Brookline Bancorp, Inc. (NASDAQ:BRKL) Q2 2020 Earnings Conference Call - Final Transcript

Jul 23, 2020 • 01:30 pm ET

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Brookline Bancorp, Inc. (NASDAQ:BRKL) Q2 2020 Earnings Conference Call - Final Transcript

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Q & A
Operator
Operator

All right. Thank you, sir. We will now begin the question-and-answer session. [Operator Instructions] And the first question we have will come from Mark Fitzgibbon of Piper Sandler. Please go ahead, sir.

Analyst
Mark Fitzgibbon

Hi, everybody. Good afternoon.

Executive
Paul A. Perrault

Hi, Mark.

Analyst
Mark Fitzgibbon

First question I had, I wondered if you could share with us some of the details on the $176 million of fitness credits on the, sort of the macro lease credit set to Bank of Rhode Island there. Could you give us some metrics on the portfolio?

Executive
Robert Rose

Sure. Hi, Mark, Rob Rose. First off, I'd tell you that $175 million is the whole macro lease portfolio. The fitness, pure fitness is less than that, maybe $160 million, but it is -- it is comprised of about 30% planet fitness franchises and most of those in multiple store operators. About 50% of it comes from YMCAs, YWCAs, about 30% would come from homeowners associations, exercise facilities in business parks, office parks, office buildings and schools, with a little bit of Gold's Gyms thrown in 30%, the remainder 20% would be independent operators, one, two, three store operations.

Analyst
Mark Fitzgibbon

Okay, great. And then secondly, I guess sort of a macro question Bob, of the $335 million loans that you're expecting will stay on deferral. Most of those in your estimation have the ability to return to full paying, say, at the end of the year or are some of these companies, you know it's hard to envision that they're going to get back to that place and therefore there is a very different conversation at the end of the year with them.

Executive
Robert Rose

It's very early to answer that with precision. It is our expectation that the majority of them will be able to come back to full payment. As time passes, Mark these return to payment will sort of coagulate around certain industries. I can give you an example of one that may have difficulty coming back to a company that leases audio visual equipment into the meeting business, right? You go to a conference in Las Vegas, they might supply the AV stuff. You know, they are going to be the recipient of a main street loan, which gets them, maybe to the time when people are going to business meetings, but that's an example of one that may have difficulty coming back without the benefit of that stimulus money from the main street program, but it is only a handful at this time that have emerged as potentially having more serious trouble.

Analyst
Mark Fitzgibbon

Okay. And then lastly, on credit, are you seeing much of a difference in business conditions for commercial customers in say, Rhode Island versus Massachusetts?

Executive
Robert Rose

No, I think both of them are states were early lock down and are both enjoying you know, moving from our phase 3s into phase 4s with very low infection hospitalization rates.

Analyst
Mark Fitzgibbon

Okay. And then Carl just a couple of financial questions, excluding the impact from PPP forgiveness on the margin. How are you thinking about the