Clarendon Private, Brookline Bancorp’s new wealth management division, has operated as the company expected and executives say the division remains on track to break even by late 2024.
Brookline Bancorp, the parent company of Brookline Bank and Bank Rhode Island, had launched its wealth management division last fall. Carl Carlson, Brookline Bancorp’s co-president and chief financial officer, said during Brookline Bancorp’s second quarter earnings call last week that the company was “extremely pleased” with Clarendon Private so far, noting that it takes time to build a wealth management business.
“The clients that we’re bringing in and the types of assets and clientele that we’re attracting is exactly what we wanted,” Carlson said. “It’s working extremely well with the banks – our lenders, our branch managers have really embraced them – and the teams have been doing a great job together.”
When asked how much Clarendon Private has in assets under management, Carlson declined to provide an amount. Carlson had said last year that the company expected Clarendon Private to break even in about three years with $500 million to $600 million in assets under management.
Brookline Bancorp saw second quarter earnings drop 20 percent year-over-year. The company had second quarter net income of $25.2 million, or $0.33 per basic and diluted share, compared to $31.6 million, or $0.40 per basic and diluted share, in the second quarter of 2021. Net income in the first quarter of 2022 was $24.7 million, or $0.32 per basic and diluted share.
The company’s second quarter results included merger expenses of $535,000. Brookline Bancorp announced in May that it had agreed to acquire Yorktown Heights, New York-based PCSB Financial Corp., the parent company of PCSB Bank, in a cash and stock deal valued at approximately $313 million.
The deal is expected to close in the fourth quarter. In response to an analyst’s question, Carlson did not provide a more specific time frame for completing the acquisition.
In response to another analyst’s question, Paul Perrault, Brookline Bancorp’s CEO, said the effects of the interest rate environment have not changed his appetite for future deals, noting that conversations about mergers and acquisitions have continued.
“My appetite has not diminished nor increased, but if we looked to do something beyond [PCSB Bancorp], I’d have Carl [Carlson] weigh in pretty heavily on what the effect of this interest rate environment would be,” Perrault said. “But fundamentally I haven’t changed my appetite.”
Brookline Bancorp had total assets of $8.51 billion on June 30, down from $8.63 billion on March 31 and from $8.46 billion on June 30, 2021.
Total loans and leases were $7.3 billion at the end of the second quarter, an increase of $68.8 million from the first quarter and $271.6 million year-over-year.
Total deposits at the end of the second quarter were $6.89 billion, down from $7.09 billion at the end of the first quarter and down by $200,000 year-over-year.