Brookline Bancorp Reports $68.7 Million Net Income, Plans Merger with Berkshire Hills Bancorp

Brookline Bancorp, Inc. reported its financial results for the fiscal year ending December 31, 2024, revealing a net income of $68.7 million, or $0.77 per share, a decrease of 8.4% from the previous year's net income of $75.0 million, or $0.85 per share. The decline in profitability was attributed to a $10.1 million drop in net interest income, which fell to $329.6 million from $339.7 million in 2023. The company's net interest margin also decreased to 3.06% from 3.24%, primarily due to rising costs of interest-bearing liabilities, which increased to 3.59% from 3.00%. Total assets grew by 4.6% to $11.9 billion, driven by increases in cash and cash equivalents, as well as loans and leases.

In terms of operational metrics, Brookline Bancorp's loan and lease portfolio increased by $137.7 million, or 1.4%, reaching $9.8 billion. The commercial loan portfolio, which constitutes 84.1% of total loans, saw a modest increase of $58.6 million. Total deposits rose by $353.5 million, or 4.1%, to $8.9 billion, although the proportion of core deposits decreased from 71.3% to 69.1%. The allowance for loan and lease losses increased to $125.1 million, representing 1.28% of total loans, up from 1.22% the previous year. Nonperforming assets also rose to $70.5 million, or 0.59% of total assets, compared to $45.3 million, or 0.40% in 2023.

Strategically, Brookline Bancorp is in the process of merging with Berkshire Hills Bancorp, Inc., a transaction expected to close in the second half of 2025. The merger agreement stipulates that each share of Brookline's common stock will be exchanged for 0.42 shares of Berkshire common stock. This merger aims to enhance the combined company's market position and operational efficiencies. The integration of operations is anticipated to yield various benefits, including cost savings and improved technology, although management acknowledges the challenges associated with merging two independent entities.

The company reported a total employee count of 1,000 as of December 31, 2024, reflecting a commitment to maintaining a skilled workforce amid competitive pressures in the financial services industry. Brookline Bancorp continues to focus on expanding its commercial lending activities while managing credit risk effectively. The company’s outlook remains cautious, with management emphasizing the importance of adapting to changing economic conditions and interest rate environments to sustain profitability and growth.

Looking ahead, Brookline Bancorp anticipates that net interest margin may improve as deposit costs stabilize and legacy loans reprice. However, the company remains vigilant regarding potential economic downturns that could impact asset quality and borrower repayment capabilities. The management's forward-looking statements highlight the need for ongoing assessment of market conditions and strategic adjustments to navigate the evolving financial landscape.