Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q For the quarterly period ended: March 31, 2025 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-15781 BERKSHIRE HILLS BANCORP, INC. ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (Exact name of registrant as specified in its charter) Delaware 04-3510455 (State or o ...

Core Insights - Berkshire Hills Bancorp reported strong Q1 2025 results, with operating net income increasing by 6% quarter-over-quarter and 32% year-over-year, reaching $27.6 million [4][8] - Earnings per share remained flat at $0.60 quarter-over-quarter but increased by 22% year-over-year [2][4] - The company achieved a net interest margin of 3.24%, up 10 basis points from the previous quarter [2][9] Financial Performance - Operating expenses decreased to $68 million, down 4% quarter-over-quarter and 6% year-over-year, reflecting effective expense optimization efforts [2][4][9] - The loan-to-deposit ratio decreased to 5%, down 1% quarter-over-quarter, indicating improved liquidity management [2][9] - Asset quality remained strong, with net charge-offs accounting for 15 basis points of loans and total delinquencies at 42 basis points, the lowest level in about twenty years [4][9] Strategic Initiatives - The digital deposit initiative generated approximately $75 million in new deposits, with one out of five new client relationships originating through digital channels [5][6][10] - The merger with Brookline Bancorp is progressing, with regulatory applications filed and shareholder proxy submitted, aiming for stockholder approvals by May 21 [5][10] - The company sold the remaining $7 million in Upstart loans for net proceeds of $5.3 million, further de-risking the balance sheet [5][9] Capital and Ratios - The CET1 ratio stood at 13.3% and the TCE ratio at 9.9%, indicating strong capital levels [3][9] - The operating ROTCE was 9.66%, reflecting a year-over-year increase of 93 basis points despite a linked quarter decrease [2][4]

Financial Performance - The company reported operating net income of $27.6 million, up 6% linked quarter and up 32% year over year [5][6] - Earnings per share remained flat at $0.60 compared to the previous quarter but increased by 22% year over year [5] - Operating expenses were approximately $68 million, down 4% linked quarter and down 6% year over year, indicating effective expense optimization [6][18] - The operating ROTCE was 9.66%, down 27 basis points linked quarter but up 93 basis points year over year [6] Business Lines and Key Metrics - Net interest income increased by 3% linked quarter and 2% year over year, with a net interest margin of 3.24%, up 10 basis points linked quarter [12][16] - Average loans rose by $118 million or 1% linked quarter and $348 million or 4% year over year [13] - Average deposits increased by $188 million or 2% linked quarter but remained flat year over year [14] Market Data and Key Metrics - The loan to deposit ratio was at 5%, down 1% linked quarter, indicating solid liquidity [9] - Total delinquencies and nonperforming loans were at 42 basis points of loans, the lowest level in about twenty years [8][19] Company Strategy and Industry Competition - The company is focused on deposit relationships across business lines and has launched a digital deposit initiative that generated approximately $75 million in new deposits [10][53] - The merger with Brookline Bancorp is expected to enhance profitability and create a preeminent Northeast franchise, with an estimated 23% accretion to Berkshire's 2026 consensus estimates [11][27] Management Comments on Operating Environment and Future Outlook - Management noted a mixed demand environment with some clients increasing inventories while others adopt a wait-and-watch approach [36] - The company remains prepared to adapt to economic uncertainties and is optimistic about the merger's potential benefits [27][28] Other Important Information - The company sold the remaining $7 million of upstart loans, significantly derisking its balance sheet [21] - The tangible book value per share was $25.50, with a CET1 ratio of 13.3% and a TCE ratio of 9.9% [24] Q&A Session Summary Question: Update on loan demand and growth outlook - Management indicated a slowing demand in the pipeline, with a current annualized loan growth of about 5% expected to continue [36][37] Question: Expense base growth expectations - Management expressed confidence in maintaining stable expense momentum moving forward [39] Question: Clarification on spot NIM - The spot NIM in March was confirmed to be 3.31% [48][49] Question: Employee retention strategies ahead of merger - Key producers have been identified, and retention grants are being discussed to ensure stability during the transition [51] Question: Plans for aligning product offerings ahead of merger - The company is enhancing digital functionalities but does not plan to launch new products immediately [54][55] Question: TCE ratio and CRE concentration levels - The CRE concentration ratio remains below 300%, with a current level of approximately 290% [57]

The reported revenue represents a surprise of -0.61% over the Zacks Consensus Estimate of $111.12 million. With the consensus EPS estimate being $0.54, the EPS surprise was +11.11%. While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and how they compare to Wall Street expectations to determine their next course of action, some key metrics always provide a better insight into a company's underlying performance. Since these metrics play a crucial role in drivin ...

Financial Performance - First quarter 2025 GAAP EPS was $0.56, with operating EPS at $0.60, reflecting a 22% year-over-year increase[1][2] - Net income for Q1 2025 was $25,719, compared to a net loss of $20,188 in Q1 2024[26] - Diluted earnings per share improved to $0.56 from a loss of $0.47 in the previous year[26] - Operating net income rose to $27,621,000 for the quarter ended March 31, 2025, up from $25,982,000 in the previous quarter[20] - Return on equity improved to 8.63% for the quarter ended March 31, 2025, compared to 7.18% in the previous quarter[20] - Net income for March 31, 2025, reached $25,719 thousand, compared to $19,657 thousand for December 31, 2024, reflecting a growth of 30.4%[39] Revenue and Income - Total net revenue reached $110,443, significantly higher than $55,541 in Q1 2024, marking a 98.7% increase[26] - Total operating revenue for March 31, 2025, was $110,443 thousand, showing an increase from $110,180 thousand in December 31, 2024[39] - Total non-interest income was $20,672, a recovery from a loss of $32,599 in the same quarter last year[26] - Total non-interest income for March 31, 2025, was $20,672 thousand, a decrease from $23,325 thousand in December 31, 2024[39] Expenses and Efficiency - Total non-interest expense decreased to $70,366, down from $76,020 in Q1 2024, reflecting a 7.4% reduction[26] - Total non-interest expense for March 31, 2025, was $70,366 thousand, down from $77,575 thousand in December 31, 2024, representing a reduction of 9.5%[39] - The efficiency ratio improved to 59.5%, marking the best result in two years[3][9] - The efficiency ratio improved to 59.45% for the quarter ended March 31, 2025, down from 62.43% in the previous quarter[20] Loans and Deposits - Total loans increased by $44 million, or 0.5%, to $9.4 billion compared to the linked quarter[1][11] - Total loans increased to $9,429 million as of March 31, 2025, compared to $9,385 million in the previous quarter[24] - Total deposits at the end of the period decreased by $495 million to $9.9 billion, while deposits excluding payroll and brokered deposits increased by $11 million linked quarter[1][12] - Total deposits increased to $9,847 million, with a net interest expense of $53 million, compared to $9,659 million and $56 million respectively in the previous quarter[30] Credit Quality - The allowance for credit losses on loans increased by 2 basis points to 1.24% of total loans, with non-performing loans at 0.25%[4][15] - The allowance for credit losses increased to $117 million as of March 31, 2025, from $115 million in the previous quarter[21] - Non-performing loans as a percentage of total loans remained stable at 0.25% for the quarter ended March 31, 2025[20] - Non-performing loans as a percentage of total loans remained stable at 0.25% for the quarter ended March 31, 2025, compared to 0.26% in the previous quarter[33] Capital and Ratios - The tangible common equity ratio increased to 9.9% of assets, with tangible book value per share advancing 3% linked quarter to $25.50[4][13] - Common equity Tier 1 capital to risk-weighted assets increased to 13.3% for the quarter ended March 31, 2025, compared to 13.0% in the previous quarter[21] - Operating return on tangible common equity improved to 9.7% from 8.7% year-over-year[2][4] Mergers and Future Outlook - The proposed merger with Brookline Bancorp is expected to close in the second half of 2025, pending regulatory approvals[7][14]

Berkshire Hills Bancorp (BHLB) Q1 2025 Earnings Call April 24, 2025 09:00 AM ET Company Participants Kevin Conn - IR and Corporate Development OfficerNitin Mhatre - President and CEOBrett Brbovic - Executive VP & CFOChristopher O'Connell - Director - Equity Research Conference Call Participants Gregory Zingone - Research Analyst Operator This call is being recorded on 04/24/2025. I would now like to turn the conference over to Kevin Investor Relations Officer. Please go ahead. Kevin Conn Good morning, and t ...

Earnings Release Schedule - Berkshire Hills Bancorp, Inc. is set to release its first quarter 2025 earnings on April 24, 2025, at approximately 7:30 a.m. (Eastern) [1] - A conference call will follow the earnings release on the same day at 9:00 a.m. (Eastern) [1] - Participants can register for the webcast or join via a toll-free dial-in number [1][2] Company Overview - Berkshire Hills Bancorp, Inc. is the parent company of Berkshire Bank, which focuses on relationship-driven and community-oriented banking [3] - The company has $12.3 billion in assets and operates 83 financial centers across New England and New York [3] - Berkshire Bank offers a range of services including commercial, retail, private banking, and wealth solutions [3]

On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today. One company to watch right now is Berkshire Hills Bancorp (BHLB) . BHLB is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock has a Forward P/E ratio of 9.27. This ...

Market Overview - The U.S. share market experienced volatility on March 7, 2025, with most stock indices closing slightly positive despite concerns over President Trump's tariff policies and a weaker-than-expected jobs report [1] - Federal Reserve Chair Jerome Powell's statement about the economy being in good shape provided some optimism among investors [1] Investment Recommendations - In the current volatile market, it is suggested that investors consider low-leverage stocks as safer investment options [2] - Recommended stocks include BioLife Solutions (BLFS), Berkshire Hills Corporation (BHLB), NVIDIA (NVDA), The Greenbrier Companies (GBX), and EZCORP (EZPW) due to their low leverage [2] Understanding Leverage - Leverage refers to the practice of companies borrowing capital to operate and expand, typically through debt financing [4] - Excessive debt financing can lead to significant losses, making it crucial for investors to avoid companies with high debt levels [5] Debt-to-Equity Ratio - The debt-to-equity ratio is a key metric used to assess a company's financial risk, with a lower ratio indicating better solvency [7] - Companies with high debt-to-equity ratios may face challenges during economic downturns, despite strong earnings growth [8] Stock Selection Criteria - Stocks should have a debt-to-equity ratio lower than the industry median, a current price of at least $10, and an average 20-day trading volume of at least 50,000 [11] - Additional criteria include earnings growth expectations, a VGM Score of A or B, and a Zacks Rank of 1 (Strong Buy) or 2 (Buy) [12] Company Performance Highlights - **BioLife Solutions (BLFS)**: Reported a 31% year-over-year revenue increase in Q4 2024, with an adjusted operating loss narrowing to $746 million [13] - **Berkshire Hills Bancorp (BHLB)**: Achieved a 28% year-over-year increase in operating EPS and a 37.7% growth in total net revenues [14] - **NVIDIA (NVDA)**: Experienced a 78% year-over-year revenue increase and a 71% rise in adjusted EPS [15] - **The Greenbrier Companies (GBX)**: Reported net earnings of $55 million on revenues of $876 million, with an operating margin of 12.8% [17] - **EZCORP**: Announced a 14% year-over-year increase in adjusted net income and a 7% rise in revenues [19]

Loan Portfolio Growth - The total loan portfolio increased to $9,385 million in 2024, up from $9,039 million in 2023, representing a growth of 3.8%[22] - Commercial real estate non-owner occupied loans accounted for 29.5% of the total loan portfolio, totaling $2,770 million in 2024, compared to $2,607 million in 2023[22] - Residential real estate loans also represented 29.5% of the total loan portfolio, amounting to $2,772 million in 2024, slightly up from $2,760 million in 2023[22] - Construction loans grew to $726 million in 2024, a significant increase of 13.4% from $640 million in 2023[22] - Commercial and industrial loans totaled $1,439 million in 2024, reflecting a 5.9% increase from $1,359 million in 2023[22] Credit Losses and Risk Management - The allowance for credit losses increased to $115 million in 2024 from $105 million in 2023, indicating a rise in potential credit risk[22] - The allowance for credit losses on loans to total loans ratio increased to 1.22% in 2024 from 1.17% in 2023[48] - Nonaccrual loans as a percentage of total loans rose to 0.26% in 2024, compared to 0.24% in 2023[48] - The allowance for credit losses on nonaccruing loans was 469.18% in 2024, down from 492.47% in 2023[48] - Net charge-offs to average loans decreased to 0.16% in 2024 from 0.26% in 2023[48] - Total allowance for credit losses on loans was $114.7 million in 2024, consistent at 1.2% of total loans[50] - The Bank's management reported that it prefers to work with borrowers to resolve problems rather than proceeding to foreclosure[43] Interest Rate Risk Management - The effective management of interest rate risk is essential for achieving the Company's financial objectives, with the Asset Liability Committee overseeing this[346] - The estimated percent change in Net Interest Income for a +200 basis points shock is projected at 2.2% for December 31, 2024[350] - The Company's Economic Value of Equity sensitivity profile indicates a modest liability sensitivity at December 31, 2024, decreasing compared to December 31, 2023[355] Specialized Lending Operations - The Bank's commercial loan participations and interest rate swaps are part of its strategy to manage risk in commercial real estate lending[23] - The Bank's Asset Based Lending Group targets credit needs ranging from $2 million to $25 million, focusing on manufacturers and distributors[28] - The remaining portfolio of Firestone Financial LLC, which originated loans secured by business-essential equipment, totaled $41 million as of December 31, 2024[29] - The Bank's residential mortgage operations include fixed-rate and adjustable-rate loans with maturities of up to 30 years, primarily for investment purposes[31] Regulatory Measures - The supervisory measure of commercial real estate loans to total bank regulatory capital was 292% at period-end, up from 286% at year-end 2023[42]