Brookline Bancorp Q4 2024 Earnings Report

Brookline Bancorp EPS Results

• Actual EPS: $0.23
• Consensus EPS: $0.24
• Beat/Miss: Missed by -$0.01
• One Year Ago EPS: N/A

Brookline Bancorp Revenue Results

• Actual Revenue: N/A
• Expected Revenue: $90.66 million
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

Brookline Bancorp Announcement Details

• Quarter: Q4 2024
• Date: 1/29/2025
• Time: After Market Closes
• Conference Call Date: Thursday, January 30, 2025
• Conference Call Time: 1:30PM ET

Brookline Bancorp (NASDAQ:BRKL) operates as a bank holding company for the Brookline Bank that provide commercial, business, and retail banking services to corporate, municipal, and retail customers in the United States. Its deposit products include demand checking, NOW, money market, and savings accounts. The company's loan portfolio primarily comprises first mortgage loans secured by commercial, multi-family, and residential real estate properties; loans to business entities comprising commercial lines of credit; loans to condominium associations; loans and leases used to finance equipment for small businesses; financing for construction and development projects; and home equity and other consumer loans. It provides credit, term loans, letters of credit, foreign exchange, cash management, consumer and residential loans, wealth and investment advisory, and online and mobile banking services, as well as invests in debt and equity securities. The company was founded in 1871 and is headquartered in Boston, Massachusetts.

Brookline Bancorp Q4 2024 Earnings Call Transcript

Presentation

[Operator]

Good afternoon, and welcome to Brookline Bancorp Inc. 4th Quarter 2024 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.

[Operator]

I would now like to turn the conference over to Brookline Bancorp's Attorney, Laura Vaughan. Please go ahead.

[Laura Vaughn, Attorney at Brookline Bancorp]

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, brooklynbancorp.com, and has been filed with the SEC. This afternoon's call will be hosted by Paul A. Perrault and Carl M. Carlson.

[Laura Vaughn, Attorney at Brookline Bancorp]

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.

[Laura Vaughn, Attorney at Brookline Bancorp]

I'm pleased to introduce Brookline Bancorp's Chairman and CEO, Paul Perroldt.

[Paul Perrault, Chairman & CEO at Brookline Bancorp]

Thanks, Laura, and good afternoon, everyone. Thank you for joining us for today's earnings call. Our core operating performance improved slightly over the Q3 with net income of $20,700,000 and operating earnings per share of $0.23 On a GAAP basis, which would include merger charges of $3,400,000 net income was $17,500,000 with earnings per share of $0.20 Loans grew a modest $24,000,000 and customer deposits increased by $116,000,000 and our margin increased by 5 basis points. As market rates gradually return to normal, we would expect to see our net interest margin continue to improve through this year. In December, we announced the planned merger with Berkshire Hills Bancorp to create a $24,000,000,000 financial institution with highly complementary market footprints covering most of the key markets in New England with very little branch overlap.

[Paul Perrault, Chairman & CEO at Brookline Bancorp]

This partnership generates significant economies of scale resulting in cost savings and the ability to leverage future investments driving the profitability metrics of a combined company. Additionally, we have a very experienced management team who continue to collaborate on the planning and preparation to execute and drive performance in this deal. I will now turn you over to Carl, who will review the company's 4th quarter results. Carl?

[Carl Carlson, Co-President & Chief Financial Officer at Brookline Bancorp]

Thank you, Paul. Total assets grew $228,000,000 from September, driven by growth in securities and cash equivalents of $176,000,000 and loan growth of $24,000,000 Strong C and I growth of $84,000,000 $33,000,000 in consumer loans were offset by reductions of $63,000,000 in commercial real estate and $30,000,000 in equipment finance. In the 4th quarter, we originated $492,000,000 in loans at a weighted average coupon of 734 basis points. However, the weighted average coupon on the core loan portfolio declined 11 basis points during the quarter to 5.92 basis points as approximately 23% of our loan portfolio repriced to lower rates as the Federal Reserve Bank continued to lower short term rates. On a linked quarter basis, the yield on the loan portfolio decreased 10 basis points to 607 basis points.

[Carl Carlson, Co-President & Chief Financial Officer at Brookline Bancorp]

On the deposit side, customer deposits grew $117,000,000 and broker deposits increased $53,000,000 Deposit growth continued to be focused in time deposits and money market. However, we also saw demand deposits grow $11,000,000 Total funding costs were 3.46 basis points, a decline of 21 basis points from Q3, as the overall net interest margin improved 5 basis points to 312 basis points for the quarter. Total average interest earning assets grew $146,000,000 on a linked quarter basis, resulting in net interest income of $85,000,000 an increase of $2,000,000 from Q3. Non interest income was $6,500,000 which was up slightly from the prior quarter of $6,300,000 due to stronger loan level derivative income offset by the mark to market on swaps. Operating expenses were $60,300,000 for the quarter versus $57,900,000 in Q3.

[Carl Carlson, Co-President & Chief Financial Officer at Brookline Bancorp]

The increase is largely driven by additional incentive and commission related expenses in the quarter. The provision for credit losses was $4,000,000 for the quarter, a decrease of $700,000 from the 3rd quarter. Looking forward, the interest rate environment remains volatile and client behavior and industry responses will continually adapt. As the yield curve continues to normalize, we will see net interest margin improvements. The modest improvements in the environment so far suggest our net interest margin will increase 4 to 8 basis points in Q1 and continue to improve throughout 2,005.

[Carl Carlson, Co-President & Chief Financial Officer at Brookline Bancorp]

We anticipate growth in the loan portfolio to be in the low single digits for 2025 as growth in commercial and consumer loans will be tempered by the runoff of specialty vehicle and continued lower commercial real estate activity. Cash and securities combined are expected to represent 9% to 12% of total assets. On the deposit side, we anticipate growth of 4% to 5%. Given prevailing interest rates, the migration of lower cost deposits may continue, but are anticipated to slow. Our first quarter margin is projected to fall within a range of 316 to 3 20 basis points and will continue to improve throughout the year.

[Carl Carlson, Co-President & Chief Financial Officer at Brookline Bancorp]

However, this is dependent upon deposit flows and the timing and magnitude of future actions by the Federal Reserve. Non interest income is projected to be in the range of $6,000,000 to $7,000,000 per quarter, although components may vary significantly. We are managing expenses to $247,000,000 or less for the full year, excluding merger related costs, and our effective tax rate is expected to be in the range of 24.25 percent. Yesterday, the Board approved maintaining our quarterly dividend at $0.135 per share to be paid on February 28 to stockholders of record on February 14. On an annualized basis, our dividend payout approximates a yield of 4.5%.

[Carl Carlson, Co-President & Chief Financial Officer at Brookline Bancorp]

This concludes my formal comments, and I'll turn it back to Paul.

[Paul Perrault, Chairman & CEO at Brookline Bancorp]

Thanks, Carl. Now we will open it up for questions.

[Operator]

Thank you. The first question today comes from Mark Fitzgibbon with Piper Sandler. Please go ahead, Mark. Your line is now open.

[Mark Fitzgibbon, Head of FSG Research at Piper Sandler Companies]

Hey, guys. Good afternoon.

[Paul Perrault, Chairman & CEO at Brookline Bancorp]

Hi, Mark.

[Mark Fitzgibbon, Head of FSG Research at Piper Sandler Companies]

It's been a couple

[Mark Fitzgibbon, Head of FSG Research at Piper Sandler Companies]

of months, Paul since you announced the acquisition of Berkshire Hills or merger with Berkshire Hills. I guess I was curious, have you been able to yet triangulate in with the regulators on what the timeline for getting approvals on that deal might look like?

[Paul Perrault, Chairman & CEO at Brookline Bancorp]

We certainly had contact with them, but I can't tell you that we have a read yet on how that is going to happen. Part of the sort of front end delay here, I think, has to do with the fact that we are advised, and I think Karl would have said this anyway, that they the regulators are going to expect we use year end numbers for the filings. So it sort of became a little bit awkward time. If we had tried to bend as fast as possible, we would have been forced to use 3rd quarter numbers with the expectation that when we got there, they would have told us, well, file again with the 4th quarter numbers. So I don't have a read yet.

[Paul Perrault, Chairman & CEO at Brookline Bancorp]

But I am reading about some favorable speeding up of approvals in the past few weeks. So I'm a bit hopeful that this could be a little bit faster than our anticipated Q3 approval.

[Mark Fitzgibbon, Head of FSG Research at Piper Sandler Companies]

Okay, great.

[Mark Fitzgibbon, Head of FSG Research at Piper Sandler Companies]

And then secondly, I wonder if you could share any color on the equipment finance loan that resulted in the $5,100,000 charge off in the quarter. I guess I was curious, was that in the specialty vehicle sector or was that something else?

[Carl Carlson, Co-President & Chief Financial Officer at Brookline Bancorp]

No, that's it wasn't a laundry. So we had a customer with some large industrial laundry mats. We've been talking about this for a little while now. It was specifically reserved for, so that was the charge off in the quarter.

[Mark Fitzgibbon, Head of FSG Research at Piper Sandler Companies]

Okay.

[Paul Perrault, Chairman & CEO at Brookline Bancorp]

It's not a type of loan that we have many of.

[Mark Fitzgibbon, Head of FSG Research at Piper Sandler Companies]

Okay. And then on Page 26 of your slide deck where you break out the deposit betas, I was a little surprised that you haven't taken deposit rates down faster, given that many of your peers have. Is that simply a function of the fact you're trying to hold that loan to deposit ratio kind of at or below the current level or something else at work there?

[Paul Perrault, Chairman & CEO at Brookline Bancorp]

No. I can't think of anything at work. I mean, it's hard for me to evaluate just based on your review of that. But I think our deposit price setters have been reasonably aggressive, but we are careful that we want to hold the funding.

[Mark Fitzgibbon, Head of FSG Research at Piper Sandler Companies]

Thank you.

[Paul Perrault, Chairman & CEO at Brookline Bancorp]

Thanks, Mark.

[Operator]

Our next question comes from Steve Moss with Raymond James. Steve, please go ahead.

[Steve Moss, Director - Banking & Arlington at Raymond James Financial]

Good afternoon. Following up on Mark's question here with regard there with regard to the margin, just kind of curious, Paul or Carl, how you have 40 basis points of margin expansion in the upcoming quarter. Just kind of as you think about it, how much should you have over the course of the year?

[Carl Carlson, Co-President & Chief Financial Officer at Brookline Bancorp]

Yes. I'm not giving guidance on the course of the year at this time. I know we talked a little bit about it last time. It's been just too volatile out there depending on what the Fed is going to do and the timing of changes. So whenever the Fed does move, it takes a little time for our liabilities to reprice.

[Carl Carlson, Co-President & Chief Financial Officer at Brookline Bancorp]

So we saw moves in November December and we're still seeing that play out for the most part in our liability side of things. So I continue to see margin improvement going forward. We have a lot of and the 22% of our loan book gets impacted immediately with those moves in prices. So we feel a slower we may be doing better on the margin side, if the Fed is at a slower pace of reductions. But I don't know if there's going to be one reduction next year, I don't know if it's going to be 3 reductions next year or no reductions next year.

[Carl Carlson, Co-President & Chief Financial Officer at Brookline Bancorp]

So right now, I'm not giving guidance on that.

[Steve Moss, Director - Banking & Arlington at Raymond James Financial]

I thought I'd try again. But I guess given that maybe just as you think about deposit betas here, how are you guys thinking about the pace of downward cuts going forward here? I think it's a 33 ish type deposit beta for the quarter, if I recall correctly.

[Carl Carlson, Co-President & Chief Financial Officer at Brookline Bancorp]

Yes. I think we'll continue to be on that pace. I think we're seeing that in the industry. Everybody's pretty responsive to changes in any rates in the market as they move down. I think we're all looking for a normal yield curve.

[Carl Carlson, Co-President & Chief Financial Officer at Brookline Bancorp]

I know we always talk about the inversion of the yield curve is over from the 2 to the 10. But when you look at the Fed effective rate of 4.33 and the 5 year at 4.30% and the 2 year at 4.20%, we're still where banks make money, where we make money, it's still flat at best. So I think we're we'd love to see that come down a bit more and we'll be pretty responsive to their rates on our deposit pricing. Okay. So I'd say it's north of what we're modeling at least for a little while.

[Steve Moss, Director - Banking & Arlington at Raymond James Financial]

Got it. Okay. Fair enough. And then in terms of on the loan growth front here, I'm assuming kind of the CRE runoff was maybe a bit planned given the merger. Just kind of curious how you're thinking about overall loan growth for 2025?

[Carl Carlson, Co-President & Chief Financial Officer at Brookline Bancorp]

Yes. Again, I think it's going to be in the low single digits. We're going to continue to bring down commercial real estate loans in a thoughtful manner. We're certainly in the business taking care of our customers, but we're being more selective on what we're doing. And I think we'll and on a combined basis, we'll be searching to get that down to 300%.

[Carl Carlson, Co-President & Chief Financial Officer at Brookline Bancorp]

I think the market appreciates that. And I think that's the goal of the organization.

[Steve Moss, Director - Banking & Arlington at Raymond James Financial]

Okay. And one last one for me. In the deck, I noticed you guys made disclosure about the $10,800,000 classified loan in the Central Business District. Just curious, you said in negotiations, do you expect it to close this quarter? And maybe could you give us a sense how much of a haircut, if any, the seller is taking?

[Carl Carlson, Co-President & Chief Financial Officer at Brookline Bancorp]

So the first question, it may be late this quarter or early next quarter. I don't want to try to I don't guess what that's coming up. It's coming up. It's coming up. And the second part of the question I

[Paul Perrault, Chairman & CEO at Brookline Bancorp]

have no idea.

[Carl Carlson, Co-President & Chief Financial Officer at Brookline Bancorp]

Okay.

[Carl Carlson, Co-President & Chief Financial Officer at Brookline Bancorp]

We'll get out of what's left basically with the existing reserves against it.

[Steve Moss, Director - Banking & Arlington at Raymond James Financial]

Right.

[Paul Perrault, Chairman & CEO at Brookline Bancorp]

But what the outcome is for the owner, I don't I have no idea. It probably wasn't a great adventure for me.

[Steve Moss, Director - Banking & Arlington at Raymond James Financial]

Got it. Okay. So you guys do expect to take a realize a charge off, it sounds like?

[Carl Carlson, Co-President & Chief Financial Officer at Brookline Bancorp]

Yes. Yes, we've got but

[Paul Perrault, Chairman & CEO at Brookline Bancorp]

it's reserved.

[Carl Carlson, Co-President & Chief Financial Officer at Brookline Bancorp]

It's reserved for.

[Steve Moss, Director - Banking & Arlington at Raymond James Financial]

Right. Okay. And could you just remind us how much that is?

[Paul Perrault, Chairman & CEO at Brookline Bancorp]

What the loan?

[Carl Carlson, Co-President & Chief Financial Officer at Brookline Bancorp]

We're not going to sell reserve, I'm sorry.

[Steve Moss, Director - Banking & Arlington at Raymond James Financial]

I don't have the specifics.

[Paul Perrault, Chairman & CEO at Brookline Bancorp]

I don't have it

[Paul Perrault, Chairman & CEO at Brookline Bancorp]

here.

[Steve Moss, Director - Banking & Arlington at Raymond James Financial]

All

[Steve Moss, Director - Banking & Arlington at Raymond James Financial]

right. Well, I appreciate all the color and I'll step back. Thanks, guys.

[Paul Perrault, Chairman & CEO at Brookline Bancorp]

All right, Steve. Thank you.

[Operator]

Our next question comes from Laurie Hunsicker with Seaport. Please go ahead. Your line is now open.

[Laurie Hunsicker, Senior Equity Research Analyst at Seaport Research Partners]

Great. Hi. Thanks. Hi, Karl and Karl.

[Paul Perrault, Chairman & CEO at Brookline Bancorp]

How are you?

[Laurie Hunsicker, Senior Equity Research Analyst at Seaport Research Partners]

Maybe you speak with where Steve was. And so I understand that you don't want to tell us the specific reserve with that office hasn't closed yet. But can you help us think what is the total reserve on your office book? Like your overall office reserve, what is that?

[Carl Carlson, Co-President & Chief Financial Officer at Brookline Bancorp]

So the general reserve is 2.23%.

[Laurie Hunsicker, Senior Equity Research Analyst at Seaport Research Partners]

3%. Okay, great. And then how much did you have in office nonperformers this quarter? I didn't see that number in your deck.

[Paul Perrault, Chairman & CEO at Brookline Bancorp]

It's not very much. It's the loan we're talking about and one more, I think.

[Carl Carlson, Co-President & Chief Financial Officer at Brookline Bancorp]

Yes. There's only 2 loans I believe that are not performers at this time. The other one is fairly small.

[Laurie Hunsicker, Senior Equity Research Analyst at Seaport Research Partners]

Okay. Good. And I appreciate the color that you put on your pass rate. It's a very strong number. Just switching over to your specialty vehicle.

[Laurie Hunsicker, Senior Equity Research Analyst at Seaport Research Partners]

So I know the $5,100,000 was laundry, but the other the $1,600,000 that's equipment finance, is that a specialty vehicle charge off? Sorry, of your $7,300,000 in charge off, it flagged the $5,100,000 and the $1,600,000 5,100,000 you already talked about. The $1,600,000 is that specialty

[Laurie Hunsicker, Senior Equity Research Analyst at Seaport Research Partners]

vehicle?

[Carl Carlson, Co-President & Chief Financial Officer at Brookline Bancorp]

It's a bit of a mix. It's 1.1 is really specialty vehicle in that charge offs. And you brought up the laundry. I misspoke earlier.

[Carl Carlson, Co-President & Chief Financial Officer at Brookline Bancorp]

It wasn't a laundry it wasn't the laundry mat. It was a grocery loan, at a significant grocery loan at Eastern Funding that we took the charge off on.

[Laurie Hunsicker, Senior Equity Research Analyst at Seaport Research Partners]

And then can you remind

[Carl Carlson, Co-President & Chief Financial Officer at Brookline Bancorp]

Hopefully, Mark, you got that. Hopefully, Mark got that.

[Laurie Hunsicker, Senior Equity Research Analyst at Seaport Research Partners]

Yes. Okay. Good. Yes. Thanks.

[Laurie Hunsicker, Senior Equity Research Analyst at Seaport Research Partners]

Okay. And then the so $1,100,000 is your charge off on your specialty vehicle. That book is sitting at $296,000,000 now. Can you remind us, what is the runoff on that again? And is that tracking with what you think it's going to be tracking?

[Laurie Hunsicker, Senior Equity Research Analyst at Seaport Research Partners]

Or how are you looking at that?

[Carl Carlson, Co-President & Chief Financial Officer at Brookline Bancorp]

It is tracking exactly how we've been tracking. I think the CFO of that unit says, I think it's $2,200,000 a week that that's running off. And I think it's running off fairly consistent. Is that the right number?

[Laurie Hunsicker, Senior Equity Research Analyst at Seaport Research Partners]

Right. Okay. And then can you just remind us what's the reserve that you have on that book?

[Carl Carlson, Co-President & Chief Financial Officer at Brookline Bancorp]

On the specialty vehicle, it's 2.6%.

[Laurie Hunsicker, Senior Equity Research Analyst at Seaport Research Partners]

2.6%. Okay. Great. Okay. And then tax rate, do you have a number for what that's looking like for 2025?

[Carl Carlson, Co-President & Chief Financial Officer at Brookline Bancorp]

Yes. I think our run rate is around 24.25 percent. But again, that's not going to include if there's any merger charges because sometimes those things are not tax deductible. So in this quarter, about $2,500,000 of the charges were not tax deductible, which can play games with that. But on our regular run rate, we're in that 24.25%.

[Laurie Hunsicker, Senior Equity Research Analyst at Seaport Research Partners]

Okay. Okay, great. And then, margin, do you have a spot margin for December?

[Carl Carlson, Co-President & Chief Financial Officer at Brookline Bancorp]

December was a little lower than the run rate for the whole quarter. So it was 3.10%, 3.10%.

[Paul Perrault, Chairman & CEO at Brookline Bancorp]

Was there an interest reversal?

[Carl Carlson, Co-President & Chief Financial Officer at Brookline Bancorp]

Well, there's a lot of different things that go through that. So there might be an interest. So I don't know all the components of that, but there may have been some interesting reversals, the timing of bringing deposit rates down, things like that. But

[Carl Carlson, Co-President & Chief Financial Officer at Brookline Bancorp]

we'll see those types of things.

[Laurie Hunsicker, Senior Equity Research Analyst at Seaport Research Partners]

Okay. Okay, great. And then sorry, just one last question. Going back to that $10,800,000 classified office that you said would likely resolve in the 1st or second quarter, what is the vacancy rate on that property?

[Carl Carlson, Co-President & Chief Financial Officer at Brookline Bancorp]

50%.

[Laurie Hunsicker, Senior Equity Research Analyst at Seaport Research Partners]

Okay. Okay, great. Thanks. I'll leave it there.

[Paul Perrault, Chairman & CEO at Brookline Bancorp]

Sure. Thanks, Laurie.

[Operator]

Our next question comes from Chris O'Connor with KBW. Chris, please go ahead.

[Christopher O'Connell, Director at Keefe, Bruyette & Woods (KBW)]

Hey, good afternoon. Hi. I just

[Christopher O'Connell, Director at Keefe, Bruyette & Woods (KBW)]

wanted to circle back to the margin margin discussion. I think from last quarter's call, the spot margin in September was 3.13, I think. And so I just was wondering for this quarter, maybe just what happened where you guys thought you'd get expansion, which you did off the full 3Q number. But why there wasn't more overall expansion over the course of the quarter? Was that deposit timing?

[Christopher O'Connell, Director at Keefe, Bruyette & Woods (KBW)]

Did you guys move rates a little later in the quarter than you had expected or?

[Carl Carlson, Co-President & Chief Financial Officer at Brookline Bancorp]

It's probably all of those things. Modeling isn't perfect. So I think it is probably a little bit on the deposit timing of when those things get moved and implemented. Daniele. I don't think it's an interest reversal that caused it, but I think it's and it might have been the timing of our sub debt and making sure that got recorded in our model, I'm not sure if that was picked up by our model or not as well.

[Carl Carlson, Co-President & Chief Financial Officer at Brookline Bancorp]

Our sub debt went from fixed to fully. So it might have been an impact as well.

[Christopher O'Connell, Director at Keefe, Bruyette & Woods (KBW)]

Got it. And then for the quarter, I think you mentioned that the core loan yield was 5.92%, which was about 15 basis points below the total loan yield. Just wondering if that is I guess what's in that? Is that prepay? Is that accretion?

[Christopher O'Connell, Director at Keefe, Bruyette & Woods (KBW)]

Is that non accrual reversal? What are the components there? And then has that been a typical differential from the core and the stated loan yield over the past couple of quarters? Or is that either light or outsized?

[Carl Carlson, Co-President & Chief Financial Officer at Brookline Bancorp]

It's such a moving piece. That's why I give you both. So the yield is for the quarter. And so rates are moving throughout the quarter, right, depending on when the Fed is doing the timing of originations, timing of payoffs, all of those things go into it, as well as any accretion income and things fees that are getting amortized over the loan, the life of the loan. The accretion is typically very stable.

[Carl Carlson, Co-President & Chief Financial Officer at Brookline Bancorp]

So that's not something that's moving it much. We haven't seen a lot of prepayments these days. So that's really not driving it as well. So I would say it's just really the timing of when the Fed has been moving rates, how rates are and when those rates reprice in the system itself. Some loans reprice the next day, some reprice the 1st of the next month.

[Carl Carlson, Co-President & Chief Financial Officer at Brookline Bancorp]

And so all of those things go into it. So that's why I kind of give you, hey, what's the coupon on the book at the end of the quarter, because that kind of has everything in as of that moment. And then and you can see what the loan yields are for the quarter as well. And I can see how you're trying to size those up.

[Christopher O'Connell, Director at Keefe, Bruyette & Woods (KBW)]

Yes. I got it. And then I think the originations here were about $491,000,000 this quarter. Sorry if

[Christopher O'Connell, Director at Keefe, Bruyette & Woods (KBW)]

I missed it, but did you

[Christopher O'Connell, Director at Keefe, Bruyette & Woods (KBW)]

mention what the origination yields were there?

[Carl Carlson, Co-President & Chief Financial Officer at Brookline Bancorp]

Yes. It was 734 basis points.

[Christopher O'Connell, Director at Keefe, Bruyette & Woods (KBW)]

Got it.

[Christopher O'Connell, Director at Keefe, Bruyette & Woods (KBW)]

And then with regards to the merger with Berkshire, you guys had mentioned upon the announcement the contemplation of maybe outside actions with regards to managing the CRE concentration ratio pro form a. A. Have you guys made any progress there? Is there anything being more specific being discussed?

[Carl Carlson, Co-President & Chief Financial Officer at Brookline Bancorp]

Nothing in addition to what we've already discussed. I think when we talked about this, we had already had plans to reduce our CRE concentration over time. This accelerates that simply because the building capital is very, very helpful as well to the transaction. But it also gives us a lot of flexibility down the road if we want to do something more. But we have not worked we're not providing any information around that.

[Christopher O'Connell, Director at Keefe, Bruyette & Woods (KBW)]

Got it. And then last one for me, just on the reserve from here, you guys have made a couple of adjustments in the weightings the past couple of quarters. I was wondering if you had what the impact was on the overall reserve level. And I think you have some target kind of steady state targets for those weightings, which indicate maybe a slight more shift in the coming quarters. Is that something that you think kind of occurs near term or happens over time?

[Carl Carlson, Co-President & Chief Financial Officer at Brookline Bancorp]

I think that just happens over time. The Moody's scenarios have been changing. Our credit folks take a hard look at that and see what's going on with that and see what's appropriate. And so we adjust those weightings as we feel is appropriate. As you know, we've been moving more away more from the recessionary environment and more towards a more balanced look at the market.

[Carl Carlson, Co-President & Chief Financial Officer at Brookline Bancorp]

I would expect that to continue, but I don't know if that's really going to happen or not.

[Paul Perrault, Chairman & CEO at Brookline Bancorp]

So that's a quarter

[Paul Perrault, Chairman & CEO at Brookline Bancorp]

by quarter.

[Carl Carlson, Co-President & Chief Financial Officer at Brookline Bancorp]

That's a management decision at the end of the day and a lot of smart folks in the room that decide that. But I think as far as we saw the reserve or the reserve for loan losses decline 3 basis points, I think, in the quarter to 128%, still a very, very healthy reserve. And so I feel that the team is doing a great job.

[Christopher O'Connell, Director at Keefe, Bruyette & Woods (KBW)]

Got it. And just I mean, it might be too specific, but I'm just like wondering how much like that lasts, if you guys were to shift to the neutral targets next quarter, does do you know if that has like a 1 or 2 or 3 basis point kind of impact?

[Carl Carlson, Co-President & Chief Financial Officer at Brookline Bancorp]

Yes. I don't have insight into that because a lot of it's based on what the underlying scenarios are. For instance, the scenario the baseline scenario for the Moody's decreased the CRE price index quite a bit. And we actually so that's certainly more reasonable. That's a more reasonable outlook.

[Carl Carlson, Co-President & Chief Financial Officer at Brookline Bancorp]

And so we weighted that a little heavier, the baseline outlook on that. So those are things that go into. So if you just moved it, if you would run this thing in Q4 using your baseline scenario or a very shouldn't say baseline scenario, but a more weighted towards a normal weightings, I would say it's probably between $6,000,000 $10,000,000 on the reserve, I think, yes. I'm guessing though, to be honest with you. So hopefully, that's helpful.

[Christopher O'Connell, Director at Keefe, Bruyette & Woods (KBW)]

Yes, very. Thank you. Appreciate it.

[Carl Carlson, Co-President & Chief Financial Officer at Brookline Bancorp]

Sure. Thanks, Chris.

[Operator]

This concludes our question and answer session. I'd like to turn the conference back over to Mr. Perrault for any closing remarks.

[Paul Perrault, Chairman & CEO at Brookline Bancorp]

Thanks, Emily, and thank you all for joining us this afternoon. And we look forward to talking with you again next quarter. Good day.

[Operator]

The conference has concluded. Thank you for attending today's presentation. You may now disconnect.

Participants

Executives

• Laura Vaughn, Attorney
• Paul Perrault, Chairman & CEO

Analysts

• Carl Carlson, Co-President & Chief Financial Officer at Brookline Bancorp
• Mark Fitzgibbon, Head of FSG Research at Piper Sandler Companies
• Steve Moss, Director - Banking & Arlington at Raymond James Financial
• Laurie Hunsicker, Senior Equity Research Analyst at Seaport Research Partners
• Christopher O'Connell, Director at Keefe, Bruyette & Woods (KBW)