Brookline Bancorp (BRKL) Q2 2025 earnings summary

Executive summary

• Net income for Q2 2025 was $22.0 million, or $0.25 per share, up 34.5% year-over-year, with operating earnings of $22.4 million excluding merger-related expenses.

• Customer deposits increased by $59 million, while the loan portfolio contracted by $61 million, mainly due to a $95 million reduction in commercial real estate loans.

• Net interest margin expanded to 3.32%, up 10 basis points sequentially and 32 basis points year-over-year.

• The merger with Berkshire Hills Bancorp is progressing, with all stockholder approvals received and closing targeted for the second half of 2025; system conversion is planned for February 2026.

• Quarterly dividend of $0.135 per share declared, payable August 22, 2025.

Financial highlights

• Net interest income rose to $88.7 million, up $2.9 million sequentially and $8.7 million year-over-year, driven by lower funding costs and higher loan yields.

• Non-interest income for Q2 2025 was $6.0 million, with higher loan sale gains but lower deposit and loan fees year-over-year.

• Non-interest expense, excluding merger charges, was $57.7 million, down $1.3 million from Q1; total non-interest expense was $58.1 million.

• Provision for credit losses increased to $7.0 million, up $1.0 million sequentially and $1.4 million year-over-year, reflecting stress in the Boston office sector.

• Net charge-offs totaled $5.1 million, mainly from two impaired CRE loans sold during the quarter.

Outlook and guidance

• Net interest margin is expected to remain stable or improve slightly in Q3, with sensitivity to deposit pricing and funding mix.

• Loan portfolio growth projected in the low single digits for the remainder of 2025, with deposit growth anticipated at 4–5%.

• Non-interest income forecasted at $5.5–$6.5 million per quarter.

• Effective tax rate expected at 24.25%, excluding non-deductible merger charges.

• Merger with Berkshire Hills Bancorp anticipated to close in H2 2025, with system conversion in February 2026 and projected cost savings and EPS accretion for 2026.