BRKL - Earnings call transcript Q3 2017

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day and welcome to the Brookline Bancorp Inc.

Third Quarter 2017 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note, this event is being recorded. to Counsel. conference like Frerk, to now General Associate would turn over the Marissa I ahead, go Please ma'am.

Marissa Frerk

Call. will Andrew. Financial to executive Executive Third Conference Officer; Brookline you, team, Bancorp afternoon's Thank Good President M. Inc’s Quarter afternoon Paul A. and XXXX and Brookline Carl hosted Officer. by be and Perrault, welcome This Bancorp's call Chief Earnings Chief Carlson,

business Annual note publicly new with information, results that Brookline and whether forward-looking please to earnings begin, our statements to in forward-looking you this Brookline and any respect of XX-K in identified any response upon the we contain these statements include on call differ results press Bancorp to intent forward-looking Before forward-looking any and may Actual disclaims release. otherwise. statement, conditions, to update financial operations from results may our against Report of future Bancorp. may those Form cause differ cautions actual unduly Factors or events relying statements.

Now, and CEO, I'm Paul Bancorp's President Brookline Perrault. to introduce pleased

Paul Perrault

million share million $XXX million or grew third third per for during for last $XX.X $X.XX my our Loan the reported earnings financial afternoon share $XX.X who quarter the balances the Thanks, quarter Bancorp’s will third Carl by I'm you of $X.XX Financial accompanied to deposits record to quarter. quarter per today walk quarterly our through or Brookline XXXX. earnings Good and our following This Carlson, we grew third million compares welcome result Chief year. Marissa. and comments. call. Yesterday, of Officer, quarterly $XX of

quarter. of non-interest first $XXX,XXX, as September Bank, revenue $X.X second XX, Commons the announced an ratio resulting and acquisition million, in XX.X% second income while the we On XX.X% XXXX. both income, interest to the total close quarter grew First improved grew to the of we quarter, of in which efficiency in expenses expect compared as net over Our

to First Brookline add deposits. Bank expected loans employees the the is Commons approvals, $XXX merged Commons million million we family. forward we Bank and in welcoming into Brookline Commons to and be approximately to First First necessary of $XXX customers and Once will all look in receive our

great Brookline a our Carl the who one region’s our leading of of serving to banks. review customers results now over detail. have and dedicated third communities, We turn employees, company's in more Bancorp team commercial quarter I will making you will the

Carl Carlson

Thanks, Paul.

X the points, or during the during originations mentioned, Paul third on an XXX The on annualized loan As portfolio grew basis X.X% increased basis. coupon to quarter. loans and points XXX million weighted the average repricings basis by quarter, driven

the million cost third the X.X% deposits basis. X of And on basis this increased points. quarter, or XX.X during interest grew period, deposits annualized bearing an During

second as derivate the X yield million X.X% on interest participation. increase million, the while drove points The million sales loans assets QX. X Non-interest the from the were X.X decline impacted activity for XXX,XXX income loan in quarter-over-quarter while bearing from expense the than basis accounting average third from down demand X and earning income the quarter, from XXX,XXX, and the as We the quarter, Driving the short growth compared million second and rates down increased an X.X cost for quarter. was asset points second increased assets XXX,XXX Net basis. was the quarter. Average as quarter, fees interest XXX,XXX X of while XXX,XXX earning the higher liabilities quarter basis on increased Combined, points. quarter basis third Loan XX.X greater QX. average million income, to quarter, quarter interest purchase third higher was their second deposits to margin prepayment of increase interest grew well term interest modestly. in related second million increased or also saw annualized the from grew XXX.X XXX.X

second for growth, X factor Our primarily losses the of provision by driven million, the credit charge-offs. quarter, risk for an assessment, quarter and was loan from million X.X increase

Non-accrual million slightly or the quarter, or or points net were basis XX the on basis to just compared from are QX. XX.X XXX points annualized loans, taxi in a under end on loans, XXX to XX the the points points During loans points, charge-offs as XX percentage the of quarter. the million an basis X of loans down X.X X.X XX the of million basis basis million at was end non-accrual loans. in basis million medallions. Of of total XX second At million declined quarter, allowance, total

Our total to million million during medallion at XX.X the XX. September taxi declined X.X portfolio quarter

have acquisition reserve loans. costs. driven $XX.X to million, $X.X the and of against We a operating company’s XXX,XXX The expense and expenses increased these $XXX,XXX the million quarter second merger non-interest from other by

price $X.XX stockholders on annualized November record which of excess based share quarter of compensation quarter, tax income per company’s The XX% to tax plus our accounting benefit through share, points or capital. of stock impact as required additional of on the quarter. yield paid trueup dividend approved per dividend typically common for the $X.XX to quarterly $X.XX tax associated events per recorded November be tax effective majority earnings stock was share compensation $XX. the guidance, in yesterday’s to XXX guidance occur basis accounting the third benefit an in represents XX.X%, the due board Prior declined year-to-date to with million will quarterly a item. and The be re-commission of X. XX requiring the a XX.X on discrete closing the to excess rate of new Our of the rate Net for paid of the

Paul, expectations. provide our a I’ll Before turning over comments few back to on

new and in portfolio. or and The of million average assessment trends. increase effective the than portfolio for are factors assets We driven and expect with is be QX. Paul million be is XX it for originations will on income projected to the risk growth I’ll remarks. continue net by ongoing that, the quarter, back concluding to driven The XX.X%. loan modestly of tax non-interest to loan overall million loan our coupons rate come range projected our average quarter to provision from fourth to in the growth. is charge-offs projected turn over non-interest continued higher per approximately The $X XXX losses earning growth, to With expense in be projected by weighted Quarterly to consistent for

Paul Perrault

Thanks, Carl.

our of of all we through forward we quarter seizing the to XXXX, look As this move available final in opportunities markets.

as exceptional service expect we deliver will expect. will the our With for customers it to I grow we mentioned, open consistently questions. continue we now Carl up that As that,

Operator

from of Sandler go Mark Partners. comes [Operator Instructions] The ahead. O'Neill first Please Fitzgibbon and question

Mark Fitzgibbon

a just questions on couple the Hey, deposit of front.

the driving First, was XX% promotion that? some offer Did quarter. something your savings there or What's I up you sort unique account from linked think balances were of there?

Paul Perrault

promotional, and I in don't know deposits well estate for it’s held our unique is we being that but of recent that real business, at that that did tax business. instead XX/XX in are we run very quarters business where deferral

Mark Fitzgibbon

footings total roughly? say XX/XX of the are you What deposits would the

Paul Perrault

million. if I but don't it’s XXX know over Carl remembers,

Mark Fitzgibbon

more really Great. been markets Are into X% reported banks that in is all, pressure And money for in far from some and or you? some then have bumping I’m you market so we've aggressive that offering other money there's market banks at putting CD the Okay. guys curious, rates, in that secondly, these instances. some heard Paul, marketplace any rates your on

Paul Perrault

over was spots than but quarter. not that where people pick want those do try special we in there advertised Boston, that more last the is there and but to within now to seeking not us sometimes deals don't I in X%, of as lot widespread, kinds pressure are you It's but there island recall people that at of accommodate do a doing recall specifically anybody? anybody here returns, are to Carl, industry our And

Carl Carlson

I we've first which the on it bank. probably steps mostly the shore, think the most seen with north is

Mark Fitzgibbon

Carl, to for I margin main margins drive Fed putting kind balance if we that what Okay. next wondered XXXX, help interest think the the dynamics through in think about drivers action as year? you are as And see you could sheet of going sort then net do of aside, us any the

Carl Carlson

me the Putting happens the curve, want with you on yield what it apply the aside to and actions Fed margin. interest net

the our game the name going continue I We're portfolio to to we more be that I same. that's here. the and grow our mix think loan think in continue to the serve it's really deposits. And of going to the markets improve of

any of As you and can that an we're curve notice, duration within doesn't quarter. this are But, loans not months is That's a our of flatter securities floating standpoint. it mostly, quarter of our it a portfolio add liquidity to repricing years yield months hoping get About average we five around bit. starts the balance watch hopefully rate did than is and we that from and to probably with three a steepen years. inside X.X to three or of the probably

and the matched how we little feel bit of liability we’re the side that’s we while pretty So position sensitive, we're kind to well a asset on company. try

Paul Perrault

rate The loan you the origination mix pretty continued to will. quite levels, favorable deposit mix to And terms of growth be if in also be favorable. has has interest been continuing

net a numbers I'm for good year. knows next about but not our interest the I'm feeling pretty our So, like Carl, guy prospects who income

Mark Fitzgibbon

rise stuff in sounds like margin macro So putting aside, steady the of due to sort remixing. slow steady -- primarily it

Carl Carlson

just if driving you’re would then the income. the and thing be about that's net and interest Remixing talking growth growth

Operator

Hunsicker go The next question comes from Compass Please ahead. Point. of Laurie

Laurie Hunsicker

with taxi of the charge-offs, I That of taxi. the could was just how things book. hoping charge-offs of was help you X.X that us a that regarding million couple much C&I

Paul Perrault

somewhere think between Laurie. I million, X.XX million and X.XX million X.XX X.XX million,

Laurie Hunsicker

balance. non-performing, half your half of of about still And total that

Carl Carlson

non-performing bit little A that than more now. is right

So million. X.XXX charge-offs were

Laurie Hunsicker

And did have a that’s then close. you non-performing amount? No,

Carl Carlson

loans accrual of amount Total XX,XXX.

Laurie Hunsicker

you First market potentially just think size going we where terms acquisitions of you remind how as deal, Commons And are then us just approaching and acquisitions are going in as seeing you forward. until the deal. Bank you you added then look potentially Are your And you looking, still love this you are close about forward.

Paul Perrault

either. this we've about the out think but Laurie. kinds consider talked I ear don't market our we ground, I terms opportunists. us in we’re don't those I actively market, the think normally keep us really of of mean I of consider of don't as sort parameter I pursuing in Well, the

we in always First familiar are some very conversations think markets of institution, great about very you people going and level that Commons as and on an feeling with there as are So good know. we're they’re

go And expect to so that we quite smoothly.

And to a something for good be take hard came us along appropriate look. if prepared we'd so

Laurie Hunsicker

the largest the you just what’s And Paul, look size? you then thinking What’s where sort look in of will about out, at? you us remind you’re again smallest

Paul Perrault

obviously would market. say to I’d need any market be that First make toward would we'd a net few end smaller as that at the look Commons And in to a billion as that sense. go might be we new perhaps in high and dollars for

Operator

The question Please Matthew of Piper ahead. Jaffray. go from comes Breese next

Matthew Breese

I just on currently yields the back right the wanted go we Paul, slightly that or you expansion. comments; to your in you what's opening then expect are noted noted margin And at that above asset books now. margin, some to

that higher a wanted I down then get asset for extent better costs funding expansion with the will drivers scenes or deposit And you're come expecting. the cost to maintain you behind here So the can do with you sense mix. are the of that think just yields of what margin

of get the better to what idea a wanted factors Just are?

Carl Carlson

we over all in get all deposit think are that I analysts this a we why operate. lot markets on and pricing of the the that's questions of

on better what are side. with consistent putting loan are say wouldn’t the we've the been would spreads. yields. better are spreads We seeing on say along there all fairly I I

yield has what the the been to as yielding assets put some on portfolio better So is. curve gotten over able our higher we've above

the yields been And that. mix portfolio that deposit the going far working I that the the and way. in on so will that on up. expect sense, long so it's portfolio I growth but cost optimistic the outrun do on I the maybe that highlight and portfolio just

have probably we do as not models we let’s when modeling, our Now sensitivity optimistic about in more deposit pricing. we're our say,

sense our what have outperforming And been we've might that suggested. in so models

right excluding down. up So which perhaps that margin I up associated to out prepayment now and impacts question. fees a and the quarter basis in go with and would so come next Hopefully answers point the go your expect or

Matthew Breese

better what quarter, in some you. And But a detail, could last assumptions hoping was bit about the talk you better there's loss this the and there. thank much scenes higher a you release were parts then the than behind changes provision want That's get was idea of to I the I noted little it to that quarter. moving

Carl Carlson

portfolio, particularly that's as loan probably the loans a are have your putting portfolio thing growth higher as that. loan driving charge the reserve. you're to covering or you as to I parts is maintain acquired amortize growth you’re grows for your originated then biggest provisions offs little in quarter far reserves that and net think the that in moving the concerned, as And continue up

factors. things. other is what that that that's and thing all risk with portfolios on think your And We there's asking. The really flows you're historical no what's through do quarterly happening on a basically look at basis I of our that

activity offs that up reflected go and management into and down as kind of are formula there's in assumptions go our as those charge as risk some So or that also then well. the factors

And C&I a kind risk little higher bit factors our quarter. So bit also a of our to contributed on this raised book provision. that C&I on in we loans

Paul Perrault

At quantify very a it that for for risk quarter way was of quarter can general me, a of changes. charge-offs rating the in risk for that of the probably it these loan was I and half Carl a of provision was kicking growth,

Carl Carlson

in and half sentence takes As one can a answer hour. usual, Paul question an

Matthew Breese

deal of you Is have to of kind expect the first forward. the quarter, expected kind and million to close in you First this going Commons X this levels something level X.X

Paul Perrault

little third the add do was quarter heavier a bit. to that. normal, a think little you I to want than Carl,

Matthew Breese

us And markets. wanted in a pessimistic nervous credit Paul, So maybe discussion. to of sense what that sticking see just acquaintance? Boston optimism Boston do get makes markets, with the optimism, you lot and your typically the or for the

Paul Perrault

Matt. Well, finance those all know, we buildings you don't big as

we're So, we rental you in those Island north the the Rhode don't in on shore have And lines. as building are market along and well. of housing to in uptick worry Boston about activity us an market But in well. continuing seeing sales the as metro strong seeing up and

would a think off the mid is market the the right probably has stopped run Very guys rental And slowed seeing I say season get kinds of of who in could that readily the stabilization. renting but not in a works through issue, bad thing. able affordability The quite the past not not probably suggest for it fly weren’t vacancy condominiums our down, - an guys they to increases is as call There's these but as us the it high-end means. be had any as here the properties it sale September issue. businesses which by to I'd shelf markets. I’d high-end now that

Matthew Breese

end is And higher I'm kind at assuming of talking top of you're accurate? XX% that the rent,

Paul Perrault

lower wouldn’t No level to tend to might of mostly that familiar mid board be to properties our talking the that rent about we're what own. consider the with, accurate, you mid Those be be across customers kind rents. I'm

and go might to little talking bit up where end a hard things probably our month per in $X,XXX we're and bucks to the getting that's that for get Boston bedroom X,XXX, So it highest in about X,XXX have a bedroom. goes a month kinds of guys be the might been trying metro guys X,XXX a a

Operator

The Collyn from ahead. Instructions] go of KBW. question [Operator next Gilbert comes Please

Collyn Gilbert

and you the bit your talk and how about what growth where of dynamics And seeing loan future down. that could you're borrower of little is breaking you're coming seeing the on Paul, some future of just the in growth around kind terms demand behavior. a that’s

Paul Perrault

you as within half It's the segment, probably a equipment and core XX-XX probably real breaks down C&I. then Half blanket commercial it commercial market and and finance estate will. between statement. into if And

by things business bit seem categories all there said be before. So operations well, things But equipment away a others. may expanding that have who proportion was from and usage our distribute line make financing is a more been large and in and their customers before bit having those sizable all of so little there's doing more little quite than was a there than take

and like bus school service the stuff. in when a get so to have to number they need sector of buy they new companies We’re we buses happen

little to together and that come say and a of pieces view quite kind our and loan Maybe the us I'd that by outstanding for we're you. these little of lot economy malls of enjoying good small that all some have of different it what these So in gain. and strong times. big estate large businesses not But retail bit are places stuff, this see a is in, is and investors and savvy participating private real

Collyn Gilbert

Is would markets has that your you're there of outside any where kind local core a demand pickup in of geography at intrigued you and that seeing all? enticed be

Paul Perrault

our don't Well of markets. the banks outside go natural

companies so out in may Whilst know anywhere know wouldn't area. may really the finance else are they what's on that not there. be in and don't that I on so what So Laundromat our or narrow going deep going except

market very So wouldn't it’s Collyn, and of to know I for as good that comment this you economist such tiny difficult we have us a market. share, be macro

Operator

This like remarks. for Chief conference concludes session. question-and-answer to and Executive President to would back Perrault, closing our Paul over any turn Officer I the

Paul Perrault

Thanks afternoon for again and talking Have Andrew, all you good look we quarter. with thank next us a to afternoon. and you joining this forward will

Operator

The conference Thank has attending presentation. concluded. now today's for you

now may You disconnect.

Brookline Bancorp (BRKL) 19 Oct 172017 Q3 Earnings call transcript