Good afternoon, and thank you for attending today's Brookline Bancorp second quarter 2022 earnings call. My name is Danielle, and I will be your moderator for today's call. All lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end. If you would like to ask a question, please press star followed by one on your telephone keypad. I would now like to pass the conference over to our host, Lauren Dutton with Brookline Bancorp. Lauren, please proceed. Thank you, Danielle, and good afternoon, everyone. Yesterday, we issued our earnings release and presentation, which is available on the investor relations page of our website, brooklinebancorp.com, and has been filed with the SEC. This afternoon's call will be hosted by Paul A. Perrault and Carl M. Carlson. This call may contain forward-looking statements with respect to the financial condition, results of operations, and business of Brookline Bancorp. Please refer to page two of our earnings presentation for our forward-looking statement disclaimer. Also, please refer to our other filings with the Securities and Exchange Commission, which contain risk factors that could cause actual results to differ materially from these forward-looking statements. Any references made during this presentation to non-GAAP measures are only made to assist you in understanding Brookline Bancorp's results and performance trends and should not be relied on as financial measures of actual results or future predictions. For a comparison and reconciliation to GAAP earnings, please see our earnings release. I'm pleased to introduce Brookline Bancorp's Chairman and CEO, Paul Perrault. Thanks, Laura, and welcome to you. Good afternoon, everyone. Thank you for joining us on today's call. I'm pleased to report we had another quarter of solid earnings of $25.2 million or $0.33 per share, and the board approved a quarterly dividend payment of $0.13 per share. On an annualized basis, our core loan portfolio grew $82 million or 4.5% annualized, and our net interest margin for the second quarter was 3.56%, an increase of seven basis points from the first quarter. We continue to see solid commercial loan and deposit activity in our markets despite the significant rise in short-term rates. I'm pleased with all of the progress the teams at both PCSB Bank and Brookline have been making and continue to expect the transaction to close in the fourth quarter of this year. I will now turn you over to Carl, who will review the company's second quarter. Thank you, Paul. As Laura mentioned, we've provided an earnings presentation on our website and has been filed with the SEC. I will not be doing a slide flip for this quarter. Net income this quarter was up half a million dollars from Q1 at $25.2 million, which also included the impact of $535,000 in merger and acquisition costs. Total revenues were up $3.5 million or 5%, and expenses excluding merger charges were up 4%. Revenue growth was driven by the growth in interest earning assets, an increase in our core margin of 11 basis points and solid derivatives and investment volumes. Expense growth was primarily due to compensation associated with annual merit increases, incentive accruals, and market adjustments. Total loans increased $69 million, driven by $82 million in core loan growth as PPP loans declined $13 million in the quarter. PPP loans were just over $1 million at the end of the quarter, and as of today, we have only 10 PPP loans remaining with the balance less than $1 million. In the second quarter, we originated $527 million in loans at a weighted average coupon of 498 basis points, up 99 basis points from the prior quarter. The weighted average coupon on the loan portfolio rose 33 basis points during the quarter to 5.2429 at June 30th. Prepayment fees were $1 million in Q2, down $490,000 from Q1, and deferred fees excluding PPP were $1.4 million or $78,000 less than Q1. The combined impact was a negative impact on net interest income, $568,000 compared to first quarter, or approximately 3 basis points to the net interest margin. Credit quality trends continued to be favorable, resulting in a slight decline in reserve coverage to 128 basis points. During the second quarter, deposits declined $200 million. Tax payments, large real estate purchases, and transfers to personal investment accounts drove the decline in deposits. We continue to see significant increases in short-term interest rates as the Federal Reserve increased the Fed funds rate 50 basis points in May and another 75 basis points in June. Increases in short-term rates have the potential to benefit us due to our moderately asset-sensitive position. Assuming a flat balance sheet and the forward curve as of June 30th, our simulations reflect a 3.1% increase in net interest income over the next twelve months. Our simulations reflect a product-weighted beta of 32% on total deposits. Company remains well-capitalized, and we repurchased a little over 956,000 shares during the quarter before we were required to pause our program. As Paul mentioned, the board approved a quarterly dividend of $0.13 per share, representing a 40% payout and a 3.7% yield. The dividend will be paid on August 26 to stockholders of record on August 12. This concludes our formal comments, and we'll now open up for questions. Certainly. If you would like to ask a question, please press star followed by one on your telephone keypad. If for any reason you would like to remove that question, please press star followed by two. Again, to ask a question, please press star one. As a reminder, if you're using a speakerphone, please remember to pick up your handset before asking your question. We will pause here briefly as questions are registered. The first question comes from Mark Fitzgibbon from Piper Sandler. Please proceed. Thank you and good afternoon. Hi, Mark. I wonder if you could share with us kind of what you're seeing in the market from a deposit pricing standpoint and how you think about deposit betas for the second half of the year? Sure. We're not seeing a lot of activity. I think there's a lot of specials that people are offering. There's a lot of pocket rates that people can use. I think the Internet banks and other parties out there are out there with higher rates that are attracting some folks to those opportunities. I think it's more of the money market accounts and treasury funds that I think we're seeing people move money towards, you know, short-term treasuries and things of that nature. Less so on the deposit front. Now that could change dramatically at any point. You know, right now, you know, we're modeling right now. Like I said, you know, the betas are significantly higher than what we've actually saw in the first quarter, or second quarter. We saw, you know, a 125 basis point increase in Fed funds rate, and I think our cost of funds went up four basis points. You know, very low beta in the first quarter. I do expect that to accelerate in Q3. Okay. Carl, you think that the margin will continue to slowly rise. Is that fair? You know, my guidance on the margin would be 15 basis points or better increase in Q3. 15 basis points in Q3. Okay, great. I wondered if you could share with us your thoughts on expense growth as well. Any guidance there would be great. I think there's probably more competition for talent these days than there is on deposit rates, quite frankly. It's probably accelerated. Yeah, we have seen some, you know, strong demand for talent and, you know, retention and attraction of talent is costing more, certainly. I think we have largely seen that. Earlier this year, we raised our minimum wage, the minimum that we pay for a lot of folks to $20 an hour, which with other market adjustments. We started seeing a lot of that roll in in Q2, as well as, you know, our typical merit increases, which happened in early March. You saw the full benefit of, you know, full impact of that in Q2. We continue to see things that we have to do to attract talent and maintain talent. I do expect expenses to rise perhaps about $500,000 in the next quarter, you know, give or take. One of the big drivers, Mark, I think is commercial banking, and I say that in the macro sense, and that's basically everything that we do. We're a lot deeper and broader than a lot of other places, and so we're probably pretty juicy looking to people who are planning to try to participate more in commercial banking. Okay. We'll keep them. All right. I wondered if you could also maybe walk us through what you still need to do to prepare for crossing that $10 billion threshold. Are most of the costs, you know, to meeting regulatory burden kind of built in at this point, or is there much incremental spending for that? They're mostly built in. There'll of course always be a little bit more, you know, resources that we're gonna need to address certain things, but not material. Okay. Finally, any up- I was just gonna fill it in, Mark, a little bit. It's probably on stuff like, a little, different approach and a little more exhaustive stress testing, than we currently do. There's probably I don't- Well, there's a little bit more on the audit side. There's a little bit more on, you know, being on top of the regulatory side. Yeah. It's pretty incremental stuff. It's a little bit here and there, but not significant. Okay, great. Lastly, any updates on Clarendon Private? You know, what assets are up to or are we getting close to breakeven? You're funny. No, we do expect this to break even in three years, or now it would be two and a half years. They're right on track with where we expected. Of course, I always wish that they're more than on track, but they're right on track and doing excellent. We're. I think the clients that we're bringing in and the types of assets and clientele that we're attracting is exactly what we wanted. It's working extremely well with the banks. You know, our lenders, our branch managers- Have embraced them. have really embraced them. The teams have been doing a great job together. So extremely pleased with how things have started out pretty quickly, quite honestly, right out of the gates. Because it does take time to build that. You know, you meet with clients, it doesn't happen overnight, right? It's something that we're really seeing a lot of great traction on. Would you be able to give us a number of how much the group has in assets under management or advisory at this point? I could, but I'm not going to. You know, we do file, you know, public reports, but I don't think it's really that meaningful. Okay. Thank you. Thank you. The next question comes from Chris O'Connell with KBW. Please proceed. Hey, good afternoon. Hi, Chris. Was hoping to get an update on kind of the loan growth outlook, going into the back half of the year here. I mean, it sounds like, you know, originations were strong this quarter, and last quarter as well, and that the pipeline's strong. Was there a little bit more, like, payoff activity this quarter, that kept growth, you know, below last quarter? You know, how do you see, you know, that activity versus originations, kind of balancing? Well, all I can say, Chris, is I can't wait for people to stop mining our customers. This has been going on now it feels like for over two years. The originations were strong, continue to be strong, and I expect that they'll be that way well into the future. If people can just calm down, maybe these higher rates will calm people down, and we'll be able to get a little bit better traction. We are making some gain nonetheless. It's generally a bright picture. Now that we have the private banking capability, we at least have something to talk about with the selling families. Gotcha. You know, given the pipeline outlook, you know, is growth expected to be, you know, somewhere in the same range, I guess, as, you know, the first and the second quarter going forward? Yeah. Exactly. I think we're a little lower. Okay. Great. Okay. Great. Than we would have anticipated, this quarter at the $80 million of core. We did expect it to be a little stronger than that. As, like Paul said, we've just seen a lot of our great loan customers, great families, great businesses that have been selling their businesses. We like to have at least $100 million a quarter of gain. You know, this quarter, we just came up slightly short. Probably a $101 million company sale fit in there. Got it. Makes sense. On the deposit side, I mean, how are you guys seeing kind of flows and growth? I think somewhere in the deck, there was, like a $200 million number, called out related to, you know, tax payments and purchases, as well as kind of transfers here. How are you guys thinking about deposit growth as you get into the back half of this year? I mean, is there, you know, a lot of movement going towards, you know, off-balance sheet into money market funds? You know- I think. -seeing that continue or... Well, I think if you really had the raw data, you would find that it's really pretty lumpy, particularly so far this year with rising interest rates. We manage the treasury activities for some rather significant organizations, which through the low rate environment ended up having very significant deposits with us. As rates have gone up, those are the kinds of examples that Carl was alluding to that moved some of that to treasuries for the most part. When I look at how we're doing with deposit growth, I can see new retail accounts open, which is not a major business for us, but that does gain some traction a little bit. More importantly is the signing up of cash management and other treasury products. That has been robust so far this year, and their pipeline is still strong. I think the reduction is seasonal. It was exaggerated because of what I described. The underlying activity, I think continues to be strong. With that behind us, I think we'll make progress. Already to date, we're halfway back to that reduction or some magnitude. It has not continued. It has abated, let me put it that way. Particularly on the DDA side. You know, the commercial accounts. We talked to bank presidents and things of that nature. They're basically saying, "We're not losing any customers. It's just some people, you know, being a little bit more thoughtful with their funds and managing their funds a little closely." We continue to grow the customer base, which is key. Great. As far as I know it's, you know, a very volatile line item, but any outlook into, you know, loan level derivative income going forward? I know it's kind of just based on, you know, customers', you know, utilization and, you know, whether they're opting to use it or not. Maybe if you've seen demand for that increase going into the back half of the year. I think you have a very good handle on that. It's a very difficult line to try to project and estimate. It all depends on what the customer's, you know, appetite is, and how they wanna structure the loans. Really, I don't really provide guidance on that. I think you can see the trends over time and kinda what the average is over time. You know, it kind of follows loan activity to a large degree. In my experience, Chris, customers are kind of funny. I mean, just in an environment when you think you're pretty sure that a particular deal is gonna warrant a derivative, the customer decides that they don't wanna do that. Vice versa. It is impossible to predict their behavior. Got it. Figured. Understood. Lastly, any update as to, you know, the timing of the PCSB merger close? Everything is on target for Q4. Nothing's changed. Everything's proceeding exactly as we had planned. Really nothing new on that front. Okay, great. Thanks for taking my questions. Thanks a lot. Thank you. Next question comes from Laurie Hunsicker from Compass Point. There. Good afternoon. Hi, Laurie. Hi, good afternoon. Yeah, maybe just staying on the PCSB acquisition, Paul and Carl, can you just give us a refresh now on where we are with interest rates? I know you had an announcement in May, seems like ages ago. You had a $19 million interest rate mark on loans, which I think was current as of March 31st, and then the interest rate mark on securities was through late May of $50 million, and then you also had the markup on deposits, which was as of March. I don't know if you've got a refreshed number you can share with us or just maybe even a refreshed number in terms of how you're thinking about it at closing. Actually, no. I keep an eye on it just to have a sense of what's going on with the market and what that might potentially have as far as an impact. As you can imagine, the yield curve hasn't moved all that much when you start going out past, you know, two to three years, from when we announced. Right now, I wouldn't say. You know, we're very comfortable with what we provided as far as marks, as an estimate. I have no idea what rate's gonna be. If anything, rates have backed off maybe 15-20 basis points out on the long end from when we first announced this. You know, everybody's expecting a recession like tomorrow or yesterday or last quarter. We're seeing, you know, a lot of volatility in the market as far as rates concerned. Really not a big change in how those things have been priced at this point. I wouldn't be changing my models as far as purchase accounting is concerned. Paul, maybe just a more general question for you with PCSB now lining up to be a fourth quarter close right on time with your expectations. Can you talk a little bit about your appetite to do more M&A? We certainly haven't seen very many banks step in just because of the pain of interest rate marks. Can you share with us your thoughts, how you're thinking? Obviously, you're gonna be just across $10 billion. Just where your appetite stands. My appetite really hasn't changed at all through this. You know, we still continue to talk with some people. My appetite is not diminished nor increased. Of course, if we look to do something beyond Putnam, you know, I'd have Carl weigh in pretty heavily on what the effect of this interest rate environment would be. Fundamentally, I haven't changed my opinion. Okay. Just a few numbers I'm looking for. Carl, can you give us a refresh on where you guys are with office and also with leverage lending? Anything would be helpful. Thanks. Paul will take care of that. Yeah. The leverage lending I'll take first because that's simple, it's zero. We don't do it, never have. Perfect. Real estate, we're still very active. The one segment that we're sort of keeping a weather eye on is office. The office portfolio for us it's material. It's over half a billion dollars. A little bit over half a billion dollars. But it is very diverse, and it is very strong. Very high coverage. It doesn't tend to be the big buildings in the financial district of Boston. It tends to be within the 128 loop, if you know that area, which is very desirable kind of stuff. We have a lot of stuff in the Beacon Hill, West End of Boston. The Metro North and South and West is particularly strong from the downtown area, and very little in other markets. We actually don't have that big a presence in office in Rhode Island. We are keeping a very close eye on it, but the statistics on it are very comforting in terms of loan-to-value and coverage ratios. Got it. Okay. What do you have your loan-to-value? Will you share that and your coverage ratios? Well, I mean, they're all over the lot. What I can tell you would be also very comforted to hear that much of it is 50% or less. Just of the $500 million, do you know approximately how much is kind of in that lower risk bucket of medical healthcare or school? That I don't have any clarity on. Okay, great. Okay. That's it for me. There is- Thank you for taking my questions. Yeah. There is some content of medical, but it's not overweighted to that. It's really quite diverse. Okay, great. Thank you. Thank you, Laurie. Thank you. There are no additional questions waiting at this time, so I'll pass the conference back over to Paul Perrault for closing remarks. Thank you, Danell, and thank you all for joining us this afternoon, and we will look forward to talking with you again next quarter.