Good afternoon and welcome to Brookline Bancorp, Inc.'s second quarter 2024 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 that this event is being recorded. I would now like to turn the conference over to Brookline Bancorp, Inc.'s attorney, Laura Vaughn. Please go ahead. Thank you, Alyssa, 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 may contain forward-looking statements with respect to the financial condition and 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 for actual results and financial performance. For 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 good afternoon, everyone. Thank you for joining us for today's earnings call. We had a solid quarter of loan and deposit growth across all three of our banks. While our net interest margin declined slightly, it appears to be hitting the bottom as the month of June was higher than May. This quarter, we decided to exit our specialty vehicle finance business, which is primarily tow trucks. The spreads for this business line have been coming under pressure for some time now as more competition has entered the market. Unfortunately, costs also continued to rise, particularly collection costs, which drove this decision. We closed our office in Melville, Long Island, and had a reduction of staff of 21. The portfolio of $350 million in specialty vehicle loans will run off over time and will be a slight headwind to the overall growth in the equipment finance portfolio. We estimate runoff over the next 12 months to be $115 million. I will now turn you over to Carl, who will review the company's second quarter results in detail. Carl? Thank you, Paul. Yesterday, we reported net income for the quarter of $16.4 million, or $0.18 per share. As Paul just mentioned, we exited the specialty vehicle finance business and recognized the restructuring charge of $823,000, which includes severance and other lease losses. Excluding the restructuring charge, operating earnings were $17 million, and operating EPS was $0.19 per share. During the quarter, total assets grew $92 million, given by loan growth of $66 million spread across all loan categories. In the second quarter, we originated $491 million in loans at a weighted average coupon of 802 basis points. The weighted average coupon on the core loan portfolio rose 9 basis points during the quarter to 605 basis points at June 30. On a linked quarter basis, the yield on the loan portfolio declined one basis point to 602 basis points, driven by the reversal of interest income due on two large commercial loans going non-accrual in the quarter. The reversal of accrued interest and quarterly interest foregone on those loans equaled five basis points in the net interest margin for Q2. On the deposit side, customer deposits grew $66 million, while broker deposits increased to $48 million. Deposit growth continued to be focused in higher-rate savings and time deposits. Total funding costs increased seven basis points in the quarter to 365 basis points. Overall, the margin declined six basis points to 300 basis points in the quarter. Total average interest earning assets were basically flat at $10.7 billion on a linked quarter basis, resulting in net interest income of $80 million, a decline of $1.6 million from Q2. Non-interest income was $6.4 million, which was basically flat with the prior quarter, as lower fees on derivative income were offset by higher participation fees and other non-interest income. Operating expenses were $58.4 million for the quarter, excluding the restructuring charge. This is down $2.6 million from Q1, primarily driven by lower compensation and benefits and weather-related facilities cost. The provision for credit losses was $5.6 million for the quarter, a decrease of $1.8 million from the first quarter. Net charge-offs were $8.4 million, driven by a $3.8 million charge-off of an office building and $4.6 million in C&I charge-offs, nearly all of which were related to equipment financing. The charge-offs were largely previously reserved for. Non-performing loans increased $20 million in the quarter, an increase of $27 million in C&I, driven by two large credits. The increase was offset by a decline of $6.7 million in non-performing commercial real estate loans. NPAs to total assets increased to 54 basis points. Our reserve coverage ratio increased slightly to 125 basis points. As I mentioned last quarter, client behavior and industry responses continue to adapt to a fairly volatile environment. Recently, we've seen greater market expectation in the Federal Reserve will cut rates and longer-term rates have declined significantly since the end of the quarter, approaching March levels. While loan demand is not robust, it is a bit better than we previously anticipated, and we expect loan growth of 2%-5% across all segments. Our cash and securities portfolio remains stable, representing 9%-12% of total assets. On the deposit side, we anticipate growth of 4%-5%. Due to prevailing interest rates, the migration of demand deposit accounts and low-cost deposits may persist, but at a significantly slower pace. Our Q3 margins is projected to fall within a range of 300-310 basis points and continue to improve. However, this is dependent on deposit flows and timing of actions by the Federal Reserve. Non-interest income is projected to be in the range of $6 million-$7 million per quarter, although components may vary significantly. We continue to manage operating expenses at $240 million or less for the full year. Exiting the specialty vehicle business will reduce operating expenses by approximately $800,000 per quarter. Currently, our effective tax rate is expected to be in a rate of 24.5% for the balance of the year. Yesterday, the board approved maintaining our quarterly dividend at $0.135 per share to be paid on August 30 and stockholders of record on August 16. On an annualized basis, our dividend payout approximates a yield of 5.1%. This concludes my formal comments, and we'll turn it back to Paul. Thanks, Carl, and we will now open it up for questions. We will now begin the question and answer session. 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 your question from the queue, you may press star two. If you are using a speakerphone, please remember to pick up your handset before asking your question. Once again, please press star one to queue for questions. First question is from the line of Mark Fitzgibbon with Piper Sandler. Your line is now open. Hey, guys. Good afternoon. Hi, Mark. Carl, could you just repeat your guidance on expenses? I missed that. I apologize. Sure. We're still expected to be in the $240 million or less for the full year. You said the benefit from an expense standpoint of getting out of the specialty finance business was how much? About $800,000 per quarter. $800,000 a quarter. Okay, great. And then secondly, I know it's been challenging recently from a credit perspective on the specialty vehicle business, but I guess I'm curious, longer term, what were some of the other major dynamics of why you're exiting this business? Expensive origination costs, small ticket relative to other kinds of loans that we can do. The collection effort is very big and difficult, and you're just dealing with a lot of little pieces that make it unprofitable, and you can't get a rate in that gig anymore. It was good while it lasted. It's something we got into about 10 years ago, and we were sticking with mostly larger operators for a while, but as time went on, we seem to have ended up with more one or two truck kind of people, and it's just really hard to make money at that. Makes sense. The other piece, it's mostly tow trucks, but the other piece that was affected too is somewhere along the line, they got into delivery vehicles, mostly for contractors with UPS or FedEx. And when Amazon decided to have its own delivery business, a lot of those guys kind of lost that business, and it was kind of stuck without anything. So it's just not going well, so it's time to stop. Okay. Great. And then I wondered if you could provide any color on those two large loans that caused the uptick in non-performers this quarter? Sure. Once a Bank Rhode Island client, a long-term client that just was restructured, and so there was deferred payments for 2 quarters. So we just automatically put that on non-accrual, and that'll go back on accrual status after they pay for 2 quarters in a row. So we do expect that to happen by the end of this year, early next year. And that's a C&I credit, Carl? That's a C&I credit. Specialty food companies. Yeah. The other is a large industrial laundry, basically two laundromats, the laundry companies. Industrial laundry. Industrial laundry that's being in the process being worked out as well. Okay. Great. And then lastly, and I know the size of the portfolios are different, but how would you say asset quality in general is stacking up among your three different banks? I would probably say that Putnam is the cleanest at this point, and Rhode Island and Boston are probably neck and neck. Okay. Great. Thank you. We've had a few quarters that are a little bit bumpy for us in the asset quality area. I'm optimistic that we've kind of gotten through the worst of it, and we've dealt with it, and I'm very hopeful that we'll go back to our normal kind of numbers. Paul, just having been through the cycles, as we both have over a long time, I've talked to probably six other banks today that all seem to have one-off isolated credit incidents. I guess I'm wondering, can there be that many one-off isolated credit situations, or are we seeing a trend here? Just curious as to your thoughts from a big picture, not specific to Brookline. Well, I think that there's a lot of stuff that was tried post-pandemic, and some of it didn't work. Companies struggled through, didn't make ends meet, and things are not as solid as they were before. But I don't see any big overriding trends that show like a whole industry being in trouble or something, unless I guess you have any electric cars. We don't see inventory problems. We don't see collection problems. Real estate, knock on wood here, at least in the metro of Boston, and certainly Rhode Island and Westchester continues to hold up pretty well. And we've only had the two downtown properties that were an issue, and those were relatively unique. They both have the same background in the sense that they were C properties that were acquired by very capable owners who intended to upgrade them to almost A level in at least a month, and they got caught in the middle with the pandemic. The buildings got fixed, but not leased entirely. In both cases, they're looking to hold on and put in more money and kind of wait it out. I think real estate is okay. In the C&I business, it's a little bit trickier to be successful than it might have been five years ago or something. Thank you. Yep. Thank you. The next question is from the line of Laurie Hunsicker with Seaport Research. Your line is now open. Great. Hi, thanks. Good afternoon, Paul and Carl. Just going back to your specialty vehicle portfolio of $352 million, can you share with us what the coupon is on that and then what the non-performers are on that? Sure. The coupon on the specialty vehicles, I'll go to the yield. The yield's around 750 on the entire. Perfect. Yeah. And then the non-performers, I mean, I guess your equipment finance non-performers are $27 million. How much of that is related to this book? I'll get back to you. I don't have that in front of me right now. Okay. Okay. Okay. And then also the charge-offs for this quarter, the $4.3 million equipment financing charge-off, C&I equipment financing charge-off, was that a specialty vehicle or was that something separate? Mostly. Mostly specialty vehicle. We had some car washes that come out of the car. But the lion's s hare was special. The l ion's s hare. Got it. Okay. So I missed it. You said how many people were terminated on the specialty vehicle side? 21. Okay. Did that happen late in the quarter, middle of the quarter, beginning of the quarter? How should we think about that? It's happening right now. Yeah. Okay. Okay. And then we're also going to see the Durbin impact coming through in September. And I had in my notes that roughly, at least on the expense side, so obviously we know the non-interest income that deducts $1 million or something annually. But on the expense side, I had that impact running about $1.6 million annually, so $400,000 next quarter. Am I thinking about that right, or has that already been reflected? It's done. How should we think about that? I'm not sure what you're referring to when you talk about the Durbin. You might be misunderstanding it. Durbin's really just the amount that you get on the debit card side. Right. It's just me that's. Right. It's just. $200. Side, but I thought for some reason that you guys were doing something on the expense side around a compliance build, or maybe I got that wrong. No, I think when we first were estimating. When we were first estimating what the impact would be about going over $10 billion, I think we estimated some higher expenses associated with adding a few people on staff. But that had nothing to do with Durbin. That just had to do with going over to compliance, adding some people on credit, things of that nature, compliance. But that's largely done. That's already done. Okay. Okay. That's already done. Okay. Okay. Okay. Perfect. Perfect. Okay. And then on office, the $3.8 million that you had that were net charge-off, how big was that office credit that you took the charge-off on? Just trying to think about what the write-off was. It was around $14 million. $14 million. $14 million originally. Okay. That's correct. Let me go a little bit more detail on that. We currently are carrying it at $10.8 million. We're still working through this. We do have a specific reserve, $2.5 million. $2.5 specific reserve. Okay. And then where is that located? Is that a downtown property? Not down Boston. Okay. And that's Class A, Class B? Class B. Class B. Okay. And then just last question on that one. Is that or what is the vacancy, if you have it, on that one? I don't have a great it could be half. Could be half. It'd have to be about half because the lowest number you can get between the third and a half. First of all, it's the quarters. Gotcha. Okay. Gotcha. Okay. Good, good. Okay. And then office non-accruals, I appreciate all the detail you've got in your deck here, but it looks like these are just the ones that are maturing. Do you have what your overall office non-performers are? We just have the one. We only have the one that's expected. Just that one. It's just that one. It's that one. It's $10.8. Just the one that's coming due. Okay. Okay. That's correct. Got it. Okay. Okay. Very helpful. Okay. And then I guess, Paul, just last question. There seems to be a little bit more M&A chatter going on. Obviously, you're one of the few banks who did an acquisition as rates started to go up. Can you just share with us your take on how you are thinking about M&A, how you see sort of the pulse on M&A, any chatter, any directional thoughts? That'd be really helpful. Thanks. Well, I think you said it right. I mean, a little bit more talk, but very little. It's still a very difficult environment with the marks on everything and the difficulties of raising capital and having it all work. But I think we're closer to getting to more normal M&A activity, but we're not quite there yet. And I'm not aware that there is all that much around us anyway. Okay. Great. Thank you so much for taking my questions. Okay. Lori, that's all right. Thank you. The next question is from the line of Chris O'Connell with KBW. Your line is now open. Hey. Good afternoon. Paul and Carl. Hey, Chris. Chris. So hoping to start off on some of the margin dynamics going forward. It seems like the deposit mix shifts turned around and slowed this quarter. Are you guys still seeing pressure there at all? Do you expect a little bit slower pace in the back half of the year? I guess SOFR out there. Yeah. So we're not seeing the movement between products that we've seen in the past, that people are moving a lot of money out of one product or a lower interest-bearing product into a higher interest-bearing product. Any growth in deposits is basically coming from higher interest as you attract new customers. We are starting to see more activity on the DDA side, particularly on the commercial side and the cash management side, which is always good to see. And you don't have the outflows that you were seeing earlier. You start to see some growth there. I would say on the CD side, we're basically priced where the market is, right? So the book is maturing. So we've got about $330 million CDs that will roll off in Q3, and it's basically going on at similar rates. And wherever possible, we're trying to shorten those durations a little bit. We're actually offering a little bit of a higher rate for lower. We're limiting the curve out there so that people are attracted to lower terms. So, not buying in those CDs that stay on the downside. Have you guys been able to test the waters at all with any reductions in any of the products on the deposit side at all year to date? Yes. Yes, we have. So we have moved rates on the top-tier offerings that we might have in money markets and certain savings, annual savings accounts. Number of quarter CDs. Number of quarters, somewhere 10 basis points. Yeah. That's a fairly recent development. Yeah. Got it. And just with the outlook for the rate environment now shifting a bit to hopefully be a little bit more favorable as we get further along into 2024 into 2025, maybe just talk about your strategic priorities in terms of, I mean, does that make you a little bit more optimistic on loan growth into next year? Or there's still a good amount of broker deposits that are at a fairly high cost right now that could mix shift or come off the balance sheet. Is there any kind of strategic priority in terms of growing the assets out of the balance sheet or maybe taking it a little bit slower into next year and reducing some of those high-cost broker deposits or even some of the highest-cost borrowings? Well, we're always looking to try to reduce those on the wholesale funding side of things. And I think when rates do start to reverse the portion, you'll see more activity on the money side. I think some people are sitting on the sidelines that they don't have to borrow, but they're getting their rates cut down a little bit. So all of those things are true. So we'll be out there. Got it. And just thinking about the margin as we get past the next quarter or so, I mean, how much do you think the dynamic changes depending on the pace of Fed fund cuts, whether they're coming in kind of quickly as we enter 2025 or a little bit more measured than what's been priced in recently? Well, as rates come down, our liability side is pretty responsive to that. I expect that to be fairly responsive as it goes down. It wouldn't be as immediate as, let's say, the prime rate going down or the SOFR rate going down. Probably not. There'll probably be a little bit of a lag there. But we have quite a bit, like I said, of broker CDs and the Home Loan Bank advance that we reprice fairly quickly. And so we monitor that very closely. Of course, try to match that out with our own book. So we do also have a lot of adjustable rate, floating rate loans that we reprice down as well. But overall, I think it's going to be a benefit to us. Understood. If the pace of growth does kind of continue to be relatively tepid, is there a point where capital ratios get high enough where you'd be interested in buying back shares? We continually look at it. If we have a build of capital, I think that's something that's important to talk about. Got it. All right. That's all I had. Thanks for taking my questions. Thanks, Chris. 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, Alyssa. Thank you all for joining us here this afternoon. We look forward to talking with you again next quarter. Have a good day.