Brookline Bancorp Reports Strong Revenue Growth Amid Loan Portfolio Challenges

Brookline Bancorp Inc reported Q2 2025 earnings of $22 million or $0.25 per share, with net interest income increasing by $2.9 million to $88.7 million. Customer deposits increased by $59 million, and the merger with Berkshire Hills is progressing smoothly. The loan portfolio contracted by $61 million, and the Boston office portfolio remains under stress. Net interest margin is expected to improve modestly in Q3.

Brookline Bancorp Inc (BBK) reported its Q2 2025 earnings, showcasing a robust performance with a net income of $22 million, or $0.25 per share. The company's net interest income increased by $2.9 million to $88.7 million, driven by a 10 basis points (bps) improvement in net interest margin. Customer deposits surged by $59 million, reflecting a strong funding environment [1].

The bank's loan portfolio contracted by $61 million, primarily due to a reduction in commercial real estate and specialty vehicle exposures. However, commercial and consumer loans grew by $53 million and $27 million, respectively. The Boston office portfolio remains under stress, with several credits downgraded and additional reserves added. The office portfolio outside of Boston continues to perform well [1].

The merger of equals with Berkshire Hills, approved by shareholders in May, is progressing smoothly. Systems integration is planned for February 9, with no major issues identified to date. The company anticipates a 4-8 bps increase in net interest margin in Q3, low-single-digit loan growth, 4-5% deposit growth, and quarterly noninterest income of $5.5-$6.5 million [1].

Brookline Bancorp's effective tax rate is expected to be in the range of 24.25%, excluding non-deductible merger charges. The company is managing expenses, particularly staffing, in preparation for the merger. The bank expects modest improvements in the net interest margin, depending on market conditions and Federal Reserve actions [1].

The first question during the earnings call asked about the timing of the merger and systems conversion. The CEO, Paul Perl, mentioned that the merger is not an acquisition but a merger of equals, with systems conversion planned for mid-February and a potential closing date in September, pending Federal Reserve approval. Regarding the size of loans after the merger, Perl indicated that well-sponsored relationships could approach $100 million, subject to legal limits [1].

Brookline Bancorp continues to manage its Boston office portfolio under stress, adding additional reserves for two commercial real estate credits. The company is cautiously optimistic about the merger's potential to enhance products and services for combined customers [1].

References:
[1] https://www.marketbeat.com/earnings/reports/2025-7-23-brookline-bancorp-inc-stock/