BRKL - Earnings call transcript Q1 2021

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Operator

Good day and welcome to the Brookline Bancorp First Quarter 2021 Earnings Call. All participants will be in a 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. I would now like to turn the conference over to Marissa Martin, Associate General Counsel. ahead. go Please

Marissa Martin

been and executive earnings Betsy the everyone. we Carl hosted and Yesterday, Relations afternoon's Carlson. SEC. Thank will M. Paul call and good A. presentation, our be has brooklinebancorp website release of Brookline on with which issued the page This Bancorp's you, by our afternoon, filed team, is Investor and available Perrault

respect the presentation are measures assist business and earnings delay to with if refer Brookline results or statements relied filings forward-looking operations call being Please begin, X to only of to non-GAAP results page problem, forward-looking done condition, which for this presentation and made and of our predictions. contain results contain from to there Brookline refer Bancorp. please is to locations, different please financial forward-looking our may cause understanding results Exchange or we statement your on of differ a of trends Also during factors Securities not Before be actual future statements. materially Commission, the appreciate actual and should is that from financial disclaimer. these could so you Bancorp's technical references This we patience note several understanding. to this measures our and risk performance in as with Any made also other presentation

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

If Bancorp's presentation, and President page Perrault. you I'm pleased of join could CEO, us introduce Brookline on to X earnings Paul the

Paul Perrault

trending optimistic future. increasing, COVID-XX and for us cases everyone. we and Rhode numbers With Island and call. good remain down afternoon, today's Massachusetts joining Marissa for Thanks, the quite in you -- for case numbers vaccine earnings Thank

from our branch while work the are employees for part customers, to providing open services continue fully our to employees home. non-branch Our most with all locations all

the one the to would the Providence We months. or evolving week and for and next who over to are guidance following per return employees two that an office couple in like times here of is Boston both picture

I'm a our Turning as improved. or had we interest earnings, quality stable and $X.XX margin quarter to earnings our $XX.X pleased actually of report million per remained share net our of to credit solid

continue a our financial to deferrals to still shutdowns challenges small with other to payment We who loan and the work are of to some customers segment side. related additional facing require the get

loan the significant quarter on facilitated as first PPP were payments of worked loan and to As provision of non-PPP a CARES of points are made. we there March loans our Outside loans. XX, In an losses bankers recorded QX, and reserve of activity forgiveness X our basis declined latest points $XXX with quarter the lending the million experienced million another losses PPP loan customers million loans The for to with round growing of offset negative under demand. We a on company $XXX for credit prepayments $XXX $X.X continue loans. outstanding in during modifications of additional PPP our basis Act. of of XXX million

Carl? report Carl continue I share. improving $X.XX approved see now pleased to the also quarter. I'm X.X% you will a pipeline grow. and turn in to will per quarterly to the We over trends dividend our first to company's review to continues increase Board who

Carl Carlson

operating compensation-related million $X.X seasonally comparative due costs higher revenues in summary in Paul. credit the increased higher $XXX,XXX we $X.X year was Thank Net costs. by a negative On pre-tax QX were pre-provision you, income of X, provision driven losses. and were last million revenue higher million to $XX.X QX statements. slide income $X.X million for and ahead have provided and

assets on earning funding declined income declined dropped three quarter faster on As points interest-earning XX. the of in basis interest funding as The $XXX,XXX illustrated net yield increased to from cost on page the as costs yield prior X, the assets.

brokered in our in our coverage sheets. loan reflects and on Loans down loan deposits can flat, me million pay you and slide down comparative summary securities X, from slightly excess Slide with $XXX and balance liquidity loan $X.X as significant X billion excluding year-over-year deposit basis home assets million advances. to and cash In The points were follow the the for quarter $XXX federal $XXX and allowance loans composition bank XXX to combined declined while the of you QX. PPP. to million activity we represents If categories. losses linked of reference declined company first finished used quarter,

was As $XXX portfolio million of in portfolio. million the I PPP quarter were of million reduced rest in $XXX growth saw million loans $XXX deposits the in the quarter. loan as Brokered mentioned, $XXX we non-brokered prior declines as the offset overall the deposits flat the from grow of

We end CDs to continue to market be our fees a the income X,XXX PPP products. provides outstanding. snapshot loans the at of X to see each strong life of the over of funds consumers recognized $XXX deferred shift from loans. banks. into growth At million deposit other with $XX in program over approximately these and deposits continue quarter, we demand had of Net Slide money the of million and will

providing March. loan with occurring we during had during As most PPP the deferment X, payment status $XXX our satisfactions quarter million slide in of activity. On we are loan the the of Paul activity first mentioned,

All X.X% remain modification credits the our concentrated $XXX balances. loan modifications all tow and have As sector under in are a end by with XXX provided modifications -- totaling fitness Paul Loan slide laundry, at sectors. Act, million mentioned accruing representing CARES quarter of loans total loan XX. remain on

quarter, formal as buffer million of slide Slide be well all a May standards. of record operating to well-capitalized Paul. the shown dividend As the concludes Yesterday, the XXth. On share comments as be had May payout X% continues payout. end my of At a annualized we an or exceeding dividend a a on approximates of requirements turn X.X% XXth and provides regulatory Board and regulatory XX, approved paid stockholders per own $X.XX back common capital our I'll of it to policies of regular internal $XXX the basis, company our yield. XX, to history our well-capitalized on quarterly targets. on This to

Paul Perrault

Carl. Thanks,

Robert question-and-answer for Rose, is Chief our the us session Joining is who Credit Officer.

We open will now it questions. for Betsy? up

Operator

begin Instructions] now Fitzgibbon the Mark Our Sandler. session. We’ll question [Operator from question-and-answer comes with first Piper

Mark Fitzgibbon

afternoon. guys. morning or guess, I Hey, good Good

complexion if First, are of the with you in size the loan process? I wondered loans your any and PPP share excluding pipelines, could us that

Paul Perrault

Robert?

Robert Rose

balanced CRE. We pushing in is quickly. fairly business tell strong you Well, our -- new-to-new Mark, the places, equipment, is the are and see And in in change and rising C&I is exercise impressive quite equipment new-to-new. there equipment it will the loan world, board it's actually the the I for laundry -- more laundry in has is across the the broad, bottleneck acquisitions it consolidations, also up world demand and quarter, actually quarter balanced, fairly significantly the in equipment running officers is rather for between a up latter, demand manufacturers, refreshes, both Rose. loan in those a are C committees, and is way an refreshes. and than it can interest of well but exercise activity. It's for they bit tell higher I reporting that there It is hi. this in you that picked and Bob and it's

Mark Fitzgibbon

Okay, great. not bit the excluding your for income? over then -- PPP few could quarters, about talk and Carl, little the And you including expectations a next margin including

Carl Carlson

all the on interest pressure -- net it the see to we'll loan continue while We'll this prior income really growth. PPP depends on forgiveness still see to

to we I a overall, of be loan federal into during of going this see funding loan continue So, depends quarter. But on -- of activity, products, that a it's we'll to as advances. brokered it's lot other to to bit of really well down as what going it little to -- gets on funds CDs bank continue the as re-price lot we home kind benefit other and caution there see deposit pay -- a want is booked so side

relief loans, on provide the and $XXX from now know, yield on are speed how what forgiveness. It's forgiveness, magnitude come guys you don't detail very carry X% to it really fees, all just of coupon those see here we a $XXX perspective. these with low. probably they and PPP they forgiven while the get behind loans fees the million get depends to and we'll caution of of fast $XXX I if These a But of the these depends on So, put on lot a area, million loans. tried to of in you as million that the there. some want is loans. And yields recognized lot I that, so are a five-year

of of the loans. I be is So, course, going new to lot PPP timing of and fast how think it a we the book

Mark Fitzgibbon

this call margin what? core the quarter So, was

Carl Carlson

not so I'm that -- a Yes. related you letting the fees PPP to loans, out core to said you the am guys margin. $X.X in margin. if providing well, the came the I figure well, of out that that's million I yourself. try that deferred during core quarter, and take say

Mark Fitzgibbon

Okay.

you us was impact see your next incremental of update we're Durbin? and you expect us what planning refresh -- crossing costs could year $XX curious just on if to you I kind billion. year if from What the Next, this likely for that could on

Paul Perrault

Carl half. give take and I'll then, half I'll

pass doing happen employing the well $XX away long We're everything model required will already Risk not running are very, time when all from feel one afraid racing stuff billion, have that other been the it. do, very not of Board it. testing practices to it. the We're a that It we naturally. from over Committees we've been We when needs $XX not it. long We a for are we time. and pass you're billion for and and to prepared We're will

view, see happening from an when we I of operational point anything all cross. at So, don't

I'll Durbin, for Carl. let As

Carl Carlson

$X estimate the range million that to the somewhere be in side. $X Durbin on to million We

Mark Fitzgibbon

a and agree the have, to some consolidation most your is see to consolidation that see backyard obviously, where be with you scale steal some you then going And suggested do lastly, if about opportunity a lot one kind part opportunity? through that? that competitive. talk I you banks the in two, employees guess, you believe or it that banks Thank part been of are might other recently little maybe really multi-part could of and Okay. not, these a customers, And of you. question, important is of there's those from

Paul Perrault

Mark, the $XXX size $XXX nirvana funny, that size, next it's banks is every say find of up billion, I all virtually that million them. for to

that reached are when fairly that scale economies it's early and we in get so, of and to be most you peculiar things enormous. not it seems appreciate think I on And better thing can in banking are a

of you're once certain it, in believer size. big a a not I'm -- I So,

all Now credit business big maybe more of capable. things lender not sort recently, We're five said having us. We're the in that a right place. think around residential or is deals where and lines. have wonderful happened here opportunity unique cards us I We're big a of a We're that, the retail-oriented or important. scale a are not We're for bit enough.

It I we've like lot of in next of think we time. customers institutions started that to larger loan than for has new people some very unhappy are seeing approvals had for going new with that looking a in the couple be as a to friends. there's be our sizable almost Bob reported So, feels it seen content years, are some new going at

Mark Fitzgibbon

you. Thank Great.

Operator

Point. question comes next go from ahead. with Compass Our Hunsicker Laurie Please

Laurie Hunsicker

Yes, afternoon. hi. Good

Paul Perrault

Hi, least are. Laurie. we afternoon, at Good where

Laurie Hunsicker

then Massachusetts-based just current follow-up have Can just deal. your and more the you looking think would comments the where the And little think you you at book you'll around just if how marketplace asset Mark us obviously this that? last do would be you small entertain bit you helpful. little help you at so earn And number We approach M&A, was you're and bit us think you tangible think then a protective Eastern, expand to about Boston MOE? you one, did you go also INDB, starters how think a bank? a on of guess they given about I'm to In about looking a book, you can about they help point it, publicly-traded you, did there's dilution words would And fact number to further just deal. that other about any stay, little for that two, how Just can bit I I'm would thought how be guess X/X an want trading Just going. the a back I how on where is, super around more about point size? M&A? geographically

Paul Perrault

my do what about long a M&A, don't not or changed I time. in Well, opinion quite or do have I think I

any think the this characteristic that that, in special say were In similar I that. deals acquirers accomplish had announced all is it's that and all light at the was in capital in that cash currencies case, had get deal use Eastern's able thing. what done. In a kind to tangible to to of needed to fair damage, if very some area recent because they order most book cash cases, was ratios all it to

of haven't line would need we draw about would I make a and be the future its we to it in be earnings, like to and able go to be that's be or and know out If about relatively and billion. financial them team management market, the wouldn't got see a that's smallest tangible to maybe end something, want We need that to lines going went do benefits market a don't to with, that that be go I my be that it. be changed we'd on you a recognize that but So comfortable the to around with product And maybe overboard business and mostly to town sand mind have help stick feel they would $X would we helpful. in near market It's be little we in look sense. dilution, would but on diversification able deals it. near in to as

So terms did I – answer your all pieces? of in

Laurie Hunsicker

just I a how more. – bit Yeah. comment you little maybe – Can one about

Paul Perrault

means a – deal. go feel just that, would add any I to add under though I let just me gun don't do the by

Laurie Hunsicker

And Okay. -- about somebody how good. MOE, if ? an what MOE That's about like-minded would an you think

Paul Perrault

righteousness that – MOE paramount the everybody. the would is got MOE way I not to and I think it's make and I'm and an any of it's or got The deal – think of would do propriety the buying of a I mean, I same whether for selling. evident be to transaction sense speculative

Laurie Hunsicker

Okay. you. Carl tax XX% was I I for of about just anything And Tax in think I was Great. question XX.X% rate? using should think, Thanks. rate there last terms

Carl Carlson

and how depend with in all income it going for to that's a on on rate XX% what year the throughout is provisions for what depend true think forgiveness is we'll use. are And we quarter to so what the going full where we we forward the are – that to – year. as tax estimated what what little that's needs like, looked whatever be like for the full based happens It'll the bit the taxable move what I future, as comes XX% that year, up as looks would on fast well then, I in. be our

Laurie Hunsicker

the credit Okay. Great. Thanks for and was helpful. for all taking of thanks details. my questions It

Paul Perrault

you. Thank

Operator

Please [Operator ahead. go Instructions] with Our comes Christopher Keith question Davidson. from D.A. next

Christopher Keith

everyone. morning, good Hey,

Paul Perrault

Chris. Hi,

Christopher Keith

to new wanted are be quarter, now? can the loans you look the linked on stabilizing share just to ask yields right where I So, coming CRE loan

Carl Carlson

Sure.

but book the you about the guys excludes So total whole the time portfolio quarter excluding $XXX during this pre-book or for fees of nature, PPP $XXX draws coupon in so – things that we coupon and asked that originations, million. just question was me for in the million last and that's average itself weighted booked the loans, the the

Christopher Keith

I'm credit over driven looks quarters, at how much utilization growth ex-PPP, lower line just it's loan portfolio of several decline to commercial that Okay. so the Great. all? is last And continued by of at then looking if over curious core the the like in loan contribution so

Paul Perrault

because, a think just where can't pay reaping we've businesses more family-owned a operated case, have off. technically we of I tell much know and lot seen our decide been line But are high-quality portfolio and they it's – very of you utilization. of don't less how them they In and market, money I Carl? many a us you just too Do to in has driven sell

Carl Carlson

at think we changing we that, I don't look we monitor don't keep that much – the one the – all. I recall at –

mostly think just I downs. So it's pay

Paul Perrault

Payoffs.

Carl Carlson

Payoffs, sales that of and things nature.

Paul Perrault

going how are just amazing. what's amazing been It's of to Lots on. It's me – out. companies selling

Carl Carlson

yeah. Post consolidation,

Christopher Keith

That it. at or headwind CRE portfolio, had I helpful. into the you. any a the was just then also there, in shifting downs pay Got I looking Well, quarter? Yeah. And are the thank and headwind guess, second been heading a assume there is payoffs momentum

Paul Perrault

Robert?

Robert Rose

in at careful look pretty down portfolio quarter, people $XX said have XX being they is. during got of and and – as there to up lot That million in don't you've past are a earlier, they million people been thing together. but and there CRE next months about out guys quarter I $XX to and during came of And the lot these I XX up think this dormant time. by paying add XX the proportionately months. because construction stepping a two the But do the add is wanting shrank the to months

Christopher Keith

And Thank Got for Got it. you. it. me. just last then one

So CD the and have those around any maturities? around I any $XXX color somewhere maturities is what – during curious million CD I the then coming if maybe around had additional in you think first maturities retention you was quarter,

Carl Carlson

basis the quarter. new at had were that that – the points a were and million $XXX we volumes Sure. about new volumes The booked was XX rate in

– downs we of We have pay $XXX of off run bookings million. and new million $XXX XXX had about then

Christopher Keith

so it. Thank much. Got helpful. you That's very

Carl Carlson

we're things sense of coming Thank change. so the And million, have off you, coming you Chris. off that the we're $XXX at

Christopher Keith

Thank it. you. Got

Operator

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

Paul Perrault

good for we next in forward day. you, a joining you look today, quarter. the talking to to you again and Thank all Betsy, us Have thank and

Operator

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

disconnect. now may You

Brookline Bancorp (BRKL) 30 Apr 212021 Q1 Earnings call transcript