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BRKL Brookline Bancorp

Filed: 5 May 21, 12:21pm

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

FORM 10-Q

(Mark One) 
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2021

OR
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.
(Exact name of registrant as specified in its charter)
Delaware04-3402944
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer Identification No.)
131 Clarendon StreetBostonMA02116
(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 classTrading Symbol(s)Name of each exchange on which registered
Common StockBRKLNasdaq 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    No  
 
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files).  Yes    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 filerAccelerated filer
Non-accelerated filer
(Do not check if a smaller reporting company)
Smaller Reporting Company
Emerging growth company
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.



Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes     No     
                                                                                                                                              
At April 30, 2021, the number of shares of common stock, par value $0.01 per share, outstanding was 78,192,589.



BROOKLINE BANCORP, INC. AND SUBSIDIARIES
FORM 10-Q
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, 2021At December 31, 2020
(In Thousands Except Share Data)
ASSETS
Cash and due from banks$41,284 $36,069 
Short-term investments89,643 398,848 
Total cash and cash equivalents130,927 434,917 
Investment securities available-for-sale729,901 745,822 
Equity securities held-for-trading518 526 
Total investment securities730,419 746,348 
Loans and leases:
Commercial real estate loans3,790,341 3,823,826 
Commercial loans and leases2,324,202 2,274,899 
Consumer loans1,153,009 1,170,828 
Total loans and leases7,267,552 7,269,553 
Allowance for loan and lease losses(109,837)(114,379)
Net loans and leases7,157,715 7,155,174 
Restricted equity securities40,400 49,786 
Premises and equipment, net of accumulated depreciation of $83,290 and $82,233, respectively72,524 71,568 
Right-of-use asset operating leases23,180 24,143 
Deferred tax asset42,857 40,129 
Goodwill160,427 160,427 
Identified intangible assets, net of accumulated amortization of $38,984 and $38,752, respectively2,920 3,152 
Other real estate owned ("OREO") and repossessed assets, net6,383 6,515 
Other assets192,058 250,265 
Total assets$8,559,810 $8,942,424 
LIABILITIES AND STOCKHOLDERS' EQUITY  
Deposits:  
Demand checking accounts$1,724,170 $1,592,205 
 Interest-bearing deposits5,142,616 5,318,491 
Total deposits6,866,786 6,910,696 
Borrowed funds:  
Advances from the Federal Home Loan Bank of Boston ("FHLBB")378,646 648,849 
Subordinated debentures and notes83,783 83,746 
Other borrowed funds83,574 87,652 
Total borrowed funds546,003 820,247 
Operating lease liabilities23,180 24,143 
Mortgagors' escrow accounts6,483 5,901 
Reserve for unfunded credits13,705 13,071 
Accrued expenses and other liabilities158,254 226,588 
Total liabilities7,614,411 8,000,646 
Commitments and contingencies (Note 12)00
Stockholders' Equity:  
Common stock, $0.01 par value; 200,000,000 shares authorized; 85,177,172 shares issued and 85,177,172 shares issued, respectively852 852 
Additional paid-in capital737,882 737,178 
Retained earnings, partially restricted282,301 264,892 
Accumulated other comprehensive income2,082 16,490 
Treasury stock, at cost; 6,534,602 shares and 6,525,783 shares, respectively(77,463)(77,343)
Unallocated common stock held by Employee Stock Ownership Plan ("ESOP"); 44,502 shares and 51,114 shares, respectively(255)(291)
Total stockholders' equity945,399 941,778 
Total liabilities and stockholders' equity$8,559,810 $8,942,424 
See accompanying notes to unaudited consolidated financial statements.
1

BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Unaudited Consolidated Statements of Income
Three Months Ended March 31,
20212020
(In Thousands Except Share Data)
Interest and dividend income:
Loans and leases$75,009 $79,559 
Debt securities3,118 2,976 
Marketable and restricted equity securities301 778 
Short-term investments39 209 
Total interest and dividend income78,467 83,522 
Interest expense:
Deposits6,707 16,240 
Borrowed funds2,651 5,570 
Total interest expense9,358 21,810 
Net interest income69,109 61,712 
(Credit) provision for credit losses(2,147)54,114 
Net interest income after provision for credit losses71,256 7,598 
Non-interest income:
Deposit fees2,281 2,458 
Loan fees599 550 
Loan level derivative income, net474 2,156 
(Loss) gain on investment securities, net(7)1,330 
Gain on sales of loans and leases held-for-sale709 120 
Other738 2,714 
Total non-interest income4,794 9,328 
Non-interest expense:
Compensation and employee benefits25,821 25,219 
Occupancy4,004 3,953 
Equipment and data processing4,493 4,703 
Professional services1,226 1,651 
FDIC insurance1,044 378 
Advertising and marketing1,100 1,075 
Amortization of identified intangible assets232 336 
Other2,891 3,433 
Total non-interest expense40,811 40,748 
Income (loss) before provision for income taxes35,239 (23,822)
Provision (benefit) for income taxes8,785 (6,546)
Net income (loss)$26,454 $(17,276)
Earnings per common share:
Basic$0.34 $(0.22)
Diluted0.34 (0.22)
Weighted average common shares outstanding during the year:
Basic78,143,752 79,481,462 
Diluted78,404,063 79,665,774 
Dividends paid per common share$0.115 $0.115 

See accompanying notes to unaudited consolidated financial statements.
2

BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Unaudited Consolidated Statements of Comprehensive Income (Loss)
Three Months Ended March 31,
20212020
(In Thousands)
Net income (loss)$26,454 $(17,276)
Investment securities available-for-sale:
Unrealized securities holding gains (losses)(18,481)18,810 
Income tax (expense) benefit4,073 (4,146)
Net unrealized securities holding gains (losses) before reclassification adjustments, net of taxes(14,408)14,664 
Cash flow hedges:
Change in fair value of cash flow hedges
Reclassification adjustment for (income) expense recognized in earnings(2)
Net change in fair value of cash flow hedges
Other comprehensive income (loss), net of taxes(14,408)14,664 
Comprehensive income (loss)$12,046 $(2,612)


See accompanying notes to unaudited consolidated financial statements.
3

BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Unaudited Consolidated Statements of Changes in Stockholders' Equity
Three Months Ended March 31, 2021 and 2020


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, 2020$852 $737,178 $264,892 $16,490 $(77,343)$(291)$941,778 
Net income— — 26,454 — — — 26,454 
Other comprehensive income (loss)— — — (14,408)— — (14,408)
Common stock dividends of $0.115 per share— — (8,992)— — — (8,992)
Restricted stock awards issued, net of awards surrendered— 120 — — (120)— 
Compensation under recognition and retention plans— 537 (53)— — — 484 
Common stock held by ESOP committed to be released (6,612 shares)— 47 — — — 36 83 
Balance at March 31, 2021$852 $737,882 $282,301 $2,082 $(77,463)$(255)$945,399 
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, 2019$852 $736,601 $265,376 $2,283 $(59,073)$(433)$945,606 
Net loss— — (17,276)— — — (17,276)
Other comprehensive income (loss)— — — 14,664 — — 14,664 
Common stock dividends of $0.115 per share— — (9,173)— — — (9,173)
Compensation under recognition and retention plans— 758 (45)— (134)— 579 
Treasury stock, repurchase shares— — — — (10,410)— (10,410)
Common stock held by ESOP committed to be released (7,107 shares)— 63 — — — 38 101 
Adoption of ASU 2016-13 (CECL)— — (11,523)— — — (11,523)
Balance at March 31, 2020$852 $737,422 $227,359 $16,947 $(69,617)$(395)$912,568 



See accompanying notes to unaudited consolidated financial statements.
4


BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Unaudited Consolidated Statements of Cash Flows
Three Months Ended March 31,
20212020
(In Thousands)
Cash flows from operating activities:
Net income (loss)$26,454 $(17,276)
Adjustments to reconcile net income to net cash provided from operating activities:
(Credit) provision for credit losses(2,147)54,114 
Deferred income tax expense (benefit)1,345 (17,270)
Depreciation of premises and equipment1,318 1,581 
Amortization of investment securities premiums and discounts, net770 384 
Amortization of deferred loan and lease origination costs, net1,584 2,154 
Amortization of identified intangible assets232 336 
Amortization of debt issuance costs25 26 
Accretion of acquisition fair value adjustments, net(51)(372)
Loss (gain) on investment securities, net(1,330)
Gain on sales of loans and leases held-for-sale(709)(120)
Write-down of OREO and other repossessed assets129 354 
Compensation under recognition and retention plans536 624 
ESOP shares committed to be released83 101 
Net change in:
Cash surrender value of bank-owned life insurance(251)(254)
Other assets58,480 (103,913)
Accrued expenses and other liabilities(68,387)173,346 
Net cash provided from operating activities19,418 92,485 
Cash flows from investing activities:
Proceeds from sales of investment securities available-for-sale86,434 
Proceeds from maturities, calls, and principal repayments of investment securities available-for-sale46,184 25,530 
Purchases of investment securities available-for-sale(49,514)(273,252)
Proceeds from maturities, calls, and principal repayments of investment securities held to maturity6,302 
Proceeds from redemption/sales of restricted equity securities9,386 2,944 
Purchase of restricted equity securities(17,598)
Proceeds from sales of loans and leases held-for-investment, net50 5,800 
Net increase in loans and leases(995)(96,414)
Purchase of premises and equipment, net(2,347)(1,071)
Proceeds from sales of OREO and other repossessed assets385 1,972 
Net cash provided from (used for) investing activities3,149 (259,353)
(Continued)
See accompanying notes to unaudited consolidated financial statements.
5

Three Months Ended March 31,
20212020
(In Thousands)
Cash flows from financing activities:
Increase in demand checking, NOW, savings and money market accounts296,341 57,871 
(Decrease) increase in certificates of deposit(340,207)2,333 
Proceeds from FHLBB advances63,300 1,736,600 
Repayment of FHLBB advances(333,503)(1,357,638)
(Decrease) increase in other borrowed funds, net(4,078)10,054 
Increase in mortgagors' escrow accounts, net582 209 
Repurchases of common stock(10,410)
Payment of dividends on common stock(8,992)(9,173)
Net cash (used for) provided from financing activities(326,557)429,846 
Net (decrease) increase in cash and cash equivalents(303,990)262,978 
Cash and cash equivalents at beginning of period434,917 77,790 
Cash and cash equivalents at end of period$130,927 $340,768 
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest on deposits, borrowed funds and subordinated debt$11,007 $23,227 
Income taxes2,212 2,070 
Non-cash investing activities:
Transfer from loans to other real estate owned$382 $1,733 


See accompanying notes to unaudited consolidated financial statements.
6

BROOKLINE BANCORP, INC. AND SUBSIDIARIES

Notes to Unaudited Consolidated Financial Statements
(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 trust company and Bank Rhode Island ("BankRI"), a Rhode Island-chartered financial institution (collectively referred to as the "Banks"). The Banks are both members of the Federal Reserve System. The Company is also the parent of Brookline Securities Corp. ("BSC"). 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 Longwood Securities Corp. ("LSC"), Eastern Funding LLC ("Eastern Funding") and First Ipswich Insurance Agency, operates 30 full-service banking offices in the greater Boston metropolitan area with 2 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.
The Banks' activities include acceptance of commercial, municipal and retail deposits, origination of mortgage loans on commercial and residential real estate located principally in New England, 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 Eastern Funding, which is based in New York City, New York, and Macrolease, which is based in Plainview, New York, respectively.
The Company and the Banks are supervised, examined and regulated by the Board of Governors of the Federal Reserve System (the "FRB"). As a Massachusetts-chartered trust company, Brookline Bank is also subject to regulation under the laws of the Commonwealth of Massachusetts and the jurisdiction of the Massachusetts Division of Banks (the "DOB"). 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.
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 subject to supervision, examination and regulation by the FDIC. As previously disclosed, on July 31, 2019, Brookline Bank converted its charter from a Massachusetts savings bank to a Massachusetts-chartered trust company and ended its membership in the Depositors Insurance Fund (the “DIF”), a private industry-sponsored fund which insures Massachusetts-chartered savings bank deposit balances in excess of federal deposit insurance coverage. Brookline Bank’s growth in deposit size necessitated it's withdrawal from the DIF and the concurrent charter conversion of Brookline Bank. Brookline Bank’s deposit accounts are and 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 coverage will continue to be insured by the DIF until they reach maturity.
Basis of Financial Statement Presentation
The unaudited consolidated financial statements of the Company presented herein have been prepared pursuant to the rules of the 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, 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, 2020. 
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.
In preparing these consolidated financial statements, 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 changes in the near-term include the
7

BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements (Continued)
determination of the allowance for credit losses, the determination of fair market values of assets and liabilities, the review of goodwill and intangible assets for impairment and the review of deferred tax assets for valuation allowances.
The judgments used by 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.

(2) Recent Accounting Pronouncements
Accounting Standards Adopted in 2021 and 2020
In June 2016, the FASB issued ASU 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (“ASU 2016-13”). ASU 2016-13 replaced the previous GAAP method of calculating credit losses. Previously, GAAP required the use of the incurred loss methodology, which used a higher threshold at which probable losses were calculated and recorded. ASU 2016-13 requires the use of an expected loss methodology, referred to as the current expected credit loss (“CECL”) methodology, which requires institutions to account for lifetime expected losses that previously would not have been part of the calculation. The CECL methodology incorporates future forecasting in addition to historical and current measures. The Company adopted all of the above mentioned ASU as of January 1, 2020. The standard had an impact on our consolidated balance sheet. On adoption, the Company recognized an increase in the allowance for loan and lease losses of $6.6 million, and an increase in the reserve for unfunded commitments of $8.9 million. The net, after-tax impact of the increase in the allowance for loan and lease losses and reserve for unfunded commitments was a decrease to retained earnings of $11.5 million shown in the Consolidated Statements of Changes in Stockholders’ Equity. Additional details can be found in Notes 3, 4 and 5.

8

BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements (Continued)
(3) Investment Securities
Adoption of Topic 326
Effective January 1, 2020, the Company adopted the provisions of ASU 2016-13 using the modified retrospective method. There was a de minimis allowance for credit loss ("ACL") on available-for-sale debt securities recognized upon adoption and as of December 31, 2020.
The following tables set forth investment securities available-for-sale, held-to-maturity and equity securities held-for-trading at the dates indicated:
 At March 31, 2021
 Amortized
Cost
Gross
Unrealized
Gains
Gross
Unrealized
Losses
Estimated
Fair Value
 (In Thousands)
Investment securities available-for-sale:
GSE debentures$273,315 $4,130 $5,919 $271,526 
GSE CMOs39,980 957 12 40,925 
GSE MBSs271,231 5,981 1,146 276,066 
Corporate debt obligations22,269 978 23,247 
U.S. Treasury bonds119,817 1,586 3,762 117,641 
Foreign government obligations500 496 
Total investment securities available-for-sale$727,112 $13,632 $10,843 $729,901 
Equity securities held-for-trading$518 
 December 31, 2020
 Amortized
Cost
Gross
Unrealized
Gains
Gross
Unrealized
Losses
Estimated
Fair Value
 (In Thousands)
Investment securities available-for-sale:
GSE debentures$273,820 $5,455 $630 $278,645 
GSE CMOs44,937 1,103 12 46,028 
GSE MBSs312,658 10,956 323,609 
Corporate debt obligations22,299 1,168 23,467 
U.S. Treasury bonds70,339 3,318 80 73,577 
Foreign government obligations500 496 
Total investment securities available-for-sale$724,553 $22,000 $731 $745,822 
Equity securities held-for-trading$526 
As of March 31, 2021, the fair value of all investment securities available-for-sale was $729.9 million, with net unrealized gains of $2.8 million, compared to a fair value of $745.8 million and net unrealized gains of $21.3 million as of December 31, 2020. As of March 31, 2021, $261.6 million, or 35.8% of the portfolio, had gross unrealized losses of $10.8 million, compared to $86.9 million, or 11.7% of the portfolio, with gross unrealized losses of $0.7 million as of December 31, 2020.
Effective March 31, 2020, all investment securities classified as held-to-maturity were reclassified as available for sale to prudently reflect the ability and intent to not hold these assets to maturity due to the economic uncertainty created by the COVID-19 pandemic.
As of March 31, 2021 and December 31, 2020, the Company recorded a fair value of $0.5 million of equity securities held-for-trading.
9

BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements (Continued)
Investment Securities as Collateral
As of March 31, 2021 and December 31, 2020, respectively, $413.5 million and $448.7 million of investment securities were pledged as collateral for repurchase agreements; municipal deposits; treasury, tax and loan deposits; swap agreements; FRB borrowings; and Federal Home Loan Bank of Boston ("FHLBB") borrowings. The Banks had 0 outstanding FRB borrowings as of March 31, 2021 and December 31, 2020.
Allowance 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 an 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 $2.5 million and $2.6 million, respectively, as of March 31, 2021 and December 31, 2020.
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 three months ended March 31, 2021 and 2020.
Assessment for Available for Sale Securities for Impairment
Investment securities as of March 31, 2021 and December 31, 2020 that have been in a continuous unrealized loss position for less than twelve months or twelve months or longer are as follows:
 At March 31, 2021
 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$118,064 $5,919 $$$118,064 $5,919 
GSE CMOs513 10 707 1,220 12 
GSE MBSs70,289 1,145 95 70,384 1,146 
U.S. Treasury bonds71,450 3,762 71,450 3,762 
Foreign government obligations496 496 
Temporarily impaired investment securities available-for-sale260,316 10,836 1,298 261,614 10,843 
Total temporarily impaired investment securities$260,316 $10,836 $1,298 $$261,614 $10,843 
10

BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements (Continued)
 At December 31, 2020
 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$72,745 $630 $$$72,745 $630 
GSE CMOs832 872 1,704 12 
GSE MBSs2,102 97 2,199 
U.S. Treasury bonds9,750 80 9,750 80 
Foreign government obligations496 496 
Temporarily impaired investment securities available-for-sale85,429 722 1,465 86,894 731 
Total temporarily impaired investment securities$85,429 $722 $1,465 $$86,894 $731 
The Company performs regular analyses of the investment securities available-for-sale portfolio to determine whether a decline in fair value indicates that an investment security is impaired. In making these impairment determinations, management considers, among other factors, 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 security investment is 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 consolidated statement of income and the noncredit portion is recognized in accumulated other comprehensive income. The credit portion of the 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 security is 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 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 impaired as of March 31, 2021.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 impaired as of March 31, 2021. If market conditions for investment securities worsen or the creditworthiness of the underlying issuers deteriorates, it is possible that the Company may recognize additional 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 FHLBB and the Federal Farm Credit Bank. As of March 31, 2021, the Company held GNMA MBSs and CMOs, and Small Business Administration ("SBA") commercial loan asset-backed securities in its available-for-sale portfolio with an estimated fair value of $6.3 million, all of which were backed explicitly by the full faith and credit of the U.S. Government, compared to $7.3 million as of December 31, 2020.
As of March 31, 2021, the Company owned 54 GSE debentures with a total fair value of $271.5 million, and a net unrealized loss of $1.8 million. As of December 31, 2020, the Company held 54 GSE debentures with a total fair value of
11

BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements (Continued)
$278.6 million, with a net unrealized gain of $4.8 million. As of March 31, 2021, 12 of the 54 securities in this portfolio were in an unrealized loss position. As of December 31, 2020, 7 of the 54 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 three months ended March 31, 2021, the Company did not purchase GSE debentures. This compares to the same period in 2020 when the Company purchased $75.2 million GSE debentures. During the three months ended March 31, 2020, the Company transferred 9 held-to-maturity GSE debentures with a total fair value of $25.5 million to the available-for-sale portfolio.
As of March 31, 2021, the Company owned 33 GSE CMOs with a total fair value of $40.9 million and a net unrealized gain of $0.9 million. As of December 31, 2020, the Company held 33 GSE CMOs with a total fair value of $46.0 million with a net unrealized gain of $1.1 million. As of March 31, 2021, 2 of the 33 securities in this portfolio were in an unrealized loss position. As of December 31, 2020, 2 of the 33 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 three months ended March 31, 2021 and 2020, the Company did 0t purchase any GSE CMOs.
As of March 31, 2021, the Company owned 139 GSE MBSs with a total fair value of $276.1 million and a net unrealized gain of $4.8 million. As of December 31, 2020, the Company held 140 GSE MBSs with a total fair value of $323.6 million with a net unrealized gain of $11.0 million. As of March 31, 2021, 23 of the 139 securities in this portfolio were in an unrealized loss position. As of December 31, 2020, 17 of the 140 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 three months ended March 31, 2021, the Company did not purchase any GSE MBSs. This compares to the same period in 2020 when the Company purchased $176.9 million GSE MBSs. During the three months ended March 31, 2020, the Company transferred 8 held-to-maturity GSE MBSs with a total fair value of $9.0 million to the available-for-sale portfolio.
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 March 31, 2021, the Company held 6 corporate obligation securities with a total fair value of $23.2 million and a net unrealized gain of $1.0 million. As of December 31, 2020, the Company held 6 corporate obligation securities with a total fair value of $23.5 million and a net unrealized gain of $1.2 million. As of March 31, 2021 and December 31, 2020, NaN of the 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. During the three months ended March 31, 2021 and 2020, the Company did 0t purchase any corporate obligations. During the three months ended March 31, 2020, the Company transferred 1 held-to-maturity corporate obligation security with a total fair value of $0.5 million to the available-for-sale portfolio.
U.S. Treasury Bonds
The Company invests in securities issued by the U.S. government. As of March 31, 2021, the Company owned 17 U.S. Treasury bonds with a total fair value of $117.6 million and an unrealized loss of $2.2 million. This compares to 12 U.S. Treasury bonds with a total fair value of $73.6 million and an unrealized gain of $3.2 million as of December 31, 2020. As of March 31, 2021, 8 of the 17 securities in this portfolio were in an unrealized loss position. As of December 31, 2020, 1 of the 12 securities in this portfolio was an unrealized loss position. During the three months ended March 31, 2021 the Company purchased $49.5 million U.S. Treasury bonds, compared to the same period in 2020 when the Company purchased $21.2 million U.S. Treasury bonds.
Municipal Obligations
As of March 31, 2021 and December 31, 2020, the Company did 0t own any municipal obligation securities. During the three months March 31, 2021 and 2020, the Company did 0t purchase any municipal obligations. During the three months ended March 31, 2020, the Company transferred 93 held-to-maturity municipal obligations securities with a total fair value of $47.7 million to our available-for-sale portfolio.
Foreign Government Obligations
As of March 31, 2021 and December 31, 2020, the Company owned 1 foreign government obligation security with a fair value of $0.5 million, which approximated cost. As of March 31, 2021 and December 31, 2020 respectively, the security was
12

BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements (Continued)
in an unrealized loss position. During the three months ended March 31, 2021 and 2020, the Company did 0t purchase any foreign government obligations.
Equity Securities Held-for-Trading
From time to time, the Company will invest in equity securities held-for-trading. As of March 31, 2021 and December 31, 2020, the Company owned equity securities held-for-trading with a fair value of $0.5 million.
Portfolio Maturities
The final stated maturities of the debt securities are as follows for the periods indicated:
 At March 31, 2021At December 31, 2020
 Amortized
Cost
Estimated
Fair Value
Weighted
Average
Rate
Amortized
Cost
Estimated
Fair Value
Weighted
Average
Rate
 (Dollars in Thousands)
Investment securities available-for-sale:      
Within 1 year$49,597 $50,149 1.99 %$31,633 $32,013 2.02 %
After 1 year through 5 years132,676 138,463 2.23 %146,274 153,262 2.22 %
After 5 years through 10 years261,816 254,174 1.38 %222,271 225,568 1.43 %
Over 10 years283,023 287,115 2.01 %324,375 334,979 1.86 %
$727,112 $729,901 1.84 %$724,553 $745,822 1.81 %
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 March 31, 2021, issuers of debt securities with an estimated fair value of $88.3 million had the right to call or prepay the obligations. Of the $88.3 million, approximately $12.7 million matures in 1 - 5 years, $66.2 million matures in 6 - 10 years, and $9.4 million matures after ten years. As of December 31, 2020, issuers of debt securities with an estimated fair value of approximately $90.8 million had the right to call or prepay the obligations. Of the $90.8 million, $12.9 million matures in 1-5 years, and $68.1 million matures in 6 - 10 years, and $9.8 million matures after ten years.
Security Sales
NaN sale of investment securities available-for-sale or equity securities held-for-trading occurred during the three months ended March 31, 2021. This compares to $86.4 million securities sold during the three months ended March 31, 2020.
Sales of investment and restricted equity securities are summarized as follows:
 Three Months Ended March 31, 2021Three Months Ended March 31, 2020
 (In Thousands)
Proceeds from sales of investment securities available-for-sale and equity securities held-for-trading$$86,435 
Gross gains from securities sales2,446 
Gross losses from securities sales(93)
Gain on sales of securities, net$$2,353 
13

BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements (Continued)
(4) Loans and Leases
The following table presents the amortized cost of loans and leases and weighted average coupon rates for the loan and lease portfolios at the dates indicated:
 At March 31, 2021At December 31, 2020
 BalanceWeighted
Average
Coupon
BalanceWeighted
Average
Coupon
 (Dollars In Thousands)
Commercial real estate loans:    
Commercial real estate$2,595,240 3.48 %$2,578,773 3.58 %
Multi-family mortgage1,000,474 3.48 %1,013,432 3.53 %
Construction194,627 3.60 %231,621 3.49 %
Total commercial real estate loans3,790,341 3.49 %3,823,826 3.56 %
Commercial loans and leases:    
Commercial1
1,206,977 2.35 %1,131,668 2.55 %
Equipment financing1,069,621 7.17 %1,092,461 7.26 %
Condominium association47,604 4.54 %50,770 4.55 %
Total commercial loans and leases2,324,202 4.61 %2,274,899 4.86 %
Consumer loans:    
Residential mortgage781,854 3.68 %791,317 3.74 %
Home equity334,706 3.25 %346,652 3.26 %
Other consumer36,449 2.92 %32,859 3.04 %
Total consumer loans1,153,009 3.53 %1,170,828 3.58 %
Total loans and leases$7,267,552 3.84 %$7,269,553 3.97 %
______________________________________________________________________
(1) Including $604,790 of PPP loans as of March 31, 2021. 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, 2021.

Accrued interest on loans and leases, which were excluded from the amortized cost of loans and leases totaled $21.0 million and $20.5 million at March 31, 2021 and December 31, 2020, respectively, and were included in other assets in the accompanying consolidated balance sheets.
 
The net unamortized deferred loan origination costs included in total loans and leases were $5.6 million and $4.1 million as of March 31, 2021 and December 31, 2020, respectively.
The Banks and their subsidiaries lend primarily in all New England states, with the exception of equipment financing, 12.7% of which is in the greater New York and New Jersey metropolitan area and 87.3% of which is in other areas in the United States of America as of March 31, 2021.
Loans and Leases Pledged as Collateral
As of March 31, 2021 and 2020, there were $3.3 billion and $3.5 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 borrowings. The Banks did 0t have any outstanding FRB borrowings as of March 31, 2021 and December 31, 2020.
14

BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements (Continued)
(5) Allowance for Loan and Lease Losses
The following tables present the changes in the allowance for loan and lease losses in loans and leases by portfolio segment for the periods indicated:
 Three Months Ended March 31, 2021
 Commercial
Real Estate
CommercialConsumerTotal
 (In Thousands)
Balance at December 31, 2020$80,132 $29,498 $4,749 $114,379 
Charge-offs(2,140)(3)(2,143)
Recoveries331 52 383 
(Credit) provision for loan and lease losses excluding unfunded commitments(203)(1,864)(715)(2,782)
Balance at March 31, 2021$79,929 $25,825 $4,083 $109,837 
 Three Months Ended March 31, 2020
 Commercial
Real Estate
CommercialConsumerTotal
 (In Thousands)
Balance at December 31, 2019$30,285 $24,826 $5,971 $61,082 
Adoption of ASU 2016-13 (CECL)11,694 (2,672)(2,390)6,632 
Charge-offs(2,527)(12)(2,539)
Recoveries247 58 305 
Provision for loan and lease losses40,200 6,900 601 47,701 
Balance at March 31, 2020$82,179 $26,774 $4,228 $113,181 
The allowance for credit losses for unfunded credit commitments, which is included in other liabilities, was $13.7 million and $13.1 million at March 31, 2021 and December 31, 2020, respectively.
Provision for Credit Losses
The provisions for credit losses are set forth below for the periods indicated:
 Three Months Ended March 31,
 20212020
 (In Thousands)
Provision for loan and lease losses:  
Commercial real estate$(203)$40,200 
Commercial(1,864)6,900 
Consumer(715)601 
Total (credit) provision for loan and lease losses(2,782)47,701 
Unfunded commitments635 6,413 
Total (credit) provision for credit losses$(2,147)$54,114 
Allowance for Loan and Lease Losses Methodology
Management has established a methodology to determine the adequacy of the allowance for credit losses that assesses the risks and losses expected on the loan and lease portfolio and unfunded commitments. Additions to the allowance for 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.
15

BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements (Continued)
To calculate the allowance for loans collectively evaluated, management uses models developed by a third party. The models include: 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 reasonable, supportable economic forecasts. The exposure at default considers the current unpaid balance, prepayment assumptions and utilization of expected utilization assumptions. The expected loss estimates for two small commercial portfolios and a runoff auto portfolio are based on 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 loan level attributes such as loan type, 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 pools as the loans have like characteristics. Prepayment assumptions are embedded within the models and are based on the 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 first five years. Because the reasonable and supportable economic forecasts used in the models are mean reverting, the 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 Gross Domestic Product ("GDP"), interest rates, property price indices, and employment measures. Scenario weighting and model parameters are reviewed for each calculation and updated to reflect facts and circumstances as of the financial statement date. The March 31, 2021 forecasts reflect the immediate and longer-term effects of the COVID-19 pandemic as well as the associated policies and fiscal support provided by local and national authorities.

The CRE lifetime loss rate, C&I lifetime loss rate, and Retail lifetime loss rate models were developed using the historical loss experience of all banks in the model’s developmental dataset. Banks in the model’s developmental dataset may have different loss experiences due to geography and portfolio as well as variances in operational and underwriting procedures from the Company, and therefore, the Company calibrates expected losses using a scalar for each model. Each scalar was calculated by examining the loss rates of peer banks that have similar operations and asset bases to the Company and comparing these peer group loss rates to the model results. Peer group loss rates were used in the scalar calculation because management believes the peer group’s historical losses provide a better reflection of the Company’s current portfolio and operating procedures than the Company’s historical losses. Qualitative adjustments are also applied to the results of the three loss rate models.

For March 31, 2021, management applied qualitative adjustments to the 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 as compared to previous quarters. 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 and Macrolease 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 individually evaluated for impairment when amortized cost basis is greater than the discounted present value of expected future cash flows or, in the case of collateral-dependent loans, when there is an excess of a loan's amortized cost basis over the fair value of its underlying collateral. When loans and leases do not share risk characteristics with other financial assets they are evaluated individually. Individually evaluated loans are reviewed quarterly with adjustments made to the calculated reserve as necessary.
16

BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements (Continued)
Beginning January 1, 2020, the Company implemented the CECL methodology to calculate the allowance for credit losses. Prior to January 1, 2020, the Company calculated the allowance for loan and lease losses using the incurred losses methodology.
The general allowance for loan and lease losses was $108.7 million as of March 31, 2021, compared to $112.1 million as of December 31, 2020. The reduction in the ACL is attributable to portfolio contraction, continued low level of net charge-offs, an improving macro-economic forecast, and qualitative adjustments that consider longer-term risks.

The specific allowance for loan and lease losses was $1.1 million as of March 31, 2021, compared to $2.3 million as of December 31, 2020. The specific allowance decreased by $1.2 million during the three months ended March 31, 2021 primarily due to the payoff of 2 commercial relationship which had a specific reserve of $0.3 million, 1 equipment financing relationship which had a specific reserve of $0.1 million, a partial charge off on 1 equipment financing relationship of $0.7 million and the and the decrease in specific reserves for the remaining individually evaluated loans due to improving collection prospects.
As of March 31, 2021, management believes that the methodology for calculating the allowance is sound and that the allowance provides a reasonable basis for determining and reporting on expected losses over the lifetime of the Company’s loan portfolios.
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, 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 ("TDR") 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.
17

BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements (Continued)
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.
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, 2021.
March 31, 2021
20212020201920182017PriorRevolving LoansRevolving Loans Converted to Term LoansTotal
 (In Thousands)
Commercial Real Estate     
Pass$80,520 $357,115 $366,961 $283,214 $252,971 $1,115,585 $55,390 $12,645 $2,524,401 
OAEM693 736 27,369 35,014 63,812 
Substandard210 1,617 5,139 61 7,027 
Total81,213 358,061 394,330 283,214 254,588 1,155,738 55,390 12,706 2,595,240 
Multi-Family Mortgage
Pass14,673 124,227 145,143 165,079 99,440 416,861 5,218 27,457 998,098 
OAEM2,376 2,376 
Total14,673 124,227 145,143 165,079 99,440 419,237 5,218 27,457 1,000,474 
Construction
Pass2,272 46,896 46,555 85,292 665 632 4,697 187,009 
Substandard4,853 2,765 007,618 
Total2,272 46,896 51,408 85,292 665 3,397 4,697 194,627 
Commercial
18

BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements (Continued)
March 31, 2021
20212020201920182017PriorRevolving LoansRevolving Loans Converted to Term LoansTotal
 (In Thousands)
Pass237,440 451,623 55,419 37,516 35,407 129,638 226,438 1,716 1,175,197 
OAEM1,589 4,436 16,242 12 1,840 24,119 
Substandard118 345 2,902 3,716 578 7,659 
Doubtful
Total237,440 453,212 59,855 37,634 51,994 132,552 231,994 2,296 1,206,977 
Equipment Financing
Pass65,631 318,891 286,098 186,109 105,056 86,647 1,868 556 1,050,856 
OAEM196 1,058 293 96 709 2,352 
Substandard1,000 2,787 5,224 3,678 2,529 15,218 
Doubtful450 65 27 652 1,195 
Total65,631 320,088 290,393 191,691 108,857 90,537 1,868 556 1,069,621 
Condominium Association
Pass187 7,409 9,206 5,194 7,385 16,769 1,172 176 47,498 
Substandard106 106 
Total187 7,409 9,206 5,194 7,385 16,875 1,172 176 47,604 
Other Consumer
Pass35 852 523 1,827 31 869 32,295 15 36,447 
Substandard
Total35 852 523 1,827 31 870 32,295 16 36,449 
Total
Pass400,758 1,307,013 909,905 764,231 500,955 1,767,001 327,078 42,565 6,019,506 
OAEM693 2,521 32,863 293 16,338 38,111 1,840 92,659 
Substandard1,210 7,640 5,342 5,640 13,442 3,716 640 37,630 
Doubtful450 65 28 652 1,198 
Total$401,451 $1,310,745 $950,858 $769,931 $522,961 $1,819,206 $332,634 $43,207 $6,150,993 
As of March 31, 2021, there were 0 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.
19

BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements (Continued)
At March 31, 2021
20212020201920182017PriorRevolving LoansRevolving Loans Converted to Term LoansTotal
 (In Thousands)
Residential  
Credit Scores  
Over 700$22,650 $119,549 $89,528 $57,286 $49,514 $162,830 $4,002 $$505,359 
661 - 7003,036 24,134 18,328 10,110 13,852 30,005 99,465 
600 and below682 6,914 4,700 5,053 4,234 16,956 38,539 
Data not available*2,177 17,969 17,003 15,591 13,248 71,181 1,322 138,491 
Total$28,545 $168,566 $129,559 $88,040 $80,848 $280,972 $4,002 $1,322 $781,854 
Home Equity
Credit Scores  
Over 700$553 $1,534 $2,421 $2,249 $2,507 $12,331 $239,483 $2,303 $263,381 
661 - 70051 118 440 476 260 2,354 44,625 616 48,940 
600 and below58 106 260 13 550 10,267 1,058 12,312 
Data not available*68 1,318 7,719 968 10,073 
Total$604 $1,778 $2,967 $2,985 $2,780 $16,553 $302,094 $4,945 $334,706 
_______________________________________________________________________________
* Represents loans and leases for which data are not available.

The following tables present the recorded investment in loans in each class as of December 31, 2020, by credit quality indicator.
December 31, 2020
20202019201820172016PriorRevolving LoansRevolving Loans Converted to Term LoansTotal
 (In Thousands)
Commercial Real Estate      
Pass$352,832 $412,071 $282,629 $255,786 $243,477 $944,676 $55,392 $12,585 $2,559,448 
OAEM477 3,312 8,991 12,780 
Substandard1,261 5,220 62 6,545 
Doubtful
Total352,832 412,548 282,629 257,047 246,791 958,887 55,392 12,647 2,578,773 
Multi-Family Mortgage
Pass125,434 136,620 162,180 103,997 127,873 304,224 15,845 34,871 1,011,044 
OAEM2,388 2,388 
Total125,434 136,620 162,180 103,997 127,873 306,612 15,845 34,871 1,013,432 
Construction
20

BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements (Continued)
December 31, 2020
20202019201820172016PriorRevolving LoansRevolving Loans Converted to Term LoansTotal
 (In Thousands)
Pass46,249 56,074 112,856 1,799 2,788 404 3,834 224,004 
Substandard4,853 2,764 7,617 
Total46,249 60,927 112,856 1,799 5,552 404 3,834 231,621 
Commercial
Pass574,542 66,278 41,325 62,112 22,085 113,715 226,495 1,687 1,108,239 
OAEM310 4,850 35 17 5,382 10,594 
Substandard80 129 389 29 7,612 3,930 664 12,833 
Doubtful
Total574,932 71,128 41,454 62,501 22,149 121,344 235,807 2,353 1,131,668 
Equipment Financing
Pass332,375 306,231 209,219 121,845 56,241 45,451 636 576 1,072,574 
OAEM196 1,066 290 93 609 85 02,339 
Substandard402 4,385 5,280 3,545 1,891 631 16,134 
Doubtful64 24 27 1,292 1,414 
Total332,974 311,746 214,813 125,510 60,033 46,173 636 576 1,092,461 
Condominium Association
Pass6,455 9,918 5,399 7,928 5,213 12,682 2,684 379 50,658 
Substandard112 112 
Total6,455 9,918 5,399 7,928 5,325 12,682 2,684 379 50,770 
Other Consumer
Pass694 549 1,938 32 570 301 28,755 18 32,857 
Substandard
Total694 549 1,938 32 570 301 28,755 20 32,859 
Total
Pass1,438,581 987,741 815,546 553,499 458,247 1,421,453 333,641 50,116 6,058,824 
OAEM506 6,393 290 93 3,956 11,481 5,382 28,101 
Substandard482 9,238 5,409 5,195 4,798 13,463 3,930 728 43,243 
Doubtful64 24 27 1,292 1,416 
Total$1,439,570 $1,003,436 $821,269 $558,814 $468,293 $1,446,403 $342,953 $50,846 $6,131,584 
As of December 31, 2020, there were 0 loans categorized as definite loss.
21

BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements (Continued)

At December 31, 2020
20202019201820172016PriorRevolvingConvertedTotal
 (In Thousands)
Residential  
Credit Scores  
Over 700$119,566 $94,300 $62,452 $53,662 $47,327 $124,999 $4,442 $$506,748 
661 - 70021,820 19,426 10,943 15,616 8,132 23,282 99,219 
600 and below6,901 5,659 4,763 4,318 4,553 13,997 40,191 
Data not available*19,209 17,082 16,199 14,153 5,729 71,456 1,331 145,159 
Total$167,496 $136,467 $94,357 $87,749 $65,741 $233,734 $4,442 $1,331 $791,317 
Home Equity
Credit Scores
Over 700$1,546 $2,832 $2,440 $2,770 $910 $12,804 $247,538 $2,397 $273,237 
661 - 700122 459 499 566 305 2,793 45,356 1,334 51,434 
600 and below59 108 266 13 39 541 10,139 878 12,043 
Data not available*61 1,387 7,330 1,160 9,938 
Total$1,788 $3,399 $3,205 $3,349 $1,254 $17,525 $310,363 $5,769 $346,652 
Age Analysis of Past Due Loans and Leases
The following table presents an age analysis of the amortized cost basis in loans and leases as of March 31, 2021.
22

BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements (Continued)
 At March 31, 2021
 Past Due  Past
Due Greater
Than 90 Days
and Accruing
 
 31-60
Days
61-90
Days
Greater
Than
90 Days
TotalCurrentTotal Loans
and Leases
Non-accrual
Non-accrual
with No Related Allowance
 (In Thousands)
Commercial real estate loans:
Commercial real estate$5,489 $3,946 $3,366 $12,801 $2,582,439 $2,595,240 $$3,611 $2,902 
Multi-family mortgage1,141 1,141 999,333 1,000,474 
Construction3,764 3,853 7,617 187,010 194,627 3,853 3,853 
Total commercial real estate loans10,394 3,946 7,219 21,559 3,768,782 3,790,341 7,464 6,755 
Commercial loans and leases:
Commercial229 1,213 1,442 1,205,535 1,206,977 62 3,161 1,882 
Equipment financing4,010 2,115 9,501 15,626 1,053,995 1,069,621 1,113 15,772 4,260 
Condominium association47,604 47,604 106 106 
Total commercial loans and leases4,239 2,115 10,714 17,068 2,307,134 2,324,202 1,175 19,039 6,248 
Consumer loans:
Residential mortgage1,979 459 3,254 5,692 776,162 781,854 3,722 3,260 
Home equity1,056 531 1,588 333,118 334,706 792 557 
Other consumer12 14 36,435 36,449 
Total consumer loans3,047 461 3,786 7,294 1,145,715 1,153,009 4,516 3,817 
Total loans and leases$17,680 $6,522 $21,719 $45,921 $7,221,631 $7,267,552 $1,179 $31,019 $16,820 
There is 0 interest income recognized on non-accrual loans for the three months ended March 31, 2021.













23

BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements (Continued)
The following tables present an age analysis of the recorded investment in originated and acquired loans and leases as of December 31, 2020.
 At December 31, 2020
 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
TotalCurrentTotal Loans
and Leases
Non-accrual
 (In Thousands)
        
Commercial real estate loans:
Commercial real estate$18,294 $12,402 $7,272 $37,968 $2,540,805 $2,578,773 $4,722 $3,300 $2,580 
Multi-family mortgage813 813 1,012,619 1,013,432 
Construction7,617 7,617 224,004 231,621 3,764 3,853 3,853 
Total commercial real estate loans19,107 12,402 14,889 46,398 3,777,428 3,823,826 8,486 7,153 6,433 
Commercial loans and leases:
Commercial451 304 9,171 9,926 1,121,742 1,131,668 3,486 7,702 6,263 
Equipment financing5,970 2,263 9,391 17,624 1,074,837 1,092,461 16,757 4,062 
Condominium association282 297 579 50,191 50,770 112 112 
Total commercial loans and leases6,703 2,864 18,562 28,129 2,246,770 2,274,899 3,486 24,571 10,437 
Consumer loans:
Residential mortgage2,161 648 3,841 6,650 784,667 791,317 5,587 5,117 
Home equity580 215 588 1,383 345,269 346,652 1,136 824 
Other consumer13 14 32,845 32,859 
Total consumer loans2,754 863 4,430 8,047 1,162,781 1,170,828 6,724 5,941 
Total loans and leases$28,564 $16,129 $37,881 $82,574 $7,186,979 $7,269,553 $11,975 $38,448 $22,811 

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 TDR loans. 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 present value of expected future cash flows or, in the case of collateral-dependent loans and leases, any increase in the loan or lease amortized cost basis over the fair value of the underlying collateral discounted for estimated selling costs. In contrast, the loans and leases which share similar risk characteristics and are not included in the individually evaluated population are collectively evaluated for credit losses.
24

BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements (Continued)
The 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 dates indicated. Periods prior to January 1, 2020 are presented in accordance with accounting rules effective at that time.
At March 31, 2021
Commercial Real EstateCommercialConsumerTotal
(In Thousands)
Allowance for Loan and Lease Losses:
Individually evaluated$132 $907 $94 $1,133 
Collectively evaluated79,797 24,918 3,989 108,704 
Total$79,929 $25,825 $4,083 $109,837 
Loans and Leases:
Individually evaluated$14,927 $20,198 $6,414 $41,539 
Collectively evaluated3,775,414 2,304,004 1,146,595 7,226,013 
Total$3,790,341 $2,324,202 $1,153,009 $7,267,552 

At December 31, 2020
Commercial Real EstateCommercialConsumerTotal
(In Thousands)
Allowance for Loan and Lease Losses:
Individually evaluated$183 $2,020 $108 $2,311 
Collectively evaluated79,949 27,478 4,641 112,068 
Total loans and leases$80,132 $29,498 $4,749 $114,379 
Loans and Leases:
Individually evaluated$14,159 $24,727 $8,760 $47,646 
Collectively evaluated3,809,667 2,250,172 1,162,068 7,221,907 
Total loans and leases$3,823,826 $2,274,899 $1,170,828 $7,269,553 


25

BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements (Continued)
Troubled Debt Restructuring Loans and Leases
The following table sets forth information regarding TDR loans and leases at the dates indicated:
At March 31, 2021At December 31, 2020
 (In Thousands)
Troubled debt restructurings:
On accrual$16,770 $11,483 
On nonaccrual6,293 7,476 
Total troubled debt restructurings$23,063 $18,959 

Total TDR loans and leases increased by $4.1 million to $23.1 million at March 31, 2021 from $19.0 million at December 31, 2020, primarily driven by 2 new TDR relationships, consisting of 1 $3.7 million construction relationship and 1 $1.3 million equipment financing relationship, partially offset by the payoff of one TDR relationship during the three months ended March 31, 2021.
The amortized cost basis in TDR loans and the associated specific credit losses for the loan and lease portfolios, that were modified during the periods indicated, are as follows.
 At and for the Three Months Ended March 31, 2021
  Amortized CostSpecific
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)
       
Commercial real estate$497 $497 
Construction2,764 2,764 0000
Equipment financing12 1,718 1,731 234 
Total loans and leases17 $4,979 $4,992 $$234 $$
______________________________________________________________________
(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 Three Months Ended March 31, 2020
  Recorded InvestmentSpecific
Allowance for
Loan and
Lease Losses
 
Defaulted (1)
 Number of
Loans/
Leases
At
Modification
At End of
Period
Nonaccrual
Loans and
Leases
Number of
Loans/
Leases
Recorded
Investment
 (Dollars in Thousands)
       
Commercial real estate0228 
Commercial297 295 295 
Equipment financing200 200 
Total loans and leases$497 $495 $$295 $228 
______________________________________________________________________
(1) Includes loans and leases that have been modified within the past twelve months and subsequently had payment defaults during the period indicated.
The following table sets forth the Company's end-of-period amortized cost basis for TDRs that were modified during the periods indicated, by type of modification.
26

BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements (Continued)
 Three Months Ended March 31,
 20212020
 (In Thousands)
Extended maturity$4,300 $295 
Combination maturity, principal, interest rate693 200 
Total$4,993 $495 
The TDR loans and leases that were modified for the three months ended March 31, 2021 and 2020 were $5.0 million and $0.5 million, respectively. The increases in TDR loans and leases that were modified for the three months ended March 31, 2021 were primarily due to the modification of 2 construction relationships totaling $2.7 million and 5 equipment finance relationships totaling $1.7 million during the three months ended March 31, 2020.
The net charge-offs for performing and nonperforming TDR loans and leases for the three months ended March 31, 2021 and 2020 were $0.6 million and $0.1 million, respectively.
The commitments to lend funds to debtors owing receivables whose terms had been modified in TDRs as of March 31, 2021 was $2.1 million. As of March 31, 2020, there were $2.3 million commitments to lend funds to debtors owing receivables whose terms had been modified in TDRs.
The Coronavirus Aid, Relief and Economic Security ("CARES") Act and regulatory guidance issued by the Federal banking agencies provides that certain short-term loan modifications to borrowers experiencing financial distress as a result of the economic impacts created by the COVID-19 pandemic are not required to be treated as TDRs under GAAP. As such, the Company suspended TDR accounting for COVID-19 pandemic related loan modifications meeting the loan modification criteria set forth under the CARES Act or as specified in the regulatory guidance. Further, loans granted payment deferrals related to the COVID-19 pandemic are not required to be reported as past due or placed on non-accrual status (provided the loans were not past due or on non-accrual status prior to the deferral). As of March 31, 2021, the Company granted 4,603 short-term deferments on loan and lease balances of $1.1 billion of which 4,262 loans and leases representing balances $955.6 million returned to payment and 341 loans and leases representing balances of $125.7 million remain in deferment. The outstanding deferred loans and leases represent 1.7% of the Company's total loan and lease balances.
(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, 2021At December 31, 2020
 (In Thousands)
Goodwill$160,427 $160,427 
Other intangible assets:
Core deposits1,831 2,063 
Trade name1,089 1,089 
Total other intangible assets2,920 3,152 
Total goodwill and other intangible assets$163,347 $163,579 
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 5.5 years.
27

BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements (Continued)
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 2021$644 
Year ending:
2022494 
2023263 
2024151 
2025103 
202674 
Thereafter102 
Total$1,831 
(7) Accumulated Other Comprehensive Income (Loss)
For the three months ended March 31, 2021 and 2020, the Company’s accumulated other comprehensive income (loss) includes the following three components: (i) unrealized holding gains (losses) on investment securities available-for-sale; (ii) change in the fair value of cash flow hedges and (iii) adjustment of accumulated obligation for postretirement benefits.
 
Changes in accumulated other comprehensive income (loss) by component, net of tax, were as follows for the periods indicated:
 Three Months Ended March 31, 2021
 
Investment
Securities
 Available-for-Sale
Net Change in Fair Value of Cash Flow HedgesPostretirement
Benefits
Accumulated Other
Comprehensive
Income (Loss)
 (In Thousands)
Balance at December 31, 2020$16,582 $$(99)$16,490 
Other comprehensive income (loss)(14,408)(14,406)
Reclassification adjustment for (income) expense recognized in earnings(2)(2)
Balance at March 31, 2021$2,174 $$(99)$2,082 
 Three Months Ended March 31, 2020
 
Investment
Securities
 Available-for-Sale
Net Change in Fair Value of Cash Flow HedgesPostretirement
Benefits
Accumulated Other
Comprehensive
Income (Loss)
 (In Thousands)
Balance at December 31, 2019$2,199 $$84 $2,283 
Other comprehensive income (loss)14,664 14,664 
Balance at March 31, 2020$16,863 $$84 $16,947 
(8) Derivatives and Hedging Activities
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 loan payments. The Company concurrently enters into offsetting swaps with a third party financial institution, effectively minimizing its net 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 in the fair value are recognized directly in earnings. Based on the Company's intended use for the loan level derivatives at inception, the
28

BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements (Continued)
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".
The Company 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 and involve the receipt of variable rate amounts from a counterparty in exchange for the Company making fixed payments. The Company enters into interest rate swaps as hedging instruments against the interest rate risk associated with the Company's FHLB borrowings. 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 period that the hedged forecasted transaction affects earnings.
As of March 31, 2021, the Company paid its counterparties a fixed weighted average interest rate of 0.08% over a maximum period of 2 years for derivative instruments that are designated as and qualify as cash flow hedging instruments.
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.
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.
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 present the Company's customer related derivative positions for the periods indicated below for those derivatives not designated as hedging.
 Notional Amount Maturing
 Number of PositionsLess than 1 yearLess than 2 yearsLess than 3 yearsLess than 4 yearsThereafterTotalFair Value
March 31, 2021
 (Dollars In Thousands)
Loan level derivatives
Receive fixed, pay variable134 $$10,876 $13,949 $118,504$1,089,153 $1,232,482 $71,310 
Pay fixed, receive variable134 10,876 13,949 118,5041,089,153 1,232,482 71,310 
Risk participation-out agreements37 6,975 22,718233,737 263,430 1,019 
Risk participation-in agreements18,929 41,360 60,289 205 
Foreign exchange contracts
Buys foreign currency, sells U.S. currency16 $1,416 $$$$$1,416 $99 
Sells foreign currency, buys U.S. currency21 1,422 1,422 93 
29

BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements (Continued)
 Notional Amount Maturing
 Number of PositionsLess than 1 yearLess than 2 yearsLess than 3 yearsLess than 4 yearsThereafterTotalFair Value
December 31, 2020
(Dollars In Thousands)
Loan level derivatives
Receive fixed, pay variable136 $$8,541 $16,447 $99,014 $1,090,144 $1,214,146 $129,284 
Pay fixed, receive variable136 8,541 16,447 99,014 1,090,144 1,214,146 129,284 
Risk participation-out agreements37 7,009 22,733 222,913 252,655 1,843 
Risk participation-in agreements19,000 41,619 60,619 361 
Foreign exchange contracts
Buys foreign currency, sells U.S. currency18 $1,266 $$$$$1,266 $156 
Sells foreign currency, buys U.S. currency20 1,273 1,273 148 
30

BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements (Continued)
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 $149.4 million and $166.5 million in the normal course of business as of March 31, 2021 and December 31, 2020, 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 March 31, 2021
Gross
Amounts Recognized
Gross Amounts
Offset in the
Statement of Financial Position
Net Amounts  Presented in the Statement of Financial PositionGross Amounts Not Offset in the
Statement of Financial Position
Net Amount
 Financial Instruments PledgedCash Collateral Pledged
 (In Thousands)
Asset derivatives
Derivatives designated as hedging instruments:
Interest rate derivatives$10 $$10 $$$10 
Derivatives not designated as hedging instruments:
Loan level derivatives$84,128 $$84,128 $$$84,128 
Risk participation-out agreements1,019 1,019 1,019 
Foreign exchange contracts99 99 99 
Total$85,256 $$85,256 $$$85,256 
Liability derivatives
Derivatives designated as hedging instruments:
Interest rate derivatives$$$$$$
Derivatives not designated as hedging instruments:
Loan level derivatives$84,128 $$84,128 $138,110 $11,280 $(65,262)
Risk participation-in agreements205 205 205 
Foreign exchange contracts93 93 93 
Total$84,428 $$84,428 $138,110 $11,280 $(64,962)
31

BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements (Continued)
 At December 31, 2020
Gross
Amounts Recognized
Gross Amounts
Offset in the
Statement of Financial Position
Net Amounts  Presented in the Statement of Financial PositionGross Amounts Not Offset in the
Statement of Financial Position
Net Amount
 Financial Instruments PledgedCash Collateral Pledged
 (In Thousands)
Asset derivatives
Interest rate derivatives$$$$$$
Loan level derivatives131,328 131,328 131,328 
Risk participation-out agreements1,843 1,843 1,843 
Foreign exchange contracts156 156 156 
Total$133,335 $$133,335 $$$133,335 
Liability derivatives
Loan level derivatives$131,328 $$131,328 $155,220 $11,280 $(35,172)
Risk participation-in agreements361 361 361 
Foreign exchange contracts148 148 148 
Total$131,837 $$131,837 $155,220 $11,280 $(34,663)
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, 2021
Three Months Ended 
 March 31, 2020
 (Dollars in Thousands)
Derivatives designated as hedges$$
Gain in OCI on derivatives (effective portion), net of tax$$
Gain (loss) reclassified from OCI into interest income or interest expense (effective portion)$$

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 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.






32

BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements (Continued)
(9) Stock Based Compensation
As of March 31, 2021, the Company had 2 active equity plans: the 2011 Restricted Stock Award Plan ("2011 RSA") with 500,000 authorized shares and the 2014 Equity Incentive Plan ("2014 Plan") with 1,750,000 authorized shares. The 2011 RSA and the 2014 Plan are collectively 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.
Of the awarded shares, 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 14 financial institutions. These are referred to as "performance-based shares". 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 the Plans, shares of the Company's common stock 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 months ended March 31, 2021 and March 31, 2020, 0 shares were issued upon satisfaction of required conditions of the Plans.
Total expense for the Plans was $0.5 million and $0.6 million for the three months ended March 31, 2021 and 2020, respectively.
(10) Earnings per Share ("EPS")
The following table is a reconciliation of basic EPS and diluted EPS:
Three Months Ended
 March 31, 2021March 31, 2020
 BasicFully
Diluted
BasicFully
Diluted
(Dollars in Thousands, Except Per Share Amounts)
Numerator:
Net income$26,454 $26,454 $(17,276)$(17,276)
Denominator:
Weighted average shares outstanding78,143,752 78,143,752 79,481,462 79,481,462 
Effect of dilutive securities— 260,311 — 184,312 
Adjusted weighted average shares outstanding78,143,752 78,404,063 79,481,462 79,665,774 
EPS$0.34 $0.34 $(0.22)$(0.22)
(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 months ended March 31, 2021 and December 31, 2020.
33

BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements (Continued)
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 March 31, 2021
 Level 1Level 2Level 3Total
 (In Thousands)
Assets:    
Investment securities available-for-sale:    
GSE debentures$$271,526 $$271,526 
GSE CMOs40,925 40,925 
GSE MBSs276,066 276,066 
Corporate debt obligations23,247 23,247 
U.S. Treasury bonds117,641 117,641 
Foreign government obligations496 496 
Total investment securities available-for-sale$$729,901 $$729,901 
Equity securities held-for-trading$$518 $$518 
Interest rate derivatives10 10 
Loan level derivatives84,128 84,128 
Risk participation-out agreements1,019 1,019 
Foreign exchange contracts99 99 
Liabilities:    
Interest rate derivatives$$$$
Loan level derivatives84,128 84,128 
Risk participation-in agreements205 205 
Foreign exchange contracts93 93 
34

BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements (Continued)
 Carrying Value as of December 31, 2020
 Level 1Level 2Level 3Total
 (In Thousands)
Assets:    
Investment securities available-for-sale:    
GSE debentures$$278,645 $$278,645 
GSE CMOs46,028 46,028 
GSE MBSs323,609 323,609 
Corporate debt obligations23,467 23,467 
U.S. Treasury bonds73,577 73,577 
Foreign government obligations496 496 
Total investment securities available-for-sale$$745,822 $$745,822 
Equity securities held-for-trading$$526 $$526 
Interest rate derivatives
Loan level derivatives131,328 131,328 
Risk participation-out agreements1,843 1,843 
Foreign exchange contracts156 156 
Liabilities:   
Loan level derivatives131,328 131,328 
Risk participation-in agreements361 361 
Foreign exchange contracts148 148 
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. 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, and trust preferred securities, all of which are included in Level 2. As of March 31, 2021 and December 31, 2020, 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.
Equity Securities Held-for-Trading
The fair value of equity securities held-for-trading is based principally on market prices and dealer quotes received from third-party and nationally-recognized pricing services. The Company's equity securities are priced this way and are included in Level 1 and Level 2. These prices are validated by comparing the primary pricing source with an alternative pricing source when available.
Derivatives and Hedging Instruments
The fair value of interest rate derivatives designated as hedging instruments, loan level derivatives, risk participation agreements (RPA in/out), and foreign exchange contracts represent a Level 2 valuation and are based on settlement values
35

BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements (Continued)
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 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 the three months ended March 31, 2021 and December 31, 2020, respectively.
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 March 31, 2021
 Level 1Level 2Level 3Total
 (In Thousands)
Assets measured at fair value on a non-recurring basis:    
Collateral-dependent impaired loans and leases$$$844 $844 
OREO5,328 5,328 
Repossessed assets1,055 1,055 
Total assets measured at fair value on a non-recurring basis$$1,055 $6,172 $7,227 
 Carrying Value as of December 31, 2020
 Level 1Level 2Level 3Total
 (In Thousands)
Assets measured at fair value on a non-recurring basis:    
Collateral-dependent impaired loans and leases$$$3,445 $3,445 
OREO5,415 5,415 
Repossessed assets1,100 1,100 
Total assets measured at fair value on a non-recurring basis$$1,100 $8,860 $9,960 
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
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.
Repossessed Assets
Repossessed assets are carried at estimated fair value less costs to sell based on auction pricing (Level 2).
36

BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements (Continued)
The table below presents quantitative information about significant unobservable inputs (Level 3) for assets measured at fair value on a non-recurring basis at the dates indicated.
Fair ValueValuation Technique
At March 31,
2021
At December 31, 2020
 (Dollars in Thousands)
Collateral-dependent impaired loans and leases$844 $3,445 
Appraisal of collateral (1)
Other real estate owned5,328 5,415 
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.
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, 2021
 Carrying
Value
Estimated
Fair Value
Level 1
Inputs
Level 2
Inputs
Level 3
Inputs
 (In Thousands)
Financial assets:     
Loans and leases, net$7,157,715 $7,122,319 $$$7,122,319 
Restricted equity securities40,400 40,400 40,400 
Financial liabilities:    
Certificates of deposits1,743,656 1,751,374 1,751,374 
Borrowed funds546,003 539,957 539,957 
   Fair Value Measurements at December 31, 2020
 Carrying
Value
Estimated
Fair Value
Level 1
Inputs
Level 2
Inputs
Level 3
Inputs
 (In Thousands)
Financial assets:     
Loans and leases, net7,155,174 7,116,854 7,116,854 
Restricted equity securities49,786 49,786 49,786 
Financial liabilities: 
Certificates of deposit2,083,907 2,092,867 2,092,867 
Borrowed funds820,247 818,681 818,681 — 
37

BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements (Continued)
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). 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.
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.
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).
Borrowed Funds
The fair value of federal funds purchased is equal to the amount borrowed. The fair value of FHLBB 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 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.
38

BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements (Continued)
Financial instruments with off-balance-sheet risk at the dates indicated follow:
 At March 31, 2021At December 31, 2020
 (In Thousands)
Financial instruments whose contract amounts represent credit risk:  
Commitments to originate loans and leases:  
Commercial real estate$107,597 $174,240 
Commercial105,426 80,291 
Residential mortgage82,366 30,418 
Unadvanced portion of loans and leases826,545 759,053 
Unused lines of credit:  
Home equity591,377 584,881 
Other consumer41,583 38,954 
Other commercial431 408 
Unused letters of credit: 
     Financial standby letters of credit15,953 14,746 
Performance standby letters of credit6,607 5,903 
Commercial and similar letters of credit5,369 5,105 
Loan level derivatives (Notional principal amounts):
Receive fixed, pay variable1,232,482 1,214,146 
Pay fixed, receive variable1,232,482 1,214,146 
Risk participation-out agreements263,430 252,655 
Risk participation-in agreements60,289 60,619 
Foreign exchange contracts (Notional amounts):
Buys foreign currency, sells U.S. currency1,416 1,266 
Sells foreign currency, buys U.S. currency1,422 1,273 
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 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 a 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 these derivatives are presented in Footnote 8.
39

BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements (Continued)
Lease Commitments
The Company leases certain office space under various noncancellable operating leases as well as certain other assets. These leases have original terms ranging from 3 years 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 used the FHLB classic advance rates available as of March 31, 2021 as the discount rate to determine the net present value of the remaining lease payments.
Three Months Ended March 31, 2021Three Months Ended March 31, 2020
(In Thousands)
The components of lease expense were as follow:
Operating lease cost$1,563 $1,611 
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$1,579 $1,658 
At March 31, 2021At December 31, 2020
(In Thousands)
Supplemental balance sheet information related to leases was as follows:
Operating Leases
Operating lease right-of-use assets$23,180 $24,143 
Operating lease liabilities23,180 24,143 
Weighted Average Remaining Lease Term
Operating leases6.806.95
Weighted Average Discount Rate
Operating leases3.2 %3.2 %

40

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
March 31, 2021
 (In Thousands)
Remainder of 2021$4,596 
Year ending:
20225,569 
20234,643 
20243,366 
20252,343 
20261,559 
Thereafter3,571 
Total$25,647 
Less imputed interest(2,467)
Present value of lease liability$23,180 
Certain leases contain escalation clauses for real estate taxes and other expenditures, which are not included above. The total real estate taxes were $0.5 million and other expenditures were $0.1 million for both the three months ended March 31, 2021, and 2020. Total rental expense was $1.5 million and $1.6 million for the three months ended March 31, 2021 and 2020, respectively.
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 Accounting Standards Codification (“ASC”) ("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.
41

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.
42

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 factors, the negative impacts and disruptions of the COVID-19 pandemic and measures taken to contain its spread on our employees, customers, business operations, credit quality, financial position, liquidity and results of operations; 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 on a national basis or in the local markets in which the Company operates; changes in consumer behavior due to changing political, business and economic conditions, including increased unemployment, or legislative or regulatory initiatives; changes in the value of securities and other assets in the Company’s investment portfolio; increases in loan and lease default and charge-off rates; the adequacy of allowances for loan and lease losses; decreases in deposit levels that necessitate increases in borrowing to fund loans and investments; operational risks including, but not limited to, cybersecurity incidents, fraud, natural disasters and future pandemics; changes in regulation; reputational risks relating to the Company’s participation in the Paycheck Protection Program, and other pandemic-related legislative and regulatory initiatives and programs; 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; and the other risks and uncertainties detailed in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020 and other filings submitted to the Securities and Exchange Commission. 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"); and Brookline Securities Corp.
As a commercially-focused financial institution with 50 full-service banking offices throughout greater Boston, the north shore of Massachusetts and Rhode Island, the Company, through Brookline Bank and BankRI, 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 equipment financing, 12.7% of which is in the greater New York and New Jersey metropolitan area and 87.3% of which is in other areas in the United States of America as of March 31, 2021.
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, excellent customer service, and strong risk management.
The Company manages the Banks under a uniform strategic 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
43

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. 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. Loan and lease growth and deposit growth are also greatly influenced by the rate-setting actions of the FRB. A sustained, low interest rate environment with a flat interest rate curve may negatively impact the Company's yields and net interest margin. While the Company is slightly asset sensitive and should benefit from rising rates, changes in interest rates 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 credit risk, along with increasing sources of non-interest income, while controlling the growth of non-interest expenses.
The Company and the Banks are supervised, examined and regulated by the FRB. As a Massachusetts-chartered trust company, Brookline Bank 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. The FDIC continues to insure each of the Banks’ deposits up to $250,000 per depositor. As previously disclosed, on July 31, 2019, Brookline Bank converted its charter from a Massachusetts savings bank to a Massachusetts-chartered trust company and ended its membership in the Depositors Insurance Fund (the “DIF”), a private industry-sponsored fund which insures Massachusetts-chartered savings 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 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 coverage will continue to be insured by the DIF until they reach maturity.
On March 27, 2020, Congress passed, the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) was enacted to address the economic effects of the COVID-19 pandemic.
Paycheck Protection Program The CARES Act appropriated $349 billion for “paycheck protection loans” through the U.S. Small Business Administration's ("SBA's") Paycheck Protection Program ("PPP"). The amount appropriated was subsequently increased to $659 billion. Loans under the PPP that meet SBA requirements may be forgiven in certain circumstances, and are 100% guaranteed by SBA. Additionally, on December 27, 2020, the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act (the “Economic Aid Act”) was signed into law and provides for a second round of PPP loans (the "PPP-2"). The Banks are participating in the PPP-2 as of March 31, 2021. PPP loans are fully guaranteed by the U.S. government, have an initial term of up to five years and earn interest at a rate of 1%. We currently expect a significant portion of these loans will ultimately be forgiven by the SBA in accordance with the terms of the program. Through March 31, 2021, the Banks funded 1,342 PPP-2 loans representing $249.5 million. In the first round of PPP funding, the Banks funded 2,922 PPP loans totaling $581.7 million. In conjunction with the PPP, the FRB has created a lending facility for qualified financial institutions. The FRB's Paycheck Protection Program Liquidity Facility ("PPPLF") will extend credit to depository institutions with a term of up to five years at an interest rate of 0.35%. Only loans issued under the PPP can be pledged as collateral to access the facility. The Company is participating in the PPPLF program. As of the filing date, the Banks have obtained SBA approval for 1,613 PPP-2 loans totaling $260 million. All PPP-2 loans have been funded.
Troubled Debt Restructuring Relief. From March 1, 2020 through the earlier of January 1, 2022 or 60 days after the termination date of the national emergency, a financial institution may elect to suspend the requirements under accounting principles generally accepted in the U.S. for loan modifications related to the COVID-19 pandemic that would otherwise be categorized as a troubled debt restructured, including impairment accounting. This troubled debt restructuring relief applies for the term of the loan modification that occurs during the applicable period for a loan that was not more than 30 days past due as of December 31, 2019. Financial institutions are required to maintain records of the volume of loans involved in modifications to which troubled debt restructuring relief is applicable. As of March 31, 2021, the Company granted 4,603 short-term deferments on loan and lease balances of $1.1 billion. Of these modifications, 4,262 loans and leases with total balances of $955.6 million have returned to the payment status and 341 loans and leases with total balances of $125.7 million remain on the deferral status, which represents 1.7% of the Company's total loan and lease balances. These short-term deferments are not classified as troubled debt restructured loans and will not be reported as past due provided that they are performing in accordance with the modified terms.
The Company’s common stock is traded on the Nasdaq Global Select MarketSM under the symbol “BRKL.”
44

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,
20212020202020202020
(Dollars in Thousands, Except Per Share Data)
PER COMMON SHARE DATA
Earnings per share - Basic$0.34 $0.34 $0.24 $0.25 $(0.22)
Earnings per share - Diluted0.34 0.34 0.24 0.25 (0.22)
Book value per share (end of period)12.10 12.05 11.84 11.75 11.57 
Tangible book value per share (end of period) (1)10.01 9.96 9.77 9.67 9.49 
Dividends paid per common share0.115 0.115 0.115 0.115 0.115 
Stock price (end of period)15.00 12.04 8.65 10.08 11.28 
PERFORMANCE RATIOS (2)
Net interest margin (taxable equivalent basis)3.39 %3.23 %3.08 %3.09 %3.31 %
Return on average assets1.21 %1.20 %0.83 %0.88 %(0.87)%
Return on average tangible assets (1)1.24 %1.22 %0.84 %0.90 %(0.89)%
Return on average stockholders' equity11.18 %11.38 %7.99 %8.45 %(7.30)%
Return on average tangible stockholders' equity (1)13.51 %13.79 %9.70 %10.28 %(8.84)%
Dividend payout ratio (1)33.99 %33.96 %48.67 %46.37 %(53.10)%
Efficiency ratio (3)55.22 %55.27 %57.83 %55.46 %57.36 %
ASSET QUALITY RATIOS
Net loan and lease charge-offs as a percentage of average loans and leases (annualized)0.10 %0.24 %0.27 %0.08 %0.13 %
Nonperforming loans and leases as a percentage of total loans and leases0.43 %0.53 %0.51 %0.56 %0.57 %
Nonperforming assets as a percentage of total assets0.44 %0.50 %0.44 %0.47 %0.49 %
Total allowance for loan and lease losses as a percentage of total loans and leases1.51 %1.57 %1.62 %1.61 %1.66 %
CAPITAL RATIOS
Stockholders' equity to total assets11.04 %10.53 %10.39 %10.21 %10.78 %
Tangible equity ratio (1)9.31 %8.86 %8.73 %8.56 %9.02 %
FINANCIAL CONDITION DATA
Total assets$8,559,810 $8,942,424 $9,000,192 $9,069,667 $8,461,591 
Total loans and leases7,267,552 7,269,553 7,396,358 7,407,697 6,822,527 
Allowance for loan and lease losses109,837 114,379 119,971 119,553 113,181 
Investment securities available-for-sale729,901 745,822 783,867 854,505 761,539 
Investment securities held-to-maturity— — — — — 
Equity securities held-for-trading518 526 525 1,992 2,558 
Goodwill and identified intangible assets163,347 163,579 163,891 164,203 164,514 
Total deposits6,866,786 6,910,696 6,792,523 6,440,233 5,889,938 
Total borrowed funds546,003 820,247 1,005,045 1,406,669 1,291,804 
Stockholders' equity945,399 941,778 935,558 926,413 912,568 
(Continued)
45

At and for the Three Months Ended
March 31,December 31,September 30,June 30,March 31,
20212020202020202020
(Dollars in Thousands, Except Per Share Data)
EARNINGS DATA
Net interest income$69,109 $68,225 $65,938 $64,288 $61,712 
Provision for credit losses(2,147)(2,103)4,528 5,347 54,114 
Non-interest income4,794 4,219 4,862 6,235 9,328 
Non-interest expense40,811 40,038 40,947 39,109 40,748 
Net income (loss)26,454 26,663 18,679 19,571 (17,276)
_______________________________________________________________________________
(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
Balance Sheet
Total assets of $8.6 billion as of March 31, 2021 decreased $382.6 million, or 17.1% on an annualized basis, from December 31, 2020. The decrease was primarily driven by decreases in cash and cash equivalents and other assets.
Cash and cash equivalents as of March 31, 2021 decreased $304.0 million, or 279.6% on an annualized basis, to $130.9 million from December 31, 2020.
Total loans and leases as of March 31, 2021 decreased $2.0 million, or 0.1% on an annualized basis, to $7.3 billion from December 31, 2020. The Company's commercial loan portfolios, which are comprised of commercial real estate loans and commercial loans and leases, totaled $6.1 billion, or 84.1% of total loans and leases as of March 31, 2021, an increase of $15.8 million, or 1.0% on an annualized basis, from $6.1 billion, or 83.9% of total loans and leases, as of December 31, 2020.
Total deposits of $6.9 billion as of March 31, 2021 decreased $43.9 million, or 2.5% on an annualized basis, from December 31, 2020. Core deposits, which include demand checking, NOW, money market and savings accounts, totaled $5.1 billion, or 74.6% of total deposits as of March 31, 2021, an increase of $296.3 million, or 24.6% on an annualized basis from $4.8 billion, or 69.8% of total deposits, as of December 31, 2020. Certificate of deposit balances totaled $1.3 billion, or 18.5% of total deposits as of March 31, 2021, a decrease of $116.9 million, or 33.6% on an annualized basis from $1.4 billion, or 20.1% of total deposits, as of December 31, 2020. Brokered deposits totaled $470.6 million, or 6.9% of total deposits as of March 31, 2021, a decrease of $223.4 million, or 128.8% on an annualized basis from $693.9 million, or 10.0% of total deposits, as of December 31, 2020.
Total borrowed funds as of March 31, 2021 decreased $274.2 million, or 133.7% on an annualized basis, to $0.5 billion from December 31, 2020.
Asset Quality
Nonperforming assets as of March 31, 2021 totaled $37.4 million, or 0.44% of total assets, compared to $45.0 million, or 0.50% of total assets, as of December 31, 2020. Net charge-offs for the three months ended March 31, 2021 were $1.8 million, or 0.10% of average loans and leases on an annualized basis, compared to $2.2 million, or 0.13% of average loans and leases on an annualized basis, for the three months ended March 31, 2020.
The ratio of the allowance for loan and lease losses to total loans and leases was 1.51% as of March 31, 2021, compared to 1.57% as of December 31, 2020. On January 1, 2020, the Company implemented the CECL methodology to calculate the allowance for credit losses. Refer also to Note 5, "Allowance for Loan and Lease Losses."
46

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 was 11.65% as of March 31, 2021, compared to 11.04% as of December 31, 2020. The Company's Tier 1 leverage ratio was 9.26% as of March 31, 2021, compared to 8.92% as of December 31, 2020. As of March 31, 2021, the Company's Tier 1 risk-based capital ratio was 11.79%, compared to 11.18% as of December 31, 2020. The Company's Total risk-based capital ratio was 14.15% as of March 31, 2021, compared to 13.51% as of December 31, 2020.
The Company's ratio of stockholders' equity to total assets was 11.04% and 10.53% as of March 31, 2021 and December 31, 2020, respectively. The Company's tangible equity ratio was 9.31% and 8.86% as of March 31, 2021 and December 31, 2020, respectively.
Net Income (Loss)
For the three months ended March 31, 2021, the Company reported net income of $26.5 million, or $0.34 per basic and diluted share, an increase of $43.7 million, or 253.1%, from net loss of $(17.3) million, or $(0.22) per basic and diluted share for the three months ended March 31, 2020. This increase in net income is primarily the result of a decrease in the provision for credit losses of $56.3 million and an increase in net interest income of $7.4 million, partially offset by an increase in the provision for income taxes of $15.3 million and a decrease in non-interest income of $4.5 million. Refer to “Results of Operations" below for further discussion.
The annualized return on average assets was 1.21% for the three months ended March 31, 2021, compared to (0.87)% for the three months ended March 31, 2020. The annualized return on average stockholders' equity was 11.18% for the three months ended March 31, 2021, compared to (7.30)% for the three months ended March 31, 2020.
The net interest margin was 3.39% for the three months ended March 31, 2021, up from 3.31% for the three months ended March 31, 2020. The increase in the net interest margin is a result of a decrease of 79 basis points in the Company's overall cost of funds to 0.50% for the three months ended March 31, 2021 from 1.29% for the three months ended March 31, 2020, partially offset by a decrease in the yield on interest-earning assets of 66 basis points to 3.80% for the three months ended March 31, 2021 from 4.46% for the three months ended March 31, 2020.
The Company’s net interest margin and net interest income is sensitive to the structure and level of interest rates as well as competitive pricing in all loan and deposit categories.
Critical Accounting Policies
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 2020 Annual Report on Form 10-K, management has identified the determination of the allowance for credit losses and the review of goodwill for impairment as the Company’s most critical accounting policies.
Recent Accounting Developments
In March 2020, the FASB issued ASU 2020-04, " Reference Rate Reform (Topic 848)-Facilitation of 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. The Company has not yet adopted the amendments in this update and is currently in the process of reviewing its contracts and existing processes in order to assess the risks and potential impact to the Company.

47

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. 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.
The following table 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 
 March 31,
20212020
(Dollars in Thousands)
Net income (loss), as reported$26,454 $(17,276)
Less:
Security (losses) gains (after-tax)(5)964 
Operating earnings (loss)$26,459 $(18,240)
Basic earnings (loss) per share, as reported$0.34 $(0.22)
Less:
Security (losses) gains (after-tax)— 0.01 
Basic operating earnings (loss) per share$0.34 $(0.23)

The following tables reconcile the Company’s return on average tangible assets and return on average tangible stockholders’ equity for the periods indicated:
48

Three Months Ended
March 31,
2021
December 31,
2020
September 30,
2020
June 30,
2020
March 31,
2020
(Dollars in Thousands)
Operating earnings (loss)$26,459 $26,663 $18,639 $19,131 $(18,240)
Average total assets$8,714,158 $8,874,467 $9,018,672 $8,869,540 $7,965,826 
Less: Average goodwill and average identified intangible assets, net163,457 163,758 164,072 164,385 164,701 
Average tangible assets$8,550,701 $8,710,709 $8,854,600 $8,705,155 $7,801,125 
Return on average assets (annualized)1.21 %1.20 %0.83 %0.88 %(0.87)%
Less:
Security gains— %— %— %0.02 %0.05 %
Operating return on average assets (annualized)1.21 %1.20 %0.83 %0.86 %(0.92)%
Return on average tangible assets (annualized)1.24 %1.22 %0.84 %0.90 %(0.89)%
Less:
Security gains— %— %— %0.02 %0.05 %
Operating return on average tangible assets (annualized)1.24 %1.22 %0.84 %0.88 %(0.94)%
Average total stockholders' equity$946,482 $937,294 $934,632 $926,239 $946,138 
Less: Average goodwill and average identified intangible assets, net163,457 163,758 164,072 164,385 164,701 
Average tangible stockholders' equity$783,025 $773,536 $770,560 $761,854 $781,437 
Return on average stockholders' equity (annualized)11.18 %11.38 %7.99 %8.45 %(7.30)%
Less:
Security gains (losses)— %— %0.01 %0.19 %0.41 %
Operating return on average stockholders' equity (annualized)11.18 %11.38 %7.98 %8.26 %(7.71)%
Return on average tangible stockholders' equity (annualized)13.51 %13.79 %9.70 %10.28 %(8.84)%
Less:
Security gains (losses)— %— %0.02 %0.24 %0.49 %
Operating return on average tangible stockholders' equity (annualized)13.51 %13.79 %9.68 %10.04 %(9.33)%
49

Three Months Ended
March 31,
2021
December 31,
2020
September 30,
2020
June 30,
2020
March 31,
2020
(Dollars in Thousands)
Net income (loss), as reported$26,454 $26,663 $18,679 $19,571 $(17,276)
Average total assets$8,714,158 $8,874,467 $9,018,672 $8,869,540 $7,965,826 
Less: Average goodwill and average identified intangible assets, net163,457 163,758 164,072 164,385 164,701 
Average tangible assets$8,550,701 $8,710,709 $8,854,600 $8,705,155 $7,801,125 
Return on average tangible assets (annualized)1.24 %1.22 %0.84 %0.90 %(0.89)%
Average total stockholders' equity$946,482 $937,294 $934,632 $926,239 $946,138 
Less: Average goodwill and average identified intangible assets, net163,457 163,758 164,072 164,385 164,701 
Average tangible stockholders' equity$783,025 $773,536 $770,560 $761,854 $781,437 
Return on average tangible stockholders' equity (annualized)13.51 %13.79 %9.70 %10.28 %(8.84)%

The following table reconciles the Company's tangible equity ratio for the periods indicated:
Three Months Ended
March 31,
2021
December 31,
2020
September 30,
2020
June 30,
2020
March 31,
2020
(Dollars in Thousands)
Total stockholders' equity$945,399 $941,778 $935,558 $926,413 $912,568 
Less: Goodwill and identified intangible assets, net163,347 163,579 163,891 164,203 164,514 
Tangible stockholders' equity$782,052 $778,199 $771,667 $762,210 $748,054 
Total assets$8,559,810 $8,942,424 $9,000,192 $9,069,667 $8,461,591 
Less: Goodwill and identified intangible assets, net163,347 163,579 163,891 164,203 164,514 
Tangible assets$8,396,463 $8,778,845 $8,836,301 $8,905,464 $8,297,077 
Tangible equity ratio9.31 %8.86 %8.73 %8.56 %9.02 %

50

The following table reconciles the Company's tangible book value per share for the periods indicated:
Three Months Ended
March 31,
2021
December 31,
2020
September 30,
2020
June 30,
2020
March 31,
2020
(Dollars in Thousands)
Tangible stockholders' equity$782,052 $778,199 $771,667 $762,210 $748,054 
Common shares issued85,177,172 85,177,172 85,177,172 85,177,172 85,177,172 
Less:
Treasury shares6,534,602 6,525,783 5,629,854 5,859,708 5,862,811 
Unallocated ESOP44,502 51,114 58,227 65,334 72,441 
Unvested restricted stock449,981 458,800 487,318 398,188 395,085 
Common shares outstanding78,148,087