Brookline Bancorp Q1 2025 Earnings Report

Brookline Bancorp EPS Results

• Actual EPS: $0.22
• Consensus EPS: $0.23
• Beat/Miss: Missed by -$0.01
• One Year Ago EPS: N/A

Brookline Bancorp Revenue Results

• Actual Revenue: $91.49 million
• Expected Revenue: $91.38 million
• Beat/Miss: Beat by +$114.00 thousand
• YoY Revenue Growth: N/A

Brookline Bancorp Announcement Details

• Quarter: Q1 2025
• Date: 4/23/2025
• Time: After Market Closes
• Conference Call Date: Thursday, April 24, 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 Q1 2025 Earnings Call Transcript

Key Takeaways

• Solid Q1 operating results: Operating earnings of $20 million ($0.22 per share) and GAAP EPS of $0.21 (including $0.97 million of merger charges) with net interest margin rising 10 bps to 3.22%.
• Strategic loan reduction: Loan portfolio intentionally declined by $136.6 million in Q1 as Brookline reduced commercial real estate and specialty vehicle exposures while increasing focus on general commercial and industrial lending.
• Deposit growth and margin outlook: Customer deposits grew by $113.8 million and funding costs fell, and management expects net interest margin to improve by 4–8 bps in Q2 (excluding any Fed rate cuts) with full‐year deposit growth of 4–5%.
• Credit metrics remain stable: Provision for credit losses was $6 million, net charge‐offs were $7.6 million (driven by one large C&I charge‐off), and reserve coverage stood at 129 bps of total loans under unchanged economic scenarios.
• Merger with Berkshire Hills Bancorp: Regulatory applications filed, S-4 and proxy effective, shareholder votes scheduled for May 21, and closing targeted for H2 2025 with core banking platform conversion planned for February 2026.

Presentation

[Operator]

Good afternoon, and welcome to Brookline Bancorp, Inc. First Quarter twenty twenty five Earnings Conference Call. All participants will be in listen only mode. After today's presentation, there'll be an opportunity to ask questions. Please note this event is being recorded.

[Operator]

I'd now like to turn the conference over to Brookline Bancorp's attorney, Dario Hernandez. Please go ahead.

[Dario Hernandez, VP - Corporate Counsel at Brookline Bancorp]

Thank you, Lydia, and good afternoon, everybody. Yesterday, we issued our earnings release and presentation, which is available on the Investors Relations page on our website, brooklynbancorp.com, and has been filed with the SEC. This afternoon's call will be hosted by Paul A. Perl and Karl Carlson. This call may contain forward looking statements with respect to the financial condition, results of operations and business of Brookline Bancorp.

[Dario Hernandez, VP - Corporate Counsel at Brookline Bancorp]

Please refer to Page two of our earnings presentation for our forward looking statement disclaimer. Also, 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 am pleased to introduce Brookline Bancorp's Chairman and CEO, Paul Perl.

[Paul Perrault, Chairman & CEO at Brookline Bancorp]

Thanks, Theriault, and good afternoon, everyone. Thank you for joining us for today's earnings call. We had solid core operating results for the first quarter with operating earnings of $20,000,000 or $0.22 per share. On a GAAP basis, which includes merger charges of $971,000 net income was $19,100,000 resulting in earnings per share of $0.21 The contraction in our loan portfolio of $136,600,000 is intentional as we reduce commercial real estate exposures while maintaining our focus on important customer relationships. We also experienced some planned runoff in our specialty vehicle portfolio following our exit from that business last year while we continue to increase our participation in the general C and I markets.

[Paul Perrault, Chairman & CEO at Brookline Bancorp]

Customer deposits increased $113,800,000 and our margin increased 10 basis points during the quarter. In January, we expected market rates to gradually return to normal. However, as you all know the opposite has occurred as uncertainty has become the theme of the day and markets have become even more volatile. Even with that, we expect to see our net interest margin continue to improve throughout 2025. In December, we announced the planned merger with Berkshire Hills Bancorp and I'm delighted to tell you it is moving along very nicely.

[Paul Perrault, Chairman & CEO at Brookline Bancorp]

I will now turn you over to Karl who will review the company's first quarter. Karl?

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

Thank you, Paul. At the end of the quarter total assets stood at $11,500,000,000 reflecting a decrease of $385,500,000 from the end of the year. This reduction was due to a deliberate decrease in both cash equivalents and components of our loan portfolio. Specifically, loans declined by 136,600,000 with commercial real estate and equipment finance dropping by $135,000,000 and $32,000,000 respectively, while commercial loans saw growth. Owner occupied commercial real estate fell by $10,000,000 and the investment commercial real estate portfolio decreased by $125,000,000 bringing the percentage of investment commercial real estate to total risk based capital to 375% at year end at quarter end.

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

The decline in equipment finance was primarily driven by the continued runoff of the specialty vehicle portfolio, which decreased by $29,000,000 during the quarter to $267,000,000 On the funding side, customer deposits increased by $113,000,000 while broker deposits and borrowings were reduced by $468,000,000 Stockholders' equity rose by $18,000,000 due to the retained earnings and lower mark to market on the available for sale portfolio, with tangible book value per share rising $0.22 to $11.3 from December 31. The net interest margin improved 10 basis points to 3.22 driven by lower funding costs. However, this was partially offset by a decline of $50,000,000 in average interest earning assets. Consequently, net interest income reached $85,800,000 an increase of $800,000 from the previous quarter. Lower derivative activity resulted in lower fee income for the quarter bringing total revenues for the quarter to $91,500,000 consistent with Q4.

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

Provision for credit losses was $6,000,000.2000000 dollars higher than Q4. We had six point we had $7,600,000 in net charge offs, 5,200,000.0 were previously reserved for. The reserve coverage slightly increased to 129 basis points of total loans. The weightings of the Moody's economic scenarios remained at 40% baseline, 35% moderate recession and 25% stronger near term growth, which are consistent with the weightings at year end. We have evaluated the post quarter end increase in economic uncertainty and will continue to monitor how this uncertainty is captured by future scenarios and adjust as necessary.

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

Non interest expense, excluding merger charges, was $59,000,000 for Q1, a decrease of $1,300,000 from Q4 due to lower compensation and marketing costs. Merger expenses for the quarter were $971,000 and are largely non tax deductible, contributing to a higher effective tax rate. Excluding merger charges, operating EPS was zero two two dollars per share. Yesterday, the Board approved maintaining our quarterly dividend at $0.01 $35 per share to be paid on May 23 to stockholders of record on May 9. Looking forward, the interest rate environment, the potential impact of tariffs and how our customers respond remains uncertain and the need to continually adapt is greater than ever.

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

While modest improvements to net interest margin are increasingly uncertain, we are currently estimating an increase of four to eight basis points in Q2. This is dependent upon market conditions, deposit flows and the direction, timing and magnitude of future actions by the Federal Reserve. We continue to anticipate growth in the loan portfolio to be in the low single digits for the balance of 2025 as growth in commercial and consumer loans will be tempered by the runoff of specialty vehicle and lower commercial real estate activity. On the deposit side, we anticipate growth of 4% to 5% with growth generally favoring interest bearing accounts. Noninterest income is projected to be in the range of $5,500,000 to $6,500,000 per quarter, although components may vary significantly.

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

We are managing expenses to $247,000,000 or less for the full year, excluding merger related costs. Our effective tax rate is expected to be in the range of 24.25%, excluding the impact of nondeductible merger charges. Regarding the merger of equals with Berkshire Hills Bancorp, we have added slide 11 into our earnings presentation providing an update. Regulatory applications have been filed and we will respond to comments or follow-up questions from the regulators On April 8, the S-four and proxy went effective with the SEC and mailing commenced to stockholders of both entities.

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

The stockholder meetings for both Brookline and Berkshire are scheduled for May 21. We anticipate closing the transaction in the second half of twenty twenty five, which will include the merger of all four bank charters. While we are encouraged by the recent regulatory approval process experienced by other institutions, we will make no predictions or observations with respect to our own applications. At the time of the transaction announcement, we had not decided on a core banking platform. I'm pleased to say the diligence was completed and the core banking platform and related technologies have been determined with conversion planning well underway.

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

System conversions are scheduled for February. As you can appreciate, we are unable to comment further on the transaction beyond what has been publicly disclosed. This concludes my formal comments. I will turn it back to Paul.

[Paul Perrault, Chairman & CEO at Brookline Bancorp]

Thanks, Karl. And Lydia, we will now open it up for questions.

[Operator]

Thank Our first question today comes from Mark Fitzgibbon with Piper Sandler. Please go ahead. Your line is open.

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

Hey guys, good afternoon.

[Paul Perrault, Chairman & CEO at Brookline Bancorp]

Hi Mark.

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

Hi Mark.

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

I was just curious and this may be a question for you Carl. Trying to get a sense for the impact of a 25 basis point Fed rate cut. What do you think that means for the margin on a standalone basis pre Berkshire Hills?

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

Well, I think it all depends on what happens with the rest of the yield curve naturally. So if you get that slightly steepening of the yield curve, just cut at the short end, that would certainly be beneficial to us. But, again, it's it's highly dependable on what what what the market is is like and and what is going on with the market and why that cut is is happening. But generally, you know, just from a modeling perspective and and a cut in short term rates and longer term or mid term rates staying where they are that's beneficial.

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

Okay. For your guidance though of 48 basis points up that doesn't assume any Fed rate cuts, correct?

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

That does not reflect Fed rate cuts in the second quarter.

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

Okay. Secondly, wondered if you could give us any color on that $7,100,000 commercial charge off you had. What was the story with that loan? Was that the transportation one that you've talked about in the past?

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

No. That was a large C and I credit that we it was about $13,000,000 credit, dollars 13,000,000 and change that we had a specific reserve for that was around 5,000,000 already on on the books. So there was a little extra provisioning that requiring to cover that that full charge off. We actually it was a sale of a note.

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

Okay. And then lastly, I just wondered maybe at a high level if you could share with us your thoughts on sort of the tariff implications on things like your equipment finance book and maybe your manufacturing loan book, which I think was around $250,000,000 Are you seeing any impact? Are you hearing from customers that it's become a significant problem, the tariffs or not so much?

[Paul Perrault, Chairman & CEO at Brookline Bancorp]

Credit administration is all over that like a wet blanket and they're hearing that people are not doing very much, but are very uneasy about it. And when we look at new credits that has become part of the underwriting process to see how that might have affected things. And so it is having a dampening effect on everything as we go forward, but there's nothing tangible yet.

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

Okay. Thank you.

[Paul Perrault, Chairman & CEO at Brookline Bancorp]

Okay, Mark.

[Operator]

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

[Steve Moss, Director at Raymond James Financial]

Good afternoon.

[Paul Perrault, Chairman & CEO at Brookline Bancorp]

Hi, Steve.

[Steve Moss, Director at Raymond James Financial]

Hey, Paul. Just maybe on loan pricing here, just kind of curious you know, what you guys are seeing for loan pricing that these these days and, you know, as you are also, you know, adding more C and I customers, what's what's the sentiment with, those borrowers and and your thoughts around pull through here?

[Paul Perrault, Chairman & CEO at Brookline Bancorp]

My thoughts around what?

[Steve Moss, Director at Raymond James Financial]

Pull through of new C and I loans.

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

Pull through, I think.

[Steve Moss, Director at Raymond James Financial]

Is it do you think

[Steve Moss, Director at Raymond James Financial]

it's going extend out towards the latter part of the year? Or are you reasonably optimistic near term, me put it that way?

[Paul Perrault, Chairman & CEO at Brookline Bancorp]

I'm reasonably optimistic, but we're obviously going to be very careful like walking through glue or something. But the pipelines are okay and the quality of the stuff that's in the pipeline, I've been very impressed with. And the pricing has generally been pretty good. It feels like the dominant very large banks in our markets are pretty tepid about things right now. So we're not being pushed around too much.

[Paul Perrault, Chairman & CEO at Brookline Bancorp]

The smaller banks have tended to be a lot more aggressive, but our full service paying close attention nature, I think has made us attractive for companies that feel a little bit abused in this time. So we're going to go carefully, but I'm still optimistic with the numbers that Carl's told you about for the balance of the year.

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

Just to give you a little bit more get a little bit more specific on pricing, I think it might be helpful. So we booked about $411,000,000 of originations in the quarter and the weighted average coupon on that book was seven eighteen basis points. And the weighted average coupon of our overall book is about five ninety one basis points. So it gives you a sense of how that's continuing. Every quarter that goes by, we're still getting a benefit on that.

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

Unless the Fed cuts and then we think it's priced out, but that's what I

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

had.

[Steve Moss, Director at Raymond James Financial]

Right.

[Steve Moss, Director at Raymond James Financial]

Okay. That's helpful there. Appreciate that color. And then just in terms of expenses here, down quarter over quarter compensation in particular, just kind of curious how are you thinking about expenses for the second quarter? I apologize if I missed that.

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

No. I think they'll probably be fairly stable with whatever happened in the first quarter. I give guidance for the full year that we have an annual budget that we try to manage towards, and we're doing much better than that at this point. As as you probably understand, we've got the the merger of equals with Berkshire Hills. So we are being very careful about any hires and things of that nature or even replacing folks as as we know that the the opportunity to be able to fill those positions on a combined basis will will be enhanced when that happens.

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

So that's and, you know, I took mentioned the marketing expenses are down, you know, quarter over quarter. I think we were just being thoughtful about where we're where we're spending our money, marketing dollars and keeping some powder dry for for for the, the merger.

[Steve Moss, Director at Raymond James Financial]

Okay. Great. Those were my primary two questions. I I really appreciate the color here. I'll step back in the queue.

[Paul Perrault, Chairman & CEO at Brookline Bancorp]

Okay, Steve. See you.

[Operator]

Our next question comes from Laurie Hunsicker with Seaport Research Partners. Please go ahead.

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

Yes. Hi, Paul and Karl. Good afternoon.

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

Hi.

[Paul Perrault, Chairman & CEO at Brookline Bancorp]

Hello, Laurie.

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

Just circling back to credit here. So the the 7,600,000.0 in C and I charge off, 7,100,000.0 was one loan. Was that a I guess, what type of loan was that? Was that an equipment finance loan? Was that a grocery store?

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

Was what was that?

[Paul Perrault, Chairman & CEO at Brookline Bancorp]

It's in the food manufacturing business, if you will. And it was not entirely the $7.06, but it was primarily so that that loan. It had been a family business that was subject to a leverage buyout by private equity firms and things haven't gone according to oil.

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

Okay. Okay. And then your your specialty vehicle booked down to 267,000,000. That's great. How much were charge offs there in the quarter?

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

Not not much at all. It was de minimis.

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

Okay. Okay. Okay. Okay. Alright.

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

And then just wonder, can you can you give us an update? The the office, the 11,000,000 office loan that I think is supposed to I think it's supposed to close in 2Q. Is that still the case?

[Paul Perrault, Chairman & CEO at Brookline Bancorp]

Is it

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

well observed? How you think about that? Yes.

[Paul Perrault, Chairman & CEO at Brookline Bancorp]

It's under PNS and it's imminent to close sometime soon. Don't know exactly the timing, but it's fully expected to close.

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

Yes. We were and we're not anticipating any additional loss associated with that.

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

Okay. Perfect. That was my question. Okay. Great.

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

And then, I see here I love that you give this update. You're 95% pass rated on that which is maturing. What where does your whole book stand in terms of pass rated? I think I last had that at around 90%. I don't know if you have that number refreshed or if that's still approximately the number.

[Paul Perrault, Chairman & CEO at Brookline Bancorp]

It's approximately 95%.

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

Oh, for the whole book. Okay.

[Paul Perrault, Chairman & CEO at Brookline Bancorp]

Yep.

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

Okay. Great. And then let me just go up here. Do you have do you have a a spot margin for March?

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

'3 '20 '3.

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

Thank you. Okay. And then, I guess, just sort of fast forwarding, and I appreciate that you don't wanna comment any further on the timing, but just fast forwarding the the Brookline Berkshire Hills merger is closed. Can you just talk a little bit about sort of two things on a go forward basis? So number one, obviously, there was that nonbinding letter of intent in company a to potentially acquire you 50% higher.

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

So I guess, how do you think about you know, what directionally are you gonna do as a combined company to get that value from where we are here to sort of 50% higher? That's my first question. And then my second question is, previously you were pretty active in buybacks. You're obviously very well capitalized. Credit looks good.

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

Obviously, many, many uncertainties at the moment, but we are seeing companies amp up the buyback just taking advantage of stock price. Can you tell us a little bit about how you would think about share buybacks once this is closed? Sure.

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

So again, we can't talk too much about adding any additional information. But I would certainly refer you back to the when we announced the transaction and the benefits associated with that transaction, particularly the opportune operational efficiencies, the results, performance of the organization, excluding purchase accounting. Because purchase accounting, as we all know, is is moving in in many different ways every day. But the benefits of getting the purchase accounting done as well will add significantly to to the the performance. As you know, a lot of lot of banks in particular have done restructuring of their investment portfolios to enhance the yields going forward and their margins going forward.

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

And and here you're taking, basically one organization. So $11,000,000,000 of the balance sheet and and and purchase doing the purchase accounting on that and getting the benefits of that going forward. So I think you can refer to that to see, hey. What what is the returns on this this going forward? And, of course, you know, we're in the process of doing the the conversion and the cost savings, and we we feel really, really good about the process so far.

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

Regarding stock buybacks, I'd say it's just too early to talk about that at this point, and we'll we'll see what what the capital ratios and how that will you know, how how the balance sheet is restructured as we come together. And and and the the board will review what the capital opportunities are there and and optimize the capital structure. And if if buybacks are appropriate, that'll that'll get discussed.

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

Okay. Thanks. And one more one more question with respect to capital management. Is it still the intent to take the Berkshire Hills, pro form a combined company dividend up to a rate that's on par with where Brookline is currently? Is that still the plan?

[Paul Perrault, Chairman & CEO at Brookline Bancorp]

That's correct.

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

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

[Paul Perrault, Chairman & CEO at Brookline Bancorp]

Okay, Laurie.

[Operator]

Thank you. And our next question comes from Chris O'Connell with KBW. Your line is open.

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

Hey, Paul. Hey, Karl. Just wanted to start off on the CRE runoff, which I know you guys was planned. Wondering how much more is kind of earmarked to be runoff over the next few quarters and if that will continue after the merger close?

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

Excellent question. So we did plan for the iCree runoff. We identified certain areas that we we would not try to pursue certain customers or certain transactions. I wouldn't wanna call them customers, certain transactions. It it was accelerated a bit in the first quarter, a little bit more than we had originally planned.

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

So outside of that, I I don't see a lot of reduction in that space to the magnitude going forward, But that's that's was a planned planned approach to to 02/2025. On a go forward, it it will will will after after the the combination of the two companies, we'll be looking at that and where where we stand and what we wanna be focused on. I I would I would say we're we're not focused on participating commercial real estate transactions into the bank. We we we'd like to do the lead. Occasionally, we'll do that with friends and family, but that's not something that we would wanna be doing on a go forward basis.

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

And we'd be looking at the combined portfolio and looking at those types of transactions and not really pursuing those going forward. So the timing around that and seeing that, we'd rather preserve our capital or funding for taking care of our customers in our footprint.

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

Understood. Thank you. And appreciate the standalone expense guide in the comments for flattish into Q2. Just rough calculations, you know, you guys are did a really good job, you know, here in the first quarter, you know, of keeping expenses low. You know, if it's relatively flat into q two, you know, that leaves about, you know, 11,000,000 of growth in the back half of the year to kind of get towards that guidance number.

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

Is there any particular dynamics, I guess, that are driving up the costs that much in the back half of the year?

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

No, not at all. It just was our original budget.

[Paul Perrault, Chairman & CEO at Brookline Bancorp]

It was the budget.

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

We're just doing much better. Both companies are doing much better on the expense side as we're very careful on how we're spending money as we're going into this.

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

Okay. Great. And then with the conversion now booked for February 2026, Is that consistent with the original timing? I know it was a little bit up in the air at the time of the announcement. And does it change any of the cost save timings or shift them out a little further?

[Paul Perrault, Chairman & CEO at Brookline Bancorp]

Only a little bit. It's a little bit later than we had hoped it would be and this has a lot to do with scheduling with providers and synchronizing all of the stuff that has to happen. And so some of the cost savings are going to be slightly delayed, but to the extent that both companies are managing their costs very well in the meantime, I'm not viewing it as having any material effect at that point, even though technically some of the expenses are going to be longer than in the original plan, but at a lower level.

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

It's going be harder to cut expenses that you're not even incurring. Paul is saying, the timing we're kind of front loading some of those savings. And so economically, at the end of the day, I would imagine we're probably going to be better off.

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

And then, you know, on the you know, I appreciate the kind of overall office commentary. You know, I was hoping to get, you know, if you had your exposures to, you know, the Cambridge market and your overall lab exposure And just any color around kind of what you guys are seeing or what you guys are hearing in terms of any market developments in those areas?

[Paul Perrault, Chairman & CEO at Brookline Bancorp]

It's a pretty small share of our book. We haven't done very much in the Cambridge area that I can recall. Carl, do you have any sense of the numbers?

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

It's $50,000,000 in lab.

[Paul Perrault, Chairman & CEO at Brookline Bancorp]

All in Cambridge? No. No, all over. So it's $50,000,000 overall in lab space. It's pretty small exposure.

[Paul Perrault, Chairman & CEO at Brookline Bancorp]

We just haven't been exposed to that sort of stuff. We tend to bank real estate professionals who really haven't played all that much in the lab space.

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

Okay, great. That's all I had. Thank you.

[Paul Perrault, Chairman & CEO at Brookline Bancorp]

Okay. Thanks, Chris. That is it.

[Operator]

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

[Paul Perrault, Chairman & CEO at Brookline Bancorp]

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

[Operator]

This concludes today's call. Thank you very much for joining. You may now disconnect your line.

Participants

Executives

• Dario Hernandez, VP - Corporate Counsel
• Paul Perrault, Chairman & CEO

Analysts

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