Berkshire Hills Bancorp (BHLB) Q2 2025 earnings summary

Executive summary

• Achieved operating net income of $31.6 million, up 14% sequentially and 36% year-over-year, with operating EPS at $0.69, up 15% sequentially and 25% year-over-year; GAAP EPS was $0.66.

• Efficiency ratio improved to 56.7%, the best since 2019.

• Recognized by TIME Magazine as a top-performing mid-sized U.S. company in 2025.

• Continued progress on digital deposit growth, surpassing $100 million, and strategic initiatives.

• Shareholders approved the merger with Brookline Bancorp in May 2025, with closing anticipated in Q3 or 2H 2025, pending regulatory approval.

Financial highlights

• Net interest margin (FTE) increased to 3.27%, up 3 bps sequentially and 7 bps year-over-year.

• Net interest income rose 2% sequentially and 4% year-over-year to $91.9 million.

• Operating non-interest income up 5% sequentially and 8% year-over-year.

• Operating non-interest expense declined 2% sequentially and 7% year-over-year.

• Average loans grew 1% sequentially and 4% year-over-year to $9.5 billion; average deposits up 6% year-over-year.

Outlook and guidance

• Merger with Brookline Bancorp expected to close by end of Q3 or 2H 2025, with core system conversions targeted for February 2026.

• Estimated 40% and 23% accretion to 2026 consensus GAAP and cash EPS, respectively, from the merger.

• Projected 2026 ROAA of 1.28% and ROATCE of 16.5% for the combined institution.

• Identified cost savings of 12.6% of the combined expense base, with significant EPS accretion expected in 2026.

• Tax rate expected to normalize to 24–25% going forward.