Brookline Bancorp, Inc.

Brookline Bancorp said second-quarter earnings were approximately $22 million, or $0.25 per share. Total revenue was $94.7 million, up 3% sequentially and 10% year over year; net interest income rose $2.9 million to $88.7 million, fee income was about $6 million, and net interest margin improved 10 basis points to 332 basis points, with a June spot margin of 339 basis points. Noninterest expense, excluding merger charges, was $57.7 million, down $1.3 million from Q1. The provision for credit losses was $7 million, and net charge-offs were $5.1 million. Loans declined $61 million overall, with commercial loans up $53 million and consumer loans up $27 million, while commercial real estate and equipment finance fell $95 million and $46 million, respectively. Customer deposits increased $59 million. For Q3, management expects net interest margin to improve by 4 to 8 basis points, no rate cuts are assumed in that estimate, loan growth to be in the low single digits for the rest of 2025, deposit growth of 4% to 5%, quarterly noninterest income of $5.5 million to $6.5 million, and an effective tax rate of 24.25% excluding nondeductible merger charges.

Paul Perrault framed the quarter as another step in a deliberate balance-sheet reset ahead of the merger of equals with Berkshire Hills. He said the loan contraction was intentional, with reductions in commercial real estate and specialty vehicles offset by growth in commercial and consumer lending, and emphasized better funding trends and no major integration issues so far. His tone was constructive but cautious, especially on Boston office credit stress and on waiting for regulatory timing before the merger closes.

Carl Carlson highlighted the operating improvement in margin and revenue, citing a 10 basis point NIM increase to 332 basis points, $88.7 million of net interest income, and $94.7 million of revenue. He noted noninterest expense excluding merger charges declined to $57.7 million, the provision was $7 million, and reserve coverage rose to 132 basis points of total loans. On funding and outlook, he pointed to upcoming repricing in CDs, brokered CDs, and FHLB advances, estimated Q3 margin up 4 to 8 basis points, deposit growth of 4% to 5%, and low-single-digit loan growth for the rest of 2025. He also reiterated that the board kept the quarterly dividend at $0.135 and said the company wants CRE down to 300% relatively quickly.

Analysts focused on merger timing, capital plans, credit stress, and the impact of the proposed FASB CECL change. Management said the systems conversion is targeted for February 9 and, if approvals line up, closing could be as early as September; they also said the Day 2 CECL charge had been estimated at $94.5 million pre-tax, about $71 million after tax, or roughly $0.84 per share, and they would adopt the new accounting if permitted. On credit, they said Boston office issues remain pressured, but the larger office portfolio outside Boston is performing well, and a Mass Housing takeout delay is procedural rather than a credit problem.