BRKL - Earnings call transcript Q4 2021

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Operator

Welcome to today's Brookline Bancorp, Inc. Q4 2021 Earnings Call. My name is Jordan and I'll be coordinating your call today. [Operator Instructions] I'm now going to hand over to Marissa Martin, General Counsel, to begin. Marissa, the line is yours.

Marissa Martin

Jordan. you, Thank everyone. afternoon, And good

respect results Securities and of As a statement during to call risk in mode of contain should Exchange that Please to earnings will being predictions. financial the available Investor refer Relations all only call, and participants Commission, forward-looking could other page please Paul condition, with release may actual future factors Carl and Bancorp. in M. our of today's issued This today's to understanding website results cause references call been presentation brooklinebancorp.com Yesterday, the This for business be our measures from call these Perrault Any results and our which please filed of has financial will is recorded. A. afternoon's forward-looking on listen-only measures disclaimer. our Page statements. we to statements Bancorp's operations are and with differ contain performance during and Also, SEC our this non-GAAP materially on assist forward-looking results X or as the which you be reminder, to refer be to relied the and presentation, note is hosted by Brookline presentation that trends, actual with earnings made of made Brookline not and filings Carlson.

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

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

Paul A. Perrault

quarter grew growth of solid capping earnings brokered loan our core and per almost earnings strong the call. or million quarter. of in a EPS for you $XXX for had deposits for year $XXX $XXX.X excluding And million by earnings We million today's of And share I'm $X.XX. portfolio had with We for of good million record $XX.X report. Marissa. Thanks, everyone. a us thank afternoon, pleased off of to another $X.XX joining

Our income to stable loan and credit quality drove PPP loan quarter our million improve. economic originated. participation Fee also $XX and declined on was $XX strong and loans million activity we by margin dropped end to million. that this the Act to CARES gains swaps loan year modifications was and very customer at environment the continues as $XX

we to continue new pipelines year. strong Mr. Our you very will the quarter. fourth to trends enter review now I as and Carl who positive Carlson. remain be over will turn company's this

Carl M. Carlson

income million income, and provisioning we've a you, to Slide solid On was by Net quarter higher and PPP of comparative revenues million growth partially and operating than quarter, driven by loss greater offset higher statements. last fee Thank Paul. $XXX $XX.X was ago. X, Performance lower thousand loans income this expenses. credit loan $X.X year related lower than provided core summary and

driven were As participations quarter, expense of by million, Total driven incentive by million, others. an costs. by Paul revenues increase to loan was and out million $X.X volume compensation income mentioned, QX increased the primarily customer $XX.X swaps very our higher non-interest strong $X while in by this and

net one funding lower margin interest from costs. interest driven XXX on Overall, earning net income illustrated X, $XXX,XXX by assets point higher As prior Page declined average and the points. basis to our quarter, increased basis

PPP versus the revenues quarter the we $X.X million margin. net Slide X, bottom were the provided million estimated in interest loan the program of PPP on the QX. On impact of $X.X for

finished impact PPP Home declined the basis XX the The PPP points Assuming margin no net of in XX points securities $X.X cost up contributed million. interest penalties the Bank six excluding cash and X QX to interest in income for basis Loans $XXX quarter versus prepayment quarter. follow and sheets. Federal We billion million, of in the QX. me fourth Loan increased $XXX assets, Please funding, in our the summary third were points. year points XXX Slide with margin, combined to $XX while basis million balance basis up comparative from

side, $XX the million. increased our increased categories. On loan deposits seven $XXX and million, of total quarter activity and funding linked and composition the borrowings reflects in deposit year-over-year Slide

loans year, the banks. million our at approximately XXX% a with end end As now PPP of each XX in basis DDA in the in to over December quarter, the deposits concentrated loans, dropped was declined I points. the as grew The basis the savings. basis loan non-PPP during At of deposit portfolio growth million $XXX weighted on portfolio prior at we million. grew in $XXX driven $XXX year. quarter million loans In loan of Slide of loans The had loan core program mentioned, provides points to PPP average our at ratio of XXX be X the Total Net as accelerate by million the snapshot million in core brokered $XX loan increased XXX coupon loan of on will -- remains X the the we $X.X fourth the income fees unearned million outstanding quarter, points life the overall a weighted of originated recognized net deposits portfolio million average from $XXX a of with satisfaction. approximately to coupon XXst. XXX in decline deferred $XX fees. over the

to payment satisfied status Slide this We are On expect the we during early providing of activity. year. loan be the our X, remaining part of deferment the PPP loans

As XX are All and retail XX. modifications than Act, as quarter-end, Loan total sector in concentrated of a mentioned, fitness of the totaling balances. loan by with the modifications on CARES accruing remain less Slide provided $XX credits under loans million sectors. X% have Paul loan representing modification

XXXX. which to in history continues been Yesterday, authorization. this regular capitalized, well an as under has per end XX stock $XX shown to stock No the standards. As the $X.XXX plan, purchased This XXth dividend our common company buffer policies back XX, X.X% of growth of on a year, payout targets. of to record quarterly Board The operating approximates our my million all and Slide a Paul. At through formal million On provides on the company have comments, to $XXX concludes it yield. requirements, dividend. a regulatory the Slide approved capital regulatory repurchase paid as own exceeding annualized well over of we internal dividend be had share shares February stockholders be I our used be turn X.X% approved or of XXth. an on well-capitalized basis, February and may a will the

Paul A. Perrault

it will Thanks, we Carl. questions, now And open please. up for

Operator

question of line the is Fitzgibbon Sandler. Piper first Our Instructions] Mark from Mark, yours. [Operator comes

Mark Fitzgibbon

quarter, And nice you. Thank guys.

Paul A. Perrault

Thanks, Mark.

Mark Fitzgibbon

for First I are sort wondered if mentioned strong. you you for had question you, that just quantify pipelines that could of us? the I

Paul A. Perrault

I cream won't some of got -- because pipelines, through that will flavors I've It's a ice all this negotiated. No. some and try think before of get assuredly it's you I little basic get get kinds think in gone quantify it withdrawn, to some are to those done, to going

say they've I'll So that historic a they're on as just basis, as ever been. healthy

Mark Fitzgibbon

particular have it meaningful -- or customers from? side, business I the of bigger in feel from of And banks? the I'm from coming loan coming guess like then M&A, the are the in area a where is from banks been you way is some commercial Where that any the curious, in coming the lot in -- do involved Paul,

Paul A. Perrault

customers has and that and hoped. to banks banks. very grow and in to continues would our acquired some pleased to market the both say are of of reputation bit alternative are who up that I our also a a we little being attractive been have banks see the people for have grow in are we mass mass the as well fed as that expertise Well, welcome we And as from Island, process continues with or acquired, Rhode gone might

Mark Fitzgibbon

some Okay, the sort for I if us you also think great. expenses year, be about And XXXX how seems with. about everybody outlook tech spending wage then to versus Carl, thinking this given of could help that And maybe pressures wondered you're grappling of XXXX. your

Carl M. Carlson

Sure.

with start I'll tech So the spending.

we forward. spend be think the to consistent as move going tech I very is

look to that We things be us. could to very continue at helpful

don't that areas. deceleration to I So or or those in acceleration in change there's going be think any --

expenses than used expenses, grow they to. we As expect faster to as far a little do

to X% adjust gain projecting side expenses in XXXX. core year-over-year the after we in five are for you operating growth the OREO We be on to that had

as the everybody is as well driven being course, -- impacts full-year by Of – inflation, as year-end getting of reopening. the of some

-pandemic So things seeing are levels. spike up that and pre towards nature we back of [Indiscernible]

company. those associated the the to also do impact up, side add so jump with for QX little incremental but the the that of in center that kicking the full-year QX's that, costs other we well to full things the with seasonally was higher, I well into we've making. commissions To compensation QX taxes here benefiting bit just by be normalize impact initiatives expenses a a but in of do expect incentives the of truing is year. some been with QX compensation be costs will as taken see will expect Those at as payroll do things driven up I'll of that the really line and and And some as investments to of QX. that end I as on we've little, the

Mark Fitzgibbon

like? basis for to share then the XX expected you And look impact could point in with income what would hike us net rates interest each

Carl M. Carlson

did on I'll that that a can slide so those it. ask see provide in We that slide to appendix, Sure. for you to turn the

Mark Fitzgibbon

apologies. My

Carl M. Carlson

Slide basically year. provide the did point quarter that XX, impact the basis We XXX a new rates shows by rise in over of slide,

it'd our about flat from For scenario. be the impact, interest X% in a full rate margin year increase net

Mark Fitzgibbon

Great.

is you. all Thank that think I have. I

Paul A. Perrault

Mark. Thanks,

Operator

Laurie ahead. Laurie, please Our of next Point. comes question from go Compass Hunsicker

Laurie Hunsicker

hear Can Hi. you me?

Paul A. Perrault

Fairly.

Laurie Hunsicker

that better? Is Oh, hi.

Paul A. Perrault

Little better.

Laurie Hunsicker

anything that Paul, line? looking other Carl, at how looks outsized. that in and the -- I'm of that Sticking expenses, $X.XX with be Is expense, we afternoon. thinking non-recurring non-interest about Carl, there category good should million, or the

Carl M. Carlson

I wouldn't in that. non-recurring there's anything say

the I they little of before. we're think going that's a but trends are that's of OREO to very unusual. some nothing seeing expenses, back supplies, and in that, something There small. outsized, -- entertainment what are kind of through expense those are Nothing not going were bit things travel

Laurie Hunsicker

a Okay. as about you look that. And little how are growth when guide, thinking you the expense further out, XXXX, in bit on

Carl M. Carlson

You're getting that a side. out far little on there

provides think us. I see market we'll the what

Laurie Hunsicker

thinking you that another is Okay. are about it how that? about the How way. Or I'll thinking -- costs, billion maybe are $XX you ask

Carl M. Carlson

Quite a lot honestly, think about we don't that.

too on that think that Durbin happen $XX when income, cross there's things -- eye see that, estimate. a that simple from manage an then, impact add the is $XX us to environment we about have understand And fee may much your -- framework. this impacts you very you that debit $XXX,XXX card an billion. And to It's that operating of of what at in have would impact point. costs regulatory of today, to don't current few most are the I the We billion it, on amendment

Laurie Hunsicker

Just change that correct? X% so cross cost core that to your is because terms fully in clear, this billion dramatically of the guide doesn't got X% baked; $XX necessarily thinking growth already about operating you've I'm

Carl M. Carlson

I wouldn't say fully baked.

be will dramatic. to there don't think think going it's cost, I but some be incremental I

Laurie Hunsicker

then, quarter, about both the in up? you That's the The stock at which helpful. to and point higher, think you. purchased step was And is you $XX do I at active this in How you Carl, were price Paul obviously third quarter pretty your guess but price million XX.X. buyback

Carl M. Carlson

we're growth opportunities have we our the and think with very capital currently. comfortable that levels I

stock consideration into buybacks So think all I that when with about the we board. take talk we

Laurie Hunsicker

Okay. Al; right.

that So point no here? this is price say why we're you

Carl M. Carlson

would share. publicly that Not I

Laurie Hunsicker

Okay.

Paul A. Perrault

tangible like to don't book We value either. dilute

Laurie Hunsicker

I you. hear hear I you.

Okay.

more at income. the much commercial question the corresponding Have fees, prepaid fees, one How was quarter interest X.XXX? net So prepaid on and top-line that last number? the

Carl M. Carlson

up So from quarter, were which million this prepayment fees $X.XXX QX. was about $XXX,XXX

Laurie Hunsicker

That's Okay. helpful.

How -- just the last Obviously about next in year? then that you little rate? should for How be quarter. think bit we about do And Okay. tax larger thinking question. fourth

Carl M. Carlson

currently expect XX.X%. We be full-year to rate the tax approximately effective

Laurie Hunsicker

for Okay. taking question. Great. Perfect. my Thanks

Paul A. Perrault

Laurie. Hey,

Carl M. Carlson

Thank you.

Operator

[Operator Instructions].

is Our next question comes yours. Chris, line the of from KBW. Chris O'Connell

Chris O'Connell

guys. afternoon, good Hey,

Paul A. Perrault

Chris. Hey,

Chris O'Connell

wondering sale about going on fee side. income thinking XXXX. forward Pretty pick those the Just I'm derivative the loan you just in wanted level are guys how and off the start for up lines. on gain big to

Paul A. Perrault

I'd large pull while that sophisticated nature its derivative Well, And say sometimes the for to it is more relatively take lumpy. us and tends the to those to connected borrowers, with together. by loans a income be

or The is reasons gain think in say. But back we QX on hard to loans of commercially differentials I'd I we do this. to activity our to estate it's if to the parts originate commercial outlined. loans loans we derivative We Both related a quarter-by-quarter see generate strong loans fees for friends for be us was to about it's number where participations sell it there where so I we optimistic pattern are and things. anymore, So of file. family, this is for simply sort in sale But that that year. don't and residential entirely continue real markets, in those here a sell oriented. of C&I you years, of entirely can exceptional you look that just rate

Chris O'Connell

Got Okay. it.

of So activity. loan-origination most both - And for circling tracking, part, kind just back

Paul A. Perrault

record a was $XX $XX.X Typically, $X.X This we're income. quarter final that million $Xmillion in the million in million at range. to

bit this quarter, bit -- think sometimes return lower pipelines and the to and And a the we're little sometimes higher activity. return back depending like But normal. a you saw to getting but little on I

Chris O'Connell

an PPP. to color -- sensitivity in on Appreciate the back the color. the core That's excluding rate Great. circling just helpful basis, the margin the a added around And hikes. then

guys after more it's core is you a stabilized going point margin, less hikes of see rate kind it any with it here? at forward or As where

Paul A. Perrault

steal bit that little me be floating pretty had on Let loans in unusual. large to to of derivatives one with end this. those quarter use a that order because he thin. say fourth have don't us We would I the rates was this Again, know pretty thunder some tend and rates, up his

had perspective, now that great than we drove me. right Carl might regular But in you fair answer we I'll question lower follow so despite amount that received let a actual there quarter, the rate from of we my had the if And the a originations, way. content in have

Carl M. Carlson

net very, us. the are you're But in our plus loans it's in of very with, true. loans, But bottom end the some the to had NIM -- attractive the at near-term. the to rate at floating large more are income That's of We which priced compressing begin time, putting the the day. to line interest nature

So that's all good.

parts, concerned, break quite the not all right? up PPP, -- it as I'll first two into So we almost It's far as being gone, PPP. of margin the the is gone. So impact all

have $XX we're largely the We to say? What'd million first projecting loans, satisfied be quarter. I PPP which during

Paul A. Perrault

today $XX You million. $XX said but million, is

Carl M. Carlson

today. you of -- can't It's the what million $XX the year. at $XX end end at them million the the is tell of it

quarter. And the be do largely that so we at gone of expect the end first

to for $XX there's the average balance figure an $XX in So million million quarter.

interest some have you coupon. So at X%

PPP that's of loans. then gone. million revenue $X.X about So associated with the And

quarter. that will be that'll little let's a So the nice of margin be crossing -- for bit a say, in the first

Excluding be curve. range the net rates to we're currently and that, of have QX nice PPP, the after impact steepening we the XXX a But see. the seen for margin of yield we'll in where projecting go

We're fourth at forward, in the that you're going seeing the you're booked So the new than part curve, forward. off if of are even higher doing because you just of curve a quarter. going the doing yield of were or little five-year getting loan something pricing the the better part bit volumes two-year benefit

Chris O'Connell

reserve you path on the the [Indiscernible] of deck, Day at you above Can give of color going X the ton guys forward? X% in well see [Indiscernible] the XXX a but level, that How level? the do migration Great.

Carl M. Carlson

keep We're I a going on continue on guidance economy in what's one think driven really on eye not and providing office we'll very because Omicron, might the the to going that and that mean, market. what anticipated and on it's what's close No by there. the

to reserves. see right the While I'm particularly now, now, going bad future we to when to anything it don't comes not right try predict

Chris O'Connell

time. the Understood. Okay. Thanks for

Carl M. Carlson

Sure.

Operator

line, have the hand so further questions We I'll no back. on it

Paul A. Perrault

Have to us a will And forward you look Jordan. with day. next all good for you again we Thank talking joining and you, quarter. thank

Operator

This today's joining. you Thank for call. concludes

disconnect You your lines. may now

Brookline Bancorp (BRKL) 27 Jan 222021 Q4 Earnings call transcript