Brookline Bancorp(BRKL) - 2019 Q4 - Annual Report

Financial Performance - Total assets increased to $7,654,634 million in 2019, up from $7,223,081 million in 2018, representing a growth of approximately 6%[383] - Total loans and leases reached $6,521,179 million, with net interest income of $253,300 million, reflecting an increase from $247,699 million in 2018[383] - The net interest margin for 2019 was 3.51%, compared to 3.61% in 2018, indicating a slight decline in profitability from interest-earning assets[384] - Non-interest income increased by $4.6 million, or 18.1%, to $29.8 million in 2019, mainly from a $2.8 million rise in loan level derivative income[408] - Total non-interest expense increased by $2.2 million, or 1.4%, to $157.5 million in 2019, primarily due to a $5.0 million rise in compensation and employee benefits[412] - The efficiency ratio improved to 55.63% in 2019 from 56.88% in 2018, driven by higher net interest and non-interest income[413] Interest Rate Risk - The company faces interest-rate risk due to the mismatch in the duration and repricing dates of its assets and liabilities, which can affect its financial condition[378] - The estimated impact of a 300 basis points increase in market interest rates on the company's net interest income over a twelve-month horizon was a positive 11.5% as of December 31, 2019, compared to 8.0% in 2018[477] - The company's economic value of equity (EVE) sensitivity for a 300 basis points increase in interest rates was 6.0% as of December 31, 2019, up from 2.5% in 2018[480] - The company’s interest-rate sensitivity gap analysis indicates a positive gap, suggesting that during rising interest rates, net interest income is likely to increase[473] - The company’s interest-rate risk position remains modestly asset-sensitive as of December 31, 2019[474] Asset Quality and Provisions - The quality of the company's assets influences earnings, with timely provisions for loan and lease losses necessary based on estimates of probable losses[379] - The allowance for loan and lease losses was $58,871 million, slightly down from $59,154 million in 2018[383] - Provision for credit losses rose by $4.6 million, or 93.6%, to $9.6 million in 2019, primarily due to increased net charge-offs and reserves for loan growth[406] - The total provision for credit losses, including unfunded credit commitments, was $9.6 million in 2019, reflecting a significant increase from $5.0 million in 2018[406] Market Conditions and Stock Performance - The market price of the company's common stock may be volatile, influenced by quarterly operating results and market conditions[153] - Future capital offerings may dilute existing stockholders' holdings and affect the market price of common stock[152] - Changes in tax laws and regulations may adversely impact the company's financial statements, potentially resulting in additional taxes or penalties[151] Acquisitions and Expenses - The company may incur substantial expenses and face risks associated with potential acquisitions of other financial services companies[157] - Merger and acquisition expenses decreased by $2.7 million, or 70.3%, to $1.1 million in 2019 due to the completion of the First Commons Bank acquisition[414] - Total non-interest income decreased by $6.9 million, or 21.6%, to $25.2 million for the year ended December 31, 2018, compared to $32.2 million for the same period in 2017[436] Deposits and Funding - Total deposits increased to $5.8 billion as of December 31, 2019, representing 86.6% of total funding, compared to $5.5 billion, or 85.6% of total funding, as of December 31, 2018[451] - Interest-bearing deposits amounted to $4,586,323 million, with a total interest expense of $69,615 million, yielding an average cost of 1.52%[383] - Cash, cash equivalents, and investment securities available-for-sale totaled $576.8 million, or 7.3% of total assets, as of December 31, 2019, compared to $592.4 million, or 8.0% of total assets, as of December 31, 2018[459]