$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:

(PRNewsfoto/Berkshire Hills Bancorp, Inc.)

($ 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.



1

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.








2

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.

3

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.

4

 

INVESTOR CONTACT
Kevin Conn
Investor Relations
617.641.9206
kaconn@berkshirebank.com 

MEDIA CONTACT
Gary Levante
Corporate Communications
413.447.1737
glevante@berkshirebank.com

5

 

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. 

6

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

7

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








8

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

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
























9

BERKSHIRE HILLS BANCORP, INC.

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.

10

BERKSHIRE HILLS BANCORP, INC.

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 %

11

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.

12

BERKSHIRE HILLS BANCORP, INC.

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%.

13

BERKSHIRE HILLS BANCORP, INC.

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%.

14

 

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SOURCE Berkshire Hills Bancorp, Inc.

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