Brookline Bancorp (BRKL) AI Stock Analysis

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Brookline Bancorp

(NASDAQ:BRKL)

68Neutral

Brookline Bancorp shows strong financial fundamentals with consistent revenue growth and solid balance sheet metrics. The upcoming merger is a positive strategic move, expected to enhance market position. However, technical indicators suggest caution due to bearish trends, and cash flow challenges persist. The stock is fairly valued with an attractive dividend yield, making it a potential income play for investors.

Positive Factors

Earnings

The merger of BHLB and BRKL is expected to positively impact long-term earnings.

Market Presence

The merger will create a strong regional bank presence in New England/NY markets with $24B in assets.

Profitability

The combination of profitability and a strong capital base should afford management greater strategic flexibility to deploy capital via organic growth, dividends, buybacks, and acquisitions.

Negative Factors

Execution Risks

The rating for BRKL is lowered to Market Perform due to anticipated execution risks similar to other recent mergers.

Stock Performance

The shares are likely to remain range-bound for the next few quarters due to the merger announcement.

Brookline Bancorp (BRKL) vs. S&P 500 (SPY)

Market Cap

$904.41M

Dividend Yield5.61%

Average Volume (3M)578.61K

Price to Earnings (P/E)13.2

Beta (1Y)1.09

Revenue Growth7.79%

EPS Growth-8.83%

CountryUS

Employees951

SectorFinancial

Sector Strength79

IndustryBanks - Regional

Share Statistics

EPS (TTM)0.77

Shares Outstanding89,104,610

10 Day Avg. Volume620,902

30 Day Avg. Volume578,612

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)2.90

Price to Cash Flow (P/CF)5.60

P/FCF Ratio3.30

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$13.88

Price Target Upside45.65% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering2

Brookline Bancorp Business Overview & Revenue Model

Company DescriptionBrookline Bancorp, Inc. (BRKL) is a multi-bank holding company headquartered in Boston, Massachusetts. It operates through its subsidiaries, which include Brookline Bank, Bank Rhode Island, and First Ipswich Bank. The company provides a wide range of banking products and financial services tailored to meet the needs of individuals, small to mid-sized businesses, and commercial clients. Its offerings include personal and business banking, commercial and residential lending, cash management, and investment services.

How the Company Makes MoneyBrookline Bancorp generates revenue primarily through interest income from loans and leases, which is the difference between the interest earned on loans and the interest paid on deposits. The company also earns non-interest income from fees and service charges associated with its financial products and services, such as account maintenance fees, transaction fees, and fees for investment advisory services. Additionally, Brookline Bancorp benefits from strategic partnerships and acquisitions that expand its market presence and customer base, further enhancing its revenue streams. The company's well-diversified portfolio allows it to mitigate risks and maintain a stable income flow.

Brookline Bancorp Financial Statement Overview

Summary

Brookline Bancorp exhibits strong financial health with consistent revenue growth and robust operational margins. The balance sheet is solid, with an improved debt position and a strong equity base. However, cash flow management presents some challenges, with declining operating cash flow that needs attention.

Income Statement

Very Positive

Brookline Bancorp has demonstrated consistent revenue growth over the past years, with a notable increase in total revenue from $333 million in 2023 to $628 million in 2024. The gross profit margin remains stable, indicating effective cost management. However, the net profit margin saw a slight decline due to increased expenses, with net income decreasing from $75 million in 2023 to $68 million in 2024. The EBIT margin remains strong, highlighting operational efficiency.

Balance Sheet

Positive

The balance sheet shows a healthy equity position, with stockholders' equity increasing to $1.2 billion in 2024. The debt-to-equity ratio has improved significantly due to the elimination of total debt in 2024, reflecting strong financial stability. The equity ratio is favorable, indicating a solid financial foundation. However, the return on equity has decreased slightly, suggesting room for improvement in utilizing equity effectively.

Cash Flow

Positive

Operating cash flow has decreased from $117 million in 2023 to $58 million in 2024, which could indicate challenges in cash generation from operations. However, the company maintains a strong free cash flow position. The free cash flow to net income ratio is robust, but the decline in operating cash flow suggests the need for enhanced cash management strategies.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
628.52M	333.44M	328.12M	309.36M	284.81M
	Gross Profit
628.52M	333.44M	328.12M	309.36M	284.81M
	EBIT
623.28M	135.39M	191.39M	154.59M	62.08M
	EBITDA
0.00	109.91M	146.47M	161.26M	68.83M
	Net Income Common Stockholders
68.72M	75.00M	109.74M	115.44M	47.63M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
543.67M	133.03M	1.04B	1.05B	1.18B
	Total Assets
11.91B	11.38B	9.22B	8.60B	8.94B
	Total Debt
1.56B	1.41B	1.45B	377.83M	844.39M
	Net Debt
-64.67M	1.28B	1.26B	311.56M	409.47M
	Total Liabilities
10.68B	10.18B	8.23B	377.83M	844.39M
	Stockholders Equity
1.22B	1.20B	992.13M	995.34M	941.78M
Cash Flow		Free Cash Flow
58.39M	104.24M	113.37M	128.42M	109.58M
	Operating Cash Flow
58.39M	116.60M	120.76M	133.21M	112.49M
	Investing Cash Flow
-1.17M	-665.26M	-557.69M	131.11M	-695.53M
	Financing Cash Flow
-48.06M	298.74M	492.15M	-371.51M	940.17M

Brookline Bancorp Technical Analysis

Technical Analysis Sentiment

Negative

Last Price9.53

Price Trends

50DMA

11.31

Negative

100DMA

11.66

Negative

200DMA

10.75

Negative

Market Momentum

MACD

-0.16

Negative

RSI

39.79

Neutral

STOCH

41.52

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For BRKL, the sentiment is Negative. The current price of 9.53 is below the 20-day moving average (MA) of 10.64, below the 50-day MA of 11.31, and below the 200-day MA of 10.75, indicating a bearish trend. The MACD of -0.16 indicates Negative momentum. The RSI at 39.79 is Neutral, neither overbought nor oversold. The STOCH value of 41.52 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for BRKL.

Brookline Bancorp Risk Analysis

Brookline Bancorp disclosed 50 risk factors in its most recent earnings report. Brookline Bancorp reported the most risks in the “Finance & Corporate” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Brookline Bancorp Peers Comparison

Overall Rating

UnderperformOutperform

Sector (64)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
WRLD	77 Outperform	$725.12M	8.61	19.28%	―	-2.78%	24.39%
CNOB	74 Outperform	$868.03M	12.88	5.99%	3.38%	6.06%	-15.21%
OCFC	73 Outperform	$920.52M	9.54	5.95%	5.09%	7.54%	-2.82%
BFC	72 Outperform	$1.02B	15.66	10.36%	1.68%	19.72%	-10.57%
TCBK	70 Outperform	$1.25B	10.96	9.65%	3.65%	6.25%	-1.62%
BRKL	68 Neutral	$904.41M	13.19	5.68%	5.61%	7.79%	-8.83%
Sector *	64 Neutral	$13.46B	9.44	9.34%	4.72%	16.14%	-8.80%

* Financial Sector Average

Performance Comparison

BRKL

Brookline Bancorp

9.53

0.92

10.69%

OCFC

Oceanfirst Financial

14.95

0.86

6.10%

TCBK

Trico Bancshares

35.90

4.28

13.54%

WRLD

World Acceptance

121.63

-13.13

-9.74%

CNOB

ConnectOne Bancorp

21.17

3.85

22.23%

BFC

Bank First National

99.34

21.31

27.31%

Brookline Bancorp Earnings Call Summary

Earnings Call Date: Jan 29, 2025 | % Change Since: -20.05% | Next Earnings Date: Apr 23, 2025

Earnings Call Sentiment Neutral

The earnings call reflects a balanced sentiment with positive aspects from the merger announcement and net income improvement, but also challenges in specific loan sectors and increased operating expenses.

Highlights

Merger Announcement with Berkshire Hills Bancorp

Brookline Bancorp announced a planned merger with Berkshire Hills Bancorp to create a $24 billion financial institution, expected to generate significant economies of scale and cost savings.

Net Income Growth

Core operating performance improved slightly with net income of $20.7 million and operating earnings per share of $0.23.

Increase in Customer Deposits

Customer deposits increased by $116 million during the quarter, with a focus on time deposits and money market growth.

Improved Net Interest Margin

Net interest margin improved by 5 basis points to 312 basis points for the quarter.

Lowlights

Commercial Real Estate and Equipment Finance Reductions

There were reductions of $63 million in commercial real estate and $30 million in equipment finance.

Loan Portfolio Yield Decline

The weighted average coupon on the core loan portfolio declined 11 basis points to 592 basis points due to repricing to lower rates.

Charge-Off in Equipment Finance

A $5.1 million charge-off was recorded in the quarter, related to a large grocery loan in the equipment finance sector.

Increase in Operating Expenses

Operating expenses increased to $60.3 million from $57.9 million due to additional incentive and commission-related expenses.

Company Guidance

During Brookline Bancorp, Inc.'s Fourth Quarter 2024 Earnings Conference Call, the company provided guidance on several key metrics. They reported a net income of $20.7 million and operating earnings per share of $0.23, with GAAP earnings reflecting a net income of $17.5 million and earnings per share of $0.20 due to $3.4 million in merger charges. Loan growth was modest at $24 million, while customer deposits increased by $116 million, contributing to a 5 basis point improvement in the net interest margin. The company plans to merge with Berkshire Hills Bancorp, forming a $24 billion institution with complementary market footprints in New England. For the upcoming year, Brookline anticipates low single-digit loan growth, mainly driven by commercial and consumer loans, with projected deposit growth of 4% to 5%. The net interest margin is expected to improve by 4 to 8 basis points in Q1 and continue to improve throughout 2025, assuming a stable interest rate environment. Noninterest income is projected to range from $6 million to $7 million per quarter, while operating expenses are managed to be $247 million or less for the year, excluding merger-related costs. The effective tax rate is expected to be 24.25%. The company also maintained a quarterly dividend of $0.135 per share, yielding approximately 4.5% annually.

Brookline Bancorp Corporate Events

M&A TransactionsBusiness Operations and StrategyFinancial Disclosures

Brookline Bancorp Reports Strong Q4 Earnings Amid Merger

Positive

Jan 29, 2025

Brookline Bancorp reported a net income of $17.5 million and operating earnings of $20.7 million for Q4 2024, with total assets increasing to $11.9 billion. Despite a decrease in year-over-year earnings attributed to merger-related charges and economic factors, the company experienced significant growth in deposits and loans. A strategic merger with Berkshire Hills Bancorp is expected to close by the end of the second half of 2025, significantly impacting Brookline’s corporate structure and market presence.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.