- Earnings call transcript Q3 2022

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Operator

Good afternoon and welcome to Brookline Bancorp Third Quarter 2022 Earnings Conference Call. All participants will be in a listen-only mode. After today’s presentation there will be an opportunity to ask questions. Please note this event is being recorded. I would now like to turn the conference over to Brookline Bancorp's Attorney, Laura Vaughn [ph]. ahead. go Please

Unidentified Company Representative

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

and I'm comparison to pleased a Chairman reconciliation see CEO, release. please Perrault. Paul For to GAAP Bancorp's our earnings earnings, and introduce Brookline

Paul A. Perrault

per to afternoon, pleased Good thank our increase and it us or record you has the share and approved Laura. million everyone we $X.XXX to of bringing dividend, report a that I'm you, had today's per Thank to $X.XX for $XX.X call. quarterly share. earnings joining on X% Board near

third of X% $XXX million annualized QX. for interest our points from an XX increase loan X.XX%, margin was and Our grew quarter net basis or portfolio the

loan the which you more continue interest will Bank will activity prepare over to we in company's commercial at the close for in the who rise despite significant results The quarter quarter. deposit our continue transaction I rates. to PCSB Carl, and turn in and good detail. Brookline third now short-term the in fourth markets see teams to We both review anticipate will

Carl M. Carlson

X.XX%. you, points loan driven were in million margin well quarter year-to-date tax of a coupon this equipment In as partially $X.X million. credits increased of the continue total XX on loans as driven in a on a quality by million; $XX solid rose increased QX. Credit with impact decline impact basis energy losses million; in Thank QX million Commercial flat and basis were were or in for million, benefits $X.X during basis for expansion, million primarily the from leases September QX, loan slight basis quarter for by million. XXX the quarter. was for real commercial growth and credit net $X fees The -- losses fees quarter. by consumer prior loan Total than income This merger $X all renewable was points be due in XXX X million credits the $X.X million prior reserve we $XX less from the offset in average coverage growth, a Provision point by of in was at net loans portfolio finance up recoveries of million related Prepayment the QX, expansion to $XX charges $X.X Net Paul. to coupon weighted investments. originated margin reserve favorable helped and $XXX,XXX combined million XX to the interest from financing $XXX at The and $X points. basis The loans the $XX quarter. XXth. the were positive XX average trends deferred of revenues million, to weighted points of commitments. $XXX,XXX loan basis provision loan higher up of to million, These growth points estate classes. $X increased and and allowance $X.X energy million, quarter, $XX unfunded third asset is resulting up margin

Increases the from and Non-interest rates opportunities. relatively in million accounts QX us to have with potential continue of quarter, third position. benefit CDs were and due During to interest-bearing to deposits represent in declined flat moderately deposits higher-yielding liquidity $XXX bearing other XX% flowing deposits. our asset-sensitive short-term

September our and forward next increase as X.X% the months. in a reflect XX income Assuming curve net interest the XXth, a sheet simulations balance of flat over

Our historically XX% a on product simulations beta of deposits. based reflect weighted

comments, a Board X% up share, for mentioned, now and XXth approved The Paul of our to questions. the yield representing dividend yesterday's quarterly per concludes formal closing be of on open X.X% increase will November XXth. price. will based $X.XXX and This on As we stockholders a paid November dividend on record a

Operator

[Operator Instructions].

line is The first question of the Fitzgibbon with Sandler. Piper Mark from

You may proceed.

Mark Fitzgibbon

forward? with tax just good rate, you going rate you forward? afternoon. good help is that how kind have, the credits sorry, you wondered rate and if that and XX.X% Thank a going given change Carl, forward XX tax starting effective rate could I'm of I run us those the going energy

Carl M. Carlson

Yes, Thanks, very good. Mark.

as up, was around rate XX.X%. low-income to We're credits be housing tax truing we the were year, some of of tax third the quarter. end lot for the investments a in there. the and taxes expect activity reviewing QX, So it had of effective We we there

those that I decided year. with that was We a over So that financing could tax it. this have on years. seven it. tax slight take to had impact credits big taken credits a did them had associated the But we impact lease

impact year-to-date get million on those $X.X recognize did that to it was so this tax right we're we was happens as So true-up, the benefit cash this a year, thing a do. on them And to that able our do form the it year, -- -- -- a we true-up.

benefit of a still little we'll So have in QX. bit

estimate I be to now effective have would be clear QX -- right is on for that that. That tax want will impacting not not just for will XX.X%. our we So rate XXXX,

Mark Fitzgibbon

So the around something tax XX%? would go back to rate

Carl M. Carlson

Correct. Correct.

million I think we guiding about $XX.X PCSB with the acquisition. were

Mark Fitzgibbon

Okay. Great.

Secondly, funding in really you chart would the beta But deck expansion thinking put about additional curious, in I that deposit was you're of how magnitude be first, helpful. margin XQ? and slide of that sort the

Carl M. Carlson

Yes.

points the betas quarter go and moderately and it So XX very it's of basis better QX the XX this then on quite expect next of flows in to anybody's year. up expansion deposit strong margin We points. do to basis frankly, XX But another guess, funds.

Mark Fitzgibbon

the on you of in acquisitions to of that of guess for be to I New more the And closing kind are bulk the Okay. deal? lookout guys then, likely market Paul, curious, Metro York PCSB in banks I'm up post smaller

Paul A. Perrault

there's to markets, things that in a can that I Not But what's them Mark, more their that, in going out to attention. on performance. improve Putnam certainly all figure of enough a bring lot and of certainly We necessary is we'll think difference. keep our will but And pay our do we big to -- as more as we we we think and eyes open, area. we ears do make

Mark Fitzgibbon

sure not Bob the The and Rose Okay. I'm the had, on I he's line, if line? last question on is

Paul A. Perrault

here. not no, No, he's

Mark Fitzgibbon

Okay. kind of... I was

Paul A. Perrault

way to you on as may He's his semi-retirement, know.

Mark Fitzgibbon

knowledge get a perspective wealth did because his he credit. had I on know. such thought just of thank I'd And you. But I

Paul A. Perrault

Mark. Okay

Operator

the question The is line Point. you. next Hunsicker Laurie Thank of Compass from with

You may proceed.

Laurie Hunsicker

rates. you, thanks. big seen obviously hi, pretty Carl, Yeah afternoon. us with a Maybe and just Carl, Paul about in move help good think starting you can -- we've

where interest rate the helpful? like or mark with gone us Just what like or you will whether the have would with Thanks. PCSB rate both, color pro what intangibles the the merger, marks can any forma share look be look

Carl M. Carlson

Sure.

have announcement, all pre-tax the we the on we since acquisition. estimating a substantially portfolio moved know, were $XX the rates million announced investment mark we As a basis. on At

put just you their sheet, is has out the on are see PCSB investments balance can think today. and earnings value their and fair what those I

And estimate let's in same sense, about securities that we first the different. more, similar mark than put rate durations the a the on portfolio, securities XX% not mark in XX% materially as portfolio. the worse -- when so gotten loan has would We on it it way, the interest about that

you the I -- in than But if closing. Offsetting that they would no months from overall just more of mark the an be that's value the deal. it would far price what be that the being of that deposits I today did booked. so don't would Offsetting really value And know intangible than more offset are ago. naturally. worth yesterday, what basically or at see on will is there. the point, six standup So goodwill you Deposits exactly were the -- think today that what it change

Laurie Hunsicker

remind terms us the help quarter crossed also going maybe billion. you Okay, right? what us, the $XX great, forma you then Can XXXX, in Thanks. you starts of impact And thanks. of with guessing then pro look to is just fourth PCSB, like I'm that, in that guys and can that that's Durbin understand

Carl M. Carlson

understanding our as goes starts six the Durbin after my impact So, company billion goes, $XX is it the as the far year-end, months over mark.

still we deal do So do closing assume in we anticipate QX. -- this

we year-end. think XXth November happen get and that now right to for will close we'd approval, get and I does, do by about it approval we assuming by So to have

just X, income Durbin impact estimate Durbin to related our XXXX. annual this so to $XXX starting in be $XXX billion impact the $XX will an us We the at over million on year-end on annual impact and July million impact to basis. We be the would

Laurie Hunsicker

anything on income. And baked? Okay, the fully of or spend, that terms in then already is that's there expense non-interest around

Carl M. Carlson

our definitely It's and have there. we'll generally headcount -- here added

Some already preparing got for already of on it. it we've staff

you... that there be materially say would Paul, I nothing anything that to So time a anticipate big impact. we this is at

Paul A. Perrault

Good. No.

Laurie Hunsicker

thanks Great, so much.

Paul A. Perrault

thank Laurie, Okay you.

Operator

next the line of KBW. The you. Chris O'Connell Thank with comes question from

You may proceed.

Christopher O’Connell

Hi.

the around are that XXth Just come any the approvals on just to following update on in need there discussion, and the where at? by guys so, on you PCSB or you process up given PCSB -- November

Paul A. Perrault

have Well, satisfactorily we're to the and Fed the the of Washington. It's their raised awaiting of approval all questions been understanding our that staffs. and answered out

the are literally just So by we waiting phone.

Christopher O’Connell

also it. then what given be in and as And Any the PCSB and merger the on come environment. rate update financials on will impact Okay. margin? announcement to just their the Alright. change how the I they've since their got in

Carl M. Carlson

about to the when I'm going think parts lot not margin forward. that opine moving right a you going There's now. of on

the loan accreted kind of rate marks get mark portfolio, the investment back on the portfolio and interest they portfolio investment the on highlighted, Laurie just -- As would in. the

interest as business. quite Naturally, you nicely. a look on look can Their through you what's on really we quarter. comes that forward. So as with the quite the in core has at margin the did basis points frankly, And expanded they going margin income, and significant core, see, the impact XX

and performing, we're certainly they're it's how happy with we're how So very we're -- happy with performing.

Paul A. Perrault

couple good A good of -- come companies things out get that. of

Christopher O’Connell

Yes. I then And outlook. on -- the the as the color betas appreciate margin and all

what competition overall growth between is you customers guys being the deposit how from products of forward? Just kind moved terms the how and thinking of in and flows bank seeing about and between around even flows are are within outlook going products,

Paul A. Perrault

I'll they in liquidity as have like, commentary. or so was and mentioned But let what short portfolios. I very rates would start vehicles that from those aggregate against I'll comes that. large of rates And of customers very terms have flows, into Carl lot a look really mean, non-operating customers more treasuries that of we've much in major -- buy dollars the cases when like of I a other detail. take lot rates bit up liquidity a get their deposit short gone the ours But lost it and in the say little

just that maturities bucket in The the has a down core coming time. other reduction for have CD big long is seen that been the

seeing operating So liquidity we're losses. products. not all We're customer of the out of not company move the seeing banking their average

out that future think played start the there. near I in So and all the and pricing we'll from have to in this are grow involved Carl, you will that.

Carl M. Carlson

Yes.

how have comfortable IOLTA pressure is in IOLTA and Paul do and treasuries branch -- in just So going lawyers -- help when some what discussed dive into we the had of the don't we details funds just with are the branches that the on decline regards. accounts out. But and state. those could well CDs, nothing just just interest for as of timing... conversations the lawyer those folks actually bit Clarendon accounts little is escrow to in and accounts, a both It work into by we on in Private has in the rate that as if this, and rates. fixed to And as the a a side, are, that clients liquidity you flow you on that's them very deeper continued with saw It's on And we've into dig high are that the dive significant investment accounts. into significant folks basically know

Paul A. Perrault

[Multiple Speakers].

Carl M. Carlson

is the escrow Whatever going in world. on

flow commercial out happened accounts. so into be we looking XXXX big that's may six of of a building. market and -- saw -- just an I real nationally. as a building estate do our And thing. have months wait you a program, [ph] And another what and at know our of this savings very not XXXX locally They we saw well we're thing. to do buy successfully, on flow funds money into programs, saw trust it's usually It's as And a we selling And to interest accounts about that. funds put then which big that we folks XXXX to XXXX or rate shift

And XXXX. it so was going on, what's just

account higher that's So rate of account because It as came market a a customers the little bit our more It account. clients, it a do they what product these have rate money little we was saving savings this. funds want. really slightly and product went into when a was for out

And there, deposits and need. attractive the that continue we very to so pricing, serve are

how DDA Fed on still And solid. the by us. will liquidity the and the see of will markets. tightening as is growth all our impact the front activity squeeze in Paul in time said, Continue commercial and So to very customers much tell

Christopher O’Connell

And lastly, the to as around just stand-alone an fourth quarter. quarter expense control growth then expenses, the kind you're good about on on of to just thinking this Understood. wanted on touch a pretty all I Maybe basis? update how

Carl M. Carlson

than a quarter. little $X.X up, which Yes, expenses actually expenses, And side pension operating did bit. little I million to little going the the have contained, in and We side. pop million I have you did $XXX,XXX expenses $XXX in higher benefit overall, stop. get on do merger bit rates of due continue our in just work being are and business. about go but invest were up expect rates QX. that's down expenses don't to We about to actuaries well is how we a to the change back a on that since But benefit think

Christopher O’Connell

taking all Great, Thanks my I had. that’s for questions.

Carl M. Carlson

thanks. Okay Chris,

Operator

at pass Instructions]. the There [Operator you. Thank questions to Paul I over time. would are for to now no remarks. like call additional this closing

Paul A. Perrault

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

Operator

concludes call. That conference today's

You may now disconnect your lines.

Brookline Bancorp (BRKL) 28 Oct 222022 Q3 Earnings call transcript