Brookline Bancorp, Inc. (NASDAQ:BRKL)
Q1 2017 Earnings Conference Call
April 27, 2017, 01:30 p.m. ET
Marissa Frerk – Associate General Counsel
Paul Perrault – President and CEO
Carl Carlson – CFO
Mark Fitzgibbon – Sandler O’Neill and Partners
Laurie Hunsicker – Compass Point
Collyn Gilbert – KBW
Good day and welcome to the Brookline Bancorp Incorporated’s First Quarter 2017 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. Please note this event is being recorded.
I would now like to turn the conference over to Marissa Frerk, Associate General Counsel. Please go ahead.
Thank you, Ryan. Good afternoon and welcome to Brookline Bancorp Inc.’s first quarter 2017 earnings conference call. This afternoon’s call will be hosted by Brookline Bancorp’s Executive team, Paul Perrault, Chairman and Chief Executive Officer; and Carl Carlson, Chief Financial Officer.
Before we begin, please note that this call may contain forward looking statements with respect to the financial conditions, results of operation and business of Brookline Bancorp.
Actual results may differ from these forward looking statements. Factors that may cause actual results to differ include those identified in our Annual Report on Form 10-K and our earnings press release. Brookline Bancorp cautions you against unduly relying upon any forward-looking statements and disclaims any intent to update publicly any forward-looking statement, whether in response to new information, future events or otherwise.
And now I am please to introduce Brookline Bancorp Inc.’s Chairman and CEO, Paul Perrault.
Thank you, Marissa. Good afternoon and welcome to Brookline Bancorp’s first quarter earnings call. I’m accompanied today by our Chief Financial Officer, Carl Carlson, who will walk you through our quarterly financial results following my comments.
Yesterday, we reported $13.4 million in net income or $0.19 per share for the first quarter of 2017 compared to $12.8 million or $0.18 per share for the first quarter of 2016. Loan balances grew $63 million or 4.7% annualized and our deposits grew $41 million from the end of the year.
We’ve opened a new branch in Danvers, Massachusetts and we are very happy with the reception by the community. We are confident that we have the right team in place to grow our brand in that particular market.
Although we are still operating in a challenging interest rate environment, the recent rate hikes in December and March suggest that the headwinds of margin contraction may have finally ended.
Our net interest margin for the first quarter was 3.53%, an increase of 13 basis points from the fourth quarter. Non-interest income grew by $10.5 million from the fourth quarter due to an $11.4 million gain on sale of securities related to the acquisition of Northeast Retirement Services by Community Bank Systems. We received stock in cash in the transaction and the CBU stock received had been sold by the end of the first quarter.
Excluding this gain, our efficiency ratio increased slightly to 58.6% due to seasonal compensation related expenses and increased occupancy expenses associated with the opening of the branches in Danvers and Middletown, Rhode Island.
We have a great team of employees that come to work every day to serve our customers and our communities making Brooklyn Bancorp one of the region’s leading commercial banks.
I will now turn you over to Carl, who will review the company’s first quarter results in some more detail.
Thank you, Paul. In the first quarter, average loans from $71.5 million total interest-earnings assets grew $35.4 million from fourth quarter. Net interest income increased $1.2 million from the fourth quarter as loan growth and higher short-term interest rates drove interest income with only modest increases in interest expense.
About Brookline Bancorp, Inc.
Brookline Bancorp, Inc. operates as a multi-bank holding company for Brookline Bank and its subsidiaries; Bank Rhode Island and its subsidiaries; First Ipswich Bank and its subsidiaries, and Brookline Securities Corp. As a commercially-focused financial institution with approximately 50 banking offices in greater Boston, the north shore of Massachusetts and Rhode Island, the Company offers commercial, business and retail banking services, including cash management products, online banking services, consumer and residential loans and investment services in central New England. The Company’s activities include acceptance of commercial; municipal and retail deposits; origination of mortgage loans on commercial and residential real estate located principally in Massachusetts and Rhode Island; origination of commercial loans and leases to small- and mid-sized businesses; investment in debt and equity securities, and the offering of cash management and investment advisory services.