• Net Income: $20.7 million on a core operating basis; $17.5 million on a GAAP basis including merger charges.
• Earnings Per Share (EPS): $0.23 on a core operating basis; $0.20 on a GAAP basis.
• Loan Growth: $24 million increase in loans.
• Customer Deposits: Increased by $116 million.
• Net Interest Margin: Improved by 5 basis points to 312 basis points.
• Total Assets Growth: $228 million increase from September.
• Net Interest Income: $85 million, an increase of $2 million from Q3.
• Noninterest Income: $6.5 million, up from $6.3 million in the prior quarter.
• Operating Expenses: $60.3 million for the quarter.
• Provision for Credit Losses: $4 million, a decrease of $700,000 from Q3.
• Dividend: Quarterly dividend maintained at $0.135 per share.

• Warning! GuruFocus has detected 7 Warning Signs with BRKL.

Release Date: January 30, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Brookline Bancorp Inc (NASDAQ:BRKL) reported a slight improvement in core operating performance with net income of $20.7 million and operating earnings per share of $0.23.
• Customer deposits increased by $116 million, contributing to a 5 basis point increase in net interest margin.
• The planned merger with Berkshire Hills Bancorp is expected to create a $24 billion financial institution with complementary market footprints and significant economies of scale.
• Total assets grew by $228 million from September, driven by growth in securities and cash equivalents.
• The company maintained its quarterly dividend at $0.135 per share, yielding approximately 4.5% annually.

Negative Points

• Net income on a GAAP basis was lower at $17.5 million due to merger charges of $3.4 million.
• The weighted average coupon on the core loan portfolio declined by 11 basis points during the quarter.
• Operating expenses increased to $60.3 million, driven by additional incentive and commission-related expenses.
• The provision for credit losses was $4 million, although this was a decrease from the previous quarter.
• A $5.1 million charge-off was recorded in the equipment finance sector, specifically related to an industrial laundry loan.

Q & A Highlights

Q: Have you been able to determine the timeline for regulatory approvals for the merger with Berkshire Hills? A: We have been in contact with regulators but do not have a definitive timeline yet. We anticipate using year-end numbers for filings, which may expedite the process. We are hopeful for a faster approval than initially expected in Q3. - Paul Perrault, CEO

Q: Can you provide details on the $5.1 million charge-off in equipment finance? Was it related to the specialty vehicle sector? A: The charge-off was related to an industrial laundry customer, not the specialty vehicle sector. It was specifically reserved for and not a type of loan we typically engage in. - Carl Carlson, CFO

Q: Why haven't you reduced deposit rates faster, given that many peers have done so? A: Our deposit price setters have been reasonably aggressive, but we are cautious about maintaining funding. We aim to hold the loan-to-deposit ratio at or below current levels. - Paul Perrault, CEO

Q: How do you anticipate margin expansion in the upcoming quarter and throughout the year? A: We expect margin improvement as liabilities reprice following recent Fed moves. However, the exact pace of margin expansion is uncertain due to potential future Fed actions. - Carl Carlson, CFO

Q: What is the reserve on your office loan book, and how many office nonperformers do you have? A: The general reserve on the office loan book is 2.23%. Currently, there are only two nonperforming office loans, with one being relatively small. - Carl Carlson, CFO

For the complete transcript of the earnings call, please refer to the full earnings call transcript.