Good afternoon, and welcome to Brookline Bancorp third quarter 2022 earnings conference call. All participants will be in a listen-only mode. After today's presentation, there will be an opportunity to ask questions. Please note this event is being recorded. I would now like to turn the conference over to Brookline Bancorp's Attorney, Laura Vaughn. Please go ahead. Thank you, Alexis, 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. Thank you, Laura. Good afternoon, everyone, and thank you for joining us on today's call. I'm pleased to report we had near record earnings of $30.1 million or $0.39 per share, and that the board has approved a 4% increase to our quarterly dividend, bringing it to $0.135 per share. Our loan portfolio grew $129 million or 7% annualized, and our net interest margin for the third quarter was 3.80, an increase of 24 basis points from Q2. We continue to see good commercial loan and deposit activity in our markets despite the significant rise in short-term interest rates. The teams at both PCSB Bank and Brookline continue to prepare for the transaction, which we anticipate will close in the fourth quarter. I will now turn you over to Carl, who will review the company's third quarter results in more detail. Thank you, Paul. Net income this quarter was up $4.9 million from Q2, driven by margin expansion, solid loan growth, as well as the year-to-date impact of energy tax credits of $2.4 million related to financing renewable energy investments. These benefits were partially offset by a higher provision for loan losses and merger charges of $1.1 million in the quarter. Total revenues were up $6 million, driven by margin expansion of 24 basis points and $29 million of loan growth in all asset classes. Commercial loans increased $49 million, commercial real estate $43 million, equipment finance $27 million, and consumer $12 million. In the third quarter, we originated $542 million in loans at a weighted average coupon of 566 basis points. This is up 68 basis points from the prior quarter. The weighted average coupon on the total portfolio rose 52 basis points during the quarter to 481 basis points at September 30. Prepayment fees were $1 million in Q3, flat with Q2, and deferred fees were $1.1 million or $230,000 less than Q2. The combined impact on net interest margin was a positive 1 basis point from the prior quarter. Provision for credit losses was $2.8 million, primarily due to the growth in loan commitments. The allowance for loans and leases increased $1 million, helped by net recoveries of $179,000, and the reserve for unfunded credits increased $2 million. Credit quality trends continued to be favorable, resulting in a slight decline in reserve coverage to 1.27%. During the third quarter, deposits declined $158 million, with liquidity in CDs and other interest-bearing accounts flowing to higher-yielding opportunities. Non-interest-bearing deposits were relatively flat from Q2 and represent 27% of deposits. Increases in short-term rates continue to have potential to benefit us due to our moderately asset-sensitive position. Assuming a flat balance sheet and the forward curve as of September 30th, our simulations reflect a 4.4% increase in net interest income over the next 12 months. Our simulations reflect the historically based product weighted beta of 32% on deposits. As Paul mentioned, the board approved a quarterly dividend of $0.135 per share, representing a 4% increase and a 4.2% yield based on yesterday's closing price. The dividend will be paid on November 25 to stockholders of record on November 11. This concludes our formal comments, and we will now open up for questions. We will now begin the QA session. If you would like to ask a question, please press star followed by one on your touchtone keypad. If for any reason you would like to remove that question, please press star followed by two. Again, to ask a question, press star one. As a reminder, if you are using a speakerphone, please remember to pick up your handset before asking your questions. We will pause here briefly to allow questions to generate in queue. The first question is from the line of Mark Fitzgibbon with Piper Sandler. You may proceed. Thank you and good afternoon. Carl, I wondered if you could help us by just starting with the effective tax rate going forward, given those energy tax credits that you have. How is that 28 and change kind of rate a good run rate going forward? I'm sorry, the 22.5% rate going forward. Yeah, yeah. That, yup, very good. Thanks, Mark. The effective tax rate for the year, we expect it to be around 25.2%. When we're reviewing the taxes as of, you know, end of Q3, you know, there was a lot of activity in the third quarter. You know, we're truing up. You know, we had some low-income housing tax credits and investments there. That had a slight impact on it. The big impact was a lease financing that we did that had associated tax credits with it. We could have taken those tax credits over seven years. I decided to take them this year. We did recognize them this year. The cash benefit happens this year. We're able to do it on our tax form. I thought it was the right thing to do. That was a $2.4 million impact on a true up as a year-to-date true up. We'll still have a little bit of benefit in Q4. We will have. Our estimate right now for Q4 for effective tax rate is 22.9%. That would not. It- That will not be impacted in 2023. I just want to be clear on that. The tax rate would go back to something around 25%? Correct. Correct. Okay. I think we were guiding about $25.5 with the PCSB acquisition. Okay, great. First, that deposit and funding beta chart that you put in the slide deck was really helpful. You know, would be curious how you're thinking about sort of the magnitude of additional margin expansion in 4Q? Yeah. You know, very strong margin expansion this quarter of 24 basis points. We do expect it to go up another 10-15 basis points in Q4, and then moderate, you know, moderately better next year. It's anybody's guess, quite frankly, on the deposit betas and the flows of funds. Okay. Paul, I guess I'm curious, are you guys likely to be on the lookout for more acquisitions in Metro New York of, you know, smaller banks to kind of bulk up in that market post the closing of the PCSB deal? Not necessary to do that, Mark, but we'll certainly keep our eyes and ears open and as we figure out more and more what's going on in that area. We think Putnam is big enough to make a difference, and I think there's a lot of things we can bring to them that will improve their performance. As we do in all of our markets, we certainly pay attention. Okay. The last question I had, and I'm not sure if he's on the line. Is Bob Rose on the line? No, no, he's not here. Oh, okay. Okay. He- I was kind of seeing if he had any. He's on his way to semi-retirement, as you may know. I did know. I just thought I'd get his perspective because he had such a wealth of knowledge on credit. Thank you. Okay, Mark. Thank you. The next question is from the line of Laurie Hunsicker with Compass Point. You may proceed. Yeah. Hi, thanks. Paul and Carl, good afternoon. Sorry. Maybe Carl, just starting with you. Can you help us think about, we've obviously seen a pretty big move in rates. Just what the interest rate mark will look like with the PCSB merger? Whether you can share with us where the rate marks have gone or what the pro forma intangibles look like or both. Any color would be helpful. Thanks. Sure. As we all know, market rates have moved substantially since we announced the acquisition. At the announcement, we were estimating a $50 million mark on the investment portfolio on a pre-tax basis. You know, I think, you know, PCSB has just put out their earnings and their balance sheet, and you can see what the fair value is on those investments today. It has gotten about 40% worse than when we first know. Forty percent more, let's put it that way, in the mark on the securities portfolio. We would estimate about the same as, you know, securities interest rate mark on the loan portfolio. Similar durations in that sense, not materially different. I think that's what you would see there. Offsetting that would be, you know, the overall price, you know, what the value of the deal. I don't really know exactly what that will be at closing. If you did it, you know, today or yesterday, it would more than offset that mark. From an intangible standpoint, basically no change in the goodwill being booked. Offsetting that is the value of the deposits. Naturally, deposits are worth far more today than they were just six months ago. Okay, great. Thanks. Maybe can you also help us understand pro forma with PCSB. You guys crossed 10 billion. Can you just remind us what that's gonna look like in terms of the Durbin impact? I'm guessing then that starts in the fourth quarter of 2023. Is that right? Thanks. As far as the Durbin impact goes, my understanding is it starts six months after the year-end a company goes over the $10 billion mark. We do still anticipate this deal closing in Q4. Assuming it does, and we do get approval, and right now I think we'd have to get approval by about November 15 for that to happen, and we will close by year-end. We will be over $10 billion at this year-end, and so the Durbin impact would impact us starting July 1st, 2023. We estimate the annual impact just related to Durbin to be in the $800,000-$900,000- $1 million impact on our income on an annual basis. Okay. On non-interest income. In terms of the expense spend, is there anything around that or that's already fully baked? We'll definitely have a headcount added here and there. Some of it we've already got on staff, you know, already preparing for it. I would say nothing materially at this time that we anticipate there'd be a big impact. Paul, is there anything that you- Nope. Yeah. Good. Great. Thanks so much. Okay, Laurie. Thank you. Thank you. The next question comes from the line of Christopher O'Connell with KBW. You may proceed. Hi. Hey, Chris. Just following up on the PCSB. Hey. On the PCSB discussion, given you know the you know approvals you know need to come in by around November fifteenth or so, just any update there on that process and where you guys are at? Well, we're awaiting the approval out of Washington. It's our understanding that all of the questions have been raised and answered satisfactorily to the Fed and their staffs. We are literally just waiting by the phone. Okay. I got it. All right. Also, on PCSB, just, you know, given, you know, their financials and how they've come in since the merger announcement and the change in the rate environment, any update as to, you know, what their impact will be on the margin? I'm not gonna opine on that right now. There's a lot of moving parts when you think about, you know, the margin going forward. You know, as Laurie kind of just highlighted, you know, the mark on the investment portfolio, the interest rate marks on the investment portfolio and the loan portfolio, they would get accreted back in. That comes through interest income, quite frankly, and really has a significant impact on the margin as you look forward. You know, naturally, we look at the core, what's going on with the core business. As you can see, they did quite nicely. Their margin expanded 19 basis points in the quarter. We're very happy with how they're performing, and we're certainly happy with how we're performing. A couple of good companies getting Um- Good income out of that. Yep. As you know, I appreciate all the color on the betas and the margin outlook. Just thinking about, you know, what you guys are seeing from competition and in terms of, you know, flows and how customers even, you know, within the bank are being moved around between products. Yeah, how the deposit flows between products and kind of overall growth outlook is going forward? I'll start, and I'll let Carl get into more detail. I would say that the major flows, I mean, we've lost a little bit, as was mentioned in the commentary. A lot of it, in terms of the aggregate dollars, really comes from customers of ours that have very large liquidity portfolios. When rates, very short rates have gone up so much against what deposit rates look like, those customers take their non-operating liquidity, and they buy short treasuries in a lot of cases or other vehicles like that. The other big bucket that has seen a reduction is just in the core CD maturities, that have been coming down for a long time. We're not seeing customer losses. We're not seeing the average operating company move all of their liquidity out of the banking products. I think that this will have played out in the near future, and we'll start to grow from there. Carl? You're involved in the pricing and all that. Just dive a little bit deeper into that. You know, continued pressure on the CDs as Paul discussed, and some of the high liquidity and just folks that are very comfortable going into treasuries. We've actually had conversations both in the branches on the investment side, folks that work in the branch as well as Clarendon Private with significant clients on how we could help them in those regards. You know, when we dig into the details on this, we saw a significant decline in IOLTA accounts. If you don't know what IOLTA accounts are, those are basically lawyer, you know, accounts, escrow accounts for lawyers. That rate is fixed by the state. That's just, you know, a flow of funds in and out. It has nothing to do with interest rates, it's just timing. Less houses being sold. Yeah. Whatever is going on in the escrow world. That's not an interest rate thing, that's just a flow of funds thing. We're looking at our 1031 program, which, if you know about 1031 programs, it's, you know, commercial real estate folks that may be selling a building. They put it into 1031, a trust into 1031, and wait to buy another building. You usually have six months to do that. We do this, you know, very successfully locally as well as nationally. You know, I saw a big shift of funds. I went, "What happened to our" We saw a big flow out of savings accounts into money market accounts. What's going on? It was just 1031. We have a savings account product and as funds came out of the savings account product for these clients, it went into a money market account with a little slightly higher rate, because that's what our customers really wanted, was a little bit more rate when they do this. You know, the deposits are there, very attractive pricing, and we continue to serve that need. As Paul said, you know, DDA is still very solid. We continue to see growth in customers and in activity on the commercial front in all of our markets. Time will tell how much the liquidity squeeze and the tightening by the Fed will impact us. Understood. Lastly, just wanted to touch on the expenses. You know, pretty good control on expense growth kind of all around this quarter. Maybe just an update as to how you're thinking about the fourth quarter on a standalone basis. You know, yeah, operating expenses were actually down about $500,000 in the quarter. We did have $1.1 million in merger expenses, which is about $600 and change higher than Q2. I do expect expenses to, you know, pop back up a little bit. We did have a little bit of benefit on the pension side due to you know, just how actuaries work and rates. As rates go up, you get a little benefit on that side. But overall, our expenses are being well contained, but we continue to invest in the business, and I don't think that's gonna stop. Great. That's all I had. Thanks for taking my questions. Okay, Chris. Thanks. Thank you. Again, to ask a question, please press star one. There are no additional questions at this time. I would now like to pass the call over to Paul for closing remarks. Thank you, Alexis. Thank you all for joining us today. We look forward to talking with you again next quarter. Have a good day. That concludes today's conference call. You may now disconnect your line.