BROOKLINE BANCORP INC (Form: S-1, Received: 04/10/2002 16:25:28)

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As filed with the Securities and Exchange Commission on April 10, 2002

Registration No. 333-

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

BROOKLINE BANCORP, INC.
(Name of Small Business Issuer in Its Charter)

Delaware	6712	(Applied For)
(State or Jurisdiction of Incorporation or Organization)	(Primary Standard Industrial Classification Code Number)	(I.R.S. Employer Identification No.)

160 Washington Street
Brookline, Massachusetts 02445
(617) 730-3510
(Address and Telephone Number of Principal Executive Offices)

160 Washington Street
Brookline, Massachusetts 02445
(617) 730-3510
(Address of Principal Place of Business or Intended Principal Place of Business)

Richard P. Chapman, Jr.
160 Washington Street
Brookline, Massachusetts 02445
(617) 730-3510
(Name, Address and Telephone Number of Agent for Service)

Copies to:
Eric Luse, Esq.
Robert B. Pomerenk, Esq.
Luse Lehman Gorman Pomerenk & Schick, P.C.
5335 Wisconsin Avenue, N.W., Suite 400
Washington, D.C. 20015

Approximate date of proposed sale to the public:
As soon as practicable after this registration statement becomes effective.

If any of the securities being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415 of the Securities Act of 1933, check the following box: ý

If this Form is filed to register additional shares for an offering pursuant to Rule 462(b) under the Securities Act please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering: o

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering: o

If the delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box: o

CALCULATION OF REGISTRATION FEE


Title of each class of securities to be registered	Amount to be registered	Proposed maximum offering price per share	Proposed maximum aggregate offering price(1)	Amount of registration fee

Common Stock, $0.01 par value per share	33,723,750 shares	$10.00	$337,237,500	$31,026

(1): Estimated solely for the purpose of calculating the registration fee.

The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

PROSPECTUS

BROOKLINE BANCORP, INC.

(Holding Company for Brookline Savings Bank)
Up to 29,325,000 Shares of Common Stock

Brookline Bancorp, Inc. is offering common stock for sale in connection with the conversion of Brookline Bancorp, MHC from the mutual to the stock form of organization. The shares we are offering represent the 57.6% ownership interest in Brookline Bancorp, Inc. now owned by Brookline Bancorp, MHC. The existing publicly held shares of Brookline Bancorp, Inc., which represent the remaining 42.4% interest in Brookline Bancorp, Inc., will be exchanged for new shares of common stock of Brookline Bancorp, Inc. All shares offered for sale are offered at a price of $10.00 per share. Our common stock will continue to trade on the Nasdaq National Market under the symbol "BRKL."

•: If you are or were a customer of Brookline Savings Bank, you may have priority rights to purchase shares.
•: If you are a stockholder of Brookline Bancorp, Inc., your shares will be exchanged for new shares of Brookline Bancorp, Inc. You may purchase additional shares in the offering after priority orders are filled.

OFFERING SUMMARY
Price: $10.00 per Share

	Minimum		Maximum
Number of shares:		21,675,000		29,325,000
Gross offering proceeds:	$	216,750,000	$	293,250,000
Estimated offering expenses:	$	3,281,500	$	4,046,500
Estimated net proceeds:	$	213,468,500	$	289,203,500
Estimated net proceeds per share:	$	9.85	$	9.86

We may sell up to 33,723,750 shares because of regulatory considerations or
changes in market conditions without resoliciting subscribers.

We are offering the common stock for sale on a best efforts basis, subject to certain conditions. Ryan, Beck & Co., LLC will assist us in our selling efforts, but is not required to purchase any of the common stock that is being offered for sale. Purchasers will not pay a commission to purchase common stock in the offering. We will terminate the offering and the exchange of existing shares if we do not sell the minimum number of shares. The offering is expected to terminate at 10:00 a.m., Boston Time, on , 2002. We may extend this termination date without notice to you until , 2002, unless the Office of Thrift Supervision approves a later date. The minimum purchase is 25 shares. Once submitted, orders are irrevocable unless the offering is terminated or extended beyond , 2002. If the offering is extended beyond , 2002, subscribers will have the right to modify or rescind their purchase orders. Funds received prior to completion of the offering will be held in an escrow account at Brookline Savings Bank and will bear interest at our passbook rate.

This investment involves a degree of risk, including the possible loss of principal.
Please read "Risk Factors" beginning on page .

These securities are not deposits or accounts and are not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.

Neither the Securities and Exchange Commission, the Office of Thrift Supervision, nor any state securities regulator has approved or disapproved of these securities or determined if this prospectus is accurate or complete. Any representation to the contrary is a criminal offense.

The date of this prospectus is , 2002

[MAP SHOWING BROOKLINE SAVINGS' MARKET AREA APPEARS HERE]

TABLE OF CONTENTS

		Page
Questions and Answers		1
Summary		5
Selected Consolidated Financial and Other Data of Brookline Bancorp, Inc. and Subsidiaries		13
Risk Factors		15
Forward-Looking Statements		19
How We Intend to Use the Proceeds From the Offering		19
Our Dividend Policy		21
Market For the Common Stock		21
Historical and Pro Forma Regulatory Capital Compliance		23
Capitalization		24
Pro Forma Data		25
Brookline Bancorp, Inc. and Subsidiaries Consolidated Statements of Income		28
Management's Discussion and Analysis of Financial Condition and Results of Operations		29
Business of Brookline Bancorp, Inc. and Brookline Savings Bank		41
Supervision and Regulation		62
Taxation		69
Management of Brookline Bancorp, Inc.		70
Beneficial Ownership of Common Stock		81
Subscriptions by Executive Officers and Directors		82
The Conversion		83
Comparison of Stockholders' Rights		102
Restrictions on Acquisition of Brookline Bancorp, Inc.		108
Description of Capital Stock of Brookline Bancorp, Inc. Following the Conversion		109
Transfer Agent		110
Experts		111
Legal Matters		111
Additional Information		111
Index to Consolidated Finaancial Statements		F-1

QUESTIONS AND ANSWERS

Q:

How many shares of common stock are being offered, and at what price per share?

A:

Brookline Bancorp, Inc. is offering between 21,675,000 and 29,325,000 shares of common stock at a subscription price of $10.00 per share. We may increase the number of shares offered up to 33,723,750 shares under certain circumstances. The amount of common stock being offered is based upon an independent appraisal of the market value of Brookline Bancorp, Inc., assuming completion of the mutual-to-stock conversion and offering described in this document.

Q:

Who may purchase common stock in the subscription offering?

A:

Rights to subscribe for common stock have been granted under the plan of conversion to the following persons in the following descending order of priority:

(1): Brookline Savings Bank depositors with $50.00 or more on deposit as of December 31, 2000;
(2): Brookline Savings Bank's tax-qualified employee stock benefit plans, including its employee stock ownership plan, but only if necessary to complete the offering at the minimum of the offering range;
(3): Brookline Savings Bank depositors with $50.00 or more on deposit as of March 31, 2002; and
(4): Brookline Savings Bank depositors as of , 2002.

Q:: Who may purchase common stock in the community offering?
A.: Any shares that are not purchased in the subscription offering may be available for purchase by the public in a community offering. The community offering is expected to be conducted at the same time as the subscription offering. In the community offering, we will give a first preference to public stockholders of Brookline Bancorp, Inc. as of , 2002, and a second preference to natural residents of the Massachusetts Counties of Middlesex, Norfolk and Suffolk.
Q:: Will any commission be charged for common stock I purchase in the offering?
A:: No.
Q:: How do I purchase common stock?
A:: First, you should read this document. Then, complete and return the enclosed stock order form, together with your payment. You may submit stock order forms in three ways: you may send the stock order form by regular mail, using the reply envelope provided; you may send the stock order form by overnight delivery to the address indicated on the back of the stock order form; or you may hand-deliver the stock order form to our stock information center, located at 300 Fifth Avenue, Waltham, Massachusetts. Stock order forms may not be delivered to the branch offices of Brookline Savings Bank.
Q:: How may I pay for the common stock?
A:: Full payment for the common stock must accompany your stock order form at the time it is submitted. You may pay for your shares by personal check, bank check or money order payable to Brookline Bancorp, Inc., or by authorizing a withdrawal from the types of Brookline Savings Bank deposit accounts designated on the stock order form (we will waive any penalty for early withdrawal of certificate of deposit accounts). Authorized withdrawals will not be made until the completion of the offering, but the designated funds will not be available to you in the interim. If you wish to use IRA funds, see the discussion below. Funds authorized to be withdrawn from Brookline Savings Bank deposit account(s) must be available in your account at the time you submit your stock order form. Checks and money orders will be cashed upon receipt, so funds must be available in your account.

Q.: May I obtain a loan from Brookline Savings Bank to pay for my common stock?
A.: No. Federal law prohibits Brookline Savings Bank from loaning funds to purchase common stock in the offering. However, other financial institutions may make such a loan.
Q:: May I subscribe for shares using funds in my Individual Retirement Account at Brookline Savings Bank or elsewhere?
A:: Yes. However, common stock must be held in a self-directed retirement account. By regulation, Brookline Savings Bank's IRAs are not self-directed, so they cannot be invested in stock. If you wish to use some or all of the funds in your Brookline Savings Bank IRA, the applicable funds must be transferred to a self-directed account maintained by an independent trustee, such as a brokerage firm. If you do not have such an account, you will need to establish one before placing your stock order. An annual administrative fee may be payable to the independent trustee. Because individual circumstances differ and processing of retirement fund orders takes additional time, we recommend that you contact the stock information center promptly, preferably at least two weeks before the end of the offering period, for assistance with purchases using your IRA or other retirement account that you may have. Whether you may use such funds for the purchase of shares in the stock offering may depend on timing constraints and, possibly, limitations imposed by the institution where the funds are held.
Q:: May I change my mind after I place an order to subscribe for common stock?
A:: No. After your stock order form and payment are received, you may not cancel or modify your order.
Q:: Will I receive interest on my subscription payment?
A:: Yes. Payments by check or money order received with the stock order form will be cashed and placed in an interest-bearing escrow account at Brookline Savings Bank, and will earn interest at our passbook savings rate until the conclusion of the offering. At that time, a check for the accrued interest will be mailed to you. Subscribers who elect to pay by deposit account withdrawal will continue to accrue interest in the account at its contractual rate until the funds are withdrawn at the conclusion of the offering.
Q:: How many shares may I buy?
A:: The minimum order is 25 shares, or $250. There are maximum purchase limitations and there is a stock ownership limitation that applies to current Brookline Bancorp, Inc. stockholders. These limitations are described on the stock order form and in the section of this document entitled "The Conversion."
Q:: What is the deadline for placing an order?
A:: Orders in the subscription offering and community offering must be received (not postmarked) by no later than 10:00 a.m. Boston Time, on , 2002.
Q:: How can I buy or sell Brookline Bancorp, Inc. common stock in the future?
A:: Existing publicly held shares of Brookline Bancorp, Inc. common stock trade on the Nasdaq National Market under the symbol "BRKL." Upon completion of the conversion and offering, the new shares of common stock of Brookline Bancorp, Inc. will replace existing shares and will be traded on the Nasdaq National Market. For a period of 20 trading days following completion of the offering, our symbol will be "BRKLD." Thereafter the symbol will be "BRKL." You will be able to buy or sell shares through a broker. As soon as possible after the offering, investors will be mailed stock certificates. Although the common stock will have begun trading, brokerage firms may

require that you have received your stock certificate before selling shares that you purchased in the offering.

Q:: Will dividends be paid on the common stock?
A:: Following the offering, Brookline Bancorp, Inc. intends to continue to pay a cash dividend. We expect to pay quarterly dividends of between $0.34 and $0.48 per share, depending on how many shares we sell in the offering. At the midpoint of the offering range, the annual dividend is expected to be $0.42 per share. There can be no assurance that dividends will be paid or that they will not be subsequently reduced or eliminated.
Q:: As an eligible depositor of Brookline Savings Bank placing an order in the subscription offering, may I register the shares in someone else's name?
A:: No. To preserve your purchase priority in the subscription offering, you must register the shares only in the name or names of eligible purchasers at the applicable date of eligibility. You may not add the names of others who were not eligible to purchase common stock in the subscription offering on the applicable date of eligibility.
Q:: I am eligible to purchase shares in the subscription offering, but I do not want to become a stockholder. May I allow someone else to use my stock order form to take advantage of my priority?
A:: No. Transferring your subscription rights to someone else is illegal under Federal law. We intend to take legal action against anyone who attempts to transfer subscription rights. If anyone offers to give you money to buy common stock in your name in exchange for later transferring the common stock, or requests to share in cash proceeds upon your future sale of Brookline Bancorp, Inc. stock, please inform our stock information center at the number below.
Q:: Will the conversion and offering have any effect on my Brookline Savings Bank deposit or loan accounts?
A:: No. The amount, interest rate and other terms of deposit accounts will not change. Deposit accounts will continue to be insured by the Federal Deposit Insurance Corporation. Likewise, the loan accounts and rights of borrowers will not be affected.
Q:: Will the common stock be insured by the Federal Deposit Insurance Corporation?
A:: No. Unlike deposit accounts at Brookline Savings Bank, common stock cannot be insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The trading price of common stock will fluctuate, so an investment in the common stock is subject to investment risk, including loss of principal invested. There can be no assurance that you will be able to sell your Brookline Bancorp, Inc. shares at or above the $10.00 per share purchase price in the offering.
Q:: By placing an order, am I guaranteed to receive all the shares I requested?
A:: No. If there is an oversubscription, shares will be allocated as described in the prospectus section entitled "The Conversion." If we do not fill an order (either wholly or in part), funds submitted but not used will be refunded, with interest, and deposit account withdrawal authorizations will be cancelled to the extent not used.
Q:: Can my Brookline Savings Bank local branch assist me with purchasing shares or completing the stock order form?
A:: No. Our branch personnel may not, by law, assist with investment-related questions about the offering. We have established a stock information center staffed by registered representatives who may assist you. You may call the stock information center at the number below.

ADDITIONAL QUESTIONS?
Please call our Stock Information Center
(800) -
from 9:00 a.m. to 4:00 p.m., Boston Time,
Monday through Friday.

The Stock Information Center is located at

TO ENSURE THAT EACH PERSON RECEIVES A PROSPECTUS AT LEAST 48 HOURS PRIOR TO THE EXPIRATION DATE OF , 2002 IN ACCORDANCE WITH FEDERAL LAW, NO PROSPECTUS WILL BE MAILED ANY LATER THAN FIVE DAYS PRIOR TO , 2002 OR HAND-DELIVERED ANY LATER THAN TWO DAYS PRIOR TO , 2002.

SUMMARY

The following summary explains the significant aspects of the conversion, the offering and the exchange of existing shares of Brookline Bancorp, Inc. common stock for new shares of Brookline Bancorp, Inc. common stock. It may not contain all the information that is important to you. For additional information, you should read this entire document carefully, including the consolidated financial statements and the notes to the consolidated financial statements.

The Companies

Brookline Bancorp, MHC

Brookline Bancorp, MHC is the federally chartered mutual holding company of Brookline Bancorp, Inc. Brookline Bancorp MHC's principal business activity is the ownership of 15,420,350 shares, or 57.6% of the outstanding common stock of Brookline Bancorp, Inc. At the conclusion of the mutual-to-stock conversion, Brookline Bancorp, MHC will no longer exist.

Brookline Bancorp, Inc.

Brookline Bancorp, Inc. is a federally chartered stock holding company that owns all of the outstanding common stock of Brookline Savings Bank. As of December 31, 2001, Brookline Bancorp, Inc. had 26,767,549 issued and outstanding shares of common stock. Brookline Bancorp, MHC owns 15,420,350 shares of Brookline Bancorp, Inc.'s outstanding common stock. The remaining 11,347,199 shares are held by the public. At December 31, 2001, Brookline Bancorp, Inc. had consolidated assets of $1.1 billion, deposits of $621.0 million and stockholders' equity of $285.4 million. Following the conversion, Brookline Bancorp, Inc. will cease to exist, but will be succeeded by a new Delaware corporation with the same name.

Brookline Savings Bank

Brookline Savings Bank is a federally chartered community bank headquartered in Brookline, Massachusetts. Brookline Savings Bank was established in 1871 as a Massachusetts chartered, mutual savings bank. We converted to a federal savings association in July 2001. Our principal business activity is originating multi-family and commercial real estate loans, single-family mortgage loans and consumer loans. We also offer a range of deposit accounts, internet banking and other financial services. Our deposits are insured by the Federal Deposit Insurance Corporation up to the maximum amount permitted by law. We operate through our five full-service banking offices in Brookline, Massachusetts and one in Newton, Massachusetts.

Our Organizational Structure

In 1998, Brookline Savings Bank's mutual predecessor reorganized into the mutual holding company form of organization. As a part of the mutual holding company reorganization, Brookline Bancorp, Inc. sold a minority of its common stock to our customers in a subscription offering. The majority of our outstanding shares were retained by Brookline Bancorp, MHC. Brookline Bancorp, MHC is a mutual holding company that has no stockholders. Brookline Bancorp, Inc. owns 100% of the outstanding shares of Brookline Savings Bank.

Pursuant to the terms of our plan of conversion and reorganization, we will convert from the mutual holding company to the fully-public form of corporate structure. As part of the conversion, we are offering for sale in a subscription offering and a community offering the majority ownership interest of Brookline Bancorp, Inc. that is currently held by Brookline Bancorp, MHC. Upon the completion of the conversion and offering, Brookline Bancorp, MHC will cease to exist, and we will complete the transition from partial to full public ownership. At the conclusion of the conversion, existing public

stockholders of Brookline Bancorp, Inc. will receive new shares of common stock in exchange for their existing shares of Brookline Bancorp, Inc. Additional shares of common stock will be issued to purchasers in the offering.

The following chart shows our current ownership structure, which is commonly referred to as the "two-tier" mutual holding company structure:

After the conversion and offering are completed, our ownership structure will be as follows:

Business Strategy

Our business strategy is to grow and enhance our profitability by:

•: Acquiring other financial institutions or branches;
•: Increasing our lending capabilities, especially multi-family and commercial real estate lending;
•: Increasing our retail deposit generating capabilities through branch expansion;
•: Emphasizing retail and small business banking, including business development and new products and services oriented to consumers and small business customers;
•: Maintaining high asset quality; and
•: Continuing to emphasize operating efficiencies and cost control.

Reasons for the Conversion

The primary reasons for the conversion are to facilitate acquisitions of other financial institutions, support internal growth, improve our overall competitive position and enhance profitability.

As a fully-converted stock holding company, we will have greater flexibility in structuring mergers and acquisitions, including the form of consideration paid in a transaction. Our current mutual holding company structure, by its nature, limits our ability to offer our common stock as consideration in a merger or acquisition. Potential sellers often want stock for at least part of the purchase price. Our new stock holding company structure will enhance our ability to compete with other bidders when acquisition opportunities arise by enabling us to offer stock or cash consideration.

The additional capital raised in the conversion also will support increased lending, expansion of our retail banking franchise, and introduction of new products and services.

Terms of the Conversion and Offering

Pursuant to our plan of conversion, our organization will convert from a partially public to a fully public form of holding company structure. In connection with the conversion, we are selling in the offering common stock representing the 57.6% ownership interest in Brookline Bancorp, Inc. now owned by Brookline Bancorp, MHC. We are selling between 21,675,000 and 29,325,000 shares of common stock to qualifying depositors and to the public to the extent shares remain available. Our tax-qualified employee plans will not purchase common stock in the offering unless such purchase is necessary to complete the offering at the minimum of the offering range. The number of shares to be sold may be increased up to 33,723,750 as a result of strong demand for the shares in the offering or positive changes in the market for financial institution stocks. Unless the number of shares to be sold is increased to more than 33,723,750 or decreased to less than 21,675,000, you will not have the opportunity to change or cancel your stock order. The offering price is $10.00 per share. Ryan, Beck & Co., LLC, our marketing advisor in the offering, will use its best efforts to assist us in selling our stock. Ryan, Beck & Co., LLC is not obligated to purchase any shares in the offering.

Persons Who May Order Stock in the Offering

Under the Plan of Conversion, we are offering the shares of common stock of Brookline Bancorp, Inc. in a "subscription offering" in the following descending order of priority:

(1): First, depositors with accounts at Brookline Savings Bank with aggregate balances of at least $50 on December 31, 2000.
(2): Second, Brookline Bancorp, Inc.'s tax-qualified employee stock benefit plans, including the employee stock ownership plan, but only if necessary to complete the offering at the minimum of the offering range.
(3): Third, depositors with accounts at Brookline Savings Bank with aggregate balances of at least $50 on March 31, 2002.
(4): Fourth, depositors of Brookline Savings Bank as of , 2002.

The shares of common stock not purchased in the subscription offering will be offered in a "direct community offering," with a preference given first to public stockholders of Brookline Bancorp, Inc. as of , 2002, and then to natural persons residing in the Massachusetts counties of Middlesex, Norfolk and Suffolk. The direct community offering may begin concurrently with or promptly after the subscription offering. We also may offer shares of common stock not purchased in the subscription offering or community offering through a "syndicated community offering" managed by Ryan, Beck & Co., LLC. We have the right to accept or reject, in our sole discretion, orders received in the direct community offering or syndicated community offering.

How We Determined the Offering Range and the $10.00 Per Share Stock Price

The amount of common stock we are offering is based on an independent appraisal of the estimated market value of Brookline Bancorp, Inc., assuming the conversion and offering are completed. RP Financial, LC, the independent appraiser, has estimated that, as of March 29, 2002, this market value ranged from $376.2 million to $509.0 million, with a midpoint of $442.6 million. Based on this valuation, the approximate 57.6% ownership interest of Brookline Bancorp, MHC being sold in the offering and the $10.00 per share price, the number of shares of common stock being offered for sale by Brookline Bancorp, Inc. will range from 21,675,000 shares to 29,325,000 shares. The $10.00 per share price was selected primarily because it is the price most commonly used in mutual-to-stock conversions of financial institutions. The appraisal was based in part on Brookline Bancorp, Inc.'s financial condition and results of operations, the effect of the additional capital raised by the sale of common stock in the offering, and an analysis of a peer group of publicly-traded savings bank and thrift holding companies that RP Financial, LC considered comparable to Brookline Bancorp, Inc.

The independent appraisal will be updated prior to the completion of the conversion. If the market value changes to either below $376.2 million or above $585.4 million, subscribers will be notified and provided with the opportunity to modify or cancel their orders.

The Exchange of Existing Shares of Brookline Bancorp, Inc. Common Stock

If you are now a stockholder of Brookline Bancorp, Inc., your existing shares will be cancelled and exchanged for new shares of Brookline Bancorp, Inc. The number of shares you receive will be based on an exchange ratio determined as of the closing of the conversion. The actual number of shares you receive will depend upon the number of shares we sell in our offering, which in turn will depend upon the final appraised value of Brookline Bancorp, Inc. The following table shows how the exchange ratio will adjust, based on the number of shares sold in our offering. The table also shows how many shares a hypothetical owner of Brookline Bancorp, Inc. common stock would receive in the exchange, based on the number of shares sold in the offering.

	New Shares to be Sold in This Offering			New Shares to be Exchanged for Existing Shares of Brookline Bancorp, Inc.
	New Shares to be Sold in This Offering						Total Shares of Common Stock to be Outstanding	Exchange Ratio	New Shares to be Received for 100 Existing Shares
	Amount	Percent		Amount	Percent		Total Shares of Common Stock to be Outstanding	Exchange Ratio	New Shares to be Received for 100 Existing Shares
Minimum	21,675,000	57.6	%	15,949,738	42.4	%	37,624,738	1.4056	140.56
Midpoint	25,500,000	57.6	%	18,764,397	42.4	%	44,264,397	1.6537	165.37
Maximum	29,325,000	57.6	%	21,579,057	42.4	%	50,904,057	1.9017	190.17
15% above Maximum	33,723,750	57.6	%	24,815,916	42.4	%	58,539,666	2.1870	218.70

If you hold shares of Brookline Bancorp, Inc. in "street name," you do not need to take any action to exchange the shares. If you hold Brookline Bancorp, Inc. stock certificates after the conversion and offering are completed, you will receive a transmittal form with instructions to surrender stock certificates. New certificates of Brookline Bancorp, Inc. common stock will be mailed within five business days after the exchange agent receives properly executed transmittal forms and certificates.

No fractional shares of Brookline Bancorp, Inc. common stock will be issued to any public stockholder of Brookline Bancorp, Inc. upon consummation of the conversion. For each fractional share that would otherwise be issued, Brookline Bancorp, Inc. will pay in cash an amount equal to the product obtained by multiplying the fractional share interest to which the holder would otherwise be entitled by the $10.00 per share subscription price. Under federal regulations, current stockholders of Brookline Bancorp, Inc. do not have dissenters' rights or appraisal rights in connection with the conversion.

Limits on How Much Common Stock You May Purchase

The minimum number of shares that may be purchased is 25.

If you are not now a Brookline Bancorp, Inc. stockholder—

No individual may purchase more than 200,000 shares. If any of the following persons purchase stock, their purchases when combined with your purchases cannot exceed 500,000 shares:

•: your spouse or relatives of you or your spouse living in your house;
•: companies, trusts or other entities in which you have an interest or hold a position; or
•: other persons who may be acting in concert with you.

If you are now a Brookline Bancorp, Inc. stockholder—

In addition to the above purchase limitations, there is an ownership limitation. Shares that you purchase in the offering individually and together with persons acting in concert with you as described above, plus new shares you and they receive in the exchange for existing Brookline Bancorp, Inc. common stock, may not exceed 5% of the shares of common stock outstanding immediately following the conversion. Subject to Office of Thrift Supervision approval, we may increase or decrease the purchase and ownership limitations at any time.

How You May Purchase Common Stock

In the subscription offering and direct community offering, you may pay for your shares only by:

(1): personal check, bank check or money order; or
(2): authorizing us to withdraw funds from Brookline Savings Bank deposit accounts designated on the stock order form.

Brookline Savings Bank is not permitted to lend funds to anyone for the purpose of purchasing our common stock in the offering.

You can subscribe for shares of common stock in the offering by delivering a signed and completed original stock order form, together with full payment, provided that we receive the stock order form before the end of the offering. We will pay interest at Brookline Savings Bank's passbook rate, from the date funds are received until completion or termination of the conversion. Withdrawals from certificates of deposit may be made without incurring an early withdrawal penalty. All funds authorized for withdrawal from deposit accounts with Brookline Savings Bank must be in the accounts at the time the stock order is received. However, funds will not be withdrawn from the accounts until the completion of the offering and will earn interest at the applicable deposit account rate until the completion of the offering. A hold will be placed on those funds when your stock order is received, making the designated funds unavailable to you. After we receive an order, the order cannot be withdrawn or changed, except with our consent.

How We Intend to Use the Proceeds From the Offering

We estimate net proceeds will be between $213.5 million and $289.2 million. Brookline Bancorp, Inc. intends to retain approximately 50% of the net proceeds (between $106.7 million and $144.6 million). Approximately $106.7 million to $144.6 million of the net proceeds will be invested in Brookline Savings Bank.

The net proceeds will be used for general corporate purposes. Brookline Bancorp, Inc. may use the funds to pay cash dividends, repurchase shares of common stock, and fund a stock recognition and retention plan. Funds invested in Brookline Savings Bank will be used to support increased lending and to offer new products and banking services. The net proceeds also may be used for future business expansion through acquisitions or establishing new branches. We do not now have any specific acquisition or expansion plans. Initially, the net proceeds will be invested in short-term investments and investment-grade debt obligations, collateralized mortgage obligations and mortgage-backed securities.

A portion of the net proceeds also may be used to provide a loan to the employee stock ownership plan to fund the purchase of common stock if the employee stock ownership plan purchases common stock in the offering. The employee stock ownership plan will purchase common stock in the offering only if necessary to complete the offering at the minimum of the offering range.

You May Not Sell or Transfer Your Subscription Rights

If you order stock in the subscription offering, you will be required to state that you are purchasing the stock for yourself and that you have no agreement or understanding to sell or transfer your subscription rights. We intend to take legal action, including reporting persons to federal or state regulatory agencies, against anyone who we believe sells or gives away their subscription rights. We will not accept your order if we have reason to believe that you sold or transferred your subscription rights. In addition, you may not add the names of others for joint stock registration unless they were eligible to purchase common stock in the subscription offering on the applicable date of eligibility.

Deadlines for Orders of Common Stock

If you wish to purchase shares, a properly completed stock order form, together with payment for the shares, must be received by Brookline Bancorp, Inc. no later than 10:00 a.m., Boston Time, on , 2002, unless we extend this deadline. You may submit your order form by mail using the return envelope provided, by overnight courier to the indicated address on the order form, or by bringing your order form to the stock information center. Stock order forms may not be delivered to our full service branch offices. Once submitted, your order is irrevocable unless the offering is terminated or extended beyond , 2002.

Termination of the Offering

The subscription offering will terminate at 10:00 a.m., Boston Time, on , 2002. We expect that the community offering will terminate at the same time. We may extend this expiration date without notice to you, until , 2002, unless regulators approve a later date. If the subscription offering and/or community offerings extend beyond , 2002, we will be required to resolicit subscriptions before proceeding with the offerings.

Steps We May Take if We do Not Receive Orders for the Minimum Number of Shares

If we do not receive orders for at least 21,675,000 shares of common stock, we may take several steps in order to sell the minimum number of shares in the offering range. Specifically, we may increase the purchase limitations and we may seek regulatory approval to extend the offering beyond the , 2002 expiration date, provided that any such extension will require us to resolicit subscriptions received in the offering.

Purchases by Officers and Directors

We expect our directors and executive officers, together with their families, to subscribe for shares, which equals approximately % of the shares sold at the midpoint of the offering range. The purchase price paid by them will be the same $10.00 per share price paid by all other persons who purchase shares in the offering. Following the conversion, our directors and executive officers, together with their associates, are expected to own shares of common stock, or % of our outstanding common stock if shares are sold at the midpoint of the offering range.

Benefits to Management and Potential Dilution to Stockholders Resulting from the Conversion

We intend to implement two stock-based incentive plans no earlier than six months after the conversion, and stockholder approval of such plans would be required. The stock recognition and retention plan is a restricted stock plan that would reserve an amount equal to 4% of the shares sold in the offering, or 1,173,000 shares at the maximum of the offering range, for awards to key employees and directors, at no cost to the recipients. If the shares awarded under the stock recognition and retention plan come from authorized but unissued shares, stockholders would experience dilution of approximately 2.3% in their ownership interest in Brookline Bancorp, Inc. The second plan would be a stock option plan, and would reserve an amount equal to 10% of the shares sold in the offering, or up to 2,932,500 shares at the maximum of the offering range, for key employees and directors upon their exercise. If the shares issued upon the exercise of options come from authorized but unissued shares, stockholders would experience dilution of approximately 5.4% in their ownership interest in Brookline Bancorp, Inc. Awards made under these plans would be subject to vesting over a period of years.

We also will convert options previously awarded under our current stock option plan into options to purchase Brookline Bancorp, Inc. common stock, with the number and exercise price to be adjusted, based on the exchange ratio. The term and vesting period of the previously awarded options will remain unchanged.

The following table summarizes the number of shares and aggregate dollar value of grants that are expected under the new stock recognition and retention plan and the new stock option plan as a result of the conversion. A portion of the stock grants shown in the table below may be made to non-management employees.

								Value of Grants(1)
		Number of Shares to be Granted
				As a Percentage of Common Stock to be Sold in the Offering		Dilution Resulting From Issuance of Shares for Stock Benefit Plans
		At Minimum of Offering Range	At Maximum of Offering Range	As a Percentage of Common Stock to be Sold in the Offering				At Minimum of Offering Range		At Maximum of Offering Range
Recognition and retention plan		867,000	1,173,000	4	%	2.3	%	$	8,670,000	$	11,173,000
Stock option plan		2,167,500	2,932,500	10	%	5.4	%		—		—

	Total	3,034,500	4,105,500	14	%	7.5	%	$	8,670,000	$	11,173,000

(1): The actual value of restricted stock grants will be determined based on their fair value as of the date grants are made. For purposes of this table, fair value is assumed to be the same as the offering price of $10.00 per share. No value is given for options because their exercise price will be equal to the fair market value of the common stock on the day the options are granted. As a result, value can be received under an option only if the market price of the common stock increases after the option grant.

Our employee stock ownership plan will not purchase any shares in the offering unless such purchase is necessary to complete the offering at the minimum of the offering range.

Market for Common Stock

Existing publicly held shares of our common stock trade on the Nasdaq National Market under the symbol "BRKL." Upon completion of the conversion, the new shares of common stock of Brookline Bancorp, Inc. will replace existing shares and will be traded on the Nasdaq National Market. For a period of 20 trading days following completion of our offering, our symbol will be "BRKLD."

Thereafter it will be "BRKL." Ryan, Beck & Co., LLC currently intends to remain a market maker in the common stock and will assist us in obtaining additional market makers.

Our Dividend Policy

Brookline Bancorp, Inc. currently pays a cash dividend of $0.16 per share per quarter, or $0.64 per share per year. After the conversion, we intend to continue to pay cash dividends on a quarterly basis. We expect such dividends to equal $0.48, $0.42, $0.38 and $0.34 per share per year at the minimum, midpoint, maximum and adjusted maximum of the offering range, respectively, which represents an annual dividend yield of 4.8%, 4.2%, 3.8% and 3.4%, at the minimum, midpoint, maximum and adjusted maximum of the offering range, respectively, based upon a price of $10.00 per share. The amount of dividends that we intend to pay after the conversion will preserve or increase the per share dividend amount, adjusted to reflect the exchange ratio that Brookline Bancorp, Inc. stockholders currently receive. The dividend rate and the continued payment of dividends will depend on a number of factors, including our capital requirements, our financial condition and results of operations, tax considerations, statutory and regulatory limitations, and general economic conditions. No assurance can be given that we will continue to pay dividends or that they will not be reduced in the future.

Tax Consequences

The conversion will not be a taxable transaction to Brookline Bancorp, MHC, Brookline Bancorp, Inc., Brookline Savings Bank, existing stockholders of Brookline Bancorp, Inc., or persons eligible to subscribe in the offering, with respect to federal or state income tax.

Conditions to Completion of the Conversion

We cannot complete our conversion and related offering unless:

•: The plan of conversion is approved by at least a majority of votes eligible to be cast by members of Brookline Bancorp, MHC (depositors of Brookline Savings Bank);
•: The plan of conversion is approved by the holder of at least two-thirds of the outstanding shares of Brookline Bancorp, Inc. common stock;
•: The plan of conversion is approved by at least a majority of the votes cast by stockholders of Brookline Bancorp, Inc. common stock, not including those shares held by Brookline Bancorp, MHC (if required by the Office of Thrift Supervision);
•: We sell at least the minimum number of shares offered; and
•: We receive the final approval of the Office of Thrift Supervision to complete the conversion and offering.

Brookline Bancorp, MHC intends to vote its 57.6% ownership interest in favor of the conversion. In addition, as of , 2002, directors and executive officers of Brookline Bancorp, Inc. and their associates owned shares of Brookline Bancorp, Inc., or 2.6% of the outstanding shares. They intend to vote those shares in favor of the plan of conversion.

Additional Information

If you have any questions regarding the conversion, please call the stock information center at ( ) - , Monday through Friday between 9 a.m. and 4 p.m., Boston Time.

SELECTED CONSOLIDATED FINANCIAL AND OTHER DATA OF
BROOKLINE BANCORP, INC. AND SUBSIDIARIES

The following tables set forth selected consolidated historical financial and other data of Brookline Bancorp, Inc. for the years and at the dates indicated. On March 24, 1998, Brookline Savings Bank was reorganized from a mutual savings bank into a mutual holding company structure. Prior to that date, Brookline Bancorp, Inc. had no significant assets, liabilities or operations and, accordingly, the financial and other data prior to that date represents the consolidated financial condition and results of operations of Brookline Savings Bank. The information at December 31, 2001 and 2000 and for the years ended December 31, 2001, 2000 and 1999 is derived in part from and should be read together with the audited consolidated financial statements and notes thereto of Brookline Bancorp, Inc. beginning at page F-2 of this prospectus. The information at December 31, 1999, 1998 and 1997 and for the years ended December 31, 1998 and 1997 was derived in part from audited consolidated financial statements which are not included in this prospectus.

		At December 31,
		2001		2000		1999		1998		1997
		(In Thousands, Except Per Share Amounts)
Selected Financial Condition Data(1):
Total assets		$	1,099,596	$	1,036,150	$	907,334	$	879,027	$	701,119
Loans, excluding money market loan participations			828,360		716,559		635,556		548,558		472,412
Money market loan participations			6,000		28,250		15,400		44,300		24,000
Allowance for loan losses			15,301		14,315		13,874		13,094		12,463
Debt securities:
	Available for sale		146,238		125,219		100,089		102,934		89,620
	Held to maturity		9,558		50,447		103,434		121,390		65,444
Marketable equity securities			17,187		24,142		28,186		30,595		28,017
Deposits			620,920		608,621		512,136		489,370		482,304
Borrowed funds			178,130		133,400		108,800		94,350		69,265
Stockholders' equity			285,445		282,585		274,800		278,222		132,757
Net unrealized gain on securities available for sale, net of taxes, included in stockholders' equity			6,720		6,244		7,759		14,416		13,739
Non-performing loans			140		—		—		332		803
Non-performing assets			1,580		—		707		2,272		3,176
Book value per common share			10.66		10.29		9.76		9.60		NA
Tangible book value per common share			10.66		10.29		9.76		9.60		NA

		Year Ended December 31,
		2001			2000			1999			1998			1997
		(In Thousands, Except Per Share Amounts)
Selected Operating Data(1):
Interest income		$	75,960		$	71,560		$	64,809		$	61,419		$	54,125
Interest expense			32,904			30,572			27,162			26,160			25,858
	Net interest income		43,056			40,988			37,647			35,259			28,267
Provision for loan losses			974			427			450			300			—
	Net interest income after provision for loan losses		42,082			40,561			37,197			34,959			28,267
Gains on sales of securities, net			3,540			8,253			7,437			2,843			74
Other real estate owned income, net			—			172			711			251			238
Gain from termination of pension plan			3,667			—			—			—			—
Other non-interest income			2,091			1,469			966			1,111			853
Recognition and retention plan expense			(167	)		(1,246	)		(3,593	)		—			—
Internet bank start-up expense			—			(746	)		(675	)		—			—
Restructuring charge relating to internet bank			(3,927	)		—			—			—			—
Other non-interest expense			(16,721	)		(14,831	)		(9,890	)		(9,181	)		(8,374	)

	Income before income taxes		30,565			33,632			32,153			29,983			21,058
Provision for income taxes			11,231			11,998			11,362			10,831			7,327

	Net income	$	19,334		$	21,634		$	20,791		$	19,152		$	13,731

Income per common share:
	Basic	$	0.72		$	0.80		$	0.74			NM			NA
	Diluted		0.71			0.80			0.74			NM			NA
Cash dividends paid per share			0.46			0.24			0.21			0.10			NA

(1): Financial information at December 31, 2000 and 1999 and for the years ended December 31, 2001, 2000 and 1999 includes information related to Lighthouse Bank, an internet bank that commenced operations in 2000 and was merged into Brookline Savings Bank in July 2001. See notes 18 and 19 of the notes to the consolidated financial statements.

NA—Not Applicable

NM—Not Meaningful. Earnings per share is not presented for the period from March 24, 1998 (the date of conversion to stock ownership) through December 31, 1998 as the earnings per share calculation for that period is not meaningful. Earnings per share is not presented for the periods prior to the conversion to stock form since no stock was outstanding.

		At and For the Year Ended December 31,
		2001			2000			1999			1998			1997
					(Dollars in Thousands)
Selected Performance Ratios:
Return on average assets (ratio of net income to average total assets)			1.80	%		2.29	%		2.31	%		2.33	%		2.02	%
Return on average stockholders' equity (ratio of net income to average stockholders' equity):
	Exclusive of net unrealized gains on securities available for sale, net of income taxes		6.89			7.99			7.81			8.36			12.21
	Inclusive of net unrealized gains on securities available for sale, net of income taxes		6.74			7.83			7.47			7.88			11.19
Interest rate spread during the period(1)(2)			2.83			2.95			2.69			2.76			3.08
Net interest margin during the period(1)(3)			4.10			4.43			4.21			4.28			4.09
Average interest-earning assets to average interest-bearing liabilities			140.56			145.01			150.31			147.60			126.12
Efficiency ratio(4)			28.90			25.63			25.15			25.07			28.45
Non-interest expenses to average assets(5)			1.56			1.65			1.17			1.11			1.23
Dividend payout ratio (dividends declared per share divided by net income per share)(6)			63.89			30.00			28.38			NM			NA
Capital Ratios:
Stockholders' equity to total assets at end of period			25.96	%		27.27	%		30.29	%		31.65	%		18.94	%
Tier 1 core capital ratio at end of period(7)			21.75			22.37			24.57			25.86			17.82
Asset Quality Ratios:
Non-performing assets to total assets at end of period			0.14	%		—	%		0.08	%		0.26	%		0.45	%
Non-performing loans to total loans at end of period			0.02			—			—			0.06			0.16
Allowance for loan losses to total loans at end of period			1.83			1.92			2.13			2.21			2.51
Allowance for loan losses to total non-performing loans at end of period (8)			NM			NM			NM			NM			NM
Ratio of net charge-offs (recoveries) during the period to average loans outstanding during the period			—			—			(0.05	)		(0.06	)		(0.03	)
Office and Deposit Data:
Number of full-service offices at end of period			6			6			5			5			5
Average deposits per branch at end of period		$	103,487		$	101,437		$	102,427		$	97,874		$	96,461

(1): Calculated on a fully-taxable equivalent basis.
(2): Interest rate spread represents the difference between the weighted average yield on average interest-earning assets and the weighted average cost of average interest-bearing liabilities.
(3): Net interest margin represents net interest income as a percent of average interest-earning assets.
(4): Represents the ratio of non-interest expenses (exclusive of restructuring charge and recognition and retention plan expense) divided by the sum of net interest income and non-interest income (exclusive of gains on sales of securities). Lighthouse Bank's income and expenses are excluded.
(5): Represents the ratio of non-interest expenses (exclusive of restructuring charge and recognition and retention plan expenses) divided by total average assets.
(6): Not presented for the year ended December 31, 1998 since dividends were paid only in the last two quarters of 1998. Conversion to stock ownership occurred on March 24, 1998.
(7): This regulatory ratio relates only to Brookline Savings Bank.
(8): NM = Not meaningful. Exceeds 1,000% at end of each period.

RISK FACTORS

You should consider carefully the following risk factors in evaluating an investment in the common stock.

The Future Price of the Common Stock May be Less Than the Purchase Price in the Offering.

We cannot assure you that if you purchase common stock in the offering you will be able to sell it later at or above the purchase price in the offering. The final aggregate purchase price of the common stock in the conversion will be based on an independent appraisal. The appraisal is not intended, and should not be construed, as a recommendation of any kind as to the advisability of purchasing shares of common stock. The valuation is based on estimates and projections of a number of matters, all of which are subject to change from time to time.

Our Commercial Real Estate and Multi-Family Loans Expose Us to Increased Lending Risks.

At December 31, 2001, our portfolio of commercial real estate loans totaled $272.1 million, or 31.1% of total gross loans, exclusive of money market loan participations ("gross loans"), and our portfolio of multi-family loans totaled $339.0 million, or 38.7% of gross loans. Commercial real estate and multi-family loans generally expose a lender to greater risk of non-payment and loss than one-to-four family residential mortgage loans because repayment of the loans often depends on the successful operations and the income stream of the borrowers. Such loans typically involve larger loan balances to single borrowers or groups of related borrowers compared to one-to-four family residential mortgage loans. Also, many of our borrowers have more than one commercial real estate or multi-family loan outstanding with us. Consequently, an adverse development with respect to one loan or one credit relationship can expose us to a significantly greater risk of loss compared to an adverse development with respect to a one-to-four family residential mortgage loan.

Our Loans are Geographically Concentrated. A Future Economic Downturn in Our Market Area Could Negatively Impact Our Operations.

Our loans are concentrated primarily in the greater Boston metropolitan area and eastern Massachusetts. Commercial real estate and multifamily loans can be particularly affected by the local economy and unemployment rates. A sustained downturn in our real estate market or general economic conditions could result in increased loan delinquencies, which can lag the onset of economic downturns. An economic downturn may also reduce the amount of customer funds on deposit and loan demand and could negatively impact our expansion plans.

Our Ability To Grow May Be Limited If We Cannot Make Acquisitions.

We intend to expand our banking franchise by acquiring other financial institutions or branches and other financial service companies. Our ability to grow through selective acquisitions of other financial institutions or branches will depend on successfully identifying, acquiring and integrating such institutions or branches. We cannot assure you that we will be able to identify attractive acquisition candidates, make acquisitions on favorable terms or successfully integrate any acquired institutions or branches into our banking organization. We currently have no specific plans, arrangements or understandings regarding any such expansions or acquisitions.

If Our Allowance for Loan Losses is Not Sufficient to Cover Actual Loan Losses, Our Earnings Could Decrease.

Our loan customers may not repay their loans according to their terms and the collateral securing the payment of these loans may be insufficient to pay any remaining loan balance. We may experience

significant loan losses, which could have a material adverse effect on our operating results. We make various assumptions and judgments about the collectibility of our loan portfolio, including the creditworthiness of our borrowers and the value of the real estate and other assets serving as collateral for the repayment of many of our loans. In determining the amount of the allowance for loan losses, we review our loans and our loss and delinquency experience, and we evaluate economic conditions. If our assumptions are incorrect, our allowance for loan losses may not be sufficient to cover losses inherent in our loan portfolio, resulting in additions to our allowance. Material additions to our allowance would materially decrease our net income.

In addition, the Office of Thrift Supervision periodically reviews our allowance for loan losses and may require us to increase our provision for loan losses or recognize further loan charge-offs. Any increase in our allowance for loan losses or loan charge-offs as required by the Office of Thrift Supervision could have a material adverse effect on our results of operations and financial condition.

Changes in Interest Rates Could Adversely Affect Our Results of Operations and Financial Condition.

Our results of operations and financial condition are significantly affected by changes in interest rates. Our results of operations depend substantially on our net interest income, which is the difference between the interest income earned on our interest-earning assets and the interest expense paid on our interest-bearing liabilities. Because our interest-bearing liabilities generally reprice or mature more quickly than our interest-earning assets, an increase in interest rates generally would result in a decrease in our net interest income.

Changes in interest rates also affect the value of our interest-earning assets, and in particular our securities portfolio. Generally, the value of securities fluctuates inversely with changes in interest rates. At December 31, 2001, our available-for-sale securities portfolio totaled $163.4 million. Unrealized gains and losses on securities available-for-sale are reported as a separate component of stockholders' equity. Decreases in the fair value of securities available-for-sale, therefore, could have an adverse effect on stockholders' equity.

We also are subject to reinvestment risk associated with changes in interest rates. Changes in interest rates may affect the average life of loans and mortgage-related securities. Decreases in interest rates can result in increased prepayments of loans and mortgage-related securities, as borrowers refinance to reduce borrowing costs. Under these circumstances, we are subject to reinvestment risk to the extent that we are unable to reinvest the cash received from such prepayments at rates that are comparable to the rates on existing loans and securities.

Our Return on Stockholders' Equity Will Be Low Compared to Other Financial Institutions. This Could Adversely Affect the Trading Price of Our Common Stock.

Net income divided by average stockholders' equity, known as "return on equity," is a ratio many investors use to compare the performance of a financial institution to its peers. We expect our return on equity to decrease as compared to our performance in recent years until we are able to leverage the additional capital raised in the offering. Until we can increase our net interest income and non-interest income, we expect our return on equity to be below the industry average, which may negatively impact the value of our common stock.

The Implementation of Stock-Based Benefit Plans May Dilute Your Ownership Interest.

We intend to adopt a stock option plan and recognition and retention plan following the offering. These stock benefit plans will be funded either through open market purchases, if permitted, or from the issuance of authorized but unissued shares. Stockholders will experience a reduction or dilution in ownership interest of 7.5% in the event newly issued shares are used to fund stock options and stock awards made under the recognition and retention plan.

Our Recognition and Retention Plan Will Increase Our Costs, Which Will Reduce Our Profitability and Stockholders' Equity.

We intend to implement a recognition and retention plan after the offering. Under this plan, our officers and directors may be awarded, at no cost to them, shares of common stock in an aggregate amount equal to 4% of the shares sold in the offering. We must recognize expense for shares awarded over their vesting period at the fair market value of the shares on the date they are awarded. The recognition and retention plan may not be implemented until at least six months after the offering. If the plan is adopted within twelve months after the offering, it is subject to Office of Thrift Supervision regulations. Assuming the shares of common stock to be awarded under the plan are repurchased in the open market and cost the same as the purchase price in the offering, the reduction to stockholders' equity from the plan would be between $8.7 million at the minimum of the offering range and $13.5 million at the adjusted maximum of the offering range.

Strong Competition Within Our Market Area May Limit Our Growth and Profitability.

Competition in the banking and financial services industry is intense. We compete in our market area with commercial banks, savings institutions, mortgage banks, credit unions, finance companies, mutual funds, insurance companies, and brokerage and investment banking firms. Many of these competitors have substantially greater resources and lending limits than we have and may offer certain services that we do not provide. Our profitability depends upon our continued ability to successfully compete in our market area.

We Have Broad Discretion in Allocating the Proceeds of the Offering. Our Failure to Effectively Utilize Such Proceeds Could Reduce Our Profitability.

Brookline Bancorp, Inc. intends to contribute approximately 50% of the net proceeds of the offering to Brookline Savings Bank. Brookline Bancorp, Inc. may use the remaining net proceeds to finance the acquisition of other financial institutions, pay dividends to stockholders, repurchase common stock, purchase investment securities, or for other general corporate purposes. Brookline Bancorp, Inc. may use a portion of the net proceeds to fund the employee stock ownership plan if the employee stock ownership plan purchases shares in the offering. Brookline Savings Bank may use the proceeds it receives to establish or acquire new branches, acquire financial institutions, fund new loans, purchase investment securities, or for general corporate purposes. We have not allocated specific amounts of proceeds for any of these purposes, and we will have significant flexibility in determining how much of the net proceeds we apply to different uses and the timing of such applications. Our failure to utilize these funds effectively could reduce our profitability.

We Operate in a Highly Regulated Environment and We May be Adversely Affected by Changes in Laws and Regulations.

We are subject to extensive regulation, supervision and examination by the Office of Thrift Supervision, our chartering authority, and by the Federal Deposit Insurance Corporation, as insurer of our deposits. As a savings and loan holding company, Brookline Bancorp, Inc. is subject to regulation and supervision by the Office of Thrift Supervision. Such regulation and supervision govern the activities in which an institution and its holding company may engage, and are intended primarily for the protection of the insurance fund and depositors. Regulatory authorities have extensive discretion in their supervisory and enforcement activities, including the imposition of restrictions on the operation of an institution, the classification of assets by the institution and determination of the level of an institution's allowance for loan losses. Any change in such regulation and oversight, whether in the form of regulatory policy, regulations or legislation, may have a material impact on our operations.

Once Submitted, Your Purchase Order May Not be Revoked Unless the Stock Offering is Terminated or Extended Beyond , 2002.

Funds submitted in connection with the purchase of common stock in the offering will be held by Brookline Bancorp, Inc. until the termination or completion of the offering, including any extension of the expiration date. Because completion of the offering will be subject to an update of the independent appraisal and other factors, there may be one or more delays in completing the offering. Orders submitted in the offering are irrevocable, and subscribers will have no access to subscription funds and/or shares of common stock unless the stock offering is terminated, or extended beyond , 2002.

Various Factors May Make Takeover Attempts More Difficult to Achieve.

Our board of directors has no current intention to sell control of Brookline Bancorp, Inc. Provisions of our certificate of incorporation and bylaws, federal and state regulations and various other factors may make it more difficult for companies or persons to acquire control of Brookline Bancorp, Inc. without the consent of our board of directors. It is possible, however, that you would want a takeover attempt to succeed because, for example, a potential acquiror could offer a premium over the then prevailing price of our common stock. The factors that may discourage takeover attempts or make them more difficult include:

•: Office of Thrift Supervision regulations. Office of Thrift Supervision regulations prohibit, for three years following the completion of a mutual-to-stock conversion, the acquisition of more than 10% of any class of equity security of a converted institution without the prior approval of the Office of Thrift Supervision. The charter of Brookline Savings Bank also will include a provision for a period of five years after the conversion, that prohibits any person from acquiring or offering to acquire, directly or indirectly, more than 10% of any class of equity security of Brookline Savings Bank.
•: Certificate of incorporation and statutory provisions. Provisions of the certificate of incorporation and bylaws of Brookline Bancorp, Inc. and the corporate law of the State of Delaware, may make it more difficult and expensive to pursue a takeover attempt that management opposes. These provisions also make more difficult the removal of our current board of directors or management, or the appointment of new directors. These provisions include: limitations on voting rights of beneficial owners of more than 10% of our common stock; supermajority voting requirements for certain business combinations; and the election of directors to staggered terms of three years. Our bylaws also contain provisions regarding the timing and content of stockholder proposals and nominations and qualification for service on the board of directors.
•: Required change in control payments. We have entered into employment agreements and change of control agreements with certain executive officers that will require payments to be made to them in the event they are terminated following a change in control of Brookline Bancorp, Inc. or Brookline Savings Bank. These payments may have the effect of increasing the costs of acquiring Brookline Bancorp, Inc., thereby discouraging future attempts.

FORWARD-LOOKING STATEMENTS

This prospectus contains forward-looking statements, which can be identified by the use of such words as estimate, project, believe, intend, anticipate, plan, seek, expect and similar expressions. These forward-looking statements include:

•: statements of our goals, intentions and expectations;
•: statements regarding our business plans, prospects, growth and operating strategies;
•: statements regarding the asset quality of our loan and investment portfolios; and
•: estimates of our risks and future costs and benefits.

These forward-looking statements are subject to significant risks, assumptions and uncertainties, including, among other things, the following important factors that could affect the actual outcome of future events:

•: general economic conditions, either nationally or in our market areas, that are worse than expected;
•: significantly increased competition among depository and other financial institutions;
•: inflation and changes in the interest rate environment that reduce our margins or reduce the fair value of financial instruments;
•: adverse changes in the securities markets;
•: legislative or regulatory changes that adversely affect our business;
•: our ability to enter new markets successfully and capitalize on growth opportunities;
•: changes in consumer spending, borrowing and savings habits;
•: changes in accounting policies and practices, as may be adopted by the bank regulatory agencies and the Financial Accounting Standards Board; and
•: changes in our organization, compensation and benefit plans.

Because of these and other uncertainties, our actual future results may be materially different from the results indicated by these forward-looking statements. We discuss some of these uncertainties and others in "Risk Factors" beginning on page 15.

HOW WE INTEND TO USE THE PROCEEDS FROM THE OFFERING

Although we cannot determine what the actual net proceeds from the sale of the common stock in the offering will be until the offering is completed, we anticipate that the net proceeds will be between $213.5 million and $289.2 million, or $332.8 million if the offering range is increased by 15%. Brookline Bancorp, Inc. estimates that it will invest between $106.7 million and $144.6 million, or $166.4 million if the offering range is increased by 15%, in Brookline Savings Bank. Brookline Bancorp, Inc. intends to retain approximately 50% of the net proceeds.

A summary of the anticipated net proceeds at the minimum, midpoint, maximum and adjusted maximum of the offering range and anticipated distribution of the net proceeds is as follows:

		Minimum		Midpoint		Maximum		Adjusted Maximum
		(In Thousands)
Offering proceeds		$	216,750	$	255,000	$	293,250	$	337,237
Less offering expenses			3,281		3,664		4,046		4,486

	Net offering proceeds	$	213,469	$	251,336	$	289,204	$	332,751

Distribution of net proceeds:
	To Brookline Savings Bank.	$	106,735	$	125,668	$	144,602	$	166,376
	Retained by Brookline Bancorp, Inc.		106,734		125,668		144,602		166,375

		$	213,469	$	251,336	$	289,204	$	332,751

Payments for shares made through withdrawals from existing deposit accounts will not result in the receipt of new funds for investment but will result in a reduction of Brookline Savings Bank's deposits. The net proceeds may vary because total expenses relating to the offering may be more or less than our estimates. For example, our expenses would increase if a syndicated community offering is used to sell shares not purchased in the subscription offering and community offering. The net proceeds also will vary if the number of shares to be sold in the offering is adjusted to reflect a change in the estimated pro forma market value of Brookline Bancorp, Inc.

Brookline Bancorp, Inc. May Use the Proceeds it Retains From the Offering:

•: to finance the acquisition of financial institutions or branches and other financial service companies, although no transactions are specifically being considered at this time;
•: to pay cash dividends to stockholders;
•: to repurchase its common stock;
•: to invest in securities; and
•: for other general corporate purposes.

Under current Office of Thrift Supervision regulations, we may not repurchase shares of our common stock during the first year following the conversion, except when extraordinary circumstances exist and with prior regulatory approval.

Brookline Savings Bank May Use the Proceeds it Receives From the Offering:

•: to fund new loans, including multi-family residential and commercial mortgage loans, single-family mortgage loans, commercial business loans and consumer loans;
•: to expand its retail banking franchise, by establishing or acquiring new branches or by acquiring other financial institutions, or other financial service companies, although no transactions are specifically being considered at this time;
•: to support new products and services;
•: to invest in securities; and
•: for other general corporate purposes.

OUR DIVIDEND POLICY

Brookline Bancorp, Inc. currently pays a cash dividend of $0.16 per share per quarter, or $0.64 per share per year. After the conversion, we intend to continue to pay cash dividends on a quarterly basis. We expect such dividends to equal $0.48, $0.42, $0.38 and $0.34 per share per year at the minimum, midpoint, maximum and adjusted maximum of the offering range, respectively, which represents an annual dividend yield of 4.8%, 4.2%, 3.8% and 3.4% at the minimum, midpoint, maximum and adjusted maximum of the offering range, respectively, based upon a stock price of $10.00 per share. The amount of dividends that we intend to pay to our stockholders following the conversion is intended to preserve or increase the per share dividend amount, adjusted to reflect the exchange ratio, that our stockholders currently receive on their Brookline Bancorp, Inc. common stock. The dividend rate and the continued payment of dividends will depend on a number of factors including our capital requirements, our financial condition and results of operations, tax considerations, statutory and regulatory limitations, and general economic conditions. We cannot assure you that we will not reduce or eliminate dividends in the future.

Under the rules of the Office of Thrift Supervision, Brookline Savings Bank will not be permitted to pay dividends on its capital stock to Brookline Bancorp, Inc., its sole stockholder, if Brookline Savings Bank's stockholder's equity would be reduced below the amount of the liquidation account. See "The Conversion—Liquidation Rights." For information concerning federal and state law and regulations regarding the ability of Brookline Savings Bank to make capital distributions, including the payment of dividends, to Brookline Bancorp, Inc., see "Taxation—Federal Taxation" and "Supervision and Regulation—Federal Banking Regulation."

Unlike Brookline Savings Bank, Brookline Bancorp, Inc. is not restricted by Office of Thrift Supervision regulations on the payment of dividends to its stockholders, although the source of dividends will depend on the net proceeds retained by Brookline Bancorp, Inc. and earnings thereon, and upon dividends from Brookline Savings Bank. Brookline Bancorp, Inc., however, is subject to the requirements of Delaware law, which generally limit dividends to an amount equal to the excess of its stockholders' equity over its statutory capital or, if there is no excess, to its net earnings for the current and/or immediately preceding fiscal year.

Additionally, we have committed to the Office of Thrift Supervision that during the one-year period following the completion of the conversion, Brookline Bancorp, Inc. will not take any action to declare an extraordinary dividend to our stockholders that would be treated by such stockholders as a tax-free return of capital for federal income tax purposes, without prior approval of the Office of Thrift Supervision.

MARKET FOR THE COMMON STOCK

Brookline Bancorp, Inc. common stock is currently listed on the Nasdaq National Market under the symbol "BRKL," and there is an established market for such common stock. At April 8, 2002, we had 16 market makers, including Ryan, Beck & Co., LLC. Upon completion of the conversion, the new shares of common stock of Brookline Bancorp, Inc. will replace existing shares and be traded on the Nasdaq National Market. Ryan, Beck & Co., LLC intends to remain a market maker in Brookline Bancorp, Inc. common stock following the conversion. Ryan, Beck & Co., LLC also will assist Brookline Bancorp, Inc. in obtaining other market makers after the conversion. We cannot assure you that other market makers will be obtained or that an active and liquid trading market for the common stock will develop or, if developed, will be maintained. For a period of 20 trading days following completion of our offering, our symbol will be "BRKLD," after which it will be "BRKL."

The development of a public market having the desirable characteristics of depth, liquidity and orderliness depends on the existence of willing buyers and sellers, the presence of which is not within our control or that of any market maker. The number of active buyers and sellers of our common stock

at any particular time may be limited, which may have an adverse effect on the price at which our common stock can be sold. There can be no assurance that persons purchasing the common stock will be able to sell their shares at or above the $10.00 price per share in the offering. Purchasers of our common stock should have a long-term investment intent and should recognize that there may be a limited trading market in the common stock.

The following table sets forth the high and low trading prices for Brookline Bancorp, Inc. common stock and cash dividends paid per share for the periods indicated. As of December 31, 2001, there were 11,347,199 publicly held shares of Brookline Bancorp, Inc. common stock issued and outstanding. In connection with the conversion, each existing share of common stock of Brookline Bancorp, Inc. will be converted into a number of new shares of common stock, based upon the exchange ratio that is described in other parts of this prospectus.

Year Ended December 31, 2001	High		Low		Dividend Paid Per Share
Fourth quarter	$	16.75	$	14.45	$	0.16
Third quarter		17.25		14.00		0.16
Second quarter		14.95		12.80		0.07
First quarter		14.50		10.88		0.07

Year Ended December 31, 2000	High		Low		Dividend Paid Per Share
Fourth quarter	$	12.44	$	10.25	$	0.06
Third quarter		12.81		10.50		0.06
Second quarter		11.81		8.63		0.06
First quarter		10.00		9.00		0.06

At April 3, 2002, the business day immediately preceding the public announcement of the conversion, and at May , 2002, the closing prices of Brookline Bancorp, Inc. common stock as reported on the Nasdaq National Market were $17.00 per share and $ per share, respectively. At May , 2002, Brookline Bancorp, Inc. had approximately stockholders of record. On the effective date of the conversion, all publicly held shares of Brookline Bancorp, Inc. common stock, including shares held by our officers and directors, will be converted automatically into and become the right to receive a number of shares of Brookline Bancorp, Inc. common stock determined pursuant to the exchange ratio. Options to purchase shares of Brookline Bancorp, Inc. common stock will be converted into options to purchase a number of shares of Brookline Bancorp, Inc. common stock determined pursuant to the exchange ratio, for the same aggregate exercise price. See "Beneficial Ownership of Common Stock."

HISTORICAL AND PRO FORMA REGULATORY CAPITAL COMPLIANCE

At December 31, 2001, Brookline Savings Bank exceeded all of the applicable regulatory capital requirements. The table below sets forth the historical equity capital and regulatory capital of Brookline Savings Bank at December 31, 2001 and the pro forma regulatory capital of Brookline Savings Bank assuming the indicated number of shares were sold as of such date at $10.00 per share and Brookline Savings Bank received 50% of the net conversion proceeds.

					Pro Forma at December 31, 2001
	Brookline Savings Bank Historical at December 31, 2001				Minimum				Midpoint				Maximum				Maximum as Adjusted (1)
	Amount		Percent of Assets(2)		Amount		Percent of Assets(2)		Amount		Percent of Assets(2)		Amount		Percent of Assets(2)		Amount		Percent of Assets(2)
Equity capital	$	232,505	21.99	%	$	347,768	29.66	%	$	366,702	30.78	%	$	385,636	31.86	%	$	407,410	33.07	%

Tangible capital	$	228,626	21.75	%	$	343,889	29.49	%	$	362,823	30.61	%	$	381,757	31.70	%	$	403,531	32.92	%
Tangible requirement		15,765	1.50			17,494	1.50			17,778	1.50			18,062	1.50			18,388	1.50

Excess	$	212,861	20.25	%	$	326,395	27.99	%	$	345,045	29.11	%	$	363,695	30.20	%	$	385,143	31.42	%

Core capital	$	228,626	21.75	%	$	343,889	29.49	%	$	362,823	30.61	%	$	381,757	31.70	%	$	403,531	32.92	%
Core requirement(3)		42,040	4.00			46,650	4.00			47,407	4.00			48,165	4.00			49,036	4.00

Excess	$	185,586	17.75	%	$	297,239	25.49	%	$	315,416	26.61	%	$	333,592	27.70	%	$	354,495	28.92	%

Total capital(4)	$	241,430	27.89	%	$	356,693	38.64	%	$	375,627	40.27	%	$	394,561	41.88	%	$	416,335	43.69	%
Risk-based requirement		69,245	8.00			73,856	8.00			74,613	8.00			75,371	8.00			76,242	8.00

Excess	$	175,185	19.89	%	$	282,837	30.64	%	$	301,014	32.27	%	$	319,190	33.88	%	$	340,093	35.69	%

(1): As adjusted to give effect to an increase in the number of shares which could occur due to a 15% increase in the offering range to reflect changes in market or general financial conditions following the commencement of the offering.
(2): Tangible and core capital levels are shown as a percentage of total adjusted assets. Risk-based capital levels are shown as a percentage of risk-weighted assets.
(3): The current Office of Thrift Supervision core capital requirement for financial institutions is 3% of total adjusted assets for financial institutions that receive the highest supervisory rating for safety and soundness and a 4% to 5% core capital ratio requirement for all other financial institutions.
(4): Pro forma amounts and percentages assume net proceeds are invested in assets that carry a 50% risk-weighting.

CAPITALIZATION

The following table presents the historical consolidated capitalization of Brookline Bancorp, Inc. at December 31, 2001 and the pro forma consolidated capitalization of Brookline Bancorp, Inc. after giving effect to the conversion, based upon the assumptions set forth in the "Pro Forma Data" section.

		Brookline Bancorp, Inc. Historical at December 31, 2001			37,624,738 Minimum Shares Outstanding, 21,675,000 Shares Sold at $10.00 Per Share			44,264,397 Midpoint Shares Outstanding, 25,500,000 Shares Sold at $10.00 per Share			50,904,057 Maximum Shares Outstanding, 29,325,000 Shares Sold at $10.00 Per Share			58,539,666 Maximum as Adjusted Shares Outstanding, 33,723,750 Shares Sold at $10.00 Per Share(1)
					(Dollars in Thousands)
Deposits (2)		$	620,920		$	620,920		$	620,920		$	620,920		$	620,920
Borrowed funds			178,130			178,130			178,130			178,130			178,130

	Total deposits and borrowed funds	$	799,050		$	799,050		$	799,050		$	799,050		$	799,050

Stockholders' equity:
Preferred stock, $0.01 par value (post-conversion), 50,000,000 shares authorized(3)		$	—		$	—		$	—		$	—		$	—
Common stock $0.01 par value (post-conversion) 200,000,000 shares authorized; shares to be issued as reflected(3)(4)			297			376			443			509			585
Additional paid-in capital(3)			141,021			329,127			366,927			404,729			448,200
Retained earnings(5)			177,167			177,167			177,167			177,167			177,167
Accumulated other comprehensive income			6,720			6,720			6,720			6,720			6,720
Less:
Treasury stock			(33,813	)		—			—			—			—
Common stock held by employee stock ownership plan			(5,044	)		(5,044	)		(5,044	)		(5,044	)		(5,044	)
Unearned compensation—existing recognition and retention plan			(903	)		(903	)		(903	)		(903	)		(903	)
Common stock to be acquired by recognition and retention plan(6)			—			(8,670	)		(10,200	)		(11,730	)		(13,489	)

	Total stockholders' equity	$	285,445		$	498,773		$	535,110		$	571,448		$	613,236

	Total stockholders' equity as a percentage of total assets		25.96	%		37.99	%		39.66	%		41.24	%		42.96	%

(1): As adjusted to give effect to an increase in the number of shares which could occur due to a 15% increase in the offering range to reflect changes in market or general financial conditions following the commencement of the subscription and community offerings.
(2): Does not reflect withdrawals from deposit accounts for the purchase of common stock in the conversion. These withdrawals would reduce pro forma deposits by the amount of the withdrawals.
(3): Brookline Bancorp, Inc. has 5,000,000 authorized shares of preferred stock and 75,000,000 authorized shares of common stock, par value $0.01 per share. Pro forma Brookline Bancorp, Inc. common stock and additional paid-in capital have been increased to reflect the number of shares of Brookline Bancorp, Inc. common stock to be outstanding. Pro forma additional paid-in capital reflects consolidation of $8.5 million of capital from Brookline Savings Bancorp, MHC.
(4): No effect has been given to the issuance of additional shares of Brookline Bancorp, Inc. common stock pursuant to an additional stock option plan. If this plan is implemented, an amount equal to

10% of the shares of Brookline Bancorp, Inc. common stock sold in the offering will be reserved for issuance upon the exercise of options under the stock option plan. No effect has been given to the exercise of options currently outstanding. See "Management of Brookline Bancorp, Inc.—Stock Benefit Plans."

(5): The retained earnings of Brookline Savings Bank will be substantially restricted after the conversion. See "The Conversion—Liquidation Rights" and "Supervision Regulation—Federal Banking Regulation."
(6): Assumes a number of shares of common stock equal to 4% of the common stock to be sold in the offering will be purchased by the stock recognition and retention plan in open market purchases. The dollar amount of common stock to be purchased is based on the $10.00 per share subscription price in the offering and represents unearned compensation. This amount does not reflect possible increases or decreases in the value of stock relative to the subscription price in the offering. As Brookline Bancorp, Inc. accrues compensation expense to reflect the vesting of shares pursuant to the stock recognition and retention plan, the credit to capital will be offset by a charge to operations. Implementation of the stock recognition and retention plan will require stockholder approval. If the shares to fund the plan are assumed to come from authorized but unissued shares of Brookline Bancorp, Inc., the number of outstanding shares, at the minimum, midpoint, maximum and the maximum, as adjusted, of the offering range would be 38,491,738, 45,248,397, 52,077,057 and 59,888,616, respectively, total stockholders' equity would be $507.4 million, $545.3 million, $583.2 million and $626.7 million, respectively, and total stockholders' ownership in Brookline Bancorp, Inc. would be diluted by approximately 2.3%.

PRO FORMA DATA

The following table summarizes historical data of Brookline Bancorp, Inc. and pro forma data of Brookline Bancorp, Inc. at or for the year ended December 31, 2001, based on assumptions set forth below and in the table, and should not be used as a basis for projections of market value of the common stock following the conversion. No effect has been given in the table to the possible issuance of additional shares pursuant to the current outstanding stock option plan or for the possible issuance of additional shares pursuant to any stock option plan or stock recognition and retention plan that may be adopted by our stockholders no earlier than six months after the conversion. Moreover, pro forma stockholders' equity per share does not give effect to the liquidation account to be established in the conversion. See "The Conversion—Liquidation Rights."

Pro forma consolidated net earnings of Brookline Bancorp, Inc. for the year ended December 31, 2001 has been calculated as if the estimated net proceeds received by Brookline Bancorp, Inc. and Brookline Savings Bank had been invested at an assumed interest rate of 4.76% (3.05% on an after-tax basis) for the year ended December 31, 2001. The reinvestment rate was calculated based on the arithmetic average of Brookline Bancorp, Inc.'s average yield on interest-earning assets and average rate paid on interest-bearing deposits as of December 31, 2001. The effect of withdrawals from deposit accounts for the purchase of common stock has not been reflected. Historical and pro forma per share amounts have been calculated by dividing historical and pro forma amounts by the indicated number of shares of common stock. No effect has been given in the pro forma stockholders' equity calculations for the assumed earnings on the net proceeds. It is assumed that Brookline Bancorp, Inc. will retain 50% of the estimated net conversion proceeds. The actual net proceeds from the sale of common stock will not be determined until the conversion is completed. However, we currently estimate the net proceeds to be between $213.5 million and $289.2 million. It is assumed that all shares will be sold in the subscription offering and community offering.

The following pro forma information may not be representative of the financial effects of the foregoing transactions at the dates on which such transactions actually occur, and should not be taken as indicative of future results of operations. Pro forma consolidated stockholders' equity represents the difference between the stated amounts of assets and liabilities of Brookline Bancorp, Inc. The pro forma stockholders' equity is not intended to represent the fair market value of the common stock.

			At or For the Year Ended December 31, 2001 Based Upon the Sale at $10.00 Per Share of
			21,675,000 Shares Minimum of Estimated Price Range			25,500,000 Shares Midpoint of Estimated Price Range			29,325,000 Shares Maximum of Estimated Price Range			33,723,750 Shares(1) 15% Above Maximum of Estimated Price Range
			(Dollars in Thousands, Except Per Share Amounts)
Gross proceeds			$	216,750		$	255,000		$	293,250		$	337,237
Expenses				(3,281	)		(3,664	)		(4,046	)		(4,486	)

	Estimated net proceeds			213,469			251,336			289,204			332,751
Net assets received from the MHC				8,529			8,529			8,529			8,529
Common stock acquired by recognition and retention plan(2)				(8,670	)		(10,200	)		(11,730	)		(13,489	)

	Estimated net proceeds, as adjusted		$	213,328		$	249,665		$	286,003		$	327,791

For the year ended December 31, 2001
Consolidated net earnings:
	Historical		$	19,334		$	19,334		$	19,334		$	19,334
Pro forma adjustments:
	Income on adjusted net proceeds			6,499			7,606			8,713			9,986
	Recognition and retention plan(2)			(1,110	)		(1,306	)		(1,501	)		(1,727	)

		Pro forma net earnings	$	24,723		$	25,634		$	26,546		$	27,593

Earnings per share(3):
	Historical		$	0.53		$	0.45		$	0.39		$	0.34
Pro forma adjustments:
	Income on adjusted net proceeds			0.18			0.18			0.18			0.18
	Recognition and retention plan(2)			(0.03	)		(0.03	)		(0.03	)		(0.03	)

		Pro forma earnings per share(3)(4)	$	0.68		$	0.60		$	0.54		$	0.49

Pro forma price to earnings				14.71	x		16.67	x		18.52	x		20.41	x

Number of shares used in earnings per share calculations				36,205,230			42,594,388			48,983,547			56,331,079

At December 31, 2001
Stockholders' equity:
	Historical		$	285,445		$	285,445		$	285,445		$	285,445
	Estimated net proceeds			213,469			251,336			289,204			332,751
	Net assets received from the MHC			8,529			8,529			8,529			8,529
	Common stock acquired by recognition and retention plan(2)			(8,670	)		(10,200	)		(11,730	)		(13,489	)

		Pro forma stockholders' equity(5)		498,773			535,110			571,448			613,236
Intangible assets				—			—			—			—

		Pro forma tangible stockholders' equity	$	498,773		$	535,110		$	571,448		$	613,236

Stockholders' equity per share(6):
	Historical		$	7.59		$	6.45		$	5.61		$	4.88
	Estimated net proceeds			5.67			5.68			5.68			5.68
	Net assets received from the MHC			0.23			0.19			0.17			0.15
	Common stock acquired by recognition and retention plan(2)			(0.23	)		(0.23	)		(0.23	)		(0.23	)

		Pro forma stockholders' equity per share(5)(6)	$	13.26		$	12.09		$	11.23		$	10.48

		Pro forma tangible stockholders' equity per share	$	13.26		$	12.09		$	11.23		$	10.48

Offering price as percentage of pro forma stockholders' equity per share				75.41	%		82.71	%		89.05	%		95.42	%

Offering price as percentage of pro forma tangible stockholders' equity per share				75.41	%		82.71	%		89.05	%		95.42	%

Number of shares used in book value per share calculations				37,624,738			44,264,397			50,904,057			58,539,666

(Footnotes on next page)

(1): As adjusted to give effect to an increase in the number of shares which could occur due to a 15% increase in the offering range to reflect changes in market and financial conditions following the commencement of the offering.
(2): Assumes no shares of common stock will be acquired in the offering by the employee stock ownership plan. The employee stock ownership plan will not purchase common stock in the offering unless such purchase is necessary to complete the offering at the minimum of the offering range. If the employee stock ownership plan purchases 8% of the common stock sold in the offering at the minimum of the offering range, pro forma stockholders' equity per share would be $12.80. If approved by Brookline Bancorp, Inc.'s stockholders, the stock recognition and retention plan intends to purchase an aggregate number of shares of common stock equal to 4% of the shares to be sold in the offering. Stockholder approval of the stock recognition and retention plan and purchases by the plan may not occur earlier than six months after the completion of the conversion. The shares may be acquired directly from Brookline Bancorp, Inc. or through open market purchases. The funds to be used by the stock recognition and retention plan to purchase the shares will be provided by Brookline Bancorp, Inc. The table assumes that (i) the stock recognition and retention plan acquires the shares through open market purchases at $10.00 per share, (ii) 20% of the amount contributed to the stock recognition and retention plan is amortized as an expense during the year ended December 31, 2001 and (iii) the stock recognition and retention plan expense reflects an effective combined federal and state tax rate of 36.0%. Assuming stockholder approval of the plan and that the plan shares are awarded through the use of authorized but unissued shares of common stock, stockholders would have their voting interests diluted by approximately 2.3%.
(3): Per share figures include publicly held shares of Brookline Bancorp, Inc. common stock that will be exchanged for new shares of Brookline Bancorp, Inc. common stock in the conversion. Net income per share computations are determined by taking the number of shares assumed to be sold in the offering and the number of new shares assumed to be issued in exchange for publicly held shares and, in accordance with Statement of Position 93-6, subtracting the recognition and retention plan shares and the employee stock ownership plan shares which have not been committed for release during the respective periods. See note 2 above. The number of shares of common stock actually sold and the corresponding number of exchange shares may be more or less than the assumed amounts.
(4): No effect has been given to the issuance of additional shares of common stock pursuant to the stock option plan, which is expected to be adopted by Brookline Bancorp, Inc. following the offering and presented to stockholders for approval not earlier than six months after the completion of the conversion. If the stock option plan is approved by stockholders, a number of shares equal to 10% of the shares sold in the offering will be reserved for future issuance upon the exercise of options to be granted under the stock option plan. The issuance of authorized but previously unissued shares of common stock pursuant to the exercise of options under such plan would dilute existing stockholders' interests by approximately 5.4%.
(5): The retained earnings of Brookline Savings Bank will be substantially restricted after the conversion. See "Dividend Policy," "The Conversion—Liquidation Rights" and "Supervision and Regulation—Federal Banking Regulation—Capital Distributions."
(6): Per share figures include publicly held shares of Brookline Bancorp, Inc. common stock that will be exchanged for new shares of Brookline Bancorp, Inc. common stock in the conversion. Stockholders' equity per share calculations are based upon the sum of (i) the number of subscription shares assumed to be sold in the offering and (ii) new shares to be issued in exchange for publicly held shares at the minimum, midpoint, maximum and adjusted maximum of the offering range, respectively. The exchange shares reflect an exchange ratio of 1.4056, 1.6537, 1.9017 and 2.1870, respectively, at the minimum, midpoint, maximum and adjusted maximum of the offering range, respectively. The number of subscription shares actually sold and the corresponding number of exchange shares may be more or less than the assumed amounts.

BROOKLINE BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME

The following Consolidated Statements of Income of Brookline Bancorp, Inc. for each of the years in the three year period ended December 31, 2001 have been audited by Grant Thornton LLP, independent certified public accountants, whose report thereon appears elsewhere in this prospectus. These statements should be read in conjunction with the consolidated financial statements of Brookline Bancorp, Inc. and related notes thereto included elsewhere in this prospectus.

		Year Ended December 31,
		2001			2000		1999
		(In Thousands, Except Share Data)
Interest income:
Loans, excluding money market loan participations		$	61,681		$	55,802	$	48,595
Money market loan participations			1,017			2,054		1,539
Debt securities			10,189			11,081		12,795
Marketable equity securities			667			903		877
Restricted equity securities			470			485		369
Short-term investments			1,936			1,235		634

	Total interest income		75,960			71,560		64,809

Interest expense:
Deposits			23,560			23,234		20,708
Borrowed funds			9,344			7,338		6,454

	Total interest expense		32,904			30,572		27,162

Net interest income			43,056			40,988		37,647
Provision for loan losses			974			427		450

	Net interest income after provision for loan losses		42,082			40,561		37,197

Non-interest income:
Fees and charges			1,876			1,009		868
Gains on sales of securities, net			3,540			8,253		7,437
Other real estate owned income, net			—			172		711
Gain from termination of pension plan			3,667			—		—
Swap contract market valuation adjustment			(241	)		—		—
Other income			456			460		98

	Total non-interest income		9,298			9,894		9,114

Non-interest expense:
Compensation and employee benefits			8,801			7,631		6,153
Recognition and retention plan			167			1,246		3,593
Occupancy			1,177			972		707
Equipment and data processing			3,329			1,986		1,172
Advertising and marketing			1,175			2,388		504
Internet bank start-up			—			746		675
Restructuring charge			3,927			—		—
Other			2,239			1,854		1,354

	Total non-interest expense		20,815			16,823		14,158

Income before income taxes			30,565			33,632		32,153
Provision for income taxes			11,231			11,998		11,362

	Net income	$	19,334		$	21,634	$	20,791

Earnings per common share:
Basic		$	0.72		$	0.80	$	0.74
Diluted			0.71			0.80		0.74
Weighted average common shares outstanding:
Basic			26,732,571			26,881,433		28,016,150
Diluted			27,053,570			26,924,871		28,016,150

See accompanying notes to the consolidated financial statements.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

The discussion and analysis that follows focuses on the factors affecting Brookline Bancorp, Inc.'s consolidated financial condition at December 31, 2001 and 2000 and consolidated results of operations during 2001, 2000 and 1999. The consolidated financial statements and related notes appearing elsewhere in this prospectus should be read in conjunction with this review.

The preparation of consolidated financial statements involves the application of accounting policies relevant to the business of Brookline Bancorp, Inc. and its subsidiaries. Application of certain accounting policies requires management to make estimates and assumptions about the effect of matters that are inherently uncertain. These estimates and assumptions affect the reported amounts of certain assets, liabilities, revenues and expenses. Different amounts could be reported under different conditions, or if different assumptions were used in the application of certain accounting policies. In this respect, the accounting policy considered by Brookline Bancorp, Inc. to be critical relates to the determination of the allowance for loan losses. This accounting policy is discussed in the "Allowances for Loan Losses" section of this discussion and in note 1 of the notes to consolidates financial statements appearing elsewhere in this prospectus.

General

Brookline Bancorp, Inc.'s activities consist primarily of investment activities and owning 100% of the stock of Brookline Savings Bank. Brookline Bancorp, Inc.'s business operations, which are conducted primarily through Brookline Savings Bank, were also conducted through Lighthouse Bank in 2000 and 2001. As a result, the following discussion generally refers to the consolidated operations of Brookline Bancorp, Inc., Brookline Savings Bank and Lighthouse Bank. See notes 18 and 19 of the notes to consolidated financial statements.

Our primary business is attracting retail deposits from the general public through the six full-service banking offices of Brookline Savings Bank and via the internet. We invest those deposits and other borrowed funds primarily in real estate mortgage loans and various debt and equity securities. We emphasize the origination of multi-family and commercial real estate mortgage loans as well as one-to-four family residential mortgage loans. Our consolidated net income depends largely upon our net interest income, which is the difference between interest income from loans and investments ("interest- earning assets") and interest expense on deposits and borrowed funds ("interest-bearing liabilities"). Net interest income is significantly affected by general economic conditions, policies established by regulatory authorities and competition.

Comparison of Financial Condition at December 31, 2001 and 2000

Total assets increased $63.4 million, or 6.1%, from $1.036 billion at December 31, 2000 to $1.100 billion at December 31, 2001. Excluding money market loan participations, the loan portfolio amounted to $828.4 million at December 31, 2001, an increase of $111.8 million, or 15.6% since December 31, 2000. Approximately $45 million of the loan growth was in the residential mortgage loan sector, much of which occurred through real estate broker relationships established through Lighthouse. Loan growth at Brookline Savings Bank was primarily in the multi-family mortgage sector ($38 million), the commercial real estate mortgage sector ($16 million) and the commercial loan sector ($9 million). Much of the commercial loan business relates to financing of condominium association renovation projects. The level of loan growth, especially in the residential mortgage loan sector, is expected to decline in 2002. With the merger of Lighthouse into Brookline Savings Bank, reliance on real estate brokers to provide new residential mortgage loans has been greatly diminished.

Money market loan participations declined from $28.3 million at December 31, 2000 to $6.0 million at December 31, 2001. Generally, the participations represent purchases of a portion of

loans to national companies and organizations originated and serviced by money center banks that mature between one day and three months. We view such participations as an alternative to lower- yielding short-term investments. Currently, we are placing less funds in this type of investment because of a shortage in the number of quality issues available and the low yields offered on such issues.

While the amount of our short-term investments grew modestly from $66.9 million at the end of 2000 to $69.4 million at the end of 2001, the composition of the investments changed significantly. Commercial paper investments declined from 47% of the year-end 2000 portfolio to 9% of the year-end 2001 portfolio. Over 52% of the year-end 2001 portfolio was invested in overnight deposits at the Federal Home Loan Bank of Boston ("FHLB") compared to 13% of the year-end 2000 portfolio.

Securities available for sale ($163.4 million) and securities held to maturity ($9.6 million) represented 15.7% of total assets at December 31, 2001 while securities available for sale ($149.4 million) and securities held to maturity ($50.4 million) represented 19.3% of total assets at December 31, 2000. As the economy faltered in 2001, the investment ratings of many corporate debt securities were downgraded. As a result, we reduced our holdings of corporate obligations from $93.7 million at the beginning of 2001 to $58.9 million at the end of 2001 and increased our investment in collateralized mortgage obligations from $68.5 million at the beginning of 2001 to $79.7 million at the end of 2001. Most of the corporate obligations mature within two years and the collateralized mortgage obligations generally mature within three or four years.

Marketable equity securities included net unrealized gains of $7.7 million at December 31, 2001 and $9.2 million at December 31, 2000. While unrealized gains declined $1.5 million in 2001, sales of marketable equity securities resulted in realized gains of $4.0 million in 2001. The portfolio is comprised primarily of common stocks of national, regional money center and community banks and utility companies. The single largest investment in the portfolio at December 31, 2001 is in the common stock of a Massachusetts community bank with a market value of $8.2 million at December 31, 2001.

Total deposits were $620.9 million at December 31, 2001 compared to $608.6 million at December 31, 2000, an increase of $12.3 million, or 2.0%. This net increase resulted from growth of core transaction deposit accounts of $67.3 million, or 22.5%, and a decline of $55.0 million, or 17.8%, in certificates of deposit. The decline resulted primarily from significant reductions in rates offered, especially during the second half of 2001.

Total borrowed funds were $178.1 million at December 31, 2001 compared to $133.4 million at December 31, 2000. All of the borrowed funds were obtained through advances from the FHLB. The borrowings were used to fund loan growth and in connection with our management of interest rate sensitivity of our assets and liabilities.

Total stockholders' equity increased from $282.6 million at December 31, 2000 to $285.4 million at December 31, 2001. The increase was due primarily to net income exceeding outflows for dividend payments and stock repurchases. Brookline Bancorp, Inc. purchased 735,450 shares in 2001 at an aggregate cost of $10.8 million, or $14.72 per share. As of December 31, 2001, Brookline Bancorp, Inc. can purchase an additional 894,915 shares under a repurchase plan approved by the Board of Directors. Since becoming a public company in March 1998, Brookline Bancorp, Inc. has repurchased 3,468,364 shares (including 546,986 for the employee stock ownership plan) at an aggregate cost of $40.4 million, or $11.65 per share.

Average Balance Sheets and Interest Rates

The following table sets forth certain information relating to Brookline Bancorp, Inc. for the years ended December 31, 2001, 2000 and 1999. The average yields and costs are derived by dividing interest income or interest expense by the average balance of interest-earning assets or interest-bearing liabilities, respectively, for the years shown. Average balances are derived from average daily balances. The yields and costs include fees which are considered adjustments to yields.

					Year Ended December 31,
					2001							2000							1999
					Average Balance			Interest(1)		Average Yield/ Cost		Average Balance			Interest(1)		Average Yield/ Cost		Average Balance			Interest(1)		Average Yield/ Cost
					(Dollars in Thousands)
Assets:
	Interest-earning assets:
		Short-term investments			$	45,122		$	1,936	4.29	%	$	19,628		$	1,235	6.29	%	$	12,809		$	634	4.95	%
		Debt securities(2)				165,172			10,189	6.17			179,992			11,081	6.16			220,749			12,795	5.80
		Equity securities(2)				29,846			1,380	4.62			31,054			1,716	5.53			38,144			1,564	4.10
		Mortgage loans(3)(4)				765,265			59,476	7.77			643,815			53,522	8.31			577,461			46,928	8.13
		Money market loan participations				20,741			1,017	4.90			30,696			2,054	6.69			29,618			1,539	5.20
		Other commercial loans(3)				27,741			1,908	6.88			24,808			2,066	8.33			16,255			1,254	7.71
		Consumer loans(3)				2,959			297	10.04			2,183			214	9.80			1,922			181	9.42

			Total interest-earning assets			1,056,846			76,203	7.21			932,176			71,888	7.71			896,958			64,895	7.24

Allowance for loan losses						(14,855	)						(14,136	)						(13,441	)
Non-interest earning assets						29,176							26,528							17,867

			Total assets		$	1,071,167						$	944,568						$	901,384

Liabilities and Stockholders' Equity:
	Interest-bearing liabilities:
		Deposits:
			NOW accounts		$	68,968			815	1.18		$	50,843			690	1.36		$	43,897			542	1.23
			Savings accounts(5)			12,469			225	1.80			12,180			268	2.20			13,010			289	2.22
			Money market savings accounts			240,177			7,856	3.27			206,093			8,140	3.95			190,813			7,434	3.90
			Certificate of deposit accounts			277,273			14,664	5.29			253,705			14,136	5.57			242,188			12,443	5.14

				Total deposits		598,887			23,560	3.93			522,821			23,234	4.44			489,908			20,708	4.23
Borrowed funds						153,002			9,344	6.11			120,023			7,338	6.11			106,812			6,454	6.04

				Total interest-bearing liabilities		751,889			32,904	4.38			642,844			30,572	4.76			596,720			27,162	4.55

Non-interest-bearing demand checking accounts						17,732							14,309							12,387
Other liabilities						14,594							11,177							14,069

				Total liabilities		784,215							668,330							623,176
Stockholders' equity						286,952							276,238							278,208

				Total liabilities and stockholders' equity	$	1,071,167						$	944,568						$	901,384
Net interest income (tax equivalent basis)/interest rate spread(6)									43,299	2.83	%					41,316	2.95	%					37,733	2.69	%

Less adjustment of tax exempt income									243							328							318
Net interest income(4)								$	43,056						$	40,988						$	37,415
Net interest margin(7)										4.10	%						4.43	%						4.21	%

(1): Tax exempt income on equity securities is included on a tax equivalent basis.
(2): Average balances include unrealized gains on securities available for sale. Equity securities include marketable equity securities (preferred and common stocks) and restricted equity securities.
(3): Loans on non-accrual status are included in average balances.
(4): Excluded from interest income for the year ended December 31, 1999 is $232 collected from borrowers whose loans were on non-accrual and which relate to interest earned in periods prior to January 1, 1999.
(5): Savings accounts include mortgagors' escrow accounts.
(6): Interest rate spread represents the difference between the yield on interest-earning assets and the cost of interest-bearing liabilities.
(7): Net interest margin represents net interest income (tax equivalent basis) divided by average interest-earning assets.

Interest Rate Spread. Interest rate spread is the difference between yields earned on interest-earning assets and rates paid on interest-bearing liabilities. Interest rates earned are influenced greatly by the actions of the Federal Reserve in establishing the benchmark federal funds rate for overnight loans between banks. From near the end of June through November 1999, the federal funds rate was increased by 50 basis points. In each of the first two quarters of 2000, the federal funds rate was increased by 50 basis points. In 2001, the federal funds rate was cut eleven times for an aggregate reduction of 150 basis points in the first quarter, 125 basis points in the second quarter, 75 basis points in the third quarter and 125 basis points in the fourth quarter. The 2001 reductions represent the most aggressive pace of cuts by the Federal Reserve since 1982 and the last cut in December resulted in the lowest rate (1.75%) in forty years. The impact of rate changes on operating results varies depending on the maturity and date of repricing of our loans, investments, deposits and borrowed funds.

Interest rate spread improved from 2.69% in 1999 to 2.95% in 2000 and declined to 2.83% in 2001. The improvement in 2000 was due in part to (a) our assets repricing upward more quickly than our liabilities as the federal funds rate increased and (b) an increase in the percent of average loans outstanding to total average interest-earning assets from 66% in 1999 to 72% in 2000. Generally, yields earned on loans exceed yields earned on investments. While interest rate spread was higher in 2000 than in 2001, the spread started a downward trend in the fourth quarter of 2000. Interest rate spread declined from 3.05% in the third quarter of 2000 to 2.86% in the fourth quarter of 2000 and to 2.68% in the first quarter of 2001. This downward trend was caused primarily by an influx of term certificates of deposit in 2000 on which higher rates were paid. As a result, the cost of liabilities accelerated more quickly than the increase in yield on assets. Interest rate spread started to improve in the second quarter of 2001 as high cost term certificates of deposit matured and were replaced with lower costing deposits. Interest rate spread was 2.97% in the fourth quarter of 2001.

It is expected that the rate reductions initiated by the Federal Reserve in 2001 will continue to cause a decline in the average yield on our earning assets and in the rates paid on deposits and borrowed funds. The impact of these expected changes on interest rate spread will depend on the maturities and dates of repricing of our loans, investments, deposits and borrowed funds.

Net Interest Margin. Net interest margin, which represents net interest income (on a tax equivalent basis), divided by average interest-earning assets, increased from 4.21% in 1999 to 4.43% in 2000 and declined to 4.10% in 2001. The fluctuations were due primarily to the factors described in the preceding section and a decline in the ratio of interest-earning assets to interest-bearing liabilities from 150% in 1999 to 145% in 2000 and 141% in 2001.

Rate/Volume Analysis

The following table presents, on a tax equivalent basis, the extent to which changes in interest rates and changes in volume of interest-earning assets and interest-bearing liabilities have affected our interest income and interest expense during the years indicated. Information is provided in each category with respect to: (i) changes attributable to changes in volume (changes in volume multiplied by prior rate), (ii) changes attributable to changes in rate (changes in rate multiplied by prior volume),

and (iii) the net change. The changes attributable to the combined impact of volume and rate have been allocated proportionately to the changes due to volume and the changes due to rate.

				Year Ended December 31, 2001 Compared to Year Ended December 31, 2000									Year Ended December 31, 2000 Compared to Year Ended December 31, 1999
				Increase (Decrease) Due to									Increase (Decrease) Due to
				Volume			Rate			Net			Volume			Rate			Net
				(In Thousands)
Interest income:
Short-term investments				$	1,194		$	(493	)	$	701		$	398		$	203		$	601
Debt securities					(914	)		22			(892	)		(2,472	)		758			(1,714	)
Equity securities					(65	)		(271	)		(336	)		(326	)		478			152
Mortgage loans					9,608			(3,654	)		5,954			5,496			1,098			6,594
Money market loan participations					(569	)		(468	)		(1,037	)		58			457			515
Other commercial loans					227			(385	)		(158	)		705			107			812
Consumer loans					78			5			83			25			8			33

		Total interest income			9,559			(5,244	)		4,315			3,884			3,109			6,993

Interest expense:
	Deposits:
		NOW accounts			223			(98	)		125			91			57			148
		Savings accounts			6			(49	)		(43	)		(18	)		(3	)		(21	)
		Money market savings accounts			1,233			(1,517	)		(284	)		602			104			706
		Certificate of deposit accounts			1,270			(742	)		528			610			1,083			1,693

			Total deposits		2,732			(2,406	)		326			1,285			1,241			2,526
Borrowed funds					2,014			(8	)		2,006			807			77			884

			Total interest expense		4,746			(2,414	)		2,332			2,092			1,318			3,410

Net change in net interest income				$	4,813		$	(2,830	)	$	1,983		$	1,792		$	1,791		$	3,583

Quantitative and Qualitative Disclosure About Market Risk

Market risk is the risk of loss from adverse changes in market prices and/or interest rates. Since net interest income (the differential or spread between the interest earned on loans and investments and the interest paid on deposits and borrowings) is our primary source of revenue, interest rate risk is the most significant non-credit related market risk to which we are exposed. Net interest income is affected by changes in interest rates as well as fluctuations in the level and duration of our assets and liabilities.

Interest rate risk is the exposure of our net interest income to adverse movements in interest rates. In addition to directly impacting net interest income, changes in interest rates can also affect the amount of new loan originations, the ability of borrowers to repay variable rate loans, the volume of loan prepayments and refinancings, the carrying value of investment securities classified as available for sale and the flow and mix of deposits.

Our Asset/Liability Committee, comprised of several members of senior management, is responsible for managing interest rate risk in accordance with policies approved by the Board of Directors regarding acceptable levels of interest rate risk, liquidity and capital. The Committee reviews with the Board of Directors on a quarterly basis its activities and strategies, the effect of those strategies on our operating results, our interest rate risk position and the effect subsequent changes in

interest rates could have on our future net interest income. The Committee is actively involved in the planning and budgeting process as well as in the setting of pricing for our loan and deposit products.

The Committee manages interest rate risk through use of both earnings simulation and GAP analysis. Earnings simulation is based on actual cash flows and assumptions of management about future changes in interest rates and levels of activity (loan originations, loan prepayments and deposit flows). The assumptions are inherently uncertain and, therefore, actual results will differ from simulated results due to timing, magnitude and frequency of interest rate changes as well as changes in market conditions and strategies. The net interest income projection resulting from use of actual cash flows and management's assumptions ("Base Case") is compared to net interest income projections based on an immediate shift of 200 basis points (2.0%) upward or downward in the first year of the model. The following table indicates the estimated impact on net interest income over a one year period under scenarios of a 200 basis points change upward or downward as a percentage of Base Case earnings projections.

Changes in Interest Rates (Basis Points)	Estimated Percentage Change in Future Net Interest Income
+200 over one year	(6.25	)%
Base Case	—
-200 over one year	0.59	%

Our interest rate risk policy states that an immediate 200 basis points change upward or downward should not negatively impact estimated net interest income over a one year period by more than 15%.

The results shown above are based on the assumption that there are no significant changes in our operating environment and that short-term interest rates in the Base Case will increase 50 basis points over the next year. Further, in the case of the 200 basis points downward adjustment, it was assumed that it would not be possible to reduce the rates paid on certain deposit accounts by 200 basis points. Instead, it was assumed that NOW accounts would be reduced by 25 basis points, savings accounts by 100 basis points and money market savings accounts by 131 basis points. There can be no assurance that the assumptions used will be validated in 2002.

GAP analysis measures the difference between the assets and liabilities repricing or maturing within specific time periods. An asset-sensitive position (positive gap) indicates that there are more rate-sensitive assets than rate-sensitive liabilities repricing or maturing within specific time horizons, which would generally imply a favorable impact on net interest income in periods of rising interest rates and a negative impact in periods of falling rates. A liability-sensitive position (negative gap) would generally imply a negative impact on net interest income in periods of rising rates and a positive impact in periods of falling rates. GAP analysis has limitations because it cannot measure the effect of interest rate movements and competitive pressures on the repricing and maturity characteristics of interest-earning assets and interest-bearing liabilities.

The table below shows our interest sensitivity gap position as of December 31, 2001. NOW accounts, savings accounts and money market savings accounts are immediately withdrawable and the

rates paid on such accounts can be changed at any time. Accordingly, they are included in the one year or less period even though we consider it unlikely that such deposits will be immediately withdrawn.

			At December 31, 2001
			One Year or Less			More Than One Year to Two Years			More Than Two Years to Three Years			More Than Three Years to Four Years			More Than Four Years to Five Years			More Than Five Years to Ten Years			More Than Ten Years			Total
			(Dollars in Thousands)
Interest-earning assets(1):
	Short-term investments		$	69,432		$	—		$	—		$	—		$	—		$	—		$	—		$	69,432
		Weighted average rate		1.75	%
	Debt securities(2)			68,865			49,135			28,898			1,053			702			387			3,882			152,922
		Weighted average rate		6.51	%		6.19	%		4.87	%		6.97	%		5.77	%		6.09	%		7.85	%
	Mortgage loans(3)			236,835			116,142			99,541			100,443			155,380			79,877			6,150			794,368
		Weighted average rate		6.51	%		7.62	%		7.60	%		7.99	%		7.19	%		7.43	%		7.87	%
	Money market loan participations			6,000			—			—			—			—			—			—			6,000
		Weighted average rate		1.95	%		—
	Other loans(3)			33,003			196			204			214			217			422			—			34,256
		Weighted average rate		5.52	%		12.30	%		13.75	%		15.04	%		13.47	%		8.97	%

	Total interest-earning assets			414,135			165,473			128,643			101,710			156,299			80,686			10,032			1,056,978
		Weighted average rate		5.57	%		7.20	%		7.00	%		7.99	%		7.19	%		7.43	%		7.86	%

Interest-bearing liabilities:
	NOW accounts			75,439			—			—			—			—			—			—			75,439
		Weighted average rate		0.50	%
	Savings accounts(4)			12,951			—			—			—			—			—			—			12,951
		Weighted average rate		1.50	%
	Money market savings accounts			259,695			—			—			—			—			—			—			259,695
		Weighted average rate		2.32	%
	Certificate of deposit accounts			193,429			39,350			11,262			7,341			2,998			—			—			254,380
		Weighted average rate		4.16	%		4.93	%		4.94	%		6.38	%		5.23	%
	Borrowed funds			11,300			32,950			32,000			43,000			47,880			11,000			—			178,130
		Weighted average rate		6.54	%		4.96	%		5.91	%		6.73	%		5.30	%		5.96	%

	Total interest-bearing liabilities			552,814			72,300			43,262			50,341			50,878			11,000			—			780,595
		Weighted average rate		2.78	%		4.94	%		5.66	%		6.68	%		5.30	%		5.96	%

Interest sensitivity gap(5)				(138,679	)		93,173			85,381			51,369			105,421			69,686			10,032			276,383
Impact of interest rate swap				(5,000	)		—			—			5,000			—			—			—
		Weighted average rate		2.43	%								5.94	%

Adjusted interest sensitivity gap			$	(133,679	)	$	93,173		$	85,381		$	46,369		$	105,421		$	69,686		$	10,032		$	276,383

Cumulative interest sensitivity gap			$	(133,679	)	$	(40,506	)	$	44,875		$	91,244		$	196,665		$	266,351		$	276,383

Cumulative interest sensitivity gap as a percentage of total assets				(12.16	)%		(3.68	)%		4.08	%		8.30	%		17.89	%		24.22	%		25.13	%
Cumulative interest sensitivity gap as a percentage of total interest-earning assets				(12.65	)%		(3.83	)%		4.25	%		8.63	%		18.61	%		25.20	%		26.15	%

(1): Interest-earning assets are included in the period in which the balances are expected to be redeployed and/or repriced as a result of anticipated prepayments, scheduled rate adjustments and contractual maturities.
(2): Debt securities include all debt securities. The unrealized gain on securities, all other marketable equity securities and restricted equity securities are excluded.
(3): For purposes of the gap analysis, the allowance for loan losses, deferred loan fees and non-performing loans have been excluded.
(4): Savings accounts include interest-bearing mortgagors' escrow accounts.
(5): Interest sensitivity gap represents the difference between interest-earning assets and interest-bearing liabilities.

Our cumulative interest sensitivity gap of assets and liabilities with expected maturities of more than five years increased from approximately $59.4 million, or 5.7% of total assets at December 31, 2000, to $79.7 million, or 7.3% of total assets at December 31, 2001. The increase since 2000 resulted from having a significant part of our loan originations and refinancings underwritten at fixed rates for periods of five years or more. A lower interest rate environment prompted borrowers to seek fixed rate rather than adjustable rate financing. Competitive market factors precluded us from making adjustable rate loans. While the amount of added interest rate risk from fixed rate loan originations and refinancings is within tolerable limits, management recognizes that continuation of fixed rate loan production increasingly exposes our earnings to changes in the interest rate environment. Further use of fixed rate borrowings from the FHLB for extended periods of time will continue to be considered by management to mitigate interest rate risk if market conditions so warrant.

Other Market Risks. Included in our investment portfolio at December 31, 2001 were equity securities with a market value of $17.2 million. Included in that amount were net unrealized gains of $7.7 million. Movements in the market price of securities may affect the amount of gains or losses ultimately realized by us from the sale of our equity securities.

Comparison of Operating Results for the Years Ended December 31, 2001 and 2000

General. Net income for the year ended December 31, 2001 was $19.3 million, or $0.72 per share ($0.71 on a diluted basis), compared to $21.6 million, or $0.80 per share (on a basic and diluted basis) for the year ended December 31, 2000. The 2001 and 2000 years included, on an after-tax basis, securities gains of $2.2 million ($0.08 per share) and $5.2 million ($0.19 per share), respectively, and net operating losses related to Lighthouse of approximately $1.6 million ($0.06 per share) and $2.5 million ($0.09 per share), respectively. The 2001 year also included an after-tax gain of $1.9 million ($0.07 per share) from termination of Brookline Savings Bank's defined benefit pension plan and an after-tax restructuring charge of $2.3 million ($0.09 per share) related to the merger of Lighthouse into Brookline Savings Bank.

Interest Income. Total interest income was $76.0 million in 2001 compared to $71.6 million in 2000, an increase of $4.4 million, or 6.2%. The additional income resulting from growth in the average amount of interest-earning assets ($124.7 million, or 13.4%) between the two years was offset in part by the effect of a decline in the average yield earned on assets from 7.71% in 2000 to 7.21% in 2001.

Interest income on loans, excluding money market loan participations, was $61.7 million in 2001 compared to $55.8 million in 2000, an increase of $5.9 million, or 10.5%. The additional income resulting from an increase in average loans outstanding of $125.2 million, or 18.7%, was offset in part by the effect of a decline in the average yield on loans from 8.32% in 2000 to 7.75% in 2001.

The average balances invested in short-term investments and money market loan participations during 2001 were $45.1 million and $20.7 million, respectively, and the yields earned on those balances were 4.29% and 4.90%, respectively. The average balances during 2000 were $19.6 million and $30.7 million, respectively, and the yields earned on those balances were 6.29% and 6.69%, respectively. We maintained more liquidity in 2001 in anticipation of outflows of higher cost deposits obtained in 2000 by Lighthouse and through a special promotion initiated by Brookline Savings Bank in the fourth quarter of 2000. In addition, we opted to invest in shorter-term debt securities so as to have the flexibility to seek longer-term debt securities when rates rise in the future.

Interest income on debt securities declined from $11.1 million in 2000 to $10.2 million in 2001 due primarily to a decline in the average balances invested in debt securities from $180.0 million in 2000 to $165.2 million in 2001. Yields earned on those balances were 6.16% and 6.17%, respectively.

Interest Expense. Interest expense on deposits was $23.6 million in 2001, a 1.4% increase from the $23.2 million expended in 2000. The additional expense resulting from an increase in average interest-

bearing deposits outstanding of $76.1 million, or 14.5%, between the two years was substantially offset by a decline in the average rate paid on such deposits from 4.44% in 2000 to 3.93% in 2001. The decline in rates resulted primarily from the actions of the Federal Reserve described earlier herein and the movements in deposits mentioned in the second preceding paragraph above.

Average borrowings from the FHLB increased from $120.0 million in 2000 to $153.0 million in 2001. The average rate paid on those borrowings remained at 6.11% in 2000 and 2001. Borrowings from the FHLB are usually obtained in connection with our management of interest rate risk.

Provision for Loan Losses. We provided $974,000 for loan losses in 2001 and $427,000 in 2000. The provisions were made in light of the growth by category in the loan portfolio.

Non-Interest Income. Net securities gains were $3.5 million in 2001 compared to $8.3 million in 2000. In 2001, we recognized a gain of $3.7 million from termination of Brookline Savings Bank's defined benefit pension plan.

Fees and charges increased from $1.0 million in 2000 to $1.9 million in 2001 primarily as a result of higher fees from mortgage loan prepayments ($730,000 in 2001 compared to $32,000 in 2000) and from deposit services ($849,000 in 2001 compared to $613,000 in 2000). In 2001, $241,000 was charged to earnings in connection with accounting for Brookline Bancorp, Inc.'s outstanding swap contract on a fair value basis.

Non-Interest Expense. Excluding a restructuring charge of $3.9 million in 2001, the total of Lighthouse- related expenses charged to Lighthouse and Brookline Savings Bank during 2001 was $4.0 million compared to $4.9 million in 2000. See notes 18 and 19 of the notes to consolidated financial statements presented elsewhere in this prospectus for further information about Lighthouse's expenses.

Expense related to the recognition and retention plan ("RRP") approved by stockholders in 1999 was $167,000 in 2001 compared to $1.2 million in 2000. RRP expense is allocated to the periods over which the underlying shares awarded vest.

Excluding RRP and Lighthouse-related expenses, total non-interest expense increased $2.0 million, or 19.2%, from $10.6 million in 2000 to $12.6 million in 2001. Of the increase, $907,000 related to personnel costs. The fourth quarter of 2001 included salary and benefits to former Lighthouse employees who joined Brookline Savings Bank. Costs related to a new branch were incurred throughout 2001 and only for part of the fourth quarter of 2000. Replacement of Brookline Savings Bank's defined benefit pension plan with a defined contribution plan resulted in a $256,000 increase in pension expense and the expense of the employee stock ownership plan increased $98,000 primarily because of the 44% rise in the market value of our common stock during 2001. (Employee stock ownership plan expense is determined by the market value of our stock).

Equipment and data processing costs increased $591,000 due primarily to the servicing of former Lighthouse customers by Brookline Savings Bank in the fourth quarter of 2001, higher website and ATM servicing costs and expenses related to a new teller platform, asset/liability management software and equipment purchased for a new branch. Higher expenses were also incurred for regulatory assessments due to the change to a federal charter and occupancy due to rent escalations on existing premises and the addition of the new branch.

Income Taxes. The effective rate of income taxes was 36.7% in 2001 compared to 35.7% in 2000. The increase was attributable primarily to the non-deductibility of a $587,000 excise tax payable to the federal government in connection with the termination of Brookline Savings Bank's defined benefit pension plan.

Comparison of Operating Results for the Years Ended December 31, 2000 and December 31, 1999

General. Net income for the year ended December 31, 2000 was $21.6 million, or $0.80 per share, compared to $20.8 million, or $0.74 per share for the year ended December 31, 1999, an improvement of 4.1% (8.1% on a per share basis). Basic and diluted earnings per share were the same in each year. The higher rate of per share improvement resulted primarily from fewer shares outstanding due to stock repurchases.

The 2000 and 1999 years included gains from sales of marketable equity securities of $8.3 million ($5.2 million on an after-tax basis, or $0.19 per share) and $7.4 million ($4.5 million on an after-tax basis, or $0.16 per share), respectively, and expense related to the RRP of $1.2 million ($725,000 on an after-tax basis, or $0.03 per share) and $3.6 million ($2.1 million on an after-tax basis, or $0.08 per share), respectively. The 2000 and 1999 years also included on an after-tax basis $2.5 million, or $0.09 per share, and $392,000, or $0.01 per share, respectively, of net loss related to the operations and start-up of Lighthouse. Excluding securities gains, the expense of the RRP and Lighthouse's net losses, and adding back foregone income on our investment in Lighthouse, net operating income was $20.3 million, or $0.76 per share in 2000 compared to $18.7 million, or $0.67 per share in 1999, an increase of 8.5% (13.4% on a per share basis).

Interest Income. Total interest income was $71.6 million in 2000 compared to $64.8 million in 1999, an increase of $6.8 million, or 10.4%. The additional income resulted from growth in the average amount of interest-earning assets ($35.2 million, or 3.9%) between the two years and an improvement in the average yield earned on assets from 7.24% in 1999 to 7.71% in 2000.

Interest income on loans, excluding interest on money market loan participations, was $55.8 million in 2000 compared to $48.6 million in 1999, an increase of $7.2 million, or 14.8%. The improvement resulted from $75.2 million, or 12.6%, of growth in the average amount of loans outstanding between the two years and an increase in the average yield earned on loans from 8.12% in 1999 to 8.32% in 2000. The higher yield was attributable primarily to the six separate increases in the federal funds rate by the Federal Reserve between June 1999 and May 2000.

Interest income on short-term investments increased $601,000, or 94.8%, as a result of a $6.8 million, or 53.2%, increase in the average balance of short-term investments and an increase in yields earned from 4.95% in 1999 to 6.29% in 2000. Interest income on debt securities decreased $1.7 million, or 13.4%, as the benefit derived from higher yields (6.16% in 2000 compared to 5.80% in 1999) was more than offset by the effect on revenue of a $40.8 million, or 18.5%, decline in average balances invested in debt securities.

Interest Expense. Interest expense on deposits was $23.2 million in 2000, a 12.2% increase from the $20.7 million expended in 1999. The increase was due to a $32.9 million, or 6.7%, increase in the average balance of interest-bearing deposits between the two years and a rise in the average rate paid on such deposits from 4.23% in 1999 to 4.44% in 2000, due in part to the actions of the Federal Reserve previously mentioned herein and to higher rates offered to customers of Lighthouse and by Brookline Savings Bank in a special certificate of deposit promotion in November 2000.

Average borrowings from the FHLB increased from $106.8 million in 1999 to $120.0 million in 2000. The average rate paid on those balances were 6.04% and 6.11%, respectively.

Provision for Loan Losses. We provided $427,000 for loan losses in 2000 and $450,000 in 1999. The provisions were made in light of the growth by category in the loan portfolio.

Non-Interest Income. Gains on sales of securities amounted to $8.3 million in 2000 and $7.4 million in 1999. Other real estate owned income declined from $711,000 in 1999 to $172,000 in 2000. In 1999, a commercial property in foreclosure was sold at a gain of $615,000, including reversal of a $150,000 valuation allowance previously established for the property. In 2000, we sold a foreclosed

property at a gain of $69,000, including reversal of an $86,000 valuation allowance previously established.

Fees and charges increased from $868,000 in 1999 to $1.0 million in 2000 primarily as a result of higher fees from deposit services. The increase in other income from $98,000 in 1999 to $460,000 in 2000 resulted primarily from $351,000 of income in 2000 ($20,000 in 1999) representing Brookline Bancorp, Inc.'s 30.5% equity interest in the earnings of Eastern Funding LLC, a company specializing in the financing of coin operated laundry and dry cleaning equipment in the greater metropolitan New York area and selected other locations in the Northeast. Brookline Bancorp, Inc. made the investment at the end of September 1999.

Non-Interest Expense. Expense related to the RRP amounted to $1.2 million in 2000 and $3.6 million in 1999. Expenses related to Lighthouse amounted to $4.9 million in 2000, $746,000 of which were start-up expenses, and $675,000 in 1999, all of which were start-up expenses.

Excluding RRP and Lighthouse expenses, total non-interest expense increased $746,000, or 7.5%. Most of the increase resulted from higher personnel costs (up $225,000, or 3.7%), higher marketing expenses (up $214,000, or 42.5%), higher data processing expenses (up $154,000, or 24.8%) and higher professional fees (up $99,000, or 27.1%). Personnel costs were affected positively by a $68,000 reduction in pension expense. Marketing efforts were expanded in 2000 so as to attract new deposit customers from other financial institutions going through divestitures and to promote the new branch opened by Brookline Savings Bank in October 2000. Data processing expenses were higher because amounts billed for services in 1999 were discounted from normal rates due to a vendor not meeting certain performance criteria. The higher professional fees resulted from special corporate initiatives and a review of security controls pertaining to the electronic capabilities of Brookline Savings Bank.

Income Taxes. The effective rate of income taxes was 35.7% in 2000 and 35.3% in 1999. State income taxes remained at low levels in both years because of the existence of a real estate investment subsidiary and utilization of investment security subsidiaries.

Liquidity and Capital Resources

Brookline Bancorp, Inc.'s primary sources of funds are deposits, principal and interest payments on loans and debt securities and borrowings from the FHLB. While maturities and scheduled amortization of loans and investments are predictable sources of funds, deposit flows and mortgage loan prepayments are greatly influenced by interest rate trends, economic conditions and competition.

During the past few years, the combination of generally low interest rates on deposit products and the attraction of alternative investments such as mutual funds and annuities has resulted in little growth or a net decline in deposits in certain time periods. Based on its monitoring of historic deposit trends and its current pricing strategy for deposits, management believes Brookline Bancorp, Inc. will retain a large portion of its existing deposit base.

From time to time, Brookline Bancorp, Inc. utilizes advances from the FHLB primarily in connection with its management of the interest rate sensitivity of its assets and liabilities. In 2001, Brookline Bancorp, Inc. repaid advances of $18.5 million and obtained new advances of $63.2 million while in 2000, Brookline Bancorp, Inc. repaid advances of $14.3 million and obtained new advances of $38.9 million. Total advances outstanding at December 31, 2001 amounted to $178.1 million and Brookline Bancorp, Inc. had the capacity to increase that amount to $311.7 million.

Brookline Bancorp, Inc.'s most liquid assets are cash and due from banks, short-term investments, debt securities and money market loan participations that generally mature within 90 days. At December 31, 2001, such assets amounted to $90.7 million, or 8.3% of total assets.

At December 31, 2001, Brookline Savings Bank exceeded all regulatory capital requirements. Brookline Savings Bank's Tier 1 capital was $228.6 million, or 21.75% of adjusted assets. The minimum required Tier 1 capital ratio is 4.00%.

Impact of Inflation and Changing Prices

The consolidated financial statements of Brookline Bancorp, Inc. and notes thereto, presented elsewhere herein, have been prepared in accordance with accounting principles generally accepted in the United States of America, which require the measurement of financial position and operating results in terms of historical dollars without considering the change in the relative purchasing power of money over time and due to inflation. The impact of inflation is reflected in the increased cost of Brookline Savings Bank's operations. Unlike most industrial companies, nearly all the assets and liabilities of Brookline Savings Bank are monetary. As a result, interest rates have a greater impact on Brookline Savings Bank's performance than the effects of inflation generally. Interest rates do not necessarily move in the same direction or to the same extent as changes in the price of goods and services.

Impact of Recent Accounting Pronouncements

In June 2001, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards ("SFAS") No. 141 "Business Combinations," which requires that all business combinations initiated after June 30, 2001 be accounted for using the purchase method. The pooling-of-interests method of accounting is prohibited except for combinations initiated before June 30, 2001. The remaining provisions of SFAS No. 141 relating to business combinations accounted for by the purchase method, including identification of intangible assets, accounting for negative goodwill, financial statement presentation and disclosure, are effective for combinations completed after June 30, 2001. Management will follow the provisions of SFAS No. 141 for any acquisitions initiated after July 1, 2001.

In June 2001, the FASB issued SFAS No. 142 "Goodwill and Intangible Assets," which prescribed accounting for all purchased goodwill and intangible assets. Pursuant to SFAS No. 142, acquired goodwill is not amortized, but is tested for impairment at the reporting unit level annually and whenever an impairment indicator arises. All goodwill should be assigned to reporting units that are expected to benefit from the goodwill. When an entity reorganizes its reporting structure, goodwill should be reallocated to reporting units based on the relative fair values of the units. Goodwill impairment should be tested with a two-step approach. First, the fair value of the reporting unit should be compared to its carrying value, including goodwill. If the reporting unit's carrying value exceeds its fair value, then any goodwill impairment should be measured as the excess of goodwill's carrying value over its implied fair value. The implied fair value of goodwill should be calculated in the same manner as goodwill is calculated for a business combination, using the reporting unit's fair value as the "purchase price" over the amounts allocated to assets, including unrecognized intangible assets, and liabilities of the reporting unit. Goodwill impairment losses should be reported in the income statement as a separate line item within operations, except for such losses included in the calculation of a gain or loss from discontinued operations.

An acquired intangible asset, other than goodwill, should be amortized over its useful economic life. The useful life of an intangible asset is indefinite if it extends beyond the foreseeable horizon. If an asset's life is indefinite, the asset should not be amortized until the life is determined to be finite. Intangible assets being amortized should be tested for impairment in accordance with SFAS No. 121. Intangible assets not being amortized should be tested for impairment, annually and whenever there are indicators of impairment, by comparing the asset's fair value to its carrying amount.

SFAS No. 142 is effective for fiscal years beginning after December 15, 2001. SFAS No. 142 will have no current effect on our financial position or results of operations.

BUSINESS OF BROOKLINE BANCORP, INC. AND BROOKLINE SAVINGS BANK

General

Brookline Bancorp, Inc. is a federally chartered stock holding company that owns all of the outstanding common stock of Brookline Savings Bank. As of December 31, 2001, Brookline Bancorp, Inc. had 26,767,549 issued and outstanding shares of common stock. Brookline Bancorp, MHC owns 15,420,350 shares of Brookline Bancorp, Inc.'s outstanding common stock. The remaining 11,347,199 shares are held by the public. At December 31, 2001, Brookline Bancorp, Inc. had consolidated assets of $1.1 billion, deposits of $620.9 million and stockholders' equity of $285.4 million. Following the conversion, Brookline Bancorp, Inc. will cease to exist, but will be succeeded by a new Delaware corporation with the same name.

Brookline Savings Bank is a community-oriented savings bank that was originally chartered by the Commonwealth of Massachusetts in 1871 and converted to a federal charter in 2001. Its principal business consists of accepting retail deposits from the general public through its branch offices and investing those deposits, together with funds generated from operations and borrowings, primarily in real estate mortgage loans and various debt and equity securities. Brookline Savings Bank emphasizes the origination of multi-family and commercial real estate mortgage loans as well as one-to-four family residential mortgage loans. It also originates construction and development mortgage loans, home equity loans, commercial participation loans, other commercial loans and consumer loans. We operate through our five full-service banking officers in Brookline, Massachusetts and one in Newton, Massachusetts.

On April 12, 2000, Brookline Bancorp, Inc. received regulatory approval to organize Lighthouse Bank as New England's first de novo internet-only bank. Brookline Bancorp, Inc. made a $25 million capital investment in Lighthouse Bank at the beginning of May 2000. Lighthouse Bank opened for business in June 2000. In April 2001, Brookline Bancorp, Inc. determined that Lighthouse Bank was not viable as an internet-only subsidiary, and on July 17, 2001, the existence of Lighthouse Bank as a separate corporate entity was terminated by its merger into Brookline Savings Bank. Brookline Savings Bank continues to provide on-line electronic banking services to the former customers of Lighthouse.

In contemplation of the merger, a pre-tax restructuring charge of $3.9 million was recorded in the second quarter of 2001 to provide for merger-related expenses. Those expenses included personnel severance payments, termination of contracts with third party vendors, occupancy rent obligations, write-offs of equipment and software, and other miscellaneous items. Certain operating expenses associated with servicing former Lighthouse Bank customers continued through the third quarter of 2001. As of September 17, 2001, Lighthouse Bank customers accounts were transferred to Brookline Savings Bank's systems and records. See notes 18 and 19 of the notes to the consolidated financial statements included in this prospectus for information about the start-up expenses and operating results of Lighthouse Bank.

Business Strategy

Our business strategy is to grow and enhance our profitability by (1) acquiring other financial institutions, (2) increasing our lending capabilities, especially multi-family and commercial real estate loans, (3) increasing our retail deposit generating capabilities through branch expansion, (4) emphasizing retail and small business banking, (5) maintaining high asset quality and (6) continuing to emphasize operating efficiencies and cost control.

Acquiring other financial institutions. Significant consolidation has taken place within the financial institutions sector during the past decade. Consolidation is expected to continue, especially in geographic areas such as Massachusetts that continue to have an abundance of financial institutions. Upon completion of the conversion, our new corporate structure will enable us to be more competitive in pursuing bank and branch acquisition opportunities. We currently have no specific plans, arrangements or understandings regarding any such acquisitions.

Increasing our lending capabilities. Many of our multi-family and commercial real estate loan customers have multiple loans outstanding with us. Occasionally, our total loans outstanding to a single borrower has exceeded the maximum limit under our loan policies. In these instances, we have sought other financial institutions to participate as co-lenders in order to stay within our limits. As a result of the additional capital from the offering, we will increase our loan limits and retain quality loans that would otherwise be directed to other financial institutions. Increased loan limits also will allow us to originate larger loans.

Increasing our retail deposit generating capabilities through branch expansion. We plan to establish one new branch per year to expand our market presence and to facilitate growth of our retail and commercial deposits.

Emphasizing retail and small business banking. Recently, we engaged a consulting firm to review and evaluate our retail banking program. We implemented several of the consultants' recommendations. We intend to offer new loan and deposit products and services for consumers and small business customers. We also expect to add personnel in the areas of business development, sales management and retail administration.

Maintaining high asset quality. Although our loan portfolio consists primarily of higher risk loans (multi-family and commercial real estate mortgage loans) rather than one-to-four family mortgage loans, we have consistently maintained a high level of asset quality. Aggregate loan charge-offs have not exceeded $250,000 since 1993. Despite our favorable loan loss experience, we consistently have maintained a large allowance for loan losses in recognition of the greater inherent risks in multi-family and commercial real estate mortgage loans.

Continuing emphasis on operating efficiencies and cost control. Our operating efficiency ratio (the ratio of non-interest expenses divided by the sum of non-interest income and net-interest income) has compared favorably with other financial institutions. A 50% operating efficiency ratio is generally considered better than average, and our operating efficiency ratio has been below 30% (excluding recognition and retention plan expense and the operations of Lighthouse Bank) since 1995. While our favorable ratio is due in part to our high capital level, it is also attributable to our emphasis on cost controls. We plan to continue to monitor and control costs, although we recognize that our business strategies will require greater investments in personnel, marketing, premises and equipment.

Market Area and Credit Risk Concentration.

Our lending activities are concentrated primarily in the greater Boston metropolitan area and eastern Massachusetts. The greater Boston metropolitan area benefits from the presence of numerous institutions of higher learning, medical care and research centers and the corporate headquarters of several significant mutual fund investment companies. Eastern Massachusetts also has many high technology companies employing personnel with specialized skills. These factors affect the demand for residential homes, multi-family apartments, office buildings, shopping centers, industrial warehouses and other commercial properties.

Brookline's urban and suburban market area has a large number of apartment buildings, condominiums and office buildings. As a result, for many years, we have emphasized multi-family and commercial real estate mortgage lending. These types of loans typically generate higher yields, but also

involve greater credit risk than one-to-four family mortgage loans. Many of our borrowers have more than one multi-family or commercial real estate loan outstanding with us. Moreover, the loans are concentrated in the market area described in the preceding paragraph.

Competition

We face significant competition both in making loans and in attracting deposits. The Boston metropolitan area has a high density of financial institutions, many of which are branches of significantly larger institutions which have greater financial resources than Brookline Bancorp, Inc., and all of which are our competitors to varying degrees. Our competition for loans comes principally from commercial banks, savings banks, savings and loan associations, mortgage banking companies, credit unions, insurance companies and other financial service companies. Our most direct competition for deposits has historically come from commercial banks, savings banks, savings and loan associations and credit unions. We face additional competition for deposits from non-depository competitors such as the mutual fund industry, securities and brokerage firms and insurance companies.

Lending Activities

General. Our loan portfolio consists primarily of first mortgage loans secured by multi-family, commercial and one-to-four family residential, real estate properties located in our primary lending area. Another component of our loan portfolio consists of participations in commercial loans to national companies and organizations originated and serviced primarily by money center banks. Generally, the participations mature between one day and three months and we consider them an alternative short-term investment for liquidity management purposes rather than traditional commercial loans. We also offer construction and development loans, commercial lines of credit primarily to condominium associations, home equity and second mortgage loans and other consumer loans.

We rely on community contacts as well as referrals from existing customers, attorneys and other real estate professionals to generate business within our lending area. In addition, existing borrowers are an important source of business since many of our multi-family and commercial real estate loan customers have had or currently have more than one loan outstanding with us. Two commissioned loan originators on our staff also generate residential mortgage loans. Our ability to originate loans depends on the strength of the economy, trends in interest rates, customer demands and competition from other lenders.

We have developed underwriting policies to control the inherent risks in origination of loans. The policies address approval limits, loan-to-value ratios, appraisal requirements, debt service coverage ratios, loan concentration limits and other matters relevant to loan underwriting.

Multi-family and Commercial Real Estate Mortgage Lending. We are primarily engaged in multi-family and commercial real estate mortgage lending. At December 31, 2001 and 2000, such loans represented 69.8% and 73.2%, respectively, of gross loans, exclusive of money market loan participations. We intend to continue to emphasize these types of loans depending on the demand for such loans and trends in the real estate market and the economy.

We consider a number of factors in originating multi-family and commercial real estate mortgage loans. We evaluate the qualifications and financial condition of the borrower (including credit history), profitability and expertise, as well as the value and condition of the underlying property. When evaluating the qualifications of the borrower, we consider the financial resources of the borrower, the borrower's experience in owning or managing similar property and the borrower's payment history with us and other financial institutions. In evaluating the underlying property, the factors we consider include the net operating income of the mortgaged premises before debt service and depreciation, the debt service coverage ratio (the ratio of net operating income to debt service) and the ratio of the loan amount to the appraised value.

Generally, multi-family and commercial real estate mortgage loans are made for five to ten year terms, with an amortization period of twenty to twenty-five years, and are priced on an adjustable-rate basis with the borrower's option to fix the interest rate for the first few years. At the borrower's option, at the time of origination or later during the loan term, the loan may be converted to a fixed interest rate loan, provided the fixed-rate period selected by the borrower does not exceed the original term of the loan. Generally, a yield maintenance fee and other fees are collected when a fixed rate loan is paid off prior to its maturity.

Multi-family mortgage loans may be made in an amount up to 75% of the lower of the appraised value (as determined by Brookline Savings Bank or a qualified independent appraiser, whichever is lower) or the sales price of the underlying property, provided the debt service coverage ratio is not less than 125%. Non-owner occupied condominium loans are generally limited to 70% of the appraised value. Our underwriting policies and procedures for originating commercial real estate mortgage loans are similar to those followed for originating multi-family mortgage loans. Generally, we consider loans secured by commercial real estate properties to involve greater risk than multi-family mortgage loans since they are even more dependent on the ability of the borrowers to profitably manage a business, and are more susceptible to adverse conditions in the real estate market and economy. As a result, to offset the greater risk, we may require a somewhat higher debt service coverage ratio and, in some cases, a higher interest rate than for multi-family mortgage loans.

Since 1998, a stable and then declining interest rate environment has prompted many multi-family and commercial real estate borrowers to exercise their options to convert adjustable-rate loans to fixed-rate loans. Additionally, many new loans originated since 1998 have been priced at inception on a fixed-rate basis generally for periods ranging from two to seven years. If interest rates increase during the fixed-rate phase of these loans, our net interest income would be negatively affected. Occasionally, we have partially funded loans originated on or converted to a fixed-rate basis by borrowing funds from the FHLB on a fixed-rate basis for periods that approximate the fixed-rate terms of the loans.

Construction and Development Lending. At December 31, 2001, construction and development loans amounted to $20.9 million, $4.9 million of which had not been advanced as of that date. Of the $20.9 million, $10.8 million is for the construction of multi-family properties, $3.2 million is for the construction of commercial properties, $3.5 million is for the construction of one-to-four family residential homes, $2.9 million is for the construction of condominiums, and $493,000 is for land loans. Different criteria are applied in underwriting construction loans for which the primary source of repayment is the sale of the property than in underwriting construction loans for which the primary source of repayment is the stabilized cash flow from the completed project. For those loans where the primary source of repayment is from resale of the property, in addition to the normal credit analysis performed for other loans, we also analyze project costs, the attractiveness of the property in relation to the market in which it is located and demand within the market area. For those construction loans where the source of repayment is the stabilized cash flow from the completed project, we analyze not only project costs but also how long it might take to achieve satisfactory occupancy and the reasonableness of projected rental rates in relation to market rental rates.

For owner-occupied, one-to-four family properties, we will lend up to 95% of the lesser of appraised value upon completion of construction or the cost of construction, provided private mortgage insurance coverage is obtained for any loan with a loan-to-value or loan-to-cost ratio in excess of 80%. For loans on one-to-four family properties being constructed for sale, we lend up to 75% of the lesser of the competed value or project cost.

Construction and development financing is generally considered to involve a higher degree of risk than long-term financing of improved, occupied real estate. Risk of loss on a construction loan largely depends upon the accuracy of the initial estimate of construction costs, the estimated time to sell or rent the completed property at an adequate price or rate of occupancy and market conditions. If the

estimates and projections prove to be inaccurate, we may be confronted with a project which, upon completion, has a value that is insufficient to assure full loan repayment.

Commercial Lending. Commercial loans amounted to $42.6 million at December 31, 2001 compared to $33.2 million at December 31, 2000. At both dates, the portfolio included a $10.0 million loan participation maturing on June 14, 2002 and loans to condominium associations for the purpose of funding capital improvements. Loans to condominium associations amounted to $23.5 million at December 31, 2001 and $15.8 million at December 31, 2000. Typically, such loans are made for five to ten year terms and are secured by a general assignment of the revenue of the condominium association. Among the factors considered in the underwriting of such loans are the level of owner occupancy, the financial condition and history of the condominium association, the attractiveness of the property in relation to the market in which it is located and the reasonableness of estimates of the cost of capital improvements to be made. Depending on loan size, funds are advanced as capital improvements are made and, in more complex situations, after completion of engineering inspections.

One-to-Four Family Mortgage Lending. We offer both fixed-rate and adjustable-rate mortgage loans secured by one-to-four family residences. Loans are originated in amounts up to 95% of the lower of the appraised value or selling price of the property securing the loan. We require private mortgage insurance for loans in excess of an 80% loan-to-value ratio. Generally, we do not hold fixed-rate residential mortgage loans in our loan portfolio.

Second Mortgage Lending. We also make second mortgage loans on multi-family and other types of commercial real estate properties. Generally, we make second mortgage loans only on properties where we hold the first mortgage. The underwriting criteria for these loans is similar to that followed in underwriting first mortgage loans on multi-family and commercial real estate loans. Debt service coverage of the combined first and second mortgage loan balances is typically expected to be at least 125% and the loan to value ratio of the combined first and second mortgage loan balances is expected to be no higher than 75%. The repayment period for second mortgage loans is generally shorter than that for first mortgage loans and the interest rate is usually adjustable at a percent that is higher than the rate charged on the first mortgage loan.

Loan Approval Procedures and Authority. Brookline Savings Bank's senior vice president of lending and an authorized vice president of lending may approve home equity loans up to $150,000. Brookline Savings Bank's President may approve any loan up to and including $250,000. Brookline Savings Bank's President or the senior vice president of lending and an authorized lending vice president, may approve any one-to-four family owner-occupied loan up to and including $500,000. The Chief Executive Officer may approve any one-to-four family owner-occupied loan up to and including $750,000. In addition, the Chief Executive Officer may approve any other type of loan up to and including $500,000. The Loan Committee (consisting of the Chief Executive Officer and two outside directors) must approve all one-to-four family owner-occupied loans in excess of $750,000, but not greater than $1,500,000. The Loan Committee also must approve any other types of loans in excess of $500,000 but not greater than $1,000,000. All one-to-four family owner-occupied loans in excess of $1,500,000 and other types of loans in excess of $1,000,000 must be approved by the Executive Committee (consisting of the Chief Executive Officer and four outside directors). All loan requests from borrowers with existing loan relationships in excess of $2,000,000 are presented to the Executive Committee for approval. Generally, on loans in excess of $1,500,000 where there is personal recourse against the borrower or a guarantor, the Credit Review Officer reviews the loan file and provides an analysis of the financial capacity of the borrower or guarantors.

The Board of Directors also approves annually our independent appraisers and our appraisal policy. Generally, we require an environmental site assessment to be performed by an independent professional for all non-residential mortgage loans. Our policy requires title and hazard insurance on all mortgage loans. In addition, we may require borrowers to make payments to a mortgage escrow account for the payment of property taxes. Any exceptions to our underwriting policies must be approved by our Loan Committee for loans up to $1 million and by the Executive Committee for loans over $1 million.

The following table sets forth the comparison of our loan portfolio in dollar amounts and in percentages by type of loan at the dates indicated.

			At December 31,
			2001					2000					1999					1998					1997
			Amount			Percent of Total		Amount			Percent of Total		Amount			Percent of Total		Amount			Percent of Total		Amount			Percent of Total
			(Dollars in Thousands)
Mortgage loans:
	One-to-four family		$	159,887		18.25	%	$	114,411		15.04	%	$	74,889		11.13	%	$	64,467		11.19	%	$	68,907		14.25	%
	Multi-family			338,973		38.70			300,841		39.55			297,270		44.18			262,678		45.58			219,909		45.50
	Commercial real estate			272,061		31.06			255,895		33.65			221,330		32.89			197,593		34.29			149,540		30.94
	Construction and development			20,901		2.38			19,947		2.62			24,719		3.67			17,255		2.99			13,382		2.77
	Home equity			8,924		1.02			6,596		0.87			5,800		0.86			5,505		0.96			5,276		1.09
	Second			29,408		3.36			27,236		3.58			16,328		2.43			13,944		2.42			15,855		3.28

		Total mortgage loans		830,154		94.77			724,926		95.31			640,336		95.16			561,442		97.43			472,869		97.83
Commercial loans				42,637		4.87			33,205		4.36			30,514		4.54			13,051		2.26			9,074		1.88
Consumer loans				3,130		0.36			2,488		0.33			2,012		0.30			1,775		0.31			1,393		0.29

		Total gross loans, excluding money market loan participations		875,921		100.00	%		760,619		100.00	%		672,862		100.00	%		576,268		100.00	%		483,336		100.00	%

Less:
	Unadvanced funds on loans			(47,157	)				(43,030	)				(35,746	)				(26,096	)				(9,352	)
	Deferred loan origination fees			(404	)				(1,030	)				(1,550	)				(1,604	)				(1,562	)
	Unearned discounts			—					—					(10	)				(10	)				(10	)

		Total loans, excluding money market loan participations		828,360					716,559					635,556					548,558					472,412
Money market loan participations				6,000					28,250					15,400					44,300					24,000

		Total loans, net	$	834,360				$	744,809				$	650,956				$	592,858				$	496,412

Many of our borrowers have done business with us for years and have more than one loan outstanding. Our current policy is that the aggregate amount of loans outstanding to any one borrower or related entities may not exceed 8.0% of Brookline Savings Bank's stockholder's equity exclusive of unrealized gains or losses on securities available for sale, net of income taxes ("core capital"). At December 31, 2001, Brookline Savings Bank's core capital totaled $228.6 million and its largest borrower had aggregate loans outstanding of $19.4 million, or 8.5% of core capital. The excess over the aggregate limit was approved by the Executive Committee at the time of loan origination. Including this borrower, there were 35 borrowers each with aggregate loans outstanding in excess of $5.0 million at December 31, 2001. The cumulative total of those loans was $258.2 million, or 31.2% of loans outstanding, exclusive of money market loan participations. Most of this cumulative amount consisted of multi-family and commercial real estate mortgage loans.

The following table shows the contractual maturity and repricing dates of our loan portfolio at December 31, 2001. The table does not include prepayments or scheduled principal amortization.

			At December 31, 2001
			Real Estate Mortgage Loans
			Real Estate Mortgage Loans										Other Commercial and Consumer Loans
			One-to- Four Family		Multi- Family		Commercial Real Estate		Construction and Development		Home Equity and Second Mortgages		Other Commercial and Consumer Loans		Money Market Loan Participations		Total Loans
			(In Thousands)
Amounts due (1):
Within one year			$	19,497	$	100,796	$	56,772	$	13,714	$	22,061	$	27,326	$	6,000	$	246,166

After one year:
	More than one year to three years			37,949		90,720		72,690		—		456		2,818		—		204,633
	More than three years to five years			96,480		78,438		94,665		2,244		2,428		4,116		—		278,371
	More than five years to ten years			5,762		52,546		36,370		—		1,228		—		—		95,906
	More than ten years			44		2,368		7,276		—		—		—		—		9,688

		Total due after one year		140,235		224,072		211,001		2,244		4,112		6,934		—		588,598

		Total amount due	$	159,732	$	324,868	$	267,773	$	15,958	$	26,173	$	34,260	$	6,000		834,764

Less:
	Deferred loan origination fees																	(404	)

		Net loans															$	834,360

(1): Amounts due are net of unadvanced funds on loans.

The following table sets forth at December 31, 2001 the dollar amount of gross loans contractually due or scheduled to reprice after one year and whether such loans have fixed interest rates or adjustable interest rates.

			Due After One Year
			Fixed		Adjustable		Total
			(In Thousands)
Mortgage loans:
	One-to-four family		$	126	$	140,109	$	140,235
	Multi-family			71,123		152,949		224,072
	Commercial real estate			59,820		151,181		211,001
	Construction and development			105		2,139		2,244
	Home equity and second mortgage			1,321		2,791		4,112

		Total mortgage loans		132,495		449,169		581,664
Commercial and consumer loans				1,984		4,950		6,934

		Total loans	$	134,479	$	454,119	$	588,598

Non-Performing Assets

The following table sets forth information regarding non-performing assets, restructured loans and the allowance for loan losses:

				At December 31,
				2001			2000			1999			1998			1997
				(Dollars in Thousands)
Non-accrual loans (1):
	Mortgage loans:
		One-to-four family		$	136		$	—		$	—		$	—		$	230
		Multi-family			—			—			—			—			—
		Commercial real estate			—			—			—			297			522
		Construction and development			—			—			—			—			—
		Home equity			—			—			—			35			51
	Commercial loans				—			—			—			—			—
	Consumer loans				4			—			—			—			—

			Total non-accrual loans		140			—			—			332			803
Other real estate owned, net (2)					—			—			707			1,940			2,373
Defaulted corporate debt security					1,440			—			—			—			—

			Total non-performing assets	$	1,580		$	—		$	707		$	2,272		$	3,176

Restructured loans				$	—		$	—		$	—		$	—		$	2,287

Allowance for loan losses as a percent of total loans					1.83	%		1.92	%		2.13	%		2.21	%		2.51	%
Allowance for loan losses as a percent of total non-performing loans (3)					NM			NM			NM			NM			NM
Non-performing loans as a percent of total loans					0.02			—			—			0.06			0.16
Non-performing assets as a percent of total assets					0.14			—			0.08			0.26			0.45

(1): Non-accrual loans include all loans 90 days or more past due and other loans which have been identified by Brookline Bancorp, Inc. as presenting uncertainty with respect to the collectibility of interest or principal.
(2): Other real estate owned balances are shown net of related loss allowances.
(3): Non-performing loans are comprised of non-accrual loans.

NM—not meaningful. Exceeds 1,000% at end of each period.

In the second quarter of 2001, Brookline Bancorp, Inc. charged earnings $495,000 to recognize an other-than-temporary impairment in the carrying value of a $2.0 million bond issued by Southern California Edison that matured on June 1, 2001. Interest of $65,000 due on the bond was received at the maturity date and applied as a reduction of the carrying value of the bond instead of being credited to interest income. An interest payment of $65,000 received on December 1, 2001 was credited to interest income. At December 31, 2001, the defaulted bond was carried on the books of Brookline Bancorp, Inc. at $1,440,000 and had a market value of $1,950,000. On March 1, 2002, principal and interest due on the bond was paid in full resulting in a credit to income of $592,500.

Loans are placed on non-accrual status either when reasonable doubt exists as to the full timely collection of interest and principal or automatically when a loan becomes past due 90 days.

Restructured loans represent performing loans for which concessions (such as reductions of interest rates to below market terms and/or extension of repayment terms) were granted due to a borrower's financial condition. Based on satisfactory payment performance, a significant pay-down of

loan principal and payment of interest at market rates, loans previously classified as restructured were removed from that category in 1998.

The following table sets forth delinquencies in our loan portfolio as of the dates indicated:

			At December 31, 2001								At December 31, 2000
			60-89 Days				90 Days or More				60-89 Days				90 Days or More
			Number of Loans	Principal Balance of Loans			Number of Loans	Principal Balance of Loans			Number of Loans	Principal Balance of Loans			Number of Loans	Principal Balance of Loans
			(Dollars in Thousands)
Mortgage loans:
	One-to-four family		2	$	112		1	$	136		—	$	—		—	$	—
	Multi-family		—		—		—		—		—		—		—		—
	Commercial real estate		—		—		—		—		—		—		—		—
	Construction and development		—		—		—		—		—		—		—		—
	Home equity and second mortgage		—		—		—		—		—		—		—
Consumer loans			9		8		7		4		—		—		—		—

		Total	11	$	120		8	$	140		—	$	—		—	$	—

Delinquent loans to total loans					0.01	%			0.01	%			—	%			—	%

			At December 31, 1999
			60-89 Days				90 Days or More
			Number of Loans	Principal Balance of Loans			Number of Loans	Principal Balance of Loans
			(Dollars in Thousands)
Mortgage loans:
One-to-four family			—	$	—		—	$	—
	Multi-family		—		—		—		—
	Commercial real estate		—		—		—		—
	Construction and development		—		—		—		—
	Home equity and second mortgage		—		—		—		—
Consumer loans			3		4		—		—

		Total	3	$	4		—	$	—

Delinquent loans to total loans					—	%			—	%

Allowance for Loan Losses

The allowance for loan losses is established through provisions for loan losses based on management's on-going evaluation of the risks inherent in our loan portfolio. Factors considered in the evaluation process include growth of the loan portfolio, the risk characteristics of the types of loans in the portfolio, geographic and large borrower concentrations, current regional economic and real estate market conditions that could affect the ability of borrowers to pay, the value of underlying collateral, and trends in loan delinquencies and charge-offs. The significance of any factor at a particular point in time fluctuates depending on management's assessment of circumstances.

We utilize an internal rating system to monitor and evaluate the credit risk inherent in our loan portfolio. At the time of loan approval, all loans other than one-to-four family residential mortgage loans, home equity loans and consumer loans, are assigned a rating based on all the factors considered in originating the loan. The initial loan rating is recommended by the loan officer and approved by the individuals or committee responsible for approving the loan. Loan officers are expected to recommend to the Loan Committee changes in loan ratings when facts come to their attention that warrant an

upgrade or downgrade in a loan rating. Problem and potential problem assets are assigned the three lowest ratings. Such ratings coincide with the "Substandard", "Doubtful" and "Loss" classifications used by federal regulators in their examination of financial institutions. Generally, an asset is considered Substandard if it is inadequately protected by the current net worth and paying capacity of the obligors and/or the collateral pledged. Substandard assets include those characterized by the distinct possibility that we will sustain some loss if the deficiencies are not corrected. Assets classified as Doubtful have all the weaknesses inherent in those classified Substandard with the added characteristic that the weaknesses present make collection or liquidation in full, on the basis of currently existing facts, highly questionable and improbable. Assets classified as Loss are those considered uncollectible and of such little value that their continuance as assets without the establishment of a specific loss reserve and/or charge-off is not warranted. Assets which do not currently expose Brookline Bancorp, Inc. to sufficient risk to warrant classification in one of the aforementioned categories but possess weaknesses are designated "Special Mention". We assign our fourth lowest rating to loans meeting this designation.

On a quarterly basis, management reviews with the Watch Committee the status of each loan assigned one of our four adverse internal ratings and the judgments made in determining specific and general valuation allowances for losses. General valuation allowances represent loss allowances established to recognize the inherent risk associated with lending activities which, unlike specific allowances, have not been allocated to particular problem loans. Loans, or portions of loans, classified Loss are either charged off against valuation allowances or a specific allowance is established in an amount equal to the amount classified Loss.

At December 31, 2001 and 2000, there were no loans which warranted specific reserves. At December 31, 2001, loans designated as Substandard amounted to $105,000; at December 31, 2000, loans designated as Special Mention and Substandard amounted to $10.7 million and $107,000, respectively. No loans were designated as Doubtful or Loss. The Substandard category at December 31, 2001 and 2000 included two loans secured by condominiums. The Special Mention category at December 31, 2000 included eleven loans to one borrower secured by multi-family and commercial real estate properties. In 2001, classification of the eleven loans as Special Mention was removed due to satisfactory performance. All of the loans designated Special Mention and Substandard at December 31, 2001 and 2000 were current in their payment status.

Our classification of our loans and the amount of the valuation allowances we set aside for estimated losses are subject to review by the banking agencies. Based on their reviews, these agencies can order the establishment of additional general or specific loss allowances. The Office of Thrift Supervision, in conjunction with the other federal banking agencies, has adopted an interagency policy statement on allowances for loan and lease losses. The policy statement provides guidance for financial institutions on both the responsibilities of management for the assessment and establishment of adequate allowances and guidance for banking agency examiners to use in determining the adequacy of a financial institution's valuation methodology. Generally, the policy statement recommends that financial institutions have effective systems and controls to identify, monitor and address asset quality problems; that management analyze all significant factors that affect the collectibility of the portfolio in a reasonable manner; and that management establish acceptable valuation processes that meet the objectives set forth in the policy statement. While we believe that we have established an adequate allowance for loan losses, there can be no assurance that the regulators, in reviewing our loan portfolio, will not request us to materially increase our allowance for loan losses. Although management believes that adequate specific and general loan loss allowances have been established, actual losses are dependent upon future events and, as such, further additions to the level of specific and general loss allowances could become necessary.

The following table sets forth activity in our allowance for loan losses for the years presented in the table.

				Year Ended December 31,
				2001		2000		1999		1998		1997
				(Dollars in Thousands)
Balance at beginning of year				$	14,315	$	13,874	$	13,094	$	12,463	$	12,326
Provision for loan losses					974		427		450		300		—
Charge-offs:
	Mortgage loans				—		—		—		—		—
	Commercial loans				—		—		—		—		—
	Consumer loans				4		10		—		1		6
	Money market loan participations				—		—		—		—		—

		Total charge-offs			4		10		—		1		6

Recoveries:
	Mortgage loans:
		Multi-family			6		6		2		1		25
		Commercial real estate			7		7		325		314		8
		Construction and development			—		—		—		—		103
	Commercial loans				—		—		—		12		—
	Consumer loans				3		11		3		5		7

			Total recoveries		16		24		330		332		143

Net recoveries					12		14		330		331		137

Balance at end of year				$	15,301	$	14,315	$	13,874	$	13,094	$	12,463

We have experienced recoveries in excess of charge-offs in each of the past five years. We believe this favorable experience is attributable to the robust economy during that time and is not sustainable over normal lending cycles. When the economy is strong, an inherent higher level of risk continues to exist because of the long-term nature of our loan portfolio. Multi-family and commercial real estate loans have comprised about 70% of our total loans outstanding for many years. These loans tend to have an average life of several years. The higher level of risk in such loans becomes more evident when the economy weakens.

During 2001, 2000 and 1999, the allowance for loan losses was increased by $986,000, $441,000 and $780,000, respectively, as a result of net loan recoveries of $12,000, $14,000 and $330,000, respectively, and provisions for loan losses of $974,000, $427,000 and $450,000, respectively. The increases in the allowance were made primarily because of significant growth of the loan portfolio. Total loans outstanding increased by $111.8 million in 2001, $81.0 million in 2000 and $87.0 million in 1999, exclusive of money market loan participations. Approximately 57% of the net loan growth in 2001, half of the net loan growth in 2000 and most of the net loan growth in 1999 occurred in the higher risk categories of commercial real estate and multi-family mortgage loans. The remainder of the growth was primarily in the residential mortgage loan category.

The following tables set forth our percent of allowance by loan category and the percent of loans to total loans in each of the categories listed at the dates indicated.

			At December 31,
			2001						2001						2001
			Amount		Percent of Allowance to Total Allowance		Percent of Loans in Each Category to Gross Loans		Amount		Percent of Allowance to Total Allowance		Percent of Loans in Each Category to Gross Loans		Amount		Percent of Allowance to Total Allowance		Percent of Loans in Each Category to Gross Loans
			(Dollars in Thousands)
Mortgage loans:
	One-to-four family		$	483	3.16	%	18.25	%	$	343	2.40	%	15.04	%	$	225	1.62	%	11.13	%
	Multi-family			3,142	20.53		38.70			2,696	18.83		39.55			2,756	19.86		44.18
	Commercial real estate			3,267	21.35		31.06			3,104	21.68		33.65			2,698	19.45		32.89
	Construction and development			478	3.12		2.38			466	3.26		2.62			547	3.95		3.67
	Home equity			89	0.58		1.02			66	0.46		0.87			58	0.42		0.86
	Second			284	1.86		3.36			225	1.57		3.58			122	0.88		2.43
Commercial loans				512	3.35		4.87			389	2.72		4.36			357	2.57		4.54
Consumer loans				31	0.20		0.36			25	0.17		0.33			20	0.14		0.30
Money market loan participations				—	—		—			—	—		—			—	—		—
Unallocated				7,015	45.85		—			7,001	48.91		—			7,091	51.11		—

		Total allowance for loan losses	$	15,301	100.00	%	100.00	%	$	14,315	100.00	%	100.00	%	$	13,874	100.00	%	100.00	%

			At December 31,
			1998						1997
			Amount		Percent of Allowance to Total Allowance		Percent of Each Category to Gross Loans		Amount		Percent of Allowance to Total Allowance		Percent of Loans in Each Category to Gross Loans
			(Dollars in Thousands)
Mortgage loans:
	One-to-four family		$	193	1.47	%	11.19	%	$	207	1.66	%	14.25	%
	Multi-family			2,367	18.08		45.58			1,943	15.59		45.50
	Commercial real estate			2,600	19.86		34.29			2,199	17.65		30.94
	Construction and development			376	2.87		2.99			287	2.30		2.77
	Home equity			55	0.42		0.96			53	0.43		1.09
	Second			105	0.80		2.42			119	0.95		3.28
Commercial loans				180	1.37		2.26			99	0.79		1.88
Consumer loans				18	0.14		0.31			14	0.11		0.29
Money market loan participations				—	—		—			—	—		—
Unallocated				7,200	54.99		—			7,542	60.52		—

		Total allowance for loan losses	$	13,094	100.00	%	100.00	%	$	12,463	100.00	%	100.00	%

The long-term nature of our loan portfolio as well as the impact of economic changes make it most difficult, if not impossible, to conclude with precision the amount of loss inherent in our loan portfolio at a point in time. Ultimately, the balance of the allowance for loan losses is determined by evaluating several factors quantitatively and qualitatively and must be based on a positive response to the following questions:

•: Is the allowance adequate in relation to the estimated losses in the loan portfolio?
•: Is the provision for loan losses charged to operations reasonable in relation to the level of loss exposure resulting from changes and trends in the loan portfolio?

The amounts allocated to loan categories in the above table are determined by consideration of several factors. Specific amounts are allocated on a loan-by-loan basis for any impairment loss as determined by applying one of the three methods cited in generally accepted accounting principles. In addition, general reserves are established based on our long-term experience in loan charge-offs by category, delinquencies and the total of loans according to our internal ratings. The reserve factors applied to calculate general reserves are in line with ranges allowed by regulatory examiners.

Typically, new loans are rated l, 2 or 3, with 3 being the rating most frequently assigned. Loans rated l and 2 are considered to have less risk exposure than loans rated 3. Over the long-term life cycle of our loan portfolio, the rating of a loan can change resulting in it being placed on our Watch List. During the last economic downturn (1990 through 1994), the total of Watch List loans ranged from approximately 7% to 10% of total loans in the higher risk categories. When the total of Watch List loans is high, reserves assigned to such loans tend to be specific and based on a loan-by-loan assessment. During the most recent five year period, the percent of total Watch List loans to total higher risk loans declined substantially due to the very strong economy.

Based on our experience during the last economic downturn, it is known that loans in the higher risk categories have inherent characteristics that result in their being placed on the Watch List when the economy weakens. Such risk characteristics, which exist throughout the long-term life of our loans, are less obvious in good economic times. Management believes that the allowance for loan losses should include general reserves for the inherent risk in the loan portfolio when the economy is strong and Watch List loans are lower than normal. Accordingly, when Watch List loans are less than 10% of total loans in the higher risk categories, a general reserve is established equal to 3% of the difference between 10% of adjusted higher risk loans and the actual amount of Watch List loans. Adjusted higher risk loans equals the total of loans in the higher risk categories less the total of loans rated 1 and 2. Loans with such ratings are far less likely to be included on the Watch List. A rate higher than 3% is used when management believes trends suggest higher loss exposure. The amount of general reserves allocated as a result of applying this methodology was $1,231,000 at December 31, 2001, $878,000 at December 31, 2000 and $1,005,000 at December 31, 1999.

For the past several years, a portion of our allowance for loan losses has been categorized as unallocated rather than being allocated to specific loan categories. The unallocated part of the allowance has been maintained in recognition of the inherent risks resulting from the following concentrations in our portfolio: the significance of loans in the higher risk categories of multi-family, commercial real estate and construction mortgage loans and other commercial loans, concentrations in the geographic locations of properties on which such loans have been made and the aggregate amount of loans outstanding to larger borrowers. The combination of these three concentrations creates a higher than normal degree of risk in our loan portfolio. The unallocated portion of the allowance tends to be a greater percent of the total allowance in periods when the economy is strong. A downturn in economic conditions in our primary lending area could have adverse consequences on the collectibility of the loan portfolio in a relatively short period of time. In such circumstances, inherent risks tend to be transformed into specifically quantified risks on a loan-by-loan basis.

We have no established range into which the unallocated portion of the allowance should fall. Instead, the reasonableness of the unallocated portion is considered based on management's collective assessment of all the factors cited in the beginning of this section. As noted in the table on the preceding page, the unallocated portion of the allowance has remained in the range of $7.0 million to $7.5 million over the past five years. The narrowness of the range is attributable primarily to the strength of the economy and the consistent quality of the loan portfolio during that time.

Investment Securities

Our investment policy is reviewed and approved by the Board of Directors on an annual basis. Our investment portfolio is structured so as to provide asset diversification, interest and dividend income, a source of liquidity to meet loan demand and potential deposit outflows, and the opportunity to achieve capital appreciation through long-term investment in equity securities.

Our current policy generally favors investment in mortgage-backed and mortgage-related securities, U.S. Government and Agency securities, and corporate debt obligations. The policy allows the use of interest rate swaps, options and futures, but only for purposes of hedging the interest or credit risk of specific assets. While we have seldom used hedging instruments, at December 31, 2001, we were a party to a $5.0 million interest-rate swap agreement that matures April 14, 2005. We entered into the agreement to match more closely the repricing of certain assets and liabilities and to reduce our exposure to increases in interest rates.

Over the past three years, we expanded our acquisition of collateralized mortgage obligations and mortgage-backed securities ("mortgage derivatives"). Investments in such obligations increased from 2.7% of the total investment portfolio at the beginning of 1999 to 45.4% of the total investment portfolio at the end of 2001. Most of our purchases are securities issued by U.S. government agencies and are part of the first tranche of mortgage pools. Such tranches (or slices) have priority rights to cash flows, usually mature in the three year range and are commonly classified as "PAC-1-1" securities.

It is our policy that the aggregate unamortized premiums on all mortgage derivatives in our investment portfolio should not exceed 1% of stockholders' equity, excluding net unrealized gains on securities available for sale. No purchase of any mortgage derivative in excess of $3 million or involving payment of a premium of 2% or more can be made without the prior approval of our Chief Executive Officer. Purchases of all mortgage derivatives not classified as PAC-1-1 securities or issued by other than U.S. government agencies also require prior approval of the Chief Executive Officer.

We expect that mortgage derivatives will continue to represent a significant portion of our investment portfolio since such investments are "qualified thrift investments" for purposes of meeting the Office of Thrift Supervision requirement that 65% of Brookline Savings Bank's assets be maintained in qualified thrift assets.

Our investment policy normally requires that corporate obligations be rated "A" or better at the time of acquisition. In certain instances, corporate obligations rated "BBB" can be purchased. At December 31, 2001, $3.5 million of our debt securities were rated lower than "A". Included in this amount was a $2.0 million bond issued by Southern California Edison payable June 1, 2001 bearing interest at 6.50% per annum and carried on our books at $1,440,000. This debt security was paid in full on March 1, 2002.

At December 31, 2001, our marketable equity securities portfolio totaled $17.2 million, including net unrealized gains of $7.7 million. Most of the portfolio was comprised of the stocks of national, regional money center and community banks and utility companies. Our policy limits the aggregate carrying value of marketable equity securities to no more than 25% of our stockholders' equity, excluding net unrealized gains on securities available for sale. Generally, our marketable equity securities have been purchased as long-term investments that can provide the opportunity for capital appreciation and dividend income that is taxed on a more favorable basis than operating income. There can be no assurances that investment in marketable equity securities will achieve appreciation in value and, therefore, such investments involve higher risk.

The following table sets forth the composition of our debt and equity securities portfolios at the dates indicated:

			At December 31,
			2001				2000				1999
			Amount		Percent of Total		Amount		Percent of Total		Amount		Percent of Total
			(Dollars in thousands)
Debt securities:
	U.S. Government and Agency obligations		$	14,208	7.80	%	$	11,079	5.35	%	$	40,895	17.18	%
	Corporate obligations			58,904	32.32			93,673	45.26			112,999	47.48
	Collateralized mortgage obligations and mortgage-backed securities			82,684	45.36			70,914	34.27			49,629	20.86

		Total debt securities		155,796	85.48			175,666	84.88			203,523	85.52
Marketable equity securities				17,187	9.43			24,142	11.67			28,186	11.84
Restricted equity securities				9,281	5.09			7,145	3.45			6,279	2.64

		Total investment securities	$	182,264	100.00	%	$	206,953	100.00	%	$	237,988	100.00	%

Debt and equity securities available for sale			$	163,425	89.66	%	$	149,361	72.17	%	$	128,275	53.90	%
Debt securities held to maturity				9,558	5.25			50,447	24.38			103,434	43.46
Restricted equity securities				9,281	5.09			7,145	3.45			6,279	2.64

		Total investment securities	$	182,264	100.00	%	$	206,953	100.00	%	$	237,988	100.00	%

The following table sets forth certain information regarding the amortized cost and market values of our investment securities at the dates indicated:

				At December 31,
				2001				2000				1999
				Amortized Cost		Market Value		Amortized Cost		Market Value		Amortized Cost		Market Value
				(Dollars in Thousands)
Securities available for sale:
	Debt securities:
		U.S. Government and Agency obligations		$	14,093	$	14,208	$	10,946	$	11,079	$	41,026	$	40,895
		Corporate obligations			49,073		50,640		44,467		44,704		11,409		11,204
		Collateralized mortgage obligations			78,536		79,701		68,225		68,526		48,729		47,990
		Mortgage-backed securities			1,662		1,689		890		910		—		—

		Total debt securities			143,364		146,238		124,528		125,219		101,164		100,089
	Marketable equity securities				9,502		17,187		14,948		24,142		14,878		28,186

			Total securities available for sale		152,866		163,425		139,476		149,361		116,042		128,275
	Net unrealized gains on securities available for sale				10,559		—		9,885		—		12,233		—

			Total securities available for sale, net	$	163,425	$	163,425	$	149,361	$	149,361	$	128,275	$	128,275

Securities held to maturity:
		Corporate obligations		$	8,264	$	8,445	$	48,969	$	48,860	$	101,795	$	100,854
		Mortgage-backed securities			1,294		1,321		1,478		1,477		1,639		1,597

			Total securities held to maturity	$	9,558	$	9,766	$	50,447	$	50,337	$	103,434	$	102,451

Restricted equity securities:
		Federal Home Loan Bank of Boston stock		$	8,907			$	6,771			$	5,905
		Massachusetts Savings Bank Life Insurance Company stock			253				253				253
		Other stock			121				121				121

			Total restricted equity securities	$	9,281			$	7,145			$	6,279

The table below sets forth certain information regarding the carrying value, weighted average yields and contractual maturities of our securities portfolio at the date indicated.

				At December 31, 2001
				One Year or Less				After One Year Through Five Years				After Five Years Through Ten Years				After Ten Years				Total
				Carrying Value		Weighted Average Yield		Carrying Value		Weighted Average Yield		Carrying Value		Weighted Average Yield		Carrying Value		Weighted Average Yield		Carrying Value		Weighted Average Yield
				(Dollars in Thousands)
Securities available for sale:
	Debt securities:
		U.S. Government and Agency obligations		$	7,117	4.73	%	$	7,091	3.64	%	$	—	—	%	$	—	—	%	$	14,208	4.47	%
		Corporate obligations			32,076	6.90			16,855	5.16			—	—			1,709	9.32			50,640	6.40
		Collateralized mortgage obligations			7,479	5.90			72,222	5.49			—	—			—	—			79,701	5.53
		Mortgage-backed securities			—	—			—	—			—	—			1,689	6.85			1,689	6.85

			Total debt securities		46,672	6.41			96,168	5.30			—	—			3,398	8.09			146,238	5.72

	Marketable equity securities (1)																				17,187	4.27

			Total securities available for sale																		163,425	5.56

Securities held to maturity:
	Corporate obligations				4,566	6.08			3,698	6.20			—	—			—	—			8,264	6.13
	Mortgage-backed securities				—	—			69	7.45			402	8.88			823	6.27			1,294	7.14

			Total securities held to maturity		4,566	6.08			3,767	6.22			402	8.88			823	6.27			9,558	6.27

Restricted equity securities:
Federal Home Loan Bank of Boston stock																					8,907	4.50
Massachusetts Savings Bank Life Insurance Company stock (1)																					253	4.17
Other stock																					121	—

			Total restricted equity securities (1)																		9,281	4.43

			Total securities	$	51,238	6.38	%	$	99,935	5.33	%	$	402	8.88	%	$	4,221	7.74	%	$	182,264	5.54	%

(1): The yields have been calculated on a tax equivalent basis.

Deposits

Historically, deposits have been our primary source of funds. We offer a variety of deposit accounts with a range of interest rates and terms. Our deposit accounts consist of non-interest-bearing checking accounts and interest-bearing NOW accounts, savings accounts and money market savings accounts (referred to in the aggregate as "transaction deposit accounts") and certificate of deposit accounts. We offer individual retirement accounts ("IRAs") and other qualified plan accounts.

The flow of deposits is influenced significantly by general economic conditions, changes in money market rates, prevailing interest rates and the relative attractiveness of competing deposit and investment alternatives. Our deposits are obtained predominantly from customers in the Town of Brookline and surrounding communities. Deposits are also gathered via the internet. We rely primarily on competitive pricing of our deposit products, customer service and long-standing relationships with customers to attract and retain deposits. Market interest rates and rates offered by competing financial institutions significantly affect our ability to attract and retain deposits. We do not use brokers to obtain deposits.

The following table presents our deposit activity for the years indicated.

	Year Ended December 31,
	2001			2000		1999
	(In Thousands)
Net deposits (withdrawals)	$	(11,260	)	$	73,254	$	2,055
Interest credited on deposit accounts		23,559			23,231		20,711

Total increase in deposit accounts	$	12,299		$	96,485	$	22,766

Of the increase in deposits in 2000, $52.4 million was generated by Lighthouse Bank from the time it began doing business with the public in June 2000. Of that amount, approximately 20% was in interest-bearing checking accounts, 25% in money market savings accounts and 55% in certificates of deposit. Brookline Savings Bank experienced an 8.5% rate of deposit growth in 2000 as a result of expanded marketing efforts, the opening of a new retail branch in October 2000 and branch divestitures by other financial institutions.

In 2001, a $67.3 million, or 22.5%, growth in transaction deposit accounts was substantially offset by a $55.0 million, or 17.8%, decline in certificates of deposit. The decline resulted primarily from significant reductions in rates offered, especially during the second half of 2001.

The following table sets forth the distribution of our average deposit accounts for the years indicated and the weighted average interest rates on each category of deposits presented. Averages for the years presented utilize average daily balances.

			Year Ended December 31, 2001						Year Ended December 31, 2000
			Average Balance		Percent of Total Average Deposits		Weighted Average Rate		Average Balance		Percent of Total Average Deposits		Weighted Average Rate
			(Dollars in Thousands)
NOW accounts			$	68,968	11.18	%	1.18	%	$	50,843	9.47	%	1.36	%
Savings accounts				12,469	2.02		1.80			12,180	2.27		2.20
Money market savings accounts				240,177	38.95		3.27			206,093	38.37		3.95
Non-interest-bearing demand checking accounts				17,732	2.88		—			14,309	2.66		—

		Total transaction deposit accounts		339,346	55.03		2.62			283,425	52.77		3.21

Certificate of deposit accounts:
	Six months or less			86,338	14.00		4.95			67,991	12.66		5.69
	Over six months through 12 months			101,812	16.51		5.14			105,105	19.57		5.38
	Over 12 months through 24 months			43,337	7.03		5.72			34,762	6.47		5.51
	Over 24 months			45,786	7.43		5.84			45,847	8.53		5.89

		Total certificate of deposit accounts		277,273	44.97		5.29			253,705	47.23		5.57

		Total average deposits	$	616,619	100.00	%	3.82	%	$	537,130	100.00	%	4.33	%

			Year Ended December 31, 1999
			Average Balance		Percent of Total Average Deposits		Weighted Average Rate
			(Dollars in Thousands)
NOW accounts			$	43,897	8.74	%	1.23	%
Savings accounts				13,010	2.59		2.22
Money market savings accounts				190,813	37.99		3.90
Non-interest-bearing demand checking accounts				12,387	2.46		—

		Total transaction deposit accounts		260,107	51.78		3.18

Certificate of deposit accounts:
	Six months or less			58,841	11.72		4.56
	Over six months through 12 months			104,192	20.74		4.94
	Over 12 months through 24 months			29,150	5.80		5.38
	Over 24 months			50,005	9.96		6.09

		Total certificate of deposit accounts		242,188	48.22		5.14

		Total average deposits	$	502,295	100.00	%	4.12	%

At December 31, 2001, we had outstanding $61.9 million in certificate of deposit accounts of $100,000 or more, maturing as follows:

		Amount		Weighted Average Rate
		(In Thousands)
Maturity Period:
	Three months or less		11,256	3.91
	Over three months through six months		18,536	4.84
	Over six months through 12 months		13,409	5.20

	Over 12 months	$	61,950	4.52	%

The following table presents, by rate category, our certificate of deposit accounts as of the dates indicated.

			At December 31,
			2001				2000				1999
			Amount		Percent		Amount		Percent		Amount		Percent
			(Dollars in Thousands)
Certificate of Deposit Rates:
	2.00% — 3.99%		$	105,676	41.5	%	$	—	—	%	$	—	—	%
	4.00% — 5.99%			97,166	38.2			104,902	33.9			218,615	90.4
	6.00% — 7.99%			51,538	20.3			204,495	66.1			23,144	9.6

		Total	$	254,380	100.0	%	$	309,397	100.0	%	$	241,759	100.0	%

The following table presents, by rate category, the remaining period to maturity of certificate of deposit accounts outstanding as of December 31, 2001.

			Maturity Date
			1 Year or Less		Over 1 to 2 Years		Over 2 to 3 Years		Over 3 Years		Total
			(In Thousands)
Interest Rate:
	2.00% — 3.99%		$	94,160	$	9,758	$	1,448	$	310	$	105,676
	4.00% — 5.99%			66,020		18,976		9,479		2,691		97,166
	6.00% — 7.99%			33,248		10,617		335		7,338		51,538

		Total	$	193,428	$	39,351	$	11,262	$	10,339	$	254,380

Borrowed Funds

We utilize advances from the FHLB primarily in connection with our management of the interest rate sensitivity of our assets and liabilities. The advances are secured by all of Brookline Savings Bank's stock and deposits in the FHLB and a general lien on one-to-four family mortgage loans, certain multi-family loans and U.S. Government and Agency obligations in an aggregate amount at least equal to outstanding advances. The maximum amount that the FHLB will advance to member institutions, including Brookline Savings Bank, fluctuates from time to time in accordance with the policies of the FHLB. At December 31, 2001, we had $178.1 million in outstanding advances from the FHLB and had the capacity to increase that amount to $311.7 million. We expect to continue to utilize borrowings from the FHLB as part of our management of the interest sensitivity of our assets and liabilities.

The following table sets forth certain information regarding borrowed funds for the dates indicated:

		Year Ended December 31,
		2001			2000			1999
		(Dollars in Thousands)
Advances from the FHLB:
	Average balance outstanding	$	153,002		$	120,023		$	106,812
	Maximum amount outstanding at any month end during the year		178,130			135,400			112,800
	Balance outstanding at end of year		178,130			133,400			108,800
	Weighted average interest rate during the year		6.11	%		6.11	%		6.04	%
	Weighted average interest rate at end of year		5.81	%		6.15	%		5.91	%

Subsidiary Activities

Brookline Securities Corp. is a wholly-owned subsidiary of Brookline Bancorp, Inc. and BBS Investment Corporation is a wholly-owned subsidiary of Brookline Savings Bank. These companies were established as Massachusetts security corporations for the purpose of buying, selling and holding investment securities on their own behalf and not as a broker. The income earned on their investment securities is subject to a significantly lower rate of state tax than that assessed on income earned on investment securities owned by Brookline Bancorp, Inc. or Brookline Savings Bank. At December 31, 2001, Brookline Securities Corp. and BBS Investment Corporation had total assets of $51.4 million and $111.3 million, respectively, of which $50.7 million and $110.4 million, respectively, were investment securities and short-term investments.

160 Associates, Inc. is a wholly-owned subsidiary of Brookline Savings Bank. It was established as a Massachusetts corporation primarily for the purpose of acquiring and holding stock in a subsidiary engaged in business that qualifies as a real estate investment trust. 160 Associates, Inc. invested $265.9 million in such activity at December 31, 2001.

Brookline Preferred Capital Corporation is a 99.9% owned subsidiary of 160 Associates, Inc. It was established as a Massachusetts corporation to engage in real estate business activities (including the acquisition and holding of securities and mortgage loans) that enable it to be taxed as a real estate investment trust for federal and Massachusetts tax purposes. At December 31, 2001, Brookline Preferred Capital Corporation had total assets of $266.6 million, $226.1 million of which were mortgage loans originated by and acquired from Brookline Savings Bank.

Personnel

As of December 31, 2001, we had 108 full-time employees and 11 part-time employees. The employees are not represented by a collective bargaining unit and we consider our relationship with our employees to be good.

Properties

We conduct our business through six full service banking offices. The following table sets forth information about our offices as of December 31, 2001.

Location	Leased or Owned	Original Year Leased or Acquired	Year of Lease Expiration	Net Book Value of Property or Leasehold Improvements
				(In Thousands)
Corporate/Main Office:
160 Washington Street	Owned	1921	Not Applicable	$	163
Brookline MA 02447
Operations Center:
24 Webster Place	Leased	1986	2016		—
Brookline MA 02447
Call Center:
300 Fifth Avenue	Leased	1999	2002		—
Waltham MA 02451
Other Branch Offices:
Coolidge Corner Office	Leased	1977	2011		57
1330-1340 Beacon Street Brookline MA 02447
South Brookline Office	Leased	1952	2006		110
1018 West Roxbury Parkway Brookline MA 02447
Longwood Office	Leased	1956	2008		190
1014 Beacon Street Brookline MA 02447
Washington Square Office	Leased	1975	2011		134
1661 Beacon Street Brookline MA 02447
Newton Office	Leased	2000	2015		313
10 Langley Road Newton MA 02459

Legal Proceedings

We are involved periodically in various claims and lawsuits that arise in connection with our financial services business. We believe that these routine legal proceedings, in the aggregate, are not material to our financial condition and results of operations.

SUPERVISION AND REGULATION

General

Brookline Savings Bank is examined and supervised by the Office of Thrift Supervision and the Federal Deposit Insurance Corporation. This regulation and supervision establishes a comprehensive framework of activities in which an institution may engage and is intended primarily for the protection of the Federal Deposit Insurance Corporation's deposit insurance funds and depositors. Under this system of federal regulation, financial institutions are periodically examined to ensure that they satisfy

applicable standards with respect to their capital adequacy, assets, management, earnings, liquidity and sensitivity to market interest rates. Following completion of its examination, the federal agency critiques the institution's operations and assigns its rating (known as an institution's CAMELS). Under federal law, an institution may not disclose its CAMELS rating to the public. Brookline Savings Bank also is a member of and owns stock in the Federal Home Loan Bank of Boston, which is one of the twelve regional banks in the Federal Home Loan Bank System. Brookline Savings Bank also is regulated to a lesser extent by the Board of Governors of the Federal Reserve System, governing reserves to be maintained against deposits and other matters. The Office of Thrift Supervision examines Brookline Savings Bank and prepares reports for the consideration of its board of directors on any operating deficiencies. Brookline Savings Bank's relationship with its depositors and borrowers also is regulated to a great extent by both federal and state laws, especially in matters concerning the ownership of deposit accounts and the form and content of Brookline Savings Bank's mortgage documents.

Any change in these laws or regulations, whether by the Federal Deposit Insurance Corporation, Office of Thrift Supervision or Congress, could have a material adverse impact on Brookline Bancorp, Inc. and Brookline Savings Bank and their operations.

Federal Banking Regulation

Business Activities. A federal savings association derives its lending and investment powers from the Home Owners' Loan Act, as amended, and the regulations of the Office of Thrift Supervision. Under these laws and regulations, Brookline Savings Bank may invest in mortgage loans secured by residential and commercial real estate, commercial business and consumer loans, certain types of debt securities and certain other assets. In connection with the conversion of Brookline Savings Bank to a federal savings association charter in July, 2001, the Office of Thrift Supervision required Brookline Savings Bank to divest its marketable equity securities at the earliest practicable date, but in no event later than July 17, 2003. These equity securities had a market value of $5.8 million at December 31, 2001. Divestiture can be accomplished by a sale of the equity securities or their transfer to Brookline Bancorp, Inc. or its subsidiaries. Brookline Savings Bank also may establish subsidiaries that may engage in activities not otherwise permissible for Brookline Savings Bank, including real estate investment and securities and insurance brokerage.

Capital Requirements. Office of Thrift Supervision regulations require savings associations to meet three minimum capital standards: a 1.5% tangible capital ratio, a 4% leverage ratio (3% for associations receiving the highest rating on the CAMELS rating system) and an 8% risk-based capital ratio. The prompt corrective action standards discussed below, in effect, establish a minimum 2% tangible capital standard.

The risk-based capital standard for savings associations requires the maintenance of Tier 1 (core) and total capital (which is defined as core capital and supplementary capital) to risk-weighted assets of at least 4% and 8%, respectively. In determining the amount of risk-weighted assets, all assets, including certain off-balance sheet assets, are multiplied by a risk-weight factor of 0% to 100%, assigned by the Office of Thrift Supervision capital regulation based on the risks believed inherent in the type of asset. Core capital is defined as common stockholders' equity (including retained earnings), certain noncumulative perpetual preferred stock and related surplus and minority interests in equity accounts of consolidated subsidiaries, less intangibles other than certain mortgage servicing rights and credit card relationships. The components of supplementary capital currently include cumulative preferred stock, long-term perpetual preferred stock, mandatory convertible securities, subordinated debt and intermediate preferred stock, the allowance for loan and lease losses limited to a maximum of 1.25% of risk-weighted assets and up to 45% of net unrealized gains on available-for-sale equity securities with readily determinable fair market values. Overall, the amount of supplementary capital included as part of total capital cannot exceed 100% of core capital.

At December 31, 2001, Brookline Savings Bank's capital exceeded all applicable requirements.

Loans-to-One Borrower. A federal savings association generally may not make a loan or extend credit to a single or related group of borrowers in excess of 15% of unimpaired capital and surplus on an unsecured basis. An additional amount may be loaned, equal to 10% of unimpaired capital and surplus, if the loan is secured by readily marketable collateral, but generally does not include real estate. As of December 31, 2001, Brookline Savings Bank was in compliance with the loans-to-one borrower limitations.

Qualified Thrift Lender Test. As a federal savings association, Brookline Savings Bank is subject to a qualified thrift lender, or "QTL," test. Under the QTL test, Brookline Savings Bank must maintain at least 65% of its "portfolio assets" in "qualified thrift investments" in at least nine of the most recent 12 month period. "Portfolio assets" generally means total assets of a savings institution, less the sum of specified liquid assets up to 20% of total assets, goodwill and other intangible assets, and the value of property used in the conduct of the savings association's business.

"Qualified thrift investments" includes various types of loans made for residential and housing purposes, investments related to such purposes, including certain mortgage-backed and related securities, and loans for personal, family, household and certain other purposes up to a limit of 20% of portfolio assets. "Qualified thrift investments" also include 100% of an institution's credit card loans, education loans and small business loans. Brookline Savings Bank also may satisfy the QTL test by qualifying as a "domestic building and loan association" as defined in the Internal Revenue Code of 1986.

A savings association that fails the qualified thrift lender test must either convert to a bank charter or operate under specified restrictions. In connection with our conversion to a federal charter, the Office of Thrift Supervision granted Brookline Savings Bank an exception from the qualified thrift lender test through July 17, 2002. At December 31, 2001, Brookline Savings Bank maintained approximately 66.6% of its portfolio assets in qualified thrift investments.

Capital Distributions. Office of Thrift Supervision regulations govern capital distributions by a federal savings association, which include cash dividends, stock repurchases and other transactions charged to the capital account. A savings association must file an application for approval of a capital distribution if:

•: the total capital distributions for the applicable calendar year exceed the sum of the association's net income for that year to date plus the association's retained net income for the preceding two years;
•: the association would not be at least adequately capitalized following the distribution;
•: the distribution would violate any applicable statute, regulation, agreement or Office of Thrift Supervision-imposed condition; or
•: the association is not eligible for expedited treatment of its filings.

Even if an application is not otherwise required, every savings association that is a subsidiary of a holding company must still file a notice with the Office of Thrift Supervision at least 30 days before the board of directors declares a dividend or approves a capital distribution.

The Office of Thrift Supervision may disapprove a notice or application if:

•: the association would be undercapitalized following the distribution;
•: the proposed capital distribution raises safety and soundness concerns; or

•: the capital distribution would violate a prohibition contained in any statute, regulation or agreement.

Liquidity. A federal savings association is required to maintain a sufficient amount of liquid assets to ensure its safe and sound operation.

Community Reinvestment Act and Fair Lending Laws. All savings associations have a responsibility under the Community Reinvestment Act and related regulations of the Office of Thrift Supervision to help meet the credit needs of their communities, including low- and moderate-income neighborhoods. In connection with its examination of a federal savings association, the Office of Thrift Supervision is required to assess the association's record of compliance with the Community Reinvestment Act. In addition, the Equal Credit Opportunity Act and the Fair Housing Act prohibit lenders from discriminating in their lending practices on the basis of characteristics specified in those statutes. An association's failure to comply with the provisions of the Community Reinvestment Act could, at a minimum, result in regulatory restrictions on its activities. The failure to comply with the Equal Credit Opportunity Act and the Fair Housing Act could result in enforcement actions by the Office of Thrift Supervision, as well as other federal regulatory agencies and the Department of Justice. Brookline Savings Bank received a satisfactory Community Reinvestment Act rating in its most recent federal examination, which was conducted by the Federal Deposit Insurance Corporation.

Transactions with Related Parties. A federal savings association's authority to engage in transactions with its "affiliates" is limited by Office of Thrift Supervision regulations and by Sections 23A and 23B of the Federal Reserve Act (the "FRA"). The term "affiliates" for these purposes generally means any company that controls or is under common control with an institution. Brookline Bancorp, Inc. and its non-savings institution subsidiaries are affiliates of Brookline Savings Bank. In general, transactions with affiliates must be on terms that are as favorable to the association as comparable transactions with non-affiliates. In addition, certain types of these transactions are restricted to an aggregate percentage of the association's capital. Collateral in specified amounts must usually be provided by affiliates in order to receive loans from the association. In addition, Office of Thrift Supervision regulations prohibit a savings association from lending to any of its affiliates that are engaged in activities that are not permissible for bank holding companies and from purchasing the securities of any affiliate, other than a subsidiary.

Brookline Savings Bank's authority to extend credit to its directors, executive officers and 10% shareholders, as well as to entities controlled by such persons, is currently governed by the requirements of Sections 22(g) and 22(h) of the FRA and Regulation O of the Federal Reserve Board. Among other things, these provisions require that extensions of credit to insiders (i) be made on terms that are substantially the same as, and follow credit underwriting procedures that are not less stringent than, those prevailing for comparable transactions with unaffiliated persons and that do not involve more than the normal risk of repayment or present other unfavorable features, and (ii) not exceed certain limitations on the amount of credit extended to such persons, individually and in the aggregate, which limits are based, in part, on the amount of Brookline Savings Bank's capital. In addition, extensions of credit in excess of certain limits must be approved by Brookline Savings Bank's board of directors.

Enforcement. The Office of Thrift Supervision has primary enforcement responsibility over federal savings institutions and has the authority to bring enforcement action against all "institution-affiliated parties," including stockholders, and attorneys, appraisers and accountants who knowingly or recklessly participate in wrongful action likely to have an adverse effect on an insured institution. Formal enforcement action may range from the issuance of a capital directive or cease and desist order to removal of officers and/or directors of the institution, receivership, conservatorship or the termination of deposit insurance. Civil penalties cover a wide range of violations and actions, and range up to $25,000 per day, unless a finding of reckless disregard is made, in which case penalties may be as high

as $1 million per day. The Federal Deposit Insurance Corporation also has the authority to recommend to the Director of the Office of Thrift Supervision that enforcement action be taken with respect to a particular savings institution. If action is not taken by the Director, the Federal Deposit Insurance Corporation has authority to take action under specified circumstances.

Standards for Safety and Soundness. Federal law requires each federal banking agency to prescribe certain standards for all insured depository institutions. These standards relate to, among other things, internal controls, information systems and audit systems, loan documentation, credit underwriting, interest rate risk exposure, asset growth, compensation, and other operational and managerial standards as the agency deems appropriate. The federal banking agencies adopted Interagency Guidelines Prescribing Standards for Safety and Soundness to implement the safety and soundness standards required under federal law. The guidelines set forth the safety and soundness standards that the federal banking agencies use to identify and address problems at insured depository institutions before capital becomes impaired. The guidelines address internal controls and information systems, internal audit systems, credit underwriting, loan documentation, interest rate risk exposure, asset growth, compensation, fees and benefits. If the appropriate federal banking agency determines that an institution fails to meet any standard prescribed by the guidelines, the agency may require the institution to submit to the agency an acceptable plan to achieve compliance with the standard. If an institution fails to meet these standards, the appropriate federal banking agency may require the institution to submit a compliance plan.

Prompt Corrective Action Regulations. Under the prompt corrective action regulations, the Office of Thrift Supervision is required and authorized to take supervisory actions against undercapitalized savings associations. For this purpose, a savings association is placed in one of the following five categories based on the association's capital:

•: well-capitalized (at least 5% leverage capital, 6% tier 1 risk-based capital and 10% total risk-based capital);
•: adequately capitalized (at least 4% leverage capital, 4% tier 1 risk-based capital and 8% total risk-based capital);
•: undercapitalized (less than 8% total risk-based capital, 4% tier 1 risk-based capital or 3% leverage capital);
•: significantly undercapitalized (less than 6% total risk-based capital, 3% tier 1 risk-based capital or 3% leverage capital); and
•: critically undercapitalized (less than 2% tangible capital).

Generally, the banking regulator is required to appoint a receiver or conservator for an association that is "critically undercapitalized." The regulation also provides that a capital restoration plan must be filed with the Office of Thrift Supervision within 45 days of the date an association receives notice that it is "undercapitalized," "significantly undercapitalized" or "critically undercapitalized." In addition, numerous mandatory supervisory actions become immediately applicable to the association, including, but not limited to, restrictions on growth, investment activities, capital distributions and affiliate transactions. The Office of Thrift Supervision may also take any one of a number of discretionary supervisory actions against undercapitalized associations, including the issuance of a capital directive and the replacement of senior executive officers and directors.

At December 31, 2001, Brookline Savings Bank met the criteria for being considered "well-capitalized."

Insurance of Deposit Accounts. Deposit accounts in Brookline Savings Bank are insured by the Bank Insurance Fund (the "BIF") of the Federal Deposit Insurance Corporation, generally up to a

maximum of $100,000 per separately insured depositor. Brookline Savings Bank's deposits therefore are subject to Federal Deposit Insurance Corporation deposit insurance assessments. The Federal Deposit Insurance Corporation has adopted a risk-based system for determining deposit insurance assessments. The Federal Deposit Insurance Corporation is authorized to raise the assessment rates as necessary to maintain the required ratio of reserves to insured deposits of 1.25%. In addition, all Federal Deposit Insurance Corporation-insured institutions must pay assessments to the Federal Deposit Insurance Corporation at an annual rate of approximately .0212% of insured deposits to fund interest payments on bonds maturing in 2017 issued by a federal agency to recapitalize the predecessor to the Savings Association Insurance Fund.

Prohibitions Against Tying Arrangements. Federal savings associations are prohibited, subject to some exceptions, from extending credit to or offering any other service, or fixing or varying the consideration for such extension of credit or service, on the condition that the customer obtain some additional service from the institution or its affiliates or not obtain services of a competitor of the institution.

Federal Home Loan Bank System. Brookline Savings Bank is a member of the Federal Home Loan Bank System, which consists of 12 regional Federal Home Loan Banks. The Federal Home Loan Bank System provides a central credit facility primarily for member institutions. As a member of the Federal Home Loan Bank of Boston, Brookline Savings Bank is required to acquire and hold shares of capital stock in the Federal Home Loan Bank in an amount at least equal to 1% of the aggregate principal amount of its unpaid residential mortgage loans and similar obligations at the beginning of each year, or ¹ / 20 of its borrowings from the Federal Home Loan Bank, whichever is greater. As of December 31, 2001, Brookline Savings Bank was in compliance with this requirement.

Federal Reserve System

The Federal Reserve Board regulations require savings associations to maintain non-interest-earning reserves against their transaction accounts, such as negotiable order of withdrawal and regular checking accounts. At December 31, 2001, Brookline Savings Bank was in compliance with these reserve requirements. The balances maintained to meet the reserve requirements imposed by the Federal Reserve Board may be used to satisfy liquidity requirements imposed by the Office of Thrift Supervision.

Holding Company Regulation

Upon completion of the conversion, Brookline Bancorp, Inc. will be a unitary savings and loan holding company, subject to regulation and supervision by the Office of Thrift Supervision. The Office of Thrift Supervision has enforcement authority over Brookline Bancorp, Inc. and its non-savings institution subsidiaries. Among other things, this authority permits the Office of Thrift Supervision to restrict or prohibit activities that are determined to be a risk to Brookline Savings Bank.

Under prior law, a unitary savings and loan holding company generally had no regulatory restrictions on the types of business activities in which it may engage, provided that its subsidiary savings bank was a qualified thrift lender. The Gramm-Leach-Bliley Act of 1999, however, restricts unitary savings and loan holding companies not existing or applied for before May 4, 1999 to those activities permissible for financial holding companies or for multiple savings and loan holding companies. Brookline Bancorp, Inc. will not be a grandfathered unitary savings and loan holding company and, therefore, will be limited to the activities permissible for financial holding companies or for multiple savings and loan holding companies. A financial holding company may engage in activities that are financial in nature, including underwriting equity securities and insurance, incidental to financial activities or complementary to a financial activity. A multiple savings and loan holding company is generally limited to activities permissible for bank holding companies under Section 4(c)(8)

of the Bank Holding Company Act, subject to the prior approval of the Office of Thrift Supervision, and certain additional activities authorized by Office of Thrift Supervision regulations.

Federal law prohibits a savings and loan holding company, directly or indirectly, or through one or more subsidiaries, from acquiring control of another savings institution or holding company thereof, without prior written approval of the Office of Thrift Supervision. It also prohibits the acquisition or retention of, with specified exceptions, more than 5% of the equity securities of a company engaged in activities that are not closely related to banking or financial in nature or acquiring or retaining control of an institution that is not federally insured. In evaluating applications by holding companies to acquire savings institutions, the Office of Thrift Supervision must consider the financial and managerial resources, future prospects of the savings institution involved, the effect of the acquisition on the risk to the insurance fund, the convenience and needs of the community and competitive factors.

Federal Securities Laws

Brookline Bancorp, Inc. has filed with the Securities and Exchange Commission a registration statement under the Securities Act of 1933 for the registration of the common stock to be issued pursuant to the conversion. Upon completion of the conversion, Brookline Bancorp, Inc. common stock will continue to be registered with the Securities and Exchange Commission under the Securities Exchange Act of 1934. Brookline Bancorp, Inc. will continue to be subject to the information, proxy solicitation, insider trading restrictions and other requirements under the Securities Exchange Act of 1934.

The registration under the Securities Act of 1933 of shares of common stock to be issued in the conversion does not cover the resale of those shares. Shares of common stock purchased by persons who are not affiliates of Brookline Bancorp, Inc. may be resold without registration. Shares purchased by an affiliate of Brookline Bancorp, Inc. will be subject to the resale restrictions of Rule 144 under the Securities Act of 1933. If Brookline Bancorp, Inc. meets the current public information requirements of Rule 144 under the Securities Act of 1933, each affiliate of Brookline Bancorp, Inc. that complies with the other conditions of Rule 144, including those that require the affiliate's sale to be aggregated with those of other persons, would be able to sell in the public market, without registration, a number of shares not to exceed, in any three-month period, the greater of 1% of the outstanding shares of Brookline Bancorp, Inc., or the average weekly volume of trading in the shares during the preceding four calendar weeks. In the future, Brookline Bancorp, Inc. may permit affiliates to have their shares registered for sale under the Securities Act of 1933.

TAXATION

Federal Taxation

General. Brookline Bancorp, Inc. and Brookline Savings Bank are subject to federal income taxation in the same general manner as other corporations, with some exceptions discussed below. The following discussion of federal taxation is intended only to summarize certain pertinent federal income tax matters and is not a comprehensive description of the tax rules applicable to Brookline Bancorp, Inc. or Brookline Savings Bank.

Method of Accounting. For federal income tax purposes, Brookline Bancorp, Inc. reports its income and expenses on the accrual method of accounting and uses a fiscal year ending December 31 for filing its consolidated federal income tax returns.

Taxable Distributions and Recapture. Bad debt reserves created prior to November 1, 1988 are subject to recapture into taxable income should Brookline Savings Bank make certain non-dividend distributions or cease to maintain a bank charter. At December 31, 2001, Brookline Savings Bank's total federal pre-1988 reserve was $1.8 million. This reserve reflects the cumulative effects of federal tax deductions by Brookline Savings Bank for which no federal income tax provision has been made.

Minimum Tax. The Code imposes an alternative minimum tax ("AMT") at a rate of 20% on a base of regular taxable income plus certain tax preferences ("alternative minimum taxable income" or "AMTI"). The AMT is payable to the extent such AMT exceeds regular income tax. In general, net operating losses can offset no more than 90% of AMTI. Special provisions apply to losses generated in 2001 and 2002. Certain payments of alternative minimum tax may be used as credits against regular tax liabilities in future years. Brookline Savings Bank has not been subject to the alternative minimum tax and has no such amounts available as credits for carryover.

Net Operating Loss Carryovers. A financial institution may carry back net operating losses to the preceding two taxable years and forward to the succeeding 20 taxable years. Recently enacted legislation allows net operating losses incurred in 2001 and 2002 to be carried back five years. At December 31, 2001, Brookline Savings Bank had no net operating loss carry forwards for federal income tax purposes.

Corporate Dividends-Received Deduction. Brookline Bancorp, Inc. may exclude from its income 100% of dividends received from Brookline Savings Bank as a member of the same affiliated group of corporations. Brookline Bancorp, MHC owns 57.6% of the outstanding common stock of Brookline Bancorp, Inc. As such, Brookline Bancorp, MHC is not permitted to file a consolidated federal income tax return with Brookline Bancorp, Inc. and Brookline Savings Bank. Corporations that own less than 80% but more than 20% of the stock of a corporation distributing a dividend may deduct from taxable income 80% of dividends received or accrued on their behalf.

State Taxation

Massachusetts State Taxation. For Massachusetts income tax purposes, a consolidated tax return cannot be filed. Instead, Brookline Bancorp, Inc., Brookline Savings Bank and each of their subsidiaries file separate annual income tax returns. Brookline Bancorp, Inc. and Brookline Savings Bank are subject to an annual Massachusetts excise tax at a rate of 10.50% of their net income. For these purposes, Massachusetts net income is defined as gross income from all sources without any exclusions, less the following deductions: all deductions (but not credits) which are allowable under the Internal Revenue Code of 1986, except for those deductions under the Internal Revenue Code relating to (1) dividends received, (2) losses sustained in other taxable years and (3) taxes on or measured by income, franchise taxes for the privilege of doing business and capital stock taxes imposed by any state of the United States, the District of Columbia, the Commonwealth of Puerto Rico, any territory or

possession of the United States or any foreign country, or a political subdivision of any of the foregoing. Brookline Bancorp, Inc. and Brookline Savings Bank are not permitted to carry their losses forward or back for Massachusetts tax purposes. BBS Investment Corporation, Brookline Savings Bank's wholly-owned subsidiary, and Brookline Securities Corp., Brookline Bancorp, Inc.'s wholly-owned subsidiary, are securities corporations and, accordingly, are subject to an excise tax at the rate of 1.32% of their gross income.

In January 1997, Brookline Savings Bank incorporated Brookline Preferred Capital Corporation which elected to be taxed as a real estate investment trust. Brookline Preferred Capital Corporation is 99.9% owned by 160 Associates, Inc., a wholly-owned subsidiary of Brookline Savings Bank. Shareholders of a real estate investment trust that are subject to the Massachusetts corporate excise tax are entitled to a 95% dividends-received deduction. Accordingly, 160 Associates, Inc. pays Massachusetts income tax on only 5% of the dividends it receives from Brookline Preferred Capital Corporation.

MANAGEMENT OF BROOKLINE BANCORP, INC.

Directors

The Board of Directors of Brookline Bancorp, Inc. currently consists of 14 members. Approximately one-third of the directors are elected annually. Directors are generally elected to serve for three year-periods.

The table below sets forth certain information regarding the composition of the Board of Directors of Brookline Bancorp, Inc. as of April 18, 2002, including the terms of office of Board members.

Names	Age	Positions Held	Director Since (1)	Current Term to Expire
Richard P. Chapman, Jr.	67	President and Chief Executive Officer	1972	2005
Charles H. Peck	61	Executive Vice President	1995	2003
George C. Caner, Jr.	76	Secretary	1966	2005
Oliver F. Ames	81	Director	1973	2003
Dennis S. Aronowitz	70	Director	1991	2003
David C. Chapin	65	Director	1989	2004
William G. Coughlin	69	Director	1976	2003
John L. Hall, II	62	Director	1983	2004
Hollis W. Plimpton, Jr.	71	Director	1974	2004
Joseph J. Slotnik	65	Director	1970	2003
William V. Tripp, III	63	Director	1975	2005
Rosamond B. Vaule	64	Director	1989	2004
Peter O. Wilde	63	Director	1993	2005
Franklin Wyman, Jr.	81	Director	1974	2004

(1): Reflects initial appointment to the Board of Directors or Board of Trustees of Brookline Savings Bank.

The principal occupation during the past five years of each director and executive officer of Brookline Bancorp, Inc. is set forth below. All directors and executive officers have held their present positions for five years unless otherwise stated.

Directors

Richard P. Chapman, Jr. has served as President of Brookline Savings Bank from 1973 through April 2000 and Chief Executive Officer since 1975. He has served as President and Chief Executive

Officer of Brookline Bancorp, Inc. since its organization in 1998. Mr. Chapman is also a trustee of a number of John Hancock mutual funds and a trustee of Northeastern University.

Charles H. Peck became President of Brookline Savings Bank in April 2000 and is an Executive Vice President of Brookline Bancorp, Inc. He has served as the Senior Loan Officer of Brookline Savings Bank since 1970.

George C. Caner, Jr. serves as the Secretary of Brookline Bancorp, Inc. Mr. Caner is an attorney at the law firm of Ropes & Gray, where he was a partner from 1965 through 1996. Mr. Caner currently is Of Counsel at the firm.

Oliver F. Ames has served as a member of the Executive Committee (formerly the Board of Investment) of Brookline Savings Bank since 1974. Mr. Ames serves on the board of directors of a number of civic and charitable organizations. From 1962 through 1970, Mr. Ames served as a State Senator.

Dennis S. Aronowitz , an attorney, retired in 1996 from Boston University where he served on the faculty of the Law School since 1967 and was Director of the Banking Law Center and Graduate Banking Law programs. He also is a trustee of a number of John Hancock mutual funds.

David C. Chapin is a Principal of T. H. Niles Real Estate Group, Inc., a real estate investment, property appraisal and management company, and has served in that capacity since 1998. From 1975 to 1998, he served as President of Cameron Properties.

William G. Coughlin became a member of the Executive Committee in 1997. Mr. Coughlin is a private investor in commercial real estate.

John L. Hall, II is President of Hall Properties, Inc., a real estate investment, management and development company, and has served in that capacity since 1989.

Hollis W. Plimpton, Jr. is Rector of St. George's Anglican Church.

Joseph J. Slotnik has served as a member of the Executive Committee since 1974. Mr. Slotnik is a private investor and previously was managing partner of the Boston office of a brokerage and investment firm.

William V. Tripp, III is an attorney and partner at Choate Hall & Stewart, and has been with that firm since 2001. Previously, he was a partner at Holland & Knight, LLP and had been with that firm since 1968.

Rosamond B. Vaule is active in volunteer work for various educational and charitable organizations.

Peter O. Wilde became President of Tuftane Extrusion Technologies, Inc., a manufacturing company, in 1998. In 1997, he became Managing Director of Beckwith Bemis Incorporated, a coatings and finishing company. Previously, he was Vice President of Finance and Administration at Ran Demo, Inc., a materials technology company, and served in that position since 1991.

Franklin Wyman, Jr. became a member of the Executive Committee in 1979. Mr. Wyman is Chairman and Treasurer of O'Conor, Wright, Wyman, Inc., a consulting firm providing advisory services in mergers and acquisitions, where he has been since 1984. He retired as a director of Fitchburg Gas & Electric Company in 1999 and retired as a director of Unitil Corporation, an electric utility company in New Hampshire, in 2000.

Executive Officers Who are Not Directors

Paul R. Bechet , age 60, is Senior Vice President and Chief Financial Officer of Brookline Savings Bank, a position he has held since June 1997. He also serves as Senior Vice President and Chief

Financial Officer of Brookline Bancorp, Inc. He became Treasurer of Brookline Savings Bank and Brookline Bancorp, Inc. in January 2002. Mr. Bechet is a certified public accountant who, prior to joining Brookline Savings Bank, was a partner at KPMG LLP since 1972. His primary areas of responsibility include financial reporting and risk management.

Cheryl B. Gorman , age 50, joined Brookline Savings Bank in April 2002 as Senior Vice President, Retail Banking. Ms. Gorman co-founded Compass Consulting Group in 1986 and has worked with financial institutions throughout New England. Since November 2001, Ms. Gorman provided consulting services to Brookline Savings Bank in the development of a long-range retail banking plan. Prior to 1986, she was vice president in the retail banking group of Rhode Island Hospital Trust and held officer positions in Rhode Island at Columbus Bank and Citizens Bank.

Meetings and Committees of the Board of Directors

The business of the Boards of Directors of Brookline Bancorp, Inc. and Brookline Savings Bank is conducted through meetings and activities of the Boards and their committees. The Board of Brookline Bancorp, Inc. has the following committees: Audit Committee, CRA Committee, Bond and Salary Committee, Executive Committee and Nominating Committee. The Board of Brookline Savings Bank has the following committees: Audit Committee, Bond and Salary Committee, Executive Committee, Loan Committee, Nominating Committee and Watch Committee.

During the year ended December 31, 2001, the Board of Directors of Brookline Bancorp, Inc. held five meetings and the Board of Directors of Brookline Savings Bank held 14 meetings. During the year ended December 31, 2001, no director attended fewer than 75% of the total meetings of the Boards of Directors and committees on which such director served, except for Edward D. Rowley who missed two meetings of the Board of Directors because of illness. Mr. Rowley retired from the Board of Directors on April 18, 2002.

The CRA Committee consists of directors Ames, Aronowitz and Vaule. The Committee met quarterly during the year ended December 31, 2001 to review the status of Brookline Savings Bank's CRA program and any reports issued by regulators resulting from their examination of Brookline Savings Bank's compliance with CRA regulations.

The Bond and Salary Committee of Brookline Bancorp, Inc. and Brookline Savings Bank consists of directors Ames, Slotnik, Tripp and Wyman. The Committee met once during the year ended December 31, 2001 to review executive compensation and employment contracts. It recommends the compensation to be paid to Brookline Bancorp, Inc.'s three highest paid officers, reviews the parameters that must be met for bonuses to be paid to selected officers and approves the actual amounts of bonuses paid.

The Nominating Committee of Brookline Bancorp, Inc. and Brookline Savings Bank consists of directors Coughlin, Wilde and Wyman. The Committee meets as needed to identify, evaluate and recommend to the Board of Directors potential candidates for election as directors and appointments to the Board's committees. It also reviews officer candidates and recommends to the Board of Directors their election to office. The Committee met once during the year ended December 31, 2001.

The Executive Committee consists of directors Ames, Chapman, Coughlin, Slotnik and Wyman. The Committee met 13 times during the year ended December 31, 2001 to exercise general control and supervision of all matters pertaining to the interests of Brookline Bancorp, Inc. and Brookline Savings Bank, subject at all times to the direction of the Board of Directors.

The Loan Committee consists of directors Chapman, Coughlin and Wyman. The Committee generally meets bi-weekly to review and approve all loan requests over $500,000.

The Watch Committee consists of directors Chapman and Slotnik. The Committee met quarterly during the year ended December 31, 2001 to review the status of the loan portfolio and OREO properties, the classification of loans and the adequacy of the allowance for losses on loans and OREO.

The Audit Committee of Brookline Bancorp, Inc. consists of directors Chapin, Tripp and Wilde. The Committee reviews the contents of and conclusions in audit reports prepared by the internal auditor and Brookline Bancorp, Inc.'s independent auditors, reviews and approves the annual engagement of Brookline Bancorp, Inc.'s independent auditors, Brookline Bancorp, Inc.'s audit policy, the internal audit function and the plan of audit coverage, and reviews with management Brookline Bancorp, Inc.'s financial statements and internal controls. The Audit Committee of Brookline Bancorp, Inc. met six times during the year ended December 31, 2001. Each member of the Audit Committee of Brookline Bancorp, Inc. is "independent" as defined in the listing standards of the National Association of Securities Dealers. Brookline Bancorp, Inc.'s Board of Directors has adopted a written charter for the Audit Committee of Brookline Bancorp, Inc.

Directors' Compensation

Executive officers of Brookline Bancorp, Inc. and Brookline Savings Bank receive no fees for service on the Board of Directors of Brookline Bancorp, Inc. and Brookline Savings Bank or on any committees of the Boards. Directors of Brookline Bancorp, Inc. receive an annual retainer of $1,000 and directors of Brookline Savings Bank receive an annual retainer of $5,000. Directors of Brookline Bancorp, Inc. receive fees of $750 for each meeting attended, except for the Secretary of Brookline Bancorp, Inc. who receives $900 for each meeting. No additional fees are paid to directors who also attend meetings of Brookline Savings Bank held on the same day as meetings of Brookline Bancorp, Inc. When Board meetings are held concurrently with meetings of the Board of Directors of Brookline Bancorp, MHC, meeting fees are partially assumed by Brookline Bancorp, MHC.

Members of the Audit Committee and the CRA Committee receive fees of $750 for each meeting attended. The Chairman of the Audit Committee receives an additional annual retainer of $2,000. Members of the Executive Committee of Brookline Savings Bank receive an annual retainer of $5,000 plus fees of $750 for each meeting attended. The Vice Chairman of the Committee receives an additional retainer of $4,000. Members of the Loan Committee of Brookline Savings Bank receive fees of $750 for each meeting attended. The outside director on the Watch Committee receives an annual retainer of $5,000 and an additional $2,000 for serving as Chairman of the Committee.

Executive Compensation

The following table sets forth the cash compensation paid and bonuses accrued as well as certain other compensation paid or accrued for services rendered in all capacities during the years ended December 31, 2001, 2000 and 1999 to the Chief Executive Officer of Brookline Bancorp, Inc. and the

three other executive officers of Brookline Bancorp, Inc. who received total annual compensation in excess of $100,000 ("Named Executive Officers").

									Long-term Compensation
			Annual Compensation						Awards			Payout
Name and Principal Position		Year Ended 12/31	Salary		Bonus		Other Annual Compensation(1)(2)		Restricted Stock Awards(3)		Options/ SARS (#)	LTIP Payouts	All Other Compensation(4)
Richard P. Chapman, Jr.		2001	$	420,000	$	126,000	$	26,043	$	—	—	—	$	22,421
	President and Chief	2000		400,000		120,000		17,251		—	—	—		23,802
	Executive Officer	1999		385,000		115,500		15,001		1,340,750	300,000	—		22,246
Charles H. Peck,		2001		200,000		50,000		22,647		—	—	—		22,421
	Executive Vice	2000		192,500		48,125		12,633		—	—	—		23,802
	President	1999		185,000		46,250		10,869		670,375	175,000	—		22,246
Paul R. Bechet		2001		160,000		40,000		17,767		—	—	—		22,421
	Senior Vice President and	2000		142,500		35,625		8,605		—	—	—		23,802
	Chief Financial Officer	1999		135,000		33,750		8,931		243,281	100,000	—		21,614
Susan M. Ginns (5)		2001		137,000		34,250		18,952		—	—	—		22,401
	Senior Vice President	2000		131,000		32,750		9,563		—	—	—		22,774
	and Treasurer	1999		126,000		31,500		8,852		405,469	75,000	—		20,842

(1): Brookline Bancorp, Inc. also provides certain members of senior management with the use of an automobile, club membership dues and certain other personal benefits, the aggregate value of which did not exceed the lesser of $50,000 or 10% of the total annual salary and bonus reported for each officer.
(2): Includes premiums paid for group term life insurance and medical and dental insurance coverage, and pension plan contribution.
(3): Includes stock awards of 124,000, 62,000, 22,500 and 37,500 shares granted in 1999 to Messrs. Chapman, Peck and Bechet and Ms. Ginns, respectively, under Brookline Bancorp, Inc.'s 1999 Recognition and Retention Plan. The awards to Messrs. Chapman and Peck and Ms Ginns vested in two equal installments on October 19, 1999 and October 19, 2000. The award to Mr. Bechet vests in eight equal annual installments commencing on April 19, 2000. The officers receive all dividends paid on shares awarded to them. All awards vest immediately upon termination of employment due to death, disability, normal retirement or following a change in control. The dollar amounts set forth in the table represent the market value of the shares awarded on the date of the awards. As of December 31, 2001, the market value of the shares awarded to Messrs. Chapman, Peck and Bechet and Ms. Ginns was $2,038,560, $1,019,280, $369,900 and $616,500, respectively.
(4): Represents the market value of shares allocated to officers' accounts pursuant to the Employee Stock Ownership Plan as of the allocation dates.
(5): Ms. Ginns retired from Brookline Bancorp, Inc. effective January 4, 2002. In connection with her retirement, the balance due Ms. Ginns under her supplemental retirement income agreement ("SRIA") was increased to $270,281. For the year ended December 31, 2001, Brookline Savings Bank charged $89,859 to expense under Ms. Ginns' SRIA. In addition, Brookline Savings Bank committed to pay 100% of Ms. Ginns' annual premium for medical and dental benefits in 2002 and to pay part of such annual premiums per year from 2003 through 2011.

Employment and Severance Agreements

Employment Agreements. Brookline Savings Bank has entered into substantially identical employment agreements with Messrs. Chapman and Peck. Each of the agreements has a term of 36 months. On each anniversary date, the agreement may be extended for an additional twelve months, so that the remaining term shall be 36 months. If the agreement is not renewed, the agreement will expire 36 months following the anniversary date. Under the agreements, the current Base Salaries for Messrs. Chapman and Peck are $440,000 and $208,000, respectively. The Base Salary may be increased but not decreased. In addition to the Base Salary, the agreement provides for, among other things, participation in retirement plans and other employee and fringe benefits applicable to executive personnel. The agreement provides for termination by Brookline Savings Bank for cause at any time. In the event Brookline Savings Bank terminates the executive's employment for reasons other than for cause, or in the event of the executive's resignation from Brookline Savings Bank (such resignation to occur within the period or periods set forth in the employment agreement) upon (i) failure to re-elect the executive to his current offices, (ii) a material change in the executive's functions, duties or responsibilities, or relocation of his principal place of employment by more than 30 miles, (iii) liquidation or dissolution of Brookline Savings Bank, (iv) a breach of the agreement by Brookline Savings Bank, or (v) following a change in control of Brookline Savings Bank or Brookline Bancorp, Inc., the executive, or in the event of death, his beneficiary, would be entitled to severance pay in an amount equal to three times the Base Salary and the highest bonus paid during any of the last three years. Messrs. Chapman and Peck would receive an aggregate of $2,472,000 pursuant to their employment agreements upon a change in control of Brookline Savings Bank or Brookline Bancorp, Inc., based upon current levels of compensation. Brookline Savings Bank also would continue the executive's life, health, dental and disability coverage for 36 months from the date of termination. In the event the payments to the executive include an "excess parachute payment" as defined by Code Section 280G (relating to payments made in connection with a change in control), the payments would be reduced in order to avoid having an excess parachute payment.

Under the agreement, the executive's employment may be terminated upon his retirement in accordance with any retirement policy established on behalf of the executive and with his consent. Upon the executive's retirement, he will be entitled to all benefits available to him under any retirement or other benefit plan maintained by Brookline Savings Bank. In the event of the executive's disability for a period of six months, Brookline Savings Bank may terminate the agreement provided that Brookline Savings Bank will be obligated to pay him his Base Salary for the remaining term of the agreement or one year, whichever is longer, reduced by any benefits paid to the executive pursuant to any disability insurance policy or similar arrangement maintained by Brookline Savings Bank. In the event of the executive's death, Brookline Savings Bank will pay his Base Salary to his named beneficiaries for one year following his death, and will also continue medical, dental and other benefits to his family for one year. The employment agreement provides that, following his termination of employment, the executive will not compete with Brookline Savings Bank for a period of one year.

Severance Agreements. Brookline Savings Bank has entered into severance agreements (the "Severance Agreements") with eight other officers of Brookline Savings Bank, including Mr. Bechet and Ms. Gorman, which provide certain benefits in the event of a change in control of Brookline Savings Bank or Brookline Bancorp, Inc. Each of the Severance Agreements provides for a term of 36 months. Commencing on each anniversary date, the Board of Directors may extend any Severance Agreement for an additional year. The Severance Agreements enable Brookline Savings Bank to offer to designated officers certain protections against termination without cause in the event of a "change in control." For these purposes, a "change in control" is defined generally to mean: (i) consummation of a plan of reorganization, merger or sale of substantially all of the assets of Brookline Savings Bank or Brookline Bancorp, Inc. where Brookline Savings Bank or Brookline Bancorp, Inc. is not the surviving entity; (ii) changes to the Board of Directors of Brookline Savings Bank or Brookline Bancorp, Inc.

whereby individuals who constitute the current Board cease to constitute a majority of the Board, subject to certain exceptions; (iii) a change in "control" as defined by the Bank Holding Company Act of 1956, as amended, in effect on the date of the Severance Agreement; (iv) a transaction or occurrence whereby any person becomes the beneficial owner of 25% or more of the voting securities of Brookline Bancorp, Inc.; and (v) a tender offer is made for 25% or more of the voting securities of Brookline Bancorp, Inc. and 25% or more of the stockholders have tendered their shares. These protections against termination without cause in the event of a change in control are frequently offered by other financial institutions, and Brookline Savings Bank may be at a competitive disadvantage in attracting and retaining key employees if it does not offer similar protections. Although the Severance Agreements may have the effect of making a takeover more expensive to an acquiror, Brookline Savings Bank believes that the benefits of enhancing Brookline Savings Bank's ability to attract and retain qualified management persons by offering the Severance Agreements outweighs any disadvantage of such agreements.

Following a change in control of Brookline Bancorp, Inc. or Brookline Savings Bank, an officer is entitled to a payment under the Severance Agreement if the officer's employment is involuntarily terminated during the term of such agreement, other than for cause, as defined, or if the officer voluntarily terminates employment during the term of such agreement as the result of a demotion, loss of title, office or significant authority, reduction in his annual compensation or benefits, or relocation of his principal place of employment by more than 30 miles from its location immediately prior to the change in control. In the event that an officer who is a party to a Severance Agreement is entitled to receive payments pursuant to the Severance Agreement, he will receive a cash payment up to a maximum of one times the average of the three preceding years' annual base salary and bonuses. Mr. Bechet would receive an aggregate of $182,292 and the remaining officers would receive an aggregate of $496,883, pursuant to their severance agreements upon a change in control of Brookline Savings Bank or Brookline Bancorp, Inc. In addition to the severance payment, each covered officer is entitled to receive life, health, dental and disability coverage for a period of up to 12 months from the date of termination. Notwithstanding any provision to the contrary in the Severance Agreement, payments under the Severance Agreements are limited so that they will not constitute an excess parachute payment under Section 280G of the Internal Revenue Code.

Compensation of Officers and Directors Through Benefit Plans

Medical, Dental, Life and Other Similar Employee Benefit Plans. Brookline Savings Bank provides eligible employees (i.e., generally full-time employees and employees who work more than 17 ¹ / 2 hours per week) with group life (after three months of employment), accidental death and dismemberment, and long-term disability coverage. For its eligible employees, Brookline Savings Bank pays 80% of the monthly premiums for group health coverage and 50% of the monthly premiums for individual and family dental coverage. For Messrs. Chapman and Peck, Brookline Savings Bank pays 100% of such premiums. Brookline Savings Bank pays 100% of the monthly premiums for group life insurance coverage after the employee has completed one year of service. Brookline Savings Bank also sponsors a flexible benefits plan under which employees can pay their ratable share of health insurance premiums on a pre-tax basis and a medical expense reimbursement plan under which employees can defer their salary on a pre-tax basis to cover the costs of certain medical expenses not reimbursed through insurance or otherwise.

Defined Benefit Pension Plan. On July 6, 2000, the Board of Directors of Brookline Savings Bank voted to terminate, effective September 30, 2000, Brookline Savings Bank's defined benefit pension plan, a non-contributory qualified retirement plan for eligible employees from the Savings Banks Employee Retirement Association (the "Plan"). In connection with the termination of the Plan, Brookline Savings Bank's Board of Directors also voted to cease the accrual of pension benefits, effective July 31, 2000. Final Plan termination was approved by the Internal Revenue Service in 2001.

As a result of the termination of the Plan, eligible employees were offered a single sum settlement equal to the value of their benefits under the Plan. In addition, a portion of the surplus of the Plan was used to enhance benefits of eligible employees. The following are the actual settlements and enhancements paid to the executive officers of Brookline Savings Bank in 2001:

Executive	Basic Value		Enhancement		Total
Richard P. Chapman, Jr.	$	1,068,407	$	187,823	$	1,256,230
Charles H. Peck		586,222		116,937		703,159
Paul R. Bechet		57,747		91,066		148,813
Susan M. Ginns		426,020		91,488		517,508

Supplemental Retirement Income Agreement. Brookline Savings Bank has entered into non-qualified supplemental retirement income agreements ("SRIA") for the benefit of Messrs. Chapman and Peck that provide them with benefits generally equal to 70% of their average compensation for the three calendar years with the highest rate of compensation in the ten calendar year period prior to retirement, reduced by any distribution they are entitled to receive from Brookline Savings Bank's pension plan and one-half of any Social Security benefits.

Retirement benefits under the SRIA are generally payable as a monthly benefit or, at the election of Brookline Savings Bank, as a lump sum benefit. The monthly benefits are payable on early or normal retirement or disability and continue until the later of the executive's death or 15 years from Mr. Peck's retirement (20 years in the case of Mr. Chapman). Monthly benefits are provided for designated beneficiaries of participants who do not survive until retirement commencing on the date of death and ending on the earlier of (1) the date the executive would have attained his standard life expectancy or (2) 15 years from the date of death in the case of Mr. Peck (20 years in the case of the death of Mr. Chapman). Under the SRIAs, in the case of a change in control, the executive (or in the event of the executive's death, his beneficiary) is irrevocably entitled to elect a lump sum benefit equal to the actuarial equivalent of the monthly benefit to which the executive is entitled at such time. The SRIA is considered an unfunded plan for tax and ERISA purposes. For the year ended December 31, 2001, Brookline Savings Bank charged to expense under the SRIA $320,475 and $101,062 to Mr. Chapman and Mr. Peck, respectively. All obligations under the SRIA are payable from the general assets of Brookline Savings Bank.

401(k) Plan. Brookline Savings Bank maintains the Savings Banks Employees Retirement Association 401(k) Plan which is a qualified, tax-exempt profit sharing plan with a salary deferral feature under Section 401(k) of the Code (the "401(k) Plan"). All employees who have attained age 21 and have worked at least 1,000 hours are eligible to participate.

Under the 401(k) Plan, participants are permitted to make salary reduction contributions equal to the lesser of 15% of compensation or $11,000 in 2002 (as indexed annually). For these purposes, "compensation" includes wages reported on federal income tax form W-2, but does not include compensation in excess of the Code Section 401(a)(17) limits (i.e., $170,000). All employee contributions and earnings thereon are fully and immediately vested.

Defined Contribution Plan. Effective January 1, 2001, a defined contribution plan was established to provide for annual contributions by Brookline Savings Bank equal to 5% of each participant's compensation up to $200,000 in 2002. In order to be fully vested in Brookline Savings Bank's annual contribution, a participant must complete three years of service with Brookline Savings Bank or Brookline Bancorp, Inc. The plan permits employees to direct the investment of their own accounts into various investment options.

Plan benefits will be paid to each participant in the form of a lump sum or installment payments upon retirement or death. If a participant terminates employment prior to retirement, his vested

benefit will be held by the plan until the participant elects to receive his benefit from the plan. If a participant (and the participant's spouse, if married) elects to receive benefits after termination of employment prior to normal or early retirement age, benefits will be paid in a lump sum. Normal retirement age under the plan is age 65. Early retirement age is the earliest of age 62, age 55 with ten years of service, or the date on which a claim for Social Security disability income benefits is approved.

Employee Stock Ownership Plan and Trust. Brookline Savings Bank has implemented an Employee Stock Ownership Plan (the "ESOP"). Employees with at least one year of employment in which they work 1,000 hours or more with Brookline Savings Bank and who have attained age 21 are eligible to participate. The ESOP has borrowed funds from Brookline Bancorp, Inc. and used those funds to purchase shares of the Common Stock of Brookline Bancorp, Inc. Collateral for the loan is the Common Stock purchased by the ESOP. The loan will be repaid principally from Brookline Savings Bank's contributions to the ESOP over a maximum of 30 years. The interest rate for the loan is fixed at 8.50%. Shares purchased by the ESOP are held in a suspense account for allocation among participants as the loan is repaid.

Contributions to the ESOP and shares released from the suspense account in an amount proportional to the repayment of the ESOP loan are allocated among ESOP participants on the basis of compensation in the year of allocation. For the plan year ended December 31, 2001, 32,779 shares were released from the suspense account and allocated to employees. Participants in the ESOP receive credit for each year of service with Brookline Savings Bank prior to the effective date of the ESOP (up to a maximum of three years). Benefits generally vest over a seven year period. Benefits generally vest at the rate of 20% per year beginning in the third year of service until a participant is 100% vested after seven years or upon normal retirement (as defined in the ESOP), disability or death of the participant or a change in control (as defined in the ESOP). A participant who terminates employment for reasons other than death, retirement or disability prior to seven years of credited service will forfeit the nonvested portion of his benefits under the ESOP. Benefits will be payable in the form of Common Stock and cash upon death, retirement, early retirement, disability or separation from service. Brookline Savings Bank's contributions to the ESOP are discretionary, subject to the loan terms and tax law limits and, therefore, benefits payable under the ESOP cannot be estimated. Brookline Savings Bank is required to record compensation expense in an amount equal to the fair market value of the shares released from the suspense account.

Brookline Savings Bank's Board of Directors administers the ESOP. Brookline Savings Bank has appointed an independent financial institution to serve as trustee of the ESOP. The ESOP committee may instruct the trustee regarding investment of funds contributed to the ESOP. The ESOP trustee, subject to its fiduciary duty, must vote all allocated shares held in the ESOP in accordance with the instructions of participating employees. Under the ESOP, nondirected shares and shares held in the suspense account will be voted in a manner calculated to most accurately reflect the instructions it has received from participants regarding the allocated stock so long as such vote is in accordance with the provisions of ERISA.

Stock Benefit Plans

The Board of Directors of Brookline Bancorp, Inc. has adopted the 1999 Stock Option Plan and the 1999 Recognition and Retention Plan, both of which plans have been approved by stockholders. Pursuant to the Recognition and Retention Plan, awards were made to directors and certain executive officers and employees of Brookline Bancorp, Inc. and affiliates of Brookline Bancorp, Inc. as determined by the Bond and Salary Committee, which administers the plan. Awards vest for such participants in accordance with a schedule determined by the Committee. If a recipient ceases continuous service with Brookline Bancorp, Inc. or Brookline Savings Bank due to normal retirement, death or disability, or following a change in control, shares subject to restrictions will immediately vest; in the event of cessation of continuous service for any other reason, unvested shares are forfeited and

returned to Brookline Bancorp, Inc. Recipients have the right to vote nonvested shares that have been awarded and will receive dividends declared on such shares.

Pursuant to the Stock Option Plan, options to purchase common stock of Brookline Bancorp, Inc. were granted to directors and certain executive officers and employees of Brookline Bancorp, Inc. and affiliates of Brookline Bancorp, Inc., as determined by the Bond and Salary Committee which administers the plan. The Committee also determines the period over which such awards will vest and become exercisable. The plan provides for awards in the form of stock options, reload options, limited stock appreciation rights and dividend equivalent rights. No options were granted to the Named Executive Officers under the Stock Option Plan during the year ended December 31, 2001.

Set forth below is certain information concerning options outstanding to the Named Executive Officers at December 31, 2001 and options exercised by the Named Executive Officers during 2001.

				Number of Options at Year-End		Value of Unexercised in-the-Money Options at Year-End
Name	Shares Acquired Upon Exercise	Value Realized		Number of Options at Year-End		Value of Unexercised in-the-Money Options at Year-End
Name	Shares Acquired Upon Exercise	Value Realized		Exercisable	Unexercisable	Exercisable		Unexercisable
Richard P. Chapman, Jr.	10,000	$	54,475	170,000	120,000	$	956,675	$	675,300
Charles H. Peck	9,248		50,483	95,752	70,000		538,844		393,925
Paul R. Bechet	18,497		102,150	21,503	60,000		121,008		337,650
Susan M. Ginns	—		—	45,000	30,000		253,238		168,825

Transactions with Certain Related Persons

All transactions between Brookline Bancorp, Inc. and its executive officers, directors, holders of 10% or more of the shares of its Common Stock and affiliates thereof, are on terms no less favorable to Brookline Bancorp, Inc. than could have been obtained by it in arm's-length negotiations with unaffiliated persons. The balance of loans outstanding to directors, executive officers and their related interests amounted to $4,170,230 at December 31, 2001.

Benefits to Be Considered Following Completion of the Conversion

Stock Option Plan. We intend to submit a new stock option plan for stockholder approval no earlier than six months after the completion of the conversion. If approved by the stockholders, the new stock option plan would reserve 10% of the shares sold in the offering for issuance when options granted to recipients are exercised. Ten percent of the shares issued in the offering would amount to 2,167,500 shares, 2,550,000 shares, 2,932,500 shares or 3,372,375 shares at the minimum, mid-point, maximum and adjusted maximum of the offering range, respectively. No options would be granted under the new stock option plan until stockholder approval of the plan is received. In the event that shares underlying options come from authorized but unissued shares, stockholders would experience dilution of approximately 5.4% in their ownership interest in Brookline Bancorp, Inc. at the mid-point of the offering range.

The exercise price of the options granted under the new stock option plan will be equal to the fair market value of Brookline Bancorp, Inc. common stock on the date of grant of the stock options. If the stock option plan is adopted within one year following the conversion, options may vest no faster than 20% per year beginning 12 months after the date of grant. Options granted under the stock option plan would be adjusted for capital changes such as stock splits and stock dividends. Awards will be 100% vested upon termination of employment due to death or disability, and if the stock option plan is adopted more than one year after the conversion, awards would be 100% vested upon normal retirement or a change in control of Brookline Savings Bank or Brookline Bancorp, Inc. Under Office of Thrift Supervision rules, if the stock option plan is adopted within one year of the conversion, no individual officer may receive more than 25% of the awards under the plan, no non-employee director

may receive more than 5% of the awards under the plan, and all non-employee directors as a group may receive in the aggregate no more than 30% of the awards under the plan.

The stock option plan would be administered by a committee of non-employee members of the Brookline Bancorp, Inc.'s Board of Directors. Options granted under the stock option plan to employees may be "incentive" stock options, which are designed to result in a beneficial tax treatment to the employee but no tax deduction to Brookline Bancorp, Inc. Non-qualified stock options may also be granted to employees under the stock option plan, and will be granted to the non-employee directors who receive stock options. In the event an option recipient terminates his employment or service as an employee or director, the options would terminate during certain specified periods.

Stock Recognition and Retention Plan. We also intend to request stockholder approval of a new stock recognition and retention plan, no earlier than six months after the completion of the conversion. If approved by stockholders, the new stock recognition and retention plan would, if implemented within one year of conversion, reserve 4% of the shares sold in the offering (assuming Brookline Savings Bank has a tangible capital to assets ratio in excess of 10%) or 867,000 shares, 1,020,000 shares, 1,173,000 or 1,348,950 shares at the minimum, mid-point, maximum and adjusted maximum of the offering range, respectively. We must recognize expense for shares awarded over their vesting period at the fair market value of the shares on the date they are awarded. The recipients will be awarded common stock under the stock recognition and retention plan at no cost to them. No awards would be made under the stock recognition and retention plan until the plan is approved by stockholders. If the shares awarded under the stock recognition and retention plan come from authorized but unissued shares totaling 4% of the shares sold in the offering, stockholders would experience dilution of approximately 2.3% in their ownership interest in Brookline Bancorp, Inc. at the mid-point of the offering range.

Awards under the stock recognition and retention plan would be nontransferable and nonassignable. Under Office of Thrift Supervision regulations, if the stock recognition and retention plan is adopted within one year following the conversion, the shares which are subject to an award may vest no faster than 20% per year beginning 12 months after the date of grant of the award. Awards would be adjusted for capital changes such as stock dividends and stock splits. Awards would be 100% vested upon termination of employment or service due to death or disability, and if the stock recognition and retention plan is adopted more than one year after the conversion, awards would be 100% vested upon normal retirement or a change in control of Brookline Savings Bank or Brookline Bancorp, Inc. If employment or service were to terminate for other reasons, the award recipient would forfeit any nonvested award. If employment or service is terminated for cause (as defined), shares not already delivered would be forfeited. Under Office of Thrift Supervision rules, if the stock recognition and retention plan is adopted within one year of the conversion, no individual officer may receive more than 25% of the awards under the plan, no non-employee director may receive more than 5% of the awards under the plan, and all non-employee directors as a group may receive no more than 30% of the awards under the plan in the aggregate.

The recipient of an award will recognize income equal to the fair market value of the stock earned, determined as of the date of vesting, unless the recipient makes an election under Section 83(b) of the Internal Revenue Code to be taxed earlier. The amount of income recognized by the recipient would be a deductible expense for tax purposes for Brookline Bancorp, Inc. If the stock recognition and retention plan is adopted within one year following the conversion, dividends and other earnings will accrue and be payable to the award recipient when the shares vest. If the stock recognition and retention plan is adopted within one year following the conversion, shares not yet vested will be voted by the trustee of the stock recognition and retention plan, taking into account the best interests of the award recipients. If the stock recognition and retention plan is adopted more than one year following the conversion, dividends declared on unvested shares will be distributed to the recipient when paid and the recipient will be entitled to vote the unvested shares.

BENEFICIAL OWNERSHIP OF COMMON STOCK

The following table provides the beneficial ownership of our common stock held by our directors and executive officers, individually and as a group as of , 2002. The business address of each director and executive officer is 160 Washington Street, Brookline, Massachusetts 02445.

Name of Beneficial Owner		Number of Shares of Common Stock Beneficially Owned (1)(2)		Percent of All Common Stock Outstanding (4)
Richard P. Chapman, Jr.
Charles H. Peck
George C. Caner, Jr.
Oliver F. Ames
Dennis S. Aronowitz
David C. Chapin
William G. Coughlin
John L. Hall, II
Hollis W. Plimpton, Jr.
Joseph J. Slotnik
William V. Tripp, III
Rosamond B. Vaule
Peter O. Wilde
Franklin Wyman, Jr.
Paul R. Bechet
Cheryl B. Gorman
All directors and executive officers as a group (16 persons)(3)

(1): In accordance with Rule 13d-3 under the Securities Exchange Act of 1934, a person is deemed to be the beneficial owner for purposes of this table of any shares of common stock if he has sole or shared voting or investment power with respect to such security, or has a right to acquire beneficial ownership at any time within 60 days from the date as of which beneficial ownership is being determined. As used herein, "voting power" is the power to vote or direct the voting of shares and "investment power" is the power to dispose or direct the disposition of shares. Includes all shares held directly as well as by spouses and minor children, in trust and other indirect ownership, over which shares the named individuals effectively exercise sole or shared voting and investment power.
(2): The shares of common stock in this column include 780,255 shares in total and by individual the following shares which may be acquired by the persons indicated pursuant to the exercise of stock options within 60 days of , 2002: Mr. Chapman—230,000; Mr. Peck—130,752; Mr. Caner—25,000; Mr. Ames—40,000; Mr. Aronowitz—25,000; Mr. Chapin—30,000; Mr. Coughlin—38,000; Mr. Hall—25,000; Mr. Plimpton—10,000; Mr. Slotnik—40,000; Mr. Tripp—30,000; Ms. Vaule—25,000; Mr. Wilde—30,000; Mr. Wyman—60,000; and Mr. Bechet—41,503.
(3): Excludes 422,992 shares of common stock (representing 1.6% of the shares of common stock outstanding as of December 31, 2001) owned by the employee stock ownership plan for the benefit of the employees of Brookline Bancorp, Inc. and Brookline Savings Bank.
(4): Calculated by dividing the number of shares by the total shares of common stock outstanding at , 2002 (26,794,043 shares) plus the number of shares which each individual may acquire pursuant to the exercise of stock options within 60 days of , 2002.
*: Less than three-tenths of 1%.

SUBSCRIPTIONS BY EXECUTIVE OFFICERS AND DIRECTORS

The table below sets forth, for each of Brookline Bancorp, Inc.'s directors and executive officers and for all of the directors and executive officers as a group, the following information:

(1): the number of exchange shares to be held upon consummation of the conversion, based upon their beneficial ownership of Brookline Bancorp, Inc. common stock as of , 2002;
(2): the proposed purchases of subscription shares, assuming sufficient shares are available to satisfy their subscriptions; and
(3): the total amount of Brookline Bancorp, Inc. common stock to be held upon consummation of the conversion.

In each case, it is assumed that subscription shares are sold at the midpoint of the offering range. See "The Conversion—Limitations on Common Stock Purchases."

		Proposed Purchases of Stock in the Offering (1)		Total Common Stock to be Held
Name of Beneficial Owner	Number of Exchange Shares to be Held (2)	Number of Shares	Amount	Number of Shares	Percentage of Total Outstanding
Richard P. Chapman, Jr.
Charles H. Peck
George C. Caner, Jr.
Oliver F. Ames
Dennis S. Aronowitz
David C. Chapin
William G. Coughlin
John L. Hall, II
Hollis W. Plimpton, Jr.
Joseph J. Slotnik
William V. Tripp, III
Rosamond B. Vaule
Peter O. Wilde
Franklin Wyman, Jr.
Paul R. Bechet
Cheryl B. Gorman

*: Less than 1%.
(1): Includes proposed subscriptions, if any, by associates.
(2): Based on information presented in "Beneficial Ownership of Common Stock."

THE CONVERSION

The Boards of Directors of Brookline Bancorp, Inc. and Brookline Bancorp, MHC have approved the plan of conversion. The plan of conversion must also be approved by the members of Brookline Bancorp, MHC (depositors of Brookline Savings Bank) and the stockholders of Brookline Bancorp, Inc. A special meeting of members and a special meeting of stockholders have been called for this purpose. The Office of Thrift Supervision also has conditionally approved the plan; however, such approval does not constitute a recommendation or endorsement of the plan of conversion by that agency.

General

The respective Boards of Directors of Brookline Bancorp, MHC and Brookline Bancorp, Inc. adopted the plan of conversion on April 4, 2002. Pursuant to the plan of conversion, our organization will convert from the mutual holding company form of organization to the fully public form. Brookline Bancorp, MHC, the mutual holding company parent of Brookline Bancorp, Inc., will be merged into Brookline Savings Bank, and Brookline Bancorp, MHC will no longer exist. Pursuant to the plan, Brookline Bancorp, Inc., which owns 100% of Brookline Savings Bank, also will be succeeded by a new Delaware corporation with the same name. As part of the conversion, shares of common stock of Brookline Bancorp, Inc. representing the ownership interest of Brookline Bancorp, MHC, will be offered for sale in the offering. When the conversion is completed, all of the capital stock of Brookline Savings Bank will be owned by Brookline Bancorp, Inc. A diagram of our corporate structure before and after the conversion is set forth in the Summary of this prospectus.

Under the plan of conversion, at the conclusion of the conversion and stock offering, each share of Brookline Bancorp, Inc. common stock owned by persons other than Brookline Bancorp, MHC will be converted automatically into the right to receive new shares of Brookline Bancorp, Inc. common stock determined pursuant to the exchange ratio. The exchange ratio will ensure that immediately after the conversion and exchange of existing shares of Brookline Bancorp, Inc. for new shares, excluding any shares purchased in the offering, the public stockholders of Brookline Bancorp, Inc. common stock will own the same aggregate percentage of new Brookline Bancorp, Inc. common stock that they owned immediately prior to the conversion.

We intend to retain 50% of the net proceeds of the offering and to contribute the balance of the net proceeds to Brookline Savings Bank. The conversion will be effected only upon completion of the sale of at least the minimum number of shares of our common stock to be offered pursuant to the plan of conversion.

The plan of conversion provides generally that we will offer shares of common stock for sale in the subscription offering to eligible account holders, our tax-qualified benefit plans, including the employee stock ownership plan, supplemental eligible account holders and other members. Subject to the prior rights of these holders of subscription rights, we will offer common stock for sale in a community offering to members of the general public, with a preference given in the following order:

(1): First, to public stockholders of Brookline Bancorp, Inc. common stock as of , 2002; and
(2): Second, to natural persons residing in Middlesex, Norfolk and Suffolk Counties, Massachusetts.

We have the right to accept or reject, in whole or in part, any orders to purchase shares of the common stock received in the community offering. The community offering may begin at the same time as the subscription offering and must be completed within 45 days after the completion of the subscription offering unless otherwise extended by the Office of Thrift Supervision. See "—Community Offering."

We determined the number of shares of common stock to be offered in the offering based upon an independent appraisal of the estimated pro forma market value of Brookline Bancorp, Inc. All shares of common stock to be sold in the offering will be sold at $10.00 per share. The independent valuation will be updated and the final number of the shares to be issued in the offering will be determined at the completion of the offering. See "—Stock Pricing and Number of Shares to be Issued" for more information as to the determination of the estimated pro forma market value of the common stock.

The following is a brief summary of the conversion and is qualified in its entirety by reference to the provisions of the plan of conversion. A copy of the plan of conversion is available for inspection at each branch of Brookline Savings Bank and at the Northeast Regional and Washington, D.C. offices of the Office of Thrift Supervision. The plan of conversion is also filed as an exhibit to the application to convert from mutual to stock form of which this prospectus is a part, copies of which may be obtained from the Office of Thrift Supervision. See "Additional Information."

Reasons for the Conversion

The primary reasons for the conversion are to facilitate acquisitions of other financial institutions, support internal growth, improve our overall competitive position and enhance profitability.

As a fully-converted stock holding company, we will have greater flexibility in structuring mergers and acquisitions, including the form of consideration paid in a transaction. In our current mutual holding company structure, our ability to offer our common stock as consideration for a merger or acquisition has been limited. Potential sellers often want stock for at least part of the purchase price. Our new stock holding company structure will enhance our ability to compete with other bidders when acquisition opportunities arise by enabling us to offer stock or cash consideration.

The additional capital raised in the conversion also will support increased lending, expansion of our banking franchise, and introduction of new products and services.

Approvals Required

The affirmative vote of a majority of the total eligible votes of the members of Brookline Bancorp, MHC at the special meeting of members is required to approve the plan of conversion. By their approval of the plan of conversion, the members of Brookline Bancorp, MHC will also be deemed to approve the merger of Brookline Bancorp, MHC into Brookline Savings Bank. The affirmative vote of the holders of at least two-thirds of the outstanding common stock of Brookline Bancorp, Inc. and if required by the Office of Thrift Supervision, a majority of the votes cast by the public stockholders of Brookline Bancorp, Inc. common stock also are required to approve the plan of conversion. The plan of conversion also must be approved by the Office of Thrift Supervision, which has given its conditional approval.

Share Exchange Ratio

Office of Thrift Supervision regulations provide that in a conversion of a mutual holding company to fully stock form, the public stockholders will be entitled to exchange their shares for common stock of the converted holding company, provided that the mutual holding company demonstrates to the satisfaction of the Office of Thrift Supervision that the basis for the exchange is fair and reasonable. The Board of Directors of Brookline Bancorp, Inc. has determined that each publicly held share of Brookline Bancorp, Inc. common stock will, on the effective date of the conversion, be converted automatically into and become the right to receive a number of new shares of Brookline Bancorp, Inc. common stock. The number of new shares of common stock will be determined pursuant to the exchange ratio which ensures that the public stockholders of Brookline Bancorp, Inc. common stock will own the same percentage of new common stock in Brookline Bancorp, Inc. after the conversion as they held in Brookline Bancorp, Inc. immediately prior to the conversion, exclusive of their purchase of

additional shares, and the receipt of cash in lieu of fractional shares. At December 31, 2001, there were 26,767,549 shares of Brookline Bancorp, Inc. common stock outstanding (net of treasury stock), and 11,347,199 shares, or 42.4% of the total, were publicly held. The exchange ratio is not dependent on the market value of Brookline Bancorp, Inc. common stock. It is calculated based on the percentage of Brookline Bancorp, Inc. common stock held by the public, the independent appraisal of Brookline Bancorp, Inc. prepared by RP Financial, LC and the number of shares sold in the offering. The exchange ratio is expected to range from approximately 1.4056 exchange shares for each publicly held share of Brookline Bancorp, Inc. at the minimum of the offering range to 2.1870 exchange shares for each publicly held share of Brookline Bancorp, Inc. at the adjusted maximum of the offering range.

If you are now a stockholder of Brookline Bancorp, Inc., your existing shares will be cancelled and exchanged for new shares of Brookline Bancorp, Inc. The number of shares you receive will be based on the exchange ratio determined as of the closing of the conversion. The actual number of shares you receive will depend upon the number of shares we sell in the offering, which in turn will depend upon the final appraised value of Brookline Bancorp, Inc. The following table shows how the exchange ratio will adjust, based on the number of shares sold in the offering. The table also shows how many shares an owner of Brookline Bancorp, Inc. common stock would receive in the exchange, adjusted for the number of shares sold in the offering.

	New Shares to be Sold in This Offering			New Shares to be Exchanged for Existing Shares of Brookline Bancorp, Inc.
	New Shares to be Sold in This Offering						Total Shares of Common Stock to be Outstanding	Exchange Ratio	New Shares to be Received for 100 Existing Shares
	Amount	Percent		Amount	Percent		Total Shares of Common Stock to be Outstanding	Exchange Ratio	New Shares to be Received for 100 Existing Shares
Minimum	21,675,000	57.6	%	15,949,738	42.4	%	37,624,738	1.4056	140.56
Midpoint	25,500,000	57.6	%	18,764,397	42.4	%	44,264,397	1.6537	165.37
Maximum	29,325,000	57.6	%	21,579,057	42.4	%	50,904,057	1.9017	190.17
15% above Maximum	33,723,750	57.6	%	24,815,916	42.4	%	58,539,666	2.1870	218.70

Options to purchase shares of Brookline Bancorp, Inc. common stock also will be converted into and become options to purchase Brookline Bancorp, Inc. common stock. The number of shares of common stock to be received upon exercise of these options will be determined pursuant to the exchange ratio. The aggregate exercise price, duration and vesting schedule of these options will not be affected. At December 31, 2001, there were 1,183,005 outstanding options to purchase Brookline Bancorp, Inc. common stock, 786,305 of which were vested.

Effects of Conversion on Depositors, Borrowers and Members

Continuity. While the conversion is being accomplished, the normal business of Brookline Savings Bank of accepting deposits and making loans will continue without interruption. Brookline Savings Bank will continue to be a federally chartered savings association and will continue to be regulated by the Office of Thrift Supervision. After the conversion, Brookline Savings Bank will continue to offer existing services to depositors, borrowers and other customers. The directors serving Brookline Bancorp, Inc. at the time of the conversion will serve as directors of Brookline Bancorp, Inc. after the conversion.

Effect on Deposit Accounts. Under the plan of conversion, each depositor in Brookline Savings Bank at the time of the conversion will automatically continue as a depositor after the conversion, and each of the deposit accounts will remain the same with respect to deposit balance, interest rate and other terms. Each such account will be insured by the Federal Deposit Insurance Corporation to the same extent as before the conversion. Depositors will continue to hold their existing certificates, passbooks and other evidences of their accounts.

Effect on Loans. No loan outstanding from Brookline Savings Bank will be affected by the conversion, and the amount, interest rate, maturity and security for each loan will remain as it was contractually fixed prior to the conversion.

Effect on Voting Rights of Members. At present, all depositors are members of, and have voting rights in, Brookline Bancorp, MHC as to all matters requiring membership action. Upon completion of the conversion, depositors will cease to be members of Brookline Bancorp, MHC and will no longer have voting rights. Upon completion of the conversion, all voting rights in Brookline Savings Bank will be vested in Brookline Bancorp, Inc. as the sole stockholder of Brookline Savings Bank. The stockholders of Brookline Bancorp, Inc. will possess exclusive voting rights with respect to Brookline Bancorp, Inc. common stock.

Tax Effects. Brookline Bancorp, Inc. will receive an opinion of counsel or tax advisor with regard to federal and state income taxation to the effect that the conversion will not be taxable for federal or state income tax purposes to Brookline Bancorp, MHC, Brookline Bancorp, Inc., the public stockholders of Brookline Bancorp, Inc., members of Brookline Bancorp, MHC, eligible account holders, supplemental eligible account holders, or Brookline Savings Bank. See "—Tax Aspects."

Effect on Liquidation Rights. Each depositor in Brookline Savings Bank has both a deposit account in Brookline Savings Bank and a pro rata ownership interest in the net worth of Brookline Bancorp, MHC based upon the balance in his or her account. This interest may only be realized in the event of a complete liquidation of Brookline Bancorp, MHC and Brookline Savings Bank. However, this ownership interest is tied to the depositor's account and has no tangible market value separate from the deposit account. Any depositor who opens a deposit account obtains a pro rata ownership interest in Brookline Bancorp, MHC without any additional payment beyond the amount of the deposit. A depositor who reduces or closes his account receives a portion or all of the balance in the account but nothing for his ownership interest in the net worth of Brookline Bancorp, MHC, which is lost to the extent that the balance in the account is reduced or closed.

Consequently, depositors in a stock subsidiary of a mutual holding company normally have no way of realizing the value of their ownership interest, which has realizable value only in the unlikely event that Brookline Bancorp, MHC and Brookline Savings Bank are liquidated. If this occurs, the depositors of record at that time, as owners, would share pro rata in any residual surplus and reserves of Brookline Bancorp, MHC after other claims, including claims of depositors to the amounts of their deposits, are paid.

In the unlikely event that Brookline Savings Bank were to liquidate after the conversion, all claims of creditors, including those of depositors, also would be paid first, followed by distribution of the "liquidation account" to depositors as of December 31, 2000 and March 31, 2002, with any assets remaining thereafter distributed to Brookline Bancorp, Inc. as the holder of Brookline Savings Bank's capital stock. Pursuant to the rules and regulations of the Office of Thrift Supervision, a post-conversion merger, consolidation, sale of bulk assets or similar combination or transaction with another insured savings institution would not be considered a liquidation and, in such a transaction, the liquidation account would be assumed by the surviving institution. See "—Liquidation Rights."

Stock Pricing and Number of Shares to be Issued

The plan of conversion and federal regulations require that the aggregate purchase price of the common stock sold in the offering must be based on the appraised pro forma market value of the common stock, as determined by an independent valuation. Brookline Savings Bank and Brookline Bancorp, Inc. have retained RP Financial, LC to make this valuation. For its services in preparing the initial valuation, RP Financial, LC will receive a fee of $72,000. This amount does not include a fee of $18,000 to be paid to RP Financial, LC for assistance in the preparation of a business plan. Brookline

Savings Bank and Brookline Bancorp, Inc. have agreed to indemnify RP Financial, LC and its employees and affiliates against specified losses, including any losses in connection with claims under the federal securities laws, arising out of its services as appraiser, except where RP Financial, LC's liability results from its negligence or bad faith.

The appraisal considered the pro forma impact of the offering. Consistent with the Office of Thrift Supervision appraisal guidelines, the appraisal applied three primary methodologies: the pro forma price-to-book value approach applied to both reported book value and tangible book value; the pro forma price-to-earnings approach applied to reported and core earnings; and the pro forma price-to-assets approach. The market value ratios applied in the three methodologies were based upon the current market valuations of the peer group companies, subject to valuation adjustments applied by RP Financial, LC to account for differences between Brookline Bancorp, Inc. and the peer group. RP Financial, LC placed the greatest emphasis on the price-to-earnings and price-to-book approaches in estimating pro forma market value.

The independent valuation was prepared by RP Financial, LC in reliance upon the information contained in this prospectus, including the consolidated financial statements. RP Financial, LC also considered the following factors, among others:

•: the present and projected operating results and financial condition of Brookline Bancorp, Inc.;
•: the economic and demographic conditions in Brookline Bancorp, Inc.'s existing market area;
•: certain historical, financial and other information relating to Brookline Bancorp, Inc.;
•: a comparative evaluation of the operating and financial characteristics of Brookline Bancorp, Inc. with those of other similarly situated publicly traded savings institutions located in Massachusetts and other regions of the United States;
•: the aggregate size of the offering of the common stock;
•: the impact of the conversion on Brookline Bancorp, Inc.'s stockholders' equity and earnings potential;
•: the proposed dividend policy of Brookline Bancorp, Inc.; and
•: the trading market for securities of comparable institutions and general conditions in the market for such securities.

Included in RP Financial, LC's report were certain assumptions as to the pro forma earnings of Brookline Bancorp, Inc. after the conversion that were utilized in determining the appraised value. These assumptions included estimated expenses, an assumed after-tax rate of return on the net conversion proceeds and purchases in the open market of 4% of the common stock issued in the offering by the recognition and retention plan at the $10.00 purchase price. See "Pro Forma Data" for additional information concerning theses assumptions. The use of different assumptions may yield different results.

The independent valuation states that as of March 29, 2002, the estimated pro forma market value, or valuation range, of Brookline Bancorp, Inc. ranged from a minimum of $376.2 million to a maximum of $509.0 million, with a midpoint of $442.6 million. The Board of Directors decided to offer the shares for a price of $10.00 per share. The aggregate offering price of the shares will be equal to the valuation range multiplied by the percentage of Brookline Bancorp, Inc. common stock owned by Brookline Bancorp, MHC. The number of shares offered will be equal to the aggregate offering price of the shares divided by the price per share. Based on the valuation range, the percentage of Brookline Bancorp, Inc. common stock owned by Brookline Bancorp, MHC and the $10.00 price per share, the minimum of the offering range will be 21,675,000 shares, the midpoint of the offering range will be 25,500,000 shares and the maximum of the offering range will be 29,325,000 shares.

The Board of Directors reviewed the independent valuation and, in particular, considered the following:

•: Brookline Bancorp, Inc.'s financial condition and results of operations;
•: comparison of financial performance ratios of Brookline Bancorp, Inc. to those of other financial institutions of similar size;
•: stock market conditions generally and in particular for financial institutions; and
•: the historical trading price of the publicly held shares of Brookline Bancorp, Inc. common stock.

All of these factors are set forth in the independent valuation. The Board also reviewed the methodology and the assumptions used by RP Financial, LC in preparing the independent valuation and the Board believes that such assumptions were reasonable. The offering range may be amended with the approval of the Office of Thrift Supervision, if required, as a result of subsequent developments in the financial condition of Brookline Bancorp, Inc. or Brookline Savings Bank or market conditions generally. In the event the independent valuation is updated to amend the pro forma market value of Brookline Bancorp, Inc. to less than $376.2 million or more than $585.4 million, the appraisal will be filed with the Securities and Exchange Commission by post-effective amendment.

The independent valuation is not intended, and must not be construed, as a recommendation of any kind as to the advisability of purchasing our common stock. RP Financial, LC did not independently verify our consolidated financial statements and other information that we provided to them, nor did RP Financial, LC independently value our assets or liabilities. The independent valuation considers Brookline Savings Bank as a going concern and should not be considered as an indication of the liquidation value of Brookline Savings Bank. Moreover, because the valuation is necessarily based upon estimates and projections of a number of matters, all of which may change from time to time, no assurance can be given that persons purchasing our common stock in the offering will thereafter be able to sell their shares at prices at or above the $10.00 price.

Following commencement of the subscription offering, the maximum of the valuation range may be increased by up to 15% to up to $585.4 million, which will result in a corresponding increase of up to 15% in the maximum of the offering range to up to 33,723,750 shares, to reflect changes in the market and financial conditions, without resoliciting subscribers. We will not decrease the minimum of the valuation range and the minimum of the offering range without a resolicitation of subscribers. The subscription price of $10.00 per share will remain fixed. See "—Limitations on Common Stock Purchases" as to the method of distribution and allocation of additional shares that may be issued in the event of an increase in the offering range to fill unfilled orders in the offering.

If the update to the independent valuation at the conclusion of the offering results in an increase in the maximum of the valuation range to more than $585.4 million and a corresponding increase in the offering range to more than 33,723,750 shares, or a decrease in the minimum of the valuation range to less than $376.2 million and a corresponding decrease in the offering range to fewer than 21,675,000 shares, then, after consulting with the Office of Thrift Supervision, we may terminate the plan of conversion, cancel withdrawal authorizations and return by check all funds received promptly with interest at Brookline Savings Bank's passbook rate of interest. Alternatively, we may hold a new offering, establish a new offering range, extend the offering period and commence a resolicitation of subscribers or take other actions as permitted by the Office of Thrift Supervision in order to complete the conversion. In the event that a resolicitation is commenced, unless we receive an affirmative response within a reasonable period of time, we will return all funds promptly to investors as described above. Any resolicitation following the conclusion of the subscription and community offerings would not exceed 45 days unless further extended by the Office of Thrift Supervision for periods of up to 90 days.

An increase in the number of shares to be issued in the offering would decrease both a subscriber's ownership interest and Brookline Bancorp, Inc.'s pro forma earnings and stockholders' equity on a per share basis while increasing pro forma earnings and stockholders' equity on an aggregate basis. A decrease in the number of shares to be issued in the offering would increase both a subscriber's ownership interest and Brookline Bancorp, Inc.'s pro forma earnings and stockholders' equity on a per share basis, while decreasing pro forma earnings and stockholders' equity on an aggregate basis. For a presentation of the effects of these changes, see "Pro Forma Data."

Copies of the appraisal report of RP Financial, LC and the detailed memorandum of the appraiser setting forth the method and assumptions for the appraisal are available for inspection at the main office of Brookline Savings Bank and as specified under "Additional Information."

Exchange of Stock Certificates

The conversion of existing outstanding shares of Brookline Bancorp, Inc. common stock into the right to receive new shares of Brookline Bancorp, Inc. common stock will occur automatically on the effective date of the conversion. As soon as practicable after the effective date of the conversion, we or a bank or trust company designated by us in the capacity of exchange agent, will send a transmittal form to each public stockholder of Brookline Bancorp, Inc. who holds stock certificates. The transmittal forms are expected to be mailed within five business days after the effective date of the conversion and will contain instructions on how to exchange old shares of Brookline Bancorp, Inc. common stock for new shares of Brookline Bancorp, Inc. common stock. We expect that stock certificates for new shares of Brookline Bancorp, Inc. common stock will be distributed within five business days after we receive properly executed transmittal forms and other required documents. Shares held by public stockholders in street name will be exchanged automatically upon the effective date; no transmittal forms will be mailed relating to these shares.

No fractional shares of Brookline Bancorp, Inc. common stock will be issued to any public stockholder of Brookline Bancorp, Inc. when the conversion is completed. For each fractional share that would otherwise be issued to stockholders who hold certificates, we will pay by check an amount equal to the product obtained by multiplying the fractional share interest to which the holder would otherwise be entitled to by $10.00. Payment for fractional shares will be made as soon as practicable after the receipt by the exchange agent of surrendered Brookline Bancorp, Inc. stock certificates. If your shares are held in street name, you will automatically receive cash in lieu of fractional shares.

You should not forward your stock certificates until you have received transmittal forms, which will include forwarding instructions.

Until your existing certificates representing Brookline Bancorp, Inc. common stock are surrendered for exchange after the conversion in compliance with the terms of the transmittal form, you will not receive new shares of Brookline Bancorp, Inc. common stock and you will not be paid dividends on the new Brookline Bancorp, Inc. common stock. When you surrender your certificates, any unpaid dividends will be paid without interest. For all other purposes, however, each certificate which represents shares of Brookline Bancorp, Inc. common stock outstanding at the effective date of the conversion will be considered to evidence ownership of new shares of Brookline Bancorp, Inc. common stock into which those shares have been converted by virtue of the conversion.

All new shares of Brookline Bancorp, Inc. common stock that we issue to you in exchange for existing shares of Brookline Bancorp, Inc. common stock will be considered to have been issued in full satisfaction of all rights pertaining to such shares, subject, however, to our obligation to pay any dividends or make any other distributions with a record date prior to the effective date of the conversion which may have been declared by us on or prior to the effective date and which remain unpaid at the effective date.

If a certificate for Brookline Bancorp, Inc. common stock has been lost, stolen or destroyed, the exchange agent will issue a new stock certificate upon receipt of appropriate evidence as to the loss, theft or destruction, appropriate evidence as to the ownership of the certificate by the claimant, and appropriate and customary indemnification.

Subscription Offering and Subscription Rights

In accordance with the plan of conversion, rights to subscribe for the purchase of common stock in the subscription offering have been granted under the plan of conversion in the following descending order of priority. All subscriptions that we receive will depend on the availability of common stock after satisfaction of all subscriptions of all persons having prior rights in the subscription offering and to the maximum, minimum and overall purchase limitations set forth in the plan of conversion and as described below under "—Limitations on Common Stock Purchases."

Priority 1: Eligible Account Holders. Each Brookline Savings Bank depositor with aggregate deposit account balances, including demand deposit accounts, of $50 or more (a "Qualifying Deposit") on December 31, 2000, ("Eligible Account Holders") will receive, without payment therefor, nontransferable subscription rights to purchase up to 200,000 shares of common stock, subject to the overall purchase limitations. See "—Limitations on Common Stock Purchases." If there are not sufficient shares available to satisfy all subscriptions, shares will first be allocated so as to permit each subscribing Eligible Account Holder to purchase a number of shares sufficient to make his total allocation equal to the lesser of 100 shares or the number of shares for which he subscribed. Thereafter, unallocated shares will be allocated to each subscribing Eligible Account Holder whose subscription remains unfilled in the proportion that the amount of his aggregate Qualifying Deposit bears to the total amount of Qualifying Deposits of all subscribing Eligible Account Holders whose subscriptions remain unfilled. If an amount so allocated exceeds the amount subscribed for by any one or more Eligible Account Holders, the excess shall be reallocated among those Eligible Account Holders whose subscriptions are not fully satisfied until all available shares have been allocated.

To ensure proper allocation of stock, each Eligible Account Holder must list on his stock order form all deposit accounts in which he has an ownership interest on December 31, 2000. Failure to list an account could result in fewer shares being allocated than if all accounts had been disclosed. The subscription rights of Eligible Account Holders who are also directors or officers of Brookline Bancorp, Inc. or their associates will be subordinated to the subscription rights of other Eligible Account Holders to the extent attributable to increased deposits in the twelve months preceding December 31, 2000.

Priority 2: Tax-Qualified Plans. Our tax-qualified employee stock benefit plans will receive, without payment therefor, nontransferable subscription rights to purchase in the aggregate up to 8% of the common stock sold in the offering. However, our employee stock ownership plan will only acquire stock in the offering if necessary to complete the offering at the minimum of the offering range.

Priority 3: Supplemental Eligible Account Holders. To the extent that there are sufficient shares remaining after satisfaction of subscriptions by Eligible Account Holders, each Brookline Savings Bank depositor with a Qualifying Deposit on March 31, 2002 who is not an Eligible Account Holder ("Supplemental Eligible Account Holder") will receive, without payment therefor, nontransferable subscription rights to purchase up to 200,000 shares of common stock, subject to the overall purchase limitations. See "—Limitations on Common Stock Purchases." If there are not sufficient shares available to satisfy all subscriptions, shares will be allocated so as to permit each subscribing Supplemental Eligible Account Holder to purchase a number of shares sufficient to make his total allocation equal to the lesser of 100 shares or the number of shares for which he subscribed. Thereafter, unallocated shares will be allocated to each subscribing Supplemental Eligible Account Holder whose subscription remains unfilled in the proportion that the amount of his Qualifying Deposit

bears to the total amount of Qualifying Deposits of all subscribing Supplemental Eligible Account Holders whose subscriptions remain unfilled.

To ensure proper allocation of stock, each Supplemental Eligible Account Holder must list on his stock order form all deposit accounts in which he has an ownership interest at March 31, 2002. Failure to list an account could result in less shares being allocated than if all accounts had been disclosed.

Priority 4: Other Members. To the extent that there are shares remaining after satisfaction of subscriptions by Eligible Account Holders and Supplemental Eligible Account Holders, each member of Brookline Bancorp, MHC (depositor of Brookline Savings Bank) on the voting record date of , 2002 who is not an Eligible Account Holder or Supplemental Eligible Account Holder ("Other Members") will receive, without payment therefor, nontransferable subscription rights to purchase up to 200,000 shares of common stock, subject to the overall purchase limitations. See "—Limitations on Common Stock Purchases." If there are not sufficient shares available to satisfy all subscriptions, available shares will be allocated on a pro rata basis based on the size of the order of each Other Member.

Expiration Date for the Subscription Offering. The Subscription Offering will expire on , 2002, unless extended by us for up to 45 days or such additional periods with the approval of the Office of Thrift Supervision, if necessary. We may decide to extend the subscription offering and/or the community offering for any reason, whether or not subscriptions have been received for shares at the minimum, midpoint or maximum of the offering range. Subscription rights which have not been exercised prior to the expiration date will become void.

We will not execute orders until at least the minimum number of shares of common stock have been subscribed for or otherwise sold. If at least 21,675,000 shares have not been subscribed for or sold within 45 days after the expiration date, unless the period is extended with the consent of the Office of Thrift Supervision, all funds delivered to us pursuant to the offering will be returned promptly to the subscribers with interest and all withdrawal authorizations will be cancelled. If an extension beyond the 45 day period following the expiration date is granted, we will notify subscribers of the extension of time and of the rights of subscribers to modify or rescind their subscriptions. Extensions may not go beyond , 2004 which is two years after the special meeting of members of Brookline Bancorp, MHC to approve the conversion.

Community Offering

To the extent that shares remain available for purchase after satisfaction of all subscriptions of the Eligible Account Holders, Supplemental Eligible Account Holders and Other Members, we may offer shares pursuant to the plan of conversion to members of the general public in a community offering. Shares may be offered with the following preferences:

(1): First, to public stockholders of Brookline Bancorp, Inc. common stock as of , 2002; and
(2): Second, to natural persons residing in Middlesex, Norfolk and Suffolk Counties, Massachusetts.

Subscribers in the community offering may purchase up to 200,000 shares of common stock, subject to the overall purchase limitations. See "—Limitations on Common Stock Purchases." The minimum purchase is 25 shares. The opportunity to purchase shares of common stock in the community offering category is subject to our right, in our sole discretion, to accept or reject any such orders in whole or in part either at the time of receipt of an order or as soon as practicable following the expiration date.

If we do not have sufficient shares available to fill the orders of public stockholders of Brookline Bancorp, Inc. as of , we will allocate the remaining available stock among those persons in a manner that permits each of them, to the extent possible, to purchase the lesser of 100 shares or the number of shares subscribed for by each such person. Thereafter, unallocated shares will be allocated among public stockholders whose orders remain unsatisfied based on the size of the order of each public stockholder of Brookline Bancorp, Inc. relative to the size of the order of other public stockholders. If oversubscription occurs due to the orders of natural persons residing in Middlesex, Norfolk or Suffolk Counties, the allocation procedures described above will apply to the stock orders of such persons. If oversubscription occurs due to the orders of members of the general public, the allocation procedures described above will apply to the stock orders of such persons.

The term "resides" or "residing" or "resident" as used in this prospectus means any person who occupies a dwelling within the Massachusetts counties of Middlesex, Norfolk and Suffolk, has a present intent to remain within this community for a period of time, and manifests the genuineness of that intent by establishing an ongoing physical presence within the community, together with an indication that this presence within Brookline Savings Bank's community is something other than merely transitory in nature. We may utilize deposit or loan records or other evidence provided to us to decide whether a person is a resident. In all cases, however, the determination shall be in our sole discretion.

The community offering may begin with or during the subscription offering and is expected to terminate at the same time as the subscription offering, and must terminate no more than 45 days following the subscription offering. Brookline Bancorp, Inc. may decide to extend the community offering for any reason and is not required to give purchasers notice of any such extension. If 21,675,000 shares have not been subscribed for or sold within 45 days after the expiration date, unless this period is extended with the consent of the Office of Thrift Supervision, all funds delivered to us will be returned promptly to the purchasers with interest and all withdrawal authorizations will be cancelled. If an extension beyond the 45 day period following the expiration date is granted, we will notify purchasers of the extension of time and of the rights of purchasers to modify or rescind their orders. These extensions may not go beyond [ , 2004] , which is two years after the special meeting of members of Brookline Bancorp, MHC to approve the conversion.

We have the right to reject any order submitted in the offering by a person who we believe is making false representations or who we otherwise believe, either alone or acting in concert with others, is violating, evading, circumventing, or intends to violate, evade or circumvent the terms and conditions of the plan of conversion.

Syndicated Community Offering

If feasible, our Board of Directors may decide to offer for sale all shares of common stock not subscribed for or purchased in the subscription and community offerings in a syndicated community offering, subject to such terms, conditions and procedures as we may determine, in a manner that will achieve the widest distribution of the common stock. However, we retain the right to accept or reject in whole or in part any orders in the syndicated community offering. In the syndicated community offering, any person may purchase up to 200,000 shares of common stock, subject to the overall maximum purchase limitations. Unless the syndicated community offering begins during the community offering, the syndicated community offering will begin as soon as possible after the completion of the subscription and community offerings.

If for any reason we cannot effect a syndicated community offering of shares not sold in the subscription and community offerings, or in the event that there is an insignificant number of unsold shares remaining after the subscription and community offerings or in the syndicated community offering, we will try to make other arrangements for the sale of unsubscribed shares, if possible. The Office of Thrift Supervision must approve any such arrangements.

Plan of Distribution; Selling Agent Compensation

Offering materials have been distributed by mail to those with subscription rights at the last known address on our records as of the eligibility dates of the offering. Subscription rights expire whether or not eligible subscribers can be located.

To assist in the marketing of the common stock, we have retained Ryan Beck & Co., LLC, which is a broker/dealer registered with the National Association of Securities Dealers, Inc. Ryan, Beck & Co., LLC will assist us in the offering by:

•: acting as our financial advisor;
•: providing administrative services and stock information center management; and
•: providing securities marketing services.

For these services, Ryan, Beck & Co., LLC, will receive an advisory and management fee of $50,000 and a marketing fee equal to 1% of the dollar amount of common stock sold in the subscription and community offerings other than shares purchased by officers, directors and employees or their immediate families and any common stock purchased by our tax-qualified and non-qualified employee benefit plans, for which no fee need be paid. In the event that Ryan, Beck & Co., LLC sells common stock through a group of broker-dealers in a syndicated community offering, it will be paid a fee of 1.0% of the dollar amount of total shares sold in the syndicated community offering. The fees payable directly to the selected broker-dealers, which may include Ryan, Beck & Co., LLC, for their sales will not exceed 5% of the dollar amount of the common stock sold by them in the syndicated community offering. Ryan, Beck & Co., LLC will also be reimbursed for allocable expenses in an amount not to exceed $25,000, without the approval of Brookline Bancorp, Inc., and for attorney's fees in an amount not to exceed $75,000, and legal expenses of the offering not to exceed $3,000 without the approval of Brookline Bancorp, Inc.

We have made an advance payment to Ryan, Beck & Co., LLC in the amount of $25,000. We will indemnify Ryan, Beck & Co., LLC against liabilities and expenses, including legal fees, incurred in connection with certain claims or litigation arising out of or based upon untrue statements or omissions contained in the offering materials for the common stock, including liabilities under the Securities Act of 1933.

Some of our directors and executive officers may participate in the solicitation of offers to purchase common stock. These persons will be reimbursed for their reasonable out-of-pocket expenses incurred in connection with the solicitation. Other regular, full-time employees of Brookline Savings Bank may assist in the offering, but only in ministerial capacities, and may provide clerical work in effecting a sales transaction. No offers or sales may be made by tellers or at the teller counters. All sales activity will be conducted in a segregated or separately identifiable area of Brookline Savings Bank's main offices apart from the area accessible to the general public. Other questions of prospective purchasers will be directed to executive officers or registered representatives of Ryan, Beck & Co., LLC. Our other employees have been instructed not to solicit offers to purchase common stock or provide advice regarding the purchase of common stock. We will rely on Rule 3a4-1 under the Securities Exchange Act of 1934, and sales of common stock will be conducted within the requirements of Rule 3a4-1, so as to permit officers, directors and employees to participate in the sale of common stock. None of our officers, directors or employees will be compensated in connection with their participation in the offering.

Procedure for Purchasing Shares

Expiration Date. The offering will terminate at 10:00 a.m., Boston Time, on , 2002, unless we extend it, with the approval of the Office of Thrift Supervision, if required. This extension may be

approved by us, in our sole discretion, without further approval or additional notice to purchasers in the offering. Any extension of the offering beyond 45 days after the expiration date of the offering would require the Office of Thrift Supervision's approval, and potential purchasers would be given the right to increase, decrease or rescind their orders for common stock. If we have not sold the minimum number of shares offered in the offering by the expiration date or any extension thereof, we may terminate the offering and promptly refund all orders for common stock. If the number of shares offered is reduced below the minimum of the offering range, or increased above the adjusted maximum of the offering range, purchasers will be given an opportunity to increase, decrease or rescind their orders.

To ensure that each purchaser receives a prospectus at least 48 hours before the expiration date of the offering in accordance with Rule 15c2-8 of the Securities Exchange Act of 1934, no prospectus will be mailed any later than five days prior to this date or hand delivered any later than two days prior to this date. Execution of an order form will confirm receipt of delivery in accordance with Rule 15c2-8. Order forms will be distributed only with a prospectus. Subscription funds will be maintained in a special escrow account at Brookline Savings Bank.

We reserve the right in our sole discretion to terminate the offering at any time and for any reason, in which case we will cancel any withdrawal orders and return all funds submitted, plus interest at Brookline Savings Bank's current passbook rate from the date of receipt.

Use of Order Forms. In order to purchase shares of the common stock in the subscription offering and community offering, you must complete an order form and remit payment. Incomplete order forms or order forms that are not signed are not required to be accepted. We will not be required to accept orders submitted on photocopied or facsimiled stock order forms. All order forms must be received prior to 10:00 a.m., Boston Time on , 2002. We are not required to accept order forms that are not received by that time, are executed defectively or are received without full payment or without appropriate withdrawal instructions. We are not required to notify subscribers of incomplete or improperly executed order forms, and we have the right to waive or permit the correction of incomplete or improperly executed order forms. We do not represent, however, that we will do so and we have no affirmative duty to notify any prospective subscriber of any such defects. You may submit your order form and payment by mail using the return envelope provided, by bringing your order form to our stock information center, or by overnight delivery to the indicated address on the back of the order form. Order forms may not be delivered to Brookline Savings Bank branches. Once tendered, an order form cannot be modified or revoked without our consent. We reserve the absolute right, in our sole discretion, to reject orders received in the community offering, in whole or in part, at the time of receipt or at any time prior to completion of the offering. If you are ordering shares, you must represent that you are purchasing shares for your own account and that you have no agreement or understanding with any person for the sale or transfer of the shares. Our interpretation of the terms and conditions of the plan of conversion and of the acceptability of the order forms will be final.

By signing the order form, you will be acknowledging that the common stock is not a deposit or savings account that is federally insured or otherwise guaranteed by Brookline Savings Bank or the Federal Government, and that you received a copy of this prospectus. However, signing the order form will not result in you waiving your rights under the Securities Act of 1933 or the Securities Exchange Act of 1934.

Payment for Shares. Payment for all shares will be required to accompany all completed order forms for the purchase to be valid. Payment for shares may be made by:

(1): personal check, bank check or bank draft, made payable to Brookline Bancorp, Inc.; or
(2): authorization of withdrawal from Brookline Savings Bank deposit accounts (except checking accounts) designated on the stock order form.

Appropriate means for designating withdrawals from deposit accounts at Brookline Savings Bank are provided in the order forms. The funds designated must be available in the account(s) at the time the order form is received. A hold will be placed on these funds, making them unavailable to the depositor. Funds authorized for withdrawal will continue to earn interest within the account at the contract rate until the offering is completed, at which time the designated withdrawal will be made. Interest penalties for early withdrawal applicable to certificate accounts will not apply to withdrawals authorized for the purchase of shares of common stock; however, if a withdrawal results in a certificate account with a balance less than the applicable minimum balance requirement, the certificate will be cancelled at the time of withdrawal without penalty and the remaining balance will earn interest at the current passbook rate subsequent to the withdrawal. In the case of payments made by check or money order, these funds must be available in the account(s) and will be immediately cashed and placed in a segregated escrow account at Brookline Savings Bank and interest will be paid at the current passbook rate from the date payment is received until the offering is completed or terminated. Once we receive your executed order form, it may not be modified, amended or rescinded without our consent, unless the offering is not completed by the expiration date, in which event purchasers may be given the opportunity to increase, decrease or rescind their orders for a specified period of time.

If you are interested in using your individual retirement account funds to purchase common stock, you must do so through a self-directed individual retirement account. Brookline Savings Bank, by law, cannot maintain self-directed individual retirement accounts. Therefore, if you wish to use your funds that are currently in a Brookline Savings Bank individual retirement account, you may not designate on the order form that you wish funds to be withdrawn from the account for the purchase of common stock. The funds you wish to use for the purchase of common stock will have to be transferred to a brokerage account. There will be no early withdrawal or Internal Revenue Service interest penalties for these transfers. Depositors interested in using funds in an individual retirement account or any other retirement account to purchase common stock should contact the stock information center as soon as possible, preferably at least two weeks prior to the end of the offering period, because processing such transactions takes additional time, and whether such funds can be used may depend on limitations imposed by the institutions where such funds are currently held. We cannot guarantee that you will be able to use such funds.

Brookline Bancorp, Inc. shall have the right, in its sole discretion, to permit institutional investors to submit irrevocable orders together with the legally binding commitment for payment and to thereafter pay for the shares of common stock for which they subscribe in the community offering at any time prior to 48 hours before the completion of the reorganization. This payment may be made under wire transfer.

If our employee stock ownership plan purchases shares in the offering, it will not be required to pay for such shares until consummation of the offering, provided there is a loan commitment from an unrelated financial institution or Brookline Bancorp, Inc. to lend to the employee stock ownership plan the necessary amount to fund the purchase.

Regulations prohibit Brookline Savings Bank from lending funds or extending credit to any persons to purchase common stock in the offering.

Delivery of Stock Certificates. Certificates representing common stock issued in the offering and Brookline Savings Bank checks representing any applicable refund and/or interest paid on subscriptions made by check, money order or bank draft will be mailed to the persons entitled thereto at the certificate registration address noted on the order form, as soon as practicable following consummation of the offering and receipt of all necessary regulatory approvals. Any certificates returned as undeliverable will be held by the transfer agent until claimed by persons legally entitled thereto or otherwise disposed of in accordance with applicable law. Until certificates for the common stock are

available and delivered to purchasers, purchasers may not be able to sell the shares of stock which they ordered, even though the common stock will have begun trading.

Other Restrictions. Notwithstanding any other provision of the plan of conversion, no person is entitled to purchase any common stock to the extent the purchase would be illegal under any federal or state law or regulation, including state "blue sky" registrations, or would violate regulations or policies of the National Association of Securities Dealers, Inc., particularly those regarding free riding and withholding. We may ask for an acceptable legal opinion from any purchaser as to the legality of his or her purchase and we may refuse to honor any purchase order if an opinion is not timely furnished.

Restrictions on Transfer of Subscription Rights and Shares

Office of Thrift Supervision conversion regulations prohibit any person with subscription rights, including the Eligible Account Holders, Supplemental Eligible Account Holders and Other Members, from transferring or entering into any agreement or understanding to transfer the legal or beneficial ownership of the subscription rights issued under the plan of conversion or the shares of common stock to be issued upon their exercise. These rights may be exercised only by the person to whom they are granted and only for his or her account. Each person exercising subscription rights will be required to certify that he or she is purchasing shares solely for his or her own account and that he or she has no agreement or understanding regarding the sale or transfer of such shares. The regulations also prohibit any person from offering or making an announcement of an offer or intent to make an offer to purchase subscription rights or shares of common stock to be issued upon their exercise prior to completion of the offering.

We will pursue any and all legal and equitable remedies in the event we become aware of the transfer of subscription rights, and we will not honor orders that we believe involve the transfer of subscription rights.

Stock Information Center

If you have any questions regarding the offering, please call the stock information center toll free, at (800) - , from 9:00 a.m. to 4:00 p.m. Boston Time, Monday through Friday. The stock information center is located at 300 Fifth Avenue, Waltham, Massachusetts.

Limitations on Common Stock Purchases

The plan of conversion includes the following limitations on the number of shares of common stock which may be purchased during the conversion:

(1): No person may purchase less than 25 shares of common stock or more than 200,000 shares;
(2): Our tax-qualified employee stock benefit plans, including our employee stock ownership plan, may purchase in the aggregate up to 8% of the shares issued in the offering, including shares issued in the event of an increase in the offering range of up to 15%. The benefit plans, specifically, the employee stock ownership plan will not purchase common stock in the offering unless such purchase is necessary to complete the offering at the minimum of the offering range;
(3): Except for the employee stock ownership plan, as described above, no person or entity, together with associates or persons acting in concert with such person or entity, may purchase more than 500,000 shares in all categories of the offering combined;
(4): Current stockholders of Brookline Bancorp, Inc. are subject to an ownership limitation. As previously described, current stockholders of Brookline Bancorp, Inc. will receive new shares of Brookline Bancorp, Inc. common stock in exchange for their existing shares of Brookline

Bancorp, Inc. common stock. The number of shares that a stockholder may purchase in the offering, together with associates or persons acting in concert with such stockholder, when combined with the shares that the stockholder and his associates will receive in exchange for existing Brookline Bancorp, Inc. common stock, may not exceed 5% of the outstanding shares of common stock of Brookline Bancorp, Inc. at the completion of the conversion; and

(5): The maximum number of shares of common stock which may be purchased in all categories of the offering by officers and directors of Brookline Savings Bank and their associates, in the aggregate, when combined with new shares of common stock issued in exchange for existing shares, may not exceed 25% of the shares issued in the conversion.

Depending upon market or financial conditions, our Board of Directors, with the approval of the Office of Thrift Supervision and without further approval of members of Brookline Bancorp, MHC, may decrease or increase the purchase and ownership limitations. If a purchase limitation is increased, subscribers in the subscription offering who ordered the maximum amount will be, and some other large subscribers who through their subscriptions evidence a desire to purchase the maximum allowable number of shares, in our sole discretion, may be given the opportunity to increase their subscriptions up to the then applicable limit. The effect of this type of resolicitation will be an increase in the number of shares owned by subscribers who choose to increase their subscriptions. Our Board of Directors may, in its sole discretion, increase the maximum purchase limitations up to 9.99% of the shares issued in the conversion, provided that orders for shares exceeding 5% of the shares being issued shall not exceed, in the aggregate, 10% of the total issued.

In the event of an increase in the total number of shares offered in the offering, due to an increase in the offering range of up to 15%, shares will be allocated in the following order of priority in accordance with the plan of conversion:

(1): in the event that there is an oversubscription at the Eligible Account Holder, Supplemental Eligible Account Holder or Other Member levels, to fill unfulfilled subscriptions of these subscribers according to their respective priorities; and
(2): to fill unfulfilled subscriptions in the community offering, with preference given first to Brookline Bancorp, Inc. public stockholders as of , 2002, and then to natural persons residing in the Massachusetts Counties of Middlesex, Norfolk and Suffolk.

The term "associate" of a person means:

(1): any corporation or organization, other than Brookline Bancorp, Inc., Brookline Savings Bank or a majority-owned subsidiary of Brookline Savings Bank, of which the person is an officer, partner or 10% stockholder;
(2): any trust or other estate in which the person has a substantial beneficial interest or serves as a director or in a similar fiduciary capacity; provided, however, it does not include any employee stock benefit plan in which the person has a substantial beneficial interest or serves as director or in a similar fiduciary capacity; and
(3): any relative or spouse of the person, or any relative of the spouse, who either has the same home as the person or who is a director or officer of Brookline Bancorp, Inc. or Brookline Savings Bank.

The term "acting in concert" means:

(1): knowing participation in a joint activity or interdependent conscious parallel action towards a common goal whether or not pursuant to an express agreement; or

(2): a combination or pooling of voting or other interests in the securities of an issuer for a common purpose pursuant to any contract, understanding, relationship, agreement or other arrangement, whether written or otherwise.

A person or company which acts in concert with another person or company ("other party") shall also be deemed to be acting in concert with any person or company who is also acting in concert with that other party, except that any tax-qualified employee stock benefit plan will not be deemed to be acting in concert with its trustee or a person who serves in a similar capacity solely for the purpose of determining whether stock held by the trustee and stock held by the plan will be aggregated.

Our directors are not treated as associates of each other solely because of their membership on our Board of Directors. We have the right to determine whether prospective purchasers are associates or acting in concert. For a further discussion of limitations on purchases of our stock at the time of conversion and thereafter, see "Certain Restrictions on Purchase or Transfer of Shares after Conversion" and "Restrictions on Acquisition of Brookline Bancorp, Inc."

Liquidation Rights

In the unlikely event of a complete liquidation of Brookline Bancorp, Inc. prior to the conversion, all claims of creditors of Brookline Bancorp, Inc., including those of depositors to the extent of their deposit balances, would be paid first. Thereafter, if there were any assets of Brookline Bancorp, Inc. remaining, these assets would be distributed to stockholders, including Brookline Bancorp, MHC. In the unlikely event that Brookline Bancorp, MHC and Brookline Bancorp, Inc. liquidated prior to the conversion, all claims of creditors would be paid first. Then, if there were any assets of Brookline Bancorp, MHC remaining, members of Brookline Bancorp, MHC would receive those remaining assets, pro rata, based upon the deposit balances in their deposit account in Brookline Savings Bank immediately prior to liquidation. In the unlikely event that Brookline Savings Bank were to liquidate after the conversion, all claims of creditors, including those of depositors, would be paid first, followed by distribution of the "liquidation account" to certain depositors, with any assets remaining thereafter distributed to Brookline Bancorp, Inc. as the holder of Brookline Savings Bank capital stock. Pursuant to the rules and regulations of the Office of Thrift Supervision, a post-conversion merger, consolidation, sale of bulk assets or similar combination or transaction with another insured savings institution would not be considered a liquidation and, in these types of transactions, the liquidation account would be assumed by the surviving institution.

The plan of conversion provides for the establishment, upon the completion of the conversion, of a special "liquidation account" for the benefit of Eligible Account Holders and Supplemental Eligible Account Holders in an amount equal to the greater of:

(1): Brookline Bancorp, MHC's ownership interest in the retained earnings of Brookline Bancorp, Inc. as of the date of its latest balance sheet contained in this prospectus; or
(2): the retained earnings of Brookline Savings Bank at the time that Brookline Savings Bank reorganized into Brookline Bancorp, MHC in 1998.

The purpose of the liquidation account is to provide Eligible Account Holders and Supplemental Eligible Account Holders who maintain their deposit accounts with Brookline Savings Bank after the conversion with an interest in the unlikely event of the complete liquidation of Brookline Savings Bank after the conversion. Each Eligible Account Holder and Supplemental Eligible Account Holder that continues to maintain his or her deposit account at Brookline Savings Bank, would be entitled, on a complete liquidation of Brookline Savings Bank after the conversion, to an interest in the liquidation account prior to any payment to the stockholders of Brookline Bancorp, Inc. Each Eligible Account Holder and Supplemental Eligible Account Holder would have an initial interest in the liquidation account for each deposit account, including savings accounts, transaction accounts such as negotiable

order of withdrawal accounts, money market deposit accounts, and certificates of deposit, with a balance of $50 or more held in Brookline Savings Bank on December 31, 2000 or March 31, 2002. Each Eligible Account Holder and Supplemental Eligible Account Holder would have a pro rata interest in the total liquidation account for each such deposit account, based on the proportion that the balance of each such deposit account on December 31, 2000 or March 31, 2002 bears to the balance of all deposit accounts in Brookline Bancorp, Inc. on such dates.

If, however, on any December 31 annual closing date commencing after the effective date of the conversion, the amount in any such deposit account is less than the amount in the deposit account on December 31, 2000 or March 31, 2002 or any other annual closing date, then the interest in the liquidation account relating to such deposit account would be reduced from time to time by the proportion of any such reduction, and such interest will cease to exist if such deposit account is closed. In addition, no interest in the liquidation account would ever be increased despite any subsequent increase in the related deposit account. Payment pursuant to liquidation rights of Eligible Account Holders and Supplemental Eligible Account Holders would be separate and apart from the payment of any insured deposit accounts to such depositor. Any assets remaining after the above liquidation rights of Eligible Account Holders and Supplemental Eligible Account Holders are satisfied would be distributed to Brookline Bancorp, Inc. as the sole stockholder of Brookline Savings Bank.

Tax Aspects

Consummation of the conversion is expressly conditioned upon the prior receipt of an opinion of counsel or tax advisor with respect to federal and state income taxation that indicates that the conversion will not be a taxable transaction to Brookline Bancorp, MHC, Brookline Bancorp, Inc., Brookline Savings Bank, Eligible Account Holders, Supplemental Eligible Account Holders, and other members of Brookline Bancorp, MHC. Unlike private letter rulings, opinions of counsel or tax advisors are not binding on the IRS or any state taxing authority, and such authorities may disagree with such opinions. In the event of such disagreement, there can be no assurance that Brookline Bancorp, Inc. or Brookline Savings Bank would prevail in a judicial proceeding.

Brookline Bancorp, MHC and Brookline Bancorp, Inc. have received an opinion of counsel, Luse Lehman Gorman Pomerenk & Schick, P.C., regarding the federal income tax consequences of the conversion which includes the following:

1.: The merger of Brookline Bancorp, Inc. with and into Brookline Savings Bank qualifies as a tax-free reorganization within the meaning of Section 368(a)(1)(A) of the Code.
2.: The merger of Brookline Bancorp, MHC with and into Brookline Savings Bank qualifies as a tax-free reorganization within the meaning of Section 368(a)(1)(A) of the Code.
3.: The exchange of the members' equity interests in Brookline Bancorp, MHC for interests in a liquidation account established in Brookline Savings Bank will satisfy the continuity of interest requirement of Section 1.368-1(b) of the Federal Income Tax Regulations.
4.: Brookline Bancorp, MHC will not recognize any gain or loss on the transfer of its assets to Brookline Savings Bank in exchange for an interest in a liquidation account established in Brookline Savings Bank for the benefit of Brookline Bancorp, MHC members who remain depositors of Brookline Savings Bank.
5.: No gain or loss will be recognized by Brookline Savings Bank upon the receipt of the assets of Brookline Bancorp, MHC in exchange for the transfer to the members of Brookline Bancorp, MHC of an interest in the liquidation account in Brookline Savings Bank.

6.: Members of Brookline Bancorp, MHC will recognize no gain or loss upon the receipt of an interest in the liquidation account in Brookline Savings Bank in exchange for their interests in Brookline Bancorp, MHC.
7.: Current stockholders of Brookline Bancorp, Inc. will not recognize any gain or loss upon their exchange of Brookline Bancorp, Inc. common stock solely for new shares of Brookline Bancorp, Inc. common stock.
8.: Cash received by any current stockholder of Brookline Bancorp, Inc. in lieu of a fractional share interest in new shares of Brookline Bancorp, Inc. common stock will be treated as having been received as a distribution in full payment in exchange for a fractional share interest of new Brookline Bancorp, Inc. common stock, which such stockholder would otherwise be entitled to receive, and will qualify as capital gain or loss, assuming common stock of Brookline Bancorp, Inc. surrendered in exchange therefor was held as a capital asset by such stockholder at the effective time of the conversion.
9.: Each stockholder's aggregate basis in new shares of Brookline Bancorp, Inc. common stock received in the exchange will be the same as the aggregate basis of Brookline Bancorp, Inc. common stock surrendered in exchange therefor.
10.: Each stockholder's holding period in his or her Brookline Bancorp, Inc. common stock received in the exchange will include the period during which Brookline Bancorp, Inc. common stock surrendered was held, provided that the Brookline Bancorp, Inc. common stock surrendered is a capital asset in the hands of the stockholder on the date of the exchange.
11.: No gain or loss will be recognized by Eligible Account Holders, Supplemental Eligible Account Holders or other members upon distribution to them of subscription rights to purchase shares of Brookline Bancorp, Inc. common stock, provided that the amount to be paid for Brookline Bancorp, Inc. common stock is equal to the fair market value of Brookline Bancorp, Inc. common stock.
12.: No gain or loss will be recognized by Brookline Bancorp, Inc. on the receipt of money in exchange for Brookline Bancorp, Inc. common stock sold in the offering.

In the view of RP Financial, LC, which view is not binding on the Internal Revenue Service, the subscription rights do not have any value, based on the fact that these rights are acquired by the recipients without cost, are nontransferable and of short duration, and afford the recipients the right only to purchase the common stock at a price equal to its estimated fair market value, which will be the same price as the subscription price for the unsubscribed shares of common stock. If the subscription rights granted to Eligible Account Holders and Supplemental Eligible Account Holders are deemed to have an ascertainable value, receipt of these rights could result in taxable gain to those Eligible Account Holders and Supplemental Eligible Account Holders who exercise the subscription rights in an amount equal to the ascertainable value, and Brookline Bancorp, Inc. could recognize gain on a distribution. Eligible Account Holders and Supplemental Eligible Account Holders are encouraged to consult with their own tax advisors as to the tax consequences in the event that subscription rights are deemed to have an ascertainable value. Unlike private rulings, an opinion of RP Financial, LC is not binding on the Internal Revenue Service and the Internal Revenue Service could disagree with the conclusions reached therein.

The federal tax opinion has been filed with the Securities and Exchange Commission as an exhibit to Brookline Bancorp, Inc.'s registration statement. An opinion regarding the Massachusetts state income tax consequences consistent with the federal tax opinion has been issued by Grant Thornton, LLP, tax advisors to Brookline Bancorp, MHC and Brookline Bancorp, Inc.

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Certain Restrictions on Purchase or Transfer of Our Shares after Conversion

All shares purchased in the offering by a director or an executive officer of Brookline Savings Bank generally may not be sold for a period of one year following the conversion, except in the event of the death of the director or executive officer. Each certificate for restricted shares will bear a legend giving notice of this restriction on transfer, and instructions will be issued to the effect that any transfer within this time period of any certificate or record ownership of the shares other than as provided above is a violation of the restriction. Any shares of common stock issued at a later date as a stock dividend, stock split, or otherwise, with respect to the restricted stock will be similarly restricted. The directors and executive officers of Brookline Savings Bank also will be restricted by the insider trading rules promulgated pursuant to the Securities Exchange Act of 1934.

Purchases of shares of our common stock by any of our directors, executive officers and their associates, during the three-year period following the conversion may be made only through a broker or dealer registered with the Securities and Exchange Commission, except with the prior written approval of the Office of Thrift Supervision. This restriction does not apply, however, to negotiated transactions involving more than 1% of our outstanding common stock or to purchases of our common stock by our stock option plan or any of our tax-qualified employee stock benefit plans or nontax-qualified employee stock benefit plans, including any recognition and retention plans or restricted stock plans.

Office of Thrift Supervision regulations prohibit Brookline Bancorp, Inc. from repurchasing its common stock during the first year following conversion unless compelling business reasons exist for such repurchases. After one year, the Office of Thrift Supervision does not impose any repurchase restrictions.

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COMPARISON OF STOCKHOLDERS' RIGHTS

General. As a result of the conversion, our existing Brookline Bancorp, Inc. stockholders will become stockholders of Brookline Bancorp, Inc., a Delaware corporation. There are certain differences in stockholder rights arising from distinctions between Brookline Bancorp, Inc.'s federal stock charter and bylaws and Brookline Bancorp, Inc.'s Delaware certificate of incorporation and bylaws, and from distinctions between laws applicable to Delaware and federally chartered corporations.

This discussion is not intended to be a complete statement of the differences affecting the rights of stockholders, but rather summarizes the material differences and similarities affecting the rights of stockholders. This discussion is qualified in its entirety by reference to the certificate of incorporation and bylaws of Brookline Bancorp, Inc. and the Delaware General Corporation Law. See "Additional Information" for procedures for obtaining a copy of Brookline Bancorp, Inc.'s certificate of incorporation and bylaws.

Authorized Capital Stock. Our authorized capital stock currently consists of 75,000,000 shares of common stock, par value $0.01 per share, and 5,000,000 shares of preferred stock. After the conversion our authorized capital stock as a Delaware corporation will consist of 200,000,000 shares of common stock, $0.01 par value per share, and 50,000,000 shares of preferred stock, par value $0.01 per share. We authorized more capital stock than that which will be issued in the conversion to provide our Board of Directors with flexibility to effect, among other transactions, financings, acquisitions, stock dividends, stock splits and stock option grants. However, these additional authorized shares may also be used by our Board of Directors consistent with its fiduciary duty to deter future attempts to gain control of Brookline Bancorp, Inc. Our Board of Directors also has sole authority to determine the terms of any one or more series of preferred stock, including voting rights, conversion rates and liquidation preferences. As a result of the ability to fix voting rights for a series of preferred stock, our Board has the power, to the extent consistent with its fiduciary duty, to issue a series of preferred stock to persons friendly to management in order to attempt to block a hostile tender offer, merger or other transaction by which a third party seeks control, and thereby assist management to retain its position. We currently have no plans for the issuance of additional shares, other than the issuance of additional shares to our stock benefit plans.

Issuance of Capital Stock. Pursuant to applicable laws and regulations, Brookline Bancorp, MHC is required to own not less than a majority of the outstanding Brookline Bancorp, Inc. common stock. There will be no such restriction applicable to Brookline Bancorp, Inc. following consummation of the conversion.

Brookline Bancorp, Inc.'s Delaware certificate of incorporation does not contain restrictions on the issuance of shares of capital stock to directors, officers or controlling persons, whereas Brookline Bancorp, Inc.'s federal stock charter restricts such issuances to general public offerings, or if qualifying shares, to directors, unless the share issuance or the plan under which they would be issued has been approved by a majority of the total votes eligible to be cast at a legal stockholders' meeting. Thus, stock related compensation plans, such as stock option plans and recognition and retention plans, may be adopted by Brookline Bancorp, Inc. without stockholder approval and shares of Brookline Bancorp, Inc. capital stock may be issued directly to directors or officers without stockholder approval. The bylaws of the National Association of Securities Dealers, Inc., however, generally require corporations with securities which are quoted on the Nasdaq National Market System to obtain stockholder approval of most stock compensation plans for directors, officers and key employees of the corporation. Moreover, although generally not required, stockholder approval of stock-related compensation plans may be sought in certain instances in order to qualify such plans for favorable federal income tax and securities law treatment under current laws and regulations.

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Voting Rights. Neither Brookline Bancorp, Inc.'s federal stock charter or bylaws nor Brookline Bancorp, Inc.'s Delaware certificate of incorporation or bylaws provide for cumulative voting for the election of directors. For additional information regarding voting rights, see "—Limitations on Acquisitions of Voting Stock and Voting Rights" below.

Payment of Dividends. The ability of Brookline Bancorp, Inc. to pay dividends on its capital stock is restricted by Office of Thrift Supervision regulations and by federal income tax considerations related to savings associations such as Brookline Savings Bank. See "Regulation—Limitation on Capital Distributions." Although Brookline Bancorp, Inc. is not subject to these restrictions as a Delaware corporation, such restrictions will indirectly affect Brookline Bancorp, Inc. because dividends from Brookline Savings Bank will be a primary source of funds of Brookline Bancorp, Inc. for the payment of dividends to stockholders of Brookline Bancorp, Inc.

Certain restrictions generally imposed on Delaware corporations may also have an impact on Brookline Bancorp, Inc.'s ability to pay dividends. Delaware law generally provides that Brookline Bancorp, Inc. is limited to paying dividends in an amount equal to the excess of its net assets (total assets minus total liabilities) over its statutory capital or, if no such excess exists, equal to its net profits for the current year and/or the immediately preceding fiscal year.

Board of Directors. Brookline Bancorp, Inc.'s federal stock charter and bylaws and Brookline Bancorp, Inc.'s Delaware certificate of incorporation and bylaws each require the Board of Directors to be divided into three classes as nearly equal in number as possible and that the members of each class shall be elected for a term of three years and until their successors are elected and qualified, with one class being elected annually.

Under Brookline Bancorp, Inc.'s federal bylaws, any vacancies in the Board of Directors of Brookline Bancorp, Inc. may be filled by the affirmative vote of a majority of the remaining directors although less than a quorum of the Board of Directors. Persons elected by the directors of Brookline Bancorp, Inc. to fill vacancies may only serve until the next annual meeting of stockholders. Under Brookline Bancorp, Inc.'s Delaware certificate of incorporation, any vacancy occurring in the Board of Directors of Brookline Bancorp, Inc., including any vacancy created by reason of an increase in the number of directors, may be filled by the remaining directors, and any director so chosen shall hold office for the remainder of the term to which the director has been elected and until his or her successor is elected and qualified.

Under Brookline Bancorp, Inc.'s federal bylaws, any director may be removed for cause by the holders of a majority of the outstanding voting shares. Brookline Bancorp, Inc.'s Delaware certificate of incorporation provides that any director may be removed for cause by the holders of at least 80% of the outstanding voting shares of Brookline Bancorp, Inc.

Limitations on Liability. Federal law does not permit federally chartered companies such as Brookline Bancorp, Inc. to limit the personal liability of directors in the manner provided by the Delaware law and the laws of many other states.

Brookline Bancorp, Inc.'s Delaware certificate of incorporation provides that the directors of Brookline Bancorp, Inc. will not be personally liable for monetary damages to Brookline Bancorp, Inc. for certain actions as directors, except for liabilities that involve intentional misconduct or a knowing violation of law by the director, the authorization or illegal distributions or receipt of an improper personal benefit from their positions as directors. This provision might, in certain instances, discourage or deter shareholders or management from bringing a lawsuit against directors for a breach of their duties even though such an action, if successful, might have benefited Brookline Bancorp, Inc.

Indemnification of Directors, Officers, Employees and Agents. Brookline Bancorp, Inc.'s federal stock charter and bylaws do not contain any provision relating to indemnification of directors and officers of

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Brookline Bancorp, Inc. Under current Office of Thrift Supervision regulations, however, Brookline Bancorp, Inc. shall indemnify its directors, officers and employees for any costs incurred in connection with any litigation involving such person's activities as a director, officer or employee if such person obtains a final judgment on the merits in his or her favor. In addition, indemnification is permitted in the case of a settlement, a final judgment against such person or final judgment other than on the merits, if a majority of disinterested directors determines that such person was acting in good faith within the scope of his or her employment as he or she could reasonably have perceived it under the circumstances and for a purpose he or she could reasonably have believed under the circumstances was in the best interests of Brookline Bancorp, Inc. or its stockholders. Brookline Bancorp, Inc. also is permitted to pay ongoing expenses incurred by a director, officer or employee if a majority of disinterested directors concludes that such person may ultimately be entitled to indemnification. Before making any indemnification payment, Brookline Bancorp, Inc. is required to notify the Office of Thrift Supervision of its intention and such payment cannot be made if the Office of Thrift Supervision objects to such payment.

The officers, directors, agents and employees of Brookline Bancorp, Inc. are indemnified with respect to certain actions pursuant to Brookline Bancorp, Inc.'s Delaware certificate of incorporation, which complies with Delaware law regarding indemnification. Delaware law allows Brookline Bancorp, Inc. to indemnify the aforementioned persons for expenses, settlements, judgments and fines in suits in which such person has been made a party by reason of the fact that he or she is or was an agent of Brookline Bancorp, Inc. No such indemnification may be given if the acts or omissions of the person are adjudged to be in violation of law, if such person is liable to the corporation for an unlawful distribution, or if such person personally received a benefit to which he or she was not entitled.

Special Meetings of Stockholders. Brookline Bancorp, Inc.'s federal bylaws provide that special meetings of Brookline Bancorp, Inc.'s stockholders may be called by the chairman, the president, a majority of the Board of Directors or the holders of not less than one-tenth of the outstanding capital stock of Brookline Bancorp, Inc. entitled to vote at the meeting. Brookline Bancorp, Inc.'s Delaware certificate of incorporation provides that special meetings of the stockholders of Brookline Bancorp, Inc. may be called only by the Chairman, the President or the Board of Directors.

Stockholder Nominations and Proposals. Brookline Bancorp, Inc.'s federal bylaws generally provide that stockholders may submit nominations for election of directors at an annual meeting of stockholders and any new business to be taken up at such a meeting by filing the proposal in writing with Brookline Bancorp, Inc. at least 5 days before the date of any such meeting.

Brookline Bancorp, Inc.'s Delaware bylaws generally provide that any stockholder desiring to make a nomination for the election of directors or a proposal for new business at a meeting of stockholders must submit written notice to Brookline Bancorp, Inc. 90 days prior to the anniversary date of the mailing of proxy materials by Brookline Bancorp, Inc. in connection with the immediately preceding annual meeting of stockholders. However, if less than 100 days notice or prior disclosure of the date of the meeting is given, stockholders must submit such written notice no later than the tenth day following the date on which notice of the meeting is mailed to stockholders or such public disclosure was made. Failure to comply with these advance notice requirements will preclude such nominations or new business from being considered at the meeting. Management believes that it is in the best interests of Brookline Bancorp, Inc. and its stockholders to provide sufficient time to enable management to disclose to stockholders information about a dissident slate of nominations for directors. This advance notice requirement may also give management time to solicit its own proxies in an attempt to defeat any dissident slate of nominations, should management determine that doing so is in the best interests of stockholders generally. Similarly, adequate advance notice of stockholder proposals will give management time to study such proposals and to determine whether to recommend to the stockholders that such proposals be adopted. In certain instances, such provisions could make it more difficult to

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oppose management's nominees or proposals, even if stockholders believe such nominees or proposals are in their best interests.

Stockholder Action Without a Meeting. The federal bylaws of Brookline Bancorp, Inc. provide that any action to be taken or which may be taken at any annual or special meeting of stockholders may be taken if a consent in writing, setting forth the actions so taken, is given by the holders of all outstanding shares entitled to vote. Brookline Bancorp, Inc.'s Delaware certificate of incorporation specifically denies the authority of stockholders to act without a meeting.

Stockholder's Right to Examine Books and Records. A federal regulation, which is applicable to Brookline Bancorp, Inc., provides that stockholders may inspect and copy specified books and records of a federally chartered savings institution after proper written notice for a proper purpose. Delaware law similarly provides that a stockholder may inspect books and records upon written demand stating the purpose of the inspection, if such purpose is reasonably related to such person's interest as a stockholder.

Limitations on Acquisitions of Voting Stock and Voting Rights. Brookline Bancorp, Inc.'s Delaware certificate of incorporation provides that no record or beneficial owner, directly or indirectly, of more than 10% of the outstanding shares of common stock will be permitted to vote any shares in excess of such 10% limit.

Mergers, Consolidations and Sales of Assets. A federal regulation requires the approval of two-thirds of the Board of Directors of Brookline Bancorp, Inc. and the holders of two-thirds of the outstanding stock of Brookline Bancorp, Inc. entitled to vote thereon for mergers, consolidations and sales of all or substantially all of Brookline Bancorp, Inc.'s assets. Such regulation permits Brookline Bancorp, Inc. to merge with another corporation without obtaining the approval of its stockholders if:

(1)

it does not involve an interim savings institution;

(2)

Brookline Bancorp, Inc.'s federal stock charter is not changed;

(3)

each share of Brookline Bancorp, Inc.'s stock outstanding immediately prior to the effective date of the transaction will be an identical outstanding share or a treasury share of Brookline Bancorp, Inc. after such effective date; and

(4)

either:

(a): no shares of voting stock of Brookline Bancorp, Inc. and no securities convertible into such stock are to be issued or delivered under the plan of combination; or
(b): the authorized unissued shares or the treasury shares of voting stock of Brookline Bancorp, Inc. to be issued or delivered under the plan of combination, plus those initially issuable upon conversion of any securities to be issued or delivered under such plan, do not exceed 15% of the total shares of voting stock of Brookline Bancorp, Inc. outstanding immediately prior to the effective date of the transaction.

Brookline Bancorp, Inc.'s Delaware certificate of incorporation requires the approval of the holders of at least 80% of Brookline Bancorp, Inc.'s outstanding shares of voting stock to approve certain "Business Combinations" involving an "Interested Stockholder" except where the proposed transaction has been approved by two-thirds of the members of the Board of Directors who are unaffiliated with the Interested Stockholder and who were directors prior to the time when the Interested Stockholder became an Interested Stockholder. The term "Interested Stockholder" includes any individual, corporation, partnership or other entity, other than Brookline Bancorp, Inc. or its subsidiary, which owns beneficially or controls, directly or indirectly, 10% or more of the outstanding shares of voting stock of Brookline Bancorp, Inc. or an affiliate of such person or entity. This provision

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of the certificate of incorporation applies to any "Business Combination," which is defined to include, among other things:

(1): any merger or consolidation of Brookline Bancorp, Inc. with or into any Interested Stockholder;
(2): any sale, lease, exchange, mortgage, transfer, or other disposition of 25% or more of the assets of Brookline Bancorp, Inc. and its subsidiaries to an Interested Stockholder;
(3): the issuance or transfer of any securities of Brookline Bancorp, Inc. or a subsidiary of Brookline Bancorp, Inc. to an Interested Stockholder having a value exceeding 25% of the combined fair market value of the outstanding securities of Brookline Bancorp, Inc.;
(4): the adoption of any plan or proposal for the liquidation or dissolution of Brookline Bancorp, Inc. proposed by or on behalf of an Interested Stockholder or any Affiliate of an Interested Stockholder; or
(5): any reclassification of common stock of Brookline Bancorp, Inc. or any recapitalization involving the common stock of Brookline Bancorp, Inc.

Under Delaware law, absent this provision, business combinations, including mergers, consolidations and sales of substantially all of the assets of a corporation must, subject to certain exceptions, be approved by the vote of the holders of a majority of the outstanding shares of common stock of Brookline Bancorp, Inc. and any other affected class of stock. One exception under Delaware law to the majority approval requirement applies to stockholders owning 15% or more of the common stock of a corporation for a period of less than three years. Such 15% stockholder, in order to obtain approval of a business combination, must obtain the approval of two-thirds of the outstanding stock, excluding the stock owned by such 15% stockholder, or satisfy other requirements under Delaware law relating to board of director approval of his or her acquisition of the shares of Brookline Bancorp, Inc. The increased stockholder vote required to approve a business combination may have the effect of preventing mergers and other business combinations which a majority of stockholders deem desirable and placing the power to prevent such a merger or combination in the hands of a minority of stockholders.

Brookline Bancorp, Inc.'s Delaware certificate of incorporation requires the Brookline Bancorp, Inc.'s Board of Directors to consider certain factors in addition to the amount of consideration to be paid when evaluating certain business combinations or a tender or exchange offer. These additional factors include the social and economic effects of the transaction on its customers and employees and the communities served by Brookline Bancorp, Inc.

Dissenters' Rights of Appraisal. Office of Thrift Supervision regulations generally provide that a stockholder of a federally chartered savings institution that engages in a merger, consolidation or sale of all or substantially all of its assets shall have the right to demand from such institution payment of the fair or appraised value of his or her stock in the institution, subject to specified procedural requirements. However, if the federally chartered savings institution's stock is listed on a national securities exchange or quoted on the Nasdaq Stock Market stockholders are not entitled to dissenters' rights in connection with a merger if the stockholders are required to accept cash or shares of stock which will be listed on a national securities exchange or quoted on the Nasdaq Stock Market, or any combination thereof.

Under Delaware law, shareholders of Brookline Bancorp, Inc. generally will not have dissenters' appraisal rights in connection with a plan of merger or consolidation to which Brookline Bancorp, Inc. is a party because the common stock is expected to be listed on the Nasdaq National Market.

Amendment of Governing Instruments. No amendment of Brookline Bancorp, Inc.'s federal stock charter may be made unless it is first proposed by the Board of Directors of Brookline Bancorp, Inc.,

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then preliminarily approved by the Office of Thrift Supervision, and thereafter approved by the holders of a majority of the total votes eligible to be cast at a legal meeting. Brookline Bancorp, Inc.'s Delaware certificate of incorporation may be amended by the vote of the holders of a majority of the outstanding shares of Brookline Bancorp, Inc. common stock, except that the provisions of the certificate of incorporation governing the calling of meetings of stockholders, stockholder nominations and proposals, authorized capital stock, denial of preemptive rights, the number and staggered terms of directors, removal of directors, approval of certain business combinations, the evaluation of certain business combinations, elimination of directors' liability, indemnification of officers and directors, and the manner of amending the certificate of incorporation and bylaws, may not be repealed, altered, amended or rescinded except by the vote of the holders of at least 80% of the outstanding shares of Brookline Bancorp, Inc.

The federal bylaws of Brookline Bancorp, Inc. may be amended by a majority vote of the full Board of Directors of Brookline Bancorp, Inc. or by a majority vote of the votes cast by the stockholders of Brookline Bancorp, Inc. at any legal meeting. Brookline Bancorp, Inc.'s Delaware bylaws may only be amended by a majority vote of the Board of Directors of Brookline Bancorp, Inc. or by the holders of at least 80% of the outstanding stock of Brookline Bancorp, Inc.

Purpose and Anti-Takeover Effects of Brookline Bancorp, Inc.'s Delaware Certificate of Incorporation and Bylaws. Our Board of Directors believes that the provisions described above are prudent and will reduce our vulnerability to takeover attempts and certain other transactions that have not been negotiated with and approved by our Board of Directors. These provisions will also assist us in the orderly deployment of the conversion proceeds into productive assets during the initial period after the conversion. Our Board of Directors believes these provisions are in the best interests of Brookline Bancorp, Inc. and its stockholders. Our Board of Directors believes that it will be in the best position to determine the true value of Brookline Bancorp, Inc. and to negotiate more effectively for what may be in the best interests of its stockholders. Accordingly, our Board of Directors believes that it is in the best interests of Brookline Bancorp, Inc. and its stockholders to encourage potential acquirers to negotiate directly with the Board of Directors of Brookline Bancorp, Inc. and that these provisions will encourage such negotiations and discourage hostile takeover attempts. It is also the view of our Board of Directors that these provisions should not discourage persons from proposing a merger or other transaction at a price reflective of the true value of Brookline Bancorp, Inc. and that is in the best interests of all stockholders.

Takeover attempts that have not been negotiated with and approved by our Board of Directors present the risk of a takeover on terms that may be less favorable than might otherwise be available. A transaction that is negotiated and approved by our Board of Directors, on the other hand, can be carefully planned and undertaken at an opportune time in order to obtain maximum value of Brookline Bancorp, Inc. for our stockholders, with due consideration given to matters such as the management and business of the acquiring corporation and maximum strategic development of Brookline Bancorp, Inc.'s assets.

Although a tender offer or other takeover attempt may be made at a price substantially above the current market price, such offers are sometimes made for less than all of the outstanding shares of a target company. As a result, stockholders may be presented with the alternative of partially liquidating their investment at a time that may be disadvantageous, or retaining their investment in an enterprise that is under different management and whose objectives may not be similar to those of the remaining stockholders.

Despite our belief as to the benefits to stockholders of these provisions of Brookline Bancorp, Inc.'s Delaware certificate of incorporation and bylaws, these provisions may also have the effect of discouraging a future takeover attempt that would not be approved by our Board, but pursuant to which stockholders may receive a substantial premium for their shares over then current

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market prices. As a result, stockholders who might desire to participate in such a transaction may not have any opportunity to do so. Such provisions will also make it more difficult to remove our Board of Directors and management. Our Board of Directors, however, has concluded that the potential benefits outweigh the possible disadvantages.

Following the conversion, pursuant to applicable law and, if required, following the approval by stockholders, we may adopt additional anti-takeover charter provisions or other devices regarding the acquisition of our equity securities that would be permitted for a Delaware business corporation.

The cumulative effect of the restriction on acquisition of Brookline Bancorp, Inc. contained in the Delaware certificate of incorporation and bylaws of Brookline Bancorp, Inc. and in Delaware law may be to discourage potential takeover attempts and perpetuate incumbent management, even though certain stockholders of Brookline Bancorp, Inc. may deem a potential acquisition to be in their best interests, or deem existing management not to be acting in their best interests.

RESTRICTIONS ON ACQUISITION OF BROOKLINE BANCORP, INC.

The following discussion is a summary of certain provisions of federal law and regulations and corporate law relating to stock ownership and transfers, the Board of Directors and business combinations, all of which may be deemed to have "anti-takeover" effects. The description of these provisions is necessarily general and reference should be made to the actual law and regulations.

Conversion Regulations

Office of Thrift Supervision regulations prohibit any person from making an offer, announcing an intent to make an offer or participating in any other arrangement to purchase stock or acquiring stock or subscription rights in a converting institution or its holding company from another person prior to completion of its conversion. Further, without the prior written approval of the Office of Thrift Supervision, no person may make such an offer or announcement of an offer to purchase shares or actually acquire shares in the converting institution or its holding company for a period of three years from the date of the completion of the conversion if, upon the completion of such offer, announcement or acquisition, that person would become the beneficial owner of more than 10% of the outstanding stock of the institution or its holding company. The Office of Thrift Supervision has defined "person" to include any individual, group acting in concert, corporation, partnership, association, joint stock company, trust, unincorporated organization or similar company, a syndicate or any other group formed for the purpose of acquiring, holding or disposing of securities of an insured institution. However, offers made exclusively to an association or its holding company, or an underwriter or member of a selling group acting on the converting institution's or its holding company's behalf for resale to the general public are excepted. The regulation also provides civil penalties for willful violation or assistance in any such violation of the regulation by any person connected with the management of the converting institution or its holding company or who controls more than 9.9% of the outstanding shares or voting rights of a converted institution or its holding company.

Change of Control Regulations

Under the Change in Bank Control Act, no person may acquire control of an insured federal savings association or its parent holding company unless the Office of Thrift Supervision has been given 60 days' prior written notice and has not issued a notice disapproving the proposed acquisition. In addition, Office of Thrift Supervision regulations provide that no company may acquire control of a savings association without the prior approval of the Office of Thrift Supervision. Any company that acquires such control becomes a "savings and loan holding company" subject to registration, examination and regulation by the Office of Thrift Supervision.

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Control, as defined under federal law, means ownership, control of or holding irrevocable proxies representing more than 9.9% of any class of voting stock, control in any manner of the election of a majority of the savings association's directors, or a determination by the Office of Thrift Supervision that the acquiror has the power to direct, or directly or indirectly to exercise a controlling influence over, the management or policies of the institution. Acquisition of more than 9.9% of any class of a savings association's voting stock, if the acquiror is also subject to any one of eight "control factors," constitutes a rebuttable determination of control under the regulations. Such control factors include the acquiror being one of the two largest stockholders. The determination of control may be rebutted by submission to the Office of Thrift Supervision, prior to the acquisition of stock or the occurrence of any other circumstances giving rise to such determination, of a statement setting forth facts and circumstances which would support a finding that no control relationship will exist and containing certain undertakings. The regulations provide that persons or companies which acquire beneficial ownership exceeding 9.9% or more of any class of a savings association's stock must file with the Office of Thrift Supervision a certification form that the holder is not in control of such institution, is not subject to a rebuttable determination of control and will take no action which would result in a determination or rebuttable determination of control without prior notice to or approval of the Office of Thrift Supervision, as applicable. There are also rebuttable presumptions in the regulations concerning whether a group "acting in concert" exists, including presumed action in concert among members of an "immediate family."

The Office of Thrift Supervision may prohibit an acquisition of control if it finds, among other things, that:

(1): the acquisition would result in a monopoly or substantially lessen competition;
(2): the financial condition of the acquiring person might jeopardize the financial stability of the institution; or
(3): the competence, experience or integrity of the acquiring person indicates that it would not be in the interest of the depositors or the public to permit the acquisition of control by such person.

DESCRIPTION OF CAPITAL STOCK OF BROOKLINE BANCORP, INC. FOLLOWING THE CONVERSION

General

At the effective date, Brookline Bancorp, Inc. will be authorized to issue 200,000,000 shares of common stock having a par value of $0.1 per share and 50,000,000 shares of preferred stock. Brookline Bancorp, Inc. currently expects to issue in the offering up to 29,325,000 shares of common stock, subject to adjustment, and up to 21,579,057 shares, subject to adjustment, in exchange for the publicly held shares of Brookline Bancorp, Inc. Brookline Bancorp, Inc. will not issue shares of preferred stock in the conversion. Each share of Brookline Bancorp, Inc. common stock will have the same relative rights as, and will be identical in all respects with, each other share of common stock. Upon payment of the subscription price for the common stock, in accordance with the plan of conversion, all of the common stock will be duly authorized, fully paid and nonassessable.

The common stock of Brookline Bancorp, Inc. will represent nonwithdrawable capital, will not be an account of an insurable type, and will not be insured by the Federal Deposit Insurance Corporation or any other government agency.

Common Stock

Dividends. Brookline Bancorp, Inc. may pay dividends out of statutory surplus or from net earnings if, as and when declared by its Board of Directors. The payment of dividends by Brookline

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Bancorp, Inc. is subject to limitations that are imposed by law and applicable regulation. The holders of common stock of Brookline Bancorp, Inc. will be entitled to receive and share equally in dividends as may be declared by the Board of Directors of Brookline Bancorp, Inc. out of funds legally available therefor. If Brookline Bancorp, Inc. issues preferred stock, the holders thereof may have a priority over the holders of the common stock with respect to dividends.

Voting Rights. When the conversion is completed, the holders of common stock of Brookline Bancorp, Inc. will have exclusive voting rights in Brookline Bancorp, Inc. They will elect Brookline Bancorp, Inc.'s Board of Directors and act on other matters as are required to be presented to them under Delaware law or as are otherwise presented to them by the Board of Directors. Generally, each holder of common stock will be entitled to one vote per share and will not have any right to cumulate votes in the election of directors. If Brookline Bancorp, Inc. issues preferred stock, holders of the preferred stock may also possess voting rights. Certain matters require an 80% stockholder vote.

As a federal stock savings association, corporate powers and control of Brookline Savings Bank are vested in its Board of Directors, who elect the officers of Brookline Savings Bank and who fill any vacancies on the Board of Directors. Voting rights of Brookline Savings Bank are vested exclusively in the owners of the shares of capital stock of Brookline Savings Bank, which will be Brookline Bancorp, Inc., and voted at the direction of Brookline Bancorp, Inc.'s Board of Directors. Consequently, the holders of the common stock of Brookline Bancorp, Inc. will not have direct control of Brookline Savings Bank.

Liquidation. In the event of any liquidation, dissolution or winding up of Brookline Savings Bank, Brookline Bancorp, Inc., as the holder of 100% of Brookline Savings Bank's capital stock, would be entitled to receive, after payment or provision for payment of all debts and liabilities of Brookline Savings Bank, including all deposit accounts and accrued interest thereon, and after distribution of the balance in the special liquidation account to Eligible Account Holders and Supplemental Eligible Account Holders, all assets of Brookline Savings Bank available for distribution. In the event of liquidation, dissolution or winding up of Brookline Bancorp, Inc., the holders of its common stock would be entitled to receive, after payment or provision for payment of all its debts and liabilities, all of the assets of Brookline Bancorp, Inc. available for distribution. If preferred stock is issued, the holders thereof may have a priority over the holders of the common stock in the event of liquidation or dissolution.

Preemptive Rights. Holders of the common stock of Brookline Bancorp, Inc. will not be entitled to preemptive rights with respect to any shares that may be issued. The common stock is not subject to redemption.

Preferred Stock

None of the shares of Brookline Bancorp, Inc.'s authorized preferred stock will be issued in the conversion. Preferred stock may be issued with preferences and designations as our Board of Directors may from time to time determine. Our Board of Directors may, without stockholder approval, issue preferred stock with voting, dividend, liquidation and conversion rights that could dilute the voting strength of the holders of the common stock and may assist management in impeding an unfriendly takeover or attempted change in control.

TRANSFER AGENT

The transfer agent and registrar for Brookline Bancorp, Inc. common stock is American Stock Transfer & Trust Company, New York, New York.

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EXPERTS

The consolidated financial statements as of December 31, 2001 and 2000, and for each of the three years in the period ended December 31, 2001, included in this prospectus and registration statement have been audited by Grant Thornton LLP, independent auditors, as stated in their report appearing herein, and has been so included in reliance upon the report of such firm given their authority as experts in accounting and auditing.

RP Financial, LC has consented to the publication herein of the summary of its report to Brookline Bancorp, Inc. setting forth its opinion as to the estimated pro forma market value of the common stock upon completion of the stock offering and its letter with respect to subscription rights.

LEGAL MATTERS

The legality of the common stock has been opined upon for Brookline Bancorp, Inc. by Luse Lehman Gorman Pomerenk & Schick, P.C., Washington, D.C., special counsel to Brookline Bancorp, Inc. Certain legal matters will be passed upon for Ryan, Beck & Co., LLC by Foley, Hoag & Eliot LLP, Boston, Massachusetts.

ADDITIONAL INFORMATION

Brookline Bancorp, Inc. has filed with the Securities and Exchange Commission a registration statement under the Securities Act of 1933 with respect to the common stock offered hereby. As permitted by the rules and regulations of the Securities and Exchange Commission, this prospectus does not contain all the information set forth in the registration statement. Such information, including the appraisal report which is an exhibit to the registration statement, can be examined without charge at the public reference facilities of the Securities and Exchange Commission located at 450 Fifth Street, N.W., Washington, D.C. 20549, and copies of such material can be obtained from the SEC at prescribed rates. The Securities and Exchange Commission telephone number is 1-800-SEC-0330. In addition, the SEC maintains a web site (http://www.sec.gov) that contains reports, proxy and information statements and other information regarding registrants that file electronically with the SEC, including Brookline Bancorp, Inc. The statements contained in this prospectus as to the contents of any contract or other document filed as an exhibit to the Registration Statement are, of necessity, brief descriptions of the material terms of, and should be read in conjunction with, such contract or document.

Brookline Bancorp, MHC has filed an Application on Form AC with respect to the conversion. This prospectus omits certain information contained in the Application. The Application may be examined at the principal office of the Office of Thrift Supervision, 1700 G Street, N.W., Washington, D.C. 20552, and at the Northeast Regional Office of the Office of Thrift Supervision, 10 Exchange Place, 18 ^th Floor, Jersey City, New Jersey 07302.

In connection with the stock offering, Brookline Bancorp, Inc. will register its common stock with the SEC under Section 12 of the Securities Exchange Act of 1934 and, upon such registration, Brookline Bancorp, Inc. and the holders of its stock will become subject to the proxy solicitation rules, reporting requirements and restrictions on stock purchases and sales by directors, officers and greater than 10% stockholders, the annual and periodic reporting and certain other requirements of the Securities Exchange Act of 1934. Under the stock issuance plan, Brookline Bancorp, Inc. has undertaken that it will not terminate such registration for a period of at least three years following the stock offering.

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BROOKLINE BANCORP, INC. AND SUBSIDIARIES

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

		Page
Report of Independent Certified Public Accountants		F-2
Consolidated Balance Sheets as of December 31, 2001 and 2000		F-3
Consolidated Statements of Income for the years ended December 31, 2001, 2000 and 1999		28
Consolidated Statements of Comprehensive Income for the years ended December 31, 2001, 2000 and 1999		F-4
Consolidated Statements of Changes in Stockholders' Equity for the years ended December 31, 2001, 2000 and 1999		F-5
Consolidated Statements of Cash Flows for the years ended December 31, 2001, 2000 and 1999		F-7
Notes to Consolidated Financial Statements		F-9 to F-39

All schedules are omitted because they are not required or applicable, or the required information is shown in the consolidated financial statements or notes thereto.

F-1

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

The Board of Directors
Brookline Bancorp, Inc.:

We have audited the accompanying consolidated balance sheets of Brookline Bancorp, Inc. and subsidiaries (the Company) as of December 31, 2001 and 2000, and the related consolidated statements of income, comprehensive income, changes in stockholders' equity and cash flows for each of the three years in the period ended December 31, 2001. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Brookline Bancorp, Inc. and subsidiaries as of December 31, 2001 and 2000, and the consolidated results of their operations and their consolidated cash flows for each of the three years in the period ended December 31, 2001, in conformity with accounting principles generally accepted in the United States of America.

/s/ Grant Thorton LLP

Boston, Massachusetts
January 24, 2002 (except for the
last paragraph of note 4 which is as
of March 1, 2002)

F-2

BROOKLINE BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In Thousands, Except Share Data)

			December 31,
			2001			2000
ASSETS
Cash and due from banks			$	13,283		$	13,505
Short-term investments				69,432			66,870
Securities available for sale				163,425			149,361
Securities held to maturity (market value of $9,766 and $50,337, respectively)				9,558			50,447
Restricted equity securities				9,281			7,145
Loans, excluding money market loan participations				828,360			716,559
Money market loan participations				6,000			28,250
Allowance for loan losses				(15,301	)		(14,315	)

		Net loans		819,059			730,494

Other investment				3,686			3,360
Accrued interest receivable				5,041			6,521
Bank premises and equipment, net				1,907			3,768
Deferred tax asset				4,581			3,999
Other assets				343			680

		Total assets	$	1,099,596		$	1,036,150

LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits			$	620,920		$	608,621
Borrowed funds				178,130			133,400
Mortgagors' escrow accounts				4,367			3,762
Income taxes payable				3,079			169
Accrued expenses and other liabilities				7,655			7,613

		Total liabilities		814,151			753,565

Commitments and contingencies
Stockholders' equity:
	Preferred stock, $0.01 par value; 5,000,000 shares authorized, none issued			—			—
	Common stock, $0.01 par value; 45,000,000 shares authorized, 29,688,927 shares and 29,641,500 shares issued, respectively			297			296
	Additional paid-in capital			141,021			140,327
	Retained earnings, partially restricted			177,167			165,210
	Accumulated other comprehensive income			6,720			6,244
	Treasury stock, at cost—2,921,378 shares and 2,185,928 shares, respectively			(33,813	)		(22,987	)
	Unearned compensation—recognition and retention plan			(903	)		(1,070	)
	Unallocated common stock held by ESOP—422,992 shares and 455,771 shares, respectively			(5,044	)		(5,435	)

		Total stockholders' equity		285,445			282,585

		Total liabilities and stockholders' equity	$	1,099,596		$	1,036,150

See accompanying notes to the consolidated financial statements.

F-3

BROOKLINE BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In Thousands)

			Year Ended December 31,
			2001		2000			1999
Net income			$	19,334	$	21,634		$	20,791

Other comprehensive income, net of taxes:
	Unrealized holding gains (losses)			4,215		5,904			(3,533	)
	Income tax expense (benefit)			1,542		2,205			(1,422	)

		Net unrealized holding gains (losses)		2,673		3,699			(2,111	)

Less reclassification adjustment for gains included in net income:
	Realized gains			3,540		8,253			7,437
	Income tax expense			1,343		3,039			2,891

		Net reclassification adjustment		2,197		5,214			4,546

		Total other comprehensive income (loss)		476		(1,515	)		(6,657	)

Comprehensive income			$	19,810	$	20,119		$	14,134

See accompanying notes to the consolidated financial statements.

F-4

BROOKLINE BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
Years Ended December 31, 2001, 2000 and 1999
(Dollars in Thousands)

	Common Stock		Additional Paid-in Capital			Retained Earnings			Accumulated Other Comprehensive Income			Treasury Stock			Unearned Compensation— Recognition and Retention Plan			Unallocated Common Stock Held by ESOP			Total Stockholders' Equity
Balance at December 31, 1998	$	291	$	134,490		$	135,282		$	14,416		$	(1,316	)	$	—		$	(4,941	)	$	278,222
Net income		—		—			20,791			—			—			—			—			20,791
Unrealized loss on securities available for sale, net of reclassification adjustment		—		—			—			(6,657	)		—			—			—			(6,657	)
Common stock dividends of $0.21 per share		—		—			(5,975	)		—			—			—			—			(5,975	)
Treasury stock purchases (1,378,200 shares)		—		—			—			—			(15,018	)		—			—			(15,018	)
Common stock issued in conjunction with the recognition and retention plan (546,500 shares)		5		5,904			—			—			—			(5,909	)		—			—
Compensation under recognition and retention plan		—		—			—			—			—			3,593			—			3,593
Common stock acquired by ESOP (55,000 shares)		—		—			—			—			—			—			(549	)		(549	)
Common stock held by ESOP committed to be released (34,239 shares)		—		(39	)		—			—			—			—			432			393

Balance at December 31, 1999		296		140,355			150,098			7,759			(16,334	)		(2,316	)		(5,058	)		274,800
Net income		—		—			21,634			—			—			—			—			21,634
Unrealized loss on securities available for sale, net of reclassification adjustment		—		—			—			(1,515	)		—			—			—			(1,515	)
Common stock dividends of $0.24 per share		—		—			(6,522	)		—			—			—			—			(6,522	)
Treasury stock purchases (694,228 shares)		—		—			—			—			(6,653	)		—			—			(6,653	)
Compensation under recognition and retention plan		—		—			—			—			—			1,246			—			1,246
Common stock acquired by ESOP (84,386 shares)		—		—			—			—			—			—			(802	)		(802	)
Common stock held by ESOP committed to be released (35,833 shares)		—		(28	)		—			—			—			—			425			397

Balance at December 31, 2000	$	296	$	140,327		$	165,210		$	6,244		$	(22,987	)	$	(1,070	)	$	(5,435	)	$	282,585
(Continued)

See accompanying notes to the consolidated financial statements.

F-5

BROOKLINE BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (Continued)
Years Ended December 31, 2001, 2000 and 1999
(Dollars in Thousands)

	Common Stock		Additional Paid-in Capital		Retained Earnings			Accumulated Other Comprehensive Income		Treasury Stock			Unearned Compensation— Recognition and Retention Plan			Unallocated Common Stock Held by ESOP			Total Stockholders' Equity
Balance at December 31, 2000	$	296	$	140,327	$	165,210		$	6,244	$	(22,987	)	$	(1,070	)	$	(5,435	)	$	282,585
Net income		—		—		19,334			—		—			—			—			19,334
Unrealized gain on securities available for sale, net of reclassification adjustment		—		—		—			476		—			—			—			476
Common stock dividends of $0.46 per share		—		—		(7,377	)		—		—			—			—			(7,377	)
Exercise of stock options (55,495 shares)		1		611		—			—		—			—			—			612
Treasury stock purchases (735,450 shares)		—		—		—			—		(10,826	)		—			—			(10,826	)
Compensation under recognition and retention plan		—		—		—			—		—			167			—			167
Common stock held by ESOP committed to be released (32,779 shares)		—		83		—			—		—			—			391			474

Balance at December 31, 2001	$	297	$	141,021	$	177,167		$	6,720	$	(33,813	)	$	(903	)	$	(5,044	)	$	285,445

See accompanying notes to the consolidated financial statements.

F-6

BROOKLINE BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In Thousands)

					Year Ended December 31,
					2001			2000			1999
Cash flows from operating activities:
	Net income				$	19,334		$	21,634		$	20,791
	Adjustments to reconcile net income to net cash provided by operating activities:
		Provision for loan losses				974			427			450
		Reduction in valuation allowance for other real estate owned				—			(86	)		(100	)
		Depreciation and amortization				1,045			855			544
		Write-off of premises and equipment included in restructuring charge				1,549			—			—
		Amortization, net of accretion, of securities premiums and discounts				274			845			1,632
		Accretion of deferred loan origination fees and unearned discounts				(215	)		(485	)		(522	)
		Net gains from sales of securities				(4,035	)		(8,253	)		(7,465	)
		Valuation write-down of securities				495			—			28
		Net gains from sales of other real estate owned				—			(11	)		(465	)
		Equity interest in earnings of other investment				(395	)		(350	)		(21	)
		Compensation under recognition and retention plan				167			1,246			3,593
		Swap contract market valuation charge				241			—			—
		Deferred income taxes				(781	)		61			(1,019	)
		Release of ESOP shares				474			397			393
		(Increase) decrease in:
			Accrued interest receivable			1,480			(710	)		646
			Other assets			337			(355	)		(53	)
		Increase (decrease) in:
			Income taxes payable			2,922			(729	)		(4,884	)
			Accrued expenses and other liabilities			(199	)		537			1,187

				Net cash provided from operating activities		23,667			15,023			14,735

Cash flows from investing activities:
	Proceeds from sales of securities available for sale					6,436			11,957			8,234
	Proceeds from redemptions and maturities of securities available for sale					42,338			47,131			48,211
	Proceeds from redemptions and maturities of securities held to maturity					40,725			52,161			47,941
	Purchase of securities available for sale					(58,733	)		(74,289	)		(55,031	)
	Purchase of securities held to maturity					—			—			(31,310	)
	Purchase of Federal Home Loan Bank of Boston stock					(2,136	)		(866	)		(1,074	)
	Purchase of other restricted equity securities					—			—			(31	)
	Net increase in loans					(135,038	)		(93,482	)		(90,896	)
	Distribution from (funding of) other investment					69			12			(3,001	)
	Proceeds from sales of participations in loans					23,464			12,978			4,750
	Purchase of bank premises and equipment					(733	)		(3,067	)		(861	)
	Capital expenditures on other real estate owned					—			—			(30	)
	Proceeds from sales of other real estate owned					—			783			1,794

				Net cash used for investing activities		(83,608	)		(46,682	)		(71,304	)

(Continued)

F-7

BROOKLINE BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)

(In Thousands)

				Year Ended December 31,
				2001			2000			1999
Cash flows from financing activities:
	Increase in demand deposits and NOW, savings and money market savings accounts			$	67,316		$	28,847		$	29,061
	Increase (decrease) in certificates of deposit				(55,017	)		67,638			(6,295	)
	Proceeds from Federal Home Loan Bank of Boston advances				63,200			38,900			41,361
	Repayment of Federal Home Loan Bank of Boston advances				(18,470	)		(14,300	)		(26,911	)
	Increase in mortgagors' escrow accounts				605			138			316
	Exercise of stock options				600			—			—
	Purchase of common stock for ESOP				—			(802	)		(549	)
	Purchase of treasury stock				(10,826	)		(6,653	)		(15,018	)
	Payment of common stock dividends				(7,377	)		(6,522	)		(5,975	)

			Net cash provided from financing activities		40,031			107,246			15,990

Net increase (decrease) in cash and cash equivalents					(19,910	)		75,587			(40,579	)
Cash and cash equivalents at beginning of year					108,625			33,038			73,617

Cash and cash equivalents at end of year				$	88,715		$	108,625		$	33,038

Supplemental disclosures of cash flow information:
	Cash paid during the year for:
		Interest on deposits and borrowed funds		$	32,798		$	30,400		$	27,115
		Income taxes			9,130			12,651			17,250

See accompanying notes to the consolidated financial statements.

F-8

BROOKLINE BANCORP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2001, 2000 and 1999

(1) Summary of Significant Accounting Policies and Related Matters (Dollars in Thousands)

Brookline Bancorp. Inc. (the "Company") is a federally chartered bank holding company and the parent of Brookline Savings Bank ("Brookline" or the "Bank"), a federally chartered stock savings institution. In 2000, the Company commenced operations of Lighthouse Bank ("Lighthouse"), an internet-only bank. Lighthouse was merged into Brookline on July 17, 2001. See notes 2 and 18 for more information about the Company's structure and Lighthouse.

Brookline operates five full service banking offices in Brookline and one in Newton, Massachusetts. The primary activities of Brookline include acceptance of deposits from the general public, origination of mortgage loans on residential and commercial real estate located principally in Massachusetts, and investment in debt and equity securities. The Company is subject to competition from other financial and non-financial institutions and is supervised, examined and regulated by the Office of Thrift Supervision ("OTS"). Brookline's deposits are insured by the Federal Deposit Insurance Corporation ("FDIC").

Principles of Consolidation and Basis of Financial Statement Presentation

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Brookline, Lighthouse and Brookline Securities Corp. ("BSC"). Brookline includes its wholly-owned subsidiaries, 160 Associates, Inc. ("Associates") and BBS Investment Corporation ("BBS"). BSC and BBS are engaged in buying, selling and holding investment securities. Associates is engaged in marketing services at immaterial levels of activity and owns 99.9% of Brookline Preferred Capital Corporation ("BPCC"). BPCC is a real estate investment trust that owns and manages real estate mortgage loans originated by Brookline. All significant intercompany transactions and balances are eliminated in consolidation. Certain amounts previously reported have been reclassified to conform to the current year's presentation.

The consolidated financial statements have been prepared in conformity with generally accepted accounting principles. In preparing the consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets, liabilities, income and expenses. Actual results could differ from those estimates. Material estimates that are particularly susceptible to significant change in the near-term relate to the determination of the allowance for loan losses.

Cash Equivalents

For purposes of reporting cash flows, cash equivalents include highly liquid assets with an original maturity of three months or less. Highly liquid assets include cash and due from banks, short-term investments and money market loan participations.

Securities

Marketable equity securities and debt securities are classified as either trading account securities, held to maturity securities (applicable only to debt securities) or available for sale securities. Management determines the classification of securities at the time of purchase.

Trading account securities are carried at estimated fair value with unrealized gains and losses included in earnings. None of the securities purchased by the Company have been classified as trading account securities.

F-9

Debt securities for which the Company has the positive intent and ability to hold to maturity are classified as held to maturity and carried at amortized cost. Those securities held for indefinite periods of time and not intended to be held to maturity are classified as available for sale. Securities held for indefinite periods of time include securities that management intends to use as part of its asset/liability management strategy and that may be sold in response to changes in interest rates or other business factors. Securities available for sale are carried at estimated fair value. Unrealized gains (losses), net of related income taxes, are included in the "accumulated other comprehensive income" component of stockholders' equity. Restricted equity securities are carried at cost.

Premiums and discounts on debt securities are amortized to expense and accreted to income over the estimated life of the respective security using a method which approximates the interest method. Security transactions are recorded on the trade date. Realized gains and losses are determined using the specific identification method. Security valuations are reviewed and evaluated periodically by management. If the decline in the value of any security is deemed to be other than temporary, the security is written down to a new cost basis and the resulting loss is charged to income.

Loans

Loans are reported at the principal amount outstanding, reduced by net deferred loan origination fees, unearned discounts and unadvanced funds due mortgagors on uncompleted loans.

Loan origination fees and direct loan origination costs are deferred, and the net fee or cost is recognized in interest income using the interest method. Deferred amounts are recognized for fixed rate loans over the contractual life of the loans and for adjustable rate loans over the period of time required to adjust the contractual interest rate to a yield approximating a market rate at origination date.

Accrual of interest on loans is discontinued either when reasonable doubt exists as to the full timely collection of interest and principal or when a loan becomes past due 90 days. All interest previously accrued and not collected is reversed against interest income. Interest payments received on non-accrual and impaired loans are recognized as income unless further collections are doubtful, in which case the payments are applied as a reduction of principal. Loans are generally returned to accrual status when principal and interest payments are current, full collectibility of principal and interest is reasonably assured and a consistent record of performance has been achieved.

A loan is considered impaired when, based on current information and events, it is probable that a creditor will be unable to collect principal or interest due according to the contractual terms of the loan. Impaired loans are measured and reported based on one of three methods: the present value of expected future cash flows discounted at the loan's effective interest rate, the loan's observable market price or the fair value of the collateral if the loan is collateral dependent. If the measure is less than an impaired loan's recorded investment, an impairment loss is recognized as part of the allowance for loan losses.

F-10

Allowance for Loan Losses

The allowance for loan losses is based on a periodic analysis of the loan portfolio by management of the amount deemed necessary to adequately provide for losses in the loan portfolio. Factors considered in making the evaluation include growth of the loan portfolio, the risk characteristics of the types of loans in the portfolio, geographic and large borrower concentrations, current regional economic and real estate market conditions that could affect the ability of borrowers to pay, the value of underlying collateral, and trends in loan delinquencies and charge-offs. Provisions for losses are charged to income. Loans are charged off against the allowance when the collectibility of principal is unlikely. Recoveries of loans previously charged off are credited to the allowance.

Other Investment

On September 30, 1999, the Company acquired a 30.5% ownership interest in Eastern Funding, LLC ("Eastern"), a Delaware chartered limited liability corporation formed on July 7, 1997. Eastern is based in New York, New York and specializes primarily in the financing of coin operated laundry and dry cleaning equipment in the greater metropolitan New York area and selected other locations in the Northeast. The Company accounts for this investment under the equity method of accounting and includes its share of Eastern's operating results in other income.

Bank Premises and Equipment

Bank premises and equipment are carried at cost less accumulated depreciation and amortization, except for land which is carried at cost. Bank premises and equipment are depreciated using the straight-line method over the estimated useful life of the assets. Leasehold improvements are amortized using the straight-line method over the shorter of the lease term or the estimated useful life of the improvements.

Other Real Estate Owned

Other real estate owned is comprised of properties acquired through foreclosure or acceptance of a deed in lieu of foreclosure. Such properties are recorded initially at estimated fair value less costs to sell. When a property is acquired, the excess of the loan balance over the estimated fair value is charged to the allowance for loan losses. An allowance for losses on other real estate owned is established by a charge to income when, upon periodic evaluation by management, further declines in the estimated fair value of properties have occurred. Such evaluations are based on an analysis of individual properties as well as a general assessment of current real estate market conditions.

Holding costs and rental income on properties are included in current operations while certain costs to improve such properties are capitalized. Gains and losses from the sale of properties are reflected in operating results when realized.

Pension and Postretirement Benefits

The Company recognizes the compensation cost of pension and postretirement benefits over each employee's estimated service life. After evaluating Brookline's defined benefit pension plan, the

F-11

Company elected to terminate the plan as of September 30, 2000 and to replace it with a defined contribution plan effective January 1, 2001. During 2000, Lighthouse adopted a defined contribution plan.

Stock-Based Compensation

In accordance with Statement of Financial Accounting Standards ("SFAS") No. 123, "Accounting for Stock-Based Compensation", the Company adheres to Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees", in accounting for its stock option plans and discloses in the footnotes to the financial statements pro forma net income and earnings per share information as if the fair value based method had been adopted.

Deferred compensation for shares awarded under the Recognition and Retention Plan is recorded as a reduction of stockholders' equity. Compensation expense is recognized over the vesting period of shares awarded based upon the fair value of the shares at the award date.

Compensation expense for the Employee Stock Ownership Plan ("ESOP") is recorded at an amount equal to the shares allocated by the ESOP multiplied by the average fair market value of the shares during the year. The Company recognizes compensation expense ratably over the year for the ESOP shares to be allocated based upon the Company's current estimate of the number of shares expected to be allocated by the ESOP during each calendar year. The difference between the average fair market value and the cost of the shares allocated by the ESOP is recorded as an adjustment to additional paid-in-capital.

Income Taxes

The Company utilizes the asset and liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases.

Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

Earnings Per Common Share

Basic earnings per share is computed by dividing net income by the weighted average number of shares of common stock outstanding during the periods presented. ESOP shares committed to be released are considered outstanding while unallocated ESOP shares are not considered outstanding. Diluted earnings per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the Company.

F-12

Treasury Stock

Common stock shares repurchased are recorded as treasury stock at cost.

Swap Agreement

Effective January 1, 2001, the Company adopted Statement of Financial Accounting Standards, "Accounting for Derivative Instruments and Hedging Activities". This Statement requires the Company to recognize all derivatives (including swap agreements) as either assets or liabilities in its balance sheet and to measure those instruments at fair value. The accounting for changes in the fair value of a derivative depends on the intended use of the derivative and the resulting designation. The Company had one outstanding interest-rate swap agreement at January 1 and December 31, 2001. That agreement did not meet the criteria to designate it as a hedging instrument. Accordingly, changes in the fair value of the outstanding swap agreement are recognized as charges or credits to earnings. The pre-tax unrealized loss of $20 in the swap agreement as of January 1, 2001 was not accounted for as the effect of a change in accounting principle due to immateriality. Instead, that amount was included in the pre-tax charge to earnings of $241 for the year ended December 31, 2001 resulting from accounting for the swap agreement on a fair value basis.

(2) Corporate Structure and Stock Offering (Dollars in Thousands)

The Company was organized in November 1997 for the purpose of acquiring all of the capital stock of the Bank upon completion of the Bank's reorganization from a mutual savings bank into a mutual holding company structure. As part of the reorganization, the Company offered for sale 47% of the shares of its common stock in an offering fully subscribed for by eligible depositors of the Bank (the "Offering"). The remaining 53% of the Company's shares of common stock were issued to Brookline Bancorp, MHC (the "MHC"). The reorganization and Offering were completed on March 24, 1998. Net proceeds from the Offering amounted to $134,790. At December 31, 2001, the MHC owned 15,420,350 shares (57.6%) of the Company's shares of common stocks outstanding.

As part of the Offering and as required by regulation, Brookline established a liquidation account for the benefit of eligible account holders and supplemental eligible account holders who maintain their deposit accounts at Brookline after the Offering. In the unlikely event of a complete liquidation of Brookline (and only in that event), eligible depositors who continue to maintain deposit accounts at Brookline shall be entitled to receive a distribution from the liquidation account. The liquidation account balance is reduced annually to the extent that eligible depositors have reduced their qualifying deposits as of each anniversary date. Subsequent increases in deposit account balances do not restore an account holder's interest in the liquidation account. The liquidation account approximated $9,213 at December 31, 2001.

On July 16, 2001, the OTS approved the conversion of the MHC, the Company, Brookline and Lighthouse from state to federal charters. As part of the approval of the charter conversions, the OTS requires that the Company comply satisfactorily with several conditions, the most notable of which is that Brookline and its subsidiaries must divest themselves of their investment in marketable equity securities without material loss at the earliest possible date, but in any event no later than July 17,

F-13

2003. The divestiture can be accomplished by sale of the equity securities or their transfer to the Company or its subsidiary. At December 31, 2001, Brookline and its subsidiaries owned equity securities with a market value of $5,793.

As a federally-chartered institution, Brookline will be required to meet a qualified thrift lender test. Under that test, an institution is required to either qualify as a "domestic building and loan association" under the Internal Revenue Code or maintain at least 65% of its "portfolio assets" (total assets minus goodwill and other intangible assets, office property and specified liquid assets up to 20% of total assets) in certain "qualified thrift investments" (primarily loans to purchase, refinance, construct, improve or repair domestic residential housing, home equity loans, securities backed by or representing an interest in mortgages on domestic residential housing, and Federal Home Loan Bank stock) in at least nine months out of each twelve month period. A savings institution that fails the qualified thrift lender test is subject to certain operating restrictions and may be required to convert to a bank charter. The OTS has granted Brookline an exception from the qualified thrift lender test through July 17, 2002. At December 31, 2001, Brookline maintained approximately 66.6% of its portfolio assets in qualified thrift investments.

(3) Cash and Short-Term Investments (In Thousands)

Aggregate reserves (in the form of deposits with the Federal Reserve Bank and vault cash) of $6,710 and $6,228 were maintained to satisfy federal regulatory requirements at December 31, 2001 and 2000, respectively.

Short-term investments are summarized as follows:

	December 31,
	2001		2000
Money market funds	$	24,710	$	19,175
Federal Home Loan Bank of Boston overnight deposits		36,200		9,000
Commercial paper		6,494		31,267
Federal funds sold		1,313		6,978
Other deposits		715		450

	$	69,432	$	66,870

Short-term investments are stated at cost which approximates market. Money market funds are invested in a mutual fund whose assets are comprised primarily of U.S. Treasury obligations, commercial paper and certificates of deposit with average maturities of 90 days or less.

F-14

(4) Investment Securities (In Thousands)

Securities available for sale and held to maturity are summarized below:

				December 31, 2001
				Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Securities available for sale:
	Debt securities:
		U.S. Government and Agency obligations		$	14,093	$	115	$	—	$	14,208
		Corporate obligations			49,073		1,662		95		50,640
		Collateralized mortgage obligations			78,536		1,265		100		79,701
		Mortgage-backed securities			1,662		30		3		1,689

			Total debt securities		143,364		3,072		198		146,238
	Marketable equity securities				9,502		7,738		53		17,187

			Total securities available for sale	$	152,866	$	10,810	$	251	$	163,425

Securities held to maturity:
	Corporate obligations			$	8,264	$	187	$	6	$	8,445
	Mortgage-backed securities				1,294		32		5		1,321

			Total securities held to maturity	$	9,558	$	219	$	11	$	9,766

				December 31, 2000
				Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Securities available for sale:
	Debt securities:
		U.S. Government and Agency obligations		$	10,946	$	134	$	1	$	11,079
		Corporate obligations			44,467		450		213		44,704
		Collateralized mortgage obligations			68,225		425		124		68,526
		Mortgage-backed securities			890		20		—		910

			Total debt securities		124,528		1,029		338		125,219
	Marketable equity securities				14,948		9,252		58		24,142

			Total securities available for sale	$	139,476	$	10,281	$	396	$	149,361

Securities held to maturity:
	Corporate obligations			$	48,969	$	45	$	154	$	48,860
	Mortgage-backed securities				1,478		18		19		1,477

			Total securities held to maturity	$	50,447	$	63	$	173	$	50,337

F-15

Restricted equity securities are as follows:

	December 31,
	2001		2000
Federal Home Loan Bank of Boston stock	$	8,907	$	6,771
Massachusetts Savings Bank Life Insurance Company stock		253		253
Other stock		121		121

	$	9,281	$	7,145

As a voluntary member of the Federal Home Loan Bank of Boston ("FHLB"), the Company is required to invest in $100 par value stock of the FHLB in an amount equal to 1% of its outstanding home loans or 5% of its outstanding advances from the FHLB, whichever is higher. As and when such stock is redeemed, the Company would receive from the FHLB an amount equal to the par value of the stock. At its discretion, the FHLB may declare dividends on the stock. Such dividends amounted to $462, $477 and $362 for the years ended December 31, 2001, 2000 and 1999, respectively.

The maturities of the investments in debt securities at December 31, 2001 are as follows:

	Available for Sale
Maturity	Amortized Cost		Estimated Fair Value
Within 1 year (A)	$	45,285	$	46,672
After 1 year through 5 years		94,625		96,167
After 5 years through 10 years		—		—
Over 10 years		3,454		3,399

	$	143,364	$	146,238

(A): Includes the defaulted corporate debt security referred to on the following page.

	Held to Maturity
Maturity	Amortized Cost		Estimated Fair Value
Within 1 year	$	4,566	$	4,616
After 1 year through 5 years		3,767		3,899
After 5 years through 10 years		402		432
Over 10 years		823		819

	$	9,558	$	9,766

Mortgage-backed securities are included above based on their contractual maturities (primarily in excess of 10 years); the expected lives, however, are expected to be shorter due to anticipated payments. Collateralized mortgage obligations are included above based on when the final principal payment is expected to be received.

F-16

Sales and valuation write-downs of investment securities are summarized as follows:

	Year Ended December 31,
	2001		2000		1999
Proceeds from sales:
Marketable equity securities	$	6,436	$	8,982	$	8,234
Debt securities		—		2,975		—
Gross gains from sales:
Marketable equity securities		4,035		8,248		7,465
Debt securities		—		5		—
Valuation write-downs:
Marketable equity security		—		—		28
Defaulted corporate debt security		495		—		—

In the second quarter of 2001, the Company charged earnings $495 to recognize an other than temporary impairment in the carrying value of a $2,000 bond issued by Southern California Edison that matured on June 1, 2001. Interest of $65 due on the bond was received at the maturity date and applied as a reduction of the carrying value of the bond instead of being credited to interest income. An interest payment of $65 received on December 1, 2001 was credited to interest income. At December 31, 2001, the defaulted bond was carried on the books of the Company at $1,440 and had a market value of $1,950. On March 1, 2002, principal and interest due on the bond was paid in full, resulting in a credit to income of $593.

F-17

(5) Loans (In Thousands)

A summary of loans follows:

			December 31,
			2001			2000
Mortgage loans:
	One-to-four family		$	159,887		$	114,411
	Multi-family			338,973			300,841
	Commercial real estate			272,061			255,895
	Construction and development			20,901			19,947
	Home equity			8,924			6,596
	Second			29,408			27,236

		Total mortgage loans		830,154			724,926
Commercial loans				42,637			33,205
Consumer loans				3,130			2,488

		Total gross loans		875,921			760,619
Unadvanced funds on loans				(47,157	)		(43,030	)
Deferred loan origination fees				(404	)		(1,030	)

	Loans, excluding money market loan participations			828,360			716,559
Money market loan participations				6,000			28,250

			$	834,360		$	744,809

The Company's portfolio, other than money market loan participations, is substantially concentrated within Massachusetts. Money market loan participations represent purchases of a portion of loans to national companies and organizations originated and serviced by money center banks. Such participations generally mature between one day and three months.

The recorded investment in impaired loans, as defined by SFAS No. 114, at December 31, 2001 and 2000 amounted to $105 and $107, respectively. Such amounts were composed of multi-family mortgage loans.

The average recorded investment in impaired loans for the years ended December 31, 2001, 2000 and 1999 amounted to $106, $108 and $755, respectively. None of the impaired loans at December 31, 2001 and 2000 required an allowance for impairment due primarily to prior charge-offs and/or the sufficiency of collateral values. If interest payments on all impaired loans at December 31, 2001, 2000 and 1999 had been made in accordance with original loan agreements, interest income of $13, $15 and $109 would have been recognized on the loans in 2001, 2000 and 1999 compared to interest income actually recognized of $8, $10 and $340, respectively.

Loans on non-accrual at December 31, 2001 and 2000 amounted to $140 and none, respectively.

There were no restructured loans at December 31, 2001 and 2000. Restructured loans represent performing loans for which concessions (such as reductions of interest rates to below market terms and/or extension of repayment terms) have been granted due to the borrower's financial condition.

F-18

A portion of certain commercial real estate loans originated and serviced by the Company are sold periodically to other banks on a non-recourse basis. The balance of loans acquired by other banks amounted to $26,960 and $17,990 at December 31, 2001 and 2000, respectively. No fees are collected by the Company for servicing such loan participations.

In the ordinary course of business, the Company makes loans to its Directors and their related interests, generally at the same prevailing terms as those of other borrowers. A summary of related party activity follows:

	Year Ended December 31,
	2001			2000
Balance at beginning of year	$	6,549		$	6,372
New loans granted during the year		—			901
Removal of loans no longer to related parties		(1,863	)		—
Repayments		(516	)		(724	)

Balance at end of year	$	4,170		$	6,549

(6) Allowance for Loan Losses (In Thousands)

An analysis of the allowance for loan losses for the years indicated follows:

	Year Ended December 31,
	2001			2000			1999
Balance at beginning of year	$	14,315		$	13,874		$	13,094
Provision for loan losses		974			427			450
Charge-offs		(4	)		(10	)		—
Recoveries		16			24			330

Balance at end of year	$	15,301		$	14,315		$	13,874

(7) Bank Premises and Equipment (In Thousands)

Bank premises and equipment consist of the following:

	December 31,
	2001		2000
Land	$	62	$	62
Office building and improvements		2,253		2,374
Furniture, fixtures and equipment		1,840		4,870

		4,155		7,306
Accumulated depreciation and amortization		2,248		3,538

	$	1,907	$	3,768

F-19

(8) Other Real Estate Owned (In Thousands)

There was no other real estate owned at December 31, 2001 and 2000.

Net other real estate owned income for the years indicated is comprised of the following:

	Year Ended December 31,
	2001		2000			1999
Rental income	$	—	$	117		$	276
Operating and foreclosure expenses		—		(42	)		(130	)
Gains from sales		—		11			465
Reduction in valuation allowance, net		—		86			100

	$	—	$	172		$	711

An analysis of the valuation allowance for the years indicated follows:

	Year Ended December 31,
	2001		2000			1999
Balance at beginning of year	$	—	$	86		$	186
Reduction in valuation allowance, net		—		(86	)		(100	)

Balance at end of year	$	—	$	—		$	86

(9) Deposits (Dollars In Thousands)

A summary of deposits follows:

			December 31, 2001				December 31, 2000
			Amount		Weighted Average Rate		Amount		Weighted Average Rate
Demand checking accounts			$	18,455	0.00	%	$	16,878	0.00	%
NOW accounts				75,439	0.50			64,234	1.65
Savings accounts				12,951	1.49			11,681	2.25
Money market savings accounts				259,695	2.42			206,431	4.03

		Total transaction deposit accounts		366,540	1.87			299,224	3.22

Certificate of deposit accounts maturing:
	Within six months			108,582	4.09			184,570	6.10
	After six months but within 1 year			84,846	4.25			63,092	5.75
	After 1 year but within 2 years			39,351	4.94			38,900	6.13
	After 2 years but within 3 years			11,262	4.96			13,058	6.17
	After 3 years			10,339	5.95			9,777	6.17

		Total certificate of deposit accounts		254,380	4.39			309,397	6.04

			$	620,920	2.90	%	$	608,621	4.65	%

F-20

Certificate of deposit accounts issued in amounts of $100 or more totaled $61,950 and $84,586 at December 31, 2001 and 2000, respectively.

Interest expense on deposit balances is summarized as follows:

	Year Ended December 31,
	2001		2000		1999
NOW accounts	$	815	$	690	$	542
Savings accounts		232		268		289
Money market savings accounts		7,851		8,140		7,434
Certificate of deposit accounts		14,662		14,136		12,443

	$	23,560	$	23,234	$	20,708

F-21

(10) Borrowed Funds (Dollars In Thousands)

Borrowed funds are comprised of the following advances from the FHLB:

	December 31, 2001				December 31, 2000
	Amount		Weighted Average Rate		Amount		Weighted Average Rate
Within 1 year	$	11,300	6.54	%	$	9,350	6.66	%
Over 1 year to 2 years		32,950	4.96			11,300	6.54
Over 2 years to 3 years		32,000	5.91			30,750	5.29
Over 3 years to 4 years		43,000	6.73			32,000	5.91
Over 4 years to 5 years		47,880	5.30			43,000	6.72
Over 5 years		11,000	5.96			7,000	6.17

	$	178,130	5.81	%	$	133,400	6.15	%

The advances are secured by all the Bank's stock and deposits in the FHLB, a general lien on one-to-four family residential mortgage loans, certain multi-family loans and U.S. Government and Agency obligations in an aggregate amount equal to outstanding advances.

(11) Income Taxes (Dollars in Thousands)

Provision for income taxes are comprised of the following amounts:

	Year Ended December 31,
	2001			2000		1999
Current:
Federal	$	11,230		$	11,260	$	11,698
State		782			677		683

		12,012			11,937		12,381

Deferred:
Federal		(623	)		46		(814	)
State		(158	)		15		(205	)

		(781	)		61		(1,019	)

	$	11,231		$	11,998	$	11,362

F-22

Total income tax expense differed from the amounts computed by applying the statutory U.S. federal income tax rate to income before tax expense as a result of the following:

	Year Ended December 31,
	2001			2000			1999
Expected income tax expense at statutory federal tax rate	$	10,698		$	11,771		$	11,254
State taxes, net of federal income tax benefit		406			450			311
Dividend income received deduction		(165	)		(223	)		(217	)
Excise tax on pension plan gain		245			—			—
Other, net		47			—			14

	$	11,231		$	11,998		$	11,362

Effective income tax rate		36.7	%		35.7	%		35.3	%

The tax effect of temporary differences that give rise to significant portions of the deferred tax assets and liabilities at the dates indicated are as follows:

		December 31,
		2001		2000
Deferred tax assets:
Allowance for loan losses		$	6,314	$	5,902
Pension and postretirement benefits			1,596		1,909
Recognition and retention plan			80		85
Depreciation			124		78
Restructuring charge			354		—
Debt security write-down			178		—
Other			114		23

	Total gross deferred tax assets		8,760		7,997

Deferred tax liabilities:
Unrealized gain on securities available for sale			3,842		3,641
Post-1987 bad debt reserves			—		38
Savings Bank Life Insurance Company stock			108		108
Other			229		211

	Total gross deferred tax liabilities		4,179		3,998

	Net deferred tax asset	$	4,581	$	3,999

For federal income tax purposes, the Company has a $1,801 reserve for loan losses which remains subject to recapture. If any portion of the reserve is used for purposes other than to absorb the losses for which it was established, approximately 150% of the amount actually used (limited to the amount of the reserve) would be subject to taxation in the year in which used. As the Company intends to use the reserve only to absorb loan losses, no provision has been made for the $753 liability that would result if 100% of the reserve were recaptured.

F-23

(12) Employee Benefits (Dollars In Thousands, Except Share and Per Share Amounts)

Pension and Postretirement Benefits

Brookline sponsored a non-contributory defined benefit plan (the "Plan") that provided pension benefits to eligible employees. Effective, July 31, 2000, accrual of pension benefits ceased and, effective September 30, 2000, the Plan was terminated subject to approval by the Internal Revenue Service. Such approval was obtained in 2001. Employees and retired employees were given the option to (a) roll over the amount of their vested benefits plus a portion of the Plan surplus distributed to enhance employee benefits into Brookline's 401(k) plan or an IRA, (b) purchase an annuity or (c) receive a lump sum cash payment. In 2001, the Company recognized a settlement gain of $4,267 and incurred an excise tax of $587 and other related expenses of $13, resulting in a pre-tax net gain of $3,667 from termination of the Plan.

Postretirement benefits are provided for part of the annual expense of health insurance premiums for retired employees and their dependents. The following table provides a reconciliation of the changes in the benefit obligations and fair value of assets for pension and postretirement benefits for the years ended October 31, the latest plan valuation dates.

		Pension Benefits						Postretirement Benefits
		2001			2000			2001			2000
Reconciliation of benefit obligation:
Obligation at beginning of period		$	5,676		$	4,877		$	625		$	560
Service cost			—			205			52			53
Interest cost			109			383			47			40
Actuarial (gain) loss			—			291			172			(15	)
Benefits paid			(5,785	)		(80	)		(9	)		(13	)

	Obligation at end of period	$	—		$	5,676		$	887		$	625

Reconciliation of fair value of plan assets:
Fair value of plan assets at beginning of period		$	8,375		$	6,805		$	—		$	—
Contribution			28			—			—			—
Actual return on plan assets			315			1,648			—			—
Benefits paid			(5,785	)		(80	)		—			—
Distribution to employer			(2,933	)		—			—			—
Other			—			2			—			—

	Fair value of plan assets at end of period	$	—		$	8,375		$	—		$	—

Funded status:
Funded status at end of period		$	—		$	2,700		$	(887	)		(625	)
Unrecognized (gain) loss			—			(4,016	)		153			(45	)
Unrecognized transition asset			—			(45	)		222			259

	Net amount recognized as a liability in the Company's balance sheet as of October 31	$	—		$	(1,361	)	$	(512	)	$	(411	)

F-24

The following table provides the components of net periodic pension and postretirement benefit cost (credit) for the years ended October 31:

	Pension Benefits									Postretirement Benefits
	2001			2000			1999			2001		2000		1999
Service cost	$	—		$	205		$	259		$	52	$	53	$	43
Interest cost		109			383			335			47		40		36
Expected return on plan assets		(109	)		(470	)		(462	)		—		—		—
Transition obligation		—			(3	)		(3	)		18		18		19
Actuarial gain		—			(141	)		(92	)		—		—		—

Net periodic benefit costs (credit)	$	—		$	(26	)	$	37		$	117	$	111	$	98

Expense for postretirement benefits and pension benefits under the terminated plan for the years ended December 31, 2001, 2000 and 1999 amounted to $111, $75 and $129, respectively.

Assumptions used in determining the actuarial present value of the projected benefit obligations are shown in the following table:

	Pension Benefits					Postretirement Benefits
	2001	2000		1999		2001		2000		1999
Discount rate	N/A	7.50	%	6.75	%	6.75	%	6.75	%	6.75	%
Rate of increase in compensation	N/A	4.00		5.50		N/A		N/A		N/A
Expected long-term rate of return on plan assets	N/A	6.75		8.00		N/A		N/A		N/A

The assumed health care trend used to measure the accumulated postretirement benefit obligation was 7% initially, decreasing gradually to 5% in 2006 and thereafter. Assumed health care trend rates may have a significant effect on the amounts reported for the postretirement benefit plan. A 1% change in assumed health care cost trend rates would have the following effects:

		1% Increase			1% Decrease
Effect on total service and interest cost components of net periodic postretirement benefit costs		$	38		$	(28	)
Effect on the accumulated postretirement benefit obligation			187			(143	)

401(k) Plan

The Company has an employee tax deferred thrift incentive plan under Section 401(k) of the Internal Revenue Code. All employees who meet specified age and length of service requirements are eligible to participate in the plan by making voluntary contributions, subject to certain limits based on federal tax laws. The Company makes no matching contribution to the plan.

In connection with the termination of its defined benefit pension plan, Brookline amended its 401(k) plan. Effective January 1, 2001, Brookline contributed an amount equal to 5% of the compensation of eligible employees, subject to certain limits based on federal tax laws. Each employee reaching the age of twenty-one and having completed one thousand hours of service in a plan year

F-25

becomes eligible to participate in the plan. Effective May 1, 2000, a separate 401(k) plan was established by Lighthouse with contribution limits and eligibility requirements similar to the Brookline 401(k) plan. Expense for plan contributions was $281 in 2001 and $72 in 2000.

Supplemental Executive Retirement Agreements

The Company maintains agreements that provide supplemental retirement benefits to certain executive officers. Total expense for benefits payable under the agreements amounted to $511, $400 and $419 for the years ended December 31, 2001, 2000 and 1999, respectively. Aggregate benefits payable included in accrued expenses and other liabilities at December 31, 2001 and 2000 amounted to $3,303 and $2,792, respectively.

Employee Stock Ownership Plan

The Company maintains an Employee Stock Ownership Plan ("ESOP") to provide eligible employees the opportunity to own Company stock. Employees are eligible to participate in the Plan after reaching age twenty-one, completion of one year of service and working at least one thousand hours of consecutive service during the year. Contributions are allocated to eligible participants on the basis of compensation, subject to federal tax law limits.

The ESOP borrowed $6,599 from the Company to finance the purchase of 546,986 shares in the open market. The loan is payable in quarterly installments over 30 years and bears interest at 8.50% per annum. The loan can be prepaid without penalty. Loan payments are principally funded by cash contributions from the Bank, subject to federal tax law limits.

Shares used as collateral to secure the loan are released and available for allocation to eligible employees as the principal and interest on the loan is paid. Employees vest in their ESOP account at a rate of 20% annually commencing in the year of completion of three years of credited service or immediately if service is terminated due to death, retirement, disability or change in control. Employees of the Bank as of October 31, 1997 received credit for vesting purposes for each continuous year of service involving at least one thousand hours up to a maximum of three years of credited service. Dividends on released shares are credited to the participants' ESOP accounts. Dividends on unallocated shares are generally applied towards payment of the loan. ESOP shares committed to be released are considered outstanding in determining earnings per share.

At December 31, 2001, the ESOP held 422,992 unallocated shares at an aggregate cost of $5,044; the market value of such shares at that date was $6,954. For the years ended December 31, 2001, 2000 and 1999, $474, $376 and $377 were charged to compensation and employee benefits expense based on the commitment to release to eligible employees 32,779 shares in 2001, 35,833 shares in 2000 and 34,239 shares in 1999.

Recognition and Retention Plan

Under the Company's 1999 Recognition and Retention Plan (the "RRP"), 546,986 shares of the Company's common stock were reserved for issuance as restricted stock awards to officers, employees and non-employee directors in recognition of prior service and as an incentive for such individuals to remain with the Company. Shares issued upon vesting may be either authorized but unissued shares or

F-26

reacquired shares held by the Company as treasury shares. Through December 31, 2001, the Company acquired 387,564 shares of stock that relates to the RRP; such shares are included in treasury stock. Any shares not issued because vesting requirements are not met will again be available for issuance under the RRP.

On April 19, 1999, 546,500 shares were awarded to officers and non-employee directors of the Company. The shares vest over varying time periods ranging from six months up to eight years. In the event a recipient ceases to maintain continuous service with the Company by reason of normal retirement, death or disability, or following a change in control, RRP shares still subject to restrictions will vest and be free of such restrictions. As of December 31, 2001, 444,988 shares were vested and 8,068 shares were forfeited. Expense is recognized for shares awarded over the vesting period at the fair market value of the shares on the date they were awarded, or $10.8125 per share. RRP expense amounted to $167 in 2001, $1,246 in 2000 and $3,593 in 1999.

Stock Option Plan

Under the Company's 1999 Stock Option Plan (the "Stock Option Plan"), 1,367,465 shares of the Company's common stock were reserved for issuance to officers, employees and non-employee directors of the Company. Shares issued upon the exercise of a stock option may be either authorized but unissued shares or reacquired shares held by the Company as treasury shares. Any shares subject to an award which expire or are terminated unexercised will again be available for issuance under the Stock Option Plan. On April 19, 1999, 1,265,500 options were awarded to officers and non-employee directors of the Company at an exercise price of $10.8125 per share, the fair market value of the common stock of the Company on that date. Of the total options awarded, 410,460 options are incentive stock options and 855,040 options are non-qualified stock options. Options awarded vest over periods ranging from less than six months through five years. If an individual to whom a stock option was granted ceases to maintain continuous service by reason of normal retirement, death or disability, or following a change in control, all options and rights granted and not fully exercisable become exercisable in full upon the happening of such event and shall remain exercisable for a period ranging from three months to one year.

F-27

Activity under the Stock Option Plan is as follows:

	Year Ended December 31,
	2001			2000			1999
Shares under option:
Outstanding at beginning of year		1,244,500			1,261,500			—
Granted at $10.8125 per share		—			—			1,265,500
Forfeited		(6,000	)		(17,000	)		(4,000	)
Exercised at $10.8125		(55,495	)		—			—

Outstanding at end of year at $10.8125		1,183,005			1,244,500			1,261,500

Exercisable at end of year		786,305			670,900			500,000

Weighted average fair value per option of options granted during the year	$	—		$	—		$	3.32

Weighted average remaining contractual life in years at end of year		7.7			8.7			9.7

In determining the pro forma amounts, the fair value of each option granted in 1999 was estimated as of the date of grant using the Black-Scholes option-pricing model with the following weighted-average assumptions:

Dividend yield	2.3	%
Expected life in years	6.4
Expected volatility	25.6	%
Risk-free interest rate	5.2	%

On a pro forma basis, had compensation expense for the Company's stock-based compensation plan been determined based on the fair value at the grant date for awards made under the plan, consistent with SFAS No. 123, the Company's net income and earnings per share for the years ended December 31, 2001, 2000 and 1999 would have been reduced as follows:

	Year Ended December 31,
	2001		2000		1999
Net income:
As reported	$	19,334	$	21,634	$	20,791
Pro forma		18,732		20,920		18,984
Basic earnings per share:
As reported	$	0.72	$	0.80	$	0.74
Pro forma		0.70		0.78		0.68
Diluted earnings per share:
As reported	$	0.71	$	0.80	$	0.74
Pro forma		0.69		0.78		0.68

F-28

(13) Commitments and Contingencies (In Thousands)

Off-Balance Sheet Financial Instruments

The Company is party to off-balance sheet risk 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 commitments to extend credit and involve, to varying degrees, elements of credit risk in excess of the amount recognized in the consolidated balance sheet. The contract amounts reflect the extent of the involvement the Company has in particular classes of these instruments. The Company's exposure to credit loss in the event of nonperformance by the other party to the financial instrument is represented by the contractual amount of those instruments. The Company uses the same policies in making commitments and conditional obligations as it does for on-balance sheet instruments.

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

			December 31,
			2001		2000
Financial instruments whose contract amounts represent credit risk:
	Commitments to originate loans:
		One-to-four family mortgage	$	4,625	$	5,351
		Multi-family mortgage		15,559		19,410
		Commercial real estate mortgage		20,172		17,980
		Construction and development mortgage		1,500		10,503
		Commercial		300		25
	Unadvanced portion of loans			47,157		43,030
	Unused lines of credit:
		Equity		12,612		11,254
		Other		10,116		8,356

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 credit-worthiness on a case-by-case basis. The amount of collateral obtained, if any, is based on management's credit evaluation of the borrower.

F-29

Lease Commitments

The Company leases certain office space under various noncancellable operating leases. A summary of future minimum rental payments under such leases at the dates indicated follows:

Year Ending December 31,
2002	$	783
2003		545
2004		546
2005		559
2006		494

The leases contain escalation clauses for real estate taxes and other expenditures. Total rental expense was $712, $613 and $403 for the years ended December 31, 2001, 2000 and 1999, respectively.

SWAP Agreement

Effective April 14, 1998, the Company entered into an interest-rate swap agreement with a third-party that matures April 14, 2005. The notional amount of the agreement is $5,000. Under this agreement, each quarter the Company pays interest on the notional amount at an annual fixed rate of 5.9375% and receives from the third-party interest on the notional amount at the floating three month U.S. dollar LIBOR rate. The Company entered into this transaction to match more closely the repricing of its assets and liabilities and to reduce its exposure to increases in interest rates. The net interest expense paid (income received) was $81, ($26) and $29 for the years ended December 31, 2001, 2000 and 1999, 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.

(14) Stockholders' Equity (Dollars in Thousands, Except Share and Per Share Amounts)

Preferred Stock

The Company is authorized to issue 5,000,000 shares of serial preferred stock, par value $0.01 per share, from time to time in one or more series subject to limitations of law, and the Board of Directors is authorized to fix the designations, powers, preferences, limitations and rights of the shares of each such series. As of December 31, 2001, there were no shares of preferred stock issued.

Capital Distributions and Restrictions Thereon

OTS regulations impose limitations on all capital distributions by savings institutions. Capital distributions include cash dividends, payments to repurchase or otherwise acquire the institution's shares, payments to shareholders of another institution in a cash-out merger and other distributions

F-30

charged against capital. The regulations establish three tiers of institutions. An institution, such as the Bank, that exceeds all capital requirements before and after a proposed capital distribution ("Tier 1 institution") may, after prior notice but without the approval of the OTS, make capital distributions during a year up to 100% of its current year net income plus its retained net income for the preceding two years not previously distributed. Any additional capital distributions require OTS approval.

Among other things, the charter conversions permit the MHC to waive the receipt of dividends paid by the Company without causing dilution to the ownership interests of the Company's minority stockholders in the event of a conversion of the MHC to stock form. The waiving of dividends increases Company resources available for stock repurchases, payment of dividends to minority stockholders and investments.

The MHC has waived its right to receive two quarterly dividends of $0.16 each declared and paid during 2001, thereby reducing the actual dividend payout by the Company in that year. The OTS requires that the retained earnings of the Bank be restricted by the cumulative amount of dividends waived by the MHC. At December 31, 2001, the cumulative amount of waived dividends was $4,935. Restricted retained earnings is available for payment of dividends solely to the MHC.

Common Stock Repurchases

On October 20, 1998, the Company received regulatory approval to repurchase 1,454,750 shares, or 5% of the common shares issued by the Company. Repurchase of that total number of shares was completed in February 2000 at an aggregate cost of $15,893, or $10.93 per share. On March 10, 2000, the Company received regulatory approval to repurchase an additional 610,995 shares of its common shares. Repurchase of that total number of shares was completed in September 2001 at an aggregate cost of $7,053, or $11.54 per share. Additionally, in connection with the Company's RRP, 387,564 shares were purchased in 1999 and 2000 at an aggregate cost of $3,788, or $9.77 per share. On September 19, 2001, the Board of Directors approved a program to repurchase 1,362,984 shares, or 5% of common shares outstanding. As of December 31, 2001, 468,069 shares had been acquired at an aggregate cost of $7,078, or $15.12 per share.

(15) Earnings Per Share Reconciliation (In Thousands, Except Share and Per Share Amounts)

The following table is the reconciliation of basic and diluted earnings per share as required under SFAS No. 128 for the years ended December 31, 2001, 2000 and 1999.

		2001					2000					1999
		Net Income		Average Shares	Per Share Amounts		Net Income		Average Shares	Per Share Amounts		Net Income		Average Shares	Per Share Amounts
Basic earnings per share:
	Income available to common stockholders	$	19,334	26,732,571	$	0.72	$	21,634	26,881,433	$	0.80	$	20,791	28,016,150	$	0.74

Effect of dilutive securities:
	Options		—	320,999		—		—	43,438		—

Diluted earnings per share:
	Income available to common stockholders	$	19,334	27,053,570	$	0.71	$	21,634	26,924,871	$	0.80	$	20,791	28,016,150	$	0.74

F-31

(16) Regulatory Capital Requirements (Dollars In Thousands)

OTS regulations require savings institutions to maintain a minimum ratio of tangible capital to total adjusted assets of 1.5%, a minimum ratio of Tier 1 (core) capital to total adjusted assets of 4.0% and a minimum ratio of total (core and supplementary) capital to risk-weighted assets of 8.0%.

Under its prompt corrective action regulations, the OTS is required to take certain supervisory actions with respect to an under-capitalized institution. Such actions could have a direct material effect on the institution's financial statements. The regulations established a framework for the classification of depository institutions into five categories: well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized and critically undercapitalized. Generally, an institution is considered well capitalized if it has a Tier 1 (core) capital ratio of at least 5.0%, a Tier l risk-based capital ratio of at least 6.0% and a Total risk-based capital ratio of at least 10.0%.

The foregoing capital ratios are based in part on specific quantitative measures of assets, liabilities and certain off-balance sheet items as calculated under regulatory accounting practices. Capital amounts and classifications are also subject to qualitative judgments by the OTS about capital components, risk weightings and other factors. These capital requirements apply only to the Bank and do not consider additional capital retained by Brookline Bancorp, Inc.

The following is a summary of the Bank's actual capital amounts and ratios as of December 31, 2001 and 2000, compared to the OTS requirements for minimum capital adequacy and for classification as a well-capitalized institution:

						OTS Requirements
		Bank Actual				Minimum Capital Adequacy				Classified As Well Capitalized
		Amount		Ratio		Amount		Ratio		Amount		Ratio
At December 31, 2001:
Tangible capital		$	228,626	21.8	%	$	15,765	1.5	%
Tier 1 (core) capital			228,626	21.8			42,040	4.0		$	52,549	5.0	%
Risk-based capital:
	Tier 1		228,626	26.4			63,059	6.0
	Total		241,430	27.9			69,245	8.0			86,557	10.0
At December 31, 2000:
Tangible capital		$	204,269	21.9	%	$	14,016	1.5	%
Tier 1 (core) capital			204,269	21.9			37,376	4.0		$	46,720	5.0	%
Risk-based capital:
	Tier 1		204,269	24.8			56,064	6.0
	Total		218,331	26.5			65,902	8.0			82,378	10.0

Prior to converting to federal charters, the Company and the Bank were required to maintain minimum capital ratios calculated in a manner similar to, but not entirely the same as, the framework of the OTS. At December 31, 2001, the Company and the Bank substantially exceeded the capital ratios required to be classified as well capitalized.

F-32

(17) Fair Value of Financial Instruments (In Thousands)

The following is a summary of the carrying values and estimated fair values of the Company's significant financial and non-financial instruments as of the dates indicated:

	December 31, 2001				December 31, 2000
	Carrying Value		Estimated Fair Value		Carrying Value		Estimated Fair Value
Financial assets:
Cash and due from banks	$	13,283	$	13,283	$	13,505	$	13,505
Short-term investments		69,432		69,432		66,870		66,870
Securities		182,264		182,472		206,953		206,843
Loans, net		819,059		837,837		730,494		730,726
Accrued interest receivable		5,041		5,041		6,521		6,521
Financial liabilities:
Demand, NOW, savings and money market savings deposit accounts		366,540		366,540		299,224		299,224
Certificate of deposit accounts		254,380		256,643		309,397		309,279
Borrowed funds		178,130		183,661		133,400		133,513
Swap agreement		—		241		—		11

SFAS No. 107 requires disclosures about fair values of financial instruments for which it is practicable to estimate fair value. Fair value is defined in SFAS No. 107 as the amount that a financial instrument could be exchanged in a current transaction between willing parties, other than in a forced liquidation sale. Quoted market prices are used to estimate fair values when those prices are available. However, active markets do not exist for many types of financial instruments. Consequently, fair values for these instruments must be estimated by management using techniques such as discounted cash flow analysis and comparison to similar instruments. These instruments are highly subjective and require judgments regarding significant matters such as the amount and timing of future cash flows and the selection of discount rates that may appropriately reflect market and credit risks. Changes in these judgments often have a material impact on the fair value estimates. In addition, since these estimates are as of a specific point in time, they are susceptible to material near-term changes. Fair values disclosed in accordance with SFAS No. 107 do not reflect any premium or discount that could result from the sale of a large volume of a particular financial instrument, nor do they reflect the possible tax ramifications or estimated transaction costs.

The following is a description of the principal valuation methods used by the Company to estimate the fair values of its financial instruments.

Securities

The fair value of securities is based principally on market prices and dealer quotes. Certain fair values are estimated using pricing models or are based on comparisons to market prices of similar securities. The fair value of stock in the FHLB equals its carrying amount since such stock is only redeemable at its par value.

F-33

Loans

The fair value of performing loans, other than money market loan participations, is estimated by discounting the contractual cash flows using interest rates currently being offered for loans with similar terms to borrowers of similar quality. The fair value of money market loan participations is considered to equal their carrying amounts since such loans generally are repayable within 90 days. For non-performing loans where the credit quality of the borrower has deteriorated significantly, fair values are estimated by discounting cash flows at a rate commensurate with the risk associated with those cash flows.

Deposit Liabilities

In accordance with SFAS No. 107, 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 time deposits 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 deposit liabilities compared to the cost of alternative forms of funding ("deposit based intangibles").

Borrowed Funds

The fair value of borrowings from the FHLB represent contractual repayments discounted using interest rates currently available for borrowings with similar characteristics and remaining maturities.

Other Financial Assets and Liabilities

Cash and due from banks, short-term investments and accrued interest receivable have fair values which approximate the respective carrying values because the instruments are payable on demand or have short-term maturities and present relatively low credit risk and interest rate risk.

Off-Balance Sheet Financial Instruments

In the course of originating loans and extending credit, the Company will charge fees in exchange for its commitment. While these commitment fees have value, the Company has not estimated their value due to the short-term nature of the underlying commitments and their immateriality.

Swap Agreement

The fair value is estimated as the difference in the present value of future cash flows between the Company's existing agreement and current market rate agreements of the same duration.

F-34

(18) Lighthouse Bank (In Thousands)

On April 12, 2000, the Company received regulatory approval for Lighthouse Bank ("Lighthouse") to commence operations as New England's first-chartered internet-only bank. In connection with the legal formation of Lighthouse, the Company made a $25,000 capital investment in Lighthouse at the beginning of May 2000. Lighthouse commenced doing business with the public in the last week of June 2000. Expenses incurred prior to the legal incorporation of Lighthouse (April 27, 2000) were considered to have been start-up expenses. In April 2001, the Company announced the decision to either sell Lighthouse to a third party or merge it into Brookline Savings Bank ("Brookline"). That decision was reached after determining the amount of additional operating losses Lighthouse would likely incur before achieving satisfactory profitability. On July 17, 2001, Lighthouse was converted from a state to a federal charter and merged into Brookline.

A summary of Lighthouse start-up and operating expenses from its inception to the date of its merger into Brookline is as follows:

	Operating Expenses				Start-up Expenses
	January 1 Through July 17, 2001		Eight Months Ended December 31, 2000		Four Months Ended April 30, 2000		Second Half of 1999
Compensation and benefits	$	1,231	$	1,254	$	409	$	290
Occupancy		110		187		105		104
Equipment and data processing		1,088		694		45		15
Advertising and marketing		474		1,670		97		44
Professional services		—		48		58		96
Other		327		342		32		126

	$	3,230	$	4,195	$	746	$	675

Certain operating expenses associated with servicing former Lighthouse customers, including employee stay bonuses, were incurred through the third quarter of 2001. As of September 17, 2001, Lighthouse customers accounts were transferred to Brookline's systems and records. In contemplation of the merger of Lighthouse into Brookline, a pre-tax restructuring charge of $3,912 was recorded in the second quarter of 2001 to provide for merger-related expenses. In the fourth quarter of 2001, $15 was provided for additional restructuring charges. Estimated expenses included in the restructuring charge and actual expenses incurred through December 31, 2001 were as follows:

	Actual Expenses		Estimated Expenses
Personnel severance payments	$	633	$	1,247
Vendor contract terminations		686		634
Occupancy rent obligations		53		319
Write-off of equipment and software		1,549		1,551
Other miscellaneous items		160		176

	$	3,081	$	3,927

F-35

At December 31, 2001, $846 is included in accrued expenses and other liabilities for the remainder of restructuring charges to be paid in 2002.

(19) Business Segments (In Thousands)

Through July 17, 2001, the Company's wholly-owned bank subsidiaries, Brookline and Lighthouse, collectively "the Banks", were identified as reportable operating segments in accordance with the provisions of SFAS No. 131, "Disclosures About Segments of an Enterprise and Related Information". The Brookline operating segment includes its wholly-owned subsidiaries. The "All Other" segment presented below includes the Company and its wholly-owned securities corporation.

The primary activities of the Banks through July 17, 2001 included acceptance of deposits from the general public, origination of mortgage loans on residential and commercial real estate, commercial and consumer loans, and investment in debt securities, mortgage-backed securities and other financial instruments. Brookline conducts its business primarily through its branch network while Lighthouse conducted its business primarily through the internet. As stated in note 18, Lighthouse was merged into Brookline on July 17, 2001.

The Company and the Banks follow generally accepted accounting principles as described in the summary of significant accounting policies. Income taxes are provided in accordance with tax allocation agreements between the Company and the Banks. Intercompany expenditures are allocated based on actual or estimated costs. Consolidation adjustments reflect elimination of intersegment revenue and expenses and balance sheet accounts.

The following table sets forth certain information about and the reconciliation of reported net income for each of the reportable segments.

At or For the Year Ended December 31, 2001	Brookline		Lighthouse*			All Other		Consolidation Adjustments			Consolidated
Interest income	$	71,479	$	2,798		$	19,992	$	(18,309	)	$	75,960
Interest expense		32,456		1,577			—		(1,129	)		32,904
Provision for loan losses		900		74			—		—			974
Securities gains (losses)		3,480		183			60		(183	)		3,540
Pension plan gain		3,667		—			—		—			3,667
Other non-interest income		1,845		61			395		(210	)		2,091
Restructuring charge		15		3,912			—		—			3,927
Other non-interest expense		13,319		3,230			339		—			16,888
Income tax expense (benefit)		12,455		(2,279	)		1,119		(64	)		11,231
Net income (loss)		21,326		(3,472	)		18,989		(17,509	)		19,334
Total loans, excluding money market loan participations	$	828,360	$	—		$	—	$	—		$	828,360
Total deposits		626,851		—			—		(5,931	)		620,920
Total assets		1,057,120		—			293,216		(250,740	)		1,099,596

*: Operating results are for the period from January 1 through July 17, 2001.

F-36

At or For the Year Ended December 31, 2000	Brookline		Lighthouse			All Other		Consolidation Adjustments			Consolidated
Interest income	$	67,644	$	1,686		$	26,323	$	(24,093	)	$	71,560
Interest expense		30,908		582			—		(918	)		30,572
Provision for loan losses		300		127			—		—			427
Securities gains		8,248		5			—		—			8,253
Other non-interest income		1,383		20			351		(113	)		1,641
Start-up expenses		—		746			—		—			746
Non-interest expense		11,583		4,195			299		—			16,077
Income tax expense (benefit)		12,225		(1,426	)		1,199		—			11,998
Net income (loss)		22,259		(2,513	)		25,176		(23,288	)		21,634
Total loans, excluding money market loan participations	$	683,230	$	33,329		$	—	$	—		$	716,559
Total deposits		583,070		52,400			—		(26,849	)		608,621
Total assets		943,250		75,032			289,024		(271,156	)		1,036,150

At or For the Year Ended December 31, 1999	Brookline		Lighthouse			All Other		Consolidation Adjustments			Consolidated
Interest income	$	61,779	$	—		$	21,455	$	(18,425	)	$	64,809
Interest expense		27,587		—			—		(425	)		27,162
Provision for loan losses		450		—			—		—			450
Securities gains		7,437		—			—		—			7,437
Other non-interest income		1,742		—			20		(85	)		1,677
Start-up expenses		—		675			—		—			675
Other non-interest expense		13,225		—			258		—			13,483
Income tax expense (benefit)		10,436		(283	)		1,209		—			11,362
Net income (loss)		19,260		(392	)		20,008		(18,085	)		20,791
Total loans, excluding money market loan participations	$	635,556	$	—		$	—	$	—		$	635,556
Total deposits		512,136		—			—		—			512,136
Total assets		851,410		—			280,148		(224,224	)		907,334

(20) Condensed Parent Company Financial Statements (In Thousands)

Condensed parent company financial statements as of December 31, 2001 and 2000 and the years ended December 31, 2001, 2000 and 1999 follow.

F-37

Balance Sheets

		December 31,
		2001		2000
Assets
Cash and due from banks		$	202	$	309
Short-term investments			5		10
Equity securities available for sale			—		56
Loan to Bank ESOP			5,252		5,566
Investment in subsidiaries, at equity			281,817		279,066
Other investment			3,686		3,360
Other assets			10		5

	Total assets	$	290,972	$	288,372

Liabilities and Stockholders' Equity
Accrued expenses and other liabilities		$	594	$	512
Stockholders' equity			290,378		287,860

	Total liabilities and stockholders' equity	$	290,972	$	288,372

The Company's consolidated stockholders' equity is $4,933 and $5,275, respectively, less than the amounts presented above because of the elimination of the effect of unallocated ESOP shares in consolidation.

F-38

Statements of Income

			Year Ended December 31,
			2001		2000			1999
Dividend income from subsidiaries			$	17,180	$	25,934		$	19,110
Interest income:
	Short-term investments			23		4			72
	Money market loan participations			—		—			11
	Marketable equity securities			—		1			1
	Loan to Bank ESOP			461		483			425
Gains on sales of securities				22		—			—
Equity interest in earnings of other investment				395		351			21

		Total income		18,081		26,773			19,640

Expenses:
	Director's fees			57		57			58
	Internet bank start-up			—		746			675
	Other			278		238			193

		Total expenses		335		1,041			926

		Income before income taxes and equity in undistributed net income of subsidiaries		17,746		25,732			18,714
Income tax expense (benefit)				349		44			(88	)

		Income before equity in undistributed net income of subsidiaries		17,397		25,688			18,802
Equity in undistributed net income of subsidiaries				1,937		(4,054	)		1,989

		Net income	$	19,334	$	21,634		$	20,791

F-39

Statements of Cash Flow

			Year Ended December 31,
			2001			2000			1999
Cash flows from operating activities:
Net income			$	19,334		$	21,634		$	20,791
Adjustments to reconcile net income to net cash provided by operating activities:
	Equity in undistributed net income of subsidiaries			(1,937	)		4,054			(1,989	)
	Equity interest in earnings of other investment			(395	)		(350	)		(21	)
	Gains from sales of securities			(22	)		—			—
	Depreciation and amortization			—			32			10
	Deferred income taxes			—			—			(4	)
	Decrease in accrued interest receivable			—			1			6
	(Increase) decrease in other assets			(5	)		30			(57	)
	Increase in accrued expenses and other liabilities			88			416			62

		Net cash provided from operating activities		17,063			25,817			18,798

Cash flows from investing activities:
Investment in subsidiaries, net				—			(14,170	)		—
ESOP loan to subsidiary bank				—			(802	)		(549	)
Repayment of ESOP loan by subsidiary bank				314			363			335
Payment from subsidiary bank for shares vested in recognition and retention plan				191			2,180			2,459
Funding of other investment				—			—			(3,001	)
Receipt of dividend from other investment				69			12			—
Purchase of bank premises and equipment				—			—			(290	)
Proceeds from sales of securities available for sale				63			—			—

		Net cash provided from (used for) investing activities		637			(12,417	)		(1,046	)

Cash flows from financing activities:
Purchase of treasury stock				(10,826	)		(6,653	)		(15,018	)
Payment of common stock dividends				(7,586	)		(6,635	)		(6,060	)
Exercise of stock options				600			—			—

		Net cash used for financing activities		(17,812	)		(13,288	)		(21,078	)

Net increase (decrease) in cash and cash equivalents				(112	)		112			(3,326	)
Cash and cash equivalents at beginning of year				319			207			3,533

Cash and cash equivalents at end of year			$	207		$	319		$	207

Supplemental disclosures of cash flow information:
Cash paid during the year for income taxes			$	183		$	140		$	—
Non-cash activities:
Transfer from bank premises and equipment, other assets and accrued expenses to investment in subsidiaries				—			246			—

F-40

(21) Quarterly Results of Operations (Unaudited, Dollars In Thousands Except Per Share Amounts)

		2001 Quarters
		Fourth			Third			Second			First
Interest income		$	18,153		$	19,059		$	19,209		$	19,539
Interest expense			7,354			8,197			8,448			8,905

	Net interest income		10,799			10,862			10,761			10,634
Provision for loan losses			40			275			495			164

	Net interest income after provision for loan losses		10,759			10,587			10,266			10,470
Gains (losses) on sales of securities, net			362			871			(495	)		2,802
Pension plan gain			—			—			3,667			—
Other non-interest income			947			401			457			286
Recognition and retention plan expense			(41	)		(42	)		(42	)		(42	)
Restructuring charge			(15	)		—			(3,912	)		—
Other non-interest expense			(3,788	)		(4,087	)		(4,217	)		(4,629	)

	Income before income taxes		8,224			7,730			5,724			8,887
Provision for income taxes			2,884			2,801			2,290			3,256

	Net income	$	5,340		$	4,929		$	3,434		$	5,631

Earnings per share:
	Basic	$	0.20		$	0.18		$	0.13		$	0.21
	Diluted		0.20			0.18			0.12			0.21

		2000 Quarters
		Fourth			Third			Second			First
Interest income		$	19,146		$	18,151		$	17,379		$	16,884
Interest expense			8,636			7,733			7,260			6,943

	Net interest income		10,510			10,418			10,119			9,941
Provision for loan losses			58			69			150			150

	Net interest income after provision for loan losses		10,452			10,349			9,969			9,791
Gains on sales of securities, net			1,794			2,316			1,801			2,342
Other real estate owned income, net			90			18			46			18
Other non-interest income			466			348			381			274
Recognition and retention plan expense			(114	)		(365	)		(370	)		(397	)
Internet bank start-up expense			—			—			(179	)		(567	)
Other non-interest expense			(4,482	)		(4,345	)		(3,283	)		(2,721	)

	Income before income taxes		8,206			8,321			8,365			8,740
Provision for income taxes			3,024			2,955			2,903			3,116

	Net income	$	5,182		$	5,366		$	5,462		$	5,624

Basic and diluted earnings per share		$	0.19		$	0.20		$	0.20		$	0.21

F-41

No person has been authorized to give any information or to make any representation other than as contained in this prospectus and, if given or made, such other information or representation must not be relied upon as having been authorized by Brookline Bancorp, Inc. or Brookline Savings Bank. This prospectus does not constitute an offer to sell or a solicitation of an offer to buy any of the securities offered hereby to any person in any jurisdiction in which such offer or solicitation is not authorized or in which the person making such offer or solicitation is not qualified to do so, or to any person whom it is unlawful to make such offer or solicitation in such jurisdiction. Neither the delivery of this prospectus nor any sale hereunder shall under any circumstances create any implication that there has been no change in the affairs of Brookline Bancorp, Inc. or Brookline Savings Bank since any of the dates as of which information is furnished herein or since the date hereof.

Up to 29,325,000 Shares
(Anticipated Maximum)

Brookline Bancorp, Inc.

(Holding Company for
Brookline Savings Bank)

COMMON STOCK
Par Value $0.01 per share

PROSPECTUS

Ryan Beck & Co.

, 2002

These securities are not deposits or accounts and are not federally insured or guaranteed.

Until or 25 days after commencement of the Syndicated Community Offering, if any, whichever is later, all dealers effecting transactions in the registered securities, whether or not participating in this distribution, may be required to deliver a prospectus when acting as underwriters and with respect to their unsold allotments of subscriptions.

PART II: INFORMATION NOT REQUIRED IN PROSPECTUS

Item 14. Indemnification of Directors and Officers

Article TENTH of the Certificate of Incorporation of Brookline Bancorp, Inc. (the "Corporation") sets forth circumstances under which directors, officers, employees and agents of the Corporation may be insured or indemnified against liability which they incur in their capacities as such:

TENTH:

A. Each person who was or is made a party or is threatened to be made a party to or is otherwise involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (hereinafter a "proceeding"), by reason of the fact that he or she is or was a Director or an Officer of the Corporation or is or was serving at the request of the Corporation as a Director, Officer, employee or agent of another corporation or of a partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan (hereinafter an "indemnitee"), whether the basis of such proceeding is alleged action in an official capacity as a Director, Officer, employee or agent or in any other capacity while serving as a Director, Officer, employee or agent, shall be indemnified and held harmless by the Corporation to the fullest extent authorized by the Delaware General Corporation Law, as the same exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits the Corporation to provide broader indemnification rights than such law permitted the Corporation to provide prior to such amendment), against all expense, liability and loss (including attorneys' fees, judgments, fines, ERISA excise taxes or penalties and amounts paid in settlement) reasonably incurred or suffered by such indemnitee in connection therewith; provided, however, that, except as provided in Section C hereof with respect to proceedings to enforce rights to indemnification, the Corporation shall indemnify any such indemnitee in connection with a proceeding (or part thereof) initiated by such indemnitee only if such proceeding (or part thereof) was authorized by the Board of Directors of the Corporation.

B. The right to indemnification conferred in Section A of this Article TENTH shall include the right to be paid by the Corporation the expenses incurred in defending any such proceeding in advance of its final disposition (hereinafter an "advancement of expenses"); provided, however, that, if the Delaware General Corporation Law requires, an advancement of expenses incurred by an indemnitee in his or her capacity as a Director or Officer (and not in any other capacity in which service was or is rendered by such indemnitee, including, without limitation, service to an employee benefit plan) shall be made only upon delivery to the Corporation of an undertaking (hereinafter an "undertaking"), by or on behalf of such indemnitee, to repay all amounts so advanced if it shall ultimately be determined by final judicial decision from which there is no further right to appeal (hereinafter a "final adjudication") that such indemnitee is not entitled to be indemnified for such expenses under this Section or otherwise. The rights to indemnification and to the advancement of expenses conferred in Sections A and B of this Article TENTH shall be contract rights and such rights shall continue as to an indemnitee who has ceased to be a Director, Officer, employee or agent and shall inure to the benefit of the indemnitee's heirs, executors and administrators.

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suit by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking the Corporation shall be entitled to recover such expenses upon a final adjudication that, the indemnitee has not met any applicable standard for indemnification set forth in the Delaware General Corporation Law. Neither the failure of the Corporation (including its Board of Directors, independent legal counsel, or its stockholders) to have made a determination prior to the commencement of such suit that indemnification of the indemnitee is proper in the circumstances because the indemnitee has met the applicable standard of conduct set forth in the Delaware General Corporation Law, nor an actual determination by the Corporation (including its Board of Directors, independent legal counsel, or its stockholders) that the indemnitee has not met such applicable standard of conduct, shall create a presumption that the indemnitee has not met the applicable standard of conduct or, in the case of such a suit brought by the indemnitee, be a defense to such suit. In any suit brought by the indemnitee to enforce a right to indemnification or to an advancement of expenses hereunder, or by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the burden of proving that the indemnitee is not entitled to be indemnified, or to such advancement of expenses, under this Article TENTH or otherwise shall be on the Corporation.

D. The rights to indemnification and to the advancement of expenses conferred in this Article TENTH shall not be exclusive of any other right which any person may have or hereafter acquire under any statute, the Corporation's Certificate of Incorporation, Bylaws, agreement, vote of stockholders or disinterested Directors or otherwise.

E. The Corporation may maintain insurance, at its expense, to protect itself and any Director, Officer, employee or agent of the Corporation or another corporation, partnership, joint venture, trust or other enterprise against any expense, liability or loss, whether or not the Corporation would have the power to indemnify such person against such expense, liability or loss under the Delaware General Corporation Law.

F. The Corporation may, to the extent authorized from time to time by the Board of Directors, grant rights to indemnification and to the advancement of expenses to any employee or agent of the Corporation to the fullest extent of the provisions of this Article TENTH with respect to the indemnification and advancement of expenses of Directors and Officers of the Corporation.

Item 14. Other Expenses of Issuance and Distribution

		Amount
*	Legal Fees and Expenses	$	365,000
*	Printing, Postage, Mailing and EDGAR		320,000
*	Appraisal and Business Plan Fees and Expenses		90,000
*	Accounting Fees and Expenses		51,000
*	Conversion Agent and Data Processing Fees		47,500
**	Marketing Agent Fees and Expenses		2,615,000
*	Marketing Agent Counsel Fees and expenses		76,500
*	Filing Fees (OTS, NASD, Nasdaq and SEC)		92,425
*	Other		6,000

*	Total	$	3,663,425

*: Estimated
**: Brookline Bancorp, Inc. has retained Ryan, Beck & Co., LLC to assist in the sale of common stock on a best efforts basis in the Offerings. Fees are estimated at the midpoint of the offering range.

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Item 15. Recent Sales of Unregistered Securities

Not Applicable.

Item 16. Exhibits and Financial Statement Schedules:

The exhibits and financial statement schedules filed as part of this registration statement are as follows:

(a): List of Exhibits


1.1		Engagement Letter between the Registrant and Ryan, Beck & Co., LLC
1.2		Form of Agency Agreement between the Registrant and Ryan, Beck & Co., LLC*
2		Plan of Conversion and Reorganization
3.1		Certificate of Incorporation of Brookline Bancorp, Inc. (Included in Exhibit 2)
3.2		Bylaws of Brookline Bancorp, Inc. (Included in Exhibit 2)
4		Form of Common Stock Certificate of Brookline Bancorp, Inc.
5		Opinion of Luse Lehman Gorman Pomerenk & Schick regarding legality of securities being registered
8.1		Federal Tax Opinion of Luse Lehman Gorman Pomerenk & Schick*
8.2		Opinion of RP Financial, LC. with respect to Subscription Rights
10.1		Form of Employment Agreement (Incorporated by reference to Exhibit 10.1 to Form S-1 filed on November 18, 1997)
10.2		Form of Severance Agreement (Incorporated by reference to Exhibit 10.2 to Form S-1 filed on November 18, 1997)
10.3		Supplemental Retirement Income Agreement with Richard P. Chapman, Jr. (Incorporated by reference to Exhibit 10.3 to Form S-1 filed on November 18, 1997)
10.4		Supplemental Retirement Agreement with Susan M. Ginns (Incorporated by reference to Exhibit 10.4 to Form S-1 filed on November 18, 1997)
10.5		Supplemental Retirement Agreement with Charles H. Peck (Incorporated by reference to Exhibit 10.5 to Form S-1 filed on November 18, 1997)
10.6		Amended Employee Stock Ownership Plan (Incorporated by reference to Exhibit 10.6 to Form 10-K filed on March 23, 2000 and Exhibit 10.6 to Form 10-Q filed on November 14, 2000)
10.7		Sixth and Seventh Amendment to Employee Stock Ownership Plan (Incorporated by reference to Exhibit 10.6 to Form 10-K filed on March 23, 2002)
21		Subsidiaries of Registrant
23.1		Consent of Luse Lehman Gorman Pomerenk & Schick (contained in Opinions included as Exhibits 5 and 8.1)
23.2		Consent of Grant Thornton, LLP
23.3		Consent of RP Financial, LC.
24		Power of Attorney (set forth on signature page)
99.1		Appraisal Agreement between the Registrant and RP Financial, LC
99.2		Appraisal Report of RP Financial, LC**
99.3		Marketing Materials*
99.4		Order and Acknowledgment Form*
99.5		Business Plan Agreement between the Registrant and RP Financial, LC
99.6		Special Meeting Proxy Statement

*: To be filed supplementally or by amendment.
**: Supporting financial schedules filed pursuant to Rule 202 of Regulation S-T.

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(b): Financial Statement Schedules

No financial statement schedules are filed because the required information is not applicable or is included in the consolidated financial statements or related notes.

Item 17. Undertakings

The undersigned Registrant hereby undertakes:

(1) To file, during any period in which it offers or sells securities, a post-effective amendment to this registration statement:

(i) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933;

(ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any duration from the low or high and of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20 percent change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement;

(iii) To include any additional or changed material information on the plan of distribution.

(2) For determining liability under the Securities Act, treat each post-effective amendment as a new registration statement of the securities offered, and the offering of the securities at that time to be the initial bona fide offering.

(3) To remove from registration by means of a post-effective amendment any of the securities that remain unsold at the end of the offering.

Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the small business issuer pursuant to the foregoing provisions, or otherwise, the small business issuer has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act, and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the small business issuer of expenses incurred or paid by a director, officer or controlling person of the small business issuer in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the small business issuer will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the questions whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.

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SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the town of Brookline, Commonwealth of Massachusetts on April 4, 2002.

		BROOKLINE BANCORP,, INC.
		By:		/s/ RICHARD P. CHAPMAN, JR. Richard P. Chapman, Jr. President and Chief Executive Officer (Duly Authorized Representative)

POWER OF ATTORNEY

We, the undersigned directors and officers of Brookline Bancorp, Inc. (the "Company") hereby severally constitute and appoint Richard P. Chapman, Jr. as our true and lawful attorney and agent, to do any and all things in our names in the capacities indicated below which said Richard P. Chapman, Jr. may deem necessary or advisable to enable the Company to comply with the Securities Act of 1933, and any rules, regulations and requirements of the Securities and Exchange Commission, in connection with the registration statement on Form S-1 relating to the offering of the Company's Common Stock, including specifically, but not limited to, power and authority to sign for us in our names in the capacities indicated below the registration statement and any and all amendments (including post-effective amendments) thereto; and we hereby approve, ratify and confirm all that said Richard P. Chapman, Jr. shall do or cause to be done by virtue thereof.

In accordance with the requirements of the Securities Act of 1933, this registration statement has been signed below by the following persons in the capacities and on the dates stated.

Signatures	Title	Date

/s/ RICHARD P. CHAPMAN, JR. Richard P. Chapman, Jr.	President and Chief Executive Officer and Director (Principal Executive Officer)	April 4, 2002
/s/ PAUL R. BECHET Paul R. Bechet	Senior Vice President, Chief Financial Officer and Treasurer (Principal Financial and Accounting Officer)	April 4, 2002
/s/ CHARLES H. PECK Charles H. Peck	Executive Vice President and Director	April 4, 2002
/s/ GEORGE C. CANER, JR. George C. Caner, Jr.	Corporate Secretary and Director	April 4, 2002

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/s/ OLIVER F. AMES Oliver F. Ames	Director	April 4, 2002
/s/ DENNIS S. ARONOWITZ Dennis S. Aronowitz	Director	April 4, 2002
/s/ DAVID C. CHAPIN David C. Chapin	Director	April 4, 2002
/s/ WILLIAM G. COUGHLIN William G. Coughlin	Director	April 4, 2002
/s/ JOHN L. HALL, II John L. Hall, II	Director	April 4, 2002
/s/ HOLLIS W. PLIMPTON, JR. Hollis W. Plimpton, Jr.	Director	April 4, 2002
/s/ JOSEPH J. SLOTNIK Joseph J. Slotnik	Director	April 4, 2002
/s/ WILLIAM V. TRIPP, III William V. Tripp, III	Director	April 4, 2002
/s/ FRANKLIN WYMAN, JR. Franklin Wyman, Jr.	Director	April 4, 2002

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EXHIBIT INDEX


1.1		Engagement Letter between the Registrant and Ryan, Beck & Co., LLC
1.2		Form of Agency Agreement between the Registrant and Ryan, Beck & Co., LLC*
2		Plan of Conversion and Reorganization
3.1		Certificate of Incorporation of Brookline Bancorp, Inc. (Included in Exhibit 2)
3.2		Bylaws of Brookline Bancorp, Inc. (Included in Exhibit 2)
4		Form of Common Stock Certificate of Brookline Bancorp, Inc.
5		Opinion of Luse Lehman Gorman Pomerenk & Schick regarding legality of securities being registered
8.1		Federal Tax Opinion of Luse Lehman Gorman Pomerenk & Schick*
8.2		Opinion of RP Financial, LC. with respect to Subscription Rights
10.1		Form of Employment Agreement (Incorporated by reference to Exhibit 10.1 to Form S-1 filed on November 18, 1997)
10.2		Form of Severance Agreement (Incorporated by reference to Exhibit 10.2 to Form S-1 filed on November 18, 1997)
10.3		Supplemental Retirement Income Agreement with Richard P. Chapman, Jr. (Incorporated by reference to Exhibit 10.3 to Form S-1 filed on November 18, 1997)
10.4		Supplemental Retirement Agreement with Susan M. Ginns (Incorporated by reference to Exhibit 10.4 to Form S-1 filed on November 18, 1997)
10.5		Supplemental Retirement Agreement with Charles H. Peck (Incorporated by reference to Exhibit 10.5 to Form S-1 filed on November 18, 1997)
10.6		Amended Employee Stock Ownership Plan (Incorporated by reference to Exhibit 10.6 to Form 10-K filed on March 23, 2000 and Exhibit 10.6 to Form 10-Q filed on November 14, 2000)
10.7		Sixth and Seventh Amendment to Employee Stock Ownership Plan (Incorporated by reference to Exhibit 10.6 to Form 10-K filed on March 23, 2002)
21		Subsidiaries of Registrant
23.1		Consent of Luse Lehman Gorman Pomerenk & Schick (contained in Opinions included as Exhibits 5 and 8.1)
23.2		Consent of Grant Thornton, LLP
23.3		Consent of RP Financial, LC.
24		Power of Attorney (set forth on signature page)
99.1		Appraisal Agreement between the Registrant and RP Financial, LC.
99.2		Appraisal Report of RP Financial, LC**
99.3		Marketing Materials*
99.4		Order and Acknowledgment Form*
99.5		Business Plan Agreement between the Registrant and RP Financial, LC.
99.6		Special Meeting Proxy Statement

*: To be filed supplementally or by amendment.
**: Supporting financial schedules filed pursuant to Rule 202 of Regulation S-T.

QuickLinks

Exhibit 1.1

CONFIDENTIAL

March 29, 2002

Mr. Richard P. Chapman, Jr.
President & Chief Executive Officer
Brookline Bancorp, Inc.
160 Washington Street
Brookline, MA 02147-7612

Mr. Richard P. Chapman, Jr.
Brookline Bancorp, MHC
President & Chief Executive Officer
160 Washington Street
Brookline, MA 02147-7612

Re: "SECOND STEP" CONVERSION - SELLING AGENT SERVICES, PROXY
SOLICITATION & ADMINISTRATIVE SERVICES

Dear Dick:

Ryan, Beck & Co. ("Ryan, Beck") is pleased to submit this engagement letter setting forth the terms of the proposed engagement between Ryan, Beck and Brookline Bancorp, Inc. (the "Company") and Brookline Bancorp, MHC (the "MHC") in connection with the proposed conversion and sale of the Common Stock of the Company held by Brookline Bancorp, MHC.

1. BACKGROUND ON RYAN, BECK

Ryan, Beck, Inc., was organized in 1946 and is one of the nation's leading investment bankers for financial institutions. The firm is a registered broker-dealer with the Securities and Exchange Commission, a member of the National Association of Securities Dealers, Inc., Securities Industry Association and a member of the Securities Investor Protection Corporation. Ryan, Beck's Financial Institutions Group, including corporate finance and research, represents one of the largest such groups devoted solely to financial institutions matters in the country. Moreover, Ryan, Beck is one of the largest market makers in bank and thrift stocks.

2. SECOND STEP STOCK OFFERING

It is our understanding that the Company proposes to issue shares of common stock of the Company held by the MHC in a subscription offering with any remaining shares sold in a community offering (collectively the "Offering"). Shares sold in the Offering shall represent those shares representing the final independent appraisal times the adjusted majority ownership of the MHC. In connection therewith, the Company's Board of Directors will adopt a reorganization and stock issuance plan (the "Plan") whereby shares of Common Stock will be offered for sale in the Offering. Ryan, Beck

Mr. Richard P. Chapman, Jr.
March 29, 2002

Page 2

proposes to act as financial advisor to the Company with respect to the Plan and selling agent with respect to the subscription and community offering. Specific terms of services shall be set forth in a definitive agency agreement (the "Definitive Agreement") between Ryan, Beck and the Company to be executed on the date the offering document is declared effective by the appropriate regulatory authorities. The Definitive Agreement will include customary representations and warranties, covenants, conditions, termination provisions and indemnification, contribution and limitation of liability provisions, all to be mutually agreed upon by Ryan, Beck and the Company (and its successors). Ryan, Beck's willingness to execute a Definitive Agreement and conduct the Offering will be subject to its satisfaction, in its sole discretion and judgment, with a number of other factors, including but not limited to the following:

i. there being no material adverse change in the condition or operation of the Company;

ii. satisfactory disclosure of all relevant financial information in the disclosure documents and determination that the sale of the securities is reasonable given such disclosures;

iii. the current financial position, earnings performance and future prospects of the Company;

iv. receipt of a "comfort letter" from the Company's accountants containing no material exceptions; and

v. the condition of the credit and equity markets and particularly as they relate to securities of financial institutions.

3. SERVICES TO BE PROVIDED BY RYAN, BECK

a. ADVISORY SERVICES - Thorough planning is essential to a successful offering. Ryan, Beck serves as lead coordinator of the marketing and logistic efforts necessary to prepare for an offering. Our actions are intended to clearly define responsibilities and timetables, while avoiding costly surprises. We assume responsibility for the initial preparation of marketing materials--saving you time and legal expense. Moreover, as your investment banker, Ryan, Beck will evaluate the financial, marketing and regulatory issues involved in the Offering. Our specific responsibilities include:

- Review and advice with respect to the Plan;

- Review and provide input with respect to the Business Plan to be prepared in connection with the Reorganization;

- Participate in drafting the Prospectus and assist in obtaining all requisite regulatory approvals on terms most favorable to the Company;

- Review and opine to the Board of Directors on the adequacy of the appraisal process;

- Develop a marketing plan for the Offering including direct mail, advertising, community meetings and telephone solicitation;

- Provide specifications and assistance in selecting data processing assistance, printer and other professionals;

- Develop an operating plan for the Stock Sale Center (the "Center");

- Provide a list of equipment and supplies needed for the Center;

Mr. Richard P. Chapman, Jr.
March 29, 2002

Page 3

- Draft marketing materials including letters, brochures, slide show script and advertisements; and

- Assist in arranging market-makers for post-reorganization trading.

b. ADMINISTRATIVE SERVICES AND STOCK SALE CENTER MANAGEMENT - Ryan, Beck will manage all aspects of the Offering. A successful Offering requires an enormous amount of attention to detail. Working knowledge and familiarity with the law and "lore" of bank regulators, Securities and Exchange Commission and National Association of Securities Dealers is essential. Ryan, Beck's experience in managing many thrift reorganizations and second step conversion offerings will minimize the burden on your management and disruption to normal banking business. At the same time, our legal, accounting and regulatory background ensures that details are attended to in a professional fashion. An Offering requires accurate and timely record keeping and reporting. Furthermore, customer inquiries must be handled professionally and accurately. The Center centralizes all data and work effort relating to the Offering.

- Provide experienced on-site registered representatives to minimize disruption of day-to-day business;

- Identify and organize space for the Center, the focal point of sales and proxy solicitation activity; - Administer the Center. All substantive stock and proxy related matters will be handled by employees of Ryan, Beck;

- Organize and implement all depositor related proxy solicitation efforts;

- Prepare procedures for processing proxies, stock orders and cash, and for handling requests for information;

- Ryan, Beck will outsource all reorganization agent/data processing/transfer agent function;

- Provide scripts, training and guidance for the telephone team in soliciting proxies and in the stock sales telemarketing effort;

- Educate the Company's directors, officers and employees about the Reorganization and Offering, their roles and relevant securities laws;

- Train branch managers and customer-contact employees on the proper response to stock purchase inquiries;

- Train and supervise Center staff assisting with proxy and order processing;

- Prepare daily sales reports for management and ensure funds received balance to such reports;

- Coordinate functions with the data processing agent, printer, transfer agent, stock certificate printer and other professionals;

- Design and implement procedures for handling IRA and other retirement plan orders; and

- Provide post-offering subscriber assistance and management of the pro-ration process.

c. SECURITIES MARKETING SERVICES - Ryan, Beck uses various sales techniques including direct mail, advertising, community investor meetings, telephone solicitation, and if necessary, selling group formation. The sales approach is tailored to fit your specific situation. Our techniques are designed to attract a stockholder base comprised largely of community-oriented individuals loyal to the Company.

Mr. Richard P. Chapman, Jr.
March 29, 2002

Page 4

Our specific actions include:

- Assign licensed registered representatives from our staff to work at the Center to solicit orders on behalf of the Company from eligible prospects who have been targeted as likely and desirable stockholders;

- Assist management in developing a list of potential investors who are viewed as priority prospects;

- Respond to inquiries concerning the Offering and investment opportunities;

- Organize, coordinate and participate in community informational meetings. These meetings are intended to both relieve customer anxiety and attract potential investors. The meetings generate widespread publicity for the Offering while providing local exposure of the Company and promoting favorable stockholder relations;

- Supervise and conduct a telemarketing campaign to identify prospects from among the Company's customer base;

- Continually advise management on market conditions and the community's responsiveness to the Offering;

- If appropriate and at the request of the Company, arrange a syndicated community Offering involving a selling group of selected broker-dealers acting on a "best efforts" basis to assist in selling stock during the Offering. In so doing, prepare broker "fact sheets" and arrange "road shows" for the purpose of stimulating interest in the stock and informing the brokerage community of the particulars of the Offering;

- Coordinate efforts to maximize after-market support and Company sponsorship.

4. COMPENSATION

a. For its services hereunder, the Company will pay to Ryan, Beck the following compensation in connection with the Reorganization and Offering.

(1) An advisory and management fee of $50,000 in connection with the advisory, administrative and proxy solicitation services set forth in section 3.a. and 3.b. hereof (the "Management Fee"); the Management Fee shall be payable as follows: $25,000 upon signing this Agreement and $25,000 upon the initial filing of the Registration Statement.

(2) A fee of one percent (1.00%) of the dollar amount of the Common Stock sold in the Offering. No fee shall be payable pursuant to this subsection in connection with the sale of stock to officers, directors, employees or immediate family of such persons ("Insiders") and qualified and non-qualified employee benefit plans of the Company or the Insiders.

(3) For stock sold by a group of NASD member firms (which will include Ryan, Beck & Co.) pursuant to a syndicated community offering solely managed by Ryan, Beck (the "Selling Group"), a fee equal to one percent (1.00%), which fee along with the fee payable directly by the Company to selected dealers shall not exceed six percent (6.00%) in the aggregate. In consultation with Ryan, Beck, the Company shall be authorized to determine which NASD

Mr. Richard P. Chapman, Jr.
March 29, 2002

Page 5

member firms participate in the syndicated community offering and the extent of their participation. Ryan, Beck will not commence sales of the stock through members of the Selling Group without the specific prior approval of the Company.

Such fees (less the amount of any advance payments) are to be paid to Ryan, Beck at the closing of the Offering. If, pursuant to a resolicitation undertaken by the Company, Ryan, Beck is required to provide significant additional services, or expend significant additional time, the parties shall mutually agree to the dollar amount of the additional compensation due.

b. If (i) the Plan is abandoned or terminated by the Company; (ii) the Offering is not consummated by March 31, 2003; (iii) Ryan, Beck terminates this relationship because there has been a material adverse change in the financial condition or operations of the Company since December 31, 2001; or (iv) immediately prior to commencement of the Offering, Ryan, Beck terminates this relationship because in its opinion, which shall have been formed in good faith after reasonable determination and consideration of all relevant factors, there has been a failure to satisfactorily disclose all relevant information in the disclosure documents or the existence of market conditions which might render the sale of the shares by the Company hereby contemplated inadvisable; Ryan, Beck shall not be entitled to the fees set forth above under subparagraph
(a), but in addition to reimbursement of its reasonable out-of-pocket expenses as set forth in paragraph 6 below, shall be entitled to retain the Management Fee already paid.

5. DOCUMENTS

The Company and its counsel will complete, file with the appropriate regulatory authorities and, as appropriate, amend from time to time, the information to be contained in the Company's applications to banking and securities regulators and any related exhibits thereto. In this regard, the Company and its counsel will prepare a prospectus and any other necessary disclosure documents relating to the offering of the Common Stock in conformance with applicable rules and regulations. As the Company's financial advisor, Ryan, Beck will in conjunction with counsel, conduct an examination of the relevant documents and records of the Company and will make such other reasonable investigation as deemed necessary and appropriate under the circumstances. The Company agrees to make all such documents, records and other information deemed necessary by Ryan, Beck, or its counsel, available to them upon reasonable request. Ryan, Beck's counsel will prepare, subject to the approval of the Company's counsel, the Definitive Agreement. Ryan, Beck's counsel shall be selected by Ryan, Beck, subject to the approval of the Company.

6. EXPENSES AND REIMBURSEMENT

The Company will bear all of its expenses in connection with the Reorganization and the Offering of its Common Stock including, but not limited to, the Company's attorney fees, NASD filing fees, "blue sky" legal fees, expenses for appraisal, auditing and accounting services, advertising expenses, printing expenses, "road show" expenses, syndicate related expenses, temporary personnel expenses and the preparation of stock certificates. In the event Ryan, Beck incurs such expenses on behalf of the Company, the Company shall pay or reimburse Ryan, Beck for such reasonable fees and expenses

Mr. Richard P. Chapman, Jr.
March 29, 2002

Page 6

regardless of whether the Reorganization is successfully completed. Ryan, Beck will not incur any single expense of more than $2,000, pursuant to this paragraph without the prior approval of the Company.

The Company also agrees to reimburse Ryan, Beck for reasonable out-of-pocket expenses, including legal fees and expenses, incurred by Ryan, Beck in connection with the services contemplated hereunder. Ryan, Beck will not incur legal fees (excluding legal out-of-pocket expenses) in excess of $75,000 without the approval of the Company. Legal out-of-pocket expenses for Ryan, Beck's counsel shall not exceed $3,000. Other out-of-pocket expenses directly incurred by Ryan, Beck will not exceed $25,000, without the approval of the Company. The parties acknowledge, however, that such caps may be increased by the mutual consent of the Company and Ryan, Beck in the event of any material delay in the Offering which would require an update of the financial information in tabular form contained in the Prospectus for a period later than March 31, 2002. Not later than two days before closing, we will provide you with a detailed accounting of all reimbursable expenses to be paid at closing.

7. MARKET MAKING

Ryan, Beck agrees to use its best efforts to maintain a market and if necessary solicit other broker dealers to make a market in the Common Stock after the "Second Step Conversion".

8. INFORMATION TO BE SUPPLIED; DOCUMENTS AND CONFIDENTIALITY

a. The Company and its counsel will complete, file with the appropriate regulatory authorities and, as appropriate, amend from time to time, the information to be contained in the Company applications to banking and securities regulators and any related exhibits thereto. In this regard, the Company and its counsel will prepare a prospectus and any other necessary disclosure documents relating to the offering of the Common Stock in conformance with applicable rules and regulations. As the Company's financial advisor, Ryan, Beck will in conjunction with counsel, conduct an examination of the relevant documents and records of the Company and will make such other reasonable investigation as deemed necessary and appropriate under the circumstances.

b. The Company acknowledges that all advice (written or oral) given by Ryan, Beck to the Company is intended solely for the benefit and use of the Company. Other than to the extent required to be reflected in Board and committee meeting minutes, no advice (written or oral) of Ryan, Beck hereunder shall be used, reproduced, disseminated, quoted or referred to at any time, in any manner, or for any purpose, nor shall any public references to Ryan, Beck be made by the Company (or such persons), without the prior written consent of Ryan, Beck.

c. In connection with Ryan, Beck's activities on behalf of the Company, the Company will furnish Ryan, Beck with all financial and other information regarding the Company that Ryan, Beck reasonably believes appropriate to its assignment (all such information so furnished by the Company, whether furnished before or after the date of this Agreement, being referred to herein as the "Information"). The Company will provide Ryan, Beck with access to the officers, directors,

Mr. Richard P. Chapman, Jr.
March 29, 2002

Page 7

employees, independent accountants, legal counsel and other advisors and consultants for the Company. The Company recognizes and agrees that Ryan, Beck:

i. will use and rely primarily on the Information and information available from generally recognized public sources in performing the services contemplated by this Agreement without independently verifying the Information or such other information;

ii. does not assume responsibility for the accuracy of the Information or such other information; and

iii. will not make an appraisal of any assets or liabilities owned or controlled by the Company or its market competitors.

d. Ryan, Beck will maintain the confidentiality of the Information and, unless and until such information shall have been made publicly available by the Company or by others without breach of a confidentiality agreement, shall disclose the Information only as authorized by the Company or as required by law or by order of a governmental authority or court of competent jurisdiction. In the event that Ryan, Beck is legally required to make disclosure of any of the Information, Ryan, Beck will give notice to the Company prior to such disclosure, to the extent that Ryan, Beck can practically do so. The foregoing paragraph shall not apply to information that:

i. at the time of disclosure by the Company is, or thereafter becomes, generally available to the public or within the industries in which the Company or Ryan, Beck or its affiliates conduct business, other than as a result of a breach by Ryan, Beck of its obligations under this Agreement;

ii. prior to or at the time of disclosure by the Company, was already in the possession of, or conceived by, Ryan, Beck or any of its affiliates, or could have been developed by them from information then in their possession, by the application of other information or techniques in their possession, generally available to the public, or available to Ryan, Beck or its affiliates other than from the Company;

iii. at the time of disclosure by the Company or thereafter, is obtained by Ryan, Beck or any of its affiliates from a third party who Ryan, Beck reasonably believes to be in possession of the information not in violation of any contractual, legal or fiduciary obligation to the Company with respect to that information; or iv. is independently developed by Ryan, Beck or its affiliates.

e. Nothing in this Agreement shall be construed to limit the ability of Ryan, Beck or its affiliates to pursue, investigate, analyze, invest in, or engage in investment banking, financial advisory or any other business relationships with, entities other than the Company, notwithstanding that such entities may be engaged in a business which is similar to or competitive with the business of the Company, and notwithstanding that such entities may have actual or potential operations, products, services, plans, ideas, customers or supplies similar or identical to the Company, or may have been identified by the Company as potential merger or acquisition targets or potential candidates for some other business combination, cooperation or relationship. The Company

Mr. Richard P. Chapman, Jr.
March 29, 2002

Page 8

expressly acknowledges and agrees that it does not claim any proprietary interest in the identity of any other entity in its industry or otherwise, and that the identity of any such entity is not confidential information.

9. BLUE SKY

To the extent required by applicable state law, Ryan, Beck and the Company will need to obtain or confirm exemptions, qualifications or registration of the Common Stock under applicable state securities laws and NASD policies. Such work will be performed by the Company's counsel and the cost of such legal work and related filing fees will be paid by the Company. The Company will cause the counsel performing such services to prepare a Blue Sky memorandum related to the Offering including Ryan, Beck's participation therein and shall furnish Ryan, Beck a copy thereof addressed to Ryan, Beck or upon which such counsel shall state Ryan, Beck may rely.

10. AVAILABILITY OF "STARS" PROGRAM

As an additional service to the Company, Ryan, Beck will make available for a period of 1 year following the completion of the Offering, advisory services through the Ryan, Beck Strategic Advisory Services ("STARS") program. The undersigned will serve as the senior relationship manager for this program. If the Company elects to avail itself of the STARS program, Ryan, Beck will meet with the Company at its request. Ryan, Beck also will provide opinions and recommendations, upon request, for the areas covered below:

Valuation Analysis
Merger and Acquisition Planning and Analysis Merger and Acquisition Trends
Planning, Forecasting & Competitive Strategy Capital, Asset & Liability Structure & Management Stock Repurchase Programs
Dividend Policy
Dividend Reinvestment Programs
Market Development and Sponsorship of Bank Securities Financial Disclosure
Financial Relations
Financial Reports
Branch Sales and Purchases
Stock Benefit Plan Analysis and Advisory Stockholder & Investor Relations Presentations & Programs Fairness Opinions
Scanning of Potential Acquisition Candidates Based on Published Statement Information (This screening does not extend to any in-depth merger and acquisition analyses or studies which are available under Ryan, Beck's normal fee schedule, and does not include retention of Ryan, Beck by the Company for any specific merger/acquisition situation.)

Mr. Richard P. Chapman, Jr.
March 29, 2002

Page 9

If the Company elects to utilize the STARS program Ryan, Beck will waive the regular retainer fee and hourly charges for this program for the first year. The Company also will reimburse Ryan, Beck's reasonable out-of-pocket expenses incurred in conjunction with the performance of these services. Such out-of-pocket expenses shall include travel, legal and other miscellaneous expenses. Ryan, Beck will not incur any single expense in excess of $2,000 pursuant to this paragraph without the prior approval of the Company.

11. INDEMNIFICATION

The Definitive Agreement will provide for indemnification of the type usually found in underwriting agreements as to certain liabilities, including liabilities under the Securities Act of 1933. The Company also agrees to defend, indemnify and hold harmless Ryan, Beck and its officers, directors, employees and agents against all claims, losses, actions, judgments, damages or expenses, including but not limited to reasonable attorneys' fees, arising solely out of the engagement described herein, except that such indemnification shall not apply to Ryan, Beck's own bad faith, willful misconduct or gross negligence.

12. CONFIDENTIALITY

To the extent consistent with legal requirements and except as otherwise set forth in the Prospectus, all information given to Ryan, Beck by the Company, unless publicly available or otherwise available to Ryan, Beck without restriction to breach of any confidentiality agreement ("Confidential Information"), will be held by Ryan, Beck in confidence and will not be disclosed to anyone other than Ryan, Beck's agents without the Company's prior approval or used for any purpose other than those referred to in this engagement letter. Upon any termination of its engagement, Ryan, Beck shall promptly deliver to the Company all materials specifically produced for it and will return to the Company all Confidential Information provided to Ryan, Beck during the course of its engagement hereunder.

13. NASD MATTERS

Ryan, Beck has an obligation to file certain documents and to make certain representations to the National Association of Security Dealers ("NASD") in connection with the Reorganization. The Company agrees to cooperate with Ryan, Beck and provide such information as may be necessary for Ryan, Beck to comply with all NASD requirements applicable to it in connection with its participation as contemplated herein in the Reorganization. Ryan, Beck is and will remain through completion of the Reorganization a member in a good standing of the NASD and will comply with all applicable NASD requirements.

Mr. Richard P. Chapman, Jr.
March 29, 2002

Page 10

14. OBLIGATIONS

(a) Except as set forth below, this engagement letter is merely a statement of intent. While Ryan, Beck and the Company agree in principle to the contents hereof and propose to proceed promptly and in good faith to work out the arrangements with respect to the Reorganization, any legal obligations between Ryan, Beck and the Company shall be only: (i) those set forth herein in paragraphs 2, 3 and 4 regarding services and payments; (ii) those set forth in paragraph 6 regarding reimbursement for certain expenses; (iii) those set forth in paragraph 11 regarding indemnification; (iv) those set forth in paragraph 12 regarding confidentiality; and (v) as set forth in a duly negotiated and executed Definitive Agreement.

(b) The obligation of Ryan, Beck to enter into the Definitive Agreement shall be subject to there being, in Ryan, Beck's opinion, which shall have been formed in good faith after reasonable determination and consideration of all relevant factors: (i) no material adverse change in the condition or operation of the Company; (ii) satisfactory disclosure of all relevant information in the disclosure documents and a determination that the sale of stock is reasonable given such disclosures; (iii) no market conditions which might render the sale of the shares by the Company hereby contemplated inadvisable; and (iv) agreement that the price established by the independent appraiser is reasonable in the then prevailing market conditions.

15. INDEPENDENT CONTRACTOR; NO FIDUCIARY DUTY

The Company acknowledges and agrees that it is a sophisticated business enterprise and that Ryan, Beck has been retained pursuant to this Agreement to act as financial advisor to the Company solely with respect to the matters set forth herein. In such capacity, Ryan, Beck shall act as an independent contractor, and any duties of Ryan, Beck arising out of its engagement pursuant to this Agreement shall be contractual in nature and shall be owed solely to the Company. Each party disclaims any intention to impose any fiduciary duty on the other.

16. GOVERNING LAW

This Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Massachusetts applicable to contracts executed and to be wholly performed therein without giving effects to its conflicts of laws principles or rules. Any dispute hereunder shall be brought in a court in the Commonwealth of Massachusetts.

17. WAIVER OF TRIAL BY JURY

EACH OF RYAN, BECK AND THE COMPANY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING, CLAIM OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) RELATED TO OR ARISING OUT OF THIS AGREEMENT.

Mr. Richard P. Chapman, Jr.
March 29, 2002

Page 11

Please acknowledge your agreement to the foregoing by signing in the place provided below and returning one copy of this letter to our office together with the retainer payment in the amount of $25,000. We look forward to working with you.

RYAN, BECK & CO., INC.

BY: /s/ Ben A. Plotkin
    ------------------------------------------------------
    Ben A. Plotkin
    Chairman & Chief Executive Officer

Accepted and Agreed to This 29 Day of March, 2002.

BROOKLINE BANCORP, INC.

BY: /s/ Richard P. Chapman
    ------------------------------------------------------
    Richard P. Chapman
    President & Chief Executive Officer

BROOKLINE BANCORP, MHC

BY: /s/ Richard P. Chapman
    ------------------------------------------------------
    Richard P. Chapman
    President & Chief Executive Officer

Exhibit 2

PLAN OF CONVERSION AND REORGANIZATION

BROOKLINE BANCORP, MHC

TABLE OF CONTENTS

1. INTRODUCTION...........................................................................1
2. DEFINITIONS............................................................................1
3. PROCEDURES FOR CONVERSION..............................................................7
4. HOLDING COMPANY APPLICATIONS AND APPROVALS.............................................9
5. SALE OF SUBSCRIPTION SHARES............................................................9
6. PURCHASE PRICE AND NUMBER OF SUBSCRIPTION SHARES......................................10
7. RETENTION OF CONVERSION PROCEEDS BY THE HOLDING COMPANY...............................11
8. SUBSCRIPTION RIGHTS OF ELIGIBLE ACCOUNT HOLDERS
(FIRST PRIORITY)....................................................................11
9. SUBSCRIPTION RIGHTS OF EMPLOYEE PLANS (SECOND PRIORITY)...............................12
10. SUBSCRIPTION RIGHTS OF SUPPLEMENTAL ELIGIBLE ACCOUNT HOLDERS (THIRD PRIORITY).........12
11. SUBSCRIPTION RIGHTS OF OTHER MEMBERS (FOURTH PRIORITY)................................13
12. COMMUNITY OFFERING....................................................................13
13. SYNDICATED COMMUNITY OFFERING.........................................................13
14. LIMITATIONS ON PURCHASES..............................................................14
15. PAYMENT FOR HOLDING COMPANY COMMON STOCK..............................................16
16. MANNER OF EXERCISING SUBSCRIPTION RIGHTS
THROUGH ORDER FORMS.................................................................17
17. UNDELIVERED, DEFECTIVE OR LATE ORDER FORM;
INSUFFICIENT PAYMENT................................................................18
18. RESIDENTS OF FOREIGN COUNTRIES AND CERTAIN STATES.....................................18
19. ESTABLISHMENT OF LIQUIDATION ACCOUNT..................................................19
20. VOTING RIGHTS OF STOCKHOLDERS.........................................................20
21. RESTRICTIONS ON RESALE OR SUBSEQUENT DISPOSITION......................................20
22. REQUIREMENTS FOR STOCK PURCHASES BY DIRECTORS AND OFFICERS
FOLLOWING THE CONVERSION............................................................21
23. TRANSFER OF DEPOSIT ACCOUNTS..........................................................21
24. REGISTRATION AND MARKETING............................................................21
25. TAX RULINGS OR OPINIONS...............................................................21
26. STOCK BENEFIT PLANS AND EMPLOYMENT AGREEMENTS.........................................22
27. RESTRICTIONS ON ACQUISITION OF BANK AND HOLDING COMPANY...............................22
28. PAYMENT OF DIVIDENDS AND REPURCHASE OF STOCK..........................................23
29. CHARTER AND BYLAWS....................................................................24
30. CONSUMMATION OF CONVERSION AND EFFECTIVE DATE.........................................24
31. EXPENSES OF CONVERSION................................................................24
32. AMENDMENT OR TERMINATION OF PLAN......................................................24
33. CONDITIONS TO CONVERSION..............................................................25
34. INTERPRETATION........................................................................25

EXHIBIT A AGREEMENT OF MERGER BETWEEN BROOKLINE BANCORP, INC., BROOKLINE INTERIM

SAVINGS BANK I AND BROOKLINE SAVINGS BANK

EXHIBIT B AGREEMENT OF MERGER BETWEEN BROOKLINE BANCORP, MHC, BROOKLINE INTERIM

SAVINGS BANK II AND BROOKLINE SAVINGS BANK

EXHIBIT C AGREEMENT OF MERGER BETWEEN BROOKLINE SAVINGS BANK AND BROOKLINE INTERIM SAVINGS BANK

EXHIBIT D CERTIFICATE OF INCORPORATION OF THE HOLDING COMPANY

EXHIBIT E BYLAWS OF THE HOLDING COMPANY

PLAN OF CONVERSION AND REORGANIZATION OF

BROOKLINE BANCORP, MHC

1. INTRODUCTION

This Plan of Conversion and Reorganization (the "Plan") provides for the conversion of Brookline Bancorp, MHC, a federal mutual holding company (the "Mutual Holding Company") into the capital stock form of organization. The Mutual Holding Company currently owns a majority of the common stock of Brookline Bancorp, Inc., a federal stock holding company (the "Mid-Tier Holding Company"), which owns 100% of the common stock of Brookline Savings Bank (the "Bank"), a federal stock savings association which is headquartered in Brookline, Massachusetts. The purpose of the Conversion is to provide the Bank and its stock holding company resulting from the conversion (the "Holding Company") with greater operating flexibility and capital resources to respond to changing regulatory and market conditions, and to effect corporate transactions, including mergers and acquisitions. The Holding Company will offer for sale Holding Company Common Stock upon the terms and conditions set forth herein to Eligible Account Holders, the Employee Plans established by the Bank or the Holding Company, Supplemental Eligible Account Holders and Other Members according to the respective priorities set forth in this Plan. Any shares not subscribed for by the foregoing classes of Persons will be offered for sale to certain members of the public directly by the Holding Company through a Community Offering or a Syndicated Community Offering or through an underwritten firm commitment public offering, or through a combination thereof. As part of the Conversion, each Minority Stockholder will receive Holding Company Common Stock in exchange for Minority Shares. The Conversion will result in the voting interests of the Mutual Holding Company's Members being transferred to Persons who purchase Holding Company Common Stock in the Offering. The Conversion will have no impact on depositors, borrowers or other customers of the Bank. After the Conversion, the Bank will continue to be regulated by the OTS as its chartering authority. The Bank also will continue to be a member of the Federal Home Loan Bank System and all insured savings deposits in the Bank will continue to be insured by the FDIC to the extent provided by applicable law.

This Plan has been adopted by the Boards of Directors of the Mutual Holding Company, the Mid-Tier Holding Company and the Bank and must also be approved by (i) a majority of the total number of votes entitled to be cast by Voting Members of the Mutual Holding Company at a Special Meeting of Members to be called for that purpose, and (ii) at least two-thirds of the outstanding common stock of Mid-Tier Holding Company at the Special Meeting of Stockholders, including (if required by the OTS) at least a majority of the votes cast, in person or by proxy, by Minority Stockholders. Prior to presenting this Plan to the Voting Members and stockholders of Mid-Tier Holding Company for consideration, the Plan must be approved by the OTS.

2. DEFINITIONS

For the purposes of this Plan, the following terms have the following meanings:

ACCOUNT HOLDER - Any Person holding a Deposit Account in the Bank.

ACTING IN CONCERT - The term Acting in Concert means (i) knowing participation in a joint activity or interdependent conscious parallel action towards a common goal whether or not pursuant to an express agreement; or (ii) a combination or pooling of voting or other interests in the securities of an issuer for a common purpose pursuant to any contract, understanding, relationship, agreement or other arrangement, whether written or otherwise. A Person or company which acts in concert with another Person or company ("other party") shall also be deemed to be acting in concert with any Person or company who is also acting in concert with that other party, except that any Tax-Qualified Employee Stock Benefit Plan will not be deemed to be acting in concert with its trustee or a Person who serves in a similar capacity solely for the purpose of determining whether stock held by the trustee and stock held by the plan will be aggregated.

AFFILIATE - Any Person that controls, is controlled by, or is under common control with another Person.

APPRAISED VALUE RANGE - The range of the estimated consolidated pro forma market value of the Holding Company, which shall also be equal to the estimated pro forma market value of the total number of shares of Holding Company Common Stock to be issued in the Conversion, as determined by the Independent Appraiser prior to the Subscription Offering and as it may be amended from time to time thereafter. The maximum and minimum of the Appraised Value Range will vary within 15% above and 15% below, respectively, of the midpoint of the Appraised Value Range.

ASSOCIATE - The term Associate when used to indicate a relationship with any Person, means (i) any corporation or organization (other than Mid-Tier Holding Company, the Bank or a majority owned subsidiary of the Bank) of which such Person is an officer or partner or is, directly or indirectly, the beneficial owner of 10% or more of any class of equity securities, (ii) any trust or other estate in which such Person has a substantial beneficial interest or as to which such Person serves as trustee or in a similar fiduciary capacity, except that for the purposes of this Plan relating to subscriptions in the Offering the term "Associate" does not include any NonTax-Qualified Employee Stock Benefit Plan or any Tax-Qualified Employee Stock Benefit Plan in which a Person has a substantial beneficial interest or serves as a trustee or in a similar fiduciary capacity, and except that for purposes of aggregating total shares that may be held by Officers and Directors the term "Associate" does not include any Tax-Qualified Employee Stock Benefit Plan, and (iii) any relative or spouse of such Person, or any relative of such spouse, who has the same home as such Person or who is a Director or Officer of Mid-Tier Holding Company, the Bank or the Holding Company, or any of their parents or subsidiaries.

BANK - Brookline Savings Bank

BANK MERGER - The merger of Interim with the Bank as set forth in this Plan.

CODE - The Internal Revenue Code of 1986, as amended.

COMMUNITY - The Massachusetts Counties of Middlesex, Norfolk and Suffolk.

COMMUNITY OFFERING - The offering for sale to certain members of the general public directly by the Holding Company of shares not subscribed for in the Subscription Offering.

CONTROL - (including the terms "controlled by", "controlling" and "under common control with") means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ownership of voting securities, by contract or otherwise.

CONVERSION - The conversion and reorganization of the Mutual Holding Company to stock form pursuant to this Plan, and all steps incident or necessary thereto, include the Exchange Offer and the Offering.

DEPOSIT ACCOUNT - The term Deposit Account means any withdrawable account as defined in Section 561.42 of the Rules and Regulations of the OTS, and shall include all demand deposit accounts and certificates of deposit.

DIRECTOR - A member of the Board of Directors of the Bank, Mid-Tier Holding Company, the Holding Company or the Mutual Holding Company, as appropriate in the context.

ELIGIBLE ACCOUNT HOLDER - Any Person holding a Qualifying Deposit on the Eligibility Record Date for purposes of determining subscription rights and establishing subaccount balances in the Liquidation Account.

ELIGIBILITY RECORD DATE - The date for determining Eligible Account Holders of the Bank, which is December 31, 2000.

EMPLOYEES - All Persons who are employed by the Bank, Mid-Tier Holding Company or the Mutual Holding Company.

EMPLOYEE PLANS - Any Tax-Qualified Employee Stock Benefit Plan of the Bank or the Holding Company, including any ESOP and 401(k) Plan.

ESOP - An Employee Stock Ownership Plan and related trust established by the Bank or the Holding Company.

EXCHANGE OFFER - The offer of Holding Company Common Stock to Minority Stockholders in exchange for Minority Shares.

EXCHANGE RATIO - The rate at which shares of Holding Company Common Stock are exchanged for Minority Shares upon consummation of the Conversion. The Exchange Ratio shall be determined as of the closing of the Conversion and shall be the rate that will result in the Minority Stockholders owning in the aggregate the same percentage of the outstanding shares of Holding Company Common Stock immediately upon completion of the Conversion (without giving effect to any shares purchased in the Offering and any cash issued in lieu of fractional shares), as the percentage of Mid-Tier Holding Company common stock owned by them in the aggregate immediately prior to the consummation of the Conversion.

EXCHANGE SHARES - Shares of Holding Company Common Stock issued to Minority Stockholders in exchange for Minority Shares.

FDIC - The Federal Deposit Insurance Corporation.

HOLDING COMPANY - The Delaware corporation formed for the purpose of acquiring all of the shares of capital stock of the Bank in connection with the Conversion. The Holding Company will be the successor to Mid-Tier Holding Company. Shares of Holding Company Common Stock will be issued in the Conversion to Participants and others in the Conversion.

HOLDING COMPANY COMMON STOCK - The common stock, par value $.01 per share, of the Holding Company.

INDEPENDENT APPRAISER - The appraiser retained by the Mutual Holding Company and the Bank to prepare an appraisal of the pro forma market value of the Holding Company Common Stock issued in the Conversion.

INTERIM - The interim federal savings bank subsidiary of the Holding Company established to effect the Conversion.

LIQUIDATION ACCOUNT - One or more accounts established in accordance with 12 C.F.R. 563b.3(f) and OTS policy.

MAJORITY OWNERSHIP INTEREST - The percentage of common stock of Mid-Tier Holding Company owned by the Mutual Holding Company immediately prior to the completion of the Conversion.

MEMBER - Any Person or entity who qualifies as a member of the Mutual Holding Company pursuant to its charter and bylaws.

MHC MERGER - The conversion of the Mutual Holding Company into an interim federal stock savings bank and subsequent merger with and into the Bank as set forth in this Plan.

MID-TIER HOLDING COMPANY - Brookline Bancorp, Inc., the Federal holding company that owns 100% of the Bank's common stock, and any successor thereto.

MID-TIER MERGER - The conversion of Mid-Tier Holding Company into an interim federal stock savings bank and subsequent merger with and into the Bank as set forth in this Plan.

MINORITY SHARE(S) - Any outstanding common stock of the Mid-Tier Holding Company, or shares of common stock of the Mid-Tier Holding Company issuable upon the exercise of options or grant of stock awards, in each case held by persons other than the Mutual Holding Company.

MINORITY STOCKHOLDER - Any owner of Minority Shares.

MUTUAL HOLDING COMPANY - Brookline Bancorp, MHC, the mutual holding company of the Bank.

OTS - The Office of Thrift Supervision of the Department of the Treasury or any successor thereto.

OFFERING - The offering for sale, pursuant to this Plan, of Holding Company Common Stock in a Subscription Offering, Community Offering, and Syndicated Community Offering (or underwritten public offering), as the case may be. The term "Offering" does not include the Holding Company Common Stock issued in exchange for Minority Shares pursuant to this Plan.

OFFERING RANGE - The number of shares of Holding Company Stock offered for sale in the Offering multiplied by the Subscription Price. The Offering Range shall be equal to the Appraised Value Range multiplied by the Majority Ownership Percentage.

OFFICER - An executive officer of the Bank, the Mid-Tier Holding Company, the Holding Company or the Mutual Holding Company as appropriate in the context, which includes the Chief Executive Officer, President, Senior Vice Presidents, Executive Vice President in charge of principal business functions, Secretary and Controller and any Person performing functions similar to those performed by the foregoing persons.

ORDER FORM - Any form (together with any cover letter and/or certifications or acknowledgments), sent by the Bank to any Participant or Person containing among other things a description of the alternatives available to such Person under the Plan and by which any such Person may make elections regarding purchases of Holding Company Common Stock in the Subscription and Community Offerings.

OTHER MEMBER - Any Member on the Voting Record Date who is not an Eligible Account Holder or Supplemental Eligible Account Holder.

PARTICIPANT - Any Eligible Account Holder, Employee Plan, Supplemental Eligible Account Holder, or Other Member.

PERSON - An individual, a corporation, a partnership, an association, a joint stock company, a trust (including Individual Retirement Accounts and KEOGH Accounts), any unincorporated organization, a government or political subdivision thereof or any other entity.

PLAN - This Plan of Conversion and Reorganization of the Mutual Holding Company as it exists on the date hereof and as it may hereafter be amended in accordance with its terms.

PROSPECTUS - The one or more documents used in offering the Holding Company Common Stock in the Offering and the Exchange Offer.

QUALIFYING DEPOSIT - The aggregate balance of all Deposit Accounts in the Bank of (i) an Eligible Account Holder at the close of business on the Eligibility Record Date, provided such aggregate balance is not less than $50, and (ii) a Supplemental Eligible Account Holder at the close of business on the Supplemental Eligibility Record Date, provided such aggregate balance is not less than $50.

RESIDENT - Any Person who occupies a dwelling within the Community, has a present intent to remain within the Community for a period of time, and manifests the genuineness of that intent by establishing an ongoing physical presence within the Community together with an indication that such presence within the Community is something other than merely transitory in nature. To the extent the Person is a corporation or other business entity, the principal place of business or headquarters shall be in the Community. To the extent a Person is a personal benefit plan, the circumstances of the beneficiary shall apply with respect to this definition. In the case of all other benefit plans, circumstances of the trustee shall be examined for purposes of this definition. The Bank may utilize deposit or loan records or such other evidence provided to it to make a determination as to whether a Person is a resident. In all cases, however, such a determination shall be in the sole discretion of the Mutual Holding Company and the Bank. A Participant or Person must be a "Resident" for purposes of determining whether such Person "resides" or is "residing" in the Community as such term is used in this Plan.

SEC - The Securities and Exchange Commission.

SPECIAL MEETING OF MEMBERS - The special meeting of Members of the Mutual Holding Company and any adjournments thereof held to consider and vote upon this Plan.

SPECIAL MEETING OF STOCKHOLDERS - The special meeting of stockholders of the Mid-Tier Holding Company and any adjournments thereof held to consider and vote upon the Plan.

SUBSCRIPTION OFFERING - The offering of Subscription Shares to Participants.

SUBSCRIPTION PRICE - The price per Subscription Share to be paid by Participants in the Subscription Offering and by Persons in the Community Offering and any Syndicated Community Offering. The Subscription Price will be determined by the Board of Directors of the Mutual Holding Company and fixed prior to the commencement of the Subscription Offering.

SUBSCRIPTION SHARES - Shares of Holding Company Common Stock issued in the Subscription Offering. Subscription Shares do not include Exchange Shares.

SUPPLEMENTAL ELIGIBLE ACCOUNT HOLDER - Any Person, other than Directors and Officers of the Bank, the Mid-Tier Holding Company or the Mutual Holding Company and their Associates, holding a Qualifying Deposit on the Supplemental Eligibility Record Date, who is not an Eligible Account Holder.

SUPPLEMENTAL ELIGIBILITY RECORD DATE - The date for determining Supplemental Eligible Account Holders, which shall be the last day of the calendar quarter preceding OTS approval of the application for conversion.

SYNDICATED COMMUNITY OFFERING - The offering of Holding Company Common Stock following the Subscription and Community Offerings through a syndicate of broker-dealers.

TAX-QUALIFIED EMPLOYEE STOCK BENEFIT PLAN - Any defined benefit plan or defined contribution plan, such as an employee stock ownership plan, stock bonus plan, profit-sharing plan or other plan, which, with its related trust, meets the requirements to be "qualified" under

Section 401 of the Internal Revenue Code. The Bank may make scheduled discretionary contributions to a tax-qualified employee stock benefit plan, PROVIDED such contributions do not cause the Bank to fail to meet its regulatory capital requirement. A "NonTax-Qualified Employee Stock Benefit Plan" is any defined benefit plan or defined contribution plan which is not so qualified.

VOTING MEMBER - Any Person who at the close of business on the Voting Record Date is entitled to vote as a Member of the Mutual Holding Company pursuant to its charter and bylaws.

VOTING RECORD DATE - The date fixed by the Directors in accordance with OTS regulations for determining eligibility to vote at the Special Meeting of Members and/or the Special Meeting of Stockholders.

3. PROCEDURES FOR CONVERSION

A. After approval of the Plan by the Boards of Directors of the Bank, the Mid-Tier Holding Company and the Mutual Holding Company, the Plan together with all other requisite material shall be submitted to the OTS for its approval. Notice of the adoption of the Plan by the Boards of Directors of the Bank and the Mutual Holding Company and the submission of the Plan to the OTS for its approval will be published in a newspaper having general circulation in each community in which an office of the Bank is located, and copies of the Plan will be made available at each office of the Bank for inspection by the Members. Upon receipt of notice from the OTS to do so, the Mutual Holding Company also will publish a notice of the filing with the OTS of an application to convert in accordance with the provisions of this Plan.

B. Promptly following approval by the OTS, the Plan will be submitted to a vote of (i) the Voting Members at the Special Meeting of Members, and (ii) the Stockholders of the Mid-Tier Holding Company at the Special Meeting of Stockholders. The Mutual Holding Company will mail to all Members as of the Voting Record Date, at their last known address appearing on the records of the Bank at that date, a proxy statement in either long or summary form describing the Plan which will be presented to a vote of the Members at the Special Meeting of Members. The Mid-Tier Holding Company also will mail to all stockholders as of the Voting Record Date, a proxy statement describing the Plan and the Conversion, which will be presented to a vote of stockholders at the Special Meeting of Stockholders. The Holding Company will also mail to all Participants either a Prospectus and Order Form for the purchase of Subscription Shares or a letter informing them of their right to receive a Prospectus and Order Form and a postage prepaid card to request such materials, subject to other provisions of this Plan. In addition, all Participants will receive, or be given the opportunity to request by either returning a postage prepaid card which may be distributed with the proxy statement or by letter addressed to the Bank's Secretary, a copy of the Plan as well as the certificate of incorporation or bylaws of the Holding Company. Upon approval of the Plan by (i) a majority of the total number of votes entitled to be cast by the Voting Members, (ii) at least two-thirds of the outstanding common stock of the Mid-Tier Holding Company, and (iii) if required by the OTS, a majority vote of Minority Stockholders present in person or by proxy, the Mutual Holding Company, the Holding Company and the Bank will take all other necessary steps pursuant to applicable laws and regulations to consummate the Conversion and Offering. The Conversion must be completed within 24 months of the approval of the Plan by the Voting Members, unless a longer time period is permitted by governing laws and regulations.

C. The Conversion will be effected as follows or in any other manner selected by the Board of Directors of the Mutual Holding Company which is consistent with the purposes of this Plan and applicable laws and regulations. The choice of which method to use to effect the Conversion will be made by the Board of Directors of the Mutual Holding Company immediately prior to the closing of the Conversion. Each of the steps shall be deemed to occur in the order set forth below or in such order as is necessary to consummate the Conversion pursuant to the Plan, the intent of the Boards of Directors of the Mutual Holding Company, the Mid-Tier Holding Company and the Bank, and OTS regulations. Approval of the Plan by the Members and by the stockholders of the Mid-Tier Holding Company shall also constitute approval of each of the transactions below that are necessary to implement the Plan.

(1) The Mid-Tier Holding Company will merge with and into the Bank (the "Mid-Tier Merger") with the Bank as the resulting entity, pursuant to the Agreement of Merger attached hereto as Exhibit A, whereby the Mid-Tier Holding Company stockholders will constructively receive shares of Bank common stock in exchange for their Mid-Tier Holding Company common stock.

(2) The Mutual Holding Company will merge with and into the Bank (the "MHC Merger") pursuant to the Agreement of Merger attached hereto as Exhibit B between the Mutual Holding Company and the Bank, whereby the shares of common stock of the Bank constructively held by the Mutual Holding Company will be canceled and each Eligible Account Holder and Supplemental Eligible Account Holder will receive an interest in a Liquidation Account of the Bank in exchange for such person's interest in the Mutual Holding Company.

(3) The Bank will establish the Holding Company as a first-tier stock holding company subsidiary.

(4) Immediately after the MHC Merger, the Holding Company will charter Interim as a wholly-owned subsidiary.

(5) Immediately after the formation of Interim, Interim will merge with and into the Bank with the Bank as the surviving entity (the "Bank Merger") pursuant to the Agreement of Merger attached hereto as Exhibit C between the Bank and Interim, whereby the Holding Company will become the sole stockholder of the Bank. Constructive shareholders of the Bank (i.e., Minority Stockholders) will exchange the shares of Bank common stock that they constructively received in the Mid-Tier Merger for Holding Company Common Stock.

(6) Contemporaneously with the Bank Merger, the Holding Company will offer for sale its Common Stock in the Offering.

D. As part of the Conversion, each Minority Share shall automatically, without further action of the holder thereof, be converted into and become the right to receive Holding Company Common Stock based upon the Exchange Ratio. The basis for exchange of Minority Shares for Holding Company Common Stock shall be fair and reasonable. Options to purchase shares of Mid-

Tier Holding Company common stock which are outstanding immediately prior to the consummation of the Conversion shall be converted into options to purchase shares of Holding Company Common Stock, with the number of shares subject to the option and the exercise price per share to be adjusted based upon the Exchange Ratio so that the aggregate exercise price remains unchanged, and with the duration of the option remaining unchanged.

E. Concurrently with the filing of the Conversion application with the OTS, the Holding Company shall also seek to register the Holding Company Common Stock with the SEC and any appropriate state securities authorities. In addition, the Mid-Tier Holding Company shall prepare preliminary proxy materials as well as other applications and information for review by the SEC and the OTS in connection with the solicitation of stockholder approval of the Plan.

F. The Certificate of Incorporation of the Holding Company (the "Certificate") shall read substantially in the form of Exhibit D.

G. The home office and branch offices of the Bank shall be unaffected by the Conversion. The executive offices of the Holding Company shall be located at the current offices of the Mutual Holding Company.

4. HOLDING COMPANY APPLICATIONS AND APPROVALS

The Board of Directors of the Mid-Tier Holding Company, the Bank and the Mutual Holding Company will take all necessary steps to convert the Mutual Holding Company to stock form, form the Holding Company and complete the Offering. The Holding Company shall make timely applications for any requisite regulatory approvals, including an Application on Form AC and a Holding Company Application on Form H-(e)1 or Form H-(e)1-S, to be filed with the OTS and a Registration Statement to be filed with the SEC.

5. SALE OF SUBSCRIPTION SHARES

The Subscription Shares will be offered simultaneously in the Subscription Offering to the Participants in the respective priorities set forth in this Plan. Subscription Shares will be available for purchase only in the priorities set forth in this Plan. The Subscription Offering may begin as early as the mailing of the proxy statement for the Special Meeting of Members. The Holding Company Common Stock will not be insured by the FDIC. The Bank will not knowingly lend funds or otherwise extend credit to any Person to purchase shares of Holding Company Common Stock.

Any Subscription Shares not subscribed for in the Subscription Offering may be offered for sale in the Community Offering. The Subscription Offering may begin prior to the Special Meeting of Members and, in that event, the Community Offering may also begin prior to the Special Meeting of Members. The offer and sale of Holding Company Common Stock prior to the Special Meeting of Members will, however, be conditioned upon approval of the Plan by the Voting Members and stockholders of the Mid-Tier Holding Company.

If feasible, any shares of Holding Company Common Stock remaining after the Subscription and Community Offerings, will be offered for sale in a Syndicated Community Offering or underwritten public offering in a manner that will achieve the widest distribution of the Holding

Company Common Stock. The sale of all Holding Company Common Stock purchased in the Subscription and Community Offerings will be consummated simultaneously with the sale of any Holding Company Common Stock in the Syndicated Community Offering or underwritten public offering.

6. PURCHASE PRICE AND NUMBER OF SUBSCRIPTION SHARES

The total number of shares (or a range thereof) of Holding Company Common Stock to be offered for sale in the Offering will be determined jointly by the Boards of Directors of the Mid-Tier Holding Company and the Holding Company immediately prior to the commencement of the Subscription and Community Offerings, and will be equal to the Offering Range divided by the Subscription Price. The Offering Range will be equal to the Appraised Value Range multiplied by the Majority Ownership Interest. The estimated pro forma consolidated market value of the Holding Company will be subject to adjustment within the Appraised Value Range if necessitated by market or financial conditions, with the approval of the OTS, if necessary, and the maximum of the Appraised Value Range may be increased by up to 15% subsequent to the commencement of the Subscription and Community Offerings to reflect changes in market and financial conditions. The number of shares of Holding Company Common Stock issued in the Conversion will be equal to the estimated pro forma consolidated market value of the Holding Company, as may be amended, divided by the Subscription Price, and the number of shares of Holding Company Common Stock sold in the Offering will be equal to the product of (i) the estimated pro forma consolidated market value of the Holding Company, as may be amended, divided by the Subscription Price, and (ii) the Majority Ownership Interest.

In the event that the Subscription Price multiplied by the number of shares of Holding Company Common Stock to be issued in the Conversion is below the minimum of the Appraised Value Range, or materially above the maximum of the Appraised Value Range, a resolicitation of purchasers may be required, PROVIDED that up to a 15% increase above the maximum of the Appraised Value Range will not be deemed material so as to require a resolicitation. Any such resolicitation shall be effected in such manner and within such time as the Bank and the Mutual Holding Company shall establish, with the approval of the OTS if required.

Notwithstanding the foregoing, shares of Holding Company Common Stock will not be issued unless, prior to the consummation of the Conversion, the Independent Appraiser confirms to the Bank, the Mutual Holding Company, the Holding Company and to the OTS that, to the best knowledge of the Independent Appraiser, nothing of a material nature has occurred which, taking into account all relevant factors, would cause the Independent Appraiser to conclude that the number of shares of Holding Company Common Stock issued in the Conversion multiplied by the Subscription Price is incompatible with its estimate of the aggregate pro forma consolidated market value of the Holding Company. An increase in the aggregate value of the Holding Company Common Stock by up to 15% above the maximum of the Appraised Value Range, would not be deemed to be material. If such confirmation is not received, the Holding Company may cancel the Offering, extend the Conversion, establish a new Subscription Price and/or Appraised Value Range and reopen or hold a new Offering, or take such other action as the OTS may permit.

The Holding Company Common Stock to be issued in the Conversion shall be fully paid and nonassessable.

7. RETENTION OF CONVERSION PROCEEDS BY THE HOLDING COMPANY

The Holding Company will apply to the OTS to retain up to 50% of the proceeds of the Offering. The Holding Company believes that the Offering proceeds will provide economic strength to the Holding Company and the Bank in a highly competitive financial services industry, and would facilitate the possible expansion through acquisitions of other financial institutions, possible diversification into other related businesses and for other business and investment purposes, including the possible payment of dividends and future repurchases of the Holding Company Common Stock.

8. SUBSCRIPTION RIGHTS OF ELIGIBLE ACCOUNT HOLDERS (FIRST PRIORITY)

A. Each Eligible Account Holder shall receive, without payment, nontransferable subscription rights to subscribe in the Subscription Offering for a number of shares equal to up to the greater of 200,000 shares, .10% of the total number of shares of Holding Company Common Stock issued in the Offering, or fifteen times the product (rounded down to the next whole number) obtained by multiplying the total number of shares of Holding Company Common Stock issued in the Offering by a fraction, the numerator of which is the amount of the Eligible Account Holder's Qualifying Deposit and the denominator is the total amount of Qualifying Deposits of all Eligible Account Holders, in each case on the Eligibility Record Date, subject to the provisions of Section 14.

B. In the event that Eligible Account Holders exercise subscription rights for a number of Subscription Shares in excess of the total number of such shares eligible for subscription, the Subscription Shares shall be allocated among the subscribing Eligible Account Holders so as to permit each subscribing Eligible Account Holder to purchase a number of shares sufficient to make his or her total allocation of Subscription Shares equal to the lesser of 100 shares or the number of shares for which such Eligible Account Holder has subscribed. Any remaining shares will be allocated among the subscribing Eligible Account Holders whose subscriptions remain unsatisfied in the proportion that the amount of the Qualifying Deposit of each Eligible Account Holder whose subscription remains unsatisfied bears to the total amount of the Qualifying Deposits of all Eligible Account Holders whose subscriptions remain unsatisfied. If the amount so allocated exceeds the amount subscribed for by any one or more Eligible Account Holders, the excess shall be reallocated (one or more times as necessary) among those Eligible Account Holders whose subscriptions are still not fully satisfied on the same basis until all available shares have been allocated.

C. Subscription rights of Directors, Officers and their Associates as Eligible Account Holders which are based on deposits made by such Persons during the twelve (12) months preceding the Eligibility Record Date shall be subordinated to the subscription rights of all other Eligible Account Holders.

9. SUBSCRIPTION RIGHTS OF EMPLOYEE PLANS (SECOND PRIORITY)

If Subscription Shares remain available after all subscriptions of Eligible Account Holders have been satisfied, the Employee Plans of the Holding Company and the Bank shall receive, without payment, subscription rights to purchase in the aggregate up to 10% of the total number of shares of Holding Company Common Stock issued in the Offering. The Employee Plans may purchase any shares of Holding Company Common Stock to be issued in the Offering as a result of an increase in the maximum of the Appraised Value Range after commencement of the Subscription Offering and prior to completion of the Conversion, notwithstanding the subscription rights of Eligible Account Holders. Consistent with applicable laws and regulations and practices and policies of the OTS, the Employee Plans may use funds contributed by the Holding Company or the Bank and/or borrowed from an independent financial institution to exercise such subscription rights, and the Holding Company and the Bank may make scheduled discretionary contributions thereto, provided that such contributions do not cause the Holding Company or the Bank to fail to meet any applicable regulatory capital requirements. The Employee Plans shall not be deemed to be Associates or Affiliates of or Persons Acting in Concert with any Director or Officer of the Holding Company or the Bank.

10. SUBSCRIPTION RIGHTS OF SUPPLEMENTAL ELIGIBLE ACCOUNT HOLDERS (THIRD PRIORITY)

A. Each Supplemental Eligible Account Holder shall receive, without payment, nontransferable subscription rights to subscribe in the Subscription Offering for a number of shares equal to up to the greater of 200,000 shares, .10% of the total number of shares of Holding Company Common Stock issued in the Offering, or fifteen times the product (rounded down to the next whole number) obtained by multiplying the total number of shares of Holding Company Common Stock issued in the Offering by a fraction, the numerator of which is the amount of the Supplemental Eligible Account Holder's Qualifying Deposit and the denominator is the total amount of Qualifying Deposits of all Supplemental Eligible Account Holders, in each case on the Supplemental Eligibility Record Date, subject to the availability of sufficient shares after filling in full all subscription orders of the Eligible Account Holders and Employee Plans and to the purchase limitations specified in Section 14.

B. In the event that Supplemental Eligible Account Holders exercise subscription rights for a number of Subscription Shares in excess of the total number of such shares eligible for subscription, the Subscription Shares shall be allocated among the subscribing Supplemental Eligible Account Holders so as to permit each such subscribing Supplemental Eligible Account Holder, to the extent possible, to purchase a number of shares sufficient to make his or her total allocation of Subscription Shares equal to the lesser of 100 shares or the number of shares for which each such Supplemental Eligible Account Holder has subscribed. Any remaining shares will be allocated among the subscribing Supplemental Eligible Account Holders whose subscriptions remain unsatisfied in the proportion that the amount of the Qualifying Deposit of each such Supplemental Eligible Account Holder bears to the total amount of the Qualifying Deposits of all Supplemental Eligible Account Holders whose subscriptions remain unsatisfied. If the amount so allocated exceeds the amount subscribed for by any one or more Supplemental Eligible Account Holders, the excess shall be reallocated (one or more times as necessary) among those Supplemental Eligible

Account Holders whose subscriptions are still not fully satisfied on the same basis until all available shares have been allocated or all subscriptions satisfied.

11. SUBSCRIPTION RIGHTS OF OTHER MEMBERS (FOURTH PRIORITY)

A. Each Other Member shall receive, without payment, nontransferable subscription rights to subscribe in the Subscription Offering for a number of Subscription Shares equal to up to the greater of 200,000 shares, or .10% of the total number of shares of Holding Company Common Stock issued in the Offering, subject to the availability of sufficient shares after filling in full all subscription orders of Eligible Account Holders, Employee Plans and Supplemental Eligible Account Holders and to the purchase limitations specified in Section 14.

B. In the event that such Other Members subscribe for a number of Subscription Shares which, when added to the Subscription Shares subscribed for by the Eligible Account Holders, Employee Plans and Supplemental Eligible Account Holders, is in excess of the total number of Subscription Shares to be issued, the subscriptions of such Other Members will be allocated to Other Members in proportion to the amounts of their relative subscriptions.

12. COMMUNITY OFFERING

If less than the total number of shares of Holding Company Common Stock to be sold in the Offering are subscribed for in the Subscription Offering, shares remaining unsubscribed for may be made available for purchase in the Community Offering to members of the general public. In the Community Offering, any Person may purchase up to 200,000 shares, subject to the overall purchase limitations specified in Section 14. The shares may be made available in the Community Offering through a direct community marketing program which may provide for a broker, dealer, consultant or investment banking firm experienced and expert in the sale of savings institutions securities. Such entities may be compensated on a fixed fee basis or on a commission basis, or a combination thereof. In the event orders for Holding Company Common Stock in the Community Offering exceed the number of shares available for sale, shares may be allocated (to the extent shares remain available) first to cover orders of Minority Stockholders as of the Voting Record Date, next to cover orders of natural persons residing in the Community, and thereafter to cover orders of other members of the general public. In the event orders for Holding Company Common Stock in any of these categories exceed the number of shares available for sale, shares any be allocated on a pro rata basis within a category based on the amount of the respective orders. The Holding Company shall make the distribution of the Holding Company Common Stock to be sold in the Community Offering in such a manner as to promote a wide distribution of the Holding Company Common Stock. The Holding Company reserves the right to reject any or all orders, in whole or in part, which are received in the Community Offering.

13. SYNDICATED COMMUNITY OFFERING

If feasible, the Board of Directors may determine to offer for sale in a Syndicated Community Offering shares of Holding Company Common Stock not purchased in the Subscription and Community Offerings, subject to such terms, conditions and procedures as may be determined by the Holding Company, in a manner that will achieve the widest distribution of the Holding Company

Common Stock, subject to the right of the Bank to accept or reject in whole or in part any subscriptions in the Syndicated Community Offering. In the Syndicated Community Offering, any Person may purchase up to 200,000 shares, subject to the maximum purchase limitations specified in Section 14. Provided the Subscription Offering has begun, the Bank may begin the Syndicated Community Offering at any time after the mailing to the Members of the proxy statement to be used in connection with the Special Meeting of Members, PROVIDED that the completion of the offer and sale of Holding Company Common Stock in the Conversion shall be conditioned upon the approval of this Plan by the Voting Members. If the Syndicated Community Offering does not begin pursuant to the provisions of the preceding sentence, the Syndicated Community Offering will begin as soon as practicable following the date upon which the Subscription and Community Offerings terminate.

Alternatively, if a Syndicated Community Offering is not held, the Bank shall have the right to sell any shares of Holding Company Common Stock remaining following the Subscription and Community Offerings in an underwritten firm commitment public offering. The provisions of Section 14 shall not be applicable to sales to underwriters for purposes of such an offering but shall be applicable to the sales by the underwriters to the public. The price to be paid by the underwriters in such an offering shall be equal to the Subscription Price less an underwriting discount to be negotiated among such underwriters and the Bank, which will in no event exceed an amount deemed to be acceptable by the OTS.

If for any reason a Syndicated Community Offering or an underwritten firm commitment public offering of shares of Holding Company Common Stock not sold in the Subscription and Community Offerings cannot be effected, or in the event that any insignificant residue of shares of Holding Company Common Stock is not sold in the Subscription and Community Offerings or in the Syndicated Community or underwritten firm commitment public offering, other arrangements will be made for the disposition of unsubscribed shares by the Bank, if possible. Such other purchase arrangements will be subject to the approval of the OTS.

14. LIMITATIONS ON PURCHASES

The following limitations shall apply to all purchases of shares of Holding Company Common Stock in the Conversion:

A. The maximum number of shares of Holding Company Common Stock which may be subscribed for or purchased in all categories in the Offering by any Person or Participant together with any Associate or group of Persons Acting in Concert shall not exceed 500,000 shares of Holding Company Common Stock, except for the Employee Plans which may subscribe for up to 10% of the Holding Company Common Stock issued in the Offering (including shares issued in the event of an increase in the maximum of the Offering Range of up to 15%).

B. The maximum number of shares of Holding Company Common Stock which may be purchased in all categories of the Offering by Officers and Directors and their Associates in the aggregate, when combined with Exchange Shares received by such persons, shall not exceed 25% of the shares of Holding Company Common Stock issued in the Conversion.

C. A minimum of 25 shares of Holding Company Common Stock must be purchased by each Person purchasing shares in the Offering to the extent those shares are available; PROVIDED, HOWEVER, that in the event the minimum number of shares of Holding Company Common Stock purchased times the price per share exceeds $500, then such minimum purchase requirement shall be reduced to such number of shares which when multiplied by the price per share shall not exceed $500, as determined by the Board.

D. The maximum number of shares of Holding Company Common Stock which may be subscribed for or purchased in all categories of the Offering by any Person or Participant together with any Associate or group of Persons Acting in Concert, combined with Exchange Shares received by any such Person or Participant together with any Associate or group of Persons Acting in Concert, shall not exceed 5% of the shares of Holding Company Common Stock outstanding immediately upon completion of the Conversion, except for the Employee Plans which may subscribe for up to 10% of the shares of Holding Company Common Stock issued in the Offering (including shares issued in the event of an increase in the maximum of the Offering Range of 15%).

If the number of shares of Holding Company Common Stock otherwise allocable pursuant to Sections 8 through 13, inclusive, to any Person or that Person's Associates would be in excess of the maximum number of shares permitted as set forth above, the number of shares of Holding Company Common Stock allocated to each group consisting of a Person and that Person's Associates shall be reduced so that the aggregate allocation to that Person and his or her Associates complies with the above limits.

Depending upon market or financial conditions, the Board of Directors of the Holding Company, with the approval of the OTS and without further approval of the Members, may decrease or further increase the purchase limitations in this Plan, PROVIDED that the maximum purchase limitations may not be increased to a percentage in excess of 5% of the shares issued in the Conversion except as provided below. If the Holding Company increases the maximum purchase limitations, the Holding Company is only required to resolicit Persons who subscribed in the Subscription Offering for the maximum purchase amount and may, in the sole discretion of the Holding Company resolicit certain other large subscribers. In the event that the maximum purchase limitation is increased to 5% of the shares issued in the Conversion, such limitation may be further increased to 9.99%, PROVIDED that orders for Holding Company Common Stock exceeding 5% of the shares of Holding Company Common Stock issued in the Conversion shall not exceed in the aggregate 10% of the total shares of Holding Company Common Stock issued in the Conversion. Requests to purchase additional shares of the Holding Company Common Stock in the event that the purchase limitation is so increased will be determined by the Board of Directors of the Holding Company in its sole discretion. In the event of an increase in the total number of shares offered in the Offering due to an increase in the maximum of the Offering Range of up to 15% (the "Adjusted Maximum"), the additional shares will be used in the following order of priority: (i) to fill the Employee Plans' subscription to the Adjusted Maximum; (ii) in the event that there is an oversubscription at the Eligible Account Holder, Supplemental Eligible Account Holder or Other Member levels, to fill unfulfilled subscriptions of such subscribers according to such respective priorities; and (iii) to fill unfulfilled subscriptions in the Community Offering with preference given first to Minority Stockholders as of the Voting Record Date and then to natural persons residing in the Community.

For purposes of this Section 14, the Directors of the Bank, the Mid-Tier Holding Company and the Holding Company shall not be deemed to be Associates or a group affiliated with each other or otherwise Acting in Concert solely as a result of their being Directors of the Bank, the Mid-Tier Holding Company, the Mutual Holding Company or the Holding Company.

Each Person purchasing Holding Company Common Stock in the Conversion shall be deemed to confirm that such purchase does not conflict with the above purchase limitations contained in this Plan.

15. PAYMENT FOR HOLDING COMPANY COMMON STOCK

All payments for Holding Company Common Stock purchased in the Subscription and Community Offerings must be delivered in full to the Holding Company, together with a properly completed and executed Order Form, on or prior to the expiration date of the Offering; PROVIDED, HOWEVER, that if the Employee Plans subscribe for shares during the Subscription Offering, such plans will not be required to pay for the shares at the time they subscribe but rather may pay for such shares of Holding Company Common Stock subscribed for by such plans at the Subscription Price upon consummation of the Conversion. Notwithstanding the foregoing, the Holding Company shall have the right, in its sole discretion, to permit institutional investors to submit contractually irrevocable orders in the Offering and to thereafter submit payment by wire transfer for the Holding Company Common Stock for which they are subscribing in the Offering at any time prior to 48 hours before the completion of the Conversion, unless such 48 hour period is waived by the Holding Company in its sole discretion.

Payment for Holding Company Common Stock subscribed for shall be made either by check, money order or bank draft. Alternatively, subscribers in the Subscription and Community Offerings may pay for the shares for which they have subscribed by authorizing the Bank on the Order Form to make a withdrawal from the types of Deposit Accounts at the Bank indicated on the Order Form in an amount equal to the aggregate Subscription Price of such shares. Such authorized withdrawal, whether from a savings passbook or certificate account, shall be without penalty as to premature withdrawal. If the authorized withdrawal is from a certificate account, and the remaining balance does not meet the applicable minimum balance requirement, the certificate shall be canceled at the time of withdrawal, without penalty, and the remaining balance will earn interest at the Bank's passbook rate. Funds for which a withdrawal is authorized will remain in the subscriber's Deposit Account but may not be used by the subscriber during the Offering. Thereafter, the withdrawal will be given effect only to the extent necessary to satisfy the subscription (to the extent it can be filled) at the Subscription Price per share. Interest will continue to be earned on any amounts authorized for withdrawal until such withdrawal is given effect. Interest will be paid by the Bank at the passbook rate on payments for Holding Company Common Stock received by check. Such interest will be paid from the date payment is received by the Bank until consummation or termination of the Conversion. If for any reason the Conversion is not consummated, all payments made by subscribers in the Subscription and Community Offerings will be refunded to them with interest. In case of amounts authorized for withdrawal from Deposit Accounts, refunds will be made by canceling the authorization for withdrawal. The Bank is prohibited by regulation from knowingly making any loans or granting any lines of credit for the purchase of stock in the Conversion, and therefore, will not do so.

16. MANNER OF EXERCISING SUBSCRIPTION RIGHTS THROUGH ORDER FORMS

As soon as practicable after the Prospectus prepared by the Holding Company and Bank has been declared effective by the SEC, Order Forms will be distributed to the Eligible Account Holders, Employee Plans, Supplemental Eligible Account Holders and Other Members at their last known addresses as of the most recent eligibility date that appears on the records of the Bank for the purpose of subscribing for shares of Holding Company Common Stock in the Subscription Offering and will be made available for use by Persons in the Community Offering. Notwithstanding the foregoing, the Bank may elect to send Order Forms only to those Persons who request them after receipt of such notice in a form approved by the OTS and which is adequate to apprise the Eligible Account Holders, Employee Plans, Supplemental Eligible Account Holders and Other Members of the pendency of the Subscription Offering. Such notice may be included with the proxy statement for the Special Meeting of Members and the proxy statement for the Special Meeting of Stockholders, and may also be included in the notice of the pendency of the Conversion and the Special Meeting of Members sent to all Eligible Account Holders in accordance with regulations of the OTS.

Each Order Form will be preceded or accompanied by a Prospectus describing the Holding Company, the Bank, the Holding Company Common Stock and the Offering. Each Order Form will contain, among other things, the following:

A. A specified date by which all Order Forms must be received by the Holding Company, which date shall be not less than twenty (20), nor more than forty-five (45) days, following the date on which the Order Forms are mailed by the Holding Company, and which date will constitute the termination of the Subscription Offering;

B. The Subscription Price per share for shares of Holding Company Common Stock to be sold in the Offering;

C. A description of the minimum and maximum number of Subscription Shares which may be subscribed for pursuant to the exercise of subscription rights or otherwise purchased in the Community Offering;

D. Instructions as to how the recipient of the Order Form is to indicate thereon the number of Subscription Shares for which such person elects to subscribe and the available alternative methods of payment therefor;

E. An acknowledgment that the recipient of the Order Form has received a final copy of the Prospectus prior to execution of the Order Form;

F. A statement to the effect that all subscription rights are nontransferable, will be void at the end of the Subscription Offering, and can only be exercised by delivering to the Holding Company within the subscription period such properly completed and executed Order Form, together with payment in the full amount of the aggregate purchase price as specified in the Order Form for the shares of Holding Company Common Stock for which the recipient elects to subscribe (or by

authorizing on the Order Form that the Bank withdraw said amount from the subscriber's Deposit Account at the Bank); and

G. A statement to the effect that the executed Order Form, once received by the Holding Company, may not be modified or amended by the subscriber without the consent of the Holding Company.

Notwithstanding the above, the Holding Company reserves the right in its sole discretion to accept or reject orders received on photocopied or facsimiled Order Forms.

17. UNDELIVERED, DEFECTIVE OR LATE ORDER FORM; INSUFFICIENT PAYMENT

In the event Order Forms (a) are not delivered and are returned to the Holding Company or the Bank by the United States Postal Service, (b) are not received by the Holding Company or are received by the Holding Company after the expiration date specified thereon, (c) are completed or executed defectively,
(d) are not accompanied by the full required payment, or, in the case of institutional investors in the Community Offering, by delivering irrevocable orders together with a legally binding commitment to pay by wire transfer the full amount of the Subscription Price prior to 48 hours before the completion of the Conversion, unless waived by the Holding Company, for the shares of Holding Company Common Stock subscribed or ordered (including cases in which Deposit Accounts from which withdrawals are authorized are insufficient to cover the amount of the required payment), or (e) are not mailed pursuant to a "no mail" order placed in effect by the Account Holder, the subscription rights of the Person to whom such rights have been granted will lapse as though such Person failed to return the completed Order Form within the time period specified thereon; PROVIDED, HOWEVER, that the Holding Company may, but will not be required to, waive any immaterial irregularity on any Order Form or require the submission of corrected Order Forms or the remittance of full payment for subscribed or ordered shares by such date as the Holding Company may specify. The interpretation of the Holding Company of terms and conditions of this Plan and of the Order Forms will be final, subject to the authority of the OTS.

18. RESIDENTS OF FOREIGN COUNTRIES AND CERTAIN STATES

The Holding Company will make reasonable efforts to comply with the securities laws of all States in the United States in which Persons entitled to subscribe for shares of Holding Company Common Stock pursuant to this Plan reside. However, no such Person will be issued subscription rights or be permitted to purchase shares of Holding Company Common Stock in the Subscription Offering if such Person resides in a foreign country; or in a State of the United States with respect to which any of the following apply: (A) a small number of Persons otherwise eligible to subscribe for shares under the Plan reside in such state; (B) the issuance of subscription rights or the offer or sale of shares of Holding Company Common Stock to such Persons would require the Holding Company under the securities laws of such state, to register as a broker, dealer, salesman or agent or to register or otherwise qualify its securities for sale in such state; (C) such registration or qualification would be impracticable for reasons of cost or otherwise.

19. ESTABLISHMENT OF LIQUIDATION ACCOUNT

The Bank shall establish at the time of the MHC Merger a Liquidation Account in an amount equal to the greater of: (a) the percentage of the outstanding shares of the common stock of the Mid-Tier Holding Company owned by the Mutual Holding Company prior to the Mid-Tier Merger multiplied by the Mid-Tier Holding Company's total stockholders' equity as reflected in the latest statement of financial condition contained in the final Prospectus utilized in the Conversion; or (b) the retained earnings of the Bank at the time the Bank underwent its mutual holding company reorganization. Following the Conversion, the Liquidation Account will be maintained by the Bank for the benefit of the Eligible Account Holders and Supplemental Eligible Account Holders who continue to maintain their Deposit Accounts at the Bank. Each Eligible Account Holder and Supplemental Eligible Account Holder shall, with respect to his Deposit Account, hold a related inchoate interest in a portion of the Liquidation Account balance, in relation to his Deposit Account balance at the Eligibility Record Date or Supplemental Eligibility Record Date, respectively, or to such balance as it may be subsequently reduced, as hereinafter provided.

In the unlikely event of a complete liquidation of the Bank (and only in such event), following all liquidation payments to creditors (including those to Account Holders to the extent of their Deposit Accounts), each Eligible Account Holder and Supplemental Eligible Account Holder shall be entitled to receive a liquidating distribution from the Liquidation Account in the amount of the then adjusted subaccount balance of his Deposit Account then held, before any liquidation distribution may be made to any holders of the Bank's capital stock. No merger, consolidation, purchase of bulk assets with assumption of Deposit Accounts and other liabilities, or similar transactions with an FDIC insured institution, in which the Bank is not the surviving institution, shall be deemed to be a complete liquidation for this purpose. In such transactions, the Liquidation Account shall be assumed by the surviving institution.

The initial subaccount balance for a Deposit Account held by an Eligible Account Holder and Supplemental Eligible Account Holder shall be determined by multiplying the opening balance in the Liquidation Account by a fraction, the numerator of which is the amount of the Qualifying Deposits of such Account Holder and the denominator of which is the total amount of all Qualifying Deposits of all Eligible Account Holders and Supplemental Eligible Account Holders. Such initial subaccount balance shall not be increased, but shall be subject to downward adjustment as described below. If, at the close of business on any December 31 annual closing date, commencing on or after the effective date of the Conversion, the deposit balance in the Deposit Account of an Eligible Account Holder or Supplemental Eligible Account Holder is less than the lesser of (i) the balance in the Deposit Account at the close of business on any other annual closing date subsequent to the Eligibility Record Date or Supplemental Eligibility Record Date, or (ii) the amount of the Qualifying Deposit in such Deposit Account as of the Eligibility Record Date or Supplemental Eligibility Record Date, the subaccount balance for such Deposit Account shall be adjusted by reducing such subaccount balance in an amount proportionate to the reduction in such deposit balance. In the event of such downward adjustment, the subaccount balance shall not be subsequently increased, notwithstanding any subsequent increase in the deposit balance of the related Deposit Account. If any such Deposit Account is closed, the related subaccount shall be reduced to zero.

The creation and maintenance of the Liquidation Account shall not operate to restrict the use or application of any of the net worth accounts of the Bank, except that the Bank shall not declare or pay a cash dividend on, or repurchase any of, its capital stock if the effect thereof would cause its net worth to be reduced below (i) the amount required for the Liquidation Account; or (ii) the minimum regulatory capital requirements of the Bank contained in

Part 567 of the Rules and Regulations of the OTS.

20. VOTING RIGHTS OF STOCKHOLDERS

Following consummation of the Conversion, voting rights with respect to the Bank shall be held and exercised exclusively by the holders of its capital stock. The holders of the voting capital stock of the Holding Company shall have the exclusive voting rights with respect to the Holding Company.

21. RESTRICTIONS ON RESALE OR SUBSEQUENT DISPOSITION

A. All shares of Holding Company Common Stock purchased by Directors or Officers in the Offering shall be subject to the restriction that, except as provided in this Section or as may be approved by the OTS, no interest in such shares may be sold or otherwise disposed of for value for a period of one year following the date of purchase in the Offering.

B. The restriction on disposition of Holding Company Common Stock set forth above in this Section shall not apply to the following:

(1) Any exchange of such shares in connection with a merger or acquisition involving the Bank or the Holding Company, as the case may be, which has been approved by the OTS; and

(2) Any disposition of such shares following the death of the person to whom such shares were initially sold under the terms of this Plan.

C. With respect to all shares of Holding Company Common Stock subject to the restrictions on resale or subsequent disposition described in paragraph A above, each of the following provisions shall apply:

(1) Each certificate representing shares restricted by this section shall bear a legend prominently stamped on its face giving notice of the restriction;

(2) Instructions shall be issued to the stock transfer agent for the Holding Company not to recognize or effect any transfer of any certificate or record of ownership of any such shares in violation of the restriction on transfer; and

(3) Any shares of capital stock of the Holding Company issued with respect to a stock dividend, stock split, or otherwise with respect to ownership of outstanding shares of Holding Company Common Stock subject to the restriction on transfer hereunder shall be subject to the same restriction as is applicable to such Holding Company Common Stock.

22. REQUIREMENTS FOR STOCK PURCHASES BY DIRECTORS AND OFFICERS FOLLOWING THE CONVERSION

For a period of three years following the Conversion, no Officer, Director or their Associates shall purchase, without the prior written approval of the OTS, any outstanding shares of Holding Company Common Stock except from a broker-dealer registered with the SEC. This provision shall not apply to negotiated transactions involving more than 1% of the outstanding shares of Holding Company Common Stock, the exercise of any options pursuant to a stock option plan or purchases of Holding Company Common Stock made by or held by any Tax-Qualified Employee Stock Benefit Plan or NonTax-Qualified Employee Stock Benefit Plan of the Bank or the Holding Company (including the Employee Plans) which may be attributable to any Officer or Director. As used herein, the term "negotiated transaction" means a transaction in which the securities are offered and the terms and arrangements relating to any sale are arrived at through direct communications between the seller or any Person acting on its behalf and the purchaser or his investment representative. The term "investment representative" shall mean a professional investment advisor acting as agent for the purchaser and independent of the seller and not acting on behalf of the seller in connection with the transaction.

23. TRANSFER OF DEPOSIT ACCOUNTS

Each Person holding a Deposit Account at the Bank at the time of Conversion shall retain an identical Deposit Account at the Bank following the Conversion in the same amount and subject to the same terms and conditions (except as to voting and liquidation rights).

24. REGISTRATION AND MARKETING

Within the time period required by applicable laws and regulations, the Holding Company will register the securities issued in connection with the Conversion pursuant to the Securities Exchange Act of 1934 (or will be a successor issuer that succeeds to the registration of the Mid-Tier Holding Company) and will not deregister such securities for a period of at least three years thereafter, except that the maintenance of registration for three years requirement may be fulfilled by any successor to the Bank or any holding company of the Bank. In addition, the Bank or Holding Company will use its best efforts to encourage and assist a market-maker to establish and maintain a market for the Holding Company Common Stock and to list those securities on a national or regional securities exchange or the Nasdaq Stock Market.

25. TAX RULINGS OR OPINIONS

Consummation of the Conversion is expressly conditioned upon prior receipt by the Mutual Holding Company, the Mid-Tier Holding Company and the Bank of either a ruling or an opinion of counsel with respect to federal tax laws, and either a ruling, an opinion of counsel, or a letter of advice from their tax advisor with respect to Massachusetts tax laws, to the effect that consummation of the transactions contemplated by the Conversion and this Plan will not result in a taxable reorganization under the provisions of the applicable codes or otherwise result in any adverse tax consequences to the Mutual Holding Company, the Mid-Tier Holding Company, the Holding Company or the Bank, or the Account Holders receiving subscription rights before or after the

Conversion, except in each case to the extent, if any, that subscription rights are deemed to have value on the date such rights are issued.

26. STOCK BENEFIT PLANS AND EMPLOYMENT AGREEMENTS

A. The Holding Company and the Bank are authorized to adopt Tax-Qualified Employee Stock Benefit Plans in connection with the Conversion, including without limitation, an ESOP. Existing as well as any newly created Tax-Qualified Employee Stock Benefit Plans may purchase shares of Holding Company Common Stock in the Conversion, to the extent permitted by the terms of such benefit plans and this Plan.

B. As a result of the Conversion, the Holding Company shall be deemed to have ratified and approved the stock benefit plans maintained by the Bank and the Mid-Tier Holding Company and shall have agreed to issue (and reserve for issuance) Holding Company Common Stock in lieu of common stock of the Mid-Tier Holding Company pursuant to the terms of such benefit plans. Upon consummation of the Conversion, the Mid-Tier Holding Company common stock held by such benefit plans shall be converted into Holding Company Common Stock based upon the Exchange Ratio. Also upon consummation of the Conversion, (i) all rights to purchase, sell or receive Mid-Tier Holding Company common stock and all rights to elect to make payment in Mid-Tier Holding Company common stock under any agreement between the Bank or the Mid-Tier Holding Company and any Director, Officer or Employee thereof or under any plan or program of the Bank or the Mid-Tier Holding Company shall automatically, by operation of law, be converted into and shall become an identical right to purchase, sell or receive Holding Company Common Stock and an identical right to make payment in Holding Company Common Stock under any such agreement between the Bank or the Mid-Tier Holding Company and any Director, Officer or Employee thereof or under such plan or program of the Bank, and (ii) rights outstanding under any stock option plan of the Bank or the Mid-Tier Holding Company shall be assumed by the Holding Company and thereafter shall be rights only for shares of Holding Company Common Stock, with each such right being for a number of shares of Holding Company Common Stock based upon the Exchange Ratio and the number of shares of Mid-Tier Holding Company common stock that were available thereunder immediately prior to consummation of the Conversion, with the price adjusted to reflect the Exchange Ratio but with no change in any other term or condition of such right.

C. The Holding Company and the Bank are authorized to enter into employment agreements with their executive officers.

D. The Holding Company and the Bank are authorized to adopt stock option plans, restricted stock grant plans and other Non-Tax-Qualified Employee Stock Benefit Plans, provided that such plans conform to any applicable requirements of OTS regulations.

27. RESTRICTIONS ON ACQUISITION OF BANK AND HOLDING COMPANY

A. In accordance with OTS regulations, for a period of three years from the date of consummation of the Conversion, no Person, other than the Holding Company, shall directly or indirectly offer to acquire or acquire the beneficial ownership of more than 10% of any class of an equity security of the Bank without the prior written consent of the OTS.

(1) The charter of the Bank may contain a provision stipulating that no Person, except the Holding Company, for a period of five years following the closing date of the Conversion, may directly or indirectly offer to acquire or acquire the beneficial ownership of more than 10% of any class of an equity security of the Bank, without the prior written approval of the OTS. In addition, such charter may also provide that for a period of five years following the closing date of the Conversion, shares beneficially owned in violation of the above-described charter provision shall not be entitled to vote and shall not be voted by any Person or counted as voting stock in connection with any matter submitted to stockholders for a vote. In addition, special meetings of the stockholders relating to changes in control or amendment of the charter may only be called by the Board of Directors, and shareholders shall not be permitted to cumulate their votes for the election of Directors.

(2) The Certificate of Incorporation of the Holding Company will contain a provision stipulating that in no event shall any record owner of any outstanding shares of Holding Company Common Stock who beneficially owns in excess of 10% of such outstanding shares be entitled or permitted to any vote in respect to any shares held in excess of 10%. In addition, the Certificate of Incorporation and Bylaws of the Holding Company will contain provisions which provide for staggered terms of the Directors, noncumulative voting for Directors, limitations on the calling of special meetings and certain notice requirements.

B. For the purposes of this section:

(1) The term "Person" includes an individual, a firm, a corporation or other entity;

(2) The term "offer" includes every offer to buy or acquire, solicitation of an offer to sell, tender offer for, or request or invitation for tenders of, a security or interest in a security for value;

(3) The term "acquire" includes every type of acquisition, whether effected by purchase, exchange, operation of law or otherwise; and

(4) The term "security" includes nontransferable subscription rights issued pursuant to a plan of conversion as well as a "security" as defined in Section 2(a)(l) of the Securities Act of 1933.

28. PAYMENT OF DIVIDENDS AND REPURCHASE OF STOCK

A. The Holding Company shall comply with any applicable OTS regulation in the repurchase of any shares of its capital stock during the first year following consummation of the Conversion.

B. The Bank shall not declare or pay a cash dividend on, or repurchase any of, its capital stock if the effect thereof would cause its regulatory capital to be reduced below (i) the amount required for the Liquidation Account or (ii) the minimum regulatory capital requirement in Section 567.2 of the Rules and Regulations of the OTS. Otherwise, the Bank may declare dividends

or make capital distributions in accordance with applicable law and regulations, including 12 C.F.R. Section 563.141 or its successor.

29. CHARTER AND BYLAWS

By voting to adopt this Plan, Members of the Mutual Holding Company will be voting to adopt a Certificate of Incorporation and Bylaws for the Holding Company attached as Exhibits D and E to this Plan.

30. CONSUMMATION OF CONVERSION AND EFFECTIVE DATE

The Effective Date of the Conversion shall be the date upon which the Articles of Combination shall be filed with the OTS with respect to the MHC Merger, the Mid-Tier Merger and the Bank Merger. The Articles of Combination shall be filed with the OTS after all requisite regulatory, member and stockholder approvals have been obtained, all applicable waiting periods have expired, and sufficient subscriptions and orders for Subscription Shares have been received. The Closing of the sale of all shares of Holding Company Common Stock sold in the Subscription Offering, Community Offering and/or Syndicated Community Offering shall occur simultaneously on the effective date of the Closing.

31. EXPENSES OF CONVERSION

The Mutual Holding Company, the Mid-Tier Holding Company, the Bank and the Holding Company may retain and pay for the services of legal, financial and other advisors to assist in connection with any or all aspects of the Conversion, including the Offering, and such parties shall use their best efforts to assure that such expenses shall be reasonable.

32. AMENDMENT OR TERMINATION OF PLAN

This Plan may be substantively amended by the Board of Directors of the Mutual Holding Company at the discretion of the Board of Directors or as a result of comments from regulatory authorities at any time prior to the solicitation of proxies from Members and Mid-Tier Holding Company stockholders to vote on this Plan, and at any time thereafter by the Board of Directors of the Mutual Holding Company with the concurrence of the OTS. Any amendment to this Plan made after approval by the Members and Mid-Tier Holding Company stockholders with the approval of the OTS shall not necessitate further approval by the Members or Mid-Tier Holding Company stockholders unless otherwise required by the OTS. This Plan may be terminated by the Board of Directors of the Mutual Holding Company at any time prior to the Special Meeting of Members and the Special Meeting of Stockholders to vote on this Plan, and at any time thereafter with the concurrence of the OTS.

By adoption of the Plan, the Members of the Mutual Holding Company authorize the Board of Directors of the Mutual Holding Company to amend or terminate the Plan under the circumstances set forth in this Section.

33. CONDITIONS TO CONVERSION

Consummation of the Conversion pursuant to this Plan is expressly conditioned upon the following:

A. Prior receipt by the Mutual Holding Company, the Mid-Tier Holding Company, and the Bank of rulings of the United States Internal Revenue Service and the Commonwealth of Massachusetts taxing authorities, or opinions of counsel or tax advisers as described in Section 25 hereof;

B. The sale of the shares of Holding Company Common Stock offered in the Conversion; and

C. The completion of the Conversion within the time period specified in
Section 3 of this Plan.

34. INTERPRETATION

All interpretations of this Plan and application of its provisions to particular circumstances by a majority of the Board of Directors of the Mutual Holding Company shall be final, subject to the authority of the OTS.

Dated: April 4, 2002.

EXHIBIT A

AGREEMENT OF MERGER
BETWEEN
BROOKLINE BANCORP, INC.
BROOKLINE INTERIM SAVINGS BANK I,
AND BROOKLINE SAVINGS BANK

FORM OF AGREEMENT OF MERGER BETWEEN
BROOKLINE BANCORP, INC.,
BROOKLINE INTERIM SAVINGS BANK I
AND BROOKLINE SAVINGS BANK

THIS AGREEMENT OF MERGER (this "Merger Agreement"), dated as of _____________, 2002, is made by and between Brookline Bancorp, Inc., a federal corporation ("Mid-Tier Holding Company"), Brookline Savings Bank (the "Bank") and Brookline Interim Savings Bank I, an interim federal savings bank ("Interim I").

R E C I T A L S :

1. Mid-Tier Holding Company is a federal corporation which owns 100% of the common stock of the Bank.

2. Pursuant to the Merger Agreement, Mid-Tier Holding Company will convert to or exchange its charter for a federal interim savings bank charter and shall merge with and into the Bank with the Bank as the surviving entity (the "Mid-Tier Merger"). The Mid-Tier Holding Company stockholders shall constructively receive shares of Bank common stock in exchange for Mid-Tier Holding Company common stock that they actually or constructively hold.

3. At least two-thirds of the members of the boards of directors of the Bank, Interim I and Mid-Tier Holding Company have approved this Merger Agreement under which Mid-Tier Holding Company shall be merged with and into the Bank with the Bank as the surviving or resulting institution (the "Resulting Institution"), and authorized the execution and delivery thereof.

4. This Merger Agreement (and the transactions contemplated hereby) are being entered into to facilitate the conversion of Brookline Bancorp, MHC to stock form pursuant to that certain Plan of Conversion and Reorganization of Brookline Bancorp, MHC (the "Plan").

NOW, THEREFORE, in consideration of the premises and mutual agreements contained herein, the parties hereto have agreed as follows:

1. MERGER. At and on the Effective Date (as defined below), (i) Mid-Tier Holding Company shall exchange its charter for the charter of Interim I and will merge with and into the Bank with the Bank as the Resulting Institution, and (ii) Mid-Tier Holding Company/Interim I stockholders shall constructively receive shares of Bank common stock in exchange for their Mid-Tier Holding Company/Interim I common stock.

2. EFFECTIVE DATE. The Mid-Tier Merger shall not be effective until and unless it is approved by the Director of the Office of Thrift Supervision (the "OTS") after approval by at least two-thirds of the outstanding common stock of Mid-Tier Holding Company and the Articles of Combination shall have been filed with the OTS with respect to the Mid-Tier Merger. Approval of the Plan by the stockholders of Mid-Tier Holding Company shall also constitute approval of this Merger Agreement.

A-1

3. NAME. The name of the Resulting Institution shall be Brookline Savings Bank.

4. OFFICES. The main office of the Resulting Institution shall be 160 Washington Street, Brookline, Massachusetts. The offices of the Bank that were in lawful operation prior to the Mid-Tier Merger shall be operated as offices of the Resulting Institution after the Mid-Tier Merger.

5. DIRECTORS AND OFFICERS. The directors and officers of the Bank immediately prior to the Effective Date shall be the directors and officers of the Resulting Institution after the Effective Date.

6. RIGHTS AND DUTIES OF THE RESULTING INSTITUTION. At the Effective Date, the Mid-Tier Holding Company shall convert to Interim I, which shall be merged with and into the Bank with the Bank as the Resulting Institution. The business of the Resulting Institution shall be that of a federal savings association as provided in its charter. All assets, rights, interests, privileges, powers, franchises and property (real, personal and mixed) of Mid-Tier Holding Company, Interim I and the Bank shall be automatically transferred to and vested in the Resulting Institution by virtue of the Mid-Tier Merger without any deed or other document of transfer. The Resulting Institution, without any order or action on the part of any court or otherwise and without any documents of assumption or assignment, shall hold and enjoy all of the properties, franchises and interests, including appointments, powers, designations, nominations and all other rights and interests as the agent or other fiduciary in the same manner and to the same extent as such rights, franchises, and interests and powers were held or enjoyed by Mid-Tier Holding Company, Interim I and the Bank. The Resulting Institution shall be responsible for all of the liabilities, restrictions and duties of every kind and description of Mid-Tier Holding Company, Interim I and the Bank immediately prior to the Mid-Tier Merger, including liabilities for all debts, obligations and contracts of Mid-Tier Holding Company, Interim I and the Bank, matured or unmatured, whether accrued, absolute, contingent or otherwise and whether or not reflected or reserved against on balance sheets, books of accounts or records of the Mid-Tier Holding Company and the Bank. The stockholders of the Bank shall possess all voting rights with respect to the shares of stock of the Bank. All rights of creditors and other obligees and all liens on property of Mid-Tier Holding Company, Interim I and the Bank shall be preserved and shall not be released or impaired.

7. OTHER TERMS. All terms used in this Merger Agreement shall, unless defined herein, have the meanings set forth in the Plan. The Plan is incorporated herein by this reference and made a part hereof to the extent necessary or appropriate to effect and consummate the terms of this Merger Agreement and the Conversion.

A-2

IN WITNESS WHEREOF, Mid-Tier Holding Company, Interim I and the Bank have caused this Merger Agreement to be executed as of the date first above written.

BROOKLINE BANCORP, INC.

ATTEST:

By:                                    By:
   -------------------------------        --------------------------------------
     Secretary                             Richard P. Chapman, Jr., President

BROOKLINE SAVINGS BANK

ATTEST:

By:                                    By:
   -------------------------------        --------------------------------------
     Secretary                             Richard P.  Chapman,  Jr.,
                                                 Chairman of the Board
                                                 and Chief Executive Officer

BROOKLINE INTERIM SAVINGS BANK I

ATTEST:

By:                                    By:
   -------------------------------        --------------------------------------
     Secretary                             Richard P. Chapman, Jr., President

EXHIBIT B

AGREEMENT OF MERGER
BETWEEN
BROOKLINE BANCORP, MHC
BROOKLINE INTERIM SAVINGS BANK II
AND BROOKLINE SAVINGS BANK

FORM OF AGREEMENT OF MERGER
BETWEEN
BROOKLINE BANCORP, MHC
BROOKLINE INTERIM SAVINGS BANK II
AND BROOKLINE SAVINGS BANK

THIS AGREEMENT OF MERGER (this "Merger Agreement"), dated as of ___________, 2002, is made by and between Brookline Bancorp, MHC, a federal mutual holding company (the "Mutual Holding Company"), Brookline Savings Bank (the "Bank"), and Brookline Interim Savings Bank II, an interim federal savings bank ("Interim II").

R E C I T A L S :

1. The Mutual Holding Company is a federal mutual holding company with no authorized shares of capital stock.

2. After the merger of Brookline Bancorp, Inc. and Brookline Interim Savings Bank I into the Bank, the majority of the shares of common stock of the Bank will be owned by the Mutual Holding Company, and the remainder of the shares of common stock of the Bank will be constructively owned by the Bank's employees, directors and the public (the "Minority Stockholders").

3. Pursuant to this Merger Agreement, the Mutual Holding Company will convert to or exchange its charter for the federal interim savings bank charter of Interim II, and Interim II shall merge with and into the Bank with the Bank as the surviving entity (the "MHC Merger"). Each Eligible Account Holder and Supplemental Eligible Account Holder, as defined in the Plan of Conversion and Reorganization of Brookline Bancorp, MHC (the "Plan"), will receive as interest in a liquidation account ("Liquidation Account") of the Bank in exchange for such person's interest in the Mutual Holding Company.

4. At least two-thirds of the members of the boards of directors of the Bank and the Mutual Holding Company have approved this Merger Agreement and the MHC Merger (as described below) and authorized the execution and delivery thereof.

5. This Merger Agreement (and the transactions contemplated hereby) are being entered into to facilitate the conversion of the Mutual Holding Company to stock form pursuant to the Plan.

NOW, THEREFORE, in consideration of the premises and mutual agreements contained herein, the parties hereto have agreed as follows:

1. MERGER. At and on the Effective Date (as defined below), (i) the Mutual Holding Company shall convert to or exchange its charter for the charter of Interim II, and Interim II will merge with and into the Bank (the "MHC Merger") with the Bank as the surviving or resulting institution (the "Resulting Institution"), (ii) each share of Bank common stock owned by the Mutual Holding Company shall be canceled, and (iii) each Eligible Account Holder and Supplemental

B-1

Eligible Account Holder shall automatically receive an interest in the Liquidation Account which shall be established in the Bank, in exchange for such person's interest in the Mutual Holding Company as set forth in the Plan.

2. EFFECTIVE DATE. The MHC Merger shall not be effective until and unless it is approved by the Director of the Office of Thrift Supervision (the "OTS") after approval by (i) two-thirds of the outstanding common stock of the Bank, and (ii) a majority of the members of the Mutual Holding Company, and the Articles of Combination shall have been filed with the OTS with respect to the MHC Merger. Approval of the Plan by the members of the Mutual Holding Company shall also constitute approval of this Merger Agreement.

3. NAME. The name of the Resulting Institution shall be Brookline Savings Bank.

4. OFFICES. The main offices of the Resulting Institution shall be 160 Washington Street, Brookline, Massachusetts. The offices of the Bank that were in lawful operation prior to the MHC Merger shall continue to be operated as the offices of the Resulting Institution after the MHC Merger.

5. DIRECTORS AND OFFICERS. The directors and officers of the Bank immediately prior to the Effective Date shall be the directors and officers of the Resulting Institution after the Effective Date.

6 RIGHTS AND DUTIES OF THE RESULTING INSTITUTION. At the Effective Date, the Mutual Holding Company shall convert to Interim II, which shall merge with and into the Bank with the Bank as the Resulting Institution. The business of the Resulting Institution shall be that of a federal savings association as provided in its Charter. All assets, rights, interests, privileges, powers, franchises and property (real, personal and mixed) of the Mutual Holding Company, Interim II and the Bank shall be automatically transferred to and vested in the Resulting Institution by virtue of such merger without any deed or other document of transfer. The Resulting Institution, without any order or action on the part of any court or otherwise and without any documents of assumption or assignment, shall hold and enjoy all of the properties, franchises and interests, including appointments, powers, designations, nominations and all other rights and interests as the agent or other fiduciary in the same manner and to the same extent as such rights, franchises, and interests and powers were held or enjoyed by the Mutual Holding Company, Interim II and the Bank. The Resulting Institution shall be responsible for all of the liabilities, restrictions and duties of every kind and description of both the Mutual Holding Company, Interim II and the Bank immediately prior to the MHC Merger, including liabilities, debts, obligations and contracts of the Mutual Holding Company, Interim II and the Bank, matured or unmatured, whether accrued, absolute, contingent or otherwise and whether or not reflected or reserved against on balance sheets, books of accounts or records of the Mutual Holding Company, Interim II and the Bank. The stockholders of the Bank shall possess all voting rights with respect to the shares of stock of the Bank. All rights of creditors and other obligees and all liens on property of either the Mutual Holding Company, Interim II and the Bank shall be preserved and shall not be released or impaired.

7. OTHER TERMS. All terms used in this Merger Agreement shall, unless defined herein, have the meanings set forth in the Plan. The Plan is incorporated herein by this reference and made a

B-2

part hereof to the extent necessary or appropriate to effect and consummate the terms of this Merger Agreement and the Conversion.

IN WITNESS WHEREOF, the Mutual Holding Company, Interim II and the Bank have caused this Merger Agreement to be executed as of the date first above written.

BROOKLINE BANCORP, MHC

ATTEST:

By:                                    By:
   -------------------------------        --------------------------------------
     Secretary                             Richard P. Chapman, Jr., President

BROOKLINE SAVINGS BANK

ATTEST:

By:                                    By:
   -------------------------------        --------------------------------------
     Secretary                             Richard P.  Chapman,  Jr.,
                                                 Chairman of the Board
                                                 and Chief Executive Officer

BROOKLINE INTERIM SAVINGS BANK II

ATTEST:

By:                                    By:
   -------------------------------        --------------------------------------
     Secretary                             Richard P. Chapman, Jr., President

B-3

EXHIBIT C

AGREEMENT OF MERGER
BETWEEN
BROOKLINE SAVINGS BANK
AND BROOKLINE INTERIM SAVINGS BANK

FORM OF AGREEMENT OF MERGER
BETWEEN
BROOKLINE SAVINGS BANK
AND BROOKLINE INTERIM SAVINGS BANK

THIS AGREEMENT OF MERGER (this "Merger Agreement"), dated as of __________________, 2002, is made by and between Brookline Savings Bank, a federal savings association (the "Bank"), and Brookline Interim Savings Bank, an interim federal savings Bank ("Interim").

R E C I T A L S :

1. The Bank is a federal savings association that immediately prior to the transactions contemplated by this Merger Agreement and the Plan of Conversion and Reorganization of Brookline Bancorp, MHC (the "Plan") was a wholly-owned subsidiary of Brookline Bancorp, Inc. (the "Mid-Tier Holding Company"), a Federal corporation. Mid-Tier Holding Company was a majority-owned subsidiary of Brookline Bancorp, MHC (the "Mutual Holding Company").

2. Pursuant to the Plan and its related merger agreements, (i) Mid-Tier Holding Company has converted to Brookline Interim Savings Bank I, an interim federal savings bank ("Interim I") and Interim I has merged with and into the Bank (the "Mid-Tier Merger") with the Bank as the resulting entity, (ii) Mid-Tier Holding Company stockholders have constructively received shares of Bank common stock in exchange for their Mid-Tier Holding Company common stock,
(iii) the Mutual Holding Company has converted to, or exchanged its charter for, a federal interim savings bank ("Interim II") which has merged with and into the Bank with the Bank as the resulting entity, and (iv) each Eligible Account Holder and Supplemental Eligible Account Holder (as defined in the Plan) has received an interest in a Liquidation Account of the Bank in exchange for such person's interest in the Mutual Holding Company.

3. Pursuant to the Plan, following the completion of each of the steps outlined in paragraph 2 above, the Bank has organized Brookline Bancorp, Inc., a Delaware corporation (the "Holding Company"), to become the holding company of the Bank, and the Holding Company has organized Interim for the purpose of facilitating the conversion of the Mutual Holding Company to stock form (the "Conversion") pursuant to the Plan.

4. At least two-thirds of the members of the boards of directors of the Bank and Interim have approved this Merger Agreement under which Interim shall be merged with and into the Bank with the Bank as the surviving or resulting institution, and authorized the execution and delivery thereof.

5. This Merger Agreement (and the transactions contemplated hereby) is being entered into to facilitate the conversion of the Mutual Holding Company to stock form pursuant to the Plan.

NOW, THEREFORE, in consideration of the premises and mutual agreements contained herein, the parties hereto have agreed as follows:

C-1

1. MERGER. At and on the Effective Date (as defined below) and immediately following the Mid-Tier Merger and the MHC Merger (i) Interim will merge with and into the Bank (the "Bank Merger") with the Bank as the surviving or resulting institution ("Resulting Institution"), whereby (ii) all constructive shareholders of the Bank (I.E., Minority Stockholders immediately prior to the Conversion) will exchange the shares of Bank common stock that they constructively received in the Mid-Tier Merger for Holding Company Common Stock.

2. STOCK OFFERING. Immediately after the Bank Merger, the Holding Company shall sell shares of its common stock in a subscription and community offering as described in the Plan.

3. EFFECTIVE DATE. The Bank Merger shall not be effective until and unless it is approved by the Director of the Office of Thrift Supervision (the "OTS") after approval by at least two-thirds of the outstanding common stock of the Bank and Interim, and the Articles of Combination shall have been filed with the OTS with respect to the Bank Merger.

4. NAME. The name of the Resulting Institution shall be Brookline Savings Bank.

5. OFFICES. The main offices of the Resulting Institution shall be 160 Washington Street, Brookline, Massachusetts. The offices of the Bank that were in lawful operation prior to the Bank Merger shall be operated as offices of the Resulting Institution after the Bank Merger.

6. DIRECTORS AND OFFICERS. The directors and officers of the Bank immediately prior to the Effective Date shall be the directors and officers of the Resulting Institution after the Effective Date.

7. RIGHTS AND DUTIES OF THE RESULTING INSTITUTION. At the Effective Date, Interim shall be merged with and into the Bank with the Bank as the Resulting Institution. The business of the Resulting Institution shall be that of a federal savings association as provided in its charter. All assets, rights, interests, privileges, powers, franchises and property (real, personal and mixed) of Interim and the Bank shall be automatically transferred to and vested in the Resulting Institution by virtue of the Bank Merger without any deed or other document of transfer. The Resulting Institution, without any order or action on the part of any court or otherwise and without any documents of assumption or assignment, shall hold and enjoy all of the properties, franchises and interests, including appointments, powers, designations, nominations and all other rights and interests as the agent or other fiduciary in the same manner and to the same extent as such rights, franchises, and interests and powers were held or enjoyed by Interim and the Bank. The Resulting Institution shall be responsible for all of the liabilities, restrictions and duties of every kind and description of Interim and the Bank immediately prior to the Bank Merger, including liabilities for all debts, obligations and contracts of Bank and Interim, matured or unmatured, whether accrued, absolute, contingent or otherwise and whether or not reflected or reserved against on balance sheets, books of accounts or records of Interim and the Bank. The stockholders of the Resulting Institution shall possess all voting rights with respect to the shares of stock of the Bank. All rights of creditors and other obligees and all liens on property of Interim and the Bank shall be preserved and shall not be released or impaired.

C-2

8. OTHER TERMS. All terms used in this Merger Agreement shall, unless defined herein, have the meanings set forth in the Plan. The Plan is incorporated herein by this reference and made a part hereof to the extent necessary or appropriate to effect and consummate the terms of the Merger Agreement and the Conversion.

IN WITNESS WHEREOF, the Bank and Interim have caused this Merger Agreement to be executed as of the date first above written.

BROOKLINE SAVINGS BANK

ATTEST:

By:                                      By:
   ------------------------------------     ------------------------------------
     George C. Caner, Jr., Secretary         Richard P.  Chapman,  Jr.,
                                                   Chairman of the Board
                                                   and Chief Executive Officer

BROOKLINE INTERIM SAVINGS BANK

ATTEST:

By:                                      By:
   ------------------------------------     ------------------------------------
     George C. Caner, Jr., Secretary         Richard P. Chapman, Jr., President

C-3

EXHIBIT D

CERTIFICATE OF INCORPORATION OF THE HOLDING COMPANY

CERTIFICATE OF INCORPORATION
OF
BROOKLINE BANCORP, INC.

FIRST: The name of the Corporation is Brookline Bancorp, Inc. (hereinafter referred to as the "Corporation").

SECOND: The address of the registered office of the Corporation in the State of Delaware is Corporation Trust Center, 1209 Orange Street, in the City of Wilmington, County of New Castle. The name of the registered agent at that address is The Corporation Trust Company.

THIRD: The purpose of the Corporation is to engage in any lawful act or activity for which a corporation may be organized under the General Corporation Law of Delaware.

FOURTH:

A. The total number of shares of all classes of stock which the Corporation shall have authority to issue is two hundred fifty million (250,000,000) consisting of:

1. Fifty million (50,000,000) shares of Preferred Stock, par value one cent ($.01) per share (the "Preferred Stock"); and

2. Two Hundred million (200,000,000) shares of Common Stock, par value one cent ($.01) per share (the "Common Stock").

B. The Board of Directors is authorized, subject to any limitations prescribed by law, to provide for the issuance of the shares of Preferred Stock in series, and by filing a certificate pursuant to the applicable law of the State of Delaware (such certificate being hereinafter referred to as a "Preferred Stock Designation"), to establish from time to time the number of shares to be included in each such series, and to fix the designation, powers, preferences, and rights of the shares of each such series and any qualifications, limitations or restrictions thereof. The number of authorized shares of Preferred Stock may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of a majority of the Common Stock, without a vote of the holders of the Preferred Stock, or of any series thereof, unless a vote of any such holders is required pursuant to the terms of any Preferred Stock Designation.

C. 1. Notwithstanding any other provision of this Certificate of Incorporation, in no event shall any record owner of any outstanding Common Stock which is beneficially owned, directly or indirectly, by a person who, as of any record date for the determination of stockholders entitled to vote on any matter, beneficially owns in excess of 10% of the then-outstanding shares of Common Stock (the "Limit"), be entitled, or permitted to any vote in respect of the shares held in excess of the Limit. The number of votes which may be cast by any record owner by virtue of the provisions hereof in respect of Common Stock beneficially owned by such person owning shares in excess of the Limit shall be a number equal to the total number of votes which a single record owner of all Common Stock owned by such person would be entitled to cast, multiplied by a fraction, the numerator of which is the number of shares of such class or series which are both beneficially owned

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by such person and owned of record by such record owner and the denominator of which is the total number of shares of Common Stock beneficially owned by such person owning shares in excess of the Limit.

2. The following definitions shall apply to this Section C of this Article FOURTH:

(a) "Affiliate" shall have the meaning ascribed to it in Rule 12b-2 of the General Rules and Regulations under the Securities Act of 1934, as in effect on the date of filing of this Certificate of Incorporation.

(b) "Beneficial ownership" shall be determined pursuant to Rule 13d-3 of the General Rules and Regulations under the Securities Exchange Act of 1934 (or any successor rule or statutory provision), or, if said Rule 13d-3 shall be rescinded and there shall be no successor rule or statutory provision thereto, pursuant to said Rule 13d-3 as in effect on the date of filing of this Certificate of Incorporation; provided, however, that a person shall, in any event, also be deemed the "beneficial owner" of any Common Stock:

(1) which such person or any of its affiliates beneficially owns, directly or indirectly; or

(2) which such person or any of its affiliates has (i) the right to acquire (whether such right is exercisable immediately or only after the passage of time), pursuant to any agreement, arrangement or understanding (but shall not be deemed to be the beneficial owner of any voting shares solely by reason of an agreement, contract, or other arrangement with this Corporation to effect any transaction which is described in any one or more clauses of Section A of Article EIGHTH) or upon the exercise of conversion rights, exchange rights, warrants, or options or otherwise, or (ii) sole or shared voting or investment power with respect thereto pursuant to any agreement, arrangement, understanding, relationship or otherwise (but shall not be deemed to be the beneficial owner of any voting shares solely by reason of a revocable proxy granted for a particular meeting of stockholders, pursuant to a public solicitation of proxies for such meeting, with respect to shares of which neither such person nor any such affiliate is otherwise deemed the beneficial owner); or

(3) which are beneficially owned, directly or indirectly, by any other person with which such first mentioned person or any of its affiliates acts as a partnership, limited partnership, syndicate or other group pursuant to any agreement, arrangement or understanding for the purpose of acquiring, holding, voting or disposing of any shares of capital stock of this Corporation;

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and provided further, however, that (1) no Director or Officer of this Corporation (or any affiliate of any such Director or Officer) shall, solely by reason of any or all of such Directors or Officers acting in their capacities as such, be deemed, for any purposes hereof, to beneficially own any Common Stock beneficially owned by another such Director or Officer (or any affiliate thereof), and (2) neither any employee stock ownership plan or similar plan of this Corporation or any subsidiary of this Corporation, nor any trustee with respect thereto or any affiliate of such trustee (solely by reason of such capacity of such trustee), shall be deemed, for any purposes hereof, to beneficially own any Common Stock held under any such plan. For purposes of computing the percentage beneficial ownership of Common Stock of a person the outstanding Common Stock shall include shares deemed owned by such person through application of this subsection but shall not include any other Common Stock which may be issuable by this Corporation pursuant to any agreement, or upon exercise of conversion rights, warrants or options, or otherwise. For all other purposes, the outstanding Common Stock shall include only Common Stock then outstanding and shall not include any Common Stock which may be issuable by this Corporation pursuant to any agreement, or upon the exercise of conversion rights, warrants or options, or otherwise.

3. The Board of Directors shall have the power to construe and apply the provisions of this section and to make all determinations necessary or desirable to implement such provisions, including but not limited to matters with respect to (i) the number of shares of Common Stock beneficially owned by any person, (ii) whether a person is an affiliate of another, (iii) whether a person has an agreement, arrangement, or understanding with another as to the matters referred to in the definition of beneficial ownership, (iv) the application of any other definition or operative provision of this section to the given facts, or (v) any other matter relating to the applicability or effect of this section.

4. The Board of Directors shall have the right to demand that any person who is reasonably believed to beneficially own Common Stock in excess of the Limit (or holds of record Common Stock beneficially owned by any person in excess of the Limit) supply the Corporation with complete information as to (i) the record owner(s) of all shares beneficially owned by such person who is reasonably believed to own shares in excess of the Limit, and (ii) any other factual matter relating to the applicability or effect of this section as may reasonably be requested of such person.

5. Except as otherwise provided by law or expressly provided in this section, the presence, in person or by proxy, of holders of a majority of the shares of capital stock of the Corporation entitled to vote at the meeting (after giving effect, if required, to the provisions of this section) shall constitute a quorum at all meetings of the stockholders (unless or except to the extent that the presence of a larger number may be required by law), and every reference in this Certificate of Incorporation to a majority or other proportion of capital stock (or the holders thereof) for purposes of determining any quorum requirement or any requirement for stockholder consent or approval shall be deemed to refer to such majority or other proportion of the votes (or the holders thereof) then entitled to be cast in respect of such capital stock.

6. Any constructions, applications, or determinations made by the Board of Directors pursuant to this section in good faith and on the basis of such information and assistance as was then reasonably available for such purpose shall be conclusive and binding upon the Corporation and its stockholders.

7. In the event any provision (or portion thereof) of this section shall be found to be invalid, prohibited or unenforceable for any reason, the remaining provisions (or portions thereof) of this section shall remain in full force and effect, and shall be construed as if such invalid, prohibited or unenforceable provision had been stricken herefrom or otherwise rendered inapplicable, it being the intent of this Corporation and its stockholders that such remaining provision (or portion thereof) of this section remain, to the fullest extent permitted by law, applicable and enforceable as to all stockholders, including stockholders owning an amount of stock over the Limit, notwithstanding any such finding.

FIFTH: The following provisions are inserted for the management of the business and the conduct of the affairs of the Corporation, and for further definition, limitation and regulation of the powers of the Corporation and of its Directors and stockholders:

A. The business and affairs of the Corporation shall be managed by or under the direction of the Board of Directors. In addition to the powers and authority expressly conferred upon them by statute or by this Certificate of Incorporation or the Bylaws of the Corporation, the Directors are hereby empowered to exercise all such powers and do all such acts and things as may be exercised or done by the Corporation.

B. The Directors of the Corporation need not be elected by written ballot unless the Bylaws so provide. Stockholders shall not be permitted to cumulate their votes for the election of Directors.

C. Any action required or permitted to be taken by the stockholders of the Corporation must be effected at a duly called annual or special meeting of stockholders of the Corporation and may not be effected by any consent in writing by such stockholders.

D. Special meetings of stockholders of the Corporation may be called only by the Board of Directors pursuant to a resolution adopted by a majority of the total number of authorized directorships (whether or not there exist any vacancies in previously authorized directorships at the time any such resolution is presented to the Board for adoption) (the "Whole Board") or as otherwise provided in the Bylaws.

SIXTH:

A. The number of Directors shall be fixed from time to time exclusively by the Board of Directors pursuant to a resolution adopted by a majority of the Whole Board. The Directors shall be divided into three classes, as nearly equal in number as reasonably possible, with the term of office

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of the first class to expire at the first annual meeting of stockholders, the term of office of the second class to expire at the annual meeting of stockholders one year thereafter and the term of office of the third class to expire at the annual meeting of stockholders two years thereafter. At each annual meeting of stockholders following such initial classification and election, Directors elected to succeed those Directors whose terms expire shall be elected for a term of office to expire at the third succeeding annual meeting of stockholders after their election.

B. Subject to the rights of the holders of any series of Preferred Stock then outstanding, newly created directorships resulting from any increase in the authorized number of Directors or any vacancies in the Board of Directors resulting from death, resignation, retirement, disqualification, removal from office or other cause may be filled only by a majority vote of the Directors then in office, though less than a quorum, and Directors so chosen shall hold office for a term expiring at the annual meeting of stockholders at which the term of office of the class to which they have been chosen expires. No decrease in the number of Directors constituting the Board of Directors shall shorten the term of any incumbent Director.

C. Advance notice of stockholder nominations for the election of Directors and of business to be brought by stockholders before any meeting of the stockholders of the Corporation shall be given in the manner provided in the Bylaws of the Corporation.

D. Subject to the rights of the holders of any series of Preferred Stock then outstanding, any Director, or the entire Board of Directors, may be removed from office at any time, but only for cause and only by the affirmative vote of the holders of at least 80 percent of the voting power of all of the then-outstanding shares of capital stock of the Corporation entitled to vote generally in the election of Directors (after giving effect to the provisions of Article FOURTH of this Certificate of Incorporation ("Article FOURTH")), voting together as a single class.

SEVENTH: The Board of Directors is expressly empowered to adopt, amend or repeal the Bylaws of the Corporation. Any adoption, amendment or repeal of the Bylaws of the Corporation by the Board of Directors shall require the approval of two-thirds of the Whole Board. The stockholders shall also have power to adopt, amend or repeal the Bylaws of the Corporation; provided, however, that, in addition to any vote of the holders of any class or series of stock of the Corporation required by law or by this Certificate of Incorporation, the affirmative vote of the holders of at least 80 percent of the voting power of all of the then-outstanding shares of the capital stock of the Corporation entitled to vote generally in the election of Directors (after giving effect to the provisions of Article FOURTH), voting together as a single class, shall be required to adopt, amend or repeal any provisions of the Bylaws of the Corporation.

EIGHTH:

A. In addition to any affirmative vote required by law or this Certificate of Incorporation, and except as otherwise expressly provided in this section:

1. any merger or consolidation of the Corporation or any Subsidiary (as hereinafter defined) with (i) any Interested Stockholder (as hereinafter defined) or (ii) any other

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corporation (whether or not itself an Interested Stockholder) which is, or after such merger or consolidation would be, an Affiliate (as hereinafter defined) of an Interested Stockholder; or

2. any sale, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions) to or with any Interested Stockholder, or any Affiliate of any Interested Stockholder, of any assets of the Corporation or any Subsidiary having an aggregate Fair Market Value (as hereinafter defined) equaling or exceeding 25% or more of the combined assets of the Corporation and its Subsidiaries; or

3. the issuance or transfer by the Corporation or any Subsidiary (in one transaction or a series of transactions) of any securities of the Corporation or any Subsidiary to any Interested Stockholder or any Affiliate of any Interested Stockholder in exchange for cash, securities or other property (or a combination thereof) having an aggregate Fair Market Value (as hereinafter defined) equaling or exceeding 25% of the combined Fair Market Value of the then-outstanding common stock of the Corporation and its Subsidiaries, except pursuant to an employee benefit plan of the Corporation or any Subsidiary thereof; or

4. the adoption of any plan or proposal for the liquidation or dissolution of the Corporation proposed by or on behalf of an Interested Stockholder or any Affiliate of an Interested Stockholder; or

5. any reclassification of securities (including any reverse stock split), or recapitalization of the Corporation, or any merger or consolidation of the Corporation with any of its Subsidiaries or any other transaction (whether or not with or into or otherwise involving an Interested Stockholder) which has the effect, directly or indirectly, of increasing the proportional share of the outstanding shares of any class of equity or convertible securities of the Corporation or any Subsidiary which is directly or indirectly owned by an Interested Stockholder or any Affiliate of an Interested Stockholder;

shall require the affirmative vote of the holders of at least 80% of the voting power of the then-outstanding shares of stock of the Corporation entitled to vote in the election of Directors (the "Voting Stock") (after giving effect to the provision of Article FOURTH), voting together as a single class. Such affirmative vote shall be required notwithstanding the fact that no vote may be required, or that a lesser percentage may be specified, by law or by any other provisions of this Certificate of Incorporation or any Preferred Stock Designation or in any agreement with any national securities exchange or otherwise.

The term "Business Combination" as used in this Article EIGHTH shall mean any transaction which is referred to in any one or more of paragraphs 1 through 5 of Section A of this Article EIGHTH.

B. The provisions of Section A of this Article EIGHTH shall not be applicable to any particular Business Combination, and such Business Combination shall require only the affirmative vote of the majority of the outstanding shares of capital stock entitled to vote, or such vote as is required by law or by this Certificate of Incorporation, if, in the case of any Business Combination that does not involve any cash or other consideration being received by the stockholders of the

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Corporation solely in their capacity as stockholders of the Corporation, the condition specified in the following paragraph 1 is met or, in the case of any other Business Combination, all of the conditions specified in either of the following paragraphs 1 or 2 are met:

1. The Business Combination shall have been approved by two-thirds of the Disinterested Directors (as hereinafter defined).

2. All of the following conditions shall have been met:

(a) The aggregate amount of the cash and the Fair Market Value as of the date of the consummation of the Business Combination of consideration other than cash to be received per share by the holders of Common Stock in such Business Combination shall at least be equal to the higher of the following:

(1) (if applicable) the Highest Per Share Price (as hereinafter defined), including any brokerage commissions, transfer taxes and soliciting dealers' fees, paid by the Interested Stockholder or any of its Affiliates for any shares of Common Stock acquired by it (i) within the two-year period immediately prior to the first public announcement of the proposal of the Business Combination (the "Announcement Date"), or (ii) in the transaction in which it became an Interested Stockholder, whichever is higher.

(2) the Fair Market Value per share of Common Stock on the Announcement Date or on the date on which the Interested Stockholder became an Interested Stockholder (such latter date is referred to in this Article EIGHTH as the "Determination Date"), whichever is higher.

(b) The aggregate amount of the cash and the Fair Market Value as of the date of the consummation of the Business Combination of consideration other than cash to be received per share by holders of shares of any class of outstanding Voting Stock other than Common Stock shall be at least equal to the highest of the following (it being intended that the requirements of this subparagraph (b) shall be required to be met with respect to every such class of outstanding Voting Stock, whether or not the Interested Stockholder has previously acquired any shares of a particular class of Voting Stock):

(1) (if applicable) the Highest Per Share Price (as hereinafter defined), including any brokerage commissions, transfer taxes and soliciting dealers' fees, paid by the Interested Stockholder for any shares of such class of Voting Stock acquired by it (i) within the two-year period immediately prior to the Announcement Date, or (ii) in the transaction in which it became an Interested Stockholder, whichever is higher;

(2) (if applicable) the highest preferential amount per share to which the holders of shares of such class of Voting Stock are entitled in the event of

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any voluntary or involuntary liquidation, dissolution or winding up of the Corporation; and

(3) the Fair Market Value per share of such class of Voting Stock on the Announcement Date or on the Determination Date, whichever is higher.

(c) The consideration to be received by holders of a particular class of outstanding Voting Stock (including Common Stock) shall be in cash or in the same form as the Interested Stockholder has paid for shares of such class of Voting Stock. If the Interested Stockholder has previously paid for shares of any class of Voting Stock with varying forms of consideration, the form of consideration to be received per share by holders of shares of such class of Voting Stock shall be either cash or the form used to acquire the largest number of shares of such class of Voting Stock previously acquired by the Interested Stockholder. The price determined in accordance with subparagraph B.2 of this Article EIGHTH shall be subject to appropriate adjustment in the event of any stock dividend, stock split, combination of shares or similar event.

(d) After such Interested Stockholder has become an Interested Stockholder and prior to the consummation of such Business Combination: (1) except as approved by a majority of the Disinterested Directors, there shall have been no failure to declare and pay at the regular date therefor any full quarterly dividends (whether or not cumulative) on any outstanding stock having preference over the Common Stock as to dividends or liquidation; (2) there shall have been (i) no reduction in the annual rate of dividends paid on the Common Stock (except as necessary to reflect any subdivision of the Common Stock), except as approved by a majority of the Disinterested Directors, and (ii) an increase in such annual rate of dividends as necessary to reflect any reclassification (including any reverse stock split), recapitalization, reorganization or any similar transaction which has the effect of reducing the number of outstanding shares of the Common Stock, unless the failure to so increase such annual rate is approved by a majority of the Disinterested Directors; and (3) neither such Interested Stockholder or any of its Affiliates shall have become the beneficial owner of any additional shares of Voting Stock except as part of the transaction which results in such Interested Stockholder becoming an Interested Stockholder.

(e) After such Interested Stockholder has become an Interested Stockholder, such Interested Stockholder shall not have received the benefit, directly or indirectly (except proportionately as a stockholder), of any loans, advances, guarantees, pledges or other financial assistance or any tax credits or other tax advantages provided by the Corporation, whether in anticipation of or in connection with such Business Combination or otherwise.

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(f) A proxy or information statement describing the proposed Business Combination and complying with the requirements of the Securities Exchange Act of 1934 and the rules and regulations thereunder (or any subsequent provisions replacing such Act, rules or regulations) shall be mailed to stockholders of the Corporation at least 30 days prior to the consummation of such Business Combination (whether or not such proxy or information statement is required to be mailed pursuant to such Act or subsequent provisions).

C. For the purposes of this Article EIGHTH:

1. A "Person" shall include an individual, a group acting in concert, a corporation, a partnership, an association, a joint venture, a pool, a joint stock company, a trust, an unincorporated organization or similar company, a syndicate or any other group formed for the purpose of acquiring, holding or disposing of securities.

2. "Interested Stockholder" shall mean any person (other than the Corporation or any holding company or Subsidiary thereof) who or which:

(a) is the beneficial owner, directly or indirectly, of more than 10% of the voting power of the outstanding Voting Stock; or

(b) is an Affiliate of the Corporation and at any time within the two-year period immediately prior to the date in question was the beneficial owner, directly or indirectly, of 10% or more of the voting power of the then-outstanding Voting Stock; or

(c) is an assignee of or has otherwise succeeded to any shares of Voting Stock which were at any time within the two-year period immediately prior to the date in question beneficially owned by an Interested Stockholder, if such assignment or succession shall have occurred in the course of a transaction or series of transactions not involving a public offering within the meaning of the Securities Act of 1933.

3. For purposes of this Article EIGHTH, "beneficial ownership" shall be determined in the manner provided in Section C of Article FOURTH hereof.

4. "Affiliate" and "Associate" shall have the respective meanings ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under the Securities Exchange Act of 1934, as in effect on the date of filing of this Certificate of Incorporation.

5. "Subsidiary" means any corporation of which a majority of any class of equity security is owned, directly or indirectly, by the Corporation; provided, however, that for the purposes of the definition of Interested Stockholder set forth in paragraph 2 of this section, the term "Subsidiary" shall mean only a corporation of which a majority of each class of equity security is owned, directly or indirectly, by the Corporation.

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6. "Disinterested Director" means any member of the Board of Directors who is unaffiliated with the Interested Stockholder and was a member of the Board of Directors prior to the time that the Interested Stockholder became an Interested Stockholder, and any Director who is thereafter chosen to fill any vacancy of the Board of Directors or who is elected and who, in either event, is unaffiliated with the Interested Stockholder and in connection with his or her initial assumption of office is recommended for appointment or election by a majority of Disinterested Directors then on the Board of Directors.

7. "Fair Market Value" means: (a) in the case of stock, the highest closing sales price of the stock during the 30-day period immediately preceding the date in question of a share of such stock on the National Association of Securities Dealers Automated Quotation System or any system then in use, or, if such stock is admitted to trading on a principal United States securities exchange registered under the Securities Exchange Act of 1934, Fair Market Value shall be the highest sales price reported during the 30-day period preceding the date in question, or, if no such quotations are available, the Fair Market Value on the date in question of a share of such stock as determined by the Board of Directors in good faith, in each case with respect to any class of stock, appropriately adjusted for any dividend or distribution in shares of such stock or any stock split or reclassification of outstanding shares of such stock into a greater number of shares of such stock or any combination or reclassification of outstanding shares of such stock into a smaller number of shares of such stock, and (b) in the case of property other than cash or stock, the Fair Market Value of such property on the date in question as determined by the Board of Directors in good faith.

8. Reference to "Highest Per Share Price" shall in each case with respect to any class of stock reflect an appropriate adjustment for any dividend or distribution in shares of such stock or any stock split or reclassification of outstanding shares of such stock into a greater number of shares of such stock or any combination or reclassification of outstanding shares of such stock into a smaller number of shares of such stock.

9. In the event of any Business Combination in which the Corporation survives, the phrase "consideration other than cash to be received" as used in subparagraphs (a) and (b) of paragraph 2 of
Section B of this Article EIGHTH shall include the shares of Common Stock and/or the shares of any other class of outstanding Voting Stock retained by the holders of such shares.

D. A majority of the Directors of the Corporation shall have the power and duty to determine for the purposes of this Article EIGHTH, on the basis of information known to them after reasonable inquiry (a) whether a person is an Interested Stockholder; (b) the number of shares of Voting Stock beneficially owned by any person; (c) whether a person is an Affiliate or Associate of another; and (d) whether the assets which are the subject of any Business Combination have, or the consideration to be received for the issuance or transfer of securities by the Corporation or any Subsidiary in any Business Combination has an aggregate Fair Market Value equaling or exceeding 25% of the combined Fair Market Value of the common stock of the Corporation and its Subsidiaries. A majority of the Directors shall have the further power to interpret all of the terms and provisions of this Article EIGHTH.

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E. Nothing contained in this Article EIGHTH shall be construed to relieve any Interested Stockholder from any fiduciary obligation imposed by law.

F. Notwithstanding any other provisions of this Certificate of Incorporation or any provision of law which might otherwise permit a lesser vote or no vote, but in addition to any affirmative vote of the holders of any particular class or series of the Voting Stock required by law, this Certificate of Incorporation or any Preferred Stock Designation, the affirmative vote of the holders of at least 80 percent of the voting power of all of the then-outstanding shares of the Voting Stock, voting together as a single class, shall be required to alter, amend or repeal this Article EIGHTH.

NINTH: The Board of Directors of the Corporation, when evaluating any offer of another Person (as defined in Article EIGHTH hereof) to (A) make a tender or exchange offer for any equity security of the Corporation, (B) merge or consolidate the Corporation with another corporation or entity or (C) purchase or otherwise acquire all or substantially all of the properties and assets of the Corporation, may, in connection with the exercise of its judgment in determining what is in the best interest of the Corporation and its stockholders, give due consideration to all relevant factors, including, without limitation, the social and economic effect of acceptance of such offer on: the Corporation's present and future customers and employees and those of its Subsidiaries (as defined in Article EIGHTH hereof); the communities in which the Corporation and its Subsidiaries operate or are located; the ability of the Corporation to fulfill its corporate objectives as a savings or bank holding company; and the ability of its subsidiary bank to fulfill its corporate objectives under applicable statutes and regulations.

TENTH:

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B. The right to indemnification conferred in Section A of this Article TENTH shall include the right to be paid by the Corporation the expenses incurred in defending any such proceeding in advance of its final disposition (hereinafter an "advancement of expenses"); provided, however, that, if the Delaware General Corporation Law requires, an advancement of expenses incurred by an indemnitee in his or her capacity as a Director of Officer (and not in any other capacity in which service was or is rendered by such indemnitee, including, without limitation, service to an employee benefit plan) shall be made only upon delivery to the Corporation of an undertaking (hereinafter an "undertaking"), by or on behalf of such indemnitee, to repay all amounts so advanced if it shall ultimately be determined by final judicial decision from which there is no further right to appeal (hereinafter a "final adjudication") that such indemnitee is not entitled to be indemnified for such expenses under this Section or otherwise. The rights to indemnification and to the advancement of expenses conferred in Sections A and B of this Article TENTH shall be contract rights and such rights shall continue as to an indemnitee who has ceased to be a Director, Officer, employee or agent and shall inure to the benefit of the indemnitee's heirs, executors and administrators.

C. If a claim under Section A or B of this Article TENTH is not paid in full by the Corporation within sixty days after a written claim has been received by the Corporation, except in the case of a claim for an advancement of expenses, in which case the applicable period shall be twenty days, the indemnitee may at any time thereafter bring suit against the Corporation to recover the unpaid amount of the claim. If successful in whole or in part in any such suit, or in a suit brought by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the indemnitee shall be entitled to be paid also the expense of prosecuting or defending such suit. In
(i) any suit brought by the indemnitee to enforce a right to indemnification hereunder (but not in a suit brought by the indemnitee to enforce a right to an advancement of expenses) it shall be a defense that, and (ii) in any suit by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking the Corporation shall be entitled to recover such expenses upon a final adjudication that, the indemnitee has not met any applicable standard for indemnification set forth in the Delaware General Corporation Law. Neither the failure of the Corporation (including its Board of Directors, independent legal counsel, or its stockholders) to have made a determination prior to the commencement of such suit that indemnification of the indemnitee is proper in the circumstances because the indemnitee has met the applicable standard of conduct set forth in the Delaware General Corporation Law, nor an actual determination by the Corporation (including its Board of Directors, independent legal counsel, or its stockholders) that the indemnitee has not met such applicable standard of conduct, shall create a presumption that the indemnitee has not met the applicable standard of conduct or, in the case of such a suit brought by the indemnitee, be a defense to such suit. In any suit brought by the indemnitee to enforce a right to indemnification or to an advancement of expenses hereunder, or by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the burden of proving that the indemnitee is not entitled to be indemnified, or to such advancement of expenses, under this Article TENTH or otherwise shall be on the Corporation.

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ELEVENTH: A Director of this Corporation shall not be personally liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a Director, except for liability (i) for any breach of the Director's duty of loyalty to the Corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the Delaware General Corporation Law, or (iv) for any transaction from which the Director derived an improper personal benefit. If the Delaware General Corporation Law is amended to authorize corporate action further eliminating or limiting the personal liability of Directors, then the liability of a Director of the Corporation shall be eliminated or limited to the fullest extent permitted by the Delaware General Corporation Law, as so amended.

Any repeal or modification of the foregoing paragraph by the stockholders of the Corporation shall not adversely affect any right or protection of a Director of the Corporation existing at the time of such repeal or modification.

TWELFTH: The Corporation reserves the right to amend or repeal any provision contained in this Certificate of Incorporation in the manner prescribed by the laws of the State of Delaware and all rights conferred upon stockholders are granted subject to this reservation; provided, however, that, notwithstanding any other provision of this Certificate of Incorporation or any provision of law which might otherwise permit a lesser vote or no vote, but in addition to any vote of the holders of any class or series of the stock of the Corporation required by law or by this Certificate of Incorporation, the affirmative vote of the holders of at least 80 percent of the voting power of all of the then-outstanding shares of the capital stock of the Corporation entitled to vote generally in the election of Directors (after giving effect to the provisions of Article FOURTH), voting together as a single class, shall be required to amend or repeal this Article TWELFTH, Section C of Article FOURTH, Sections C or D of Article FIFTH, Article SIXTH, Article SEVENTH, Article EIGHTH or Article TENTH.

THIRTEENTH: The name and mailing address of the sole incorporator are as follows:

NAME                                         MAILING ADDRESS
----                                         ---------------
Robert B. Pomerenk, Esquire                  5335 Wisconsin Avenue, N.W.
                                             Suite 400
                                             Washington, D.C.  20015

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I, THE UNDERSIGNED, being the incorporator, for the purpose of forming a corporation under the laws of the State of Delaware, do make, file and record this Certificate of Incorporation, do certify that the facts herein stated are true, and accordingly, have hereto set my hand this ____ day of April, 2002.

Robert B. Pomerenk, Esquire Incorporator

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EXHIBIT E

BYLAWS OF THE HOLDING COMPANY

BYLAWS

BROOKLINE BANCORP, INC.

ARTICLE I - STOCKHOLDERS

SECTION 1. ANNUAL MEETING.

An annual meeting of the stockholders, for the election of Directors to succeed those whose terms expire and for the transaction of such other business as may properly come before the meeting, shall be held at such place, on such date, and at such time as the Board of Directors shall each year fix, which date shall be within thirteen (13) months subsequent to the later of the date of incorporation or the last annual meeting of stockholders.

SECTION 2. SPECIAL MEETINGS.

Subject to the rights of the holders of any class or series of preferred stock of the Corporation, special meetings of stockholders of the Corporation may be called only by the Board of Directors pursuant to a resolution adopted by a majority of the total number of Directors which the Corporation would have if there were no vacancies on the Board of Directors (hereinafter the "Whole Board").

SECTION 3. NOTICE OF MEETINGS.

Written notice of the place, date, and time of all meetings of the stockholders shall be given, not less than ten (10) nor more than sixty (60) days before the date on which the meeting is to be held, to each stockholder entitled to vote at such meeting, except as otherwise provided herein or required by law (meaning, here and hereinafter, as required from time to time by the Delaware General Corporation Law or the Certificate of Incorporation of the Corporation).

When a meeting is adjourned to another place, date or time, written notice need not be given of the adjourned meeting if the place, date and time thereof are announced at the meeting at which the adjournment is taken; provided, however, that if the date of any adjourned meeting is more than thirty
(30) days after the date for which the meeting was originally noticed, or if a new record date is fixed for the adjourned meeting, written notice of the place, date, and time of the adjourned meeting shall be given in conformity herewith. At any adjourned meeting, any business may be transacted which might have been transacted at the original meeting.

SECTION 4. QUORUM.

At any meeting of the stockholders, the holders of a majority of all of the shares of the stock entitled to vote at the meeting, present in person or by proxy (after giving effect to the provisions of Article FOURTH of the Corporation's Certificate of Incorporation), shall constitute a quorum for all purposes, unless or except to the extent that the presence of a larger number may be required by law. Where a separate vote by a class or classes is required, a majority of those represented by proxy (after giving effect to the provisions of Article FOURTH

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of the Corporation's Certificate of Incorporation) shall constitute a quorum entitled to take action with respect to that vote on that matter.

If a quorum shall fail to attend any meeting, the chairman of the meeting or the holders of a majority of the shares of stock entitled to vote who are present, in person or by proxy, may adjourn the meeting to another place, date, or time.

If a notice of any adjourned special meeting of stockholders is sent to all stockholders entitled to vote thereat, stating that it will be held with those present in person or by proxy constituting a quorum, then except as otherwise required by law, those present in person or by proxy at such adjourned meeting shall constitute a quorum, and all matters shall be determined by a majority of the votes cast at such meeting.

SECTION 5. ORGANIZATION.

Such person as the Board of Directors may have designated or, in the absence of such a person, the Chairman of the Board of the Corporation or, in his or her absence, such person as may be chosen by the holders of a majority of the shares entitled to vote who are present, in person or by proxy, shall call to order any meeting of the stockholders and act as chairman of the meeting. In the absence of the Secretary of the Corporation, the secretary of the meeting shall be such person as the chairman appoints.

SECTION 6. CONDUCT OF BUSINESS.

(a) The chairman of any meeting of stockholders shall determine the order of business and the procedures at the meeting, including such regulation of the manner of voting and the conduct of discussion as seem to him or her in order. The date and time of the opening and closing of the polls for each matter upon which the stockholders, will vote at the meeting shall be announced at the meeting.

(b) At any annual meeting of the stockholders, only such business shall be conducted as shall have been brought before the meeting (i) by or at the direction of the Board of Directors or (ii) by any stockholder of the Corporation who is entitled to vote with respect thereto and who complies with the notice procedures set forth in this Section 6(b). For business to be properly brought before an annual meeting by a stockholder, the business must relate to a proper subject matter for stockholder action and the stockholder must have given timely notice thereof in writing to the Secretary of the Corporation. To be timely, a stockholder's notice must be delivered or mailed to and received at the principal executive offices of the Corporation not less than ninety (90) days prior to the anniversary date of the mailing of proxy materials by the Corporation in connection with the immediately preceding annual meeting of stockholders of the Corporation; provided, however, that in the event that less than one hundred (100) days' notice or prior public disclosure of the date of the meeting is given or made to stockholders, notice by the stockholder to be timely must be received not later than the close of business on the 10th day following the day on which such notice of the date of the annual meeting was mailed or such public disclosure was made. A stockholder's notice to the Secretary shall set forth as to each matter such stockholder proposes to bring before the annual meeting (i) a brief description of the business desired to be brought before

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the annual meeting and the reasons for conducting such business at the annual meeting, (ii) the name and address, as they appear on the Corporation's books, of the stockholder proposing such business, (iii) the class and number of shares of the Corporation's capital stock that are beneficially owned by such stockholder and (iv) any material interest of such stockholder in such business. Notwithstanding anything in these Bylaws to the contrary, no business shall be brought before or conducted at an annual meeting except in accordance with the provisions of this Section 6(b). The Officer of the Corporation or other person presiding over the annual meeting shall, if the facts so warrant, determine and declare to the meeting that business was not properly brought before the meeting in accordance with the provisions of this Section 6(b) and, if he should so determine, he shall so declare to the meeting and any such business so determined to be not properly brought before the meeting shall not be transacted.

At any special meeting of the stockholders, only such business shall be conducted as shall have been brought before the meeting by or at the direction of the Board of Directors.

(c) Only persons who are nominated in accordance with the procedures set forth in these Bylaws shall be eligible for election as Directors. Nominations of persons for election to the Board of Directors of the Corporation may be made at a meeting of stockholders at which directors are to be elected only (i) by or at the direction of the Board of Directors or (ii) by any stockholder of the Corporation entitled to vote for the election of Directors at the meeting who complies with the notice procedures set forth in this Section 6(c). Such nominations, other than those made by or at the direction of the Board of Directors, shall be made by timely notice in writing to the Secretary of the Corporation. To be timely, a stockholder's notice shall be delivered or mailed to and received at the principal executive offices of the Corporation not less than ninety (90) days prior to the anniversary date of the mailing of proxy materials by the Corporation in connection with the immediately preceding annual meeting of stockholders of the Corporation; provided, however, that in the event that less than one hundred (100) days' notice or prior disclosure of the date of the meeting is given or made to stockholders, notice by the stockholder to be timely must be so received not later than the close of business on the 10th day following the day on which such notice of the date of the meeting was mailed or such public disclosure was made. Such stockholder's notice shall set forth (i) as to each person whom such stockholder proposes to nominate for election or re-election as a Director, all information relating to such person that is required to be disclosed in solicitations of proxies for election of directors, or is otherwise required, in each case pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended (including such person's written consent to being named in the proxy statement as a nominee and to serving as a director if elected); and (ii) as to the stockholder giving the notice (x) the name and address, as they appear on the Corporation's books, of such stockholder and (y) the class and number of shares of the Corporation's capital stock that are beneficially owned by such stockholder. At the request of the Board of Directors, any person nominated by the Board of Directors for election as a Director shall furnish to the Secretary of the Corporation that information required to be set forth in a stockholder's notice of nomination which pertains to the nominee. No person shall be eligible for election as a Director of the Corporation unless nominated in accordance with the provisions of this Section 6(c). The Officer of the Corporation or other person presiding at the meeting shall, if the facts so warrant, determine that a nomination was not made in accordance with such provisions and, if he or she shall so determine, he or she shall so declare to the meeting and the defective nomination shall be disregarded.

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SECTION 7. PROXIES AND VOTING.

At any meeting of the stockholders, every stockholder entitled to vote may vote in person or by proxy authorized by an instrument in writing filed in accordance with the procedure established for the meeting. Any facsimile telecommunication or other reliable reproduction of the writing or transmission created pursuant to this paragraph, may be substituted or used in lieu of the original writing or transmission for any and all purposes for which the original writing or transmission could be used, provided that such copy, facsimile telecommunication or other reproduction shall be a complete reproduction of the entire original writing or transmission.

All voting, including on the election of Directors but excepting where otherwise required by law or by the governing documents of the Corporation, may be made by a voice vote; provided, however, that upon demand therefor by a stockholder entitled to vote or his or her proxy, a stock vote shall be taken. Every stock vote shall be taken by ballot, each of which shall state the name of the stockholder or proxy voting and such other information as may be required under the procedures established for the meeting. The Corporation shall, in advance of any meeting of stockholders, appoint one or more inspectors to act at the meeting and make a written report thereof. The Corporation may designate one or more persons as alternate inspectors to replace any inspector who fails to act. If no inspector or alternate is able to act at a meeting of stockholders, the person presiding at the meeting shall appoint one or more inspectors to act at the meeting. Each inspector, before entering upon the discharge of his duties, shall take and sign an oath faithfully to execute the duties of inspector with strict impartiality and according to the best of his ability.

All elections of Directors shall be determined by a plurality of the votes cast, and except as otherwise required by law, all other matters shall be determined by a majority of the votes cast.

SECTION 8. STOCK LIST.

A complete list of stockholders entitled to vote at any meeting of stockholders, arranged in alphabetical order for each class of stock and showing the address of each such stockholder and the number of shares registered in his or her name, shall be open to the examination of any such stockholder, for any purpose germane to the meeting, during ordinary business hours for a period of at least ten (10) days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or if not so specified, at the place where the meeting is to be held.

The stock list shall also be kept at the place of the meeting during the whole time thereof and shall be open to the examination of any such stockholder who is present. This list shall presumptively determine the identity of the stockholders entitled to vote at the meeting and the number of shares held by each of them.

SECTION 9. CONSENT OF STOCKHOLDERS IN LIEU OF MEETING.

Subject to the rights of the holders of any class of series of preferred stock of the Corporation, any action required or permitted to be taken by the stockholders of the Corporation must be effected

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at an annual or special meeting of stockholders of the Corporation and may not be effected by any consent in writing by such stockholders.

ARTICLE II - BOARD OF DIRECTORS

SECTION 1. GENERAL POWERS NUMBER AND TERM OF OFFICE.

The business and affairs of the Corporation shall be under the direction of its Board of Directors. The number of Directors who shall constitute the Whole Board shall be such number as the Board of Directors shall from time to time have designated, except in the absence of such designation such number shall be 14. The Board of Directors shall annually elect a Chairman of the Board from among its members who shall, when present, preside at its meetings.

The Directors, other than those who may be elected by the holders of any class or series of Preferred Stock, shall be divided, with respect to the time for which they severally hold office, into three classes, with the term of office of the first class to expire at the first annual meeting of stockholders, the term of office of the second class to expire at the annual meeting of stockholders one year thereafter and the term of office of the third class to expire at the annual meeting of stockholders two years, thereafter, with each Director to hold office until his or her successor shall have been duly elected and qualified. At each annual meeting of stockholders, Directors elected to succeed those Directors whose terms then expire shall be elected for a term of office to expire at the third succeeding annual meeting of stockholders after their election, with each Director to hold office until his or her successor shall have been duly elected and qualified.

SECTION 2. VACANCIES AND NEWLY CREATED DIRECTORSHIPS.

Subject to the rights of the holders of any class or series of Preferred Stock, and unless the Board of Directors otherwise determines, newly created directorships resulting from any increase in the authorized number of directors or any vacancies in the Board of Directors resulting from death, resignation, retirement, disqualification, removal from office or other cause may be filled only by a majority vote of the Directors then in office, though less than a quorum, and Directors so chosen shall hold office for a term expiring at the annual meeting of stockholders at which the term of office of the class to which they have been elected expires and until such Director's successor shall have been duly elected and qualified. No decrease in the number of authorized directors constituting the Board shall shorten the term of any incumbent Director.

SECTION 3. REGULAR MEETINGS.

Regular meetings of the Board of Directors shall be held at such place or places, on such date or dates, and at such time or times as shall have been established by the Board of Directors and publicized among all Directors. A notice of each regular meeting shall not be required.

SECTION 4. SPECIAL MEETINGS.

Special meetings of the Board of Directors may be called by one-third (1/3) of the Directors then in office (rounded up to the nearest whole number), by the Chairman of the Board or the President and shall be held at such place, on such date, and at such time as they, or he or she, shall

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fix. Notice of the place, date, and time of each such special meeting shall be given each Director by whom it is not waived by mailing written notice not less than five (5) days before the meeting or by telegraphing or telexing or by facsimile transmission of the same not less than twenty-four (24) hours before the meeting. Unless otherwise indicated in the notice thereof, any and all business may be transacted at a special meeting.

SECTION 5. QUORUM.

At any meeting of the Board of Directors, a majority of the Whole Board shall constitute a quorum for all purposes. If a quorum shall fail to attend any meeting, a majority of those present may adjourn the meeting to another place, date, or time, without further notice or waiver thereof.

SECTION 6. PARTICIPATION IN MEETINGS BY CONFERENCE TELEPHONE.

Members of the Board of Directors, or of any committee thereof, may participate in a meeting of such Board or committee by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other and such participation shall constitute presence in person at such meeting.

SECTION 7. CONDUCT OF BUSINESS.

At any meeting of the Board of Directors, business shall be transacted in such order and manner as the Board may from time to time determine, and all matters shall be determined by the vote of a majority of the Directors present, except as otherwise provided herein or required by law. Action may be taken by the Board of Directors without a meeting if all members thereof consent thereto in writing, and the writing or writings are filed with the minutes of proceedings of the Board of Directors.

SECTION 8. POWERS.

The Board of Directors may, except as otherwise required by law, exercise all such powers and do all such acts and things as may be exercised or done by the Corporation, including, without limiting the generality of the foregoing, the unqualified power:

(1) To declare dividends, from time to time in accordance with law;

(2) To purchase or otherwise acquire any property, rights or privileges on such terms as it shall determine;

(3) To authorize the creation, making and issuance, in such form as it may determine, of written obligations of every kind, negotiable or non-negotiable, secured or unsecured, and to do all things necessary in connection therewith;

(4) To remove any Officer of the Corporation with or without cause, and from time to time to devolve the powers and duties of any Officer upon any other person for the time being;

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(5) To confer upon any Officer of the Corporation the power to appoint, remove and suspend subordinate Officers, employees and agents;

(6) To adopt from time to time such stock, option, stock purchase, bonus or other compensation plans for Directors, Officers, employees and agents of the Corporation and its subsidiaries as it may determine;

(7) To adopt from time to time such insurance, retirement, and other benefit plans for Directors, Officers, employees and agents of the Corporation and its subsidiaries as it may determine; and,

(8) To adopt from time to time regulations, not inconsistent with these Bylaws, for the management of the Corporation's business and affairs.

SECTION 9. COMPENSATION OF DIRECTORS.

Directors, as such, may receive, pursuant to resolution of the Board of Directors, fixed fees and other compensation for their services as Directors, including, without limitation, their services as members of committees of the Board of Directors.

SECTION 10. QUALIFICATIONS.

Any person appointed or elected to the Board of Directors shall, in order to qualify as such, shall own at least 100 shares of the Corporation's common stock.

SECTION 11. AGE LIMITATION.

No person 78 years of age shall be eligible for election, reelection, appointment or reappointment to the Board of Directors. No director shall serve as such beyond the annual meeting of the Corporation's stockholders immediately following such director becoming 78 years of age. This provision shall not apply to persons who are appointed as the initial directors to the Corporation.

ARTICLE III - COMMITTEES

SECTION 1. COMMITTEES OF THE BOARD OF DIRECTORS.

The Board of Directors, by a vote of a majority of the Board of Directors, may from time to time designate committees of the Board, with such lawfully delegable powers and duties as it thereby confers, to serve at the pleasure of the Board and shall, for these committees and any others provided for herein, elect a Director or Directors to serve as the member or members, designating, if it desires, other Directors as alternate members who may replace any absent or disqualified member at any meeting of the committee. Any committee so designated may exercise the power and authority of the Board of Directors to declare a dividend, to authorize the issuance of stock or to adopt a certificate of ownership and merger pursuant to Section 253 of the Delaware General Corporation Law if the resolution which designates the committee or a supplemental resolution of the Board of Directors shall so provide. In the absence or disqualification of any member of any committee and

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any alternate member in his or her place, the member or members of the committee present at the meeting and not disqualified from voting, whether or not he or she or they constitute a quorum, may by unanimous vote appoint another member of the Board of Directors to act at the meeting in the place of the absent or disqualified member.

SECTION 2. CONDUCT OF BUSINESS.

Each committee may determine the procedural rules for meeting and conducting its business and shall act in accordance therewith, except as otherwise provided herein or required by law. Adequate provision shall be made for notice to members of all meetings; one-third (1/3) of the members shall constitute a quorum unless the committee shall consist of one (1) or two (2) members, in which event one (1) member shall constitute a quorum; and all matters shall be determined by a majority vote of the members present. Action may be taken by any committee without a meeting if all members thereof consent thereto in writing, and the writing or writings are filed with the minutes of the proceedings of such committee.

SECTION 3. NOMINATING COMMITTEE

The Board of Directors may appoint a Nominating Committee of the Board, consisting of not less than three (3) members. The Nominating Committee shall have authority (a) to review any nominations for election to the Board of Directors made by a stockholder of the Corporation pursuant to Section 6(c)(ii) of Article I of these Bylaws in order to determine compliance with such Bylaw and (b) to recommend to the Whole Board nominees for election to the Board of Directors to replace those Directors whose terms expire at the annual meeting of stockholders next ensuing.

ARTICLE IV - OFFICERS

SECTION 1. GENERALLY.

(a) The Board of Directors as soon as may be practicable after the annual meeting of stockholders shall choose a Chairman of the Board, a Chief Executive Officer and President, one or more Vice Presidents, a Secretary and a Treasurer and from time to time may choose such other officers as it may deem proper. The Chairman of the Board shall be chosen from among the Directors. Any number of offices may be held by the same person.

(b) The term of office of all Officers shall be until the next annual election of Officers and until their respective successors are chosen but any Officer may be removed from office at any time by the affirmative vote of a majority of the authorized number of Directors then constituting the Board of Directors.

(c) All Officers chosen by the Board of Directors shall have such powers and duties as generally pertain to their respective Offices, subject to the specific provisions of this ARTICLE IV. Such officers shall also have such powers and duties as from time to time may be conferred by the Board of Directors or by any committee thereof.

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SECTION 2. CHAIRMAN OF THE BOARD OF DIRECTORS.

The Chairman of the Board shall, subject to the provisions of these Bylaws and to the direction of the Board of Directors, serve in general executive capacity and unless the Board has designated another person, when present, shall preside at all meetings of the stockholders of the Corporation. The Chairman of the Board shall perform all duties and have all powers which are commonly incident to the office of Chairman of the Board or which are delegated to him or her by the Board of Directors. He or she shall have power to sign all stock certificates, contracts and other instruments of the Corporation which are authorized.

SECTION 3. PRESIDENT AND CHIEF EXECUTIVE OFFICER.

The President and Chief Executive Officer (the "President") shall have general responsibility for the management and control of the business and affairs of the Corporation and shall perform all duties and have all powers which are commonly incident to the offices of President and Chief Executive Officer or which are delegated to him or her by the Board of Directors. Subject to the direction of the Board of Directors, the President shall have power to sign all stock certificates, contracts and other instruments of the Corporation which are authorized and shall have general supervision of all of the other Officers (other than the Chairman of the Board), employees and agents of the Corporation.

SECTION 4. VICE PRESIDENT.

The Vice President or Vice Presidents shall perform the duties of the President in his absence or during his inability to act. In addition, the Vice Presidents shall perform the duties and exercise the powers usually incident to their respective offices and/or such other duties and powers as may be properly assigned to them by the Board of Directors, the Chairman of the Board or the President. A Vice President or Vice Presidents may be designated as Executive Vice President or Senior Vice President.

SECTION 5. SECRETARY.

The Secretary or Assistant Secretary shall issue notices of meetings, shall keep their minutes, shall have charge of the seal and the corporate books, shall perform such other duties and exercise such other powers as are usually incident to such office and/or such other duties and powers as are properly assigned thereto by the Board of Directors, the Chairman of the Board or the President. Subject to the direction of the Board of Directors, the Secretary shall have the power to sign all stock certificates.

SECTION 6. TREASURER.

The Treasurer shall be the Comptroller of the Corporation and shall have the responsibility for maintaining the financial records of the Corporation. He or she shall make such disbursements of the funds of the Corporation as are authorized and shall render from time to time an account of all such transactions and of the financial condition of the Corporation. The Treasurer shall also perform such other duties as the Board of Directors may from time to time prescribe. Subject to the direction of the Board of Directors, the Treasurer shall have the power to sign all stock certificates.

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SECTION 7. ASSISTANT SECRETARIES AND OTHER OFFICERS.

The Board of Directors may appoint one or more Assistant Secretaries and such other Officers who shall have such powers and shall perform such duties as are provided in these Bylaws or as may be assigned to them by the Board of Directors, the Chairman of the Board or the President.

SECTION 8. ACTION WITH RESPECT TO SECURITIES OF OTHER CORPORATIONS.

Unless otherwise directed by the Board of Directors, the President or any Officer of the Corporation authorized by the President shall have power to vote and otherwise act on behalf of the Corporation, in person or by proxy, at any meeting of stockholders of or with respect to, any action of stockholders of any other corporation in which this Corporation may hold securities and otherwise to exercise any and all rights and powers which this Corporation may possess by reason of its ownership of securities in such other corporation.

ARTICLE V - STOCK

SECTION 1. CERTIFICATES OF STOCK.

Each stockholder shall be entitled to a certificate signed by, or in the name of the Corporation by, the Chairman of the Board or the President, and by the Secretary or an Assistant Secretary, or any Treasurer or Assistant Treasurer, certifying the number of shares owned by him or her. Any or all of the signatures on the certificate may be by facsimile.

SECTION 2. TRANSFERS OF STOCK.

Transfers of stock shall be made only upon the transfer books of the Corporation kept at an office of the Corporation or by transfer agents designated to transfer shares of the stock of the Corporation. Except where a certificate is issued in accordance with Section 4 of Article V of these Bylaws, an outstanding certificate for the number of shares involved shall be surrendered for cancellation before a new certificate is issued therefor.

SECTION 3. RECORD DATE.

In order that the Corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders, or to receive payment of any dividend or other distribution or allotment of any rights or to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the Board of Directors may fix a record date, which record date shall not precede the date on which the resolution fixing the record date is adopted and which record date shall not be more than sixty (60) nor less than ten (10) days before the date of any meeting of stockholders, nor more than sixty (60) days prior to the time for such other action as hereinbefore described; provided, however, that if no record date is fixed by the Board of Directors, the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given or, if notice is waived, at the close of business on the next day preceding the day on which the meeting is held, and, for determining stockholders entitled to receive payment of any dividend or other distribution or allotment or rights or to exercise any rights of change, conversion or exchange

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of stock or for any other purpose, the record date shall be at the close of business on the day on which the Board of Directors adopts a resolution relating thereto.

A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for the adjourned meeting.

SECTION 4. LOST, STOLEN OR DESTROYED CERTIFICATES.

In the event of the loss, theft or destruction of any certificate of stock, another may be issued in its place pursuant to such regulations as the Board of Directors may establish concerning proof of such loss, theft or destruction and concerning the giving of a satisfactory bond or bonds of indemnity.

SECTION 5. REGULATIONS.

The issue, transfer, conversion and registration of certificates of stock shall be governed by such other regulations as the Board of Directors may establish.

ARTICLE VI - NOTICES

SECTION 1. NOTICES.

Except as otherwise specifically provided herein or required by law, all notices required to be given to any stockholder, Director, Officer, employee or agent shall be in writing and may in every instance be effectively given by hand delivery to the recipient thereof, by depositing such notice in the mails, postage paid, or by sending such notice by prepaid telegram or mailgram or other courier. Any such notice shall be addressed to such stockholder, Director, Officer, employee or agent at his or her last known address as the same appears on the books of the Corporation. The time when such notice is received, if hand delivered, or dispatched, if delivered through the mails or by telegram or mailgram or other courier, shall be the time of the giving of the notice.

SECTION 2. WAIVERS.

A written waiver of any notice, signed by a stockholder, Director, Officer, employee or agent, whether before or after the time of the event for which notice is to be given, shall be deemed equivalent to the notice required to be given to such stockholder, Director, Officer, employee or agent. Neither the business nor the purpose of any meeting need be specified in such a waiver.

ARTICLE VII - MISCELLANEOUS

SECTION 1. FACSIMILE SIGNATURES.

In addition to the provisions for use of facsimile signatures elsewhere specifically authorized in these Bylaws, facsimile signatures of any officer or officers of the Corporation may be used whenever and as authorized by the Board of Directors or a committee thereof.

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SECTION 2. CORPORATE SEAL.

The Board of Directors may provide a suitable seal, containing the name of the Corporation, which seal shall be in the charge of the Secretary. If and when so directed by the Board of Directors or a committee thereof, duplicates of the seal may be kept and used by the Treasurer or by an Assistant Secretary or an assistant to the Treasurer.

SECTION 3. RELIANCE UPON BOOKS, REPORTS AND RECORDS.

Each Director, each member of any committee designated by the Board of Directors, and each Officer of the Corporation shall, in the performance of his or her duties, be fully protected in relying in good faith upon the books of account or other records of the Corporation and upon such information, opinions, reports or statements presented to the Corporation by any of its Officers or employees, or committees of the Board of Directors so designated, or by any other person as to matters which such Director or committee member reasonably believes are within such other person's professional or expert competence and who has been selected with reasonable care by or on behalf of the Corporation.

SECTION 4. FISCAL YEAR.

The fiscal year of the Corporation shall end on December 31 of every year.

SECTION 5. TIME PERIODS.

In applying any provision of these Bylaws which requires that an act be done or not be done a specified number of days prior to an event or that an act be done during a period of a specified number of days prior to an event, calendar days shall be used, the day of the doing of the act shall be excluded, and the day of the event shall be included.

ARTICLE VIII - AMENDMENTS

The Board of Directors may amend, alter or repeal these Bylaws at any meeting of the Board, provided notice of the proposed change was given not less than two days prior to the meeting. The stockholders shall also have power to amend, alter or repeal these Bylaws at any meeting of stockholders provided notice of the proposed change was given in the notice of the meeting; provided, however, that, notwithstanding any other provisions of the Bylaws or any provision of law which might otherwise permit a lesser vote or no vote, but in addition to any affirmative vote of the holders of any particular class or series of the voting stock required by law, the Certificate of Incorporation, any Preferred Stock Designation or these Bylaws, the affirmative votes of the holders of at least 80% of the voting power of all the then-outstanding shares of the Voting Stock, voting together as a single class, shall be required to alter, amend or repeal any provisions of these Bylaws.

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Exhibit 4

INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE

BROOKLINE BANCORP, INC.
BROOKLINE, MASSACHUSETTS

$0.01 par value common stock--fully paid and non-assessable

This certifies that _____________________________ is the owner of __________ shares of the common stock of Brookline Bancorp, Inc. (the "Corporation"), a Delaware corporation.

The shares evidenced by this certificate are transferable only on the stock transfer books of the Corporation by the holder of record hereof, in person or by his duly authorized attorney or legal representative, upon surrender of this certificate properly endorsed. This Certificate is not valid until countersigned and registered by the Corporation's transfer agent and registrar. THIS SECURITY IS NOT A DEPOSIT OR ACCOUNT AND IS NOT FEDERALLY INSURED OR GUARANTEED.

IN WITNESS WHEREOF, the Corporation has caused this certificate to be executed by the facsimile signatures of its duly authorized officers and has caused its seal to be affixed hereto.

DATED:____________________

Secretary (SEAL) President

The shares evidenced by this Certificate are subject to a limitation contained in the Certificate of Incorporation to the effect that in no event shall any record owner of any outstanding Common Stock which is beneficially owned, directly or indirectly, by a person who beneficially owns in excess of 10% of the outstanding shares of Common Stock (the "Limit") be entitled or permitted to any vote in respect of shares held in excess of the Limit.

The Board of Directors of the Corporation is authorized by resolution or resolutions, from time to time adopted, to provide for the issuance of serial preferred stock in series and to fix and state the voting powers, designations, preferences, limitations and restrictions thereof. The Corporation will furnish to any shareholder upon request and without charge a full description of each class of stock and any series thereof.

The shares represented by this Certificate may not be cumulatively voted on any matter. The Certificate of Incorporation requires the affirmative vote of the holders of at least 80% of the voting stock of the Corporation, voting together as a single class, to approve certain transactions and to amend certain provisions of the Certificate of Incorporation.

The following abbreviations when used in the inscription on the face of this certificate, shall be construed as though they were written out in full according to applicable laws or regulations.

TEN COM - as tenants in common    UNIF GIFT MIN ACT -        Custodian
                                                     -------          ---------
                                                      (CUST)            (MINOR)
TEN ENT - as tenants by the entireties
                                           Under Uniform Transfers to Minors Act
JT TEN - as joint tenants with right
         of survivorship and not as         -----------------------------------
         tenants in common(STATE)                         (STATE)

Additional abbreviations may also be used though not in the above list

For value received, ____________ hereby sell, assign and transfer unto

PLEASE INSERT SOCIAL SECURITY NUMBER OR OTHER IDENTIFYING NUMBER

(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING POSTAL ZIP CODE OF
ASSIGNEE)

Shares of

the Common Stock represented by the within Certificate, and do hereby irrevocably constitute and appoint ___________________________________________ Attorney to transfer the said shares on the books of the within named corporation with full power of substitution in the premises.

Dated, _____________________

In the presence of Signature:

NOTE: THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME OF THE STOCKHOLDER(S) AS WRITTEN UPON THE FACE OF THE CERTIFICATE, IN EVERY PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT, OR ANY CHANGE WHATSOEVER.

Exhibit 5

[Luse Lehman Gorman Pomerenk & Schick letterhead]

(202) 274-2000

April 5, 2002

The Board of Directors
Brookline Bancorp, Inc.
160 Washington Street
Brookline, Massachusetts 02445

RE: BROOKLINE BANCORP, INC.
COMMON STOCK PAR VALUE $.01 PER SHARE

Ladies and Gentlemen:

You have requested the opinion of this firm as to certain matters in connection with the offer and sale (the "Offering") of the common stock, par value $.01 per share ("Common Stock") of Brookline Bancorp, Inc. (the "Company"). We have reviewed the Company's Certificate of Incorporation, Registration Statement on Form S-1 (the "Form S-1"), as well as applicable statutes and regulations governing the Company and the offer and sale of the Common Stock.

We are of the opinion that upon the declaration of effectiveness of the Form S-1, the Common Stock, when sold, will be legally issued, fully paid and non-assessable.

This Opinion has been prepared for the use of the Company in connection with the Form S-1. We hereby consent to our firm being referenced under the caption "Legal Matters."

Very truly yours,

\s\  LUSE LEHMAN GORMAN POMERENK & SCHICK


LUSE LEHMAN GORMAN POMERENK & SCHICK
A PROFESSIONAL CORPORATION

Exhibit 8.2

April 4, 2002

Board of Directors
Brookline Bancorp, MHC
Brookline Bancorp, Inc.
Brookline Savings Bank
160 Washington Street
Brookline, Massachusetts 02147

Re: Plan of Conversion and Reorganization Brookline Bancorp, MHC
BROOKLINE BANCORP, INC.

Gentlemen:

All capitalized terms not otherwise defined in this letter have the meanings given such terms in the Plan of Conversion and Reorganization (the "Plan") adopted by the Board of Directors of Brookline Bancorp, MHC. (the "Mutual Holding Company") and Brookline Bancorp, Inc. (the "Company"). The Plan provides for the conversion of the Mutual Holding Company into the capital stock form of organization. The Mutual Holding Company currently owns a majority of the common stock of the Company, a federally chartered stock holding company (the "Holding Company"), which owns 100 percent of the common stock of Brookline Savings Bank (the "Bank"), a federally chartered community bank headquartered in Brookline, Massachusetts. Pursuant to the Plan, the Company will sell shares of common stock in an offering that will represent the ownership interest in the Company now owned by the Mutual Holding Company.

We understand that in accordance with the Plan, subscription rights to purchase shares of common stock in the Holding Company are to be issued to: (1) Eligible Account Holders; (2) Tax-Qualified Plans; (3) Supplemental Eligible Account Holders; and (4) Other Members. Based solely upon our observation that the subscription rights will be available to such parties without cost, will be legally non-transferable and of short duration, and will afford such parties the right only to purchase shares of common stock at the same price as will be paid by members of the general public in the community offering, but without undertaking any independent investigation of state or federal law or the position of the Internal Revenue Service with respect to this issue, we are of the belief that, as a factual matter:

(1) the subscription rights will have no ascertainable market value; and,

(2) the price at which the subscription rights are exercisable will not be more or less than the pro forma market value of the shares upon issuance.

Changes in the local and national economy, the legislative and regulatory environment, the stock market, interest rates, and other external forces (such as natural disasters or significant world events) may occur from time to time, often with great unpredictability and may materially impact the value of thrift stocks as a whole or the Company's value alone. Accordingly, no assurance can be given that persons who subscribe to shares of common stock in the subscription offering will thereafter be able to buy or sell such shares at the same price paid in the subscription offering.

Sincerely,

/s/ RP FINANCIAL, LC.


RP FINANCIAL, LC.

Exhibit 21

SUBSIDIARIES OF THE REGISTRANT

Brookline Bancorp, Inc.

------------------------------------    ----------------------------------------
      Brookline Savings Bank                    Brookline Securities Corp.
 (Federally chartered savings bank)      (Massachusetts securities corporation)
------------------------------------    ----------------------------------------


-----------------------  ----------------------
    BBS Investment        160 Associates, Inc.
      Corporation            (Massachusetts
    (Massachusetts            corporation)
securities corporation)
-----------------------  ----------------------


                         -------------------------

Brookline Preferred Capital Corporation (Massachusetts corporation - 99.9% owned by 160 Associates, Inc.)

Exhibit 23.2

CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

We have issued our report dated January 24, 2002 (except for the last paragraph of Note 4 which is as of March 1, 2002) accompanying the financial statements of Brookline Bancorp, Inc. and subsidiaries as contained in the Registration Statement on Form S-1 and the Form AC of Brookline Bancorp, Inc. and subsidiaries to be filed with the Securities and Exchange Commission and the Office of Thrift Supervision on or about April 8, 2002. We consent to the use of the aforementioned reports in the Registration Statement and Prospectus and to the use of our name as it appears under the caption "Experts".

                                       /s/ Grant Thornton LLP




Boston, Massachusetts
April 4, 2002

Exhibit 23.3

April 4, 2002

Board of Directors
Brookline Bancorp, MHC
Brookline Bancorp, Inc.
Brookline Savings Bank
160 Washington Street
Brookline, Massachusetts 02147

Members of the Board of Directors:

We hereby consent to the use of our firm's name in the Form AC Application for Conversion, and any amendments thereto, and in the Registration Statement on Form S-1, and any amendments thereto. We also hereby consent to the inclusion of, summary of and references to our Appraisal and our statement concerning subscription rights in such filings including the prospectus of Brookline Bancorp, Inc.

Sincerely,

RP FINANCIAL, LC.

/s/ Gregory E. Dunn


Gregory E. Dunn
Senior Vice President

Exhibit 99.1

RP FINANCIAL, LC.
Financial Services Industry Consultants

March 4, 2002

Mr. Richard P. Chapman, Jr.
President and Chief Executive Officer
Brookline Bancorp, Inc., subsidiary of
Brookline Bancorp, MHC
160 Washington Street
Brookline, Massachusetts 02447

Dear Mr. Chapman:

This letter sets forth the agreement between Brookline Bancorp, Inc. ("Brookline" or the "Company"), subsidiary of Brookline Bancorp, MHC, Brookline, Massachusetts (the "MHC"), and RP Financial, LC. ("RP Financial") for independent conversion appraisal services pertaining to the mutual-to-stock conversion of the MHC. The specific appraisal services to be rendered by RP Financial are described below. These appraisal services will be rendered by a team of two senior consultants on staff and will be directed by the undersigned.

DESCRIPTION OF APPRAISAL SERVICES

In conjunction with preparing the appraisal report, RP Financial will conduct a financial due diligence, including on-site interviews of senior management and reviews of financial and other documents and records, to gain insight into the operations, financial condition, profitability, market area, risks and various internal and external factors of Brookline, all of which will be considered in estimating the pro forma market value of the Company. RP Financial will prepare a detailed written valuation report of the Company that will be fully consistent with applicable federal regulatory guidelines and standard pro forma valuation practices. The appraisal report will include an analysis of the Company's financial condition and operating results, as well as an assessment of the Company's interest rate risk, credit risk and liquidity risk. The appraisal report will describe the Company's business strategies, market area, prospects for the future and the intended use of proceeds. A peer group analysis relative to comparable publicly-traded savings and banking institutions will be conducted for the purpose of determining appropriate valuation adjustments for the Company relative to the peer group.

We will review pertinent sections of the Company's prospectus and hold discussions with the Company to obtain necessary data and information for the appraisal report, including the impact of key deal elements on the pro forma market value, such as dividend policy, use of proceeds and reinvestment rate, tax rate, offering expenses, and the characteristics of stock plans.

WASHINGTON HEADQUARTERS

Rosslyn Center                                         Telephone (703) 528-1700
1700 North Moore Street, Suite 2210                     Fax No.: (703) 528-1788
Arlington, VA 22209                               Toll-Free No.: (866) 723-0594
www.rpfinancial.com                        E-Mail: wpommerening@rpfinancial.com

MR. RICHARD P. CHAPMAN, JR.
MARCH 4, 2002

PAGE 2

The appraisal report will establish a midpoint pro forma market value. The appraisal report may be periodically updated throughout the conversion process as appropriate. There will be at least one updated valuation that would be prepared at the time of the closing of the stock offering. RP Financial agrees to deliver the original appraisal report and subsequent updates, in writing, to the Company at the above address in conjunction with the filing of the regulatory applications. Subsequent updates will be filed promptly as certain events occur which would warrant the preparation and filing of such valuation updates. Further, RP Financial agrees to perform such other services as are necessary or required in connection with the regulatory review of the appraisal and respond to the regulatory comments, if any, regarding the valuation appraisal and subsequent updates. RP Financial expects to formally present the appraisal report, including the appraisal methodology, peer group selection and assumptions, to the Board of Trustees for review and acceptance.

FEE STRUCTURE AND PAYMENT SCHEDULE

The Company agrees to pay RP Financial a fixed fee of $70,000 for preparation of the original appraisal and $5,000 per updated appraisal, plus reimbursable expenses. Payment of these fees shall be made according to the following schedule:

o $10,000 upon execution of the letter of agreement engaging RP Financial's appraisal services; o $60,000 upon delivery of the original appraisal report concurrent with filing the regulatory applications; and

o $5,000 upon delivery of each updated appraisal (there will be at least one updated appraisal prepared concurrent with the end of the offering).

The Company will reimburse RP Financial for reasonable out-of-pocket expenses incurred in preparation of the valuation. Such out-of-pocket expenses will likely include travel, printing, telephone, facsimile, shipping, computer and data services. RP Financial will agree to limit reimbursable expenses in conjunction with the appraisal and business planning engagements to $7,500, subject to written authorization from the Company to exceed such level.

In the event the Company shall, for any reason, discontinue the proposed transaction prior to delivery of the completed documents set forth above and payment of the respective progress payment fees, the Company agrees to compensate RP Financial according to RP Financial's standard billing rates for consulting services based on accumulated and verifiable time expenses, not to exceed the respective fee caps noted above, after applying full credit to the initial $10,000 retainer fee towards such payment. RP Financial's standard billing rates range from $75 per hour for research associates to $250 per hour for managing directors.

MR. RICHARD P. CHAPMAN, JR.
MARCH 4, 2002

PAGE 3

If during the course of the proposed transaction, unforeseen events occur so as to materially change the nature or the work content of the services described in this contract, the terms of said contract shall be subject to renegotiation by the Company and RP Financial. Such unforeseen events shall include, but not be limited to, major changes in the conversion regulations, appraisal guidelines or processing procedures as they relate to conversion appraisals, major changes in management or procedures, operating policies or philosophies, and excessive delays or suspension of processing of conversion applications by the regulators such that completion of the conversion transaction requires the preparation by RP Financial of a new appraisal.

REPRESENTATIONS AND WARRANTIES

The Company and RP Financial agree to the following:

1. The Company agrees to make available or to supply to RP Financial such information with respect to its business and financial condition as RP Financial may reasonably request in order to provide the aforesaid valuation. Such information heretofore or hereafter supplied or made available to RP Financial shall include: annual financial statements, periodic regulatory filings and material agreements, debt instruments, off balance sheet assets or liabilities, commitments and contingencies, unrealized gains or losses and corporate books and records. All information provided by the Company to RP Financial shall remain strictly confidential (unless such information is otherwise made available to the public), and if the conversion is not consummated or the services of RP Financial are terminated hereunder, RP Financial shall upon request promptly return to the Company the original and any copies of such information.

2. The Company hereby represents and warrants to RP Financial that any information provided to RP Financial does not and will not, to the best of the Company's knowledge, at the times it is provided to RP Financial, contain any untrue statement of a material fact or in response to informational requests by RP Financial fail to state a material fact necessary to make the statements therein not false or misleading in light of the circumstances under which they were made.

3. (a) The Company agrees that it will indemnify and hold harmless RP Financial, any affiliates of RP Financial, the respective directors, officers, agents and employees of RP Financial or their successors and assigns who act for or on behalf of RP Financial in connection with the services called for under this agreement (hereinafter referred to as "RP Financial"), from and against any and all losses, claims, damages and liabilities (including, but not limited to, reasonable attorneys fees, all losses and expenses in connection with claims under the federal securities laws) attributable to (i) any untrue statement or alleged untrue statement of a material fact contained in the financial statements or other information furnished or otherwise provided by the Company to RP Financial, either orally or in writing; (ii) the omission or alleged omission of a material fact from the financial statements or other information furnished or otherwise made available by the Company to RP Financial; or (iii) any action or omission to act by the Company, or the Company's respective officers, directors, employees or agents, which action or omission is

MR. RICHARD P. CHAPMAN, JR.
MARCH 4, 2002

PAGE 4

undertaken in bad faith or is negligent. The Company will be under no obligation to indemnify RP Financial hereunder if a court determines that RP Financial was negligent or acted in bad faith with respect to any actions or omissions of RP Financial related to a matter for which indemnification is sought hereunder. Reasonable time devoted by RP Financial to situations for which indemnification is provided hereunder, shall be an indemnifiable cost payable by the Company at the normal hourly professional rate chargeable by such employee.

(b) RP Financial shall give written notice to the Company of such claim or facts within thirty days of the assertion of any claim or discovery of material facts upon which the RP Financial intends to base a claim for indemnification hereunder, including the name of counsel that RP Financial intends to engage in connection with any indemnification related matter. In the event the Company elects, within seven days of the receipt of the original notice thereof, to contest such claim by written notice to RP Financial, the Company shall not be obligated to make payments under Section 3(c), but RP Financial will be entitled to be paid any amounts payable by the Company hereunder, together with interest on such costs from the date incurred at the annual rate of prime plus two percent within five days after the final determination of such contest either by written acknowledgement of the Company or a final judgment of a court of competent jurisdiction, unless it is determined in accordance with Section 3(c) hereof that RP Financial is not entitled to indemnity hereunder. If the Company does not so elect to contest a claim for indemnification by RP Financial hereunder, RP Financial shall (subject to the Company's receipt of the written statement and undertaking under Section 3(c) hereof) be paid promptly and in any event within thirty days after receipt by the Company of billing statements or invoices for which RP Financial is entitled to reimbursement under Section 3(c) hereof.

(c) Subject to the Company's right to contest under Section 3(b) hereof, the Company shall pay for or reimburse the reasonable expenses, including attorneys' fees, incurred by RP Financial in advance of the final disposition of any proceeding within thirty days of the receipt of such request if RP Financial furnishes the Company: (1) a written statement of RP Financial's good faith belief that it is entitled to indemnification hereunder; and (2) a written undertaking to repay the advance if it ultimately is determined in a final adjudication of such proceeding that it or he is not entitled to such indemnification.

(d) In the event the Company does not pay any indemnified loss or make advance reimbursements of expenses in accordance with the terms of this agreement, RP Financial shall have all remedies available at law or in equity to enforce such obligation.

This agreement constitutes the entire understanding of the Company and RP Financial concerning the subject matter addressed herein, and such contract shall be governed and construed in accordance with the laws of the Commonwealth of Virginia. This agreement may not be modified, supplemented or amended except by written agreement executed by both parties.

Brookline and RP Financial are not affiliated, and neither Brookline nor RP Financial has an economic interest in, or is held in common with, the other and has not derived a significant

MR. RICHARD P. CHAPMAN, JR.
MARCH 4, 2002

PAGE 5

portion of its gross revenues, receipts or net income for any period from transactions with the other.

* * * * * * * * * * *

Please acknowledge your agreement to the foregoing by signing as indicated below and returning to RP Financial a signed copy of this letter, together with the initial retainer fee of $10,000.

Sincerely,

/s/ William E. Pommerening
---------------------------
William E. Pommerening
Chief Executive Officer and
Managing Director

Agreed To and Accepted By: Richard P. Chapman, Jr. /s/ Richard P. Chapman, Jr.
                                                   ---------------------------
                           President and Chief Executive Officer

Upon Authorization by the Board of Directors For: Brookline Bancorp, Inc., subsidiary of Brookline Bancorp, MHC Brookline, Massachusetts

Date Executed: March 29, 2002

Exhibit 99.2

CONVERSION APPRAISAL REPORT

BROOKLINE BANCORP, INC.

HOLDING COMPANY FOR
BROOKLINE SAVINGS BANK
BROOKLINE, MASSACHUSETTS

DATED AS OF:
MARCH 28, 2002

PREPARED BY:

RP FINANCIAL, LC.
1700 NORTH MOORE STREET
SUITE
2210

ARLINGTON, VIRGINIA 22209

March 28, 2002

Board of Directors
Brookline Bancorp, MHC
Brookline Bancorp, Inc.
Brookline Savings Bank
160 Washington Street
Brookline, Massachusetts 02147

Members of the Board of Directors:

At your request, we have completed and hereby provide an independent appraisal ("Appraisal") of the estimated pro forma market value of the common stock to be issued by Brookline Bancorp, Inc., Brookline, Massachusetts ("Brookline Bancorp" or the "Holding Company") in connection with the mutual-to-stock conversion of Brookline Bancorp, MHC (the "MHC"). The MHC currently has a majority ownership interest in, and its principal asset consists of, approximately 57.6 percent of the common stock of Brookline Bancorp (the "MHC Shares"), the mid-tier holding company for Brookline Savings Bank, Brookline, Massachusetts ("Brookline Savings" or the "Bank"). The remaining 42.4 percent of Brookline Bancorp's common stock is owned by public stockholders. Brookline Bancorp, organized in March 1998, owns 100 percent of the outstanding common stock of Brookline Savings. It is our understanding that Brookline Bancorp will offer its stock in a Subscription offering to the Bank's Eligible Account Holders, Supplemental Eligible Account Holders and Other Members. To the extent that shares remain available for purchase after satisfaction of all subscriptions received in the Subscription offering, the shares may be offered for sale in a Direct Community offering.

This Appraisal is furnished pursuant to the requirements of the Code of Federal Regulations 563b.7 and has been prepared in accordance with the "Guidelines for Appraisal Reports for the Valuation of Savings and Loan Associations Converting from Mutual to Stock Form of Organization" of the Office of Thrift Supervision ("OTS"), which have been adopted in practice by the Federal Deposit Insurance Corporation ("FDIC"), including the most recent revisions as of October 21, 1994, and applicable interpretations thereof.

PLAN OF CONVERSION

RP FINANCIAL, LC.
BOARDS OF DIRECTORS
MARCH 28, 2002

PAGE 2

57.6 percent. The Holding Company will also issue shares of its common stock to the public stockholders of Brookline Bancorp pursuant to an exchange ratio that will result in the public shareholders owning the same aggregate percentage of the newly issued Brookline Bancorp common stock as owned immediately prior to the conversion. As of December 31, 2001, the public stockholders' ownership interest in Brookline Bancorp approximated 42.4 percent.

RP FINANCIAL, LC.

RP Financial, LC. ("RP Financial") is a financial consulting firm serving the financial services industry nationwide that, among other things, specializes in financial valuations and analyses of business enterprises and securities, including the pro forma valuation for savings institutions converting from mutual-to-stock form. The background and experience of RP Financial is detailed in Exhibit V-1. We believe that, except for the fee we will receive for our appraisal and assisting Brookline Savings and Brookline Bancorp in the preparation of the post-conversion business plan, we are independent of the Holding Company, the Bank, the MHC and the other parties engaged by Brookline Savings or Brookline Bancorp to assist in the stock conversion process.

VALUATION METHODOLOGY

In preparing our Appraisal, we have reviewed the regulatory applications of Brookline Bancorp, Brookline Savings and the MHC, including the prospectus as filed with the OTS and the Securities and Exchange Commission ("SEC"). We have conducted a financial analysis of Brookline Bancorp, Brookline Savings and the MHC that has included a review of audited financial information for the years ended December 31, 1997 through 2001, a review of various unaudited information and internal financial reports through December 31, 2001, and due diligence related discussions with Brookline Bancorp's' management; Grant Thornton LLP, Brookline Bancorp's independent auditor; Luse Lehman Gorman Pomerenk & Schick, P.C., Brookline Bancorp's conversion counsel; and Ryan, Beck & Co., LLC Brookline Bancorp's marketing advisor in connection with the stock offering. All assumptions and conclusions set forth in the Appraisal were reached independently from such discussions. In addition, where appropriate, we have considered information based on other available published sources that we believe are reliable. While we believe the information and data gathered from all these sources are reliable, we cannot guarantee the accuracy and completeness of such information.

We have investigated the competitive environment within which Brookline Bancorp operates and have assessed Brookline Bancorp's relative strengths and weaknesses. We have kept abreast of the changing regulatory and legislative environment for financial institutions and analyzed the potential impact on Brookline Bancorp and the industry as a whole. We have analyzed the potential effects of the stock conversion on Brookline Bancorp's operating characteristics and financial performance as they relate to the pro forma market value of Brookline Bancorp. We have analyzed the assets held by the MHC, which will be consolidated

RP FINANCIAL, LC.
BOARDS OF DIRECTORS
MARCH 28, 2002

PAGE 3

with Brookline Bancorp's assets and equity pursuant to the completion of conversion. We have reviewed the overall conditions in Brookline Bancorp's primary market area as set forth in demographic, economic and competitive information prepared by CACI, SNL Securities and other third party private and governmental sources. We have compared Brookline Bancorp's financial performance and condition with selected publicly-traded thrifts in accordance with the Valuation Guidelines, as well as all publicly-traded thrifts and thrift holding companies. We have reviewed the current conditions in the securities markets in general and in the market for thrift stocks in particular, including the market for existing thrift issues, initial public offerings by thrifts and thrift holding companies and second step conversion offerings. We have excluded from such analyses thrifts subject to announced or rumored acquisition and/or institutions that exhibit other unusual characteristics.

The Appraisal is based on Brookline Bancorp's representation that the information contained in the regulatory applications and additional information furnished to us by Brookline Bancorp and their respective independent auditors, legal counsel and other authorized agents are truthful, accurate and complete. We did not independently verify the financial statements and other information provided by Brookline Bancorp or their respective independent auditors, legal counsel and other authorized agents nor did we independently value the assets or liabilities of Brookline Bancorp. The valuation considers Brookline Bancorp only as a going concern and should not be considered as an indication of Brookline Bancorp's liquidation value.

Our appraised value is predicated on a continuation of the current operating environment for Brookline Bancorp and for all thrifts and their holding companies. Changes in the local, state and national economy, the legislative and regulatory environment for financial institutions and mutual holding companies, the stock market, interest rates and other external forces (such as natural disasters or significant world events) may occur from time to time, often with great unpredictability and may materially impact the value of thrift stocks as a whole or the value of Brookline Bancorp's stock alone. It is our understanding that there are no current plans for selling control of Brookline Bancorp following completion of the second step stock offering. To the extent that such factors can be foreseen, they have been factored into our analysis.

The estimated pro forma market value is defined as the price at which Brookline Bancorp's common stock, immediately upon completion of the second step stock offering, would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or sell and both having reasonable knowledge of relevant facts.

VALUATION CONCLUSION

It is our opinion that, as of March 28, 2002, the estimated aggregate pro forma valuation of the shares to be issued in the conversion of the MHC, including: (1) newly-issued shares representing the MHC's ownership interest in Brookline Bancorp and (2) exchange shares issued to existing public shareholders of Brookline Bancorp, is $442,643,970 at the midpoint, equal to 44,264,397 shares at a per share value of $10.00. Based on this valuation and taking into

RP FINANCIAL, LC.
BOARDS OF DIRECTORS
MARCH 28, 2002

PAGE 4

account the ownership interest represented by the shares owned by the MHC, the midpoint of the offering range was $255,000,000, equal to 25,500,000 shares at $10.00 per share. The offering range includes a minimum value of $216,750,000, equal to 21,675,000 shares at $10.00 per share (85.0 percent of the midpoint) and a maximum value of $293,250,000, equal to 29,325,000 shares at $10.00 per share (115.0 percent of the midpoint). In the event the appraised value is subject to an increase, the offering range may be increased up to a supermaximum value of $337,237,500, equal to 33,723,750 shares at $10.00 per share, without requiring a resolicitation.

ESTABLISHMENT OF THE EXCHANGE RATIO

OTS regulations provide that in a conversion of a mutual holding company, the minority stockholders are entitled to exchange the public shares for newly issued shares of Brookline Bancorp stock as a fully converted company. The Board of Directors of the MHC has independently established a formula to determine the exchange ratio. The formula has been designed to preserve the current aggregate percentage ownership in Brookline Bancorp equal to 42.39 percent as of December 31, 2001. Pursuant to this formula, the exchange ratio to be received by the existing minority shareholders of Brookline Bancorp will be determined at the end of the offering, based on the total number of shares sold in the Subscription and Direct Community offerings. Based upon this formula, and the valuation conclusion and offering range concluded above, the exchange ratio would be 1.4056 shares, 1.6537 shares, 1.9017 shares and 2.1870 shares of newly issued shares of Brookline Bancorp stock for each share of stock held by the public shareholders at the minimum, midpoint, maximum and supermaximum of the offering range, respectively. RP Financial expresses no opinion on the proposed exchange of newly issued Holding Company shares for the shares held by the public stockholders or on the proposed exchange ratio.

LIMITING FACTORS AND CONSIDERATIONS

Our valuation is not intended, and must not be construed, as a recommendation of any kind as to the advisability of purchasing shares of the common stock. Moreover, because such valuation is necessarily based upon estimates and projections of a number of matters, all of which are subject to change from time to time, no assurance can be given that persons who purchase shares of common stock in the conversion will thereafter be able to buy or sell such shares at prices related to the foregoing valuation of the estimated pro forma market value thereof. The appraisal does not take into account any trading activity with respect to the purchase and sale of common stock in the secondary market and reflects only a valuation range as of this date for the pro forma market value of Brookline Bancorp immediately upon issuance of the stock.

RP Financial's valuation was determined based on the financial condition, operations and shares outstanding of Brookline Bancorp as of December 31, 2001, the date of the financial data included in the prospectus. The proposed exchange ratio to be received by the current public

RP FINANCIAL, LC.
BOARDS OF DIRECTORS
MARCH 28, 2002

PAGE 5

stockholders of Brookline Bancorp and the exchange of the public shares for newly issued shares of Brookline Bancorp common stock as a full public company was determined independently by the Boards of Directors of the MHC. RP Financial expresses no opinion on the proposed exchange ratio to public stockholders or the exchange of public shares for newly issued shares.

RP Financial is not a seller of securities within the meaning of any federal and state securities laws and any report prepared by RP Financial shall not be used as an offer or solicitation with respect to the purchase or sale of any securities. RP Financial maintains a policy which prohibits RP Financial, its principals or employees from purchasing stock of its client institutions.

This valuation will be updated as provided for in the conversion regulations and guidelines. These updates will consider, among other things, any developments or changes in the financial performance and condition of Brookline Bancorp, management policies and current conditions in the equity markets for thrift shares, both existing issues and new issues. These updates may also consider changes in other external factors which impact value including, but not limited to: various changes in the legislative and regulatory environment for financial institutions, the stock market and the market for thrift stocks and interest rates. Should any such new developments or changes be material, in our opinion, to the valuation of the shares, appropriate adjustments to the estimated pro forma market value will be made. The reasons for any such adjustments will be explained in the update at the date of the release of the update. The valuation will also be updated at the completion of Brookline Bancorp's stock offering.

Respectfully submitted,

RP FINANCIAL, LC.

William E. Pommerening
Chief Executive Officer

Gregory E. Dunn
Senior Vice President

TABLE OF CONTENTS
BROOKLINE BANCORP, INC.
BROOKLINE, MASSACHUSETTS

                                                                                                   PAGE
     DESCRIPTION                                                                                 NUMBER
     -----------                                                                                 ------


CHAPTER ONE                     OVERVIEW AND FINANCIAL ANALYSIS
-----------

     Introduction                                                                                    1.1
     Plan of Conversion                                                                              1.2
     Strategic Overview                                                                              1.2
     Balance Sheet Trends                                                                            1.6
     Income and Expense Trends                                                                       1.11
     Interest Rate Risk Management                                                                   1.15
     Lending Activities and Strategy                                                                 1.16
     Asset Quality                                                                                   1.20
     Funding Composition and Strategy                                                                1.21
     Subsidiaries                                                                                    1.22
     Legal Proceedings                                                                               1.23



CHAPTER TWO                     MARKET AREA
-----------

     Introduction                                                                                    2.1
     Market Area Demographics                                                                        2.2
     National Economic Factors                                                                       2.4
     Local Economy                                                                                   2.6
     Market Area Deposit Characteristics and Competition                                             2.7



CHAPTER THREE                   PEER GROUP ANALYSIS
-------------

     Peer Group Selection                                                                            3.1
     Financial Condition                                                                             3.5
     Income and Expense Components                                                                   3.9
     Loan Composition                                                                                3.12
     Interest Rate Risk                                                                              3.14
     Credit Risk                                                                                     3.16
     Summary                                                                                         3.16

TABLE OF CONTENTS
BROOKLINE BANCORP, INC.
BROOKLINE, MASSACHUSETTS
(CONTINUED)

PAGE
DESCRIPTION NUMBER
----------- ------

CHAPTER FOUR VALUATION ANALYSIS
------------
Introduction 4.1
Appraisal Guidelines 4.1
RP Financial Approach to the Valuation 4.1
Valuation Analysis 4.2
1. Financial Condition 4.3
2. Profitability, Growth and Viability of Earnings 4.5
3. Asset Growth 4.7
4. Primary Market Area 4.7
5. Dividends 4.9
6. Liquidity of the Shares 4.10
7. Marketing of the Issue 4.11
A. The Public Market 4.11
B. The New Issue Market 4.17
C. The Acquisition Market 4.18
D. Trading in Brookline Bancorp's Stock 4.21
8. Management 4.22
9. Effect of Government Regulation and Regulatory Reform 4.22
Summary of Adjustments 4.23
Valuation Approaches 4.23
1. Price-to-Earnings ("P/E") 4.25
2. Price-to-Book ("P/B") 4.26
3. Price-to-Assets ("P/A") 4.29
Comparison to Recent Conversions and Second-Step Offerings 4.29
Valuation Conclusion 4.29
Establishment of the Exchange Ratio 4.30

LIST OF TABLES
BROOKLINE BANCORP, INC.
BROOKLINE, MASSACHUSETTS

TABLE
NUMBER                           DESCRIPTION                                                    PAGE
------                           -----------                                                    -----
 1.1          Historical Balance Sheets                                                          1.7
 1.2          Historical Income Statements                                                       1.12


 2.1          Summary Demographic Information                                                    2.3
 2.2          Unemployment Trends                                                                2.7
 2.3          Deposit Summary                                                                    2.9


 3.1          Peer Group of Publicly-Traded Thrifts                                              3.3
 3.2          Balance Sheet Composition and Growth Rates                                         3.6
 3.3          Income as a Percent of Average Assets and Yields, Costs, Spreads                   3.10
 3.4          Loan Portfolio Composition Comparative Analysis                                    3.13
 3.5          Interest Rate Risk Measures and Net Interest Income Volatility                     3.15
 3.6          Credit Risk Measures and Related Information                                       3.17


 4.1          Market Area Unemployment Rates                                                     4.9
 4.2          Pricing Characteristics and After-Market Trends Recent Conversions                 4.19
 4.3          Market Pricing Comparatives                                                        4.20
 4.4          Public Market Pricing                                                              4.27

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I. OVERVIEW AND FINANCIAL ANALYSIS

INTRODUCTION

Brookline Savings Bank ("Brookline Savings" or the "Bank"), chartered in 1871, is a federally-chartered stock savings bank headquartered in Brookline, Massachusetts. Brookline Savings conducts business through the main office in Brookline, which includes a full service branch office, and five full service branch offices. Five of the Bank's branches are located in the Town of Brookline, an urban/suburban community adjacent to the City of Boston, and one branch is maintained in the City of Newton, a community adjacent to the Town of Brookline. The Brookline offices are located in Norfolk County and the Newton office is located in Middlesex County. A map of the Bank's branch office locations is included as Exhibit I-1. Brookline Savings is a member of the Federal Home Loan Bank ("FHLB") system and its deposits are insured up to the maximum allowable amount by the Federal Deposit Insurance Corporation ("FDIC").

Brookline Bancorp, Inc. ("Brookline Bancorp" or the "Holding Company") is a federally chartered stock holding company that was organized in November 1997 for the purpose of acquiring all of the capital of the Bank upon completion of the Bank's reorganization from a mutual savings bank into a mutual holding company structure. As part of the reorganization, the Holding Company offered for sale 47.0 percent of the shares of its common stock in a public offering. The remaining 53.0 percent of the Holding Company's shares of common stock were issued to Brookline Bancorp, MHC (the "MHC"), a federally-chartered mutual holding company. The reorganization and public stock offering were completed on March 24, 1998. Net proceeds from the public stock offering amounted to $134.8 million. As of December 31,2001, the MHC owned 15,420,350 shares or 57.6 percent of the Holding Company's shares of common stock outstanding and the public owned the remaining 11,347,199 shares or 42.4 percent of the Holding Company's shares. As of December 31, 2001, Brookline Bancorp had $1.1 billion in assets, $620.9 million in deposits and total equity of $285.4 million or 26.0 percent of total assets. Brookline Bancorp audited financial statements are included by reference as Exhibit I-2.

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PLAN OF CONVERSION

The respective Board of Directors of Brookline Bancorp and the MHC have approved the plan of conversion pursuant to which the MHC will be merged into the Bank and the MHC will no longer exist. Pursuant to the plan of conversion, Brookline Bancorp, which owns 100 percent of the Bank, will be succeeded by a new corporation with the same name. As part of the conversion, the Holding Company will sell shares of common stock in an offering that will represent the ownership interest in Brookline Bancorp currently owned by the MHC. As of December 31, 2001, the MHC's ownership interest in Brookline Bancorp approximated 57.6 percent. The Holding Company will also issue shares of its common stock to the public stockholders of Brookline Bancorp pursuant to an exchange ratio that will result in the public shareholders owning the same aggregate percentage of the newly issued Brookline Bancorp common stock as owned immediately prior to the conversion. As of December 31, 2001, the public stockholders' ownership interest in Brookline Bancorp approximated 42.4 percent.

STRATEGIC OVERVIEW

Brookline Bancorp maintains a local community banking emphasis, with a primary strategic objective of meeting the borrowing and savings needs of its local customer base. The Holding Company's lending activities have emphasized origination of commercial real estate and multi-family loans secured by properties in the Boston metropolitan area and eastern Massachusetts. In comparison to a traditional thrift lender, which emphasizes the origination of 1-4 family loans, such loans constitute a smaller portion of the Holding Company's loan portfolio composition. On a more limited basis, the Holding Company's lending activities include diversification into construction, commercial business and consumer loans. Retail deposits obtained from the six branch offices and, on a more limited basis, through the internet represent the primary source of interest-bearing funds, while borrowings from the FHLB serve as an alternative funding source for purposes of managing funding costs and interest rate risk.

The Holding Company's lending emphasis on commercial real estate and multi-family loans implies a greater degree of credit risk compared to loan portfolios that reflect higher concentrations of lower balance 1-4 family loans. However, Brookline Bancorp has sought to

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limit the credit risk exposure associated with its lending strategy, through emphasizing origination of such loans in local markets and to established lending relationships with favorable credit histories. Credit risk associated with the loan portfolio has also been limited by the strength of the local economy, implementation of what are believed by management to be conservative underwriting guidelines and building a high level of loss reserves relative to non-performing assets and loans outstanding. Economic growth has been supported by expansion of the technology and financial services sectors, which serve as the cornerstone of the Boston MSA economy and, in turn, has facilitated growth in most areas of the regional economy. In general, the primary market area has had low unemployment and increasing real estate values, which has increased demand for new construction of both residential and commercial properties. More recently, the local economy has slowed in conjunction with the national recession, although there has yet to be any notable impairment in Boston metropolitan area commercial real estate values and no deterioration in credit quality has yet to be experienced in the Holding Company's loan portfolio.

Investments serve as a supplement to the Holding Company's lending activities. The Holding Company's investment strategy emphasizes low risk types of investments, with the intent of providing and maintaining liquidity and to generate a favorable return within the context of supporting interest rate and credit risk objectives. Investments securities held by the Holding Company consist primarily of collateralized mortgage obligations ("CMOs"), corporate bonds and U.S. Government and agency securities. In recent years, the Holding Company has emphasized purchases of CMOs with average maturities of approximately three years for yield enhancement. The Holding Company's investment strategy also continues to emphasize investment in corporate bonds and U.S. Government and agency obligations. Corporate obligations are generally required to be rated "A" or better at the time of acquisition.

Retail deposits have consistently served as the primary interest-bearing funding source for the Holding Company and the Holding Company has sustained positive deposit growth over the past four years. In recent years, deposit growth has consisted mostly of transaction and savings accounts and such deposits constitute the largest component of the Holding Company's current deposit composition. The shift in deposit composition towards a higher concentration of transaction and savings accounts is believed to be in part attributable to the decline in CD market

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rates, which has resulted in a general increase in depositor preference to maintain funds in liquid transaction accounts.

To facilitate deposit growth and marketing of other retail banking services, the Holding Company established Lighthouse Bank ("Lighthouse"), an internet only bank subsidiary. The Holding Company made a $25 million capital investment in Lighthouse at the beginning of May 2000. Lighthouse commenced doing business with the public in the last week of June 2000. In April 2001, the Holding Company announced the decision to either sell Lighthouse to a third party or to merge it into the Bank. That decision was reached after determining the amount of additional operating losses Lighthouse would likely incur before achieving satisfactory profitability. On July 17, 2001, the existence of Lighthouse as a separate corporate entity was terminated by its merger into Brookline Savings. Brookline Savings continues to provide on-line electronic banking services to the former customers of Lighthouse. In contemplation of the Lighthouse merger, a pre-tax restructuring charge of $3.9 million was recorded in the second quarter of 2001 to provide for merger-related expenses.

Borrowings serve as an alternative funding source for the Holding Company to support control of funding costs and to manage interest rate risk. The Holding Company's use of borrowings has emphasized FHLB advances with five year fixed rate terms for purposes of managing the interest rate risk associated with commercial real estate and multi-family loan portfolio.

Brookline Bancorp's earnings base is largely dependent upon net interest income and operating expense levels. Net interest income has consistently been maintained at a relatively high level, which has been supported by the Holding Company's maintenance of a high interest-earning assets-to-interest-bearing liabilities ("IEA/IBL") ratio. The Holding Company's strong IEA/IBL ratio is realized through maintaining a high level of interest-earnings assets relative to total assets, which is supported by low investment in fixed assets, low balances of non-performing assets and no intangibles. Most significantly, the strength of the IEA/IBL ratio has been sustained through maintaining a high capital position, which, in turn, has provided for a low level of interest-bearing liabilities relative to total assets. The Holding Company's lending strategy, which has emphasized relatively higher yielding commercial real estate and multi-family loans, has also facilitated maintenance of a strong net interest margin.

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Operating expenses have been maintained at relatively low levels, reflecting efficiency in operations and relatively low personnel requirements for implementation of the Holding Company's operating strategy. In particular, the Holding Company's maintains a high ratio of assets per employee, which is supported by the relatively lower staffing needs for origination and servicing of larger balance commercial real estate and multi-family loans, as compared to lower balance 1-4 family and consumer loans, and the small size of the branch network relative to total deposits and total assets. Brookline Bancorp's limited diversification into other lending areas, as well as other types of retail banking activities have also contained staffing levels. While the Holding Company's implementation of a fairly streamlined operating strategy has supported containment of operating expenses, it has also limited development of revenues from non-interest income sources. Accordingly, income generated from such sources as fees and service charges is only a modest contributor to the Holding Company's earnings.

A key component of the Holding Company's business plan is to complete a second step conversion offering. In particular, the additional equity capital raised in the conversion will provide a larger capital cushion for asset growth, including growth through acquisitions of local thrifts, commercial banks or other financial service providers as opportunities arise. As a fully-converted institution, it is contemplated that the ability to offer Holding Company stock as consideration will facilitate increased opportunities to grow through acquisition. Comparatively, in the current MHC structure, growth through acquisition is substantially limited to utilizing cash as consideration, which is often viewed as a less attractive type of consideration by potential acquisition candidates.

The Holding Company anticipates that growth opportunities will also result from implementation of a more aggressive retail banking strategy, in which growth will be realized through establishing additional branches that complement the existing branch network and through placing more of an emphasis on developing and marketing products and services that address the needs of retail customers. Additionally, opportunities for retail growth will continue to be realized from large bank consolidation in the local market and the resulting fallout of customers who are attracted to Brookline Savings' community-bank orientation and emphasis on customer service.

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The increase in capital provided by the second step conversion is also expected to support growth of the commercial real estate loan portfolio, as the Holding Company's higher pro forma capital position will facilitate the ability to make additional commercial real estate loans to some of the Holding Company's current large borrowers, as well as reducing the necessity of participating out commercial real estate loans that are currently considered to be large for the Holding Company's current capital position. Growth in commercial business lending is also a strategic growth area for the Holding Company. In connection with the implementation of the retail banking strategy, the Holding Company will be introducing products and services that will address the cash management and deposit needs of the Holding Company's commercial borrowers. The projected uses of stock proceeds are highlighted below.

o THE HOLDING COMPANY. The Holding Company will retain up to 50 percent of the net conversion proceeds after expenses. Most of the funds retained by the Holding Company will be deployed into Brookline Securities Corp., a wholly-owned subsidiary of Brookline Bancorp, and held in investment securities. Over time, the Holding Company funds may be utilized for various corporate purposes, including the possible payment of regular and/or special cash dividends, acquisitions, and/or repurchases of common stock.

o THE BANK. The remaining 50 percent of the net conversion proceeds will be infused into the Bank. The net cash proceeds are likely to be lower based on expectations of deposit withdrawals to fund stock purchases. Cash proceeds infused into the Bank will initially become part of general funds, pending deployment into whole loans.

BALANCE SHEET TRENDS

Table 1.1 shows the Holding Company's historical balance sheet data from December 31, 1997 through December 31, 2001. Over the past four years, Brookline Bancorp exhibited annual asset growth of 11.9 percent. Asset growth has been primarily sustained by loan growth, while growth in cash and investments has been more modest. Accordingly, the Holding Company's interest-earning asset composition has exhibited a shift towards a higher concentration of loans and a decline in the concentration of cash and investments comprising interest-earning assets. Asset growth has been funded by a combination of deposits, borrowings and capital, with the Holding Company's funding composition showing increases in the level of borrowings and

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capital funding assets and a decline in the level of deposits funding assets. A summary of Brookline Bancorp's key operating ratios for the past five years is presented in Exhibit I-3.

Brookline Bancorp's balance of net loans receivable increased at a 14.1 percent annual rate from the year end 1997 through year end 2001, increasing as a percent of assets from 69.0 percent at year end 1997 to 74.5 percent at year end 2001. Loan growth was recorded throughout the past four years, with net loan growth ranging from a low of $57.3 million in 1999 to a high of $95.8 million in 1998. Growth of the loan portfolio has mostly consisted of commercial real estate and multi-family loans followed by growth of 1-4 family loans.

Brookline Bancorp's emphasis on commercial real estate and multi-family lending is reflected in its loan portfolio composition, as 69.8 percent of total loans receivable consisted of commercial real estate and multi-family loans at December 31, 2001. The Holding Company's second largest loan concentration consists of 1-4 family loans with such loans, inclusive of second mortgages, equaling 21.6 percent of total loans outstanding at December 31, 2001. Diversification into other lending areas has been somewhat limited for the Holding Company, consisting primarily of commercial business loans. It should be noted that the ratios indicated in this paragraph and in the following paragraph exclude money market loan participations in the calculation of total loans, with such loans ranging from a high of $44.3 million at year end 1998 to a low of $6.0 million at year end 2001. The net loans receivable balances indicated in Table 1.1 include the money market loan participations.

Trends in the Holding Company's loan portfolio composition over the past five years indicate that the concentration of commercial real estate and multi-family loans has declined from 76.4 percent of total loans at year end 1997 to 69.8 percent of total loans at year end 2001, which was attributable to a decline in the level of multi-family loans comprising total loans. Comparatively, over the same time period, 1-4 family loans and second mortgages increased from 17.5 percent of total loans to 21.6 percent of total loans. Commercial business loans have also become a more prominent component of total loans outstanding, increasing from 1.9 percent of total loans at year end 1997 to 4.9 percent at year end 2001. Other lending areas, such as consumer loans and construction and development loans, remained fairly consistent as a percent of total loans outstanding and have been minor areas of lending diversification.

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The intent of the Holding Company's investment policy is to provide adequate liquidity and to generate a favorable return within the context of supporting Brookline Bancorp's overall credit and interest rate risk objectives. Over the past five years, the Holding Company's balance of cash and total investment securities ranged from a high of 32.9 percent of assets at year end 1998 to a low of 24.1 percent of assets at year end 2001. In recent years, the Holding Company's investment strategy has emphasized investment in CMOs, which has been in part funded by reduced holdings of U.S. Government and agency obligations, corporate bonds and marketable equity securities. As of December 31, 2001, CMOs accounted for $79.7 million or 43.7 percent of the investment portfolio. Other investments held by the Holding Company at December 31, 2001 consisted of U.S. Government and agency obligations ($14.2 million), corporate bonds ($58.9 million), marketable equity securities ($17.2 million), mortgage-backed securities ($3.0 million) and restricted equity securities ($9.3 million). The Holding Company's $8.9 million investment in FHLB stock accounted for the substantial portion of the restricted equity securities balance. To support management of interest rate risk and liquidity, the Holding Company's current philosophy has been to maintain all new investment purchases as available-for-sale. As of December 31, 2001, securities maintained as available for sale and held to maturity equaled $163.4 million and $9.6 million, respectively. The Holding Company maintained an unrealized gain of $10.6 million on investments held as available-for-sale, as of December 31, 2001. Brookline Bancorp maintained cash and cash equivalent funds totaling $82.7 million or 7.5 percent of assets at December 31, 20001, which was at the high end of the range of cash and cash equivalents that has been maintained by the Holding Company over the past five years. Exhibit I-4 provides historical detail of the Holding Company's investment portfolio.

Over the past five years, Brookline Bancorp's funding needs have been substantially met through retail deposits, internal cash flows, borrowings and retained earnings. From year end 1997 through year end 2001, the Holding Company's deposits increased at an annual rate of 6.5 percent. Deposit growth has been sustained throughout the past four years, with the most notable increase occurring in 2000. The Holding Company recorded deposit growth of $96.5 million in 2000, which was supported by internet deposits generated through Lighthouse and the opening of a new branch. Since year end 1997 deposit growth has not kept pace with asset growth, as total

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deposits declined from 68.8 percent of assets at year end 1997 to 56.5 percent of assets at year end 2001. In recent years, the Holding Company's deposit composition has exhibited a shift towards a higher concentration of transaction and savings accounts, reflecting stronger growth in those accounts compared to CD growth. Most of the recent growth in transaction and savings accounts has consisted of money market accounts. As of December 31, 2001, transaction and savings accounts equaled 59.0 percent of total deposits.

The decline in the level of deposits funding assets has been offset by increased utilization of borrowings and capital growth. Borrowings as a percent of assets increased from 9.9 percent at year end 1997 to 16.2 percent at year end 2001, exhibiting an annual growth rate of 26.6 percent. As of December 31, 2001, the Holding Company held $178.1 million of borrowings, which consisted entirely of FHLB advances. FHLB advances held by the Holding Company have fixed terms with laddered maturities generally out to five years.

Since fiscal year end 1997, retained earnings, an increase in the unrealized gain maintained on securities designated as available-for-sale and net proceeds realized from the minority stock offering translated into an annual capital growth rate of 21.1 percent for the Holding Company. The most significant capital growth was recorded in 1998, as the result of the completion of the minority stock offering on March 24, 1998. Net proceeds from the minority stock offering amounted to $134.8 million, which supported an increase in the Holding Company's equity-to-assets ratio from 18.9 percent at year end 1997 to 31.7 percent at year end 1998. Since 1998, capital growth has been slowed by dividend payments and stock repurchases, which combined with asset growth, has served to leverage the Holding Company's equity-to-assets ratio down to 26.0 percent at year end 2001. All of the Holding Company's capital is tangible capital and the Bank maintains significant capital surpluses relative to all of its regulatory capital requirements. The additional capital realized from the second step conversion offering will serve to further strengthen the Holding Company's capital position and support the growth strategies contemplated in its business plan. At the same time, as the result of the Holding Company's relatively high pro forma capital position, Brookline Bancorp's ROE will initially be depressed from current levels following its conversion.

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INCOME AND EXPENSE TRENDS

Table 1.2 shows the Holding Company's historical income statements for the years ended 1997 through 2001. Earnings for the Holding Company over the past five years ranged from a low of 1.80 percent of average assets in 2001 to a high of 2.33 percent of average assets in 1999. Net interest income and operating expenses represent the primary components of Brookline Bancorp's core earnings. Non-interest operating income has been a relatively modest contributor to the Holding Company's earnings and the Holding Company's historically strong credit quality has served to limit the impact of loss provisions on earnings. Gains realized from the sale of investment securities have served to bolster earnings throughout the past five years, although the amount of gains recorded vary from year-to-year and are not considered to be a recurring source of earnings for the Holding Company. In 2001, the Holding Company recorded a non-recurring gain from the termination of Brookline Savings' defined benefit plan and a non-recurring charge related to the merger of Lighthouse into the Bank.

Over the past five years, the Holding Company's net interest income to average assets ratio has ranged from a low of 4.01 percent during 2001 to a high of 4.34 percent during 2000. The recent decline in the net interest income ratio has been in part attributable to a declining level of capital and resulting higher level of interest-bearing liabilities funding assets. Brookline Bancorp's lower net interest income ratio for 2001 also reflects the impact of a narrowing interest rate spread, as the result of a steeper decline in the average yield earned on interest-earning assets relative to the average cost paid for interest-bearing liabilities. The less significant decline in the cost of interest-bearing funds was in part attributable to increased utilization of higher rate, longer term fixed rate borrowings. From 2000 to 2001, the Holding Company's interest rate spread declined from 2.95 percent to 2.83 percent. Overall, the Holding Company has maintained a relatively high and stable net interest margin throughout the past five years, which has been supported by the strength of the Holding Company's IEA/IBL ratio. Brookline Bancorp's historical net interest rate spreads and yields and costs are set forth in Exhibits I-3 and I-5.

Sources of non-interest operating income have been a modest contributor to the Holding Company's earnings, reflecting limited diversification into fee oriented activities and a general de-emphasis of retail banking activities. Throughout the period shown in Table 1.2, non-interest

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operating income has ranged from a low of 0.16 percent of average assets in 1997 to a high of 0.19 percent of average assets in 1999 and 2001. Sources of non-interest operating income consist substantially of fees and service charges and on a more limited basis income earned on real estate owned and miscellaneous sources of income that consists primarily of income representing Brookline Bancorp's 30.5 percent equity interest in the earnings of Eastern Funding LLC, a company specializing in the financing of coin operated laundry and dry cleaning equipment in the greater metropolitan New York area and selected other locations in the Northeast. Growth of non-interest income may be enhanced by the Holding Company's planned implementation of a more diverse retail banking strategy and the introduction of cash management services for commercial accounts. However, notwithstanding the potential increase in non-interest income that may be generated from new products and services, as well as more aggressive marketing of current products and services, Brookline Bancorp's earnings can be expected to remain highly dependent upon the net interest margin for the intermediate term.

Operating expenses represent the other major component of the Holding Company's earnings, ranging from a low of 1.12 percent of average assets during 1998 to a high of 1.78 percent of average assets during 2000. For the year ended 2001, operating expenses as a percent of average assets equaled 1.57 percent. As previously noted, the Holding Company's relative low operating expense ratio is supported by a current operating strategy that is not highly diversified and has limited staffing needs relative to total asset size. As of December 31, 2001, the Holding Company's ratio of assets per full time equivalent employee equaled $9.6 million, versus $4.5 million for all publicly-traded thrifts. The increase in the operating expense ratio since 1998 was attributable to several factors, including expenses related to the vesting of the recognition and retention plan implemented in the minority stock offering, the expense of the ESOP implemented in the minority stock offering, start-up expenses related to Lighthouse, higher marketing and advertising expenses related to the opening of Lighthouse in 2000 and higher data processing expenses. As the result of accelerated vesting of the recognition and retention plan, most of that expense was incurred in 1999 ($3.6 million) and in 2000 ($1.2 million). The Holding Company's operating expense ratio for 2001 is considered to be indicative of its recurring operating expenses.

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Overall, the general trends in the Holding Company's net interest margin and operating expense ratio since 1997 indicate a decline in core earnings, as the Holding Company's expense coverage ratio (net interest income divided by operating expenses) declined from 3.38 times during 1997 to 2.55 times during 2001. Likewise, Brookline Bancorp's efficiency ratio (operating expenses, net of amortization of intangibles, as a percent of the sum of net interest income and non-interest operating income) of 37.4 percent for the year ended 2001 was less favorable than the 28.5 percent efficiency ratio maintained during 1997. Notwithstanding, the comparatively less favorable expense coverage and efficiency ratios indicated for 2001, both ratios remain superior to industry averages.

Over the past five years, negligible asset quality problems and a strong local real estate market has served to limit the impact of loss provisions on the Holding Company's earnings. Loan loss provisions established by the Holding Company ranged from a low of zero loss provisions in 1997 to a high of 0.09 percent of average assets during 2001. The higher level of loss provisions established during 2001 takes into consideration the loan growth realized during the period, including growth of higher risk commercial real estate and multi-family loans. As of December 31, 2001, the Holding Company maintained valuation allowances of $15.3 million, equal to 1.87 percent of net loans receivable and 968.4 percent of non-performing assets. Exhibit I-6 sets forth the Holding Company's loan loss allowance activity during the past five years.

Gains realized from the sale of securities have had a varied impact on the Holding Company's earnings, ranging from a low of 0.01 percent of average assets in 1997 to a high of 0.87 percent of average assets in 2000. For the year ended 2001, gains on the sale of securities equaled 0.33 percent of average assets. Such gains reflect ongoing management of the Holdings Company's portfolio of marketable equity securities and are considered to be subject to a high degree of volatility and, therefore, do not represent a source of core earnings for the Holding Company. In 2001, the Holding Company also recognized a one time gain of $3.7 million or 0.34 percent of average assets from the termination of Brookline Savings' defined benefit plan and a non-recurring charge of $3.9 million or 0.37 percent of average assets related to the merger of Lighthouse into the Bank.

Currently, the Holding Company is subject to a federal tax on income in the amount of 35.0 percent. The Commonwealth of Massachusetts imposes a state income tax of 10.5 percent,

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although certain state tax advantages reduce the Holding Company's overall effective tax rate. Brookline Bancorp and Brookline Savings have established tax qualified Massachusetts securities companies which provide a certain level of state tax benefits to the Bank and the Holding Company with regard to interest income and/or capital gains realized on the investment portfolio. Additionally, the Bank maintains a subsidiary established as a Massachusetts Corporation to engage in real estate business activities that enable it to be taxed as a real estate investment trust for Massachusetts tax purposes. Brookline Bancorp's effective tax rate ranged from a low of 34.8 percent in 1997 to a high of 36.7 percent in 2001.

INTEREST RATE RISK MANAGEMENT

The Holding Company pursues a number of strategies to manage interest rate risk, which have been fairly effective in limiting the repricing mismatch between interest rate sensitive assets and liabilities. Management of the Holding Company's interest rate risk is conducted on an ongoing basis and is reviewed formally by the Asset/Liability Committee ("ALCO") monthly. Brookline Bancorp relies on in-house modeling to monitor and analyze the effects that interest rate movements will have on the balance sheet and on net interest income. Based on the Holding Company's balance sheet as of December 2001, a 200 basis point instantaneous and sustained rise in interest rates would result in a 6.25 percent decline in net interest income over a one year period. The Holding Company maintained a one year cumulative gap-to-assets ratio of negative 12.2 percent as of December 31, 2001 (see Exhibit I-7).

The Holding Company manages interest rate risk from the asset side of the balance sheet, through such strategies as maintaining investments as available-for-sale and investing in securities with short-terms or floating rates, selling originations of 1-4 family fixed rate loan originations to the secondary market and emphasizing the origination and retention of adjustable rate loans or loans with maturities matched with those of the deposits and borrowings funding the loans. As of December 31, 2001, of the total loans due after December 31, 2002, ARM loans comprised 77.2 percent of those loans (see Exhibit I-8). On the liability side of the balance sheet, management of interest rate risk has been pursued through utilizing fixed rate FHLB advances with laddered maturities generally out to five years and maintaining a high level of less interest rate sensitive and lower cost core deposits in the form of savings and transaction

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accounts. The Holding Company's management of interest rate risk is also facilitated by maintenance of a high IEA/IBL ratio, thereby lessening the dependence on the interest rate spread to sustain net interest income.

On a limited basis, the Holding Company has utilized off-balance sheet hedging instruments to support management of interest rate risk. Effective April 14, 1998, the Holding Company entered into an interest-rate swap agreement with a third party that matures April 14, 2005. The notional amount of the agreement is $5.0 million. Under this agreement, each quarter the Holding Company pays interest on the notional amount at an annual fixed rate of 5.9375 percent and receives from the third-party interest on the notional amount at the floating three month U.S. dollar LIBOR rate. The Holding Company entered into this transaction to match more closely the repricing of its assets and liabilities and to reduce its exposure to increases in interest rates. For the year ended 2001, the Holding Company recorded a loss of $241,000 for the market value adjustment of the swap contract. The loss is reflected as non-interest operating income on the Holding Company's income statement.

LENDING ACTIVITIES AND STRATEGY

Brookline Bancorp's urban and suburban market is characterized by a large number of apartment buildings, condominiums and office buildings. As a result, for many years, Brookline Bancorp has emphasized multi-family and commercial mortgage lending. Beyond multi-family and commercial real estate loans, lending diversification by the Holding Company includes loans secured by 1-4 family properties, construction and development loans, commercial lines of credit primarily to condominium associations, home equity loans and other consumer loans. Another component of the loan portfolio consists of participations in commercial loans to national companies and organizations originated and serviced primarily by money center banks. Exhibit I-9 provides historical detail of Brookline Bancorp's loan portfolio composition over the past five years and Exhibit I-10 provides the contractual maturity of the Holding Company's loan portfolio by loan type as of December 31, 2001.

Commercial real estate and multi-family loans are generally originated up to a maximum loan-to-value ("LTV") ratio of 75.0 percent and typically require a minimum debt-coverage ratio

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of 1.25 times based on current loan rates. Loan terms typically provide for amortization periods of twenty to twenty-five years and a balloon provision after ten years. Commercial real estate loans are typically offered as a fixed rate loan that convert to a floating rate loan after an initial fixed rate period of five to seven years or, at the borrower's option, may be renewed as a fixed rate loan up to the balloon date. The Holding Company's commercial real estate loan portfolio includes loan participations secured by local properties and purchased from locally-based financial institutions. The Holding Company also participates out commercial real estate loans that are considered too large to hold as a single-credit or would result in loan-to-one borrower concentrations above internal lending limits. In light of the higher credit risk associated with commercial real estate and multi-family loans, loan rates offered on those loans are at a premium to the Holding Company's 1-4 family loan rates. As of December 31, 2001, the Holding Company's commercial real estate and multi-family loan portfolio totaled $611.0 million or 69.8 percent of total loans outstanding (exclusive of money market loan participations). Brookline Bancorp intends to continue to emphasize the origination of commercial real estate and multi-family loans, as the Holding Company has been effective in establishing a lending niche in the $1 million to $4 million range. Growth of the commercial real estate portfolio will also be facilitated by the increase in capital provided by the infusion of conversion proceeds, as the Holding Company's higher capital position will increase the loans-to-one borrower limit and provide for increased flexibility with respect to retaining larger credits without participants.

Brookline Bancorp originates both fixed rate and adjustable rate 1-4 family permanent mortgage loans, retaining all ARM loan originations for portfolio. Fixed rate loans are generally sold to the secondary market on a servicing released basis. Fixed rate loans are offered for terms of 15 and 30 years. ARM loans offered by the Holding Company include loans that reprice every one or three years, as well as loans that convert to a one-year adjustable rate loan following an initial fixed rate period of three or five years. ARM loans are indexed to the Constant Maturity Treasury Index with the same term as the repricing period. The Holding Company typically requires a LTV ratio of 80.0 percent or less for 1-4 family loans, but will lend up to a 95.0 percent LTV ratio with private mortgage insurance ("PMI"). As of December 31, 2001, the Holding Company's 1-4 family permanent mortgage loan portfolio totaled $189.3 million,

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including second mortgages, or 21.6 percent of total loans outstanding (exclusive of money market loan participations).

Construction loans originated by the Holding Company consist of loans to finance the construction of 1-4 family residences, commercial properties and multi-family properties. Construction loans are typically floating rate loans tied to the Wall Street Journal Prime Rate and require payment of interest only during the construction period. Different criteria are applied in underwriting construction loans for which the primary source of repayment is the sale of the property than in underwriting construction loans for which the primary source of repayment is the stabilized cash flow from the completed project. For those loans where the primary source of repayment is from the resale of the property, in addition to the normal credit analysis performed on other loans, the Holding Company also analyzes project costs, the attractiveness of the property in relation to the market in which it is located and demand within the market area. For those construction loans where the source of repayment is the stabilized cash flow from the completed project, Brookline Bancorp analyzes not only project costs but also how long it might take to achieve satisfactory occupancy and the reasonableness of projected rental rates in relation to market rental rates. As of December 31, 2001, Brookline Bancorp's outstanding balance of construction loans totaled $20.9 million or 2.4 percent of total loans outstanding (exclusive of money market loan participations), which included $493,000 of land loans originated for purposes of development.

Home equity lines of credit are floating rate loans tied to the Wall Street Journal Prime Rate and are limited to a maximum LTV ratio of 75.0 percent of the appraised value of the property less the balance of any first loan. The line of credit is available for as long as the home that is securing the loan is owned by the borrower. A higher interest rate is earned on lines of credit for less than $10,000 and a slightly discounted rate is offered to borrowers with a minimum of $20,000 of deposits maintained at the Bank. As of December 31, 2001, the outstanding balance of home equity lines of credit equaled $8.9 million or 1.0 percent of total loans outstanding (exclusive of money market loan participations).

Diversification into non-mortgage lending consists primary of commercial business loans and, to a lesser extent, consumer loans. Commercial business loans extended by the Holding Company consist primarily of loans to condominium associations for the purpose of funding

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capital improvements. Typically such loans are extended as five year fixed rate loans with 10 year amortization periods and are secured by a general assignment of the revenue of the condominium. Among the factors considered in the underwriting of such loans are the level of owner occupancy, the financial condition and history of the condominium association, the attractiveness of the property in relation to the market in which it is located and the reasonableness of estimates of the cost of capital improvements to be made. Beyond loans extended to condominium associations, the only other commercial business loan currently held by the Holding Company is a $10 million one year note extended to a local university for purposes of funding student loans. As of December 31, 2001, the outstanding balance of commercial business loans totaled $42.6 million or 4.9 percent of total loans outstanding (excluding money market loan participations). Commercial business lending into more traditional types of commercial business loans is expected to become a greater area of lending emphasis for the Holding Company, in which Brookline Bancorp will be targeting small- and mid-size companies as well as current lending relationships maintained with commercial real estate borrowers as the primary sources of commercial loan growth.

The Holding Company's loan portfolio also includes money market loan participations, which consist of participations in commercial loans to national companies and organizations originated and serviced primarily by money center banks. Generally, the participations mature between one day and three months and are viewed by the Holding Company as an alternative short-term investment for liquidity management purposes rather than as traditional commercial loans. As of December 31, 2001, Brookline Bancorp's holdings of money market loan participations totaled $6.0 million. Over the past five years, the balance of money market loan participations ranged from a low of $6.0 million at year end 2001 to a high of $44.3 million at year end 1998.

Consumer loans represent a minor area of lending diversification for the Holding Company, as the consumer loan balance equaled $3.1 million or 0.4 percent of total loans outstanding (exclusive of money market loan participations) at December 31, 2001. The consumer loan portfolio consists primarily of loans secured by deposits, with the balance of the portfolio consisting of miscellaneous types of installment loans and outstanding credit card

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balances. Consumer lending is expected to remain as a limited area of lending diversification for the Holding Company.

ASSET QUALITY

The Holding Company's emphasis on credit risk management and generally favorable real estate market conditions have served to effectively limit asset quality problems. Over the past five years, Brookline Bancorp's balance of non-performing assets ranged from a high of 0.45 percent of assets at year end 1997 to a zero balance of non-performing assets at year end 2000. As of December 31, 2001, the Holding Company maintained non-performing assets equal to 0.14 percent of total assets. The higher balance of non-performing assets maintained at year end 1997 was primarily attributable to holding $2.4 million of other real estate owned and $2.3 million of restructured loans. As of December 31, 2001, the Holding Company maintained zero balances of other real estate owned and restructured loans. As shown in Exhibit I-11, the substantial portion of the Holding Company's non-performing asset balance at December 31, 2001 consisted of defaulted corporate debt security with a carrying value of $1.4 million. In the second quarter of 2001, Brookline Bancorp charged earnings $495,000 to recognize an other than temporary impairment in the carrying value of a $2.0 million bond issued by Southern California Edison. On March 1, 2002, principal and interest due on the bond was paid in full resulting in credit to income of $592,500.

The Holding Company reviews and classifies assets on a quarterly basis and establishes loan loss provisions based on the overall quality, size and composition of the loan portfolio, as well other factors such as historical loss experience, industry trends and local real estate market and economic conditions. For the past several years, a portion of the Holding Company's allowance for loan losses has been categorized as unallocated rather than being allocated to specific loan categories. The unallocated part of the allowance has been maintained in recognition of the inherent risks resulting from the following concentrations in the Holding Company's loan portfolio: the significance of loans in the higher risk categories of multi-family, commercial real estate and construction mortgage loans and other commercial loans, concentrations in geographic locations of properties on which such loans have been made and the aggregate amount of loans outstanding to large borrowers. The combination of these three

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concentrations creates a higher than normal degree of risk in the Holding Company's loan portfolio. The unallocated portion of the allowance tends to be a greater percent of the total allowance in periods when the economy is strong. The Holding Company maintained valuation allowances of $15.3 million at December 31, 2001, equal to 1.87 percent of net loans receivable and 968.4 percent of non-performing assets.

FUNDING COMPOSITION AND STRATEGY

Deposits have consistently served as the Holding Company's primary source of funds and at December 31, 2001 deposits accounted for 77.7 percent of Brookline Bancorp's interest-bearing funding composition. Exhibit I-12 provides historical detail of the Holding Company's deposit composition. Lower cost savings and transaction accounts comprise the largest component of the Holding Company's deposit composition, with such deposits amounting to $366.5 million or 59.0 percent of total deposits at December 31, 2001. Money market accounts comprise the largest component of the Holding Company's transaction and savings account balance, equaling $259.7 million or 70.9 percent of total transaction and savings accounts at December 31, 2001. The Holding Company experienced strong growth in money market accounts during 2001, which is believed to be primarily attributable to increased depositor preference to hold funds in liquid accounts as the result of the general decline in CD market rates.

CDs comprise the balance of the Holding Company's deposit composition, with the current CD composition reflecting a higher concentration of short-term CDs (maturities of one year or less). As of December 31, 2001, the CD portfolio totaled $254.4 million or 41.0 percent of total deposits, with 76.0 percent of the CD balance maturing in less than one year. As of December 31, 2001, jumbo CDs (CD accounts with balances of $100,000 or more) amounted to $62.0 million or 24.4 percent of total CDs. The Holding Company does not hold any brokered CDs. Exhibit I-13 provides the interest rate and maturity composition of the CD portfolio at December 31, 2001.

Borrowings serve as an alternative funding source for the Holding Company to support control of funding costs and to manage interest rate risk. Borrowings have become a more

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prominent funding source of the Holding Company's over the past five years, increasing from 9.9 percent of assets at year end 1997 to 16.2 percent of assets at year end 2001. As of December 31, 2001, the Holding Company held $178.1 million of FHLB advances. FHLB advances held by the Holding Company are fixed rate borrowings with laddered maturities generally out to five years. Exhibit I-14 provides detail of the Holding Company's borrowings activities during the past three years.

SUBSIDIARIES

Brookline Securities Corp. ("BSC") is a wholly-owned subsidiary of Brookline Bancorp and BBS Investment Corporation ("BBS") is a wholly-owned subsidiary of Brookline Savings. These companies were established as Massachusetts security corporations for the purpose of buying, selling and holding investment securities on their own behalf and not as a broker. The income earned on their investment securities is subject to a significantly lower rate of state tax than that assessed on income earned on investment securities owned by Brookline Bancorp and Brookline Savings. At December 31, 2001, BSC and BBS had total assets of $51.4 million and $111.3 million, respectively, of which $50.7 million and $110.4 million, respectively, were in investment securities and short-term investments. Most of the net conversion proceeds will initially be deployed into BSC and BBS and maintained in investment securities.

160 Associates, Inc. ("Associates") is a wholly-owned subsidiary of Brookline Savings established as a Massachusetts corporation primarily for the purpose of acquiring and holding stock in a subsidiary engaged in business that qualifies as a real estate investment trust. The amount of capital Associates invested in such activity amounted to $265.9 million at December 31, 2001.

Brookline Preferred Capital Corporation ("BPCC") is a 99.9 percent owned subsidiary of Associates established as a Massachusetts corporation to engage in real estate business activities (including the acquisition and holding of securities and mortgage loans) that enable it to be taxed as a real estate investment trust for federal and Massachusetts tax purposes. At December 31, 2001, BPCC had total assets of $266.6 million, $226.1 million of which were mortgage loans originated and acquired from Brookline Savings.

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LEGAL PROCEEDINGS

The Holding Company is involved in routine legal proceedings occurring in the ordinary course of business which, in the aggregate, involve amounts which are believed by management to be immaterial to the Holding Company's financial condition and results of operations.

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II. MARKET AREA

INTRODUCTION

Brookline Bancorp operates five full-service banking offices in the Town of Brookline, an urban/suburban community adjacent to the City of Boston, and a full service banking office in the City of Newton, a community adjacent to the Town of Brookline. The Brookline offices are located in Norfolk County and the Newton office is located in Middlesex County. Brookline Bancorp's deposits are gathered from the general public primarily in the Town of Brookline and surrounding communities, while the Holding Company's lending activities are concentrated primarily in the greater Boston metropolitan area and eastern Massachusetts. The Holding Company also maintains an operations center in Brookline and a call center in Waltham, Massachusetts. Exhibit II-1 provides information on the Holding Company's office facilities.

Consistent with large metropolitan areas in general, the economy in the Holding Company's market area is based on a mixture of service, manufacturing, wholesale/retail trade, and state and local government. The market area suffered a downturn in terms of economic activity and real estate values in the late-1980s and early-1990s -- in lockstep with the national recession. However, during the mid- and late-1990s as well as 2000, the Boston economy flourished in connection with the national economic expansion and a resulting increase in demand for the products and services produced by the Boston metropolitan economy, particularly with respect to the technology and financial services sectors. The national recession experienced in 2001 has adversely impacted the Boston metropolitan economy, most notably in the technology sector. Real estate values in the Boston metropolitan area have generally not deteriorated as occurred in the previous recession and unemployment in the primary market area counties remains at relatively low levels. Maintaining operations in a large metropolitan area serves as a benefit to the Holding Company in periods of economic growth, while at the same time fosters significant competition for the financial services provided by Brookline Bancorp. The Holding Company's competitive environment includes a large number of thrifts, commercial banks and other financial services companies, some of which have a regional or national presence.

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Future business and growth opportunities will be partially influenced by economic and demographic characteristics of the markets served by the Holding Company, particularly the future growth and stability of the regional economy, demographic growth trends, and the nature and intensity of the competitive environment for financial institutions. These factors have been examined to help determine the growth potential that exists for the Holding Company and the relative economic health of the Holding Company's market area.

MARKET AREA DEMOGRAPHICS

Demographic growth in the Holding Company's market area has been measured by changes in population, number of households and median household income, with trends in those areas summarized by the data presented in Table 2.1. Population growth has been experienced in both Middlesex and Norfolk Counties during the past decade, with the less populous Norfolk County posting a stronger annual growth rate than Middlesex County (0.5 percent versus 0.2 percent for Middlesex County). The population growth rates for Norfolk County and Middlesex County were slightly above and below the comparable Massachusetts growth rate, while both counties exhibited slower population growth rates than indicated for the U.S. Norfolk County's comparatively higher population growth rate reflects the outward expansion of the Boston MSA, with Norfolk County's proximity to Boston and less urban market area serving as attractive residential characteristics to individuals who maintain jobs in the Boston MSA. Population growth rates for both Middlesex and Norfolk Counties are projected to be slightly below the 0.5 percent annual growth rate projected for the Commonwealth of Massachusetts over the next five years.

Growth in the number of households paralleled population growth, as Norfolk County recorded a higher rate of household growth during the past decade compared to Middlesex County and Massachusetts, and a lower growth rate compared to the U.S. In general, the increased demand for housing resulting from the population growth and expanding economy has provided for significant appreciation in property values over the past ten years in the primary market area served by Brookline Bancorp. This has been favorable for the Holding Company in terms of limiting credit risk exposure and providing opportunities for loan growth.

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Median household and per capita income levels in Middlesex and Norfolk Counties were higher than the comparative medians for Massachusetts and the U.S., reflecting the relative affluence of the market area that serves as home to a high concentration of white collar professionals who work in the Boston MSA. Household income distribution measures further imply Middlesex and Norfolk Counties are affluent markets, as the income distribution measures for Middlesex and Norfolk Counties indicated significantly higher percentages of households with incomes above $100,000 compared to Massachusetts and the U.S. Growth in household income in the primary market area counties approximated the Massachusetts growth rate during the past decade, but was lower than the U.S. growth rate. Household income for both Middlesex and Norfolk Counties is projected to increase over next five years, but will increase at a slower pace than the projected growth rates for Massachusetts and the U.S. Based on these demographic trends, the markets served by the Holding Company are viewed as continuing to be conducive for lending and deposit growth opportunities.

NATIONAL ECONOMIC FACTORS

The future success of the Holding Company's operations is partially dependent upon various national and local economic trends. In assessing economic trends over the past year, signs of slower economic growth became more pronounced in the first quarter of 2001, as a number of companies initiated lay-offs to offset profit erosion caused by slackening demand for products and services in general. The economic slow down and the general decline in the stock market combined to erode consumer confidence as well. Despite the general downturn in the economy, the housing sector continued to prosper from the decline in mortgage rates. Home sales of previously owned homes rose in May 2001 to the third highest monthly level ever recorded and year-to-date sales of existing homes were up 2.6 percent compared to a year ago. The slowing economy also negatively impacted the budget surplus, which declined to $2.5 billion in July 2001, half its year ago level. However, inflation remained in-check, as consumer prices held steady with the support of lower energy prices.

The September 11, 2001 terrorist attack had negative implications throughout the U.S. economy and increased expectations that a recession was unavoidable. The U.S. economy

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shrank at a 0.4 percent annual rate in the third quarter of 2001, existing home sales fell 11.7 percent in September and the index of leading economic indicators fell 0.5 percent in September. Consumer confidence in October fell to its lowest level in seven years, as the October unemployment rate hit a five-year high of 5.4 percent. A decline in the manufacturing index for October provided another sign that the economy was continuing to struggle. The Federal Reserve's "beige book" report indicated that economic activity generally remained soft in October and the first half of November, with evidence of additional slowing in most regions of the U.S. Residential mortgage delinquencies rose in the third quarter, reflecting the impact of a rising unemployment rate. The unemployment rate increased to 5.8 percent in December, although increased working hours in the manufacturing sector provided indications of a possible economic rebound.

Signs of a healing economy became more prominent at the beginning of 2002, as manufacturing showed signs of expanding for the first time in 18 months, GDP growth was slightly positive in the fourth quarter of 2001 and the national unemployment rate declined from 5.8 percent in December 2001 to 5.6 percent in January 2002. January data for industrial production and retail sales provided further signs that the economic recovery was gaining traction and raised hopes that the recession was nearing an end. An upward revision in the fourth quarter GDP, a strong increase in a key manufacturing index for February and a decline in the February unemployment rate signaled that the U.S. economy was recovering more rapidly than expected. Consumer confidence surged in March to its highest level since December 2000, increasing expectations of a broad economic recovery in the U.S.

Interest rates generally trended lower through most of 2001. Concerns of a slumping economy prompted the Federal Reserve to reduce the overnight federal funds rate by 50 basis points in early-January 2001, which was followed by ten more rate cuts over the course of 2001. In total, the eleven rate cuts by the Federal Reserve sliced the target federal funds rate from 6.50 percent to 1.75 percent and provided for a reversion to a normal yield curve. The rate cuts implemented throughout 2001 served to widen the gap between short-and long-term interest rates as the year progressed and provided for a general decline in consumer rates. Lower mortgage rates spurred peak lending volumes for 1-4 family lenders, as the result of both refinancing activity as well as strong demand for new home purchases. Expectations of a slow economic

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recovery and low inflation provided for a stable interest rate environment at the beginning of 2002. The Federal Reserve left interest rates unchanged at its late-January meeting, based on indications that the economy stopped shrinking at the end of last year. After stabilizing through mid-February, interest rates moved higher in late-February and early-March as the economic rebound increased expectations that the Federal Reserve may raise interest rates by mid-year to keep inflation in check. The upward trend interest rates continued to prevail through most of March, as the Federal Reserve left interest rates unchanged at its mid-March meeting and indicated a shift in its policy directive to a neutral stance from one that favored additional easing. As of March 28, 2002, the yields for one- and ten-year U.S. Government notes equaled 2.66 percent and 5.39 percent, respectively, versus comparable year ago yields of 4.22 percent and 4.97 percent. Exhibit II-2 provides historical interest rate trends from 1991 through March 28, 2002.

LOCAL ECONOMY

The Holding Company's primary market area has a fairly diversified local economy, with employment in services, wholesale/retail trade and manufacturing serving as the basis of the local economy. Service jobs represent the largest employer in both of the primary market counties, with jobs in wholesale/retail trade accounting for the second largest employment sector. The manufacturing industry, once the backbone of the local economy, remains a notable employment sector in both Middlesex and Norfolk Counties. Manufacturing employment has generally experienced a decline in the Holding Company's primary market area during the 1990s, reflecting the general trend of a shrinking manufacturing base throughout the northeast. However, manufacturing jobs increased in Middlesex County during 1997 and 1998 and then declined in 1999. Demographic growth has facilitated job growth in most sectors of the local economy, with services, wholesale/retail trade, financial services and construction all reflecting strong job growth in the primary market area counties during the second half of the past decade. Since 1995, the primary market area has experienced job shrinkage in the manufacturing sector, while the number of government jobs in both counties has remained fairly stable.

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Comparative unemployment rates for Middlesex and Norfolk Counties, as well as for the U.S. and Massachusetts, are shown in Table 2.2. The unemployment data for the market area further indicates the strength of the local economy, as the most recent unemployment rates for Middlesex and Norfolk Counties were lower than the comparable measures for the U.S. and Massachusetts. As the result of the national recession, the U.S., Massachusetts and the counties served by the Holding Company have all experienced higher unemployment levels as of January 2002 compared to the prior year ago period.

Table 2.2 Unemployment Trends(1)

                         JANUARY 2001              JANUARY 2002
REGION                   UNEMPLOYMENT              UNEMPLOYMENT
------                   ------------              ------------
United States                4.7%                      6.3%
Massachusetts                3.3                       5.0
Middlesex County             2.1                       4.3
Norfolk County               2.2                       3.7

(1) Unemployment rates have not been seasonally adjusted.

Source: U.S. Bureau of Labor Statistics.

MARKET AREA DEPOSIT CHARACTERISTICS AND COMPETITION

Competition among financial institutions in the Holding Company's market area is significant, and, as larger institutions compete for market share to achieve economies of scale, the market environment for the Holding Company's products and services is expected to remain highly competitive in the future. Among the Holding Company's competitors are much larger and more diversified institutions, which have greater resources than maintained by Brookline Bancorp. Financial institution competitors in the Holding Company's primary market area include other locally-based thrifts and banks, as well as money center banks and other regional and super regional banks. From a competitive standpoint, Brookline Bancorp has sought to emphasize its community-orientation in the markets served by its branches.

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The Holding Company's retail deposit base is closely tied to the economic fortunes of the Boston MSA and, in particular, the areas of the region that are nearby to one of Brookline Bancorp's six branches. Table 2.3 displays deposit market trends from June 30, 1998 through June 30, 2001 for the two counties where the Holding Company maintains branches. The Holding Company did not maintain a branch in Middlesex County prior to the opening of its office in Newton in October 2000. Additional data is also presented for the Commonwealth of Massachusetts. The data indicates that deposit growth in the Holding Company's primary market area has been stronger than the comparable growth rate posted by all banks and thrifts in the Commonwealth of Massachusetts. In contrast to the Commonwealth of Massachusetts, savings institutions maintained a larger market share of deposits than commercial banks in both Middlesex and Norfolk Counties. Additionally, savings institutions gained deposit market share in Middlesex and Norfolk Counties from 1998 to 2001.

Brookline Bancorp's largest concentration and largest market share of deposits is maintained in Norfolk County, where the Holding Company is headquartered and currently maintains five of its six branch offices. The Holding Company's $575.3 million of deposits at the Norfolk County branches represented a 4.5 percent market share of thrift and bank deposits at June 30, 2001. An annual deposit growth rate of 6.8 percent served to maintain the Holding Company's market share of Norfolk County bank and thrift deposits from June 30, 1998 through June 30, 2001. The Middlesex County branch was able to acquire $11.9 million of deposits during its first eight months of operation as of June 30, 2001, which represented a nominal market share of total county deposits.

Future deposit growth may be enhanced by the infusion of the conversion proceeds, as the additional capital will improve Brookline Bancorp's competitive position and leverage capacity. Most notably, deposit growth should be enhanced by implementation of a retail banking strategy that will place more of an emphasis on gaining deposit market share through more aggressive marketing of products and services to existing customers, as well as building Brookline Bancorp's brand identity as the community bank of choice. Deposit growth should also be enhanced by the introduction of cash management services for commercial accounts and possible expansion of the branch network. Brookline Bancorp should also continue to benefit from its favorable image as a locally-owned and community-oriented institution, as the trend of

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consolidation among financial institutions is expected to provide Brookline Bancorp with additional opportunities to acquire customers and key personnel that become available as the result of community banks being acquired, and, most notably, as the result of large bank combinations.

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III. PEER GROUP ANALYSIS

This chapter presents an analysis of Brookline Bancorp's operations versus a group of comparable savings institutions (the "Peer Group") selected from the universe of all publicly-traded savings institutions in a manner consistent with the regulatory valuation guidelines. The basis of the pro forma market valuation of Brookline Bancorp is derived from the pricing ratios of the Peer Group institutions, incorporating valuation adjustments for key differences in relation to the Peer Group. Since no Peer Group can be exactly comparable to Brookline Bancorp, key areas examined for differences are: financial condition; profitability, growth and viability of earnings; asset growth; primary market area; dividends; liquidity of the shares; marketing of the issue; management; and effect of government regulations and regulatory reform.

PEER GROUP SELECTION

The Peer Group selection process is governed by the general parameters set forth in the regulatory valuation guidelines. Accordingly, the Peer Group is comprised of only those publicly-traded savings institutions whose common stock is either listed on a national exchange (NYSE or AMEX) or is NASDAQ listed, since their stock trading activity is regularly reported and generally more frequent than non-publicly traded and closely-held institutions. Non-listed institutions are inappropriate since the trading activity for thinly-traded or closely-held stocks is typically highly irregular in terms of frequency and price and thus may not be a reliable indicator of market value. We have also excluded from the Peer Group those companies under acquisition or subject to rumored acquisition, mutual holding companies and recent conversions, since their pricing ratios are subject to unusual distortion and/or have limited trading histories. A recent listing of the universe of all publicly-traded savings institutions is included as Exhibit III-1.

Ideally, the Peer Group, which must have at least 10 members to comply with the regulatory valuation guidelines, should be comprised of locally or regionally-based institutions with comparable resources, strategies and financial characteristics. There are approximately 265 publicly-traded institutions nationally and, thus, it is typically the case that the Peer Group will be comprised of institutions with relatively comparable characteristics. To the extent that

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differences exist between the converting institution and the Peer Group, valuation adjustments will be applied to account for the differences. Since Brookline Bancorp will be a full public company upon completion of the offering, we considered only full public companies to be viable candidates for inclusion in the Peer Group. From the universe of publicly-traded thrifts, we selected ten institutions with characteristics similar to those of Brookline Bancorp. In the selection process, we applied two "screens" to the universe of all public companies:

o SCREEN #1. NEW ENGLAND INSTITUTIONS WITH ASSETS BETWEEN $500 MILLION AND $5 BILLION, EQUITY-TO-ASSETS RATIOS OF AT LEAST 8.0 PERCENT AND POSITIVE CORE RETURN ON ASSETS RATIOS OF GREATER THAN 0.75 PERCENT. Eight companies met the criteria for Screen #1 and seven were included in the Peer Group: American Financial Holdings of CT, Bay State Bancorp of MA, Berkshire Hills Bancorp of MA, Connecticut Bancshares of CT, MassBank Corp. of MA, Port Financial Corp. of MA and Seacoast Financial Services Corp. of MA. NewMil Bancorp of CT was the eighth company which met the selection criteria, but was excluded due to its relatively low level of tangible capital, which equaled 6.8 percent of assets. Exhibit III-2 provides financial and public market pricing characteristics of all publicly-traded New England thrifts.

o SCREEN #2. MID-ATLANTIC INSTITUTIONS WITH ASSETS BETWEEN $500 MILLION AND $5 BILLION, EQUITY-TO-ASSETS RATIOS OF AT LEAST 10.0 PERCENT AND POSITIVE CORE RETURN ON ASSETS RATIOS OF GREATER THAN 0.75 PERCENT. Three companies met the criteria for Screen #2 and all were included in the Peer Group: First Sentinal Bancorp of NJ, Hudson River Bancorp of NY and Troy Financial Corp. of NY. Exhibit III-3 provides financial and public market pricing characteristics of all publicly-traded Mid-Atlantic thrifts.

Table 3.1 shows the general characteristics of each of the ten Peer Group companies and Exhibit III-4 provides summary demographic and deposit market share data for the primary market areas served by each of the Peer Group companies. While there are expectedly some differences between the Peer Group companies and Brookline Bancorp, we believe that the Peer Group companies, on average, provide a good basis for valuation subject to valuation adjustments. The following sections present a comparison of Brookline Bancorp's financial condition, income and expense trends, loan composition, interest rate risk and credit risk versus the Peer Group as of the most recent publicly available date.

A summary description of the key characteristics of each of the Peer Group companies is detailed below.

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o American Financial Holdings of CT. Selected due to high capital position, comparable funding composition, high return on assets, low level of operating expenses and favorable credit quality measures.

o Bay State Bancorp of MA. Selected due to Boston metropolitan market area, similar size of branch network, strong net interest margin, modest earnings contribution from sources of non-interest operating income, high degree of lending diversification into commercial real estate and multi-family loans and favorable credit quality measures.

o Berkshire Hills Bancorp of MA. Selected due to comparable asset size, high level of capital, similar interest-earning asset composition, similar funding composition, strong net interest margin, significant lending diversification into higher yielding and higher risk types of lending and favorable credit quality measures.

o Connecticut Bancshares of CT. Selected due to strong net interest margin and favorable credit quality measures.

o First Sentinal Bancorp of NJ. Selected due to strong return on assets, modest earnings contribution from sources of non-interest operating income, low level of operating expenses and favorable credit quality measures.

o Hudson River Bancorp of NY. Selected due to comparable interest-earning asset composition and strong net interest margin.

o MassBank Corp. of MA. Selected due to Boston metropolitan market area, comparable asset size, modest earnings contribution from sources of non-interest operating income, low level of operating expenses and favorable credit quality measures.

o Port Financial Corp. of MA. Selected due to Boston metropolitan market area, comparable asset size, modest earnings contribution from sources of non-interest operating income, notable lending diversification into commercial real estate and multi-family loans and favorable credit quality measures.

o Seacoast Financial Services Corp. of MA. Eastern Massachusetts market area, similar interest-earning asset composition, low level operating expenses, notable lending diversification into higher yielding and higher risk types of loans and favorable credit quality measures.

o Troy Financial Corp. of NY. Selected due to comparable asset size, high level of capital, strong net interest margin, notable lending diversification into commercial real estate and multi-family loans and favorable credit quality measures.

In aggregate, the Peer Group companies maintain a slightly higher level of capital than the industry average (12.33 percent of assets versus 10.49 percent for all public companies), generate higher earnings as a percent of average assets (1.02 percent core ROAA versus 0.72 percent for all public companies), and generate a slightly higher core ROE (7.91 percent core ROE versus 7.31 percent for all public companies). Overall, the Peer Group's average P/B ratio and average core P/E multiple were above the respective averages for all publicly-traded thrifts.

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                                                       ALL
                                                 PUBLICLY-TRADED            PEER GROUP
                                                 ---------------            ----------
FINANCIAL CHARACTERISTICS (AVERAGES)
Assets ($Mil)                                             $2,243                 $1,652
Market capitalization ($Mil)                                $294                   $292
Equity/assets (%)                                         10.49%                 12.33%
Core return on assets (%)                                  0.72%                  1.02%
Core return on equity (%)                                  7.31%                  7.91%

PRICING RATIOS (AVERAGES)(1)
-------------------------
Core price/earnings (x)                                   16.50x                 18.33x
Price/book (%)                                           126.46%                143.71%
Price/assets (%)                                          12.94%                 17.65%

(1) Based on market prices as of March 28, 2002.

Ideally, the Peer Group companies would be comparable to Brookline Bancorp in terms of all of the selection criteria, but the universe of publicly-traded thrifts does not provide for an appropriate number of such companies. However, in general, the companies selected for the Peer Group were fairly comparable to Brookline Bancorp, as will be highlighted in the following comparative analysis.

FINANCIAL CONDITION

Table 3.2 shows comparative balance sheet measures for Brookline Bancorp and the Peer Group, reflecting the expected similarities and some differences given the selection procedures outlined above. The Holding Company's and the Peer Group's ratios reflect balances as of December 31, 2001, unless indicated otherwise for the Peer Group companies. Brookline Bancorp's equity-to-assets ratio of 26.0 percent was well above the Peer Group's average net worth ratio of 12.3 percent. Accordingly, following the increase in capital provided by the infusion of net conversion proceeds, the difference between the Holding Company's and the Peer Group's capital positions will become more significant. All of the Holding Company's capital consisted of tangible capital, while the Peer Group's capital included intangibles equal to 0.9 percent of assets. Brookline Bancorp's significantly higher pro forma capital position is considered to be favorable from a risk perspective and in terms of future earnings potential that

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could be realized through leverage and lower funding costs. At the same time, the Holding Company's significantly higher pro forma capitalization will initially depress return on equity. Both the Holding Company's and the Peer Group's capital ratios reflected healthy capital surpluses with respect to the regulatory capital requirements, with the Holding Company's ratios currently exceeding the Peer Group's ratios.

The interest-earning asset compositions for the Holding Company and the Peer Group were somewhat similar, with loans constituting the bulk of interest-earning assets for Brookline Bancorp and the Peer Group. Brookline Bancorp maintained a higher concentration of loans as a percent of assets than the Peer Group (74.5 percent versus 66.3 percent for the Peer Group), while the Holding Company's cash and investments-to-assets ratio was lower than the comparable ratio for the Peer Group (24.1 percent versus 29.2 percent for the Peer Group). Overall, Brookline Bancorp's interest-earning assets amounted to 98.6 percent of assets, which was above the comparable Peer Group ratio of 95.5 percent. The Holding Company's higher ratio of interest-earning assets was supported by its relatively low investment in fixed assets and absence of intangible assets.

Brookline Bancorp's funding liabilities reflected some minor differences relative to that of the Peer Group's funding composition. The Holding Company's deposits equaled 56.5 percent of assets, which was below the Peer Group average of 68.8 percent. Likewise, borrowings accounted for a lower portion of the Holding Company's interest-bearing funding composition, as reflected by borrowings-to-assets ratios of 16.2 percent and 17.2 percent for Brookline Bancorp and the Peer Group, respectively. Total interest-bearing liabilities maintained as a percent of assets equaled 72.7 percent and 86.0 percent for Brookline Bancorp and the Peer Group, respectively, with the Holding Company's lower ratio resulting from maintenance of a higher level of capital.

A key measure of balance sheet strength for a thrift institution is its interest-earning assets-to-interest-bearing liabilities ("IEA/IBL") ratio. Presently, the Holding Company's IEA/IBL ratio is well above the Peer Group's ratio, based on respective ratios of 135.6 percent and 111.0 percent. The additional capital realized from stock proceeds should serve to further

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increase Brookline Bancorp's IEA/IBL ratio, as the capital realized from Brookline Bancorp's stock offering will be primarily deployed into interest-earning assets.

The growth rate section of Table 3.2 shows annual growth rates for key balance sheet items, based on annual growth for the twelve months ended December 31, 2001. Asset growth rates of 6.1 percent and positive 18.4 percent were posted by the Holding Company and the Peer Group, respectively. The Peer Group's stronger growth rate was in part supported by acquisition related growth, which substantially contributed to Hudson River Bancorp' asset growth rate of 60.4 percent and Connecticut Bancshares' asset growth rate of 74.3 percent. Brookline Bancorp's asset growth was realized through a 12.1 percent increase in loans, which was in part funded by a 7.8 percent decline in cash and investments. Comparatively, asset growth for the Peer Group showed stronger growth rates for both loans and cash and investments, once again reflecting the impact of the acquisition related growth. Following the conversion, the increase in capital provided by the conversion proceeds will serve to further increase Brookline Bancorp's current advantage with respect to leverage capacity. Overall, net of the Peer Group's acquisition related growth, the Holding Company's asset growth measures and future asset growth potential were considered to be more favorable than the Peer Group's.

Asset growth for the Holding Company was primarily funded by borrowings and, to a lesser extent, deposits and equity. Asset growth for the Peer Group was funded by a combination of deposits and borrowings. Deposit growth of 2.0 percent posted by the Holding Company was not as strong as the Peer Group's deposit growth rate of 20.0 percent. As noted above, the Peer Group's deposit growth was in part supported by acquisition related growth. Comparatively, the Holding Company's deposit growth was achieved only through internal growth. Brookline Bancorp's borrowings growth rate of 33.5 percent exceeded the comparable Peer Group growth rate of 14.4 percent, although the Peer Group average was understated by the Peer Group companies which recorded borrowing growth rates in excess of 100 percent. For the period shown in Table 3.2, both of the "NM" borrowing growth rates shown for the Peer Group companies in Table 3.2 were attributable to companies recording borrowing growth rates in excess of 100 percent. Capital growth rates posted by the Holding Company and the Peer Group equaled 1.01 and a decline of 3.4 percent, respectively. Both the Holding Company's and the Peer Group's capital growth rates were depressed by dividend payments and stock repurchases.

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The increase in capital realized from conversion proceeds, as well as dividend payments on 100 percent of the stock outstanding and possible stock repurchases will pose further limitations on the Holding Company's capital growth rate following the stock offering. However, given Brookline Bancorp's significant pro forma capital position, the need for further growth of the Holding Company's capital is substantially diminished.

INCOME AND EXPENSE COMPONENTS

Brookline Bancorp and the Peer Group reported net income to average assets ratios of 1.80 percent and 1.05 percent, respectively (see Table 3.3), based on earnings for the twelve months ended December 31, 2001, unless indicated otherwise for the Peer Group companies. A higher net interest margin, a lower level of operating expenses, higher net gains and lower loss provisions, which were partially offset by the Peer Group's higher level of non-interest operating income, accounted for the Holding Company's higher return.

The Holding Company's stronger net interest margin resulted from both a higher interest income ratio and a lower interest expense ratio. Brookline Bancorp's higher interest income ratio was consistent with its higher yield earned on interest-earning assets (7.21 percent versus 7.06 for the Peer Group) and maintenance of a higher level of interest-earning assets as a percent of total assets (98.6 percent versus 95.5 percent for the Peer Group). The lower interest expense ratio posted by the Holding Company was supported by maintenance of a lower level of interest-bearing liabilities as a percent of assets (72.7 percent versus 86.0 percent for the Peer Group), which was partially offset by the Peer Group's lower cost of funds (3.93 percent versus 4.38 percent for the Holding Company). Overall, Brookline Bancorp and the Peer Group reported net interest income to average assets ratios of 4.01 percent and 3.42 percent, respectively.

In another key area of core earnings, the Holding Company maintained a lower level of operating expenses than the Peer Group. For the period covered in Table 3.3, the Holding Company and the Peer Group recorded operating expense to average assets ratios of 1.57 percent and 2.20 percent, respectively. The Holding Company's lower operating expense ratio was indicative of its greater efficiency with respect to maintaining a lower number of employees

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relative to its asset size. Assets per full time equivalent employee equaled $9.6 million for the Holding Company, versus a comparable measure of $5.2 million for the Peer Group. The Holding Company's lower staffing requirements can in part be attributed to a lending strategy that emphasizes origination of relatively high balance commercial real estate and multi-family loans, which tend to be less costly to service compared to a similar balance of relatively small balance 1-4 family loans. Other factors contributing to the Holding Company's high ratio of assets per employee is the relatively small size of the branch network and maintaining a funding composition that consists of a relatively low percentage of deposits.

When viewed together, net interest income and operating expenses provide considerable insight into a thrift's earnings strength, since those sources of income and expenses are typically the most prominent components of earnings and are generally more predictable than losses and gains realized from the sale of assets or other non-recurring activities. In this regard, as measured by their expense coverage ratios (net interest income divided by operating expenses), the Holding Company earnings strength was more favorable than the Peer Group's. Expense coverage ratios posted by Brookline Bancorp and the Peer Group equaled 2.55x and 1.55x, respectively. An expense coverage ratio of greater than 1.0x indicates that an institution is able to sustain pre-tax profitability without having to rely on non-interest sources of income.

Sources of non-interest operating income provided a larger contribution to the Peer Group's earnings, with such income amounting to 0.44 percent and 0.19 percent of the Peer Group's and Brookline Bancorp's average assets, respectively. The Holding Company's relatively low earnings contribution from sources of non-interest operating income stems from a lack of diversification into areas that generate revenues from non-interest sources, as well as a funding composition that generates only modest revenues from fees and service charges. Taking non-interest operating income into account in comparing the Holding Company's and the Peer Group's earnings, Brookline Bancorp's efficiency ratio of 37.4 percent was more favorable than the Peer Group's efficiency ratio of 55.4 percent.

Loan loss provisions had a slightly larger impact on the Peer Group's earnings, amounting to 0.17 percent and 0.09 percent of the Peer Group's and Brookline Bancorp's average assets, respectively. In comparison to the Holding Company, the higher loss provisions

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established by the Peer Group was consistent with its lower reserve coverage ratios and maintenance of a higher non-performing assets-to-assets ratio.

Net gains made a larger contribution to the Holding Company's earnings, with such gains amounting to 0.31 and 0.03 percent of average assets for Brookline Bancorp and the Peer Group, respectively. The Holding Company's net gains included the restructuring charge related to merger of Lighthouse into the Bank. Given the less predictable and more non-recurring nature of gains and losses resulting from the sale of loans and investments, as well as other assets, the net gains reflected in the Holding Company's and the Peer Group's earnings will be discounted in evaluating the relative strengths and weaknesses of their respective earnings. Extraordinary items were not a factor in either the Holding Company's or the Peer Group's earnings.

Taxes were a slightly larger factor in the Peer Group's earnings, as Brookline Bancorp and the Peer Group posted effective tax rates of 36.74 percent and 38.27 percent, respectively.

LOAN COMPOSITION

Table 3.4 presents data related to the loan composition of Brookline Bancorp and the Peer Group. In comparison to the Holding Company, the Peer Group's loan portfolio composition reflected a higher concentration in the aggregate of 1-4 family residential mortgage loans and mortgage-backed securities (53.0 percent versus 24.6 percent for the Holding Company). The Peer Group maintained higher concentrations of both 1-4 family loans and mortgage-backed securities. Reflecting the Peer Group's generally greater emphasis on 1-4 lending, loans serviced for others represented a larger off-balance sheet item for the Peer Group, equaling $36.2 million and $112.1 million for Brookline Bancorp and the Peer Group, respectively. The Peer Group maintained a modest balance of servicing intangibles, while servicing intangibles were not a factor on the Holding Company's balance sheet.

Diversification into higher risk types of lending was more significant for Holding Company, particularly in the area of commercial real estate and multi-family loans. Commercial real estate/multi-family loans equaled 55.6 percent of the Holding Company's assets. The Peer Group's lending diversification consisted primarily of commercial real estate/ multi-family loans and commercial business loans, with those portfolios equaling 14.1 percent and 5.6 percent of

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assets, respectively. Beyond commercial real estate/multi-family loans, lending diversification for the Holding Company was fairly modest consisting mostly of commercial business loans (4.4 percent of assets). Consistent with the Holding Company's greater diversification into higher risk types of lending, the Holding Company maintained a higher risk-weighted assets-to-assets ratio compared to the Peer Group (81.9 percent versus 61.9 percent for the Peer Group).

INTEREST RATE RISK

Table 3.5 reflects various key ratios highlighting the relative interest rate risk exposure of the Holding Company versus the Peer Group. In terms of balance sheet composition, Brookline Bancorp's interest rate risk characteristics were considered to be more favorable than the Peer Group's, as implied by the Holding Company's higher equity-to-assets and IEA/IBL ratios. A lower level of non-interest earning assets also represented an advantage for the Holding Company with respect to limiting interest rate risk associated with the balance sheet. On a pro forma basis, the infusion of stock proceeds should serve to provide the Holding Company with more significant comparative advantages over the Peer Group's balance sheet interest rate risk characteristics, particularly with respect to the increases that will be realized in the Holding Company's equity-to-assets and IEA/IBL ratios.

To analyze interest rate risk associated with the net interest margin, we reviewed quarterly changes in net interest income as a percent of average assets for Brookline Bancorp and the Peer Group. In general, the relative fluctuations in both the Holding Company's and the Peer Group's net interest income to average assets ratios were considered to be fairly comparable and, thus, based on the interest rate environment that prevailed during the period covered in Table 3.5, the degree of earnings volatility associated with their respective net interest margins were considered to be similar. The stability of the Holding Company's net interest margin should be enhanced by the infusion of stock proceeds, as interest rate sensitive liabilities will be funding a lower portion of Brookline Bancorp's assets and the proceeds will be substantially deployed into interest-earning assets.

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CREDIT RISK

The Holding Company's credit risk exposure appears to be somewhat lower than the Peer Group's, as indicated by Brookline Bancorp's higher reserve coverage ratios and lower ratios of non-performing loans and non-performing assets. As shown in Table 3.6, the Holding Company's non-performing loans/loans and non-performing assets/assets ratios of 0.02 percent and 0.14 percent, respectively, were below the Peer Group's respective ratios of 0.36 and 0.27 percent. Loss reserve ratios were also stronger for the Holding Company, as Brookline Bancorp maintained a higher level of loss reserves as a percent of non-performing assets and accruing loans that are more than 90 days past due (968.4 percent versus 330.0 percent for the Peer Group) and as a percent of loans (1.83 percent versus 1.25 percent for the Peer Group). Net loan charge-offs were also a larger factor for Peer Group, as the Holding Company recorded a slight net recovery during the twelve month period. Overall, both the Holding Company's and the Peer Group's credit quality measures were considered to be representative of fairly limited credit risk exposure.

SUMMARY

Based on the above analysis and the criteria employed in the selection of the companies for the Peer Group, RP Financial concluded that the Peer Group forms a reasonable basis for determining the pro forma market value of Brookline Bancorp. Such general characteristics as asset size, capital position, interest-earning asset composition, funding composition, core earnings measures, loan composition, credit quality and exposure to interest rate risk all tend to support the reasonability of the Peer Group from a financial standpoint. Those areas where differences exist will be addressed in the form of valuation adjustments to the extent necessary.

IV. VALUATION ANALYSIS

INTRODUCTION

This chapter presents the valuation analysis and methodology used to determine Brookline Bancorp's estimated pro forma market value of the common stock to be issued in conjunction with the conversion transaction. The valuation incorporates the appraisal methodology promulgated by the OTS, particularly regarding selection of the Peer Group, fundamental analysis on both the Holding Company and the Peer Group and determination of the Holding Company's pro forma market value utilizing the market value approach.

APPRAISAL GUIDELINES

The OTS written appraisal guidelines, originally released in October 1983 and updated in late-1994, specify the market value methodology for estimating the pro forma market value of an institution pursuant to a mutual-to-stock conversion. The valuation methodology provides for: (1) the selection of a peer group of comparable publicly-traded institutions, excluding from consideration institutions which have recently converted, subject to acquisition or in MHC form; (2) a financial and operational comparison of the subject company to the selected peer group, identifying key differences and similarities; and (3) a valuation analysis in which the pro forma market value of the subject company is determined based on the market pricing of the peer group as of the date of valuation, incorporating valuation adjustments for key differences. In addition, the pricing characteristics of recent conversions, both at conversion and in the aftermarket, must be considered.

RP FINANCIAL APPROACH TO THE VALUATION

The valuation analysis herein complies with such regulatory approval guidelines. Accordingly, the valuation incorporates a detailed analysis based on the Peer Group, discussed in Chapter III, which constitutes "fundamental analysis" techniques. Additionally, the valuation incorporates a "technical analysis" of recently completed stock conversions, including closing pricing and aftermarket trading of such offerings. It should be noted that such analyses cannot

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possibly fully account for all the market forces which impact trading activity and pricing characteristics of a stock on a given day.

The pro forma market value determined herein is a preliminary value for the Holding Company's to-be-issued stock. Throughout the conversion process, RP Financial will: (1) review changes in the Holding Company's operations and financial condition; (2) monitor the Holding Company's operations and financial condition relative to the Peer Group to identify any fundamental changes; (3) monitor the external factors affecting value including, but not limited to, local and national economic conditions, interest rates, and the stock market environment, including the market for thrift stocks; and (4) monitor pending conversion offerings (including those in the offering phase) both regionally and nationally. If material changes should occur prior to closing the offering, RP Financial will evaluate if updated valuation reports should be prepared reflecting such changes and their related impact on value, if any. RP Financial will also prepare a final valuation update at the closing of the offering to determine if the prepared valuation analysis and resulting range of value continues to be appropriate.

The appraised value determined herein is based on the current market and operating environment for the Holding Company and for all thrifts. Subsequent changes in the local and national economy, the legislative and regulatory environment, the stock market, interest rates, and other external forces (such as natural disasters or major world events), which may occur from time to time (often with great unpredictability) may materially impact the market value of all thrift stocks, including Brookline Bancorp's value, or Brookline Bancorp's value alone. To the extent a change in factors impacting the Holding Company's value can be reasonably anticipated and/or quantified, RP Financial has incorporated the estimated impact into its analysis.

VALUATION ANALYSIS

A fundamental analysis discussing similarities and differences relative to the Peer Group was presented in Chapter III. The following sections summarize the key differences between the Holding Company and the Peer Group and how those differences affect the pro forma valuation. Emphasis is placed on the specific strengths and weaknesses of the Holding Company relative to the Peer Group in such key areas as financial condition, profitability, growth and viability of

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earnings, asset growth, primary market area, dividends, liquidity of the shares, marketing of the issue, management and the effect of government regulations and/or regulatory reform. We have also considered the market for thrift stocks, in particular new issues, to assess the impact on value of Brookline Bancorp coming to market at this time.

1. FINANCIAL CONDITION

The financial condition of an institution is an important determinant in pro forma market value, because investors typically look to such factors as liquidity, capital, asset composition and quality and funding sources in assessing investment attractiveness. The similarities and differences in the Holding Company's and the Peer Group's financial strength are noted as follows:

o OVERALL A/L COMPOSITION. Loans funded by retail deposits were the primary components of both Brookline Bancorp's and the Peer Group's balance sheets. The Holding Company's interest-earning asset composition exhibited a higher level of loans and a greater concentration of higher risk and higher yielding types of loans. The Peer Group's lower concentration of loans and less significant lending diversification translated into a lower risk weighted assets-to-assets ratio than maintained by the Peer Group. Brookline Bancorp's funding composition reflected a lower level of deposits and a similar level of borrowings relative to the comparable Peer Group ratios. Overall, as a percent of assets, the Holding Company maintained a higher level of interest-earning assets and a lower level of interest-bearing liabilities, which resulted in a significantly higher IEA/IBL ratio for the Holding Company. The infusion of stock proceeds should serve to further increase the Holding Company's IEA/IBL ratio and provide a more significant comparative advantage relative to the Peer Group's IEA/IBL ratio on a pro forma basis. For valuation purposes, RP Financial concluded that a slight upward adjustment was warranted for the Holding Company's overall asset/liability composition.

o CREDIT QUALITY. Both the Holding Company's and the Peer Group's credit quality measures were indicative of fairly limited credit risk exposure. However, in general, the Holding Company's credit quality measures were considered to be more favorable than the Peer Group's. The Holding Company maintained a lower non-performing assets-to-assets ratio and a lower non-performing loans-to-loan ratio than the comparable Peer Group ratios. While the Holding Company's risk weighted assets-to-assets ratio was also slightly higher than the Peer Group's ratio, the Holding Company maintained higher loss reserve ratios than maintained by the Peer Group, as a percent of non-performing assets and as a percent of net

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loans receivable. Overall, in comparison to the Peer Group, the Holding Company's measures implied a more limited degree of credit exposure and, thus, RP Financial concluded that a slight upward adjustment was warranted for the Holding Company's credit quality.

o BALANCE SHEET LIQUIDITY. The Holding Company operated with a slightly lower level of cash and investment securities relative to the Peer Group (24.1 percent of assets versus 29.2 percent for the Peer Group). Following the infusion of stock proceeds, the Holding Company's cash and investments ratio is expected to increase as the proceeds retained at the Holding Company level are anticipated to be initially deployed into investments. Brookline Bancorp's future borrowing capacity was considered to be somewhat greater than Peer Group's, as the Holding Company's stronger capital position implied a greater capacity to leverage through utilization of borrowings. Overall, balance sheet liquidity for the Holding Company was considered to be comparable to the Peer Group and, thus, RP Financial concluded that no adjustment was warranted for the Holding Company's balance sheet liquidity.

o FUNDING LIABILITIES. Retail deposits served as the primary interest-bearing source of funds for the Holding Company and the Peer Group, with the Peer Group's funding composition reflecting a higher level of deposits and a comparable level of borrowings relative to the Holding Company's ratios. The Holding Company's overall funding composition provided for a higher cost of funds than maintained by the Peer Group. In total, the Peer Group maintained a higher level of interest-bearing liabilities than the Peer Group. Accordingly, following the stock offering, the increase in the Holding Company's capital ratio will serve to further lower the Holding Company's level of interest-bearing liabilities relative to the Peer Group's. Overall, RP Financial concluded that no adjustment was warranted for Brookline Bancorp's funding liabilities.

o CAPITAL. The Holding Company operates with a higher pre-conversion capital ratio than the Peer Group, 26.0 percent and 12.3 percent of assets, respectively. Accordingly, following the stock offering, Brookline Bancorp's pro forma capital position will be significantly above the Peer Group's equity-to-assets ratio. The Holding Company's higher pro forma capital position implies greater leverage capacity, lower dependence on interest-bearing liabilities to fund assets and a greater capacity to absorb unanticipated losses. Overall, RP Financial concluded that a moderate upward adjustment was warranted for the Holding Company's pro forma capital position.

On balance, Brookline Bancorp's financial condition was considered to be more favorable than the Peer Group's, as implied by the more favorable credit quality, capital strength and overall asset/liability composition of the Holding Company's pro forma balance sheet.

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Accordingly, we concluded that a slight upward valuation adjustment was warranted for the Holding Company's financial strength.

2. PROFITABILITY, GROWTH AND VIABILITY OF EARNINGS

Earnings are a key factor in determining pro forma market value, as the level and risk characteristics of an institution's earnings stream and the prospects and ability to generate future earnings heavily influence the multiple the investment community will pay for earnings. The major factors considered in the valuation are described below.

o REPORTED EARNINGS. The Holding Company recorded higher earnings on a ROAA basis (1.80 percent of average assets versus 1.05 percent for the Peer Group). A stronger net interest margin and lower level of operating expenses largely accounted for the Holding Company's more favorable reported earnings. A slightly lower level of loss provisions and higher net gains were also factors that supported the Holding Company's higher return. A higher earnings contribution from sources of non-interest operating income represented an earnings advantage for the Peer Group. Reinvestment of stock proceeds into interest-earning assets will serve to increase the Holding Company's earnings, with the benefit of reinvesting proceeds expected to be somewhat offset by higher operating expenses associated with opening additional branches and plans to more aggressively grow the commercial loan portfolio. Overall, the differences between the Holding Company's and the Peer Group's reported earnings were considered to be representative of the Holding Company's superior earnings strength and, thus, Brookline Bancorp's higher reported earnings warranted a moderate upward adjustment for valuation purposes.

o CORE EARNINGS. Both the Holding Company's and the Peer Group's earnings were derived largely from recurring sources, including net interest income, operating expenses, and non-interest operating income. In these measures, the Holding Company operated with a higher net interest margin, a lower operating expense ratio and a lower level of non-interest operating income. The Holding Company's higher net interest margin and lower level of operating expenses translated into a lower expense coverage ratio (2.55x versus 1.55x for the Peer Group). The Holding Company's efficiency ratio was also more favorable than the Peer Group's (37.4 percent versus 55.4 percent for the Peer Group), as the Holding Company's higher net interest margin and lower level of operating expenses more than offset the Peer Group's higher level of non-interest operating income. Loss provisions had a slightly larger impact on the Peer Group's earnings, although loss provisions established by both the Holding Company and the Peer Group were considered to be limited and indicative of favorable credit quality measures. Overall, these measures, as well as the expected earnings benefits the Holding

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Company should realize from the redeployment of stock proceeds into interest-earning assets, indicated that Brookline Bancorp's core earnings were stronger than the Peer Group's and a moderate upward adjustment was warranted for the Holding Company's core earnings.

o INTEREST RATE RISK. Quarterly changes in the Holding Company's and the Peer Group's net interest income to average assets ratios indicated a similar degree of interest rate risk exposure in their respective net interest margins. Other measures of interest rate risk, such as capital ratios, IEA/IBL ratios and the level of non-interest earning assets-to-total assets were more favorable for the Holding Company, thereby indicating a lower dependence on the yield-cost spread to sustain net interest income. On a pro forma basis, the Holding Company's capital position and IEA/IBL ratio will be enhanced by the infusion of stock proceeds and, thus, provide, the Holding Company with more significant comparative advantages relative to the Peer Group's balance sheet ratios. Accordingly, RP Financial concluded that the Holding Company's balance sheet interest rate risk exposure on a pro forma basis was less than the Peer Group's and a slight upward adjustment was warranted for valuation purposes.

o CREDIT RISK. Loan loss provisions were a slightly larger factor in the Peer Group's earnings, but were not considered to be significant for either the Holding Company or the Peer Group. In terms of future exposure to credit quality related losses, lending diversification into higher risk types of loans was greater for the Holding Company. However, the credit risk exposure associated with the Holding Company's earnings was considered to be more favorable with respect to maintaining a lower level of non-performing assets and stronger reserve coverage ratios. Overall, RP Financial concluded that no adjustment was warranted for the Holding Company's earnings credit risk exposure.

o EARNINGS GROWTH POTENTIAL. Several factors were considered in assessing earnings growth potential. First, the Holding Company's recent historical growth has been less than the Peer Group's, due largely to acquisition related growth by some of the Peer Group companies. Second, the infusion of stock proceeds will increase the Holding Company's earnings growth potential with respect to leverage capacity and providing the Holding Company with additional liquidity for purposes of funding loan growth. Lastly, the markets served by the Peer Group companies are similar to or in many cases the same markets served by the Holding Company and, thus, do no represent an advantage or disadvantage in terms of providing opportunities for loan and deposit growth. Overall, on the basis of the Holding Company's significant pro forma leverage capacity, the Holding Company's earnings growth potential appears to be more favorable than the Peer Group's, and, thus, we concluded that a slight upward adjustment was warranted for this factor.

o RETURN ON EQUITY. The Holding Company's return on equity will be below the comparable averages for the Peer Group and the industry, owing to Brookline

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Bancorp's significantly higher pro forma capital position. In view of the downward pressure that will be placed on the Holding Company's ROE following the conversion, we concluded that a moderate downward adjustment was warranted for the Holding Company's ROE.

Overall, the Holding Company's more favorable reported and core earnings, lower interest rate risk exposure and more favorable earnings growth potential were only partially negated by its expected lower return on equity. Accordingly, RP Financial concluded that a slight upward adjustment was warranted for the Holding Company's profitability, growth and viability of earnings.

3. ASSET GROWTH

Brookline Bancorp's asset growth was lower than Peer Group's during the period covered in our comparative analysis (positive 6.1 percent versus positive 18.4 percent for the Peer Group), largely on the basis of acquisition related growth realized by two of the Peer Group companies. On a pro forma basis, the Holding Company's tangible equity-to-assets ratio will be well above the Peer Group's ratio, indicating a continuance of greater leverage capacity for the Holding Company. The demographic characteristics of the primary market areas served by the Holding and the Peer Group companies do not represent a decisive advantage for either the Holding Company or the Peer Group with respect to supporting retail growth opportunities. Following the conversion and as a fully-converted stock company, the Holding Company will also be better positioned to pursue growth through acquisition. On balance, we believe a slight upward adjustment was warranted for this factor.

4. PRIMARY MARKET AREA

The general condition of an institution's market area has an impact on value, as future success is in part dependent upon opportunities for profitable activities in the local market served. Operating in the Boston metropolitan area, the Holding Company faces significant competition for loans and deposits from larger financial institutions, who provide a broader array of services and have significantly larger branch networks than maintained by the Holding Company. Brookline Bancorp's primary market area for deposits and loans is considered to be

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Middlesex and Norfolk Counties, where all of the Holding Company's branches are located, and surrounding contiguous markets. In conjunction with the national recession, the Boston economy has slowed from the robust pace maintained during the late-1990s and into 2000. However, the downturn in the primary market area economy has been relatively limited compared to the previous recession and the primary market area continues to experience growth in population as well as other demographic measures. Per capita and household income measures indicate that the Holding Company operates in a relatively affluent market area, which is also viewed as a positive in terms of limiting credit risk exposure and supporting growth opportunities.

Overall, the markets served by the Peer Group companies were fairly comparable to the Holding Company's primary market. Several of the Peer Group companies maintain operations in eastern Massachusetts and the majority of the Peer Group companies maintain operations in large metropolitan areas in the Northeastern corridor of the U.S. The size of the markets served with respect to population were similar for the Holding and the Peer Group, with the markets served by the Peer Group's generally experiencing slightly stronger growth than Norfolk County. The Holding Company's primary market area was considered to be more affluent than the markets served by the Peer Group companies, based on Norfolk County's higher per capita income. The median deposit market share maintained by the Peer Group companies was higher than the Holding Company's market share of deposits in Norfolk County, indicating a less favorable competitive position for the Holding Company relative to the majority of the Peer Group companies. Summary demographic and deposit market share data for the Holding Company and the Peer Group companies is provided in Exhibit III-4. As shown in Table 4.1, January 2002 unemployment rates for the markets served by the Peer Group companies generally did not vary significantly from the comparable unemployment rates indicated for Norfolk and Middlesex Counties. On balance, we concluded that no adjustment was appropriate for the Holding Company's market area.

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Table 4.1
Market Area Unemployment Rates

Brookline Bancorp and the Peer Group Companies(1)

                                                                                    JANUARY 2002
                                                   COUNTY                           UNEMPLOYMENT
                                                   ------                           ------------

Brookline Bancorp - MA                             Norfolk                               3.7%
Middlesex                                          4.3

THE PEER GROUP

American Financial Holdings - CT                   Hartford                              4.2%
Bay State Bancorp - MA                             Norfolk                               3.7
Berkshire Hill Bancorp - MA                        Berkshire                             4.8
Connecticut Bancshares - CT                        Hartford                              4.2
First Sentinel Bancorp - NJ                        Middlesex                             4.5
Hudson River Bancorp - NY                          Columbia                              4.0
MassBank Corp. - MA                                Middlesex                             4.3
Port Financial Corp. - MA                          Middlesex                             4.3
Seacoast Financial Services - MA                   Bristol                               6.4
Troy Financial Corp. -NY                           Rensselaer                            5.4

(1) Unemployment rates are not seasonally adjusted.

Source: U.S. Bureau of Labor Statistics.

5. DIVIDENDS

The Holding Company has indicated its intention to pay an annual cash dividend. At this time, the Holding Company has indicated that the annual dividend payment will equal $0.42 per share at the midpoint of the valuation range, which would provide for a yield of 4.2 percent based on the $10.00 per share initial offering price. As set forth in the prospectus, the indicated annual dividend would range from $0.48 per share at the minimum of the valuation range to $0.38 per share at the maximum of the valuation range. However, future declarations of dividends by the Board of Directors will depend upon a number of factors, including investment opportunities, growth objectives, financial condition, profitability, tax considerations, minimum capital requirements, regulatory limitations, stock market characteristics and general economic conditions.

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All ten of the Peer Group companies pay regular cash dividends, with implied dividend yields ranging from 1.27 percent to 2.87 percent. The average dividend yield on the stocks of the Peer Group institutions was 2.03 percent as of March 28, 2002, representing an average core earnings payout ratio of 37.34 percent. As of March 28, 2002, approximately 88 percent of all publicly-traded thrifts (non-MHC institutions) had adopted cash dividend policies (see Exhibit IV-1) exhibiting an average yield of 2.41 percent and an average core earnings payout ratio of 33.17 percent. The dividend paying thrifts generally maintain higher than average profitability ratios, facilitating their ability to pay cash dividends.

The Holding Company's indicated dividend provides for a higher yield than the Peer Group's average dividend yield. Furthermore, based on earnings and capital, the Holding Company's dividend capacity is viewed as greater than the Peer Group's. Most notably, the Holding Company's significantly higher capital position facilitates the ability to maintain a high dividend payout ratio, given the limited need to retain earnings for capital purposes. On balance, we concluded that a slight upward adjustment was warranted for purposes of dividends relative to the Peer Group.

6. LIQUIDITY OF THE SHARES

The Peer Group is by definition composed of companies that are traded in the public markets. Eight of the Peer Group companies trade on the NASDAQ system and two Peer Group companies trade on the AMEX. Typically, the number of shares outstanding and market capitalization provides an indication of how much liquidity there will be in a particular stock. The market capitalization of the Peer Group companies ranged from $69.5 million to $548.5 million as of March 28, 2002, with average and median market values of $292.0 million and $290.9 million, respectively. The shares issued and outstanding to the public shareholders of the Peer Group members ranged from approximately 1.6 million to 30.9 million, with average and median shares outstanding of approximately 13.0 million and 10.7 million, respectively. The Holding Company's pro forma market value and shares outstanding are expected to be in the upper end of the range or above the comparable averages and medians for the Peer Group. It is anticipated that the Holding Company's stock will continue to be quoted on the NASDAQ National Market System. Overall, we anticipate that the Holding Company's stock will have a

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comparable trading market as the Peer Group companies on average and, therefore, concluded no adjustment was necessary for this factor.

7. MARKETING OF THE ISSUE

We believe that four separate markets need to be considered for thrift stocks such as Brookline Bancorp's coming to market: (1) the after-market for public companies, in which trading activity is regular and investment decisions are made based upon financial condition, earnings, capital, ROE, dividends and future prospects; (2) the new issue market in which converting thrifts are evaluated on the basis of the same factors, but on a pro forma basis without the benefit of prior operations as a publicly-held company and stock trading history; (3) the thrift acquisition market for thrift franchises in Massachusetts; and (4) the market for the public stock of Brookline Bancorp. All of these markets were considered in the valuation of the Holding Company's to-be-issued stock.

A. THE PUBLIC MARKET

The value of publicly-traded thrift stocks is easily measurable, and is tracked by most investment houses and related organizations. Exhibit IV-1 provides pricing and financial data on all publicly-traded thrifts. In general, thrift stock values react to market stimuli such as interest rates, inflation, perceived industry health, projected rates of economic growth, regulatory issues and stock market conditions in general. Exhibit IV-2 displays historical stock market trends for various indices and includes historical stock price index values for thrifts and commercial banks. Exhibit IV-3 displays historical stock price indices for thrifts only.

In terms of assessing general stock market conditions, the performance of the overall stock market has been mixed over the past year: The first quarter of 2001 concluded as the worst first quarter ever for the NASDAQ and the worst first quarter for the DJIA in 23 years. On March 30, 2001, the DJIA closed at 9878.78, a decline of 8.4 percent since year end 2000. Comparatively, the NADAQ declined 25.5 percent in the first quarter. Stocks continued to slide in early-April 2001, amid fears that first quarter earnings would contain more bad surprises and generally fall short of reduced expectations. However, favorable earnings reports by Dell

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Computer Corporation and Alcoa served as a catalyst to one of the largest one-day gains in stock market history on April 5, 2001 with the DJIA and NASDAQ posting gains of 4.2 percent and 8.9 percent, respectively. The upward momentum in stocks was sustained into mid-April, as investors gained confidence that the economy would improve in the second half of the year. Stocks moved sharply higher following a surprise inter-meeting rate cut by the Federal Reserve on April 18, 2001. The Federal Reserve cited slowing business investment and falling profits in its decision to lower rates by 50 basis points a month ahead of its regularly scheduled meeting. Following some profit taking on the heels of the rate cut, stocks moved higher at the end of April. Favorable economic data, including stronger than expected GDP growth for the first quarter, served as the basis for the general increase in stocks.

The positive trend in stocks did not extend into May 2001, as concerns over the business outlook generally pulled stocks lower through mid-May. Implementation of a fifth rate cut by the Federal Reserve at its mid-May meeting served to reverse the downward trend in stocks, as NASDAQ posted a six-day winning streak following the rate cut. However, profit taking and second quarter earnings jitters ended the rally in late-May. In early-June, the performance of the broader market was mixed, reflecting uncertainty over the prospects for a recovery in the economy and stronger corporate earnings. Amid more profit warnings and growing concerns about the corporate earnings outlook, stocks moved lower in mid-June. Technology stocks experienced the most significant selling pressure, as evidenced by a seven-day losing streak in the NASDAQ from June 8 through June 18, 2001. Speculation of another rate cut by the Federal Reserve at its late-June meeting provided for a relatively flat market ahead of the policy meeting. Stocks reacted mildly to the 0.25 percent rate cut implemented by the Federal Reserve in late-June and continued to trade in a narrow range to close out the second quarter. Generally weak second quarter earnings and growing uncertainty of an economic recovery in the second half of the year combined to pull stocks lower during most of July.

Weak economic data and more bad earnings news from the technology sector continued to pressure stocks lower during the first half of August 2001. The Federal Reserve's 0.25 percent rate cut at its mid-August meeting did little to lift the sagging stock market, as stocks tumbled sharply on the Federal Reserve's gloomy outlook for the economy. News that consumer confidence declined for the second month in a row in August and second quarter GDP

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growth of 0.2 percent was the slowest growth in eight years served to sharpen the sell-off in late August, reflecting growing pessimism about the chances of a near term economic recovery. The stock market continued to slump in early-September, as the sharp increase in August unemployment sparked a broad-based sell-off.

On September 11, 2001, all major financial markets closed in the wake of the terrorist attack on the World Trade Center and remained closed for the balance of the week. Prior to the resumption of trading on September 17, 2001, the Federal Reserve cut short-term rates by 0.50 percent as an attempt to provide support to the stock market. However, stocks sank sharply in the first day of trading after the terrorist attack, with some of the most significant losses occurring in the airline, travel and insurance stocks. Fears over an extended war on terrorism and further erosion of the nation's weakening economy extended the sell-off through the remainder of the week, as blue chip stocks posted their biggest weekly loss since the Depression. For the week ended September 21, 2001, the DJIA dropped nearly 1,370 points or 14.3 percent. On September 24, 2001, stocks posted their first gains since the terrorist attack, as the DJIA regained approximately 25 percent of the prior week's losses with a one-day increase in the average of 368 points or 4.5 percent. Stocks continued to rebound through the end of September, regaining approximately half of the decline recorded in the first week of trading following the terrorist attack.

The positive trend in the broader stock market generally prevailed through most of October 2001, despite a continuation of bad economic news. Growing confidence about the U.S. military attack in Afghanistan and hopes for a turnaround in the economy were factors that contributed to the stock market recovery. Stocks retreated in late-October, amid uncertainties about the job market and a decline in consumer confidence. Anticipation of another rate cut by the Federal Reserve served to lift stocks in early-November and the rally strengthened following the Federal Reserve's implementation of another half point rate cut at its regularly scheduled meeting in early-November. The favorable trend in the broader stock market continued through most of November, as the DJIA achieved a technical definition of a bull market in the third week of November and closed just shy of 10000 at month's end.

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In early-December 2001, technology stocks surged higher and the DJIA surpassed the 10000 mark, reflecting growing optimism about an economic recovery. However, the stock market rally ended on news of a larger than expected increase in the November unemployment rate. Fresh concerns about the corporate earnings outlook pushed stocks lower in mid-December, despite the Federal Reserve's eleventh interest rate cut of the year. During the second half of December, stocks generally moved higher on year end buying and favorable economic data that showed surprisingly strong new home construction. Notwithstanding the year end rally, the Dow Jones Industrial Average ("DJIA") closed seven percent lower for the year and the NASDAQ Composite Index ("NASDAQ") declined 21 percent in 2001, providing for the worst two-year performance in the stock market in 23 years.

The stock market began 2002 with a New Year rally, as investors bet on a forthcoming economic recovery and an upturn in corporate earnings. The momentum of the advance faded in mid-January, reflecting concerns that the markets were pricing in more of a recovery than the economy was showing. The Federal Reserve's decision to leave interest rates unchanged and indications that the economic downturn may be ending provided for a brief rebound in the broader stock market at the end of January. Stock market activity was mixed throughout most of February, as fears that accounting troubles similar to those impacting Enron could affect more companies weighed against hopes for an economic recovery and improved corporate earnings. The DJIA moved back above 10000 in late-February and sustained upward momentum in early-March, as favorable economic news and the Federal Reserve's cautiously optimistic assessment of the economy served to rally the broader market. Stocks traded in a narrow range in mid-March, reflecting uncertainty over the strength of the economic recovery and the possibility of future rate increases by the Federal Reserve. The Federal Reserve's decision to leave short-term rates unchanged at its mid-March meeting, as well as a shift in its policy directive to a neutral stance from one that favored additional easing, provided for a mixed reaction in the stock market. Stocks moved lower in late-March, reflecting first quarter earnings concerns and the prospect of rising interest rates. As an indication of the general trends in the nation's stock markets over the past year, as of March 28, 2002, the DJIA closed at 10403.94, an increase of 6.2 percent from one year earlier, while the NASDAQ Composite Index stood at

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1845.35, an increase of 1.4 percent over the same time period. The Standard & Poors 500 Index closed at 1147.39 on March 28, 2002, a decline of 0.1 percent from a year ago.

The market for thrift stocks has been mixed during the past twelve months, but, in general, thrift stocks have outperformed the broader market. After following the broader market lower in early-April 2001, thrift stocks recovered slightly in mid-April and generally outperformed bank stocks. The more favorable performance by thrifts was supported by their lower exposure to the downturn in the commercial credit cycle and the more positive effect that the interest rate cuts would have on their net interest margins. While the announced merger between First Union and Wachovia had little impact on the overall market for thrift and bank stocks, financial stocks gained on news of the surprise rate cut by the Federal Reserve in mid-April. The largest gains in the thrift sector tended to be in the large-cap issues. Thrift prices generally stabilized in late-April, as first quarter earnings generally met expectations.

Lower short-term interest rates and a steeper yield curve continued to benefit thrift issues in May 2001, particularly following the 0.50 percent rate cut implemented by the Federal Reserve in mid-May. Thrift issues traded in a narrow range in late-May, as interest rates stabilized. Expectations of further rate cutes by the Federal Reserve and stronger second quarter earnings translated into slightly higher thrift prices in early-June. Consolidation among thrift stocks, including Washington Mutual's proposed $5.2 billion acquisition of Dime Bancorp, extended the rally in thrift issues through mid-June. The widely anticipated rate cut by the Federal Reserve at its late-June meeting had little impact on thrift prices, as thrift prices eased lower at the close of the second quarter on profit taking. Generally favorable second quarter earnings realized from strong lending volumes and expansion of the net interest margin served to boost thrift prices during July, in which the strongest gains were again posted by the large-cap issues.

The positive trend in thrift stocks continued to prevail during the first half of August 2001, reflecting a continuation of the favorable interest rate environment and little threat of inflationary pressures. Thrift stocks reacted mildly to the widely anticipated 0.25 percent rate cut by the Federal Reserve in mid-August, which was followed a decline of more than 5.0 percent in the SNL Index for all publicly-traded thrifts in late-August. The decline in the

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market-cap weighted SNL Index was prompted by news that some of the large publicly-traded thrift lenders were experiencing net interest margin compression. Thrift stocks followed the broader market lower in early-September, reflecting the potential negative implications that a slowdown in consumer spending would have on financial stocks.

In a sharp contrast to the broader market, thrift stocks moved higher on the first day of trading following the terrorist attack. The increase in thrift stocks was attributed to the 0.50 percent rate cut implemented by the Federal Reserve, which provided for a further steepening of the yield curve, and large buyback programs announced by a number of the large-cap thrifts following the Securities and Exchange Commission's decision to waive many of the regulations governing repurchases. However, thrift stocks experienced selling pressure at the end of the week ended September 21, 2001, as investors became wary that the worsening U.S. economy would negatively impact the housing market and related industries as well. Oversold conditions in the thrift sector provided for a positive correction in thrift stocks at the close of September.

Thrift stocks eased lower through mid-October 2001, reflecting expectations that the series of interest rate cuts implemented by the Federal Reserve would be ending soon and the slowing economy would also began to negatively impact residential lenders. The SNL Index dropped sharply in mid-October, as third quarter results for two large-cap issues (Washington Mutual and Golden West Financial) indicated an increase in problem assets. After trading in a narrow range through the balance of October, thrifts stocks rebounded during most of November. Attractive valuations on some of the large-cap issues that had become oversold and another rate cut by the Federal Reserve in early-November were factors that contributed to the recovery in thrift prices. Thrift stocks eased lower at the close of November and traded in a narrow range in early-December, which was largely attributed to profit taking in some of the large-cap issues following their strong November performance. Expectations that earnings would benefit from the additional interest rate cuts implemented by the Federal Reserve during the fourth quarter supported an upward trend in thrift issues during mid- and late-December. For the year ended 2001, the SNL Index for all publicly-traded thrifts posted a gain of 5.0 percent.

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Further gains were registered in thrift stocks at the beginning of 2002, with the strongest performances again turned in by the largest companies. Expectations of strong fourth quarter earnings and growing sentiment of a slow economic recovery that would support a continuation of the steep yield curve were factors that contributed to the advance in thrift stocks. Thrift issues stabilized in mid-January and then moved higher in late-January, as investors were encouraged by fourth quarter earnings. In early-February, concerns about corporate accounting practices spilled over into the financial services sector, which translated into a general decline in bank and thrift stocks, particularly the large-cap issues. After stabilizing in mid-February, thrift issues advanced in late-February and early-March on strong fundamentals and acquisition speculation. Thrift stocks edged lower following the Federal Reserve meeting in March, reflecting growing sentiment that the economic recovery would lead to higher interest rates in the second half of the year. On March 28, 2002, the SNL Index for all publicly-traded thrifts closed at 1006.7, an increase of 15.7 percent from one year ago.

B. THE NEW ISSUE MARKET

In addition to thrift stock market conditions in general, the new issue market for converting thrifts is also an important consideration in determining the Holding Company's pro forma market value. The new issue market is separate and distinct from the market for seasoned stock thrifts in that the pricing ratios for converting issues are computed on a pro forma basis, specifically: (1) the numerator and denominator are both impacted by the conversion offering amount, unlike existing stock issues in which price change affects only the numerator; and (2) the pro forma pricing ratio incorporates assumptions regarding source and use of proceeds, effective tax rates, stock plan purchases, etc. which impact pro forma financials, whereas pricing for existing issues are based on reported financials. The distinction between pricing of converting and existing issues is perhaps no clearer than in the case of the price/tangible book ("P/TB") ratio in that the P/TB ratio of a converting thrift will typically result in a discount to tangible book value whereas in the current market for existing thrifts the P/TB ratio often reflects a premium to tangible book value. Therefore, it is appropriate to also consider the market for new issues, both at the time of the conversion and in the aftermarket.

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The market for converting thrifts has continued to strengthen in recent months. As shown in Table 4.2, four standard conversion offerings have been completed during the past three months. The average pro forma price/tangible book and core price/earnings ratios of the recent standard conversions equaled 59.6 percent and 30.1 times, respectively. No second-step conversion offerings have been completed during the past three months, which are considered to be more relevant for purposes of determining Brookline Bancorp's pro forma pricing. The most recent second step conversion offering was PHSB Financial Corporation of PA ("PHSB"), which completed its offering on December 21, 2001. PHSB's pro forma price/tangible book and core price/earnings ratios at the closing value equaled 67.2 percent and 14.6 times, respectively. In general, second-step conversions tend to be priced (and trade in the aftermarket) at a higher P/TB ratio than standard conversions. We believe investors take into consideration the generally more leveraged pro forma balance sheets of second-step companies, their track records as public companies prior to conversion and their generally higher pro forma ROE measures relative to standard conversions in pricing their common stocks. Exhibit IV-4 presents historical offering data for second-step conversions, illustrating the historical trends and characteristics of second-step offerings.

Shown in Table 4.3 are the current pricing characteristics of PHSB. Of the four recent stand conversions offerings, none were large enough to be listed on NASDAQ or an exchange. PHSB's current P/B ratio of 88.8 percent reflects a discount of 29.8 percent from the average P/B ratio of all publicly-traded thrifts (equal to 126.5 percent) and PHSB's core P/E ratio of 21.65 times reflects a premium of 31.2 percent from the average core P/E ratio of 16.50 times for all publicly-traded thrifts. Accordingly, the current discount reflected in the P/B ratio of PHSB suggests that the investment community has determined to discount its stocks on a book basis until the earning improve through redeployment and leveraging of the proceeds over the longer term or implementation of capital management strategies.

C. THE ACQUISITION MARKET

Also considered in the valuation was the potential impact on Brookline Bancorp's stock price of recently completed and pending acquisitions of other savings institutions operating in Massachusetts. As shown in Exhibit IV-5, there were six Massachusetts thrift acquisitions

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completed between January 1, 2000 through year-to-date 2002, and there are two acquisitions currently pending of Massachusetts savings institutions. The recent acquisition activity involving Massachusetts thrifts may imply a certain degree of acquisition speculation for the Holding Company's stock. However, the Holding Company's significant pro forma capital position following conversion will likely serve as somewhat of an impediment with respect to fostering near term acquisition speculation in the stock. To the extent that acquisition speculation may impact the Holding Company's offering, we have largely taken this into account in selecting companies which operate markets that have experienced a comparable level of acquisition activity as the Holding Company's market and, thus, are subject to the same type of acquisition speculation that may influence Brookline Bancorp's trading price.

D. TRADING IN BROOKLINE BANCORP'S STOCK

Since Brookline Bancorp's minority stock currently trades under the symbol "BRKL" on the NASDAQ National Market System, RP Financial also considered the recent trading activity in the valuation analysis. As of December 31, 2001, Brookline Bancorp had total shares outstanding of 26,747,549, of which 11,327,199 were held by public shareholders and were traded as public securities. As of March 28, 2002, the Holding Company's stock price closed at $17.06 per share. There are significant differences between the Holding Company's minority stock (currently being traded) and the conversion stock that will be issued by the Holding Company. Such differences include different liquidity characteristics (the new conversion stock will be more liquid owing to greater public shares available to trade), a different return on equity for the conversion stock and dividend payments will be made on all shares outstanding; thereby, requiring a higher payout ratio to sustain the current level of dividends paid to non-MHC shareholders. Since the pro forma impact has not been publicly disseminated to date, it is appropriate to discount the current trading level. As the pro forma impact is made known publicly, the trading level will become more informative.

* * * * * * * * * * *

In determining our valuation adjustment for marketing of the issue, we considered trends in the overall thrift market, the new issue market including the new issue market for

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second-step conversions, the acquisition market and recent trading activity in the Holding Company's minority stock. Taking these factors and trends into account, RP Financial concluded that no adjustment was appropriate in the valuation analysis for purposes of marketing of the issue.

8. MANAGEMENT

Brookline Bancorp's management team appears to have experience and expertise in all of the key areas of the Holding Company's operations. Exhibit IV-6 provides summary resumes of Brookline Bancorp's Board of Directors and senior management. The financial characteristics of the Holding Company suggest that it is effectively managed and there appears to be a well-defined organizational structure. The Holding Company currently does not have any executive management positions that are vacant.

Similarly, the returns, capital positions and other operating measures of the Peer Group companies are indicative of well-managed financial institutions, which have Boards and management teams that have been effective in implementing competitive operating strategies. Therefore, on balance, we concluded no valuation adjustment relative to the Peer Group was appropriate for this factor.

9. EFFECT OF GOVERNMENT REGULATION AND REGULATORY REFORM

In summary, as a fully-converted OTS-regulated institution, Brookline Savings and the Holding Company will operate in substantially the same regulatory environment as the Peer Group members -- all of whom are adequately capitalized institutions and are operating with no apparent restrictions. Exhibit IV-7 reflects the Bank's pro forma regulatory capital ratios. On balance, no adjustment has been applied for the effect of government regulation and regulatory reform.

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SUMMARY OF ADJUSTMENTS

Overall, based on the factors discussed above, we concluded that the Holding Company's pro forma market value should reflect the following valuation adjustments relative to the Peer Group:

KEY VALUATION PARAMETERS:                                                 VALUATION ADJUSTMENT
------------------------                                                  --------------------
Financial Condition                                                       Slight Upward
Profitability, Growth and Viability of Earnings                           Slight Upward
Asset Growth                                                              Slight Upward
Primary Market Area                                                       No Adjustment
Dividends                                                                 Slight Upward
Liquidity of the Shares                                                   No Adjustment
Marketing of the Issue                                                    No Adjustment
Management                                                                No Adjustment
Effect of Government Regulations and Regulatory Reform                    No Adjustment

VALUATION APPROACHES

In applying the accepted valuation methodology promulgated by the OTS and adopted by the FDIC, i.e., the pro forma market value approach, including the fully-converted analysis described above, we considered the three key pricing ratios in valuing Brookline Bancorp's to-be-issued stock -- price/earnings ("P/E"), price/book ("P/B"), and price/assets ("P/A") approaches -- all performed on a pro forma basis including the effects of the conversion proceeds. In computing the pro forma impact of the conversion and the related pricing ratios, we have incorporated the valuation parameters disclosed in Brookline Bancorp's prospectus for reinvestment rate, the effective tax rate, offering expenses and stock benefit plan assumptions (summarized in Exhibits IV-8 and IV-9). In our estimate of value, we assessed the relationship of the pro forma pricing ratios relative to the Peer Group and the recent conversions including second-step conversion offerings.

RP Financial's valuation placed an emphasis on the following:

o P/E APPROACH. The P/E approach is generally the best indicator of long-term value for a stock. Given the similarities between the Holding Company's and the Peer Group's earnings composition and overall financial condition, the P/E

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approach was carefully considered in this valuation. At the same time, since reported earnings for both the Holding Company and the Peer Group included certain unusual items, we also made adjustments to earnings to arrive at core earnings estimates for the Holding Company and the Peer Group and resulting price/core earnings ratios.

o P/B APPROACH. P/B ratios have generally served as a useful benchmark in the valuation of thrift stocks, particularly in the context of a public offering, as the earnings approach involves assumptions regarding the use of proceeds. RP Financial considered the P/B approach to be a valuable indicator of pro forma value taking into account the pricing ratios under the P/E and P/A approaches. We have also modified the P/B approach to exclude the impact of intangible assets (i.e., price/tangible book value or "P/TB"), in that the investment community frequently makes this adjustment in its evaluation of this pricing approach.

o P/A APPROACH. P/A ratios are generally a less reliable indicator of market value, as investors typically assign less weight to assets and attribute greater weight to book value and earnings - we have also given less weight to the assets approach. Furthermore, this approach as set forth in the regulatory valuation guidelines does not take into account the amount of stock purchases funded by deposit withdrawals, thus understating the pro forma P/A ratio. At the same time, the P/A ratio is an indicator of franchise value, and, in the case of highly capitalized institutions, high P/A ratios may limit the investment community's willingness to pay market multiples for earnings or book value when ROE is expected to be low.

o TRADING OF BRKL STOCK. Converting institutions generally do not have stock outstanding. Brookline Bancorp, however, has public shares outstanding due to the mutual holding company form of ownership. Since BRKL stock is currently traded on the NASDAQ, it is an indicator of investor interest in the Holding Company's conversion stock and therefore received some weight in our valuation. Based on the March 28, 2002 stock price of $17.06 per share and the 26.7 million shares of Holding Company stock issued and outstanding, the implied value of $457 million was considered in the valuation process. However, since the conversion stock will have different characteristics than the minority shares, and since pro forma information has not been publicly disseminated to date, the current trading price of BRKL was somewhat discounted herein but will become more important towards the closing of the offering.

The Holding Company has adopted Statement of Position ("SOP") 93-6, which cause earnings per share computations to be based on shares issued and outstanding excluding unreleased ESOP and RRP shares. For purposes of preparing the pro forma pricing analyses, we

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have reflected all shares issued in the offering, including all ESOP and RRP shares, to capture the full dilutive impact, particularly since the RRP and ESOP shares are economically dilutive, receive dividends and can be voted. However, we did consider the impact of SOP 93-6 in the valuation.

Based on the application of the three valuation approaches, taking into consideration the valuation adjustments discussed above, RP Financial concluded that, as of March 28, 2002, the aggregate pro forma market value of Brookline Bancorp's conversion stock was $442,643,970 at the midpoint, equal to 44,264,397 shares at $10.00 per share. The midpoint and resulting valuation range is based on the sale of a 57.61 percent ownership interest to the public, which provides for a $255.0 million public offering at the midpoint value.

1. PRICE-TO-EARNINGS ("P/E"). The application of the P/E valuation method requires calculating the Holding Company's pro forma market value by applying a valuation P/E multiple to the pro forma earnings base. In applying this technique, we considered both reported earnings and a recurring earnings base, that is, earnings adjusted to exclude any one-time non-operating items, plus the estimated after-tax earnings benefit of the reinvestment of the net proceeds. The Holding Company's reported earnings, incorporating the reinvestment of $8.529 million of MHC assets at an after-tax reinvestment rate of 3.05 percent, equaled $19.594 million for the twelve months ended December 31, 2001. In deriving Brookline Bancorp's core earnings, the adjustments made to reported earnings were to eliminate net gains on the sale of securities, the gain from the termination of the pension plan and the restructuring charge related to the merger of Lighthouse into the Bank. The net gains on securities and the gain from the termination plan equaled $3.5 million and $3.7 million, respectively, while the restructuring charge equaled $3.9 million. As shown below, on a tax effected basis, assuming an effective marginal tax rate of 36.0 percent, the Holding Company's core earnings were determined to equal $17.5 million for the twelve months ended December 31, 2001. (Note: see Exhibit IV-10 for the adjustments applied to the Peer Group's earnings in the calculation of core earnings).

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                                                                                     AMOUNT
                                                                                     ------
                                                                                     ($000)

Net income                                                                           $19,594
Net gains on sale of securities(1)                                                    (2,266)
Gain from termination of pension plan(1)                                              (2,347)
Restructuring charge(1)                                                                2,513
                                                                                     -------
Core earnings estimate                                                               $17,494

(1) Tax effected at 36.0 percent.

Based on the Holding Company's reported and estimated core earnings, and incorporating the impact of the pro forma assumptions discussed previously, the Holding Company's pro forma reported and core P/E multiples at the $442.6 million midpoint value equaled 17.26 times and 18.80 times, respectively, which provided for a discount of 5.0 percent and a premium of 2.6 percent relative to the Peer Group's average reported and core earnings multiples of 18.16 times and 18.33 times, respectively (see Table 4.4). The implied premiums reflected in the Holding Company's pro forma P/E multiples take into consideration the valuation adjustments and the discount implied for the Holding Company's pro forma P/B ratio.

2. PRICE-TO-BOOK ("P/B"). The application of the P/B valuation method requires calculating the Holding Company's pro forma market value by applying a valuation P/B ratio to Brookline Bancorp's pro forma book value. The Holding Company's pre-conversion book value was adjusted to include $8.5 million of equity held at the MHC level, which will be consolidated with the Holding Company's capital as a result of the conversion. Based on the $442.6 million midpoint valuation, Brookline Bancorp's pro forma P/B and P/TB ratios both equaled 82.72 percent. In comparison to the average P/B and P/TB ratios for the Peer Group of 143.71 percent and 156.67 percent, the Holding Company's ratios reflected a discount of 42.4 percent on a P/B basis and a discount of 47.2 percent on a P/TB basis. RP Financial considered the discounts under the P/B approach to be reasonable in light of the resulting premium core P/E multiple and the Holding Company's significant level of pro forma capital that, in effect, constrains the ability to increases the P/B ratio without significantly depressing ROE and increasing the implied core P/E multiple premium above what would be considered reasonable from a valuation perspective.

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3. PRICE-TO-ASSETS ("P/A"). The P/A valuation methodology determines market value by applying a valuation P/A ratio to the Holding Company's pro forma asset base, conservatively assuming no deposit withdrawals are made to fund stock purchases. In all likelihood there will be deposit withdrawals, which results in understating the pro forma P/A ratio which is computed herein. At the midpoint of the valuation range, Brookline Bancorp's value equaled 32.81 percent of pro forma assets. Comparatively, the Peer Group companies exhibited an average P/A ratio of 17.65 percent, which implies a premium of 85.9 percent for the Holding Company's pro forma P/A ratio.

COMPARISON TO RECENT CONVERSIONS AND SECOND-STEP OFFERINGS

As indicated at the beginning of this chapter, RP Financial's analysis of recent standard conversion and second-step offering pricing characteristics at closing and in the aftermarket has been limited to a "technical" analysis and, thus, the pricing characteristics of recent standard conversions and second-step offerings are not the primary determinate of value herein. Particular focus was placed on the P/TB approach in this analysis, since the P/E multiples do not reflect the actual impact of reinvestment and the source of the stock proceeds (i.e., external funds vs. deposit withdrawals). The recent standard conversion closed at a price/tangible book ratio of 59.6 percent (see Table 4.2). The price of the recent standard conversion appreciated by 22.0 percent during the first week of trading.

PHSB's second-step conversion offering, which was completed on December 21, 2001, closed at a price/tangible book ratio of 67.2 percent. PHSB's stock price increased 20.0 percent during the first week of trading. The Holding Company's P/TB ratio at the appraised midpoint value reflects a premium of 23.1 percent relative to PHSB's closing P/TB ratio. In comparison to PHSB's current aftermarket P/TB ratio of 88.8 percent, the Holding Company's P/TB ratio at the appraised midpoint value reflects a discount of 6.9 percent.

VALUATION CONCLUSION

Based on the foregoing, it is our opinion that, as of March 28, 2002, the estimated aggregate pro forma market value of the Holding Company, inclusive of the sale of the MHC's

RP FINANCIAL, LC.
PAGE 4.26

ownership interest to the public shareholders was $442,643,970 at the midpoint. Based on this valuation and the approximate 57.61 ownership interest being sold in the public offering, the midpoint value of the Holding Company's stock offering was $255,000,000, equal to 25,500,000 shares at a per share value of $10.00. Pursuant to conversion guidelines, the 15 percent offering range indicates a minimum value of $216,750,000 and a maximum value of $293,250,000. Based on the $10.00 per share offering price, this valuation range equates to an offering of 21,675,000 shares at the minimum and 29,325,000 shares at the maximum. In the event the appraised value is subject to an increase, the offering range may be increased up to a supermaximum value of $337,237,500 without requiring a resolicitation. Based on the $10.00 per share offering price, the supermaximum value would result in total shares outstanding of 33,723,750. The pro forma valuation calculations relative to the Peer Group are shown in Table 4.4 and are detailed in Exhibit IV-8 and Exhibit IV-9.

ESTABLISHMENT OF THE EXCHANGE RATIO

OTS regulations provide that in a conversion of a mutual holding company, the minority stockholders are entitled to exchange their shares of the Holding Company's common stock for newly issued shares of Brookline Bancorp stock as a fully converted company. The Board of Directors of Brookline Bancorp MHC has independently established a formula to determine the exchange ratio. The formula has been designed to preserve the current aggregate percentage ownership in Brookline Bancorp equal to 42.39 percent as of December 31, 2001. Pursuant to this formula, the exchange ratio to be received by the existing minority shareholders of Brookline Bancorp will be determined at the end of the offering based on the total number of shares sold in the Subscription and Direct Community offerings. As shown in Table 4.4, the exchange ratio for the minority shareholders would be 1.4056 shares, 1.6537 shares, 1.9017 shares and 2.1870 shares at the minimum, midpoint, maximum and supermaximum of the offering range, respectively. RP Financial expresses no opinion on the proposed exchange of newly issued Holding Company shares for the shares held by the minority stockholders or on the proposed exchange ratio.

FIRM QUALIFICATION STATEMENT

RP Financial provides financial and management consulting and valuation services to the financial services industry nationwide, particularly federally-insured financial institutions. RP Financial establishes long-term client relationships through its wide array of services, emphasis on quality and timeliness, hands-on involvement by our principals and senior consulting staff, and careful structuring of strategic plans and transactions. RP Financial's staff draws from backgrounds in consulting, regulatory agencies and investment banking, thereby providing our clients with considerable resources.

STRATEGIC AND CAPITAL PLANNING

RP Financial's strategic and capital planning services are designed to provide effective workable plans with quantifiable results. Through a program known as SAFE (Strategic Alternatives Financial Evaluations), RP Financial analyzes strategic options to enhance shareholder value or other established objectives. Our planning services involve conducting situation analyses; establishing mission statements, strategic goals and objectives; and identifying strategies for enhancement of franchise value, capital management and planning, earnings improvement and operational issues. Strategy development typically includes the following areas: capital formation and management, asset/liability targets, profitability, return on equity and market value of stock. Our proprietary financial simulation model provides the basis for evaluating the financial impact of alternative strategies and assessing the feasibility/compatibility of such strategies with regulations and/or other guidelines.

MERGER AND ACQUISITION SERVICES

RP Financial's merger and acquisition (M&A) services include targeting candidates and potential acquirors, assessing acquisition merit, conducting detailed due diligence, negotiating and structuring transactions, preparing merger business plans and financial simulations, rendering fairness opinions and assisting in implementing post-acquisition strategies. Through our financial simulations, comprehensive in-house data bases, valuation expertise and regulatory knowledge, RP Financial's M&A consulting focuses on structuring transactions to enhance shareholder returns.

VALUATION SERVICES

RP Financial's extensive valuation practice includes valuations for a variety of purposes including mergers and acquisitions, mutual-to-stock conversions, ESOPs, subsidiary companies, mark-to-market transactions, loan and servicing portfolios, non-traded securities, core deposits, FAS 107 (fair market value disclosure), FAS 122 (loan servicing rights) and FAS 123 (stock options). Our principals and staff are highly experienced in performing valuation appraisals which conform with regulatory guidelines and appraisal industry standards. RP Financial is the nation's leading valuation firm for mutual-to-stock conversions of thrift institutions.

OTHER CONSULTING SERVICES AND DATA BASES

RP Financial offers a variety of other services including branching strategies, feasibility studies and special research studies, which are complemented by our quantitative and computer skills. RP Financial's consulting services are aided by its in-house data base resources for commercial banks and savings institutions and proprietary valuation and financial simulation models.

RP Financial's Key Personnel (Years of Relevant Experience)

Ronald S. Riggins, Managing Director (21) William E. Pommerening, Managing Director (17) Gregory E. Dunn, Senior Vice President (19) James P. Hennessey, Senior Vice President (16) James J. Oren, Senior Vice President (14)

RP FINANCIAL, LC.
Financial Services Industry Consultants

Exhibit 99.5

March 4, 2002

Mr. Richard P. Chapman, Jr.
President and Chief Executive Officer
Brookline Bancorp, Inc., subsidiary of
Brookline Bancorp, MHC
160 Washington Street
Brookline, Massachusetts 02447

Dear Mr. Chapman:

This letter sets forth the agreement between Brookline Bancorp, Inc. ("Brookline" or the "Company"), subsidiary of Brookline Bancorp, MHC, Brookline, Massachusetts (the "MHC"), and RP Financial, LC. ("RP Financial"), whereby the Company has engaged RP Financial to prepare the written document and financial projections reflecting the pro forma impact of the mutual to stock conversion of the MHC and the post-conversion activities of the Company. These services are described in greater detail below.

DESCRIPTION OF PROPOSED SERVICES

RP Financial's business planning services will include the following areas:
(1) determining the Company's current financial and operating condition, business strategies and anticipated future strategies, both currently and on a pro forma basis; (2) quantifying the impact of business strategies, incorporating the use of offering proceeds; (3) preparing detailed financial projections on a quarterly basis for a period of at least three fiscal years to reflect the impact of selected business strategies and the use of offering proceeds; (4) preparing the written business plan document which conforms with applicable regulatory guidelines, including a description of the use of offering proceeds and how the convenience and needs of the community will be addressed; and (5) preparing the detailed schedules of the capitalization and inter-company cash flows.

Contents of the business plan will include: Philosophy/Goals; Economic Environment and Background; Lending, Leasing and Investment Activities; Deposit, Savings and Borrowing Activity; Asset and Liability Management; Operations; Records, Systems and Controls; Growth, Profitability and Capital; Responsibility for Monitoring this Plan.

RP Financial agrees to prepare the business plan and accompanying financial projections in writing such that the business plan conforming to regulatory guidelines can be filed with the appropriate federal and state regulatory agencies in conjunction with the filing of the stock offering application.

WASHINGTON HEADQUARTERS

Rosslyn Center                                         Telephone (703) 528-1700
1700 North Moore Street, Suite 2210                     Fax No.: (703) 528-1788
Arlington, VA 22209                               Toll-Free No.: (866) 723-0594
www.rpfinancial.com                        E-Mail: wpommerening@rpfinancial.com

MR. RICHARD P. CHAPMAN, JR.
MARCH 4, 2002

PAGE 2

FEE STRUCTURE AND PAYMENT SCHEDULE

The Company agrees to compensate RP Financial for preparation of the business plan on a fixed fee basis of $18,000. Payment of the professional fees shall be made upon delivery of the completed business plan. The Company also agrees to reimburse RP Financial for those direct reasonable out-of-pocket expenses necessary and incidental to providing the business planning services. Reimbursable expenses will likely include shipping, telephone/facsimile printing, computer and data services, and shall be paid to RP Financial as incurred and billed. RP Financial will agree to limit reimbursable expenses in conjunction with the business planning and appraisal engagements to $7,500, subject to written authorization from the Company to exceed such level.

In the event the Company shall, for any reason, discontinue this planning engagement prior to delivery of the completed business plan and payment of the progress payment fee, the Company agrees to compensate RP Financial according to RP Financial's standard billing rates for consulting services based on accumulated and verifiable time expenses, not to exceed the fixed fee described above, plus reimbursable expenses incurred.

If during the course of the planning engagement, unforeseen events occur so as to materially change the nature or the work content of the business planning services described in this contract, the terms of said contract shall be subject to renegotiation by the Company and RP Financial. Such unforeseen events may include changes in regulatory requirements as it specifically relates to the Company.

INDEMNIFICATIONS

The provisions of paragraph 3 in that certain letter agreement dated March 4, 2002 between the Company and RP Financial are incorporated herein by reference.

Please acknowledge your agreement to the foregoing by signing as indicated below and returning to RP Financial a signed copy of this letter.

Sincerely,

                                       /s/ William E. Pommerening
                                       ---------------------------
                                       William E. Pommerening
                                       Chief Executive Officer and
                                       Managing Director


Agreed To and Accepted By: Richard P. Chapman, Jr. /s/ Richard P. Chapman, Jr.
                                                   ------------------------
                           President and Chief Executive Officer

Upon Authorization by the Board of Directors For: Brookline Bancorp, Inc. Subsidiary of Brookline Bancorp, M.H.C. Brookline, Massachusetts

Date Executed: March 5, 2002

Exhibit 99.6

BROOKLINE BANCORP, INC.
160 WASHINGTON STREET
BROOKLINE, MASSACHUSETTS 02445
(617) 730-3510

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON __________, 2002

Notice is hereby given that the Special Meeting of Stockholders ("Meeting") of Brookline Bancorp, Inc. (the "Company") will be held at ____________________, at __:__ _.m., Boston Time, on ___________, 2002. As of the date hereof, the Company owns 100% of the common stock of Brookline Savings Bank (the "Bank") and is majority-owned by Brookline Bancorp, MHC (the "Mutual Holding Company").

A Proxy Statement and Proxy Card for the Meeting are enclosed.

The Meeting is for the purpose of considering and acting upon:

1. A plan of conversion and reorganization (the "Plan") pursuant to which the Mutual Holding Company will be merged into the Bank, and the Company will be succeeded by a new Delaware corporation with the same name as the Company which has been established for the purpose of completing the conversion. As part of the conversion, shares of common stock representing the Mutual Holding Company's ownership interest in the Company will be offered for sale in a subscription and community offering. Common stock of the Company currently held by stockholders will be converted into new shares pursuant to an exchange ratio that will insure that stockholders at the time of the conversion will own the same percentage of Brookline Bancorp, Inc. after the conversion as was held immediately prior thereto, exclusive of any shares purchased by the stockholder in the offering and cash received in lieu of fractional shares;

and such other matters as may properly come before the Meeting, or any adjournments thereof. The Board of Directors is not aware of any other business to come before the Meeting.

Any action may be taken on the foregoing proposal at the Meeting on the date specified above, or on any date or dates to which by original or later adjournment the Meeting may be adjourned. Stockholders of record at the close of business on _____________, 2002 are the stockholders entitled to vote at the Meeting, and any adjournments thereof.

EACH STOCKHOLDER, WHETHER HE OR SHE PLANS TO ATTEND THE MEETING, IS REQUESTED TO SIGN, DATE, AND RETURN THE ENCLOSED PROXY CARD WITHOUT DELAY IN THE ENCLOSED POSTAGE-PAID ENVELOPE. ANY PROXY GIVEN BY THE STOCKHOLDER MAY BE REVOKED AT ANY TIME BEFORE IT IS EXERCISED. A PROXY MAY BE REVOKED BY FILING WITH THE SECRETARY OF THE COMPANY A WRITTEN REVOCATION OR A DULY EXECUTED PROXY BEARING A LATER DATE. ANY STOCKHOLDER PRESENT AT THE MEETING MAY REVOKE HIS OR HER PROXY AND VOTE PERSONALLY ON EACH MATTER BROUGHT BEFORE THE MEETING. HOWEVER, IF YOU ARE A STOCKHOLDER WHOSE SHARES ARE NOT REGISTERED IN YOUR OWN NAME, YOU WILL NEED ADDITIONAL DOCUMENTATION FROM YOUR RECORD HOLDER IN ORDER TO VOTE PERSONALLY AT THE MEETING.

By Order of the Board of Directors

George C. Caner, Jr.
Corporate Secretary

Brookline, Massachusetts
____________, 2002

IMPORTANT: A SELF-ADDRESSED ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE.
NO POSTAGE IS REQUIRED IF MAILED WITHIN THE UNITED STATES.

QUESTIONS AND ANSWERS FOR STOCKHOLDERS OF
BROOKLINE BANCORP, INC.

Q. WHAT ARE STOCKHOLDERS BEING ASKED TO APPROVE?

A. Brookline Bancorp, Inc. stockholders as of _____________, 2002 are asked to vote on the plan of conversion and reorganization. Pursuant to the plan, Brookline Bancorp, MHC will convert from the mutual holding company form to the fully public form of corporate structure (the "Conversion") and as part of the Conversion, we will offer for sale Brookline Bancorp, MHC's ownership interest in Brookline Bancorp, Inc.

Q. WHAT ARE REASONS FOR THE MUTUAL-TO-STOCK CONVERSION AND RELATED OFFERING?

A. The primary reasons for the conversion are to facilitate acquisitions of other financial institutions, support internal growth, improve our overall competitive position and enhance profitability. The additional capital raised in the conversion will also support increased lending, expansion of our retail banking franchise, and introduction of new products and services.

Q. WHAT WILL STOCKHOLDERS RECEIVE FOR THEIR EXISTING BROOKLINE BANCORP, INC. SHARES?

A. As more fully described in the Prospectus section entitled "The Conversion," depending on the number of shares sold in the offering, each share of common stock that you own upon completion of the Conversion will be exchanged for between ________ new shares at the minimum and ________new shares at the maximum (though cash will be paid in lieu of fractional shares).

Q. WHY WILL THE SHARES THAT I RECEIVE BE BASED ON A PRICE OF $10.00 PER SHARE RATHER THAN THE TRADING PRICE OF THE COMMON STOCK PRIOR TO THE CONVERSION?

A. The Board of Directors of Brookline Bancorp, Inc. selected a price of $10.00 per share for the stock offered for sale because it is a commonly selected per share price for mutual-to-stock conversions. The number of new shares you receive for your existing Brookline Bancorp, Inc. shares does not depend on the market price of Brookline Bancorp, Inc. common stock. It will depend on the number of shares sold in the offering, which will in turn depend on the final independent appraisal of the pro forma market value of Brookline Bancorp, Inc., assuming completion of the Conversion and offering. The result will be that each existing stockholder will own the same percentage of Brookline Bancorp, Inc. after the Conversion as was held just prior thereto, exclusive of (i) any shares purchased by the stockholder in the offering and (ii) cash received in lieu of fractional shares.

Q. SHOULD I SUBMIT MY STOCK CERTIFICATES NOW?

A. No. If you hold your certificate(s), instructions for exchanging the shares will be sent to you AFTER completion of the Conversion. If your shares are held in "street name," rather than in certificate form, the share exchange will occur automatically upon completion of the Conversion.

Q. WILL MY DIVIDENDS DECREASE?

A. No. Brookline Bancorp, Inc. currently pays a quarterly dividend of $.16 per share (or $.64 per share annualized). The number of new stock shares that will be issued to you will be different from the number that you currently own. However, the per share dividend for these new shares will be adjusted to ensure that your aggregate dividends do not decrease. For example, if 1.6537 new shares are issued for each Brookline Bancorp, Inc. share owned at the conclusion of the Conversion, the quarterly dividend per share will be $.105. Of course, there is no assurance that the Board of Directors will not change the dividend policy in the future or eliminate dividends.

Q. IF MY SHARES ARE HELD IN STREET NAME, WILL MY BROKER AUTOMATICALLY VOTE ON MY BEHALF?

A. No. Your broker will not be able to vote your shares without instructions from you. You should instruct your broker to vote your shares, using the directions that your broker provides to you.

Q. WHAT IF I DO NOT GIVE VOTING INSTRUCTIONS TO MY BROKER?

A. Your vote is important. If you do not instruct your broker to vote your shares, the unvoted proxy will have THE SAME EFFECT AS A VOTE AGAINST the plan of conversion.

Q. MAY I PLACE AN ORDER TO PURCHASE SHARES IN THE OFFERING, IN ADDITION TO THE SHARES THAT I WILL RECEIVE IN THE EXCHANGE?

A. Yes. Eligible Brookline Savings Bank depositors have priority subscription rights allowing them to purchase common stock in the subscription offering, because the offering is part of the Conversion. Shares not purchased in the subscription offering may be available for sale to the public in a community offering, as fully described in the Prospectus. Brookline Bancorp, Inc. stockholders as of _____________, 2002 have a preference in the community offering. IF YOU HOLD YOUR STOCK CERTIFICATE(S), YOU WERE MAILED A STOCK ORDER FORM AND ORDER REPLY ENVELOPE WITH THIS DOCUMENT. IF YOU HOLD YOUR SHARES IN STREET NAME WITH A BROKER, YOU MUST CALL THE STOCK INFORMATION CENTER IF YOU WOULD LIKE TO RECEIVE A STOCK ORDER FORM. THE TELEPHONE NUMBER IS (___) ___-____.