Brookline Bancorp (BRKL) Q3 2024 earnings summary

Executive summary

• Net income for Q3 2024 was $20.1 million ($0.23/share), up from Q2 but down year-over-year, with EPS up 28% sequentially and down 12% year-over-year.

• Loans grew by $34 million and customer deposits increased by $103 million, while total assets rose $42 million to $11.68 billion.

• Net interest margin increased 7 bps sequentially to 3.07%, though down 11 bps year-over-year.

• Pretax, pre-provision income increased $4.2 million from Q2, and operating expenses declined $0.5 million.

• Quarterly dividend of $0.135 per share declared, payable November 29, 2024.

Financial highlights

• Net interest income was $83 million, up $3 million from Q2, but down $1.1 million year-over-year; non-interest income was $6.3 million, flat sequentially and up $0.8 million year-over-year.

• Operating expenses were $57.9 million, down from $59.2 million in Q2, nearly flat year-over-year.

• Provision for credit losses was $4.7 million, down $900,000 from Q2, but up $1.7 million year-over-year; net charge-offs were $3.8 million (0.16% annualized), down from $8.4 million in Q2.

• Allowance for loan and lease losses increased to $127.3 million (1.31% of loans), up from $117.5 million (1.22%) at year-end.

• Nonperforming assets rose to $72.8 million (0.62% of assets), mainly due to equipment financing and commercial loans.

Outlook and guidance

• Net interest margin expected to improve by 5–10 bps in Q4 and continue rising through 2025; Q4 margin projected at 312–320 bps.

• Loan and deposit growth anticipated at 4–5% in 2025; non-interest income expected at $6–7 million per quarter with 5–10% growth.

• Operating costs projected to grow 3–3.5% in 2025, with an effective tax rate of 24–25%.

• Economic forecast inputs for credit loss modeling improved, with GDP outlook favorable and CRE price index positive, though unemployment slightly worsened.

• Deposit rate sensitivity has recently been higher than historical averages, which could affect future net interest income.