PART I [Business](index=4&type=section&id=Item%201.%20Business) Brookline Bancorp, Inc. is a multi-bank holding company offering commercial and retail banking services in New England and New York, significantly expanding loans and deposits in 2023 through the PCSB acquisition - Brookline Bancorp, Inc. is the holding company for Brookline Bank, Bank Rhode Island (BankRI), and PCSB Bank, offering commercial and retail banking services in Central New England and New York's Lower Hudson Valley[88](index=88&type=chunk)[92](index=92&type=chunk) - On January 1, 2023, the Company completed its acquisition of PCSB Financial Corporation, the parent of PCSB Bank, which now operates as a separate subsidiary with 14 banking offices in the Lower Hudson Valley of New York[91](index=91&type=chunk) Year-End Financial Highlights (2023 vs. 2022) | Metric | Dec 31, 2023 | Dec 31, 2022 | Change | | :--- | :--- | :--- | :--- | | Total Loans & Leases (in billions) | $9.6 | $7.6 | +26.1% | | Total Deposits (in billions) | $8.5 | $6.5 | +31.1% | | Core Deposits (in billions) | $6.1 | $5.3 | +15.3% | | Nonperforming Assets (in millions) | $45.3 | $15.3 | +196% | | Net Income (in millions) | $75.0 | $109.7 | -31.7% | | Diluted EPS (in dollars) | $0.85 | $1.42 | -40.1% | - The company and its subsidiary banks are subject to extensive regulation and supervision by the Federal Reserve Board (FRB), the FDIC, and state banking authorities in Massachusetts, Rhode Island, and New York[115](index=115&type=chunk)[116](index=116&type=chunk) [Risk Factors](index=14&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks from economic conditions, interest rate changes, intense competition, and a concentrated commercial real estate loan portfolio - The business is highly dependent on local economic conditions in the Greater Boston, Rhode Island, and New York metropolitan areas. An economic downturn in these regions could lead to **higher loan losses** and **lower net income**[257](index=257&type=chunk) - Net interest income is significantly affected by interest rate fluctuations. Rising rates could increase loan defaults, while falling rates may lead to prepayments and reduced net interest income[259](index=259&type=chunk)[261](index=261&type=chunk) - The company faces substantial competition from traditional banks, online banks, and fintech companies. Failure to adapt to technological changes and evolving consumer preferences could result in a **loss of market share**[263](index=263&type=chunk)[265](index=265&type=chunk) - A significant portion of the loan portfolio (**84.7%**) consists of commercial real estate and commercial loans, which are inherently riskier than residential mortgage loans and more dependent on business cash flows and economic conditions[273](index=273&type=chunk) - The company is exposed to cybersecurity risks, including hacking and data breaches, which could lead to operational disruptions, financial losses, and reputational damage. The company relies on third-party vendors for key infrastructure, adding another layer of risk[337](index=337&type=chunk)[342](index=342&type=chunk) [Cybersecurity](index=24&type=section&id=Item%201C.%20Cybersecurity) The company maintains a robust Cybersecurity Risk Management Program, overseen by the CISO and Board committees, to identify, assess, and mitigate evolving cyber threats through assessments, testing, and vendor management - The Cybersecurity Risk Management Program is managed by the Chief Information Security Officer (CISO) and receives oversight from the Board of Directors, the Audit Committee, and the Risk Committee[408](index=408&type=chunk)[409](index=409&type=chunk) - The program is designed to identify, assess, and manage cyber threats through annual risk assessments, regular testing of systems, and continuous monitoring by both an internal team and external vendors[412](index=412&type=chunk)[454](index=454&type=chunk) - The company conducts ongoing reviews of cybersecurity risks associated with third-party vendors, including the review of SOC 1 or SOC 2 reports as part of its Vendor Management Program[415](index=415&type=chunk) PART II [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=28&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) In 2023, total assets grew 23.9% to $11.4 billion due to the PCSB acquisition, but net income decreased 31.7% to $75.0 million, driven by higher expenses and credit loss provisions, while net interest margin compressed [Executive Overview](index=30&type=section&id=Executive%20Overview) The PCSB acquisition significantly increased total assets to $11.4 billion in 2023, yet net income declined 31.7% to $75.0 million due to higher non-interest expenses and credit loss provisions, leading to net interest margin compression Key Financial Metrics (2023 vs. 2022) | Metric | 2023 | 2022 | Change | | :--- | :--- | :--- | :--- | | Total Assets (in billions) | $11.4 | $9.2 | +23.9% | | Total Loans & Leases (in billions) | $9.6 | $7.6 | +26.1% | | Total Deposits (in billions) | $8.5 | $6.5 | +31.1% | | Net Income (in millions) | $75.0 | $109.7 | -31.7% | | Diluted EPS (in dollars) | $0.85 | $1.42 | -40.1% | | Net Interest Margin | 3.24% | 3.67% | -43 bps | | Nonperforming Assets / Total Assets | 0.40% | 0.17% | +23 bps | - The decrease in net income was primarily driven by a **$60.0 million increase in non-interest expense** and a **$29.3 million increase in the provision for credit losses**, partially offset by a **$39.9 million rise in net interest income**[555](index=555&type=chunk) [Financial Condition](index=39&type=section&id=Financial%20Condition) As of December 31, 2023, total assets reached $11.4 billion, with loans growing 26.1% to $9.6 billion, but core deposits decreased as a percentage of total deposits, and nonperforming assets increased Loan Portfolio Composition (December 31, 2023) | Loan Category | Balance (in billions) | % of Total | | :--- | :--- | :--- | | Commercial Real Estate | $5.76 | 59.8% | | Commercial Loans & Leases | $2.40 | 24.9% | | Consumer Loans | $1.48 | 15.3% | | **Total Loans & Leases** | **$9.64** | **100.0%** | Deposit Composition (December 31, 2023) | Deposit Category | Balance (in billions) | % of Total | | :--- | :--- | :--- | | Non-interest-bearing | $1.68 | 19.6% | | Interest-bearing Core (NOW, Savings, MM) | $4.41 | 51.7% | | Certificate of Deposit | $1.57 | 18.4% | | Brokered Deposits | $0.88 | 10.3% | | **Total Deposits** | **$8.55** | **100.0%** | - The ratio of core deposits to total deposits decreased to **71.3% in 2023** from **81.0% in 2022**, reflecting a shift towards higher-cost funding sources like certificates of deposit and brokered deposits[483](index=483&type=chunk) - Total borrowed funds, including FHLB advances and subordinated notes, decreased by **$56.0 million** to **$1.38 billion** at year-end 2023[550](index=550&type=chunk) [Results of Operations](index=57&type=section&id=Results%20of%20Operations) Net interest income increased by $39.9 million in 2023, but a surge in non-interest expenses and credit loss provisions led to a 32.9% decline in income before taxes, reflecting the impact of the PCSB acquisition and rising rates Comparison of Operations (2023 vs. 2022) | Metric (in millions) | 2023 | 2022 | Change | | :--- | :--- | :--- | :--- | | Net Interest Income | $339.7 | $299.8 | +$39.9 | | Provision for Credit Losses | $38.2 | $8.6 | +$29.6 | | Non-Interest Income | $31.9 | $28.3 | +$3.6 | | Non-Interest Expense | $239.5 | $179.5 | +$60.0 | | Income Before Taxes | $93.9 | $139.9 | -$46.0 | | Net Income | $75.0 | $109.7 | -$34.7 | - The increase in non-interest expense in 2023 was driven by higher compensation and benefits (**+$25.4 million**), amortization of intangibles (**+$7.3 million**), equipment and data processing (**+$6.2 million**), and merger expenses (**+$5.2 million**), largely due to the PCSB acquisition[61](index=61&type=chunk)[63](index=63&type=chunk)[64](index=64&type=chunk)[65](index=65&type=chunk) - The efficiency ratio deteriorated to **64.45% in 2023** from **54.72% in 2022**, primarily due to the significant increase in non-interest expenses[62](index=62&type=chunk) - For 2022 compared to 2021, net interest income increased by **$17.4 million**, reflecting a rising interest rate environment that benefited loan yields more than it increased deposit costs during that period[69](index=69&type=chunk) [Liquidity and Capital Resources](index=69&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains strong liquidity through deposit inflows and access to wholesale funding, with both the company and its subsidiary banks exceeding all regulatory capital requirements and remaining well-capitalized - Primary sources of liquidity are deposit inflows, loan repayments, borrowed funds, and maturing securities. Deposits represented **86.1% of total funding** as of December 31, 2023[146](index=146&type=chunk)[147](index=147&type=chunk) - The company has access to significant wholesale funding, including **$1.3 billion in remaining borrowing capacity from the FHLB** and **$273.0 million from the FRB's discount window** as of year-end 2023[149](index=149&type=chunk)[151](index=151&type=chunk) Regulatory Capital Ratios (Company) | Ratio | Dec 31, 2023 | Dec 31, 2022 | Well-Capitalized Minimum | | :--- | :--- | :--- | :--- | | Common Equity Tier 1 | 10.25% | 12.05% | 6.5%* | | Tier 1 Leverage | 9.02% | 10.26% | 5.0%* | | Tier 1 Risk-Based | 10.35% | 12.18% | 8.0%* | | Total Risk-Based | 12.37% | 14.44% | 10.0%* | `*Note: Minimums shown are for subsidiary banks to be well-capitalized; holding company requirements may differ slightly but the company exceeds all.` [Quantitative and Qualitative Disclosures About Market Risk](index=71&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk is interest-rate risk, managed by ALCO, with simulations indicating modest asset sensitivity for net interest income but increased liability sensitivity for Economic Value of Equity in 2023 - The company's main market risk is interest-rate risk, which is managed by the Asset/Liability Committee (ALCO) through strategies like adjusting investment maturities and using interest rate swaps[208](index=208&type=chunk)[209](index=209&type=chunk)[210](index=210&type=chunk) Estimated Impact of Interest Rate Changes on Net Interest Income (NII) | Rate Change Scenario | Estimated % Change in NII (Dec 31, 2023) | Estimated % Change in NII (Dec 31, 2022) | | :--- | :--- | :--- | | Up 300 bps | +3.9% | +7.4% | | Up 100 bps | +1.0% | +1.5% | | Down 100 bps | -1.5% | -2.0% | Estimated Impact of Interest Rate Changes on Economic Value of Equity (EVE) | Rate Change Scenario | Estimated % Change in EVE (Dec 31, 2023) | Estimated % Change in EVE (Dec 31, 2022) | | :--- | :--- | :--- | | Up 300 bps | -6.3% | +0.3% | | Up 100 bps | -2.2% | +0.8% | | Down 100 bps | +2.1% | -3.0% | - The balance sheet became less asset sensitive in 2023 compared to 2022, as indicated by the reduced positive impact on NII from rising rates. This was attributed to deposit outflows causing a greater reliance on wholesale funding[215](index=215&type=chunk)[226](index=226&type=chunk) [Financial Statements and Supplementary Data](index=74&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents the audited consolidated financial statements for 2023, including balance sheets, income statements, and cash flows, with detailed notes on accounting policies, the PCSB acquisition, and asset/liability composition [Note 2. Acquisitions](index=103&type=section&id=Note%202.%20Acquisitions) The company completed the acquisition of PCSB Financial Corporation on January 1, 2023, for $297.8 million, resulting in $80.8 million in goodwill and a subsequent restructuring of the acquired investment portfolio - The acquisition of PCSB Financial Corporation was completed on **January 1, 2023**, for a purchase price of **$297.8 million**[655](index=655&type=chunk) PCSB Acquisition Purchase Price Allocation (in thousands) | Item | Amount (in thousands) | | :--- | :--- | | **Assets Acquired** | | | Cash | $42,373 | | Investments | $366,790 | | Loans (fair value) | $1,336,737 | | Core deposit intangible | $30,265 | | **Liabilities Assumed** | | | Deposits | $1,570,563 | | Borrowings | $52,923 | | **Net Assets Acquired** | **$216,996** | | **Goodwill** | **$80,795** | - Following the acquisition, the company restructured the acquired investment portfolio, selling **$228.3 million of securities** and realizing a **$1.7 million gain**[662](index=662&type=chunk) [Note 4. Investment Securities](index=107&type=section&id=Note%204.%20Investment%20Securities) Available-for-sale investment securities increased to $916.6 million in 2023, primarily U.S. Treasury bonds, carrying a net unrealized loss of $67.7 million, with significant sales related to the PCSB portfolio restructuring Investment Securities Available-for-Sale (Fair Value) | Security Type | Dec 31, 2023 (in millions) | Dec 31, 2022 (in millions) | | :--- | :--- | :--- | | U.S. Treasury bonds | $444.7 | $331.3 | | GSE debentures | $201.1 | $152.4 | | GSE MBSs | $170.0 | $140.6 | | GSE CMOs | $61.6 | $18.2 | | Other | $38.2 | $14.2 | | **Total** | **$916.6** | **$656.8** | - The portfolio carried a net unrealized loss of **$67.7 million** as of December 31, 2023, compared to a net unrealized loss of **$77.2 million** at year-end 2022[722](index=722&type=chunk) - Proceeds from the sale of investment securities were **$230.0 million in 2023**, up from **$78.8 million in 2022**, with the increase primarily related to the restructuring of the investment portfolio acquired from PCSB[2](index=2&type=chunk) [Note 7. Allowance for Credit Losses](index=114&type=section&id=Note%207.%20Allowance%20for%20Credit%20Losses) The allowance for loan and lease losses increased to $117.5 million in 2023, driven by a $38.7 million provision for credit losses and the PCSB acquisition, with the company utilizing CECL models for determination Changes in Allowance for Loan and Lease Losses (2023) | (in thousands) | Commercial Real Estate (in thousands) | Commercial (in thousands) | Consumer (in thousands) | Total (in thousands) | | :--- | :--- | :--- | :--- | :--- | | Balance at Dec 31, 2022 | $68,154 | $26,604 | $3,724 | $98,482 | | Net Charge-offs | ($1,072) | ($18,584) | ($7) | ($19,663) | | Provision for Losses | $14,328 | $21,537 | $2,838 | $38,703 | | **Balance at Dec 31, 2023** | **$81,410** | **$29,557** | **$6,555** | **$117,522** | - The general allowance for loan and lease losses increased from **$95.4 million** to **$108.4 million**, with the acquisition of PCSB Bank contributing **$14.7 million** of this increase[37](index=37&type=chunk) - The allowance methodology uses third-party models based on the CECL standard, incorporating multiple economic forecasts and qualitative adjustments to account for model limitations and specific portfolio risks[519](index=519&type=chunk)[522](index=522&type=chunk)[524](index=524&type=chunk)

Gazing at the Zacks Rank #1 (Strong Buy) list there are a few appealing stocks with Beta ratios under 1.0 which historically indicates they should be less volatile than the broader market.Given the strong rally in the S&P 500 and Nasdaq over the last year it may certainly be wise to consider stocks that should be less volatile and more likely to sustain during market corrections. Even better is when these low beta stocks have dividend yields over 5% and here are a few to consider.Organon & Co (OGN) Out of t ...

Brookline Bancorp (BRKL) has been beaten down lately with too much selling pressure. While the stock has lost 6.5% over the past four weeks, there is light at the end of the tunnel as it is now in oversold territory and Wall Street analysts expect the company to report better earnings than they predicted earlier.How to Determine if a Stock is OversoldWe use Relative Strength Index (RSI), one of the most commonly used technical indicators, for spotting whether a stock is oversold. This is a momentum oscillat ...

The price trend for Brookline Bancorp (BRKL) has been bearish lately and the stock has lost 9.1% over the past week. However, the formation of a hammer chart pattern in its last trading session indicates that the stock could witness a trend reversal soon, as bulls might have gained significant control over the price to help it find support.The formation of a hammer pattern is considered a technical indication of nearing a bottom with likely subsiding of selling pressure. But this is not the only factor that ...

Here are three stocks with buy rank and strong income characteristics for investors to consider today, January 31st:First Financial Bankshares, Inc. (FFIN) : This banking company has witnessed the Zacks Consensus Estimate for its current year earnings increasing 3.7% over the last 60 days.This Zacks Rank #1 company has a dividend yield of 2.2%, compared with the industry average of 0.8%.Intesa Sanpaolo S.p.A. (ISNPY) : This financial products and services company for First Community Bank has witnessed the Z ...

Brookline Bancorp, Inc. (NASDAQ:BRKL) Q4 2023 Earnings Conference Call January 25, 2024 1:30 PM ET Company Participants Laura Vaughn - Attorney Paul Perrault - Chairman & Chief Executive Officer Carl Carlson - Co-President & Chief Financial Officer Conference Call Participants Mark Fitzgibbon - Piper Sandler Nick Cucharale - Hovde Group Steve Moss - Raymond James Laurie Hunsicker - Seaport Research Chris O'Connell - KBW Operator Good afternoon, and welcome to Brookline Bancorp Incorporated Fourth Quarter 20 ...

Financial Performance - Net income for Q4 2023 was $22.9 million, with an EPS of $0.26[13] - Pretax, pre-provision income was $32.4 million[6] - Net interest margin declined by 3 bps to 3.15%[14] - Noninterest income was $8 million, $2.5 million higher than Q3[18] - Net charge-offs were $7.1 million, representing 0.30% annualized[7] - Return on Assets was 0.81%[17] - Return on Tangible Equity was 10.12%[17] Balance Sheet - Loans grew by $261 million linked quarter[35, 48] - Total loans outstanding reached $9.642 billion[24, 81] - Deposits declined by $18 million linked quarter[26, 48] - Customer deposits decreased by $5 million, and brokered deposits were down by $13 million[5] - Borrowings increased by $242 million[36, 50] - Cash and securities increased by $8 million[13] - Total assets increased by $201 million[24, 48] - The allowance for loan losses declined by $1 million[25] Capitalization - Total Risk Based Capital was 12.4%[16, 31] - Tangible Common Equity (TCE) was 8.4%[16] - Tier 1 Common / RWA was 10.3%[31] Loan Portfolio Composition - CRE loans comprised the largest portion of the loan portfolio at $5.765 billion[52] - Total loans reached $9.642 billion[52]

For the quarter ended December 2023, Brookline Bancorp (BRKL) reported revenue of $91.58 million, up 2.8% over the same period last year. EPS came in at $0.26, compared to $0.39 in the year-ago quarter.The reported revenue compares to the Zacks Consensus Estimate of $89.38 million, representing a surprise of +2.46%. The company delivered an EPS surprise of +13.04%, with the consensus EPS estimate being $0.23.While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- ...

Brookline Bancorp (BRKL) came out with quarterly earnings of $0.26 per share, beating the Zacks Consensus Estimate of $0.23 per share. This compares to earnings of $0.39 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 13.04%. A quarter ago, it was expected that this bank holding company would post earnings of $0.27 per share when it actually produced earnings of $0.26, delivering a surprise of -3.70%.Over the last four quarter ...

Mona Macero Will Become Chief Digital Officer of Brookline Bancorp, Inc. Kelly Bressette Will Become Director of Operations BOSTON, Jan. 24, 2024 (GLOBE NEWSWIRE) -- Brookline Bancorp (NASDAQ:BRKL) Co-President and Chief Operating Officer Michael McCurdy announced today three key changes affecting leadership positions at Brookline Bancorp, Inc. (the "Company"). After fifteen years as the Company's Chief Operations Officer, James Cosman will retire effective April 1, 2024. Cosman will remain with the Company ...