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PR Newswire | 30. Januar 2025, 07:30

Berkshire Hills Reports Strong Fourth Quarter Operating Results

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Berkshire Hills Bancorp 21,70 €

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BOSTON, Jan. 30, 2025

$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, Jan. 30, 2025 /PRNewswire/ -- 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%.

The earning asset yield decreased 20 basis points.

The loan yield decreased 23 basis points.

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.

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

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

GAAP non-interest expense increased $6 million linked quarter due to merger expenses recorded in the fourth quarter.
Operating non-interest expense decreased $1.2 million linked quarter.

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

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

BERKSHIRE HILLS BANCORP, INC.
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.

BERKSHIRE HILLS BANCORP, INC.
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

BERKSHIRE HILLS BANCORP, INC.
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

BERKSHIRE HILLS BANCORP, INC.

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

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

Marketing

2,013

861

532

1,116

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Berkshire Hills Reports Strong Fourth Quarter Operating Results

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