Brookline Bancorp(US:BRKL)2025-07-24 18:30Financial 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]