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Brookline Bancorp (BRKL)
NASDAQ:BRKL
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Brookline Bancorp
(NASDAQ:BRKL)
67Neutral
Positive Factors
Earnings
The merger of BHLB and BRKL is expected to positively impact long-term earnings.
Negative Factors
Execution Risks
The rating for BRKL is lowered to Market Perform due to anticipated execution risks similar to other recent mergers.
Stock Performance
The shares are likely to remain range-bound for the next few quarters due to the merger announcement.
Brookline Bancorp (BRKL) vs. S&P 500 (SPY)
Market Cap
$957.87M
Dividend Yield4.9%
Average Volume (3M)539.48K
Price to Earnings (P/E)14.3
Beta (1Y)1.15
Revenue Growth7.79%
EPS Growth-8.83%
CountryUS
Employees1,018
SectorFinancial
Sector Strength81
IndustryBanking
Share Statistics
EPS (TTM)0.77
Shares Outstanding89,104,610
10 Day Avg. Volume615,887
30 Day Avg. Volume539,476
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)2.94
Price to Cash Flow (P/CF)5.70
P/FCF Ratio3.40
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$14.58Price Target Upside35.38% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering3
Brookline Bancorp Business Overview & Revenue Model
Company DescriptionBrookline Bancorp, Inc. (BRKL) is a multi-bank holding company headquartered in Boston, Massachusetts. It operates through its subsidiaries, which include Brookline Bank, Bank Rhode Island, and First Ipswich Bank. The company provides a wide range of banking products and financial services tailored to meet the needs of individuals, small to mid-sized businesses, and commercial clients. Its offerings include personal and business banking, commercial and residential lending, cash management, and investment services.
How the Company Makes MoneyBrookline Bancorp generates revenue primarily through interest income from loans and leases, which is the difference between the interest earned on loans and the interest paid on deposits. The company also earns non-interest income from fees and service charges associated with its financial products and services, such as account maintenance fees, transaction fees, and fees for investment advisory services. Additionally, Brookline Bancorp benefits from strategic partnerships and acquisitions that expand its market presence and customer base, further enhancing its revenue streams. The company's well-diversified portfolio allows it to mitigate risks and maintain a stable income flow.
Brookline Bancorp Financial Statement Overview
Summary
Brookline Bancorp demonstrates solid financial health with consistent revenue growth and strong operational margins. The balance sheet is robust with an improved debt position and strong equity. However, challenges in cash flow management are evident with declining operating cash flow that requires attention.Income Statement
Brookline Bancorp has demonstrated consistent revenue growth over the past years, with a notable increase in total revenue from $333 million in 2023 to $628 million in 2024. The gross profit margin remains stable, indicating effective cost management. However, the net profit margin saw a slight decline due to increased expenses, with net income decreasing from $75 million in 2023 to $68 million in 2024. The EBIT margin remains strong, highlighting operational efficiency.82
Very Positive
Balance Sheet
The balance sheet shows a healthy equity position, with stockholders' equity increasing to $1.2 billion in 2024. The debt-to-equity ratio has improved significantly due to the elimination of total debt in 2024, reflecting strong financial stability. The equity ratio is favorable, indicating a solid financial foundation. However, the return on equity has decreased slightly, suggesting room for improvement in utilizing equity effectively.78
Positive
Cash Flow
Operating cash flow has decreased from $117 million in 2023 to $58 million in 2024, which could indicate challenges in cash generation from operations. However, the company maintains a strong free cash flow position. The free cash flow to net income ratio is robust, but the decline in operating cash flow suggests the need for enhanced cash management strategies.75
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 628.52M | 333.44M | 328.12M | 309.36M | 284.81M | Gross Profit |
| 628.52M | 333.44M | 328.12M | 309.36M | 284.81M | EBIT |
| 623.28M | 135.39M | 191.39M | 154.59M | 62.08M | EBITDA |
| 0.00 | 109.91M | 146.47M | 161.26M | 68.83M | Net Income Common Stockholders |
| 68.72M | 75.00M | 109.74M | 115.44M | 47.63M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 543.67M | 133.03M | 1.04B | 1.05B | 1.18B | Total Assets |
| 11.91B | 11.38B | 9.22B | 8.60B | 8.94B | Total Debt |
| 1.56B | 1.41B | 1.45B | 377.83M | 844.39M | Net Debt |
| -64.67M | 1.28B | 1.26B | 311.56M | 409.47M | Total Liabilities |
| 10.68B | 10.18B | 8.23B | 377.83M | 844.39M | Stockholders Equity |
| 1.22B | 1.20B | 992.13M | 995.34M | 941.78M |
| Cash Flow | Free Cash Flow | |||
| 58.39M | 104.24M | 113.37M | 128.42M | 109.58M | Operating Cash Flow |
| 58.39M | 116.60M | 120.76M | 133.21M | 112.49M | Investing Cash Flow |
| -1.17M | -665.26M | -557.69M | 131.11M | -695.53M | Financing Cash Flow |
| -48.06M | 298.74M | 492.15M | -371.51M | 940.17M |
Brookline Bancorp Technical Analysis
Negative
10.77
Price Trends
11.79
Negative
11.75
Negative
10.46
Positive
Market Momentum
-0.26
Positive
26.16
Positive
10.63
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For BRKL, the sentiment is Negative. The current price of 10.77 is below the 20-day moving average (MA) of 11.73, below the 50-day MA of 11.79, and above the 200-day MA of 10.46, indicating a neutral trend. The MACD of -0.26 indicates Positive momentum. The RSI at 26.16 is Positive, neither overbought nor oversold. The STOCH value of 10.63 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for BRKL.
Brookline Bancorp Risk Analysis
Brookline Bancorp disclosed 44 risk factors in its most recent earnings report. Brookline Bancorp reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Brookline Bancorp Peers Comparison
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | $2.60B | 13.44 | 6.52% | 3.75% | 6.21% | -16.59% | |
71 Outperform | $188.54M | 16.75 | 4.93% | 3.01% | 9.56% | -20.10% | |
68 Neutral | $451.62M | 10.84 | 9.78% | 3.90% | 7.81% | -3.54% | |
67 Neutral | $957.87M | 14.32 | 5.68% | 4.90% | 7.79% | -8.83% | |
64 Neutral | $13.88B | 10.79 | 9.29% | 4.15% | 17.66% | -7.41% | |
61 Neutral | $512.79M | 18.74 | 6.72% | 1.05% | 14.02% | 5.59% |
* Financial Sector Average
Performance Comparison
BRKL
Brookline Bancorp
10.75
1.56
16.97%
BHB
Bar Harbor Bankshares
29.31
5.42
22.69%
HIFS
Hingham Institution For Savings
234.02
68.16
41.09%
INDB
Independent Bank
61.04
12.34
25.34%
WNEB
Western New England Bancorp
8.81
0.95
12.09%
Brookline Bancorp Earnings Call Summary
Earnings Call Date: Jan 29, 2025 | % Change Since: -9.65% | Next Earnings Date: Apr 23, 2025
Earnings Call Sentiment Neutral
The earnings call reflects a balanced sentiment with positive aspects from the merger announcement and net income improvement, but also challenges in specific loan sectors and increased operating expenses.Highlights
Merger Announcement with Berkshire Hills Bancorp
Brookline Bancorp announced a planned merger with Berkshire Hills Bancorp to create a $24 billion financial institution, expected to generate significant economies of scale and cost savings.
Net Income Growth
Core operating performance improved slightly with net income of $20.7 million and operating earnings per share of $0.23.
Increase in Customer Deposits
Customer deposits increased by $116 million during the quarter, with a focus on time deposits and money market growth.
Improved Net Interest Margin
Net interest margin improved by 5 basis points to 312 basis points for the quarter.
Lowlights
Commercial Real Estate and Equipment Finance Reductions
There were reductions of $63 million in commercial real estate and $30 million in equipment finance.
Loan Portfolio Yield Decline
The weighted average coupon on the core loan portfolio declined 11 basis points to 592 basis points due to repricing to lower rates.
Charge-Off in Equipment Finance
A $5.1 million charge-off was recorded in the quarter, related to a large grocery loan in the equipment finance sector.
Increase in Operating Expenses
Operating expenses increased to $60.3 million from $57.9 million due to additional incentive and commission-related expenses.
Company Guidance
During Brookline Bancorp, Inc.'s Fourth Quarter 2024 Earnings Conference Call, the company provided guidance on several key metrics. They reported a net income of $20.7 million and operating earnings per share of $0.23, with GAAP earnings reflecting a net income of $17.5 million and earnings per share of $0.20 due to $3.4 million in merger charges. Loan growth was modest at $24 million, while customer deposits increased by $116 million, contributing to a 5 basis point improvement in the net interest margin. The company plans to merge with Berkshire Hills Bancorp, forming a $24 billion institution with complementary market footprints in New England. For the upcoming year, Brookline anticipates low single-digit loan growth, mainly driven by commercial and consumer loans, with projected deposit growth of 4% to 5%. The net interest margin is expected to improve by 4 to 8 basis points in Q1 and continue to improve throughout 2025, assuming a stable interest rate environment. Noninterest income is projected to range from $6 million to $7 million per quarter, while operating expenses are managed to be $247 million or less for the year, excluding merger-related costs. The effective tax rate is expected to be 24.25%. The company also maintained a quarterly dividend of $0.135 per share, yielding approximately 4.5% annually.Brookline Bancorp Corporate Events
M&A TransactionsBusiness Operations and StrategyFinancial Disclosures
Brookline Bancorp Reports Strong Q4 Earnings Amid Merger
Positive
Jan 29, 2025
Brookline Bancorp reported a net income of $17.5 million and operating earnings of $20.7 million for Q4 2024, with total assets increasing to $11.9 billion. Despite a decrease in year-over-year earnings attributed to merger-related charges and economic factors, the company experienced significant growth in deposits and loans. A strategic merger with Berkshire Hills Bancorp is expected to close by the end of the second half of 2025, significantly impacting Brookline’s corporate structure and market presence.
M&A TransactionsBusiness Operations and Strategy
Brookline Bancorp and Berkshire Hills Merge for Growth
Neutral
Dec 16, 2024
Brookline Bancorp and Berkshire Hills Bancorp have reached an agreement to merge, with Brookline becoming a wholly-owned subsidiary of Berkshire in a transaction valued by converting Brookline shares into Berkshire shares at a specific exchange ratio. This merger, approved by both companies’ boards, aims to consolidate operations, streamline management, and create a more robust banking entity. The agreement includes provisions for equity awards and debt management, and outlines the future leadership structure, including the integration of directors from both companies. The merger is subject to regulatory and shareholder approvals, with potential implications for stock valuations and market positioning.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.