Brookline Bancorp(US:BRKL)2024-04-25 23:44Financial Data and Key Metrics Changes - The company reported net income of $14.7 million, equivalent to $0.16 per share, with total assets growing by approximately $161 million driven by an increase in cash and equivalents of $169 million [39] - Net interest income declined by $2 million from the previous quarter to $81.6 million, with a net interest margin compressing by 9 basis points to 3.06% [41] - Non-interest income was $6.3 million, reflecting a decrease of $1.7 million compared to the prior quarter [42] Business Line Data and Key Metrics Changes - Loan originations and draws totaled $435 million at a weighted average coupon of 779 basis points, with modest loan growth of $13 million across C&I, equipment finance, and consumer segments [39] - The provision for credit losses increased to $7.4 million, up $3.6 million from the previous quarter, driven by net charge-offs and reserve build [43] - Nonaccrual loans experienced a modest decline, and the reserve coverage ratio increased to 124 basis points [6] Market Data and Key Metrics Changes - Customer deposits grew by $81 million, with broker deposits increasing by $90 million, while borrowings declined by $15 million [41] - The company anticipates overall loan growth of 1% to 4%, primarily driven by C&I and equipment finance, with only slight growth expected in non-owner-occupied commercial real estate [8] Company Strategy and Development Direction - The company aims to provide boutique commercial banking services, focusing on careful investments in its team, technology, and locations [37] - The management is actively reviewing investment plans and evaluating potential cost-saving opportunities, with operating expenses managed at $240 million for the full year [10] Management Comments on Operating Environment and Future Outlook - The management noted a significant shift in the outlook for 2024 Federal Reserve rate cuts, with longer-term rates rising notably and loan demand softening [7] - The company expects its margin and net interest income for the full year to be lower than initially projected due to prevailing interest rates and deposit mix pressures [8] Other Important Information - The Board approved maintaining the quarterly dividend at $0.135 per share, yielding approximately 6.5% on an annualized basis [11] - The effective tax rate is expected to be around 24.7% for the balance of the year [10] Q&A Session Summary Question: Tax guidance and replacement of expiring tax credits - Management indicated they do not plan to replace the expiring tax credits this quarter [15] Question: Equipment finance business and charge-offs - The largest charge-offs in the equipment finance business were related to transport financing for contractors, particularly those servicing Amazon [16] Question: Stock buybacks in the current environment - Management stated they will continue to evaluate stock buybacks but have no near-term expectations to initiate any [17] Question: Office portfolio charge-offs - The two charged-off credits were resolved through note sales, resulting in a small loss [22][23] Question: Credit quality in commercial real estate - Management expressed confidence in the credit quality of the commercial real estate portfolio, particularly in multifamily spaces [77] Question: Future charge-off rates - Management anticipates a normalized charge-off rate to be less than what was seen in Q1 [85]