BRKL - Earnings call transcript Q3 2019

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Operator

Good day, and welcome to the Brookline Bancorp, Inc. Q3 2019 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 Martin, to now General Associate would turn over the Marissa I ahead. go Please

Marissa Martin

and Thank Paul you, Yesterday, call This afternoon, the and quarter Brookline earnings Allie. has Good by which will Investor XXXX A. Bancorp’s to release, executive Carl with our Bancorp’s earnings be third Relations Brookline been page M. hosted conference website, available filed Carlson. afternoon’s call. is we Perrault of our everyone, issued team, on and brooklinebancorp.com, welcome SEC. the

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

presentation future assist predictions. measures should Bancorp’s or to during only made relied are on to be not Any made and performance references of measures you results actual this Brookline understanding and in non-GAAP results trends as financial

and comparison see to earnings GAAP a reconciliation release. please For earnings, our

President to you Bancorp’s introduce and Paul to pleased Brookline I’m now Perrault. CEO, And

Paul A. Perrault

that solid by comments. and I’m growth. who Thanks, results my quarterly walk to our by loan Chief report you financial Marissa. our Financial Officer, Good afternoon, will organic we Carl quarter, Carlson, I’m all. deposit today another accompanied following driven had pleased through

flattening by grew net and curve by margin. yield our interest rates quarter, $XXX continue the $XXX and the increased million For put The on to following million. pressure short-term deposits loan our balances

income interest slightly net our However, improved.

fee had also another We income. solid quarter for

yesterday, share quarter. is second the in increase our $X.XX to the our of increase Board reported dividend year. for quarterly which or And an this earnings $XX.X share, million common third in per We approved per $X.XXX

consolidate First Brookline our We to Bank. also intention bank Bank announced Ipswich charter into the for

As Bank of in Ipswich banks First member you many became of family our XXXX. of know, a

eight the years, in asset $XXX had million, size Over has Boston. X great the of the success Ipswich nearly the communities team bank’s past with branches serving doubling north to

overlap the outreach Boston team’s success, the well as taken grown in has as as and compliance marketplace investments that toward a technology requirements that growth ever-growing With stand-alone emerging of opinion. size Brookline in south in has it make north. inefficient Bank’s the The for our

There systems closures expect preserving the charter first complete banking our our of be We as quarter consolidation, the remain branch and of dedicated to the a result XXXX. will as tradition first during we locally charter priority. to of consolidations and no

will now Carl? you quarter. to who turn the Carl, third I over companies will review

Carl M. Carlson

you, Paul. Thank

core expenses Bank Paul charter the As quarter were First from noninterest $X.X loan specially offset million million, $XXX,XXX was by decreased mentioned. provision $XXX,XXX, the Net This the $XXX,XXX income for loss the from $X.X and improved for income improved million million quarter. $XX.X second up $X.X restructuring mentioned, consolidation and interest decreased Ipswich charge earnings a Paul QX. for

in strong basis. million X.X% annualized an or $XXX.X us charter operating $X.X an realized loan million expect $X basis, consolidation annualized of on the We with XXXX. save growth quarter, in third the to million in had expense We on

earning average points. the the was million. loans of on the estate growth XXX grew of from decrease overall and $XX.X a yield and demand during basis yield CDs. $XX.X a basis For basis with to quarter in points. for average C&I Loan quarter, X Total $XX.X $XX.X savings million $XX.X points basis the points loan the in $XXX on were million million, coupon with grew X points, the $XX.X deposits quarter, weighted of and The million in commercial an quarter real $XXX.X quarter drawdowns consumer assets XXX in million second basis grew declined the originations XXX million deposits, grew portfolio as weighted million

our asset Lower funding the costs resulted higher quarter slightly and yields XX to interest from second basis in margin compressing net points X.XX%.

of improved Included driven basis income linked in in interest is assets. net the net quarter and our a fees. interest prepayment Purchase earning our growth impact However, $XXX,XXX purchase by accounting income had Combined, accounting flat margin. was second impact X quarter, quarter prepayment $XXX,XXX, quarter-over-quarter our basis in changes a point from the negative $XXX,XXX the $XX,XXX. the and on were down third fees on

$XX.X million $X.X company’s was mark-to-market in million. derivative equity versus $XXX,XXX negative the customer quarter, driven the activity, positive by was QX. of income third increase The noninterest mark strong the by portfolio on quarter $XXX,XXX offset $XXX,XXX second quarter. to the from up from increased a Noninterest the of $XXX,XXX second in The expense

consolidation, Excluding by repossessed the declined on well equipment. and occupancy basis, as charter due compensation, $XXX,XXX. decline increases charge as linked related charges in assets expense, for quarter OREO expenses the to linked restructure FDIC and million bank lower The was $X.X quarter a to offset

the for provision credit a reduction stronger and assets, from provision classified lower was The million $XXX,XXX, Our a charge-offs QX. for of decrease losses decrease was in driven quarter the $X.X recoveries. loan in by

XX in $XXX,XXX to The million points the basis $XX.X increased and represents losses loans. allowance loan on for quarter

quarterly increased of yield which yesterday’s X.XX% Paul As price on our mentioned, closing share, approximates dividend based the $X.XXX $XX.XX. to per Board

worth an of of We during repurchased million $XX.XX price also average the quarter. $X.X stock opportunistically at

million have million $X.X We remaining $XX under the program.

statements. formal our concludes That

questions. for open now will We up it

Operator

session. Partners. will from O’Neill begin Sandler Fitzgibbon first with comes We Our question-and-answer & the Mark [Operator question now Instructions]

Mark Fitzgibbon

I so, point afternoon. it could at whether to Island. that? make that was consolidate come now And consolidating Ipswich, would Good sense wondering potentially Road some what guys. synergies you’re of Hi, Bank also kind from if

Paul A. Perrault

in are No. million. that a that we improve They $X.X the the every Mark. size, they enough strong. leader third to market. Island our toward efficiencies originations quarter. Actually I opinion are a Rhode They realize great think could that in And so, going very don’t at continues are big million their quarter, had $X

now. very with X-bank the we’re right situation so I comfortable think And

Mark Fitzgibbon

And then equivalents quarter? Will run cash fourth cash Okay. last that higher do doubled the plan roughly looked with get like the quarter. you from to balances? cash Or deployed just and in it

Carl M. Carlson

probably have higher bit of little We’ll of a we’ll to cash compared in but some balances deploying be quarters, QX. previous that

Mark Fitzgibbon

it it’s like and residential a I Okay. construction coming looked And what construction, but off construction, it geography commercial bit. from? is balances quite low a up loan were very is base that know

Paul A. Perrault

it just residential markets. uniformly in Rhode It is project, so not virtually it’s to all on. very and commercial would construction, across strong continues Hampshire going in any and pretty do Southern very, lot New be very it of little our a Massachusetts, Island be construction. particular was Everything We and one all

Mark Fitzgibbon

Okay. little quarter a we X that’s points. to and I looked X this little those And or going quarter, to surprised. bit It a see the like Should down? expect then the CD coming rates CD rose your basis we’ll was average start turn cost that, fourth in corner

Carl M. Carlson

Yes. Part guide. is previous of that just carryover the from

Paul A. Perrault

Yes.

I rate was in aggressive early think pretty from of CD business. it year the when part that’s the around here the the residual

Mark Fitzgibbon

margin any guidance over on great. you can And us then just, provide Thank be could Okay. the would or the you. X you next quarter to

Carl M. Carlson

Yes.

but the see net peaks come interest in migration relatively still pricing, off the will margin. curve products. our into falling to the with on yield short-term We’ve CD the we’ll rates those flat pressure definitely So customer continue put

XXX in modeling for we’re and QX our XXXX. now, X So in margin result right October, reflects NIM will which currently X.XX% a approximating interest cut in probably net our range for

basis-point As and far as XX we like, quarter. reprice. in the to then up immediate following our CDs basis the X quarter, on every point impact, for And impact X see it with borrowings catching the typically

Mark Fitzgibbon

the rate strikes cuts, case might XXX aggressive, some see and that’s we it For me, no? if Carl, the XXXX? be Well,

Carl M. Carlson

If cut, do What rate we on it improving I be, have rate do we into into, the many going also see have, we wouldn’t, how it depends just improving NIM we that X XXXX. see might cuts.

Mark Fitzgibbon

Thank you.

Operator

Gilbert comes question next with from KBW. Our Collyn

Collyn Gilbert

following up that, Thanks, on comment NIM. the on Carl, the just on

of So, the stays long to cut assume well? does assuming X curve could you mean as do? of it end to kind the end that long the that are is XXX. I What where get rate you

Carl M. Carlson

Yes.

a years. Yes. where get rates we So loan the keeping five for they are slightly,

Collyn Gilbert

cost the goes drive the as Okay. repricing as would and would into cost higher just but will come, way year would drops be there had that be would that then same in in continue that deposits, of that you and the the just And yet, more funding dynamics some on? would you see inflection then an indicated

Paul A. Perrault

a little the occurred Well, more CDs than hate it to that equation capital runs there’s sort when all those runoff word demand there’s going when but deposit a into I of use sort up of rates, were is, peaked they the that of, off. strong higher growth,

Collyn Gilbert

of expect that you’d bit, tranches rates to money a CD on money the some just side that roll frame that are off? of the that some the And the of or to higher, on little Okay. What was seeing that promotional either you’re some sheet of the some what either are balance rolling the put off? market you

Carl M. Carlson

a or the basically guarantee the Those X% see. an out runoff you And current We’ll continue, some things lower things what as was with X we Depends It goes offering do that things deposits. be But We into X%. in for month may see will there. range. down. rates. of really on repricing rates on those we went project that with repricing get

Collyn Gilbert

effect the categories. loan of happening about put you that some you you’re the could most can growth even all And outside Or looking quarter? the some into Okay. talked a think there’s then XXXX? mean, pull-through be little do as up side? you Do in that, feel markets. really pipelines optimistic How are you demand commercial that guys that continue fourth you trend you’re construction all seeing into good on these quarter growth the you the I loan across move seeing, Paul, this had that But bit

Paul A. Perrault

What’s a pull-through?

Collyn Gilbert

everybody is know, some is I here next rates stability heightened activity of business with maybe on or... that what taking happens just don’t versus election Well, now dropping and uncertainty year advantage and

Paul A. Perrault

strong. Well, currently the primarily kind. business And to tend some new does be it pipelines activity are of net all

a continue of you And that customers. make in you the some we will for path in so our of stronger I’ll gone we’ve spat had that that acquired, being even on a bit better months, of our telling I little expect have recent customers on it sort here. we

the seen yet, we’ve we’ve that growth. overcome the way and pay so have good pretty material still reasons, to and able along for downs And all been right

be. might as give to to that these strong So continue economies you how a clue

Collyn Gilbert

That’s it that quarter in missed it, I shares? this And of helpful. terms what repurchased you Okay. Carl, was

Carl M. Carlson

Well, approximately, XXX,XXX shares.

Collyn Gilbert

for capital your kind into appetite factor does your is overall going what And that of that strategy? Or how Okay. forward? management

Carl M. Carlson

concerned. The million is overall approved to it’s basically an used this year be capital far a earlier as not, $XX as Board opportunistically. buyback not strategy It’s management the program

opportunity continue we did. so And see cheap, that when saw opportunities was that if And we the to buy do some cheap. stock we’ll it to we we really to very felt buy

Collyn Gilbert

front. or the there, targets Okay. you’re M&A And the lastly change in likelihood then M&A do XX that Paul, in just seeing another months? appetite deal where on supplies, next would outlook potential any you

Paul A. Perrault

It’s and of speculate. view our there’s We recently, say But some Collyn, stuff haven’t like, in at really very that, I’d we of gotten. we hard been and it it don’t we, look the comes to some by world. we as no change

Collyn Gilbert

very leave there. right, good. All Okay. I’ll it will I

Operator

Laurie Our Instructions] question next Point. with Hunsicker Compass comes [Operator from

Laurie Hunsicker

you for I income. Do Accretion was the income there. prepaid fees for third those? quarter. Hi accretion and have looking

Carl M. Carlson

Yes.

So and as purchase the prior were from accounting flat fees, that’s the far $XXX,XXX, with $XXX,XXX, $XX,XXX quarter, second basically was as down prepayment quarter. they

Laurie Hunsicker

there changes Right, Where then book? the very, I on thanks. point, know we at presumably medallions but in those this us saw how small you drop And charge-offs you it’s any can either just, completely, quarter. update has And are? so no obviously, taxi And marked? taxi this just are very Great. charge-offs been

Carl M. Carlson

piece have about And $X.X No the taxi loans. that by, it’s you guarantee that. The during large know, substantial how that’s changes right million, about million behind marked. there’s a as with XX is balance reserve me say, in and there’s quarter, medallions let now $XX.X there gross the are But that. supported on the we a about medallion

loan And taxi than as so medallion we a a loan. C&I treat that necessarily more

a charge-offs And also and the $XXX,XXX But a did not. of had so loan payoff for we a have we recovery. $XXX,XXX it’s so a quarter, recovery, about

was So on portfolio X, the basically. medallion taxi charge-offs net-net, net there was

Operator

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

Paul A. Perrault

Thank you, look you with Allie. for and today, us quarter. next to thank And all you again joining we talking forward

Operator

for you attending concluded. Thank now today’s is conference presentation. The

may disconnect. You now

Brookline Bancorp (BRKL) 25 Oct 192019 Q3 Earnings call transcript