Brookline Bancorp (BRKL) Q1 2025 earnings summary

Executive summary

• Net income for Q1 2025 was $19.1 million ($0.21 per share), up 30.2% year-over-year, with core operating earnings of $20 million ($0.22 per share), including $1 million in merger charges.

• Customer deposits increased by $113.8 million, while loans declined by $136.6 million, mainly due to intentional reductions in commercial real estate and specialty vehicle portfolios.

• The planned merger with Berkshire Hills Bancorp is progressing, with regulatory filings, stockholder meetings scheduled for May 21, 2025, and system conversion targeted for February 2026.

• Quarterly dividend maintained at $0.135 per share, payable May 23, 2025.

• Asset quality improved as nonperforming assets fell to $64.0 million (0.56% of assets), and net charge-offs declined.

Financial highlights

• Net interest income rose to $85.8 million, up $0.8 million sequentially, with net interest margin increasing 10 basis points to 3.22%.

• Provision for credit losses was $6 million, up $2 million from Q4, mainly due to a single commercial credit issue.

• Non-interest income fell to $5.7 million, mainly due to lower derivative and loan fee income.

• Non-interest expense, excluding merger charges, was $59 million, down $1.3 million from Q4; total non-interest expense was $60 million.

• Total assets at quarter-end were $11.5 billion, down $385.5 million from year-end.

Outlook and guidance

• Net interest margin expected to increase 4-8 basis points in Q2, assuming no Fed rate cuts; management expects stable margin near-term.

• Loan portfolio growth anticipated in low single digits for 2025, with deposit growth of 4%-5%.

• Non-interest income projected at $5.5-$6.5 million per quarter; full-year expenses managed to $247 million or less, excluding merger costs.

• Effective tax rate expected at 24%-25%, excluding non-deductible merger charges.

• Merger with Berkshire Hills Bancorp expected to close in 2H25, with system conversion in February 2026 and significant cost savings and EPS accretion projected for 2026.