Brookline Bancorp - Q3 2024
October 24, 2024
Executive Summary
- Q3 2024 delivered sequential improvement: EPS $0.23 on net income of $20.1M; net interest income rose to $83.0M and net interest margin expanded 7 bps to 3.07% versus Q2 2024.
- Deposit mix improved materially: customer deposits +$103.2M with brokered deposits −$107.9M; demand checking +$43.5M, supporting lower funding costs and NIM expansion through 2025 per management.
- Credit costs moderated: net charge-offs fell to $3.8M (0.16% annualized) and provision declined to $4.8M; NPAs/Assets rose to 0.62% driven by one Eastern Funding relationship reserved at ~55%.
- Outlook/guidance catalysts: Q4 NIM guided to 312–320 bps, noninterest income $6–7M/quarter, deposit growth 4–5%, OpEx growth 3.0–3.5% in 2025, and dividend maintained at $0.135; management signaled potential future buyback discussion as the curve normalizes.
What Went Well and What Went Wrong
What Went Well
- Margin and NII inflected higher: “Performance improved in the quarter … margin increased 7 basis points … expect … NIM continue to improve right through 2025” (CEO); net interest income rose $3.0M q/q to $83.0M and NIM to 3.07%.
- Deposit quality/mix improved: customer deposits +$103.2M; demand deposits +$43.5M; brokered −$107.9M, positioning liabilities to reprice down after the Fed’s 50 bp cut in September.
- Operating discipline: operating expenses declined to $57.9M (ex-Q2 $0.8M restructuring, OpEx down ~$0.5M q/q); pretax, pre-provision income up $4.2M q/q to $31.4M.
What Went Wrong
- Nonperformers rose: NPAs/Assets increased to 0.62% and nonaccruals to $71.2M, driven by one equipment financing relationship (~$9.3M reserved at ~55%).
- Equipment finance and specialty vehicles remained a drag: $3.8M net charge-offs, ~$2.1M from the discontinued specialty vehicle portfolio; equipment financing NPLs reached $37.2M.
- Office CRE remains an area to watch: one office nonaccrual of ~$10.8M with ~$2M specific reserves; criticized/classified ~$9.2M, albeit overall office portfolio remains largely pass-rated.
Transcript
Operator (participant)
Good afternoon, and welcome to Brookline Bancorp, Inc.'s third quarter 2024 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 proceed.
Laura Vaughn (Attorney)
Thank you, Sierra, 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 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 a 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 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.
Paul A. Perrault (Chairman and CEO)
Thank you, Laura, and good afternoon, everyone. Thank you for joining us for today's earnings call. Performance improved in the quarter with net income of $20.1 million and earnings per share of $0.23. Loans grew by a modest $34 million, customer deposits increased to $103 million, and our margin increased 7 basis points. As market rates gradually return to normal, we expect to see our net interest margin continue to improve right through 2025. I will now turn you over to Carl, who will review the company's third quarter results.
Carl Carlson (CFO)
Thank you, Paul. During the quarter, total assets grew $42 million, driven by loan growth of $34 million in C&I and consumer, while the equipment finance and commercial real estate portfolios declined. In the third quarter, we originated $459 million in loans at a weighted average coupon of 735 basis points. The weighted average coupon on the core loan portfolio declined 2 basis points during the quarter to 603 basis points at September thirtieth. On a linked quarter basis, the yield on the loan portfolio increased 15 basis points to 617 basis points. On the deposit side, customer deposits grew $103 million, while brokered deposits declined $107 million. Deposit growth continued to be focused in the time deposits. However, we also saw demand deposits grow $44 million in the quarter.
Total funding costs were 367 basis points, an increase of 2 basis points as the overall net interest margin improved 7 basis points to 307 basis points for the quarter. Total average interest-earning assets grew modestly by $36 million on a linked quarter basis, resulting in net interest income of $83 million, an increase of $3 million from Q2. Non-interest income was $6.3 million, which was flat with the prior quarter, as lower deposit fees were offset by higher participation fees and other non-interest income. Operating expenses were $57.9 million for the quarter versus $59.2 million in Q2. In the second quarter, there was an $823,000 restructuring charge as we exited the specialty vehicle business.
Excluding this charge, operating expenses declined $500,000 on a linked-quarter basis due to lower marketing and other operating expenses, partially offset by higher compensation and professional fees. The provision for credit losses was $4.7 million for the quarter, a decrease of $900,000 from the second quarter. Net charge-offs were $3.8 million or 16 basis points on loans annualized. Non-performing loans increased $10.5 million in the quarter due to one Eastern Funding relationship, financing multiple grocery stores. NPAs to total assets increased to 62 basis points, total loans. Our reserve coverage ratio increased to 131 basis points. Looking forward, as I mentioned last quarter, client behavior and industry responses continued to adapt to a fairly volatile interest rate environment. In mid-September, the Federal Reserve cut short-term rates 50 basis points.
Longer-term rates initially declined significantly, with the ten-year treasury closing below 3.75% and the five-year rate around 3.50%. Since early October, rates have more than retraced the decline, and now the ten-year is around 4.2% and the five-year is a little over 4%. As the yield curve continues to normalize, we will see net interest margin improvements. The modest improvements in the environment suggest our net interest margin will increase five to 10 basis points in Q4 and continue to improve throughout 2025. Our net interest margin for the month of September was 313 basis points. We anticipate increases in loan portfolio to be measured for the remainder of 2024 and into 2025, as growth in commercial and consumer loans will be tempered by the runoff of specialty vehicle and continued lower commercial real estate activity.
Our cash and securities portfolio will remain stable, representing 9%-12% of total assets. On the deposit side, we anticipate growth of 4%-5%. Given the prevailing interest rates, the migration of lower-cost deposits may persist but is anticipated to slow. Our Q4 margin is projected to fall within a range of 312-320 basis points and continue to improve. However, this is dependent upon deposit flows and the timing and magnitude of future 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, with growth of 5%-10% in 2025.
Currently, we are projecting overall operating costs to grow in a 3-3.5% range for 2025, and our effective tax rate is expected to be in the range of 24% to 25%. Yesterday, the board approved maintaining our quarterly dividend at $0.135 per share, to be paid on November 29th, to stockholders of record on November 15th. On an annualized basis, our dividend payout approximates a yield of 5.1%. This concludes my formal comments, and I'll turn it back to Paul.
Paul A. Perrault (Chairman and CEO)
Thanks, Carl, and we will now open it up for questions.
Operator (participant)
If you would like to ask a question, please press star, followed by one on your telephone keypad. If you'd like to remove that question, press star, followed by two. And if you are using a speakerphone, please pick up your handset before asking your question. Our first question today comes from Mark Fitzgibbon with Piper Sandler. Your line is now open.
Mark Fitzgibbon (Analyst)
Hey, guys. Hey, guys, good afternoon.
Paul A. Perrault (Chairman and CEO)
Hi, Mark.
Mark Fitzgibbon (Analyst)
First question, Carl, could you just clarify your comments? I missed them on that one, equipment finance loan. Can you give us or share any color on that?
Carl Carlson (CFO)
I imagine you're talking about the one loan that went nonaccrual this quarter, right?
Mark Fitzgibbon (Analyst)
Correct.
Carl Carlson (CFO)
That was one large loan at Eastern Funding, and it finances two grocery stores.
Mark Fitzgibbon (Analyst)
Okay. And any thoughts on timing for resolution?
Carl Carlson (CFO)
I don't have any idea of exactly when that's gonna get resolved. And we do have a sizable specific reserve set up for that loan. About $5 million we set up this quarter.
Mark Fitzgibbon (Analyst)
Okay, great. And then can you share with us what the margin was, spot margin in September?
Carl Carlson (CFO)
Spot margin was 3.13.
Mark Fitzgibbon (Analyst)
Okay, great, and also was curious about the loan pipelines and the complexion, what those look like today.
Paul A. Perrault (Chairman and CEO)
We're actually seeing a lot more institutional type things. We've hired some personnel who are from this area specializing in that, and so we're seeing that in all the markets, in Greater Boston, Rhode Island, and in Westchester County. Things like private schools, some colleges, it's all very, very good business. Obviously, we're being very, very selective in real estate, specialty vehicles and in run-off mode, so we're not originating there. I'd say that equipment finance is beginning to pick up a little bit more in their traditional laundromats. Some C&I, but it is not robust by any means at all, but it is moving forward pretty well. Pretty well. I'll take a stab. I don't know.
I don't think Carl gave a number, but I, you know, I would be very happy with 4% or 5% gain in 2025 in the loan portfolio.
Mark Fitzgibbon (Analyst)
Okay, great. And then I know you guys like to keep private sort of what's going on at Clarendon Private, but I wondered, we're a couple of years in now, if you could share any metrics on how that's going, whether we're, you know, at profitability and what AUM or AUA currently?
Carl Carlson (CFO)
Sure. Yeah, we're not at profitability yet. We're seeing the mix of those assets under management change. So in the early stages, we were basically doing a lot of treasury business, which we did not make any money on at all, but it was good introductory business to the clients and being able to help them out. We're seeing that transition over to more of a balanced portfolios, thank goodness on both counts. I think they've done quite well in this market. And you know, so we're still around that $350 million in assets under management. So it's growing.
We really like the growth that we've had in it, the customers that we're attracting into that business and able to take care of. Just would like to see it grow a little faster than it has.
Paul A. Perrault (Chairman and CEO)
Impatient.
Carl Carlson (CFO)
I'm a little impatient. If I'm impatient, yeah.
Mark Fitzgibbon (Analyst)
You know, any idea what percentage of the customers are coming from the bank versus, you know, outside?
Paul A. Perrault (Chairman and CEO)
Most.
Carl Carlson (CFO)
I'd say most. I probably, it's 70% or so.
Mark Fitzgibbon (Analyst)
Okay.
Carl Carlson (CFO)
Yeah.
Paul A. Perrault (Chairman and CEO)
In some cases, it's a customer who's selling their business. They might have favored some other Wall Street firm for their money, but now they come here now.
Mark Fitzgibbon (Analyst)
Thank you.
Operator (participant)
Our next question today comes from Laurie Hunsicker with Seaport. Your line is now open.
Laurie Hunsicker (Analyst)
Yeah, hi, good afternoon, Paul and Carl.
Paul A. Perrault (Chairman and CEO)
Hi, Laurie.
Laurie Hunsicker (Analyst)
Just wondered if we could circle back on credit here. So of your $37.2 million of equipment non-performing loans, how much of that was specialty vehicles?
Carl Carlson (CFO)
$4.6 million is tow and related specialty vehicles. Yep.
Laurie Hunsicker (Analyst)
... Okay, $4.6 million. Okay, great. And then I guess same question on the charge-offs. You had $3.8 million in charge-off. It was equipment finance. Is that all the spec vehicles that discontinued book, or was that split somehow?
Carl Carlson (CFO)
About 2.1 was specialty vehicle of the $3.8 million in charge-offs.
Laurie Hunsicker (Analyst)
Okay. Great. Okay, and then, what is your reserve on your equipment finance book, or what is your reserve on your specialty vehicles? He's looking it up.
Carl Carlson (CFO)
So I'll give you-
Laurie Hunsicker (Analyst)
Okay
Carl Carlson (CFO)
... I'll give you a little break here. I don't have any total. I have it based on, you know, our Eastern Funding Corp, which is about a 128 basis points on that. Specialty vehicle, we have a 224 basis points. And the Macrolease portfolio, kind of look at that separately. We include it in Corp, but we break it out, is a 132. And that excludes any specific reserves that we may have on a specific a particular credit. We take that out. So those are the general reserves on those portfolios.
Laurie Hunsicker (Analyst)
Okay, great.
Carl Carlson (CFO)
I don't have the dollars in front of me-
Laurie Hunsicker (Analyst)
Okay
Carl Carlson (CFO)
... but.
Laurie Hunsicker (Analyst)
Okay. And then-
Carl Carlson (CFO)
Sure
Laurie Hunsicker (Analyst)
... with the discontinued spec vehicle, I know you had done a reduction in force, and I guess we're gonna see the full results of that come through in the fourth quarter. Is that right, from the expense savings side, or how should we be thinking about that?
Carl Carlson (CFO)
You're already seeing it in basically the H2 of Q2, Q3. So you'll see it in full force in Q4. It's about $800,000 a quarter in benefit.
Laurie Hunsicker (Analyst)
In benefit, right. Okay. And so then, with respect, Carl, to your guide, your 3%-3.5% expense growth guide, what base are you using for that? How should we think about that, especially relative to the $800,000 a quarter savings?
Carl Carlson (CFO)
I'd use our current quarter, take off a couple hundred thousand for this quarter. That's about it for the fourth quarter, and that would be the run rate. Or $240 million, I would say, on an annualized basis, and 3% to 3.5% off that.
Laurie Hunsicker (Analyst)
Perfect. Okay. Okay, that's great. Okay, and then office. Can you help us think about maybe just, and, and you guys have some great slides here, but, office nonaccruals, how much was that? And then the, the criticized and classified that you present, super helpful that you present that by maturity, but what is, what is that relative to your total book? So office nonperformers.
Carl Carlson (CFO)
That's a trick- that's a tricky question now. Okay, so starting with the office. The nonaccrual loans related to office, that hasn't changed. That's still basically one credit. It's about $10.8 million that's in that book. I think that's also the number that's criticized and classified loans, is the same now. I don't think that has changed. Around about nine point two-
Laurie Hunsicker (Analyst)
Okay, but then the-
Carl Carlson (CFO)
I think it's criticized and classified.
Laurie Hunsicker (Analyst)
Gotcha. Okay, and then just looking at your deck here, it looks like the way that you're presenting the office criticized and classified, this is just the maturities, $137 million, right? So how do we think about it relative to your $700 million book? Or is it just that $10.5 million, that's it?
Carl Carlson (CFO)
I lost where you were going with that, Laurie.
Laurie Hunsicker (Analyst)
Oh, no, I just-
Carl Carlson (CFO)
What do you-
Laurie Hunsicker (Analyst)
Yeah, sorry. Well, so the office nonperformers, that $10.5 million, that's just on the-
Carl Carlson (CFO)
That's right
Laurie Hunsicker (Analyst)
... the book that's maturing in the next two years. I mean, I love this slide. Slide 18 is great, right? Because the maturity wall is really what we care about. That's just triggering the nonperformers. I'm just wondering more broadly, what your overall nonperformers are on your $700 million total office book, not just the part that's maturing in two years. Sorry, I think I'm not asking this right. I'm just looking for what is the. What are, yeah-
Carl Carlson (CFO)
The only nonaccrual loan. Yeah, the total nonaccrual loans is 10.8.
Laurie Hunsicker (Analyst)
Yeah. That's, that's all the office nonaccrual, sorry.
Carl Carlson (CFO)
Yeah.
Laurie Hunsicker (Analyst)
Perfect. Perfect. Okay.
Carl Carlson (CFO)
Yeah, I know the slides only show two years to focus on the two years, but overall, it's still the same. It's the number.
Laurie Hunsicker (Analyst)
No, I love, I love this quarterly breakdown. This is, this is super helpful. I wish more people put this in. So that's great. The office reserves, how much is that on your $700 million book?
Carl Carlson (CFO)
It's 2%, excluding any specific reserves.
Laurie Hunsicker (Analyst)
Okay, and then what, what specific reserves do you have, presumably on that $10.8 million, or?
Carl Carlson (CFO)
We have an additional $2 million in Specific Reserves.
Laurie Hunsicker (Analyst)
... Okay, that's great. Okay, and then I guess last question, Paul, more for you. Can you talk a little bit about buybacks below book value, even just to offset your option dilution, just how you're thinking about that? Thanks.
Carl Carlson (CFO)
We get this question frequently, which you would expect when you're trading at or below tangible book value. I think we've been very careful to say, you know, signal that we would be doing anything in the near term, considering the inverted yield curve, the margin, and, you know, the questionable credit and office environment. I think things have materially changed. In that regard, I think we're starting to see the turn. We've seen, you know, the curve start to steepen, or at least flatten to steepen. Credit is improving. We're seeing the NIM turnaround. So I think that's gonna be more of a, more of a conversation going forward with the board about the opportunity to do stock buybacks.
We've historically put something in place early in the year, but that's something we'll continue to talk about at the board level.
Laurie Hunsicker (Analyst)
Okay. Okay, great. And, sorry, just one more question, actually. Paul, can you talk a little bit about M&A? You guys have been active in M&A, and obviously, the interest rate environment has not been very favorable, but that's coming back to just how you're thinking about M&A more broadly, and I don't know, any tidbits-
Paul A. Perrault (Chairman and CEO)
I think-
Laurie Hunsicker (Analyst)
Generally, you can share on that better?
Paul A. Perrault (Chairman and CEO)
Well, it's been fairly quiet for exactly the reasons that you cited. And I do think, in much the same way that Carl just described the environment for the income statement and balance sheet, I think the same thing is beginning to come around in M&A. And as these rates come down, if they come down, it's easier to deal with the marks. But, you know, in the meantime, it's very difficult. It's very difficult, and it's a relatively thin market. There's a deal here and there, but I think it will improve, but it's gonna take a little time.
Laurie Hunsicker (Analyst)
Okay, great. Thanks for taking my questions.
Paul A. Perrault (Chairman and CEO)
Okay, Laurie.
Operator (participant)
Our next question comes from Christopher O'Connell with KBW. Your line is now open.
Christopher O'Connell (Analyst)
Hey, good afternoon.
Paul A. Perrault (Chairman and CEO)
Christopher-
Christopher O'Connell (Analyst)
I just wanted to kind of keep going on the, you know, specialty vehicles in runoff mode. I think you said, you know, two million in change of the net charge-offs this quarter were related to that. You know, as this portfolio runs off over the next, you know, few quarters, do you think that that's, you know, within shooting distance of kind of what you'd expect, you know, for future charge-offs there?
Paul A. Perrault (Chairman and CEO)
Possibly. Possibly. I, I think there was some catch up in the past couple of quarters that you've seen in those charge-offs. So I'm, I'm hopeful that it, it'll get better, but it is a portfolio that's still experiencing some, some level of trouble. You might recall, these are small tow truck operators in a lot of cases, and delivery vehicle route owners, if you will, who have been disenfranchised. When stuff moved to Amazon, when Amazon started doing their own deliveries, a lot of these guys were out of business. So that's, that's kind of behind us, and now it's in a more normal, slightly riskier portfolio level mode. So I think, I'm, I'm hopeful that it will improve. And the balances are coming down fast and hard.
Christopher O'Connell (Analyst)
Okay, great. That's helpful. And then on the provision, you know, the credit for unfunded commitments was, you know, pretty substantial the past couple of quarters, like around $4.5 million, which seems kind of above average relative to, you know, the past. Is there anything specific that's driving that?
Carl Carlson (CFO)
It did come down materially this quarter, and I think that's due to the revisiting some of the assumptions that went into, particularly home equity lines of credit and the losses that you might experience on those unused lines. So they updated the, you know, the models with some actual data, more current data, which brought that down, as well as the slight change that we've done in the weightings of the economic scenarios. So we did move a little bit away from the recession scenario. With, you know, with the Fed cutting rates and the economic environment improving, things of that nature, it really made sense to move away from the 60% weighting that we had for recession, the recession scenario, towards a more fifty, fifty, forty-five and five, I believe.
You know, our long-term, you know, what we would consider a neutral environment would be a 30, 40, 30 mix, and so I think over time, we'll continue to see that, if it warrants.
Christopher O'Connell (Analyst)
Okay, great. So long term, you know, the overall kind of reserve ratio and a combination of, you know, the specialty vehicle coming off and, you know, returning to a normal environment, you know, probably settles out a bit lower?
Carl Carlson (CFO)
Yeah. Yeah, so we're pretty, I don't want to say aggressive, but we're very responsive to loans that go on the watch list or anything that we're looking at that we see there might be some weakness and setting up specific reserves around that. So we have over about $25 million of specific reserves, and that allows for loan losses today. And so when you take that out, you know, that's 131 basis points on total loans, but you take that out, you say, okay, the general reserve's around 110 basis points. I would not be surprised if that goes down over time, just, as the market continues to improve.
Christopher O'Connell (Analyst)
Okay, great. And then I noticed that just on the on slide 15 with the CRE LTVs, one is the medical category there, is that office? And then just noticed that the, like, the 70 you know plus portion of that, you know, has kind of gone up over the past year or so. You know, any, any color around just, you know, what's driving that?
Carl Carlson (CFO)
I don't have any color on that.
Christopher O'Connell (Analyst)
Okay, great.
Paul A. Perrault (Chairman and CEO)
Yeah, they are mostly office-
Christopher O'Connell (Analyst)
Appreciate, you know, all the maturity schedules, you know, that you guys give on the, you know, on the CRE for the next couple of years. You know, for the CRE that is, you know, set to maturity price, what are generally kind of the yields that those are, you know, coming off at?
Carl Carlson (CFO)
One second. About 6%, a little north of 6%.
Christopher O'Connell (Analyst)
Okay, great. And I know you guys gave the blended originations, you know, this quarter. You know, I guess, you know, just breaking it down a little further, do you have, you know, some of the origination yields just for, you know, the C&I versus the equipment finance in the CRE?
Carl Carlson (CFO)
Sure. So I mentioned earlier we originate about $459 million of loans. The coupon on that was about 7.35%. Just trying to break that down. Total commercial real estate loans, about $170 million of that, at 7.22%. Total commercial loans, which includes equipment financing, about $195 million, at about 7.71%. And then we've got some residential mortgages, home equities, and things of that nature, consumer loans at around 6.84%.
Christopher O'Connell (Analyst)
Awesome. Perfect. Appreciate it. Thanks for taking my questions.
Carl Carlson (CFO)
Okay, Chris.
Operator (participant)
Our next question comes from Steve Moss with Raymond James. Your line is now open.
Stephen Moss (Analyst)
Good afternoon, guys.
Carl Carlson (CFO)
Hi, Steve.
Stephen Moss (Analyst)
Morning. I just want to go on the NII and the margin here's the thought process. Just kind of curious, maybe starting with, you know, what have you seen in terms of deposit rates coming in here? You know, I hear you guys in terms of margin expansion, just kind of curious where funding costs are shaking out, because I see, like, in your outlook disclosure, you know, lower rates hurt NII, but obviously, you know, you guys are signaling margin expansion here.
Carl Carlson (CFO)
Yeah, that's a great question, and we debate what we should put in this presentation, quite frankly. But you know, our asset liability models, we've been holding true to that 40% deposit betas overall for the pricing in the model. We also provide the betas throughout the cycle that we've actually experienced. And so you kind of look at this thing at when rates change, how do the rates change on our individual products? And those kind of drive the beta discussions. But then you have the actual activity of folks moving balances between deposit products, which actually, you know, increases your beta on a total funding basis and driving that. So what are we seeing going forward?
And so when you look at this model, it's more of a, you know, flat balance sheet type of an environment saying we'll move if the pricing on overall is 40 basis points. Betas are much, much higher. So we did see the Fed cut rates 50 basis points in, you know, September eighteenth. And we basically immediately cut our rates on our CD products and the highest tiers of our savings and money market accounts by 50 basis points. So you'd say, okay, that's 100% beta that you experienced on those particular products. Now, some of the lower tiers, we didn't move the rates, right? Because they were already fairly, you know, fairly attractive rates. And we, it's good money at those rates. You don't really want to move that.
We're being very proactive in moving those rates. We also have a lot of CDs that mature. You know, so we've got CDs, you know, at $413 million or so of CDs maturing in Q4, coming off at a 4.84% basic coupon. And so that's repricing into the fours, the low fours. Brokered CDs, $140 million of brokered CDs at 5.40%. Those are coming down into the low fours or mid-fours. So we got borrowing. We just got $170 million of borrowing settlement, so at a little over 5%. That's coming down into the mid-fours.
So we're seeing a lot of the movement on the liability side, and then the ability to reprice the savings now in money market accounts and continue to be active in that space. I don't think we're seeing any pushback in the market. I think a lot of the, like, the competition's doing the same, so it doesn't feel like we're losing out in that regard. And so we feel pretty optimistic that we're able to meet the decline in market interest rates that we're seeing on our loan portfolio, 'cause we have $2.2 billion of loans that reprices within three months. Being able to reprice the liability side to meet that or exceed that.
Stephen Moss (Analyst)
Okay, great. And then just kind of, so I hear you on the higher deposit beta and, you know, obviously, a positive step on the margin with trends for the upcoming quarter. As you think about 2025 and you know, if we get 100 basis points or a little bit more than that, just kind of curious, where do you think that margin kind of shakes out by the fourth quarter of 2025?
Carl Carlson (CFO)
Right now, our models suggest it's, it'll be in the three forties.
Stephen Moss (Analyst)
Okay. Great. That's all my questions. I appreciate all the color here.
Paul A. Perrault (Chairman and CEO)
Okay, Steve. Thank you.
Operator (participant)
Thank you all for your questions. This concludes our Q&A session. I'd like to turn the conference back over to Mr. Perrault for any closing remarks.
Paul A. Perrault (Chairman and CEO)
Thank you, Sierra, and thank you all for joining us today, and we look forward to talking to you again next quarter.
Operator (participant)
The conference has concluded. Thank you for attending today's presentation. You may now disconnect.