BOSTON – Brookline Bancorp Inc., the parent company of Bank Rhode Island, reported a net income of $19.1 million in the first quarter of 2025, a 30.2% increase from the same period a year earlier, in part because of an improved interest rate environment year over year.
Still, the results fell short of Wall Street expectations.
Earnings per diluted share were 21 cents, an increase from 16 cents per share reported a year ago. The average estimate of three analysts surveyed by Zacks Investment Research was for earnings of 23 cents per share.
“We are pleased to report solid earnings for the first quarter of the year," said Paul A. Perrault, Brookline CEO and chairman. "Despite external economic headwinds, our bankers continue to perform well and grow deposits."
The bank holding company posted revenue – interest income and noninterest income – of $153.7 milllion in the first quarter, down 1.1% from the $155.5 million in brought in the same period a year ago. But that was offset by a 5.2% decline in interest and noninterest expenses, from $134.9 million to $127.9 million year over year.
Brookline's earnings report did not break out the performance of Providence-based Bank Rhode Island. Last year, the financial holding company announced it would be merging with Berkshire Hills Bancorp Inc., the owner of Berkshire Bank. The transaction is expected to close by the end of the second half of 2025.
Brookline said its interest rate margin – a key metric that assesses what the company earns on interest charged on loans minus the interest it pays for deposits – improved to 3.22% in the first three months of 2025, compared with 3.12% in the fourth quarter and 3.06% in the first quarter of 2024.
Brookline increased the money it sets aside for bad loans, an indication of declining credit quality. The company made a provision of $6 million for the first quarter, up from $4.1 million in the fourth quarter of 2024. Brookline said the increase provision was largely because of signs of trouble for a single commercial borrower.
Meanwhile, Brookline's balance sheet showed that the size of its commercial real estate loan portfolio has shrunk to $5.65 billion, down from $5.76 billion a year ago. At the same time, the portfolio of commercial loans to support business operations has grown to $1.24 billion from $1.03 billion in the first quarter of 2024.
"The contraction in our loan portfolios is intentional as we reduce our commercial real estate exposure while increasing our participation in the [commercial and industrial] markets.”
The company's asset quality appeared to benefit quarter over quarter.
The ratio of nonperforming loans and leases – those for which payments are more than 90 days overdue – to total loans and leases was 0.65% as of March 31, a decrease from 0.71% on Dec. 31 but still higher than the 0.42% from March 31, 2024.
Total net charge-offs for the first quarter were $7.6 million, Brookline said, compared with $7.3 million in the previous quarter. The $7.6 million in net charge-offs was mostly the result of one large $7.1 million charge-off in commercial loans, the majority of which was previously reserved for, Brookline said.
Total deposits as of March 31 were $8.9 billion, up 2% from the $8.7 billion the year prior.
(Material from The Associated Press was used in this report.)
Matthew McNulty is a PBN staff writer. He can be reached at McNulty@PBN.com or on X at @MattMcNultyNYC.
