NASDAQ:BRKL Brookline Bancorp Q2 2023 Earnings Report $9.89 +0.09 (+0.92%) Closing price 04/17/2025 04:00 PM EasternExtended Trading$9.90 +0.01 (+0.10%) As of 04/17/2025 04:32 PM Eastern Extended trading is trading that happens on electronic markets outside of regular trading hours. This is a fair market value extended hours price provided by Polygon.io. Learn more. Earnings HistoryForecast Brookline Bancorp EPS ResultsActual EPS$0.26Consensus EPS $0.27Beat/MissMissed by -$0.01One Year Ago EPSN/ABrookline Bancorp Revenue ResultsActual Revenue$91.50 millionExpected Revenue$90.50 millionBeat/MissBeat by +$1.00 millionYoY Revenue GrowthN/ABrookline Bancorp Announcement DetailsQuarterQ2 2023Date7/26/2023TimeN/AConference Call DateThursday, July 27, 2023Conference Call Time1:30PM ETUpcoming EarningsBrookline Bancorp's Q1 2025 earnings is scheduled for Wednesday, April 23, 2025, with a conference call scheduled on Thursday, April 24, 2025 at 1:30 PM ET. Check back for transcripts, audio, and key financial metrics as they become available.Conference Call ResourcesConference Call AudioConference Call TranscriptSlide DeckPress Release (8-K)Quarterly Report (10-Q)Earnings HistoryCompany ProfileSlide DeckFull Screen Slide DeckPowered by Brookline Bancorp Q2 2023 Earnings Call TranscriptProvided by QuartrJuly 27, 2023 ShareLink copied to clipboard.There are 7 speakers on the call. Operator00:00:00Afternoon, and welcome to the Brookline Bancorp Inc. 2nd Quarter 2023 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. Operator00:00:15I would now like to turn the conference over to Brookline Bank Corp's Attorney, Laura Vaughn. Please go ahead. Speaker 100:00:22Thank you, Alex, and good afternoon, everyone. Yesterday, we issued our earnings release and presentation, which is available on the Investor Relations page of our website, bookingsincorp.com and has been filed with the SEC. We will not be doing a slide slip this quarter. This afternoon's call will be hosted by Paul A. Perrault and Carl M. Speaker 100:00:43Carlson. 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 needed 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 comparison and reconciliation to GAAP earnings, please see our earnings release. Speaker 100:01:31I'm pleased to introduce Brookline Bancorp's Chairman and CEO, Paul Peril. Speaker 200:01:36Thank you, Laura, and good afternoon, everyone. Thank you for joining us today on this earnings call. Yesterday, we reported net income for the quarter of $21,900,000 or $0.25 per share. Excluding about $1,000,000 in merger charges, Non GAAP operating earnings were $23,200,000 with operating EPS of $0.26 As we discussed during last quarter's call, in the Q1, we added over $500,000,000 to our on balance sheet liquidity in the form of cash and securities. During the Q2, we prudently reduced most of this position. Speaker 200:02:14Our bankers remain very active in the markets And while we continue to be prudent and attentive to our existing customers, we are seeing opportunities to bank strong new relationships. Loan portfolio grew $94,000,000 this quarter and core deposits grew by $110,000,000 Non performing assets increased in the quarter off historically low levels and remain less than 0.5% of total assets. Net charge offs for the quarter were just 5 basis points annualized, while the allowance for loan losses increased to 135 basis points of total loans. I will now turn you over to Carl, who will review the company's Q2 results. Speaker 300:02:57Thank you, Paul. This quarter, total assets finished at $11,200,000,000 which is $316,000,000 lower than Q1. As Paul noted, we reduced cash and securities $419,000,000 in the quarter after building on balance sheet liquidity by $513,000,000 in Q1 during market disruption caused by the failure of several banks. As we began normalizing these positions during the with growth of $120,000,000 split between evenly split between commercial real estate and equipment finance with declines of $14,000,000 in C and I $12,000,000 in consumer loans. In the second quarter, we originated $506,000,000 in loans at a weighted average Coupon of 7 14 basis points. Speaker 300:03:52The weighted average coupon on the core loan portfolio rose 20 basis points during the quarter to 568 basis points at June 30. On a linked quarter basis, the yield on the loan portfolio increased 37 basis points to 5.7%. On the funding side, core deposits grew $110,000,000 and broker deposits were reduced $49,000,000 for net growth in deposits of $61,000,000 The growth was in higher rate savings and time deposits, partially offset by declines in DDA, NOW and money market products. The average cost of total deposits increased 58 basis points in the quarter to 204 basis points. While total average interest earning assets increased $193,000,000 on a linked quarter basis, the net interest margin declined 10 basis points to 3.26 percent, resulting in net interest income of $86,000,000 which was consistent with the Q1. Speaker 300:04:48Non interest income was $5,500,000 for the quarter, which is down $5,700,000 when excluding the $1,700,000 in security gains realized in Q1. The decline is due to lower customer swap activity as well as lower gain on sale related to loan participations. We also recorded a negative $367,000 mark to market on risk participation agreements versus a positive $1,600,000 mark in Q1, which is reflected in other non interest income. Expenses were $57,800,000 for the quarter versus $64,800,000 in Q1. Excluding the impact of merger charges in both quarters, expenses declined $1,500,000 Compensation and benefits were down 3,100,000 as a result of the full quarter run rate of anticipated efficiencies after the PCSB systems conversions were completed in the Q1, as well as lower benefit costs. Speaker 300:05:45This was partially offset by higher professional fees and FDIC assessments. Provision for credit losses was $5,800,000 for the quarter versus $1,100,000 in net charge offs, resulting in allowance for loan losses increasing to $125,800,000 representing 135 basis points on total loans. Yesterday, the Board approved maintaining our quarterly dividend at $0.135 per share to be paid on August 25 to stockholders on record as of August 11. On an annualized basis, our dividend payout approximates a yield of approximately 4.9%. This concludes my formal comments. Speaker 300:06:26I'll turn it back to Paul. Speaker 200:06:29Thanks, Karl. And now we will open it up for questions. Operator00:06:34Thank Our first question for today comes from Mark Fitzgibbon of Piper Sandler. Your line is now open. Please go ahead. Speaker 400:06:57Hey, guys. Good afternoon. Hi, Mark. Hi, Mark. First question, maybe for you, Paul. Speaker 400:07:04We're sort of 6 months Past the PCSB closing, I wondered if you have noticed any surprises with that franchise or in Things you've come across in that market that are a little surprising positively or negatively? Speaker 200:07:22Mostly positive. I mean, there are no big surprises, Mark, but they are thrilled being part of this company and we have brought a lot of New modern things for them. They had been sort of behind the 8 ball in terms of technology and things like that. So they're enjoying playing with all their new toys and I think we have yet to see the benefit of that as they get used to them and start exposing them to their customers, The broader product lines that we have and things like that. So I've been pleasantly surprised, but not in a bad way. Speaker 200:07:56And we're feeling very good that it has been consolidated very nicely and is operating well. Okay. Speaker 400:08:06And then secondly, Carl, I wonder if you could help us think about the net interest margin in the 3rd Quarter, you guys obviously had pretty good control and were able to sort of control the descent, if you will, of the margin. How are you thinking about it for 3Q? Speaker 300:08:25Sure, Mark. So when it comes to the margin right now, it's deposits, deposits, deposits, Right. So and basically, I think of that with 3 drivers. 1, the first is pricing. So we are I think we are largely caught up On the historical betas, but I anticipate betas to be slightly higher this cycle due to the greater convenience customers have to move funds and access more choices. Speaker 300:08:50So we expect to continue to see a bit more pressure On the pricing side, but dramatically slower given the environment and also dependent on competition. 2nd is the funding mix. So we've seen a lot of transfers of funds out of DDA and NOW accounts into savings and CDs. But I also expect that to diminish over the next quarter or so and basically stabilize. And third is the growth side. Speaker 300:09:20And So I'm very optimistic given everything I'm hearing from our bankers and what they're working on as well as how busy our cash management folks are. So and I know it's a very, very competitive environment, but I feel very good about where things are headed. So Well, we'll continue to see pressure on the funding side. I think it's going to be largely offset by the repricing of our assets. And so right now, our models reflect our margin being down as much as 3 basis points next quarter, 3 or 4 basis points But possibly being flat, so that's kind of where we are right now. Speaker 300:09:57But that being said, I want to highlight that there's significant sources of uncertainty around this And particularly around the economic outlook and the competition for deposits. Speaker 400:10:08Okay, great. And then I wonder if you could share any details on that $9,300,000 commercial relationship that went on non accrual and also the $2,800,000 CRE loan, any without revealing anything specific on the bar, would you be able to kind of share What sort of drove those or any characteristics of the loans and what the LTVs look like? Speaker 200:10:34The C and I loan It's technically in bankruptcy, so we're going to start to see some of the proceeds from that liquidation, if you will. And I think it's very well reserved with specific reserves. And it is an operating company, which The different operating units have joined up with other similar kinds of organizations. So I think it It will take its pace and it will get settled up and probably over the balance of this year. The real estate loan is one that is in the Boston Central Business District and it's had occupancy problems for some time. Speaker 200:11:18It's under $3,000,000 It's got a good owner. I think we're all going to be exercising a little bit of patience, But I don't see any major auto crashes there. It's sort of a poster child of what a smallish business district building would look like. Thank you. Operator00:11:42Thank you. Our next question comes from Steve Moss of Raymond James. Your line is now open. Please go ahead. Speaker 500:11:51Good afternoon. Maybe just following up on the margin here, curious, What's the rate on new originations that you're receiving these days? Speaker 300:12:05Like I said, during the quarter, we were originating on balance about 7 14 basis points on a weighted Average amount from a coupon standpoint. I expect that to continue to increase And we had some things that were legacy loans that we're getting draws on that were lower rates, but a lot of things right now are Being originated north of that, so feel good about that. Speaker 500:12:35Okay. Got you. And then in terms of just now post the PCSB merger, curious how much purchase accounting is contributing to the margin? Any quantity around there? Speaker 300:12:50So on the loan side, there was about $2,900,000 In the quarter associated with purchase accounting on that side. And I think there was about $300,000 to $400,000 on the negative side on the deposits. So net net about $2,500,000 contributing to net interest income in the quarter. Speaker 500:13:12Okay. Great. I appreciate that. And then just in terms of expenses here, Speaker 300:13:19You know, recently, Speaker 500:13:20I think, close to what you guys guided to. Just curious how you're thinking about the Thanks for hearing you're going forward and maybe any areas of investment you all may have. Speaker 300:13:32So we've gotten all the efficiencies we had expected out of the acquisition of PCSB that kind of is reflected this quarter. We Still continuing to invest in the business. We're still particularly around the customer facing side of things. I don't see a lot more being added in the back office that I'm aware of at the moment. But we're open we just opened up a branch At Bank Rhode Island, we still have other activities moving forward. Speaker 300:14:02So we'll continue to build that out. That's Our plans, nothing significant that's going to drive it materially. I think FDIC is going to be running at a higher run rate. I do Like that to be probably in the $2,100,000 to $2,200,000 range next quarter. We had a little bit of a true up this quarter for Q1, when we got the bill from the FDIC, it was a little higher than we thought it was going to be. Speaker 300:14:26And I think legal and professional fees should moderate as well going forward. We have a couple of items in there. So we feel we're keeping a very close eye on expenses. Okay. Speaker 600:14:42Great. Thank you very much. Speaker 200:14:44Okay, Steve. Operator00:14:47Thank you. Our next question comes from Chris O'Connell from KBW. Chris, your line is now open. Please go ahead. Speaker 600:15:02Hey, good afternoon. Speaker 200:15:04Hi, Chris. Hi, Chris. Speaker 300:15:07I was Speaker 600:15:07hoping to just start off with the balance sheet movements this quarter on the securities and cash. Is that more or less finished at this point? And what's the level of cash and securities that you would look to keep on balance sheet longer term? Speaker 300:15:25Yes. So I'd say it's largely done. I'd say we probably have $50,000,000 to $100,000,000 that we would let off let out over time. I'm very comfortable in the 8% to 12 Percent range of having cash and securities on the books in a normal operating environment. But there are certain times we You feel like, hey, we should have a little bit more liquidity on hand just in case something happens. Speaker 300:15:53And that's more that's driven by the market the environment. We have Tremendous amounts of access to liquidity, quite frankly. But sometimes you need a little bit more on balance sheet, makes Regulators happy, it makes analysts happy, it makes I can sleep easier at night, all those types of things. So but overall, I think we're happy in the 8% to 12% range. I'd say we're probably close to 10% at this point right now. Speaker 600:16:22Okay, great. Speaker 300:16:23It doesn't move in so much because the cash on hand is around you're earning over 5% at the Fed And we're paying around that same amount, federal home loan bank borrowings or brokered deposits. So those are the levers around that. Speaker 600:16:41Yes. And on the deposit side, you guys had Really good growth in the savings line. And I think you mentioned in the prepared comments that there is a Higher yield savings product out there, maybe just provide a little color around that? Speaker 300:17:02Sure. So we have very competitive CD rates out there, but there are folks that would like to have something more liquid than that. So we offer a high rate savings product. Minimum balance is $100,000 It really was made to created to attract new deposits as well as take care of our current customer base. And that is paid I think we're paying $4.35 at the moment on that product. Speaker 300:17:27When we originally started that product, it was around 4%. Speaker 600:17:35Got it. Got it. And is that ongoing still? Speaker 200:17:40Absolutely. Operator00:17:43Great. Speaker 600:17:46And then around the NIM commentary, it sounds like Given the moves this quarter and some of the impact in deposit rates slowing down a bit, There should be minimal compression next quarter. Does that imply that we start to kind of bottom out here In late 3Q, 4Q based on the current yield curve? Speaker 300:18:12Yes. Based on our current modeling, it suggests that we would be down slightly in Q3 to possibly flat and then actually increasing in Q4 going forward. But I'll also caution you there's a Lot of assumptions at that. Speaker 600:18:35Yes. You mentioned, I believe in the comments That you expect the beta to be higher this cycle. Is that higher than the 39% beta? I think that's In the IRR disclosures in the slide deck? Speaker 300:18:55That's correct. That's correct. So our IRR disclosures assumes a flat balance sheet, huge assumption right there. And the historical betas that we've observed over past cycles. And so that's what the models And then my comments, we also do a lot of simulations away from that. Speaker 300:19:20And that's what I'm basing my Guidance, sorry. Speaker 600:19:28Okay, great. I know you mentioned last quarter that given the pipeline you're seeing there'd be a little bit less Derivative in participation income, obviously, fees dropped off quite a bit this quarter relative to 1Q late last year, any sense in the pipelines there in customer demand on those types of products and Where fees could shake out in the second half of the year? Speaker 300:20:03Yes. It's hard to provide guidance around that. I would On the swap side, that's all dependent on the loan volumes and what we're doing and how we're structuring those transactions. And that can be very lumpy. So we can have them or we can't or we may not. Speaker 300:20:19On the sorry, I don't want to provide that We could see a nice bounce back in that line item. On the participation side, I'm less optimistic on. I think the participation that's a market type thing. I think a lot of banks are not participating things in or able to participate things out. And so I think That revenue line is probably going to be hamstrained for a while. Speaker 600:20:48Okay, great. And then on the capital side, I mean, you guys are at a pretty good capital levels now all around, ticked up above 8% on TC. But it sounds like you have a relatively more robust growth outlook than a lot of the industry Into the back half of the year, are you guys considering at all any share repurchases at this time? Speaker 300:21:19No. We continue to prioritize paying a very competitive dividend and funding our organic growth. Right now, we're not planning any I'll share repurchase at this time. Speaker 600:21:34Okay, great. That's all I have for now. Thanks for taking my question. Speaker 300:21:38Okay, Chris. Operator00:21:42Thank you. This concludes our question and answer session. I'd like to turn the conference back over to Mr. Perrault any closing remarks. Speaker 200:21:51Thanks, Alex, and thank you all for joining us today, and we will look forward to talking with you again next quarter. Good day. Operator00:22:00Thank you for joining today's call. You may now disconnect your lines.Read morePowered by Conference Call Audio Live Call not available Earnings Conference CallBrookline Bancorp Q2 202300:00 / 00:00Speed:1x1.25x1.5x2x Earnings DocumentsSlide DeckPress Release(8-K)Quarterly report(10-Q) Brookline Bancorp Earnings HeadlinesBrookline Bancorp (BRKL) Expected to Announce Earnings on WednesdayApril 16, 2025 | americanbankingnews.comBrookline Bancorp, Inc. 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Email Address About Brookline BancorpBrookline 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.View Brookline Bancorp ProfileRead more More Earnings Resources from MarketBeat Earnings Tools Today's Earnings Tomorrow's Earnings Next Week's Earnings Upcoming Earnings Calls Earnings Newsletter Earnings Call Transcripts Earnings Beats & Misses Corporate Guidance Earnings Screener Earnings By Country U.S. Earnings Reports Canadian Earnings Reports U.K. Earnings Reports Latest Articles Archer Aviation Unveils NYC Network Ahead of Key Earnings Report3 Reasons to Like the Look of Amazon Ahead of EarningsTesla Stock Eyes Breakout With Earnings on DeckJohnson & Johnson Earnings Were More Good Than Bad—Time to Buy? 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There are 7 speakers on the call. Operator00:00:00Afternoon, and welcome to the Brookline Bancorp Inc. 2nd Quarter 2023 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. Operator00:00:15I would now like to turn the conference over to Brookline Bank Corp's Attorney, Laura Vaughn. Please go ahead. Speaker 100:00:22Thank you, Alex, and good afternoon, everyone. Yesterday, we issued our earnings release and presentation, which is available on the Investor Relations page of our website, bookingsincorp.com and has been filed with the SEC. We will not be doing a slide slip this quarter. This afternoon's call will be hosted by Paul A. Perrault and Carl M. Speaker 100:00:43Carlson. 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 needed 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 comparison and reconciliation to GAAP earnings, please see our earnings release. Speaker 100:01:31I'm pleased to introduce Brookline Bancorp's Chairman and CEO, Paul Peril. Speaker 200:01:36Thank you, Laura, and good afternoon, everyone. Thank you for joining us today on this earnings call. Yesterday, we reported net income for the quarter of $21,900,000 or $0.25 per share. Excluding about $1,000,000 in merger charges, Non GAAP operating earnings were $23,200,000 with operating EPS of $0.26 As we discussed during last quarter's call, in the Q1, we added over $500,000,000 to our on balance sheet liquidity in the form of cash and securities. During the Q2, we prudently reduced most of this position. Speaker 200:02:14Our bankers remain very active in the markets And while we continue to be prudent and attentive to our existing customers, we are seeing opportunities to bank strong new relationships. Loan portfolio grew $94,000,000 this quarter and core deposits grew by $110,000,000 Non performing assets increased in the quarter off historically low levels and remain less than 0.5% of total assets. Net charge offs for the quarter were just 5 basis points annualized, while the allowance for loan losses increased to 135 basis points of total loans. I will now turn you over to Carl, who will review the company's Q2 results. Speaker 300:02:57Thank you, Paul. This quarter, total assets finished at $11,200,000,000 which is $316,000,000 lower than Q1. As Paul noted, we reduced cash and securities $419,000,000 in the quarter after building on balance sheet liquidity by $513,000,000 in Q1 during market disruption caused by the failure of several banks. As we began normalizing these positions during the with growth of $120,000,000 split between evenly split between commercial real estate and equipment finance with declines of $14,000,000 in C and I $12,000,000 in consumer loans. In the second quarter, we originated $506,000,000 in loans at a weighted average Coupon of 7 14 basis points. Speaker 300:03:52The weighted average coupon on the core loan portfolio rose 20 basis points during the quarter to 568 basis points at June 30. On a linked quarter basis, the yield on the loan portfolio increased 37 basis points to 5.7%. On the funding side, core deposits grew $110,000,000 and broker deposits were reduced $49,000,000 for net growth in deposits of $61,000,000 The growth was in higher rate savings and time deposits, partially offset by declines in DDA, NOW and money market products. The average cost of total deposits increased 58 basis points in the quarter to 204 basis points. While total average interest earning assets increased $193,000,000 on a linked quarter basis, the net interest margin declined 10 basis points to 3.26 percent, resulting in net interest income of $86,000,000 which was consistent with the Q1. Speaker 300:04:48Non interest income was $5,500,000 for the quarter, which is down $5,700,000 when excluding the $1,700,000 in security gains realized in Q1. The decline is due to lower customer swap activity as well as lower gain on sale related to loan participations. We also recorded a negative $367,000 mark to market on risk participation agreements versus a positive $1,600,000 mark in Q1, which is reflected in other non interest income. Expenses were $57,800,000 for the quarter versus $64,800,000 in Q1. Excluding the impact of merger charges in both quarters, expenses declined $1,500,000 Compensation and benefits were down 3,100,000 as a result of the full quarter run rate of anticipated efficiencies after the PCSB systems conversions were completed in the Q1, as well as lower benefit costs. Speaker 300:05:45This was partially offset by higher professional fees and FDIC assessments. Provision for credit losses was $5,800,000 for the quarter versus $1,100,000 in net charge offs, resulting in allowance for loan losses increasing to $125,800,000 representing 135 basis points on total loans. Yesterday, the Board approved maintaining our quarterly dividend at $0.135 per share to be paid on August 25 to stockholders on record as of August 11. On an annualized basis, our dividend payout approximates a yield of approximately 4.9%. This concludes my formal comments. Speaker 300:06:26I'll turn it back to Paul. Speaker 200:06:29Thanks, Karl. And now we will open it up for questions. Operator00:06:34Thank Our first question for today comes from Mark Fitzgibbon of Piper Sandler. Your line is now open. Please go ahead. Speaker 400:06:57Hey, guys. Good afternoon. Hi, Mark. Hi, Mark. First question, maybe for you, Paul. Speaker 400:07:04We're sort of 6 months Past the PCSB closing, I wondered if you have noticed any surprises with that franchise or in Things you've come across in that market that are a little surprising positively or negatively? Speaker 200:07:22Mostly positive. I mean, there are no big surprises, Mark, but they are thrilled being part of this company and we have brought a lot of New modern things for them. They had been sort of behind the 8 ball in terms of technology and things like that. So they're enjoying playing with all their new toys and I think we have yet to see the benefit of that as they get used to them and start exposing them to their customers, The broader product lines that we have and things like that. So I've been pleasantly surprised, but not in a bad way. Speaker 200:07:56And we're feeling very good that it has been consolidated very nicely and is operating well. Okay. Speaker 400:08:06And then secondly, Carl, I wonder if you could help us think about the net interest margin in the 3rd Quarter, you guys obviously had pretty good control and were able to sort of control the descent, if you will, of the margin. How are you thinking about it for 3Q? Speaker 300:08:25Sure, Mark. So when it comes to the margin right now, it's deposits, deposits, deposits, Right. So and basically, I think of that with 3 drivers. 1, the first is pricing. So we are I think we are largely caught up On the historical betas, but I anticipate betas to be slightly higher this cycle due to the greater convenience customers have to move funds and access more choices. Speaker 300:08:50So we expect to continue to see a bit more pressure On the pricing side, but dramatically slower given the environment and also dependent on competition. 2nd is the funding mix. So we've seen a lot of transfers of funds out of DDA and NOW accounts into savings and CDs. But I also expect that to diminish over the next quarter or so and basically stabilize. And third is the growth side. Speaker 300:09:20And So I'm very optimistic given everything I'm hearing from our bankers and what they're working on as well as how busy our cash management folks are. So and I know it's a very, very competitive environment, but I feel very good about where things are headed. So Well, we'll continue to see pressure on the funding side. I think it's going to be largely offset by the repricing of our assets. And so right now, our models reflect our margin being down as much as 3 basis points next quarter, 3 or 4 basis points But possibly being flat, so that's kind of where we are right now. Speaker 300:09:57But that being said, I want to highlight that there's significant sources of uncertainty around this And particularly around the economic outlook and the competition for deposits. Speaker 400:10:08Okay, great. And then I wonder if you could share any details on that $9,300,000 commercial relationship that went on non accrual and also the $2,800,000 CRE loan, any without revealing anything specific on the bar, would you be able to kind of share What sort of drove those or any characteristics of the loans and what the LTVs look like? Speaker 200:10:34The C and I loan It's technically in bankruptcy, so we're going to start to see some of the proceeds from that liquidation, if you will. And I think it's very well reserved with specific reserves. And it is an operating company, which The different operating units have joined up with other similar kinds of organizations. So I think it It will take its pace and it will get settled up and probably over the balance of this year. The real estate loan is one that is in the Boston Central Business District and it's had occupancy problems for some time. Speaker 200:11:18It's under $3,000,000 It's got a good owner. I think we're all going to be exercising a little bit of patience, But I don't see any major auto crashes there. It's sort of a poster child of what a smallish business district building would look like. Thank you. Operator00:11:42Thank you. Our next question comes from Steve Moss of Raymond James. Your line is now open. Please go ahead. Speaker 500:11:51Good afternoon. Maybe just following up on the margin here, curious, What's the rate on new originations that you're receiving these days? Speaker 300:12:05Like I said, during the quarter, we were originating on balance about 7 14 basis points on a weighted Average amount from a coupon standpoint. I expect that to continue to increase And we had some things that were legacy loans that we're getting draws on that were lower rates, but a lot of things right now are Being originated north of that, so feel good about that. Speaker 500:12:35Okay. Got you. And then in terms of just now post the PCSB merger, curious how much purchase accounting is contributing to the margin? Any quantity around there? Speaker 300:12:50So on the loan side, there was about $2,900,000 In the quarter associated with purchase accounting on that side. And I think there was about $300,000 to $400,000 on the negative side on the deposits. So net net about $2,500,000 contributing to net interest income in the quarter. Speaker 500:13:12Okay. Great. I appreciate that. And then just in terms of expenses here, Speaker 300:13:19You know, recently, Speaker 500:13:20I think, close to what you guys guided to. Just curious how you're thinking about the Thanks for hearing you're going forward and maybe any areas of investment you all may have. Speaker 300:13:32So we've gotten all the efficiencies we had expected out of the acquisition of PCSB that kind of is reflected this quarter. We Still continuing to invest in the business. We're still particularly around the customer facing side of things. I don't see a lot more being added in the back office that I'm aware of at the moment. But we're open we just opened up a branch At Bank Rhode Island, we still have other activities moving forward. Speaker 300:14:02So we'll continue to build that out. That's Our plans, nothing significant that's going to drive it materially. I think FDIC is going to be running at a higher run rate. I do Like that to be probably in the $2,100,000 to $2,200,000 range next quarter. We had a little bit of a true up this quarter for Q1, when we got the bill from the FDIC, it was a little higher than we thought it was going to be. Speaker 300:14:26And I think legal and professional fees should moderate as well going forward. We have a couple of items in there. So we feel we're keeping a very close eye on expenses. Okay. Speaker 600:14:42Great. Thank you very much. Speaker 200:14:44Okay, Steve. Operator00:14:47Thank you. Our next question comes from Chris O'Connell from KBW. Chris, your line is now open. Please go ahead. Speaker 600:15:02Hey, good afternoon. Speaker 200:15:04Hi, Chris. Hi, Chris. Speaker 300:15:07I was Speaker 600:15:07hoping to just start off with the balance sheet movements this quarter on the securities and cash. Is that more or less finished at this point? And what's the level of cash and securities that you would look to keep on balance sheet longer term? Speaker 300:15:25Yes. So I'd say it's largely done. I'd say we probably have $50,000,000 to $100,000,000 that we would let off let out over time. I'm very comfortable in the 8% to 12 Percent range of having cash and securities on the books in a normal operating environment. But there are certain times we You feel like, hey, we should have a little bit more liquidity on hand just in case something happens. Speaker 300:15:53And that's more that's driven by the market the environment. We have Tremendous amounts of access to liquidity, quite frankly. But sometimes you need a little bit more on balance sheet, makes Regulators happy, it makes analysts happy, it makes I can sleep easier at night, all those types of things. So but overall, I think we're happy in the 8% to 12% range. I'd say we're probably close to 10% at this point right now. Speaker 600:16:22Okay, great. Speaker 300:16:23It doesn't move in so much because the cash on hand is around you're earning over 5% at the Fed And we're paying around that same amount, federal home loan bank borrowings or brokered deposits. So those are the levers around that. Speaker 600:16:41Yes. And on the deposit side, you guys had Really good growth in the savings line. And I think you mentioned in the prepared comments that there is a Higher yield savings product out there, maybe just provide a little color around that? Speaker 300:17:02Sure. So we have very competitive CD rates out there, but there are folks that would like to have something more liquid than that. So we offer a high rate savings product. Minimum balance is $100,000 It really was made to created to attract new deposits as well as take care of our current customer base. And that is paid I think we're paying $4.35 at the moment on that product. Speaker 300:17:27When we originally started that product, it was around 4%. Speaker 600:17:35Got it. Got it. And is that ongoing still? Speaker 200:17:40Absolutely. Operator00:17:43Great. Speaker 600:17:46And then around the NIM commentary, it sounds like Given the moves this quarter and some of the impact in deposit rates slowing down a bit, There should be minimal compression next quarter. Does that imply that we start to kind of bottom out here In late 3Q, 4Q based on the current yield curve? Speaker 300:18:12Yes. Based on our current modeling, it suggests that we would be down slightly in Q3 to possibly flat and then actually increasing in Q4 going forward. But I'll also caution you there's a Lot of assumptions at that. Speaker 600:18:35Yes. You mentioned, I believe in the comments That you expect the beta to be higher this cycle. Is that higher than the 39% beta? I think that's In the IRR disclosures in the slide deck? Speaker 300:18:55That's correct. That's correct. So our IRR disclosures assumes a flat balance sheet, huge assumption right there. And the historical betas that we've observed over past cycles. And so that's what the models And then my comments, we also do a lot of simulations away from that. Speaker 300:19:20And that's what I'm basing my Guidance, sorry. Speaker 600:19:28Okay, great. I know you mentioned last quarter that given the pipeline you're seeing there'd be a little bit less Derivative in participation income, obviously, fees dropped off quite a bit this quarter relative to 1Q late last year, any sense in the pipelines there in customer demand on those types of products and Where fees could shake out in the second half of the year? Speaker 300:20:03Yes. It's hard to provide guidance around that. I would On the swap side, that's all dependent on the loan volumes and what we're doing and how we're structuring those transactions. And that can be very lumpy. So we can have them or we can't or we may not. Speaker 300:20:19On the sorry, I don't want to provide that We could see a nice bounce back in that line item. On the participation side, I'm less optimistic on. I think the participation that's a market type thing. I think a lot of banks are not participating things in or able to participate things out. And so I think That revenue line is probably going to be hamstrained for a while. Speaker 600:20:48Okay, great. And then on the capital side, I mean, you guys are at a pretty good capital levels now all around, ticked up above 8% on TC. But it sounds like you have a relatively more robust growth outlook than a lot of the industry Into the back half of the year, are you guys considering at all any share repurchases at this time? Speaker 300:21:19No. We continue to prioritize paying a very competitive dividend and funding our organic growth. Right now, we're not planning any I'll share repurchase at this time. Speaker 600:21:34Okay, great. That's all I have for now. Thanks for taking my question. Speaker 300:21:38Okay, Chris. Operator00:21:42Thank you. This concludes our question and answer session. I'd like to turn the conference back over to Mr. Perrault any closing remarks. Speaker 200:21:51Thanks, Alex, and thank you all for joining us today, and we will look forward to talking with you again next quarter. Good day. Operator00:22:00Thank you for joining today's call. You may now disconnect your lines.Read morePowered by