Announces $362 Million Securities Sale
- First quarter loss of $20 million, ($0.47) per share
- Operating income of $21 million, $0.49 per share
- Securities sale of $362 million resulted in a $49.9 million net non-operating loss ($0.89 per share after-tax)
- Net loan charge-offs were 18 basis points annualized
- TCE ratio of 8.2% and CET1 ratio of 11.6%; tangible book value per share of $22.84
BOSTON, April 18, 2024 /PRNewswire/ -- Berkshire Hills Bancorp, Inc. (NYSE:BHLB) today reported results for the first quarter of 2024. These results along with comparison periods are summarized below:
($ in millions, except per share data) | Three Months Ended | ||||||
Mar. 31, 2024 | Dec. 31, 2023 | Mar. 31, 2023 | |||||
Net (loss) income | $ | ($20.2) | $ | (1.4) | $ | 27.6 | |
Per share | (0.47) | (0.03) | 0.63 | ||||
Operating earnings1 | 20.9 | 20.2 | 27.6 | ||||
Per share | 0.49 | 0.47 | 0.63 | ||||
Net interest income, non FTE | $ | 88.1 | $ | 88.4 | $ | 97.5 | |
Net interest income, FTE | 90.1 | 90.4 | 99.4 | ||||
Net interest margin, FTE | 3.15 % | 3.11 % | 3.58 % | ||||
Non-interest income | (32.6) | (8.4) | 16.6 | ||||
Operating non-interest income1 | 17.3 | 16.7 | 16.6 | ||||
Non-interest expense | $ | 76.0 | $ | 79.0 | $ | 72.0 | |
Operating non-interest expense1 | 72.4 | 75.3 | 72.0 | ||||
Efficiency ratio1 | 66.3 % | 67.8 % | 59.5 % | ||||
Average balances2 | |||||||
Loans | $ | 9,059 | $ | 8,990 | $ | 8,515 | |
Deposits | 9,978 | 9,936 | 9,676 | ||||
Period-end balances2 | |||||||
Loans | 9,144 | 9,040 | 8,682 | ||||
Deposits | 10,368 | 10,633 | 10,068 | ||||
1. See non-GAAP financial measures and reconciliation to GAAP measures beginning on page 12. 1Q24 operating non-interest 2. Loans and deposits include balances held for sale in branch transaction of $18 million and $149 million respectively (average), | |||||||
Berkshire CEO Nitin Mhatre stated, "We had a solid start to the year, increasing operating earnings, growing loans, and maintaining solid asset quality and capital strength. In March, we announced the planned sale of ten branches which will enhance efficiency and profitability, while strengthening our focus in core New York markets. In anticipation of completing the branch sale in the third quarter, we sold lower yielding investment securities, resulting in a non-operating charge. During the quarter, we announced key hires bolstering Berkshire's commercial and private banking teams. Newsweek magazine also ranked Berkshire as one of the top 10 most trusted banks in America, recognizing our commitment to integrity, respect, and transparency as a trusted client advisor and financial partner."
CFO David Rosato added, "First quarter operating earnings were $20.9 million, increasing $744 thousand linked quarter. We sold $362 million in securities, resulting in a $49.9 million non-operating charge ($38.3 million after-tax, or $0.89 per share). Net interest margin of 3.15 percent increased 4 basis points including the benefit of the 4Q23 securities sales. Operating non-interest income increased $636 thousand linked quarter. Reflecting our focus on expense management, non-interest expense decreased $3.0 million linked quarter on a GAAP basis and $2.9 million on an operating basis. Non-operating expenses of $3.6 million ($2.8 million after-tax, or $0.07 per share) were related to the branch sale. Total shareholders' equity was not impacted by the securities sale and the common equity Tier 1 ratio remained a healthy 11.6 percent at period-end."
As of and For the Three Months Ended | |||||||
Mar. 31, 2024 | Dec. 31, 2023 | Mar. 31, 2023 | |||||
Asset Quality | |||||||
Net loan charge-offs to average loans | 0.18 % | 0.20 % | 0.32 % | ||||
Non-performing loans to total loans | 0.24 % | 0.24 % | 0.31 % | ||||
Returns | |||||||
Return on average assets | (0.69) % | (0.05) % | 0.96 % | ||||
Operating return on average assets1 | 0.71 % | 0.68 % | 0.95 % | ||||
Return on tangible common equity1 | (7.73) % | (0.24) % | 11.96 % | ||||
Operating return on tangible common equity1 | 8.73 % | 8.90 % | 11.96 % | ||||
Capital Ratios2 | |||||||
Tangible common equity/tangible assets1 | 8.2 % | 8.0 % | 7.9 % | ||||
Tier 1 leverage | 9.5 % | 9.6 % | 9.9 % | ||||
Common equity Tier 1 | 11.6 % | 12.0 % | 12.1 % | ||||
Tier 1 risk-based | 11.8 % | 12.3 % | 12.4 % | ||||
Total risk-based | 14.0 % | 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 2. Presented as estimated for March 31, 2024 and actual for the remaining periods. | |||||||
Berkshire Hills Bancorp, Inc. ((BHLB) is the parent company of Berkshire Bank, a relationship-driven, community-focused bank with $12.1 billion in assets and 96 financial centers in New England and New York. Berkshire is headquartered in Boston and offers commercial, retail, wealth, and private banking solutions.
1Q 2024 Financial Highlights
Income Statement
- GAAP loss of $20.2 million, or $(0.47) per share.
- Operating earnings totaled $20.9 million, or $0.49 per share.
- Net interest income totaled $88.1 million in 1Q24 compared to $88.4 million in 4Q23.
- One less calendar day in 1Q24 (1% decrease in net interest income).
- Net interest margin increased 4 basis points from 4Q23 to 3.15% reflecting the benefit of securities sales and reduction of higher cost borrowings.
- The earning asset yield increased 18 basis points.
- The loan yield increased 7 basis points.
- The cost of funds increased 13 basis points.
- The cost of deposits increased 18 basis points.
- The earning asset yield increased 18 basis points.
- Provision for credit losses on loans totaled $6.0 million.
- Allowance for credit losses on loans increased $2.0 million.
- Net loan charge-offs totaled $4.0 million.
- Net annualized loan charge-off ratio of 0.18%, down sequentially for last five quarters.
- Operating non-interest income totaled $17.3 million in 1Q24 excluding the $49.9 million net loss on sale of AFS securities, compared to $16.7 million in 4Q23 excluding the $25.1 million loss on sale of AFS securities.
- The tax credit amortization charge included in other non-interest income decreased $1.9 million linked quarter due to a change in accounting method (with offsetting increase in income tax expense).
- Deposit related fee revenue decreased $176 thousand.
- Loan related fees increased $605 thousand primarily due to higher swap revenue.
- Gain on SBA loan sales decreased $683 thousand.
- Wealth management revenue increased $490 thousand. At March 31, 2024, wealth assets under management were $1.5 billion.
- Other non-interest income increased $1.3 million.
- Non-interest expense in 1Q24 totaled $76.0 million on a GAAP basis and $72.4 million on an operating basis. These measures were $79.0 million and $75.3 million in 4Q23.
- Non-operating expense totaled $3.6 million in 1Q24, and was related to the pending branch sale.
- Compensation and benefits expense increased $640 thousand.
- Occupancy and equipment expense increased $145 thousand.
- Technology and communications expense decreased $1.4 million.
- Professional services expense decreased $741 thousand.
- Other non-interest expense decreased $1.5 million.
- The efficiency ratio was 66.3% for 1Q24 compared to 67.8% for 4Q23.
- Income tax expense was a benefit of $6.3 million in 1Q24 and the effective tax rate was 23.8%.
Loans
- Commercial real estate loans totaled $4.6 billion at March 31, 2024, a $67 million increase from December 31, 2023.
- Average commercial real estate loans totaled $4.6 billion in 1Q24, an $84 million increase from 4Q23.
- Commercial and industrial loans totaled $1.4 billion at March 31, 2024, a $32 million increase from December 31, 2023.
- Average commercial and industrial loans totaled $1.4 billion in 1Q24, a $12 million decrease from 4Q23.
- Residential mortgage loans totaled $2.7 billion at March 31, 2024, a $4 million increase from December 31, 2023.
- Average residential mortgage loans totaled $2.7 billion in 1Q24, a $12 million increase from 4Q23.
- Consumer loans totaled $430 million at March 31, 2024, a $57 million decrease from December 31, 2023.
- Average consumer loans totaled $465 million in 1Q24, a $33 million decrease from 4Q23.
- Loans held for sale in conjunction with the planned branch sale totaled $58 million at March 31, 2024, and consisted primarily of consumer and residential mortgage loans.
- Average loans held for sale in conjunction with the planned branch sale totaled $18 million based on the March 4, 2024 branch sale agreement date.
- Non-performing loans to total loans was 0.24% at March 31, 2024, unchanged from December 31, 2023.
- The allowance for credit losses to total loans was 1.18% at March 31, 2024, compared to 1.17% at December 31, 2023.
Deposits
- Non-interest bearing deposits totaled $2.3 billion at March 31, 2024, a $207 million decrease from December 31, 2023.
- Average non-interest bearing deposits totaled $2.3 billion in 1Q24, a $140 million decrease from 4Q23.
- Time deposits totaled $2.4 billion at March 31, 2024, a $281 million decrease from December 31, 2024.
- Average time deposits totaled $2.6 billion in 1Q24, a $3 million increase from 4Q23.
- Deposits held for sale in conjunction with the planned branch sale totaled $485 million at March 31, 2024.
- Average deposits held for sale totaled $149 million in 1Q24 based on the March 4, 2024 sale agreement date.
1Q 2024 Corporate Responsibility and Sustainability Highlights
- Berkshire was named one of the Most Trustworthy Companies in America 2024 by Newsweek magazine.
- The Company released its 2023 Sustainability Report highlighting all that Berkshire is doing to be a responsible, equitable and sustainable bank while elevating its client experience and community impact.
- Berkshire maintained its top quartile environmental, social and governance performance in the banking sector.
Conference Call and Investor Presentation. Berkshire will conduct a conference call/webcast at 9:00 a.m. eastern time on Thursday, April 18, 2024 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 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
[email protected]
MEDIA CONTACT
Gary Levante
Corporate Communications
413.447.1737
[email protected]
BERKSHIRE HILLS BANCORP, INC. | |||||||||||||
SELECTED FINANCIAL HIGHLIGHTS (1) | |||||||||||||
At or for the Quarters Ended | |||||||||||||
March 31, | Dec. 31, | Sept. 30, | June 30, | March 31, | |||||||||
2024 | 2023 | 2023 | 2023 | 2023 | |||||||||
NOMINAL AND PER SHARE DATA | |||||||||||||
Net (loss)/earnings per common share, diluted | $ (0.47) | $ (0.03) | $ 0.45 | $ 0.55 | $ 0.63 | ||||||||
Operating earnings per common share, diluted (2)(3) | 0.49 | 0.47 | 0.50 | 0.55 | 0.63 | ||||||||
Net (loss)/income, (thousands) | (20,188) | (1,445) | 19,545 | 23,861 | 27,637 | ||||||||
Operating net income, (thousands) (2)(3) | 20,934 | 20,190 | 21,516 | 23,878 | 27,608 | ||||||||
Net interest income, (thousands) non FTE | 88,140 | 88,421 | 90,334 | 92,759 | 97,533 | ||||||||
Net interest income, FTE (5) | 90,146 | 90,442 | 92,314 | 94,721 | 99,441 | ||||||||
Total common shares outstanding, end of period (thousands) | 43,415 | 43,501 | 43,822 | 44,033 | 44,411 | ||||||||
Average diluted shares, (thousands) | 43,028 | 43,101 | 43,347 | 43,532 | 44,036 | ||||||||
Total book value per common share, end of period | 23.26 | 23.27 | 21.70 | 22.11 | 22.42 | ||||||||
Tangible book value per common share, end of period (2)(3) | 22.84 | 22.82 | 21.23 | 21.60 | 21.89 | ||||||||
Dividends per common share | 0.18 | 0.18 | 0.18 | 0.18 | 0.18 | ||||||||
Dividend payout ratio | N/M | % | N/M | % | 40.56 | % | 33.47 | % | 28.98 | % | |||
PERFORMANCE RATIOS (4) | |||||||||||||
Return on equity | (7.93) | % | (0.60) | % | 7.91 | % | 9.51 | % | 11.31 | % | |||
Operating return on equity (2)(3) | 8.23 | 8.36 | 8.71 | 9.51 | 11.30 | ||||||||
Return on tangible common equity (2)(3) | (7.73) | (0.24) | 8.45 | 10.09 | 11.96 | ||||||||
Operating return on tangible common equity (2)(3) | 8.73 | 8.90 | 9.27 | 10.09 | 11.96 | ||||||||
Return on assets | (0.69) | (0.05) | 0.66 | 0.79 | 0.96 | ||||||||
Operating return on assets (2)(3) | 0.71 | 0.68 | 0.73 | 0.79 | 0.95 | ||||||||
Net interest margin, FTE (5) | 3.15 | 3.11 | 3.18 | 3.24 | 3.58 | ||||||||
Efficiency ratio (3) | 66.26 | 67.77 | 65.05 | 63.57 | 59.51 | ||||||||
FINANCIAL DATA (in millions, end of period) | |||||||||||||
Total assets | $ 12,147 | $ 12,431 | $ 12,140 | $ 12,090 | $ 12,320 | ||||||||
Total earning assets | 11,430 | 11,705 | 11,400 | 11,370 | 11,615 | ||||||||
Total loans | 9,086 | 9,040 | 8,984 | 8,882 | 8,682 | ||||||||
Total funding liabilities | 10,826 | 11,140 | 10,906 | 10,864 | 11,093 | ||||||||
Total deposits | 9,883 | 10,633 | 9,981 | 10,068 | 10,068 | ||||||||
Loans/deposits (%) | 92 | % | 85 | % | 90 | % | 88 | % | 86 | % | |||
Total accumulated other comprehensive (loss) net of tax, end of period | $ (114) | $ (143) | $ (218) | $ (186) | $ (159) | ||||||||
Total shareholders' equity | 1,010 | 1,012 | 951 | 973 | 995 | ||||||||
ASSET QUALITY | |||||||||||||
Allowance for credit losses, (millions) | $ 107 | $ 105 | $ 103 | $ 100 | $ 98 | ||||||||
Net charge-offs, (millions) | (4) | (4) | (5) | (6) | (7) | ||||||||
Net charge-offs (QTD annualized)/average loans | 0.18 | % | 0.20 | % | 0.24 | % | 0.26 | % | 0.32 | % | |||
Provision (benefit)/expense, (millions) | $ 6 | $ 7 | $ 8 | $ 8 | $ 9 | ||||||||
Non-performing assets, (millions) | 24 | 24 | 29 | 31 | 29 | ||||||||
Non-performing loans/total loans | 0.24 | % | 0.24 | % | 0.30 | % | 0.32 | % | 0.31 | % | |||
Allowance for credit losses/non-performing loans | 500 | 492 | 386 | 353 | 363 | ||||||||
Allowance for credit losses/total loans | 1.18 | 1.17 | 1.14 | 1.13 | 1.13 | ||||||||
CAPITAL RATIOS | |||||||||||||
Risk weighted assets, (millions)(6) | $ 9,628 | $ 9,552 | $ 9,594 | $ 9,523 | $ 9,454 | ||||||||
Common equity Tier 1 capital to risk weighted assets (6) | 11.6 | % | 12.0 | % | 12.1 | % | 12.1 | % | 12.1 | % | |||
Tier 1 capital leverage ratio (6) | 9.5 | 9.6 | 9.8 | 9.6 | 9.9 | ||||||||
Tangible common shareholders' equity/tangible assets (3) | 8.2 | 8.0 | 7.7 | 7.9 | 7.9 | ||||||||
(1) | All financial tables presented are unaudited. | ||||||||||||
(2) | Reconciliations of non-GAAP financial measures, including all references to operating and tangible amounts, start on page 12. | ||||||||||||
(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 page 13 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 March 31, 2024 and actual for the remaining periods. | ||||||||||||
BERKSHIRE HILLS BANCORP, INC. | |||
CONSOLIDATED BALANCE SHEETS | |||
March 31, | December 31, | March 31, | |
(in thousands) | 2024 | 2023 | 2023 |
Assets | |||
Cash and due from banks | $ 111,676 | $ 148,148 | $ 121,589 |
Short-term investments | 1,082,019 | 1,055,096 | 884,973 |
Total cash and cash equivalents | 1,193,695 | 1,203,244 | 1,006,562 |
Trading securities, at fair value | 5,909 | 6,142 | 6,584 |
Equity securities, at fair value | 12,823 | 13,029 | 13,072 |
Securities available for sale, at fair value | 625,857 | 1,022,285 | 1,407,271 |
Securities held to maturity, at amortized cost | 531,820 | 543,351 | 574,606 |
Federal Home Loan Bank stock | 20,522 | 22,689 | 44,245 |
Total securities | 1,196,931 | 1,607,496 | 2,045,778 |
Less: Allowance for credit losses on investment securities | (61) | (68) | (71) |
Net securities | 1,196,870 | 1,607,428 | 2,045,707 |
Loans held for sale | 6,345 | 2,237 | 1,906 |
Commercial real estate loans | 4,593,692 | 4,527,012 | 4,231,510 |
Commercial and industrial loans | 1,384,591 | 1,352,834 | 1,553,340 |
Residential mortgages | 2,677,046 | 2,672,677 | 2,369,614 |
Consumer loans | 430,424 | 487,163 | 527,503 |
Total loans | 9,085,753 | 9,039,686 | 8,681,967 |
Less: Allowance for credit losses on loans | (107,331) | (105,357) | (97,991) |
Net loans | 8,978,422 | 8,934,329 | 8,583,976 |
Premises and equipment, net | 57,832 | 68,915 | 78,710 |
Other intangible assets | 18,460 | 19,664 | 23,279 |
Other assets | 611,967 | 584,066 | 571,616 |
Assets held for sale | 83,020 | 10,938 | 8,220 |
Total assets | $ 12,146,611 | $ 12,430,821 | $ 12,319,976 |
Liabilities and shareholders' equity | |||
Non-interest bearing deposits | $ 2,261,794 | $ 2,469,164 | $ 2,650,937 |
NOW and other deposits | 793,492 | 858,644 | 959,417 |
Money market deposits | 3,411,672 | 3,565,516 | 3,274,630 |
Savings deposits | 1,010,630 | 1,053,810 | 1,069,915 |
Time deposits | 2,405,384 | 2,686,250 | 2,112,646 |
Total deposits | 9,882,972 | 10,633,384 | 10,067,545 |
Federal Home Loan Bank advances | 337,169 | 385,223 | 904,395 |
Subordinated borrowings | 121,425 | 121,363 | 121,176 |
Total borrowings | 458,594 | 506,586 | 1,025,571 |
Other liabilities | 297,663 | 278,630 | 231,380 |
Liabilities held for sale | 497,459 | - | - |
Total liabilities | 11,136,688 | 11,418,600 | 11,324,496 |
Common shareholders' equity | 1,009,923 | 1,012,221 | 995,480 |
Total shareholders' equity | 1,009,923 | 1,012,221 | 995,480 |
Total liabilities and shareholders' equity | $ 12,146,611 | $ 12,430,821 | $ 12,319,976 |
BERKSHIRE HILLS BANCORP, INC. | ||||
CONSOLIDATED STATEMENTS OF OPERATIONS | ||||
Three Months Ended | ||||
March 31, | ||||
(in thousands, except per share data) | 2024 | 2023 | ||
Interest income | $ 152,006 | $ 132,316 | ||
Interest expense | 63,866 | 34,783 | ||
Net interest income, non FTE | 88,140 | 97,533 | ||
Non-interest income | ||||
Deposit related fees | 8,305 | 8,311 | ||
Loan related fees | 2,663 | 2,469 | ||
Gain on SBA loans | 1,699 | 2,494 | ||
Wealth management fees | 2,884 | 2,739 | ||
Fair value adjustments on securities | (115) | 234 | ||
Other | 1,874 | 359 | ||
Total non-interest income excluding sales of AFS securities | 17,310 | 16,606 | ||
(Loss) on sale of AFS securities | (49,909) | - | ||
Total non-interest income | (32,599) | 16,606 | ||
Total net revenue | 55,541 | 114,139 | ||
Provision expense for credit losses | 6,000 | 8,999 | ||
Non-interest expense | ||||
Compensation and benefits | 40,735 | 39,071 | ||
Occupancy and equipment | 8,698 | 9,379 | ||
Technology | 9,904 | 9,471 | ||
Professional services | 2,676 | 3,277 | ||
Regulatory expenses | 1,845 | 1,426 | ||
Amortization of intangible assets | 1,205 | 1,205 | ||
Marketing | 1,116 | 1,208 | ||
Merger, restructuring and other non-operating expenses | 3,617 | (36) | ||
Other expenses | 6,224 | 6,954 | ||
Total non-interest expense | 76,020 | 71,955 | ||
Total non-interest expense excluding non-operating expenses | 72,403 | 71,991 | ||
(Loss)/income before income taxes | $ (26,479) | $ 33,185 | ||
Income tax (benefit)/expense | (6,291) | 5,548 | ||
Net (loss)/income | $ (20,188) | $ 27,637 | ||
Basic (loss)/earnings per common share | $ (0.47) | $ 0.63 | ||
Diluted (loss)/earnings per common share | $ (0.47) | $ 0.63 | ||
Weighted average shares outstanding: | ||||
Basic | 42,777 | 43,693 | ||
Diluted | 43,028 | 44,036 | ||
BERKSHIRE HILLS BANCORP, INC. | |||||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS (5 Quarter Trend) | |||||||||||
March 31, | Dec. 31, | Sept. 30, | June 30, | March 31, | |||||||
(in thousands, except per share data) | 2024 | 2023 | 2023 | 2023 | 2023 | ||||||
Interest income | $ 152,006 | $ 150,537 | $ 148,021 | $ 145,425 | $ 132,316 | ||||||
Interest expense | 63,866 | 62,116 | 57,687 | 52,666 | 34,783 | ||||||
Net interest income, non FTE | 88,140 | 88,421 | 90,334 | 92,759 | 97,533 | ||||||
Non-interest income | |||||||||||
Deposit related fees | 8,305 | 8,481 | 8,792 | 8,571 | 8,311 | ||||||
Loan related fees | 2,663 | 2,058 | 2,879 | 3,189 | 2,469 | ||||||
Gain on SBA loans | 1,699 | 2,382 | 2,548 | 2,910 | 2,494 | ||||||
Wealth management fees | 2,884 | 2,394 | 2,481 | 2,583 | 2,739 | ||||||
Fair value adjustments on securities | (115) | 768 | (467) | (22) | 234 | ||||||
Other | 1,874 | 591 | 1,232 | (137) | 359 | ||||||
Total non-interest income excluding sales of AFS securities | 17,310 | 16,674 | 17,465 | 17,094 | 16,606 | ||||||
Loss on sale of AFS securities | (49,909) | (25,057) | - | - | - | ||||||
Total non-interest income | (32,599) | (8,383) | 17,465 | 17,094 | 16,606 | ||||||
Total net revenue | 55,541 | 80,038 | 107,799 | 109,853 | 114,139 | ||||||
Provision expense for credit losses | 6,000 | 7,000 | 8,000 | 8,000 | 8,999 | ||||||
Non-interest expense | |||||||||||
Compensation and benefits | 40,735 | 40,095 | 40,155 | 39,960 | 39,071 | ||||||
Occupancy and equipment | 8,698 | 8,553 | 8,816 | 8,970 | 9,379 | ||||||
Technology | 9,904 | 11,326 | 10,616 | 10,465 | 9,471 | ||||||
Professional services | 2,676 | 3,417 | 2,423 | 2,526 | 3,277 | ||||||
Regulatory expenses | 1,845 | 1,854 | 1,905 | 1,834 | 1,426 | ||||||
Amortization of intangible assets | 1,205 | 1,205 | 1,205 | 1,205 | 1,205 | ||||||
Marketing | 1,116 | 1,107 | 1,552 | 1,510 | 1,208 | ||||||
Merger, restructuring and other non-operating expenses | 3,617 | 3,669 | 2,607 | 21 | (36) | ||||||
Other expenses | 6,224 | 7,766 | 7,234 | 7,557 | 6,954 | ||||||
Total non-interest expense | 76,020 | 78,992 | 76,513 | 74,048 | 71,955 | ||||||
Total non-interest expense excluding non-operating expenses | 72,403 | 75,323 | 73,906 | 74,027 | 71,991 | ||||||
(Loss)/income before income taxes | $ (26,479) | $ (5,954) | $ 23,286 | $ 27,805 | $ 33,185 | ||||||
Income tax (benefit)/expense | (6,291) | (4,509) | 3,741 | 3,944 | 5,548 | ||||||
Net (loss)/income | $ (20,188) | $ (1,445) | $ 19,545 | $ 23,861 | $ 27,637 | ||||||
Diluted (loss)/earnings per common share | $ (0.47) | $ (0.03) | $ 0.45 | $ 0.55 | $ 0.63 | ||||||
Weighted average shares outstanding: | |||||||||||
Basic | 42,777 | 42,852 | 43,164 | 43,443 | 43,693 | ||||||
Diluted | 43,028 | 43,101 | 43,347 | 43,532 | 44,036 | ||||||
BERKSHIRE HILLS BANCORP, INC. | ||||||||||||||
AVERAGE BALANCES AND AVERAGE YIELDS AND COSTS | ||||||||||||||
Quarters Ended | ||||||||||||||
March 31, 2024 | December 31, 2023 | March 31, 2023 | ||||||||||||
(in millions) | Average | Interest (1) | Average | Average | Interest (1) | Average | Average | Interest (1) | Average | |||||
Assets | ||||||||||||||
Commercial real estate | $ 4,553 | $ 75 | 6.53 | % | $ 4,469 | $ 74 | 6.45 | % | $ 4,166 | $ 61 | 5.88 | % | ||
Commercial and industrial loans | 1,355 | 26 | 7.64 | 1,367 | 26 | 7.60 | 1,527 | 26 | 6.92 | |||||
Residential mortgages | 2,668 | 29 | 4.15 | 2,656 | 27 | 4.06 | 2,283 | 21 | 3.70 | |||||
Consumer loans | 465 | 8 | 7.24 | 498 | 9 | 7.31 | 539 | 10 | 7.24 | |||||
Total loans | 9,041 | 138 | 6.04 | 8,990 | 136 | 5.97 | 8,515 | 118 | 5.57 | |||||
Securities (2) | 1,726 | 10 | 2.38 | 2,080 | 12 | 2.40 | 2,261 | 13 | 2.23 | |||||
Short-term investments and loans held for sale | 489 | 6 | 5.07 | 350 | 4 | 4.22 | 313 | 3 | 4.24 | |||||
New York branch loans held for sale (3) | 18 | 0 | 5.72 | - | - | - | - | - | - | |||||
Total earning assets | 11,274 | 154 | 5.44 | 11,420 | 152 | 5.26 | 11,089 | 134 | 4.85 | |||||
Goodwill and other intangible assets | 19 | 20 | 24 | |||||||||||
Other assets | 462 | 422 | 456 | |||||||||||
Total assets | $ 11,755 | $ 11,862 | $ 11,569 | |||||||||||
Liabilities and shareholders' equity | ||||||||||||||
Non-interest-bearing demand deposits | $ 2,348 | $ - | - | % | $ 2,488 | $ - | - | % | $ 2,706 | $ - | - | % | ||
NOW and other | 799 | 3 | 1.37 | 833 | 3 | 1.38 | 1,456 | 6 | 1.64 | |||||
Money market | 3,083 | 25 | 3.25 | 2,995 | 23 | 3.08 | 2,659 | 10 | 1.59 | |||||
Savings | 1,038 | 3 | 0.97 | 1,062 | 2 | 0.90 | 1,047 | - | 0.10 | |||||
Time | 2,561 | 26 | 4.07 | 2,558 | 25 | 3.77 | 1,808 | 10 | 2.13 | |||||
Total deposits | 9,829 | 57 | 2.29 | 9,936 | 53 | 2.11 | 9,676 | 26 | 1.09 | |||||
Borrowings (4) | 504 | 7 | 5.52 | 668 | 9 | 5.45 | 688 | 9 | 5.06 | |||||
New York branch non-interest-bearing deposits | 30 | - | - | - | - | - | - | - | - | |||||
New York branch interest-bearing deposits | 119 | 1 | 2.75 | - | - | - | - | - | - | |||||
Total funding liabilities | 10,482 | 65 | 2.45 | 10,604 | 62 | 2.32 | 10,364 | 35 | 1.36 | |||||
Other liabilities | 255 | 292 | 227 | |||||||||||
Total liabilities | 10,737 | 10,896 | 10,591 | |||||||||||
Common shareholders' equity (5) | 1,018 | 966 | 978 | |||||||||||
Total shareholders' equity | 1,018 | 966 | 978 | |||||||||||
Total liabilities and shareholders' equity | $ 11,755 | $ 11,862 | $ 11,569 | |||||||||||
Net interest margin, FTE | 3.15 | 3.11 | 3.58 | |||||||||||
Supplementary data | ||||||||||||||
Net Interest Income, non FTE | 88.140 | 88.421 | 97.533 | |||||||||||
FTE income adjustment | 2.006 | 2.021 | 1.908 | |||||||||||
Net Interest Income, FTE | 90.146 | 90.442 | 99.441 | |||||||||||
(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 financing lease obligations 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 current presentation. | ||||||||||||||
BERKSHIRE HILLS BANCORP, INC. | ||||||||||
ASSET QUALITY ANALYSIS | ||||||||||
At or for the Quarters Ended | ||||||||||
March 31, | Dec. 31, | Sept. 30, | June 30, | March 31, | ||||||
(in thousands) | 2024 | 2023 | 2023 | 2023 | 2023 | |||||
NON-PERFORMING ASSETS | ||||||||||
Commercial real estate | $ 4,762 | $ 4,453 | $ 5,288 | $ 1,509 | $ 2,546 | |||||
Commercial and industrial loans | 9,174 | 8,712 | 11,028 | 15,597 | 12,155 | |||||
Residential mortgages | 5,992 | 6,404 | 8,060 | 8,722 | 9,442 | |||||
Consumer loans | 1,526 | 1,838 | 2,260 | 2,560 | 2,848 | |||||
Total non-performing loans | 21,454 | 21,407 | 26,636 | 28,388 | 26,991 | |||||
Repossessed assets | 2,689 | 2,601 | 2,548 | 2,549 | 2,462 | |||||
Total non-performing assets | $ 24,143 | $ 24,008 | $ 29,184 | $ 30,937 | $ 29,453 | |||||
Total non-performing loans/total | 0.24 % | 0.24 % | 0.30 % | 0.32 % | 0.31 % | |||||
Total non-performing assets/total | 0.20 % | 0.19 % | 0.24 % | 0.26 % | 0.24 % | |||||
PROVISION AND ALLOWANCE | ||||||||||
Balance at beginning of period | $ 105,357 | $ 102,792 | $ 100,219 | $ 97,991 | $ 96,270 | |||||
Adoption of ASU No. 2022-02 | - | - | - | - | (401) | |||||
Balance after adoption of ASU | 105,357 | 102,792 | 100,219 | 97,991 | 95,869 | |||||
Charged-off loans | (5,636) | (6,891) | (6,744) | (7,686) | (7,936) | |||||
Recoveries on charged-off loans | 1,610 | 2,456 | 1,317 | 1,914 | 1,059 | |||||
Net loans charged-off | (4,026) | (4,435) | (5,427) | (5,772) | (6,877) | |||||
Provision (benefit)/expense for | 6,000 | 7,000 | 8,000 | 8,000 | 8,999 | |||||
Balance at end of period | $ 107,331 | $ 105,357 | $ 102,792 | $ 100,219 | $ 97,991 | |||||
Allowance for credit losses/total | 1.18 % | 1.17 % | 1.14 % | 1.13 % | 1.13 % | |||||
Allowance for credit losses/non- | 500 % | 492 % | 386 % | 353 % | 363 % | |||||
NET LOAN CHARGE-OFFS | ||||||||||
Commercial real estate | $ 292 | $ 316 | $ 97 | $ 664 | $ 122 | |||||
Commercial and industrial loans | (1,772) | (2,309) | (3,345) | (4,146) | (5,695) | |||||
Residential mortgages | 98 | 55 | 23 | (143) | 305 | |||||
Home equity | 193 | 83 | 208 | 126 | 16 | |||||
Other consumer loans | (2,837) | (2,580) | (2,410) | (2,273) | (1,625) | |||||
Total, net | $ (4,026) | $ (4,435) | $ (5,427) | $ (5,772) | $ (6,877) | |||||
Net charge-offs (QTD | 0.18 % | 0.20 % | 0.24 % | 0.26 % | 0.32 % | |||||
Net charge-offs (YTD | 0.18 % | 0.26 % | 0.28 % | 0.29 % | 0.32 % | |||||
DELINQUENT AND NON- | Balance | Percent | Balance | Percent | Balance | Percent | Balance | Percent | Balance | Percent |
30-89 Days delinquent | $ 27,682 | 0.30 % | $ 22,140 | 0.24 % | $ 18,700 | 0.21 % | $ 15,147 | 0.17 % | $ 14,210 | 0.16 % |
90+ Days delinquent and still | 5,882 | 0.06 % | 5,537 | 0.06 % | 5,744 | 0.06 % | 7,812 | 0.09 % | 6,937 | 0.08 % |
Total accruing delinquent loans | 33,564 | 0.36 % | 27,677 | 0.30 % | 24,444 | 0.27 % | 22,959 | 0.26 % | 21,147 | 0.24 % |
Non-performing loans | 21,454 | 0.24 % | 21,407 | 0.24 % | 26,636 | 0.30 % | 28,399 | 0.32 % | 26,991 | 0.31 % |
Total delinquent and non- | $ 55,018 | 0.60 % | $ 49,084 | 0.54 % | $ 51,080 | 0.57 % | $ 51,358 | 0.58 % | $ 48,138 | 0.55 % |
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. |
BERKSHIRE HILLS BANCORP, INC. | ||||||||||||
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES AND SUPPLEMENTARY DATA | ||||||||||||
At or for the Quarters Ended | ||||||||||||
March 31, | Dec. 31, | Sept. 30, | June 30, | March 31, | ||||||||
(in thousands) | 2024 | 2023 | 2023 | 2023 | 2023 | |||||||
Total non-interest income | $ (32,599) | $ (8,383) | $ 17,465 | $ 17,094 | $ 16,606 | |||||||
Adj: Loss on sale of AFS securities | 49,909 | 25,057 | - | - | - | |||||||
Total operating non-interest income (1) | $ 17,310 | $ 16,674 | $ 17,465 | $ 17,094 | $ 16,606 | |||||||
Total revenue | (A) | $ 55,541 | $ 80,038 | $ 107,799 | $ 109,853 | $ 114,139 | ||||||
Adj: Loss on sale of AFS securities | 49,909 | 25,057 | - | - | - | |||||||
Total operating revenue (1) | (B) | $ 105,450 | $ 105,095 | $ 107,799 | $ 109,853 | $ 114,139 | ||||||
Total non-interest expense | (C) | $ 76,020 | $ 78,992 | $ 76,513 | $ 74,048 | $ 71,955 | ||||||
Adj: Merger, restructuring and other non-operating expenses | (3,617) | (3,669) | (2,607) | (21) | 36 | |||||||
Operating non-interest expense (1) | (D) | $ 72,403 | $ 75,323 | $ 73,906 | $ 74,027 | $ 71,991 | ||||||
Pre-tax, pre-provision net revenue (PPNR) | (A-C) | $ (20,479) | $ 1,046 | $ 31,286 | $ 35,805 | $ 42,184 | ||||||
Operating pre-tax, pre-provision net revenue (PPNR) (1) | (B-D) | 33,047 | 29,772 | 33,893 | 35,826 | 42,148 | ||||||
Net (loss)/income | $ (20,188) | $ (1,445) | $ 19,545 | $ 23,861 | $ 27,637 | |||||||
Adj: Loss on sale of AFS securities | 49,909 | 25,057 | - | - | - | |||||||
Adj: Restructuring expense and other non-operating expenses | 3,617 | 3,669 | 2,607 | 21 | (36) | |||||||
Adj: Income taxes (expense)/benefit | (12,404) | (7,091) | (636) | (4) | 7 | |||||||
Total operating income (1) | (E) | $ 20,934 | $ 20,190 | $ 21,516 | $ 23,878 | $ 27,608 | ||||||
(in millions, except per share data) | ||||||||||||
Total average assets | (F) | $ 11,755 | $ 11,862 | $ 11,860 | $ 12,057 | $ 11,569 | ||||||
Total average shareholders' equity | (G) | 1,018 | 966 | 988 | 1,004 | 978 | ||||||
Total average tangible shareholders' equity (1) | (I) | 999 | 946 | 967 | 981 | 954 | ||||||
Total accumulated other comprehensive (loss) net of tax, end of period | (114) | (143) | (218) | (186) | (159) | |||||||
Total tangible shareholders' equity, end of period (1) | (K) | 991 | 993 | 930 | 951 | 972 | ||||||
Total tangible assets, end of period (1) | (L) | 12,128 | 12,411 | 12,119 | 12,068 | 12,297 | ||||||
Total common shares outstanding, end of period (thousands) | (M) | 43,415 | 43,501 | 43,822 | 44,033 | 44,411 | ||||||
Average diluted shares outstanding (thousands) | (N) | 43,028 | 43,101 | 43,347 | 43,532 | 44,036 | ||||||
Earnings per common share, diluted (1) | $ (0.47) | $ (0.03) | $ 0.45 | $ 0.55 | $ 0.63 | |||||||
Operating earnings per common share, diluted (1) | (E/N) | 0.49 | 0.47 | 0.50 | 0.55 | 0.63 | ||||||
Tangible book value per common share, end of period (1) | (K/M) | 22.84 | 22.82 | 21.23 | 21.60 | 21.89 | ||||||
Total tangible shareholders' equity/total tangible assets (1) | (K/L) | 8.17 | 8.00 | 7.68 | 7.88 | 7.91 | ||||||
Performance ratios (2) | ||||||||||||
Return on equity | (7.93) | % | (0.60) | 7.91 | % | 9.51 | % | 11.31 | % | |||
Operating return on equity (1) | (E/G) | 8.23 | 8.36 | 8.71 | 9.51 | 11.30 | ||||||
Return on tangible common equity (1)(3) | (7.73) | (0.24) | 8.45 | 10.09 | 11.96 | |||||||
Operating return on tangible common equity (1)(3) | (E+Q)/(I) | 8.73 | 8.90 | 9.27 | 10.09 | 11.96 | ||||||
Return on assets | (0.69) | (0.05) | 0.66 | 0.79 | 0.96 | |||||||
Operating return on assets (1) | (E/F) | 0.71 | 0.68 | 0.73 | 0.79 | 0.95 | ||||||
Efficiency ratio (1)(6) | (D-Q)/(B+O+R) | 66.26 | 67.77 | 65.05 | 63.57 | 59.51 | ||||||
Supplementary data (in thousands) | ||||||||||||
Tax benefit on tax-credit investments (4) | (O) | N/M | $ 2,252 | $ 1,979 | $ 2,735 | $ 2,897 | ||||||
Non-interest income tax-credit investments amortization (5) | (P) | N/M | (2,060) | (1,463) | (2,210) | (2,285) | ||||||
Net income on tax-credit investments | (O+P) | N/M | 193 | 516 | 525 | 612 | ||||||
Effective tax rate | 23.8 | % | 75.7 | % | 16.1 | % | 14.2 | % | 16.7 | % | ||
Intangible amortization | (Q) | $ 1,205 | $ 1,205 | $ 1,205 | $ 1,205 | $ 1,205 | ||||||
Fully taxable equivalent income adjustment | (R) | 2,006 | 2,021 | 1,980 | 1,962 | 1,908 | ||||||
(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. | ||||||||||||
View original content to download multimedia:https://www.prnewswire.com/news-releases/berkshire-hills-reports-first-quarter-2024-results-302120297.html
SOURCE Berkshire Hills Bancorp, Inc.