Berkshire Hills Bancorp (BHLB) Q2 2024 earnings summary

Executive summary

• Q2 2024 net income was $24.0 million ($0.57 per share), with operating EPS up 12% sequentially to $0.55 and flat year-over-year; recognized by TIME as one of America's Best Mid-Size Companies 2024.

• Operating revenue increased 3% and operating expenses decreased 2% sequentially, driven by loan growth, higher fee income, and cost control.

• Asset quality improved, with allowance for credit losses on loans rising to 1.22% of total loans.

• Branch consolidation continued, with three offices closed and a pending sale of ten more branches expected to close in Q3 2024.

• Completed CFO transition with internal promotion; new hires in commercial and private banking announced.

Financial highlights

• Net interest income was $88.5 million, up slightly quarter-over-quarter; net interest margin improved to 3.20%, up 5 bps sequentially and down 4 bps year-over-year.

• Operating net income was $23.2 million ($0.55 per share), up 11% sequentially and down 3% year-over-year.

• Operating non-interest income rose 16% quarter-over-quarter and 18% year-over-year to $20.1 million, driven by SBA loan sales and tax credit investment accounting.

• Operating non-interest expense declined 2% sequentially and 4% year-over-year to $71.3 million; efficiency ratio improved to 63.40%.

• Net charge-offs annualized at 0.07% of average loans, down for the sixth consecutive quarter.

Outlook and guidance

• Expect to book a $19 million non-operating gain on the New York branch sale in Q3, with $15–16 million after-tax impact.

• Net interest income guidance: $352–$354 million; non-interest income: $75–$77 million; provision expense guidance lowered to $25–$27 million for FY24.

• Year-end loans and deposits expected at $9.4–$9.6 billion; non-interest expense expected at $287–$290 million.

• Effective tax rate projected at 20–22%.

• Ongoing focus on loan growth, cost control, and capital return to shareholders through dividends and buybacks.