Berkshire Hills Bancorp Delivers Robust Third-Quarter Results, Fueled by Branch Sale and Loan Growth
Berkshire Hills Bancorp, Inc. (BHLB) announced strong third-quarter 2024 results, reflecting continued momentum across key business drivers. The company’s net income reached $37.5 million, or $0.88 per share, marking a significant increase from the previous quarter. This impressive performance was driven by a strategic branch sale and robust loan growth.
Key Highlights:
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Non-Operating Gain:
Berkshire Hills realized a $16 million non-operating gain from the sale of ten branch offices in New York, contributing $0.30 per share after tax to the company’s earnings. This strategic move underscores the company’s commitment to optimizing its branch network and driving long-term profitability.*
Loan Growth and Improving Credit Quality:
The company witnessed a 1% increase in average deposit balances and a 1% increase in operating revenue during the quarter, fueled by loan growth and increased loan-related fees. The provision for credit losses also decreased by $1.0 million, reflecting positive recent loss trends. This indicates the company’s ability to effectively manage risk and enhance asset quality.*
Strategic Branch Consolidation:
Berkshire Hills has aggressively consolidated its branch network this year, reducing the total branch count by 14% to 83 offices. This strategic initiative is aimed at streamlining operations and optimizing efficiency, further solidifying the company’s commitment to long-term profitability.Executive Commentary:
Berkshire Hills CEO Nitin Mhatre expressed satisfaction with the company’s robust performance, highlighting the accelerating momentum across key business drivers. He emphasized the strategic impact of the branch sale and the positive trends in loan growth and credit quality.
Brett Brbovic, Berkshire Hills CFO, added that the company’s operating revenue benefited from loan growth and increased loan-related fees. The net interest margin, while decreasing slightly to 3.16%, remains a testament to the company’s ability to effectively manage interest rate dynamics.
Capital Strength and Future Outlook:
The company’s capital strength continues to improve, with the tangible common equity ratio increasing to 9.1% from 8.2%. This strong capital position positions Berkshire Hills for continued growth and expansion. The sale of $46.5 million in consumer loans further strengthens the company’s balance sheet, providing a solid foundation for future initiatives.
The company’s focus on strategic branch consolidation, disciplined loan growth, and consistent expense management positions Berkshire Hills Bancorp for continued success in the years to come. Investors and stakeholders alike will be watching closely as the company continues to execute its growth strategy and navigate the evolving financial landscape.
