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BRKL Brookline Bancorp

Participants
Marissa Martin General Counsel
Paul Perrault Chairman & CEO
Carl Carlson Co-President & CFO
Mark Fitzgibbon Piper Sandler
Laurie Hunsicker Compass Point
Call transcript
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Operator

Hello, and welcome to the Brookline Bancorp Third Quarter 2021 Earnings Call. My name is Emma, and I'll be your operator today. [Operator Instructions] This call is being recorded. [Operator Instructions] It's now my pleasure to hand over to Marissa Martin, General Counsel, to begin. Please go ahead.

Marissa Martin

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

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

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

Paul Perrault

you call. had us of $X.XX good Marissa, joining $XX.X million for everyone. per we report for to or share. earnings Thank today's another earnings pleased of Thanks, afternoon, solid and quarter I'm

and expanded our slightly grew, X.X% recorded million CARES The release dropped modifications on satisfied reserves, as the $XXX loan core of non-PPP asset have quality environment our portfolio to our million loan about under ratio margins now PPP QX. points our the or were a loans a portfolio improve. loans. million. basis $XXX XXX $XX $X.X core We coverage reserve to of In QX, from loan Act grew continued and million As economic of and

quarterly optimistic Board I'm be dividend. to the into as $X.XXX this this share. to was second also Trends final year year. our increase to remain the and per in dividend increase approved to we we report pleased quarter year Our be the pipelines X.X% in continue our strong. and of continue This a very go next that into positive,

Private. Rhode Clarendon Bank will Bancorp and are now closely a investment new working quarter and Island created led Clarendon advisory and the investment affiliate with over boutique Carl, results. of firm announced, wealth They who foundations. called we company's a banking and recently have White. to previously comprehensive management Private Brookline As Brookline is families, Bank Marc third services to endowments I to will review turn individuals, deliver you private by

Carl Carlson

On income by a Thank $X.X than this Net we've million and you, comparative than $X.X PPP quarter of statements. Paul. loan last was with Noninterest Performance sale last Slide offset summary solid QX. and lower quarter a margin, ago. loans QX, million $X.X and income expenses. Expenses were better in was revenues OREO expense by to higher X, million lower driven $XX.X than to growth core year. provided greater due on related slightly gain was million primarily the flat greater year

basis points. Page interest our prepay a Overall, during of from X, as to As million in to $XXX,XXX Home $X.X borrowings quarter, fees margin net well income XXX decreased decrease improved the revenue interest $XXX,XXX illustrated in the prior as Bank net quarter. on driven Loan Federal by PPP-related

the program of provided we loan net the of on bottom On estimated Slide impact margin. X, the interest the PPP

summary basis linked balance PPP points. X Bank Federal the basis impact and points on and Please Home follow X second improved of the to points quarter basis sheets. prepayment basis was to net impact prepayment income the for our a interest of third XX quarter margin margin Adjusting penalties Home Assuming no quarter. X me the basis XXX the basis Bank in versus PPP in Loan cost interest Slide fees, funding, to net points on margin points. contributed Loan XX of the interest Federal The QX comparative

and cash declined QX. Loans billion finished quarter from $XX $X.X assets, million. down in Third million, down while $XXX combined million securities with $XX were

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

prior over declined portfolio I a the loans by quarter, our points during million in $XXX the weighted XXX driven in basis As million the originated quarter, basis quarter portfolio basis at on average decline non-PPP we coupon points grew at XXX core XX. PPP coupon million. loans of a the from the weighted mentioned, $XXX million loan X as The to average overall $XX core points. loan September $XX portfolio third In dropped

reduce million experience Brokered end continue solid deposits borrowings. totaled outstanding the and declined to of We million growth, and deposit to $XXX the quarter. $XX excess and deposits brokered liquidity using are we at

to accelerate snapshot ratio net of of remainder the Slide into the loan strong unearned be loan-to-deposit and or saw loan deferment life fees. on a was XX. Slide end we are million of a continue the provides remaining banks. each of of small forgiveness, that program the the over loans a quarter, PPP for perhaps XXX payment $XXX XXXX. of we X expect September at status X, We loan providing to just income had of activity. into On million deferred loans Our activity our $X.X outstanding, year, remains PPP we satisfaction. under slipping balance our the of At recognized the with approximately at fees the XXX% Net

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

an a policies requirements to completing targets. X.X% capital or as regulatory At the of XXXX. XX, our buyback all XXX,XXX had program shares internal $XX Slide be and end well dividend approved company No on were The a the common share on buffer million XX. per well-capitalized basis, standards. and approximates January the Board concludes shares paid the $X.XXX in of will Paul. of payout. On of the million authorized increase $XXX dividend quarter, QX. to purchased history XX provides quarter, regulatory to X.X% X.X% purchased on November during in the the XX also a stock shown I comments, QX we payout and own well operating quarterly record back as our This capitalized, annualized on formal be turn Yesterday, exceeding yield. continues my it Slide to of November to regular company our As stockholders stock XX, a

Paul Perrault

Rose, joining now up our session the And for is we Credit questions. Carl. Thanks, now Chief open Robert will for And Officer. us Q&A it

Operator

Sandler. Fitzgibbon [Operator Instructions] Our Mark from comes question Piper first from today

Mark Fitzgibbon

on looks like? Sort curious those sketch the how what of plan How Clarendon likely I maybe some you to big kind out even, sorts be? rough Maybe could people, the was of Private? break business of many time things? is if this of details to

Carl Carlson

Sure.

currently have X we about So employees.

getting strategy. really seed off a in versus as it's So the here fourth kicked this sod We've about quarter. talking been

business. starting growing it this think an market we're in from in nothing time So excellent to it, for the do do We to we're us. it's right and

add to hit have with million the going time way. grow assets along to do some up. under until take we'll it's we And that around to to X approximate be We this build breakeven -- we $XXX $XXX people expect we years. to million so point And as within management breakeven it to

Paul Perrault

very These this seasoned in this area, are very, people Mark. in business,

known. they So very well are

Mark Fitzgibbon

some do from feel you the to guess I'm deposit then like And have push on curious, front, costs are they separately, I deposit room still today? Great. where you Okay. your down

Carl Carlson

quite through frankly. done bit little, portfolio. We've a Very quite CD our

basis to around The of have XX point on next XX the range. million points or repricing that are basis sort things XX quarter. we'll about that coupon down We $XXX is price so, and in in

So think there's largely at of that little point, exhausted this on we've a that. side. bit room But I

Paul Perrault

the sector, aggregate we good cost which is growth continue some funding. in I'll add of DDA the helpful see just that pretty to in

Mark Fitzgibbon

seeing share like, Okay. And you as what the look much? pipeline in on a does out and average And could easing us standpoint market of competitive maybe kind wondered the the rate? I there what commercial lending from if pressures up your with then you're side,

Paul Perrault

things had on of Well, down bit going has the we've here. around situation calmed competitive where number meaningful probably a M&A a

distracts certainly people. that So

it think so feels And quite it's and competitive, down I but been. dirty it had still not as very as

at. I very originations is think were Carl mentioned what Pipeline strong. the

Carl Carlson

strong. in going XXX basis The of the right X% on mix on points, around rate. given was and depends that's from that down quarter. is any the that The And here. very But coupon see quarter. million pipeline $XXX that -- originated on don't course, We that all I much

Paul Perrault

didn't payoffs we slowed similar previous And but we as many in in more, we as saw QX. And it that did see quarter, was in level think, I down quite a origination some QX. as the QX

Mark Fitzgibbon

pick to maybe strong maybe or to or lastly, then even of up, have if we terms releases reserve do sort growth loan obviously curious Great. get reserve really of really guys in again? another coverage, before is X starting provide to And you reserve, but we I'm quarter X start see a the

Carl Carlson

say adequate I'd reserve that XX, Well, Mark. our September at is

Operator

Hunsicker Point. Our comes today next from Compass from question Laurie

Laurie Hunsicker

forgiveness Carl, you dollar I'm I'm guessing a just me the I'm can have PPP million. that hoping in $X give number? of it's you more the amount quarter? just that actual around actual hoping

Carl Carlson

fingertips I second. have at here. One that my

Laurie Hunsicker

also maybe Okay. Great. go ahead. And -- then

Carl Carlson

during I interest recognized on that PPP So we interest to of of, had quarter loans. million say And income fees the deferred $XXX,XXX $X.XXX was that. were on want income

loans during that's combined, the So of PPP the contribution the quarter.

Laurie Hunsicker

have remaining. million that on prepay I And do see Great. And number? Okay. fees, you $X.X then there's

Carl Carlson

I sorry. didn't hear the I'm question.

Laurie Hunsicker

Prepay fees.

Carl Carlson

Prepays million. were $X.XXX

Laurie Hunsicker

Okay.

Okay.

want And just comments of of some together. sort I so to put your

funding in deposits guess, continue how the out. core It but to really the on the we're you anywhere. that margin come your this side CD looks it book of, we terms PPP looking referenced go like and certainly, at down, play I see As can't you see

So thinking head into margin how out XXXX? as we we about should be

Carl Carlson

excluding a X.XX% going moving the out the I when X-year bit been rates to impact, there's believe at on have little recent see what that move Bank that margin look the consistent forward, curve, course, broken yield the Home there range. fairly you the to moving We of excluding that pieces it would and the in So a and of PPP, X-year reflects I've this. higher. is, be Loan -- Page in Federal lot But X,

we next X.XX% X.XX%, So X.XX% the plus the margin do or for in year. see range

Laurie Hunsicker

Okay. And That's helpful. then...

Carl Carlson

to impact be clear Excluding I that. PPP. of want on any

PPP. Excluding impact of

Laurie Hunsicker

all $XX be there that through all The really Correct. next was year, number. Again, approximate million that And number, this done the million need repurchase shouldn't -- Well, completed, went PPP I you you quarter. so quickly. Correct. an share $XX right? much

this hoping Just that share me quarter? count could repurchased that give was you

Carl Carlson

XXX -- XXX,XXX right around shares.

Laurie Hunsicker

XXX.

right, then And was done I am Okay. all this actually quarter? million $XX

Carl Carlson

The Correct. $XX million?

is average little a under $XX.XX. the price So

Laurie Hunsicker

Okay. then, Perfect. seeing increase. buyback thinking about Love a dividend a And you how refresh? Paul, are

that think how about So we here? should

Paul Perrault

mid- of core targeting capital growth a to helpful grants sort not we build maybe the earnings I'm to we equity. payout Carl in and so. a enough that single-digit or opportunistically sort We've ratio environment. high The operating more sure see to do we I I of of for is tend can of in follow. contained been This XX buy annual is like if normalized count because keep sense. the that share buyback

part management. it you capital all Carl, answer, So of to too? kind if was of want

Laurie Hunsicker

question. approaching -- on there's a up when it last We're Can And where Any Can next currently? this think us about now us marketplace. are a M&A. year? how quarter lot last you from you're going your Just about you comments? help in you we into help about chatted think

Paul Perrault

middle a are of our certainly that, the beyond that, maybe can market, of ear which probably happen in and to advantage of we And people the our people. We Well, ground. talk keep have in the now any that longer we next than both to people mean, year, kind customers, bit between disruption little thing. will take planning and I to

any M&A pursue We objectively will reasonable opportunity.

Operator

have currently questions further today. We no

remarks. back So the to I'll closing some Perrault hand for call Paul

Paul Perrault

Well, question-and-answer -- guess. this I concludes session, answer the the

joining look So thank again we you and to you to forward for all, you, I'd talking like Emma, to next thank quarter. just And us.

Operator

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

You lines. disconnect may your now