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BRKL Brookline Bancorp

Participants
Marissa Frerk IR
Paul Perrault President, CEO & Director
Carl Carlson CFO
Mark Fitzgibbon Sandler O'Neill + Partners
Matthew Breese Piper Jaffray Companies
Collyn Gilbert KBW
Laurie Hunsicker Compass Point Research & Trading
Call transcript
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Operator

Good afternoon, and welcome to the Brookline Bancorp, Inc.'s First Quarter 2018 Earnings Release Call. [Operator Instructions]. Please note, this event is being recorded. I would now like to turn the conference over to Marissa Frerk. Please go ahead.

Marissa Frerk

Brandon. you, Thank and XXXX everyone, Brookline Inc.'s Bancorp, Good Conference welcome Call. Quarter Earnings First afternoon, to Yesterday, our brooklinebancorp.com, Investor Relations filed we on the page available issued with of earnings release, our website, SEC. and been is has which the Brookline will and Paul by Carlson. executive team, This afternoon's hosted Bancorp's call be Perrault Carl

Bancorp. differ call and to Report disclaims forward-looking these assist Bancorp results future publicly unduly begin, and intent condition, and those as should operations any understanding results press references only this are relying forward-looking Actual otherwise. in Brookline you upon actual may with identified measures statement, of from to our Annual in cause measures may financial Brookline may against be results information, Bancorp's future new that differ Brookline not results results our include actual on we to statements. most in during any any made Before events note, respect statements Factors forward-looking to or predictions. release. of made non-GAAP business contain you cautions please to financial response Any of or and and recently our statements XX-K, Form trends, filed presentation XX-Q the relied whether to update performance this forward-looking on earnings

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

Paul Perrault

on lead loans time, Commons closed Bank, $XXX subsidiary, the had was million results our my a accompanied acquisition we merged in I'm through by Bank March At all. Chief X. Officer, that to our We financial afternoon, First $XXX today walk deposits. Good million first proud Brookline productive adding say comments. of into who following Marissa. and you Carl of First Financial Thanks, our very quarterly I'm that quarter. Carlson, will Commons

quality; XX.X% in and, report Yesterday, earnings of strong deposit tax lower margin of to per dividend. the asset XXXX. quarter rate. to approved quarterly organic We of course, first record our another growth; increase pleased an expansion; our are or and reported loan million improved the for We quarter Board of $X.XX earnings share $XX.X due of Directors

charges, of million the been $XXX million have securities or acquisition Loan organically. gains to $X.XX share. Excluding would First the I million $XXX and million $XXX balances grew million merger the Commons by the mentioned, Commons net $XX attributable per income Deposits organically. million impact First $XX quarter, as and from and $XXX $XXX in million, acquisition grew

of one quarter We dedicated have now region's employees great Brookline turn commercial the results detail. review customers, group more over in company's enterprises. first our will serving Carl, Bancorp will leading making to a banking you who of I the

Carl Carlson

Thank you, Paul.

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

QX. in compared with Net the interest $XXX,XXX, securities the Purchase quarter. impacted points down negatively $X.X in $XXX,XXX down items first quarter. basis points. increased included quarter, the asset are from the decline and from was the by the $X.X quarter, margin for interest-bearing income the X first basis income $XX,XXX fourth were to net quarter-over-quarter Combined from quarter million quarter basis these And million expansion quarter fourth the margin points driven gains. prepayment for deposits Noninterest fees to margin in increased $XXX,XXX first the period, was first and increased million this During $X.X fourth of X as X the $XXX,XXX X.XX%. interest cost in growth accounting

activity. sale $XXX,XXX down was lower loan Excluding income security gains, noninterest due sequentially, to primarily

asset credit provision primarily quarter and $X.X risk by improvements for $XXX,XXX, net lower million quarter, in assessments. fourth Our and charge-offs the driven overall decrease was from a for quality the of factor losses

of During $XXX,XXX the year-end. $XX.X basis quarter, on nonaccrual down at or loans net basis points loans XX percentage end total basis annualized of at XX million loans basis X The from the were was charge-offs as and loans, million $X declined points basis. to on the or an XXX a quarter, points points allowance of

record compensation annualized basis the quarterly on on based yesterday's was end points First acquired Paul XX basis of Excluding in-seasonal dividend $X.XX operating a Centre closing price quarterly as mentioned, the Net versus XXX driven associated systems on of loans in yield the XXXX. Newton dividend it by approved per or million impact X back QX And year. merger increased $XX.X in over on the of quarter sorry, and to originated company's May the for that, and locations branches which concluding from for noninterest $X.X Wellesley be core quarter The XXX share Paul million, XX. expense will X, $X.XX the income of increase $XX.X turn loans, $XX.XX. percentage costs month for XXX Brookline We're allowance existing to The share. of paid I'll acquisition an the the of per the I'm -- share, anticipating May costs; June as shareholders costs; fourth to on converting was points and $X.XX to with Bank common into X remarks. the represents With Bank. board Commons consolidating an March per at million

Paul Perrault

Carl. Thanks,

building of positive we year. look We have to the the very nice a gotten off rest XXXX, to this momentum throughout for start on and forward

open up for we questions. will Now it

Operator

Instructions]. [Operator

comes from Sandler Mark with question Fitzgibbon first O'Neill. Our

Mark Fitzgibbon

of And we that, sized the normalize Carl, impact have while to see the a guys in second on a with sort it's but are provision First, likely curious know provision, I CECL before if connected the was sort quarter? implementation, bit the you potential yet? also of

Carl Carlson

to do answer. We impact the easy not is have just of pretty size answer CECL the the Well, yet. CECL

more we'll XXXX and getting and process, that better in of more might that of of like. continuing looking idea look a that what be are We

this bit. had growth, very had the very in was improvement it had We low far quality organic assets, As while we continued loan normalize strong I to of provision, charge-offs quarter. very asset nice. as our all which would And a we of expect

Mark Fitzgibbon

Okay. a And about remainder this you thinking Is still thinking are then sort how in for you're rate, year? it the rough where tax said think the you'd of was about effective that range. past, the I XX% Carl? of good

Paul Perrault

Correct.

that expect to forward. be going We XX%

Mark Fitzgibbon

grind the -- increases, to rate then to And couple net Okay. interest a with that higher? couple should with more margin assume continues slowly a respect we margin, the

Carl Carlson

great question. a That's

to margins suggest a to that the the little flat on bit spreads a well also higher, bit pressure, we side, on also modeling be competitive it know deposit side. loan as and on Our of both but there's quite

so So, we've far, been ahead running that. of

portfolio got I or So of right can good We've or flat good down to basis It our would points. reprice. the beta But good. a very -- continues would X say, X up a been size way. that to has be now, I guide either

Mark Fitzgibbon

just the then pipeline have do you I'm you And but is average for this average on your the sense at comparison today fingertips, the have Okay. if to a in sure the rate what on curious, portfolio? not

Carl Carlson

done that's No, are have basis. I don't. or And on don't. that course, those usually, I spread of don't negotiated -- that. -- something I being a No, things

what now, depends we've portfolio but on all So been over booking been everything to has rates. happens the right curve, our it

Mark Fitzgibbon

see of then best about of of opportunities And best Okay. you which in feel question, do the macro I'm sort Paul. you guys where sort a curious, the operate today? geographies you

Paul Perrault

you I to Ipswich think And out small just is Boston have all mean, sizable, because First a pick but I them, continuing on some Metro they're Bank pretty little showing But very seen bit. good the stuff even marketplace. the for gains looking sort scale. in we've of Rhode Island. our good of of

Operator

Jaffray. Breese question next comes from Our Matthew Piper with

Matthew Breese

picked a couple outside of bit a quick quarter up growth ones. typical quite this range. loan Organic the of Just

quarters to wanted the then attribute you come? level the sense what -- a for the in the new is would level to Just million get you $XXX to. that that level, hope new for And

Paul Perrault

as $XXX an the view outlier. of wouldn't sort I million

I last didn't latter very has in slipped of reflection is more good. it, this as think was And strong. that is very underway year, into a get it's We're it finished kind last been, of the over deals about it the very feels think happy it year. that but momentum part year I which certainly of like

I And had this think year-end, if the if flipped run you in from we $XXX more go deals a tends back rate, will. our to that a quarter just which I were or two, as mentioned. you one range, over million few be roughly

Matthew Breese

Okay.

you million pretty a feel good $XXX like is So that range run still? rate still

Paul Perrault

so. think I

Matthew Breese

flow conversation deal then M&A behind recently. and curious, the just has more how like And one Okay. landscape you, been got looks what going you've

Paul Perrault

change, than Well, I. more that colleagues my that really would your been know that But say I'd I much view. in there guess would about hasn't

Now be but I the pretty loop, quiet. not may really it has right in been

everybody think is because great changes. all tax the of conditions. showing enjoying I increases We're rate

So I don't anything imminent out there's there. know that

Matthew Breese

Understood.

bit Carl, point Or X number lower? quick more little basis expect one changes just to accounting, purchase should a one. we on Just meaningful there? any grind coming that even typical for

Carl Carlson

QX, and it's so purchase be we're around now, I deposits -- Right impact to some between give it for related say on projecting loans I'll QX. about $XXX,XXX you to would accounting. insight

be years. about have be we'd would about quarter. side, on $XXX,XXX over And you the the lot X loan taking the be that it'll And the then amortization There but purchase deposit side, a on over transaction, X accounting in this years. CDI on accounting So purchase a wasn't the the impact. of CDI side, then about

Matthew Breese

Okay.

And NIM outside your so guidance, that yield, of the correct? accretable impact on core that's

Carl Carlson

Yes.

no, what? [Indiscernible] model. I'm those know my in All numbers No, sorry. You it were isn't.

I'm So sorry.

included. So that's

Matthew Breese

Okay.

should the we of points two X.XX% yields? first reported that and that accretable that, quarter minus So within basis as off or NIM, work plus

Carl Carlson

You got a it. question. It's good

Operator

comes Gilbert next Our with KBW. question Collyn from

Collyn Gilbert

look expenses the Carl, on cost question, and for to of out a or going so kind -- -- First phase in quarter saves we the the Commons. you how on are Just next as from over just

Carl Carlson

Okay.

said, the cost quarter. we savings So close the once as we'll seeing I next branches be X

we're next of to that So we'll we're basically savings of have cost get the quarter in and cost full quarters this X then the month going of rate and year. fourth projecting, run third savings

basis, where this from overall finished expenses quarter, have I going do down an on we So next quarter. up

Collyn Gilbert

Okay, okay.

sort quarters side, of but the how then And the fee there's that's there, thinking and broadly, as that out? fee line. the do you the -- about Okay, helpful. I go see fee in you're some just volatility on know how trending -- just

Carl Carlson

up the basically line of we depending derivative look be are. I a quarter, and where fee income, it well can down as or on on $X.X at million the that's as loan sales the activity probably level roundabout but

Collyn Gilbert

and there maybe deposits. for And deposit you're growth composition about your Okay, deposit loan growth, mentioned where generate as seeing curious goes okay. the kind how just the in efforts expecting to from focusing you come but the what you're of new of year outlook on growth your you're

Paul Perrault

the to think retail word and growth you the management part a continue customers, we derivative, year. be right services redouble will probably much think and nonprofits go represented along in mostly I the future cash comes our will, And industry new from that use will of firms the But as businesses. is and those professional past treasury deposit lines. symptomatic and whole through efforts from in that existing this now. our our to We of commercial I if see partly

relationships. gains and enterprise to So transactional doing seems better core get we much everybody in be commercial that, these

will that continue. think I

Collyn Gilbert

modeling Okay, okay. betas? outlook, Carl, of your as are you're what for kind And deposit assuming just, you NIM

Carl Carlson

About XX%.

Collyn Gilbert

that full the year? for And Okay. is

Carl Carlson

that's Correct. we... when forward forward, move moving as we Well,

Operator

Instructions]. [Operator

Our Compass next question Point. with comes from Laurie Hunsicker

Laurie Hunsicker

many to how comment, on first were wanted follow shares issued? Just exactly the

Carl Carlson

press X,XXX,XXX. the Exactly issued? on So release, right it's

Laurie Hunsicker

Great. that. I missed

can taxi, you and your on update your nonperformers? just us on question, Second the balance, give an reserves

Carl Carlson

that's is portfolio about and say -- million sorry. that There's $XX about that's million almost almost would reserves, performing, $XX.X taxi $X.X million $XX everything's million; million of $XX -- nonperformers Total million I is -- nonperforming, million; $XX.X $XX performing.

Laurie Hunsicker

$XX.X reserves? net million that $XX.X of correct? reserves. and you Okay. It's And have million, $X.X million, in that's of net not the Is

Carl Carlson

We have million. million on $X.X the $XX

Laurie Hunsicker

perfect. Okay, million? $XX the On

Carl Carlson

Yes.

Operator

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

Paul Perrault

Thank all you, you Brandon, and for joining thank us.

will with talking We you Have a look to next again quarter. good forward day.

Operator

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

disconnect. You now may