Core Viewpoint - Berkshire Hills Bancorp and Brookline Bancorp have received all necessary regulatory approvals to proceed with their merger, which will create a new entity named Beacon Financial Corporation, effective September 1, 2025 [1][2][3]. Group 1: Merger Details - The merger will result in a combined company valued at $24 billion, with over 145 branch offices serving the Northeast region [2]. - The regulatory approvals were granted by multiple authorities, including the Federal Reserve System and state banking departments [3]. - Shareholders of both companies approved the merger proposals during meetings held on May 21, 2025 [3]. Group 2: Leadership and Integration - Paul A. Perrault, CEO of Brookline, will lead the combined company as CEO, while David M. Brunelle of Berkshire will serve as Chairperson of the Board [4][5]. - The integration process is expected to be smooth, with both organizations having collaborated extensively in preparation for the merger [4]. Group 3: Brand Transition - Following the merger, the new entity will operate under the name Beacon Financial Corporation, with shares trading on the NYSE under the symbol "BBT" [5]. - Clients will continue to access services through their existing bank branches until a full transition to the Beacon Bank brand is completed, anticipated in the first quarter of 2026 [5][6].

[Glossary of Acronyms and Terms](index=4&type=section&id=Glossary%20of%20Acronyms%20and%20Terms) This section provides definitions for key acronyms and terms used throughout the report [Part I Financial Information](index=5&type=section&id=Part%20I%20Financial%20Information) This part presents the company's unaudited consolidated financial statements and management's discussion [Item 1. Unaudited Consolidated Financial Statements](index=5&type=section&id=Item%201.%20Unaudited%20Consolidated%20Financial%20Statements) This section presents the unaudited consolidated financial statements, including balance sheets, income statements, comprehensive income, changes in equity, and cash flows, along with detailed notes on accounting policies, investment securities, loans, credit losses, intangible assets, derivatives, stock compensation, fair value measurements, commitments, and revenue recognition [Unaudited Consolidated Balance Sheets](index=5&type=section&id=Unaudited%20Consolidated%20Balance%20Sheets) This section presents the company's financial position, detailing assets, liabilities, and equity at specific dates | Metric | June 30, 2025 (In Thousands) | December 31, 2024 (In Thousands) | | :----------------------------- | :----------------------------- | :----------------------------- | | Total Assets | $11,568,745 | $11,905,326 | | Total Loans and Leases | $9,582,374 | $9,779,288 | | Total Deposits | $8,961,202 | $8,901,644 | | Total Liabilities | $10,314,574 | $10,683,387 | | Total Stockholders' Equity | $1,254,171 | $1,221,939 | [Unaudited Consolidated Statements of Income](index=7&type=section&id=Unaudited%20Consolidated%20Statements%20of%20Income) This section details the company's revenues, expenses, and net income over specific reporting periods | Metric | Three Months Ended June 30, 2025 (In Thousands) | Three Months Ended June 30, 2024 (In Thousands) | Six Months Ended June 30, 2025 (In Thousands) | Six Months Ended June 30, 2024 (In Thousands) | | :-------------------------------- | :---------------------------------------------- | :---------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Net Interest Income | $88,685 | $80,001 | $174,515 | $161,589 | | Provision for Credit Losses | $7,000 | $5,568 | $12,986 | $12,947 | | Non-Interest Income | $5,970 | $6,396 | $11,630 | $12,680 | | Non-Interest Expense | $58,061 | $59,184 | $118,083 | $120,198 | | Net Income | $22,026 | $16,372 | $41,126 | $31,037 | | Basic EPS | $0.25 | $0.18 | $0.46 | $0.35 | | Diluted EPS | $0.25 | $0.18 | $0.46 | $0.35 | [Unaudited Consolidated Statements of Comprehensive Income](index=8&type=section&id=Unaudited%20Consolidated%20Statements%20of%20Comprehensive%20Income) This section reports net income and other comprehensive income items, reflecting equity changes not from net income | Metric | Three Months Ended June 30, 2025 (In Thousands) | Three Months Ended June 30, 2024 (In Thousands) | Six Months Ended June 30, 2025 (In Thousands) | Six Months Ended June 30, 2024 (In Thousands) | | :-------------------------------------------------------------------------------- | :---------------------------------------------- | :---------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Net Income | $22,026 | $16,372 | $41,126 | $31,037 | | Net unrealized securities holding gains (losses) before reclassification, net of taxes | $4,327 | $(910) | $14,064 | $(7,187) | | Net change in fair value of cash flow hedges, net of taxes | $(157) | $(759) | $(2,115) | $(3,340) | | Net adjustment of accumulated obligation for postretirement benefits | $(1,447) | — | $(1,447) | — | | Other comprehensive gain (loss), net of taxes | $3,120 | $(852) | $13,504 | $(8,895) | | Comprehensive Income | $25,146 | $15,520 | $54,630 | $22,142 | [Unaudited Consolidated Statements of Changes in Stockholders' Equity](index=10&type=section&id=Unaudited%20Consolidated%20Statements%20of%20Changes%20in%20Equity) This section outlines the changes in the components of stockholders' equity over the reported periods | Metric | June 30, 2025 (In Thousands) | December 31, 2024 (In Thousands) | | :-------------------------------- | :----------------------------- | :----------------------------- | | Total Stockholders' Equity | $1,254,171 | $1,221,939 | | Net Income (Six Months) | $41,126 | N/A | | Other Comprehensive Income (Loss) (Six Months) | $13,504 | N/A | | Common Stock Dividends (Six Months) | $(24,058) | N/A | [Unaudited Consolidated Statements of Cash Flows](index=13&type=section&id=Unaudited%20Consolidated%20Statements%20of%20Cash%20Flows) This section summarizes the cash inflows and outflows from operating, investing, and financing activities | Cash Flow Activity | Six Months Ended June 30, 2025 (In Thousands) | Six Months Ended June 30, 2024 (In Thousands) | | :-------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Net cash provided from operating activities | $41,631 | $37,106 | | Net cash provided from (used for) investing activities | $251,621 | $(43,877) | | Net cash (used for) provided from financing activities | $(330,174) | $216,828 | | Net (decrease) increase in cash and cash equivalents | $(36,922) | $210,057 | | Cash and cash equivalents at end of period | $506,748 | $343,084 | [Notes to Unaudited Consolidated Financial Statements](index=15&type=section&id=Notes%20to%20Unaudited%20Consolidated%20Financial%20Statements) These notes provide detailed information supporting the unaudited consolidated financial statements, covering the company's business operations, significant accounting policies, recent accounting pronouncements, and specific breakdowns of investment securities, loans, credit loss allowances, intangible assets, comprehensive income, derivatives, stock compensation, fair value measurements, commitments, and revenue recognition practices [(1) Basis of Presentation](index=15&type=section&id=(1)%20Basis%20of%20Presentation) This note describes the company's business operations and the basis for preparing consolidated financial statements - The Company operates as a bank holding company for Brookline Bank, BankRI, PCSB Bank, and Clarendon Private, providing commercial, business, and retail banking services, along with wealth management[26](index=26&type=chunk)[28](index=28&type=chunk) - The Company operates as a single business segment, with the Chairman and Chief Executive Officer acting as the Chief Operating Decision Maker (CODM)[39](index=39&type=chunk)[40](index=40&type=chunk) [(2) Recent Accounting Pronouncements](index=16&type=section&id=(2)%20Recent%20Accounting%20Pronouncements) This note discusses recently adopted and pending accounting standards and their potential impact - The Company adopted **ASU 2023-07** (Segment Reporting) on January 1, 2024, with no material impact on its consolidated financial statements[42](index=42&type=chunk) - The Company is currently determining the impact of **ASU 2023-09** (Income Tax Disclosures), which is effective for annual periods beginning after December 15, 2024[247](index=247&type=chunk) [(3) Investment Securities](index=17&type=section&id=(3)%20Investment%20Securities) This note details the company's investment securities portfolio and related accounting policies | Metric | June 30, 2025 (In Thousands) | December 31, 2024 (In Thousands) | | :-------------------------------- | :----------------------------- | :----------------------------- | | Fair Value of AFS Securities | $866,684 | $895,034 | | Net Unrealized Losses | $51,215 | $69,355 | | Pledged Investment Securities | $769,000 | $792,000 | - The Company did not classify any securities as held to maturity; all securities were held as available-for-sale[46](index=46&type=chunk) - Management determined that investment securities are not impaired as of June 30, 2025, due to the Company's ability and intent to hold them until recovery, supported by strong capital and liquidity positions[56](index=56&type=chunk) [(4) Loans and Leases](index=22&type=section&id=(4)%20Loans%20and%20Leases) This note details the composition of the company's loan and lease portfolio, including types and characteristics | Metric | June 30, 2025 (In Thousands) | December 31, 2024 (In Thousands) | | :----------------------------- | :----------------------------- | :----------------------------- | | Total Loans and Leases | $9,582,374 | $9,779,288 | | Weighted Average Coupon Rate | 5.94% | 5.91% | | Loans and Leases Pledged as Collateral | $3,800,000 | $3,600,000 | [(5) Allowance for Credit Losses](index=23&type=section&id=(5)%20Allowance%20for%20Credit%20Losses) This note explains the methodology and balances for the allowance for credit losses on loans and leases | Metric | June 30, 2025 (In Thousands) | December 31, 2024 (In Thousands) | | :-------------------------------- | :----------------------------- | :----------------------------- | | Allowance for Loan and Lease Losses | $126,725 | $125,083 | | Specific Allowance for Loan and Lease Losses | $21,709 | $17,546 | | General Allowance for Loan and Lease Losses | $105,016 | $107,537 | | Metric | Three Months Ended June 30, 2025 (In Thousands) | Three Months Ended June 30, 2024 (In Thousands) | Six Months Ended June 30, 2025 (In Thousands) | Six Months Ended June 30, 2024 (In Thousands) | | :-------------------------------- | :---------------------------------------------- | :---------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Total Provision for Credit Losses | $7,000 | $5,568 | $12,986 | $12,947 | - The specific allowance for loan and lease losses increased by **$4.2 million** during the six months ended June 30, 2025, primarily due to increases for equipment financing, consumer and industrial, and commercial real estate loans[90](index=90&type=chunk) | Loan Modifications (3 Months Ended June 30) | 2025 (Number of Loans) | 2025 (Amortized Cost, In Thousands) | 2024 (Number of Loans) | 2024 (Amortized Cost, In Thousands) | | :------------------------------------------ | :--------------------- | :---------------------------------- | :--------------------- | :---------------------------------- | | Total Modifications | 5 | $4,625 | 17 | $15,675 | [(6) Goodwill and Other Intangible Assets](index=37&type=section&id=(6)%20Goodwill%20and%20Other%20Intangible%20Assets) This note provides information on the company's goodwill and other intangible assets, including amortization schedules | Metric | June 30, 2025 (In Thousands) | December 31, 2024 (In Thousands) | | :----------------------------- | :----------------------------- | :----------------------------- | | Goodwill | $241,222 | $241,222 | | Total Other Intangible Assets | $14,600 | $17,461 | | Estimated Amortization Expense (In Thousands) | | :-------------------------------------------- | | Remainder of 2025: $2,701 | | 2026: $4,324 | | 2027: $3,243 | | 2028: $2,162 | | 2029: $1,081 | [(7) Accumulated Other Comprehensive Income (Loss)](index=38&type=section&id=(7)%20Accumulated%20Other%20Comprehensive%20Income%20(Loss)) This note details the components of accumulated other comprehensive income or loss within stockholders' equity | Metric | June 30, 2025 (In Thousands) | December 31, 2024 (In Thousands) | | :-------------------------------- | :----------------------------- | :----------------------------- | | Accumulated Other Comprehensive Income (Loss) | $(39,378) | $(52,882) | | Other Comprehensive Income (Loss) (Six Months Ended June 30, 2025) | $13,504 | N/A | [(8) Derivatives and Hedging Activities](index=39&type=section&id=(8)%20Derivatives%20and%20Hedging%20Activities) This note describes the company's use of derivative financial instruments for risk management and hedging purposes | Derivative Type | Notional Amount (June 30, 2025, In Thousands) | Notional Amount (December 31, 2024, In Thousands) | | :------------------------------ | :-------------------------------------------- | :------------------------------------------------ | | Interest Rate Swaps on Loans | $225,000 | $225,000 | | Loan Level Derivatives (Receive fixed, pay variable) | $1,425,875 | $1,672,948 | | Loan Level Derivatives (Pay fixed, receive variable) | $1,425,875 | $1,672,948 | | Fair Value (In Thousands) | June 30, 2025 | December 31, 2024 | | :------------------------ | :------------ | :---------------- | | Asset Derivatives | $63,525 | $103,603 | | Liability Derivatives | $63,847 | $105,255 | [(9) Stock Based Compensation](index=44&type=section&id=(9)%20Stock%20Based%20Compensation) This note outlines the company's stock-based compensation plans and the related expense recognized | Metric | Three Months Ended June 30, 2025 (In Thousands) | Three Months Ended June 30, 2024 (In Thousands) | Six Months Ended June 30, 2025 (In Thousands) | Six Months Ended June 30, 2024 (In Thousands) | | :-------------------------------- | :---------------------------------------------- | :---------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Total Expense for Plans | $1,000 | $800 | $1,900 | $1,900 | [(10) EPS](index=44&type=section&id=(10)%20EPS) This note presents the calculation of basic and diluted earnings per share for the reported periods | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Basic EPS | $0.25 | $0.18 | $0.46 | $0.35 | | Diluted EPS | $0.25 | $0.18 | $0.46 | $0.35 | [(11) Fair Value of Financial Instruments](index=45&type=section&id=(11)%20Fair%20Value%20of%20Financial%20Instruments) This note provides fair value measurements for various financial instruments held by the company | Financial Instrument | June 30, 2025 (Fair Value, In Thousands) | December 31, 2024 (Fair Value, In Thousands) | | :-------------------------------- | :--------------------------------------- | :------------------------------------------- | | Investment Securities Available-for-Sale | $866,684 | $895,034 | | Collateral-Dependent Impaired Loans and Leases | $17,700 | $28,100 | | Loans and Leases, Net (Estimated Fair Value) | $9,300,465 | $9,298,057 | [(12) Commitments and Contingencies](index=51&type=section&id=(12)%20Commitments%20and%20Contingencies) This note details the company's off-balance sheet commitments and potential contingent liabilities | Off-Balance Sheet Item | June 30, 2025 (In Thousands) | December 31, 2024 (In Thousands) | | :-------------------------------- | :----------------------------- | :----------------------------- | | Commitments to Originate Loans and Leases | $176,972 | $170,454 | | Unused Lines of Credit | $937,820 | $894,450 | | Total Operating Lease Liabilities | $43,528 | $44,785 | - The Company is party to off-balance sheet financial instruments, including loan commitments, standby and commercial letters of credit, and loan level derivatives, which involve credit and interest-rate risk[195](index=195&type=chunk) - Management believes that outstanding legal proceedings are not expected to materially affect the Company's consolidated financial position or results of operations[208](index=208&type=chunk) [(13) Revenue from Contracts with Customers](index=54&type=section&id=(13)%20Revenue%20from%20Contracts%20with%20Customers) This note explains the company's policies for recognizing revenue from contracts with its customers - Revenue recognized at a point in time includes transactional fees such as card interchange, ATM, wire transfer, overdraft, and loan fees[214](index=214&type=chunk) - Revenue recognized over time includes commissions on investments, insurance sales, and service charges on deposit accounts, generally on a monthly basis[215](index=215&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=56&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the Company's financial performance and condition, highlighting key trends, strategic objectives, and the impact of economic factors. It covers balance sheet changes, asset quality, capital strength, profitability, and reconciliations of non-GAAP financial measures [Forward-Looking Statements](index=56&type=section&id=Forward-Looking%20Statements) This section cautions readers about risks and uncertainties that may cause actual results to differ from projections - Forward-looking statements are based on current assumptions and expectations, but actual results may differ materially due to various risks and uncertainties[217](index=217&type=chunk) - Key risks include changes in interest rates, general economic conditions, competitive pressures, changes in consumer behavior, merger-related risks, operational risks, and regulatory changes[217](index=217&type=chunk) [Introduction](index=56&type=section&id=Introduction) This section provides an overview of the company's business, strategic objectives, and recent significant developments - Brookline Bancorp operates as a multi-bank holding company, offering commercial, business, and retail banking services across New England and New York[218](index=218&type=chunk)[219](index=219&type=chunk) - The Company's strategic objective is to profitably grow its commercial lending businesses, both organically and through acquisitions, emphasizing customer focus, multi-bank structure, and risk management[220](index=220&type=chunk) - A merger agreement with Berkshire Hills Bancorp, Inc. was approved by stockholders and is expected to close in the second half of 2025, subject to regulatory approvals[228](index=228&type=chunk) [Executive Overview](index=58&type=section&id=Executive%20Overview) The Executive Overview summarizes the Company's financial performance and position for the quarter and year-to-date, highlighting key changes in assets, liabilities, equity, and profitability metrics. It notes a decrease in total assets and loans, an increase in deposits, and improved net income and net interest margin | Metric | June 30, 2025 (In Thousands) | December 31, 2024 (In Thousands) | Change (In Thousands) | Annualized Change (%) | | :-------------------------------- | :----------------------------- | :----------------------------- | :-------------------- | :-------------------- | | Total Assets | $11,568,745 | $11,905,326 | $(336,581) | (5.7)% | | Total Loans and Leases | $9,582,374 | $9,779,288 | $(196,914) | (4.0)% | | Total Deposits | $8,961,202 | $8,901,644 | $59,558 | 1.3% | | Total Borrowed Funds | $1,155,051 | $1,519,846 | $(364,795) | (48.0)% | | Metric | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :------------ | :---------------- | | Nonperforming Assets as % of Total Assets | 0.55% | 0.59% | | Allowance for Loan and Lease Losses as % of Total Loans and Leases | 1.32% | 1.28% | | Common Equity Tier 1 Capital Ratio | 11.05% | 10.46% | | Tier 1 Leverage Ratio | 9.40% | 9.06% | | Stockholders' Equity as % of Total Assets | 10.84% | 10.26% | | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net Income | $22.0 million | $16.4 million | $41.1 million | $31.0 million | | Basic EPS | $0.25 | $0.18 | $0.46 | $0.35 | | Annualized Return on Average Assets | 0.77% | 0.57% | N/A | N/A | | Annualized Return on Average Stockholders' Equity | 7.04% | 5.49% | N/A | N/A | | Net Interest Margin | 3.32% | 3.00% | 3.27% | 3.03% | [Critical Accounting Policies and Estimates](index=59&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) This section identifies the company's most critical accounting policies and estimates requiring significant management judgment - The determination of the **Allowance for Credit Losses (ACL)** is identified as the Company's most critical accounting policy, involving significant judgments and estimates[245](index=245&type=chunk) [Recent Accounting Developments](index=59&type=section&id=Recent%20Accounting%20Developments) This section updates on recently adopted or pending accounting standards and their impact on financial reporting - The Company adopted **ASU 2023-07** (Segment Reporting) on January 1, 2024, with no material impact on its consolidated financial statements[246](index=246&type=chunk) - The Company is currently determining the impact of **ASU 2023-09** (Income Tax Disclosures), which is effective for annual periods beginning after December 15, 2024[247](index=247&type=chunk) [Non-GAAP Financial Measures and Reconciliation to GAAP](index=60&type=section&id=Non-GAAP%20Financial%20Measures%20and%20Reconciliation%20to%20GAAP) This section provides reconciliations of non-GAAP financial measures, such as operating earnings, return on average tangible assets and equity, tangible stockholders' equity ratios, tangible book value per share, and dividend payout ratios, which management uses to assess underlying operating performance and capital strength | Metric | Three Months Ended June 30, 2025 (In Thousands) | Three Months Ended June 30, 2024 (In Thousands) | | :-------------------------------- | :---------------------------------------------- | :---------------------------------------------- | | Operating Earnings After Tax | $22,443 | $16,995 | | Operating Basic EPS | $0.25 | $0.19 | | Operating Diluted EPS | $0.25 | $0.19 | | Metric | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :------------ | :---------------- | | Tangible Stockholders' Equity to Tangible Assets | 8.82% | 8.27% | | Tangible Book Value Per Share | $11.20 | $10.81 | | Dividend Payout Ratio (3 Months Ended June 30) | 54.61% | 73.30% | [Financial Condition](index=64&type=section&id=Financial%20Condition) This section details the composition and changes in the Company's balance sheet, including loans, investment securities, deposits, and borrowed funds. It also provides an in-depth analysis of asset quality, including criticized assets, nonperforming assets, and the allowance for credit losses [Loans and Leases](index=64&type=section&id=Loans%20and%20Leases) This section details the composition and changes in the company's loan and lease portfolio by category | Loan Category | June 30, 2025 (In Thousands) | December 31, 2024 (In Thousands) | Dollar Change (In Thousands) | Annualized Percent Change (%) | | :------------------------------ | :----------------------------- | :----------------------------- | :--------------------------- | :---------------------------- | | Commercial Real Estate Loans | $5,485,546 | $5,716,114 | $(230,568) | (8.1)% | | Commercial Loans and Leases | $2,520,347 | $2,506,664 | $13,683 | 1.1% | | Consumer Loans | $1,576,481 | $1,556,510 | $19,971 | 2.6% | | Total Loans and Leases | $9,582,374 | $9,779,288 | $(196,914) | (4.0)% | [Commercial Real Estate Loans](index=65&type=section&id=Commercial%20Real%20Estate%20Loans) This section focuses on the characteristics and trends of the company's commercial real estate loan portfolio - Commercial real estate loans constitute **57.2%** of the total loan portfolio as of June 30, 2025[258](index=258&type=chunk) - The portfolio is primarily secured by apartment buildings (**$1.3 billion**), retail stores (**$903.6 million**), industrial properties (**$788.0 million**), and office buildings (**$713.4 million**) as of June 30, 2025[263](index=263&type=chunk) - Approximately **78.3%** of commercial real estate loans are located in New England, and **15.5%** are in New York, primarily the Lower Hudson Valley region[263](index=263&type=chunk) [Commercial Loans](index=66&type=section&id=Commercial%20Loans) This section analyzes the company's commercial loan and lease portfolio, including its composition and risk factors - The commercial loan and lease portfolio represents **26.3%** of total loans outstanding as of June 30, 2025[269](index=269&type=chunk) - The portfolio is primarily composed of loans and leases to small to medium-sized businesses (**$888.3 million**), food services (**$339.5 million**), and transportation services (**$241.6 million**)[270](index=270&type=chunk) - Equipment financing loans, which constitute a significant portion, typically carry higher yields due to a higher degree of credit risk[274](index=274&type=chunk) [Consumer Loans](index=67&type=section&id=Consumer%20Loans) This section describes the company's consumer loan portfolio, including residential mortgages and home equity loans - The consumer loan portfolio, including residential mortgage, home equity, and other consumer loans, represented **16.5%** of total loans outstanding as of June 30, 2025[275](index=275&type=chunk) - Lending is focused on existing and new customers within the Company's branch networks in the Greater Boston, Providence, and Lower Hudson Valley areas[275](index=275&type=chunk) [Asset Quality](index=67&type=section&id=Asset%20Quality) This section assesses the quality of the company's assets, including criticized assets and nonperforming assets | Metric | June 30, 2025 (In Thousands) | December 31, 2024 (In Thousands) | | :-------------------------------- | :----------------------------- | :----------------------------- | | Total Criticized Assets | $328,600 | $252,700 | | Total Nonperforming Assets | $63,596 | $70,452 | | Nonperforming Assets as % of Total Assets | 0.55% | 0.59% | | Loans and Leases Past Due > 90 Days and Accruing | $24,899 | $811 | - The increase in criticized assets was primarily driven by increases in commercial real estate, construction, equipment financing, and commercial relationships[278](index=278&type=chunk) - The increase in loans and leases greater than **90 days** past due and accruing was primarily due to loans in the process of renewal or refinancing out of the bank[285](index=285&type=chunk) [Allowance for Credit Losses](index=69&type=section&id=Allowance%20for%20Credit%20Losses) This section discusses the allowance for credit losses, including changes and adequacy relative to the loan portfolio | Metric | June 30, 2025 (In Thousands) | December 31, 2024 (In Thousands) | | :-------------------------------- | :----------------------------- | :----------------------------- | | Allowance for Loan and Lease Losses | $126,725 | $125,083 | | Allowance for Loan and Lease Losses as % of Total Loans and Leases | 1.32% | 1.28% | | Metric | Three Months Ended June 30, 2025 (In Thousands) | Three Months Ended June 30, 2024 (In Thousands) | | :-------------------------------- | :---------------------------------------------- | :---------------------------------------------- | | Net Charge-offs on Loans and Leases | $5,100 | $8,400 | | Annualized Net Charge-offs as % of Average Loans and Leases | 0.21% | 0.35% | - Qualitative adjustments were applied to commercial real estate, commercial, and consumer portfolios, resulting in a net addition to total reserves compared to modeled calculations[290](index=290&type=chunk) [Investment Securities](index=72&type=section&id=Investment%20Securities) This section describes the company's investment portfolio, including fair values and unrealized gains/losses | Metric | June 30, 2025 (In Thousands) | December 31, 2024 (In Thousands) | | :-------------------------------- | :----------------------------- | :----------------------------- | | Cash, Cash Equivalents, and Investment Securities | $1,370,000 | $1,440,000 | | % of Total Assets | 11.9% | 12.1% | | Fair Value of AFS Securities | $866,700 | $895,000 | | Net Unrealized Losses | $51,200 | $69,400 | - The Company's unrealized loss position decreased in 2025 primarily due to a decrease in current market rates[305](index=305&type=chunk) - No investment securities available-for-sale were sold during the six months ended June 30, 2025 or 2024[303](index=303&type=chunk) [Restricted Equity Securities](index=73&type=section&id=Restricted%20Equity%20Securities) This section details the company's holdings in restricted equity securities, such as FHLB and Federal Reserve Bank stock | Metric | June 30, 2025 (In Thousands) | December 31, 2024 (In Thousands) | | :-------------------------------- | :----------------------------- | :----------------------------- | | FHLB Stock | $44,400 | $61,100 | | Federal Reserve Bank Stock | $21,900 | $21,900 | [Deposits](index=73&type=section&id=Deposits) This section analyzes the composition, trends, and cost of the company's deposit base | Deposit Type | June 30, 2025 (In Thousands) | December 31, 2024 (In Thousands) | Weighted Average Rate (June 30, 2025) | Weighted Average Rate (December 31, 2024) | | :-------------------------------- | :----------------------------- | :----------------------------- | :------------------------------------ | :---------------------------------------- | | Total Deposits | $8,961,202 | $8,901,644 | 2.31% | 2.85% | | Core Deposits | $6,320,000 | $6,140,000 | N/A | N/A | | Brokered Deposits | $756,431 | $868,953 | 4.31% | 4.42% | - Core deposits increased by **$179.9 million**, representing **70.6%** of total deposits as of June 30, 2025[310](index=310&type=chunk) - Brokered deposits decreased by **$112.5 million**, reducing their percentage of total deposits to **8.4%** as of June 30, 2025[312](index=312&type=chunk) [Borrowed Funds](index=75&type=section&id=Borrowed%20Funds) This section details the company's short-term and long-term borrowings, including FHLB advances and other lines of credit | Metric | June 30, 2025 (In Thousands) | December 31, 2024 (In Thousands) | | :-------------------------------- | :----------------------------- | :----------------------------- | | Total Borrowed Funds | $1,155,051 | $1,519,846 | | Advances from the FHLB | $934,669 | $1,355,926 | | Outstanding Uncommitted Lines of Credit | $100,000 | — | - FHLB borrowings decreased by **$421.3 million** to **$0.9 billion** as of June 30, 2025[319](index=319&type=chunk) - The Company had **$100.0 million** in outstanding borrowings on uncommitted lines of credit as of June 30, 2025, compared to no borrowings at December 31, 2024[325](index=325&type=chunk) [Derivative Financial Instruments](index=77&type=section&id=Derivative%20Financial%20Instruments) This section describes the company's use of derivative financial instruments and their impact on financial position | Derivative Type | Notional Amount (June 30, 2025, In Thousands) | Notional Amount (December 31, 2024, In Thousands) | | :------------------------------ | :-------------------------------------------- | :------------------------------------------------ | | Interest Rate Derivatives | $225,000 | $225,000 | | Loan Level Derivatives (Receive fixed, pay variable) | $1,425,875 | $1,672,948 | [Stockholders' Equity and Dividends](index=77&type=section&id=Stockholders'%20Equity%20and%20Dividends) This section reports on changes in stockholders' equity and the company's dividend policies and payouts | Metric | June 30, 2025 (In Thousands) | December 31, 2024 (In Thousands) | | :-------------------------------- | :----------------------------- | :----------------------------- | | Total Stockholders' Equity | $1,254,200 | $1,221,900 | | Stockholders' Equity as % of Total Assets | 10.84% | 10.26% | | Tangible Stockholders' Equity as % of Tangible Assets | 8.82% | 8.27% | | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | | Dividend Payout Ratio | 54.61% | 73.30% | [Results of Operations](index=78&type=section&id=Results%20of%20Operations) This section analyzes the Company's income statement performance, focusing on the drivers of net interest income, changes in interest income and expense, provision for credit losses, non-interest income, non-interest expense, and income taxes. It highlights improvements in net interest income and margin, alongside shifts in various revenue and expense categories [Net Interest Income](index=78&type=section&id=Net%20Interest%20Income) This section details the sources and trends of the company's interest income from loans, investments, and other assets | Metric | Three Months Ended June 30, 2025 (In Thousands) | Three Months Ended June 30, 2024 (In Thousands) | Six Months Ended June 30, 2025 (In Thousands) | Six Months Ended June 30, 2024 (In Thousands) | | :-------------------------------- | :---------------------------------------------- | :---------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Net Interest Income | $88,685 | $80,001 | $174,515 | $161,589 | | Net Interest Margin | 3.32% | 3.00% | 3.27% | 3.03% | | Cost of Interest-Bearing Liabilities | 3.17% | 3.65% | 3.23% | 3.61% | - The increase in net interest income was primarily due to a decrease in interest expense on deposits and borrowings, partially offset by a decrease in interest income on loans and leases[336](index=336&type=chunk)[337](index=337&type=chunk) [Rate/Volume Analysis](index=82&type=section&id=Rate%2FVolume%20Analysis) This section analyzes the impact of changes in interest rates and volumes on the company's net interest income | Metric | Three Months Ended June 30, 2025 vs 2024 (In Thousands) | Six Months Ended June 30, 2025 vs 2024 (In Thousands) | | :-------------------------------- | :---------------------------------------------------- | :-------------------------------------------------- | | Net Change in Interest and Dividend Income | $(983) | $(2,420) | | Net Change in Interest Expense | $(9,967) | $(15,940) | | Change in Net Interest Income | $8,684 | $12,926 | - For the three months ended June 30, 2025, the increase in net interest income was driven by **$7.6 million** from rate changes and **$1.1 million** from volume changes[354](index=354&type=chunk) [Interest Income](index=83&type=section&id=Interest%20Income) This section details the sources and trends of the company's interest income from loans, investments, and other assets | Metric | Three Months Ended June 30, 2025 (In Thousands) | Three Months Ended June 30, 2024 (In Thousands) | Six Months Ended June 30, 2025 (In Thousands) | Six Months Ended June 30, 2024 (In Thousands) | | :-------------------------------- | :---------------------------------------------- | :---------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Total Interest Income—Loans and Leases | $143,933 | $145,585 | $287,242 | $290,850 | | Total Interest Income—Investments | $10,139 | $9,770 | $20,558 | $19,964 | - Interest income from loans and leases decreased by **$1.7 million** (**1.1%**) for the three months ended June 30, 2025, primarily due to portfolio composition and changes in interest rates[356](index=356&type=chunk) - Interest income from investments increased by **$0.4 million** (**3.8%**) for the three months ended June 30, 2025, driven by volume growth partially offset by lower rates[359](index=359&type=chunk) [Interest Expense—Deposits and Borrowed Funds](index=84&type=section&id=Interest%20Expense%E2%80%94Deposits%20and%20Borrowed%20Funds) This section analyzes the interest expense incurred on the company's deposits and borrowed funds | Metric | Three Months Ended June 30, 2025 (In Thousands) | Three Months Ended June 30, 2024 (In Thousands) | Six Months Ended June 30, 2025 (In Thousands) | Six Months Ended June 30, 2024 (In Thousands) | | :-------------------------------- | :---------------------------------------------- | :---------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Total Interest Expense—Deposits | $52,682 | $59,721 | $106,160 | $116,605 | | Total Interest Expense—Borrowed Funds | $12,705 | $15,633 | $27,125 | $32,620 | - Interest expense on deposits decreased by **$7.0 million** (**11.8%**) for the three months ended June 30, 2025, primarily due to lower interest rates[362](index=362&type=chunk) - Interest expense on borrowed funds decreased by **$2.9 million** (**18.7%**) for the three months ended June 30, 2025, driven by both volume and lower borrowing rates[364](index=364&type=chunk) [Provision for Credit Losses](index=85&type=section&id=Provision%20for%20Credit%20Losses) This section discusses the provision for credit losses, reflecting changes in credit quality and loan portfolio risk | Metric | Three Months Ended June 30, 2025 (In Thousands) | Three Months Ended June 30, 2024 (In Thousands) | Six Months Ended June 30, 2025 (In Thousands) | Six Months Ended June 30, 2024 (In Thousands) | | :-------------------------------- | :---------------------------------------------- | :---------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Total Provision for Credit Losses | $7,000 | $5,568 | $12,986 | $12,947 | - The provision for credit losses increased by **$1.4 million** for the three months ended June 30, 2025, primarily due to an increase in specific reserves on nonperforming credits and a reduction in loan and commitment balances[367](index=367&type=chunk) [Non-Interest Income](index=85&type=section&id=Non-Interest%20Income) This section analyzes the various sources and trends of the company's non-interest income | Metric | Three Months Ended June 30, 2025 (In Thousands) | Three Months Ended June 30, 2024 (In Thousands) | Six Months Ended June 30, 2025 (In Thousands) | Six Months Ended June 30, 2024 (In Thousands) | | :-------------------------------- | :---------------------------------------------- | :---------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Total Non-Interest Income | $5,970 | $6,396 | $11,630 | $12,680 | | Deposit Fees | $2,472 | $3,001 | $4,833 | $5,898 | | Loan Level Derivative Income, Net | $(4) | $106 | $66 | $543 | | Other Non-Interest Income | $2,766 | $2,457 | $5,578 | $4,618 | - Total non-interest income decreased by **$0.4 million** (**6.7%**) for the three months ended June 30, 2025, primarily due to lower deposit fees and loan level derivative income[369](index=369&type=chunk)[370](index=370&type=chunk)[372](index=372&type=chunk) - Other income increased by **$0.3 million** (**12.6%**) for the three months ended June 30, 2025, driven by higher insurance commissions, miscellaneous income, foreign exchange wire income, and mark-to-market on interest rate swaps[373](index=373&type=chunk) [Non-Interest Expense](index=86&type=section&id=Non-Interest%20Expense) This section details the categories and trends of the company's non-interest expenses | Metric | Three Months Ended June 30, 2025 (In Thousands) | Three Months Ended June 30, 2024 (In Thousands) | Six Months Ended June 30, 2025 (In Thousands) | Six Months Ended June 30, 2024 (In Thousands) | | :-------------------------------- | :---------------------------------------------- | :---------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Total Non-Interest Expense | $58,061 | $59,184 | $118,083 | $120,198 | | Merger and Restructuring Expense | $439 | $823 | $1,410 | $823 | | Professional Services | $1,471 | $1,745 | $3,197 | $3,645 | | Advertising and Marketing | $1,371 | $1,504 | $2,239 | $3,078 | - Total non-interest expense decreased by **$1.1 million** (**1.9%**) for the three months ended June 30, 2025[374](index=374&type=chunk) - Merger and restructuring expense decreased by **$0.4 million** for the three months ended June 30, 2025, but increased by **$0.6 million** for the six months ended June 30, 2025[374](index=374&type=chunk) [Provision for Income Taxes](index=87&type=section&id=Provision%20for%20Income%20Taxes) This section discusses the company's income tax expense and effective tax rates for the reported periods | Metric | Three Months Ended June 30, 2025 (In Thousands) | Three Months Ended June 30, 2024 (In Thousands) | Six Months Ended June 30, 2025 (In Thousands) | Six Months Ended June 30, 2024 (In Thousands) | | :-------------------------------- | :---------------------------------------------- | :---------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Provision for Income Taxes | $7,568 | $5,273 | $13,950 | $10,087 | | Effective Tax Rate | 25.6% | 24.4% | 25.3% | 24.5% | - The increase in the effective tax rate for both the three and six months ended June 30, 2025, was primarily driven by an increase in merger expenses[377](index=377&type=chunk)[378](index=378&type=chunk) [Liquidity and Capital Resources](index=87&type=section&id=Liquidity%20and%20Capital%20Resources) This section outlines the Company's liquidity management strategies, funding sources, and compliance with regulatory capital requirements. It details the levels of on-balance sheet liquidity, deposit mix, various borrowing capacities, and confirms the Company and its Banks are well-capitalized [Liquidity](index=87&type=section&id=Liquidity) This section describes the company's liquidity position, funding sources, and liquidity management strategies | Metric | June 30, 2025 (In Thousands) | December 31, 2024 (In Thousands) | | :-------------------------------- | :----------------------------- | :----------------------------- | | Cash and Equivalents | $506,700 | $543,700 | | Cash, Cash Equivalents, and AFS Securities | $1,400,000 | $1,400,000 | | Deposits | $9,000,000 | $8,900,000 | | Borrowings | $1,200,000 | $1,500,000 | - The Company's on-balance sheet liquidity (cash, cash equivalents, and AFS securities) was **11.9%** of total assets as of June 30, 2025[381](index=381&type=chunk) - FHLB borrowing limit was **$2.8 billion**, and FRB Discount Window borrowing capacity was **$396.3 million** as of June 30, 2025[384](index=384&type=chunk)[386](index=386&type=chunk) [Off-Balance-Sheet Financial Instruments](index=88&type=section&id=Off-Balance-Sheet%20Financial%20Instruments) This section details the company's off-balance sheet commitments and financial instruments | Off-Balance Sheet Item | June 30, 2025 (In Thousands) | December 31, 2024 (In Thousands) | | :-------------------------------- | :----------------------------- | :----------------------------- | | Commitments to Originate Loans and Leases | $176,972 | $170,454 | | Unused Lines of Credit | $937,820 | $894,450 | | Loan Level Derivatives (Notional Principal Amounts) | $1,425,875 | $1,672,948 | [Capital Resources](index=90&type=section&id=Capital%20Resources) This section outlines the company's capital position and compliance with regulatory capital requirements - As of June 30, 2025, the Company and its Banks exceeded all regulatory capital requirements and were considered 'well-capitalized' under prompt corrective action regulations[390](index=390&type=chunk) | Capital Ratio (Brookline Bancorp, Inc.) | June 30, 2025 | December 31, 2024 | | :-------------------------------------- | :------------ | :---------------- | | Common Equity Tier 1 Capital Ratio | 11.05% | 10.46% | | Tier 1 Leverage Capital Ratio | 9.40% | 9.06% | | Tier 1 Risk-Based Capital Ratio | 11.15% | 10.56% | | Total Risk-Based Capital Ratio | 13.03% | 12.42% | [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=92&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section details the Company's exposure to market risk, primarily interest-rate risk, and its management strategies. It describes how the Asset/Liability Committee (ALCO) measures and controls interest-rate risk using income simulation and gap analysis, and assesses the potential impact of interest rate changes on net interest income and economic value of equity [Market Risk](index=92&type=section&id=Market%20Risk) This section defines market risk, primarily interest-rate risk, and its potential impact on the company - Market risk is defined as the potential decline in the fair value of assets, liabilities, and derivatives due to changes in interest rates or financial market volatility[397](index=397&type=chunk) - The principal market risk is interest-rate risk, which includes repricing risk, yield-curve risk, basis risk, and prepayment risk[398](index=398&type=chunk) [Asset/Liability Management](index=92&type=section&id=Asset%2FLiability%20Management) This section describes the company's strategies and governance for managing market and interest-rate risk - Market risk and interest-rate risk management are governed by the Company's Asset/Liability Committee (ALCO), which sets exposure limits and monitors compliance[399](index=399&type=chunk) - Management controls interest-rate exposure by adjusting maturities of securities, limiting loan terms, and adjusting wholesale funding, and uses interest rate swaps as cash flow hedges[400](index=400&type=chunk) [Measuring Interest-Rate Risk](index=92&type=section&id=Measuring%20Interest-Rate%20Risk) This section explains the methods used to measure and assess the company's exposure to interest-rate risk - Interest-rate risk is measured using income simulation and interest-rate sensitivity 'gap' analysis, with income simulation being the primary tool[402](index=402&type=chunk) - Net interest income simulation indicated that the Company's exposure to changing interest rates was within tolerance as of June 30, 2025[404](index=404&type=chunk) | Change in Interest Rate Levels | Estimated % Change in Net Interest Income (June 30, 2025) | Estimated % Change in Net Interest Income (December 31, 2024) | | :----------------------------- | :-------------------------------------------------------- | :-------------------------------------------------------- | | Up 400 basis points shock | (1.0)% | 3.9% | | Down 400 basis points shock | (2.0)% | (9.3)% | - The Company's one-year cumulative interest-rate sensitivity gap was negative **$646.6 million** (**5.95%** of total interest-earning assets) as of June 30, 2025, an improvement from negative **$1.0 billion** (**9.31%**) at December 31, 2024[405](index=405&type=chunk) | Parallel Shock in Interest Rate Levels | Estimated % Change in Economic Value of Equity (June 30, 2025) | Estimated % Change in Economic Value of Equity (December 31, 2024) | | :------------------------------------- | :------------------------------------------------------------- | :------------------------------------------------------------- | | Up 300 basis points | (5.5)% | (5.5)% | | Down 300 basis points | (3.7)% | (6.6)% | [Item 4. Controls and Procedures](index=94&type=section&id=Item%204.%20Controls%20and%20Procedures) The Company's management, including the CEO and CFO, evaluated the effectiveness of its disclosure controls and procedures and internal control over financial reporting, concluding they were effective as of June 30, 2025, with no material changes during the quarter - The Company's disclosure controls and procedures were effective as of June 30, 2025[410](index=410&type=chunk) - There were no material changes in the Company's internal controls over financial reporting during the quarter ended June 30, 2025[411](index=411&type=chunk) [Part II Other Information](index=95&type=section&id=Part%20II%20Other%20Information) This part contains additional disclosures, including legal proceedings, risk factors, and other required information [Item 1. Legal Proceedings](index=95&type=section&id=Item%201.%20Legal%20Proceedings) The Company reports no material pending legal proceedings other than those arising in the normal course of business, and management does not expect them to materially affect the Company's financial position or results of operations - There are no material pending legal proceedings other than those that arise in the normal course of business[413](index=413&type=chunk) [Item 1A. Risk Factors](index=95&type=section&id=Item%201A.%20Risk%20Factors) This section updates on significant risk factors that could materially affect the company's business and financial results - There have been no material changes in the risk factors described in the Company's Annual Report on Form 10-K for the year ended December 31, 2024[414](index=414&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=95&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This item reports on any unregistered sales of equity securities and the use of proceeds, if applicable - This item is not applicable[415](index=415&type=chunk) [Item 3. Defaults Upon Senior Securities](index=95&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This item reports on any defaults upon senior securities, if applicable - This item is not applicable[415](index=415&type=chunk) [Item 4. Mine Safety Disclosures](index=95&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item reports on mine safety disclosures, if applicable - This item is not applicable[415](index=415&type=chunk) [Item 5. Other Information](index=95&type=section&id=Item%205.%20Other%20Information) The Company reports that no directors or officers adopted, terminated, or modified Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the three months ended June 30, 2025 - None of the Company's directors or officers adopted, terminated, or modified a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement during the three months ended June 30, 2025[416](index=416&type=chunk) [Item 6. Exhibits](index=96&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed as part of the report, including certifications and financial data - Exhibits include certifications from the Chief Executive Officer and Chief Financial Officer, as well as XBRL Instance, Schema, Calculation, Definition, Label, and Presentation Linkbase Documents[418](index=418&type=chunk) [Signatures](index=97&type=section&id=Signatures) This section contains the required signatures of the company's authorized officers

Core Viewpoint - Berkshire Hills Bancorp and Brookline Bancorp are merging to form a new holding company named Beacon Financial Corporation, which will trade under the ticker symbol BBT on the New York Stock Exchange. The merger is expected to be completed in Q3 2025, pending regulatory approvals and closing conditions [1]. Group 1: Merger Details - The combined bank will be legally named Beacon Bank & Trust but will be commonly referred to as Beacon Bank [1]. - The merger is characterized as a "merger of equals," aiming to create a powerful financial institution with a broad and complementary footprint [4]. - The integration of banking systems is planned for the first quarter of 2026, with clients continuing to be served under existing brand names until the full transition to Beacon Bank [4]. Group 2: Branding and Vision - The name "Beacon Bank" symbolizes guidance, strength, and stability, reflecting the core principles of both legacy institutions [3]. - The logo design merges elements from both Berkshire and Brookline, using updated navy and gold colors to represent a modern approach [3]. - Leadership from both companies expressed a commitment to providing reliable financial guidance and maintaining local expertise post-merger [4]. Group 3: Company Backgrounds - Berkshire Hills Bancorp has $12.0 billion in assets and operates 83 branches, focusing on community-driven banking solutions in New England and New York [6]. - Brookline Bancorp has $11.6 billion in assets and serves customers in Massachusetts, Rhode Island, and New York, offering a range of commercial and retail banking services [7].

Financial Data and Key Metrics Changes - The company reported earnings of approximately $22 million or $0.25 per share for Q2 2025, showing continued improvement [4] - Customer deposits increased by $59 million, and the net interest margin improved by 10 basis points to 332 basis points [5][9] - Net interest income rose by $2.9 million to $88.7 million, while total revenues for the quarter reached $94.7 million, a 3% increase from Q1 and a 10% increase from 2024 [7][9] Business Line Data and Key Metrics Changes - The loan portfolio contracted by $61 million, with commercial real estate and equipment finance loans declining by $95 million and $46 million respectively [4][7] - Commercial loans grew by $53 million and consumer loans increased by $27 million [7] - The owner-occupied commercial real estate increased by $15 million, while investment commercial real estate decreased by $110 million [7] Market Data and Key Metrics Changes - The Boston office portfolio remains under stress, leading to downgrades in several credits and an increase in reserves for these credits [5] - The office portfolio outside of Boston continues to perform well [5] Company Strategy and Development Direction - The company is preparing for a merger of equals with Berkshire, with a focus on managing the balance sheet and ensuring a smooth transition [4][5] - The merger is expected to enhance products and services for combined customers, with systems integration planned for mid-February [5][6] Management's Comments on Operating Environment and Future Outlook - Management anticipates modest improvements to the net interest margin, estimating an increase of 4 to 8 basis points in Q3, depending on market conditions and Federal Reserve actions [9][10] - Loan portfolio growth is expected to be in the low single digits for the remainder of 2025, with deposit growth projected at 4% to 5% [10] - The effective tax rate is expected to be around 24.25%, excluding non-deductible merger charges [11] Other Important Information - The provision for credit losses was $7 million, with total net charge-offs of $5.1 million [9] - The quarterly dividend was maintained at $0.01 per share, to be paid on August 22 [9] Q&A Session Summary Question: When is the target closing date for the merger? - Management indicated that the merger is expected to close in September, pending regulatory approval [14][16] Question: What is the expected size of loans post-merger? - Management expects to potentially offer loans approaching $100 million for well-sponsored relationships post-merger [18] Question: Can you provide details on the additional reserves taken this quarter? - Management added $1 million in reserves for two specific credits related to a commercial laundry and grocery exposure [20] Question: What is the guidance for net interest margin in Q3? - The guidance for Q3 does not assume any rate cuts and anticipates an increase of 4 to 8 basis points [21][22] Question: How is new loan pricing holding up? - New loan pricing is competitive, particularly in the equipment finance and consumer business, with total loans originated in Q2 at $445 million and a weighted average coupon of 694 basis points [55][57]

Core Viewpoint - Brookline Bancorp reported quarterly earnings of $0.25 per share, matching the Zacks Consensus Estimate, and showing an increase from $0.19 per share a year ago [1]. Financial Performance - Revenues for the quarter ended June 2025 were $94.66 million, missing the Zacks Consensus Estimate by 1.91%, but up from $86.4 million year-over-year [2]. - The company has surpassed consensus revenue estimates only once in the last four quarters [2]. Stock Performance - Brookline shares have declined approximately 6.2% year-to-date, contrasting with the S&P 500's gain of 7.3% [3]. - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the market in the near future [6]. Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.26 on revenues of $99.95 million, and for the current fiscal year, it is $1.04 on revenues of $387.1 million [7]. - The trend of earnings estimate revisions prior to the earnings release was mixed, which may influence future stock performance [6]. Industry Context - The Financial - Savings and Loan industry, to which Brookline belongs, is currently ranked in the bottom 25% of over 250 Zacks industries, suggesting potential challenges ahead [8].

[Executive Summary](index=1&type=section&id=1.%20Executive%20Summary) Brookline Bancorp reported strong Q2 2025 earnings with increased net income and EPS, driven by C&I portfolio growth and expanding net interest margin [Second Quarter 2025 Financial Highlights](index=1&type=section&id=1.1.%20Second%20Quarter%202025%20Financial%20Highlights) Brookline Bancorp reported a solid second quarter 2025, with net income increasing to $22.0 million and EPS reaching $0.25. Operating earnings after tax also saw an increase, reflecting improved financial performance compared to both the previous quarter and the prior year Second Quarter 2025 Financial Highlights Table | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :-------------------------------- | :------ | :------ | :------ | | Net Income (millions) | $22.0 | $19.1 | $16.4 | | EPS (basic and diluted) | $0.25 | $0.21 | $0.18 | | Operating Earnings After Tax (non-GAAP, millions) | $22.4 | $20.0 | $17.0 | | Operating EPS (non-GAAP) | $0.25 | $0.22 | $0.19 | - The Company declared a quarterly **dividend of $0.135 per share**[1](index=1&type=chunk) [Management Commentary](index=1&type=section&id=1.2.%20Management%20Commentary) Mr. Perrault, commenting on the Q2 2025 performance, expressed satisfaction with solid earnings driven by growth in the C&I portfolio and deposits. He highlighted the expansion of the net interest margin despite an intentional contraction in the commercial real estate portfolio - Solid earnings for Q2 2025 were led by growth in the **C&I portfolio** and **deposits**[3](index=3&type=chunk) - **Net interest margin expanded** this quarter, despite intentional contraction in the commercial real estate portfolio[3](index=3&type=chunk) [Selected Financial Highlights (Unaudited)](index=4&type=section&id=2.%20Selected%20Financial%20Highlights%20%28Unaudited%29) This section provides a detailed overview of key financial metrics, including earnings, performance ratios, per share data, balance sheet, asset quality, and capital ratios for Q2 2025 [Earnings Data](index=4&type=section&id=2.1.%20Earnings%20Data) Net interest income increased sequentially and year-over-year, reaching $88.7 million in Q2 2025. Provision for credit losses also increased to $7.0 million, while non-interest income saw a slight increase and non-interest expense decreased Earnings Data Table | Metric (in thousands) | Q2 2025 | Q1 2025 | Q2 2024 | | :-------------------- | :------ | :------ | :------ | | Net interest income | $88,685 | $85,830 | $80,001 | | Provision for credit losses on loans | $6,997 | $5,974 | $5,607 | | Non-interest income | $5,970 | $5,660 | $6,396 | | Non-interest expense | $58,061 | $60,022 | $59,184 | | Net income | $22,026 | $19,100 | $16,372 | [Performance Ratios](index=4&type=section&id=2.2.%20Performance%20Ratios) Key performance ratios improved in Q2 2025, with net interest margin expanding to 3.32% and return on average assets increasing to 0.77%. The efficiency ratio also improved, indicating better operational management Performance Ratios Table | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :-------------------------------- | :------ | :------ | :------ | | Net interest margin (annualized) | 3.32% | 3.22% | 3.00% | | Return on average assets (annualized) | 0.77% | 0.66% | 0.57% | | Return on average tangible assets (annualized, non-GAAP) | 0.79% | 0.68% | 0.59% | | Return on average stockholders' equity (annualized) | 7.04% | 6.19% | 5.49% | | Return on average tangible stockholders' equity (annualized, non-GAAP) | 8.85% | 7.82% | 7.04% | | Efficiency ratio | 61.34% | 65.60% | 68.50% | [Per Common Share Data](index=4&type=section&id=2.3.%20Per%20Common%20Share%20Data) Earnings per share increased to $0.25 for Q2 2025. Book value and tangible book value per share also showed positive growth Per Common Share Data Table | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :-------------------------------- | :------ | :------ | :------ | | Net income — Basic | $0.25 | $0.21 | $0.18 | | Net income — Diluted | $0.25 | $0.21 | $0.18 | | Cash dividends declared | $0.135 | $0.135 | $0.135 | | Book value per share (end of period) | $14.08 | $13.92 | $13.48 | | Tangible book value per share (end of period, non-GAAP) | $11.20 | $11.03 | $10.53 | [Balance Sheet Summary](index=4&type=section&id=2.4.%20Balance%20Sheet%20Summary) Total assets increased slightly quarter-over-quarter but decreased year-over-year. Total loans and leases decreased, while total deposits and stockholders' equity increased Balance Sheet Summary Table | Metric (in thousands) | June 30, 2025 | March 31, 2025 | June 30, 2024 | | :-------------------- | :------------ | :------------- | :------------ | | Total assets | $11,568,745 | $11,519,869 | $11,635,292 | | Total loans and leases | $9,582,374 | $9,642,722 | $9,721,137 | | Total deposits | $8,961,202 | $8,911,452 | $8,737,036 | | Total stockholders' equity | $1,254,171 | $1,240,182 | $1,198,480 | [Asset Quality Summary](index=4&type=section&id=2.5.%20Asset%20Quality%20Summary) Nonperforming assets decreased slightly quarter-over-quarter, and the allowance for loan and lease losses as a percentage of total loans and leases increased Asset Quality Summary Table | Metric (in thousands) | June 30, 2025 | March 31, 2025 | June 30, 2024 | | :-------------------- | :------------ | :------------- | :------------ |\ | Nonperforming assets | $63,596 | $64,021 | $62,683 | | Nonperforming assets as a percentage of total assets | 0.55% | 0.56% | 0.54% | | Allowance for loan and lease losses | $126,725 | $124,145 | $121,750 | | Allowance for loan and lease losses as a percentage of total loans and leases | 1.32% | 1.29% | 1.25% | | Net loan and lease charge-offs | $5,127 | $7,597 | $8,387 | | Net loan and lease charge-offs as a percentage of average loans and leases (annualized) | 0.21% | 0.31% | 0.35% | [Capital Ratios Summary](index=4&type=section&id=2.6.%20Capital%20Ratios%20Summary) Stockholders' equity to total assets and tangible stockholders' equity to tangible assets both improved in Q2 2025 Capital Ratios Summary Table | Metric | June 30, 2025 | March 31, 2025 | June 30, 2024 | | :-------------------------------- | :------------ | :------------- | :------------ | | Stockholders' equity to total assets | 10.84% | 10.77% | 10.30% | | Tangible stockholders' equity to tangible assets (non-GAAP) | 8.82% | 8.73% | 8.23% | [Consolidated Balance Sheets (Unaudited)](index=5&type=section&id=3.%20Consolidated%20Balance%20Sheets%20%28Unaudited%29) The consolidated balance sheets detail the company's assets, liabilities, and stockholders' equity, showing changes quarter-over-quarter and year-over-year [Assets](index=5&type=section&id=3.1.%20Assets) Total assets increased by $48.9 million from Q1 2025 to $11.6 billion, primarily due to an increase in cash and cash equivalents, partially offset by a reduction in loans and leases. Year-over-year, total assets decreased by $66.5 million Assets Table | Asset (in thousands) | June 30, 2025 | March 31, 2025 | June 30, 2024 | | :------------------- | :------------ | :------------- | :------------ | | Total cash and cash equivalents | $506,748 | $357,546 | $343,084 | | Total investment securities | $866,684 | $882,353 | $856,439 | | Total loans and leases | $9,582,374 | $9,642,722 | $9,721,137 | | Goodwill | $241,222 | $241,222 | $241,222 | | Total assets | $11,568,745 | $11,519,869 | $11,635,292 | - Total loans and leases **decreased by $60.3 million** from March 31, 2025, and by **$138.8 million** from June 30, 2024[4](index=4&type=chunk) - Cash and cash equivalents **increased by $149.2 million** quarter-over-quarter and **$163.6 million** year-over-year[5](index=5&type=chunk) [Liabilities](index=5&type=section&id=3.2.%20Liabilities) Total deposits increased by $49.8 million from Q1 2025, primarily driven by customer deposits. Total borrowed funds remained flat quarter-over-quarter but decreased significantly year-over-year Liabilities Table | Liability (in thousands) | June 30, 2025 | March 31, 2025 | June 30, 2024 | | :----------------------- | :------------ | :------------- | :------------ | | Total deposits | $8,961,202 | $8,911,452 | $8,737,036 | | Customer deposits increase | $58,300 | N/A | $391,200 | | Brokered deposits decline | $8,500 | N/A | $167,000 | | Total borrowed funds | $1,155,051 | $1,155,827 | $1,429,462 | | Total liabilities | $10,314,574 | $10,279,687 | $10,436,812 | - Total deposits **increased by $224.2 million** from June 30, 2024[6](index=6&type=chunk) - Total borrowed funds **decreased by $274.4 million** from June 30, 2024[7](index=7&type=chunk) [Stockholders' Equity](index=6&type=section&id=3.3.%20Stockholders%27%20Equity) Stockholders' equity increased quarter-over-quarter and year-over-year, with the ratio of stockholders' equity to total assets improving to 10.84%. Tangible book value per common share also increased Stockholders' Equity Table | Equity Metric (in thousands) | June 30, 2025 | March 31, 2025 | June 30, 2024 | | :--------------------------- | :------------ | :------------- | :------------ | | Total stockholders' equity | $1,254,171 | $1,240,182 | $1,198,480 | | Stockholders' equity to total assets | 10.84% | 10.77% | 10.30% | | Tangible stockholders' equity to tangible assets (non-GAAP) | 8.82% | 8.73% | 8.23% | | Tangible book value per common share (non-GAAP) | $11.20 | $11.03 | $10.53 | - Tangible book value per common share **increased by $0.17** from Q1 2025 and by **$0.67** from Q2 2024[8](index=8&type=chunk) [Consolidated Statements of Income (Unaudited)](index=6&type=section&id=4.%20Consolidated%20Statements%20of%20Income%20%28Unaudited%29) This section presents the consolidated statements of income, highlighting net interest income, non-interest income, and expenses for both quarterly and year-to-date periods [Three Months Ended June 30, 2025](index=6&type=section&id=4.1.%20Three%20Months%20Ended%20June%2030,%202025) For the second quarter of 2025, net interest income increased by $2.9 million from the prior quarter, driven by lower funding costs and higher yields on loans. Non-interest income also increased slightly, while non-interest expense decreased by $1.9 million Three Months Ended June 30, 2025 Table | Income Statement Item (in thousands) | Q2 2025 | Q1 2025 | Q2 2024 | | :----------------------------------- | :------ | :------ | :------ | | Total interest and dividend income | $154,072 | $153,728 | $155,355 | | Total interest expense | $65,387 | $67,898 | $75,354 | | Net interest income | $88,685 | $85,830 | $80,001 | | Provision for credit losses on loans | $6,997 | $5,974 | $5,607 | | Total non-interest income | $5,970 | $5,660 | $6,396 | | Total non-interest expense | $58,061 | $60,022 | $59,184 | | Income before provision for income taxes | $29,594 | $25,482 | $21,645 | | Net income | $22,026 | $19,100 | $16,372 | - Net interest margin **increased 10 basis points to 3.32%** for Q2 2025 from 3.22% for Q1 2025[9](index=9&type=chunk) - **Non-interest expense decreased** primarily due to lower compensation and employee benefits, merger and acquisition expense, and occupancy expense[16](index=16&type=chunk) [Six Months Ended June 30, 2025](index=7&type=section&id=4.2.%20Six%20Months%20Ended%20June%2030,%202025) For the first six months of 2025, net interest income increased significantly compared to the same period in 2024, while total interest expense decreased. Net income for the six-month period also saw a substantial increase Six Months Ended June 30, 2025 Table | Income Statement Item (in thousands) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :----------------------------------- | :--------------------------- | :--------------------------- | | Total interest and dividend income | $307,800 | $310,814 | | Total interest expense | $133,285 | $149,225 | | Net interest income | $174,515 | $161,589 | | Provision for credit losses on loans | $12,971 | $13,030 | | Total non-interest income | $11,630 | $12,680 | | Total non-interest expense | $118,083 | $120,198 | | Income before provision for income taxes | $55,076 | $41,124 | | Net income | $41,126 | $31,037 | - Net interest income for the six months ended June 30, 2025, **increased by $12.9 million** compared to the same period in 2024[37](index=37&type=chunk) - Net income for the six months ended June 30, 2025, **increased by $10.1 million** compared to the same period in 2024[38](index=38&type=chunk) [Asset Quality Analysis (Unaudited)](index=8&type=section&id=5.%20Asset%20Quality%20Analysis%20%28Unaudited%29) This analysis details nonperforming assets, provision for credit losses, allowance for loan and lease losses, and net charge-offs, reflecting the company's asset quality [Nonperforming Assets](index=8&type=section&id=5.1.%20Nonperforming%20Assets) Total nonperforming assets decreased slightly quarter-over-quarter, primarily due to a reduction in nonaccrual loans and leases, particularly commercial real estate loans, driven by the sale of two such loans Nonperforming Assets Table | Nonperforming Asset (in thousands) | June 30, 2025 | March 31, 2025 | June 30, 2024 | | :--------------------------------- | :------------ | :------------- | :------------ | | Total nonaccrual loans and leases | $62,308 | $63,104 | $60,709 | | Commercial real estate loans | $2,420 | $17,418 | $11,659 | | Commercial loans and leases | $54,754 | $40,390 | $43,764 | | Total nonperforming assets | $63,596 | $64,021 | $62,683 | | Nonperforming assets as a percentage of total assets | 0.55% | 0.56% | 0.54% | - Total nonaccrual loans and leases **decreased by $0.8 million**, driven by the sale of two commercial real estate loans[15](index=15&type=chunk) [Provision and Allowance for Loan and Lease Losses](index=8&type=section&id=5.2.%20Provision%20and%20Allowance%20for%20Loan%20and%20Lease%20Losses) The provision for credit losses increased in Q2 2025, influenced by stress in the Boston office sector and additional specific reserves. The allowance for loan and lease losses as a percentage of total loans and leases also increased Provision and Allowance for Loan and Lease Losses Table | Metric (in thousands) | Q2 2025 | Q1 2025 | Q2 2024 | | :-------------------- | :------ | :------ | :------ | | Provision for credit losses on loans | $6,997 | $5,974 | $5,607 | | Allowance for loan and lease losses at end of period | $126,725 | $124,145 | $121,750 | | Allowance for loan and lease losses as a percentage of total loans and leases | 1.32% | 1.29% | 1.25% | - The increase in provision was driven by **continued stress in the Boston office sector** and **additional specific reserves** on two large Eastern Funding credits[11](index=11&type=chunk)[12](index=12&type=chunk) [Net Charge-offs](index=9&type=section&id=5.3.%20Net%20Charge-offs) Total net charge-offs decreased significantly in Q2 2025 compared to the prior quarter, primarily due to the sale of two commercial real estate loans Net Charge-offs Table | Net Charge-offs (in thousands) | Q2 2025 | Q1 2025 | Q2 2024 | | :----------------------------- | :------ | :------ | :------ | | Total net charge-offs | $5,127 | $7,597 | $8,387 | | Commercial real estate loans | $3,524 | $0 | $3,819 | | Commercial loans and leases | $1,640 | $7,647 | $4,571 | | Net loan and lease charge-offs as a percentage of average loans and leases (annualized) | 0.21% | 0.31% | 0.35% | - The **$5.1 million in net charge-offs** was driven by two commercial real estate loans sold during the quarter, resulting in a combined **$3.5 million in net charge-offs**[13](index=13&type=chunk) [Average Yields / Costs (Unaudited)](index=9&type=section&id=6.%20Average%20Yields%20%2F%20Costs%20%28Unaudited%29) This section provides average yields on interest-earning assets and costs of interest-bearing liabilities, illustrating the net interest margin and interest-rate spread [Three Months Ended](index=9&type=section&id=6.1.%20Three%20Months%20Ended) For the three months ended June 30, 2025, the yield on total interest-earning assets increased to 5.74%, while the cost of total interest-bearing liabilities decreased to 3.17%. This led to an expansion of the net interest margin to 3.32% Three Months Ended Table | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :-------------------------------- | :------ | :------ | :------ | | Average Yield on Total Interest-Earning Assets | 5.74% | 5.67% | 5.79% | | Average Cost of Total Interest-Bearing Liabilities | 3.17% | 3.29% | 3.65% | | Net Interest Margin | 3.32% | 3.22% | 3.00% | | Interest-Rate Spread | 2.57% | 2.38% | 2.14% | - The increase in net interest margin was primarily driven by **lower funding costs** and **higher yields on loans and leases**[9](index=9&type=chunk) [Six Months Ended](index=11&type=section&id=6.2.%20Six%20Months%20Ended) For the six months ended June 30, 2025, the average yield on total interest-earning assets was 5.71%, and the average cost of total interest-bearing liabilities was 3.23%. The net interest margin for this period was 3.27%, an improvement over the prior year Six Months Ended Table | Metric | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------------------- | :--------------------------- | :--------------------------- | | Average Yield on Total Interest-Earning Assets | 5.71% | 5.79% | | Average Cost of Total Interest-Bearing Liabilities | 3.23% | 3.61% | | Net Interest Margin | 3.27% | 3.03% | | Interest-Rate Spread | 2.48% | 2.18% | [Non-GAAP Financial Information (Unaudited)](index=12&type=section&id=7.%20Non-GAAP%20Financial%20Information%20%28Unaudited%29) This section reconciles non-GAAP financial measures to their most directly comparable GAAP measures, providing additional insights into the company's performance [Reconciliation Table](index=12&type=section&id=7.1.%20Reconciliation%20Table) The company provides non-GAAP financial measures, such as operating earnings after tax and tangible book value, to offer investors a clearer view of ongoing business activities. These reconciliations adjust for items like merger and restructuring expenses Reconciliation Table Table | Metric (in thousands, except per share) | Q2 2025 | Q2 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------------------------- | :------ | :------ | :--------------------------- | :--------------------------- | | Reported Pretax Income | $29,594 | $21,645 | $55,076 | $41,124 | | Add: Merger and restructuring expense | $439 | $823 | $1,410 | $823 | | Operating Pretax Income | $30,033 | $22,468 | $56,486 | $41,947 | | Operating earnings after tax | $22,443 | $16,995 | $42,478 | $31,658 | | Operating earnings per common share (Basic) | $0.25 | $0.19 | $0.48 | $0.36 | | Operating return on average assets (annualized) | 0.78% | 0.59% | 0.74% | 0.55% | | Operating return on average tangible stockholders' equity (annualized) | 8.98% | 7.31% | 8.55% | 6.78% | | Tangible book value per common share | $11.20 | $10.53 | N/A | N/A | - Non-GAAP measures are used to **analyze financial trends** and **enhance comparability with peers** in the financial services sector[26](index=26&type=chunk) [Additional Company Information](index=2&type=section&id=8.%20Additional%20Company%20Information) This section provides background on Brookline Bancorp, outlines forward-looking statement disclaimers, details the basis of financial presentation, and includes investor relations contact information [About Brookline Bancorp, Inc.](index=2&type=section&id=8.1.%20About%20Brookline%20Bancorp,%20Inc.) Brookline Bancorp, Inc. is a bank holding company headquartered in Boston, Massachusetts, with $11.6 billion in assets. It operates through Brookline Bank, Bank Rhode Island, and PCSB Bank, providing commercial and retail banking services across Central New England and the Lower Hudson Valley of New York State - Brookline Bancorp, Inc. is a bank holding company with **$11.6 billion in assets**[22](index=22&type=chunk) - Operates as the holding company for **Brookline Bank, Bank Rhode Island, and PCSB Bank**[22](index=22&type=chunk) - Provides **commercial and retail banking services, cash management, and investment services** in Massachusetts, Rhode Island, and the Lower Hudson Valley of New York State[22](index=22&type=chunk) [Forward-Looking Statements](index=2&type=section&id=8.2.%20Forward-Looking%20Statements) The report contains forward-looking statements regarding the Company's business, credit quality, financial condition, liquidity, and results of operations. These statements are subject to various risks and uncertainties, including those related to interest rates, economic conditions, competitive pressures, regulatory changes, and the proposed merger with Berkshire Hills Bancorp, Inc - Forward-looking statements are identified by words such as **'believe,' 'expect,' 'anticipate,' 'intend,' 'estimate,' 'assume,' 'outlook,' 'will,' 'should,'** and other expressions predicting future events[24](index=24&type=chunk) - Risks include **potential termination of the merger agreement with Berkshire**, **delays in completing the transaction**, **failure to obtain regulatory approvals**, **changes in interest rates**, **general economic conditions**, **competitive pressures**, and **operational risks**[24](index=24&type=chunk) - The Company does **not undertake any obligation to update forward-looking statements**[24](index=24&type=chunk) [Basis of Presentation](index=3&type=section&id=8.3.%20Basis%20of%20Presentation) The consolidated financial statements are prepared in conformity with Generally Accepted Accounting Principles (GAAP) and SEC rules. Certain prior period amounts have been reclassified for consistent presentation - Consolidated financial statements are prepared in conformity with **GAAP**[25](index=25&type=chunk) - Certain amounts previously reported have been **reclassified to conform to the current period's presentation**[25](index=25&type=chunk) [Investor Relations & Conference Call](index=2&type=section&id=8.4.%20Investor%20Relations%20%26%20Conference%20Call) The Company held a conference call and webcast on July 24, 2025, to discuss the Q2 results and outlook. Details for accessing the webcast and a recorded playback were provided, along with investor relations contact information - A conference call/webcast was held on **Thursday, July 24, 2025, at 1:30 PM Eastern Time**[21](index=21&type=chunk) - Earnings Presentation is available on the Company's website, **www.brooklinebancorp.com**[21](index=21&type=chunk) - Investor Relations contact: **Carl M. Carlson, Co-President and Chief Financial and Strategy Officer, (617) 425-5331, carl.carlson@brkl.com**[27](index=27&type=chunk)

Group 1 - Brookline Bancorp, Inc. will report its second quarter 2025 earnings on July 23, 2025, with a conference call scheduled for July 24, 2025, at 1:30 PM Eastern Time [1] - The company has $11.5 billion in assets and operates branches in Massachusetts, Rhode Island, and New York [2] - Brookline Bancorp offers a variety of banking services, including commercial, business, and retail banking, as well as cash management products and investment services [2] Group 2 - The company provides equipment financing through its subsidiary Eastern Funding and wealth management services through Clarendon Private [2] - Interested parties can access the conference call via a dedicated link or by dialing specific numbers for the United States and international listeners [1] - A recorded playback of the conference call will be available for one week after the event [1]

[Part I - Financial Information](index=5&type=section&id=Part%20I%20Financial%20Information) [Item 1. Unaudited Consolidated Financial Statements](index=5&type=section&id=Item%201.%20Unaudited%20Consolidated%20Financial%20Statements) This section presents Brookline Bancorp, Inc.'s unaudited consolidated financial statements as of March 31, 2025, and for the three months then ended, along with detailed notes on financial accounts and presentation basis [Unaudited Consolidated Balance Sheets](index=5&type=section&id=Unaudited%20Consolidated%20Balance%20Sheets) As of March 31, 2025, total assets decreased to **$11.52 billion** from **$11.91 billion**, primarily due to reduced cash and net loans, while total liabilities decreased to **$10.28 billion** from **$10.68 billion**, and total stockholders' equity increased to **$1.24 billion** from **$1.22 billion** Consolidated Balance Sheet Highlights (in thousands) | Account | At March 31, 2025 | At December 31, 2024 | | :--- | :--- | :--- | | **Total Assets** | **$11,519,869** | **$11,905,326** | | Total cash and cash equivalents | $357,546 | $543,670 | | Net loans and leases | $9,518,577 | $9,654,205 | | Goodwill | $241,222 | $241,222 | | **Total Liabilities** | **$10,279,687** | **$10,683,387** | | Total deposits | $8,911,452 | $8,901,644 | | Total borrowed funds | $1,155,827 | $1,519,846 | | **Total Stockholders' Equity** | **$1,240,182** | **$1,221,939** | [Unaudited Consolidated Statements of Income](index=6&type=section&id=Unaudited%20Consolidated%20Statements%20of%20Income) For the three months ended March 31, 2025, net income increased **30.2%** to **$19.1 million** from **$14.7 million** year-over-year, driven by higher net interest income and lower provision for credit losses, resulting in diluted EPS of **$0.21** compared to **$0.16** Consolidated Income Statement Highlights (in thousands, except per share data) | Account | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net interest income | $85,830 | $81,588 | | Provision for credit losses | $5,986 | $7,379 | | Non-interest income | $5,660 | $6,284 | | Non-interest expense | $60,022 | $61,014 | | **Net income** | **$19,100** | **$14,665** | | **Diluted EPS** | **$0.21** | **$0.16** | [Unaudited Consolidated Statements of Cash Flows](index=10&type=section&id=Unaudited%20Consolidated%20Statements%20of%20Cash%20Flows) For the first three months of 2025, net cash provided by operating activities was **$8.0 million**, investing activities provided **$172.9 million**, and financing activities used **$367.0 million**, resulting in a net decrease in cash and cash equivalents of **$186.1 million** Cash Flow Summary (in thousands) | Activity | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net cash provided from operating activities | $8,014 | $8,840 | | Net cash provided from investing activities | $172,859 | $17,754 | | Net cash (used for) provided from financing activities | ($366,997) | $142,265 | | **Net (decrease) increase in cash and cash equivalents** | **($186,124)** | **$168,859** | [Notes to Unaudited Consolidated Financial Statements](index=13&type=section&id=Notes%20to%20Unaudited%20Consolidated%20Financial%20Statements) The notes provide detailed explanations of the company's accounting policies and financial data, covering loan and investment portfolios, ACL methodology, goodwill, derivatives, and commitments, while confirming operation as a single business segment and adoption of ASU 2023-07 - The Company is a bank holding company parent to Brookline Bank, BankRI, and PCSB Bank, providing commercial, business, and retail banking services primarily in New England and the Lower Hudson Valley of New York[26](index=26&type=chunk)[28](index=28&type=chunk) - The company operates as a single business segment, with the Chairman and CEO acting as the Chief Operating Decision Maker (CODM), who reviews financial information focused on net interest income and net income[39](index=39&type=chunk)[40](index=40&type=chunk) - The company adopted ASU 2023-07, "Segment Reporting," as of January 1, 2024, which did not materially impact the financial statements as the company continues to operate as one reportable segment[42](index=42&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=50&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's Q1 2025 financial performance, highlighting a 30.2% increase in net income to $19.1 million, alongside balance sheet changes, stable asset quality, and strong capital ratios [Executive Overview](index=51&type=section&id=Executive%20Overview) In Q1 2025, total assets decreased to **$11.5 billion**, while net income rose **30.2%** to **$19.1 million** ($0.21 per share) due to higher net interest income and lower credit provisions, with the net interest margin improving to **3.22%**, asset quality remaining stable at **0.56%** nonperforming assets, and capital ratios strengthening to a **10.81%** Common Equity Tier 1 ratio Q1 2025 Key Performance Metrics | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net Income | $19.1 million | $14.7 million | | Diluted EPS | $0.21 | $0.16 | | Net Interest Margin | 3.22% | 3.06% | | Return on Average Assets (Annualized) | 0.66% | 0.51% | | Return on Average Equity (Annualized) | 6.19% | 4.88% | - Total assets decreased by **$385.5 million** (**13.0%** annualized) to **$11.5 billion**, primarily due to decreases in cash and loans[218](index=218&type=chunk) - Nonperforming assets were **$64.0 million**, or **0.56%** of total assets, down from **$70.5 million** (**0.59%**) at year-end 2024[224](index=224&type=chunk) - The company remains "well-capitalized" with a Common Equity Tier 1 capital ratio of **10.81%** and a Total risk-based capital ratio of **12.79%** as of March 31, 2025[226](index=226&type=chunk) [Financial Condition](index=57&type=section&id=Financial%20Condition) As of March 31, 2025, total loans and leases decreased **5.6%** (annualized) to **$9.64 billion**, with commercial real estate loans down **9.5%** to **$5.58 billion**, while nonperforming assets decreased to **$64.0 million**, the allowance for loan and lease losses stood at **1.29%**, deposits remained stable at **$8.91 billion** with core deposits growing to **70.3%**, and borrowed funds decreased by **$364.0 million** to **$1.2 billion** Loan Portfolio Composition (in thousands) | Loan Category | Balance at Mar 31, 2025 | % of Total | Balance at Dec 31, 2024 | % of Total | | :--- | :--- | :--- | :--- | :--- | | Commercial real estate | $5,580,982 | 57.9% | $5,716,114 | 58.4% | | Commercial loans and leases | $2,512,912 | 26.1% | $2,506,664 | 25.6% | | Consumer loans | $1,548,828 | 16.0% | $1,556,510 | 16.0% | | **Total loans and leases** | **$9,642,722** | **100.0%** | **$9,779,288** | **100.0%** | - Nonperforming assets decreased to **$64.0 million** (**0.56%** of total assets) at Q1 2025, down from **$70.5 million** (**0.59%**) at year-end 2024[269](index=269&type=chunk)[272](index=272&type=chunk) - The allowance for loan and lease losses was **$124.1 million**, or **1.29%** of total loans, compared to **$125.1 million**, or **1.28%**, at the end of 2024[277](index=277&type=chunk) - Total deposits increased slightly by **$9.8 million** to **$8.91 billion**, with core deposits growing by **$120.6 million** while brokered deposits decreased by **$104.0 million**[293](index=293&type=chunk)[294](index=294&type=chunk)[296](index=296&type=chunk) [Results of Operations](index=71&type=section&id=Results%20of%20Operations) For Q1 2025, net interest income increased by **$4.2 million** to **$85.8 million** year-over-year, with the net interest margin expanding **16 basis points** to **3.22%** due to a **29 basis point** decrease in the cost of interest-bearing liabilities, while the provision for credit losses decreased to **$6.0 million**, non-interest income fell to **$5.7 million**, and non-interest expense decreased to **$60.0 million**, with an effective tax rate of **25.0%** - Net interest income increased **$4.2 million** YoY to **$85.8 million**, driven by a **$6.0 million** decrease in interest expense[321](index=321&type=chunk) - The net interest margin rose to **3.22%** from **3.06%** in Q1 2024, as the cost of interest-bearing liabilities fell **29 bps** to **3.29%**[322](index=322&type=chunk)[324](index=324&type=chunk) - The provision for credit losses was **$6.0 million**, a decrease of **$1.4 million** from Q1 2024, mainly due to a reduction in loan and commitment balances offsetting specific reserve increases[340](index=340&type=chunk) - Non-interest expense decreased by **$1.0 million** to **$60.0 million**; excluding a new **$1.0 million** merger expense, operating non-interest expense fell by **$2.0 million**, driven by lower compensation and marketing costs[345](index=345&type=chunk)[346](index=346&type=chunk) [Liquidity and Capital Resources](index=78&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintained a strong liquidity position as of March 31, 2025, with **$1.2 billion** in cash and available-for-sale securities, access to **$2.9 billion** in FHLB borrowing capacity and **$400.7 million** at the Federal Reserve Discount Window, while capital levels remain robust, exceeding "well-capitalized" requirements with a Common Equity Tier 1 ratio of **10.81%** and a Total Risk-Based Capital ratio of **12.79%** - As of March 31, 2025, cash, cash equivalents, and investment securities available-for-sale totaled **$1.2 billion**, representing **10.8%** of total assets[350](index=350&type=chunk) - The company has significant available liquidity, including **$2.9 billion** in total borrowing limit from the FHLB and **$400.7 million** of borrowing capacity at the FRB Discount Window[353](index=353&type=chunk)[355](index=355&type=chunk) Regulatory Capital Ratios (Consolidated) as of March 31, 2025 | Capital Ratio | Actual | Minimum for Adequacy + Buffer | | :--- | :--- | :--- | | Common Equity Tier 1 | 10.81% | 7.00% | | Tier 1 Risk-Based | 10.92% | 8.50% | | Total Risk-Based | 12.79% | 10.50% | | Tier 1 Leverage | 9.17% | 4.00% | [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=83&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company manages its primary market risk, interest-rate risk, through ALCO using income simulation and gap analysis, indicating a modestly asset-sensitive profile as of March 31, 2025, with varying impacts on net interest income and Economic Value of Equity under rate changes - The company's primary market risk is interest-rate risk, which is managed by the Asset/Liability Committee (ALCO) through strategies like adjusting portfolio maturities and using interest rate swaps[367](index=367&type=chunk)[369](index=369&type=chunk)[370](index=370&type=chunk) Net Interest Income Sensitivity Analysis (as of March 31, 2025) | Change in Interest Rate Levels (Ramp) | Estimated % Change in NII | | :--- | :--- | | Up 200 basis points | +2.0% | | Up 100 basis points | +1.1% | | Down 100 basis points | -0.7% | | Down 200 basis points | -1.9% | Economic Value of Equity (EVE) at Risk Analysis | Parallel Shock in Interest Rate Levels | Estimated % Change in EVE (Mar 31, 2025) | Estimated % Change in EVE (Dec 31, 2024) | | :--- | :--- | :--- | | Up 300 basis points | (2.2)% | (5.5)% | | Up 100 basis points | 0.0% | (1.3)% | | Down 100 basis points | (1.6)% | (0.8)% | | Down 300 basis points | (9.6)% | (6.6)% | - The company's asset sensitivity decreased from December 31, 2024, to March 31, 2025, due to changes in balance sheet composition, including lower cash equivalents and higher non-maturity deposits[374](index=374&type=chunk) [Item 4. Controls and Procedures](index=85&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal control over financial reporting during the quarter - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of the end of the period covered by the report[381](index=381&type=chunk) - There were no changes in the company's internal controls over financial reporting during the quarter ended March 31, 2025, that materially affected, or are reasonably likely to materially affect, internal control over financial reporting[382](index=382&type=chunk) [Part II - Other Information](index=86&type=section&id=Part%20II%20Other%20Information) [Item 1. Legal Proceedings](index=86&type=section&id=Item%201.%20Legal%20Proceedings) The company reports no material pending legal proceedings beyond those in the normal course of business, with no expected material impact on financial position or results of operations - There are no material pending legal proceedings other than those that arise in the normal course of business, and their outcome is not expected to materially affect the Company's financial condition[384](index=384&type=chunk) [Item 1A. Risk Factors](index=86&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the year ended December 31, 2024 - There have been no material changes in the risk factors from those described in the Annual Report on Form 10-K for the year ended December 31, 2024[385](index=385&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=86&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This item is not applicable for the reporting period - Item 2, along with Items 3 and 4, are reported as 'Not applicable'[386](index=386&type=chunk) [Item 5. Other Information](index=86&type=section&id=Item%205.%20Other%20Information) During the three months ended March 31, 2025, none of the company's directors or officers adopted, terminated, or modified a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement - No directors or officers adopted, terminated, or modified a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the quarter[387](index=387&type=chunk) [Item 6. Exhibits](index=87&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including CEO and CFO certifications and XBRL data files - The report includes CEO and CFO certifications under Sections 302 and 906 of the Sarbanes-Oxley Act, as well as XBRL interactive data files[389](index=389&type=chunk)

Financial Data and Key Metrics Changes - Operating earnings for Q1 2025 were $20 million, translating to $0.22 per share, while GAAP net income was $19.1 million or $0.21 per share after accounting for merger charges of $971,000 [6][7] - Total assets decreased by $385.5 million to $11.5 billion, primarily due to a deliberate reduction in cash equivalents and loan portfolio components [11] - Customer deposits increased by $113.8 million, and the net interest margin improved by 10 basis points to 3.22% [8][13] Business Line Data and Key Metrics Changes - The loan portfolio contracted by $130.6 million, with significant declines in commercial real estate and equipment finance, while commercial loans experienced growth [7][12] - The specialty vehicle portfolio decreased by $29 million to $267 million, following the exit from that business [12] - Net interest income reached $85.8 million, an increase of $800,000 from the previous quarter, despite a decline in average interest-earning assets [14] Market Data and Key Metrics Changes - The provision for credit losses was $6 million, which is $2 million higher than Q4, with net charge-offs totaling $7.6 million [15] - The reserve coverage slightly increased to 129 basis points of total loans [15] - The economic scenarios weightings remained at 40% baseline, 35% moderate recession, and 25% stronger near-term growth [16] Company Strategy and Development Direction - The company is focused on reducing commercial real estate exposures while maintaining important customer relationships [7] - The planned merger with Berkshire Hills Bancorp is progressing well, with regulatory applications filed and stockholder meetings scheduled for May 21 [9][22] - The company anticipates low single-digit growth in the loan portfolio for the remainder of 2025, with a projected deposit growth of 4% to 5% [19] Management's Comments on Operating Environment and Future Outlook - Management expressed uncertainty regarding the interest rate environment and its potential impact on operations, indicating a need for continual adaptation [18] - While modest improvements to the net interest margin are uncertain, an increase of four to eight basis points is estimated for Q2 [18] - The company is managing expenses to $247 million or less for the full year, excluding merger-related costs [20] Other Important Information - The effective tax rate is expected to be around 24.25%, excluding the impact of non-deductible merger charges [20] - The quarterly dividend was maintained at $0.135 per share, to be paid on May 23 [17] Q&A Session Summary Question: Impact of a 25 basis point Fed rate cut on margin - Management indicated that the impact depends on the yield curve's behavior, with a cut in short-term rates potentially being beneficial if mid to long-term rates remain stable [29][30] Question: Details on the $7.1 million commercial charge-off - The charge-off was related to a large C&I credit, specifically a $13 million credit that required additional provisioning [34][35] Question: Tariff implications on equipment finance and manufacturing loan book - Management noted that tariffs are causing unease among customers, affecting underwriting processes, but no tangible impacts have been observed yet [36][37] Question: Loan pricing and sentiment among C&I borrowers - Management expressed optimism about loan pricing and the quality of the pipeline, noting that larger banks are currently cautious, which benefits the company [46][47] Question: Update on the $11 million office loan - Management confirmed that the loan is imminent to close and is fully reserved [64][66] Question: Overall credit quality and pass-rated loans - The overall pass-rated loans are approximately 95%, indicating strong credit quality [68] Question: Future of stock buybacks post-merger - Management stated it is too early to discuss stock buybacks, as capital structure optimization will be reviewed post-merger [79] Question: Exposure to Cambridge market and lab space - The company has minimal exposure in the Cambridge area, with approximately $50 million in lab space across its portfolio [99][100]

Financial Performance - The company reported a quarterly net income of $19.1 million, resulting in an Earnings Per Share (EPS) of $0.21[9] - Operating earnings for the quarter were $20.0 million, with an EPS of $0.22, excluding $1 million in merger-related expenses[9, 10] - Net interest income increased by $0.8 million compared to the previous quarter, driven by lower funding costs[13] - Noninterest income decreased by $0.8 million from the prior quarter due to lower derivative activity[13] Balance Sheet and Capitalization - Loans declined by $136 million, primarily due to a $135 million reduction in Commercial Real Estate (CRE) loans[10] - Customer deposits increased by $113 million[10] - Total assets decreased by $385 million, influenced by declines in loans and cash equivalents[22] - The company's Total Risk Based Capital stood at 12.8%, and Tangible Common Equity was 8.7%[10] Merger and Strategic Initiatives - A merger of equals with Berkshire Hills Bancorp was announced on December 16, 2024[10] - Identified cost savings of 12.6% of the combined company's expense base[35] - The merger is projected to increase earnings per share by 40% on a GAAP basis and 23% on a cash basis in 2026[35]