Brookline Bancorp, Inc. (NASDAQ:BRKL) Q4 2023 Earnings Call Transcript
Brookline Bancorp, Inc. (NASDAQ:BRKL) Q4 2023 Earnings Call Transcript January 25, 2024
Brookline Bancorp, Inc. isn't one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).
Operator: Good afternoon, and welcome to Brookline Bancorp Incorporated Fourth Quarter 2023 Earnings Conference Call. All participants will be in 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. Please go ahead.
Laura Vaughn: Thank you, Emily, and good afternoon, everyone. Yesterday, we issued our earnings release and presentation, which is available on the Investor Relations page of our website, brooklinebancorp.com and has been filed with the SEC. This afternoon's call will be hosted by Paul A. Perrault and Carl M. Carlson. This call may contain forward-looking statements with respect to the financial condition, results of operations and business of Brookline Bancorp. Please refer to Page 2 of our earnings presentation for our forward-looking statement disclaimer. Also, please refer to our other filings with the Securities and Exchange Commission, which contain risk factors that could cause actual results to differ materially from these forward-looking statements.
Any references made during this presentation to non-GAAP measures are only made to assist you in understanding Brookline Bancorp's results and performance trends and should not be relied on as financial measures, of actual results or future predictions. For a comparison and reconciliation to GAAP earnings, please see our earnings release. I'm pleased to introduce Brookline Bancorp's Chairman and CEO, Paul Perrault.
Paul Perrault: Thanks, Laura, and good afternoon, all. Thank you for joining us for today's earnings call. 2023 was a challenging year for the banking industry. We had a very productive one for Brookline Bancorp. We started the year with the successful acquisition, management transition and integration of PCSB Bank. Mid-February, the systems conversions were completed without incident and the synergies identified were realized. Then in March and April, as several banks failed, we were able to assist impacted customers in our markets as they navigated the significant near-term uncertainty it created. In a volatile interest rate environment, we have added bankers to our teams, while continuing to expand and enhance our technology infrastructure as well as our product and service offerings across our three banks with a sharp focus on boutique commercial banking.
Geographically, we are excited about the opportunities PCSB Bank provides us in the Hudson Valley of New York. In Massachusetts, Brookline Bank expanded our Wakefield lending office and opened a new lending office in Needham. And in Rhode Island, Bank Rhode Island has opened new branches in both Cranston and Newport. Eastern Funding, our National Equipment Finance unit specializing in laundromats, tow trucks and fitness equipment continue to demonstrate solid growth with enviable industry credit performance, which we attribute to the team's narrow focus and very deep expertise. I will now turn it over to Carl, who will review the company's fourth quarter results.
Carl Carlson: Thank you, Paul. Yesterday, we reported net income for the quarter of $22.9 million or $0.26 per share. Total assets finished the year at $11.4 billion, approximately $200 million higher than Q3, driven by loan growth of $261 million, offset by a decline in other assets. We experienced strong loan growth in all categories with commercial growth of $118 million, commercial real estate of $95 million, equipment finance $41 million and $7 million in consumer loans. In the fourth quarter, we originated $792 million in loans at a weighted average coupon of 727 basis points. The weighted average coupon on the core loan portfolio rose 10 basis points to 592 basis points at December 31st. On a linked quarter basis, the yield on the loan portfolio increased 17 basis points to 6.01%.
On the funding side, consumer -- customer deposits were basically flat, while broker deposits declined $13 million and borrowings increased $242 million. Deposit growth continued to be focused on higher rate savings and time deposits, offset by declines in DDA and Money Market products. Total funding cost increased 23 basis points in the quarter to 339 basis points. Total average interest-earning assets grew $63 million on a linked quarter basis, and the net interest margin declined three basis points to 3.15%, resulting in net interest income of $83.7 million, a decline of $500,000 from the third quarter. Non-interest income was $8 million, which was $2.5 million higher than the prior quarter, driven by loan level, derivative income, gains on participated loans and higher other non-interest income.
Expenses were $59.2 million for the quarter, up $1.5 million from Q3, primarily driven by compensation and benefits. Provision for credit losses was $3.8 million for the quarter, up $800,000 from Q3. Yesterday, the Board approved maintaining our quarterly dividend of $0.135 per share to be paid on February 23rd to stockholders of record on February 9th. On an annualized basis, our dividend payout approximates a yield of approximately 5%. This concludes my formal comments. And I'll turn it back to Paul.
Paul Perrault: Thank you, Carl. And we will now open it up for questions.
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