NYSE:BHLB Berkshire Hills Bancorp Q2 2025 Earnings Report $24.31 +0.27 (+1.12%) Closing price 03:59 PM EasternExtended Trading$23.75 -0.56 (-2.30%) As of 07:30 PM Eastern Extended trading is trading that happens on electronic markets outside of regular trading hours. This is a fair market value extended hours price provided by Polygon.io. Learn more. ProfileEarnings HistoryForecast Berkshire Hills Bancorp EPS ResultsActual EPS$0.69Consensus EPS $0.58Beat/MissBeat by +$0.11One Year Ago EPS$0.55Berkshire Hills Bancorp Revenue ResultsActual Revenue$113.67 millionExpected Revenue$113.34 millionBeat/MissBeat by +$329.00 thousandYoY Revenue Growth+4.60%Berkshire Hills Bancorp Announcement DetailsQuarterQ2 2025Date7/24/2025TimeBefore Market OpensConference Call DateThursday, July 24, 2025Conference Call Time9:00AM ETUpcoming EarningsBerkshire Hills Bancorp's Q3 2025 earnings is scheduled for Thursday, October 23, 2025, with a conference call scheduled at 9:00 AM ET. Check back for transcripts, audio, and key financial metrics as they become available.Conference Call ResourcesConference Call AudioConference Call TranscriptSlide DeckPress Release (8-K)Earnings HistoryCompany ProfileSlide DeckFull Screen Slide DeckPowered by Berkshire Hills Bancorp Q2 2025 Earnings Call TranscriptProvided by QuartrJuly 24, 2025 ShareLink copied to clipboard.Key Takeaways Positive Sentiment: Berkshire reported operating net income of $31.6 million, up 14% linked quarter with EPS of $0.69, marking its strongest quarter since early 2021 and a 110 bp increase in Operating ROTCE to 10.76%. Positive Sentiment: Operating expenses fell 2% quarter-over-quarter to $67 million, driving a 56.7% efficiency ratio and delivering 5% positive operating leverage through revenue growth and cost discipline. Positive Sentiment: The digital deposit program has generated over $100 million in new deposits since inception, contributing to average deposit growth of 6% year-over-year and a stable 23% share of noninterest-bearing deposits. Positive Sentiment: The merger of equals with Brookline Bancorp is on track for a September close, with expected 23% cash and 40% GAAP EPS accretion in 2026 and pro forma cost-savings targets of 12.6%. Positive Sentiment: Asset quality remains strong with nonperforming loans at 0.27% of total loans, net charge-offs of 0.14%, and reserves covering NPLs at 462%, indicating low credit impairment. AI Generated. May Contain Errors.Conference Call Audio Live Call not available Earnings Conference CallBerkshire Hills Bancorp Q2 202500:00 / 00:00Speed:1x1.25x1.5x2xTranscript SectionsPresentationParticipantsPresentationSkip to Participants Operator00:00:00Thank you for standing by. My name is Carly, and I will be your conference operator today. At this time, I would like to welcome everyone to the Berkshire Hills Bancorp Second Quarter Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session. Operator00:00:33Thank you. I would now like to turn the call over to Kevin Kahn. Please go ahead. Kevin ConnSenior MD - IR & Corporate Development at Berkshire Hills Bancorp00:00:40Good morning, and thank you for joining Berkshire Bank's second quarter earnings call. My name is Kevin Khan, Investor Relations and Corporate Development Officer. Here with me today are Nitin Mahatra, Chief Executive Officer Sean Gray, Chief Operating Officer Svetl Brabowic, Chief Financial Officer and Greg Lindenruth, Chief Risk Officer. Our remarks will include forward looking statements and refer to non GAAP financial measures. Actual results could differ materially from those statements. Kevin ConnSenior MD - IR & Corporate Development at Berkshire Hills Bancorp00:01:07Please see our legal disclosures on Page two of the earnings presentation referencing forward looking statements and non GAAP financial measures. Reconciliation of non GAAP to GAAP measures is included in our news release. At this time, I'll turn the call over to Nitin. Nitin? Nitin MhatreCEO & Director at Berkshire Hills Bancorp00:01:22Thank you, Kevin. Good morning, everyone, and thank you all for joining us today. I'll begin my comments on Slide three, where you can see highlights for the second quarter. Overall, this was a very strong quarter and the best quarter yet since we began our transformational journey in early twenty twenty one. We had operating net income of $31,600,000 up 14% linked quarter and up 36% year over year. Nitin MhatreCEO & Director at Berkshire Hills Bancorp00:01:52Operating earnings per share of $0.69 was up 15% from first quarter and up 25% year over year. We continued to drive expenses lower with operating expenses of $67,000,000 down 2% linked quarter and down 7% year over year. We had positive operating leverage of 5% linked quarter and 11% year over year driven by both improved revenues and lower expenses. Operating ROTCE was 10.76, up about 110 basis points linked quarter and year over year. Asset quality and balance sheet metrics remained strong. Nitin MhatreCEO & Director at Berkshire Hills Bancorp00:02:39Net charge offs and non performing loans remained low at 14 basis points and 27 basis points of loans respectively. We continue to make steady progress on our strategic initiatives. Our focus on new digital deposit program has gained momentum and has delivered over $100,000,000 of new deposits since inception earlier this year. Our bankers' commitment to delivering relationship focused, personalized solutions to our clients has been at the core of our improved financial performance and has earned us yet another recognition this quarter. This time from Time Magazine that recognized us again amongst the top performing mid sized US companies in 2025. Nitin MhatreCEO & Director at Berkshire Hills Bancorp00:03:27As you know, in December, we announced a merger of equals with Brookline Bancorp. The transaction improves scale and meaningfully improves profitability as reflected in the estimated 4023% accretion to Berkshire's 2026 consensus estimate on GAAP and cash basis respectively. Berkshire's net income in the 2025 annualizes to over a 118,000,000 and is tracking well ahead of the 2025 consensus net income of 101,000,000 shared in our MOE investor deck in December. Our team continues to work proactively on requisite integration planning for a seamless transition. And on that note, I'll turn the call over to Sean Gray to provide an overview of the merger integration planning process. Sean? Sean GrayPresident & COO at Berkshire Hills Bancorp00:04:25Thanks, Sinton. As we await regulatory approval, there's only so much in detail we can share. But I can say this, the combined organization's leadership team has made really good progress and continues to work towards our pro form a cost save goal of 12.6%. I can speak to where our tech stack expenses are coming in as most of that work is complete and where that is coming in versus planned. So I'm very pleased with the favorable outcome of where our tech stack expense is showing up, and that will bid favorably for the overall goal of the 12.6%. Thanks, Sinton. Brett BrbovicEVP & CFO at Berkshire Hills Bancorp00:05:14Thanks, Sean. I'll begin going over the financial details for the quarter. I'll begin on Slide five, which shows an overview of the second quarter metrics. As Nin mentioned, our operating earnings were $31,600,000 or $0.69 per share. Our net interest margin was 3.27%, up three basis points linked quarter. Brett BrbovicEVP & CFO at Berkshire Hills Bancorp00:05:37Operating expenses were down $1,300,000 or 2% linked quarter and our efficiency ratio was 56.7%. Slide six shows our average loan balances. Average loans were up $95,000,000 or 1% linked quarter unannualized and up $327,000,000 or 4% year over year. Linked quarter, we had solid broad based growth led by C and I. Slide seven shows average deposits in and up 6% year over year. Brett BrbovicEVP & CFO at Berkshire Hills Bancorp00:06:16Excluding payroll and broker deposits, average deposits were up 1% linked the quarter and up 6% year over year. Average non interest bearing deposits as a percentage of total deposits remained steady at 23%. Turning to slide eight. Net interest income was up $2,200,000 or 2% linked quarter and up 4% year over year. Net interest margin was up three basis points linked quarter to 3.27 Slide nine shows operating non interest income up $1,100,000 or 5% linked quarter and up $1,600,000 or 8% year over year. Brett BrbovicEVP & CFO at Berkshire Hills Bancorp00:06:59Loan related fees were up linked quarter driven by higher loan servicing fees and BOLI gains offsetting lower SBA gains in the quarter. Slide 10 shows expenses. Operating expenses were down $1,300,000 or down 2% linked quarter to $67,000,000 and down $4,700,000 or 7% year over year. Linked quarter and year over year expense declines were broad based. Non operating expenses of $1,500,000 were primarily related to the merger. Brett BrbovicEVP & CFO at Berkshire Hills Bancorp00:07:32Slide 11 shows a summary of asset quality metrics. Non performing loans as a percentage of total loans was 27 basis points and loan reserves to NPLs was 462%. Net charge offs of $3,300,000 were down $200,000 linked quarter and our coverage ratio remained flat at 124 basis points. And with that, I'll turn it back to Nitin for further comments. Nitin? Nitin MhatreCEO & Director at Berkshire Hills Bancorp00:07:59Thank you, Brett. As Brett outlined, we had a very strong second quarter that has continued the EPS growth momentum over multiple quarters. This quarter was in fact the best quarter since we launched our transformation program in early twenty twenty one. Nitin MhatreCEO & Director at Berkshire Hills Bancorp00:08:17Over the last four and a half years, our turnaround has been a journey of efficient growth and profitability while creating a positive impact for all stakeholders. We made significant strategic decisions, embraced innovation to invest in technology, reignited organic growth, and remained committed to our communities. We've not only improved our financial performance despite the macroeconomic headwinds that have impacted the industry over the last few years, but I've also positioned ourselves for continued strength in the long term. Our progress is a testament to the unwavering dedication and hard work of our employees, the trust and loyalty of our clients, and the confidence and support of our shareholders. As I reflect on our progress since we began our transformation program in early twenty twenty one, I want to express my deepest gratitude to every member of Berkshire team, our clients, and our board of directors. Nitin MhatreCEO & Director at Berkshire Hills Bancorp00:09:19Our bankers' dedication, resilience, and commitment to our clients has been the driving force behind our improved operating and financial performance. Together, we've navigated challenges, embraced change, and delivered strong results for our clients, shareholders, and communities. It has truly been an honor and a privilege to lead such an outstanding team of purpose driven values guided talented bankers. I'm incredibly proud of what we've accomplished together and excited to see what the combined company will achieve next. With that, I'll turn it over to the operator for questions. Carly? Operator00:10:20Your first question comes from Laurie Hunsicker with Seaport Research Partners. Laurie HunsickerSenior Analyst at Seaport Research Partners00:10:27Hi. Good morning. Nitin MhatreCEO & Director at Berkshire Hills Bancorp00:10:29Good morning, Lori. Laurie HunsickerSenior Analyst at Seaport Research Partners00:10:30Just wondered just wondered, if we could just start with with margin. You guys had that 100,000,000 drop in FHLB. Just remind us when in the quarter that fell and then also your spot margin for June and just how you're thinking about it? Thanks. Brett BrbovicEVP & CFO at Berkshire Hills Bancorp00:10:51Hey, Laurie. This is Brett. Our our spot NIM for June, was about three twenty two. Laurie HunsickerSenior Analyst at Seaport Research Partners00:10:57Oh. Brett BrbovicEVP & CFO at Berkshire Hills Bancorp00:10:58The FHL b drop oh. Sorry, Laurie? Laurie HunsickerSenior Analyst at Seaport Research Partners00:11:02Sorry. Laurie HunsickerSenior Analyst at Seaport Research Partners00:11:03I think, yeah, there was a dead spot there. Can you can you start over? Thanks. Brett BrbovicEVP & CFO at Berkshire Hills Bancorp00:11:08Sure. The the spot NIM for June was three twenty two. Laurie HunsickerSenior Analyst at Seaport Research Partners00:11:14Okay. Brett BrbovicEVP & CFO at Berkshire Hills Bancorp00:11:14And the FHLB decline coincided with an increase in our our deposits throughout the quarter. So it it wasn't, you know, at a specific point in time. Brett BrbovicEVP & CFO at Berkshire Hills Bancorp00:11:25It was just based on, you know, what we needed to borrow to to or what we didn't need to borrow to, you know, based on the deposit growth that we saw this quarter. Laurie HunsickerSenior Analyst at Seaport Research Partners00:11:37Gotcha. Okay. Gotcha. And do you have do you have any, any sort of near term large maturities coming due in CDs or or borrowings that we think about here in the next quarter? Brett BrbovicEVP & CFO at Berkshire Hills Bancorp00:11:52No. Nothing. I I wouldn't say anything significant. Laurie HunsickerSenior Analyst at Seaport Research Partners00:11:57Okay. Okay. Great. And then, just jumping over to credit. Obviously, credit is looking great. Laurie HunsickerSenior Analyst at Seaport Research Partners00:12:03But just wondered if if you can help us think about that jump in the C and I non performers to 11 and a half million from 9,000,000. And then also Firestone. I know it's small, but if you could just give us, you know, what is the Firestone C and I balance and and how much in nonperformers and charge offs. Nitin MhatreCEO & Director at Berkshire Hills Bancorp00:12:24Yeah. Greg, you wanna give some color on it? Gregory LindenmuthSenior EVP & Chief Risk Officer at Berkshire Hills Bancorp00:12:27Sure. Hi, Laurie. How are you? Laurie HunsickerSenior Analyst at Seaport Research Partners00:12:29Good. Thanks. Gregory LindenmuthSenior EVP & Chief Risk Officer at Berkshire Hills Bancorp00:12:30The sure. The jump in in NPLs, it's it's a handful of just smaller credits, probably just a half dozen of smaller credits with just individual problems related to each business. As far as Firestone, the balance is down 15% quarter over quarter to 28,000,000 And NPLs have historically ranged in the $1,500,000 range. They're at $1,300,000 right now. And for NCOs, it's net $900,000 for the quarter. Laurie HunsickerSenior Analyst at Seaport Research Partners00:13:10900,000. Okay. And then, again, you had you had outsized charge offs just in the c and I bucket. Was there was there anything specific there that that's worth calling out? Gregory LindenmuthSenior EVP & Chief Risk Officer at Berkshire Hills Bancorp00:13:22No. Very similar to the NPLs. Nothing noteworthy. Just a handful of individual credits on the smaller side. Laurie HunsickerSenior Analyst at Seaport Research Partners00:13:30Gotcha. Gotcha. Okay. And then I think I know the answer to this, but I just wanna triple check. Your 700,000,000 multifamily book, anything rent controlled in that in that book? Gregory LindenmuthSenior EVP & Chief Risk Officer at Berkshire Hills Bancorp00:13:45There no. We have no rent rent control in our footprint. Even though New York City is technically within our footprint, we do not have any loans there. Laurie HunsickerSenior Analyst at Seaport Research Partners00:13:56Okay. And then I know Mondami, he's expressed a desire to target other markets too, I. E, Albany. Do you have any rent controlled anywhere? Gregory LindenmuthSenior EVP & Chief Risk Officer at Berkshire Hills Bancorp00:14:07We do not. Not in our footprint. No. And not in Albany. Laurie HunsickerSenior Analyst at Seaport Research Partners00:14:10Okay. Laurie HunsickerSenior Analyst at Seaport Research Partners00:14:13That's great. And then non interest income, the loan related fees that were really strong. What were the BOLI gains in this quarter? Brett BrbovicEVP & CFO at Berkshire Hills Bancorp00:14:22They were about $800,000 above normal. Laurie HunsickerSenior Analyst at Seaport Research Partners00:14:28Okay. Just nonrecurring benefit, death benefit or Correct. Okay. Okay. And then how do we think about the the drop in the SBA loan gain on gain on sale of SBA loans? How how should we be thinking about that? Brett BrbovicEVP & CFO at Berkshire Hills Bancorp00:14:43So I I think we can see that, Larry. Barry? Sean GrayPresident & COO at Berkshire Hills Bancorp00:14:49Hey. It's Sean. You know, we and Brett's probably gonna say the same thing. You know, we're coming off a really good q four and q one. We pulled some of that value forward. Sean GrayPresident & COO at Berkshire Hills Bancorp00:15:01So a little bit of a a move back to the the mean. But when we look at the core business, we look at pipeline and volume, looks very healthy. Laurie HunsickerSenior Analyst at Seaport Research Partners00:15:13Okay. So so this current run rate two q is probably a better run rate? Sean GrayPresident & COO at Berkshire Hills Bancorp00:15:19I would say it's in between, the q one, q two. Yeah. Laurie HunsickerSenior Analyst at Seaport Research Partners00:15:24Okay. Okay. Great. And then how should we be thinking about tax rate going forward? Brett BrbovicEVP & CFO at Berkshire Hills Bancorp00:15:32So our our tax rate is a bit elevated, right now due to timing and and merger related aspects. You know, I would I would expect it to normalize, going forward. Laurie HunsickerSenior Analyst at Seaport Research Partners00:15:45Okay. And so what what would be a good, you know, like, 23, 24%? Brett BrbovicEVP & CFO at Berkshire Hills Bancorp00:15:51I would say about 24, 25%. Laurie HunsickerSenior Analyst at Seaport Research Partners00:15:55Okay. Okay. And then just last sort of more high level question here. Can you help us think about, you know, your your deal tangible dilution at announcement tangible book dilution was 17% and then a 40% earnings pickup? Can you just help us think about what the new FASB impact on CECL updates, the double count sort of means for your tangible book dilution? Laurie HunsickerSenior Analyst at Seaport Research Partners00:16:23Can you help quantify that? And also, presumably, tangible book dilution is something less, but your earnings pickup is also something less. Just how should we think about that? And then also deal related, can you help us think about the timing? Brett BrbovicEVP & CFO at Berkshire Hills Bancorp00:16:40Sure. So obviously, the ASU hasn't been finalized yet. You know, it's expected to be adopted at the, you know, third or fourth quarter of this year. It will have an impact, on our the combined entity as we move forward. I don't think at this time, you know, we we can quantify that right now on on this call, but it definitely will have an impact, it's something we're continuing to analyze as as we get more information on the ASU and what it's gonna look like in its final state. Laurie HunsickerSenior Analyst at Seaport Research Partners00:17:17Okay. And then what about what about deal closing? We've we've seen things really ramp up on the m and a side on deal closings just happen really, really a lot faster. Any any color on that? Nitin MhatreCEO & Director at Berkshire Hills Bancorp00:17:30Yeah. Laurie, I think, we, in the investor materials, we did say we expect the closing to be September. Everything's on track so far, so we're just awaiting the regulatory approval. And the teams are already working on the integration planning, as Sean highlighted. Laurie HunsickerSenior Analyst at Seaport Research Partners00:17:47Okay. Great. Thanks, Denton. Thanks for taking my questions. Nitin MhatreCEO & Director at Berkshire Hills Bancorp00:17:51Thank you, Laurie. Brett BrbovicEVP & CFO at Berkshire Hills Bancorp00:17:52Thanks, Laurie. Operator00:17:55There are no further questions at this time. I will now turn the conference back over to Nitin Mahatra for closing remarks. Nitin MhatreCEO & Director at Berkshire Hills Bancorp00:18:03Thank you all for joining us today for our call and for your continued interest in Berkshire. Have a great day and be well. Operator00:18:12This concludes today's conference. You may now disconnect.Read moreParticipantsExecutivesKevin ConnSenior MD - IR & Corporate DevelopmentNitin MhatreCEO & DirectorSean GrayPresident & COOBrett BrbovicEVP & CFOGregory LindenmuthSenior EVP & Chief Risk OfficerAnalystsLaurie HunsickerSenior Analyst at Seaport Research PartnersPowered by Earnings DocumentsSlide DeckPress Release(8-K) Berkshire Hills Bancorp Earnings HeadlinesBerkshire Hills Bancorp and Brookline Bancorp to be Combined as Beacon Financial Corporation and Beacon Bank Upon the Closing of their Merger of EqualsAugust 6 at 4:05 PM | prnewswire.comBerkshire Hills Announces Quarterly Shareholder DividendAugust 1, 2025 | prnewswire.comGENIUS Act: Cancel Your Money?A new law called the GENIUS Act could quietly trigger the most radical shift in American finance in decades. Backed by the government but powered by private corporations, this initiative paves the way for digital dollars—programmable, trackable, and outside your control. Once embedded into apps, banks, and retail systems, opting out may no longer be possible. But there’s still time to protect your financial freedom—if you act before the system goes fully live.August 8 at 2:00 AM | Priority Gold (Ad)What is Seaport Res Ptn's Forecast for BHLB Q3 Earnings?July 29, 2025 | americanbankingnews.comBHLB Q2 Deep Dive: Merger Integration and Expense Control Drive Earnings MomentumJuly 26, 2025 | msn.comBerkshire Hills (BHLB) Q2 2025 Earnings TranscriptJuly 24, 2025 | fool.comSee More Berkshire Hills Bancorp Headlines Get Earnings Announcements in your inboxWant to stay updated on the latest earnings announcements and upcoming reports for companies like Berkshire Hills Bancorp? Sign up for Earnings360's daily newsletter to receive timely earnings updates on Berkshire Hills Bancorp and other key companies, straight to your email. Email Address About Berkshire Hills BancorpBerkshire Hills Bancorp (NYSE:BHLB) operates as the bank holding company for Berkshire Bank that provides various banking products and services in the United States. The company provides various deposit accounts, including demand deposit, interest-bearing checking, regular savings, money market savings, time certificates of deposit, and retirement deposit accounts. It offers loans, such as commercial real estate, commercial and industrial, residential mortgage, and consumer loans. In addition, the company provides wealth management services comprising investment management, trust administration, tax return preparation, and financial planning; and investment products and brokerage services. Further, it offers commercial cash management, online banking and mobile banking, small business banking, and asset based lending services; and debit cards and other electronic fee producing payment services to transaction account customers. It serves its products to personal, commercial, non-profit, and municipal deposit customers. 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PresentationSkip to Participants Operator00:00:00Thank you for standing by. My name is Carly, and I will be your conference operator today. At this time, I would like to welcome everyone to the Berkshire Hills Bancorp Second Quarter Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session. Operator00:00:33Thank you. I would now like to turn the call over to Kevin Kahn. Please go ahead. Kevin ConnSenior MD - IR & Corporate Development at Berkshire Hills Bancorp00:00:40Good morning, and thank you for joining Berkshire Bank's second quarter earnings call. My name is Kevin Khan, Investor Relations and Corporate Development Officer. Here with me today are Nitin Mahatra, Chief Executive Officer Sean Gray, Chief Operating Officer Svetl Brabowic, Chief Financial Officer and Greg Lindenruth, Chief Risk Officer. Our remarks will include forward looking statements and refer to non GAAP financial measures. Actual results could differ materially from those statements. Kevin ConnSenior MD - IR & Corporate Development at Berkshire Hills Bancorp00:01:07Please see our legal disclosures on Page two of the earnings presentation referencing forward looking statements and non GAAP financial measures. Reconciliation of non GAAP to GAAP measures is included in our news release. At this time, I'll turn the call over to Nitin. Nitin? Nitin MhatreCEO & Director at Berkshire Hills Bancorp00:01:22Thank you, Kevin. Good morning, everyone, and thank you all for joining us today. I'll begin my comments on Slide three, where you can see highlights for the second quarter. Overall, this was a very strong quarter and the best quarter yet since we began our transformational journey in early twenty twenty one. We had operating net income of $31,600,000 up 14% linked quarter and up 36% year over year. Nitin MhatreCEO & Director at Berkshire Hills Bancorp00:01:52Operating earnings per share of $0.69 was up 15% from first quarter and up 25% year over year. We continued to drive expenses lower with operating expenses of $67,000,000 down 2% linked quarter and down 7% year over year. We had positive operating leverage of 5% linked quarter and 11% year over year driven by both improved revenues and lower expenses. Operating ROTCE was 10.76, up about 110 basis points linked quarter and year over year. Asset quality and balance sheet metrics remained strong. Nitin MhatreCEO & Director at Berkshire Hills Bancorp00:02:39Net charge offs and non performing loans remained low at 14 basis points and 27 basis points of loans respectively. We continue to make steady progress on our strategic initiatives. Our focus on new digital deposit program has gained momentum and has delivered over $100,000,000 of new deposits since inception earlier this year. Our bankers' commitment to delivering relationship focused, personalized solutions to our clients has been at the core of our improved financial performance and has earned us yet another recognition this quarter. This time from Time Magazine that recognized us again amongst the top performing mid sized US companies in 2025. Nitin MhatreCEO & Director at Berkshire Hills Bancorp00:03:27As you know, in December, we announced a merger of equals with Brookline Bancorp. The transaction improves scale and meaningfully improves profitability as reflected in the estimated 4023% accretion to Berkshire's 2026 consensus estimate on GAAP and cash basis respectively. Berkshire's net income in the 2025 annualizes to over a 118,000,000 and is tracking well ahead of the 2025 consensus net income of 101,000,000 shared in our MOE investor deck in December. Our team continues to work proactively on requisite integration planning for a seamless transition. And on that note, I'll turn the call over to Sean Gray to provide an overview of the merger integration planning process. Sean? Sean GrayPresident & COO at Berkshire Hills Bancorp00:04:25Thanks, Sinton. As we await regulatory approval, there's only so much in detail we can share. But I can say this, the combined organization's leadership team has made really good progress and continues to work towards our pro form a cost save goal of 12.6%. I can speak to where our tech stack expenses are coming in as most of that work is complete and where that is coming in versus planned. So I'm very pleased with the favorable outcome of where our tech stack expense is showing up, and that will bid favorably for the overall goal of the 12.6%. Thanks, Sinton. Brett BrbovicEVP & CFO at Berkshire Hills Bancorp00:05:14Thanks, Sean. I'll begin going over the financial details for the quarter. I'll begin on Slide five, which shows an overview of the second quarter metrics. As Nin mentioned, our operating earnings were $31,600,000 or $0.69 per share. Our net interest margin was 3.27%, up three basis points linked quarter. Brett BrbovicEVP & CFO at Berkshire Hills Bancorp00:05:37Operating expenses were down $1,300,000 or 2% linked quarter and our efficiency ratio was 56.7%. Slide six shows our average loan balances. Average loans were up $95,000,000 or 1% linked quarter unannualized and up $327,000,000 or 4% year over year. Linked quarter, we had solid broad based growth led by C and I. Slide seven shows average deposits in and up 6% year over year. Brett BrbovicEVP & CFO at Berkshire Hills Bancorp00:06:16Excluding payroll and broker deposits, average deposits were up 1% linked the quarter and up 6% year over year. Average non interest bearing deposits as a percentage of total deposits remained steady at 23%. Turning to slide eight. Net interest income was up $2,200,000 or 2% linked quarter and up 4% year over year. Net interest margin was up three basis points linked quarter to 3.27 Slide nine shows operating non interest income up $1,100,000 or 5% linked quarter and up $1,600,000 or 8% year over year. Brett BrbovicEVP & CFO at Berkshire Hills Bancorp00:06:59Loan related fees were up linked quarter driven by higher loan servicing fees and BOLI gains offsetting lower SBA gains in the quarter. Slide 10 shows expenses. Operating expenses were down $1,300,000 or down 2% linked quarter to $67,000,000 and down $4,700,000 or 7% year over year. Linked quarter and year over year expense declines were broad based. Non operating expenses of $1,500,000 were primarily related to the merger. Brett BrbovicEVP & CFO at Berkshire Hills Bancorp00:07:32Slide 11 shows a summary of asset quality metrics. Non performing loans as a percentage of total loans was 27 basis points and loan reserves to NPLs was 462%. Net charge offs of $3,300,000 were down $200,000 linked quarter and our coverage ratio remained flat at 124 basis points. And with that, I'll turn it back to Nitin for further comments. Nitin? Nitin MhatreCEO & Director at Berkshire Hills Bancorp00:07:59Thank you, Brett. As Brett outlined, we had a very strong second quarter that has continued the EPS growth momentum over multiple quarters. This quarter was in fact the best quarter since we launched our transformation program in early twenty twenty one. Nitin MhatreCEO & Director at Berkshire Hills Bancorp00:08:17Over the last four and a half years, our turnaround has been a journey of efficient growth and profitability while creating a positive impact for all stakeholders. We made significant strategic decisions, embraced innovation to invest in technology, reignited organic growth, and remained committed to our communities. We've not only improved our financial performance despite the macroeconomic headwinds that have impacted the industry over the last few years, but I've also positioned ourselves for continued strength in the long term. Our progress is a testament to the unwavering dedication and hard work of our employees, the trust and loyalty of our clients, and the confidence and support of our shareholders. As I reflect on our progress since we began our transformation program in early twenty twenty one, I want to express my deepest gratitude to every member of Berkshire team, our clients, and our board of directors. Nitin MhatreCEO & Director at Berkshire Hills Bancorp00:09:19Our bankers' dedication, resilience, and commitment to our clients has been the driving force behind our improved operating and financial performance. Together, we've navigated challenges, embraced change, and delivered strong results for our clients, shareholders, and communities. It has truly been an honor and a privilege to lead such an outstanding team of purpose driven values guided talented bankers. I'm incredibly proud of what we've accomplished together and excited to see what the combined company will achieve next. With that, I'll turn it over to the operator for questions. Carly? Operator00:10:20Your first question comes from Laurie Hunsicker with Seaport Research Partners. Laurie HunsickerSenior Analyst at Seaport Research Partners00:10:27Hi. Good morning. Nitin MhatreCEO & Director at Berkshire Hills Bancorp00:10:29Good morning, Lori. Laurie HunsickerSenior Analyst at Seaport Research Partners00:10:30Just wondered just wondered, if we could just start with with margin. You guys had that 100,000,000 drop in FHLB. Just remind us when in the quarter that fell and then also your spot margin for June and just how you're thinking about it? Thanks. Brett BrbovicEVP & CFO at Berkshire Hills Bancorp00:10:51Hey, Laurie. This is Brett. Our our spot NIM for June, was about three twenty two. Laurie HunsickerSenior Analyst at Seaport Research Partners00:10:57Oh. Brett BrbovicEVP & CFO at Berkshire Hills Bancorp00:10:58The FHL b drop oh. Sorry, Laurie? Laurie HunsickerSenior Analyst at Seaport Research Partners00:11:02Sorry. Laurie HunsickerSenior Analyst at Seaport Research Partners00:11:03I think, yeah, there was a dead spot there. Can you can you start over? Thanks. Brett BrbovicEVP & CFO at Berkshire Hills Bancorp00:11:08Sure. The the spot NIM for June was three twenty two. Laurie HunsickerSenior Analyst at Seaport Research Partners00:11:14Okay. Brett BrbovicEVP & CFO at Berkshire Hills Bancorp00:11:14And the FHLB decline coincided with an increase in our our deposits throughout the quarter. So it it wasn't, you know, at a specific point in time. Brett BrbovicEVP & CFO at Berkshire Hills Bancorp00:11:25It was just based on, you know, what we needed to borrow to to or what we didn't need to borrow to, you know, based on the deposit growth that we saw this quarter. Laurie HunsickerSenior Analyst at Seaport Research Partners00:11:37Gotcha. Okay. Gotcha. And do you have do you have any, any sort of near term large maturities coming due in CDs or or borrowings that we think about here in the next quarter? Brett BrbovicEVP & CFO at Berkshire Hills Bancorp00:11:52No. Nothing. I I wouldn't say anything significant. Laurie HunsickerSenior Analyst at Seaport Research Partners00:11:57Okay. Okay. Great. And then, just jumping over to credit. Obviously, credit is looking great. Laurie HunsickerSenior Analyst at Seaport Research Partners00:12:03But just wondered if if you can help us think about that jump in the C and I non performers to 11 and a half million from 9,000,000. And then also Firestone. I know it's small, but if you could just give us, you know, what is the Firestone C and I balance and and how much in nonperformers and charge offs. Nitin MhatreCEO & Director at Berkshire Hills Bancorp00:12:24Yeah. Greg, you wanna give some color on it? Gregory LindenmuthSenior EVP & Chief Risk Officer at Berkshire Hills Bancorp00:12:27Sure. Hi, Laurie. How are you? Laurie HunsickerSenior Analyst at Seaport Research Partners00:12:29Good. Thanks. Gregory LindenmuthSenior EVP & Chief Risk Officer at Berkshire Hills Bancorp00:12:30The sure. The jump in in NPLs, it's it's a handful of just smaller credits, probably just a half dozen of smaller credits with just individual problems related to each business. As far as Firestone, the balance is down 15% quarter over quarter to 28,000,000 And NPLs have historically ranged in the $1,500,000 range. They're at $1,300,000 right now. And for NCOs, it's net $900,000 for the quarter. Laurie HunsickerSenior Analyst at Seaport Research Partners00:13:10900,000. Okay. And then, again, you had you had outsized charge offs just in the c and I bucket. Was there was there anything specific there that that's worth calling out? Gregory LindenmuthSenior EVP & Chief Risk Officer at Berkshire Hills Bancorp00:13:22No. Very similar to the NPLs. Nothing noteworthy. Just a handful of individual credits on the smaller side. Laurie HunsickerSenior Analyst at Seaport Research Partners00:13:30Gotcha. Gotcha. Okay. And then I think I know the answer to this, but I just wanna triple check. Your 700,000,000 multifamily book, anything rent controlled in that in that book? Gregory LindenmuthSenior EVP & Chief Risk Officer at Berkshire Hills Bancorp00:13:45There no. We have no rent rent control in our footprint. Even though New York City is technically within our footprint, we do not have any loans there. Laurie HunsickerSenior Analyst at Seaport Research Partners00:13:56Okay. And then I know Mondami, he's expressed a desire to target other markets too, I. E, Albany. Do you have any rent controlled anywhere? Gregory LindenmuthSenior EVP & Chief Risk Officer at Berkshire Hills Bancorp00:14:07We do not. Not in our footprint. No. And not in Albany. Laurie HunsickerSenior Analyst at Seaport Research Partners00:14:10Okay. Laurie HunsickerSenior Analyst at Seaport Research Partners00:14:13That's great. And then non interest income, the loan related fees that were really strong. What were the BOLI gains in this quarter? Brett BrbovicEVP & CFO at Berkshire Hills Bancorp00:14:22They were about $800,000 above normal. Laurie HunsickerSenior Analyst at Seaport Research Partners00:14:28Okay. Just nonrecurring benefit, death benefit or Correct. Okay. Okay. And then how do we think about the the drop in the SBA loan gain on gain on sale of SBA loans? How how should we be thinking about that? Brett BrbovicEVP & CFO at Berkshire Hills Bancorp00:14:43So I I think we can see that, Larry. Barry? Sean GrayPresident & COO at Berkshire Hills Bancorp00:14:49Hey. It's Sean. You know, we and Brett's probably gonna say the same thing. You know, we're coming off a really good q four and q one. We pulled some of that value forward. Sean GrayPresident & COO at Berkshire Hills Bancorp00:15:01So a little bit of a a move back to the the mean. But when we look at the core business, we look at pipeline and volume, looks very healthy. Laurie HunsickerSenior Analyst at Seaport Research Partners00:15:13Okay. So so this current run rate two q is probably a better run rate? Sean GrayPresident & COO at Berkshire Hills Bancorp00:15:19I would say it's in between, the q one, q two. Yeah. Laurie HunsickerSenior Analyst at Seaport Research Partners00:15:24Okay. Okay. Great. And then how should we be thinking about tax rate going forward? Brett BrbovicEVP & CFO at Berkshire Hills Bancorp00:15:32So our our tax rate is a bit elevated, right now due to timing and and merger related aspects. You know, I would I would expect it to normalize, going forward. Laurie HunsickerSenior Analyst at Seaport Research Partners00:15:45Okay. And so what what would be a good, you know, like, 23, 24%? Brett BrbovicEVP & CFO at Berkshire Hills Bancorp00:15:51I would say about 24, 25%. Laurie HunsickerSenior Analyst at Seaport Research Partners00:15:55Okay. Okay. And then just last sort of more high level question here. Can you help us think about, you know, your your deal tangible dilution at announcement tangible book dilution was 17% and then a 40% earnings pickup? Can you just help us think about what the new FASB impact on CECL updates, the double count sort of means for your tangible book dilution? Laurie HunsickerSenior Analyst at Seaport Research Partners00:16:23Can you help quantify that? And also, presumably, tangible book dilution is something less, but your earnings pickup is also something less. Just how should we think about that? And then also deal related, can you help us think about the timing? Brett BrbovicEVP & CFO at Berkshire Hills Bancorp00:16:40Sure. So obviously, the ASU hasn't been finalized yet. You know, it's expected to be adopted at the, you know, third or fourth quarter of this year. It will have an impact, on our the combined entity as we move forward. I don't think at this time, you know, we we can quantify that right now on on this call, but it definitely will have an impact, it's something we're continuing to analyze as as we get more information on the ASU and what it's gonna look like in its final state. Laurie HunsickerSenior Analyst at Seaport Research Partners00:17:17Okay. And then what about what about deal closing? We've we've seen things really ramp up on the m and a side on deal closings just happen really, really a lot faster. Any any color on that? Nitin MhatreCEO & Director at Berkshire Hills Bancorp00:17:30Yeah. Laurie, I think, we, in the investor materials, we did say we expect the closing to be September. Everything's on track so far, so we're just awaiting the regulatory approval. And the teams are already working on the integration planning, as Sean highlighted. Laurie HunsickerSenior Analyst at Seaport Research Partners00:17:47Okay. Great. Thanks, Denton. Thanks for taking my questions. Nitin MhatreCEO & Director at Berkshire Hills Bancorp00:17:51Thank you, Laurie. Brett BrbovicEVP & CFO at Berkshire Hills Bancorp00:17:52Thanks, Laurie. Operator00:17:55There are no further questions at this time. I will now turn the conference back over to Nitin Mahatra for closing remarks. Nitin MhatreCEO & Director at Berkshire Hills Bancorp00:18:03Thank you all for joining us today for our call and for your continued interest in Berkshire. Have a great day and be well. Operator00:18:12This concludes today's conference. You may now disconnect.Read moreParticipantsExecutivesKevin ConnSenior MD - IR & Corporate DevelopmentNitin MhatreCEO & DirectorSean GrayPresident & COOBrett BrbovicEVP & CFOGregory LindenmuthSenior EVP & Chief Risk OfficerAnalystsLaurie HunsickerSenior Analyst at Seaport Research PartnersPowered by