Good afternoon, and welcome to the Brookline Bancorp Inc.'s second quarter 2023 earnings conference call. All participants will be in 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, Alex. 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. We will not be doing a slide flip this quarter. 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. 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, and good afternoon, everyone. Thank you for joining us today on this earnings call. Yesterday, we reported net income for the quarter of $21.9 million or $0.25 per share. Excluding about $1 million in merger charges, non-GAAP operating earnings were $23.2 million, with operating EPS of $0.26. As we discussed during last quarter's call, in first quarter, we added over half a billion dollars to our on-balance sheet liquidity in the form of cash and securities. During the second quarter, we prudently reduced most of this position. Our bankers remain very active in the markets, and while we continue to be prudent and attentive to our existing customers, we are seeing opportunities to bank strong new relationships. Loan portfolio grew $94 million this quarter, and core deposits grew by $110 million. Non-performing assets increased in the quarter off historically low levels and remain less than half of one percent of total assets. Net charge-offs for the quarter were just 5 basis points annualized, while the allowance for loan losses increased to 135 basis points of total loans. I will now turn you over to Carl, who will review the company's second quarter results. Thank you, Paul. This quarter, total assets finished at $11.2 billion, which is $316 million lower than first quarter. As Paul noted, we reduced cash and securities $419 million in the quarter after building on-balance sheet liquidity by $513 million in first quarter during market disruption caused by the failure of several banks. As we began normalizing these positions during the second quarter, we also reduced our combined borrowings and broker deposits by $453 million. The banking teams generated solid loan growth of $94 million in the quarter, with growth of $120 million evenly split between commercial real estate and equipment finance, with declines of $14 million in C&I and $12 million in consumer loans. In the second quarter, we originated $506 million in loans at a weighted average coupon of 714 basis points. The weighted average coupon on the core loan portfolio rose 20 basis points during the quarter to 568 basis points at June 30th. On a linked-quarter basis, the yield on the loan portfolio increased 37 basis points to 5.7%. On the funding side, core deposits grew $110 million, and broker deposits were reduced $49 million for a net growth in deposits of $61 million. The growth was in higher rate savings and time deposits, partially offset by declines in DDA, NOW, and money market products. The average cost of total deposits increased 58 basis points in the quarter to 204 basis points. While total average interest earning assets increased $193 million on a linked-quarter basis, the net interest margin declined 10 basis points to 3.26%, resulting in net interest income of $86 million, which was consistent with the first quarter. Non-interest income was $5.5 million for the quarter, which is down $5.7 million when excluding the $1.7 million in security gains realized in Q1. The decline is due to lower customer swap activity, as well as lower gain on sale related to loan participations. We also recorded a negative $367,000 mark to market on risk participation agreements versus a positive $1.6 million mark in Q1 which is reflected in other non-interest income. Expenses were $57.8 million for the quarter versus $64.8 million in Q1 Excluding the impact of merger charges in both quarters, expenses declined $1.5 million. Compensation and benefits were down $3.1 million as a result of a full quarter run rate of anticipated efficiencies after the PCSB systems conversions were completed in the first quarter, as well as lower benefit costs. This was partially offset by higher professional fees and FDIC assessments. Provision for credit losses was $5.8 million for the quarter, versus $1.1 million in net charge-offs, resulting in the allowance for loan losses increasing to $125.8 million, representing 135 basis points on total loans. Yesterday, the board approved maintaining our quarterly dividend at $0.135 per share, to be paid on August 25th, to stockholders on record as of August 11th. On an annualized basis, our dividend payout approximates a yield of approximately 4.9%. This concludes my formal comments. I'll turn it back to Paul. Thanks, Carl. Now we will open it up for questions. Thank you. As a reminder, if you'd like to ask a question, you can press star, followed by one on your telephone keypad. If you'd like to remove your question, you may press star, followed by two. Please ensure you're unmuted locally when asking your question. Our first question for today comes from Mark Fitzgibbon of Piper Sandler. Your line is now open. Please go ahead. Hey, guys. Good afternoon. Hi, Mark. Hi, Mark. Hey, first question, but maybe for you, Paul. You know, we're sort of six months past the PCSB closing. I wondered if you have noticed any surprises with that franchise or, you know, in things you've come across in that market that are a little surprising, positively or negatively? Mostly positive. I mean, there are no big surprises, Mark, but they are thrilled being part of this company, and we have brought a lot of new modern things to them. They had been sort of behind the eight ball in terms of technology and things like that. They're enjoying playing with all their new toys, and I think we have yet to see the benefit of that as they get used to them and start exposing them to their customers. The broader product lines that we have and things like that. I've been pleasantly surprised, but not in a bad way, and we're feeling very good that it has been consolidated very nicely and is operating well. Okay. Secondly, Carl, I wonder if you could help us think about the net interest margin in the third quarter. You guys obviously, had pretty good control and were able to, sort of control the descent, if you will, of the margin. How are you thinking about it for three Q? Sure, Mark. When it comes to the margin right now, it's deposits, deposits, deposits, right? And basically, I think of that with three drivers. One, the first is pricing. I think we are largely caught up on the historical betas, but I anticipate betas to be slightly higher this cycle due to the greater convenience customers have to move funds and access more choices. We expect to continue to see a bit more pressure on the pricing side, but dramatically slower given the environment and also dependent on competition. Second is the funding mix. You know, we've seen a lot of transfers of funds out of DDA and NOW accounts into savings and CDs. I also expect that to diminish over the next quarter or so and basically stabilize. Third is the growth side, I'm very optimistic given everything I'm hearing from our bankers and what they're working on, as well as how busy our cash management folks are. I know it's a very, very competitive environment, I feel very good about where things are headed. While we'll continue to see pressure on the funding side, I think it's going to be largely offset by the repricing of our assets. Right now, our models reflect, our margin being down as much as three basis points next quarter, or three or four basis points, to possibly being flat. That's kind of where we are right now. That being said, I want to highlight there's significant sources of uncertainty around this, and, particularly around the economic outlet and the competition for deposits. Okay, great. I wonder if you could share any details on that $9.3 million commercial relationship that went on nonaccrual and also the $2.8 million CRE loan. Without revealing anything specific on the borrower, would you be able to kind of share what sort of drove those or any characteristics of the loans and what the LTVs look like? Well, the C&I loan is technically in bankruptcy, so we're going to start to see some of the proceeds from that liquidation, if you will, and I think it's very well reserved with specific reserves. It is an operating company which the different operating units have joined up with other similar kinds of organizations. I think it'll take its pace, and it'll get settled up, but probably over the balance of this year. The real estate loan is one that is in the Boston Central Business District, and it's had occupancy problems for some time. It's under $3 million. It's got a good owner. I think, we're all going to be exercising a little bit of patience, but I don't see any major auto crashes there. It's a sort of a poster child of what a smallish, business district building would look like. Thank you. Thank you. Our next question comes from Steve Moss of Raymond James. Your line is now open. Please go ahead. Good afternoon. Maybe just following up on the margin here, curious, you know, what's the rate on your new originations that you're receiving these days? Like I said, during the quarter, we were originating on, on balance or about 714 basis points on a weighted average amount from a coupon standpoint. I expect that to continue to increase, and we had some things that were legacy loans that were getting draws on that were lower, lower rates. A lot of things, you know, right now are being originated north, you know, north of that. I feel good about that. Okay. Got it. Then in terms of just, you know, now post the PCSB merger, curious how much purchase accounting is contributing to the margin, any quantity around there? On the loan side, there was about $2.9 million in the quarter associated with the purchase accounting on that side, and I think there was about $300,000-$400,000 on the negative side on the deposits. Net, net about $2.5 million contributing to the net interest income in the second quarter. Okay, great. appreciate that. Just in terms of, you know, expenses here, you know, briefly, I think close to what you guys guided to, just curious, you know, how you're thinking about the expense run rate here going forward and maybe any areas of investment you all may have? We've gotten all the efficiencies we had expected out of the acquisition of PCSB. That kind of is reflected this quarter. We still continue to invest in the business. We're still, particularly around the customer-facing side of things. I don't see a lot more being added in the back office that I'm aware of at the moment. But, you know, we just opened up a branch at Bank Rhode Island. We still have other activities moving forward. We'll continue to build that out. That's in our plans. Nothing significant that's going to drive it materially. I think, you know, FDIC is going to be running at a higher run rate. I do expect that to be probably in the $2.1 million-$2.2 million range next quarter. We had a little bit of a true-up this quarter for Q1. When we got the bill from the FDIC, it was a little higher than we thought it was going to be. I think, you know, legal and professional fees should moderate as well going forward. We have a couple of items in there. We feel, you know, we're keeping a very close eye on expenses. Okay. Great. Thank you very much. Thanks, Steve. Thank you. As a reminder, if you'd like to ask a question, you can press star followed by one on your telephone keypad. Our next question comes from Chris O'Connell from KBW. Chris, your line is now open. Please go ahead. Hey, good afternoon. Hi, Chris. Hi, Chris. Just hoping to start off with the balance sheet movements this quarter, on the securities and cash. Is that more or less finished at this point? What's the level of cash and securities that you would look to keep on balance sheet longer term? I'd say it's largely done. We probably have $50 million-$100 million that we would let off, let out over time. I'm very comfortable in the 8%-12% range of having cash and securities on the books in a normal operating environment. You know, there are certain times you feel like, "Hey, we should have a little bit more liquidity on hand just in case something happens." That's more, that's driven by the market, the environment. We have tremendous amounts of access to liquidity, quite frankly. You know, sometimes you need a little bit more on balance sheet. Makes regulators happy, it makes analysts happy, I can sleep easier at night, all those types of things. Overall, I think we're happy in the 8%-12% range. I'd say we're probably close to 10% at this point, right now. Okay, great. It doesn't move the needle much because the cash on hand is around five you know, you're earning over 5% at the Fed, and you know, we're paying around that same amount, you know, Federal Home Loan Bank borrowings or brokered deposits. Those are the levers around that. Yeah. On the deposit side, you know, you guys had really good growth in the savings line, and I think you mentioned in the prepared comments that there's, you know, a higher, higher yield savings product out there. Maybe just provide a little color around that? Sure. You know, we have very competitive CD rates out there, but there are folks that would like to have something more liquid than that. We offer a high rate savings product. Minimum balance is $100,000. It really was made to, you know, created to attract new deposits as well as take care of, you know, our current customer base. I think we're paying 4.35% at the moment on that product. I think when we originally started that product, it was around 4%. Got it. Got it. Is that ongoing still? Absolutely. Great. Around the NIM commentary, it sounds like, you know, given the moves this quarter and some of the impact in deposit rates, you know, slowing down a bit, you know, that there should be minimal compression next quarter. Does that imply that, you know, we start to kind of bottom out here, you know, in late Q3, Q4, based on the current yield curve? Yes. You know, based on our current modeling, it suggests that we would be down slightly in Q3 to possibly flat, and then actually increasing in that Q4 going forward. I'll also caution you, there's a lot of assumptions in that. Yeah. You mentioned, I believe in the comments that, you expect the beta to be higher this cycle. Is that higher than the 39% beta, I think that's in the IRR disclosures in the slide deck? That's correct. That's correct. Our IRR disclosures assumes a flat balance sheet, huge assumption right there, and the historical betas that we've observed over past cycles. That's what the models reflects. My comments, we also do a lot of simulations away from that, and that's what I'm basing my guidance on. Okay, great. I know you mentioned last quarter that, you know, given the pipeline, you're seeing, there'd be a little bit less, you know, derivative in participation income. Obviously, fees dropped off quite a bit this quarter, you know, relative to 1Q in, you know, late last year. You know, any sense in the pipelines there in customer demand on those types of products and, you know, where fees could shake out in the second half of the year? Yeah, it's hard to provide guidance around that. I, I would say on the, the swap side, that's all dependent on the, the loan volumes and what we're doing, how we're structuring those, those transactions. That can be very lumpy. We can have them or we, or we can't, or we may not. I wouldn't want to provide. We could see a nice bounce back in that line item. On the participation side, I'm less optimistic on. I think the participation, that's a market type thing. I think a lot of banks are not participating things in or able to participate things out. I think that's that revenue line is probably going to be hamstrung for a while. Okay, great. On the capital side, I mean, you guys are at a pretty good capital levels now all around, you know, ticked up above 8% on TC. It sounds like you have a relatively, you know, more robust growth outlook than a lot of the industry into the back half of the year. Are you guys considering at all, any share repurchases at this time? No, we continue to prioritize paying, like, a very competitive dividend and funding our organic growth. Right now, we're not planning any share repurchase at this time. Okay, great. That's all I have for now. Thanks for taking my question. Sure. Okay, great. Thanks. Thank you. This concludes our question and answer session. I'd like to turn the conference back over to Mr. Perrault for any closing remarks. Thanks, Alex, and thank you all for joining us today, and we will look forward to talking with you again next quarter. Good day. Thank you for joining today's call. You may now disconnect your lines.