BHLB Berkshire Hills Bancorp Inc

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

 

PURSUANT TO SECTION 13 OR 15(D) OF

THE SECURITIES EXCHANGE ACT OF 1934

 

Date of Report (Date of earliest event reported): January 30, 2025

 

BERKSHIRE HILLS BANCORP, INC.

(Exact Name of Registrant as Specified in its Charter)

 

Delaware		001-15781		04-3510455
(State or Other Jurisdiction) of Incorporation)		(Commission File No.)		(I.R.S. Employer Identification No.)

 

60 State Street, Boston, Massachusetts		02109
(Address of Principal Executive Offices)		(Zip Code)

 

Registrant’s telephone number, including area code: (800) 773-5601, ext. 133773

 

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class		Trading symbol(s)		Name of each exchange on which registered
Common stock, par value $0.01 per share		BHLB		New York Stock Exchange

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).

 

Emerging growth company ¨

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

 

 

Item 2.02

Results of Operations and Financial Condition

 

On January 30, 2025, Berkshire Hills Bancorp, Inc. (the “Company”), the holding company for Berkshire Bank (the “Bank”), announced its financial results for the fourth quarter ended December 31, 2024. The news release containing the financial results is included as Exhibit 99.1 and shall not be deemed “filed” for any purpose.

 

The Company conducted a conference call/webcast on January 30, 2025, to discuss the financial results for the quarter and provide guidance about expected future results. A telephone replay of the call will be available through February 4, 2025. The webcast will be available on the Company’s website at ir.berkshirebank.com for an extended period of time.

 

Item 7.01

Regulation FD Disclosure

 

The Company made available slides for a presentation that the Company utilized in connection with its conference call. A copy of the presentation can be found on the Company’s website at ir.berkshirebank.com.

 

Item 9.01

Financial Statements and Exhibits

 

	(a)	Financial Statements of Businesses Acquired.  Not applicable.
	(b)	Pro Forma Financial Information.  Not applicable.
	(c)	Shell Company Transactions.  Not applicable.
	(d)	Exhibits.
		Exhibit No.	Description
		99.1	News Release dated January 30, 2025
		104.1	Cover Page for this Current Report on Form 8-K, formatted in Inline XBRL

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.

 

		Berkshire Hills Bancorp, Inc.
DATE: January 30, 2025	By:	/s/ Nitin J. Mhatre
		Nitin J. Mhatre President and Chief Executive Officer

 

 

 

Exhibit 99.1

 

 

Berkshire Hills Reports Strong Fourth Quarter Operating Results

$0.46 GAAP EPS; $0.60 Operating EPS

 

·

Operating EPS growth of 3% quarter-over-quarter and 28% year-over-year; FY2024 Operating EPS of $2.22 up 4% year-over-year

·

Average deposit growth of 3% and Average loan growth of 0.4% quarter-over-quarter; Loans to deposits ratio improved further during the quarter

·

0.52% delinquent and non-performing loans to total loans, lowest in nearly two decades

·

7.6% return on tangible common equity; 9.9% operating return on tangible common equity

·

13.0% common equity Tier 1 ratio

 

BOSTON, January 30, 2025 - Berkshire Hills Bancorp, Inc. (NYSE: BHLB) today reported results for the fourth quarter of 2024. These results along with comparison periods are summarized below:

 

($ in millions, except per share data)		Three Months Ended												Twelve Months Ended
		Dec. 31, 2024				Sep. 30, 2024				Dec. 31, 2023				Dec. 31, 2024				Dec. 31, 2023
Net income (loss)		$	19.7			$	37.5			$	(1.4	)		$	61.0			$	69.6
Per share			0.46				0.88				(0.03	)			1.43				1.60
Operating earnings1			26.0				24.8				20.2				94.9				93.2
Per share			0.60				0.58				0.47				2.22				2.14
Net interest income, non FTE		$	86.9			$	88.1			$	88.4			$	351.6			$	369.0
Net interest income, FTE			88.8				90.1				90.4				359.6				376.9
Net interest margin, FTE			3.14	%			3.16	%			3.11	%			3.16	%			3.27	%
Non-interest income			23.3				37.6				(8.4	)			48.4				42.8
Operating non-interest income1			23.2				21.5				16.7				82.1				67.8
Non-interest expense		$	77.6			$	72.0			$	79.0			$	296.5			$	301.5
Operating non-interest expense1			71.0				72.3				75.3				287.0				295.2
Efficiency ratio1			62.4	%			63.7	%			67.8	%			63.9	%			63.9	%
Average balances
Loans		$	9,271			$	9,233			$	8,990			$	9,176			$	8,814
Deposits			9,659				9,360				9,936				9,536				9,704
Period-end balances
Loans			9,385				9,212				9,040				9,385				9,040
Deposits			10,375				9,577				10,633				10,375				10,633

 

1. See non-GAAP financial measures and reconciliation to GAAP measures beginning on page 12.

  

 

Berkshire CEO Nitin Mhatre stated, “Berkshire continued its positive momentum and finished the year strong, highlighted by a year-over-year 28% increase in fourth quarter operating EPS and a 4% increase for full year operating EPS. This reflected the cumulative benefit of ongoing growth initiatives together with strategic optimization initiatives including the branch network sales and consolidations, and the sales of securities and targeted loan portfolios. Our results also benefited from strong credit discipline, rigorous expense management, investments in new client-facing bankers and enhancements to our digital platform and consumer product offerings. We achieved a 9.9% operating return on tangible common equity in the fourth quarter, and 9.6% for the full year, following a 10.1% result for the year 2023. Berkshire has been recognized by Newsweek as one of America’s Best Regional Banks for the third year in a row, and our positive impact in the community was recognized by the American Bankers Association.”

 

Mr. Mhatre continued, “In December we announced a definitive agreement with Brookline Bancorp, Inc. for a merger of equals to create a preeminent Northeast banking franchise positioned to deliver an exceptional client experience and create greater value for shareholders. We had a strong response from investors and successfully executed a capital raise of $100 million of common stock to support the merger, a reflection of confidence in our plans and accomplishments. I want to thank our teams for their continued dedication to transforming our franchise and for their service to our stakeholders as we work toward an exciting new chapter.”

 

Berkshire CFO Brett Brbovic added, “Quarter-over-quarter operating income increased 5% on higher fee revenue and lower operating expense. The efficiency ratio was 62.4%, an improvement over prior periods. We posted a solid 3% growth in average deposits improving our loans to deposits profile further. The 4Q24 net interest margin was 3.14%, down 2 basis points linked quarter and up 3 basis points year over year. Asset quality remained solid, and liquidity and capital strength improved. Tangible book value per share advanced 1% linked quarter and 9% year-over-year.”

 

	As of and For the Three Months Ended
		Dec. 31, 2024				Sept. 30, 2024				Dec. 31, 2023
Asset Quality
Net loan charge-offs to average loans			0.14	%			0.24	%			0.20	%
Non-performing loans to total loans			0.26	%			0.26	%			0.24	%
Returns
Return on average assets			0.68	%			1.28	%			(0.05	)%
Operating return on average assets1			0.90	%			0.85	%			0.68	%
Return on tangible common equity1			7.59	%			14.83	%			(0.24	)%
Operating return on tangible common equity1			9.93	%			9.91	%			8.90	%
Capital Ratios2
Tangible common equity/tangible assets1			9.4	%			9.1	%			8.0	%
Tier 1 leverage			11.0	%			9.9	%			9.6	%
Common equity Tier 1			13.0	%			11.9	%			12.0	%
Tier 1 risk-based			13.2	%			12.2	%			12.3	%
Total risk-based			15.4	%			14.4	%			14.4	%

 

1. See non-GAAP measures and reconciliation to GAAP beginning on page 12. All performance ratios are annualized and are based on average balance sheet amounts, where applicable.

2. Presented as estimated for December 31, 2024 and actual for the remaining periods.

 

 

Berkshire Hills Bancorp, Inc. (NYSE: BHLB) is the parent company of Berkshire Bank, a relationship-driven, community-focused bank with $12.3 billion in assets and 83 financial centers in New England and New York. Berkshire is headquartered in Boston and offers commercial, retail, wealth, and private banking solutions. Berkshire has a pending agreement to merge with Brookline Bancorp, Inc., a multi-bank holding company with $12 billion in assets and branches in Massachusetts, Rhode Island, and New York.

 

Q4 2024 Financial Highlights (comparisons are to the prior quarter unless otherwise noted).

 

Income Statement. Fourth quarter GAAP income was $20 million, or $0.46 per share. Operating earnings totaled $26 million, or $0.60 per share. GAAP results included $6.6 million in non-operating expenses related primarily to the pending merger. Operating earnings increased $1.2 million, or 5%, linked quarter primarily due to a $1.2 million decrease in operating non-interest expense. The fourth quarter was the first full quarter after the ten branch sale. Fourth quarter operating EPS increased 3% linked quarter and 28% year-over-year, reflecting full year organic growth, improved efficiency, and lower provision expense.

 

For the full year 2024, GAAP income was $61 million, or $1.43 per share, compared to $70 million, or $1.60 per share, in 2023. Full year 2024 operating income was $95 million, or $2.22 per share, increasing from $93 million, or $2.14 per share, in 2023. The increase in operating income included the benefit of decreases in credit loss provision expense and in operating expenses, offset by the impact of a lower net interest margin.

 

The fourth quarter efficiency ratio improved to 62.4% from 63.7% linked quarter.

 

Quarterly net interest income decreased linked quarter by $1.2 million to $87 million in 4Q24.

 

•

The net interest margin decreased 2 basis points to 3.14%.

o

The earning asset yield decreased 20 basis points.

•

The loan yield decreased 23 basis points.

o

The cost of funds decreased 17 basis points.

•

The cost of deposits decreased 12 basis points.

•

Provision for credit losses totaled $6 million, increasing $0.5 million linked quarter.

o

Net loan charge-offs totaled $3.3 million, compared to $5.6 million linked quarter.

o

The annualized loan net charge-off ratio was 0.14% for the quarter and 0.16% for the year.

•

GAAP and operating non-interest income was $23 million.

o

GAAP non-interest income decreased $14 million linked quarter due to a $16 million branch sale gain recorded in the prior quarter.

o

Operating non-interest income increased $1.7 million linked quarter due primarily to higher SBA loan sale gains.

•

Non-interest expense totaled $78 million on a GAAP basis and $71 million on an operating basis.

o

GAAP non-interest expense increased $6 million linked quarter due to merger expenses recorded in the fourth quarter.

o

Operating non-interest expense decreased $1.2 million linked quarter.

•

The effective tax rate was 26% for the quarter and 23% for the year.

o

The tax rate on operating income was 21% for the quarter and 23% for the year.

 

 

Loans. Compared to the linked quarter, total loans increased $173 million, or 2% to $9.4 billion. For the year, total loans increased $489 million, or 5%, excluding $144 million in consumer and mortgage loans sold in the branch sale and other transactions.

 

·

Commercial real estate loans increased $107 million, or 2%, to $4.8 billion compared to the linked quarter.

·

Commercial and industrial loans increased $52 million, or 4%, to $1.5 billion.

·

Residential mortgage loans increased $13 million to $2.7 billion.

	·	Consumer loans increased $1 million to $374 million.
	·	The quarter-end allowance for credit losses on loans was unchanged linked quarter at 1.22% of total loans, and up from 1.17% at year-end 2023.
	·	Non-performing loans to total loans was unchanged at 0.26% for the quarter.
	·	Delinquent and non-performing loans were 0.52% of total loans, the lowest level in nearly two decades.

 

Deposits. Compared to the linked quarter, total deposits increased $798 million to $10.4 billion. Total deposits excluding payroll and brokered deposits increased 3% linked quarter. For the year, total deposits increased $125 million, or 1%, excluding $383 million in deposits sold in the branch sale.

 

·

Non-interest bearing deposits increased linked quarter by $57 million, or 3%,to $2.3 billion.

·

Time deposits increased linked quarter by $57 million, or 2%, to $2.6 billion.

 

Equity. Total shareholders’ equity increased linked quarter by $97 million, or 9%, to $1.2 billion including a successful $100 million common stock issuance. For the year, equity increased by $155 million, or 15%. The ratio of tangible common equity to tangible assets measured 9.4% at period end.

 

Conference Call and Investor Presentation. Berkshire will conduct a conference call/webcast at 9:00 a.m. Eastern time on Thursday, January 30, 2025 to discuss results for the quarter and provide guidance about expected future results. Instructions for listening to the call may be found at the Company’s website at ir.berkshirebank.com. Additional materials relating to the call may also be accessed at this website. The call will be archived at the website and will be available for an extended period of time.

 

 

Forward Looking Statements: This document contains “forward-looking statements” within the meaning of section 27A of the Securities Act of 1933, as amended, and section 21E of the Securities Exchange Act of 1934, as amended. You can identify these statements from the use of the words “may,” “will,” “should,” “could,” “would,” “plan,” “potential,” “estimate,” “project,” “believe,” “intend,” “anticipate,” “expect,” “remain,” “target” and similar expressions. There are many factors that could cause actual results to differ significantly from expectations described in the forward-looking statements. For a discussion of such factors, please see the sections titled “Forward-Looking Statements” and “Risk Factors” in Berkshire’s most recent reports on Forms 10-K and 10-Q filed with the Securities and Exchange Commission and available on the SEC’s website at www.sec.gov. You should not place undue reliance on forward-looking statements, which reflect our expectations only as of the date of this document. Berkshire does not undertake any obligation to update forward-looking statements.

 

###

 

INVESTOR CONTACT

Kevin Conn

Investor Relations

617.641.9206

kaconn@berkshirebank.com

 

MEDIA CONTACT

Gary Levante

Corporate Communications

413.447.1737

glevante@berkshirebank.com

 

 

 

 

SELECTED FINANCIAL HIGHLIGHTS (1)

 

		At or for the Quarters Ended
		Dec. 31,				Sept. 30,				June 30,				March 31,				Dec. 31,
		2024				2024				2024				2024				2023
NOMINAL AND PER SHARE DATA
Net earnings/(loss) per common share, diluted		$	0.46			$	0.88			$	0.57			$	(0.47	)		$	(0.03	)
Operating earnings per common share, diluted (2)(3)			0.60				0.58				0.55				0.49				0.47
Net income/(loss), (thousands)			19,657				37,509				24,025				(20,188	)			(1,445	)
Operating net income, (thousands) (2)(3)			25,982				24,789				23,168				20,934				20,190
Net interest income, (thousands) non FTE			86,855				88,059				88,532				88,140				88,421
Net interest income, FTE (5)			88,798				90,082				90,545				90,146				90,442
Total common shares outstanding, end of period (thousands)			46,424				42,982				42,959				43,415				43,501
Average diluted shares, (thousands)			43,064				42,454				42,508				43,028				43,101
Total book value per common share, end of period			25.15				24.90				23.58				23.26				23.27
Tangible book value per common share, end of period (2)(3)			24.82				24.53				23.18				22.84				22.82
Dividends declared per common share			0.18				0.18				0.18				0.18				0.18
Dividend payout ratio (7)			39.40	%			20.63	%			32.74	%			N/M	%			N/M	%
PERFORMANCE RATIOS (4)
Return on equity			7.18	%			14.29	%			9.49	%			(7.93	)%			(0.60	)%
Operating return on equity (2)(3)			9.49				9.44				9.15				8.23				8.36
Return on tangible common equity (2)(3)			7.59				14.83				9.99				(7.73	)			(0.24	)
Operating return on tangible common equity (2)(3)			9.93				9.91				9.65				8.73				8.90
Return on assets			0.68				1.28				0.82				(0.69	)			(0.05	)
Operating return on assets (2)(3)			0.90				0.85				0.79				0.71				0.68
Net interest margin, FTE (5)			3.14				3.16				3.20				3.15				3.11
Efficiency ratio (3)			62.43				63.74				63.40				66.26				67.77
FINANCIAL DATA (in millions, end of period)
Total assets		$	12,273			$	11,605			$	12,219			$	12,147			$	12,431
Total earning assets			11,523				10,922				11,510				11,430				11,705
Total loans			9,385				9,212				9,229				9,086				9,040
Total funding liabilities			10,813				10,285				10,907				10,826				11,140
Total deposits			10,375				9,577				9,621				9,883				10,633
Loans/deposits (%)			90	%			96	%			96	%			92	%			85	%
Total accumulated other comprehensive (loss) net of tax, end of period		$	(106	)		$	(89	)		$	(115	)		$	(114	)		$	(143	)
Total shareholders' equity			1,167				1,070				1,013				1,010				1,012
ASSET QUALITY
Allowance for credit losses, (millions)		$	115			$	112			$	112			$	107			$	105
Net charge-offs, (millions)			(3	)			(6	)			(2	)			(4	)			(4	)
Net charge-offs (QTD annualized)/average loans			0.14	%			0.24	%			0.07	%			0.18	%			0.20	%
Provision (benefit)/expense, (millions)		$	6			$	6			$	6			$	6			$	7
Non-performing assets, (millions)			27				27				24				24				24
Non-performing loans/total loans			0.26	%			0.26	%			0.23	%			0.24	%			0.24	%
Allowance for credit losses/non-performing loans			469				467				525				500				492
Allowance for credit losses/total loans			1.22				1.22				1.22				1.18				1.17
CAPITAL RATIOS
Risk weighted assets, (millions)(6)		$	9,747			$	9,651			$	9,604			$	9,615			$	9,552
Common equity Tier 1 capital to risk weighted assets (6)			13.0	%			11.9	%			11.6	%			11.6	%			12.0	%
Tier 1 capital leverage ratio (6)			11.0				9.9				9.6				9.5				9.6
Tangible common shareholders' equity/tangible assets (3)			9.4				9.1				8.2				8.2				8.0

 

(1)	All financial tables presented are unaudited.
(2)	Reconciliations of non-GAAP financial measures, including all references to operating and tangible amounts, appear on pages 13 and 14.
(3)	Non-GAAP financial measure. Operating measurements are non-GAAP financial measures that are adjusted to exclude net non-operating charges primarily related to acquisitions and restructuring activities. See pages 13 and 14 for reconciliations of non-GAAP financial measures.
(4)	All performance ratios are annualized and are based on average balance sheet amounts, where applicable.
(5)	Fully taxable equivalent considers the impact of tax advantaged investment securities and loans.
(6)	Presented as projected for December 31, 2024 and actual for the remaining periods.
(7)	Dividend payout ratio is based on dividends declared.

 

 

 

CONSOLIDATED BALANCE SHEETS

 

		December 31,				September 30,				December 31,
(in thousands)		2024				2024				2023
Assets
Cash and due from banks		$	182,776			$	134,056			$	148,148
Short-term investments			945,633				435,911				1,055,096
Total cash and cash equivalents			1,128,409				569,967				1,203,244
Trading securities, at fair value			5,258				5,560				6,142
Equity securities, at fair value			655				13,278				13,029
Securities available for sale, at fair value			655,723				661,740				1,022,285
Securities held to maturity, at amortized cost			507,658				512,277				543,351
Federal Home Loan Bank stock			19,565				30,685				22,689
Total securities			1,188,859				1,223,540				1,607,496
Less: Allowance for credit losses on investment securities			(64	)			(65	)			(68	)
Net securities			1,188,795				1,223,475				1,607,428
Loans held for sale			3,076				50,634				2,237
Commercial real estate loans			4,848,824				4,741,689				4,527,012
Commercial and industrial loans			1,461,341				1,409,538				1,352,834
Residential mortgages			2,701,227				2,688,709				2,672,677
Consumer loans			373,602				372,386				487,163
Total loans			9,384,994				9,212,322				9,039,686
Less: Allowance for credit losses on loans			(114,700	)			(112,047	)			(105,357	)
Net loans			9,270,294				9,100,275				8,934,329
Premises and equipment, net			56,609				54,667				68,915
Other intangible assets			15,064				16,192				19,664
Other assets			604,231				582,422				584,066
Assets held for sale			6,930				6,930				10,938
Total assets		$	12,273,408			$	11,604,562			$	12,430,821
Liabilities and shareholders' equity
Non-interest bearing deposits		$	2,324,879			$	2,267,595			$	2,469,164
NOW and other deposits			841,406				748,737				858,644
Money market deposits			3,610,521				3,042,712				3,565,516
Savings deposits			1,021,716				998,549				1,053,810
Time deposits			2,576,682				2,519,896				2,686,250
Total deposits			10,375,204				9,577,489				10,633,384
Federal Home Loan Bank advances			316,482				585,542				385,223
Subordinated borrowings			121,612				121,549				121,363
Total borrowings			438,094				707,091				506,586
Other liabilities			292,686				249,531				278,630
Total liabilities			11,105,984				10,534,111				11,418,600
Common shareholders' equity			1,167,424				1,070,451				1,012,221
Total shareholders' equity			1,167,424				1,070,451				1,012,221
Total liabilities and shareholders' equity		$	12,273,408			$	11,604,562			$	12,430,821

 

 

 

 

CONSOLIDATED STATEMENTS OF OPERATIONS

 

		Three Months Ended								Years Ended
		December 31,								December 31,
(in thousands, except per share data)		2024				2023				2024				2023
Interest income		$	150,555			$	150,537			$	613,938			$	576,299
Interest expense			63,700				62,116				262,352				207,252
Net interest income, non FTE			86,855				88,421				351,586				369,047
Non-interest income
Deposit related fees			8,237				8,481				33,759				34,155
Loan related fees			3,039				2,058				11,280				10,595
Gain on SBA loans			4,635				2,382				12,648				10,334
Wealth management fees			2,658				2,394				10,840				10,197
Fair value adjustments on securities			(352	)			768				7				513
Other			4,943				591				13,576				2,045
Total non-interest income excluding gains and losses			23,160				16,674				82,110				67,839
Gain on sale of business operations and assets, net			193				-				16,241				-
(Loss) on sale of securities			(28	)			(25,057	)			(49,937	)			(25,057	)
Total non-interest income			23,325				(8,383	)			48,414				42,782
Total net revenue			110,180				80,038				400,000				411,829
Provision expense for credit losses			6,000				7,000				23,999				31,999
Non-interest expense
Compensation and benefits			38,929				40,095				160,453				159,281
Occupancy and equipment			7,334				8,553				31,469				35,718
Technology			10,241				11,326				40,395				41,878
Professional services			2,765				3,417				10,307				11,643
Regulatory expenses			1,851				1,854				7,395				7,019
Amortization of intangible assets			1,128				1,205				4,601				4,820
Marketing			2,013				1,107				4,522				5,377
Merger, restructuring and other non-operating expenses			6,557				3,669				9,493				6,261
Other expenses			6,757				7,766				27,851				29,511
Total non-interest expense			77,575				78,992				296,486				301,508
Total non-interest expense excluding non-operating expenses			71,018				75,323				286,993				295,247
Income before income taxes		$	26,605			$	(5,954	)		$	79,515			$	78,322
Income tax expense			6,948				(4,509	)			18,512				8,724
Net income		$	19,657			$	(1,445	)		$	61,003			$	69,598
Basic earnings per common share		$	0.46			$	(0.03	)		$	1.44			$	1.61
Diluted earnings per common share		$	0.46			$	(0.03	)		$	1.43			$	1.60
Weighted average shares outstanding:
Basic			42,661				42,852				42,508				43,288
Diluted			43,064				43,101				42,761				43,504

 

 

 

 

CONSOLIDATED STATEMENTS OF OPERATIONS (5 Quarter Trend)

 

		Dec. 31,				Sept. 30,				June 30,				March 31,				Dec. 31,
(in thousands, except per share data)		2024				2024				2024				2024				2023
Interest income		$	150,555			$	157,268			$	154,109			$	152,006			$	150,537
Interest expense			63,700				69,209				65,577				63,866				62,116
Net interest income, non FTE			86,855				88,059				88,532				88,140				88,421
Non-interest income
Deposit related fees			8,237				8,656				8,561				8,305				8,481
Loan related fees			3,039				3,214				2,364				2,663				2,058
Gain on SBA loans			4,635				3,020				3,294				1,699				2,382
Wealth management fees			2,658				2,685				2,613				2,884				2,394
Fair value adjustments on securities			(352	)			516				(42	)			(115	)			768
Other			4,943				3,416				3,343				1,874				591
Total non-interest income excluding gains and losses			23,160				21,507				20,133				17,310				16,674
Gain on sale of business operations and assets, net			193				16,048				-				-				-
Loss on sale of securities			(28	)			-				-				(49,909	)			(25,057	)
Total non-interest income			23,325				37,555				20,133				(32,599	)			(8,383	)
Total net revenue			110,180				125,614				108,665				55,541				80,038
Provision expense for credit losses			6,000				5,500				6,499				6,000				7,000
Non-interest expense
Compensation and benefits			38,929				40,663				40,126				40,735				40,095
Occupancy and equipment			7,334				7,373				8,064				8,698				8,553
Technology			10,241				10,014				10,236				9,904				11,326
Professional services			2,765				2,109				2,757				2,676				3,417
Regulatory expenses			1,851				1,851				1,848				1,845				1,854
Amortization of intangible assets			1,128				1,128				1,140				1,205				1,205
Marketing			2,013				861				532				1,116				1,107
Merger, restructuring and other non-operating expenses			6,557				(297	)			(384	)			3,617				3,669
Other expenses			6,757				8,258				6,612				6,224				7,766
Total non-interest expense			77,575				71,960				70,931				76,020				78,992
Total non-interest expense excluding non-operating expenses			71,018				72,257				71,315				72,403				75,323
Income/(loss) before income taxes		$	26,605			$	48,154			$	31,235			$	(26,479	)		$	(5,954	)
Income tax expense/(benefit)			6,948				10,645				7,210				(6,291	)			(4,509	)
Net income/(loss)		$	19,657			$	37,509			$	24,025			$	(20,188	)		$	(1,445	)
Diluted earnings/(loss) per common share		$	0.46			$	0.88			$	0.57			$	(0.47	)		$	(0.03	)
Weighted average shares outstanding:
Basic			42,661				42,170				42,437				42,777				42,852
Diluted			43,064				42,454				42,508				43,028				43,101

 

 

 

 

 

AVERAGE BALANCES AND AVERAGE YIELDS AND COSTS

 

		Quarters Ended
		December 31, 2024										September 30, 2024									December 31, 2023
(in millions)		Average Balance			Interest (1)			Average Yield/Rate				Average Balance			Interest (1)			Average Yield/Rate			Average Balance			Interest (1)				Average Yield/Rate
Assets
Commercial real estate		$	4,772		$	77			6.32	%		$	4,717		$	79		6.54	%		$	4,469		$	74			6.45	%
Commercial and industrial loans			1,435			27			7.24				1,380			27		7.79				1,367			26			7.60
Residential mortgages			2,690			29			4.32				2,712			30		4.31				2,656			27			4.06
Consumer loans			374			6			6.29				424			8		7.43				498			9			7.31
Total loans			9,271			139			5.88				9,233			144		6.11				8,990			136			5.97
Securities (2)			1,347			9			2.66				1,340			8		2.49				2,080			12			2.40
Short-term investments and loans held for sale			466			5			4.25				563			7		4.98				350			4			4.22
New York branch loans held for sale (3)			-			-			-				31			-		5.44				-			-			-
Total earning assets			11,084			153			5.42				11,167			159		5.62				11,420			152			5.26
Goodwill and other intangible assets			15										17									20
Other assets			497										511									422
Total assets		$	11,596									$	11,695								$	11,862
Liabilities and shareholders' equity
Non-interest-bearing demand deposits		$	2,293		$	-			-	%		$	2,250		$	-		-	%		$	2,488		$	-			-	%
NOW and other			764			3			1.44				743			3		1.54				833			3			1.38
Money market			3,046			23			3.02				2,935			25		3.35				2,995			23			3.08
Savings			1,003			3			1.09				1,002			3		1.17				1,062			2			0.90
Time			2,553			27			4.22				2,430			26		4.31				2,558			25			3.77
Total deposits			9,659			56			2.30				9,360			57		2.42				9,936			53			2.11
Borrowings (4)			602			8			5.20				782			11		5.44				668			9			5.45
New York branch non-interest-bearing deposits held for sale (3)			-			-			-				51			-		-				-			-			-
New York branch interest-bearing deposits held for sale (3)			-			-			-				207			1		2.87				-			-			-
Total funding liabilities			10,261			64			2.47				10,400			69		2.64				10,604			62			2.32
Other liabilities			240										245									292
Total liabilities			10,501										10,645									10,896
Common shareholders' equity (5)			1,095										1,050									966
Total shareholders' equity			1,095										1,050									966
Total liabilities and shareholders' equity		$	11,596									$	11,695								$	11,862
Net interest margin, FTE									3.14									3.16										3.11
Supplementary data
Net Interest Income, non FTE			86.855										88.059									88.421
FTE income adjustment			1.943										2.023									2.021
Net Interest Income, FTE			88.798										90.082									90.442

 

 

(1)

Interest income and expense presented on a fully taxable equivalent basis.

(2)

Average balances for securities available-for-sale are based on amortized cost.

(3)

New York branch loans and deposits moved to held for sale on March 4, 2024.

(4)

Average balances for borrowings includes the financing lease obligation which is presented under other liabilities on the consolidated balance sheet.

(5)

Unrealized gains and losses, net of tax, are included in average equity. Prior period balances and financial metrics have been updated to reflect the current presentation.

 

 

 

ASSET QUALITY ANALYSIS

 

		At or for the Quarters Ended
		Dec. 31,				Sept. 30,				June 30,				March 31,				Dec. 31,
(in thousands)		2024				2024				2024				2024				2023
NON-PERFORMING ASSETS
Commercial real estate		$	10,393			$	10,270			$	5,976			$	4,762			$	4,453
Commercial and industrial loans			9,156				8,227				8,489				9,174				8,712
Residential mortgages			3,830				4,348				5,491				5,992				6,404
Consumer loans			1,068				1,124				1,392				1,526				1,838
Total non-performing loans			24,447				23,969				21,348				21,454				21,407
Repossessed assets			2,280				2,563				2,549				2,689				2,601
Total non-performing assets		$	26,727			$	26,532			$	23,897			$	24,143			$	24,008
Total non-performing loans/total loans			0.26	%			0.26	%			0.23	%			0.24	%			0.24	%
Total non-performing assets/total assets			0.22	%			0.23	%			0.20	%			0.20	%			0.19	%
PROVISION AND ALLOWANCE FOR CREDIT LOSSES ON LOANS
Balance at beginning of period		$	112,047			$	112,167			$	107,331			$	105,357			$	102,792
Charged-off loans			(4,553	)			(7,091	)			(3,246	)			(5,636	)			(6,891	)
Recoveries on charged-off loans			1,206				1,471				1,583				1,610				2,456
Net loans charged-off			(3,347	)			(5,620	)			(1,663	)			(4,026	)			(4,435	)
Provision (benefit)/expense for loan credit losses			6,000				5,500				6,499				6,000				7,000
Balance at end of period		$	114,700			$	112,047			$	112,167			$	107,331			$	105,357
Allowance for credit losses/total loans			1.22	%			1.22	%			1.22	%			1.18	%			1.17	%
Allowance for credit losses/non-performing loans			469	%			467	%			525	%			500	%			492	%
NET LOAN CHARGE-OFFS
Commercial real estate		$	(121	)		$	(999	)		$	22			$	292			$	316
Commercial and industrial loans			(2,309	)			(1,009	)			(711	)			(1,772	)			(2,309	)
Residential mortgages			552				273				316				98				55
Home equity			1				3				8				193				83
Other consumer loans			(1,470	)			(3,888	)			(1,298	)			(2,837	)			(2,580	)
Total, net		$	(3,347	)		$	(5,620	)		$	(1,663	)		$	(4,026	)		$	(4,435	)
Net charge-offs (QTD annualized)/average loans			0.14	%			0.24	%			0.07	%			0.18	%			0.20	%
Net charge-offs (YTD annualized)/average loans			0.16	%			0.16	%			0.13	%			0.18	%			0.26	%

 

DELINQUENT AND NON-PERFORMING LOANS		Balance			Percent of Total Loans			Balance			Percent of Total Loans			Balance				Percent of Total Loans			Balance			Percent of Total Loans			Balance			Percent of Total Loans
30-89 Days delinquent		$	17,591		0.19	%		$	18,526		0.20	%		$	18,494			0.20	%		$	27,682		0.30	%		$	22,140		0.24	%
90+ Days delinquent and still accruing			6,417		0.07	%			6,280		0.07	%			11,672			0.13	%			5,882		0.06	%			5,537		0.06	%
Total accruing delinquent loans			24,008		0.26	%			24,806		0.27	%			30,166			0.33	%			33,564		0.36	%			27,677		0.30	%
Non-performing loans			24,447		0.26	%			23,969		0.26	%			21,348			0.23	%			21,454		0.24	%			21,407		0.24	%
Total delinquent and non-performing loans		$	48,455		0.52	%		$	48,775		0.53	%		$	51,514			0.56	%		$	55,018		0.60	%		$	49,084		0.54	%

 

 

NON-GAAP FINANCIAL MEASURES

 

This document contains certain non-GAAP financial measures in addition to results presented in accordance with Generally Accepted Accounting Principles (“GAAP”). These non-GAAP measures are intended to provide the reader with additional supplemental perspectives on operating results, performance trends, and financial condition. Non-GAAP financial measures are not a substitute for GAAP measures; they should be read and used in conjunction with the Company’s GAAP financial information. A reconciliation of non-GAAP financial measures to GAAP measures is provided below. In all cases, it should be understood that non-GAAP measures do not depict amounts that accrue directly to the benefit of shareholders. An item which management excludes when computing non-GAAP operating earnings can be of substantial importance to the Company’s results for any particular quarter or year. The Company’s non-GAAP operating earnings information set forth is not necessarily comparable to non- GAAP information which may be presented by other companies. Each non-GAAP measure used by the Company in this report as supplemental financial data should be considered in conjunction with the Company’s GAAP financial information.

 

The Company utilizes the non-GAAP measure of operating earnings in evaluating operating trends, including components for operating revenue and expense. These measures exclude amounts which the Company views as unrelated to its normalized operations. These items primarily include restructuring costs. Restructuring costs generally consist of costs and losses associated with the disposition of assets and liabilities and lease terminations, including costs related to branch consolidations.

 

The Company also calculates operating earnings per share based on its measure of operating earnings and diluted common shares. The Company views these amounts as important to understanding its operating trends, particularly due to the impact of accounting standards related to merger and acquisition activity. Analysts also rely on these measures in estimating and evaluating the Company’s performance. Adjustments in 2024 were primarily related to the pending merger, branch sales and consolidations, and loss on sale of securities. Adjustments in 2023 were primarily related to branch consolidations, severance charges related to a workforce reduction, and loss on sale of AFS securities.

 

Management believes that the computation of non-GAAP operating earnings and operating earnings per share may facilitate the comparison of the Company to other companies in the financial services industry. The Company also adjusts certain equity related measures to exclude intangible assets due to the importance of these measures to the investment community.

 

 

 

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES AND SUPPLEMENTARY DATA

 

				At or for the Quarters Ended
				Dec. 31,				Sept. 30,				June 30,				March 31,				Dec. 31,
(in thousands)				2024				2024				2024				2024				2023
Total non-interest income				$	23,325			$	37,555			$	20,133			$	(32,599	)		$	(8,383	)
Adj: Net (gains) on sale of business operations and assets					(193	)			(16,048	)			-				-				-
Adj: Loss on sale of securities					28				-				-				49,909				25,057
Total operating non-interest income (1)				$	23,160			$	21,507			$	20,133			$	17,310			$	16,674
Total revenue		(A)		$	110,180			$	125,614			$	108,665			$	55,541			$	80,038
Adj: Net (gains) on sale of business operations and assets					(193	)			(16,048	)			-				-				-
Adj: Loss on sale of securities					28				-				-				49,909				25,057
Total operating revenue (1)		(B)		$	110,015			$	109,566			$	108,665			$	105,450			$	105,095
Total non-interest expense		(C)		$	77,575			$	71,960			$	70,931			$	76,020			$	78,992
Adj: Merger, restructuring and other non-operating expenses					(6,557	)			297				384				(3,617	)			(3,669	)
Operating non-interest expense (1)		(D)		$	71,018			$	72,257			$	71,315			$	72,403			$	75,323
Pre-tax, pre-provision net revenue (PPNR)		(A-C)		$	32,605			$	53,654			$	37,734			$	(20,479	)		$	1,046
Operating pre-tax, pre-provision net revenue (PPNR) (1)		(B-D)			38,997				37,309				37,350				33,047				29,772
Net income/(loss)				$	19,657			$	37,509			$	24,025			$	(20,188	)		$	(1,445	)
Adj: Net (gains) on sale of business operations and assets					(193	)			(16,048	)			-				-				-
Adj: Loss on sale of securities					28				-				-				49,909				25,057
Adj: Merger, restructuring expense and other non-operating expenses					6,557				(297	)			(384	)			3,617				3,669
Adj: Income taxes (expense)/benefit					(67	)			3,625				(473	)			(12,404	)			(7,091	)
Total operating income (1)		(E)		$	25,982			$	24,789			$	23,168			$	20,934			$	20,190
(in millions, except per share data)
Total average assets		(F)		$	11,596			$	11,695			$	11,692			$	11,755			$	11,862
Total average shareholders' equity		(G)			1,095				1,050				1,013				1,018				966
Total average tangible shareholders' equity (1)		(I)			1,080				1,034				995				999				946
Total accumulated other comprehensive (loss) net of tax, end of period					(106	)			(89	)			(115	)			(114	)			(143	)
Total tangible shareholders' equity, end of period (1)		(K)			1,152				1,054				996				991				993
Total tangible assets, end of period (1)		(L)			12,258				11,588				12,202				12,128				12,411
Total common shares outstanding, end of period (thousands)		(M)			46,424				42,982				42,959				43,415				43,501
Average diluted shares outstanding (thousands)		(N)			43,064				42,454				42,508				43,028				43,101
Earnings/(loss) per common share, diluted (1)				$	0.46			$	0.88			$	0.57			$	(0.47	)		$	(0.03	)
Operating earnings per common share, diluted (1)		(E/N)			0.60				0.58				0.55				0.49				0.47
Tangible book value per common share, end of period (1)		(K/M)			24.82				24.53				23.18				22.84				22.82
Total tangible shareholders' equity/total tangible assets (1)		(K/L)			9.40				9.10				8.16				8.17				8.00
Performance ratios (2)
Return on equity					7.18	%			14.29	%			9.49	%			(7.93	)%			(0.60	)%
Operating return on equity (1)		(E/G)			9.49				9.44				9.15				8.23				8.36
Return on tangible common equity (1)(3)					7.59				14.83				9.99				(7.73	)			(0.24	)
Operating return on tangible common equity (1)(3)		(E+Q)/(I)			9.93				9.91				9.65				8.73				8.90
Return on assets					0.68				1.28				0.82				(0.69	)			(0.05	)
Operating return on assets (1)		(E/F)			0.90				0.85				0.79				0.71				0.68
Efficiency ratio (1)(6)		(D-Q)/(B+O+R)			62.43				63.74				63.40				66.26				67.77
Supplementary data (in thousands)
Tax benefit on tax-credit investments (4)		(O)			N/M				N/M				N/M				N/M			$	2,252
Non-interest income tax-credit investments amortization (5)		(P)			N/M				N/M				N/M				N/M				(2,060	)
Net income on tax-credit investments		(O+P)			N/M				N/M				N/M				N/M				193
Effective tax rate					26.1	%			22.1	%			23.1	%			23.8	%			75.7	%
Intangible amortization		(Q)		$	1,128			$	1,128			$	1,140			$	1,205			$	1,205
Fully taxable equivalent income adjustment		(R)			1,943				2,023				2,013				2,006				2,021

 

 

(1)

Non-GAAP financial measure.

(2)

Ratios are annualized and based on average balance sheet amounts, where applicable. Quarterly data may not sum to year-to-date data due to rounding.

(3)

Amortization of intangible assets is adjusted assuming a 27% marginal tax rate.

(4)

The tax benefit is the direct reduction to the income tax provision due to tax credit investments.

(5)

The non-interest income amortization is the reduction to the tax-advantaged investments and are incurred as the tax credits are generated.

(6)

As of January 1, 2024, the Company elected the proportional amortization method for certain tax credits eliminating the need to adjust the efficiency ratio for tax credit impacts. Excluding the impact of tax credits in 2023, the efficiency ratio for the quarter ending December 31, 2023 was 69.19%.

 

 

 

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES AND SUPPLEMENTARY DATA- UNAUDITED

 

					At or for the Years Ended
					December 31,				December 31,
(in thousands)					2024				2023
Total non-interest income					$	48,414			$	42,782
Adj: Net (gains) on sale of business operations and assets						(16,241	)			-
Adj: Loss on sale of securities						49,937				25,057
Total operating non-interest income (1)					$	82,110			$	67,839
Total revenue		(A)			$	400,000			$	411,829
Adj: Net (gains) on sale of business operations and assets						(16,241	)			-
Adj: Loss on sale of securities						49,937				25,057
Total operating revenue (1)		(B)			$	433,696			$	436,886
Total non-interest expense		(C)			$	296,486			$	301,508
Less: Merger, restructuring and other non-operating expenses						(9,493	)			(6,261	)
Operating non-interest expense (1)		(D)			$	286,993			$	295,247
Pre-tax, pre-provision net revenue (PPNR)		(A-C)			$	103,514			$	110,321
Operating pre-tax, pre-provision net revenue (PPNR) (1)		(B-D)				146,703				141,639
Net income					$	61,003			$	69,598
Adj: Net (gains) on sale of business operations and assets						(16,241	)			-
Adj: Loss on sale of securities						49,937				25,057
Adj: Merger, restructuring expense and other non-operating expenses						9,493				6,261
Adj: Income taxes (expense)						(9,319	)			(7,723	)
Total operating income (1)		(E)			$	94,873			$	93,193
(in millions, except per share data)
Total average assets		(F)			$	11,683			$	11,838
Total average shareholders' equity		(G)				1,044				984
Total average tangible shareholders' equity (1)		(I)				1,027				962
Total accumulated other comprehensive (loss) net of tax, end of period						(106	)			(143	)
Total tangible shareholders' equity, end of period (1)		(K)				1,152				993
Total tangible assets, end of period (1)		(L)				12,258				12,411
Total common shares outstanding, end of period (thousands)		(M)				46,424				43,501
Average diluted shares outstanding (thousands)		(N)				42,761				43,504
Earnings per common share, diluted (1)					$	1.43			$	1.60
Operating earnings per common share, diluted (1)		(E/N)				2.22				2.14
Tangible book value per common share, end of period (1)		(K/M)				24.82				22.82
Total tangible shareholders' equity/total tangible assets (1)		(K/L)				9.40				8.00
Performance ratios (2)
Return on equity						5.84	%			7.07	%
Operating return on equity (1)		(E/G)				9.09				9.47
Return on tangible common equity (1)(3)						6.27				7.60
Operating return on tangible common equity (1)(3)		(E+Q)/(I)				9.56				10.05
Return on assets						0.52				0.59
Operating return on assets (1)		(E/F)				0.81				0.79
Efficiency ratio (1)(6)		(D-Q)/(B+O+R)				63.94				63.88
Net interest margin, FTE						3.16				3.27
Supplementary data (in thousands)
Tax benefit on tax-credit investments (4)		(O)				N/M			$	9,863
Non-interest income charge on tax-credit investments (5)		(P)				N/M				(8,018	)
Net income on tax-credit investments		(O+P)				N/M				1,845
Intangible amortization		(Q)			$	4,601			$	4,820
Fully taxable equivalent income adjustment		(R)				7,985				7,870

 

 

(1)

Non-GAAP financial measure.

(2)

Ratios are annualized and based on average balance sheet amounts, where applicable. Quarterly data may not sum to year-to-date data due to rounding.

(3)

Amortization of intangible assets is adjusted assuming a 27% marginal tax rate.

(4)

The tax benefit is the direct reduction to the income tax provision due to tax credit investments.

(5)

The non-interest income amortization is the reduction to the tax-advantaged investments and are incurred as the tax credits are generated.

(6)

As of January 1, 2024, the Company elected the proportional amortization method for certain tax credits eliminating the need to adjust the efficiency ratio for tax credit impacts. Excluding the impact of tax credits in 2023, the efficiency ratio for the year ending December 31, 2023 was 65.30%.

 

 

v3.24.4

Cover	Jan. 30, 2025
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Jan. 30, 2025
Entity File Number	001-15781
Entity Registrant Name	BERKSHIRE HILLS BANCORP, INC.
Entity Central Index Key	0001108134
Entity Tax Identification Number	04-3510455
Entity Incorporation, State or Country Code	DE
Entity Address, Address Line One	60 State Street
Entity Address, City or Town	Boston
Entity Address, State or Province	MA
Entity Address, Postal Zip Code	02109
City Area Code	800
Local Phone Number	773-5601
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common stock, par value $0.01 per share
Trading Symbol	BHLB
Security Exchange Name	NYSE
Entity Emerging Growth Company	false

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