgage, construction, commercial, equipment financing, condominium association, residential mortgage, home equity and other consumer. These categories were further disaggregated based upon significant financial characteristics such as type of interest rate (fixed / variable) and payment status (current / past-due). ~~The~~Using the exit price valuation method, the Company discounts the contractual cash flows for each loan category using interest rates currently being offered for loans with similar terms to borrowers of similar quality and incorporates estimates of future loan prepayments. ~~This method of estimating fair value does not incorporate the exit price concept of fair value.~~

~~Restricted Equity Securities~~

The fair values of certain restricted equity securities are estimated using observable inputs adjusted for other unobservable information, including but not limited to probability assumptions and similar discounts where applicable. These restricted equity securities are considered to be Level 3.

~~Table of Contents~~

~~BROOKLINE BANCORP, INC. AND SUBSIDIARIES~~

~~Notes to Unaudited Consolidated Financial Statements (Continued)~~

~~At and for the Nine Months Ended September 30, 2017 and 2016~~

Deposits

The fair values of deposit liabilities with no stated maturity (demand, NOW, savings and money market savings accounts) are equal to the carrying amounts payable on demand. The fair value of certificates of deposit represents contractual cash flows discounted using interest rates currently offered on deposits with similar characteristics and remaining maturities. The fair value estimates for deposits do not include the benefit that results from the low-cost funding provided by the Company's core deposit relationships (deposit-based intangibles).

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BROOKLINE BANCORP, INC. AND SUBSIDIARIES

Notes to Unaudited Consolidated Financial Statements (Continued)

Borrowed Funds

The fair value of federal funds purchased is equal to the amount borrowed. The fair value of ~~FHLBB~~FHLB advances and repurchase agreements represents contractual repayments discounted using interest rates currently available for borrowings with similar characteristics and remaining maturities. The fair values reported for retail repurchase agreements are based on the discounted value of contractual cash flows. The discount rates used are representative of approximate rates currently offered on borrowings with similar characteristics and maturities. The fair values reported for subordinated deferrable interest debentures are based on the discounted value of contractual cash flows. The discount rates used are representative of approximate rates currently offered on instruments with similar terms and maturities.

(12) Commitments and Contingencies

Off-Balance Sheet Financial Instruments

The Company is party to off-balance sheet financial instruments in the normal course of business to meet the financing needs of its customers and to reduce its own exposure to fluctuations in interest rates. These financial instruments include loan commitments, standby and commercial letters of ~~credits,~~credit, and loan level derivatives. According to GAAP, these financial instruments are not recorded in the financial statements until they are funded or related fees are incurred or received.

The contract amounts reflect the extent of the involvement the Company has in particular classes of these instruments. Such commitments involve, to varying degrees, elements of credit risk and interest-rate risk in excess of the amount recognized in the consolidated balance sheets. The Company's exposure to credit loss in the event of non-performance by the counterparty is represented by the fair value of the instruments. The Company uses the same policies in making commitments and conditional obligations as it does for on-balance sheet instruments.

5442

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BROOKLINE BANCORP, INC. AND SUBSIDIARIES

Notes to Unaudited Consolidated Financial Statements (Continued)

~~At and for the Nine Months Ended September 30, 2017 and 2016~~

Financial instruments with off-balance-sheet risk at the dates indicated follow:


	At September 30, 2017		At December 31, 2016			At March 31, 2023		At December 31, 2022
	(In Thousands)					(In Thousands)
Financial instruments whose contract amounts represent credit risk:					Financial instruments whose contract amounts represent credit risk:
Commitments to originate loans and leases:					Commitments to originate loans and leases:
Commercial real estate	$	95,484	$	27,750	Commercial real estate	$	214,390	$	414,217
Commercial	89,036		71,716		Commercial	242,928		291,188
Residential mortgage	19,672		28,179		Residential mortgage	10,788		14,036
Unadvanced portion of loans and leases	526,532		580,416		Unadvanced portion of loans and leases	1,283,463		1,202,738
Unused lines of credit:					Unused lines of credit:
Home equity	383,973		340,682		Home equity	751,717		700,201
Other consumer	14,119		13,157		Other consumer	105,416		97,313
Other commercial	306		208		Other commercial	478		526
Unused letters of credit:					Unused letters of credit:
Financial standby letters of credit	11,270		11,720		Financial standby letters of credit	14,611		13,584
Performance standby letters of credit	668		516		Performance standby letters of credit	31,202		31,330
Commercial and similar letters of credit	855		785		Commercial and similar letters of credit	4,817		2,619
Interest rate derivatives					Interest rate derivatives	225,000		150,000
Loan level derivatives (Notional principal amounts):					Loan level derivatives (Notional principal amounts):
Receive fixed, pay variable	465,470		383,780		Receive fixed, pay variable	1,773,735		1,489,709
Pay fixed, receive variable	465,470		383,780		Pay fixed, receive variable	1,773,735		1,489,709
Risk participation-out agreements	28,858		16,961		Risk participation-out agreements	511,464		393,624
Risk participation-in agreements	3,825		—		Risk participation-in agreements	74,757		75,223
Foreign exchange contracts (Notional amounts):					Foreign exchange contracts (Notional amounts):
Buys foreign currency, sells U.S. currency	1,200		195		Buys foreign currency, sells U.S. currency	2,631		2,383
Sells foreign currency, buys U.S. currency	1,208		195		Sells foreign currency, buys U.S. currency	2,650		2,400

Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require the payment of a fee by the customer. Since some of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The Company evaluates each customer's creditworthiness on a case-by-case basis. The amount of collateral obtained, if any, is based on management's credit evaluation of the borrower.

Standby and commercial letters of ~~credits~~credit are conditional commitments issued by the Company to guarantee performance of a customer to a third party. These standby and commercial letters of credit are primarily issued to support the financing needs of the Company's commercial customers. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loans to customers.

From time to time, the Company enters into loan level derivatives, risk participation agreements or foreign exchange contracts with commercial customers and third-party financial institutions. These derivatives allow the Company to offer long-term fixed-rate commercial loans while mitigating the interest-rate or foreign exchange risk of holding those loans. In a loan level derivative transaction, the Company lends to a commercial customer on a floating-rate basis and then enters into ana loan level derivative with that customer. Concurrently, the Company enters into offsetting swaps with a third-party financial institution, effectively minimizing its net interest-rate risk exposure resulting from such transactions.

The fair value of derivative assets and liabilities was $10.0 million and $10.0 million, respectively, as of September 30, 2017. The fair value of derivative assets and liabilities was $9.8 million and $9.7 million, respectively, as of December 31, 2016.

these derivatives are presented in Note 8.

Table of Contents

BROOKLINE BANCORP, INC. AND SUBSIDIARIES

Notes to Unaudited Consolidated Financial Statements (Continued)

~~At and for the Nine Months Ended September 30, 2017 and 2016~~

The fair value of foreign exchange assets and liabilities was $22.0 thousand and $14.0 thousand, respectively, as of September 30, 2017. The fair value of foreign exchange assets and liabilities was nominal as of December 31, 2016.

Lease Commitments

The Company leases certain office space under various noncancellable operating ~~leases.~~leases as well as certain other assets. These leases have original terms ranging from ~~5 years~~1 year to over 25 years. Certain leases contain renewal options and escalation clauses which can increase rental expenses based principally on the consumer price index and fair market rental value provisions. All of the Company's current outstanding leases are classified as operating leases.

The Company considered the following criteria when determining whether a contract contains a lease, the existence of an identifiable asset and the right to obtain substantially all of the economic benefits from use of the asset through the period. The Company uses the FHLB classic advance rates available as of the lease's start dates as the discount rate to determine the net present value of the remaining lease payments.

Total lease commitments increased from $19.5 million as of December 31, 2022 to $31.4 million as of March 31, 2023. The increase is due to the addition of 12 leases for PCSB Bank branch locations.


	Three Months Ended March 31, 2023		Three Months Ended March 31, 2022
	(In Thousands)
The components of lease expense was as follows:
Operating lease cost	$	2,112	$	1,567





Supplemental cash flow information related to leases was as follows:
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases	$	2,353	$	1,638


Right-of-use assets obtained in exchange for new lease obligations acquired from PCSB Bank:
Operating leases assets	$	8,880	$	—
Operating leases liabilities	10,697		—


	At March 31, 2023			At December 31, 2022
	(In Thousands)
Supplemental balance sheet information related to leases was as follows:
Operating Leases
Operating lease right-of-use assets	$	30,067		$	19,484


Operating lease liabilities	31,373			19,484











Weighted Average Remaining Lease Term
Operating leases	9.38			7.39


Weighted Average Discount Rate
Operating leases	4.0		%	3.5		%

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BROOKLINE BANCORP, INC. AND SUBSIDIARIES

Notes to Unaudited Consolidated Financial Statements (Continued)

A summary of future minimum rental payments under such leases at the dates indicated follows:

Minimum Rental Payments
(In Thousands)

Remainder of 2017 $ 1,325
Year ending:
2018 4,921
2019 4,053
2020 3,497
2021 2,988
2022 2,743
Thereafter 10,138
Total $ 29,665


	Minimum Rental Payments
	March 31, 2023
	(In Thousands)

Remainder of 2023	$	5,970
Year ending:
2024	6,744
2025	5,276
2026	3,838
2027	2,859
2028	1,916
Thereafter	9,512
Total	$	36,115
Less imputed interest	(4,742)
Present value of lease liability	$	31,373

Certain leases contain escalation clauses for real estate taxes and other expenditures, which are not included above. ~~Total rental expense was $1.4~~The total real estate taxes were $0.7 million and ~~$1.3~~$0.5 million for the three months ended ~~September 30, 2017~~March 31, 2023 and ~~2016,~~2022, respectively. Total other expenditures were $0.1 million for both the three months ended March 31, 2023 and 2022, respectively. Total rental expense was ~~$4.2~~$2.1 million and ~~$3.9~~$1.5 million for the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2023 and ~~2016,~~2022, respectively. ~~The increase was due to the opening of a new branch in Danvers, Massachusetts for First Ipswich Bank, and the relocation of a branch in Brookline, Massachusetts for Brookline Bank.~~

Legal Proceedings

In the normal course of business, there are various outstanding legal proceedings. In the opinion of management, after consulting with legal counsel, the consolidated financial position and results of operations of the Company are not expected to be affected materially by the outcome of such proceedings.

(13) Revenue from Contracts with Customers

Overview

Revenue from contracts with customers in the scope of ASC 606 ("Topic 606") is measured based on the consideration specified in the contract with a customer and excludes amounts collected on behalf of third parties. The Company recognizes revenue from contracts with customers when it satisfies its performance obligations.

The Company’s performance obligations are generally satisfied as services are rendered and can either be satisfied at a point in time or over time. Unsatisfied performance obligations at the report date are not material to our consolidated financial statements.

In certain cases, other parties are involved with providing services to our customers. If the Company is a principal in the transaction (providing services itself or through a third party on its behalf), revenues are reported based on the gross consideration received from the customer and any related expenses are reported in gross noninterest expense. If the Company is an agent in the transaction (referring to another party to provide services), the Company reports its net fee or commission retained as revenue.

A substantial portion of the Company’s revenue is specifically excluded from the scope of Topic 606. This exclusion is associated with financial instruments, including interest income on loans and investment securities, in addition to loan derivative income and gains on loan and investment sales. For the revenue that is in-scope of Topic 606, the following is a description of principal activities from which the Company generates its revenue from contracts with customers, separated by the timing of revenue recognition.

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BROOKLINE BANCORP, INC. AND SUBSIDIARIES

Notes to Unaudited Consolidated Financial Statements (Continued)

Revenue Recognized at a Point in Time

The Company recognizes revenue that is transactional in nature and such revenue is earned at a point in time. Revenue that is recognized at a point in time includes card interchange fees (fee income related to debit card transactions), ATM fees, wire transfer fees, overdraft charge fees, and stop-payment and returned check fees. Additionally, revenue is collected from loan fees, such as letters of credit, line renewal fees and application fees. Such revenue is derived from transactional information and is recognized as revenue immediately as the transactions occur or upon providing the service to complete the customer’s transaction.

Revenue Recognized Over Time

The Company recognizes revenue over a period of time, generally monthly, as services are performed and performance obligations are satisfied. Such revenue includes commissions on investments, insurance sales and service charges on deposit accounts. Fee revenue from service charges on deposit accounts represents the service charges assessed to customers who hold deposit accounts at the Banks.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward-Looking Statements

Certain statements contained in this Quarterly Report on Form 10-Q 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. These statements, which are based on certain assumptions and describe Brookline Bancorp, Inc.’s (the “Company’s”) future plans, strategies and expectations, can generally be identified by the use of the words “may,” “will,” “should,” “could,” “would,” “plan,” “potential,” “estimate,” “project,” “believe,” “intend,” “anticipate,” “expect,” “target” and similar expressions. These statements include, among others, statements regarding the Company’s intent, belief or expectations with respect to economic conditions, trends affecting the Company’s financial condition or results of operations, and the Company’s exposure to market, liquidity, interest-rate and credit risk.

Forward-looking statements are based on the current assumptions underlying the statements and other information with respect to the beliefs, plans, objectives, goals, expectations, anticipations, estimates and intentions of management and the financial condition, results of operations, future performance and business are only expectations of future results. Although the Company believes that the expectations reflected in the Company’s forward-looking statements are reasonable, the Company’s

actual results could differ materially from those projected in the forward-looking statements as a result of, among other important factors, ~~adverse conditions~~the Company’s ability to achieve the synergies and value creation contemplated in connection with the recently completed acquisition of PCSB Financial Corporation ("PCSB"); turbulence in the capital and debt markets; changes in interest rates; competitive pressures from other financial institutions; ~~the effects of weakness in~~ general economic conditions (including inflation and concerns about liquidity) on a national basis or in the local markets in which the Company ~~operates, including~~operates; changes ~~which adversely affect borrowers’ ability~~in consumer behavior due to ~~service~~changing political, business and ~~repay their loans and leases;~~economic conditions, or legislative or regulatory initiatives; changes in the value of securities and other assets in the Company’s investment portfolio; ~~changes~~increases in loan and lease default and charge-off rates; the adequacy of allowances for loan and lease losses; decreases in deposit levels ~~necessitating increased~~that necessitate increases in borrowing to fund loans and investments; operational risks including, but not limited to, cybersecurity incidents, fraud, natural disasters, and ~~natural disaster;~~future pandemics; changes in ~~government~~ 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, as well as~~statements; and the other risks and uncertainties detailed in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, ~~2016~~2022 and other filings submitted to the Securities and Exchange ~~Commission.~~Commission ("SEC"). Forward-looking statements speak only as of the date on which they are made. 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.

Introduction

Brookline Bancorp, Inc., a Delaware corporation, operates as a multi-bank holding company for Brookline Bank and its subsidiaries; Bank Rhode Island and its subsidiaries ("BankRI"); ~~First Ipswich~~PCSB Bank and its ~~subsidiaries ("First Ipswich"); and~~subsidiaries; Brookline Securities ~~Corp.~~Corp; and Clarendon Private, LLC.

As a commercially-focused financial institution with 5164 full-service banking offices throughout greater Boston, the north shore of Massachusetts, ~~and~~ Rhode Island and New York, the Company, through Brookline Bank, BankRI and ~~First Ipswich (the “Banks”~~PCSB Bank (collectively referred to as the "Banks"), offers a wide range of commercial, business and retail banking services, including a full complement of cash management products, foreign exchange services, on-line and mobile banking services, consumer and residential loans and investment advisory services, designed to meet the financial needs of small- to mid-sized businesses and individuals throughout central New ~~England. Specialty lending activities include~~England and the lower Hudson Valley in New York. The Banks and their subsidiaries lend primarily in all New England states and New York, with the exception of equipment financing, ~~primarily~~27.1% of which is in the greater New York and New Jersey metropolitan ~~area.~~area and 72.9% of which is in other areas in the United States of America as of March 31, 2023. Clarendon Private is a registered investment advisor with the SEC. Through Clarendon Private, the Company offers a wide range of wealth management services to individuals, families, endowments and foundations to help these clients meet their long-term financial goals.

The Company focuses its business efforts on profitably growing its commercial lending businesses, both organically and through acquisitions. The Company’s customer focus, multi-bank structure, and risk management are integral to its organic growth strategy and serve to differentiate the Company from its competitors. As full-service financial institutions, the Banks and their subsidiaries focus their efforts on developing and deepening long-term banking relationships with qualified customers through a full complement of products, ~~and~~ excellent customer service, and strong risk management.

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The Company manages the Banks under a uniform strategic ~~objectives,~~objective, with one set of uniform policies consistently applied by one executive management team. Within this environment, the Company believes that the ability to make customer decisions locally enhances management's motivation, service levels and, as a consequence, the Company's financial results. As such, while most back-office functions are consolidated at the holding company level, branding and decision-making, including credit decisions and pricing, remain largely local in order to better meet the needs of bank customers and further motivate the Banks’ commercial, business and retail bankers. These credit decisions, at the local level, are executed through corporate policies overseen by the Company's credit department.

The competition for loans and leases and deposits remains intense. While the economy has improved in 2017, the Company expects the operating environment to remain challenging. The volume of loan and lease originations and loan and lease losses will depend, to a large extent, on how the economy performs.strong. Loan ~~and lease growth~~ and deposit growth are also ~~greatly~~ influenced by the rate-setting actions of the Board of Governors of the Federal Reserve System ~~(“FRB”~~(the "FRB"). ~~A sustained, low interest~~Based on management's scenario analysis of deposit sensitivity to the current rate environment ~~with a flat~~and customer's demand for non-depository investment alternatives, it is expected there could be further deposit mix migration and increased deposit sensitivity to interest ~~rate curve may~~rates which will negatively impact ~~on the Company's yields~~net interest income and net interest margin. ~~While~~It is management's expectation that even should interest rates rise, margin may compress given the ~~company~~above factors as rates on deposit products continue to "catch up" with the swift rise in short term rates over the last year.

Management expects pressure on the net interest margin to continue for a quarter or two after the Federal Reserve stops increasing rates, after which the net interest margin is ~~slightly asset sensitive~~expected to stabilize and then increase as loans continue to reprice into the higher rate environment faster than time deposits and other funding sources. Net interest income models, using a projected flat balance sheet with stable deposit balances and an average sensitivity of deposit rates of approximately 39% to market rates, short term increase in rates will positively affect the Company's net interest income, net interest spread, and net interest margin.

As discussed above, should ~~benefit~~reality materially deviate from ~~rising~~the above assumptions, changes in interest rates ~~these rate increases~~ could also precipitate a change in the mix and volume of the Company's deposits and loans. The future operating results of the Company will depend on its ability to maintain or increase the current net interest ~~margin, while minimizing exposure to~~income, manage credit risk, ~~along with increasing~~increase sources of non-interest income, while ~~controlling the growth of~~managing non-interest expenses.

The Company and the Banks are supervised, examined and regulated by the FRB. As a Massachusetts-chartered ~~savings bank and~~ trust company, ~~respectively,~~ Brookline Bank ~~and First Ipswich are~~is also subject to regulation under the laws of the Commonwealth of Massachusetts and the jurisdiction of the Massachusetts Division of Banks. As a Rhode Island-chartered financial institution, BankRI is also subject to regulation under the laws of the State of Rhode Island and the jurisdiction of the Banking Division of the Rhode Island Department of Business Regulation. As a New York-chartered commercial bank, PCSB Bank is subject to regulation, supervision and examination the New York State Department of Financial Services. The FDIC continues to insure each of the Banks’ deposits up to $250,000 per depositor. ~~Additionally, as~~As previously disclosed, on July 31, 2019, Brookline Bank converted its charter from a Massachusetts savings bank to a Massachusetts-chartered ~~savings bank, Brookline Bank is also insured by~~trust company and ended its membership in the Depositors Insurance Fund ~~(“DIF”~~(the “DIF”), a private industry-sponsored ~~company. The~~fund which insures Massachusetts-chartered bank deposit balances in excess of federal deposit insurance coverage. Brookline Bank’s growth in deposit size necessitated Brookline Bank’s withdrawal from the DIF ~~insures savings bank~~and the concurrent charter conversion of Brookline Bank. Brookline Bank’s deposit accounts will continue to be insured by the deposit insurance fund of the FDIC up to applicable limits. Term deposits in excess of the FDIC insurance ~~limits. As such, Brookline~~coverage as of July 31, 2019 will continue to be insured by the DIF until they reach maturity.

On January 1, 2023, the Company completed its previously announced acquisition (the “merger”) of PCSB. Pursuant to the merger agreement, each share of PCSB common stock outstanding at the effective time of the merger was converted into the right to receive, at the holder’s election, either $22.00 in cash consideration or 1.3284 shares of Company common stock for each share of PCSB common stock, subject to allocation procedures to ensure that 60% of the outstanding shares of PCSB common stock was converted to Company common stock. Subsequent to the acquisition, PCSB Bank, ~~offers 100% insurance on all deposits~~operates as a ~~result~~separate subsidiary of ~~a combination~~the Company and has 15 banking offices throughout the Lower Hudson Valley of ~~insurance from the FDIC and the DIF.~~New York State.

The Company’s common stock is traded on the Nasdaq Global Select Market^SM under the symbol “BRKL.”

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Selected Financial Data

The following is based in part on, and should be read in conjunction with, the consolidated financial statements and accompanying notes, and other information appearing elsewhere in this Quarterly Report on Form 10-Q.


	At and for the Three Months Ended
	March 31,			December 31,			September 30,			June 30,			March 31,
	2023			2022			2022			2022			2022
	(Dollars in Thousands, Except Per Share Data)
PER COMMON SHARE DATA
Earnings per share - Basic	$	0.09		$	0.39		$	0.39		$	0.33		$	0.32
Earnings per share - Diluted	0.09			0.39			0.39			0.33			0.32
Book value per share (end of period)	13.14			12.91			12.54			12.63			12.65
Tangible book value per share (end of period) (1)	10.08			10.80			10.43			10.51			10.56
Dividends paid per common share	0.135			0.135			0.130			0.130			0.125
Stock price (end of period)	10.50			14.15			11.65			13.31			15.82

PERFORMANCE RATIOS (2)
Net interest margin (taxable equivalent basis)	3.36		%	3.81		%	3.80		%	3.56		%	3.49		%
Return on average assets	0.27		%	1.34		%	1.40		%	1.18		%	1.16		%
Return on average tangible assets (1)	0.28		%	1.37		%	1.43		%	1.21		%	1.18		%
Return on average stockholders' equity	2.61		%	12.09		%	12.29		%	10.32		%	9.91		%
Return on average tangible stockholders' equity (1)	3.43		%	14.48		%	14.72		%	12.39		%	11.84		%
Dividend payout ratio (1)	158.33		%	34.94		%	33.07		%	39.81		%	39.28		%
Efficiency ratio (3)	65.44		%	53.01		%	52.98		%	56.95		%	56.37		%

ASSET QUALITY RATIOS
Net loan and lease charge-offs as a percentage of average loans and leases (annualized)	0.02		%	0.02		%	(0.01)		%	0.07		%	0.11		%
Nonperforming loans and leases as a percentage of total loans and leases	0.31		%	0.19		%	0.24		%	0.28		%	0.35		%
Nonperforming assets as a percentage of total assets	0.25		%	0.17		%	0.21		%	0.25		%	0.31		%
Total allowance for loan and lease losses as a percentage of total loans and leases	1.31		%	1.29		%	1.27		%	1.28		%	1.32		%

CAPITAL RATIOS
Stockholders' equity to total assets	10.11		%	10.80		%	11.08		%	11.38		%	11.37		%
Tangible equity ratio (1)	7.94		%	9.20		%	9.39		%	9.65		%	9.67		%

FINANCIAL CONDITION DATA
Total assets	$	11,522,485		$	9,185,836		$	8,695,708		$	8,514,230		$	8,633,736
Total loans and leases	9,246,965			7,644,388			7,421,304			7,291,912			7,223,130
Allowance for loan and lease losses	120,865			98,482			94,169			93,188			95,463
Investment securities available-for-sale	1,067,032			656,766			675,692			717,818			730,562


Goodwill and identified intangible assets	271,302			162,208			162,329			162,449			162,569
Total deposits	8,456,462			6,522,146			6,735,605			6,894,457			7,094,378
Total borrowed funds	1,630,102			1,432,652			758,768			478,200			392,897
Stockholders' equity	1,165,066			992,125			963,618			968,496			981,935



													(Continued)

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At and for the Three Months Ended
September 30, June 30, March 31, December 31, September 30,
2017 2017 2017 2016 2016
(Dollars in Thousands, Except Per Share Data)
PER COMMON SHARE DATA
Earnings per share - Basic $ 0.20
$ 0.20
$ 0.19
$ 0.19
$ 0.19
Earnings per share - Diluted 0.20
0.20
0.19
0.19
0.19
Book value per share (end of period) 10.52
10.42
10.00
9.88
9.90
Tangible book value per share (end of period) (1) 8.63
8.52
7.93
7.81
7.81
Dividends paid per common share 0.09
0.09
0.09
0.09
0.09
Stock price (end of period) 15.50
14.60
15.65
16.40
12.19

PERFORMANCE RATIOS (2)
Net interest margin (taxable equivalent basis) 3.57 % 3.59 % 3.53 % 3.40 % 3.48 %
Return on average assets 0.92 % 0.91 % 0.83 % 0.83 % 0.86 %
Return on average tangible assets (1) 0.94 % 0.93 % 0.85 % 0.85 % 0.88 %
Return on average stockholders' equity 7.64 % 7.76 % 7.58 % 7.59 % 7.83 %
Return on average tangible stockholders' equity (1) 9.31 % 9.58 % 9.55 % 9.60 % 9.94 %
Dividend payout ratio (1) 44.90 % 46.28 % 47.23 % 47.80 % 46.60 %
Efficiency ratio (3) 56.37 % 57.93 % 48.92 % 56.92 % 57.89 %

ASSET QUALITY RATIOS
Net loan and lease charge-offs as a percentage of average loans and leases (annualized) 0.14 % 0.17 % 0.07 % 0.62 % 0.04 %
Nonperforming loans and leases as a percentage of total loans and leases 0.71 % 0.76 % 0.83 % 0.74 % 0.70 %
Nonperforming assets as a percentage of total assets 0.66 % 0.71 % 0.73 % 0.64 % 0.61 %
Total allowance for loan and lease losses as a percentage of total loans and leases 1.16 % 1.17 % 1.21 % 0.99 % 1.10 %
Allowance for loan and lease losses related to originated loans and leases as a percentage of originated loans and leases (1) 1.20 % 1.20 % 1.25 %
1.03 %
1.15 %

CAPITAL RATIOS
Stockholders' equity to total assets 12.04 % 11.95 % 10.83 % 10.80 % 10.91 %
Tangible equity ratio (1) 10.09 % 9.99 % 8.79 % 8.73 % 8.82 %

FINANCIAL CONDITION DATA
Total assets $ 6,686,284
$ 6,658,067
$ 6,497,721
$ 6,438,129
$ 6,380,312
Total loans and leases 5,639,440
5,537,406
5,461,779
5,398,864
5,332,300
Allowance for loan and lease losses 65,413
64,521
66,133
53,666
58,892
Investment securities available-for-sale 522,910
540,976
528,433
523,634
524,295
Investment securities held-to-maturity 107,738
108,963
100,691
87,120
77,094
Goodwill and identified intangible assets 144,453
144,972
145,491
146,023
146,644
Total deposits 4,805,683
4,709,419
4,651,903
4,611,076
4,564,906
(Continued)


												At and for the Three Months Ended
	At and for the Three Months Ended											March 31,		December 31,		September 30,		June 30,		March 31,
	September 30,		June 30,		March 31,		December 31,		September 30,			2023		2022		2022		2022		2022
	2017		2017		2017		2016		2016			(Dollars in Thousands, Except Per Share Data)
	(Dollars in Thousands, Except Per Share Data)

Total borrowed funds	985,895		1,066,643		1,056,785		1,044,086		1,022,653
Stockholders' equity	804,762		795,618		703,873		695,544		696,371

EARNINGS DATA											EARNINGS DATA
Net interest income	$	56,843	$	55,583	$	53,098	$	51,854	$	52,350	Net interest income	$	86,049	$	80,030	$	78,026	$	71,867	$	69,848
Provision for credit losses	2,911		873		13,402		3,215		2,215
Provision (credit) for credit losses											Provision (credit) for credit losses	25,542		5,725		2,835		227		(164)
Non-interest income	5,973		4,477		15,908		5,430		5,329		Non-interest income	12,937		9,056		6,834		6,928		5,529
Non-interest expense	35,408		34,795		33,756		32,607		33,388		Non-interest expense	64,776		47,225		44,959		44,871		42,487
Net income	15,366		14,880		13,445		13,279		13,617		Net income	7,560		29,695		30,149		25,195		24,705

(1) Refer to "Non-GAAP Financial Measures and Reconciliations to GAAP".

(2) All performance ratios are annualized and are based on average balance sheet amounts, where applicable.

(3) Efficiency ratio is calculated by dividing non-interest expense by the sum of non-interest income and net interest income.

Executive Overview

~~Growth~~Balance Sheet

Total assets ~~of $6.7~~increased $2.3 billion to $11.5 billion as of ~~September 30, 2017 increased $248.2 million, or 5.1% on an annualized basis,~~March 31, 2023 from $9.2 billion as of December 31, ~~2016.~~2022. The increase was primarily driven by ~~increases in loans~~the acquisition of PCSB Bank.

Cash and ~~leases.~~cash equivalents increased $103.4 million to $486.3 million as of March 31, 2023 from $383.0 million as of December 31, 2022.

Total investment securities increased $410.3 million to $1.1 billion as of March 31, 2023 from $656.8 million as of December 31, 2022.

Total loans and leases ~~of $5.6~~increased $1.6 billion to $9.2 billion as of ~~September 30, 2017 increased $240.6 million, or 5.9% on an annualized basis,~~March 31, 2023 from $7.6 billion as of December 31, ~~2016.~~2022. The Company's commercial loan portfolios, which are comprised of commercial real estate loans and commercial loans and leases, totaled ~~$4.6~~$7.8 billion, or ~~81.8%~~83.9% of total loans and leases as of ~~September 30, 2017,~~March 31, 2023, an increase of ~~$200.3 million, or 6.1% on an annualized basis,~~$1.3 billion from ~~$4.4~~$6.4 billion, or ~~81.8%~~84.0% of total loans and leases as of December 31, ~~2016.~~2022.

Paycheck Protection Program ("PPP") loans increased $0.2 million to $0.5 million as of March 31, 2023 from $0.3 million as of December 31, 2022, due to the acquisition of PCSB Bank.

Total deposits ~~of $4.8~~increased $1.9 billion to $8.5 billion as of ~~September 30, 2017 increased $194.6 million, or 5.6% on an annualized basis,~~March 31, 2023 from ~~$4.6~~$6.5 billion as of December 31, ~~2016.~~2022. Core deposits, which include demand checking, NOW, money market and savings accounts, totaled ~~$3.6~~$6.1 billion, or ~~75.7%~~72.3% of total deposits as of ~~September 30, 2017,~~March 31, 2023, an increase of ~~$68.3~~$827.3 million ~~or 2.6% on an annualized basis,~~ from ~~$3.6~~$5.3 billion, or ~~77.4%~~81.0% of total deposits as of December 31, ~~2016.~~2022. Certificate of deposit balances totaled $1.4 billion, or 16.1% of total deposits as of March 31, 2023, an increase of $434.8 million from $928.1 million, or 14.2% of total deposits as of December 31, 2022. Brokered deposits totaled $1.0 billion, or 11.6% of total deposits as of March 31, 2023, an increase of $672.2 million from $0.3 billion, or 4.8% of total deposits as of December 31, 2022.

Total borrowed funds increased $197.5 million to $1.6 billion as of March 31, 2023 from $1.4 billion as of December 31, 2022.

Asset Quality

Nonperforming assets as of ~~September 30, 2017~~March 31, 2023 totaled ~~$44.4~~$29.0 million, or ~~0.66%~~0.25% of total assets, compared to ~~$41.5~~$15.3 million, or ~~0.64%~~0.17% of total assets, as of December 31, ~~2016.~~2022. Net charge-offs for the three months ended ~~September 30, 2017~~March 31, 2023 were ~~$2.0~~$0.5 million, or ~~0.14%~~0.02% of average loans and leases on an annualized basis, compared to ~~$0.5~~$1.9 million, or ~~0.04%~~0.11% of average loans and leases on an annualized basis, for the three months ended ~~September 30, 2016. The increase in nonperforming loans and leases and nonperforming assets was primarily driven by two taxi medallion loans and two commercial loans that were placed on nonaccrual.~~March 31, 2022.

The ratio of the allowance for loan and lease losses to total loans and leases was ~~1.16%~~1.31% as of ~~September 30, 2017,~~March 31, 2023, compared to ~~0.99%~~1.29% as of December 31, ~~2016. Excluding the loans acquired from BankRI and First Ipswich,~~2022.

The ratio of the allowance for loan and lease losses ~~related~~ to ~~originated~~nonaccrual loans and leases ~~as a percentage of the total originated loan and lease portfolio~~ was ~~1.20%~~424.77% as of ~~September 30, 2017,~~March 31, 2023, compared to ~~1.03%~~661.22% as of December 31, ~~2016. The Company continued to employ its historical underwriting methodology throughout the three month period ended September 30, 2017. Refer also to Note 5, "Allowance for Loan and Lease Losses."~~2022.

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Capital Strength

The Company is a "well-capitalized" bank holding company as defined in the FRB's Regulation Y. The Company's common equity Tier 1 ~~Capital Ratio~~capital ratio was ~~12.07%~~10.66% as of ~~September 30, 2017,~~March 31, 2023, compared to ~~10.48%~~12.05% as of December 31, ~~2016.~~2022. The Company's Tier 1 ~~Leverage Ratio~~leverage ratio was ~~10.45%~~8.78% as of ~~September 30, 2017,~~March 31, 2023, compared to ~~9.16%~~10.26% as of December 31, ~~2016.~~2022. As of ~~September 30, 2017,~~March 31, 2023, the Company's Tier 1 ~~Risk-Based Capital Ratio~~risk-based capital ratio was ~~12.38%~~10.76%, compared to ~~10.79%~~12.18% as of December 31,

~~2016.~~ 2022. The Company's Total ~~Risk-Based Capital Ratio~~risk-based capital ratio was ~~14.92%~~12.85% as of ~~September 30, 2017,~~March 31, 2023, compared to ~~13.20%~~14.44% as of December 31, ~~2016.~~2022.

The Company's ratio of stockholders' equity to total assets was ~~12.04%~~10.11% and 10.80% as of ~~September 30, 2017~~March 31, 2023 and December 31, ~~2016,~~2022, respectively. The Company's tangible equity ratio was ~~10.09%~~7.94% and ~~8.73%~~9.20% as of ~~September 30, 2017~~March 31, 2023 and December 31, ~~2016,~~2022, respectively. The increase in the ratio of stockholders' equity to total assets and the tangible equity ratio is due to the Company's new issuance in the amount of 5,951,250 shares of the Company’s common stock at a price to the public of $14.50 per share on May 2, 2017. Refer to ~~“Stockholder's Equity and Dividends"~~ ~~below for further discussion.~~

Net Income

For the three months ended ~~September 30, 2017,~~March 31, 2023, the Company reported net income of ~~$15.4~~$7.6 million, or ~~$0.20~~$0.09 per basic and diluted share, ~~an increase~~a decrease of ~~$1.7~~$17.1 million, or ~~17.1% on an annualized basis,~~69.4%, from ~~$13.6~~net income of $24.7 million, or ~~$0.19~~$0.32 per basic and diluted share, for the three months ended ~~September 30, 2016.~~March 31, 2022. This ~~increase~~decrease in net income is primarily the result of an increase in ~~net interest income~~the provision for credit losses of ~~$4.5~~$25.7 million and an increase in non-interest ~~income of $0.6 million, offset by an increase in the provision for credit losses of $0.7 million, an increase in non-interest~~ expense of ~~$2.0~~$22.3 million, ~~and an increase in provision for income taxes of $0.5 million. Refer to~~ ~~“Results of Operations"~~ ~~below for further discussion.~~

For the nine months ended September 30, 2017, the Company reported net income of $43.7 million, or $0.59 per basic and diluted share, up $4.6 million, or 15.7% on an annualized basis, from $39.1 million, or $0.56 per basic share, for the nine months ended September 30, 2016. This increase is the result ofpartially offset by an increase in net interest income of ~~$13.7~~$16.2 million, an increase in non-interest income of ~~$9.2~~$7.4 million, ~~offset by an increase~~and a decrease in the ~~provision for credit losses of $10.0 million, an increase in non-interest expense of $6.2 million, an increase in~~ provision for income taxes of ~~$2.1 million, and a decrease in net income attributed to noncontrolling interest of $0.1~~$7.2 million. Refer to “Results of Operations" below for further discussion.

The annualized return on average assets was ~~0.92%~~0.27% for the three months ended ~~September 30, 2017,~~March 31, 2023, compared to ~~0.86%~~1.16% for the three months ended ~~September 30, 2016.~~March 31, 2022. The annualized return on average stockholders' equity was ~~7.64%~~2.61% for the three months ended ~~September 30, 2017,~~March 31, 2023, compared to ~~7.83%~~9.91% for the three months ended ~~September 30, 2016.~~March 31, 2022.

The net interest margin was ~~3.57%~~3.36% for the three months ended ~~September 30, 2017, up~~March 31, 2023, down from ~~3.48%~~3.49% for the three months ended ~~September 30, 2016.~~March 31, 2022. The ~~increase~~decrease in the net interest margin is a result of an increase in the yield on interest-earning assets by 15 basis points to 4.25% for the three months ended September 30, 2017 from 4.10% for the three months ended September 30, 2016, partially offset by an increase of 6165 basis points in the Company's overall cost of funds (including non-interest-bearing demand checking accounts) to ~~0.71%~~1.94% for the three months ended ~~September 30, 2017~~March 31, 2023 from ~~0.65%~~0.29% for the three months ended ~~September 30, 2016.~~

~~The net interest margin was 3.56% for the nine months ended September 30, 2017, compared to 3.46% for the nine months ended September 30, 2016. The~~March 31, 2022, partially offset by an increase ~~in the net interest margin in a highly competitive interest rate environment is, in part, the result of an increased~~ in the yield on interest-earning assets ~~by 12~~of 140 basis points to ~~4.17%~~5.10% for the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2023 from ~~4.05%~~3.70% for the ~~nine~~three months ended September 30, 2016 partially offset by an increase of 3 basis points in interest-bearing liabilities to 0.81% for the nine months ended September 30, 2017 from 0.78% for the nine months ended September 30, 2016.March 31, 2022.

The ~~Company's~~Company’s net interest margin and net interest income ~~has shown improvement from~~is sensitive to the ~~most recent low interest rate environment. As~~structure and level of interest rates ~~rise, the Company's net interest margin and net interest income may continue to be under pressure due to~~as well as competitive pricing in all loan ~~categories~~ and ~~the Company’s ability to contain its cost of funds.~~deposit categories.

Critical Accounting Policies and Estimates

The SEC defines “critical accounting policies” as those involving significant judgments and difficult or complex assumptions by management, often as a result of the need to make estimates about matters that are inherently uncertain or variable, which have, or could have, a material impact on the carrying value of certain assets or net income. The preparation of financial statements in accordance with U.S. generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, income and expenses, and disclosure of contingent assets and liabilities. Actual results could differ from those estimates. As discussed in the Company’s ~~2016~~2022 Annual Report on Form 10-K, management has identified the ~~valuation of available-for-sale securities, accounting for assets and liabilities acquired, the~~ determination of the allowance for ~~loan~~credit losses and ~~lease losses,~~ the review of goodwill ~~and intangibles~~ for impairment ~~income tax accounting, and valuation of deferred tax assets~~ as the Company’s most critical accounting policies.

Recent Accounting Developments

In March 2023, the FASB issued ASU 2023-02, "Investments – Equity Method and Joint Ventures (Topic 323), Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method" which allows entities to use the proportional amortization method to account for tax equity investments, under certain conditions. This ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years for public entities. Management has determined that ASU 2023-02 does apply to the Company and is currently determining the impact as of March 31, 2023.

Non-GAAP Financial Measures and Reconciliation to GAAP

In addition to evaluating the Company’s results of operations in accordance with GAAP, management periodically supplements this evaluation with an analysis of certain non-GAAP financial measures, such as operating earnings metrics, the return on average tangible assets, return on average tangible equity, the tangible equity ratio, tangible book value per share, and dividend payout ~~ratio, and the~~

~~ratio of the allowance for loan and lease losses related to originated loans and leases as a percentage of originated loans and leases.~~ratio. Management believes that these non-GAAP financial measures provide information useful to investors in understanding the Company’s underlying operating performance and trends, and facilitates comparisons with the performance assessment of financial performance, including non-interest expense control, while the tangible equity ratio and tangible book value per share are used to analyze the relative strength of the Company’s capital position.

Table of Contents

The following table ~~summarizes~~reconciles the Company’s operating earnings, operating return on average assets and operating return on average stockholders’ equity for the periods indicated:

At and for the Three Months Ended
September 30, At and for the Nine Months Ended
September 30,
2017 2016 2017 2016

Net income, as reported $ 15,366
$ 13,617
$ 43,691
$ 39,083
Adjustments to arrive at operating earnings:
Merger and acquisition-related expenses 205
—
205
—
Tax effect (70 ) —
(72 ) —
Total adjustments, net of tax 135
—
133
—
Operating earnings $ 15,501
$ 13,617
$ 43,824
$ 39,083

Basic earnings per share, as reported $ 0.20
$ 0.19
$ 0.59
$ 0.56
Adjustments to arrive at basic operating earnings per share:
Merger and acquisition-related expenses —
—
—
—
Total adjustments per share —
—
—
—
Basic operating earnings per share $ 0.20
$ 0.19
$ 0.59
$ 0.56

Average total assets $ 6,681,042
$ 6,360,097
$ 6,567,101
$ 6,230,612
Operating return on average assets (annualized) 0.93 % 0.86 % 0.89 % 0.84 %

Average total stockholders’ equity $ 804,666
$ 695,205
$ 760,447
$ 686,134
Operating return on average stockholders’ equity (annualized) 7.71 % 7.83 % 7.68 % 7.59 %



	At and for the Three Months Ended March 31,
	2023			2022
	(Dollars in Thousands)
Reported Pretax Income	$	8,668		$	33,050

Less:
Security gains	1,701			—
Add:
Day 1 PCSB CECL provision	16,744			—
Merger and acquisition expense (1)	6,409			—
Operating Pretax Income	$	30,120		33,050
Estimated effective tax rate	22.7		%	25.2		%
Estimated taxes	6,837			8,345
Operating earnings after tax	$	23,283		$	24,705

Operating earnings per common share:
Basic	$	0.27		$	0.32
Diluted	$	0.27		$	0.32



(1) Merger and acquisition expense related to the acquisition of PCSB.

The following ~~table summarizes~~tables reconcile the Company’s return on average tangible assets and return on average tangible stockholders’ equity for the periods indicated:



	Three Months Ended
	March 31, 2023		December 31, 2022		September 30, 2022		June 30, 2022		March 31, 2022
	(Dollars in Thousands)
Operating earnings	$	23,283	$	30,015	$	31,222	$	25,730	$	24,705

Average total assets	$	11,131,087	$	8,857,631	$	8,586,420	$	8,515,330	$	8,531,043
Less: Average goodwill and average identified intangible assets, net	278,135		162,266		162,387		162,507		162,632
Average tangible assets	$	10,852,952	$	8,695,365	$	8,424,033	$	8,352,823	$	8,368,411

Return on average assets (annualized)	0.27%		1.34%		1.40%		1.18%		1.16%
Less:
Security gains	0.05%		0.01%		—%		—%		—%
Add:
Day 1 PCSB CECL provision	0.47%		—%		—%		—%		—%
Merger and acquisition expenses	0.18%		0.02%		0.04%		0.02%		—%

Operating return on average assets (annualized)	0.87%		1.35%		1.44%		1.20%		1.16%

Return on average tangible assets (annualized)	0.28%		1.37%		1.43%		1.21%		1.18%
Less:
Security gains	0.05%		0.01%		—%		—%		—%

Table of Contents


	Three Months Ended																Three Months Ended
	September 30, 2017			June 30, 2017			March 31, 2017			December 31, 2016			September 30, 2016				March 31, 2023		December 31, 2022		September 30, 2022		June 30, 2022		March 31, 2022
	(Dollars in Thousands)																(Dollars in Thousands)
Net income, as reported	$	15,366		$	14,880		$	13,445		$	13,279		$	13,617
Add:																Add:
Day 1 PCSB CECL provision																Day 1 PCSB CECL provision	0.48%		—%		—%		—%		—%
Merger and acquisition expenses																Merger and acquisition expenses	0.18%		0.02%		0.04%		0.02%		—%

Average total assets	$	6,681,042		$	6,556,665		$	6,461,183		$	6,425,983		$	6,360,097
Less: Average goodwill and average identified intangible assets, net	144,747			145,269			145,778			146,382			146,997
Average tangible assets	$	6,536,295		$	6,411,396		$	6,315,405		$	6,279,601		$	6,213,100

Return on average tangible assets (annualized)	0.94		%	0.93		%	0.85		%	0.85		%	0.88		%
Operating return on average tangible assets (annualized)																Operating return on average tangible assets (annualized)	0.89%		1.38%		1.47%		1.23%		1.18%

Average total stockholders' equity	$	804,666		$	766,529		$	709,095		$	699,749		$	695,205		Average total stockholders' equity	$	1,159,635	$	982,306	$	981,379	$	976,167	$	997,293
Less: Average goodwill and average identified intangible assets, net	144,747			145,269			145,778			146,382			146,997			Less: Average goodwill and average identified intangible assets, net	278,135		162,266		162,387		162,507		162,632
Average tangible stockholders' equity	$	659,919		$	621,260		$	563,317		$	553,367		$	548,208		Average tangible stockholders' equity	$	881,500	$	820,040	$	818,992	$	813,660	$	834,661

Return on average stockholders' equity (annualized)																Return on average stockholders' equity (annualized)	2.61%		12.09%		12.29%		10.32%		9.91%
Less:																Less:
Security gains																Security gains	0.45%		0.11%		—%		—%		—%
Add:																Add:
Day 1 PCSB CECL provision																Day 1 PCSB CECL provision	4.46%		—%		—%		—%		—%
Merger and acquisition expenses																Merger and acquisition expenses	1.71%		0.21%		0.36%		0.16%		—%

Operating return on average stockholders' equity (annualized)																Operating return on average stockholders' equity (annualized)	8.33%		12.19%		12.65%		10.48%		9.91%

Return on average tangible stockholders' equity (annualized)	9.31		%	9.58		%	9.55		%	9.60		%	9.94		%	Return on average tangible stockholders' equity (annualized)	3.43%		14.48%		14.72%		12.39%		11.84%
Less:																Less:
Security gains																Security gains	0.60%		0.13%		—%		—%		—%
Add:																Add:
Day 1 PCSB CECL provision																Day 1 PCSB CECL provision	5.87%		—%		—%		—%		—%
Merger and acquisition expenses																Merger and acquisition expenses	2.25%		0.26%		0.43%		0.20%		—%

Table of Contents

Three Months Ended

March 31,
2023

December 31,
2022

September 30,
2022

June 30,
2022

March 31,
2022

(Dollars in Thousands)

Operating return on average tangible stockholders' equity (annualized)

10.95%

14.61%

15.15%

12.59%

11.84%


	Three Months Ended
	March 31, 2023		December 31, 2023		September 30, 2023		June 30, 2022		March 31, 2022
	(Dollars in Thousands)
Net income, as reported	$	7,560	$	29,695	$	30,149	$	25,195	$	24,705

Average total assets	$	11,131,087	$	8,857,631	$	8,586,420	$	8,515,330	$	8,531,043
Less: Average goodwill and average identified intangible assets, net	278,135		162,266		162,387		162,507		162,632
Average tangible assets	$	10,852,952	$	8,695,365	$	8,424,033	$	8,352,823	$	8,368,411

Return on average tangible assets (annualized)	0.28%		1.37%		1.43%		1.21%		1.18%

Average total stockholders' equity	$	1,159,635	$	982,306	$	981,379	$	976,167	$	997,293
Less: Average goodwill and average identified intangible assets, net	278,135		162,266		162,387		162,507		162,632
Average tangible stockholders' equity	$	881,500	$	820,040	$	818,992	$	813,660	$	834,661

Return on average tangible stockholders' equity (annualized)	3.43%		14.48%		14.72%		12.39%		11.84%

The following ~~tables summarize~~table reconciles the Company's tangible equity ratio for the periods indicated:


	Three Months Ended
	March 31, 2023		December 31, 2022		September 30, 2022		June 30, 2022		March 31, 2022
	(Dollars in Thousands)
Total stockholders' equity	$	1,165,066	$	992,125	$	963,618	$	968,496	$	981,935
Less: Goodwill and identified intangible assets, net	271,302		162,208		162,329		162,449		162,569
Tangible stockholders' equity	$	893,764	$	829,917	$	801,289	$	806,047	$	819,366

Total assets	$	11,522,485	$	9,185,836	$	8,695,708	$	8,514,230	$	8,633,736
Less: Goodwill and identified intangible assets, net	271,302		162,208		162,329		162,449		162,569
Tangible assets	$	11,251,183	$	9,023,628	$	8,533,379	$	8,351,781	$	8,471,167

Tangible equity ratio	7.94%		9.20%		9.39%		9.65%		9.67%

Table of Contents

Three Months Ended
September 30,
2017 June 30,
2017 March 31,
2017 December 31, 2016 September 30,
2016
(Dollars in Thousands)
Total stockholders' equity $ 804,762
$ 795,618
$ 703,873
$ 695,544
$ 696,371
Less: Goodwill and identified intangible assets, net 144,453
144,972
145,491
146,023
146,644
Tangible stockholders' equity $ 660,309
$ 650,646
$ 558,382
$ 549,521
$ 549,727

Total assets $ 6,686,284
$ 6,658,067
$ 6,497,721
$ 6,438,129
$ 6,380,312
Less: Goodwill and identified intangible assets, net 144,453
144,972
145,491
146,023
146,644
Tangible assets $ 6,541,831
$ 6,513,095
$ 6,352,230
$ 6,292,106
$ 6,233,668

Tangible equity ratio 10.09 % 9.99 % 8.79 % 8.73 % 8.82 %

The following ~~tables summarize~~table reconciles the Company's tangible book value per share for the periods indicated:


	Three Months Ended											Three Months Ended
	September 30, 2017		June 30, 2017		March 31, 2017		December 31, 2016		September 30, 2016			March 31, 2023		December 31, 2022		September 30, 2022		June 30, 2022		March 31, 2022
	(Dollars in Thousands)											(Dollars in Thousands)
Tangible stockholders' equity	$	660,309	$	650,646	$	558,382	$	549,521	$	549,727	Tangible stockholders' equity	$	893,764	$	829,917	$	801,289	$	806,047	$	819,366

Common shares issued	81,695,695		81,695,695		75,744,445		75,744,445		75,744,445		Common shares issued	96,998,075		85,177,172		85,177,172		85,177,172		85,177,172
Less:											Less:
Treasury shares	4,572,954		4,717,775		4,707,096		4,707,096		4,734,512		Treasury shares	7,734,891		7,731,445		7,730,945		7,995,888		7,037,464
Unallocated ESOP	150,921		159,510		168,099		176,688		185,787		Unallocated ESOP	—		—		4,833		11,442		18,051
Unvested restricted stock	471,702		457,966		476,854		476,854		476,938		Unvested restricted stock	598,049		601,495		601,995		497,297		500,098
Common shares outstanding	76,500,118		76,360,444		70,392,396		70,383,807		70,347,208		Common shares outstanding	88,665,135		76,844,232		76,839,399		76,672,545		77,621,559

Tangible book value per share	$	8.63	$	8.52	$	7.93	$	7.81	$	7.81	Tangible book value per share	$	10.08	$	10.80	$	10.43	$	10.51	$	10.56

The following table ~~summarizes~~reconciles the Company's dividend payout ratio for the periods indicated:


	Three Months Ended
	March 31, 2023		December 31, 2022		September 30, 2022		June 30, 2022		March 31, 2022
	(Dollars in Thousands)
Dividends paid	$	11,970	$	10,374	$	9,969	$	10,030	$	9,705

Net income, as reported	$	7,560	$	29,695	$	30,149	$	25,195	$	24,705

Dividend payout ratio	158.33%		34.94%		33.07%		39.81%		39.28%

Three Months Ended
September 30,
2017 June 30,
2017 March 31, 2017 December 31, 2016 September 30,
2016
(Dollars in Thousands)
Dividends paid $ 6,899
$ 6,887
$ 6,350
$ 6,348
$ 6,346

Net income, as reported $ 15,366
$ 14,880
$ 13,445
$ 13,279
$ 13,617

Dividend payout ratio 44.90 % 46.28 % 47.23 % 47.80 % 46.60 %

~~The following table summarizes the Company’s allowance for loan and lease losses related to originated loans and leases as a percentage~~Table of ~~total originated loans and leases for the periods indicated:~~

Contents

Three Months Ended
September 30,
2017 June 30,
2017 March 31, 2017 December 31, 2016 September 30,
2016

Allowance for loan and lease losses $ 65,413
$ 64,521
$ 66,133
$ 53,666
$ 58,892
Less: Allowance for acquired loan and lease losses 1,003
1,188
1,304
1,253
1,640
Allowance for originated loan and lease losses $ 64,410

$ 63,333

$ 64,829

$ 52,413

$ 57,252

Total loans and leases $ 5,639,440
$ 5,537,406
$ 5,461,779
$ 5,398,864
$ 5,332,300
Less: Total acquired loans and leases 260,196
271,157
295,055
315,304
346,377
Total originated loan and leases $ 5,379,244

$ 5,266,249

$ 5,166,724

$ 5,083,560

$ 4,985,923

Allowance for loan and lease losses related to originated loans and leases as a percentage of originated loan and leases 1.20 %
1.20 %
1.25 %
1.03 %
1.15 %

Financial Condition

Loans and Leases

The following table summarizes the Company's portfolio of ~~loans~~loan and ~~leases~~lease receivables as of the dates indicated:


	At March 31, 2023				At December 31, 2022
	Balance		Percent of Total		Balance		Percent of Total
	(Dollars in Thousands)
Commercial real estate loans:
Commercial real estate	$	3,986,676	43.1	%	$	3,046,746	39.9	%
Multi-family mortgage	1,356,546		14.7	%	1,150,597		15.1	%
Construction	267,192		2.9	%	206,805		2.7	%
Total commercial real estate loans	5,610,414		60.7	%	4,404,148		57.7	%
Commercial loans and leases:
Commercial	858,460		9.3	%	752,691		9.9	%
Equipment financing	1,245,742		13.5	%	1,216,585		15.9	%
Condominium association	42,444		0.5	%	46,966		0.6	%
PPP	503		—	%	257		—	%
Total commercial loans and leases	2,147,149		23.3	%	2,016,499		26.4	%
Consumer loans:
Residential mortgage	1,086,754		11.7	%	844,614		11.0	%
Home equity	345,673		3.7	%	322,622		4.2	%
Other consumer	56,975		0.6	%	56,505		0.7	%
Total consumer loans	1,489,402		16.0	%	1,223,741		15.9	%
Total loans and leases	9,246,965		100.0	%	7,644,388		100.0	%
Allowance for loan and lease losses	(120,865)				(98,482)
Net loans and leases	$	9,126,100			$	7,545,906

At September 30, 2017 At December 31, 2016
Balance
Percent
of Total
Balance
Percent
of Total
(Dollars in Thousands)
Commercial real estate loans:
Commercial real estate $ 2,119,440
37.6 % $ 2,050,382
38.1 %
Multi-family mortgage 743,912
13.2 % 731,186
13.5 %
Construction 165,657
2.9 % 136,999
2.5 %
Total commercial real estate loans 3,029,009
53.7 % 2,918,567
54.1 %
Commercial loans and leases:
Commercial 689,010
12.2 % 635,426
11.8 %
Equipment financing 842,516
14.9 % 799,860
14.8 %
Condominium association 53,770
1.0 % 60,122
1.1 %
Total commercial loans and leases 1,585,296
28.1 % 1,495,408
27.7 %
Consumer loans:
Residential mortgage 652,415
11.6 % 624,349
11.6 %
Home equity 356,982
6.3 % 342,241
6.3 %
Other consumer 15,738
0.3 % 18,299
0.3 %
Total consumer loans 1,025,135
18.2 % 984,889
18.2 %
Total loans and leases 5,639,440
100.0 % 5,398,864
100.0 %
Allowance for loan and lease losses (65,413 ) (53,666 )
Net loans and leases $ 5,574,027
$ 5,345,198

The following table sets forth the growth in the Company’s loan and lease portfolios during the ~~nine~~three months ended ~~September 30, 2017:~~March 31, 2023:


	At September 30, 2017		At December 31, 2016		Dollar Change		Percent Change (Annualized)			At March 31, 2023		At December 31, 2022		Dollar Change		Percent Change (Annualized)
	(Dollars in Thousands)									(Dollars in Thousands)
Commercial real estate	$	3,029,009	$	2,918,567	$	110,442	5.0	%	Commercial real estate	$	5,610,414	$	4,404,148	$	1,206,266	109.6	%
Commercial	1,585,296		1,495,408		89,888		8.0	%	Commercial	2,147,149		2,016,499		130,650		25.9	%
Consumer	1,025,135		984,889		40,246		5.4	%	Consumer	1,489,402		1,223,741		265,661		86.8	%
Total loans and leases	$	5,639,440	$	5,398,864	$	240,576	5.9	%	Total loans and leases	$	9,246,965	$	7,644,388	$	1,602,577	83.9	%
Less: PPP									Less: PPP	503		257		246		382.9	%
Total core loans and leases									Total core loans and leases	$	9,246,462	$	7,644,131	$	1,602,331	83.8	%

The Company's loan portfolio consists primarily of first mortgage loans secured by commercial, multi-family and residential real estate properties located in the Company's primary lending area, loans to business entities, including commercial lines of credit, loans to condominium associations and loans and leases used to finance equipment used by small businesses. The Company also provides financing for construction and development projects, home equity and other consumer loans.

The Company employs seasoned commercial lenders and retail bankers who rely on community and business contacts as well as referrals from customers, attorneys and other professionals to generate loans and deposits. Existing borrowers are also an important source of business since many of them have more than one loan outstanding with the Company. The Company's ability to originate loans depends on the strength of the economy, trends in interest rates, and levels of customer demand and market competition.

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The Company's current policy is that ~~the aggregate amount of loans outstanding~~a total credit exposure to ~~any~~ one ~~borrower or related entities~~obligor relationship may not exceed ~~$35.0~~$60.0 million unless approved by the ~~Board~~Company's Credit ~~Committee, a committee of the Company's Board of Directors.~~

Committee. As of ~~September 30, 2017,~~March 31, 2023, there ~~were ten borrowers~~was one borrower with loans and commitments over ~~$35.0~~$60.0 million. The total of those loans and commitments ~~were $424.8~~was $193.0 million, or ~~6.5%~~1.69% of total loans and commitments, as of ~~September 30, 2017.~~March 31, 2023. As of December 31, 2022, there were three borrowers with loans and commitments over $60.0 million. The total of those loans and commitments was $208.5 million, or 2.2% of total loans and commitments, as of December 31, 2022.

The Company has written underwriting policies to control the inherent risks in loan origination. The policies address approval limits, loan-to-value ratios, appraisal requirements, debt service coverage ratios, loan concentration limits and other matters relevant to loan underwriting.

Commercial Real Estate Loans

The commercial real estate portfolio is comprised of commercial real estate loans, multi-family mortgage loans, and construction loans and is the largest component of the Company's overall loan portfolio, representing ~~53.7%~~60.7% of total loans and leases outstanding as of ~~September 30, 2017.~~March 31, 2023.

Typically, commercial real estate loans are larger in size and involve a greater degree of risk than owner-occupied residential mortgage loans. Loan repayment is usually dependent on the successful operation and management of the properties and the value of the properties securing the loans. Economic conditions can greatly affect cash flows and property values.

A number of factors are considered in originating commercial real estate and multi-family mortgage loans. The qualifications and financial condition of the borrower (including credit history), as well as the potential income generation and the value and condition of the underlying property, are evaluated. When evaluating the qualifications of the borrower, the Company considers the financial resources of the borrower, the borrower's experience in owning or managing similar property and the borrower's payment history with the Company and other financial institutions. Factors considered in evaluating the underlying property include the net operating income of the mortgaged premises before debt service and depreciation, the debt service coverage ratio (the ratio of cash flow before debt service to debt service), the use of conservative capitalization rates, and the ratio of the loan amount to the appraised value. Generally, personal guarantees are obtained from commercial real estate loan borrowers.

Commercial real estate and multi-family mortgage loans are typically originated for terms of five to fifteen years with amortization periods of 20 to 30 years. Many of the loans are priced at inception on a fixed-rate basis generally for periods ranging from two to five years with repricing periods for longer-term loans. When possible, prepayment penalties are included in loan covenants on these loans. For commercial customers who are interested in loans with terms longer than five years, the Company offers loan level derivatives to accommodate customer need.

The Company's urban and suburban market area is characterized by a large number of apartment buildings, condominiums and office buildings. As a result, commercial real estate and multi-family mortgage lending has been a significant part of the Company's activities for many years. These types of loans typically generate higher yields, but also involve greater credit risk. Many of the Company's borrowers have more than one multi-family or commercial real estate loan outstanding with the Company.

The Company's commercial real estate portfolio is composed primarily of loans secured by apartment buildings ($~~741.6 million)~~1.3 billion), office buildings ($~~637.8~~838.7 million), retail stores ($~~507.2~~958.4 million), industrial properties ($~~358.6~~774.0 million), mixed-use properties ($~~214.1~~500.0 million), lodging services ($~~108.3~~194.6 million), and to food services ($~~42.7~~80.2 million) as of ~~September 30, 2017.~~March 31, 2023. At that date, ~~over 97.2%~~approximately 78.6% of the commercial real estate loans outstanding were secured by properties located in New England.

Construction and development financing is generally considered to involve a higher degree of risk than long-term financing on improved, occupied real estate and thus has lower concentration limits than do other commercial credit classes. Risk of loss on a construction loan is largely dependent upon the accuracy of the initial estimate of construction costs, the estimated time to sell or rent the completed property at an adequate price or rate of occupancy, and market conditions. If the estimates and projections prove to be inaccurate, the Company may be confronted with a project which, upon completion, has a value that is insufficient to assure full loan repayment.

Criteria applied in underwriting construction loans for which the primary source of repayment is the sale of the property are different from the criteria applied in underwriting construction loans for which the primary source of repayment is the stabilized cash flow from the completed project. For those loans where the primary source of repayment is from resale of the property, in addition to the normal credit analysis performed for other loans, the Company also analyzes project costs, the attractiveness of the property in relation to the market in which it is located and demand within the market area. For those construction loans where the source of repayment is the stabilized cash flow from the completed project, the Company analyzes

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not only project costs but also how long it might take to achieve satisfactory occupancy and the reasonableness of projected rental rates in relation to market rental rates.

Commercial Loans

The Company's commercial loan and lease portfolio is comprised of commercial loans, equipment financing loans and leases and condominium association loans ~~and~~which represented ~~28.1%~~23.3% of total loans outstanding as of ~~September 30, 2017.~~March 31, 2023.

The Company's commercial loan and lease portfolio is composed primarily of loans and leases to small to medium sized businesses ($~~489.9~~789.6 million), transportation services ($~~346.4~~389.7 million), food services ($189.7 million), recreation services ($~~145.9 million), food services ($118.1~~134.3 million), manufacturing ($~~97.5~~115.6 million), retail ($115.7 million), and rental and leasing services ($~~75.9 million) and retail ($70.5~~60.6 million) as of ~~September 30, 2017.~~March 31, 2023.

The Company provides commercial banking services to companies in its market area. Approximately ~~47.0%~~37.9% of the commercial loans outstanding as of ~~September 30, 2017~~March 31, 2023 were made to borrowers located in New England. The remaining ~~53.0%~~62.1% of the commercial loans outstanding were made to borrowers in other areas in the United States of America, primarily by the Company's equipment financing divisions. Product offerings include lines of credit, term loans, letters of credit, deposit services and cash management. These types of credit facilities have as their primary source of repayment cash flows from the operations of a business. Interest rates offered are available on a floating basis tied to the prime rate or a similar index or on a fixed-rate basis referenced on the Federal Home Loan Bank of Boston and New York ("~~FHLBB"~~FHLB") index.

Credit extensions are made to established businesses on the basis of loan purpose and assessment of capacity to repay as determined by an analysis of their financial statements, the nature of collateral to secure the credit extension and, in most instances, the personal guarantee of the owner of the business as well as industry and general economic conditions. The Company also participates in U.S. Government programs such as the ~~Small Business Administration (the "SBA") in both the~~SBA 7A program and as an SBA preferred lender. Included in the commercial loans balances are the PPP loans totaling $0.5 million as of March 31, 2023.

The Company’s equipment financing divisions focus on market niches in which its lenders have deep experience and industry contacts, and on making loans to customers with business experience. An important part of the Company’s equipment financing loan origination volume comes from equipment manufacturers and existing customers as they expand their operations. The equipment financing portfolio is composed primarily of loans to finance laundry, tow trucks, fitness, dry cleaning and convenience store equipment. Approximately ~~16.0%~~15.7% of the commercial loans outstanding in the equipment financing divisions were made to borrowers located primarily in the greater New York and New Jersey metropolitan area. Typically, the loans are priced at a fixed rate of interest and require monthly payments over their ~~three-~~3- to ~~seven-year~~7-year life. The yields earned on equipment financing loans are higher than those earned on the commercial loans made by the Banks because they involve a higher degree of credit risk. Equipment financing customers are typically small-business owners who operate with limited financial resources and who face greater risks when the economy weakens or unforeseen adverse events arise. Because of these characteristics, personal guarantees of borrowers are usually obtained along with liens on available assets. The size of loan is determined by an analysis of cash flow and other characteristics pertaining to the business and the equipment to be financed, based on detailed revenue and profitability data of similar operations.

Loans to condominium associations are for the purpose of funding capital improvements, are made for five- to ten-year terms and are secured by a general assignment of condominium association revenues. Among the factors considered in the underwriting of such loans are the level of owner occupancy, the financial condition and history of the condominium association, the attractiveness of the property in relation to the market in which it is located and the reasonableness of estimates of the cost of capital improvements to be made. Depending on loan size, funds are advanced as capital improvements are made and, in more complex situations, after completion of engineering inspections.

Consumer Loans

The consumer loan portfolio, which is comprised of residential mortgage loans, home equity loans and lines of credit, and other consumer loans, ~~and~~ represented ~~18.2%~~16.0% of total loans outstanding as of ~~September 30, 2017.~~March 31, 2023. The Company focuses its mortgage and home equity lending on existing and new customers within its branch networks in its urban and suburban marketplaces in the greater Boston and Providence metropolitan areas.

The Company originates adjustable- and fixed-rate residential mortgage loans secured by one- to four-family residences. Each residential mortgage loan granted is subject to a satisfactorily completed application, employment verification, credit history and a demonstrated ability to repay the debt. Generally, loans are not made when the loan-to-value ratio exceeds 80% unless private mortgage insurance is obtained and/or there is a financially strong guarantor. Appraisals are performed by outside independent fee appraisers.

In general, the Company maintains three-, five- and seven-year adjustable-rate mortgage loans and ten-year fixed-rate fully amortizing mortgage loans in its portfolio. Fixed-rate mortgage loans with maturities beyond ten years, such as 15- and

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30-year fixed-rate mortgages, are generally sold into the secondary market on a servicing-released basis. The Banks act as correspondent banks in these secondary-market transactions. Loan sales in the secondary market provide funds for additional lending and other banking activities.

Underwriting guidelines for home equity loans and lines of credit are similar to those for residential mortgage loans. Home equity loans and lines of credit are limited to no more than 80% of the appraised value of the property securing the loan including the amount of any existing first mortgage liens.

Other consumer loans have historically been a modest part of the Company's loan originations. As of ~~September 30, 2017,~~March 31, 2023, other consumer loans equaled ~~$15.7~~$57.0 million, or ~~0.3%~~0.6% of total loans outstanding.

Asset Quality

Criticized and Classified Assets

The Company's management rates certain loans and leases as "other assets especially ~~mentioned~~mentioned" ("OAEM")", "substandard" or "doubtful" based on criteria established under banking ~~regulations.These~~regulations. These loans and leases are collectively referred to as "criticized" assets. Loans and leases rated OAEM have potential weaknesses that deserve management's close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects of the loan or lease at some future date. Loans and leases rated as substandard are inadequately protected by the payment capacity of the obligor or of the collateral pledged, if any. Substandard loans and leases have a well-defined weakness or weaknesses that jeopardize the liquidation of debt and are characterized by the distinct possibility that the Company will sustain some loss if existing deficiencies are not corrected. Loans and leases rated as doubtful have well-defined weaknesses that jeopardize the orderly liquidation of debt and partial loss of principal is likely. As of ~~September 30, 2017,~~March 31, 2023, the Company had ~~$74.3~~$156.4 million of total ~~assets, including acquired~~ assets that were designated as criticized. This compares to ~~$70.4~~$108.2 million of assets designated as criticized as of December 31, ~~2016.~~2022. The increase of $48.2 million in criticized assets was primarily ~~due to the downgrade of several~~driven by increases in commercial real estate ~~loans, offset by~~relationships for the ~~payoffs of several criticized loans during the first nine~~three months ~~of 2017.~~ended March 31, 2023.

Nonperforming Assets

"Nonperforming assets" consist of ~~nonperforming~~nonaccrual loans and leases, other real estate owned ("OREO") and other repossessed assets. Under certain circumstances, the Company may restructure the terms of a loan or lease as a concession to a borrower, except for acquired loans and leases which are individually evaluated against expected performance on the date of acquisition. These restructured loans and leases are generally considered "nonperforming loans and leases" until a history of collection of at least six months on the restructured terms of the loan or lease has been established. OREO consists of real estate acquired through foreclosure proceedings and real estate acquired through acceptance of a deed in lieu of foreclosure. Other repossessed assets consist of assets that have been acquired through foreclosure that are not real estate and are included in other assets on the Company's unaudited consolidated balance sheets.

Accrual of interest on loans generally is discontinued when contractual payment of principal or interest becomes past due 90 days or, if in management's judgment, reasonable doubt exists as to the full timely collection of interest. ~~Exceptions may be made if the loan has matured and is in the process of renewal or is well-secured and in the process of collection.~~ When a loan is placed on nonaccrual status, interest accruals cease and all previously accrued and uncollected ~~accrued~~ interest is reversed and charged against current interest income. Interest payments on nonaccrual loans are generally applied to principal. If collection of the principal is reasonably assured, interest payments are recognized as income on the cash basis. Loans are generally returned to accrual status when principal and interest payments are current, full collectability of principal and interest is reasonably assured and a consistent record of at least six months of performance has been achieved.

In cases where a borrower experiences financial difficulties and the Company makes or reasonably expects to make certain concessionary modifications to contractual terms, the loan is classified as a ~~troubled debt restructured~~modified loan. In determining whether a debtor is experiencing financial difficulties, the Company considers, among other factors, if the debtor is in payment default or is likely to be in payment default in the foreseeable future without the modification, the debtor declared or is in the process of declaring bankruptcy, there is substantial doubt that the debtor will continue as a going concern, the debtor's entity-specific projected cash flows will not be sufficient to service its debt, or the debtor cannot obtain funds from sources other than the existing creditors at market terms for debt with similar risk characteristics.

~~Nonperforming assets are composed of nonaccrual loans and leases, OREO and other repossessed assets.~~ As of ~~September 30, 2017,~~March 31, 2023, the Company had nonperforming assets of ~~$44.4~~$29.0 million, representing ~~0.66%~~0.25% of total assets, compared to nonperforming assets of ~~$41.5~~$15.3 million, or ~~0.64%~~0.17% of total assets as of December 31, ~~2016.~~2022. The increase of $13.7 million in nonperforming assets was primarily ~~due~~driven by the inclusion of loans related to ~~an increase of $2.6~~one commercial customer totaling $5.1 million, ~~in OREO, as well as an increase of $0.4~~two construction customers totaling $3.2 million, ~~in repossessed assets~~and two commercial real estate customers totaling $4.2 million during the ~~first nine~~three months ~~of 2017.~~

ended March 31, 2023.

The Company evaluates the underlying collateral of each ~~nonperforming~~nonaccrual loan and lease and continues to pursue the collection of interest and principal. Management believes that the current level of nonperforming assets remains manageable relative to the size of the Company's loan and lease portfolio. If economic conditions were to worsen or if the marketplace were to experience prolonged economic stress, ~~management believes~~ it is likely that the level of nonperforming assets would increase, as would the level of charged-off loans.

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Past Due and Accruing

Accrual of interest on loans generally is discontinued when contractual payment of principal or interest becomes past due 90 days or, if in management's judgment, reasonable doubt exists as to the full timely collection of interest. Exceptions may be made if the loan has matured and is in the process of renewal or is well-secured and in the process of collection. When a loan is placed on nonaccrual status, interest accruals cease and uncollected accrued interest is reversed and charged against current interest income. Interest payments on nonaccrual loans are generally applied to principal. If collection of the principal is reasonably assured, interest payments are recognized as income on the cash basis. Loans are generally returned to accrual status when principal and interest payments are current, full collectability of principal and interest is reasonably assured and a consistent record of at least six consecutive months of performance has been achieved.

As of ~~September 30, 2017,~~March 31, 2023, the Company had $0.7 million loans and leases greater than 90 days past due and accruing, ~~of $2.5 million, or 0.04% of total loans and leases,~~ compared to ~~$7.1 million, or 0.13% of total~~minimal to no loans ~~and leases,~~ as of December 31, ~~2016, representing an decrease of $4.6 million.~~2022. The ~~decrease~~$0.7 million increase in loans and leases greater than 90 days past due and accruing ~~loans was~~is primarily due to ~~the payoffs of several past due acquired loans during the first nine months of 2017.~~a single commercial real estate relationship totaling $0.7 million.

The following table sets forth information regarding nonperforming assets for the periods indicated:


	At March 31, 2023			At December 31, 2022
	(Dollars in Thousands)
Nonperforming loans and leases:
Nonaccrual loans and leases:
Commercial real estate	$	4,589		$	607
Multi-family mortgage	—			—
Construction	3,883			707
Total commercial real estate loans	8,472			1,314

Commercial	5,495			464
Equipment financing	9,908			9,653
Condominium association	51			58
Total commercial loans and leases	15,454			10,175

Residential mortgage	3,449			2,680
Home equity	1,079			723
Other consumer	—			2
Total consumer loans	4,528			3,405

Total nonaccrual loans and leases	28,454			14,894


Other repossessed assets	508			408
Total nonperforming assets	$	28,962		$	15,302

Loans and leases past due greater than 90 days and accruing	$	726		$	33
Total delinquent loans and leases 61-90 days past due	4,190			2,218
Restructured loans and leases not included in nonperforming assets	12,708			16,385

Total nonperforming loans and leases as a percentage of total loans and leases	0.31		%	0.19		%
Total nonperforming assets as a percentage of total assets	0.25		%	0.17		%
Total delinquent loans and leases 61-90 days past due as a percentage of total loans and leases	0.05		%	0.03		%

At September 30, 2017 At December 31, 2016
(Dollars in Thousands)
Nonperforming loans and leases:
Nonaccrual loans and leases:
Commercial real estate $ 3,051
$ 5,340
Multi-family mortgage 792
1,404
Construction 860
—
Total commercial real estate loans 4,703
6,744

Commercial 22,367
22,974
Equipment financing 9,858
6,758
Total commercial loans and leases 32,225
29,732

Residential mortgage 1,969
2,501
Home equity 1,047
951
Other consumer 29
149
Total consumer loans 3,045
3,601

Total nonaccrual loans and leases 39,973
40,077

Other real estate owned 3,235
618
Other repossessed assets 1,163
781
Total nonperforming assets $ 44,371
$ 41,476

Loans and leases past due greater than 90 days and accruing $ 2,523
$ 7,077

Total nonperforming loans and leases as a percentage of total loans and leases 0.71 % 0.74 %
Total nonperforming assets as a percentage of total assets 0.66 % 0.64 %

~~Troubled Debt Restructured Loans and Leases~~

As of September 30, 2017, restructured loans included $5.0 million of commercial real estate loans, $0.8 million of multi-family mortgage loans, $17.3 million of commercial loans, $3.9 million of equipment financing loans and leases, $1.1 million of residential mortgage loans and $1.2 million of home equity loans. As of December 31, 2016, restructured loans included $4.9 million of commercial real estate loans, $2.0 million of multi-family mortgage loans, $13.7 million of commercial loans, $2.1 million of equipment financing loans and leases, $1.3 million of residential mortgage loans and $1.8 million of home equity loans. A restructured loan is a loan for which the maturity date was extended, the principal was reduced, and/or the interest rate was modified to drop the required monthly payment to a more manageable amount for the borrower.

~~The following table sets forth information regarding troubled debt restructured loans and leases at the dates indicated:~~

At September 30, 2017 At December 31, 2016
(Dollars in Thousands)
Troubled debt restructurings:

On accrual $ 14,024
$ 13,883
On nonaccrual 15,290
11,919
Total troubled debt restructurings $ 29,314
$ 25,802

~~Changes in troubled debt restructured loans and leases were as follows for the periods indicated:~~

Three Months Ended September 30, Nine Months Ended
September 30,
2017 2016 2017
2016
(Dollars in Thousands)
Balance at beginning of period $ 30,878
$ 31,314
$ 25,802
$ 22,918
Additions 1,154
1,568
9,303
11,789
Net charge-offs (590 ) 28
(2,580 ) 110
Repayments (2,128 ) (892 ) (2,289 ) (2,799 )
Other reductions ⁽¹⁾
—
—
(922 ) —
Balance at end of period $ 29,314
$ 32,018
$ 29,314
$ 32,018

^{__________________________________________________________________________________}

^{(1) Includes loans and leases that were removed from TDR status}

~~Allowances~~Allowance for Credit Losses

The allowance for ~~loan and lease~~credit losses consists of general and specific allowances and reflects management's estimate of ~~probable~~expected loan and lease losses ~~inherent in~~over the life of the loan ~~portfolio at the balance sheet date.~~or lease. Management uses a consistent and systematic process and methodology to evaluate the adequacy of the allowance for ~~loan and lease~~credit losses on a quarterly basis. The allowance is calculated by loan type: commercial real estate loans, commercial loans and leases, and consumer loans, each category of which is further segregated. A formula-based credit evaluation approach is applied to each group that is evaluated collectively, primarily by loss factors, which includes estimates of incurred losses over an estimated LEP, assigned to each risk rating by type, coupled with an analysis of certain loans individually evaluated for impairment. Management continuously evaluates and challenges inputs and assumptions in the allowance for ~~loan and lease loss.~~credit losses.

The process to determine the allowance for loan and lease losses requires management to exercise considerable judgment regarding the risk characteristics of the loan portfolios and the effect of relevant internal and external factors. While management evaluates currently available information in establishing the allowance for ~~loan and lease~~credit losses, future adjustments to the allowance for loan and lease losses may be necessary if conditions differ substantially from the assumptions used in making the evaluations. Management performs a comprehensive review of the allowance for ~~loan and lease~~credit losses on a quarterly basis. In addition, various regulatory agencies, as an integral part of their examination process, periodically review a financial

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institution's allowance for ~~loan and lease~~credit losses and carrying amounts of other real estate owned. Such agencies may require the financial institution to recognize additions or reductions to the allowance based on their judgments about information available to them at the time of their examination.

The Company’s ~~general~~ allowance methodology provides a quantification of ~~probable~~estimated losses in the portfolio. Under the current methodology, ~~Management combines~~management estimates losses over the ~~historical loss information~~life of the ~~Banks~~loan using reasonable and supportable forecasts. Forecasts, loan data, and model documentation are extensively analyzed and reviewed throughout the quarter to ~~generate~~ensure estimated losses are appropriate at quarter end. Qualitative adjustments are applied when model output does not align with management expectations. These adjustments are thoroughly reviewed and documented to provide clarity and a ~~single set of ratios.~~

~~Management believes it is appropriate~~reasonable basis for any deviations from the model. For March 31, 2023, qualitative adjustments were applied to ~~aggregate~~ the ~~ratios as the Banks share common environmental factors, operate in similar markets,~~commercial real estate, commercial, and ~~utilize common underwriting standards in accordance with the Company's Credit Policy.~~

Management employs a similar analysis for the consolidation of the qualitative factors as it does for the quantitative factors. Again, Management believes the combination of the existing nine qualitative factors used at each of the Banks into a single group of factors for use across the Company is appropriate based on the commonality of environmental factors, markets, and underwriting standards among the Banks.

As of September 30, 2017, the Company had a portfolio of approximately $27.1 million in loans secured by taxi medallions issued by the cities of Boston and Cambridge. As of December 31, 2016, this portfolio was approximately $31.1 million. Application-based mobile ride services, such as Uber and Lyft, have generated increased competition in the transportation sector,consumer portfolios resulting in a ~~reduction~~net addition in taxi utilization and, as a result, a reduction in the collateral value and credit quality of taxi medallion loans. This has increased the likelihood that loans secured by taxi medallions may default, or that the borrowers may be unabletotal reserves compared to repay these loans at maturity, potentially resulting in an increase in past due loans, troubled debt restructurings, and charge-offs. The Company’s allowance calculation included a further segmentation of the commercial loans and leases to reflect the increased risk in the Company’s taxi medallion portfolio. This allowance calculation segmentation represents management’s estimations of the risks associated with the portfolio.modeled calculations.

The following tables present the changes in the allowance for loan and lease losses by portfolio category for the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2023 and ~~2016.~~2022.


	At and for the Three Months Ended March 31, 2023
	Commercial Real Estate			Commercial			Consumer			Total
	(In Thousands)
Balance at December 31, 2022	$	68,154		$	26,604		$	3,724		$	98,482

Charge-offs	—			(840)			(11)			(851)
Recoveries	6			383			11			400
Provision (credit) for loan and lease losses	14,532			6,614			1,688			22,834
Balance at Provision (credit) for loan and lease losses on PCD loans	$	—		$	—		$	—		—
Balance at March 31, 2023	$	82,692		$	32,761		$	5,412		$	120,865

Total loans and leases	$	5,610,414		$	2,147,149		$	1,489,402		$	9,246,965
Total allowance for loan and lease losses as a percentage of total loans and leases	1.47		%	1.53		%	0.36		%	1.31		%

At and for the Three Months Ended September 30, 2017

Commercial
Real Estate
Commercial Consumer Total
(In Thousands)
Balance at June 30, 2017 $ 27,954
$ 31,099
$ 5,468
$ 64,521
Charge-offs (65 ) (1,965 ) (113 ) (2,143 )
Recoveries —
109
80
189
(Credit) provision for loan and lease losses 979
1,832
35
2,846
Balance at September 30, 2017 $ 28,868
$ 31,075
$ 5,470
$ 65,413

Total loans and leases $ 3,029,009
$ 1,585,296
$ 1,025,135
$ 5,639,440
Total allowance for loan and lease losses as a percentage of total loans and leases 0.95 % 1.96 % 0.53 % 1.16 %


	At and for the Three Months Ended March 31, 2022
	Commercial Real Estate			Commercial			Consumer			Total
	(In Thousands)
Balance at December 31, 2021	$	69,213		$	27,055		$	2,816		$	99,084

Charge-offs	(37)			(2,301)			(6)			(2,344)
Recoveries	6			353			38			397
Provision (credit) for loan and lease losses	(151)			(1,604)			81			(1,674)
Balance at March 31, 2022	$	69,031		$	23,503		$	2,929		$	95,463

Total loans and leases	$	4,235,325		$	1,800,383		$	1,187,422		$	7,223,130
Total allowance for loan and lease losses as a percentage of total loans and leases	1.63		%	1.31		%	0.25		%	1.32		%

At and for the Three Months Ended September 30, 2016

Commercial
Real Estate
Commercial Consumer Total
(In Thousands)
Balance at June 30, 2016 $ 29,861
$ 22,916
$ 4,481
$ 57,258
Charge-offs (50 ) (545 ) (244 ) (839 )
Recoveries —
170
149
319
Provision for loan and lease losses (1,755 ) 3,923
(14 ) 2,154
Balance at September 30, 2016 $ 28,056
$ 26,464
$ 4,372
$ 58,892

Total loans and leases $ 2,883,428
$ 1,470,866
$ 978,006
$ 5,332,300
Total allowance for loan and lease losses as a percentage of total loans and leases 0.97 % 1.80 % 0.45 % 1.10 %

At and for the Nine Months Ended September 30, 2017

Commercial
Real Estate
Commercial Consumer Total
(In Thousands)
Balance at December 31, 2016 $ 27,645
$ 20,906
$ 5,115
$ 53,666
Charge-offs (294 ) (6,267 ) (329 ) (6,890 )
Recoveries 476
800
263
1,539
Provision for loan and lease losses 1,041
15,636
421
17,098
Balance at September 30, 2017 $ 28,868
$ 31,075
$ 5,470
$ 65,413

Total loans and leases $ 3,029,009
$ 1,585,296
$ 1,025,135
$ 5,639,440
Allowance for loan and lease losses as a percentage of total loans and leases 0.95 % 1.96 % 0.53 % 1.16 %

At and for the Nine Months Ended September 30, 2016

Commercial
Real Estate
Commercial Consumer Total
(In Thousands)
Balance at December 31, 2015 $ 30,151
$ 22,018
$ 4,570
$ 56,739
Charge-offs (1,534 ) (3,250 ) (1,254 ) (6,038 )
Recoveries —
495
605
1,100
Provision for loan and lease losses (561 ) 7,201
451
7,091
Balance at September 30, 2016 $ 28,056
$ 26,464
$ 4,372
$ 58,892

Total loans and leases $ 2,883,428
$ 1,470,866
$ 978,006
$ 5,332,300
Allowance for loan and lease losses as a percentage of total loans and leases 0.97 % 1.80 % 0.45 % 1.10 %

~~The~~At March 31, 2023, the allowance for loan and lease losses ~~was $65.4~~decreased to $120.9 million, ~~as of September 30, 2017,~~ or ~~1.16%~~1.31% of total loans and leases ~~outstanding.~~outstanding, which included $2.3 million in provision (credit) for loan and lease losses on PCD loans. This compared to an allowance for loan and lease losses of ~~$53.5~~$98.5 million, or ~~0.99%~~1.29% of total loans and leases outstanding, as of December 31, ~~2016. The increase in the allowance for loan and lease losses and in the allowance for loan and lease losses as a percentage of total~~2022. Both figures exclude PPP loans and leases from December 31, 2016 to September 30, 2017 was primarily due to the increase in specific reserves for taxi medallion loans as a result of a change in the underlying collateral value, the increase in the specific reserve of a number of commercial loans, the increase in historical loss factors applied to commercial real estate and commercial loan portfolios including taxi medallion loans, and loan growth of $240.6 million for the nine months ended September 30, 2017.

~~Management believes that the allowance for loan and lease losses as of September 30, 2017 is appropriate based on the facts and circumstances discussed further below.~~

~~Commercial Real Estate Loans~~

~~The allowance for commercial real estate loan losses was $28.9 million, or 0.95% of total commercial real estate loans outstanding, as of September 30, 2017. This compared~~which are not subject to an allowance for commercial real estate loan losses of $27.6 million, or 0.95% of total commercial real estate loans outstanding, as of December 31, 2016. Specific reserves on commercial real estate loans were $1.0 thousand and $28.0 thousand as of September 30, 2017 and December 31, 2016, respectively. The $1.3 million increase inreserve since they are guaranteed by the ~~allowance for commercial real estate loan losses during the first nine months of 2017 was primarily driven by originated loan growth of $141.0 million, or 5.1% from December 31, 2016.~~

The ratio of total criticized and classified commercial real estate loans to total commercial real estate loans increased to 0.84% as of September 30, 2017 from 0.74% as of December 31, 2016. The ratio of originated commercial real estate loans on nonaccrual to total originated commercial real estate loans decreased to 0.16% as of September 30, 2017 from 0.23% as of December 31, 2016.SBA.

Net charge-offs in the ~~commercial real estate loan portfolio~~loans and leases for the three months ended ~~September 30, 2017~~March 31, 2023 and ~~September 30, 2016~~2022 were ~~$65.0 thousand and $50.0 thousand, respectively. As a percentage of average commercial real estate~~

~~loan portfolio, annualized net charge-offs for the three months ended September 30, 2017 and September 30, 2016 was 0.01% and 0.01%, respectively.~~

Net recoveries in the commercial real estate loan portfolio totaled $0.2 million for the nine months ended September 30, 2017, compared to net charge-offs of $1.5 million for the nine months ended September 30, 2016. As a percentage of average commercial real estate loan portfolio, annualized net recoveries for the nine months ended September 30, 2017 was 0.01% and annualized charge-offs for the nine month ended September 30, 2016 was 0.07%.

~~Commercial Loans and Leases~~

The allowance for commercial loan and lease losses was $31.1 million, or 1.96% of total commercial loans and leases outstanding, as of September 30, 2017, compared to $20.9 million, or 1.40% of total commercial loans and leases outstanding, as of December 31, 2016. Specific reserves on commercial loans and leases increased from $0.1 million as of December 31, 2016 to $7.5 million as of September 30, 2017. The $10.2 million increase in the allowance for commercial loans and lease losses during 2017 was primarily due to the increase in specific reserves for taxi medallion loans as a result of a change in the underlying collateral value, the increase in the specific reserve of a number of commercial loans, the increase in historical loss factors applied to commercial loan portfolios including taxi medallion portfolio in the first nine months of 2017, and the originated loan growth of 96.3 million, or 6.5% from December 31, 2016.

The ratio of total criticized and classified commercial loans and leases to total commercial loans and leases was 3.07% as of September 30, 2017, compared to 3.27% as of December 31, 2016. The ratio of originated commercial loans and leases on nonaccrual to total originated commercial loans and leases increased to 1.98% as of September 30, 2017 from 1.85% as of December 31, 2016.

~~Net charge-offs in the commercial loan and lease portfolio for the three months ended September 30, 2017 and September 30, 2016 were $1.9~~$0.5 million and ~~$0.4~~$1.9 million, respectively. As a percentage of average ~~commercial~~ loans and leases, annualized net charge-offs for the three months ended ~~September 30, 2017~~

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March 31, 2023 and ~~September 30, 2016~~2022 were ~~0.47%~~0.02% and ~~0.10%~~0.11%, respectively.

~~Net charge-offs~~ The year-over-year decrease in the commercial loan and lease portfolio for the nine months ended September 30, 2017 and September 30, 2016 were $5.5 million and $2.8 million, respectively. As a percentage of average commercial loans and leases, annualized net charge-offs ~~for the nine months ended September 30, 2017 and September 30, 2016 were 0.47% and 0.26%, respectively.~~

~~Consumer Loans~~

The allowance for consumer loan losses, including residential loans and home equity loans and lines of credit, was $5.5 million, or 0.53% of total consumer loans outstanding, as of September 30, 2017, compared to $5.0 million, or 0.51% of consumer loans outstanding, as of December 31, 2016. Specific reserves on consumer loans were $21.0 thousand and $27.0 thousand as of September 30, 2017 and December 31, 2016, respectively. The $0.5 million increase in the allowance for consumer loans during the first nine months of 2017 was primarily driven by the increase in the historical loss factors applied to the consumer portfolios and the originated loan growth of $58.3 million, or 6.8%, from December 31, 2016. The ratio of originated consumer loans on nonaccrual to total originated consumer loans increased to 0.23% as of September 30, 2017 from 0.30% as of December 31, 2016. The risk of loss on a home equity loan is higher since the property securing the loan has often been previously pledged as collateral for a first mortgage loan. The Company gathers and analyzes delinquency data, to the extent that data are available on these first liens, for purposes of assessing the collectability of the second liens held by the Company even if these home equity loans are not delinquent. This data are further analyzed for performance differences between amortizing and non-amortizing home equity loans, the percentage borrowed to total loan commitment and by the amount of payments made by the borrowers. The loss exposure is not considered to be high due to ~~the combination~~a decrease in net charge-offs of ~~current property values, the historically low loan-to-value ratios, the low level of losses experienced~~$1.4 million in the past few years and the low level of loan delinquencies as of September 30, 2017. If the local economy weakens, however, a rise in losses in those loan classes could occur. Historically, losses in these classes have been low.

Net charge-offs in the consumer loan portfolio for the three months ended September 30, 2017 and September 30, 2016 were $33.0 thousand and $95.0 thousand, respectively. Provisions for consumer loans recorded in these periods more than adequately covered charge-offs during those periods.

Net charge-offs in the consumer loan portfolio for the nine months ended September 30, 2017 and September 30, 2016 were $66.0 thousand and $649.0 thousand, respectively. Provisions for consumer loans recorded in these periods more than adequately covered charge-offs during those periods.

equipment financing loans.

The following table sets forth the Company's percent of allowance for loan and lease losses to the total allowance for loan and lease losses, and the percent of loans to total loans for each of the categories listed at the dates indicated.


	At March 31, 2023						At December 31, 2022
	Amount		Percent of Allowance in Each Category to Total Allowance		Percent of Loans in Each Category to Total Loans		Amount		Percent of Allowance in Each Category to Total Allowance		Percent of Loans in Each Category to Total Loans
	(Dollars in Thousands)
Commercial real estate	$	54,259	45.0	%	43.1	%	$	44,536	45.3	%	39.9	%
Multi-family mortgage	20,632		17.1	%	14.7	%	16,885		17.1	%	15.1	%
Construction	7,801		6.5	%	2.9	%	6,733		6.8	%	2.7	%
Total commercial real estate loans	82,692		68.6	%	60.7	%	68,154		69.2	%	57.7	%
Commercial	18,711		15.5	%	9.3	%	12,190		12.4	%	9.9	%
Equipment financing	13,956		11.5	%	13.5	%	14,315		14.5	%	15.9	%
Condominium association	94		0.1	%	0.5	%	99		0.1	%	0.6	%
Total commercial loans	32,761		27.1	%	23.3	%	26,604		27.0	%	26.4	%
Residential mortgage	3,117		2.6	%	11.7	%	1,894		1.9	%	11.0	%
Home equity	1,839		1.5	%	3.7	%	1,478		1.5	%	4.2	%
Other consumer	456		0.2	%	0.6	%	352		0.4	%	0.7	%
Total consumer loans	5,412		4.3	%	16.0	%	3,724		3.8	%	15.9	%

Total	$	120,865	100.0	%	100.0	%	$	98,482	100.0	%	100.0	%

At September 30, 2017 At December 31, 2016
Amount
Percent of
Allowance
to Total
Allowance

Percent of
Loans
in Each
Category to
Total
Loans
Amount
Percent of
Allowance
to Total
Allowance

Percent of
Loans
in Each
Category to
Total
Loans
(Dollars in Thousands)
Commercial real estate $ 19,988
30.6 % 37.6 % $ 19,354
36.1 % 38.1 %
Multi-family mortgage 5,668
8.7 % 13.2 % 5,528
10.3 % 13.5 %
Construction 3,212
4.9 % 2.9 % 2,763
5.1 % 2.5 %
Total commercial real estate loans 28,868
44.2 % 53.7 % 27,645
51.5 % 54.1 %
Commercial 20,177
30.8 % 12.2 % 10,096
18.8 % 11.8 %
Equipment financing 10,482
16.0 % 14.9 % 10,345
19.3 % 14.8 %
Condominium association 416
0.6 % 1.0 % 465
0.9 % 1.1 %
Total commercial loans and leases 31,075
47.4 % 28.1 % 20,906
39.0 % 27.7 %
Residential mortgage 2,990
4.6 % 11.6 % 2,587
4.8 % 11.6 %
Home equity 2,305
3.5 % 6.3 % 2,356
4.4 % 6.3 %
Other consumer 175
0.3 % 0.3 % 172
0.3 % 0.3 %
Total consumer loans 5,470
8.4 % 18.2 % 5,115
9.5 % 18.2 %
Total $ 65,413
100.0 % 100.0 % $ 53,666
100.0 % 100.0 %
Management believes that the allowance for loan and lease losses as of March 31, 2023 is appropriate.

Investment Securities

The investment portfolio exists primarily for liquidity purposes, and secondarily as ~~sources~~a source of interest and dividend income, interest-rate risk management and tax planning as a counterbalance to loan and deposit flows. Investment securities are utilized as part of the Company's asset/liability management and may be sold in response to, or in anticipation of, factors such as changes in market conditions and interest rates, security prepayment rates, deposit outflows, liquidity concentrations and regulatory capital requirements.

The investment policy of the Company, which is reviewed and approved by the Board of Directors on an annual basis, specifies the types of investments that are acceptable, required investment ratings by at least one nationally recognized rating agency, concentration limits and duration guidelines. Compliance with the investment policy is monitored on a regular basis. In general, the Company seeks to maintain a high degree of liquidity and targets cash, cash equivalents and investment securities available-for-sale balances between 10% and 30% of total assets.

Cash, cash equivalents, and investment securities increased ~~$15.6~~$513.6 million, or ~~3.1%~~197.6% on an annualized basis, to ~~$694.0 million~~$1.6 billion as of ~~September 30, 2017~~March 31, 2023, from ~~$678.4 million~~$1.04 billion as of December 31, ~~2016.~~2022. The increase was ~~primarily~~ driven by ana increase in ~~deposit balances, offset by growth in loans and leases~~short-term investments and investment ~~securities.~~securities available for sale. Cash, cash equivalents, and investment securities were ~~10.4%~~13.5% of total assets as of ~~September 30, 2017,~~March 31, 2023, compared to ~~10.5%~~11.32% of total assets at December 31, ~~2016.~~2022.

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The following table sets forth certain information regarding the amortized cost and market value of the Company's investment securities at the dates indicated:


	At March 31, 2023				At December 31, 2022
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
	(In Thousands)
Investment securities available-for-sale:
GSE debentures	$	198,454	$	177,222	$	176,751	$	152,422
GSE CMOs	69,766		67,684		19,977		18,220
GSE MBSs	206,416		188,793		159,824		140,576




Corporate debt obligations	37,661		37,296		14,076		13,764
U.S. Treasury bonds	598,023		572,250		362,850		331,307


Foreign government obligations	500		475		500		477
Total investment securities available-for-sale	$	1,134,102	$	1,067,032	$	733,978	$	656,766

At September 30, 2017 At December 31, 2016

Amortized
Cost
Fair Value
Amortized
Cost
Fair Value
(In Thousands)
Investment securities available-for-sale:
GSE debentures $ 139,443
$ 139,344
$ 98,122
$ 97,020
GSE CMOs 138,137
135,280
161,483
158,040
GSE MBSs 182,913
182,118
214,946
212,915
SBA commercial loan asset- backed securities 77
77
107
107
Corporate debt obligations 58,638
58,891
48,308
48,485
U.S. Treasury bonds 4,822
4,811
4,801
4,737
Trust preferred securities 1,471
1,403
1,469
1,358
Total debt securities 525,501
521,924
529,236
522,662
Marketable equity securities 975
986
966
972
Total investment securities available-for-sale $ 526,476
$ 522,910
$ 530,202
$ 523,634
Investment securities held-to-maturity:
GSE debentures $ 38,622
$ 38,072
$ 14,735
$ 14,101
GSE MBSs 14,788
14,643
17,666
17,479
Municipal obligations 53,828
54,013
54,219
53,204
Foreign government obligations 500
492
500
487
Total investment securities held-to-maturity $ 107,738
$ 107,220
$ 87,120
$ 85,271

The fair value of investment securities is based principally on market prices and dealer quotes received from third-party, nationally-recognized pricing services for identical investment securities such as U.S. Treasury and agency securities. The Company's marketable equity securities are priced this way and are included in Level 1.1 of the fair value hierarchy in accordance with ASC 820. These prices are validated by comparing the primary pricing source with an alternative pricing source when available. When quoted market prices for identical securities are unavailable, the Company uses market prices provided by independent pricing services based on recent trading activity and other observable information, including but not limited to market interest-rate curves, referenced credit spreads and estimated prepayment speeds where applicable. These investments include certain U.S. and government agency debt securities, municipal and corporate debt securities, GSE residential MBSs and CMOs, ~~and trust preferred securities,~~ all of which are included in Level 2. Certain fair values are estimated using pricing models and are included in Level 3.

Additionally, management reviews changes in fair value from period to period and performs testing to ensure that prices received from the third parties are consistent with their expectation of the market. Changes in the prices obtained from the pricing service are analyzed from month to month, taking into consideration changes in market conditions including changes in mortgage spreads, changes in U.S. Treasury security yields and changes in generic pricing of 15-year and 30-year securities. Additional analysis may include a review of prices provided by other independent parties, a yield analysis, a review of average life changes using Bloomberg analytics and a review of historical pricing for the particular security.

Maturities, calls and principal repayments for investment securities available-for-sale totaled ~~$55.0~~$33.1 million for the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2023 compared to ~~$76.2~~$36.3 million for the same period in ~~2016. There were no sales~~2022. For the three months ended March 31, 2023, the Company sold $224.8 million of investment securities ~~available-for-sale for~~available-for-sale. For the ~~nine~~same period in 2022, the Company did not sell any investment securities available-for-sale. For the three months ended ~~September 30, 2017 and 2016. For the nine months ended September 30, 2017,~~March 31, 2023, the Company purchased ~~$52.4~~$274.4 million of investment securities available-for-sale, compared to ~~$77.3 million in purchases of investment securities available-for-sale for the same period in 2016.~~

~~Maturities, calls and principal repayments for investment securities held-to-maturity totaled $3.2 million for the nine months ended September 30, 2017 compared to $41.4~~$84.1 million for the same period in 2016. There were no sales of investment securities held-to-maturity for the nine months ended September 30, 2017 and 2016. For the nine months ended September 30, 2017, the Company purchased $23.9 million of investment securities held-to-maturity, compared to $25.0 million in purchases of investment securities held-to-maturity for the same period in 2016.

2022.

As of ~~September 30, 2017,~~March 31, 2023, the fair value of all investment securities available-for-sale was ~~$522.9 million and carried a total of $3.6~~$1.1 billion with $67.1 million of net unrealized losses, compared to a fair value of ~~$523.6~~$656.8 million and net unrealized losses of ~~$6.6~~$77.2 million as of December 31, ~~2016.~~2022. As of ~~September 30, 2017, $377.4~~March 31, 2023, $763.4 million, or ~~72.2%~~72.6%, of the portfolio, had gross unrealized losses of ~~$5.0~~$69.0 million. This compares to ~~$389.0~~$630.5 million, or ~~74.3%~~96.0%, of the portfolio with gross unrealized losses of ~~$8.0~~$77.5 million as of December 31, ~~2016. The Company's unrealized loss position has decreased in 2017 driven by lower long-term interest rates.~~

As of September 30, 2017, the fair value of all investment securities held-to-maturity was $107.2 million and carried a total of $0.5 million of net unrealized losses, compared to a fair value of $85.3 million and net unrealized losses of $1.8 million as of December 31, 2016. As of September 30, 2017, $61.2 million, or 57.1%, of the portfolio, had gross unrealized losses of $0.9 million. This compares to $82.0 million, or 96.1%, of the portfolio with gross unrealized losses of $1.9 million as of December 31, 2016.2022. The Company's unrealized loss position decreased in ~~2017~~2023 primarily driven by ~~lower long-term interest~~a rebalancing of the portfolio to more closely align it with current market rates.

Management believes that these negative differences between amortized cost and fair value do not include credit losses, but rather differences in interest rates between the time of purchase and the time of measurement. It is more likely than not that the Company will not sell or be required to sell the investment securities before recovery, and, as a result, it will recover the amortized cost basis of the investment securities. As such, management has determined that the securities are not other-than-temporarily impaired as of September 30, 2017. If market conditions for securities worsen or the creditworthiness of the underlying issuers deteriorates, it is possible that the Company may recognize additional other-than-temporary impairments in future periods. For additional discussion on how the Company validates fair values provided by the third-party pricing service, see Note 11, “Fair Value of Financial Instruments.”

Restricted Equity Securities

FHLBB and FHLBNY Stock—The Company invests in the stock of the FHLBB and FHLBNY as one of the requirements to borrow. The Company generally maintains an excess balance of capital stock, which allows for additional borrowing capacity at each of the Banks. As of ~~September 30, 2017,~~March 31, 2023 and December 31, 2022, the Company did not have an excess balance of capital ~~stock is $3.9 million, as compared to no excess balance at December 31, 2016. On December 30th, 2016, the FHLBB initiated a stock buyback which reduced the Company's excess balance to zero.~~stock.

As of ~~September 30, 2017,~~March 31, 2023, the Company owned stock in the FHLBB with a carrying value of ~~$45.2~~$61.8 million, ~~a decrease~~an increase of ~~$2.1~~$8.9 million from ~~$47.3~~$52.9 million as of December 31, ~~2016.~~2022. As of ~~September 30, 2017,~~March 31, 2023, the FHLBB had total assets of ~~$61.0~~$80.2 billion and total capital of ~~$3.2~~$3.8 billion, of which ~~$1.3~~$1.7 billion was retained earnings. As of March 31, 2023, the Company owned stock in the FHLBNY with a carrying value of $2.8 million. As of March 31, 2023, the FHLBNY had total assets of $185.9 billion and total capital of $8.9 billion, of which $2.2 billion was retained earnings. The FHLBB stated that it remained in compliance

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with all regulatory capital ratios as of ~~September 30, 2017~~March 31, 2023 and was classified as "adequately capitalized" by its regulator, based on the FHLBB's financial information as of ~~June 30, 2017.~~December 31, 2022. The FHLBNY stated that it met all of its regulatory capital ratios at March 31, 2023

Federal Reserve Bank Stock—The Company invests in the stock of the Federal Reserve Bank of Boston and the Federal Reserve Bank of New York, as a condition ofto the Banks' membership ~~for the Banks~~ in the Federal Reserve System. As of ~~September 30, 2017 and~~March 31, 2023, the Company owned stock in the Federal Reserve Bank with a carrying value of $21.5 million. As of December 31, ~~2016,~~2022, the Company owned stock in the Federal Reserve Bank of ~~Boston with a carrying value of $16.8~~$18.2 million.

Other Stock—The Company invests in a small number of other restricted equity securities which ~~included Northeast Retirement Services, Inc. ("NRS")~~includes American Financial Exchange and Statewide Zone. As of March 31, 2023, the ~~Savings Bank Life Insurance~~ Company ~~of Massachusetts ("SBLI").~~

~~The Company, through its wholly~~ owned ~~subsidiary, Brookline Securities Corp., ("Brookline Securities") held 9,721 shares of~~stock in other restricted equity securities with a carrying value of ~~NRS. This investment was recorded at cost of $122 thousand as no readily determinable fair value was available. On~~$0.2 million, unchanged from December 5, 2016, Community Bank Systems, Inc. ("CBU") announced entry into a merger agreement to acquire NRS. After receiving stockholder and regulatory approvals, CBU completed the acquisition of NRS on February 3, 2017. The Company exchanged the 9,721 shares of NRS and received $319.04 in cash and 14.876 shares of CBU common stock for each share of NRS held. As part of the merger agreement, the Company was restricted to selling 5,071 shares per day in the open market. The Company completed the sale of all CBU shares during the first quarter of 2017. The Company recognized a gain on the sale of securities of $11.4 million for the quarter ending March 31, ~~2017.~~2022.

Brookline Securities held one Class A Common Stock share and 2,070 Class B Common Stock shares of the Savings Bank Life Insurance Company of Massachusetts ("SBLI"). In July 2017, SBLI converted from a Massachusetts stock insurance company to a Massachusetts mutual insurance company and, as a result, Brookline Securities received $500 for one share of Class A Common Stock and $128 per share for its 2,070 shares of Class B Common Stock of SBLI, in exchange for $265.5 thousand in cash. Brookline Securities recognized a nominal gain on the exchange.

Deposits

The following table presents the Company's deposit mix at the dates indicated.


	At March 31, 2023						At December 31, 2022
	Amount		Percent of Total		Weighted Average Rate		Amount		Percent of Total		Weighted Average Rate
	(Dollars in Thousands)
Non-interest-bearing deposits:
Demand checking accounts	$	1,899,370	22.5	%	—	%	$	1,802,518	27.6	%	—	%
Interest-bearing deposits:
NOW accounts	757,411		9.0	%	0.48	%	544,118		8.3	%	0.18	%
Savings accounts	1,268,375		15.0	%	1.83	%	762,271		11.7	%	0.70	%
Money market accounts	2,185,971		25.8	%	2.20	%	2,174,952		33.4	%	1.63	%
Certificate of deposit accounts	1,362,970		16.1	%	2.65	%	928,143		14.2	%	1.68	%
Brokered deposit accounts	982,365		11.6	%	4.29	%	310,144		4.8	%	3.00	%
Total interest-bearing deposits	6,557,092		77.5	%	2.33	%	4,719,628		72.4	%	1.41	%
Total deposits	$	8,456,462	100.0	%	1.82	%	$	6,522,146	100.0	%	1.02	%

At September 30, 2017 At December 31, 2016
Amount
Percent
of Total

Weighted
Average
Rate
Amount
Percent
of Total

Weighted
Average
Rate
(Dollars in Thousands)
Non-interest-bearing deposits:
Demand checking accounts $ 905,472
18.8 % — % $ 900,474
19.5 % — %
Interest-bearing deposits:
NOW accounts 318,284
6.6 % 0.07 % 323,160
7.0 % 0.07 %
Savings accounts 665,558
13.8 % 0.20 % 613,061
13.3 % 0.20 %
Money market accounts 1,749,040
36.5 % 0.53 % 1,733,359
37.6 % 0.47 %
Certificate of deposit accounts 1,167,329
24.3 % 1.19 % 1,041,022
22.6 % 1.04 %
Total interest-bearing deposits 3,900,211
81.2 % 0.63 % 3,710,602
80.5 % 0.55 %
Total deposits $ 4,805,683
100.0 % 0.52 % $ 4,611,076
100.0 % 0.44 %

Total deposits increased ~~$194.6 million, or 5.6% on an annualized basis,~~$2.0 billion to ~~$4.8~~$8.5 billion as of ~~September 30, 2017,~~March 31, 2023, compared to ~~$4.6~~$6.5 billion as of December 31, ~~2016.~~2022. Deposits as a percentage of total assets increased to ~~71.9%~~73.4% as of ~~September 30, 2017, as~~March 31, 2023, compared to ~~71.6%~~71.0% as of December 31, ~~2016.~~2022.

During the three months ended March 31, 2023, core deposits increased $827.3 million. The ~~increase in~~ratio of core deposits isto total deposits decreased from 81.0% as of December 31, 2022 to 72.3% as of March 31, 2023, primarily due to ~~the growth~~a decrease in ~~certificate~~percentage of money market accounts and demand checking accounts to total deposits.

Certificate of deposit accounts ~~and savings accounts.~~

Asincreased $0.5 billion to $1.4 billion as of ~~September 30, 2017, the Company had $260.8 million of brokered deposits~~March 31, 2023, compared to ~~$203.4~~$0.9 billion as of December 31, 2022. Certificate of deposit accounts increased as a percentage of total deposits to 16.1% as of March 31, 2023 from 14.2% as of December 31, 2022.

Brokered deposits increased $672.2 million to $982.4 million as of March 31, 2023, compared to $310.1 million as of December 31, ~~2016.~~2022. Brokered deposits increased as a percentage of total deposits to 11.6% as of March 31, 2023 from 4.8% as of December 31, 2022. The increase in brokered deposits was driven by the purchase of brokered certificates of deposit. Brokered deposits allow the Company to seek additional funding by attracting deposits from outside the Company's core market. The Company's investment policy limits the total amount of brokered deposits the Company may hold to 15% of total assets. Brokered deposits are included in the certificate of deposit balance, which increased $126.3 million, or 16.2% on an annualized basis, during the nine months ended September 30, 2017. Certificates of deposit have also increased as a percentage of total deposits to 24.3% as of September 30, 2017 from 22.6% as of December 31, 2016.

During the nine months ended September 30, 2017, core deposits increased $68.3 million, or 2.6% on an annualized basis. The ratio of core deposits to total deposits decreased from 77.4% as of December 31, 2016 to 75.7% as of September 30, 2017, primarily due to the shift in deposit mix and increase in brokered deposits.

The following table sets forth the distribution of the average balances of the Company's deposit accounts for the periods indicated and the weighted average interest rates on each category of deposits presented. Averages for the periods presented are based on daily balances.

Table of Contents


	Three Months Ended September 30,													Three Months Ended March 31,
	2017						2016							2023						2022
	Average Balance		Percent of Total Average Deposits		Weighted Average Rate		Average Balance		Percent of Total Average Deposits		Weighted Average Rate			Average Balance		Percent of Total Average Deposits		Weighted Average Rate		Average Balance		Percent of Total Average Deposits		Weighted Average Rate
	(Dollars in Thousands)													(Dollars in Thousands)
Core deposits:													Core deposits:
Non-interest-bearing demand checking accounts	$	918,054	19.3	%	—	%	$	863,854	19.1	%	—	%	Non-interest-bearing demand checking accounts	$	1,930,162	23.7	%	—	%	$	1,880,039	26.7	%	—	%
NOW accounts	321,731		6.8	%	0.07	%	295,762		6.6	%	0.07	%	NOW accounts	810,333		9.9	%	0.45	%	589,891		8.4	%	0.07	%
Savings accounts	605,303		12.7	%	0.20	%	566,192		12.5	%	0.22	%	Savings accounts	1,160,003		14.2	%	0.88	%	933,173		13.2	%	0.09	%
Money market accounts	1,765,610		37.2	%	0.51	%	1,678,937		37.2	%	0.45	%	Money market accounts	2,366,235		29.0	%	2.08	%	2,416,577		34.3	%	0.26	%
Total core deposits	3,610,698		76.0	%	0.29	%	3,404,745		75.4	%	0.26	%	Total core deposits	6,266,733		76.9	%	0.99	%	5,819,680		82.6	%	0.13	%
Certificate of deposit accounts	1,139,699		24.0	%	1.17	%	1,112,831		24.6	%	1.01	%	Certificate of deposit accounts	1,346,761		16.5	%	2.25	%	1,091,729		15.5	%	0.69	%
Brokered deposit accounts													Brokered deposit accounts	534,527		6.6	%	4.82	%	132,751		1.9	%	0.16	%
Total deposits	$	4,750,397	100.0	%	0.50	%	$	4,517,576	100.0	%	0.45	%	Total deposits	$	8,148,021	100.0	%	1.44	%	$	7,044,160	100.0	%	0.21	%

Nine Months Ended September 30,
2017 2016

Average
Balance

Percent
of Total
Average
Deposits

Weighted
Average
Rate

Average
Balance

Percent
of Total
Average
Deposits

Weighted
Average
Rate
(Dollars in Thousands)
Core deposits:
Non-interest-bearing demand checking accounts $ 905,684
19.4 % — % $ 829,659
18.7 % — %
NOW accounts 319,633
6.8 % 0.07 % 289,908
6.5 % 0.07 %
Savings accounts 603,814
12.9 % 0.20 % 561,798
12.7 % 0.24 %
Money market accounts 1,759,449
37.6 % 0.49 % 1,654,700
37.2 % 0.45 %
Total core deposits 3,588,580
76.7 % 0.28 % 3,336,065
75.1 % 0.27 %
Certificate of deposit accounts 1,088,011
23.3 % 1.12 % 1,107,600
24.9 % 0.99 %
Total deposits $ 4,676,591
100.0 % 0.47 % $ 4,443,665
100.0 % 0.45 %

As of ~~September 30, 2017~~March 31, 2023 and December 31, ~~2016,~~2022, the Company had outstanding certificates of deposit of ~~$100,000~~$250,000 or more, maturing as follows:


	At September 30, 2017				At December 31, 2016					At March 31, 2023				At December 31, 2022
	Amount		Weighted Average Rate		Amount		Weighted Average Rate			Amount		Weighted Average Rate		Amount		Weighted Average Rate
	(Dollars in Thousands)									(Dollars in Thousands)
Maturity period:									Maturity period:
Six months or less	$	150,892	0.86	%	$	134,783	0.82	%	Six months or less	$	150,906	2.69	%	$	108,100	1.32	%
Over six months through 12 months	137,264		1.12	%	79,543		0.92	%	Over six months through 12 months	123,449		3.05	%	62,489		1.82	%
Over 12 months	224,115		1.68	%	222,342		1.44	%	Over 12 months	128,346		3.67	%	101,654		2.96	%
Total certificate of deposit of $100,000 or more	$	512,271	1.29	%	$	436,668	1.15	%
Total certificate of deposit of $250,000 or more									Total certificate of deposit of $250,000 or more	$	402,701	3.11	%	$	272,243	2.05	%

The following table presents the Company's insured and uninsured deposit mix at the date indicated.


	At March 31, 2023
	(Dollars in Millions)
	Commercial			Consumer			Municipal			Brokered			Total			%
Insured or Collateralized	$	1,540		$	3,043		$	339		$	982		$	5,904		70	%
Uninsured	1,625			927			—			—			2,552			30	%
Total	$	3,165		$	3,970		$	339		$	982		$	8,456		100	%
Composition	37		%	47		%	4		%	12		%	100		%

Borrowed Funds

The following table sets forth certain information regarding advances from the ~~FHLBB,~~FHLB, subordinated debentures and notes and other borrowed funds for the periods indicated:

Table of Contents


	Three Months Ended September 30,						Nine Months Ended September 30,							Three Months Ended March 31,
	2017			2016			2017			2016				2023			2022
	(Dollars in Thousands)													(Dollars in Thousands)
Borrowed funds:													Borrowed funds:
Average balance outstanding	$	1,037,778		$	1,050,849		$	1,046,054		$	1,013,865		Average balance outstanding	$	1,507,084		$	317,873
Maximum amount outstanding at any month-end during the period	1,070,681			1,050,118			1,093,693			1,050,118			Maximum amount outstanding at any month-end during the period	1,630,102			392,897
Balance outstanding at end of period	985,896			1,022,653			985,896			1,022,653			Balance outstanding at end of period	1,630,102			392,897
Weighted average interest rate for the period	1.64		%	1.52		%	1.59		%	1.55		%	Weighted average interest rate for the period	4.55		%	1.88		%
Weighted average interest rate at end of period	1.67		%	1.56		%	1.67		%	1.56		%	Weighted average interest rate at end of period	4.68		%	1.76		%

Advances from the ~~FHLBB~~FHLB Boston and FHLB New York

On a long-term basis, the Company intends to continue to increase its core deposits. The Company also uses ~~FHLBB~~FHLB borrowings and other wholesale ~~borrowing~~borrowings as part of the Company's overall strategy to fund loan growth and manage ~~interest-rate~~interest rate risk and liquidity. The advances are secured by a blanket security agreement which requires the Banks to maintain certain qualifying assets as collateral, principally mortgage loans and securities in an aggregate amount at least equal to outstanding advances. The maximum amount that the ~~FHLBB~~FHLB banks will advance to member institutions, including the Company, fluctuates from time to time in accordance with the policies of the ~~FHLBB. The Company may also borrow from the FRB's "discount window" as necessary.~~FHLB banks.

~~FHLBB~~FHLB borrowings ~~decreased by $38.3~~increased $220.6 million to ~~$872.6 million~~$1.5 billion as of ~~September 30, 2017 from the~~March 31, 2023 with a total capacity of $2.2 billion. As of December 31, ~~2016 balance~~2022, FHLB borrowings stood at $1.2 billion with a total capacity of ~~$910.8 million. The decrease in FHLBB borrowings was primarily due to a reduction in new advances from the FHLBB, as the Company is utilizing other funding sources to support loan growth.~~$1.7 billion.

Subordinated Debentures and Notes

~~The~~As part of the acquisition of BankRI, the Company acquired two $5.0 million subordinated debentures due on June 26, 2033 and March 17, 2034, respectively. The Company is obligated to pay 3-month LIBOR plus 3.10% and 3-month LIBOR plus 2.79%, respectively, on a quarterly basis until the debentures mature.

The Company sold $75.0 million of 6.0% fixed-to-floating rate subordinated notes due September 15, 2029. The Company is obligated to pay 6.0% interest semiannually between September 2014 and September 2024. Subsequently, the Company is obligated to pay 3-month LIBOR plus 3.315% quarterly until the notes mature in September 2029.

The following table summarizes the Company's subordinated debentures and notes at the dates indicated.

Carrying Amount

Issue Date

Rate

Maturity Date

Next Call Date

March 31,
2023

December 31, 2022

(Dollars in Thousands)

June 26, 2003

Variable;
3-month LIBOR + 3.10%

June 26, 2033

June 25, 2023

4,891

4,887

March 17, 2004

Variable;
3-month LIBOR + 2.79%

March 17, 2034

June 19, 2023

4,837

4,830

September 15, 2014

6.0% Fixed-to-Variable;
3-month LIBOR + 3.315%

September 15, 2029

September 15, 2024

74,352

74,327

Total

84,080

84,044

Carrying Amount
Issue Date Rate Maturity Date Next Call Date September 30, 2017 December 31, 2016
(Dollars in Thousands)
June 26, 2003
Variable;
3-month LIBOR + 3.10%
June 26, 2033 December 26, 2017 $ 4,772
$ 4,752
March 17, 2004
Variable;
3-month LIBOR + 2.79%
March 17, 2034 December 18, 2017 4,657
4,628
September 15, 2014
6.0% Fixed-to-Variable;
3-month LIBOR + 3.315%
September 15, 2029 September 15, 2024 73,800
73,725
Total $ 83,229
$ 83,105

Table of Contents

The above carrying amounts of the subordinated debentures included ~~$0.6~~$0.3 million of accretion adjustments and ~~$1.2~~$0.6 million of capitalized debt issuance costs as of ~~September 30, 2017.~~March 31, 2023. This compares to ~~$0.6~~$0.3 million of accretion adjustments and ~~$1.3~~$0.7 million of capitalized debt issuance costs as of December 31, ~~2016.~~2022.

Other Borrowed Funds

In addition to advances from the ~~FHLBB~~FHLB and subordinated debentures and notes, the Company utilizes other funding sources as part of the overall liquidity strategy. Those funding sources include repurchase agreements, and committed and uncommitted lines of credit with several financial institutions.

The Company periodically enters into repurchase agreements with its larger deposit and commercial customers as part of its cash management services which are typically overnight borrowings. Repurchase agreements with customers decreased ~~$20.1~~$3.3 million to ~~$30.1~~$48.7 million as of ~~September 30, 2017~~March 31, 2023 from ~~$50.2~~$52.0 million as of December 31, ~~2016.~~2022.

The Company has access to a ~~$12.0~~$30.0 million committed line of credit as of ~~September 30, 2017.~~March 31, 2023. As of ~~September 30, 2017~~March 31, 2023 and December 31, ~~2016,~~2022, the Company did not have any borrowings on this committed line of ~~credit outstanding.~~credit.

The Banks also have access to funding through several uncommitted lines of credit of ~~$204.0~~$784.0 million. As of ~~September 30, 2017~~March 31, 2023 and December 31, ~~2016,~~2022, the Company did not have any borrowings on ~~these~~outstanding uncommitted lines of credit.

Derivative Financial Instruments

The Company has entered into loan level derivatives, risk participation agreements, and foreign exchange contracts with certain of its commercial customers and concurrently enters into offsetting swaps with third-party financial institutions. The Company may also, from time to time, enter into risk participation agreements. The Company ~~did not have derivative fair value hedges or derivative~~uses interest rate futures that are designated and qualify as cash flow ~~hedges at September 30, 2017 or December 31, 2016.~~ hedging instruments.

The following table summarizes certain information concerning the Company's loan level derivatives, interest rate derivatives, risk participation agreements, and foreign exchange contracts at ~~September 30, 2017~~March 31, 2023 and December 31, ~~2016:~~2022:


	At March 31, 2023			At December 31, 2022
	(Dollars in Thousands)
Interest rate derivatives (Notional amounts):	$	225,000		$	150,000
Loan level derivatives (Notional principal amounts):
Receive fixed, pay variable	$	1,773,735		$	1,489,709
Pay fixed, receive variable	1,773,735			1,489,709
Risk participation-out agreements	511,464			393,624
Risk participation-in agreements	74,757			75,223
Foreign exchange contracts (Notional amounts):
Buys foreign currency, sells U.S. currency	$	2,631		$	2,383
Sells foreign currency, buys U.S. currency	2,650			2,400
Fixed weighted average interest rate from the Company to counterparty	2.86		%	2.65		%
Floating weighted average interest rate from counterparty to the Company	5.14		%	4.68		%
Weighted average remaining term to maturity (in months)	82			69
Fair value:
Recognized as an asset:

Interest rate derivatives	$	854		$	34

Loan level derivatives	104,707			108,963
Risk participation-out agreements	1,946			347
Foreign exchange contracts	339			130
Recognized as a liability:

Interest rate derivatives	$	2,285		$	3,170
Loan level derivatives	104,707			108,963
Risk participation-in agreements	39			31
Foreign exchange contracts	320			112

At September 30, 2017 At December 31, 2016
(Dollars in Thousands)
Loan level derivatives (Notional principal amounts):
Receive fixed, pay variable $ 465,470
$ 383,780
Pay fixed, receive variable 465,470
383,780
Risk participation-out agreements 28,858
16,961
Risk participation-in agreements 3,825
—
Foreign exchange contracts (Notional amounts):
Buys foreign currency, sells U.S. currency $ 1,200
$ 195
Sells foreign currency, buys U.S. currency 1,208
195
Fixed weighted average interest rate from the Company to counterparty 4.15 % 4.13 %
Floating weighted average interest rate from counterparty to the Company 3.21 % 2.77 %
Weighted average remaining term to maturity (in months) 82
91
Fair value:
Recognized as an asset:
Loan level derivatives $ 9,975
$ 9,738
Risk participation-out agreements 49
20
Foreign exchange contracts 22
—
Recognized as a liability:
Loan level derivatives $ 9,975
$ 9,738
Risk participation-in agreements 14
—
Foreign exchange contracts 14
—

Table of ~~December 31, 2016, the Company held no risk participation-in agreements. As of December 31, 2016, the fair value of the foreign exchange contracts was nominal.~~Contents

Stockholders' Equity and Dividends

The Company's total stockholders' equity was ~~$804.8 million~~$1.2 billion as of ~~September 30, 2017,~~March 31, 2023, representing a ~~$109.2~~$172.9 million increase compared to ~~$695.5~~$992.1 million at December 31, ~~2016.~~2022. The increase for the three months ended March 31, 2023, primarily reflects the PCSB purchase of $168 million, unrealized gain on securities available-for-sale of $7.9 million, net income attributable to the Company of ~~$43.7~~$7.6 million, for the nine months ended September 30, 2017, issuance of common stock of $81.9 million, an unrealized gain on securities available-for-sale of $1.9 million, an increase of $1.0 million related to stock-based compensation, which was partially offset by dividends paid by the Company of ~~$20.1 million in that same period.~~$12 million.

Stockholders' equity represented ~~12.04%~~10.11% of total assets as of ~~September 30, 2017~~March 31, 2023 and 10.80% of total assets as of December 31, ~~2016.~~2022. Tangible stockholders' equity (total stockholders' equity less goodwill and identified intangible assets, net) represented ~~10.09%~~7.94% of tangible assets (total assets less goodwill and identified intangible assets, net) as of ~~September 30, 2017~~March 31, 2023 and ~~8.73%~~9.20% as of December 31, ~~2016.~~2022.

On November 10, 2021, the Company's Board of Directors (the "Board") approved a stock repurchase program authorizing management to repurchase up to $20.0 million of the Company's common stock, commencing on November 15, 2021 and ending on December 31, 2022. On June 24, 2022, the Company suspended the program. As of June 24, 2022, 956,341 shares of the Company's common stock were repurchased by the Company at a weighted average price of $14.41.

The dividend payout ratio was ~~44.90%~~158.33% for the three months ended ~~September 30, 2017,~~March 31, 2023, compared to ~~46.60%~~39.28% for the same period ~~of 2016 and 46.09% for the nine months ended September 30, 2017, compared to 48.66% for the same period of 2016.~~in 2022.

Results of Operations

The primary drivers of the Company's net income are net interest income, which is strongly affected by the net yield on and growth of interest-earning assets and liabilities, ~~("net interest margin"),~~ the quality of the Company's assets, its levels of non-interest income and non-interest expense, and its tax provision.

The Company's net interest income represents the difference between interest income earned on its investments, loans and leases, and its cost of funds. Interest income is dependent on the amount of interest-earning assets outstanding during the period and the yield earned thereon. Cost of funds is a function of the average amount of deposits and borrowed money outstanding during the year and the interest rates paid thereon. The net interest margin is calculated by dividing net interest income by average interest-earning assets. Net interest spread is the difference between the average rate earned on interest-earning assets and the average rate paid on interest-bearing liabilities. The increases or decreases, as applicable, in the

components of interest income and interest expense, expressed in terms of fluctuation in average volume and rate, are summarized under "Rate/Volume Analysis" below. Information as to the components of interest income, interest expense and average rates is provided under "Average Balances, Net Interest Income, Interest-Rate Spread and Net Interest Margin" below.

Because the Company's assets and liabilities are not identical in duration and in repricing dates, the differential between the two is vulnerable to changes in market interest rates as well as the overall shape of the yield curve. These vulnerabilities are inherent to the business of banking and are commonly referred to as "interest-rate risk." How interest-rate risk is measured and, once measured, how much interest-rate risk is taken on, are based on numerous assumptions and other subjective judgments. See the discussion in “Item 3. Quantitative and Qualitative Disclosures about Market Risk” below.

The quality of the Company's assets also influences its earnings. Loans and leases that are not paid on a timely basis and exhibit other weaknesses can result in the loss of principal and/or interest income. Additionally, the Company must make timely provisions to the allowance for loan and lease losses based on estimates of probable losses inherent in the loan and lease portfolio. These additions, which are charged against earnings, are necessarily greater when greater probable losses are expected. Further, the Company incurs expenses as a result of resolving troubled assets. These variables reflect the "credit risk" that the Company takes on in the ordinary course of business and are further discussed under "Financial Condition—Asset Quality" above.

Net Interest Income

Net interest income increased ~~$4.4~~$16.2 million to ~~$56.8~~$86.0 million for the three months ended ~~September 30, 2017~~March 31, 2023 from ~~$52.4~~$69.8 million for the three months ended ~~September 30, 2016.~~March 31, 2022. This ~~overall~~ increase reflects a ~~$5.2~~$50.2 million increase in interest income on loans and leases, ~~and~~along with a ~~$0.3~~$7.2 million increase in interest income on ~~investment~~debt securities, short term investments and restricted equity securities, offset by a ~~$1.2~~$41.2 million increase in interest expense on ~~deposit~~deposits and borrowings, which is reflective of the ~~various portfolios repricing and replacing balances into the current~~rising interest rate environment. Refer to “Results of Operations - Comparison of the Three-Month Period Ended ~~September 30, 2017~~March 31, 2023 and ~~September 30, 2016~~March 31, 2022 — Interest Income” and “Results of Operations - Comparison of the Three-Month Period Ended ~~September 30, 2017~~March 31, 2023 and ~~September 30, 2016~~March 31, 2022 — Interest Expense ~~Deposit~~-Deposit and Borrowed Funds” below for more details.

Net interest income increased $13.7 million to $165.5 million for the nine months ended September 30, 2017 from $151.8 million for the nine months ended September 30, 2016. This overall increase reflects a $15.3 million increase in interest income on loans and leases and a $0.6 million increase in interest income on investment securities, offset by a $2.3 million increase in interest expense on deposit and borrowings, which is reflective of the various portfolios repricing and replacing balances into the current interest rate environment. Refer to ~~“Results of Operations - Comparison of the Nine-Month Period Ended September 30, 2017 and September 30, 2016 — Interest Income”~~ ~~and~~ ~~“Results of Operations - Comparison of the Nine-Month Period Ended September 30, 2017 and September 30, 2016 — Interest Expense Deposit and Borrowed Funds”~~ ~~below for more details.~~

Net interest margin ~~increased~~decreased by 913 basis points to ~~3.57%~~3.36% for the three months ended ~~September 30, 2017~~March 31, 2023 from ~~3.48%~~3.49% for the three months ended ~~September 30, 2016.~~March 31, 2022. Excluding PPP loans, net interest margin decreased by 8 basis points to 3.36% for the three months ended March 31, 2023 from 3.44% for three months ended March 31, 2022. The Company's weighted average

Table of Contents

interest rate on loans (prior to purchase accounting adjustments) increased to ~~4.52%~~5.33% for the three months ended ~~September 30, 2017~~March 31, 2023 from ~~4.36%~~4.00% for the three months ended September 30, 2016. Interest amortization and accretion on acquired loans totaled $0.2 million and contributed 1 basis point to loan yields during the three months ended September 30, 2017 compared to $0.9 million, or 6 basis points, for the three months ended September 30, 2016. The increase in the net interest margin is the result of repricing interest-earning assets in a slightly higher rate environment offset by a comparable increase in funding costs.

Net interest margin increased by 10 basis points to 3.56% for the nine months ended September 30, 2017 from 3.46% for the nine months ended September 30, 2016. The Company's weighted average interest rate on loans (prior to purchase accounting adjustments) increased to 4.44% for the nine months ended September 30, 2017 from 4.32% for the nine months ended September 30, 2016. Interest amortization and accretion on acquired loans totaled $0.6 million and contributed 1 basis point to loan yields during the nine months ended September 30, 2017, compared to $1.3 million, or 3 basis points, for the nine months ended September 30, 2016. The increase in the net interest margin is the result of repricing and originating interest-earning assets in a higher rate environment offset by an increase in funding costs.March 31, 2022.

The yield on interest-earning assets increased to ~~4.25%~~5.10% for the three months ended ~~September 30, 2017~~March 31, 2023 from ~~4.10%~~3.70% for the three months ended ~~September 30, 2016. This~~March 31, 2022. The increase is the result of higher yields on loans and leases ~~partially offset by a decrease in prepayment penalties~~ and ~~late charges.~~investments. During the three months ended ~~September 30, 2017,~~March 31, 2023, the Company recorded ~~$0.8~~$0.7 million in prepayment penalties and late charges, which contributed 53 basis points to yields on interest-earning assets, ~~in the three months ended September 30, 2017~~ compared to ~~$1.2~~$1.5 million, or 8 basis points, for the three months ended ~~September 30, 2016.~~March 31, 2022.

The yield on interest-earning assets increased to 4.17% for the nine months ended September 30, 2017 from 4.05% for the nine months ended September 30, 2016. This increase is the result of higher yields on loans and leases. During the nine months ended September 30, 2017, the Company recorded $2.6 million in prepayment penalties and late charges, which contributed 6 basis points to yields on interest-earning assets, compared to $2.7 million, or 6 basis points, in the nine months ended September 30, 2016.

The overall cost of funds (including non-interest-bearing demand checking accounts) increased 6165 basis points to ~~0.71%~~1.94% for the three months ended ~~September 30, 2017~~March 31, 2023 from ~~0.65%~~0.29% for the three months ended ~~September 30, 2016. The overall cost of funds increased 3 basis points to 0.68% for the nine months ended September 30, 2017 from 0.65% for the nine months ended September 30, 2016.~~March 31, 2022. Refer to "Financial Condition - Borrowed Funds" above for more details.

Management seeks to position the balance sheet to be neutral to asset sensitive to changes in interest rates. ~~Since the end of 2016,~~From 2017 through 2019, short term interest rates ~~have risen~~rose while at the same time net interest income, net interest spread, and net interest margin ~~have~~ also increased. During 2020, interest rates declined sharply in response to the economic impact of the COVID-19 pandemic, and began to increase in the first quarter of 2022. In ~~general,~~recent months, the Treasury yield curve has inverted and flatten at the long end. Short term rates have risen sharply due to multiple rate hikes implemented by the FRB. The shape of the curve indicates rates will begin to decline within a year and flatten around the 7-year mark. The short term increase in rates positively affected the Company's ~~balance sheet position should respond positively in a rising interest rate environment and when the rate curves are steepening which should result in a positive impact to~~ net interest income, net interest spread, and net interest margin initially. In the last quarter and as expected in the near term, the net interest ~~margin. A declining interest rate or flattening yield curve environment~~margin is expected to ~~have~~compress as deposit pricing "catches up" and investable funds migrate among depository and non-depository categories. Management expects this to persist for a ~~negative impact on~~quarter or two after the ~~Company's yields and~~Federal Reserve stops increasing rates after which time net interest ~~margin. Additional risk factors include, but are not limited to: ongoing pricing pressures in both~~margin is expected to stabilize and then increase as loans continue to reprice into the loan and deposit portfolios, the ability to increase the Company's core deposits, decrease its loan-to-deposit ratio, and decrease its reliance on FHLBB advances. Net interest income may also be negatively affected by changes in the amount of accretion on acquired loans and leases, deposits and borrowed funds, which are included in interest income and interest expense, respectively.higher rate environment.

Average Balances, Net Interest Income, Interest-Rate Spread and Net Interest Margin

The following table sets forth information about the Company's average balances, interest income and interest rates earned on average interest-earning assets, interest expense and interest rates paid on average interest-bearing liabilities, interest-rate spread and net interest margin for the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2023 and ~~September 30, 2016.~~March 31, 2022. Average balances are derived from daily average balances and yields include fees, costs and purchase-accounting-related premiums and discounts which are considered adjustments to coupon yields in accordance with GAAP. ~~Certain amounts previously reported have been reclassified to conform to the current presentation.~~

Table of Contents


	Three Months Ended															Three Months Ended
	September 30, 2017							September 30, 2016								March 31, 2023						March 31, 2022
	Average Balance			Interest (1)		Average Yield/ Cost		Average Balance			Interest (1)		Average Yield/ Cost			Average Balance		Interest (1)		Average Yield/ Cost		Average Balance		Interest (1)		Average Yield/ Cost
	(Dollars in Thousands)															(Dollars in Thousands)
Assets:															Assets:
Interest-earning assets:															Interest-earning assets:
Debt securities	$	642,018		$	3,264	2.03	%	$	604,394		$	2,910	1.93	%	Debt securities	$	1,029,068	$	7,974	3.10	%	$	720,263	$	2,996	1.66	%
Marketable and restricted equity securities	66,212			789		4.76	%	66,981			836		4.99	%	Marketable and restricted equity securities	76,911		1,255		6.53	%	27,909		328		4.70	%
Short-term investments	52,674			180		1.36	%	36,273			47		0.51	%	Short-term investments	147,654		1,495		4.05	%	192,475		66		0.14	%
Total investments	760,904			4,233		2.23	%	707,648			3,793		2.14	%	Total investments	1,253,633		10,724		3.42	%	940,647		3,390		1.44	%
Commercial real estate loans ⁽²⁾	2,974,185			31,299		4.12	%	2,872,733			29,470		4.10	%	Commercial real estate loans (2)	5,579,977		67,667		4.85	%	4,152,414		36,027		3.47	%
Commercial loans ⁽²⁾	760,115			7,959		4.10	%	717,265			7,130		3.90	%	Commercial loans (2)	892,522		14,017		6.28	%	755,809		7,998		4.23	%
Equipment financing ⁽²⁾	846,027			13,983		6.61	%	759,622			12,189		6.42	%	Equipment financing (2)	1,226,717		21,213		6.92	%	1,105,194		18,012		6.52	%
Residential mortgage loans ⁽²⁾	649,831			6,043		3.72	%	620,741			5,513		3.55	%	Residential mortgage loans (2)	1,032,025		11,073		4.29	%	804,939		6,992		3.47	%
Other consumer loans ⁽²⁾	369,925			4,015		4.30	%	356,516			3,810		4.24	%	Other consumer loans (2)	420,047		7,997		7.71	%	366,534		2,750		3.04	%
Total loans and leases	5,600,083			63,299		4.52	%	5,326,877			58,112		4.36	%	Total loans and leases	9,151,288		121,967		5.33	%	7,184,890		71,779		4.00	%
Total interest-earning assets	6,360,987			67,532		4.25	%	6,034,525			61,905		4.10	%	Total interest-earning assets	10,404,921		132,691		5.10	%	8,125,537		75,169		3.70	%
Allowance for loan and lease losses	(65,140		)					(58,032		)					Allowance for loan and lease losses	(114,421)						(98,960)
Non-interest-earning assets	385,195							383,604							Non-interest-earning assets	840,587						504,466
Total assets	$	6,681,042						$	6,360,097						Total assets	$	11,131,087					$	8,531,043
Liabilities and Stockholders' Equity:															Liabilities and Stockholders' Equity:
Interest-bearing liabilities:															Interest-bearing liabilities:
Interest-bearing deposits:															Interest-bearing deposits:
NOW accounts	$	321,731		55		0.07	%	$	295,762		52		0.07	%	NOW accounts	$	810,333	901		0.45	%	$	589,891	103		0.07	%
Savings accounts	605,303			306		0.20	%	566,192			318		0.22	%	Savings accounts	1,160,003		2,514		0.88	%	933,173		198		0.09	%
Money market accounts	1,765,610			2,267		0.51	%	1,678,937			1,905		0.45	%	Money market accounts	2,366,235		12,140		2.08	%	2,416,577		1,570		0.26	%
Certificate of deposit	1,139,699			3,356		1.17	%	1,112,831			2,837		1.01	%
Certificate of deposit accounts															Certificate of deposit accounts	1,346,761		7,456		2.25	%	1,091,729		1,848		0.69	%
Brokered deposit accounts															Brokered deposit accounts	534,527		6,357		4.82	%	132,751		52		0.16	%
Total interest-bearing deposits ⁽³⁾	3,832,343			5,984		0.62	%	3,653,722			5,112		0.56	%	Total interest-bearing deposits (3)	6,217,859		29,368		1.92	%	5,164,121		3,771		0.30	%
Advances from the FHLBB	913,206			3,028		1.30	%	921,396			2,778		1.18	%
Advances from the FHLB															Advances from the FHLB	1,264,523		14,531		4.60	%	103,878		187		0.72	%
Subordinated debentures and notes	83,204			1,274		6.13	%	83,036			1,259		6.07	%	Subordinated debentures and notes	84,062		1,354		6.44	%	83,915		1,244		5.93	%
Other borrowed funds	41,368			47		0.45	%	46,417			32		0.27	%	Other borrowed funds	158,499		1,249		3.20	%	130,080		61		0.19	%
Total borrowed funds	1,037,778			4,349		1.64	%	1,050,849			4,069		1.52	%	Total borrowed funds	1,507,084		17,134		4.55	%	317,873		1,492		1.88	%
Total interest-bearing liabilities	4,870,121			10,333		0.84	%	4,704,571			9,181		0.78	%	Total interest-bearing liabilities	7,724,943		46,502		2.44	%	5,481,994		5,263		0.39	%
Non-interest-bearing liabilities:															Non-interest-bearing liabilities:
Non-interest-bearing demand checking accounts ⁽³⁾	918,054							863,854							Non-interest-bearing demand checking accounts (3)	1,930,162						1,880,039
Other non-interest-bearing liabilities	80,616							90,025							Other non-interest-bearing liabilities	316,347						171,717
Total liabilities	5,868,791							5,658,450							Total liabilities	9,971,452						7,533,750
Brookline Bancorp, Inc. stockholders' equity	804,666							695,205
Noncontrolling interest in subsidiary	7,585							6,442
Total stockholders' equity															Total stockholders' equity	1,159,635						997,293

Total liabilities and stockholders' equity	$	6,681,042						$	6,360,097						Total liabilities and stockholders' equity	$	11,131,087					$	8,531,043
Net interest income (tax-equivalent basis) / Interest-rate spread ⁽⁴⁾				57,199		3.41	%				52,724		3.32	%	Net interest income (tax-equivalent basis) / Interest-rate spread (4)			86,189		2.66	%			69,906		3.31	%
Less adjustment of tax-exempt income				356							374				Less adjustment of tax-exempt income			140						58
Net interest income				$	56,843						$	52,350			Net interest income			$	86,049					$	69,848
Net interest margin ⁽⁵⁾						3.57	%						3.48	%	Net interest margin (5)					3.36	%					3.49	%

(1) Tax-exempt income on debt securities, equity securities and industrial revenue bonds are included in commercial real estate loans on a tax-equivalent basis.

(2) Loans on nonaccrual status are included in the average balances.

(3) Including non-interest-bearing checking accounts, the average interest rate on total deposits was ~~0.50%~~1.46% and ~~0.45%~~0.22% in the three months ended ~~September 30, 2017~~March 31, 2023 and ~~September 30, 2016,~~March 31, 2022, respectively.

(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.

Table of Contents

Nine Months Ended
September 30, 2017 September 30, 2016

Average
Balance
Interest (1)
Average
Yield/
Cost

Average
Balance
Interest (1)
Average
Yield/
Cost
(Dollars in Thousands)
Assets:
Interest-earning assets:
Investments :
Debt securities $ 631,549
$ 9,641
2.04 % $ 604,603
$ 9,078
2.00 %
Marketable and restricted equity securities 68,104
2,306
4.52 % 66,764
2,247
4.49 %
Short-term investments 42,922
342
1.06 % 46,198
149
0.43 %
Total investments 742,575
12,289
2.21 % 717,565
11,474
2.13 %
Loans and leases:
Commercial real estate loans ⁽²⁾
2,949,313
91,134
4.07 % 2,785,472
85,014
4.07 %
Commercial loans ⁽²⁾
730,453
22,737
4.11 % 692,634
20,430
3.88 %
Equipment financing ⁽²⁾
826,494
40,907
6.60 % 738,990
35,690
6.44 %
Residential mortgage loans ⁽²⁾
641,443
17,511
3.64 % 624,102
16,705
3.57 %
Other consumer loans ⁽²⁾
364,407
11,187
4.10 % 350,070
10,389
3.95 %
Total loans and leases 5,512,110
183,476
4.44 % 5,191,268
168,228
4.32 %
Total interest-earning assets 6,254,685
195,765
4.17 % 5,908,833
179,702
4.05 %
Allowance for loan and lease losses (62,142 ) (57,982 )
Non-interest-earning assets 374,558
379,761

Total assets $ 6,567,101
$ 6,230,612

Liabilities and Stockholders' Equity:
Interest-bearing liabilities:
Interest-bearing deposits:
NOW accounts $ 319,633
164
0.07 % $ 289,908
156
0.07 %
Savings accounts 603,814
916
0.20 % 561,798
998
0.24 %
Money market accounts 1,759,449
6,407
0.49 % 1,654,700
5,547
0.45 %
Certificate of deposit 1,088,011
9,120
1.12 % 1,107,600
8,174
0.99 %
Total interest-bearing deposits ⁽³⁾
3,770,907
16,607
0.59 % 3,614,006
14,875
0.55 %
Advances from the FHLBB 913,137
8,640
1.25 % 888,406
8,125
1.20 %
Subordinated debentures and notes 83,165
3,805
6.10 % 82,996
3,773
6.06 %
Other borrowed funds 49,752
137
0.37 % 42,463
82
0.26 %
Total borrowed funds 1,046,054
12,582
1.59 % 1,013,865
11,980
1.55 %
Total interest-bearing liabilities 4,816,961
29,189
0.81 % 4,627,871
26,855
0.78 %
Non-interest-bearing liabilities:
Non-interest-bearing deposits:
Non-interest-bearing demand checking accounts ⁽³⁾
905,684

829,659

Other non-interest-bearing liabilities 76,735

80,774

Total liabilities 5,799,380

5,538,304

Brookline Bancorp, Inc. stockholders' equity 760,447

686,134

Noncontrolling interest in subsidiary 7,274

6,174

Total liabilities and stockholders' equity $ 6,567,101

$ 6,230,612

Net interest income (tax-equivalent basis) / Interest-rate spread ⁽⁴⁾

166,576
3.36 %
152,847
3.27 %
Less adjustment of tax-exempt income
1,052

1,037

Net interest income
$ 165,524

$ 151,810

Net interest margin ⁽⁵⁾

3.56 %

3.46 %

~~(1) Tax-exempt income on debt securities, equity securities and industrial revenue bonds are included in commercial real estate loans on a tax-equivalent basis.~~

~~(2) Loans on nonaccrual status are included in the average balances.~~

(3) Including non-interest-bearing checking accounts, the average interest rate on total deposits was 0.47% and 0.45% in the nine months ended September 30, 2017 and September 30, 2016, respectively.

~~(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.~~

Rate/Volume Analysis

The following table presents, on a tax-equivalent basis, the extent to which changes in interest rates and changes in volume of interest-earning assets and interest-bearing liabilities have affected the Company's interest income and interest expense during the periods indicated. Information is provided in each category with respect to: (i) changes attributable to

changes in volume (changes in volume multiplied by prior rate), (ii) changes attributable to changes in rate (changes in rate multiplied by prior volume), and (iii) the net change. The changes attributable to the combined impact of volume and rate have been allocated proportionately to the changes due to volume and the changes due to rate.


	Three Months Ended March 31, 2023 as Compared to the Three Months Ended March 31, 2022
	Increase (Decrease) Due To
	Volume		Rate		Net Change
	(In Thousands)
Interest and dividend income:
Investments:
Debt securities	$	1,647	$	3,331	$	4,978
Marketable and restricted equity securities	759		168		927
Short-term investments	(19)		1,448		1,429
Total investments	2,387		4,947		7,334
Loans and leases:
Commercial real estate loans	14,670		16,970		31,640
Commercial loans and leases	1,636		4,383		6,019
Equipment financing	2,055		1,146		3,201
Residential mortgage loans	2,221		1,860		4,081
Other consumer loans	455		4,792		5,247
Total loans	21,037		29,151		50,188
Total change in interest and dividend income	23,424		34,098		57,522
Interest expense:
Deposits:
NOW accounts	51		747		798
Savings accounts	62		2,254		2,316
Money market accounts	(33)		10,603		10,570
Certificate of deposit accounts	525		5,083		5,608
Brokered deposit accounts	594		5,711		6,305
Total deposits	1,199		24,398		25,597
Borrowed funds:
Advances from the FHLB	9,677		4,667		14,344
Subordinated debentures and notes	2		108		110
Other borrowed funds	16		1,172		1,188
Total borrowed funds	9,695		5,947		15,642
Total change in interest expense	10,894		30,345		41,239
Change in tax-exempt income	82		—		82
Change in net interest income	$	12,448	$	3,753	$	16,201

Three Months Ended September 30, 2017 as Compared to the Three Months Ended September 30, 2016 Nine Months Ended September 30, 2017 as Compared to the Nine Months Ended September 30, 2016

Increase
(Decrease) Due To

Increase
(Decrease) Due To

Volume Rate Net Change Volume Rate Net Change
(In Thousands)
Interest and dividend income:
Investments:
Debt securities $ 193
$ 161
$ 354
$ 389
$ 174
$ 563
Marketable and restricted equity securities (9 ) (38 ) (47 ) 44
15
59
Short-term investments 28
105
133
(11 ) 204
193
Total investments 212
228
440
422
393
815
Loans and leases:
Commercial real estate loans 1,607
222
1,829
6,120
—
6,120
Commercial loans and leases 446
383
829
1,106
1,201
2,307
Equipment financing 1,424
370
1,794
4,312
905
5,217
Residential mortgage loans 262
268
530
473
333
806
Other consumer loans 149
56
205
414
384
798
Total loans 3,888
1,299
5,187
12,425
2,823
15,248
Total change in interest and dividend income 4,100
1,527
5,627
12,847
3,216
16,063
Interest expense:
Deposits:
NOW accounts 3
—
3
8
—
8
Savings accounts 19
(31 ) (12 ) 79
(161 ) (82 )
Money market accounts 101
261
362
358
502
860
Certificate of deposit 69
450
519
(143 ) 1,089
946
Total deposits 192
680
872
302
1,430
1,732
Borrowed funds:
Advances from the FHLBB (25 ) 275
250
206
309
515
Subordinated debentures and notes 3
12
15
8
24
32
Other borrowed funds (4 ) 19
15
16
39
55
Total borrowed funds (26 ) 306
280
230
372
602
Total change in interest expense 166
986
1,152
532
1,802
2,334
Change in tax-exempt income (18 ) —
(18 ) 15
—
15
Change in net interest income $ 3,952
$ 541
$ 4,493
$ 12,300
$ 1,414
$ 13,714

Table of Contents

Interest Income

Loans and Leases


	Three Months Ended September 30,				Dollar Change			Percent Change			Nine Months Ended September 30,							Dollar Change			Percent Change			Three Months Ended March 31,								Dollar Change			Percent Change
	2017		2016				2017				2016						2023						2022
	(Dollars in Thousands)																							(Dollars in Thousands)
Interest income—loans and leases:																									Interest income—loans and leases:
Commercial real estate loans	$	31,298	$	29,470	$	1,828			6.2	%		$	91,133		$	85,014				$			6,119		7.2	%	Commercial real estate loans	$	67,667		$			36,027			$	31,640	87.8	%
Commercial loans	7,714		6,876		838			12.2	%		22,011			19,676				2,335			11.9	%	Commercial loans	13,981					7,940			6,041				76.1		%
Equipment financing	13,983		12,188		1,795			14.7	%		40,907			35,690				5,217			14.6	%	Equipment financing	21,213					18,012			3,201			17.8	%
Residential mortgage loans	6,043		5,514		529			9.6	%		17,511			16,705				806			4.8	%	Residential mortgage loans	11,073					6,992			4,081			58.4	%
Other consumer loans	4,016		3,810		206			5.4	%		11,188			10,389				799			7.7	%	Other consumer loans	7,997					2,750			5,247			190.8	%
Total interest income—loans and leases	$	63,054	$	57,858	$	5,196		9.0	%		$	182,750		$	167,474			$	15,276		9.1	%	Total interest income—loans and leases	$	121,931				$	71,721		$	50,210		70.0	%

~~Interest income~~Total interest from loans and leases was ~~$63.1~~$121.9 million for the three months ended ~~September 30, 2017,~~March 31, 2023, and represented a yield on total loans of ~~4.52%~~5.33%. This compares to ~~$57.9~~$71.7 million of interest on loans and a yield of ~~4.36%~~4.00% for ~~September 30, 2016.~~the three months ended March 31, 2022. The ~~$5.2~~$50.2 million increase in interest income from loans and leases was ~~attributable to an increase of $3.9 million due to an increase in origination volume and an increase of $1.3 million due to the changes in interest rates.~~

Accretion on acquired loans and leases of $0.2 million contributed 1 basis point to the Company's net interest margin for the three months ended September 30, 2017, compared to $0.9 million and 6 basis points for the three months ended September 30, 2016.

Interest income from loans and leases was $182.8 million for the nine months ended September 30, 2017, resulting in a yield on total loans of 4.44%. This compares to $167.5 million of interest on loans and a yield of 4.32% for the nine months ended September 30, 2016. The year over year increase of $15.2 million in interest income from loans and leases wasprimarily due to an increase of ~~$12.4~~$29.2 million ~~due~~in changes to ~~increase in origination volume~~interest rates, and an increase of $21.0 million in origination volume; of ~~$2.8~~which $15.3 million ~~due to changes in interest rates.~~was driven by the acquisition of PCSB.

Accretion on acquired loans and leases of $0.6 million contributed 1 basis point to net interest margin for the nine months ended September 30, 2017, compared to $1.3 million and 3 basis point for the nine months ended September 30, 2016.

Investments

~~Investments~~


	Three Months Ended September 30,				Dollar Change				Percent Change			Nine Months Ended September 30,							Dollar Change			Percent Change			Three Months Ended March 31,								Dollar Change			Percent Change
	2017		2016					2017				2016						2023						2022
	(Dollars in Thousands)																								(Dollars in Thousands)
Interest income—investments:																										Interest income—investments:
Debt securities	$	3,154	$	2,822	$	332				11.8	%		$	9,310		$	8,829				$			481		5.4	%	Debt securities	$	7,870		$			2,996			$	4,874	162.7	%
Marketable and restricted equity securities	788		804		(16		)		-2.0	%		2,311			2,213				98			4.4	%	Marketable and restricted equity securities	1,255					328			927				282.6		%
Short-term investments	180		47		133				283.0	%		342			149				193			129.5	%	Short-term investments	1,495					66			1,429			2,165.2	%
Total interest income—investments	$	4,122	$	3,673	$	449			12.2	%		$	11,963		$	11,191			$	772		6.9	%	Total interest income—investments	$	10,620				$	3,390		$	7,230		213.3	%

Total ~~investment~~interest income from investments was ~~$4.1~~$10.6 million for the three months ended ~~September 30, 2017~~March 31, 2023, compared to ~~$3.7~~$3.4 million for the three months ended ~~September 30, 2016. As of September 30, 2017~~March 31, 2022. For the three months ended March 31, 2023 and ~~2016,~~2022, the yield on total investments was ~~2.2%~~3.4% and ~~2.1%,~~1.4%. respectively. The ~~year over year~~year-over-year increase in interest income on investments of ~~$0.4~~$7.2 million, or ~~12.2%~~213.3%, was primarily driven by a ~~$228.0 thousand~~$2.4 million increase due to ~~rates~~volume and a ~~$212.0 thousand~~$4.9 million increase due to ~~volume.~~rates.

~~Total investment income was $12.0 million for the nine months ended September 30, 2017 compared to $11.2 million for the nine months ended September 30, 2016. As~~

Table of ~~September 30, 2017 and 2016, the yield on total investments was 2.2% and~~Contents

2.1%, respectively. The year over year increase in interest income on investments of $0.8 million, or 6.9%, was driven by a $393.0 thousand increase due to rates and a $422.0 thousand increase due to volume.

Interest Expense—Deposits and Borrowed Funds


	Three Months Ended September 30,				Dollar Change				Percent Change		Nine Months Ended September 30,				Dollar			Percent				Three Months Ended March 31,					Dollar Change				Percent Change
	2017		2016					2017			2016		Change		Change			2023						2022
	(Dollars in Thousands)																					(Dollars in Thousands)
Interest expense:																							Interest expense:
Deposits:																					Deposits:
NOW accounts	$	55	$	52	$	3			5.8	%	$	164	$	156	$	8		5.1	%	NOW accounts		$	901		$	103			$	798			774.8	%
Savings accounts	306		318		(12		)		-3.8	%	916		998		(82		)	-8.2	%	Savings accounts		2,514			198		2,316				1,169.7	%
Money market accounts	2,267		1,905		362				19.0	%	6,407		5,547		860			15.5	%	Money market accounts		12,140			1,570		10,570				673.2	%
Certificates of deposit	3,356		2,837		519				18.3	%	9,120		8,174		946			11.6	%
Certificate of deposit accounts																				Certificate of deposit accounts		7,456			1,848		5,608				303.5	%
Brokered deposit accounts																				Brokered deposit accounts		6,357			52		6,305				12,125.0	%
Total interest expense - deposits	5,984		5,112		872				17.1	%	16,607		14,875		1,732			11.6	%	Total interest expense - deposits		29,368			3,771		25,597				678.8	%
Borrowed funds:																				Borrowed funds:
Advances from the FHLBB	3,028		2,778		250				9.0	%	8,640		8,125		515			6.3	%
Advances from the FHLB																				Advances from the FHLB		14,531			187		14,344				7,670.6	%
Subordinated debentures and notes	1,274		1,259		15				1.2	%	3,805		3,773		32			0.8	%	Subordinated debentures and notes		1,354			1,244		110				8.8	%
Other borrowed funds	47		32		15				46.9	%	137		82		55			67.1	%	Other borrowed funds		1,249			61		1,188				1,947.5	%
Total interest expense - borrowed funds	4,349		4,069		280				6.9	%	12,582		11,980		602			5.0	%	Total interest expense - borrowed funds		17,134			1,492		15,642				1,048.4	%
Total interest expense	$	10,333	$	9,181	$	1,152			12.5	%	$	29,189	$	26,855	$	2,334		8.7	%	Total interest expense		$	46,502		$	5,263	$	41,239			783.6	%

Deposits

For the three months ended ~~September 30, 2017,~~March 31, 2023, interest expense on deposits increased ~~$0.9~~$25.6 million, ~~or 17.1%, as~~ compared to the same period in ~~2016. Interest~~2022. The increase in interest expense ~~increased $0.7~~on deposits was driven by an increase of $24.4 million due to ~~an increase in~~higher interest rates and ~~$0.2~~an increase of $1.2 million ~~due to~~primarily driven by the growth in ~~deposits. There was no purchase~~volume of average brokered deposit and certificate of deposit balances. Purchase accounting ~~accretion~~amortization on acquired deposits for the three months ended ~~September 30, 2017, compared to $24.0~~March 31, 2023 was $324 thousand ~~for~~and one basis point. For the same period in 2022, the Company did not record any purchase accounting amortization.

Borrowed Funds

For the three months ended ~~September 30, 2016. Purchase accounting accretion did not impact the Company's net interest margin for the three months ended September 30, 2017 and 2016.~~

Interest expense on deposits increased $1.7 million, or 11.6%, to $16.6 million for the nine months ended September 30, 2017 from $14.9 million for the nine months ended September 30, 2016. The increase in interest expense on deposits was due to a $1.4 million increase due to rates offered and a $0.3 million increase due to volume. There was no accretion on acquired deposits for the nine months ended September 30, 2017 compared to $73.0 thousand for the nine months ended September 30, 2016. Accretion did not have an impact on the Company's net interest margin for the nine months ended September 30, 2017 and 2016.

~~Borrowed Funds~~

~~During the three months ended September 30, 2017,~~March 31, 2023, interest paid on borrowed funds increased ~~$0.3~~$15.6 million ~~or 6.9% year over year, primarily driven by an increase in FHLBB borrowings.~~year-over-year. The cost of borrowed funds increased to ~~1.64%~~4.55% for the three months ended ~~September 30, 2017~~March 31, 2023 from ~~1.52%~~1.88% for the three months ended ~~September 30, 2016.~~March 31, 2022. The increase in interest expense was driven by an increase of ~~$306.0 thousand~~$9.7 million due to volume and an increase of $5.9 million due to borrowing ~~rates and a decrease of $26.0 thousand due to volume.~~rates. For the three months ended ~~September 30, 2017, there was no~~March 31, 2023, the purchase accounting ~~accretion~~amortization on acquired borrowed funds was $130 thousand and one basis point compared to ~~$0.6 million~~$12 thousand and ~~four~~no basis points for the three months ended ~~September 30, 2016.~~March 31, 2022.

Interest expense on borrowed funds increased by $0.6 million, or 5.0%, to $12.6 million for the nine months ended September 30, 2017 from $12.0 million for the nine months ended September 30, 2016. The cost

Table of borrowed funds increased to 1.59% for the nine months ended September 30, 2017 from 1.55% for the nine months ended September 30, 2016. The increase in interest expense was due to a $372.0 thousand increase due to higher borrowing rates and a $230.0 thousand increase due to higher volume. Accretion on acquired borrowed funds of $1.0 million improved the Company’s net interest margin by two basis points for the nine months ended September 30, 2017. This compared to $1.9 million and four basis points for the nine months ended September 30, 2016.Contents

Provision for Credit Losses

The provisions for credit losses are set forth below:


	Three Months Ended March 31,				Dollar Change		Percent Change
	2023		2022
	(Dollars in Thousands)
Provision (credit) for loan and lease losses:
Commercial real estate	$	14,532	$	(151)	$	14,683	(9,723.8)	%
Commercial	6,614		(1,604)		8,218		(512.3)	%
Consumer	1,688		81		1,607		1,984.0	%

Total provision (credit) for loan and lease losses	22,834		(1,674)		24,508		(1,464.0)	%
Provision (credit) for loan and lease losses on PCD loans:
Commercial real estate	1,685		—		1,685		N/A
Commercial	469		—		469		N/A
Consumer	190		—		190		N/A
Total provision (credit) for loan and lease losses on PCD loans	2,344		—		2,344		N/A
Unfunded credit commitments	2,510		1,510		1,000		66.2	%
Investment securities available-for-sale	198		—		198		N/A
Total provision (credit) for credit losses	$	27,886	$	(164)	$	28,050	(17,103.7)	%

Three Months Ended September 30, Dollar Percent Nine Months Ended September 30, Dollar Percent
2017
2016 Change Change 2017 2016 Change Change
(Dollars in Thousands)
Provision for loan and lease losses:
Commercial real estate $ 979
$ (1,755 ) $ 2,734
155.8 % $ 1,041
$ (561 ) $ 1,602
285.6 %
Commercial 1,832
3,923
(2,091 ) -53.3 % 15,636
7,201
8,435
117.1 %
Consumer 35
(14 ) 49
350.0 % 421
451
(30 ) -6.7 %
Total provision for loan and lease losses 2,846
2,154
692
32.1 % 17,098
7,091
10,007
141.1 %
Unfunded credit commitments 65
61
4
6.6 % 88
47
41
87.2 %
Total provision for credit losses $ 2,911
$ 2,215
$ 696
31.4 % $ 17,186
$ 7,138
$ 10,048
140.8 %

For the three months ended ~~September 30, 2017,~~March 31, 2023, the Allowance for Credit Losses ("ACL") increased $25.7 million resulting in a provision for credit losses ~~increased $0.7 million, or 31.4%, to $2.9 million from $2.2 million~~of $25.5 million. The increase in the ACL for the three months ended ~~September 30, 2016. The~~March 31, 2023 is attributable to an increase in ~~the provision for credit losses for the three months ended September 30, 2017 was primarily driven by charge-offs on several taxi medallion loans during the quarter,~~specific reserves as well as ~~changes in loss factors of the commercial real estate portfolio during the third quarter of 2017.~~

For the nine months ended September 30, 2017, the provision for credit losses increased $10.0 million, or 140.8%, to $17.2 million from $7.1 million for the nine months ended September 30, 2016. The increase in the provision for credit losses for the nine months ended September 30, 2017 was primarily driven by the continued ~~loan growth in the commercial real estate and equipment financing portfolios and increases in specific reserves for taxi medallion loans.~~low level of net charge-offs, partially offset by portfolio growth.

See management’s discussion of “Financial Condition — Allowance for Loan and Lease Losses” and Note 5, “Allowance for Loan and Lease Losses,” to the unaudited consolidated financial statements for a description of how management determined the allowance for loan and lease losses for each portfolio and class of loans.

Non-Interest Income

The following table sets forth the components of non-interest income:


	Three Months Ended September 30,				Dollar Change				Percent Change		Nine Months Ended September 30,						Dollar Change				Percent Change			Three Months Ended March 31,								Dollar Change					Percent Change
	2017		2016					2017			2016					2023							2022
	(Dollars in Thousands)																							(Dollars in Thousands)
Deposit fees	$	2,547	$	2,289			$	258				11.3	%	$	7,508				$	6,650				$	858	12.9	%	Deposit fees		$	2,657				$	2,500			$	157	6.3	%
Loan fees	282		330		(48		)		-14.5	%	772			977			(205		)		-21.0	%	Loan fees	391				747						(356)				(47.7)		%
Loan level derivative income, net	844		858		(14		)		-1.6	%	1,432			3,697			(2,265		)		-61.3	%	Loan level derivative income, net	2,373				686				1,687					245.9	%
Gain on sales of investment securities, net	—		—		—				—	%	11,393			—			11,393				100.0	%
Gain (loss) on investment securities, net																							Gain (loss) on investment securities, net	1,701				—				1,701					N/A
Gain on sales of loans and leases held-for-sale	1,049		588		461				78.4	%	1,709			1,986			(277		)		-13.9	%	Gain on sales of loans and leases held-for-sale	1,638				344				1,294					376.2	%

Other	1,251		1,264		(13		)		-1.0	%	3,544			3,893			(349		)		-9.0	%	Other	4,177				1,252				2,925					233.6	%
Total non-interest income	$	5,973	$	5,329	$	644			12.1	%	$	26,358		$	17,203		$	9,155			53.2	%	Total non-interest income	$	12,937			$	5,529			$	7,408				134.0	%

For the three months ended ~~September 30, 2017,~~March 31, 2023, non-interest income increased ~~$0.6~~$7.4 million, or ~~12.1%~~134.0%, to ~~$6.0~~$12.9 million as compared to $5.5 million for the same period of 2022. The increase was primarily driven by increases of $2.9 million in ~~2016. This increase is primarily due to a $0.3~~other income, $1.7 million ~~increase~~ in ~~deposit fees~~gain (loss) on investment securities, net, $1.7 million in loan level derivative income, net, and ~~a $0.5~~$1.3 million ~~increase~~ in gain on sales of loans and leases held-for-sale.

For the nine months ended September 30, 2017, non-interest income increased $9.2 million, or 53.2%, to $26.4 million as compared to the same period of 2016. This increase is primarily due to a $0.9 million increase in deposit fees, offset by a $2.3 million decrease in loanLoan level derivative income ~~and a $11.4 million increase in gain on sales of investment securities.~~

~~Deposit fees~~ increased ~~$0.3~~$1.7 million, or ~~11.3%~~245.9%, to ~~$2.5~~$2.4 million for the three months ended ~~September 30, 2017~~March 31, 2023 from ~~$2.3~~$0.7 million for the same period in 2022, primarily driven by higher volume in loan level derivative transactions completed for the three months ended March 31, 2023.

Table of ~~2016 and increased $0.9 million, or 12.9%, to $7.5~~Contents

Gain (loss) on investment securities was $1.7 million for the ~~nine~~three months ended ~~September 30, 2017 from $6.7 million~~March 31, 2023. The Company did not have any gain (loss) on investment securities for the same period in 2022. The increase was primarily driven by gain on sale of ~~2016. This increase is primarily due to growth in deposits.~~PCSB investments.

Gain on sales of loans and leases held-for-sale increased ~~$0.5~~$1.3 million, or ~~78.4%~~376.2%, to ~~$1.0~~$1.6 million for the three months ended ~~September 30, 2017~~March 31, 2023 from ~~$0.6~~$0.3 million for the same period ~~of 2016. This increase is~~in 2022, primarily driven by ~~the~~higher gain ~~recorded~~ on ~~the~~ sale ~~of loans.~~to participants.

~~Loan level derivative~~Other income ~~decreased $2.3~~increased $2.9 million, or ~~61.3%~~233.6%, to ~~$1.4~~$4.2 million for the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2023 from ~~$3.7~~$1.3 million for the same period ~~of 2016, primarily driven by fewer loan level derivative transactions completed for the nine months ended September 30, 2017.~~

No gain on sales of investment securities were recorded for the three months ended September 30, 2017 and 2016 and increased to $11.4 million, or 100.0%, for the nine months ended September 30, 2017 from zero for the same period of 2016,in 2022, primarily driven by the ~~gain~~mark to market on ~~investment securities in the first quarter 2017.~~interest rate swaps on participated loans and bank owned life insurance income, partially offset by lower 1031 exchange income and advisory fees-investment income.

Non-Interest Expense

The following table sets forth the components of non-interest expense:


	Three Months Ended September 30,				Dollar Change				Percent Change		Nine Months Ended September 30,						Dollar Change				Percent Change			Three Months Ended March 31,								Dollar Change					Percent Change
	2017		2016					2017			2016					2023							2022
	(Dollars in Thousands)																							(Dollars in Thousands)
Compensation and employee benefits	$	21,067	$	20,369			$	698				3.4	%	$	61,761				$	58,179				$	3,582	6.2	%	Compensation and employee benefits		$	36,565				$	26,884				$	9,681	36.0	%
Occupancy	3,650		3,411		239				7.0	%	10,952			10,328			624				6.0	%	Occupancy	5,223				4,284						939				21.9	%
Equipment and data processing	4,210		3,826		384				10.0	%	12,437			11,468			969				8.4	%	Equipment and data processing	6,462				5,078				1,384					27.3	%
Professional services	973		997		(24		)		-2.4	%	3,115			2,925			190				6.5	%	Professional services	1,430				1,226				204					16.6	%
FDIC insurance	842		956		(114		)		-11.9	%	2,648			2,677			(29		)		-1.1	%	FDIC insurance	1,244				728				516					70.9	%
Advertising and marketing	839		844		(5		)		-0.6	%	2,513			2,558			(45		)		-1.8	%	Advertising and marketing	1,410				1,272				138					10.8	%
Amortization of identified intangible assets	519		623		(104		)		-16.7	%	1,570			1,879			(309		)		-16.4	%	Amortization of identified intangible assets	1,966				134				1,832					1,367.2	%
Merger and acquisition expense	205		—		205				100.0	%	205			—			205				100.0	%	Merger and acquisition expense	6,409				—				6,409					N/A
Other	3,103		2,362		741				31.4	%	8,758			7,707			1,051				13.6	%	Other	4,067				2,881				1,186					41.2	%
Total non-interest expense	$	35,408	$	33,388	$	2,020			6.1	%	$	103,959		$	97,721		$	6,238			6.4	%	Total non-interest expense	$	64,776			$	42,487			$	22,289				52.5	%

For the three months ended ~~September 30, 2017,~~March 31, 2023, non-interest expense increased ~~$2.0~~$22.3 million, or ~~6.1%~~52.5%, ~~to $35.4 million as~~ compared to the same period in ~~2016. This~~2022. The increase iswas primarily ~~due to a $0.7~~driven by increases of $9.7 million ~~increase~~ in compensation and employee benefits expense, ~~a $0.4~~$6.4 million ~~increase~~in merger and acquisition expense, $1.8 million in amortization of identified intangible assets, and $1.4 million in equipment and data ~~processing expense, and a $0.7 million increase in other expense.~~

For the nine months ended September 30, 2017, non-interest expense increased $6.2 million, or 6.4%, to $104.0 million as compared to the same period in 2016. This increase is primarily due to a $3.6 million increase in compensation and employee benefits expense, a $1.0 million increase in equipment and data processing expense, and a $1.1 million increase in other expense.

The efficiency ratio decreased to 56.37% for the three months ended September 30, 2017 from 57.89% for the same period in 2016 and decreased to 54.18% for the nine months ended September 30, 2017 from 57.82% for the same period in 2016. Efforts to drive revenue growth contributed to the overall improvement in the efficiency ratio, along with an $11.4 million gain on sales of investment securities in the first quarter of 2017.processing.

Compensation and employee benefits expense increased ~~$0.7~~$9.7 million, or ~~3.4%~~36.0%, to ~~$21.1~~$36.6 million for the three months ended ~~September 30, 2017,~~March 31, 2023 from ~~$20.4~~$26.9 million for the same period in ~~2016 and increased $3.6 million, or 6.2% to $61.8 million for the nine months ended September 30, 2017 from $58.2 million for the same period in 2016. This increase was~~2022, primarily driven by ~~an increase in~~higher employee headcount, higher salaries, higher incentive bonus, higher employee benefits-retirement plan, and ~~incentive plan expenses.~~higher payroll benefits-health care.

Equipment and data processing expense increased ~~$0.4~~$1.4 million, or ~~10.0%~~27.3%, to ~~$4.2~~$6.5 million for the three months ended ~~September 30, 2017~~March 31, 2023 from ~~$3.8~~$5.1 million for the same period in ~~2016~~2022, primarily driven by higher software licenses and subscriptions, core processing, depreciation-purchased software, data communications, and depreciation-other furniture & equipment, partially offset by lower ATM maintenance and loan processing expense.

Merger and acquisition expense increased ~~$1.0~~$6.4 million ~~or 8.4%,~~ to ~~$12.4~~$6.4 million, for the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2023. For the same period in 2022, the Company did not incur any merger-related expenses. The increase in 2023 was primarily driven by merger-related expenses for PCSB.

Amortization expense of identified intangible assets increased $1.8 million, or 1,367.2%, to $2.0 million for the three months ended March 31, 2023 from ~~$11.5~~$0.1 million for the same period in ~~2016. This increase was~~2022, primarily driven by higher core deposit intangible expense for PCSB.

Table of Contents

Provision for Income Taxes


	Three Months Ended March 31,						Dollar Change		Percent Change
	2023			2022
	(Dollars in Thousands)
Income before provision for income taxes	$	8,668		$	33,050		$	(24,382)	(73.8)	%
Provision (benefit) for income taxes	1,108			8,345			(7,237)		(86.7)	%
Net income	$	7,560		$	24,705		$	(17,145)	(69.4)	%
Effective tax rate	12.8		%	25.2		%	N/A		(49.2)	%

The Company recorded an ~~increase related to core processing, software licenses, and loan processing expense.~~

~~Other~~income tax expense ~~increased $0.7 million, or 31.4%, to $3.1~~of $1.1 million for the three months ended ~~September 30, 2017 from $2.4 million for the same period in 2016 and increased $1.1 million, or 13.6%,~~March 31, 2023, compared to ~~$8.8 million for the nine months ended September 30, 2017 from $7.7 million for the same period in 2016. This increase was primarily driven by~~ an ~~increase related to loan expenses.~~

~~Provision for Income Taxes~~

Three Months Ended September 30,
Dollar
Change

Percent
Change
Nine Months Ended September 30,
Dollar
Change

Percent
Change
2017
2016 2017 2016
(Dollars in Thousands)
Income before provision for income taxes $ 24,497
$ 22,076
$ 2,421
11.0 % $ 70,737
$ 64,154
$ 6,583
10.3 %
Provision for income taxes 8,330
7,804
526
6.7 % 24,924
22,868
2,056
9.0 %
Net income, before non-controlling interest in subsidiary $ 16,167
$ 14,272
$ 1,895
13.3 % $ 45,813
$ 41,286
$ 4,527
11.0 %
Effective tax rate 34.0 % 35.4 % N/A
-4.0 % 35.2 % 35.6 % N/A
-1.1 %

~~The Company recorded~~ income tax expense of $8.3 million for the three months ended ~~September 30, 2017, compared to $7.8 million for the three months ended September 30, 2016,~~March 31, 2022, representing effective tax rates of ~~34.0%~~12.8% and ~~35.4%~~25.2%, respectively.

The Company recorded income tax expense of $24.9 million for the nine months ended September 30, 2017, compared to $22.9 million for the nine months ended September 30, 2016, representing effective tax rates of 35.2% and 35.6%, respectively.

The decrease in the effective tax ~~rates for the three and nine months ended September 30, 2017 was~~rate is primarily due to ~~the adoption of ASU 2016-09. This ASU requires that the excess~~further participation in energy tax benefit associated with stock compensation transactions be recorded through earnings as a discrete item within the Company's effective tax rate during the period of the transaction. The prior guidance required the recognition of the excess tax benefit through additional paid in capital. The majority of the Company's stock based compensation events occurcredit deals in the ~~third quarter. Refer also~~quarter, offset by merger expenses relating to ~~Note 9, "Stock Based Compensation."~~the acquisition of PCSB Bank.

During the third quarter of 2017, the Company was notified by the Internal Revenue Service (IRS) of its intent to examine the Company's 2015 consolidated federal income tax return. Management believes that this examination will conclude during the next 12 months.

Liquidity and Capital Resources

Liquidity

Liquidity is defined as the ability to meet current and future financial obligations of a short-term nature. The Company further defines liquidity as the ability to respond to the needs of depositors and borrowers, as well as to earnings enhancement opportunities, in a changing marketplace. Liquidity management is monitored by an Asset/Liability Committee ("ALCO"), consisting of members of management, which is responsible for establishing and monitoring liquidity targets as well as strategies and tactics to meet these targets.

The primary source of funds for the payment of dividends and expenses by the Company is dividends paid to it by the Banks and Brookline Securities Corp. The primary sources of liquidity for the Banks consist of deposit inflows, loan repayments, borrowed funds, and maturing investment securities.

In the first quarter, the Company operated with increased liquidity. In the quarter, the Company shifted its balance sheet asset mix to include additional cash and available for sale securities. Management will continue to monitor the economic markets and evaluate changes to the Company’s liquidity position.

The Company held higher levels of on balance sheet liquidity in the form of cash and available for sale securities in the first quarter. Cash and equivalents at the end of the quarter were $486.3 million, or 4.2% of the balance sheet, compared to $383.0 million, or 4.2% of the balance sheet, as of December 31, 2022. In general, in a normal operating environment, the Company seeks to maintain liquidity levels of cash, cash equivalents and investment securities available-for-sale of between 5% and 15% of total assets. As of March 31, 2023, cash, cash equivalents and investment securities available-for-sale totaled $1.6 billion, or 13.5% of total assets. This compares to $1.0 billion, or 11.3% of total assets, as of December 31, 2022.

Deposits, which are considered the most stable source of liquidity, totaled ~~$4.8~~$8.5 billion as of ~~September 30, 2017~~March 31, 2023 and represented ~~83.0%~~83.8% of total funding (the sum of total deposits and total borrowings), compared to deposits of ~~$4.6~~$6.5 billion, or ~~81.5%~~82.0% of total funding, as of December 31, ~~2016.~~2022. Core deposits, which consist of demand checking, NOW, savings and money market accounts, totaled ~~$3.6~~$6.1 billion as of ~~September 30, 2017~~March 31, 2023 and represented ~~75.7%~~72.3% of total deposits, compared to core deposits of ~~$3.6~~$5.3 billion, or ~~77.4%~~81.0% of total deposits, as of December 31, ~~2016.~~2022. Additionally, the Company had ~~$260.8~~$982.4 million of brokered deposits as of ~~September 30, 2017,~~March 31, 2023, which represented ~~5.4%~~11.6% of total deposits, compared to ~~$203.4~~$310.1 million or ~~4.4%~~4.8% of total deposits, as of December 31, ~~2016.~~2022. The Company offers attractive interest rates based on market conditions to increase deposits balances, while managing cost of funds.

Borrowings are used to diversify the Company's funding mix and to support asset growth. When profitable lending and investment opportunities exist, access to borrowings provides a means to grow the balance sheet. Borrowings totaled ~~$1.0~~$1.6 billion as of ~~September 30, 2017,~~March 31, 2023, representing ~~17.0%~~16.2% of total funding, compared to ~~$1.0~~$1.4 billion, or ~~18.5%~~18.0% of total funding, as of December 31, ~~2016.~~2022. The growth in the balance sheet is driven by the current operating environment, management will continue to monitor economic conditions and make adjustments to the balance sheet mix as appropriate.

As members of the ~~FHLBB,~~FHLB, the Banks have access to both short- and long-term borrowings. As of ~~September 30, 2017 and December~~March 31, ~~2016,~~2023, the Company's total borrowing limit from the ~~FHLBB~~FHLB for advances and repurchase agreements was ~~$1.5~~$2.2 billion, compared to $1.7 billion as of December 31, 2022, the increase based on the level of qualifying collateral available for these borrowings.

As of ~~September 30, 2017,~~March 31, 2023, the Banks also have access to funding through certain uncommitted lines of credit of ~~$204.0~~$784.0 million.

Table of Contents

The Company had a ~~$12.0~~$30.0 million committed line of credit for contingent liquidity as of ~~September 30, 2017.~~March 31, 2023. As of ~~September 30, 2017,~~March 31, 2023, the Company did not have any outstanding borrowings on this ~~committed line of credit outstanding.~~line.

The Company has access to the Federal Reserve ~~Bank~~Bank's "discount window" to supplement its liquidity. The Company ~~has $86.9~~had $239.6 million of borrowing capacity at the Federal Reserve Bank as of ~~September 30, 2017.~~March 31, 2023. As of ~~September 30, 2017,~~March 31, 2023, the Company did not have any outstanding borrowings with the Federal Reserve ~~Bank outstanding.~~Bank.

Additionally, the Banks have access to liquidity through repurchase agreements and additional untapped brokered deposits.

In general, the Company seeks to maintain a high degree of liquidity and targets cash, cash equivalents and investment securities available-for-sale balances of between 10% and 30% of total assets. As of September 30, 2017, cash, cash equivalents and investment securities available-for-sale totaled $586.3 million, or 8.8% of total assets. This compares to $591.3 million, or 9.2% of total assets as of December 31, 2016.

While management believes that the Company has adequate liquidity to meet its commitments and to fund the Banks' lending and investment activities, the availabilities of these funding sources are subject to broad economic conditions and could be restricted in the future. Such restrictions would impact the Company's immediate liquidity and/or additional liquidity needs.

Off-Balance-Sheet Financial Instruments

The Company is party to off-balance-sheet financial instruments in the normal course of business to meet the financing needs of its customers and to reduce its own exposure to fluctuations in interest rates. These financial instruments include loan commitments, standby and commercial letters of credit and interest-rate swaps. According to GAAP, these financial instruments are not recorded in the financial statements until they are funded or related fees are incurred or received.

~~The contract amounts reflect the extent of the involvement the Company has in particular classes of these instruments. Such commitments involve,~~ See Note 12, "Commitments and Contingencies", to ~~varying degrees, elements of credit risk and interest-rate risk in excess of the amount recognized in~~ the consolidated ~~balance sheet. The Company’s exposure to credit loss in the event~~financial statements for a description of ~~non-performance by the counterparty is represented by the contractual amount of the~~off-balance-sheet financial instruments. ~~The Company uses the same policies in making commitments and conditional obligations as it does for on-balance-sheet instruments.~~

Financial instruments with off-balance-sheet risk at the dates indicated follow:


	At March 31, 2023		At December 31, 2022
	(In Thousands)
Financial instruments whose contract amounts represent credit risk:
Commitments to originate loans and leases:
Commercial real estate	$	214,390	$	414,217
Commercial	242,928		291,188
Residential mortgage	10,788		14,036
Unadvanced portion of loans and leases	1,283,463		1,202,738
Unused lines of credit:
Home equity	751,717		700,201
Other consumer	105,416		97,313
Other commercial	478		526
Unused letters of credit:
Financial standby letters of credit	14,611		13,584
Performance standby letters of credit	31,202		31,330
Commercial and similar letters of credit	4,817		2,619
Interest rate derivatives	$	225,000	$	150,000
Loan level derivatives:
Receive fixed, pay variable	1,773,735		1,489,709
Pay fixed, receive variable	1,773,735		1,489,709
Risk participation-out agreements	511,464		393,624
Risk participation-in agreements	74,757		75,223
Foreign exchange contracts:
Buys foreign currency, sells U.S. currency	2,631		2,383
Sells foreign currency, buys U.S. currency	2,650		2,400

At September 30, 2017 At December 31, 2016
(In Thousands)
Financial instruments whose contract amounts represent credit risk:
Commitments to originate loans and leases:
Commercial real estate $ 95,484
$ 27,750
Commercial 89,036
71,716
Residential mortgage 19,672
28,179
Unadvanced portion of loans and leases 526,532
580,416
Unused lines of credit:
Home equity 383,973
340,682
Other consumer 14,119
13,157
Other commercial 306
208
Unused letters of credit:
Financial standby letters of credit 11,270
11,720
Performance standby letters of credit 668
516
Commercial and similar letters of credit 855
785
Loan level derivatives:
Receive fixed, pay variable 465,470
383,780
Pay fixed, receive variable 465,470
383,780
Risk participation-out agreements 28,858
16,961
Risk participation-in agreements 3,825
—
Foreign exchange contracts:
Buys foreign currency, sells U.S. currency 1,200
195
Sells foreign currency, buys U.S. currency 1,208
195

Table of ~~December 31, 2016, the Company held no risk participation-in agreements.~~Contents

Capital Resources

As of ~~September 30, 2017,~~March 31, 2023, the Company and the Banks are each under the primary regulation of, and must comply with, the capital requirements of the FRB. Under these rules, the Company and the Banks are each required to maintain a minimum common equity Tier 1 capital ratio of 4.5%, a minimum Tier 1 capital leverage ratio of 6.0%, a minimum total risk based capital ratio of 8% and a minimum Tier 1 leverage ratio of 4%. Additionally, the Company and the Banks are required to establish a capital conservation buffer of common equity Tier 1 capital in an amount above the minimum risk-based capital requirements for “adequately capitalized” institutions equal to 2.5% of total risk weighted assets, or face restrictions on the ability to pay dividends, pay discretionary bonuses, and to engage in share repurchases. As of ~~September 30, 2017,~~March 31, 2023, the Company and the Banks exceeded all regulatory capital requirements, and the Banks were each considered “well-capitalized” under prompt corrective action ~~regulations, as amended to reflect the changes under Basel III Capital Rules.~~ regulations.

The following table presents actual and required capital amounts and capital ratios as of ~~September 30, 2017~~March 31, 2023 for the Company and the Banks under the Basel III Capital Rules based on the phase-in provision of the Basel III Capital Rules and the minimum required capital levels as of January 1, 2019 when the Basel III Capital Rules have been fully phased in.Banks.

~~The Company's and the Banks' actual and required capital amounts and ratios were as follows:~~


																		Actual				Minimum Required for Capital Adequacy Purposes				Minimum Required for Fully Phased in Capital Adequacy Purposes plus Capital Conservation Buffer				Minimum Required to be Considered “Well-Capitalized” Under Prompt Corrective Action Provisions
	Actual				Minimum Required for Capital Adequacy Purposes				Minimum Required for Fully Phased in Capital Adequacy Purposes plus Capital Conservation Buffer				Minimum Required to be Considered “Well-Capitalized” Under Prompt Corrective Action Provisions					Amount		Ratio		Amount		Ratio		Amount		Ratio		Amount		Ratio
	Amount		Ratio		Amount		Ratio		Amount		Ratio		Amount		Ratio			(Dollars in Thousands)
	(Dollars in Thousands)
At September 30, 2017:
At March 31, 2023:																	At March 31, 2023:
Brookline Bancorp, Inc.																	Brookline Bancorp, Inc.
Common equity Tier 1 capital ratio ⁽¹⁾	$	666,819	12.07	%	$	248,607	4.50	%	$	386,722	7.00	%	N/A		N/A		Common equity Tier 1 capital ratio (1)	$	953,604	10.66	%	$	402,553	4.50	%	$	626,194	7.00	%	N/A		N/A
Tier 1 leverage capital ratio ⁽²⁾	683,868		10.45	%	261,768		4.00	%	261,768		4.00	%	N/A		N/A		Tier 1 leverage capital ratio (2)	963,332		8.78	%	438,876		4.00	%	438,876		4.00	%	N/A		N/A
Tier 1 risk-based capital ratio ⁽³⁾	683,868		12.38	%	331,438		6.00	%	469,538		8.50	%	N/A		N/A		Tier 1 risk-based capital ratio (3)	963,332		10.76	%	537,174		6.00	%	760,996		8.50	%	N/A		N/A
Total risk-based capital ratio ⁽⁴⁾	824,622		14.92	%	442,157		8.00	%	580,330		10.50	%	N/A		N/A		Total risk-based capital ratio (4)	1,149,943		12.85	%	715,918		8.00	%	939,642		10.50	%	N/A		N/A
Brookline Bank																	Brookline Bank
Common equity Tier 1 capital ratio ⁽¹⁾	$	407,604	11.58	%	$	158,395	4.50	%	$	246,393	7.00	%	$	228,793	6.50	%	Common equity Tier 1 capital ratio (1)	$	574,897	10.90	%	$	237,343	4.50	%	$	369,200	7.00	%	$	342,828	6.50	%
Tier 1 leverage capital ratio ⁽²⁾	415,378		10.21	%	162,734		4.00	%	162,734		4.00	%	203,417		5.00	%	Tier 1 leverage capital ratio (2)	574,897		9.37	%	245,420		4.00	%	245,420		4.00	%	306,775		5.00	%
Tier 1 risk-based capital ratio ⁽³⁾	415,378		11.80	%	211,209		6.00	%	299,213		8.50	%	281,612		8.00	%	Tier 1 risk-based capital ratio (3)	574,897		10.90	%	316,457		6.00	%	448,314		8.50	%	421,943		8.00	%
Total risk-based capital ratio ⁽⁴⁾	459,389		13.05	%	281,618		8.00	%	369,623		10.50	%	352,022		10.00	%	Total risk-based capital ratio (4)	641,174		12.15	%	422,172		8.00	%	554,101		10.50	%	527,715		10.00	%
BankRI																	BankRI
Common equity Tier 1 capital ratio ⁽¹⁾	$	191,682	11.25	%	$	76,673	4.50	%	$	119,269	7.00	%	$	110,750	6.50	%	Common equity Tier 1 capital ratio (1)	$	251,358	10.24	%	$	110,460	4.50	%	$	171,827	7.00	%	$	159,553	6.50	%
Tier 1 leverage capital ratio ⁽²⁾	191,682		9.15	%	83,795		4.00	%	83,795		4.00	%	104,744		5.00	%	Tier 1 leverage capital ratio (2)	251,358		7.91	%	127,109		4.00	%	127,109		4.00	%	158,886		5.00	%
Tier 1 risk-based capital ratio ⁽³⁾	191,682		11.25	%	102,230		6.00	%	144,826		8.50	%	136,307		8.00	%	Tier 1 risk-based capital ratio (3)	251,358		10.24	%	147,280		6.00	%	208,647		8.50	%	196,373		8.00	%
Total risk-based capital ratio ⁽⁴⁾	210,241		12.34	%	136,299		8.00	%	178,892		10.50	%	170,374		10.00	%	Total risk-based capital ratio (4)	282,101		11.50	%	196,244		8.00	%	257,570		10.50	%	245,305		10.00	%
First Ipswich
PCSB Bank																	PCSB Bank
Common equity Tier 1 capital ratio ⁽¹⁾	$	32,681	11.41	%	$	12,889	4.50	%	$	20,050	7.00	%	$	18,618	6.50	%	Common equity Tier 1 capital ratio (1)	162,354		13.04	%	$	56,027	4.50	%	$	87,153	7.00	%	$	80,928	6.50	%
Tier 1 leverage capital ratio ⁽²⁾	32,681		8.43	%	15,507		4.00	%	15,507		4.00	%	19,384		5.00	%	Tier 1 leverage capital ratio (2)	162,354		8.87	%	$	73,215	4.00	%	$	73,215	4.00	%	$	91,519	5.00	%
Tier 1 risk-based capital ratio ⁽³⁾	32,681		11.41	%	17,185		6.00	%	24,346		8.50	%	22,914		8.00	%	Tier 1 risk-based capital ratio (3)	162,354		13.04	%	$	74,703	6.00	%	$	105,829	8.50	%	$	99,604	8.00	%
Total risk-based capital ratio ⁽⁴⁾	36,270		12.66	%	22,919		8.00	%	30,082		10.50	%	28,649		10.00	%	Total risk-based capital ratio (4)	177,662		14.27	%	$	99,600	8.00	%	$	130,725	10.50	%	$	124,500	10.00	%

(1) Common equity Tier 1 capital ratio is calculated by dividing common equity Tier 1 capital by risk-weighted assets. ~~The ratio was established as part of the implementation of Basel III, effective January 1, 2015.~~

(2) Tier 1 leverage capital ratio is calculated by dividing Tier 1 capital by average assets.

(3) Tier 1 risk-based capital ratio is calculated by dividing Tier 1 capital by risk-weighted assets.

(4) Total risk-based capital ratio is calculated by dividing total capital by risk-weighted assets.

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The following table presents actual and required capital amounts and capital ratios as of December 31, ~~2016~~2022 for the Company and the ~~Banks under the regulatory capital rules then in effect.~~Banks.


																		Actual				Minimum Required for Capital Adequacy Purposes				Minimum Required for Fully Phased in Capital Adequacy Purposes plus Capital Conservation Buffer				Minimum Required To Be Considered “Well-Capitalized” Under Prompt Corrective Action Provisions
	Actual				Minimum Required for Capital Adequacy Purposes				Minimum Required for Fully Phased in Capital Adequacy Purposes plus Capital Conservation Buffer				Minimum Required To Be Considered “Well-Capitalized” Under Prompt Corrective Action Provisions					Amount		Ratio		Amount		Ratio		Amount		Ratio		Amount		Ratio
	Amount		Ratio		Amount		Ratio		Amount		Ratio		Amount		Ratio			(Dollars in Thousands)
	(Dollars in Thousands)
At December 31, 2016:
At December 31, 2022:																	At December 31, 2022:
Brookline Bancorp, Inc.																	Brookline Bancorp, Inc.
Common equity Tier 1 capital ratio ⁽¹⁾	$	559,644	10.48	%	$	240,305	4.50	%	$	373,808	7.00	%	N/A		N/A		Common equity Tier 1 capital ratio (1)	$	893,978	12.05	%	$	333,851	4.50	%	$	519,323	7.00	%	N/A		N/A
Tier 1 leverage capital ratio ⁽²⁾	575,830		9.16	%	251,454		4.00	%	251,454		4.00	%	N/A		N/A		Tier 1 leverage capital ratio (2)	903,695		10.26	%	352,318		4.00	%	352,318		4.00	%	N/A		N/A
Tier 1 risk-based capital ratio ⁽³⁾	575,830		10.79	%	320,202		6.00	%	453,620		8.50	%	N/A		N/A		Tier 1 risk-based capital ratio (3)	903,695		12.18	%	445,170		6.00	%	630,657		8.50	%	N/A		N/A
Total risk-based capital ratio ⁽⁴⁾	704,675		13.20	%	427,076		8.00	%	560,537		10.50	%	N/A		N/A		Total risk-based capital ratio (4)	1,071,078		14.44	%	593,395		8.00	%	778,831		10.50	%	N/A		N/A
Brookline Bank																	Brookline Bank
Common equity Tier 1 capital ratio ⁽¹⁾	$	384,759	11.31	%	$	153,087	4.50	%	$	238,136	7.00	%	$	221,126	6.50	%	Common equity Tier 1 capital ratio (1)	$	570,530	11.24	%	$	228,415	4.50	%	$	355,312	7.00	%	$	329,933	6.50	%
Tier 1 leverage capital ratio ⁽²⁾	391,964		10.07	%	155,696		4.00	%	155,696		4.00	%	194,620		5.00	%	Tier 1 leverage capital ratio (2)	570,530		9.72	%	234,786		4.00	%	234,786		4.00	%	293,483		5.00	%
Tier 1 risk-based capital ratio ⁽³⁾	391,964		11.53	%	203,971		6.00	%	288,959		8.50	%	271,961		8.00	%	Tier 1 risk-based capital ratio (3)	570,530		11.24	%	304,553		6.00	%	431,451		8.50	%	406,071		8.00	%
Total risk-based capital ratio ⁽⁴⁾	428,966		12.61	%	272,143		8.00	%	357,188		10.50	%	340,179		10.00	%	Total risk-based capital ratio (4)	634,226		12.50	%	405,905		8.00	%	532,750		10.50	%	507,381		10.00	%
BankRI																	BankRI
Common equity Tier 1 capital ratio ⁽¹⁾	$	182,202	10.94	%	$	74,946	4.50	%	$	116,583	7.00	%	$	108,255	6.50	%	Common equity Tier 1 capital ratio (1)	$	244,422	10.32	%	$	106,579	4.50	%	$	165,790	7.00	%	$	153,948	6.50	%
Tier 1 leverage capital ratio ⁽²⁾	182,202		8.97	%	81,249		4.00	%	81,249		4.00	%	101,562		5.00	%	Tier 1 leverage capital ratio (2)	244,422		8.13	%	120,257		4.00	%	120,257		4.00	%	150,321		5.00	%
Tier 1 risk-based capital ratio ⁽³⁾	182,202		10.94	%	99,928		6.00	%	141,565		8.50	%	133,237		8.00	%	Tier 1 risk-based capital ratio (3)	244,422		10.32	%	142,106		6.00	%	201,317		8.50	%	189,474		8.00	%
Total risk-based capital ratio ⁽⁴⁾	197,702		11.87	%	133,245		8.00	%	174,884		10.50	%	166,556		10.00	%	Total risk-based capital ratio (4)	274,091		11.57	%	189,518		8.00	%	248,743		10.50	%	236,898		10.00	%
First Ipswich
Common equity Tier 1 capital ratio ⁽¹⁾	$	33,433	12.61	%	$	11,931	4.50	%	$	18,559	7.00	%	$	17,234	6.50	%
Tier 1 leverage capital ratio ⁽²⁾	33,433		9.23	%	14,489		4.00	%	14,489		4.00	%	18,111		5.00	%
Tier 1 risk-based capital ratio ⁽³⁾	33,433		12.61	%	15,908		6.00	%	22,536		8.50	%	21,210		8.00	%
Total risk-based capital ratio ⁽⁴⁾	36,053		13.60	%	21,208		8.00	%	27,835		10.50	%	26,510		10.00	%

(2) Tier 1 leverage capital ratio is calculated by dividing Tier 1 capital by average assets.

(3) Tier 1 risk-based capital ratio is calculated by dividing Tier 1 capital by risk-weighted assets.

(4) Total risk-based capital ratio is calculated by dividing total capital by risk-weighted assets.

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Item 3. Quantitative and Qualitative Disclosures about Market Risk

Market Risk

Market risk is the risk that the market value or estimated fair value of the Company's assets, liabilities, and derivative financial instruments will decline as a result of changes in interest rates or financial market volatility, or that the Company's net income will be significantly reduced by interest-rate changes.

Interest-Rate Risk

The principal market risk facing the Company is interest-rate risk, which can occur in a variety of forms, including repricing risk, yield-curve risk, basis risk, and prepayment risk. Repricing risk occurs when the change in the average yield of either interest-earning assets or interest-bearing liabilities is more sensitive than the other to changes in market interest rates. Such a change in sensitivity could reflect a number of possible mismatches in the repricing opportunities of the Company's assets and liabilities. Yield-curve risk reflects the possibility that changes in the shape of the yield curve could have different effects on the Company's assets and liabilities. Basis risk occurs when different parts of the balance sheet are subject to varying base rates reflecting the possibility that the spread from those base rates will deviate. Prepayment risk is associated with financial instruments with an option to prepay before the stated maturity, often a disadvantage to person selling the option; this risk is most often associated with the prepayment of loans, callable investments, and callable borrowings.

Asset/Liability Management

Market risk and interest-rate risk management is governed by the Company's Asset/Liability Committee ("ALCO"). The ALCO establishes exposure limits that define the Company's tolerance for interest-rate risk. The ALCO and the Company's Treasury Group measure and manage the composition of the balance sheet over a range of possible changes in interest rates while remaining responsive to market demand for loan and deposit products. The ALCO monitors current exposures versus limits and reports those results to the Board of Directors. The policy limits and guidelines serve as benchmarks for measuring interest-rate risk and for providing a framework for evaluation and interest-rate risk-management decision-making. The Company measures its interest-rate risk by using an asset/liability simulation model. The model considers several factors to determine the Company's potential exposure to interest-rate risk, including measurement of repricing gaps, duration, convexity, value-at-risk, market value of portfolio equity under assumed changes in the level of interest rates, the shape of yield curves, and general market volatility.

Management controls the Company's interest-rate exposure using several strategies, which include adjusting the maturities of securities in the Company's investment portfolio, limiting or expanding the terms of loans originated, limiting fixed-rate deposits with terms of more than five years, and adjusting maturities of ~~FHLBB~~FHLB advances. The Company limits this risk by restricting the types of MBSs it invests ~~in to~~into those with limited average life changes under certain interest-rate-shock scenarios, or securities with embedded prepayment penalties. The Company also places limits on holdings of fixed-rate mortgage loans with maturities greater than five years. The Company ~~may also use derivative instruments, principally interest-rate~~enters into interest rate swaps ~~to manage~~as part of its ~~interest-rate risk; however,~~interest rate risk management strategy. These interest rate swaps are designated as cash flow hedges and involve the receipt of variable rate amounts from a counterparty in exchange for the Company had no derivative fair value hedges or derivative cash flows hedges as of September 30, 2017 or December 31, 2016. See Note 8, “Derivatives and Hedging Activities,” to the unaudited consolidated financial statements.making fixed payments.

Measuring Interest-Rate Risk

As noted above, interest-rate risk can be measured by analyzing the extent to which the repricing of assets and liabilities are mismatched to create an interest-rate sensitivity gap. An asset or liability is said to be interest-rate sensitive within a specific period if it will mature or reprice within that period. The interest-rate sensitivity gap is defined as the difference between the amount of interest-earning assets maturing or repricing within a specific time period and the amount of interest-bearing liabilities maturing or repricing within that same time period. A gap is considered positive when the amount of interest-rate-sensitive assets exceeds the amount of interest-rate-sensitive liabilities. A gap is considered negative when the amount of interest-rate-sensitive liabilities exceeds the amount of interest-rate-sensitive assets. During a period of falling interest rates, therefore, a positive gap would tend to adversely affect net interest income. Conversely, during a period of rising interest rates, a positive gap position would tend to result in an increase in net interest income.

The Company's interest-rate risk position is measured using both income simulation and interest-rate sensitivity "gap" analysis. Income simulation is the primary tool for measuring the interest-rate risk inherent in the Company's balance sheet at a given point in time by showing the effect on net interest income, over a twelve-month period, of a variety of interest-rate shocks. These simulations take into account repricing, maturity, and prepayment characteristics of individual products. The ALCO reviews simulation results to determine whether exposure resulting from changes in market interest rates remains within

established tolerance levels over a twelve-month horizon, and develops appropriate strategies to manage this exposure. The Company's interest-rate risk analysis remains modestly asset-sensitive as of ~~September 30, 2017.~~March 31, 2023.

Table of Contents

The assumptions used in the Company’s interest-rate sensitivity simulation discussed above are inherently uncertain and, as a result, the simulations cannot precisely measure net interest income or precisely predict the impact of changes in interest rates.

As of ~~September 30, 2017,~~March 31, 2023, net interest income simulation indicated that the Company's exposure to changing interest rates was within tolerance. The ALCO reviews the methodology utilized for calculating interest-rate risk exposure and may periodically adopt modifications to this methodology. The following table presents the estimated impact of interest-rate changes on the Company's estimated net interest income over the twelve-month periods ~~indicated:~~indicated while maintaining a flat balance sheet:

Estimated Exposure to Net Interest Income
over Twelve-Month Horizon Beginning
September 30, 2017 December 31, 2016
Gradual Change in Interest Rate Levels
Dollar
Change

Percent
Change
Dollar
Change Percent
Change
(Dollars in Thousands)
Up 300 basis points $ 11,110
4.9 % $ 6,403
3.0 %
Up 200 basis points 7,740
3.4 % 4,420
2.1 %
Up 100 basis points 4,063
1.8 % 2,288
1.1 %
Down 100 basis points (10,141 ) -4.4 % (5,196 ) -2.5 %


	Estimated Exposure to Net Interest Income over Twelve-Month Horizon Beginning
	March 31, 2023				December 31, 2022
Change in Interest Rate Levels	Dollar Change		Percent Change		Dollar Change		Percent Change
	(Dollars in Thousands)
Up 300 basis points shock	$	35,342	10.1	%	$	22,790	7.4	%
Up 200 basis points ramp	12,307		3.5	%	8,747		2.8	%
Up 100 basis points ramp	6,448		1.8	%	4,477		1.5	%
Down 100 basis points ramp	(7,621)		(2.2)	%	(6,160)		(2.0)	%

The estimated impact of a 300 basis point increase in market interest rates on the Company's estimated net interest income over a twelve-month horizon was ~~a positive 4.9%~~10.1% as of ~~September 30, 2017,~~March 31, 2023, compared to ~~a positive 3.0%~~7.4% as of December 31, ~~2016, the increase in~~2022. The balance sheet became more asset ~~sensitivity was~~sensitive due to ~~a change in~~high levels of cash on the ~~funding mix, as core deposits and issued common stock funded~~ balance ~~sheet growth.~~

sheet.

The Company also uses interest-rate sensitivity “gap” analysis to provide a more general overview of its interest-rate risk profile. The interest-rate sensitivity gap is defined as the difference between interest-earning assets and interest-bearing

liabilities maturing or repricing within a given time period. At ~~September 30, 2017,~~March 31, 2023, the Company’s one-year cumulative gap was a ~~negative $55.6~~positive $264.0 million, or ~~0.9%~~2.29% of total interest-earning assets, compared with a ~~negative $275.3~~positive $9.3 million, or ~~4.56%~~0.11% of total interest-earning assets, at December 31, ~~2016.~~

2022.

The assumptions used in the Company's interest-rate sensitivity simulation discussed above are inherently uncertain and, as a result, the simulations cannot precisely measure net interest income or precisely predict the impact of changes in interest rates. For additional discussion on interest-rate risk see Item 7A, “Quantitative and Qualitative Disclosures about Market Risk” of the Company’s ~~2016~~2022 Annual Report on Form 10-K.

Economic Value of Equity ("EVE") at Risk Simulation is conducted in tandem with net interest income simulations to ascertain a longer term view of the Company’s interest-rate risk position by capturing longer-term repricing risk and options risk embedded in the balance sheet. It measures the sensitivity of the economic value of equity to changes in interest rates. The EVE at Risk Simulation values only the current balance sheet and does not incorporate growth assumptions. As with the net interest income simulation, this simulation captures product characteristics such as loan resets, repricing terms, maturity dates, and rate caps and floors. Key assumptions include loan prepayment speeds, deposit pricing elasticity, and non-maturity deposit attrition rates. These assumptions can have significant impacts on valuation results as the assumptions remain in effect for the entire life of each asset and liability. The Company conducts non-maturity deposit behavior studies on a periodic basis to support deposit assumptions used in the valuation process. All key assumptions are subject to a periodic review.

EVE at Risk is calculated by estimating the net present value of all future cash flows from existing assets and liabilities using current interest rates as well as parallel shocks to the current interest-rate environment. The following table sets forth the estimated percentage change in the Company’s EVE at Risk, assuming various shifts in interest rates. ~~Given the interest rate environment as of September 30, 2017, simulations for interest rate declines of more than 100 basis points were not deemed to be meaningful.~~


	Estimated Percent Change in Economic Value of Equity
Parallel Shock in Interest Rate Levels	At March 31, 2023		At December 31, 2022
Up 300 basis points	(0.80)	%	0.30	%
Up 200 basis points	(0.58)	%	0.51	%
Up 100 basis points	0.42	%	0.83	%
Down 100 basis points	(2.82)	%	(2.95)	%

Estimated Percent Change in Economic Value of Equity
Parallel Shock in Interest Rate Levels At September 30, 2017
At December 31, 2016
Up 300 basis points 2.5 % -4.6 %
Up 200 basis points 1.6 % -4.4 %
Up 100 basis points 1.5 % -1.6 %
Down 100 basis points -9.1 % -6.4 %

The Company's ~~EVE~~EVE-at-risk asset sensitivity ~~for Up shock scenarios moved~~decreased from ~~a negative outcome at~~ December 31, ~~2016~~2022 to ~~a positive outcome at September 30, 2017~~March 31, 2023 due to ~~the issuance of common stock which replaced short wholesale funding~~higher cash balances and higher short-term borrowings balances, as well as ~~the duration~~a more inverted yield curve.

Table of ~~assets shortened due to increased prepayments driven by lower, long term rates.~~Contents

Item 4. Controls and Procedures

Controls and Procedures

Under the supervision and with the participation of the Company’s ~~Management,~~management, including the Company’s Chief Executive Officer (Principal Executive Officer) and Chief Financial Officer (Principal Financial Officer), the Company has evaluated the effectiveness of its disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this report. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer considered that, as of the end of the period covered by this report, the Company’s disclosure controls and procedures were effective to ensure that information required to be disclosed in the reports that the Company files or submits under the Exchange Act is (i) recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms and (ii) accumulated and communicated to the Company’s ~~Management,~~management, including its Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

There has been no change in the Company’s internal control over financial reporting identified in connection with the quarterly evaluation that occurred during the Company’s last fiscal quarter that has materially and detrimentally affected, or is reasonably likely to materially and detrimentally affect, the Company’s internal controls over financial reporting.

The Company’s ~~Management~~management is responsible for establishing and maintaining adequate internal control over financial reporting as such term is defined in Exchange Act Rule 13a -15(f). The Company’s internal control system was designed to provide reasonable assurance to its ~~Management~~management and the Board of Directors regarding the preparation and fair presentation of published financial statements. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. The Company’s ~~Management~~management assessed the effectiveness of its internal control over financial reporting as of the end of the period covered by this report.

Management’s Report on Internal Control Over Financial Reporting as of December 31, ~~2016~~2022 and the related Report of Independent Registered Public Accounting Firm thereon appear on pages F-1 and F-2 of the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2016.~~2022.

Table of Contents

PART II — OTHER INFORMATION

Item 1. Legal Proceedings

There are no material pending legal proceedings other than those that arise in the normal course of business. In the opinion of Management, after consulting with legal counsel, the consolidated financial position and results of operations of the Company are not expected to be affected materially by the outcome of such proceedings.

Item 1A. Risk Factors

~~There have been no material changes to the risk factors disclosed in Item 1A~~This section supplements and updates certain of the ~~Company’s~~information found under Part I, Item 1A. “Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, ~~2016.~~2022 filed with the SEC on February 27, 2023 (“Annual Report”), based on information currently known to us and recent developments since the date of the Annual Report filing. The matters discussed below should be read in conjunction with the risks described in Part I. Item 1A. “Risk Factors” of our Annual Report. However, the risks and uncertainties that we face are not limited to those described below and those set forth in the Annual Report. Additional risks and uncertainties not presently known to us or that we currently believe to be immaterial may also adversely affect our business and the trading price of our common stock.

Adverse developments affecting the financial services industry, such as actual events or concerns involving liquidity, defaults, or non-performance by financial institutions or transactional counterparties, could adversely affect our financial condition and results of operations.

Actual events involving limited liquidity, defaults, non-performance or other adverse developments that affect financial institutions, transactional counterparties or other companies in the financial services industry or the financial services industry generally, or concerns or rumors about any events of these kinds or other similar risks, have in the past and may in the future lead to market-wide liquidity problems. For example, on May 1, 2023, First Republic Bank went into receivership and its deposits and substantially all of its assets were acquired by JPMorgan Chase Bank, National Association. Similarly, on March 10, 2023, Silicon Valley Bank went into receivership, and on March 12, Signature Bank went into receivership.

Inflation and rapid increases in interest rates have led to a decline in the trading value of previously issued government securities with interest rates below current market interest rates. Although the Treasury, FDIC and FRB have announced a program to provide up to $25 billion of loans to financial institutions secured by certain of such government securities held by financial institutions to mitigate the risk of potential losses on the sale of such instruments, widespread demands for customer withdrawals or other liquidity needs of financial institutions for immediately liquidity may exceed the capacity of such program. Additionally, there is no guarantee that the Treasury, FDIC and FRB will provide access to uninsured funds in the future in the event of the closure of other banks or financial institutions, or that they would do so in a timely fashion.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

a) Not applicable.

b) Not applicable.

c) ~~None.~~Not applicable.

Item 3. Defaults Upon Senior Securities

a) None.

b) None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None.

Table of Contents

Item 6. Exhibits

Exhibits



Exhibit ~~2.1~~10.1		Fourth Amendment to the Employment Agreement, ~~and Plan of Merger~~ dated ~~as of September 20, 2017~~April 28, 2023, by and among Brookline Bancorp, Inc., Brookline Bank and ~~First Commons Bank, N.A. (incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on September 21, 2017)~~Paul A. Perrault.

Exhibit ~~10.1~~31.1*		~~Form of Voting Agreement (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on September 21, 2017)~~

~~Exhibit 10.2~~	Consulting Agreement by and between Brookline Bank and Anthony G. Nuzzo dated September 20, 2017 (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on September 21, 2017)

Exhibit 31.1*	Certification of Chief Executive Officer

Exhibit 31.2*		Certification of Chief Financial Officer

Exhibit 32.1**		Section 1350 Certification of Chief Executive Officer

Exhibit 32.2**		Section 1350 Certification of Chief Financial Officer


101.INS		XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
101.SCH		XBRL Taxonomy Extension Schema Document
101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF		XBRL Taxonomy Extension Definition Linkbase Document
101.LAB		XBRL Taxonomy Extension Label Linkbase Document
101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document
104		Cover Page Interactive Data File (formatted in Inline XBRL and included in Exhibit ~~101~~	The following materials from Brookline Bancorp, Inc.’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2017, formatted in XBRL (eXtensible Business Reporting Language): (1) Unaudited Consolidated Balance Sheets as of September 30, 2017 and September 30, 2016; (2) Unaudited Consolidated Statements of Income for the three and nine months September 30, 2017 and September 30, 2016; (3) Unaudited Consolidated Statements of Comprehensive Income for the three and nine months September 30, 2017 and September 30, 2016; (4) Unaudited Consolidated Statements of Changes in Equity for the nine months ended September 30, 2017 and September 30, 2016; (5) Unaudited Consolidated Statements of Cash Flows for the nine months ended September 30, 2017 and September 30, 2016; and (6) Notes to Unaudited Consolidated Financial Statements at and for the nine months ended September 30, 2017 and September 30, 2016.101)

* Filed herewith

** Furnished herewith

Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



	BROOKLINE BANCORP, INC.


Date: ~~November 3, 2017~~May 10, 2023	By:	/s/ Paul A. Perrault
		Paul A. Perrault
		~~President and~~ Chief Executive Officer
		(Principal Executive Officer)

Date: ~~November 3, 2017~~May 10, 2023	By:	/s/ Carl M. Carlson
		Carl M. Carlson
		Co-President and Chief Financial Officer
		(Principal Financial Officer)

~~100~~



	Nine Months Ended September 30, 2017
	(In Thousands)
Sales of marketable and restricted equity securities	$	11,393

Gross gains from sales	11,612
Gross losses from sales	(219		)
Gain on sales of securities, net	$	11,393



	At September 30, 2017
	Originated			Acquired			Total
	Balance		Weighted Average Coupon	Balance		Weighted Average Coupon	Balance		Weighted Average Coupon
	(Dollars In Thousands)
Commercial real estate loans:
Commercial real estate	$	2,002,369	4.11%	$	117,071	4.33%	$	2,119,440	4.12%
Multi-family mortgage	718,495		4.05%	25,417		4.48%	743,912		4.06%
Construction	165,657		4.33%	—		—%	165,657		4.33%
Total commercial real estate loans	2,886,521		4.11%	142,488		4.36%	3,029,009		4.12%
Commercial loans and leases:
Commercial	679,984		4.24%	9,026		5.51%	689,010		4.26%
Equipment financing	837,702		7.24%	4,814		5.91%	842,516		7.23%
Condominium association	53,770		4.44%	—		—%	53,770		4.44%
Total commercial loans and leases	1,571,456		5.85%	13,840		5.65%	1,585,296		5.85%
Consumer loans:
Residential mortgage	593,922		3.76%	58,493		4.22%	652,415		3.80%
Home equity	311,718		4.05%	45,264		4.49%	356,982		4.11%
Other consumer	15,627		5.36%	111		18.00%	15,738		5.45%
Total consumer loans	921,267		3.89%	103,868		4.35%	1,025,135		3.94%
Total loans and leases	$	5,379,244	4.58%	$	260,196	4.42%	$	5,639,440	4.57%



	Three Months Ended September 30, 2017
	Commercial Real Estate			Commercial			Consumer			Total
	(In Thousands)
Balance at June 30, 2017	$	27,954		$	31,099		$	5,468		$	64,521
Charge-offs	(65		)	(1,965		)	(113		)	(2,143		)
Recoveries	—			109			80			189
Provision for loan and lease losses	979			1,832			35			2,846
Balance at September 30, 2017	$	28,868		$	31,075		$	5,470		$	65,413



	Three Months Ended September 30, 2016
	Commercial Real Estate			Commercial			Consumer			Total
	(In Thousands)
Balance at June 30, 2016	$	29,861		$	22,916		$	4,481		$	57,258
Charge-offs	(50		)	(545		)	(244		)	(839		)
Recoveries	—			170			149			319
(Credit) provision for loan and lease losses	(1,755		)	3,923			(14		)	2,154
Balance at September 30, 2016	$	28,056		$	26,464		$	4,372		$	58,892



	Nine Months Ended September 30, 2016
	Commercial Real Estate			Commercial			Consumer			Total
	(In Thousands)
Balance at December 31, 2015	$	30,151		$	22,018		$	4,570		$	56,739
Charge-offs	(1,534		)	(3,250		)	(1,254		)	(6,038		)
Recoveries	—			495			605			1,100
(Credit) provision for loan and lease losses	(561		)	7,201			451			7,091
Balance at September 30, 2016	$	28,056		$	26,464		$	4,372		$	58,892



	At September 30, 2017						At December 31, 2016
	Recorded Investment ₍₁₎		Unpaid Principal Balance		Related Allowance		Recorded Investment ₍₂₎		Unpaid Principal Balance		Related Allowance
	(In Thousands)
Originated:
With no related allowance recorded:
Commercial real estate	$	9,620	$	9,612	$	—	$	9,113	$	9,104	$	—
Commercial	24,749		24,737		—		39,269		39,210		—
Consumer	3,545		3,536		—		4,823		4,815		—
Total originated with no related allowance recorded	37,914		37,885		—		53,205		53,129		—
With an allowance recorded:
Commercial real estate	3,061		3,061		1		3,984		3,984		28
Commercial	17,993		17,946		7,488		605		605		97
Total originated with an allowance recorded	21,054		21,007		7,489		4,589		4,589		125
Total originated impaired loans and leases	58,968		58,892		7,489		57,794		57,718		125

Acquired:
With no related allowance recorded:
Commercial real estate	2,112		2,112		—		10,400		10,400		—
Commercial	2,042		2,042		—		3,948		3,948		—
Consumer	4,807		4,807		—		6,384		6,399		—
Total acquired with no related allowance recorded	8,961		8,961		—		20,732		20,747		—
With an allowance recorded:
Consumer	171		171		21		253		253		27
Total acquired with an allowance recorded	171		171		21		253		253		27
Total acquired impaired loans and leases	9,132		9,132		21		20,985		21,000		27

Total impaired loans and leases	$	68,100	$	68,024	$	7,510	$	78,779	$	78,718	$	152



	Nine Months Ended
	September 30, 2017				September 30, 2016
	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
	(In Thousands)
Originated:
With no related allowance recorded:
Commercial real estate	$	10,200	$	205	$	5,655	$	119
Commercial	24,206		522		16,602		412
Consumer	4,712		44		3,865		55
Total originated with no related allowance recorded	39,118		771		26,122		586
With an allowance recorded:
Commercial real estate	3,377		124		4,957		146
Commercial	20,771		1		13,017		5
Consumer	—		—		165		—
Total originated with an allowance recorded	24,148		125		18,139		151
Total originated impaired loans and leases	63,266		896		44,261		737

Acquired:
With no related allowance recorded:
Commercial real estate	5,009		54		8,341		126
Commercial	2,615		26		4,254		66
Consumer	5,551		52		7,795		51
Total acquired with no related allowance recorded	13,175		132		20,390		243
With an allowance recorded:
Commercial real estate	—		—		1,458		—
Commercial	—		—		486		—
Consumer	169		3		490		6
Total acquired with an allowance recorded	169		3		2,434		6
Total acquired impaired loans and leases	13,344		135		22,824		249

Total impaired loans and leases	$	76,610	$	1,031	$	67,085	$	986



	At and for the Three Months Ended September 30, 2017
		Recorded Investment				Specific Allowance for Loan and Lease Losses						Defaulted ⁽¹⁾
	Number of Loans/ Leases	At Modification		At End of Period		Specific Allowance for Loan and Lease Losses		Nonaccrual Loans and Leases		Additional Commitment		Number of Loans/ Leases	Recorded Investment
	(Dollars in Thousands)
Originated:
Commercial	1	$	350	$	350	$	152	$	350	$	—	—	$	—
Equipment financing	5	817		804		—		804		—		—	—
Total originated	6	$	1,167	$	1,154	$	152	$	1,154	$	—	—	$	—



Remainder of 2017	$	519
Year ending:
2018	1,669
2019	1,295
2020	944
2021	601
2022	299
Thereafter	147
Total	$	5,474



					Fair Value Measurements
	Carrying Value		Estimated Fair Value		Level 1 Inputs		Level 2 Inputs		Level 3 Inputs
	(In Thousands)
At September 30, 2017
Financial assets:
Investment securities held-to-maturity:
GSE debentures	$	38,622	$	38,072	$	—	$	38,072	$	—
GSE MBSs	14,788		14,643		—		14,643		—
Municipal obligations	53,828		54,013		—		54,013		—
Foreign government obligations	500		492		—		—		492
Loans held-for-sale	2,973		2,973		—		2,973		—
Loans and leases, net	5,574,027		5,480,446		—		—		5,480,446
Restricted equity securities	62,135		62,135		—		—		62,135
Loan level derivatives	9,975		9,975		—		9,975		—
Risk participation-out agreements	49		49		—		49		—
Foreign exchange contracts	22		22		—		22		—
Financial liabilities:
Certificates of deposit	1,167,329		1,164,618		—		1,164,618		—
Borrowed funds	985,895		967,643		—		967,643		—
Loan level derivatives	9,975		9,975		—		9,975		—
Risk participation-in agreements	14		14		—		14		—
Foreign exchange contracts	14		14		—		14		—



	At and for the Three Months Ended September 30,						At and for the Nine Months Ended September 30,
	2017			2016			2017			2016

Net income, as reported	$	15,366		$	13,617		$	43,691		$	39,083
Adjustments to arrive at operating earnings:
Merger and acquisition-related expenses	205			—			205			—
Tax effect	(70		)	—			(72		)	—
Total adjustments, net of tax	135			—			133			—
Operating earnings	$	15,501		$	13,617		$	43,824		$	39,083

Basic earnings per share, as reported	$	0.20		$	0.19		$	0.59		$	0.56
Adjustments to arrive at basic operating earnings per share:
Merger and acquisition-related expenses	—			—			—			—
Total adjustments per share	—			—			—			—
Basic operating earnings per share	$	0.20		$	0.19		$	0.59		$	0.56

Average total assets	$	6,681,042		$	6,360,097		$	6,567,101		$	6,230,612
Operating return on average assets (annualized)	0.93		%	0.86		%	0.89		%	0.84		%

Average total stockholders’ equity	$	804,666		$	695,205		$	760,447		$	686,134
Operating return on average stockholders’ equity (annualized)	7.71		%	7.83		%	7.68		%	7.59		%



	Three Months Ended September 30, 2017 as Compared to the Three Months Ended September 30, 2016									Nine Months Ended September 30, 2017 as Compared to the Nine Months Ended September 30, 2016
	Increase (Decrease) Due To									Increase (Decrease) Due To
	Volume			Rate			Net Change			Volume			Rate			Net Change
	(In Thousands)
Interest and dividend income:
Investments:
Debt securities	$	193		$	161		$	354		$	389		$	174		$	563
Marketable and restricted equity securities	(9		)	(38		)	(47		)	44			15			59
Short-term investments	28			105			133			(11		)	204			193
Total investments	212			228			440			422			393			815
Loans and leases:
Commercial real estate loans	1,607			222			1,829			6,120			—			6,120
Commercial loans and leases	446			383			829			1,106			1,201			2,307
Equipment financing	1,424			370			1,794			4,312			905			5,217
Residential mortgage loans	262			268			530			473			333			806
Other consumer loans	149			56			205			414			384			798
Total loans	3,888			1,299			5,187			12,425			2,823			15,248
Total change in interest and dividend income	4,100			1,527			5,627			12,847			3,216			16,063
Interest expense:
Deposits:
NOW accounts	3			—			3			8			—			8
Savings accounts	19			(31		)	(12		)	79			(161		)	(82		)
Money market accounts	101			261			362			358			502			860
Certificate of deposit	69			450			519			(143		)	1,089			946
Total deposits	192			680			872			302			1,430			1,732
Borrowed funds:
Advances from the FHLBB	(25		)	275			250			206			309			515
Subordinated debentures and notes	3			12			15			8			24			32
Other borrowed funds	(4		)	19			15			16			39			55
Total borrowed funds	(26		)	306			280			230			372			602
Total change in interest expense	166			986			1,152			532			1,802			2,334
Change in tax-exempt income	(18		)	—			(18		)	15			—			15
Change in net interest income	$	3,952		$	541		$	4,493		$	12,300		$	1,414		$	13,714